[D8959ACE], Letter from Alfred Ord Tate to Samuel Insull, July 16th, 1889


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[D8959ACE], Letter from Alfred Ord Tate to Samuel Insull, July 16th, 1889

Editor's Notes

[18 handwritten pages from London about Seligmann & phono biz intrigue. Gives date of Tate's arrival in London] My Dear Insull: I confirm elsewhere the cables sent you since my arrival in London and I now give you full details of what has transpired. ## The man Moriarity who has been negotiating with Gouraud will perhaps be remembered by Mr. Edison as one of the party that came to the Laboratory with Jesse Seligmann, when the latter first commenced his enquiries. Moriarity was the young man of the party. He came to London some three weeks ago with young Seligmann, whom you have met, and their purpose was to buy out gourauds phonograph interests. ## Moriarity went to Gouraud and represented himself as the agent of a syndicate of American capitalists who had purchased the foreign graphophone rights and who desired to include the phonograph in their purchase. He represented his case in this way: His principals engaged an eminent firm of Patent Lawyers in New York to examine and report upon all the various patents which have been taken out all over the world upon talking machines; that these lawyers made an exhaustive examination and reported that the graphophone patents controlled the field and could sustain their claim to a monopoly in any court; that a commission of experts was appointed to investigate the question of manufacture and that they found that graphophones were actually being manufactured at a cost not exceeding ($19) nineteen dollars each; that the graphophones which they intended placing upon the European market were not the same class of instrument as is being made for the American market, the former being far superior both as to utility and cheapness of manufacture; that they had approached Mr Edison with the purpose of obtaining information from him in regard to the phonograph and the latter had informed them as to the cost of manufacturing the phonograph, which cost they found to be double that of the graphophone; that the Phonograph Factory was a small affair turning out very few machines; that Mr Edison stated to them that he was very doubtfull as to the success of the phonograph; that they sounded Mr Edison in regard to the value which he placed upon the foreign phonograph interests and that he gave you a letter authorizing you to deal with the matter; that they were handed a copy of Gouraud's contract with Mr Edison and had it interpreted with respect to Gouraud's rights; that they found that Mr Edison could sell out himself and Gouraud if he wishes and if Gouraud would not deal with them they could go back to America and carry through a negotiation there; that you had named Six Hundred Thousand Dollars ($600,000) as a 'laughing' price for the combined interests of Edison and Gouraud; that there were influences at work with Edison in opposition to Gouaud (they referred here, without stating names, to you and myself) which would rupture Gouraud's relations with Edison; that if their negotiations failed all arouond they would litigate imediately and generally they had full command of the entire situation and Gouraud could save himself only by selling out. ## Gouraud at once met this proposition with an absolute refusal to consider any proposition other than the sale of the combined rights of himself and Edison and then he and Moriarity commenced sparring to determine a price, Gouraud declining to name any figure. Moriarity finally offered Two Hundred Thousand Dollars ($200,000) for the whole business and Gouraud immediately repled that he would refuse as many pounds. ## It was at this stage of the proceedings that I reached London and of course Gouraud at once tackled me. I told him that I knew absolutely nothing about the affair--and assumed a neutral position, simply saying that I would be glad to submit to Mr Edison any proposition which Gouraud desired him to consider--and then I went to work to post myself. The information which I have given you I obtained from Moriarity, Gouraud and young Seligmann, the last adding further that Tomlinson had told him that the Phonograph patents are no good and given him (as he expressed it) "the inside history" of them. I have checked the sotries of these three men one with the other, and the information which I give as to what occurred before I arrived is correct. Since my arrival on Friday last I have been present at all interviews the first of which occurred on Saturday between Gouraud and Moriarity and was simply a sparring match. The only progress made was by Moriarity stating that he was authorized to offer a maximum amount--then Gouraud started in to find what that amount was, and Moriarity held back in an endeavour to get Gouraud to name a price, and the interview ended with nothing further accomplished. ## On Monday I saw Moriarity and Seligmann to see what information I could get from them and which I have embodied in the first part of this leter. This morning (Tuesday) there was a meeting or Gouraud, Moriarity, and Seligmann--a repetition of Saturday's interview. The matter now stands thus: Seligmann has an unnamed maximum price to offer and will not name it because he thinks Gouraud's ideas are too high and wishes to bring them down before risking a refusal of his limit and the collapse of his negotiations. Gouraud refuses to place any value on the business believing that he will in that way force Seligmann to name his maximum. ## Now as to Seligmann's scheme. I understand perfectly every statement he has made all of which have been advanced with the idea of lowering Gouraud's standards of values. It has been impossible for me to do anything but keep my mouth shut as tightly as possible. I cannot assist in depreciating value because if Seligmann's scheme fails and I have to deal with Gouraud on values later I don't want any chickens of that kind coming home to roost--and I don’t want to send Gouraud's ideas up any higher than they are because I think you may have some understanding with Seligmannn with which I am not familiar and it may be that they will make a proposition eventually that you can accept. ## I do not believe that Gouraud's ideas are as high as he represents them. He asked me today if I thought Mr. Edison would accept $300,000 as his share in a cash sale. I replied that there was only one man who could answer such a question and that was Mr Edison himself--which answer I made for this reason. Seligmann may have told Gouraud that you had placed that alleged 'laughing' value on the combined interests simply to bring Gouraud's ideas down and get him to consider an offer of (let us say) anything up to $1,000,000. In any such deal Edison's interest would be comparatively small, a third, and Seligmann may want to turn around and make Edison a satisfactory offer---because he knows that the value you named was for EDISON'S INTEREST ONLY--there could have been no misunderstanding about that. Therefor if any proposition is cabled to you you should see the Seligmanns and find out exactly what it means. I think there will be a lull in these negotiations for a few days which time I shall devote to calling upon the different people to whom I have letters and will post myself generally. I will end this communication here and write you another regarding Gouraud ideas and plans for commencing active business## I think I forgot to say that young Seligmann told me that his people had perfect arrangements to prevent Gouraud bring out any company in Europe. You should read this letter in connection the next one that I will send by same mail.





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