The morning call., 1891-06-06
A PHONOGRAPH FIASCO.
How and Why the Great Invention
Disappointed It's Backers.

The failure of Jesse E. LiDpincott, the
capitalist at the head of the Edison Phono-
graph Company, for nearly million dollars,
and the fact that the stock of the phonO-
graph company is not considered an aVaila-
BILE asset, proves nothing as to the future
of the invention.
1t may honestly be said that Edison him
self is not to blame for putting the phonO-
graph upon the market when it was not
ready for such a test. Ever since the sue
cess Of the Edison electric light capitalists
have been eager to grasp at anything bear
ing his name, and when it was announced
through the newspapers that the phOnO-
graph was more wonde rful thing than the
telephone. there was rush Of investors to
Orange, and Edison's life was made bur
den by people who wanted to buy the
photograph outright offering any terms
that he might make His advice to wait a
few years. or to go very slowly, was not
needed, and he was told that ii he would
not sell his device another supposed to be
almost as good, the graphophone, would be
put upon the market, and he would lose
money and reputation by the delay.
Then Mr.. Lippinc0tt appeared with q
great deal of money and great faith in the
invention He obtained control of the
graphOphone and offered Mr.. Edison half
million dollars for controlling interest in
the Edison phonOgIa ph. 1t was an offer
that could not be refused Having bought
out all rights In the invention, Mr.. Lippn-
colt was naturally impatient 10 see the de-
vice in the market, and Mr.. Edison did all
that he could to make the instrument suit
able for actual business uses. That he did
not succeed is not his fault. The difficulties
were simply enormous, and no one who saw
much Of the machine in its earlier stages
was surprised at the troubles which the
nh nh yxith fIhu
very start.
The first idea of Edison was that the pho
nograph was to be sold at certain price
sufficient to give reasonable profit to the
manufacturer. The total cost of making the
machine was said to be about $40. His idea
was that they should be sold for 500. The
man who had invested 500 in a machine
would be likely to experiment with it with
patience and determination to make it
work. He might be trusted to make it work
properly if it could be done. Had this plan
been followed the present fasco might have
been avoided. Instead of selling the inStru-
ment outright the PhOnOgraph Company
rented the instruments at $40 year, or $40
a quarter. About 5000 machines were sent
out on these terms. The persons who rentaA
them had no particular interest in keeping
them in order, for if they failed to work
properly they could send them back and re-
fuse t. pay the rental So as rule they
were cOnfided TO the care cf the office boy,
who found the phOnograph an untailtng
source of amusement to himself and his
friends. An apparatus requiring the most
delicate care was in most cases subjected 10
abuse.
As might be forseen, the instrument was
no sooner upon the market and In actual Use
than complaints began to pour ill., Ii would
work we'll so long as the experts of the pho
nOgraph company had it IN hand, but no
longer. During the first few months the
whole profits of the company went TO keep
ing their machines in working order, and
even in doing this they were not always
successful. Hundreds of instruments were
sent back to the company upon the ground
that they were of no use. This has virtually
been the history of the last two years. The
parent company has made some money IN
selling rights to various Territories, in which
subsidiary companies control the instru-
mert, but as, with few exceptions, these
companies have met with the difficulties in
the way Of the New York company, the fight
has been an uphill one. which seems at last
to have exhausted the resources of the chief
CAPT alistS of the enterprise. Jour
nal.