Business: In Golden Square

A smug sense of triumph pervaded British business last week. On London’s Piccadilly, in the City, in the studio suburb of Elstree, even in the little dead end of Downing Street, good Britons congratulated each other on a new and imperial prospect for the British cinema. Cause of all this decorous good feeling was a cigar-puffing 64-year-old onetime Glasgow solicitor named John Maxwell, who had just upset the biggest film deal of the year-to make an even bigger one. Mr. Maxwell had as good as bought Gaumont-British, thereby discomfiting two resounding Hollywood names, the brothers Nicholas and Joseph Schenck.

The future of this oldest and greatest of British cinema companies appeared to have been definitively settled last July, not in London, but in Manhattan. Joseph Michael Schenck, chairman of Twentieth Century-Fox Film Corp., seated appropriately on a hotel divan between his brother, President Nicholas Michael Schenck of Loew’s, Inc., and the president of Gaumont-British, Isidore Ostrer, announced a three-way Gaumont deal (TIME, Aug. 3). Nick Schenck’s Metro-Goldwyn-Mayer, Loew’s production subsidiary, was going to buy one-half of Twentieth Century-Fox’s minority interest in the Gaumorit-British holding company. This was to be followed by a complicated reshuffle of shares be tween the Brothers Schenck, Isidore Ostrer and his numerous brothers, by which the Ostrers would lose their preponderant interest and large quantities of Gaumont stock would be sold to the British public.

When Isidore Ostrer returned home to jell this deal, he ran into difficulties in Wardour Street, Britain’s cinema centre.

According to its articles of association, Gaumont control must remain in British hands. It was not quite clear where real control would rest when the Schencks and Ostrers finished their shuffling, but the patriotic assumption was that Hollywood would be a great deal deeper in Gaumont than before. As summer passed it became evident that the Ostrer-Schenck deal was not jelling.

To the Ostrers then went John Maxwell, chairman & managing director of the No. 2 British cinema company, Associated Brit ish Picture Corp., Ltd. Thickly set, be spectacled, abrupt, Cineman Maxwell has been plodding along in the wake of the volatile Ostrers for years, making less brilliant cinemas but more impressive balance sheets.

This year Gaumont’s need for new capital, which had sent Isidore Ostrer to the U. S. in the first place, inclined the Ostrers to give Mr. Maxwell a hearing. For a small amount of cash, a large amount of Associated British Picture stock, the Ostrers consented to part with their interest in the Gaumont holding company, unless the Schencks should obstruct the deal that will make John Maxwell the undisputed King of British cinema, with a chain of 640 theatres and corporate assets of some $120,000,000.

Meantime brave assurances issued from the Schencks that their deal was still on, but reports of Scot Maxwell’s resurgence became so hot that Joe Schenck dispatched Twentieth Century-Fox’s President, Sidney R. Kent, to London to keep his ear to the ground, his hand on a transatlantic telephone. Fortnight ago, Mr. Kent was suddenly invited to Mr. Maxwell’s office in Golden Square off London’s Regent Street. If Twentieth Century-Fox would prefer it, said blunt Mr. Maxwell, he would be happy that they should retain their 49% interest in the Gaumont-British holding company. On the other hand he would be equally happy to relieve them of that interest. Convinced that Mr. Maxwell could indeed speak for Gaumont-British, President Kent hurried back to his telephone in Claridge’s hotel.

In Manhattan Nick Schenck stormed that he and Brother Joe “emphatically object to the Ostrer-Maxwell agreement,” growling: “We feel we have a deal there, and we expect to make an issue of it.”

Said Mr. Maxwell in London: “I have no fears of the threats coming from America of our transaction being stopped by legal proceedings.”