Moving Picture World (Dec 1917) - Learn About Movie Posters

December 22, 1917 THE MOVING PICTURE WORLD 1763
Distributors Appeal to U. S. District Attorney ®
Law Firm Representing Them Charges Brooklyn
Exhibitors Contemplate a Boycott on
Fox and Vitagraph Productions
AS
A RESULT of the recent action on the war tax taken
by the Associated Motion Picture Exhibitors of Brooklyn
eleven distributing companies affiliated with the
National Association of the Motion Picture Industry have
employed Cadwalader, Wickersham & Taft, a firm of prominent
New York lawyers, to take care of their interests in
the controversy. The lawyers have written a letter to Melville
J. France, United States Attorney for the Eastern District
of New York, charging that the Brooklyn exhibitors
contemplate a boycott on the productions of William Fox
and the Vitagraph company and asking the district attorney
to investigate the complaint.
The Brooklyn exhibitors reply to the charges contained in
the letter, which was by the distributors furnished to the
daily and trade press, saying they do not intend to try the
case in the public press, but that they will welcome an investigation
by the proper authorities provided the complainants
are put under oath. The theater men also declare they
will be glad of an opportunity to present their side.
As an offset to the employment by the distributors of
eminent counsel the exhibitors say they probably will be
represented by Harvey Hinman of New York. Mr. Hinman,
it will be recalled, was counsel for the legislative committee
which last spring made an exhaustive investigation of the
film industry.
The letter of the distributors is as follows:
Melville J. France, United States Attorney, Eastern District of New
York, Brooklyn, N. Y.
Dear Sir: We are directed by certain distributors of motion picture
films to complain to you in regard to a boycott which the members of an
organization known as the Associated Motion Picture Exhibitors of
Brooklyn are threatening to put into immediate effect against two
of the distributors with the purpose of subsequently using a similar
'boycott against the other distributors, in order that by concerted action
and the unlawful means of a boycott they may cierce the distributors to
their ends. The distributors who request us to make this complaint
are the following
Artcraft Pictures Corporation, Fox Film Corporation, Goldwyn Distributing
Corporation, International Film Service, Inc., Paramount Pictures
Corporation, Pathe Exchange, Inc., Select Pictures Corporation,
Universal Film Manufacturing Company, Vitagraph Company of America,
World Film Corporation, Metro Pictures Corporation.
The two distributors against whom the boycott is about to oe instituted
are Fox Film Corporation and Vitagrapb Company of America.
In this letter we shall give you the salient facts, and we shall be
pleased to amplify this statement in a personal interview at your convenience.
The concerns above named are engaged In interstate commerce in distributing
motion picture films throughout the t'niied Slates, the total
business aggregating many millions of dollars annually. That this is
an interstate business within the Sherman Act has been held by the
Court in United States vs. Motion Picture Patents Company (2£i Fed.
S00).
By the War Revenue act of October 4, lf>17. Congress Imposed three
taxes affecting the motion picture business, namely, ( 1 ) a tax of onequarter
of a cent per linear foot on film which has n it been exposed ;
(2) a tax of one-half a cent per linear foot on film containing a picture,
und (3) a tax on admissions to theaters.
The tax upon admissions, as the exhibitors have arranged, is paid by
the patron of the theater when he purchases his ticket.
In order to determine how to apportion the tax of three-quarters of a
cent per linear foot on films, an exhaustive examination of the subject
was made by Price, Waterhouse & Co. at the request of some of the distributors.
As a result of their examination certain of the distributor- determined
to add to the rental charge for a reel (which charge ranges
from SI to $HX) per day, according to the character of the subject and
the reputation of the actor) a charge of fifteen cents a day per reel (each
reel comprising approximately l.(KM) feet) on the assumption that the
average lile of a reel is fifty days. In this manner something less than
the amount of the tax will be collected by the distributors. As each
exhibitor rents on an average six or seven reels a day, the average
daily additional cost to the exhibitor is about $1 per day. On the other
hand, if the tax were borne by all the manufacturers or distributors In
the United States it would amount to a tax upon them of about $10i>.iiiiO
per week, which. In the minds of many of the distributors, would be
ruinous. Accordingly, it seemed to the distributors above named (who,
however, comprise only a portion of the total manufacturers and distributors
in the United States) that just as the exhbitors had passed on
their tax, so the producers or distributors should pass on the tax imposed
upon them, and that the method recommended by Price, Waterhouse &
Co. was a fair and equitable method of accomplishing this purpose.
We direct your attention to the (act that the collection of this fifteencent
charge has no relation to prices, for the reason that the daily rental
charge on reels ranges from $1 to $1I7, p. 1300; Moving Picture World
December S. 1!H7. p. I-IOK: Exhibitors' Trade Review, December 8'
lHli, p. Si.
The committee reported at a meeting on Thursday, November 22, that
thirtv -ignaiurps of customers had been obtained for cancellation of the
productions of the two concerns just named, and on Saturday. November
2-1. It was further reported that many additional signatures had been
obtained, comprising practically all the Brooklyn customers of the two
distributors.
On November ID, William Brandt, president of the Motion Picture
Evblbltors" league of Brooklyn, called on the telephone one of the
principal officers of the Vitagraph Company and requested a conference
s-atlng (hat the exhibitors of Brooklyn had -elected the Vitaeraph Company
f-r their cancellations, and that cancellations from exhibitors all
over Brooklyn had been placed In the hands of the Committee of Fifteen,
to he served on the Vltaeraph fomnanv. and that s'ich conceMof nns
meant that the Vitagraph Company would be shut out of Brooklyn
Similarly the offcers of the said Brooklyn exhibitors' association and the
Committee of Fifteen have waited upon the officers of the Fo X
Corporation
Film
and have stated that they have obtained signatures from
practically all. If not all, of the cu tomers In Brooklyn of the Fox Film
Corporation, consenting to and authorizing cancellations to he made
tbe Committee
by
of Fifteen of their contracts with the Fox Film Corporation,
which cancellations. If effected, would destroy the business of the
Fox Film Corporation in Brooklyn.
These announcements have been made In the form of threats and with
the declaration of an intent to bring about concerted action on the part
of all the exhibitors and customers of the Vitagraph Company
Fox
and
Film
the
Corporation, in order by their united action to destroy the
business in Brooklyn of those corporations.
We have advised our clients that such concerted action Is In violation
of aw and Is a conspiracy in restraint of interstate trade, and accordingly
our clients have considered it their duty to direct us to present
matter
the
to ru for your consideration, with a request that you inquire
into the matter, by grand jury proceedings or otherwise as may seem
to you advisable.
It has been stated by the officers of the Brooklyn Exhibitors' Association
and by the members of the Committee of Fifteen at the conference
above referred to. that the singling o„t of the two corporations named
is but one step in a plan which is directed against all the distributors
For the reason that they are all eeually affected by the scope of this
combination and boycott, all of them join in this complaint
In view of the fact that the boycott may become operative at
moment
any
may we respectfully request your earlv consideration of the
matter. very respectfully,
CADWALADER. WICKERSHAM & TAFT.
Reply of the Exhibitors.
The Asociated Motion Picture Exhibitors of Brooklyn
have issued the following reply:
The Associated Motion Picture Exhibitors of Brooklyn and Long
Island is being charged by the combined and concerted action of the
Distributors' Branch of the National Association of the Motion Picture
Industry with a criminal offense. Evidently, the felony charged l« of
such serious character as requires the employment of the most eminent
counsel to represent them Notwithstanding the usual method of first
presenting the case to the authorities. It simultaneously gave such
comprint the widest publicity in the public press. The reason for
doing this is manifest, and no doubt apparent to everyone. The exhibitors
of Brooklyn and Long Island do not Intend to try the Issues
In tbe puh'lr press, and therefore will welcome an Investigation by the
proper authorities provided that the complainants be put under oath
to ascertain the facts, and the exhibitors will welcome at the proper
time an opportunity to present their side.
The National Association of the Motion Picture Industry was originally
organized and incorporated for the purpose of bringing about a
better understanding among its various branches and to adjust. If possible,
any di:Terence« that might arise between the various branches
therein A nationwide complaint has been filed against the Distributors'
Branch of this industry, and Instead of meeting it as real
proper business men they find It necessary to hire the most expensive
counsel obtainable to secure the machinery of the United States Government
to help them compel the exhibitors to accede to an Illegal
demand. The United States Government Is certainly busy enough conducting
this wor'd war without being asked to indulge lt»elf in patching
tip Internal differences of this Industry. The fifth largest industry of
the wor'd most .ertain'y look ridiculous. This proceeding on the part
of the Distributors' Branch will tend to create an unfortunate breach
between the exhibitors or this country and the distributors and has
torn away the foundation of nn organization that was built for the
purpose of unity in the industry.
Ex-Senator Hnrvev Hlrm>n o f New York, who was counsel for the
New York Legislative Investigation of the Motion Picture Industry,
probably will present the exhibitors' side of this Issue.