Cinemas, Wives

Last week the Supreme Court of the U. S. handed down the first two notable decisions in its current session.

Block Booking. For the past four or five years U. S. cinemagnates, combined as Motion Picture Producers & Distributors of America, Inc. (Will Hays, president), have striven to stabilize their industry. To this end they tried to make all theatre-owners contract for films--good or bad--a year ahead. This practice is called "block booking." To facilitate booking, block and "spot," the producers created 32 Film Boards of Trade. To these boards they gave powers of credit-approval. Into the contracts with theatre-owners they inserted a provision that, should credit disputes arise, Credit Committees of these boards might arbitrate and their findings would be final. Also into the contract they put a clause requiring a theatre purchaser to assume the block bookings of his predecessor, or else make a cash "deposit" which might be as much as $1,000. Most cinema houses in the land have operated under such contracts ever since. On the strength of their contracts, the producers map their programs of picturemaking. Thus the contracts might be said to be the backbone of the film industry.

Last week the U. S. Supreme Court ruled on two cases called in question by the Department of Justice. A lower court had decided that the arbitration provision was coercive, denying theatre-owners their right to free, competitive trade under the anti-trust laws. It had decided that the clause requiring theatre-owners to assume predecessors' obligations was not in vio lation of that same law.

The Supreme Court upheld the first decision, reversed the second, thus last week took from the cinemagnates the back bone of their industry.

Common Income. Arizona, Louisiana, Texas and Washington have laws which give husband & wife an equal share in their community income. Many a husband & wife have therefore divided their income, rendered separate Federal income tax returns on the halves, thus gaining great tax reductions. Last year Congress by special act extended the Statute of Limitations so that the Treasury Department could sue these citizens for the tax on the full amount of their combined income in 1927 and 1928. The Supreme Court last week decided for the citizens, against the Treasury Department. Away from the Government, back to taxpayers in Arizona, Louisiana, Texas and Washington, go some $100,000,000 in tax payments. Taxpayers in Idaho, Nevada and New Mexico, which have similar community-property laws, may also be affected. This decision was the first to be handed down by Associate Justice Owen Josephus Roberts (TIME, May 19).

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