[D8818ANF], Letter from Alfred Ord Tate to Germania Bank, J A Morschhauser, June 20th, 1888
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Title
[D8818ANF], Letter from Alfred Ord Tate to Germania Bank, J A Morschhauser, June 20th, 1888
Editor's Notes
Fearing the information I gave you is not full enough to answer all questions to your Directors, I submit the following: TAE under certain agreements has had conferred upon him exclusive right to manufacture phonographs for the whole world. These rights he transferred to Edison Phonograph Works, a corporation organized with a capital of $300, 000, divided into 3,000 shares of the par value of $100. # This company supplies all orders for the United States, Canada, and all countries for phonographs and supplies at the actual cost of manufacture, plus 20 percent of such cost, cost of manufacture being defined to include cost of labor, material and general expenses. This gives the Edison Phonograph Works a profit of 20% on the output of its factory. This 20% figures on the cost of phonographs which we are making means a profit of about $3.75 on each. The factory we are erecting has a capacity of 200 phonographs per day, together with facilities for a full compliment of supplies, on which we make 20%. # TAE receives 52% of the capital stock of the Edison Phonograph Works, or 1560 shares, in consideration of the transfer to that Company of all his exclusive manufacturing rights. This leaves the Treasury 48%, or 1440 shares. # Of the 1560 shares TAE receives he deposits 38% or 592 8/10 shares with a Trustee upon the following conditions (quote from the contract): (1) 'That said stock so delivered to the trustee shall not participate in any of the earnings of the party of the second party, nor be entitled to share in any dividends. If, however, the earnings of the Company which it decides to declare as dividends in any one year amount to over 25% on its entire stock exclusive of such stock so held in trust as aforesaid, then such trust stock shall be entitled to participate ratably with the other stock in such excess; and # (2) That the party of the first part, his heirs, executors, administrators and assigns shall have the exclusive right to vote upon the stock so held in trust at all meetings of the Company, and a proxy shall be given him or them for such purpose; and # (3) That in case the Company is dissolved or should go into liquidation, such stock shall not be entitled to participate or share in the property or assets of the Company.' # TAE desires to keep voting control of Edison Phonograph Works, but did not wish to take the larger share of the profits, or have his interest represent the larger portion of the Company's property. # Under the arrangement made he holds 967 2/10 shares of regular stock as against 1440 shares of Treasury stock, the relation between these being about 40 to 60. # Treasury stock is being subscribed for at par. We already placed 900 shares ($90,000). We wish to place about 200 shares ($20,000) more, which will leave 340 shares in our Treasury. # If any of your Directors would like to see the agreements which I have referred to, or any of our records, I would be happy to take the papers to your Bank, or they can always be seen at this office.
Author
Recipient
Mentioned
Date
1888-06-20
Type
Subject
Folder/Volume ID
D8818-F
Microfilm ID
122:377
Document ID
D8818ANF
Publisher
Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University