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THE MOTION PICTURES PATENTS COMPANY 69
tion, the many new producers constantly appearing in the industry, even though they lived to make only a few pictures, had enabled shrewd distributors to profit handsomely by playing one manufacturer against the over-abundance of others. Through its ability to influence, usually to determine, the price to be paid to the producers and the rentals to be charged to exhibitors, the wholesaling branch of the business had acquired the balance of power, and prosperous exchange owners were very unwilling to accede to any conditions that interfered with their freedom. They evaded or defied trust regulations, and many of them were suspected of giving preference whenever possible to manufacturers not licensed by the patents company.
For about a year Jeremiah J. Kennedy of Biograph, president of the trust, tried to bring the recalcitrants into line, and then the patents company decided it must create a distributing company under its own control, the profits to go to its licensed producers. The ten manufacturers organized the "General Film Company," each manufacturer owning one-tenth of the common, or voting stock, and each having equal representation in the board of ten directors. General Film officials permitted the rumor to spread through the industry that it planned to establish its own system of exchanges by purchasing wholesalers in some cities and by opening its own distributing offices in others.
General Film's survey of exchanges was so complete and accurate that some of the rebellious distributors, summoned to conference with trust officials, were startled to have the innermost records of their businesses spread before them. General Film offered to purchase the exchanges it regarded as the best, and about sixty owners accepted the offers. Independent distributors left out of General Film were compelled to look to independent producers for their films, or shut up shop.
The ten thousand or more exhibitors comprising the third branch of the industry did not inspire any deep respect in trust headquarters. The business men, engineers, lawyers, and scientists who were the real rulers of the patents-film combination regarded most of the show-shop keepers as a "rabble" of small retailers