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CHAPTER II THE ISSUES Wlien a few dominating elenients finally achieve substantial control of an industry, they usually proceed to adopt and perfect methods which will insure retention of that control. Such methods commonly lead to protests of unfair advantage, not only from smaller elements within the industry, but in some cases from consumers as well. It is not siu-prising that, as in most instances where conflicts of interest arise, a slogan summarizing the grievances of these parties usually appears. In industrial warfare, the rallying cry frequently becomes the name of some trade practice. Every industry, as a normal consequence to the conditions under wliich it operates, develops its own peculiar trade practices. How- ever, frequent attacks on a practice do not constitute proof that it is in itself vicious. Instead, the diflficulty usually lies in the way the trade practice is employed. A practice, which under other circum- stances might be wholly innocent, may provide a perfect instrument of control when used as a tool in the hands of a dominating element within an industry. The motion picture industry has perhaps developed more than its share of odd trade practices. Many of these arise from the unusual circumstance that the industry operates basically under the copyright laws rather than the laws of purchase and sale. In most industries the manufacturer (producer) sells his product to a wholesaler (dis- tributor) who in turn sells it to a retailer (exhibitor), and the retailer finally places the product in the hands of the consumer. Title to the product in such circumstances has thus changed hands several times during the transit of the goods from the manufacturer to the consumer. In the motion picture industry, on the other hand, the producer makes a negative film from which are reproduced a number of positive prints. The film is protected by copyright, and both this copyright and title to the actual films seldom change hands. Since the producer and distributor are usually a part of the same company, it is immaterial which holds the actual title. The film is rented to the exhibitor who is simultaneously licensed under the copyright privilege to exhibit the film to the public. No physical exchange of goods for money takes place between the exhibitor and the consumer. The film is shown, and the print is returned to the distributor who ships it on to another exhibitor. Each film is thus used many times, crossing and recrossing State lines as it is leased and shipped to one exhibitor after another. Since actual title is never acquired by the exhibitor, the distributor is able under the copyright laws to exercise control over the use of the print by the exhibitor. He is able to determine at what time and to a large extent under what conditions the exhibitor shall show the pictures to his audiences. This contrasts with the retailer in most 286782—41—No. 43 3 * 21