We also would like to remind you about the Robinson-Patman Act, which applies only to price discrimination in sales in interstate commerce. We believe that should be amended. Mr. FORISTEL. It would hardly be constitutional if that were the It has to pertain to matters in interstate commerce before the Federal Government has any jurisdiction over it. case. Mr. STEVENSON. That is right. Mr. GOLDBERG. We feel that that should include discrimination in rentals and royalties under leases and licenses, especially the licensing and leasing of copyrighted and patented articles. That would enable the independent exhibitor and others suffering from like discriminations to maintain an action for relief without having to prove that they first violated the Sherman antitrust law. At the present time they have to prove first that they violated the antitrust law. I think that might be a possibility. A few years ago we might have said that the antitrust laws needed strengthening. However, the recent decision of the Supreme Court has added considerable vitality to those laws, as is evidenced by several decisions which have come down lately. We feel that the motion-picture industry is an example of extreme vertical integration and we would like to see this vertical integration done away with all down the line because we feel that is what the crux of the whole thing is. That is where this extreme monopoly comes from. By "vertical integration," I mean the integration of production, distribution, and exhibition in our industry. The film companies own theaters, they make the pictures, they distribute the pictures, and we are completely dependent upon the film companies for our living and we are in competition with them in the exhibition of pictures. Mr. STEVENSON. You are worse off than these independent tire fellows and the gasoline dealers; are you not? Mr. GOLDBERG. I heard some of them and they are bad off themselves, it looks like, too. It is truth self-evident. We have said that an independent trader, whether he be a retailer or exhibitor, cannot successfully compete at the retail level with these people upon whom he is dependent for his necessary supplies, except by suffrance. In the Paramount case, the Department of Justice argued that vertical integration of producing and exhibiting motion pictures is illegal, but, said Justice Douglas, the majority of the Court does not take that view. He pointed out that in the opinion of the majority, the legality of vertical integration under the Sherman Act turns on (1) the purpose or intent with which it was conceived; (2) the power it creates and the attendant purpose or intent. Thus, the legality of such integration depends upon uncertain factors which in many cases are difficult to prove, as you can readily see. One might suppose that monopolists, like all others, are presumed to intend the reasonable and probable consequences of their acts. Certainly, this feature of the antitrust law calls for careful study and for amendments which will make direct application to this type of combination more definite and certain. In short, Mr. Chairman, the things that we are mainly interested in as far as the theater owners of Wisconsin are concerned, are these: We would like to see some form of divorcement, some form of taking up this vertical integration, as we call it. We would also like to see a special antitrust court which will handle nothing but antitrust cases, and thereby they will be able to get away from all this stalling and this extreme delay in time. Mr. STEVENSON. We thank you. (Witness excused.) STATEMENT OF F. J. McWILLIAMS Mr. FORISTEL. State your name for the record. Mr. FORISTEL. Where do you live? Mr. McWILLIAMS. Madison, Wis. I operate two theaters in Portage, Wis. I started in the theater business in the days when the admission was a nickel, some 42 years ago, and I have been in it continuously since then. I have been active in independent theater organization work for some 30 years. I have watched the growth of monopolies from the time they were used to buy our pictures at so much a week. I recall in the beginning, it was in the city of Madison where I started, I paid $50 a week for three rolls of picture films, and our admission was a nickel. I have watched the growth of monopoly from that time on until today. I have been active fighting monopoly, fighting for the cause of the independents, and always have looked like a hopeless thought-hopeless, hopeless, hopeless-because of the interminable delays in the courts. The Paramount case, as Mr. Goldberg stated, was started 10 years. It is still hanging fire on account of the high-powered attorneys who are employed by the producers. Heaven only knows how much longer they will be able to keep it going; I do not know. I would like to recommend to the committee that they recommend in turn to the Congress that the Congress can do more good for their constituents if they bring into existence a special court to handle antitrust cases. I cannot stress that too much. Congress can do more good for their constituents if they bring that about. One other point: If they will bring about the question of the vertical trusts and eliminate them in our industry, if they would eliminate the vertical, they will do more good for their constituents than anything else they can do. Mr. Chairman, that covers everything I wish to say at this time. (Witness excused.) STATEMENT OF HAROLD PEARSON Mr. FORISTEL. State your name for the record. Mr. PEARSON. Harold Pearson. Mr. FORISTEL. What is your business? Mr. PEARSON. I am field representative for the Independent Theaters. I live at 1027 West Wells, Milwaukee, Wis. I am field representative, as I stated, for the Independent Theater Owners' Association, calling on all of the small independents in the State. I want to verify what Mr. Goldberg and Mr. McWilliams have said. Those are absolutely the sentiments of the small exhibitor in the field. I have here four letters that the exhibitors have written to me to present to your committee. Mr. FORISTEL. Have they authorized you to use their names? Mr. PEARSON. They are addressed to your committee. This one is addressed to me personally. I do not know if you want personal letters. Mr. FORISTEL. Yes. Mr. PEARSON. I will present all of them. Mr. STEVENSON. They will be made a part of the record at this point. Mr. PEARSON. These letters are as follows: HOUSE SMALL BUSINESS COMMITTEE, BESSEMER THEATER, Bessemer, Mich, September 21, 1948. In session at Madison, Wis.: Here following we list practices and policies of the film distributors in this exchange center against the Bessemer Theater, formerly known as the Rex Theater, now and before, under same ownership and management. The arbitration board, after complaint by us and hearing on same, gave decision that all picture contracts should embody the clause, 30 days after first run, Ironwood, or 60 days after last day of first run, Milwaukee, whichever occurs first. This clause, the exchanges alter or refuse to insert and when they do insert same, ignore its requirements. Exchanges refuse to sell us pictures until after sale is made in Ironwood, Mich., a city 7 miles from Bessemer, Mich. Sales are then made after considerable delay and a protection given to Ironwood of 30 days, in spite of this 30-day clause, booking of pictures are delayed from 60 to 150 days, in many cases longer. Salesmen representing these exchanges have refused to sell part of the product. When and if the Ironwood Theater delays book or playing of product from distributors, no availability is given to us, regardless of how long such delay may be. At times pictures on which confirmation of booking has been given us have been pulled because Ironwood canceled their booking on the picture. We have gone through the ordeal of having under contract dozens of suitable Sunday quality pictures for which we submitted dates for bookings, yet exchanges refused to book and kept from us bookings on these, so that as late as Friday and Saturday we did not know what our Sunday picture would be. On the above we are willing to appear and under oath repeat in more detail the above-listed practices which, in our estimation, are restraint-of-trade practices, due to monopoly of picture supply. Respectfully yours, D. J. KULASZEWICZ, Bessemer Theater. AL. RINGLING THEATER, Baraboo, Wis., September 18, 1948. INDEPENDENT THEATER OWNERS OF WISCONSIN, Milwaukee, Wis. GENTLEMEN: Your bulletins inviting antimonopoly complaints, etc., in connection with congressional hearing at Madison, September 23. Wondering why National Screen Service trailer and accessory situation seemingly hasn't been getting any strenuous attention. For years there has been absolutely no source (other than National Screen Service) of supply of the regular standard production talking trailers any place in the world with exceptions of Metro and Warner, who rent and serve their own. And, as known these many years, when we are forced to pay Metro and Warner for trailers on their releases we also pay National Screen Service for service not served as result of National Screen Service flat weekly contract requirements-the flat weekly basis being our only alternative other than much more oppressive terms on per trailer basis. Too, years of much, very much, poor servxice have been suffered at the hands of high-priced National Screen Service. Far, far, too many National Screen Service trailers fail to reach us for the necessary 7 days' advance use, but we remain helpless. This is in direct contrast to the constant, thoroughly dependable service enjoyed with Metro and Warner. COSTS, A1. RINGLING THEATER (USUALLY 3 CHANGES PER WEEK, THOUGH AT TIME ONLY 2) Black and Colored Metro, per trailer. $1.50 $2.25 Warner, per trailer. National Screen Service average per trailer year June 1947 to June 1, 1948 1. COSTS, JULIAR THEATER (1 CHANGE PER WEEK, AS A RULE) 1 National Screen Service insisted upon increase from $10 to $11 per week on annual contract effective Sept. 12, 1948, plus $1 additional for each colored trailer. Above figures tell but part of the story regarding National Screen Service's price controls. Resultant losses to us are obvious, but assuredly the above figures fail very miserably to reveal our certain substantial losses resulting from absence of advertising on our screen every time trailer fails to arrive for full 7-day use though we pay for full 7 days regardless. Fear we never will live long enough to get over hoping that sometime, somehow, regulation standard talking trailers will again be rented and served direct by distributors to exhibitors as all distributors did previous to the advent of National Screen Service and as Metro and Warner still do. Incidentally, exactly the same applies to accessories, service on which is not comparable to what it was when distributors served their exhibitor customers directly sans any National Screen Service as an inserted middleman. If we aren't dealing with a monopoly in the above, will someone please point out one single alternative source of supply of service in question? Yours very truly, AL. RINGLING THEATER, P. S.-Refraining from going into length on any other issues of oppression, with all of which you are undoubtedly more familiar than we. 1948 CONVENTION, OCTOBER 14-15 OF INDEPENDENT THEATER OWNERS OF WISCONSIN AND UPPER MICHIGAN, SEPTEMBER 22, 1948 In all the years of its existence, the Ritz Theater, 3610 west Villard Avenue, Milwaukee, has never followed the Egyptian Theater. The theaters are separated by 21⁄2 miles. Now, Metro (M.-G.-M. Film Co.) sees fit, by arbitrary decision on its own part without consulting the Ritz management, to force the Ritz Theater to play their pictures 7 days behind the Egyptian Theater. The Ritz is an independently owned theater. The Egyptian is a Warner Theater. No other company is following this practice. They both play everything day and date. Mr. HAROLD PEARSON, FALLS THEATER, Sheboygan Falls, Wis., September 16, 1948. Warner Bros.' Independent Theater Owners Association, Milwaukee, Wis. DEAR MR. PEARSON: Thank you for your letter of September 9. three first-run houses in Sheboygan-The Sheboygan, Rex, and Wisconsinhold a 45-day clearance over the Falls Theater on all product, with the excep tion of Para, which is 35 days after first run. What do I think is a fair clearance? My answer to that is none due to the fact that we are located in a distinctly separate town 6 miles away from them and are not in substantial competition. They, however, have the power to draw considerably from Sheboygan Falls, but we have none to draw from Sheboygan. However, I know that no clearance would be out of the question with the distributors so have to settle for whatever they are willing to give me which is what I now have. If we had a clearance of 14 days after first run I believe I could do business at a fair profit at present film costs or more if the increase in business warranted it. With a clearance of 14 days I would probably be able to play approximately 28 days after first run on the average. In addition to wanting an excessive clearance protection, Warner's policy is based on getting all of the business as far as pocketbooks are concerned. That is, a low matinee admission of 44 cents including tax for adults. Evenings they have a juvenile or student rate of 44 cents including tax; and children under 12, 14 cents including tax all times. Before introducing the student prices a good portion of that business went to the subsequent runs, but they took that away too. Family business is held with the 14-cent admission for children under 12. What chance has a small exhibitor got against these practices? I certainly appreciate the fact that you have taken an interest in this situation by writing to me and if you are able to help in any way to improve our lot I will be forever grateful. Very truly yours, P. S. Sorry I can't make the convention. I can't afford it. GERALD BURSELL. Mr. FORISTEL. Do you want to elaborate upon the practices that have been mentioned? Mr. PEARSON. There is not much more to elaborate on unless you have some questions. Mr. FORISTEL. When I spoke to you a little while ago, we were talking about this advertising agency which is a monopoly. I would like to hear something about that for the record. Mr. PEARSON. At the present time they have a monopoly on the previews. Mr. FORISTEL. Whom do you mean? Mr. PEARSON. The National Screen Service. There are only two companies that now make their own trailers. The rest of them they have the monopoly on Mr. FORISTEL. By "trailers," what do you mean? Mr. PEARSON. Previews of the coming attractions. They are now asking an increase in their service charge of 15 percent, but there would be nothing to stop them from asking for an increase of 50 or 60 percent and you either have to pay it or not have any trailers at all, or nothing to introduce your next attraction. Mr. FORISTEL. The National Screen Service must depend upon producers to receive the film? Mr. PEARSON. That is right. Mr. FORISTEL. They are the only outfit in the field receiving films on coming attractions? Mr. PEARSON. From the producers. Mr. FORISTEL. So the producers are making them a monopoly in that field? Mr. PEARSON. That is right. There is a complete explanation of it in the records here for your information. Mr. FORISTEL. We thank you. (Witness excused.) STATEMENT OF P. K. LAYMAN Mr. FORISTEL. State your name. |