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1704 Albert E. Smith, Direct Examination.
but I am getting away from the point I Avas trying to make. They would go into a town and make arrangements with the officials of that town to give a carnival in the streets which would draw into that town all the people from the outlying country, and the people would come in to see the various shows given in tents, along, probably, the main street of that town or city, and come in to see the shows, and they would spend money in the stores, and so the town prospered, and, I presume, because they prospered, they made it interesting for the man who brought them to the towns and cities. Never having been interested in a street carnival, I cannot tell you about the inside workings of it. But, to get back to the exchange. As these theatres started out or opened up in the small towns throughout the country, these street carnivals were thrown out of business, and the men who were in charge of them and who worked with them, being obliged to make a livelihood, they looked around and they saw this new art spring into prominence. They started it very quickly, and I presume they must have been men who could make up their minds very quickly, and they would then open up exchanges; they watched other men jump into the same field, and so they jumped in with a very few dollars, or a very few hundred dollars, as the case may be, and there was a time over night, so to speak, that we had scores of exchanges throughout the United States who commenced to buy films and lease them to little store shows which sprung up even more quickly than the exchanges sprung up.
Now, we come back to the producer. These orders commenced to come in for the films and film stories, and these producers would turn out the positive prints and sell them to these exchanges, and the exchanges in turn leased them to the theatres. Soon there commenced to be tremendous competition between the theatres. Prior to that time, there had been no set day or set date for releasing the film. When the Vitagraph Company produced a story, we advertised it, and sold it as soon as we could get it on the market, and between 1900 and 1904, and 1905, the sales from any one story were liable to stretch over a period of two or three years. You might sell a lot of copies today, and you would sell some from that story the next month, and so on, the month after that, and until the next year. You were continually selling from them. But,