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47o HARVARD BUSINESS REPORTS
attitude of such a union toward American product, the development of reciprocity in the distribution of European films and jointproduction contracts would hamper American film distribution.
The establishment of a "Film Europe/' however, had met with many obstacles. No definite agreements had been reached. The second meeting of an international group was not attended by representatives of Great Britain. The American industry received an invitation to participate after the date had been set for the meeting.
The officials of the Motion Picture Producers and Distributors of America, Incorporated, were of the opinion that the American industry had little to fear from the formation of a cartel in the European industry, since the American interests controlled a very large share of the European market. Furthermore, the relatively small size of the European companies in the industry with the attendant lack of executives with a capacity in and knowledge of international relations made such a development improbable.
A study of recent developments in the European industry indicated that an amalgamation of interests would more likely take the form of an increased number of corporate combinations embracing activities in two or more countries. German producers, aware of the necessity for a wider market for their relatively large output of feature films, had endeavored by means of interstate agreements to create export markets in Austria, Hungary, Czechoslovakia, and Italy. At least 10 such agreements were made in 1928. French producers, in a lesser degree, had also turned to such agreements as an outlet for their product. Two agreements of this sort were reported in 1928 :14 Cineromans (French) with British International, and with Terra (German); Franco-Film (French) with Gainsborough (British) and Deutsches Lichtspiel Syndicat (German).
Such interstate agreements were considered by the association to be only temporary in character, because in most cases they tended to favor the company in the stronger position at the time. Lacking in any tie-up of exhibition outlets, as a rule, they provided, at the most, merely assurance of distribution and control of credit. Many agreements had not been extended beyond the initial
14 Bureau of Foreign and Domestic Commerce, Trade Information Bulletin No. 617, 1929.