[MU125], Letter from Francis Robbins Upton, Edison Lamp Co to Edison Electric Light Co, Edward Hibberd Johnson, April 3rd, 1889
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Title
[MU125], Letter from Francis Robbins Upton, Edison Lamp Co to Edison Electric Light Co, Edward Hibberd Johnson, April 3rd, 1889
Editor's Notes
[OCR] Dear Sir:- Regarding the question of reduction in the price of lamps, I am very decidedly of the opinion that the Edison Company should uphold the present price of Eighty-five (.85) cents for lamps. MY opinion is based upon my firm conviction that the Edison Company will, in the course of two years, be placed by the Courts in the position of having an absolute monopoly of incandescent lighting. ##I think that the Directors of the Edison Electric Light Co. should consider whether the business policy of the Edison Company should be based upon a firm belief of the validity of the Edison patents, and all its policy conducted by this belief, or if they do not firmly believe that the patents are perfect and not assailable, then the Edison Company must meet competition from infringing companies by reducing the price of lamps. I believe that the Edison Company will command its trade by holding firmly to its price, and by announcing as its business policy, that it intends to hold aloof from any combination or consolidation with infringing companies, that it intends to enforce its patents, and that it does not consider that it can in any way meet the price of infringers. The Edison lamp should be sold as a lamp protected by patents, and parties buying other lamps should be made to feel that they are buying at a lower price for the reason that they are buying an unpatented and infringing article. ## The fact that the opposition offer lamps at a much lower price than the Edison lamp, if the Edison Company assert their claim in proper manner, will be a very strong argument for the viability of the Edison patents. ## I do not believe that even in face of great losses that are now being made by customers bring lamps from other companies, that the Edison Company should run and break prices, but that it should stand firm and by its conduct in holding to its prices, assert that it has full faith in its patents, and that it cares not Whether sales are made by other companies or by itself, that it will insist upon its rights and expect to recover any present loss in future damages. ## If the Edison Company do not consider their patents as thoroughly strong and absolutely to be relied upon, there is but one course open, that is, to meet competition by selling lamps at the price which they are offered at by other companies, and to endeavor to make up its losses by selling more lamps at smaller prices. ## There is one condition of affairs that would warrant the Edison Company in breaking prices to a very low point. To-day the opposition to the Edison Company has become united into practically two companies with one of these companies controlling the trade. This company is known to be paying out very large sums under guarantees to other companies and to its own stockholders yearly. All information tends to show that the selling and manufacturing interests of this company are very much disorganized. Facts are stated showing that the selling department of this company is disorganized having now the men from three corporations to provide for, and the jealousy of three large corporations to satisfy. Information obtained from the factory of the Sawyer-Mann Company proves that at present the whole method of making lamps is under debate. There are now three distinct methods employed by this company, with three distinct forces of men, each force endeavoring to prove that its own method is the best, and it is proposed to re-organize one of the factorys and to put in the new method of making lamps which will combine the best of all three. ## This means a great deal of trouble and large expense for some time to come in the manufacture of lamps. This I know from sad experience in our own factory that any changes, no matter how trivial will result in having to make many other changes, and end in the disorganization of the whole factory, and a very large increase of the cost of lamps. The Edison-Swan Company in England went through this same experience in moving their factory from Newcastle to London. The lamps produced after their removal were very bad and the troubles met with were very great, requiring a year of time to get over them. If the Edison Company mean to meet the Westinghouse Company in commercial opposition, no better time than the present can be found, for by taking away the trade of lamps from the Westinghouse Company the expense of making the lamps in their factories will be very much increased, while the Edison Company will reap the advantage of the sales. ## It is for the Edison Company before reducing the price of lamps to consider whether the reduction is made as a blow struck home for the purpose of controlling the trade and to accomplish the ulterior object of disabling the Edison Company's antagonist, or is merely meant as a feint which will have little effect upon the amount of Edison trade, and will simply decrease the Westinghouse Company's profits and not strike home. ## I consider that if the Edison Company make any reduction in their price, it should be such a reduction as would carry the trade to the Edison Company from the Westinghouse Companies, and will destroy the Westinghouse Company's profits. ## The Edison Company are in thoroughly strong financial position, having no preferences or dividends to pay out, unless they arc earned, while the Westinghouse Company has fixed charges amounting to Seven Hundred Thousand Dollars a year and no income except such as is derived from its warfare upon the Edison Co. ## If the Edison Company decide to cut, it should be part of a well matured and well considered plan, and if the cut is made, it should be made in connection with the devolopement of several other plans now laid to ward off competition of the Westinghouse Company. ## I think that when the plans regarding the challenge to Westinghouse are matured, and when the machinery ordered by the New York state has been purchased, and when Mr. Edison is prepared to announce publicly that he can meet the Pittsburg Suit with a much improved lamp, and when the announcement and advertisements of the Edison Company's position regarding the expiration of the Edison Canadian Patents can be brought before the public, and when a strong attack can be brought upon Mr. Westinghouse's position regarding the Automatic Brake, and when an active and vigorous effort can be made to place plants in small towns at prices which will meet the Westinghouse Company, then, all this should be vigorously pushed together with the cut in the price of the lamp which will control the trade absolutely. ## I believe if the information which is considered to be correct by the Edison Company is correct, that Mr. Westinghouse can be brought to an agreement at least that he will quote the same price upon incandescent lamps that the Edison Company do, and give no rebates or allowances. ## This is the position that the fight should be made for, for then the Edison Company can take their chances of controlling the trade due to the quality of the lamp offered, and the probability of the Edison Company winning their patents. ## I think that before any cut is made in the lamp, that the Westinghouse Company should be notified that the Edison Company request them to agree to charge the same price for lamps that the Edison Company do; otherwise, the Edison Company is prepared to meet any competition regarding lamps that the Westinghouse Company may bring to bear upon them.
Date
1889-04-03
Type
Folder/Volume ID
MU12-F
Microfilm ID
95:848
Document ID
MU125
Publisher
Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University