dominates New Orleans. He was having trouble with his partner. Paramount wanted to pay more than 15 percent of the gross receipts. for pictures which it was their common practice to pay 15 percent. That was brought out in this trial. While the independents all around them were up to 40 and 50 percent. The 15-percent price was an affiliated buyer.

In the Crescent Theatre case, it was shown that he bought pictures for from $6.25 to $10, while his competitor paid 40 percent, went broke, and had to sell out to him.

Thatis our complaint about discrimination in rentals in addition to the discrimination in forcing us to buy pictures. They use shortage of prints and shortages of pictures to accomplish both.

Chairman PLOESER. Has the Federal Trade Commission ever shown the Robinson-Patman Act to these people?

Mr. MYRICK. Not to my knowledge.

Mr. BALLINGER. The counsel for the national organization has a doubt in his mind as to whether the act does apply. He wants a law passed defining it clearly.

Mr. MYRICK. They have another deal. They come into a town and they sell you pictures. They write up a contract. They merely call it an application. They take that application, and they take in some cases dates for the pictures. Then they go in with it and they submit it to New York. They hold that up until just about time you are ready to play the picture, until it is too late to do anything about it; then they say, "We have got to have more money or you do not get the picture."

It is too late for you to do anything. You are forced to pay it. That sets the precedent for the next time they come up; and, whether A, B, or C, you paid so much money before and that is what it will be now. That is one of the ways they use to jack up these prices.

Mr. BALLINGER. This short supply you allege-does that cause you to overbid on films? Do you tend to go broke in bidding on films?

Mr. MYRICK. Yes. In lots of cases it does, especially when they operate on this ability to pay, you see, and they have a scarcity of film, if you are going to get a picture and if you are going to get it while it has any box-office value. Then in many cases you have to overbid in order to get the thing, whereas if there were a lot of pictures on the market they would be anxious. In other words, they have created a seller's market instead of a buyer's market. They have to go and buy them in many cases. I used to have a film salesman call on me once a month. In the last year, I have had some film companies never call on me at all. I had to call on them.

Mr. BALLINGER. Have you had many failures in this area, in the Nebraska-Iowa area, of small motion-pictures houses?

Mr. MYRICK. Not many for this reason: Most of our members are not theater men in the terms of what you might think. They are carpenters in the daytime, depot agents in the daytime, they run a restaurant, or they are in some other form of business. In many, many cases, in a big percentage of the cases, the popcorn machine sitting in the lobby nets them more money than the theater itself. That can be proven by the records.

There is another thing that enters into the prices of the pictures. There is a company called Confidential Reports, Inc., that is owned by the various distributors. When they sell pictures

Mr. BALLINGER. You mean the various producers?

Mr. MYRICK. The producers or distributors.

Mr. BALLINGER. The Hollywood producers own the company?

Mr. MYRICK. When they sell a picture on a percentage arrangement they send a representative from Confidential Reports to check his receipts at night, to police the door. In the first place, they go to the little town and get some fellow locally that in these days when help is hard to get is not busy, so you know what it is. He comes in and checks your theater, he polices it.

Chairman PLOESER. Do you permit him to come all the way in?

Mr. MYRICK. According to the contract you have to. You have to let him in. They come in and they check your receipts. We have had the landlord come into the theater as the representative of Confidential Reports and check the receipts at the box office and the next time the rent lease was written, the rent was up because he thought the man grossed so much money he must have made some profit. If one company comes in and sells a picture and it grosses $100 in a given theater, it should have no bearing on what the other companies are going to sell their pictures for. But all of the companies own this company that has the records of the gross of that theater.

We protest the legality of Confidential Reports operating. We think there is collusion. They have access to one another's records. We do not have access to theirs.

Chairman PLOESER. That is Confidential Reports, Inc.?

Mr. MYRICK. Yes. Then we have this national screen set-up where we get our advertising, our coming attractions, our trailers and advertising material. There is only one place in the world you can buy most of that and that is from National Screeen and you pay them exactly what they ask you for it.

Mr. BALLINGER. Do they have the overwhelming percentage of the business?

Mr. MYRICK. They have all of the business in some fields.
Mr. BALLINGER. You mean in some territories?

Mr. MYRICK. They have all the de luxe trailer business from Paramount, Columbia, Universal, RKO, Monogram, and United Artists, everybody in the business except Warners and Metro. When you go to National Screen for trailers you pay them all they ask because you cannot get them anywhere else. They will say, "How many are you going to use a week?"

You say, "Three or four." The deal in many, many cases is a blank until the week and if you have to buy a picture from another company you have to pay National Screen for theirs whether you get it or whether you don't.

Chairman PLOESER. That should be put on the agenda, too.

Mr. BALLINGER. What is the name of the organization?

Mr. MYRICK. The National Screen Service. I have a letter here. I just brought this one along. It is where a film salesman went into a town and told these people that in order to get the pictures they

wanted, they had to buy definite pictures. I just asked three or four fellows to come in here because, after all, I knew we would not want to take up too much of your time. We could bring in all kinds of this evidence where they have forced exhibitors to buy one picture in order to get another one. I have three other fellows who have been forced and I have this one letter if you want to insert it in the record. Chairman PLOESER. We would like to have it in the record. Mr. MYRICK. Any time you want any more, we can get plenty of them.

(The letter referred to is as follows:)

SIOUX CITY, Iowa, September 15, 1948.

DEAR MR. MYRICK: When the Fox salesman called on us he had a group of pictures to sell which included Scudda Hoo. I did not want this picture because it was percentage. He stated that he would not sell the other pictures if I did not buy Scudda Hoo. Therefore, to get the other pictures I had to take Scudda Hoo.

Recently he called on us and the same thing happened again. I had to take Green Grass of Wyoming at 40 percent to get their other pictures.

I am sending you this information as I am against buying percentage pictures. Sincerely,

HERBERT JENSEN, Owner, Sun Theater, Walthill, Nebr.

Chairman PLOESER. Can you supply us with affidavits?

Mr. MYRICK. We talked about affidavits. We did not get them because we thought maybe we should not. We thought maybe personal letters would be better. We can get affidavits.

Chairman PLOESER. I think you should.

Mr. MYRICK. How many do you want?
Mr. BALLINGER. As many as we can get.

Chairman PLOESER. We would like to have as many as you care to give us. Make it a substantial number. I think the greater the number, the less chance of reprisal. And if there is any reprisal, we want to know about it instantly. It is the intent of the committee within the scope of its power and influence to protect against reprisals.

Mr. MYRICK. That used to be the common fear of the independent. exhibitors, that the first time they raised their voice in protest to the tactics used, reprisal measures would put them out of business.

Chairman PLOESER. If such should happen, we want to know it instantly. We will be in the fight with you if that happens, I promise

you.

Mr. MYRICK. I think that covers it.

Mr. BALLINGER. I have one item here. I understand that some motion-picture exhibitors have a complaint which they classify as the fraudulent representation of box-office values.

Mr. MYRICK. That is right.

Mr. BALLINGER. Do you have any comment to make on that? Mr. MYRICK. We talked about how they sell pictures differently in every station. A picture is supposed to be sold on its box-office values in each and every station.

The way they arrive at that figure is as follows: They have their top figure on a percentage arrangement, if they can, then the next one is a certain percent, or it is governed on what this picture is doing in the

area.

When they go out to sell the picture they say, "I got the picture here. It is grossing such and such," or as much as a picture that did a terrific business. In many cases the fellows buy them, they come back and when complaint is made they tell them that is just sales talk.

We claim it is misrepresentation. They know what it is doing. We have no way of knowing what it is doing. That is a common practice. I had one film salesman tell me a picture did $1,200 in a certain town, trying to sell me the picture which would not have grossed anywhere near that. He was using that as a sales talk. Then I saw a man out in the field who came into that exchange area. I was visiting the manager. He asked how was the picture doing.

He said, "Look at it here." It grossed $625.

Mr. BALLINGER. And the salesman told you it grossed $1,200?

Mr. MYRICK. Yes; the salesman told me that. They had not had a chance to get together.

Mr. BALLINGER. No further questions.

Chairman PLOESER. Have you any further information you would like to give to the committee?

Mr. MYRICK. No; I think that covers it outside of the witnesses who can testify for themselves on this forcing of sales. That is, really our most damage out in the small stations is when we have to buy something that we know we are going to lose money on when we put it on the screen. Because the margin of profit on the profitable ones is so small we cannot take that and apply it to the nonprofit ones that they force us to buy.

Chairman PLOESER. We thank you. (Witness excused.)

TESTIMONY OF VERNON MONJAR

(The witness was duly sworn and testified as follows:)

Mr. BALLINGER. State your name.

Mr. MONJAR. Vernon Monjar.

Mr. BALLINGER. You are the owner of a theater?

Mr. MONJAR. Yes.

Mr. BALLINGER. Located where?

Mr. MONJAR. I operate a small-town theater in northwest Iowa.

Mr. BALLINGER. Whereabouts?

Mr. MONJAR. In the town of Ocheyedan.

Mr. BALLINGER. What is the name of the theater?

Mr. MONJAR. The Mound Theater.

Mr. BALLINGER. Do you have a statement you wish to make for the committee?

Mr. MONJAR. Yes. The statement I am about to make may seem rather trifling, but I assure you it is of vital importance to me as well as every independent small-town exhibitor throughout the country, of which there are 400 or better in Iowa and Nebraska.

Many times the loss of profit on certain pictures is determined by the individual drawing power of that picture, such as technicolor or star value or the story value, and many other items that can enter into that. Any exhibitor who has operated a station any length of time has a general idea what pictures will do business in his town and what

pictures will not. For instance, some towns prefer mystery pictures, some westerns, some heavy drama. Other towns they won't do anything in. If an exhibitor knows a picture is not going to do business in his town, obviously he does not want to buy it because it means he is going to lose money. Many times in these small-town operations you have to lose money. It is a constant fight to make any profit. But after all, we have to live. If you know a picture is bad, you do not want it, regardless of the number of people that you have at your theater. You have a certain fixed operating expense. Every night you open your doors it costs you so much regardless of how many people come to your theater. That is averaged out over the week and divided into tenths, one-tenth for each day and Saturday and Sunday for the rest. On Sunday it costs you three times as much to open up as it does on the midweek days.

The chief complaint I have pertains to the sales practices conducted by RKO out of Sioux Falls, S. Dak. I have one definite case in mind I would like to bring out right now. That is the picture that RKO Radio Pictures made called The Fugitive, in which appears John Ford as the producer. That is a Catholic film. My town is predominantly Protestant. Now, this is no picture for my town. It is full of considerable violence. It is all about the persecution of Catholics. I did not want the picture. So the RKO film representative came to me and offered a group of pictures. I stated I did not want The Fugitive.

He said, "All right, you do not have to take it." He writes me a deal. So, sometime later John Ford comes out with another picture, Fort Apache, a natural for my town, a good picture. I wanted it badly. So the salesman comes in, he pulls out a work sheet that contains the details of the pictures, the cost, running time, and so forth. Then they write in certain prices. We sit there and bargain on each picture. I took his work sheet and I noticed he had The Fugitive down there as well as Fort Apache and several others. I took my pencil and crossed out the picture The Fugitive. I said I did not want it. He takes his pencil and crosses off Fort Apache and says, "You cannot have that."

I said that my understanding was that it is illegal to use those practices to sell pictures. At that time he had already written down the prices for each individual picture. I said it was my understanding it is illegal to use that method. He says we are not doing a thing. He says, "If you want Fort Apache, you can have it.”

And he writes down Fort Apache, and the price of Fort Apache plus the price of The Fugitive. I am paying for the picture and leaving it lay.

I am a small cog in a big machine, but I have no strength as an individual. I have to belong to an organization to fight. So that is one reason, one big reason, I am here to testify today, because I belong to the Allied Theaters and I wanted to air this matter before this investigating committee.

Mr. BALLINGER. What is that sheet you have there?

Mr. MONJAR. This is a work sheet.

Mr. BALLINGER. May we have it for the record?

Mr. MONJAR. Yes.

Chairman PLOESER. It will be made a part of the record.