841.4061 Motion Pictures/189: Telegram

The Ambassador in the United Kingdom ( Kennedy ) to the Secretary of State

2023. Your [My] 1975, October 9, 1 p.m. I talked with Stanley at once about waiting for proposition from America. He is agreeable. My own belief is that the proposition the English put up is so drastic that we should not consider it. In the first place it means the end of the motion picture industry in the United States in its present set up. The mere fact that they permit the industry to use sterling for supplementary exports is a joke. There is nothing they could buy with that unless they want to buy land or houses in England.

The far reaching effects of the British proposition, as far as the picture business in the United States is concerned, is overwhelming. When you consider that the foreign market is practically closed to the industry and that 30 million dollars comes out of England, which is probably three times the entire profit made in film production by the whole industry, you can see where the picture industry is going to finish. In addition to that, with the loss of foreign income, the terrific investments of American citizens in theaters and real estate in [Page 220] our own country will be shot to pieces, because it is going to take a long time before those gentlemen in California are going to be able to make pictures for half the money they have been spending that will be satisfactory to the tastes of the American public after what they have been educated to. Of course I realize there is a sinful waste in the business and when that is corrected it will take up some of the slack, but it cannot possibly take up the whole of it. That being the case and because it is not only a question of profit to the film companies but the serious collapse of the investment of millions of dollars in the United States, it strikes me that we have got to be very tough.

If the films were something that the British did not have to have, then they could do business on their own terms, but American films to England still continues as important for the morale of their people as any purchase of war materials they can make in the United States.

Of course if the English can confiscate all the American pictures that are here and pay us in sterling, they have got us for at least a year because there are plenty of pictures here to take care of them for that length of time, but it strikes me that would be a very unpolitic thing for them to do, but you can advise me as to whether that is possible. If it is not possible, then I would certainly tell them that they could not have the pictures unless they pay for them. At least it may furnish a basis for a fair settlement.

I have given very serious consideration to this problem and this is my best considered judgment. Also, since the British know all about the telegrams that come in from the companies, they are in a fairly good position to know what the American parent companies are thinking. I would therefore suggest that Hays’ proposition be sent to me in the confidential code and then I can express my opinion on it before it is handed over, but if it is once sent through to the offices here, the British will just laugh at me.

As far as fulfilling the quota requirements is concerned, I would tell the British that the American companies are of course prepared to fulfill their requirements, provided they can get all their money out of England and provided the British can guarantee them the staff to work in their pictures and furnish some method of continuing production while air raids are on and all the other attendant difficulties that go with it. They cannot expect Americans to come over here to work under present conditions.

I realize this is a very drastic piece of advice and it is quite likely that the British will tell us to go chase ourselves, but if they cannot take the present films they have got here, they have a tough proposition to work out. I do not think this is unfair at all, because their suggestions and propositions strike a body blow at an industry that will cause untold losses to our people in the United States.

Kennedy