862.4061 Motion Pictures/60

The Ambassador in Germany (Sackett) to the Acting Secretary of State

No. 1653

Sir: As of possible interest to the Department, I have the honor to enclose herewith copy of a memorandum of a conversation between Trade Commissioner Canty, of the Commercial Attaché’s office, and Dr. Henke, the film expert of the Foreign Office, with regard to the [Page 368] German and international film situation. The interview was arranged at the request of the Embassy.

Respectfully yours,

Frederic M. Sackett

Memorandum by Mr. George R. Canty, American Trade Commissioner at Berlin

On Friday, I visited by appointment Legations-sekretaer Dr. Henke, film referent of the German Foreign Office, and discussed various phases of the international film situation with him for nearly two hours. This was the first time that I had met Dr. Henke.

I asked Dr. Henke if he were in position to enlighten me as to whether or not the German Government intended to retain its film contingent law for another season, in view of the many reports that Germany is suffering from a shortage of film product and must seek outside assistance in order to meet exhibitor demands. He replied that he feels that the German supply for 1932/1933 will not be sufficient to satisfy demand and he believes that the German Government will thus automatically be forced to facilitate the import of foreign films by means of an increase of the contingent quota, by which America would benefit in the first instance, or to encourage production by foreign interests in Germany. On no account, he felt, would the contingent be done away with, irrespective of whether or not America had only a limited number of pictures suitable for release in Germany. If the contingent were to be lifted, he said, the German market would be swamped with cheap foreign product which the German exhibitor would be influenced to rent along with the limited number of good pictures being offered. German producers found it difficult enough, as it is, to fund the necessary budgets for production, but if the risk ever became imminent that the market were flooded by foreign product, no German financier would be prepared to invest in German productions, as the question of amortization would become increasingly doubtful. (He was very likely referring to “dubbed” versions, although neither one of us specifically mentioned these).

He insisted that it was a matter of principle for the German Government to protect the home industry by means of the contingent, more especially so, since the German film industry had already fully proved that it was worthy of protection, much more so than, for example, either the French or English industry. “Culture-political” reasons were also responsible for the Government’s attitude, as most [Page 369] of the Central and Eastern European countries depended on a supply of German-made films in the German language. This, of course, is an important point with the German Government.

He added that Germany, as a sovereign state, could not be expected to abolish the contingent and should have the same right to protect its film industry in the manner it saw fit, just as England or France were entitled to or claimed, such right.

I then asked Dr. Henke if there was anything that could be done to equalize the provision in the contingent regulations that prohibit blind booking of foreign product. I pointed out to him that this was an additional hardship on the American trade for, in addition to very severe distribution restrictions, foreign product had to be publicly shown before being rented whereas domestic product could be booked unseen. (This, incidentally, is at present the real sore spot in the German regulations.) Dr. Henke emphatically denied that this was intended as a discrimination against American product—it was not the German Government’s fault that the American output was so much larger than either the French or British. However, it is his personal belief that these restrictions might be amended this year, either by a provision applying to all films or to a cancellation of the present provision. This depends on how far the German industry would be able to meet demands for the coming season.

Dr. Henke wanted to know why American companies were unwilling to produce films in Germany as they have been doing in France and Great Britain. I told him that the economic situations, so far as they concerned American companies, were not analogous; in France, for example, Paramount, the sole American company producing locally, owned a string of cinemas which constantly need product, whereas in Great Britain, the domestic market was not only good but that the better product from that country had very good export possibilities, particularly in the United States. I told him also that any general American decision to produce in Germany would involve a long term program and a considerable budget for expenditure, and that the regularity with which the German film restrictions have been changed for the worse annually was probably the biggest obstacle against such a plan. Dr. Henke replied that he could see no conclusive reason why American companies consistently refused to produce in Germany; pictures made here would not fall under the contingent and there would be a much greater possibility of amortization as compared with German dialogue pictures made, for example, at Joinville, on account of “atmosphere.” He could not agree that the constant fluctuations of the contingent regulations made it impossible for the Amercian concerns to determine their policy for a [Page 370] number of years, as the contingent merely influenced the import of foreign-made pictures and not those made domestically. He continued that, to his knowledge, Universal was fairly satisfied with the results of their recent German productions and he could, therefore, not understand why Paramount, Metro and Fox did not follow suit I assured him that Universal’s effort was merely an experiment and was not to be construed as any American movement toward production in Germany.

Finally, Dr. Henke, brought up the question of anti-German films of American manufacture, probably having in mind such films as “All Quiet on the Western Front,” “Hell’s Angels,” and “The Lost. Squadron.” It was apparent to me that this question was paramount in his film interest, so I told him that the presence in the United States of Dr. Freudenthal, of the Foreign Office, could very well be used in discussing this question with Mr. Will H. Hays, President of the Motion Picture Producers and Distributors of America, in New York, but that, in any event, there could not possibly be any anti-German sentiment connected with the production of the film in mind. He told me that Mr. Hays had intimated that the Germans were too sensitive in the matter, but, he insisted, the Germans, who had lost a war had the right to be sensitive and he made it quite clear that, so long as the German Government did not receive some guarantee that the production of anti-German films would be stopped, the American industry could not hope to witness any radical change in the contingent policy which would materially aid them. I could not in any way feel that this statement was made as a threat, still I gathered the impression that, owing to the great importance attached to the subject of anti-German films, Dr. Henke had in mind that if the American industry through the Hays Organization, would in some way definitely assure the German Government that its position was not anti-German and that the future would see the elimination of such films as were not approved, let us say, by the German Consul nearest to Hollywood, this could be used as a trading point in softening the effects of the German contingent.

George R. Canty