Variety (Aug 1927)

Wednesday, August 3, 1927 LEGITIMATE VARIETY S2—X nCKET AGENCIES AGREE WITH D. A. ON METHOD PENDING APPEAL A Btriktne antl-rlimax to the V. | B. district attornej '3 Itivt stlK:iil..i] ^ Into New York's tu kct situaiidii , occurred Friday when in open court j J4 ticket agencies and their owners were coniniltt<-d to hold down the premiums on tickets to 60 cents orer the coat. No more concession money Is to fce paid manaKcrs. Box ofllce treas- urers' gratuities are in doulit. This agreement on the part of the brokers will extend for 18 months or until such time as the Alexander eaae la finally passed upon by the U. 8. Supreme Court on the apiW'al grounds that the 50 per cent, tax levy on exceM premiums is uncon- stitutional. The Alexanders were sentenced to six months and fined 111,000 after conviction of malting fraudulent returns on excess pre- miums. Tuttle's presumed victory in curb- ins high prices of tickets followed the Indicting of the agency men. either for failure to make the proper tax payments to tlio government or to keep the proper records of sales. Vptn tb« advice of cotmsel and prA^acreement with Tuttle, the pleas of guilty were entered, the defense attorneys having convinced the brokers the prosecutor had It «a them, aceordlns to the law as now Constituted. The district attorney read an ex- tended statement wliich In fact Is the agreement the brokers acquiese to^ the lUoltatlon of premium*. He adced for an extension of the term of court for 18 months and the de- ferring of sentences pending the Alexander test case. The men were freed on parole of counsel until Monday at which time they llled bonds of Jl.OOO. Tuttle's Faather Tuttle had had a brief session of his investigation before Commis- sioner Cotter In the morning. After the court proceedings he declared his activities recessed for the time being, to resume In September and he went on vacation with quite some feather in his cap. In addition the agencies were elaaalfled and according to the com- putations of Hugh McQuillan, bead Of the intelligence unit of Internal Revenue, each broker is required to llle a cash boiid» to bK applied on lines, should the law be upheld. In •ueh case Tuttle will ask the court to flne the brokers and suspend Jail sentence. This depends on their keeping faith under the agreement. The agencies within the next two weeks must post cosh security from tSOO to (5,000 with the clerk of the court, this money to be held in escrow until such time as the cases are settled. Tuttle was regarded by defense counsel as having made a hiRhly favorable adjustment of the entire situation. Ho made good tlie promise of not asking for jail sen- tences. He stated privately that the entire matter was not to be blamed on the brokers, but that It was SO- SO, the managers and box otflce men being equally concerned. He could have charged perjury because of the incorrect tax returns falsely sworn to. Conviction would have meant a jail sentence, with no ap- peal likely on constitutional grounds. Being business men he took the other course. Tuttle Is to write the manapi-rs sritiiipM forth tlie names of tlie agencies signatory to the agreement and In that way feels that tickets win not be allotted to any others, save the few 60 cent premium pliiees, principally McBrlde's. He also will advise the social clubs of the slttMtioa and ask for co-opera- tion. Staking Tickets allotted each agency are expected to be stamped by each the- atre with the najne of the agency, a system expected to hold down digging and scalping. If the broker pays a gratuity or concession, he must give the patrons a slip stat- ing what was paid over the box ofllce price. If a gratuity is paid a box Office man the names of such recipient must be furnished the prosecutor, although It has b'-'ti conceded that such gratuiti' -s .in in ■"ttre rornr or gifts ana at^ non-tHx- able. Should a manager be paid concession the district attorney Is also to be advised. That the limitation will f jrce a number of agencies out of business is certain. Several have already In- unable to Whether Tuttle s arrangement will eliiriinate cypiiim; is another ili.' ftiim. it will so far as those aKcnoii's involved are concerned, but iliore are others and digging ■,vill dotibtless continue. While 10.- 0(10 p. oi)le try to buy the 500 tickets for the lower floor of a smash, so long will the demand mean high prices. Tuttle expects that by the theatres keepln!; tal's mi the allot- ments they can cliniiiKite successful digging and g>pidnK, but iliat re- main* problematical. He takes It that it la entirely up to the manaseia. experiment The brokers Involved are now In- tent on retr(tKhment, tif;uring lh<' entire matter an experiment on whether they can stay in business. Salaries were cut in a number of agencies and men let out. They figure on building up charge ac- counts, Tuttle agreeing to $1 per month for sucl. service and 25 cents for delivery In addition to the 5'"'-cent premium. It Is predicted that a new class of ticket agencies will spring up to handle locations for the hits. These offlces will get nil they can and split the premium with the government, thereby remaining within the law. Should the law be dei'lared Invalid, all such money paid would be re- funded by the government. Among Uia M agencies named in the agreement are the 11 which were originally held for grand Jury by Cotter. The 12th Is that of the Alexander Agency, the test case. There was one exception, that of Tyson and Brother—United, with Dave Marks nt Its head. That agency filed amended returns and paid the government the 60 per cent levy since the Start of the investi- gation and therefore was not In- dicted with a request for sentence. However, Marks is Included (there were actually 23 named in the in- dictments) and violation would bring action from the district at- torney In all cases Marks, in mak- ing an amended return, paid the government $25,000 and In acknowl- edging the law without protest can- not recover that money, should the law be held Invalid, attorwpfS .fsgr. The other brokers, In pajritag ihe government any excess from now on and In settling on the a.ssessments made against them, will pay under protest. A dally carried stories anent a plan to form a treasurers union last week. There was no conflrmation. Box office men on the Job say they have not been approached and that the story probably started from idle talk among ticket men not now em- ployed. A union w.as proposed sev- eral years ago among box office treasurers but flivved. The brokers are beset with two opponents. One Is the government along with the prosecutor and the other Is the propo.«ed Ircblang cen- tral agency. Tuttle stated his move was not antagonistic to the latter. Box ofllce men are In pretty much the same position. Violation of the agreement would maite any of the involved bniki rs liable to a ye,ar In Jail and 110,000 fine for any one count. The prosecutor appears to have bunched the counts and that punishment goes for any one count. Brokers were Indicted on from three to 14 counts, each month since March of last year being counted, since the returns on ticket taxes Is subject to monthly settlement. ^\ liile the balan of the brokers are expected to be b-t down with a AMr-should the law be upheld, in such Instance the six months' sen tenoe of Edward and Oscar Alex- ander hangs over their heads. Not Guilty, Toe Judge Anderson assented to the prosecutor's pleading, and the whole matter Was over in less than 15 minutes after the federal grand Jury filed In with true bills against the brokers. In extending the term of the court for 18 months. It was conceded that at that time or at such time when the Alexander test case Is given a final ruling, the brokers may chance their pb as to not c'liltv, ol.^o a;,'roed to by the ...::it, Tim plvas woull only be tluujged if the AU xander verdict wore reversed. The b'ng interval w.as made bccau.sc of the time n'O- essary for the case to reach the I". S. Circuit Court of Appeals and the Supreme Court's decision. For the sche<lule of deposits which must be made hrAug. 11, cording to the volume of business done and tlie amount of excess pre- miums. Heading thU list were Broadway Theatre Ticket Agency, Charles Levy and Newman's, Leo Newm.in eai h of which must post 1". OuO. T!ie Broadway has not fig- ured In the Investigation directly, (or some ungtven reason, and Levy never appeared in court. Those who must post J3,C00 in cash arc Boscom, Inc , (leorge l!.ia- com; Arrow Ticket Agency, Inc.. William L. Deutsch, president; Louis Cohn's Agency. Samson May- er, secretary: Tyson A C-<v, Inc.. .lolin L. Mc.Namec: Library Tiikei Ollirc, nnvid A. ■W.irfield. Oreleied to post JI.SOO: Sullivan Tirket Agency, Inc , John A. Sulli- v.m; Tyaon Operating Co. To put up $1,000: Supreme Ticket Oillic, Joseph A. neulseli; J. S. Ja- cobs; Saul Sul.ber. $300 eliuw: J. L. Marks; Kay's Ticket Office, Harry Kaufman; Ty- son and Brother-United, David Marks; Sam Beckhardt; Sussmau Theatre Ticket OITlce, Inc.; Harry J. Weinsteln; Sussman'a Alamac, Herman Sussmon; Bryant's Inc.. Walter Bryant; Manhattan, Joseph F. Quinn; Calumot, John A. Ma- buoey; Premier. Jacob L. Marks; Enverin's, William Enverin; Wil- liams Agency, William Satarlc. Also Involved are the other officers In the agencies wkieh-.M* corporations, also the prnttamm la partnership offices. Through an agreement reached between Tuttle and the brokers only one of a partnership w.as held and only the pvesldent of those agencies wliich are incorporated. Originally the names of the two principal ofll- cers were Included In the complaints. Addressing the court and reading his statement, which Is the agree- ment with the brokers, Tuttle said: Tuttle's Statement Twenty-three ticket agencies, and In each Instahoe, their principal of- ficer or proprietor, have been in- dicted for willful refusal to pay the 50 percent tax imposed by the In- ternal Revenue act of 1926. The indictments contain from three to 14 counts, each count being for a given month since March. 1926, and terminating with April, 1927. 'J'lie maximum penalty provided by law In the case of each count is a fine of $10,000 and Imprisonment for one year. The separate trials of so many cases would involve both the gov ernment and the defnidants In a very large expenditure of time and money. All of the defendants are pleading guilty. They claim that the afore- said paragraph of the tax law is unconstitutional. That claim will be (?et<'rmined by the ajipeal whicli is ! lieiiig taken from the conviciion in tiie Alexander Theatre Ticket Agency case. In the event of a re versiaj of that conviction, the de- fendants would have the right to withdraw their picas of guilty, Sentence Deferred Pending final determination of the appeal In the Alexander case, pronouncement of sentence may well be pestpoMd in the present cases, reserving, however, to me the right to move at any earlier date for immediate pronouncement of sentence in any one of the said present ca.ses If the defendant in such case dtfOs not observe .and ful- fill I ertain Hgr<'*'d stiimlations as to till ir e.iniiiK t in tiie meanwiiiie. An<I I n.'itt; th.at In ''asc of any such violation I will Immediately move for sentence and will ask for a sentence of Impriaonment as well .as .a fine. I-'or the foregoing purposes, I re- spectfully request that the present term of court be extended for at least 18 months with the privilege to me to move hereafter for a longer extensitm if need be. The stipulations to be observed b.v the deffodants are; 1. \N'here tickets can be obtained from the place of amiisernent :lI not more than the box office price, tlie defendants will sell the same at not more than a 50c advance, plus 2'i cents, representing the 6 percent tax. T. Where tickets cannot be ob- tained from the iilaee of amuse- ment at not more than the box office price, they will report to the I'lilted States Attorney the n.-une of the place of amusement, man- ;iger. box office man or other em- ployee who is exacting an excess charge, whether the same be termed a eeincession charge, bfiniis. com- missinn or gratuity, or bo designat- ed by any oilier names. They will also report the amount of such exaction In such case, and until the withdrawal of such ex- action they will sell any such ticket at not more than SO cents In excess of its actual cost to them, plus tax; and in such c.af-'o will d'liver to the purchaser a written memorandum showing the amount of s'H'h ex- aelTon and the manner tTi —. y l iI' h t he priee to the luirchaser Is c; T ■iliated. The premium, if any, paid l»y any ageney to a si Ib r r tlH r tban th<> Iilace of amusement will not tv^ in- cluded in the price tbajged to the purehayer. 3. The defendants will keep How Ticket Agencies Will Sell Under Agreement With D. A. The 24 tlieatio titket ngenoles which made a tacit agreement with V. S. Distrii t Attorni'v Charles H. Tuttle to hold down premiums on theatre tickets « :il nttemi't to sell at .'.0 cents over the box office price. Tuttle who is att. iiiptioK to cut off box ofllce men and managers from bonuses from the lirolvi-rs, recegnf/ed the possibility of the agencies payitig bonu.-ts or gratuities for tickets for the leading suceesses. Tlic Mgr-enietit stipulated therefore that the agencies .'■re to sell nt 50 la nts over what it actually costs the agencies to get tiek.ts. Tlie nietlmd of pr. cediire will he this: If an ageiio pa.\s 2."i cenis to a box oltic-' lis a bonus t-er I.. Ket, the I'ustomer would not be cliargcd 750 plus the usual -i-a cents tax, but as one half the total excess should go to the government where the premium Is about 60 cents, the customer would pay that much additional, or 37", for a total of $1 12';; the S7'4 cents to be placed in esc-rnw. Should the 50 percent tax levy be upheld, all such monies must be paid to the government but it found to be unconstitutional as claimed by the agencies, the latter would check back the deposits to themselves. Where a bi-iius or ^;i-atiii(y amounts to 50 eents over the box office price, the customer would be charged $1.25. and 50 eents of that would be deposited in escrow. It will be noticed that the gratuity Is not figured in the tax. Gifts Net Taxable It Is understood that the governmAit concedes that when a box ofllce man receives gratuities, such money Is regarded ns a gift and is non-taxable. If a set figure per ticket is exacted by a man- ager or other employee, the government figures on claiming one- half of al! such collections. In selling tickets for which a gratuity has been paid, the customer must bo supplied wilh a slip by the broker setting forth the amount paid as gratuity and the amount to be deixislted In escrow. Previous to the ticket investigation, where there were excess premiums, one-lialf of all above 50 cents was the amount believed collectable by the government. I'lacing the new Interpretation on the law Is expected to bring out on appeal of the Alexander case that the statute is regulatory and confiscatory. Karly tliis week t>rol(ers said they thought the system outlined for them was too burdensome and expected to attempt selling on a stric' &0-cent premium. » the regulations adopted pursuant to tho internal revenue act of 1926; and will not destroy any such books or records save as provided in such regulations. In Escrow 4. Bemling final determination in the Alexander cu.se, the defendants will pay into ji b.ank or trust com- pany, to be designated by tlie United States Attorney, the full amount of tlie 50 percent tax Im- posed by section 600 (A). I'ara- graph 2 of the Internal revenue act upon tickets sold since June 1, 1927 The said payment Is to be In escrow. If the said tax is adjudged unconstitutional In the Alexander case, the sum Is to be returned to the paying defendant. Otherwise, it Is to be paid over to the govern- ment. As to l.axes accruing prior to June 1. 1927. the defendants will immediately t:ike up with Hugh McQuillan, chief of tlie intelligence unit of the Internal Hevenue De- pjLrtrnent. the settlement and mode of payment thereof. Mr. McQuillan tells me that the amount of these arrears for the 14 months Is at leant $637,000. (6) Within the next two weeks the defendants will pay into the registry of the court the .sums set opposite their respective names In a schedule which I hand to the Court and make part I'f tlie record, to be held for tiie purpose <,f ap- plication to any fine which may ultimately be imposid upon the payers, respectively. If. liowi vi r, . onvietlon In the Alexander case Is reversed, the defendants may with- draw the said sums. The amounts of these deposits are not. to be deemed limitations ufKin any other fines or other sentence which the Court may impose. Observance If the defendants faithfully ob- sei ve tlie foregoing stijiul.itions, I am willing to take sueb observ.mee into favorable (onsiibrallon In ilie event the convietirm In the Alex- andt.T ease la ndlrmed, and there- uiion move for a suspension of such prison sentence In the present cases as the Court 'may then impose, or ■n*(v»» to place uiion probation un- iler pris.in sentence. In such case, also, I lliir.k it rif'hf to rei|uest the Court t'l givi' fav. riMe e.inHi<b'ia- tion to mch observar.'c by the de- fendants of the stipulations. "I Kln<erely trust thiit these ar- rangements, which are intf'Uded to provide the public wilh security against fnrther gouging, and also to assure to the United States Oov- ernment proper payment of Ms taxes, will commend Itself to the Cfiurt. If th»'y do meet with the ap- proval of the Court. It will be my purtMise to write to each of tbe theatrical m.inagers setting forth what has been ilone here. I will ask that in the Interest of the pub- lic, they see to It that such tickets as they may sell to these agencies, they sell strictly at box office prices and terminate any other exactions ^\.^<hf^r i.y ih- mselves ^.r by their box office men. In view I.' the f:ie» that the ,'i"en' i- • new stiitel s- II' ;v I'om- inilt'fl i^^. ili-n.-.r-r ri ;tovaTKf of n')t exre<'(ting 5u cents <iver ro-'t the reHponslblllly for «nv greatir charge to the ptiblis n.ict re:-t sole- PLAYERS TAKE GARRMX FOR REP. LKE CmC^ Mary Kills and Basil Sydney have taken over the Carrick, New York, on lease asstrmlng tenancT In September for a season OC repertoire similar to that already established by Eve Le Oaillenne'a Civic Repertory theatre In 14th street. Miss Ellis and Sydney are cur- rently heading tho repertoire com- pany at the Newport Casino. New- port, R. I., where they will remain until the latter part of next monlk after which they win proceed to New York to fTf.'inii^e their New York rep ' . m,, . ,.. UBS. eso. M. ooHAir m. Mrs. fieoigc nt. Cohan has been 111 at the C'dians' suite at the Hotel Ambassaibir. His wife's condition has worried Ceorge M . preventing his full attention for produe'tioQ preparations. Louise Brooks In "Air" Film Los Angeles. Au«r. 2. Louise Brooks has been scb efnd to play oppnslte W.illaee IJeeiy and Raymond llatton In "Now We're In Production started Monday. "Truly" in Chi. Aug. 14 Chicago, Aug. 2. fJeric Buck's "Vours Truly," with Leon Krrol, fr>llows "finy Baree" at the four Cohans, Aug. 14. I" such additional ex.o tion nuts ;iny of his emt'Ioyees to d" so. In su. Ii ease, I shall feel It hi\ .Inty by fvrry pinalty wliieh the law provides, to enforce the 50 per cent lax uiton .-my addition:il exaction. Central Office In all this there Is nothing hostile to any plan which certain managers are formulating for a central ticket agency. Such agency |s not yit to operation and until this comes about there seems to be no reason why the managers should not sell tho tickets at box office prices to < such agencies as they may deal with. I shall also write to all th' prin- t Ip.al clubs asking their co-opt-ra- tion and rer|ue.''ting them to see lha.t their members do not in any event pay more than the slight ad- vance of 50 cents, and that the plan In vogue in certain clubs of re- ceiving commissions f r <i m the agencies, eitloT fur the eluii Itself or So me (if itr emx.loj^i^i s. b' d is'on- tlnued. Ccujnsid aetlntr for defence on hand were former Congressmail •Nathan IJ. Perlm.m; Charles H, ■ Irillith, former district attorney; lle'iry l;ei:',.[-; f>.rru*r .Vagistrata I'.