‘It has frequently been said that “everybody in this country has two businesses, his own and motion pictures”’, US Congressman John Costello (D-CA) observed to colleagues on 2 May 1940. He invoked this axiom, as film industry representatives and supporters often did, in order to refute it: ‘This may be quite true of the products, personalities, and publicity of Hollywood and of the local theater, but the actual business operation of the industry itself, how it operates and why it operates that way is little understood by those not actively engaged in the business’. Costello's comments were designed not to convince his colleagues to learn more about the industry's business but rather to persuade them to mind their own. His admonition came near the end of a long and fervent effort to pass federal legislation to regulate certain trade practices within the industry, in particular the relationship between the major distributors of motion pictures, who were also the producers of the vast majority of movies and owners of the nation's largest and most opulent theatres, and the thousands of independent exhibitors who depended upon access to their films. He spoke before the last of several congressional hearings on a bill that had, in various forms, been read, referred, reported, delayed and even, occasionally, voted on since 1927. Senate Bill 280, more commonly known as the Neely Bill for its sponsor, Matthew Neely (D-WV), had passed the Senate in 1939 but like its many predecessors had failed to reach the fl oor of the House for a vote. In 1940 the bill was finally withdrawn. That same year the Department of Justice and the five major film companies – Paramount, Loew's (MGM), 20th Century-Fox, Warner Bros, and RKO – agreed on a consent decree that brought an end to a separate federal action against the industry, an anti-trust lawsuit filed in 1938. Four years later the anti-trust lawsuit was reinstated, leading to the Supreme Court's Paramount Decision of 1948 that ultimately dismantled the vertically integrated film companies by divorcing production and distribution from exhibition. At that point the business of motion pictures was transformed for good.