St. Louis Suit

The rusty old Sherman Anti-Trust Law came back into the news last week in a big way for the first time since NIRA's enactment. A Federal Grand Jury in St. Louis indicted three major cinema companies and some of their most important executives for a conspiracy in restraint of trade. If the Department of Justice succeeds in getting a conviction, the process by which the cinema industry has sold its wares for 20 years is likely to be broken up.

Three first-run theatres in St. Louis were involved in last week's action which may result in $5,000 fines, one-year imprisonment. Warner Brothers and Paramount had shared operating control of the Ambassador, the New Grand Central and the Missouri theatres until Paramount went into bankruptcy. Unable to carry on alone, Warner Brothers in the course of a mortgage foreclosure lost the lease on the theatres to an operating company headed by Allen L. Snyder which offered more rent. But when the Snyder concern tried to get Warner Brothers, Paramount and RKO pictures, it found itself balked. Thereupon the Snyder company last summer complained to the Department of Justice that those companies were conspiring against it by withholding their products from its houses, that they were, in short, violating the Sherman Law. After investigating the complaint, the Grand Jury last week indicted Warner Brothers, Paramount, Radio-Keith-Orpheum, seven of their subsidiaries and six major executives including President Harry Warner of Warner Brothers, Vice President George Schaefer of Paramount Pictures Distributing Co., and President Ned Depinet of RKO Distributing Corp.

Producer Warner defended himself thus: "We have done nothing but conduct our business in a fair and honest manner. . . . We leased two other theatres in St. Louis suitable for first-run exhibition, and, in the ordinary course of business, solicited and acquired the right to exhibit the product of Paramount and RKO in addition to our own in these theatres."

In Washington there was incredible gossip to the effect that behind the St. Louis indictments lay an Administration desire to oust Republican Will Hays as tsar of the industry and install a Democrat, possibly Postmaster General Farley, in his $100,000 job.

This file is automatically generated by a robot program, so reader's discretion is required.