of the business will profit, that the picture industry will thrive and build as a result of the change.' No sooner had we caught our breath after the shock of this volte-face than we came upon a four-square editorial in Variety, a similar publication, issue of May 1, entitled "Block Booking Must Go." Thus two of the Big Eight's most powerful spokesmen have, within the space of a few weeks, come out boldly against compulsory block-booking and blind selling. The Variety editorial contains the following notable paragraph: "Whatever the ultimate of the pending litigation or the threatened legislation, the fact seems very apparent that nearly all the troubles in which the film industry finds itself at the moment stem from one source. That source is the trade practice or block-booking and blind selling of films. "Litigation and legislation will cease when block-booking and blind selling are prohibited by law." VIII. Admission prices: One feature of Wilkerson's editorial that may be seized upon by opponents of the bill is his reference to higher admissions. Much of the agitation against the bill has been based upon the unsupported assertion that it will result in increased cost to the public. A little thought will dispel any doubt on this subject. Admission prices are higher today than they used to be primarily because of the extravagant salaries paid to executives of the producing companies and their stars and to admittedly wasteful production methods. Neither the exhibitors nor the big company stockholders are the beneficiaries in any substantial degree. The producer-owned first-run theaters are the ones that set the standard and their high admission policies are protected by withholding the pictures from the subsequent-run low-admission theaters for unreasonable periods of time. As an example of the lengths to which the producer-owned theaters in combination with the producers will go in protecting their high admission houses, we urge that you read the decision of the Supreme Court in Interstate Circuit v. United States (306 U. S. 208). In that case the Interstate Circuit, in Texas, a Paramount affiliate, to protect its high admissions, conspired with the distributors to permit subsequent-run competing theaters to have pictures only upon the condition that they refrain from showing double features and charge admissions of not less than 25 cents. Members of Congress may recollect that twice during the past winter producerowned theaters increased their admission prices-Loew's Palace for Gone With the Wind and RKO for Abe Lincoln in Illinois. This was because they thought they had hit pictures and that the public would stand for it. So far as Gone With the Wind is concerned, the distributor, Loew's, Inc. (Metro), will not lease it to an exhibitor who will rot agree to increase his admission prices above those theretofore charged. It is claimed that that picture cost $4,000,000 to produce. According to reports it already has grossed upwards of $17,000,000. The exhibitor pays 70 percent of his gross receipts for film rental, retaining only 30 percent for operating costs, overhead and profit. Yet the producers say the Neely bill will result in increased admissions Finally, and most important, the Neely bill is an antimonopoly measure the intention and undoubted effect of which will be to open the way for new competitors to enter the motion-picture business. Statements by independent producers at the hearing before the Senate committee (pp. 143, 145-146) make this clear. Free and open competition is the great regulator of prices. Once independent production, now throttled, is assured of distribution outlets, and a fair share of the running time on the screens, neither the exhibitors nor the public will need worry about exorbitant costs or increased prices. STATEMENT OF BEN ASHE, BUSINESS MANAGER, ALLIED THEATRES OF THE NORTHWEST, MINNEAPOLIS, MINN. You will recall that I intended to testify before the congressional committee with reference to my experience in canceling or attempting to cancel out pictures which are undesirable for showing in my theater in Fergus Falls. I screened The Tower of London and because of the horror it contained, I deemed the picture unfit to show at the Lyric Theater, Fergus Falls. I, thereupon, called the Universal manager, Mr. Johnson, and attempted to cancel it out. He assured me I would make a lot of money and I had better play the picture. I, however, still did not wish to play it and so I wrote him on January 7 attempting to cancel. That letter and the letters of January 8, 15, and 22 which I am herewith enclosing will give you a summary and story of his reaction to my attempts to cancel. Finally, I had to pay for the picture in order to get Destry Rides Again, and not play it. I did this and still have not played the picture, nor do I intend to play it. You have my permission to use this correspondence and to place it in the record of the hearings before the congressional committee. I have the customary 10-percent cancelation on my regular Universal contract. (The correspondence above referred to follows:) LYRIC THEATER, UNIVERSAL FILMS, INC., Minneapolis, Minn. Fergus Falls, Minn., January 22, 1940. GENTLEMEN: Enclosed please find my check for $80 in payment of Destry Rides Again which I play January 26 to 30. With this check, I have now paid for every bit of film which you claim is a prior release to Destry. I have taken care of The Tower of London by cancelation. Will you kindly confirm? Yours very truly, Ben Ashe/K. (Confirmation of booking of Tower of London is attached to the correspond ence.) Mr. HAROLD JOHNSON, Universal Film Exchange, Minneapolis, Minn. JANUARY 15, 1940. DEAR MR. JOHNSON: This will acknowledge your letter of January 8, which was in reply to mine of the 7th. In that letter, as you will recall, I asked you to please cancel Tower of London on the grounds that it was a horrible picture, not fit to be shown on the screen. Your reply is to the effect that it is an entertaining picture and that the majority of the exhibitors are booking it on Sunday-Monday and Tuesday. I also note an implied threat on your part that if I insist on the cancelation of this picture you will not let me have Destry Rides Again. Notwithstanding your attitude, I must and do insist on cancelation of The Tower of London on the grounds stated above and in my letter of January 7. I wonder just what you think constitutes entertainment in a motion picture. You will recall that The Tower of London opens with a scene where Karloff chops off the head of some victim. You will recall that during the picture we witnessed such scenes as the stabbing of the King while he is praying, with the remark of Rathbone to Karloff that "the shadow of the cross will better mark the spot" where Karloff is to plunge the dagger into the King's back. You will recall that among other scenes we have another very "entertaining" one showing the poor victim strung up by his thumbs and Karloff threatening to burn out either his tongue or his eyes with red-hot iron pincers. The scene in a very "light" and "comical" fashion then shifts to this poor wretch on the rack being stretched until it appears that his head will be torn from his body. Among other "very amusing" scenes in the picture is the one where one of the victims is drowned in a vat of ale into which Karloff and Rathbone throw him and then close the cover and jump on the vat while the audience is allowed to "enjoy" the gurglings of a drowning man. If this is not "funny" enough and if that is not enough "entertainment" we are finally treated to a scene where Karloff walks in and measures the length of the boy princes, then goes out and digs their graves, and having done so, goes back into their chamber with his assassin helpers and strangles them, practically before our very eyes. If this be "entertainment" in your eyes, I still do not want to show it to the little children, men, and women who come to my theater. Therefore, again I ask that you cancel Tower of London. Yours very truly, Ben Ashe/K. Mr. BEN ASHE, ANNIVERSARY DRIVE, DECEMBER 31 TO MAY 4 January 8, 1940. Fergus Falls Theater Corporation, Minneapolis, Minn. DEAR MR. ASHE: This is to acknowledge receipt of your communication of the seventh, in which you request cancelation of The Tower of London on the grounds that "it is the most horribly brutal and revolting picture I have ever seen." Inasmuch as this picture is doing outstanding box-office business everywhere we cannot accept the statement in your letter of the above-mentioned date as a basis for canceling this picture. It is my knowledge that you have seen as many motion pictures as the writer personally, and I can at the present time name three popular, successful, current releases that are a great deal more gruesome than this picture. An entertaining, truly historical document such as The Tower of London could not do otherwise than to portray accurately the sequence of events depicted. The authenticity of this production is such that it carries exploitation and showmanship possibilities, and results to date in this particular territory are such as to justify your selling this picture as it should be, as the majority of bookings in the office at present are Sunday-Monday-Tuesday bookings. It is my opinion you will not be disappointed either as to box-office or customer reaction. Kindly submit date on this attraction prior to Destry Rides Again. Yours very truly, HBJ/M. UNIVERSAL FILM EXCHANGES, Minneapolis, Minn. UNIVERSAL FILM EXCHANGES, INC., JANUARY 7, 1940. (Attention Mr. H. B. Johnson.) DEAR MR. JOHNSON: Despite your assurances that I will make a lot of money with it, I want you to please cancel out The Tower of London, on the grounds that it is the most horribly brutal and revolting picture I have ever seen. Yours very truly, Ben Ashe/K. FERGUS FALLS THEATER CORPORATION. STATEMENT OF LEO F. WOLCOTT, PRESIDENT, ALLIED-INDEPENDENT THEATER OWNERS OF IOWA AND NEBRASKA, INC., ELDORA, IOWA Regarding cancelations, forcing shorts, news reels, and score charges, please be advised that without exception all companies who in recent years had been exacting score charges, now merely add this amount to feature rentals. This applies to Warners, MGM, Paramount, and 20th Century Fox. No company in this territory is actually forcing the sale of shorts, but in numerous instances their sales efforts have been persistent, to say the least. MGM is allowing 20 percent cancelation from all price brackets where the average price is less than $100, exactly as stated in their announcement. Warners is also allowing cancelations as promised. Paramount sold 47 features wherever possible and we are now informed they will deliver only 47 features this season. Their salesmen told me last fall they would sell their entire proposed feature output and allow the 20 percent cancelation, but the price would have to be raised accordingly. We have had considerable difficulty here with Twentieth Century-Fox cancelations. Independent exhibitors were advised by the branch offices that only 10 percent cancelation would be allowed. We corresponded at length with the company officials in New York and were advised that all branches had long since been told to allow 20 percent cancelation, but on applying to the exchanges for the cancelations were were advised they would be allowed only from the lowest price bracket. After further correspondence we conferred with M. A. Levy, district manager, in Des Moines yesterday and were advised by him that since some of their contracts were sold one way and some another, they could not handle all alike. He said they would treat each situation individually. I do not anticipate the 20 percent cancelation will be allowed from all price brackets. MGM, Twentieth Century-Fox, Paramount, and Warners rigidly enforce block-booking in all situations I know anything about here. RKO, Universal, and Columbia do likewise wherever possible, i. e., in competitive situations. It is possible for single theater towns to buy partial feature deals from RKO, Universal, and Columbia but upon analysis of such deals it is found they usually amount to about the same as a full deal with 20 percent cancelation. Most small towns find after they have been forced to take the full line from MGM, Twentieth Century-Fox, Paramount, and Warners they have no playing time left and are therefore unable to contract for the partial feature output of the other companies. This naturally results in their being unable to show many worthy and desirable pictures each year. Please feel at liberty to use this letter in any manner you see fit. Kindest personal regards. LFW/mbs. LEO F. WOLCOTT. STATEMENT OF FRANCIS C. LYDON, MILTON, MASS., MANAGER HAMILTON THEATER, DORCHESTER As a proponent of the Neely bill, S. 280, to abolish block-booking and blind selling in the motion-picture industry, I wish to state for the committee's information that I am a resident of Milton, Mass., and that I am at present the manager and part owner of the Hamilton Theater in Dorchester. My experience in the motion-picture industry dates back to 1912, when the Hamilton Theater was opened; and since 1918 my efforts have been devoted exclusively to the operation of two theaters in South Boston, one in Lowell, one in Milford, and one in Dorchester-all Massachusetts. These theaters have always been operated on a low-admission basis and have catered to the low-income group of movie patrons. Two years' experience on the arbitration committee of the film board of trade and several months of service on a local clearance board under the National Recovery Administration have also been a valuable experience to me. In addition, in my present capacity as president of Independent Exhibitors, Inc., of New England, a trade organization representing 200 independent theaters, and my further duties as eastern regional vice president of Allied States Association of Motion Picture Theater Owners with supervision of units in Washington, D. C., Baltimore, eastern Pennsylvania, New Jersey, Connecticut, and the rest of New England have brought me in close contact with independent theater owners throughout the East. Every State unit of Allied States Association under my supervision has been recorded as favoring this legislation, and a great many of the member theater owners share a belief with me that the present deplorable conditions in the motionpicture industry; namely, 86 pending antitrust actions, 30,000,000 fewer admissions per week than formerly prevailed, and very many unfair trade practices are a direct result of the policy of block-booking and blind selling which prevails in the industry. Block-booking and blind selling has permitted the major film companies to eliminate competition from independent producers and has also permitted them to reduce their own output until the ratio between supply and demand has become such that thousands of independent exhibitors must yield to every unreasonable demand of the producers if they wish to continue the operation of their theaters. In this connection I would like to call the committee's attention to figures taken from the Film Daily Yearbook, 1939 edition, which is recognized as authoritative in the trade. These figures have to do with total domestic production and do not include foreign films. It is very obvious from the above figures that a 33-percent reduction in output is a severe restriction on the theater owner's bargaining power as well as his possibilities of obtaining that particular type of entertainment which is most suitable to his patrons. In my opinion, it would be reasonable to assume that this restriction also has some bearing on the fact that labor in the exhibition division of the industry has an extremely lower average income than the other two branches of the industry. In this connection I would like to submit the following employment and pay-roll figures as revealed in the Film Daily Yearbook, 1940 edition: I have found in conversations with a great many exhibitors who are not members of my organization that they too share our beliefs with respect to this legislation. However, they are reluctant to so record themselves because of fear of retaliation and persecution by the distributors. Furthermore, this same fear of reprisals has a tendency to stop these exhibitors from giving support through membership to the aggressive activities of Allied States Association in its efforts to revise trade practices to a basis of fair dealing. I shall try to confine my further remarks to my own particular theater operation, the Hamilton Theater in Dorchester, with a 25-cent evening admission price, 600 seats, in a residential section of Boston, and a patronage in between the low and middle income groups. The Hamilton Theater operates on a double-feature policy, as do 10,000 other theaters in the United States, and we change our program three times weekly. Accordingly, our annual film requirement is 312 features. The total domestic distribution of feature pictures for the current season, 1939-40, is as follows: Paramount, 47; Fox, 52; Metro, 52; Universal, 43; Columbia, 41; Vitagraph, 48; R. K. O., 48; United Artists, 20 (4 foreign, 5 superseding); Republic, 30; Mono24. gram, For Here we have a total of 405 features. However, because of exorbitant film rentals, or for other substantial reasons, it is necessary to refrain from doing business with at least 1, if not 2, of these 10 film companies every year. example, I have found it necessary in more than one season to leave out both Metro and Paramount, and in so doing have reduced my availability of product. by 99 features, from 405 to 306. Inasmuch as I require 312 features per season, the committee can well understand that even though the remaining film companies were to grant me extensive rejection privileges or cancelations, I would be unable to take advantage of them. In other words, I must play all of the output which I have contracted for in order to maintain my policy and am required to disregard the preferences of my patronage on the type of entertainment which they wish to enjoy. No doubt there are at least 7,500 small theaters in this country requiring approximately 300 feature pictures per year, and they are penalized by this condition. Preferences of my patronage above referred to is another way of saying community selection or community freedom. It means simply this, that whereas a community in the upper income bracket generally abhors westerns and other action type features, and whereas residents in the very low income group have no desire for dress-suit pictures the exhibitors in either location should not be obligated to force the undesirable type of picture on his particular element. It is my contention that enactment of this legislation will make it possible to present to my patrons that particular type of entertainment which they desire. Further, that annual feature-picture output will increase and keener competition in production will result in more feature pictures of merit, and the wage level of 255 people engaged in the theater branch of the industry will undoubtedly be increased as a result of improved attendance in theaters throughout the country. Mr. BOREN. Mr. Chairman The CHAIRMAN. Mr. Boren has some questions, Mr. Cole. Mr. BOREN. About how long are pictures completed before they are released, Mr. Cole? Mr. COLE. There is no rule about that. Sometimes months before; more frequently a very short time before. |