Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-10-29
BY JAMES ROBBINS.
ARTICLE ii.


BY JAMES ROBBINS.
ARTICLE II.
In placing the theater interests Of
his Famous Players Lasky Corpora
ton in the hands of others under
compensation plan, thereby separat-
ing the management of them from
production and distribution of motion
pictures, Adolph Zullor, portrayed In
the Federal Trade COMMISSIONS In
veStigation as the dominating figure
i'll the industry, has infiamed the fire
OF protests Of independents instead OF
quenching II.
His move also has raised q point
that seemingly clashes with the bone
of contention of counsel for the COM
mission, which is that producers and
distributors of pictures should divest
themselves of theater interests. 1t
is expected to be emblaZoned when
the commission holds it's hearing. No
Vember 10. On it's movie" inquiry of
four years, in which the public Is de-
clared to be vitally concerned. 1t hav
ing been set forth for one thing, that
good pictures have been kept from
theatergoers all over the country and
poor ones forced on them.
When counsel for the commission
that the makers and sellers OF pic
lures dispose of their theater hold
inSs as n cure for the alleged monop-
oily of the industry they had in mind
absolute divorce of them. There was
no thought of any Interpretation be
ing placed on their ton
| that might mean separation of inter
| ests through their passing into
| friendly hands and under too favor
able agreement.
Theaters Not to Be Sold.
! Zukor has turned over the Famous
! Players theaters to the firm of Bala-
! ban d katZ. theater owners, OF Chi
| cago, with whom he has had close
! business relations for years. II is
| stated that the only relation of F'a-
! nous with that firm is through a
| mana ging compensa ton and that the
! theaters are not to be sold.
Also it is understood that a 10
year agreement has been made be
| tween Famous Players and Ba la ban &
| katz; that a new theater corporation
| Is to he formed TO operate the F'a-
! nous houses, the stock TO be owned
| by Famous Players and the Chica go
! firm 10 act as ma nagerI. In add
! ton II is said, a second corpora ton
! will be created for further thea ter
! expansion. in which Famous Players
and Balaban & hatz Will go fifty
! fifty.
| Rals han and Katz have stated they
| will remain in First National. one OF
! the sO-called Big Three in the bust
/ ness and now a producing well as
! a distributing orga MIA ton. with which
! Tukur il said TO have established
! business connections
| Barnard or Barney Bala ban. as he
! is called. and his partner. Samuel
| katZ. are the biggest motion picture
| operators in Chicago. Like Zukor
they started out in a modest way.
! Their fathers operated small grocery
! stores along Roosevelt road. on Chi
! ca COS West Side. In the early days
| il was Twelfth street. When the
! o-ceAt motion Pisture took hold upon
! public fancy Barney and Sam We're
intrigued by its possibilities. 1t has
| been said they managed 10 acCumu-
| late $3.50. with which they rented a
vacant store and enough chairs TO
| fiji il. From then on it was one the
alter after another for them.
Chain Most Successful.
Their present chain of Chicago the
| aterS is considered the most success
! full in the country. and their links ex-
| tend over the entire State of Illinois.
| n >
! is interesting the Investigators. Dur
| ing last year 100000 was said to
have been spent daily for construction
| of motion picture theaters in the Coun
! try. and the estimated cost of con
struction this year is s20o.o00.00o.
The Famous PlayersLasky Cor
| poration is interested by itself in its
| subsidiary corporations in upward
of s65 DOE 900 in thea tiers, and it is
| nF all
nections would mean the disposal of
| interests in property of A probable
value of more than 500 o00. 900.
In their brief counsel for the com
| mission charged that Zukor. in re-
| linquishing certain interests. sought
to manufacture "a paper defense" by
supposed disintegration that would
| appear Il house cleaning.
! No intimation has been given by
i.Zukor or. his counsel. however. that
| the RalabAn and l\atZ deal was put
! through with amy thought OF the re
! quest for Il, diVeStiHg order. On tn.
! other hand. n was allowed To be con.
sidered solely as a business deal.
Several the:faer deals of Zukor were
cited in the brief. 1t was stated how
the Stanley Coz which operates the
aters in PennsylA,nia and New Jersey
| two wears ago paiN off unsecured notes
| held by Famous Players by delivering
new unsecured notes in the face value
Of 81 80 900. and returning the shares
| of Famous Players IkiskN Corpora tioI
| capital stock held by N. Famous Play
ers returned to the Stunley co. all Of
its old notes and the shares of its class
r common stock which had been de
posted az collateral.
Zukor Out as Director.
The unsecured notes were Dayabl,
at a faster rate than the STANLEY co
| would have been obligated 20 pay thu
! original issue. Zukor no hnser re
manned director of the Stanley Co.
1T will thus be seem counsel TO
the commission recorded. that. Zuko
relinquished 26,667 shares of cokatera
stock and that the Stanley Co. Slrne'
| over to him the $500 shares Of pur
/ chase price stock and gave him neV
notes unsecured for $l.250,000.
This transaction was nothing NOR
or less than an attempt on the par
of these respondents to clean hous
before they presented their defense.t
1t further was cited that Zukor re
| linquished 40 per cent interest IL
the Saenger Amusement Co., which
runs theaters in the South.
one of the allegations of conspirac.
was that the Realart Pictures Cor
pora ton which came into being il
1919 and put out pictures on a larg
scale. was carried on as Il bogus in
dependent for two years, when tn
clamor against Zuker's so-called pro
gram of acquisition. by purchase o
otherwise" reached a high pitch.
1t was stated In the testimony tina
luxor organized Realart and that al
of It's stock was owned by the Famou
Players Lasky Corporations Invent.
exchanges were opened up in Ike.
cities throughout the country and