Memorandum for the the Motion Picture Patents Company and the General Film Company concerning the investigation of their business by the Department of Justice / submitted by M.B. Philip and Francis T. Homer. (1913)

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ber of running feet of such picture film is above a certain amount; and ?. The share of the division of the 24/t of the gross exhibitors' roypl-ti*s dependent on the proportion of each licensee's output to tlie output 0^ all the licensees. Although under peragraph 18 of the manufacturers license the licensee could lease directly to exhibitors for use in pro jectin g machines licensed by the Patents Company, it turried out from previous experience that it was not practicable t o do this, since each exl.ibitor would have to get its supply from the various licensees, and as motion pictures of particular subjects are only exhibited in any one exhibiting place for c. few days, the cost of procurng the large stock of them that was necessary, was prohibitive. ;Vhnt were known as excharges therefore came into being, which leased a large 3tock of motion pictures from the various licenoees and were thus able to sulv-^case notion pictures to different exhibitors and for various timoa , triJS keepint', them in circulation. The Fatonts Company granted to « nui'-ber o r persons who had organized such exchanges the right "to lease licensed notion pictures from the licensed ratuiuf acturers and importers and to sut-^-ease said licensed motion pictures for use only on projecting machines licensed by t he licensor under letters patent owned by i^. ." -82