The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1913-01-16
Hearings Started by Government
in New York Against AIIeg-
ed Monopoly
COMBINE CONTROLS THEATERS
Also Said Power Enables II to-
Close Picture Houses At Will
SUIT is AN IMPORTANT ONE

New York, Jan. i6.-BeGorc Edward
Hacker of Philadelphia sitting as a.
special examiner by appointment fthe
United states District Court, the taxi
ing OF testimony has been commenced
here in the governments suit against
the SO called motion picture trust. The
purpose of the suit is to dissolve the
combination OH the ground that its
existence is i'm violation of the Sher-
man antitrust law
The case is regarded by the govern
meut as one of its most important an
ti-trust suits because il brings square
Is to issue the relation of the patent
laws to the Sherman statute. Ten
prominent motion picture concerns are
accused of combining to nonopoli1e
the business through the Motion Pie,
turc Patents company. a corporation
organized for the purpose of holding
patents, and the General Film com
pany.
The marvellous growth Of the motion
picture business i'm the past decade
and the fact that no village is too
small to have picture show brings the
matter close To the hearts of the poo
pie It is estimated that sum great
~ in excess of $100.000,00 represents
the aggregate of investments In the
different branches Of the business,
divided among the manufacturers of
the cameras. films and exhibiting ma
chimes. the rental exchanges and the
theater owners.
Manufacturers Combine.
The Motion Picture Trust" made its
appearance in 1908 at which time there
were ten manufacturers or importers,
about 100 rental exchanges and 5000
exhibitors The keenest competition
exxisted at that time. AS result the
manufacturers undertook to combine
under the new scheme of patent con
, troll. The government charges that
i'm pursuance of this plan the Motion
Picture Patents company was incor-
porated i'm New Jersey, and TO IL the
manufacturers assigned their patents,
under provisions guaranteeing the
companies ftIldlb lON
From the patents company the man
ufacturers took back licenses, binding
themselves so that only licensed films
could be used and then only in licensed
machines. Royalties of s. per weel,
were to be collected and no more films
we're to be sold, but only leased. The
allegation is made that under the new
plan the prices were gradually increas-
ed until al the present time the eN"
hibitors pay more for the rental of
a film than he formerly paid to buy
n outright.
All rental exchanges were required
| TO enter into license agreements. with
the result that many were driven out
| Of business. The exhibitors we're
divided among the different exchange
and each exhibitor was required to
obtain his entire supply of films from
one exchange
Buys Up Exchanges.
In 1910 the trust started on, TO
monopolize the rental exchange busi-
ness and organized the General Film
company which proceeded to acquire
! the business or cancel the license of
every rental exchange in the United
| states except one. It bought out fifty 10
seven exchanges. for which IL paid up
wards Of $S.OO0,000 In cash and notes
and nearly $4,000, 600 more in preferred
stock At the same time the patents
company cancelled the licenses and
| thus drove out of business about fifty
exchanges, with the result that of all
| the exchanges doing business when
the trust was organized four years ago.
only one, the Greater New York Film
company survives.
The patents company absolutely
controls every branch of tho business
according TO the governments allega-
| tions and IL an exhibitors license Is
Cancelled he cannot obtain pictures In
| the United States. what is claimed
to be one Of the most iniquitous feat
ures of the combination is its deadly
grip on the motion picture theaters
| Its power enables II to open or close
a theater I'm any part of the country
a, will. The charge is made that In
many of the large cities certain houses
enjoy the favoritism of the trust" be-
cause the officers and members of the
combine have financiaf or other in
| terests I'm them. and that I'm order that
the favored houses may enjoy the
limit OF profitable business other
iouses that might interfere with tha;
business have been summarily forced
J to close their doors.
Hearings in Several Cities.
The trial of the governments suit
against the trust is expected to ex-
tend well into President Wilson's al
ministration. After taking testimony
here Examiner Hacker will conduct