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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. 0 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 0
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
3 9999
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