War

It took Hollywood no time at all to make up its mind. Less than 24 hours after Britain's Government levied a new tax which, in effect, will take 75% of the gross earnings of U.S. films, Movie Czar Eric Johnston announced that Britain would get no more of them. Cinemoguls, meeting in a 3 1/2-hour session with Johnston, angrily charged that the tax was confiscatory. "If the British want American pictures," said Johnston, "they shouldn't expect to get a dollar's worth for a quarter."

The producers also charged a breach of faith. The tax came just as they were negotiating a voluntary reduction in their "take-home" earnings from Britain. They had sent Johnston, president of the Motion Picture Export Association, Inc. (as well as of the Motion Picture Association of America) to London to work out a solution. He came back with a dozen different proposals for Hollywood to consider, including one to hold part of the movie companies' earnings in blocked accounts in England. But before he even submitted them to producers, Britain fired its 16-in. tax gun.

Hollywood took up the challenge--but it did not like the prospect. The industry's take from Britain last year amounted to some $72 million before U.S. taxes. After taxes, it accounted for more than 25% of last year's total net profit of $125 million. To show a profit on some of the high-budget pictures scheduled (e.g., Joan of Lorraine), studios had been counting heavily on a big British draw.

"We Want Gable!" But regrets were not confined to Hollywood. As nothing else could, the sudden break in the flow of movies dramatized the full impact of Britain's dollar-economy program on the United Kingdom. Britons pined out loud for Dick Haymes and other Hollywood stars. Clergymen and educators, who commented that "now at least we can keep the King's English pure," were in the minority. In London, an enraged electrician's wife echoed the cries of thousands of British women: "This is the last straw; we have no one like Gable in British pictures."

In the U.S., Britain's plight increased the apprehension over sagging exports. Alarmists like Texas' Representative Eugene Worley, former chairman of a congressional subcommittee on foreign trade, suggested banning British films in the U.S. Said Worley: "Today it is films, tomorrow it might be wheat, cotton or beef'."

Boomerang? At least part of Hollywood's movie community was not nearly so angry as Representative Worley. There were many, particularly among independent producers, who considered the Johnston Office's action too rash. A prolonged dearth of U.S. films, they thought, might give the British industry an opportunity to cop the home market for good.

The thought was hardly comforting to the British film industry. In London, an associate of J. Arthur Rank, Britain's foremost producer and largest exhibitor, admitted it was the first time he "had seen the boss really worried." A shortage of U.S. films could starve Rank's movie houses (the Odeon chain) and force them either to close down or run "classics" before dwindling audiences. (Of the 300 new pictures which British movie houses require each year, only about 80 could be produced at home.)

Equally serious was the threat to Rank as a producer. If U.S. producers, who also control almost 80% of the first-run outlets, decided to retaliate, they could knock Rank out of the U.S. market. U.S. movie men's hopes centered on Rank, who could be expected, they thought, to use his influence with the British Government to bring U.S. movies back to Britain.

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