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MOTION PICTURE COMMISSION. 61 Mr. TowKEK. Is there anything in the nature of a trust, such as the public commonly denominates it, in these motion pictures? Dr. Carter. Well, I think you may call the patents company the motion-picture trust, but I do not know exactly what you mean. Mr. ToAVNER. That is only a preliminary question. Dr. Carter. Well, there is such a combination. Mr. Towner. Now. for instance, there is an interior city in my State of 10,000 inhabitants. To whom does the owner of on(> of those moving-picture theaters apply for his films? Dr. Carter. To the film excliange. Mr. Towner. And where is the film exchange? Dr. Carter. It is a local filn; exchange which may be a city ex- change or a district or State exchange. Then, of course, if he wants special-feature films he will go to the national film exchange. Mr. Towner. Now, the film exchanges have certain plays, as we call them, listed? Dr. Carter. Yes. Mr. Towner. And he selects what he wants from those listed for exhibition ? Dr. Carter. Yes, sir. Mr. Towner. And they are sent to him? Dr. Carter. Yes, sir. Mr. Towner. Now, these film exchanges will take only those that have been approved by your committee; is that correct? Dr. Carter. Well, the General Film Exchange will take them, be- cause it is controlled by this combination that I spoke of, but there are independent film companies which will take the other stuff—that is, the 2 per cent. Mr. ToAVNER. You mean they will take both kinds? Dr. Carter. Well, the General Film Exchange does not want to allow it, and they try to make them take all of their product or none. Mr. Towner. We have a certain indefinite and perhaps not defined knowledge of a Theater Trust. That is, we understand that certain theaters must make arrangements that a certain line of plays that are controlled by a certain class of people will be run by them ex- clusively. Now, then, is there anything analogous to that situation in the motion-picture business? Dr. Carter. Not that I know it. Some of the film exchanges insist that all of their material must be taken or none at all, but it really does not work out. So that practically there is a condition of free- dom, and they can buy whatever they please and wherever they please, and they are not controlled. Mr. Towner. Now, upon that fact or basis of facts do you say that 98 per cent of all the films that are used in the country are censored by your body? Dr. Carter. Well, we have four office secretaries, and they give all their time to this work. All the manufacturing concerns who are in this arrangement must send their reports to them, and necessarily in the course of our business we learn how many there are outside of our arrangement from their own reports of independents. Mr. Powers. Do these independents send their stuff to you, too? Dr. Cari-er. No, sir. The Chairman. That is the 2 per cent?