MONOPOLISTIC AND UNFAIR TRADE PRACTICES FRIDAY, OCTOBER 8, 1948 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 2 OF THE SELECT The subcommittee met in the Federal Courthouse Building, Oklahoma City, Okla., at 10 a. m., the Honorable William H. Stevenson presiding. Present: Representatives William H. Stevenson and A. S. Mike Monroney. Also present: James W. Foristel, executive director; and Willis J. Ballinger, economic counsel. Mr. STEVENSON. The committee will please come to order. Before we go into the regular work of the hearing and the formal introduction of members of the committee, I first want to introduce to you your good fellow townsman, the Representative from this district, my good friend and yours, Mike Monroney. We of the House of Representatives are very fond of Mike. He is one of the finest gentlemen in the House. As you know, he is one of the sponsors of the Reorganization Act that really got the Congress out of the doldrums. Mr. MONRONEY. Mr. Chairman, and the staff of the Small Business Committee: I am not going to impose on either you or my fellow Oklahomans with any testimony with reference to my ideas on this very important subject that you are investigating all over the country. I will be able to take up your time in Washington, when we will not have so many local witnesses. However, I do want to say that you are on the No. 1 economic problem of this Nation. The continued survival and prosperity of small business throughout this land of ours is the cornerstone of every enterprise and of our capitalistic system. If it is allowed to perish, if the burden of big business and monopoly is thrown too heavily on small business, it dies; and, when small business dies, you have lost your free-enterprise system. The Government's assistance in protecting small business against the ravages of monopolistic tendencies has long been recognized as one of our most important duties and one of the most important functions of this splendid committee, composed of men who are devoting their vacations to studying and solving this great problem. This will result in immeasurable benefit to this Nation of ours. We welcome you and appreciate your coming to Oklahoma City, where you will find the finest group of people anywhere in the world. Mr. STEVENSON. If they are like you, they are fine people; and we thank you. Now, I want you all to feel at ease. This is not going to be too formal. It is a regular hearing of a committee of the House of Representatives exactly as a hearing would be conducted in the Capitol at Washington, D. C. In other words, we sort of bring the Congress to your very doorstep instead of having you make the trip to Washington to testify. We are bringing the committee to you right here in Oklahoma City; we have visited several cities during the past month; we were at Butte, Mont.; Casper, Wyo.; Salt Lake City, Utah; Kansas City, Mo.; Omaha, Nebr.; Minneapolis, Minn.; Madison, Wis.; South Bend Ind.; and now we are here in your beautiful city. At this time I want to introduce to you the members of the staff. First, we have with us one of the official reporters of debates of the United States House of Representatives, who travels with us and takes down everything that is said. He is Mr. Frank Milberg, the gentleman sitting in front of us, one of the fastest shorthand reporters in the United States. Next, may I present Mr. James Foristel, no relative to the chief of our national defense. He is a very fine, efficient young man, and an attorney by profession, and the staff director of this committee. He directs the committee in all its activities. We also have with us Mr. Leo Cullinane, who is the publicity man for the committee. Mr. Cullinane is also an author of some note, having written stories for the Saturday Evening Post, Collier's, and I believe once in a while he gets into Esquire and perhaps the Ladies' Home Journal. The handsome man of our committee is Mr. Willis Ballinger, who is economic counsel of the committee. Mr. Ballinger marshals all of the witnesses, hears what they have to say, and then presents them as witnesses to give testimony to the committee. The chairman of the committee is Bill Stevenson, of La Crosse, Wis. With these informal introductions, I will turn the calling of the witnesses and the presentation of the testimony over to Mr. Ballinger. Mr. BALLINGER. Mr. Chairman, there are some witnesses here who I think should be sworn. Is it going to be the policy to swear all witnesses? Mr. STEVENSON. If we swear one, we will swear all of them. STATEMENT OF CHARLES E. DIERKER, ON BEHALF OF THE HOME THEATRE, OKLAHOMA CITY, OKLA. (The witness was duly sworn.) Mr. BALLINGER. Give your full name. Mr. DIERKER. Charles E. Dierker. Mr. BALLINGER. What is your business? Mr. DIERKER. I am a lawyer. Mr. BALLINGER. Representing what business? Mr. DIERKER. I am representing before the committee at the time particularly the Home Theatre, Oklahoma City, a motion-picture exhibition house. Mr. BALLINGER. Are you a former United States district attorney here? Mr. DIERKER. Yes, sir. Mr. BALLINGER. Do you have a complaint that you wish to make to the committee? Mr. DIERKER. Yes. Mr. BALLINGER. All right. Proceed with your complaint. Mr. DIERKER. Well, the difficulty, Mr. Chairman, that my client has is one that I imagine is not singular to them. In fact, when I was United States attorney here over a period of some 8 years, I was in charge of the prosecution of a case involving the Griffith chain here, in which the general picture situation became competent and relevant. As to this specific instance, my people leased the Home Theatre here, which is about three blocks north of this location. It is a littleon the edge of the business district, but it is next to the newest theater, I think, probably in the State. It is a very fine theater, but it can only be a profitable venture through the exhibition of firstrun products. Shortly after being opened, my client was able to get pretty good showings of first-run products; but, apparently, before very long, some forces began operating that made it impossible for them to get a first-run product. They were forced to go to second and third run. With that kind of set-up, the theater was not successful. About that time they came to me and I wrote letters to the various distributors. demanding that we be given a right to a reasonable amount of first-run products. As a result of that and some efforts that my client had previously made, we were able to get some first-run products. As to the concerns that are distributors, our experience has not been the same with all of them. Some of them give us some consideration, and others completely ignore us and refuse to give us any product at all. I do not know how thoroughly the committee would like to go into each individual concern and which ones we are able to, get some product from, which we are able to get considerable from, and which we are able to get none from; I do not know. Mr. STEVENSON. You have the privilege of telling anything and everything you wish. Mr. DIERKER. As to Paramount, we have never been able to get any first-run pictures at all. Mr. BALLINGER. Does Paramount own any theaters in this city? Mr. BALLINGER. Do any of the large producing companies own any theaters in this town? Mr. DIERKER. Not so far as I know. Mr. BALLINGER. They are all independents in this town? Mr. BALLINGER. Any chains here? Mr. DIERKER. Yes. There are two or three chain groups here.. The Associated Theaters and the Cooper Interests, particularly, as to first-run. As to Metro, we have been able to get two pictures recently. One of our main complaints is that recently and following the Supreme Court decision and somewhat predating that, they announced we would be permitted to bid on certain pictures. To various of these distributors; we submitted bids on a number of pictures. We were ultimately advised that we were not the successful bidder. We asked that we be permitted to know on what terms the successful bidder received the product and we were advised to the effect that that was not any of our business. I assume that pattern is familiar to the committee, too. That has been our experience and up to date in this instance, where we were bidders and were unsuccessful we have been unable to find out on what terms the picture was let. As to Metro we have had two pictures recently-A Date With Judy and Luxury Liner. Prior to that time they had been unable to get any product for over a year. Now, they say they are going to a bidding situation entirely. We understand we can submit a bid, but we have no way of knowing who the successful bidder is. The effect of the bidding has been that we must bid a tremendous amount. Really, in some instances we bid more than the traffic reasonably would bear, because they are so anxious to keep operating. Mr. BALLINGER. Don't you think that is due to the possible scarcity of films? Mr. DIERKER. No, because our competitors do not seem to have any particular shortage. Mr. BALLINGER. The committee has received a considerable amount of testimony to the effect that film production is being manipulated down and reduced in Hollywood. That has been going on for a number of years. We also learn that they have films which have been produced out there over a period of 3 years which have never been shown and that a deliberate scarcity is being created at the producing end of the line. This, of course, is causing many small motion-picture houses to bid frantically. Mr. DIERKER. Mr. Bracht, would you step up here? Mr. Bracht is manager of the theater, and I want him to supplement what I say. As to Universal, we have not been able to get any product from them on any basis. May I say that I was in error in a recent statement. Warner Bros. has some interests here. STATEMENT OF H. T. BRACHT, ON BEHALF OF HOME THEATRE, OKLAHOMA CITY, OKLA. (The witness was duly sworn.) Mr. BALLINGER. Could you tell us how many theaters there are here in Oklahoma City? Mr. BRACHT. How many theaters or first-run theaters? Mr. BALLINGER. First-, second-, and third-run. How many motionpicture houses are there in Oklahoma City? Mr. DIERKER. I cannot tell you. Mr. BRACHT. About 32. Mr. BALLINGER. How many first-run houses? Mr. BRACHT. There are five playing first-run product, and Warners is opening another house today playing B first-run. Mr. BALLINGER. How many motion-picture houses are there today, first-run, second- or third-run, in your opinion? Mr. BRACHT. Four. |