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6 ^> ^> <^> The Motion Picture Industry
permitted to handle films produced by the Motion Picture Patents Company, however, and they in turn as licensed representatives agreed to sell only to such theaters as had licensed projectors. Since at that time all positive films were leased on a flat footage basis, and since any number of positives could be made from one negative and a positive could be shown by any number of theaters, no particular problem of apportionment of film sales among the member companies arose.
This move, though fundamental, did not fully meet the situation. Unlicensed picture producers continued to offer their product on the market. Independent exchanges continued to operate. Both these conditions were made possible by tremendous demands for films on the part of exhibitors. Even the licensed exchanges of the Patents Company could not always be kept under control and not infrequently they resorted, under the lure of profit, to violation of the terms of their agreement. It seemed that the only method by which the situation could be kept in hand was to secure a consolidation of the exchanges. So, in 1910, the General Film Company was organized by the members of the Patents Company for the purpose of distributing its films. The General Film Company was successful, under threat of revocation of license, in buying 57 of the 58 exchanges then operating throughout the country. Thus the control of the "film trust" reached its height.
Independents, however, led by such men as William Fox, who operated the fifty-eighth exchange and who chose to fight rather than sell, and Carl Laemmle at once opened war on the "trust". In consequence, in 1915, the General Film Company was dissolved by order of the Federal courts.
Aside from any legal action, however, there were economic forces which were undermining the combination, forces which were seeking to place the motion picture business definitely on a new basis. Both the public and exhibitors became interested in obtaining a better quality of pictures and not merely in viewing or exhibiting a given