The Thomas A. Edison Papers Digital Edition

Transcription

Thomas A. Edison, Esq 
Dear Mr. Edison, - 
On Sunday morning Mr. Lombard and myself leave for Chicago, where we will meet the representatives of the first Companies which we expect will enter into the new arrangement. Mr. Bush as prepared a contract based upon the memorandum assented to by the Committee of sub-Companies and the Committee of the North Am. Phonograph Co., which I believe we will be able to put into effect without serious difficulty. If we are successful in putting this contract through with the Michigan Company and the Illinois State Company our work with the balance of the sub-Companies will be greatly facilitated. The reason for this is that the two men who control these Companies are the actual representatives of all the other licenses. I will advise you promptly by wire of the results of our negotiations in Chicago. 
I am not prepared at the present time to make any report to you with respect to the stockholders of the North Am. Phonograph Co. how far we can count upon control. If we succeed in making the proposed contract with the sub-Companies, your control of a very large majority of the stock of the North Am. Phonograph. Will be absolutely assured, for the reason that you will behind you the power of licenses, who, in effect, have entire control over the outside situation, no matter what may be said in regard to their legal rights. They are going into this arrangement as a matter of good faith between you and themselves, and they consider the N.A.P. Co. a factor in so far as it is represented by you. 
I have very good reason to believe that the Gramophone people, represented by Mr. Easton, have not been inactive since the Chicago convention, but, on the contrary, have been circulating various kinds of garbled reports concerning the proceedings of the Convention and the intentions of those who are endeavoring to further the interest of the phonograph. I do not anticipate any serious results from these efforts of our enemies, although I think it quite probable that they may cause us some minor annoyances. This, however, will be settled in Chicago, and you may expect within a week or ten days at the outside to receive a decisive report. 
AUTOMATIC PHONOGRAPH EXHIBITION CO. I have seen Mr. Bush in regard to the moneys which you advanced to this Company and have arranged with him for a suit to be brought in your behalf against the Company and for a judgement to be obtained in your favor, which will be the first lien upon the Company’s property. The Assignee of Jesse H. Lippincott has already commenced a suit to recover Wednesday’s money advanced by Lippincott, but Mr. Bush and myself have arranged for your claim to take precedence over all other claims. In other words, you get the first judgment and have the first lion. It is not necessary for you to do anything other perhaps then to sign some papers that Mr. Bush will probably send out to you in connection with the suit. Bush is going to conduct this suit through this own people.  I mention this because you might think it strange it had not been placed in the hands of Mr. Dyer. 
The affairs of the Automatic Company, so far as any direct purpose is concerned, are to-day in a state of chaos. Various suggestions have been made concerning the destiny of this Company, and the idea of winding it up has generally prevailed. I am very strongly opposed to any such course. When we get control of the  phonograph business it will carry with it absolute control of all the nickle-slot business in the country. While we have no reason to feel grateful towards this side of the phonograph business, which has been chiefly instrumental in demoralizing the general enterprise, we ought not to lose sight of the fact that a revenue can be derived from continuing it after placing it upon its proper level. Also, we ought not forget that a great many people have invested in the stock of the Automatic Company because of their faith in the phonograph. I think it would do you personally a very great injury to abandon any enterprise with which you are, however unwillingly, so closely associated. My idea is that we should pay the Automatic Company a fair royalty on all automatic outfits sold and upon the revenue derived from the use of automatic machines. The affairs of the Company can run along without change until we get the phonograph business in shape, after which we can adjust the details. I rely upon your not consenting to any radical change in the status of this Company during my absence without giving me an opportunity to be heard. 
EDISON PHONOGRAPH WORKS. On the 9th of next month there is a note of the Phonograph Wks. For $5,000, issued to the Edison Gen’l Electric Co., falling due. As I told you a few days ago, it is impossible for the Phono. Wks. To meet this note themselves. I am endeavoring to arrange for a renewal. It was issued one year ago, and I may not be successful, in which case you will have to take it up. This is the only paper that the Works have outstanding. I hope before going away to advise you of what can be done in regard to this note. If I am unable to arrange the matter definitely, I will leave it in Mr. Butler’s hands. He made the outer renewals. 
BATTERY MOTORS. The Works will make delivery of the first lot of battery fan motors this week. You will remember that we put through an order for 100. We can sell all these almost immediately; in fact, more than half of them are already disposed of. VOLT METERS. The Association of Edison illuminating Companies meets at Toronto on the 9th of August, and I have arranged to exhibit our 500 and 1,000 Volt Meters, the Battery Fan Motor, and probably an Ampere Motor at this Convention. I had a conversation yesterday with Mr. W.J. Jenks, the Secretary of the Association of Edison Illuminating Companies, and I told him that I would like to have the Edison Manufacturing Co. join the Association. He said that while the By Laws of the Association required that its members should have a certain sum of money invested in electric lighting, he had no doubt whatever hat this qualification would not be expected with respect to the Edison Mfg. Co. owing to their peculiar situation, and he assured me that he would assist their application. This is merely an incident, but it is a very important one. This is merely an incident, but it is a very important one. The licenses of the Edison Electric Light Co. have not taken kindly to the oblivion to which their interests have been consigned, and in association the Edison Manufacturing Co. with them I took it as taking by his foremost look. 
BATES MANUFACTURING CO.I enclose herewith a copy of the agreement between the Bates Mfg. Co. and the Phonograph Works. The understanding that we had with Mr. Insull the other day was that the Edison Phonograph Works should be given entire control of the business of the Bates Manufacturing Co. In this connection I wish to draw your attention first to Section 2 of the agreement, wherein it is provided that all moneys etc. received by the Bates Co. for the sale of machines etc. shall be turned over in full to the Phonograph Works. The Works will, in turn, pay back to the Bates Company such amounts as are required to cover the expense of selling Bates machines. The By Laws of the Bates Company provide that all checks and notes shall be signed by the Treasurer and countersigned by either the President or Secretary. Mr. Dyer considered it desirable in carrying out our arrangement that I could become the Secretary of the Company, so that I can countersign its checks. This gives us a double check upon the finances of the Company. The agreement as drawn by Dyer is very complete. If we find that the business does not pay we can abandon it, in which case the agreement becomes void, and our claim against the Bates Co. resumes its original status, leaving us free to take such action at law as we could take to-day were we so inclined. We ought now to make preparations at the Phonograph Works to turn out 75 automatic hand numbering machines a week. The first thing to be done is to manufacture three of four more engraving machines, the use of which will reduce the cost of numbering machines by about $2.50 each. I am fairly satisfied that the Bates C. can sell 125 of these machines per week, but in giving instructions in the factory, you should instruct Mr. Ballou to equip for not more than 75 per week, after which we can force the output to probably double that number.  In fact, I think if you were to instruct Ballou to prepare to turn out 50 of these machines per week, we could in a short time reach an output of 125 per week without adding o his organization. I cannot take any action in this connection before going away. I will have a talk with Ballou and he will see you at the earliest opportunity, when I wish you would please give him instructions. It is very necessary that we should lose no time in commencing this manufacture, and if you will instruct him to prepare to turn out 50 hand numbering machines per week we can take care of business. 
In regard to the offices of the Bates Co. which are now located in the Edison Building, I wish you would not insist upon any exchange being made until I return. There are a good many details which I wish to arrange and the delay will not amount to anything. You will recollect the Insull told us Bates would be willing to continue with us at a salary of $3,000 per year. Insull told me yesterday that Bates did not think he could get along on $35 per week, but believed he could manage his affairs on a salary of $40 per week, and I told Mr. Insull that would be entirely satisfactory to us. In handling this business I consider it most satisfactory that we retain Bates, as he understands its details, and I have therefore taken it for granted that you will concur in my concession of $5 per week on his account. INSPECTION. You probably are aware that a good many Bates machines have been returned because of faults which have developed in use. I have looked over a number of these machines and find that the trouble is due to lack of proper inspection. All the machines that went out were tested by Mr. Ballou, but as he receive the machines after they had been assembled and presumably put in proper working order, he did not give himself a fair opportunity to detect faults. The duties of our Inspector at the factory, Mr. Sargent, should be and must be extended to include all the work that is turned out; or in other words, we must put into effect the ideas which you have always entertained in regard to inspection. I am satisfied that if you had been les rigid in your methods of inspecting parts of the phonograph, the N.A.P. Co. would to-day have a big claim against us for defective manufacturing. No less rigid methods should be employed in inspecting the parts of the Bates machines, and in fact all other work that we turn out. 
WAX DEPARTMENT. The Moulders in the Wax Dep’t have been laid off. The girls who were retained up the cylinders that were turned out by the Moulders will probably be through their work on Saturday, after which the Wax Dep’t should be closed down, leaving us with a stock of over 70,000 cylinders ahead. 
PHONOPLEX. I am very much disappointed at the results of our last efforts in this connection. We have had a number of inquiries regarding the system, none of which has materialized. Logue, who has been ill at his home in Baltimore for the last 3 weeks, has gone down to the Richmond & Danville people, who say they want some circuits, but I am not in a position to state whether we will do business with them or not. I intend looking into this business when I am in the West. It is remarkable that we have never succeeded in introducing the phonoplex west of Chicago. Logue tells me it is because the Western people object to royalties on principle, but I cannot understand that such a prejudice should be so universally maintained. We sent Logue to Denver, as you will recollect, about six weeks ago, where we made an excellent demonstration of the system, from which nothing has resulted. I cannot explain it, but I will be ready to give you an explanation after I have been over the ground.  
ORE MILLING CO. I gave Mr. Dyer a memorandum of the licenses which you desire to have drawn from the Ore Milling Co. to yourself. You will remember that you named Mr. Dyer and myself to supersede Mr. Insull and Mr. Schultze Berg as Trustees of this Company. Mr. Dyer is going away on Saturday to be absent during the whole of next month, and I of course will be absent during the whole of next month, and I of course will be absent for the same, if not a longer period. In passing upon these licenses you would be disqualified to vote as a member of the Board, as the transaction is between yourself and the Company. Under the present construction of the Board this would necessitate consigning your wishes to people upon whom you have no reason to depend, and if there is no necessity for haste I strongly recommend you to postpone this matter until such time as Mr. Dyer and myself can arrange to carry it through. As a matter of fact, we could not get a quorum of the Board of the Ore Milling Co. for a month at least, as Walter Cutting, R.L. Cutting, Bathcelor, Insull and Schultzes Borg are all unavailable. 
EDISON MANUFACTURING CO. The greatest regret obliged to absent myself at the present time is on account of this Company, and if the work required of me were less important I would endeavor to arrange some other method of handling it. Looking at the matter from a purely personal standpoint I do not fail to realize that you are inclined to estimate my usefulness from the degree of success which I attain in connection with this Company, and I therefore cannot help feeling disappointed when I have to withdraw for a time from its affairs, even though the period be a short one. Since we moved to our offices up-town our cash sales have covered about half of our office expenses. As we have been in our new quarters only about three weeks, I think that is a pretty good showing. You will recollect my telling you last May that I had engaged a man to do some special work for me in New York City. I have had most satisfactory results in this connection, and this man has proved himself so capable that I have given him temporary charge of all our sales, which arrangement will continue until my return from the West. I am thoroughly dissatisfied with the manner in which our Silver Lake factory is run. I have gone through our costs and find that they are entirely out of proportion. Immediately upon my return I want to make some changes, but in the meantime the business can sustain itself in its present condition. We will not of course do any unusual amount of business during the month of August, but I confidently believe that the Edison Mfg. Co. will show up larger sales from September to November than at any other time during its history notwithstanding the fact that we had a boom last spring because of orders which we received for the equipment of the Supply Stores of the Edison Gen’l Co. This new trade for which I have been arranging lines all summer will be permanent and not spasmodic, like the trade of the Edison General Co. Meanwhile I want the affairs of the Edison Manufacturing Co. to rest as they are. 
FORGEIN BUSINESS I hope you have considered favorably the proposition that I made the other day in regard to your foreign business, namely, that we should form a Company, say with $100,000 Capital, and issue to you fifty-five per cent of the stock, the balance to be subscribed for in cash. We have a sufficient number of thigs now which we could turn into this Company to sustain, the small organization that would be required at the start, and as other articles come along we can dispose of them through the same channel. It would ensure to you not only the absolute control of your foreign relations, but a much larger interest in the benefits to be derived there from than you have ever had before. In fact, a much larger interest than you could obtain through any other arrangements that it is possible for you to make. I can carry this scheme out whenever you indicate your willingness to accept it. 
Lombard and myself will be absent about six weeks. I do not see how we can cover the territory in less time. If we get what we want within that period we will all have reason to congratulate ourselves. Meanwhile I will keep you thoroughly posted as to the progress which we make. 
Yours very truly, 
A.O. Tate