Donald M. Nelson’s Letter of Resignation

December 1, 1947 

December 1, 1947

Dear Member:

For some time now, I have been giving most serious consideration to the problems confronting members of the Society. The problems, as all of us know, have been numerous and burdensome. First, there was the loss of a portion of the domestic market. Second, there were dissensions among some of those to whom independents had a right and reason to look for assistance. Third, there was the increasing tendency of nations abroad to try to solve part of their economic problems at the expense of our revenues along the pattern set by Britain.

All these have had an effect in varying degree on the independent producer, both immediate and long range. Banks tightened up on their loans. Financing in general became more difficult. Our production slowed down and in some cases came to a complete halt. Through all these things the Society could not hope to go on untouched and unscathed. Our revenues, both current and immediately in prospect, began to suffer. It finally became apparent that something had to be done to reduce the overhead.

Having all these facts before me, I weighed them most carefully against the Society's obligations to its members, to see where economies could be instituted most effectively. To make this appraisal, it was necessary to review the position of the Society in both the domestic and foreign picture to see what work has been undertaken, how vital it was to the members and what remained to be done to carry it through. I came to these conclusions:

Although the independent producer today is confronted with problems of market and finance that appear to militate strongly against his survival, he is paradoxically in the best position of his entire existence to gain and hold his fair share of the market. Through a broad program of public relations undertaken by the Society from the outset of my administration two and a half years ago, the position of the independent has been improved at every point of his contact within the industry, with the public in general, with labor and with government. I have tried to be a good neighbor at home and to participate in good and worthwhile activities both in civic and industrial affairs. I have tried to be a good citizen and to assume a fair burden of responsibility in the affairs of the country. I have even tried to carry this line of activity into our international obligations, always mindful of the good of the Society. In short, the Society, through me or my staff, has maintained an active liaison with all branches of our industry with the result that the prestige and status of the independent have been raised considerably and the Society has become a force to be reckoned with. It has carried on active contacts with the press, the radio and the magazines with the result that both the public and the media of public opinion have been made considerably more aware of who is the independent producer, who comprises the Society and the fact that we stand in Hollywood for things that are progressive and beneficial to the public. We have made good and lasting friends among working men everywhere through our policies of labor relations and we have pioneered and set a pattern in this field with our cooperative Society orchestra which is now being so sincerely imitated by other independents who are not members. We have also set up for the Society a loyal and competent staff who are experts in their respective fields and thoroughly, capable of carrying on whatever program of activity the future may demand. They have carried their assignments through faithfully and well.

All these things were being accomplished in hand with another activity which to my mind and, I’m sure to yours, is most vital from a long range point of view to you as members of the Society and to every independent producer in Hollywood. I refer to the monopoly suit against the major studios which is now pending before the Supreme Court of the United States. As you know, I have devoted myself since joining the Society to the task of bringing this case to trial and of setting up within the Society the nucleus of a watchdog organization that would discourage attempts to monopolize our markets in the future. As you also know, the case did come to trial before the statutory federal court in New York, where it was established beyond a doubt that the majors were guilty of restrictive marketing practices in violation of the Sherman anti-trust laws. And, we did establish in the Society an expert department which is fully prepared and qualified to take advantage on behalf of the independent producer of whatever the federal courts decide. You are well aware that the lower court failed as far as we are concerned in only one thing. It declined to order the majors to dispose of their theatre holdings as a requisite to a free motion picture market. We have contended right along that this must be done if freedom of enterprise is to survive in Hollywood picture production. The government has also seen it that way and has appealed to the Supreme Court, asking complete divorcement. We are entering the case shortly as friends of the court with an amicus brief prepared by Morris Ernst and others in which I place great faith. There should be arguments on the case in January and a decision possibly in March. Except for the actual presentation of our brief, there is nothing more the Society can do in the case itself. Our work there is finished. Only vigilance remains, once the verdict is entered, and, we hope, the back of picture monopoly is broken.

I took all the foregoing facts and accomplishments into consideration in deciding what is the best course of the Society to take in the immediate future. I have reached a conclusion which I wish to communicate to you. The only logical way for the Society to continue to operate is to reduce the overhead, of which my salary and expenses are the biggest single item. Without this, the Society can continue to function and realize for the members those vital benefits for which we have been pointing in all our operations to date. As some of you know, I have been interested for a long time in a number of projects both in and outside the United States but have been unable to devote myself to them because of my obligations to the Society. Because I feel that my work for the Society has now been accomplished and because I would like to be relieved of those obligations, I respectfully ask you to accept my resignation, effective January 31, 1948. I take this action with sincere regret and with a deep sense of personal loss. It gave me more pleasure than I can tell you to be associated with this great industry and with each one of you personally. Your cooperation has been most willing and your understanding has been great. I thank you for everything, and especially for your friendship.

Please permit me in closing to make a few observations as to the future of the Society. As I indicated in a recent article on the independent producer, one of the things that has impressed me most has been the long range staying quality of the independent. He has survived in the past against odds that decidedly favored his extinction. Today his outlook once again is dark.  

In my opinion, however, it is only the darkness before the proverbial dawn. If the Society can survive and remain intact for the present — and I believe it can, possibly under temporary leadership from within its own ranks — I am confident that forces which are now at work will reshape the whole structure of film marketing to the great encouragement and benefit of independent production.

While no one can presume to anticipate with prescience the judgment of the Supreme Court, it is my honest and considered opinion that only good for the independent can come from the court's decision. It must be so if free enterprise in this industry is to survive.

Much of our future depends on our ability to help the nations of the world back to spiritual and economic health. It appears that economic help, at least, will be forthcoming. If such help proves effective, it will mean that foreign nations once more will be able to trade with us on a sane and healthy basis. This in turn could have only a good effect on domestic industry and domestic payrolls and on the motion picture box office and would alleviate the critical exchange problem, both at home and abroad. Unless something unforeseen happens, the prospect for you therefore is a better market and a considerably freer one. Good luck.

Sincerely yours,

DONALD M. NELSON