Variety (Sep 1939)

16 VARIETY PICTURES Wednesday, September 6,- ] 939 If Film Biz Answers the Gov't's 68 [atones, in Anti-Trust Suit U. S. Wifl Just About Know It All Interrogi tury-Fox, by Dwight, Harris, Koegel & Caskey, of New York City; Loew's, Inc., by J. Robert Rubin; RKO Radio Pictures, by William Mallard; United Artists, by O'Brien, Driscoll & Raferty; Universal, by Charles D. PrunUman; Columbia Pictures, by Schwartz & Froelich, and Educa- tional, by D. I. Johnston. . The Department of Justice on Fri- day (.1) nied a list of 68 interroga- torie.s covering 32 pages of type- written matter in the N. Y. federal court,, in connection with the Gov- ernment's anti-trust action against the majors. The purpose of the questions iS to secure every possible bit of information concerning the ac- tivities of the Him companies. Each cjuestion has a long list of sub- divisions, and should the companies answer each question the Govern- ment will have more information concerning the structure and func- tioning departments than it could hnve secured in years of investiga- ' tion. ' The questions are directed at. Paramount, Loew's, Inc., Metro, RKO-Radio. Pathe News, Van Beuren Corp., RKO Proctor Corp., RKO Midwest Corp., KAO Corp., Warner Bros., Vitagraph, Vitaphone Corp., Warner Bros. Circuit Management Corp., 20th Century-Fox, Movie- tbnews. National Theatres Corp., Co- I lumbia Pictures, Screen Gems, Inc., Universal Pictures, Big-U-Film Ex- change, Inc., and United Artists Corp., and sundry subsidiaries. The questions are divided into groups including , organization, pro- duction activities, lending of talent and production assets, distribution activities, exhibition activities, and hi.story of each defendant. In the first group, the defendant companies are asked to state the date of their incorporation, the state in which they were incorporated, and I the purpose for which they were incorporated. They must state the principal executive officers, and all | branch officer, and the location and ! address of each exchange maintained ' since Jan. 1, 1928. i The name of the manager, as-1 sistant manager, and booker, of each I exchange is requested, as well- as a : li.st of their duties and term of em- j ployment. i The names of .'all directors and of- ficers are asked as well as those of i persons performing similar func- j tions. Stock Setup Next, the total amount of author- ized'and outstanding stock, and the rights given to the stock to stock- holders. The total amount of fixed indebtedness is desired, as is the total amount of all .current loans, listing all those persons or'corpbria-. tions who made the loans which . total $10,000 or more, as well as the terms and dates made. The names of the 20 largest stock- holders of each class of stock, and the dates of acquisition are sought. Then the names of all other cor- porate defendants in this action or their subsidiaries, which have issued any securities, together with dates issued and the amounts, are sought. A li.st of all subsidiaries who are creditors is sought, together with a list of those subsids in which the parent company is the creditor, to- gether with the amounts of indebted- ness. The names of all creditors who participate in the management of the defendants, together with the amount of participation, and the amount of indebtedness is the next question. A request for the de- fendant's gross incomes for the years 1935-1938 is sought, with approxima- tions of ih^ percentage derived from production, distribution and exhibi- tion, together with the total net earnings or losses for the year is also requested. Snbslds Then follows a request for the names and addresses of all corpora- tions, partnerships, or individual en- terprises, in which the defendants own financial interests' directly or indirectly, which are engaged in pro- duction, distribution, exhibition, and any other phase of the film ,industry. A breakdown asks for the form of the organization, capital invested, number and location ' of offices, amount and. percentage of outstand- ing stock held by the defendants, same as to bonds, date of acquisition by the defendants, and names and addresses of persons from whoni Ihey were acquired. Identical ques- tions are then asked regarding any partnership . corporations, associ- ations, individual enterprises, or holding companies, which own inter- ests in the film companies. The next questions deal with the production activities of the com- panies. It fir.<;t requests a list of all features produced by the defend- ants or their subsidiaries for each year beginning with the 1919 season to 1938, including the title of the pic- ture, the number of stars and their names, the approximate cost of pro- duction, and the name of the dis- tributor. Next heading is lending of talent and production assets. Here the U. S. requests the date on which the defendants first lent to any other producer, a star, featured player, or technician, and wants the names of the first five persons lent, together with information as to whom they were lent, and the dates. Loanouts Next is a request for a li.sting of all instances in which personnel was lent, from Jan. 1, 1933, stating at the same time the name of the person involved, the date of the loan, the period of the loan, the name of the producer to whom the person was lent, the name of the film in which the person participated, the terms, financial or otherwise, governing the loan, and whether the loan was made under a written contract. In connection with the loans, state whether any arrangement was made whereby the company doing the lending would share in the profits of the borrower. Also all terms un- der which the monty was to be split, if the answer to the preceding ques- tion is in the affirmative. Other interrogatories have to do with every phase of the business from theatre operation to distribu- tion; chain operation, theatre opposi- tion, pooling and competition; studio setups, talent and general produc- tion details. Paul Williams arrived in N. Y. yesterday .(Tues:) to confer with senior federal judge .Tohn C. Knox about securing the Government preference date of Nov. 1 for the start of the trial of the anti-trust action against the film companies. Indie {Sues Interstate Dallas, Sept.. H. L. L. Dunbar, operator of Cliff Queen, nabe, filed suit last week against Interstate Circuit for dam- ages totaling $54,443 plus $5,000 at- torney's fees. Dunbar alleges In- terstate pressure on distribs caused them to demand second run films take 2Sc admission, whereas his price had been 20c and also that circuit brought about ban on. double fea- tures, which he had been showing to advantage. Added he was making about $6,000 a year profit on house until alleged gimmick started three years ago. Behind the Scenes^ .Continued from pace 1_ LAI'S 40 TO 45 HOUSES IN PAR RENEWAL A deal is near to closing for a re- i newal of the partnership arrange- ment which Paramount has with Ar- thur Lucas and William Jenkins, covering a group of southeastern theatres. Set up during the reor- ganization, a total of between 40 and 45 houses, all of them in Georgia, are involved in the Lucas-Jenkins-Par combination. I Both Lucas and Jenkins are in : New York discussing a term renewal, probably for five - years, with Par theatre operating and administrative executives. Leon Netter, Leonard Goldenson and Montague Gowthorpe - of the honie office were in Atlanta a week ago looking into phases of the re- newal, Lucas and Jenkins following them on to New York with a view to an early closing of the contract. 16 in Momand's $4,500,000 Trust Suit File Answers Oklahoma City. Sept. 5. Sixteen derenaants in the $4,300,- 000 anti-trust suits of A. B. Momand have filed their answers in Federal district court here, all covering the same points and all general defenses similar. The answers, state that Momand's complaint fails to state a cause of action against the defendant upon which relief can be granted; that the assignments to Momand are against public policy; that Momand is not the real party in interest, as re- quired by the laws of Oklahoma, in the prosecution of a cause of action in any civil proceedings; that Mo- mand failed to comply with Rule 9 of the Rules of Civil Procedure for the District Courts of the United States which requires that, when items of special damage are claimed, they shall be specifically statisd. Most of these points were pre- viously touched upon in previous motions and overruled by Judge A. P. Murrah at the time hearings were held on the various defense motions. The answers also deny each and every material statement, averment or inference in the complaint of any combination, agreement, contract, monopoly or conspiracy on the part of this defendant, and denies that it has, or is, violating any section or ' sections of the act of July 2, 1890, comihonly known as the Clayton Anti-Trust Act Names of the various defendants' New York legal counsel we're en- tered upon the answers. This is the first time during the case that these "attorneys have been presented, all previous actions being handled sole- ly by local coun.sel. Defendants who filed separate answers and the legal counsel (besides Keaton, Wells & Johnson locally) of each is as fol- lows: Griffith Amus. Co. and Con.<!oIi- dated Theatres, Inc., by Henry Grif- fiing and J. B. Dudley; Paramount Pictures, by Austin C. Kcough; Pub- lix Theatres, by Keough; Warner Bros., by Robert W. Perkins; Vita- phone and Vitagraph, by Perkins; WB Theatres, by Perkins; Pathe Film, by Phillips Jk Nizer; 20th Cen- FRELS WOULD ENJOIN OPPOSITION'S BLDG. San Antonio, Sept 5. An injunction was filed by Rubin Frels, seeking to restrain building of a hew theatre in Victoria by the J. G. Long and R. E. Griffith theatres, also including the Jefferson Amus. Co., because of alleged restraint practices. This has been postponed in the state district court to allow some time to compile case records. The postponement also carries with it a temporary restraining order that the Long-Griffith combo may not proceed with their new house until the hearing Is completed. ' R. B. Weatherall, owner of the Plaza, Madisonville, Tex., will open a new house at Teague in competi- tion to J. C. Long circuit. This is in retaliation of house opened in Madi- sonville by Long. Leaman Marshall, together with Robb & Rowley, reopened the Iris, Terrel, Tex., after being closed for remodeling. A. B. (Dock) Rhodes, affiliated with Jefferson Amus., opened new house at Jasper, Tex., Sept 1. New House at Port Arthur, Tex., being planned by L. M. Threet New Interstate house at Austin, Tex., known as the Austin, opened. Plans call for new house at Houston to open in December, also one in Tyler and Port Arthur in near fu- ture. The Palace, old legit house at Wichita Falls, being modernized. Par Board Meets SepL 11 Regular meeting of the Paramount Pictures board of'directors sched- uled for lajit Thursday (31) was postponed. With Stanton Griffis and Adolph Zukor away from N.Y. there was lack of a quorum. Next session takes place on Sept. 11. Benedict's 'Curtain Call' Hollywood, Sept 5. First associate producer as.sign- ment for Howard Benedict at RKO is Howard J. Green's 'Curtain Call,' which Dalton Trumbo is scripting. Benedict recently was Upped from the publicity department. must have been advised of the grim sentiment in the actor ranks—a sen- timent that made an overwhelming strike vote at the New York and Hollywood mass meetings virtually certain. CIO Threat Worried by the USTG activities I on the outside and by dissatisfaction from certain groups within their own ranks, the lATSE officials were un- doubtedly in a precarious spot The Four A's leaders were also intensely worried Friday and Saturday nights (1-2), so the struggle boiled down to a question of pressure and a con- test of nerves. But apparently the lATSE heads couldn't afford to risk a general strike, particularly if the Four A's were to tie in with the USTG and the CIO. The puzzling aspect of. the affair is why the stagehand execs con- sented to such a complete surrender, when only a short time before they had flatly rejected much more ad- vantageous terms. As late as nearly midnight Saturday night (2) George E. Browne, IATSE presider\t, turned down in about 10 one-syllable words a League of New Yofk Theatre mediation offer based-on the terms of the William A. Green-Matthew WoU plan. Yet only about four hours later the lATSE capitulated on every vital point at issue. ' What has not been fully explained is What took place in that four-hour time difference. ■ The Four A's sensed it was on the verge of vic- tory, for the leaders are understood to have notified the lATSE that the Green-Woll plan was no longer ac- ceptable. Major film and broadcasting com- pany heads also were trying to bring an accord. But the actor representa- tives refused to give in to the pres- sure on the ground that tlie very ex- istence of their unions was at stake. Bloa Ancle Another matter for speculation is the Screen Actors Guild letter to William Bioff, thanking him for bringing about the peaceful settle- ment. Having had a magazine edi- torial of thanks to the lATSE back- fire only two years ago, the Guild would hardly make such a move without good reason, particularly in view of the organization's recent violent personal attacks on Bioff and the fact that he's been mentioned as being a subject of Government in- vestigation on income tax charges. Public expressions of gratitude in such a case hardly come under the heading of casual let-bygones-t>e- bygones gestures. That letter may have been a price for surrender. If so, the Guild of- ficials undoubtedly would not have felt justified in making an issue, probably involving a strike and the jobs of more than 100,000 people, over a letter of the sort After all, the Guild and the Four A's weren't interested in Biofl's background as long as he was concerned only with the lATSE. It was when the stage- hands' union threatened to take over the actors that he and Browne be- came issues to the Four A's. The settlement itself was reached on the Coast about 4 a. m. (EDST) Sunday, but the actor heads re- mained in the Four A's office in New York all night, conferring by phone with those huddling in Hollywood. The session in New York finally' broke up about 8:30 Sunday morn- ing. After that, it was merely a question of keeping the settlement a secret until Sunday night, in ac- cording with the terms of the agree- ment N. T. Meeline Tense The announcement was made by Frank Gillmore, Four A's president in a dranriatic speech at the mass meeting: Sunday night at the Astor hotel, N. Y. About 4,000 people were crowded into the main ballroom of the hotel, filling every available seat on the main floor and two bal- conies and crowding the aisles and sides of the room. Even so, it was estimated that nearly a 1,000 more were jammed into the hotel lobby, unable to get iiito the meeting. Oth- ers were still arriving as the session ended. As the Four A's heads filed onto the stage at about 9:45, with Gill- more in the lead, it was evident that the a.ssemblage was in a highly emo- tional state. The entire audience stood and cheered for several min- utes as the Four A's officials and such stars as Katharine Cornell, Tal- lulah Bankhead, Katharine Hepburn, Adolphe Menjou and George Raft took chairs on the stage. It had been rumored that lATSE adherents in the audience might break up the meeting. The Four A's had arranged for 30 police and more than 100 I strongarm deputies to watch for any ' attempt to disrupt the proceedings. But nothing untoward occurred. To circumvent troublemakers in the audience there were no speeches. Gillmore merely read the joint Four A's-IATSE statement listing the terms of settlement and asked that there be no bitterness o. crowing over the victory. As the audience cheered each point, he ' concluded with the plea, 'Let us all work to- gether for the future and glory of the American theatre.' In the excitement Gillmore forgot to read one page of his speech. That referred to plans for reorganizing the Four A's into 'one big union' to do away with duplificat; o. mem- berships and dues. Attc - the meet- ' ing, the boards of the' Four A's af- filiates met to ratify the settlement rn.-ts It was estimated by Four A's execs that the entire fight cost the actor unions around $15,000, exclusive of the iorganizing fund of $30,000 loaned to the American Guild of Variety Artists by Equity, Chorus Equity and the Screen Actors Guild. That in- cluded such expenses as renting halls for meetings; hiring a special plane to fly the Hollywood delegation to Atlantic City and back; trips back and forth across the country by Ralph Morgan, SAG president, and Kenneth Thomson, executive-secre- tary; hotel bills and other expenses for the film group in New York and similar outlays for the trips to At- lantic City; legal fees; phone bill.<i, including countless cross-country calls, and a host of other m.nlters. Figured the lATSE also had some expenses, but nothing like tho.>;e in- curred by the Four A's. F. & M. SETS NEW 10-YR. LEASE ON PAR, L. A. Hollywood. Sept !1. Mike. Marco, head of Fanchon & Marco, is back from New York where he negotiated a new 10-year lease of the Paramount theatre here, together with a 10-yeai- franch i.«e as. a first run outlet locally for Par pictures. Paramount theatre, operating late- ly on straight sound policy, will lirobably continue .straight pictures, unless Marco is «ble to secure-■ scale reduction from stagehands and resume vaudfilm. Original plan to close down the house lor several weeks for complete remodeling will likely be deferred until just before the Xmas holidays. Deal Is on for the takeover of th» Los Angeles, subsequent run here, by Metropolitan Theatres. Inc.. oper- ating company for principal the- atres, in association with Cohen Bros., group of downtown second and third run houses. The L. A. was built some years ago by Wil- liam Fox and has been operated by Joe Leo. ^Leitjr* Ruling Continued from page 5 decisions of the supreme court, are held not to be controlling, and the past case is held to be a proper one for opportionment, the plaintiffs should be allowed to present evi- dence isefore 20% of the property is fixed as a yardstick. The ruling laid down by the court allowing the copyright owners 20"o of the net is not only irriproper and inadequate, continue the plaintifT.s but constitutes an open invitation to plagiarisnfi, since it would enable a deliberate plagiarist to pirate liter- ary material, without fear of the consequences. Pictures with star cajsts and poor stories have been boxoffice failure.^, while, pictures with good .stories and without starred actors have been boxoffice successes. In order to show the importance of the story, the plaintiffs concluded their unsuccessful attempt at a rer hearing by citing four plays costing the film industry $200,000 or more, three costing $lS0,000-$200.000, and 11 costing $100,000-$150,000. The case of 'Ben Hur,' netting the Wal- lace family over $4,000,000, was cited, as was 'Abie's Irish Rose.' which was sold for $300,000 plus 50% of the profits.