The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-07-18

SMALL INVESTOR GAME
FOR THEATER BUILDER
Lured by Glowing Pictures Of Huge
Profits. He Puts Up Money.
Country Overbuilt.


Special TO The Washington H1aid
New York. July 17.-There Is no bet
ter evidence of the disaster attendant
upon a surplusage OF thsaters than
the condition at present in Provi-
dence. r. !. All the season managers
OF visiting attractions have complai ned
OF the lack Of patronage in that over
burdened community and now II de-
velops that not less than Ave of its
theaters are for sale or lease.
Many Of these theaters sprane up
like mushrooms at the time a certain
group Of managers went theater-
building-mad throughout the country.
Now that the enthusiasm OF the pro-
motors is dampened and there is not
SUFFICIENT money with which to meet
obligations. landlords are looking in
vain for responsible tenants
There was bound to he a reaction
from this frenzied condition of the
past few years Solid. substantial. far
seeing theatrical business men. like
f. F. Albee and A. l. Erlanger. is
sued warnings again and again but
the public in many instances was
gullible and snapped up every offer
OF stock in a new playhouse.
Providence is not alone in its dis
tress. Big and little cities all over the
country report similar conditions, even
" VI SC AlDeS, VINO Is vice pTeSl-
dent of the B. F. Keith theatrical cir
cult. with its scores of affiliated the
aters, and who also is general man
ager Of the United Booking Ofices.
which supplies attractions for hun
dreds Of houses. has been gathering
conclusive data on this subject of
over-production Of theaters. New
York. Philadelphia. Boston. and other
large cities. very naturally. are among
r. -.
vestors are being wiped out financially
from time TO time. Promised hundreds
OF per cent profit annually upon an
original investment Of small per
cent of the par value of the stock for
which they subscribed. they later found
themselves assessed for the balance
and then compelled TO 90 deeper into
their means in order to protect the
money already invested. Eventually
they are wiped out. either by having
TO sell their stock at an almost alb
solute loss or else receivership pro-
ceedings wind them up.
Too many theaters already erected.
too few attractions to fill the existing
theaters. and too little money in the
public's purse to support SO many play
houses. are the main adverse factors.
In the small cities the situation is
simply fierce" even the repertoire
at ten, INVENT 1dll-
ing to stop the gap. In the big towns
It's even worse. The majority Of the
theaters so concerned have long since
passed out of the control of the orig
inal investors. who are usually re-
cruited from the great class that al
ways falls for any get-rich-quic
scheme. And the country has no lack
of INSCRIPTIONS promoters. builders.
and owners. who frame up these prop
"Th. mall business man. and often
the big business man. who goes to y
popular theater. always filled but per-
haps the only one in town to be SO
favored. seeing the crowd fighting to
give up their cold. hard cash at the
box once and reserving seats whole
season ahead. can hardly be expected
to know the ms and outs Of circuit
Affiliations. city franchises for book
taees which that particular theater
may enjoy to the exclusion Of all
other houses in the same city. In his
ignorance of the organized conditions
among experienced managers tending
to exclude inexperienced breakers
into-the business. the investor already
nibblinR at a promoters bait is prone
except whisky selling. which takes in
such an amount Of hard cash. with
such unbroken flow. and with such
immense profits. as the theatrical bust
ness. and he Is likely to think that
his payment of SO down on account
Of a 500 share Of stock will certainly
yield him a profit Of 500 per annum
for years to come.
'Prospectuses without number have
ditions appear that strong to the ig-
norant and inexperienced investor
with a little money saved up by the
sacrifice of the comforts Of life. The
theater may be erected. but there are
mortgages on II. and then comes the
question of attractions. Even II TINS
is all right it may turn out that the
theater has not been located right.
that it lacks transportation facilities. and
SO on. Then there are operating ex-
penses. No one thought that there
would be times when there would be
a loss. with expenses. interest, taxes.
hxed charges. and other items going
on in an endless round. No money
had been provided for a sinking fund.
Then comes an assessment. then moro
of them-the investor has to respond,
finally comes failure and reorganiza-
ton. All the original stockholders are
wiped out. The ANAL owner may get
IL on such terms that he can afford
to run il for less money or he can
lease IL to a member of an existing
circuit for q reasonable rental. Orig
inally IL may have cost a million to
build and equip. but the hnal owner
may have bought II for q NTH Of than.
Perha ps he can make money out of IL
on that cost basis: more frequently
he cannot. and then II IL turned into
a storage house for a garage. Even
the motion picture houses are sub
ject to the same mutations, and IN
vestors in these suffer the same has-
ard. but in lesser degree than their
fellow capitalists of the larger the
aters
Last season efforts were made to
bring the two big theater syndicatss
together for the purpose Of reducing
the number Of theaters under their
control 20 that there would not be-,
a. then and now. more time to NIL and
more theaters to cater to than they
could provide attractions for. The
failed then. but II 10
bound to come. when IL does still
more theaters will be Idle.
CUT RATE TICKETS
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