The Hattiesburg news. (Hattiesburg, Miss.) 1908-1917, 1913-01-17
HEARINGS BEGIN IN
MOVIES TRUST
| CASE
TEN MOTION PICTURE CONCERNS
ACCUSED OF COMBINING TO
MoNoPoLIZE BUSINESS.

New York, Jan. 16.-Before Edward |
Hacker of Philadelphia sitting as a
special examiner by appointment Of :
the United States District Court, the |
taking of testimony has been. COM
menced here in the governments suit !
against the so-called motion picture |
trust. The purpose of the suit is to |
dissolve the combination on the
ground that its existence is in viola !
ton of the Sherman antitrust law.
The case is regarded by the gov
eminent as one of it's most import
ant antitrust suits because it, brings
squarely to issue the relation of the
patent laws to the Sherman statute.
Ten prominent motion picture con-
Germs are accused of combining to
monopolize the business through the
Motion Picture Patents Company, a
corporation organized for the purpose
of holding patents, and the General
Film Company. nj
The marvellous growth of the mo-
ton picture business in the past de-
cade and the fact that no village is
too small to have a pictures show
brings the matter close to thes hearts
of the people, 1t is estimated that
sum greatly in excess of 100 million
dollars represents the aggregated Of in4
yestmentS- in the different branches
/ Of. the' business, divided am big. .the
manufacturers of the cameras,, films
tand exhibiting machines, the rental
exchanges and the theatre owners. ~
!, The" motion picture trust" made its
appeafance in 1908 at which time there
We're ten manufacturers or IMPORTERS,
liaAont 100 rental exchanges and 5000
exhibitors. The; keenest coHpetition
z eYistedH at that time AS r$ultstHe
!. manufacturers undertook to combine
under. the. new scheme of patent con;
ttfol. - The government charges that
in pursuance ofsthis plan the Motion
RicthEa Patents company was incor-
porated in New Jersey, and to 1t the
; manufacturers assigned their patents,
under provisions guaranteeing the
companies certain royalties.
H. Fromgth the patents company the man
ufacturers took back licensess binding
themselves so that only licensed films
could be used and then only in H.
censed machines. Royalties Of so per
week were to be collected and no
more films were to be sold, but only
leased. The allegation is made that
under the new plan the prices were
gradually increased until at the pres
ent time the exhibitor pays more for
the rental of film than he formerly
paid to buy 1t 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 d.
vided among the different exchanges
and each exhibitor was required to OBJ
tain his entire supply of films from
one exchange.
In 1910 the trust" started out to
monopolize the exchange business and
organized the General Film Company
which proceeded to acquire the bust
ness or cancel the license of every
rental exchange in the United States
except one. 1t bought out fifty-seven
exchanges, for which it paid upwards
Of two million dollars in cash and notes
and nearly eight million dollars more
in preferred stock. At the same time
the patents company cancelled the II
censes and thus drove out of business
about fifty exchanges, with the re
suit that of all the exchanges doing
business when the trust was organ
lied four years ago, only one, the
Greater New York Film Company sur
wives.
The patents company absolutely
controls every branch of the business
according to the governments allega
lions and If an exhibitors license ID
cancelled he cannot obtain pictures IL
/ the United States. What is claimed
to be one Of the most Ubiquitous fea
lures Of the combination is its dead
ly grip on the motion picture the
aires. It's power enables it to opel
or close a theatre in any part Of thu
country at will. The charge is mad
that in many of the large cities Ger
tain houses enjoy the favoritism o
the sstrust." because the officers an