1939: Motion Picture Industry

As the year 1939 ended, the motion picture industry was enjoying a period of comparative friendliness and optimism. Certainly the outlook for 1940 is hopeful when contrasted with the earlier pessimism induced by the war in Europe, the anti-trust suits, passage of the Neely Bill by the Senate and the attitude of the Department of Justice toward the distributors' attempt to establish a trade practice code.

Returning optimism is reflected in dividend statements and higher quotations of film stocks on the market. There is no doubt now that seasoned motion picture stocks were under-priced early in the autumn, due in large measure to the psychological effect of Premier Chamberlain's blackout of all film theaters in the United Kingdom. By scrimping, American producers might get their negative cost back in the domestic market. As for profits, however, they seemed to have vanished — at least for a time.

Then theaters reopened in England and France. Someone high in Government councils evidently thought Bernard Shaw was right when he said the cinema was necessary to maintain military morale. 'Entertain soldiers on leave,' was the dramatist's phrase. Simultaneously, several hits reached the American screen, such as Garbo's laugh in Ninotchka, Mr. Smith Goes to Washington, Deanna Durbin's first kiss in First Love, Elizabeth and Essex and Drums Along the Mohawk, all of which brought the pleasant tinkle of coin at the box office. Various film firms declared their regular dividends and a few that had been considered marginal, at best, turned up with unexpected earnings.

So financial skies have brightened perceptibly, and predictions from West Coast pre-views point to continued fair weather. Gone with the Wind is outstanding. So are Pinocchio and Abe Lincoln in Illinois. There are others coming, such as The Grapes of Wrath and Dr. Ehrlich's Magic Bullet, which will reflect credit on the screen as well as company ledgers.

Conferences continue between the Government's attorneys and attorneys for major companies involved in the Department of Justice's petition in equity filed under the Sherman Anti-Trust Act on July 20, 1938. Each party to the suit has an interrogatory for the other.

Meanwhile refusal of Mr. Arnold, assistant attorney general, to countenance the industry's code of fair trade practice has proved discouraging to some of its proponents. The present committee to consider improvement of trade practices was formed in June 1938. That is, it antedates the Government suit. Sentiment for a more liberal cancellation clause, among others, was voiced by distribution leaders as early as 1936.

Despite this, a majority of leading distributors have put into practice the 20 per cent cancellation clause and other provisions of the code. Now the arbitration plan, devised to include settlement of both contract disputes and clearance problems, is being reconsidered.

'Reliable sources' are quoted by trade papers as indicating that leaders of Allied States Association of Motion Picture Exhibiters, a smaller group composed of customarily recalcitrant elements, are ready to listen to the arbitration proposal.

With permission to cancel 20 per cent of his pictures, the exhibitor no longer can complain of 'block booking,' distributors point out. As a matter of fact, few of them did. Support for the Neely Bill to prohibit 'block booking' was limited to the minority Allied group. The bill was passed by the United States Senate in July and is now in the hands of a House committee, with hearings scheduled in late winter.

The trade practice code was intended to establish for distribution a system of self-regulation comparable to the Production Code, which has been working efficiently for some years under the presidency of Will H. Hays of the Motion Picture Producers and Distributors of America. Since the Association's by-laws prevent it from entering competitive trade areas, Mr. Hays is not active in the trade practice code negotiations.

Celebration of the Fiftieth Anniversary of Motion Pictures in October — with a prelude of publicity in August and September and a postlude of school, club and library activities that extended well into December — brought impressive results in the way of friendly participation by all branches of the industry, ranging from independent theaters to major circuits and producers.

The observance not only focused attention on the remarkable progress of motion pictures in half a century; it also emphasized the importance of the theater as an institution in the community and the significance of the screen's contribution to American life. Newspapers, magazines, radio stations, clubs, schools, libraries, civic officials and business men joined in commemorating the anniversary. Analysis of voluminous press comment reveals an overwhelming proportion of editorials and columns — 96.7 per cent — favorable to the screen's accomplishments. Of the remaining 3.3 per cent of comment, 2.8 per cent was neutral and only one half of one per cent was adverse.

Obviously moviegoers are not concerned with internal business affairs of the industry. What they want is good pictures, and, if the current briskness at the box office is any criterion, they seem to be getting it. All of which seems hopeful for 1940.