Mr. BALLINGER. What is the reason you cannot get first-run pictures? Mr. GOLDER. Well, I have contacted the film companies, and they tell me they have a satisfactory account in the Fox theaters, yet we have two or three instances where we have been granted outstanding firstrun pictures, and I am positive we have outgrossed the theaters down the street, but the Salt Lake branch managers of the various film companies tell me their hands are tied, there is nothing that they can do about it; that they have told their district managers and they have advised nothing. They think it would be more appropriate to sell their pictures to us, but so far nothing has come of that. We have requested the opportunity to bid on the pictures, and with the exception of Loew's-Metro-Goldwyn-Mayer, no company has offered to let us bid on the pictures.

Mr. BALLINGER. No company except which one?

Mr. GOLDER. Loew's, Inc., is the only one which has offered us any of their pictures on bid, and that was at a time they had a slump here around the first of the year in their outlet and having a little trouble with Fox. I am of the opinion that was more a gesture than anything else, because the very next day I got a letter from them offering to put their pictures up for bid, and I received a phone call from the local manager of the theater in Great Falls. He said he wanted to talk to me. I went down to see him. He asked me what I wanted in the way of pictures. I told him we had done very well in the past on second and third runs, but they we were getting to the point where we were having trouble making money on the pictures we had. So he advised me he would attempt to work something out for us, but nothing has ever come from that either.

Mr. BALLINGER. What is the difference between a first- and secondrun picture?

Mr. GOLDER. A first-run picture is the first showing of a picture in the community, and the second run, of course, is the second showing. Mr. BALLINGER. It comes back to the community again?

Mr. GOLDER. Yes; that is right.

There are a lot of pictures-I will not say in percentage, but a high percentage of pictures that are late in playing our community, sometimes as much as 6 months, and sometimes as much as a year. I can name at least one picture, one or two pictures, that are over a year old that have not played our community yet.

Yet I have attempted to get contracts on these pictures, and am unable to do so.

Mr. BALLINGER. Do you charge the same price as your competitor? Mr. GOLDER. Yes; our prices are approximately the same on second run as our competitor. However, our prices are not the same as the first run, yet our theater is the largest in the community and is as nice, if not nicer, than any in the community. This is a Civic Center Building, a building which cost the city of Great Falls in the neighborhood of $865,000 to build when it was originally built. It was completed in 1940. They could not build it for that today. The auditorium is one of the finest in the State. The acoustics are very good. We have the best equipment in the State. We have as good as any equipment in the State, if not the best, in our theater.

Mr. BALLINGER. Is the attendance at your theater greater than the attendance of your competitors? Do you have more customers?

Mr. GOLDER. That I have no way of determining. I cannot check into that, but I think our attendance is very nearly as good as the first-run theater. We do have second runs. Our children's attendance is greater-I know that.

Mr. BALLINGER. You have no idea as to why they will not sell you? Mr. GOLDER. No.

Mr. BALLINGER. Do you have any suspicions?

Mr. GOLDER. The answer I get from the branch manager at Salt Lake is that their hands are tied, the deals are made in Denver, and they do not have anything to do with the deals. The company representatives, which I imagine are the district managers in this case, sold the films to the Fox buyer at Denver and the Salt Lake managers have nothing to do with the deals.

Mr. PATMAN. Any questions?

Mr. GOLDER. This is some testimony from a case that came up in Great Falls. There was an injunction filed against us the day we opened up there, which was 7 years ago, restraining the city from leasing the civic center as a motion-picture theater.

Mr. PATMAN. Who brought the suit?

Mr. GOLDER. It was an individual by the name of Charles Cardwell. Of course, this individual, at the time the case came up in court, was no longer a resident of Great Falls and was brought in to testify from Spokane.

Mr. PATMAN. Was he connected with any of the motion-picture producing companies?

Mr. GOLDER. That is one of the things that you cannot prove for sure if he was.

Mr. PATMAN. Did the attorneys ask him that question?

Mr. GOLDER. Yes. He said he had no connection with them.
Mr. BALLINGER. Why did he want to restrain your opening?

Mr. GOLDER. He contended that the theater was not built for private enterprise. That case was defeated in Great Falls and it was appealed to the Supreme Court of the State of Montana and a decision rendered in favor of the city of Great Falls in the case. This testimony is from a competitive theater manager.

Mr. PATMAN. Suppose you leave it for the file, not the record.

Mr. GOLDER. Also, have here a deposition taken from Mr. Rikerds of the Park Butte Theater in Butte, Mont., taken in 1945. This pertains to the method of mining pictures, which includes Great Falls. Mr. PATMAN. We will file it.

Mr. BALLINGER. Does this throw any light on your case?

Mr. GOLDER. Only it tells how pictures are sold in Denver, how they purchase pictures in Denver, and that includes Great Falls and part of Helena.

Mr. BALLINGER. Who purchases the pictures at Denver?

Mr. GOLDER. The purchasing agent for the Fox Theatres.

Mr. BALLINGER. Did you try to buy there too?

Mr. GOLDER. No; I have been told Salt Lake is our headquarters. Their salesman from the Salt Lake branch calls on us in Great Falls to sell us pictures.

I have not made an effort to buy in Denver. I am told we are in the Salt Lake area, yet buy their pictures in Denver.

Mr. BALLINGER. Have you talked to the film companies that are producing the pictures?

Mr. GOLDER. Yes.

Mr. BALLINGER. Have you asked them for first runs?

Mr. GOLDER. Yes. I have a case full of letters I have written requesting the opportunity to buy their pictures first run, or to bid on the pictures and asking them what pictures are available.

Mr. BALLINGER. Your competitor is owned by the Fox Film Corp.? Mr. GOLDER. Yes.

Mr. BALLINGER. Let me ask you this: Do you have any opinion as to whether a motion-picture producer should also be a theater owner? That issue has been raised by the Supreme Court.

Mr. GOLDER. Yes.

No; I do not feel that they should be allowed to own their own theaters as long as they can exercise that kind of buying power.

They own, I think, for in the neighborhood of 500 theaters. They buy in the neighborhood of 500 theaters. It has that business, that volume of business, and they are able to give the film companies, the rival film companies, as well as their own, this business.

That gives them a buying power.

The independent owners outnumber the chain theater operators, but not in the key cities, and by the key cities we mean the large areas. In this State the theater owners all have the smaller towns and most of them are noncompetitive, but the key cities in Montana, with the exception of Great Falls and Missoula, are entirely controlled by the Fox Theatres.

Mr. BALLINGER. Do you think that situation tends toward monopolistic prices in paying for your movies, and so forth?

Mr. GOLDER. Yes; I am sure it does.

I recently made a survey of the prices in the State, and find that Fox Theaters are the highest, their admission prices are the highest in the State.

Mr. BALLINGER. In places where they control all of the theaters? Mr. GOLDER. Yes.

Also, they keep out free enterprise. It is a detriment to the State to have chain theaters operate in the State. I have worked for Fox Theaters and I pretty much know how they operate.

On each Saturday night they write out a check for the difference between what they took in for the week and what they paid out, and that money immediately leaves the State.

Of course, in the case of a bad week, which would be a week of 20or 30-below-zero weather, there would be a check coming in the reverse direction to pay for the loss for the week.

But that is very rare, as I recall.

I managed the American Theater in this city; I have been assistant manager of a theater in Missoula previous to owning my own business, and have worked for the Simon Amusement Co. in this city, which is an independent chain. It is an independent locally owned chain. I also worked in Colorado for the Fox Theaters.

Mr. BALLINGER. Have you run up against block booking?

Mr. GOLDER. No; we do not have that particular trouble with block booking.

They now sell their pictures in groups of three or four-that is, the major companies do.

The smaller companies sell their pictures in blocks, a full year's block at a time.

Mr. BALLINGER. The smaller companies do?

Mr. GOLDER. Yes.

Mr. BALLINGER. Such as?

Mr. GOLDER. Republic, Columbia

Mr. BALLINGER. Is that not block booking?

Mr. GOLDER. Yes; block booking.

Mr. BALLINGER. When they sell to you a year in advance?
Mr. GOLDER. Yes.

Mr. BALLINGER. The larger ones sell you four pictures at a time?
Mr. GOLDER. Yes; not over five at a time.

Mr. BALLINGER. You cannot buy one picture?

Mr. GOLDER. You can, but they give you an argument.

Mr. BALLINGER. You have to take the other four with it?

Mr. GOLDER. They will let you eliminate one out of a block, or perhaps two, but I have found it troublesome to try to eliminate more than two pictures out of a block.

Mr. BALLINGER. No further questions.

Mr. PATMAN. We thank you very kindly. We will keep these documents for the record, and if Mr. Ballinger wants to put some of it in the record he may do so.

STATEMENT OF JOHN J. JEWELL ON BEHALF OF THE MONTANA AUTOMOBILE DEALERS ASSOCIATION

Mr. BALLINGER. State your name.

Mr. JEWELL. John J. Jewell.

Mr. BALLINGER. Your business.

Mr. JEWELL. Secretary-treasurer of the Montana Automobile Dealers Association. I act as counsel with the association with an agreement I am not to handle contested litigation.

Mr. BALLINGER. Do you have a statement you wish to make?
Mr. JEWELL. Yes, sir.

Mr. BALLINGER. Go ahead.

Mr. JEWELL. Mr. Chairman, I want to thank you, first, for the final legislation that you gave us in the old Murray-Patman Act in 1942. Mr. PATMAN. Mr. Murray and I worked very hard on that. We are proud of it.

Mr. JEWELL. It was a wonderful assistance to the dealers.

Mr. PATMAN. We are entitled to the credit only insofar as we were chairmen of the committees involved.

The bill was sponsored by the two respective committees of the House and Senate.

Mr. JEWELL. It resulted in the saving of many dealers in the State of Montana.

In making this statement I would like to tell the committee how I operate as the head of this association. Once every year I meet every automobile dealer in his place of business throughout the State. Mr. PATMAN. How many do you have?

Mr. JEWELL. Three hundred and fifty members in the association; 575 in the State, including exclusive truck dealers like International, Reo, FWD, and so forth. These statements are given to me by dealers knowing that they are privileged, I being an attorney for them and acting in that capacity.

I can say freely I have been relieved from the restriction of a privileged communication in two cases, one in Bozeman and one here in Butte.

I find as I travel over the State that undue pressure-it is not only undue pressure, it is coercion-is exercised upon the dealers by what I call boy scouts, the company representatives. They come into a place of business and if they just get out of bed on the wrong side that morning, they say, "dirtiest place I ever saw." That is the beginning. From then on they go through the service department; they go through the parts department, they go through the lubrication department, they go through the financial statements which they have no necessity for going through because they are sent to the factory once every 30 days. If they are not received at the factory in a certain time, the factory immediately threatens to reduce the allotment of cars to that particular agent or dealer.

They come in and they sell advertising. In fact, on my last trip into northwestern Montana I met one dealer and asked him what that was. He said, "That is $150 worth of advertising." He sells on an average of about six cars a year and probably three or four trucks. I said, "What are you going to do with it"?

"Well," he says, "When the factory representative comes through and sees it and knows I got it and I paid for it, I will throw it back there. It is of no value to me at all."

You heard the testimony this morning concerning pipes and the distribution of pipes. That is no news to you people. In documents 468, filed with you in the Seventy-sixth Congress, all of those things were mentioned.

The thing that we are facing today, probably that is more serious than any other matter, is the compelling of dealers under the threat of losing their franchise to build a new building. In fact, we have a case right in this city, a case in which I have been released. I refer to the Parker Morelli Co., who have handled the Packard cars for years. The boy scouts came in here and said, “You must build a certain kind of building." Mr. Parker made the statement that the building they recommended will cost more than is necessary and it will create an overhead that we cannot retire by the sale of Packard cars. The boy scout says, "That is your problem and we do not give a damn about that." That is one of them.

I will tell you of another one at Bozeman. Knapp has represented the DeSoto for 17 years. He built a building that cost $45,000 with the knowledge, approval and acquiescence of the boy scout. Because of the fact they wanted to give that dealership to someone else, they came in and asked him to extend that building for 50 feet, which would cost between $35,000 and $45,000. His franchise has been canceled out because he refuses to put that much more into his overhead.

This is the story that comes to me from every dealer almost throughout the State. A few weeks ago a rumor was spread in this country that Buick was going to change their method of doing business. There is not one single Buick dealer in Montana who knows whether he is going to be a Buick dealer on the first day of November, after the franchises have been issued for new dealers.

Mr. BALLINGER. How long are these franchises for?