Commercial Warfare Within a New Framework
The MPPCo agreements were used as a weapon by licensed producers who wanted to reassert their authority and solidify their dominance of the industry. The renters, the group that had most clearly challenged the producers' commercial hegemony, were forced to assume a subordinate capacity. While rental rates assured them adequate revenues, exchanges had become a convenient in-
termediary between producers and exhibitors. Astute observers already foresaw the day when the production companies would take over distribution by forming their own exchange.[35] The principal opposition to the MPPCo, therefore, came from renters and was centered in Chicago. In a letter to exhibitors, Max Lewis and his Chicago Film Exchange vehemently protested the new arrangements: "We have not and will not sign the outrageous agreement offered to the Film Exchanges, and we positively refuse to connect ourselves with any movement intended to take the profits from you and others who have worked night and day and made the motion picture industry what it is today."[36] D. B. Baker announced: "The Globe Film Service is not going to sign any such contract as that presented by the Motion Picture Patents Company which is all one-sided. And we are certainly going to continue in business." Baker claimed to have a motion picture projecting machine and camera that operated without a sprocket or loop and used principles not covered by the MPPCo patents.[37]
Many renters who took a license were also unhappy. To show his displeasure, Carl Laemmle submitted his license application after the January 20th deadline. This was grounds for exclusion. Although Laemmle was indicating his readiness to strike out independently, the application was accepted. Realizing that "in unity there is strength," Swanson proposed the formation of a Motion Picture Service Company that would purchase as many exchanges as possible and then use its economic clout for the "improvement of rental conditions" and "co-operation with manufacturers for mutual benefit."[38] The organization's purpose was to challenge the power being accrued by the licensed producers. William Swanson, considered a radical in the old FSA, was promptly elected president of the new Film Service Association. Laemmle was elected vice-president. The organization had little power, but the choice of officers indicated the mood among its members. Although the renters recognized that they had to sign with the MPPCo if they wished to continue profitable operations, many voiced hopes that an effective, independent opposition would emerge.[39]
Exhibitors were likewise outraged by the MPPCo's demand for a $2 a week royalty. In Philadelphia 160 of the city's 185 exhibitors organized an association to combat the MPPCo. They contended that "the latest move of the Trust in compelling them to sign an agreement which doubles the rental price and the charging of $2 weekly royalty and the stringent conditions in regard to the licensing of exhibitors" threatened their businesses.[40] A screening of unlicensed films in Chicago was attended by 400 angry showmen, and "it certainly looked as if there wasn't a licensed showman in Chicago."[41] Vaudeville manager Percy Williams refused to take out a license and challenged the Patents Company in the courts. "I have no intention," remarked Williams, "of laying myself open to any royalty demands this moving picture combination chooses to make. I have no assurance that the $2 week fee now exacted will not be shortly advanced."[42] "How paying $100 per year to the film trust would protect me in any way or
increase my business I am unable to see," protested a less prominent midwestern exhibitor.[43] In a full-scale revolt, an estimated 80 percent of the country's motion picture theater managers disapproved of the new arrangement and were ready to join the independents.[44]
Opposition coalesced around several different groups. By early February John J. Murdock, vice-president and general manager of the Western Vaudeville Managers Association and a group of Chicago film men formed the International Projecting and Producing Company.[45] Murdock moved into the void created by Kleine's alliance with the MPPCo. Within a month he had reached agreement with twenty-seven companies in England, France, Germany, Italy, and Russia. The International Projecting and Producing Company claimed to have forty reels of new material available each week, from which it proposed to select twenty-five to thirty reels for release.[46] During late February and March the company showed films in key cities to enlist exhibitors and film exchanges in the independents' cause. In addition, several established film importers, including the Great Northern Film Company and Isaac Ullman's Film Import Trading Company, continued their independent activities.
The Columbia Phonograph Company, Edison's old rival, which had been quiescent in motion picture affairs since C. Francis Jenkins' departure in 1896, again became active. Columbia acquired the patent rights for a camera made by Joseph Bianchi, a former recording expert for the company. Claiming the camera operated on a principle completely different from Edison and Biograph apparatuses, Columbia indicated that it intended to move into production.[47] An alliance between the International Projecting and Producing Company and Columbia was soon being discussed.[48]
The main opposition was to come from a group of Chicago and New York exchange men. Some of these, like the Empire Film Exchange and Chicago Film Exchange, were denied a license. But at the end of February the MPPCo cancelled the licenses of William Swanson's three exchanges.[49] Swanson had been a thorn in the new organization's side, and when the opportunity arose, the MPPCo demonstrated its power and self-confidence by expelling the president of the new FSA.[50] Within a month ten additional exchanges had joined the independents, including those conducted by Robert Bachman and Eugene Cline.[51] On April 12th America's largest renter, Carl Laemmle, informed the MPPCo that he was surrendering his license.[52]
Nonetheless, by early May 75 percent of theaters nationwide were licensed. In many eastern localities licensed theaters exceeded 90 percent of the total. The percentage fell further to the west, and the areas around Chicago were nearly evenly divided, but in the Far West and in the South the MPPCo carried the day. Throughout the country virtually all the leading houses were licensed.[53]
The protracted film war between the independents and the MPPCo is outside
the scope of this study. It is merely important to note that the formation of the MPPCo failed to eliminate competition outside the trust as its members had hoped. The terms Dyer and his associates offered many renters and exhibitors alienated important elements in the film world. Once again there were defectors, and once again a new competitive environment emerged. Many renters, Young Turks who had represented the most dynamic elements of the industry, refused to accept the dominance and regulation of the industry's somewhat older and more established producers. By mid 1909 Carl Laemmle had started the Independent Motion Picture Company, while Adam Kessel and Charles Bauman of the Empire Film Exchange had started the New York Motion Picture Company.[54]
Despite the continued existence of the independents, the Motion Picture Patents Company was able to implement many of its goals and policies. It organized and coordinated all phases of the motion picture business on a systematic, contractual basis, maximizing control and profits in the hands of a select group of producers/owners. The combination did not, however, transform the industry into a thoroughly rationalized modern system. Licensing arrangements permitted an ambiguous relationship between licensee and licensor. Edison's problems with Vitagraph in the late 1890s continued in the MPPCo's dealings with producers, renters, and exhibitors. These groups served their own interests, not those of the licensor. While the MPPCo hoped to control the industry through legal intimidation and by controlling the supply of films, the best it could do was regulate those members who, for the moment at least, saw the alternative as less desirable. The industry had changed radically in ten years, but Edison's attempts to dominate it remained basically the same. The system of management was decentralized, yet depended on the consensus of diverse interests.
Although the MPPCo seemingly assured Thomas Edison of a prominent role in the motion picture industry for many years to come, it also limited the extent to which his company could ever again dominate the industry or dictate terms to rivals. Yet Dyer was able to enhance Edison's reputation or at least avoid any further tarnishing of his "biographical legend." MPPCo policies helped to make motion pictures respectable entertainment for the middle classes. To assure acceptable film subjects, the organization cooperated in the setting up of the National Board of Censorship early in 1909. In theory at least, it also policed licensed houses. Any theater that did not comply with fire laws, that was not clean and as light as proper film projection allowed, was threatened with revocation of its license.[55] MPPCo executives hoped to create an atmosphere in which the film business could be safely and profitably conducted. Likewise, these policies were designed to portray the MPPCo as a benign trust that should not be sued for violation of antitrust laws by the government. This last goal eluded Dyer and the MPPCo, although the others were largely achieved.
The Tale the Ticker Told.