George Kleine and the Edison Company Go Separate Ways
Shortcomings in film production had serious commercial consequences for the Edison Manufacturing Company. It undermined a long-standing relationship with George Kleine, Edison's able Chicago selling agent, who had been responsible for approximately 30 percent of Edison's film sales.[119] Friction between Kleine and William Gilmore developed in February 1904 when West Orange allowed Biograph to acquire the exclusive concession for films of the Louisiana Purchase Exposition.[120] Kleine, who already had the exposition concession for lantern slides, wanted to sell his slides in combination with motion pictures. In April he wrote Gilmore: "It is distasteful enough to me to be compelled to sell
films made by the Biograph people, but what else is left? I have spent time and money on this matter and will be compelled to sell World's Fair Films in connection with my slides; you will agree with me that it would be idiotic to throw away any advantages that may offer themselves."[121] Faced with the rise of Pathé and Biograph, Kleine began to distribute Biograph and original Pathé films (rather than Edison dupes) on a regular basis in August. Gilmore reacted angrily to Kleine's "betrayal." "Of course, as I told you when you were here, you are at perfect liberty to make any arrangement that you like with other manufacturers," he blustered, "but I cannot see how I can consistently continue to have all communications and inquiries sent to you, nor do I consider it wise or judicious that we should continue to permit you to advertise as the 'General Western Selling Agents' for our goods."[122] Kleine pleaded with Gilmore for a better understanding of his situation. Others simply filled the void, he explained, weakening his own commercial position. His company always favored the Edison trademark and sold only small quantities of rival makes. Kleine then concluded:
We have been so closely identified with the Edison Mfg. Co. for years, that any disturbance of our relations would affect the welfare of our concern seriously, and it would probably require a year or two for matters to readjust themselves. You see that I do not hesitate to admit it. There are certain obligations involved on both sides, considering the past. The advertising of which you complain was voluntary on my part, and not involved in any agreement. I can therefore drop it without disturbing the peace with others; or eating crow, which I hate.[123]
Gilmore, however, seemed determined to break with Kleine. One key issue was Kleine's refusal to distribute Edison dupes of Pathé films.[124] The disagreement came to a head at the end of September, when Gilmore revoked Kleine's special discount effective October 1, 1904. The Edison organization quickly set up a Chicago office under John Hardin, who had entered the industry in 1898 as motion picture department manager of Montgomery Ward, then a Chicago-based mail-order house.[125] Kleine sent out a form letter to his customers explaining the break.[126] A few days later Kleine publicly blasted Edison's duping policy. His advertisement began by noting: "There are various kinds of 'Dupes.' The dictionary describes one kind as a 'Victim of deception.' "Urging customers not to be duped, the manufacturer concluded: "In no case will 'Dupes' be delivered to our customers when the original can be obtained. In some instances the originals can be purchased at the same prices as the 'Dupes' in others at a slightly advanced price."[127] Kleine's position pleased European producers, and he was gradually to become the U.S. representative for many English and French firms. His stand further dramatized the Kinetograph Department's weaknesses, the bankruptcy of its duping policy, the increased competition from Pathé and Biograph, and the need for Edison to expand its production of headliners.