Letterhead of Foreign Department of the National Phonograph Co. Edison Manufacturing Co. Bates Manufacturing Co.
32 Rempart St. Georges.
Antwerp, Belgium.
August 27th. 1903
My Dear Mr. Edison:-
I have at [illegible overstruck text] last gotten down to writing you. I tried the stenographers over here with the result that I had to give them up. So here goes for my own typewriting. I shalll try and give you my ideas of the situation so far as I have gone.
LONDON. I have canvassed the situation here quite thoroughly, although there are still a few people for me to see on my return the agreements, or what I mean is some portions of it. They are particularly opposed to the clause which calls for their giving the names of their dealers (I refer of course to the jobbers). I am afraid that some of them will drop the line entirely, but we must take a stand on this and so insist upon it. Then quite a few of them are opposed to the two shillings price, but both Hwite myself have about won them over. Pathe is selling his records wholesale at from nineteen cents down, according to the quantity offered. Columbia is badly crippled, and it looks very much as though they will have to quit. Both Pathe and Columbia cylinder records are being sold by dealers to the public as low as 25 cents. Of course we have got to meet this with a getter grade of goods, and I am sure that eventually the contract system will prevail, and then we can dictate absolutely as to the issuance and sale of our goods, and particularly records. The [illegible overstruck text]jobbers are very much afraid that the discount on records of .50% is too much profit, as dealers here are not accustomed to any such profit. The Gramophone Co. have no dealing with middlemen or jobbers, trading directly with the dealer, and allowing only 33 1/3% on records, and in the case of some few large dealers the discount is 40%, but no higher. The Gramophone Co. get 62 cents for the 7" record, $1.25 for the 10" record and from $1.75 for $2.50 for the very large records, the higher price being obtained for singers like Tomagno, Scotti, DeReake, &c. When they are able to tell their goods at these prices we surely ought to obtain 50 cents or two shillings.
PARIS. I find that conditions here as well as throughout here as well as throughout France are better than in the British Isles, as prices are better maintained, and they get a better price for the 7" records, or 70 cents. Furthermore, the Frenchman demands first class records as to to quality. It is a fact that high class singers have been hissed off the stage here where they have made slight mistakes in singing, and such people as the DeReakes are passe' with the Frenchmen. I find that the disc records made in France are the best that are produced anywhere, and I also find that the man who is making them is Walcutt who used to be connected with the North American Co., and afterwards went in with Walter Miller. He seems to have done a great deal better than other original makers of disc records. He does it all himself, keeping his [illegible overstruck text] methods, tools, &c. entirely to himself. He always was inclined to be cautious.
Generally speaking I find that the Gramophone Co. have their machines and records everywhere, and of course they are able to do it for the reason that they are making records right on the ground, to do it for the reason that they are making records right on the ground, and thus giving the German, French, Swiss, Flemish, Russian, Danish, &c.&c. masses what they want, whereas we do not. This is what they are doing the business on. Purely commercial, no patents. Last year they (the parent company in London) made 143,000 pounds, and I am advised that this year they will make over 300,000 pounds. Now, after getting control of the parent Zonophone Co., they are after the source of their machine supply (the Victor Co., in Philadelphia) and the three principal men in the Company are now in America to purchase it. Notwithstanding this I feel certain that we can give them good run for the money once we get started. I also find that the people who are operating the different local companies in France, Italy, and elsewhere, are dissatisfied, so that we may be able later to secure some good talking machine people for our business. It would seem to me that the proper way to take hold if things here is to have one good man to look after the business in the different countries as a whole the same as I do in America, but the point is who is the man. I am not prepared to say that White is big enough to swing it. I hardly think he has the experience necessary. Then again I find that he lacks nerve, which to my mind is very essential. However, as we have given him the opportunity I suppose we must let him go on for the present. I am satisfied in my own mind that to make this field a success we must have a broadminded first class commercial man to look after matters generally.
I am somewhat disgusted with these people over here as a whole. They are very slow, and it is impossible to do much business with them in a day. As a result I have not gotten on as well as I expected, so I do not see how I [illegible overstruck text] can get away until the latter end of September. If I could only stay here for six months there would be a different story to tell. The field is enormous, it is particularly virgin territory for us, and I am certain that within a year and a half at the latest I would doing more business than either the Gramophone Co. or Pathe. The Columbia Co. is out of it.
I have received word from Marks from London that Pathe has gotten out an indestructible record similar to the Miller-Pearman record, and that it is being manufactured under a patent granted to Pathe dated March 14, 1903, or about two weeks before the date of our patent in France. A copy of this patent has been sent on to Judge Hayes, so if you have not already seen it, see that it is sent up at once. This seems very strange to me, and I think would court an investigation. Were the foreign patents filed as quickly as they should have been? If so, how long after the filing of the American Patents? The trouble is in France and England that the man who files first gets the patent. We shall keep after Pathe on the moulding patents. I understand the hearing done not come up until early in October, when court reopens. I shall have a quantity of the Pathe new moulded records obtained and sent on to you as soon as possible.
I am expecting to get down to see Stolwerck early next week. He has been away for a holiday, but will return the letter end of the week. I shall go on to Berlin from there to look over the situation there, but I am satisfied in my own mind that conditions are about the same in Germany, and that we are not well represented. However, it may be that Stollwerck are the people to represent us, but from what I hear about their chocolate it is vile.
NEW RECORD PLANTS. We have been having a hard time of it securing suitable places. In Paris we have run against the authorities, as where plants are installed using waxes of any kind a permit is necessary from the authorities. Then to find the factory is no easy job, but we have several in view, and will no doubt secure one that will be suitable. In Belgium we have found a fine building here in Antwerp 200' X 25' It was old schoolhouse, built of brick and with stone floors. There is lots of room outside of the this building. The asking price of the property is $15,000., but we are trying to get a lease of it for five years at $1,000. per year or less, with an option to purchase at any time within this period. Then we have another place in view, which is quite good. Same rent, but the lighting facilities are not as good. The insurance people are also making some objections, so we may abandon this altogether, as I do not want to be having trouble with insurance people, and over here they are more independent than with us. There is no reason why the Belgium and German plants should not be put in operation together, and the man in charge is working it in this way.
I am very glad to hear that you approve of Marks incorporating the Edison Manufacturing Co. in England. These fakirs over here seem to think nothing of using your name for all sorts of things, and I have given Marks a general order to bring suit agains them at once unless they give an undertaking to discontinue the use of your name in every case. I want to discuss with you when I get back the advisability of incorporating the Edison Manufacturing Co. in all of the principal foreign countries of Europe and such other places as may be decided upon. These same remarks would apply equally in the case of the National Co., although if you could see your way to doing so I should very much like to see the selling and of the phonograph business handled by a company or companies bearing your name, having the name exactly the same in all cases. If we could substitute and use the "EDISON Manufacturing Co., Limited" all the way through I am sure that within a short time it could by advertising and circularizing become a household word in the community. Of one thing I am certain the use of your name here carries more weight than it does with us. I trust therefore you will consider it seriously.
The Gramophone Co. are not going to have a monopoly of the disc business over here. They have frozen out F. M. Prescott in Germany, who handled the Zonophone Co.'s business there, but he has started another company to compete with them. As to how he will succeed remains to be seen. He must be given credit for being a hustler, and the only thing he will have to do is to produce a record that will be as good as their product, when he will get some of the business at least. He is still as crooked as a Ram's Horn, hence his dismissal. I also saw and heard in Paris a 7" disc record manufactured in London that was very fair indeed. It will be put out at RETAIL for twenty five cents. It will not last long, but I understand that it does last as long as the regular gramophone records. If it is properly pushed it will no doubt cut into the disc business materially. This is expected to be put on the market within a month, and particularly for the holiday trade. The way orders are beginning to roll into us I feel certain that we will have no cause to complain, not only here, but also in America. What I am afraid of is that we are going to be in the same boat as heretofore and that is lack of stock to take care of the orders, and particularly records. The Paris end of the Gramophone Co. carry a very heavy stock of disc records, and I am informed by Mr. Clark the Managing Director that their total loss on orders for records has never exceeded five per cent. This is very good of course.
I am woefully disappointed at the offices here. They are very small indeed and away off on a side street amidst dwelling houses. I do not know what Stevens was thinking of when he took them. Then again Antwerp is out of the world. Nobody comes here but tourists. I will be glad when we move our principal offices over to London, but this cannot take place until early next year, as our stock rooms are beginning to fill up and we could not of course move without hindrance to our trade, which would be fatal at this time, so there is nothing to do but make the best of it.
EDISON-BELL. I see that Patrick has served notice on us to ship their goods and that under Judge Hayes instructions we have refused. This is as it should be. They are getting machines through other sources, but we hope to locate the source of their supply shortly, and I shall at once make a [illegible overtstruck text] thorough investigation and stop it if possible. They are getting desperate, as before I left London their stock of machines was practically exhausted, and they had been and were then working to get our apparatus through other channels. Even if they do succeed in getting some machines they cannot secure any great quantity and surely not enough to take care of their retail trade, so that their trade with dealers will be little if anything. They brought suit against the concern making the Pettit record in Liverpool and were defeated, which would indicate that the Lambert patents they have purchased amount to nothing. Then again the sale of the Lambert records ever here by them, directly or indirectly, amounts to nothing. In fact the Lambert record was accorded the same reception by the public here as with us, i. e. a very very cold frost. The records which they manufacture under the old duplicating process are not only vile, but the blanks purchased from Pathe are poor, the records are sold at any old price, and the public will not have them. So taken altogether I am certain that Mr. Hough and his Company are going to have pretty hard time this fall and winter. I have seen none of them yet, but they will doubtless look me up on my return to London.
I have some letters from Logue that Gladstone is getting very active and that he has succeeded in getting some orders from the Michigan Central. I am rather surprised at this, as I cannot see how they can take up his so called new battery that has never been tried practically. In fact before I left no one had even seen his complete battery, and so far as we were able to learn there were none on the market. Furthermore, Hayes has not succeeded in getting such renewals, affidavits, &c. as he requires. This is very strange, but I can only assume that Hayes is away and that he is not giving it his personal attention.
RUSSIA. From all the information I can gather the Gramophone has a practical monopoly of the talking machine business there. It will not be possible for me to go into Russia this trip, but I am advised that the field is enormous, and we should get in as soon as we can. I could use a number of good managers not only in this country but in the other countries as well. It is going to be difficult to get just the men we want, as they are scarce over here as well as with us. I refer of course to men who can use ordinary good judgment. I am afraid of Graf, who has been with us a long time, but who has developed somewhat of a swelled head. As soon as they get a little authority they overstep the mark, make enemies and eventually fail. This is what we must watch very closely. Why is it? Echo answers WHY? I have been impressing upon White the necessity of getting native born[illegible overstruck text] people to look after our interests in the different [illegible overstruck text] countries, those familiar with the commercial methods of their own particularly country, but I find they are few and far between. Then again they must be entirely trustworthy in every way. They can be found I am sure, but it will take time. As to whether White fully grasps the situation I am not prepared to say at the moment.
The labor market here is very good indeed, and very cheap. Such help as porters, or people in the wax plants can be obtained readily at $4. a week for men, and boys for practically nothing. So that the cost of records will be very low indeed. These same remarks will apply all over Europe, as well as in the British Isles. We should therefore be able to make plenty of money.
Personally I have enjoyed the trip very much, although I must say that there has been more business than anything else. The fact that they are so slow accounts for this. They are like the Spaniard always talking Manyana, Manyana, or in other words "to-morrow", and where a man has been brought up in the "Edison" business it is hard to have to wait and wait and wait. I do not want to get used to it, and hope I will not.
Trusting this finds you enjoying your usual good health, and with kind regards I remain,
Very truly yours,
W. E. Gilmore
P. S. If we can only get out a good universal recorder for all around work it will be a grand thing. I hope your experiments in this direction are proving successful.

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