862.4061 Motion Pictures/10: Telegram

The Ambassador in Germany (Schurman) to the Secretary of State


263. Reference your No. 130 [134], December 26, 3 p.m.

The European manager of United Artists, Smith, conferred fully with me on their situation and then had a long conference with the German Federal Commissioner for Import and Export Permits, Dr. Landwehr, and the chairman of the advisory German Film [Page 923] Foreign Trade Committee, Dr. Kuhnert, to whom the American company’s case was presented. Smith was asked to offer proposals to bring United Artists into the framework of the new German film regulations. Having reserved the right to discuss the matter with his principals, he is now returning for that purpose to the United States.
In order for United Artists to arrive at a working basis here, through compromising with German film authorities, a considerable investment would be involved and there would be no tangible hope that the immediate and limited benefit thereby obtained would endure more than 2 or 3 film years at the most. Consequently, United Artists faces the necessity of deciding to what extent, if any, adjustment to the new regulations is warranted.
Owing to the foregoing, in my opinion a protest on behalf of United Artists would not be opportune until
Smith has had a chance to report to his principals;
United Artists has replied either negatively or positively to the above-mentioned German invitation for proposals; and
The question as to representations in regard to the situation in its effect on American companies in general has been decided. Should not such representations, if they are to be made, take precedence?
In ruling a retroactive effect for the new regulations, the German authorities claim that United Artists had adequate notice to allow them to adapt their business to the new film requirements. The German authorities nevertheless assert they will remain open-minded to any reasonable arrangement suggested by United Artists with a view to acquiring the same status “enjoyed” in Germany by other American film rental organizations. Matters could only be prejudiced by premature publicity on the part of United Artists.
May I refer to my despatch No. 4198, December 22.