town, and they do not want to give him competitive bidding because the other account is a friend of theirs.

Mr. BALLINGER. They can choose what areas they want to accept competitive bids in?

Mr. SOSNA. The Supreme Court has ruled that competitive bidding is not the necessary relief and they did not have to follow it.

Mr. BALLINGER. No further questions.

Chairman PLOESER. We thank you very much.
Mr. SOSNA. I thank you very much.

(Witness excused.)

STATEMENT OF A. E. JARBO

Mr. BALLINGER. Give your full name.

Mr. JARBO. A. E. Jarbo, Cameron, Mo.

Mr. BALLINGER. You are the owner of the motion-picture house? Mr. JARBO. Yes. I own a theater in Cameron, a large theater of 700

seats.

Mr. BALLINGER. Do you have a statement you want to make?

Mr. JARBO. I played all the major companies for the last 15 or 20 years, ever since Paramount started. We have another theater there. I have 17 pictures from the majors that are noted. I buy them in one to five at a time. We cannot get enough product ahead to go ahead without buying reissues, and so forth. Although the other theater is not started yet, they started bidding 2 months ago.

Mr. BALLINGER. What is the name of your town?

Mr. JARBO. Cameron.

Mr. BALLINGER. How many theaters?

Mr. JARBO. One other and another one ready.
Mr. BALLINGER. You are one?

Mr. JARBO. Yes.

Mr. BALLINGER. You have a competitor?

Mr. JARBO. Yes, sir.

Mr. BALLINGER. Is that a circuit theater?

Mr. JARBO. That is individual.

Mr. BALLINGER. An independent?

Mr. JARBO. Yes.

Mr. BALLINGER. Do you know whether your competitor has trouble in getting pictures?

Mr. JARBO. I do not know. I bid on 30 pictures at RKO, and I got 2. So I must not have a bid which is enough for it. I bid what I have been paying for these pictures. They average around 35 to 40 percent. If I had up to 50 and 60 percent, I am out of business before I start. Chairman PLOESER. You mean a percent of your gross?

Mr. JARBO. They will not take a percentage deal. You have to put a flat on it and a percentage. They will not take a flat deal unless you get it away up. They will not take a straight percentage according to the way they tell me. They will not take a straight percentage at all. We have had to put a guaranty on it, and that guaranty has to be high.

Mr. BALLINGER. That is all.

Chairman PLOESER. How many theaters were there in Cameron when you went into business there?

8301949-16

Mr. JARBO. There was only one other. There was a small theater. Chairman PLOESER. Besides yourself?

Mr. JARBO. Yes. At that time we bought films, a year's output at a time, 40 pictures of one company and 40 of another. In that way, we knew we were in business for a year. We had something to go on.

Mr. BALLINGER. At that time, were the major producers in Hollywood in the theater business, too?

Mr. JARBO. No.

Mr. BALLINGER. They started at that time?

Mr. JARBO. They started in the theater business.

Chairman PLOESER. What happened to this other theater?

Mr. JARBO. They finally bought him out.

Chairman PLOESER. Who bought him out?

Mr. JARBO. It was about a 200-seat house.
Chairman PLOESER. Who bought him out?
Mr. JARBO. I did.

Chairman PLOESER. You did.

Mr. JARBO. There were others there. They cannot make a go of it. There are not enough people in town to make it go.

Chairman PLOESER. How many people live in Cameron?
Mr. JARBO. There were 3,000. There are 3,500 now.

Chairman PLOESER. What is the surrounding area?

Mr. JARBO. The town grosses around 600 to 650.
Chairman PLOESER. Per week?

Mr. JARBO. Per week with the two theaters, and some will lose from $100 to $300 a week.

Chairman PLOESER. Anything further you want to say?

Mr. JARBO. I do not like for a local checker to come down and check me-somebody from a drug store or a filling station to come down and check my theater. That is what they do on percentage-based pictures.

Mr. BALLINGER. They get somebody in town to check you?

Mr. JARBO. To check it with a clock.

Mr. BALLINGER. With a what?

Mr. JARBO. With a stop clock.

Mr. BALLINGER. A ticker?

Mr. JARBO. Yes. Everyone that goes in is counted. I was using concealed numbers until about a month or two ago. Now everything has to go straight numbered, so the help or anybody else can know what we got that night. If we have a big night, the help wants more money. All they got to do is to get the first number, and they get it off the door.

Chairman PLOESER. Why can't you use concealed numbers?

Mr. JARBO. I could not use concealed numbers. I have to run them straight. You might as well print in the newspaper how much you take in each night, because they know it anyhow.

Chairman PLOESER. What was the reason for doing that?

Mr. JARBO. I do not know.

Chairman PLOESER. Who told you that, the Internal Revenue Bureau?

Mr. JARBO. Yes. They sent a man down there with a couple of my tickets and he asked me why there were not any numbers on them. The concealed numbers went to 10, from 1 to 10.

Chairman PLOESER. But you could tell?

Mr. JARBO. I could tell from the stubs underneath.

Chairman PLOESER. Only from the stubs?

Mr. JARBO. These tickets have to be printed by a ticket company and all numbers have got to go into the Government.

Chairman PLOESER. Anything further?

Mr. JARBO. That is all.

Chairman PLOESER. We thank you.

(Witness excused.)

STATEMENT OF L. P. LARSEN

Mr. BALLINGER. State your name.

Mr. LARSEN. L. P. Larsen, of Webb City, Mo., representing my three sons who run two theaters in Webb City. I am also vice president of the Allied Independent Theatre Companies that have Missouri and Kansas for their territory. We represent them here. It is a national organization which has about 6,000 theaters in this country. Of course, I sat here and listened to these boys. They are new at this. I have had 2 years of this experience in bidding and it is a vicious, vicious thing. These boys could not put it over because they do not quite understand it. When you have a theater business like in Webb City, been there for 17 years, enjoying a fair profit, that could take care of the town-the boys have been in the Army and now they find out somebody has built another theater there against them. It was all right; we will not talk about that. That is straight competition. But when a chain operator goes in there with only one purpose in mind, to break these boys, that is their story, it is not a bidding proposition. That is restraint of trade. If we got his box office returns we could show where every day he has run in 2 years, it shows he is paying more money, sometimes up to 90 percent, sometimes not so much, for films to break these boys. I do not think that is competition. I think that is restraint of trade.

Mr. BALLINGER. He is selling below cost?

Mr. LARSEN. Yes. That is what these boys are trying to tell you folks and all these chains can break you by bidding more money for the pictures than they gross from the picture. You cannot make money and you cannot operate without pictures.

Our theater is 28 days behind Joplin, where Fox is. They run six pictures a week and we run six pictures a week, but we cannot for love or money get one picture before Fox runs it. They are behind sometimes 6 months on their availability, but that does not make any difference to them. They will say, "No, you cannot have a picture until we run it."

Why should they have the power to let these pictures sit there and hold them because they all bought so many pictures.

Mr. BALLINGER. Will none of the major companies sell you in competition with Fox?

Mr. LARSEN. Not until after Fox run it. They got a 28-day clearance on me. Here is a letter I wrote to Mr. Sinnott.

Mr. BALLINGER. Is there a chain in your town?

Mr. LARSEN. The Dickinson circuit is in my town and the Fox in the other. We have not very much squawk on Fox. Here is what I sent to Mr. Sinnott in Washington through Mr. Clark, who informed

us to go to Mr. Sinnott and take this matter up with him, showing exactly what we used to pay for these pictures. When he bid for them against us we have been forced to go from $40 a picture to two or three hundred dollars a picture. This is, after all, only a small town and they cannot gross that much on a picture. This is not on the basis of a bid: this is a restraint of trade of Mr. Dickinson trying to break these boys. If we do not get the pictures we do not have anything to run and sometimes have to run some old junk on some of the days during the week to catch up because the next week we might have a little better luck. Here is exactly what Mr. Sinnott said. He said that this bidding is not in effect and they are only doing it voluntarily. They can do it on their own responsibility. They have gone into it to see what they can do.

Paramount not so long ago raised my price for a second B picture from $45 to $150. You could not gross $150 on that picture. If you do not pay it, what are you going to do-close your theater?

That is the only argument I make. We cannot sit by and see this restraint of trade, bidding so much money for a picture and we cannot go into the market and buy them.

Here is another letter from another company. According to a law up there in New York, when you ask to be submitted a bid the film company must state the minimum terms of what they want for that picture and give you a certain number of days according to section. so-and-so. No use to go into that. They come back with a letter: "We are not stating the minimum terms which we require on our product to either of the competitive bidders," on account of what the decree sets up in paragraph 8 of section 2.

If they are not living up to it, what good is the law? All they want is money. We are losing anywhere from $200 to $300 a week right now through this bidding ritualism. I say it is wrong. I say a firm, whether film company or legitimate theater company cannot pay more than 30 to 35 percent on the gross of your business. If you do you cannot operate.

Mr. BALLINGER. Do you know whether there is a shortage of films? Mr. LARSEN. Why, sure. They encourage everybody to go in and build theaters. They have been enoucouraged to build theaters. We have a letter from a poor boy up here in Butler who built a theater up there. He has not got a chance. All of these boys are going broke because you can operate only a certain number of theaters according to the capacity of the town.

Mr. BALLINGER. When the European market for films collapsed, did that not leave the films here?

Mr. LARSEN. That is a lot of baloney.

Mr. BALLINGER. Why is it the bunk?

Mr. LARSEN. Because they do not make half the pictures they used to make. They can take 20 to 25 pictures a year and soak you twice as much, where they used to make 50 to 60 pictures a year.

Mr. BALLINGER. Is it your feeling that the companies are acting together?

Mr. LARSEN. Sure they are.

Mr. BALLINGER. In the production of films?

Mr. LARSEN. They are limiting the production of films and raising the rent on pictures. There is no question about that.

Mr. BALLINGER. When did this shortage begin?

Mr. LARSEN. I should imagine about 2 years ago.

Mr. BALLINGER. Has the Department of Justice taken any steps in this matter?

Mr. LARSEN. I would not know, sir. I have called the Justice Department in reference to my case. It is like this theater in Webb City. Here is a man who made some money during the war. He used it to build a theater because Mr. Dickinson said it. Mr. Dickinson has $11,000 in that theater for equipment alone. We have one theater costing $150,000, another one costing $30,000 or $40,000. He has everything to gain, nothing to lose. He has offered us some ridiculous terms to sell so he can get this town.

Mr. BALLINGER. What do you think ought to be done?

Mr. LARSEN. I say that bidding is the most ridiculous thing that ever happened in this country.

Mr. BALLINGER. But what would you do?

Mr. LARSEN. I can only see one way. You cannot make three ace theaters in one town when they are not ace theaters to start with. Mr. BALLINGER. Who are you going to eliminate?

Mr. LARSEN. Let them make it first and second runs.

Mr. BALLINGER. At what price?

Mr. LARSEN. At different prices.

Mr. BALLINGER. Who is going to fix the prices?

Mr. LARSEN. Themselves.

Mr. BALLINGER. That would be competition, then, would it not? Mr. LARSEN. You mean on pictures?

Mr. BALLINGER. Yes.

Mr. LARSEN. No. I have done that for years. I would buy firstruns for the Civic Theater and we buy a second-run for the Junior. We pay maybe $150 for the first run in the Civic because it is a big picture and the first time shown. They can pay that for 15 or 20 days and then they can maybe pay $20 on second run and they would be better off, too.

Mr. BALLINGER. Who would get the first run?

Mr. LARSEN. Whoever is capable of running it.

Mr. BALLINGER. What do you mean by "capable"?

Mr. LARSEN. I mean by having a theater that is worthy of that standard.

Mr. BALLINGER. Suppose you had two houses?

Mr. LARSEN. I have two houses.

Mr. BALLINGER. Which one would run it first?

Mr. LARSON. The Civic Theater because it is a fine house.

Mr. LARSEN. Suppose there were two private houses and one was not Civic Theater. Whom would you supply the product to?

Mr. LARSEN. There are a lot of towns around here. I can mention one man in this place here at Maysville. They supply him the product. Mr. BALLINGER. Now, what do you mean?

Mr. LARSEN. One takes RKO, one takes Metro, one Fox, one Paramount. They have so many products apiece and they are happy about it.

Mr. BALLINGER. You could get rid of this competitive bidding, but if the situation is as you describe it, they could go on refusing to give you films, couldn't they?

Mr. LARSEN. They have done that for years.