841.4061 Motion Pictures/191: Telegram

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

2081. Your No. 1233, October 16, 8 p.m.15 I have just spent an hour with Simon16 and Stanley and their two topside men discussing this picture situation. Not one man of the four has the slightest idea of what it is all about. Everytime you mention getting any money out of the country, they talk about the length of the war and that they must protect themselves by not sending American dollars, in spite of the fact that I proved to them that, from a strictly commercial and financial point of view, the picture business would generate a volume of business here that could not be ignored.

I think that based on the figures given me by Griffith that the figures given in your 1233 are wrong. Theatre attendance was 50% when the theatres first opened, but now the receipts are 90% of normal, [Page 223] so that I made them a proposition following your general outline as follows: that the American companies be permitted to retain for one year 100% of the receipts, applicable for export to America in the normal state of affairs, until that sum has reached 75% of the average of the last 2 years remittance to America. This should be approximately $30,000,000 and 75% of that would be $22,500,000; since I have no faith in being able to work out quota pictures, that the quota be done away with and that perhaps the American companies then would set aside £500,000 of the 25% that is left in England for loans or making some pictures in England provided they could be guaranteed that there was a reasonable chance of getting their money back. I thought since the whole decision affected the American industry and the British industry this proposition was about as close as the industry could afford to come without complete bankruptcy. At the same time they would be given a chance to work off their inventories and live under much reduced budgets.

Of the latter they hollered “murder”. The most they ever saw going out of here the first year was $10,000,000 tops and after that possibly $5,000,000.

I have been very stiff about it and I have told them I would not recommend any alternative proposition that they submitted and that if I were the picture companies I would tell them to take it or leave it. However, they will go over it and of course they will make some kind of a proposition and when they do I will send it along with my recommendations. If you are not going to get enough money out to do you any good in maintaining the industry, you might just as well fight about it.

  1. Not printed.
  2. Sir John Simon, British Chancellor of the Exchequer.