Motion Picture News (May-Jun 1923)

May 12, 1923 2259 Commission Charges Eastman Film Monopoly U. S. Complaint Alleges Conspiracy in Restraint of Competition THE Federal Trade Commission has issued a formal complaint against Eastman Kodak Company, Rochester, N. Y. ; George Eastman, president of the Eastman Kodak Company; Jules E. Brulatour, a distrihutor of films, New York City ; the Allied Laboratories Association, Inc., New York City, and the following members of the association : The Burton Holmes Lectures. Inc., Chicago; The Craftsmen Film Laboratory, Inc., New York City; Kineto Company of America, Inc., New York City; Cromlow Film Laboratories, Inc., New York City: Palisades Film Laboratories, Inc., Palisades. N. J.; Claremont Film Laboratory, Inc., New York City; Film Developing Corporation, New York City; Evans Film Manufacturing Company, Inc., New York City; Republic Laboratories, Inc., New York City; Lyman H. Howe Film Company. Wilkes-Barre, Pa.: Rex Laboratory, Inc., Cdiffside, N. J.; Tremont Film Laboratories, Inc.. New York City ; Mark Diutenfass, Hudson Heights, N. J., and the Erbograph Company, New York City. Thirty days are allowed for the filing of an answer to the complaint; thereafter the case wdl come on for trial. The complaint contains averment of a conspiracy among these respondents, as result of which it is charged the Eastman Company has acquired a virtual monopoly in the manufacture and sale of cinematograph film in the United States; that competition in the manufacture and sale of prints of motion picture film has been hindered and in some instances eliminated, and that the prices of positive prints sold to producers of motion pictures throughout the United States has been fixed and standardized. Eastman Kodak Company, the complaint states, is the largest manufacturer of cinematograph film in the world, and up to March. 1920, manufactured and sold approximately 94 per cent, of all the cinematograph film used in the United States and manufactured and sold approximately 96 per cent, of all tin cinematograph film produced in the United States. Between March, 1920, and September, 1921, due to competition by American importers of cinematograph film manufactured in foreign countries, the sales by the Eastman Company decreased to approximately 81 per cent, of the total sales in the United States. Allied Laboratories Association, Inc., the complaint states, is a non-trading corporation, organized under the laws of New York, its membership being limited to persons, firms or corporations engaged in manufacturing and selling "prints" of motion pictures. Details of the practices challenged in the complaint which form the basis of the commission's charge that the respondents are using unfair methods of competition, in violation of the Federal Trade Commission Act, may be summarized as follows : It is charged that the Eastman Company and its president, George Eastman, during 1919 induced the respondent Jules E. Brulatour to construct two manufacturing laboratories for manufacturing positive prints, one known as the G. M. Laboratories, Long Island Citv, and the other known as the San-Jacq Laboratories, at Ft. Lee, N. J. These two Report of Triangle Shows Prosperity HE TRIANGLE FILM CORPORATION has issued the following statement : " Since issuing our statement as of March 31, 1923, a number of our stockholders have requested some details relative to what has been accomplished by the present executives since coming into office early in 1918, at which time there was an indebtedness of $2,680,000. " As a result of the operation since January of 1918 all of the indebtedness has been paid and all of the securities released from pledge. Federal tax assessments in excess of $150,000 and applicable to the period prior to 1918 have also been paid. "January of 1919 Triangle started reissuing in their original form some of the old pictures, and has continued this plan up to the present time. During this period (January, 1919 to March, 1923), Triangle has received from these reissues approximately $1,000,000. " With the exception of the possible liabilities indicated in the footnote in our statement of March 31st, the Triangle Film Corporation has no current liabilities. In addition to this the stock liability of the corporation has been reduced by approximately 257.540 shares." laboratories, together with a third laboratory known as Paragon, Inc., Ft. Lee, N. J., were then operated by respondent Brulatour at the direction of the Eastman Company as separate and distinct enterprises, without disclosing their true ownership. In the operation of these laboratories respondent Brulatour, it is charged, supplied to various producers of motion pictures positive prints at prices far below those at which competitive manufacturing laboratories could supply such prints. In supplying competitors of the Eastman Company with cinematograph film, it is charged that the Eastman Company caused the respondent Brulatour to delay deliveries of film, and in some instances to shut off the supply of these competing manufacturing laboratories. It is also charged that the Eastman Company caused respondent Brulatour to discriminate as between those laboratories who confined their purchases to the Eastman Company and those laboratories which purchase film of other manufacturers. This was done by extending to the customers of the Eastman Company long terms of credit, which was denied to the others. The purpose, it is alleged, was to coerce the various competing laboratories not controlled by the respondents into confining their purchases to cinematograph film manufactured by Eastman. Subsequently, in 1921, it is charged the Eastman Company caused the three laboratories mentioned above to be transferred and assigned to the Eastman Company, and immediately thereafter publicly announced to the trade the purchase of these laboratories, which it already owned, and that it intended to operate same. This was done, it is alleged, for the purpose of coercing competing manufacturing laboratories to refrain from making further purchases of cinematograph film manufactured by others than the Eastman Company. The threat by Eastman to operate the three manufacturing laboratories above named, it is charged, induced and coerced the respondent Allied Laboratories Association, Inc., and its members to join with Eastman and BrulatOUI in the conspiracy, with the result that in September, 1921, an agreement was reached whereby the Eastman Company agreed to close the three manufacturing laboratories in consideration of which the association members agreed to confine their purchases of cinematograph film to film manufactured in the United States, and to refuse to purchase any cinematograph film from American importers of foreign made film. It was understood, the complaint recites, that the Eastman Company would keep its three manufacturing laboratories in working order and would re-open and operate such laboratories in competition with the Association members should any of the members again purchase or use in their plants cinematograph films imported from foreign countries. By reason of this agreement, the complaint states, the Association and its members have confined their purchases of cinematograph film to film manufactured by the Eastman Company and have exploited the fact that no other film is used in their laboratories. A further charge is made that various members of the Association have falsely announced to the trade from time to time that cinematograph film produced by competitors of the Eastman Company could not be used to good advantage. The further statement is made in the complaint that members of the Association have consistently sought to coerce outside manufacturing laboratories to become members of the Association and to agree to purchase cinematograph film from the Eastman Company and to refuse to purchase from the Eastman Company's competitors. Though its vice-president, James S. Havens, the Eastman Kodal Company issued a brief statement answering the charges filed against the company. In it he said that his company was desirous of lending every cooperation to the Trade Commission and of its readiness to comply with any directions issued in the matter. Mrs. Wallace Reid to Attend Anti-Drug Parley A coast dispatch advises that Mrs. Dorothy Davenport Reid, accompanied by Adele Rogers St. Johns, left Los Angeles on Saturday, April 28, for Washington, D. C, to attend the International Anti-Narcotic Con ference, which will be held in the national capital from May 2 to May 4. The last scenes for Mrs. Reid's picturization of her anti-drug subject were completed prior to her departure. As announced elsewhere, this picture, entitled "Human Wreckage," has been acquired by F. B. O. for distribution.