Motion Picture News (Jan-Feb 1916)

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January 29, 1916. MOTION PICTURE NEWS 507 Rumors of General's Impending Dissolution Scouted Approaching Announcement of Decree in Government Suit Against Motion Picture Patents Company Leads to Crop of Rumors, Due to Misapprehension of Judge Dickinson's Ruling — Case of Standard Oil Cited to Show That Financial Loss Does Not Always Follow Federal Action in Courts RUMORS regarding the General Film Company, which have been in industrious circulation this week have been absolutely discredited in the best informed circles in filmdom. The rumors are due to the fact that a decree is about to be filed in the Government suit relating to the Motion Picture Patents Company. It has been stated by gossips that the General Film Company was to be dissolved, that it was to go voluntarily out of existence, that it was to be absorbed by other companies. While no one is able at the present time to forecast authentically the terms of the decree which will be filed in the Government suit, there are some self-evident truths which have been forgotten entirely by the scandal-mongers. The principal of these is the self-evident fact that the General Film Company is simply one of the defendants in a group of defendants in the Motion Picture Patents case. Judge Dickinson's decision held that the co-defendants had been guilty of restraining trade; he did not object to the corporate existence of any one of them nor was this matter ever in question. The Government based its findings purely upon the relations between these co-defendants. In stating the accusation, Judge Dickinson said : "The prayer is that a stop be put, by the power of the law, to the practises charged to be illegal." Dissolution Question Not Raised He raised no question of the dissolution of any of the defendant corporations. In his formal finding, Judge Dickinson said : "We conclude with the formal finding, in the language of the Act of Congress, that the contracts, enumerated in the petition, and the combination there described, was a conspiracy in restraint of trade or commerce among the several states, and with foreign nations, and were and are illegal, and that the defendants and each of them (with the exception next noted) have attempted to monopolize and have monopolized, and have combined and conspired among themselves and with each other, to monopolize, a part of the trade or commerce among the several states, and with foreign nations, consisting of the trade in films, cameras, projecting machines and other accessories of the motion picture businesses charged in the petition of complaint filed." The exception referred to was the Melies Manufacturing Company. Judge Dickinson's Ruling Judge Dickinson in the final paragraph makes the matter entirely clear. He says "the conclusion is that the probationer is entitled to the relief prayed, so far as indicated by this opinion, and a decree, to effectuate the findings made, may be submitted. The relief prayed, it will be remembered, was "that a stop be put by the power of the law to the practises charged to be illegal." Consequently, as in the case of the Stand and Oil Company of New Jersey, there was and is no question of the dissolution of any of the defendant companies. So in spite of all rumors, the General Film Company will not be dissolved. On the contrary it will be in a position under the new policies of co-operation with the exhibitor to serve the exhibitor in the most efficient way. Men in quarters of filmdom, which heretofore have proved the most authoritative, scoff at the idea that the General Film Company will be dissolved. They assert most positively that the outcome of the Patents case could in no way alter the relation of the General Film Company with the exhibitors and with the manufacturers. How General Film Operates The General, tfiey point out, is an organization of exchanges precisely as other distributing agencies are organizations of exchanges. The General company, like its rivals, procures films from manufacturers and like other organizations rents them through exchanges to exhibitors. Its business is conducted lawfully. For the proof of their assertion that no decision in the Patents case will materially affect the General Film Company, these men instance three sets of facts about which there can be no dispute : 1. Property belonging lawfully to stockholders of a corporation cannot be taken from the stockholders. 2. As the outcome of the Government prosecution of the Standard Oil Company none of its subsidiary companies were put out of existence. 3. In the Standard Oil case, as in the Patents case, the separate entities (separate corporations) were defendants. The "Government did not attempt to end the life of any of these, but did object to the relation between them. The General Film Company is simply one of the defendants in a group of defendants. Standard Oil Case Cited A peep into the Standard Oil case puts an end at once, it is asserted in the best informed film circles, to any such idle supposition as that the General Film Company will go out of existence. In the Standard Oil suit, the Government brought its proceedings against the Standard Oil Company of New Jersey, the parent company, and its thirty-four subsidiaries; that is, the thirty-four companies whose stock was held by tinStandard Oil Company of New Jersey. After the Standard Oil Company had lost the case, and the decree was finally filed, it was directed that the stock of the subsidiaries held by the New Jersey company be distributed to the stockholders of the New Jersey company in proportion to their holdings. There were six thousand and five stockholders. The distribution made necessary the use of fractions, the numerators of these fractions depending upon the holding of each of the six thousand and five in Standard Oil Company of the State of New Jersey. After this stock distribution has been effected, no effort was made to disturb the corporate existence of either Standard Oil of New Jersey or the thirty-four companies. But each of the thirty-four elected its own officers and was placed under its own management. Unexpected Results of Trust Case Then unexpected results followed : Standard Oil stock jumped by leaps and bounds. Prior to the instituting of any action by the Government, Standard Oil stock (Standard Oil of New Jersey) sold around $840 a share. The beginning of the Government suit depressed it. The decree was filed May 15, 1911, and was effective December 1, 1911. In the summer of 1911. prior to dissolution, Standard Oil stock fluctuated around $500. At the present time a complete set of fractional certificates representing one share of the old Standard Oil of New Jersey are worth in the open market $1,700. This immense increase in the value of Standard Oil securities is attributed by Standard Oil officials themselves, to benefits which came with the dissolution. Each of the companies stood absolutely upon its own merits. Under the old centralized plan, the majority of the companies carried the weak ones. If any one company had a deficit, the matter was not in the limelight. Small attention was paid to it. But after the dissolution, the separate management saw to it that there were no deficits. Scientific economies were introduced and modern efficiency systems. Then, too, values which had always lain dormant in the separate companies were developed. NEW ADVERTISING MATTER FOR "THE OTHER GIRL," RAVER New and elaborate advertising matter is being prepared by the Raver Film Corporation to accompany its first feature, "The Only Girl," in which James J. Corbett is featured. Among other things several attractive new posters have been designed in keeping with the style of the picture : there are one and three sheets, and a six sheet, giving a striking view of the automobile accident on Broadway, as well as attractive heralds. The plan of holding all rights until the picture was finished has proved very successful, and the company reports many bookings. FORTY-TWO THEATRES I N NEW HM!k TERRITORY SHOW H \ Forty-two theatres in the territory of the Ww York branch of the V-L-S-F. have showed the first two releases of the new Ilearst-Vitagraph News Pictorial. Reports from other territories were unanimous in predicting that the pictorial was destined for a large and enthusiastic reception from exhibitors in all parts of the country.