“Salary Cut in Doubt as Opposition Grows”

Headline: “Salary Cut in Doubt as Opposition Grows”

Subhead: Consideration of Individual Cases Instead of Sweeping Reduction is Proposed at Academy Mass Meeting

The recently announced salary cut throughout the entire production personnel of the industry of from 10 to 25 per cent has resulted in a complicated situation. Some stars and directors have agreed to accept the reduction, a number have flatly refused, and still others are “on the fence,” awaiting the verdict of the majority.

At a mass meeting before the Motion Picture Academy of Arts and Sciences on Wednesday night in Hollywood, the favored proposal was that the action be deferred until August 1, to permit of consideration of individual cases, rather than a sweeping reduction taking in all persons, regardless of their value in relation to their salary.

The reduction is generally construed as a move to make possible needed production financing by impressing the banks with the industry’s intentions to place pictures on a sounder economic basis. A leading financial ticker service this week said:

“Cut of 10 per cent in salaries by Paramount Famous–Lasky Corporation, followed by other companies, has called the attention of Wall Street to a problem that the film industry has been contending with for some time—the unduly high cost of film production and overhead. The present action can be compared with the action taken three years ago in 1924 in shutting down the Hollywood studios for a short time in order to bring home to stars and directors the need for economy. . . . After having carefully built up its cash and working capital to a strong position, Paramount during its period of expansion has again allowed indebtedness to the banks to accumulate. With its summer production season, which requires the heaviest drain on funds at its height, this position is not a favorable one. Considerable money will also be required to meet demands of various construction enterprises under way.”