5
General Flimco and the Pushcart Peddlers

The unsteadiness of the pictures sent out by an American independent manufacturer who makes a specialty of depicting Western scenes in the wild woods of New Jersey prompted us to ask him what camera he was using. He replied that it was a 'Billiken.' American independent manufacturers are no doubt handicapped in choice of apparatus, but we certainly can recommend the 'Billiken' for reproducing unsteady pictures.

—Moving Picture World, 19 March 1910, p. 421¹

The Motion Picture Patents Company had everything sewn up at the beginning of 1909. It took the best part of the year for the independents to get organized and gain strength, but the movement was in existence from that day in early January when William Swanson, president of the Film Service Association, found himself without power to negotiate anything with the united producers. He was the first of the exchange men to leave and declare himself independent. By 20 February there was already an exchange named the Anti-Trust Film Company of Chicago. That city was to be the hotbed of the independent movement. R. G. Bachman of the 20th Century Optiscope Company in Kansas City announced his defection on the 3rd of April with the advertisement "Bust the Trust—Go Independent."²

Great Northern, founded in January 1908 as the U.S. representative of Nordisk in Denmark and the one manufacturer of any strength on the American market outside the Patents Company group, immediately protected its position by instituting suit against Biograph and promising its own customers protection against lawsuits instigated by the Motion Picture Patents Company. The Moving Picture World defined the independents at the time of the founding of the Patents Company (the end of 1908) as Great Northern, Film Import and Trading Company, Cameraphone, "and others." In fact, the "others" were then all but nonexistent. Cameraphone, one of the early attempts at a synchronized sound system, would not last a year. Import and Trading, an importer of foreign films, held on for about a year, trying to dominate the independent market. Also left out of consideration when the Patents Company agreements were signed at the end of the year were foreign producers or agents who had been in the American market as recently as July 1908: Cines; Williamson; Williams, Brown and Earle as agents for Cricks & Martin, Hepworth, Paul and Graphic; Lux; Raleigh & Roberts; Aquila; Walturdaw; and Carlo Rosi. The last five had all been represented by Kleine, and most of the others had been Biograph licensees.³

There was keen competition among independent importers to sign up the foreign producers who had been left out in the cold. John J. Murdock, a vaudeville magnate who wanted to ensure a continued source of supply for his chain of vaudeville theaters, quickly organized the International Projecting and Producing Company and got to the foreign producers just ahead of I. W. Ullman of Film Import and Trading. Murdock announced big plans for motion-picture production and manufacture of cameras as well.⁴

Meanwhile, the U.S. exchanges had to decide to sign up with the Patents Company and be licensed or risk going out of business altogether because they could not count on a steady source of supply, even if they escaped legal action. Carl Laemmle, owner of a big chain of exchanges and the future leader of the independents, actually joined the licensed exchanges at the beginning, only to desert them by 17 April of the same year. However, there were already some exchanges ready to battle it out, and on 11 January, they banded together in the Independent Film Protective Renters Association. With almost no ammunition, they promptly declared war on the Motion Picture Patents Company.⁵

At a meeting in Chicago on 26 January, members of the new group decided that they would sell prints instead of leasing them, that they would challenge the Trust in court, and that they would begin to manufacture the Bianchi camera. The Bianchi was the invention of Joseph T. Bianchi, former head of recording at the Columbia Phonograph Company, the old Edison Company rival. One of several cameras designed to get around the Edison patents, it featured continuous rather than intermittent movement. As such, it permitted the Columbia Phonograph Company to issue "licenses" to use it, in imitation of the Patents Company.⁶

Although the Bianchi camera could not give a reliable and steady picture, it served as an excellent smokescreen while illegal cameras continued to be employed. In April 1910, "rumor having alleged that the Bianchi camera in use at the Powers works is not satisfactory," Joseph Bianchi and studio executives were able to mislead "experts" from the Moving Picture World, who went to inspect its qualifications on the premises of the Powers Company, and again at the Thanhouser Company. Thomas Bedding of the World, who fancied himself knowledgeable about photography on the basis of his previous experience in England (he had come to America around 1906 or 1907), was allowed to examine the camera and put it to use. At both studios, test films were made, developed, and projected during the visit, and the verdict was that the camera worked just fine. "It didn't infringe," the cameraman Arthur Miller said much later on, "but neither did it produce a satisfactory picture. Like the rest of the experimental cameras, the picture it produced jumped all over the screen."⁷

Even if the independents had had a satisfactory camera, until raw stock could be obtained and regular production started, their exchanges were going to be entirely dependent on foreign imports. Eastman Kodak stock was supposed to be the exclusive property of the licensed producers. By buying "under the counter" and highjacking Eastman's shipments abroad, a token supply of stock could be obtained, but this was expensive and unreliable. The problem was resolved by September 1909, when a steady source of supply of raw stock was assured by Jules Brulatour, agent for the French manufacturer Lumière Frères, who signed up the independent producers for Lumière's stock.⁸

The Trust had yet another weapon up its sleeve. In the spring of 1909 Eastman Kodak came up with a noninflammable film stock, known in the trade as "N.I." stock. Nitrate film stock, in use until the early fifties, is highly inflammable and was the cause of a number of disastrous or near-disastrous fires in the early days. Indeed, the Patents Company had made fire safety an issue in its campaign to overcome opposition to the nickelodeons (and to film exchanges, where the large quantities of nitrate film were a particular hazard). Since the independents were not allowed to purchase Eastman stock, whether N.I. or nitrate—or at least not to purchase it openly—their films would not be as safe as those of the licensed companies. Newark, New Jersey, ruled that only N.I. film could be shown there after 11 January 1910. The Patents Company, whose hand was very possibly behind that regulation, announced that all their films were being issued on N.I. stock. Even the independent producer Great Northern promised the same, since as a European manufacturer, they could buy Eastman stock at home.

Then the complaints started to come in from the exchanges and the exhibitors. First, the N.I. stock required a special cement. Second, the early releases of this stock were thicker than nitrate, and the film rolls would not fit on the normal-size reel and go into the magazine on the projector. Third, and much more important, it didn't last: it quickly became dry and brittle; splices parted, and perforations broke easily. The problem lay in the plasticizers used to make the film pliable, which evaporated too rapidly. Eastman's research department worked on this problem for many years, but it was not to be solved in our period. Lumière Frères retaliated in October 1909 by announcing its own N.I. stock but presumably encountered the same problems; little more was heard about it. The Patents Company, meanwhile, had made such an issue of safety that when they were forced to give up the N.I. stock after all, they had to try to notify everyone concerned that they were once again dealing with a highly inflammable product but at the same time avoid publicity that would alarm fire officials and the general public.⁹

It was essential to the independents that the supply of raw stock as well as the processed films could be imported at reasonable cost. The licensed companies, with the possible exception of Pathé and Kleine, wanted to see the duty on foreign imports raised, while the independents wanted it abolished or at least left as is. John J. Murdock of the International Producing and Projecting Company had spent the summer of 1909 in Washington, D.C., fighting the Aldrich tariff bill, and the victory he won there also gained him temporary leadership of the independent group. At the same time it made him a hero to the European manufacturers, who wanted to release films in the lucrative American market. In 1910 Pathé and Kleine managed to get processed films classified as photographs by the customs court in Washington, so that they could be imported at a lesser duty than raw stock. This decision was later reversed and motion pictures were declared to be dramatic works; on 24 August 1912, an amendment to the copyright law referred to them for the first time as motion pictures distinct in themselves.¹⁰

The Film Renters Protective Association emerged from a meeting held on 11 September 1909 in William Swanson's Chicago office as the National Independent Moving Picture Alliance, with John J. Murdock as president, Adam Kessel of the Empire Exchange as treasurer, William Swanson as secretary, and Ingvald Oes of Great Northern as part of the executive committee. At this juncture thirty-nine exchanges were represented in the Alliance, along with ten producers and importers, and five manufacturers of cameras and projectors.¹¹

Murdock's good work in Washington may have made him president of the Alliance, but it also meant neglect of his own business. While he spent the summer in the nation's capital, I. W. Ullman of Film Import and Trading (FITC) went to Europe and stole away Murdock's best suppliers. Within hours of the founding of the Alliance, Murdock left for Europe to mend his relations with foreign producers, but his company never recovered. Ullman had signed up Raleigh & Roberts of Paris, who were agents for a large number of European producers. Film Import and Trading announced that there would be simultaneous release dates on both sides of the Atlantic; films were to be shipped on standing order to the exchanges, and all prints would have FITC's imprint along the edge. It may not have made Murdock feel any better, but FITC did not hold on long either. By the end of 1909, other independents had managed to sign up directly with individual producers, such as Ambrosio and Itala in Italy, bypassing the Roberts & Raleigh agreements.¹²

Before we leave J. J. Murdock, however, it is interesting to note his adherence to the most modern of American efficiency systems for inventory control, orders and shipping. He was quite proud of having hired an expert from Sears and Roebuck, the best in mail-order business, to establish the system used by the International Producing and Projecting Company.¹³

By autumn 1909, the beginnings of independent American film production were well in place. Many a production company was founded and promptly failed, but the following survived long enough to make their mark:

• David Horsley had been making films in Bayonne, New Jersey, since 1907, but his was one of those companies so insignificant that the Trust decided not to take it in. Horsley survived despite being a constant target of the Trust lawyers. He changed the company name from Horsley Manufacturing Company to the Centaur Film Manufacturing Company in 1908, and issued the first release under this name, A Cowboy Escapade, on 19 September 1908. A little more than a year later, Horsley also founded the Nestor Company; the first Nestor release was The nemesis, on 6 January 1910.¹⁴
• Fred Balshofer, after an apprenticeship with the Lubin Company in Philadelphia, started the short-lived Crescent Film Company in New York in 1908. By the end of the year it was out of business—driven out by the Edison lawyers, according to Balshofer's memoirs. Balshofer then joined with Adam Kessel and Charles Baumann of the Empire Film Exchange to form the New York Motion Picture Company, trademark "Bison," in early 1909. The New York Motion Picture Company's first release, in May 1909, was called Disinherited Son's Loyalty. This company was an important one in the independents' war against the Trust and against each other. Its most famous director was Thomas Ince, who went there at the end of 1911.¹⁵
• Pat Powers' production company, the Powers Company of Mount Vernon, New York, completed its first film, A Change of Complexion, in October 1909.
• The same week, Carl Laemmle's production company, the IMP, released its first production, Hiawatha, directed by William Ranous. Initiating a practice that other independents would follow, the IMP lured Ranous away from Vitagraph, a licensed company. The initials IMP stood for Independent Moving Picture Company—which was the forerunner of Universal—but the full name was seldom used.¹⁶

Other new companies announced that year included Powhattan, the Carson Company, Columbia Film Company, the Western Multiscope Company of Salt Lake City, the United States Film Manufacturing Company of Cincinnati, Actophone (run by Mark Dintenfass, who had been associated with the now-defunct Cameraphone), Cinephone (another unsuccessful sound system using the Victor talking machine, marketed by FITC), Phoenix, Pantograph, Travergraph, Brinkmeier, Exclusive American Film Company, and World Film Manufacturing Company of Portland, Oregon. Probably this is not a complete list, but in any case they did not stay around all that long. Begun by independent exchange men or get-rich-quick schemers and dreamers, and harassed by the Patents Company, they soon folded. The individuals involved in them, however, often reappeared, associated with yet another company. By November 1909, independent exchanges could get an American-made reel a week from the Carson Company, Columbia Film Company, IMP, New York Motion Picture Company, Phoenix, the Powers Company, and World. Since seven new reels a week was not enough for most exhibitors, the rest of the program had to be made up from foreign imports.¹⁷

By the end of the year, the New York Motion Picture Company had contracted directly with two Italian producers, Ambrosio and Itala (ignoring Film Import and Trading's claim to exclusive contract through Raleigh & Roberts), and on 10 January 1910 began a regular release schedule of four reels a week—two of them their own production (under the Bison trademark), one from Itala, and one from Ambrosio. That gave the New York Motion Picture Company as solid an output as any of the licensed companies.¹⁸

At the meetings of the Alliance that November and December, the independents began to formulate distribution systems similar to those of the licensed group. They regulated release days, set a uniform selling price of eleven cents a foot, with discounts for return of old reels, and ruled that no film was to be sold at a lower price for thirty days. Throughout the period when they were trying to get established, the independents followed the practices of the licensed group rather than break new ground. An organized industry was just as essential to the independents, if they were to expand and grow.

The major business of those meetings of independents, however, was the neverending legal battle. The feisty Carl Laemmle now began to take a lead in the fight, with the help of Robert Cochrane, a former advertising man whom he had hired to do publicity for his production firm, IMP. Laemmle advised the trade with some glee that one of the licensed manufacturers was selling to three independent exchanges at cut-rate prices. He may have been responsible as well for the stories about how easy it was for unlicensed exhibitors to show licensed films. It was said that the rules of the Patents Company were just a joke: an exhibitor would send his operator to the exchange for his daily supply of, say, three reels, and the operator then continued on to the independent exchange, trading one licensed for one unlicensed and reversing the trade the following morning.¹⁹

Many new production companies began in 1910. Early in the year, the Thanhouser Company established a high-class independent firm in New Rochelle. The first release, titled The Actor's Children, was ready on 15 March. Edwin Thanhouser had been a theater owner, manager, and director of his own stock company. He had applied for a license to the Patents Company but was refused. Deciding to go ahead anyway, he ordered his Bianchi camera, though he undoubtedly had another camera for daily use, and set out to make quality films with professional stage actors. The achievements of this company were more rapid than those thrown together by the frustrated exchange men to get around the Patents Company restrictions. Thanhouser's production of The Winter's Tale was hailed as "The Thanhouser Triumph," and "after only two months in business." Edwin Thanhouser committed himself to the same degree of uplift and high quality as any member of the Trust, and they may well have regretted later that they did not take him in.²⁰

In June 1910 there was a barrage of first films from new firms, though of little lasting importance. Nearly all of them were founded by independent exchange men: Electragraff in Philadelphia, founded by George B. Graff, released A Message from the East; Motograph in Baltimore, founded by Harry Raver, released A Child of the Regiment. Atlas' first release was The Outlaw's Redemption on 8 June. The Yankee Film Company of New York, founded by William Steiner, first released some films showing Jack Jeffries on his ranch, in anticipation of the great 4 July fight. These were followed by Capitol Films of Washington, D.C., on 18 June with The Turn of the Tide, and Dandy Films, which on 15 June announced the release of the very same film as that listed by Electragraff, A Message from the East. Both Capitol and Dandy were represented by A. G. Whyte of the Electragraff Company of New York and Chicago, who also organized Whyte Films about this time. In other words, all these new companies were not necessarily separate organizations, but it was to the advantage of film exchanges to appear to have a large source of supply. Owl Films announced its beginnings the same month; this was one of Adam Kessel's companies, with its studio on West Twenty-third Street in New York. The Defender Film Company released its first film, called Russia, the Land of Oppression, on 10 June. Defender was founded by William Swanson (the first exchange man to walk out on the Patents Company), Joseph Engel, and Edwin S. Porter, who had left the Edison Company. At Edison, Frank Dyer had brought in his friend Horace Plimpton as an efficiency expert, to head Edison production.²¹

In July, Mark Dintenfass, who had taken over the remains of Cameraphone and turned it into Actophone in the previous year, pursued by the Patents Company lawyers and keeping just one step ahead of a jail sentence, started the Champion Film Company and released its first film, The Abernathy Kids to the Rescue. The Dramagraph Company of Fort Lee began with Beyond Endurance, released on 4 August.²² In September the Columbia Film Company reintroduced itself after "our period of silence" with Rip Van Winkle, slated to appear on 1 October. The Revier Motion Picture Company set up in Salt Lake City, with a glass studio, a laboratory, and artists "brought over from France."²³

In the autumn of 1910, the independents really began to swing into action, raiding enemy territory for their top talent. IMP had shown the way by stealing Florence Lawrence from Biograph in 1909 and Mary Pickford in 1910. Reliance Pictures, founded by the exchange men Charles Baumann and Adam Kessel, was the lead-off in the fall of 1910 with a mass of actors stolen from Biograph's list: Marion Leonard, James Kirkwood, Arthur Johnson, Henry B. Walthall, Anthony O'Sullivan, and Gertrude Robinson, together with Biograph scenarist Stanner E. V. Taylor. The first Reliance release, ready on 22 October, was The Gray of the Dawn, directed by Eugene Sanger and filmed by Max Schneider. This was the birth of the studio that would capture the great David Wark Griffith himself when he finally left Biograph three years later.²⁴

The American Film Company, founded by exchange men John Freuler and Samuel Hutchinson, stole more than actors from Essanay in Chicago: they came close to stealing the whole studio. They took Thomas Ricketts as director of dramas, Sam Morris as director of comedies, and Frank Beal as director of Westerns. The as yet little-known Allan Dewan was taken as the scenarist; before long, he was Allan Dwan, the star director of the company. Seven actors went along, including the star J. Warren Kerrigan. Numerous technicians were also hired away. Just about all that American left for Essanay was Broncho Billy Anderson and his company way out West. George K. Spoor of Essanay had to ask "the World to deny the canard that the sudden departure of several Essanay employees and the summary dismissal of others had in any way crippled the factory resources." Spoor said it was only "a pruning of dead wood." But he had to hire an entirely new stock company and put Essanay production in the hands of Harry McCrea Webster, a former stage director. American's first release was Romantic Redskins, on 14 November 1910.²⁵

The third company to begin business that fall was Solax, with A Child's Sacrifice, as its first release. Solax announced that the new company was made up of Gaumont brains but had no Gaumont association. The Gaumont plant, a laboratory for printing in Flushing, was brought by its former manager, Herbert Blaché, together with American and Canadian rights to the sound system, Gaumont's Chronophone. Herbert Blaché was to be the presiding spirit, George A. Magie the business manager, "but chiefest and most valuable of all assets of the new company is the artistic personality of Mme. Blaché," the former Alice Guy, who had been responsible for much of the Gaumont production back in its early days in France.

Gaumont of Paris continued to be distributed by George Kleine of the licensed side, but Gaumont of New York was turned into Solax, an independent firm. By the end of 1911, Gaumont of Paris had gone independent on the American market, and Herbert Blaché became president of the American branch, while Alice Guy assumed the presidency of Solax in addition to her production duties.²⁶

But let us return to April 1910, to examine the organization of the Motion Picture Distributing and Sales Company. The Sales Company, as it was soon known, began as the attempt of Carl Laemmle, Adam Kessel, and Charles Baumann, representing IMP and the New York Motion Picture Company, to take over the marketing of all the independent production. Unlike the Alliance, to which most of the independent exchanges belonged, which was only a trade organization, the Sales Company was a commercial firm that would contract with the production companies for their product and service the exchanges. The other independent producers, fighting for power with Laemmle and his friends, resisted joining the Sales Company at first, and aligned themselves instead with a short-lived organization called the Independent Manufacturers and Importers Association. But this maneuver succeeded only in splitting the field; neither side commanded a sufficient supply to be able to service the larger exchanges on its own. Then the Sales Company was reorganized as a cooperative venture that would serve all the producers equally, and it took over most of the independent field.²⁷

In May 1910 a World editorial speculated whether the Sales Company was a legal combine or was contravening the Sherman Anti-Trust Act, but there was no way the independents were going to be able to organize themselves into one powerful unit as the licensed producers had done. Their competitive drive was too great. Yet another alignment, called the National Film Manufacturing and Leasing, Inc., organized in October 1910, gave some opposition to the Sales Company, taking in, by the following April, some ten very small companies in the United States and abroad: Revier, Royal, Columbia, Cines, United, Film de Art [sic], Colonial, Arrowhead, Capital, and Cameo. "Is the independent market controlled by a trust too? … Don't be bamboozled by the cry of independence and business freedom," cautioned a Revier Film advertisement.²⁸

Nevertheless, the Sales Company gathered together an uneasy combination of all the production firms of importance on the independent market for a couple of years. In June 1910, the independents were distributing twenty-one reels a week, compared to the licensed companies' thirty. Twenty-one reels a week was the need of the average exhibitor, who used three reels for a show and changed it daily. It was estimated that the independents now served about three thousand theaters, while the licensed companies served about seven thousand. By January 1911, the Sales Company claimed that "in the year 1910 we succeeded in splitting the business of the country between the trust and ourselves on a 50 percent basis." This is undoubtedly an exaggeration, but the combined strength of the independents now provided solid competition for the Patents Company group. The Sales Company held together until the spring of 1912, when new alignments began to shape the future.²⁹

Meanwhile, the real contravener of the Sherman Act, Jeremiah J. Kennedy, was quietly arranging to buy up all the licensed exchanges under the umbrella of the General Film Company. General Film was founded at the same time as the Sales Company, although it had been in the organizational stages (and in the rumor mill) for six months or more. Officially, it began operations on 18 April 1910 with a slate of officers that included Jeremiah J. Kennedy as president, George Kleine as vice-president, Jacques A. Berst of Pathé as treasurer, and William Pelzer as secretary. In a policy statement released in June, the General Film Company, or "General Flimco," as Cochrane immediately started calling it in the great Laemmle anti-Trust advertisements, announced that it was "organized to conduct a film renting business and has obtained exchange licenses from the Motion Picture Patents Company." By its charter, it was not to be permitted to own theaters or be an exhibitor. It had already acquired four exchanges from the Kleine enterprises, one from Lubin, and the Frank Howard exchange in Boston. The position of the federal government, when it brought suit on 16 August 1912, was that at this time the defendants "set out to monopolize the business of all the rental exchanges in the United States."³⁰

Where did they get the money to buy up all the licensed exchanges? In fact, it did not cost them an enormous amount. Frank Howard, the first to sell, got a better price than many who came after. He sold for $80,000 plus $30,000 in preferred stock, at a time when he said that his annual profits were about $25,000. But the $80,000 was to be paid off over a five-year period, so it was not much cash up front. Of course, the Patents Company producers who owned their own exchanges were obliged to sell them to General Film. The American Vitagraph Exchange, managed by "Pop" Rock, was one of the pioneers of the business, established well before the nickelodeon era; it was now combined with a Kleine exchange and became a General Film exchange. Rock had to find another occupation, but just then he had the filming of the Johnson-Jeffries Fourth of July fight to arrange on behalf of the Trust companies, so he was able to keep busy.

The outside exchanges licensed by the Patents Company had little choice in deciding whether to sell, because their licenses could be easily canceled—immediately for breaking any of the Patents Company rules, or on fourteen days' notice for no cause at all. (The fourteen-day clause was the one that William Fox fought bitterly, and lost, back when the Patents Company first presented itself to the FSA exchanges.) The executives of the Patents Company and General Film later testified under oath that there was no collusion between the two companies, but as the executives were generally the same individuals, this is rather difficult to believe. When the owner of a licensed exchange proved cooperative, he could stay on as a hired employee of General Film.³¹

As one licensed exhibitor described what was going on that summer:

I went to my exchange the other day and found quite a change. The routine was going on as usual, but the man who had owned the place was only the manager. It seemed to me that the change was made as quickly and quietly as the turning of a pancake on a griddle. Those people certainly have the dope (Moving Picture World, 27 August 1910, p. 459).

By the end of 1911, General Film owned every licensed exchange in the country with the sole exception of the Greater New York Film Exchange, owned by none other than William Fox, the fighter. If Kennedy had left him alone, Fox would not have ended up challenging him in court and the government might not have gone to court against the Motion Picture Patents Company. But General Film could not raise prices in the New York area as long as Fox was there providing competition in the licensed market. In September 1911, Kennedy set out to buy the Greater New York Film Exchange, but he and Fox did not agree on a price. Fox's license was canceled, and he agreed to sell, but sly Fox that he was, he asked for the license to be reinstated so that it would be a going film exchange when sold. He then refused to sell and got another cancellation, together with a refusal from Biograph to supply a contracted film shipment. At that point Fox sent for his lawyers. The litigation took years and was still unresolved when Fox was testifying on behalf of the government's suit against the Patents Company. Meanwhile the Greater New York Film Exchange was free to carry on business as usual, distributing licensed films.³²

All the Motion Picture Patents Company manufacturers withdrew their advertisements from the Moving Picture World in October 1910. Just how the editors of this important trade periodical managed to offend the Trust, or more likely, I think, its president, Jeremiah J. Kennedy, is not clear, but the companies did not return their advertising to the World until the summer of 1911. Biograph was among the last to come back and a few months later withdrew its advertising again for another year or more. The specific cause may never be known, but the events illustrated Kennedy's irascible nature. His testimony during the trial of the government versus the Patents Company gives evidence of a hasty temper. One of the exchange men who negotiated a sale of his exchange to General Film talked to the press afterward expressing some dissatisfaction with the price, and Kennedy's story was that he immediately called off the deal, not even waiting to find out if the man had been quoted correctly. His reason for telling the story was to show that no one was forced to sell to General Film, but it also reveals something of an unreasonable disposition. As for the withdrawal of Trust advertising in October 1910, this might have been due to the World's having published in the previous issue a brief article about the great trustbuster himself, Theodore Roosevelt, describing his interest in film and ending up with the declaration that "the owner of a motion picture theater in this land of freedom is not free to buy in an open market; is not free to show what pictures he likes."³³

However the defection came about, after it happened, the trade periodical, which had always tried to represent all viewpoints of the field and had given support to the Trust, began open opposition to it in the editorial columns of Thomas Bedding.

The World also published some letters of complaint from exhibitors. In Athens, Georgia, far from the exchanges, an exhibitor wrote, "Am now powerless to secure a desirable service that will please … my patrons." He complained he did not even know what film he would be getting until the train arrived twenty-five minutes before his theater opened. If he were to turn independent, he said, he would "receive a service of stories without plots, and generally unintelligible to the average patron."³⁴

Thomas Bedding, "Lux Graphicus" of the Moving Picture World, suffered an attack of acute depression at the end of 1910. He thought the business was going down, the country was going crazy about vaudeville, and picture quality was poor. With a careless disregard for the only advertisers the World had left at that moment, Bedding complained that the independents did not have the brains to make good pictures: "How can an ex-huckster, ex-bellboy, ex-tailor, ex-advertising man, exbookmaker know anything about picture quality? Hands that would be more properly employed with a push cart on the lower East Side are responsible for directing stage plays and making pictures of them."³⁵

On 14 February 1911, Eastman Kodak's agreement with the Patents Company was amended to permit Eastman to sell to independent producers, and the independents rushed to get their hands on Eastman stock. Mark Dintenfass of Champion Film announced the signing of a contract to use Eastman stock exclusively. A reviewer of IMP's at sword's point noted, "The change in the film used by the firm is shown in the sharpness of the pictures and the stereoscopic relief which characterizes their appearance on the screen."³⁶

The tide of never-ending lawsuits began to turn a bit in favor of the independents in this year. In June, the preliminary injunctions against various independent companies for using infringing cameras were dissolved, and the beater-type camera was declared noninfringing. These were not really significant decisions, in the sense that the beater-type camera had not proved successful anyway, but they enabled the independents to gain courage and perhaps to see that it was only a matter of time. When the Patents Company began a new round of suits on the Pross Shutter and Latham Loop patents in August, the Sales Company offered to defend any exhibitor in such suits, which it dismissed as just a bluff. The end to persecution came on 24 August 1912 when Judge Learned Hand, ruling in the case of the Motion Picture Patents Company versus IMP in the U.S. Circuit Court, overthrew the Latham loop patent. This was a very important victory for the independents. Free to use openly the best cameras they could buy and guaranteed the same reliable supply of raw stock as the licensed companies, they could now compete on an equal basis. Like the licensed companies when the Patents Company was formed in 1909, the independent producers now had confidence enough to expand their facilities and enlarge their production. Although the U.S. government filed against the Patents Company at the end of 1912, it was too late for the lawsuit to have much impact on the independents because the Trust had already reached the end of its power to monopolize the trade.³⁷

The Patents Company and General Film's policies of trying to control, regulate, and uplift industry practices contributed to the eventual demise of the Trust. The same system that enabled the licensed companies to bring stability into a chaotic business eventually proved a stranglehold to growth and change. By eliminating and combining licensed exchanges and by arranging that time should not be wasted shipping prints to faraway theaters, copies of films were used efficiently and fewer were needed to serve the exhibitors. The problem with this efficiency method was that the only way for the licensed producers to increase their profits was to be able to sell more copies to the exchanges, since they were limited in the number of subjects and reels they could produce and the price they could charge. Now, fewer copies were needed, and producers found it more difficult to increase profits.

In Boston, late in 1910, General Film tried to rationalize exhibition practices by ruling that exhibitors could have only biweekly changes of films and could choose only two kinds of service, all new films or all old films. Competition heated up. The Olympic Theater on Bowdoin Square, owned by the Lasky Brothers, reduced its admission price to five cents at the same time that it began to offer four reels of film, all first-run, plus one vaudeville act and one illustrated song.³⁸

By attempting to control exhibitor practices in various cities, General Film sought to protect exhibitors against the spiraling competition of more and more films for the same low admission price. In Los Angeles in the spring of 1911, licensed exhibitors had to confine their programs to three reels for the five-cent houses and four reels for the ten-cent houses. But when the licensed exhibitors tried to get the independents to go along with this policy, they refused, and pressing their advantage, they made inroads into the licensed business. The general practice was to increase the length of the program, thereby preparing the way for audience acceptance of the feature-length film, which arrived a couple of years later. Five, six, or seven reels for a nickel became a common practice in many cities.³⁹

General Film exchanges scheduled everything in advance, buying their film supply on standing order from the licensed producers. On Mondays they bought a set number of copies of releases from Pathé, Selig, Biograph, Gaumont, and Vitagraph. On Wednesdays, it was the turn of Kalem, Edison, and so on. An exhibitor with a regular service who read a trade periodical would know what films to expect in sufficient time to advertise them, although there was little or no choice, especially if the exhibitor lived far from the large cities. There was a daily change of program in most places, and as a rule no film that was especially popular could be held over, because it was due somewhere else. General Film did not usually allow for extraordinarily popular films by buying extra copies. Since an expensive production sold for the same price as the cheapest, the incentive was lacking, for both exhibitor and producer, to improve. It was difficult to prevent first-class houses in the same part of town, all wanting first-day release service, from showing the same film on the same day, after which it would disappear from that neighborhood. The exchange could, of course, protect a theater by declining to serve others in that area with first-day release, but that would mean turning away its own most profitable business.⁴⁰

By March 1911 it was noticed that exhibitors in Boston had stopped bothering to renew the license when it expired, although they continued to show the films. More and more, exhibitors ignored the rules and combined licensed and unlicensed films on their programs. The competition of the independents was making it difficult for General Film's exchanges to enforce the regulations, since they risked losing a customer. If the rules of General Film were onerous, an exhibitor could now easily turn to an independent exchange. Nonetheless, that did not stop the Patents Company from trying to tighten up the rules in order to control the situation. At first the rules about the return of used films simply specified the footage that must be returned, allowing 10 percent or later 20 percent, for footage lost or destroyed in use. In 1911 the rules were changed so that films had to be returned to their own producers; that is, worn Biograph films were to be returned to Biograph. In 1912, another rule stipulated that exchanges must return the precise film title that was purchased and on a specific schedule. The tightening up of these requirements signals the fact that films were slipping out to independent exhibitors, and the Trust could not stop it.⁴¹

In August 1911, W. Stephen Bush noted in the Moving Picture World that control of the industry had passed from the hands of the exhibitors to the manufacturers. At this point, far too late to recapture their former position of dominance, the exhibitors managed to get together for the first time in a national organization, the Moving Picture League of America, formed in Cleveland on 1–3 August 1911, with M. Neff of the Ohio Exhibitors' League as president. The policy of the new national league was "self-protection, to raise the standard of moving picture films, to secure recognition of the National Censor Board, the regulation of prices for film service, to prevent breaches of contract, … regulate insurance rates, … protection against adverse legislation." By uniting, they might still be able to affect the practices of film exchanges, but they did not even mention any effort to negotiate with producers.⁴²

At the end of this year, it was remarked that American films were beginning to dominate the world market. "It was said" that 80 percent were now furnished by American manufacturers. The basis of this statistic was not given, and the figure seems high for 1911. However, American films did far outnumber foreign films on the domestic market by this time. By the end of 1912, national production accounted for well over 80 percent of the American market, at least according to the number of film titles released (not copies sold). On the same basis, independent films now accounted for more than half of the domestic production, and the licensed films kept a slight edge only with the addition of their foreign-made product.⁴³