Evening star., 1935-01-06
FILM MONOPOLY
PROBE LAUNCHED
BY GOVERNMENT
Continued From First Page.)

corporations. The Government will be
represented by Russell Hardy and
Harold L. Schilz, special assistants
to the Attorney General from the
antitrust division of the Department
of Justice. They were in st. Louis
yesterday comforting with Federal
district attorneys. Mr.. Hardy was
a star witness before the DarrOw
board and sought to block approval
of the motion picture industry's N. r.
A. code by President Roosevelt.
The current action differs from the
last previous Government attack on
the industry, in that several corpora
tions are accused of conspiring to
violate the Sherman antitrust act.
Three years ago the Trade Commits
sion lost a fight against Paramount
Famous -Lasky Corporation in which
the practice of block booking was
the central issue.
Although the action is being insti-
tuted in Missouri. the Governments
decision 10 proceed with the inveSti-
CATION is the outgrowth Of repeated
complaints to the Justice Department
and the Trade Commission by groups
Of independent exhibitors. Similar
charges have been filed with Attorney
General Homer S. Cummings by in
dependents in New York. Chicago and
other cities who contended that
'-gentlemens agreements between
major producer-d distributors prevented
them from obtaining high-quality
films.
Roosevelt Is Informed.
The investigation is regarded In
many quarters as calculated in part
to head of criticism by Senators
William E. Borah of Idaho and Gerald
P. Nye of North Dakota, both insur-
gent Republicans. who have protested
against suspension of the antitrust
statutes to permit negotiation of codes
of fair competition. President
Roosevelt. 1t was reported, is thor
oughly acquainted with the Justice
Departments plan of action and has
withstood political pressure to inter-
cede. Senator Nye has condemned
the film code repeatedly since the
Darrow board report was published
and has threatened to initiate an in
vestigation of both the code and the
entire industry.
In presenting the case, the Gov
ernment will contend, it was indicated,
that practically all major producers
have entered into agreements to give
preferential exhibition rights to
theater chains under their control.
The charge will be made that when
ever one producer owns a theater in
any important city, all other major
companies refuse to lease their films
to independents until the affiliated
house has been given an opportunity
to acquire virtually the entire Holly
wood product.
Then when an independent comes
along, it is contended, the major pro-
ducers are prepared to say they are
already committed to deliver their
product to other theaters in that ter
ritory.
"Big Five" in Control.
Mr.. Hardy, appearing before the
Darrow board last year, testified that
the number of independent theaters
had dropped considerably since 1919
and that the big five" of motion
picture industry was not only con-
trolling the making Of the pictures,
but also the distribution and the ope-
ration of the theaters.
He said that the situation had been
brought to the attention of the De-
partment of Justice and that depart
ment had twice warned these interests
that they were in violation of the
Sherman antitrust act.
He testified that independent oper-
ators of theaters had to buy in blocks
Oike block of 10 pictures by number)
and they would know in advance in
some instances the name and quail
fications of only one picture in that
block.
1t is understood that the present
action was started on an investiga-