such trade and commerce in violation of sections 1 and 2 of the Sherman Act, in the following manner: 167. By concertedly placing under contract most of the valuable stars, featured players, directors, technicians, and others who have gained fame, prestige, renown, artistic, technical, or other great value in the production branch of the industry. 168. By concertedly loaning and exchanging production personnel under con tract to each major producer, and costly production equipment owned by each major producer, to and with other major producers on uniform, noncompetitive terms. 169. By concertedly excluding independent producers from access to production personnel under contract to each major producer, and costly production equipment owned by each major producer, on the same terms on which they are made available to major producers. APPENDIX D D. Combinations of which each producer-exhibitor defendant is a member which are illegal per se 170. Each of the combinations of parent and subsidiary corporations which respectively form Fox, Loew's, Paramount, R-K-O, and Warner constitutes a separte combination and monopoly in restrain of trade, which in and of itself has violated sections 1 and 2 of the Sherman Act in the following manner: 171. By preventing independent producers from competing with such a combination in the production of films. 172. By preventing independent distributors from competing with such a combination in the distribution of films. 173. By preventing unaffiliated exhibitors from competing with such a combination in the operation of theaters in cities and towns where theaters operated by it are located. 174. By acquiring and maintaining a monopoly of the business of exhibiting motion pictures in areas serving a substantial percentage of the total population of the United States. 175. By coercing and intimidating unaffiliated exhibitors located in towns where such a combination operates no theaters to license its films upon arbitrary terms by expressed or implied threats to build or acquire a competing theater and use it to destroy the business of such unaffiliated exhibitors. 176. By coercing and intimidating unaffiliated exhibitors located in towns where such a combination operates theaters or where it desires to operate theaters, into relinquishing control of their theaters or a share of the profits thereof, to it, by expressed or implied threats to deprive them of access to its films or to so limit the terms and conditions on which they license such films that they may no longer be profitably exhibited by them. 177. By conditioning the licensing of films distributed by such a combination in theaters operated by another such combination, upon the licensing of films distributed by the latter combination in theaters operated by the former combination. APPENDIX E E. Illegal contracts between each distributor defendant and circuit theaters 178. Each defendant distributor, well knowing all the matters and things hereinbefore alleged, for many years last past, has contracted with various theater circuits throughout the United States, including the affiliated circuits hereinbefore mentioned, to restrain and pursuant to such contract, has in fact unreasonably restrained trade and commerce in the distribution and exhibition of motion pictures among the several States of the United States, in violation of section of the Sherman Act, by entering into licensing agreements with said circuits of theaters which contain provisions calculated to impose on independent exhibitors in competition with such circuit theaters, one or more of the discriminatory restrictions referred to in the lettered subparagraphs of paragraph 149, regardless of whether such license contracts were made pursuant to any prior concerted action, combination, or conspiracy between two or more defendants. APPENDIX F F. Illegal coercion by each producer-exhibitor defendant 179. Each producer-exhibitor defendant, well knowing all the matt things hereinbefore alleged, for many years last past, has violated secti the Sherman Act by using the monopolistic buying power of its circuit of to compel each of the defendant distributors and other distributors of enter into licensing agreements with its circuit on terms which prev affiliated theaters from in fact competing with its circuit theaters, eith respect to the terms on which said unaffiliated theaters license films or th on which they exhibit films to the public, regardless of whether such contracts were made pursuant to any prior concerted action, combina conspiracy between two or more defendants. APPENDIX G G. Illegal contracts made by each distributor defendant with exh generally 180. Each distributor defendant, well knowing all the matters and hereinbefore alleged, for many years last past has made divers contra exhibitors generally throughout the United States to unreasonably restr pursuant to such license contracts, has in fact unreasonably restraine and commerce in the distribution, production, and exhibition of motion in the United States in violation of section 1 of the Sherman Act, in th ing manner, regardless of whether such license contracts were made pur any concerted action, combination, or conspiracy between two or more ants (listing 7 practices complained of). May I say in connection with the introduction of the amend the pending resolution that it was not my thought, and I rath it was not particularly the thought of Senator Clark who jo its introduction, to occasion an extended study by this comm charges of monopoly. The truth is that many such studies or ber of such studies have been made in recent years. I would n to wish upon this committee necessarily the task of going ba and over that ground again and again and again. The purp I was striving to serve with reference to the amendment to the tion was that of closing the door to whatever prospect there w objection being raised in reference to the existence of a mon I could not hope before you this morning to demonstrate the of a few men over a majority of the seating capacity of the of the United States without referring to the existence of a m and I did not want to chance being questioned or estopped fro ing a point as important as is that one of the moving-picture pr control of the places of exhibition for the films in our countr Senator CLARK of Idaho. I think, Senator, that even with latest amendment, the monopolistic feature of this industry, if and if it is shown to exist, would be pertinent as showing the viciousness of the propaganda. May I just elaborate on tha measure, everything that we read or hear on the war is prop That is true. If Lindbergh speaks, that is propaganda for If Senator Wheeler or yourself speak that might, in the bro of the term, be propaganda for the other side. Senator MCFARLAND. You would not admit that, wou [Laughter and applause.] Senator CLARK of Idaho. The point that I take it you are is that people either listen to you or listen to Colonel Lindb Senator Wheeler on one side, or, we will say, the Fight for ters and tion 2 of theaters films to event unher with the terms -h license nation, or hibitors nd things ursuant to dment to her guess joined in mittee of or a num not want back into pose that ne resolu vas of an nopoly. ne control e theater monopoly rom mak producers ry. nout your if it exist e peculiar at. In opaganda cone side road sense ould you! re making bergh and Freedor Committee on the other side. Likewise what Dorothy Thompson writes is probably propaganda in the broad sense of the term and, on the other hand, perhaps what Gen. Hugh Johnson writes might by some interpretation be considered propaganda to the contrary. But, as I take it, your point is that the American public can read or disregard that propaganda as it sees fit; it can turn you off on the radio, and I have no doubt they frequently have. [Applause.] And likewise they can turn off the Fight for Freedom Committee, and perhaps Mr. Willkie, and no doubt they frequently have. [Applause.] But if, as you charge, a monopoly exists and this monopoly controls 50 percent of the seating capacity of the theaters of the country outright, and the other 50 percent indirectly, then the average theatergoer has no choice in fighting that propaganda but by being on one side when he goes to the moving pictures. Is that the point you make? Senator NYE. Precisely; and I am delighted that the Senator should bring out, if I have not made it clear, that very important element of consideration. It does not make any difference who is making a speech on foreign relations these days; if the address is a public one or is on the radio, it is the privilege of any American to turn it off or decline to listen to it. But everyone who comes to hear those who are speaking upon this subject come knowing of the prejudice, if I may call it that, or of the favoritism which the speaker entertains toward this general subject. They are on their guard against whatever element of propaganda the speaker may inject. But the individual who goes into a theater for the privilege of being entertained finds his guard down completely in this flood of propaganda being poured into his being in a way that is pretty hard to get rid of. That is an entirely different kind of propaganda. It is the right of the committee to ask us who bring this demand for an investigation, what pictures we consider to be the propaganda pictures at the moment. Senator MCFARLAND. Senator, may I ask a question at this time? Senator MCFARLAND. You recognize the principle of law that Congress through any subcommittee can only make an inquiry which is pertinent to the possible exercise by Congress of its constitutional power of legislation? You recognize that principle, do you not? Senator NYE. Quite. Senator MCFARLAND. May I ask you at this time just what legisla tion you and Senator Clark of Missouri had in mind that this com mittee would recommend, when you introduced the original resolution? Senator NYE. I could not respond to the Senator's question intelligently if I were to contend that I had any specific legislation in mind at the time of the introduction of this resolution, nor can I profess to have any kind of legislation in mind at this moment. I can only repeat that I hope that it is not going to be necessary to resort to legislation. Senator MCFARLAND. You mean that we should conduct this inquiry just for the purpose of publicity? Senator NYE. No. [Applause in the audience.] I do not mean anything of that kind. I do not think anything of the kind. I am not asking for anything of the kind, and I think the Senator is very, very unfair if he suggests that Senator Clark of Missouri and I were entertaining that kind of attitude. [Applause.] Senator MCFARLAND. I am not trying to criticize you, Senator. You misunderstand me. What I am trying to get is what you are trying to accomplish, what you want the committee to accomplish for you. I want to know what we are trying to do here. Senator CLARK of Idaho. May I make one suggestion? May I say, not in any attempt to answer the question, that there are a lot of things that we might ultimately be able to do. The Senate has control, by way of legislative process, over interstate commerce and those things engaged therein. We might conceivably amend the Sherman law to provide that a monopoly like the moving-picture monopoly, if it is shown to exist, might be regulated in a measure like the radio industry today is regulated, and be required to give equal views on controversial public questions. That is a possibility. The radio today in political campaigns is required by law to give equal time and, as a matter of practice, has given equal time on foreign policy controversies to both sides. We might amend the Sherman law to tighten up on these monopolies which the Department of Justice apparently tightened up on only half-way. I think it cannot be determined what course we should pursue legislatively until we ascertain all of the facts. I did not mean to interrupt, Senator McFarland; I merely wanted to make that observation of the possible ultimate legislative results of this inquiry. Senator NYE. May I suggest that again and again the Senate has authorized investigations without any reference to specific legislation. Almost biennially the Senate authorizes a committee to investigate the conduct of election campaigns. The language of the resolution is that found in this resolution. Legislation has followed its investigations. without any necessity upon those who had undertaken the investigation to lay down in advance what the legislation might be. I had the privilege for 3 or 4 years of heading a committee which gave study to the causes that were involved in our entry into the last war. There was no specific legislation in mind at the time of the introduction of the resolution or at the beginning of the investigation. But when that investigation was finished its study became basic of a great deal of legislation that has had a most prominent part in our life in more recent months. I could go on endlessly reciting these examples and, indeed, the practice of having an investigation and then talking about legislation afterward, if it is found by the investigation to be a necessity. Senator MCFARLAND. Senator, my idea in asking you was that if you did have some legislation in mind, it would be quite helpful to the subcommittee, particularly to myself, in knowing what to look for. Senator NYE. If the Senator's statement had been as broad as that I could have said to him, if I have not already said it, that I did not have any legislation in mind. Senator MCFARLAND. Of course, if it was for the purpose of controlling freedom of speech it would be unconstitutional and we could not make the inquiry. There are certain things that we cannot do here. That was the reason I wanted to know what we were trying to do. Senator NYE. I have said as much in my presentation to the committee previously this morning. I was saying that it was the right of the committee to demand of us who asked this investigation a statement as to what pictures we considered to be propaganda pictures. Without undertaking to name all of them, I think that those which I shall now name would bear investigation: Convoy, Flight Command, Escape, I Married a Nazi, That Hamilton Woman, Man Hunt, The Great Dictator, Sergeant York. There will be other testimony concerning additional pictures, I understand, before the committee within the immediate days. I have myself seen some of these pictures. I do not pretend to have seen all of them. In a general way I can only say to the committee that my own feeling that there is propaganda in the moving pictures is built upon what I have seen, built upon the report of what others have seen, built upon reviews of certain pictures which have been published in papers, and built upon a seemingly endless encounter with individuals who increasingly have been complaining about how the silver screen was being utilized to break down the determination of Americans to stay out of these foreign wars, My thought in this regard was greatly strengthened by excerpts which I read in the press from the report of Mr. Will Hays, in which extract I could not help but sense that Mr. Hays, conversant with growing public resentment toward what were called "propaganda pictures," was warning the propaganda producers against substituting propaganda for entertainment, entertainment after all being the purpose and the job of the motion-picture producers. Frankly, I should like to see some of these pictures allegedly carrying propaganda which I have not been privileged yet to see, and I think the committee would be justified in affording itself, if need be, a private showing of those pictures I have named, and perhaps others, making sure that the film that is given you to observe is unedited since its first showing to the American public. Senator CLARK of Idaho. In Mr. Willkie's letter which has been inserted in the record he offers to have the committee shown, I think, particularly, the picture entitled "Escape" and, I believe, another picture. Mr. WILLKIE. All of them, Senator. Senator CLARK of Idaho. That we might desire to see. Mr. WILLKIE. We are prepared to set them up here for the committee, if that will be of any accommodation to you. Senator CLARK of Idaho. I think that as time goes on possibly we can have a moving-picture show here in the committee room, then. Mr. WILLKIE. I guarantee it will be a good one, Senator. Senator CLARK of Idaho. It will if you have anything to do with producing it. Senator NYE. Mr. Chairman, if you are trying to ascertain how near through I am, I think that I shall require as much time more as I have already taken, before I have finished. Senator CLARK of Idaho. What is the pleasure of the committee? We can run along here. Did you have something to say at this moment, Senator McFarland? Senator MCFARLAND. No. The only thought I had was that it was 12 o'clock. [Laughter.] |