Cinema News and Property Gazette (1913)

April j, 1913. THE CINEMA. 21 THOUGHTS THAT MAKE US PAUSE AND PONDER.^NO. 4. THE AMERICAN COMBINE— THE TRADE WAR! By SAMUEL HARRIS. UNREST HERE. In view of the main discussions taking place at the present time regarding the agreement about t< be entered into between manufacturers and renters, it may be ol interest to our readers to know the history of what has taken place in America during the last four or five years, and I have therefore gathered the following facts regarding what is cornnv nlj termed the American Trust or Combine, composed of, we understand, the Patents Co. and General Film Co.; and the following are, roughly, the facts of the case, as near a> I can ascertain them, since the commencement dow n to the present time : About five years ago a company composed of manufacturers of films and projecting machines came to a mutual understanding for the purpose of as they stated protecting their patent rights. They then lore put a tax ol 8s. per week on each exhibitor for the use of projecting machines, all of which, it is contended, if not manufactured by them, infringe their patents. This company was known as the Motion Picture Patents Co. Although the machines had been sold to the exhibitors before this combination was formed, the company claimed a kind of ownership to the machines, and they prohibited exhibitors from using the machines unless they used films supplied by another company, known as the General Film Co., which at that period was composed of the leading film manufacturers of America and a number ol the chief European film manufacturers. It was presumed that the members of the General Film Co. were also the owners and members of the Patents Co. Cnder these circumstances, it will be seen that they had a very large control over the exhibitors, as they could not run films in their theatres unless they accepted the Patents Co.'s proposition of company's ownership of machines, and run General Film Co.'s films, now generally described as the Trust films. The General Film Co. had by this time bought up the principal renters throughout the United States, and most of the exhibitors could not secure films unless they accepted the terms, together with the films, of the Genera] Film Co. About this time a number of keen business mm. outside the combine. s.,ine the possibility of large financial returns, came over to Europe, bought what available films were on the European market, and started a number of independent agencies. At that period, however, the best of the European manufacturers output had been sold to the General Film Co.. or such manufacturers were members of the General Film Co. themselves, and thus the class of films that the independents bough) were considered to be of inferior makes. The exhibitors, however, were in such a position that tor the time being those who had had their licences for the use of their projectors cancelled, or had not signed the General Film Co.'s agreement, had to be satisfied with these second-rate films. These men, however, who are now designated the Independent Manufacturers, at once commenced building plant and manufacturing films for theni selves. Since thai time two other groups of independent manufacturers have started, and these three -roups of independents have an output which compares very favourably with that of the General Film or Patents Co. The independent companies are known as the Universal Film Manufacturing Co., the Mutual Film Co-operation, and the Film Supply Co. of America. Th( now, in addition, a number of other manufacturers who release from one to four films per month, who are also classed as indep dents. At the present time the business don by the independents is about 50 per cent, of the entire business ol the United Mates, and although the General Film Co. -still collect (pending the result of the action) the 8s. per week for the use of the machines, it has, I believe, been held they cannot legally prevent exhibitors from showing, or projecting, films manufactured by the independents through the machines. 'I'he theatres which run what are described as Trust films are prohibited from running any of the independent companies' films, and if they do run such, their licence is cancelled, which, of course, drives the exhibitor into the independent companies' ranks. It must, however, be mentioned that the prices of films, whether obtained from the so-called Trust or the Independents, do not vary in any material degree, so at the moment it is a matter of indifference to the exhibitor whether he deals through one or the other. At the present time the only net benefit that accrues to the Trust is that they receive 8s. tier week for the use of tin projectors, which, they contend, thev are quite right in obtaining, because of their ownership of certain patents, which, the\ allege, are being infringed by the manufacturers of all machines, whatever make they may be. It is rather interesting to note that different patents an controlled by different manufacturers. Each one of thi who originally comprised the Patents Co., owns one or mi of the different patents utilised in the manufacture of the projecting machines, and they therefore each receive a proportion of tlie 8s. per week as their patent rights under the laws of America. They also contend that no other machine can possibly be manufactured without its being an infring inent in some way or the other upon one or more of their patents; this, of course, is \.r\ wide indeed. About a year ago. in the United States Courts, an action was brought against both the Patents C . and the General Film Co. for an illegal combination in " restraint of trade," the collection of evidence has been going on for the past six months by the Commission appointed by the Government. This, so far. appears to be understood to indicate that within a short space of time both the Patents Co. and the General Film Co. will be dissolved, and their attached. This procedure of taking evidence in America is as follows : A Commission was appointed and sent round to the different cities and towns, in each of which a court