[HM88ABC], Letter from Thomas Alva Edison to Henry Villard, December 10th, 1888

Item

Abstract

[SELECTABLE] {Envelope docketed Thoas A. Edison Re Villard Deal] Memorandum [in Insull'a hand] of interview between Mr. Heny villard and Mr. Edison [Mr. Insull being present) at Mr. Villards office on MONDAY DECEMBER 10th 1888 in relation to the capital required for the proposed new Company which is to own the Edison Light company and the three manufacturing establishments.##Mr. Edison explained to Mr. Villard that he was not whole satisfied with the amount of money that the syndicate proposes to put in the business. He considered that when the new company required money they might have very great troubles to raise it and he absolutely objected to their being placed in any such position more especially if the house of Drexel, Morgan & Company would be the parties who would control the financial policy of the Company; his experience being that when money was required for the business it was next to impossible to get it so long as Drexel or you so controlled the business, or if attainable atall the money could only be got at ruinous rates. In the course of convention he impressed upon M. Villard that he would consider it absolutely unsafe to go into such a deal if the power of control were in the hands of Drexel Morgan & Co--that in the event of their being able to exercise control the value of his property would be very seriously affected as he considered them implacable of exercising proper judgment in relationto such business matters as the Company would have to deal with and moreover that he would on no account want to place himself in a position where Drexel Morgan & Co could squeese any interest that he owned.##In reply M Villard explained that in the last two years he had invested upwards of thirty Millions of Dollars in this country for his European friends--that in no single case had he gone to Drexel Morgan & Co. for money; that in this case he has no intention of going to Drexel Morgan & Co for money, that while Drexel Morgan & Co has frequently asked him to join American syndicates and put up the money of his European friends in such syndicates, that he had not in any day previous case asked them to join him in any sindicate which he had sotten up.##In the case of the syndicate to deal with the Edison light business Drexel Morgan & co has only one seventh interest--; that all they were going to put up was ($250,000) two hundred and forty thousand dollars; that his friends were going to put up ($1,750,000); one cmillion seven hundred and fifty thousand Dollarsl that it was a well known rule on Wall Street and in all financial centres that the parties who put up the money were the parties who controlled: that he pledged himself to raise all necessary money for the business. He drew Mr. Edison's attention to the fact that his friends were putting in a very large amount of money: that it caould not be supposed for one moment that they would put in that large amount of money and pledge their names to the concern and then leave it to take care of itself, or leave it to the mercy of people putting in a small amount of money. He reminded Mr. Edison that he himself had had considerable experience with Drexel Morgan & Co--that he had suffered far more from their methods than Mr Edison could ever possibly suffer; that while he could consider it a business mistake to raise the question of control at the moment, that if Mr. Edison would figure out the future holding in the new Company he would find that the control rested with him (Mr. Villard) and his friends and Mr. Edison, that the management of the [new?] Companyn be relied upon working with Mr. Edison and that Mr. Edison would work with him and his friends.##Mr. Villard further explained that was much as the new Company would have extremely good credit he would have no trouble whatever in raising whatever money would be required @ four or five percent and that such being the case he thought it much better from a business point of view to pay low rates of interest rather than place a permanent charge on the Company paying dividends of eight percent as would be the case if stock were issued and the money taken in as permanent capital.##Mr. Villard pledged himself to raise any money required by the business as a loan at rates not exceedingly 4 or 5 percent as above mentioned. He further explained that he was in a particularly advantageous position to raise money, being independent of the local money market as in the event of money being tight in New York he could draw on Europe and would thus get the advantage of low rates of interest, paying only the extra expence of exchange.##<Correct report of interview. Edison Insull> Correct report of interview, Edison Insull

Recipient

Date

1888-12-10

Decade

1880-1889

Type

Identifier

HM88ABC

Folder Set

HM88

Title

[HM88ABC], Letter from Thomas Alva Edison to Henry Villard, December 10th, 1888

Microfilm ID

144:164

Publisher

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