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18 ^ ^ ^> The Motion Picture Industry
interested in theater control. By August 31, 1921, this company had acquired 303 theaters, 213 of which were included in the holdings of Southern Enterprises, Incorporated, a concern which had been organized on April 30, 1919, by the Famous Players-Lasky Corporation. Because of the strong position of the First National franchise holders in the South, Famous Players had experienced some difficulty in disposing of its product at rentals which it considered fair. It was for that reason that Southern Enterprises, Incorporated, was organized. The company faced a similar situation in New England when a merger of the Gray, Gordon, and Black circuits was considered during 1919. Eventually an agreement was made with Black, whereby he was to manage a new corporation which would include his theater holdings. Later, Famous Players-Lasky took over full control of the company as New England Theaters, Incorporated.
During 1919 and 1920, the Goldwyn Pictures Corporation, which had been organized in 1916, experienced difficulty in securing first-run engagements for its pictures. By the fall of 1921, a half interest in from 25 to 30 theaters had been acquired for the dual purpose of securing representation and exploitation for the company's films. In 1919, Loew's, Incorporated, which owned a chain of 70 important vaudeville and motion picture theaters, bought out the Metro Pictures Corporation, which had been organized in 1915. This merger provided an assured outlet for Metro pictures in first-run theaters which had not previously been possible.
Following this early rush to obtain theater control, there came a reaction. Numerous instances can be cited. Thus, the Famous Players-Lasky Corporation on September 1, 1924, wholly or partially controlled only 181 theaters, a decrease of 122 houses since 1922. First National experienced a similar decline. In the fall of 1921, there were 3,400 First National subfranchise holders. Because of the necessity of taking all First National productions, many theater owners became dissatisfied and canceled their agreements, with the