[D8905AKJ], Memorandum, Thomas Alva Edison, 1889
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Title
[D8905AKJ], Memorandum, Thomas Alva Edison, 1889
Editor's Notes
The following is a memorandum of the industry undertakings which I have been at work in for some time. I had no intention of taking in partners as my principal men & myself have made & have a large amount of money to invest. Our intention was to buy up all the Magnetic Iron ore mines in the state of Pennsylvania nearly all of which are contained in the only azore rucks of the of the state , an area about 7 by 25 miles--while they have but very little value at present owing to the fact that the grade of ore is almost every case is too low to be used in a furnaces or that are to much with sulphur phosphorus or titanium. Yet with the new process which I have the grade of the ore is raised cheaply & economically above that of my commercial ores in the world--sulphur & titanium are practically elemental & ores much too high in phosphorous tia This element reduced far below the requirements of the Bessemer furnace--These deposits are in the center of the iron industry of the US> The freight rates average less than 50 ents to 180 blast furnaces--3/4 of these furnaces are out of blast for want of local ore which renders it almost impossible to compete with the southern ore areas and also [--------] most of the furnaces are of the old type. We have already erected a large mill at Bechtelsville Pennsylvania 300 feet long 40 high--capable of crushing 200 tons DAILY--when I left we were only running the outcrop of the vein carrying only 14 percent of iron as were making money and delivering to the blast furnace 65 per cent ore, when we reach the good part of the vein which carries 30 per cent and in 8 foot wide we shall make at least 150 percent on the investment. The quality of the pig iron produced from the furnace changed from No 3 and white to 75 percent.####No 1 foundry iron on the addition of 25 per cent of our ore. The furnace master couldn't explain the reason for this,####All of my patents fo concentrating iron and gold ores are owned by a Co in the US called the Edison Ore Milling Co which has been in existence about 8 years during the whole of this period I have been experimenting on working low grade rebellious gold ores and now ores and have expanded a very large sum of money-- This Co simply furnishes the money for conducting experiments and does not engage in exploitation. The capital is 2 million dollars---####A Local Co was formed some 6 months ago on the completion of my experiments with iron ore which was conducted on quite a large scale at my laboratory-- ores from over 60 mines were tried and the machinery perfected so as to be able to cope with every kind of magnetic iron ore as well as many ores which was not magnetic####The Local Co has the license for the states of Pennsylvania & the New Jersey-- The stockholders are solely myself and assistants. It is this Co which has built the Mill.####After seeing the perfect working of the plant and its great apability of working money It occurred to me that if I could get possession of practically all the magnetic ore deposits in the Center of the coal & iron district of Penna that with this process I would have a monopoly of one of the most valuable sources of natural wealth in the US. So we went to work and devised a process of locating deposits by modern methods so perfect that we can discover and make an accurate magnetic survey of a mine heretofore unknown and not to be directed by the old magnetic needle used by the miners. ####We can beforehand tell where to sink shafts or run tunnels and the extent width & length of the vein depth & give a close guess at the quality of the ore although in a wheatfield. ####Mr. Kennelly and myself found three valuable deposits in this way not two miles from our present mill and I bought outright for cash the mineral rights from the farmers on whose farms the deposits occurred The costs of these rights are from $500 to $3000 according to the nature of the man and $150 for each acre spoiled by us for farming purposes-- I had expected to use up about 180 to $200,000 in acquiring these rights which are for eternity--and would put up one mill additional of 1000 tons capacity daily costing about $85,000-- and after running for a sufficient length of time to show the great value of the property sell out to a Company a portion so as to raise money to put up mills for 6 or 8000 tons daily capacity and the erection of several modern blast furnaces and the leasing of a number of those in the vicinity of several modern blast furnaces####[crossed out: I also am going to purchase gold mines in [Canada?] where the stock holders can deliver a good little--]####The 2nd part of the Ore business is working gold on which are low grade & very rebellious ore of the kind occurs in the province of Ontario Canada and in North Carolina a vast depot of auriferous Mispicked ore occurs in the [Mammora?] district Canada one Co spent over 500,000 trying to work the ore but failed as no known process is applicable for two years I have been experimenting with it & can work it perfectly [them?], ore will average twelve dollars gold per ton. The cost of working will not exceed 8 The investment in mill will not exceed for 100 tons $80,000-- The cost of mine is uncertain-- I think if the owners can be made to agree the particular part of the section I refer to could be bought for 50000 or less-- this Co own if I remember right about 1000 feet in the vein--The vein has been traced 3 miles the balance could be secured on options. These mines are in civilized communities cheap labor & where men of talent will live which is not the case far west.####The money made in mining depends not so much on the richness of the ore as good management and plenty of ore even if it is of very low grade. If these ores were free milling ores the lode would be worth ten million but being unworkable by known processes they are valueless. The same occurs in North Carolina & Ga as in California but occuring in a rebellious form is worthless.####The other scheme is that of Manufacturing. [Having] sold out all my factories for 3,500,000 to the Villard & the Deutche Bank people. These factories having cleared 525,000 cash during the year above all expenses--depreciation written off by Mr. Villard's own accountants 13 & finding that for various reasons my men are abnormally fortunate in managing factories### I have started another manufactory plant not however for electric lighting but in other branches of industry--for this purpose I have purchased an own 47 acres of ground 11 miles from New York and 2 miles from Newark one railroad runway through the prooperty another with 1500 feet, an electric street car in front of property with Macadinized road 7 miles long connecting three towns with Newark. Canal 4000 feet away-- there is a village all around the property and streets are all laid out near it. I am also trying to secure 30 more across--the cost per acre averaged about 900 dollars. I have the plans finished and will commence on my return . The eviction at a central point on the property a steam plant for 800 horse power provided with triple expansion engines and every device for producing power cheaply--The whole of this power I turn into electricity and then distribute the power to the various factories which I shall erect from time to time so that ultimately instead of ten of 15 different factories with as many different engineers firemen etc. Boilers [uneconomical?] Engines I have but one Engineer & the most economical steam plant known at one central point-- from this point also I distribute live steam & have a fire system with water & telephone to all the factories & with tracks put all products directly in the cars-- I have already two factories erected on the property which are in full blast. In one we make exclusively batteries for phonographs, telephones & telegraphs-- The other manufactures from crude material the wax used in the phonograph, Insulating material for underground electric wires, uninflammable Varnish & other things which we have found from time to time in the laboratory-- These two factories are small but will earn about 25 to 30 percent on the investment.####The basis I am going to organize this factory Village in the same as that followed by me in the phonograph works which now covers 3 acres of ground employs 400 hands turns out $2,250 worth of goods daily capital is $300,000 of which 50,000 is trust stock & gets nothing until 20 per cent paid when it comes in prorate for any excess. In the sale of the phonograph I reserved all manufacturing rights. This I sold to the phonograph works on the following basis--####for every share paid for in cash I need 4/10 of a share-- as this would not give me control a sufficient amount of trust stock was issued to me to control, but such trust stock gets no dividends in any year until the regular stock pays 20 percent anything left over is divided prorate with the whole stock-- In other words I reserve manufacturing rights for my inventions wherever possible and I propose transferring these rights to the new Mfg Co on the basis of the issue to me of 4/10 of one share for every share subscribed & paid for in cash and [-----] of 3/10 of a share trust stock to give me control but not participating in div until 20 percent is paid on the regular stock. The 4/10 & cash stock being regular stock. I not only transfer the mfg rights to the mfg co for 4/10 of a share per share of cash stock but conduct and manage the works without salary and give the facilities of Laboratory at cost to start each factory also the benefits without salary of my principal assistants. I reimbursing them from my share.####The works which I propose erecting on the new property is 1st Copper refining by Electricity--####2nd Large Chemical works to manufacture several discoveries in industrial chemistry made at laboratory.####3rd Large machine works for manufacturing Mining & Milling Machinery--Steam Engines--Electric Rock drills--other heavy machinery####4th=factory for Duplicating Phonographic music, novels, etc.####5th Small tool shop to manufacture--Type writers, Telephones, & other specialties--####I expect to cover the property within six years and total investment will be in round numbers two million dollars--####Having described to you briefly what I am & propose doing I am at loss to make a proposition as to obtaining money from yourself and friends for these schemes.####Forgot to mention that the Patent Co charge a royalty to the Local Cos of 15 cents for every saleable ton of ore. This is small considering that the Local Co makes $2 per ton= [overstruck: only] on gold ore it will charge a scaled royally of about 1/8th of the profits=#####The expenses of my Laboratory average about 130,000 annually of which Various Co pay about 60,000 leaving 90,000 to be paid by me. These expenses previous to my selling out Mr. Villard were bourne by my various factories and Cos. Hence I am compelled to exact the percentage named in the various enterprises to recompense for either exclusive rights & factories of Laboratory together wih my
Supplied year
Author
Mentioned
Date
1889-00-00
Type
Subject
Folder/Volume ID
D8905-F
Microfilm ID
125:538
Document ID
D8905AKJ
Publisher
Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University