[D9242ABI], Report from North American Phonograph Co, Thomas R Lombard, December 1892


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[D9242ABI], Report from North American Phonograph Co, Thomas R Lombard, December 1892

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


I herewith submit a statement of the new arrangements entered into with some of the various sub-companies to date;-
This company was the first to sign the new contract, and we have been in practical control of their territory since the 1st day of October last. As yet no definite settlement of the accounts between this Company and ours has been reached, owing to the inability of our Appraiser and theirs to agree and also to their refusal to recognize certain items on our account against them. This matter is now in the hands of our Vice President for adjustment, and may yet have to go to arbitration. A full report of supplies on hand with the appraisement of our Mr. Thomas is on file at the New York office.
I have been continuing a small office force in Detroit for the purpose of caring for these supplies and attending to the machines out on rental. The income very nearly pays these running expenses. It has been difficult to find a proper party to take control of the Detroit business owing t the very "black eye" the business received in that section through the failure of the Michigan Company to make money. I have, however, several parties negotiating with me, and hope to be able to report an appointment there at an early date. I propose districting the State and appointing dealers in all the large town and cities, as soon as I have someone I can send there for that purpose. I have temporarily appointed a dealer in some of the Western counties, and am in hopes he will prove a good man there. STATE COMPANY OF ILLINOIS:-
We took possession of tis territory October 1st. I found supplies, consisting of - "Coin in the Slot" Cabinets and Batteries principally, to the amount of $2,673. These were all in very good condition, and I took them over at a lump sum as above stated. There was $575.00 due the N.A.P. Co. at the time of settlement, which left the amount of $2,000 to be paid, for this Treasurer giving four notes of our Company of $500.00 each payable as follows:-
December 1st, '92
January 1st, '93
February 1st, '93
March 1st, '93
The first of these notes has already been met.
The running expenses of the business I found to be about as follows:- Rental of warerooms,-$30.00 per month. Salary of employees, $100.00 per month. Salary of men in different parts of the State looking after and caring for Slot Machines, $75.00 per month, to which must be added the expense of providing musical records and restoring batteries, which varies from month to month. The results from the Slot Machines very nearly cover these expenses. In addition to which we have free transportation on two of the leading Railways of the State, so that we can canvass and organize without that expense. For these reasons I decided to leave the Slot Machines out for the present, and expect to be able to sell them in the different towns where they now are.
I have a man now on the road appointing dealers in the various towns of Illinois, and have selected for the present only those towns having a population of 4,000 and upwards. This gives an aggregate of about forty towns, and I hope soon to have that many dealers actively at work in our interests in this State,
This Company signed the contract with the understanding that they were to continue their "Coin in the Slot" department, which they are doing, paying the rental on Machines to the North American as before, purchasing the supplies, etc. Mr. Goodwin is to be appointed Agent for the State, and proposes to thoroughly organize the same on the lines indicated by us, and I am to have a conference with him for this purpose in a few days. We took no supplies over from this Company,- they retaining them for use in their Slot Department.
This Company signed the contract on the agreement that they should continue as our Agents.
Mr. Tait and myself upon visiting Omaha found this Company to be in a very prosperous condition, owing to the ability of their Manager-Mr. Carey, who is without doubt one of the ablest men in the business. Upon full conference it was agreed that we should continue the Nebraska Company as our Agents, as it seemed best for all interests that this should be done. We took over no supplies, they retaining all they had for their Slot business.
This Company signed the contract, and I remitted a charge on our books against them of $70.00, made up of rental on one Machine in their hands, which was all the stock they had on hand.
This Company has never done any business and their territory is so situated that I do not anticipate very great possibilities for the Phonograph in that section. I have, opened negotiations with The Trading Commercial Co. a large business house of Laramie, and if anything can be done in this line there these people are undoubtedly the best ones to handle it.
This Company signed the agreement, and their former Manager-Mr. Wilson-is still in management of affairs there.
There are few, if any, supplies on hand, and the Company need what may be for use in their Slot department. Mr. Wilson expects to be appointed dealer for Spokane, but I am in hopes of getting a more efficient man and I am fearful he is not the best one for the place. Owing to the distance this territory is from us it is difficult to get it organized, and it will probably be one of the last that will be.
This Company has signed the agreement, and I have appointed Mr. Louis Glass of San Francisco as our Agent in control of this section. We found affairs with this Company in a very bad shape owing to the fact that they have never attempted to do very much business, and what little has been done has been an injury rather than a help. The supplies on hand were not taken over, and the account we have against them will be settled out of the 10% royalties as they accrue.
This Company signed the agreement on the condition that Mr. Glass should be appointed our Agent for the full term of the contract. This was especially necessary in order to avoid complications, owing to a contract made by them with another Company formed for the purpose of controlling the exhibition feature of the Phonograph. This was an arrangement made with the knowledge and approval of Mr. Lippincott, and you will find by reference to the so called - "Six Party Agreement" with the Automatic Phonograph Company that this exhibition Company is one of the parties named therein. Aside from this however there would be no better man for the purpose than Mr. Glass, as he is thoroughly in harmony with our plans and is better equipped to push the business there than anyone else.
No supplies were taken over by us from this Company and all claims which we have against them are to be settled out of the business done in the future.
I regret to say that a good many complications have arisen in arranging with this Company and as yet I am not prepared to fully submit a completed transaction.
Owing to the fact that this Company had arranged with some others for the control of their territory they were not in position to hand over to us as soon as they desired, and for this reason the negotiations "hung fire" for a while. In the meantime some arrangement was made in New York with Messrs Ott & Tewksbury, which led these gentlemen to expect their immediate appointment as our Agents in that section, and they have been very persistent in pressing their claims for this purpose. In order to put ourselves in position to carry out whatever understanding may have been had between the Board of Directors, and these gentlemen, I took up the Missouri account with Maj. Clancy and Mr. Wood for the purpose of seeing if we could not reach some conclusions so as to get the matter finally settled.
Upon investigation I found that this Company was in possession of a large amount of supplies that were practically new. I had Mr. Thomas go over to St. Louis and appraise them, which he did. The amount of his appraisement is, -$4,200.00. I had agreed that whatever was owing by the Missouri Company to the N.A.P. Company should apply on account and that we would give long time notes for the balance. Upon calling for a statement of the Missouri Company's account from Mr. Wolcott I found it to be $1137.36 and my understanding of the settlement was upon that basis.
I have since found that there were several Machines sold by Mr. Thielecke, who was the Manager of the Missouri Company, of which I had no knowledge. I have also found that certain information he gave me in regard to some Machines that were out in the territory was not correct. I have therefore on this account left the matter with Mr. Wood, and am refusing to settle until these several items are adjusted to our satisfaction. As Mr. Wood lives in South Dakota I am necessarily compelled to carry out negotiations by correspondence, but hope all these matters will be turned over to Maj. Clancy for settlement, which will greatly expedite matters, and as soon as we have reached a conclusion I will forward the results to the Board for approval. We have, however, taken over the territory practically as from December 1st, and am continuing the party who was in charge there,-a Mr. Theilecke brother of the gentlemen above mentioned, until January 1st which time I hope to have permanently arranged matters to the satisfaction of all concerned.
In this connection I will say that I have written Messrs Ott & Tewksbury stating that we are prepared to turn the territory over to them upon the following conditions:- First,- that they shall accept the appointment under the same conditions and restrictions imposed upon all other dealers. Secondly,- that if they sell any machines in Missouri out of the lot purchased from us a short time ago, that they shall pay to us for the account of the Missouri Phonograph Company 10% on the amount received for them, and also 10% on all supplies sold therein This is as I understand the wishes of the Board, and I trust you will confirm the same.
All data regarding this Company is on file in the office in New York. The supplies to be taken over will apply on their account,- the remainder, as arranged by Mr. Thomea will be paid for out of the business in their territory.
This Company has signed contract as of December 1st, and our Mr. Kitt is now in charge at Minneapolis.
We found upon investigation that very little business had been done by the Company. Most of the Machines which have been on their rental account having been idle for a greater part of the time. These Machines Mr. Kitt reports are in very good order, and they are being packed to be returned to the Factory by my orders.
In the settlement of the accounts between this Company and ours, I found that we had charged to them abut $3,600,-$2,400 of which was for rental account. Mr. Chadbourne was very loath to admit even any part of this account, and finally suggested that he would be willing to have one-third stand against them. I however, succeeded in arranging as follows:-
The account to stand for $1,8000,-$500 of which is settled for by turning over supplies on hand to that amount; $1,300 to be paid for out of the business done in the territory.
I am in negotiation with very good parties for a part of this territory, and believe that shortly after the first of January I will be able to turn over the supplies we have taken for cash, and that business will be pushed to the utmost in that section.
I take this occasion to say that I have no doubt but what Minnesota next to Chicago is the best territory in the Northwest, and we have the advantage of having a comparatively new field, and I anticipate very great results from this section,-in fact I have been more anxious to get the Minnesota territory into our hands than almost any other outside of Illinois.
This Company signed the contract as of December 1st, and Mr. Thomea and Mr. Tait have had charge of settlement of the accounts, etc., and will be able to submit for the approval of the Board a detailed statement of the same.
I have temporarily appointed the Pittsburg Typewriter Company as dealers for part of the territory turned over by the Western Pennsylvvania Company. These people have their sub-agents in almost all of the principal towns throughout the territory and expect to be able to thoroughly cover the same at once.
Owing to the vast amount of territory I have to organize I concluded to make an exception to the rule in this case and have therefore appointed them for one year, by which time they will have been able to demonstrate their ability to handle the same, or we can change and sub-divide it if we choose thereafter.
In conclusion I will state that the Colorado & Utah Phonograph Company is prepared to turn over their territory to us as soon as I can send someone there to take it. A report on this Company will be submitted later.
This Company has as yet made no definite arrangements with us, but a satisfactory one is in course of negotiation and details will be submitted in a later report.
Of the various Companies in the country not embodied in this report or Mr. Tait's, I can only say that while no positive assurance has been given by them that they desire to enter into the negotiations with us, yet I believe that most of them will be favorable to it as soon as we are ready to take them over.
I respectfully request the Board to pass suitable resolutions confirming the arrangements made as per statements given.
Very truly yours,

Thos R. Lombard
Genl Manager
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