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 Report of the president of the...
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Group Title: Annual report to the Motion Picture Producers and Distributors of America
Title: Annual report
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00094189/00004
 Material Information
Title: Annual report
Physical Description: v. , : ; 22 cm.
Language: English
Creator: Motion Picture Producers and Distributors of America
Publisher: s.n.
Place of Publication: New York
Publication Date: 1940
Frequency: annual
Subject: Motion pictures -- Periodicals   ( lcsh )
Dates or Sequential Designation: Ceased with 1944/45.
General Note: Each report has a distinctive title preceding the words "Annual report..." on t.-p.
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Bibliographic ID: UF00094189
Volume ID: VID00004
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 01645316
oclc - 1645316
lccn - 37015315
 Related Items
Preceded by: Presidents report
Succeeded by: Annual Report

Table of Contents
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    Title Page
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    Report of the president of the Motion Picture Producers and Distributors of America, Inc., March 25, 1940
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Full Text



By WILL H. HAYS, President
79g4. March 25, 1940

28 West 44th Street, New York City



.5 __cc.




By WILL H. HAYS, President

1 40

March 25, 1940

28 West 44th Street, New York City




~_ ~I ~

II I----L

March 25, 1940.

W ITH this season completing the fifth decade of mo-
tion picture progress, it may be well to take stock of
the growth and significance of our entertainment product.
Pictures shown during 1939 included such films as:
Goodbye, Mr. Chips, epitomizing the steadfastness,
traditions and loyalties of the English-speaking peoples;
W/uthering Heights, a notable screen treatment of a
literary classic;
Young Mr. Lincoln, dealing with the early period in
the life of the Great Emancipator;
Juarez, a story of the struggle for democracy and free-
dom below the Rio Grande;
Union Pacific, a screen drama of American growth;
Mr. Smith Goes To Washington, emphasizing the com-
mon man's faith in our democracy;
Stagecoach, based on the outdoor action drama beloved
by so many generations of Americans;
The Hunchback of Notre Dame, adapted from the fam-
ous novel by Victor Hugo;

Destry Rides Again, a rollicking treatment of the "Wild
We Are Not Alone, a tense story of human courage;
The Story of Alexander Graham Bell, the screen bio-
graphy of the man who gave us the miracle of the telephone;
The Wizard of Oz, based on the unforgettable child-
hood classic;
The Light That Failed, a screen transcription of Rud-
yard Kipling's vivid story;
Stanley and Livingstone, recreating on the screen one
of the most dramatic chapters in modern journalism;
The Old Maid, adapted from the Broadway hit drama;
Three Smart Girls Grow Up, an amusing story of Amer-
ican family life; and
Man of Conquest, dramatizing an episode in the history
of our southwest.
Moreover, the current season is distinguished by such
pictures as:
Gone With The Wind, now setting new records of thea-
tre attendance in the industry;
The Grapes of Wrath, a contemporary theme treated in
a way which adds a new power and distinction to the enter-
tainment screen;
The Story of Dr. Ehrlich's Magic Bullet, dramatizing
in gripping human terms epoch-making medical dis-
Pinocchio and Gulliver's Travels, full-length cartoon
feature pictures;

Abe Lincoln In Illinois, presenting the maturer phase
in the life of Abraham Lincoln; and
Northwest Passage, a stirring drama of early America.
These and other films have furnished quality entertain-
ment for the millions and contributed to human under-
standing by illuminating some area of history, biography,
science, geography, literature or current reality.
It may be interesting to recall, in contrast, some of the
"best" and "honor roll" pictures which featured production
ten years ago.
Symptomatic of that era were such films as "Gold Dig-
gers of Broadway," "The Wolf of Wall Street," "The Lady
Lies," "Cock-eyed World" and "Charming Sinners"-in a
period in which "Disraeli" was the only biographical film
included among the best.
During the intervening ten years, the immortal words
of Shakespeare for the first time were spoken from the
screen; symphony and grand opera music were introduced
in the films; the great classics of literature were made into
photoplays; color, like sound, was perfected in the pictures;
the animated cartoon became full feature-length entertain-
ment, and the screen essayed seriously the treatment of cur-
rent social problems for a universal audience.
The succession of exceptional pictures now flowing from
our studios is particularly noteworthy in view of the discour-
aging and difficult conditions under which it was achieved.
American pictures have been gauged to a world market.
The war has seriously affected our leading export fields and
no man can know even the immediate future.
With crumbling foreign markets on one flank and the
need of sharp and effective production economies on the

other, producers did the proper and courageous thing-they
advanced in the center, making pictures of even higher ar-
tistic and entertainment appeal. Whatever obstacles may
still arise-and no world industry can be out of the woods
at this critical period-this is the direction in which they
can be met and overcome. There is no saturation point in
the demand for good entertainment, particularly important
under the tensions of the present day.

War and The Screen
In applying the yardstick of social values to motion pic-
ture progress, those who write the history of our times are
not likely to ignore the contributions of the films in expos-
ing the tragedy of war to the youth of our country. The
answer as to whether certain war pictures produced by the
industry "glorified" war or laid bare its horrors lies in the
fact that the pressure of youth in our own country is towards
peace, not involvement. The romance of war has been punc-
tured. And this could not have been done purely by the
accumulation of oral and written preachments, lectures and
warnings. Only the screen, through newsreels and dramatic
films can picture war as it is with sufficient vividness to im-
press the mind of youth. It is significant that many American
pictures were banned abroad because in the judgment of
foreign government censors they were anti-militaristic.
Hand in hand with such pictures were many patriotic
films that aroused interest in our defense problems, showed
the efficiency of our various national services and the dan-
gers of propaganda with which we are faced. Youth in
America today is clear-headed and clear-eyed with regard
to the futility of war; and pictures, more than words, have
tended to bring this result. Whatever satisfaction we
may derive from the artistic and social progress made by the


13 1262 08648 291 5 1
3 1262 08648 291 5

screen during the year under review, this is no time for
complacency. Much of our business is subject to the mis-
fortunes of war, and the obstacles still before the industry
may be graver today than at any time in its history. Never-
theless, the record of the past year is an encouraging
sign that whatever problems the next months may bring,
there is a reservoir of initiative, enterprise and artis-
try in the industry which, with reasonable and necessary
economies, will enable us to produce pictures to appeal to
ever-widening strata of moviegoers in our own theatres.
Only the appeal of better pictures can transform millions
of casual moviegoers into regular customers.


The shock of the European war, coming at a time when
foreign receipts were a most important factor in the plan-
ning of production schedules by many of our companies
here, was made doubly serious by the investments and under-
takings of American producers for the production of pic-
tures in England. On one day the banks in England were
closed, holdings of foreign currency were called in, and ex-
port of bank notes, gold securities or foreign currency was
prohibited without special permission. All theatres in the
United Kingdom were closed by Government order.
Later theatres gradually reopened but the loss in the
first few weeks was necessarily severe. The greater blow
came when American distributors were notified that the
Treasury would shortly find it necessary to suspend dollar
remittances for American films. Such a step necessarily
would have reacted disastrously upon our own companies
here and upon exhibitors in England as well, and also upon
the need for entertainment in relation to war-time morale.

Up to September 28 negotiations had only developed to the
point of the possible remittance of 10% of the annual gross
business in that country.
The representations made and the negotiations then en-
tered into in London on behalf of all American distributors,
constitute as fine an example of cooperation as this industry
ever achieved-cooperation not only within the industry but
that received from our own State Department in Washing-
ton, and from the American Ambassador in London during
the whole course of the difficult and complicated proceed-
ings by which an agreement was finally developed.
We recognized an inevitable reduction below our nor-
mal receipts in England because of decreased theatre at-
tendance under war-time conditions and we made it clear
that we were ready to make sacrifices as an industry in a
friendly market faced with the imperative need of control-
ling exchange transfers and of still maintaining essential
entertainment service. The American motion picture indus-
try's world duty to exhibitors is such as to make necessary
extraordinary measures to prevent dislocation of their opera-
tions in times of emergency.

In November an agreement was completed which pro-
vided that our companies might transfer half of the nor-
mally remittable amount earned by our producers in Eng-
land. The very detailed and complex terms of the agreement,
which allowed the use also of non-transferable funds in Eng-
land in the ordinary operations of our distributors, have
required the setting up of a continuing organization, so that
there might be the most scrupulous regard for and control of
all arrangements.

In France, the needs of mobilization, involving trained

theatre operatives as well as others, caused the closing of
numerous theatres during the first weeks, but the French
Government from the beginning requested that theatres be
kept open, if possible. As a result, many theatres have re-
opened and the closing hour has been extended under cer-
tain conditions.
In other foreign markets, too, American films must
continue to thread their way through a maze of trade
restrictions, tariffs, embargoes, quotas, import licenses, ex-
change controls and numerous other devices for preventing
Duties and import taxes have been raised in the Argen-
tine, Australia, Bolivia and England. Quota restrictions
have been increased in Estonia, the Italian African Colony
and Japan. New quota laws have been passed in Australia.
Brazil, Greece, Mexico, Spain and Switzerland. New in-
terior taxes have been adopted in Algeria, the Argentine,
Brazil, Canada, Egypt, England, India, Siam and Spain.
It is fortunate that our Government has recognized the
importance of our films not only as a part of our total ex-
ports, but as the messengers of American commerce every-
where. As a result of the trade agreements concluded by
the State Department, our industry has been definitely and
favorably affected by the opportunities to negotiate against
exactions, barriers and restraints in certain countries.

Quality Insurance

There is no success formula for the motion picture or
any other art, except the formula of everlastingly trying to
do better. The present pictures on the screen are the result
of design and not accident. Good pictures are not the spon-

taneous expression of talent, literature or drama. They must
start with the will to make them, the capacity to gather the
hundreds of necessary skills that go into their making, the
ability to find the required investments, and the courage to
risk vast sums on entertainment ideas that may or may not
eventually receive public favor. That's the job of the almost
forgotten business man in the industry. It is he who must
sift hundreds of ideas before him, who must justify the
investments necessary to give great directors the opportunity
to express their art and who must see to it that these limitless
skills are assembled in a single place for a single coherent
effort to amuse, entertain or inspire an audience of more than
80,000,000 weekly in the United States alone.
An economic imperative for a constantly growing
stream of better pictures in the United States today is
that there exist in the industry well-organized, highly
experienced and successful companies that produce, dis-
tribute and exhibit pictures in a limited number of large and
successful theatres which they direct or operate. The fact
that they can avoid a double loss-in exhibition as well as
production-only by pictures that please the public is an
incentive for substantial investment, more employment and
greater enterprise which benefit the entire industry, depres-
sion or no depression. Our entertainment industry is too com-
plex to be increased, like the amoeba, by the process of
The motion picture industry, which has attained its
present social importance through self-regulation, has still
to complete many details of this structure, particularly in
the field of trade practices. But those who would use .the
hatchet and saw of litigation or legislation to sever the neces-
sary economic relations of production, distribution and ex-
hibition, instead of allowing them to be bettered through

self-regulation, would be doing, if they succeeded, a sorry
service to the American entertainment public, to the screen
and to American industry generally because of the signifi-
cance of our films in carrying the message of America to the
remotest corners of the world.

Better Audiences for Better Pictures
Hand in hand with the better pictures which are being
produced must continue the effort of the industry to develop
greater audience appreciation for higher entertainment
standards. The industry is at a stage where better pictures
have widened vastly the orbit of the screen. The problem
is how to continue to increase the number of cultured and
thoughtful people in our motion picture audience. Not all
segments of the population can be reached by the same
interest appeal.

The success of our developing educational work is at-
tested by the growing number of calls by individual com-
panies for cooperation with respect to some of their leading
pictures. Such activities conducted for the organized in-
dustry have the three-fold purpose of increasing box-office
receipts; of effective approach to many of the 26,000,000
adults in the United States who are only occasional movie-
goers; and of fostering the prestige of the industry through
public appreciation of the fine quality of motion picture

The economies made in such work by the Association
during the year have not decreased the necessity or demand
for service from our Community Service Department. Many
pictures produced during the past twelve months have high

educational, literary or scientific overtones, which must be
publicized on the basis of leadership opinion as well as of
popular appeal. Such work should be continued. For in-
stance, during the past year we maintained contact with
16,000 cultural leaders interested in emphasizing various
aspects of motion picture entertainment.
Because some of the pictures produced by the industry
reflected the most careful historical, literary or scientific
research, we continued our cooperation with schools, col-
leges and universities, whose interest in current motion pic-
ture material has risen to truly remarkable proportions
within the past ten years. These activities include the prep-
aration of study guides based on historical, educational and
literary values in the various current films; research exhibits
which stimulated interest in motion pictures by showing the
infinite pains taken to assure authenticity in costumes,
historical locale and other details; cooperation with 5,000
libraries throughout the United States because of the inter-
linking reaction toward the pictures based on the classics
and the books upon which they are founded; and the
cooperation with colleges and universities establishing
courses in photoplay appreciation. More than 100 uni-
versities and colleges have now installed motion picture
courses, stressing the technical developments of the motion
picture art. Such institutions, as the Rockefeller Founda-
tion have contributed funds to carry on the work in uni-
In public schools, the year has shown a growing tendency
toward building photoplay appreciation courses into the
regular curriculum. The interest of the schools in motion
picture appreciation is more significant than ever today be-
cause of the extraordinarily large school population. It
should be remembered that in 1933 it was considered a phe-

nomenal fact for high school enrollment to have increased in
30 years from a little more than 10% to more than 50% of
the high school age. But by 1936 it had increased to 67%, and
estimates today are much higher, indicating an attendance of
6,750,000 in high schools and 22,400,000 in elementary
schools. Quite apart from theatre attendance the opinion
of such a group-almost one-quarter of the population-
will constitute the future public appraisal of motion
In another field-the field of character education-it
is to be recorded that the Commission on Human Relations
of the Progressive Education Association, in cooperation
with the Rockefeller Foundation and the Motion Picture
Producers & Distributors of America, Inc., has now released
for classroom study and discussion 61 human relations short
subjects adapted from photoplays. Study guides, including
material both for teachers and students, are part of the dis-
tribution plan now in use.
In general, the educational program of the Association
has been restricted, as it had to be by the measures of econ-
omy initiated throughout the Association as throughout the
industry, but these activities should be restored to full force
when conditions permit.

Classroom Films
On July 6, 1939, at the annual convention of the National
Education Association in San Francisco, I took occasion to
announce the development of another cooperative project
in the interest of education.
In recent years teachers have become increasingly con-
scious of the educational value of many motion pictures

currently shown in the theatres. Educators have come to
believe that there is much material in entertainment films
that would be useful for a variety of educational purposes
and especially for classroom teaching. This belief has de-
veloped the strong demand for the release of certain material
for classroom use.
In response to this demand and at the suggestion of lead-
ing educators, an Advisory Committee on the Use of Motion
Pictures in Education was formed consisting of the follow-
ing members:
Frederick H. Bair, Superintendent of Schools, Bronx-
ville, N. Y.;
Isaiah Bowman, President of Johns Hopkins University;
Karl T. Compton, President of Massachusetts Institute
of Technology;
Edmund E. Day, President of Cornell University;
Royal B. Farnum, Executive Vice-President of Rhode
Island School of Design;
Willard E. Givens, Executive Secretary of the National
Education Association;
Jay B. Nash, Professor of Education, New York
University; and
Mark A. May, Director of the Institute of Human Rela-
tions at Yale University.

Previous annual reports have related the examination
of 1254 non-current theatrical short subjects, previously
selected from about 15,000 short subjects produced by our
member companies since the advent of sound in the motion
picture industry. Of this number 590 were recommended as
being suitable for classroom use in their present form.
A catalogue has been prepared containing descriptions

of the recommended films and brief evaluations made by the
Committee for the information of teachers and school ad-
ministrators, and the Advisory Committee named in this re-
port has organized its members into a non-profit organiza-
tion known as Teaching Film Custodians, Inc. The selected
short subjects were made available by our members to that
corporation for distribution in the schools for classroom
use during a three-year period with no financial return to
the owners of the negatives. The distribution of these 16
mm. films for classroom use is now proceeding. The whole
plan as worked out by competent educators is limited strictly
to the educational field and there is no competition whatever
as between this purpose and the interests of motion picture

Production Code Administration

That the industry during the past year went full speed
ahead in the production of feature-length pictures, notwith-
standing the unfavorable conditions that faced it during
much of this period and that our code activities increased
despite the need of economy, are indicated by the operations
of the Production Code Administration in the calendar year

Last year I was able to report that 594 feature-length
pictures had gone through our process of self-regulation and
had been approved under the Code. Of this number 49
were reissues of previous films.

For the year under review, 596 feature-length pictures
were serviced and approved by the Association, with only
12 classified as reissues, making a total of 39 more new
feature-length pictures approved for 1939 than for the
previous year.

The total number of short subject films approved dur-
ing 1939 was 715 as against 833 in 1938.
The almost universal acceptance of the facilities for
self-regulation set up by the organized industry is empha-
sized by the fact that this year most minor as well as major
companies in the industry took full advantage of our code
operations and that foreign companies as well submitted
their films for review by the Production Code Administra-
tion. The following table indicates the extent to which our
Motion Picture Production Code applied to films produced
and distributed in the calendar year 1939:

Pictures Reissues Total
Major companies ......... 366 8 374
Minor companies ......... 161 3 164
Foreign companies ........ 57 1 58

Grand total........ 596

Short Subjects
Pictures Reissues Total
Major companies ......... 492 2 494
Minor companies .......... 215 215
Foreign companies ........ 6 6

Grand total........ 715

It may be interesting to add that during the year 1939,
two feature-length, foreign-language pictures made in Hol-
lywood were approved by the Production Code Admin-
istration: El Otro Soy Yo and Los Hijos Mandan.

The strict observance enforced under our code provis-
ions, the fact that self-regulation is constructive whereas
censorship can only destroy, and the extent to which literary
and dramatic material secured at great cost may be salvaged
by the elision of scene, situation or dialogue which should
not appear on the screen, are made clear by the following
additional facts:
1. That 2 feature pictures were rejected during the cal-
endar year under review as definitely outside the provisions
of the Motion Picture Production Code;
2. That 53 synopses, treatments, stories, plays and scripts
were rejected as not conforming to various provisions of
the Code;
3. That 12 feature pictures rejected in the original form
were re-submitted to and approved by the Production Code
Administration after necessary changes had been made;
4. Finally, that 36 synopses, treatments, stories, plays
and scripts, originally unacceptable, were later altered and
then approved under the Motion Picture Production Code.
During the calendar year 1939, feature pictures based
on original screen stories numbered 329, an increase of 13
over the previous year; 34 pictures during this period were
based on stage plays, against 30 for the previous year;
pictures made from biographical stories jumped from 2 in
1938 to 17 in 1939; while feature films based on novels took
a drop, 140 such feature-length pictures having been made
in 1938, and 127 in 1939.
The average cost of the 527 domestic feature-length pic-
tures for the year under review is estimated at about $210,-
289, a decrease from last year when the cost of the average
picture was approximately $223,000.

Following is a detailed statement of activities incident to
our Code work during the year:
Total number of books, synopses, plays
and stories read ................ 571t
Number of scripts read (including
changes) ..................... 2873
Number of pictures reviewed ......... 1511*
Number of consultations ............. 1509
Number of opinions written, dealing with
stories, scripts, pictures, etc ....... 5184
t Includes short subjects.
Includes a number of pictures reviewed more than once.

Advertising Code Administration
Self-regulation has proved itself, too, in the service of
the Motion Picture Advertising Code. Member com-
panies of this Association as well as other producers and dis-
tributors that avail themselves of the facilities of the Adver-
tising Code Administration are now well acquainted with
the standards of clean and truthful advertising which the
Code has set up. Thus the work is accomplished with a
minimum of delay, expense or trouble.
Interesting to note is the fact that 509 completed press
book campaigns, including advertisements, publicity stories,
newspaper art, lobby displays, outdoor posters and exploita-
tion ideas, were submitted and approved during the calen-
dar year-75 more than in 1938, and 71 more than in 1937.
Advertisements which were either rejected in toto or
in which changes or revisions were ordered, ran less than 2%
of the total submissions-less, in fact, than during 1938. On
the other hand, the number of still photographs not meeting
with the approval of the Advertising Council increased
somewhat. This can, in part, be attributed to the greater

use of candid cameras at the studio, which requires more
rigid supervision of this type of art work.
The greater activity of our studios during the year as
against the previous season, is indicated by the following
comparative table of advertising material brought before
the Advertising Advisory Council during the year:
Material Considered
on Submission 1939 1938
Stills-West Coast ........... 105,993 99,627
Stills- East Coast ............ 3,090 3,730
Publicity Stories ............. 15,709 15,044
Advertisements .............. 12,386 9,830
Exploitation Ideas ............ 10,554 9,388
M isc. Accessories ............. 6,960 6,252
Posters ..................... 2,013 1,937
T railers .................... 981 747
Completed Press Book
Campaigns Approved ......... 509 434

Progressive Social Improvement
The success of self-regulation, as effectuated through the
operations of the Production and Advertising Codes of the
industry, to meet the standards required for the production
and exploitation of family entertainment, is now a matter
of record. It is a task that demands and has received the
unremitting attention of this Association.
For many years various groups and organizations have
assayed pictures not only from the artistic but from the
moral standpoint. It is a great satisfaction to report that
during the past year not a single film produced under our
processes of self-regulation was classified as "condemned"
in the social categories of even the strictest of such groups.

The progress made since the industry undertook to make
good its public responsibilities on the screen may be gathered
from the fact that the first of such reviewing groups in 1922
found itself able to approve only about 25% of the feature
films then produced as meeting the social standards demand-
ed by family attendance.
By 1927, about 40% of the pictures originating in this
country were approved by the various public groups for
their family constituencies.
By 1930, the proportion had gone up to 50%, and in
1934 approximately 77% of the pictures met the highest
standards set up by such bodies for their own assays.
During the year 1939, the group which began its work
in 1922 reviewed 573 feature pictures, approved 512 or
89.4%, found 50 objectionable in part (of which 15 were
produced by our member companies), and rejected nine,
not one of which had been approved by the Production Code
That pictures which rank among the best the industry
has produced should have been made under the many ad-
verse conditions stated in this report is not only a tribute to
a free screen which has reached its artistic maturity, but is
proof that self-regulation has succeeded where censorship
has failed.
Much of the credit belongs to public groups which year
after year have worked through every means of education
to marshal greater public support for pictures of higher
literary, cultural and entertainment value. The principle of
such cooperation has never been to dictate to the producer
what pictures he shall or shall not make, or to dictate to the
theatre manager what pictures he shall or shall not show

for the approval of the people in his community. Intelli-
gent appraisals of current motion picture production, dis-
tributed through wider and ever-widening constituencies,
enabled families everywhere to choose the character of en-
tertainment they desired to support.
With the clean bill of health now shown by the in-
dustry, it is ironic that there should be any insistence today
on a subterfuge, potentially more vicious than any form of
outright censorship, allegedly aimed at the further moral
improvement of the screen.
The new censorship movement parades under the inno-
cent name of "community selection"-except that self-ap-
pointed censors, not the community, are to do the selecting
by group pressure upon the exhibitor to tell him what he
may or may not show to the people in his community.
Community selection, in the real sense, takes place every
day in every theatre in the land. No picture can succeed
which the public refuses to support.
But what misleading propaganda now urges is really
"community selection" without the consent of the commun-
ity, and before public taste and public opinion have had an
opportunity to assert themselves. Under whatever name this
is glossed, such a method would set up an irresponsible cen-
sorship by pressure groups.
Dictation even by well-intentioned groups as to what
pictures shall or shall not be shown in any given theatre,
not to mention dictation from groups with an axe to grind,
would stultify the art. The scheme is essentially destruc-
tive of the very basis of free speech, a free press, the freedom
of the air, a free screen.
It is true that we have still far to go on the road of self-

regulation before every buyer and seller in this industry, like
the fabled lion and the lamb, will lie down in peace together.
There is much to be done to secure clear and unequivocal
understanding between distributors and exhibitors in many
trade practices inherent in the character of our product
and our business.
Nothing should be left undone for the development of
a complete system of conciliation and arbitration in the in-
dustry-action now stymied by the same uncertainty that
affects other industries involved in legal proceedings. No in-
dustry is helped by the pronouncement: Try it-at your
But that the whole sales structure should be destroyed
in order to make the new censorship possible is quite an-
other matter. The extraordinary distance that we have gone
in building up a structure of self-discipline should be evi-
dent from the pictures now on the screen, from the wide
choice of selection in every city and town, from the low
admission prices which attract a universal audience to the
pictures in bad times as well as in good times, and from the
modern, clean and well-equipped theatres which are located
in even the smallest communities in the land.
It is to the growing understanding of these facts that
we owe the gratifying appreciation of industry prob-
lems as reflected in the newspapers of the country. A survey
of such opinion indicates that editorials, columns, and
comments were 5 to 1 in favor of the industry as against the
position taken by those factors urging shot-gun legislation.

The past year has been a most eventful one for the news-
reel services of our industry. With the world hungry for

the pictorial news of the world's three wars-the Anglo-
French-German war, the undeclared Japanese-Chinese war
and the Russian-Finnish war, which, too, started without the
formality of a declaration-extraordinary problems were
placed before our newsreel editors. Upon one hand they
had to undertake coverage much more expensive than in
normal times, and, on the other hand, they had to respond
to the demands of economy in the industry.
It was a momentous year in many respects-a year in
which our newsreels recorded Franco's victory in the Span-
ish war; the seizure of Czecho-Slovakia and the invasion of
Poland; the declaration of what may become the second
World War and the tragedies of civilian populations evacu-
ated from the danger-zones; the passing of Pope Pius XI and
the elevation of Cardinal Pacelli to the Papacy; the visit
of King George and Queen Elizabeth to the United States
and Canada; the raising of the submarine Squalus; our
neutrality debate; and the bombing of Helsinki. Of these
events, the Americans alone of all the peoples of the world
have had presented to them a clear perspective of the news
in pictorial form.
Nevertheless, what actually appeared on the screen has
been but a portion of what was filmed by our news photo-
graphers on all fronts. Thousands of feet of negative taken
in belligerent countries in an effort to present fairly the con-
ditions of the war have been confiscated by official censors.
One measure of interest in pictorial news is the fact that
four more newsreel theatres have been opened, these thea-
tres being in New York, Chicago and San Francisco.

Our activities in this respect continued along three dis-

tinct lines, each important for the success of the enterprise
as a whole:
I. Field work which has as its object the establish-
ment of fire prevention and alertness among in-
dustry employees;
2. An educational program calling attention to all
the necessary fire and safety precautions; and
3. The erection and maintenance of proper exchange
buildings for the distribution of motion picture

During the year 1939, two unimportant fires occurred in
film exchanges in the United States operated by members
of distributing companies. It is estimated that the damage
in both instances was not more than $50. The record
achieved, however, does not mean that we can relax
our vigilance. We occupy and must continue to occupy a
foremost place among all industries in fire prevention and
conservation matters, and it is pleasant to report the com-
plete cooperation of our membership in this regard.
During 1939, new exchange buildings were erected in
Memphis, Oklahoma City, Kansas City, Chicago, Charlotte,
Des Moines, Buffalo and Denver. In addition to the new
properties, many exchange buildings were remodelled, air-
conditioned and modernized.

Title Registration
The work of this Department, open to non-members as
well as member companies of the Association, was extended.
during the year because of additional duties imposed upon
it. It has become a service freely given and welcomed by
producers and distributors whether associated or not as-

sociated with the organized industry. The magnitude of the
activities under this head is indicated by the fact that the
files of all classes now contain approximately 280,000 cards,
each telling its own story.
During the year 1939, more than 3,300 new titles were
registered, making the number of titles in the file of un-
released pictures approximately 10,500. About 1,200 titles
of features and short subjects were added to the Release
Index during the year.
This Department is not only a definite business con-
venience to the industry, saving great loss and hundreds of
controversies which would otherwise occur every year, but
is part of our self-regulatory procedure for the maintenance
of the highest possible moral standards on the screen.

Public Information
The widespread interest in motion pictures, the educa-
tional aspects of some of our product, and the increasing
number of educational, social and musical groups which are
including the screen in their studies or programs have made
the Association the center for the preparation and dis-
tribution of a vast amount of material that emphasizes in-
terest in the screen and theatre attendance. Our work in
these respects is not limited to our own country. Weekly
broadcasts on American pictures, inaugurated in six lan-
guages last July to South America and Europe over the
shortwave facilities of the two leading broadcasting systems
have been exceptionally well received by listeners all over
the world.
At the request of the broadcasting companies, scripts
are prepared by our Public Information Department
from materials submitted by member companies. We

are advised by one of these leading networks that "the qual-
ity and quantity of the material thus furnished has surpassed
anything of the kind done for us and with us by any other
industry." Notwithstanding the war, a large portion of the
letters received from foreign listeners commented especially
on the movie broadcasts prepared by the Association. These
broadcasts, now in their fortieth week, rendered as a public
service by the broadcasters at no cost for scripts or air time,
stress the fact that art knows no national boundaries, and
strengthen international cultural exchange.
The campaign for the nation-wide observance of the
Fiftieth Anniversary of Motion Pictures, carried out by the
Association, did much to emphasize the importance of the
motion picture theatre as an institution in the local com-
munity. Most of the larger papers in the country either
reported or commented editorially on this event and lead-
ing monthly and weekly magazines carried special articles
about the progress of the art, the importance of the indus-
try to the community and the nation, and the significant con-
tribution of the screen as a medium of wholesome entertain-
ment, information and inspiration.
Exhibitors throughout the country, including members
of the Motion Picture Theatre Owners of America, the Al-
lied States organization and individual exhibitors unaffili-
ated with any association, participated in celebrating this
event through special programs and other features. The
whole effort was undertaken as part of the regular work of
the Association and involved no special appropriation.
Many activities undertaken by the Community Service
Department on the West Coast, particularly in response to
requests from group leaders, are public information projects
of first importance. For example, among the radio scripts

prepared and distributed during the past year by our Holly-
wood office were the following sent on request to hundreds
of Community workers:
"Americanism the Keynote for 1939 Pictures", "Re-
viewing Motion Pictures", "Films for the Family", "News-
reels Cover the World", "Selecting the Family Picture",
"Motion Picture Music", "Americana in Motion Pictures",
"Motion Picture Research", "New Faces in Hollywood",
"Films from Stage Plays", and "Children Making Screen
Music". In addition there were many scripts based on
particularly significant pictures and interesting technical
sidelights in our studios.
During the past year, the number of accredited press
correspondents in Hollywood grew to 375, about 50 more
than in 1938. It is a tribute to the fairness of the press, both
newspapers and magazines, that the bulk of the news sent
out by correspondents or prepared by special writers was of
a highly constructive character. Our job in the industry
is to make available authentic news and features to the
newspapers, so that fewer writers will be tempted to go into
the field of irresponsible gossip.
The industry is fortunate in having a trade press, which
regularly reaches fourteen to fifteen thousand exhibitors,
and is capable of carrying the industry's message direct and
acting as a clearing house of information for all branches of
production, distribution and exhibition.

Conciliation and Placement

The machinery of conciliation set up in Hollywood never
functioned more smoothly in the relation between the studios
and talent groups. Hundreds of complaints from both sides

have been conciliated and at the time of writing there are
hardly in excess of a dozen claims that have not been settled.
The Central Casting Corporation's record of place-
ments, aggregating 294,432, was exceeded only in 1927.
The work performed by that organization was again
increased in 1939, due to changes in procedure in the hiring
of minors. The Central Casting Corporation may take
pride in the fact that during the placement of more than
290,000 extras, whose aggregate wage for the year was $3,-
124,671.64, twelve errors only were made totaling $122.12.

Technical Progress

During the past year perhaps the most notable advance-
ment in motion picture technology has occurred in the
application of new panchromatic emulsions for cinema
photography and new fine grain negative film of special
application to background projection. With respect to the
development of fine grain film, the more recent application
has been the use of such film in sound recording. Special
high speed film developed during the past two years has
proven of added advantage in the Technical Arts process.
The use of color in picture-making was given new sig-
nificance with the success-of "Gone With The Wind".
This film proved that color had reached a new high mark
on the screen.
In the field of sound recording and reproduction there
have been commercial as well as laboratory improve-
ments. Considerable attention has been paid to improving.
the quality of sound reproduction in theatres. This was
achieved in one direction by the development of new sound
apparatus, and in another through the use of special test

films developed for the purpose originally by the Society of
Motion Picture Engineers and later by the Research Coun-
cil of the Academy in Hollywood. It is understood that
important further laboratory developments will shortly
be made available to the industry.

More and more the subject of much of our current enter-
tainment is America. This is as it should be. In this cate-
gory should be placed such pictures as "Gone With The
Wind", "Abe Lincoln In Illinois", "Young Mr. Lincoln",
"Union Pacific", "Stagecoach", "Mr. Smith Goes To Wash-
ington," "The Grapes of Wrath", "Northwest Passage".
"The Story of Alexander Graham Bell", "Drums Along
The Mohawk", "The Real Glory", "Swanee River", "Alle-
gheny Uprising", "Geronimo", "Man Of Conquest" and
"Little Old New York". Nor does this exhaust the list.
Americana on the screen was increased by a great num-
ber of patriotic short subjects as well as by the picture
"Land Of Liberty", the industry's presentation at the
World's Fair in New York and the Exposition in San
Compiled from 124 feature pictures and short subjects
produced by our studios, "Land Of Liberty", which also
included hundreds of cuttings from newsreels and stock ma-
terial, brought back scenes from such features as "Cimar-
ron", "The Covered Wagon", "In Old Chicago", "San Fran-
cisco", "The Big Parade", "Moby Dick", "Sutter's Gold",
and from such famous short subjects as "Let Freedom
Ring", "Give Me Liberty", and "The Declaration Of Inde-
pendence". This cavalcade of American history, made into
a vivid chronicle by Prof. James T. Shotwell and directed

by Cecil B. deMille, has been acclaimed as r -n- 'npres-
sive from the entertainment as well as the hisL,,... stand-

Problems Ahead
The fact that our studios were able to respond with even
better pictures, which resulted in increased theatre attend-
ance in the domestic market-offsetting, partially at least,
the disaster in foreign fields-proves that economies can be
made without sacrifice of quality. But quality there must
be. No false economy in this respect can prove economical
for the industry if entertainment appeal is not maintained.
It is equally important that the industry move progres-
sively toward better trade relations. No activity in this
direction is wasted if it clarifies the issues and brings into
sight a solution acceptable to producers, distributors and
exhibitors alike.
Finally, it is a satisfaction to note the increasing appre-
ciation and use of the machinery of self-regulation erected
for the industry. Many valuable literary, dramatic and
entertainment values have been saved by the operations of
our Production Code in eliminating the socially offensive
and the improper. It is to be remembered, however, that
our code machinery is not a fumigating plant into which
material tainted in essence may be put and dramatically
and socially desirable entertainment may be taken out. Good
pictures begin and end with the purpose so to produce them.


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