Senator CLARK of Idaho. I understand that is about 24 percent. Would you say that statement was far wrong? Mr. SCHENCK. I don't think it is far wrong; no, sir. I think it is about right. I will be glad, also, to verify that. Senator CLARK of Idaho. If it was not right, you would know it, would you not? Mr. SCHENCK. I didn't get that, Senator. Senator CLARK of Idaho. I say, if it was not right you would know it? Mr. SCHENCK. No; purely because in my mind I am just figuring that we would not buy unless it was a substantial amount; and somewhere near 24 or 25 percent would be a reasonable amount of interest in that company. Senator CLARK of Idaho. And that gives you control. When you put that much money in you naturally want to have a measure of control? Mr. SCHENCK. I am sorry to say that that is not correct, as far as that particular company is concerned. They have some kind of an agreement which is held by three brothers, I think, who have a small amount of preferred stock, and if you had all the common stock they still would be 100 percent in charge of the company, and there is nothing you could do about it. Senator CLARK of Idaho. That is the Bradford Trust, is it not? Mr. SCHENCK. I think that is right. Senator CLARK of Idaho. You know it is right, do you not? Mr. SCHENCK. It may sound a little bit silly when I tell you that I don't remember these things. There would be no reason why I would not want to tell it to you, because it is on record. But I have trained myself to discard out of my mind anything that is finished. I could not do the job I am doing if I cluttered up my mind with a lot of stuff that there is no reason to remember. That is the only real explanation that I can give you. I would not want you to think that there is a single thing that I would not want to answer. I will answer you the best I know how. Senator CLARK of Idaho. I am certain that is true, and I can appreciate that presidents of companies in your position are not expected to remember all the details of their companies. What I am trying to get is anything that you do know that is pertinent here. Mr. SCHENCK. I am going to give it to you. Senator TOBEY. I may say, Mr. Chairman, to Mr. Schenck that some Senators have that faculty also. Senator CLARK of Idaho. This Gaumont-British corporation is the largest distributing company in England, is it not? Mr. SCHENCK. No; it is an exhibiting company. Senator CLARK of Idaho. It is the largest theater chain in England? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. There is a concern called the Maxwell chain? Mr. SCHENCK. I think that is correct. Senator CLARK of Idaho. Which owns a controlling interest or a considerable interest in it? Mr. SCHENCK. I have no connection there, but I understand that Mr. Maxwell had. Of course, he died about a year ago, but I think his family owns it. 63855-41--pt. 1- -15 Senator CLARK of Idaho. Do you know whether or not Warner Bros. purchased any of it? Mr. SCHENCK. I do not. There is a rumor about it, but so far I have not heard or asked anybody whether it is correct or not. Senator CLARK of Idaho. How many theaters in England does the Gaumont-British Co. own or control, approximately? Mr. SCHENCK. I do not have the slightest idea; but I do know that they are by far the largest circuit of theaters in England. Senator CLARK of Idaho. Your funds in England in pounds sterling were blocked or frozen, where they not? Mr. SCHENCK. They are frozen; that is correct-to some extent. Senator CLARK of Idaho. How have you handled those blocked sterling funds? Mr. SCHENCK. Up until this year we set up a reserve which shows on our published statement, sir. Our intention this year is, I would say, to practically consider it at a dollar. Senator CLARK of Idaho. Have you used any of the blocked sterling funds to purchase additional holdings in English concerns? Mr. SCHENCK. No, sir; the only thing, I believe, to the best of my knowledge, at this time, is that we have taken up some bonds amounting to about $1,000,000 on one of our main properties there, the Empire Theater; and there were some bonds. Senator CLARK of Idaho. It was a very wise business practice to use blocked funds to buy bonds? Mr. SCHENCK. We have a piece of property there, and with the money that is there, sir, we did that. Senator CLARK of Idaho. Now, Mr. Schenck, departing from England for just a moment, do you have, either directly or through holding companies, any properties in Australia? Mr. SCHENCK. I think we have, sir. Senator CLARK of Idaho. Are you able without too much trouble to generally tell me what they are? Mr. SCHENCK. I can tell you. [After a pause, looking through papers:] I thought I had it with me and could easily tell you just what the properties are that we have there. Senator CLARK of Idaho. All right. Please do so. Mr. SCHENCK. I am sorry that I am holding you up a little bit. I thought I had that data very handy, but must have mislaid it, and yet I cannot see how that would be. Senator CLARK of Idaho. If you can tell the subcommittee generally, Mr. Schenck, that will do. I am not trying to trip you on some minor figures, you will understand. Mr. SCHENCK. Oh, I understand. And I would be very gland indeed to give you the exact data. I am most annoyed about the fact that I cannot put my hand on it, and was sure that I had that data here. Senator CLARK of Idaho. Well, suppose during the noon hour, if you have the time, you check up on that Mr. SCHENCK. All right. I certainly thought I had that data here. Senator CLARK of Idaho. Will the audience please be as quiet as possible? While Mr. Schenck is looking through his papers we do not want talking in the audience that will disturb the proceedings. Mr. SCHENCK. I have the number of offices we have on the other side-exchange offices. Senator CLARK of Idaho. Do you mean in Australia? Mr. SCHENCK. No; not particularly Australia, though that would include Australia, of course. I can tell you about them too. Senator CLARK of Idaho. Do your properties in Australia consist of theaters? Mr. SCHENCK. Some of them. Senator CLARK of Idaho. Do you have any production outfits in Australia? Mr. SCHENCK. No; I do not think so. Senator CLARK of Idaho. They are mostly theaters? Mr. SCHENCK. Well, we have very few theaters there. We have offices there for the sale of our pictures, and we sell pictures to theaters there. Senator CLARK of Idaho. Now, as regards your Canadian holdings, Mr. Schenck, what properties does Loew's, Inc., either directly or indirectly, own or control or have a financial interest in in Canada? Mr. SCHENCK. In Canada we have three. Senator CLARK of Idaho. In Montreal? Mr. SCHENCK. No; we lease that. We had it at one time. Mr. SCHENCK. In Toronto we have two-the Young Street Theater and the Uptown Theater. And we have one in London, Ontario. Senator CLARK of Idaho. Mr. Schenck, will you pull those microphones up a little closer to you? They may be a little uncomfortable to you, but I think we will hear better. Mr. SCHENCK. All right, thank you. When I say we "own" I mean we are part owners. Local people have put in money as well as ourselves, and we operate them on that basis. Senator CLARK of Idaho. On a partnership basis? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. In some instances they are operated there on a partnership basis? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. Prior to the outbreak of the war, did you own properties in other countries? Mr. SCHENCK. Yes, sir. We owned them in numerous countries. That is what I was looking for but did not find. I cannot understand how that data became mislaid. It should be here. I feel badly about it. It would be very much easier for you and myself if I had it handy. Senator MCFARLAND. It is at least some satisfaction to see someone else mix up papers other than myself. Mr. SCHENCK. I think maybe someone might have taken them out to make some corrections. Senator CLARK of Idaho. During the noon hour if you can find that data it will be fine, and we can have it from you then. Mr. SCHENCK. All right. Senator CLARK of Idaho. Now, Mr. Schenck Mr. RUBIN. Pardon me, Senator Clark. I have some information that I can let Mr. Schenck have. Senator CLARK of Idaho. All right. Mr. SCHENCK. In Australia we have one, two, three, four, five, six, seven. Senator CLARK of Idaho. Do you mean seven theaters in Australia? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. I thank you very much. Mr. SCHENCK. I will say that I had a list of the same kind, but it seems to have become misplaced. Senator CLARK of Idaho. Let me now ask you the number of theaters you own in the United States. Is it 122? Mr. SCHENCK. It is 129. Senator CLARK of Idaho. Oh, it is 129 theaters in the United States? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. How many theaters in the United States do you have a financial interest in along with other major producers, exhibitors, and distributors? Mr. SCHENCK. None-well, now, offhand I would say with the exception of the creation of them-we have some places where we operate and where another company might have an interest in it, and that is in Buffalo. Senator CLARK of Idaho. Do you know how many theaters in the United States you have a joint interest in with others? Mr. SCHENCK. I think there are 12 theaters there, if I make no mistake about them. Senator CLARK of Idaho. Do you mean in Buffalo? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. Who are the partners in them? Mr. SCHENCK. They are the local people who originally had the theaters, and were operating, and it is along with Paramount and ourselves. I will say that we had some and they had some, and out of that came a sort of arrangement whereby we all were sharing, whatever the arrangement is. And it is only the first year we are operating that way. Up to this year the local people were operating them. Now, they asked us to help them take the burden of the organization, to let us operate. I am talking about the local people, and this is the first year we are operating them. Senator CLARK of Idaho. You and Paramount have a joint interest in 12 theaters in Buffalo? Mr. SCHENCK. That is correct. Senator CLARK of Idaho. And along with some local people also? Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. What other theaters, if any, do you have an interest in with Paramount; just how many, approximately? Mr. SCHENCK. I do not think we have any. To the best of my recollection, I don't think we have any anywhere else. Senator CLARK of Idaho. How many, if any, theaters do you have a joint interest in with Warner Bros.? Mr. SCHENCK. I do not think we have any, sir. Senator CLARK of Idaho. And with Twentieth Century-Fox? Mr. SCHENCK. None, sir. Senator CLARK of Idaho. And with R-K-O? Mr. SCHENCK. With R-K-O we have one in Denver. Senator CLARK of Idaho. How many theaters, if any, do you have a joint interest in with others than major producers and exhibitors? Mr. SCHENCK. We have some where there is a family by the name of Picker and that has been many, many years ago; but we operate and they own 50 percent of the properties and we do also, and that represents a few theaters in New York City. Senator CLARK of Idaho. Let me just ask you and then I will come back to it later, because I think it will be more appropriate to develop it later; but preliminarily the theaters that you do own are largely first-run, high-class theaters, are they not? Mr. SCHENCK. Outside of New York City that is correct. Mr. SCHENCK. Yes, sir. Senator CLARK of Idaho. And those theaters are largely distributed in-and I do not want to lead you Mr. SCHENCK. I will be very glad for you to do it. Go right ahead and if it is not so, I will so answer. Senator CLARK of Idaho. All right. That will be right. Now, outside of New York theaters those theaters-and, of course, that question would include New York theaters-are located in what are called key cities, are they not? Mr. SCHENCK. Yes, sir; in key cities. Senator CLARK of Idaho. Is not the word or term "key cities" a pretty well-defined word or term in your industry? Mr. SCHENCK. Well, I don't know about that. I would not say that. It is purely a matter of cities of fair population, I would say. Senator CLARK of Idaho. Cities of fair population with good trading areas? Mr. SCHENCK. I think that is right. Senator CLARK of Idaho. And located strategically? Mr. SCHENCK. It is our position to get in territory-and we do not acquire any now to the best of my recollection, but practically we build or built all theaters, outside of small-I mean a small numberwhere we either bought them or did something of that sort. Mainly we develop them ourselves, and it is in key cities. Senator CLARK of Idaho. In the trade it is true, is it not, that there are considered approximately anywhere from 31 to 35 cities that are key cities? Mr. SCHENCK. I could not anwser that and say 31. Senator CLARK of Idaho. It has been alleged by the Government that that is so. Mr. SCHENCK. If that is so, then all right. But I could not quite answer you that. Senator TOBEY. Mr. Schenck, a question, if you please. Mr. SCHENCK. Certainly. Senator TOBEY. I have been interested in your testimony, and you have been very frank with us and we have been equally so with you. However, I was a little bit troubled about your testimony, by your lack of familiarity with the companies you are a director of. You could not remember what they were. I will say that I am a little oldfashioned. The title of "director" or "trustee" connotes something of sort of fiduciary capacity to me, where such officer is representing people who have an interest in the companies. But here comes before us a man who, under oath, Mr. Nicholas Schenck-and we pay you tribute as a man of large affairs. Mr. SCHENCK. I thank you. Senator TOBEY. You are a director of many corporations, and when asked what corporations you say you cannot tell us, that you do not remember, and you have to consult papers. Your memory is very clear and distinct on matters of far less importance, such as theaters in |