Variety (Jul 1946)

Vednewlay, July 17> 1946 f^RMETY PICTURES LOAN'S OK BIG BREAK FOR FIX Insures Prosperous Postwar Trade' Washington. July 1C. House approval of the British loan agreement was hailed yesterday. (15.) by Eric Johnston as "one of the. most advanced steps taken thus far to ensure a peaceful and prosperous postwar trade," -The loan," he said, "will be an excellent thing for the motion pic- ture industry because of the effect it' will have in stabilizing the ■ British market for American pictures. But still more important. It will be a healthy thing for the entire world because it will lay the foundation for the restoration of international trade on a'normal basis." The Motion Picture Assn. pre*, who got in from the Coast Sunday night, left tonight for New York for a series of industry huddles. He returns Friday, and the following Monday (22) trains for Chicago, where he-will address the IATSE convention Tuesday (23). Large Fifan Backlog Puffs Prod. Assets If OPA-less Market Inflates Powerful inflationary undercur- ♦ rents set in motion, by the recent/ Congressional puncture . of OPA controls isn't causing any overtime worry in the major pic companies. With basic costs threatening to soar, the film industry, having accumu- lated a substantial product inven- tory during , the war years, finds it- Belf in a uniquely advantageous spot to swim with the price tides. What- ever effect the ballooning costs has upon future productions, it is guar- anteed that the dollar value of the flock of finished pictures will con- . tinue upwards in the coming months. At present, due to the longer-run. policy, the film industry has a col- lective inventory of completed films totalling some 150 and costing ap- proximately $250,000,000. If basic labor charges and raw material costs rise, as economists predict, to the extent of 25 to 50% in the next year, the value of this finished prod- uct will be estimated at between $350,000,000 and $500,000,000. Differ- ence between actual cost and the cost, calculated on the inflated level, ' is so much gravy for the owners of the backlog. Warner Bros, has slightly over 20 productions finished, or more than the equivalent of a season's releas- ing schedule at the rate of the post few years. Paramount has over 25 complete pictures. RKO has an in- ventory of nearly 20 productions. 20th-Fox, Metro and .Universal have! about, a dozen apiece while Colum-1 bia pictures has over 15 and United Artists about 10. Smaller producers, like Monogram, Republic and PRC also have several apiece. In event of n decline setting in after a sharp boom, flexibility of the film industry will permit a profit- able adaptation to lower-price con- ditions. The film companies will immediately move to release their productions in order of their expen- siveness. Since, according to market analysts, it takes about six months before the effects of a general de- pression hit theatre b.o. receipts, the film companies will be able to gross about 7. r )-90 f ,; of their normal re- ceipts in this time. . While releasing their product , backlog, the producers can get into ! position to slash production costs on ' their new pictures. In event o[ an ' economic bust, fewer multi-million i dollar epics will be turned out and { sharp reductions will be made in , running time. Finally, since crises . depress costs all along the line, sl'u- , ■dies.figure they will be able to buy i stories, stars, studio, labor'-and raw ■ materials at lower prices. Schwartz-Johnson To Do'Park Ave.' as Indie Despite Par's Bankroll Hollywood, July Hi; Arthur -Schwartz and Nunnally Johnson will film "Park Avenue" as a" independent venture,,, although Paramount put up half the coin to stage the forthcoming musical on Broadway. Understood that Charles Emfcld is trying to snag the picture 'or Enterprise. Failure of Paramount to grab the i, m , r 'ehts on "Park" has a precedent •'■ Bloomer Girl," which Metro snccd but which will be produced W international. Smaller /One World' Unusually large film contin- gent which went over on the Queen Mary last week cues the attitude of the industry that London and Paris today loom as just another brunch office op- eration. The ever smaller "one world" idea will see N. Y. film execs crossing the pond with the same facility and rapidity as they hop the 3,000 miles the ; Other way on Hollywood studio visits. In fact, right now with the foreign market problems, commuting to England and the Continent will become even more frequent. Constellations grounding by the Civil Aeronautics Commis- sions for 30 days, meantime, has jazzed up show biz travel from coast to coast, and also overseas. EXTENDS FAR U. S. film industry received a ter- rific hypo yesterday (Monday) when President Truman okayed the $3,- 730,000,000 loan ., to Britain. Pas- sage of the loan is expected to lift permanently the danger of Parlia- ment again placing restrictions on the withdrawal of American earn- ings from the United Kingdom and to free billions of dollars in the Sterling' area, money which can be spent by other countries to pay for U. S. films. With final approval of the loan, the British government agrees to abolish at once any controls af- fecting U. S. exports to . the U.K., thereby assuring American export- ers; of payment in dollars. At pres- ent, Britain has no restriction be- yond normal taxes on the transfer of currency, but there has been an intensified campaign in the House of Commons recently to institute some form of control over film rental payments to this country. Earnings of U. S. companies were ffozen early in the. war, but the embargo was lifted through the in- ception of lend-lease. Under the financial Agreement, an- nounced last Dec. 8. . when the loan idea was first broached, the British government agrees "that after the effective date of this agreement,' it will not apply exchange controls in such manner as to restrict (a) pay- ments or transfers in respect of products of the U. S. permitted to be imported into the U.K. or other (Continued on page 20) Guild's Henry Tie Cues Other Pix-Legit Tours Various film ^companies have ap- proached the Theatre Guild recent- ly, as a result of the Guild's spon- sorship of the Two Cities (Rank) Technicolor film "Henry V," to sponsor other pix. The Guild admit tcdly is interested, and considering the idea. It's known that Sir Alexander Korda has asked the Guild to look at one of his films, and that Rank has several others he'd like to put a Guild label on. Of several feelers from U. S. companies. Guild is con- sidering one pic it likes. Guild is proceeding slowly in the matter, feeling it wants to sponsor only what it calls "masterpieces." It's interested in the tieup, and won't restrict itself to foreign-made pix, but claims the films have to be '"ar- tistic" and up to the Guild's lcgil- drama standards. Such sponsorship may be another wedge for the Guild into film biz. Producing organization feels it al- ready, has a , toe. in, through being associate producers on the forth- coming RKO filming of Eugene O'NeiU's "Morning Becomes Elec- Ira." Plunge marks . Guild's . emer- gence as an overall entertainment world setup—through its legit pro- ductions, its radio shows . ("Theatre Guild of the Air"i. and now, films. 'Henry" Creates Chi Confusion Chicago. July 1G. . Boxolfico men at the'Civic .theatre (Continued on page 22j Harry Warner Pays Truman 'Courtesy' Call Washington. July lfi. Harry M. Warner was in town last Wednesday and visited the White House, where , he conferred with President Truman. Presidential aides said it Was merely a courtesy call, and Warner Bros, office here said it was a rou- tine visit. Loan May Hurt British Boxoffice "■'.' London, July 16. ' The American loan of $3,750,000,- 000 to this country may have a de- sultory effect upon the British amusement industry. Some segments figure that, with the added coin, Britain will be able to import many items now being rationed and give the average Briton a chance to buy commodities so long denied them. This spending on necessities, it's figured, will decline, the boxofflees. English show business has been at record peaks because there was lit- tle else upon which to spend money. Clothing, foodstuffs, gasoline, etc., are severely rationed, and so the surplus was largely spent on amuse- ments. Effect will be more pronounced during initial stages, unless the gov- ernment chooses to eliminate import restrictions by degrees. The English people have done without many items since 1039 and have built up a sizable urge for many commodities. Rank-U-UWP's Theatre Acquisition Program in the U. S. Heads Agenda Of Execs' Current Huddle in London C.O.D. Scripts Jake Wilk wasn't having any that day. Warners' eastern story head received an impressive-looking package via air. express last week and was all set to sign for it, when the messenger told him there were $2,500 C.O.D. charges on it. Asking what was in the package. Wilk learned that it was an unsolicited manuscript, sent him by some character in Kansas City. '.-..' v Wilk decided to deprive him- self and Warners, of a manu- script for that day. Korda, Selznick, Goldwyn British Production Tie Hollywood, July 16. Use of Alexander Korda's studio in London forms the basis for talks between David O. Selznick. and the British film chief, with the latter seeking Selznick's stars. Distribu- tion-production huddles were held over the weekend on a yacht char- tered by Selznick with Burgess Meredith, John Huston, the Warners director, and several film personali- ties aboard and entering into the discussions. Selznick, who earlier in the year had talked with Samuel Goldwyn on deals, was seen in a possible tifup with both Goldwyn and Korda in a triumvirate setup. Korda, it also was learned, has obtained David Niven on loanout from Goldwyn for the lead in "Bonnie Prince Charlie." HARRY COHN IN N.Y. FOR COL SALES AND MEETING Harry Conn, Columbia prexy, ar- rived from the Coast yesterday fTuesday) for Col's annual board meeting, scheduled for Tuesday, Wednesday and Thursday of this week. Abe Montague, general salcsman- ager, got back to N. Y., Monday (15), and it's believed that the top sub- ject for discussion on the directo- rate's agenda will be the setting of a definite Col sales-policy. UA May Lease Legiter or Day-Date 4 Deluxe Nabes for Its Chi Showcase Theatre acquisition program in the U. S. of the J. Arthur. Rank-Uni- versal-Unitcd World Pictures tieup is up for some heavy going-over as top executives of the three com- panies, put their heads together in London this week. One of the major questions to be mulled by the hier- archy is whether to go ahead with previous plans for UWP to pick up showcases in key cities or to order a shift in strategy because of the forthcoming anti-trust decree. UWP's dilcmna needs early solution because the. company has currently in its hands a number of options to buy theatres in scattered localities. Options were quietly culled in a number of tight situations by UWP a-s part of its policy to insure against being left in the cold because of ex- hibitor committments to major comp- anies of their entire playihg-time. New company's move has been con- fined to first-run houses including, it is understood, one or more in New York. Decree's . new auction sales method plus its ban against giving the old customer a break "may call for a change of thinking on our part," one UWP topper put it.' .'.-." Pointed out that the tight situa- tion of today may no longer be true (Continued on page 23) Film Dividends Eye New High Washington, July 16. Film industry dividends appear headed for an all-time high. Melon for May, just announced by the Commerce Dept., was $1,061,000. As compared with only $329,000 for May. 1945. Dividends for the . three-month period ending last May. 31 hit a boff $9,308,000. contrasted with only $4,692,000 for the same period last year. Big current figure was sparked by RKO's first common stock dividend—almost $900.000—in May: and by the $1,800,000 Warner dividend in April. More Legal Maneuvers In Schine Divorcement Buffalo; July 10. Application for clarification of Federal Judae John Knight's order which directed dissolution of the Schine theatres so as to clear the way for an appear will be heard on Monday 1221 in Federal court here. Motion papers filed today (Tues.) by Willard McKay, attorney for the the- atre chain, said there was doubt as lo when the time to appeal started to run. Additionally, question was raised as to the extent of the stay on execution of the dissolution order pending appeal. .) Affidavits filed with the motion papers.recited that the Government considers thai the final order which would form the basU of an appeal had been made on July 5. The court on that date ordered the'divestiture of.'more than 80 Schine houses.' Chicago, July 1G. As with Los Angeles and Frisco, where United Artists had to carve a series of theatre outlets for its backed-up product, the distrib is doing the same here. Sales manager Joe Unger. here from New York, opened negotiations for utilizing eilher of the two .Shubcrt legit houses, the Erlangcr or Shubcrt. for showcasing UA pix. The' McVickors is another potentiality. UA also has ah idea of grouping four do luxe nabes. day-and-dalo (approximate combined capacity of 8.000). and .-imulatc for its Chi ex- hibition lirstruns the same pattern now in effect in Los Angclc.--. This comprises four Music Halls, in widely scattered L. A. zones, all houses controlled by Joe Blumen- feld. Latter'.- UA theatre .in San Frisco likewise is VA'a showcase. Company's pile-up of product came about through Eddie Silver- man lE.-suiie.-s chain) loading-up on Metro product for the Oriental, former UA outlet here. Trado Mnrlc IleRlflNircfl rOUNDi;!-) BY S1MB SII.VKIIMAN 1-ulillnhi-il H>tkl> l>y V A It I FT V. Inc. Slil Silverman. PrcHlUrnl IM Wcsl «Cii> SI.. New Vorll 10. N 7 SCUSCfMI'TlON Annual.. .. tJO Foreign SIhrIo OorlCH. . Ml Cer.if 130 Vol. 103 No.O INDEX U.MI.V VAKIKTY <Publl«ll<vl In llollywod'l by Dally Vurlcly. l.ul.i *10 n Ycnr—»12 D'orclRn