copyright, I think I should have an opportunity to see it and to make and answer to it if necessary. The CHAIRMAN. You want to remedy any evils that exist among the exhibitors? Mr. SAMUELSON. Yes. The CHAIRMAN. Then in fairness to the exhibitors why not make it public? Mr. DIES. Is there any danger that it will injure these men? Mr. SAMUELSON. There is. But I think the members of the committee should see this. I thought we could furnish the committee with these facts. Mr. HESS. Do you think it would be fair to furnish an ex parte statement to the committee without giving the people against whom the statement is made an opportunity to see it and to answer it? The CHAIRMAN. Would you like to give it to us on that basis? Mr. SAMUELSON. I would like to hand it to the committee to read it. It will not take more than five minutes to read it. The CHAIRMAN. We will read it now and then decide what we think should be done with it. Mr. HESS. If the committee is to read the statement, and the statement makes a charge Mr. DIES. I object to this gentleman interfering with and trying to instruct the committee in its duties or as to its course. The CHAIRMAN. For the sake of the record and in the interests of justice the committee will include this in its report and then you can see what it is that has been presented to us. Mr. SAMUELSON. I will read the letter containing the statement in regard to this association and present these checks of which I have had photostatic copies made. The CHAIRMAN. You read them, and I assure you no harm will fall to the individual; and if it does, we will call it to the attention. of the Federal Department of Justice. STATEMENT IN REGARD TO COPYRIGHT, MARCH 1, 1932 The undersigned is one of the stockholders of the Arcadia Theater Co., operating the Rivoli Theater, Belmar, N. J.; the following information concerns that theater. We had a picture called "Talk of Hollywood," booked to play on Saturday and Sunday, February 1 and 2, 1930. At the close of the matinee on Saturday, February 1, we decided, owing to the poor condition and quality of the show, that we must change our show for Sunday, February 2. When we arrived at that decision at 5 p. m. Saturday, it was too late to make arrangements with any of the exchanges for a different show, as exchange managers, who have the authority to transact business of this kind, leave before 5 p. m. on Saturdays. Our only way out was to play the show which we had booked in for Monday and Tuesday on Sunday also. The films from the exchanges are always picked up by our delivery service a day in advance, and delivered by truck to the theater late the same night for use the following day. We telephoned the delivery service early Sunday morning to lift our Monday-Tuesday show and check it out as baggage to us for use on Sunday. Our intention was to go to the exchange Monday morning and advise them of the emergency. However, in calling for the films, the delivery man told the exchange that we needed to play the picture that same day, and the exchange immediately sent a man out to the theater to get evidence that we were playing the show in violation of copyright laws. The rental price of the picture was $60 for two days, and in an emergency of this kind, there would most likely have been no charge for the additional day, inasmuch as we played the picture without advance advertising. (Our pro grams showed the other picture to play that Sunday, and the only notice we could give of the change was by printing a few handbills, which we did late Saturday, to hand out at the theater Saturday night in order not to disappoint customers who might come to see the show originally advertised.) The box-office receipts show that the change was to cover an emergency and not for profit. They are as follows: Sunday, $86.90; Monday, $199; Tuesday, $118. After several conferences with attorneys for copyright interests, we made a settlement. They claimed that there were other violations, but so far as I was able to learn, these were only on shows returned late through errors in delivery, and were not copyright infringements. Canceled checks and agreements of settlement are attached hereto. ARCADIA THEATER CO., Then I have these photostatic copies of the checks. The CHAIRMAN. What do you want to prove with the checks? Mr. SAMUELSON. The checks show they were made out to the New York Film Board of Trade, and are indorsed New York Film Board of Trade, trust-fund account. There is no indorsement by the New York Film Board of Trade; simply adds trust-fund account. The CHAIRMAN. The New York Film Board of Trade is whom? Mr. SAMUELSON. An association made up of the resident managers of the different distributors and they meet regularly, as they claim, as a trade association for the distributors. They have a national organization called the New York Board of Trade and the Film Board of Trade, and the New York Board of Trade used to handle Arbitration, since outlawed. The CHAIRMAN. Where does the New York Board of Trade come in? Mr. SAMUELSON. Mr. Nizer is the counsel, Mr. Louis Nizer. The firm is Phillips & Nizer, 1560 Broadway, New York City. His senior partner is a member of the Paramount Corporation-he writes a letter on the letterhead of Phillips & Nizer. The CHAIRMAN (inspecting check). This check is made out to the order of the New York Film Board of Trade? Mr. SAMUELSON. Yes, sir. The CHAIRMAN. Which is composed of the local managers of the distributing agencies? Mr. SAMUELSON. Yes, sir. The CHAIRMAN. The check was made to their order? Mr. SAMUELSON. Yes. The CHAIRMAN. It was deposited by them? Mr. SAMUELSON. Yes. The CHAIRMAN. To whose credit was it deposited? Mr. SAMUELSON. The New York Film Board of Trade, trust fund account. The CHAIRMAN. Where did it go then? Mr. SAMUELSON. To the Prudential Bank, Midtown Bank, New York, then it went to the Central Hanover Trust Co. The CHAIRMAN. Who sent you word about this? Mr. SAMUELSON. Mr. Nizer. The CHAIRMAN. He is the general counsel for what? Mr. SAMUELSON. That that sum and the others were entered in the account of the New York Film Board of Trade and the owner of the copyright does not get the benefit. The CHAIRMAN. The owner of the copyright of the play or the film? Mr. SAMUELSON. Yes. The CHAIRMAN. That is the Fox Film Corporation? Mr. SAMUELSON. Yes, sir. The CHAIRMAN. How do you know where this money went? Mr. HESS. It went to the trust account-the trust fund account. The CHAIRMAN. And when the money is received in that trust account it is subsequently distributed? (No response.) Mr. SAMUELSON. Mr. Hess is operating the bureau and he should know. I made the statement that a lot of these infringements are encouraged. There is a theater owner who over a period of four months used $78 worth of short subjects. He was called into Mr. Nizer's office and he was told that he owed $13,000. The CHAIRMAN. The usual long-run film is 5,000 to 10,000 feet; the second, or short-run, is it about 2,000 feet, and the current events is a short one? Now, you are talking about the 2,000-foot films? Mr. SAMUELSON. Yes; the short subjects. The managers have told me they have nothing to do with copyright, it is done by this central bureau, and they operate under a contract of lease. The CHAIRMAN. Isn't it better to have infringements looked into by a central bureau? Mr. SAMUELSON. Yes, yes. The CHAIRMAN. I had a case of a composer and in going after the American society I asked him why he went to that organization, and he said that he only gets $5,000 a year out of it; and if he had to go all over the country to collect his royalties, it would take that much to collect it. John Phillip Sousa has to contend with the same condition. Both of those men said they preferred to have a central agency rather than have to go all over the country to these different boards, as that would cost them about $5,000. Mr. SAMUELSON. When you go after the criminals you have to go after them with a rough or high hand. They received encouragement in the shape of $5 paid to them. The CHAIRMAN. Paid by whom-by the high-pressure salesmen? Mr. SAMUELSON. Yes, sir. The general run of business men do not give much time and attention to the study of law. They sign their papers and that is all. Then the salesmen is either out of a job and the single reelers come back five or six weeks in succession and they multiply the number of times per day by the number of days. Pretty soon the exhibitor gets a letter asking him to come to see Mr. Nizer, who is a practicing attorney in the city of New York with a hook-up with the industry, and Mr. Nizer tells him "It is too bad; it is sad that a splendid looking man like yourself should be a criminal." Mr. Nizer holds a card in his hand which nobody can see and he mentally counts up an enormous sum which he says the exhibitor must pay. That the exhibitor must pay that sum because 113839-32-26 of infringement but that owing to his previous good record he will make a settlement with him without bringing suit. And the settlement usually amounts to about a thousand dollars-about what it would cost to engage a lawyer and get his evidence together to fight such an action. Well, the exhibitor is caught and he thinks he can do nothing about it. The CHAIRMAN. You are not against the actual infringer? Mr. SAMUELSON. No, sir; what we want is relief from the highpower and high-pressure people. When the exhibitor explains that he has done nothing wrong intentionally, Mr. Nizer retorts that a crime is a crime, and that it will cost the exhibitor more money to defend the action and he tells him that the payment can be made by a series of postdated checks, and Mr. Nizer has told the exhibitor that he recognizes that haste in settlement would prevent trouble. I have a letter here which shows how the exchange works in that regard. Mr. SIDNEY E. SAMUELSON, PLAZA THEATER, Linden, N. J., February 29, 1932. 303 West Forty-second Street, New York City. DEAR SID: Below you will find the information that you requested regarding the alleged copyright violations of the Plaza Theater: As can be seen from the above, the maximum amount which could have been asked for the additional day claimed would be $131.25. rata basis which, as you know, is never actually done. amount of damages asked is $1,250. This is based on a pro In regard to Single Sin, from Tiffany, the booker was called and the change made over the phone, from a 2-day booking to a 3-day booking. This is borne out by the fact that the check called for three days. In regard to Ask Dad, from Educational, the salesman from that exchange told me on the curb that we could play a 2-day comedy for three days, due to our having played a number of them for one day. Of course, I must confess that I took it upon myself to set the 3-day booking without his notice. In this case, also, the check called for a 3-day booking. In regard to the Metro shorts, I had booked them in on a schedule calling for every Sunday show. At the time the contract was signed we were playing either one or two days on the Sunday show. The first time I played three days the feature was a Metro feature. I felt that since the comedy was booked in on schedule, the exchange would either allow me a 3-day play or bill me for the schedule, the exchange would either allow me a 3-day play or bill me for the extra day. The check for this show and for all of the Metro shorts cited called for three days. This, and the fact that the shorts were booked in with a number of Metro features certainly shows no intention to defraud. As you probably know, the vilest aspect of this whole situation is the fact that the Metro exchange manager knew of these violations and of the trap that was being set for us. Each day he receives from his shipping room a list of all film not returned on time. Surely one word from him that we were doing wrong in his eyes, and the situation would have immediately been remedied and a check given to the exchange for the extra play day. With kindest personal regards, I remain, Yours very truly, IRVING. The CHAIRMAN. That is perhaps one of the class Mr. Hess referred to the 10 per cent of deliberate infringers. You said, Mr. Hess, that there were about that number-10 per cent of chronic offenders? Mr. HESS. I did not say "chronic offenders" but "frequent offenders. Mr. SAMUELSON. This statement shows that they put it on the stubs but they do not hand in any contract. They cover up their tracks. Mr. HESS. No judgment will be entered against him in that. Mr. SAMUELSON. Now, I have another letter here which I wish to give to the committee, it is from Mr. Louis Nizer and was sent to the Arcadia Theater Co., Mr. Lee W. Newberry, at Belmar, N. J. The letter is as follows: NOVEMBER 6, 1930. GENTLEMEN: This is to acknowledge the receipt of nine checks the first for $100, payable to-day, and the remaining each for $50, payable December 6, 1930, and monthly thereafter. These checks, if and when paid on due dates, shall constitute full payment of all claims against you for the improper use of film up to this date. On December 6, 1930, if, instead of making payment of $50, you make payment of $150, and your Mr. Newberry indorses the remainder of the checks personally, case now pending in the United States district court shall be marked settled. If such additional payment is not made on December 6, you hereby agree, through your attorneys, to execute such instruments as shall be necessary to withdraw your answer filed in the United States district court in the action of Fox Film Corporation against you, and in such case, only in the event of a default in future payments, the plaintiff shall have the right to enter judgment pro confesso against you in the United States district court, or, in the alternative, to proceed upon the checks, all of which shall immediately become due in the event of the default of the payment of one. Upon completion of the payment of $500, in any event, general releases shall be exchanged between the parties. The case now pending in the United States district court, above referred to, shall be adjourned for one month for the purposes above specified. So much for that breach. Now, during the month of July, 1931, Mr. A. Gottemar sold a chain of theaters, and he knows what the plan is all about. This is what happened to him. I will read his signed statement-it is brief but very informing: STATEMENT IN REGARD TO COPYRIGHT FEBRUARY 16, 1932. During the month of July, 1931, Warner Bros. omitted to send a feature to one of our theaters for the matinee. We sustained damages to the extent of $60, demanding $60 from them for definite damages which we established. Mr. Nat Beier, the manager of the exchange, offered in settlement of same the privilege of playing several pictures an extra day. With that understanding, we dated Chances for the American Theater, Newark, N. J., August 2, 3, 4; also Night Nurse at the Cameo Theater, Newark, N. J., for August 9, 10, 11; and Smart Money at the Cameo Theater, Newark, for August 2, 3, 4. Warner Bros. do not give a confirmation at the time of booking, but mail same to the theater; in a lot of cases, confirmation is not received until after play date. In this case, our confirmations clearly designate the play dates |