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condition to purchasing any one commodity from the seller shall be considered to give the seller control over the organization of the purchaser.

(d) FULL LINE DISCOUNTS.-Wherever the discount on one commodity is made dependent upon the total volume of purchases in two or more different commodities, then the seller shall be considered to control the organization of the purchaser.

LIMITATION OF IMPORTS

SEC. 12. Commodities which are produced in foreign countries under conditions which would be illegal under this Act in the United States shall be barred from entry into the United States and shall be contraband and subject to seizure and destruction by the Government of the United States after any illegal entry into this country.

VIOLATION BY FOREIGN RESIDENTS

SEC. 13. If any person residing outside the jurisdiction of the United States shall violate this Act through the control of properties within the United States, then such person shall be fined in absentia, and the properties controlled by him in the United States shall be seized and sold to satisfy the payment of such fines. Any person who shall suffer injury by acts of a resident of a foreign country in violation of this Act may sue the violator in absentia in any district court of the United States in the district where the properties involved in the violation are found, and shall receive damages as provided in section 7 of this Act, and may seize any of the properties or organizations involved in the violation to the extent required for satisfaction of such damage.

APPLICATION TO UNIONS

SEC. 14. For the reasons that union organizations have employees as well as individual members, and that the unions render specified services to the individual members for which the union receives a consideration in the form of dues, therefore, unions shall be considered as business organizations, and the persons who control any union or unions shall be subject to the provisions of this Act in the same manner and to the same extent as the persons who control any other business organization.

For the purposes of determining the number of points of delivery of any union, any office at which the union collects dues from its members, and any office of others at which dues are collected from members for the account of the union, and any office from which the union renders services to its members shall be considered as a point of delivery.

EXEMPTION FOR UNIONS OF PUBLIC UTILITY EMPLOYEES

SEC. 15. For the same reason that public utility organizations are exempt from the provisions of this Act, so also, the persons who control unions of public utility employees shall be exempt from the provisions of this Act in the same manner and to the same extent as persons who control public utility organizations: Provided only, That to enjoy such exemption the union shall submit to and abide by the rulings of the same commissions which have jurisdiction and control over the public utility organizations.

TRANSITION PERIOD

SEO. 16. The provisions of this Act shall become effective immediately upon enactment into law. However, no actions for penalties or damages may be started as a result of violations of this Act occurring within two years after enactment of this Act, unless it shall be shown as a premise to such action that the person against whom the action is started did unnecessarily, deliberately and unreasonably delay in making the adjustments required to avoid such violation.

ORGANIZATIONS OPERATING UNDER FEDERAL FRANCHISE

SEC. 17. When the interests of the people of the United States shall require the existence of any organization to control and carry on operations which would be illegal under any of the provisions of the preceding sections of this Act, then Congress may grant a franchise to such organization by a special act of Congress for each such franchise, and such franchise shall qualify such organization as a

public utility organization and shall thereby entitle the persons who control the organization and the employees of the organization to the exemptions provided under sections 4 and 15 of this Act.

ENFORCEMENT

SEC. 18. The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this Act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such a violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition, the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or probition as shall be deemed just in the premises.

SUBPENAS

SEC. 19. Whenever it shall appear to the court before which any proceeding under section 18 of this Act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpenas to that end may be served in any district by the marshal thereof.

Mr. STEVENSON. In connection with Mayor Zeidler's testimony, I have a statement of Mrs. Dorothy Heller, 2972 North 46th Street, Milwaukee, Wis., addressed to the House of Representatives' Small Business Committee, which will be incorporated at this point in the record.

The statement referred to follows:

SMALL BUSINESS COMMITTEE,

The House of Representatives.

SEPTEMBER 23, 1948.

HONORABLE SIRS: I am appearing before this committee as a member of the city of Milwaukee's Cost of Living Committee, representing the interests of the consumer.

Our national economy is an interdependent unit and any program of agriculture, labor, and business, designed to shape and direct the future of our economic welfare is of vital concern to the consumer.

In your consideration and study of the problems confronting small business, will you please guide your deliberations by the thought, that to maintain a free, healthy system of enterprise, and to continue a healthy and sound democracy, we are dependent upon the continued existence of small business.

We maintain that it is the right of every businessman, both large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies.

Respectfully submitted.

DOROTHY HELLER.

Mr. FORISTEL. May I say to Mr. Raymond that if you have any further material, we are having a hearing at South Bend, and if desire to appear you are welcome to do so.

Mr. RAYMOND. I thank you.

STATEMENT OF SIGMUND J. GOLDBERG

Mr. FORISTEL. Identify yourself for the record.
Mr. GOLDBERG. Sigmund J. Goldberg, Warsaw, Wis.

Mr. FORISTEL. What is your affiliation?

you

Mr. GOLDBERG. My affiliation is vice president of the Independent. Theater Owners of Wisconsin and Upper Michigan.

Mr. FORISTEL. You may proceed.

Mr. GOLDBERG. We are here as representatives of the independent theater owners of Wisconsin. We are also members of the Allied State Association of Motion Picture Exhibitors, which, as you know, is a federation of 20 regional associations of independent motion-picture theater owners.

The principal competitive problem of the motion-picture industry, as we see it, grows out of the domination of that industry by the eight major producers and distributors of motion-picture films. These specific practices which we know have been enumerated to you as you traveled around the country

Mr. STEVENSON. What are the names of the producers of the films, these eight producers?

Mr. GOLDBERG. The eight major producers are Paramount, Fox, Loew's, Columbia, Universal, United Artists, RKO, and Warner Bros. These specific cases will be brought to you later.

I would like to give some opening remarks on some of the things that we thing are wrong and that we think might be done to alleviate the situation.

Most of these things were set forth in the United States District Court for the Southern District of New York in the Paramount Picture case, which I am sure you are familiar with.

There is a problem of discrimination by the producers and distributors in the amount of film rentals charged in the different classes of theaters. Specifically, we know many independent exhibitors are informed and believe that the producer distributors charged the independent theaters proportionately higher film rentals than they charge their own theaters, and the theaters of very large circuit operators.

In this respect, I would like to read from an arbitration decision on my own theater. The arbitration was originally instituted against a major film company before I took over the theater. I appealed the arbitration and received a decision. In this decision, some interesting things came out about prices which I would like to read here.

First, I would like to state to the committee that I own one theater in this town. Three theaters are owned by an affiliated organization of Fox, or, rather, they are operated by the Fox organization. I would like to quote the following:

In the case, however, of Warner Bros. Pictures Distributing Corp., comparison can be made. Of the 11 pictures in the 1943-44 season which played second run in a Fox circuit house and third in the Hollywood, 9 brought the same rental for each run and the other 2 averaged $22.83 higher for the third run than second.

Mr. FORISTEL. Let me say that third run is a showing after second run. It does not have anything to do with the type of picture.

Mr. GOLDBERG. That is right. It is the third theater in town to show the picture.

Mr. FORISTEL. In some cases, the third-run theater paid more money than the second-run theater?

Mr. GOLDBERG. Yes; that is right.

Mr. FORISTEL. The second run was at a company-controlled house? Mr. GOLDBERG. Yes.

We find also we have trouble with what we call clearance in that we are held back by the producer owned or controlled theater so that we must play our pictures behind them at their discretion.

In my particular situation, there is another statement in this particular appeal which I would like to read on the subject of clearance, as follows:

While we agree with the arbitrator that there seems to be little or no justification for granting the Midway a run ahead of the Hollywood, nevertheless Fox has the right under the decree to do so if it wishes.

They go in here later to say that they have decided to give Midway over Hollywood on all Fox pictures, whether played first, second, or third run, a 7-day protection. In other words, the Hollywood must play 7 days behind the Midway Theater, and even they see no reason for it, as stated earlier in the decision.

Mr. FORISTEL. May I ask another question.

Which of the theaters is better by camparison, the Hollywood or Midway?

Which has the most seats? Which is the newest theater?

Mr. GOLDBERG. The newest theater is the Hollywood Theater. The Hollywood Theater has more seats, close to 200 more seats than the Midway Theater.

Mr. FORISTEL. When were the two theaters built in point of time? Mr. GOLDBERG. It is all stated in here. The Midway Theater is the latest theater in the city of Warsaw and the Hollywood Theater is the next theater. The Hollywood Theater was built, I believe, in 1942. Mr. FORISTEL. The other later than that?

Mr. GOLDBERG. Yes, however, the other theater was remodeled since the building of the Hollywood Theater. The Hollywood Theater is the newest theater. I believe that is enough about clearance and prices for the present.

I would also like to bring out the fact that the independent exhibitors feel that the ASCAP is a giant copyright pool which arbitrarily endeavors to license the public performance of its music on only its own terms. Namely, they have been licensing by blanket license. They have been charging the theaters so much per seat per year in order to run the pictures or to play the music in the pictures that we buy. In brief, they have been selling the production rights not only to the film companies but to the theaters. Before we can exhibit the picture, even after buying it from the film company, we have to pay them before we can play the music in the picture.

Mr. FORISTEL. Do you lay any blame on the producer of the picture for this condition?

Mr. GOLDBERG. We do, because some of the money goes back to them in that some of the companies are large owners of sheet music companies throughout the country and in that way some of the money goes back to them. We feel it is only a further part of the pooling arrangement which has caused so much trouble in our industry for so many years.

We had a decision recently handed down by Judge Nordby in Minneapolis, ruling that ASCAP was not doing business properly and granting one of our independent exhibitors a victory over ASCAP. In his decision, the judge said it was not necessary for him to pay; that individual owners of music could not band together and could not sue a theater for not paying on an arrangement of this type.

There was also a decision of a judge in New York that also said they were doing business in violation of the Sherman antitrust law.

We tried to put through the Lewis bill in Congress in the last session, but the Lewis bill never got to the floor.

The Lewis bill stated it would be necessary for the composers to sell their music for production and exhibition at the same time, so that when we bought a picture we bought the right to show it. We would not thereby have to go ahead and buy the right to play the music or else we could not play the picture.

Mr. STEVENSON. At so much a seat.

Mr. GOLDBERG. That is right. That is the way it has been done. Enough about ASCAP.

We also feel that a remedy for most of the unfair and monopolistic practices foisted upon the independent exhibitor may be provided by the final decree in the Paramount case; however, that case has been pending for 10 years. Mr. Chairman, that is one thing we want to stress. It is almost 11 years now. The Government filed a suit against Paramount and the film companies for relief, saying they were violating the Sherman antitrust laws. It has taken 10 years to bring that case to a conclusion. There is no end to the case yet. How long it is going to take we do not know. It is this continued delay, delay after delay, for various reasons, and the film industry has received no relief because of that.

Mr. FORISTEL. Would you suggest that a special court be set up? Mr. GOLDBERG. Yes. We have felt that if a special antitrust court were set up to handle antitrust cases, not only in our industry but in other things as we heard today, that should stop some of this delay. This court would also be better informed on antitrust things, and, therefore, could handle those things in a better fashion, we feel.

We know that the defendants in our case are again seeking delay. They are trying to delay this case further. The Supreme Court remanded the case to the circuit court for further proceedings, after citing them definitely for what they called a conspiracy and all the other things in violation of the antitrust law. They then sent the case back to the circuit court for further action.

Mr. FORISTEL. And more delaying.

Mr. GOLDBERG. Yes. We know that also means more delay. The case was to be heard in the spring. One of the judges died and now the case has been postponed until in the fall. It is supposed to come up again in October. We do not know what will happen then. There has been delay after delay for nearly 11 years. We feel a little exhibitor cannot withstand that delay. As you say, we feel there should be the creation of a special antitrust court with especially qualified judges for that particular work.

In this connection, I would like to remind the committee of section 5 of the Clayton Act providing that final orders in Government suits in private actions under the antitrust laws. That is an integral and important phase of the law-enforcement machinery. No doubt delay in the other decision in the Government suit renders section 5 impotent, and we feel that small-business men who have been despoiled by great corporations find it hard to wait for these decisions to come. down to finality. They must rely on the Government to come along and produce all of this evidence and they are thus deprived of the remedy which Congress said they should have.

To them, justice diverted is justice denied.

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