We use Optical Character Recognition (OCR) during our scanning and processing workflow to make the content of each page searchable. You can view the automatically generated text below as well as copy and paste individual pieces of text to quote in your own work.
Text recognition is never 100% accurate. Many parts of the scanned page may not be reflected in the OCR text output, including: images, page layout, certain fonts or handwriting.
FIRST NATIONAL EXHIBITORS' CIRCUIT 21
These percentages were also used in determining the amount of the company's capital stock to be subscribed by each of the exchanges. Their primary use, however, was to fix the amount to be paid by each exchange for the pictures released by the company.
All revenue earned by a picture over and above the amount paid to the company was the property of the exchange save for a small payment made to the company for the upkeep of the head office. This payment was fixed at 5% of the gross revenue earned by the sale of the pictures for exhibition. This gross revenue was to include not only the revenue earned by sale to outside exhibitors, but also the amounts paid by the members to themselves as exchanges for the use of the pictures in their own theaters. There was no means available to the company of checking the amount it should receive. The amount received, however, proved sufficient to cover the cost of operation. Had the payments been insufficient, the percentage would have been increased. If they had been too large, the percentage would have been decreased or a dividend declared by the company; in this manner, the overpayment would have been returned to the members. It was not anticipated that the company, as such, would operate at a profit.
From 1917 to 1920, First National Exhibitors' Circuit, Incorporated, operated along these lines to the profit of the members, who used the pictures for exhibition in their own theaters and derived additional income by selling the pictures to other exhibitors through their exchanges. As the business developed, the sale of pictures to other exhibitors in many instances became of more importance and more profit to the members than the operation of their own theaters.
Although the operations of the company proved profitable, certain problems arose between 191 7 and 1919 which required definite steps for the protection and improvement of the company's position. Ever since its formation certain producing and distributing companies had made continuous efforts to break up the company or to obtain control of it by purchasing the stock and assuming the franchises of some of the franchise holders. They apparently believed that its combination of distribution and exhibition was harmful to them. Definite proposals of an attractive nature were made to several of the franchise holders.