Record #1114

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Reel 10
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Motion Picture Code of Fair Competition
EDITORIAL COMMENT: This is probably as close to the central truth of the industry's trade relations as we will find - clearly putting the MPPDA in the middle, of attempting to regulate an industry whose major concerns operated in terms of their own short-term benefit, without regard to the long-term harmony of the industry -- and do so on the advice of their lawyers and against the advice of the MPPDA. This is a running story, not one in any sense ended by the implementation of the Code.

Regarding trade practice matters - attempting to rework issues since the demise of the Motion Picture Code for Fair Competition, particularly in finding a way to deal with the MPTOA and unaffiliated exhibitors. The trouble with the company lawyers is that, in being legalistic, they are essentially anti-self-regulation. They think only of the matter in hand, and not of the long-range future of the industry.


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7 November 1935 Palfreyman to Hays on trade practices problems over distributors' attitudes to the unaffiliated MPTOA members: he feels that the lawyers who make up the 'code committee' are "essentially hostile to self-regulation and non-legal formulae for adjusting disputes, and I am frankly very dubious that they will really look with favor or genuine sympathy on any sort of effective organized effort along these lines. My own observation is that they never have in the past, though they sometimes pretend to until the opportunity arises to break it up without taking the responsibility. "It seems to me that the underlying question of general policy and long range course for the industry to pursue is of such a nature that it ultimately must be decided by the responsible heads of each company. Perhaps they cannot be expected to pass on the details of any plan, but word from them to their sales executives, general counsel and subordinates that something should be done would immediately bring about a change of attitude among those with whom we must work in organizing any plan to dispose of industry disputes. The trouble is that the under executives and lawyers feel only a limited responsibility, i.e., to do their own particular job well, have no broad feeling of responsibility for the future course of either their company nor the industry as a whole. "The fundamental question is whether the industry voluntarily will seriously undertake to organize self-regulation in commercial matters involving unfair competition and trade practices, or will stand pat and defend the present methods of doing business against any and all attacks in court and efforts of the legislatures, Congress and the government to impose regulation and control by force of outside authority. Such efforts, in the absence of any steps within the industry towards self-regulation in these matters, just will not down. They do provide a profitable and fertile field for litigation and subversive agitation, which goes on incessantly. Congress and the state legislatures meet again in less than two months, with the holiday season and its diversion intervening. If such steps are not actively undertaken until after Congress is in session, we will inevitably be accused of being frightened or clubbed into undertaking them and our motives will be strongly suspected of being entirely to whitewash our 'monopolistic practices.'"

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