Painless Operation?

If the movie industry was perforce to be cut off from its theaters, RKO’s Howard Hughes wanted to make the operation as painless as possible. While the rest of the industry awaited court action on the Department of Justice’s demand for a formal separation of picture-making and picture-showing (TIME, Oct. 11), Hughes last week got his RKO directors to authorize a voluntary agreement with the Government’s trustbusters. This was the first break in Hollywood’s united front against the Department of Justice.

Under the proposed agreement—which antitrust has tentatively approved—RKO would be split into two companies, one to make and distribute movies, one to operate RKO theaters. Both would be owned by the present stockholders (Hughes, with 24% of the outstanding common, is the biggest). Since that seemed like just another name for the same thing, the other members of the Big Five—Paramount, Loew’s Inc. (M-G-M), Warner Bros., 20th Century-Fox — watched hopefully to see whether Hughes could placate the trustbusters that easily.