[D8962AAO], Letter from Metropolitan Phonograph Co, James B Metcalf to Jesse H Lippincott, August 1st, 1889


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[D8962AAO], Letter from Metropolitan Phonograph Co, James B Metcalf to Jesse H Lippincott, August 1st, 1889

Editor's Notes

"I have been, as Chairman of the Executive Committee of the Metropolitan Phonograph Company, requested by its Board of Directors to formally present to your Company the claim for damages sustained by our Company owing to the non-delivery by your company, as agreed, of both Phonographs and Phonograph-Graphophones-which claim has frequently during the past six months been verbally called to your official notice in interviews with officers of our Company, and with the outlines of which you are familiar.### When, in December last, the question of renting #257 Fifth Avenue for the offices and salesroom of our Company, was under discussion-you expressed yourself as strongly in favor of the action which was then taken; no better advertisement of an enterprise in which you were so largely interested-not only here but throughout the whole United States-could have been desired by you, and well your Company has profited by it. Had our Company been able to obtain all the machines we needed, and called for, “by the 10th of January”, at which theim they were promised us in December, we would have been willing to have given your Company that advertisement gratuitously, as we would have then shared the resulting profits with you.### As we did not then, and have not even yet, obtained machines of the quality and in the quantity promised, what has been the result? Having taken posession of and furnished our expensive offices in the last week of December, we organized our working force on the basis of orders which we then had on our books, or were promised us as soon as we would be ready to fill them, and for which your Company had given us reason to expect we would be able to furnish the machines within two weeks. In the face of other promises of your Company, from week to week, almost from day to day, as can easily be proved, when these first were unfulfilled, we did not dare for a long time to reduce our working force, as ,had the machines been at any of those times delivered, our employees would all have been fully occupied. As the months went by however, and no machines worth mentioning were delivered us, our subscribers became suspicious that the inventions were not yet perfected-rumors of injunctions and interferences prevailed, and finally, becoming disgusted with out delay, many of them withdrew their names and others refused to receive the machines when eventually tendered them, some giving the reasons stated above, others the near approach of the dull summer months, others their unwillingness to sign the extraordinary lease which your Company has seen fit to prescribe, and others frankly stating that as the novelty of the invention had worn off they did not care for it. ### In other words, the “Boom” for which, in January, the Public were prepared, and in which they were then anxious to participate, had spent itself, and when your Company, four or five months after, were ready to deliver us machines, such as they were, in any considerable quantities, the reaction had set in, and we were left to suffer from it. ### In the meantime, with the aid of our offices, our exhibitions, our expenditures, and our endeavors to push the enterprise, your Company has succeeded in profitably placing the stock of numberless Local Companies all over the Unites States-while we, for the reasons above given, have been unable, up to this time, to place more than 200 machines in our district, although we have advertised, employed canvassers, and used every known means to add to our subscription list. ### Coming to realize the situation, our Executive Committee has within the past few months out down our expenses to a minimum; we have rented the third floor of our building, we have placed our second floor in the market for a tenant, we have discharged our Superintendent, and have reduced our pay roll over 50%, but even now our expenses are far in excess or our income, and seem likely to be for some time to come. Our working Capital of $50,000., which seemed so ample when we commenced operations, and would have been had our expectations as to receiving machines been realized-has been seriously impaired, and only the strictest economy will enable us to tide over these unfortunate conditions. ### As a result, the price of our stock has become merely nominal; it has been offered in the open market at $25. per share, and when, two weeks ago, 100 shares were put in the Auction Room for sale, no bid whatever could be obtained, and it had to be withdrawn; on the other hand your Company has declared a dividend of 3%, and its stock is quoted at 75. It is not to be denied that your Company has, as above stated, vastly benefited by the expenditures of ours, and that our Company through the failure of yours to meet what we claim to have been its obligations, has suffered-and is to day suffering-heavy losses. It would seem, so identified are the interests of the two Companies, and so interested is yours in the success of ours, that under all these circumstances you should not-even from a selfish stand point-throw yourself upon technically “legal rights”, if any exist, but should consider our claim more in the light of justice and equity. ### It is on this basis that we prefer to meet you-but have we no “legal rights” in the premises? You will perhaps say that “no specific time is mentioned in our license within which the required machine must be delivered by you to us”. If this were so, which we do not admit, then the law says they must be delivered within a reasonable time, and certainly that time under the circumstances has long since elapsed, and besides when you, or your Company, or your representatives fixed a period or periods within which our Company might expect or should receive the deliveries that “reasonable time” within the established rules of law became a definite one and you were both in law and equity bound to deliver or make good the injury and failure cast upon us. We claim that time to have been, beyond all question, not later than the 10th of January last, although many more in-definite promises were made by your representatives, which should have been fulfilled much prior to that date, even so far back as in October. ### I am aware of the concession your Company has offered in regard to not demanding rentals of any machines prior to the first of each this month, no matter when-delivered, but, grateful as our Company is for any consideration, I believe that, when reduced to a business basis, this offer will appear not to exceed $500., and cannot therefore be accepted as in full satisfaction of our claim. ### Our Executive Committee has most carefully and conscientiously made and estimate of what damages, under all the circumstances, our Company can equitably and justly and as we think also legally, claim against yours, and place the sum at not less than $10, 000., in which estimate the Committee is sustained by the full Board of Directors. ### It is to lay this claim before you that I write, and I ask for it your dispassionate consideration, and that of your Company. ### Frankly, we believe that it could be sustained at law, but we trust that there never may be occasion in this, or in any other matter, for either of our Companies to force the other into Court for the determination of their respective rights; we much prefer to believe that the justice of our claim will receive your ready recognition, and that, this matter being amicably disposed of, the two Companies may work together for their mutual prosperity and advancement."




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