Investigation of concentration of economic power; monograph no. 1[-43] (1940)

Record Details:

Something wrong or inaccurate about this page? Let us Know!

Thanks for helping us continually improve the quality of the Lantern search engine for all of our users! We have millions of scanned pages, so user reports are incredibly helpful for us to identify places where we can improve and update the metadata.

Please describe the issue below, and click "Submit" to send your comments to our team! If you'd prefer, you can also send us an email to mhdl@commarts.wisc.edu with your comments.




We use Optical Character Recognition (OCR) during our scanning and processing workflow to make the content of each page searchable. You can view the automatically generated text below as well as copy and paste individual pieces of text to quote in your own work.

Text recognition is never 100% accurate. Many parts of the scanned page may not be reflected in the OCR text output, including: images, page layout, certain fonts or handwriting.

4 CONCENTRATION OF ECONOMIC POWER as their novelty was exhausted, so exhibitors traded films with each other. It was soon realized that the owner of a stock of films could make a profit by renting a single print to a nurhber of exhibitors in succession, -thus relieving these exhibitors from the necessity of making a cash investment in films. Consequently, the original method of outright sale of films to exhibitors was replaced by a licensing system. Under this system, title to the film remained with exchange men, and each film was licensed to various exhibitors until the print was no longer usable. This method of film distribution is still in use today. In 1908, mainly to escape the effects of a patent war conducted chiefly by the Edison companies which held basic camera and projec- tion equipment patents, the 10 leaamg interests in the industry organized the first trust—the Motion Picture Patents Co.* All patent interests and rights were pooled, and the cooperating companies were licensed to manufacture and lease motion pictures. The East- man Kodak Co. cooperated by refusing to supply raw film to non- licensed manufacturers. Films produced by the "patents pool" were handled by licensed exchange men who agreed to sell only to theaters with licensed projectors, and the exliibitors were required to pay for the right to use projectors in addition to film rentals. Through this system of licensing, the pool attempted control of the entire industry. Resentment from those outside the "trust" took the form of bootlegging of films and projectors; protective organizations were formed and these organizations in turn prospered. Even licensed exchanges violated their contracts. To clieck this adverse trend, the patents pool in 1910 organized 57 of the 58 exchanges then in existence into the General Film Co. to distribute the films of the 10 producers on a national scale. These licensed exchanges agi^eed to buy only "trust" pictures. Despite the attempt to monopolize production and control distri- bution, the independent companies multiplied, flourished, and con- tinued making pictures. By 1912 dozens of new producers and dis- tributors, led by William Fox, operator of the fifty-eighth exchange, were offering the trust keen opposition. In this year a lawsuit was instituted against the trust as an imlawful conspiracy in restraint of trade. With antitrust sentiment sweeping the country, the General Film Co. was dissolved by the Federal courts in 1915. In 1917, the United States Supreme Court held, after years of hearings, that the patents company could not enforce exclusive use of licensed film on patented projectors in theaters, and the trust was declared legally dead. Concomitant with the fight over patent rights was the controversy between short and the newly introduced feature-length films. The trust, interested primarily in quick and inexpensive production, greeted feature-length films with distaste and refused to distribute them. The independent companies, encouraged bj^ the trust's reactionary policy, produced full-length features and sold exhibition rights to individual distributors each representing one or more States. These exchange men became known as "States' rights distributors." They were so successful that in 1914 a number of them joined with a * Edison, Biogranli, VitaEraph, Essanay, Selig, Lubin, and Kalem, domestic manufacturers; Melies and Pathe, French oompauies; and George Kleine. distributor.