will not be presented. Instead we have decided to follow the course suggested by the chairman and merely present their statements for insertion in the record.

Accordingly I have the honor to present brief statements from the following gentlemen and ask that they be included in the record: Roy E. Harold, president, Associated Theater Owners of Indiana, Inc.

P. J. Wood, secretary, Independent Theatre Owners of Ohio, Inc., Columbus, Ohio.

J. C. Quinn, executive secretary, Allied States Association of Motion Picture Exhibitors of California, Arizona, and Nevada, Inc., Los Angeles, Calif.

Ben Ashe, business manager, Allied Theatres of the Northwest, Minneapolis, Minn., with attached correspondence showing how Destry Rides Again was used as "stop picture" to force the showing of Tower of London.

Leo F. Wolcott, president, Allied-Independent Theatre Owners of Iowa and Nebraska, Inc., Eldora, Iowa.

Francis C. Lydon, Milton, Mass.

The CHAIRMAN. Those statements will be received and made a part of the record.

(The statements referred to follow:)

STATEMENT OF ROY E. HARROLD, PRESIDENT, ASSOCIATED THEATRE OWNERS OF INDIANA, INC., RUSHVILLE, Ind.

Being unable to appear in person at the public hearing now taking place before your committee on S. 280, I desire to place the Associated Theatre Owners of Indiana, Inc., on record as being in favor of the bill.

In common with other independent theater owners in the United States, the Associated Theatre Owners of Indiana, Inc., representing in its membership 70 percent of the independent exhibitors in the State, believe that S. 280 should receive a favorable report from your committee:

(1) Because it will give the theater owner the freedom he is entitled to in the selection of motion pictures which he shows his patrons.

(2) Because it will compel motion-picture producers to cease selling numbers and start selling a definite commodity, namely, pictures that are outlined in such manner that the exhibitor will know exactly what he is to receive under his contract.

(3) Because it will enable the local exhibitor to satisfy in a greater degree the needs and wishes of his customers since he will no longer be forced to buy pictures with his eyes closed.

(4) Because it will open up competition in the production of motion pictures when independent producers are assured of a market for their product, resulting in the stimulation of the theater business.

(5) Because it will put an end to the practice of forcing inferior or "mine run" pictures as substitutes for first-class product which has been detrimental to the independent exhibitor.

(6) Because it will place the small independent theater owner on the same footing as the theater owner affiliated with the distributors and producers of motion pictures, in that he will be able to buy only the pictures he wants and needs an advantage which is already enjoyed by the affiliated theaters.

(7) Because it will tend to place the production of motion pictures on the merit basis and make the producers responsible for their mistakes; whereas, under the present conduct of the industry loose, inefficient, and uneconomic practices continue due to the fact that producers by blind selling can force exhibitors to play their product regardless of its merit in relation to the price paid. STATEMENT OF P. J. WOOD, SECRETARY, INDEPENDENT THEATRE OWNERS OF OHIO, INC., COLUMBUS, OHIO

The producers-distributors complain that the Neely bill, S. 280, if enacted, will saddle too great a burden on the industry, the great corporations composing it

and their stockholders. But they are really seeking to protect major executives in the enjoyment of salaries and bonuses the like of which was never heard of before and which make the salaries of the President of the United States and other Government officials seem paltry by comparison.

As one outstanding example, there is shown below the salaries and bonuses paid to 14 executives of Loew's, Inc., one of the eight major motion-picture companies during the period of a year:

The foregoing total represents 31 percent of the entire combined net profits of the corporation, or 3.91 percent of the total gross business done by Loew's, Inc., during the same fiscal period.

From reports filed with the Security Exchange Commission, it is found that 552 motion-picture executives, directors, etc. during a period of 1 year, were paid the following amounts:

By Twentieth Century-Fox to 167 individuals_

By Universal Pictures to 57 individuals__

By Warner Brothers to 151 individuals.

By Columbia Pictures to 18 individuals.

By Loew's, Inc. to 14 individuals___

By Paramount Pictures to 145 individuals.

Total.....

$8, 647, 000 2,254, 000 8, 392, 000 918, 000

4, 712, 400

7, 458, 000

32, 381, 400

The stupendous sum paid to these 552 individuals represents 65,000,000 hours of labor at prevailing rates, or it will take care of more than 43,000 American families for a period of 50 weeks at $15 per week.

While these 552 individuals were paid over $32,000,000, or an average of approximately $60,000, a report issued by the Central Casting Bureau in Hollywood showed that 23,000 extras were paid but $2,250,000, or an average of less than $100, during the period of 1 year.

STATEMENT OF J. C. QUINN, EXECUTIVE SECRETARY, ALLIED STATES AssociATION OF MOTION PICURE EXHIBITORS OF CALIFORNIA, ARIZONA AND NEVADA, INC., LOS ANGELES, CALIF.

This association is strongly in favor of the Neely bill, S. 280, to prohibit the compulsory block-booking and blind selling of motion pictures.

We realize that Members of Congress have been bombarded with a great deal of misleading information about this bill by the major producers and distributors who are striving for selfish reasons to defeat the legislation.

We enclose herewith a memorandum dealing with certain recent claims made against the bill. This is very brief and will not take long to read. please give it your personal attention at this time?

Won't you

The independent exhibitors favoring the bill are an important and deserving part of your constituency. With their home-owned theaters they have substantial investments in your district. They merit and should have your support as against the major producers and distributors with headquarters in New York. May we count on you to support the bill?

(The memorandum referred to follows.)

MEMORANDUM IN RE S. 280-THE NEELY BILL TO PROHIBIT THE COMPULSORY BLOCKBOOKING AND BLIND SELLING OF MOTION PICTURE FILMS IN INTERSTATE COMMERCE

MAY 1, 1940.

I. Is compulsory block-booking fair play? The Big Eight producer-distributors in their efforts to kill the bill stress the inconvenience to the industry which they claim will result from its passage. Are not these the same claims that have been made in opposition to all remedial legislation by the industries affected? These purely speculative claims should not stand in the way of needed legislation in the public interest.

The public aspects of the bill have been fully presented to the Congress by the public groups supporting the bill.

In behalf of the independent motion-picture exhibitors supporting the bill, let us ask the reader the following question:

Would not you feel that you were entitled to the protection of Congress if you had your earnings invested in a retail business and each of the eight great corporations controlling the necessary supplies said to you, in effect, "If you want to buy any supplies from me, you must contract to take all that I see fit to manufacture and deliver to you, but I will not furnish any specifications or even describe the goods in any binding fashion?”

II. Who want the Neely bill? Thirty-four national religious, welfare, educational and independent exhibitor organizations have by formal action declared against compulsory block-booking and blind selling. Their combined membership runs into the millions. Most of them are actively supporting the Neely bill. Thirty-two of these organizations are listed in the enclosed Allied White Book, page 10. Newcomers in the group are the Presbyterian Church of the U. S. A., Board of Education and the General Alliance of Unitarian and Other Liberal Christian Women.

Editors of the Protestant Church publications at a recent meeting in Washington approved the Neely bill and it is being supported by the religious press.

The constituency of those groups far outnumber any opposing groups or interests in every congressional district in the United States.

III. Who are against the bill? First and foremost, the Big Eight producerdistributors (Paramount, Metro, Warner Bros., Twentieth Century-Fox, RKO, United Artists, Universal, Columbia), with their main offices in New York and their studios in Los Angeles. Five of these companies operate or are interested in 2,300 out of a total of 16,251 motion-picture theaters in the United States. They have film exchanges in 32 cities. According to the Department of Commerce, approximately 25,500 people are employed in production as against 241,000 employed in the theaters. The Big Eight have required all their employees to write their Congressmen to oppose the bill (see White Book) but it is obvious that they are a minority among the employees of the combined industry. And it should be remembered that the earnings of the independent home-owned theaters remain in the community whereas the earnings of the film exchanges and the affiliated theaters are piped to G. H. Q. in New York.

Admittedly some independent exhibitors have been coerced into writing letters in opposition to the bill. Some have been terrified by the Big Eight's predictions as to what will happen under the bill, which predictions will not stand up in the face of its actual provisions. This will be disclosed at the hearing. But the independent exhibitors as a class have long opposed compulsory blockbooking and blind selling and are for the bill.

IV. Hollywood glamour versus the facts: The Motion Picture Producers & Distributors of America, Inc. (the Hays Association) is leading the fight on the Neely bill. Under date of March 8, 1940, it sent an order to all studio publicity executives to have all actors write letters to their Congressmen against the bill. Congressmen who have received letters from the glamour girls and boys of Hollywood, who receive salaries many times in excess of that paid to the President of the United States, will be interested to learn the inspiration for those letters. Th order in question reads in part as follows:

* * * Your assistance is necessary to carry out successfully a letter campaign. Sample letters, lists of names, etc., are attached. Here is the program:

1. Have the people on these lists write and sign letters on their personal stationery and send them to the representatives from their home States. (Lists attached.)

2. Have them write and sign letters on their personal stationery to the chairman and members of the Committee on Interstate and Foreign Commerce in the House of Representatives, lists attached.

3. Have them write and sign letters on their personal stationery to the secretaries of the chambers of commerce in their home towns.

4. From time to time it will be necessary for your departments to help obtain signatures to special statements.

We are sure each of you realizes the importance of this work and we are counting upon you to see that it is carried out.

According to the trade papers 23 stars joined in a letter to the chairman of the committee, "slapping the Neely bill" and asking that the letter be submitted to the committee at the proper time. The circumstances under which the letter was written will also be submitted to the committee at the proper time.

According to an Associated Press Dispatch (Washington Sunday Star, April 28), Warner Bros. has decided to hold a "sales convention" in Washington, while the Neely bill is still under consideration, for the avowed purpose of influencing action against the bill by the House. To emphasize that this is not a mere sales meeting, trade-paper accounts say that "big independent exhibitors" will attend, as well as a contingent of motion-picture stars, including Ann Sheridan, the "oomph girl." Congressmen will be invided to attend the sessions and undoubtedly the stars will be entertained at parties to which the Congressmen and their families will be invited. Thus the Hollywood Salomes will dance before the congressional Herods for the head of John Neely bill.

But the device is a familiar one-too familiar to be effective. Any Congressmen who may attend these affairs will keep a tight grasp on their votes.

V. Is self-regulation enough? In 1934 a Nation-wide boycott of motion pictures was inaugurated because of the large number of salacious and violent pictures then being released. Will Hays organized the Production Code Board in Hollywood and conditions as regards smut improved. In his last annual report Mr. Hays gloated that during the preceding 12 months no picture made by a member company had been condemned by the Legion of Decency. No sooner was this report made than the Legion issued the following ratings and grounds of objection: Primrose Path, RKO, class B-Objection: Though prostitution and the attendant evils and antecedents are presented as unattractive, degrading, and sordid, the film concerns itself with prostitution as background setting and important subject material, and may, especially in the light of the dire familiar circumstances depicted, tend to create fatalistic attitude and arouse some sympathetic reactions. Strange Cargo, M-G-M, class C-Objection: This picture, in which religion is the prominent issue, presents a naturalistic concept of religion contrary to the teachings of Christ and the Catholic Church. Irreverent use of Sacred Scripture. Lustful implications in dialog and situation.

As this is written, Primrose Path is being shown at the RKO theater in Washington and Strange Cargo is being shown at Loew's Palace Theater.

Both pictures were approved under the Hays Morality Code and both have been banned by the Police Commissioner of Detroit. No wonder the Pittsburgh Catholic, official organ of diocese, said:

In his annual report "on the state of the film industry," presented Monday, Will H. Hays, president of the Motion Picture Producers and Distributors of America, warmly defended the present set-up and policies of the industry, assailed the Federal Government's suit to break up the producing and exhibiting combination, condemned the Neely bill which would outlaw block-booking and blind selling, and attacked all those who would impose “censorship" on the pictures. The gist of his report is that the film industry can be depended upon, as a "selfregulatory" institution, to maintain high standards of art, morality, and business and should not be "interfered with."

Unfortunately, the records are against Mr. Hays' rosy picture; his industry has shown itself too often and too viciously contemptuous of the law, of moral standards, of the rights of others and of the common good, to be trusted. If conditions in the film field are better today than they were 5 years ago it is not because of "self-regulation" as Mr. Hays seems to imply, but because of the "outside" forces of which he now speaks so plaintively. The independent exhibitors are certainly not ready to agree that the "big" companies should be given a free hand to do as they please; neither is the Legion of Decency.

Another indication that the salutary effects of the 1934 boycott are wearing off is a statement of David O. Selznick, a member of the Hays Association reported in the New York Times for April 21, to the effect the production code "has become obsolete and should be modified if not scrapped altogether." The article goes on: The code was a "fortunate thing" at the time of its adoption, he says, "but its set rules have become dated and I think it is about time something was done to bring it up to date, at least."

The independent exhibitors do not profess to be moral leaders, but they have to meet the demands of their patrons and do not want to be caught again in the position they were in in 1934 when their theaters were boycotted by the public because, under compulsory block-booking, they had to accept from the producers pictures which public opinion had condemned.

The

VI. Is union labor against the bill? The International Alliance of Theatrical Stage Employees and Motion Picture Operators, dominated by Willie Bioff, is opposed to the bill and Mr. Bioff appears to have persuaded some other A. F. of L. groups to take a like stand. This action cannot be explained in any logical way because the bill contains no provisions which even remotely affect labor. asserted reason-that the bill will result in loss of employment-is ridiculous because it will open the way for independent producers to increase their output and thus increase employment. Even if we assume that the bill will result in the selling of individual pictures at frequent intervals (which we do not concede), the inevitable result will then be to require the employment of additional film salesmen.

We must look deeper for the strange attitude taken by the Bioff union. Possibly the explanation is to be found in the following paragraph from an article by Westbrook Pegler in the Washington Post for November 25, 1939:

UNION HEAD LOANED $100,000 BY MAGNATE

Bioff received $100,000 from a moving-picture magnate in 1937 and when this transaction was disclosed in an inquiry at Sacramento, it was explained the money was a loan, not a gift. The impropriety of the acceptance of such a loan from an employer by a representative of workers was not emphasized for long. However, Bioff's income tax has been under investigation and the administration of the union which he dominates also has attracted the official attention of the Department of Justice.

There is evidence that the unions are beginning to suspect that they were badly misled in regard to the Neely bill. On April 22, Local No. 802 of the American Federation of Musicians "passed a resolution urging the passage of the measure." According to the Film Daily for April 23, the petition was submitted to Representative M. J. Kennedy. Jack Rosenberg, 802 prexy, stated that it was the belief of the union's executive board that if bad pictures aren't forced on exhibitors more stage presentations with accompanying orchestra will be used.

The C. I. O., while recognizing no labor issue in the bill, has endorsed it as an antimonopoly measure and because of the widespread public interest in its passage. VII. "A miracle has happened": Under this caption Harrison's Reports, an independent trade paper, issue of April 27, reports that W. R. Wilkerson, editor of the Hollywood Reporter, heretofore a vigorous opponent of the Neely bill, has finally seen the light and is now convinced that the abolishment of block-booking and blind selling "will be the greatest boon to industry progress it has had since the inception of sound."

Coming from one generally regarded as an industry spokesman, the editor of a paper dependent upon producer advertising for its revenue, and written from his observation tower in Hollywood, Mr. Wilkerson's article is newsworthy and important. It proceeds:

"Whatever change will be made in pictures as a result of any of the legislations that are now up (and one or more of them seem a cinch to be enacted), it will call for the greatest spurt in production Hollywood has ever seen, as every piece of legislation will demand that producers and distributors have their pictures to show before they are booked. To do that, even presenting them in groups of five or less, Hollywood will be on the jump, with every studio in the business filling its stages with product and working night and day to get it finished.

"Another thing that Hollywood must expect, resulting from the changes that are a cinch to be instituted one way or the other, is the demand for better pictures, with the full knowledge that those better pictures will bring better returns than the picture business has ever seen, other than the current exhibition of Gone With the Wind. Pictures will have to be shown before they are booked. This will, of necessity, eliminate a lot of the "B" and "Z" shows that the majors have turned out. But with the production of better pictures and their being shown for exhibitors to buy, the distributors will then be able to make individual terms on individual pictures or individual groups of pictures, which will necessitate the exhibitor charging higher admissions, as he will be glad to do under the new scheme of things, resulting in more money for better effort.

"It's this writer's impression that the change that is to come will be the greatest boon to industry progress it has had since the inception of sound, that every branch