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468 HARVARD BUSINESS REPORTS
and Distributors of America, Incorporated, that the French government would never grant a subsidy to the native motion picture industry. The governments of European countries as a rule were financially unable to provide a subsidy and were unwilling to do for one industry what could not be done for other industries.
The willingness of the French producer to accept a plan that did not involve reciprocal distribution of French films in the United States indicated the importance to the French producer of assistance in raising capital regardless of the source, and a recognition of the difficulties in the production of feature pictures that could compete effectively with American product in the United States. Any future plan of protection, therefore, would be satisfactory to the French producer in the degree to which it provided him with capital through the sale of permits and more facile distribution in the home market. The officials of the Motion Picture Producers and Distributors of America, Incorporated, were of the opinion that the failure of certain producing interests in France to obtain capital was the result of their unsatisfactory ventures in the past rather than any shortage of capital for worth while productions.
During the 1929 negotiations the interests of the French distributors and exhibitors were in conflict. Distributors were interested mainly in protection through limitation of the number of films imported, thus restricting the competition with domestic product. The exhibitor, on the other hand, required American product, not only to supply him with enough films to meet program needs but also, because of the popularity of American films, to satisfy public demand. The strength of the exhibitor's position was apparent in its influence toward the settlement of the dispute over 1929 restrictions.
The diverse interests of the French government and the individual activities in the industry constituted a weakness in negotiation which would be partially overcome by further integration, both vertically and horizontally, in the industry, providing a more attractive investment for capital, the weeding out of small "mushroom" producers and distributors, and a common interest in the exploitation of native product and in the welfare of the industry. Under such conditions, less protection would be required and more power would exist to obtain the protection