San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-10-04
" Angels" as Blood-suck.
ers Are Called, De-
mand High Rates.
FORM A CORPORATION
Costs Big Money to Get
Financial Backing to
Complete Films. gs
Nv j. &. ROYLE.

New York, Oct. 4-The majority of
the producers engaged in the fifth
largest industry in the United States
are unable to obtain the money for its
financial needs from the banks Of the
country.
As consequence CANCELS" are now
being given a course of intensive train
ing in the qualifications of the moving
picture business.
The movies, according TO prominent
producers, now are in the situation
which in its early stages was prevail
ent in automobile manufacture.
Bankers, ignorant of the intricacies
of the industry and without intimate
check on its details and costs, have
been unwilling in most instances TO
loan money necessary TO finance the
production of pictures.
This policy has been strengthened
by the cold eye which the Federal Re-
serve Board has turned on the re-
discounting Of movie paper.
A producer of reputation, for ex-
ample, may have secured n moving
picture play, acquired an option OH
the services of director, star and
supporting company, arranged for the
distribution of the finished picture and
ben given an agreement. for the pay
ment of a large sum by the distribu-
tors on delivery of the completed film,
and still be absolutely unable to bor-
row cent for the expenses of pro-
ducing picture from the banks.
As consequence, he is forced 10
seek an "angel." as they are called in
theatrical parlance, to finance the
production.
As rule the "angel" has demanded
not only the producers right eye Ill
the matter Of terms and security, but
the latter has been obliged to make
other concessions such as including
some special player in the cast or fea-
turing some favorite "angel."
Must Make Concessions.
The history of the young moving
picture industry is full of instances
where producers were compelled to
make extraordinary concessions for
ready cash.
Perhaps the most prominent ex-
ample of this concerns The Birth of
a Nation"
ID. w. Griffith was compelled TO
give up rs per cent of the rights of
that production to secure $4,000 for
filming it.
As a result of these conditions
numer of men experienced in the NOV
ing picture industry, including some
of the most prominent producers. have
formed 4 moving picture finance cor
poration, called the Motion Pictures
Capital Corporation, through which
producer, whose reputation is estab-
lished, may borrow money on adequate
= security for the production or COM
pletion of picture on business terms.
In making these loans, chart pre-
pared along the lines OF those compiled
in the insurance business indicating
possibilities of loss is used and steps
taken to protect the lender against all
possible contingencies.
The financing corporation, which is
headed by Frank X. Wilson, who
handled the greater number of the Lib
erty loan drives for the Treasury De-
partment, in most instances takes
over a portion of the loan itself and
distributes the remainder among list
OF bankers and financiers who have
become conversant with the details Of
motion picture making and TO whom
this method of investment appeals.
Loans Are Discussed.
Many Of these capitalists are mem
bers Of the board of banks which as a
matter of policy decline TO touch mo-
ton picture loans.
tbs list of investors is being in
creased gradually as the operations
of the financing corporations have
progressed and as the details or the
industry become better known.
l.. -.
these loans will be offered to the gen
eral public in the form of note issues
because Of the fact that the loans,
usually for very short periods, would
tend to detract from their attractive
ness TO ordinary, investors.
The cost of obtaining ready cash
even under most favorable circum-
stances is not light at present.
For example, one nationally known
producer this week borrowed $780,
COO to COMPLETE two pictures in which
ktwo stars Of wide popularity are 10
appear.
The collateral put up consisted OF
S150,G00 of notes of state right ex-
hibitors given to the producer in pay
ment for the state rights on the films
the producer will turn out this year.
The loan was from four TO six
months and the compensation, in
GLIDING bonus and the usual q per
cent brought the cost to the pro-
ducer to = IL per cent a month.
Required Several Loans.
Another loan of $4,000 for six
months cost $500 in compensation
plus the usual q per cent.
In another case where the distributor
has guaranteed return of i05 per cent
of production costs within n year. a
four-month loan required bonus
which added TO the basic interest rae
of per cent, brought the cost ia
> IL per cent a month.
In still another case a loan of SIo.-
600 required bonus of $4,000 in adj
dition TO the 6 per cent and assign
ment Of 3 IL Fer cent Of the gross re-
ceipts until sum Of $4,000 was
reached.
In practically every case the ten |
ders were protected by Lloyds against |
excess costs in making the film in
volved due 10 accident, sickness or
death of the director and leading men, |
!. Mr. of the east.
s1hese conditions do not apply TO |
Some Of the large producers who con- |
duct their own financing.
1t affects. however. some hundreds |