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Full text of "Post-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic policy and planning"

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POSTWAR ECONOMIC POLICY AND PLANNING 



HEARINGS 

BEFORE THE 

SPECIAL COMMITTEE ON POSTWAR ECONOMIC 
POLICY AND PLANNING 

HOUSE Oil REPRESENTATIVES 

SEVENTY-NINTH CONGRESS 

FIRST AND SECOND SESSIONS 
PURSUANT TO 

H. Res. 60 

A RESOLUTION CREATING A SPECIAL COMMITTEE 0.\ 
' POSTWAR ECONOMIC POLICY AND PLANNING 



PART 9 



DECEMBER 20, 1946 



EXPORT OF INFORMATION MEDIA, BOTH 
GOVERNMENT AND PRIVATE 



Printed for the use of the Special Committee on Postwai 
Economic Policy and Planning 




UNITED STATES 
GOVERNMENT PRINTING OFFICE 
99579 WASHINGTON : 1947 



^ 



^9,^ '9 



SPECIAL COMMITTEE ON POSTWAR ECONOMIC POLICY AND 

PLANNING 



WILLIAM M. 

JERE COOPER, Tennessee 
FRANCIS E. WALTER, Pennsylvania 
ORVILLE ZIMMERMAN, Missouri 
JERRY VOORHIS, California 
JOHN R. MURDOCK, Arizona 
WALTER A. LYNCH, New York 
THOMAS J. O'BRIEN, Illinois 
JOHN E. FOOARTY, Rhode Island 
EUGENE WORLEY, Texas 



COLMER, Mississippi, Chairman 

CHARLES L. GIFFORD, Massachusetts 
B. CARROLL REECE, Tennessee ' 
RICHARD J. WELCH, California 
CHARLES A WOLVERTON, New Jersey 
CLIFFORD R. HOPE, Kansas 
JESSE P. WOLCOTT, Michigan 
JAY LeFEVRE, New York 
SID SIMPSON, Illinois 



FRANCIS WALTER 
JOHN E. FOGARTY 



Subcommittee on Foreign Trade 

EUGENE WORLEY, Chairman 

RICHARD J. WELCH 
CHARLES A. WOLVERTON 

Marion B. Folsom, Staff Director 

William Y. Elliott, Consultant 

Winifred G. Osborne, Clerk 

Susan Alice Taylor, Secretary 



1 Resigned from Congress in 1946, 
II 



CONTENTS 



Page 
Statement of — 

Johnston, Eric, president, Motion Picture Association of America, 
presented by Air. Jack Bryson, public relations representative of the 
association 2522 

Nelson, Donald, president, Society of Independent Motion Picture 

Producers 2524 

Hulten, Cliarles, deputy to Assistant Secretary of State William 

Benton, Department of State 2525 

Begg, John M., Chief, International Motion Picture Division, Depart- 
ment of State 2534 

Golden, Nathan D., consultant for motion pictures, Department of 

Commerce ^ ' 2545 

Brown, Winthrop G., Chief, Commercial Policv Division, Department 

of State 1 2553 

O'Hara, Joyce, assistant) to Mr. Eric Johnston, president, Motion 

Picture Association 256 1 

Harmon, Francis, vice president, Motion Picture Association 2562 

Milliken, Carl E., secretary, Motion Picture Association 2583 

Mayer, Gerald, associate manager. International Department, 

Motion Picture Association ^ 2590 

EXHIBITS 





Introduced 
on page - 


Appears on 
page — 


No. 1. The motion picture on the threshold of a decisive 
decade _._ . _ . 


2568 
2583 


2594 


No. 2. Hollvwood and international understanding _ . 


2621 







POSTWAR ECONOMIC POLICY AND PLANNING 



FRIDAY, DECEMBER 20, 1946 

House of Representatives, Subcommittees 
OF the Special Committee on Postwar Economic 

Policy and Planning, 
Washington, D. C. 

The subcommittee met, pursuant to call, at 10 a. m., in room 1301, 
New House Office Building, Hon. Eugene Worley (chairman) presid- 
ing. 

Present: Representatives Worley (chairman), Walter, and Mur- 
dock. 

Also present: Dr. W. Y. Elliott, consultant. 

Mr. WoRLET. The committee will be in order. 

In order to facilitate the work of the House Special Committee on 
Postwar Economic Policy and Planning, the main committee was 
divided into several subcommittees. One of those subcommittees 
is the Committee on Foreign Trade and Shipping, which for the past 
year or more has held rather exhaustive hearings, going into practi- 
cally all phases of our foreign trade and shipping. Because of the 
press of other wartime congressional duties, the committee has not 
had an opportunity to hear the representatives of an industry which 
plays a rather important part in om* relations v/ith other countries 
abroad, namely, the motion picture industry. The pm-pose of the 
hearing today is to determine among other thmgs what om- own 
Government is doing in trying to create a favorable impression of the 
United States in the minds of other people over the world by virtue 
of radio, press, and motion pictures; what it is doing in combating 
trade restrictions abroad ; and we also want to hear the representatives 
of those engaged in the commercial phases of motion-picture dis- 
tribution abroad, namely, the motion-picture industry. 

We have been requested by Mr. Eric Johnston, the president of the 
Motion Picture Association of America, who could not be here in 
person, that a statement prepared by him be read into the record. 

At this point, if there is no objection, we will now proceed with the 
statement by Mr. Johnston. Is there someone here to read this for 
him? 

Mr. Br^son. Yes, I will be very happy to. 

Mr. WoRLEy. Will you please state your name and position? 

Mr. Br^son. Mr. Jack Bryson, public relations representative of 
the Motion Picture Association of America. 

Mr. Worlev. The committee will be glad for you to proceed, Mr. 
Bryson. 

2521 



2522 POSTWAR ECONOMIC POLICY AND PLANNING 

STATEMENT OF ERIC JOHNSTON, PRESIDENT, MOTION PICTURE 
ASSOCIATION OF AMERICA, PRESENTED BY MR. JACK BRYSON, 
PUBLIC RELATIONS REPRESENTATIVE OF THE MOTION PIC- 
TURE ASSOCIATION OF AMERICA 



Mr. Bryson. Mr. Chairman and members of the committee, and 
Dr. Elhott [reading:] 

Statement Submitted by Eric Johnston, President, Motion Picture Asso- 
ciation OF America 

I am grateful for this opportunity to submit a statement on the motion-picture 
industry for incorporation in the record of your committee. 

I am president of the Motion Picture Association of America, which consists 
of a number of leading American companies engaged in production, distribution, 
and exhibition of motion pictures. I speak only in behalf of our members. 

Ours is a young industry, as industries go, but it has a typical and traditional 
American background. Like many other great industries in the United States, 
it started on the proverl^ial shoestring. 

The men who jiioneered the industry and the men active in its affairs today are 
proud of the fact that it developed to its present size without benefit of Govern- 
ment favor or subsidy of any kind. 

Over the past half century, the motion-picture industry has had a phenomenal 
growth. In that relatively short space of time, the screen has become the greatest 
entertainment source the world has ever known. During these initial stages, 
the emphasis was largely on entertainment. 

We now realize that the scope and purposes of the motion picture have gone far 
beyond that. It has taken its place beside the press and radio as one of the great 
media for the dissemination of information and enlightenment. 

During the recent war there was no medium which surpassed the motion picture 
in its ability to bring home the true meaning of that titantic struggle to all the 
peoples of the world. It was especially effective in telling the story of America 
as the arsenal of democracy. Bur the emphasis now is on peace, not war. And 
the motion picture can play an etiually vital role. 

Because of this, it is essential that the screen must be as free as the press and 
radio to fulfill its mission. It must be free of Government fetters in its production 
and in its distribution. 

But freedom of movement is just as important as freedom of content. A screen 
penned up behind national boundaries is not free, for the freedom to move freely 
is an inseparable part of freedom of the screen. Measures which curb this flow, 
no matter how artfully contrived, abridge that freedom. 

This right of freedom of expression and communication by means of the motion 
picture is something bigger than Hollywood's desire to sell pictures. Either we 
believe in the screen as one of the great media of human communication or we 
don't. The unfettered use of this medium is beyond the bare fact of economics. 

Throughout the world there is a tremendous awakening to the power of the 
motion picture on the part of governments and peoples. That is the major 
reason why this inquiry on the part of your committee is so important. 

It is highly essential that we foster the growth and development of the American 
motion-picture industry for two major reasons: One, from a cultural standpoint, 
it is the greatest conveyor of ideas — the most revolutionary forces in the world ' 
today; two, from an economic .standpoint, it occupies an increasingly large place 
in America's domestic and foreign commerce. 

Your committee has asked us to answer this question: "What is the impor- 
tance of the foreign market to the motion-picture industry?" 

The American motion picture is geared to a world market. Although the 
American market is the largest in the world, one-third of the production cost of 
our pictures comes from abroad. 

Tlie American industry is not alone in depending for its economic health on 
foreign markets. The British industry and those in other countries are finding , 
this out. If they want to produce top-grade pictures, they need a world market 
to amortize production costs. Closing of the foreign markets would mean 
inferior pictures and fewer jobs. 



POSTWAR ECONOMIC POLICY AND PLANNING 2523 

The American film industry is thinking in terms of an expanding world market 
and not a narrowing one. Only a small percentage of the people in the world 
see motion pictures today. Actually there are millions of people who have never 
seen a picture at all. 

The industry cannot grow to its greatest usefulness and greatest service, how- 
ever, as long as there are restrictions on the interchange of pictures among 
countries. 

In the year ahead we are certain to witness new and more widespread demands 
for barriers against the freer flow of motion pictures from one country to another. 
There are many types of such restrictions, both direct and indirect. " Some are in 
existence. More are threatened. 

One type of restriction is excessive taxation on imported films. If the taxes 
are too high, business becomes unprofitable and the market dries up. The same 
result follows from excessive tariff or customs barriers. Blocked currency also 
prevents the recovery of film assets. 

Another form of restriction is the imposition of quota laws, which guarantee a 
percentage of playing time for domestic films. Quota restrictions are bad in 
principle. But where they are used reasonably, to help an infant industry or a 
war-weakened industry to get on its feet, an exception can be made. For in- 
stance, the British industry today is guaranteed approximately one-fifth of playing 
time in British theaters. But the ultimate goal should be to lower, not to raise, 
these barriers. 

The most pernicious type of restriction is the complete ban on the importation 
of foreign films. Nazi Germany adopted this practice even before the start of the 
recent World War. Unfortunately, there are too many countries today in which 
foreign pictures are not permitted to circulate. 

This form of restriction, dishonest in concept and purpose, too often arises 
from the fact that American pictures inescapably reflect our way of life. Some 
foreign critics fear our American system. Consequently, under one guise or 
another, they would keep out American pictures. They prefer to see the screen 
used as a weapon of ideological warfare. 

Whatever their form, singly or in combination, or whatever their purpose, it is 
quite obvious the target of them all at the moment is the American film because 
it reaches around the world and because, as of today, it enjoj'S a majority of 
playing time on the world's screens. 

Your committee wants to know what the ITnited States Government may 
legitimately do to assist the motion-picture industry abroad. 

The best possible course is to continue the present policy of the State Depart- 
ment. As you know, this policy is free of any party tag or label. It is based 
wholly on the traditional American belief in freedom of expression and communi- 
cation, and is designed to remove and prevent discriminatory restrictions. This 
fine cooperation was exemplified in the Byrnes-Blum French film accord and in 
other forms of assistance under the direction of William H. Cla.yton, Under 
Secretary of State for Economic Affairs. 

Your committee desires to know what our industry is doing to promote Ameri- 
can motion-picture films abroad. We are doing several things. We recognize 
that it is in the best interests of our country and the film industry to exercise 
prudent selectivity of pictures going abroad. We are doing something about it. 
Our association, acting in an advisory capacity, is assisting in the selection of 
films to be exported. Through use of self-regulation, we believe that we can be 
more discriminating in the type of pictures sent to other countries. 

We are also practicing selectivity in another way by voluntarily limiting the 
number of pictures we are exporting to several countries. And we are sending 
trained men to key spots throughout the world to help expand markets for 
American films and to report on developments affecting our industry. 

Recently, I spent a month in London conferring with government officials 
and representatives of the British film industry on how to promote the freer 
interchange of pictures and how to safeguard the freedom of the screen itself. 
While our two systems are competitive, they are also complementary. We are 
both interested in a constantly expanding world market. 

Your committee has asked us to comment on the type of film which would 
give foreigners the best idea of America. 

The answer is that the most effective type is the film which tells a good story, 
which entertains, which informs or enlightens. It would be a grave blunder to 
use the screen deliberately as a weapon of political propaganda. Such propaganda 
is always transparent; it is universally resented, and it is always self-defeating. 



2524 POSTWAR ECONOMIC POLICY AND PLANNING 

The American press services have established a reputation for fairness and 
accuracy throughout the vi'orld by the simple formula of telling the truth. This 
impartiality is the hallmark of American news services; it has paid rich dividends 
in confidence not only at home but abroad as well. 

The sane way for the motion picture is to depict the culture of America as it is, 
without distorting either its virtues or its faults. Foreign audiences are far more 
impressed by the fact that Americans are free to criticize themselves or their 
government than they are by any amount of self-praise. 

I realize that the ideal has not always been attained. Frankly, there is room 
for improvement. I have outlined the efforts which our association is making to 
keep a watchful eye on the pictures sent abroad. 

But in our desire to guard against undesirable pictures going abroad, we must 
resist any curbs which would cramp the screen's freedom. Inevitably, such a 
course would do irreparable harm. Whenever censorship of that nature has been 
attempted, the result has alwaj's been harmful. It is not in the Ainerican tra- 
dition. 

The American way, based on fairness and truth-telling and freedom from 
official interference, has achieved remarkable results in the fields of press, radio, 
and motion pictures. We must retain the cornerstones on which these great 
services have been built. 

Like all successful industries we are constantly striving to turn out a better 
product so th^t we shall continue to deserve the support of the world public. 
That's our responsibility, that's our ambition. We are striving to meet this goal 
in full faith and with full effort. 

Mr. Chairman, I appreciate and thank you, on behalf of Mr. 
Johnston, for accepting that statement. 

Mr. WoRLEY. I wish you would express to Mr. Johnston our regret 
that circumstances prevented his being here. 

Mr. Bryson. I would be very happy to do so. 

Mr. Worley. The committee has received a telegram from Mr. 
Donald Nelson, president of the Society of Independent Motion 
Picture Producers, who also was unable to be present. It will be 
inserted in the record at this point, 

Hollywood, Calif., December 21, 1946. 
Hon. Eugene Worley, 

Care of Calmer Committee, 

House of Representatives, Washington, D. C: 

Thank you for advising me about Colmer Committee. Following is my state- 
ment: American Motion Picture Industry which Yankee ingenuity and hard 
work has made envy of world is being seriously threatened in hope of capturing 
our world. Following artificial restrictions are being applied to showing of 
American pictures abroad by private and government monopolies operating on a 
"If you can't win from the other fellow tie his feet so he can't run." Principly, 
as president of Society of Independent Motion Picture Producers, I would like to 
call attention of committee to following facts: On merit alone American motion 
picture industry increased its following before the war in one foreign country after 
another so that in 1940 one-third of our entire screen income came from abroad. 
This in turn enabled us to raise our standards and produce pictures of quality 
which found favor not only in this country but abroad. 

We are still doing this today, but under most difficult conditions. Costs of 
motion pictures, due to higher wages for labor and higher prices for materials and 
equipment, have been rising steadily. Today they are 60 to 70 percent higher 
than in 1940, with no promise of relief to avert serious crisis in industry — a 
crisis which is certain to bring about downward revision of production standards. 
We have been counting on restoration of our prewar foreign trade, if not entirely, 
then to a degree compatible with increasing competition from native pictures in 
England, France, Russia, and other countries. Such competition we welcome. 
It is healthy and invigorating, so long as it remains free. What we are confronted 
with, however, is not free competition. Government monopolies, or private 
interests working through such monopolies, are imposing unfair and artificial 
restrictions on American films in hope they can hold us down until they themselves 
can gain monopoly over world producers. We believe motion-picture theaters of 
the world as well as our own in America should be wide open to all films on merit. 
We believe film exhibition should be conducted without restrictions from monopo- 



POSTWAR ECONOMIC POLICY AND PLANNING 2525 

lies either at home or abroad. And we believe United States Government 
should use every influence that does not conflict with real meaning of free enter- 
prise to oppose and eliminate such artificial restrictions, wherever they are found. 
There are two basic reasons for our beliefs. One, there is no better way to help 
people of Europe and Asia understand American system which has brought 
greatest happiness in world to greatest number of people than by keeping screens 
of world free. This understanding of America I regard as first requisite of world 
peace. Two, we agree with British motion-picture industry and British Govern- 
ment that trade follows motion pictures into world markets — fact of which I am 
certain your committee is already aware of. One thing independent motion- 
picture producers are certain we cannot help build a better world to live in by 
having our trade tied down with artificial restrictions. 

We will be glad to furnish detailed study of how our pictures are affected by 
monopolistic practices abroad if committee desires. 

Following is list of society members: Constance Bennett Productions; Benedict 
Bogeaus Productions; Sidney Buchman Productions; Cagney Productions, Inc.: 
California Picture Corp.; Charles Chaplin Studios; Walt Disney Productions, 
Inc.; Bing Crosby Enterprises, Inc.; Golden Pictures, Inc. (Edward A. Golden); 
Samuel Goldwyn Productions, Inc.; Sol Lesser Productions, Inc.; Majestic Pro- 
ductions, Inc., (Jules Levey); Nero Films, Inc. (Seymour Nebenzal) ; Comet 
Productions, Inc. (Mary Pickford) ; Rainbow Productions, Inc.; Charles R. 
Rogers Enterprises; Hal Roach Productions; Edward Small Productiosn, Inc.; 
Andrew Stone Enterprises, Inc.; Story Productions, Inc. fArmand Deutsch and 
Hal Home); Hunt Stromberg Productions, Inc.; Vanguard Films, Inc. (David O. 
Selznick); United Artist Productions; Walter Wanger. 

Donald M. Nelsqn, 
President, Society of Independent Motion Picture Producers. 

Mr. WoELEY. We have also asked Mr. I. E. Chadwick, president 
of the Independent Motion Picture Producers' Association to present 
a statement, but apparently illness has prevented his doing; so. 

Is the representative of the State Department here — Mr. Hulten? 

Mr. Hulten. Yes, sir. 

Mr. WoRLEY. Would you please state your name and position? 

Mr. Hulten. I am Charles Hulten, deputy to William Benton. 

STATEMENT OF CHARLES HULTEN, DEPUTY TO ASSISTANT 
SECRETARY OF STATE WILLIAM BENTON, DEPARTMENT OF 
STATE 

Mr. Hulten. Mr. Chairman and members of the committee, and 
Dr. Elliott, it is my privilege to appear before this committee as 
deputy to Mr. William Benton, Assistant Secretary of State, who is in 
charge of the Department's international information and cultural 
programs. Mr. Benton would have been happy to appear himself, 
but unfortunately he is on the high seas returning from a recent meeting 
of the United Nations Educational, Scientific, and Cultural Organiza- 
tion in Paris. 

Mr. Benton has been working closely with Eric Johnston, who is his 
long-time personal friend, on problems relating to international dis- 
tribution of motion pictures. As you gentlemen of this committee 
know, Mr. Benton was called in by "the Department to assume charge 
of the consolidated wartime programs of the Office of War Informa- 
tion and the Office of Inter-American Affairs. 

His approach to these problems, as he reviewed them during his 
first months in oflSce, was to eliminate as many of the wartime controls 
and Government activities as possible. Both OWI and 01 AA had 
motion-picture programs. OWI, with its emphasis on psychological 
warfare, had developed a program of 35-mm. film production designed 



2526 POSTWAR ECOXOMIC POLICY AND PLANNING 

for theatrical release in enemy and occupied countries when these 
became accessible, and in neutral and allied countries. The OIAA, 
operating exclusively in the Western Hemisphere, emphasized 16-mm. 
films for nontheatrical distribution. Both agencies had programs for 
consulting with Hollywood producers in the national interest. OWI 
had a Hollywood staff to which the industry referred problems in 
overseas production and distribution. OIAA operated through an 
industry-created group called the Motion Picture Society for the 
Americas. 

Both Elmer Davis and Nelson Rockefeller havie testified on many 
occasions to the cooperative efforts of the industry during the war. 

Mr. Benton faced the necessity for reducing the large wartime 
information programs by approximately 75 percent. Economy was 
not the sole objective. Wartime conditions had required that the 
Government, in the person of the armed forces, control international 
communications and transportation. In developing the Depart- 
ment's peacetime information and cultural program, Mr. Benton 
placed primary emphasis on the restoration of normal private and 
commercial intercourse between nations. The Department's pro- 
gram was designed to be facilitative and supplementary. In other 
words, the Department, through Mr. Benton, proposed that America's 
story be told abroad principally tlirough its privately owned and 
wholly independent press associations, magazines, books, motion 
pictures, and similar media, as it had been told before the war. 

In line with the increased interest in America, the Department 
stood ready to assist this flow of material in every way that it legiti- 
mately could. In certain fields of activity, and in certain areas of the 
world, private or commercial groups have found it difficult or impos- 
sible to operate. To fill these gaps, the Department undertook a 
modest program of supplementation. 

The Congress reviewed the program earlier this year and provided 
the appropriations necessary to carry it out. 

In the motion-picture field, the supplementation consisted princi- 
pally of the creation or adaptation of 16-millim.eter documentary 
films, dubbed in foreign languages, illustrating important aspects of 
American life or policy. In the change-over from, war conditions, the 
motion-picture industry cooperatively took over the United News 
Reel, which had been paid for by the Government through the OWI 
during the war. The OWI staff in Hollywood was disbanded. Dis- 
cussions were held with the industry to determine whether the industry 
itself would assume the consultative function carried on by the Motion 
Picture Society for the Americas. 

It was my pleasure to go abroad this summer to look into all aspects 
of the Department's program, particularly in eastern Europe and the 
Balkans. At every place I stopped the personnel of our missions and 
many friendly nationals of the countries themselves, emphasized that 
a continued flow of American motion pictures was important. Ex- 
change restrictions, problem.s growing out of the nationalization of 
industry, and war-disturbed transport, all cut into this flow. It is 
the Department's hope that the motion-picture industry will soon 
find it possible again to bring its product to all of the countries of the 
world. 

It is the policy of the Department to assist the industry without 
attempting to distinguish between what, for one reason or another, 



POSTWAR EQONOMIC POLICY AND PLANNING 2527 

it might consider bad or good films, useful or harmful films. I know 
I can say for Mr. Benton that we are looking to the industry itself to 
develop its machinery for self-criticism and self-control. We have 
been encouraged by the willingness expressed by certain leaders of 
the industry to eliminate many of the petty annoyances and distorted 
representations of American life which have occurred in the past. 

The Department stands ready in a purely advisory capacity to 
assist the industry in any way that the industry chooses to call upon it. 

Thank you. 

Mr. Walter. Mr. Chairman, may I ask a question? 

Mr. WoRLEY. Mr. Walter. 

Mr. Walter. Did you find, in your visit abroad, that there were 
any countries in which the nationals of those countries were prevented 
from seeing American pictures? 

Mr. HuLTEN. I would say that the area that I visited, sir, was such 
that there were comparatively few American pictures being shown at 
the present time because of the difficulty of exchange and other com- 
mercial arrangements. So that it wasn't a matter of preventing 
people from attending them; the pictures just weren't there to attend. 

Mr. W ALTER. I have been informed that in some countries American 
movies are not allowed to be shown for very obvious reasons, and I 
am just wondering how the attitude of those countries could be 
changed so that the people could get a real picture of what America is. 

Mr. HuLTEN. I know of no country, although I haven't checked 
on this in the last few days, in which there is an absolute ban against 
the showing of American pictures. There are, of course, a consider- 
able number of countries at the present time where the lack o* com- 
mercial arrangeiuents to get them in, prevents them from being 
shown. 

Mr. Walter. There has been no arrangement made to show Amer- 
ican pictures? 

Mr. HuLTEN. That is right. 

Mr. Walter. Wouldn't that be a simple way to prevent their 
being shown? 

Mr. HuLTEN. Conceivably. 

Mr. Walter. Yes. 

Mr. WoRLEY. Dr. Elliott, do you have any questions? 

Dr. Elliott. Just a supplementary question to that one. 

If film monopolies are set up in these countries, Mr. Hulten, that 
have, in effect, the power to display whatever movies they choose, 
to supplement the question that has already been asked, in effect that 
constitutes, at the minimum, political censorship of the pictures that 
are shown; and this is, I believe, true in the case of not only Russia 
but all the satellite countries, is that not true? 

Mr. Hulten. That depends on the definition of "satellite 
countries." 

Dr. Elliott. I would not, for instance, consider Hungary or 
Czechoslovakia in all respects satellite countries, but it would be 
true of Bulgaria, Yugoslavia, and Rumania and I suppose Poland. 

Mr. Hulten. Mr. Begg is here, representing our motion picture 
division, and he is much more familiar with the situation in individual 
countries than I. In many cases, pictures have been shown, but I 
quite agree with Dr. Elliott that a national monopoly is an effective 
way of preventing or regulating distribution. There have been, of 



2528 POSTWAR ECONOMIC POLICY AND PLANNING 

course, any number of negotiations with these monopolies in the 
hope that American pictures could be distributed either despite them 
or through them. 

Dr. Elliott. Might it not have the further effect of permitting 
the selection of American films ofl'ered, of a type that would be very 
deleterious to our own national interest? That is, they might well 
show the type of films that would represent this country in a most 
unfavorable light, and refuse to accept the run-of-the-mill pictures 
of commercial distril)utioii. 

Mr. HuLTEN. I think you can fairly say that national monopolies 
may be put to the interest of the State in many ways; yes, sir. 

Dr. Elliott. It would be interesting if titles could be furnished of 
the pictures that have been shown in Russia in the past year and a 
half or two years, since the end of the war, say, in that respect, just 
for the record. 

Mr. HuLTEN. The Commercial Policy Division in the Department 
would have more accurate information on what has been shown. It 
was my understanding that Ambassador Smith has been working 
hard to get as full a distribution of American pictures as possible, but 
that the distribution has been relatively small up to this point. 

Dr. Elliott. And very carefully selected? 

Mr. HuLTEN. Yes, I would say that that is correct. 

Dr. Elliott. Either films that have to do with Never-Never Land 
or nothing very contemporary, or films that I won't name but that 
show a rather seamy side of American life. 

Mr. HuLTEN. I am sorry, without having the titles of the films 
which have been shown, I coiddn't confirm that. 

Dr. Elliott. It might be well to get the titles, also, of the films 
that have been shown, if you care to have it, Mr. Chairman. 

Mr. WoRLEY. Could you provide the committee with that infor- 
mation? It will be most helpful. 

Mr. HuLTEN. I would be glad to, sir. (See p. 139.) 

Mr. AluRDOCK. Mr. Chairman. 

Mr. WoRLEY. .Mr. Murdock. 

]\fr. Murdock. Even though that is a possibility — and we all, I 
think, recognize that it is a possibility that a distorted picture, adverse 
to America's interest, could be shown by careful selection on the other 
side of the ocean — you wouldn't advocate any sort of censorship ex- 
cepting that which is imposed by the industry itself? 

Mr. Hulten. That is correct. 

Mr. Murdock. We would simply have to take our chances on fur- 
nishing the world with the run-of-the-mill, typical, average film that 
is shown in this country, with the hope that they will take all and not 
select to our disadvantage? 

Mr. Hulten. We feel the picture of America is a picture of many 
aspects and many sides, and we feel that on the average, if we can get 
the pictures in, the result will be more than favorable. 

^^r. WoRLEY. Does your Department have any control over radio 
or press propaganda? 

Mr. Hulten. Control over it? We conduct the Government's in- 
ternational programs in both radio and press, yes, sir. 

]VIr. WoRLEY. Are we beaming any or many radio programs to for- 
eign countries now? 

Mr. Hulten. Yes, sir, we are producing about 57 hours a day in 
some 24 languages. Those programs are created by employees of the 



POSTWAR ECONOMIC POLICY AND PLANNING 2529 

Department and are transmitted over transmitters which are under 
the control of the Department. 

Mr. WoRLEY. Government-owned transmitters? 

Mr. HuLTEN. The Government owns approximately two-thirds of 
the transmitters, and leases the rest. It increased the number of 
short-wave transmitters which were available, which was very small 
before the war, for purpo^s of psychological warfare and information 
dm'ing the war, expanding the short-wave plant considerably. 

Mr. WoRLEY. You found that very valuable during the war? 

Mr. HuLTEN. We found it very valuable during the war, and we 
have every evidence that it continues to be very valuable. 

Mr. WoRLEY. Could you give us some idea of the type of the average 
broadcast? 

Mr. HuLTEN. There are many types of broadcasts. I would say 
that the typical type of broadcast would include a very brief period 
of news about America, of particular interest to the country to which 
it is beamed and in the language of the country; some commentary, 
attempting to make events understandable to the nationals of the 
country addressed, which includes a rather generous amount of 
editorial reaction obtained from the American press on activities or 
events of interest to that country; and an effort is also made to give 
some picture of American life that is significant to these people, such 
as the development of our industry, or the American home or the 
American Government, or something which makes America more 
understandable to these countries. 

Mr. WoRLEY. On that point, and just for illustration, do we have 
any programs directed toward Russia? 

Mr. HuLTEN. Not at the present time, sir. 

Mr. WoRLEY. Why not? 

Mr. HuLTEN. Up until last Sunday, as a matter of fact, we had no 
radio facilities which were capable of getting a radio program into 
Russia consistently. 

Mr. WoRLBY. Do the Russian people own radio sets? 

Mr. HuLiEN. During the war the radio sets in Russia, of course, 
were commandeered, as I understand it. Since that time the radio 
sets have been returned, and there have been quite an additional 
number brought into Russia. The 5-year plan now in progress calls 
for a rather expanded production of radio sets, I'unning from about 
350,000 the first year to nine-hundred-thousands-odd during the latter 
years. The facilities I was talking about, however, are the transmis- 
sion facilities. We have never been able, because of certain propaga- 
tion paths, to effectively reach that part of the world. On Sunday, 
as the press has indicated, we opened three or four, I believe it was — 
one we are using part-time — rather powerful short-wave transmitters 
in Munich, Germany, in the American-occupied zone. 

Mr. WoRLEY. Will that get tlu-ough the "iron curtain"? 

Mr. HuLTEN. It is intended to reach those areas. 

Mr. WoRLEY. Do you know of any restrictions against the average 
Russian citizen which would prohibit his tuning in on those short-wave 
broadcasts? 

Mr. HuLTEN. No, sir. The British, some 6 months to a year ago, 

began broadcasts to Russia. I have talked, within the last month, 

to Yvone Kirkpatrick, who is Under Secretary of State for the British 

Foreign OfRce in charge of this activity. His evidence seems to oe that 

• there is considerable listening, and very little effort made to prevent it. 



2530 



POSTWAR ECONOMIC POLICY AND PLANNING 



Mr. WoRLEY. Ai-e there any foreign countries sending short-wave 
radio programs to the United States? 

Mr. HuLTEN. Yes, sir. I forget the exact number, but there are 
some 35 or 40, inchiding, of course, Soviet Russia itself. 

November 20, 194G. 

Short-wave broadcasts beamed to th? United States 

The following (provided by the Foreign Broadcast Information Service) is a 
list of countries and transmitting times of their broadcasts beamed to the United 
States : 



Country 


Hours 


Minutes 


Language 


Remarks 






10 


English 

Czech, Slovakian, 

Engli.sh. 
English, French, 

Spanish. 

Finnish, English 

French, English... •-._ 
Portuguese 


Anglo-American service. 




1 
17 




Great Britain 


15 

45 
45 
30 

55 

55 
55 

15 

5 


North American service. 


Finland 




France 










Sweden 


English, Swedish 

do 


To North America and 






Europe. 
To North America. 


Switzerland 


3 

3 

2 


English and Swiss 

languages. 
English ... 






To North America and 


publics. 

Belpian Congo (Leopold ville). 
French Equatorial Africa 
(Brazzaville). 


do..... 

do 


Great Britain. 
To North America. 


15 
30 


EngHsh, French, Por- 
tuguese, Spanish. 
English 


To North, Central, and 
South America. 




English, Cantonese, 

Mandarin. 
Spanish, Portuguese, 

French, English. 
Various languages 




Argentina (Ministry «f In- 
formation) . 

Ecuador ' (Voice of the 
Andes). 


45 

(-) 


To abroad. 


(2) 


To the Americas and the 
world. 



' Operated by the World Radio Missionary Fellowship, Inc. Most programs are of a religious nature. 
» Throughout the day. 

Since some of the broadcasts are not announced as beamed only to the United States, it was deemed 
advisable to mention which other countries are included. 

The amount of shortwave programing is growing as countries 
resume activity after occupation or inaugurate operations in this 
relatively new medium. 

Mr. WoRLEY. Could you give us some idea as to what kind of 
program other countries are sending our way? 

Mr. HuLTEN. No, sir. We don't worry about it very much. 
They make every effort, as we do, to explain their point of view on 
certain events. I would say that was the principal effort. We 
know, of course, that there is a continuous stream of officially inter- 
preted news and opinion sent to the United States. 

Mr. WoRLEY. Getting back to the type of program that we send, 
you say you try to make each one of interest to a particular country. 

Mr. HuLTEN. Yes, sir. 

Mr. WoRLEY. Could you give us an example of that? Using 
Russia as an example, would news of a strike over here be of particular 
interest to the Russian people? 

Mr. HuLTEN. I think a strilve would be of very great interest to 
Russia. There is an impression over there that American labor is 
not free and has no freedom of action. There would also perhaps be 
a misunderstanding as to what the strike meant in terms of the 



POSTWAR ECONOMIC POLICY AND PLANNING 2531 

national economy. It might be described as an incipient revolution. 
To put that strike in its perspective in the national economy, what it 
is about, what the strikers get in the way of wages, and what they are 
striking for, and what the Government is doing in connection with 
the strike, I think is a matter of putting it in perspective in the minds 
of people who may not otherwise be able to understand it. We make 
no effort to portray a Pollyannaish picture of America. That would 
be very difficult and inaccurate. 

Mr. WoRLEY. Do you stick pretty close to the truth? 

Mr. HuLTEN. Yes, sir. We have a committee of the Ameiican 
Society of Newspapers, a very distinguished committee 

Mr. WoRLEY. 1 mean as distinguished from some of the programs 
that come our way, that are often sugar-coated with propaganda. 

Mr. HuLTEN. During the war it was a definite policy on our short- 
wave programs to stick to the truth. We found that by tellmg the 
truth we gained an audience which depended upon us for the truth. 
We certainly have not departed from that. And as I say, a com- 
mittee of the American Society of Newspapers just completed a 
thorough-going review of our programs, and said they could find no 
distortions or untruths or propaganda in the evil sense. 

Mr. WoRLEY. One of the best ways to combat these foreign "isms" 
that are always trying to get a foothold over here is to simply show the 
world how sickly their "isms" are compared witn our own American 
system; how puny they look in comparison. Do you agree with that? 

Mr. HuLTEN. I would agree with that principle. It doesn't fall 
within our province of operation. We operate exclusively overseas. 

Mr. WoRLEY. Is any effort made to counteract the propaganda sent 
out by Great Britain or Russia or any other foreign countries? In 
other words, are we on the defensive or offensive? 

Mr. HuLTEN. We make no effort to take any notice of any direct 
statements by anybody else. 

Mr. WoRLEY. You don't monitor any of the radio programs coming 
this way? 

Mr. HuLTEN. They are monitored for us by the National Intelli- 
gence Authority, yes, sir, but we don't say that "Rusisia yesterday 

said ," or anything like that. We tell the American story in 

its perspective. We have plenty of evidence that our story as told by 
someone else is rarely the full story; quite the opposite, sometimes. 
So that it is quite necessary that we deal with certain important 
events ourselves, ratlier than let somebody else deal with them for us. 

Mr. WoRLEY. What about press releases or dispatches, do you send 
out of any of those? 

Mr. HuLTEN. Yes; we do. We have a rather complete radio bulle- 
tin service which has existed in the Department of State for over 10 
years now, which has been recently reorganized by Mr. Benton. 
That service leaves to the private press associations the so-called spot 
or general news. We transmit, however, full copies of texts of the 
President, the Secretary of State, important pronouncements of con- 
gressional leaders, on things of interest to the countries; and then it 
is edited by embassy staffs in the countries themselves, in most cases 
translated into the language of that country, and made available to 
the American press associations, to the foreign press associations, to 
the newspapers, and to the leaders of the country, so that they will 
understand fully the background of significant news, rather than 



2532 POSTWAR ECONOMIC POLICY AND PLANNING 

getting the rather sketchy report which heretofore they have been 
able to get because of the restrictive cable tolls, which have cut down 
stories and tended to emphasize only the more sensational aspects of 
the story. 

Mr. WoRLEY. Who receives that information? 

Mr. HuLTEN. You mean abroad? 

Mr. WoRLEY. Yes. 

Mr. HuLTEN. It is radioed abroad and is taken off the air by 
operators in our principal missions and then is translated by a staff 
attached to the Embassy and distributed by them. 

Mr. WoRLEY. In regard to those news digests of the types you have 
just described, they don't go generally to the people of a given country, 
do they? 

Mr. HuLTEN. No, sir, they do not. 

Mr. WoRLEY. Just to our own nationals 

Mr. HuLTEN. Not to our own nationals, no, sir. They are designed 
for the prople of that country and arc translated into the language of 
that country. There is a part of the bulletin transmission which is 
designed to keep our own mission staffs abreast on general news 
developments in this country, and general opinion developments in 
this country. We call that an FYI portion — "for your information" 
portion. It is not for distribution. The distribution of the part of 
the bulletin which goes out in the country is principally devoted to 
full texts or digests of news of Government origin, and is designed 
for distribution to the nationals of that country, either through 
American chamiels, if a press association operates in the country, or 
through the news channels of the country itself. It is a rather small 
distribution in most cases, but it is designed to reach the mass media 
and opinion leaders of that country. 

Mr. WoRLEY. Getting back to the radio programs, if we were to 
withdraw our own activities in that respect, we would have no way, 
so far as the air waves are concerned, to combat any of the propaganda 
which other countries are transmitting, would we? Do you believe 
it to be a pretty important part of our international program? 

Mr. HuLTEN. I think that everybody in the Department, from, the 
Secretary on down, is fully convinced of that. It is important — I 
mentioned the Munich transmitters before — it is important that we 
have a coordinated relay system most effectively to use the facilities; 
the number of frequencies available is restricted, and it is our point of 
view — as a matter of fact I think I might add that short-wave radio has 
never been commercially profitable to the licensees — I think it is the 
view of the Ucensees as a whole that Government will have to do the 
job, or at least subsidize it, in one way or another. And I think it is 
highly important that it be done, and done right. 

Mr. WoRLEi'. You don't suppose we could carry commercial ad- 
vertising to pay for it, do you? 

Mr. HuiTEN. No, sir. There were a few cases before the war of 
commercial advertising by short wave to Latin- American countries, 
but it tended to concentrate attention on the potentially profitable 
commercial areas of the world. Countries of intense importance to 
our foreign relations were skipped over. And still short-wave never 
even came close to paying for itself. 

Dr. Elliott. Is an effort being made to utilize the facilities of 
universities and educational institutions, such as used to be made, 



POSTWAR ECONOMIC POLICY AND PLANNING 2533 

I know, through WRUL and WRUR, to assist m this program of the 
Department of State? 

Mr. HuLTEN. Yes, sir ; it is the Department's poUcy to use programs, 
wherever developed, which would be useful abroad. Every effort is 
made to get material from American educational leaders. We have at 
least two examples in what we call the American Kadio University of 
the Air, which is rebroadcast in Italy and in Poland. It is rather an 
intellectual radio experiment which has gone over very well. In most 
cases the radio performers are either members of faculties or leaders in 
pubhc life, or they prepare the scripts and somebody else voices them. 

Dr. Elliott. Mr. Hulten, I understand, if I correctly understood 
you, that in spite of the fact that some nations rather freely charge us 
with failing to carry out agreements and wrong motives, both as a 
nation and naming individuals here, it is rather below our dignity to 
answer these charges by making any counter charges; is that correct? 

Mr. Hulten. To answer them directly; yes, sir. 

Dr. Elliott. In other words, we don't give our version of what 
Russia's failure to fulfill political agreements means? Do we just 
ignore it? 

Mr. Hulten. YCe don't engage in any back-fence sniping. Our 
technique is not that of the debate. Our policy is to positively pre- 
sent the American point of view. If there is a diplomatic note, for 
instance, which is relative to a suljject, we see that it is given the 
widest type of currency in the country to which it is directed. 

Dr. Elliott. I am thinking specifically of an instance like the long, 
drawn-out controversy over the Danube, for instance. Was an effort 
made to show what the Russian monopoly of river boats on the 
Danube meant, or anything of that kind, and what its control of navi- 
gation meant? 

Mr. Hulten. We certainly made every efl'ort to tell what our 
position was on freedom of navigation on the Danube. 

Dr. Elliott. But we are reluctant to mention other countries by 
name? 

Air. Hulten. Oh, no; we would mention other countries by name. 
We just don't engage in any 

Mr. WoRLEY. In politics, you call it ''mud slinging." You don't 
engage in that? 

Mr. Hulten. That is right. I think the American point of view 
on that was adequately expressed on the Danube issue. And, of 
course, we broadcast the UN debates on the subject, too. 

Mr. WoRLEY. Your Department also has to do with distribution 
abroad of motion-picture films, does it not? 

Mr. Hulten. Yes, sir. 

Mr. W ORLEY. Could you give us any idea of how many films you 
have now for distribution? 

Mr. Hulten. I would prefer to have Mr. Begg answer that ques- 
tion; he is prepared to do that. 

Mr. WoRLEY. Mr. Begg, will you come forward, please? 

Would you state your name for the record? 

Mr. Begg. John M. Begg, Chief of the Internationa] Motion 
Picture Division of the Department of State. 



99579—47 — pt. 9- 



2534 POSTWAR ECONOMIC POLICY AND PLANNING 

STATEMENT OF JOHN M. BEGG, CHIEF, INTERNATIONAL MOTION 
PICTURE DIVISION, DEPARTMENT OF STATE 

Mr. WoRLEY. Could you give the committoe any i(l(>a of how many 
motion-picture films your Department now has for distribution 
abroad? 

Mr. Begg. Our Division has for distribution abroad the films that 
were taken over from the Office of War Information and from the 
Office of Inter-American Affairs, as well as new ones that we have 
been securing during the past year. The exact number I am not 
acquainted with at the moment, because I have just returned from 
4 months abroad. However, I can say that there were about 50 
films that we took over from the Office of War Information, and some 
200 that we took over from the Office of Inter- American Affairs; and 
we ourselves have been developing between 75 and 100 during the 
last year. 

Mr. WoRLEY. Are those 16 or 35 millimeters, or both? 

Mr. Begg. Those are 16-millimoter films. We are using primarily 
16-millimeter films through nonthciilrical channels. We do have 35- 
millimeter films made by the OWI, but we are reducing them to 16 
millimeters and using them in that way. 

Mr. WoRLEY. What are you doing with those films now, Mr. Begg? 

Mr. Begg. Those films are now being used abroad through our 
missions, through the United States Information Service offices in 
our missions; they are being used through all non theatrical channels 
that we can secure for their distribution. Those channels are civic, 
industrial, educational, and professional channels. We do some dis- 
tribution ourselves in the sense of sending some of our projectionists 
out to show films on occasion. But by and large it is a question of 
making agreements with local organizations for the distribution of the 
films. 

In Mexico, for example, the Government is cooperating very closely 
through the Department of Education in the use of our films. 

Mr. Worley. Why are they doing that, Mr. Begg? Do they find 
these films of interest or of assistance, or what is the reason? 

Mr. Begg. They find them of great interest and of assistance. 
There is a feeling that I found particularly during my trip to Europe, 
that the people want to know what the United States is, and what it 
stands for. There is a tremendous development of interest, not only 
among the leaders of the country on international questions but among 
the students. I visited one university, Utrecht, in Holland, the 
Netherlands, where the students told me themselves that before the 
war they were not particularly interested in what was going on out- 
side of their country, but today it meant everything to them, and 
they wanted to see what America was like. They not only want to 
see what America is like from the factual point of view — in other 
words, what we have constructed, what we look like, what our country 
looks lilce — but they want to know what we stand for. 

So our films are being designed more anfl more to tell them not 
only the picture story of the United States, but some of the processes 
that have led up to what we are today. 

Air. Worley. Do you have any films other than what are called 
documentary films? 

Mr. Begg. No; our films are confined to the information, docu- 
mentary type of film. 



POSTWAR ECONOMIC POLICY AND PLANNING 2535 

Mr. WoRLEY. You have no films which have fiction in them? 

Mr. Begg. No. 

Mr. WoRLEY. Your story is simply a revelation of facts? 

Mr. Begg. Yes. 

Mr. WoRLEY. Could you give us some idea of a typical film that 
you distribute? 

Mr. Begg. Yes. We are at the moment completing a film on the 
rural nurse, another one on the county agent, one on country doctor, 
one on Philippine independence, another one on women voting in 
this country. We have had films very successfully used already, such 
as Tuesday in November, showing how we vote here. We have The 
Capital Story on the life of a Government worker. We have a picture 
on the Library of Congress; another very successful one on TVA, 
and so forth — that type of film. 

Mr. WoRLEY. Could you provide the committee with a list of, say, 
a couple of dozen titles? 

Mr. Begg. I should be very glad to. 

Mr. Worley. By the way, Mr. Hulten, would you mind providing 
the committee with, say, a program for an average week of your 
radio broadcasts? 

Mr. Hulten. You would like them in English? 

Mr. Worley. Oh, yes; if you please. 

You say Mr. Begg, you have just come back from 4 months over- 
seas? 

Mr. Begg. Yes. 

Mr. Worley. On the one hand, it seems the State Department is 
trying to portray a true picture of the life of the United States and 
of its people and habits and customs and Government. Did you 
find any evidence or any impressions, in the minds of people abroad, 
which might not be — well, I will put it this way — which, based on 
commercial films they have seen, conflicted with the story you were 
trying to tell them? In other words, did they believe the stories or 
the pictures that the State Department is showing, or did they attach 
more importance and significance to commercial films? 

Mr. Begg. Well, I don't think it was a question of attaching more 
importance. I do think that the picture was not as full as it could 
be. There are inevitably certain impressions made by certain films 
that are not what we might say fully factual. By and large, 1 think 
that the contribution of the motion-picture industry through their 
films has been very considerable in presenting a picture of the United 
States. But I feel that there are certain factual films, these, docu- 
mentary films, which should and must be shown to balance that 
picture; thej^ must be shown to the students, to the people, through 
nontheatrical organizations, so that they can understand what we 
understand in this country — that, on the one hand, we are looking at 
fictional films — to a large extent entertainment films — and, on the 
other hand, we have the factual, straiglit documenta,ry films. 

Mr. Worley. Do they make that distinction pretty carefully? 

Mr. Begg. Well, they haven't had enough documentary films to 
date to get to that point. I believe that with the tremendous interest 
that has been shown by people in getting films — our problem today is 
to get enough films to the field to meet the insistent demand — that 
demand shows they are interested in the films and that they are 
getting that point. 



2536 POSTWAR ECONOMIC POLICY AND PLANNING 

Mr. WoRLEY. Do you charge any admission for these documentary 
films? 

Mr. Begg. No; these are non theatrical films loaned on a non- 
profit basis to organizations that handle documentary films. We do 
not charge any admission fee for them; that is, when we shown them, 
we do not. 

Mr. WoRLEY. Do 3'ou find any opposition from the governments 
of other countries towards these films? 

Mr. Begg. On the contrary, Mr. Chaiiunan, I have found very 
considerable interest from the governments of other countries. 

Mr. WoRLEY. In all other countries, without any exceptions? 

Mr. Begg. Well, I can't say considerable interest in all countries. 

Mr. WoRLEY. But some interest in all countries? 

Mr. Begg. Some interest in all countries, with the exception, of 
course, of Russia, where we do not show our documentary films, except 
in a few limited cases. 

Mr. WoRLEY. Have you asked to be permitted to show documentary 
films in Russia? 

Mr. Begg. Yes; we have made such efforts. 

^Ir. WoRLEY. Have they asked to show their films over here? 

Mr. Begg. They just show them, when they can. 

Mr. WoRLEY. And the films they show over here are both docu- 
mentary and commercial films and are Government-sponsored? 

Mr. Begg. Both. 

Mr. WoRLEY. We make no restriction whatever against their show- 
ing over here? 

Mr. Begg. No. I understand that they have to register with the 
Department of Justice on the films they show here, but that is as far 
as it goes. 

Mr. WoRLEY. What outlets do they have over here? 

Mr. Begg. They ere free to turn to any of the many hundreds of 
organizations that we have here, showing nontheatrical films— the 
YKICA's, the schools, all other organizations which show non-theatrical 
films — they can go to them and make a deal with them for the show- 
ing of the films. It is ui. to the individual organizations. 

Mr. WoRLL^Y. But the}^ are not anxious for us to enter Russia and 
show our films over there? 

Mr. Begg. Not that I have seen an}^ indication of. 

Mr. WoRLEY. In fact, they are a little bit reluctant? 

Mr. Begg. They are more than reluctant. 

Mr. WoRLEY. How many other countries are carrying on the same 
type of work in the matter of documentary film distribution in other 
comitries? In other words, how much competition do you have? 

Mr. Begg. Well, that competition is developing. This whole field 
of documentary films has grown tremendously during the war in the 
countries of the world. The power of the documentary film has come 
more and more to be recognized. It was recognized in the training 
of troops in all countries engaged in the war, and it is being developed 
rapidly by many countries. I should say that the most important 
producers today of documentary films, of the foreign countries, are 
the United Kingdom; Canada; Russia; France is getting mider way; 
smaller countries like Czechoslovakia, Denmark, Sweden, have 
extensive plans for the production of documentary films; and other 
countries have similar plans, though not as extensive. 



POSTWAR ECONOMIC POLICY AND PLANNING 2537 

Mr. Walter. Don't you think it would be advisable for the State 
Department to enter mto some sort of a reciprocal agreement with 
Russia under which their fihns would be excluded unless and until our 
films were permitted to be shown in Russia? 

Mr. Begg. That is a matter which comes under the heading of 
freedom of communication and freedom of information, which is 
a question — — 

Mr. Walter. Well, reciprocal agreements of that sort are not new 
to us; we have all sorts of reciprocal trade agreements. 

Mr. Begg. Yes; trade agreements; but oui policy, as I understand 
it, of freedom of information, is to permit the free flow of ideas 
through the media of communications, the press, radio, books, and so 
forth. 

Mr. Walter. The fact of the matter is that the so-called docu- 
mentary films from Russia are propaganda, pure and simple, aren't 
they? 

Mr. Begg. I think that you could say that that is true; yes. 

Mr. WoRLEY. I heard this story, Mr. Begg — ^I don't know 
whether it is true or not — but I understand that the Soviets took 
several excerpts from some of our news reels over here and showed 
them generally in Russia, one of the scenes was of a strike in Detroit, 
which showed a policeman beating a striker over the head with his 
billy club. I understand, further, the Russian audience didn't 
seem to be so much interested in the brutality of the scene as they 
were in looking at the good pair of shoes the striker had on his feet; 
is that story correct? 

Mr. Begg. I remember reading that account in Mr. White's book, 
but I don't know what the facts are behind it. I do know this — that 
there were ways and means for the Russians to get news reel subjects 
from here, that we had an interchange agreement with the Russians 
during the war whereby they sent to this country their news-reel sub- 
jects, and they were made available to our news-reel companies for 
selection by them. We, in turn, sent to them the United News Reel 
prepared by the Government, for them to use in their news reel. 
Sections were used for a period of time, and then it ceased, I believe 
because of the lack of raw stock in Russia. But it has not been con- 
tinued, to my knowledge, since. 

Mr. WoRLEY. In your documentary films, do you make any effort 
to sell the people of other countries on things we produce over here, or 
things we want to sell? Do you commercialize them, or are you 
inclined to, or what? 

Mr. Begg. Well, I would put it this way, Mr. Chairman— that we 
do so indirectly, because we are more and more cooperating with 
American industry and business concerns to get them to produce 
what they call institutional advertising films, and when those insti- 
tutional advertising films present a true picture of the United States, 
a certain phase of life in the United States, we distribute those films 
to foreign countries. We work out arrangements with industrial con- 
cerns to put these films into various foreign languages and distribute 
them. We have done so with a dozen or more companies already 
and expect that to be an important part of our program. 

Mr. WoRLEY. Who makes these films? 

Mr. Begg. For instance, the United States Steel Corp. We used 
one of their films that they had made. Westinghouse had a film 
which we used. The Greyhound Bus Line for instance, had a scenic 



2538 POSTWAR ECONOMIC POLICY AND PLANNING 

film on the United States. Also, General Electric and the Santa Fe 
Railroad, and various companies of that type, are more and more 
loaning us their films for use abroad. We are hoping to get even 
more cooperation from private business and industry in the produc- 
tion of films of this type. 

Mr. WoRLEY. Does the motion-picture industry cooperate with 
you in these pictures? 

Mr. Begg. The motion-picture industry — if you mean the motion- 
picture industry in Hollywood, they usually do not produce that 
type of fihn. 

Mr. WoRLEY. Do they make any of these pictures other than the 
commercial kind that you describe? 

Mr. Begg. Yes, they do — for instance, the March of Time and 
This is America, and so forth. They are making that type of film. 

Mr. WoRLEY. And you use that type? 

Mr. Begg. They go out through tlie theaters; they are given 
theatrical distribution. 

Mr. WoRLEY. 1 mean the type that you are using, who makes these 
noncommercial, nonsponsored films? 

Mr. Begg. We do produce, ourselves, under contract. We defi- 
nitely have a program of production to make nontheatrical, documen- 
tary films which are not otherwise available. We make them under 
contract and supervise their production. We do produce them in 
that way. 

Mr. MuRDOCK. A^Ir. Chairman, when you asked a moment ago for 
a few titles, I wonder if that couldn't be made more than a few? 
Couldn't we have for the record a complete list, or nearly a complete 
list, of the documentary films? 

Mr. Begg. I would be very glad to give you a comprehensive list- 
ing; and I would be glad, if you care to, Mr. Chairman and members 
of the committee and Dr. Elliott, to have you see some of these films 
in our projection room in the State Department. 

Mr. WoRLEY. That would doubtless take quite awhile. However, 
we might call on you after we see this list. 

Mr. Begg. I shall provide a comprehensive list. 

Mr. WoRLEY. We will appreciate your doing so. 

(The list referred to is as follows:) 

Following is a list of films produced or used by the Office of Inter-American 
Affairs (many of these have a continuing usefulness in the Department's program) : 

Accent on Courage Battle of Russia 

Acrobatic Aces Before It Happens 

Advanced Baseball Technique Beneath the Sea 

Airacobra Beyond the Line of Duty 

Airborne Infantry Black Scourge 

Aircraft Carrier Blow Pipes 

Airways to Peace Boy and His Cow, A 

Alaska's Silver Millions Boy in Court 

Aluminum Bronx Zoo 

Attack Brought to Action 

Attack — Battle for New Britain Building of Boj's 

Autobiography of a Jeep Cadet Cagers 
Bank That Saves a Community, The California Junior Orchestra 

Basketball Technique Campus Frontiers 

Basketeers Carry the Fight 

Battle, The Cavalcade of Sports 

Battle of Britain Champions Carrv On 

Battle of the Marianas Child Went Forth, A 



POSTWAR ECONOMIC POLICY AND PLANNING 



2539 



City Within a City 

Cleanliness Brings Health 

Coast Guard Task Force 

College for Americans 

Contact America 

Convoy Snapshots 

County Agent, The 

Craftsman, The 

Defense Against Invasion 

Democracy in Action 

Design for Happiness 

Divide and Conquer 

Doctor, The 

Down Where the North Begins 

Dryland Farming 

Education for Death 

Elemental Irrigation 

Eve of Battle 

Eyes for Tomorrow 

Eyes of the Navy 

Farmers of the Future 

First Aid 

Fleet That Came to Stay 

Forty Boys and a Song 

Fulton Fish Market 

Garden in the City 

Golden Grapefruit, The 

Good Jo'o, The 

Great Railroads at Work 

Growing Americans 

Guardians of Plenty 

Gymnastics 

Handing it Back 

Harvest for Tomorrow 

High Over the Border 

Home on the Range 

Home Place 

Hookworm 

How Young America Paints 

Hudson River 

Human Body 

Insects as Carriers of Disease 

Inside Baseball 

Inter-American Cooperation 

Inter-American Devel. Commission 

Jeeps in War and Peace 

Lake Carrier 

Learning to Swim 

Marines at Tarawa 

McDonoiigh School 

Memphis Belle 

Men of West Point 

Michigan on the March 

Milk — ^the Food for Everybody 

Mission Accomplished 

Model Aviation 

Mosquito Control 

Music in Industrv 

Music Masters Nos. 1, 2, 3, 4, 5, 6 

Navajo Land 

Nazi Atrocities Nos. 1, 2, 3 

Nazis Strike 

New West 

New York Calling 

Ninth Inning, The 

North American Boy " 

North American Cadets 



North American Farming 

Nurses in Training 

On the Air 

On the Farm 

Orders from Toyko 

Parachute Athletes 

National Parks — Part I 

National Parks— Part II 

People of the Ozarks 

Picturesque Massachusetts 

Pig Projects Make Profit 

Poultry Raising 

Power and the Land 

Power for the Americas 

Prelude to War 

Public Sport No. 1 

Rack 'Em Up 

Right of Way 

Roads of Tomorrow 

Rodeo 

Rosemary Junior School 

Sand and Flame 

School, The 

Ship Is Born, A 

Silent War 

Soil Saving Grasses 

Soldiers of the Sky 

Soldier Stevedores 

Southwest Pacific Front 

Specialty Farming 

Spirit of Nobel 

Stop Silicosis 

Student Life 

Super Athletes 

Sweeney Steps Out 

Tanks 

Tennis Champions 

That Justice Be Done 

There Shall Be Freedom 

This is Tomorrow 

This Plastic Age 

Thunderbolt Hunters 

Time 

Tools at Hand 

Town, The 

Town in Old Mexico, A 

Trail Breakers 

Transmission of Disease 

Trees for Tomorrow 

Tuberculosis 

IT. S. Army Band 

U. S. Coast Guard Band 

Vandals in the Night 

Victory in the Air 

Victory Gardens 

Washington First in Apples 

We Refuse to Die 

Water — Friend or Enemy 

Western Stock Buyer 

What is Disease 

Where Mileage Begins 

Wild Wings 

AVinged Scourge 

Wings of the Future 

Women in Blue 

Women in Defense 

Women in Medicine 



2540 



POSTWAR ECONOMIC POLICY AND PLANNING 



In addition to the above films, the Office of Inter-American Affairs distributed 
a number of technical films on such subjects as public health, medicine, dentistry, 
surgery, and various phases of technological development in the United States. 

Films used by the Motion Picture Bureau of the Overseas Branch of the Office 
of War Information (many of these can be of continuing usefulness in the 
Department's program) : 



Swedes in America 

Cowboy, The 

Valley of the Tennessee 

Arturo Toscanini 

Steel Town 

Journey, The 

Pipeline 

Qswego 

Autobiography of a Jeep 

A Better Tomorrow 

Library of Congress 

Northwest U. S. A. 

Tuesday in November 

Capitol Story 

San Francisco Conference 

City Harvest 

Freedom to Learn 

The Pale Horseman 

Henry Brown, Farmer 

Combat Report 

Fire Power 

Democracy in Action 

Birth of the B-29 

Navy Yard 

Grasshoppers 

Wilson Dam School 

Battle of San Pietro 

Trees To Tame the Wind 

Fighting Lady 



Paratroops 

Prelude to War 

The Nazis Strike 

Divide and Conquer 

Battle of Britain 

Battle of Russia 

With the Marines at Tarawa 

Memphis Belle 

Attack — Battle for New Britain 

Battle for the Mariannas 

Brought to Action 

Winged Scourge 

Water — Friend or Enemy 

Fury in the Pacific 

Cummington Story 

They Do Come Back 

Antioch College 

Sand and Flame 

A Child Went Forth 

Power and the Land 

Building of Boys 

Harvests for Tomorrow 

Life of a Thoroughbred 

Fight for the Skies 

Nurses in Training 

Target Tokyo 

Guardians of the Wild 

The Fleet That Came To Stay 

To the Shores of Iwo Jima 



Additional films which have been or are being acquired or produced by the 
Department: 



Teachers' College 

County Fair 

Public Library 

High School of Art and Music 

Agricultural College 

The New Neighbor 

The People Sing 

Hurricane Circuit 

Public Opinion Polls 

Country Storekeeper 

U. S. Army Occupies Japan 

To Greater Vision 

Reunion 

The Lean Years 

Girl Scout Leader 

When Good Neighbors Get Together 

Not by Books Alone 

Hay Is What You Make It 

A Republic Is Born 

International Fishing 

Walking on Air 

Grand Canyon 

Empire on Parade 

National Gallery of Art 

Farming in Walla Walla 

Senior Scouting 

Trees To Tame The Wind 

Irrigation Farming 

The Farmer's Wife 



New England Fishermen 

The Wheat Farmer 

National Poultry Improvement Plan 

The Land— To Have and To Hold 

The Symphony Orchestra 

Patterns of American Rural Art 

The Capital 

White Battalions 

Night School 

Parent- Teachers Association 

Home Is the Sailor 

Dairy Farmer 

Rural Nurse 

Little Fires 

The Structure and Functions of Unions 

American Homemakers 

Assignment Tomorrow 

Popular Science 1, 2, and 3 

Keep 'Em Out 

Sunday in New York 

The Story of Lincoln Tunnel 

This Is New York 

In the Beginning 

Under Western Skies 

Look and Listen 

School Days in the Country 

Historic Death Valley 

University in White 

Ninth State 



POSTWAR ECONOMIC POLICY AND PLANNING 



2541 



Child Health Conference 
Facts About Fabrics 
Aptitudes and Occupations 
Nickel Highlights 
Airways to Peace 
Bridging San Francisco Bay 
Farmers of the Future 
Save That Soil 
Guardians of Plenty 
Wise Land Use Pays 
Fai-mstead Sanitation 
Petroleum 
Where Mileage Begins 



Yes, This Is New Mexico 

North Carolina 

Colorado Rockies 

People of the Ozarks 

There's More Than Timber in Trees 

This Plastic Age 

Pennsylvania Turnpike 

Terracing in the Northeast 

The Corn Farmer 

City Within a City 

Operating a Forest Nursery 

Washington, D. C. 

Orchard Irrigation 

Science and Agriculture 

In addition to the above films, the Department has used a number 
of fihns on various medical, dental, technical, and special-interest 
subjects. A limited number of prmts of films of this type are in 
distribution. 

Mr. WoRLEY. Dr. Elliott. 

Dr. Elliott. I don't know whether you or Mr. Hulten wish to 
answer this, but what does the Department suggest in the way of 
getting the right kind of commercial films abroad? There is no 
censorship, that is understood, and an agreement with the industry 
to that end. But there is a certain selective process to prevent 
happening what the com.ro.ittee saw at Tehran, for instance, where 
there were films showing that did not follow in any way our line of 
policy at the time. 'Is there an effort m.ade at cooperative arrange- 
ments with the motion-picture industry on comro.ercial lines to screen 
in any way both the quality and the type of films? 

Mr. Begg. Dr. Elliott, perhaps the best way to explain that would 
be to trace what has been done in that connection in the past, and 
what we are doing now. 

First of all, I would like to state that the Department does not in 
any way review or censor privately produced motion pictures which 
are distributed abroad through regular commercial channels. During 
the war years the Office of War Information and the Office of Inter- 
American Aft'airs cooperated with the motion-picture industry in the 
selection of films and in matters concerned with the content of films 
to be exported to the countries with which these agencies were con- 
cerned. 

The Office of War Information operated through a branch office in 
Hollywood. The Office of Inter-American Affairs operated through 
an organization known as the Motion Picture Society for the Ameri- 
cas, which was supported financially by that office but whose directors 
and president were in the motion-picture mdustry. 

Wiien these two war agencies were abolished and certain of their 
activities were transferred to the Department of State, the Depart- 
ment consulted with leaders of the motion-picture industry on the need 
for assuring the careful consideration of the type of films to be exported. 
As a result the industry leaders agreed to study carefully certain rec- 
ommendations made by the Motion Picture Society for the Americas 
for continuing many of its activities on a world-wide basis. It was 
the opinion of the industry that if such a central organization were to 
be continued and expanded,- it should be maintained entirely by the 
motion-picture industry. The Department concurred with this 
opinion and thereupon discontinued the former Office of War Infor- 



2542 POSTWAR ECONOMIC POLICY AND PLANNING 

mation and the Office of Inter- American Affairs in Hollywood. The 
Department understands that as a result of this study made by the 
motion-picture industry the conclusion has been reached that these 
matters can best be handled by existing facilities within the industry, 
and that no new organization should be created for this purpose. 

Now our position at the present time is that we are willing to co- 
operate and aid upon request from the industry, in any matter in 
which motion pictures would further international understanding. 

The Department, as I have said before, recognizes fully the great 
contribution which the universally popular American films can and 
do make toward achieving this objective, but again, as I have men- 
tioned before, there is need for supplementary work tlu-ough the use 
abroad of documentary informational films, the kind of work we are 
doing in our program. 

Dr. Elliott. So it would be fair, would it, to summarize your pro- 
gram by saying that you rely upon your documentary films to carry 
the direct message of the State Department, and that you rely upon 
self-regulation by the industry to give a true picture of American life 
and a high quality of picture for distribution abroad? 

Mr. Begg. The two combined; yes. 

Dr. Elliott. That is the present policy? 

Mr. Begg. Yes. 

Dr. Elliott. And the Motion Picture Association of America and 
the Society of Independent Motion Picture Producers, I understand 
are joined in support of the vehicle for doing that for the industry? 

Mr. Begg. They have some facilities for doing it, that is my 
understanding. 

Dr. Elliott. May I just ask you this question? We spoke before 
about film monopolies and that we were in the position of offering 
commercially selected films for export abroad to these countries which 
have film monopolies, and then being forced to let them do the 
censorsliip at their end. That is the present situation, is it not? 

Mr. Begg. Yes. The question of film monopolies. Dr. Elliott, is 
one that comes under the supervision of the Commercial Policy Di- 
vision. 

Dr. Elliott. I wondered if you had any interest in that from the 
information point of view, since it obviously gives an opportunity to 
distort the picture given of the United States very radically, through 
censorship at the other end and a very complete selection from the 
wrong angle. It would perhaps come back to Congressman Walter's 
question about reciprocal arrangements, when that attitude was 
taken. 

Mr. Begg. Well, that whole question of monopolies is one that I 
would like, if I may, to pass on to the other representatives. We are 
interested in it and work closely with them, first to try to get films 
into countries because we are interested in having the picture of the 
United States shown through commercial films 

Dr. Elliott. I have no desire to get you to answer the question if 
somebody else from the State Department is in a position to do so. 
There is a question of policy there which obviously would demand the 
attention of Congress, and particularly in this report, from the point 
of view of whether or not we should enter into any reciprocal arrange- 
ments with a view to increasing our bargaining position and exclude, 
as well as permit, films on a reciprocal basis. If the State Department 



POSTWAR ECONOMIC POLICY AND PLANNING 2543 

has an opinion on that it would be of interest to the committee, I 
imagine, as a matter of their attitude on a poHcy question. Whether 
you care to put that to Mr. Hulten or to defer it for the Commercial 
Policy representatives of the State Department is a matter, I suppose, 
of indifference to the committee, but an answer would be interesting. 

Mr. Begg. I should prefer to defer it to the Commercial Policy 
Division of the Department since they are interested in commercial 
agreements. 

Dr. Elliott. All right, we will pass that. 

Mr. Walter. Mr. Chairman. 

Mr. WoRLEY. Mr. Walter. 

Mr. Walter. Don't you think it would be tragic if this program 
of disseminating documentary films should be abandoned? I ask 
that question because when I was in Europe over a year ago I found 
that everybody was literally hungry to know about America, whether 
it was a bannaid or a taxicab driver or a member of Parliament or 
some public official, and the things that they asked about seemed to 
me to only be brought to them, through the type of documentary 
films that our State Department is now making available. 

Mr. Begg. I agree with you completely on that point, and my trip 
to Europe has convinced m.e that not only are wc just beginning to 
do the job that we should, but that it is highly important to us as a 
country that it should be done. I have had representatives of the 
government in a Scandinavian country come to me and spy that they 
would offer their full cooperation if we would give them even more 
films than we have so far for their outlets. They even m.ade sug- 
gestions of the types of film.s that they would like to see. It is vitally 
important to show them what we are like from, all points of view, 
such as from the ideological, the comm.ercial, and cultural stpnd- 
points. 

Mr. Walter. Don't you feel that the field is more fertile now than 
it ever will be for Americans to sell America? 

Mr. Begg. This, to my mind, is a psychological moment. The 
world outside of America is looking for something for the future, and 
they are listening to ideologies and "isms" of all kinds. Today is 
when they are looking to America, and we mustn't fail them in that 
respect. 

Mr. Hulten. I would like to add something to that. In the so- 
called satellite or "iron curtain" areas where, before the war, there 
had been developed rather excellent visual education programs in the 
schools, the materials for those programs are either badly out of date 
or have been destroyed, and they are looking to America, as well as to 
other countries, for these materials. In every country that I visited 
the minister of education and the teachers themselves were begging 
for material on America, how it operates and what its points of view 
are. 

Mr. WoRLEY. On the point Mr. Walter brought out, Mr. Begg, 
are you familiar with a memorandum on the postwar international 
information program of the United States, by Dr. Arthur W. Mac- 
mahon? 

Mr. Begg. I have been familiar with it in the past. 

Mr. WoRLEY. Pubhshed by the Department of State in 1945? 

Mr. Begg. Yes. 



2544 POSTWAR ECONOMIC POLICY AND PLANNING 

Mr. WoRLEY. In that document I find that from Austraha it was 
reported, in Dispatch No. 836, dated June 7, 1944, as follows: 

A country boy or girl could not be blamed for thinking that the majority of 
Americans are engaged in crime or frivolity. 

Does that impression come as a result of your documentary films? 

Mr. Begg. As a result of the documentary films — I should say not. 
Our documentary films are prepared in order to give a fair and true 
picture. We have for instance a picture on the cowboy that we have 
used mtli success. It shows what the cowboy really is like today, 
and what people have sometimes thought he was like. 

Mr. WoRLEY. Well, assuming that this report is correct, where do 
you suppose they would gain such an impression? 

Mr. Beoo. There are always films which make an impression that 
distorts the point of view of people who cannot see the picture as a 
whole. 

Mr. WoRLEY. ^Miich picture? 

Mr. Begg. The picture of the United States, of our life here, as a 
whole. That type of film, when we see them in this country, we 
take them for what they aie — entertainment films. Sometimes 
abroad, certain films— there is no question about it — will give an 
impression which is wrong. They are not accepted for what they are. 
But that does not mean that because one or a few or a number of 
pictures give that impression that, by and large, the use of commercial 
films should be condemned. On the contrarj^ I think they serve a 
good purpose. 

Mr. Worley. Do we send any documentary films to Australia? 

Mr. Begg. We are sending them to Australia now and the demand 
there is growing very greatly for them. 

Mr. Worley. From the same memorandum I quote from one of our 
officials from Morocco, on November 6, 1944, No. 2445: 

Probably the most powerful media of information are the motion picture and 
the radio. To any American who lived abroad before the present war it will be 
only too obvious that American pictures were of such a character as to convince 
foreigners that we were largely a Nation of morons and gangsters. 

Where would foreigners get such an impression as that, from docu- 
mentary films? 

Mr. Begg. Certainly not. It is possible that they got such impres- 
sions from films before the war, and that is why the war agencies were 
so interested in cooperating with Hollywood, to see that such impres- 
sions which were being reported to us were not continued. Those 
reports you quote were sent on to the Motion Picture Association by 
the Department for their information. Because during the war we 
did cooperate with them, we have had fewer and fewer reports on 
films that are having a bad effect. But it is now up to the industry 
itself to see that such films do not get out to the field, as they did 
before the war. 

Mr. Worley. Another report from the Iranian market, in a 1945 
information intelligence report was as follows: 

Unless some control is exercised over export of American commercial films 
official efforts to maintain a cultural-relations program are futile. The representa- 
tion of America through educational pictures is contradicted by the large volume 
of gangster and horror films poured into the Iranian market by commercial com- 
panies. 



POSTWAR ECONOMIC POLICY AND PLANNING 2545 

Mr. Begg. That is one of the reasons why we in the Department are 
so interested in the fact that the motion-picture industry has stated — • 
their leaders have stated — that they are going to impose self-regula- 
tion, and I believe that the representatives of the industry that are 
here today will be able to tell you some of those methods that are 
going to be employed for that self-regulation, which we in the Depart- 
ment believe are important. 

Mr. WoRLEY. The committee feels they are important also. 

Here is an additional one from New Zealand, Dispatch 151, June 
15, 1944: 

New Zealanders usually ask why they cannot have films showing everyday life, 
not the so-called Hollywood version of the war propaganda type. 

As I asked you originally, if, on the one hand, the State Department 
is spending a good bit of time and money to present a true picture of 
American life, for obvious purposes, whether at the same time that 
good work might not be torn down by unwise distribution of com- 
mercial films which do not convey a true picture of American life and 
customs? It seems to me that question is very important. 

Mr. Begg. Very important, and that is why I believe that the 
motion-picture industry has a great responsibility today on its shoul- 
ders which it is up to them to carry out. 

Dr. Elliott. We will have questions later on, as you suggest, Mr. 
Begg, of the industry itself to inquire into the method of self-regula- 
tion, and as to its success in raising the level of films. They are also 
interested in raising the commercial level of films and their distribu- 
tion, as well as the true jDicture of American life. But would it be 
your impression in the State Department that if you could get a fair 
run of high-quality films today, in sufficient numbers so that you 
offset bad impressions by showing true impressions, that the public 
abroad, like the public at home, would do its own selecting and think- 
ing about American life? 

Mr. Begg. I would agree that if you get enough films abroad of the 
higher quality, that that, together with other information that they 
get through other media, will enable them more and more to balance 
their picture of the United States. 

Dr. Elliott. And there might be some question as to whether or 
not these dashing western films give a bad impression of the United 
States. It is one period that many people feel was a very heroic 
civilization. 

Mr. Begg. Thatistrue. 

Mr. WoRLEY. Are there any further questions? (No response.) 
Thank you very much Mr. Begg. 

Is Mr. Golden here? 

Mr. Golden. Yes, sir. 

Mr. Worley. Please state your name and position for the record. 

STATEMENT OF NATHAN D. GOLDEN, CONSULTANT FOR MOTION 
PICTURES, DEPARTMENT OF COMMERCE 

Mr. Golden. My name is Nathan D. Golden, consultant for Motion 
Pictures, Office of International Trade, Department of Commerce. 

I haven't. Mr. Chairman, prepared any brief of any kind. Only 
last Wednesday evening did I know that this committee desired my 



2546 POSTWAR ECONOMIC POLICY AND PLANNING 

presence. I am prepared, however, to answer any questions that you 
might propound with reference to the sak^ distribution, and marketing 
of American motion pictures abroad. 

Mr. WoRLioY. The committee and Congress are interested, natu- 
rally, in developing foreign markets for the motion-picture industry, 
for both commercial, the right kind of course, and documentary films 
also. We desire to know from you just what the Department of 
Commerce is doing, just how much cooperation it is extending to the 
motion-picture indu.stry in its efforts to secure better markets abroad, 
and in attempting to combat any restrictive legislation other countries 
might be setting up. 

Mr. Golden. Back in July 1926 Congress created an office in the 
Department of Commerce to service the motion-picture industry. 
The prime purpose was to furnish the motion-picture industry with 
basic information relating to the marketing of their pictures in foreign 
markets, just as is given to other industries represented in the De- 
partment of Commerce. 

For the past 20 years the Motion Picture Division of the Bureau of 
Foreign and Domestic Commerce, Department of Commerce, has 
been furnishing the industry with factual information as to conditions 
existing in foreign markets, information covering censorship, quotas, 
any type of legislation, the number of theaters in a given market, the 
taxes that exist in the market, and any other type of information of a 
commercial nature that will be useful to them in surveying that 
market, with the prime purpose of selling American motion pictures. 

I might say at the outset that the first survey w^e made back in 1926 
showed that at that time 95 percent of the motion pictures shown 
throughout the entire vv^orld w^ere American motion pictures. That 
has since dwindled to about 65 percent, due to legislative barriers, both 
artificial and otherwise, which have been created against the showing 
of American pictures abroad. I brought a couple of these surveys 
with me for the information of the committee, and some of them that 
are being carried on cover not only motion pictures, but the sale of 
American motion-picture equipment abroad, in which we also have a 
very vital interest. 

Mr. Walter. By "legislative barriers," you mean barriers erected 
by other countries? 

Mr. Golden. By other countries against the showing of American 
pictures, such as quotas, or they maintain internal barriers of some 
type or another. 

Mr. Walter. Why do they do that? 

Mr. Golden. Well, there are several reasons wdiy those things are 
done. To some degree, in certain countries they may be political. 
In other places they may be for the purpose of creating their own 
motion-picture industry. 

Mr. WoRLEY. What do you mean by "political" — domestic 
politics? 

Mr. Golden. Domestic politics. You might find that certain 
groups of people feel that the motion-picture industry in a given 
country is quite a lucrative business and desire to foster domestic 
production. They may create a motion-picture industry within that 
country and then later on push through legislation that diminishes 
the show^ing of American pictures, so that the nationalistic product 
may be shown on their screens. 



POSTWAR ECONOMIC POLICY AND PLANNING 2547 

Mr. WoRLEY. We don't have any barriers against foreign films, 
do we? 

Mr. Golden. We have an absohitely free market for any country 
in the world to bi'ing their pictures into this market if they meet tlie 
requirement of paying customs duties. America is the most lucrative 
market for any type of pictures, but they must be pictures of the type 
that the American audience desires and wants to see. 

Mr. WoRLEY. Otherwise they don't do any business? It is purely 
a selling proposition? 

Mr. Golden. That is right. 

Mr. WoRLEY. So we really have no restrictions, no restrictive 
legislation, against any films whatsoever? 

Mr. Golden. None whatsoever, other than the six States of the 
Union that maintain a censorship. 

Mr. WoRLEY. What are other reasons, Mr. Golden, why restrictive 
legislation is imposed against our films? 

Mr. Golden. Well, of course you have foreign exchange 
problems 

Mr. Worley. In the sterlmg area? 

Mr. Golden. Not only in the sterling area, but in the countries 
that have just gotten back into operation, such as France and Italy. 
Of course, in Austria we haven't really started to show pictures other 
than those which are being shown through War Department facilities. 

Mr. Worley. Did the Bretton Woods agreement and the trade 
concessions or modifications, in relation to the British loan, help the 
film industry? 

Mr. Golden. Very much. 

Mr. Worley. In the entire British Empire? 

Mr. Golden. Yes; it gives us free exchange of monetary returns to 
this country for all permitted current transactions and an assurance 
of the liquidation of the sterling area dollar pool by July 15, 1947. 

Mr. Worley. Well, now, you say the main reasons for restrictive 
legislation abroad against our product are, first, political; and 
second 

Mr. Golden. Creation of a nationalistic industry. 

Mr. Worley. Are there any other reasons? 

Mr. Golden. Yes; in some cases they don't like to see our ideas and 
ideals propounded to the degree that they have been in the past. 

Mr. Worley. Would that be true whether a film was documentary 
or commercial? 

Mr. Golden." I am talking strictly about commercial films. 

Mr. Worley. Are there any other reasons that you know of? 

Mr. Golden. Oft'hand those are about the most important. 
■ Mr. Worley. What eft'orts does your Department make to prevent 
or counteract restrictive legislation? 

Mr. Golden. Well, we are trade promoters and not trade protectors. 
The State Department is charged with that part of the work in govern- 
ment, to protect the American trade. It is the function of the Office 
of Commercial Policy of the State Department to do that. But we 
in turn set up the danger signals as we get these reports from abroad, 
through direct dissemination through the press and to the industry 
itself. 

Dr. Elliott. There is one question, before you leave the reasons for 
limiting and discriminatnig against American films, that I would be 



2548 POSTWAR ECONOMIC POLICY AND PLANNING 

interested in your comment on, Mr. Golden. That is the question 
of the type of fihns that have been distributed, chiss B and poorer 
films, in very large numbers by a number of independent producers in 
the past, competing in markets that were already pret-ty saturated with 
pictures. The net effect of that would be to limit very strictly the 
booking time of local producers with their own exhibitors, if we took 
too much of the exhibition time in any given country. That was a 
complaint frequently heard by the committee last year in its rounds. 
Now would that, according to you, be a factor in this business, the 
distribution of too many American second-rate films that took up too 
much booking time? 

Mr. Golden. I think it is a great factor, Dr. Elliott. Unfortunately 
no one has any control over a commercial firm that wants to sell their 
pictures in any markets of the world. However, I will say this, that 
I think since the commencement of the war you will find that the 
industry has turned out a better, higher-grade product. With 
reference to the independents flooding the market, in many cases 

Dr. Elliott. I am not referring solely to independents, but to any 
companies. 

Mr. Golden. I think also, in defense of the organized industry, 
that they themselves have limited their distribution of the number of 
pictures that they are sending into the foreign markets so as not to 
flood those markets and so as to give the domestic industry an oppor- 
tunity to sell their pictures on the screens within the m.arket. 

Dr. Elliott. Well, is that not true now of the entire motion-picture 
industry? 

Mr. Golden. That is very true. 

Dr. Elliott. I understood that the Export Corporation which has 
been set up was directing its attention specifically to this point. 

Mr. Golden. Yes, sir; they feel that even though these nationalistic 
industries have been created, that they too have a right to live and 
show their pictures mthin their own market or any other markets. 

Dr. Elliott. Am I correct in thinking that the Society of Inde- 
pendent Alotion Picture Producers is a party to the Export Corpora- 
tion, and in full accord with it? 

Air. Golden. In full accord ; yes. 

Dr. Elliott. So that particular problem is in the process of 
elimination? 

Mr. Golden. Yes; and under the voluntary control of the industry. 

Dr. Elliott. May I ask one more question? What is the magni- 
tude of the commercial export of pictures abroad, gross and net, in 
return to the motion-picture industry of this country, as far as you 
are able to judge? 

Mr. Golden. It has been estimated that 40 percent of the gross 
returns to the American motion-picture industry come from their 
foreign markets. 

Dr. Elliott. Gross? 

Mr. Golden. Yes. 

Mr. WoRLEY. Around ninety to a hundred million dollars? 

Mr. Golden. Well, I don't know exactly how much that might 
be, Mr. Chairman; it might vary, but it is upward of a hundred 
million dollars; and, as I said, the loss of any portion of that would 
be very detrimental to the existence of the American motion-picture 
industry. It would mean that we would have to turn out an inferior 
product in order to get our negative return on the pictures produced 



POSTWAR ECONOMIC POLICY AND PLANNING 2549 

in this country. Production costs have gone up tremendously since 
the war. We have had the financial resources to put into good- 
quality motion pictures, and I might say here for the record that 
pictures in the past few years have improved considerably in quality, 
and that they are the lifeblood of every foreign exhibitor. Without 
them they couldn't exist or keep their theaters open. 

Dr. Elliott. So that if a substantial part ojf the foreign market 
were cut off its effect would be to lower the whole standard of Amer- 
ican motion pictures? 

Mr. Golden. Correct. 

Dr. Elliott. And to deprive them of their presently enjoyed 
competitive advantage through large-scale resources and widespread 
distribution? 

Mr. Golden. Yes, sir. I might say also that I recently returned 
from Europe and in conversations with people in the seven different 
countries that I visited the one question would be, "When will you 
send us some of your American pictures?" It so happened that in 
two of the countries that I visited our American pictures were not 
being shown at the time. 

Mr. WoRLEY. What countries were they? 

Mr. Golden. Czechoslovakia, France; in Austria and Germany the 
old OWI films that followed the troops, were being shown; in France 
our pictures were not being shown at the time; Belgium had just 
opened up; and as to Switzerland, we always shipped film into there. 

Mr. WoRLEY. Wliy weren't they being shown in these two countries ; 
was it due to their inability to get tbem? 

Mr. Golden. No; but because of certain regulations that were in 
effect, that were not to the interest of the American film distributor. 
If we were to operate under the terms that were propounded at the 
time we would have had to operate at a loss, and no business operates 
very long at a loss. 

Mr. Worley. Were the reasons part of those you gave a while 
ago — restrictive legislation ? 

Mr. Golden. That is right. Since that time, however, they have 
been straightened out and our films are being distributed in Czecho- 
slovakia and also in France. 

Mr. Worley. But not in the other three countries you mentioned? 

Mr. Golden. Oh, yes; they are being shown in all of the countries 
today. 

Dr. Elliott. I would be interested in hearing the answer to this 
one further question of Mr. Golden from the point of view of the 
Department of Commerce. What is the importance to the total 
foreign trade of the United States of the advertising value of the film 
industry as shown abroad? 

Mr. Golden. It is immeasurable. American motion pictures sell 
ideas and sell American merchandise. I can tell you a story along 
that line; it goes back a few years. It has to do with one of our 
American pictures being shown in Latin America and it depicted 
Adolphe Menjou as a barber in a very high-class barber shop. After 
that picture was shown, the very next day, a barber in this community 
came to our commercial attache's office and wanted him to send to 
Hollywood to get photographs of that particular scene in the barber 
shop and the names of the manufacturers of the equipment that went 

99579— 47— pt. 9 3 



2550 POSTWAR ECONOMIC POLICY AND PLANNING 

into that bai-ber shop. The commercial attache did so, and we sup- 
plied them to this barber, and we sold American barber-shop equip- 
ment to that individual and he duplicated that barber shop as he saw 
it in that film. 

You could multiply that many times over in other parts of the world 
where American films have been instrumental in fostering the trade of 
the United States for other industries. 

Mr. WoRLEY. Is that a reason for restrictive legislation in other 
countries? 

Mr. Golden. I would say yes. 

Mr. WoRLEY. It competes with their own products. 

Mr. Golden. With their own products in their own markets. 

Mr. WoRLEY. There is a good deal of truth then, in the statement 
that "trade follows the film instead of following the flag," isn't there? 

Mr. Golden. As true as the spoken word. I might say that the 
one really credited for coining that phrase is the ex-King of England 
and Duke of Windsor. Many years ago in a speech that he made he 
used that phrase and it caught on. He said: 

You can keep all the ships of America, the American flag-, and many other 
things that are American out of the ports of the world, but if you keep the Ameri- 
can film out then you are hurting American trade. 

Mr. WoRLEY. That was reported in a London business paper in 
1920, as I remember. 

Mr. Golden. That is right. 

Mr. Worley. Speaking of the British, just how much opposition 
does the British Empire oft'er to our own motion-picture industry? 
I understand that a gentleman by the name of Rank has quite a 
monopoly on the British motion-picture industry? 

Mr. Golden. He is quite an important gentleman. 

Mr. Worley. Is he interested in the market over here? 

Mr. Golden. Very much so. The pictures he makes today must 
get released in this market in order to realize a profit, and he has a 
free and open market here if he turns out good pictures. He has 
made arrangements with a few of our American film distributors to 
distribute some of his pictures, and I might say to his credit that a 
number of his pictures have been excellent and comparable to any 
that we have made in this country, and that they have received good 
box office and good publicity. You gave one showing here right 
now, Henry V. You have had Seventh Veil and many other 
pictiu-es. 

Mr. Worley. Wasn't Colonel Blimp one of his pictures? 

Mr. Golden. Yes; that showed some time ago. 

Mr. Worley. How much interest does the British Government 
take in their own motioix-picture industry? We have had testimony 
before this committee on any number of phases of foreign trade where 
the British Government worked hand in glove with their industry, 
negotiating trade treaties and subsidizing, and so forth. Do we have 
a free market over in England? 

Mr. Golden. We do not. We have a quota applied against 
American motion pictures. As a matter of fact it is applied against 
any foreign pictures; and today 17^ percent of the films shown on the 
screens of Great Britain must be British pictures. 

Mr. Worley. Seventeen and a half percent? 



POSTWAR ECONOMIC POLICY AND PLANNING 2551 

Mr. Golden. That is right. There is a quota act that expires in 
1948. They are discussing now the possible extension of that quota 
act. They have even gone a step further and recently the Board of 
Trade has passed down an order that three of the largest theater chains 
would have to show six independently produced British pictures 
within the next year. Now that is a form of screen quota and it may- 
be the forerunner of an even greater screen quota 'that might be 
applied which may come after this present act expires in 1948, and 
that would be very detrimental to our American film distributors 
because every time restrictions are imposed by some sort of legis- 
lative trick, and it becom.es mandatory upon an exhibitor to show 
domestic films, it means that just so many American films find less 
playing time on the screens of that country. Yes ; the British Govern- 
ment has given considerable support to the creation and development 
of the British industry. Mr. Rank, with his resources, is in a position! 
to virtually dictate terms; he is a theater operator, makes pictures, and 
even manufactures motion-picture equipment. 

Mr. WoRLEY. But he doesn't have any competition over there such 
as we have over here? 

Mr. Golden. In what way? 

Mr. WoRLEY. In motion-picture production or equipment. 

Mr. Golden. Oh, yes; there are many independent producers be- 
sides Mr. Rank in Great Britain. 

Mr. WoRLEY. But the degree of competition is not as keen over 
there as here, is it? 

Mr. Golden. It is keener. 

Mr. WoRLEY. Keener over there? 

Mr. Golden. I would say so because they have less theaters than 
we have in this country. They have around 5,000 theaters in that 
market, and where you have an investment in a picture ranging from 
$1,000,000 to $5,000,000, it is diflScult to get your negative cost out of 
5,000 theaters. So therefore you must look for other markets, and 
rank has given our American distributors competitively a pretty good 
go of it in other European markets. 

Dr. Elliott. What percentage does the British market represent 
in our total overseas return from films? 

Mr. Golden. I would say somewhere between 40 and 50 percent. 

Dr. Elliott. It is a very big factor? 

Mr. Golden. Yes. 

Dr. Elliott. And therefore quite important? 

Mr. Golden. Yes. 

Dr. Elliott. Would it be fair to say that the motion pictures, by 
reason of the importance that every government attaches to them 
today, and because of the reasons for the discriminatory type of 
restrictions put on them, are the vanguards of all foreign trade with 
respect to restrictions, and that you can tell what is coming up 
against others of our exports by watching the way the moving pic- 
tures are restricted? 

Mr. Golden. I doubt if we can go quite that far, Dr. Elliott. 
Governments attach great importance to film for the reasons I have 
outlined and give them special consideration in the matter of re- 
strictions. But exchange controls and quantitative restrictions are 
applied to the whole range of a country's imports and are imposed 
for a variety of reasons; for example, to insure priority for imports of 



2552 POSTWAR ECONOMIC POLICY AND PLANNING 

the things they most urgently need. I feel it would be somewhat 
dangerous to rely too much on the practice of a government with 
respect to any one product as an indication of what they might do 
with respect to some other product of a wholly different type. 

Dr. Elliott. Well, in that case it ip something that affects the whole 
export trade of the United States very immediately and definitely? 

Mr. Golden, Yes, sir. The export of films definitely affects the 
whole United States export trade. 

Dr. Elliott. And often illustrates the type of controls that are 
going to be put on 

Mr. Golden. It may, but there are, as I have said, other factors 
involved in other industries. 

Mr. WoRLEY. What do you suggest can be done to offset that? 

Mr. Golden. Well, the answer is better motion pictures and pos- 
sibly a free market. I subscribe to Mr. Erip Johnston's pronounce- 
ments of a world film council, of getting the producers of the world 
together and, if necessary, government representatives. I don't 
think the American motion-picture mdiistry is so greedy that they 
don't realize that other industries must live. All that industry asks 
for is an opportunity to compete on an even kneel with other foreign 
producers. 

Mr. WoRLEY. Do not the overwhelming superiority of American 
pictures in box-office terms, as proven cojnpetitively, and the tre- 
mendous backlog of first-class pictures that we built up during the 
war make a natural resistance to this on the part of foreign countries? 

Mr. Golden. But our American film distributors themselves have 
agreed among themselves to limit their distribution in those foreign 
markets; and then, too, only the better of that backlog of pictures 
are being chosen for distribution abroad, pictures that show America 
with its best foot forward, and do not give a distorted view of Ameri- 
can ways of life. 

Dr. Elliott. And if the "take" ,of the motion pictures alone is 
imposed on foreign-exchange burdens in many countries today it 
would seriously throw out of balance their exchange with dollar 
exchange unless there were alleviating factors in the increase of their 
exports into this country? 

Mr. Golden. That could well be one of the problems to be dis- 
cussed in this world film council that Mr. Johnston proposes, so that 
we would not tax, let us say, the foreign exchange of a given foreign 
country. 

Dr. Elliott. In other w^ords, if J. Arthur Rank does not get a 
foreign market and in dollar countries, that failure will increase the 
pressure for the British to put on further restrictions to protect their 
exchange position in England? 

Mr. Golden. It might possibly, but I don't think Mr. Rank has to 
worr}^ about that. He is free to come into this market, which is the 
greatest dollar market, and exhibit good pictures, and he is free to 
take those dollars right back to England. 

Dr.-ELLiOTT. In other words, it is a part of our general multilateral 
trade policy to try to give him a fair market in this country in return 
for a fair and unquotaed market in England? 

Mr, Golden. Correct. 

Mr. Walter. Of course, the box-office appeal of our pictures could 
be destroyed quite simply in those countries where the Government 



POSTWAR ECONOMIC POLICY AND PLANNING 2553 

controls every phase of the economy, by directing those who have 
charge of the distribution of our pictures to select only the poorest 
types of pictures? 

Mr. Golden. I hardly think so, because I don't think tliat our 
American distributors would even attempt to distribute the poorer 
quality pictures that you speak of, Mr. Congressman. 

Mr. Walter. But suppose the poor pictures and the good pictures 
were both available, and the distributing agency in another country 
would make available for distribution throughout the country only 
the poorer pictures. The box office appeal would be destroyed rather 
quicldy, wouldn't it? 

Mr. Golden. Our American distributors have control over what 
pictures they sell abroad. I might clarify something for you. Our 
American companies in the majority of cases distribute through their 
own facilities — — 

Mr. Walter. But what would there be to prevent some independent 
company from going into business making poor pictures and flooding 
the foreign markets with them? 

Mr. Golden. It wouldn't be economical for them to do it because 
they couldn't get their negative cost out of the foreign market; they 
would have to sell them here first. 

Mr. Worley. Are there any further questions? 

[No response.] 

Thank you very much, Mr. Golden. 

Mr. Golden. You are entirely welcome. 

Mr. Worley. Mr. Brown, of the Export Division of the State 
Department. 

STATEMENT OF WINTHROP G. BROWN, CHIEF, COMMERCIAL 
POLICY DIVISION, STATE DEPARTMENT 

Mr. Brown. My name is Winthrop G. Brown, Chief of the Com- 
mercial Policy Division of the Department of State. 

Mr. Chairman and members of the committee, and Dr. Elliott, I, 
too, do not have a prepared statement but I understood that the 
committee would like to know the nature of the restrictions which 
exist in foreign countries against American films, and some of the 
reasons for their erection, and some of the things that the Department 
is trying and has been able to do to improve the situation. 

As to the reasons: First I am sure that there are, sometimes, political 
reasons, and there are also in a great many cases the desire to protect 
a domestic industry which is either just beginning or which has been 
badly hit by the war and has been out of business. But I thmk one 
of the major reasons for the restrictions against American films is 
one which Dr. Elliott suggested just a moment ago, and which Mr. 
Golden also mentioned, and that is the basic shortage of foreign 
exchange which is prevalent abroad. Many countries are very reluc- 
tant to allow large amounts of their limited dollar supply to be spent 
on entertainment when they are having a hard time finding enough 
dollars to buy food and clothing and machinery and things of that 
kind which they need desperately to get their economies started. So 
that that fundamental issue underlies the restrictions against American 
films precisely as it underlies the restrictions on the purchase of most 
other American exports at this time. In other words, the problem 



2554 POSTWAR ECONOMIC POLICY AND PLANNING 

which the motion-picture industry faces has many common elements 
which American exports face in the markets of the world. 

The restrictions which are imposed against the film industry are 
numerous, and I take it that the committee does not want me to go 
into very great detail, but I can supply any detailed information which 
you would like to have, later. 

Mr. WoRLEY. Could you give us a memorandum on those restric- 
tions? 

Mr. Brown. I could give you a brief memorandum showing the 
nature of the restrictions in each country. 

Mr. WoRLEY. We would like to have it. 

Mr. Brown. Would you care to have me describe in general what 
they are or would you rather not take the time at this point? 

Mr. WoRLEY. You heard Mr. Golden's testimony? 

Mr. Brown. Yes. 

Mr. Worley. Do you have any additional statement to make on 
those points? 

Mr. Brown. I think I could clarify a little one or two points he 
made. 

One type of restriction is the limitation of the amount of time 
which foreign films can enjoy on the domestic screen; that is, they 
reserve so many weeks for domestic films. 

The second is to require distributors to release a certain number of 
domestically produced films out of their total releases. 

The third type is to impose a high tax on all foreign films, which is 
not imposed on domestic. In other words, it is really another tariff 
barrier. 

Another type is to limit the numerical number of foreign films which 
are admitted. 

Another type is to impose control on the amount of foreign exchange 
which can be remitted. They also require that the foreign film be 
dubbed, that is to srj that it must be changed into the local language, 
and they require that that work be done in that country, and also 
sometimes impose very heavy taxes on that operation. 

Mr. Worley. Is that for the purpose of raising revenue, generally, 
or simply to keep them out, or both? 

Mr. Brown. As in all these other things, there are mixed motives. 
Sometimes it is quite clearly identified as a tax which is going to be used 
for the support of the domestic industry. Sometimes it is partly a 
rev^enue measure or at other times solely a revenue measure. It 
depends on the country. 

JNow the question is, AVliat can our Goverment do about this kind 
of thing and what have we been able to accomplish? Well, in the first 
place there are a great many of these countries which we have trade 
agreements with, and in most of those trade agreements we have 
obtained concessions on motion-picture films. So that the films are 
included in the agreement, and that means that the general provisions 
of the agreement apply. In almost all of the agreements — I think in 
every one in which films are included — there is a provision committing 
the other country not to impose a quota against any item which appears 
in the schedule. So that whenever an import quota or a restriction on 
the import of our films is proposed or put into effect, we have a legal 
basis for telling the other government that they are not living up to 
their commitment, and in a good many cases, by calling the attention 



POSTWAR ECONOMIC POLICY AND PLANNING 2555 

of the government to that commitment and making representations, 
we have been able to secure a satisfactory adjustment, but not in every 
case. 

Another provision of those agreements requires countries not to 
impose internal taxes on imported articles higher than the same type 
of tax on the domestic article. Again we have a legal basis for protest 
when that is violated, which has often been successful, although not 
always. 

And there are other provisions of that kind. So that the first, 
shall we say, weapon in oiu* arsenal, or means of redress open to us, 
is the trade agreement which we have, and that has been extremely 
useful in our efforts to assist the industry. 

Then of course we are embarked at this time on a general program 
for the liberalization of trade, the reduction of trade barriers, with 
which I am sure you are all familiar, which takes the form of our 
suggested charter for a world trade organization, and carries out the 
recommendations, or tries to carry out the recommendations, made in 
your sixth report and repeated in your eighth report, for a world con- 
ference, an international conference, directed toward reduction of 
trade barriers, both tariffs and discrimination, and also matters 
such as quantitative restrictions, quotas, exchange control, and so on 
and so forth. And we have proposed a set of rules in that charter 
which are designed eventually to eliminate the use of quantitative 
restrictions and exchange controls and strictly to limit their use during 
this early period where, as your committee has often recognized, 
countries really have exchange shortages and cannot go as far as we 
would hope that they could go. 

That charter has just been the subject of discussion in London 
between 18 nations, which include most of the countri?s with which 
we are mainly concerned here, and which cover about 65 percent of the 
world's trade, and a very substantial measure of agreement on commit- 
ments not to use this type of device except in specified and limited 
situations has been reached, and we are encouraged at the progress 
that we have made there. 

Again that is something attacking the problem on the broad over-all 
trade front, and the motion-picture exports will benefit from it just as 
the rest of our foreign trade. 

Then finally there are cas?s where the industry finds itself confronted 
with some problem in another country which is not covered by a 
trade agreement, or which would not come under the charter, but 
where we feel that the industry's position is reasonable, and so we 
assist the industry representatives through our embassy or legation 
abroad, and have often, I beUeve, been able to help work out a very 
satisfactory solution. 

Dr. Elliott. Mr. Brown, may I ask you a question along that 
line. The eighth report of this committee recommended that the 
bargaining powers of the United States Government be employed to 
protect not only films and their distribution abroad, but American 
periodicals and the press, free access to information, and all other 
means of communication. It, I think, put a proper emphasis on films, 
among these. To what degree have you been successful in your 
bargaining in protecting the rights of American film producers to non- 
discriminatory treatment along the lines that you have indicated? 



2556 POSTWAR ECONOMIC POLICY AND PLANNING 

Mr. Brown. Well, Dr. Elliott, bargaining begins, as far as the 
tariff negotiations are concerned, in April, so that we have not 

Dr. Elliott. I wasn't thinking about the new trade agreements or 
the international trade organization or the charter. As a matter of 
fact I thmk it would be fair to say, would it not, that that charter at 
present has not dealt with many of the problems of State purchasing, 
trade monopolies, and State trading monopolies — that they have 
been left out? 

Mr. Brown. That is true, but that problem is, of course, only 
present in part of the area in which the film industry is particularly 
interested. 

Dr. Elliott. A part which we have devoted some attention to and 
which, therefore, may require much stronger bargaining leverages. 
A country that is making loans and giving large gifts, in addition to 
the sale of surplus property at very advantageous terms to many of 
these countries, making lend-lease settlements and these other things, 
presumably has a number of bargaining counters. Has there bean 
successful use of these bargaining counters in the past protests that 
we have made? 

Mr. Brown. Dr. Elliott, it has not been our policy specifically to 
tie a loan which seemed to us a desirable one into any particular 
commercial concession by the other country. However, certainly 
the attitude of the other country toward American business and 
toward other elements that you mention has been something that 
we have considered in connection with the loan. You will recall that 
it was at the time of the British loan that we secured our commercial 
agreement with the United Kingdom to support our proposals for the 
expansion of international trade 

Dr. Elliott. I quite understand, Mr. Brown, without interrupting 
you too much, that our general policy has been to secure as broad- 
scale multilateral advantages as possible and I think that is thoroughly 
in line wdth the committee's previous reports, and so forth. But in 
the specific instances of discriminations which were in violation of 
previous agreements, or discrimination after we had reached an 
agreement as was the case in the instance of the French, have we 
then not followed up with something more than a protest? 

Mr. Brown. One of the documents that was issued at the time of 
the announcement of the French loan was the agreement on films 
which we felt was a very satisfactory one. 

Dr. Elliott. Has that been lived up to since that time? 

Mr. Brown. In most respects; yes, sir. The agreement said that 
there would be only a limited reservation of time for the domestic 
industry, which would be reduced over a period of years, and that 
there would be no limitation on the import of American films, and 
those agreements have, as far as I know, been lived up to. 

May I add that, carrying forward your point, that in connection 
with the lend-lease settlements and Export-Import Bank loans to 
several other countries, we have also secured commitments from such 
countries along the lines of these proposals, so that has been in our 
minds. 

Dr. Elliott. I am simply interested in whether or not we have 
any weapon, except protests, when these agreements are not lived 
up to. It is like Hamlet in the play, ''Methinks the lady doth protest 
too much" — if we have nothing except protests to make. Is there. 



POSTWAR ECOXOMIC POLICY AND PLANNING 2557 

in the policy of the Department, a systematic effort to protect our 
interests in this mattei by the use of bargaining advantages and 
perhaps the withdrawal of bargaining privileges, or other counters? 

Air. Browm. I am not competent to answer that question, Dr. 
Elliott. My field in tlie Department is too hmited. I tJiink it is 
certainly one of the elements that is considered, but again the Depart- 
ment is only one member of the Export-Import Bank Board and 
therefore is not solely responsible. 

Dr. Elliott. Would you feel competent to pass on the question 
that the Information Division of the State Department felt some 
delicacy in answering a while ago, and passed on to you, which Con- 
gressman Walter put up, which was, Would you feel that there was 
anything mimical to the present policy of the Department of State in 
insisting upon reciprocity of distribution of films, for instance, with 
those countries which have put on restrictive or exclusive pro^'isions 
^vith respect to the distribution of our film, often involving on their 
part a pohtical censorship? 

Mr. Brown. That would mean, of course, a drastic control here in 
this country and a serious limitation on the rights of American indus- 
try. It would mean that the Government would have to step in and 
say to American producers and distributors who ^vished, nevertheless, 
to get a foreign film which they thought would be a profitable and 
desirable film to have, ''No, you may not have it" because of the 
pohcy of this other country; and I think that is something that we 
would want to consider ver^'- seriously m its imphcations across the 
boards, as to whether, because some other country takes a restrictive 
pohcy, we ^\'ish to im.pose Government controls and regulations and 
interference ^^■ith private industry in this country, which, of course, 
are quite alien to our whole philosophy. 

Dr. Elliott. Well, in many cases it is hardly an interference wth 
private industry but interference with the shoeing of foreign-govern- 
ment films, obviously propagandistic in intent, as in the cases we 
have been talking about. But let m,e ask you this question: Does 
this seem to you to be in any way lacking in harmony A\'ith the recip- 
rocal trading privileges under our Trade Agreements Act, to exclude 
or hmit the import of films from some of those countries that do not 
give us reciprocal trading privileges? Wouldn't this be an extension 
of the same thing? 

Mr. Brown. Under the Trade Agi-eements Act we exclude some 
countries that discriminate against us from particular privileges that 
we have given om"selves, but it is within a very limited range. In 
other words, we couldn't put a quota on it. 

Dr. Elliott. Mr. Bro^^^l, I quite appreciate the delicacy and the 
importance of this question, and it is obviously nothing for a snap 
judgment. 

Mr. Brown. That is correct, and it is one that I have been asked 
without previous notice. 

Dr. Elliott. Yes; it has come up in the course of this discussion. 
Perhaps you would like to wTite a memorandum on it for the com- 
mittee, if the chairman agrees. 

Mr. WoRLEY. Yes; the committee would welcome such a state- 
ment. 

Dr. Elliott. Giving us what is the present attitude of the Depart- 
ment of State on this policy problem, because it obviously affects the 



2558 POSTWAR ECONOMIC POLICY AND PLANNING 

economic foreign policy, with which the committee is concerned, in a 
very serious way. 

Mr. Brown. It is an extremely fundamental question. 

(The memorandum referred to follows:) 

A suggestion has been made that restrictions be placed upon the importation 
of foreign films into the United States, as a bargaining method in securing entry 
for American films in foreign countries. In dealing with this question, it would 
be necessary to consider the following factors, among others: 

1. This proposal would seem to be inconsistent with United States principles 
of freedom of access to information, and freedom of dissemination of opinions and 
beliefs. In this connection the United States has sought the acceptance of such 
principles on an international scale, through the United Nations machinery. 

2. The international trarie program of the United States calls for the reduction 
of all types of barriers to trade, and the erection of new barriers b}' the United 
States would be inconsistent with United States advocacy of a program for the 
expansion of trade on a multilateral and nondiscriminatory basis as set forth in 
the Suggested Charter for an International Trade Organization of the United 
Nations. 

3. If the proposal were applied only to certain countries, whether because of 
the ideological content of their films, or because of unusually restrictive attitudes 
on their part with respect to United States films, such action would constitute a 
discrimination against the trade of those countries. Furthermore, the application 
of this proposal to countries with which the United States has trade agreements 
and commercial treaties providing for most-favored-nation treatment with regard 
to imports would undoubtedly constitute a violation of such agreements and 
treaties. 

4. At the present time the number of foreign films shown in the United States 
is very small indeed in comparison with the number of United States films shown 
in foreign countries and it is expected that such a situation will hold for the fore- 
seeable, future. United States action to restrict the importation of foreign films 
would doubtless lead to an increase in the application of similar measures by foreign 
countries which would be a serious blow to the United States film industry and to 
other economic interests of the United States. 

Mr. WoRLEY. We would also like to have that memorandum from 
you on restrictions by foreign countries. 

Mr. Brown. Yes, sir; I have it here. 

Mr. WoRLEY. That may be inserted in the record at the conclusion 
of your testimony. 

Is Mr. Canty here? 

Mr. Brown. He is here in case you desire to ask questions on 
specific restrictions in specific countries. 

Mr. Worley. Do you have additional testimony to offer, except 
for this statement? 

Mr. Brown. No, sir. 

Mr. Worley. Thank you very much, Mr. Brown. 

(The document submitted by Mr. Brown is as follows: 

List of Restrictions Operating Against the United States Motion-Picture 

Industry Abroad 

EUROPE 

Great Britain 

An exhibitors' quota and a distributors' quota. The first mentioned requires 
all motion-picture theater owners to reserve a specified portion of their screen time 
exclusively for the showing of British-made motion pictures. The distributors' 
quota requires all distributors of foreign films to include a specific percentage of 
British-made motion pictures in their total film footage distributed in Great 
Britain. 

France 

A temporary screen quota and also a requirement that all foreign films designed 
for exhibition in France must be dubbed (substitution of French for American 



POSTWAR ECONOMIC POLICY AND PLANNING 2559 

dialog) in France, these films not to be more than 2 years old. The screen quota 
provides for the compulsory showing of French motion pictures in all French 
theaters for 4 weeks out of every 13 weeks. This screen time shall be reduced to 
3 weeks per quarter if, over a 2-year period ending June 30, 1948, or June 30 of 
any subsequent year, the French film playing time averages 5 weeks or more per 
quarter. The quota shall be eliminated entirely if, over a second 2-year period 
ending September 30, 1950, or September 30 of any subsequent year, the French 
film playing time continues to average 5 weeks or more per quarter. Otherwise, 
the quota for exhibiting French motion pictures shall continue indefinitely at 3 
weeks per quarter. 

Italy 

During the year 1946 foreign films may be imported freely but the revenue from 
their sale is nontransferable. The revenue, however, may be spent in Italy on 
items connected with the film industry. 

The Netherlands 

Although no official confirmation has been received, it is understood that the 
Netherlands Government recently decreed that foreign films shall be subject to 
an import quota and that American films shall be restricted to a specified per- 
centage of the playing time of the local motion-picture theaters. Furthermore, it 
appears that the Dutch are aiming at a newsreel monopoly whereby, for example, 
American newsreel companies would be denied the right to distribute their news- 
reels but may have their newsreel sequences included in a Dutch newsreel on an 
exchange basis. 

Portugal 

Official information has been received to the effect that Portugal contemplates 
on January 1, 1947, a decree law imposing a heavy tax on the distribution of 
foreign films (the United States trade states that its films represent 90 percent of 
all foreign films on the Portuguese market), the proceeds to be used for the support 
of a domestic motion-picture industry. 

Spain 

Exorbitant import duty on motion-picture films. All foreign films subject to 
import rights purchasable on the open market from domestic motion-picture 
producers to whom they are issued by the Government in proportion to production 
costs as a type of subvention. Special import taxes. Requirement that all 
foreign films must be dubbed in Spain. A dubbing tax. These imposts have 
been estimated by the American industry to amount to the equivalent of $30,000 
to $35,000 per motion-picture feature film imported. In addition, a State news- 
reel monopoly operates which prevents American news-reel companies from dis- 
playing their news reels in Spain but provides for the purchase of American 
news-reel sequences for inclusion in the domestic news reel. 

Germany and Austria 

The American industry is operating at present in these two countries under 
the control of the military authorities and perhaps as part of the United States 
Army's morale program. 

Union of Soviet Socialist Republics, Czechoslovakia, Poland, Yugoslavia, Bulgaria, 

Albania 

State controls or State monopolies operate in these countries. Very few 
American motion pictures have been sold in Soviet Russia during the past decade. 
The Motion Picture Export Association, a Webb-Pomerene corporation, has come 
to an agreement with the Czechoslovak Motion Picture Monopoly whereby it 
provides 80 American programs during 1946-47 under a 3-year license, the films 
to be distributed by the monopoly and dollar exchange to be furnished to the 
Motion Picture Export Association equal to the net revenue in local currency. 
It is understood that the American motion-picture industry does not operate at 
present in Poland, Yugoslavia, Bulgaria, or Albania, but unofficial reports indicate 
that the Motion Picture Export Association recently has concluded an agreement 
with the PoHsh State Film Monopoly (Film POLSKI) to become effective soon 
similar to the arrangement it made in Czechoslovakia, and also that represent- 
atives of the American film industry, including the Motion Picture Export Asso- 
ciation, are negotiating with the Yugoslav State Film Monopoly for the same 
purpose. 



2560 POSTWAR ECONOMIC POLICY AND PLANNING 

LATIN AMERICA 

Argentina 

Tax rebates for theaters showing national motion pictures during a given 
period. The rebates vary according to tlie share in the programs of the theaters 
of domestic motion pictures. A screen quota requires that domestic theaters 
devote a specified percentage of their screen playing time to the showing of nation- 
ally produced motion pictures. This percentage also is varied according to the 
classes of theaters. All motion-picture theaters are required to exhibit at least 
one locally produced news reel or documentary film at each performance. Fifty 
percent of the remittances abroad of motion-picture distributors is subject to a 
20-percent tax. 

Chile 

Distributors of foreign films are obliged to contribute 15 percent of the amount 
available for remittance abroad to a fund for financing domestic motion-picture 
production. 

Mexico 

A motion-picture screen quota is reported to be under consideration requiring 
that motion-picture theaters in the Federal District shall reserve a specified per- 
centage of their screen playing time for the showing of domestic motion pictures. 

FAR EAST 

Australia 

An exhibitor's quota and a distributor's quota. All motion-picture theaters 
must reserve a specified percentage of their screen playing-time for British motion 
pictures and motion-picture distributors must include a certain percentage of 
British pictures in their total releases. 

New Zealand 

An exhibitor's quota and a distributor's quota. Ail motion-picture theaters 
must reserve a specified percentage of their screen playing-time for British motion 
pictures and motion-picture distributors must include a certain percentage of 
British pictures in their total releases. 

Japan and Korea 

The American industry is operating at present in these two countries under 
the control of the mihtary authorities and perhaps as part of the United States 
Army's morale program. 

Mr. WoRLEY. Ordinarily we try to start and stop on time; so 
without objection we will stand in recess until 2 o'clock this afternoon. 

(Whereupon, at 12:15 p. m., the committee recessed until 2 p. m. 
of the same day.) 

AFTERNOON SESSION 

Mr. WoRLEY. The committee will be in order. 

The committee has received a telegram from Darryl F. Zanuck, 
vice president in charge of production, Twentieth Century Fox, which 
will be inserted in the record at this point. 
• (The telegram referred to follows:) 

West Los Angeles, Calif., December 19, 1946. 
Congressman Eugene Worley, 

House of Representatives, Washington, D. C. 
My Dear Congressman: I have heard today tliat you are having a special 
hearing tomorrow in Congress on the aspect of American films abroad. Un- 
doubtedly the viewpoint of American production will be ably represented at your 
hearing and this telegram is meant to convey only my own personal views. I 
have had the opportunity of traveling abroad before the war, during the war, and 
since the war and it is my professional interest to know and understand the foreign 
situation. During the past year Hollywood has produced more genuine worth- 
while films than at any time in its history and the greater majority of these films 
have truly reflected the many complexities of American life as does modern 
American literature. If certain films have overemphasized our riches or de- 
picted us as cattle rustlers it must be remembered that America is after all by 
comparison with the rest of the world a land of luxury, and that our Western 



POSTWAR ECONOMIC POLICY AND PLANNING 2561 

heroes have forever been popular in the literature of our Nation. To judge 
American films one must be personally acquainted with the thematic content of 
all American films. It would certainly be unfair as an example for a foreigner 
to judge American youth on the case of the four boys who started the fare that 
recently caused the collapse of a New York tenement. 

American films are generally a reflection of the American scene and it must 
also be remembered that at this very moment nationalistic movements are under 
way in every foreign country to encourage local film production, and to do so it 
is obviously necessary to discredit Hollywood production. This is not at all 
unnatural, as we know perfectly well that international trade follows the movies 
today as it once followed the flag and I can clearly understand the envy and 
resentment which certain foreign interests may reasonably feel when they contin- 
ually see the products of American invention on the screens of their homelands. 
However, it would be disastrous if we were so gullible as to swallow this bait. 
It is pleasant for us to understand the commercial motives behind this foreign 
criticism of American films but it must be remembered that these same foreign 
interests were the first ones to plead for our help before Pearl Harbor and that 
it was American films that first warned the world of the sadistic intentions of 
Hitler and Mussolini and it must also be remembered that American films were 
barred from Germany and Italy long before any other American product was 
subjected to Fascist prohibition. Russia is not alone by any means in its efforts 
to discredit Hollywood products. It is understandable that Russia does not 
want Europe to see the home Ufe of average Americans, as the comparison with 
communistic home life would be fatal for them. 

Hollywood welcomes sincere international competition but it cannot be 
achieved by unfair quota restrictions or censorship or unwarranted persecution of 
American product. Before coming to any conclusion I respectfully recommend 
that your committee view the following films all of which are being released dur- 
ing the Christmas season. The Yearling, The Best Years of Our Lives, Uncle 
Remus, Its a Wonderful Life, 13 Rue Madeleine, Duel in the Sun, The Razor's 
Edge, to mention only a few of the many splendid contributions of the last year. 
America has every right to be justifiably proud of Hollywood films and the story 
of democracy they have brought to the four corners of the earth. We have never 
produced an undemocratic film and I am positive that we never will. Now is 
the proper time for Congress to openly support us as other foreign governments 
are openly supporting their own products and discrediting ours. 
Sincerely, 

Darryl F. Zanuck, 
Vice President in Charge of Production, 

Twentieth Century Fox Studio. 

Mr. WoRLEY. This afternoon witnesses for the Motion Picture 
Association are scheduled to appear. It is my understanding that 
Mr. Joyce O'Hara, deputy for Mr. Eric Johnston, will present the 
witnesses. Mr. O'Hara. 

STATEMENT OF JOYCE O'HARA 

Mr. O'Hara. My name is Joyce O'Hara, and I am assistant to 
Eric Johnston, who is president of the Motion Picture Association. 

Mr. Chairman, at the outset I would like to say just a very brief 
word of appreciation as far as our industry is concerned for the work 
this committee is doing. It is refreshing and wholesome to find a 
congressional committee so desirous of doing something constructive 
to promote the foreign commerce of the United States. 

Mr. WoRLEY. Do you mean that is unusual? 

Mr. O'Hara. It has not always been so in the past. We are glad 
to cooperate with this committee in its efforts to encourage foreign 
trade and thereby create jobs at home. 

Mr. Johnson also would like it to be known to the committee that 
he appreciates the courtesy of allowing him to submit a statement for 
the record. He regrets he couldn't be present. He is at his home in 
Spokane. 



2562 POSTWAR ECONOMIC POLICY AND PLANNING 

This afternoon our association would like to present three witnesses. 
Mr. Francis Harmon, vice president, will tell you about our export 
corporation and our export business. Governor Milliken, of our 
foreign department will tell you about the practical difficulties we 
run into in restrictions throughout the world. Gerald Mayer, also 
of our foreign department, will tell you what we as an industry 
ourselves are trying to do to promote our own trade. 

That will conclude my brief statement, Mr. Chairman. 

Mr. "WoRLEY. May I ask, Mr. O'Hara, do you represent the 
Motion Picture Producers and Distributors Association? 

Mr. O'Hara. Yes. We represent a number of the leading pro- 
ducers, distributors, and some of the exhibitors. There is an inde- 
pendent producers organization of which Mr. Donald Nelson is head, 
and several exhibitors associations. "We only speak for our o^vn 
members. 

Mr. "\\' ORLEY. Could you give us the names of the companies you 
represent? 

Mr. O'Hara. I will ask Mr. Harmon to do that when he comes on 
the stand, if that is satisfactory. 

Mr. "W ORLEY. Very well. 

STATEMENT OF FRANCIS HARMON 

Mr. Harmon. I am Francis S. Harmon, vice president of the 
Motion Picture Association, under Mr. Jolmston, in charge of the 
New York office. I am also vice president of the Motion Picture 
Export Association. 

]\Ir. WoRLEY. Thank you. Be seated, please. 

Mr. Harmon. Mr. Chairman, I hope you won't hold it against me 
if I add that I happen also to come from the same district in Mississippi 
as the distinguished general chairman of your committee, Congress- 
man Colmer. 1 was editor and publisher of a newspaper there for 
some years. I mention this because I am interested in freedom of 
expression, whether it be through the press, through motion pictures, 
or through radio. 

Also before I joined the industry, I was for 2 years the national 
president of the Young ]\Ien's Christian Association, and after that 
for 5 years I was in charge of its international program, and traveled 
a good deal around the world; so v.hen I say that I am impressed 
with the world impact of American motion pictures, I am simply 
registering a conviction that I had prior to my relation with the motion- 
picture industry. 

After being here this morning and listening to the testimony, I 
think perhaps I may be of some slight use to the committee if I 
review ver^^ briefly in a few quick, bold strokes the general set-up of 
the industry in this country, because as one of the leading American 
exporters, what we do in the world market, of course, must rest upon 
the relatively secure foundation of our domestic market here. 

Briefly, then, this is an industry that has about 175,000 to 200,000 
people in its employ in this country. Thirty thousand of those are in 
Hollywood, 12,000 of them are in the 31 wholesaling centers, which we 
call film-exchange cities, in which we maintain some 310 different 
exchanges. 

Mr. WoRLEY. How many w^as that? 



POSTWAR ECONOMIC POLICY AND PLANNING 2563 

Mr. Harmon. Three hundred and ten. Then, there are 16,000 
theaters. According to our best estimate, there are 140,000 people 
that work for those theaters. 

Every day we spend more than a milhon doHars in the manufacture 
of American motion pictures. During the past 11 years American 
producers made an average of 528 feature-length films per year. The 
range was from a high of 621, I beheve, in 1938 down to 389 last year. 
However, the average number was 528. 

During that same 11 -year period we made an average each year of 
500 to 600 short subjects (1- and 2-reel films); and also each year we 
released 520 reels of news from the five companies that are engaged 
exclusively in the prodution of news reels. 

There are some 60 to 75 producers each year who make pictures in 
Hollywood. In 1945, for example, there were 68 different producers 
who submitted scripts and completed pictures to our Production Code 
Administration, the board of the Motion Picture Association that 
administers the voluntarily adopted production code of morals and 
good taste. 

Next, I believe you will be interested in the sources from which the 
motion pictures come. Over this same 11-year period two-thirds of 
our pictures were based upon original scripts, original screen stories; 
another 7 percent was based on stage plays; 17 percent was based on 
novels; 1 percent was based on great biographies that have been in 
print; about 7 percent was based on published short stories published 
in weekly and monthly magazines; another 2 or 3 percent was taken 
from miscellaneous sources. I mention these various sources of 
screen material in order to high light the fact that in a highly competi- 
tive industry with 65 to 75 producers making pictures each year, 
there is very strong competition for any good idea, story, novel, or 
play that would make an entertaining motion picture. 

It is hardly necessary to state that the commodity we have for sale 
is entertainment — but a type which contains ideas and information 
transmitted through the medium of this great modern popular art 
form. Hence those of us v> ho are here this afternoon speak not only 
for an industry that makes a product for sale but also for one of the 
great media of information and communication, and also for the most 
popular art form that the modern world has seen. 

In the domestic market, these pictures that go out into the channels 
of distribution, the circulatory system of the industry in this country, 
if you please, aggregate about 25,000 miles of film a day carried by 
600 trucks, many of them engaged exclusively in the business of seeing 
that films are delivered to the theaters v>'hich depend upon them for 
their program day after day. 

I think you will be interested in the way in which the motion- 
picture industry meshes in with so many other industries in this 
country from which we secure raw materials. For example, I hardly 
need to remind you that we are one of the biggest users of lumber 
among American industries, one of the biggest users of chemicals, 
that we use millions of ounces of silver, that we use thousands of 
bales of cotton, and millions of pounds of cotton linters in connection 
with the manufacture of film itself. We use plastics, whole carloads 
of nails, varieties of cotton goods including little items such as 12,000 
dozen cotton gloves per year. 



2564 POSTWAR ECONOMIC POLICY AND PLANNING 

When Mr. Donald M. Nelson was head of the War Production 
Board, I had to supervise preparation of a study of the raw material 
needs of the motion-picture industry. I have hero pages listing 
materials that during the war the Government authorized the indus- 
try to buy on priority because the war agencies during the war years 
felt that the motion picture was indispensable to the total job that 
we had to do. They were of that opinion because modern war, which 
is total war, is fought with film as well as bullets. You can mix the 
same chemicals one way and make smokeless powder and mix the 
same chemicals another way and get nitrocellulose film, of which we 
use more than 2,000,000,000 feet a year for positive prints. 

It is against this general industry background that I would like to 
say a few words now about the motion-picture industry in the world 
market. We have an audience in this country variously estimated 
from 60,000,000 to 100,000,000 people a week, but nevertheless one- 
third approximately of the production cost of our pictures comes 
from abroad. 

There are three points we want to consider regarding the American 
film industry in the world market. 

First of all, consider the value of the exhibition of American motion 
pictures to the other American businesses. I couldn't put it any 
more graphically if I sat here all the afternoon than Mr. Golden did 
this morning with the story about Adolph Menjou and the barber 
shop. Let me reiterate that every scene in every picture is a visual 
demonstration to potential consumers all over the world of American 
consumer goods in use, whether it be a barber chair or an automobile 
or a refrigerator or safety razor, or what have you. 

In the second place, our films are purveyors of the Am.erican way of 
life — and I don't want to use that purely as a glittering generality. 
One point that hasn't been mentioned so far I would like to stress, 
and that is the English language as part of the American way. I 
have a boy 14 years old. In September we had quite a debate at 
our house as to what foreign language he should take in senior high 
school. 

I think 3^ou, Mr. Chairm.an, might be interested to learn that he 
chose Spanish, but there was some lively debate as to whether his 
choice should be French or Germ.an. If that sam.e 14-year-old boy 
lived in Latin Am.erica or Europe, there would have been no occasion 
for debate. English would have been his choice for a secondary 
language. When Cecil B. de Mille came back from, an extensive tour 
of Latin America, after speaking in Rio and other cities, he said that 
he found alm.ost without exception that the youngsters of Latin Am.er- 
ica were choosing English as their secondary language because they 
heard it on the screen. 

Dr. Elliott. Does he mean by that that he has heard English or 
''American" spoken on the screen? 

Mr. Harmon. Well, I noticed that weeks ago in Denmark they 
published a special dictionary of "Am.erican" for film, fans who heard 
a lot of ''American" on the screen that they hadn't learned about in 
m.ore conservative dictionaries they had in use. This new dictionary 
was definitely "American." 

Dr. Elliott. I wonder if that would also apply to the language of 
Texas. 



POSTWAR ECONOMIC POLICY AND PLANNING 2565 

Mr. Harmon. I think "the law west of the Pecos" has been pretty 
well exhibited all over the world, so they get that, too. Also, I am 
sure the Yellow Rose of Texas is one of the most popular tunes in 
motion-picture theaters around the world. 

Seriously speaking, American films do help promote the knowledge 
of English as a world tongue. Please keep in mind that the screen 
only found its voice 20 years ago, a bare 4 years before Japan in- 
vaded Manchuria, so that if you give English 50 'or 75 or 100 years 
on the screens of the world, I venture to say, that perhaps the greatest 
contribution American films make would be toward the development 
of a universal tongue in which the masses of people may understand 
each other. 

Mr. WoRLEY. As a Texan, the Chair deeply appreciates those 
observations. 

With further reference to the dissemination of the American way, 
take the matter of American history. When the World's Fair was 
about to open in New York, its representatives asked Will H. Hays, 
who at that time was head of the Motion Picture Producers and 
Distributors, to arrange an exhibit at the fair. The answer was that 
our product was on exhibition every day all over the world. We 
finally agreed with the officials of the fair, that we would see if we 
could assemble a cavalcade of American history, without shooting a 
foot of film by simply taking excerpts from previously released pic- 
tures and putting these clips together in chronological order with a 
com.mentary by a historian on a new sound track. 

Mr. de Mille undertook, that project, and I had the privilege of 
working with him. and Dr. Jamxs T. Shotwell, the historical consult- 
ant. We m.ade a cavalcade of American history running 2 hours and 
17 minutes titled "Land of Liberty." Not a single foot of that film 
was shot for the purpose, yet it fairly well covers the whole story of 
Am.erica. 

We had in it excerpts from 124 previously released pictures, and 
there is not a month that passes now that additional pictures dealing 
with the American scene and American Instory aren't com.ing from 
the studios of HoUywood. For example, v/e found nobody had dealt 
with the Lewis and Clark Expedition, one of the greatest sagas in 
the developro.ent of this country. Two weeks ago there came to me 
a report from our title registration bureau. One of the major studios 
had bought a book telling the story of the Bird Wom.an and how she 
helped Lewis and Clark and registered its title. That gap will be 
filled within tlie next year or so. 

Every day in nearly all the countries of the world there are American- 
made motion pictures that show Aroericpn fife. I want to say very 
frankl}?- to you that not all of that is a favorable exposition. 

Mr. WoRLEY. We are interested in that point. Would you elabo- 
rate on that? 

Mr. Harmon. I will be glad to. I think it boils down to a whole 
philosophy of fife, and I am., talking now personally as a citizen and 
not as the spokesman for anybody but Francis Harmon. My personal 
philosophy is that there is no one book, no one play, no one radio 
program., no one motion picture, that can do justice to a country as 
varied, as large, as diverse as the United States. 

Mr. ^^ ORLEY. Is there one that could do injustice to a country such 
as this? 

99579— 47— pt. 9 4 



2566 POSTWAR ECONOMIC POLICY AND PLANNING 

Mr. Harmon. My feeling is, sir, that over a period of 10 years a 
person who sees 25 movies a year would get a fairly accurate cross 
section of American life. It is not all good, it is not all bad. Also 
I think a person in some other country who over a period of 10 years 
did see that kind of cross section of life in America would reach the 
very positive conclusion, that the Americans certainly aren't afraid 
to show both the good and the bad without pulling any punches. 

In other words, 4 would worry very much if only the more perfect 
side of American life were shown overseas because I think it would 
subject us to the charge that we were either afraid to show the seamy 
side or that we were deliberately, through government controls or 
otherwise, pulling our punches and not showing every facet of our life. 

That doesn't mean, sir, that we as a great industry and medium, of 
communication and art form don't face very heavy continuing 
responsibilities. 

I suppose in that connection I ought to add that my first work with 
the industry was as a member of the Production Code Administration, 
the board that administers our voluntarily adopted code of morals 
aad good taste. 

During the 11-year period for which I have the statistics here, the 
Production Code Administration wrote 52,105 opinions relative to 
the suitability under the code, from a moral and good taste standpoint, 
of this great body of screen material that came from so m.any, many 
different sources. Last year, for example, there were 154 scripts 
that had one or more themes that dealt with Latin America. We 
have got two problems: One, to see that the other fellow is presented 
accurately because he is very quick to catch any mistakes, whether 
characterization or costumes or songs, or what have you; and the 
second to present our own country fairly. 

Mr. WoRLEY. On that point, Mr. Harmon, doesn't the United States 
motion-picture industry gage or base its pictures, from a box-office 
angle, purely upon a domestic market or rather primarily upon a 
domestic market, rather than a foreign mar-ket? 

Mr. Harmon. No, sir; it is gaged upon a world market. First of 
all, thanks to the wisdom of the Congress, every effort to put restric- 
tions upon art have been voided. Therefore, artists from ail over 
the world have been able to come here and appear on the screens in 
Hollywood-made pictures. Some of these artists, for instance, Miss 
Ingrid Bergman, today, or Greta Garbo, 8 or 10 years ago, have 
enormous folio wings overseas, perhaps larger clienteles even than 
they had in this country. 

Mr. WoRLEY. I have been informed — I don't know how reliably — • 
that nearly all the production was based on domestic appeal. Now, 
you get about 60 percent of your gross income from American 
patronage 

Mr. Harmon. 60 to 70 percent of our production costs. 

Mr. WoRLEY. And from 30 to 40 percent overseas. Therefore, 
it would seem reasonable and logical that you would choose the 
script on the basis largely of what appealed to customers in the United 
States. Am I correct in that assumption? 

Mr. Harmon. Yes and no. Take Tolstoi's Anna Karenina, in 
which picture Greta Garbo appeared. That picture was much more 
popular in Europe than in this country. True enough, it wouldn't 
have been made unless there were millions of Americans interested 



POSTWAR ECONOMIC POLICY AND PLANNING 2567 

in seeing it; (a) they were interested in seeing Tolstoi's novel brought 
to the screen because they had read it; (6) other millions were interested 
in seeing Garbo in anything in which she appeared. But these same 
considerations were applicable in the countries of Europe. Now the 
company that made the film — because it is one of the leading exporters 
of American pictures — would certainly keep in mind that there 
would be a very large market for that picture in many foreign countries. 

During the war in an effort to strengthen the good neighbor policy, 
we also deliberately chose a number of locales and stories about Latin 
America and Latins. As I mentioned a moment ago, last year alone 
there were 154 scripts read by our board in Hollj^wood wherein either 
the characters or the costumes or some scene or the plot itself per- 
tained to Latin America. There were some 250 pictures last year in 
which there were what we call a Latin-American angle, in which we 
had to either watch the pronunciation in some sequence or some bit 
of costuming, and so on. I don't think it would be completely accu- 
rate to say we are guided by the domestic market. The situation 
varies from company to company, depending upon the importance 
of the foreign market, the nature of its source material, the type of 
stars appearing in its releases, and the general set-up of that particular 
organization. 

Mr. VVorley: We are glad to have that information. Thank you. 
You were saying, I believe, that you were very careful not to include 
anything in pictures which might offend foreign countries. 

Tvlr. Harmon: Yes, sir. For example, about the time Dwight 
Morrow went to Mexico as ambassador, tliere were a lot of our cowboy 
pictures showing ^fexicans as "heavies". Today if a Alexican were 
shown as a "heavy" in a western 

Mr. WoRLEY. You mean the villain? 

Mr. Harmon. Yes; a villain. In that case there would also be 
some Americans who would be in that same picture as villains and, 
whereas in the old days it would have been the Texas Rangers who 
might have gotten all the honors for cleaning out the desperadoes, 
now the honors would be divided with the Mexican rurales working 
together with the Texas rangers to round up both the American and 
Mexican villains. 

Now, it didn't cost us anything to change this situation and rnuch 
good resulted. The change came frankly as a result of the activities 
of Will Rogers, who was then one of the most popular people in Holly- 
wood, our Ambassador Dwight ^Morrow, and Lindbergh— a popular 
hero at the moment. A resolution passed by our association then 
is now one of the important sections of our code. That section first 
read: 

The history, institutions, proniinent people, and citizenry of other nations 
shall be represented fairly. 

As our social responsibility grew, and also our awareness of the neces- 
sity for presenting our own country fairly, we changed that code 
section to read: 

The history, institutions, prominent people, and citizenry of all nations shall 
be represented fairly. 

That word "all" instead of "other" was substituted in order that 
we might have larger self-regulatory responsibility in seeing to it that 
America was represented fairly on the screens of the world. 



2568 POSTWAR ECONOMIC POLICY AND PLANNING 

I believe that I have now come to the point at which you and your 
associates have the greatest interest; namely, the problems incidentjto 
export of American films as seen against the background of this general 
story that I have given you. May I then divide the world market 
into four categories? Into the first I would like to put the British 
Isles or the British Empire, because my associates, Governor Milliken 
and Mr. Mayer, will talk more about them. 

The second category would be the other free markets of the world, 
such as France, Belgium, Scandinavia, and Latin America. My 
associates will discuss categories I and II. 

The third category would be the countries bordering on Russia that 
are now within the orbit of the Motion Picture Export Association. 

The fourth category would be the occupied countries of Germany, 
Korea, and Japan. 

Now, if it is agreeable to you gentlemen, I would like to deal with 
the last two categories very forthrightly and in whatever detail you 
want. The Motion Picture Export Association was organized a few 
months ago to accomplish several purposes. It was organized under 
the Webb-Pomerene Act in order to enable us to deal with three types 
of situation overseas. 

The first was state monopolies such as we are confronted with in 
the small countries of eastern Europe and in Russia. The second is a 
little different type of monopoly such as we face in Holland — an 
exhibitors' monopoly in the form of a guild that has the blessing of the 
Dutch Government. The third is the necessity of working through 
and with the military governments in occupied Germany, Korea, and 
Japan. 

We organized the Export Association under the legal privileges 
which the Congress granted in the Webb-Pomerene Act. We or- 
ganized at this time for another reason. I told you that we made 528 
pictures a year for the past 1 1 years. ^^Tien the war ended and Europe 
was open again, we had a huge accumulation of product. The mem- 
bers of our Export Association had between 2,000 and 2,500 feature- 
length pictures themselves and it was imperative not to "dump" this 
product indiscriminately. 

May I stop to tell you who the members of the export association 
are? I would like to put into the record, if I may, Mr. Johnston's 
annual report, which on the second page will give you the complete 
roster of the members of the Motion Picture Association of America, 
Inc. 

Air. WoRLEY. That is the ^Motion Picture Association? 

Mr. Harmon. Yes. 

Mr. WoRLEY. Thank you. (See exhibit 1, p. 2594.) 

Mr. Harmon. Now, the members of the ^Motion Picture Export 
Association are subsidiaries of or national distributors of motion 
pictures in the United States. They are Columbia Pictures Inter- 
national Corp., Loew's International Corp., Paramount International 
Films, Inc., RKO-Radio Pictures, Inc., Twentieth Century-Fox 
International Corp., Universal International Films, Inc., United 
Artists Corp., and Warner Bros. Pictures International Corp. 

Now, United Artists is just what its name implies. It is a dis- 
tributor group that has in it between 25 and 30 unit producers who 
make anywhere from 1 to 5 pictures per year. United Artists is not 
a member of the Motion Picture Association. It is a member of the 



POSTWAR ECONOMIC POLICY AND PLANNING 2569 

Motion Picture Export Association, but it has not been able to date 
to get all of its unit producers to authorize it to release their product 
through the Motion Picture Export Association. 

For example, United Artists has a stock pile of, say, 150 pictures 
that have accumulated during the war. We will have, by the end 
of the year, more than a hundred of those 150 pictures under the 
control of the Motion Picture Export Association. We have vir- 
tually all of the product of the other companies. 

Mr. WoRLEY. How many film companies are there in Hollywood? 

Mr. Harmon. There are 8 in the Export Association, and that 8 
includes United Artists with about 20 of its 30 unit producers. 

Now, the other three national distributors, namely, Monogram 
Pictures, Republic Pictures, and Producers Releasing Corp., are not 
members of the Motion Picture Export Association. They have been 
invited to join. The door is open, and we want them in. Legally, 
even if we didn't want them, in, they would have a right to knock at 
the door and be admitted. 

Mr. WoRLEY. They don't belong, you say? 

Mr. Harmon. The invitation lias been extended, the latchstring is 
on the outside. We wish they were in, Mr. Chairman, because we 
believe that the basic motivation of export, which is to avoid the 
dumping of this accumulation of product and to select from this accu- 
mulation of product the pictures which we deem most suitable from all 
standpoints for release in each of these 13 export countries, is a whole- 
some constructive public service. 

Mr. WoRLEY. Wiiy don't they join? 

Mr. Harmon. I can't speak for them. The indications are that 
they fepl that it is to their immediate interest to market their product 
wherever they can. 

I believe, the set-up of Export, will interest you gentlemen. From 
this stock pile of 2,500 pictures the management of Export selects the 
pictures v%'}iich any particular market can absorb. Now, there is no 
market outside of Great Britain that can absorb all of our pictures. 
If we release 400 new pictures this year, France might absorb 175 or 
180, Holland might absorb 104, but 100 would be a pretty good number 
for any of the smaller countries of the world. Now, the success of our 
export organization lies in the fact that the businessmen who founded 
it agreed to divide whatever profits came from an export territory on 
the basis of the domestic grosses of the members. 

Mr. WoRLEY. "Wliether they showed the pictures abroad or not? 

Mr. Harmon. That is right. For example, if company No. 1 does 
10 percent of the business in the United States in 1946, company No. 1 
will get 10 percent of whatever profit we make from releasing pictures 
in Rumania, whether any of company No. I's pictures are showni there 
or not. 

That gives the widest range of selectivity to the management of the 
Export Association. 

I think I can answer two or three questions that came up this morn- 
ing, if you will let me use Poland as an illustration of what I am talking 
about. 

Dr. Elliott. Will you forgive me for interrupting? 

Do these three independents who do not market through the 
Export Association form a part of the Society of Independent Motion 
Picture Producers? 



2570 POSTWAR ECONOMIC POLICY AXD PLANNING 

Mr. Harmon. No, sir; the Society of Independent Motion Picture 
Producers, headed by Donald M. Nelson, is made up of producers 
releasing through United Artists, some of the producers who release 
through RKO, and some who release through Universal International. 
To my knowledge none of the producers who release through Mono- 
gram, for example, are members of that society. 

Dr. Elliott. For purposes of the record, we have invited Mr. 
Nelson, who obviously couldn't get here in time for this meeting, to 
submit the same sort of statement that Mr. Johnston had this morn- 
ing. I suppose that in all justness we ought to invite statements from 
these three members of the industry, Mr. Chairman. 

Mr. WoELEY. Yes; we should. 

Dr. Elliott. To make a statement. 

Mr. Harmox. The companies releasing through Monogram^ and 
P. R. C. also have a society known as the Independent Motion Picture 
Producers Association, and their president is Mr. I. E. Chadwick. 
My last information was that Mr. Chadwick was quite ill. 

Dr. Elliott. Do they have a Washington ofFir-e? 

Mr. Harmox. Xo. sir. Their group makes many of the so-called 
western pictures, and other action pictures. They do not have the 
investment in studio space or the more elaborate organizational set-up 
that the larger producers have. 

Dr. Elliott. Thank you, Mr. Harmon. I am sorry to have inter- 
rupted vou. 

Mr. WoRi-EY. You were talking about Poland. 

Mr. Harmon. Yes. The general manager of the Export Association 
is in Europe. Mondav a cable came from him in which he submitted 
a deal which was unanimously approved, calling for immediate release 
of 65 of our feature pictures in Poland. 

In Poland there is a state monopoly known as Film Polski. Accord- 
ing to this deal the Export Association \^'ill nominate 100 pictures 
from its stock pile of 2,500. From this list of 100 nominations the 
Polish film monopoly will select 65 pictures. The agreement stipu- 
lates that in any city with 4 theaters or more, all 65 of those pictures 
will be played during 1947; in cities with 3 theaters, at least three- 
fourths of those 65 pictures will be released; in cities of 2 theaters, 
at least 50 percent of the pictures; and in little towns with 1 theater, 
at least one-fourth of the 65 pictures will be shown. 

Now, we could be criticized by those who do not know the full 
story for delaying these many months in getting our product into 
Poland. We could, perhaps, have gotten pictures in earlier, but it 
would have done very little good, gentlemen, to have gotten them in, 
unless the contract stipulated that they were to be played. Frankly, 
we are interested in actually getting quality American pictures on the 
screens of Poland. 

The city of Warsaw had 70 theaters before the war; now, there 
are 4. In Warsaw the stipulation is that 35 percent of the total screen 
time will be for these American pictures. Mr. Maas, the general 
manager, cabled he was in Warsaw last week and found three Russian 
pictures and one French picture playing in those four theaters. 

We are selling 65 pictures to the PoHsh monopoly out of a total of 
175 pictures, which it proposes to release in 1947: 30 Russian. 30 
French, 30 British, 20 from miscellaneous sources, and 65 from the 
Motion Picture Export Association of the United States. 



• POSTWAR ECONOMIC POLICY AND PLANNING 2571 

Tho Polish Government is advancing dollar exchange to pay our 
out-of-pocket expenses: preparing the films with Polish subtitles, 
making the positive prints, and shipping. We agreed lor the Polish 
zlotys to be blocked for the first 6 months of 1947. 

Mr. WoRLEY. Polish what? 

Mr. Harmon. The Polish currency. We agreed that amounts due 
us might be blocked. We are doing that as a further indication of our 
desire to render a public service and also to get American pictures 
back on the screens of Poland as quickly as possible. We have a right 
to cancel this contract June 30, unless we have been able to work out 
some kind of an exchange arrangement that is satisfactory^ We want 
to keep our pictures on the screens of Poland. 

I was personally in Czechoslovakia in August. Conversations witb 
our Ambassador, Mr. Lawrence Steinhardt, underscored the im- 
portance of getting American films to Czechoslovakia as soon as 
possible. At his instance, I traveled 150 miles to meet the Com- 
munist Minister of Information and the members of his staff and 
invite two representatives of the Czechoslovakian film monopoly to 
come to New York for negotiations. The Czech deal followed the 
same general lines as that more recently consummated with Polanfl. 
We nominated 120 pictures for Czechoslovakia, from which they 
selected 80. We are getting remittance in dollars starting this month. 

I know you will be interested in learning that the first picture we 
released in Czechoslovakia v/as Wilson, that to its premiere in Prague 
came the President of the Republic, and the members of the Cabinet, 
and that it has attracted very great attention ever since it opened 
several weeks ago in the city of Prague. 

Mr. WoRLEY. I saw that picture in Greece, in Athens, right after 
the liberation, and the reaction there seemed to be excellent. 

Mr. Harmon. May I mention for a moment the situation in Hol- 
land because, whereas Czechoslovakia and Poland illustrate the prob- 
lems in eastern Europe with state monopolies Holland illustrates a 
different kind of problem. There you have a little country of great 
traders who over hundreds of years have made Holland one of the 
leading trading nations of the world. 

The Dutch are coming back fast in their economy. It so happens 
that about 98 percent of the exhibitors of Holland are organized into 
the Bioscoop Bond, a very well integrated, hard-hitting exhibitors' 
monopoly. We have gotten licenses to take into Holland 104 pictures. 
We have joined the Bond as the result of some negotiations this 
summer, which we think over a period of a decade will tend to liberalize 
and increase the number of theaters in Holland as outlets for our 
market. The Dutch today have only one-half as many theaters as 
Belgium with approximately the same population. 

Mr. WoRLEY. On that point, does the Export Association own 
any outlets or theaters in foreign countries? 

Mr. Harmon. We bought one theater from the Alien Property 
Custodian in Holland this summer, a German confiscated property. 
We bought it in partnership with the Rotterdamsche Bank because in 
Holland the crux of the problem was to see if we could force their 
tightly organized exhibitors monopoly to liberalize the theater situa- 
tion and put up enough theaters to meet the needs of the people of 
Holland, who were standing in line to get in to a totally inadequate 
number of retail outlets for our product. 



2572 POSTWAR ECONOMIC POLICY AND PLANNING 

We are not in the business of owning theaters, but we have been ad- 
vised that we can legally own 8 few show windows in order to demon- 
strate the Export's product, which is our main function. 

Dr. Elliott. May I ask one question? 

Mr. Haemon. Yes; of course. 

Dr. Elliott. It is true that a great many of your members own 
theaters, is it not? 

Mr. Harmon. Yes; that is certainly true. 

Dr. Elliott. So that you are not entirely without avenues of out- 
let inside these countries. 

Mr. Harmon. Yes, sir. Within the past 2 weeks we have had a 
vivdd illustration of the difficulties that we continue to face in Holland. 

The Minister of Education, under whose jurisdiction the motion 
pictures come, has promulgated a decree and turned it over to the 
Broscoop Bond to administer in accordance with the usual practice in 
Holland to have guilds carry out these administrative functions. 

That decree with 19 paragraphs places very severe restrictions upon 
American motion pictures, including an exhibitors' quota of 28 weeks 
out of 52 for our films which we are opposing. The decree imposes 
restrictions on exchange with 8,000,000 guilders set aside for all film 
imports for the year ending August 31. They wanted to restrict our 
share of the total to 50 percent. With the aid of our Ambassador 
and the State Department we have gotten the American share up to 
60 percent. These restrictions, some petty and some very basic, are 
a further illustration of what the gentlemen on the stand this morning 
documented for your committee, as to the problems that confront 
American films. 

I suppose one of the most serious problems right now is the desire 
of the Dutch Government to establish a Dutch newsreel and force all 
newsreel organizations in other countries to supply the material that 
would go into that newsreel. We are declinmg to participate and 
insisting upon the free release of American newsreels in Holland in 
the same way that any other medium of public information should be 
made available to such exhibitors in Holland as want to buy it and 
play it and such people as want to see it. 

We expect to adhere to that position straight through because we 
think that is basic and we could not deviate from it without doing 
violence to basic principles such as those Mr. Johnston put into your 
record this morning. 

Mr. WoRLEY. How do j^ou determine what type picture shall be 
exported? 

Mr. Harmon. Well, we put into the minutes of the Export Asso- 
ciation the following formula on that, about a month ago: First, we ask 
each cop3^right owner to take all pictures which are legally under our 
control and divide them into four categories: The pictures that the 
company itself feels ought not to be sent to any export territory; 
second, pictures that the company itself feels shouldn't go to one or 
more named export territories — a picture may be all right for Rumania 
and not for Holland, in the opinion of the company itself — third, 
pictures that the company itself feels would not enhance the com- 
pany's prestige — the picture is all right, but since they have got this 
huge stockpile they say, "We would rather have you use picture A 
instead of picture B, because it would enhance our company's pres- 
tige." Having gotten the company's own opinion, we then come out 



POSTWAR ECONOMIC POLICY AND PLANNING 2573 

with a very considerable residuum of maybe 1,500 of these 2,500 pic- 
tures. At that moment the ExjDort Association calls upon the Motion 
Picture Association, which has an international department that tries 
to look after questions of policy, and we invite the Motion Picture 
Association in the person of Mr. Milliken and Mr. Gerald Mayer, 
who are, I believe, to follow me to this table — through an advisory 
group, a sort of a panel, if you please, to give the Export Association 
the benefit of their experience and advice as to which of the pictures 
on the Export Association's list should go into a named country. 

In the last analysis the management of the Export Association 
reserves the right to make the decision in the same way in which 
any of its member companies would reserve that right in a free market 
like France, for example. 

Mr. WoRLEY. Do the officers of the Export Association screen the 
pictures, and see them themselves? 

Mr. Harmon. The process would be like this — let's take Poland, 
for instance. We have to nominate 100 pictures. I suppose there 
would be 25 pictures which we could put on that list without going 
to any records. We have seen the pictures ourselves, we know the 
impression they made in this country, we know that they are definitely 
pictures to be included. We also know X number of pictures that 
under no conditions would we want to include in that list. In be- 
tween those two certainties would be the zone of honest difference of 
opinion and the zone of doubt, and in that zone we sould screen the 
pictures, study the pubhshed reviews, study our own confidential 
review of every picture which we have in our files and which gives 
us a very good analysis of the picture content; and on the basis of 
the study of the printed reviews, our confidential analysis and the 
screening, the final decision would be made. 

Mr. WoRLEY. Do the film companies that are not members of 
your Export Association use any screening process? 

Mr. Harmon. They would decide within the company as to 
whether they wanted to send a particular film anywhere, or, second, 
whether it was a picture they wanted to send to one country and 
not to another. 

Mr. WoRLEY. Does box-office value play much of a part in the 
decision? 

Mr. Harmon. There are a number of factors. Of course, it plays 
a part. 

Mr. WoRLEY. Is it the primary factor? 

Mr. Harmon. The smaller corapanies such as the three mentioned, 
often do not maintain their own exchanges in the smaller foreign 
countries. Instead they sell to a local concessionaire. Here is a 
foreigner who has been handling pictures, we will say, in Iran or Iraq, 
and the company may not have an exchange there. Through his 
New York or Hollywood contact the local distributor arranges to 
buy rights and he designates which pictures he wants and selects 
them on the basis of his own experience in selling pictures in his home 
country. 

Naturally, such a concessionaire would not be motivated by the 
same considerations for portraying America in the best possible light 
as an American would who was local representative for a company 
in some foreign land. 



2574 POSTWAR ECONOMIC POLICY AND PLANNING 

Dr. Elliott. May I ask a question about the extent of your opera- 
tions as an export corporation? 

Mr. Harmon. Thank you for asking that. I should have put it in 
the record earher. The Export Association has exchisive rights to 
distribute the films of its members in the following countries: Holland, 
where we face this exhibitor monopoly; the Dutch East Indies; Russia; 
Poland; Czechoslovakia; Hungary; Rumania; Bulgaria; Yogoslavia. 
Then, the third category, the occupied countries: Germany, Austria, 
Korea, Japan. 

Dr. Elliott. In fact, then, your selective process through the 
Export Corporation applies only to these countries? 

Mr. Harmon. That is correct. The selective process that I have 
outlined would apply only to these countries, but the fact that the 
directors of the Export Association were willing so recently to adopt 
such a meticulously worked-out plan for selecting pictures in these 
territories strengthens our hope that the same self-regulatory pro- 
cedures which finally developed into the industry's Motion Picture 
Production Code 16 years ago will lead these companies themselves 
more and more to exercise an increasing degree of selectivity in the 
free markets also. 

Mr. WoRLEY. Don't you think that practice ought to be extended 
to all films for export? 

Mr. Harmon. Personally, I do. 

Mr. WoRLEY. In all countries? 

Mr. Harmon. Practically; it is not feasible at this time. It may 
be possible sooner than might otherwise be expected, depending upon 
how efficiently and intelligently the Export Association is managed in 
1947 and 1948. I feel that if we demonstrate the wisdom of the basic 
philosophy underlying the Export Association, its facilities and 
machinery w^ill be used to a greater and wider degree in the years 
ahead. 

Mr. WoRLEY. Do you know of any countries which exercise censor- 
ship over the export of their own films? 

Mr. Harmon. I do not, of my own knowledge; no, sir. 

Mr. Worley. Does Russia? 

Mr. Harmon. Well, of course, in Russia, the whole motion-picture 
industry is a State operation. Therefore, the pictm'es they make, the 
pictures they release and pictures they exhibit are pictures that follow 
whatever the Government line is at the time. 

Dr. Elliott. They are, so to speak, censored at bhth? 

There is one question that is quite interesting, I think, in the 
light of the obvious interest of the members of this committee in 
good pictures being presented abroad, that is bound to reflect ulti- 
mately on the arrangement that you have just described and the need 
for its extension. Unless the industry is prepared to undertake self- 
regulation on a broader scale than merely dealing with State mo- 
nopolies, State territories, and exhibitors' monopolies, the pressure 
will grow from political sources to see that proper selection is made 
some other way. It w^ould seem to be a case where self-regulation 
would be in the interest of the industry. 

Mr. Harmon. May I be frank here and speaking as an individual, 
pose a very hard case? Under the Export Association we are in- 
terested only in the total income because, it doesn't make any differ- 
ence whether any particular company's product is selected for Holland 



POSTWAR ECONOMIC POLICY AND PLANNING 2575 

or Czechoslovakia or any other country. The net profits are divided 
on the basis of domestic grosses of all our members, no matter whose 
pictures play. 

But look at the problem elsewhere. The same company sent 
"Young Mr. Lincoln" and "Jesse James" to Latui America in the 
same month, To put it in a semihumorous vein, "Jesse James" paid 
the transportation of "Abraham Lincoln" throughout Latin America. 
This is not hard to understand. In the Lincoln picture there was a 
great deal of conversation and speech making, and it was hard to get 
over in another language. Also, you had an audience in many, 
many scores of Latm-American theaters where they weren't too well 
educated in Spanish and didn't know any English. They had to be 
able either to read the Spanish subtitles or understand the English 
dialogue in order to appreciate the picture. 

"Jesse James," on the other hand, was a cops-and-robbers picture, 
packed with action. It didn't take much knowledge of either Spanish 
or English to understand the action in that picture, so this action 
picture went over with the mass audience; whereas the Lincoln picture 
that depended on talking, required a much more discriminating 
audience with a higher level of education either in English or in 
Spanish. 

Now, it was pretty largely a case of that company sending both 
or sending neither, and both of those characters, Abraham Lincoln 
and Jesse James, came straight out of the American scene. They 
weren't contemporaries, but I think their lives did overlap, and they 
both did live and both did get around a good deal and both left an 
impact on American life. 

I don't like to mention them in the same breath, because, of course, 
we all recognize that Abraham Lincoln is one of the great figures of 
all history, but I cite the two together in order to illustrate how 
difficult a problem we are dealing with here. 

Dr. Elliott. I can see its great difficulty, and from a box-office 
point of view I should think from what you said there is no ciuestion 
involved in a choice of this sort, but I would like to just ask this 
question about it: From the point of view of getting self-regulation, 
you have two problems in addition to the ])ox-office problem that 
you have spoken of, I should think. One of them is to give a fair 
deal to the small independent exhibitors who do not have marketing 
outlets and who might feel they would be left out of an arrangement 
of this kind. I can conceive that they would present quite telling 
testimony to that effect, if called upon. And the other one would 
be the question of independent exhibitors with separate sales forces 
in Europe and elsewhere, all over the world, who are vieing with each 
other to make a record for the distribution of their pictures. 

They might be quite willing to accept the pooling arrangement 
that you have for an area where they were competing against com- 
plete monopoly, but they might be unwilling to accept that arrange- 
ment in a competitive market. 

Mr. Harmon. That is a fair statement at the present time. They 
are unwilling to do so in the highly competitive markets. 

Dr. Elliott. That leaves us with a problem, doesn't: it, of working 
out some method of agreeing to view these pictures in the light of 
their suitability as true vehicles for American ideals, even allowing 
that "Jesse James" is a certain contribution to the American epic? 



2576 POSTWAR ECONOMIC POLICY AND PLANNING 

Mr. Harmon. It is definitely a continuing problem. I have been 
with the industry now exactly 10 years. I have hopes that the 
industry will solve it over a period of time through self-regulation in 
the same way we have solved, very well, problems of the moral content 
of pictures through the voluntary procedures of the production code. 
I would go back again to what I said a while ago. The industry 
itself wrote that paragraph: 

The history, mstitutions, prominent people, and citizenry of other nations shall 
be represented fairly. 

And when you have 154 scripts on Latin America in which you make 
very sure that these people are presented accurately and fairly, I 
think that is an awareness not only of good box office but also of 
social responsibility. 

I think the fact that we changed the code ourselves to make it 
apply also to the presentation of American history and people is 
significant. 

Dr. Elliott. Does that code, by the way, apply to all producers 
in the United States? 

Mr. Harmon. It applies to producers that supply about 99 per- 
cent of the screen time. The only people who are under compulsion 
to use it are the producers and distributors who are themselves signa- 
tories to the code, but the fact rem.ains that the people who supply 
films occupying more than 99 percent of the total screen time in this 
country do use it. 

The ones who do not use it are: The makers of a handful of 
pornograhpic domestic films and distributors of a certain number of 
foreign films that are released only in 10 or 12 cities. 

Dr. Elliott. Those are both good points. There is one other one 
perhaps in connection mth the difficulty that you have in controlling 
this problem from the point of view of numerous distributors abroad, 
all vying with each for markets, and so on. 

Do you see any possibility of cutting down the effect of that? If I 
understand the effects from what the committee was able to judge 
abroad, it is this factor of highly competitive salesmanship of inferior 
products, the taking up of a large percentage of the booking time of 
local exliibitors in foreign countries — that is the sorest point with 
most local film industries from the point of view of protection of 
native industry. Am. I wrong in that? 

Mr. Harmon. Well, of course, there are some countries such as 
Holland that have no native industry in the production end at all. 
There is no production in a country like Holland. 

Many Latin-American countries have little or no production. 
Mexico has an increasing volume, and so does Argentina. In countries 
that have production, of course, we run head-on into the matter of 
the division of screen time. Now, we feel that the top-flight American 
product has the best chance in those countries because it is qualitatively 
the best that is shown there. We believe, therefore, that on the basis 
of competition alone the local-made native product, plus our quality 
films, can compete with real success against the inferior American 
product. 

We think the problem is in the countries that do not have any 
production of their own, where marginal theaters may play this inferior 
American product. 



POSTWAR ECONOMIC POLICY AND PLANNING 2577 

Dr. Elliott. Just as a question: It is not only these marginal films 
in nonproducing countries, but the resentment of local film industries 
at having so much of the time taken up by inferior films sold at very 
low prices through uncontrolled competitive situations where the 
foreign outlets are, so to speak, cutting each other's throats. It is 
a form of dumping, I suggest — if you want to say it that way. They 
are sure of a domestic market, they get a marginal return on foreign 
distribution, and, therefore, they can sell at very little return in 
terms of rental values for the foreign distribution. 

Mr. Harmon. My personal feeling is that we may have a con- 
tinuing problem for another 2 or 3 years, but as soon as we get 
straightened out after the war, I don't believe that the dumping of 
this inferior product by these nonmembers of Export in either the 
free territory or Export territory will be as serious as it looks right 
now. 

Dr. Elliott. I hope that is a correct view. 

Mr. Harmon. It wasn't before the war. 

Dr. Elliott. I note that the French, the Swedish, and the Italians 
all complained rather strongly on this point and felt that it was one of 
the things that most embittered their attitude from the point of view 
of the national film industry itself, the producers' part of it, about 
American films; whereas, if they had had a high quality selected list 
of films quite apart from their representative character of bearing 
American ideas, presentmg a correct picture of American life — just 
good box-office films, they claimed their attitude would be different. 

Mr. Harmon. I think this is one of the prices we have to pay for 
freedom. 

We would be very happy if all of these producers and distributors 
were members of both of our associations. They aren't. They do 
use the facilities of our production code and our advertising code and 
our title bureau. That is progress. We believe as the years come and 
go, their own leadership will come more and more to accept a higher 
and higher degree of social responsibility. I might say they did during 
the war. It was my pleasure to work with them as wartime Coordi- 
nator for the entire industry and with all members of the industry's 
War Activities Committee, and the cooperation that they practiced 
during the war is another good omen of the cooperation that I think 
they will practice in the years ahead, but it will be a gradual 
development. 

Dr. Elliott. You feel this is the great open area for self-regulation? 

Mr. Harmon. Yes. 

Dr. Elliott. In the national interest, presumably, as well as 
perhaps in the interest of prudence in dealing with foreign countries 
which have their own film industries? 

Mr. Harmon. Yes, sir. 

Mr. WoRLEY. What do you suppose would happen if this Govern- 
ment should set up a board of censors to determine whether a certain 
picture was suitable to be shown abroad? 

Mr. Harmon. I think that all of us would be in the position of 
feeling that that was a very serious impairment of freedom of expres- 
sion and that it would be a step backward for our country to take at a 
moment when tlirough the meeting in Paris, our representatives have 
been trying in just the opposite way to break down barriers and 



2578 POSTWAR ECONOMIC POLICY AND PLANNING 

promote freedom of information through the cuhural organization 
that is a part of the United Nations. 

I personally feel, sir, that democracy may not be the most efficient 
method in the world, but it pays off ui the end. We have constantly 
to keep in mind that the screen only found its voice 20 years ago. 1 
think we have come a long way through voluntariness in the 20 years 
smce. 

I think we will continue to advance along that same road, and 
every advance we make through our own r^^cognition of social respon- 
sibility, is a real advance because it is based on voluntariness rather 
than on compulsion. 

Mr. WoRLEY. What do we have, sLx or seven States here in America 
which censor pictures? 

Mr. Harmon. Six. 

Mr. WoRLEY. What do they pass on, Mr. Harmon? 

Mr. Harmon. Chiefly details of crime. I saw the report from 
New York 2 days ago, and there wasn't a single picture that bore our 
seal that iiad been cut in New York in — I think tliis was November's 
report — although it may have been the report for October. 

Mr. WoRLEY. Do you think that type of censorship is desirable? 

Mr. Harmon. No, sir; 1 don't think any type of censorship is 
desirable. As I said earlier, I edited a newspaper for several years, 
and it is in my blood to oppose censorship wheth.^r it is of newspapers, 
motion pictures, or anything (>lse. I believe in freedom of expr(>ssion. 

Dr. Elliott. May 1 ask you a leading question for a fellow who 
just said that? When you are presented with 120 pictures, out of 
which the Czechoslovakians have a right to choose 80, and 100 pic- 
tures that you select, out of which the Poles choose 65, how do you 
determine those 100 picturas of the 120? 

Air. Harmon: There would be a number of factors that would 
enter into that problem of selectivity. 

Dr. Elliott. I understand the screening process. 

Air. Harmon. No, sir, I will give you another that came up with 
the Army and this is why I mention it. I want to put into the recoi'd 
that the military authorities exclusively determine the pictures that 
go into Germany, Korea, and Japan. However, sometimes we make 
recommendations, and so forth, to the military authorities when we 
think a selection wasn't too good. 

For example, the other day they asked for the most recent Alargaret 
O'Brien picture. Here is a very popular child star. She is now, say, 
10 years old. Now, there are four or five other pictures, very good 
ones, in which she is shown 6 years old, 7 years old, 8 years old. 
They were made during the war. It would be perfectly stupid for a 
group of Czechs to see Alargaret at 10 and then 2 years from now see 
her at 8, and then 2 years later see her at 6 years of age. 

One of the factors that would enter into selecting that list of 120 
would be the first of the Alargaret O'Brien pictures that we think would 
have a market in Czechoslovakia. 

Dr. Elliott. It is a very solemn responsibility that you have 
when you are allowing these people to choose for two thirds, i-oughly 
speaking, of the pictures that you nominate, and I suppose you follow 
up to be sure they are shown in accordance with the agreement? 

Air. Harmon. Yes. That is, to whatever degree we are permitted 
to have representatives in the country. 



POSTWAR ECONOMIC POLICY AND PLANNING 2579 

Dr. Elliott. That is very important, I am sure, to follow it up. 
You are, in effect, permitting them to show, out of what you have 
previously selected, any of those pictures, and unless their selection 
is as broad as your own and as balanced as your own, they can throw 
the balance very heavily, if you don't rather carefully screen out 
pictures that would cumulatively build up bad impressions. 

Mr. Harmon. We are in a position to do that because of the fact 
that we have (a) the stock pile of 2,000 to 2,500, and (6) we are adding 
to that stock pile at the rate of about 400 pictures a year. Now, if 
Czechoslovakia can only absorb 80, j^ou see that even from our current 
supply we could choose a great many very good pictures. 

I don't want to turn this into an exploitation session this afternoon 
and call the roll of outstanding pictures of that kind; but I do believe, 
sir, that out of 400 per year there is at least 1 picture a week that in 
any town that has 4 theaters would be worth while for a busy man to 
take his family to see. 

Dr. Elliott. I don't think the committee ought to impose on you 
to give the tip-off on the best picture, but it might be possible for you 
to give them a list of those 120 pictures, if it wasn't too much trouble. 

Mr. Harmon. I once put into the record here for another com- 
mittee of the House, chaired by Mr. Lea, actual statistics in regard 
to Senator Neely's home town of Fairmont, W. Va., of the pictures 
played there for a whole year week after week, arranged by weeks, 
in order to document the statement I just made that in any town that 
has four theaters or more you can really pick and choose, week after 
week, a picture of real quality that a man can take his family to and 
feel they come away with something more than just amusement and 
entertainment. 

Mr. WoRLEY. At the present time there is no compulsion except 
voluntary j-estraint so far as any motion-picture producer is con- 
cerned in what he sells or sends overseas, but you clo think that the 
industry itself should take every step it can take to further this 
selectivity? 

Mr. Harmon. Yes, sir. 

Mr. WoRLEY. But you do not think that it is sufficiently grave or 
important at the present time to justify any governmental inter- 
ference? 

Mr. Harmon. No, sir. I think that Government intervention, 
with the finest motives, today would be the first long step on the road 
that ultimately leads to dictatorship. 

Mr. WoRLEY. I don't know of anybody who wants to invoke 
censorship or resort to dictatorship in any form. 

Mr. Harmon. I am sure of that, but that is history. 

Mr. WoRLEY. I don't know of anyone who wants to invoke censor- 
ship of either radio, press, or motion, pictures; but, at the same time, 
I think you will concede a rather serious question is raised when one 
individual can distribute any sort of film he desires and put the United 
States of America in the worst light conceivable purely in order to 
stimulate what he calls box office and make money. 

Mr. Harmon. I think that applies also, Mr. Chairman, if I maj^ say 
so, to newspapers, magazines, and any other media that purveys 
information. 

!Mr. WoRLEY. You do not think, then, there is a distinction be- 
tween, motion pictures, which deal largely in fiction, and the press or 



2580 POSTWAR ECONOMIC POLICY AND PLANNING 

newsreels that are supposed to deal purely in facts, or news magazines 
or magazine articles? 

Mr. Harmon. It would be equally applicable, would it not, to 
books of fiction? I would hate to feel that we were going to limit the 
export of novels that were best sellers in the United States because 
there were characters in them that showed that all Americans were not 
equally heroic in stature. Of course, if the Government begins to 
review motion pictures for export, then it is inevitable that the same 
policy will be applied to books, magazines, press, and radio. 

Mr. WoKLEY. Let me ask you this: In the case of Tobacco Road, 
for example, did it have a very wide circulation abroad? Or, another 
instance. Grapes of Wrath? 

Mr. Harmon. In regard to Tobacco Road, I really do not know. 
It was released during the war while I was away from the association. 
As to Grapes of Wrath, everything depended on who you talked to. 
You quoted this morning, sir, from certain of the dispatches men- 
tioned in the McMahon report. I have seen all those dispatches. 
There are other dispatches that referred to Grapes of Wrath as a great 
social document. Some believe its exhibition did good in that it 
showed that side of American life. 

There were still other dispatches that thought it a disservice for 
that kind of picture to go overseas. There were people in this country 
who thought it was a disservice for the book to have been written or 
for it to have been prmted. There were others wno thought the pro- 
duction and release of the picture was a disservice. Others thought it 
was significant; that the screen had become adult and could now deal 
with adult themes, and against the background of a gripping story 
could also portray current problems of that kind. 

Mr. WoRLEY. Is there any competition between commercial films 
and the documentary films of the State Department? 

Mr. Harmon. Competition? 

Mr. WoRLEY. Yes. 

Mr. Harmon. No, sir; not to my knowledge. The motion-picture 
industry is going into the 16-mm. commercial operation overseas by 
leaps and bounds. That is one of the good things that came from 
the war. 

Mr. WoRLEY. Have you found that the activity of the State 
Department stimulates a desire on the part of many people to see 
American commercial films? 

Mr. Harmon. I couldn't answer that on the basis of any actual 
knowledge, because my work during the war was with the War 
Activities Committee in this country, and I have no direct information 
as to the impact of the overseas activity of the OWL 

Mr. WoRLEY. Would you say generally there was any conflict in 
the type of pictures put out by the State Department and the com- 
mercial kind; that is, in the impression left in the minds of the foreign 
audience? 

Mr. Harmon. One of the gentlemen this morning referred to the 
picture Country Doctor. I haven't seen it. As soon as he men- 
tioned Country Doctor, I thought of a picture made by RKO, A Man 
to Remember, which I think is one of the great pictures. It is the 
story of a small-town doctor. 

Along with it I would associate One Foot in Heaven, the story of a 
small-town minister. 



POSTWAR ECONOMIC POLICY AND PLANNING 2581 

Some reference was made this morning to excellent films by the 
American Association of Railroads. When those industrial films 
were mentioned 1 thought of De Mille's epic, Union Pacific, which 
the Army has selected to show the Germans and from which' we ex- 
tracted huge segments for this land of liberty, the cavalcade of 
American history. I do believe you find within the brackets of enter- 
tainment, both in short subjects and in features, very large segments 
of the American scene. Mr. Begg was very kind in his reference to 
theAIarch of Time and to This Is America, a series of RKO short 
subjects. 

There are some very fine films that follow the same general pattern 
as the ones in which he is so interested that are made and released 
commercially. I suppose the test will come after about 5 years of 
16-mm. commercial operation overseas. 

You see, during the war the technological advances in re-recording 
sound on 16-mm. were very great, and also the technological advances 
in motion-picture projection on 16-mm., so that today "several of our 
member companies are very actively engaged in the use of 16-mm. 
pictures overseas as a commercial vehicle.. Luzon, in the Philippines 
with its network of good roads, is the type of place where mobile pro- 
jector units can economically and profitably exhibit American films 
with English sound tracks. 

The Export Association is going into 16-mm. distribution in a num- 
ber of its markets since our operation is not primarily commercial 
but we are trying also to use the Export Association for the good of 
the industry as a whole. We want to test and demonstrate what the 
potentialities of 16-mm. entertainment and informational films really 
are. 

The 16-mm. film has a great field ahead in the next decade in 
education and also to supplement the wider-width film in the standard 
theater. When you think how low the economic level is in the 
vihages of China, obviously they can't sustain a 35-mm. operation in 
the hinterland of China. If we are to get this enormously educational 
and useful medium to them, it has to be at an economic level that they 
can help to sustain, and that is the 16-mm. mobile equipment. 

Dr. Elliott. I have just one question to finish up. You were 
speaking about books and their comparable character to the screen. 
I remember, for instance, that the Association for Libraries for Russia, 
books for Russia — in that connection I did some work with them for 
awhile. They had to get a lot of books. I then lost interest in it 
somewhat when I found that the list they had been requested by 
Moscow to furnish to the Russians were a very hmited list of a very 
peculiar caliber — not representative at all of American life in a true 
picture as a whole. 

I wonder what happened to the other books, whether they went into 
pulp or what. That is not quite the same position with the films, but 
it is an interesting question. 

If they are furnished a list of films that includes ones we saw shown 
in Russia in Baku and Moscow for example like Elephant Boy and Thief 
of Bagdad, Never Never Land — films I have called them — something 
that had no reference to the contemporary scene, or with some old 
historic pictures occasionally — 'I believe the only contemporary 
picture showing was one that had some Russian songs in it, which 

99579— 47— pt. 9 5 



2582 POSTWAR ECONOMIC POLICY AND PLANNING 

they deplored because they were ohl songs. They showed Butler's 
Sister, or something of that sort; otherwise no film showing American 
life in the way that would bring it home to the Russians and the 
way we are trying to get it to them. 

Now, do you, in your Export Association, insist on having films 
shown in a way that will balance, if you distribute any, or do you not? 

Mr. Harmon. That is our objective. As I told you, the Polish 
deal was only consummated on Monday of this week. The first 
pictures sold to the Czechs are playing now in Prague. The fact 
that Wilson was on our list of nominations and was at the top of their 
list of selections, I think, is a pretty good omen. I believe 6 months 
from now we could give you a much more useful and indicative answer. 
It does depend on how well we handle it, and some of the officers of 
the Export Association feel a very serious continuing responsibility 
to handle the selection process as intelligently as we know hov/. 

Dr. Elliott. I am sure it isNa very important responsibility and is 
probably the only way to handle it at this time. 

If you would make available to us a list of the pictures that have 
been shown in Russia for the last year, it might be of interest. Would 
that be possible? 

Mr. Harmon. I have no such list. The Export Association has 
not made any arrangement to get films in. We have approached the 
Russian representative in New York, and it is possible that Mr. Maas, 
our general manager, may get to Russia on this trip. Certainly, that 
is one of our objectives in f 947. 

We are supplying to our Ambassador in Moscow, at his request, 
on 16 millimeters, a certain number of films every month for his use. 
We feel that to the extent that those films are shown to personal 
friends of his at the Embassy, to that extent, at least, some folks who 
have not yet visited the United States may see the best of it under 
favorable auspices at the Embassy. 

Dr. Elliott. It is certainly highly desirable if it can be done. 

Mr. Harmon. We are trjnng to select those films with care. We 
are trying to meet his suggestions month by month. 

Dr. Elliott. Would it be possible to get a list like the ones for 
Poland and Czechoslovakia, just to see just what films are offered, 
and so on? 

ISIr. Harmon, Yes, sir. We will be glad when the nominations for 
Poland are set to supply those. 

Mr. Golden. If I may be permitted, Mr. Chairman, I believe I can 
furnish a list of the films that were shown in Russia in the last 4 or 
5 years. [Reading:] 

Pictures Imported by Russia From the United States, 1939-45 

1939 — One Hundred Men and a GirL 1943 — Also imported two short subjects: 
1910— The Great Waltz. The Face of the Fuehrer. 

1911— Champagne Waltz. The Old Mill. 

Give Us This Night. 1944— The Hurricane. 

Three Musketeers. The Little Foxes. 

In Old Chicago, The North Star. 

Under Your Spell. Song of Russia. 

1942 — No pictures purchased. Charlie's Aunt. 

1943— Bambi. 1945— His Butler's Sister. 

Mission to Moscow. Appointment for Love. 

Sun Valley Serenade. Spring Parade. 

Edison. This Is the Army. 

Battle for Russia. Men In Her Life. 



POSTWAR ECONOMIC POLICY AND PLANNING 2583 

Dr. Elliott. Thank you very much mdeecl. 

Mr. Harmon. Mr. Chairman., I woukl hke to put in the record a 
reprint of an artick^ from the 1946 fall issue of Harvard Business 
Review, entitled ''Hollywood and International Understanding." 
(See exhibit 2, p. 2621.) 

Mr. Harmon. This morning you quoted by number, as the article 
quotes, four of the dispatches upon which the McMahon report was 
based. In this particular article the author. Dr. Hansen, of the 
Harvard School of Business Administration makes the following 
comment about these selections by Dr. McMahon: 

Of the five illustrations cited, four are critical of American films and one sug- 
gests a corrective possibility. The inference is that undesirable reactions are 
representative. However, this is by no means the case. In the same data, but 
not quoted by the report, are balancing favorable comments like the following: 

And then he quotes dispatch No. 836 from Canberra, Australia; 
and dispatch No. 829 from St. John's, Newfoundland; dispatch No. 11 
from, the Azores; dispatch No. 188 from New Delhi; and dispatch 
No. 473 from Buenos Aires. 

With your permission, I will read only the last one from Buenos 
Aires. It is as follows: 

United States pictures as a group are vastly superior in quality to any others 
shown in Argentina. American news reels also lead the field in quality. Because 
of their infinite variety, their lavishness of production, and their perfection of 
technique, and because they are acted and directed by the best talent available, 
the American pictures are the most popular as well as the best in quality. Ameri- 
can films have had by far the greatest propaganda influence in Argentina. The 
full story of America's part in the war has been effectively told to Argentina. 
Interwoven always in these plots is the prodemocratic theme, which makes itself 
felt as the only real salvation of the world. 

Mr. WoRLEY. Do you know any reason why Mr. McMahon should 
not have included those in his paper? 

Mr. Harmon. No, sir. The article by Dr. Hansen goes into some 
detail in its analysis of the McMahon report and covers a good deal 
of the same ground, Mr. Chairman, that we have been discussing so 
fruitfully here today. 

Mr. Worley. We would hke to have that in the record. 

Mr. Harmon. And I would also like to put in the annual report to 
the Motion Picture Association of America by Eric Johnston. 

(Documents previously incorporated in record.) 

Mr. Worley. We also want to thank you for a very interesting and 
informative session. We are also glad to know you originally came 
from a district now so very ably represented by our chairman, Mr. 
Colmer. We think a great deal of him up here. 

Mr. Harmon Thank vou, sir. 

Mr. Worle' . Mr. O'Hara. 

Mr. O'Hara. Our next witness will be Governor Milliken. 

STATEMENT OF GOV. CARL E. MILLIKEN 

Mr. Milliken. My name is Carl E. Milliken. I have been for 21 
years the secretary of the Alotion Picture Association. In addition, 
I have had other responsibilities, and since early in the war have had 
to take over for the time being the ofhce of manager of the interna- 
tional department. That may be regarded as a war emergency. 

I thinlv we have established or heard sufficiently about the motion 
picture and its character abroad, the fact that the industry asks no 



2584 POSTWAR ECONOMIC POLICY AND PLANNING 

special privilege here or al^road, that what we do want is the oppor- 
tunity to compete on equal terms with other producers and distribu- 
tors everywhere in the world. 

As an industry we have never asked and do not ask any protection 
here in the form of tariffs of other\\*ise. Anybody can bring any 
film into this countrj', provided it is not indecent in the opinion of the 
Treasury Department, tlu^ough whose customs offices it inspects 
imported films. We are for the policy, which we understand is the 
policy of the Government and the State Department — that is the 
encouragement of the utmost freedom in the circulation of media of 
expression and ideas throughout the world. We think that is all that 
we should expect and we are not at this time asking anything further, 
either retaliation or punishment for anybody. 

Mr. WoRLEY. On yoiu- first point — what can the Government do 
to aid and assist the industry in that respect? 

Mr. MiLLiKEN. If you will allow me, Mr. Chairman, my task is 
to recount very briefly the obstacles we face, and my associate and 
colleague, Mr. Mayer, will come to that other point for you, if we 
may do it that way. 

Mr. WoRLEY. Very well. 

Mr. MiLLiKEN. May I express not only appreciation for the work 
the committee is doing, but having had some experience myself on 
legislative committees, I want to express admiration for your patience 
and the attention you are giving to these matters. 

Mr. WoRLEY. We find the information very helpful. 

Mr. MiLLiKEN. Coming now to the point of obstacles that we face 
abroad — in the first place, we face, of course, as all exporters do, 
certain general obstacles growing partly out of the world situation. 
Some of those were suggested this morning: Scarcity of dollar ex- 
change, depreciation of world ciurencies against the dollar, the 
impoverished position of populations abroad, difficulties in travel, 
both of persons and conmiodities; but in addition, we face certain 
special hampering restrictions that do not in general apply to other 
exporters of commodities. 

Those are restrictions imposed by governments. It is still true, as 
it has been and was before the war, that the peoples of the world want 
to see American films. They are, as they have been, the favorite 
form of mass entertainment throughout the world. The restrictions 
that trouble us are imposed by governments and for the following 
reasons, among others, Mr. Chairman: 

For additional revenue. That applies to some of these taxes. 
Revenue is desired by all governments in increasing amounts. 

Then, to minimize what they call Americanization, That is the 
influx of American ideas and American products mto their country. 
Particularly in many cases it is the desire to get their country por- 
trayed on the screens of the world. That is, in my opinion, the basic 
reason for government support of native industries, either actual or 
potential. They want the world to know about their countr3^ 

To protect their people from knowledge of what we call the American 
way of life. I ought to touch that lightly, perhaps, but that is a very 
real reason for the government restrictions, particularly in the areas 
around Russia and in Russia itself. Reference has been made here to 
the type of pictures that could be shown in Russia, that would be 
permitted to be shown in Russia. 



POSTWAR ECONOMIC POLICY AND PLANNING 2585 

Our dilemma at that point is that the very pictures which, ia the 
interest of this country and in the. interest of the promotion of the 
ideals of this country we would want to show, they will not permit to 
be shown because they do not want their people to see films that would 
indicate there are other ways of hfe that are tolerable and perhaps 
better than their own. 

I want to refer very quickly to a number of these restrictions. 
They are typical. They are not all the restrictions that obtain, and 
the illustrations given are only illustrations and are not the whole list. 

We have, for example, excessive import duties assessed against the 
importation of films. The prize example is Spain, where before the 
war it cost on the average about $90 in customs duties to import the 
average feature-length picture. The average import cost now would 
be $11,000. 

We have internal taxes on gross business 

Mr. WoRLEY. Spain? 

Mr. MiLLiKEN. Not in Spain. Now we are coming to another type. 
Internal taxes on gross business assessed ostensibly against all dis- 
tributors of motion pictures, and therefore not discriminatory in the 
technical sense, but actually imposed upon our business because we 
are the principal importers. The prize example is New Zealand, 
25 percent on gross business. 

Mr. WoRLEY. Getting back to Spain, is that directed just against 
American films or ail films? 

Mr. Milliken. Against all films. 

Mr. WoRLEY. All films? 

Mr. Milliken. Yes; but the American film has always been and is 
still the principal import from abroad. That rims through all these 
cases, Mr. Chairman. 

Mr. WoRLEY. Yes; I understand. 

Mr. AliLLiKEN. We have restrictions ostensibly applied to every- 
body, but actually because we are the chief importers, applied to us. 

We have situations where import licenses must be procured from 
native producers in order to permit the importation of film. That is 
true particularly in Spain where the companies that want to import 
films have to go and buy import license from some native producer. 
The current cost runs from 175,000 to 250,000 pesetas. 

That is an indirect but very effective method of financing the local 
industry at the expense of the American industry. 

We have m many comitries or in a considerable number of countries 
limits unposed by governments on the number of American films that 
may be imported. For instance, India, France. That is on the 
theory, which doesn't hold good m practice, that the revenue from a 
set of pictures will be in proportion to the number. 

During the war, for example, the Indian government decreed that 
we might import annually only 75 percent of the previous number 
imported m the year before, that was for the purpose of restricting 
the amount of exchange that would be required for remittances. 
That did not prove effective. The smaller number still brought 
about the same revenue. 

The next year they put it down to 50 percent. It still did not 
prove effective. Now, we have that kind of limit in a number of 
countries. 



2586 POSTWAR ECONOMIC POLICY AND PLANNING 

We have in manj^ countries a limit on theater screen time. That 
has been already referred to here. France, Argentina, and England 
are examples of that. 

We have in China, particularly lately, a quota imposed upon the 
footage that may be imported. That is causing great difficulty among 
the companies now because each company has been allocated a certain 
amount of footage, and so far as anybody can tell, that allocation 
has no reasonable relation to the business the company does. 

Mr. WoRLEY. In China? 

Mr. MiLLiKEN. Yes, Mr. Chairman. 

Mr. WoRLEY. ^^Tiat steps are we taking in trying to eliminate those 
restrictions? 

Mr. MiLLiKEN. That gives me a chance to say that we have had 
and do have the finest cooperation of the State Department and the 
Department of Commerce in all these problems. 

Mr. WoRLEY. Have they made any jjrogress? 

Mr. AIiLLiKEN. We have now the information sent on through the 
Department to our representatives, our diplomatic representatives in 
China, to be taken up by them with the Chinese Government. It is 
not technically a matter about which an official protest can be filed 
because it is an internal regulation. However, we feel that the pro- 
cess which has been placed at our disposal so many times will be 
effective here, too, eventually. 

We have discriminatory taxes on theaters. Argentina is the prin- 
cipal example there. That is a device by which the tax upon a theater 
is less if the theater plays only native products and greater if it plays 
foreign products. I won't go into the details in the case of Argentina 
but •that is general policy. 

Mr. WoRLEY. On the question of theater ownership, how many 
theaters are owned by American distributors or producers in foreign 
comitries? 

Mr. MiLLiKEN. We are in process, Mr. Chairman, of developing a 
survey which will give, we hope, accurate information, reasonably 
accurate, about the theaters in each of these foreign countries. An 
elaborate organization has been developed by the new research de- 
partment in the association, and we are having the full cooperation 
of our companies abroad. We don't have the information exactly 
now, I am sorry to say, as to the number of theaters, or as to the 
number in a given country which our companies either wholly or 
partly own. 

In some cases they are owned outright and in some cases they are 
managed by the company on a lease basis or by partnership arrange- 
ment with a local o^vner. 

Mr. WoRLEY. In many cases you would have to own theaters in 
order to get an outlet, but that wouldn't necessarily be the answer 
because other restrictive legislation could be imposed even under such 
conditions; is that correct? 

Mr. MiLLiKEN. Correct. We have one of the chief causes of dis- 
tress, the habit that foreign countries have developed of assuming that 
all the remittance from a given country is profit in the sense of income 
and, therefore, taxable as income. That was fought out years ago in 
England in the so-called Paramount case, where the British Govern- 
ment undertook to tax remittances as profit on the grounds that the 
companies would get recoupment for their negative cost in this coun- 
try, and all the rest was profit. 



POSTWAR ECONOMIC POLICY AND PLANNING 2587 

The courts in England took our view of it and reversed the tax 
authorities. Since then that pohcy has not prevailed in England. 

At the moment we have it revived in Argentina. This was fought 
out 6 or 8 years ago through the courts in Argentina, and the courts 
decided that not more than 10 percent of the revenue remitted to our 
companies from Argentina could properly be assessed as income. 
Now they are back to the same arrangement again and, frankly, we 
don't know how much influence the court has in Argentina at the 
moment. 

We have in some countries, quite a number of countries, the require- 
ment that motion pictures be dubbed, as we call it — ^that is, have a 
language dialog put in in the language of the country — the require- 
ment that that must be done within the country. That is true in 
France and is true in Spain. It is proposed now in Portugal. 

The difficulty from the point of view of the companies is that 
if they dub a picture in Spanish and then have to redub it in every 
Spanish-speaking country through which the picture is to be shown, 
the cost would become prohibitive. 

We have in addition to that, coming back to Spain again, not only 
the requirement that the picture be dubbed into Spanish in Spain, 
but a tax assessed upon that process of dubbing of 20,000 pesetas or 
something like that. 

We have in some cases, particularly in China 

Dr. Elliott. May I ask, do you have an agreement with Spain 
now with regard to that? 

Mr. MiLLiKEN. No. We attempted some 6 or 8 months ago to 
get an agreement. W^e came almost to the point of agreement and 
then the proposal that the Spanish Government had offered was 
withdrawn by them before we could accept it here. The London 
representative of the association, Mr. Allport, is now in Spain trying 
to find out if it is possible to renew that agreement. 

I might say, speaking of Spain while we are about it, that total cost, 
if the law were obeyed — and I say that with emphasis — the total cost 
of importing the average feature picture into Spain under these new 
charges would be about $30,000 for one feature picture. There are 
various schemes going on, which are beyond my knowledge, but on the 
average somebody buys a picture in New York for a certain amount 
and gets it into Spain by some method, but in any case, the situation 
is extremely unsatisfactory, and the effort is constantly being made to 
reach a definite and reasonable agreement. 

I was about to mention the excessive taxes on theaters, obtaining 
particularly in China. The results of that sort of thing are just 
fantastic. 

You have the case of the theater in China in making a contract 
with the distributor on what we call a percentage basis — that is, a 
percentage of the receipts to go to the distributor, and then it turns 
out that there are all sorts of taxes and alleged contributions to 
charitable enterprises. Here is, for example, a typical illustration 
way back in July of 1945. I mention the date because the rate of 
exchange in China, of course, is much worse now than it was at that 
time. In Chungking at that time the average admission price in 
Chinese money was $300. There were deductions from that for 
amusement tax, for revenue stamps tax, for consolidated charity, 
for 3.1-percent business tax, for 4-percent government bonds, for 



2588 POSTWAR ECONOMIC POLICY AND PLANNING 

8-percent village-reconstruction bonds. The total out of the $300 was 
$204.52, leaving for the distributor his percentage share of the mag- 
nificent sum of $95.48, which sounds like a lot of money. 

Mr. WoRLEY. CNC? 

Mr. MiLLiKEN. Chinese national currency; yes. Back in 1945 
that was. The exchange rate now is down to nearly 5,000 to 1. 

Next on the list is the limit of the amount that may be remitted 
per film, I don't know whether that statement is clear, but we have 
in some countries, particularly in Greece, an arrangement by which 
you may take out of the country for the benefit of the owner of the 
film in this country only a certain amount per feature picture, no 
matter what the returns in the country turn out to be. 

The next item I have noted here is the classification of motion 
pictures as a luxury rather than a necessity. That sounds like an 
inconsequential differentiation, but the trouble is that in many 
countries, particularly in South America, the rate of exchange at 
which we are allowed to remit our part of the receipts varies accord- 
ing to whether the commodity is rated as a luxury or a necessity. 

We believe that in modern community life the entertainment 
offered by the motion-picture theater is a necessity. 

We have, of course, government monopoly. That has been 
referred to at length. 

We have also exhibitor organizations that have the effect of monop- 
olies. That has also been outlined sufficiently. 

Then we have, of course, censorship in foreign countries, not any 
more on account of the moral value of films, almost never any trouble 
from that source. The censorship we encounter abroad now is 
almost 100 percent for political reasons, because the ideologies ex- 
pressed in the film are different from those of the country to which 
the film has been exported. 

It is a rather patience-trying recital, but those are some of the 
obstacles that we face. Let me say again that in endeavoring to 
correct those situations we have things to do ourselves. We also 
need and are receiving constantly the help of our own Grovernment 
through its proper agencies. 

Mr. WoRLEY. You are assuming the initiative yourself in selling 
your product abroad and in calling on the Government agencies 
w^hen they are in a position to help you, are you not? 

Mr. MiLLiKEN. It is a two-way street, Mr. Chairman. We caU 
on the Government, I am sure, too frequently for their peace of mind. 
We expect them to let us know if trouble arises anywhere in the world 
that we ought to do something about. 

Aly colleague, Mr. Mayer, wiU go into that matter a little more in 
detail. 

Dr. Elliott. May I ask one question? 

Mr. MiLLiKEN. Certainly. 

Dr. Elliott. That is a very interesting recital and surely other 
countries are having their difficulties. The British must be facing 
the same thing and even the Russians with their methods of film 
distribution, which are somewhat different. 

Now, I would like to ask you, Governor Milliken, from your experi- 
ence in handling this whole foreign area for a considerable period of 
time, what importance other governments attach to the status of their 



POSTWAR ECONOMIC POLICY AND PLANNING 2589 

iilm industry for diplomatic representation, in the rank they give to 
the people in their embassies and legations that deal with it, and so on. 

One of the things I was most struck with while on the trip was the 
fact that while our Government tries to give proper recognition and 
aid to this industry, the man concerned with it in our embassies and 
legations is often reporting through from three to four channels up to 
the aro.bassador; whereas, if I understand correctly the picture — ^and 
I would be interested in being checked on it — the Russians have 
established in every important embassy and in most legations a man 
with the rank of minister, whose sole duty it is to push Russian films. 

Mr. MiLLiKEN. I am not sure I am familiar with that, with all those 
details abroad, but the main thing with reference to Russia, I think, 
is that the Russian Government has recognized the film as a — well, 
let me say perhaps in the proper sense — a propaganda medium and 
has been using it for that purpose more extensively and more effec- 
tively than any government an the world has done since Germany 
collapsed. 

They are infiltrating wherever they can with films that to their minds 
express their view of the way of life that they call democracy, and 
they are doing it without regard to commercial return, if necessary. 

That is true in India; it is true m Mexico; it is true generally, I 
think, throughout the world. 

Now, I think I might venture to say something about the difference 
between our own policy and the British policy in that regard. We 
have to remember that the British have been probably the greatest 
traders in the world for a hundred years. With them the importance 
and the welfare and promotion of British trade is the top job of 
British diplomats throughout the world. I think that is not an exag- 
gerated statemeit. 

That means that they, too, have recognized the importance of the 
film as an advance agent and a catalog of British goods, and that is 
part of the reason for their very great interest, the very great interest 
that the British Government has in the expansion program of the 
British motion-picture industry. Our own Government has shown, 
particularly in recent years, a very definite interest in the importance 
and an appreciation of the value of the circulation of American films 
on the screens of the world. 

However, those two Governments have gone further, it is fair to 
say, in the direct promotion of the use of the motion picture. 

Mr. WoRLEY. You are familiar with the Russian 5-year plan, are 
you not? 

Mr. MiLLiKEN. Yes. 

Mr. WoRLEY. I would like to insert in the record at this point a 
United Press article dated May 21, 1946, setting up in detail this plan. 

Thank you very much, Grovernor. 

(The article referred to foUows:) 

Soviet Works Out 5- Year Film Plan 

Moscow, May 21. — A comprehensive 5-year plan for Soviet film production 
was announced today. 

Moscow studios will be rebuilt to produce 40 films annually. New studios will 
be built at Minsk, Baku, Riga, Talinn, and Vilna. 

The new films will stress the following themes: 

1. The advantages of the Soviet regime over capitalism. 

2. The role of the Communist Party. 



2590 POSTWAR ECONOMIC POLICY AND PLANNING 

3. Solidarity and friendship of the many nationalities composing the Soviet 
Union. 

4. The people's vigilance, patriotism and duties to the state. 

5. Commemoration of outstanding war heroes and heroines. 

6. The Soviet way of life. 

7. The family. 

8. Mother heroines (mothers who have 10 children). 

9. Children and youth. 

10. Problems facing the Soviet Union. 

11. Documentaries of the 5-year plan. 

12. Industry, agriculture, and life in the 16 Soviet Republics. 

13. Popularization of achievements in science, engineering and technical 
progress. 

Mr. WoRLEY. Is ]\rr. Mayer next? 

Mr. O'Hara. Mr. Mayer is next; yes, sir. 

STATEMENT OF GERALD MAYER 

Air. Mayer. My name is Gerald Mayer. I am associate manager 
of the international department of the Motion Picture Association. 
Mr. Eric Johnston has just appointed me as managing director of the 
international division, effective January 1, to relieve Governor Milli- 
ken at the latter's request. 

Mr. Worley. Be seated, please. 

Ml'. Mayer. Mr. Chairman, during the war years I was assistant 
to the American Minister in Switzerland and came back in November 
1945 to become chief of the Northern European Division in the De- 
partment of State, Office of International Information and Cultural 
Affairs. 

I resigned on May 15 to take up my duties with the Motion Picture 
Association. 

Governor Millikcn has just given you a picture of the restrictions 
abroad with which we have to cope. The State Department has 
given us excellent cooperation, and so has the Department of Com- 
merce, as well as our missions abroad. The increasing complexities 
necessitate an expansion of our program to send qualified men to key 
points in the world. We like to find men with State Department or 
other Government experience and with a thorough knowledge of the 
territory to which they are sent. 

Mr. O'Hara and 1 have just returned from England with Mr. 
Johnston. We had intended to cover central Europe and some of the 
Balkan countries. However, Mr. Johnston's illness prevented this 
program, and we expect to continue our survey next spring. 

However, we were able to make a more through study of the con- 
ditions of the film industry in England as a result of our protracted 
stay there. While in Germany and Austria last summer, Mr. Har- 
mon and I gathered first-hand information on the best ways and means 
to assist our Government in carrying out its reorientation program in 
those two countries. 

In short, what we would like, Mr. Chairman, is a continuing ap- 
preciation of our difficulties by the Government within the framework 
of the Government's economic policy. We have trade agreements 
with most countries, and when discrimination is exercised against us 
we would like to have adequate representations made. 

What we need is the freedom of our men to move to parts of the 
world where we distribute films. We would like films to move freely 



POSTWAR ECONOMIC POLICY AND PLANNING 2591 

througlioiit the world, and we would like the continuing assistance of 
our missions to enable us to do so. 

Mr. WoRLEY. Do you find any lack of cooperation on the part of 
the Government? 

Mr. Mayer. No. On the contrary, we have found very good 
cooperation everywhere. 

Mr. WoRLEY. Of course, there are some things that the Govern- 
ment can do and some thmgs it cannot do. 

Mr. Mayer. I agree. When I stressed the need for such assistance, 
I underlined that it be made available within the framework of our 
Government's economic policy and of their trade agreements and 
their commercial treaties. 

Mr. WoRLEY. Do you believe our Government is driving as hard a 
bargain in relation to motion pictures and other industrial output of 
the United States with other countries as it can drive? 

Mr. Mayer. Will you please repeat that question? 

Mr. WoRLEY. Do you suppose the United States is driving as — I 
won't put it "as hard a bargain" — but as advantageous a bargain as 
it can drive in its relation with these other countries? 

Mr. Mayer. I don't quite think I am ciualified to answer that 
question. 

Mr. W^ORLEY. Well, what is your opinion? You know what these 
restrictive pieces of legislation are. 

Mr. AIayer. I think v»'e are very fortunate in having an Under 
Secretary like Air. Clayton, who drives very, very excellent bargains. 
I think it is exemplified in the Blum-Bj^rnes accord. It depends a 
good deal on the personality of the individual, how good or how bad 
a bargain can be made. 

Mr. Worley. It seems strange that while we allow free competition, 
and permit any motion-picture distributor anywhere to come in here 
without any restriction at all, at the same time other countries pro- 
hibit our entry. 

Mr. Mayer. The industry has never asked for any type of restriction 
and does not want restrictions. It believes in free trade and in free 
competition. 

In England recently Mr. Johnston made it very clear that barriers 
beget barriers, and he expressed the hope that England would lower 
rather than raise its restrictions. 

A good many of the people in England appear to agree with him, 
though it is far from certain what the outcome of the negotiations will 
be there. 

Dr. Elliott. "Barriers beget barriers" is a truism that works two 
ways, doesn't it? If we are confronted with an increasing height 
of barriers and perpetual difficulties in the marketing of our own 
product abroad in this particularly important area, is it not likely that 
that will create a tendency in this country for reciprocal action along 
possible retaliatory lines? 

Mr. Mayer. I agree that restrictions beget restrictions, but I 
wouldn't necessarily say that this is presently true in the film industry. 

Dr. Elliott. In other words, the film industry feels on a sufficiently 
strong foundation, commercially speaking, to take any competition 
in the American market and laugh it off, so to speak? 

Mr. Mayer. Yes. We wiU continue to advocate freer movement 
of motion pictures everywhere in the world. If other nations are 



2592 POSTWAR ECONOMIC POLICY AND PLANNING 

unwilling to adopt such a policy, then, of course, we shall be forced 
to review ours. 

Dr. Elliott. So that is a very unique industry, and I am sure it 
is a great comfort to Mr. Clayton, but there are other questions of 
public policy involved in exclusion of foreign propaganda or its 
reciprocal treatment which are not directly relevant to your associa- 
tion, and m.ore properly raise the questions dealt with with the State 
Department this morning. 

Mr. WoRLEY. I don't know how reliable this information is, but 
I understand there is a good bit of sentiment in England to nationalize 
their film industry. 

Mr. Mayer. We have heard rumors to that effect, sir. There has 
been nothing certain. 

Dr. Elliott. I think it would be fair, then, to summarize your 
testimony, Mr. Mayer, by saying that you feel the cooperation that 
you are now getting from the Department of State and from other 
agencies of the Government is as adequate as could be expected and 
that you have nothing further to request of the Government in that 
matter. 

Mr. Mayer. I might add this one thing. We hope that the men 
whom we propose to send abroad will receive the sam.e excellent 
cooperation that the men are getting who are active for the association 
abroad now. 

Dr. Elliott. Just in terms of the actual record, how successful has 
been tlic removal of these discriminations by process of negotiation 
that we have heard described heretofore and in the instances that 
Governor Milliken laid down. Can we register a series of triumphs 
in the negotiations? 

Mr. Mayer. You will recall that Mr. Brown offered to submit for 
the record the evidence on certain countries where negotiations had 
been successful. I think he has offered a memorandum to that effect. 

I don't recall offhand every one of the countries in which these 
negotiations have been successful. Mr. Harmon and I were in Hol- 
land recently and during our stay there the Department was very 
active in helping us negotiate an agreement with the Bioscoop Bond. 
Our first conference with the Dutch Minister of Education was brought 
about by the American Ambassador. 

Similarly, Mr. Harmon told you that Ambassador Steinhart has 
been extremely helpful to us in Czechoslovakia. 

Dr. Elliott. I think the record has uniformly been one of helpful- 
ness, but I was raising the question of effectiveness. 

Have you a satisfactory arrangement with France at the present 
time? 

Mr. Mayer. We have a very satisfactory arrangement with France 
at the present time due to the Blum-Byrnes accord. 

Dr. Elliott. That is now being implemented by the French Gov- 
ernment and the French industry? 

Mr. Mayer. The accord is being carried out now. 

Dr. Elliott. Are there any administrative problems connected 
with it? 

Mr, Mayer. There are small problems, which arise with every 
country at all times, but no more so than usual. 

Dr. Elliott. Is the Italian situation fairly satisfactory to you? 



POSTWAR ECONOMIC POLICY AND PLANNING 2593 

Mr. Mayer. The Italian situation comes up for consideration 
because the treaty has to be extended for another year. We expect 
that it will be extended for another year. 

Dr. Elliott. The existing treaty in its operation has been satis- 
factory. 

Mr. Mayer. Yes. 

Dr. Elliott. These are the main markets, are they not? 
Mr. Mayer. I might add that the industry voluntarily limited the 
number of films it sent to Italy during the past year and expects to 
do the same in 1947. 

Dr. Elliott. In the Arabic-speaking world, starting with Egypt 
and working to the Middle East, are you experiencing difficulties 
there with restrictions of showing time for American films, et cetera? 
Mr. Mayer. We have definite problems in Egypt. We have just 
appointed a new man, who was assistant to Byron Price during the 
war years; He has just gone to Cairo. We have not received his 
first report. I would much rather reply to that question after I have 
more authoritative information. 

Dr. Elliott. The complaint was often made to the committee in 
Cairo and elsewhere in the Middle East about the lack of films dubbed 
in Arabic for distribution in the Arabic-speaking world. 

Mr. Mayer. Egypt has some production of its own, and they are 
very jealous of any foreign films dubbed in Arabic, which might be 
sent to Egypt, for fear that they will ruin the local infant industry, 
which is quite understandable. We have been rather careful in limit- 
ing our dubbmg due to that fact. 

Dr. Elliott. I gather India is not yet satisfactory from your 
point of view. 

Mr. Mayer. In India we are having difficulties. We expect to 
send a man to India shortly. Certain legislation looms up of a re- 
strictive nature, and we expect to cope with it. 

Dr. Elliott. And the same thing, roughly speaking, is true of 
China? 

Mr. Mayer. Governor Williken has already told you of the diffi- 
culty we are experiencing in China. 

Dr. Elliott. In your judgment, the steps taken by the Govern- 
ment are all that reasonably could be expected? 

Mr. Mayer. I think they are doing everything they could possi- 
bly do in the framework of their policy. 

Mr. Worley. Do you have any additional points you would like 
to make, Mr Mayer? 
Mr. Mayer. No, sir, 

Mr, Worley. Thank you very much, Mr. Mayer. 
That concludes the list of witnesses, and the committee stands 
adjourned. 

(Whereupon, at 4:15 p. m., the subcommittee adjourned.) 



APPENDIX 



Exhibit 1 

THE MOTION PICTURE OX THE THRESHOLD OF A DECISIVE 

DECADE 

Annual Report (Twenty-fourth Year) to the Motion Picture Association 
OF American, Inc. (Formeri^y Motion Picture Producers and Distributors 
OF America, Inc.) by Eric Johnston, President, March 25, 1946 

MOTION PICTURE ASSOCIATION OF AMERICA, INC. 

28 West Forty-fourth Street, Xew York 18, N. Y. 

Hollywood: 5504 Hollywood Boulevard, Hollj'^wood 28, Calif. 
\\'ashington: Sixteenth and I Streets, Washington, D. C. 
London: 11 Bruton Street, London W. 1, England. 
Paris: 74 Avenue des Champs Elysees, Paris Seme, France. 

Officers 

President Eric Johnston. 

Vice president Joseph I. Breen. 

Vice president Francis S. Harmon. 

Vice president Byron Price. 

Secretary Carl E. Milliken. 

Treasurer-assistant secretary George Borthwick. 

Assistant treasurer F. W. DuVall. 

Assistant treasurer-assistant secretary James S. Howie. 

Directors. — Eric Johnston (chairman), Barney Balaban, Xate J. Blumberg, 
George Borthwick, Jack Cohn. Cecil B. deMille, E. W. Hammons, E. B. Hatrick, 
Joseph H. Hazen, Robert W. Perkins, X. Peter Rathvon, Hal E. Roach, Xicholas 
M. Schenck, Spyros P. Skouras, Albert- Warner. 

Former directors. — M. H. Aylesworth, George McL. Baynes, Hiram S. Brown, 
Harrv D. Bucklev, Charles H. Christie, Harlev L. Clarke, Robert H. Cochrane, 
Xed E. Depinet, D. W. Griffith. F. L. Herron) B. B. Kahane, Arthur W. Kelly, 
Joseph P. Kennedy, Sidney R. Kent, Jesse L. Lasky, Sol Lesser, Frederick C. 
Monroe. J. J. Murdock, J. Homer Flatten, Edward C. Raftery, .John B. Rock, 
Irving D. Rossheim, Richard A. Rowland, David Sarnoff, George J. Schaefer, 
Joseph I. Schnitzer. H. O. Schwalbe, ]\Iaurice Silverstone, Leo Spitz, Walter 
Wanger, Harry M. Warner. 

Original board, 1922.— 'Will H. Hays (chairman), William Fox, Frank J. Godsol, 
Earle W. Hammons, Carl Laemmle, Marcus Loew, John Quinn, Joseph M. Schenck, 
Lewis J. Selznick, Adolph Zukor. 

Members, Motion Picture Association of America, Inc. 

Brpy Studios, Inc J. R. Bray. 

Cagney Productions, Inc William Cagney. 

Columbia Pictures Corp Jack Cohn. 

Cosmopolitan Corp E. B. Hatrick. 

Cecil B. DeMille Production?, Inc Cecil B. de:Nrille. 

Walt Disney Productions, Inc Walter E. Di9ne\'. 

Eastman Kodak Co T. J. Hargrave. 

Educational Films Corp. of America Earle W. Hammons. 

Electrical Research Products Division of Western 

Electric Co T. Kennedy Stevenson. 

Golden Pictures, Inc Edward A. Golden. 

2594 



POSTWAR ECONOMIC POLICY AND PLANNING 2595 

Members, Motion Picture Association of America, Inc. — Continued 

Samuel Goldwyn Productions, Inc.. Samuel Goldwyn. 

Hughes Productions Howard Hughes. 

Loew's Inc Nicholas M. Schenck. 

Paramount Pictures, Inc Barney Balaban. 

Principal Pictures Corp Sol Lesser. 

RCA Manufacturing Co., Inc H. B. Snook. 

Reliance Pictures, Inc Edward Small. 

RKO Radio Pictures, Inc Ned E. Depinet. 

Hal Roach Studios, Inc Hal Roach. 

Hunt Stromberg Productions Hunt Stromberg. 

Terrytoons, Inc Paul H. Terry. 

Twentieth Century -Fox Film Corp Spyros P. Skouras. 

Universal Pictures Co., Inc Nate J. Blumberg. 

Hal Wallis Productions, Inc -- Joseph H. Hazen. 

Walter Wanger Pictures, Inc Walter Wanger. 

Warner Bros. Pictures, Inc Albert Warner. 

Warner Bros. Pictures Distributing Corp Robert W. Perkins. 

I. The Motion Picture on the Threshold of a Decisive Decade 

INTRODUCTION 

The recent change of this association's name reflects more accurately the true 
interests of its members and the industry-wide scope of its services. By calling 
it the Motion Picture Association we signify that our interests extend to every 
phase and function of the motion picture. In the unity of the meciuin itself lies 
the compelling reason for unifying ail the activities and enterprises which seek to 
use or serve that medium for the common welfare. 

Unity is the paramount objective in this critical period of transition from war 
to peace. War is more than conflict. It is the use of violent means to resolve 
conflicts. Peace is more than the mere absence of violence. It is fully realized 
only when we replace conflict by cooperation. No one today supposes that the 
end of fighting established peace. We know that it meant only the opportunity 
for making peace — and making it flourish. _ 

There are problems of peace at home as well as abroad. While our Nation was 
engaged in foreign war, the people responded to the call for unity. Americans 
worked together on all fronts for victoiy. But once the pressures of war were 
relieved, conflicts of itnerest and divisions of purpose reasserted themselves. 
Somehow it seems harder for men to work together for peace than for victory. 
Yet we shall not have won the fruits of our war effort unless our peace effort is 
attended by the same willingness to work together for common goals. 

What is true of the Nation is true of this industry. The enterprise of motion 
pictures necessarilv requires the cooperation of many arts and crafts, of many 
industrial factors in the process of production, distribution and exhibition, and ot 
a wide variety of noncommercial agencies and institutions. So long as paitisan 
interests prevail, conflicts are inevitable between labor and management, between 
distributor and exhibitor, between commercial and noncommercial groups con- 
cerned with motion pictures. . . . 

The spirit of free enterprise, in opposing regimentation, believes in competition 
but also knows the need of cooperation. It seeks a constructive interplay ot 
diversities in interest and function. It calls upon us to recognize that tiiougti 
different groups participate differently, we are all parts of one another m a com- 
mon enterprise. . , ,_^^ ^^„ 

I look upon the medium of motion pictures as one source of many values, one 
instrument of many services. It seems to me that we must concentrate upon 
what is common to all uses of film and screen, if we are to find a common unitying 
purpose for all the groups which ought to work side by side for the improvement of 

To this end I propose that we think always of the motion picture. I for one am 
interested in motion pictures of every type and every use theatrical and non- 
theatrical The war demonstrated the value of them all. In all forms, lengtns, 
and widths, the motion picture served as a means of communication, combining 
fiction and fact, entertainment and information, inspiration and education. 

In iungle clearings, aboard packed troop ships, or in the requisitioned buildings 
of conquered Germany and Japan, uniformed audiences cared little whether they 



2596 POSTWAR ECONOMIC POLICY AND PLANNING 

were seeing a feature picture, a documentary or a short, so long as the content 
of the film interested them. 

The general public has become accustomed to seeing documentary and fact 
films on the screens of local theaters. Exhibitors became accustomed to including 
them in their programs. Producers of documentaries came to recognize the 
necessity for making fact films so interesting and exciting that they would capture 
and hold the attention of the same theater audience which, as the war progressed, 
first tolerated, then accepted and finally applauded films of this sort. 

In the years ahead we must accept the broadened role of the motion picture as 
a tribute to its multiple powers. We must meet the challenge to utilize films of 
various kinds, in various lengths and widths, for various audiences. We must 
do this without injustice to existing investments in jjroducf ion, rlistribution and 
exhibition, for we know that films made for theaters yield the bulk of the revenue 
which enables the industry to pioneer in these new fields. Hence progress in 
the production of theatrical motion pictures during the decade ahead is a primary 
requisite. 

The members of this as.sociation are still primarily producers and distributors 
of theatrical entertainment. Some also are exhibitors. All have achieved 
success through willingness to pioneer. It is that, pioneering spirit which moves 
us today to be seriously interested in the expanding uses of the motion picture. 
Films for theaters, films for schools, films for factories, films for churches, films 
for laVjor unions, films for community forums, films for pjublic agencies — all these 
are within the area of our attention. 

ADVANCES IN THE U.SE OF FILMS AS VISUAL AIDS 

There has been much talk about motion pictures for the classroom. The need 
has been only partially met. The time has come to mobilize the resources and 
know-how of Hollywood and finish the job. 

Some progress has been made during the last 25 years. Centuries ago the 
methods and content of teaching were revolutionized by technical advances in 
the art of bookmaking. Today technical progress in filmmaking indicates 
similar revolutionary jjossibilities. What has been done so far at best dimly 
foreshadows the accomplishments of the future. 

From the outset, this association has actively interested itself in furthering 
the pedagogical use of motion pictures. Many years ago, Mr. Hays, speaking 
before a national meeting of educators, declared that it would be just as silly to 
use language exclusively for writing novels as it would be to use motion pictures 
exclusively for theatrical entertainment. Under his leadership, the association 
pursued a policy of inquiry and experimentation in the field of classroom films. 

What ha.s been achieved under that policy in the last 10 years is the foundation 
for the progressive steps now to be taken. 

In 1936 the members of this association engaged in a cooperative project with 
the Commission on Human Relations of the Progressive Education Association. 
This called for experimentation with the use of selected excerpts from regular 
theatrical films dealing with character building and human relations problems. 
The film excerpts were prepared for school use by educational authorities. 

A year later the association formed its own advisory committee on motion 
pictures in education. A grant of S50,000 enabled the committee to search the 
archives of theatrical films no longer in circulation, for short subjects having a 
definite educational value for use in schools. Then in 1939 Teaching P'ilm 
Custodians, Inc., was set up as a nonprofit cooperative agancy for the purpose of 
distributing to the schools the short subjects which had been selected and edited. 

During subsequent years the scope of Teaching Film Custodiaris has been 
broadened. It was empowered to distribute to schools excerpts from feature 
pictures which were based on classics of literature, biography, or history. The 
present work and future development of Teaching Film Custodians are discussed 
elsewhere in this report. To date its activities have been limited to distribution 
of film materials made for other purposes than those of the classroom. 

Any effort to go beyond this limited service necessarily involves the actual 
production, as well as distribution, of films for classroom use. Some important 
steps in this direction have already been taken. 

In 1943 member companies of this association contributed S125,000 to the 
American Council on Education for a o-year program of its commission on 
motion pictures in education. The commission undertook to survey the need for 
classroom films, and to outline screen treatments for needed films. At the prf^ent 
time more than 7-5 film treatments have passed severe critical scrutiny and have 



POSTWAR KCONOMir rOl.U Y ANO PLANNING 2597 

been approved for (heir educational worth. Of tlu>st< jibout ~A) d<>Ml witii tlie 
subject of global geograp!iy; IS witli tlu- iiroblems of l'rei<dom polilical, i-elii;iou.->. 
and economic; and nine or niort- witli niattieinat ical .snl>j(>cl nvatter. 'To date, 
however, none of these film treatments has btHMi turned into a shoot inj; script or 
made inti) a picture. 

On the recommendation of our own S\ibconunittee on Mdiu-ation we allocatcil 
$50,000 of tiiis year's research bud}j,et to the fieUi of visual t<ducalion. Wiliiin 
the current moi\th arrans'ement.s have been completed for thi> usi> of this mon(\v 
to i)roduce some ex[)eriiuental lilms, one on tln> circulation of the blood in maui- 
nuils, aiu>ther probalWy on some phase of global geography, ami |M>rhaps a third 
on some problem in ninlh-gratie mathematics. 

Thes(> films an> to be "(^xperinuMital" in (he senst^ tluil. each is (o be madt> in 
half a do/AMi different versions to test, the elVectiveue.ss of various production 
techniqvu^s. The versiou.s will ilitbM- with respect to the us(> of sound, music, 
diagrams, animation, and montages. Some v(>rsions may us(> comnKMitaiors, 
either off or on stage. In some versions children may i>i> pictiin>d discussin;-, with 
each other the problem or theme t)f the film. 

At least one of these lihns is sctiedul(>d for comphMion by Sep((Mnb(>r. It will 
then be exhibitcMi under controlled conditions in a number of schools with difl'(>nMd. 
versions of tiie film f.t'stcd to se(< which produce b(>st results nnd(M- cl;issroom 
condit ions. 

(4)ncun'en( with tlu^ making of liiesc three cxixMimentMl films, w*> now propose 
to use the know-how of oui" nienil)er companies to mak(> a substjint i;i.l luunbcr of 
films based on tlu* most challenging of the Tf) treatments a.in>a(iy prepared by the 
commission on motion pictures in (>duca,tion. 'I'hes(> films a.n> to be models for 
classroom use, (>xemplifying th(> Ix^st production tcchnicjues available. 'They are 
also exiKM'imental in Ihali tlH\v nuisl prove I heir (>IVeclJv(Miess in t.lM> classi-oom before 
going into general distribution. An (>ducat ional survey has alrejuly determined 
the need for visual aids in t,h(> subjcMrts with which these films will deal. 

(\)iu'eiv(Ml as a public service, the.se model films a.re to b(> made without any 
expectation of or desire for profit. Ibif. we sli;i,ll try to see thai pro<inclion cosIhS 
do not (>\ceed a figure at which tlie i)roduetion of e(|uivalenl films would bo 
conuuercially possible, for our primary intention is to set. practicable st.an(la.rds. 

There are stumbling blocks in various ficilds of instruction — dillic\iltieH in ox- 

S position or uud(n-s|,anding —which teaclun-s believe lilms would help to remedy. 
[*''or cxam|)le, to und(!rst.and tlie scMeniilic facts about f.lit^ (Mnuilation of the blood 
recpiircis the; studiMit to pictuni a c.omplicattMl course of motions. Unltws tlio 
student has an exi raordinary inuigimition, \\\v. actual perc^eption of the circulatory 
motion is almost indispensal)l(\ Tluwe are, similarly, numy problems in geology, 
astronomy, and physics in which moving i)icliir(>s or a.ninuit(^d diagra,ms r.au do 
what, words and charts fail to do. All of us who have trii^l to gra,sp the pi'odoss 
of atomic fission which underlies tlu; (ixplosion of the atomii- bomb want scnMMi 
aninuition of tlu^ diagrams we have scm-u on tiie printiid i)age. 

]|'rom nuitlKMuatics ami the physical S(;ien(U)S at on(! (extreme to biolo;',y a,iid the 
social sci(!iUH!S at tlu; otlu^r, tluin; is no Hubjcuit in the whoh; (!urri<iiilurn of studies, 
at olcm(!irtary, intermcMliaio, or advan(;ed hivc^ls which woidd not beniifit pe(hi- 
gogically from tlu! use of lilms integr.'U.ed with otiiei' meatis and methods of 
teaching. 

'I'Ik! ediurational use of films is by no m(!Jins limited to classroom instruction. 
Motion pictun^s c^an and should b<! used jis visual aids in (!very process in \vlii('li 
knowl(!dg(! and infornnition a.n! disst'tniruited. TIk; WJi.r taught us how valun,l)lo 
thoy an; in tht; training of industrial a,ii(l military skills, in adult (Mhu'.'ition, and 
informing dilFerent groups of the. population about the liv«!S and activities of 
tluiir fellpwmen. 

'JMiousands of 16-mm. proj(U',tors in vvii.r plants ca.rri(Hl (•omphitc! n'ports from 
far-flung bat.tlefronts to workers eager to hov, how the tanks, planes, guns, and 
ships which rolhid from the production lincw Hl,ood up un(|(!r combat conditions. 
Other thousands of Iti-ttun. projectors ca,rri()d war iiifornuitioti to schools, l{ed 
Cross chapters, and various (;ivilian d(>f(!ns(! organi/,ji,(.ions. Still other iJiousiLuds 
of 10-mm. projectors s(!nt ov(!rseas by Aim^ricati WJi.r ag(!n(;i(?s (,old tin; story in a 
doz(;u did'ercuit languages of the IJnilc^d Nations' efforts. 

'I'he (jxperiiiKMital work we do in the production of instru(rtionji.l lilms tor class- 
room use should f.'UMlitate the (ixpansion of th(! (Mlucal.ionaJ usefulness of motion 
pictures in other fi(!](ts. 'I'lu; urgcuit jirobhims of our day, domestic a,n(l inter- 
national, will not be hoIvchI unless <;ducation HUcc(M'ds as it has ni^ver siUiceechid 
before. The effoctivencss of education nuist be niuitiijlied many tinuiH to an 

09570— 47— pt. 6 



2598 POSTWAR ECONOMIC POLICY AND PLANNING 

extent and at a rate which existing educational faciUties and methods cannot 
manage. The educational promise of motion pictures has been demonstrated at 
the very moment in history when the social need challenges us to make good that 
promise with all speed. And we shall. 

EXPANDING WORLD HORIZONS 

Measured in travel time, the social space of the world is now much smaller 
than the Thirteen Colonies when they united to form this Republic. In terms 
of facilities and speed of communication, Canton, China, and Canton, Ohio, Paris, 
France, and Paris, Maine, have almost as much contact as neighboiing villages. 
By all technological standards, the world is one community. 

But world community depends on more than the physics of transport and 
communication. A community consists of men living together in mutual respect 
and understanding and working together for their common welfare. By this 
standard the world is yet far from one. The world could afford disunity when 
its peoples were isolated economically and sejjarated by physical barriers. But 
precisely because the world is today physically and economically one, it must 
become socially and spiritually one or perish in an atomic explosion that will 
destroy civilization as we know it. 

For this unity on which world peace depends, unifying political institutions, 
world-wide in scope, are needed. But they alone cannot do the job. In fact, 
they cannot even begin to operate until the peoples of the world are prepared to 
work together. The impulse to such action must come from trust and under- 
standing, from a spirit of friendliness and fellowship. 

There cannot be one world as long as there are any foreigners in it. The very 
meaning of the world "foreign" must disappear, and with it the plurality of 
discordant foreign policies by which the nations are divided. But the peoples of 
the world will cease to seem strange or foreign to one another only when they know 
each other as neighbors do. To bring them to such knowledge of one another 
is a mission which the motion picture is pecularly fitted to perform. 

It is the only art which all the peoples of the world today commonly enjoy. It 
is the only medium of communication in v,'hich all the peoples of the world can 
speak to one another in the universal language of pictures. Because the moving, 
talking images on the screen have all the immediacy and vitality of life itself, film 
spectators all over the world come into each other's presence and live together 
in the same reality. The community of film spectators is a symbol of the world 
community yet to come. Knowing each other through the film, the most widely 
diverse human groups begin to get the feeling of what it means to be residents of 
the same planet and members of the same race. 

As I see it, the free interchange of ideas is even more important than the free 
interchange of goods. There must be no obstacles to the transit of media of 
communication. Men must have free access to the minds and hearts of one 
another even more than they must have free access to indispensable natural 
resources. 

Free trade and free communication cannot be separated in the case of motion 
pictures. Unless the film productions of all nations can compete freely in the 
world market, this most potent of all media of communication will not flow 
freely in all directions. There may be as yet no satisfactory monetary medium 
for world trade in goods, but the motion picture does provide an adequate medium 
for world trade in ideas. Not to use it as such is to squander one of the best 
resources for world peace. 

As practical businessmen, we shall want, of course, a fair share of the world's 
market. America has no artificial barriers against motion pictures from abroad. 
We gladly w^elcome free competition with the productive talents and skills of other 
nations. I believe that film production in other nations would also thrive on the 
same diet of free competition with American films. 

A world market for American motion pictures spells the difference between 
profit and loss for the American industr.y. I am told that at least one-third of the 
negative cost of motion pictures produced in this country must be recovered from 
foreign revenue. Substantial reduction in this revenue vvill either restrict ex- 
penditures for production to the artistic detriment of the product or throw heavier 
burdens on American exhibitors and consumers. 

The American motion picture seeks no subsidy or special privilege but only free 
access to foreign markets. Our Government's policy of free exchange of media of 
expression is, therefore, a powerful asset in the highly competitive situation which 
confronts the American industry. We expect this policy to be vigorously prose- 



POSTWAR ECONOMIC POLICY AND PLANNING 2599 

cuted and also implemented in numerous treaties and trade agreements to be 
negotiated with foreign countries. To this end, the international department of 
this association has prepared and transmitted to the State Department briefs 
showing the condition and needs of the American motion-picture industry in 21 
foreign countries. 

The close of the war has intensified our export problem in many ways, as shown 
by a subsequent section of this report summarizing this association's service to 
exporters. Restrictive measures in foreign countries have been motivated by 
national pride and the desire of local motion-picture industries to exclude or 
minimize the American competition, the scarcity of dollar exchange, and the 
realization that in the process of entertainment American motion pictures in- 
directly advertise American goods and services. Furthermore, we are now faced 
with strong competition not only from the reestablished and growing British 
industry, l)ut from France, Russia, and other national film industries, some of 
them subsidized and all of them actively jiromoted by their respective governments. 

The accumulation of 5 years of American film production which could not be 
shown in the Axis-controlled countries presents an important business problem 
in the immediate future. Even if there were no government restrictions upon 
the importation of American films into these reopened markets, any wholesale 
dumping of existing products would disastrously affect our own business. For 
this reason, and also to prevent restrictive measures by foreign governments, I 
think we would be wise to decide voluntarily to limit our exports to a reasonable 
number of pictures for such reopened markets. The formation of the Motion 
Picture Export Association was a necessary first step. Concerted action in the 
voluntary restriction of exports could be accomplished in no other way. 

The average foreign country can absorb only a fraction of the total number of 
Ameiican features annually prodiiced. This calls for a selective distribution of 
our export product. Intelligent selection in terms of entertainment value, artistic 
excellence, and social significance would enormouslj' enhance the prestige of the 
American industry abroad. It would also eliminate most of the friction that 
now exists between our industry and local producers in countries such as Mexico 
and Argentina. 

During the war, export censorship control required Government approval of 
the content of films sent abroad. The industry now has full responsibility for 
the content of pictures exported. For example, the industry declined a subsidy 
from the Government for the united news reel and willingly assumed complete 
financial and editorial responsibility for 10 foreign-language versions. These 
are being sent to countries where it is deemed important that American news be 
disseminated. In some of these countries commercial distribution is not feasible. 

With complete responsibility goes the need for self-discipline. We must see 
to it that the films we export give no reasonable offense to the nationals of foreign 
countries. We must make certain that the American way of life is faithfully 
portrayed upon the world's screens. 

I know from personal experience that in many countries the only America the 
people are acquainted with is the America of the motion picture. Their attitude 
toward America and toward the democratic ideals for which America stands 
is conditioned bj' the view we give them of ourselves. That view need only be 
honest and fair in order to be attractive. Democracy needs no apologists or 
whitewashing. 

The most important advantage enjoyed by American motion pictures in the 
world market is the simple fact that people everywhere like them. Ordinarily 
they favor them over local productions, unless they are hindered by government 
regulations. This fact has been amply demonstrated by our experience with the 
films released by the OWI in the liberated European countries. Even our pre- 
war films, which had been hidden during German occupation, are now crowding 
the theaters in countries where, on account of government restrictions, newer 
American films are not vet available. 

Obviously, the industry must compete vigorously in existing markets. But 
many of these markets are static. In contrast, there are dynamic markets in 
those areas of the world which are in process of rapid industrialization and economic 
expansion. I am thinking of such countries as Egypt, the oil lands of the Near 
East, the industrialized areas of India, China, and certain parts of Latin America. 
These should be of increasing concern to us, if we wish to expand the volume of our 
export trade. 

Beyond this, there are vast areas of the world in which the standard of living 
is still too low to permit substantial expenditures beyond the needs of subsistence. 
We must adapt ourselves to such situations, using 16-mm. film and equipment in 



2600 POSTWAR ECONOMIC POLICY AND PLANNING 

order to cut costs and bring motion pictures within the econor^ic reach of the 
teeming millions in these areas. 

In the rural hinterland of relatively undeveloped countries, illiteracy compH- 
cates the language problem. Here we must experiment with dubbed dialogue 
instead of the customary superimposed titles. Films with superimposed titles 
are usually preferred by the more educated people in the cities, but where a sub- 
stantial percentage of the population is illiterate, what is needed is the sound^of a 
language they understand. 

It is through such adaptations that the motion picture educates and elevates 
while it entertains. To the degree that our producers are able to deal simply 
with the basic facts of life, they will help to establish a common denominator of 
economic standards, human values, and audience appreciation. The motion 
picture can truly become the primary medium through which peoples speak to 
peoples only when its fundamental content has universality. 

PROGRESS IN RESEARCH 

This industry has long been in need of a research program carried out cooper- 
atively for the benefit of the entire industry. For the first time the association's 
financial program for the coming year contains a substantial sum for research. 

Of the two fields of research — technological and statistical — it is only in tech- 
nology that the industry has supported research activities. But even here 
research has been done under the private initiative of specialized groups. The 
great lesson we have learned from the outstanding successes of research in med- 
icine and atomic physios is the value of coordinating many different lines of 
investigation. This .\psociation is the natural agency to coordinate all the efforts 
of technological research in specialized fields. 

The producers, distributors, and exhibitors of motion pictures have been the 
beneficiaries of a vast amount of technological research conducted chiefly by 
individual organizations not related to the business of making, selling, or ex- 
hibiting films. To this extent we have reaped where we have not sown. Wo 
owe a debt of gratitude to Edison and other scientists in the field of electronics, to 
George Eastman and other manufacturers of film and camera equipment, to the 
sound and projection engineers, to the technicians in light and color photography. 
Our own Hollywood studios have performed researches in specialized fields, 
leading to scores of new processes and inventions. This work has been fostered 
by such industry organizations as the Society of Motion Picture Engineers and 
the Academv of" Motion Picture Arts and Sciences. 

We should encourage these efforts. We should aid the expansion and intensi- 
fication of all sucy research activities. But the Association's most important 
function is to coordinate all forms of techological research. 

Turning now from technological to statistical research, we find a quite different 
situation. The motion-picture industry probably knows less about itself than 
any other major industry in the Uhited States. The industry has grown so fast 
that it hardly has had time to measure its own growth. Consequently, it pos- 
sesses todav only a smattering of information about its own operations. 

Much of the statistical data published about this industry is based on hearsay, 
personal opinion, the casual impressions of persons unfamiliar with the business, 
or the natural exuberance of born promoters. Time and again the industry is 
faced with facts and figures from hostile sources in legislative and tax arguments, 
in public controversies, and in critical descriptions of our business methods and 
policies. These often appear to us to be wildly inaccurate. Yet we have difficulty 
in refuting or correcting such distorted data because adequate verified statistical 
information is unavailable. This deficiency has been the object of well-founded 
criticism by adherents of sound business practice. 

What, for example, are the definitive answers to the following questions: 

How many people (on the average) attend motion picture theaters weekly 
in the United States? In the world? 

How manv theaters are there in the United States? Location? Open? 
Closed? Seating capacity? Admissions? Double feature? Single feature? 
What is the relationship between cost of films and their drawing power? 
How effective is motion-picture advertising? What are the most effective 
appeals? The most effective media? 

What is the average admission price charged? How does this compare 
with years when lower Federal taxes were in effect? What is the trend? 

How many families in the United States derive their support from the 
motion-picture industry? 



POSTWAR ECONOMIC POLICY AND PLANNING 2601 

This list of elementary, yet crucial, questions could be extended indefinitely. 
We have hardly a single answer which has statistical accuracy and scientific 
precision. 

In view of this situation we should certainly refrain from giving to the public 
estimates which are only "guesstimates." Any statement containing quanti- 
tative data expressed numerically should be checked for its accuracy, and if we 
lack the facts to verify the figures, we should omit the figures. 

It is a satisfaction to report that the association has taken steps to improve 
the situation. Our statistical research program should, first, attempt to correct 
the probable misinformation already existing in the public domain. The currency 
of such misinformation may be more damaging than no information at all. 

The industry has a responsibility to the public for the dissemination of factual 
information on motion pictures and industry operations. Only in this way can 
public opinion be reliably informed about our business. If we expect the public 
and the press to know us as we really are, we must supply them with reliable 
information about ourselves. 

We should also engage in research projects designed to furnish the industry 
with scientific data as a basis for the formation of policies. And we should 
undertake special studies concerning the value of the motion picture not only 
as a medium of entertainment, but in all its other important functions. The 
results we obtain may enlighten the public — and, perhaps, even the industry itself. 

There is, finally, the whole field of con.sumer or audience research. Here a 
beginning has been made through studies of some local communities and audience 
reaction to individual pictures. Comprehensive, Nation-wide statistical surveys 
remain to be done. 

Why do some people go to the movies, and why do others stay away? What 
sort of people are in each group? What is the attitude of the average person 
toward motion pictures in general'? Toward certain types of pictures? Toward 
the people who appear in them or who run the business? What existing exhibition 
practices encourage or discourage moviegoers? 

All of these questions have an answer. An answer that is dependable can be 
reached by scientific methods now available. 

Dependable answers to these questions can have a strategic importance within 
the next 10 years. Today the theaters are packed. This would seem to be the 
opportune time to initiate such studies. What we learn from them now may 
mean economic health for the industry when the struggle is to fill seats rather 
than to find them. 

This entire program of statistical research is not Avorth conducting unless it is 
carried out with the conviction that the truth — no matter what it is — best serves 
the long-run interests of the industry. The findings may not always be pleasing. 
But unless they are faced, sound correctives cannot be applied. The integrity 
and intelligence of our statistical analysts must be of such a character that con- 
fidence can be placed in their ability to distinguish between facts which may be 
made available to the public through appropriate association channels and those 
which must be regarded as private operating data. Our aim in the field of statis- 
tical research can be accomplished only with the full cooperation of all parties, 
and only if it is unhampered by preconceptions or unjustified fears. 

NEW CHAPTER IN LABOR RELATIONS 

We honor the distinctive role of motion pictures in our society by calling them 
the art of democracy. No other art has ever entertained so vast an audience or 
served to establish so wide a community of enjoyment. I wish we could similarly 
honor the industry which has developed this art form by calling it the industry 
of democracy 

No sooner had I accepted the presidency of this associi tion, however, than I 
found myself confronting a situation in Hollywood which seemed to me the very 
antithesis of industrial good order. A jurisdictional strike was then in its 28th 
week. Another 16 weeks elapsed before the unions involved were able to achieve 
a working agreement between themselves which allowed the studios to function 
with even a fair degree of efficiency. Even now, there is a residue of uncertainty 
and disharmony. 

That the motion picture industry is the child of free enterprise will not be 
questioned. It has certainly been the beneficiary of the ways of a free economy. 
Now it should become the benefactor, in fact, a leader in the movement toward 
industrial democracy. 



2602 POSTWAR ECONOMIC POLICY AND PLANNING 

The future of the American economy depends upon the establishment of 
economic democracy. Without this, neither political democracy nor the capitalist 
economy can long survive. They certainly cannot flourish. 

The meaning of industrial or economic democracy can be derived from our 
understanding of democracy in the political field. A politically democratic 
society is one in v/hich all men have a voice in their own government, actively 
participate in public affairs, and feel that they have a share with their fellow 
citizens in the common good for which they strive. In a democracy there are 
no political pariahs. All inequalities are based on differences in talent and 
function, not on special or arbitrary distinctions of privilege. The President of 
the United States has no rights other than those which belong to him as a citizen. 
The least citizen has the same rights and an equal share in the benefits of American 
life. 

If the capitalist economy is to become truly democratic every man must have 
a stake in capitalism just as every citizen shares in the political common good. 
Industry must be democratically organized. This does not mean a false concept 
of equality which abolishes all distinctions of rank and function. It does mean 
that workers at all levels of the industrial hierarchy must have a voice in the 
government of their industry and must accept commensurate responsibilities. 

The opposition of management and labor in America today is the consequence 
of their undemocratic separation. So long as people continue to think in terms 
of a sharp separation, in both interests and functions, of labor and management, 
no genuine reconciliation is possible. We must abolish the need for harmonizing 
discordant elements in industry by mending the breach between them which 
makes them discordant. 

The debt the motion-picture industry owes to American democracy and the 
American economy is too obvious to mention. It should be repaid by setting 
the example of a responsible and enlightened leadership in industry. Such 
leadership must even be willing to sacrifice short-range advantages for long-range 
benefits to the public and, therefore, ultimately to itself. 

Now that we have passed the emergency, precipitated by last year's jurisdic- 
tional strike in Hollywood, we must begin to develop a long-range labor-relations 
program. Our industrial organization should be totally reoriented on a new 
plane based upon cooperation between all its working factors. First of all we 
must rectify any glaring mistakes and abuses which have prevailed. Then we 
must develop a system of handling disputes which utilizes conference, m.ediation, 
and arbitration. The high level of intelligence which obtains in the Hollywood 
guilds and crafts is a favorable factor. Other favorable factors are the high 
wage level and the unusually attractive working conditions. If we cannot for- 
mulate a practicabl(? program for cooperative employer-employee relations in 
Hollywood, then who can? 

The range of employment extends from stars to extras. In between these 
two types, which are paid respectively by the picture and by the day, are contract 
players already compensated on an annual basis, and members of the crafts and 
guilds, most of whom work with considerable regularity. The time has come 
to study means and methods of securing continuity of employment. Unquestion- 
ably much of labor's unrest comes from a feeling of job insecurity. The higher 
wages which this industry pays over wage rates to comparable skills in the Los 
Angeles area is merely an attempt to give financial remuneration for job insecurity. 
I realize full well the inherent causes of intermittent employment in this industry. 
Nevertheless, we must go on exploring means and methods to secure the maxi- 
mum job continuity. 

We speak of the motion picture as an art industry. We take pride in its being 
the democratic art. That is only half the story. Let us complete it by making 
this industry industrially democratic. 

INCREASED RESPECT FOR INDUSTRY SELF-DISCIPLINE 

When I became president of this association I affirmed the industry's well- 
established program of self-regulation as the surest guaranty against all forms of 
externally imposed censorship. The three voluntarily adopted codes, governing 
film content, titles, and advertising, represent an enlightened policy of self- 
discipline. This policy rests on the solid foundation of respect for common 
principles of morality and decency. 

As I see it, no liberty is lost in this process. True freedom is always liberty 
under law. Its proper exercise is never incompatible with moral principles. 
Those who want a lawless freedom, a freedom to do whatever they please regard- 



POSTWAR ECONOMIC POLICY AND PLANNING 2603 

less of the precepts of virtue and the welfare of the community, confuse the 
privileges of liberty with the indulgences of license. 

I recognize that it has become fashionable in certain quarters to question moral 
values, to deride traditional virtues, to rationalize brutality, to make excuses for 
moral indignity. Speaking against this tendency, I pointed out, in an address 
delivered to the Writers War Board 9 months before 1 became president of this 
association, that humanity's rules of morality and fair dealing do not consist of 
"arbitrary laws imposed upon us from without. They are the product of thou- 
sands of years of human experience — the quintessence of the wisdom of the ages. 
To violate these codes brings disaster as surely as the violation of the physical 
laws of nature brings disease and death." 

The industry's established policy faces another source of misunderstanding and 
criticism. Some who do not question the validity of moral principles do challenge 
censorship as a means for maintaining moral standards. I agree with them that 
censorship is a bad means to a good end. But if they, in turn, agree that the end 
is good — that freedom of expression must serve the public welfare, not violate 
it — then they must recognize the need for some other means to secure the common 
good. The only alternative to external regulation in matters of morality is self- 
regulation, just as the only alternative to coercion is voluntary compliance. 

I do not see how anyone can escape the force of this reasoning. If there are 
natural moral rules which direct the conduct of human life and society for its 
good, they deserve obedience from all reasonable men. Those who are not 
reasonable enough to obey the voluntary dictates of their own conscience must 
be compelled to obey by the external, coercive force of law. There are no other 
alternatives. So in the case of motion pictures, if the soundness of their moral 
content seriously affect the lives of children and adults, and thus the welfare of 
the whole community, then the problem of the moral integrity of hlms is optional 
only with respect to the means for maintaining it. External censorship or self- 
discipline. We are obliged to .choose between them. 

So far as I know, only one other alternative has ever been proposed. It was 
first advanced by John Milton in his famous essay on the freedom of the press, 
and has been revived recently in a discussion of motion-picture censorship. The 
proposal is that works of artwhich offend public taste or violate morality should 
be subject to restrictive action only after they have been produced and given to 
the public. This is not a genuine alternative — less so in the case of motion 
pictures than in the field of printed matter. To prevent great financial losses 
the motion-picture industry would still find it necessary to regulate the moral 
content of films in the process of production rather than risk the removal of 
films from the screen or their artistic mutiliation after their exhibition had 
brought adverse official action. 

Self-discipline as a part of the production process is exactly the opposite of 
censorship imposed after production has been completed or after a work of art 
has been exhibited. The artist who voluntarily complies with certain dictates 
of morality and decency does not surrender his artistic integrity. He has shaped 
the work of art entirely himself, even though his workmanship was guided by 
moral as well as by artistic principles. This is nonetheless true when several 
film makers, comprising an association such as ours, establish a joint supervision 
of their own work. The production code administration is just that. 

External censorship works in the opposite fashion. It violates the integrity 
of art. It treats the artist as if he were incompetent to judge his own work on 
any except artistic standards. It takes the finished work of art from his hands 
and then tampers with it. 

I realize that the motion-picture industry, from long experience, has learned 
the wisdom of self-regulation. Trying to solve the problem of how the vast 
power of the motion picture shall be used for good rather than evil, the industry 
has chosen the way of liberty rather than the way of compulsion. It has also 
chosen that method of combining the dictates of morality with the techniques 
of art which neither violates the artistry nor compromises the morality. In fact, 
the process of self-discipline with regard to moral content has plainly resulted in 
raising the artistic level of our productions year after year. _ 

There is no need then to confirm the industry in its fundamental conviction 
concerning self-regulation. But this does not mean that the various codes under 
which self-regulation operates are free from criticism. On the contrary, they are 
continually questioned or attacked both from within the industry and from 
without. Individual producers are often irked by adverse decisions under the 
codes. They would not be human if they weren't. And we know that the pro- 



2604 POSTWAR ECONOMIC POLICY AND PLANNING 

duction code as a whole is made fun of whenever some movie critic thinks he has 
ground for complaint against a particular ruling of the code's administrators. 

These are the most persistent criticisms but they are also the most easily 
answered. They arise from a fundamental failure to distinguish between general 
principles and their application to cases. This is a common error which men 
make in their reaction to any body of laws and their administration. It is not 
peculiar to attacks on the motion-picture production code. 

General rules do not by themselves decide particular cases. Human beings 
are required to interpret the rules and to apply them to the ever-differing facts 
of particular cases. Because of the difficulty of the case or because of human 
fallibility, even the best rule is sometimes misapplied. It is therefore no reflec- 
tion on the validity of the production code, or the soundness of its principles and 
rules, to complain about the unsoundness of an official ruling in a particular case. 
The ruling mav be wrong, but, even if it is, the rule which was misapplied still 
remains a good rule to apply well the next time. 

If this erroneous thinking were corrected, the greater part of the attacks on 
the production code would never occur. Baseball fans do not raise a cry against 
the rules of the game even when they are howling at the top of their lungs against 
the ruling of an umpire on a particular play. Perhaps the critics of our codes of 
self-regulation — whether they are sitting in the bleachers or are in the game 
itself — can also learn to question a particular decision under the code without 
unjustifiablj' exaggerating that criticism into an attack on the code itself. 

Perhaps also our critics can learn to be tolerant of a certain proportion of 
mistakes. Until the baseball umpire is able to call all the plays to the satisfaction 
of everyone on the teams and in the stands, let no one expect the administrators of 
our codes to be infallible. Until that day arrives, we must proceed to apply 
the codes with a normal amount of error, meanwhile maintaining our allegiance to 
the principles of self-regulation. 

If these principles are wrong, let us give them up. If the codes are unsound, 
let us modify them or amend them. But if in principle, precept, and practice 
they still command our support — and they do — then let us pledge anew our 
loyalty to the principles and be faithful in their execution. 

Eric Johnston, President. 

II. The Association in the Service of the Industry 

The officers and staff of the Motion Picture Association are enlisted in the in- 
dustry's service. No department limite its activities to members only. The 
public relations of the motion-picture industry must be increasingly the concern 
of all its component parts. Departmental activities of the association dsecribed 
liere affect, directly or indiiectly, every person in the industry. 

Sixty-eight domestic and foreign motion-picture producers and all 11 national 
motion-picture distributors used the facilities of the production and adveitising 
code administrations and the title registration bureau during 1945. Books, plays, 
and scripts were read, completed films reviewed, titles checked and cleared, and 
advertising campaigns examined with equal impartiality for members and non- 
members. Negotiations with foreign governments over restrictions on imports, 
blocked funds and taxation invariably took into account the equities of non- 
members. 

The association in serving the whole industry, likewise serves the public. 
Elimination of a film fire hazard is to everyone's advantage. Elimination of 
objectionable material from a sciipt, a finished film, or a newspaper advertise- 
ment is also mutually helpful to producer, distributor, exhibitor, and the public. 

Enlistment of community service groups in support of the finest pictures has 
enabled producers to draw more confidently upon literature, history, and biog- 
raphy for subjects and convinced exhibitors of strong public support. Standards 
of motion picture appreciation have risen and use of films as visual aids has grown. 

War's end in 1945 not only completed another chapter in motion-picture his- 
tory but marked the end also of a 24-year regime duiing which Will H. Hays gave 
devoted leadership to this association as it spresident. In this section of the 
report on department activities, important facts and figures have been assembled 
for past years, which register progress achieved and provide base lines from 
which further advances mav be charted. 

E. J. 



POSTWAR ECONOMIC POLICY AND PLANNING 



2605 



SERVICES OF PRODUCTION €ODE ADMINISTRATION 

No less than 68 domestic and foreign producers utilized the services of this 
department in 1945. Opinions as to the suitability under the code of story 
material and completed pictures, are rendered on indentically the same basis to 
members and nonmembers of the association. Within the past 3 years one new 
producing corporation after another has been organized by groups of actors, 
writers, directors, agents, and producers. Without notalale exception these 
groups have sought advisory opinions from the PCA before and during production 
and have submitted finished pictures for code certificates. 

The voluntary nature of such action is highlighted by the fact that 4 of the 11 
national distributors of motion pictures in the United States were not members 
of the association at year end, hence were under no obligation to restrict them- 
selves to distribute only approved films. Also the joint obligation previously 
resting upon members of the association not to show unapproved films in theaters 
owned or controlled by them, was removed 4 years ago. The production code 
has now proved itself on its merits. Finer pictures with higher moral standards, 
with increased entertainment appeal and genuine social significance, are being 
made. 

Exhibit 1 shows a total of 5,807 new features approved during the past 11 
years — an average of 528 new feature productions per year. Last year's total of 
389 substantially below this average, is accounted for by wartime dislocations, 
shortages of raw stock, and the absence of many popular stars, experienced 
producers and technicians who were in uniform. 

Short subjects approved in 1945 numbered 521, as compared with 567 the 
previous year and 846 in 1935. The annual production of shorts fell of? in 1943 
when releases by the War Activities Committee for the armed services, civilian 
war agencies, and national charities sharply reduced available commercial playing 
time. 

No feature picture or short subject produced in 1945 and submitted to the 
PCA failed to receive the association's certificate. Forty-three features, rejected 
on first review, were later approved after changes. There were two appeals to 
the board of directors, which sustained the PCA, resolved the disputes, and issued 
seals. 



Exhibit 1. — Feature-length pictures and short subjects {including serials) approved 
by the production code administration, 1935-45 ^ 





1935 


1936 


1937 


1938 


1939 


1940 


1941 


1942 


1943 


1944 


1945 


Total 


Feature-length films: 


























Domestic production: 


























Member compa- 


























nies 


334 


337 


339 


322 


366 


325 


406 


369 


256 


284 


230 


3,568 


Nonmember com- 


























panies 


169 


229 


228 


169 


161 


154 


140 


147 


141 


146 


128 


1,812 


Foreign production: 


























Member compa- 


























nies 


y 


1 


J-- 


5 


1 


J ' 


5 


12 


10 


6 


14 


1 


Nonmember com- 




^2 55 




U57 












\ 427 


panies .. 


52 


J 


1 41 


49 


1 


\ 40 


17 


18 


10 


6 


17 


) 






Total new 


























features 


564 


621 


608 


545 


584 


523 


568 


546 


417 


442 


389 


5,807 


Reissues. 


338 


142 


55 


49 


12 


7 


4 


2 






1 


610 










Total all fea- 


























tures 


902 


763 


663 


594 


596 


530 


572 


548 


417 


442 


390 


6,417 


Shorts, including serials: 


























United States mem- 


























ber companies 


564 


607 


477 


683 


494 


477 


641 


616 


440 


514 


466 


5,979 


United States non- 


























member companies.. 


282 


223 


318 


150 


215 


227 


70 


66 




51 


55 


1,657 


Foreign companies.. 




1 


4 





6 


3 


10 


1 


9 


2 




3d 








Total shorts 


846 


831 


799 


833 


715 


707 


721 


683 


449 


567 


521 


7,672 


Total films ap- 


























proved 


1,748 


1,594 


1,462 


1,427 


1,311 


1,237 


1,293 


1,231 


866 


1,009 


911 


14, 089 


Total films rejected. 


14 


3 


9 


4 


2 


2 


2 


3 


1 






3 40 









' Comparable data unavailable prior to 1935. 
' Break -down unavailable. 

' Of the 40 films rejected (all feature-length) during the period 1935-45, 13 were subsequently reedited, 
re-reviewed, and finally approved. The remaining 27 films have never been approved in any form. 



2606 



POSTWAR ECONOMIC POLICY AND PLANNING 



The advisory services of the PCA enable producers to avoid mutilation of 
completed films by political censor boards. When scripts are submitted, probable 
censor cuts are pointed out. Usually another way can be found — often suggested 
by the PCA — to accomplish the desired dramatic or artistic effect without risking 
such damaging deletions later. The 1945 record in New York illustrates the 
practical value of such advice. Eight hundred and thirty-one features and shorts 
laearing the association's seal were submitted; 815 were approved without a single 
deletion. 

American producers also are paying most careful attention to PCA advice 
against use of language, costume, lyrics, and stage business likely to prove ob- 
jectionable to any substantial segment of the world audience. British producers, 
in turn, have commenced submitting scripts to the PCA on films destined for 
ultimate release in the United States, thus enabling the association to give them 
the same continuous service provided domestic producers from first story treat- 
ment to final review of finished film. 

Exhibit 2. — Services of production code administration prior to review oj completed 
features and short subjects, 1935-45 



Year 


Number of 
books, stage 
plays, syn- 
opses, and 

scripts 
(including 
changes) 
analyzed 
and con- 
sidered 


Number of 
consulta- 
tions 


Number of 

letters and 

opinions 


Year 


N umber of 
books, stage 
plays, syn- 
opses, and 

scripts 
(including 
changes) 
analyzed 
and con- 
sidered 


Number of 
consulta- 
tions 


Number of 

letters and 

opinions 


1935 


1,366 
1,407 
2,963 
3,423 
3,444 
3,050 


1,833 
1,448 
1,478 
1,491 
1,509 
1,453 


5, 358 
6,268 
6,477 
5,922 

5,184 
4,708 


1941 


3,403 
2,739 
2,694 
2,964 
3,239 


1,050 
1 141 
> 147 
1 165 
1 122 


4,300 


1936 


1942 


3,423 


1937 


1943 - 


3,306 


1938 

1939 

1940 


1944 

1945 


3,739 
3,420 



I Since 1942, "consultations" have been tabulated only when later reduced to writing for permanent 
record. Prior thereto all phone calls and conversations about code matters were included. 



It thus appears from exhibit 2 that 52,105 written opinions were rendered 
producers of motion pictures by the PCA during the past 11 years. 

A substantial percentage of the 3,420 opinions rendered in 1945 dealt with 
novels and other literary material containing important elements basically ob- 
jectionable under the code. Of 581 new feature scripts and treatments submitted 
to the PCA, 47 initiallj' rejected were revised, resubmitted and eventually 
approved. Another 59 books, plays, treatments^ and scripts were rejected in 
toto while 23 other books, plays, treatments, and sciipts were rejected in part 
with none of these resubmitted pnor to December 31, 1945. Much of this mate- 
rial in revised form will doubtless require the attention of the PCA in 1946. 

These figures indicate the vigilance required to counteract the prevailing moral 
laxity of wartime. It is also obvious that a substantial number of widely read 
novels fail to measure up to the standards of morality and good taste to which 
the organized motion picture industry adheres. There was a time when announce- 
ment that a feature picture was to be based upon a salacious novel or stage play 
aroused a storm of public indignation. Today it is taken for granted that the 
industry's machinery of self-discipline will function effectively and that basically 
objectionable elements in such published works will be eliminated in the transfer 
to the screen for exhibition to mixed audiences of all ages. This current attitude 
attests the public confidence in the industry's self-regulation. 

Exhibit 3 indicates sources of feature picture material during the 11-year 
peiiod for which accurate statistics are available. Original screen stories supplied 
63.6 percent of the total. Theie were 398 stage plays transferred to the screen 
(7 percent of total) while 976 novels formed the basis for 17.2 percent of all feature 
productions. Fiftj'-nine biographies accounted for 1 percent of the total. Short 
stories, 393 in number (6.9 percent of total), were the basis for feature-length 
films. Only 10 short stoiies, however, were transferred to the screen in 1945 as 
compared with 82 in 1941 and 59 in 1939. 



POSTWAR ECONOMIC POLICY AND PLANNING 



2607 



Of the 5,807 new features approved by the PC A during the 11 -year period, 
5,443 were based upon original screen stories, stage plays, novels, biographi(!s and 
short stories, with another 364 feature films originating from unknown or mis- 
cellaneous sources. 

Exhibit 3. — Source material of feature-length picttires approved hy production code 

administration, 1935-45 ^ 



Year 


Original 
screen 
stories 


Stage plays 


Novels 


Biographies 


Short stories 


Source un- 
known 


Miscella- 
neous 2 


Num- 
ber 


Per- 
cent- 
age 


Num- 
ber 


Per- 
cent- 
age 


Num- 
ber 


Per- 
cent- 
age 


Num- 
ber 


Per- 
cent- 
age 


Num- 
ber 


Per- 
cent- 
age 


Num- 
ber 


Per- 
cent- 
age 


Num- 
ber 


Per- 
cent- 
age 


19353 

19363 


244 
371 
391 
316 
329 
323 
358 
401 
312 
321 
251 


47.0 
67.8 
64.3 
68.0 
56.3 
61.8 
63.0 
73.4 
74.8 
72.6 
64.5 


41 
38 
39 
30 
34 
61 
57 
31 
23 
28 
26 


7.9 
7.0 
6.4 
5.6 
5.8 
9.8 
10.0 
5.7 
5.5 
6.3 
6.7 


142 
92 
102 
140 

127 
109 
58 
57 
42 
48 
59 


27.4 
16.8 
16.8 
25.7 
21.8 
20.8 
10.2 
10.4 
10.0 
10.9 
16.2 


3 

2 
12 
2 

17 
8 
4 
7 
2 
2 


0.6 
.4 

2.0 
.4 

2.9 

1.5 
.7 

1.3 
.5 
.5 


37 
39 
46 
54 
59 
21 
82 
29 
6 
10 
10 


7.1 
7.1 
7.6 
9.9 

10.1 
4.0 

14.6 
5.3 
1.4 
2.3 
2.6 


28 


6.4 


24 
6 
7 
3 
8 
11 
4 
13 
16 
24 
41 


4.6 
.9 


1937 


11 


1.8 


1. 1 


1938- 


.5 


1939 

1940.. 


10 


1.7 


1.4 
2. 1 


1941 

1942 


5 
8 
16 
9 
2 


.9 
1.5 
3.9 
2.0 

. 5 


.7 
2.4 


1943.. 

1944 


3.9 
5.4 


1945 


10.5 










1935-45 


3,617 


63.6 


398 


7.0 


976 


17.2 


59 


1.0 


393 


6.9 


89 


1.6 


156 


2.7 



' Does not include pictures reissued. 

2 Including such sources as comic strips, radio programs, nonfiction, travelogues, poems, etc. 

3 Data for this year includes pictures approved in Hollywood ofEce only. 



SERVICES OF ADVERTISING CODE ADMINISTRATION 

A million one hundred and sixty thousand still photographs and more than 
half a million advertisements, posters, and other pieces of promotional material, 
including miscellaneous displays, publicity stories, exploitation items, and screen 
trailers, have been serviced by the advertising code administration during the 
12 years of its operation. Tabulation of various items in exhibit 4 shows 134,897 
advertisements submitted, of which 3,848 had to be rejected or revised; 20,449 
posters submitted with 470 rejected or revised; 155,869 publicity stories, of which 
only 119 had to be changed; 8,879 trailers screened, of which 65 were rejected or 
changed, and 5,371 press books examined with changes in 20. 

On a percentage basis the rejections or requested changes involved less than 
1 percent of the enormous total of material submitted. Most items originally 
rejected were later revised and approved. 

Closer cooperation from nonmember companies, plus other contributing factors, 
resulted in a very considerable increase in the number of items (other than stills) 
submitted in 1945. Advertisements, posters, publicity stories, and exploitation 
ideas serviced by the New York office all showed major increases. 

Stills submitted to the Hollywood office decreased by almost 10,000, in line 
with the decrease in new picture production. War restrictions on material also 
contributed to this decrease. With photographic material so scarce, the studios 
showed an increased tendency to consult with the Hollywood administrator about 
code requirements before shooting any doubtful subjects. 

There was a slight increase in the percentage of rejections or revisions in items 
other than stills. These involved a comparatively small number of pictures, most 
of them farces or crime stories. Ten troublesome pictures (2}^ percent of the 
total) accounted for 33 percent of all rejections or revisions in ads, posters, and 
accessories. 

All companies gave uniformly good cooperation in making revisions necessary 
to meet the requirements of the code. As a result there were no serious public 
protests during the year over any motion-picture advertising or displays. The 
moral content of film advertising continues to meet the requirements of the code. 



2608 



POSTWAR ECONOMIC POLICY AND PLANNING 



Exhibit 4. — Motion-picture advertising and publicity materials serviced by adver- 
tising code administration, 1934-45 





Still photographs 


Advertisements 


Posters 


Publicity stories 


Year 


Submitted 


Rejected 

or 
revised 


Sub- 
mitted 


Rejected 

or 
revised 


Sub- 
mitted 


Rejected 
or 

revised 


Sub- 
mitted 


Rejected 

or 
revised 


1934 


39,230 
103, 310 
108,718 
129, 456 
103, 357 
109, 083 
98, 333 
121,584 
98, 335 
84, 386 
87, 059 
77, 189 


836 

927 

762 

824 

361 

845 

1,217 

2,350 

1,308 

668 

700 

487 


12,060 
12,450 
16, 196 
10, 240 
9,8;J0 
12,386 
11,256 
11, 143 
10,099 
9.243 
9,410 
10,584 


357 
351 
353 
397 
222 
198 
324 
472 
313 
253 
231 
377 


2,016 
2.044 
1.576 
1,647 
1,937 
2,013 
1.759 
1,615 
1,555 
1,458 
1,285 
1,544 


31 

62 
29 
16 
12 
32 
39 
37 
35 
49 
56 
72 


15,400 
15,600 
15,323 
15,547 
15, 044 
15, 709 
10, 646 
9,844 
9,589 
8,487 
8,127 
16,553 


35 


1935 


16 


1936 


6 


1937 


6 


1938 


6 


1939 


3 


1940 




1941.. 


3 


1942 


1 


1943 .- 


4 


1944 


1 


1945 


40 






Total 


1,160,040 


11,285 


134,897 


3,848 


20,449 


470 


155, 869 


119 






Percentage of re- 
jections or re- 
visions 1934-45 


0.97 


2.85 


2.30 


0.08 



Year 


Exploitation ideas 


Miscellaneous acces- 
sories ' 


Trailers » 


Press books ' 


Sub- 
mitted 


Rejected 
or revised 


Sub- Rejected 
mitted or revised 


Sub- 
mitted 


Rejected 
or revised 


Sub- 
mitted 


Rejected 
or revised 


1934 

1935 

1936 . 


11,600 
12, 100 
8,007 
8,365 
9,388 
10, 554 
9,011 
9,641 
7,188 
6.377 
6,158 
6,887 


35 

17 

9 

6 

3 

5 

11 

21 

11 

8 

4 

21 


10, 320 
11, 100 
6,128 
6,391 
6,252 
6,960 
4,796 
4,915 
4,999 
5,562 
5,380 
4,644 


7 

53 

82 

22 

U 

15 

16 

18 

8 

3 

4 

26 


331 
867 
873 
903 
747 
981 
1,027 
1,129 
918 
405 
320 
378 


4 
3 
6 
5 
3 
9 
9 
3 
10 
5 
2 
6 


403 
401 
415 
438 
434 
509 
490 
539 
508 
436 
397 
401 


i5 


1937 




1938 




1939... 




1940-.. 




1941 




1942 

1943 


2 


1944 




1945 


3 


Total 


105, 276 


151 


77,447 


265 


8,879 


65 


5,371 


20 


Percentage of rejec- 
tions or revisions, 
1934-45 - 


0.14 


0.34 


0.73 


0.37 





















1 Including lobby display cards, window cards, heralds, throw-aways, etc. 

2 Previews of coming attractions averaging 150 to 175 feet, with a running time of less than 2 minutes. 
' Complete advertising and promotional campaigns on individual pictures for theater use. 



TITLE REGISTRATION SERVICE 

This service, available both for members and nonmembers of the Association, has 
for its major objectives (1) protection of valuable rights in motion-picture titles, 
(2) establishment of priorities and other usage rights, (3) avoidance of harmful 
similarities and the expense and delays of litigation to adjudicate conflicting 
claims, and (4) approval of titles on the basis of moral suitability and the accepted 
standafds of good taste. 

Each of the 30 motion-picture companies utilizing this service receives a daily 
report of all registrations. Each signatory to the basic agreements covering title 
registration and use is obligated not to use any registered title until prior registration 
is terminated or the title is otherwise released for use. As pictures are produced 
and released, titles are taken off "priority registration" and placed on the release 
index which, on December 31, 1945, contained 40,990 titles of previously released 
features and short subjects. 

Interesting illustrations of this service merit description: 

1. Priority registration. — Within an hour after King Edward VIII's abdication 
speech in which he used the phrase "the woman I love," several telegrams were 
dispatched 2 or 3 minutes apart addressed to the association's title bureau applying 



POSTWAR ECONOMIC POLICY AND PLANNING 



2609 



for priority registration of this phrase as a motion picture-title. Western Union's 
filing time on each message determined the order of priority under which this title 
was registered for rival claimants. 

2. Title similarity. — The list of 350 titles on file at year end containing the word 
"man" far surpassed in scope the well-know jingle "Rich Man, Poor Man, Beggar 
Man, Thief," for in addition to these well-known members of society there are 
registrations for Primitive Man, Caveman. Brute Man, Superman, Wonder Man 
Ladies' Man, Anchor Man, Hired Man, Confidence Man, Average Man, Missing 
Man, Butter and Egg Man, Better Man, Wing Man, Nobody's Man, Cinderella 
Man, Top Man, Thirteenth Man, Invisible Man, Bad Man, Melody Man and 
The Thin Man. 

The same card index lists The Man Who Came to Dinner, Man About Town, 
Edison the Man, My Man Godfrey, The Man in the Iron Mask, and The Maii 
Without a Country. 

Gentlemen in trouble included: The Man in the Trunk, The Man in Her Eye, 
The Man Between, Woman Chases Man, and You Man, You. It is not clear 
from the record which one of these received the admonition Go West, Young Man 
(also registered), nor to which was addressed the query Little Man, What Now? 
Most appropriately, this title file ends with The Last Man on Earth. This 
partial list of titles in one category illustrates the problem of title similarity which 
each year grows more difficult. 

Recent arbitrations included an award to the owner of a copyrighted work 
titled "The American Way" as against an applicant who offered for registration 
the original title, "An American Story"; an award to the owner of a copyrighted 
work titled "No Surrender" as against an applicant for registration of a title 
adjudged to be harmfully similar — Never Surrender. Arbitrators found no 
harmful similarity between such titles as Casablanca and Adventures in Casa- 
blanca; Casanova Brown and Cluny Brown; The Pirate and The Princess and the 
Pirate. 

3. Moral suitability. — Thirty titles were rejected during 1945 for failure to meet 
standards of good taste and moral suitability prescribed by the industry's volun- 
tarily adopted codes. Examples of rejected titles include Killing Is Convenient, 
The Hell You Say, Ten Little Niggers, and Guilty Love. 

A statistical summarv of the bureau's activities follows: 





1938 


1939 


1940 


1941 


1942 


1943 


1944 


1945 


New titles redstered 


4,450 

(2) 

(') 

"300 
3 


3,312 

1,213 

53 

250 

1 
(3) 


3,214 

1,016 

39 

326 

6 

2.115 


3,587 

1,076 

40 

312 

3 

2,021 


4,219 

2,020 

53 

300 

4 

3,068 


2,770 

806 

31 

304 

4 

1, 443 


2,645 

806 

31 

302 

5 

1,013 


2 650 


Titles transferred to release index 

Titles morally unsuitable .-- __ - _- 


874 
30 


Titles accepted from noumembers as 
suitable 

Title arbitrations 


310 

5 


Departmental letters written.. 


901 



1 Estimated. 

2 No record. When release index was first established in 1937 it contained approximately 32,000 titles of 
features and short subjects. 

5 No record. 

CONSERVATION SERVICE 

Some 384 film exchanges in the United States receive, store, inspect, and ship 
20,700 miles of nitrocellulose film each day or 6,210,000 miles of this inflammable 
material in the 300 working days of 1 year. During the 20-year period ending 
December 31, 1945, there were only 16 film fires in member-operated exchanges 
with annual losses averaging only $242. Here is the 20-year record: 



Year 


Number 
fires 


Amount 
loss 


Year 


Number 
fires 


Amount 
loss 


1926 


1 

None 

1 

1 

1 

None 

3 

None 

1 

2 


$3,000 


1936 


None 

1 
None 

2 
None 

1 
None 
None 
None 

2 




1927 


1937 


$10 


1928 


25 

1,200 

15 


1938 

1939 




1929.. 


45 


1930 


1940 




1931 


1941 


212 


1932 


41 


1942.... 

1943 




1933 




1934 


148 

8 


1944 

1945 




1935 


150 



2610 POSTWAR ECONOMIC POLICY AND PLANNING 

The motion-picture industry's primacy in the field of fire prevention and public 
safety results from (1) full acceptance of its onerous responsibilities to its employ- 
ees and the public; (2) development and use of tested ecjuipment for storing, 
packaging, shipping, and projecting inflammable film; (3) frequent inspection of 
exchanges and equipment; (4) rigorous and continuous training in safety and fire 
prevention for constantly changing exchange personnel; (5) vigilant, detailed 
attention to the carrying out of a comprehensive conservation program; (6) close 
cooperation with public authorities and private expert groups in the field of fire 
prevention. 

Rotating committees of local branch managers in each distribution point 
where film exchanges are located, inspect all exchanges monthly — often accom- 
panied b.y officials of local fire departments. Each inspection includes a fire drill 
conducted by the committee. Approximately 4,500 inspection reports were 
examined and recorded during 1945 by the Director of Conservation. 

During the past year, this department head and his associate themselves made 
684 in.spections of film exchanges — 456 of member operated exchanges; 22& 
operated by nonmembers of the association. Every exchange center was visited 
at least once, 21 cities at least twice, and some points 4 limes. These inspections 
included check of emergency exits, fire-extinguishing apparatus, automatic 
sprinkler systems, vault ventilators, fire doors, electrical wiring, fire alarms, 
and general housekeeping conditions. Since heavy personnel turn-over from .vear 
to year necessitates continuous training programs in safety practices, talks were 
given to exchange employees and printed instructions posted for preventing fires 
and protecting persoiuiel. 

Fire prevention measures in motion-picture theaters continue also to receive 
vigilant attention. Return of experienced projectionists from duty with the 
armed forces, repair or replacemcTit of worn projection equipment, relief from 
raw stock shortages, and more adeciuately staffed theaters will combine to reduce 
war-im])()sed fire hazards. The association continues its cooperative work with 
local exhil)itors and local fire prevention authorities in connection with municipal 
ordinances pertaining to safety of theaters. The head of the department is in 
constant touch with fire insurance companies, the National Fire Protection 
Association, the National Board of Fire Underwriters, the National Fire Waste 
Council, United States Bureau of P]xplosives, National Film Carriers, and the 
United States and Canadian fire marshals associations. 

Finally, the association also survey's nontheatrical institutions which are 
exhibiting 35-mm. nitrocellulose film so that the various distributing companies 
may have a record of (a) type of equipment used, (b) type and construction 
of projection booth, and (cj experience of projectionists. More than 575 fire- 
resistive projection booths were installed during the past 8 years as the result of 
the association's inspections of and recommendations to orphanages, hospitals, 
asylums, penal institutions, schools, churches, clubs, and even private residences. 

Substantial use of 35-mm. acetate film by the armed services resulted in its 
increased production during the war. Film manufacturers, distributors, exhibi- 
tors, and specialists in the conservation field are all studying carefully the prac- 
ticability and cost of its widespread substitution for nitrocellulose stock within 
the next few years. This and all other developments bearing in any way upon 
the association's service to the industry and to the public in the field of conserva- 
tion will continue to receive attention. 

THEATER SERVICE 

Exhibitors played a leading part in founding this association. From the be- 
ginning they have served on its board of directors, as shown by the introductory 
roster. The present board includes directors who grew up in the business as 
exhibitors. Real or alleged conflict of interests between various branches of the 
industry must not obscure the basic interdependence of exhibition, distribution, 
and production. Issues between buyer and seller present serious obstacles to 
industry unity. But problems involving the entire industry demand united 
action. 

The theater service department provides liaison for all elements willing to co- 
operate on industry matters of mutual interest, such as public relations, press 
relations and public information, legislation, unfair and discriminatory taxes, 
political censorship and attempts at other types of arbitrary regulation or control. 
Members of the association's staff through personal, friendly acquaintance with 
large numbers of exhibitors seek to develop on all sides a better understanding of 
the principles on which this unique business operates. Virtually every other 
department of the association needs clearance and counsel from this department 
in performing essential service to motion-picture exhibition. 



POSTWAR ECONOMIC POLICY AND PLANNING 2611 

Fifty different exhibitor associations are now active, including two national 
federations of State and regional organizations: The Motion Picture Theater 
Owners of America, with some 14 State and local associations as active members, 
and the Allied States Association with about 12. The Pacific Coast Conference 
comprises four local associations. The remaining 17 local exhibitor associations 
have no present national affiliation. A movement began in December 1945, to 
establish a new national organization — the Theater Activities Committee. 

Meetings and conventions of exhibitors were sharply curtailed during the war. 
Nevertheless, war loans, march of dimes. Red Cross drives, and various war 
activities, mobilized the Nation's showmen into a tremendously effective force as 
the spearhead of the industry's war activities committee. The need now is to 
develop and expand the united effort without unreasonably limiting freedom of 
action of any branch of the industry. 

COMMUNITY SERVICE 

Previeunng and support of approved films. — The objective of the community 
service department is the stimulation of demand for quality motion-picture 
product through cooperation with organized efforts of important national groups. 
These efforts continue to receive vigorous support. Previewing committees, 
representing 8 national and 14 regional organizations, forward frank appraisals of 
new motion pictures to their respective constituencies. National women's clubs, 
church, library and school groups, and better film councils in various communities, 
work closely with enlightened exhibitors to make deserving films successful. 

Wartime claims upon the energies of community leaders and exhibitors alike, 
reduced the volume of this cooperative eft'ort. With war's end, a more intensified 
stimulation of consumer demand for quality product is being initiated. Organi- 
zation of the Protestant Motion Picture Council, with its film appraisals dissem- 
inated widely through the Christian Herald, is illustrative. 

The following previewing eommittees are functioning for national organiza- 
tions named below, some of which commenced their service more than 20 j^ears 
ago: American Legion Auxiliary, Daughters of the American Revolution, General 
Federation of Women's Clubs, International Federation of Catholic Alumnae, 
Libraries-Film Division. National Film Music Council, Professional Woman's 
League, Protestant Motion Picture Council; regional committees representing 
parent-teacher organizations, music and speech groups, American Association of 
University Women, National Council of Jewish Women, and motion-picture 
councils of cities, counties, and States. 

Information media for community service groups. — In addition to separate pre- 
view reports by these individual groups, the community-service department of 
the association prepares and distributes from Hollywood a combined preview 
appraisal of new films by representatives of 10 leading women's organizations. 
This is entitled "Estimates on Current Motion Pictures." When diff"erences 
of opinion exist between previewing groups, the printed appraisals so indicate. 
These ratings also include opinions as to suitability for family, mature family, 
and adult audiences. 

The Hollywood office publishes a weekly 4-page bulletin about current 
pictures, production trends, and news of the studios, entitled "What's Happening 
in Hollywood." Each issue is usually devoted to a single theme or phase of 
production with advance information on pictures nearing completion. 

The Motion Picture Letter, a monthly digest of news about motion pictures 
and a report on industry activities in the public interest, is issued by the public 
information committee; the community service department cooperates.' 

With the resumption of full-scale postwar cooperative activities in community 
service, mailing lists for these publications are being substantially increased. 
Readers of this report desiring to receive these informational bulletins should 
write the association. 

More and more, magazines and publications of national distribui^ion ha,ve 
availed themselves of preview reports on pictures as a basis for publishing in- 
formation on coming products. To indicate the variety of interest, the following 
are named: The Boy Scout magazine Boy's Life, National Historical Magazine, 
Catholic News, The" Tablet, Christian Herald, National Council Bulletin of the 
Y. M. C. A., Washington Square Bulletin of New York Universitv, The New 
Masses, Motive, magazine of the Pvlethodist student movement, and New Movies, 
the house organ of the National Board of Review. 

Stratosphere exploitation. — Community groups and members of the association 
work together to mobilize support for exceptional films. For example, the 
"stratosphere exploitation" for the picture Wilson included (1) 50,000 copies of 
an historical brochure written by Dr. James T. Shotwell for use in schools; (2) 



2612 POSTWAR ECONOMIC POLICY AND PLANNING 

10,000 four-panel research exhibits for use of librarians; (3) a pictorial biography 
of President Wilson, published in a popular edition; (4) 25,000 letters sent by this 
department's director to the association's mailing list of community leaders; and 
(5) 27,000 letters sent to the members of the National Education Association by 
its executive director, enclosing the Shotwell brochure on Wilson. 

The "best" and "10 best" of 10 years. — Many feature pictures which won acclaim 
during the past decade would not have V^een made without assurance of public 
support. Thus Hollywood's creative advances depend in part upon organized 
cooperation. 

A review of the award "winners" of the Academy of Motion Picture Arts and 
Sciences, the New York film critics, and Film Daily for the past 10 years reflects 
the coordination between the finest in Hollywood's creative art and organized 
support for its best product. The winners of these three awards were: 1936: 
Mr. Deeds Goes to Town, The Great Ziegfeld, Mutinv on the Bountv; 1937: 
The Life of Emile Zola (all three awards) ; 1938: You Can't Take It With You, 
The Citadel, Snow White and the Seven Dwarfs; 1939: Gone With the Wind, 
Wuthering Heights, Goodbye, Mr. Chips; 1940: Rebecca (two awards), The 
Grapes of Wrath; 1941: How Green Was Aly Valley, Citizen Kane, Gone With 
the Wind; 1942: Mrs. Miniver (two awards), In Which We Serve; 1943: Casa- 
blanca, Watch on the Rhine, Random Harvest; 1944: Going My Way (all three 
awards); 1945: The Lost Week End, Wilson (two awards). 

Turning now to the lists of "10 best", we find that in 1935 only the National 
Board of Review and Film Daily were regularly listing the "10 best" pictures of 
the year. In their 1935 listing they agreed on 6 and disagreed on 4 each, so that 
on their combined lists were 14. In 1944 there were 7 lists of "10 best" with a 
total of 35 pictures included. In 1945 there were 18 lists of "10 best" with 53 
pictures included. 

The following organizations issued lists of 10 best pictures in 1945: The Na- 
tional Board of Review, its Exceptional Photoplay Committee and its Young 
Reviewers; Film Daily's Local Pool; Film Daily's Pool of Critics; Boxoffice, 
Showmen's Trade Review; Photoplay; Time magazine; the Country Gentle- 
man; Look; Liberty; the New York Times; the New York Herald Tribune; the 
New York Journal- American; the New York Daily News; the New York Post 
and the New York World-Telegram. 

Certainly the 53 pictures which achieved acclaim in the 10 best for 1945 reflect 
an infinite varietj- of pattern and subject matter. Figures in parentheses indicate 
the number of lists which carried the picture: Anchors Aweigh (12); The Lost 
Weekend (11); The Story of G. I. Joe (11); A Tree Grows in Brooklyn (10); The 
House on 92d Street (7); National Velvet (7); A Song to Remember (7); State 
Fair (7) ; The Valley of Decision (7) ; The Fighting Lady (6) ; The True Glory (6) ; 
Colonel Blimp (5) ; Meet Me in St. Louis (5) ; Thrill of a Romance (5) ; The Last 
Chance (4); Spellbound (4); Bells of St. Mary's (3); The Clock (3); The Corn 
Is Green (3) ; Keys of the Kingdom (3) ; Mildred Pierce (3) ; Objective Burma (3) ; 
Salty O'Rourke "(3) ; The Southerner (3) ; Thirty Seconds over Toyko (3) ; God 
is My Co-Pilot (2) ; Hollywood Canteen (2) ; Laura (2) ; Our Vines Have Tender 
Grapes (2); Pride of the Marines (2); San Pietro (2); Saratoga Trunk (2); Son 
of Lassie (2) ; They Were Expendable (2) ; The Way Ahead (2) ; Wilson (2) ; and 
17 others, one vote each. 

Thus the demand for better pictures and support of the finest at the boxoffice 
have brought an increasing variety of good films, so that more than 10 percent 
of the total output of Hollywood reviewed in 1945 was adjudged bj^ some appraisal 
group as worthy of inclusion in a list of the 10 best. And the fact that there 
were 18 such lists of 10 best is in itself an indication of a steadily growing interest 
in the artistic excellence of motion pictures. 

Short subject entertainment. — Commercial short subjects progressed in techni- 
que, treatment of theme, and diversity of subject matter during the decade. 
"The awards of the Academy of Motion Picture Arts and Sciences reflect this. 
For the past 10 years the academy made special awards to one-reel, two-reel, and 
cartoon subjects; the titles are presented in chronological order. 

The one-reel winners were: Board of Education (Our Gang); The Private Life 
of the Gannets (bird life) ; That Mothers Might Live (medical research) ; Busy 
Little Bears (natural history) ; Quicker'n a Wink (stroboscopic photography) ; Of 
Pups and Puzzles (research in education) ; Speaking of Animals and Their Families 
(natural history) ; Amphibious Fighters (war) ; Who's Who in Animal Land 
(natural history) ; Stairway to Light (psychiatric research) . 

The two-reel winners were: The Public Pays (Crime Does Not Pay series); 
Torture Money (Crime Does Not Pay series); The Declaration of Independence 
(American history) ; Sons of Liberty (American history) ; Teddy the Rough Rider 



POSTWAR ECONOMIC POLICY AND PLANNING 2613 

(American history) ; Main Street on the March (national defense) ; Beyond the T.ine 
of Duty (Distinguished Service Cross) ; Heavenly Music (classic versus modern 
music) ; I Won't Play (Army entertainment) ; Star in the Night (Spirit of Christ- 
mas) . 

The animalTed cartoon winners were: Country Cousin, The Old Mill Ferdi- 
nand the Bull, The Ugly Duckling, The 'Milky Way, Lenda Paw, Der Fuehrer's 
Face, Yankee Doodle Mouse, Mouse Trouble, Quiet Please. 

Documentaries. — The war provided an invaluable proving ground for the docu- 
mentary film. The taxpayers put up the money, Hollywood furnished some of 
its ablest professionals, and the global struggle offered subjects of dramatic 
power and popular interest for armed forces and civilians alike. 

Even before the M^ar such films as The Plow that Broke the Plains, The River 
and The City demonstrated the potentialities of the documentary approach! 
Then came such masterpieces from the Canadian Film Board as Churchill's Is- 
land, Now the Peace, When Asia Speaks, and Atlantic Crossroads. 

The Nazis used Sieg in Westen to blitz the minds of frightened peoples they 
were about to conquer. Our own Army and Navy, through the medium of 
training films, multiplied its scarce fighting equipment manvfold so that draftees 
later could operate it in record time. The Battle of Miwday found Commander 
John Ford, camera in hand, atop a water tower shooting one of the earliest 
combat communiques. Then followed Zanuck's At the Front in North Africa, 
Desert Victory, Target for Tonight, and With the Marines at Tarawa which 
moved audiences deeply. By the time 12,926 theaters had plaved Col. William 
Wyler's Memphis Belle, fine documentaries of dramatic power had become an 
integral part of wartime film fare. 

Special academy awards to The Battle of Midway and Prelude to War in 1942, 
Fighting Lady and With the Marines at Tarawa "in 1944, and The True Glory 
and Hitler Lives in 1945, have lifted the documentary to Hollywood's pinnacle of 
fame. 

Problems of the postwar decade are no less susceptible to screen treatment. 
Thev challenge motion picture producers and exhibitors alike to build upon the 
solid achievements of the war years. The effort should be to increase rather 
than dissipate the recently generated audience interest in fact films. Hollywood 
producers, directors, writers, actors, and technicians home from the wars will 
inevitably bring documentary skills to the making of all films. 

News on the screen. — Newsreels continue to be extremely popular with various 
community groups with which this department cooperates. These reels are not 
submitted to the production code administration for approval prior to release. 
Their editors, however, long have recognized the responsibilities associated with 
a medium which occupies a vital part of virtually every theater program. That 
this responsibility has been fully met is evidenced by the unexcelled manner in 
which the newsreel has brought to the screen the front-page happenings of the 
past decade. 

Exhibit 5 presents, according to the major groupings of national news, foreign 
news and the European and Pacific wars, an analysis of the subject matter of 
some 44,684 "clips" from the five newsreels (Movietone News, News of the Day, 
Paramount News, Pathe News, and Universal Newsreel) during the period 1936- 
45. Contained in the figures is the record of the newsreel camermen through 10 
crucial years, a record which cost the lives of some of them, in order that they 
might bring to the screen of even the smallest hamlet in the Nation a vivid 
picturization of wolrd-shaking events soon after their occurrence. 

Reflected in the statistics is the story of a world at war, from the march on 
Poland to the unconditional surrender of Germany in the red schoolhouse at 
Reims, and from the Japanese rape of China through Pearl Harbor to the stirring 
surrender scenes aboard the USS Missouri. Every battle front was represented 
as the cameramen provided on-the-spot coverage of history in the making. 

Exhibit 5 reveals a decrease in the total numbers of newsreels subjects or 
"clips" from 5,250 in 1938 to 3,133 in 1945, reflecting a 25 percent reduction in 
length during the period of severe film raw stock shortage. Coverage of World 
War II dominated screen news after entry of the United States, and 52.2 percent 
of newsreel subjects in 1944 was devoted to the European and Pacific battle 
fronts, with another 13.3 percent pertaining to national defense and home-front 
war activities. Consequently, the number of miscellaneous "clips" decreased 
sharply as the war progressed, and other subjects were likewise given less coverage. 
Sports, long a favorite newsreel subject, dropped from 27.4 percent in 1938 to a 
low of 8.6 percent in 1943. The end of hostilities brought a change in emphasis 
from the battle fronts to a cove'-age of international conferences and other foreign 
news with no lessening of audienca interest in screen news. 

99579 — 47— pt. 9 7 



2614 



POSTWAR ECONOMIC POLICY AND PLANNING 



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POSTWAR ECONOMIC POLICY AND PLANNING 2615 

INTERNATIONAL SERVICE 

Importance of world market. — Revenue from foreign distribution is the lifeblood 
of the American motion-picture industry. At least one-third of the negative 
cost of motion pictures produced in this country must be recovered from foreign 
distril:)ution. Substantial reduction of income from this source would Restrict 
expenditures for production and lower the artistic and entertainment value of 
American pictures. 

During the war years the loss of Axis-dominated territories was largely offset 
by the extraordinary demand for motion picture entertainment in the territory 
which still remained open. For example, attendance at British motion picture 
theaters in 1944 was practically double prewar average. 

It cannot be expected that this abnormal demand wiU continue in the postwar 
period. It was occasioned by scarcity of other types of recreation and entertain- 
ment, and especially by the urgent need of relaxation and relief from war tension. 

However, American motion pictures are still the favorite entertainment of mass 
audiences throughout the world. In France where importation of new Ame/ican 
films is not yet permitted, prewar American films bring better box-office receipts 
tTian most new French films. Recently Metro-Goldwyn-Mayer resisued Ben 
Hur, produced in 1921. This old film is reported doing excellent business. 

In Yugoslavia, where 100 or more prewar American films confiscated by the 
state monopoly are being illegally exhibited, these American pictures are general 
favorites compared with new Russian films, in spite of the efforts of the state 
monopoly to promote the latter. 

Governmental obstacles. — Although there is universal public interest in American 
films overseas, our industry in 21 countries faces obstacles in the form of govern- 
mental regulations hampering the importation and distribution of American 
motion pictures. 

Eight examples are: 

(1) Excessive import duties: Increase in Spain from $90 before the war for 

average feature to $11,000 now. 

(2) Internal tax measures assessed against foreign films after they have been 

imported. Such taxes are actualh^ discriminatory because most 
imported films are from Hollywood. 

(3) Quota laws requiring a certain percentage of theater playing time for 

native motion ])ictures. 

(4) Discriminatory theater taxes upon the exhibition of films of foreign 

origin in favor of domestic films. 

(5) Remittance taxes upon varying percentages of amounts due American 

distributors deemed by the local government to be profit or income. 

(6) Government monopolies: Part of trend toward nationalization — notably 

in Czechoslovakia and Yugoslavia. 

(7) Theater combines which have the effect of monopolies. Examples are 

Bioscoop Bond in Holland, the Norwegian Municipal Exhibitors' 
Association, China Film Society continuing the Japanese monopoly 
in China. 

(8) Censorship by foreign governments: In countries within the sphere of 

Soviet influence, motion pictures which present other forms of govern- 
ment in a favorable light are rejected. Also there are still occasional 
rejections on account of supposed derogatory reference to the country 
concerned. Two instances of this kind are pending in Spain, with 
the accompanying threat that the producers of the pictures will be 
barred completely from Spaiii unless all prints and negatives are 
destroyed of the pictures to which exception has been taken. 
Relief from import restrictions. — The approach to the foreign government con- 
cerned must be on behalf of the entire industry and relief secured through the good 
offices of our own Government, especially the State Department. Our inter- 
national department keeps informed about such problems and undertakes to 
mobilize the necessary action. The manager of the department visited Wash- 
ington 22 times in 1945 for conferences with Government officials and with foreign 
diplomatic representatives. 

Film boards of trade composed of local representatives of American motion- 
picture distributors are maintained in 15 foreign countries. They operate under 
the general guidance of the association. Their activities are reported regularly 
in detail and shared with the member companies. 

There is reason to expect that our Government's established policy insisting 
upon unhindered transit of media of expression across frontiers will be imple- 



2616 POSTWAR ECOXOIMIC POLICY AXD PLAXXIXG 

mented in the numerous treaties and trade agreements that will be Jiegotiated 
with foreign countries in the near future. In this connection the international 
department has prepared briefs outlining existing conditions and needs of the 
American motion-picture industry in 21 foreign countries. This information will 
be used by e.xecutives in the Department of State who have primary responsibility 
for negotiating the treaties. 

Examples of current problems. — The following are examples by countries of 
international problems which required and received the attention of the depart- 
ment during 1945: 

AustraUa: Proposed legislation in Queensland would place a ceiling on film 
rentals and give the price-fixing commission virtual control of the industry. 
Urgent representations have been made by the Australian Film Board and it is 
hoped that the bill Tsill not finally pass in its present form. 

Brazil: A demand for largely increased wages was settled by the companies 
■with their employees on the basis of cost-of-living bonus through cooperative 
action by the Film Board of Trade. 

China: A formula for remittance of film rentals was worked out with the 
Chinese Government by our Embassy in Chungking. Fictitious charges by 
exhibitors which reduced by nearly 75 percent box-office receipts on which our 
rental percentages were figured, have been eliminated by united action through 
the export association. 

Czechoslovakia: Xetotiations continue between the export association and the 
state film monopoly in an effort to develop a procedure by which the association 
mav deal directly with the circuit of theaters operated by the monopol.v. 

France: Strong pressure by French producers upon their government still 
prevents the importation of new American pictures. The State Department is 
insisting upon compliance by the French Government with the terms of the trade 
agreement which protects the position of American films in that market. It is 
expected that this question will be resolved during the financial negotiations now 
in progress between the two Governments. 

Great Britain: We are assured that the present position of the industry in that 
country will be protected if the double taxation treaty and the British loan are 
approved in this country. 

Italy: All Fascist laws relating to motion pictures were annuled at the urgent 
request of our Embassy. However, the Italian Government has undertaken 
recentlv to impose a quota limitation on the importation of .\merican films. 
This action has been protested by the Embassy and an early settlement is 
expected. 

Mexico: Labor unions demanded a 50 percent increase in wages and numerous 
changes in working conditions. Acceptance of the demands would have made it 
impossible for the companies to continue business in that country and a prolonged 
strike ensued. Through assistance of the Embassy and the Office of Inter- 
American .Affairs, a reasonable settlement was finalh' obtained. 

Norway: After liberation, the organization of X'orwegian theaters insisted upon 
a flat rental maximum of 30 percent which obtained before the war. From this 
amount, a 40 percent state tax was to be deducted. The companies, acting 
through the export association, declined to distribute their new pictures at this 
rate. A committee of Scandinavian managers visited the country in November 
without result. Later the association's London representative returned to Nor- 
way and with the assistance of the Embassy and a member of the original Scandi- 
navian committee, negotiated a slidmg scale agreement., which permits recognition 
of the super box-office value of high-grade pictures. 

Registration of foreign language titles. — .Among the services rendered to the 
industry by the international department is the registration of foreign language 
titles. The purpose is the avoidance of confusion and financial loss by the release 
of identical titles by difi"erent companies. All established -\merican exporters of 
motion pictures participate in this arrangement. The foreign language titles are 
submitted to the international department for scrutiny as to possible identity with 
titles previously released. No company will use an identical title without per- 
mission of the company which originally registered the title. During 1945, 
1,866 new titles were registered. 109 titles withdrawn, and 132 titles rejected 
because of identitv with titles already registered. Registration file now contains 
nearlv 50,000 titles in 23 languages, including Chinese and Japanese. 



POSTWAR ECONOMIC POLICY AND PLANNING 2617 

III. Other Ixdustry Service Agencies 

MOTIOX picture EXPORT ASSOCIATION, INC. 

(Incorporated June 5, 1945 in Delaware under Webb Export Trade Act.) 
Stockholders. — Columbia Pictures International Corp., Loew's International 
Corp., Paramount International Films, Inc., RKO Radio Pictures, Inc., Twentieth 
Century-Fox International Corp., United Artists Corp., Universal International 
Films, inc., Warner Bros. Pictures International Corp. 

Officers and directors. — Eric A. Johnston, president and director; Morris Good- 
man, vice president; Francis S. Harmon, vice president; INIurray Silverstone, vice 
president and director; Gordon E. Youngman, secretary; George Borthwick, 
treasurer; Jo.seph McConville, Philip Reisman. Samuel Schneider, Gradwell L. 
Sears, Joseph Seidelman, Morton Spring, George Weltner. directors. 

(1) Meinbers of the association have granted it an exclusive license for a 
limited period of time to distribute their pictures in the Kingdom of the Nether- 
lands. To date this constitutes the onh* joint marketing agreement to which 
the MPEA is a party. 

(2) Members have also authorized the export association to conduct negotia- 
tions with the Government of Czechoslovakia regarding the distribution of mem- 
ber company pictures in that country. Any agreement resulting from such 
negotiations will require further action by the members. 

(3) The facilities of the export association have been used to allocate distribu- 
tion quotas, fix minimum royalties and determine certain other terms of licensing 
in foreign countries where restrictive actions have been previously taken which 
adversely affected the exhibition of member company films. 

To date the machinery of the export association lias been used only in connec- 
tion with situations in the export field where restrictive actions of government or 
territorial monopolistic industry practices prevent or handicap free licensing of 
American films. 

The extent to which the export association will be used in the future depends 
upon the wiUingness of the members to capitalize the advantages of joiiit market- 
ing, agreed limitation of number of pictures to be distributed and terms of dis- 
tribution, so as to insure orderly release of films which could not be freely ex- 
ported during the dislocations of war years. 

CENTRAL CASTING CORP. 

"Go to Universal at 1 o'clock today, wearing ordinary fall street clothes." 
"Report to RKO at 7 a. m. for make-up, Cromwell directing." "Go to Para- 
mount at 10 tomorrow, dressed in warm clothing for a winter farmhouse party." 

Such instructions go out daily from Central Casting Corp., the busy "call" 
bureau in Hollywood organized' in 1926 to take care of the vexing problems 
involved in furnishing studios with thousands of "extra" or "atmosphere" players. 
The corporation is owned by the producers of motion pictures who, although 
members of the Motion Picture Association, operate this organization as a separate 
entity. Its expenses are defrayed by the studios subscribing to its services, no 
charge being made to the extra players themselves. After 20 years of operation, 
Central Casting provides both studios and "extras" with a highly efficient and 
useful service. 

When players phone. — By special arrangement with the Bell Telephone Co. 
as many as 4,000 incoming calls an hour can be received by a batter}^ of operators. 
Players inquiring about work telephone, state their names, and are given one of 
three replies: "Xo work," "Try later," or "Just a moment, please." The first 
means that no casting is going on at the moment; the second, that casting is in 
progress but the caller is just not the type required; and the third, that a studio 
teletype order has come in for which the inquirer might be the right type. 

At a long table where three to six persons are at work, there is a loud speaker 
connected with the telephone switchboard which transmits the name of the 
registered player who is calling on the phone. Through long experience the 
casting directors immediately associate the name with a mental image of the 
type, and if the person meets the requirements of the order being cast, the call 
is intercepted by an ingenious interlocking key device and the directors put in 
instant touch with the partv calling. 

M'^hen studios call. — Studio requirements for extra players are relayed to central 
casting by means of teletype. Through the use of a punched-card tabulating 
system it is possible to locate quickly and efficiently the names of additional 



2618 



POSTWAR ECONOMIC POLICY AND PLANNING 



players meeting a particular requirement of a casting director at one of the 
studios. For instance, if "20 Russian women, middle age, heavy stature," are 
needed, the names of registered extras with those specifications are sorted out by 
the machines in a few minutes. If those individuals have not inquired about work, 
the order is turned over to the "call desk," where the quota is filled through out- 
going phone calls. 

Every effort is made to use first of all the people who depend upon extra work 
for a living. This is not always possible. Sometimes casting directors must seek 
special help by scouring the water front for practical seamen experienced in 
handling sailing vessels, or in seeking out mechanics, trained horsemen, stunt 
men and circus acrobats, football players, or representatives of racial groups. 

Revealing statistics. — At one time central casting maintained a registration 
totaling approximately 17,000. The list had been cut by December 31, 1945, to 
8,861 so that a living wage might be provided to more of these instead of a frac- 
tional wage for the larger number. For many, however, there is still only an 
occasional day's work, though total placements in 1945 were 251,094, providing 
a daily average wage of $13. 

Few pictures, however simple, are complete without the extras who provide 
human interest to film backgrounds. Competent and well-trained, they take 
their places, respond to the director's call for "Action!" — and give to the audience 
that sense of reality which is part of the magic of motion pictures. 

Following is a tabulation of total placements, gross earnings, and the average 
daily wage paid extra talent during the years 1938-45: 





Total place- 
ments 


Total gross 
earnings 


Average 
daily 
wage 


1938 ... 


264, 268 
294, 432 
228, 342 
266, 170 
287, 855 
331,684 
324, 925 
'251,094 


.$2, 848. 445. 68 
3, 124, 671. 64 

2, 529, 766. 00 
3,118.411.88 

3, 388, 823. 61 
4,190,060.56 

4, 129, 083. 66 
1 3. 263, 998. 93 


.$10. 78 


1939 


10. fi] 


1940 


11.08 


1941—- 


11.72 


1942.. 


11.77 


1943 


12.63 


1944 


12.71 


1945 . . 


13.00 







Figures for Warner Bros, not included July-December 1945. 



PERMANENT CHARITIES COMMITTEE, INC. 

Organizational facts. — Established May 1940 to supervise all charity drives of 
the motion-picture industry in Hollywood, with Samuel Goldwyn as its first 
chairman. Subsequent chairmen and presidents: Edward Arnold, 1941; Bert 
Allenberg, 1942; Mark Sandrich, 1943; Jane Murfin, 1944; and Y. Frank Freeman, 
1945. Incorporated in' May 1943 under the nonprofit statutes of California. 

Officers and directors (December 31, 1945). • — Y. Frank Freeman, president; 
Edward Arnold, executive vice president and treasurer; John C. Flinn, secretary; 
directors, Carl Cooper, William Dieterle, Francis Edwards Faragoh, Porter Hall, 
Van Herron, Sam JaflFe, W. Ray Johnston, Col. Jason S. Joy, Sol Lesser. 

The committee, representing all film groups, was organized to cope with the 
problem of numerous, overlapping, time-consuming charity drives. During the 
first 4 years the committee conducted some drives, approved others; the Motion 
Picture Relief Fund continued its weekly pay-roll deduction plan independently. 
On October 8, 1945, the First Annual United Appeal was launched (at a cost of 
2.19 percent of amount subscribed) after a Hollywood poll revealed that 86 percent 
of industry personnel favored a single annual campaign. Thousands of donors 
pledged pay-roll deductions ranging from 25 cents to $60 per week. 

HoUvwood's generositv long has been recognized. In 1944, for example, 
25,016*out of 26,000 potential industry donors, contributed $1,169,141.57 to the 
Los Angeles War Chest (14.97 percent of cit.y total). Hollywood charity con- 
tributions, 1942-45, follow: 



POSTWAR ECONOMIC POLICY AND PLANNING 



2619 



American Red Cross 

Community and War Fund Chests 

March of Dimes 

United Jewish Appeal ^ 

Motion Picture Relief Fund * 



1 $527, 000. 00 

2 672. 868. 56 

1 18, 990. 91 

160,521.00 

346, 213. 35 



1943 



$483, 509. 02 
1,170,010.77 
1 27, 148. 90 
411,741.00 
347, 951. 37 



2 $658, 210. 24 

2 1,109,141.67 

2 49, 101. 57 

521, 610. 00 

387, 884. 20 



1945 



2 $722, 649. 78 

2 1,015,337.00 

2 80,015.47 

543, 998. 00 

388, 956. 69 



1 Authorized by the permanent charities committee. 

2 Conducted by the permanent charities committee. ("Community and War Fund Chests" figure for 
1942 includes ,$327,812.69 collected speciflcally for the Community Chest, $148,077.89 for the USO, and 
$196,977.98 for Navy Relief and Russia-China-Dutch War Relief. Contribution for 1945 Victory Chest 
was allocated from funds collected in the liermanent charities committee's "Aimual United Ajjpeal".) 

3 Sectarian drive approved but not conducted by permanent charities committee. 
* Not conducted by permanent charities committee. 



HOLLYWOOD VICTORY COMMITTEE (DECEMBER 10, 1941, TO DECEMBER 31, 194.5) 

This wartime mobilization of the Hollywood entertainment industry coordi- 
nated the eflforts of 22 organizations, including actors, radio and variety artists, 
musicians, writers, directors, managers, producers, publicists, studios, radio net- 
works, and every other group which could contribute to the job of channeling 
talent where most needed and of enlisting players for service at home and over- 
seas. Through the victory committee, Hollywood personahties served the jirmed 
forces, the Treasury, the Office of War Information, and other civilian war agencies, 
the American Red Cross, the National War Fund, Canada and other members of 
the United Nations. 

Hollywood entertainers traveled over 5,000,000 miles to entertain GT's from 
Greenland to New Guinea, to visit hospitals in every State and in every war 
theater outside the United States. Through the Hollywood caravan more than 
$700,000 was secured for Army and Navy relief funds on a Nation-wide tour. 
Through the Hollywood bond cavalcade and its special train loaded with stars, a 
billion in war bonds was sold on a 10,000-mile transcontinental trip. 

Everyone wanted Hollywood stars for rallies, benefits, shows on the air, and 
shows in person. How well Hollywood responded to these myriad calls for war- 
time service is evidenced by these statistics from the final report of the victory 
committee: 

Free appearances by 4, 147 persons in 7,700 events 56, 037 

Playing days by 176 persons on 122 overseas tours 13, 555 

Playing days by 407 persons on 416 hospital and camp tours 5, 947 

1-night stands by variety troupes along west coast 2, 056 

Personalities on war-bond tours 214 

Persons on war-bond broadcasts and radio transcriptions 264 

Entertainment transcriptions for overseas transmission by Armed Forces 

Radio Service 2, 428 

Film shorts made with top stars 38 

Broadcasts and transcriptions for war relief and charity 390 

Personal appearances for war relief and charity 561 

Personalities on Canadian war-bond tours; 34 on transcribed radio pro- 
grams, and 19 persons in film shorts for Canadian war-bond drives 50 

WAR ACTIVITIES COMMITTEE — -MOTION-PICTURE INDUSTRY (JUNE 5, 1940, 
TO JANUARY 7, 1946) 

This committee and its predecessor, the Motion Picture Committee Cooperating 
for National Defense, provided the vehicle through which all branches of the 
industry, between Dunkerque and Pearl Harbor, cooperated with the United 
States "Government to make America the arsenal of democracy and thereafter 
worked to speed total victory over Germany and Japan. 

Presidents of 36 national motion-picture organizations comprised the na,tional 
committee. A coordinating committee vmified the activities of seven divisions- 
theaters, distributors, Hollywood, newsreel, trade press, publicists and ^foreign 
managers. Thirty-one area organizations mobilized completely the industry's 
liuman and material resources within each exchange territory. 



2620 POSTWAR ECONOMIC POLICY AND PLANNING 

Special campaign committees spearheaded the industry's participation in seven 
bond drives (Stars Over America — September 1942; the 3d, 4th, 5th, 6th, 7th, and 
Victory loan) during which the theaters conducted 29,913 bond premieres and 
held 42,661 free movie days, thus admitting without tickets millions of bond 
buyers. More than a third of the Nation's 16,660 theaters which took part in 
bond campaigns were issuing agents for the Treasury. 

Theater audiences and industry personnel contributed $36,874,436.37 during 
the war years to the following charity drives: 

Red Cross (1945) $7, 290, 164. 57 

March of Dimes (1945) 5, 978, 939. 34 

Red Cross (1944) i 6, 793,060. 04 

March of Dimes (1944) 2 4^ 667, 520. 00 

Red Cross (1943) 3, 067, 236. 25 

March of Dimes (1943). _'_ 2, 116, 539. 18 

United Nations Week (1943) 1, 644, 723. 40 

Army-Navv Emergency Relief (1942) 2, 1 20, 212. 66 

March of Dimes (1942) 1, 420, 568. 72 

USO (1941) 997,885. 95 

Greek War Relief (1941) 777, 586. 26 

Total theater collections 36, 874, 436. 37 

' Includes $1,291,610.04 of industry corporate gifts and Hollywood collections. 
* Includes Hollywood collections. 

To bond campaigns, charity drives, and various other projects sponsored by 
the war activities committee, the members of the trade press division contributed 
1,200 pages of advertising, representing $400,000 in value, as well as 20,000 
columns of reading space filled with useful factual and promotional material. 

One hundred and forty information films, 29 film bulletins, and 22 campaign 
appeal trailers were released through the committee. When the Congress abol- 
ished the domestic budget for OWT films, the industry continued the program 
at its own expense for 2H years until after VJ-Day. 

A gift film program for the entertainment of members of the armed services in 
combat areas utihzed 160,977,613 feet of 16-millimeter raw stock of which some 
60,000,000 feet were contributed by Eastman Kodak Co. and the du Pont Co. 
Another 100,000,000 million feet were purchased by the industry. Between 
March 1, 1942, and October 31, 1945, the industry gave 43,189 16-millimeter 
prints of 1,041 different features and 33,217 prints of 1,050 different shorts which 
were seen gratis by an estimated audience overseas of 950,000,000 persons in 
uniform. All film laboratories, including Technicolor, contributed substantially 
to the program. These contributions plus estimated contribution of the copy- 
right owners of 5 cents per man per exhibition brought value of this industry 
gift to the armed forces to $51,313,213. 

General George C. Marshall in a letter dated October 1, 1945, thus appraises 
the industry's gift: 

"The generosity of the motion-picture industry collectively and of the indi- 
viduals comprising it made possible the entertainment of our soldiers under 
very trjang conditions with a remarkable continuity of service and should be a 
matter of great pride to you and to members of your organization. Please 
accept mj^ personal gratitude and the appreciation of the War Department for 
that contribution." 

To the fighting forces the motion-picture industry contributed thousands of 
its personnel, many of whom received awards for service beyond the call of duty 
and some of whom paid the supreme sacrifice. 

TEACHING FILM CUSTODIANS, INC. 

Corporate facts. — Organized December 1, 1938, under the laws of New York 
to advance and promote the distribution and use of motion pictures for educa- 
tional purposes in schools. 

President and chairman of the board. — Dr. Mark A. May, director. Institute of 
Human Relations, Yale University. 

Directors. — James R. Angell, president emeritus, Yale University; Frederick 
H. Bair, superintendent, Bronxville (N. Y.) schools; Isaiah Bowman, president, 
Johns Hopkins University; Karl T. Compton, president, Massachusetts Institute 
of Technology; Edmund E. Day, president, Cornell University; Royal B. Farnum, 
executive vice president, Rhode Island School of Design; Willard E. Givens, 
executive secretary. National Education Association; Jay B. Nash, professor of 



POSTWAR ECONOMIC POLICY AND PLANNING 2621 

education, New York University, and Francis T. Spaulding, dean. Graduate 
School of Education, Harvard University. 

Trustees. — James R. Angell, Willard E. Givens, and Carl E. Milliken. 

Teaching Film Custodians, Inc., the second largest national distributor of 
instructional films, has in its catalog 639 titles for classroom use which are ])roving 
increasingly popular and effective as visual aids in courses of history, geography, 
literature and biography, biology and nature study, chemistry, physics and as- 
tronomy, geology, general science, art and music, sociology and religion, health, 
physical education and recreation, agriculture, home economics, industrial arts, 
and various vocations. 

Sixteen-millimeter prints of selected subjects are licensed on a 3-year nonprofit 
basis. By December 31, 1945, there were 10,332 reels of 16-millimeter film in 
active use through 423 film libraries across the Nation, serving thousands of 
schools located in every State. For example, one film library operated by the 
Los Angeles public-school system supplies 464 schools; another in Ohio services 
1,500 schools; numerous State university libraries supply schools throughout their 
respective States. Use of all films is restricted by license to the instructional 
programs of the institutions exhibiting them. These classroom films may be 
shown only in school buildings during school hours. 

Illustrative filjns, widely used in schools," include: 

Ameriean history. — Land of Liberty (stirring pictorial history of America as a 
land of freedom) ; Servant of the People (story of the Constitution) ; The Perfect 
Tribute (Lincoln's Gettysburg Address) ; Story That Couldn't Be Printed (Free- 
dom of the press); Give Me Liberty (Patrick Henry), and Monroe Doctrine. 

Biography. — The Story of Dr. Jenner (smallpox control) ; The Story of Dr. 
Carver; Romance of Radium (the Curies) ; The Story of Charles Goodyear (vul- 
canizing rubber); They Live Again (Dr. Banting and insulin). 

Literature. — A Tale of Two Cities; Romeo and Juliet; David Copperfield; 
Master Will Shakespeare; Treasure Island. 

Science. — New Roadways to Science; Willie and the Mouse; Beneath Our Feet 
(microscopic study of insects) ; Song Birds of the North Woods. 

Politics and government. — Inside the Capitol; Inside the White House; U. S. 
Treasury; The Mint; Inside the FBI. 

At the present time administrators of informal programs of adult education 
in factories, schools, churches, labor unions, health associations, and community 
forums, are seeking to use these tested visual aids. Directors of Teaching Film 
Custodians are negotiating with various copyright owners for liberalization of 
contracts to permit extension of the social contribution of these motion pictures 
into these wider areas under controls adequately protecting commercial theaters. 

Funds above expenses of operation have been appropriated to such projects as 
(1) a study by the American Council on Education for curriculum areas in which 
visual aids are most needed; (2) a study by Harvard Graduate School of Education 
of existing film materials and motion-picture needs in the field of American his- 
tory, and (3) experiments in utilization of classroom films by the Institute of 
Human Relations at Yale University. 

Without salesmen, without advertising, without promotion of any kind, this 
service of the industry has achieved a significant place as a source of curriculum 
materials for schools of every instructional level. It serves as a main source for 
teachers of English, history, and geography. Teachers have been pleased to find 
an educational ally. Industry leaders have become interested in a. service 
rendered to education on a self-sustaining basis. They now view the industry's 
entire product in terms of its possible educational significance and welconde opijor- 
tunities for increasing the social usefulness of the motion picture. 



Exhibit 2 

HOLLYWOOD AND INTERNATIONAL UNDERSTANDING 

(By Harry L. Hansen, associate professor of business administration, Harvard 
University Graduate School of Business Administration) 

[Reprinted from Harvard Business Review, autumn, 1946] 

In recent years there has been an increasing demand that business live up to 
its public responsibilities. Yet enlightened business leaders, sincerely anxious 
that such responsibilities be discharged, face great difficulties in defining just 



2622 POSTWAR ECONOMIC POLICY AND PLANNING 

what they are — and even greater difficulties, often, in reconciling them with 
normal profit incentives. 

The particular responsibility that is the subject of this article, namely, the 
fostering of international understanding by the motion-picture industry, is a case 
in point. It is an important responsibility. At the same time, it not only 
involves an objective that is intangible and elusive, but raises the possibility of 
a conflict with typical commercial considerations that could be very serious. 
Foreign markets are of great significance to the American motion-picture industry; 
indeed, it has been estimated that for a regular feature-length film revenues from 
distribution abroad have in the past covered about one-third of the entire cost of 
making the finished negative. 

Customarily, feature films have been made primarily for the American market, 
with the foreign departments of the large companies endeavoring to see to it 
that in the process the selection and treatment of story material takes into con- 
sideration the attitudes of foreign audiences. Once a picture has been produced, 
wide distribution is of course desirable to build up receipts, and the total number 
of films exported has been determined only by the limitations of e.xhibition 
possibilities and foreign governmental regulations. Most important, in the 
selection of individual pictures for export, the producer has been guided prin- 
cipally by potential audience appeal and censorship restrictions in foreign countries. 

Now the State Department, through its publication of the Macmahon report 
in 1945, has raised two most important issues for motion-picture executives to 
consider in the selection of films for export: To what extent can the industry 
avoid offense to foreign coim tries? To what extent can it give foreign audiences 
the "balanced portrayal" of the United States which the Macmahon report 
believes has been absent in the past? 

The report referred to is officially entitled "Memorandum on the Postwar 
International Information Program of the United States." It was prepared by 
Dr. Arthur W. Macmahon, consultant on administration, in cooperation with 
the Office of Public Affairs. It should be borne in mhid in reading this article 
that the Macmahon report does not have the status of an approved statement of 
policy. According to the letter of transmittal accompanying the report from 
John S. Dickey, then Director of the Office of Public Affairs, the State Depart- 
ment, to Archibald MacLeish, then Assistant Secretary of State: 

"This memorandum is by intention a working paper which offers a canvass of 
viewpoint, a recommendation of' broad choices, and a starting point for detailed 
planning; it does not offer blueprint details or a budget. As is frequently the 
cise where study is carried on in close association with operations, the collabora- 
tive process of preparing the memorandum has itself influenced operating decisions 
and many of our curre ;t attitudes on these matters. In this sense few of us will 
find any new rabbits in the memorandum. Nevertheless, it should be emphasized 
that the memorandum is not a statement of departmental or Office policy; it is 
simply a working paper to assist in making decisions and if on further considera- 
tion the weight of the argument is against any position taken in the memorandum, 
that position should be changed." 

How can the motion-picture industry discharge its public responsibility in this 
area? More specifically, how can it deal with the two issues raised? Let us first 
consider briefly the negative task of avoiding offense to foreign audiences and 
then go on to consider some of the more pressing questions involved in giving 
foreign audiences a balanced portrayal of the United States. 

OFFENSES TO FOREIGN COUNTRIES 

Referring to the first of these tasks, the report mentions (1) avoidance of "more 
positive forms of offense" and (2) development of an "awareness of other peoples 
which will compliment them and facilitate friendly relations." Neither of the 
expressions is defined, and the latter is not very easy to illustrate. 

Avoiding more positive forms of offense. — The report takes an optimistic view 
of the motion-picture industry's ability to continue to reduce the more flagrant 
offenses. As an example of what obviously needs to be avoided on this score, 
the British Board of Film Censors frequently deletes scenes in operating rooms, 
spoken lines referring to people by deprecatory names like "punk," and scenes of 
excessive brutality; and it is sensitive to the showing of the person of Christ on the 
screen or the use of direct quotations of the words of Christ. 

Matters of bad taste are harder to pin down. The Motion Picture Association 
of America has set up a production code, however, and those charged with its 
administration are endeavoring to secure voluntary compliance with provisions 



POSTWAR ECONOMIC POLICY AND PLANNING 2623 

of the code by working with producers in the adaptation of story material to 
screen use, reading scripts, and viewing completed films. 

In some recent letters to various producers, the production code administration 
questioned the advisability of derogatory references to Brazilian food, suggested 
the avoidance of fake Mexican dialects and the employment of Mexican actors 
speaking English with their own natural accent, and urged that a film involving 
Costa Rican atmosphere be authentic and that religious themes in the story be 
treated correctly. After reading the script of one picture, the production code 
administration wrotp: 

"As we ])resumed to suggest to Mr. over the telephone today, we are 

a bit concerned regarding the general acceptability of this material, especially 
when viewed from the standpoint of the foreign market. To characterize an 
ambassador, even when he -is not specifically identified with any particular 
nation, as a kind of 'sap' and to suggest fuither than an American Ambassador 
would indulge in the kind of buffoonery in connection with the silly love of an 
adolescent child, may give offense to large numbers of patrons, both in this 
country and abroad. It is likely, too, that the M.exican Government will not 
be disposed to look with favor upon the suggestion that this unidentified ambas- 
sador may be made to appear acceptable to the Mexican Government." 

General admonishments about the theme of a story are sometimes made by 
suggesting consultation with the producer's foreign department concerning the 
acceptability of the theme in various foreign markets. 

Developing aivareness of other peoples. — Being alert to the sensitivities of foreign 
audiences is more difficult than avoiding matters objectionable to foreign censor- 
ship boards. A much publicized example of what can happen in this area was 
provided by the film, Objective Burma. This film portrayed the activities of a 
group of American paratroopers in destroying a Japanese radar station in Burma. 
While it was being made, the producers had followed the suggestion of the pro- 
duction code administration, eliminating certain profane language from the script 
and cutting scenes of unusual gruesomeness, and the finished picture v/as hailed 
in the United States. Yet it was withdrawn from the British market in a week's 
time after attacks by the British press. 

The London Times pointed out the absurdity of presenting the recapture of 
Burma as an American paratrooper operation when British Commonwealth and 
Empire forces in Burma accounted for 80 percent of total allied strength and 
88 percent of combat strength. To lub salt into the wound, the plot of Objective 
Burma was based upon an actual incident in which the paiticular troops engaged 
were also primarily British. In ciiticizing the bad taste of the film, the Times 
linked it with a Russian picture, Berlin, which implied that Germany was con- 
quered by the Red Army and presented Air Marshall Sir Arthur Teddar as a 
"guest" at the surrender of Berlin. A discussion followed in the House of Com- 
mons as to what steps were being taken "to counter the bad effects of this film on 
our relations with the United States of America and on our prestige abroad." 

Obviously, this kind of situation can usually be avoided by the exercise of 
proper care. Much more difficult is the second major task confronting the indus- 
tiy, that of presenting a balanced protrayal of the United States. But before 
we can discuss this aspect of the subject intelligently, we need to know the nature 
of existing foreign impressions of the United States created by American films. 

FORFIGN IMPRESSIONS OF UNITED STATES. 

The evidence contained in the Macmahon report is based upon replies returned 
by overseas missions to an inquiry of the State Department made as of February 
22, 1944. This inquiry, anticipating an examination of the motion picture in the 
postwar world, requested oveiseas embassies or legations to state an opinion 
concerning "the type of picture most acceptable to local audiences from an enter- 
tainment standpoint and most effective from the standpoint of * * * broader 
considerations." The State Department asked its diplomatic officers to bear in 
mind the following: (1) the important intellectual value of films ("the right 
kind * * * can present a picture of this Nation's culture, its institutions, 
its methods of dealing with social problems, and its people, which may be invalu- 
able from the political, cultural, and commercial point of view [while], the wrong 
kind * * * ij^ay have the opposite effect"); (2) the contention that the 
industry is dependent upon its foreign receipts to maintain the quality of its 
product; and (3) the fact that American motion pictures act as salesmen for 
American products. 



2624 POSTWAR ECONOMIC POLICY AND PLANNING 

From the State Department information thus obtained, certain selected replies 
were quoted in the Alacmahon report as illustrations of foreign reactions: 

"Australia (dispatch No. 836, June 7, 1944): A country boy or girl could not 
be blamed for thinking that the majority of Americans are engaged in crime or 
frivolity. 

"New Zealand (dispatch No. 151, June 15, 1944): New Zealanders usually ask 
why they can't have films showing everyday life, not the so-called 'Hollywood 
version' of the war-propaganda type. 

"Morocco (dispatch No. 2445, November 6, 1944): Probably the most powerful 
media of information are the motion picture and the radio. To any American 
who lived abroad before the present war it will be only too obvious that American 
pictures were of such a character as to convince foreigners that we were largely 
a nation of morons and gangsters. 

"Iran (from 1945 information intelligence report): Unless some control is ex- 
ercised over export of American commercial films, official efforts to maintain a 
dultural-relations program are futile. The representation of America through 
educational pictures is contradicted by the large volume of gangster and horror 
film poured into the Iranian market by commercial companies. 

"Honduras (dispatch No. 935, April 4, 1944): Probably the most effective 
type of picture in fostering an interest in and admiration for the United States is 
the historical drama portraying the early development of the country." 

Of the five illustrations cited, four are critical of American films and one suggests 
a corrective possibility. The inference is that undesirable reactions are repre- 
sentative. However, this is by no means the case. In the same data, but not 
quoted by the report, are balancing favorable comments like the following: 

"Camberra, Australia (dispatch No. 836, June 7, 1944): Distributors naturally 
exercise considerable care that films are not marketed in Australia which would 
bring any definite reaction against the American product. 

"St. John's, Newfoundland (dispatch No. 829, January 23, 1945): Since my 
arrival in Newfoundland almost 4 years ago I have heard no serious criticism of 
American films, and it seems that the distributing agencies have exercised good 
judgment in the types selected for this market. 

"Horta, Fayal Azores (dispatch No. 11, February 19, 1943): American films 
are much preferred because of their action, interest, and quality of produc- 
tion * * * 'phg constant showing of American films probably has an im- 
portant part in reinforcing the strong pro- American sentiment of the local people, 

"New Delhi, India (Dispatch No. 188, July 31, 1944): As in many other 
countries America is better known and better liked to the people through the 
entertaining and informative medium of the motion picture. * * * the basis 
is well established in India for the continued growth of good will toward America 
in the postwar era, through the medium of visual entertainment. 

"Buenos Aires, Argentina (Dispatch No. 473, Dec. 9, 1944): United States 
pictures as a group are vastly superior in quality to any others shown in Argentina. 
* * * American newsreels also lead the field in quality. * * * Because 
of their infinite variety, their lavishness of production, and their perfection of 
technique, and because they are acted and directed by the best talent available, 
the American pictures are the most popular as well as the best in quality. * * * 
American films have had by far the greatest propaganda influence in Argentina. 
The full story of America's part in the war has been effectively told to Argentina. 
Interwoven always in these plots is the prodemocratic theme, which makes itself 
felt as the only real salvation of the world." 

Whatever the proper evaluation of the replies to the State Department's 
inquiry may be, they clearly leave unanswered the question of what impressions 
are created about the United States in foreign countries by motion pictures. The 
lack of specific evidence to support the opinions expressed makes it impossible to 
determine whether^the State Department reporter is making a subjective appraisal 
based on his own preconceived opinion, or whether he has tried to make an objec- 
tive analysis from conflicting source material. To complicate the interpretation 
further, there is no basis for evaluating the qualifications of the personnel submit- 
ting the reports; these range from consuls general to men of unspecified official 
status, and include third secretaries, economic analysts, and cultural relations 
attaches. Finally, it is reasonable to assume that consular and diplomatic 
officers, because of the nature of their work, perhaps tend to be overresponsive to 
criticisms of America; and, particularly in the case of those who are not regular 
moviegoers, their appraisals of the effect of American films upon the mass of 
foreign theatergoers may be of limited value. 

The motion-picture industry, while convinced that the information on foreign 
attitudes presented in the Macmahon report is not an accurate reflection of the 



POSTWAR ECONOMIC POLICY AND PLANNING 2625 

facts, nevertheless does not at this writing have sufficient facts to evaUiate the 
soundness of the report in this respect. The industry, of course, is not without 
some evidence conflicting with that contained in the Macmalion report — for 
instance, the following statement made by Francis S. Harmon, vice president of 
the Motion Picture Association at a meeting of the Commission on Freedom of 
the Press held on January 29, 1946, in New York City: 

"I had the pleasure this summer [1945] of talking with Ambassador Kirk in 
Italy, Ambassador Sawyer in Belgium, and Ambassador Caffery in France. I 
was with 1.5 other executives who were flown to Europe right after VE-day. The 
presidents of two of the companies who make 30 or 40 prctures a year were in the 
group and the executives of studios of a number of others. Those three Ambassa- 
dors — Belgium, Italy, and France — categorically stated that they regarded the 
motion pictures from Hollywood as one of the most useful assets they had. They 
were glad to have Hollywood films supplemented, Mr. Chairman * * * with 
the documentaries which were made during the war and which the industry is now 
offering to make for use in Germany." 

Objective study needed. — Testimony such as Mr. Harmon's focuses attention on 
the differences of opinion at different levels within the State Department and, more 
important, on the need for collection of factual evidence. With the State Depart- 
ment and the industry each having special interests, it is doubtful whether com- 
pletely objective information can be secured from either. It should be noted, 
however, that an attempt is currently being made by the Motion Picture Associa- 
tion through its recently created statistical research department to conduct objec- 
tive research into industry problems. In his first annual report as president of 
that association, Eric Johnston said: 

"This entire program of statistical research is not worth conducting unless it is 
carried out with the conviction that the truth — no matter what it is — best serves 
the long-run interests of the industry. The findings may not always be pleasing. 
But unless they are faced, sound correctives cannot be applied." 

What of the alternative of going directly to foreign sources of information? 
It does not seem likely that foreign nationals, either as distributors of locally 
produced films or as distributors of American films, will prove of much value as 
sources of accurate information on this subject. Perhaps the foreign critics might 
have more promise, but these too can be expected to have national biases; further, 
they are primarily concerned with evaluating picture quality. There remains 
the possibility of direct interviewing of foreign moviegoers. Such an attack, 
however, would introduce serious difficulties. As one member of the motion- 
picture industry has expressed it: 

"Audience reaction abroad, as at home, is made up of individual reactions, and 
the individual reactions are conditioned by a multitude of factors that cannot be 
weighted in the final analysis. If you should ask an average foreign audience, 
'Was this film good entertainment?' you would get a fairly clear-cut answer. But 
if you were to ask, 'Is this film good or bad from the standpoint of America?' it 
would be an entirely different proposition. 

"Most people would be unable to form any judgment whatever — knowing 
nothing of America itself. Others, however — and this is important — would give 
a reply that had nothing whatever to do with the film in question. It would 
be conditioned entirely by other factors. For example, whether they admire 
America or detest it — and there are many people in both camps; whether they 
felt it would serve some national interest — economic or social — to condemn 
American films — the majority of our moviegoers abroad might feel that they 
have such an interest; or whether they wished merely to give personal expression 
to the resentment that is widely felt abroad toward the United States simply 
because it appears to be a prosperous and comfortable nation — and here again 
the number would be enormous." 

Whether it would be possible to segregate the impressions created by motion- 
picture films from those created by other means of international communication 
is not clear. Nevertheless, the motion-picture industry should experiment with 
this approach before definitely rejecting it; indeed, if the industry is going to live 
up to its broader public responsibilities, it should initiate a survey in this area, 
preferably conducted by a competent independent organization. Only if this 
general approach does not prove feasible in important markets, can the guess- 
work and conflicting reports available at present be considered the best evidence 
obtainable. 

At the present time, about all we can say is that the available evidence gives 
indications that there is room for improvement in the impression of the United 



2626 POSTWAR ECONOMIC POLICY AND PLANNING 

States created by American films. But just what is the balanced portrayal asked 
for by the State Departnient? 

BALANCED PORTRAYAL OF UNITED STATES 

No one at first thought can fail to agree with the general objective of giving 
foreign peoples a balanced portrayal of the United States. A whole series of per- 
plexing questions must be answered, however, before this objective has any real 
meaning. What do we mean when we say balance? To answer this question 
we must apply ourselves to two further questions: What factors are we balancing? 
How do we know when they are in balance? A not unimportant question is:. 
Who should decide when the balance exists? And, after these questions are 
answered: Will a balanced export of films mean that foreign audiences will see a 
balanced exhibition? Will our version of balance be interpreted as such by for- 
eign audiences? Is a balanced presentation of the United States compatible with 
entertainment? 

From the American standpoint. — Let us look at some of these questions more 
closely, first from the American standpoint. 

What are we l)alaneing? Good versus evil? If we could clearly classify the.se 
moral values, how would we bring them into balance? Is there a desirable ratio 
of good to evil characters? Is balance the inevitable triumph of good over 
evil? This is the course to which Hollywood has committed itself. Retribution 
may therefore be inevitable on the screen, but in real life there is disagreement 
whethei this is so. Probably we do not want t)alancc if that means the culprit 
escapes. Or, in different words, if balance is akin to truthfulness, we do not want 
a true presentation conflicting with our moral codes. 

Or are we balancing wealth veisus poverty? large families versus childless 
couples? musical comedies versus dramas of social significance? agricultural versus 
industrial life? material success versus spiritual progress? success stories versus 
tales of failure? Serious problems in definition confront us everywhere. 

Again, how do we know when the factors chosen are in balance? The values 
which we decide we want to balance are likely to be subjective values. The scales 
for measuring them have not yet been designed. The question of balance is then 
a matter of judgment or informed guesswork. Who can best exercise such judg- 
ment? This is a knotty question. What man or group of men can with au- 
thority sum up the American character, review a immber of films, and select from 
among them those which best define this character? In view of the subjective 
nature of the problem and the important i>art taste and cultural background will 
play, the decisions might well be made by a diverse group. But diverse in what 
way? And so on. 

From the foreign standpoint. — But let us assume for the moment that the.se 
questions can be answered. Will a balanced export of films actually mean a 
balanced film diet for foreign audiences? The answer is. "Not necessarily." 
An export of a balanced presentation of the United States does not insure that, it 
will get before the eyes and ears of foreign audiences. Not all pictures exported to 
a particular country will be shown in all theaters. So, unless each individual film 
itself qualifies as a balanced presentation, which is not a likelj^ possibility, obvi- 
ously a block is set up. 

Even if we assume that all films exported are exhibited generally, there is no 
compulsion for foreign theatergoers to see all of them. They can still decide to 
see only comedies or only westerns. If they are not interested in social dramas, no 
matter what the intrinsic excellence, they cannot be compelled to see them. Not 
to be forgotten is the unfortunate fact that those countries which we might want 
most to influence favorably may not want our version of a balanced portrayal 
of the United States shown to their people. Russia, for example, prefers to limit 
her imports from this country to films having no possible political significance. 



POSTWAR ECONOMIC POLICY AND PLANNING 



2627 



Exhibit I. — Film exports during 1945 of one large company to major geographic 
areas, by type of feature film 



Area to which exported 


Number 
of films 1 


Total 
exports 


Melo- 
drama 


Films to each area by type 


Comedy 


Drama 


Western 


Crime 




35 
110 
31 


Percent 
4.4 
14.3 
4.0 


Percent 
20.0 
21.8 
32.3 


Percent 
31.4 
37.3 
29.0 


Percent 
14.3 


Percent 


Percent 
34 3 


Asia. 




40.0 


A ustralia and New Zealand 




3.2 


35 5 








Europe: 

British Isles 


25 
162 


3.3 
21.0 


24.0 
23.5 


32.0 
43.2 






44 


Continental Europe ..- 


.6 


.6 


32.1 


Total Europe 


187 


24.3 


23.5 


41.7 


.5 


.5 


33 8 






Latin America: 


67 
22 

188 


8.7 

2.9 

24.5 


34.3 
27.3 
32.4 


32.8 
36.4 
37.2 




1.5 
4.5 
2.7 


31 4 


Mexico 




31 8 


South America - 




27 7 








Total Latin America 


277 


36.1 


32.5 


36.1 




2.5 


28.9 








West Indies 

Philippine Islands 


104 
26 


13.5 
3.4 


30.8 
26.9 


31.7 
26.9 


.9 


2.9 


33.7 
46 2 










Total 


770 


100.0 


27.8 


36.2 


.9 


1.6 


33 5 







1 Inasmuch as feature films are usually exported to more than one foreign country, each film is counted 
more than once. 



Air. Harmon, in his testimony before the commission on freedom of the press, 
already referred to, argued that over a period of perhaps 10 years the foreign 
moviegoer who might see some 20 to 25 pictures each year would get a fairly 
accurate idea of the United States. Whatever may be said of the occasional 
moviegoer, certainly the frequent moviegoer would have the opportunity to see 
a wide variety of types of film. This fact is borne out by the figures in exhibit I. 
the result of a brief check on the 1945 exports of one large producer, who may be 
considered fairly representative of the large companies. According to the exhibit, 
it appears that the three main types, melodramas, dramas, and comedies, are 
fairly evenly distributed among the different areas. 

The question still remains: Will our version of balance be regarded as balance 
by foreign audiences? Let us assume we export a picture which emphasizes racial 
tolerance between Negroes and whites in this country as an illustration of our 
democratic attitudes. In some foreign countries where Negro-white relationships 
are more amicable than in this country, audience reaction may be unfavorable. 
Or let us send a film overseas showing the wife of a high Government official doing 
her own laundering or shopping, to carry the inference of the absence of caste 
distinctions in the United States. In some countries it might be viewed as a 
weakness in our social structure that such a woman would be required to do her 
own housework. 

Is the answer then not to export such films? If so, foreign audiences may be 
inclined to disbelieve the truthfulness of what we do send them. Take the case 
of the film, Grapes of Wrath. This film about a family of "Okies" was produced 
to portray one of this country's social problems. It was applauded in this 
country, but abroad some critical reactions appeared. Even in our own State 
Department there was division of opinion: One representative condemned the 
film as presenting a distorted picture of the United States; another regarded it as 
an illustration of this country's strength and honesty that such a film would be 
produced and exhibited abroad. 

Balance versus entertainment. — A balanced, truthful presentation of American 
life is not necessarily compatible with entertainment. If films do not have enter- 
tainment values, there are no audiences. Without audiences no presentation can be 
made of anything. Take the Iranian market as a case. The films which bring 
large audiences in Iran are action pictures. Films with western settings or 
adventure pictures like the Tarzan series are reported as extremely popular. 
Certainly these films are not truthful and balanced in the sense that they are 
accurate portrayals of life in the United States. But they are entertainment. 
Because they are no more than that, should the}- be banned from the Iranian 



2628 POSTWAR ECONOMIC POLICY AND PLANNING 

market? What could be sent in their place? Suppose they were supplemented 
by other films requiring more mature attention from the audience? Would the 
objective be achieved? Not so long as the theater patron may freely select the 
films he pays to see. 

Consider further the problems in reconciling a balanced presentation of the 
United States with the following entertainment preferences reported b.y overseas 
representatives of the Department of State as indicative of audience likes: The 
reply from Belize, British Honduras, stated that "action and adventure films, 
particularly musical westerns, are best liked by native audiences from the stand- 
point of entertainment"; conversely, Lisbon, Portugal, reported that "films 
* * * based on western and settlers' epics * * * which the Lisbon 
public have branded as 'broad-brimmed' (a reference to cowboj^s' hats), only- 
appeal to audiences of third- or even fourth-rate cinemas in Lisbon and in pro- 
vincial towns." Again, the Dominican RepubHc's reply named the Pride of the 
Yankees as "one of the outstanding hits of 1943"; Australia, on the other hand, 
indicated that this film was "not acceptable" and "even objectionable to Austra- 
lian audiences." The Honduras report indicated that there were certain types 
of films "definitely detrimental to United States prestige. Heading the list is a 
host of gangster films * * * [including] Mr. Lucky"; Montevideo, Uruguay, 
however, advised that Mr. Lucky was highly recommended in general by the 
newspapers and well accepted by the public, and a critic commented, "Mr. Lucky 
possesses an arch and piquant cjuality which we thought was snowed under for the 
duration in a Hollywood monopolized by fatuous war propaganda." Finally, 
"family" pictures (generally believed to be particularly' representative of the 
United States) were regarded as "little better than fair" from the Dominican 
Repubhc point of view; Ecuador, nevertheless, urged more "simple everyday 
life films." 

This discussion of a balanced portrayal of the L^nited States indicates that it 
is an undefined goal and difficult to attain. If it is ever reached, it will be an acci- 
dental bj'product of two things; (1) Distribution overseas of a large number of 
films on a variety of themes, and (2) a reasonably accurate portrayal in many of 
them of segments of American life. Nevertheless, more can be done than at 
present to improve foreign impressions of the United States. 

AN ALTERNATIVE APPROACH 

We liave been discussing a po.sitive approach to a balanced portrayal of the 
United States — that is, from the standpoint of what ought to be in pictures 
for this purpose. It should be possible to go at the problem from another angle 
and perhaps secure the same objective by eliminating from pictures the elements 
which distort them and thus keep them from being fair representations of the 
United States. And this approach, negative but more realizable, might be 
achieved in part simply by trying to reduce ofi"enses to the sensibilities of United- 
States audiences. The indu.stry's production code recognizes the possibility of 
such an approach although it does not define the offenses; nor have critics of the 
industry defined them in a practical manner. This approach, too, has its limita- 
tions. It will be difficult to secure agreement as to just what offenses against the 
United States are. Complaints have ranged from disapproval of Betty Grable's 
legs and too long a week end at the Waldorf to the portrayal of the "submerged 
third" in the persons of the "Okies." Even when agreement is achieved on the 
nature of these offenses, there is a delicate compromise to be maintained between 
obvious distortions of fact and violations of good taste, on the one hand, and a 
general whitewashing on the other. 

Yet progress can be made. The problem is simplified by the fact that offenses 
both to foreign countries and to the United States can be avoided by the same 
means, since the common difficulty is the conflict between fact and dramatic 
license. Thus the incentive to avoid offenses to foreign countries — which is great 
because of its verv marked effect on box office receipts — can help to achieve the 
more intangible objective of a better portrayal of the United States. 

There are roles to be played by the film producers themselves, the Production 
Code Administration, and the Motion Picture Export Association. Also of impor- 
tance is the part, if any, that the State Department should take in guiding the 
industry, 

THE FILM PRODUCERS 

It may be argued that the producers, because they have available large research 
departments, should bear the responsibility for accurate and nonoffiensive por- 
trayals. Yet it is not realistic to assume that producers can be counted on always 



POSTWAR ECONOMIC POLICY AND PLANNING 2629 

to portray facts just as they are. Certainly it can be expected that conflicts will 
arise within the producing company between the facts supplied by its research 
department and the familiar dramatic license to alter those facts for a better 
story treatment. When such conflict arises, the research department is likely to 
be the loser. Therefore, despite the thoroughness and care which may be 
devoted to research, the final picture may bear little resemblance to the facts 
except in details of costumes or sets. Until the research departments achieve a 
position commensurate with their contribution, a monitoring body is needed which 
seeks to guide producers by working cooperatively with them. 

PRODUCTION CODE ADMINISTRATION 

The place of the Production Code administration in limiting both types of 
offenses needs to be examined in the light of the production code itself. The 
pertinent material is contained in article X, National Feelings, in the section on 
particular applications, which reads as follows: "(1) The use of the flag shall be 
consistently respectful, (2) the history, institutions, prominent people, and 
citizenry of all nations sliall be represented fairly." 

Article X clearly gives the Production Code administration responsibility for 
being watchful for offenses against the United States or foreign countries. The 
problem is how far this responsibility should go. In a case like Objective Burma 
it is difficult to see how the Production Code administration can escape sharing 
responsibility with the producer. It is only fair to say, however, that an apparent 
dilemma is posed here. On the one hand, there is the reasonable position that 
the Production Code administration, as a practical matter, cannot be responsible 
for the accuracy of historical detail in picture material it reviews. On the other 
hand, the code charges it with seeing that the history of all nations is represented 
fairly. 

Those who emphasize the dilemma would restrict the Production Code ad- 
ministration's activity to preventing the more obvious affronts where little or no 
knowledge of historical or contemporary facts is necessary. For example, a film 
produced about half a dozen years ago showed a regiment of British troops being 
decimated at the Battle of New Orleans. The compensating touch worked out 
by the Production Code administration and the producer to smooth British feelings 
was to have the flag caught by one of the British soldiers as the standard bearer 
fell mortally wounded. 

This type of solution, based upon a sensible awareness of the sanctity of a 
nation's flag, is a limited application of the language of the code. It would seem 
that there is a middle ground between being an expert in historical and current 
events and being entirely ignorant of them. Either the Production Code adminis- 
tration should have a member with scholarly training in history and the social 
sciences, or it should develop sufficient awareness of potential errors to know 
when it is necessary to call upon competent advice. The former appears to be 
the more effective solution. 

Assuming the Production Code administration shares the responsibility for 
guarding against lapses of the type in Objective Burma, is it not falling short either 
because of iiiadequacies of the code or because of the way in which it applies the 
code? Eric .fohnston, in his report referred to, very aptly points out that general 
rules cannot decide particular cases and that fallible men must administer the 
rules. This is a sensible position, but can the rules be made general and men less 
fallible? 

Expansion of the code. — Historically the code developed out of the need for the 
industry to exercise some form of moral restraint, and today it may still be referred 
to in general as a moral code. The continued emphasis in the text of the code on 
matters relating directly or indirectly to sex is clear from exhibit II, which gives 
an indication of the attention given to various subjects in terms of number of 
words devoted to them. Equally clear is the relative neglect of the subject of 
national feelings. 

The classification in this table is not intended to suggest naively that the ac- 
tivity of the code administration is in direct ratio to the number of words allocated 
to subjects. Moreover, it is only fair to admit that offenses covered by other 
articles of the code are probably more common and therefore deserve greater 
attention than offenses to national feelings. Nevertheless, it would be difficult 
to argue that the matter of national feelings is adequately discussed relative to 
other sections of the code. This can be said with full cognizance of the diffi- 
culties of expansion of article X. 

99579— 47— pt. 9 8 



2630 



POSTWAR ECONOMIC POLICY AND PLANNING 



Exhibit II. — Number of words devoted to various subjects contained in the Production 

Code administration, 



Article 



Subject 



Particular 
applica- 
tions 



Reasons 
underlying 
applica- 
tions 



Total 



II 

V 

I 

VI 

VIII... 
VII.... 
XII.... 

Ill 

X 

XI 

IV 

IX 



Sex _.-- 

Profanity 

Crimes against the law 

Costume 

Religion 

Dances 

Repellent subjects 

Vulgarity 

National feelings 

Titles 

Obscenity 

Locations 



193 
276 
139 
59 
42 
22 
52 
31 
23 
9 
24 
12 



195 
11 
137 
139 
51 
62 
22 
II 
18 
27 
II 
22 



388 
287 
276 
198 
93 
84 
74 
42 
41 
36 
35 
34 



Despite the fact that the amount of attention given to national feeUngs in the 
code is significantly small, the problem of offenses to foreign countries has con- 
cerned the industry for a number of years. As early as 1927, in the list of "don'ts 
and be carefuls" adopted by the Association of Motion Picture Producers, Inc., 
two of the "be carefuls" were: (1) "International relations (avoiding picturizing 
in an unfavorable light another country's religion, history, institutions, prominent 
people, and citizenry)" and (2) "The use of the flag." When the code was 
adopted in 1930, it was the substance of these "be carefuls" that was incorporated 
as article X. It was not until World War II, however, that the United States 
was included as one of the nations to be represented fairly by substitution of the 
words "all nations" for "other nations" in the second sentence of article X. 
Thus, while the code now applies to both problems raised at the beginning of 
this article, its application to the prevention of offenses against the United States 
is new. 

Certainly the industry would profit from the standpoint of public relations by 
elaborating on the specific application of article X. Couched as the article now 
is, in such general terms, one may question whether the type of error represented 
in the case of Objective Burma was an understandable error in human judgment 
alone, and may wonder whether it was not also in part a reflection on incomplete 
treatment in the code. As a matter of fact, article II of the particular applica- 
tions, concerned with sex, could be expressed as succinctly as article X. But 
as article II has been helped by expansion, so article X would be. 

An argument advanced against expansion of article X is that, by keeping it 
general in wording, its application is strengthened. It is argued for illustration 
that the Constitution of the United States merely says in part that Congress 
shall have the power "To regulate commerce with foreign nations and among 
the several States, and with the Indian tribes"; yet thousands of Supreme Court 
decisions have built an enormous body of legal authoritA' upon these few words. 
This line of reasoning does not explain why, for example, in the cases of sex, 
profanity, and crimes against the law, a meager wording is not equally sufficient. 
One cannot escape the conclusion that this argument is a rationalization excusing 
the failure of the text of the code to develop beyond the moral considerations 
which led to its origin. 

While an expansion of article X would not be easy, it is by no means imprac- 
tical. For illustration, during the war years from April 1941 to April 1945, the 
Motion Picture Association assigned a Latin-American adviser to the staff of the 
production code administration. During 1944, his last full year of service, this 
adviser read 144 scripts and 50 lyrics, viewed 252 motion pictures, and participated 
in 192 conferences. While a wealth of experience is reflected in these statistics, 
and the individual picture files contain records of the detailed recommendations, 
none of this material has found its way into the code. Certainly some effort to 
record this experience in summary form for incorporation in the code, not only 
would be a step contributing toward a greater awareness of the importance of 
national feelings, but also would be an action having excellent public relations 
advantages for the industry. 

Personnel inter-pretinq code. — It should be apparent that further particulariza- 
tion of the code is only a small part of the final answer for minimizing offenses to 
foreign nations or the United States. A comparison between the complaints 



POSTWAR ECONOMIC POLICY AND PLANNING 2631 

made by State Department representatives overseas and code provisions relating 
to these complaints demonstrates dramatically that an imfair presentation, a dis- 
tortion, or a tawdry picture results from the subjective decision of an individual — 
in other words, depends on some individual's background and special interests. 
Thus rules are secondary to the people who interpret them. 

The adverse reactions in State Department reports filed in response to the 
departmental inquiry essentially boil down to objections against (1) gangster films 
and pictures ridiculing the judiciary or politics, (2) plots suggesting political 
corruption and the lack of integrity of public offiicals, and (3) films which depict 
false luxury, lack of morality or of idealism, false values in human relations, or 
great wealth and extravagant living. To cite specific examples: Roxie Hart was 
mentioned "as a travesty on the American judiciary"; Mr. Smith Goes to Wash- 
ington was criticized as reflecting discredit on the integrity of National Govern- 
ment; The Miracle of Morgan's Creek was described as belittling the institution 
of marriage and treating lightly the problems of a husbandless mother (as well as 
indicating "political corruption and lack of integrity on the part of American 
officials"). 

It is significant that all these complaints are recognized in general terms in the 
production code. In the case of gangster films, for instance, a special section of 
the code, "Special Regulations on Crime in Motion Pictures," devotes close to 500 
words to the subject. The code says specifically: "The technique of murder 
must be presented in a way that will not inspire imitation" and that "brutal 
killings are not to be presented in detail." Yet according to a State Department 
report from Cairo, shortly after the showing of one American picture a man was 
found murdered in Cairo by the same technique as used in the film, the implication 
being that there was some connection. 

Take another class of complaints, namely, of pictures ridiculing our judiciary or 
form of government, or suggesting political corruption and lack of integrity on the 
part of public officials. These complaints arise despite what the code says: 
"Law, natural or human, shall not be ridiculed, nor shall sympathy be created for 
its violation. * * * The courts of the land should not be presented as unjust. 
This does not mean that a single court may not be represented as unjust, much 
less that a single court official must not be presented this way. But the court 
system of the country must not suffer as a result of this presentation." 

Where the criticism is that of lack of morality or idealism, it is difficult to cite 
anything but the code in general. The same may be said of false values in human 
relations. Even the general tenor of the code, however, puts no restrictions on 
depicting^ great wealth or extravagant living except insofar as those conditions 
conflict w'ith moral standards which the code attempts to use as guideposts. Of 
course, much depends upon what is meant by "great wealth and extravagant 
living." Consider the following statement by one State Department representa- 
tive overseas: "It may be of interest to point out that in China, as in many other 
countries, story backgrounds which reveal well-appointed living and dining rooms, 
bedrooms, modern baths and kitchens and household gadgets in use, generally 
make a valuable impression on Chinese audiences whether the picture is enter- 
taining or dull." 

These illustrations serve as useful demonstrations of the old adage that one 
man's meat is another man's poison. Each film cited as occasioning criticism 
had been approved by the production code administration, but criticized by one 
or more of the State Department reports. That record, as a matter of fact, is 
not so bad as it sounds, inasmuch as vmanimity of opinion may be dismissed as 
unobtainable. But are there any other changes which might he made to assist 
personnel of the production code administration to improve their performance 
further? Two suggestions may be made: 

(1) Much would be gained by enlarging the current membership of the produc- 
tion code administration beyond the number, at this writing, of 12. There are 
advantages in a small working group, but among informed members of the in- 
dustry it is an accepted fact that the pressure of work upon the personnel of the 
production code administration is severe. During 1945, according to the annual 
report of the Motion Picture Association of America, Inc., March 25, 1946, the 
production code administration approved 390 feature-length films and 521 
shorts. In addition to reviewing these films, the staff analyzed and considered 
3,239 books, stage plays, synopses and scripts (including changes); conducted 
122 consultations with film executives, of which a written permanent record was 
preserved; and wrote 3,420 letters and opinions. An increase in manpower, 
reducing the pressure of work on individuals, would facilitate more considered 
judgment. An even more important resell would be to make it pos.sible for mem- 



2632 POSTWAR ECONOMIC POLICY AND PLANNING 

bers of the staff to take periodic leaves, in order to get out of Hollywood and 
come into fresh contact with new ideas both in the United States and abroad. 

(2) In this expansion of personnel, some attention should be given to bulwark- 
ing the representation of individuals with foreign education and experience on the 
production code administration. The Latin American adviser mentioned earlier 
was of Cuban- American extraction. The principal representative in this category 
now on the staff is the grandson of an Angelican bishop, and he has been looked 
upon as bringing to the orgauization's work, among other things, a useful point 
of view with regard to the British. This "specialist" on British attitudes worked 
with the Latin American adviser while the latter was on the staff, and later him- 
self made a tour of Latin American countries for further orientation. 

There are, of course, other types of representation which it might be argued 
should be on the production code administration staff. More important, there 
also are limits to Avhich the group can be expanded. But this limitation should 
not obscure the fact that, in view of the international significance of American 
motion lectures, there is too small a representation of foreign attitudes now on the 
staff of the production code administration. The argument for having men of 
foreign background or experience does not mean that it would be necessary to 
resort to the extreme of having all large countries represented individually. It 
may mean only one man for Latin America, one for continental Europe, and one 
for the important British market. 

MOTION PICTURE EXPORT ASSOCIATION 

Some opportunity for a judicious selection of films for foreign markets is cur- 
rently ofi'ered the industry through the activities of the Motion Picture Export 
Association, formed in August 1945, under the provision of the export Trade 
Act (Webb-Pomerene law) of April 10, 1918. All the countries in which the 
association plans to serve as sole marketing agent have been closed to American 
films at least since 1940; consequently the association has at its disposal a backlog 
of several thousand films. Furthermore, no one of these countries is in a position 
to absorb commercially more than one-third of the total annual production of 
feature-length films by members of the export association. 

Membership in this association is open to all American exporters of motion 
pictures who wish to execute an agreement licensing the association as marketing 
agent with sole distribution rights. As of early summer 1946, the eight leading 
American exporters were all members, w'ith invitations to join under consideration 
by the three distributing organizations which handle most of the westerns and 
man}' of the small-budget action pictures. The export association at this writing 
has exclusive distribution rights for its eight members in Austria, Bulgaria, 
Czechoslovakia, Holland, Hungary, Germany, Poland, Rumania, Yugoslavia, 
Russia, Korea, Japan, and the Dutch East Indies. Also, the legal machinery of 
the export association has been used to secure voluntary agreements for limitation 
of exports to France, Italy, and Denmark. 

Revenues from the operation of the export association after deduction of 
expenses are to be distributed to members on the basis of a percentage of the 
members' domestic gross receipts in the United States, rather than on the basis 
of receipts from individual members' pictures shown abroad. This means that 
the export association need not select a proportionate number of pictures from 
each of its members but is free to choose, especially with several years' accumula- 
tion of production on hand, those pictures which it considers most suitable for 
each country in which it is to operate. Conceivably, indeed, not a single picture 
of any one member need be shown in a particular country. That member would 
still receive the same percentage of porfit which its receipts in the United States 
represent to the total domestic receipts of all the members in the United States. 

This arrangement gives the industry a chance to discriminate carefully in 
selecting films for export. The problem, however, is how to discriminate so that 
films sent abroad not only will have the requisite audience appeal, but also will 
fairly and sympathetically portray the American way of life. To what extent the 
association can take into account factors other than potential box office receipts 
remains to be seen. Furthermore, a large part of the export association's ability 
to weigh noncommercial factors is dependent upon continuance of the current 
revenue distribution plan; whether association members will continue to support 
the plan is open to some question. As of early summer the association had not 
selected any films, and the problem was still to be faced. 



POSTWAR ECONOMIC POLICY AND PLANNING 2633 

THE STATE DEPARTMENT 

State Department advisory participation might occur at one or more of four 
points: (1) with the producer, (2) with the production code administration, (3) 
witli the Motion Picture Association, or (4) with the Motion Picture Export 
Association. The pohcy arguments for and against State Department advice 
are fundamentally the same regardless of the point at which the participation 
occurs. 

There is no compulsion for the industry to accept any advice from the State 
Department. Nevertheless, there is a mutuality of interest between the motion- 
picture industry and the Department. Both are interested in maintaining favor- 
able relations betv^-een the United States and other nations, and therefore close 
liaison between them is desirable. There is no evidence, however, that the State 
Department's participation would bring the services of men more well informed 
about reactions of foreign movie goers than are those whom the industry already 
has available, or men with supeiior judgments in these matters. Indeed, as far 
as eliminating offenses to other peoples is concerned, the industry may be expected 
to do a better job because of the close relationship between box-office receipts 
and tactful portrayals of foreigners. Where the problem is that of portrajdng 
the United States, on the other hand, the State Department's interest is equally 
strong, but the industry's concern, while genuine enough, may be expected to 
be weaker. Because there is in this case no positive correlation between receipts 
and the accuracy of the portrayal, one may argue that here the State Department's 
advice may be of greater use. 

Advantages and disadvantages. — But what gain would result for the industry? 
(1) It is an acceptable proposition that the State Department would bring a 
different jjoint of view from that of the industry, and in many cases a point of 
view conflicting with the industry's, as represented by the production code admin- 
istration. Out of such conflict, however, might come a better result. (2) Par- 
ticipation in the making of decisions would be a desirable educational experience 
for the State Department in the difficulties of achieving the objectives suggested 
in the Macmahon report. From this experience a greater mutual respect might 
arise. (3) Such a gesture by the industry would bring obvious advantages in 
public relations. 

Yet there also are strong arguments against formal advisory participation by 
the State Department: (1) Even if the State Department does not finally control 
decisions, but merely participates by means of a representative in the making 
of decisions, an opportunity is given for critical foreign nations to attack such 
participation as censorship. This must be avoided at a time when our country 
is decrying the tight controls over freedom of expression in various parts of the 
world. (2) The industry's experience with the State Department during the 
war illustrated the difficulties in getting prompt, clear-cut decisions from members 
of the Department. (3) When, during the war, the State Department and the 
industry were suddenly brought into close contact, leaders of both groups had a 
difficult task in conveying to all members of their organization the attitude and 
spirit of cooperation at the top policy level. Operating difficulties were inevitable, 
and these did not fail to leave in their wake some prejudiced opinions. 

On balance, it can be said that there must at least be frequent contact between 
the industry and the State Department. There is evidence that a closer working 
relationship is already being established under the president of the Motion 
Picture Association, Eric Johnston. Several former members of the State Depart- 
ment, including a former Assistant Secretary of State, are now associated with 
the Motion Picture Association of America. In the picture-producing companies 
many top-flight executives have returned from war service which brought them 
into touch with important world problems. Many of Hollywood's actors and 
actresses, producers, directors, and writers have likewise seen war service or had ' 
close contact with troops overseas. An increased awareness of the State Depart- 
ment's problems is bound to exist. 

SUMMARY 

Continuing progress in minimizing the possibility of offense to foreign peoples 
appears likely. Such a conclusion is justified by the importance to the producer 
of avoiding offense in order to maintain box-office receipts. In addition, the 
production code administration has had years of experience in dealing with the 
problem and is thoroughly aware of its importance. Finally, individual producers 
and distributors have set their own precedents for either not producing or not 
exporting pictures potentially offensive to foreign nations. 



2634 POSTWAR ECONOMIC POLICY AND PLANNING 

A balanced presentation of American life is an attractively worded objective, 
but it is too vague to be realizable. Attention would better be directed toward 
reducing offenses against the national feelings of the United States. Concur- 
rently an impartial study should be made to ascertain realistically what impres- 
sions about the United States the movies have created in foreigners. Such a 
study would go far in providing the industry with a basis for action. 

Further attempts should be made by the industry to define precisely the nature 
of offenses against the national feelings of the United States and other countries. 
Such definition incorporated in the industry's production code will serve as a 
further aid, but not as a substitute for judgment. Furthermore, an enlargement 
of the treatment of national feelings in the code will have valuable public relations 
aspects, and serve in part as a rebuttal to the criticism that the code is virtually 
imited to important but narrow application in the field of morality. 

Elaboration of the code will not be enough in itself to minimize potential 
offenses to the United States and other countries. Difficult judgments will still 
have to be made, and the personnel making these judgments remains the key to 
the problem. The production code administration staff should be expanded. 
In particular, special attention should be given to increasing the representation 
in the staff of individuals of foreign education or experience. To maintain proper 
perspective, members of the staff should have opportunity for refreshing leaves of 
absence. This might be supplemented by periodically bringing thoughtful 
leaders from many walks of life to the staff as observers and consultants. From 
these last two recommendations a very desirable cross-fertilization of ideas could 
result. 

The formation of the Motion Picture Export Association presents an unusual 
opportunity for the industry to consider noncommercial factors in selecting films 
for export. Yet, without definition of what the export association is trying to 
avoid in the selection of pictures or what constructive values it is trying to find, 
there is doubt whether this opportunity can be fully utilized. 

Direct guidance by the State Department in the production of films, possibly 
through the production code administration, or in the selection of films for export 
is inadvisable. It invites criticism by foreign nations that American films are 
instruments for Government propaganda. Yet close liaison between the State 
Department and the industry appears increasingly possible in the future, and 
from this liaison a better understanding of each other's problems should result. 

But even if these steps are taken, criticism, while it may be reduced, msiy be 
expected to continue in this shadow land of taste and opinion. Disagreement 
is inevitable. Furthermore, this effort to make a favorable presentation of the 
United States assumes that there are foreign markets available in which to show 
enough films to build impressions. This assumption will not long prove workable 
unless the State Department succeeds in opening up foreign markets, particularly 
European, which now severely restrict the importation of American films. 

In the last analysis the basic issues raised at the beginning of this article must 
rely for solution upon an increasing awareness by the industry of its great public 
responsibilities, and a mature and self-conscious probing of those responsibilities 
by its leaders. There has never been such an opportunity as now exists. World 
attention is directed at achieving better understanding among nations, and the 
motion-picture industry's new and refreshed leadership should help it to make a 
significant contribution. 



JBBAR'', , 



06352 048 8 



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