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William EL Swanson, Direct Examination. 301
Q. Please state to the best of your recollection what you 1 said to them, and what they said to you?
Mr. Caldwell: Objected to as incompetent, immaterial and irrelevant.
A. I stated that, as an experienced exchange man, we thought it was unfair to tie us up with a contract that was so obviously one-sided, leaving the matter of cancellation entirely in their hands, and allowing the jeopardizing of our business solely to their judgment, and requested that they insert in that clause, that no contract would be cancelled unless for cause. Mr. Dyer replied to that, that there would not be a single word of any character changed in the contract. It would remain just as it was, and we could take it or leave it. I stated to him then that if the entire body objected to it, they would necessarily have to stop making film, and they would not buy their film, and lie said lie did not think we had nerve enough to do that.
Q. Were there any manufacturers of film in the country at that time who had not joined the Patents Company? A. There was no source of film supply of any kind except the members of Motion Picture Patents Company.
Q. What was said, if anything, about the weekly royalty for exhibitors? A. Mr. Dyer stated that the exchanges would be compelled to collect this royalty, and send it in to the Patents Company's offices, and that they considered reducing it from $3.00 or $4.00, whichever the amount is — I have forgotten at this time — to $2.00 a week. And I objected to that, and stated that inasmuch as I thought it amounted to over a million dollars a year, that as little trouble as they could go to would be doing their own collecting. We stood on (hat matter for over a half an hour, and argued the question, and 4 Mr. Dyer insisted along with Mr. Marvin that the exchange men collect the money for the Patents Company, and send it in to the Patents Company, but they did say, however, that they would consider the matter of doing their own collecting, and would give us the result of their opinion at a later date. Which they never did, however.
Q. Were the exchanges opposed to the doing of the collecting for the Patents Company? A. On the ground that competition would in the very near future bring about the condition where the exchanges would be paying the royalty in