[LB062125], Letter from Thomas Alva Edison to Theodore Seligman, November 25th, 1895
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Title
[LB062125], Letter from Thomas Alva Edison to Theodore Seligman, November 25th, 1895
Author
Recipient
Date
1895-11-25
Type
Subject
Folder/Volume ID
LB062-F
Microfilm ID
143:798
Document ID
LB062125
Publisher
Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University
Has Version
Item sets
Transcription
Nov. 25th, 1895.
Theodore Seligman, Esq.,
Messrs. Seligman & Seligman,
Mills Building, Broad st., New York.
Dear sir:-
I duly received your letter of the 18th, and have again given the matter of the proposed arrangement for working the territory of the Company which you represent further consideration and discussion with my people, having before me at the same time the proposed agreement sent me. The conditions, under which it is proposed to have us operate this territory, are entirely too onerous, and after setting forth to my people that terms under which you would permit the sale of Phonographs in your territory, enthusiasm which was at first displayed has entirely subsided. Furthermore, since the interview which I held with your people in New York, we find upon investigation, that the Graphophone people have begun and are continuing to push the sale of the Graphophone, not only in this country, but abroad, very briskly, and the latest types of machines have not only the principal important features of the Phonograph, but are being sold to agents and dealers, I understand, at a the very low price of $25.00 each. In view of these facts, I do not see how it is possible for us to undertake to sell machines at a price that would meet this very active competition, and at the same time pay you royalty of $20.00 on each and every machine sold in your territory, together with a further royalty upon all supplies that would be required in connection therewith.
Article 4. of this agreement also stipulates that we are to pay all patent fees, and in addition to protect all patents, by suits for infringement and otherwise in all the territory controlled by you. It was not contemplated that this should be done at the time of my interview, at least, I do not recollect stipulating that we should do so.
Article 5 sets forth the number of machines to be sold during the first, second and each subsequent year thereafter, and I find that although the parties with whom I have been negotiating, fully expected to make large sales, still when we come to incorporate an absolute agreement, on their part, to take the number of machines specified, they dissent from having any such figures incorporated in their agreement, as those mentioned by you in your proposed agreement.
Article 8 is also very obnoxious to the people with whom I was negotiating, as they would not, under any circumstances, permit the examination of their books by anybody, even myself.
There are other stipulations in the proposed agreement that we could not think of accepting, under any circumstances, and the position which you assume, in connection with this matter is such as to absolutely prevent us from making any satisfactory arrangement with our agents that would prove mutually advantageous.
In endeavoring to take up and push actively the sale of Phonographs and supplies therefore, throughout your territory, our entire idea was to make such arrangements as would tend to effect the very largest sales of machines, our agents agreeing to take a minimum output per week, and this output to be increased gradually to meet increased demands, which we had e every good reason to believe would be effectively produced after the first six months, or after they had succeeding in arranging their sub-agencies throughout your territory. They are doubtless still prepared to proceed on about these lines, but refuse to permit an examination of their books, which would naturally divulge names of their customers, which is a thing which they did not at all contemplate would be expected of them.
In the case of the Kinetoscope business, we simply insisted upon their taking a quantity of machines per week, placing with us a sufficiently large order to enable us to manufacture at the lowest possible cost with a given output, but it was never contemplated that we would examine their books, or in any way interfere in their business, so far as the sale of machines and supplies therefore were concerned. The large business done in the Kinetoscope, and the consequent profits realized therefrom was the reason which brought up the question of endeavoring to make a satisfactory arrangement with you, whereby the Phonograph business could be taken up and handled on about the same lines. We have endeavored to see if a counter-proposition could not be made, which might possibly be acceptable to the Company, but the stipulations as set forth in the proposed agreement submitted by you, are so onerous, and were objected to so strenuously by our people, that it has practically resulted in an entire abandonment on the part of our people, and the consequent decision on our part that we could not make satisfactory arrangements on the terms and conditions proposed by your Company. Should any understanding agreement be reached between us, it would have to be entirely on the understanding that our agents and their sub-agents would not be in any way hampered b in selling machines, except, of course, that they would not attempt to enter or sell Phonographs and supplies therefore in the territory, the patent rights for which have already been disposed of by you.
Yours very truly,
Thomas A Edison
Theodore Seligman, Esq.,
Messrs. Seligman & Seligman,
Mills Building, Broad st., New York.
Dear sir:-
I duly received your letter of the 18th, and have again given the matter of the proposed arrangement for working the territory of the Company which you represent further consideration and discussion with my people, having before me at the same time the proposed agreement sent me. The conditions, under which it is proposed to have us operate this territory, are entirely too onerous, and after setting forth to my people that terms under which you would permit the sale of Phonographs in your territory, enthusiasm which was at first displayed has entirely subsided. Furthermore, since the interview which I held with your people in New York, we find upon investigation, that the Graphophone people have begun and are continuing to push the sale of the Graphophone, not only in this country, but abroad, very briskly, and the latest types of machines have not only the principal important features of the Phonograph, but are being sold to agents and dealers, I understand, at a the very low price of $25.00 each. In view of these facts, I do not see how it is possible for us to undertake to sell machines at a price that would meet this very active competition, and at the same time pay you royalty of $20.00 on each and every machine sold in your territory, together with a further royalty upon all supplies that would be required in connection therewith.
Article 4. of this agreement also stipulates that we are to pay all patent fees, and in addition to protect all patents, by suits for infringement and otherwise in all the territory controlled by you. It was not contemplated that this should be done at the time of my interview, at least, I do not recollect stipulating that we should do so.
Article 5 sets forth the number of machines to be sold during the first, second and each subsequent year thereafter, and I find that although the parties with whom I have been negotiating, fully expected to make large sales, still when we come to incorporate an absolute agreement, on their part, to take the number of machines specified, they dissent from having any such figures incorporated in their agreement, as those mentioned by you in your proposed agreement.
Article 8 is also very obnoxious to the people with whom I was negotiating, as they would not, under any circumstances, permit the examination of their books by anybody, even myself.
There are other stipulations in the proposed agreement that we could not think of accepting, under any circumstances, and the position which you assume, in connection with this matter is such as to absolutely prevent us from making any satisfactory arrangement with our agents that would prove mutually advantageous.
In endeavoring to take up and push actively the sale of Phonographs and supplies therefore, throughout your territory, our entire idea was to make such arrangements as would tend to effect the very largest sales of machines, our agents agreeing to take a minimum output per week, and this output to be increased gradually to meet increased demands, which we had e every good reason to believe would be effectively produced after the first six months, or after they had succeeding in arranging their sub-agencies throughout your territory. They are doubtless still prepared to proceed on about these lines, but refuse to permit an examination of their books, which would naturally divulge names of their customers, which is a thing which they did not at all contemplate would be expected of them.
In the case of the Kinetoscope business, we simply insisted upon their taking a quantity of machines per week, placing with us a sufficiently large order to enable us to manufacture at the lowest possible cost with a given output, but it was never contemplated that we would examine their books, or in any way interfere in their business, so far as the sale of machines and supplies therefore were concerned. The large business done in the Kinetoscope, and the consequent profits realized therefrom was the reason which brought up the question of endeavoring to make a satisfactory arrangement with you, whereby the Phonograph business could be taken up and handled on about the same lines. We have endeavored to see if a counter-proposition could not be made, which might possibly be acceptable to the Company, but the stipulations as set forth in the proposed agreement submitted by you, are so onerous, and were objected to so strenuously by our people, that it has practically resulted in an entire abandonment on the part of our people, and the consequent decision on our part that we could not make satisfactory arrangements on the terms and conditions proposed by your Company. Should any understanding agreement be reached between us, it would have to be entirely on the understanding that our agents and their sub-agents would not be in any way hampered b in selling machines, except, of course, that they would not attempt to enter or sell Phonographs and supplies therefore in the territory, the patent rights for which have already been disposed of by you.
Yours very truly,
Thomas A Edison