Evening star., 1933-11-26

compared with the occasional is, 900 600
which once attended the theaters now
seldom have more than 5000, 600 to g.
| 100000 a day, counting all shows. SO
there has been notable shrinkage.
No business can lose patronage TO this
extent and continue prosperous espe-
cially if it attempts to maintain the
scale OF expenditure observed in the
boom days. Newspaper readers may re-
member rather hectic developments in
Wall Street, tales Of mergers and deals
running into millions, contests among
giants OF the financial world for con-
troll Of companies. AS matter of fact,
as often as not these contests which
seemed to be eager struggles for con-
troll were frantic struggles to get out
from under. The value Of the shares
of one of the larger producing COM
panies, for example, fell S15,00,000 in
a single days trading.
Movie Financing.
The story of movie financing is
novel in itself In the pioneer days OF
the movies financing was given little
attention. IndividualistS managed
somehow to get pictures produced and
then put them on exhibition. Returns
were quick. The next production would
be financed out of what actually was
operating revenue. Income was turned
over and over again in this manner:
When occasionally some producer would
get in a jam and have to borrow money
he sometimes paid as high as 80 per
cent for it.
As the business grew by leaps and
bounds, the big money men began to
pay some attention to 1t. To their sur
prise they found a huge infant of an
industry, infant in years but grown to
circus freak proportions overnight.
Then began a carnival of financing.
The banks, which had looked aSkance
at play-acting as the basis Of wealth
or security, changed their tactics and
showed a willingness to lend. There
were high interest and bonuses to earn.
So large an industry could not stay
long in the bank class, however. Very
soon the investment bankers discovered
that here was a new security which
the public could be induced to buy. In
period of about four years Of the
boom decade some $500 600 900 in
movie stock was sold 10 the public.
When money is coming in like that
borrowed money in addition TO box Of
flee receipts-the temptation to spend
is great. What did it matter if the
debt Of the industry had increased more
than 1000 per cent in a brief time?
!
vaganzas-which as every one
knows, is movie language for large ex-
penSive shows-continued to attract the
populace. Theater prices went up. The
idea Of the original Scent movie
seemed quaint. Only few old-timers
could remember the nickel era. Fifty
cents. rs cents. even 50 had become
the admission price.
One actress was reputed to receive
$4,000 week. Many received 5000.
An executive would draw from half a
million to a million a year. A half
ludicrous, half pitiable crusade of am
bilious people, young and old, headed
Tor Hollywood, beckoned by fortune.
Today the industry is just beginning
to recover from the headache which
followed the collapse Of so much of this
meretricious splendor. The extent to
which movie industry employees are out
of work is appalling. Not all will go
back. new era of naturalization is
declared TO have been ushered In. and
/ the industry. its worst growing pains
over, is expected TO Settle down into
one Of sane regulation with conserva-
tive profits. including resumption of
dividends to the public which bought
movie stocks in the boom.