[LB034312], Letter from Alfred Ord Tate to Benjamin F Stevens, November 29th, 1889


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[LB034312], Letter from Alfred Ord Tate to Benjamin F Stevens, November 29th, 1889

Editor's Notes

I have your letter of 25th instant from Kansas City, and am very much obliged for the enclosures. ### In regard to the toy business, I had a very pleasant interview the other day with Mr. Yeomans, being accompanied by Mr. Field (who came on from Boston for the purpose) and I do not think we could place our interests in better hands. I put some questions to Mr. Yeomans in regard to the matter of manufacture and royalty, asking him if he could handle the matter as well were Mr. Edison to retain his manufacturing rights and also his royalty. Mr. Yeomans said that it would be very difficult for him to make a sale in that manner; that royalties were distasteful to the English people, and that they would also desire to acquire the manufacturing rights. He was very positive on these points, and pressed me to the conclusion that an outright sale must be made without any drawbacks. Mr. Field and myself told Mr. Yeomans that matters would be arranged between Mr. Edison and the Toy Phonograph Co., so that when Mr. Yeomans obtained his authority he would have power to dispose of the entire business. ### In considering this sale, and in making any estimate for the division of the proceeds, there are three elements to be considered. First, the profits of the Toy Phono. Co. derived from merchandising the dolls. Second, the profits represented by Mr. Edison's royalty; and third, the profits of manufacture. The second and third represent Mr. Edison's interest in the business, and the question is, to determine what relation they bear to the first. As you are aware, Mr. Edison has always looked forward to building up a large industry in connection with the manufacture of these movements, and has, in fact, installed machinery for a larger output than can be consumed in America, and the other countries left to us after Europe is disposed of. He has also been at considerable expense in arranging for facilities abroad, namely, in Antwerp, to assemble the movements which he had intended to forward there for the European trade. ### While the toy phonograph, commercially, has been separated from the phonograph proper, no such separation was made, or could have been made, as far as Mr. Edison's experimental work is concerned. The toy has grown out of the larger instrument, and represents a portion of the vast amount of labor Mr. Edison expended in perfecting the present machine. Perhaps I can make this more clear by stating that the toy movement is protected under all Mr. Edison's patents on the phonograph itself, both here and abroad. These patents have been taken out in all countries in the world which afford such protection, and the toy represents some fraction of the expense connected with the original machine. ### I mention all these matters to you, so as to give you a clear idea of Mr. Edison's line of reasoning and to illustrate the extent to which his interest enters into the Toy Phonograph business. ### It is more easy to arrive at the satisfactory conclusion when both sides of the question are thoroughly understood by all concerned. ### We have now to decide in what proportion the proceeds of the proposed sale of our European business should be divided between Mr. Edison and the Toy Phonograph Company. I have had some discussion with Mr. Edison upon this point, and he suggests that the Toy Phonograph Company should take sixty-eight per cent., and himself thirty-two per cent., and that the Company should make him an equitable allowance for the excess of machinery installed at the time it was considered that the whole of the manufacturing should be done by him. This latter amount would not be large. ### I have been unable to discuss this matter with anyone representing the Toy Phonograph Company, as they all desire you to be present when the question is brought up. In order to save time I place the situation before you as well as I can in a letter, so that you may have an opportunity to give some thought to it during the next ten days. Perhaps you may be able to come to some definite conclusion early enough to write me. Meanwhile I will do all I can to facilitate matters, so that Mr. Yeomans can be equipped rapidly upon your return. I am corresponding with him at the present time. ### Wishing you a pleasant and safe homeward journey." I am, yours very truly, AO Tate




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