MOTION-PICTURE FILMS WEDNESDAY, MAY 22, 1940 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The committee met at 10 a. m., pursuant to adjournment, Hon. Clarence Lea (chairman), presiding. The CHAIRMAN. The committee will come to order. Congressman Costello, of California, I understand, is to be the first witness. Congressman, we will be glad to hear you at this time. STATEMENT OF HON. JOHN M. COSTELLO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. COSTELLO. Mr. Chairman and gentlemen of the committee: I appreciate very much this opportunity of appearing before your committee, because I represent that location in California in which the production of pictures first originated out there. However, since the inception of the motion-picture industry in Hollywood it has grown to such an extent that today it is scattered through four of the eight congressional districts located in Los Angeles County. As a result, four of the eight Members from that county now are representatives of districts in which the industry is located. While I may correctly claim to represent Hollywood, along with my other colleagues, nevertheless I cannot claim that I represent the motion-picture industry. The making of motion pictures is such a small part of this great industry. By far the greater part is represented by the theaters located throughout the Nation, in which there is invested 94 percent of the total capital invested in the motionpicture industry. The theaters employ 86 percent of the total number of regular employees, and receive 68 percent of the total pay roll. So, gentlemen, you may rightly claim to represent the motion-picture industry just as much as I can, since you may have, in your various congressional districts, even more theaters than I do in my own district. However, since there are some 28,000 persons employed directly in the production end of the motion-picture industry, and because of the fact that some 75,000 persons are dependent upon the industry for their livelihood, any legislation which proposed serious injury and irreparable harm to this industry is a matter of real concern to me. Mr. Chairman, I do not wish to take a great deal of time of the committee, but I would like to briefly go through the bill and point out various portions of it which to me appear to be impractical in the event this bill becomes law. Section 1 of the bill declares that block-booking and blind selling are to be considered contrary to public policy. Now, gentlemen of the committee, the motion-picture industry differs materially from any other type of industry, and yet in many ways it is quite similar to the automobile industry, for example. In the automobile industry we certainly have block booking of auto sales to retailers by the manufacturers as well as blind selling of new models, and yet who would say this is contrary to public policy? It seems to me that block-booking is merely wholesale merchandising, the selling of merchandise in blocks, and that blind selling is really not blind selling but blind buying. And there is nothing in it that is contrary to public policy in spite of the fact that this legislation would so declare it. In line 2, page 2, of the bill, it is stated that such practices interfere with the free and informed selection of films on the part of exhibitors, and prevent the people from influencing such selection. While the proposals of this bill might enable the exhibitor to have some idea of the nature of the picture he is about to lease, yet nothing herein provided will enable the public to influence such selection; they will not know any more about the picture prior to its exhibition than they do now. There can be no such thing as community selection unless you actually establish community boards of censorship. The only way the people of a community can exercise any influence on the selection of pictures is through the box office. If patrons of a theater dislike cowboy pictures they merely refrain from attending, and if they like that type of entertainment then they patronize the theater, and it is only in this way that you will have an effective influence on the type of pictures which an exhibitor may select. Let me briefly call your attention to the fact that this proposed legislation cannot in any way tend to alter the type or moral fitness of a picture production; that can only be done either by censorship from within or from without the industry or else by boycott of such production. This latter method was effectively employed by the Legion of Decency. The moral tone of pictures has been decidedly improved as a result of that movement, and it is still an active influence today. Many an exhibitor, several years ago, employed block-booking as a ground and an excuse for showing undesirable pictures, when the patrons complained of such pictures. Yet block-booking was only an excuse and not the cause. The exhibitor could have rejected such pictures and shown others of a different type. Exhibitors have always been entitled to reject a certain percentage of the films contracted for in a block, but did not reject the objectionable pictures because of the box-office profit for them. As a result, block-booking has been denounced as contrary to public policy when in fact it is simply the wholesale merchandising of products in a manner similar to that employed by all other forms of industry. Line 6, page 2, of the bill states that it tends to create a monopoly in the picture business. Yet, I state to you that it no more tends to create a monopoly than the same process tends to create a monopoly in the manufacturing of automobiles and their distribution. In order to maintain continuity of exhibition, the block-booking method of distribution was developed. It was injected into the |