In the District Court of the United States, for the Eastern District of Pennsylvania, the United States of America, petitioner, vs. Motion Picture Patents Company, et al., defendants (1914)

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2516 Petitioner's Exhibit No. 263. abolish the system of standing orders for new subjects. I have long recognized that to insist upon the purchase of all new subjects, long before they are seen, or even manufactured, is an injustice to the rental exchanges, and an imposition upon the exhibitors who are compelled to use undesirable films, forming a material percentage of the total output, frequently against their will. In the early days of the exhibiting business as it now exists this could not be considered unreasonable, as the supply of subjects was limited, and every film was usable that was not obscene, extremely vulgar, or highly sensational. Censorship Policy Followed. "We have always followed the policy of censorship at the root, and have never imported films that could be considered objectionable from any view-point. This is due to our system of inspecting samples of every subject before our stock was shipped from Europe. "The standing order system is oppressive also because it compels the rental exchange to accept an indefinite quantity of films, subject to great variations from week to week. No exchange, under this rule, can state in advance the total sum of its film bills, — a condition which would not be tolerated in any other line of trade. "In harmony with this position, we have decided upon a uniform price for films to all rental exchanges in good standing, irrespective of size or quantity purchased. A large exchange will have no advantage, because of heavier purchases, over the small concern. "In view of the fact that we charge a selling price for films, we think it but just that the buyer own the goods that he has paid for, without restriction, and do not attach any conditions calling for the return of our films at the expiration of a stated period. Purchasers May Rent Films. "Purchasers of our films are at liberty to rent them to others, without restrictions as to rental prices, or manner of use. "A movement has originated in Chicago among owners of nickelodions wliich bids fair to spread to all large cities of the United states. These exhibitors have formed an