Variety (Jul 1927)

48 VARIETY LEGITIMATE Wednetdfty^ July 27, 1927 box office iu:in at wiiat iliculiv? A. Liberty Theatre. Q. How I»>iiK' li.ivo you boon the It tho LilKily TliouHo? A. About t«n yearn. Q. In thut »ame catmdty? A. No, sir. Q. How lonnjf have you been the bOXOlMoo M.aii .it the Liberty? A. I l\Ave boon the box oflice man tor ten yeara. but treasurer for the last five yeftrs. Q. lYior to thib lust five yoars \*0u were a sort of aj*«l«tant or clerk in ihe ofTlce? A. Yes. sir. Q. Now, the Liberty Tiie^itre is • »ne of tho Kilangor Theatres, isn't it? A. Yos. f^ir. Q, Wliat play has boon there re- . entiy? A. "Lady Do." Q. Is that true as of l.tnt Janu- iry? A. January, "Twinkle Twin- ..!de." . All Ag«nci«t Qav« Un Q. Now, I have some testimony irom Mr. Bergman relative to cer- lain moneys which were being: paid at the box oflice of the Liberty The- atre. You see—and I say this for your Information—tliat certain of the agencies have kept written rec- ■ »rda for thonisolves of the amount they have paid for tickets at the LIMtSP ^eatre and also amounts which thoy say they paid you in ad- dition to the box office price; now th«T liiat« fiM ^'i^ addition to th« box office price, haven't they? A, Yea, sir. some of them have. Q. 'Hew long has that been going on? A. Ever since I have been there, ever since I have been treas- urer they have given me something. Q. How many agencies have been maklnp those ])orsnnal contributions to you A. J U.St tile agencies tliat Qted the tickets; according to the production^ different agencies use ticketa. d. Give me some of the agencies. A Tyson. Mcl^ride • Q. By Tyson, you mean Tyson & Co.T A. Tea. McBrlda. Sullivan, Arrow, Cohn. Library, Brpftdwiay, Baacom, Newman. Q. It is practically all th# inib- irtaritlal n-oncios? A. All t hi» ilit> ' stantial apencios—^Jacobs. Q. Including Jaoobat A. Yea, sir. Q. Now has that been, roughly .speaking, approximated to a given amount for tickets? A. I don't know. I think they have put it dQwnt ap a given amount. Q. Aeedrding to your informa- tion, what is the amount per ticket that averages the scale by which thaae cohtHbiitioiia to yott are eal- oulated? A. T tiiink It averages Ave. some twelve and a half, some '^teii and a half. Q. Some twenty-ftVist A/TiiW^-jli^' some twenty-flve. Q. Does the amount go up as the show succeeds? A. Yes. sir. Q, It is always the same whether the show in a flop or hit? A. Yes, sir. Q. Do you kt^op any personal rec- ord of the amount you pet? A. No, Sir. Q. How do you preserve the amount? A. I Just put them in the Q. T^ltimately. after yon get them out of the dmwer? A. Sometimes spend it, sometimes put it in the bank. Q. You don't put it in a special aecdUht? A. No, sir. Q. Now. b t me ask you this: We •rill .''ay since the first of the year how manv of the seats of the Lib- erty Theatre have been put oUt with speonlators A. Since the first of the year? Otteribaa Aflatinent Q. 1 don't mean in the aggregate, [ moan how much of the iiouse is sold out? A. t^ince tlie first of tlie year we have not had a H«ll-out at tlie LilxTty Tho:»tro. We have given 4iiem what wo call regulars. Q. How many seats are each night allotted to speculators? A. Since tlie first of the year I tiiink Che mdst they get ar«r about 200 to MO. Q. It is a small theatre, isn't it? A. 1.234 seats—not so small, but the attractions did not warrant it, they weren't soiling so good. Q. Little later? A. The attrac- tion-t>iiiy in the first couple of months of this year did it warrant giving tlii in more. Q. What was the practice of tlio tlioatro. .'^o f.ir ;is the number of seats aro coiuirnod, iu allotting •eata to the agencies, how many rows in the t>rchestra, how many in the bahony, and so forth? A. I used to skip every other row in the orchestra and give tlu in about the first eight or nine rows, skip every other row and give them In between seats, and none in the balcony. Q. Was tho allotment made by you? A, Yes, sir. Q. So you roiitrdUed the matter of deciding what s. ats any particu- lar ajge iicy wo uld got? A. Yes, I did, but If they didn't I WtTUTirtakr a few off that allotment, I would have to cliange that. Q. Then the whole question • of how much In the way of .^eats the agency would got and what would be tho privilege of the agency In returning tickets wlil< b tboy did not sell would be entirely in your hands? A. They had full return pVi\ilo;,'o. Q. You mean they were solely sold on consignment? A. Consign- nu nt <»iily. g. W iiH that true of the five years you have been there? A. No, but you said since the lii.st ni tlu; year. Q. I .iMi goiiii; to l»ioad< M the pe- riod a liltl<;; tiu- reason yt»u .sold on consignment since the first of the year was tliat you did not base ra- pacity liits at lliu tlioatre? A. i'es. sir. Q. But if yinl did liavo a bit you would require tlio agencies to buy tickets outright? A- Yes, sir. Q. And th. ii if they had tickets on their hantls un.suld the question of how much you would take back wi>uld bo in your liands? A. Ye.s, but there was always an agreement made of ten, twenty, tWenty-five pir c< nt returns. Q. The agencies tell me the rea- son they are at the mercy of tho box ofllce men is duo to the fact that he can relieve thorn of their los.sos by taking back tickets even witli a buy out; that's true's isn't it? A. That's true. Returns Theatre Loss Q. That Is a club, in fact, that the box oflice men bold (»vor the agencies? A. It isn't a club as far as I am concerned. Q. I don't ni(an you, I am not characterizing you, I am saying that is a club which the box oflice man lioids over tlu* aKom y? A. I wouldn't go so far jis to .say that. I don't know anything about any other box oflice. Q. You can see it v ould be of ad- vantage to the agencies to have the privilege of minimizing their losses by tlirowing the losses ba<^k on the theatre? A. I liave your idea. Q. So the box office man who is employed to got as nuK-h mrmey for the theajjre as possible actually in exchange for these bonuses trans- fers the losses of the agonrios to the theatre: in plain English, that is what it amounts to? A. Yea; Imt I do not think In a rase where a box olflce man cannot sell it for them Q. You say yes and it is yes; the business of the box oifice man is to get aa much money for the thea- tre as possible? A. Yes. Q. And in consequence. If there are losses on tickets, to see that that loss is by the agency and not by the theatre; that i« his lawful business? A. Yes. ; Q. But actually he getis money from the agencies in connection with at least transferring a portion of the agency loaaes to the theiitrt; that's the plain English of It,Ull^t It? A. Yes, sir. Q. Coming back to» your own practice there: you didn't put these special contributions from the agencies into some particular ac- count, did you? A. No, sir. Q. Y^ou have, therefore, no record of what they amount to? A. No, sir. Q. And did you keep any at the time? A. No, sir. Q. Mr. McQuillen tells me that to our ropr«»sentatives, agents of tho Internal lievenue Dei>artnient, you stated you had received in contri- butions of thi.s character about $4,700 in the year 1925, is that right? A. Ye^ sir. Q And in the year 1926 you had received about $3,500 in contribu- tions of this charactert A. Tes, sir. Q. During each of these years did you filo an income^jtax statement? A. Yes, sir. ^v- - ■ ■ Q. For each year. For each year. Q. When did you file it? A. On the advice of my counsol I have made an amendment to it. Q. So that within tho past few days comparatively you have' amended your prior income tax statement to incl ude t hese amounts? A. On advl<^ dC my counsel, yos, sir. Amended His Return Q. I suppose a great many of the box oflice men of tho City of New York are receiving similar advice as a result of this investigation, fmvt that so? A. Sf)Mio of them are, yes. Q. I suppose it is hoped that I will overlook the astigmatism which prevented you in the past from in- eluding these amounts, by filing them now? A. I went to my coun- sel and explained to him and he gave me that advice. Mr. Tuttle: Well, I compliment counsol, Q. This $1,700 which you received in 1925. and this $3,500 which you received In 1026 were the amounts which you retained, is that Hght? A. Yes, sir. Q. Actually the contributions fi'oin the :L'-:enoios wore double that imiuint, is that right? A. Ye.s. Q. What became of the |4.700 In 1 that yovi did not tret and the $3.«<»0 in lltl'6 that you did not get? A. I took ":»re of my assistants. Q. So that the agencies hande»l In bonu.s»»s to the box olHce men at the Liberty Theatre in 1925, $9,400, Ves, sir. pra< tloally. Q. If that i.s true of the Liberty Theatre nlone, which Is a compar- atively small theatre and whlelj did not have a hit A. lOxcuse me. In those years we did. C}. I will reframe my qTii'stlon then; if that is true of tho Liberty Theatre alone, which Is a compara- tively .«niall tlK'.'ilre. would you think it a fair estimate lo say that what has been called hero this graft go- ing to the box office men for all the theatres in tii€|> city would an- nually amount to about $760,000? A. That I could not say. Q. There are eighty odd theatres? A. Yes, sir, but they are not all hits. Q. Can \-ou tell me what you have been drawing since the first of the year? A. We got about $780 apiece since the first of the year. Q. That is $1,600 since the fir.«t of the year? A. Yes, sir. Q. That la half the year? A. Yes, sir. Q. We will say, therefore, that would he $3,200 for the year? A. Ves. sir. Q. And during this period of time you liaA o not liad a hit. as the word hit goes? A. It was not a big snjash. no. but It was a good show. Q. K was not a wow, but JUSt a good show? A. Yes. Q. The reason I said It was not a hit was a little while ago before I f'evoloped this, you said you didn't h.ive a hit. A. The last show I had was "Lady Do." Q. I don't want you to run down your own show; that was not a hit? A. It EMted only about seven weeks. $2S0/X)0 Qravy Q. Let's take it on this basis, $3,200 Instead of $9,400, which it was in l^SS; would you say it would be a conservative estimate that the amount of this graft going to the l>ox oflice men of the eighty odd theatres In the City of New York would be at least $250,000? A. I don't know whether all of them get it. Q. We have not been able to find one that did not, and Mr. Ziegfeld, wlio is in a position to know, has just testiged they do; you wouldn't dispute his word, would you?, A. I have heard Of people who didn*t get it. Q. For tho Lord's sake let's canonise him; do you want to name him? A. No. Q. Would you dispute the state- ment made yesterday by Tyson's chief man that every man in a box oifice in New York got it? A. I have heard that the Guild didn't get it. Q. The Guild Is managed by a group of men who are not in busi- ness for their own pocket, so they do not find it impossible to get men who are impervious to temptation, as long as the managers are not in it for their own pocket; that's a fact, isn't it? A. Yes. Q. I am afraid I must shatter your enshrining of the men at the Guild because Tyson & Co.'s books show that for the month of January, 1927. alone, they paid $74.59 as bonuses to the man at the Guild. A. Then I was misinformed. Q. How do these payments come to you? A. Some cash, some of ♦hem out of their checks, most of it in cash. Q. Do you give them any receipts for it? A. No, sir. . Q. It Just comes to you anony- mously, and you keep It anony- mously? A. Just naturally. Q. In what might be called' a stat« of nature? A. (No answer.) Q. Now, these checks you speak of are sometimes drawn to cash and sometimes drawn to the Lib- erty theatre? A. Yes, sir. Q. When the check is drawn to the Liberty Theatre, that check covers not only the bonus to you, but the amount which is charged for the ticketa. lan't that right? A. Yes. Q. Now, the^ Liberty Theatre has an official account of the theatre in what bank? A. It used to be called Commercial Trust Company. They call It the East River-Com- mercial and East River Bank, I thing it is called now. Q. You do the endorslnir of the checks of the theatre's acooimt In that bank, don't you? A. Yes. Accounts for Ticket Face Q. 86 when you endorsed the check which has come to the man- agement of the Liberty Theatre, and deposit It in the bank account of the theatre Itself, how do you get your bonus out of the amount of tho check? A. Whenever we bal- ance we take ovit what Is our.s— take care of the shortage and things like tliat—whatever is there we fig- ure belongs to us and we put all our bonuses in there. Q. So the upshot of it is all that you are reciulred to do so far as the theatre is concerned Is to ac- count for the face amount of the tickets, and all over that you have in the cash drawer you keep? A. Yes. Q. In other woi'llfl. you have the s.anie .sy.stem as the treasurer of the Madison Square Garden, who tes- tified here the other day, who per- sonally kept all the overages for liitnself? A. Yes. Q. And that Is the universal sys- tem In this town on the part of the box r^eo rhen .as far as vuu Know ? A. A.s far as I know, yes. Q. Of course, such a practice as (hat is known to the management, isn't it? A. I believe they know we get money. Q. You say you know they know you get money? A. I believe they do. Q. Why Isn't that true—you have just outlined the accounting to them for the face value of the tickets and keeping all the other money that has come in to the Liberty Theatre Itself, why isn't that just plain lar- ceny? A. r.erause the man who gives me the ciieck tells me what- ever is over for the tickets belongs to me. Q. But the check is drawn to the order of the Liberty Theatre, and that makes it the property of the theatre, so I ask you again, to take some of the money out of that check and put it in your pocket is ivmt plain larceny, l.sn't it? A. Because the agency has just told me that. Q. Isn't it because the manage- ment has given you pei rnission ? A. He doesn't give me permission, he Just wants me to account for the l)ox ofTlce prlt o of tickets. Q. In other words, he connives at It? A. He doesn't seem to be In-r terested In it. Q. If it isn't with his consent why isn't it plain larceny to take money <lrawn to the order of the Liberty I'heatre itself and yjut it in your own pocket? A. Because of the understanding the agency gave me. Q. And Isn't it the understanding with the management you may do it? A. The only understanding I have with tho manager, I have to make good for the face value of the tickets, anything short in that box office I have to make good for. Q. And he shuts his eyes; that is Mhat It amounts to, isn't it? A. Yes, if ho is Interested. Q. Does the management get any portion of this bonus tliat you get? A. No, sir. Q. I will show you, for tho sake of identification, three checks, dated, respectively, January S, January 24 and .January ."il, 1927, by Tyson Op- erating Company, to the order of the Liberty Theatre; Tyson Operat- ng Company's record shows that ach one of those three checks In- cluded a bonus to yourself; do you admit that? A. Y'es, sir. Mr. Tuttle: I will ask that they be marked in evidence. (Marked, respectively, govern- ment's exhibits 65 to 69, Inclusive.) Q. Why Is it, Mr. Witness, that no records are kept by you, and no vouchers are ever given to or ex- ecuted by the agencies for this )onus? A. 1 always take it In the form of a gratuity and I always un-" derstood they gave it to ma in that form. . ■ Q. If it was a gratuity why Is It no record was made of it either by you or them, and why don't they exact a receipt from you, do yov know? A. No. sir. iVactice a Secret Q. Isn't It because up to this in- vestigation there was an eaitiett ef- fort In the theatrical business to conceal the fact of these payments: that'a true, isn't itr A,^9h*t I don't know. I dont ioip'ir tliey tried to conceal it. Q. Let me ask you why you didn't keep any record and why so far as you know the agencies did not exact any receipts from you, wasn't it be- cause this was more or less done in the dark? A. It was not In the dark as far as I was concerned. I always got it in the light. Q. Isn't it a fact that until this Investigation got under way the existence of those paimanta has never boon admitted in the theatri- cal bu.siness? A. Plenty of talk about it all the time. Q. Amf)ng box office men, but not the public? A. The public used to come to the window and could not get a front row seat and they would tell them to go to the agencies and they were Informed. Q. So you found the public did make an attempt to coma to the box office? A. Yes. Q. And you would tell them the box oflice had no seatsT A. WhfU* ever I didn't have them. Q. In other words, whenever the ageneie?! had them and you didn't have them? A. Yes, I had. When- ever we had a tremendous success they were sold In advance then. Q. Do you have a practice when you were sold out, so far aa re- served ti( kets were concerned, of I'eferring the public to agencies? A. No, unless they should a.sk me where could I get them I might say McBride's Is one of the most reliable agencies. Q. And for the saying of that I suppose the bonus that you got from McBride's was something of a consideration? A. I don't believe he knows I ever said that. Q. You don't think It would oc- cur to a particular agency that it would .soon mint itself into money to have the box office man say to the customer who was being turned away from the box oflice, step over to agency so and so and you can get the tickets? A. 1 don't think we would have enough nerve to go that far. Q. 1 didn't think there was any limit to their nMrva. A^ Tes, there is in that case. Q. Is there any limit to the box office man's nerve? A. Tea, he can be shamed. By MR. BICKERTON: Q. Mr. Tuttle asked you whether or not In your effort to sell tickets on behalf of agencies when tickets were returned you weren't seeking to shift the loss to the theatre and jnot the agency; I ask you now whether or not If any rbturns had been ma<le by an agency purehuBed by the agency, and you had been unable to sell them at the box offioe would that loss have remained i,j the agency, or would that have be- come a theatre loss? A. If it was within his return privilei,'f» it wouJd become a tlieatre loss, but if it was outside of his return privilege {, becomes an agency loss. Treasurer Bended Q. And, therefore, you in that form never shifted a loss from tlie agency to the theatre if it was an agency obligation? A. N(t, sir. Q. In respect to those checks that Mr. Tuttle has shown you, payable to tho Liberty Theatre, is there anv corporation or bank or proprietor in the name of the Liberty 4*heatre that operates the Liberty Theatre** A. The 234-42d Street Corporatioii operates the Liberty Theatre. Q. And what is tlio name of the account that you carry in the bank as the box office man? A. Liberty 'Theatre Box Office Account, JuUus Schleifstein, treasurer. Q. Who signs checks on timt ac- count? A. I doi In caat I jun ill my assibtant has a COUht^f g|gha- ture there. Q. Are you bbnded in respect te that account? A. Yes, sir. Q. What is the obligation of your bond in cohhectlon therewith? A. I forget Just the amount of the ith* : ligation. Q. I do not mean the amount, what is the obligation of the bond, what are you bonded to do? A. To make good all moneys for the face value of the ti^ets. Q. Have you ever had any shortr- ■ igo in your account? A. Yes. Q. Have you mad* it Up In per- son? A. Yes, sir. Q. Has your bondsman ever been called upon to pay any moitey for you ? A. No. sir. ; . . Q. So, therefore, of any moneys deposited "by you in the Liberty Theatre Rox Office Account, Julius Schieitsteini treasurer, remaining oveir the face value of any and all tickets sold by you, whether to the agencies, the public or otherwise, whose money Is it? A. Belongs to me. •■ -. ■■■■ Q. So if you take that money you take your own property? A. Yea, sir. By Mr. Tuttle: Q. This bond that you have just referred tb doea not provide that any moneys remaining over tho face amount of the tickets which you have abfd shatt 1^ yoiir own prop- erty, does it? A. It providea that I am bonded against loss. Q. Every treasurer in the city is responsible for shortages in his ac- count; there is nothing new in that; but I am saying the bond Itself does not provide that all the money that is left over after the face of the tickets have been accounted for, s^iaii be your own pMyperty, dces it? A. No, sir. Q. Is there any scrap of paper or any declaraxioa by the management to which you can point that makes your property, so far as the Liberty Thaatre la coiiceniad; Any amount over the face valuais'd^ the reti|ir^ A. All. they look for—— Q> "Ton are tiot trying to say the account in which you deposit these checks is your own becai^e it is the bole oince account? A. It. la the account Of tha Liberty thea- tre Q. You are not trying to say it is your own account? A. No, sir. Q. It is an account belonging to some corporation? A. ii is the box office account. Q. What corporation does that belong to? A. Might belong to two or three. I settled with the the- atre and T pay off salaries. Q. The name of the account is Liberty T*heatre B63t OtKoar-M" count, .Tuiius schieifstaiii,. traaii- urer? A. Yes. sir. .' , Q. Is the Liberty Theatre a cor- poration? A. No, sir. Q. You don't make any claim, th.i* account. Liberty Theatre Box Of- fice Account. Is your own account? A. No. sir, itt U a . box. flifllce . ac- count. Q. And you are accountable tor that account to other peraona ©r corporations? A. i'es, sir. " By. MR. BICKERTON: Q. But you do. or do you not. maintain that there has been de- posited In that account certain moneys of your own? A. Yes. Mr. Tuttle: You mean thes^ bonuses you get from the agencies' The Witness: And other moneys, too. (Short recess.li White on Stand (iKORGE WHITE, called a.s a witness on behalf of the govern- ment, being first duly sworn, testi- fied as follow.^: Direct examination by Mr. Tut- tle: Q. Your a.bit OSS? A. 161 Weit '»4th, Apollo Theatre: Q. Mr. White, you are by pio- fejssion a theatrical producer? A Yes, sir. Q. And have been for how Ion*: ' X. Eight years about. Q. And what has been your rela- tion to the attraction* which hnn run for a number of years now un- der tho name of George White'^