[LB038218], Letter from Alfred Ord Tate to Thomas Alva Edison, March 8th, 1890


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[LB038218], Letter from Alfred Ord Tate to Thomas Alva Edison, March 8th, 1890




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


March 8, 1890
My dear Mr. Edison,-
In regard to Foreign Doll business, the proposition which has been received from the German people is as follows:-
FIRST. Mr. C.W. Schneckel, Jr., who represents parties., who represents parties in interest, asks the privilege of visiting the United States and examining all our processes of manufacture and bringing with him for that purpose a skilled mechanic.
SECOND. Within thirty days after such visit he agrees himself to form a Joint Stock Company with a Capital of One Million Dollars, stock of the Company to be divided as follows:- $100,00 sold for cash net for benefit of the Treasury; $100,00 to be sold at par and the proceeds handed to the Toy. Phonograph Co. of Boston; $150,000 stock to be paid for Schneckel, for his commissions; the balance, annotating to $650,000 stock to be issued to the Toy Phono. Co. of Boston. Schneckel requires an option for three months on the stock held by the Toy Phono. Co. to purchase it at about $65 per share (Par $100), or say $450,00 cash, but does not find himself to take it. He further requires profits sufficient to enable him to control annual or general meetings of the Company; and propose That the Berlin Company shall have the permanent right to sell their own manufactures in all countries where no patents have been received up to present time, with the exception of the Continents of North and South America.
Apart from his proposition to bring an expert mechanic over here and familiarize him with our methods, and his proposition in regard to manufacturing for sale in countries where we have no patents--- which I have told the Boston Co. you would not assent to---. I do not think there is anything in the offer which he makes. As I understand it, the only inducement we could have in selling the foreign business would consist in ridding ourselves of the risks of merchandising. Schneckel proposes giving us a big block of stock and then if we can make it valuable, he will either take it himself at a price away below par, or leave us to dispose of it on our own account. I do not think the $100,000 in cash, which he offers, is any temptation. If the Toy Phonograph Co. has to do a regular merchandising business abroad, which would certainly be necessary in order to give value to the shares in which Schneckel proposes to give them in this deal, I cannot see that they would be in any position, or in nearly as good a position as they are in today. The commercial part of the business would be subjected to the management or mismanagement of people in Berlin, who might not consider it desirable of [illegible] the value of the stock appreciate. It strikes me that Schneckel simply places an empty value on the business and expects us to make it good, after which will share in our success.
None of the Boston people look upon this proposition favorably. My own opinion is, that if we have to take the risks of merchandising abroad, it would be very unwise to place the active management of our affairs in the hands of people whom we do not know, and whose interest may not be the same as or own.
It is probable that a counter proposition may be made to Schneckel, but I have very little hope of its success.
I am going to Boston tomorrow night to attend a meeting of the Directors Monday morning, when this matter will be disposed of, and I will advise you of the result.
Yours very truly,
A.O. Tate
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