Variety (Sep 1942)

Wednesday, September 28, 1942 PIGTITBES WAR TRIMS PK FANS 21-4 Afflusements Least Likely to Be Hit Mdimting Income, Profit Taxes Pictuie and other pop priced pmusement businesses are not ex- pected to be as seriously affected as other industries, due to the low unit cost of entertainment, because of iharp curtailment in spending which is anticipated as a result of heavily increased individual Incom* taxation now being mulled in Wash- ington. Impression prevails in the trade that rationing of pleasure travel, gradual drying up in flow of goods for civilian consumption, and aome tightening up even In the food Category, will offset any decline in theatre attendance. Film company fcxeog both In theatre operation and In financial posts point to experi- ence In England, where business Is M a new high with a greater de- mand for higher-priced seats, ai an Indication of what Is to be expected In the U. S. Corporation tax measures now under discussion by the Senate ^1- hanoe Committee if adopted in cur- rent form, are viewed as not unduly disturbing for the majority of picture companies considering wartime fmergencies. The corporation tax test being given consideration is on yia basis proposed by J. Cheever Powdin, chairman of the board of Universal Pictures, who heads the pnanca commltte of the National Association of Manufacturers. It palls for a combined normal and jurtax of 40% and 90% tax on ex- cess profits. Under the proposed measure ex- qass profits are to be determined on tlie 1936-39 base of earnings. Thus companies such as Paramount, 20th- roK, Metro, Universal and Warners would be able to show a consider able profit margin before paying excess profits tax. At the same time, 4n the case of Par, 20th, Metro and Warners, allowances for. deprecia' tion of theatre properties and on capitalization would also be a fa vorable factor. RKO, showing losses during the four-year base period, would find a great measure of relief under the depreciation and Invested papital allowances, and has a long way to go before the excess profits taxes would be felt. For some of the companies, such as United Art- ists and Columbia, however, where neither a writeoff against deprecia- tion of theatre- properties can be made and where earnings for the lour-year period have not been fa- vorable, the excess profits tax would likely work a hardship. WtthCoL Jack Warner Into Actiye Service, Trilling Taking Over Hollywood, Sept. 22. Lieut. Gol. Jack Warner's exec- utive duties in charge of studio op- erations at Warners will be taken over by Steve Trilling when War- ner 13 called to full time service with the y.rmy Air Force. An- ncuncement is expected to be made Jhi.i week when Warner gets back from the east. Trilling, with Warner organiza- tion more than 15 years, has been |ft f harga.Qt..v.aucbeviUe. J)ooluogs.. in . New York and also handled studio talent biz there. He came to the studio a number of years ago as casting director and relieved War- ner of much production detail since the latter devoted considerable time W Air Force duties. Trilling will B« aided by Harry M. Warner on financial and vital policy matters and on operations staff will be Ten- ney Wright, S. Charles Einfeld, Carol Sax and other studio execs who'll function on advisory panel. All producers will clear through Trilling under a plan set up and he Will have free rein on production. Col. War .er, attached to public relations division of the Army Air Force, will likely see service at air posts here and abroad. Wage-Hour Showdown Hollywood, Sept. 22. Hearing in the Wage-Hour action filed by the Screen Actors Guild against the major studios has been set for Nov. 3 by Federal Judge Leon Yankwich. Idea of the suit Is to get a ruling on SAG'S endeavor to recover re- troactive overtime for extras who have worked In excess of the max- imum hours prescribed by the wage law. JOE S€HENCK TO RESUME FOX EXEC DUTIES Joseph M. Schenck returns to the Coast B'riday to resume his former duties in charge of operations for 20th-Fox. Meeting of the board of directors held Thursday (IT), not at- tended Ipy Schenck, reportedly was called to acknowledge unanimous decision leading to Schenck's taking up duties in his former capacity. Though not, as yet, given any specific title, Schenck is reported as the chief 20th executive officer in a supervisory capacity over all com- pany affairs. He was formerly chair- man of the board of directors, post which Wendell Willkie now holds. Willkie, owing to Government wartime and other activities, is re- garded mainly as a nominal com- pany head and it is questionable whether the Republican big-wig is set to remain at 20lh for any long- term period due to his Increasing absorption in war duties. Bill Goetz remains as veepee In charge of the 20lh studios, under Schenck. MONO BONUSDiG STUDIO HELP WITH WAR BONDS Hollywood, Sept. 22. For the first time in Its history Monogram will hand out bonuses to its employees, covering the fiscal years of 1942 and 1943. Bonus, voted by the board of directors at the an nual meeting, will not exceed 10% of the net profits before Federal taxes. Amounts for the first year will range from $100 to $1,100 and will be paid in War Bonds. Excluded from the bonus pay- ments are the president, executive director and all vice presidents of the company. NDUSTRY SEEKS Par Dickers for Selznick s Actor And Story Properties, But Has No Public Relations Committee Ponders Campaign to De- velop Higher Percentage of Patrons in the 12-18 and Above-40 Age Groups —To Offset Dislocation in Normal Theatre Attend- ance Caused by Shifting Workers to War Plant Areas THEMATIC CHANGES Calling of millions of men to the colors between the ages of 21 and 49, together with the shift of thou- sands of young workers to war In- dustry communities, has produced such a serious dislocation In the normal motion picture audience that the industry Is pondering steps to develop new potential patrons. In attempting to fill the void in the 21-to-45 male group, a campaign to make regular theatregoers of those between 12 and 18 years and the 40- to 90 age group looms. Public Relations Committee (east- ern group) of the film industry pres- ently is considering a campaign to secure a higher percentage of older (Continued on page 18) U.S.^Slough-(Hr On Soviet Reels Recalled by Deal New pact covering purchase of Hollywood product for showing in Russia has brought to the fore again the oft-repeated squawk by Commies in the U. S. and liberals that U. S. newsreels are sloughing ofT good Soviet battle footage because of a lingering odor of red herring. It is thought perhaps the new arrange- ment, which was pushed to consum- mation with the aid of the Office of War Information, may Increase the (Continued on page IS) Bearing on DA Deal for 11 Par Pix Rath?on Trend' of RKO N. Peter Rathvon, RKO prexy, who returned from Hollywood last week from his first official visit to the studio, expressed great satis- faction with the RKO pictures being made there, according to an official announcement issued Monday (21). Rathvon stated he was 'very proud' of three of the finished pic- tures—RKO pictures. SELZNICK INTl DETAILS OF SPUT-UP The dissolution of Selznick Inter- national Pictures, Inc., concluded last month, found the two top as- sets of srp, 'Rebecca' and 'Gone With the Wind,' cut up among the original SIP stockholders in ratio to their interest In the corporation excepting David O. Selznick who recently disposed of his interests- in these pix to Jock Whitney. With neither of the pix played- out, 'GWTW,' for example, has just been released In England, with at least another $1,500,000 revenue an- ticipated from this showing. Thus United Artists will continue to re- lease 'Rebecca' while Metro handles 'GWTW.' And. Instead of one profit check, to SIP, the distributors now send checks to the following SIP stock- holders: Myron Selznick, John H. Whitney, C. V. Whitney, John F. Wharton. (Jock Whitney's attorney), Mrs. Flora Miller, Mrs. Barbara Henry, Mrs. Joan Payson (all of the Whitney clan), and Norma Shearer. Balance of the SIP assets went to J. H. Whitney and D. O. Selz- nick, with the latter bidding in 'Prisoner of Zenda,' 'Garden of Al- (Continued on page IS) Indiana Bankers Protest Fox Film as 'Unfair' Indianapolis, Sept. 22. Tvyentieth-Fox's The Postman Didn't Ring' was protested as unfair to bankers by Don Warrick, secre- tary of the Indiana Bankers Asso- ciation, In an open letter to A. W. Baker, manager of Circle theatre here, where the film recently showed. Called to the attention of bankers nationally through a story carried Wednesday (16) in The American Banker, New York, Warrick's letter assailed the film as 'an unwar- ranted and unfair portrayal of the banking prof^.sslon.' because it por- trays a family of four members, named Harwood, who own and operate a bank in a small country town, and depicts 'underhanded tac- tics and unetliical methods which this family uses.' Par's 11 to UA May Top $4,000,000 Company Toppers Signaturing Final Details in N. Y. —Financing Arrangements Set Under its deal with Paramount to acquire a total of 11 pictures, with final details being ironed out in New York yesterday (Tuesday), United Artists will obtain the films on the deferred payment plan, according to reports. In this connection. UA will write checks to Par as the films are picked up for release. It will be up to UA to decide when each of the 11 films are to be turned over to the company and payments made. All are completed, however. While the amount involved in the deal will run somewhere around $4,000,000, as previously reported, an exact computation cannot be made at this time since the transaction also involves six westerns in (he Hopalong Cassidy series to be made by Harry Sherman for UA for the 1943-44 season. It is impossible to gauge to the dollar what the six Sherman westerns will cost to make but possible that ultimately the amount coming back to Par will ex- ceed $4,000,000. Understood that UA is arranging financing to the amount of two-thirds of the approximate $4,000,000 in- volved or $2,666,667 at this time, the balance to be taken care of later. UA's financing arrangements are re- ported to be through the Guaranty Trust Co, also previously reported. V. Frank Freeman, v.p. In charge of production for Par, and Jack Karp, studio's legal counsel, arrived in the east Monday morning (21) to discuss details on the deal with Ed- ward C. RaXtery, UA president, and others. Par board of directors will meet tomorrow (Thursday), at which time it is expected the UA-Par deal will be in such shape that it can be of- fered for ratification. Until then it is not officially closed. Also, since some Par stockholders may not be in the clear as to the unusual deal possibly the company may explain it to them either through public an- nouncement or the malls. While a week ago the Par-UA deal stood at 10 pictures, since then it has been increased to 11 for this year's release. As of yesterday afternoon (Tues- day ), with no further changes likely, the pictures for turnover to UA in- cluded six Hopalong Cassidy west- erns; two special features which Sherman has produced, 'Silver Queen' and 'The American Empire' and three regular program features, 'Young and Willing,' 'Crystal Ball" and 'I Married a Witch.' The nth film added to the deal during the past week was 'Young and Willing." Negotiations are reported well under way between Paramount and. David O. Selznick under which Par would acquire the rights to valu- able story properties held by the producer, as well as contracts on directors and artists. Not Indicated how much money might be involved In the deal but that It would run to a sizeable sum Is unquestioned. Selznick is said to be desirous of selling out so that he may enter into war activity, either In a civilian or military capacity though he dis- claims any such intentions. Deal under discussion with Par has no relation to the one under which United Artists purchases 11 pictures from Par for release this season and six next year, nor do the negotiations bear in any way on Selznick's financial Interest as en owner of UA. Conferences have been under way m New York since Monday (21), when Y. Frank Freeman, v.p., In charge of production for Paramount, arrived from the Coast accompanied by Jack Karp, legal head of the studio. Stanton Griffis, chairman of the executive committee of Par, now permanently in Washington on war activity, has been sitting in, among others. Barney Balaban, Par presi- dent, was not in town Monday (21) or yesterday (Tuesday) but is ex- pected to be at his office today (Wed.). Believed late yesterday (Tuesday) that efforts were being made to reach a rapid agreement on the Par- Selznick deal so that it might be placed on the agenda of a Par board meeting scheduled for tomorrow afternoon (Thursday). Scripts Included in the story properties under the deal are said to be 'Clau- dia.' 'Jane Eyre' and 'Keys to the Kingdom.' rights to which Selznick owns. Director contracts are with Alfred Hitchcock and Robert Steven- 1, while player tickets include Joan Fontaine, Vivien Leigh, Ingrid Bergman. Dorothy McGuIre, Valerie Hobson, K. T. Stevens and Alan Mar- shall. Players on the Selznick con- tract roster during his long period of inactivity have proved lucrative nveslments through loanou's, a re- cent loan having been Mi53 Bergman to Par for 'For Whom the Bell Tolls.' Becoming an owner-member of UA a year ago, committed to pro- duce pictures for that company over a 10-ycar period, Selznick has an- nounced production starts on 'Eyre' and 'Keys of Kingdom' on various occasions, but they never got the gun. Chatkin Makes Own Pix for His Houses; Now CoL Producer Hollywood, Sept. 22. Dave Chatkin, former operating head of Paramount-Publlx under Sam Katz, is making his debut as a producer at Columbia In 'One Dangerous Night' after two years on the lot observing {jroductlon tech- nique. Meanwhile, Chatkin retains his in- terest in the Monarch circuit of indie theatres in Ohio, Indiana and western Pennsylvania. COL. HAS BORROWED $4,100,000, SEZ SEC Securities & Exchange Commis- sion revealed last week that Colum- bia Pictures had borrowed $2,800,000 as of Aug. 31 under an agreement with banks dated June 3, 1942. Under this agreement the corpora- tion has access to a maximum of $4,100,000 In loans.