Variety (Sep 1939)

1 VARIETY PICTURES Wednesday, September 6, 1939 Criminal Action on Fox-W.C. Consent Violation More Proof That U. S. Not In Any Mood to Dicker With Pix ESTIMATE FILM EARNINGS Poor's Sarvry on FotcntlalitlM af Four Issues Washington, Sept. 5. 'Even If he got around to begging President Roosevelt to call off the Federal hounds making life tough for the film industry. Will Hays ap- parently has little hope of smooth- ing the way for the major com- panies under fire from the Justice Department or the individuals being harassed by the Inteirnal Revenue Bureau. That is the conclusion of observers who sounded out the va in seeking either fines or sentences for the heads of the various cor- porations involved in the Fox-West Coast case he has served notice on the industry the D. J. is not merely playing in the four injunctions, so far docketed. . The willingness to crack down was regarded as an ad- monition to the majors that the equity proceedings will be pressed aggressively. In explaining his motives, Arnold rious Government agencies after the declared that the Justice Department head of the Motion Picture Pro- wants to compel respect for consent ducers and Distributors of America ! decrees, while another major goal is paid an unadvertised call at the j 'to recreate a situation in which the White House a week ago (28). independent exhibitors may corn- Any likelihood that the U. S. Com-' pete on equal terms' with the favored merce Department will make efforts I circuit. There appears little doubt to work out a trade praptice code | he wanted to dramatize the serious that would satisfy the Justice De partment was ruled out by com ments of spokesmen for both agen- cites. Meanwhile, the filing of criminal contempt citations against hess of the New. York action and the supplemental suits against three sets of sectional chains; Reviewing the 1930 action which led to the consent decree, the trust- 13 companies and 54 individuals in I buster eniphasized that the defend- Los Angeles was regarded as def- inite proof the New Dealers have gone so far that no truce is possible. The Commierce Department, which has been 'studying' statistics and other factual information collected from various quarters for several weeks, was distinctly surprised at, the suggestion it might become a biiffer. Officials emphasized that, while Secretary Hopkins and his ants surrendered, agreeing to the in junctioti against 'this conspiracy' to restrict competition in the Los An- geles area. He referred to the flood of squawks from Southern California indies, remarking that the depart- ment finally launched 'a comprehen- sive field investigation' which led agents into the offices of virtually every company. In the course of the Investigation, brain trust are anxious to be of aid considerable evidence has been de to the industry, they will not be in veloped indicating that seven major a position for many more weeks to offer concrete suggestions or even receive any proposals. Furthermore, their primary concern is to smooth out difficulties that are holding up economic progress, not the settling of legal feuds. No date is .set eyen yet for further meetings between Prof. Willard Thorp, the chief Hop- kins adviser, and representatives of majors, affiliated exhibitors and in- dependent producers and theatre- owners. So Far, No Dice So far the Commerce Department has had little success in solving any trade practice troubles. Although four or five industries have been asked to lay their, difficulties before the economic clinic, results have been conspicuously meagre. In the case of one business, the pacifiers have thrown up their hands. Revealing he had seen Hays dur- ing the industry leader's brief visit, Attorney General Murphy insisted there is no change in the Justice Department's plans. Subject of distributors have given to Fox-West (Continued on page 45) Murphy s Huddle In LA. to Cover Fflm Situation Washington, Sept. 1. Conference about resuV.s so far of the investigation launched in Los Angeles three weeks ago were planned this week by Attorney Gen- eral Murphy. While on the Coast for a political speech he will review with Charles H. Carr, his special assistant, evidence accumulated .on Consolidated Film Industries will show approximately $1.70 earnings on the preferred and a deficit of about 25c on common for 1939, ac- cording to Poor's Survey. Further payments -.against preferred stock arrears is a possibility, iiefiecting an increased volume of printing and developing business. Annual report of Technicolor, Inc., is expected to show earnings of around $i on the common. Cash position, is good and production schedules for '39-40 will result in a greater volume of contracts than the previous year. Whether this gain will be ".rellected in a proporionate rise in earnings is uncertain, since production costs have gone up. Afga-Ahsco 1939 earnings should exceed $2 on common with a fair- sized dividend in prospect. Elimi- nation of loans due the parent com- pany through preferred stock issu- ance under the recent inerger, should prove beneficial. Earnings of General Theatres Equipment Co. for this year are es- timated in excess of $1 on the capi- tal shares. Company expects a sub- stantial increase in business the last half of 1939 when theatre construc- tion and renovation activity begins. Speculation Trend In War Stocks Hits Amus. Issues Hard alleged labor racketeering, tax eva- uepanmenis pians. suojcct oi ^j^^ conspiracy to stifle unions, and trade practices, anti-trust suits and .p-j- nractiee<! other broad problems in which his people are concerned was never even mentioned at the short parley, Murphy slated. Nor has any word came from the White House to lay off or .slow down. 'Not Even James Roosevelt' The general view here is the Fed trade practices, Preliminary reports have been re- ceived from Carr since he began work. Murphy said Thursday (31). No hint whether the special sleuth has struck pay-dirt. When asked whether it is certain yet that evi- dence will be laid before a grand jury later this month, the A. G. re- eral Government has gone so far U.arked significantly he will see Carr that nobody can save the industry lots of grief, principally in the form of trials and preparation for court proceedings. Not even James Roosevelt, who is given a much better chance than Hays of being a successful fixer. The anti-film cru-. sade now has become the most im- portant part of the general drive against monopolies—far overshadow- ing the assault on the oil industry— and it must be fought to a finish, even if the Government loses. That's the way the situation shapes up to veteran watchers. The contempt action in Los An- geles should be conclusive proof that Prof. Thurman Arnold, assistant at- torney general in charge of trust- busting, is determined to go through, observers declare. It's so unusual as to be sensational for the Justice De- . partment to seek criminal penalties ■. for individuals who welch on their | promises. And the fact that a two- year probe preceded the filing of the complaint shows the Justice people ^ feel the West Coast situation is; pretty serious. j SignlAcant Move Use of this weapon in Southern California had even mof-e signifi- : cance. It was recalled that so far Arnold has preferred to launch. equity proceedings to correct sit- i uations which he feels are contrary \ to the'.public interest and has ex-: plained' the department believes . no | sound purpose would be served merely by jailing individuals. ]9ut' V. hile in Los Angeles the end of the week, AI Christie Digging B.R. (or Eastern Prod. Selling of stocks, other than 'war- baby' shares, the last three days last week swept a large group of amuse- ment stocks and bonds to lowest prices this year. Declines were not so much in fear of decreased earn- ings as the desire of market traders to shift from them Into infiationary shares. These included food stocks, packing company issues, steels and all others expecting the European conflict to improve their business. Some of the hardest hit film stocks were off six points or more at one ^juncture last week. Loew's common, always an active leader among amusement shares, slid to new low ground for 1939 and then recovered part of loss. Twentieth-Fox com- mon was off several points at one time. Typical of the desire to get out of preferred issues, always ne- glected on inflationary moves, were the severe losses chalked up by many film company preference stocks, including Paramount first preferred, 20th-FOx, Warner Bros, and others. Universal preferred, only U shares listed on the stock ex- change, bucked the trend for a while and then slid bacW. Picture bonds, also rated as having no potentialities in an inflationary drive, suffered large losses. Trend indicates the greatest weak- ness in issues of companies having theatre operations abroad and those bound to be affected also by any substantial dip in distribution income in Great Britain and France. Traders obviously were dubious over the ability of picture companies to main- tain present earnings. However, considerable weakness was attributed to the desire by the trading fraternity to shift into shares with patent inflation prospects. Mar- ket vets did not anticipate a con- tinued decline in amusement shares, however, even hinting that the play in inflationary wartime stocks might shift to the amusements. Can Mean Jail Sentences Officials of the Department of Justice . In N. Y., commenting olT the record on the criminal actions started against the majors by the Gov- ernment, for alleged violation of the Fox-West Coast consent decree declared that should the U. S. win. its action, it is very possible that some of the most important executives in the film industry may bo jailed tor three-six months. It is up to the California courts to decide whether or no the viola- tions are sufficiently serious to warrant punishment of this sort. In lieu of that, fines which might total into the thousands can be im- posed, although in that case, the flnies would be against the companies rather than the executives. Canadian Fihn Selfing Apace Despite War; Other Product Deals FREEMAN BACK TO COAST PAR STUDIO In behalf of the Paramount studio facing various important production problems, no.w heightened by the outbreak of war, Y: Frank Freeman, in charge of the plant, left yesterday (Tues.) for the Coast. He had been- east a week conferring with' Par home offlce executives, including Barney Balaban and members of the theatre department, on current pro- ducing problems, the world situation, budgets, fall film-making plans, pol- icy, etc. This was Freeman's second trip east since taking over the reins at the studio, a prior first trip having been for the purpose principally of closing a permanent, partnership deal with E. J. Sparks over Florida the- atres on which he had started nego- tiations as theatre department head several months previous. Al. Christie, former Educational shorts producer, is. currently at- tempting to set the financing of a series of features to be turned out in the east. Eastern Service Studios at Astoria, L. I., which would be used for the production, is understood willing to advance a portion of the coin. 'Becky' on Her Way Hollywood, Sept. S. 'Rebecca' rolls at Selznick-Inter- national tomorrow (Wed.), Gladys Cooper playing the femme lead op- posite Laurence Olivier. ■ British actress was a last-minute addition to the cast. Extras $4t Ahead of Last Yr., Near All Time Hi Hollywood, Sept. 9. Film extras earned $400,000 more during the first eight months of 1939 than they did in the same period last year. Wages totaled $1,598,745. If the average is maintained for re- maining four months, it will set an all-time high for atmosphere players. . Figures released by the Screen Actors Guild show a total of 211,966 placements, compared with 173,956 for the first eight months of 1938. June was the high month, with 34,946 jobs passed out by Central Casting. Following is a month-by-month comparison of placements: 1938 Jan., 15,655 Feb., 23,226 March, 15.326 April, 18,531 May, 23,958 June, 27.418 July, 29.318 Aug., 20,524 1939 Jan., 21,253 Feb., 25,280 March, 24,204 April, 22,918 May, 27,596 June, 34,946 July, 32,229 Aug., 23,540 Other News of hiterest to Fihns AFRA-RWG huddle , Page 22 Hedda Hopper's peeve Page 22 'Pinnochio' air scrap.....' ......Page 22 SAG sets 672 film people for radio Page 22 Extend Wrigley-RKO-Lasky show Page 23 NAB'nixes RKO's radio publicity Page 23 War worries U. S. radio biz.i... Page 23 Rudy Vallee's time Page 24 Broadway's 10 strawhatters. Page 43 TMAT row Page 43 WB's Triple Oomph Hpllywood, Sept. S. Warners picked three stories for Ann Sheridan, first of which is 'Dan- gerous Curves,' a solo starrer. Other two are 'Torrid Zone' and •Married, Pi^lty and Poor,' co- starrer with George Raft. SAILINGS Sept. 6 (Rio de Janeiro to New York), Sam E. Morris (Brazil). Sept. 2 (San Francisco to Hono- lulu), Jeff Lazarus (Empress of Canada). Sept. 1 (London to New York) Jane Baxter (He de France). Aug. 31 (London lo New York), Herbert Yates, Gene Autry, William Saal (Manhattan). ARRIVALS (At the Port of New York) Mr. and Mrs. Harry M. Warner, Mona Barrie; Tyrone Power, Anna- bella, I. A. R. Wylie, Margaret Cul- kin Banning, Norma Shearer, Grace Moore, Douglas Fairbank.s, Sr., Lady Ashley (Mrs. Fairhpnks), Mr. and Mrs. Bob Hope, Madeleine Carroll, Edna B«st, Mr. and Mrs.'Edward G. Robinson. Montreal, Sept. 5. Film sialesmen for major distribs reported this week that exhibitors are buying^oduct for the new sea- son as usuaClihticipating normal, or better, business despite tlie war in which the mother country is in- volved. That their expectations will be ful- filled is given weight by experience following the outbrehk in 1914. It is believed show business, on a whole, will lose little by the trouble abroad. I is possible that r.iany theatres may drop double features either be^ cause of a cut In Hollywood pro- duction or an. eventual shortage of manpower. Walter Thompson, publicity direc- tor of the Canadian Nalioniil Rail- ways, has been named chief cenaor by the government. He will heiui, for duration of war, a central cen- sorship organization established to control Information via films, radio, telephone and telegraph. Thompson is a veteran new.tpaper- man with a wide acquaintance in the United States. He handled pub- licity for the American lour of the King and Queen of England during the spring. Radio Kept 'Em Home Winnipeg. Sept. 11. Film men had an excellent chance to observe the effects on the box- office of a European war or crisis in this city during the p:!.";! week. Houses in all parts of the city look a beating' at the gate, .some report- ing as much as a 25% dip. However, they admit that biz is gradually working back to normal. In all cases, theatre men state the slump was noticed the minute radio stations started pumping out flashes on the European situation. Potential' customers remained home, glued to their radios. On the other hand, radio stations in this area note an improvement of business, rather than a drop off. How- ever, they state this has been going on for some weeks and new accounts are continually coming in regardless. Both CKY and CJRC admitted lociil spot business had been affected lo some extent, but not very noticably, as one official stated. Mono Rep Deals George W. Weeks has closed Monogram product deals with Inter- slate and Texas Con.solidated The- atres, Atlanta; Cumberland Amu.'-e- mcnts, Tenn.; Forkey Circuit, Mass.; John Keogh, Los Angeles; Baehr Bros., Minneapolis, and Hall Indus- tries, Inc., Dallas. Republic has closed for its pic- tures to play in 50 WarneiV Pacific Coast Circuit houses. J. R. Graiiiger, POrte Major, Grover. C. Parsons and Francis Bateman sat in. Distribs Sue Indie Minneapolis. Sept. 8. When Richard Lalshaw sold his Hamline theiatre in St. Paul he failed to pay for pictures which he had bought but failed to show, accord- ing to allegations of four local dis- tributors. The distributors are suing Lat- shaw to collect on the contracts. L. A. to N. Y. Hurry Ackerman K.'ite ]:>lu)riberK ITrrbert HraUe Mlnnte Diipree Arthur Ebcnntelo William Fox Oofffo Frank JvidRo J, Uoldherg John UUVk Jr. ■ ■B. .1. Kiilcn Al l\nitrp:iin Artliur Loi^vv AH"!' JMu i- Alilltr rrvlnc; MIIN Edward Srhrllliorn N. Y. to L. A. Anndliella .M. Arnifllrong' .Irthn Hoal John Ehierf Tfenry .Tnlff 'ryrittip Montr Gcor»;o. ItAfl