Variety (Mar 1941)

PICTURES Wednesday, March 12, 1941 Schehck's Stalemeht .lit Tlve fifth, day of the tri^^^ M. Schenck and Joseph H. Mosko- \vrj;tz, chairman' of the - board and •astern representative of ?Oth Cen- tury-Fox. Film Corp., reispictlveiy, on chargesioi evaapn ot income tax jreturiis iQr tijft yieairt li93^-37, dosed yesi^rday ■ (:£ws:^.'^ii: }^:^.;:. federal coiirt. Mathips- F> Correa, actinE U S, attorney for the S(iuthern Dis irict 6f N. is prpsecutihg for the Goverrinient' -Yesteirday (Tuesday)/ ChlcQ.;Mar3f was called back io-^ testify; although he -had intended to leiive for Caii- ■ tqrnia: aftet VtiBstifyink toe preyipus day. iJiider c of Harold H.. Corbin, attorney for the defendants, Marx declared that he and his br<ither .signed'a Metro con- tract Oct; fli, 1934, Which could be canceUed .if' Irving Thalberg became incapacitafed iifor. four months or for mbney In N, Y, banks in; Joe Schenck's account. . She, declared Schenck Won '$15,6qo . on the Roose- velt election In 1936. She also gave her' boss, Moskowitz, fa liig send-off, stating; he woirked .night, and day covering everjr. film, legit show, cafe and night club in N; Y. for talent.. I. Sam Silver^ Schenck's barber,, tes- tifled' next .that he Teceiyed . $10 weakly from Schenck>. and .that he was paid by 20th Century-Fox which In tiirh was reimbursed by Schenck. Last witness of the day: was Dplph Schadier, head pf the Loew's tax de partriieht, who said he has be^n prp paring Joe : Schenck's return smce 1937 under; the. direction ,of Mosko- witz, He described the procedure, of markitli; up the return and stated he received a present of $150 yearly from Schenck for his work.; . . Codd was excused at the begm^ Ji M. Schenck issued a brief but to the poini statement at th« start of his trial cohcei-ning. hi? inhbcence^ . ' . • ■ : , . It said, 'I enter this trial witk: complete confidence. Np; man ever complained that I did him any. wrong, much less .have I. ever wrorigfsd ihy Governmeht* more. • • .... Marx testified that Joe. Schenck: had trieid to , get him for 20th-Fox prior tb his. signing, with Metro, but. told him- tlie; latter offer was the better one. Within two weeks of Thalberg's death on Sipt. 14, 1936, the Marx'Brothers sent a, letter to Metro cancelling their , contract upon • conciusipn of 'A Day at. the Races' which they 'wete working' on. ■ This was after talks with Edward Mannix. and Al Lichtman. • At.this-tiroe .nti gotiations were .again , opened with 20th-Fox, through : Schenck, in the iatter's office, .at his home, ^nd at other placei; thj? witness .was uqable to recall. :' .•''. ■.. .'■ Purposit of; this, sort of examina tion by Corbin is to support heavy deductions for Schenck's. fat-home and other social entertainment at an allowable deduction ^ . for business parleys, etc. ChargCB Altered Tcstiuony In rebuttal to this , testimony, Cor- xea sharply attacked the veracity of the witness, suggesting that Schenck had asked him to alter his previous testimony made. Monday (10), wheh' I he declared he had not. negotiated with Sdhenck after signing' with Metro, . and asking if Nicholas. M, Schenck, brother of • the defendant, and president of Loew's, Inc., to whom" th^ Marx Bros, were Under contract, had not influenced the change in testimony. The witness denied the charges,, and, after being .'allowed by the court to make a statement,. declared that he had visited With both Schencks Monday evening, but no mention. .Was made of the trial at all. Marx did declare he had told the Government investigator differently while on the Coast, but/declared in both instances lie told, nothing 'but the truth.'. .Quite a battle developed between defense counsel and Judge Grover MoScowitz over what Corbin called : 'sauce ior the goose being sauce for the. - gander* in implying that the court- was allowing things to be placed on the record for thfe Government that wais not being al lowed in lor the defense. ; [The court has been slapping down hard on Cor-, bin throughout ' the - trial and the ai torn^y has been assuming an attitude pf harrassed and pei-secutied resigna .■tion.J.''^'-^ ' • Comptrbller on Stand - \ John B; Codd, comptroller of 20th Century-Fox Film Cbrp/i west coast studio, took the stand for the second time after Marx left, .and the testi mony droned oh interminably, as the witness discussed: the transfer of $100,000 from Sbhencic.'s California accoiiht to a N; Y. account;, and, dis . cussed two 'mysterious' strong boxes in which, money - was kept. Only so called interesting .testimony xievel- oped, by Correa waS that iScbehck ' lost $63i894 in jgambling during 1937.' ■ Codd also ■ ■ discussed the Willie Bioff 'loaii* which he. detlared was repaid In 1937: He stated that Sept. 30, 1937,: seven checks, totaling $30,-; 905 were paid out by Schenck for .gambling losses. "These losses we^rei charged* to general expenses iii iSchenckls books. ' Catherine. SuUivan, Secretary to Jbei MQsko>yitz, Was the next witness^ Shie -was. examined by Boris Kos" telanetz,' of Cprrea's staffi and testi- fied that Nick Schenck, president of Loew's, and the defendant's brother, had power 6f attorney to sigh checks of $100,000 was gone into, Correa not coda was excusca^ situation very clear out- ning of the t^.st mony_ on Mo^^^^^^^^ ,^ .'mysterious paper bag. con^ (IQ).; to enable V'<'tf^.g^"^°"'cg?.^ ^^t^ being given Schenck tain Of Schenck s yach^^^^^^^^^ ; the. money /secretly' I hJiden in a strohghox. - U sounded teined on' board,.; carirying: /).ut _de^ ScKehck's fOverpaymients Detailed Thuirs^ ji>y Corbin oh Thursdayj Corbin opened for the defense, the gist of which was. to the \ effect that Schenck had. over paid the U.' S. by some $165,000 for the three -years of the indictment, and that. the criminal prosecution fense contention that' y acht - was a ^ business affair. Why » Taoht Is a 'She Among some of the persbnalities he mentioned were Darryl .Zanuck, Louis B. Mayer, Douglas Fairbanks, gr„ Louella Parsonsi. Constance Ben- nett, the Marx: Bros., Irving Berlin, et al. An amusing point which was brought put under, ejtamination was: , that guests were listed aS seamen if k^as 'the most outrageous thing this they were, men, and as a stewardess, courtroom haS ever seen.' if the sex was fefmale. Questioned : corbln took some time warming as to whether to call a yacht it or jiis task of jiresenting the film ex- she, the captain replied gravely, You gc^ivg-s side of the picture, but by call a yacht a she, because only a she the time he finished he had refuted is so expensive to .keep up.' . ; all Governnient arguments made on Johnson denied the existence of K^pg^jj^g ,(jay pajnted the Federal film cameras aboard at any time, and pjQsegytion a deliberate attempt stated that much entertaining was to'hang Schenck done aboard. This*was, usually done | rphen Corbin started to refute the money to pay him, and. ehtieyed. the transaction as a sale, at a toss on his ■.books. ■ •Deducted Persdnal ^xpeiueiif. . Secondly, he charged Schenck de- ducted all personal expenses as busi- ness items, mentipning Schenck's up- keep of a yacht, and his gambling, pointing out that; the <3overnmerit will claim Schenck .won heavily on the Roosevelt election in 1936, but failed to report it as a profit.: The • U. .S; attorney charged it cost, the. executive, according to his re- turns, some $89,000 to iearn $117,800 [a statement later refuted'by the" de- fense]; The •'mysterious' loan to Willie Bioff, the' Coast labor leader. Hollywood, March 11.- Patricia Mbirison ; was ; suspended fix)m: ^arartiourit's jpayioll for refus- ing .to report on the Republic lot as Gene Autry's femiBe lead In Thei. Singing Hill?.' Actress declared she didn't like the story ot th^ clpthes. , .'Virginia Dale, ;anbther..Saramount contract player, takes ov« the irole. BYipOFTHEIjp . - Chicago, iffarch 11..: Republic picture,; 'Country .Fair,' Is slated to be practically an -allf Chicago liroductlon from perform- ers to music. Lulu Belle and Scotty, for years on , WLS and National Barn IDance.. were originally set for; the picture. . and last week agent Boyle Wobllolk placed Whltfey Ford, another Chicago etherite in the pic- ture! Ford is known on the radio as the 'Duke of .Paclucah' and is on •;he .NBC-Red web each week for BroWn .& Williamson's: 'Plantation Party* program, Also set In the! t>icture last week from Chicago WaS: the new novelty tune, 'Mornin' on the Farni,' written by Chicagoan jack Elliptt aiid pub- lishedvby the hew Ghl music firm. Rtlsseli Music, Inc. This wais placed through Earl Kurtze and the; WLS Artists Bureau.. : at anchor clPse to shore,. because most people get seasick at sea.' Johnson declared he neveir knew that the yacht had been on a loan- out to 20th-Fox from. July through September, 1937, and that he took his orders either from Schenck per- sonally or from Schenck's secretary. Monday afternoon sessipn was fea- U. S' charges. ,'First let . us take the Agua Caliehte stock transaction with Roland West, it sPunded pretty mys- terious yesterday when Mr. Correa told you about it, didn't it?^he in- quired. 'Well, it isn't,' The lawyer .summarily stated the Casino wa& a gambling joint which had cost Schenck $403,000. When the lured by Harpo and Chicb Marx. ""^ ^^'^^ T^'T" S fi^st nam'ed testified he . had I Mexican government, slapped down known Schenck for 15 yeairs and during. 1936 had lived with him at Schenck's Hollywood ' home. The only financial transactions hie had with the ipfoducer Was losing $180 to him during the year in poker. on gambling, the Casino. waS worth less. Schenck had Some 67,770 shares. He hopied that the Mexican governinent might rescind its edict but felt it would not He spoke to W.est, .h lifelong -friend, and asked and winning $7,827 the same' year him if he wanted to take a chance from Schenck iii: the same game, with the stock. He offered it to West Asked if it was just luck that al- for ^50,000 but. refused to let West, his friend, take a. gamble. The stock was not worth $50,000 unless Mexico allowed gambling, so Schenck refused to accept the money from West, but , , J it. X e. V 1 I turned the stock over to: him with declared that Schenck the proviso that if the Casino could lowed hiih to roll up such large win- nings, he replied that it was a 'hand- ful of aces.' Marx Bros. Go Legal Harpo gambled extensively and won and I be reopened profitably, West was to ost arge sums. The wurt refus^^^ p^, ^i^^ otherWiSe to forget it; •• Al- to aUow-testimony to the effect that ^^^^ i^cev,ei any money Schenck entertamed . 'oyally anj U^^ ^^tered the transaction as a $50,- c 'nS^' Sfn hf SH^^^^^ sale on his books, and paid the guests, but Gorbwi, by implication, t-^,,^-„-.^^t it,,-* and repeated efforte, made the 1^.-1 U. S., Government- on that money pression on the jury's mipd questions about what happened- on Schenck's yacht, the exasperated de- fense attorney finally wound up ask ing the witness if. the: yacht, looked like a mPrgue at anchor Ai to 'Which had never been received. He "5 i" I deducted $170,000 as a loss on the entire, transaction in his tax returns for 1935. - If the Government theory is - correct, and if Schenck never actually sold the stock 'but retains Chico Marx declared he ; knew: o'V""**, ot it, then as a tptal loss Schenck.tor-15-20 years and had won today; Schenck could deduct moi;e and lost to him in playing bridge. :'rbm his 1936 tax and the balance He corroborated his brotheir's state-' L^oUld have cost, the Government ment concerning the lavish enter- $228,000 in taxes he actually paid, tainmeht. and. ' large- sunis gambled .The accusation .that: Lpu: Anger, a by . .the producer, He, . too,: was not 2pth-Fox' employee, voted the stock allowed to. ahswier a^ question by in Mexico .for .WeSt .to prove the Corbin as -to. whether , the producer point 'that the stock ha.d never, been ever failed to pay his •ganrvbling trahsfetred, was:scofted at by Cbr-' debts, but again Corbin had gotten bin, whb pointed out that Anger was: across: his ^)oint that Schenck never West's friend for 25 years, and vot*d cheated ^ anyone on his losses, leist the stock because West was in of all the Gpveirnment. [Florida: Trial opened Wednesday (5) be arns Not Crazy When Did He Go? - /. . Hollywood, March 11. Columbia sent !The Return of Dan iel Boone's into production with Bill Elliott starring and Betty Miles in the temme lead. Lambert Hillyer directs and Leon Barsha produces. HEAP Bia BUDGET Hollywood, March 11. Armand: Schaefer draws the pro duction. reins on 'Big Bonanza,' the highest budgeted western of the year pn the Replubllcr prpductiph program Peter B. Kyhe's story has been turned over to Aihswotih Morgan for screenplaying. . : •Hollywood, March 11. Those mute, inglorious. Milibiis, Giene, .Powlers, Jlichard lliarding . Davises and etcetpras whb tell their . Bunyanesqiae yarns' In press rooms, saloons and around cracker barrels are hp longer (if tiie metaphor can bet scranibled) to bliish upseen. War- ners, intent;. upon , tracking: id6.wn new, fresh, story niaterial,: has set up ;a. six-man board of scouts Who will go after :'ney -Riens' : w^^ the . avidity of: those/, gentlemen. who~:: sleuth for 'new faces'. Hal Wallis thought up the idea ; after his: return from a recent trip tp see New York shpws.; Under the lires^t .method V. pf ' ;story-flndihg, ! writers and yarns are sbught in New . York Pr-Hollywood,- with: occasional biiys and discoyerieij made' thrpugh; magazines. Wallis thinks the hinter- land might have something tp pffer. in. the way of authoring talent. ^Warners believes that; therp are; hundreds oif -newspapermen .whose- daily reporting is flilled with drama who would, if they had the proper. encouragement,: put the yarns/they talk" about, sp freely in their spare moiifients into ishape for film'stories. The six-niah board, will travel about the. country, going from Icey-cities to small towns,: fpllpwing . leads and: tips in the same 'manner pursued ~ by talent scouts.. . - All ihtie^esting possibilities will be run, down , and .interviewed;,.' If the / tip holds, up the Writer will be en- couraged tp dash bli a story. The scouts will be traveling readers who know thp studio's requirements. They'll also,help the fledgling writ- .. ers tagged for trial to fit their talents into picture story* form. Liaison between the peripatetic story-seekers- arid Wallis will be Walter McEwen, his story assistant Wallis doesn't think the plan can be proved under, three months. Warners. won't break pi^t in a rash of new writer-contracts, but they'll' sign anybody with ''^al talent, .. :, 'With America more in the mar- ket than ever for .American stories,' Wallis says, 'we iheah to look for ours whiere we can find them.' ;; fore. Jtidge:; Grpver MOscbw.itz: : At the outset pf the hearing U. S. at- torney Cprrea, who heads the prose- cution;:told the court he expected the ■•..;. SaIe.--to-'Gpetz. The- same point : held true .of the [ sale of the $133,428 investment In the' Mexican: racetrack Which Was sold for $5;00b to: William Goetz. Hefa case" to last a Week to 10 days for his top, .Schenck .refused to let Gpetz'i part/While the defense estimated the his friend, take a loss, but wrote off total Of frpm-four to six Weeks. /. the. $5,000 as though received. In- Correa. then swept into:' his open- ^"^5, the indictment charged Schenck Ing.- He; declared fii-st that the sale.hv^iofaid a $52,000. tax, cheated, the of the Agua Caliente stock; in: Mexi- V- - S.. out. of. $190,000. The Gov- co. in both the racetrack and :gam- «rn.inent agent after reviewing; the bling-casino, constituted a ftaud and situation for the year said-Schenck attemjpt oh part of the defendants to owed $5,600 more which .was prompt-r cheat the Government. He attempt- ly paid. Schenck in 1936 paid-$257,- fed tb prove his point by saying' no 000 and in 1.937 .paid $202,000. sale was actually made, buf that the In 1937 it is . pointed ' out that purchasers, Roland West and William Schenck paid a tax on $425,000 divi- Gbetz, 'never paid the $50,000 and dpnds received from 20th Century- the. $5,'D00 they . were. supposed . to,'. Fox which the Gbvernmeht itself but. that Schenck gave them the | now says is a; return of capital tax to stockholders; arid not to he charged against dividends. Thererore Schenck is due .for a refund of over. $125, 000 which he paid in 1937. A total of $517,000 was paid .in the three-year period by the executive. Admittedly Lavish In Biiisiness flhtertainment On the entertainment charges Cor- bin admitted freely , that Schenck entertains lavishly, but for business reasons. He. receives a salary of $100,000 yearly from 20th-Fpx, but in the three-yiear period niade ^2,014,000 all told. When the Government charges he paid $80,000 in expenses to make $100,000^ it shpiild say he spent $80,000 tp make over $600,000. . In 1935 his earnings: were $754,000 and he spent $150,000 in making that amount. He only deducted $22,000 as: expenses of this amount of 3% but the Gpvernmerii is not willing to allow him; anything.. : / j; In : 1936. his earnings were $563, 000, arid he spent $200,000 ;iri enter tainment in earriing that .amount'of which, he: charged off $44,000 or B% with the (ipvernment Willing to al low only $400. In 1937 he earned $697,000 and spent over; $400,000. : He took $87,000 as expenses,: with the - Gpvernrtierit willing tp : allow only $1,600, or total allowance, of $!2,000 for $2,000,- 000 in. eairnings over the three-year period. . With the/conclusion pf the .open ;ing, the .first witness was sWorrti ; He Was William J. b'Brieri, deputy ta;c clerk; in: N. Y.. who identified Schenck's returns, under exariiinatiori by Boris Kbstelanetz, assistant. U. S attorney (and brother of Maestro An dre Kostelanetz). tie Said that in all three .years the U. :S. gave Schenck permission to file late. ; Second witness was ■ Codd,* cbmp trpller of the West (joast Studios of 20th: Ceritufy-Fpx, He kept Schenck' books on the Coast,: and told of the length of; his. employment, how. he secured his position,stated he knew Rpland West, and . identified 28 packets of VPuchefs arid exhibits be fore the :trial.wa.s put over to Friday (7), at which tinie he coritiriued on the stand. ;. Battery of 31 Seribes Grind Out Sep* Scripts Hollywood, March 11. Scriiiting roster at Republic, has been increased to 31, a. new high for the year. Some of the scribes are . working on the 1940-41 program and . some are writing for next season. : List consists of Milt Gross, Jack "Townley, Joseph Hoffman, Richard Murphy, George ' Carleton . Brown, Ron Davidson,; Norroah Hall, William Lively, Joseph Poland, Jtomes. O'Don- nell, Harold Yates, Michael Simmons Lawrence >!Kimble, Olive Cooper,. Thieodore : Reeves, Adrian Johnson, Sidney Sutherland, Herbert Delmas, Doris Sctii^eder, George Yates, Janies Webb, Robert Presnell, Tay- lor Caven, Ewart Adamson, Dbrrell and Stuart McGpWan, Stuart Palmer, George Sklar, Ainsworth Morgan and Lpu Sarecky. - WANGER ADDS THIRD FOR '41-42 UA SLATE Hollywood, March .11.: ' : Walter Wanger's 1941-42 .produc* .tion program :tor United Artists tc?' lease calls' for three pictures;. orie niorie than hls 1940-41 schedule. . \ Slated to roll first is 'Sundp.wni' a tale , of : Africa authored by Barre Lyndori. Second is "Eagle Squadrpn,' with a . British- :-war . backgrori^ Wanger Is studying three o.ther story, propertips to choose his third starter. ./O ; Eflckson.lBi:k,.T.'.- Clarence Ericksbn, v.pl and trfeas- urer of Wangier productions, airrived in New York from the Coast ori Monr day :(l6) fbr two Weeks .bf conclav- ing With Urilted Artists expps on next .seaspn's plans. . , .: Simoiie's H'wood : Hollywood, March. 11. ■ rSimohe Simon, currently • In. New York, cbmes back to pictures in ,'A Certain Mr. Scratch,^ first prbduction. by Wilhani Dieterle for RKO release Thomas Mitchell,. Walter Hugton and Anne Shirley., play the top roles.