[LB049204], Letter from Alfred Ord Tate to Samuel Insull, May 4th, 1891

https://edisondigital.rutgers.edu/document/LB049204

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Title

[LB049204], Letter from Alfred Ord Tate to Samuel Insull, May 4th, 1891

Recipient

Date

1891-05-04

Type

Folder/Volume ID

LB049-F

Microfilm ID

142:199

Document ID

LB049204

Publisher

Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University
 

Transcription

May 4, 1891
Samuel Insull, Esq.,
New York City
Dear Sir:-
I send you herewith two statements of account against the Edison Phonograph Toy Mfg. Co., which are identified by the letters A and B, amounting respectively to $85,098.80 and $8,559. 13, a total of $93,657.93.
In regard to statement A, Cost of Manufacture shown $38,5233. 55, is a ledger debit against labor and material, and refers solely to the manufacture of the various parts of the doll. It includes labor and material for 10,080 movements and bodies delivered and billed. Added to this are general ex[pense, depreciation and profit, which shows that the cost of manufacture for the whole period during which we operated under orders from the Toy Company was $63,480.65. Of this amount we have rendered a bill for $15,593.90, leaving a balance due for undelivered completed parts and parts in various stages of manufacture, of $47,887.65
RAW MATERIAL, We have in our Store Room certain raw material which was purchased exclusively for doll manufacture. I have charged this against the Toy Company at the price shown in the inventory at the Works. SPECIAL TOOLS, The total cost of special tools as shown in the ledger, is $25,957.68.
INTEREST AND BILLS RENDERED. Rental of Wax building and Doll building explain themselves. Under the two last heads the Toy Company has been charged simply for the space occupied, and I have brought the account up to May 1, 1891, for the reason that notwithstanding the attachment upon their goods, we have never accepted these in lieu of cash. We simply retain them as collateral security and the Toy Company is liable for rental while they are in our possession, the same as though they did not technically belong to the Sherriff. Statement B shows a balance due on bills rendered $8,559.13.
In discussing the question of settlement or compromise with the Toy Company, I assumed to be their intention to resume manufacture and to adopt the new model. Proceeding on these lines I would suggest first in regard to
PROFIT
The amount of profit to which we are entitled on the whole business (I mean including bills rendered) is $10,560.11. I think we ought to naïve this amount.
RAW MATERIAL. All this, with the exception of material representing a value of $3,526.93, would be available for manufacture of the new model. We can therefore make an allowance on this item of $5,747.89. SPECIAL TOOLS. The inventory valuation of these tools is as follows:
Tools abandoned with old model----------$12,258.84
Tools available for new model-------------- 6,896.50
Total inventory valuation of all tools------ $19,149.34
Cost as per ledger------------------------------ 25.957.68
Excess of ledger cost over inventory valuation} 6,808.34
We can of course allow the item, Tools available for new model

$6,890.50

And as your purpose is conciliatory I would, in
Consideration of all the circumstances, allow the
Difference between ledger CO2 and inventory
Valuation of all tools------------------------------------ 6,808.34
Total credit-------------------------------------- $13,698.84
This effects a charge against the Toy Co. of the
inventory valuation of Abandoned tools------------ 12,258.84

$25,057.68

INTEREST AND RENTAL. To obtain a satisfactory settlement, I think we could well afford to dispense with these three items, aggregating $1,978.55. As to bills rendered, these will have to stand just as they are. The allowance must be made in the statement of unliquidated damage (Statement A). In cutting out the profit on all the manufacture, we of course practically make an allowance to the extent of profit on dolls billed. There are no other items on either of these statements which to my mind we could under any circumstances waive, I suggest deductions as follows:
Profit----------------$10,580.11
Raw Material---------5,747.89
Special Tools----------13,698.84
Interest and Rental----1,978.65 32.005.49

$53,093.31

Balance due on Bills Rendered---------8,559.13
Total $61,652.44
If, as I have intimated, it were the intention of the Toy Company to resume manufacture, we could, in my opinion, afford to accept the last named amout – that is $61,652.44, in settlement of all claims.
Yours very truly,
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