Days of future past

Today, tax credits which encourage Hollywood productions to film in New Zealand are highly controversial. Defenders of the scheme stress the benefits to the local film industry. Detractors claim a rort.

In 1930, the issue was not so much production as distribution. Mindful of the increased revenue generated by the still novel ‘‘talking pictures’’, the government of the day proposed a taxation rate of 25 per cent on all net profits on ‘‘foreign-made’’ films.

This tax was specifically targeted at American movies.

British films were not considered ‘‘foreign’’ and were therefore exempt.

There was a swift response from Hollywood.

A boycott of New Zealand was threatened, though exactly by whom and with what authority was initially unclear.

Some exhibitors pointed to existing contracts, arguing that withdrawal of product would be illegal.

Others, mindful of the vast investment in sound equipment, foretold financial ruin if the tax were to be enforced.

Both the government and the popular press took a defiant line.

Asked in the House about the boycott, Acting Prime Minister EA Ransom claimed ignorance, but declared that his administration ‘‘... had no intention of being coerced by any corporation’’. With typical understatement, headlines in the the NZ Truth proclaimed ‘‘Uncle Sam Wields a Bludgeon’’, that the ‘‘Alleged Film Boycott is [an] Attempt at Intimidation’’ and the ‘‘Government Must Not Stand for American Dictation’’.

Sir Victor Williams, of the Motion Picture Distributors of Australia, arrived from Sydney and claimed that the tax was akin to a ‘‘lock-out’’.

A committee of the Wellington Chamber of Commerce resolved that the boycott was ‘‘... an attempt by a powerful commercial organisation to challenge and undermine the authority of Parliament of this British Dominion’’.

Whatever the rhetoric, negotiations took place behind closed doors.

Whilst refusing to back down on the new taxation, the government compromised by doing away with an earlier regime whereby films were taxed according to their length, not their profits.

Talk of boycotts subsided, leading to speculation that it was never a serious proposition in the first place or even a bluff to save the reputation of Sir Victor, who had supposedly made promises to his American masters.