Letterhead THE NORTH AMERICAN PHONOGRAPH CO.
December 7, 1892.
My dear Mr. Edison:-
I enclose herewith a copy of the report which I made to the Board of Directors yesterday, which will acquaint you with all that has been done in the territory under my immediate jurisdiction up to date, and with the plans which have been adopted by Mr. Lombard and myself for the appointment of agents. I have filled out the letter of appointment that is sent you herewith as in the case of an agent who is unable to purchase phonographs and supplies from us for cash. The great majority of our agents will, of necessity, be appointed in this manner, as it is impossible, except in a few cases, to find men who have sufficient capital to invest. I think that this report will give you a very clear idea of the policy which has been inaugurated. From the remarks which were made at the Board meeting yesterday it appears that the idea prevailed when we started this business that we were to appoint in the territory of each Company a general agent who was to have entire control of such territory, and who was to purchase phonographs and supplies from us on a cash basis for himself and the sub-agencies. There also seemed to be an understanding, I might better say an impression, that the different Companies were to act in their respective territories as our agents, and buy in the manner indicated above. I do not know what gave rise to this impression. It was certainly never promulgated by me. You are well aware that with probably one or two exceptions there is not a single local company that has made a success of its business. The management of these various Companies drifted into the hands of incompetent and irresponsible people, chief among whom were the mechanics whom sent out from the Phonograph Works as “Experts.” The greatest disaster that could befall us would be to appoint any one of these Companies as an Agent of the North American Phonograph Company, and I have steadily apposed this course. My policy has been to secure as direct control as possible over the people who are to act as mediums between us and the purchasing public and in the pursuance of this and I have avoided naming General Agents in any territory other than which is sparsely settled, like the far West and some of the Southern States, Mr. Lombard is in the entire accord with my views in this respect, and is carrying out the same policy in the territory west of the Coast States. We might just as well try to float new Companies as to the endeavor to obtain General Agents with sufficient capital to equip a territory like Pennsylvania, or any of the more thickly settled States. The plan which has been adopted for securing representation is as inexpensive as any that could be proposed. It simply means the payment of travelling expenses and salary of the man whom we send out to make the appointments. After these appointments have been made we will be absolutely sure that we are positively properly represented; but if we were to make a contract with a General Agent and permit him to cover a large territory we would be absolutely at his mercy, and the loss of business directly and indirectly would mean the delay of yourself years in placing the phonograph business upon the level to which it is entitled. I may say here that the Board has approved the methods which have been adopted, but I desire to obtain a square expression of opinion from you and a complete endorsement of the work which is being conducted my Mr. Lombard and myself. I believe Mr. Butler handed you a statement a day or two ago, showing the decrease in our income consequent upon the transfer to us of the territory of the various local companies that have come into the new deal. This shrinkage was of course unavoidable, and the problem which we have to confront is how we are to recoup ourselves in the shortest space of time. It should be obvious to any one that the quickest way to do this is to obtain the largest possible number of outlets for the goods which we have to sell. We will doubtless have to do some close financing during this transition period, but we may just as well face the situation now and get through with it than to prolong it by ill-advised inactivity. I do not wish to convey the impression that there is any opposition whatever to the which Mr. Lombard and I are carrying out; but as you have assumed control of the North American Phonograph Company and the responsibility for its destiny, we wish to be assured that we have your approval and support in the work we are doing.
Yours very truly,
[Signed]

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