Music Trade Review

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THE MUSIC TRADE REVIEW
VICTOR SUES ON_BROWNING PATENT
COLUMBIA CO. FINANCING
Victor Co. Brings Action in U. S. District Court
in Delaware Asking That Claim One of Pat-
ent Recently Issued Be Declared Inoperative
and Invalid Throughout the U. S. by the Court
Noteholders Asked to Deposit Notes With
Guarantee Trust Co. at Once to Carry Out
Voluntary Readjustment and to Prevent Court
Reorganization—Statement by F. S. Whitten
The Victor Talking Machine Co. on Monday
of this week made the following announcement
regarding legal action brought in connection
with the recently issued Browning patent, No.
1,402,738:
"On February 1, 1922, the Victor Talking
Machine Co. filed its bill of complaint in the
United States District Court at Wilmington,
Del., against the Brunswick-Balke-Collender
Co. and John Bailey Browning, based on John-
son Patent No. 946,442, and praying that Claim
One of the Brown Patent, No. 1,402,738, be ad-
judged void, inoperative and invalid throughout
the whole of the United States. This Browning
patent was issued on January 10, 1922, following
the interference in the Patent Office between
Browning and Johnson. The issue of this
Browning patent has for the first time made it
possible for the Victor Co. to bring the con-
troversy into a court in which a judgment bind-
ing on the parties may be had."
The Browning patent was issued on January
10, 1922, after fourteen years of litigation in the
Patent Office, owing to the many interferences
involving the application for patent which was
originally filed on January 18, 1908. In 1915
Browning interested the Brunswick-Balke-Col-
lender Co. in his patent claims and assigned to
that company 51/100ths of his interest in the
patent. The Brunswick Co. has, as assignee,
been assisting Browning in his patent litigation
in the Patent Office, growing out of the inter-
ferences, and finally in the Court of Appeals,
which determined Browning's right to obtain the
patent which covers the door in front of the
tone chamber of the talking machine.
Holders of the five-year 8 per cent notes of
the Columbia Graphophone Mfg. Co. are urged
by Harold Stanley, noteholders' committee
chairman, to deposit their notes with the Guar-
antee Trust Co., the depositary of the commit-
tee, in an effort to make possible a readjustment
of the company's finances without resort to a
prolonged court reorganization. The circular
which Mr. Stanley has sent to holders contains
a reprint of a letter from Francis S. Whitten,
chairman of the board of directors, outlining the
present condition of the company. In this Mr.
Whitten says:
"In common with many other companies we
have been through a period of severe shrinkage
in the volume of our business, accompanied by
large depreciation of inventory values and other
unfavorable factors.
"At the beginning of the period the company
had outstanding contracts for large amounts of
cabinets and other materials necessary for an
extensive manufacturing program, anticipating
that 1921 business would be commensurate with
1920 business. However, 1921 sales were ap-
proximately $19,000,000 as against $47,000,000 in
1920.
"On December 31, 1921, the company owed!
large amounts to banks and merchandise credi-
tors; this debt, with the $6,000,000 five-year 8
per cent gold notes, and approximately $250,000
real estate mortgages, made a total direct in-
debtedness of about $23,200,000. Representa-
tives of the creditors have made an intensive
study of the company's condition in an effort to
get a correct view of the company's present
situation and prospects for the future.
"As a result of their efforts substantial con-
cessions
have been made by the merchandise
NEW COLUMBIA CO. CAMPAIGN
creditors and marked 1 progress has been effected
Newspaper Advertising Campaign Featuring in the reduction of the company's commitments.
In my judgment the company has a good future
Popular Music Inaugurated by Columbia Co.
under fair normal operating conditions, with
The Columbia Graphophone Co. has just in- economies that have not been possible in the
augurated a newspaper campaign that is nation- circumstances with which we have been con-
wide in scope. The advertising draws attention to fronted.
the tremendous demand for popular music, song
"On December 31, 1921, the company had cur-
and dance hits, also ballad, band music, vaude- rent assets valued on a conservative going con-
ville and comic opera tunes and old familiar cern basis in excess of $21,,600,0O0, after writing
melodies.
Many Columbia stars that are off upward of $7,700,000. These figures were
famous for their popular music are featured in arrived at by a very recent and thorough re-
the advertising, including Al Jolson, Ted Lewis, appraisal of the current assets. The company
Nora Bayes, Dolly Kay, Bert Williams, Van & has in addition plants and investments that are
Schenck, Frank Crumit and Marion Harris.
carried at a figure in excess of $9,000,000.
Included in many of the advertisements are
"The company has also contingent liabilities
lists of specially selected records, representing in respect of $1,625,000 first mortgage bonds and
some of the best sellers in the newest and lat- $1,925,000 preferred stock of Columbia Grapho-
est music. The dance music is particularly em- phone Factories Corp., which owns the com-
phasized in this Columbia advertising campaign, pany's plants in Toronto and Baltimore. These
several advertisements being devoted exclu- plants are leased to this company, which also
sively to a list of suggestions for dance enter- owns all the common stock of the Factories
tainment.
Corp. The matter of the company's obligations
on the Factories Corp.'s lease is now under con-
sideration.
J. A. MARSHALL RESIGNS
"The company is faced with the necessity of
Severs Connection With Columbia Co. to Join being relieved for the time being from payments
on account of its indebtedness. The representa-
Staff of Publishing Concern
tives of the banks and merchandise creditors,
J. A. Marshall, formerly assistant dealer serv- speaking for over $15,000,000 of the company's
ice manager, terminated his connections with debt, are agreed upon the necessity for this re-
the Columbia Graphophone Co. a short time lief, and it is hoped that your committee will
ago. Mr. Marshall is now engaged in sales pro- co-operate with them to obtain this result.
motion and direct-by-mail work, and is con-
"Prompt action by the noteholders is essential
nected with the Publishers Printing Co., New to carry out necessary plans for a voluntary
York.
readjustment of the company's finances and is
Mr. Marshall leaves many staunch friends to the interest of all creditors, including note-
behind and has their hearty wishes for his suc- holders. The sooner this can be brought about
cess in his new connections. ... , v ...... ..... .._ - - : . the more rapidly will the inevitable benefits in
FEBRUARY 11,
1922
operation accrue to the company. The only
alternative is an expensive and protracted court
reorganization, resulting in needless delay in
the financial readjustment and loss for all con-
cerned, which can and should be avoided.
"Noteholders should bear in mind that the
notes are wholly unsecured and have no priority
over any of the other indebtedness of the com-
pany."
EXECUTIVE COMMITTEE TO MEET
Governing Body of National Association of
Talking Machine Jobbers to Hold Two Meet-
ings Next Month, One in Chicago and the
Other in New York—All Members Welcome
Plans are now being completed for the regular
mid-year meeting of the Executive Committee
of the National Association of Talking Machine
Jobbers, which, as was the case last year, will
be divided into two sessions, one of which will
be held in Chicago on March 12 and 13, and
the other in New York on March 15 and 16. As
has been the practice during the past few years,
the meetings will be open to the general mem-
bership of the association, and it is expected that
practically all the members will find it possible
to attend either the Chicago or New York meet-
ings. In the Spring of 1921 executive meetings
were held in St. Louis and Boston, and over
90 per cent of the membership were present at
one or the other of the meetings.
After the meetings in Chicago on Sunday and
Monday, March 12 and 13, members of the
Executive Committee will travel to New York
on a special car attached to the Broadway
Limited of the Pennsylvania line, arriving in
Gotham on the morning of March 15 in time
for the first meeting here.
BIG VICTOR CONFERENCE IN PHILA.
Local Distributors Co-operating With Victor Co.
in Preparing Elaborate Program for Business
and Educational Conference Next Month for
Benefit of Victor Dealers in Pennsylvania
PHILADELPHIA, PA., February 6.—Plans are being
completed rapidly for a big combined business
and educational convention to be held in the
Rose Garden of the Bellevue-Stratford Hotel on
Monday, Tuesday and Wednesday, March 6, 7
and 8, under the auspices of the Victor Talking
Machine Co., supported by Victor distributors
in Philadelphia. The meetings will be open to
all Victor dealers in the greater Philadelphia
territory and the program arranged is of unusual
interest and value.
During the course of the sessions sales talks
will be given by J. S. McDonald, sales manager
of the Victor Co.; John G. Paine,- of the legal
department; Ernest John, advertising manager,
and F. A. Delano, director of the Red Seal
School. Mrs. Frances Elliott Clark, director of
the educational department of the Victor Co.,
will be present with a corps of assistants, and
will give a number of talks on the educational
phases of the Victor business.
COLUMBIA CO. VISITORS
W. C. Thomas and Calvin Anderson Call at
Columbia Co. Headquarters
A recent caller at the executive offices of the
Columbia Graphophone Co., New York, was
W. C. Thomas, president of the Tampa Hard-
ware Co., Columbia distributor at Tampa, Fla.
Calvin Anderson, owner of the Columbia Grafo-
nola Parlors at Wilmington, Del., Columbia
dealer, was another recent caller at the execu-
tive offices, bringing with him excellent reports
of the very profitable holiday trade that he closed
in
1921.
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