On this date in 1939, North Dakotans were trying to sort out the sudden brouhaha in the state legislature over the repeal of a movie bill.

Two years earlier, the Non-partisan League was in power and was eager to back Pres. Franklin Roosevelt’s crusade to bust up corporate monopolies. W. J. Godwin was the majority leader in the state legislature at the time, and one day he was approached by an attorney, Alvin Strutz, who asked him to introduce a bill to ban any movie producer from owning – or even having shares in – any North Dakota movie theater. He had no reason to say no and agreed.

Hollywood film producers definitely took notice when the bill was introduced. North Dakota historian Gerald Newborg explains, “There is a parallel with much of the current controversy regarding ownership of media outlets. For example, recording studios and radio stations – whose artists will get played? In the ‘30s – pre-TV – the importance and power of movies and motion picture companies was near its peak. Independent theater operators would possibly be at a disadvantage in getting the best films or newest films if their competition was a theater owned and operated by a motion picture company or a motion picture distributor.”

The “theater divorcement act,” as some called it, proceeded through the house with an unusual number of out-of-state attorneys showing up to express their views. Local theater operators were predictably on one side or the other, depending on who their bosses were. For example, Rep. Eddie Kraus managed the Fargo Theater, which was owned by Paramount. The company depended on Kraus to squash the bill; when it passed anyway, Paramount cut his salary.

Two years later, Eddie Kraus was still having trouble with his employers – in fact, Paramount had challenged the bill so strenuously, it was now before the U.S. Supreme Court. Kraus had been well-liked by nearly everybody when he served in the house, and many in the legislature decided to go to bat for him and get the law repealed.
The bill moved quickly through the legislature. The Non-partisan League caucus discussed it and decided to approve it, and it passed the next day. The senate quickly approved it, as well. But now, the Leaguers had a sudden change of heart. Rep. R. R. Scholl asked for a motion to have the governor send the bill back to the house unsigned. He said they believed legislators had been bribed and“certain people” were set to get a “big, fat retainer” if the bill was repealed.

Scholl said, “You people have heard rumors $35,000 was deposited in a Fargo bank, which later found its way to Bismarck, and I say this bill was railroaded. Why did the senate suspend rules to push this bill through? If the bill has any bearing on the whole U.S. movie industry, I think this house should have known it before we voted.” The motion didn’t carry.

Ten days later, Gov. Moses signed the repeal, saying, “not a single legislator has come to me with any evidence of anything that would indicate that I should (veto it).” He said the law had already cost the state at least $2,000 and could easily cost several thousand more, saying there was “no apparent benefit to this state. I can see no good reason to continue expenditures along this line.”

Meanwhile, “G-Men” began investigating. U.S. Dist. Attorney Lanier said, “The investigation that has been and is now being made is not and never has been of the legislature, as some wise wags would want the public to believe. This investigation was and is as to alleged activities of major movie producers to ascertain what methods and influences, if any, they are using to defeat regulation under the anti-trust laws and fair trade statutes.”

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