Variety (Nov 1942)

MISCELLANY- Wcdncedaj, November 4, 1912 15 Top Agencies With $6,000,000 To $7,000,000 Yearly Fees Hard Hit By Wage Freeze; Commisii Deductible? Holljrwood, Nov. 3. The 15 top agencies which handle around 90% of the business for cre- ative artists In the studios and tor radio In Hollywood, commissions on which run between $6,000,000 and $7,000,000 annually, sot the hardest wallop of any in town with an- nouncement of the $25,000 freeze de- cree. These agents are completely lost without interpretation of the measure as it applies to their case to flgurc whether or not they will receive any more commissions this year, with their organizations geared at top pace and salaries rather heavy as well. Yesterday they started doing a little figuring as to how to continue for the remainder of the year at least by realignment of their organ- izations in such mannef as to pare overhead to the point where they can give adequate service without going into their financial reserves too deeply to keep up operations. All these agencies have high salaried or guaranteed executives working who handle player deals and partici- pate on the percentage take from agent's commissions. It is not known whether or not employees who have acted in good faith in making deals for their agent-employers may, under Cali- fornia State Labor Law, make de- mands on employers to pay them their share of commission of artists working whose salaries have been frozen. Agencies will get no money from those affected by the freeze while agent-employees' contention is that they have performed their part, the artists theirs and therefore they should get their compensation in ac- cordance with the agreement they have with their employers. With production at rather high ebb during November It is figured that 15 agents wlU be minus at least $5001000 in commissions this month. Same situation applies to business managers. The agencies here that really go the frozen shock hardest are Myron Selznick, Charles H. Feld- man and Ralph Blum, Arthur S. Lyons, Frank W. Vincent. Frank Orsatti, Phil Berg and Bert Allen- berg, William Morris, Leland Hay- ward, Nat Deverich, Music Corp. of America, M. C. LevecT-Sam Jafl"?. Getting Down to Cases Meetings were held over weekend by the Artists Managers Guild to which most Of the agents belong. They had nothing to base action on. Just conjure. Their attorneys will be put to work this week to try and find out what their status is regard- in:- getting coin, whether or not existing contracts Save any value be- tween their clients and studios as well as between their clients and themselves, for if the latter get no compensation for worklnn, it might be decreed there Is no reason for ngent representation. It looks like better than $2,000,000 will not reach agents for the period of the 1942 freeze. Of course the smaller agents get breaks. None of them, and they are the greatest number of agents in the field, nets $25,000 a year after ex- penses and oiTice salaries are paid. Their clients are not in the top brackets as very few of them net even $15,000 on tl-.e year, so players and others they handle will continue to pay while the biggies in the agent field may be compelled to just stand by and wait to see what happens to them. 800 of 3,000 in Show Biz There are 3,000 in the U. S. who pay taxes on over $25,000 a year. Of these, 800 are in show business. $54,000 GROSS EQUAI^25G Under order No. 4010.10-E of the new wage and salary stabilization edict it is not permissible for any person whose salary is greater dur- ing 1942 than during 1641 to receive more than $54,000 gross, and it is contrary to the law for an employer to pay more. These are respectively through paying and/or collecting salary as of Oct. 27, if the sum of $54,000 has been reached or ex- ceeded as of that date. Any person whose salary this year is the same as last year can't be lim- ited or cut ofT a payroll before Jan. 1, 1942 even if the income does exceed the $54,000 gross or the $25,000 net. Under this ruling motion picture or other corporations have no alter- native but to stop paying and their employees must stop receiving sal- aries over the specified limitation or be considered jointly and severally in violation of the law, according to assistant secretary of the U. S. Treasury, John L. Sullivan. The broad terms of President Roosevelt's original proposal were that no person should remain with more than $25,000 net income per annum. He did not state that cor- porations were to be limited in their payments to employees, the implica- tion being that regardless of what the compensation would be the U. S. Treasury would directly or indi- rectly so tax income that the net would not excc«d $25,000. The U. S. Treasury estimates that a gross salary of $54,000 would yield a net income of $25,000 under this year's taxes. Under new taxes next year a gross salary of $67,200 would yield the same Income. . Raft Back to B'way Hollywood, Nov. 3. George Raft goes to Broadway for a whirl at legit when he finishes his current Job in 'Background to Danger' at Warners. Actor signed with W. R. Burnett to star in 'Hell's Kitchen,' slated for early winter production. BUY VNITED STATES ~iONDS SEAMPS It wUl cost money to defeat Germany, Japan and Italy. Our government calls on you to help now. Buy war savings bonds or stamps today. Buy them every day if you can. But bm them on a regular basis. PRODUCERS SAY EDia KAYOES CONTRAQS Hollywood, Nov. 3. Coast attorneys are firmly con- vinced that contracts between studios and employees are Invalidated by the Government salary freeze. This would apply to those who are In the freeze range and have options at ad- vanced salaries exercisable where the employer Is unable to meet the Increases due to the Presidential directive. AU producers, after discussing the salary freeze order for three and one-half hours Monday (2) ap pointed a subcommittee to confer with the various studio Guilds and unions to attempt to work out methods of operation. The group Is composed of Y. Frank Freeman, E. J. Mannix, Mendel Silberberg and Herbert Freston. The first three sat in on discussions Monday while Freston was scheduled to arrive from New York today (Tuesday). Producers were reported inclined to pass the buck to the Guilds and unions, taking the position that they couldn't force players, who ere not drawing coin, to work. It was also pretty generally agreed that if the order stands as is, pro- duction will be seriously affected. It is probable that the committee's first contact with the Guilds will be with the Screen Actors Guild board of directors at its special meeting to- night (3). SuUlTan'a Comment According to John- L. Sullivan, Assistant Secretary of the U. S. Treasury, deductions to pay fees of agents, such as are generally em- ployed by actors, producers, direc- tors and writers in Hollywood, would not be permissible in calculating net salaries, Sullivan has so declared, ac- cording to all reports from Washing- ton last week. Pending further clarification or modification of Sullivan's interpre- tation, nationally known talent rep- resentatives, some with gross volume running into millions annually, could be kayoed for the duration. In many cases the 10% fee paid an agent, if deductible from the net income, would amount to more than'$25,000. In even more cases actors, dircclois. etc., would be paying from SO'c to (Continued on page 52) . ♦♦♦♦♦♦♦♦♦>»«»»»»»t»»«»»*»»»»»»»*»»»»«««»»»« THE BERLE-ING POINT ; By Milton Berle < ' ♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦«♦«« Hollywood, Nov. 3. Hollywood U going all-out to entertain the Armed Forces. Last night the Hollywood Canteen wai so crowded the soldiers had to dance piggy, back. There were lo many soldiers there X went kbakl-wacky. AU the atari help make the boyi happy. Hedy Lamarr waited on a sol- dier, Lpna Turner waited on a marine, Claudette Colbert waited on a Milor, and Edda Mae Oliver just waited. And Jeanette MacDonald was teaching th» boys how to sing, Eleanor ^owell was teaching.the boys how to dance, and Bette Davis was teach- ing them how to cry. Whenever Anne Sheridan comes into the Canteen she's immediately surrounded by men of the Tank Corps, After all, they've got to get used to the desert heat. Last night when I was there Edward Arnold was sitting next to me— all around the table. George Murphy conducted a jitterbug contest. You know what a jitter- bug contest Is—a commando raid with music. Broadway Department Jack Haley wires that since the Chorus Girls' Defense Corps has been drilling on the New York Giants' ballfield, the Broadway wolves have changed the name from Polo to 'Happy Hunting' grounds. The 25G-a-year limit Is going to be a t>oon to lots of Broadway agents. It'll be the first time they've ever had a ceiling over their offices. Hollywoodope Due to the servant problem, Joan Davis tried /or tueeks to (lei a fnaid. In desperation, Joan fcnaWy advertised: 'Mnid wanted—uitll pav Lockheed tvages.' 5ince Franchot Tone, Dick Pouiell and Alan Jones bought tnotorcvcles and ride fhcm all over toum, the Beverly Hills Police Dept. is thinkinp of enlisting tht three actors in the auxiliary /orce. 1/ they do it'll be the /Irst time women tuill beg /or traffic tickets. Hennv Youngman went to the Red Cross the other day. He wanted to donate a quart of blood. They examined Henny and then offered him some of theirs. Mnslc Department While at Mills Music the other day, Sammy Stept, the tunesmith, acci- dentally fell against the piano and Jack Mills said, 'I'll take that.' It has been said that Skinnay Ennis enlisted and is getting a rating as a baton for Lt. Eddy Duchin, USN <jg). Paul Whiteman found out why he isn't in the Army. His draft board has given him a classification of 2F-2F—2 Fat 2 Fight. Broadway actors go to Hollywood to get discovered for Broadway shows. Hollywood actors go to Broadway to get discovered for Hollywood pictures. Doesn't ailybody want to be discovered in Columbus. There's No Trath to the Burner That the U. S. will have reached its Army quota of TA million men when Bob Hope's writers are drafted... .Iliat the International Court has hired Harpo Marx as their interpretor.. .That Cesar Romero uses John- son's wax to keep his hair combed... .That Norma Shearer had a minia- ture ski-slide built In her new house so husband, Marty Arroge, could keep in practice. The studios have all arranged for their star players to get transporta- tion when gaa rationing starts. Itiia morning Bill Goetz sent me a sub- stitute for my automobile—a trained gopher with nedh eyes for dimout driving. Afterpiece The World Series is not over. The real World Series contest Is still go- ing on. And when the last inning has been played and victory ours, the box score will read: No Huns, no Hitlers and no terrors. Even Treasury Dept. Concedes New 25G Edict Fails to Answer Everything -1+ Radio's Headache What concerns the ad agencies most over the $25,000-ceiling regulation Is whether they will be able to hold their big-money artists In the event they are barred from making further sal- ary payments. The logical consequence antici- pated by the agencies is a dimi- nuation of work by such perform- ers who have multiple sources of income, with radio losing some of the mort important ones in the process. ABBOTT and COSTELLO 'Certainly one of the funniest teams of zanies — these two boys could ■natch any ihow from the doldrums.' Laura Lee, Philadelphia Evening Bulletin. Universal Picturea~ - Camel Cigarette*, NBC Under Personal Management of: EDWARD SHERMAN SEN. GEORGE'S BRUSHOFF Saya $25,000 Order Conflleta With Intent of Congress Washington, Nov. 3. The $25,000 salary limitation order issued under authority of the anti- inflation act passed early in October directly conflicts with the intent of Congress, Senator Walter F. George of Georgia, chairman of the finance committee, asserted Saturday (31). "The legisiathre intent and purpose is as clear as it could possibly be made.* Senator George told report- ers. 'No salary limitation was con- templated or Is necessary.' Senator George said that both Representative Henry B. Steagall house manager of (he bill, and Sen- ator Prentiss Brown, senate manager of the measure, had stated that the bill did not authorize the President to place a ceiling on salaries in ex- cess of $25,000 a year. Senate ■ finance committee chair- man said he had not given the lim- itation order detailed study but as- serted that he 'probably will have to give it careful consideration' when the issue is raised in the sen- ale. Washington, Nov. 9. If you have read the lengthy regu- lations Issued by Economic Stabiliza- tion Director James F. Byrnes put- tin;; into effect the $25,000 salary ceiling long advocated by President Roosevelt, and you find yourself con- fused and uncertain about it all, think nothing of it. Lawyers have read the regulations and re-read them. Each reading seems to add to the confusion and to bring out inconsistencies which were not apparent in the previous study, li the lawyers can't unscram- ble the uncertainties and inconsist- encies in the regulations, how do you expect to7 The Treasury readily admits that the regulations omit the answers to questions that everyone is asking. It is planning to issue in about two weeks more detailed regulations gov- erning the whole program of Fed- eral salary stabilization. Fo the present, the Treasury's best advice is: 'When in doubt, ask for a ruling.' This doesn't mean that you can pick up the telephone and call a Treasury official with a hypo- thetical situation and get a 'horse- back' opinion. But you can submit formally a specific problem and the Treasury will endeavor to give you the correct answer. Allowable Deductions One thing is certain. The regula- tions provide that no person shall receive a salary o^ more than $25,000, after deductions for Federal income taxes on the whole salary, for cus- tomary charitable contributions, and for payments on life insurance and other fixed obligations which were in force on Oct. 3, and for past in- come taxes. Although the $25,000 salary limiia- tion does not take eiTecl until Jan. 1, increases at this level in the mean- time are forbidden. What about the high-salaried stars (Continued on page 16)