following documents from Blue Folder No. 40 (Edison National Historic Site) offer a revealing, behind-the-scenes look at operations during the final days of Edison's Phonograph Division.
Discontinuing the Record Business
Arthur Walsh to Charles Edison
or about 1912 the Edison Industries began to manufacture and sell
the disc type of record and from that date to this, as far as
I can estimate, it has always been a losing business. Without
going too far back into history, I have looked over the financial
statements of the pst five years. The five years show a loss on
account of records, as follows:
|Statement of net book
loss on disc records according to the financial statements
during the past five years:
In 1929 the estimated net
book loss will exceed $500,000....
In July 1929 we announced
the Edison Lateral Cut Record, which was ultimately to supersede
the Hill & Dale Record, previously sold. At the present time
we are making both types. The sales in September ran 29,766 for
Lateral Cut and 8,479 for Hill and Dale.
Below an attempt has been
made to recapitulate the advantages and disadvantages of continuing
in the record business...
1. Help to sell more [radio-phonograph]
2. Possible idle equipment
3. Keeping faith with old
4. Avoid possible embarrassment
to trade in discontinuing project just started [lateral-cut discs],
which might cause trade to feel we might cut out radio just as
5. Possibility of Record Business
being reborn, if Combinations become increasingly popular.
6. As Mr. Thomas A. Edison
is the inventor of the Phonograph & Record, there is possibility
of loss of prestige, if abandoned.
7. Absorbs portion of Thomas
A. Edison Industries overhead, which would increase other costs
unless something else is found for factory and space.
8. Eliminate loss thru voiding
contracts with recording artists, which would be small in comparison
with potential losses if business does not succeed.
1. Heavy losses, as indicated
2. Export situation —
Cannot sell Records in Continental Europe, Dependencies or Colonies
of a European Country.
3. Unfavorable situation regarding
portables, which we do not manufacture but buy and sell at a book
loss merely to help sales of records.
4. Increasingly high recording
costs due largely to excessive fees demanded by popular artists
whose reputations aid in selling records.
5. Necessity for investing
large sums for promotion and advertising to increase sales.
6. It is a dying business
and without sales of Phonographs it may be merely a question of
time until the Phonographs now in hands of public will be discarded.
7. Cheap competition makes
sales increasingly difficult. The public is interested chiefly
in jazz music and buy cheaper grades of records which can be discarded
in few weeks at little loss when popularity wanes.
8. To become world power in
record business it will be necessary to establish recording units
with plating a pressing factories in Chicago, and the West Coast,
in Europe, South America, Australia and the Orient; the question
being, can money so invested have the potential profit as money
invested in other things.
9. Mr. Walsh and co-workers
pending time on record sales and production out of proportion
10. Possibility that present
type of record may become obsolete. Mr. Sarnoff of R.C.A. announced
at meeting few weeks ago that home talking pictures would play
large part in future home entertainment which may be subtle warning
that Victor is going into film recording.
W. H. Miller
(Undated; probably week of October
all recording at once. ... [Note: The last Edison recording
session was a private one for Margaret Rogge Becker, held on the
morning of October 19.]
list of Recording Equipment to be retained for recording Broadcast
Electrical Recording Agreements — if they won't cost us
Release of Contracts with Artists
W. H. Miller
(Undated; probably week of October 14, 1929)
— at once — all recording.
artists at once — advise them of decision and ask them to
cancel contracts; also, to treat confidentially until announcement
is made public. This is particularly important in the case of
Martinelli who should be given opportunity of making new arrangement
with another company before an announcement is made.
cases of refusal to cancel — negotiate cash release always
bearing in mind, artists' expenses, etc. to obtain consent and
endeavor to sell their contracts. No arrangement is to be consummated
contracts are to be disposed of in one way or another by December
of Finished Stock
R. R. March and A. J. Clark
(Undated; probably week of October 14, 1929)
Liquidate inventories of finished
stocks, wherever located, by December 31st.
Prepare estimated liquidation
value of stocks as compared with inventory value.
Consideration to be given
to plan to sell entire stocks thru regular jobbers and dealers,
piecemeal, and/or entire stocks as job lots to one source of distribution,
the question being, can we dump such records to one jobber because
of other jobbers' stocks that they may not want to sell at reduced
Be prepared to sell Needle
[lateral-cut] Reproducers at cost to disgruntled Hill and Dale
All records to be sold by
All Schuberts and Beethovens
[phonographs]... are to be sold with needle [lateral-cut] attachments
by December 31st, even if these must be sold for as low a price
as $10.00 each.
Inventories on hand December
15th to be turned over to Mr. Clark for salvage.
Contact F. R. Schell and set
aside records of both types to be retained for [Henry Ford] Museum
of Master Moulds
W. H. Miller and A. J. Clark
probably week of October 14, 1929)
Contact Messrs Buchanan and
Schell to ascertain moulds to be retained for [Henry Ford] Museum
purposes and after setting these aside, Mr. Miller will endeavor
to sell needle type [lateral-cut] moulds to other companies, provided
this can be done without obligation on our part to artists who
recorded such records.
[Note: Such a sale was
never completed, as far as can be ascertained. However, the existence at ENHS of a Needle Type
pressing with a Brunwick sample label (see Edison Disc Record Oddities) suggests that the Brunswick-Balke-Collender
Co. might have been contemplating the purchase of some masters.]
All moulds not thus sold and
those not required for Museum are to be sold thru Mr. A. J. Clark.
Amberol Record Sales
W. S. Williams
While phonographs are still carried in Cylinder inventory, they
were turned over to Mr. Clark some time ago for sale as scrap
or junk. ...
total of 32,408 B.A. [Blue Amberol] Records were sold for $6008.75
between July 1 and October 15. Of this number of records 15,185
were sold under the special $.20 offer which expired September
30. The balance of sales were to jobbers and dealers and to individuals
at $.35 each.
have greatly decreased since September 30 as shown by the following
comparison of orders, shipments and cancellations.
which have been exceedingly high due to inability to ship records
of customers' selections, have been very costly because of paper
work involved in refunding advance payments.
of October 19, there were unfilled orders on hand for only 43
is apparent from the above that it is now opportune to either
discontinue entirely or take action to endeavor to increase sales.
the following recommendations are made.
Entirely discontinue sales [of Blue Amberol cylinders] on October
Burn all [cylinder] records in stock, including 212,566 not carried
in inventory, thus releasing 600 packing cases which may be salvaged
thru Disc Record Sales at $.90 each.
Release the remaining [cylinder division] employees — thus
saving $86.50 weekly.
Close books of Division by December 31. ...
the Trade: Re: Discontinuance of Commercial
you know, the Edison Radio is a pronounced success. Present demand
is about three time production. We feel that this demand will
present manufacturing facilities are inadequate to satisfy the
demand for Edison Radios. These facilities must be increased immediately.
a careful weighing of the record business and its prospects, we
have decided to discontinue the production of records, except
for special purposes, and to devote our great record plant to
the production of radio, and kindred new developments in the radio
and home entertainment field.
step is being taken regretfully because the phonograph for home
entertainment was one of Mr. Edison's favorite inventions. But,
this is a case where sound business judgement must prevail over
must add that we are happy in the knowledge that there are many
competent manufacturers, now producing excellent records, with
adequate facilities to take care of all present and future phonograph
will, therefore, on November 1st discontinue the production of
commercial phonograph records such as have been heretofore sold
and after the same date, the name of Radio-Phonograph Division
will be changed to Radio Division.
THOMAS A. EDISON, INCORPORATED.
Edison Distributing Corporation
date of October 29th a letter was mailed to you from Thomas A.
Edison, Inc., Orange, N. J., announcing the "Discontinuance
of Commercial Record Production."
this time we have in stock a limited supply of Edison Hill and
Dale, and Lateral Cut Needle Records, which we will offer you,
subject to prior sale, F. O. B. Chicago.
Edison Hill and Dale Records at five cents each in lots of fifty
or more to be selected by us, or ten cents each in lots of fifty
or more of your selection.
Cut or Needle Records of the seventy-five cent series at fifteen
cents each in lots of fifty or more of our selection, and twenty
cents each, you selection. The two dollar series are priced at
forty cents each.
no circumstances are the records returnable. ...