Compilation © 1993 University Publications of America All rights reserved. >U/ Cdv&oru lapest* A SELECTIVE MICROFILM EDITION PART III (1887-1898) Thomas E. Jeffrey Microfilm Editor Gregory Field Theresa M. Collins David W. Hutchings Lisa Gitclman Leonard DeGraaf Dennis D. Madden Mary Ann Hellrigcl Paul B. Israel Robert A. Rosenberg Karen A. Detig Gregory Jankunis Douglas G. Tarr Reese V. Jenkins Director and Editor Sponsors Rutgers, The State University of New Jersey National Park Service, Edison National Historic Site New Jersey Historical Commission University Publications of America Bethesda, Maryland THOMAS A. EDISON PAPERS Reese V. Jenkins Director and Editor Thomas E. Jeffrey Associate Director and Microfilm Editor Robert A. Rosenberg Managing Editor, Book Edition Helen Endick Assistant Director for Administration Associate Editor Paul B. Israel Research Associates Theresa M. Collins David W. Hutchings Karen A. Detig Intern Gregory Jankunis Assistant Editors Keith A. Nler Gregory Field Lisa Gitelman Martha J. King Secretary Grace Kurkowski Student Assistant Bethany Jankunis BOARD OF SPONSORS Rutgers, The State University of Newjereey Francis L. Lawrence Joseph J. Seneca Richard F. Foley Rudolph M. Bell Newjersey Historical Commission Howard L. Green National Park Service John Maounis Maryanne Gerbauckas Nancy Waters George Tselos Smithsonian Institution Bernard Finn Arthur P. Molella EDITORIAL ADVISORY BOARD James Brittain, Georgia Institute of Technology Alfred D. Chandler, Jr., Harvard University Neil Harris, University of Chicago Thomas Parke Hughes, University of Pennsylvania Arthur Link, Princeton University Nathan Reingold, Smithsonian Institution Robert B. Schofield, Iowa State Univereity CORPORATE ASSOCIATES William C. Hittinger (Chairman), RCA Corporation Edward J. Bloustein, Rutgers, The State Univereity of Newjereey • Cees Bruynes, North American Philips Corporation Paul J. Christiansen, Charles Edison Fund Philip F. Dietz, Westinghouse Electric Corporation Roland W. Schmitt, General Electric Coiporation Harold W. Sonn, Public Service Electric and Gas Company Morris Tanenbaum, AT&T FINANCIAL CONTRIBUTORS PRIVATE FOUNDATIONS The Alfred P. Sloan Foundation Charles Edison Fund The Hyde and Watson Foundation Geraldine R. Dodge Foundation PUBLIC FOUNDATIONS National Science Foundation National Endowment for the Humanities National Historical Publications and Records Commission PRIVATE CORPORATIONS AND INDIVIDUALS Alabama Power Company Amerada Hess Corporation Anonymous AT&T Atlantic Electric Association of Edison Illuminating Companies, Inc. Battelle Memorial Institute The Boston Edison Foundation Cabot Corporation Foundation, Inc. Carolina Power & Light Company Consolidated Edison Company of New York, Inc. Consumers Power Company Coming Glass Works Foundation Duke Power Company Entergy Corporation (Middle South Electric Systems) Exxon Corporation Florida Power & Light Company General Electric Foundation Gould Inc. Foundation Gulf States Utilities Company Idaho Power Company International Brotherhood of Electrical Workers Iowa Power and Light Company Mr. and Mrs. Stanley H. Katz Matsushita Electric Industrial Co., Ltd. McGraw-Edison Company Minnesota Power New Jersey Bell New York State Electric & Gas Corporation North American Philips Corporation Philadelphia Electric Company Philips International B.V. Public Service Electric and Gas Company RCA Corporation Robert Bosch GmbH Rochester Gas and Electric Corporation San Diego Gas & Electric Savannah Electric and Power Company Schering-Plough Foundation Texas Utilities Company Thomas & Betts Corporation Thomson Grand Public Transamerica Delaval Inc. Westinghouse Educational Foundation Wisconsin Public Service Corporation A Note on the Sources The pages which have been filmed are the best copies available. Every technical effort possible has been made to ensure legibility. PUBLICATION AND MICROFILM COPYING RESTRICTIONS Reel duplication of the whole or of any part of this film is prohibited In lieu of transcripts, however, enlarged photocopies of selected items contained on these reels may be made in order to facilitate research. Up ;d States Circuit Court of Appeals FOR THU SHCONI) CIRCUIT THI: NUVV YORK PHONOGRAPH COMPANY Complainant- Appe III: NATIONAL PHONOGRAPH COMPANY, Impi.kadkd. Utc. licfeiiiUnl-Appeli TRANSCRIPT OF RECORD XXXVI Mooting of February fi, 1000 . 1425 “ “ September 21, 1900 . 1424, 1420 “ “ October 22, 1900. . . 1301, 1309, 1427, 1420 " “ November 11, 1900 . 1429, 1430 " “ May 20, 1903 . 1878 Annual Mootings, 1889-1903 . 14^3 Contract with Dealers proposed by N. Y. Co. . 1004 Opinion, llA/.i;n, J . Order to Show Canso . Petition for rohoaring . Affidavit of William Falmoslock Affidavit of Hugh M. Funston . Affidavit of James L. Andam _ Affidavit of Louis Hicks . . Opinion, Hazui,, J. . Docreo . Order staying Injunction _ Bond ($10,000) . " Petitiou of Appeal nnd Allowance. Assignment of Errors . Bond for Costs ($250) . Citation . Clerk’s Certificate 1024 1944 1040 1072 1073 1975 1077 1985 1904 1008 2000 2000 2000 2010 2021 2022 'Ulnitcb States Circuit Court, SOUTH ERN DISTINCT OF NEW YOUK. Nuw Yokk I’mixomi.M'ii <’om- f'lmiplninsinl, against NATIONAL PlIONOUllAI'lI UuM- P.VNY. i ill ph'ii fled with 'I'lmmns A. Edison, Edison l’hnnogr.iiph Company and Edison Phono¬ graph Works. Defendants. COMPLAINANT’S EXHIBITS. Complainant’s Exhibit 1, December The President of the United Stales of America to Thomas A. Edison, and William E. Gilmore, Edison Phonograph Company, Edison Phono¬ graph Works and National Phonograph Co.. Greeting: We command you tlml all and singular business and excuses being laid aside, you nnd eaeli of you lie nnd appear in your proper persons before .Tolm i' either of you uru mil, to omit under the penalty pon unci i uml uvur.v of you of Two hundred aud fly dollars (§250). CUKDIILE OK CONTItAOTS TO HE PHO- Duom Contract dated Oct. 28, 1887, between Edison aud Idison Phonograph .Oo. Certificate of Organization of Edition Phono- rnph Co. Certificate of Organization of Edition Phono- hi pit Works. Contract. .luted Oel, 28, 1887, ltelweeii Edison lionogriipli Co. si ml 10. T. Oillilaiid. Assignment dated .July 17, 1SSS, Gilliland to ippiiicoll, of said contract of Oci. 2S, 1SS7. Cnntmrt. (luted May 12, 1SSS, between Edison ml Edison Phonograph Works. Citnl rnet dnied .Inly 17, 18SS, between Edison 'honogrnph Co. uml Edison. Cortitiente of Organization of North Anioriean honogrnph Co. Cent iv.iet dated .Tune 28, 18S8, between Edison ml Lippincott. Coni rnet. dated July 17, 1SSS, between T.ippin- til and North A morion ti Phonograph Co. Coni racl; dated Aug. 1, 1888, between Edison, forth American Phonograph Co. and Lippincott. Contract dated Aug. 1, 1888, between North .meriean Plionograpb Co., Lippincott and Edison 'Itonogrnpli Works. Contract dated Oct. 10. 1888. between Edison. Idison PhonogrniVli Works, North American Phon- grnpli Co. and Lippincott. Minutes of Edison Phonograph Co., July 17, Coni, met dnlcd .Inn. HI, ISSII, between the North American IMioitoj^rsipli Co. and .Mel mpolilnn Phon (graph Co. Contrurt, dtiied July III), IS, SI), licl-weeii Edison mid Uippiticott, Cftnlrtti’l ilnlWl .Tun, 22, ISill), between Edison Plionojrmpli Co. Kdison PlnuingrapU Works, Edi- son, Lippinrntt. nnd North Amcririin Phonograph Co, Conlrncl dated .Tilly 17, 1888, between [.ippin- roll unit Xorlli Ainorirnn Phonograph Co. Conlrncl doled Fell, (i, ISSII, between Xorlli American Phonograph Cn, nnd -Tolin 1’. Haines, Contract doled .Tul.v I, IS!):!, lielwcen Xortli Aniericnn Phonograph Co. nnd Xew York Phono¬ graph Co. All i II ei i li i |s lociiments nnd writings re- Intinji to Hie. subject-matter of Hie ermtrncls nliove enumerated. Witness Hie Honorable Melville W. Fuller, Chief Justice of Hie Tailed States, at, Hie borough of Mnnlintlnn, in Hie Oily or Xew York, on Hie 21 Jli tiny of Nov,, 1002. John A. Shields, (Beni, U. 8. Circuit, M' “' Court, S. T). of X. Y.) Elisha K. C.mmv Complainant's Exhibit 2, December 8 1002, J. A. S„ Ex’s. Tlie President, of the United States of Anierien to Tlioiniis A. Kdison & William E. Gilmore, Edi¬ son Phonograph Conipnny, Edison Phonograph Works nnd Xiitionnl Phonograph Co.. Greet¬ ing: Wo command you that nil and singular business nnd excuses being ln.ul untile you and each of you be and upptar in your proper persons before John A. Shields, Kscp, n standing examiner of tin; Cir¬ cuit Court, of the United States for Hie Southern District, of Xew York in the Second Circuit, lit his olliee in the Pnst-nfllcu building, in the borough of Mnnhnttnii and City of New York in said South¬ ern District of Now York, on the 25th day of July, 1002, at 11 o’clock in tilio forenoon of the same day to testify nil and singular who t yon and each of you limy know in a certain cause now pending undetermined in the Circuit Court of the United States for the Southern District of Xew York wherein Xew York Phonograph Company is com¬ plainant and National Phonograph Company and ut tiers are defendants on Hie part of the complain¬ ant; and thnl you nnd each of you bring with you nnd produce ut the time and place aforesaid all cer¬ tain papers, contracts, (locum on Is and instruments in writing relating to the transfer or conveyance of nay right of any kind arising under any patent of tlie Uniled Slates issued to Thomas A. Edison in relation to the phonograph or supplies therefor or arising under any invention or conl rnct 'hereto¬ fore made by Thomas A. Kdison relating In the phonograph or supplies therefor and all such pat¬ ents issued to Thomas A. Edison therefor and the original copies of ouch and every one of tlie con¬ tracts hereinafter designated under “Schedule of Contracts to be produced,” now in your custody graph Company, mill lliis ,vou or <>if her of yoi mv not lo i mil (lit* penally upon each am every of .you of Two Ipiridred ami fifty dollar! pill). KCIIEIH’LE Oh' CONTHACTS TO HU I'UO DUOliD. Co nil'll el, dated Orl. 28, 1887, tlelweu Edison and Edison I 'liono>rr:i]>ii Co. Ccrtilicute of nrgniii/.ntinn of Edison Phono graph Co. Cerliflcule of Oromii'/.at{i'tt of Kdison Phono- graph Works. Contvnef, dated Oel. 28, 18ST, between Edison Phonograph Co. and E. T. Oillilnnd. .Assignment dated duly 17, ISSS, Oilliluml ti Mppiuei It, of said enntrart of Oel. 28, 1887. Cnnlraef. dated .May 12, 1888, between Edison and Edison Phonograph Works. ■Contract , luted duly 17, ISSS, between Edison 1 Imiiogrrtph Co. and Edison. Certificate of Organization of North Ameriean I nonogrnpli Co. Contract dated -Tune 28, 1888, between Edison and Lippincott, Conlrnetdatrd duly H, 1888, between Lippincott and North American Phonograph Co Contract dated Aug. I, ISSS, between North 19 American Phonograph Co., Lippincott mid Edison phonograph Works. Contract- dated Ort 10, ISSS, between Edison, Edison Phonograph Works, North American Phonograph Co. mid Lippincott. Minutes of Edison Phonograph Co., July 17, ISSS, especially. Contract. Oct. 12, 1888, b'.'Lw.on Edison, Edison Phonograph On., Edison Phonograph Works Nor tii American Phonograph Co. and Lippincott. Contract dated Oct. 12, 1888, between North American Phonograph Co. and Metropolitan Phonograph Co. 80 Contract dated Jim. 19, 1SS9, between the North American Phonograph Co. and Metropolitan Phonograph Co. ^ Contract, dated July 30, 1889, between Edison and Lippincott Contract, dated Jan. 22, 1890, between Edison Phonograph Co., Edison Phonograph Works, Edi¬ son, Lippincott mid North American Phonograph Co. Contract, dated July IT, ISSS, between Lippincott and North Amercan Phonograph Co. Cm, tract dated Fell. 0 1SS9, between North American Phonograph Co. and John P. Haines. a Contract dated July 1, 1S93, between North American Phonograph Co. and New York Phono¬ graph Co. A;ll other contracts, documents and writings relating to the subject-matter of the contracts above enumerated. Witness the Honorable Melville W. Puller, Chief Justice of the United States, at the Borough of John A. Sliieb (Seal, U. S. Circuit Court S. I). of N. Y.) Alisha K. Chimp, Solicitor for c i j I n up. I-onis Ilichs, Of Counsel for Complainant. Complainant’s Exhibit 3, Decembei 1002, J. S., Ex'r. Affnrment made this 2N.I, day of .Jane, ,sss 1 l'"( Thomas A Edison „( Llcwellvn P lie Slate of New Jersey, party of the first p, ml Jesse II. Lippim-oll, of the f’itv and Xi„ Agreement, mmle this -Sth day of Uetuher, IbSi, between Thomas A. Edison, of Llewellyn i'ark, in llii! State of Notv Jersey, party of tile llrsl pan, and the Edison Phonograph Company, a corpora¬ tion organized ami existing under the laws of the State of New Jersey, party of the second part, Whereas, t he party of the first, part lias made certain inventions relating to “Phonographs,” which are fully set out and described in Lin: follow¬ ing Letters Patent of the United States and of tin Dominion of Ciinudu, mid applications for Letters Patent of llie United Slates, viz.: Letters Patent of the United States, No. 200,521, dated February tub, LS7S, Tor an “Improvement in Phonograph or Speaking Machines;” Letters Patent or tile United States, No. 213,554, dated March 25th, 1S79, for an “Improvement, in Aitlonmlic Telegraphs;” Let¬ ters Patent of the United States, dated May :18th, 1SS0, for Phonograph, and No. 227,- 07!). Application for Letters Patent of the United States for “An Improvement, in Phono¬ graphs,” filed October 1!)Ui, 1 SS7, serial No. 252, S00, Application for Letters Patent of the United Stales for an Improvement in Phonographs, filed October 21st, I8S7, serial No. 252,901, Letters Patent of the Dominion or Canada, dated October 17lb. 1887. and No. S.020. and Letters Pat of, and will forthwith prepare; and execute the necessary papers to obtain Letters Patent of the United Stales ami the Dominion of Canada there¬ on, and will assign the said applications and the let¬ ters patent to he granted thereon, to the said com¬ pany. Provided, however, that all costs and charges of obtaining such patents, and all costs and charges incurred in experiments, shall have first heen paid to the said Edison by the company. If after the filing of any application, an interference he de¬ clared with some other pending application, the cost of conducting such interference shall he met, by the company. Should any of the patents owned or to he owned by the company, he at any time infringed, suit shall at once he brought; by the company against such infringees and prosecuted to final hearing with the utmost vigor. Second. The party of the second part, hereby grants and gives unto the said Edison the exclu¬ sive right, authority and license, under each and every the letters patent, and application aforesaid, to manufacture (he inventions therein severally described, and agrees that it will grant and give unto the said Edison a similar license under each and every letters patent upon inventions or the said 33 Edison, or others hereafter ac(|iiired by it. And the said Edison hereby agrees that lie will forth¬ with equip and furnish a factory suitable for the manufacture of Phonographs, and the supplies necessary therefor, and capable of supplying the demands of (lie company, and that he will promptly meet and fill all the orders of the said company, and will deliver to it. all phonographs and supplies so ordered, at the actual cost of the manufacture thereof, plus twenty per cent, of such cost; cost mil subject If) any and all contracts hereto ade by the said Edison with the said Edison iijj Phonograph Company or others, and 44 i force, if any such there be. And the said i transfers and assigns to the party of the part, all his rights and interest; in and said contract with the Edison Speaking graph Company, if said contract have any ir validity whatsoever. .vitness whereof, the parlies hereto have set I, hnds and seals the day and year first above Thomas A. Edison. Edison Phonograph Company, by Thomas A. Edison, President. .46 Edison Phonograph Company. Laws of New Jersey. Organized 18S7.1 0. Tate, Secretary. JU 40 Complainant's Exhibit 5, December 8, 1902, J. A. S., JEx'r. Agreement, made this the 121 h day of .May, ISSS, between Tlioniiis A. Edison, of Llewellyn Park, in tlie Stale of New .Jersey, party of Lite first part, ami 1,10 K,li's,m Phonograph Works, a corporation or- jjitnissed and existing under the laws of the State of New Jersey, party of the second part. Whereas, pursuant to a certain agreement made between the party of the first part and the Edison Phonograph Company, a corporation organized and existing under the laws of the State of New 47 !l,ltal tbo 28th day of October, 1887, the said Edison was granted the exclusive right au- thority and license to manufacture the various in- ventions covered by the letters patent and applica- .ons therefor now owned or to he hereafter owned in tlmT-i Kl,lsn" . . . Company, and did tin sat. agreement agree I, . . and furnish a factory suitable for Jim manufacture of phono- S'S; n"'1 "l7!,|>',Ii,,s therefor, and E l 1 pi "PI,1'V nff ,l,c "f the said n l ,°"n?,'MP CO",pi’"'V' nn" 1(1 nuinnfaelure f:vwtnin n,li,T ^"tnict.s Edwnei r "" Rn" K( lsn” ,,n<1 Colonel ficop-e Ednaid Oouraud, of London En-daml u ", 17 from said contract, to which for greater partic¬ ularity reference is hereby made, and Whereas, the party of the second part has beeu organized to undertake the manufacture aforesaid, and is willing and desirous of assuming the obli¬ gations of the said Edison under tliu contracts be¬ tween him and the said Edison 1'honogrnph Com¬ pany, and between him ami the said Coil rand so far as tlie manufacture of phonographs and supplies for domestic and foreign use are concerned; Now, it is agreed as follows: Eirst. The party of tlie first part agrees to give and dues hereby give to tlie party of tlie second part tlie exclusive right, authority and license under each and every tlie letters patent and applications therefor under which a license lies boon grauted to him, tlie said party of tlie first part, by tlie said Edison Phonograph Company, pursuant to the •provisions of the contract of October 2Sth, 1S87, to manufacture the inventions therein severally de¬ scribed, and agrees that lie will give and grant to tlie said Edison Phonograph Works a similar license under eneli and every tlie letters patent up¬ on inventions under which lie may receive or be en¬ titled to receive a license to manufacture pursuaut to (lie contract aforesaid. And tlie party of (lie first part further agrees to give and does hereby give to tlie party of tlie second part the exclusive right, authority and license to manufacture phonographs and supplies for export use in foreign countries. It being tlie intention of this clause to confer up¬ on tlie said Edison Phonograph Works tlie same right and license under the patents owned or to lie owned hv tlie Edison Phonograph Company as arc conferred by said last-mentioned company uponf ihe said Edison, and the same right to manufacture 'I' Hi'' mimiirnehm* of phonographs mill tin* sup li«*« . . . thewfor nriil capable of supplying 10 demands of tlio said Edison Phonograph Com iii.v, mol Unit it will promptly moot nml till all tin •ilois of tin* said company ami will deliver to il * snoli persons ns it iiia.v direct, for sale within (In "ii i'il States of America anil (lie nonunion of iininlii, all phonographs and supplies so ordered, fin* neliisil cost of tin. nimiiifaelure tliereof, pins ''0"t,v j.er coni. (20*1 of such cost, cost of man- 'aclnre hciiiff defined to include cost of labor, nlerial nml genera] expense; and (lie party of the eornl part furl her agrees that it will not sell snid innogrnphs mid supplies so to lie manufactured r domes! ie consamplion, to persons other than e said Kilison Phnurtijraph Company save liv its reel inn nml with its consent. And the party of the seonml part furtiier agrees at the factory so to Ik* estahlished liy it shall lie a capacity sufficient not only to meet tiie dc- liuls of the said Kilison Phonograph Company. 1 ,0 s,lPI'l.v (lie orders of ||,e said flourmill " (I|P r,’rpil-r" uimhet, and that it will promptlv pplv all tiie orders of (in. said . i ...n’t phonographs or supplies sliiili he sold by the said ufi factory for foreign use save to tiie said Gouruud or such persons as lie may desigunte. Third. lu considumtioii of the aforesaid the party of the second part lierehy agrees to transfer, assign and deliver to tiie party of the first part, his heirs, executors, ndmiiiistriitors and assigns, titty- two per cent. (52;f) of its entire capital stock ns and when tin* smile may lie issued by it, that is to say, for every four and eight-tenths (4.S) shares of its capital stock sold or issued for property by tiie Edison Phonograph Works as and when tiie same is sold or issued, it will transfer, assign and deliver to tin; said Edison, his heirs, executors, ad¬ ministrators mill assigns live and two-tenths (5.2) shares of its capital stock until tiie present cap¬ ital of three hundred thousand dollars has been en¬ tirely issued. And tiie parly of tiie second part further agrees to and with tiie snid parly of the first part, his heirs, executors, administrators and assigns that in case at any time within twenty-five years from tiie date hereof and for any purpose it should in¬ crease its present capital of three hundred thons- sand dollars, it will transfer, assign and deliver unto tiie snid party of the flint part, his heirs, ex¬ ecutors, administrators and assigns fifty-two per 07 cent. (52pf) of each and every such increase. Fourth. And the party of tiie first part agrees for himself, IiIk heirs, executors, administrators and assigns that of tiie stock issued and delivered to him or them pursuant to tile provisions of this contract lie or they will immediately apoa its re¬ ceipt transfer and assign thirty-eight per cent. (fiS#) of tiie stock so issued and delivered to him or them to a trustee to he agreed upon between him and tiie party nf the second part, upon the follow¬ ing trusts and conditions: company which it duchies to declare ns dividends in any one year amount to over twenty-live per cent, (tin?) on its entire stock, ex¬ clusive of such stock so held in I rust ns aforesaid, then such trust, stock shall lie entitled to partici¬ pate ratably with the other stock in sucli excess; ami 2. That tlie party of the first, part, ids heirs, ex¬ ecutors, administrators anil assigns shall have the exclusive right to vote upon the stock so held in trust at all meetings of the company, and a proxy shall lie given him or then; for such purpose; and ti. That in wise the company is dissolved or should go into liipiidntion such trust stock shall not lie entitled to participate, or share in tin* prop¬ erty or assets of the company. In witness whereof, the parlies hereto have set. their hand and seals the day and year first above written. Edison Phon-ochai'ii Works. By Thomas A. Edison, President. fSeal; Edison Phonograph Works, Laws of New -Jersey. Organized 18SS.) Attest: Witness to the signature oM Thomas A. Edison. J-Tlinmas A. Edison. •Toliii F. 'Randolph. Endorsed: Thomas A. Edison with Edison Phonograph Works. Agreement. John C. Tom¬ linson. Counsellor at Law. 10 Wall St.. N V nih- Complainant's Exhibit 6, December 8, 01 1902, J. A. S., Ex’r. Agreement made this lOlli day of October, 18S8, by and between Thomas A. Edison, party of the first part, and Edison Phonograph Works, party of the second part; North American Phonograph Company party of the third part; and Jesse H. Lippincott, party of the fourth part. (Note this agreement is Identical with the same agreement set forth in Complainant’s Exhibit 4G, Mnreli IS, 1003, J. A. S., Ex’r., infra on p. down to and including the words: “Witness to Mr. Lip- pincott, J. Adriaiice Hush”; Exhibit A and Exhibit ■ B not being annexed to Complainant's Exhibit C). 02 Exhibit (i is indorsed ns follows: Thomas A. Edison with Jesse IL Lippincott nnd N. A. Phono¬ graph Co. and Edison Phonograph Works. Agree¬ ment. Dated October 10, 1S8S. Executed in quad¬ ruple. Eaton & Lewis, Attorneys nnd Counsellors, 120 Broadway (Equitable Building), New York Oily. On Exhibit 0, tin1 following words appear upon the respective seals of the corporations, to wit: “Edison Phonograph Works. Laws of New Jer¬ sey. Organized 1888," and “North American Phono¬ graph Co. Incorporated- under the laws of New Jersey, 1888.’’ ,,,, This agreement, made and entered into the twelfth day of October. 1888, by and between Thomas A. Edison of Llewellyn Park, in the State of New Jersey, the Edison Phonograph Onmpany, a corporation organized under the laws of the State of New Jersey, and (lie Edison Phonograph Works, a corporation organized under (lie laws of Hie State of New Jersey, parlies of the first part; die North gaumed under the linv.s of t lu; .Stale of Now Jersey party of the second part ; and Jesse IT. J.ippincott of the City and Stale of New York, parly of the third part. Whereas, one of Hie pnrlies of the first part. Thomas A. Edison, did on or nhoul June 28, 1SSS, enter into a certain agreement with Jesse H. IJppineott, of (lie City. County and Slate of New York, as will more fully appear by reference to said agreement, a copy of which is intended to bo hereto annexed, marked exhibit “A,” and made n part hereof; and, Whereas, Thomas A. Edison did, on October 2Sth, 1SS7, enter into a certain ngmimeiit. with the Edison Phonograph Company, a copy of which is intended to tie hereto annexed marked Exhibit "II” and made a part hereof; and Whereas, Thomas A. Edison entered into a cer¬ tain other ami further agreement with the North American Phonograph Company and ,Ti sse IT. Lip- pincott, under date of August 1st. 1888, a copy of which is intended In be hereto annexed, marked Exhibit “0,” and made a part, hereof; and Whereas, The North American Phonograph Company and Jesse IT. Lippi ncolt entered into an agreement, will, the Edison Phonograph Works an- . or 1st. 1S.S8. n copy or which is intended to be hereto annexe, I marked Exhibit der date of August 1st. intended to be hereto pincott, were by the terms thereof conditioned; and 07 Whereas, Thomas A. Edison and Jesse H. Lip- pincott. have severally performed nil of their re¬ spective promises contained in the above mentioned agreement dated June 2S, 1SSS, and have released each other from any und all further obligations under the said agreement; and Whereas, Jesse II, Lippinentl; and the North American Phonograph Company on July lStli, 1SS8, entered into an ngroymi.-iit, a copy of which is in¬ tended to be hereto annexed, marked Exhibit “E,” and made a part hereof, 'whereby Jesse IT. Lippincott bound himself to sell, transfer and confer to and upon and did sell, transfer and con- e8 for to and upon the North American Phonograph Company all the rights which lie then had or might thereafter acquire to use the patents and in¬ ventions of Thomas A. Edison relating to phono¬ graphs, and all rights and interests which he then had or might thereafter acquire in the patents of Thomas A. Edison, and any reissue and extension thereof, ami all rights which lie had acquired as well as all the rights which were agreed to bn con¬ ferred upon the North A merican Phonograph Com- jinny by a certain agreement between Thomas A. Edison and Jesse II. 1SSS, and all the sloe Com jinny referred to i Jesse IT. Lijipineotl. i Liji|iiiicoU, dated -Time 28, of (Tie Edison Phonograph the said agreement, which igiil- acquire or be entitled Whereas, Thomas A. Edison and the Edison Phonograph Company entered into a Certain agree¬ ment under ilnle of July 17. 1888, a coin- of which is intended In be herein annexed marked Exhibit “F." n ml made a purl hereof; and Whereas, Thomas A. Edison entered into a cer¬ tain agreement with -Tesse IT. Lipjiincott, North American Phonograph Company and tiie Edison of which is intended l.o be hereto annexed, mnrki Exhibit “0,” and made a part, hereof; and Whereas, the .Metropolitan Phonograph Con pnny is a corporation organized under the luv of the State of New York, for tin’* exploitation i phonographs am! plioiiogrnpli-grnplioplionos will in the counties of New York, Westchester, SnfToil Hichmoiid, Kings and Queens in the said Stale ( New York, and other purposes; and Whereas, file New England I’honogruph Con pnny is a corporation organized under the laws < tile Slate of Maine, for the purposes of like exploit; lion within the States of .Maine, New Ilnuipshin \ ernioal, Massaelnisetls, ltluide Island and Cm nodical.; and s Whereas, The North American IMmnograp Company desires to execute and deliver lo t.li Metropolitan Phonograph Company and the Ne\ England Phonograph Company rospedively. a: full and complete licenses and authority to use am exploit tile phonograph and its appliances ns tin North American Phonograph Company and sail bippincott, now have or might have, or as the' or either of them might authorize the said Metro politnn Phoimgrapli Company and the New Enir hind Plimio-vjijOi Coni pa a v to lmve and posset ifthe agreements above re'ferred to between sain Edison and The North American Phonograph Cm, Pl~r"”' «-w »ii .im . . p2,i and of other good and valnaide eonsideru lions, the 73 receipt whereof is hereby acknowledged, it is agreed by ami between the parties hereto ns fol¬ lows : First. Tiie parties of the first part lierby grant to the party of tiie second part full and complete right and authority to grant to the Metropolitan Phonograph Company and the New England Phonograph Company all and singular tiie rights purporting or intended to lie conveyed to the said two companies entitling them or either of them I -/ / j / . to exploit the phonograph as fully and as complete- ' - ly ns (lie Nnrlli American Phonograph Company it- C- f . £ / . i self might do if all the agreements aforesaid Jmil 74 Q- Jmmmi in nil respects performed, and ns fully Ttml ^ UjJj }AjU\D "completely ns the said North American Phonograph ’ Company might, or could have so granted .ifjhn ngreement of June 28, 188S, hereinbefore referred to, between Thomas A. Edison and Jesse IT. Lippin- cott were now in ail respects fully complied with; ' and the North American Plionograpii Company and Jesse TI. Lippincolt, severally hereby ngree that, in respect of (lie Metropolitan Plionograpii Company anil tiie New England Plionograpii Com¬ pany, they will keep and perform all tiie agree¬ ments by them respectively to be kept and per¬ formed with Thomas A. Edison and the Edison 75 Plionograpii Works and tiie Edison Plionograpii ^ Company of New Jersey, ns fully and ns complete¬ ly ns either or both of them would contract or lias or have contracted lo keep and perform (he same if tiie agreement of June 28, 1SSS, had been in all respects fully performed-. Second. The parties of the first part hereby far¬ ther agree with the party of tiie second part that tiie rights hereby authorized to be granted by the North American Phonograph Company to tiie Met- s hereby given to and conferred upon the 'sees of tlio North American Phonograph , Homely I In: Metropolitan Phonograph oik] the New England Phonograph Com- meson of the noo-poi'ronimnee of nny of toons of the agreement of June 2S, 1 SSS, esse II. Lippineott nnd Thonins A. Edison, ire referred to, by Jesse H. Uppineott, North American Phonograph Company, I’orly or purlins (other than the said two net ine- under the authority or license of Idppinenfl iuut the North American |)h Company, and outside of and beyond >f Ibe territory for which licenses are, pur¬ lin terms of this agreement, to be given to two licensee corp> rations: Now, there- parlies of the first part agree that as re- sa’d lb on-cs of the North American ph Company, namely (lie Metropolitan tph Company . . (|,e Nt‘w England i|'h Company, they, Hint is to sav, the par- firsl "-ill '■•>( in any way annul • any of the rights or benefits hereby given 'inferred npen the sat.l (wo lieeiisees, or iitoiii, by reason of any suet, non-perform- re u'b as aforesaid of (be above mentioned tl n •Turn* 185W, provided,, howover. piuiy, or either of them, in so far as r^iects,. the / tufrltOTy’witliin wltieb they or either of them may bo-authori/.cd by tlia NorlliAmerieaii Phonograph Company- to'exploit phonographs and pbonograpb- graphopliones7 shall keep or perform their or its agreements which Uiuy or eitiirr of them have con¬ tracted or may licreaftsr contract to perform with the North American Phonograph Company or with Jesse II. Lippineott; and proviileil, second, that in so far us respects the stuil'sbveiiir terriloriM above mentioned, the Metropolitan Phonograph Com- pany and the New England Phonograph Company j shall severally keep and perform whatever agree- \ inrnts the s:iid North American Pbonograpli Com- l patty or tile said Lippineott, touching the respective ! territoiies just mentioned, have agreed with tiie \ parlies of I lie first part to keep and perform. But as regards the aforesaid two provisos, nothing here¬ in contained shall have the effect to ninhe either of tliu said two licensees linble for any breach or mm-pcrformancc by (lie other of any obligation or duty to be performed by it within and affecting its said territory. Fourth. The North American Phonograph Com- I pany nnd Jesse H. Lippineott hereby, in so far as re¬ spects the Metropolitan Pbonograpli Company, ami i tlio New England Pbonograpli Company, will severally keep and perform with 'I’liomas A. Edi¬ son ami tlio Edison Pbonograpli Works and the Edison Phonograph Company, of New Jersey, all and singular tlio conditions, provisions nnd cove¬ nants of the said agreements of August 1st, 1S8S, and June 2Sth, 1SSS. Fifth. The North American Phonograph Com¬ pany nnd Jesse II. Lippineott agree that if tliey or either of them fail to fully and promptly supply the said licensees, namely, the Metropolitan Phono¬ graph Company and the New England Phonograph Company, or cither of them, with phonograph and graphnphono supplies, as required by any present er future contract, between them or either of them, II till.' Edison I '111 ■llllf'l 2t|lll \ les hereof set their hands and sculs the* 'nrth A,ncrirati Phonograph Co., Tncor "n,1,T thr* Laws of New Jersey, 1SSS). George TT. Eifzwilson, Secretary. Complainant's Exhibit 8, December 8 1902, J. A. S., Ex’r. Agreement' made this twenty-second day of dm wary, I8III), between the Edison Phonograph Con puny, of the lirsl part, and the Edison Plionograp Works, of I In? second pari, anil Thomas Aim Ed son, of the third part, and Jesse It. Lippincntt, e Ilie fourth part, and The North American Phoni graph Company, of the fiflli part. Whereas, by agreement, tinted the L’Stli day of Oi loher, LSS7, the said Edison was granted the exeb sive rigid to innnnfactnre, in Hie United .States an Dominion of Caimiln, eerlain inventions rcIwMn to piionographs, ns more fully appears by the sail agreement, reference to which is now made fo grealer parlienlarity; and Whereas, by agreement, dated the Ititli day o M.'i.v, LS.SS, Hie said Edison gave to tin*, said Edisoi Phonograph Works tin* aforesaid exclusive right ti iimunfaelure, granted to him as aforesaid ; and Whereas, tin* ]iarlies liereto have, in filet, assent rd to the aforesaid transfer of manufacturing rigli b.v tin* said Edison to the said Edison Phonograpl Works, lint have never executed formal pa pci's set Jesse n. Lippimotf (L. S.) Edison IMiono^iiipli Works, i 'vs of Now Jei-sey. luxit] ISSS.) test: A. 0. 'I'a to, •Secretary, Thomas A. Edison. (Skat,.) n. Union, Witness to Mr. Edison. Jesse II. Lippineoll;. (Sk.M.A itness lo Mr. Lippincott: <\ Will cult. The North Ainerienn Phonograph Company, H.v .Tesso IT. Lipplncott, President. kat,; North American Phonograph Co. rorpo rilled under (lie Laws of Xew Jersey, ISSS.) test: tiro. IT. Fit/.wilson, Secretary. Bndoi-sod : Edison Phonograph Company, Edison allograph Works, Thomas A. Edison, Jesse R. ipineott. and the North Ainerienn T'lionon-rnnh in;; Hilly swiini, cli'|iosi's mill soys: | Itnvc rcml iltiilnvils nf . . mu ; >ln I n:i u [ fur use tin (lie m,, rill' |wlimtoni,\ in.hiiii t.ioii, im,| | l,clieic (|m| | fnil In present ii nimrl. view „f (|,c- silimlinn. in' ns I knew, there Inis never liceu ,'itiv recneiil If till* vii HUii.v »r i tic i'"tl'ieiii}r III.- plini.nerni.il reennl l.v cult " it snlnl . . . purlieu I/, rt.v by cutl ii‘ I'ei'i.nl i„ n wnx nr wnx-like ftmterinl,' wliiel t, <"1 I""™'* In' i. mixture nf lieesv " |M,'in'";' ^ I- "sserleil |,mt. (Ilis f(,„ [ITere follows n stnlement nf mol l,o. Knstoii. individually and ns president of tile said The Cidmnhin Phonograph Company and • heir and each of ihcir servants, ngenls. attorneys, employees, workmen and confederates, and each and every of them, may he perpetually restrained ami enjoined by (lie order and injunction of this Hon¬ orable Court from directly or indirectly making, constructing, using, vending and delivering, work¬ ing or putting into operation or use. or in any wise counterfeitin'? or imitatin'? ilie snid several in- I ihidorsed : i Failed Stales Circuit Court, SimlliiM'ii liisliiil nf New Yuri;. Xatiunul 1 ‘tiouo- rd'llpll f '( llll | ill II V. I'M isi ill l'hli|}ft^Olj,1l \YlirkS it ml Nnv Yoik l,hfriio.:i,i|tk pymp.un vs. Tin1 Colutn liia I'lmJiMiM.ipfi f onij. mv ,ii,i| Hi | vviinl 1>. Ksislon, iiidu nln tlh .tin] as |ircsiilcMl nf said company, Hill nf cnmplaiiit inn puti-M* Xo*. #8“ US, (ill •IIIIUIIS. If 1,7(11 and UUI.27 1 . liver & Driscoll . I'lninatil-’ Sol'rs.. t'.l'i Wall street, X. V. City, X. Y. r. S. Circuit Court, Filed, Out, 0. ISM. •Min A. Shields, fieri;. Complainant’s Exhibit II. December improvements in pitonogrnplis ; in par. 5, “Sth 1 5 1 ay of May, ISSS” slum Id lie ‘•17! Ii day nf June, SHO" and “numbered :!S2,-It(2” slinuld lie “num- ered ..130,278"; in par. (i ‘“second day of April, ■SSI)'’ should lie “l.Stli day of October, 1S02” and improvemeiits in phonogram blanks" should lie improvements in phniinornph cutting tools’’; in nr. 7, “second day of April, 1880" should he “18th ay of October. 181)2’’ and “niimhered .100.(118'’ liotild he “minihered •181.383''; in par. S, “12th ay of Xoveinher, 1880’’ should he “IStli day of letolier, 1802’’ and “improvemeiits in phnno<;raia limits'’ should he ''improvements in phonograph eprodueers’’; in par. 0, “12th day of Xoveinher, 152 SS0’’ should he “18th day of Oetoher, 1S02” and iiundieml -11 1,701.’’ should he “niimhered ; 1 par. 10, “17th day of June, 1800’’ should he “20th ay of June, 180, 1” and “improvements in phono- ram h Infills'.' should lie “Improvements in phono riiphs"; in par. 1 1. “17th day of .Tune, 1800’’ should e “20th day of June, ISO:?’’ and “numbered 430,- 71*’ should he “iiiiml . . -100,870"; in par. 1(5, “to apply the market with phono, tirani blanks” should e “to supply the market, with phonographs and pplianccs therefor"; par. 10 nf Exhibit 11 con- tins several differences from par. 10 of Exhibit 10, nil is in full as follows: 153 “More specifically your orators show that Ameri- 111 firaiihoiihone Comonnv. a West Virginia cor- 727 Complainant's Exhibit 12, December 157 S, 1902, J. A. S., Ex'r. UNITED STATES CIECUIT COURT, Soutukiin District op Nbvv York. National I’iionoubaph Com¬ pany, Edison Idinnogra ph Works mid Now York Phono¬ graph Company against Tub Colpmria IOionooraiti Company and Edward 1). Easton. On consent, of tlic respective parlies hereto, it is herehy Ordered that this suit he, and the same hereby is, discontinued, without, costs to either party as against the other. E. HENRY LACOMBE, Circuit Judge. We herehy consent to the entry and tiling of the above order. 1E9 DYER & DRISCOLL, Complainants’ Solicitors. LEE & LEE, Defendants’ Solicitors. ' " By POLLAK & MAURO, Of Counsel. Endorsed: United Stales Circuit. Court. Soulh- ern District of New York. Tn Equity. National Phonograph Company, Edison Phonograph Works and New York Phonograph Company against The Columbia Phonograph .Company and Edward D. be mi infringer of said patents covering sueh plionn- 161) graphs. Anil the party of the seemul part agrees to plaeu upon every phonograph used or vended by it a notice that sneli phonograph is licensed under the patents, of the party nf the llrst part, only so long ns the serial number on said phonograph remains upon it without erasure or alteration. In witness whereof the said parties have hereto affixed their corporate seals and caused these pres¬ ents to lie signed by their respective Presidents the day and year above written. EDISON PHONOGRAPH CO., 17c Thomas A. Edison, President. Signed, sealed and delivered p in the presence of \ (L. S.) Attest, J. F. Randolph, Secretary. NATIONAL PHONOGRAPH CO., By W. E. Gilmore, President. (L. S.) 171 Attest, J. F. Randolph, Secretary. Complainant's Exhibit IS, December 8, 1902, J. A. S„ Ex’r. CERTIFICATE OF ORGANIZATION. This is to certify, that we, George H. Lambert, Frances B. Stewart and Joseph K. Franks do here¬ by associate ourselves into a. company, under and « uiiui eti mm iiiuety-si.v, and the period it which it shall terminate is the twenty-seventh' ln.V of January, Nineteen immliecl and forty-six. In witness whereof, we imve hereunto set our !mmls and seals the twenty-tirth (f„y of Juuunry, Eighteen hundred and ninety-six. •■dirge JI. Lambert, (L. S.) Frances I!. Stewart, ( L S.) Josepli K. Franks, (L. S.) state of New Jersey, ) " lie it remembered, that o tli is twenty-fifth day ir Lord One thousand fight hundred and ninety-six before mo, the sub- icriber, a Master in Chancery of New Jersey, per- innally appeared Ocorge IT. Lambert, Francos B. ■Stewart and Josepli K. Franks, who, I am satis- led. are tlie persons named in and who executed the 'oregoing rerlifiealo of corporation, and I having list made known to them the contents thereof, they ■everally acknowledged that they signed, sealed ind executed tin; same as their voluntary net and Iced for the uses and purposes therein expressed. ITOYVAHT) tV. HAYES, Master in Chancery of New Jersey. Endorsed : Certified Copy of Certificate of Or- tnnizatinn of National Phonograph Company, kited January Unfit. ISttfi. lieceived and recorded a till* dilice of the Clerk of the County of Essex his tint 1 1 day of Jany., IStlli. in Book 11. of In- State of New Jersey, Department of State. T. Henry C. ICelsev. Secretary of Slate of t ho Complainant s Exhibit 10. December 8. 1002. J. A. S.. Ex'r. (Nolo. Complainant's Exhibit III. December S, ltl0-> ,T- s-> i« i'loiilinil with Kxliiliit A. mi Hexed In tin* iiliiilnvil of Thomas Kiiison, veri- fioil .Taima rv L’;l, ism:, an.l forming pnrt of Com- pluinant's Kxliil.it :«!. I’oliriinry 1!), niO.'S, .J. A. fit.. Kx'i'.; Kxliil.il ill an, | Exhibit A being a notice of J"I"i 1!- lli'icivor, dale, I Kol.nmrv l.T, .8r and hut linn of tin.* box the* lll‘a)l'is appears, mill also, “Patent- 1W!S; A,"'n -,l- 1SS»! A'ovcmber 12th. :Tu,;e 37’ ]S!I"; 0<‘-ber IS, JS02; May 8, 3H00, ^(‘plcinhor 1 1 tit, 1000.) Complainant's Exhibit 20. December 8, 1002, J. A. S., Ex r. jwoTV? V?\T . . s- cm,.. ' °0, , Afthmutl Phonograph y .p|,js (.jr. r: . . 77,io' Vi,is,‘ njmfn' , T Genuine lMisoi, l;„nnl, .villi a, u , '' f 1'"K0n TO'0,'<1* ore ticketed ,'s .cg.stcrcd sH ^ Nntmnul Phonograph Co., Orange, N. J., U. S. A., New York Otlico, 135 Fifth Avenue. Chicago Office, 1,U Wabash Avc. Foreign Dept. 15 Cedar St., N. Y. Complainant’s Exhibit 21, December 8, 1902, J. A, S„ Ex’r. Thomas A. Edison, President. A. O. Tate, Vice President. T. II. Lombard, General Manager. Scott. Tremain, Treasurer. Cleveland Wal¬ cott, Secretary. The North American Phonograph Co. Executive OITlces, No. 32 Park Plaee. New York, .Tan. 23rd, '1)4. Tile Ohio Phonograph Co., Cincinnati, Ohio. Gentlemen: We lmve information that phonograph No. .183(1 class “M" which yon have on rental is in possession of McKinney Bros. 13S Main street, Springfield, Mass. Will you kindly lake the necessary steps to have this machine brought hack into your territory, and oblige. C. Walcott, •Secretary. Complainant’s Exhibit 22, December 8, 1902, J. A. S„ Ex’r. Tit is agreement, made this first-day of .Tuly, 1803, >y and between The North American Phonograph Company, n corporation organized under the laws >f the State of New .Terser, party of the first part. tlio parties (.hereto or either of them according to 100 the terms of said agreement of October 12th, 1888, as amended as aforesaid, is hereby waived so far as the same or any of them would in any way con¬ flict with the performance of the agreements made h,v this instrument. It being understood that on or about the day of 1800, said The Metropolitan I’honogrnph Company and the party of the second part hereto said New York Phonograph Company were consolidated into a single corporation with the consent of the party of the first part, hereto and that the party of the second part hereto has since covered and operated, and is now covering and op- 200. crating, the territory originally covered and pos¬ sessed by the two companies so consolidated, when taken together, vis. : the whole of the State of New York. Second, h'roin (lie dale of this agreement until tlie first day of July, 1805, the party of the first part, The North American Phonograph Company, shall have the sole nnd exclusive right to exploit, lease, sell and otherwise dispose of the instrument known as the Phonograph, and all supplies, appli¬ ances nnd attachments therefor, in nnd throughout tlie territory now covered nnd operated by the party of the second part, nnd it, being expressly under- "01 stood nnd agreed that, the party of the first part may sell, lease or dispose of such phonographs without in any way restricting the use of the same, or in other words, shall in the language of the trade have the right to make “unrestricted sales” of phonographs, supplies, appliances nnd attachments therefor; nnd it being further expressly understood and agreed that the business so transacted by the party of the first, part shall be at its own cost nnd expense, nnd without risk or contribution in any way of or from the party of the second part. uro of the parties hereto to agree upon swell prices 20B within sixty days after the execution and delivery of this agreement, then such prices shall lie settled by three appraisers, one to he appointed by tin: par¬ ty of tile tlrsl. part, one hy tile party of the second part, and the thjrd by the two so appointed, and a derision hy I wo of the three so eliosen shall he bind¬ ing upon tlie parties hereto'. If at the time when any amount shall lie so found to lie due to the party of the second part hy the party of the first part, the party of the second part shall he justly indebted to the party of the first, part in any sum of money then the amount so found to he due or so much thereof ns may he required to liquidate said indebtedness 200 shall he credited to the party of the second part hy the party of the first part. And such credit shall thereupon he considered as a payment under this agreement pro tun In, and thereafter, if the party, of the second part shall remain justly indebted to the parly of the first part, the balance so remaining due shall he liquidated hy the party of the first part from the earliest accruing amounts that shall fall due to the party of the second part under the provisions of paragraphs “Third” and “Fourth’’ of this agreement. An.v excess of stock of supplies and appliances over and above the Indebtedness of the party of the 2Q7 second part to the party of the first part as afore¬ said, if any there shall he, shall he taken anil held hy the party of the first part on consignment and payment shall lie made therefor by the party of the first part, to the party of the second part as and when the same shall lie sold by the party of the first part. Sixth. The party of the first part shall each year during the continuance of this agreement, exneml in advertising its business in and throughout the TTnilcd States of America, at least the sum of Five 'miuuncii in, anil will Hereafter be inserted i tlui variniis agreements of other companies or iml vi'luiilf, awl (lint if, is fiiti-mlctl to provide for til expenditure of one sum of Kivu thousand dollar onl.V, and not us n separate covenant in (lie ease o I'Mi'li agreement. Siivoutli. Tim party of flic first part Hirers I use its besl cade, mu* to successfully exploit tin imsinoss of selling phonographs, supplies, attach iiienfs ii nil appliances- therefor, in and tlironghou the territory covered by this agreement and in am throughout the United Stales of America, and foi Ulat purpose shall select, ami employ the most com' potent, suitable agents, to wlmm it' will pay roar missions averaging about thirty-three and oiie-thin graphs111'11" °" Ule ,llU,,n,lv fnl,.V ratifies and con- ' ‘Weeinents heretofore made, and tin: 11- rcprcsciilod to the party or the second part the ex- imt condition of its |m;sent luisiness relations with Ihe Ameriean firnphophnne Company and the in¬ strument heretofore known or designated ns the tirnphophoin: or Phonograph Grnphophone, and that this agreement, is made subject, to any compli¬ cations f lint, may hereafter arise in respect thereto. Tenth. It, is further understood and agreed that lids agreement shall in no way operate as a release by the party of the first part of any of its rights with respect to tile stock of the party of the second part, which is provided to he hereafter delivered to the party of the first part, or to .Tcsse II. Lippin- coll, Trustee, oi- his successor, ns the party of the first part may direct; or to the benefits arising from said stock from the time of its delivery. Ia witness whereof the parties hereto have re¬ spectively caused tin's instrument to lie executed by their proper officers nnd their respective, corpo¬ rate seals to lie hereto affixed the day and year first above written. (Signed.) The North American Phonograph Co. By Tlios. A. Edison (Seal.) Presdt. Attest f Slprned.) Cleveland Wnlcutt ■Secretary. (Signed.) New York Phonograph Co., By Jno. P. Haines Pros’ t. T.‘i (lute to C. S. Till liter, to the Tull end of the terms 217 thereof. 2. The Phonograph Companies hereby grant to the Ci pi ] I kC i ipnny tlie right and license to manufacture and sell talking machines and sup¬ plies therefor under the following patents granted upon inventions of Thomas A. Edison, to the full end or the terms thereof, to wit: Eos. 382,410, granted Ma.v S, 1888; 382,418, granted May S, 1888; 302.1112, granted May 8. 1888; 380,1174, granted •Inly 31, I88S; 333,1100, granted December I, 1S8S; 003.1I07, granted December 4, 1888; 303, OOS. granted December 4, 1888; 400,010, granted April g^g •2, 1880; 100,017, granted April 2. 1880; 400,048, granted April 2, 1880; 114,701, granted November 12, 1880; 400,274, granted .Tune 17, 1800; 430,278, granted June 17, 1800; 484,583, granted October IS. 1802; 484,584, granted October IS, 1S02, and 400,870, granted .Tune 20, 180.3. 3. The licenses granted by Sections 1 and 2 are not exclusive and are not transferable. It is also understood that no license is intended to be granted by either interest to the other under any patent not specified in Sections 1 and 2, the intention being to maintain the present characteristic differences between the machines of the two interests. It is 210 also agreed that the Grnphophone Company will not. apply to any talking machines which it puts nut the trade-name “phonograph,” and that the Phonograph Companies will not apply to any talk¬ ing machines which they put out the. trade name “graphophone.” It is further agreed that neither interest will bring suit against such types of appa¬ ratus or supplies ns have been put out commercially by the other interest before the date of this con¬ tract, whether put out by either interest before or after this contract. patents, nr any nr I hem. If suit he brought r n grii|ih>i'|<)nttic patent, the firnphnphonc puny shill I hear the expense, tmt the Phono- li C'niiipiiiiies slmll Imve the right to ho repre- ‘<1 h,v their counsel in such suit ,'it their own ex- unit rii-r rn-xn, ihe Phonograph Coni panic.' lienr ihe expense of suits brought under their its, subject to the right of lln- firapliophone |innv to lie represented by its counsel nt its ex- “• If cither party desires n suit brought under (nit of the other, nnd such oilier for tiny reason lies to prosecute, the party desiring such suit Imve the rigid to use (lie name of tile other • for tlie purposes thereof, witness whereof, fin* pari ies hereto have d these presents to tie signed and scab'll the md year first above written, each by its presi- (hereunto duly authorized. American firapliophone Co,, By 13. r>. Easton, President. M America ii nraphnphono Co. ■porated 1 887. Corporate Real.') hi IT. Croinolin, Secy. Edison Phonograph Works, By Thomas A. Edison, President. [Sual; Edison Phonograph Works. Laws of New Jersey. Organized 1888.] Attest: J. l'\ Baudot ph, Secretary. National Phonograph Company, By W. S. Mallory, President. [Skai.; National Phonograph Company. Incorporated 1890.] Attest: J. F. Bnudolph, Secretary. State of Xew 1'ork, i County of Xew York, j On this 7th day of December, 1890, before me per¬ sonally came Edward D. Elusion, to mo known, who, being by me duly sworn, said that lie is the Presi¬ dent of American Grapliophone Company, the cor¬ poration named ns the party of the first part in the foregoing agreement; that lie knows the corporate seal of said ewporation ; Unit the seal affixed to the foregoing instrument is such corporate seal, and that lie executed the said agreement as president of said corporation, .and Mint such act is in con¬ formity with the by-laws of said corporation. B. A. Piper, [Suai..] Notary Public, Kings County. Certificate filed in New York County. State of New Jersey, | gg . County of Essex, ) ' On this 7tli day of December, 1S90, .before me per¬ sonally came AVilliam S. Mallory, to me known, u-lm Iwitnn* hv me cliilv sworn, said ttiat lie is tlie liii'lMl. X. liver, Notary Public, Stale of New .Terser On this Till liny of December, IWItl, before me per sonnlly riimc Tlumi.i*. a. Kdison, to mo known, who “,inK 'O' . . Kworn, said Unit lie is tlio presi lent of Kdison IMiiinogpapb Works, llto.cor[Kirnt.ioii mmoil ns one. of (be pnnios of the second part in lie fi.n'jroiiifr agreement ; (hut lie knows the enrpo- •nlii senl of sn id ciirpornt ion ; Unit. Uio seal nlllxcd " Hie ron-oing Instrument. is siicli coriKirnte senl, Hill III, 'll he execute, | the snid agreement ns presi- lent, of snid corporntion, mid that such net, is in ■onforiiiily will, tiie by-laws of snid corporntion. Tiichd. X. Dyer, Notary I’nhlie, State of Now Jersey. Complainant's Exhibit 24, Dec. 17 1902. J. A. S. Es'r. An indenture iniiile this eighteenth duv of Feb- S,U,f,,!?r aml between PTiTir V'/."1’ "ll'Vl‘r ,,r lllr North American 'l'ic p' "n!i . * . . <">•' ■•'■••-I- Tnrron,[ r p L‘ l0'v,M1,,,‘* "f Went Oran^hT , ,»-r.nn on,w '».v tiie Court of Cimn- ivlierein Waller Cutting, executor, and otliers arc .'inn pin I tin tits mill tiie North American Phonograph Jompntiv is defendant, among other tilings, it was ordered that .Toll n It. Hardin, receiver of tiie North American Phonograph Company, after advising the mine by circulars addressed to tin; various stock¬ holders and creditors of the North American Pho¬ nograph Company mid to such other persons as, in liis judgment, best might secure bidders at tiie sale, iiml in such other way as lie might deem necessary, should make sale of the entire assets of said North American Phonograph Company ( except claims against tiie directors of snid corporation for any breach of trust or duty) and Hint, such sale should lie mntle in the following manner: First, that the stork of the Kdison Phonograph Company should lie put np separately mid the sale stayed at tiie high¬ est lull without knocking down. Second, that tiie remaining assets to ho sold should he put np to¬ gether and the whole sold at once, the sale to 1m stayed at the highest hid without, knocking down. Third, that tiie entire assets fexcept ns aforesaid) inclusive of the Kdison Phonograph Company slock, should he put up ns a Whole together ami the sale stayed at the highest bid without knocking down ; and that, if the aggregate of the highest bids for property first and secondly offered, should lm higher than the highest bid for the property thirdly offered, the stock of the Kdison Phonograph Com¬ pany should Im sold to Hie highest bidder therefor, and the remaining nssets (except as aforesaid) should lm sold to (Tie highest bidder therefor; and if the highest bid for tiie entire nssets (except ns graph Company (except ns aforesaid) were sold to 235 the said Thomas A. Edison; and tin; said Thomas A. Edison having hid in said properly for, and in behalf of, (lie said National Phonograph Company and having assigned and transferred the said hid to the said National Phonograph Company and au¬ thorised and direr led the said John It. Ilurdin, re¬ ceiver, as aforesaid, lo eonve.v, assign and transfer the said properly so hough! by the said Thomas A. Edison lo the said Nalionnl Phonograph Company; and the said National Phonograph Company hav¬ ing mused n part of (he assets of the North Ameri¬ can Phonograph Company, to wit, n contract hear¬ ing dale the first day of August, eighteen hundred 230 and eighty-eight, made between the said North American Phonograph Company and Jesse TT. Lip- piiieolt anil Thomas A, Edison; a contract hearing date the twelfth day of October, eighteen hundred and eighly-eighi, made between the North Ameri¬ can Phonograph Company and the New England Phonograph Company; a eonlracl, hearing date the eighteenth day of January, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the New England Pho¬ nograph Company; a contract hearing date the nineteenth day of February, eighteen hundred and eighty-nine made between the. North American 237 Phonograph Company and the New Jersey Phono¬ graph Company; a coni met hearing date the thir¬ teenth day of June, eighteen hundred and eighty- nine, made between the North American Phono¬ graph Company and the New Jersey Phonograph Company: a, contract hearing date the fourteenth day of May, eighteen hundred and eightv-nine made between the North American Phonograph Company and L. Halsey Williams; a contract, bear¬ ing date the third day of September, eighteen hun¬ dred nnd eighty-nine, made between the North 81 North A mem'ii » Phonograph Company and the 241 State Phonograph Company of Illinois; ft contract hearing date the twenty-seventh day of June, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the Wyoming Phonograph Company; a contract hear¬ ing date the nineteenth day of August, eighteen hundred and eighty-nine, made between the Jiorth American Phonograph Company and the Wyoming Phonograph Company; a contract hearing date the first day of October, eighteen hundred and eighty- nine, made between the North American Phono¬ graph Company and (lie Central Nebraska Phono¬ graph Company ; a contract bearing date the second 242 day of December, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the Central Nebraska Phonograph Company; a contract hearing date the eighteenth day of November, eighteen hundred and eighty- nine, made between the North American Phono¬ graph Company and the Old Dominion Phono¬ graph Company; a contract hearing dntc the second day of December, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the Old Dominion Phonograph Com¬ pany; n* contract bearing date the nineteenth (lay of November, eighteen hundred and eighty-nine, 043 made between Die North American Phonograph Company and the Texas Phonograph Company; a contract bearing date the second day of December, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the Texas Phonograph Company; n contract, bearing date the first dav of October, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the Nebraska Phono¬ graph Company: a contract, hearing date the thirty- first day of Deeemher. eighteen hundred and eighty- n llir .North American L'liono^rnph Compiun io < < ui'ol l‘|io*ii»;*'[W]ili Company; i ft bearing (Into the sixteenth «!iiy of Decent .rhtccii hundred and ninrt.v. made between tin. American Pibviiogrnph Company, mid tin '■'•'"'•id I ’lir Jilijii it]di C . t/nn.v ; II enntrnel - dale tln> seven Hi day of Jmuinry eighteen •d mid eighty-nine, made lietween the North nil Phonograph Company mid the Pacific -ril!'!i 1 'oiiipnnv : a eontraet bearing date (he nth dav of dime, eighteen hundred mid nine, made between the North American rraph Company and the Pacific Phonograph ny: a eontraet hearinjr date the ninth day of '.v, eighteen hundred and eighty-nine, made n the North American Phonograph Coin¬ ed Hie Ohio Phonograph (N^npnnr; a eon- earing dale the thirteenth day of dime, eigli- iindred and eighty-nine. made between the American Phonograph Company and the monograph Company; a contract hearing ie first day of December, eighteen hnndred rhly-eight, made, between tin- North Auiori- nnograpli Company and George I. Whitney; •net hearing date the twenty-eighth dav of r- eigli teen liundred and ninety, made he- dm Wth America,, Phonograph Compnnv 11 " estern Pennsylvania Phonogrnnli Com- ' eon raet hearing date the fifteenth dav of . . ,lml ‘‘ighty-nine made ml ri , A,npri,>,,n Phonograph Com- ‘ l, n- ■■ eontraet hearing e In.teeiith day of dime, eighth,, hundred 83 | - Phonograph Company and the Columbia Phono- "47 graph Company; a contract hearing date the twen¬ ty-sixth day of January, eighteen hundred and eighty-nine, made between the North Americau Phonograph Company and John L. Marvin; a con¬ tract hearing date the thirteenth day of dune, eigh¬ teen hundred and eighty-nine, between the North American Phonograph Company and the Florida Phonograph Company; a contract hearing date the second day of .March, eighteen liundred mid eighty- nine, made between the North American Phono¬ graph Company and William J. Warren, John C. Wood mid Albert W. Clancy; a contract bearing dntc the thirteenth day of Jane, eighteen liundred 248 mid eighty-nine, made between the North American Phonograph Company mid the Missouri rhono- grapli Company; n contract hearing date the elev¬ enth day of March, eighteen liundred nnd eighty- nine, made between the North American Phono¬ graph Company and John h. Tnglis; a contract hearing dale the twenty-fifth day of June, eighteen hundred nnd eighty-nine, made between the North American Phonograph Company nnd the Ocorgin Phonograph Company; n contract bearing dnte the fourth dav of February, eighteen liundred nnd ciglity-ninei made between the North American Phonograph Company nnd the West Coast Phono- 2i'J graph Company; a contract bearing date the thir¬ teenth dav of June, eighteen liundred nnd eighty- nine, made between the North American Phono¬ graph Company nnd tl.e West Coast Phonograph Company; a eontraet hearing date the first day of April, eighteen hundred and eighty-nine, made be¬ tween the North American Phonograph Company nnd the Alabama Phonograph Company; a contract hearing dnte the thirteenth day of .Tune, eighteen hnndred and eighty-nine, made between the North American Phonograph Company nnd the Alabama r- ' ' ,nm y-iniH% Hindi* beLwmi fto? North Aini'i-ipHM Phonograph Com puny and till •Soiilli Dakota l’lioiiosfi'ii,pli Coin puny ; a con tract I, (‘ilrin" l!ll‘ lliirtccntii day of .Turn', eighteen hundred nml cighty-ninc, made between tin.* North American Pimm, graph Company, anil tin; South n"k",,i |,,l0»<*ffti||pli Conipmiy; a contract bearing 'li'.v of April, cig . . hundred nml ''iglily-ninc. made between the North Aiacrican I Inmofriapli Company and the Kentucky Phono- kr,,ph Company: a contract, hearing date 'the third day of July, efghtee« hnndrcd and eighty-nine, umdc lid ween the North American Phonograph Company and the Kentucky Phonograph Company: II. ,?,"ni,'t ri i.ff date the eighteenth day of June, dglitcen hundred and eighly-nine, made between “ i 0r ' Phonograph Company and the 1 1 nnessee hom.graph Company; a contract hear- ng date the third day of July, eighteen hundred ind eighty-nine, made between the North American Phonograph Company and the Tennessee Phono- -n> pi, Company; a contract, hearing date the tenth jug date the sixth day of February, eighteen linn- 2f;3 dred and eighty-nine, made between the North American Phonograph Company and John P._ '^.Haines; a contract, hearing date the thirteenth dny_ . of Jjuie, eighteen hundred and cightyniinc, madu &J between the North American Phonogrnpir Com¬ pany and the New York Phonograph Company; a contract hearing date the twelfth day of October, eighteen hundred and eighty-eight, made between the North American Phonograph Company and the Metropolitan Plumognipb Cnnipjiny;. a contract bearing dale the twciity^iTririmy of June, eigh¬ teen hundred and ninety-three, made between the; - ^ North American PlionograpliCmnpany and the 2.ri-l Metropolitan Phonograph Company; a contract hearing date the tenth day of October, 'eighteen lmn- . X- dred mid eighty-eight, made between the North American Phonograph Company and the Michigan Phonograph Conipmiy; a contract hearing date the fifteenth day of November, eighteen hundred and eighty-eight j made between the North American Phonograph Conipmiy mid the Kansas Phonograph Company; a contract hearing dale the thirteenth day of June, eighteen hundred mid eighty-nine, made between the North Amerirnn Phonograph Company mid the Kansas Phonograph Company; a contract hearing date (lie twelfth day of October, 3I-r) eighteen hundred and eighty-nine, made between (lie North American Phonograph Company nml the Wisconsin Phonograph Company; a contract bear¬ ing date die tenth day of -Tammry, eighteen hun¬ dred and eighty-nine, made Mween the North American Phonograph Company and the Metro¬ politan Phonograph Company; a contract hearing dale the eighteenth day of January, eighteen hun¬ dred and eighty-nine made between the Nort 1 American Plinnogrnpli Company and the New Eng¬ land Phonograph Company. nlh day of January, eighteen hundred and eighty- nine made between thy North American Phono- graph Company and the Pacific Phonograph Com¬ pany; a 1-ont l-ai-t hearing dale t lie lliirleelllh day ol June, eighteen httndr d nnd eighty-nine made be¬ tween the North Amerii-an Phonograph Company and lln- I’aeilir I'liomigrnpii Company; n eonlrarl bearing date the ninth day of January, eighteen hundred and eighty- nine made between the North American Phonograph Company nnd tile Ohio Phonograph Company; a ronlrai-t hearing date the 281 thirteenth day of Jun\ eighteen hundred ami eighty-nine miide between the North American Phonograph Company and the Ohio Phonograph Company; a eonlrael hearing dale tin- first dn.v of December, eighteen hundred and eighty-eight made between the North American Phonograph Com¬ pany ami ( leorge I. Whitney; a eonlraet, bearing date tin- twenty-eighth day uf Oetobir eighteen hundred and ninety made between the North American Phonograph Company and the Western Pennsylvania Phonograph Company; n rrmtmrt bearing dale tlie flfteenlli dny of January, eighteen hundred and eighty-nine made between the North 232 American Phonograph Company and Edward D. Easlon ; a eonlrael bearing dale the thirteenth dny of June, eighteen hundred and eighty-nine made between the North American Phonograph Com¬ pany and the Columbia Phonograph Company; u contract braring date the twenty-sixth day or Janu¬ ary, eighteen hundred and eighty-nine made lie- tween the North American Phonograph Company ;">d John L. Marvin; a eonlrael hearing date the day of March, eighteen hundred and eighty-nine, made between tlie North American Phonograph Company tuid William J. Warren, John C, Wood and A liier I. W. Clancy; a contract hearing date the thirteenth day of June, eighteen hundred and eighty-nine made between the North American Phonograph Company nnd the Missouri. Phono¬ graph Chilli puny; u contract hearing date the eleventh day of March, eighteen hundred and eighty-nine, made between tlie North American I'houngrnpli Company and John I-. Inglis; a con¬ tract bearing date the twenty-fifth day of June, eighteen hundred and eighty-nine, made between tlie North American Phonograph Company and tlie I ii-orgin Phonograph Coni|>nny; a contract bearing dale the fourth day of February, eighteen hun¬ dred and eighty-nine made between the North American Phonograph Company nlnd the West Coast, Phonograph Company; a contract hearing date the thirteenth day of -Time, eighteen hundred and eighty-nine made between tlie North Ameri¬ can Phonograph Company and tlie West Const Phonograph Company; a contract bearing date the llrst, day of April, eighteen hundred nnd eighty- nine made between the North American Phono¬ graph Company and the Alabama Phonograph' Company; n emit, rnel. bearing date the thirteenth day of June, eighteen hundred and ciglity-ninc made between the North American Phonograph Company nml tlie Alabama Phonograph Company; n contract bearing dale the fourth day of April, eighteen hundred and eighty-nine, made between tlie North American Phonograph Company nnd the Tlollins Investment Company; a contract boar ing da te tlie thirteenth dny of June, eighteen luin- ml nirrlitv-nine. made between the North York Phonograph ( :«iiiL[iii ny ; u roiilnict bearing 28!) (Into till! twelfth (la.v of October, eighteen hundred uml eighty-eight made between the North Ameri¬ can J.Mioimgia|ili Company and the -M iromditan . . icrapli Company: eoulruet hearing date the twenty-third day of -lane, eight, ecu hundred and nino.ty-three made hetwe:n the North American Phonograph Company and the .Metropolitan I’iiono: graph Company; a . . H ad, hearing date the Tenth day of October eighteen handled and eighty-eight made between tin: North American Phonograph Company and tin.- .Michigan Phonograph Company . a contract bearing date the lifteentli day of No vonihor, eighteen hundred and eighty-eight made 200 between the North Amcriean Phonograph Com¬ pany and the Kansas Pin . graph Company; a eon- tract bearing date the thirteenth day -of June, eighteen hundred and eighty-nine, made between the North American Phonograph Company and the Kansas Phonograph Company; a ennlrnd hearing date the twelfth day of October, eighteen hundred n,ml eighty-nine made between the, North American Phonograph Company and Hie ■Wiscon¬ sin Pinning rnpii Company; a mntruel, bearing date the tenth day of January, eighteen hundred and eighty-nine nmde between the North Aiiieririin Phonograph Company and the Metropolitan 201 Phonograph Company; a mn tract hearing date the eighteenth day of January, eighteen hundred and eighty-nine made between Hie North American Phonograph Company and the New England Phonograph Company; and all moneys due and to grow due under the provisions of said "contracts and all fights thereunder to be bought for and on bcilialf of Frederick P. 01, t. and having assigned and transferred its said bid for said contracts anil all moneys due and to grow due under the provi¬ sions of the said contracts and all rights thereunder lmlu bet \vet;u the North American Phonograph lompauy ami Jesse 11, Lippincott and Thomas i. IvINon, and lirhveen the North American ’honograph Company and the said New England ’honograph Company, the said New Jersey ’honograph Company, the said L. Halsey Wil- 'ompany, (lie said Louisiana Phonograph Com- mny, the said Louisi,--ia Plionograpli Company, nniited, the said Iowa Phonograph Company, the aid Minnesota Plionograpli Company, the said Spokane Phonograph Company, (ilie staid State ’honograph Company of Illinois, the said Wyom- rig Phonograph Company, the said Central No- iraska Plionograpli Company, (lie said Old Do- ninlon Phonognipli Compnny, tlio said Texas ’honograph Company, the said Nebraska Phono- ;rapli Company, the said Cliiengo Central Phono- :mph Compnny, (he snid Pacific Plioaograpli Com- »any, the said Ohio Phonograph Company, the aid flrorge I. Whitney, the said Western Penn- ylvanin Phonograph Compnny, the snid Edward ). Euslnn, the snid Columbia Phonograph Com- inn.v, (lie said John L. Marvin, the said Florida ’honograph ('nmpnnv, (lie said William -T. Wnr- en, John C. Wood and Albert W. Clancy, the said ilissouri Phonograph Compnny, (lie said John L. nglis, the said Ceorgia Phonograph Company, lie said West Cons! Phonograph Company, tile aid Alnlinma Phonograph Company, the snid Kol¬ ias Investment Compnny, the said Colorado and Jtali Plionograpli Company, the snid South Pa- :ola Phonograph Company, (lie said Kentucky ’honograph Company, the said Tennessee Piiono- rraph Compnny, (lie snid Moiilann Plionograpli ’em pa ny, the said -ToluiJl Jla.iues. _li i o snid New puny, ninl all 1 ho iniineys* due and to grow due un¬ der tlie ]irovisions of sn ill rcmt raids and all rights Hu fl-undi i i in Iiiivi- and i" hnlil Jin, same ittitn the said National Phonograph Company, its suc¬ cessors and assigns loilsand iln-ir only pro|ier use, lienidit; and bi'hoof forever. In witness whereof, the said John T!. TTnrdin, receiver of liie Not’tlt American Phonograph Com¬ pany. hereto has set liis hand and seal the day nnd year fust, above written. Signed, sealed and delivered: , John II. Hardin, (Seal.) ■Receiver North American Phonograph Company. In the presence of IToward W. Haves. State of New Jersey, \ . County of Essex, 1'"' Jto it. rememliercil tlmt on the twenty-first; dny of March, eight een hundred and nine tv-six before me the subscriber, a .Master in Olmnecry anil a Notary Public of New Jersey, personally appeared John 11 Hardin, rereiver of this North American Phonograph Company, who 1 nm satisfied is, and who is to me hnown and known to he, the grantor in the foregoing deed named and who executed the Complainant's Exhibit 26, December 301 17, 1902, J. A. S., Ex’r. This exhibit is set out iu the record at Q. GOT, testimony of Edison. Complainant’s Exhibit 27, December 17, 1902, J. A.S., Ex’r. This exhibit, being the plea in the suit of Amer¬ ican Graphophoue Company v. Edison Phonograph Works, is set forth iu Complainant’s Exhibit 4G, .March 18, 1903, J. A. S. Ex’r. 303 Complainant’s Exhibit 28, December 17, 1902, J. A. S., Ex’r. This exhibit is set forth in the certified- copy thereof forming Complainant’s Exhibit 3G, Feb¬ ruary 19, 1903, J. A. S. Ex’r. Complainant’s Exhibits 29 and 30, De¬ cember 10, 1902, J. A. S., Ex’r. These two exhibits, being the complaint and rep¬ lication iu American Graphophone Co. v. Edison Phonograph Works, are set forth in Complainant’s Exhibit -16, March 18, 1903, J. A. S. Ex’r. 308 Complainant’s Exhibit 31. December 17, 1902, J. A. S., Ex’r. This exhibit is set out in the record at Q. 77G, testimony of Ellison. 301 Complainant's Exhibit 32, February 17, 1903, J. A. S., Ex'r. (2-178.) Received for record OcL 7, 189(5, and recorded in hilier W 53, page 377, of Transfers of Patents. In testimony whereof I have caused tlie seal of the Patent Ollice to he hereunto nlllxcd. John S. Seymour, [Skai„] Commissioner of Patents. Ex’d. A. c. W. Whereas, the undersigned, John R. ITnrdin, re¬ ceiver of the North American Phonograph Com¬ pany, is the owner by assignment of certain Let ters 306 Patent of (lie United Stales {111111(0(1 upon inven¬ tions of Thomas A. Edison for improvements in phonographs and related subjects, which Letters Patent are nmntiered and dated as follows: No. 130,2715, dated Jane 17, isoo. No. 130,278, dated June 17. 1890. No. 181,583, dated October 18, 1892; And, whereas. National Phonograph Company, a corporation organized and existing under and by virtue of (lie laws of the State of New Jersey, and having a place of business at the City of Orange in said State, is desirous of acquiring the entire 300 interest in and to said several Lettera Patent and the inventions covered thereby Now, therefore, to all whom it may concern, be t know n that, for and in consideration of the sum or one dollar lawful money of the United Stales, to the said John R. ITnrdin, receiver as aforesaid, in hand paid, the said Hardin, receiver, has sold, assign's and transferred, and by these presents does sell, assign nrnl transfer, to the said National in terestTiT nud' t" ^ ri«ht’ tit,e »”* merest n and o each and all of said Let (era Pat- ont. together with any and all right, or rights of 103 action, claims nnd demands whatsoever for dam- 307 ages or profits, or both, which said Hardin, re¬ ceiver, may have had or might have for past in¬ fringement of said several Letters Patent, nnd with full right to the said National Phonograph Com¬ pany, in its own name, to sue upon nnd collect the same for its own use and behoof; the same to be held and enjoyed by the said National Phonograph Company nnd its successors and assigns to the full end of the term for which said Letters Patent were granted, ns fully and entirely as the same would have lieen held and enjoyed by the said Hardin, re¬ ceiver, lmd this assignment nnd Rale not been made. In testimony whereof, the said John R. Hardin, 353 receiver, of the North American Phonograph Com¬ pany, has hereunto set his hand nnd seal, this 5th day of October, 180(1. John R. Hardin, Receiver of the North [Seal.; American Phonograph Co. In the presence of : Howard W. Hayes. State of New Jersey, ) County of Essex, * On this 5th day of Octolier, 189(5, before me, a notary public in and for the State of New Jersey, personally appeared John R. Hardin, to me known 309 and known to me to he the individual described in and who executed the foregoing assignment, and ho duly acknowledged to me that ho is the John R. Hardin, receiver of the North American Phono¬ graph Company, whose name is signed to the fore¬ going assignment, .and that he signed his name thereto as his free act and deed as such receiver, for the uses n.nd purposes therein set forth. Howard W. Hayes, [Notary's Seal.] Notary Public in and for the State of Now Jersey. 105 X<». 123.039. dated March 11, 1SOO. 313 Xo. 111,701, iliilcil November 12, 1SS9. Xo. 137,120, (luted September 30, 1890. Xo. •105,1172, dated December 29, 1801, X». 113,507, (luted i JoccmlKir 30, 1S90. X<>. 513,095, (luted January 23, 1891. Xo. 137,127, dated September 30, 1890. Xo. 137,129, (luted September 30, 1890. Xo. 151.911, dated .Tune 30, 1891. Xo. 181,581, doted OetolMT IS, 1892. Xo. 18-1.585, duted October 18, 1S92. Xo. 151.912, duted .Tune 30, 1891. Xo. 150.301, duted .Tilly 21, 1891. Xo. 153,711, duted .Tune 9, 1891. 3,4 Xo. 150,302, dated July 21, 1891. Xo. 511,923, (luted July 2, 1895. Xo. 590.280, dnlod June 27, 1893. Xo. 500,281, duted June 27, 1S03. Xo. .157,311. duted August. 11. 1891. Xo. 511,92-1, dated July 2, 1895. Xo. 500,282. dated June 27, 1893. Xo. -100.123, dated September 29, 1891. Xo. 190,191, (luted April 25, 1893. Xo. 513,097, dated January 23, 1S94. And wlierpns, National Phonograph Company, a K corporation organised .and existing under and by 31“ virt.no of the laws of (be State of New Jersey, and having a place of business at. the City of Orange in said State, is desirous of acquiring the entire in¬ terest in and to each and all of said several Let¬ ters Patent, and the inventions covered thereby; Now. therefore, to all whom it may concern, be it known Hint, for and in consideration of Hie sum of One dollar, lawful money of Hie United States, to the said John Tf. TTnrdin, receiver, in hand paid, lie, said TTardin, receiver, lias sold, assigned and transferred, and by these presents docs sell, assign HG anil transfer, unto (ho said National Fhonograpli Company, tin? whole rifflit, title find interest in nnd to cneli ii.ml nil of the aforesaid Letters Patent, to- get 1 1 or with any and .Mil right or rights of action, claims and demands whatsoever for damages or profits nr hath which said Hardin, receiver, may have had or might have for past infringement of said several Letters Patent, and with full right to the said National Phonograph Compnn.v, in its own name, to sue upon and collect the same for its own use. nnd behoof; the same to in* held and enjoyed by the said National Phonograph Company nnd its successors nnd assigns, to (lie full end of the term jiy for which said Letters Patent are or may he. grant¬ ed, as fully nnd entirely ns the same would ltare been held and enjoyed by said nnrdin, receiver, had this assignment and sale not. been made. In testimony whereof, the said John Tt. Hardin, receiver of Hie North American Phonograph Com¬ pany, 1ms hereunto set his hand and seal, this 5tli day of October, ISfifi. John Tt. TTardin, [Skat,.] ■Receiver of the Nortii American Phonograph Co. Tn the presence of: Howard W. Hayes. 318 State of New Jersey, y County of Essex, ( On this Hill day of October, 1 8(10, before me, a notary public in nnd for the State, of New' Jersey, personally appeared John Tt. nnrdin, to me known and known tn me to lie (lie individual described in and wlie executed (lie foregoing assignment, nnd lie duly acknowledged tn me that lie is the John R. Hardin, receiver of the North American Phono¬ graph Company, whose name is si cried tn the fore- ror t he uses and purposes therein set forth. Howard W. Hayes, [Notaiiy's Skai,.] Notary Public in and for the State of New Jersey. Complainant's Exhibit 34, February 17, 1903, J. A. S., Ex’r. Cert idea to <(f tire organic, ntibn of the Edison Phonograph Company, This is to certify, Unit we Tliomns A. Edison, John C. Tomlinson, Earn T. Gilliland, Alfred 0. Tate and Samuel Tnsiill, do hereby associate our¬ selves into a company under and by virtue of the provisions of an Act of the Legislature of the State of New Jersey, entitled “An Act concerning cor¬ porations’’ approved April seventh one thousand eight hundred nnd seventy-five, nnd the several sup¬ plements thereto nnd Acts amendatory thereof, for the purposes hereinafter mentioned, and to that end we do by this our Certificate set forth: First: That the name which wo have assumed to designate such company, nnd to be used in its busi¬ ness nnd dealings is the Edison Phonograph Com¬ pany. Second. That the place in this State where the business of such company is to be conducted is the town of Harrison, in the County of Hudson. The principal part of the business of said company with¬ in this State is to be transacted in the said town rtf Harrison, in the County of Hudson, nnd the place out of this State where the same is to be con¬ ducted is the City of New York, in the State of New York where the company is to have a business alii re. That tile objects for-wliioit file company- is formed ire. to maim fact, are nnd soil Phonographs nnd 109 apparatus mul devires embodying the mine; to pur- elmse mul own I .oil its PiiIoiiI, mul to grant rights mul IU-ciisi-s IIiiti-iiiiiIit; In Im.v lands mul to erect thereon buildings mul inni-liiner.v for the purpoHCH of such mmiiifnctim-; to issue houils secured by mortgage upon the properly and franchises of tho said Company. Third. That the total amount of the Capital Stock of the said company is One million two hundred thousand dollars: the ntimher or shares into which the same is divided is Twelve thousand nnd the par value of each share is One hundred dollars; The amount with which mid Company will commence business is One million two hundred Ihoumnd dol¬ lars, which is divided into twelve Ihoumnd shares of a par value of One hundred dollars each. Fourth. The iininrs and residences of the stock¬ holders mul the number of shores held by each are as follows; to wit,: Thomas A. Hilison. New -Tei-si-v, 1 1.9(10 shares Alfred 0. Tate, New Jersey, 10 “ John C. Tomlinson, New York City, 10 “ 13*m T. Gilliland, Now York City, 10 « Samuel Tnsull, Schenectady. N. Y., 10 “ Fifth. Tiie period at. wliieli said Company shall commence business is Iho Ihird day of October, ISSi, and the period on which if shall terminate is the third day of October, 1037. In witness whereof, we have hereunto set our * hands mid seals the 30th day of September one thousand eight hundred mid eighty-sevon. Signed, sealed, executed and de¬ livered in the presence of Alfred \V. Kiddle. U. W. Seely. Thomas A. Edison, (u s.) John C. Tomlinson, (l. s.) Ezra T. Gilliland, (l. s.) Alfred O. Tute. (l. s.) Samuel Insull. (l. s.j Slate of New Jersey, ) County of Hudson, )' KS' ' He it remembered tliat on this 30th day of Sep¬ tember, 1S87, before me, Jtichnrd N. Dyer, a No¬ tary Plihlie for the Stale of New Jersey, person¬ ally appeared, Thomas A. Edison, John 0. Tom- linson, Ezra T. Gilliland, Alfred 0. Tnte, and Samuel Insull who I mu satisfied are the persons named in and who executed tho foregoing certifi¬ cate, and I having first made known to them the eiiulents thereof, they did each acknowledge that they signed, scaled and delivered the same as their voluntary act and deed. State of New Jersey. He it remembered that oil this seventh day of October, A. D., Eighteen hundred and eighty-seven, before me the subscriber, Joseph B. Brnman, a Commissioner of Deeds for the State of New Jer¬ sey, in and for the State of New York, resident in said Cit.v of New York, personally appeared Alfred W. Kiddle, who being by me duly sworn according to law. on bis oath ileposeth and saitli that lie saw no 328 Thomas A. Edison, .Tohn C. Tomlinson, Ezra T. Gilliland, Alfred O. Tate and Samuel Insull, who are the persons named in and who executed the foregoing eerl ideate of the organization of the Edi¬ son Phonograph Company, sign, seal, execute and deliver the said foregoing certificate as their and each of their voluntary act and deed for the uses and purposes therein expressed, and that he the said Alfred W. Kiddle subscribed his name there¬ to at the same time as an attesting witness of the execution thereof. Alfred W. Kiddle. Taken, sworn to nnd subscribed 320 before me this seventh day of October, A. D., 1887. In witness whereof, I have hereunto set my hand and affixed any official seal the day nnd year in this certificate last above written. Joseph B. Brnmnn, Commissioner of Deeds for the State of New Jersey, in and for the Slate of New York, resident in said City of New (Seal.) York. Office Equitable Building, 120 Broadway, also 1270 B’way, New' York City. Endorsed: “Received in the Hudson Co., N. J. 330 Clerk’s Office Oet. 3/87 and recorded in. Clerk’s Record #7 page 75, &c. Dennis McLaughlin, Clerk.” “Filed October 8th, 1887, Henry O. Kelsey, Secretary of State.” “Received in the Hudson Co., N. J., Clerk’s Office October 8th, 1S87, and recorded in Clerk’s Record #7, page 0-1, Sec., Dennis McLaughlin, Clerk.” STATE OF NEW JERSEY, Dei'aut.me.nt of State. 1, S. D. Dickinson, Secretary of State of the State of New Jersey, do hereby Certify that the foregoing is a true copy of the Certificate of Incor- Iteration or Edison Phonograph Company, and the endorsements thereon, as the same is taken from and compared with the original filed in my office on the Eighth day of October, A. D., 1887, and now remaining on file therein. In Testimony Whereof, I have hereunto set my hand nnd affixed my OfTlcinl Seal, (Seai„) at Trenton, this Thirteenth day of Jan- unry, A. D., 1903. S. D. Dickinson, Secretary of State. Complainant’s Exhibit 35, February- 17, 1903, J. A. S., Ex’r. Certificate of the Organization, of the Edison Phonograph Works. This is (o certify that we, Thomas A. Edison, Charles Batchelor, and John C. Tomlinson, do here¬ by associate ourselves into a company under and by virtue of the provisions of an act of the Legisla¬ ture of New Jersey, entitled “An Act concerning ® Corporations,” approved April 7, 1S75, and the sev¬ eral supplements thereto, and Acts amendatory thereof, for the purposes hereinafter mentioned, nnd to that end we do by this, our certificate, set forth : First: That the name which we have assumed to designate such company, and to he used in its business and dealings, is the “Ellison Phonograph Works.” Second: That the place in this State where the I' mil. I lie period at winch said company shall 3 J7 commence is Hie thirtieth day of April, 18S8, and Hie period at which it shall terminate is tiie thir¬ tieth day of April, HISS. In Witness Whereof, we have* hereunto set oar hands and seals the With day of April, A. D., ISSS. Thomas A. Edison, seal Chas, Hatchelor, seal John 0. Tomlinson, seal Signed, sealed, executed and ) delivered in the presence of ) Alfred W. Kiddle. Stale of New York, » g3S [Jity and County of New York, J He it rememhered that on this thirtieth day of April, A. a, ISSS, before me the subscriber, Joseph H. Uranian, a Commissioner of Deeds for the Slate >f New Jersey in and for the State of New York, •eshle.nt in the City of New York, personally ap- icared Alfred W. Kiddle, who being by me duly iworn, according to law on his oath, deposeth and mil h, that he saw Thomas A. Edison, Charles iatchelor and John C. Tomlinson, who are (lie por¬ ous named in and who executed the foregoing cer- i (Irate of the organization of the Edison rhono- rraph Works, sign, setil, execute and deliver the gg9 oreeoiinr certificate as their and each of their vol- 115 111 340 mul n nixed my <>nieinl seal tire day mid year Wfes certificate lust above written. (li. S.) Joseph It. Itrniinin. ( „ „ issl mi f Heeds for tl.e State of New .Jer¬ sey, in and for (lie Stale of New Vork, resident in’ said City of New York. Endorsed ‘•Heeoived in Hie oilier of Hie Clerk of Essex County on the 1st day of May, A. I ».. 1888, and re- c (inled in Hook No. ti of I iieor|iornted Business Companies, on paste 1", &c., S. A. Smith, Clerk.’' 341 “Filed May 3d, 18SS Tlenry C. Kelsey Secretary of State.” STATE OF NEW JERSEY, Department of State. t, S. D. Dickinson, Secretary of State of the State of New Jersey, do hereby certify that the foregoing is a true copy of the certificate of incor¬ poration of “Edison Phonograph Works,” and the endorsements thereon, ns the same is taken from and compared with the original filed in my office on the third day of May, A. D., 1S88, and notv re- 342 maining on file therein. In testimony whereof, I have hereunto set my hand and affixed my official seal, at [Seat..] Trenton, this thirteenth day of January, A. D., 1003. S. D. Dickinson, Secretary of State. Complainant’s Exhibit 36, Feb. 17, 343 1902, J. A. S., Ex’r. CERTIFICATE OF THE ORGANIZATION of THE NORTH AMERICAN PHONOGRAPH COMPANY. Tins is to certify that we, Jesse II. Lippincott, Thomas It. Lombard, George S. Evans, George II. Fitswilson and John Robinson do hereby associate ourselves into a company under .and by virtue of the provisions of an Act of the Legislature of New Jersey, entitled, “An Act concerning corporations,” approved April 7, 1S75, and the several supple- incuts thereto, for the purposes hereinafter men¬ tioned, and to that end we do by this, our certifi¬ cate, set forth : First. That the name which we have assumed to designate such company, and to be used in its busi¬ ness and dealings, is THE NORTH AMERICAN PHONOGRAPH COMPANY. Second. That the place in this State where the business of such company is to be conducted is the City of Jersey City, in the Comity of Hudson. The principal part of the business of said com¬ pany within this State is to he transacted in the 345 said City or Jersey City, in the County of Hudson, which is to be the principal place of business of the said company, and the place where its princi¬ pal office is to be located. And the places out of this State where the same is to be conducted are the City of New York, in the State of New York, and elsewhere throughout the United States and Canada. And that the objects for which the company is formed are to manufacture, trade in, buy, sell, rent, lease and otherwise acquire, hold and dispose of nliono'Taplis, phnnngrn pli-grn phophoncs, and in¬ struments of iiiiv other kiml or description, dc- sicmHl made or used or intended for (lie recording mul reproducing or sounds, and any or either or them or any part thereof, and any and all supplies, appliances, materials and articles now used or re¬ quired and that, may he hereafter used or required in the manufacture, use or operation of said phono¬ graphs, phonogrii ph-graphophones and instruments or nnv or either of them .and also for the purpose of renting, leasing, selling or otherwise disposing of to other firms, persons or corporations, the right or rights to manufacture, trade in, buy, sell, rent, lease” or otherwise dispose of such phonographs, phonograph-graphophones and instruments or either of them or any part thereof or or the right to use the same either generally or in any specified State, locality or territory or in any general or lim¬ ited manner; and also for the purpose of acquiring, receiving, owning and controlling by lease, rental, purchase, invention or otherwise, any patent, pat¬ ents, applications Tor patents, contracts, devices, designs, instruments and formulas or any or either of them, relating to the art or science of recording and reproducing sound, and for the purpose of pur¬ elmsing materials therefor, and any other purposes incidental to the business, trading and manufactur¬ ing aforesaid. The portion of the business of said company which is to be carried on out of this State is the manufacture, trading in, buying, selling, renting, leasing and otherwise acquiring and disposing of the phonograph, phonograph-graphophones nnd in¬ struments above described and the supplies, appli¬ ances, articles and materials as above specified so far as the business of said company may require, and the renting, leasing, and selling or otherwise disposing of rights as above specified and other oi sain company is hix million six hundred thou sand dollars; the iiiiiiiIhm- of shares into which tli same, is divided is sixty-six thousand ; and the pa value of each slum* is One hundred dollars. Tin amount with which the said company will com menre business is Forty thousand dollars, which i divided into four hundred shares of a par value o One hundred dollars each. Fourth. The names and residences of the stock ladders and the number of shares held by each ari is follows, to wit: I esse II. liippincod, Xew York City, Eighty (SO) shares. riiomas It. Lombard, Xew York City, Eighty (SO) shares. 1 corgi* II. Filxwilson, Xew York City, Eighty (SO) shares. Icorge Si. Evans, Now York City, Eighty (80) rohn Kobiiison, Xew York City, Eighty (80) shares. Fifth. The period at. which said company shall ommcncc is the fourteenth day of July, A. D. one liousand eight, hundred and eighty-eight, nnd the eriod at which it shall terminate is the first day of fay, A. D. one thousand nine hundred .anil thirty- mis mil s Is tli f urtwiilli ilii.v of -I'll.v, A. I). >no thousand eight hundred mill eighty-eight. .1 esse II. Idppineotl. [Si:ai..| Thou. I!. T.imilmnl. [Si:.\i,.j (ten. S. 10 VII IIS. rSBAI-| Ceo. II. Fit/.wilsnn. fSlCAl-l John Itnhinsnn. [Skai,.] fsijrnoil , son 111! mill deliveml ) ill tlin presence of ) M. W. Nolan. Slate of Now York. I w . Oily ami County of Now York. ) He it vonieinlioroil Hint, on this fourteenth day of July, A. D. eighteen hundred mill eighty-eight, lie- fore me the undersigned, n notary puldio, duly com¬ missioned and sworn, personally appeared Jesse H. Lippincolt, Thomas H. I.omlmrd, Ceorge. S. 15v- mis, George H. Fit/.wilsnn and John lloliinson, who I am satislled are I lie persons named in and who executed the foregoing eertiflcale, and I having llrat liiiiilc known to them the eontenls thereof, they did each acknowledge that they signed, sealed and delivered the same as their voliinlary act. and deed for (he uses and purposes therein mentioned. Ceo. F. Hingluim, [i„ s.] Notary Pnlilic, N. Y. No. 218. State of New York. , City and County of New York, \ S'“‘ ' I, Janies A. Flack, Clerk of the. City and County of New York, and also Clerk of the Supreme Court for the said City and County, the same lioing a Court of Iteeord, do hereby certify that. Oeo. F. Bingham, whose name is suliserilied to the certifi¬ cate of the. proof or acknowledgment, of the an¬ nexed instrument and thereon written, was, at the time of taking sueli proof mid acknowledgment, a of stud State to take tile acknowledgment! proofs of deiils or cnnveymii-es Tor hind, true or hereditaments in said State. And further I urn well iieipiainted with (lie handwriting <>l notary public and verily believe Hint the sign to said certificate of proof or ncknowiedgmi genuine. Ill testimony whereof, | Imve hereunto si liiiud and allixed the seal of the said Com- Couiity, the 1-ltli day of July, 18SS. James A. Fin [l~ 8.] ( ( endorsed :) “Koeoived in llie Ollicc of Hie Clerk of Hie C< if Hudson on the 14 Hi day of July, A. 1). ISf 12 o’elin-k, Jl., mid iirnrditl in Hook 8 of O Itcrnril for said Comity, page 220. Dennis Mcl.nuglil I, S. 1). Dickinson, Secretary of State ol State of New Jersey, do hereby cert ify that the ;oing is n true copy of tile Certificate of Incur] ion of The North American Phonograph Coni] ml tile endorsements thereon, as the same is I rom and compared with Hie original filed ii llice on the sixteenth day of July, A. D. 1SS8, ow remaining on file therein. In testimony whereof, T have hereunto set and and allixed m v official seal at Trenton, m Complainant's Exhibit 30, Feb. 1903, J. A. S., Ex’r. UNITED STATES CIRCUIT COURT, DlSTIlUT OF Nutt’ J HUSKY. Edison riioNooiiAni Woiikk. J 5B9 Gentlemen: Please take notice Hint, upon the pleadings unit proceedings in this cause anil the nnidavits of Thomas A. Edison and S. O. Edmonds hereto an¬ nexed, .and a copy of each of which is served upon you herewith, we shall, at a term of this honorable Court for motions In he held in the United Stales Court Dooms, Trenton, New Jersey, on Tuesday, the 28th day of January, 1SIMS, tit the opening of the Court on that day, or as soon thereafter as counsel can he heard, move for an order suspending pro¬ ceedings herein until March 1st, 18il(», and directing that as soon after such dale as counsel can he 380 heard, such counsel appear before this Honorable Court, for an apportionment of the time for taking testimony in this cause, and for such other and fur¬ ther relief as to the Court, may seem meet. Respectfully, Dyer & Driscoll, Solicitors Tor Defendant. To Messrs. Lee & Lee, Solicitors for Complainant. Receipt of a. copy of a Hove notice and nflidarit acknowledged this 23rd day of January, 1800. Lee & Lee, Soli-s. for Complainant. IN THE UNITED STATES CIRCUIT COURT. 301 Eon tub District of New Jeksbi1. American Okafuoi’uonb Com- Edison Phonograph Works. State of New Jersey, i County of Essex, j Thomas A. Edison, being duly sworn, , deposes and says ns follows: I mil the president of the defendant corporation and own a majority of its capital stock. The pres¬ ent suit, ns I am informed and believe, is based upon an amended bill of complaint tiled in Janu¬ ary, 1895. The original bill, which was filed in February, 1S93, alleged ownership of the patents in suit in the Volta Graphophonc Company, which had, in fact, prior to that time assigned its title to the present complainant. The principal facts leading up to and explaining the situation ns it existed in the phonograph business in February, 1S03, are as follows : ! Prior to June, 18SS, I organised the Edison Pho¬ nograph Company, and sold to it my patents relat¬ ing to the phonograph, and I also organized the Edison Phonograph Works, which was licensed un¬ der those patents to manufacture the apparatus. The American Gr/iphophone Company had also been organized, and owned or controlled the pat¬ ents of Bell and Tainter covering a modified form of the phonograph called the “graphophonc, ’’ and in March, I8SS, one .Tesse IT. Lippincott, made a contract with the American Grnphoplmne Com- pany by which lit* became the sole selling agent 01 that company. I.ippincott established an ofllce in New York City and began to make preparations to exploit the grnphophone. My company nlso Imd an ollice in New York and was making preparations to sell the phonograph, hippineott saw the pho¬ nograph and was impressed with its superiority over the grnphophone, and nlso had brought to his attention the patent, situation, which was that the grnphophone infringed my broad patents, while it was claimed that my phonograph infringed one or more of (he graphophone patents. Lippincolt (hereupon attempted to harmonize the two inter¬ ests nndihring them under one management, and by contracts made in .Tune, duly and August, 1SS8, an arrangement was consummated, whereby the Kdi- son Phonograph Works was to manufacture n cer¬ tain type of machine, the American Grnphophone Company was to manufacture another type of ma¬ chine, and the North American Phonograph Com¬ pany was to sell both machines on terms of equal¬ ity. Models of tin: two machines which were to he taken as standards were identified and formed part of the contracts; and it was agreed that neither of the manufacturers should depart from its own model in the direction of using improve¬ ments introduced by the other manufacturer, and that the improvements which T should make on tho phonograph should not he used on the grnphophone, nor should the improvements made upon the graph¬ ophone be used upon the phonograph. These con¬ tracts were procured by Lippincolt with the knowl¬ edge and approval of the American Graphophone Company and at its instigation, and were ratified by that company. The American Grnphophone Company and those interested in it profited largely by the arrangement. Lippineott paid ?200,000 for Company, and the North American Phonograph 387 Company subsequently paid the American Grapho- plione Company about ?250,000 for graphophoncs which proved to be worthless and had to be finally withdrawn from the market and turned into scrap. After the business of the North American Pho¬ nograph Company Imd been gotten under way, and both phonographs and graphophoncs had been sup¬ plied to that company, it soon became apparent that neither machine was satisfactory for commer¬ cial use. I experimented for upwards of a year upon tlic subject, and in the fall of 1SS0 produced the phonograph which lias since gone into commer¬ cial use. When the North American Phonograph 368 Company began to put this machine upon the mar¬ ket, its superiority over the graphophone was so ap¬ parent that the grnphophone machines at once be¬ gan to be returned (the business lieing done on a rental basis), and it was not long before the North American Phonograph Company stopped ordering graphophoncs and the manufacture of those ma¬ chines by the American Graphophone Company ceased. The North American Phonograph Com¬ pany was a company with a large capital, and it had organized upwards of thirty local companies, each with a large capital, the basis of the business being the supposed great utility of phonographs 339 and graphophoncs for dictation purposes to take the place of stenographers. The amusement field which these machines have since occupied, was not then exploited, and, indeed, if it. had boon, would have been too trivial in importance to support any such capitalization. The business scheme was not my own, but was that of Mr. hippineott and his as¬ sociates, the gentlemen connected with the Ameri¬ can Graphophone Company, and T had nothing to do with it except to cany on experimental work in my laboratory, and through the TCdison Phono- graph Works to manufacture the phonograph. Even with the improved phonograph, the business of the North American Phonograph Company was not a success, because Users could not be convinced of tile utility of a talking machine as a substitute for a stenographer. In .May, 18111, Jlr. Uppincott made an assignment for the bcnelit of his creditors and retired from the business of the North Ameri¬ can Phonograph Company, the management of winch company was continued by |H;rsons who had been associated witli .Mr. I.ippincott. Prior to this time the North American Phonograph Company had been paving tlm American Oraphophone Com¬ pany §1 1) on every phonograph which was put out, but after Jlr. Eippincott’s assignment, the North American Phonograph Company wns found to be in an exceedingly embarrassed condition, and it discontinued making these payments to the Ameri¬ can Oraphophone Company. The North Amcricnn Phonograph Company continued to do business, however, with (lie phonograph, while the American firaphophone Company did no business whatever and did not. at once resume the manufacture of the grnphophones. This condition of nfTnirs continued until early in 1803, when the. Oraphophone Company resumed its manufacture, hut instead of making the graplio- phono of its patents and such as it obligated itself by the contracts of 1888 to make, it made a grnpho- phonc embodying the principal features which T had put into (lie improved phonograph after the contracts of 1888, and which had been patented to me. Tiie Oraphophone Company begnn to sell these machines in competition with the phonograph and ignoring the contract obligations to the'North American Phonograph Company, to the defendant. wmitu ami esiaulisliing an imlc- 378 pendent status, suit was brought against defend¬ ant, Edison Phonograph Works, on the grupho- phone patents in this district, and another suit was brought on such patents in the District of Colum¬ bia against the Col . Ida Phonograph Company. I he North American Phonograph Company under¬ took the defence of these suits under its contracts, but subsequently withdrew its counsel from the suit, against the Columbia Phonograph Company on the ground, as I am infiirmed and believe, that the interests of the complaiiianpand defendant in (hat suit were identical, and (hat. its own interests might be injured by collusive actions of the parties which it would he unable to prevent. Tn .Tune, 18113. suits on a number of patents covering the fea¬ tures of the improved phonograph were brought against, the graphophone, the prosecution of these suits lining conducted by the counsel of the North American Phonograph Company. On August 21st, 1801, the Chancery Court of New Jersey appointed a receiver to wind up the af¬ fairs of the North American Phonograph Com¬ pany. After some consideration, the receiver con¬ cluded not to prosecute tin- suits on my patents nor defend the suits on the graphophone patents. There was no suit directly against the North American Phonograph Company on the graphophone patents, 7 and the suits on my patents were, brought in the name of the Edison Phonograph Company, which held the legal title, and the capital stock of which company wns at. the time the suits were brought owned by the North American Phonograph Com¬ pany. At the time the receiver reached the con¬ clusion not to prosecute or defend the patent suits, I he title to all the phonograph patents wns either in the Edison Phonograph Company, or in .North American 1 'h< >m pn (ompnnv. The Ed son Phonograph Works was nlso largely indebte !o me. Under llii-sc rirrnmstunees, I fell, it necci snrv to assume personally the expense of the litigi (ion which had been formerly curried on by til North Aniericnn Phonograph f.'oni]mny. In Xi remher, 1S!M, the Aniericnn Ornphophnne Con puny brought n suit against the United States Pin nograph Company in this district on its patents, similar suit against, Wnlcutf n «/., in New Yori ind other suits against local companies in Mass; ■luisetts, Ohio, and Kansas, besides suits nonius individuals in Chicago. In the first two suits men sets, and I he property was sold to me by th reiver, subject to the continual ion of (he C (see notice "Exhibit It”). At. the several hcai which were had on this subject before the C cel lor, creditors and stockholders came fori and objected to the confirmation of (he sale, atl in" the legality of the “Court: Mouse Sale,” u which r held the stock of (lie Edison Piloting: Company, and also insisting that my title to phonograph patents was not: a good one, hut such patents should be assigned to the N Aniericnn Phonograph Company. On advic counsel I waived my rights under the “Court H Sale,” and obtained permission from the Chili lor to sue the receiver to foreclose my pledge sell such stock, and after (lie exchange of for notices, the receiver brought, suit against mi innipel me to assign the patents. A copy of irder of the Court refusing to confirm the sal it tnched (“Exhibit C”). As the result of 11 iroeeedings, which extended into .Tilly, 1805 lecnme apparent to me, and T was also advised 'oiinsel, that the litigation with the receiver mi ’••suit in my losing the title to the phonograph ; “iits, and T saw at once that. T was not warran n making the outlay necessary to carry on the ] nt litigation which I had undertaken in the be hat. T owned the. phonograph patents. Til or o determine this matter ns soon ns possible, T trusted my counsel to settle the receivership 1 a (ion by cninprninise if possible, and Tily, 1S95, I made an offer of compromise to eceiver on substantially the same terms as ompromise which has recently received the nival of the Court and to which T will presen [‘for. The receiver reported the compromise principal suits to t riii! Iicrorcr Vicr-CImneelh 1'""‘0 i" Xi'M.ii l>. .md ii (riii I which lusted foil 'hi.vs was Imil in November, ISiCi, the hearing o tlie proofs then liihcu being f,„. ] <_y 1805. As this trial was considered by mv com sc! as exceed Stiffly favor, aide to me mid as clini natiiiff many matters which had licforc been nrifc igainst me by nflidnvil, I concluded to nondents with detailed dements of patents, hook accounts, &e. Personal tcntlon will lie given to all reasonable requests ide by inquirers at his ofilcc. Bids arc solicited for all or any part of the prop- ly, the. receiver reserving the right to~rejceFanv Twenty per cent, of the purchase money must lie :!fl7 paid on the acceptance of the bill, and the balance on confirmation of (lie same and delivery of proper written conveyance. The properly, if sold, will Ik; delivered at the Edison Phonograph Works, Orange, New Jersey. John It. Hardin, Beceiver,” North American Phonograph Company, Prudential Building, Newark, N. ,T. Exhibit B. Newark, N. J„ March 28, 1805. To the Creditors and Stockholders of the North American Phonograph Company: 398 Von are hereby notified (hat Mr. Thomas A. Edi¬ son. of Orange, N. J., has offered the sum of §125,: 100 for the nut in* assets of the North American Phonograph Company not hemtofnre disposed of or realized on by the receiver of said company, wheresoever situated, and of whatsoever nature, and that the suhscrilior, receiver of said North American Phonograph Company, will, on Monday, the eighth day of April, eighteen hundred and nine¬ ty-five. at the Chancery 0113111110111, Jersey City, New Jersey, ro|mrt said offer to the Chancellor of the State of New Jersey, and recommend its acceptance and request direction from the Court to convey said 399 property to said Edison under such conditions as the Court may fix. And you am hereby further notified to attend 'it said time and place and he heard, if you desire, on the matter so to be reported to said Court. Very respectfully, John B. Hardin, American Phonograph Co. Beceiver North A Exhibit C. IN CHANCERY OF NEW JERSEY. Between ) Wai.tkr W. Cijttixcs, Ex'r., cl ill.. Complainants, i mid l On Mill, Sr. North Amiumcax Piiomikraihi ' Co.. Defendants. The receiver heretofore appointed in tlie above entitled cause havin'; after notice to the creditors and stockholders of the defendant company, pre¬ sented to the Clmncelior ids petition on the eighth da.v of April, eighteen hundred and ninety-five, re¬ porting that he. laid received an offer of one hun¬ dred and twenty-five thousand, one hundred dol- l.'irs for the balance of the assets of said defendant corporation, remaining in his hands, from Thomas A. Edison, and that, said bid had been made sub¬ ject to confirmation by the Court of Chancery and asking the advice of the Court, thereon, nnd on said eighth day of April, objection having I teen made to tlie acceptance of said bid before the Chancellor and the matter having been regularly continued untd the fifteenth day of April then next, and on (hat day Michael W. Nolan and Charles A. Boston haying filed petitions herein in opposition to the iiLcepranee of said hid, i then further continued of April then next, at wh., tinned until the twenty- next, the Chancellor in hi e matter having been the seventeenth day ne it was further con- i day of April then imbers in the City of Nolan and Charles A. Boston having filed supple- ‘103 mental petitions herein, and petitions having also been filed in liehnlf of Henry Stern nnd others in further opposition to the acceptance of said hid, and on tlie same day a petition of Thomas A. Elli¬ son having been filed herein, and the Court having lieen informed by said petition of Thomas A. Edi¬ son that said Edison is willing to waive any rights which he might have acquired by the sale of cer¬ tain stock of the Edison Phonograph Company in the month of July prior to the appointment of the receiver, pursuant to the terms of a pledge of said stock made by the said North American Phono¬ graph Company to the said Thomas A. Edison, to secure a note of said company to said Edison in ‘1,)4 the sum of seventy-eight thousand five hundred eighteen 37-100 dollars, which sale under said pledge has liecti objected to by the petitioners here- inlieforc mentioned, and said Edison having further expressed his willingness by said petition that the receiver herein might, sell said stock ns an asset of said company subject to said Edison’s pledge, and the receiver having on said last mentioned day filed a. supplemental petition herein, and the Court having heard Mr. R. Wa.vae Parker, of counsel for said Michael W. Nolan, Mr. E. Q. Keasbey, of coun¬ sel for said Henry Stern, Mr. Charles A. Boston, in his own behalf, Mr. Frederick H. Lum and Mr. 40fi Richard N. Dyer, of New York, of counsel with said Thomas A. Ellison, and the said receiver, and the Conrt I icing of opinion that at. this time said hid of Thomas A. Edison should not. be accepted, and that, the said receiver should sell said property of the North American Phonograph Company at pub¬ lic sale after compliance on his part with tlie direc¬ tions of this order. It is thereupon, on this sixth day of May, instant, on motion of John It. Hardin, receiver of the said defendant corporation, ordered that, the said re- live hundred dollars paid by linn In til if (Slid roee ns n deposit on said liid In hind (lie bm’giiin. And it is fnrllier ordered Hint llie sitid l'eoe do with nil ronvenient speed, proem! to proi from AT r. Thom, ns A. Kdison mi, assignment of of the patents for phonographs mid improveim thereon mid iipplinnees therefor, whieli under eon l.rnels between the said Kdison mid the I North Anieriemi IMinnogrtiph Company the i Kdison Inis agreed lo nssif.01 to the snid Ni Anieriemi 1’lionofrrnph Company, ,nnd if the .» Kdison slinll decline on reipiesl lo ninhe snid nss ment to snid receiver ns directed, lo undertake s proceedings in this Court, or elsewhere ns lie i ho advised and satisfied nin.v he necessary to | teet the rights of his trust; mid also thill iie old from said Kdison a formal waiver in writing of interest derived in virtue of the side aforiwnid the aforementioned pled tied slock. And tlie said receiver is fnrllier directed when slinll have obtained an assignment of said pate and said waiver, to advertise nil of the assets Mie snid corporation not theretofore disposed of him for sale, at public auction to dm highest Iddi subject, however, to eonlirmtition by this Cm and in die meantime the snid receiver shall r dune In realize on die assets of snid corpornt in the manner heretofore pursued liv him mid porlcd to this Court by the receiver's petitions fi herein. Endorsed — Tn Ohancerv Hill, ike. — Order reaming hid and for further di- 409 reetious to deceiver.— John It. Hardin, l’ro sc.— Service admitted May 10/95. IN C II AN OKI tV OK NEW JEltSEY. WAiamt Cuttimi, Ex’r., cl al., Complainants, Tun Noutii American Piio.no- oilapu Co., Defendants. On reading and filing the petition of John B. Hardin, receiver of die Nortli American Phono¬ graph Company, by whieli it appears that Thomas A Edison 1ms made to the receiver of the defendant corporation appointed in the above cause an oiler to compromise the pending litigation between him¬ self, die Edison Phonograph Works .and die said receiver, and that the said receiver is of opinion Hint it will be for the benefit of the estate in his bands to accept said compromise and carry out its provisions on his part. It is on this twenty-sixth day of December, eighteen hundred and ninety-live, on motion of John B. Hardin, counsel pro sc., or¬ dered that die creditors and stockholders of the North American Phonograph Company, show cause before the Chancellor at die Chancery Chambers at Newark, on Tuesday, the seventh day of January next, at two o’clock in the afternoon, why die said jffer of compromise should not he accepted by the And it is further ordered Hint witlun two dayi from tlie dnte hereof the said receiver serve u copy of this order mid of said offer of compromise on the respective solicitors of each of the stockholders and creditors of The North American Phonograph Company, who appeared before this Court in rela¬ tion to the hid of Thomas A. Edison reported to this Court by the receiver in the month of April last, on notice of such report to all the stockholders and creditors of the said corporation, and that within five days the receiver mail like copies to each of the stockholders of said company, and to each of the creditors who have proved their debts, at their respective post, office addresses, if the same can he ascertained. The. copies may he uncertified, and the said petition or a copy thereof shall he left in the custody of the sergeant, -nt-nmis, in the Chan¬ cery Chambers, at Newark, for the inspection of persons interested. Ales. T. McGill, C. Respectfully advised, John R. Emery, ■Vice-Chancellor. Copy of offer of compromise referred to in the foregoing order: Newark, N. ,T., December 21, 1805. To John R. Hardin, Esq., Receiver of the North American Phonograph Company. Dear Sir: — As a compromise of the pending litigation be¬ tween you, t;ho Edison Phonograph Works, and my¬ self, T make to you the following proposition with¬ out prejudice: Thomas A. Edison to 1. Assign to the. North American Phonograph Company all phonograph patents applied for .sub¬ phonograph patents applied for on or before Au¬ gust 1, 1S88. 8. Abandon claim for-royalties. •1 .'Xbiuidonel ai infor damages for breach of con- Thu Edison Phonograph Works to 1. Consent to Until decree for injunction as prayed for. 2. Abandon claim for damages for breach of con¬ tract. The Edison Phonograph Company to assign to North American Company all patents applied for subsequent to Aug. J, 1S88, and heretofore as¬ signed to it by Mr. Edison. The receiver to 1. 'Admit the validity of note and pledge of Edi¬ son Phonograph Company stock. 2. Admit the validity of Edison’s claim as first proved, adding the $10,000, deducted on account of the Court House sale, subject to deduction of amount to be realized by sale of pledged stock. The entire nssets of the North American Phono¬ graph Company except claims against directors for declaring unearned dividends to be sold with¬ in thirty days nfter this compromise is accepted under order of Court at public sale to the highest bidder in the following manner: First The stock of the Edison Phonograph Com¬ pany to be put up and sold separately^ Second. The remaining assets, except said claims ii gainst directors of the Company, to he sold obo whole together. ~Tf the aggregate of the highest, first and second bids is higher than the highest third bid they will lie accepted. Tf the highest third bid is higher than the aggregate of the other two it will he accepted. mourn, UI uio mst UKl is to be paid to .Mr. EdiSou P to Uio amount duo on the note and deducted •om it; if the aggregate 'bid is accepted, then such art of it shall bo paid and applied on the note as foresaid as will bo equivalent (o the proportion mt the highest first bid bears to the sum of the ijfhest hist and the highest second bids. The amount of the first bid (if accepted), of the nounL of the aggregate bid (if accepted), thnt is ‘ be applied on (he note must be paid in cash, lless JIr. Edison consents to the contrary. The cceiver shall determine how much of the bnlnnco i be secured in a manner satisfactory to the Court, id payable on or before (lie distribution of the wets of (lie Company. If (he successful bidder is creditor, his prospective share of the assets (con- tiering proved claims) may lie its full amount his option stand ns such security; in that case e title to (he properly sold shall’ remain in the sceiyer until (Inal distribution and the purchas- 's dividend on such distribution shall be credited the unpaid balance of the bid. Yours truly, Tlios. 7C. Edison. [Note. The foregoing copy of otter of com- omisn constitutes Complainant’s Exhibit 40 il). 27, 1003, J. A. S., Ex’r.l '^T ’ ii 1 Exhibit E. IN CHANCERY OF NEW JERSEY, between Walter Cutting, Executor, cl als., Complainant, and North American Phonograph Company, Defendant The petition of John It. Hardin, receiver of the North American Phonograph Company, the cor¬ poration defendant in the above entitled cause, having been tiled herein on the twenty-sixth day of December last, and an order to show cause having been made on the tiling of said petition, requiring tlie stockholders and creditors of tiie said North American Phonograph Company to show enusci before the Chancellor at the Chancery Chambers, at Newark, on Tuesday the seventh day of Janu¬ ary then next at two o’clock in the afternoon of that day why the offer of compromise presented 4 to said receiver by Thomas A. Edison, of certain litigations described in said petition and referred to in said offer of compromise, should not be ac¬ cepted by tbe receiver and its provisions carried nut. on iiis part, and proof having been made and filed herein of tbe service of said order to show cause on the creditors and stockholders of the said defendant corporation, in the manner and within the time rcniiircd by the said order to show cause; and the matter having been opened to the Court, at the time and place mentioned in said order to show •S2-1 cause, that is to sa.v, in the Chancery Chambers at the City of Newark, on Tuesday the seventh day of January, eighteen hundred and nine ty-six, at two o'clock in the afternoon hy the said receiver, and the Court having hoard slid petition read and having heard the receiver in his own lie- half and Howard \V. Hayes, Esquire (with whom was It i chard Dyer of New York), in behalf of Thomas A. Edison, the Edison Phonograph Works and John I<. Marlin, a creditor of said defendant corporation, and Charles A. Hoston, a stockholder of said defendant corporation, in his own behalf, Edward Q. Koasbev, in behalf or Henry Stern and 4213 other stockholders of said cornoration, and of the Edison United Phonograph Company, a creditor of said defendant corporation, and the said solicitor of the said Thomas A. Edison having consented that, the offer of compromise he so amended as to exclude from the proposed sale or the assets of the North American Phonograph Company all claims against, directors of said defendant corporation for any breach of trust or duty; and the said Edward Q. Keasbey having made application for an ad¬ journment. to enable him to examine the testimony) taken on the trial of the litigations referred to in said compromise, and Tor further consultation with 420 his clients, and the Court, having granted said re¬ plies). for adjournment, and an order having there¬ upon been made on the seventh day of January, eighteen hundred and ninety-six, in the above staled cause, ordering that the said matter stand over until the eleventh day of January, eighteen hundred and ninety-six, at. the Chancery Chambers, In (lie City of Newark, at. ten o’clock in the morn¬ ing of that day; and at such adjourned time and place the said Edward Q. TCeashey having stated to the Court, that, he withdrew further opposition to the said compromise, and all other parties who had appeared in response to said order to show cause having favored said compromise, and the said receiver recommending the acceptance of the same to the Court, and the Court being of opinion that said compromise is for the licncflt of the creditors and stockholders of the defendant corporation, and no person objecting thereto and no reason appear¬ ing to tile contrary. It is thereupon, on this fifteenth day of Janu¬ ary, eighteen hundred and ninety-six, by his Honor Alexander T. Mcflill, Chancellor of the State of New Jersey, on motion of John T5. ITnrdin, receiver pro sc, ordered that the said receiver lie and he is hereby authorized and directed to accept the said otTer of compromise made hy the said Thomas A. Edison set forth in said petition, modi fled ns afore¬ said by the exception from the assets proposed to be sold. of all claims against directors of the North American Phonograph Company, arising out of any breach of trust or duty, and the said receiver is hereby directed to carry out. the said compromise on his part, and to secure the assignment to himself, ns receiver of the North American Phonograph Com¬ pany, of the phonograph patents applied for subse¬ quent to August first, eighteen hundred and eighty- eight, referred to in the bill filed by the said re¬ ceiver neninst. the said Thomas A. Edison in the suit known ns “The. Specific Performance suit”; to secure the assignment to the Edison Phonograph Companv of all phonograph patents applied for on nr before August. 1st, eighteen hundred and eighty- eight, to secure the assignment by the said Edison Phonograph Company to himself, as receiver of the North American Phonograph Company, of all such patents applied for, subsequent to August first, eighteen hundred and eighty-eight, and heretofore! assigned to it l.y either Mr. Thomas A. Ed.son or the said North American Phonograph Company , 430 tn cuter orders dismissing Inc appeals of the said Thomas A. Edison from the decision of the said re¬ ceiver, overruling I lie claims of (lie said Thomas A. Edison against, the said North American Phono¬ graph Company for royalties under the contracts between said Edison and the said Nort.li American Phonograph Company, and to secure from Thoma1- A. Edison a release of his claim for damages for breach of contract between the said North Ameri¬ can Phonograph Company and (lie said Edison Phonograph Works, on which a jury trial was de¬ manded ; to enter (inn! decree for injunction as prayed for in the cause in (ids Court, instituted by 431 the said receiver against the said Edison Phono¬ graph Works, known ns the “Injunetion Suit”; to secure from tiio said Edison Phonograph Works a release of the claim of Hie said Edison Phonograph Works ngninst. the said North American Phono¬ graph Company for damages for breach of contract, between the said Edison Phonograph Works and the said North American Phonograph Company filed with said receiver, on which n jury trial wns demnnded; to discontinue, after procuring the as¬ signments or patents nhovo referred to, the snid suit known ns the “Sait for Specific Performance” ; tn recognize (lie validity of the note dated Now 132 April first, eighteen hundred and ninety-two and secured by the pledge of the stock of the Edi¬ son Phonograph Company, referred to in the hill filed with the permission of this Court, by the said Thomas A. Edison against the said North Ameri- ( Endorsed.) -Secured by deposit with T. A. Edi son of twelve thousand shares of slock of Kdisoi Phonograph Co. ns per ngreement of .Tune 1, ISfi” between him and the maker of this note. The North American Phonograph Co., SmnucI Tnsull, President TIiohuim Eu tier, Trans. And of tile pledge of stock of the Edison Plinnn graph Company tn secure the same, mid to admit the said Thomas A. Edison’s claim against tho.snid North American Phonograph Company as first proved before said receiver (and overruled by him) hiding the Ten thousand dollars deducted on snid proof by reason of the amount, realized at the so called “Court house Sale” of the Edison Phono graph Company stock under the pledge, aforesaid, made by the said Edison prior to the appointment if the receiver herein, said sale having been waived by the snid Edison by formal waiver in writing pro- mated to (tie said receiver, and after such allow- lncc to enter a nroner order dismissing the appeal And it is further ordered Hint the s;iid receiver do on (lie execution, delivery mid entry of the nliove releases, assignments and orders forthwith adver¬ tise the sale of (lie entire assets of the North Ameri¬ can Phonograph Company (except the claims against tin- directors of said corporation for any breach of trust or duly) such sale to lie at. public auction at a convenient place within this Stale to he designated by said receiver, and to be advertised by circular addressed to the creditors and stock- ji7, holders of the said North American Phonograph Company and to such oilier corporations mid per¬ sons as in the judgment of the said receiver may best secure bidders at said sale and in such other way as the said receiver may deem necessary, said sale to take place at a time not later than thirty days from the date of this order. And it is further ordered that the assets of the said North American Phonograph Company shall be sold by (lie said receiver in the following man- First. The stock of the Edison Phonograph Com¬ pany shall be put up separately and the sale stayed at the highest bid without knocking down. Second. The remaining assets to be sold shall be put up together and the whole sold as a going concern, the sale to be stayed at the highest, bid without knocking down. Third. The entire assets, inclusive of the Edison Phonograph Company stock, shall lie put up ns the whole together and (lie sale stayed nt the highest bid without knocking down. If the aggregate of the hiirhest first .nwl seenml 1 17 of, the Edison Phonograph Company first offered 439 shnirTm solirto tllb highest blddCr'fbci'cfor, and tli'u "" . remaining assets secondly offered shall be sold to the highest bidder therefor. If the highest bid for the entire assets inclusive of the Edison Phonograph Company stock shall lie higher than the aggregate of the other two, the en¬ tire assets, inclusive of the Edison Phonograph Com|inny stoek, shall be. sold to the highest bidder therefor. 1 If the first and second bids are accepted, the amount of the first bid is to be paid to the said Thomas A. Edison up to the amount due on the said note and deducted from it; if the bid for the 440 entire assets, inclusive of the Edison Phonograph Company stoek, shall be accepted, then such part of it shall be paid mid applied on the note ns afore¬ said, as will lie equivalent to the proportion that the highest first bid bears to the sum of the highest first and second bids. It, is further ordered that the foregoing direc¬ tions ns to the manner of offering the property filial I be included in (lie conditions of sale and that the conditions of sale shall provide for the payment of such proportion of tile accepted bid in cash nt the time of the sale as the said receiver may determine, the balance to be paid on delivery of the property, 441 unless the successful bidder shall be a creditor, in which case his prospective share of the assets on distribution, considering proved claims, may to its full amount as estimated by the receiver at the op¬ tion or the said purchaser, stand ns security for such balance and in that case the title to the prop¬ erty sold shall remain in the receiver until final distribution shall lie asked Tor, and the purchasers dividend on such distribution shall then be creditei on the unpaid balance of the bid, any balance tliert remaining to be paid in casli. wiry. lis judgment may lie nures ler of sale as in h Respectfully advised, John II. Emery. Vice-Chancellor Endorsed: In fliaiieery of New Jersey: He Iweon Waller Cal line, Exit., rl ah., Complts. ami Norlli American Phonograph Company, Defl. Or dor directing receiver lo earry oat compromise ol litigation with Thomas A. Edison and the Edison Phonograph Works. John II. Hardin, /Vo sc. Exhibit F. John R. Tlardin, Counsellor at hnv, 7(11 Rroad Street, Newark, N. J. Newark, N. J., January 20, 1890. By an order of (lie Court of Chancery, made on the fifteenth day of January, 3890, iii a cause wherein Walter Cutting, Executor, &c., cl a!., arc; complainants, and the North American Phono¬ graph Company is defendant, it was among other things ordered that John R. Hardin, receiver of the North American Phonograph Company, adver¬ tise the sale of the entire assets of the North Amer¬ ican Phonograph Company (except the claims against the directors of said corporation for any h reach of trust or duty!. said sale to he at. public auction at a convenient place within this State, to he designated by said receiver and to be advertised by circulars addressed to the various creditors and stockholders of the North American Phonograph Company and to such other person or persons ns in the judgment of said receiver might best secure bid¬ ders at such sale, and in such other way as said receiver might deem necessary, said sale to take 149 date of said order. And it was by said order fur- 4-15 ilior provided, that the assets of the said North American Phonograph Company should be sold by the said receiver in the following munner: 1st. That the stock of the Edison Phonograph Company should lie put up separately and the sale stayed at the highest bid without knocking down. 2nd. That the reaiaiuing assets to be sold should be put up together and the whole sold at once as a going concern, the sale to he stayed at the highest bid without knocking down. 3rd. That the entire assets, inclusive of the Edi¬ son Phonograph Company’s stock, should be put up ns a whole together, and the sale stayed at the 440 highest bid without knocking down. Tf tiie aggregate of the highest first and second bids should be higher than the highest third bid, the stock of the Edison Phonograph Company first offered should be sold to the highest bidder there¬ for, and tlu* remaining assets secondly offered should be sold to the highest bidder therefor. Tf the highest bid for the entire assets, inclusive of the Edison Phonograph Company’s stock, should he higher than the aggregate of the other two, the en¬ tire assets, including all the Edison Phonograph Company’s stock, should he sold to the highest bid¬ der therefor. 447 And it. was further hv said order provided, that the foregoing directions ns to the manner of offer¬ ing the said property for sale should be included in the conditions of sale, and that the conditions of sale should provide, for the payment of such pro¬ portion of the accepted bid in cash at the time of the sale ns the said receiver mielit determine; the balance to be paid on the delivery of the property unless the successful bidder should be a credi¬ tor. in which case ids respcctire share of I lie assets on the distribution thereof, ron- ■148 siilcring proved claims should, to its full amount, us ostiniiited by the receiver, ut the option of said purchaser, stand as security for such balance, and in that case the title to the prop¬ erty sold should remain in the receiver until final distribution should be asked for, and the purcbas- \ J er’s dividend on such distribution, proper compen¬ sation by way of interest being made to creditors other than said purchaser, should then he credited on the unpaid balance of the bid, any balance then remaining to he paid in cash. Pursuant to the directions of the said order, the subscriber, ns receiver of the North American Pirn- 440 nogrnph Company, will expose for sail! at public iiuelion at tlie Edison Phonograph Works, Orange, Essex County, New Jersey, on Saturday, the 8th day of February, 180(5, at two o’clock in the nfter- noon of that day, the assets of the said North Amer¬ ican Phonograph Company and theretofore con¬ verted into cash by the said receiver in the manner directed by said order, that is to say: I. The stock of the Edison Phonograph Company ■ ^ will he put. up separately and the sale staved at the highest bid without knocking down. , \ 1 ' 4G0 rr*’e St0c'c t'ly tb<* snul Amonoa » * P phono Company to Jesse TL Upplncott .and hy him transferred or attempted to he transferred, to the -id North American nono^moo- e Ml the right, title and mteiest or rue - American Phonograph Comnanv in jj various local companies whether now on « will, the Central Tru'd Company of New 4fi.i still returned by tuc local companies or acid in trust for the said North American Phonograph Company. Said local companies are companies or¬ ganized under agreements with the North Amer¬ ican Phonograph Company and are thirty-two in number. Stock in all of them was held by the North American Phonograph Company. (/. All (lie accounts, notes and bills receivable of the North American Phonograph Company, in¬ cluding all claims against local companies, all in¬ stallment contracts and mortgages belonging to the said North American Phonograph Company, c. All the right, title and interest of the North 45(5 American Phonograph Company, of, in and to any phonographs or grnphophoncs situated anywhere within the United Stales and Canada out on trial, lease or conditional sale, or in any way belonging to or controlled by said company. f. All the good will of the business of the North American Phonograph Company. //. All other property of tin* North American Phonograph Company of whatsoever character and wheresoever situated, excepting only cash in hnnds of said receiver or accounts due him and claims against the directors of said North American Phonograph Company for any breach of trust or 450 duty. TTT. 1 The entire assets of the North American Phonograph Companv to be sold inclusive of the Ellison Phonograph Company’s stock, will he put up ns a whole together and offered ns a going con¬ cern. and the sale stayed at the highest bid without knocking down. Tf the aggregate of the highest hid for the prop¬ erty first offered and the highest bid for the prop- ertv secondly offered shall he higher Ilian the highest bid for the entire property thirdly olVeml, the stock of the Edison Phonograph Company first ottered will lie sold to the highest bidder therefor, and the remaining assets secondly ottered will bt sold to the highest bidder therefor. If tile highest hid for tile entire assets thirdly ottered (shall he higher than the aggregate of tin other two, the entire assets thirdly ottered will in sold to the highest bidder therefor. The above property of the North Americai Phonograph Company is to 1h; sold by the receive subject to all claims and litigations nllccting tin property to lie conveyed, and the receiver will no guarantee the properly so sold against patent o other litigation. The rigid, title and interest o the North Ai n II ,-i 1 1 M its receiver is all that the receiver undertakes t soil and all (hat he will expect to convey, and tli purclmser buys til Ills own risk. The property described under paragraph “a" i (lie foregoing statement of (lie property second!; to be ottered for sale is located at the Edison Plioi ograph Works, Essex County, New Jersey, nil may lie inspected there h.v bidders on npplicntio (o Mr. W. E. C.ilmore, Superintendent, during fai tore hours, nt any time previous to the time r said sale. Information about the matters referred to in tli remaining paragraphs may be had nt the office f the receiver, Prudential building. Tfi1 Brna street. Newark. New Jersey, during nlfiee hours. The list, of letters patent, book neromits. efo.. too long to he annexed to Ibis advertisement, an while (lie rereiver will do all in liis power to ai bidders to an examination of the property olfierc for sale, he cannot be expected to furnish eorrei nondents witli detailed statements of the letter patent, book accounts, ele. Personal attention v .i;u 1>« Riven to nil reasonable requests made by in¬ quirers nt his office during office hours. JOHN HARDIN, Receiver North American Phonograph Company. United States of America, ) District of New Jersey, ! ss> ' I, S. D. Oliphnnt, Clerk of the Circuit Court or the United States of America, for the District of New Jersey, in the Third Circuit, do hereby certify the foregoing to be a true copy of Hie original no¬ tice, affidavit of Thomas A. Edison and Exhibits A, B, C, D, E and F on lile. and now remaining among the records of the said Court, in my office. In testimony whereof, J have hereunto subscribed my name and affixed the seal of the said Court, nt Trenton, in said district, this seventh day of Jan¬ uary, nineteen hundred and three. S. D. Oliphnnt, [Seal.] Clerk Circuit Court, U. S. Complainant’s Exhibit 37, February 19, 1003, J. A. S„ Ex’r. This exhibit is identical with Exhibit D, annexed to tlie affidavit of Thomas A. Edison, verified Jan¬ uary 23, 1S90, and forming part of Complainant’s Exhibit 30, February HI, 1903, J. A. S., Ex’r. Complainant.’s Exhibit 38, Feb. 19, 483 1903, J, A. S., Ex’r. IN CHANCERY OF NEW JERSEY. Between John R. Hardin, Receiver, . . Complainant, Tub Edison Phonookapii Workh & al., Defendants. The matters involved in this case and other mat¬ ters in difference between the complainant and the defendants having been settled and compromised, and it lieing agreed as part of the said compromise and settlement that the complainant should be ac¬ corded against the defendant, The Edison Phono¬ graph Works, the relief prayed for in the bill of complaint; it is on this twenty-first day of Jan- u.nrv. eighteen hundred and ninety-six, on motion of Charles T. Roe, of counsel with the complainant, and with the consent of Howard W. Hayes, of coun¬ sel with the defendant, ordered that a writ of in- • • junction do issue against the said defendant, the Edison Phonograph Works, pursuant to the prayer of said bill, enjoining and restraining it, the said the Edison Phonograph Works, its officers, agents and employees from manufacturing phonograph ap- • plinnres and supplies therefor for use within the United States and Canada for parties other than the. North American Phonograph Company or its receiver, and from selling phonograph appliances and supplies therefor to any other person or per¬ sons or corporations for use or sale within the United States and Canada, other tlinn to the said . .. . . . • "''""SO'I'" i.ompnny JUK] the Sil!< ,c,,t‘,ver "'itlx'Ht the written consent of the Hespeetfuliy advised, .Toll n B, Emery, Vice-Chancellor. I consent to the foregoing order. lie wiml W. II lives, Of Counsel wilh Thomas A. Edison, “f Endorsed.) In Chnnci'rv of New Jersey ]{,, 407 r T' J°':n B> rra,‘,,iN- Noreiver, Con, pi L, and The 7 ^!,mon Phonograph Works, Deft*. On Bill nn'vl D/TW', °,,ar,W J- T{01>> *>"* T.aw Omcos.' TTnyes & Lambert, Newark, N. ,T.” Complainant’s Exhibit 39, Feb. 19 1903, John A. Shields, Ex’r.' JeS.') °f tl10 Cm’rt °f °,mnc(!,-v- B‘»‘e ->f New New Jersey to wit: The Stole of New Jersey to Hie Edison Phonograph Works, if* offleera nsei.tfc and employees, Greeting: 108 Court of Chancery of I he Sint oof' New 'jeLey,' on ■ie wenty-first day of .Tnnnnrv, A. D IS'Hi in n . h ordered and deereeil that ployees, and each and every of yon under the pern ally that may hill thereon, that, you and every of you do from henceforth ami forever, absolutely de¬ sist and refrain from manufacturin': phonographs, appliances and supplies therefor for use within the United States and Cn.nnda. for parties other than the North American Phonograph Company or for John It. Hardin, the. complainant, as receiver of the said North American Phonograph Company, and from selling phonographs, appliances and sup¬ plies therefor to any person or persons or corpora¬ tions for use or sale, within the United States and Canada other than to the said North American Phonograph Company, or to (lie said complainant as receiver of the said North American Phonograph Company, without tin1 written consent, of the com¬ plainant. Witness his Honor, Alexander T. McGill, our Chancellor, at Trenton, the third day of Feb¬ ruary, in the year of our Lord one thousand eight hundred anil ninety-six. Allan McDermott, Clerk. (’buries T. Hoe, (Endorsed :) Filed Fell. 10, ISO!!. Allan Mr Dermott. Clk. Due and legal service of within injunction admitted this fifth day of February, eighteen hundred and ninety-six. Guild & Lum. Snirs, for deffs. Complainant’s Exhibit 40, February 27, 1903, J. A. S., Ex’r. This exhibit is the copy of offer of compromise forming part of Exhibit. D of Complainant’s Ex- Complainant’s Exhibit 41. Feb. 27 1002, J. A. S„ Ex’r. IN CHANCERY OF NEW JERSEY. Retween John R. Uauiiin, Receiver of the North American Phonograph Company, Complaiimnt, 0ll„- and Thomas A. Edison, Defendant, The matters in dilTmnice lietween the complain- ant and the defendant in the nlmve entitled cause bavin^ been compromised, and such compromise approved by an order entered in this Court, in a cause wherein Waller Cat t ins, executor, and others are complainants, and tin- North American Phono- praplt Company is d-rendnnt, made on the fifteenth day of .Tnnunry, eighteen hundred and ninety-six, and said receiver having lieen directed by said or¬ der to procure the discontinuance of this suit, with¬ out. costs to either party as against the other: Tt is thereupon, on this twenty-first day of Janu¬ ary, eighteen hundred and ninety-six, on motion of Charles J. Roe, solicitor of the said complninnnt, .150 by discontinued without costs to either, party. as 457 against the other. Alex. T. McGill, C. Respectfully advised, John It. Emery, Vice-Chancellor. i consent to the following order, Howard W. Hayes, Of Counsel with Thomas A. Edison. A true copy, T,. A. Thompson, Clerk. Endorsed: In Chancery of New Jersey, between 458 John R. Hardin, Rec’r North American Phono- grapli Company, compl’l, and Thomas A. Edison, deft. On ltill, &r. Decree. Discontinuance. Charles .T. Roe. 8ol,r. Filed Jan. 22, ISOfi. Complainant’s Exhibit 42, February 27, 1903, J. A. S., Ex’r. This exhibit is set out in the record at Q. 131', testimony of Hardin. Complainant’s Exhibit 1903, J. A. “ T , Feb. 27, , S.. Ex’r The President of the United States of America. To Thomas A. Edison, Edison Phonograph Com¬ pany, . Edison Phonograph Works, and National PI. . graph Co-, John R. Hardin, J. Adr.a.icc Rush, John F. Randolph. Greeting: We command you that all and singular business and excuses being laid aside, you and end. i of .V"» he and appear in vour proper persons >e • A. Shields, Esip, a standing examiner of tin. - cuit Court of the United States for the Eon llm J >ist i-iel of .New York in tin* •Second Circuit, nt I olliee in the Post Cilice Building, in the Itorouj of .Munlmttuu und City or New York in said .Soul urn District of New York, on the Jlllli day of Ki ruury, 11HKI, at 11 o’clock in the forenoon of t sumo day to testify all and singular wlmt von m each of yon may know in a certain cause now pen ing undetermined in the Circuit Court of the Unit States for the Southern District of New Yo wherein New York Phonograph Company is roi plniunni. and National Phonograph Company at others are defendants on the part of the complai ant; and that you and each of yon bring with vi and produce at the lime and place aforesaid ! certain papers, contracts, documents and insli meiits in writing relating to the transfer or corn-, mice of any right of any kind arising under a patent, of the United Slates issued to Thomas Edison in relation to the phonograph or suppli therefor, or arising under any invention cnnfrt heretofore made bv Thomas A. Edison relating 101 omit under the penalty upon each and every of you <181 of Two hundred and fifty dollars (§200). Schedule of contracts to be produced. Contract dated Oct. 28, 18ST, between Edison monograph Co. and E. T. liilliliuid. Assignment dated July IT, ISSS, liillllund to Lippincott, of said contract ol Oct. 28, 1887. Contract dated July IT, 1888, between Lippi it- colt and North American Phonograph Co. Contract dated Aug. 1, 1888, between Edison, North American Phonograph Co. and Lippincott. Contract, dated Aug. 1, 1888, between North American Phonograph Co., Lippincott and Edison _ Phonograph Works. Contract dated Oct. 12, 1888, lietween Edison, Edison Phonograph Co., Edison Phonograph Works, North American Phonograph Co., and Lip- "contract dated Oct. 12, 1888, between North Ai 1 1 n „ 1 1 < ind .Metropolitan 11 ""cimtriiet'daled Jan. 10, 1SS9, between the North American Phonograph Co. and Metropolitan P m- nograph Co. ,l»t«l .Till, 30. TS». l»W«n "nS!” «... -inly .7, ,* . . . « Phonograph Co. and Edison. Contract dated July 17, 1SSS, between T.ippm- cott and North Ao.encnn PboiKTgraph 'o. Contract dated heb. 0, 18S9, bit American Phonograph Co. and T I n P Unn Contract dated June 28, 18S8, between Edison -sars- >, * “ American Plionogi-apli Co. and New Tor graph Co. Assignment of Oct. o, ISflfi, to National Phono- sets or said company to Thomas A. Kdison, Kdis. 11 h lie National Phonograph Co., icdis. Phonograph Works, Frederic J’. on, or in nnv p< son as a front or trustee for thorn or any one or mo »f them, included among sucti assets bring any i torcst of the North American Phonograph Co. 480 Letters Patent of the United States Tor plmn graphs, grnphophones nr appliances and any 1 censes thereunder, also any stock or local plion grnpli companies, also any good will of its lnisincs Notice dated Newark, N, .T., Fell. JR, 1805, rrni •John It. Hardin, receiver, relating to the sale of tli assets of North American Phonograph Co. Any check, receipt or voucher for the payment < any consideration to said John It. Hardin, receive; or tile North American Phonograph Co. Tor any m set or assets of said company sold b,v said receive at public sale. Preliminary injunction issued out or the Four 180 of Chancery of New Jersey against. H.lison Phone graph Works and Thomas A. Kdison in suit when in John TJ. Hardin, receiver, was complainant hem ing date Oct. 21, 18JIR. or thereabout. Injunction against Kdison Phonoirrnph Work! m (lie same said suit dated Fell. ,‘t. 180(1. and servo* on Kdison Phonograph Works or on its counsel Onild & Tiiini, Feb. 5, ISOfi. A copy of any one or more or the original paper: above mentioned where the original cannot lie pro flnced. Witness the Memorable Melville \>. roller, hief Justice of tlu; United Stales, at the Borough r Manhattan, in the City or New York, on the th day of February, 1003. Seal of f. S. Circuit Court, Southern Hist. New York.] 31ishn K. Camp, Solicitor tor Complainant. Lillis Hieks, Of Counsel for Complainant. Complainant’s Exhibit 44, Feb. 27, 1903. J. A. S., Ex’r. M'he President of the United Stales of America. To National Phonograph Company, John h. Ifnmiolph. Kdison Phonograph Com, .any, Kdi¬ son Phonograph Works nm} William h. <>>I* more, Greeting: . We comimind you that, all and singular busi¬ ness and excuses living laid aside, you and each of you he and appear in your proper persons be- fore John A. Shields, Ks„„ a stamUng examine of the Circuit Court of the United States for ti c Southern District of New York in the Second Oil- cnit at his ollice in the Post-mice building, in the nm-Sl, . . said Southern District of >e« _ I(U ‘100 Jiai..v s lit ii.nl \(| IM.ouog.-,,,, |, Company- and others are defendants 0« the part u the complainant; and that you and each of yOU Onng « ill. you and |, roduee at the time and place aforesaid all certain papers, coni, ets | , „ellts and instruments n. writing relating to the transfer o. conveyance of any right of any kind arising ‘ 'L «f ||,e United States issued to l homes A. Ed, son in relation to the phonograph or » i: r f * - 101 IlhonniK A. lid, son therefor, and the original copies of each and every one of the tnicLs liem'nafter , . Oont.-i.cts to he Produced, " now in your emstodv under your control and all other deeds, contracts c\ .donees and writings, which you have in vour .■scsoS;,am,U-°' “•>'»'« p'rein. • - nee. ning ... an.v way the aci|uisilion hv the • oi'lli A.ncncan phonograph Co., of rights of any ' "Inh"f ,0 Plo'ioigraph or relating to the Z,rinvKof a, ^ Amer,Van P""'« ^ -V R"Ch '•*'"* «> the New 492 i>ho„og,,p;,,,>f3;1.,^m|;;;;;f ^mp'^ Co,"P:'".v. and this y„„ or either and °™ ?n? "f0t IO n,llit "nI V °f ‘VO" °f T"‘" lnm,lm1 fifty dollars Schedule of Papers |„ |l(. Produced CoSt°ck certiflp»t« of National Phonograph Co. Stock transfer hook of National Phonograph Minute hook of meetings of stoekl.olde.-s and di¬ meters of National Phonograph Co. itir. All checks or other orders for money paid to or 403 drawn to the order of Thomas A. Edison by or for National Phonograph Co. A copy of any one or ...ore of the original papers above mentioned where the original cannot be pro¬ duced. All other contracts, documents and writings re¬ lating to the si.hjcct-matter of the contracts above enumerated. Witness (he llonoralip- .Melville W. l-’iiller, Chief Justice of the United States, at tile Borough of .Manhattan, in the City or New York, on the 17th day of February, 1003. John A. Shields, Clerk. 4U4 | Seal of IT. S. Circuit Court, Solid. era Disl., New York.] Elisha TC. Camp, Solicitor and of Counsel for Complainant. Louis Hicks, Of Counsel for Complainant. Complainant's Exhibit No. 45, Feb. 27, 1903, J. A. S., Ex’r. The President of the United States of America. To William E. Oil more, National Phonograph Company, John It. Hardin, .T. Adrinnce Basil, 495 John F. Itandolph, Edison Phonograph Com pnny, Edison riionograph Works. Creeting: We cnnunnnd von that all and singular business and excuses being laid aside, you and end. of you lie and appear in yon .- proper persons before John A. Shields, Esq., a standing examiner of the Circuit Court of the United States for the Southern Dis¬ trict of New York in the Second Circuit, at his of¬ fice in the Post Office Building, in the Borough of Manhattan and City of Now York in said Southern SSri!i «" Ul“ 17,11 *>«*.v ur February, 1003, at 11 o clock in the forenoon of the same day to testify all and singular what you ami each o*f you may know in a certain cause now pending un- determined in the Circuit Court of the railed States for the Southern District or New Vorl- wherein New York Phonograph Company is cone pin "Hint, and National Phonograph Company and others are defendants on the part of the complain- ant; and that you and each of you bring with von and produce at the time and place aforesaid all cer¬ tain papers,' contracts, documents and instruments writing relating lo the transfer or conveyance c ?! ' TTff ' ; °f im-V aWsi"f-r under anv patent of the United States issued to Thomas A.’ Edison Z V,.".1"'" l,l",I|ograph or supplies therefor. J anv lnvon,in" "i* «'on tract hereto- fore made by Thomas A. Edison relating to the pho- i'isu’J «« . "s'eh patents ZT P,,OMn" A- thei-efor. and the orig- ZlZZT 1 Par" nml the contracts hereinafter designated under “Schedule of Com tracts to be Produced,” now i„ your custody or un- eontrol. and all other deeds. conliu'els evi deuces and writings, which yon have in yonr'cus- ' ’ • ny and New York Phonograph Comnanv and this von or either of yon are not to omit under the ocnalty upon each and every of you of Two hum dud and fifty dollars f$2501. Schedule of papers to he produced. Contract dated Oct. 28. 1S87. between Edison Phonograph Co. and E. T. Oillfland. 107 Assignment dated July .17, 18S8, Uilliluud to 409 Lippincott, of said contract of Oct. 28, 18S7. Contract dated July 17, 18S8, between Lippincott and North American Phonograph Co. Contract dated Aug. I, 1888, between Edison, North American Phonograph Co. and Lippincott. Contract dated Aug. I, 1888, between North American Phonograph Co., Lippincott and Edison Phonograph Works. Contract dated Oct. 12, 188S, between Edison, Edison Phonograph Co., Edison Phonograph YVorks, North American Phonograph Co. and Lip¬ pincott. Contract dated Oct 12, 18SS, between North 500 American Phonograph Co. and Metropolitan Pho¬ nograph Co. Contract dated .Tan. 10, 18S0, between the North American Phonograph Co. and Metropolitan Pho¬ nograph Co. Contract dated July 30, 1880, between Edison and Lippincott. Contract, dated July 17, 1888, between Edison Phonograph Co. and Edison. Contract, dated July 17, 1S88, between Lippin- eott and North American Phonograph Co. Contract dated Feb. 0, 1880. between North American Phonograph Co. and John P. Haines. R01 Contract dated .Tune 28. 1888, between Edison and Lippincott. Contract, dated July 1, 1803. between North American Phonograph Co. and New Yrork Phono¬ graph Co. Assignment, of Oet. 5, ISOfi. to National Phono¬ graph Co. of TT. S., Letters Patent Nos. 382.41 S; 382,4(12; 400,048; 414.701: 430.274 and of Nos. 380.074: 430,278: 484.1583 ; 481.584; 100.870 is sued t.o Edison. Transfer or transfers h.v North American Pho- “ta °r •Sl,i<1 lo Thomiis A. Edison, lidison 1, '/“"W, Pl.ni.ogn.ph Co, Jidison J liiniugnijili \\ orks, Frederic j*. Ott, or to „„v son as agent or trustee for them or any one or more <>l tlieni, included ;iuioiid will „f j,* |,||sj Notice dated Newark, N. .|, |.’eh. in, 1895 from John It Hardin, receiver. reh.ting to thesnle’of the assets of North American Phonogri.pl. Co Any check, receipt or . . -her for the'pavn.en. of any consideration to said j„h„ it. Hardin re reiver, or the North American l-l.onngn.pl, r,/ ^ «ny asset or assets of said company sold hr slid receiver at public sale " '"g date Oct. 21,1805, or therealmuts. j^ssrsbsjsk itusssr* . . A ropy of any one or more of the original papers . latin" fVT e°nit,:n<‘tS- nnd writings re- S5£2r •■««*«■ — Witness the Honorable Melville W. Fuller. Chief Manhattan, in the City of New York, on tl.e 7tli day 50B of February, 1903. John A. Shields, Clerk. | Seal of IT. S. Cim.il Court, Soul lien. Hist , New York.] I0lisl.it K. Camp, Solicitor for Complainant. Lonis nicks, Of Counsel for Complainant. Complainant’s Exhibit 46, March 18, 1903, J. A. S, Ex’r. IN THE UNITED STATES CIRCUIT COURT, 600 Foil TUB DISTRICT OP NEW JERSEY. American Orai'iioi'iione Com¬ pany, Complainant, -In Equity No. Edison Phonograph Works, Defendant . AMENDED BILL OP COMPLAINT. 507 (Filed by Consent) (Filed Jan. 19, 1895.) To the Honorable tl.e Judges of tl.e Circuit Court of the United States, for tl.e District of New Jersey: The American firnphoplionc Company, a corpora¬ tion duly organized and existing under the laws of the State of West Virginia, nnd having its prin¬ cipal oflire in Washington, in tl.e District of Co¬ lumbia, brings (his, its bill of complaint, against 1.70 508 the Edison Phonograph Works, a corporation or¬ ganized under the laws of the State of Now Jersey, and having an office and doing business at East Orange, in said State. And thereupon your orator complains and says tlmt Chichester A. Bell and Sumner 'fainter, then of Washington aforesaid, were the original, first and joint inventors of certain new and useful im¬ provements in recording and reproducing speech and other sounds, which were not known or used in this country, or patented or described in this or (5QQ any foreign country prior to their invention there¬ of, and which had not been in public use or on sale in the United States for more than two years prior to their application for Betters Patent therefor. That on that 27th day of June, 1885, the said Chichester A. Bell .and Sumner Tainter made appli¬ cation in due form, of law to the Commissioner of Patents for the grant of Letters Patent of the United States for the said invention, and then and there fully complied in all respects with the provis¬ ions and requirements of the laws of the United States in such case made and provided. 'flint due proceedings being had upon said appli¬ cation, upon the •! Ill day of May, 1SSG, Letters Patent of the United States, in due form of law, were issued and delivered to said Chichester A. Bell and Sumner 'fainter in the name of the United States, under the seal of the Patent Ofllce, and signed and countersigned respectively by the proper officers of the United States, and numbered 4’, granting to said Chichester A. Bell and Sumner 'Painter, their heirs or assigns, for the term of seventeen years from said 4th day of May, 611 1SSG, the full and exclusive right to make, use and vend the said invention throughout the United States and the Territories thereof, ns by reference to said Letters Patent, or a duly authenticated copy thereof, here in court to be produced, will more fully and at large appear. IV. Tlmt the said Sumner Tainter was further the original, first and sole inventor of a certain new and useful improvement in apparatus for record¬ ing and reproducing sounds or sonorous vibrations, not known or used in this country, or patented or B12 described in any printed publication in this or any foreign countiy, prior to his invention thereof, and not in public use or on sale in the United States for more than two years prior to his application for Letters Patent therefor. V. That on the 4th day of December, 1885, said Sumner Tainter made application in due form of law to the Commissioner of Patents for the grant of Letters Patent of the United States for said in¬ vention, and then and there fully complied in all respects with the requirements and provisions of the laws of the United States in such case made and provided. vr. That due proceedings upon said application being had, upon the 4th day of May, 18SG, Letters Patent of the United States in due form of law were issued and delivered; to said Sumner Tainter, in the name of the United States, under the seal of the Patent Office, signed and countersigned respectively by the proper officers of the United States, and num¬ bered :i-| 1,288, granting to said Sumner Tainter, 846 614 Ins heirs or assigns, for the term of seventeen years from said 4th day of May, 1SS<>, the full and exclu¬ sive right to make, use and vend the said invention throughout the United Slates and the Territories thereof, as by reference to said Letters Patent, or a duly authenticated copy thereof, here in Court to be produced, will more fully and at large appear. ArII. That the. invention or improvements described and claimed hi said patent to Sumner 'Painter were designed Tor and are capable of use conjointly, and are used conjointly with the improvements or inventions descrilied and claimed in the patent u aforesaid of Ceil and Tainler in recording and re¬ producing sounds. VIIT. And your orator further shows that on the 29th day of March, 1SS7, said Chicheslor A. Bell and Sumner Tain tor, by nil instrument, in writing duly signed, delivered and recorded in the United States Patent Oniee the 22nd day of September, 1SS7, did give, grant and convey to the Volin Oraplioplione Company, a corpora tion organized and existing un¬ der the laws of the State of Virginia, its successors •and assigns, the entire right, title and interest in 616 »iul to said Letters Piilent Xo. 341,214, granted lo them ns aforesaid, and in and1 to the invention se¬ cured thereby, ns by reference to said instrument or to a duly authenticated copy thereof, here in Court to be produced, will more fully and at large ap¬ pear. IX. That on the 29th day of March, 1SS7, said Sum¬ ner Taintcr, by an instrument in writing, duly signed and delivered and recorded in the United States Patent OfTlcc the 5th day of April, 1SS7, did give, grant, assign and convey to the said The Volta Liraphophuiie Company, its successors and assigns, the entire right, title and interest in and to said letters patent Xo. 34 1,288 granted to him as afore said, and in and to the invention scettred thereby, its by reference to said instrument,, or a duly uu- tbentieated copy thereof, here in Court to lie pro¬ duced, will more fully and at large appear. X. And your orator further shows Hint on the 2'Jtli day of Juue, 1887, the said The Volta Urnphophono Company, by an instrument in writing, duly signed and delivered, did grant to your orator the exclu¬ sive right amt license under the Letters Patent aforesaid, and eaeli of them, to make, use and vend apparatus for recording ami reproducing speeelt and other sounds throughout the United Stales and the Territories thereof, as by reference to said in¬ strument, or a duly nutlientieated copy thereof, litre in Court to lie produced, will more fully and tit large appear; and that on the 2-ltli tiny of January, J8U3, the said The Volta (Irapliophone Company, by an instrument in writing, duly signed, sealed and delivered, and recorded in the United States Patent Cilice the 25th day of January, 1893, did give, grant, assign and convey to your orator, its successors and assigns, the entire rigid, title and i. derest in and to said Letters Patent Xo. 311,21-t and Xo. 34 1,288. and in and to the inventions se cured thereby, as by reference to said instrument, or a dnlv authenticated copy thereof, here in Court to be produced, will more fully and at large ap- That your orator has been, since the date of.tlif assignment last mentioned, and is now, the ownoi of the said Letters Patent, and each of them, and ol Hie fields mid wivilcscs secured thereby, and if elusive possession 111 id is entitled In l In* ex milages of the said Itn orator further shows that the- said in- improvements aro of groat oonimoroial aotioal utility; that a groat public in- on manifostoil llioroin and a largo do I for nppnrauis oonslrnolod in aooord- omliud ying the sanio; flint in onlor to ioninnd and to confor upon tho public os and honolits. of the said Inventions, and its predecessors in the title have i; capital in noipiiring said patents and anil perfecting such apparatus, and ; expense devised and constructed ran- <, npplinneos find other neccssorios noc- fill in the lnnniifnctnro of such nppnrn- : ora ployed numerous skilled workmen, id mechanics in conned ion therewith; h investment litis been mndo and such mil upon tho faith reposed in Ilia said lit granted by tho flovernmont of tho is ns aforesaid, and in tho rights and otiroil thereby. orator shows, upon information and ho- license aoove mentioned, within the said District of New .Jersey, and elsewhere in the United States, wrongfully, unlawfully, and with intent to injure your orator, and to deprive it of the just your orator, and to deprive it of the just profits resulting from making, using, anil vending said inventions, have, without the license or consent of your orator, made or caused to he made, used or caused to he used, and sold or caused to lie sold, apparatus for recording and reproducing sounds, known as “pho¬ nographs,'' each and all containing or embodying or operating in accordance with tho said inventions or improvements, substantially ns described, and claimed in the said Tutors Patent, and each of litem, and in infringement of die exclusive rights granted to your orator, as aforesaid; and that the said defendant lias derived and received, and still is deriving and receiving, great gains and profit from such unlawful use, but to what extent your orator is ignorant, and cannot set forth. That eaelt such machine or apparatus so made, used, and sold by this del'emlant contains em¬ bodied, or operates in accordance with die inven¬ tions or improvements covered by both die Letters Patent aforesaid, or material and substantial parts thereof. servants, clerks, agents, mill wnrkim-n, nmy be |,,.r. pclually enjoined ami l est ruined, by a writ of in- junction issuing out of and under the soul of this Uonoruble Court, from directly or indirectly mnk- in accordance willi the inventions or improvements iot forth' in (lie Letters Patent aforesaid, or either if (hem ; ami (3.) That your Honors will grant unto your ora- or a preliminary injunction, issuing out of and imler the seal of this Ilonornhlc Court, enjoining md restraining iho said deremlanl, its associates, ittorno.vs, servants, clerks, agents, and workmen, o the same purpose, and tenor, and effect as herein- •afore prayed for, with regard to said perpetual in¬ unction ; and (a-) That your orator may have such other and urtlier relief as the equity of the ease may require. To the end, therefore, that the said defendant lay, if it can, show why ^ your orator should not ave the relief hereby prayed, and may full, true ml direct answer make, but not under oath, an- wer under oath being expressly waived, according n the best and utmost, of its knowledge, informa- ion, remembrance and belief, to the several mat¬ in's hereinbefore averred and set forth, as fully and articulnrly as if the same were, repealed para- said defendant, tlm Edison rtionogrnpn \\ commanding it to appear ami make answer ti bill of complaint, and to perform and abide by orders ami decree herein as to this Court may just. And your orator will ever pray. American (.irapliophone Co. (l. s.) Hy Edward 1). East Viec-l’res District of Columbia, ss. : On the ISlh day or .lanuary, ISO"., before m sonally appeared Edward l>. Easton, mid belli; sworn did depose and say (lint lie is (lie Viec- dont of flu; Aineriean Ornphophom; Com named as enaiplainnnt in the foregoing hill ol plaint; (hat he has read the same and know contents thereof, and Hint, (he same is true i own knowledge, except as (o mailers therein i upon information and belief; flint, as to such tors he believes it to lie true, and that the si fixed to said hill is the enrporale seal of said plninnnf, and was li.v ldm affixed thereto 1 thority of said corporation. Chns. W. Dnrr, (l. S.) Notary Public, D. C. T,EE & LEE, No. 20 Nassau Strcc New York, N. Complainant’s Soli Anthony Pollok, Philip Maure, Of Counsel, No. 020 F Street, the method liv which it opera led, which lmvo been used in nil much i lies for recording and reproducing speech since the date of said patents. l»,.i„r to dune 28, 1SS8, the defendant corpora¬ tion, the Edison Phonograph Works, was organ¬ ized under tlie laws of the Stales of >’ *hc recording and reproduction of manufactured l.v or for (he coniplainai tile consent in writing of the coniplainan I’rior to dune 2P, I8SS, the coniplainnn monrod, or proposed to commence, the 1 ;3g making nnd selling (lie said grnphopln emliodied, or was alleged to emhody, tli of tlio Kdison fundamental patents relut phonograph, nnd the said Kdison J' Works liad commenced, or proposed to i tlie business of making and selling an form of the Kdison phonograph, which u by tlie nompla inant to infringe some o onts on the grapliophono under which (lie ant, was licensed. In order to harmonize Hiding interests nnd to avoid, litigation Lippincott, with tlie. knowledge and cons complainant, did, on June 28, 1SSS, enti agreement with tlie said Kdison in words 10 as follows: Agreement made this 2Slh day of June nnd hetween Thomas A. Kdison. of Llewei in the State of New Jersey, party of the and Jesse IT. Lippincot t, of the City am New York, party of the second part : Whereas, the party of the first part vontor of wli.at is generally known ns t graph, an instrument, capable of reenrdir producing sounds and articulate Ktvw.1i n Umled. Stales have been issued and applied for Whereas, the Kdison Phonograph Company, a 1 ' ‘ » * U\st 0 lei tlel of tlie Slate ot -Now Jersey, is the owner of tlie Let- tors Intent issued upon said inventions and of the applications for Letters Patent relating there- Jo, now pending and hy contract with the party of tlie first part, dated Or- 'oher 28th, 1887, owns and pmUses certain contract ngiits, and is entitled to any further or new inventions that the party of the first part may imU i elating to the phonograpli. All of which will more fully appear by said contract, to which for greater particularity, reference is hereby made’; Whereas, tlio Kdison Plion „i „ eol,. poration organized nnd existing under the laws of the State of New Jersey, Ims acip.ircd an exclusive right to manufacture snid phonographs, pursuant to and upon tlie terms and conditions mentioned in a certain contract entered into between tlie party of the first part and tlie said Kdison Phonograph AAorks, ns will more fully appear by snid contract, to which, for greater particularity, reference is hereby made; and Whereas, tlie said party of tlie first part owns a majority of tlie stock, and controls tlie said Kdison Phonograph Company and tlie said Kdison Phono- trnpli Works; nnd Whereas, tlie party of tlie second nnrfc is desirnne buy from the party of the iir.sl part, and the party of the first jmrt agrees to sell and deliver to him, the entire capital stock of the said Edison Phono¬ graph Company, excepting one hundred and fifty (150) shares, for Five hundred thousand dollars (§500,000). Sneli slock shall he delivered and paid for, as follows: On .InliLXIth^ 1 SSS. Ten thousand dol- lars (§10.000) shall he paid to the said Kdison by the said Lippi limit. On September 1st, 1SSS, One hundred and fifteen thousand dollars (§115,000). On October 1st, 1SSS, One hundred and twenty-five thousand dollars (§125,000) ; and on November 1st, 1 SSS, Two hundred and fifty thousand dollars (§250,000) shall he paid to the said Kdison. On July 33th, 1SSS, certificates representing the entire capital stock of the said Kdison Phonograph Company, less one hundred and fifty shares (150), shall he delivered to the Garfield Safe Deposit Com¬ pany as trustee, ■with ■written instructions to de¬ liver the same to the said party of the second part, when the provisions of this contract, ns to the pay¬ ment of the entire Five hundred thousand dollars (§500,000) and the execution of the contracts here¬ inafter mentioned, have been complied with. The one hundred and fifty shares (150), herein¬ before referred to, which the party of the. first part can not agree to sell or deliver, was previously sold to Mrs. Mary Tleinemvay, of Poston, Mass., for §22.500 (twenty-two thousand five hundred dol¬ lars). and is now owned by her. From the moneys coming to him.' (lie party of the first part will re¬ serve the sum of Twenty-t wo Ihousand five hundred dollars (§22,500) with which to buy hack said stock, and will use his best endeavors to buy back «-onnm L> ,V0 ,""ulpc'1 U'ousnnd dollars (§<>00,000) to he paid as aforesaid, the sum of twenty-two thousand five hundred dollars (S™. •™» upon his agreeing to himself buy said stock, or to protect the interest of the said Mary Ilemcn- «a.> in some other manner and hold the party of the first part and the Kdison Phonograph Com- IMny Imnnlc.ss from any claims to he made by her. Second. The party of the second part shall with¬ in twenty (20) days from the execution thereof, form or cause to he formed a corporation to ho called the American Phonograph Company, which corporation shrill engage in the business of ex- cImJI 'n” aml i,,tro(1,lci"« tI,e phonograph cominer- Third. Within thirty (30) days from the forma¬ tion of said American Phonograph Company, the "ree c t 1 el ce the said Edison Phonograph Company and the said Edison, and the. said Edi¬ son Phonograph Works and the said Edison, shall lie so modified and the said companies shall sever¬ ally take such action as may he necessary to admit Of the making of certain contracts between the said Edison and the said American Phonograph Com¬ pany, and the said Edison Phonograph Works and the American Phonograph Company, in the form and containing the provisions of (lie contracts here¬ unto annexed and marked respectively “Contract between Edison and the 'American Phonograph Company,” and “Contract, between the Kdison Pho nograph Works and the American Phonograph Company.” and said contracts in such form and containing such provisions and no others shall within said thirty days lie executed hy the parties thereto. Fourth. The consideration to the said Edison for the execution of this contract is I10II1 the pay¬ ment of Five hundred tliousund dollnrs, ns nliove provided, and tlie execution hv the American Pho¬ nograph Company of tile contracts herein referred to. In case default should lie made in any pay¬ ment, as and when the same is h.v the provisions hereof reipiired to lie made, and such default should continue for ten days, or in case the American Pho¬ nograph Company should fail or refuse to execute tile said contracts or either of them, I lion each party shall he discharged from further obligations hereunder, and the (larlield Safe Deposit Company, trustee, shall deliver to the parly of the second part one share of stock of the Edison Phonograph Com¬ pany for every one hundred dollars that has been paid to the said Edison, and shall deliver the bnl- race of said stock to the said Edison. If it should inppen that either or both contracts to bn executed >y the American Phonograph Company have been lclually executed by tile parlies thereto at the lime my default be made in payments hereunder, said ■ontrnets so executed shall be considered null and Fifth. Tlie party of the second part further igrees that lie will purchase, so far as he is able, lie entire capital stock of the Edison Speaking 'heliograph Company, and save the party of tin¬ iest part harmless from any claim or claims that nny lie made by said company or any of its stock- mlders against him ; and the said Edison agrees ipon all tlie provisions of this contract having been •arried out. to transfer and assign nil ids rigid, ti le and interest in, and to twelve hundred sliares of lie stock of tlie said Edison Speaking Phonograph Company, now owned by him, to the snid party of he second part, and to procure from Charles ond part of the five sliares of the stock of said com- puny owned by said Ratehelor. in witness whereof the parties hereto have set !m 'I'lti ,lJS mi<1 HCalS th‘ struments. First. The phonograph shall be put on the mar¬ ket under the name of the phonograph. The in¬ strument known ns the graphophone shall bo put on the market under the name of the “rhonograph- Graphophone.” The company shall do its utmost td introduce both instruments, and shall in no wav press the introduction of one at. tlie expense of the Seventh. The compiin.v shall not sell phonographs for use in countries nil . than the United States and Ciinmln, nor inteefen: in my wn.v with (lie for¬ eign I nisi ness nf t lie said Edison. The sjiid Edison is also to have the exclusive rijrht in perpetuity tn inn n a fact n re. phonographs and all supplies there- Eighth. All phonographs dealt in by the said com¬ pany slnill linye placed upon them such numbers and dates of patents as in the opinion of counsel C(i3 may be necessary for protection of the patents of Hie company under the law. Ninth. Tills contract, is predicated upon the as¬ sumption that all (lie provisions of a contract en¬ tered into between the said Edison and. Jesse II. Lippincol t, dated the 2Slh day of .Time, 1SSS, have been or will lie carried out. In ease the said Lip- pincott should fail to pay to the said Edison tile Five hundred thousand dollars, as in said contract provided, or in ease of the failure on the part of the American Phonograph Company to execute the contract with the Edison Phonograph Works, as in said contract provided, lids contract shall be CG-1 nuH nnd void. In witness whereof, the parties hereto have set their hands and seals the day and year first above written. Contract Between Edison Phono- (!0f graph Works and American Phonograph Company. Agreement, made this day of I88S, by and between the American Phonograph Company, a corporation organized and existing un¬ der the laws of the Slate of party of tile first part, and the Edison Phonograph Works, a, corporation organized and existing under (lie laws of the .State of Now Jersey, party of the second: part ; Whereas, the party of the first part is about to undertake (lie. introduction and exploitation of the “Phonograph,” and an instrument to ho called the BB0 “Phonogrnph-frenpliophnnc,” and the various de¬ vices and apparatus used in connection therewith, and the supplies therefor, and is desirous of having the said phonograph and supplies manufactured by. the party of the second part; Now, it is agreed ns follows: First The party of the first part hereby it gives to grant, nnd hereby does grant, to the party of the second part the sole and exclusive right to manu¬ facture the phonograph, nnd the various devices and apparatus used in connection therewith and sup¬ plies therefor in perpetuity, and agrees that it will not authorize the manufacture thereof by others. Tlie party of the second part agrees to manufacture and deliver the aforesaid to the party of the first part at the actual cost of manufacture plus twenty per cent, ihoroof, cost of manufacture to include cost of labor, material and general expense, and in¬ cluded in general expense, shall lie five per cent, nf lnlior, nnd material for depreciation of plant. Second. The party of the first part does not pos¬ sess tile right to authorize the manufacture of the phonogrnph-graphophone, hut it. acrees that it. will 50S obtain from I he person possessing such .authority tin; privilege; of permitting the party of the second part to at. all times estimate on the mnnnfaetnrc of said phonogmpli-gruphnphone, and if its bids are no higher than the Imuti /iilv bids of other repntalile mumifncliiriug estaldishments now in business, that the mannf.aetnre of said plmnogrnph- graphophone shall be given to the party of the see- end part. The party of the first, part, farther agrees that, it will not establish or be interested in any faetory for the mannfaetnre of phonograph-graph- oplmnes, lint, on the contrary, will do its utmost to obtain the mannfaetnre thereof for the party of the [50^ second part. Third. The books of the party of the second part shall always be open to the inspection of the parly of the lirst. part in order that it may keep informed of tin: cost of the mannfaetnre carried on by the said parly of the second part. If, afany time, the parly of the first part is of opinion that the party of the second part is not employing proper tools or proper methods, or does not possess proper facilities for manufacturing said phonographs, it shall appoint, one expert in manu¬ facturing, the party of I he second part another, and these t wo a third, the three so appointed to eonsti- Inle a hoard of arbitration, who shall investigate 1 ail complaints, and their decision shall lie binding upon the parly of the second part, and it shall pro¬ cure such special tools and machinery, and adopt such methods, and obtain such facilities as said board shall recommend. l’oiirlh. Tim party of the second part is to be al¬ i inn. inis contract is predicated upon the as sumption that all the. provisions of a contract on lered into between (lie said Kdison and Jesse H l.ippineolf, dated the 2Sth day of June, 1SS8, have been or will he carried' out. In oust: the said Lip pined | should fail to pay the said Kdison the five hundred thousand dollars, as in said contract pro vide], or in case of the failure on the part of tin American Phonograph Company 1;o execute the contract with the said. Kdison, as in said contract provided, this contract shall he nail and void. In witness whereof, the parties hereto have set Iheir hands and seals the day and year first above written. *,n ,lu*.v 3"> 1SSS, tin: said Kdison Phonograph '"iiipnny ratified and confirmed the said agreement >f June 28, 1888. made: between the said Kdison and lie said Lippim-iilt, and also ratified and confirmed he making of the agreements witli Kdison and with lie Kdison Phonograph Works, provided for by Oil July 111. 1888, in furl hern nee of the business ‘■'"‘"ic. coiilemplnleil by the said contract of June !S, 1SSS, the said Lippincolt caused to ho incor- loraled, under the laws of (he State of New Jersey, corporation known ns the North American Phon- grapli Company, and on July 17, 1SSS, the said Jppiiicnl.t executed an agreement with the said lie North American Phonograph Company pur- -orting to convey to said company the rights of the aid Lippinnitt. tinder his contract with tile com- taimint, dated March 20, 1888, and also his rights nder the said contract, with the said Kdison, dated nnc 28, 1888. Thereafter anil prior to October 10. 1SSS. the 103 said Lippincott and tin? hi id tin?. North American Phonograph Company, for the purpose of imrtnoniz- injr (Ik? phonograph and gmphoplione interests, to avoid 1 l„ I 1 in fnrtlieranee of the business scheme contemplated by said contract between said Lippincott and said Edison of .lime OS, ISSS, with the knowledge and consent of the complainant, made the following ngn-i-nieiils with the complain¬ ant, whereby the said Edison Phonograph Works was licensed in perpetuity to make and sell, under the graphophone patents, including (lie patents re¬ ferred to in said hill of complaint, a machine called the phonograph and supplies therefor and patented improvements thereon, and whereby the said Amer¬ ican Graphoplinno Company was licensed in per¬ petuity under the said Edison patents to make and sell a machine called the phonograph-graphophone and supplies therefor and patented improvements thereon; and whereby, in order to make certain the precise character of machines which the complain¬ ant. and defendant were thus respectively licensed to make, and sell, a model phonograph .and a model phonngrnph-grnphnphnnc. were adopted as standard machines, ami it. was provided that the phonograph and phonograph-graphophone which the defendant and the complainant, were. rcs|>ectively licensed to make and sell, should not. lie changed from said standard machines, except, in so far as each might be improved- by patented inventions, but that any patented invention of Mr. Edison improving the phonograph shall not be applied to or used on the phonograph-graphophone, nor shall any patented invention owned or controlled by the Volin. Graph- oplione Company improving the phonograph-graph¬ ophone be appl ied to or used on the phonograph. Agreement, made this 1st day of August, 18SS, hy and between. Thomas A1. Ellison, of Llewellyn Park, in the .Stale of New Jersey, party of the first part, and The North American Phonograph Com- £77 IKiny, a. corporation organized and existing under the laws of the State of New Jersey, and Jesse II. Lippincott, of the City and State of New York! parties or (he second part. Whereas, the parly of the second part lias been organized with (lie view of exploiting and introduc¬ ing commercially (In? phonograph, and lias acquired Uio necessary rights and authority so to do; and Whereas, Jesse IT. Lippincott lias acquired the right to exploit and introduce an instrument known as the grapliopiionc; and Whereas, the said company and the said Lippin- cott, possessing the right to introduce both instru¬ ments, intend placing them upon (ho market to¬ gether, leaving to the public the right to make their own selection in buying or renting instruments; Now it is agreed as follows : First. The phonograph shall lie put, on the mar¬ ket under the name of the phonograph. The in¬ strument now known as the graphoplmne shall ho put on the market under the name of the Pliono- graph-Graphophone. The said company and the said Lippincott shall do their utmost to introduce both instruments, and shall in no way press the introduction of one at the expense of the other, nor permit or allow its officers, agents or employees to !579 favor one more than the other. Second. The price to the public for cither pur¬ chase or rental of each instrument complete, in¬ cluding one cylinder means for driving the instru¬ ment, whether by electric motor, clockwork, or foot- power, or otherwise, shall be the same; provided, that the selling price of each of said instruments to the public shall not bo over hundred dollars or the rental shall not be over Forty dollars per an¬ num, and the discounts and commissions in selling or renting each shall lie the same, and each instru- fl thill no imsniidcrstnndiug shall s ii phonograph mill wlmt ii pho¬ nin'. mi instrument previously upli, T. A. Edison,” mill now in I'lie Xorlli Ainerirmi Phonograph taken us n stmiilnnl phonograph, nt previously marked “Phono- ie, S. Til inter,'’ ami which is ion of T. A. Edison, is to be taken mogrnph-grnphiiphonc. Xnne of res of rnnstruetion of one inslru- I'afler applied to or used on the all remain ns it. now is, ns illus- 'iiments marked, except in so far nprnved by patented inventions, invention of Mr. Edison, iinprov- It, sliiill not be annlied to or used vned or coni rolled by the Volta i pnn_v. improving The phono- e, be applied to or used oil the ng the intent ion hereof that each •emnin distinct, and shall not bo use of parts or features of con¬ vention or improvement made by i thin fifteen years from the date lionograph as it now exists shall > company without further coin- ny invention made by the said een years from the date hereof, ■ial phonograph or special extra h, which is sold as an extra, such re of duplicate records of music, y invention by which the use of and the company shall pay to the said Edison a royally of lifleen per cent., computed on the manu¬ facturer’s price to the company, of every special phonograph, special extra, duplicate records or np. parntus embodying the invention by which the use of the phonograph is enlarged or by which it is adapted to uses other than those for which it is now available, ns the case may he. Clocks to bo ex¬ empted from all contracts. All patents issued on said invention shall belong to the company and all expenses of procuring the same shall be paid by it. Xo new patented invention of the said Edison as¬ signed or assignable to the company hereunder shall he used on or sold with the phonograph-graph- nplione, and no new patented invention owned or [•mil rolled, now or hereafter, by the Volta Graplio- phone Company, shall he used upon or sold with I ho said phonograph. Eiftli. In order that the said Edison may con- luet experiments looking towards the improvement if the phonograph the company shall allow him o draw, for experimental expenses, for the first ,'oar from file date hereof, Fifteen thousand doi- nrs: for (lie second. Ten thousand dollars; for the bird, Seventy-five hundred dollars, and yearly, for on years thereafter. Five thousand dollars. These ixponsos to he jin id upon vouchers showing actual let cost, with no profit to the said Edison or any onipnny in which lie is interested; •Sixth. If (lie company should, nt any time, be ued or threatened wifli a suit by any person chaini¬ ng that any part or feature of tbn phonograph in- ringes patents issued to any person other than the DfcO tlie right, by Ins own counsel ami nl tin; company’; cost, to participate in the defense of such suit. Seventh. The company shall not sell phono graphs for use. in countries other thun the United States and Canada, nor interfere in any way wit li tlie foreign business of the said Edison. Tile said Edison is also to have the exclusive right in per¬ petuity to manufacture phonographs and ail sup¬ plies therefor for export. Eighth. All phonographs shall have placed upon them such marks, numliers, dates of patents as in the opinion of counsel to hi; selected by Jesse II. 5t7 Lippincolt may lie necessary for (lie protection, un¬ der the law, of all the patents owned or controlled by the Edison Phonograph Company and the Volta firuphophone Company. Ninth. This contract is predicated upon the assumption that all (1m* provisions of a contract entered into between the said Edison and Jesse H. Lippincott, dated the 281 h day of June, 1888. have been or will be carried out. In case the said Ijippincntt should fail to pay to the said Kdison the live hundred thousand dollars, as in said con¬ tract provided, this contract shall be null and void. ;gg In witness whereof the parties have set their hands and seals the day and year first above written. Thomas 'A'. Edison [u s.] (Sea1-) Jesse IT. Lippincott [u s.] Witness ns to Lippincott.: J. Adriance Bush, The North American Phonograph Co.. Jesse II. Lippincott, President. 'Attest : Oeo. 17. Fitzwilson, Secret orv. Agreement made this lir.-t day of August, 18Sf by and between the North American Plionograp Com piiny a corporation organized and existin; under the laws of the Slate of New Jersey, am Jesse II. Lippincott, of the City and State of’ Nov York, parties of the. first part, and the Kdisui Phonograph Works, a corjiorntion organized am existing under the laws of the Slate of New Jet sey, party of the second part. Whereas the party of the (irst. part is about ti undertake the inlrodiietion ami exploitation of fhi “Phonograph” and the various devices anil np pa rnl.us used in connection therewith, and the sup plies therefor, and is desirous of having the said phonograph and supplies manufactured by the party of the second part. Now it is agreed as follows: First. The party of the first part hereby agrees l.o grant, and hereby does grant, to the party ol lie second part the sole and exclusive right tr manufacture the phonograph and the various de¬ vices and apparatus used in connection therewith, md supplies therefor in perpetuity, and agrees that t will not authorize -the manufacture thereof by ithers. Tlie party of the second part agrees to manufacture and deliver tha aforesaid phonograph md the various devices and apparatus used in con- icetion therewith, and the supplies therefor, to the >arl.y of tlie fust, part, at tlie actual cost of manu- racturc, plus twenty per cent, thereof, cost of manu¬ facture to include cost of labor, material and gen «ral expense, and included in general expense shall be five per cent of labor and material for deprccia- Ills till' ssl XI .Mii-lli .Miicrienn I ' I mu i >” i-n ]>n iiv will secure for tin* sniil Edison 1’hnno* Works llu* opportunity to estimate on t.h(*m is iiiiliol i* with ollirr uinnufuclurcrs for tli-u in (‘ipiiil tmiis. Tin* pnrly of I lie (irst part ■agrees flint it will not establish or lie intcr- n nny fnrlory for tin* niiinnfiii-tnri* of phono* paphophones, lint on tin* rontrnry will ilo lost to olitnin tin* nninnfai-turi* thereof for ■l.y of t in* second part. il. Tin* books of tin* parly of tin* second part lwnys lx* op-.-n to Hie inspection of the party irst part, in oriler Mint il may keep informed cost of tin* maiinfaetiire carried on by said if tin* second part. 1 f at. any lime, the parly- first part is of opinion Hint tin* party of tlie part is not employin'; proper tools, erasing materials or proper methods, or does not : proper facilities for mannfact tiring said ;rnphs, it. shall appoint one expert in inann- infr. tie.' party of (in* second part another, esc two a third, the three so appointed to ate a board of arbitration who shall invest!* 11 complaints, anil their decision shall be g upon the parly of the second part, and it. procure such special tools, materials and aery and adopt such met hods and obta in iieilities as said board recommend, rlli. Tlie parly of the second part is to lie¬ 'll and contemplate miimifarl.uriiig tlie ■ graph for export, lint the orders of the party first part shall have preference over orders ipment to foreign countries'. The party of Fifth. This contract is predicated upon the as sumption Hint all the provisions of a contract en I creil into between the said Edison and .Tesse II Uippincolit. diifcil Wiie. iiStli day of .Tune, 3SS8; In case tlie said Lippincott should fail to pay tin said Edison the live hundred thousand dollars in said contract provided, this contract shall bn null In witness whereof tlie parties hereto have set their hands aud seals tlie day and year first abort (Seal.) Edison Phonograph Works, By T. A. Edison, President. Attest: A. O. Tate, Secretary. .Tesse IT. Lippincott (Seal.) Witness as to Lippincott: •T. Adriance Bush. The North American Phonograph Co. . By .Tesse IT. Lippincott, President. (Seal.) Attest: Oeo. IT. Fitzwilsnn, Secretary. (Note. The above agreement dated Augnst 1, 1SSS, part of ExTiihit *10, constitutes Complainant's Exibit 101, .Tune 10, 1001!, *T. A. S. Ex'r). Agreement mnuo tins lentil day or October, 1888, by ami between Thomas A. Edison, parly of the first part; the Edison I’liumigrapli Works, jiarly of the second part; the North American Phonograph (Company, parly of tlie I hint pari; the fourth part. In eonsiilerati ; II. iappincoil, party of In eonsiileration of one dollar in hand paid by each of the parties hereto to each of the others, ami of other good and valuable consideration, the re¬ ceipt whereof is hereby acknowledged, it is agreed as follows: First, iieferring to a certain agreement hereto¬ fore made by and between Thomas A. Kdison, the North Ameriean Phonograph ( ompanv and Jesse Jl. Eippincolt, dated August .1, 1888, a copy of which is intended to tie hereto annexed, marked “Exhibit A,” and referring to the last sentence in the 7th section of the said . . meat, (lie. said sentence being as follows, to wit : “The said Edison is also to have the exclusive right in perpetuity to manufacture phonographs and all supplies there¬ for for export.” liy mutual consent of the afore¬ said three parties who executed the said agreement, the said last sentence of the said 71b section is hereby amended to read as follows, with the same force and effect: as if it had been so written at the time the said agreement was executed to wit: “The Edison Phonograph Works shall, without further consideration, have the exclusive rigid, in perpetuity to manufacture phonographs and all supplies therefor for export.” Second. Iieferring to a certain agreement, here¬ tofore made by and between The North 'American Phonograph Company. -Tesse TT. Eippincolt and the Edison Phonograph Works, dated August 1st. 1888. a conv of which is intended to be hereto annexed. “Exhibit If,” and referring to the Ural part of thu 001 fourth section thereof, to wit: "The party of the second part is to lie allowed and contemplate man¬ ufacturing the phonograph for export,” by mutual consent of the aforesaid three parties who executed the said agreement, tile said lirsf. part of the said fourth section is hereby amended so as to read as follows, with the same force and ell'cct as if it laid been thus written at the time of the execution of the said agreement, to wit: "The party of thu second part is without further consideration to have the exclusive right in perpetuity to manu¬ facture phonographs and all supplies therefor for export.” 602 In witness whereof, Hie parties hereto have at the city of New York, hereunto and to three dupli¬ cates hereof severally set their hands and seals on the day and year first above written. Thomas A. Edison. [P. S.'J Witness to Mr. Edison: . Sami. Insult, S. If. Eaton. Edison Phonograph Works, By Thomas A. Edison, [p. S.]' President. Attest: A. O. Tate. 603 Secretary. North 'American Phonograph Company, By Jesse H. Lippineott, [p. s.]' President. 'Attest: Geo. TT. Fitawilson, Secretary. Jesse H. Eippincott. [p. s. i Witness to Mr. Eippincott: J, 'Adriancc Bush. Exhibit A. le this 1st day of August, lSSd, 'Imams A. Edison, of i.lewellyn of Now Jersey, purl y of the first nil American J’honngruph Cum¬ in cirgnni/.rcl -iiiul existing under nil? of New Jersey, mill Jesse II. • t-ily mill Slntc of New York, ini purl. irl.v of tin? sen mil part lias been io view of exploiting nml intro- II v the phonograph ami lias nc- nry rights anil aiiihority so to II. Tappiueolt has acipiireil the mill inlroiliu-e an instrument 'hi (phone; anil id eonipany ami the said l.ippin- e right. In iiitroiliiee lint h ilistru- eing them upon Ihe market to- ! Ill* piihlie I lie right In make their nying or routing instruments. 1 as follows : •graph shall he. put on Ihe market Ihe phonograph. The instrument graphnphnne shall he put on the name of Ihe plinnogrniih-grnphn- ■nnipnny anil Ihe saiil Lippi neolt. lost to inlrniluee both Inst ra¬ in no -wav press Ihe introduction use of Ihe other, nor permit or al- grills or employees in favor one iee In Ihe piihlie for either pnr- power, or otherwise, shall lie the same, provided f-07 that the selling price of each of ijuid instruments In the piihlie shall not lie over hundred dol¬ lars or the rental shall not lie over forty dollars per annum, mid the discounts mid commissions in sel¬ ling or milling each shall he the same, and each instrument, shall lie sold and rented on the samo terms of payment. Third. In order that no misunderstanding shall occur as In wind, is a phonograph and what a plum- iigrnph-grnphophonc. an instrument previously marked “I’hniiugrnph, T. A. Edison,” mid now in Hie possession of The North American Phonograph Company, is to he taken as a slaiulm-il phonograph, ,i08 and an inslrmante previously marked “IMinnograph- < iraphophone, O. S. Tain ter,” anil which is now in the possession of T. A. Edison, is to be taken as a standard phouogrnph-grnphnphoiie. None of the parts or features of construction of one instrument shall he hereafter applied to nr used on the oilier, lint eaeli shall remain as it now is, as illustrated by the instruments marked, except in so far as each may he improved by patented in- veal ions, lint any patenleil invention of Mr. Edi¬ son, improving the phonograph shall not lie applied to or used on the plionngni ph-gniphnphnne, nor shall any patented invention owned nr controlled 600 by the A’olta ( Iraphophone Company improving the piiniingraph-grnplioplinne, he applied to or used on the phonograph, it being the intention hereof that each instrument shall remain distinct, and shall not lie improved by the use of parts or features of construction of Ihe other. Fourth. Any invention nr improvement made by ^ tlm sniil Edison within fifteen years from the date 11 "r sperini exirn for tin? phonograph. which is sulil ns mi extra, surli ns the niiiiiiiriieliii-e nf duplicate records of music, novels, or any invention htv which the use of the phonograph is eulii or by which it is adapted lo uses oilier lluill those Tor wlliell it is now uviiilnlilo, slinil he assigned to the company, and the company shall pay lo the said Kdison a royalty of fifteen per cent., computed on the manu¬ facturer’s price to the company of every special phonograph, special extra, duplicate records or ap¬ paratus embodying the invention by which the use or the phonograph is enlarged or by which it is adapted to uses other than those for which it is now available, ns the case may be. Clocks to be exempted from all contracts. All patents issued on said invention shall belong lo the company and all expenses of procuring the same shall he paid by it. No new patented invention of the said Kdison assigned or assignable to the company hereunder shall he used on or sold with Ihc phonograph- graphophone, and no new patented invention owned or controlled, now or hereafter, by the Volta Ornphophono Company, shall be used upon or sold with the said phonograph. Fifth. In order that the said Edison may con¬ duct experiments looking towards the improvement of the phonograph, the company. shall allow him to draw, for experimental expenses, for the first, year from the date hereof, Fifteen thousand dollars; for the second, Ten thousand dollars; for the third, Seventy-five hundred dollars, and yearly, for ten years thereafter. Five thousand dollars. These ex¬ fringes patents issued to any person other than the said Kdison, or upon any invention alleged to have been made by another, the said Kdison shall have the right, by his own counsel and at the compaiiy’H cost, to participate in the defense of such suit. Seventh. The company shall not sell phono¬ graphs for use in countries other than the United •Stales and Canada, nor interfere in any way with the foreign business of the said Edison. The said Kdison is also to have the exclusive right in per- ( pctuily to manufacture phonographs and all sup¬ plies therefor for export. Eighth. All phonographs shall hare placed upon them such marks, numbers, dates of patents, as, in the opinion of counsel, to he selected by Jesse H. Lippineolt, may he necessary for the protection, un¬ der the law, of all patents owned or controlled by the Edison Phonograph Company and the Volta Graphophone Company. Ninth. This contract is predicated upon the as¬ sumption that all the provisions of a contract en¬ tered into between the said Edison and Jesse H. ( Lippincott. dated the 28lh day of June, 1SSS, have been or will be carried out. In case the snjdJLip^ pincott should fail tojiay_tp_thc^aid_Edison the Five hundred tlioiisand_dnllnrs, as in said contract proTidedrthis'contfact shall he null and void... Tn witness whereof the parties have set their % fvM JlV V< era. The parly of the second part agrees to manu¬ facture and deliver the aforesaid phonograph, and the various devices and apparatus used in con¬ nection therewith, and the supplies therefor, to the party of the first part til the actual cost of manu¬ facture, plus twenty per cent, thereof, cost of man¬ ufacture to include cost of labor, material and gen¬ eral expense, and included in general expense sliall he live per cent, of Inltor and material for dcprccia- Sccond. The parly of the first part does not pos¬ sess the right to authorize the manufacture of the phonograph-graphophoiie. hut agrees that when the company owning said invention is prepared to let contracts for any considerable ipiantity of said in¬ struments, the said North American Phonograph Company will secure for the snid 1'hlison Phono¬ graph AVorks the opportunity to estimate on them and to compete with other manufacturers for the work on eipinl terms; the party of the first part fur¬ ther agrees Hint it will not establish or lie interested in any factory for the manufacture of phonograph- grnphoph ones, lint on tin; contrary, will do its ut- » most to obtain the iiiaiiufnctiirc thereof for the par- ‘ ty of tiie second part. J Third. The books of the party of the second part shall always Ik* open to the inspection of Hie party of the first part in order that it may keep informed t'22 a board of arbitration who shall investigate all complaiuts, and their derision shall lm binding cure such special tools, materials and machinery and adopt such methods and obtain such facilities as said board recommend. Fourth. The parly of the second part is to be allowed and contemplate manufacturing the plus nograph for export, but the orders of the party of the first part shall have preference over orders for shipment, to foreign countries. The party of the second part shall keep its facilities for manufac¬ ture up to the reasonable demands upon it, and will <123 not manufacture phonographs and supplies for use within the United States and ('auiidas for parlies other than the North American Phonograph Com¬ pany. Fifth. This contract is predicated upon the as¬ sumption that all the provisions of a contract en¬ tered into between the said Edison and Jesse II. Lippincott, dated the 28th day of June, 1SSS, have been or will be carried out. In case the said Lippincott should fail to pay the said Edison the Five hundred thousand dollars in said contract provided, this contract shall he null and void. • In witness whereof, the parties hereto have set their bauds and seals, the day and year first above o 25 written. Edison Phonograph Works, lSEA,“) By T. A. Edison, President. Jesse 11. Lippincott. (Seal.) Witness as to Lippincott: J. Adriance Bush, The North American Phonograph Co., By Jesse H. Lippincott, (Seal.) President. Attest.: Oeo. H. Fitz Wilson, This agreement, made this sixth day of August, in the year one thousand eight hundred and eighty- eight, lietween Jesse H. Lippincott, of the City and State of New York, and hereinafter styled "the said Lippincott,” of the one part, and the American Oraphophone Company, a corporation incorporated under the laws of West Virginia, and hereinafter termed “the said American Company,” of the other part. Whereas, the said Lippincott has undertaken and agreed to purchase all the stock of the Edison Pho¬ nograph Company, of the State of New Jersey, to¬ gether with all the patents and inventions of Thomas A. Edison relnting to the recording and re¬ production of speech and other sounds, in the United States and Canada, for the sum of Five liundml thousand dollars, upon certain conditions, as set forth in an agreement between the said Edi¬ son and the said Lippincott, dated June 28th, 1888. a ropv of which is hereto attached ; And whereas, the said Lippincott has also under- 884 210 taken to purchase the stock of the Edison Speaking Phonograph Company so far as ho is able to do so; And whereas, in consideration of a certain agree¬ ment between tile said kippincott and the said American Company, styled a supplemental agree¬ ment, a copy whereof is hereto annexed, the said Mppim-olt lias agreed to give to the said Americau Company the option of baying tins said property rights and inventions so acquired from tile said Edison and the said Edison Phonograph Company, at any time within five years, at and for the sum of Kive hundred thousand dollars, and the stock of the said Edison Speaking Phonograph Company at 020 ils original cost to the said kippincott, payments to lie made in easli or in the capital stock of the said American Craphophone Company ntpnr. Now, therefore, this agreement witnesseth : That for and in consideration of the several mat¬ ters ami tilings hereinbefore slated, and further, Hie sum of live dollars lawful money to him in hand paid, tin* receipt whereof is hereby acknowl¬ edged, the said kippincotl lias agreed and does by these presents covenant, promise and agree that at any lime within five years from the date hereof, he will, when so required to do by the said American Company, sell, assign, transfer and convey to the 680 snhl American Company all of the said properly, rights and inventions so acquired from the said Edison and the said Edison Phonograph Company, free from all claims, demands and itienmbmncos, for the said sum of five hundred thousand dollars, and all the stock, rights and property of the Edison Speaking Phonograph Company that may be ac¬ quired by or for the said kippincott at the price or sum that: he shall have paid for the same, the said payments to be made in cash or in capital stoolc of the said American Company at par, at lli« op¬ tion of (lie said Anieriniii Company, and it is 211 further agreed that if the said company shall elect 031 to make the said payments in its capital stock, the said stock may be increased to an amount sulfi- eient to allow the said payments to be made out of such iticrcnsc. And the said kippincott further agrees that after lie shall have acquired (lie ownership of or the right to use (lie patent, of the said Edison known as the fundamental patents, lie will grant to the said American Company free of cost the right or license to use the same until the said patents shall lie transferred to the said American Company ns hereinbefore provided. It is further agreed that the said supplemental agreement, a copy of which is hereto annexed, is, in so far ns it relates to the royalties to lie paid to the said American Company upon the instruments known as the phonograph and the supplies there¬ for, made a part of this agreement. In witness whereof the said -Tnssn IT. kippincott lias hereunto set his hand and seal and the said American (Trnphophom* Company has by its presi¬ dent signed these presents and attested the same by its secretary, and affixed its corporate seal the day and year first above written. Jesse FT. kippincott [r„ s.] Witness: James A. Bates 033 ! K-] James 0. Bayne, President of the American Graphnphonc Com¬ pany. Attest : •Tames A. Bates, Secretary of the American Oaphophone Com¬ pany. Jesse 17. kippincott. . Agreement made this 28th day of Jane, ISSs! by and between Thomas A. Edison, of Llewellyn U, in tliu state of hew Jersey, parly of the first t, anil Jesse LI. Lippincolt, of the City of New k, party or the second part, fliei-eas the party of the first part is the in- tor of wlmt is generally known ns the phono- [>h, nn instrument enpublu of recording and roducing sounds and nrtfieulnte speech, and pled and designed for ge.nernil 'comnierciall ooses, upon which invention numerous patents tie United Slates have been issued and applied and herons, the Edison Phonograph Company, a oration organised and existing under tile laws le State or New Jersey, is (lie owner of (lie let- pnlent issued upon said inventions and of the i cations for letters patent relating thereto pending, and by contract with the parly of the part, dated October 281 h, 1887, owns and pos- •s certain contract riglits, and is entitled to further or new inventions that the party of (lie part may make relating to the phonograph. >f which will more fully appear by said con- to which for greater pnrlieiilnrity, reference ruby made; and hci'ras, the Edison Phonograph Works, n cor- tion organized ami existing under laws of the Stale of New Jersey, acquired an exclusive right to i fart ore said phonographs, pursuant, to and Hie terms and conditions mentioned in a eer- •on tract entered into between the party of the part ami the said Edison Phonograph Works, II more fully appear by said rnnlrnrt, to which renter particularity reference is hereby made; lorens, the said party of the first part owns a . ...... hji nudum oi a corpomtiou wliii 'vl,,,>i formed, acquire and possess the new snry authority to exploit and introduce coniine euill.v the said phonograph as well as a CerPi other instrument known ns the "gruphophono,” mi winch shall, in fact, engage in the introduction mi exi>loitaiion thereof. Now it is agreed as follows: First. The party of the second part agrees to lm from tlie party of the first part, and the party of tl, first part agrees to sell and deliver to him the ei lire capital stock of the said Edison Plionogrnp Coinpan.v, excepting one hundred and fifty (lot) f°r Fivart and the Edison Phonograph Company ess from any claim to lie made by her. mil. The party of the second part shall with- 'll ty (20) days from the execution thereof, ir cause to lie formed a corporation to lie American Phonograph Company, which 'at ion shall engage in the business of cxploit- d introducing the phonograph commercially, ’d. 'Within thirty CIO) days from the forma- f said American Phonograph Company, the tents bet ween the sail! Edison Pliiittncrnnli Fourth. The consideration tn the execution of this contract i nf Five hundred thousand dolla the said Edison for s both the payment •s as a hove provided Company of the contracts herein referred to” in case default should lie made in an.v payment as and when the same is by the provisions hereof re- 'tulreil to ho made ami such default should con¬ tinue for ten days, or in case the American Phono¬ graph Company should fail or refuse to execute the said contracts or either nf them, then each party shall he ilischarfreil from further obligations horn- under, and flic flarfleld Safe Deposit Company, trustee, shall deliver to the party nf the second part one share of stock of the Edison Phonograph Com¬ pany for every One hundred dollars that has been paid to the said Edison and shall deliver the bal¬ ance of said stock to the said Edison. If it should happen that either or both contracts to be executed by the American Phonograph Company have been actually executed by the parties thereto at the time any default he made in payments hereunder said Conlrnrt. between Edison ,he morion, 1*1 nogmpll Company. Agreement, niude fliis day of , j ] :,n,) lll'( Tlinmns A. Edison of Llewellyn Par 1,1 (l.o Stoll' of Non- Jersey, parly of Hio first pm ilm! ,he Amorifiiii Phonograph Company, a corn ration organized nrnl existing under the laws < the State of , parly of the second part. Whereas, the party of the second part has hoc organized with the view of exploiting and introdm !?* commercially the phonograph, and has acquire he necessary rights and authority so to do, and ha , nc'pi,rc'1 ,!l° ri",lt t0 exploit and introduce ai ns. rument known as the “Ornphophone”; and, W hereas, the said company possessing the rigli o introduce lioth instruments intend placing earl ipon the market, leaving to ihe public the right t« nake their own selection in buying or renting in inimenfs. Mow, it is agreed as follows: First. The phonograph shall he put on the mar- e. under the name of the phonograph. The in- . rument known as the grnphophone shall lie put Second. The price to the public for either pu chase or rental of each instrument complete, i: eluding cylinders capable of recording the san number or words, means for driving the instrumen whether by electric motor, clock-work or foot-powi or otherwise, shall he the same, and the discoum mid commissions in selling or renting each shall 1. the same, mid each instrument shall he sold an rented on the same terms of payment. Third. In order that no misunderstanding mn, occur as to what is a phonograph and what a phei nogrnph-grnphophonc, an instrument previous! marked “Phonograph, T. A. Edison,” is to he take! ns a, standard phonograph, and an instrument pre nously marked “Plionogrnpli-Grnphophone, J. JJ hippineott,” being one of some three hundred re irnitly manufactured by the Western Electric Com 111 ny, is t0 »>e taken as a standard phonograph jrnphophnne. Xone of (lie parts or features ol .oust ruction of one instrument shall be hereaffei ippiieil to or used on the oilier, but each shall re- nnin as it now is, as illustrated by the instruments narked, except in so far as each may be improved >y new inventions, lmt an invention improving the Monograph shall not he applied to or used on the .honogmph-gMplioplmiie and rice rerun, it lining lie intention hereof that each instrument shall re- min distinct, and shall not he improved by the use f parts of features of construction of the other. Fourth. Any invention or improvement, made liy ie said Edison, .within fifteen years from the date " exists snail bo assigned to Hit* company witliuul further com¬ pensation. But any invention made by the said Kili- son, within lift eon years from the dale hereof, relat- inj* to a special phonograph or special extra for the phonograph, which is sold as an extra, such as Urn manufacture of duplicate records of music, novels, Sx., or any invention by which the use of the phonograph is enlarged, or hy which it is adapted to uses other than those to which it is now employed, shall he assigned to the companv, and the company shall pay to the said Kdison a royalty of iiftceu per cent., computed on the manufacturers’ price to the company of every special phonograph, special extra, duplicate records or apparatus em¬ bodying the invention by which the use of the phon¬ ograph is enlarged or by which it is adapted to uses other than those for which it, is now employed, as the case may be. Clocks to be exempted from all contracts. All patents issued on said inventions shall belong to the company, and all expenses of procuring the same shall be paid by if. Xo new in¬ vention of the said Kdison, assigned or assignable to the company hereunder, shall be used on or sold with the phonograph-graphophone. Fifth. In order that the said Kdison may con¬ duct experiments looking toward the improvement of the phonograph the company shall allow him to draw for experimental ex|ienscs for the first year fiom the date hereof fifteen thousand dollars; for the second, ten thousand dollars; for the third, seventy-five hundred dollars, and yearly for ten rears thereafter five thousand dollars. These ex¬ penses to be actual cost, with no profit to the said comnanr slinnbl of o„„ i i.„ mg that any part or feature of tin phoi iph in¬ fringes patents issued to any person other than the said Kdison or upon any invention alleged to have been made hy another, the said Kdison shall have lhu '>* ''■» «« *> <••'">»«<-•>, and at the company s cost, to participate in the defense of such suit. .Seventh, The company shall not sell phonographs for use in countries other than the United States and Canada nor interfere in any way with the for¬ eign business of the said Kdison. The said Kdison is also to have the exclusive right in perpetuity to manufacture phonographs and all supplies there- for for export. Kighlh. All phonographs dealt in by the said company shall have placed upon them such num- bets and dales of patents as in the opinion of counsel may be necessary for protection of the pat¬ ents of (he company under the law. Ninth. This contract is predicated upon the as¬ sumption that all the provisions of a contract on- tered into between the said Kdison and Jesse II. Lippincntt. dated the -Sill day of June, 1SSS, have been or will tie carried out. In case the said Lip- pmeott, should fail In pay to the said Kdison the five hundred thousand dollars, ns in said contract provided, or in ease of the failure on the part of Hie American Vhnnngrnph Company to execute the contract, with the Kdison T'hnnngrnpli Works as in said contract, provided, this contract, shall lie null and void. Tn witness whereof the parties hereto lmve set their hands and seals the (lay and year first, above written. Sixth. Tf the American L'liouii” i-iipli Company. Agreement. made this (lay (>r 3S.S8. I tv itiul ltd ween tin- A . . I’honugraph Cttmiiiiiiy, :i corporation iiiiu'al si nd existing under the laws of the Suite of , party of the lii-s I, pint, mill the Fdison Phonograph 'Works, a I'orporiition 1 ersey, party of tin; seeonil part. Whereas, die parly of llie fii-sl part is aliout to undertake the iiilroilaefioii ami exploitation of the “phonograph,’’ ami an instrument to in: called the “rhonogrnph-Grnphophone,” ami the various devices and iipparatiis used in connection therewith, and the supplies therefor, and is de¬ sirous of having the said phonograph and supplies manufactured by the party of I lie second part. Now it is agreed as follows: First. The party of the first part hereby agrees to grant and hereby does grant to the party of the second part tile sole and exclusive right to manu¬ facture the phonograph and the various devices and apparatus used in connection therewith and sup¬ plies therefor in perpetuity, and agrees that it will not authorize the manufacture thereof by others. The party of the second part agrees to manufacture and deliver the aforesaid to the party of the first part at the actual cost of manufacture, plus twenty per cent, thereof, cost of manufacture to include cost of labor, material and general expense, and in¬ cluded in general expense shall be five per cent, of labor and material for depreciation of plant. Second. The parly of the first part does not pos¬ sess the right to authorize the manufacture of the phonogr.oph-graphophone, but it agrees that it will said phonograph-graphophone, and if its bids arc no higher than the bom fid,: of other reputable manufacturing establishments, now in business that the manufacture of said phonograpli-grapko- phone shall he given to the party of the second part, •the party of the first part, further agrees that it will not establish or be interested in any factory for the manufacture of phonograph-grapiiophones, but on the contrary, will do its utmost to obtain the manufacture thereof for the party of the second part. . Third. The hooks of the party of the second part shall always be open to the inspection of the party of the first, part, in order that it may keep informed of the cost of the manufacture carried on by the said party of the second part. If at any time the party of the first part is of opinion that the party of the second part is not employing proper tools, or proper methods, or does not possess proper facilities for manufacturing said phonographs, it. shall appoint one expert in manufacturing, the party of the second part an¬ other, and these two a. third, the three so appointed to constitute a board of arbitration who shall in¬ vestigate all complaints, and their decision shall he binding upon the party of the second part and it shall procure such special tools and machinery and adopt such methods and obtain such facilities as said hoard shall recommend. Fourth. The party of the second part is to bo allowed and contemplate manufacturing the phon¬ ograph for export, but the orders of the party of the first part shall have preference over orders for shipment to foreign countries. The nart.v nf sci-nuil part shall keep lls facilities for maim fa c- tim.‘ »|) to I lie rc-asonalilo demands upon it. Ami will not miinufncLtirc phonographs anil supplies for nsi! within (lie I'nilcil States ami Canada for parlies other than the American Phonograph Com¬ pany. Kirill. This contract is predicated upon this as¬ sumption Jhat all tin* provisions of a contract en¬ tered into I ict ween the said ICdison and Jesse II. Lippineott, dated the L'litii day of Jane, 1SS8, have been or will la; carried out. In case the said hip- pincott should fail to pay the said ICdison the five hundred thousand dollars, as in said contract pro¬ vided. or in case of the failure on the part of the American Phonograph Company to execute the emit met with the said ICdison, as in said contract provided, this contract shall lie mill and void. In -witness whereof, the parlies hereto have sot their hands ami seals the day and year first above Supplemental agreement, made this sixth day of August, 18SS, by and between the American Ctraph- iphnne Company, a corporation duly organized un- ler tlie laws of West Yirgiilin, hereinafter referred In as “said American Company, ■’ of tlie first part, and Jesse If. Lippineott, of flu; city, county and Stale of Xew York, of tlie second part. Whereas, the said Lippineott desires to secure a modification -of his agreement, witli said American r’ompany, so ns to enable him to lmndlc the pho- r One hundred dollars (81011), then the exces we that amount shall lie equally divided between Jiaid American Company and the said Lippin leeoml. That the said Lippineott shall salimit b ijamin F. Thurston, of Providence, 11. L, or sucl er counsel as I In* said American Company mu; irove, the (piestion as to what marks, nuinbeii dates are to lie placed upon the phonograph; iiifm-tnrod for and sold or leased by tlie Xortl erica n Phonograph Coni]iany or its sub-coin pa ! or agent s, in order to comply with the law ami •gnizc and protect the patents now or liereaftei led or eon I rolled by the Volta Graphophont ipaii.v, and the said Volta Company shall have rigid to submit in writing its claims in this rfi 1 to tlie said counsel, anil such marks, numbers dales as (lie said Thurston or counsel shall de- are necessary shall thereupon lie placed upon phonographs. bird. Should ilie said Lippineott adopt the i of exclusively leasing said instruments, and n.v time on and after December 31, IS, SO, tlie re- III. All the rights iiiul puti-uls or i|iiiiril 1 iy Siiiil l.ippiucnll or tin- Xnt-t li An i’linungrnph l ■iiiiip:iii y fi-inn Thomas A. Kilii from l In* Kilison I'hoiiogrnph Com puny n tin: Kilison Sin-likin'; 1'honngriiph Comp; In- so vest < -i I n ml pri-si-i-viMl, Mini nny agi between 1 1n- sniil Lippincott nml tho s i Ami-rii-iin I’honogrupli Company shall lie “d (lint in ease I In* sniil American Compii exercise ils option to purchase the sniil rip' intents ninlei1 ils ngi . . . it with the sniil I. It, the title to the sniil rights anil patents n nnsferreil to the saiil American Company oltn firaphophnne Company, as the case n ee from encnnihrance or clouil. III. On each anil every phonograph sold 1 hy the said Lippincott or the said No: icon I'honogrnph Company, nr hy any si litlee or a pent of the said Lippincott or ■ •onipany, the said Lippincott shall pay to I American Company the sum of Ten dolh I : and on all cylinders anil supplies for i phonograph one-fourth of the difference i the cost of said cylinders and supplies to 1 Lippincott or said North American Phoi Company and the price at which the sa >e sold to the public. And if the said Amr onipany shall, under its option from the si ncotl, purchase the rights and patents of I Edison, then the said Lippincolt. shall pay lid American Company on each and eve 'graph so sold or leased as aforesaid Twer •s ($20) ; and upon all cylinilei-s and suppl graph Company and the price at which they may bo sold to the public, settlements to be made periodi¬ cally as provided by the contract between the said Lippincott and said American Company relating to graphophones and supplies. 7th. The said Lippincott shall allow and pay to said American Company for experimental ex, .enscs Fifteen thousand dollars ($15,000) the first year, Ten thousand dollars (.$10,000) the second year,’ Seven thousand five hundred dollars ($7,500) the lliird year, and Five thousand dollars ($5,000) each year for the next ten years, these expenses to be the actual cost of making drawings, constructing 074 models and making experiments, hut to include no profit to said American Company. All such pay¬ ments to lie made to said American Company monthly upon vouchers showing said actual cost 8th. In the conduct, of the business and in all circulars, cards and advertisements, there shall ap¬ pear in connection with the. name of the North American Fhonograph Company, or any sub-coin- irony, agents or sub-agents, and as prominently the following: “And Jesse 17. Lippincott, sole li¬ censee of American Graphophone Company,” and the graphophone shall hear a plate with the fol- 07r, lowing inscription and no other, unless said Ameri¬ can Compnny shall approve or direct (he same (the blanks, numbers and dates to he such numbers and dates of patents as said American Company shall deem necessary) : Tho Fhonograpli-C.raphophone, Manufactured by tho American Graphophone Company for Jesse IT. Lippincott, sole licensee under patents, No _ dated . No . dated... . and the patents of Charles Sumner. Ta.inter, No. - dated . dated . (■indorsement.) " tl,e Bi'ifUiw on the liond of Jesse II. Lippin- eott to the American C! raplioplione Company, here- !'-v 8iv« °,,r consent to the said Lippincott entering into this supplemental agreement, dated the sixth day of August, IS8S, and nothing herein contained shall he taken or held to affect our liability upon the said bond. Oeo. I. Whitney. [Seal.] John liobinson. [Seal.1 In presence of 1*'. Ij. Stevenson, as to Oeo. I. Whitney. Oeo. IT. Fitzwilson, ( as to John liobinson. This defendant, relying upon said license, en¬ tered upon the business of manufacturing and sel¬ ling phonographs and supplies therefor in accord¬ ance with said license, and invested a large amount of money in said business, but this defendant has never manufactured or sold any phonographs or any machines for recording and reproducing speech and other, sounds than the phonographs and sup¬ plies referred to in said license agreement and the same in all respects ns the said standard phono¬ graph referred to in said license agreement, except so far as said phonographs have been improved by „ patented inventions of Mr. Edison. All of which statements this defendant avers to be true, and it pleads the. said license to the said complainant’s bill, and prays judgment, of Ibis Honorable Court, whether it should he compelled to make any further or other answer to the said bill, and prays to be lienee dismissed with its costs in this behalf most wrongfully sustained. Edison f heliograph Works, Py Thomas A. Edison, President. Dyer & Seely, Solicitors for Defendant. certify that iu our opinion the fore- cell founded in point of law. liirh’d X. Dyer, S. O. Edmonds, Of Counsel for Defendant. On this 21st day of January, 1S!)5, before me personally appeared Thomas A. Edison, and made oath that lie is the president of the defendant com¬ pany and that he has read the above plea and knows the contents thereof, and that it is not inter¬ posed for delay, and that it is true in point of law. T! idl’d N. Dyer, [r,. s.l Notary Public State of New Jersey. District ok New Jersey. Duplication. (Filed January 20, 1805.) This rcplinnt, saving and reserving unto itself all and all maniier of advantage of exception to the manifold insiinieiencics of the ’ said plea, for replication thereunto snitli, that it will aver and prove its said hill |o he true, certain and sullicient in the law to be answered unto; and that the said plea, of the said defendant is uncertain, untrue and insuflicicnh to tie relied unto by this re- pliant.; without this, that any oilier matter or thing whatsoever in the said plea contained, material or effectual in the law to he replied unto, confessed and avoided, traversed or denied, is truejallwlricli matters and things this rcplinnt is, and will bo ready to aver and prove, as lliis Honorable Court shall direct; and humbly prays, ns in and by its *aid bill it hath already prayed. Pollok & Maura, Of Counsel for Homn’K Complainant's Exhibit No. 47, March 18, 1903, J. A. S., Ex’r. THU PltESIDUNT UK TIJH UNITED STATUS OF AMUU1CA. (Seal: Circuit Court of United States, S. 1) of N. Y.) To J. Adrianee Hash. (1 reeling: We eouimaud you that all and singular business and excuses being laid aside, you and each of you he and appear in your proper persons before John A. Shields, Esq., a standing examiner of the Cir¬ cuit Court of the United States for tile Southern District of New York in tiie Second Circuit, at his dike in the Host Olllce Ituilding, in the borough >f Manhattan and City of New York in said South¬ ern District of New York, on the 18th day of March, 1D03, at 11 o'clock in the forenoon of the mine day to testify all and singular what you and •ach of you may know in a certain cause now pend¬ ing undetermined in the Circuit Court of the United Stales for the Southern District of New fork wherein New York 1'hnnngrnph Company is ■omplninnnt and National Phonograph Company tnd others are defendants on the part of the com¬ plainant ; and that you and each of you bring with ■on and produce at the time and place aforesaid all •ertain papers, contracts, documents and instru- nents in writing hereinafter designated under ‘Schedule of Papers to he Produced,” now in your •nstody or under your control and all other deeds, •ontracts, evidences and writings, which you have n vonr custody, control or power concerning the icqnisitinn liy Hie North American Phonograph Company of rights of any kind relating to the pho¬ tograph or relating to the conveyance by the North Ymcriran Phonograph Company of any such right ir rights to the New York Phonograph Company, lork Phonograph Company, and this you or either of you are not to omit under the penalty upon each and every of you of Two hundred and iifty dollars ($250). Schedule of papers to he produced. Contract dated Oct. ”8, 1887, between Edison and Edison Phonograph Co. Contract dated Oct. ”8, 1SS7, between Edison Phonograph Co. and E. T. Oillilaud. Assignment dated 'July 17, 1888, Oillilaud to Lippincott, of said contract of Oct. 2S, 1887. Contract dated May 12, 1SSS, between Edison and Edison Phonograph Works. Contract dated July 17, 1SSS, between Edison ' Fhonogrnph Co. and Edison. Contract dated June 28, 1SSS, between Edison and Lippincott. Contract dated July 17, 18SS, between Lippin- ,cott and North American rhonograph Co. Contract dated Aug. 1, 1SSS, between Edison, North American Phonograph Co. and Lippincott. Contract dated Aug. 1, between North American Phonograph Co., Lippincott and Edison Phono¬ graph Ml irks. Contract dated Oct. 10, 1S8S, between Edison, Edison l-honograph Works, North American Pho¬ nograph Co. and Lippincott. G Contract dated Oct. 12, 1888, between Edison, Edison Phonograph Co., Edison Phonograph Works. North American Phonograph Co. and Lip- pincoft. Contract dated Oct. 12, 1888, between North 'American Phonograph Co. and Metropolitan Pho¬ nograph Co. Contract dated .Tan. 10, 1SS0, between the North American Phonograph Co. and Metropolitan Pho- Contract (luted July 30, lSS'J, between Edison and Lippincolt. ('null-net dated Jan. 33, iSlttl, between Edison Phonograph Co., Edison Phonograph Works, Edi¬ son, Lippincolt and Xorl.li Ameriean Phonograph Co. Contract dated July 17, 1SS.S, lietween Lippincott and North American Phonograph Co. Contract dated Feb. ti, 18811, between North ’American Phonograph Co. and John I\ Haines. Contract dated July 1, 1803, between North American Phonograph Co. and New York Phono¬ graph Co. A copy of any one or more of the original papers above mentioned where the original cannot be pro¬ duced. A copy of any one or more of the original papers above mentioned contained in any printed pam¬ phlet or other printed form and in the pam¬ phlet. known as the “Bush Pamphlet.” All other contracts, documents and writings re¬ lating to the subject-matter of the contracts above enumerated, and all other deeds, contracts, evi¬ dences and writings which yon have in your cus¬ tody, control or power concerning the premises or concerning in any way the acrpiisilion by the North American Phonograph Company of rights of any kind relating to the phonograph or relating- to the conveyance by Hie North American Phonograph Company of any such right or rights to The New York Phonograph Company, Metropolitan Phono¬ graph Company and New York Phonograph Com¬ pany, and this von or either of you are not. to omit under the penalty upon each anil every of you pre¬ scribed by law. Witness the Honorable Melville W. Fuller, Chief .Tnslice of the United States, at. the Borough of 911 construed to apply to the manufacture of any arti- 709 cles tho right to manufacture which is now or may hereafter he vested in the American Grapliophone Company, or in the Edison Phonograph Company of New Jersey, or in the Edison Phonograph AA oi ks, pursuant to the several agreements now existing between the above-mentioned parties, or either of them, and The North American Phono¬ graph Company, and Jesse H. Lippincott, sole licensee of the American Grapliophone Company, or ci tiier of them. Fourth. Tlie party of the first part at the places ) f where Phonographs or Phonogrnph-Graphophones I j are manufactured, or from its depot of supplies sit- V0/ "ate nearestto the general office of the party of the / / second part, will deliver to tiie party of "the second / / part Phonographs and Plionograpli-Grapliopliones I [ and supplies therefor, made and to be used under v 1 the patents and rights herein described during the continuance of this agreement, nnd ns herein set forth and permitted, and all Phonographs and Pho- tiogrnpli-Grnphophoncs nnd supplies therefor de-j livered to the party of the second part during the continuance of this agreement shall be deemed to la* furnished hereunder. Each of said Phono¬ graphs and Phonograph-Graphophones so delivered shall remain the property of the party of the first 71 1 part, and is nnd shall be hereby leased and the use of it licensed by the party of the first part under said patents and authority aforesaid now acquired or which may hereafter be acquired from the date of such delivery, upon condition and so long as the rental therefor shall be duly paid to tlie party of the first part as herein provided, nnd so long as the ' provisions hereof are not violated, but not longer, or otherwise, and subject to the terms of this agree¬ ment, tho party of the second part may sublet or 712 make sale of said instruments, us hereinafter pro¬ vided. Fifth. The party of the second part shall pay and hereby agrees to pay to the party of the first part a rental at the rate of twenty dollars per year on and for each and every Phonograph and on and for each and every I’honogrnph-Graphophone de¬ livered to him, payable in equal quarterly pay¬ ments in advance, said rental to commence for each Phonograph or Phonogmph-C.raphophono on the first day or the first calendar month after its shipment by the party of the first part, and shall cease when and continue until the instrument so leased shall he returned into the possession of the party of the first part, and a notice by the party of the second part to the party of the first part of tun days in writing to its general office in the City of New York of his intention to deliver the said Phonograph or Phonograph-Ornphophone shall he considered as a return or delivery of the same into the possession or the party of the first part. And said rental shall cease also whenever proof shall be- given satisfactory to the party of the first part of the destruction of the same by fire or other accident beyond the control of the party of the second part. Sixth. The party of the second part may sub¬ let the Phonographs or Phonogrnph-Graphophones leased to him by the party of the first part under this agreement, hut such subletting shall he sub¬ ject to the restrictions and provisions of this agree¬ ment applicable thereto, and shall he under a sub¬ lease or agreement in writing, the form of .which shall be approved by the party of the first part, and each and every sub-lease or agreement shall expressly set forth that the Phonograph or Pliono- grnph-Graphoplione so snh-lct is the property of the party of the first part, and that the same is leased 7 IS and licensed under the provisions of this agreement ami not otherwise. And no such sub-lease shall be made for any period less than three months. For each instrument sublet the party of the sec ond part shall charge the sub-lessee rental at the rale of forty dollars per annum (neither more or less), payable in equal quarterly payments in ad- Seventh. The party of the second part shall keep all instruments leased to him under this agree¬ ment in good working condition, and to that end shall keep in his employ a sufficient number of persons living at different points in his territory, 716 who, while acting as agents or solicitors for the party of the second part, shall have sufficient knowl¬ edge of the instruments to enable them to remedy any slight defect in the working thereof. But whenever any part of an instrument shall wear out from ordinary wear and tear by actual and legiti¬ mate use, it shall, upon its return to the party of the first part, he replaced by a new part free of charge by the party of the first part. When any parts shall be broken or rendered ineffective by the carelessness or neglect of the party of the second part or his sub-lessee, the same shall be replaced at the expense of the parly of the second part, or 717 of his sub-lessee. Eighth. The party of the first part will, during the continuance of this agreement and the leases thereunder, furnish to the party of the second part, after requisition by him, all such extra cylin¬ ders for use on instruments leased and “Special" Fxtr.os,” such as records of music, orations, nov¬ els nr other appliances and parts of instru¬ ments applicable thereto, which shall be sold by the party of the second part at. prices Ini'll shall lie fixed from lime lo time by the party f I lie first purl. Such prices shell lie uniform in »• ease of each sub-company ncling under the am mril.v of the Xorlli American Phonograph Conn liny, or of Jesse If. Uppiucoll, sole licensee of tin meriean Oraphophone Company, and the parly ol ie second pari shall and he hereby agrees to pay ic parly of Ihc first, part for all ex tin cylinders, Special Extras,” parts and appliances so furnislicd, rices which slmll he fixed at twenty per cent, less ••an the prices at which the same slmll lie sold by ie party of the second part to others, payments ■ he made by the parly of (he second part to the illy of the first part on the IDIh day of each oath for all such cylinders, “Special Extras,” iris and appliances delivered during the previous Xinlli. The party of the second part shall give i media I c> information and notice to the party of e first part whenever said pnrlv of the second irt shall know (hat any one in his territory is dug an instrument nr any appliances thereof or erefor which shall be an infringement of the denis or rights owned or controlled by the parly the first, pnrt, and upon receipt of such infornm- m (he party of the first part will, at. its own ex- nso, at once institute legal proceedings or cause cm to be instituted for the protection of the denis nr rights owned or controlled by it. And the pnrlv of the first part agrees, at its own pease, to defend the party of the second pnrt ainst all suits for infringement by reason of the issessinn, leasing, use or sale of said instruments, pplies or appliances, and lo pay all final jndg- ™ts rendered in such suits, provided the party the first, pnrt shall have notice of such suit and norf unity to defend the same, such notice to he ron in lime to allow the party of the first, part, to 211 make answer, plea or oilier appropriate defense to 721 the original hill, petition, complaint, or other 01 iginid pleading, and lo defend through any coun¬ sel of its own selection. And the party of the second part shall not lie at liberty to defend any such suit or legal proceedings on his own liehalf until the party of (lie first part shall have refused so lo do upon demand. And the party of the first part further agrees that it will protect, indemnify and save harmless (lie party of the second part by reason of any damages or expenses which he may suffer, incur or sustain, growing out of any proceedings at law or in eipiily, or any litigation which may he 722 brought against or which limy injuriously affect the parly of the second part in the quiet title to or possession or enjoyment of the rights and interests hereby granted, or intended to lie granted, pro¬ vided the party of the first pnrt shall have oppor¬ tunity to defend, ns aforesaid, any suit or pro Cecil ing brought against the party of (lie second pnrt. Tenlli. If on the first day of January, 1800. or at any time thereafter, there shall be in any por¬ tion of the territory covered by this agreement a demand for Phonographs or Phonogrnph-Grnpho- Phones, Special Extras or appliances which tlie i»«rty of the second part slmll neglect or fail to lake appropriate measures to meet, the party of the first part may give written notice thereof to the parly of the second part, and if at the expiration of thirty days thereafter the said neglect or omis¬ sion still continues, the party of the first part may, s i long ns such default shall continue, but to the extent, only of such default, proceed to supply the demand through agents or otherwise without lia¬ bility to the party of the second part, provided Hint course shall not interfere with the delivery to tlm party <»f the wroml pnrt. of instruments, special <•> I i-iis or appliances, for which requisition shall he nimlu by him under the terms of this agreement. Hut it is expressly understood and agreed, that if at; any time after one year from the date of this agreement The North American Phonograph Com¬ pany shall he unable or fail to deliver to the parly of the second part instruments and supplies for which said party of the second part shall have made due requisition upon the party of the first part, ns such requisition is provided to he made in the case of the I'honngruph-Gruphophnnu by Jesse II. IJppiiicotl upon the American Grnphophoue Company, pursuant; to the agreement, between said IJppiiicotl: and said American Grnphophniie Company under agreement dated March 20, 1SSS, and in the case of the Phonographs, as provided, it shall he made by the Edison Phonograph Company upon Thomas A. Edison, pursuant to the agreement of October 28, 1887, or by The North American Pho¬ nograph Company upon said Thomas A. Edison, ru the Edison Phonograph Works, pursuant lo the agreement of August 1st, 1888, ami subject in the case of the Phonograph and Pliouogmph- rirupliophono to the several terms of said agree¬ ments affecting such neglect nr failure to supply ■itlier of said instruments, then the party of the second part shall have the right which "the said North American Phonograph Company or Jesse IT. Mppinrott, sole licensee of (he American Grnplio- dione Company, would then have to manufacture il cause to he manufactured instruments or slip- dies or both, necessary to till so much of such ■equisition as the said North American Phonograph 'oinpany or -Tesse IT. TJppincott, sole licensee of he American Graphophone Company, shall he tin- ■hie or fail to supply, and all costs of said instru- uents or supplies to the party of the second part >ver and above the cost thereof, ns determined bv. 917 213 the rentals of Phonographs or Phonogrnph-Grnpho- 727 ■ phones, or the prices of special extras and appli¬ ances as herein provided to tiie party of the second part, shall he borne by the party of the first part. Eleventh. If on (lie (lint day of January, 1S!)0, j or at any time thereafter, the results of exclusively leasing instruments shall he unsatisfactory to the j party of the first part, it; may require the party of till! second part to give the public the option, of either leasing or purchasing the said instruments, and in such event sales shall he made at such rea¬ sonable prices which shall be fixed by die party of the first, part, provided, howeyer, that if such requirement, shall he made in the case of any one suh-com pany, it shall ho operative in the case of all sub-companies acting under the authority of The North American Phonograph Company or of Jesse IT. TJppincott, the sole licensee of the Amer¬ ican Graphophone Company. From the price re¬ ceived from any instrument so sold, there shall Iiq first deducted and paid to the party of the first part an amount which shall equal the actual cost of said instrument, to the party of the first; pnrt, and the remainder of such selling price shall lie, equally divided between the party of the first part and the party of the second part, settlements nnd pay¬ ments to he made by the party of the second part 729 on or before the 10th day of each month for all sales made during the previous month. Twelfth. In the conduct of his business and in all circulars, cards and advertisements, there shall appear, and the party of the second part shall set forth, as prominently as his own name and in connection therewith wherever it shall occur, the following: “Acting under authority of The North American Phonograph Company nnd Jesse TT. TJppincott, sole licensee of the American Graphophone Company.” nth. Tim jmrly of the first part having ini provisions for conducting experiments awards (hi! improvement and perfection nniiigruph inn] I'honngriiph-Uruphnphniiu ipoelive inventors thereof during the next irs or therenlionls, ivill lie entitled to the i, use or eon trol of whatever Inventions mill patented l>,v such inventors, and the its leased or to lie leased under this agree- II have the hnnellt of all improvements ■lions thus secured; and any other tin¬ ts and inventions which the party or the may heroine entitled to the use, oy/ner- oatrol of during the term of this agree- any extension or renewal thereof, lmt it dy understood and agreed Hint no new volition of the said Edison shall he used ilh the i'hnnograph-Ciraphnphnno, anil no ileil invention owned or controlled now or by the Volta firaphophonc Company soil upon or sold with the Phonograph, ilruinonts delivered by the party of the under this agreement, shall at all times 1 the improvements thereon which at the neh delivery, nr prior thereto, have been i.v the party of the first part. And it is rovided, that if the furnishing of such ■ovemenls nr inventions shall add mate- lie cost of the Phonograph or Phonograph- one, as the same is now known, the ques itch additional charge, if any shall be i arbitration, the party of the first part, mo arbitrator, and the party of the second her, anil the two, if they fail to agree, a le chosen by the two arbitrators, and the f such arbitration, or of a majority tlicre- Foiirleenth. Tf the party of the second part 783 shall fail to pay to the party of the first part any sum or sums of money which may lie due under this agreement, anil if said default shall continue for the period of thirty days after the panic shall have heroine payable, and after written demand therefor, or if (he party of the second part shall violate any other of the terms or conditions of this agreement, and shall persist in such default, viola¬ tion or neglect, nr fail to remedy or repair the same for sixty days after written notice thereof from the party of the first part, or if the .party of the second _ part, shall become bankrupt or insolvent, and shall so eon I in lie for the period of thirty days, then the 784 parly of the first part may, if it. shall so elect, by written notice to the party of the second part (or those in charge of any of his offices) immediately rer.’iiinale all the rights granted by the party of the first part. her!‘uadiir.~aiiil“tako possession of jinil remove all Phonographs anil Piionograph-Ornplio- phones anil supplies therefor, anil-for that.. purpose may enter the premises _of_tho party of the second part, and of all persons claiming under him, nnd may collect from nay sab-lessee or purchaser all sums then or thereafter due to it, or to the party of the second part for the use or pur¬ chase of any instruments, or for supplies there- 735 for, or it may, so long ns it shall see fit, leave in the enjoyment and use of any Phono¬ graph or Phonograph-firapliophone, any lessee or other person in actual possession thereof, or by or from whom any part of the purchase price is un¬ paid, and collect from him or them such sums as may then nnd thereafter lie or become due for the use or purchase of the Phonograph or Phonogrnph- firapliophone, and for that purpose shall be en¬ titled to, anil may take possession of the premises of the party of the second part used for carrying i, smd occlipv mill Cilllllnrt I lie spine 111 taken mill irliirli lines not belong f I In* first; purl; or revert to it here- 1 relnrneil within six months from vliieli ruse Hie parly of till* first purl e pnrl.v of (lie second part n reason- ion for its use, or I lie party of the retain the same as its own properly. >r a reasonalile price ( not exceeding thereof) within seven montlis after 1 shall account to the party of tin • all the sums collecleil which shall efnrn Hie party of I he first part he¬ ’d to possession, deducting all ex- I hereto anil nil sums which may lie ly of the fiml part The parly of also ex]iressiy resi’rves to itself all emeilies at law or otherwise, inrlud- liy injiinciinn against the parly of S’., or those claiming under him, for of its mi tenteil inventions or insfrtl- nriznl liy a subsisting license liere- e violation of any other of its rights. [> first part, may in such event., at its pense, also use the name of the party inrl In protect its interests, anil to its hereunder. And (lie said party inrt hereby agrees to execute any eats in accordance herewith, and in the rights of the party of the first paragraph. le party of the second part fitr- he will within six months from the reeinent organize or cause to he clc company, under the laws of the ork, with a capital stock of 81,250.- fnr tlie purpose of assuming the duties ohligaliniis and transacting II hustness •Ii is provided for by this agreement, and to ■h company, when so organized, the rights of party of the second part under this agreement I he assigned. That from the first proceeds izeil from the sale of the stock of said company •h shall be issued to the parly of (hi sc I , he will pay into the treasury of such company, mil for a working capital, in cash, the _ stun 825,000. flint — said — couipahy,"^ 'immediately n its organization, shall deposit 8250,000 00 shares) of its full-paid capital stock with i Trust Company in the City of New York ns ■ lie approved by the parly of the first part, for very to said The North American Phonograph ipany, party of the first part, or to .Tesso IT. Lip- ■ott, Trustee, or his successor, as the party of first, part may direct, at the expiration of five •s from the date of this agreement. That, in the it of sueli deposit and upon due notice in writ- lo tlie party of the first part of such deposit aid shares with said Trust Company, ns afore- , the party of the first part, shall forthwith ver to (he said Trust Company a license lie party of the second part, similar in form to license herein granted, for~n further period n tlie expiration of five vein’s from the date ot agreement, viz.: until the 20th day of March, 1. ami for such further time, at the option of if the first purl, or to the stiiil Jesse IT. Lippincotl, I’ruslrc, or his surrcssor, ns the pnrty of I, lie first ,!,rt nmy direct, snid 2,500 sluices of stock of said ompimy, and said Trust Company shall deliver to aid company, fo he organised as aforesaid, its accessors or assigns, the said extended license, or lll“ Si,il1 . . . shall he immediately entitled to lie possession or the said extended license on the elivery, as aforesaid, of said 2,500 shares of slock. Ipon the deposit; of such shares of stock with said ’rust; Company and (he depositing of said ex- ended license, as aforesaid, said The North Ainer- am Phonograph . . . party of the first, part, r Jesse IT. Lippi limit, Trustee, or his successor s the case may lie, shall agree with said company ml neither it nor lie will dispose of the said shares F slock during the said five years, or of any in- •rest therein, and that all dividends which may lie lined and declared upon said 2,500 shares of nrk during the said live years shall lie repaid to lid company. And it is further agreed that if at any time •renffer said company shall increase its capital nek heyond the present fixed capitalization or I,2d(),000, it will, immediately upon said increase, •liver to (he party of the first, part, or to Jesse IT. ippincntl, Trustee, or his successor, as the parly the first part may direct, full-paid capital stock said company to tin* extent, of twenty per cent, any such increase; provided, however, that if cli increase he made prior In February 0th. ISO !. Ii. This contract is personal to the party mini part herein named, and the i lie organised as aforesaid, nnd any . of it, or of any of the rights granted or any or either of them, hy act of the ic second part, without the written con- i parly of the first, part, except to snid shall he a violation of this agreement md sufficient ground for a cancellation ^ the party of the first, part at its option, nth. If the party of the first part shall any party, parties or corporation, who • to perform the stipulations hereof, the Phonographs nnd Phonograph- ncs hereby leased, and the patent rights •Ii they are licensed, and its then exist- Is hereunder, it. is agreed that the pro- reof shall enure to the benefit of and iiding upon such transferee in respect of done or to lie done under this agreo- f the transferee were named a pnrty I; the parly of the first part, The North 7 rer (o (lie party of Hie second purl nil such >'■ oilier inslriniieiils of nssiirnncc ns the Die second purl slinll rensonnldy require, enlli. Tin* pnrly of die second port, hereby Woes dint lie will keep In's hooks of de¬ les hook, records of ran tills and other office n such form and will make such reports rty of dm first part, as may ho prescribed '•led hy die parly of the first, part through or appoinled for dm purpose of organizing nlaininj; a general form of records and ae- ir all sub-companies. ielh. Tt is hereby understood and agreed use of dm Phonograph and Phonograph- hone, so far as the same or either of applicable to watches or clocks, or in so u; use thereof has been conveyed by the son to Lowell C. Briggs and William W. under and pursuant to a certain agree- iring date the first: day of October, 18S7, excepted and reserved from the terms of omenf, ninl that this agreement shall not ■lied ns in any way authorising the party •cond part to use dm inventions covered r such purposes. But it is further under- 1 agreed that fifty per cent, of the profits ™y ,,(* received by the party of the first by .Tesse IT. Lippincott, Sole Licensee of rican Grnphnphono Company, from or hy f the use of the Phonograph and Phono- apliophone, or either of them, so far ns are applicable to watches or clocks, or by f the rights conveyed hy said Edison to Briggs and William W. .Tncqnos, ns as may hereafter he determined, among all the suli- 75t companies licensed by die party of the first part. Twenty-first. The party of the first part fur¬ ther agrees that any and all privileges and powers not herein conferred upon the party of the second part which shall hereafter at any time during the coni burnt ion of this agreement be conferred by the party of the first part upon any other sub-company or agent shall he likewise granted to the party of the second part Twenty-second. The parties hereto hereby agree that upon the formation of said company all the rights, privileges, benefits and responsibilities 732 of tlm party of the second part to this agreement shall vest in and devolve upon the said company in tlm same manner and to the same effect ns if the said company had in due form signed, sealed and executed this agreement in the place and stead of the party of the second part, and the party of tlie first part hereby agrees and binds itself to execute an agreement of the same tenor and effect to and with the said company, and also to execute such other and further transfers and agreements ns may bo necessary to effectually and completely invest said company with the rights and powers hereby granted to tlie party of the second part. 753 (11 witness whereof, the party of the first,- part has caused this instrument to bo executed by its proper officers, and its corporate seal to bo hereto affixed, and the party of the second part has here¬ unto set his hand and scnl the day and year first above written. The North Americnn Phonograph Co., [Seal.] By Jesse H. Lippincot.t, Prest. Attest.: Cleo. IT. Fitzwilson, Secy. > 7fi4 7fiO Tliis agreement, made this 13th day of June, A. ]). I SSI), hy and between The North American Phonograph Company, a corporation duly ' or¬ ganized under the lanvs of the State of New Jersey, party of the Ural part, a ndJjiu-Now-York Phono- graph (Company, a corporation duly organized un' der the l.aws of the State of New York, party of the second part, Witnessed!, whereas, heretofore and on or about , tin-' dth day of February, A. D. I860, the party of the first part did, by agreement dated on tluit day, grant to one John 1*. Haines, as lessee and licensee, certain rights and privileges, and the said John P. Haines did make, to and with the party of the first part, certain agreements in respect to said rights and privileges and the business to be conducted thereunder, and all relating lb the Phonograph and P h onogra ph -O rn ph oph on e and supplies therefor, etc., and all of which will more fully appear by reference fo said agreement, a copy of which Is hereto annexed with the intent that the same shall he taken and considered in connection therewith; and Whereas, by said agreement, dated February fifh, 1SS!) (executed by the party of the first part lierefo as the party of the first part therein, and executed by said John P. Haines ns the party of the second part therein), it was among other things provided ns follows: “The party of the second part further agrees that “he will within six months from the date of this “agreeemont organize or cause to he organized a “stock company under the Laws of the Stnte of “New York with a capital stock of One million “Two hundred and fifty thousand dollars divided "into twelve thousand five hundred shares of the “par value of One hundred dollars each share, “which company shall he organized for the purpose >1' •mf assuming the duties and obligations and 7fi7 “transacting the business which is provided for by “this agreement, and to which company, when so “organized, the rights of the parly of the second “part under this agreement shall he assigned. That “from the first proceeds realized from the sale of “the stock of said company, which shall he issued “to the parly of the second part, lie will pay into “the tVeasnrv of such company, as and for a work- “ing capital* in cash, the sum of Twenty-five “thousand dollars. That said company _ imme¬ diately upon its organization shall deposit Two “hundred and fifty thousand dollars (Two thousand “five hundred shares) of its full-paid capital stock 7158 “with such Trust Company in the City of New “York ns may he approved liy the party of the first “part,’ for delivery to said The North American “Phonograph Company, party of the first part, or “to Jesse n. l.ippincotf, Trustee, or his successor, “as the pnrtv of the first part may direct, at the “expiration of five years from the date or this “agreement. That in the event, of such deposit and “upon due notice in writing to the party of the first “part of such deposit of said shares with said Trust “Company, as aforesaid, the party of the first part “shall forthwith deliver to the said Trust Company «„ license to the party of the second part similar 7o9 “in form to the license herein granted, for a further • “period from the expiration of five years from tin? “date or (his agreement, viz., until the -Oth day “of March 1003, and for such farther time at tlic “option of ’the party of the second part as the party “of the first part may he authorized to extend said “license as aforesaid. The deposit of said shares “of capital stock and said extended license to he. “upon the following conditions: That at the expi¬ ation of said five years from the date of tins “iPTeement the said Trust Company shall deliver to I lit* North American J?liniif>»rtipli Company, ‘imi'l.v <>f the first part, or to the siiiil Jesse IT. hip 'pincolt, Truster, or liis successor, us the parly ‘of the first: part aia.v direct, said Two thousand 'live hundred shares of stock of said company, and 'said Trust Company shall deliver to said company 'to lie organized as aforesaid, its sii(>ccssnrs or as¬ signs, the said extended license, or the said com¬ pany shall lie immediately entitled to (Tie posses¬ sion of Hie said extended license on the delivery, as aforesaid, of said Two thousand five hundred shares of stock. Upon the deposit of such shares of stock with said Trust Company and the deposit¬ ing of said extended license, as aforesaid, said The North American Phonograph Company, party of Hie first part, or .Trssc IT. Lippincott, Trustee, or Ids successor, as the case may lie, shall agree with said company that neither it nor lie will dis¬ pose of the said shares of stock during the said five years, or of any interest therein, and that all dividends which may he earned and declared upon said Two thousand five hand red shares of stock during Hie said five years shill! lie repaid to said company”; and Whereas, tile parly of the second part hereto is corporation that has lieeii organized pursuant to ic provisions of said agreement of February fitli. ^Si), for tile purpose of assuming the duties and oli- gntinns and transacting the business which is rovidrd for by said agreement and to which cor- nralion the rights of the said John P. Unities Whereas, the party of flic first part lias dcs- ■ 'coated the Central Trust Company of New York, u's the place for said deposit, and lias directed that said stock lie deposited for delivery to Jesse U. I.ippincott, Trustee, or Ids successor, at the expira¬ tion of live years from the date of said agreement; and , Whereas, simultaneously with the execution of lids agreement between the parties hereto and its ■ delivery to the Central Trust Company of New York, the partv of the second part has deposited said shares of its capital stock, as is evidenced by the receipt or said Central Trust Company of New York endorsed at the foot of this agreement. Xo'w therefore, in consideration of said agree¬ ment of February Oth, 1SS0, and of the covenants and agreements therein contained and of the sum of One dollar by each to the other in hand pnul, it is hereby agreed by and between the parties hereto as follows First. It is agreed that all the rights, privileges, benefits and responsibilities of the said John P. Tin i lies, as provided for liy said agreement of Feb- nmrv IS SO, have vested in and devolved npon the party of the second part hereto in the same man¬ ner and to the same effect ns if tie par y " ' ^ second part hereto had in due form signed, sealed and executed said agreement in the place and stead of said John P. Haines. 700 Third. It is furt lit'r agreed Hint on the Gtli day ol l-ohruary, I SO I, nh itl Ceil I nil Trust Company of -Vuw York shall, without further direction from (In* parties hereto, or either of them, and without other or further consideration, deliver and transfer to said •losso II. Lippineotl, Trustee, or his succes- sor, said Two thousand live hundred shares of * stork, and shall, at the same time, deliver to the parly of the lirst part and to the pai*ly of the \ s,T""d l'1"'1 «H*h one copy of this agreement j "r extended lieense, which is exeeuted iiml ile- : posited, in duplicate, this day with said Central I rust Company of New York, ami Hie party of the 707 second part shall he immediately entitled to (he possession of said extended license upon the de¬ livery to said Jesse II. Lippiurntt, Trustee, or Ids successor, of snid shares of stock. I'oiirlh. It is further agreed, that upon delivery, as aforesaid, to said Jesse IT. IJppincoit, Trustee, or his successor, hy said Central Trust Company dr Xew York of said shares of the capital slock of the party of the second pari, and upon the faithful per¬ formance hy the party of (hi* second part of all the covenants and agreements made incumbent upon it by said agreement of February 0th, 1880, then that this agreement shall become and shall confer 7 "PO" 1">'1 Kl'Hll folly and entirely vest in the party of the second part an extension of the rights granted to anil conferred upon (he party of the second part hy said agreement of February Oth, 1880, and the subsequent assignment to it for a further period and until the 20th day of March. 1003, and for such further time at. Hie option of the party of the second part as the party of the first part may he au¬ thorized to extend such license; subject, however, to the covenants and agreements of said agreement of February Oth, 1880. as fully and entirely ns if said agreement hail been in the first instance made he period of the extension granted hereby, s Hie period originally thereby fixed and Fifth. It is hereby further agreed between the parlies herein, and the said Jesse H. Lippincott, Trustee, further agn *s u 1 co sc t by memoran¬ dum at the foot of this agreement, that neither the said Two thousand live hundred shares of stock, nor any interest therein, shall be disposed of prior to mid fltli day of February, 1804, and that all divi¬ dends which may meanwhile lie earned and declared thereon or paid thereon to the Central Trust Com¬ pany of New York shall be immediately repaid and m refunded by said Central Trust Company of New / York to the party of the second part. '~-N^ Sixth. It is further understood and ngreod ns a \ condition attached to the transfer of said stock, \ and in which the party of the second part and each \ one of its stockholders has an interest, that until snid Oth day of February, 1804, said Jesse TI. Lip¬ pincott Trustee, and his successor or su'cessors, hereby waive and relinquish and shall I'ereaftcr waive and relinquish the right to any and all dm- dends upon said Two thousand five hundred shaies of stock and that, during snid time said party of , the second part, if it shall so elect, may declare 7T1 dividends upon the remaining Ten thousand shares / of stock only- \ Seventh. It is further agreed that until said shares of stock shall have been transferred to said Jesse TT. Lippincott, Trustee, or his successor or successors, the same shall not be voted upon at any meeting of stockholders of said party of the second ./ Eighth. This agreement, or a proper reference thereto, shall he entered upon the minutes of tli fill! first uml second parts respectively. Hi. Kndi nf Hu; parties hereto, for itself nml ifins, licrchy fnrtlier eovennnts nml agrees In ill' the other tliat it will at. any ami all times ter, on ileainml, make, execute, ami deliver N / h furl her or other instraineals of assurance, 'r papers, ns shall he necessary to rally elTeet rry oat (he provisions of this agreement and agreement of February Oth, 1SS9. •itness whereof, (lie parties hereto have this instrument lo he executed hy their onieers respectively, and their respective ite seals to lie hereto nlTlxcd the day and •st above written. Tlie North American Phonograph Co., By Jesse 11. Lippincott, Presl. I; Tin* North American Phonograph Co. nraled under (lie Laws of New Jersey, 1SSS.] IT. Fitzwilson, Sec’y. The New York Phonograph Co., ^ By John P. Haines, Pres. 1 I: The New York Phonograph Company iraled, 18S9. 1 ' ird Townley Haines, Sec’y. sse IT. Lippincott. Trustee, ns provided in going agreement, for good and vnlunhlc eon- on, on behalf of myself and my successor •ssors, hereby agree and consent that neither Two thousand five hundred shares of stock arty nf (lie second part, deposited ns in said ‘lit, provided, nor any interest therein, shall lsed of prior to the Oth day of February, 1 ISO!, and that all dividends which may meanwhile 776 lie earned and declared thereon or paid thereon to I lie Central Trust Company of New York, shall be immediately repaid and refunded hy s d Central Trust. Company of New York lo the party of the second part, and all rights to any dividends upon said stock so deposited arc hcrfcby waived and re- limpiishcd until the Otli day of February, 1394, and until that date, the party of the second part if it shall so elect, may declare dividends only upon (lie remaining shares of slock; and further, that said stock so deposited shall not lie voted upon at •in v meeting of stockholders of the party of the second part prior to said Oth day of February 1894, 770 and I do hereby in all respects confirm the forego- iag.ngroemoiit, so far as I have any interest therein or thereunder. Hated New York, June Kith, 1S89. Jesse H. Lippincott, Trustee. I a presence of : company of New Ymhlmrehy accepts the execution of the foregoing tarns and agrees to perform its provisions, and limel a knowledges the receipt of Certificate No 5o in th name of the Central Trust Company of Neu Yoih, 777 Trustee, for Two thousand five hundred share* o One hundred dollars each of the capital stock the New York Phonograph Company, deposited with it this 25tl, day of .T une, A. D 1889. Central Trust Company of New Y oik, By T3. F. Hyde, 2d Vice-President, endorsed: “B.” The North American Phono¬ graph Company to The New York Pl.onog.aph fVimpanv Agreement extending license, &c. Bated -Tune 13th, 1SS9. Deposited with Central 260 778 Trust Company of New York, to be delivered February Gth, 189-1. X Complainant’s Exhibit 48, April ltf, 1»U3, J. A. S., Ex’r. Una mcmuriuiduui of agreement, mudc the teutb day of January, issu, by and between Tbe North American monograph Company, a corporation duly organized under the laws of tbe State of New Jersey, party of tbe lirst part, and The Aletropol- itan Phonograph Company, a corporation duly or¬ ganized under the laws of the State of New York 7„g party of the second part, Witnesselh : Whereas, by an agreement heretofore made and entered into by and between the parlies hereto bearing date October 12th, 1888, it was among other things provided as follows: ‘twentieth. It is hereby understood and agreed “that the use of tin: Phonograph and Phonograph- “Graphophone, so far as the same, or either of “them, is applicable io watches, clocks, or in so far “as the use thereof has been conveyed by the said “Edison to Lowell O. Briggs and William W. “Jacques under and pursuant to a certain ngrec- 780 “|»ent bearing date the first day of Oetolmr, 1887, “is hereby excepted and reserved from the terms “of this agreement, nnd that this agreement shall “not '>e construed as in any way authorizing the “party of the second nart to use the inventions “covered hereby for such purposes. But it is fur¬ ther understood nnd agreed that 50£ of the profits “which may be received by the party of the first ‘part, or by Jesse IT. Lippincott, sole licensee of “the American Graphophone Company, shall he “divided in such equitable way ns may hereafter be “determined, among all the sub-companies licensed 781 -uv me party of tt.e first part.” And Whereas, it was tbe intention of the parties to said agreement (the parties hereto), and is be- lieved to be expressed by said agreement, that the profits so provided to bo divided were only such profits us should be derived by said party of the first part or by Jesse 11. Lippincott, sole licensee of the American Graphophone Company, from or by the use of the Phonograph and Phonograph- Graphophone, so far as the same, or cither of them, was applicable to watches, clocks or from, umlei or by virtue of the agreement between said Edison, Lowell C. Briggs and William M. Jacques; and 782 Whereas, through the omission of one or two words in the construction of said paragraph “Twentieth” of said agreement, it is thought tha such intention is not therein expressed as cleaily as NowOi’ereforc, for the purpose of setting at rest all doubts that have arisen or that may hercaft arise in respect to the construction or meaning of pi -“jssrS itrst'jM'pX. I.*** Spcc .ml «««' ”1 “» “T”"1 Si: graph of said agreement, the following is “Jacques under and pursuant to a certain agree- 784 “ment bearing date the first day of October, 1SS7 “is hereby excepted mid reserved from the terms "Hl tl,is agreement, . . that this agreement shall “not be construed ns in any way authorizing the “party of the second part to use the inventions “covered hereby for such purposes. But it is fur¬ ther understood and agreed that fifty per cent, of “the profits which may he received by the party of “the first part, or by Jesse If. Lippi ncott, solo “Licensee of The American C.raphophonc Com- “pnny, from or by reason of the use of the Phono- “graph and I’honogrnph-Gmphophone, or either of “them, so far as the same are applicable to watches "or clocks or by reason of the righls conveyed by “said Edison to Lowell C. Briggs and William W. “Jacques, ns aforesaid, shall be divided, in such “equitable way ns may hereafter ho determined, “among all the sub-companies licensed by the party “of the first pari” As hereby changed and amended said agreement of October 12th, 1888, is hereby ratified, confirm¬ ed and approved. In witness whereof, the parties hereto, have caused this instrument to be executed, each by its proper officers, and each lias caused its corporate 780 786 7 2G3 seal to be hereto affixed the day and year first 787 above written. Metropolitan Phonograph Go., By Clias. A. Cheever, President. Metropolitan [Sava] Phonograph Company. Executed by M. Pho. Co., Mcli. 7/89, J. A. B. Attest: , , Jesse Young, Secretary. The North American Phonograph Co., By Jesse H. Lippincott, 788 President The North American [Seaii.] Phonograph Co. Incorporated under the Laws of Now Jersey. 1888. Attest: Geo. H. Fltzwilson, Secy. Endorsed: The North. American Phonograph Company, with the Metropolitan Phonograph Com¬ pany. Supplemental Agreement Dated January 10th, 1889. 789 Complainant’s Exhibit 49, April 16, 1903, J. A. S., Ex’r. Exhibit 49 is “this agreement made this Ctli day of February, A. D. 18S9, by and between the North 'American Phonograph Company, a corporation • • * and John P. Haines,” a copy whereof - forms part of Complainant’s Exhibit 47, h.v and between tiio. North American Phonograph Company, a corporation duly organ- i*efl~umler 71i<*" laws of the State of New Jersey, owning or controlling certain patents of the United States of America and the Canadas for inventions of Thomas A. Edison appertaining to what is known as (he Phonograph and Speaking Phono¬ graph and acting under authority of and agreement with Jesse TT. Lippineolt, soli* licensee of the American Crnphophnne Company, a corporation duly organized under the laws of the State of West. Virginia, controlling certain patents of the United Slates of Americn for inventions of Alexander Ora- 2(15 ham Hell, Chichester A. Bell and Charles Sumner 79:1 Tain ter appertaining to what is known as the Grnphophone, lessor and licensor, party of the first part, and the Metropolitan Phonograph Com- pany, a corporation duly organized under the laws of the Stale of New York, lessee and licensee, party of the second part, witnesseth: Whereas, the lessor and licensor, party of the first part, owns or controls, or has the right to use, the Letters Patent of the United States granted to Thomas Alvah Edison and numbered ns follows: 200,521; 201,700; 213,554; 227,079; 382,414; 382,41.0; 382,417; 382,418; 382,419; 382, 402; 380,974; respectively, and the inventions 794 covered thereby, and owns or controls or has the exclusive right to use in the United States and Can¬ adas, and may hereafter own or control or have the \ exclusive right to use in the United States and 1 Canadas other inventions of Thomas Alvah Edison. I which are or may he embodied in or applicable to j Phonographs or Phonographic appliances; and Whereas, the lessor and licensor, party of the first part, acting under authority of nnd agreement with Jesse 17. Lippincott, sole licensee of the American Grnphophone Compnny, has the exclu¬ sive right to use or let or sell to others to use in the United States the inventions covered by the Let- 79g ters Patent of the United States granted to Alex¬ ander Graham Bell, Chichester A. Bell and Sumner Tain ter, numbered 341,212; 341,213 and the Let¬ ters Patent, of the United States granted to Chi¬ chester A. Bell nnd Sumner Tninter numbered 341,214 and the Letters Patent of the United States granted to Sumner Tninter numbered 341,287; 341, 28S nnd the Letters rntont of the United States granted to Charles Sumner Tninter numbered 374.133 ; 375,579; 3S0.535, respectively, and owns or has a right to use and may hereafter own or have 7U0 Mm right In use other inventions which nre or mil} he cnihnilictl in or applicable to the Gmphophonc olid Gruplinphonic appliances, which is to he here- otter known anil described mill designated ns llie riioungraph-Gruphophoiic, and desires to extend the use of Phonographs and Phonograph-Grnpho- phones leased and licensed by it, and of appliances therefor under and ]iursuant to (he grant of the exclusive rights to the party of the second part herein contained; anil Whereas, the lessee and licensee, parly of (he second part desires to obtain such exclusive rights to the use of Phonographs and Phonogmph-Grnplio- 7D7 phones, and for the use of appliances therefor, under lease and license from the lessor and licensor, parly of the first part, and to use and sublet the said instruments and to use, sell and dispose of appli¬ ances therefor within the territory hereinafter dc- . scribed under and pursuant to the terms, restric¬ tions and provisions hereinafter set forth. Now, therefore, for and in consideration of the sum of One hundred thousand dollars, to he paid to the parly of the first part by the parly of the second part, receipt of which is hereby ncknowl- ' edited, and for other flood and valuable considera¬ tions, and in consideration of the covenants and 70S 'Weenienls herein contained and the rental herein, nftreed to lie paid, it: is iiftrced by and between the parlies hereto, as follows: First. The rights hereby granted shall remain in force and this agreement shall continue until the 12th day of October, A. T). 1803, and for such further period ns hereinafter provided, unless sooner terminated as hereinafter provided, and shall extend and exist and he exercised and the instru¬ ments and property leased hereunder slinll he used only within the following described territory, namely. Hie Counties of New York, Westchester, V 1! ich niond, Queens, Suffolk and Kings in the State of New York, U. S. A. And the party of the first part hereby covenants and agrees that it will grant no other similar rights or any rights for the use of the Phonograph or I’honogrnph-Graphophonc or Phonographic or Phonogrnph-Grnphophonic appli¬ ances for the foregoing territory or any part thereof while this agreement shall remain in force, • Second. The instrument which has heretofore been known or designated as the “Graphophonc” shall at. all times and in all dealings, advertise¬ ments, agreements and’ business of the party of the second part he known, designated and described as the “Phnnogrnph-Graphophone” and the in¬ strument, heretofore known or designated ns the “Phonograph” shall continue to he so known, designated and described. In dealing with the public and sub-lessees the party of the second part shall and will at nil times offer and show both in¬ struments together with, absolute impartiality, leav¬ ing the person or peraons with whom it is dealing to make his or their own selection, and the party of the second part, its officers, agents and employees shall in no way press the introduction of one instrument at the expense of the other, and tlie commission or remuneration to agents, if any shall he employed, shall be the same on each instrument. Third. The party of the second part admits the validity of all patents relating to Phonographs, Phonograph-Graphophonesand appliances therefor now held or which may hereafter be held by the party of the first part, or under which it may hold licenses exclusive in their character, or under which its business may be conducted, and the validity of its rights under or title thereto, and will not' dispute the same or make use of, or bn interested in or cause others to make use of, or be interested in any Phonographs or Phonograph-Grnphopliones or 802 appliances I here for, or any instrument of a similar kind not leased, licensed, or authorized by the party of the first part, or its assigns. Provided, however, that the party of the second part may manufacture or be interested in the manufacture and sale of such I’honogrnphie or Phnnograph- firapbopbonie appliances ns may be approved of in writing by the party of the first part, provided, however, that no such authority shall be construed to apply to the manufacture of any articles the right to manufacture which is now or may here¬ after be vested in the American Grapliophonc Company or in the Edison Phonograph Company 808 of New Jersey, or the Edison Phonograph Works, pursuant to the several agreements now existing between the above-mentioned parties or either of them nnd the North American Phonograph Com¬ pany and Jesse TT. Lippineott, sole licensee of the American Ornphophone Company, or either of them. Fourth. The parly of the first part at the places where Phonographs or Phonograph-Grnphophones are manufactured nr from its depot of supplies situate nearest to the general office of the party of I he second part, will deliver to the party of the second part Phonographs nnd Phonograph-Grapho- j phones nnd supplies therefor, made and to he used i under the patents nnd rights herein described j j fluring the continuance of this agreement, nnd as herein set forth nnd permitted, nnd all Pho¬ nographs nnd Phonograph-Grnphophones nnd sup¬ plies therefor delivered to the pnrtv of the second part during the continuance of this agreement shall he deemed to he furnished hereunder. 'Each of said Phonographs nnd Phonogrnpli-Grnplioplionrs so delivered shall remain the property of the pnrft of the first part, and is nnd shall he hereby leased and the use of it licensed by the pnrty of the first part under said patents and authority aforesaid 805 now acquired or which may hereafter he acquired from the date of such delivery, upon condition and so long ns the rental therefor shall he duly paid to the party of the first part as herein provided, and so long as the provisions hereof are not violated, hut not longer or otherwise and subject to the terms of this agreement, the party of the second part may sublet or make sale of said instruments ns herein¬ after provided. Fifth. The pnrty of the second part shall pay and hereby agrees to pay to the pnrty of the first part a rental at the rate of §20 per year on nnd for each nnd every Phonograph, nnd on nnd for each 808 and every Phonogmph-Grnphophone delivered to it, payable in equal quarterly payments in advance, said rental to commence for each Phonograph or Phonograph-Graphophone on the first day of the first calendar month after its shipment by the party of the first part, and shall cense when nnd con¬ tinue until the instrument so leased shall be re¬ turned into the possession of the pnrty of the first part, and a notice by the pnrty of the second part to the pnrty of the first part of ten days in writing to its general office in the Pity of New York of its intention to deliver the snid Phonograph or Pliono- grnph-Ornphophonc, shall he considered ns a return 807 nnd delivery of same into the possession of the party of the first part. And said rental shall cease also whenever proof shall he given satisfactory to the party of the first part of the destruction of the same by fire or other accident beyond the control of the party of the second part. Sixth. The party of the second part may sable, t the Phonograph and Phonograph-Grnphophones leased to it by the party of the first part under this agreement, hut such subletting shall he sub- 944 808 jcet to the restrictions and provisions of this agree¬ ment applicable thereto, and shall be under a sub¬ lease or an agreement in writing, the form of which shall la1 approved by the party of the first part, and each and every such sublease or agreement shall expressly set forth that the Phonograph or Phonogrnph-Oraphophone so sublet is the property of the party of the first part, and that the same is loused rind licensed under the provisions of this agreement and not otherwise.' And no such suit lease shall ho made for any period less than three months. For each instrument sublet the party of tlio second part shall charge the snh-lcssce rental 809 »t the rate of forty dollars per annum (neither more or less), payable in equal quarterly pay¬ ments in advance. Seventh. The party of the second part shall lcccp all instruments leased to it under this agree¬ ment. in good working condition, and to that end shall keep in its employ a sufficient number of per¬ sons living at different points in its territory, who, while acting ns agents or solicitors for the party of the second part, shall have sufficient knowledge of I lie instruments to enable them to remedy any slight, defect in the working thereof, lint, whenever any part of an instrument shall wear out from nr- 810 dinary wear and tear by actual and legitimate use, it shall, upon its return to the parly of the first part, lie replaced by a. new part free of charge by the parly of (lie first part. When any part shall he broken nr rendered ineffective by the carelessness or neglect of tile parly of the second part or its sub-lessee, the same shall be replaced at. the ex¬ pense of the party of the second part or of its sub, lessee. Eighth. The. party of the first, part will, during the continuance of this agreement and the leases 271 thereunder, furuish to the party of the second part, 813 after requisition by it, all such extra cylinders for use on instruments leased and “special extras,” such as records of music, orations, novels or other appliances and parts of instruments applicable thereto, which shall be sold by tiie party of the second part, at prices which shall lie fixed from time to time by the party of the first part Such prices shall lie uniform iu the case of each sub-company acting under the authority of the North American JMuimigrnph Company, or of .Tesse If. Lippincott, sole licensee of the American Orapliophone Com¬ pany, and the party of the second part shall and It hereby ngrhes to pay the party of the first part for 812 all extra cylinders, “Special Extras,” parts and appliances so furnished, prices which shall be fixed at twenty per cent, less than the prices at which tiie same shall be sold by the party of the second part to others, payments to he made by the party of tiie second part to the party of the first part, on file 10th day of each month for ail such cylinders, “Special Extras.” parts and appliances -delivered during the previous month. Ninth. Tiie party of the' second part shall give immediate information and notice to the party of flic Hi's!, part whenever said party of tiie second part, shall know that any one in its territory is 313 using air instrument- or tiny appliances thereof nr therefor which shall ho an infringement of the pat¬ ents or rights owned or controlled by the party of the first, part, and upon receipt of such information the party of (lie first.' part will. at. its own expense, at once, institute legal proceedings nr cause them to be instituted for the protection of tiie patents or rights owned or controlled liy it. 'And the party of the first, part agrees at. its own expense to defend the parly of the. second part against, all suit, for infringements by reason of tlio 946 272 * possession, leasing, use or sale of said instruments, supplies or appliances and to pay all liual judg¬ ments rendered in such suits, provided the party of the tirst part shall have notice of such suit and opportunity to defend the same, such notice to lie given in time to allow the party of the first part to make answer, pica or other appropriate defence to the original lull, petition, complaint or other original pleading and to defend through any counsel of its own selection. And the party of the second part, shall not. he at liberty to defend any such suit or legal proceeding on its own. behalf, until the parly of the llrst. part shall have refused to do so upon demand. And the parly of the first part, further agrees that it will protect, indemnify and save harmless the parly of the second part, by reason of any damages or expenses which it may suffer, incur or sustain, growing out of any proceedings at law or in equity, or any litigation which may lie brought against, or which limy injuriously affect the party of the second part in the quiet title to or possession or enjoyment of the rights and interests hereby granted, or intended to lie granted, provided tile party of the first part, shall have opportunity to defend, as aforesaid, any suit nr proceeding brought against, the party of the second part. . Tenth. If on the first day of .fauiiary, ISfiO, or at. any time thereafter there shall lie in any .portion of the territory covered by this agreement a de¬ mand for Phonographs or Phnungraph-Graphn- pliones, Special Extras or appliances which the party of the second part shall neglect, or fail to take appropriate measures to meet, the party of the first part, may give written notice thereof to the parly of the second" part, and ir at the end of thirty days thereafter tile said neglect or omission still continues the party of the first part, may, so long 947 as such default shall continue, but to the extent 817 only of sucli default, proceed to supply the demand through agents or otherwise without liability to the party or the second part, provided that course shall not interfere with the delivery to the party of the second part of instruments, special extras or appli¬ ances, for which requisition shall lie made by it under the terms of tins agreement. Hut: it is expressly understood and agreed that if at any lime after one year from the date of this agreement the North American Phonograph Com¬ pany shall lie unable or shall fail to deliver to the parly of the second part instruments and supplies for which said party of the second part shall have made due requisition upon the party of the first part 818 as such requisition is provided to lie made in the. case of the I’hoiiograph-firaphophoiie by .Tessc H. Lippincott upon the American Graphophoiio Company pursuant to the agreement between said- Lippincott and said American Grnpliophone Com¬ pany under agreement dated March 20th, 1888, and in ease of the Phonograph as provided it shall lie made by die Edison Phonograph Company upon said Thomas A. Edison or the Edison Phonograph Works pursuant to the agreement of October 2S, I. 887, or by the North American Phonograph Com- ’ jinny upon said Thomas A. Edison or the Edison Phonograph Works pursuant to the agreement of 819 August 1st, 1888, and subject in the case of the Plio- ungrnph and Plionograph-Graplioplione to the sev¬ eral terms of said agreements affecting such neglect or failure to supply either of said instruments, then the party of the second part shall have the right which the said North American Phonograph Com¬ pany, or .Tesse TT. Lippincott, sole licensee of the American Grnpliophone Company would then have to manufacture or cause to be manufactured inst.ru- .nienfs or sujiplies hr both necessary to fill so much ol such requisition ns the said North America n Pho¬ nograph Company, ur Jesse II. Lippincott,sole licen¬ see of tile American tlraphophoiie Company shall be unable or shall fail to supply, and all costs of said instruments or supplies to the party of the second part over and above the cost thereof as de¬ termined by the rentals of Phonographs or l'honn- grah-tiraphophoiies or I he prices of special extras and appliances as herein provided to the party of the second part, shall lie home by the party of the first part. Eleventh. lr on the first day of January, 1811(1, or at any time thereafter, the results of exclusively leasing instruments shall he unsatisfactory to the party of the first part, it. may require the party of the second part to give the public the option of either leasing or purchasing the instruments, and in such event sales shall he made at such reason¬ able prices which shall lie fixed by the party of the first part, provided, however, that if such require¬ ment shall he made in the case of any one sub- eompuuy, it shall he operative in the case of all sub-companies acting under the authority of the 'North American Phonograph Company, or of Jesse IT. Lippinrott, sole . . see or the American Oraphophoue Company. From tin* price received, from any instrument so sold there shall he first deducted and naid to the narlv of the first nnrl: an V all circulars, card and advertisements, there shall 8211 appear and the party of the second part shall set forth, as prominently as its own corporate name and in connection therewith wherever it shall occur, the following “.Metropolitan Phonograph Com¬ pany, acting under authority of the North Ameri¬ can Phonograph Company, and Jesse M. Lippi n- cott, sole licensee of the American Craphophone Company.” Thirteenth. The party of the first part having made liberal provisions for conducting experiments, . looking towards the improvement and perfection of the Phonograph and I’lumograph-Uraphophonc h.v the respective inventors thereof during the next fifteen years or thereabouts, will be entitled to the ownership, use or control of whatever inventions are made and patented hy such, inventors, and the iustru meats leased or to he leased under this agreement shall have, the benefit of all improve¬ ments and inventions thus secured; and any other improvements and inventions which the party of the first part mav become entitled to the use, ownership or control thereof during the term of this agreement or any extension or renewal thereof ; but it is expressly understood thnt no new patented invention of the. said Edison shall be used or sold with the Phonograph-Grnphophone, and no new 1 indented invention owned or controlled now or S20 riionugmph-Uruphophone, as the same is now known, the question of such additional charge, if any, shall bo left to an arbitration, the party of the first part choosing 0110 arbitrator and thu party of the second part another, and the two, if they fail to agree, a tided to he chosen by the two arbi¬ trators, and (lie decision of such arbitration or of a majority I hereof liias made shall be bindiag upon the parties hereto. Fourteenth. If the party of the second part shall fail to pay to the parly of the first part any sain or sains of a . . which may be due under this agree¬ ment, and if said default shall continue Tor the pe- 827 riod of thirty days after the same shall have become payable, and after written demand tlierefor, or if I lie party or the second part shall violate any other of the terms or conditions of this agreement, and shall persist in such default, violation or neglect, or fail to remedy or repair the same Tor sixty days after written notice thereof from the party of the Urst. part, or ir the party of the second part shall become bankrupt or insolvent and shall so continue for the period of thirty days, then the party of the first part, may, if it shall so elect, by written notice to the party of the second part (or those in charge of any of its offices') immediately terminate 828 all the rights granted by the parly of the first part hereunder and take possession of and remove all Phonographs and Phonogrnph-Ornphophones, and supplies tlierefor and for Unit purpose may enter the premises of the party of the second part and of all persons claiming under it, and may collect from any sub-lessee or purchaser all sums then or there¬ after duo to it, or to, the party of the second part for the use or purchase of any instruments, or for supplies therefor, or it may. so long as it shall see fit, leave in the enjoyment and use of any Phono¬ graph nr Phonogrnph-Graphophohe, any lessee or other person in actual possession thereof, or by or 820 from whom any part of the purchase price is un¬ paid, and collect from him or them in such sums as may then and thereafter be or become due for the use or purchase of the Phonograph or Phonograph- tirnphophone, and for that purpose shall bo entitled to and may take possession of the premises of the party ofTlie^econtl"pin,iruS(rd~for"cm,rying^on" 1 ts business and occupy and conduct the same. The property soTaljeimnd-whiclrdocs'not belong to the party of the first part, or revert to it hereunder, may lie returned within six months from the taking, in which case the party of the first part shall pay to tlie party of (he second part a reasonable com- pensation for its use, or the party of the first part may retain the same as its own property, and pay therefor a reasonable price (not exceeding the actual cost, thereof) within seven months after the taking, and shall account to the party of the second part for all the sums collected which shall have _ accrued before the party of the first pnrt became so entitled to possession, deducting all expenses incident thereto, and all sums which may bo due to the party of the first part. The party of the first part, also expressly reserves to itself all its rights and remedies at law and in equity, under the patent laws or otherwise, including the remedy by injunction against, the party of the second part, nr those claiming under it, for the use of any of its patented inventions or instruments not. authorized by a subsisting license hereunder, or for the viola¬ tion of any other of its rights. The party of the first pnrt may, in such event, at its own cost and expense, also use the name , of the party of the second part, to protect its interests and to enforce its rights hereunder. And the said party of the second pnrt hereby agrees to execute any and all assignments in accordance herewith, and in further- 27S ante of tbe rights of the party of the lirst purt under this paragraph. Fifteenth. And it is further hereby expressly covenanted and agreed by and between the parties hereto that at the expiration of tbe live years herein limited as the life of this agreement, the party of tbe second part shall in such manner as may be in accordance with law, increase its capital stock to the extent of twenty-live per cent, of the par value thereof, and shall issue and deliver the whole of such incrunsiyof full-bahl nnasscssable stock to the party of the lirst part or to Jesse IX Lippin- cott, Trustee, or his successor, ns the party of the first part may direct, and the party of the first part shall in consideration therefor extend this agreement and the rights 'hereunder to March 20th, 1003, and .for, such further time at the option of tho party of the second part, as shall be equal to the time for which the party of the first par); shall be¬ come authorized to gran! any exclusive license., mi¬ ller any patent or patents relating to Phonographs or T’honograph-Orriphnjihnnes or improvements therefor. But it is further understood and agreed by and between the parties hereof that if before the expiration of said five years from tho 12th day of October, 188S, the said Metropolitan Phonograph Company, party of the second part, shall elect, to increase its capital stock pursuant, to the terms of this agreement and shall deposit the said §250,(100 (2,500 shares) of capital stock with the Central Trust Company of the City of New York for do- livery to tbe said North American Phonograph Company, party of the first part, or to .Tosse TT. Linpincott, Trustee, or his successor, as the party of tbe first, part mav direct, at the expiration of said five years, that then and in that event and upon due notice to tije said North American Phono- n-raph Company, party of the first part, of 279 the increase of said capital stock and the 835 deposit of said shares with said Trust Company as aforesaid the North American Phonograph Com¬ pany, party of the first part, shall forthwith de¬ liver to the said Trust Company a license to the party of the second part similar in form to the license herein granted, for a further period from the expiration of said five years, namely, until the 26 th day of March, 1903, and for such fur¬ ther time at the option of the party of the sec¬ ond part as it may be authorized to extend said license as aforesaid; the deposit of said shares of capital stock and said extended license to be upon tile following conditions: That at tbe oxpira- 886 lion of said five years . ther5al?HEni8t Company shall deliver to the North American Phonograph Company, parly of the first part, or to the~said Jesse H. Lippincott, trustee, _or JiJs_successor, as the party of the first part, may diroctr'said 2", 500 shares of stock of the Metropolitan Phonograph Company, parity of the second part, and said Trust Company shall deliver to the Metropolitan Phonograph Company, party of the second parr, its successors or assigns, (lie said extended license, or the snid_cniiipaiyvslinll be immediately entitled lo the possession of tile said "exi lend ed ’ T irT1 Tise . o 1 1 (he delivery aforesaid of said 2,500 shares of slock? 837 T11 the event of such present, delivery of such shares of slock to the North American Phonograph Com¬ pany, party of the first, part, or to Jesse TT. Tap- pi ncott, Trustee, nr his successor, as the partv of the first part, may direct, said .party of the first pnrt.nnd said trustees shall agree with the party of the second part that, neither it nor lie will dis- .nose of the said shares of stock. during the said five vears, or of anv interest therein, and that all dividends which may he earned and declared upon said 2,500 shares of stock during the snid 344 company shall be likewise granted to the party of the second pact. In witness whereof, the parties hereto have caused this instrument to lie executed, each by its proper ollieers. and each has caused its corporate seal to he hereto allixed the day and year lirsl above written. The North American Phonograph Co., Ii,v Jesse II. Lijipincott, [Ska l,.] President. Attest,: (ieo. IT. Fitzwilson, Secy. 34fj Metropolitan Phonograph Co¬ lly A. I,. Taylor, [Seat,.] President. Attest : Timothy Cornwell, y Secy. This agreement, mndo this 23rd day of June. A. D. 1800, by and between The North American. "Phonograph Company, a corporation duly organ¬ ized under the Laws of the State of New Jersey, party of tile first part, and The Metropolitan Phonograph Company, a corporation duly organ¬ ized under the Laws of Hie State of New York. 840 party of the second part, wit.ncsscth : Whereas, heretofore and on or about the 12th day of October, A. D. 1888, the party of fully appear by reference to said agreement, a copy uf which is hereto annexed with the intent that the same shall he taken and considered in connection herewith; and Whereas, by said agreement, dated October 12th, 1S88, (executed by the party of the first part here¬ to as the party of the first part therein, and ex¬ ecuted by the party of the second part hereto as the party of the second part therein), it was among oilier things provided as follows: “ fifteenth. And it is further hereby expressly “covenanted and agreed by and between the par- “ties hereto that at the expiration of the five years “herein limited as (lie life of this agreement, this “party of the second part shaU in such manner ns “may lie in accordance with law, increase its capi- “tal stock to the extent of twenty-five per cent, of “I he par value thereof, and shall issue and deliver “the whole of such increase of full paid unnssessa- “ble stock to tiie party of the first, part, or to Jesse “II. Lippinentt, Trustee, nr his successor ns the “party of the first part may direct, and the party “of tiie first part shall in consideration therefor “extend this agreement and the rights thereunder “to March 2fi, 100:1. and for such further, time at, “tin- option of the party of the second part ns shall “lie eipiul to the time for which the party of the first ( “part shall become authorized to grant any ex- “elusive, license under any patent, or patents re- “biting to Phonographs, or Phonograph-Ornphn- “phones or improvements therefor. Put it. is fur- “(her understood and agreed by and between the “parlies hereto that, if before the expiration of said “five years from the 12th day of October, 1SSS, the “said Metropolitan Phonograph Company, party of 959 SCO “of i'll Qi till slock with tin! Cent ml Trust, Company “of tlm City of New York for delivery to the snitl “North Anmricmi Phonograph Company, pnrty of “the first purl, or to .fosse II. Lippincnlt, Trustee, “or his successor, as tin* party of the first part may “flirect. at the expiration of said five years, that “then and in that event, and upon due notiee to the “said North American Phonograph Company, “parly of the first part, of the Increase of said “capital stock and the deposit of said shares with “said Trust Company as aforesaid, The North “American Phonograph Company, party of the first “part, shall forthwith deliver to the said Trust Com- 8C1 pany a license to the party of the second part “similar in form to the license herein granted, for “a further period from the expiration of said five, “years namely, until the 2(llli day of March, 1903, “and for such further lime at the option of the “party of the second part ns it, may he authorized “to extend such license ns aforesaid ; the deposit of “said shares of capital stock and said extended “license to ho upon the following conditions: That at “the expiration of the said five years the said Trust “Company shall deliver to The North American “Phonograph Company, party of the first part, nr “to (lie said Jesse TT. Lippinrotf, Trustee, nr his 862 “-successor, as the party of llu- first part nitty direct, “said 2,511(1 shares of stock of the Metropolitan “Phonograph Company, party of the second part, “and said Trust Company shall deliver to the “Melrnpnlilnn Phonograph Company, parly of the “tended license, or llu* said' 'company shall lie inline- “din I el v entitled to the possession of the said ex* “tended license on the delivery as aforesaid of said “2,5(10 shares of slock. In the event of such present “first part, or to Jesse H. Lippincott, Trustee, or his' “successor, us the party of the first part may direct, “said party of the first part and said trustee shall “agree with the party of tlm second part that “neither it nor he will dispose of the said shares of “stock during the said five years, or of nny interest “therein, and that all dividends which may he “earned and declared upon said 2,500 shares of “stock during the said five years shall he repaid to “the party of the second part;” and Whereas, the party of the second part hereto has increased its capital stock in the amount of §250,- 000 (2,500 shares) and is desirous of making the deposit of the same in the manner provided for in said agreement of October 12th, 1888; and Whereas, the parties hereto are desirous of curry¬ ing out the provisions of said agreement of Octo¬ ber 12th, 1888, mid of depositing said shares of the capital stock of the pnrty of the second part and the said extended license, ns in said agreement pro¬ vided; nml Wherons, the party of the first port hns desig¬ nated and approved the Central Trust Company of New York, ns the place for said deposit, and 1ms ' directed that said stock lie deposited for delivery _ to Jesse H. Lippincott, Trustee, or his successor, nt the expiration of five years from the date ofjmid j agreement; and Whereas, simultaneously with the execution of this agreement between the parties hereto mid its delivery In the Central Trust Company of New York, the pnrty of the second part has deposited said shares of its capital stock, as is evidenced by (lie receipt of snid Central Trust Company of New York, endorsed nt the foot of this agreement. Now, therefore, in consideration of said agree¬ ment of October 12tli, 1S88, nnd of the covenants and agreements therein contained and of the sum ni> (lollin' liy Mil'll to I lie other in hand paid, il >reby agreed hy and between (he parlies hereto illows: rst. It is agreed I hat said Tivenfy-live hundred es of stock of the parly of the second part willi deposiled shall forthwith lie Iransferred nil in (tie name of the Central Trust Company 'cw York, provided Unit said transfer has not idy been made, the same to he held hy said nil Trust Company of Yew York upon the is herein staled and as provided for in said ement until the 12th day of Orlnl.er, 180!$. ■eoiid. It is farther agreed that on the 1 21 h day ictnber, 1803, said Central Trust Company of York, shall, without furl her direction from the hen Unit this agreement shall become and shall ■onfer upon and shall folly and entirely vest in the •arty or the second part an extension of the rights {runted to and conferred" upon the party of the" lecoml part hy said agreement of October 12th,, 888, fora further period and until the 20th day of II arch, i;i03, and for sncli farther time as the party if the first part may he authorized to extend such i cense ; .subject, however, to the covenants and igreements of said agreement of October 12th, 1888', is fully and entirely as if said agreement had been n the first instance made to cover the period of lie extension granted hereby, as well ns the period iriginnlly thereby fixed and limited. Fourth, ft is hereby further agreed between the uirties hereto, and the said Jesse IT. Uppincott, 'ruslee, further agrees and consents, hy memornn- lum at the foot of this agreement, that neither the aid Twenty-live hundred shares of stock, nor any nterest therein, shall he disposed of prior to said 2th day of October, 1S03, and tlmt all dividends I'hicli may meanwhile he earned and declared hereon or paid thereon to the Central Trust Com- inny of New York shall be immediately repaid and efiinilcd hy said Central Trust Company of New. fork to the parly of the second part. Fifth. Tt. is further understood and agreed ns a onditinn attached to the transfer of said stock, and n which the party of the second part and each one if its stockholders has an interest, that until said 2lh (lay of October, 1803, said -Tesse TT. Tdppin- ott, Trustee, and his successor or successors, liorc- iy waive and relinquish and shall hereafter waive lid relinquish the right, to any and all dividends ipon said Twenty-five hundred shares of stock and hat during said time said party of the second mrt. if it. shall so elect, mav declare dividends un- corporate seals to be liereto affixed, the day and year first above written. The North American Phonograph Co., By Jesse H. Lippiucott, Brest. The North American Phonograph Co. [Sum,.] Incorporated under the Laws of New Jersey. 1S8S. Attest: (ieo. H. Fit/. Wilson, Secy. Metropolitan Phouogrnpli Co., By Clms. A. Olieever, President. .Metropolitan [Skat..] Phonograph Company. Attest: Felix Gottsclialk, Secretary. I, Jesse If. Lippiucott, Trustee, as provided in the foregoing agreement, for good and valuable consideration, on behalf of myself and my successor or successors, hereby agree and consent that neither the said Twenty-five hundred shares of stock of the partv of the second part, deposited as in said agree¬ ment provided, nor any interest therein, shall he disposed of prior to the ISHrdny of October, 1803, and that all dividends which may meanwhile be earned and declared thereon or paid thereon to the Central Trust. Company of New York, shall be immediately repaid and refunded by said Central Trust Company of New York to the party of the second part, and all rights to any dividends upon said stock so deposited are hereby waived and re¬ linquished until the 12th day of October, 1893, and tntil. that date tins imrty of the .second part, if it hall so elect, may declare dividends only upon the umuiuiug shares of stock; and further, that said tock so deposited shall not lie voted upon at any' noeting or stockholders of the parly of the second tart prior to said J'Jtli day of October, 18!)3; and 1 lo hereby in all respects confirm the foregoing igreement, so far as 1 have any interest therein >r thereunder. Dated New York, dune -3rd, I Silt). Jesse II. IJppincott, Trustee. [a presence of: M. W. Nolan. TIic* Central Trust. Company or New York hereby iccupls the executiolu of the foregoing trust and igrees to perform its provisions, and hereby ac¬ knowledges the receipt of certificate No. B 125 in the name of the Central Trust Company of New York. Trustee, for Twenty-live hundred shares of line hundred dollars each of the capital stock of the Mctropoitnn Phonograph Company deposited witli it this eighteenth day of July, A. D. 1800. Central Trust. Co. of New York, By Ct. Sherman, Y.-President. Endorsed : “A” Special. The North American Phonograph Company to The Metropolitan Phon¬ ograph Company. Agreement extending License, 201 Complainant’s. Exhibit 52, April 16, 871 1903, J. A. S„ Ex’r. Know all men by these presents, that the North American Phonograph Company does hereby ap¬ prove of and consent to the execution of the agree¬ ment between the Metropolitan Phonograph Com¬ pany and (lie New York Phonograph Company, tearing date the iOtli day of May, 1S00, a copy whereof is hereunto annexed, and does hereby consent to and approve of the consolidation therein provided for upon the ierms therein set forth. In witness whereof the North American Phono¬ graph Company has caused its corporate seal to be hereto affixed this tenth day of May, in the year 872 one thousand eight hundred and ninety and 1ms caused the same to be attested by the president of said company. In the presence of: M. W. Nolan. (Corporate Seal.) Attest: i" Jesse H. Lippincott, President. City and County of New York, ss.: On this loth day of August, 1S90, beroTe me per¬ sonally appeared Jesse IT. Lippincott. with whom I am personally acquainted, who being bv me duly 878 worn did depose and say that he resides in the City of New York, that lie is the President of the North American Phonograph Company, the corpora¬ tion described in and which has executed the fore¬ going instrument; that lie knows the corporate seal of said company; flint (lie seal affixed to said instrument is the seal of said company and was so affixed by authority of the Board of Trustees of said Company, and that lie the said Jesse H. Lip- pincott the president thereof dill sign his name thereto by tlie like authority. [Seal.] Michael Wi Nolan, Notary Public, Kings County. Certificate Died in New York County. State of New York, 1 S8 . City and County of New York, $ I Edward P. Reilly, Clerk of the City and Coun¬ ty of New York, and also Cleric or the Supreme Court for the said City and County, tha same being a Court of Record, do hereby certify, that Michael W. Nolan lias filed in the Clerks’s Olllec of the County of New York, a certified copy of his ap¬ pointment as Notary Public for the County of Kings with his autograph signature, and was at the time of taking the proor or acknowledgment of the annexed instrument, duly authorized to take the same. And further, that: I am well acquainted with tile handwriting of such notary, and verily be¬ lieve the signature to the said certificate of proof or acknowledgment, to be genuine. In testimony whereof, I have hereunto set. my hand and affixed the seal or the said [Seal.] Court and Comity, the loth day of Au¬ gust, 1890. i Edward P. Reilly. Clerk. MEMORANDUM OP AGREEMENT. ,293 ropolitan Phonograph Company, of the first part, 877 and the New York Phonograph Company, a cor¬ poration organized under the same Acts and the Trustees of this said The New York Phonograph Company, of the second part, in manner following, that is to say: Whereas, the two corporations above named have been respectively organized for the purpose of ac¬ quiring licenses or territorial grants of exclusive rights relating to the Phonograph, Phonograph- (iraplioplione and sinilur machines, and for the pur¬ pose of leasing or otherwise disposing of such ma¬ chines and appliances connected therewith and manufacturing the same, and for other purposes specified in the articles of incorporation of said 878 companies respectively: And whereas, the said -Metropolitan Phonograph Company lias acquired from The North American Phonograph Company, a corporation organized un¬ der the laws of the State of New Jersey, the exclu¬ sive right to carry on its said business within the Counties of New York, Westchester, Richmond, Queens, Suffolk, and Kings, in the State of New York; And whereas, the said The New York Phono¬ graph Company has acquired from the North Amer¬ ican Phonograph Company the exclusive right to carry on its said business within the whole of the 879 State of New York, excepting the Counties of New York, Westchester, Richmond, Queens, Suffolk and Kings in said State of New York ; And whereas, the said Metropolitan Phonograph Company and the said The New York Phonograph Company are at present carrying on their respec¬ tive operations within the territories to which their rights respectively appertain as aforesaid : And whereas, it is deemed expedient, in view of (lie location of the territories occupied by said 201 88U companies, aud included within their operations respectively, and the close relations necessarily re¬ quired to exist between the management of the two corporations for the purpose of the advantageous und harmonious conduct of their respective busi¬ nesses, to consolidate the two companies into a sin¬ gle corporation, and it is believed that such consoli¬ dation would be to the' advantage of all the stock¬ holders in both of said corporations, and that the objects of both companies would be better pro¬ moted and the business interests of said' companies advanced by their union under a single manage¬ ment; 881 And whereas, The North American Phonograph Company— the licensor of said Metropolitan and the New York Companies, has consented to and ap¬ proved of such consolidation and of this agreement for the same: Now, therefore this agreement witnesseth : That the said Metropolitan Phonograph Company and the trustees thereof as above named, and the said The New York Phonograph Company and the trus¬ tees thereof as above named, do hereby make and enter into this agreement under and in pursuance of the provisions of an Act of the Legislature of tin; .State of New York, passed .Tune 12th, 1S07, and the 082 ac*s a,nolul',ig and extending the same, for the con¬ solidation of the said Metropolitan Phonograph Company and said The New York Phonograph Company, prescribing the terms and conditions thereof, the mode of carrying the same into effect, and other particulars required by law as follows: First. The said two corporations shall be con¬ solidated into a single corporation and the name of the new corporation shall be “New York Phonograph Company.” Second. The number of trustees of suid new corporation shall be seven. Third. The names of the trustees who shall man¬ age the concerns of the new company for the first year, and until others shall be elected in their places, shall be; John P. Haines, of Toms Jtiver, New Jersey; John I). Chcever, of the City of Now York; Diehard Townley Haines, of the City of New York; Noah Davis, of the City of New York; William Fahne¬ stock, of the City of New York; W. Seward Webb, of the City of New York, and John L. Martin, of the City of New York. Fourth. The term of existence of such new com¬ pany shall be fifty years from the fourth day of Oc¬ tober, one thousand eight hundred and eighty- eight h ifth. The names of the town and county in which the operations of the now company are to be , carried on are, the Village of Tnrrytown, Town of Green burgh and County of Westchester, in the State of New York. Sixth. A statement of the affairs of each of said companies shall be made to, aud examined, audited and approved by the officers of the other company. Seventh. All the assets of each company shall be inventoried, and all the property of the two com¬ panies, including cash, stock in the treasury, bills receivable, hook accounts, merchandise, books, of¬ fice fixtures and furniture, and all other property, rights, franchises, contracts, agreements, leases and material whatsoever shall be transferred to and become the property of the new corporation. Eighth. The amount of the capital stock of the new company shall equal the aggregate amount of 296 886 the capital of the two companies to be consolidated, to wit. : The amount of Two million, live hundred thousand dollars and shall be divided into twenty- five thousand shares of One hundred dollars each. Ninth. Tlie capital stock of the said new com¬ pany shall be issued in exchange for the stock ol the old companies, share Tor share, the certificates of stock in the two companies consolidated to be re¬ ceived and stamped in such manner as to show tho issue of the new certificates in lieu thereof by the treasurer of the new company, who shall issue the new stock of the new company in lieu thereof upon 887 thC rL'Ct>ipt b-v Ilim of the 01,1 certificates. This is¬ sue and exchange is to include the stock held at the time of such consolidation in the treasury of the • two companies consolidated, which stock shall be transferred to the treasurer of the new company and when stamped by him new stuck of like amount and value shall lie issued to such treasurer in lieu thereof, and held by him in the treasury of the new Company; it being understood and agreed that tlie amount of stock which shall he in the treasury of the Metropolitan Phonograph Company at tlie time of such consolidation and transfer to the treasury of tlie new company, shall lie not less than twenty-six thousand seven hundred dollars, and ,S8 that the amount of stock which shall lie in the treasury of Tlie New York Phonograph Company at tlie time of sneli consolidation mid transfer to the treasury of the new company shall lie. not less than seventy-five thousand dollars, so that the amount of the capital stock of said new company which shall lie issued to the treasurer thereof in exchange for said old Treasury Stock shall he the sum of One hundred and one thousand, seven hun¬ dred dollars. Tn witness whereof, the said Trustees of the Metropolitan Phonograph Company have caused I V these presents to be executed by a majority of said 88!) Hoard or Trustees, and the Trustees of The New York Phonograph Company therein named have caused these presents to be executed by a majority of the trustees of said New York Phonograph Com- [Kiny, and the said Companies, parties hereto have caused the corporate seals of said companies to lie hereunto nilixed and the same to lie attested by the presidents and secretaries of said corporations respectively, tlie day and year first above written. Sealed and delivered in the presence of L. E. Evans. .7. .7. Gunther. [Seal.] 800 A. I,. Taylor. [Seal.] Felix Gottschnlk. [Seal.] Clins. A. Cheever. [Seal.] •Tames 77. Metcalf. [Seal.] [CoiirmiATB Seal.] Chns. A. Cheever, President. Attest: Felix Gottschnlk, Secretary. J. D. Cheever. [Seal.] Win. Fahnestock. [Seal.] Jno. P. Haines. [Seal.] Tiichnrd Townley Haines, [Seal.] [ Corporate Seal.]' •Tno. P. Haines. President. Attest : Tlichnrd Townley Haines, Secretary. Citv and Conntv of New York, ss. : On this 24tli. day of June, 1890. before me person¬ ally appeared Lemuel E. Evans, the subscribing i02 witness to the foregoing instrument, with whom r mu personally acquainted, who being by mo duly sworn, did depose mid sn.y, tlmt he resides in the town of East Orange, New Jersey, that he knows J. J. Gunther, A. L. Tnylor, Felix Gottschnlk, Ohas. A. Cheever, James B. Metcalf, J. D. Cheeverj Win. Fahnestoek, John 1\ TTaines and Biclmrd Townley Haines, the individuals described in and wl'o >inve executed the foregoing instrument; that lie was present and saw them execute the same and thereupon became the subscribing witness thereto. St.urges M. Jtorelion.se, fSn,u' ] Notary Public, 18 Comity of New York. City and County of New- York, ss. : On this 24th day of June, 1800, before me person- ally appeared Charles A. Cheever, with whom I am personally acquainted, who being by „,e duly sworn, did depose and say, that lie resides in the < if.v of New York; that, he is the President of the Metropolitan Phonograph Company one or the Corporations described in and which' has executed the foregoing instrument, that lie knows the cor¬ porate seal of said company; tlmt the seal affixed to said instrument is the seal of said company and j "’i,s so a tTlxcd by authority of (lie Board of Tins- tees of said company, and tlmt lie the said Charles A. Cheever the president, and Felix Gottscbalk the Secretary thereof did sign their names thereto bv the like authority. S targes If. Morehouse, ^Seai,'1 Notary Public, County- of New York. State of New York. , City and County of New York, f Sfl” T, Edward F. Noilly. Clerk of the City and County of New York, and also Clerk of Hie Supreme Court 2r the mecliiig in the form already set forth in icse minutes, together with proof of the due and roper publishing and mulling thereof, to wit, tlie Oidayitor Richard Towuley Haines, that he’ hud eposited in the Post Ollice in the City of New «rk on the 23rd dn.v of May, 1890, being more than » days prior to the dale of said meeting, copies of ich notice addressed to eaeli of the stockholders of lis company at. their place or residence known to ic secretary; also aflidiivifs of publication of such dice to 1 he stockholders, for more than three sue- issive weeks prior to said meeting, i„ The Albany mies, die State paper, and in die Poughkeepsie ogle, being one of the newspapers published in e County of Dutchess in tlie Stale of New York, which said corporation Ims its place of business. The. chairman then presented and read the agrec- ent of the Metropolitan Phonograph Company idi the New York Phonograph Company for the nsolidndnn of said companies, which lias been nde and entered info by the trustees of said com¬ mies respectively, subject to die sanction and np- oval of die stockholders, a copv of which a "r co¬ ni t is as follows: Memorandum of agreement, made this lentil day May, one thousand eight hundred and ninety by d between die. Metropolitan Phonograph Com- liy, a corporation organized under die act entitled n Act to .authorize the formation of corporations • manufacturing, mining, mechanical nr olienii- 1 purposes” passed February 17th, ISIS, and the Is amending or extending the same, and die trus- k of said Molronolilan Phonoo-ramli CViinnniiv. im.l (lie trustees of I lie suiil The New Verli Company, or the seeouil part, j„ man blowing, Hint is to sn.v: erens: The two corpora lions above nameil '"'C" respectively -< irnphophone nml snnilnr liiuehines, nml for nil-pose of leusin- or otherwise disposing of nincliines nml appliances eouneeleil therewitl "nniifnet urin- Ihe siinie, nml for other pur specified in the Articles of Incorporntion ol .•oinpniiies respectively, d whereas, the said Mel poll I n ^ ,] inii.v tins acquired from the North American Oftrnph Compniiy, n corporation organized mi lie Inws of the Stale of New Jersey" the exelu 'iftht to carry on ils said husiness -within tin ics of New York, AYest Chester, Richmond ns, Suffolk and Kings, in the Slate of New .1 whereas, the said The New York Phono- I Company has acquired from (lie North ‘“‘an Phono-rapli Company the exclusive to carry on its said husiness within tile whole e Slate of New York, except in- the counties of iorlc, AVcKlcliosfor, TJiclmiond. Queens, Suf- mid Kinjrs in said Slate or Xe\v York Kl whereas, the said Metropolitan Phono-rap), mny and the said The New York Phono-ranh ul whereas, the North American Phonograph ’"“•v M"“ . . sin- or said Metropolitan and the A.ork Companies, has consented to and ap- ?(1 of such consolidation anil of this agreement ■e same. "■> therefore, tliis ngi-M-ment witnesseth: f- the said'Afetropolilaii Phono-rapli Company ■he trustees thereof as above named, and the The New York Phono-rapli Company anil the ues thereof as above named, do hereby make enter into this ngreem-.ait under and in pnr- L-e or the provisions of an Act of Hie Legisln- of Hie State of New York, nnssed .Time 1011, kick, .J on n I*. Jinnies mill Itichard nos, (lie iiiiliviiliiiils described in nnd wiled (lie foregoing instruments; that i( -iiiiiI sinv them exeente the same ami . . . the subscribing witnss thereto. [Seal.] St urges .M. Morehouse, Notary Public, Co. of New York, nly of New. York, ss. : III ila.v of .Time, ,1S!I0, before me per- ireil Charles A. Chcover, with whom I y aei|iiajiileil, who being by me duly epose and say that, he resides in the York; that In- is the President of the Phonograph Company one of the cor- crihed in and which has executed the Iriiment, that he knows the corporate oiupany ; that the seal a nixed to said the seal of said company, and was so thurify of the Hoard of Trustees of ’• nnd that he the said Charles A. president, and Felix C.ottschalk, the ■eof. did sign their names (hereto by [Seat,.] Starges M. Morehouse. Of said company; that tlm seal alllxed to said j slruiiient is tile seal of said company, and was : allixcd liy authority of the Jinan! of Trustees of said company, and that he the said John T. Haines, tiie president, and Itichard Townley Haines tlm secretary, thereof did sign llieir names thereto as such president and secretary by the like authority. [Ska i.,] Starnes M. Morehouse, Notary Public, County of New York. The secretary then read the following resolution- Unsolved, that the agreement submitted to this meeting for the consolidation of the Metropolitan Phonograph Company with the New York Phono- STapli Company made, by and between the trustees of the Metropolitan Phonograph Company and the. trustees of The New York Phonograph Company, he nml the same hereby is sanctioned and approved, oml the execution and delivery thereof authorized sanctioned and approved. It was then moved, seconded and carried that the meeting proceed to vote upon Ihe approval or non- approval of the. agreement for consolidation, and that this vole he taken by ballot, and that such hal- ots rend “for the resolution” as read bv the secre- tary or “against the resolution.” On motion duly seconded and carried, the Chair 'Jib"" I"'1' L- n,,,I John P. Hingwnod Pallots having been distributed and Ihe vote hav- ug been east, Ihe tellers canvassed the same and * '-1 '-n east, and that ’ : sl'”,PS of ",R ’'apilal slock had been voted, foe „ ' i,'!?r °r 'he resolution as read liy (.he seere- on«,tn"i-10""^ "ml apr>rovin« agreement for onsol.dat, on submitted to this meeting, the votes capita.) stock of this company, and more thirds in amount of the stockholders pro meeting, namely being all of the stockist ent at such meeting. The chairman then announced the re.1 xote taken as reported by the tellers, an agreement submitted to the stockholder; sanction and approval had been linaniim tinned and approved by all Ihe stockhold. at this meeting. On motion, tins meeting adjourned. Itichard Townley State of New York, ) City & County of New York, ) s:s" i; Itichard Townley Haines being duly depose and say that l reside at New York T am the secretary of The New York PI Company; that I was present at and aci rotary of the meeting of the stnckholde company held at the ofllco of said cc ronghkeepsio in the County of Dutchess of New York, on the 2oth day of .Tune, that the foregoing is a. true copy of the p of such meeting made by me as the sccrcta and attached to (lie agreement for the con of the Metropolitan Phonograph Comp The New York Phonograph Company ferred to. PTC HA TIT) TOWNLEY Sworn to before me this 27th ) dav of June, ISflO. j Henry W. Jessup, Notary Public. Kings County.- Certificate filed in N. Y. County. Gluts. A. Cheever, President. Felix Gollschalk, Secretary. H "'ns called to oilier at 0 A. '31., the ti'. CliaHes A. Cheever, being duly lii'iiiun of the lneetiug, and Me. Felix i secretary thereof. Jobholders ill person and by proxy ‘(.•presenting 7,5:15 shares, being inord list of the issued capital stock of the O' I lien presented and read the call ng in the form already set forth in , together with proof of the duo and liing and mailing thereof, to wit, the 'inuel K. 10 vans that he laid deposited lice in ihe City of New York on the ay, lStlO, lining more than thirty days late of said meeting, copies of such <“d to each of the stockholders of this leir places of residence known to the 313 with the New York Phonograph Company fur the coii.soiiclatioii of said companies, wliich has been made and entered into by the trustees of said com¬ panies, respectively, subject to the sanction and approval of tile stockholders, a copy of which agree¬ ment is as follows : Memorandum ol agreement, made this tenth day of .May, one thousand eight hundred and ninety liy and between the .Metropolitan Phonograph Com¬ pany, a corporation organised under the act entitled “An Act to authorise the formation of corporations for manufacturing, mining, mechani¬ cal or chemical purposes’’ passed February 17th, ISIS, and the acts amending or extending the same, and the Trustees of said Metropolitan Phonograph Company, of the first part, and The New York Phonograph Company, a corporation organised un¬ der the same nets, and the Trustees of the said The New York Phonograph Company, of the second part, in manner following, that is to say: Whereas the two corporations above named have been respectively organised for the purpose of ne- ipiiring licenses or territorial grants or exclusive rights relating to Iho Phonograph. Phonograph- flraphophone and similar machines, and for the purpose of leasing or otherwise disposing of such machines and appliances connected therewith and manufacturing the some, and for other purposes specified in the articles of incorporation of said companies respectively : And whereas, the said. Metropolitan Phonograph Company has acquired from the North American Phonograph Company, a corpora lion organized un¬ der tlie laws of tlie Slate of New Jersey, the ex¬ clusive right to carry on its said business within Ike counties of New York, West Chester, Iticlimond, Queens, Suffolk and Kings, in the State of New : | And whereas, the said The New York Phono- 037 «raPli Company has acquired from The North if American Phonograph Company the exclusive 0 right to carry on its said business within the whole. * of the State of New York, excepting tile counties of New York, Westchester, Iticlimond, Queens, Suf¬ folk and Kings in said Slate of New York. And whereas, the said Metropolitan Phonograph Company and tlie said The New York Phonograph Company are at present carrying on their respec¬ tive operations within (lie territories to which their rights respectively appertain as aforesaid. Anil whereas, it is deemed expedient, in view of the Inea I ion of the territories occupied by said Com- q£8 panics and included within their operations re¬ spectively, and the close relations necessarily re¬ quired to exist between tlie management of the two corporations for tlie purpose of tlie advantageous and harmonious conduct of their respective busi¬ nesses, to consolidate (lie two companies into a single corporation, and it is believed that such con¬ solidation would lie to the advantage of all tlie stockholders in both of said corporations, and that the objects of both companies would he better pro¬ moted and the business interests of said companies advanced by their union under a single mminge- And whereas, Tlie North American Phonograph Company the licensor of said Metropolitan and the New York Companies, lias consented to and ap¬ proved of such consolidation and of this agreement for tlie same. Now therefore, this agreement witnessed! : That tlie said Metropolitan Phonograph Com¬ pany and tlie Trustees thereof as above named, and the said Tlie New York Phonograph Company and tlie trustees thereof as above named, do hereby make and enter into this agreement under and in pur- 040 317 Attest : Felix Gotlschalk, Secretary. Wi ''all nest oi-k L. S. llichard Town ley Haines [Seal. I [Kenl.J [Seal. | [Seal.] Attest: Richard Townley Haines, Secretary. City and County of New York, ss. : 950 On tin; 24 th day of June,. 1S!)(), before me per¬ sonally appeared Lemuel E. Evans, tlm subscribing witness to the foregoing instrument, with whom I am prrsnnally neijuainted, who being by .me duly sworn, did depose and say that ha resides in the town of East Orange, New Jersey, that, lie knows J. J. Gunther, A. ],. Taylor, Felix Gottschalk, Clms. A. Cheever, Janies it. Metcalf, J. J). Cbeever, Win. Fnlinestnck, John P. Haines and Richard Townley Haines, the individuals described in anil who have exmited the foregoing instruments; that ho was present and saw them execute the same and thereupon became the subscribing witness thereto. "1 Sturges M Morehouse, Notary Public, Co. of New York. City anil County of New York, ss.: On this 24th day of June, 1S!)(), before me per¬ sonally appeared Charles A. CheeviT, with whom I am personally acqiniinted, who being by me duly sworn did depose and say til at lie resides in the City of New York; that lie is the president of the (Endorsed:) New York 1'lionog Consolidation 1’rocecdings. Tux J Organization of this Corpuratii Under Cliniiter .11:!, haws of ISSli. Treasurer before Filing. .Stale of : lice of Secretary of State. Filed Sep. jo, I.S90. Til. JO. Jienodiot, J)< of State. Stale of New York, ) Office of tile Secrelary of State, ) ' I have compared tiie preceding wi agreement for the consolidation ol Phonograph Company, with. The X ograpli Company forming “New Yo Company,” with the various certif davits thereto annexed, filed and r oiliee on the 12IU day of Scptembci Iiereh.v certify tile same to lie. a eoi therefrom and of the whole thereof. Witness, my hand and tiie seal Secretary of Stale, at f '[Seal.] bany, this sixth day ol thousand nine hundred a JUl stock of the Wii(l corporation shall consist shall 007 T,;,‘ 1 h«»us"i.cl ( 1.0,000) of the par value of Ouo hundred (loli«-s (§100) each. h’irili. The term of existence of the said eorpor- nl ion shall lie Fifty years. Sixth. The nnniber of Trustees who shall man- !l=o t ho affairs of the said corporation sluill he three, and I lie names of such Trustees for the llrst year are Andrew J,. Taylor, Timothy Cornwell and Victor E. Burke. Seventh. Thu operations of the said corporation are to he carried on in tiie Town of Hempstead, Queens County, Xew York. 068 'Andrew L. Taylor. Timothy Corn weir. Victor E. Burke. State of Xew York. ^ Cil.v and County of Xijw York. ) SS,: On this first day of October, A. D., 1SSS, heroro me personally appeared Andrew L. Taylor, Timothy Cornwell and Victor E. Burke, all to me known and known to me to he the individuals de¬ scribed in and who executed the foregoing certifi¬ cate. and they severally before aie signed the said certificate and acknowledged to me that they ex¬ ecuted the same for the uses and purposes therein mentioned. Bichnrd E. O’Brien. (8 RAT,.] Notary Public, (Cert, filed in X. V. Co.) Junius A. I' lack, Clerk ot the CifJ* ami Conn 'ow York, :iml also Clerk of llu; Supreme Con llto .slid City and Comity, Hit* same being n of liceord, do hereby certify, that itieliurd J l ien, lots tiled in the Clerk's Ollieo of the Conn! \'ew York, m. eertilied copy of his appoinliuci loinr.v pnldie for the Coiinl.v of Kings with h •ffrnph signature, mid was at the time of Inkii Jiroof or siekuowledguient Mf the annexed i incut. duly authorized to taka the sune. An her thill; I mil well Mr<|tiaiii'fcd with tlie him ing of sneli iiotnry, mid verily believe Hint tl Hi lire to t he said eerlifienle of jiroof or a vied fluent is genuine. i testimony whereof, I Iiave hereunto set in 1 mid affixed the seal of the said Court an nly, the 1st (lay of Oct., 1SSS. .Tames A. Flack, kI*] Clerl ms County, \ ks Olliee, ) sf!' ' John It. Sul ph in, Clerk of slid County and ti Courts of Kecord therein held do hereby cci that I have compared the preceding instriinien the original thereof on tile in my ofllce am the same, is a true copy thereof 'and of ill le original. itness my hand as clerk and the seal of Queen ii ty this 3rd day of Oct. 1SSS. •T. n. Sntphin. Clerk ■jiidorsed :) Metropolitan Phonograph Com ’• Certificate of Incorporation. Tax for priv of organization of this incorporation, $1,250. Under Chapter 1-13, Laws of 1SS0. Paid f< Olliee of Secretary or Stale. Filed and Recorded Oct. *1, 1SSS. JJicdrich Willem, Deputy Secretary of State. State of New York, , Olliee or the Secretary of State, ) ss‘ : 1 have compared the preceding with (lie ori-inal Certificate of Incorporation of .Metropolitan Phon ograpli Company, tiled and recorded in this olliee on the -1th day of October, 1.SSS, and do liereby cer¬ tify the same to he a correct transcript therefrom and tlie whole of said original. Witness, my hand and the Seal of olliee of tlie £ Secretary of State, at the City of Al- tSiuu] hany, lids fifth day of March, one thousand nine hundred and three. Horace 0. Tennant, Second Deputy Secretary of State. Complainant's Exhibit 54, April 16. 1903, J. A. S., Es'r. Certificate of incorporation of The New York Plionograpli Company. City and County of New York, ) State of New York, I ss' : g We, John P. Haines, John 1). Cheever and llicli- nril Townley Haines, being desirous of forming a company for the purpose of carrying on the busi¬ ness hereinafter mentioned, pursuant to and in conformity with tlie provisions of an Act of the Legislature of the State of New York, passed Feb¬ ruary 17 tli, 184S, entitled “An Act to authorize llio formation of corporations for manufacturing, mining, mechanical or chemical purposes” and of the several acts of the said Legislature supple¬ mentary thereto and amendatory thereof, have as-' Noah Davis, of the City of New York. William Fahnestock, of tho City of New York. W. Seward Weldi, of Hie City of New York. John L. Martin, or the City* of New York, a majority of whom are citizens and residents of the State of New York. Eighth. The names of the town and county in which the operations of the said company are to he carried on are the City of Poughkeepsie in tho County of Dutchess ami State of New York. In testimony whereof, we have hereunto set our hands at the City of New York on the Eighth day of February, in the year of our Lord One thousand eight hundred and eighty-nine. Jno. P. ITaines. 'John D. Cheever. Richard TownJoy Haines. Stale of New York, ) City and County of New York, ) SSt ‘ On this eighth day of February, A. D. 1SS9, be¬ fore me personally entile. John P. Haines, John D. Cheever and Richard Townley Haines, to me per¬ sonally known to be the individuals described in and who executed the foregoing certificate and sev¬ erally acknowledged that they executed the same for the purposes therein mentioned. A. H. Parkhurst, Notary Public, Kings Co. Certf. filed N. Y. Co. If I, Edward F. Reilly, Clerk of the City and Coun¬ ty of New York, and also Clerk of the Supreme Court, for the said City and County, the same being a Court, of Record, do here- [fii mm ■ county of Kings witli lii.s autograph signature, m was at the time of Inking the proof or ucknowled mont. of Ihe annexed instrument, duly nuthorhu to take the same. And further, that 1 am well a quainled with the handwriting of such notary, an verily believe the signature to the said certiflcnl of proof or acknowledgment to lie genuine. In testimony whereof, I have hereunto sot in hand and ntlixed the seal of the said Court an County, the Otli day of Fehy., 1SS0. (Sea) ) . Edward F. Reilly, Clerk State of New York, ) County of Dutchess, 1 88 ' : I, Then. A. Hoffman, Clerk of the' said Count; and Clerk of the Supreme Court of said Stale foi said County, do certify that I have compared tin preceding with the original certificate of incorpor at ion of The New York Phonograph Company on file in my office and that the same is a correct diipli- rate therefrom and of the whole of such original. Endorsed: Filed and Recorded February lltli, ISSO. ’ In witness whereof, T have hereunto subscribed ny name and affixed my official seal this 11" day of 'Vhrnnrv, isgfi. ) Tlico. A. Hoffman, Clerk. (Endorsed :) The New York Phonograph Company Duplicate Certificate of Incorporation Cerlilicate «r Incorporation of “The New Yorl Phonograph Company,” filed and recorded in thi office on the 12lh day of February, ISSfl, and di hereby certify the same to be a correct trnnserip therefrom and the whole of said original. Witness, my hand and the seal of office of tin Secretary of State, at the City of A1 [Seal.] bany, this fifth day of March, one tlious and nine hundred and three. Horace O. Tennant, Second Deputy Secretary of State Complainant's Exhibit 55, April 16, 1903, J. A. S„ Ex’r. For Private Distribuiiou. Preliminary Pro? pectus of the Melaopolitan Phonograph Company, it corporation to be organized under authority ol the North American Phonoeranh Comnnnv rind (iciiwul Outline of the Phonograph and Phono- 001 grnph-Urnphoiihonc. -\ It I n m i ”1 1 some tea years have elapsed since Edi¬ son startled tin; world liy inventing a machine that stored up sound and reproduced it at will, it is only within the past few months that tins wonderful in¬ vention has Moon brought to such a degree of per¬ fection as makes it of practical utility to the public at large. Tim original phonograph, while valuable as demonstrating the possibilities of human inven¬ tion, and as opening up a field of research in acous¬ tics previously unexplored, lacked the elements os- sent ml for practical use. The metallic and some¬ times indistinct sound-waves that were emitted poo from the primitive tin foil, the lack of proper inch denial mechanical appliances, the want of a suita¬ ble material for the impression plate, and numerous other defects, made the invention useful principally .in (lie lull oratory of Mm scientist, or in the museum of curiosities. ' These early defects have .at last been all overcome, nnd (he perfected phonograph or phonograph- j'ritphnpliniift for ilio multitudinous purposes for which it. can lie used, is .as practical as the type- wriler or ilm telephone in (heir respective spheres. T?.v it Mm slightest, shades and variations of the human voice are registered and reproduced with „ absolute aVriiHioy; music, whether voe.nl or instru- 993 mental, solo or multiple, in nil its rvtlini, jnelndv nnd lnh.mil inn. Mm lowest ns well as the highest, notes; in a word, nil sounds, of every kind nnd char¬ acter, may lie treasured up in this extraordinary in¬ strument and reproduced — not. once, lint, thousands of f lines and may he mochnnicidl.v.duplirulcd and multiplied to any extent. Tim utility of this mar¬ velous invention at this earlv dnv can scarcely he estimated. The uses of an instrument, with snob manifold functions would seem to he circumscribed f< 1 1 I 1 c 1 1 1 1 „ l I „ 1 I 0[ I c i destined In lie applied, snllieleiit tests Imve already limi iniiile In warrant the ilsscetinn Mint for nil the jmepnses hereinafter enumerated, the phonograph nr phnnngmph-gruphophoiie is uiK|imIifiedly prae- Ileal and eminently ilesir.ahle, and in making these statements there are mil, as is too often the case with new inventions, nn.v reservations or qualifica- lions, or any depending for their realisation upon expected improvements. Upon the authority of scores of disinterested use.i-s who have subjected the instruments to all varieties of tests, and upon the certainly of operation which the machine itself demons! rates, tiicse statements are made. In this respect the phonograph or phonograph- graphophone present a departure widely different from the other great inventions of the age, notably the sewing machine, the reaper, the telegraph and Hie telephone, all of which have been the subject of constant improvement, until the samples of to¬ day of eaeli of these inventions present such radical differences from the ones first put into pinctie.nl operation, ns to lie scarcely recognizable as being of the same class. It is true (lint lime may cheapen the cost of product ion of Hie phonograph or phono- graph-grnphophone — tuny possibly make the mech¬ anism more simple; but. I he 'phonographs or pliono- grnph-graphophoiios now about to lie4 put upon the ! market are so accurate, as to suggest a likeness be¬ tween their fidelity in reproducing sound exactly as uttered, and the fidelity with which the photo¬ graphic camera reproduces the features of the sitter. Takes the Place of Stenographers. Obviously one of the first uses of the phonograph or phonograiph-graphophone is its use as a stenog¬ rapher, for it presents numerous superior features for that class of work. An expert stenographer. nicisl scholarly ami rapid writer cannot write one- 1003 Icnlii as rnpidl.v as lie can talk. Tliu Voice as a (.nude to the Meaning. In addition to (lie advantages alluded' to, the phonograph or plinmigrnph-gmphophoiic, by repro- dneinjt Hie exact, tones of the. speaker, enables the hearer more coniplefel.v (o understand the 11101111111;,'. The pleasure at. times derivable in listening to the voice, of an absent, loved one is denied iii the cold characters of a letter. The Phonograph or I’honogrnph-Grnphophnne as an Educator. Eor educational purposes the phonograph or jqq^ phonograpli-gruphoplinne is destined to prove an important factor in ninny ways. To teach correct pronunciation of either native, or foreign languages, the 'phonograph or phono- graph-graphophonc will lie invaluable ns a supple¬ ment to a teacher or a book. Elocution, also, so far as modulation, tone and other qualities of the voice are concerned, can bo easily taught through the medium of the phonograph or phonograph- grapliophone. A Boon for Commercial Traveler's. If a phonograph or phnnogriiph-graphoplionc was placed in every prominent hotel in the country, as 1005 doubtless in time, will be the case, commercial trav¬ elers could more readily, more thoroughly and more accurately, keep their principals at. home apprized of their doings and the details of the conditions and peculiarities of the territory through which they travel. I11 many rases the writing of the daily let¬ ter is a source of greater concern to them than all the day’s work. Stored-up Music .and Elocution. As a source of amusement, (he phonograph or licnliou will lx* (o (lie liliml nml (lie sick. '('lie Mechanical Uses for Toys, Clocks, Etc. An exceed! ugly imporlnnt field for (lie phono ■npli and plionogmph-gmphophone lies in i(s np licntion for toys, clocks, etc. Ry ingenious modifications clocks will lie nr mged so as to speak tlielionr instead of striking it. Children’s toys will lie made to speak, sing, laugh • cry. These are mere isolated illustrations of the nllitudinous uses to which the invention may he iplied. lecial Advantages Possessed lev (lie Metropolitan Phonograph Company. The territory exclusively controlled liy the Metro- •litan Phonograph Company, it is needless to say, the most important, for the amount of area of iy in the United Stales. The population of New York, Kings, Queens, ilTolk, Richmond and AVestcliesler Counties, nc- rding to host estimates, is over 2,500,000, and the tire territory may readily he operated from one ice situated in the City of Yew York, without the tervention of snh-agencies, thus keeping the ex- nse of operating at the minimum. Moreover, en this statement of the population fails to con- y the true value, of the district controlled by this 1011 33- company, it being readily understood that many 1009 more instruments par capita will tie used in this district than in any other in the whole country. Under the contract between the Metropolitan Phonograph Company and the Parent Company, all machines with motors complete are to be sup- plied in perfect working order, guaranteed by the latter company. Cylinders will be furnished to the user for a few cents each, on which amount this company will receive twenty per cent, of the selling price. Tt is believed that the revenue from cylin¬ ders alone will largely exceed the net revenue re¬ ceived from the use of the machines. This belief is based upon numerous experiments heretofore j qio made by users to whom, machines were furnished for trial, but who were obliged to purchase the cyl- ' indors ns they were needed. Freedom from Litigation. A valuable feature of the invention lies in the fact that the phonograph or phonograpli-grapho- oplionc, unlike most of the other great revolution¬ ary inventions, is so radical a departure from every¬ thing that has gone before, that the patents cover¬ ing it seem impregnable. The company and its. li¬ censees will, in consequence, doubtless be saved the oftentimes harrassing experience occasioned by in¬ fringers. In addition, the North American Phono- 1011 graph Company and .Tesse H. Lippincott, sole li¬ censee of the American Graphophone Company, give a special guarantee of protection, and this they are enabled safely to do by reason of their controll¬ ing all the phonograph and phonograph-grapho- plione patents in. the United States and Canadn, not only those of Edison, but also those of Tainter and Bell. Absence of the Usual Obstacles to Profit. In the case, of the telegraph, telephone and elec- trie light, local companies are by no means assured of success by a franchise from the parent company vesting them with exclusive control in particular territory. The consents of municipal authorities to run wires and erect plants are indispensable. The phonographs or phonugraph-graphophoncs being supplied by the parent company, there is eliminated the necessity of large outlays for exten¬ sive plants. . To carry on the phonograph and phonograph- graphophonc business, there are no lines to erect, no apparatus to construct, no costly exchanges and circuits to keep up, no municipal franchises to be obtained', and no demonstration on a large scale to test tlie commercial value of the instrument, ns is so often true of other inventions. The company has to do only with the individual user, and the rental is placed so low that ihc machine is brought within the reach of all. The rental to be charged to users is §40 per year, one-lialf of which is paid to the parent company for furnishing the manufac¬ tured machines. The following is believed to be a careful and con¬ servative estimate of the probable business of the Metropolitan Phonograph Company: 1013 339 Phonographs or Phonograph-Grapho- 101 B phones. — When 10,000 instruments are placed at a net annual rental to the com¬ pany of §20 each, the amount will equal, annually . §200,000 Cylinders. — Each instrument using an average of 30 cylinders per day, would equal 300,000 cylinders per day for 10,- 000 phonograph-graphophonos, which, at a profit of 0-10 of .a cent per cylinder (20 per cent, of selling price), would equal §1,800 per day, or at 300 working days per year, annually..... . §540,000 Total income . §740,000 Expense of conducting this business, in¬ cluding rents, taxes, salaries, repairs, advertising, canvassing, commissions, insurance, office expenses, etc., etc., per annum . 75,000 Net profit per annum . . §605,000 Winch is net profit of over 66 per cent, upon the capital stock. The foregoing estimates are made after careful consideration and numerous experiments, and are believed to he very conservative To ascertain the number of cylinders likely to be used, in general practice, an experiment was made early in June of tins year, of placing fifty phonogr.aph-grapho- phones in the hands of stenographers. The users were not charged for the machines, hut were to pay three cents each for the cylinders used. The result was, that for two months the average number of cylinders required was 100 per machine per day, or 5,000 cylinders per day for the fifty machines. f ile following ore the testimonials referred to above. From lion, Itobt. It Hitt, Ex. -Assistant Secre¬ tary of State and Representative in the 47th, 4St.li, 40th and 50th Congresses from the Sixth District of Illinois. Washington, D. C., July 0, 1SS8. For nlmut two months 1 have lind a phonogrnph- grnphophonc, and have used it chiefly for corre¬ spondence, Imt also for urgent rapid composi¬ tion, for n. quickly-made accurate record. It is ex¬ ceedingly convenient, always at hand, always ab¬ solutely accurate in its work, alwnys waiting your lime anil never keeps yon waiting. With it there is no need of keeping a clerk wailing for a visitor, or stopping a stenographer in his work. Dike other members I employ a, stenographic clerk, who comes at a stated time. The phonogrnph-grnphophone does not require your attention at a stated time, lmt at. midnight, or early morning, or any leisure interval it is there and will work as rapidly as you can talk. Besides it keeps a permanent record of everything that can be referred to whenever re- I aired, it fact the more one uses it the more numerous are its convenient services, and the more necessary it seems to a busy man. Robert R. Hitt I1 mm A. Johns, Esq., the well-known stenogra¬ pher of Washington. Washington, D. C., July 12, ’88. I commenced working with the plionograpli- rraphophono about the 1st of May, and since that ■me have dictated to it over five hundred cylinders, >r the equivalent of nt lenst400,000 words, equal to i congressional document of about six hundred 311 [V 1 have been enabled to do what I never formerly- 1021 supposed I could do, and that is to dictate from my stenographic notes the very hardest matter I am ever called upon to deal with. My idea had been that very difficult work would have to be dictated in the old way slowly to a typewriter operator. From the very flint, however, I have been dictating everything, hard and easy alike, to the phonograph- graphoplione, and by far the greater portion has been lari IT hearings before a Senate committee, principally in connection with the items embraced in the chemical schedule of the tariff. If I had to do without the phonograph-grapho- . phone now I should certainly feel like changing my ;02a vocation. A. Johns, Stenographer. From Hon. S. R. Peters, Representative in the 48th, 40th and 50th Congresses of tiie Seventh District of Kansas. Washington, D. 0., July 11, 1SS8. I have been using the phonograph-grnphophone for a month with great and increasing satisfaction. I dictate into it ail my answers to correspondents as rapidly as I can utter them, much more rapidly than any office stenographer could take them down, nnd I also dictate much of the data which I use in debate on the floor of the House of Represents- jo23 fives. I consider the phonograph-graphophone a very useful as well as a very fascinating instru¬ ment. Among the many advantages are the follow- fug: First. I can dictate the answers to my letters as I read them, instead of having to go over them again when my stenographer arrives. Thus I save a great- ileal of time daily, not only by the high rate of speed at which I work, but also by avoiding the second handling of my letters. Second. I can do my dictation at any hour that I) 343 1024 suits me, very early in Hie morning or very late at night, when T could not have the attendance of a stenographer. Third. Any person, whether a stenographer or not, can transcribe the letters and prepare them for signature; so that the instrument makes me in¬ dependent. of stenographic aid, which is always costly and sometimes difficult, to obtain. Fourth. Another point is that original matter can lie dictated in the dark, an advantage in hot weath¬ er or where the eyes are sensitive to gas light. Fifth. The record can he preserved and repro- 1020 'l,lce,l ,».V myself or anybody else who can hear, at any distance of time, while shorthand notes could he translated only by the writer. Tn short, T would part with my stenographer and typewriter before T would part with my phono- graph-graphophonc for the purpose of carrying on my correspondence alone, to say nothing of the other interesting uses of the instrument. Yours truly, S. R. Peters. From E. T>. Easton, Esq., official reporter of the fiuitenu and Star Route trials and now employed in the TIonse of Representatives. 1020 Washington, D. C., July 13, 1888. 1 have bi-t-ii familiar with the phonograph-graph- oplione since April, 1887, when it was first brought out, and began its use in business as soon ns I could obtain the first instrument. Previously all my dictation had been done di¬ rectly to typewriter operators. I now use the plion- ograph-graplioplione for all my work, an'd it is as superior to the old method ns is the locomotive to the stage coach. The speed of the dictation is only limited by ability to articulate distinctly, and often runs over two hundred words per minute. The day the first phonograph-ginphophone ar- 1027 rived, I dictated to it a deposition of about one thousand words. The transcriber who lmd never before attempted such work, wrote readily from the dictation of the instrument, and made only one mistake in the copy. We have now trained a num¬ ber of operators and the transcripts are ns accu¬ rate as those made by direct dictation. Patent ar¬ guments, full of technical and unusual terms, are as correctly reproduced ns simpler matter. The phonogrnpli-graphophone does more than its most enthusiastic friends promised for it. It not only saves the time of the stenographer, but, by enabling him to accomplish so much more work, it increases 1028 his ability to earn. I can turn out at least twice ns much copy per day with the phonograph-grapho- phone as I ever could before. Since June 11th I have been reporting debates in the Rouse of Representatives, and used the plion- ograph-graphophonc there constantly. My trans¬ criber began with only half an hour’s preparation and has achieved highly satisfactory results. Re can now readily do what two shorthand amanu¬ enses were before required to accomplish. A delightful as well ns time-saving use of the phonogmpli-grnphophonc is to balk your message, put u: stamp on the talk and send it to your corrc- ]Q29 spondont. During a. recent, visit to Chicago my communication with family, business associates and friends in Washington was entirely hy • voice. I sent and received cylin¬ ders every day. I now correspond in this way daily with my wife and family, who arc away from Washington. Often the children, too small to write, send messages; ns do friends who call and see the wonderful talking machine. Even the crying of the baby is at times reproduced so per¬ fectly’ that, tender-hearted hearers are inclined to 1030 an floor in nn endeavor to soothe the little one; and when listening to familiar voices it is difllcult to IWiist i,n Inclination to respond, so naturally are I lie tones reproduced. Edward D. Easton. Complainant's Exhibits 50-71, April 18, 1903, J. A. S.. Ex’r. These exhibits are set out in the record as shown at XQ2I0, testimony of Haines. Complainant’s Exhibit 72, April 18. 1903, J. A. S„ Ex’r. Complainant’s Exhibit 72 is identical with Com¬ plainant’s Exhibit 22, except that in Exhibit 72 the date at the beginning is left blank, as follows: “This agreement made this day of 1893” ami except that in Exhibit 72 the signatures appear¬ ing at the end of Exhibit 22 are omitted; and the words “and by John P. Haines” are omitted be¬ fore “as the party of the second part therein” in paragraph “First”; and “appliances and” is omitted in paragraph, “Third” between “supplies” and attachments”; and “supplies” is omitted be- 1082 IT." I'onogrnphs” and “appliances” in paragraph (Third” ; and the word “and” is used instead of or between “July” and “October” in paragraph ronrth ; and the territory covered by this agree- « !uul throughout” is omitted before the United States” in paragraph “Seventh.” 345 ‘Complainant’s Exhibit No. 73, May 8, 1083 1903, J. A. S„ Ex’r.” Edison Phonograph Works Orauge, N. J., March 10th, 1800. Messrs. Walcutt, Miller & Co., 53 East 11th Street, N. V. Cent lemon : We duly received your favor of Feb. 20th in¬ structing us to cancel your order for eight (8) “M” Phonographs to be shipped to Philadelphia. The demand upon ns for supply material has been so great that our stock is practically ex- 1QfJ4 hausted: We were shut down taking our Inventory nearly all of last week, and as a result are some¬ what behind in our orders. We do not expect to have any Automatics in stock in less than two (2) weeks time. “Regarding orders for material, the writer will have to discuss this matter with you before we can accept same, as there are certain legal complica- tions which, we are advised by Counsel are still in force and effect” Yours very truly, W. E. Gilmore, General Manager. ]ogfJ WEG/HBH. W., M. & Co. Complainant’s Exhibit 74. of May 8, 1903, J. A. S„ Ex’r. Form Number 131. May first, Nineteen hundred. Corrected to Jan. 2, 1902. Jobbers Agreement Original. This copy to he signed and returned to The National Phonograph Company, New York Ofllcc, 135 Fifth avenue. 347 Consideration of tlie sale of Edison Phono- lis, Records and Blanks to mo(iis)ul a discount 'lie National Phonograph Company, and after full.v reading the terms and conditions, govern- md controlling Hie «al<> of such apparatus, as nined in price list and terms of sale, dated 1, liKIU ; Form No. ISO. ( We) hereby agree to conform with and adhere tly to, and lie hound by, the lerms and cOndi- i stioalaled by 'File National Phonograph Com- in the price list and terms of sale, dated 1, ItlOO, Form ■ No. ISO, in selling or offering mle Edison Phonogranhs. Jieeords or Blanks. (AVe) further agree, in case I (we) violate, in e or in part, the terms and conditions specified lid price list and terms of sale, or refuse to rn, properly verified, the memorandum ra¬ ng to credit ( Form No. /.{.•>), to forfeit the iional discount which is offered in said Signed . d . Street. No . "•a* . . City . State. . licate. This cojiy only to he retained by you. Consideration of the sale of Ellison Pliono- lis, Jieeords and Blanks to me(us) atadiscount he National Phonograph Company, and after idly reading the terms and conditions, govern- md controlling the sale of such apparatus, as lined in price lief -- •’ terms of sale, dated 1. 1000; Form No. ISO. [We) hereby agree to confomi with and adhere tly to, and he bound by, the terms and condi- i stipulated by The National Phonograph Com- , in the price list and terms of sale, dated 1, 1000, Form No. ISO, in selling or offering ale Edison Phonographs, Tfecords or Bionics. I (We) further agree, in case I (we) violate, in 1039 whole or in part, the terms and conditions specified in said price list and terms of sale, or refuse to return, properly verified, the memorandum re¬ ferring to credit (Form No. X}2), to forfeit the additional discount which is offered in said memorandum. Signed.' . Bated . Street No. . . . Business . . City . State . "Complainant’s Exhibit 75, of May 8, 1903, J. A. S„ Ex’r.” Form No. 130. May 1, 1000. Corrected to May 1, 1001. Edison Phonographs, Bccords and Blanks. Issued by National Phonograpli Co., Orange, New issued by National Phonograph Co., Orange, New Jersey. New York office, 135 Fifth avenue ; Chicago office, 144 Wabash avenue; Foreign Dep’t, 15 Cedar street, New York. 1040 List prices of Phonographs, Records and Blanks. Spring Motor Types. The Edison Gem . . . ? 10.00 The Edison 'Standard . 20.00 1041 The Edison Home . 30.00 The Edison Triumph . 50.00 The Edison Concert . 75.00 Electric Types. The Edison Victor (Battery), . 60.00 The Edison Conqueror (Direct Current),. . 75.00 The Edison Opera (Concert, Bnttery), _ 85.00 The Edison Oratorio (Concert, Direct Cur¬ rent, . . . . . 100.00 1042 Coin Slot Types. The Edison Bijou (Spring Motor), . ■; 30.00 The Edison Excelsior (Spring Motor), .... 00.00 The Edison Imperial (Battery), . 120.00 The Edison Itegal (Direct Current), . 125.00 The Edison Climax (Concert, S. M.), _ 120.00 The Edison Ajax (Concert Battery), . 150.00 The Edison Vulcan (Concert, Direct Cur¬ rent), . 150.00 (For full description of above maehiues see our regular catalogue.) Kecords. 1043 Edison Kecords (Standard size), . $ .50 each $5.00 per dozen. Edison Concert Kecords, . 1.00 each $12.00 per dozen. Dealers’ discount allowed from list price of single records only and not from list price per dozen. Blanks. Edison Blanks (rough), . . $ .20 each Edison Blanks (shaved), . 25 each Edison Concert Blanks (shaved), . 85 each 1044 F°r Priccs on Phonograph repair and supply parts, see Price List of Phonograph Parts. For horns, carrying cases, record cabinets and miscel¬ laneous supplies, see regular catalogue and dis¬ count sheet. Terms and conditions of sale. In effect May 1, 1900. Corrected to May 1, 1901. Corrected to January 2, 1902. Jobbers’ Discounts. All Phouograpbs except Gem and Bijou, . 50 per cent, off list. Gem and Bijou Phonographs, 40 “ “ “ ltccords (Standard size), ... GO “ “ “ Kecords (Concert size), - 50 “ “ “ Blanks (Standard size), - 55 “ “ “ Blanks (Concert size), - 55 “ “ “ Cash discount: On invoices paid within 10 days from date, 2 per cent. Terms: Net 30 days. Delivery: If shipment made from factory, Or¬ ange, N. J., F. O. B. Oity in which jobber is located, ! 040 if east of Mississippi Kiver, if west of the Mississip¬ pi, a freight allowance of 75 cents per 100 lbs. If shipment made from Chicago office, delivery F. O. B. Chicago, Ill. Conditions of Sale. All Edison Phonographs, Records nnd Blanks are sold at Orange, New Jersey, under the license of the Edison Phonograph Company, subject to the following conditions : No. 1. Jobbers must not sell or offer for sale at wholesale Edison Phonographs, Records or Blanks at better discounts than authorized or in- 1047 structed by the National Phonograph Com¬ pany, nor can they allow any discount whatever from, published list prices, either directly or indirectly, to any person or' persons who have not an established place of business; or, having such, will not purchase at least three ma¬ chines, each of different style nnd one barrel or 150 Records, to establish them as a dealer or dealers. No. 2. Jobbers must not sell or offer for sale at retail Edison Phonographs, Records or Blanks at 1048 luss than list prices as published by the National Phonograph Company, nor will they be allowed to include with a machine at list price, any extra ma¬ terial or supplies not listed to go with same as a regular outfit. No. 3. Diving away or selling other goods at less than regular prices, in order to induce the sale or Edison Phonographs and Kccords, will be con¬ sidered contrary to the conditions hereof. No. -1. Placing Edison Phonographs and lteeords on consignment, or for sale, except with established dealers ns heretofore stated, will not he allowed. 1041) No. 5. Jobbers must not sell or supply, either di¬ rectly or indirectly Edison Phonographs or parts thereof, Kccords or Wanks to any dealer who will not sign the Agreement governing and controlling the sale of same, nor to dealers who are on our suspended list No. 0. All Edison Phonographs bear a serial num¬ ber; all Edison lteeords are boxed and ticketed with copyright and registered tickets and labels, and any jobber or retail dealer buying, selling or offering for sale an Edison Phonograph with the serial number erased or defaced, or an Edison Re- 1060 001(1 'vit',out t*,e copyright and registered label or ticket, infringes the indents under which such Phonographs and Kccords are sold, and will lie considered ns having violated his Agreement. No. 7. Exchanging Edison Phonographs, Kccords or Blanks in whole or part payment for advertis¬ ing privileges, or for goods of some other make or nature; or the acceptance of goods or merchandise of other make or nature in whole or part payment X full list price, if good ns new (or less cost of neces- 1061 sary repairs to make good as new) in exchange for an Edison Phonograph sold at full retail list price; or the acceptance of records at not to exceed the list price of rough blanks in exchange for Edison Kc¬ cords sold at full retail list price; the exchange of Edison Phonographs or Edison Kccords being sub¬ ject to conditions stated in Paragraph No. 8. No. 8. Tile selling or offering for sale, of Edison Phonographs, Records or Blanks, that have become shop-worn, or have been taken in exchange, as sec¬ ond-hand machines, Records or Blanks at reduced prices, will be considered a cutting of prices and will not be allowed. This docs not prohibit the 1062 shaving of old records and selling them as, and at the prices of shaved Blanks. No. 9. Jobbers are to furnish the National Phono¬ graph Company with a list of all dealers to whom they are now selling Edison Phonographs, Records or Blanks, and must advise the National Phono¬ graph Company promptly of any and all new deal¬ ers established, together with copy of Agreement properly signed by such dealer or dealers. No. 10. Exchange between jobbers. Authorized jobbers will in ease of emergency or necessity, be allowed to borrow from any other- authorized job- 1068 her, provided the goods so borrowed ore actually re¬ placed with goods of the same style and make. In case a sale takes place between two jobbers, it must be at the discount allowed retail dealers and not at Jobber’s discount. No. 11. All Edison Phonographs, Records and Blanks n.ro covered by United States patents and are sold under the condition that the license to use and vend them, implied from such sale is dependent on the observance by the vendee of all the foregoing conditions; upon the breach of any of said condi- tions, the license to use or vend said phonographs, records and blanks immediately ceases and any vender or user thereafter becomes an infringer of said patents and may he proceeded against by suit for injunction or damages, or both. Conditional Credit .Memorandum. — On or about lliu loth or each mouth, a. memorandum will be sent each Jobber showing the total number of riionograplis, lfecords and Blanks purchased by you during the previous month. Jf this memoran¬ dum is returned nt the lime indicated thereon, properly signed and verified to tiie satisfaction of this Company, a credit of 10 per cent, from list price on such Phonographs. Records mid Blanks will lie allowed the dealer so returning same. (Xole: This pnrugraph is cancelled on the original exhibit by lines drawn through tile words). The discounts first mentioned represent the full Jobb is it It xtra eredit ns ubove staled is oll'ered ns a special consideration for ad¬ vantages accruing to us through, having our spe¬ cialties sold at a price that alfords the dealer a prolit large enough to warrant Ids energetically and exclusively pushing their sale, and complying with the other conditions of sale, herein mentioned, fids credit, will not, under any circumstances, be allowed where the terms mid conditions of sale are not. strictly complied with. (Note: This paragraph is cancelled on the irtgund exhibit by lines drawn through the words). National Phonograph Company, Orange, New Jersey, New York Ofllce, 135 Fifth Avenue. Chicago Offlce, 114 Wabash Avenue. Foreign Department, 15 Cedar St, New York. Corrected to .Tan. 2. 1002 353 “Complainant’s Exhibit 76, May 8, 1057 1903, J. A. S., Ex’r." Notice is hereby given to you: That every Edison Phonograph has on it a special serial number. These phonographs are sold to the public by the National Phonograph Company un¬ der licenses from the Edison Phonograph Company anil Thomas A. Edison, with the express condition that the said machines, whether sold directly by the National Phonograph Company or indirectly by selling agents, jobbers or dealers, are licensed to be used or vended only so long as said serial num¬ ber, wherever it appears on said machine, is not re¬ moved or changed in whole or in part. Tito license 1 0(58 to use or vend the said machines implied from the sale thereof terminates immediately on such serial number being removed or changed in whole or in part, anil any sale or use of such machines after such number shall have been so removed- or chang¬ ed, will subject such seller or user to a suit for in¬ fringing the patents covering said machines. National Phonograph Company Orange, N. J. New York Offlce, 135 Fifth Avenue. "Complainant’s Exhibit 77, of May 8, 1069 1903, J. A. S., Ex’r.” National Phonograph Co., Edison Laboratory, Orange, N. J. Offlce and Salesroom, 135 'Fifth Avenue, Corner of 20th street. Address ail Com¬ munications to the Company to New York. New York, January 15, 1900. In replying to this letter C. H. W. please men¬ tion these initials. List of Suspended Dealers superseding nil pre¬ vious lists. r. .u. rrcscoM, i i Proml street, New York X. Y. Columbia Phonograph Co., or branch ollicci cither in New York City or elsewhere. Samuel Xafew Co., 1102 Broadway, New York. X. Y., also 1(1 Dearborn St., Chicago III. liagle Phonograph Co., or C. Lowenthal S3 Xns sau Sin et, Xew York, X. Y. Empire Phonograph Company, 2 West 14th St. Xew York, X. Y. Union Oflice Supply Co., 'S3 Nassau St., Xew York, X. Y. Willis Park Bow Bicycle Co., 23 Park Bow, Xew York, X. Y. Siegel Cooper Co., Xew York, X. Y., also Chicago, Ill. B. II. Mary & Co., Xew York, X. Y. W. T. ITunt, 121 World Building, Xew York X. Y. S. Lemberg & Co., 10-1 Broadway, Xew York. X. Y. A. 'I'. Armstrong, or American Phonograph Co., 100 Wall street, Xew York, X. Y. Hawthorne & Slieble, 43 Broad St, Xew York, X. Y, also Philadelphia, Pa. >Toim Waiiam alter, Xew York, X. Y., also Phila¬ delphia, Pa. •Imperial Sporting floods Co. 40 Corllnndt St, Xew York, X. Y. Jacob Popp, Brorkport, X. Y. Brooklyn Phonograph Co., 573 Fulton St, Brooklyn, X. Y. Wm. Steals, 490 Flushing avenue, Brooklyn, X.Y. ^A. D. Matthews & Son, Fulton St, Brooklyn, F. P. Moore, Providence, B. I. The Arcade Co, Providence, B I. Williams & Rankin, Providence, B. I. Allen Co.. Providence r? t - j Tlie Shepard Company, Providence, B. I. 1003 Xeil McLcmion, 190 Thomas St, Xewport, B. I. Sawyer Dry Goods Co, Hartford, Conn. The Foster Co., Fall River, Mass. Hawthorne & Slieble, 004 Chestnut St, Philadel¬ phia, Penn. EscUcr’s Music Store, 1242 Grand Avo, Phila¬ delphia, Penn. •John Wanamaker, Philadelphia, Penn. •Weygandt & Co., 914 Arch street, Philadel¬ phia, Penn. Bobert Williams, Turtle Creek, Penn. Kaufman Bros., Pittsburg, Penn. Scranton Novelty Co., IC. A. Weichell, Scran- 1004 ton, Penn. Keller’s Music House, (W. H. ICellar), Easton, Penn. John McWilliams, Wilkensburg, Pa., also Wil- mording, Pa. Imperial Phonograpli Co., 870 Broad St., New¬ ark, X. J. Clias H. Kelly, 25 X. Main St., Paterson, X. J. *J. Tj. Andcm or Edison Plionogrnph Co., Cincin¬ nati, Ohio. Samuel Nafow Co., 107 Dearborn St, Chicago, Ill. Siegel Cooper Co., Chicago, Ill. Philip Ka.1t, 445 East Water Street, Milwaukee, 1065 Wis. We ask you to co-operate with us, for our mutual good, by refusing to supply any of these dealers with our apparatus. Kindly acknowledge receipt of this list. This we ask particularly, as we wish positive informa¬ tion that, it has been received by yon. Your S. Lemburg & Oo., 194 Broadway, New York. N. Y. A. T. Armstrong, or American Phonograph Co., IOC Wall street, New York, N. Y. Hawthorne & Sheble, 297 Broadway, New York, N. Y., also Philadelphia. Pa. John Wanamaker, New Yrork, N. Y. It. L. Corwin, New York, N. Y., also Newark, N. J. W. L. Isaacs, 114 Pulton Street, New York, N. Y. J. McEUynne, 202 Broadway, New York, N. Y. H. H. Ingersoll & Bro., G7 Cortland t St., New York, N. Y. M. Newgold, 8 Cortland t street, New York, N. Y. Brooklyn Phonograph Co., 573 Pulton street, Brooklyn. Henry Batternmn & Co., Graham and Flushing Avenues, Brooklyn. Broadway Cycle Co., 210 Broadway, Brooklyn. P. W. Austin & Co., Gloversville. H. H. Higley, Norwich. P. P. Moore, Providence, R. I. Williams & Rankin, Providence, R. I. Neil McLennon, Newport, R, I. •Sawyer Dry Goods Co.; Hartford, Conn. - Rord & Co., 314 Essex Street, Lawrence, Mass. A. T. Puller, Malden, Mass. H. R. DeWolff, New Bedford, Mass. Hawthorne & Sheble, 004 Chestnut St., Phila¬ delphia, Penn. Eschcr’s Music Store, 1242 Girard Ave., Phila¬ delphia, Penn. Weygandt & Co., 914 Arch street, Philadelphia, Penn. Robert Williams, Turtle Creek, Penn. Kanfmann Bros., Pittsburg, Penn. 1032 1072 E. F. Murphy, McKeesport, Peun. Scranton Novelty Co., Scrnulon, Peun. K. A. Weieliell, Scranton, Penn. Keller’s Music House (W. U. Keller), Easton, Penn. John McWilliams, Wilkenshurg, Pa., also Wil- mcrding, Pa. TV. h. Huffman, 151 Montgomery St., Jersey City, N. J. Imperial Phonograph Co., S70 Broad street, New¬ ark, N. J. F. W. Leporin, 19-1 Market street, Newark, N. J. Standard Phonograph Co., Newark, N. J. 1073 Hubert Butterwortli, 503 Market street, Newark, N. J. H. V. Butterwortli, 503 Market St., Newark, N. J. Tt. L. Corwin, Newnrk, N. J. Chns. H. Kelly, 25 N. Main street, Paterson, N. J. J. L. A'ndem, Cincinnati, Ohio. Samuel Nafew Co., 107 Dearborn street, Chicago, Ill. F. J. Schwankovsky, Detroit, Midi. Geo. TV. Emendorfer, Snginnw, Midi. Philip Kalt, 445 East Water street, Milwaukee, Wis. 1074 Cralmn M’f’g Co., Seattle, Wash. We ask you to co-operate witli ns, for onr mutual good, by refusing to supply any of these dealers with our apparatus. Kindly acknowledge receipt, of tills list. This we ask particularly, as wo wish positive informa¬ tion that it has been received by you. Your acknowl¬ edgment will assure us that yon intend to co-oper¬ ate with us fully. National Phonograph Company. C. H. Wilson, Manager of Sales. Last list was No. 2S9— December 1, 1901. "Complainant’s Exhibit 79, May 8, 1076 1903, J. A. S., Ex’r.” Agreement. National Phonograph Co., Edison Laboratory, Orange, N. J. Office and salesroom, St. James Building, Broadway and 20th Street, New York. Address all communications to the Company to New York. In replying to this letter Please mention these initials. New York, March 25, 1S99. In consideration of the sale of Edison Phono¬ graphs and Edison Records to us by the National > 376 Phonograph Co., We hereby agree that we will not wholesale Edi¬ son Phonographs or Edison Records at a better dis¬ count than authorized or instructed by the National Phonograph Co., nor will we give better delivery than f. o. b. our place of business; that wo will give no discount whatever from published list prices to anybody, either directly or indirectly, who is not a dealer entitled to regular discounts; that we null not retail Edison Phonographs or Records at less than the published list price, nor will we include with a machine at list price any extra material or supplies not listed to go with regular outfits by the 1077 National Phonograph Co. We further agree that we will not supply, either directly or indirectly, Edison Phonographs or Edi¬ son Records to dealers who do not adhere to above agreement, nor to dealers who are on your “sus¬ pended list.” Sign here We send you this agreement in duplicate. Please sign and return one and keep the duplicate for ref¬ erence. 5 our New York 1078 Complainant’s Exhibit 80, of May 8th, 1903, J. A. S„ Ex’r. National Phonograph Co., Ellison Laboratory, Orange, N. J. Office anil salesroom, St. James Building, Broadway and 20th street, New York. Address all communications t office. New York, Hay 2nd, 1808. To tiie Trade: Our attention has been railed by a number of our customers to certain circulars: distributed by a competitor, warning users and agents against 1070 handling infringing talking machines, blanks nnd records. In order that all persons nnd concerns handling our goods mny understand the situation thoroughly, we desire to say that there is no ques¬ tion, so far as we are aware, ns to the entire free¬ dom of any one, whether user or agent, to handle our output, nor is it the pui-pose of the circular re¬ ferred to, to warn any one ngninst the use or sale of our goods. The National Phonograph Company stands be¬ hind every dollar’s worth of apparatus which it sells and will hold every denier in or user of that apparatus absolutely harmless. This has a 1 way a been our attitude and our success 1ms convinced us of its wisdom. We take advantage of this opportunity to again warn all persons and concerns against infringement of Mr. Edison’s patents under which we manu¬ facture. Violations of those patents will be prose¬ cuted vigorously. Respectfully, . National Phonograph Co., By W. E. Gilmore, General Manager. Complainant’s Exhibit 81, May 8, 1081 1903, J. A. S., Ex’r. National Phonograph Co., Edison Laboratory, Orange, N. J. Office and salesroom, St. James Building, Broadway and 20th street, New York. Circular Letter. Orange, N. J., April 1st, 1808. To our Patrons : We have received frequent demands from our customers requesting that we supply our Phono¬ graphs equipped with Automatic Reproducers in¬ stead of the Standard Speakers. This Ims led us to the conclusion that the trade in general prefer machines so equipped. We have therefore decided thaton and after April 10th, 1898, we will equip all .our Phonographs with Automatic Reproducers instead of the Stand¬ ard Speakers. However, we leave it optional with the customer, and will supply the Standard Speak¬ er if so desired. Orders, however, should plainly specify where Standard Speakers are desired, other¬ wise the machines will be shipped equipped with the Automatic Reproducers, as stated above. The price of the Standard Speaker is reduced from §7.50 to $5, thus not increasing the cost of the complete apparatus. For reproducing only, we recommend the Auto¬ matic Reproducer ns being superior to the Stand¬ ard Speaker. For the information of those not ac¬ quainted with either, a brief description follows: The Automatic Reproducer, as its name implies, is made for reproducing purposes only, ft has no recording sapphire, nor can one he attached to it. Tt- does away with the use of the speaker adjusting screw, ns it is so constructed that it always tracks the thread of the record, overcoming the expansion and contraction of the wax cylinder in different temperature s. When the track is <1 nice found the reproducing ball adjusts itself auto mnlicnlly, ami the reprodui -■lion is dearer and louder. The Shim lard Speaker is a combination record- lag and reproducing device, being equipped with two snpphin L's, one for recording and 1 the other for reproducing. It was designed for recording and instant repr oduction, thus obviating the necessity of clumgc ol ’ speakers. In comliiuiii ig these quill i- ties, it was necessary to design am il construct it witli rigid v •eights. Owing lo its ri gill diameter, and the unci puil expansion ami coat ruction of the wax cylimle r, tlie reproducer soineti imes loses the track of the record, and requires to 1 ic adjusted by llio use of the speaker adjusting sere w. We wish 1 to state Hint we are also prepnred to supply Eilisc in Recorders or Speaker! si wit.Ii record- iug sapphire only. Price §5. Selection can there- fore lie made from the three types ns follows: Tile Eilisoi 11 Standard Recorder am 1 Reproducer. The Edisoi 1 Automatic Reproducer. The Edisoi a Recorder. Yonrs truly, National Phonogrci iph Company. Complainant’s Exhibit 82, May 13, 1903, J. A. S., Ex’r Edison Phonograph Works. Orange, N. J., Man di 2trth, is9tr. E. F. Leeds, Esq., c/o Messrs i. Walentt & Leeds. 53 East 11th St., N. Y., Dear Sir: I have your letter of the 24th, instructing us to cancel any o rders we may have on our hooks in the name of Mr. Miller. T shall no t he here to- Yours very truly, W. B. Gilmore, General Manager. Complainant’s Exhibit 83, May 13, 1903, J. A. S., Ex’r. Address your reply to this communication to New York, N. Y. W. E. Gilmore, President & General Manager. J. B. Randolph, Secretary & Treasurer. National Phonograph Co., Edison Laboratory, On ange, N. J. New York office, 83 Chambers street; Foreign Department, 83 Chambers street; Chicago office, 144 Wabash avenue; San Francisco office, 933 Market street. In reply to this letter, Please mention these initials. New York, March 4, 1903. To the Trade: In our suit against the Lambert Company for in¬ fringement of our patent rights, the TJ. S. Circuit Court at Chicago lias just decided that the Edison 1 patent covering the tapering-bore phonograph-re¬ cord is a valid patent, and that it is infringed by the Lambert record. The following statements are taken from: the opinion of the Court: “The complainants have made considerable improvements, both novel and useful, which are entitled to a generous construction. The first question presented is whether defendants' record or phonogram' is an infringement of claims 1 and 2 of complainants’ patent No. 301 1090 3S2,41S for a phonogram having a bore tapered throughout its length. Or, in other words, is defendants’ phonogram or record, with its end flanges varying in depth to engage a tapered mandrel at cacli end of the record, an equi¬ valent of complainants’ tapered bore?” “Defendants’ device is of material rigid and strong enough to elTect this result with no other than end frictional engagements with the mnndrel. Defendants claim that their record may be used upon a stepped mandrel just as well. In my judgment this would not alter the diameter of the device. Complainant was 5091 the first to establish frictional engagement of the record with the mandrel at hoth ends, as well as throughout Us length. I am 'further of the opinion from the record that the defend¬ ants’ device, with its end flanges varying in depth to engage a tapering mandrel, is an in¬ fringement of claims 1 and 2 of complainants’ said patent No. 332,418, and that as to such in¬ fringement, complainant is entitled to the in¬ junction prayed.” A' decree has been entered, awarding the com¬ plainant profits and damages, and also an injunc¬ tion against the Lambert. Company. As is usual in such cases, the Lambert Company lias taken an ap¬ peal, and has secured a suspension of the injunc¬ tion until the appeal is decided, but. we have every reason to believe that, the favorable decision of the Circuit Court will not lie disturbed. We hereby notify all dealers that. the. sell¬ ing of the Lambert records provided with end flanges varying in depth to engage a tapering mnndrel is an art, of infringement for which we will hold them liable, and that wo propose to enforce our rights, which have now 3C5 been acknowledged by the Courts, by bringing suits 1093 against dealers handling such Lambert records. W. E. Gilmore, President. Complainant’s Exhibits 84-85, May 13, 1903, J. A. S„ Ex’r. These two exhibits nre set out in the record at Q. 293, testimony of Gilmore. Complainant’s Exhibit 86, May 13, 1903, J. A. S„ Ex’r. Form Number 141N. May first, Nineteen hundred. Corrected to Jan. 2, 1902. Retail Dealers’ Agreement. Original. This copy to be signed and returned to The Na¬ tional Phonograph Compnny, Orange, N. J. In consideration of the sale of Edison Phono¬ graphs, Records and Blanks to (me) (us) at a dis¬ count by The National Phonograph Company, and after carefully reading the terms and conditions, governing and controlling the sale of such appar¬ atus, as explained in price list and terms of sale, dated May 1, 1900 ; Form No. 1J,0N , 095 (I) (We) hereby agree to conform with and ad¬ here strictly to, and he hound by, the terms and conditions stipulated by The National Phonograph Company, in the price list and terms of sale, dated May 1, 1900, Form. No. Ufi N, in selling or offering for sale Edison Phonographs, Records or Blanks. T (We) further agree, in case I (we) violate, in whole or in part, the terms and conditions specified in said price list and terms of sale, or refuse to return, properly verified, the memorandum re- •edit ( Form No. /.).?), to forfeit the list-mint which is offered in said Signed . . .. Jlusiness . Oil.v . State . Bated . Street No . . [Note.: This paragraph is cancelled in Duplicate. This copy only to be retained by you. In consideration of the sale of Edison Phono¬ graphs, Records and Blanks to (me) (us) at a dis- 1 count by The National Phonograph Company, and after carefully rending the terms and conditions, governing and controlling the sale of such appar¬ atus, ns explained in price list and terms of sale, dated May 1, 1900; Form No. V,0 N (I) (We) hereby agree to conform with and ad¬ here strictly to, and be bound by, the terms and con¬ ditions stipulated by Form No. Vfi N, The Na¬ tional Phonograph Company, in the price list and terms of sale, dated May 1, 1900, in selling or of¬ fering for sale Edison Phonographs, Records or Blanks. j T (We) further agree, in easel (we) violate, in whole or in part, the terms and conditions specified in said price list and terms of sale, or refuse to return, properly verified, the memorandum re¬ ferring to credit ( Form No. /■).?), to forfeit the additional discount which is offered in said [Note.: This p irigmil exhibit.]; cancelled Complainant’s Exhibit 87, May 13, 1903, J. A. S., Ex’r. Form. No. 1-10 N. May 1, 1900. Corrected to May 1, 1901. Retail dealers’ price list, discounts and terms of sale, Edison Phonographs, Records and Blanks, issued by National Phonograph Co., Orange, New Jersey. New York office, 135 Fifth nvenuc; Chic¬ ago office, 144 Wabash avenue; Foreign Dep’t, 15 Cedar- street, New York. List prices of Phonographs, Records and Blanks. Spring Motor Types. The Edison Gem, . § 10.00 j The Edison Standard, . 20.00 The Edison Home, . 30.00 The Edison Triumph, . . 50.00 The Edison Concert, . 75,00 Electric Types. The Edison Victor (Battery), . 00.00 The Edison Conqueror (Direct Current), . 75.00 The Edison Opera (Concert, Battery), . . . 85.00 The Edison Oratorio (Concert, Direct Cur¬ rent.), . 100.00 Coin Slot Types. The Edison Bijou (Spring Motor), . 30.00 The Edison Excelsior (Spring Motor), _ 50.00 The Edison Imperial (Battery), . 125.00 1 The Edison Regal (Direct Current), _ _ 125.00 Tlie Edison Climax (Concert, S. M.), . 125.00 The Edison Ajax (Concert Battery), . 150.00 The Edison Vulcan (Concert, Direct Cur- (For full description of above machine egulnr catalogue.) 369. 3C8 1 1 02 Records. Edison Records (Standard size), . § .60 each §5.00 per dozen. Edison Concert Records . 1.00 eacli §12.00 per dozen. Dealers’ discount allowed from list price of single records and not from list price per dozen. Blanks. Edison Blanks (rough), . S .20 each Edison Blanks (shaved), . 25 each Edison Concert Blanks (shaved), . 85 each For prices on Phonograph repair and supply parts, see Price List of Phonograph Parts. For 1103 horns, carrying cases, record cabinets and miscel¬ laneous supplies, see regular catalogue and dis¬ count sheet. Any dealer desiring to handle our apparatus, who has never handled talking machines, must place an initial order of at least three machines, each of a different style, and one barrel (150) records. In addition, lie must have an established place of busi¬ ness, suitable to display and handle onr goods. Terms and Conditions of Sale. , In effect May 1, 1000. Corrected to Jan. 2, 1002. (“May 1, 1001” is cancelled in original exhibit.) 1104 Retail Dealers’ Discounts: All Phonographs except Gem and Bijou, . 40 per cent, off list. Gem and Bijou Phonographs, 30 “ “ “ Records (Standard size), . . 50 “ “ “ Records (Concert size), ....40 “ “ “ Blanks (Standard size), _ 50 “ “ “ Blanks (Concert size), . 50 “ “ “ Cash discount: On invoices paid within 10 days, 2 per cent. Terms : Net 30 days. Delivery : i Conditions ol' Sale. 1105 All Edison Phonographs, Records mid Blanks are sold at Orange, New Jersey, under the license of the Edison Phonograph Company, subject to the following conditions: No. 1. Retail dealers must not sell or offer for sale, either directly or indirectly, Edison Phono¬ graphs, Records or Blanks at a discount, or less than the list prices ipioted herein, nor will they be allowed to include with a machine at list price any extra material or supplies, not listed to go with the same as a regular outfit. No. 2. (living away or selling other goods at less than regular prices, in order to induce the sale of noo Edison Phonographs and Records, will be con¬ sidered contrary to the conditions hereof. No. 3. Any denier selling or supplying in any way either directly or indirectly, Edison Phonographs nr parts thereof, Records or Blanks, to a dealer or party whose name appears on onr suspended list, violates his or their Agreement, and plnce them¬ selves in the position of being at once cut off from any further supply of goods. No. 4. A31 Edison Phonographs bear a serial number; all Edison Records are boxed nnd ticketed with copyright nnd registered tickets nnd labels, and any jobber or retail denier buying, selling or offering for sale an Edison Phonograph with the serial number erased or defaced, or an Ellison Re¬ cord without the copyright, and registered label or ticket, infringes the patents under which such Phonographs and Records are sold, nnd will he considered as having violnted his Agreement, No. 5. Exchanging Edison Phonographs, Records or Blanks in whole or part payment for advertising privileges, or for goods of some other make or nn- tnre, or the acceptance of goods or mer¬ chandise of other make or nature, in whole I litions hereof. Lins clous not prom nice of a talking innuliine at full lisi is new (or less cost of necessary n 'ood its new) in exchange for tin 'rtiph sold at fall retail list price; hill retail list price; the exchange of graphs or Edison liceords lining sn lions stated in Paragraph No. (>. No. ti. The selling or offering for i [’heliographs, Records or Blanks, tin 'hop-worn, or have been taken in ex ind-hnml machines, records or hint [iriees, will he considered a cutting will not he allowed. This does nn shaving of old records anil selling II Hie price of shaved Blanks. No. c. Exchange between denied dealers skill in case of emergency o allowed to borrow from any other ant provided the goods so borrowed ni placed with goods of the same style case a sale takes place between two il lie at full list prices. No. S. All Edison Phonographs, Blanks are covered by United Stall are sold under the condition that the and vend them implied from such ! ent on the observance by the vendee* going conditions; upon the breach conditions, the license to use or ve: graphs, records and blanks immedia any vender or user thereafter heroin of said patents and may be proceeded against by suit for injunction or damages, or both. Conditional Credit .Memorandum. On or about Ihu loth of each mouth, a memorandum will be sent each Dealer showing the total number, of Phonographs, Records and Blanks purchased by you during the previous month. If this memoran¬ dum is returned at the time indicated thereon, properly signed and veritled to the satisfaction. of this Company, a credit of 10 per cent, from list price on such Phonographs, Records mid Blanks will he allowed the dealer so returning same. [Note: This paragraph is cancelled by lines drawn through in the original exhibit] Tl 1 i Is II t ti cl o] i esc t the full Retail Dealers' discounts, hut. an extra credit as above stated is offered as a special donsiderntion for advantages accruing to us through having our spe¬ cialties sold at. a. price that affords the dealer a profit, large . nigh to warrant his energetically and exclusively* pushing their sale, and complying with the other conditions of sale, herein mentioned. This credit will not, under any circumstances, he allowed where the terms and conditions of sale are not strictly complied with. [Note: This paragraph is cancelled by lines drawn through in the original exhibit] National Phonocrnnh Ooninnnv. 373 Phonograph Company and allowed by said receiver 1117 the claims so assigned being us follows: Charles IS. Carman, $ yg 727.30 Walter Cutting, Ex’r., Il)c78.93 Uyer & Seeley, 2,181.78 .Marion E. Edison, 5,242.13 Edison Phonograph Works, 37jll5.02 Estate of Thomas Butler, "(JTIWo James (Jaunt, 20,0(11103 Michael IV. Nolan, 20 212 57 Thomas A. Edison, 273^7(j&27 ¥300,874.18 said assignments having been tiled with the said 1118 receiver. And whereas final decree of distribution was made in the above entitled cause on the second day of August, eighteen hundred and ninety-eight, di¬ recting the said receiver to distribute to the general creditors of said corporation pro rata to the se¬ veral claims, the balance remaining in his hands, as shown by his final account filed and allowed in said cause: And whereas the said National rhonograph Com¬ pany, as one of said general creditors, is under such distribution entitled to a dividend of .179 on its said claim of Three hundred and ninety-six mp thousand eight hundred and seventy-four dollars and eighteen cents : And whereas satisfaction of said dividend has been made b.v said receiver, pursuant to the direc¬ tions of said final decree, by the receipt of tile said receiver to the said National Phonograph Company, for the sum of Forty-two thousand five hundred dollars, representing the balance of the purchase price of the assets of the North American Phono¬ graph Company, purchased at the receiver’s sale thereof, on the eighth day of February, eighteen rlsum or demand, against the said John It. IJ as receiver of the said Norl.li American J’liom Company, or individnall.v, for t . . or co ing (lie manage . . or disposition of (lie pr and assets of. (lie said North American I’liom Company, or of the receivership (hereof, or li.v reason of any money or other properly li received as such receiver, or- out of said esti liy reason of any matter, cause or thing what from I lie beginning of the world to tile day date hereof: Provided always ,thnt nothing shall release or discharge the said John It. IT receiver ns aforesaid, from any liability to fli National Phonograph Company, by reason <: assets of said estate of the North American T graph Company which may hereafter come hands ns snob receiver. And the said Nn Phonograph Company, does for itself, its sn nrs and assigns .covenant and agree to and wi said John Ti. Hardin, receiver as aforesaid, part of this release, that, it, the said National P graph Company, is the true, right and lawful cr of the several claims in the recital of this n mentioned, and that it alone is entitled to n the dividend on said claims out of the estate i said North American Phonograph Company: Ihe said National Phonograph Company h •ovena.nfs and agrees to and with the said Jol ITardin, to indemnify and save him liar i gainst any claim that hereafter may he inn •stahlislied by any of said original c.laiinani issignees thereof, against the said receiver, hv m of said claims against the North Atinc 1120 graph Company Ims cutiscd these presents to h signed by its President, ami its corporate seal ti he liereto affixed, attested h.v its .Secretary, tin nineteenth ila.v or August, eighteen hundred am ninety-eight. W. S. .Mallory, President [Skai,.] Attest •I. R Itandolph. tie it reinetnhered, that on this twentieth day o August, in the year one thousand eight htindrei and ninety-eight, before me, the snhseriher, a .Mas ter of the Court of Chancery of New Jersey, per sonnlly appears John R Itandolph, who being It; me duly sworn doth depose and make proof to m; satisfaction, that be well knows the corporate sea of the National Phonograph Company, the release named in (lie foregoing release; that the seal there to a llixed is the proper corporate sr-al of the sail National Phonograph Company; Mint, the same wai so affixed thereto, and the said release signed am delivered by Walter ft. Mallory who win at the ditto and execution thereof the President, o said company, in the presence of deponent, its tin voluntary act and deed of said company, and tint deponent thereupon signed the saint* as snbscribinj witness. •T. R Itandolph Sworn and subscribed before me 3T7 Complainant’s Exhibit 102 June 10th, 1120 1903, J. A. S. Ex’r. Agreement. Jesse II. Lippincott with the North American Phonograph Company. July 17, 1888. .Memorandum, made the 17th day of July, 1888, between Jesse IT. IJppincott of New York City, and the North American Phonograph Company, hereinafter described ns the “Company.” Witnesseth: I. That said Lippincott owns or controls or has the right to use Tattlers Patent of the U. S., granted to T. A'. Edison, numbered 200,521 ; 201,760; 213,- 661; 227,079; 382,414 ; 382,410; 3S2.417; 382,418; n30 382,410; 382,402; 380,074, and inventions covered thereby and also owns or controls or has the right, to use in the U. S. and Canada other inventions of said Edison relating to Phonographs. ' Also that said Lippincott as sole licensee of the American (irapbophone Company has the exclusive right to use. or let or sell to others to use in the TJ. S., the inventions covered by T.ettors Patent of the U. R.. granted to A. ft. Bell, C. A. Bell and Tain ter, num¬ bered 341.212, and 341,213, and to C. A. Beil and Tainter, 341,214, and to Tainter, 341.287 : 341,288; .374,1.33 ; 375,570 and 380.535, and owns or 1ms right to use or mi may hereafter own or have right to use inventions which are or may he embodied in the Ctraplioplione (hereafter to be designated “Phonograph-Orapho- phone”). 2. That said company has been organised under the laws of the State of New Jersey for the purpose of exploiting and introducing said instruments, both Phonographs and Phonograph-Grnphophones. and desires to obtain from said IJppincott the 3. That in consideration of the sum of $(i, 5(10, 000 paid by said company to said Lippincott, not. in cash, by the Hie issuing to hinti of $0,5(10,000 full paid capital slock of said company, receipt of which is hereby acknowledged, and payments hereinafter provided for in cash, said Lippincntl lias sold and hereby sells and transfers and confers to and upon the said company all the rights which he has or may hereafter have to use the patents and inventions of said Edison relatin'; to Phonographs, as afore¬ said, and all rights and interests which he now 1ms or may hereafter have in the patents of said Edi¬ son, and any reissue nr extension thereof, and all tile rights which he acquired anil all the rights which were agreed to be conferred upon said com¬ pany by a certain agreement between said Edison and said Lippincott, dated June 28, 1888, copy hereto annexed, anil all the stock of the Edison Phonograph Company, referred to in said agree¬ ment which said Lippincott may acquire or he en¬ titled to receive and immediately upon receipt of the stock, said Lippincott will transfer the same to tile company. And also all the rights ■which he, said Lippincott, now has or may hereafter hare under or l*y virtue of a certain agreement between himself and the American Oraphophone Company, dated March 20, 1888, copy hereto annexed, said company assuming and agreeing to make n.11 pay¬ ments for instruments. &c„ and to carry out. the agreements made by said Lippincott in respect to said instruments, supplies, &c„ and the purchase thereof and the conduct of the business therein pro¬ vided to lie done in respect to the exploiting and in¬ troduction of the Oraphophone. 4. The said Lippincott. agrees to procure for said company from the proper parties all such author- 1135 ity as may be required to permit the handling or exploiting of the Phonograph and Grapkophone together. ' 5. The said Lippincott agrees to procure for said company any authority required from thu Edison Speaking Phonograph Company or to pro¬ tect the company from interference from said Edi¬ son Speaking Phonograph Company, hut at the ex¬ pense of the comjiany if license fee or royalty is to be paid, but nothing herein contained shall be con¬ sidered as an agreement on the part of Lippincott to sell or transfer to said company any stock of said Edison Speaking Phonograph Company which .1180 he has acquired or may acquire by purchase or otherwise. 0. Nothing herein contained shall be construed as an agreement on the part of said Lippincott to sell or transfer to said company, any stock of the American Graphophone Compn.ny or the Volta Company, or the Volta Laboratory Company or Association which he has acquired or may acquire by purchase or otherwise. 7. Prom tlie first moneys that the company shall receive from its business operations, it shall pay to said Lippincott the sum of two hundred tlious- 1 . and dollars. 8. The said Lippincott agrees to procure and cause to be executed by the Edison Phonograph Works (a corporation organized or to be organ¬ ized), a contract for the manufacture of Phono¬ graphs, &c., substantially on the terms of the draft contract hereto annexed. 9. The said Lippincott will procure and cause to be executed by said Edison, a contract as to the marketing of the Phonographs, patents, future in- 1138 volitions, experiments, &c., extras, Sc., substan¬ tially oo the tonus sot forth in the draft emit met hereto annexed. 10. It is agreed Unit a further agreement shall be entered into between the American Grnphophone Company and said Lippincolt, substantially on the terms set forth in a memorandum hereto an¬ nexed, modifying, &e., the agreement heretofore made between said Lippincolt and said American (irnphophonc Company. U. The said Lippincolt will at any and all times hereafter make, execute, sign, seal and deliver any 1130 1IM<1 n11 contracts, agreements, assignments and other papers which may he necessary to carry out the spirit, and intent of this memorandum, and to fully vest in the company the rights, property, privileges and license intended to be acquired by said company. 1-. It is understood that this memorandum is to be supplemented by a more formal agreement or agreements, and with certain assignments and li¬ cense, nil of which are to lie proposed by J. Adri- nnce Bush, the counsel for the company, and tho said company, said Lippim-olt and the said com¬ pany agree to execute all papers that said Bush 1140 shall determine are. necessary to carry out the in¬ tent, terms, S.-C., of this memorandum. Jesse Tl. Lippincolt (L. S.) In presence of •T. Adrinnce Bush. Complainant’s Exhibit 103, June 10 1903, J. A. S„ Ex’r. This exhibit is the “agreement mnde this first day of August, 1SSS, by and between Thomas A. Edison, of Llewellyn Park _ , North American 3S1 Phonograph Company, a corporation, _ and. 1141 •Tesse H. Lippincott” set forth in complainant’s ex¬ hibit 40, March IS, 1903, .T. A. S., Ex’r. Complainant’s Exhibit 104, June 10, 1903, J, A. S„ Ex’r. This exhibit is the “agreement made this first day of August, 1SS8, by and between The North American Phonograph Co., a. corporation . and Jesse U. Lippincott . and the Edison Phonograph Works, a corporation” set forth in Complainant’s Exhibit 4(1, March 18, 1903, ,T. A. S., Ex’r. 1142 Complainant’s Exhibits 105-106, June 10, 1903, J. A. S., Ex’r. These exhibits are set forth in the record at Q75 and Qid, testimony of Lombard. Complainant’s Exhibit 107, June 10, 1903, J. A. S., Ex’r. Circular Letter, #19. Ofliee of The North American Phonograph Co., and Jesse H. Lippincott, Sole Licensee of the American Graphophone Co., 1143 100, 1G2 & 104 Broadway, Telephone Call, “9G1 John.” P. O. Box 2592. New York, February 3rd, 1890. To the Phonograph Companies, Gentlemen : The New Jersey Phonograph Company inform us that one Lewis Rinkel leased from them one type “M” Phonograph #0955 and they have reason machine with him. Will you kindly request your inspectors mul agents to he on the lookout for this machine ami report the same to us as soon as found? Yours very truly, The North American Phonograph Co., Thomas I!, Lombard, V. 1>. Complainant’s Exhibit 108, June 10, 1903, J. A. S., Ex'r. Circular Letter. Office of The North American Phonograph Co., and Jesse IT. Lippineott, Sole Licensee of the American Grnphophone Co., Hill, 1112 & 1.04 It road way, P. O. Box 2502. New York, Dec. 4 th, 1890. Note. — Our circular letters are sent to eacli cone pan.v for the purpose of giving information on points of general interest to the enterprise. Points that arise in the experience of any one company— that, may lie of benefit In other companies — will, if sent to us, be communicated to them by means of these circular letters. We desire to call your special attention to the importance of immediately acknowledging receipt of these letters and of keping them on file for ready reference. To the Phonograph Companies, Gentlemen : At the meeting of the Executive Committee held at the office of the company, December 3rd, 1890, tbe following resolution was unanimouslv adopted: “Hcsolved, That the results of exclusively leasing 1147 Phonographs and Phonogrnph-Grnphophoues have proved unsatisfactory to this company and that therefore in pursuance of the rights reserved by tliis company in its agreements witli its sub-com¬ panies and licensees it is further Resolved, That each and every one of the sub-com¬ panies or licensees, acting under agreements with this company, lie directed and required on and after December 15th, 1890, to give tile public the option of either leasing Phonographs and Phono- grnph-Grnphophoncs at rentals heretofore fixed, or of purchasing said Phonographs and Phonograph- Grnphophoncs at prices which for the present are hereby fixed by Tile North American Phonograph Company as follows: Por all machines with Water Power Attachment, Treadle Power Attachment or Motor to he run by Battery Power Attachment, ns now constructed, ?150 per machine f. o. b., and for the machine with attachment adapted to lie used with electric .light current (up to 120 volts) ?1f!5 f. o. li. And Besolved, That the Vice-President of this com¬ pany he and lie is hereby directed to send to each and every, of tile sub-companies and licensees of this company such notices and to take such other action ns may lie necessary to carry these resolutions into effect.” 1149 Your attention is respectfully called to this, and further information will he given you in a few days. Yonrs very truly, The. North American Phonograph Go., By Tims. R. Lombard, V. P. , /'> / . 387 1150 Complainant’s Exhibit 109, June 10, 1803, J. A, S., Ex’r. Circular Letter. No. 51. Olllce of The North American Phonograph Co., ami .Jesse H. Lippineott, .Sole Licensee of the American Crnphnplione Co., Kit), .1(12 & Ki t 11 road way, P. 0. Box 2502. New York, Dec. lGtli, 1S00. Note. — Our circular letters are sent to each com¬ pany for the purpose of {living information on points of general interest to the enterprise. Points 1157 that arise in the experience of any one company — Hint may he of benefit to other companies — will, if sent to us, he communicated to them by means of these circular letters. We desire to call your special attention to the importance of immediately acknowledging receipt of these letters nndof keeping them on file for ready reference. (Dictated to and transcribed from the Phono- 1159 graph.) To tile Phonograph Companies, Gentlemen : We have this day forwarded to you telegram as follows: “Owing to litigation instituted by Automatic Phonograph Company and injunction served upon us, we request you to refrain from any action un¬ der our Circular #49 relating to sale of machines until further advised by us.” YVe hereby beg to confirm said telegram. Yours very truly, The North American Phonograph Co., 1160 Tlios. R. Lombard. Complainant’s Exhibit 110, June 12, 1903, J. A. S., Ex’r. This agreement, made this day of 18 , between The Phono¬ graph Company, a corporation duly organized un¬ der the laws of the State of and act¬ ing under authority of The North American Phono¬ graph Company and Jesse H. Lippineott, Sole Li¬ censee of the American Graphophone Company, party of the first part, and hereinafter called the Lessor, and 1161 of party of the second part, hereinafter called the Lessee, Witnesseth : That the Lessor lins let and hired for use, within the following described territory, and by these presents doth let and hire for use within said territory unto the said Lessee the fol¬ lowing described machine and personal property: 388 1102 for the term of from the date hereof, at the rent or hire of Forty dollars per year, payable from and after the date of delivery to the Lessee of above-described personal property as fol¬ lows : And it is further agreed l>v and l>ctwoon the parlies to these presents, that if default shall he made in the payment of the rent hereinbefore pro¬ vided for, or of any of the installments thereof, then it shall be lawful for the Lessor to re-enter, and said Lessor may re-enter into the possession of the personal property above described, and may 1103 enter upon the premises of the Lessee nnd upon any other premise* where the same may l>e found and lalce away, repossess and enjoy the said personal property as though these presents had never been made, without any liability, accountability or re¬ sponsibility of the Lessor to the Lessee, or any other person or persons for so doing, nnd it is agreed that, such re-entry or notice of such re-entry or any notice of cancellation nnd annulment hereof, sub¬ sequent to such default, shall operate ns a full and complete cancellation and annulment of this agree¬ ment nnd license, nnd the Lessee hereby agrees not thereafter to plead this license in answer to a charge 11C4 nf infri"R‘’"«‘'>t and not, at any time hereafter, to contest or assail or to aid nr encourage others to contest or assail, the validity of any patents relat¬ ing to Phonographs or Phonngraph-Graphoplioncs or appliances therefor now held or enjoyed, or which may hereafter be held or enjoyed, by The North American Phonograph Company and under which the Lessor herein may hold .licenses, or of any reissues nr extensions thereof. And the lessee does covenant and agree that the said personal property shall be taken to and there held and kept, and not. removed therefrom Jesse IT. Lippincott. Court mid in accordance with Uie statutes iu such J177 case made and provided and in pursuance of the rules and practice of this Court before John A. Shields, ISsij., a standing examiner of this Court, or oilier proper ollicor, at Ids ..nice iu the I'ost-Of- lice Building, in the Citv and Southern District of A'ew York, on the 21st day of October, 1903, at eleven (11) o'clock iu the forenoon. You are in¬ vited to attend and cross-examine the witnesses produced. The examination will be adjourned from day to day and to such time and place as may be re¬ quired without further notice. You will ds 1 1( is tile notice tli t 11 p t sti- i"ony , is euuuea. to an, assignment of: said Let- llso ters Patent;. A'“*V therefore, to whoiiL .it may concern he it known llml for and in consideration of the prem- isos and the sum of One dollar paid to the said Edi- son Phonograph Company, tlm said Edison Vlion- ograph Company has sold, assigned and trans¬ ferred, and by these presents does sell, assign and transfer unto tin; said John J{. Jlardin, receiver, . and his assigns amt successors in nllice, the whole right, title, and interest in and. to each of said Let¬ ters Valent, the same to he held and enjoyed hy (lie said John It. llnrdin, receiver, mid his assigns and successors in olllee to the full end of the term for HOP! Which said Letters Valent are or may lie granted, as fully and entirely as the same would have lieen held anil enjoyed by the' said. Edison Vlionograpb . . . hail this assignment and sale not lieen Jn testimony whereof, the said Edison Vhono- graph Company, liy its president, lias executed the presents this lfitli day of January, A. I)., IStlfi. Edison rhonograpli Company, B.V Thomas A. Edison, V resident Attest: Edison Phonograph Company. 1191 . [Skat,.] Organized, 1887. Laws of New Jersey. ,T. P. Landolph. Secretary. Stale of Now Jersey, ) County of Essex, ) On this 17th day of January A’. D., 3 800, before mo Commissioner of Deeds and Notary Public in and for the Slate of Now Jersey personally ap¬ peared Thomas A1. Edison, t.n mo known, and ac¬ knowledged to ino tliat he is the president of the Edison Vlionograpb Company whose name is of Uie Xorth Amerieai bis assigns mid success title mill interest in ;i Letters I'ntent (lie sum Hie said •folin J{. II an signs mill successors in lorni for wiiieii sniil Li granted, as fully mid have been enjoyed and iiient anil sale not been In testimony wbcrci band mid altixed my se; A. 1)., IS'IO. In I lie presence of Jiieli. 2f. Dy State of Xow Jersey, ) County of Kssex, ) ' On this 17th ilny of Commissioner of Deeds 1201 Complainant’s Exhibit 11G, Oct. 21 1903, J. A. S., Ei'r, Liber (1, Cl. 1*. 351. Where, -is I, Thomas A. Edison, or West Orange, (’■ounly of Essex, Stale ..r New .Jersey, r one dollar (81.00) nml other valuable cons’devn- Imns |o me in I.aml paid, the receipt or which I 1200 ' ;v acknowledge, I, the said Thomas A. Edi¬ son, have sold, assigned and transrerred, and by icso presents do sell, assign and transfer unto the said The Edison Phonograph Company, all my Tiffht, title and interest in and to the said inven- "ons on Phonographs and in and to the said loiters . patents therefor aforesaid; the same lo he held and enjoyed by the said. The Edison Phonograph Com¬ pany for their own use and behoof, and for the use and Minor of (heir legal representatives, to the end of term for which said letters patents ■■re or may hi* granted, as fully and entirely as Hie 403 same would have been held and enjoyed by me J207 had (his assignment and sale not been made. In teslimony whereof, I have hereunto set my hand and nllixeil my seal at West Orange in the County of Essex, State or New Jersey, tills eighth day of May, nineteen hundred; Thomas A. Edison, [Seal.] In prosenco of: •T. Fred. Wherry, Howard W. Hayes, liecorded May 22nd, 1000. Liber P. (Hi. Pago 479. §2. Complainant’s Exhibit 117, Oct. 21, 1208 1903, J.A. S., Ex’r. Whereas, I, Thomas A. Edison, of Llewellyn Park, in the County of Essex, in the Stale of New Jersey, have made several certain, now and useful inventions relating to phonographs and to devices, apparatus and methods used in connection there¬ with, which inventions are described in the fol¬ lowing letters patent and applications for letters patent, to wit: FATENTS. No. Hated. 382414 5 ray 8, 1SSS. 38211(1 May 8, 1888 382417 May 8, 1SSS 38241.8 May 8, 1SSS 382410 May 8, 1888 382,402 May 8, 18S8 iii testimony whereof I have mused the k [Si:ai,.J of the I’iilcnt. Ofliee to lie hereunto fixed. 1 teuton J. Hull, Commissioner of Piiten Ke it. reiiiemliered thill, on this .‘till day of .Si ieinhiT, .1 title, ijcfore me the snliscrilier, a until public within and for Ih:; State or Xnv .Turn pri-siiiinlly came Tliomas A. Edison, to me knot and known to me to lie the person described in a who executed the foregoing instrument, and, T In f.M, ...mii: known |o him tlej contents tlierci lie thereupon acknowledged to mu Hint he cxccul the same as his voluntary act and deed, for t! us s and purposes therein expressed. A. Wester, Xotnry Public for Xew Jei-se r-Seal ; 'A; AVestee, Xntnry Public, Stale of Xew Jersey.] Ueenrdcd February 27. infttt. Complainant’s Exhibit 118, Octobe no iiiipioHMiient in Phonograph or J2K king .Machines which betters Patent are num- l 2(10521 anil hear date the 19th day of Feb- V, 1878, and herein*, 1 did also obtain Letters Patent of the cd Slates for tin improvement in Phonographs h betters Patent are numhered 22707!) and date I lie ISIli day of May, 1SS0, and liereas, Thu Edison Phonograph Company n •ration organized and existing under and by e of the laws of the State of New Jersey is led by agreement to an assignment of my on- in I crest in and to the said betters Patent Xn. 21 and Xo. 227079 and in and to the inventions 1220 I’d thereby. therefore, to all whom it may concern, bo own, that for and in consideration of the prein- iiul the sum of One dollar to me in hand paid, cceipt of which is hereby acknowledged, I, the Thomas A. Edison, have sold, assigned and forced and by these presents do sell, assign ransfer unto the said The Edison Phonograph •any and to its successors and assigns my en- iglit, title and interest in and to the said T.et- Patent Xo. 200521 and 227079 and in and to i volitions covered thereby, the same to lie held mjoyed by the said The Edison Phonograph 1221 •any for its own use and behoof and fhr the ml behoof of its legal representatives to the ml of the term for which said T,ol tors Patent 00521 and 227070 are nr may he granted, as and entirely as the same would have boon and enjoyed by me had this assignment and lot. been made. Testimonv AVheroof. T have, hereunto set inv i Complainant’s Exhibit 122, October 21, 1903, J. A. S., Ex'r, labor II 01, page 00. Wlieivsis, I, . . ms A. Edison, „r l.lewellvn l'nil.,1 Slnlcs No. 001,71(1, on llu;3lsl ,|„v „r’Mll|! " herons, | iim tin; sole mnl exelnsive owner of «iii(l I .etters Patent mnl Hie invention described tlierein, mnl of nil rights mul privileges theremi- tier; and \\ ln»rcas, Xalioiial i*hoiin^i'a]ih a hip* porn t ion organized and existing under mnl !iV vir- tuc of tin; laws of tin; State of New Jersey ami hav¬ ing its principal place or business at. Orange, in the County of Essex, in said Stale, is desirous of under- ^'i'1 I't“Ut',‘S 1>atonl> “ml rlglils therm Xmv, therefore, to all whom it may concern, he it known that for and in consideration of the sum of One dollar, lawful money of the United States, t" me in hand paid, the receipt of which is hereby acknowIiMlircd, T |)>r> 4 n" aml onU,vI-'- ™ Uio some would have been hel and enjoyed by me had this assignment and sal not been inn do. In witness whereof, I have hereunto set my ham and seal this 2nd day of October, 1001. l’hos. A’. Edison State of New Jersey, j County of Essex, \ 8S- : He it rememhered that on this 2nd day of Onto her, 1001, before me, John J;\ llmidoiph/a Nolan Public, personally appeared Thomas A. Edison wiio I am satisfied is (lie person named in who exe ented Ihe within assignment, and I having firsl made known to him the contents thereof, he ac¬ knowledged flint lie signed, sealed and delivered the same as his voluntary net: and deed for the uses and purposes therein specified. •t E. liandolph, Notary Public, for New Jersey. John I’, liandolph, [Skat,.] Nolnr.v Public, New Jersey. lleeordwl October 4 1 If, 1001. Ir: R. Patent Ofilee, copy made Aug. 25, 1003. Complainant’s Exhibit 123, October » tales which arc described as follows: for an Im pro veil icii l in the .Mclluxl of llecording and Pro ‘I 'icing Sounds, dated Dec. I, 1SSS, Xo. tt'KSOlitl; f()1 an improvement in tlio mellioil of j;t. rn riling and lieprodiicing .Sounds, dated Dee. -I, .1 SSS, Xu. :i!i:i!MiT; for an Improvement, in Phnnogriiph iieeords, dated Dee. J, 1SSS, Xo. :UKKMW; ror an improvement in Plum iigraplis, dated dune 17, 18110, Xo. 190970; ror an improvement in Phonographs, dated June 17, 3800, Xo. J9027S; and an Improvement in Phonograph Cutting Tool, dated (Jet. IS, 1S1I9, Xo. lSI.nS!! ; and , " Pereas, i am now the sole owner of the said Letters J’atenf, and of all rights under the same ex- •ept- eerlain ei|nitalde rights and claims in and to mid Letters Patent outstanding in the Xorth American Phonograph Company, a corporation or- 'anized and existing under the laws of the Slate of New Jei-sey. by virtue of a certain contract lie- ween the said Thomas A. Edison and the said ^orlli American Phonograph Company, of date \njl«iKt 1, 1888 ; ami A\ liereas the Edison Phonograph Company, a •orporation organized and existing under the laws >f the Slate of Xew Jersey, is desirous of nequir- nf the entire field, title ami interest in and to the mid Letters Patent, together with all legal or oquil- a.d iliumas A. Edison, together with the said I'M!) sorth American Phonograph Company, have sold ssigucd and transferred, and by these presents do ell, assign and transfer unto the said Edison Phou- grnph Company the whole right, title and interest a and to the said Letters Patent of the United dales heretofore recited, together with all legal r equitable claims or rights of action that niav aye accrued or now exist by reason of the said .oilers latent and the ownership thereof, by way f damages or profits for the infringement of the ud patent or otherwise, and hereby authorize the lid Edison Phonograph Company to sue for and dleet. or use the said claims, either in its own 12fK> nine or in the name of these grantors as fully as- icy could have done if this assignment had not .‘on made, the same to he held and enjoyed by the lid Edison Phonograph Company for its own use id behoof and for the use and behoof of its succes- >rs and assigns to the full end of the term for liieh the said Letters Patent are or may lie ■anted, as fully and entirely ns the same would iye. been held and enjoyed by (he said Thomas 'A’, lison or the said Xorth American Phonograph impany, had this assienrne-^ and sale not been ide. Tn testimony whereof, the said Thomas A'. Edi- 1251 a has hereunto signed his name, and affixed his il, and tile Xorth American Phonograph Corii- d to lie hereto affixed and Hie «imu to be signed by its president lliis 22ml tluv >f -May, ISil.'i. J In presence i»r •I i'll n K. J{!iii(lnl])||. 'riiimiiis A. Edison. [Skau] Tim Xorili American Phonograph (Company, lly A. C). Lou re, Vice-President. Tim North Amerienn [Si:.\l..l Phonograph Company. Attest. : Cleveland Walcott. Secretary. ■Recorded : May 2fJt Ii, 1 803. T'. R. Patent. Ofllce, copy made Ang. 25. 1003. Complainant’s Exhibit 124, October 21, 1903, J. A. S., Ex’r. 1-il'cr P IS. pace 1IR Whereas. T, Tliomas A. Edison, or Orange, in the County or Essex, and Stale of New .Terser, Imre in¬ vented a certain non- and useful improvement in phnnognnphs, for which I made application for Letters Patent of the United Stales, the same beiii- fill'd in the Patent Otli.-e .Tnl.v 30. 1RSS. and serially numhered 2S1..153; and A\ herons, 1 am now the sole owner or the said in- vent ion and (he Letters Patent to he obtained "•“refor, and all rights under and by virtue of the same, except certain e,|nilnhle rights and claims in , . invention and Letters Patent to be obtanmd therefor outstanding in the Xorili Ameri- nn lono^rnph Company, a corpora f ion organized m,,1"r ««• Inns of (be Stale of Xew • eisey »y virtue of a certain eonlracf. between the said Thomas A. Edison and the said Xorlh -Ameri- Complainant’s Exhibit 125, Oct. 1903. J. A. S., Ex'r. IX CHANCE] JY OF XEW JJSHSI5V. Between N Wai.tkii Cl-itinc, Executor. cl Tiik Noutii Axikiiicax 1>ii »<>r, Alexander T. MeCiill, Chancell >f New Jersey, t|,0 petition of the Xc trapli Conipjiny, n corporation orga ie laws of the State of New York, i lean Phonograph Company entered into „„ meat with John J’. 'Haines whereliv the said cm pany granted to said Haines the 'exclusive ri» for the use or the phonograph or phonograp giaphophone or pi . graphic, or phono-rap graphoplionic supplies in the followm- deserilii territory, namely, (he Stale of Xew York, excel the counties of Xew York, I Vest Chester, Kirhmom Queens, Suffolk and Kings; That your petitioner nri|uired said rights abo\ mentioned from said Haines; and, hv eonsolidi tion with the. Metropolitan Phonograph Coinpan on or .a hout the2r>th day of June, 1S!)0, with the cm sent, of the North American Phonograph Company your petitioner, fl.e Xew York Phonograp! Company, acquired the exclusive right for (lie us of the phonograph, phonngruph-graphnphnnc, am all supplies and attachments therefor (hroughou the State of Xew York. And your petitioner further shows that on m about the first day of July, eighteen hundred ami ninety-three, said (he North American Phniioirmnli nhont the sixt I S I lia I in saiil I York Phoungr: i American I'lu. right In lease, t slriinient known ies, nppliiuiees a I tin* territory II iniigriipli Com pa Unit li.v said ngr 1 in sneli I err ill lease id Hie Yin y, and Unit si York Phonngrn I In ten per cenli nf all phonogrnpl ncliiniMils llierefi territory now « of (lie second pi panv) and a su f all Hie reals pa liances and allac eased or renleil sum eqn.nl |o ti it received liv tl il'ilions and ant oilier income d 1 lir* Stale of Xe ml part, said Xe aid have Hie. rigl in.nl iigropnionls. shows Hint, flier ist. ISm. Hie sai Company liecan ie twenty-first da 'ruble Court. And your petitioner further shows that since is said appoint meal w.iiil receiver lias sold plioiin- raplis and phutiogrupliie supplies within the State f Xew York, In I he value of over twenty thousand "*lnrs, as your pel if inner is informed and believes, n total disregard of your petit loner’s rights and rif limit making any pnyiiienls to your petitioner. And your petitioner further shows that, on or bout Hie twenty-third day of September, 1S!M, our petitioner informed said receiver of certain ["solutions of petitioner's Isinril of trustees, to the fleet. Unit unless said receiver proceeded to carry lit, the agreement last, referrd to, and notified your et it inner of Ids intent inn so to do, before the thir- ief li day of September. ISfll, your pet it ioner would ‘"aril said agreement as broken by Hie North meriean Phonograph Company and by said re¬ aver. and would proceed to exercise the rights and. owers belonging to it under and by virtue of all ml rm-fs exist iug between it mill tbesaiil lhnXorl.h merii-un Pliimogmpli Company prior to Septem- i*r»)Ui, 1801. Your petitioner furlber shows Hint on the third 1 flic* eon fra els snlisislin- mill in force l.c ■if* X.iWI, -\ meric, •! n 1 •1.0110-,,, pj, Comp,,,,, ir pel i I inner ; Hint, no money has been pail pel i I inner under (lie contract, of .Tnly tin l,v Wli'l receiver, anil Hint since Hie’ rein nt of (lie coni rncls prior thereto sai.l re ns vioiiileil the lerms of such ennlracls bv monographs ami phonographic supplies lie Slate of Xew York. (1,'e sai.l sales being e current, market, value, and II, .at. by reason id wrongful „cls and omissions of said re- pel H ioner Ims suffered -rent peenniarv petit •inner by reason of (lie wrongful "1 receiver, and f ha Is,, id receiver or those under him may be enjoined from further I ' cu" file's as may be found to be now - Iielween your petitioner and the Xorlh J.icliard T. Haines, being d d says that be is the secrclai innogrnph Company; Hint, o ■brinir.v, lSSil, .Ini,,, p. ||,,j, rcoinent. with tin; Xorlh Am aipany whereby said Haines (Ills to sell phonographs and es throughout. the Stale of f I lw* counties mentioned in u ■reafler said Haines assigned d agreement, to Xew York n.v; that deponent is laforine consolidation with (lie Melrp] mpany Hie Xew York Phono; iced exclusive right (o sell mo-ra pb ic suppl les I h miighot rk. Deponent furl her says i;>. the Xorlh American IM10 I Hie Xew York PhonngrapI t said The Xorlh American IV should have exclusive rich •tph Company lias sullercd great loss by the acts said receiver. lUCITAlM) T. HAINES, corn to and subscribed before me j this 2-ltli day of April, 1S1I5. )' Albert I. Drayton, .Master in Chancery of New Jersey. endorsed : Filed April :.10, JStW. IN CIIANCRUY OF NEW JEliSEY. 1*1 ion reading and filing Hie petition of New irk I’hnnngrnph Company, duly verified, it is on is thirtieth duv of April, A. 1). bSOfi, Ordered that John li. Hardin. Es<|., receiver of e Noel b American Phonograph Company, the de- iidant in (lie above entitled cause, show cause he¬ re (lie Chancellor, at the Chancery Chambers in e City of Jciscy City on (lie sixth day of May xt, at ten o'clock in (lie forenoon, wily the prayer the petition shall not be "ranted. And ;r. is furl bee ordered that the petitioner shall Phonograph I (Ills 21st day of April, A. D. ISOfi, 1 Hint, upon 111.; receipt of a relrtiso from petitioner I o him of nil claims for said mid said nllcjred damages, .Toll n It. ITnr lire, receiver aforesaid, do pn.v to (lie said • or its solicitor, Alliert C. Wall, tlic sun n hundred iloUnrs fnrtliwitli, licsides said r*s costs in lliis insider lo lie taxed. ALEX. T. McfllLL. c illy advised, Chancellor. isont to the above order. HAVER & T.AMRF/RT, Poirs. of Tlionias A. Edison and National riionograph Co . nineteen hundred and M illiiini .1. llagie, Chancellor of (he Slate oi do hereby cerlir.v Hint Edward C. ''*• whose no mo is snliscriliod lo the .above per- ilo. was. at llio (Into Ihereof, and now is, (lie I; of l ho Court of Chancery of (ho Slain of New o.v; flail, sail] ailnstafion is in dm; forin, that ioal lliorolo nnnoxnd is (ho soul of said Court. Hint. Ilm signature of (hr; tviiil Kdward C. :os is in ids own proper handwriting, ilnoss ni.v hand at Ilm City or Tronton this it.v-sixlh day of August, A. D. ninnlnon linn- I anil llirooo. W. ,T. MAGTK. ole.— This cerlifieale is made piirsnant, to an of Congress (Rev. Slat. U. S. JS75. See 005 J. A. S., E*’r. IN CHANCERY OR NEW JERSEY. Tiib New Jeiisey Puoxoaium Company, Complainant, Tiib Noutii Ambiiican Company and the Automatic Phono¬ graph Exhibition Company, Defendants. On filing tlic answer and cross hill of the North American Phonograph Company and affidavits, It is ordered that the complainant show cause on Monday December, fourth next at ten o’clock in the forenoon at the Chancellors Chambers in Jer¬ sey City, why an order for injunction and roccivon should not be made as prayed in said cross bill, and that meanwhile the complainant he enjoined from selling or leasing phonographs or permitting the same to he sold or leased unless the same have at¬ tached securely thereto a plate declaring that the same arc leased or sold under restriction not to lie used except in tiie State of New Jersey, dated No¬ vember 24, 1S03, and that copies which need not be certified of this order and of the bill and affidavits ldlJ (unless already served) be served upon the com pliiimint’s solicitor forthwith. ALEX, T. McGILL, C Respectfully advised,. H. 0. Pitney, V. 0. Emlorsed : Filed Nov. 25, 1S93. IN CHANCERY OF NEW JERSEY. Between 1313 tub New Jersey Phonograph Company, Complainant, graph Company and the Auto¬ matic Phonograph Exhibition Company, Defendants. The defendants having filed their answers and cross bills in the above stated causes, together with affidavits and order to show cause having been made as against the complainant, why an injunc¬ tion should not issue against them and a receiver to be appointed ns prayed for in said cross bill, and argument having hcen had thereon, and the Court having taken time to consider the same, It is now, on this seventh day of February, eigh¬ teen hundred and ninety-four, ordered by Alexan¬ der T. McGill, Chancellor of the State of New Jer¬ sey, that the restraining order granted In this ennse on the twenty-fourth day of November, eighteen hundred and ninety-three, and filed on the twenty- fifth day of said November upon the prayer of the defendant in its cro: final hearing in this der of tile Court. bill, be continued until the ause, or until the further or- Respectfully advised H. C. Pitney, V. C. Endorsed : Filed Feb. 8, 180-1. I, Edward C. Stokes, Clerk of the Court of Chan¬ cery of tlie State of New Jersey, the same being a' Court of Record, do hereby certify that the forego¬ ing is a true copy of order to show cause and re¬ straining order, filed Nov. 25, 1S03, and order for continuance, filed Feb. 8, 189-1, in the cause wherein The New Jersey Phonograph Company is complain¬ ant and the North American Phonograph Co. ct als., are defendants, now on the flies of my office. In testimony whereof, I have hereto set my hand and affixed the seal of said Court, [Seal..] at Trenton, this twenty-fourth day of August, A. D., nineteen hundred and three. EDW1AR© G. STOKES, Clerk. I, William J. Magic, Chancellor of the State of New Jersey, do hereby certify that Edward C. Stokes, whose name is subscribed to the above cer¬ tificate, was, at the date thereof, and now is, tin* Clerk of the Court, of Chancery of the State of Now Jersey; that said attestation is in due form, that tin: seal thereto annexed is the seal of said Court, and that the signature of the said Edward C. -Stokes is in his own proper handwriting. 'Witness -my hand at the City of Trenton, this 410 1318 twenty-fourth day of August, A. D., nineteen hun¬ dred and three W. J. MAG IE. Note — This certificate is made pursuant to an act of Congress (Itev. Stat. U. S. 1S75, Sec. 005, p. 170). Complainant's Exhibit 127, Oct. 21, 1903, J. A. S., Ex'r. IN CHANCERY OF NEW JERSEY. Between 131 u John R. Hardin, Receiver of the North American Phonograph Company, Complainant, and Tlio Edison Phonograph Works, ot ala., Defendants. This matter coining on to be heard upon bill 1320 °f comI)laint and affidavits, and upon affidavits made in reply thereto, under an order to show cause why an injunction should not issue pursu¬ ant to the prayer of said bill and Charles J. Roe, appearing for tiie receiver, and Howard W. Hayss, of counsel with the defendants, having been heard in opposition: It. is, thereupon, on this ilhvcnty-flrst day of October, eighteen hundred and. ninety-five, on mo¬ tion of Charles J. Roe, of counsel with the com¬ plainant, ordered that, an injunction do issue re- straining the defendant, The Edison Phonograph Works from manufacturing for, or selling to any w i i. f f if ■v> person or persons or corporations other than the 1321 North American Phonogaph Company, or John R Hardin as receiver of the said The North American I heliograph Company, and any phonographs or supphes therefor for use within the United States and' Canada; and that the said defendant i homas A Edison, be restrained from purchasing phonograpJis or supplies therefor for use in con iiccf.ion with the kinotoscops and in the combined instrument known as the kinetophone, for use or sale in (he Unit:d States and Conada from thesaid Edison Phonographs Works, until the Author or- tier of this Court. And it is further ordered that this order is made 1822 upon the terms that if the defendant appeals there- from, that the complainant shall, if so desired by the defendants, consent to a hearing being had on siichappeal at the next regular term of the Court of Errors and Appeals. ALEX. T. McGILL, Respectfully Advised, C John R. Emory, Vice Chancellor. Endorsed : Filed Oct, 22, 1S05. I, Edward C. Stokes, Clerk of the Court of Chan¬ cery of tiie State of New Jersey, the same hein" a Court of Record, do hereby certify that the forego- 1323 nig is a true copy of order for injunction, filed Oct. 22. 1805, in the cause wherein John R. Hardin, re¬ ceiver of the North American Phonograph Company in complainant and The Edison Phonograph Works', cl ala., are defendants, now on tiie files of my office.’ In testimony whereof, T have hereto set my hand and affixed the seal of said Court, [Seat.,] at Trenton, this twenty-fourth day of August, A. D. nineteen hundred and three. EWDARD C. STOKES, Clerk. J, William ,1. .Magic, Chancellor or Hie State or Now Jersey, do hereby certify that. Edward C. Stokes, whose name is subscribed to the above certificate, was at the dale thcreor, and now is, the Clerk of the Court or Ohnnc'.-ry of the Slate or New Jersey; Unit sa,iil attestation is in due form, flint the seal thereto annexed is the seal of said Court, and that the signnlim' or the said Edward C. Stokes is in his own proper handwriting. Witness my hand at I he City or Trenton, this twenty-fourth day of August, A D. nineteen hun¬ dred and throe. W. J. MAG IE. Note — this certificate is made pursuant loan act of Congress (Rev. Slat II. S. 1875, Sec. 905, p. 170). Complainant's Exhibit 128, Oct. 31, 1903, J. A. S., Ex’r. IN CHANCERY OK NEW JERSEY Walter Cuttino, Executor, North American PnoNouiiAiMi Company, Defendant. A petition having been filed in a suit pending in this Court, between the Edison United Phono¬ graph Company, complainant, and the Edison Pho¬ nograph Works and the North American Pho¬ nograph Company, defendants, setting forth an agreement between Thomas A. Edison, the North American Phonograph Company, and one Jesse H. Lippineott, by which it was agreed that the North American Phonograph Company should not sell phonograph,* for use in countries other than the United States and Canada, nor interfere in any way with tlie foreign business of said Edison; and also a subsequent agreement, made March eleventh, eighteen hundred and ninety, by which said Edison assigned all his interest in Letters Patent for pirn- nographs to the Edison United Phonograph Com¬ pany, and agreed that lie would not sell phono¬ graphs for use in any other countries than the United States and Canada, nor interfere in nnv way with the foreign business relating to phono¬ graphs; and that by an agreement of the same date the Edison Phonograph Works, which had exclu¬ sive right to manufacture phonographs and sup¬ plies therefor, agreed with the Edison United Pho¬ nograph Company that it would not manufacture any phonograph machines, supplies or appliances, for sale or use in any part of the world except the United States and Canada, and would use its best endeavors, either by agreements or suitable marks, or otherwise, to prevent any such machines, sup¬ plies or appliances, which it should manufacture for sale or use in the United States and Canada, from being sold or used elsewhere; and praying that. John R. Hardin, who was appointed receiver of the North American Phonograph Company, an insolvent corporation, by an order made in this suit, might be made a party defendant to the said suit bj' the Edison United Company, and might lie re¬ quired, by the direction of this Court, to sell pho¬ nograph machines and supplies only in such way ns to show that they are not to be used in other countries except the United States and Canada, and reasonably provide against the shipment of the same to foreign countries: And an order of this Court having been made on the twenty-ninth day of August, amended on tliu thirty-first day of August, eighteen hundred and ninety-four, requiring the said receiver to show cause wiiy lie should not be made a party to that suit, and directing him in the meantime not to sell any phonographs or supplies therefor without dis¬ tinctly marking the some so as to indicate that they are not to be sent to or used in any countries other than the United States and the Dominion of Cannda, and also without requiring the purchaser to make a promise, in writing, not to sell or use sucli machines or supplies outside of the territory of the United States and Canada, and not to sell them to others to be by them sold for sale or use outside of the territory of the United States and Canada: And upon the hearing of the said order to show cause, this Court having made an order directing that said receiver be made a party to the said suit by the Edison United Phonograph Company, but vacating the said restraining order and direction to the receiver, to the end Hint an order conform¬ ing to the said agreement made with Thomas A. Edison by the North American Phonograph Com¬ pany might be made in this suit in which the re¬ ceiver was appointed : Tt is, thereupon, on this twentieth day of Sep¬ tember, eighteen hundred and ninety-four, ordered and directed that the said John 1!. Hardin, receiver, in making sales of any phonographs, or phono¬ graphic supplies or appliances, whether at public or private sale, shall, before the delivery of the goods, take from the purchaser a receipt, in writ ing, showing the number or the machine and the nature and quantity of the supplies and appliances, and also giving notice that such machines, supplies and appliances are sold subject to the provisions and 1333 obligations of an agreement, in writing, made Au¬ gust first, eighteen hundred and eighty-eight be¬ tween Thomas A. Edison and the North American Phonograph Company and Jesse H. Lippincott, by the seventh paragraph of which it was provided ns follows: “The North American Company shall not sell phonographs for use in countries other than the United States and Canadas, nor interfere in any way with the foreign business of the said Edison. The said Edison is also to have the ex¬ clusive right in perpetuity to manufacture phono¬ graphs and all supplies therefor for export.” ALEX. T. McOILL, inS4 C. Respectfully advised A. V. Van Fleet, V. C. Endorsed: Filed Sep. 21, 1804. TN CHANCERY OF NEW JERSEY. Between Wai.tek W. Cuttixh, Exr., d al.. Complainants, and North American PnoNoniiApn Co., Defendants, The receiver heretofore appointed in the above entitled cause having, after notice to the creditors and stockholders of the defendant company, pre¬ sented to the Chancellor his petition on the eighth K13C day of April, eighteen hundred aud ninety-five, re¬ porting that he had received an offer of One hun¬ dred and twenty-live thousand one hundred dollars for tile balance of the. assets of said defendant cor¬ poration remaining in his hands, from Thomas A. Edison, and Unit said bid had been made subject to confirmation by Ihe Court of Chancery aud asking tile advice of the Court thereon, and on said eighth day of April, objection having been made to the ac¬ ceptance of said hid before the Chancellor, and the matter having been regularly continued until the fifteenth day of April then next, and on that day Michael WL Nolan and Charles A. Boston having 1887 filed petitions herein in opposition to the accept” mice of said bid, and Hie matter having been then further continued until the seventeenth day of April then next, at which time it was further con tinned until the twenty-ninth day of April then next before tin* Chancellor in his Chambers in the City of Jersey City, and at tlmt time the said Michael' W. Nolan and Charles A. Boston having filed supple¬ mental petitions herein, and petitions having also been filed in behalf of Henry Stern and others in further opposition to the acceptance of said bid, and on the same day a petition of Thomas A. Edi¬ son having been filed herein, and the Court having 1338 been informed by said petition of Thomas A. Edi¬ son that said Edison is willing to waive any rights which ho might, have acquired by the sale of cer¬ tain stock of the Edison Phonograph Company, in the month of July prior to the appointment of the receiver, pursuant to the terms of a pledge of said stock made by the said North American Phono- graph Company to the said Thomas A. Edison, to secure a note of said Company to said Edison in the sum or Seventy-eight thousand live hundred eigh¬ teen 37-100 dollars which sale under said pledge had been objected to by the petitioners hereinbefore •147 mentioned, and said Edison having further ex- 1339 pressed Ins willingness by said petition that the receiver herein might sell said stock as an asset of said company subject to said Edison’s pledge, and the receiver having on said last mentioned day filed a supplemental petition herein, and the Court hav¬ ing heard Mr. R. Wayne Parker, of counsel for said M ichael \\\ Nolan ; Mr. E. Q. Keashey of counsel for said Henry. Stern, Mr. Charles A.Boston, in his own Iielmlf, Mr. Frederick H. Burn and Mr. Richard N. Dyer, of New York, of counsel with said Thomas A. Edison, and the said receiver, and the Court being of the opinion (lint, at this time said bid of Thomas A. Edison should not he accepted, and that the said receiver should sell said property of the North J34U American Phonograph Company at public sale af¬ ter compliance on Ids part with the directions of this order, It is thereupon, on this sixth day of May, instant, on motion of John R. Hardin, receiver of the said defendant corporation, ordered that the said re¬ ceiver ho and he is hereby directed not to nccept the said hid of Thomas A. Edison reported by him to this Court for confirmation, and to return to the said Thomas A. Edison the sum of One thousand five hundred dollars paid by him to the said re¬ ceiver as a deposit on said bid to bind the bargain. And it is further ordered that the said receiver l311 do, with all convenient speed, proceed to procure from Mr. Thomas A'. Edison an assignment of all of tile patents for phonographs and improvements thereon and appliances therefor, which under tint contracts between the said Edison and the said North American Phonograph Company the said Edison has agreed to assign to the said North American Phonograph Company, and if the said Edison shall decline on request to make said as¬ signment to said receiver ns directed, to undertake may bo advised and satisfied may be necessary tr protect tin* rights of bis trust; and also (bat be oh tain from said Edison a formal waiver in writing of all interest derived in virtue or the sale aforesaid of the aforementioned seized stock. And the said receiver is further directed when lie shall have obtained an assignment of said pat¬ ents, and said waiver to advertise all of the assets of the said corporation not heretofore disposed ol l>y him for sale at public auction to the highest bid¬ der, subject, however, to confirmation by this Court, and in the meantime the said receiver shall eon- 1848 tinoc to realize on the assets of said corporation in the manner heretofore pursued by him and reported to this Court by the receiver's petitions filed herein. ALEX T. McOILL, 1, Edward C. Stokes, Clerk of the Court of Cham eery of the State of New Jersey, the same being a Court of Record, do hereby certify that the forego¬ ing is a, true copy of order giving directions to re- . reiver, filed Sept. 21, 1804, and order refusing bid and for further directions to receiver, filed May 10, 1805, in the cause wherein Walter W. Cutting, Executor, ct ah, are complainants and Norih Amer¬ ican Phonograph Co. is defendant, now on the files of my office. In testimony whereof, T have hereto set my hand and affixed the seal of said Court. [Skat,.] at Trenton, this twenty-fourth day of August, A: T>„ nineteen hundred and three. EDWARD C. STOKES, Clerk. I, William J. Magie, Chancellor’ of the State of New Jersey, do hereby certify that Edward C. •110 Stokes, whose name is subscribed to the above cer- 1345 tificate, was, at the date thereof, and now is the Clerk of the Court of Chancery of the State of New Jersey; that said attestation is iu due form, thati the seal thereto annexed is the seal of said Court, and that the signature of the said Edward C. Stokes is in his own proper handwriting. Witness my hand at the City of Trenton this twenty-fourth day of August, A. D., nineteen hun¬ dred and three. „ W. J. MAGIE. Note— This certificate is made pursuant to an act of Congress (Rev. Stat. U. S. 1875, Sec. 005, p. 170>’ 1846 Complainant’s Exhibit 129. Essex County, ss. : Thomas A. Edison, being duly sworn, according to law on his oath, says; I am the inventor of the instrument known as the phonograph, and am one of the persons named in the annexed bill of com¬ plaint; I know of my own knowledge of the tran¬ saction attending the organization of the corpora¬ tions known ns the Edison Phonograph Company, the Edison Phonograph Works and The North American Phonograph Company, all of which are mentioned in the said bill; I have in my possession 1347 a. certified copy of the certificate of organization of The North American Plionograph Company; this company, as it appears by the said certificate, was organized on July fourteenth, eighteen hun¬ dred and eighty-eight, by certificate dated on that day and filed in the office of the Secretary of State two days afterwards; the objects for which the said company was formed are correctly set out in said bill ; the total capital stock of the said company authorized by the said certificate was Six million six hundred thousand dollars, divided into sixty- 3348 six thousand shares of the par value of One hun¬ dred dollars each, and the names of the parties who signed the certificate are correctly given in said bill; shortly after the filing of the said certificate the said company was organized by the incorpora¬ tors and almost contemporaneously with its organ¬ ization I became a stockholder in the said company; I was elected one of its directors; I have held the office of director in that company from that time until (lie present, and I am now one of its direc¬ tors; I was elected president of the company in the month of , eighteen hundred and , and f held the oftlee of president until the month of Jan- 334D uary, eighteen hundred and ninety-four when f sent to tlie company my written resignation of the office; tlie resignation was never accepted, and f have never since that time attended any of the meetings of the Board of Directors. In the month of March, eighteen hundred anil ninety-three the said company filed a list of its of¬ ficers and directors in the office of the Secretary of State, ns set on t in the second paragraph of the said bill; since that time T have signed no such certificate and think that none has been signed. Prior to the organization of The North Ameri¬ can Phonograph Company I had caused to be or- 1850 £ani’zc,l **le Edison Phonograph Compnny, and T granted to that company the sole and exclusive right to use my invention of the phonograph in con¬ sideration of the issue of the total capital stock of the company to me; the total capital stock of the compnny was One million two hundred thousand dollars, and at the time of the organization of The North American Phonograph Company I held the whole of this stock excepting one hundred nnd fifty shares; on .Tune twenty-eighth, eighteen hundred and eighty-eight, I made an agreement with Jesse TT. Lippencott, who was then contemplating the or- 451 gauization of The North American Phonograph 1351 Company and was its principal promoter, by which I agreed that I would sell and deliver to the said Lippencott the entire capital stock of the Edison 1 honograph Company except the said one hundred and fifty shares, for the sum of Five hundred thou¬ sand dollars; I subsequently transferred my stock ■n that company either to Lippencott or to The Aortl. American Phonograph Company i„ execu- cion of my said contract. Prior to the organization of Tlie Nortli Ameri¬ can Phonograph Company there was in existence a corporation known as the American Grnphophone Company, having its headquarters in tlie City of 1350 Washington, in the District of Columbia; that company granted to the said Jesse H. Lippencott the sole and exclusive right to use the patents owned by it In the organization of The North American Pho¬ nograph Company the parties -who subscribed to its capital stock, the sum. of Forty thousand dollars, paid in their several subscriptions in cash; the re¬ mainder of the stock, Six million five hundred and sixty thousand dollars, was issued to the said Jesse • IT. Lippencott in consideration of the transfer by him to that company of the stock of the Edison Phonograph Compnny which I had sold him and the rights which he had acquired from the Ameri¬ can Grnphophone Compnny; I have in my posses¬ sion the contract made between The Nortli Ameri¬ can Phonograph Company and tlie Edison Phono¬ graphic Works mentioned in the sixth paragraph of the said bill of complaint; said contract provided, among other things that Tlie North American Pho¬ nograph Compnny granted to the Edison Works the sole and exclusive right to manufacture the phonograph and the various devices and apparatus used and to be used in connection therewith and 1H64 the supplies therefore in perpetuity, ami agreed that it would not authorize the manufacture there¬ of by any other person or corporation; all the pho¬ nographs and appliances appertaining thereto which have been used by The North American Pho¬ nograph Company in its business since the date of its organization have been made by the Edison Pho¬ nograph Works; the said The North American Pho¬ nograph Company has never manufactured any of the said instruments and never owned or controlled any factory or works in which the same could lie manufactured. Tlie business which was done by The North 1360 American Phonograph Company during the early period of its existence was the sale and leasing to individuals nnd corporations of phonographs and phonograph graphophones, and that for some little time ntter its organization it did a. good business nnd its prospects for future success were very good, but in a short, time it. was demonstrated that the instrumenls ns manufactured nnd sold by the said company had lit tle or no practical or commer¬ cial value; they were generally used as curiosities to reproduce instrumental and vocal music and other vocal and articulate sounds, and were set up in public places for purposes of amusement nnd 1360 exhibition; from this use of the said instrument the company at first derived some revenue, but. ns soon ns the novelty of the instrument wore off nnd the public became familiar with its capacity the in¬ come of the company diminished so that in the early part of the year eighteen hundred and ninety- two the company found itself in financial difficul¬ ties and unable to meet all the obligations which it, had assumed ; it thereupon authorized the issue of the bonds mentioned nnd set. out in the eighth para¬ graph of said hill ; the total issue of these bonds was Three hundred thousand dollars, three hun¬ dred bonds of the denomination of One thousand dollars each; they were dated May first, eighteen hundred and ninety-two and payable in ten years with interest at six per cent, payable semi-annually on May first and November first of each year; it was provided in those bonds and in each of them that in case the said company should make default in the payment of the interest accruing upon any of tlie said bonds for thirty days after such interest should have become due and payable and had been duly demanded, then and in such ease it should he lawful for the holders of a majority of all the saiil bonds outstanding, by written notice to the com¬ pany, signed by them, to declare the principal of all | the said bonds to be thereafter immediately pay¬ able, and that upon such default and tlie giving of such notice the principal and all arrears of interest on said bonds should be forthwith due and payable. I am tlie holder of two hundred and twenty of these bonds, aggregating the sum of Two hundred and twenty thousand dollars; the interest which ac¬ crued on these bonds on the first day of May, eigh¬ teen hundred and ninety-four, was not paid at ma¬ turity, and on the eighteenth day of Juno, eighteen hundred and ninety-four, I wrote a letter to the said company of which the following is a copy, “I hereby demand payment of the sum of § (1,000, in- j terest on the bonds of your company which became due and payable on the first day of May last past. The hearer, W. E. Gilmore, is hereby authorized to receive payment of the said interest for me,” this letter was signed by me and sent by Mr. Gilmore to the said company. On the same day I received a reply thereto of which the following is a copy: “Jersey City, N. J., Juno IS, 1804; Thomas A. Edi¬ son, Esq., Orange, N. J. Dear Sir: We are in re¬ ceipt of your favor bearing date IS inst., nnd in re¬ ply thereto beg to say that it is impossible to com- 18(50 ply with your demand for the payment of the sum of !}iG,fiOO interest on the bonds of this compauy standing in your name this dale, and registered on the books of the company as such at this dale, and said interest being due on .May 1, IS!) I, and still unpaid. Yours truly, The North American Pho¬ nograph Co. Scot T remain, Treasurer.” Since Hint time no portion of the said interest has been paid to me. On the sixth day of August, eighteen hundred and ninety-four I joined with Charles U. Carman and the complainants in this suit in a declaration that the principal of the said bonds was immediately due and payable, n copy of said decln- 1801 ration is hereto annexed nnd made part hereof; the persons who signed the said declaration own in the aggregate Two hundred nnd sixty thousand dollars out of the total issue of three hundred thousand dollars of the said bonds. The North American Phonograph Company in the course of its business became indebted to nie in the sum of seventy-eight, thousand live hundred and eighteen dollars and thirty-seven cents, in addition to tile amount owing to me on my bonds, nnd on April first, eighteen hundred and ninety-four, the said company gave me its promissory note for that amount, payable ten days after demand, at No. 44 1802 ^ron^ street in the City of New York, with intcresr at six per cent,. The said company had become pos¬ sessed of the total capital stock of the Edison Pho¬ nograph Company, aggregating twelve thousand shares, and it pledged the whole thereof to mo as collateral security for the payment of the said note' T have many times demanded the payment of the money due on that note, but the same lins never been paid to me; and on the thirteenth day of Au¬ gust, eighteen hundred and ninety-four, after duo notice to the said company, nnd public advertise¬ ment, the said stock was sold by me at the Court House in the city of Jersey City, in the County of 1383 Hudson, for the sum. of Ten thousand dollars; the remainder of the moneys secured by the snid note and stock have never been paid. I am the president of the Edison Phonograph Works. The North American Phonograph Com¬ pany is indebted to the Edison Phonograph Works in the sum of about thirty-six thousand dollars ou open book account ns set out in the tenth 'pa ragraph of the said bill; the Edison Phonograph Works have made all reasonable efforts to collect the said moneys, have many times made demands upon the North American Phonograph Company therefor, but have not been able to secure payment thereof, 1364 and that the same is now owing to the said Edison Phonograph Works. I am familiar with the property owned by The North American Phonograph Company; it consists entirely, outside of its rights in the inventions of phonographs and phonograph-graphophoncs; their value at the present time to any one going into the business of selling and leasing phonographs would not exceed twenty-five thousand dollars; it is most¬ ly old stock made three years or more ago, some of the instruments have been used nnd need repnirs before they can be put upon the market, nnd in fact there are very few of the instruments which can he placed on the market at the present time without 3306 more or less work being first done upon them. The value of the rights nnd licenses which the North American Phonograph Company acquired as is set. forth in the said bill from the American Oraphophone Company which company has repudiated the same is problematical. I don’t think that their value can be estimated at the present, time; their value depends upon many •contingencies, the practical application thereof is ■subject to many conditions, and the making of a 307 strumont depends upon correct business methods Uie necessity of a large money capital and upon im¬ provements to adapt the instrument to the needs and requirements of the public, and in my opinion these rights in the hands of the present company are of no value whatever at the present time and cannot be made available as a valuable asset for the payment of the company's debts. I am familiar with the whole history of The North American Phonograph Company. It was the original design of the company and its oilicers and directors that Hie principal portion or its busi¬ ness should consist of manufacturing and owning and leasing phonographs and phonograph grupho- phones to individuals and corporations, and to this end the said company procured the said Edison Phonograph Works to manufacture a large number of phonographs; these were delivered to The North American Phonograph Company nml that company succeeded in leasing a number of them and obtain¬ ing some revenue therefrom, but the demand of the public for such an instrument is very limited, and it was more than supplied by the large number of phonographs which the said company had had con¬ structed ; for the past three years or more the said company lias had no new phonographs built, and it has now practically ceased leasing the instruments, the principal business which the company is now engaged in is the repairing and re-constructing of the old phonographs and the selling of them to in¬ dividuals and corporations at such prices ns they are able to get; the sales of the company of these old machines arc not sufficient to pay the necessary running expenses of the business and the company is and for many months has been running at a loss; in case this business is allowed to continue there will in a short time be nothin" left for its creditors: •157 it is now using up its capital; it has on expensive V5G9 office in the city of New York and has been paying large amounts in salaries, aud is expensively con- ducted; the company is daily running deeper into /i debt The said company is insolvent; it has not suffi¬ cient funds to carry on its ordinary business, and in the condition of the finances of the country, con¬ sidering the fact that the phonograph as now used and exploited is not a necessity, it is very uncer¬ tain whether the business can be made to pay its expenses for some time to come; its further prose¬ cution by the said company would necessarily tend to the sacrifice of the rights of its creditors. 1870 Thomas A. Edison. Sworn and subscribed to before me this ) fifteenth day of August, 1891. J Wm. D. Gibby, Master in Chy of N. J. T, Edward C. Stokes, Clerk of the Court of Chan¬ cery of the State of New Jersey, the same being a Court of Record, do hereby certify that the forego¬ ing is a true copy of affidavit of Thomas A. Edison r' J attached to and a part of bill of complaint, filed Aug. 1C, 1S94, in the cause wherein Walter Cutting, Exr., & at, are complainants and The North Amer¬ ican Phonograph Co., is defendant, now on the files 1371 of my office. In testimony whereof, I have hereto set my hand and affixed the seal of said Court, [Seal.] at Trenton, this fifteenth dny of Decem¬ ber, At D., nineteen hundred and three. EDWARD C. STOKES, Clerk. I, William J. Magie, Chancellor of the State of New Jersey, do hereby certify that Edward C. Stokes, whose name is subscribed to the above cer- 1372 tiflcate, was, at the date thereof, and now is, the Clerk of the Court of Chancery of the State of New Jersey; that said attestation is in due form, that the seal thereto annexed is the seal of said Court, and that the signature of the said Edward C. Stokes is in his own proper handwriting. Witness my hand at the City of Trenton this fif¬ teenth day of December, A. D., nineteen hundred and three. W. J. MAC. 1IC. Note — Tli is certificate is made pursuant to an act of Congress (liev. Stnt U. S. 1875, See. 005, p. 'fcl. S. (Circuit (Court, Southern Sistrkt of £Jnu 'Qorlt. NATIONAL PHONOGRAPH ■ CO. , COMPLAINANTS EXHIBIT No. 132. “Edison Patents.” U. S. Circuit Court, Southern District of New York, PIW I H Filed May' 2, 1905, John A. Shields, Clerk. Complainant's Exhibit 145, Offered at the Oral Argument on Final Hear¬ ing. AGREEMENT. Tub American Gramioi’iione Company and Jesse II. Lippincott. March 20, 1SSS. Tins Achke.munt, made this 20th day of March, in the year One Thousand Eight Hundred and Eighty-eight, by and between Tiib American Urapiiopiionb Company, of -West Virginia, of the one part, and Jesse II. hippiNcim’, of the City of New York, party of the second part. WITNESSETH : 1. That for and in consideration of the several covenants and undertakings hereinafter expressed to lie kept and performed by the party of the second part, the American Grnpliophoue Company lias agreed and does hereby agree to furnish to the said party of the second part, for sale or lease and use in the United States (excepting the States of Illinois, Wisconsin and Michigan) upon the terms, subject to the conditions and with the exceptions herein expressed, all the graphophone instruments and supplies therefor manufactured by or for the said American Graphophone Company for sale and use in the said territory, under its agreement with and license from the Volta Graphophone Company, to the extent of at least five thousand (5,000) of the said instruments in each year after the first year, it being understood that said American Graphophone Company shall speedily provide for the delivery of tiie three hundred instruments now in process of manufacture, and slmll arrange for the man u fad arc and delivery of at least one hun¬ dred inslrnmeiils per week, with all possible dis- pal ch, and as many more per week as the parly of the second part slmll in writing slate that he will lake and pay for, as hereinafter provided; hut after said American (Irnphophone Company shall have arranged for a weekly output, as above;, no increase in said number shall he reipiired, except after no¬ tice in writing from the party of the second part, ei|ual to thirty days, for each increase of thirty instruments per week. All re(| nisi Hons by the I>urty of the second part shall be in writing and slmll be tilled as promptly as may be with diiigent ell’ort by the said American (iruphophone Company in the manufacture or the same. The States of Illinois, Wisconsin and .Michigan are excepted from this agreement, and as to the said three States, the said American tirnphophouu Company reserves and retains all its present rights as fully as if this agreement were not made. Provided, that in case the said American Grnplio- Phone Company shall not make a contract with or grant license to any other person or persons for the said three States within ninety days after the execution of these presents, then the said three States shall lie added to the territory included within this agreement, and be subject to all the provisions, terms and conditions herein contained. Provided further, that if at any time after ono year from the dale of this agreement the said American (irnphophone Company shall he unable to deliver to the said parly of the second part, in¬ struments and supplies, for which the said party of the second part shall have made due rei|uisition, as. herein provided, within a reasonable time after such requisition shall have been made, then the said party of the second part, after notice in writ¬ ing to the said Company, shall have the right to _ manufacture, or cause to he manufactured, instru¬ ments or supplies, or both, necessary to fill so much of such requisitions as the said American Graplio- phone Company cannot furnish, paying to the said Company on such instruments the sum of twenty- five ($25) dollars each, and on such supplies the prices heroin named, or hereafter mutually agreed upon, less the actual cost of such manufacture: and provided further, that such manufacture of instru¬ ments or supplies shall be under the supervision and approval of an inspector appointed by the said Company, the cost, of whose services shall be added to the said sum of twenty-five (§25) dollars; and provided further, that the party of the second part slmll, in such case, give the said Company timely notice of the placu where such manufacture slmll lie ordered, and the number so ordered, and no manufacture under this provision shall bo begun, or agreement for such manufacture be made, until the same shall have been approved by the said American Graphophoiic Company in writing. 2. If, at the expiration of two years from the date hereof, there shall be in any portion of the territory covered by this agreement a demand for the said instruments or supplies which the said party of the second part shall neglect or fail to take appropriate measures on their (his) part to meet, the said American Graphophono Company may give notice thereof to the said party of the second part; and if, at the expiration of thirty days there¬ after, the said neglect or omission still continues, the said American Graphophono Company may pro¬ ceed to supply the said demand through agents oi otherwise, provided it shall not interfere with the delivery, to the party of the second part, of instru¬ ments and supplies, for which requisition shall have been made by him. 3. Tlio said American Graphoplionc Company further agrees to defend the said party of the sec¬ ond part against, all sails for infringement, by rea¬ son of the said instruments or supplies of patents not. owned or controlled by the said Company, and to par all final judgments rendered in sncli suds, provided Die said Company shall have notice of such suit, mid opportunity to defend the same, such notice to be given in time to allow the said Com¬ pany lo make answer, plea or oilier appropriate defense to the original bill, petition, complaint or other original pleading, and defend through coun¬ sel of its own selection; and the said American Gruphoplione Company further agrees to institute and prosecute proper legal proceedings for all in¬ fringements of the patents under which the said instruments and supplies slmll he manufactured and used by the said Company, or its assigns or licensees, upon due notice being given to said Com¬ pany of such infringement, and upon the said Com¬ pany being advised by its counsel ot counsel of its selection that such alleged infringement is unlaw¬ ful, and that legal proceedings to restrain or enjoin the same, or to recover, damages for such infringe¬ ment can he successfully maintained. -i. The said party of the second part, for and in consideration of the foregoing agreements on the part of the said American Graphoplionc Company, has agreed and does hereby agree lo take from the said Company and pay for on delivery, at the prices hereinafter specified, at least live thousand of the said graphoplionc instruments in each year, and as many more as diligent effort on his part can cre¬ ate a market or demand for; hut until Hie said American Grnphophone Company is able to begin its deliveries, ns provided for in paragraph 1, the party of the second part shall only be required to take so many as said Company can with due dili¬ gence make and deliver. 5. The party of the second part agrees to pay for said graphoplionc instruments, in complete order and ready for use, delivered at the place of manu¬ facture boxed, ready for shipment and free on board, ten ($10) dollars on each of the first three hundred instruments over and above the cost of manufacture, inspection, adjustment, boxing nnd delivery; fifteen ($15) dollars over and above the like cost on each of the next seven hundred instru¬ ments; and for all subsequent instruments the sum of forty ($40) dollars each, provided that if the gross cost of the instruments to the said American Graphophoue Company (including any royalties which tiie said Company may have to pay, and the usual manufacturers’ profits, in case the Company shall establish its own manufactory) in complete order and ready for use, delivered at the place of manufacture, boxed, ready for shipment and free on hoard, shall exceed the sum of twenty ($20) dollars each, then the additional cost beyond the said twenty ($20) dollars shall be added to the said sum of forty ($10) dollars and paid by the said party of the second part, provided that it any competing instruments shall bo placed upon the market, and thereby render it advisable or neces¬ sary, in the opinion of the said Company, to re¬ duce the selling price of the said company’s instru¬ ments below eighty (§S0) dollars each, then the said forty ($40) dollars shall be reduced pro rata; but no reduction in the selling price below eighty ($S0) dollars shall be made without the written consent of the said American Cirapliophone Com¬ pany [and if the selling price of instruments is over one hundred ($100) dollars, then the excess above this amount is to be equally divided between the American Graphophoue Company and the party of the second part.] The selling price of cylinders shall be fixed from time to time by the American Graphoplione Com- Piin.v, hul. sliiill not lit! less than two coals cadi or more Ilian throe conls ondi, except by nuitunl con- m*iiI, anil llio parly of I lie kocoikI jiart slinll pay 0n (IoIivit.v lo said Company for sniil cylinders sixty per coni, of said soiling price. At this price, said cylinders me lo lie boxed mid crated for sliipmenl, and delivered free on board at. cither of the depots of supplies which . y be heroin., fler dosignulod b.v the said American limphophone Companv. All parts of instruments shall be procured from the said American (iraphophone Company and lie pan for at one-half of the. list prices that may he established by the said Company. All instruments, parts of instruments, and supplies delivered to the said party of (he wuiml purl, or upon Iim requisition within or dn nil}; eacli and every month, shall he iTr il' d ‘’"i'1 f,,r 0,1 '«'«»« Uio 13th day the next followni}; month, hut the indebted- 2° of w,:oml part, on account mic detiyencs.sha11 not at any l ime exceed one- , , ° . l)K,ln 8,1,11 °r H'e I’oinl given by the said . 0V,I'.L‘ MM0“d l>“rt "« security, ns herein pro- ,, 1 ^Provision, as to the amoiinl of imleht- <1 .ess and limes of settlement and payment, shall Co n U" md,,,,L‘ 1,11 Payable to the said . ,m account of iiislruinents, purls 0f in¬ i',, .T"0"1? and supplies nmnnfaetuml or caused to " innfiK lmcd by (be said party of the second pail, under and by virtue of the provisions con¬ tained in this agreement. he u-iMIL T"* 1>1U ty of tllc secoml part agrees that o il not, „„r shall his agents or emplaces, use, . ’ ( 01 “H, directly or indirectly, any in- 11 ,',l00, 000) dollars, with sureties, to be approved by a vole of the Hoard of Directors of the said Company, conditioned for the faithful per¬ formance and observance of the said parly of the second pari of ail the undertakings, conditions and ,s Ml h t on his part to he kept and performed. This agreement is made on the part of the sit id American Grnphophone Company, subject to the approval of its stockholders, by a majority vote, at a stockholders’ meeting. In testimony whereof, the said American Grnphophone Company, by (he signature of its 1 resident and Secretary, and the affixing of its corporate seal, and the said party of the second pai l, by its hand and seal, have executed these pres¬ ents the day and year first above written. la the presence of: 1 1 Aim v M. Payne, John F. Cox. Jam ns G. Payne, President of the American Grnphophone Company ("•’ A. (». co.] of West Virginia. Austin Heiir, Secretary Am. G. Co. JlSSU IT. Lll'i'INCOTT. [seal.] [situ Complainant’s Exhibit 146, Offered at the Oral Argument on Final Hear¬ ing. IN TIII3 UNITED STATES CIIiCUIT COURT Fou tub Southern District op New York. John E. Helm, Coiuplaiimul, American Graphophonb Com-\ I'ANY, Columiiia Phono-/ oiiAi'ii Company, Gen and New York PuoxnuHAPiiJ Company, Defendants. Bill of Complaint. To THE HONORABLE JUIKIES OP TUB CIRCUIT COURT op the United Status, for tub Southern District op New York. John E. Helm, of Newark, in the State of New Jersey, a resident and inhabitant of the State of New Jersey, who brings this suit on behalf of him¬ self and all other stockholders of New York Phonograph Company who cause themselves to be made party thereto and share in the expense there¬ of, brings this, his hill of complaint, against the American Grnphophone Company, a corporation duly organised and existing under the laws of the State of West Virginia, and having an office and duly organized place of business at New York, in said District, and the Columbia. -Phonograph Com¬ pany, a cor]>oralion duly organized and existing under Hie laws of the State of West Virginia, and having an ollicc and duly organized place of busi¬ ness at New York, in said District, and Now York Phonograph Company, a corporation duly organ¬ ized under the laws of the State of New York, and having its principal ollice at 'J'arrytown, in the State of New York. 1. And thereupon your orator complains and says that Chichester A. Dell and Sumner Tnl liter, then of Washington, aforesaid, were the original, first and joint inventors of certain new and useful improvements in recording and reproducing speech and other sounds, which were not known or used in this country, or patented or described in this or any foreign country prior to their invention there¬ of, and which lmd not. been in public use or on sale in the United States for more than two years prior to their application for letters patent therefor. 2. That on the 271 li day of .'June, 1SS5, the said Chichester A. Dell and Sumner 'Painter made ap¬ plication in due form of law to the Commissioner of Patents for the grantof letters patent of the United States for the said invention, and then and there fully complied in all respects with the provisions 1 | i i Is r the laws of the United States in such case made and provided. 3. That, due proceedings being bad upon said application, upon the 4th day or May, ISSti, letters patent of the United States, in due form of law, were issued and delivered to said Chichester A. Dell and Sumner 'Painter in the name of the United States, under the seal of the Patent Ollice, and signed and countersigned respectively by the proper 1316 o Ulcers of tlic United States, and numbered 311,214, granting to said Chichester A. Bell and Sumner 'Painter, their heirs and assigns, for the term of 0 seventeen years from said 4th day of May, 1SSG, the full and exclusive right to make, use and vend the said invention throughout the United States and the Territories thereof, as by reference to said letters patent, or a duly authenticated copy there¬ of, here in Court to be produced, will more fully and at large appear. 4. That the said Stunner Tainter was further the original, first and sole inventor of a certain new and useful improvement in apparatus for re¬ cording and reproducing sound or sonorous vibra¬ tions, not knowu or used in this country, or patent¬ ed or described in any printed publication in this or any foreign country prior to It is invention there¬ of, and not in public use or on sale in the United States for more than two years prior to his appli¬ cation for letters patent therefor. {~‘ 5. That on the 4th day of December, 1SS5, said Sumner 'Painter made application in due form of law to the Commissioner of Patents for the grant of letters patent for the United States for said in¬ vention- and then and there fully complied in all respects with the requirements and provisions of the laws of the United States in such case made and provided. (1. That due proceedings upon said application boiug lmd, upon the 4th day of May, 188(1, letters patent of the United States were issued and de¬ livered to said Sumner Tainter, in the name of the United States, under the seal of the Patent Ollice, signed and countersigned respectively by the proper olliccrs of the United Stc lc« i i 1 i e 1 1 341, 2S8, granting to said Sumner Tainter, his 1317 said, and in and to the invention secured thereby, as by reference to said instrument, or a duly au¬ thenticated copy thereof, here in Court to be pro- SfV duced, will be more fully and at large appear. 10. That on the 29th day of June, 1887, the said The Volta Graphophoue Company, by an instru¬ ment. in writing, duly signed and delivered, did grant to the said American Graphophonu Com- 'pany the exclusive right and license, under the let¬ ters patent aforesaid, and each of them, to make, use and vend aparntus for recording and reproduc¬ ing speech aud other sounds, throughout the United States and the Territories thereof, ns by reference to said instrument, or a duly authenticated copy thereof, here in Court to be produced, will more . fully aud at large appear; and that on the 24th day of January, 1893, the said The Volta Grapho- plionc Company, by an instrument in writing, duly signed, scaled and delivered, and recorded m the United States Patent 'Ofllce the 25th dny of Janu- (-j ary, 1S93, did give, grant, assign arid convey to the said American Graphophoue Company, its succes¬ sors and assigns, the entire right, title and interest in and to said letters patent No. 341,214 and No. 341, 2SS, and in and to the invention secured there¬ by, as by reference to said instrument, or a duly authenticated copy thereof, here in Court to be produced, will more fully and at large appear. 11. That the said American Graphophonc Com¬ pany has been, since the date of the assignment last mentioned, and is now, the owner of the said letters patent, and each of them, and of the rights and privileges secured thereby, and is and has been, since the date of the exclusive license described in paragraph ten of this bill of complaint, entitled to the exclusive right to make, use and vend the said inventions within the limits aforesaid, except as hereinafter set. forth, ami has been ami is, save for the doings of tiic said defendants ami others acting in concert with them, in the exclusive possession of said rights and privileges, except 11s hereinafter set forth, and is entitled to the exclusive use, henclit and advantages of the said inventions and improve¬ ments, except as hereinafter set forth. 12. That the said inventions and improvements are of great commercial value and practical utility; that a great public interest has been manifested therein and a large demand created for apparatus constructed in accordance with or embodying the same; that in order to supply this demand, and to confer upon the public the advantages and benefits of the said inventions, the American (jraphophonc Company anti its predecessors in title have invested huge capital in nct|uiriug said patents and in adapting and perfecting such apparatus, and have, at large expense, devised and constructed ma¬ chinery, tools, appliances anil other accessories necessary or useful in the manufacture of such ap¬ paratus, and have employed numerous skilled work¬ men, inventors anti mechanics in connection there¬ with ; anti that such investment has been made and sueli expense incurred upon the faith reposed in the said letters patent, granted by the Government of the United States, as aforesaid, and in the rights and privileges secured thereby. 13. That on or about the titli day of February, 1SS!), the Norlli American Phonograph Company, a corporation organised under the laws of the State of New Jersey, acting under authority of and agree¬ ment with Jesse 11. Iiippincolt, sole licensee of the said American Gruphophtmc Company, by an in¬ strument. in writing under its corporate seal, grant¬ ed to John 1\ Haines, acting for the New York Phonograph Company, a corporation to be organ¬ 14. That within six months from the date of said agreement the said John 1‘. Haines caused the said The New York Phonograph Company to be organized ns a stock company, under the laws of the State of New York, with a capital stock of §1,250,000; divided into 12,500 shores of the par .value of §100 each, for the purpose of assuming the duties and obligations and transacting the business provided for by said agreement, and duly assigned to it his rights under the said agreement. ized under the laws of the Slate of New York, with the authority, assent and approval of the American Grnphophoue Company, the exclusive license to use mid vend (lie inventions and improvements covered by said patents Nos. 311, 211 and 371, 28S within the Slate of New York, excepting the Counties of New York, Westchester, Richmond, Queens, Suf¬ folk and Kings, until the respective termination of the said patents. By virtue of which instrument The New York Phonograph Company became pos¬ sessed of the exclusive license to use anil vend said inventions and improvements in said territory dur¬ ing the life of the said patents. And your orator has annexed to this bill, and made part thereof, a copy of said instrument, marked “Schedule A," and begs to refer thereto for greater certainty, if it he found necessary so to do. A I ^ license to use ami vend the inventions and improve¬ ments covered by said patents Nos. tM 1,21-1 and 3-11,288, within the Counties of New York, West¬ chester, Kichmoud, Queens, Suffolk and Kings, in the State of New York, until the respective ter¬ mination of said patents. Jly virtue of which in¬ strument the Metropolitan Phonograph Company became possessed of the exclusive license to use and vend said inventions and improvements in said territory during the life of said patents. And your orator has annexed to this hill, and made part hereof, a copy of said instrument, marked “Sched¬ ule 11,” and begs to refer thereto for greater cer¬ tainty, if it be found necessary to do so. 17. That the title to said patents Nos. 241,214 and 341, 28S, acquired by the ssiid American Grnphophone Company from The Volta Grupho- phoue Company on the 24th day of January, 1893, as hereinbefore set forth in paragraph ten of this bill, enured to the benefit of said New York Phono¬ graph Company, under the said licenses herein¬ before set forth. Mi. That thereafter, with the consent of the North American Phonograph Company, said Metropolitan Phonograph Company and said The New York Phonograph Company were, in or about the month of September, 1890, consolidated, under the laws of the Stale of New York, into a single corporation, said corporation being said defendant New York Phonograph Company, and thereupon, and by virtue of said consolidation, all the rights and privileges of the Metropolitan Phonograph Company and of the New York Phonograph Com¬ pany, hereinabove set forth, and all other property of each of said two corporations, devolved upon, became invested in and were acquired by said New York Phonograph Company. 18. That the validity of said patents Nos. 341,214 and 341, 288 has been many times sustained by de¬ crees of Courts of competent jurisdiction ; that in a cause in the United States Circuit Court for the Northern District of Illinois, in which the Ameri¬ can Graphophouu Company was complainant, and Edward II. Amet was defendant, a decree was made on Anal hearing, sustaining the validity of claims 19, 20, 21, 22 and 2-1 of patent No. 341,214, the decision in which cause is reported in 74 Federal Itcporter, page 7S9; that in a cause in the United States Circuit Court for the Southern District of New York, in which the American Grnphophone Company was complainant and Cleveland Walcutt was defendant, a decree was made on filial hearing, sustaining the validity of claims 7, 8, 10 and 17 of patent No. 341,214, and claims 1, 4 and 37 of patent No. 341, 28S, the decision m which cause is reported in 87 Federal Itcporter, page 550; that in a cause in the United States Circuit Court for the Southern District of New York, in which the American Grnphophone Company was complainant and Mov¬ ing L. Leeds mid others were defendants, a decree was made on (Inal hearing, sustaining the validity of claims 19, 20, 21, 22, 23 and 2-4 of patent No. 341,214, the decision in which cause is reported in S7 Federal Itcporter, page S73 ; that in a cause in the United States Circuit Court for the Southern District of New York, in which the American Grnphophone Company was complainant and Cleveland Walcutt and Edward F. Leeds were de¬ fendants, a decree was made on final hearing, sus¬ taining the validity of the claims of patent No. 341,214, covering sound records, as manufacturers, which claims are numbered 7, S, 10, 12, 17 and 18; that the decision in said Inst named cause is not reported, but is referred to in the case of the Ameri¬ can Graphoplionc Company vs. Walcutt, reported jg 80 Federal Itcporter, page 4GS; that in a cause in the United Slates Circuit Court for the Southern District of New York, in which the American Gruphophone Company was complainant ami the Universal Talking Machine Manufacturing Com¬ pany was defendant, brought to restrain the in¬ fringement or patent No. 311, 211, Judge Lncombe, on the 3d day of September, 1!)02, on a motion for a preliminary injunction to restrain the defendant from infringing claims 7, 10, 17 and 18 of said patent, granted an injunction pumtnilv tile, re¬ straining the defendants “from directly or indi¬ rectly making or causing to he made, * * * any disk sound records whose production involved the employment of the engraving method of producing the original record, or the use of the wax-like re¬ cording material or engraving apparatus; likewise any matrix obtained from such original engraved sound record or from such wax-like original; like¬ wise any engraving apparatus, tool or appliance,” tlie decision in which cause lms not been reported, and that said decree for preliminary injunct ion lias been alllrmed by the United States Circuit Court of Appeals for the Second Circuit. .11). That the said defendants and others acting in concert with them, since the giant of said letters patent, and. each of them, and since the date of the exclusive license, last above mentioned, within the said Southern District of New York, and elsewhere in the State of New York, did jointly, wrongfully, unlawfully, and with intent to injure said New York Phonograph Company, and to deprive it of the just profits resulting from using and vending said inventions, have, without, the license or consent of said New York Phonograph Company used or caused to he used, and sold or caused to he sold, a largo number or machines and apparatus for re¬ cording and reproducing sounds, known as “Graphophones and Graphophonc Tablets” and “Gruphophone Itecords,” nil containing or embody¬ ing or operating in accordance with the said inven- » lions or improvements, substantially as described 11,1,1 claimed in the said Letters Patent Nos. 341,214 nud 311, 2SS, and each of them, and in infringement of the exclusive rights granted to said New York Phonograph Company as aforesaid; and that the said defendants jointly have derived and received, and still are deriving and receiving, great gnius and profits from such unlawful use, hut to what extent your orator is ignorant and cannot set forth, and threaten to continue such infringement in the future to a still greater extent. 20. That each machine or apparatus so used and sold by the said defendants contains, embodies or operates in accordance with the inventions or im¬ provements covered by both the Letters Patent aforesaid, or material and substantial parts thereof, and especially by claims 1, 2, 3, 4, 5, 0, 7, 8, 0, 10, 12, 15, 10, 17, IS, 10, 20, 21, 22, 23, 24, 27, 30, 31 and 32 of said patent No. 341,214; and by claims 1, 4 and 37 of said patent No. 341, 2SS. 21. That your orator is a stockholder of said New York Phonograph Company holding one thousand and sixty shares of stock of the par value of one hundred dollars each; that the capital stock of the said New York Phonograph Company consists of twenty-five thousand shares of the par value of one hundred dollars each; Hint your orator’s said stock was issued to him at the following dates: Five shares on December loth, 1002, and one thousand and fifty-five shares on January 14th, 1903; and that your orator was a shareholder of said corpora¬ tion at the time of the transaction of which he complains as aforesaid; that John P. Haines now is and for more than a year last past has been president of the New York Phonograph Company 1324 nrnl during that time has Jind entire charge of its affairs; that on the iirst day of April, 1003, your orator caused demands in writing signed by your orator to lie made in the said John J’. Haines that a suit; should lie brought by the said New York Phonograph Company against the said American Grnphophonc Company and Columbia Phonograph Company General as follows: “Xew Yoiik, X. Y., .March 30, 1003. “To Xkw Yoiik PnoNoaiiAi'ii Company : “I, John E. Helm, a stockholder of Xew York Phonograph Company holding Ten hundred and bi.\ty shares, hereby reipiest said corporation forth¬ with to bring suit against the American Graphs- phone Company for infringing Belters Patent of the United States covering inventions of Alexander Graham Pell, Chichester A. Hell and Charles Siim- r,^nteP 8Ut HUt lh within the State of New York any machine or apparatus embodying or constructed or operated in accordance with the inventions or improvements set forth in the two letters patent aforesaid, or either of them; and !1. That your Honors will grant unto your orators a preliminary injunction, issuing out of and under the seal of this llororable Court, enjoining and re¬ straining the said defendants, American Grnpho- phone Company and Columbia Phonograph Com¬ pany General, and their associates, attorneys, ser¬ vants, clerks, agents and workmen to the same pur¬ pose, tenor and effect, as hereinbefore prayed for, with regard to said perpetual injunction; and J. That the defendants he decreed to pay the costs of this suit; and 5. That your orators may have such other and further relief as the equity of the ease may require; To the end, therefore, that the said defendants inay, ir they can, show why your orator should not have the relief hereby prayed for, end may fall, true and direct answer make, but not under oath, nnswer under oath being expressly waived, accord¬ ing to the best and utmost of their knowledge, in¬ formation, remembrance and belief, to the several matters hereinbefore averred and set forth, ns fully and particularly as if the same were reueuted. paragraph by paragraph, and said defendants there¬ to severally and specifically interrogated, may it please your Honors to grant unto your orator a writ of subpoena ml respondendum issuing out of and under the seal of this Honorable Court, directed to said defendants, the American Graphophone Com¬ pany, Columbia Phonograph Company General, and New York Phonograph Company, commanding them to appear and make nnswer to this bill of com¬ plaint, and to perform and abide by such order and decree herein as to this Court may- seem just. And your orator will ever pray, &e. Punnv, Squiiu; & Eowe, Solicitors and of Counsel for Complainant James AV. Funny, Jr., Of Counsel. State ok New Jeiisev, ) _ County of Essex, j ‘ s- ‘ John E. Hkom, being duly sworn according to law on his oath, says: I am the complainant in the foregoing bill named. I have read the said bill. The facts therein set forth as far ns they refer to my acts are true, and so far as they refer to the acts of others, I believe them to be true. John E. Helm. Sworn to and subscribed j this 2d day of April, >• 1903, before me. ) Fukii’k C. Fischeu, [beau] Notary Public For New Jersey. 1827a Schedule A. I [Schedule A sets forth n copy of tin* agreement inmli* February t>, 1SSII, between tin* North A m«*ri- ( j fit ti J’houogrnph ( iimp.inv mid John 1’. Haines, for which see Complainant's Exhibit -I!).] Schedule B. [Schedule li sets forth n copy of the agreement ninth! Octohcr 2, 1 t>SS, hetween the North Ameri¬ can I’honograph Compiiny mid the Metropolitan I'houogruph Company, for which see Cpinpiuiuant’s Exhibit, HO.] (Endorsed) — IT. S. Circuit Court, Southern Dis¬ trict. of New York. — Filed April il, 11)00. — John A. Shields, Clerk. It is stipulated that the foregoing copies of Com¬ plainant's Exhibits 115 and 1-lti may he liletl herein in lieu of the originals Subject, to any correction upon comparison with the originals by either party. Coins Hicks, Counsel for Complainant, N. Y. J.\ Co. ItollIN'SOX, Hmm.i: & WAIIIt, Counsel for Defendant. Nat’l 1328 SOUTHERN DISTRICT OP NEW YORK. Nkw Yokk Piionookaimi Cost- Tlit* plea nnil answer of the National Phono- graph Company, defendant, to the bill of com¬ plaint of the New York Phonograph Company, complainant. This defendant by protestation not confessing or acknowledging the matter and things in and by said bill set forth and alleged to be true in such manner and form as the same lire thereby and therein sot forth and alleged, for plea as to so much of said bill as alleges that the said bill is exhibited by the s complainant named therein, or that the real com¬ plainant therein is a resident of the Southern Dis¬ trict of New York, says : J^yiowmjiilmnant’s bill of coinnlaiiUL-waa-not-exhibited by the com- idalmmtTnor for the boneiit of the complainant, and is not being "prosecuted by the complainant, but that the said bill of oomphiint was exhibited by The A'uTencaiTGraphophqne Company and. the . Colum¬ bia Phonograph Company General, both .being cor¬ porations organized under the laws ofjhe State of Statu, for their exclusive benefit, uml that the said suit is being prosecuted solely by them and that they are the only party or parties in any way in¬ terested in the prosecution thereof. And this defendant not waiving its said plea, but wholly relying and insisting thereon for answer to the residue of the complainant's bill of complaint, not hereinbefore pleaded unto, or to so much thereof ns this defendant is advised it is nmtcrinl or necessary for it to make answer unto, answering says : That this defendant admits that it is a corpora¬ tion duly organized and existing under the laws of tlic State of New Jersey and having its principal oliice and place of business in the Statu of New Jer¬ sey, and is a resident of the State of New Jersey, and that some time in the year eighteen hundred and ninety-four, the North American Phonograph Company, a corporation organized and existing un¬ der the laws of the State of New Jersey, became insolvent; that a bill of complaint was filed in the Court of Chancery of New Jersey for the appoint¬ ment of a receiver for the said North American Phonograph Company, and that the said North American Phonograph Company was adjudged in¬ solvent by a decree of the said Court, and John it. Hardin, Esq., of the State of New Jersey, was duly appointed the receiver of said corporation in said suit; that the said receiver sold at public sale such assets of the North American Phonograph Company as were in his hands at the time of said sale, and that the said receiver made to this defendant a bill of sale for a portion of the assets of the said North American Phonograph Company then in the hands of the said receiver. And this defendant further answering says, that it denies that it, prior to the first of July, eighteen hundred and ninety-three, or at any other time, entered upon a plan or .scheme with the defendants Thomas A. Edison, the Edison Phonograph Com¬ pany, the Edison Phonograph Works, or any other person or persons or corporations, by means of which the complainant might be deprived of the enjoyment and profits of any exclusive rights and privileges owned or claimed by the complainant, or for any other similar purpose; but, on the con¬ trary, this defendant states that it was not organ¬ ized until the twenty-seventh day of July, eighteen hundred and ninety-six, and at the time aforesaid had no existence. And this defendant, further answering, says that it denies that any of theassetsof the North Ameri¬ can Phonograph Company, for which a bill of sale was given by the said John 11. Hardin, Receiver, to this defendant, were bid for, or purchased, by the said Thomas A. Edison for his benefit, or that the said Thomas A. Edison caused the said bill of sale to bo mndu to this defendant, or that the said bill of sale was made after the money for the said sale had been paid over and final distribution thereof made by the said Receiver; but, on thecontrary, this de¬ fendant says that the said assets for which the bill of sale as aforesaid was made to this defendant by the said Receiver were bid in exclusively for the benefit of this defendant, and the bill of sale there¬ for was made by the said Receiver to this defend¬ ant at the time the money for the said sale was paid over, or secured to be paid, and long before the final distribution made by the said Receiver. And this defendant, further answering, admits that a bill of sale for the rights, if any, of the North American Phonograph Company in a number of contracts made by various corporations with the North American Phonograph Company, including the said alleged contracts with the Metropolitan 10 Phonograph Company and John P. TTnines, wore assigned by the said Receiver to ono Frederick P. Olt. And this defendant, fnrtlior answering, says that it denies that in or about the month of February, eighteen hundred and ninety-six, or at any day after that month it ever caused the Kdiaon Phono¬ graph Works to manufacture any phonographs or supplies embodying tile invention and improve¬ ments referred to in complainant's hill of com¬ plaint, or sold, or caused the same to be sold, within tlie State of New York, or sold them elsu- jj where within the United States with any knowl¬ edge that the same were purchased to ho sold in tlie State of New York, or that this defendant or the other said defendants oversold or used, or caused to bo sold, or caused to be used within the Stnto of New York, any phonographs or sup¬ plies therefor, or that this defendant ever violated any rights, privileges or property of the said com¬ plainants arising out of any agreement between the said complainant or any of its alleged predecessors with tlie North American Phonograph Company, or that this defendant ever sold or used, or sold to'be used, in the State of New York, any phono- 12 graphs or supplies in violation of any exclusive rights or privileges of the complainant; but, on the contrary, this defendant says tlmtalthough the complainant has no rights whatever under the patents of tlie said Thomas A. Edison or other¬ wise in regard to phonograph supplies thereof, or improvements thereon, or lias any exclusive right of any character for tlie use, letting or sale of them, this defendant having its principal office and place of business at West Orange, in the Suite of New J ersey, lias always since its incorporation sold and delivered all phonographs, appliances and sup¬ plies therefor, whether covered or not by tlie said patents of Thomas A. Edison, reforred to in the complainant’s, bill of complaint, at itssaid princi¬ pal office at West Orange, in tile Slate of New Jersey, and lias never sold said articles elsewhere in the United States. And this defendant, further answering, admits that it has a place of business in tlie City of Now York, and a show room there for tin* purpose of showing the various articles dealt in by it, including phonographs and supplies and appliances therefor, but denies t lint any sales of such articles ever have been made by it at any other place than its princi¬ pal °fIice «t West Orange in the State of New Jersey. And this defendant, further answering, denies that the North American Phonograph Company over owned or controlled any right, title or interest in or to any patents of Thomas A. Edison apper¬ taining to what is known as the phonograph and speaking phonograph granted to the said Thomas, A. Edison, or any invention or improvements cov-/ ered thereby or ever possessed any solo or oxclt \j sivo right to use, or to let or sell to others for use and sale within the United States such inventions, or ever acquired or possessed tlie right to any in¬ ventions or improvements made or to lie made by tlie said Thomas A. Edison within five years from October twenty-eight, eighteen hundred and eighty-seven, or within fifteen years from August first, eighteen hundred and eighty-eight, upon tlie phonograph us it existed at said dates, us set out in paragraph one of tlie complainant's bill of com- Tliis defendant, further answering, denies that such alleged contracts made by and between tlie North American Phonograph Company and tlie complainant or its predecessors are now or liavey continued to be in force since the sale of thu assets- 1333 /U of 1.1 in said North American Phonograph Company 0 Eytlie^iaid HecpJrer, or Unit this (lofoiulnnrprltTior byllseifori n co-trpei’ation with any poison or other corporation, Inis over injured or trespassed upon any rights of the complainant in said contracts or otherwise, or lias deprived the complainant of any exclusive privileges belonging to it or of any ad¬ vantage or profits to which it is entitled, or that it ever wrongfully or unlawfully did any acts as set out, in the complainant's bill of complaint, or sold or caused to be sold or used or caused to bo used or sold to bo used within the State of New York any phonographs or supplies therefor embodying 17 the inventions and improvements as set out in the complainant’s bill of complaint. r And this defendant, further answering, denies / Unit the complainant or the Metropolitan Phono- / graph Company, or the New York Phonograph / Company, have complied with the terms, require- nn»ts and conditions of the said alleged contracts made between the New York Phonograph Com¬ pany and tlie Metropolitan Phonograph Company and John Haines and the complainant, or that the said eomplainnint or the said Metropolitan Phono- graph Company or the said New York Phonograph Company have complied with the terms, require¬ ments and conditions of any other contracts by \ “>id by each of them to be complied with in \ tho l)run,ises> !IS st-‘> in the complainant's bill \£f complaint. And this defendant, further answering, denies that tlie matter in dispute in the said cause exceeds, exclusive of interest and costs, the sum or value of two thousand dollars. And this defendant, further answering, says that it has no knowledge as to whether any agreements or transfers in writing or otherwise were made to which Thomas A. Edison, -the Edison Phonograph J Company or the Edison Phonograph Works, Jesse 10 II. Mppincott and tlie North American Phono¬ graph Company, or any of them, were parties, ns sot out in the lirst paragraph of complainant’s bill of complaint, or whether the said Thomas A. Edison owned a majority of the capital stock of tho Edison Phonograph Company and of the Edison Phonograph Works and controlled said two com¬ panies, or either of them, or whether tho said Lippincott paid to the said Thomas A. Edison any sums of money as consideration for any of said alleged transfers or agreements, or whether the said Thomas A. Edison, Edison Phonograph Com¬ pany, Edison Phonograph Works and Jesse II. Lippiucott, have ever co-operated to vest any own¬ ership, control or rights in the North American Phonograph Company, ns set out in said paragraph of complainant's bill of complaint, or whether the said instruments in writing to which reference is Hindu in said paragraph of the complainant’s bill of complaint, ever existed or were signed or exe¬ cuted by said parties or any of them. And this defendant leaves the complainant to make such proof thereof as it is advised. And this defendant, further answering, says that It has no knowledge ns to whether, on or about tlie 21; twelfth day of October, eighteen hundred and eighty-eight, or at any other time, the said North American Phonograph Company entered into a con¬ tract in writing with the Metropolitan Phonograph Company, or whether any such corporation of that name existed at that time, or as to what the con¬ sideration of tlie said alleged contract was, or as to what the terms thereof wore, and this defendant leaves the complainant to make such proof thereof us it is advised. / And this defendant, further answering, says that P it has no knowledge as to whether, on or about the j 1334 L hi n ■ 1336 ( I 8 said twelfth day of October, eighteen hundred and eighty-eight, or at any other time, the said alleged rights claimed to have been granted by the North American Phonograph Company to tho Metro¬ politan Phonograph Company wore extended until tho twenty-sixth day of March, nineteen hundred and three, or for any further time, as set out in paragraph three of complainant’s bill of complaint, and this defendant leaves the complainant to innke such proof thereof as it is advised. Aim Dus defendant, further answering, says that it has no knowledge ns to whether by an instru¬ ment in writing, bearing datu the twelfth day of October, eighteen hundred and eighty-eight, or nt any other dale, thesnid Thomas A. Kdison, Edison Phonograph Company. Edison Phonograph Works, Jsorth American Phonograph Compauy and .lusse II. Lippincott, or any of them, in any respect authorized, ratified or conlirinud any alleged con¬ tract between tho North American Phonograph Company and the Metropolitan Phonograph Com- pany, or gave or executed any guarantees in regard to the same, or undertook to agree to ratify, con- lirm or respect any such contract, and this defend¬ ant leaves tho complainant to make such proof thereof as it is advised. And this defendant, fnrtheranswering, savs that it has no knowledge as to whether, on or about the sixth day of February, eighteen hundred and ninety-nine, or at any other time, the said North American Phonograph Compahy entered into any contract with one John P. Haines, acting for the New 1 ork Phonograph Company, or any other person or corporation, by the terms of which said contract the said North American Phonograph Company granted any sole and exclusive rights in regard to phonographs and appliances therefor made under the said letters patent, or otherwise, 0 or whether the said New York Phonograph Com¬ pany is or was a corporation organized under the laws of the State of New York, or as to what the terms of said contract wore, or whether the alleged contract profTered by the said complainant ever actually was executed, as set out in the fifth para¬ graph of complainant's bill of complaint, and it leaves tho said complainant to make such proof thereof ns it is ndvised. And this defendant, further answering, says that it has no knowledge as to whethor, after the ex¬ piration of any term mentioned in said alleged con¬ tract hetweun tho North American Phonograph Compauy and John P. Haines any rights or privi¬ leges purporting to have been granted and con¬ tinued by the said contract were extended until the twenty-sixth day of March, nineteen hundred and three, or for any other time, and this defendant leaves the complainant to make suoli proof thereof as it is advised. And this defendant, further answering, says that it has no knowledge ns to whether the said North American Phonograph Company consented to any pretended consolidation of the said Metro¬ politan Phonograph Company and tho said Now York Phonograph Company into the complainant, or whether by virtue of any such pretended consoli¬ dation, any rights or privileges of either of the said corporations or any property of either of the said corporations devolved upon, became vested in or were acquired by the complainant, or whether the coinphtinunt thereafter covered and operated the territory claimed to have beon covered and pos¬ sessed by the said first two named corporations, and it leaves tho complainant to make such proof thereof ns it is advised. And this, defendant says that any such pretended consolidation was illegal and void, and that the 215 27 10 complainant has no legal corporate existence, and that any pretended transfer of any rights, interests or properties of either of the said corporations, namely : the Metropolitan Phonograph Company and the New York Phonograph Company to the complainant was illegal and unconstitutional, as tending to impair the obligations of contract. And this defendant, further answering, says that it, has no knowledge as to whether the com¬ plainant, or any of its alleged predecessors, pur¬ suant to the terms of said alleged contracts orother- wise, ever ordered any phonographs or supplies therefor from the North American Phonograph Company, or whether said phonographs and sup¬ plies therefor were of inferior (pm)ity, or were un¬ saleable or occasioned any loss to the complainant, or whether the said North American Phonograph Company or the said . . as A. Edison over refused to make any attempt to remedy any such alleged defects or to improve the character and quality of the said products, or to assist the complainant by supplying it with saleable and proper machines and supplies therefor, or whether the said Thomas A. Edison ever became president or manager of the said North American Phonograph Company as alleged in the eight paragraph of the complainant’s bill of complaint, and it leaves the complainant to make such proof thereof as it is advised. And this defendant, further answering, says that it has no knowledge as to whether in the month of July, eighteen hundred and eighty-nine. or at any other time the said Thomas A. Edison became a stockholder in the North American Pho¬ nograph Company, or thereafter became an officer and president of the North American Phonograph Company, or whether, as such stockholder and president he and any other defendants, except this defendant, entered into any plan or scheme to de- a«.v exclusive rights orm^"’0"11 "ml pro,its tke said Thomas A Edison 1 llef>, or whether executed betweon tlm "■"> C°"tri,ct to North America , P and the consolidation of 7° Me L wl,e,ebi’ Company to form the cm.mi • *° k 1 Monograph ratified or confirmed «»? «"'l>omtion w„s i,nd a,?h^ territory, or what the coas Icr t o, of , f pretended agreement was, as set out in h, i • paragraph of the complainant’s hill of complaint1 w™,“r.r . . ss And this defendant, farther nnswerinc s-ivstl.-.r * » io ness of the North American Pltonograpl, Com P«ny, or whether the said North American Phono- graph Company became insolvent on account of any net or acts of the said Thomas A. Edison, as sot o,,t m the tenth paragraph of the complainant’s lull of complaint, and it leaves tl.e complainant to make such proof thereof as it is advised tilts defendant, further answering, says that tl.e ( William Fahnestock ; said Metropolitan Phonograph Company, John P. ' • Haines, the New York Phonograph Company and the complainant have, for a long time past, entirely j censed to carry on the said business described in I the said alleged contracts made between the North \ American Phonograph Company and them, and \ have entirely abandoned and relinquished any \ alleged rights which they or any of them over V.hiMl under said alleged contracts, and that said alleged contracts, if having any legal effect what¬ soever, were simply agency contracts for the sale and lease of the said articles described therein in such parts of the State of Now York, as are re- 3(5 forred to respectively in snid contracts, .and that upmijhe insolvency of the said North American Phonograph Company. and- tho"appointmont.of a Roceivemiereof, the said co nlra c U- were 'fuse i u d ed and abrogated, and the only rights, if any,' of the said parties to the said contract _thet)_.becamo claims for damages to bo presented to’.Hie snid Receiver. - And this defendant prays to be hence dismissed, with its costs and charges in this behalf most wrongfully sustained. Rohinson, Biddi.k & Wakd, 30 Solicitors for Defendant Nat. Phonograph Co. Howakd W. IIayks, Of Counsel. UNITED. STATES CIRCUIT COURT. SoUTIIKItN DisTiiicr ok Nkw Yoiik. Nkw Yoiik Piio.voouaimi. Com- KAN Y, Complainant, against National Piionoohakh Com- Nkw York, October 20, 1003. Proofs for linal hearing taken on behalf of the de¬ fendant under the 07th Rule in Equity, this 20th day of October, 1003, before Samuel M. Hitchcock, a Standing Examiner of this Court, at his oflice No. 15 William Street, in the Borough of Manhattan, City of New York. Akkkakanoks : Louis IIioks, Esq., for Complainant. William Pki.zk.ii, Esq., for Defendant. Ei.isiia K. Camk, Esq., for Complainant. WILLIAM FAHNESTOCK, witness subpnmaed on behalf of the defendant, being duly sworn, tes¬ tified as follows : Direct examination by Mr. Pelzer : Q. 1. You nrb connected with the complain¬ ant herein, Now York Phonograph Company, are you not? A. I am. Q. 2. Please state in what capacity? A. Iam O.Q. 1340 treasurer of the company, and was elected on March ;j, 1002, and was re-elected February 0, 1000, and now occupy that position. Q. 3. You are also a trustee of the company, ■tie you not? A. Yes, I was one of the lirst trustees of the New York Phonograph Company, and have been interested in the New York Phono¬ graph Company and its successor New York Phonograph Company since the organization of the former company in February, 188!), as a stock¬ holder, director or trustee and vice-president ; at present I am the treasurer, as aforesaid. 41 Q. ‘1. And have you always taken an active interest in the management of the company’s a (Tairs? A. Yes. Q. 15. What, if any business, has been done by 0o,"I«»'.v since .Inly l', 5801). A. \\ hen I accepted the office of treasurer T was informed by Mr. James h. Andem. the secretary of the company, that all the books and secret* “"V*"* l" lhe of the former Frans"*’ ,1M!0 Kla,ls> ,l:ul befell placed bv c ,l"s ‘he bands of counsel, Messrs. Purdv Squire & Rowe, and Mr. Andem did not succeed in recovering them until Juno 10, 1002. The same counsel are now representing the Edison interests n stteral branches of tlmdefonse growing out of the prosecution of New York Phonograph Com- pn J s suit against the National Phonograph Com- P.nij, and during the time these books and papers . , , 111 t,,e,r possession, a period of about efe'tc eks the 1 1 n °" A micro .11,““ r,XS'p'LJ™ of most of the books mid papers belonging to the Company, which Evans had been induced to sur¬ reptitiously turn over to the Edison counsel, and all these books and papers have been in his custody ever since that time. There was no money in the treasury of the Company when I assumed ollico, and owing to the violation of its contract rights by the successors of tho North American Phonograph Company it has not been able to procure phono¬ graphs and supplies necessary to transact business, and consequently has no revenue, and I have not had to keep any books of accouutof the Company. I and some of my associates have advanced from time to time such funds as wore necessary to pro¬ vide for the incidental office expenses of the Com¬ pany and the necessary legal uxpcnses, excluding counsel fees, which are otherwise provided for. When tlie Company wins its suit against the Na¬ tional Phonograph Company wo expect to be reim¬ bursed for such advances. I have kept a memo¬ randum of these payments, bat it is wholly a personal matter and not a matter of records for the books of the Company. Mr. Andem informs mo that lie has brought all the books of the Company called for in the subpnma now in possession of the Company, and ho no doubt can explain everything necessary in regard to them. I have not in my custody any books or papers of the Company. Q. 0. Your last answer does not answer the pre¬ vious question. I asked you “ what, if any, busi¬ ness has been done by tho New York Phonograph Company since July 1, 1805 ?” Mr. Hicks : Objected to upon the ground that it appears from the previous answer of the witness that he has not been familiar with the books of the Company or with the business side of the Company’s affairs, and cannot therefore testify in regard to the business transactions of the Company will oil for by the question. A. I do not know whether the Company dill any business or not since that date. I did not have anything to do with the management. Q. 7. Has the complainant. New York Phono¬ graph Company to your knowledge since duly 1, purchased, leased or sold or in any way dealt in phonographs, phonograph records, graph- ophones, gruphophonu records or supplies for cither type or machine? Mr. Cum// : Objected to upon the ground that the witness in answer to question (i has already fully staled what information hu has upon the subject, and particularly as to what information hu has concerning the busi¬ ness conducted by the Company, and that any further t i g t o long tho same line is ii useless waste of time. A. I do not know. Q. 8. You have slated that yon have been connected with the complainant herein and its pre¬ decessor in business as a trustee or officer, and have taken an active interest in the management of its afTnirs, and do you mean to be understood as stating that you have no knowledge whatever as to whether or not the New York Phonograph Com¬ pany, (lie complainant herein, ever did or did not handle talking machines of any character since July 1, 1800? Mr. Camp : The form of the question is ob¬ jected to upon the ground that the witness has 2lfr. llicks: Complainant also objects to the question unless it appears that the witness can answer from Ids own knowledge and not upon the basis of hearsay statements, or statements made to him by others. A. \ es, 1 mean to say that I do not know whether it did or not, I know that the Company wanted to do business but have not been able to because they could not get any supplies or any phonographs. Q. 0. Then you know ns a matter of fact that the complainant, New York Phonograph Com¬ pany, did not sell or in any way handle phono¬ graphs anil supplies since July 1, 1895? A. Isay they have been prevented from doing any business by Eilison. Q. 10. Has the complainant, New York Phono¬ graph Company, to your knowledge, done any business in gmphophoncs or graphophone supplies since July 1, 1800? Mr. Jlicks: Objected to unless it appears that the witness can answer from his own knowledge. Mr. 1‘clzer : Counsel for defendant calls attention to the fact that the witness had answered the previous question before Mr. Hicks in any way indicated that he had any objection to note against tho question, and that tho objection is clearly intended ns an instruction to the witness how to answer. Mr. Jlicks: Counsel for complainant replies that he does not understand the witness hail answered the question, and further that it is apparent that defendant’s counsel is examin¬ ing the witness upon matters concerning which the witness has no personal knowledge what¬ ever, and all are hearsay statements on the part of the witness are objected to. Q. 11. Mr. Fahnestock, did or did not you answer the previous question before Mr. Ilicks intimated that he hud an objection to enter upon tlie record? A. I think l did. Q. Pi. Please state what that answer was? A. I said 1 thought they hadn’t. ^JlLlum Ffcbnastocfc 18 Mr. Hicks : 1 niovo tu. strike out tho answer of the witness upon tlio ground that wlmt the witness thinks is incompetent anil immaterial and that it clearly appears from ' the answer of tile wftness that lie has no knowledge upon the subject. ( Q. 1'h Having been connected with the manage¬ ment oT the business alTairs of the complaint and New York Phonograph Company for many years, you are in position to state, are you not, of your own knowledge, whcthcror not that Company dealt in graphophones or graphophone supplies? Mr. Hicks : Objected to on the ground thill tile i| nest ion assumes that the witness 1ms been connected with the business management as distinguished from the management of the Hoard of Trustees of the Company. Mr. Camp: Objected to further upon the ground that the bill of complaint in this act ion mnkes no reference whatever to gmphnpliones , or supplies therefor. A. No, 1 am not. 0. U. You know, do yon not, that the com- | plainant New York Phonogniph Company and its predecessors in business, were organized "to handle phonographs and graphaphones, do you not? Mr. Camp : Objected to unless the ques¬ tion is confined to phonographs ; this is a Phonograph and not a graphaphone suit. The certificate of incorporation of the complainant corporation will undoubtedly deline precisely the objects for which the company was in¬ corporated. A. 1 don’t know. Q. Hi. Ho you know whether or not the American Graphaphone Company ever refused to sell graphophones or graphophone supplies to the * the complainant, New York Phonograph Company? 1346 in Mr. Camp: For the purpose of avoiding bfi ru|letition of the objection, counsel for com¬ plainant hereby note their objection to any questions relating to the American Grnphn- plione Company, or to the sale of graplio- photies, graphaphone records and graphophone blanks, upon the ground that such questions and any answers that the witness may make in regard thereto are incompetent, irrelevant and immaterial to the questions at issue. A. I don't know. Q. 10. Do you know of any reason why tho complainant New York Phonograph Company, r)U since .Inly 1st, 1805, did not handle graphophones or grnphnphouu supplies? Mr. Hicks: Objected to upon tho same grounds, ami upon the further ground that the question assumes, without proof, that com¬ plainant has not handled graphophones since July 1st, 1805. A. No, Ido not. Q. 17. You know as a matter of fact, that tho Company, however, did not sell or in any way deal in graphophones or graphophone supplies since that period? 57 Mr. Hicks : Objected to as leading, it not appearing that the witness is adverse. A. I do not know. Q. 18. Has the complainant, New York Phono¬ graph Company, carried on business of any character, since you have held office, or at any time since July 1, 1806? A. No - Mr. Hicks : This question and all similar questions are objected to without repetition of objection, as incompetent, irrelevant and immaterial to the issues involved in this suit. A. They did business as long as they could, they would do business to-day if they had a chance. Mr. Hicks : Counsel for romplninnnt objects to the answer “No” to question 18, for tlie reason that it is his understanding that no such answer was made by tile witness, and a question having arisen as to what the answer of the witness actually was, defendant's counsel is requested to ask the witness in another question what his answer to question 18 was. Mr. Vclzcr : Counsel states that, the witness started to answer the question as it appears on the record and that Mr. Hicks interrupted the witness in order to state his objection to tile question, and that whatever omission there may he lies in the facts that the stenographer omitted to state that the witness was inter¬ rupted giving his answer. AH. Hicks: I understand then, that de¬ fendant's counsel refuses to ask the witness what his true answer was. Mr. Vclzcr: The record speaks for itself. Mr. Camp : I would suggest as a means of getting on the record at this time wlml t ho answer to the question was as intended by the witness, that the commissioner, who is present, repeat the question and stipulate on behalf of counsel for complainant to allow this to bo done, and request that counsel for defendant do likewise. Mr. Pelzcr: I prefer to have the record stand. Q. 10. Whitt, if any source of income, has the complainant, the New York Phonograph Com¬ pany? Mr. Hicks : Objected to as incompetent, . immaterial and irrelevant. A. I should say tho source of income is the selling of the machines and records, and when nimble to sell machines and records they cannot make any William Q. 20. Hy “ machines and records” you mean 01 phonoginphs and grnphophones and phonograph and grnphophone records, do von not? Mr. Camp: Objected to upon the ground that the wildest stretch of imagination could not have assumed the witness to have made any such inference. A. I should say that phonographs and phono¬ graph supplies. Q. 21. Why do you omit grnphophones and grnphophone records? A. Hocauso you seem to bo trying to draw mo into somu grnphophone busi¬ ness. I have nothing to do with that. q. 22. The complninnnt. New York Phonograph Company, claims the right todeal in grnphophones, grnphophone records and supplies throughout tho Stnte of Now York, does it not? A. I do not know whether it does or not. Q. 23. Have you the minute book of the New York Phonograph Company with you? A. Yes, Mr. Andem has it. q. 04. Pleaso refer to the Articles of Incorpora¬ tion and state for what purposes the Company was organized, that is to say, state the objects? Mr. Camp: Objected to upon the ground that the certificate itself is the best evidence, 03 and no foundation has been laid for the intro¬ duction of secondary evidence. A. Tho second paragraph states ns follows: “The objects for which said company is to bo formed are; to manufacture, sell, lease or otherwise dispose of machines and appliances appurtonnnt to or connected with phongraph and phonogmph-graphophones and the operation thoreof ; to acquire licenses of territorial grants of exclusive rights relating to phonographs, phono- graijh-graphophones and similar machines, appli¬ ances and inventions and to manufacture or sel , WjlLiam Fahnestock lua.su, or otherwise dispose of such machines and appliances under such licenses and grants." Q. 25. I call your attention to Complainant's Exhibit No. -10, which is the agreement between the North American Phonograph Company and .lolm P. Haines, dated February 0, I8S0, and under which I understand the complainant. New York Phonograph Company, claims its rights in part, and ask you to look at the same and state whether or not that contract purports to grant rights under both the patents relating to the so-called phono¬ graph and the so-called phonograph-graphophone? Mr- Camp: Objected to as calling for a conclusion on the part of the witness, tho exhibit is in evidence and is the best evidence as to what it purports to grant. A. Yes, I should say Hint seems to apply to both. Q. 20. 1 he New York Phonograph Company, the predecessor of the complainant, New York Phonograph Company began business in 1880, and at which time I understand you were a trustee. At that time did or did not that company deal in both typos of machines? Mr. Camp: Objected to unless the defend¬ ant can testify of his own knowledge. A. I cannot say positively whether they did or Q. 27. However, it was the intention of the com¬ pany to do so? Same objection. ;V Jado"’t kno"' ils 1 Ci"' “'iswor that question. 1 -b- ,:l,vu y°" “">• re«son to believe that the company d,d not deal in both types or machines at that period? Mr. Camp: Objected to as incompetent, immaterial and irrelevant. A. No, I have no knowledge. Adjourned until 2 o’clock, same day and place. Mot pursuant to adjournment at 2 o’clock imi Appearances Same as at morning session. 'Vl,en d,d/°“ become Treasurer of JD02 A. March 3, ThoNW v h|" :i!11 y°" bBC0,nu "" officer of office did vniM Company, and what I ‘ k f I' p '0 , ? ^°" n|ay refer to the minute book of the Company to refresh your recollection A. I* obruary 8, 1880, trustee ; February -I, I8O2' i was elected Vice-President. Q- 31. How long did you remain a trustee? A C I remained a trustee until September 21, 1000 ■ T '!7 “°'v lo"«di n°arly all of the meetings. ' * Q- 3-1. Then your answer to Question 4, where >ou » ere asked "And have vou always taken an management of the office- Mr it • , Q- 30. I did not mean to ask , CO .tslt >ou ill reference to 25 1352 70 71 72 24 any details of the* conduct of the business, but generally as to the business carried on by the Com¬ pany. Notv, it is certain that t lie Company did some business; can you or can you not state what that business was? A. No, I cannot; I have no knowledge of that; I cannot remember any. Q. 37. Do you mean to bo understood as stating that the business nfliiirs of The York Phonograph Company or its successor, New York Phonograph Company, were not discussed at the meetings of the Hoard of Trustees, and that a Trustee would not know what sort of business tho Company was conducting? A. No, I do not mean to state that, but I mean to say that at the meetings at which I attended, Mr. Haines reported the receipts to be so much, but it is a 'matter that was immaterial to me sis to what the receipts came from ; I had no distinction in my mind between the phonograph and the grnphophone, and it didn’t make any dif¬ ference to me, any more than the number of records that they sold. Q. 38. But you knew that the Company was either selling or leasing phonographs or graplio- phones and records to bo used on such machines? Mr. Camp: Objected to upon the ground that the witness has already answered as fully as he knows, and that whether or not the com¬ plainant did or did not sell gniphophones, grnphophone records and grnphophone blanks is immaterial and irrelevant to the issues in this suit. A. No, I can’t say that I did. Q. 30. Then what did yon mean in your previ¬ ous answer when you said “ I had no distinction in my mind between the phonograh and the grnphophone?" A. I mean by that because as far as J can see the object of this examination is to try to get me to testify to something that I knew nothing about, and trying to make mo in somo 7 manner responsible in discriminating against tho grnphophone. Q- 40. I am not trying to get you to discriminate against the grnphophone, but all I wish to know is whether or not tho Company did or did not deal in gniphophones and supplies, &c.? A. I cannot answer that question of my own knowledge, can- not remember. Q. 41. You knew, however, that the Company "as not excluded from selling gniphophones or supplies, &c. ? A. I don’t think I ever considered that question at all. Q. 42. In question No. 0 you were asked as fol- 74 lows: “Then you know ns a matter of fact, that the complainant, Now York Phonograph Company, did not sell or in any way handle phonographs and supplies since July, 1805,” to which you answered j “ I say they have been prevented from doing any business by Edison.” Now, I ask you whether or not you can state of your own knowledge, that Edison prevented the complainant, New York Phonograph Company from handling or in any way dealing in gniphophones, grnpliophoue records and supplies for such machines? Mr. Camp: Objected to upon the grounds 75 already mentioned, and upon the further ground that tho line of questions asked by counsel for defendant now reveals a fixed pur¬ pose to secure from this witness, if possible, testimony as to the leasing or selling of graplio- phones, grnphophone records and grnphophone blanks, for use in the suit now pending in the Southern District of New York, wherein John E. Helm, who is iu tho office with Howard YV. Hayes, Esq., Mr. Edison’s personal counsel, is complainant, and New York Phonograph Com¬ pany, American Grnphophone Company and 7(i Columbia Phonograph Company General tiro defendants. Testimony in which case is now ' being taken before Samuel M. Ilitehroek, Esq., as Standing Examiner of this Court. A. I would like to read the report, of tin; meet¬ ing of the Hoard of Trustees of New York Phono¬ graph Company, held June :t, 1808, from the minute book, its follows: * * * “ Mr. Unities then, as chairman of the committee appointed at the last directors’ meeting to confer with Mr. Edison with a view to the attitude to be occupied with regard to the New York Phonograph Company in 77 the territory covered by its agreements and licenses, reported that the committee, consisting of himself. Mr. Lewis and Mr. Kahnestock, went to Mr. Edison’s laboratory and had a conference with him, and were referred by hint to his counsel, Mr. II. N. Dyer, New York City, and that having made an appointment with Mr. Dyer, they had two interviews with him, at which the agreement and rights of the New York Phonograph Company were fully discussed, but that no satisfactory statement in regard to Mr. Edison's future con¬ duct was made by Mr. Dyer, except that Mr. .Edison would lie glad jodeiil with the New York 78 Phonograph Company on the same hnsis'ujjFTmy ^other-Jocal agents, and that any agreement with Mr. Edison must be preceded by the establishment of its rights by the New York Phonograph Com- pany. Mr. Jessup, counsel for the company, then ■•“ccipt of a letter from Mr. Dyer, dated reported i April 28, ‘ Dear Mr. Jessup : 1 have your favor of the J2d Inst. Should your client seriously con¬ template bringing suit, against the grapho- phone interests, I think T can make some valuable suggestions in that connection.’ M Ml. Jessup further reported tlmt although ho 70 d requested front Mr. Dyer the details at the u range, „e„t which Mr. Edison would be disposed in the m”1?' f''° NUW Y°rk Phonograph Company ! t L of Ua establishing its rights bv litign- tion, no answer has since boon received to 'this In- ‘l'lny. I cannot rempmber anything to refresh my memory. Upon further referring to the minutes to refresh my recollection r find the following: of Urn'll" / ZMT* 1S°-- A meeting of the Hoard of i rustees of this company was held January -I, 181.2, !lt 257 Fifth Avem/0. The ^e“Ve i10’ rel,orte‘1i".at the American Graphophone Company are about to establish a branch office in 80 the city of New York for the sale or rental of phonograph- gruphophones independent of the North American Phonograph Company, and pro- suited copies of correspondence between the Co- lutiibia l ltonograph Company of Washington, mnv ’ “"m 17°rth An,ori“n Phonograph Com- panj unit reference to grapl.ophones already placed in the city of Washington, D. C., by the eat nfT ®raf1hoP,,one Company, and independ- ^ n r? f'°r,h Amer,cn" Phonograph Company *. 1 tlle Columbia Phonograph Company. The fol- ow.ng preambles and resolutions were offered by Noah Davis and seconded by Richard Townley Iiaines and carried : Whereas, this company has been informed that an agency other than the North American Phonograph Company is about to be opened m the City of New York for the sale of phonograph-graphophones, and Whereas, said agency using, selling or leasing or licensing others “ 'I*.’, 01' S,‘Ch Phonograph-graphophones "o "d h«-‘ contrary to the exclusive rights granted under the agreement between the North American lhonograph Company and this Company. rK- som-kd, that the officers of this company be and 28 are hereby instructed to give notice to the North American Phonograph Company that our interests are threatened and call upon them to protect the interests and exclusive rights of this company; and Kksoi.vkd, that the officers of this company are authorized in their discretion to communicate with the ollicersof other companies to ascertain on what ground they claim the right to sell, lease or use phonogmph-grnphophones within tllo Statu of New York, and to ascertain on what terms, if any, they will offer this Company exclusive rights, if they possess them, for the handling, leasing or selling of the same within tho State of Nuw York.” I have rend all that I knew Edison had to do about it. Q. -12. Please look at the minute book ami state whether you were present at the meeting held by the Board of Trustees on June 8, 180S, from which you have just quoted? A. Yes, I was present; t was present as secretary of tho meeting. Q. d-1. Now, please look at the minutes of the previous meeting of the Board of Directors and read the reference to the appointment of the com¬ mittee to confer with Mr. Edison? (Witness refers to minutes.) A. “ On motion duly seconded, it was resolved that the President be authorized to appoint a com¬ mittee of three, of which he shall be a member, which committee shall confer with Mr. Edison as to his attitude of this company, and shall exumino into tlie status of the company commercially and legally and report thereon to a special meeting of the Board of Trustees to be called for the purpose. Flirt her resolved, that to that endhe be empowered to retain counsel to confer with said committee.” (Answer continued.) If my memory serves mo, the reason why we did not employ counsel was because wo had no money, and the committee nml WilLiam Fahnestock D.Q- > 1356 directors did not feel like paying for the suit. Mr. 85 Dyer, the counsel for Mr. Edison told me that in his opinion we had a very good case against Edison, and that wo had been buncoed out of our rights. I think Mr. Haines, Mr. Jessup and Mr. Lewis were present at this interview. Q. -15. fn the discussions which led to the mak¬ ing of tho motion to appoint thocoinmitteo to con¬ fer with Mr. Edison, do you recollect whether anything was said in roforenco to the committee conferring with the representatives of tho Amori- can Graphophono Company? A. I do not recol- lect that. Q. 40. Did the trustees at that time entirely 80 disregard tho American Graphophono Company? A. I don't quite understand that question. Q. 47. Your answers indicate that a conference was desired with Mr Edison, but apparently no conference was desired with the grnphophone interests, can you state why this was so? A. Yes tho reason was that wo looked to Mr. Edison for protection, which we didn’t get. Q. 48. But Mr. Edison in no way prevented the trustees from conferring with tho grnphophone company, did he? A. I don’t think ho did. Q. 40. Then there was no reason why your com- 87 inittee, and of which I understand you were a * member, could not have conferred with tlicgrapho- phone interests as to carrying on the business of New York Phonograph Company, had the com¬ mittee or the trustees so desired to do? A. I don’t think there was, but we had tried going into partnership with Edison onco, and wo didn’t care to go into partnership with anybody else. Q. (50. Then so far as Mr. Edison was concerned, the complainant, New York Phonograph Company, could have continued under its original license, or could have made new arrangements with tho 30 88 American Graphophonu Company if it had desired to do so? Mr. Camp: Objected to as highly hypothe¬ tical, and immaterial and irrelevant. What the complainant should have done is absolute¬ ly immaterial to the issues involved, and fur¬ ther that it calls for a conclusion on the part of the witness. A. 1 should say the value of our license depended largely upon the protection Mr. Kdison was to give us; he gave us no protection, and therefore what wo chose to do after that had nothing to do with 80 tl,e case- Q. 01, Weren't you aware that the American Ciraphophnne Company owned, or claimed to own the controlling patents, covering both the phono¬ graph and the phonograph graphophonu, orgrapho- phone, as it is known now, and that the com- Plainant, New York Phonograph Company could not do business without the protection of the American Ciraphophone Company? A. No, I was not aware of that. Q- 32. 1 call your attention to the license agree¬ ment between the North American Phonograph Company and .John P. Haines, dated February' 0 oy 1880, Complainant's Exhibit No. JO, under which the complainant New York Phonograph Company claims ns rights in the State of New York, in pari, ", !,sk yo" "'h7. In referring to the special meeting of January -1, 181)2, you quoted a resolution in which it is stated tlml “an agency other than the North American Phonograph Company is about to be 0(1 opened in the City of New York for the sale of phonogrupli-grapliophones.” What was done in regard to this matter subsequent to the passing of that resolution? A. 1 don’t know. Q. 08. Please look at the minutes of the meet¬ ings held subsequent to January -1, 181)2, and if you find any reference to this matter, kindly read tlie same upon the record? Witness refers to Minute book. A. 1 lind under date of August 20, 1802, the fol¬ lowing : “I lie subject of the rent or sale of phono¬ graph grnphophones by parties oilier than the North American Phonograph Company and this WilLiam • Fabnestoofc company was considered, and tlie treasurer was instructed to pay the North American Phonograph Company all sums for rentals under protest, and with the demand that this company bo protected in its exclusive rights granted in tlie agreement made and existing between our respective companies.” Next record Is November 1), 1802, which reads as follows: “ The proposition of the North American Phonograph Company with reference to occupying the territory of the sub-companies, and conducting their business for them was also presented, and on motion duly seconded and carried, was referred to 11 . . . composed of Noah Davis, William Fahnestock and Richard Townley Haines." Decern- U ber 20, 181)2, seems to be the next, which reads: “A special meeting of the Bonrd of Trustees of this company was held at the ofliee of Messrs. Fahnestock & Company, 2 Wall Street, New York, to consider the advisability of selling phonographs and to take action for the protection of the exclu¬ sive rights granted by the North American Com¬ pany.” * * * “A committee composed of Noah Davis, William Fahnestock and Richard Townley Haines was appointed to confor with the North American Phonograph Company and ascertain what special arrangements could be made with tlie 01 North American Phonograph Company in the event of the sale of phonographs by this company and the result bo reported at the next meeting.” 1 do not discover anything else on that subject. Q. 50. You have looked right down to date, have you? A. Yes, sir. Q. 00. Your previous answer indicates that sev¬ eral committees were appointed to look into this matter; do you lind anywhere that these commit¬ tees ever made any report on the question of the sale of gmphophones or the proposed action to pre¬ vent the sale of graphophones aud graphoplione 1361 records by others thiin the complainant New York Phonograph Company in the State of New York? A. Here issoincthing. Iliad under date of Octo¬ ber 23, 11)00, tiiu following: "On motion it was resolved that the officers of this company are hereby authorized and empowered to execute and deliver to Mr. James L. Auden, of Cincinnati, Ohio, the contract now submitted, bearing date October 22, 11)00, whereby he is empowered to commence and prosecute suits on behalf of this company against any and all parties infringing on the territory of the company.” Q. (II. Your answer is not a reply to my last question. I asked you whether the committee composed of Noah Davis, Kichard Townley Haines and yourself had ever made any report? A. I do not find any report. Q. 02. So that the entire question as to the in¬ vasion of the territory of the complainant New York Phonograph Company by the American Graphophone Company or others dealing in graplio- phones, graphophone records and graphophone supplies was dropped entirely without any definite action being taken by the trustees of thecomplain- ant New York Phonograph Company? Mr. Camp: Objected to ns to* form, and as assuming that the territory was invaded by the American Graphophone Company. Ob¬ jection withdrawn. A. No, there was something done in 1 800, exactly why I do not understand it— 1 cannot say, but *1 have heard Mr. Haines say several times that Judge Noah Davis was empowered to represent this Company to join in a suit against the Grapho¬ phone Company ; I never knew exactly the result of this, but I have understood that some kind ofn deal was made, the particulars of which I havo never heard; I will also say that in the last two Willia wiHi tb v e^ Ste,nc0 we 1,nd ft great deni of trouble 103 tlievol , An,8rtain Company-every time tllOV did°‘n"S th°y ,'0fUSe<1 t0 V'di'’ "nd "'llen . tticy did pay, they generally paid us in supplies Uoi|C. When? Mr. Hicks: Tin* witness is advised that ho can refresh his recollection by referring to memorandum if it is necessary for him so to do. A. I know that Mr. A ndum ordered from three different parties, 1 think it was in 1002. Q. 70. That was after the tiling of the bill of complaint in this suit, was it not? A. I should say yes. Q. 77. So that as a matter of fact, the com¬ plainant, New York Phonograph Company, prior in i0r , , brlngl"e of tl,is "'"l since the first day 11 of J,,ly> 1K!)r’- id tempted to deal in phono- graphs, phonograph records and supplies nor never ordered any such materials from’ the parties manufacturing them, is that correct? Mr. 1 licks : Objected tons leading and upon the furt her ground that the witness has already estihed directly to the contrary, nuniclv, to the effect that a committee of New York Pho- "ograph Company called upon Mr. Kdison about the year 18!»8, and that Mr. Kdison refused to deal with New York Phonograph omp.inj , except on (he same basis us with miy other local agent, unless the New York Phonograph Company first established its 116 rights by litigation. Mr. Pelzer : Counsel for defendant objects to the foregoing statement by Mr. Hicks, tor he reason that the witness has already testi¬ fied that Mr. Kdison had indicated that he would be glad to dual with the New York 1 honograph Company. Mr. Hicks: Counsol for New York Phono- graph Company refers to the answers of the witness to Question 42 and 70. A. This is not correct. Q.78. In what respect is it not correct? A. I cannot say to my own knowledge. 112 Q. 70 Then your reply to question 74 is incor- rect and should be that the company did not order phonographs, records and supplies from Mr. Kdison or the cot I i es if during for him between July 1, 1806, and the briuging of this suit? Mr. Hicks : Objected to ns cross-examination of complainant’s own witness, and upon the ground that the witness 1ms positively testified that prior to the beginning of this suit, and since the first day of July, 1806, New York 1 honograph Company, proceeding under its contract with the N ortli American Phonograph 117 Company, attempted to secure phonographs and phonograph supplies from Mr. Kdison the only source from which Now York Phonograph Company could under its contract secure such phonographs and phonograph supplies, unless it undertook to manufacture on its own account further cross-examination of the witness on ' Ills said testimony is objected to. A. I would simply say that I cannot answer that one way or the other. Q. 80. So far as you know, did the complainant, *ew lork Phonograph Company, ever order pho- ' D.Q. 1366 nogrnphs, i ilioiioi'ni pl» records. or phonograph .sup¬ plies from I ho defendant horoiti, National Phono- grapli Company prior to t lit* bringing of this .suit? A. I cannot tell yon — I can’t say, as I had noth¬ ing to do with ordering the machines. Q. HI. What oilieer of the complainant, New ^ °rk Phonograph Company, lias hud to do with the ordering of machines since duly 1, 1805, and prior to the bringing of this suit? A. I should say the president and the secretary. Q. Sl>. What officer pays the bills of the com¬ plainant, New York Phonograph Company? A. I should say the treasurer. Q. HI). Have any lulls been presented' to you since you have occupied the office of treasurer for phonograph, phonograph records, or phono¬ graph supplies purchased from Mr. Edison, or the defendant, National Phonograph Company. CJ. 81. In your answer to question fi, on page -I, you said: “It (referring to the complainant herein) has not been able to procure phonographs and supplies necessary to transact business, and consequently lias no revenue." How hard did the Now York Phonograph Company try to get machines, records and supplies? Afr. Hicks: Objected tons improper cross- examination by defendant of its own witness, and upon the ground that the witness has already testified that in 1808 or thereabout. New York Phonograph Company sent its committee to the only source for which phono¬ graphs and supplies could be secured, namely, the successors of the North American Phono¬ graph Company, and that the said committee met with' a Hat refusal by Mr. Edison to supply New York Phonograph Company under its contract with the North American I liouograpli Company, and that any further William Fahnestock offorl on the part of New York Phonograph 121 I i titration "ntl1 riKhtS WOro “‘“Wished by litigation as suggested by. Mr- Edison is immaterial and irrelevant. ’ a kuow '»°w hard they tried. the i„ten?ew!!r° TT"* ‘7 nt a" r,lr,h«" than Hit interne* of which you already have testified? A. I can t say whether they did or not. Kdison nr Vi ->, »o that I cannot answer of my own knowledge. Q. 80. Do you find that any attempt was ever in.K e to obtain from the National Phonograph Company, the defendant herein, phonographs, phonograph records and supplies, prior to the ringing of this suit, or to compel that company to supply such apparatus and materials? You may refer to the minute book before answering tins question. (Witness refers to minute book.) o ai),l0\0t. ^ a"-v,hi"K; c on, having in mind the testimony given <13 by yon this morning, please look at your answer laid'-n ” StU'° Wh,lt •V0M ™»nt "’hen you ,,d’ 1 'lu-v (meaning the complainant) have been prevented from doing any business by Edison?” Mr. Jhcks .. Objected to as improper cross- examination of defendant's own witness. A. J say that Edison gave us no sunnlic could not do any business. Ldv« 1)1,1 r,r coml,a,li’ expect Mr. Edison to them? ,"W " W,thout •vo,lr co,,,pany ordering Mr. Hicks: Further examination of the witness upon this point is objected to, upon the ground that the witness has testified Wat 1 Mr. Edison s standing in the shoes of the North American Phonograph Company and repre¬ senting its successors, flatly refused to supply r ew \ ork Phonograph Company with phono¬ graphs and supplies. Mr Pclzcr : The statement by counsel for complainant is objected to, on the ground that it makes no difference what the ‘ witnesses’ opinion might be as to Mr. Edison’s standing, and, further, for the reason that it nowhere appears that Mr. Edison is or represents the Compan” °f N°r"' American P1'°nogrnph ]2! \r 3Ir- {Ilcks: Tl,e witness has testified that Mr. Edison purchased the assets of the North American Phonograph Company upon its becoming insolvent, and at the receiver’s sale. . • l>elzcr •' The last statement by com¬ plainant’s counsel is also objected to, for the reason that it is entirely misleading, and in contradiction of the testimony already given in this proceeding, whereby it has been shown that the assets of the North American Phono¬ graph Company were purchased by the National Phonograph Company nml F. P. Ott, and that bills of salt- were made oat b.v the Receiver to those parties. Mr. Hicks: The testimony referred to by defendant’s counsel shows that llie assets of the North American Phonograph Company were knocked down at the auction sale by thu Receiver to Thomas A. Edison, and that thu Receiver, at Mr. Edison’s request, caused tho bills of sale referred to to lie made to National Phonograph Company and Ott, in order, as established by other testimony in the case, to enable Mr. Edison better to ac¬ complish his purposcof depriving complainant of its legal rights, including its rights under his patents. Mr. Peizcr : Counsel for defendant rufuses to go into a further discussion on this ques¬ tion, and prefers to have tile record speak for itself, and further, for the reason that thu sole purpose of complainant’s counsel, in continu¬ ing this discussion, is evidently to prompt the witness in the making of his answer. Mr. Hicks : Complainant’s counsel dis- avow’s such purpose, and objects to any answer by the witness of tho question, upon the ground first suited, that the witness lias already answered the question. . I say “ Yes,” if he was anxious to help us S- 02. As a business man, and ns a man long •feted with financial matters, I nsk you tlier your last answer is tho best answer you make to question 01? A. 1 might say that ness methods with Thomas A. Edison don’t r into tho case. 93. Now, look at question 00, and your sub- lent answers, and I ask you whethor the Bnine Wil' 4fi npply to thu National Phonograph Company, that 133 •s to say, did that company in any way prevent complainant, New York Phonograph Company, mini doing any business? A. I should say Yes ns successor to tho North American. ’ Q. 04. Mow did the National Phonograph Com- pany prevent tho complainant, New York Phono- graph Company, from doing business in tho State of New York, prior to tho bringing of this suit? A. I should say by not giving thorn supplies. Q. 00. Your last answer would indicate that the National Phonograph.C'onipaiiy had refused to sup¬ ply machines, records, &c., to Now York Phono- .... graph Company, is that what you meant? A. Q. 00. When did the National Phonograph Company refuse? A. I can give you no date. Q. 07. What is your source of information for the statement that tho National Phonograph Com- pany refused to so supply? Mr. Ilicks: Objected to as improper cross- examination by defendant of its own witness. A- 1 have no particular source of information. Q. 08. Mow do you know the National Phono¬ graph Company refused? Same objection. 1H5 A. I infer that as we were attempting to do busi- ness and did not get any supplies, they would not give ns any supplies, and we could not get. them of any one else. Q. 00. What attempts did the complainant, New York Phonograph Company, make to do business prior to the bringing of this suit? Mr. Ilicks : Objected to upon the ground that the witness has already testified as far as ho has had actual knowledge of the business done by tho New York Phonograph Company. A. I don’t know. A. I simply repeal that I was not. running this company and had nothing to do with tlio ordering of supplies or the management of the olllee. Q. 101. As a matter of fact yon know that the company made no attempt whatever to do bust- ness prior to the bringing of this suit? Mr. lucks: Objected to ns leading, as con¬ trary to the testimony already given by the witness, and as contrary to the fact. A. No, I do not; I am not willing to make any such statement. Q. 102. Do you find in the minutes of the meet¬ ings of the trustees of the complainant, New York Phonograph Company, any discussion or resolu¬ tion in reference to attempts to get phonographs, records and supplies from the National Phono- graph Company prior to the bringing of this suit, and the refusal of that company to so supply the complainant? A. No. Q. 103. That would be a matter which ought to he brought up and discussed at a meeting of the trustees, would it not ? Mr. Hicks: Objected to as calling for an an opinion, and a conclusion on the part of tlie witness, and the witness is advised that he is not required to express opinions. A. I don’t know. Q. lot. The refusal of the National Phonograph Company to supply tho complainant, New York Phonograph Company, with phonographs, records and supplies, would be of vital importance to the ZZTh nit?'0 NU"' Y°rk P1,0',(,Kraph Company, Mr. Micks: Same objection; also that tho question is hypothetical. A. As the company had many troubles at this tiniu, I cannot decide what would bo of vital im¬ portance and what would not. Q. 105. You have at several places answered that the company — the Now York Phonograph Com¬ pany— did no business because it could not obtain phonographs, records and supplies. Now, if that is the fact, and the National Phonograph Company so refused, would that not be of vital importance to the interests of the New York Phonograph Com- pany? Mr . Jficks : Same objection. A. I don’t know how to answer that question, for tho reason that it seems to be tho point of the question to get me committed in some way as to what were vital points to tho company at that tune. Nkw York, Novembers, 1003. Afet pursuant to adjournment at 2 i-.m., same place. Appearances : Same as at morning session. Continuation of examination of Afu. FAHNE¬ STOCK. By Mr. Pelzer : Q. 105. In your answer to question 18, you say : “They (meaning the New York Phonograph Com¬ pany) did business as long as they could ; they would do business to-day if they had a chance.” What chance did the New York Phonograph Com¬ pany want? A. They wanted to receive records ind supplies from tho North Americun Company. 40 North American Phonograph Company wont into tin* hands of a Receiver anil its assets sold? A. 1 should say they wanted the same elm nee from the successor of the Nortli American Company, which was the National Company. Q. 107. And yon admit that tile records show, or at least, the minute hook shows, that no demand was ever made on the National Phonograph Com¬ pany prior to the bringing of this suit to supply the complainant. New York Phonograph Com¬ pany, with phonographs and supplies? A. I con¬ sider my call upon Mr. Kdison to he the equivalent of a demand for supplies from the successor of the North American Company, the National Company and the Kdison Works, of which Mr. Kdison was also the head. Q. 108. And that was tile only attempt the com¬ plainant, New \ork Phonograph Company, made to continue its business? A. I cannot answer that of my own knowledge. Q. 101). Did tile complainant, New York Phono¬ graph Company, so far as its records show, ever attempt to manufacture either phonographs or graphophones on its own account, to continue its business prior to the bringing of this suit. Yon may refer to the minute book to refresh yourrecol- (Witness refers to minute book.) A. No, I should say not — what made me hesitato was that I knew at one time we laid a contract with Mr. Bellini, but I believe that was simply in the line of reproduction. Q. 1 10. So far as you know, did the complainant ever carry on “ reproduction ” under the Bettini contract? Mr. Hicks : Objected to as immaterial and irrelevant to the issues involved in this suit. A. 1 know it did a good deal under the Bettini before0'’ "n<1 '"y i,,,pression wns that il Hes from the National Company, the successors of the North American, and understanding that it is our privilege “ ti: r "r* i" th° "“■« ”«> s'™ « “«"»«■ »lth Star,, tad, it Catlin Company to manufacture for us. Q- 122. What class of goods is the Leeds & Cat- nL ZT'J, f0*- complainant, O i on I ,.0"0S,U|’,‘ Go,"I»nny? A. Records. , 12.). U a manufacturing machines, such as CtaS? ,"0K“ Y“'k Q- 121. Has tlie New York Company actually I received records from the Leeds & Catlin Company? 1!j2 A. I cannot say of my knowledge; the secretary can answer that question probably. Q. 120. Then you do not know whethur the com- pluumnt New York Phonograph Company has the'Sedrl' V°,Tp Under th,‘ «*™n«wnont with tin. Leeds A Catlin Company? A. No I do not- I understand that it takes quite a while to get the plant under way, but orders have been given for the manufacture of records, Q- 120. Is the nature of the understanding or agree,. lent with the Leeds & Catlin CompLy em bodied in the minutes of the complainant, New k if 8°> plause refer to them? (W itness rofors to minute book.) A. 1 find under May 20, 1903, the following: 1 ho secretary preslHtSTinecmitract entered into by he proper ollicors of the company with the Leeds & Catlin Company, dated May 7, 1003, for the manufacture of Edison records and the same approved.” Q- 127. Is that contract entered on the minutes? A. No, sir. Q. 128. Do you know the nature of the contract? A. I have seen it. William Fahnestock Q. 120. State as wall as yon ran what the arrangement between tile two companies is? A. I cannot give yon the exact words, hut they were to bo our agents and manufacture these records for us. Q. i:t0. Does (lie contract, if yon recollect, state how, or in accordance with what process or under what patent the records were to be manufactured? A. 1 cannot state. Q. 131. When does the New York Phonograph Company expect to receive records for sale under this contract with the Leeds & Catlin Company? A. I should say any time. I think they are be¬ hind now — I know they are. Q. 132. l)o you know whether the records are to be made under the old process, or whether they aro to hoof the new type, known ns “Moulded Records?" Mr. Hicks: Objected to upon the ground that it docs not appear that the witness has knowledge of the different processes of manu¬ facturing records, and cannot therefore under¬ stand the question. A. I do not know. Direct examination closed. Adjourned to Thursday. November 0, 1903, at 11 a. m. fi3 x-Q. 1380 Nkw Yoiik, Nov. 0, 1903. 197 Met pursuant tondjourniueiitatll o'clock a. m., at the office of the Commissioner, S. M. Hitch¬ cock, No. iff William Street, Borough of Manhat¬ tan, New York City. Appearances : Louis Hicks, Esq., and Ei.isiia K. Camp, Esq., Counsel for Complainant. Wii.i.iam Pkuskii, Esq., Counsel for Defendant. Cross-examination of Mr. FAHNESTOCK. By Mr. Hicks : 198 x-Q. 133. In question 37, you were asked in re¬ gard to the business affairs discussed at the ‘meet¬ ings of the Board of Trustees of Now York Phono¬ graph Company; for the purpose of refreshing your recollection and in order that you may state as fully as possible what business affairs were dis¬ cussed at said meetings, I ask you to refer to the minute book of the company, and to state, after so doing, the matters discussed at such meetings at which you were present? A. Referring to the minutes of meeting held in New York, December 1°, 1800, I find the following: “The circular letter No. -10 of the North American Phonograph Com¬ pany with reference to selling phonographs was read ; the following resolution with reference to the same was adopted : Whereas, this company is begin¬ ning to benefit by the system of renting phono- ! graphs and renewing rentals on same according to the terms of its agreement with the. North 1 Ameri¬ can Phonograph Company, which benefits" would i not be derived if Section 11 of said agreement should be euforced ; and whereas the enforcement of Section 11 of said agreement is believed to be contrary to the spirit of the e.cd.iiivefra no f circular referred to above. Hcsuhetl, Tlml forth American Phonograph Company be re¬ ed li> immediately rescind mid revoke said cir- leller No. 49, and notify all sub-companies to (.•fleet. The subject of selling phonographs referred to the Executive Committee with !- 1!M. Do yon lind that oil February 10 m.v fiction was taken with reference to circular No- r>:t of the North American Phonograph any? A. I lind the following; “Moved, led and carried that it copy of circular letter * of the North American Phonograph Coin- together with a copy of a letter from Arthur i/.er & Company, dated February fi, 181)1, be ■d to the Automatic Phonograph Exhibition my under Section 1) of our agreement with nnpany.” . 135. On November -1, 1801, what action, if ■its taken by the Hoard in regard to the bust- lllcu or the company? A. “Mr. Charles A. -r moved that a committee composed of the eat and secretary bo authorized to renew the t lease of premises No. 257 Fifth Avenue, -Innuary 1, 1892 until May 1, 1893, at the t rental, and to secure, if possible, an option ear or more renewal from that date. Motion seconded was carried.” 13(1. Did you ever visit the ofllcc of the ny at 257 Fifth Avenue? A. Often. I was habit of stopping there on my way up town afternoon, once in ten dnv "William Fahnestock ment«f-J0Ur V,sj,8? A- r sa'v l*") various depart- 103 nutts in operation, and the meetings of the board ere in the usual form of corporation meetings; the get er„| affairs were discussed and we passed upon the objects of the meeting. 1 x-Q. 138. Did you see a salesroom conducted by j>ew l ork 1 honogmpi, Company conducted at 257 I'lfth Avenue? A. Yes. x-Q. 139. Describe what you saw in the sales¬ room referred to, and state, if you know, who were in charge of the salesrooms for New York Phono¬ graph Company? A. The secretary, Mr. Ilichnrd town joy Unities, was the head of the office, and he had four or live assistants under him, who con- 101 ducted the business of the office; there was a re¬ ceiving department wherein the supplies were de¬ livered, and there was likewise an express depart¬ ment or a mailing department whore the orders were filled. A good many orders came from cus¬ tomers who came to the office, but I think the larger part of them came by mail. x-Q. l-lo. Did you see any goods, wares or mer¬ chandise on sale at said office of New York Phono¬ graph Company? A. I did. They were records, reproductions and machines and various appli- iQr ances, some mechanical and some batteries to run the machines ; there was also a large business done in the nickel-in-the-slot machines placed on exhi¬ bition at different points in the city, the receipts from which were handed to Mr. Haines, consisting mostly of nickels and buttons. x-Q. 141. From whom did New York Phono¬ graph Company obtain, if you know, the supplies described by you in your last answer? A. From the North American Phonograph Company, which we always designated as the “parent company.” x-Q. 142. Do you know the difference between a phonograph and a graphophone, Mr. Fnhne- stock? A. I tho SHtiio office ut 207 Fifth Ave¬ nue before the consolidation of said predeces- sor with the Metropolitan Phonograph Company to form complainant? A. Yes. My recollection is that the Metropolitan Company had the down stnn-s offices, and we had the upstairs offices in the same building. I “Jo, R°ferrine t0 the “Mtlng of Novem- uer 10, 1803, can you state whether complainant turned over its office at No. 257 Fifth Avenue on July 1, 1803, the date of thesnspension agreement referred to m your direct testimony? A. I find the following: “Resolved that the Treasurer be directed to charge the balance of rental on prem¬ ises No. 207 Fifth Avenue, New York City, from July 1st to date of vacating the same to the account of the North American Phonograph Company.” x-Q 153. Did New York Phonograph Company in fact vacate said premises and turn said prem¬ ises over to the North American Phonograph Com¬ pany subsequent to the making or the suspension igreement, Complainant’s Exhibit 22, which I show von for the purpose of refreshing your recol¬ lection? Witness refers to agreement. A. Having refreshed my memory, 1 should sav was taken hy the Board with reference to Com¬ plainant's Kxhibit No. 22, the agreement dated July 1. 1893, between the North American Phono¬ graph Company and New York Phonograph Com¬ pany. A. 1 lind the following: "A special com¬ mittee appointed to draft and amend agreement between the North American Phonograph Com¬ pany and the New York Phonograph Company, reported having had several conferences * with the Vice-President of the North American Phono¬ graph Company and the committee submitted the following agreement which is approved by the North American Phonograph Company.” x-Q- 155. “ The following agreement” referred lo is set forth in tho minute book, is it not, and is Complainant's Kxhibit 22, already in evidence. A. It is. x-Q. 15(1. Who composed the special committee ippoinlcd to draft the amended agreement between Ihe North American Phonograph Company and New York Phonograph Company? A. The com- nittee consisted of Charles A. Cheever, William I’ahnestock and Richard Townley Haines, ap¬ pointed at the meeting of tho Hoard on February 7th, 1893. x-Q. 157. At the meeting of March 3, 1893, whereat the amended agreement just referred to was mbinilted, what action, if any, wastakun with refer ■nee to the management of the New York agency ibout to be established under the said amended Amirican t e fl,1r‘,,er >"alc thnt tlle North 175 A nm.can Phonograph Company, through their Aico-r -resale..., A. O. Tate, have offered the man ugoment of the New York agency to Charles A Cheever and Richard Townley Haines, agreeing to pay them for their services. Richard Townley Haines has the consent of tho North American J l,0"og'aph Company to devote the necessary Co|,|i]M|,|iy.,”,l^l,i,,S tI|y the North American x-Q. 184. The payment of $1,000 by Hardin, the -cen or, you say was made about May, 1800; now, referring to Complainant’s Exhibit 10, what do you find to be tho date on which the certificate of the incorporation of defendant was filed with ary,b1800lUly ^ 8U“e? A’ T,w a7th d,l>' of Jan«- x-Q. 185. Now, subsequent to .January 27, 1890, tlie date of incorporation of defendant, National 1 honograpl, Company, did New York Phonograph Company join with National Phonograph Com- 1RS irnny and the Edison Phonograph Works in any 88 sutt for the imrpose of protecting the rights of New iork I honograph Company under its contracts with the North American Phonograph Company? A. Yes, they did. x-Q. 180. Have you examined Complainant’s Exhibits 10 and 11, on file in theoflice of the Clerk of the Circuit Court of the United States, Southern District of New York? A. I have. x-Q. 187. And what appeared to bo the date upon which the bills of complaint were filed ? A Octo¬ ber 0,1890. x-Q. 188. Those two suits in which tho bills 180 were filed October 0, 1800, were respectively num¬ bered 0434 and 0435, wore they not ? A. They were. x-Q. 180. And National Phonograph Company anil Edison Phonograph Works and New York Phonograph Company were the complainants in each, were they not ? A. They were. x-Q. 100. And Columbia Phonograph Company and Edward D. Easton were the defendants in each were they not ? A. They were. x-Q. 101. Did you examine tho signatures ap- WjJl.io.rn Ffthng 0 pended lo each of the said two lulls of complaint, liled October 0, 181)0 ? A. I did. x-Q. 102. Is the signature. New York Phono¬ graph Co. by Noah Davis. Attorney, in tile hand¬ writing of Noah Davis ? A. It is. on each. x-Q. Are tin; signatures “ Noah Dnvis” and - A. ],. PinrolTs” of counsel for New York Phonograph Company on each of said hills of complaint, in tint handwriting of said Noah Davis and said A. I.. Pincoirs, respectively, if you are familiar with the handwriting of each of them? A. They are, and I am familiar with their hand- I writing. x-Q. PD- It is a fact, is it not, that Messrs. Dyer & Driscoll appeared as solicitors in uncli of said suits for the New York Phonograph Com¬ pany, its well as for National Phonograph Com¬ pany and Edison Phonograph Works? A. Il ls. x-Q. 190. Did New York Phonograph Company authorize any one to have Messrs. Dyer & Driscoll net as solicitors for it. in said two suits ? A. Not to my knowledge. x-Q. 1 DO. Noah Davis, however, was general counsel at that time for New York Phonograph Company, was he not ? A. He was. x-Q- 107. Did he not have power to represent the company in such litigation ? A. lie did. x-Q. J SIS. At the time of examining the said two bills of complaint, did you examine the other papers forming the records in the said two suits, and 'did you liud among them Complainant’s Exhibits 12 and 13, being orders of discontinuance of said two suits? A. I did. x-Q. l!)t). When were the orders of discontinu¬ ance entered and filed ? A. December 0, 1890. x-Q. 2U0. Was New York Phonograph Company consulted with reference to the discontinuance of 06 A- Not to my M x-Q. 201. Now, in your answer to Question 02 “I!0’ Tthero wns something done in 1800, exactly why, I do not understand it,— I can¬ not say, but I have heard Mr. Haines say several tunes that Judge Noah Davis was empowered to represent this company to join in a suit against the Grnphophone Company ” ; I ask you whether the the two suits of which the hills of complaint and Uie orders of discontinuance forming Complain¬ ant’s Exhibits 10, 11, 12 and 13, constitute the suit against the Grnphophone Company referred to by you in your answer to Q. 02 ? A. They do. x-Q. 202. In your answer to Q. 02, you go on to say : “ I never knew exactly the result of this, but I have understood that some kind of a deal was made, the particulars of which I have never heard;” 1^ ask you whether, after reading the record in said suits, you do not now know the results thereof; namely, that they were discon¬ tinued. A. Ido. x Q. 203. And does it not appear that the suits were discontinued upon the consent of Messrs. Dyer & Driscoll, acting alone for all the complain- 195 ants, including Now York Phonograph Company? A. That is true. x-Q. 20-1. Now, with reference to the deal to which you referred in your answer to Q. 02, 1 ask you to look at Complainant’s Exhibit 23, being the contract dated December 7, 1800, between the American Grnphophone Company and the National Phonograph Company and the Edison Phonograph Works, and ask you to state whether that contract sots forth the deal which you had in mind. A. It does. f x-Q. 200. That contract was executed, was it William Fahnestock CO mu, on December 7. 1800. two days before the orders of discontinuance in the said two suits were filed? A. It was. Adjourned to 2 :lfl o'clock f. M. Same place. Met pursuant to adjournment at 2:15 l\ it. Same place. Appearances: Same as at morning session. x-Q. 200. Referring to the meetings of the Hoard, do you find that on February 10, 1800, any action was taken by tliu Hoard of Trustees of New York Phonograph Company with reference to requesting Mr. Edison to protect the righ Is of New York Phonograph Company? A. Yes, I find the following: “ It was moved and seconded that tile Secretary be instructed to write to Mr.#Thomas A. Edison, congratulating him upon acquiring the assets of the North American Phonograph Com¬ pany, and assuring him of our interest in his sne cess, and in the success of onr Company, both of which we believe will be greatly benefited by his purchase, requesting him to give instructions that no phonographs or supplies be sold or delivered for use in New York except through our company, and that a committee from our company will call upon him at his early convenience.’ A com- mitten consisting of the president, Mr. Wiliintn Fahnestock and Mr. It. T. Haines was appointed by the chair to call upon Mr. T. A. Edison at his early convenience and to report at the next meet¬ ing The secretary reported that the Company i.u won its suit against John It. Hardin, Receiver for the North American Phonograph Company; also that Mr. T. A. Edison had purchased all of 07 , ' “orm American Phonograph Company, including patent rights and good will of tho cotupnhy which wore sold ns n going con- x-Q. 207. In answer to question 44 you read the reference from tho minute book to the appoint- incut of tho committee to confer with Mr. Edison, but omitted to state the date; will you now state whether tho date of tho resolution sot forth in your answer to Q. 44 was not January 31, 1808? A. January 31, 1898. x-Q. 208. In answer to Q. 42 you read the re¬ port of the chairman of tho committee appointed to confer with Mr. Edison; did you, ns stated in 200 tho report, together with Mr. John P. Haines and Mr. Lewis, call upon Mr. Edison at his laboratory? A. I did. ' x-Q. 209. Whom was the laboratory? A. In Orange, I think it was, New Jersey. x-Q. 210. Will you state whether anyone other than Mr. Edison, Mr. Haines, Mr. Lewis and your¬ self wore present at the time of your call upon Mr. Edison? A. Mr. Gilmore was present at the in¬ terview, but I do not remember whether anybody else was or not. x-Q. 211. Is the Mr. Gilmore who wns present at 201 that interview with Mr. Edison, William E. Gilmore, president of defendant National Phonograph Com¬ pany? A. Ho is. x-Q. 212. Now state fully the conversation that took placo at Mr. Edison’s laboratory at the time of said call? A. Air. Edison is, ns you know, very hard to communicate with, as he appears to be very deaf ; Mr. Gilmoro acted as a sort of translator and go-between between Mr. Edison and ourselves; wo asked Air. Edison to continue giving supplies and machines to our company, and ho said that ho would be very glad to do so if wo would go into X‘M394 / 202 business ami semi him orders, and lie would treat us the same as anybody else in tho business; wo told Mr. Kdison that innsmuoh ns we had paid • $220,000 to liim, and contributed some of ourstock, wo didn’t consider that we were to be put upon the same plane as other dealers; Mr. Kdison then told us that ho wouldn’t treat us any different from anybody else, and told us that we hail better establish our rights before wo talked to him, and filially referred us to Mr. Dyer, his lawyer, to con¬ sider the same subject. x-Q. a 13. What, if anything, did your com- „0,j mitteo say to Mr. Kdison ns to tho basis of the request made to him? A. Wo went to Kdison because we understood that he was selling machines and supplies to other parties in our territory. I think also that we intimated to Mr. Kdison that wo might suo him if he continued to supply other people in our territory. x-Q. 211. Was anything said at the interview with reference to Mr. Kdison haring purchased tho assets of North American Phonograph Company? A. Yes, we went there understanding that Mr. Edison owned the National Phonograph Company and had bought up everything that was left of the 201 North American Phonograph Company, and wo regarded him as head of the whole enterprise. x-Q. 215. When you got there did you state to Mr. Edison what you have just said you had in mind? A. Yes. x-Q. 210. State as fully as you can, at tho present time, what was said during the conversation upon this point? A. My recollection is, that we went over the entire ground and stated to Mr. Edison the position of our company from tho start up to that time, emphasizing the fact that we were ready to do business and he was tho only person that stood in the way, and we had tried every way to William Fahnestock do business, nnd mado this personal appenl to 205 him. x-Q. 217. Did you refer to a letter having been sent to him under the resolution of February 10, 1800, which you have read? A. Was that tho let¬ ter congratulating him? x-Q. 218. Yes? A. Yes. x-Q. 210. What, if anything, did Mr. Edison say in regard to that letter? A. I do not remember what Mr. Edison said, any more than what I have stated, that his answer to everything was to get Into -business nnd I will treat you well, the same as ' anybody else. 808 x-Q. 220. Did Mr. Edison acknowledge receipt of tho letter? A. I should say he did. x-Q- 221. Now state as fully ns you recollect what part William E. Gilmore took in the inter¬ view, and what, if anything, was said by him? A. I cannot remember anything in particular that Mr. Gilmoro said, but ho referred every question to Mr. Edison, apparently acknowledging that Mr. Edison was the head or tho master of the situation. x-Q. 222. As I understand you, at tho interview with Mr. Edison at his laboratory, you and tho other members of the committee representing New 207 York Phonograph Company, requested of Mr. Edison that New York Phonograph Company be supplied by him and his companies with phono¬ graphs and supplies, under tho original contracts made by Now York Phonograph Company with tho North American Phonograph Company; is that substantially correct? A. It is. x-Q. 223. Did William E. Gilmoro, who was s present, interpose any objection to the requests made by your committee to Mr. Edison? A. I do not remember that he did. x-Q. 224.- Did he say that your committee should of the National Phonograph of Mr. Kdison? A. I am sure make the Company ho did not x-Q. SSfl. Did Mr. fiilmore say that Mr. Kdison had assigned his hid for tile assets of the North American Phonograph Company to the National Phonograph Company and to On, and that Mr. Kdison had no control or authority in tile ques- tion of supplying New York Phonograph Company with phonographs and supplies? A. leisure he did not, and I am equally sure that he left it to Mr. Kdison to answer all the questions. x-Q. 220. Did Mr. Gilmore at that interview ofTer on behalf of himself, or on behalf of the National Phonograph Company, or on behalf of the Kdison Phonograph Works, or on behalf of anybody, to supply New ork Phonograph Company within the State of New \ ork with phonographs and supplies? A. I am sure he did not. . **'• ^*'1 be refuse, either alone or in conncc- .1011 with Kdison to supply New York Phonograph company with phonographs and supplies, or did ie leave the matter entirely with Mr. Kdison. A. He left it entirely with Mr. Kdison. , 23S\ 1>i(1 Mr- Oil more act in accord with Mr. wlison at the interview? A. Yes. x-Q. 220. Did Mr. Gilmore object to any state- !"d?..l,.y.Mr‘ Illli8on ,0 .'"nr committee? 'inber that he made any objec A. I do n lUne f i'!1’- IS ■'ll' present during the Witness : He was. -M- . . . to confer with Mr. Kdi- Say’ :lI'I>oi»ted .la nunry 31, 1808, and ■Ported June I), isos- cm, . . . citelv -i ,..i , , ’ "" •'ou 8lat<3 approxt- Zl ,nonth or between those two S )0,,r Bon,,",l,«« railed upon Mr. Edison? 1808 1 sho"llls,ly 'ye must have been therein May, 211 x-Q. 231. The time of this interview was subse¬ quent to the cessation of business within the State of New York by the Receiver Hardin, of the North American Phonograph Company, was it not? x-Q. 232. ft was also subsequent to the discon¬ tinuance of the two suits brought by Edison Phono¬ graph Works, National Phonograph Company, and Now York Phonograph Company against Columbia Phonograph Company and Edward P. Easton? A. It was. S12 x-Q. 233. Prom the time that Now York Phono- graph Company surrendered its otlico and its busi¬ ness to the North American Phonograph Company under the agreement of July 1. 1803, has New York Phonograph Company received any supplies or phonographs, or other goods, wares and mer¬ chandise, from the North American Phonograph Company, or from Hardin, its Receiver, or from Thomas A. Kdison, or from Kdison Phonograph Works, or from National Phonograph Company or from the Edison Phonograph Company. A. I think x-Q. 23-1. Referring to the paragraph marked 213 Third of Complainant’s Exhibits -19 and iiO, wherein New York Phonograph Company and the Metro¬ politan Phonograph Company each “admits the validity of all patents relating to phonographs, phonograph-graphophoues and appliances therefor now held or which may hereafter be held by the party of the first part, or under which it may hold licenses exclusive in their character, or under which its business may be conducted, and the validity of its rights under or title thereto, and will not dis¬ pute the same, or make use of, or be interested in, or causo others to make use of or be interested in, 72 314 any phonographs or plmnogriiph-graphophones, or appliances therefor, or any instrument of u similar kind not leased, licensed, or authorized by the party of the first part or its assigns:” has New York Phonograph Company at any time done any¬ thing to tpiestion the validity of tlio patents referred to in said third paragraph? A. It has x-Q. 2:t5. And has New York Phonograph Com¬ pany been interested in or caused others to make use of, or he interested in any phonographs or phono- graph-grapliophones, or appliances t herefor, or any j)1R instrument of a similar kind not leased, licensed or authorized by the North American Phonograph Company or its assigns? A. It has not. x-Q. 2110. Since then, ns you have testified, New York Phonograph Company was unable to secure supplies through Mr. Kdison, was there any source open to New York Phonograph Company that you know of from which, under its contract, and in accordance therewith New York Phonograph Com- puny could secure phonogmpns or phonogmph- gmphophones, or appliances therefor for the pur¬ pose of doing business? A. None whatever. x-Q. 237. Thomas A. Kdison was president of 210 the Kdison Phonograph Company, was ho not? A. He was. x-Q- 228. And he was president of the Kdison Phonograph Works, was he not? A. lie was. x-Q. 231). If Thomas A. Kdison, Nntionni Phono¬ graph Company and the Kdison Phonograph Works, and the Kdison Phonograph Company, or any one or more of them, are not the successors and assigns of the North American Phonograph Company, do you know who the successors or assigns of the North American Phonograph Com¬ pany are? Mt. Pelzer : Objected to as irrelevant, iu- Wjlliam Ffthnestook ^•uoo competent and immaterial, and ns calling for the opinion of the witness, and further for the reason that the records show who the pur¬ chasers of the assets of the North American Company wore. A. I do not know of anybody else but Edison, who is I ho successor. x-Q. 240. Would it bo possible ns a business proposition, for New York Phonograph Company to exercise the exclusive rights which it claims within the State of New York to sell and use phonographs and supplies, in competition with hundreds of others to whom the same phonographs and supplies are sold? A. It would not. x-Q. 2.||. Now, referring again to the business activity of New York Phonograph Company prior to the suspension agreement, dated July 1, 1803, do you tint! that on November 4; 1801, the Board took any action with reference to the purchase of blanks? Witness refers to minute book. A. Acs. It reads as follows: "It was moved, seconded and carried, that the ofileers of the com¬ pany be authorized to use their discretion with reference to the purchase of phonographs blanks direct from the Kdison Phonograph Works or else¬ where, in their judgment for the best interest of tlie company.” x-Q. 242. All phonograph blanks were manu¬ factured by the Kdison Phonograph Works, were they not? Mr • Pelzer : Objected to as the question slutos what is contrary to the facts, and further for the reason that the witness has already testified that he does not know what kind of blanks wero used by the complainant. A. I think so. x-Q. 243. Wlmt I meant particularly in the pre- 217 218 210 ions question was whether or not nil blanks ecu red h.v Now York Phonograph Cotupnny for soon the phonograph were limn it fnotu rod by llio Idison Phonograph Works? Mr. 1‘eUer: Olijecled to on the ground tlint the witness has testified that the New York Company received its supplies from the North Amnrienii Company, and further that lie was not familiar with tile details of the business, and had nothing whatever to do with tho ordering of supplies. A. That is my understanding. x-Q. 1211. The Kdisuii Phonograph Works innnn- ictured all phonographs and phonograph supplies liieh the North American Phonograph Company .silt in, did it not, so far as you know? A. That as my understanding. x-Q. 2-15. As matter of fact, the blanks used by ew York Phonograph Company and its prcdeccs- >rs were obtained from the Ninth American Pho- •graph Company, were they not ? A. So I under- and. x-Q. 2-1(1. liefurring to the minutes of November ', 181)1, can you state whether Now York Pliolio- aph Company was doing business in the furnish- g of bat teries for the running of phonographs and nilar machines? A. I remember that they did business in batteries as well, as some machines at were wound up. Kxtract from meeting held jvember It), 181)1, reads as follows: “Aproposi- in was received from the Automatic Phonograph cnibition Company and referred to a commit tue m posed of .loh n P. Haines, William Knhnestock d liichard Townley Haines for action. On Jtion of Noah Davis, seconded by Charles A. leever, the committee were authorized to take di action in the matter as they should judge best William Fahnestock * -31402 x-Q. 2-17. Deferring to the minutes of May 20, 228 1802, to refresh your recollection, can you state whether New York Phonograph Company had done business with the Automatic Phonograph Iixhibi- ti°n Company in supplying that company with phonographs for usu within the Stateof New York? A. I remember very well that we did, and also furnished thuni with records. x-Q. 2-18. .lust state generally what you now recollect with regard to the business done with that company? A. My recollection is that wo furnished them with machines and a certain number of rec¬ ords, ami received in return a certain proportion of ■ the receipts; all the money, as I remember, was handed over to us first, and wo kept the account. x-Q. 2-11). Deferring to the minutes of July 12, • 802, to refresh your recollection, can you state whether New York Phonograph Company discussed at that meeting the question of prices in its busi¬ ness? A. That is correct; I remember distinctly that we made up our mind that we must reduce expenses, and a committee was appointed to take action on that matter. x-Q. 250. Do you not recollect that at the same meeting tho prices of phonographs and supplies were discussed? A. Yes, 1 see that is correct; if 225 I remember right, the price of supplies was ad¬ vanced by the parent company) and it made a seri¬ ous difference in our receipts. 1 think this occurred several times, and it seemed that whenever wo were getting ahead in our business we had a fresh diffi¬ culty with tho North American Company regarding the price of supplies, they being rather arbitrary with regard to their prices and marking up prices. x-Q. 251. Deferring to the minutes of October 31, 1802, can you state whether Now York Phono¬ graph Company did any busines in automatic at¬ tachments used in connection with the phonograph? WjJLlam Fahne your recollection. A. I find iln* following: •• Re port of tin* Kxecntive Committee wax submit to; n ml approved. On motion duly seconded tin; K* eotitive Committee was authorized to settle tin d i fforeuees ex ist i ng bet ween tin) Now York Phono graph Company and tin- Automat it; Phonograpl exhibition Company, and was instructed to gel written authority from the North American Clio nngrupli Company and others holding judgment; against tin; Automatic Phonograph exhibition Company to list; tin; automatic: attachments to lx turned over by tin: Automatic Phonograph Kxhilii tion Company, and tin- necessary admission from them relinquishing ull claims to the said mechanism under the various judgments referred to.” x-Q. ana. As I understand your testimony, the complainant furnished the Automatic Company with phonographs for use only; did the Automatic Company give tile complainant any security fot tile return of the machines? A. They deposited money in the Knickerbocker Trust Company for that purpose. x-Q- 25:i- deferring to the minutes of November 0, 1893, to refresh your recollection, can you state whether New York Phonograph Company dealt in storage batteries in connection with phonographs. &c.? A. They did. b 1 x-Q. 254. Referring to the minutes of December 20, 1892, and February 17, 1898, state if von can from present recollection whutoccurred with refer¬ ence to the question of selling phonographs ami discontinuing the leasing thereof? A. I think they decided to sell machines, although the North American Company would not give them the dis- count they asked; in other words the company decided to sell tnachines under protest. x-Q. SoO. The North American Phonograph 77 Company had the right to require New York 229 Phonograph Company, as well as the other sub- companies, to ‘‘give the public the option of either leasing or purchasing the said instruments;" that is, phonographs or phonogniph.graphophones, did it not ; before answering, refer to the eleventh paragraph of complainant’s exhibits 19 and 50. (\\ itness refers to exhibits.) A. That is correct. x-Q. 250. The reason why New York Phono- grapli Company protested against selling the nm- •chine was, was it not, as stated in the minutes of December 10, 1890, that New York Phonograph Company found (lie system of leasing profitable? ^ x-Q. 257. Circular letter No. 49 of the North American Phonograph Company required the snb- compnnies to sell phonographs, did it not? A. It did, if T remember. x-Q. 258. And circular letter No. 51, Complain¬ ant's Kxhibit 109, suspended the requirements, did it not? A. That is correct; it did suspend the requirement of selling machines. x-Q. 259. Wore you present at the meeting of stockholders of complainant, March 17, 1898, called for the purpose of ratifying the suspension agreement with the North American Phonograph 231 Company? A. I can’t say; I don't remember. x-Q. 259. Referring to the minutes of February 0, 1804, can you state when the agreement of July 1, 1803, went into effect? A. July 1, 1893. x-Q. 200. Referring to the minutes of February 21, 1894, was any request made of tile North American Phonograph Company for a written monthly statement? A. That is correct. I think we hadn't had any statement of receipts, and we wanted the North American Company to tell us what business they had done. x-Q. 201. After giving up its office at No. 257 William Fahnestock Fifth Avenue did complainant taken new office, anti if so where? A. 32 Park Place, New York City. x-Q. 2112. It is a fart, then, is it not, that down to .Inly I, 1803, New York Phonograph Company was actively engaged in luisinuss within the State of New York? A. That is correct. x-Q. 203. Dnringthe.sn.spension agreement from •Inly I, 18H3, to .Inly I, 1805, did Now York Phonograph Company take any action with refer¬ ence to protecting its territory from invasion by others; for the purpose of refreshing yonr recol¬ lection, consult the minutes of November 10, 1801, and February 27, 1805? (Witness refers to minnto book.) A. Yes, attention was called to the American Crnphophone Company operating in our territory, and .lodge Noah Davis was authorized to commence suit against Wnlcuit, Miller ,fc Com¬ pany, and others. x Q. 204. 1 on were a member of the Executive Committee of the Hoard c(f Trustees of the New York Phonograph Company for many successive years, were you? A. Yes. Adjourned to Wednesday, November 11, at 11 o’clock. Same place. 70 Nkw Yoiik, November 11, 1003. 235 Met pursuant to adjournment at 11 o’clock a. si. at the office of the Commissioner, S. M. Hitch¬ cock, 15 William Street. New York City. Appearances : Louts IIioks, Esq., and Elisha K. Camp, Esq., for Complainant. William Pklzkii, Esq., for Defendant- Cross-examination of Mil. FAHNESTOCK con- tinned. 230 liy Mr. Hicks : x- Q. 205. Will you state your residence and occupation? A. Residence 22 East 51st Street; my office is 2 Wnll Street and my business is n broker. x-Q. 200. Are you a member of any firm, and if so what? A. I am a member of my own firm, Fahnestock & Company, No. 2 Wall Street. x-Q. 207. Are you a member of the New York Stock Exchange? A. I am, and have been for 22 x-Q. 208. In yonr answer to Q. 5, you say that when you acceptud the office of Treasurer of com¬ plainant, you learned that all tile books and papers of the company had been placed by the former Secretary of the company, Evans, in the hands of counsel, Messrs. Purdy, Squire & Rowe; for whom were Messrs. Purdy, Squire & Rowe counsel? Mr. Pelser : Objected to its irrelevant, in¬ competent aud immaterial. A. They said they were counsel for Evans. x.Q. 200. Will you state what you know in re¬ gard to Lemuel E. Evans, with reference to com- pluinaut, and the litigation brought by complain- :40' William Fahnestock 2:18 !,"t ngniii"l tin; Edison interests io on force its con- tract rights? Mr. I‘ehcr : Same objection. A. At the beginning of lliu litigation, Kvans was a Brent believer in the suit, going about ami collect¬ ing money from the vario . . to carry it on; after a certain time lie changed his attitude entirely and went directly to the opposite side and did everything to hinder us; there is only one in¬ ference to draw, and that is that, he was hired to do so. Mr. (Jump: Did Mr. Kvans ever render liny list account to vott or any other officer of New Voik Phonograph Company of the moneys so collected? Mr. Pelzer ; Objected to ns irrelevant, in- competent and immaterial, and further for the reason that any questions arising between Mr. Kvans and the New York Company have no wiring whatever on the mutters here at issue between the New York Company and the National Company, and notice of motion is here givun to strike out the questions and answers on that line of examination, n . Mr. //Ms: Complainant's counsel states that the farther testimony in the cause will show that Kvans has acted for and represented defendant, National Phonograph Company. ‘ ‘ . s,,w !1,iy statements by Mr. Kvans at aij.v time; not even for the $75.00 I loaned him one time myself. x-Q. 271. Yon know, however, of your own 8tc°i l n llflt l‘,V:i"S r “ P,'r,)0'Sl‘’ “ l,U Cl“i,n8' °f tl,u moUon 1 ‘l’aill,i ejection and notice of 1 do, and he came to see me several times ou 81 the subject, trying each time to get mo to subscribe 21 1 more, as lie said it was such a very good thing for the Coinpnuy. x-Q. 272. Did Mr. Kvans ever state any reason for his sudden change of front? Mr. Pelzer: Same objection and notice of motion. A. None whatever, and he disappeared from view and we had great difficulty in finding him. x-Q. 278. Can you state of your own knowledge whether New York Phonograph Company has paid all bills presented to it since the time that you have been treasurer? A. It has. q(0 By Mr. Hicks i x-Q. 274. In your answer to Q. 5 you refer to several branches of the defense, growing out of the prosecution of tho New York Phonograph Com¬ pany’s suit against the National Phonograph Com¬ pany ; will you now state in detail what are the several branches of the defense to which you Imd reference in your said answer? A. I mean by that that I had to pay Messrs. Purdy, Squire & Rowe, who were said to be acting for Evans, for our books which they held, and the next time 1 met Messrs. Purdy, Squire Sz Howe was at the election at 248 Turrytown, at which they seemed to bo very active on the Evans side, doing everything in their power to upset the election by objecting to every vote that we cast. x-Q. 275. Kvans 1ms brought a suit against New York Phonograph Company, has ho not, upon an alleged claim for salary? Mr. Pelzer: Same objection and notice of motion. A. That is correct. x-Q. 270. Messrs. Purdy, Squire & Rowe appear us attorneys for Evnus in that suit, do they not? x-Q. 27*. And i graph Company h: ■liiil of 1C vans' Hai liiul ami received li New York Piloting Mr. I'clzcr : ilia l suit New York I’liono sol up, in addition to its de i, a counter-claim for money Kvans to mid for the use o ipli Company, has it not? Same objection and notice' o x-Q. 278. Are the moneys referred to ill the counter-claim the moneys which you say Kvans collected from tho stockholders to aid complainant in carrying on its litigation? Mr. Pehvr: Same objection and notice of motion. A. They are. x-Q. 2711. Does New York Phonograph Company owe anything to Kvans for salary? Mr. I'dter: Same objection ami notice of motion. A. Not to my knowledge, and I do not find that he ever was entitled to any salary, there being no mention of it in any of the records. x-Q. 281). In April, 1003, did not one John K. Helm bring suit against the American Grapho- phone Company and Columbia Phonograph Com¬ pany General, alleging that he was siting on be¬ half of New York Phonograph Companv? A. I understand that to be (lie ease. x-Q. 281. Did not Messrs. Purdy, Squire & Howe appear as solicitors of record for Hulm in that suit? A. That is correct. x-Q. 282. And when testimony began to be' taken on behalf of the complainant Helm in that ;mt, did not Howard W. Hayes, Ksq., counsel for this defendant in this suit, appear as counsel for witnesses? A. That is correct. x.Q. 283. In April, 1002, was not tin application made on behalf of one William Carman to the At¬ torney- General of thu State of New York to bring an action against complainant and its directors tr procure a judgment dissolving complainant and forfeiting its corporate rights and for the appoint¬ ment of a Receiver and to remove tho directors from oflirc and to distribute the assets of com¬ plainant? A. It was. x-Q. 28-1. Now, can you state who made the affi¬ davits in stipportof that application by Carman tc the Attorney-General and for the purpose of re¬ freshing your recollection you may refer to the original papers upon thu application served upon New York Phonograph Company, if you have them. A. Kvans and McCoy and Purdy and Washington Hrockner. x-Q. 285. The Kvans and McCoy mentioned by you ns having made such affidavits are Lemuel K. Kvans and Joseph I«\ McCoy, are they not? A. They are. x-Q. 280. They were each at one time directors of complaint, were they not? A. They were. x-Q. 287. Now, state what you know with ref¬ ence to McCoy, and what association, if any, has existed between him and Kvans and Howard W. Hayes, of counsel for defendant, and John E. Helm? Mr. Pelter : Objected to ns irrelevant, in¬ competent and immaterial, and as having no bearing on the matters hero in issue. A. McCoy is a broker and during the time that the hooks wore in tho hands of Messrs. Purdy, Squire Sz Kotve, an accurate list of all the slock- holders was made, which list. I saw at the election; McCoy used overy effort in liis power by letters and William personal interviews to induce tile stockholders to sell out to him ; he has been to see me at least ten limes to know what I would lake for my stock, and asking me whether I would sell him ’enough stock to hand the control overto the Edison inter¬ ests; In; claims that lie does this simply for the commission that he gets, but I have no knowledge of that fact; he was present at the election, and was on the defeated ticket ; lie is still in the same business. 1 have seen probably 2(1 letters that he has written within the last year with thesame object in view, that is the purchase of stock; he is always present whenever there is a sale anywhere or any place of New York Phonograph stock, and when he doesn't like toappear himself he sends someone else to represent him; I am almost inclined to be¬ lieve that it is only a matter of money with Mr. McCoy, and think that for a consideration ho might join ns in the purchase of stock or any other tiling we wished him to do. x-Q. 288. Yon were snbpwnncd to testify in this suit on behalf of the defendant, were you not? x-Q. 280. Who served the subptena upon von? A. Mr. Joseph F. McCoy. x-Q. 2110. Before the beginning of the suit wherein Helm is complainant, above referred to, were any papers served upon you? A. Yes, there , X'1Q:,*°V those papers served? 1 ' * t'xuk by McCoy; he has served so many papeis on me that i t is safe to say he served those. 1 am sure it was McCoy. I remember having a conversation with him. , X:Q*. I,Ui 1 ,ml-v » lio you say made an nfll- support of Carman’s application to tho Mteneral, was James W. Purdy, .Jr., the 85 Purdy of the firm of Purdy. Squire* Rowe? A. 258 That is correct. x-Q. 203. Can you state whether Carman’s ap¬ plication to the Attorney-Guiiural was granted or denied, and tho date thereof? A. I .think it was denied, but I do not know thu date (witness refers to papers); it was denied on July 30, 1002. x-Q. 20-1. You have spoken of tho activity of Joseph K. McCoy after he wentoverto tho defense; was not McCoy associated with Evans prior to the election of tho Hoard of Trustees of complainant in February, 1003, in an effort to socuro control of stiflicicut stock of complainant to elect a Board of Trustees nominated by them? A. He was. 2!54 x-Q. 205. Did not Evans and McCoy represent to the stockholders of New York Phonograph Company in their said efforts, and if a new Board of Trustees should be elected, of which they, Evans & McCoy, should be members, the litigation in this suit of New York Phonograph Company against National Phonograph Company would stop? A. They did, and I have seen copies of that letter stating facts as you have stated them. x-Q. 200. Did they send a circular letter to tho stockholders of New York Phonograph Company ' at the time mentioned, and to thu effect men- 255 tinned? A. They did, forgetting that they had asked the same people to subscribe when the suit was started against Edison, telling them how good it would be for the company. x-Q. 207. Were you present at tho election of Trustees of complainant at Tnrrytown, in Febru¬ ary, 1003? A. I was. x-Q. 208. Will you statu whether more than one ticket for Trustees was nominated, and if so, what were the names appearing upon eacli ticket? A. There were two tickets nominated; one ticket — the first being for John P. Haines, James Slater, !. Bourne, si lid James L. Andeni and II. M. Fun ton; tin* other ticket was for .lolin K. Helm, amos W. Gladstone, Joseph M. Hill, Joseph F. 'eCoy, Lemuel K. Evans, Scott Trenmin, and William Mnrkgraf. x-Q. 20!). Which ticket was elected? A. Thu cket headed hy Mr. Haines. x-Q. tiO0. Were Messrs. John U. Helm, Joseph . McCoy and Lemuel E. Evans present at the eel ion? A. They were. x-Q. 301. Was James W. Purdy, Jr., and Allen Rowe, of the firm of Purdy, Squire * Rowe, esent? A. They were. x-Q. 302. Is it not a fact that John H. Helm, ferred to, is associated with Howard W. Haves, tinsel for defendant herein, at Newark, New r-sey ? Mr. 1‘cher : Objected to as irrelevant, In- competent and immaterial. A. That is tine. c-Q. 303. Did yon and Mr. Andniii, Secretary Now York Phonograph Company, ever address titer to stud John H. Helm, in care of Mr. Hayes, the Prudential Building, Newark, New Jersey? I ilul. :-Q. 30-1. And was not that letter subsequently duced by Mr. Hayes, as counsel for Helm, and red in evidence on his behalf in the suit of m against, the American Grnphophone Com- i.v, eln/.i a. That is correct. ".mi m'1' •') ''f "°l •,iun'-s 'v- Gladstone also ’em at said election? A. He was. -Q. 300. Do yon know whether or not Mr. >h at l,‘at li,nu’ or I,rior thereto, nn )loye of J’homas A. Kdison? -il (r.Pcher: OI>i..,-i..,l . . . .... .. can state as to his own knowledge and farther that it is incompetent and immaterial. A. I do know that he was. There were no stockholders present of prominence who voted for the ticket bonded hy Mr. Helm; they were nothing but a lot of lawyers and clerks to my mind and hail no possible interest in the New York Phono¬ graph Company. x-Q. 307. One of the lawyers present, to whom you refer, was Frederick C. Fischer, was he not? A. He was. x-Q. 308. Mr. Fischer is likewise associated with Howard IV. Hayes, is he not, at Newark, N. J.? Mr. I'e.lzcr : Same objection. A. I understand that to be the case. x-Q. 309. Mr. Fischer verified nn affidavit before Howard \V. Hayes, as a notary public, did lie not, in a proceeding brought subsequent to thuulectiou, to set it aside, and in support of that proceeding? A. He did. x-Q. 310. After the election of the ticket headed by Mr. Ilnines, was a petition made to the Suprume Court of New York, to set aside the elec¬ tion? A. It was. x-Q. 311. Who made the petition, and in answer¬ ing this question you limy rufer to the original papers served upon the New York Phonograph Company in this proceeding, if you have them? (Witness refers to papers.) A. Lemuel E. Evans. x-Q. 312. State the date of verification of tins petition, if it is verified? A. February 2(5, 190.). x-Q. 313. Who appeared as attorneys for the petitioner Evans upon this proceeding? A. Purdy, Squire Si Rowe. . . x-Q. 31-1. Now, state who made affidavits in sup¬ port of Evans’ said petition? A. John E. Helm, Schuyler C. Jacques, Joseph F. McCoy and Allan William B. Helm, Fred- •rje** M. Clarke, each 202 C. Howe ; Lemuel R. Evans, ,l.,| erick C. Fischer, Allan C. Howe, Jo»i»l>li F. McCoy, that is all. x-Q. 310. Where you have mentioned tin of any alliant, twice in your last answ. meant that such alliant nm Stale of New Jersey. 2 3 eltmtim317; tl,u Petition of Evans to have the cluottoii set aside granted or denied? A. It was domed April 13, loon. x-Q. 318. Ry what. Justice and in what Court? A. Justice Samuel T. Maddox, at a Special Term ln> 0,1 “le 1 {lny of April, loo:i/ did'wuf ■lU tll:t, d o , | . anything which showed Whether o not the books of New York Phonograph Com" •my, which you say had been pm by I vans „ rrc^rrr.rv” "»«“*■ m," c;"”,; A. Me did; he checked 1 1 en . meeting? that the book had been chwki whlT""° Mr. Pelrrr : Ans,,„r „ ^ reason that it does not appear that the books 206 were ever in the possession of Mr. Helm, or that they were ever examined by him. x-Q. 321. Will you describe the checks used by Mr. Helm at tho time referred to by you? A. I cannot describe the check mark, nl though I remem¬ ber to have seen it and to have studied it with Mr. . Andcni that day. x Q. 322. You have stated that tho check marks employed by Mr. Helm were on the books of the company after the books were returned to com¬ plainant from the office of Messrs. Purdy, Squire * r°r lll« purpose of refreshing your reeol- eotion, I ask you to look at tho stock register of 200 Aew York Phonograph Company and state whether you find those marks in tho stock regisi x-Q- 323- Now, if you can, after refreshing your recollect ion, state the character of the marks made , y„ A ,r‘ lm at tl,e ,nuulinK “f Trustees referred to. A. 1 hey were circles around the numbers of the stock certilicate. x-Q. 324. And were the circles made by Mr. Helm at the meeting referred to, . . . to the circles which appeared about the numbers of the stock certificates of complainant, in its stock register, after tho said stock register had been returned to 207 complainant from the office of Messrs. Purdy Squire & Howe? A. They were. x-Q. 320. Previous to the. election in February, , , ’ ')'0,u 1,ny efforts made that you know or, by John E. Helm to oblaiu stock of New York Phouo- grapli Company ? A. Joseph McCoy seems to have made all the purchases for Mr. Helm, and 1 know iu particular that tlieday before thoelection Mr. McCoy bought from the Matthioseu Estate the Mattkiesen slock for the sum of $1.70 per share, Mr. Mattliiesen having told me that he would give it to mo at $2.00 a share, but that if I didn’t take it he would sell pay Mr. Weis, I think, about $50 for his proxy to enable Mr. Holm to voto thu stock at the meeting, the stock hooks being dosed at (ho time. x-Q. 820. How many votes were cast., and upon how many shares of stock, for the ticket headed by Mr. llelm, at said election of Trustees? A. 5,200 shares. x-Q. :t27. Can you state whether any consider¬ able part of the said 5, 200 shares, upon which said votes were cast, was transferred shortly prior to the date of the said election. A. My impression is that they transferred all they could’ but I do not know the exact amount. x-Q. 928 Have yon attended the meetings of stockholders from time to time since the organiza¬ tion of complainrnt? A. Right along. x-Q. .121). Do you know whether prior to thu meeting in February, 19011, any contest took place over the election of Trustees of complainant? A. Never to my knowledge. x-Q. .1110. 'i on have looked over the minute book of the company, and do you recollect reading any record of an election of trustees of the company at which two tickets were nominated prior to February, 10011? A. Never; there never was any- thing but a single ticket at any previous election to my knowledge. x-Q. Hill. Have the efforts of McCoy, Evans and Helm, or any one or more of them, to secure stock of complainant, continued since thu said election? A. I hey have. McCoy is unceasing in his efforts to procure stock. X-Q. 11112. Do you know whether after the denial oy the Attorney-General of Carman’s petition Hint application was made by Carman to the Supreme WiJ: 01 Court for leave to bring suit against Now York 271 I honogrnph Company for the same purposes for which ho requested the Attorney-General to bring suit? A. That is my understanding. • x-Q. ,133. It is a fact, is it not, that Carman did obtain such leave ex parte, that is, without notice, and that upon motion subsequently made by New York Phonograph Company, the leave previously granted was by the Justice who had granted it, Mr. Justice Dickey, revoked after full argument upon notice? A. That is true. x-Q. 334. This second application of Carman was made some time about May, 1903, was it not? A. That is my impression. 272 x-Q- 935. The papers upon which Carman re¬ quested leave to bring suit were the same, were they not, as those used on his behalf for the Attorney-General in his application to the At¬ torney-General? A. They were. x-Q. 330. Is it not a fact that from time to timo New York Phonograph Company has issued cir¬ culars to the trade and price lists in the effort to re-establish its business? A. That is a fact. x-Q. 337. Has not New York Phonograph Com¬ pany continuously maintained a principal oillce at 'Parry town, New York? A. Always. x-Q. 338. Has not New York Phonograph Com- 273 pany, from the time of its incorporation, con¬ tinuously maintained one or more business offices in the City and County of New York? A. It has. x-Q. 339. The office of New York Phonograph Company to-day in the City and County of New York is at 140 Nassau Street, is it not? A. It is. x-Q. 340. Has not New York Phonograph Com¬ pany an office for business purposes at 53 East 11th Street? A. It has. | x-Q. 341. Have not the Trustees of New York Phonograph Company laid available for use for WilLiam Fabnost 27<1 the holding of their meetings mi office nt No. 2 Wall Si root.? A. They huvo. x-Q. IMS. Aro there any other points that (incur to you at the present time with reforenco to the election nt Tarry town in February, IOOH? A. I can simply repeat what. I have already said, that the company was represented there by the President, the Secretary and myself, with our attorney; the other side was represented by Mr. Kraus, about live lawyers or clerks, and their object seemed to be to impede in every way the election; it took us two hours to elect a temporary chairman, who was Mr. Daniel F. Lewis; after that we completed the elec- tion of the ticket, which occupied us until (juar- ter past six; there was objection made by the Edison interest to every vote wo cast, and frequent reference was made to honor and fairness in the election, but no mention was made of carrying away the books and keeping them from proper officers, and the whole meeting was just, in my opinion, a demonstration against the company. x-Q. 343. Daniel F. Lewis has long been inter¬ ested in New York Phonograph Company, has he not? A. He has. x-Q, 344. Is ho a large stockholder, and has ho 270 beon? A. Yes. x-Q. 345. Has ho been a director and member of the various committees of complainant in former years? A. lie was. x-Q. 3-10. How did it happen that Evans and McCoy ever became directors of the company? A. My impression is that they had somo position in the late Charles A. Cheovcr’s olllce, and were put in by him. x-Q. 347. Just previous to the time that Evans and McCoy ceased to assist New York Phonograph Company and began to assist in the defense of this suit, and began to aid in attacks upon Now York Phonograph Company, did not the stockholders of , Isew 1 ork Phonograph Company refuse to re-elect 277 then, as trustees? A. They did, and I have often thought that perhaps Evans’ feelings toward the company that timedated from his not being elected. x-Q. 348. Will you now state generally who have been the largo stockholders in New York Phono- graph Company since its organization, and who have beon in control of the affairs and business of the company since its organization? A. Mr. John P. Haines and myself, and, up to the time of his death, Mr. Haines’ brother, Richard Townlev Haines. x-Q. 340. Besides those that you have men¬ tioned, can you name any well-known moil who 278 have been stockholders of complainant or members °f 118 bon'<} of trustees from time to time? A. The Mntlhieseii Estate, James A. Constable, Kessler & Company, Brnyton Ives, Spencer Trask,’ Estate of It. L. Cutting, Blake Brothers, August Belmont, Judge Dillon, Noah Davis, Seward Webb and Frederick Cf. Bourne, and James Slater. Adjourned to Monday, November 1U, 1003, at 11 o’clock. New Yoiik, November 10, 1003. Met pursuant to adjournment at the office of the Examiner, S. M. Hitchcock, No. 15 William Street, New York City. Appearances : Eusiia K. Camp, Esq., for Complainant. Wii.mam Pei.zek, Esq., for Defendant. lie-direct examination of William Fahnestock by Mr. 1‘elzcr : R.-D. Q. 350. Referring to the requirement of the North Americuu Company to give the public WjlLiaui Fa.uidstjuk -b0 the option of leasing or purchasing machines, do you know whether nny of the oilier local com¬ panies opposed l lie sales system? A. No, I do not know. H.-D. Q. an I . Did the New York Company con¬ tinue both the leasing and sale systems after the issuance of circular No. If) by thoNorth American Company? A. I cannot, recollect. H.-l). Q. 352. I understand that subsei|uent. to the issuance of the circular No. -II), tile North American Company issued a second circular, with¬ drawing the requirement to give the public the option of leasing or buying; now, if that is so, will that not serve to refresh your recollection as to whether or not the New York Company carried on both the leasing and sale system, or continued on the leasing system alone? A. 1 am somewhat cloudy about this matter, but it seems to me that the reason why peoplu did not buy machines was that tliu machines that the North American Com¬ pany gave ns were not up to date; in other words, they did not give us their best machines. H.-l). Q. Then do I understand that the Now York Company actually tried the sale sys¬ tem, and that for some reason or other thatsvstem proved a failure? A. That is my recollection. 282 H.-l). Q. Hoi. And did the New York Company still believe that the rental system was preferable, so far its the interests of the Now York Company were concerned? A. My recollection is that the company generally preferred to rent, as by so doing they kept track of the supplies that were necessary for t he machines, the parties coming back K.-D. Q. Her,. What was the rental price of each machine? ^A. I do not remember; I would not K.-D. Q. 350. Have you any idea of the total i..,.., bet of machines which the New York Com¬ pany had out on rental? A. Not the slightest. K-D.Q. 1422 lt.-D. Q. :ir>7. Prior to July 1, 189:), were the 283 officers of the New York Company paid salaries for their services? A. My impression is that Mr. Kiclutrd Townloy Haines had a salary ; l think it was $l,o()0, but I do not remember, and I think no otto else had it salary. H.-H. Q. 358. Do you recollect what the annual rental of the New York Company’s offices at 207 i’iftli Avenue was? A. I do not recollect, except as 1 have already stated. K.-D. Q. 309. Please look at your answer to x-Q. 100 and see if that will serve to refresh your I'ecollection as to the annual rental of Lite offices tit 2(57 Fifth Avenue? A. We paid $2,000 for eleven 284 months. lt.-D. Q. 300. That wus for the period running from June 1, 1802, to May 1, 1893, so that the an¬ nual rental prior to that time must have been more than $2,000, is that your understanding? A. Yes. H.-D. Q. 301. How large an office force did the New York Company have at that place of business? A. I should say from memory under ten persons. H.-D. Q. 302. Have you any idea what the salary list amounted to? A. I have not. K.-D. Q. 303. Have you any idea wlmt ap¬ proximately the annual operating expenses of the company were prior to July 1, 1893? A. No, I do 28(3 not remember. H.-D. Q. 304. Have you any books of the coin- puny with you which would show the operating expenses of the company prior to July 1, 1803? A. I have none with me. K.-D. Q. 305. Does the minute book contain an annual report of the company? A. 1 don’t think it does. Upon examination I find it does not, it simply refers to the treasurer’s report. H.-D. Q. 300. Have you any idea what the linan- cial condition of the New York Company wus ou J uly 1,1803? A. No, I have not. JR' WilLiam Falmgstook R.-D. Q. 307. Hid llii! New Vork Phonograph Company ever declare a dividend? A. Never. H.-i). Q. 1)08. Please look al the Miiiutu book and state the dates of the various annual meetings from the organization of the company, and state whether or not a Hoard of Trustees was elected each year? (Witness refers to Minute book.) A. The first, one was held on the 8th day or Feb- niary, 1881); the first meeting of the Hoard of J rustees was held on the 12th day of Febriinrv, 1880; the second meeting was held February j. 1800; the trustees elected were John P. Haines, -87 John D. Cheever, Richard Townley Haines, Noah Davis, W. Seward Webb, William Fahnestock and John Jj. Martin; the next meeting was held on February 10, 1801, the same ollicers were elected at that meeting, except Martin; at the meeting of February 10, 1801, an Executive Committee was elected consisting of John P. Haines and Richard low i) Joy I la i nos, who were authorized to act for the Hoard of Trustees in accordance with t ho power conferred upon them by the by-laws; the next one was February 2, 1802; the same Board were elected with the addition of Samuel lusull; tllu ,lext meeting was February 7, 18!):t; the same -88 trustees were elected with the exception of J. Herbert Johnston in the place of Mr. lusull; the next meeting was February 0, 180-1, same trustees as the previous year were elected ; the next meet¬ ing was February 5, 1805, in place of Mr. Johnston, Sidney A. Smith was elected; the next meeting was -ebruary -1, 1800, aad in place of Mr. Sidney famuli Mr. Louis Gregory was elected; the next meeting s February 2, 1807, at which John P. Haines, William Fahnestock, Noah Davis, W. faeward Webb, Charles A. Cheever, Louis Gregory llU . Vf "ore the next meeting 011 Marc*1 ly08, at which the same board were rc-dccted ; the next meeting was February 280 7, 1800, at which the following were elected- Charles A. Cheever, William Fahnestock, w! Seward Webb, Victor E. Burke, S. F. Noyes iliomns C. Powell and William Ilolzer; the next meeting was held February 0, 1000. Thereafter a fapecial Meeting of the Board of Trustees of New , , 1 lK)nogr»ph Company was held at the oflice of the company, 253 Broadway, on Friday, Sen- tember 21, 1000, pursuant to notice. Present: fa. 1. Noyus, iliomas C. Powell, majority of Trus¬ tees; the Secretary reported that no annual meet¬ ing had been held since February 7, 1800, he also reported the death of Mr. Charles A. Cheever, -late 200 I resident, and a committee consisting of the vice- president, secretary and treasurer were appointed to prepare suitable resolutions in relation thereto; the resignations of Messrs. William Fahnestock, W. Seward Webb and William Ilolzer were pre¬ sented; and the board proceeded to the election of members to till the vacancies. Oil a ballot being taken, Messrs. Scott Tremain, II. M. Funstoii and L. L. Lvnns were duly elected as trustees; the next meeting was held February 5, 1001, at which wore elected H. M. Fuuston, Scott Tremain, L. E. Evans, J. L. Andem, T. C. Powell, Joseph F. McCoy and William Ilolzer; the next annual meet- 201 mg of the stockholders of the company was held at the oflice of the company at Tarrytown, Febru- ary -I, 1002; the following directors were elected : ’’ • Seward Webb, William Fahnestock, F. G. Bourne, J. Horbert .Johnston, JameB L. Aiulein F. S. Smithurs and H. M. Fuuston; the next meeting was held February 3, 1003, and the names of the trustees elected were Daniel F. Lewis, James Slater, Frederick G. Bourne, John P. Haines William Fahnestock, H. M. Fnnston, James l! Andem. The names of the trustees mentioned in the certificate of incorporation of The New York 202 08 Phonograph Company, who shall manage the con¬ cerns of saitl company for the lirsl year are, .luhn P. Haines, John l>‘. Cheever, Richard Townlev Haines, Noah Davis, William l-'ali nest ock. \V. Seward Webb, John b. Martin. R.-D. Q. 300. Please read the record of the meeting which should have been held on February 0,1000? A. It reads as follows: “The Annual Meeting of The New York Phonograph Company was duly called to be held at Tnrrytown, New York, on Tuesday, February 0, 1000, at 11 o’clock a. m., and the call was published in the Tarry- town Argus on January 29, 1000, and February 8, 1000; no stockholder appearing nt the time and place of meeting, no meeting was held, L. E. Evans, Secretary.” R.-D. Q. :I70. Do you find that the minute book has any reference to the resignation or elec¬ tion of directors between February 7, 1800, and September 21, 1000? A. No, I do not find any. lt.-D. Q. 871. Now, please look at the by-laws of the company, and see if they contain any section in regard to members of t he Hoard of Trustees hold¬ ing over in case no annual meeting is bold? A. Yes, I find Article III, section 2d, reads as follows: “ The term of ollico of such trustees shall be for one year from the annual meeting and until others are chosen and qualify in their stead.” R.-D. Q. 872. So that in accordance with the by-laws, the failure to hold an annual meeting on February 0, 1900, resulted in the board elected February 7, 1899, holding over until a new election was held ; is that right? Mr. Camp .- Objected to ns to calling for a conclusion on the part of the witness. A. T should so understand it. R.-D. Q. 878. So that the Board of Trustees, ns properly constituted, in accordance with the by-laws, on September 21, 1000, consisted of 00 Charles A. Cheever, William Fahnestock, W. 205 Seward Webb, Victor K. Burke, S. I-’. Noves Thomas C. Powell and William Holzor, who were elected at the annual meeting held February 7 1800? * ’ Mr. Camp : Objected to as to form and ns calling for a conclusion on the part of the witness. A. There were no changes in the meantime. R.-D. Q, 87-1. Referring now to the minutes of the Special Meeting of the Board of Trustees, hold at 208 Broadway, on September 21, 1000, please slate whether S. F. Noyes and Thomas C. Powell represented a majority of the Board of Trustees ns 200 constituted on that date? A. The minutes say they did. R.-D. Q. 875. Do the minutes indicate whether any one else besides Mr. Noyes and Mr. Powell wero present at that meeting? A. They make no other mention. R.-D. Q. 37(1. Now please read in full the minu¬ tes of the special meeting hold September 21, 1000? A. In addition to what I have already read, and which appears in answer to R.-D. Q. 308, the fol¬ lowing appears: “On motion the following officers wore duly olected : S. F. Noyes, President, H. M. Funston, Vice-President, Scott Tremain, Secretary 207 and Treasurer. On motion Messrs. Noyes, Evans and Tremain woro duly chosen as an Executive Committee.” R.-D. Q. 377. Now, please examine the minute book and state whether or not any meetings wero held, either by the Board of Trustees, or by the stockholders, between February 0, 1000, and Sep¬ tember 21, 1000? A. No, I don’t find any. R.-D. Q. 378. Why did you resign as a member of the Board of Trustees in the year 1900? Mr. Camp: Objected to as immaterial and irrelevant. i I Liam Fa'.mestoob •Li-D.Q. ' 1426 100 101 2A8 A. Mr. llaines resigned, and my old associates resigned, and I decided to resign also. n.-n. Q. 37!). Do you know why your assoc i- ates had retired from the Hoard? Mr. Camp: Stunt! objection. A. I do not. H.-I). Q. 380. I’lease refer again to the minute kook and state when the next meeting was held after September 111, 1000, and what took place at that meeting? A. A special meeting was held on October -12, 1000, which read as follows: Present, S. F. Noyes, II. M. Kunston, L. U. Evans, Scott Tremain. Thu minutes of the last meeting were 200 read and approved. The resignation of Mr. S. F. Noyes, as President, was presented and duly ac¬ cepted with regret. Mr. H. M. Kunston was 'duly elected as President ami h. B. Evans as Vice- President. A contract relating to prosimution of suits was submitted by Mr. Tremain, wherein Mr. .1. U. Aiidem, of Cincinnati, Ohio, agrees to prose* cute without cost to the company. On motion it was resolved that the ollicers of this company nro hereby authorized and empowered to execute and deliver to Mr. .lames Jj. Andum, of Cincinnati, Ohio, the contract now submitted, bearing date October 22, 1900, whereby he is empowered 300 to commence and prosecute suits on behalf of this company against any and all parties infringing on tile territory of this company. On motion resolved, that the ollicers of this company are hereby authorized and empowered to execute a contract, or contracts with such party or parties as may be decided upon by the Executive Committee of tli is company, regarding the disposition of certain rights conveyed or deeded by one G. Bottini, with to this company, on date of February 19, 1892, for such sum or siimsof money as in their opinion is a full or fair value for the rights so dis- posed of by them on behalf of the compauy ; and they are furthermore instructed and empowered to 301 bring such suit or suits as in their opinion may lie necessary to enforce the claim of this company against said Bottini for royalties due to this com¬ pany ns embodied under same contract of February 19, 1892. The disposition of rights as contained therein notconllicling in any way with the accrued royalties due to this company, or tile collection thereof. On motion, resolved, that the copy of resolutions adopted at Cincinnati, Ohio, Septem¬ ber 20, 1900, by the Fifth Annual Convention of tho National Phonograph Association be spread upon the minutes by pasting on tho minute book a printed copy of same as handed to us by the 302 Secretary of the National Phonograph Association. Kesolutions adopted Cincinnati, Ohio, September 2!>, 1900, by the Fifth Annual Convention of tho National Phonograph Association. To tho National Phonograph Association: The Special Committee appointed to consider the best plan of action to bo adopted by the several local phonograph companies to maintain and enforce their contract rights with the North American Phonograph Company and its successors, respectfully report the following, to wit: That tho sale of phonographs and supplies in various parts of the United State? by Thomas A. Edison, through the National Phonograph Coin- 303 pany, is in llagrant violation of the rights of the various local companies having exclu¬ sive franchises covering the territory where such sales are conducted. Your committee therefore recommend that immediate concerted action bo taken by said local companies to enforce their rights by injunction and to recover the profits and damages resulting from such unlawful sales. Your commilteu further recommend that to give effect to the foregoing resolution a special committee of live be appointed, of whom the president of this asso¬ ciation, Mr. J. W. Claucoy, shall be chairman, tho 103 Haiti spi'cial committee to In; invested with tile full power of lliis association, to determine a basis of concerted action to secure the co-operation of all the companies therein, to employ counsel to begin and prosecute actions sit law or ill equity for the benefit of the allied interests and to determine an equitable plan for distribution of the costs and benefits of such action among the companies who ratify the plan of procedure and participate thuruiii. Kcspcct fully submitted, E. I). Easton, Chairman; ,1. L. Andeiii, K. C. Kinkead. A resolution to accept the report of the commit¬ tee and to approve and adopt the recommendation contained therein, was curried by vote of the Con¬ vention, September a.ri, 1000. Attest, .1. L. Amleiii, Secretary. Special Committee appointed by tile National Phonograph Association to carry out instructions contained in tlm foregoing resolutions: A. W. Clancey, Chairman, Chicago, III.; J. L. Andetn, Cincinnati, Ohio; Kdwtird I). Easton, Washington, I). C. ; Hobert C. Kinkead, Louisville, Ky. : Lemuel U. Evans, New York City. The meeting adjourned. Scott Trctmiin, Score- 11-- 0. Q. 38.1. Please refer again to the minute book and state when the next meeting was held, and what look place at Unit meeting? A. The next meeting was held on November 1 1, 1000. Tho minutes of the previous meeting were read and approved. The call for meeting was also read. The various reports of the Executive Committee to date were read and approved; it was on motion resolved that the contract or agreement ns mado with .lames L. Andem, of Cincinnati, Ohio, and bearing the dale of October 22, 1000, and relating to the prosecution of suits, and which was ap¬ proved at tlie special meeting of the Board of 307 Trustees held at this office October 22, 11)00, bo now cancelled and destroyed, by reason of there being an omission therein, and that tho now con¬ tract in lieu thereof, together witli a collateral agreement, as made with said Mr. James L. Andem, of Cincinnati, Oltio, and hearing dates respectively of November I), 1000, and duly approved by the Executive Committee and executed by the ollicors of tlie company, bo now approved and each agree¬ ment placed on lilo. On motion the meeting ad¬ journed. Scott Trcmai n, Secretary.” K.-D. Q. 382. You have omitted to state who were present at this meeting of November 11, 308 1000? A. Present, If. M. Fuuston, L. E. Evans, Scott Trcmnin, S. F. Noyes. lt.-D. Q. 383. When was the next, meeting held? A. Tlie next meeting was the annual meeting held at Tarry town, February G, 1001. K.-D. Q. 384. Does anything appear on tlie minute book between tlie record of tho meeting held November 11, 1000, and the annual meeting held February G, 1001 ? A. I don’t see any. K.-D. Q. 380. Now, please look at tlie stock register and state how many shares of stoclc stood in tlie name of Victor E. Burke on February 7, 1800, and whether or not he is still a stockholder? 300 A. I am not suiliciently acquainted with the facts. Adjourned to Friday, November 20, 1003, at 11 o’cioek A..M., same place. 310 104 New Yoke, February 11), 1004. Fi-edanck C. RancaLl “'^1432 Met. pit r.simnt to not in- at the office of Samuel M. Hitchcock, Ksq., Standing Examiner, No. 10 William Street, New York City, at 11 o’clock. Appearances : Lotus Hicks, Ksq., for the Complainant. Ciiaiii.es M. Huron, Ksq., fertile Respondent. Direct examination of FREDERICK C. RAN¬ DALL, a witness for the respondent: 3] j By Mr. Jfotiyh : Q. 1. What is your position? A. I uni Trust Ollicer of the Central Trust Company of New York. Q. 2. Have yon produced at this hearing an agreement dated .lime 13, 1880, between tlio North American Phonograph Company and the Now York Phonograph Company? A. 1 produce it. now (witness produces paper). Q- U- Can you state how long the instrument you produced has been in the possession of the Central Trust Company? A. Not exactly — not the exact date. 812 Q- 4. Can you state the date approximately ? A. Yes, sir, about June 25, 1880. Q. “• Das this agreement been continuously in the possession of the Trust Company since the date you mention? A. To the best of my knowledge and belief, yes. Q. 0. Have you produced the instrument to-day from the files of the Trust Company? A. Yes, sir. Tlio respondent offers the instrument pro¬ duced by the witness in evidence as “Re- pendent's Exhibit No. 2.’’ Mr . J/ouyh : Tlie exhibit is an agreement made 13th of June, 1880, between Thu North American Phonograph Company and The Now parties; signed also by Jesse If. Lippincott, 1 rustce, and by “ Central Trust Company of JNew York, by E. F. Hyde, Second Viee-Presi- dent.” ft is agreed botween counsel that Re¬ spondent’s Exhibit No. 2 is identical with and a duplicate of Complainant’s Exhibit 47, sub¬ ject to correction if any error should appear by comparison, and that Respondent’s Exhibit 2 need not be printed. Q. 7. Was this agreement, which you have pro- tliiced, originally deposited with your company in duplicate? A. It was. * Q. 8. Has your company now the duplicate original of this agreement? A. No, sir. Q- Q» what date did von part win, op ^ ■Time 21, 1002." ~ Q. 10. And to whom did you hand it? A. To Mr. James L. Aiidum, Secretary of The New York Phoiiograiih Company." . Q 11. was there deposited with this agroenient in duplicate any certificate or certificates of stock? A. Yes, sir. Q. 12. What stock was deposited ? A. 2,500 shares of The New York Phonograph Company capital stock. y ^'° w*,om was Dio certificates mado out? A. To Central Trust Company of New York, Trus¬ tee. Q. 14. Has your company still possession of that stock and the certificates therefor? A. Yes, Q. 10. Have you produced another agreement, bearing dato Juno 23, 1800, between the North American Phonograph Company and the Metro¬ politan Phonograph Company? A. I produce it now. Q. 10. How long has this instrument, now pro- 107 Frederick cliict;d, been in possession of the Central Trust Company? A. Sineo the 18th of July, 1800. Q. 17. lias it. Iteon continuously in thu posses¬ sion of the Trust Company since that time? A. To the best of my knowledge ami belief; yes. Q. 18. Have you produced it to-day from the files of the Trust Company? A. Yes. Respondent offers instrument produced by the witness in evidence as “ Respondent's Ex¬ hibit No. :t.” .Ur. Iltnujh : This exhibit is nil agreement made the Slid of Julie, 18110, hetwoun the North American I’honogrnph Company and the Met¬ ropolitan Phonograph Company, executed by both parties, signed also by Jesse 11. Dippin- cott, Trustee, and by “ Central Trust Company of New York, by G. Sherman, V. President.” It is agreed between counsel that Respond¬ ent's Exhibit 3 is identical with and a dupli¬ cate of Complainant's Exhibit No. Til, sub¬ ject to correction if any error should appear bv comparison, and that Respondent's Ex¬ hibit No. ft need not be printed. Q. It). Was this agreement of June 23, 1800, originally deposited with your company in dupli- Q. SO. Is your company now in possession of the duplicate original ? A. No. Q. 21. On what date did you part with it? A. Oil the SI st of June, 1003. Q. 22. To whom did you hand it? A. To James •Jj. Andeni, the Secretary of the New York Phono¬ graph Company. Q. 2d. Was there deposited with this agreement in duplicate any shares of stock or the certificate therefor? A. S'es, sir. Q. 24. How much stock was deposited and in what company? A. 2,000 shares of the capital stock of the Metropolitan Phonograph Company. Q. 20. To whom was the certificate for that stock 810 made out? A. To the Central Trust Company of New York. Q. 20. Was not the stock certificate made out to your company as trustee? A. No, sir. Q. 27. Is that stock and certificate therefor still in the possession of your company? A. It is. Q. 28. Have you produced any letters or iioticoiTN f received hy your company refurring to the' stock ns to which you have testified from oitlier the Metropolitan Phonograph Company, The New York Phonograph Company, or Now York Phono¬ graph Company, or purporting to come from either of thu said companies? A. I am prepared to pro- 320 dace a letter received from the New York Phono¬ graph Company. Q. 211. Under what date? A. October a, i sn'x. _ Q. 30. Will you produce that letter? Witness produces letter. Q. 31. When was the letter you produce received by your company? A. I am unable to state from the record I have here. Q. 32. Was it received by you? A. No, sir. Q. 33. How long has the letter been in your cus¬ tody and possession? A. About five years. Q. 34. And when it caine in your custody and possession where was the letter? A. It was in the 321 records in the escrow book containing this particu- _ lar escrow account. * - Q. 35. Do you mean that it is now about five years that that book and papers accompanying it containing this letter came under your immediate control? A. Yes; I mean to convey that idea. Q. 30. You found this letter with the other papers relating to these trusts as to which you have testified. A. Yes. Q. 37. And you have produced this letter from the files and records of the Central Trust Company? A. 1 have. ' 100 Q. 08. Are vmi familiar with thn signature of Richard Towaloy Haines? A. No, sir. Hi/ Mr. Ilouijh : Mr. Ilinks, do you admit that this signature at the foot of the letter produced is the signature of Richard Towuley Haines? Mr. Hicks: In reply complainant’s counsel states that he has never before seen the letter in question; has no knowledge or information concerning the letter, and is not prepared at this session lomnkeany admission in regard to the letter nr in regard to the signature thereto. Respondent's counsel asks to have the letter marked “ Respondent’s Exhibit No. •! for identification.” Q. 111). Is the communication you have produced, Exhibit -1 for identification, the only letter you have received from eitherof the corporations I have named? A. Central Trust Company received a letter from New York Phonograph Company dated June 4, 1002. Q. 10. Have you brought that letter with you? A. I have. (Witness produces letter.) Q. II. Has your company received any further communications on the subject? A. Yes. The Central Trust Company received a letter from Now York Phonograph Company dated June 1>0, 11)02. Q. 12. Can you produce that letter? A. Yes. (Witness produces letter.) Q. •III. Have you received any further communi¬ cations from New York Phonograph Company? Q. 44. Will you kindly produce that letter? A. 1 produce a letter received from New York Phono¬ graph Company dated June 18, 1003. Q. 46. Was this letter delivered to you in course of your business? A. Yes. A Yes^11* ltaniV° by "mil to i'0111" destination? Q. 47. Since the receipt of this letter of June 826' 18th, 1003, has the same remained in your pos¬ session? A. Yes, sir. Q. 48. Have you now produced all the corre¬ spondence in your possession or under your control relating to this matter since the date of the original communication of October 3, 1804? A. Yes. Q. 40. You have made such search in pursuance of the subpenna duces tecum served upon you? A. Yes. sir. Respondent offers in evidence the letter produced by the witness dated June 4, 1002, marked “Respondent’s Exliibit'No. 5.” . Mr. Ifouyh: It is stipulated and agreed 320 Respondent's Exhibit No. 0, being the letter of June 4, 1002, is identical (subject to com¬ parison) with the same letter ns copied in the minuted of New York Phonograph Company and inserted in the minutes of this case in the testimony of John P. Unities at x-Q. 348. Respondent offers in evidence letter of John P. Haines, President, produced by the wit¬ ness, under dale of June 20, 1002, which is marked “ Respondent’s Exhibit No. fi$,” of which the following is a copy: “ New Youk Piionoouaph Company, No. 140 Nassau Street, New Yoke, June 20, 1002. Central Trust Company ok New York, 04 Wall Street, . Nr. w— Yot k,"J line 20yi0fl 2: Gentlemen : In compliance with your request of to-day, on behalf of Now York Phonograph Company, wo state that New York Phonograph Co. is the legal successor of The New York Phono¬ graph Co. and Metropolitan Phonograph Co., the two companies named in our letter to you no dated .lime 1002, mid we also Mate tlmt in milking upon you the demand of said letter of dune -1, 1002. for the extended licenses therein mentioned New York Phonograph Co. relin¬ quishes all claim upon your company for the stock deposited with said extended licenses with you as trustee. Yours truly, John P. IIainks, , , PresL Jam ns L. Anuk.m, Secy. deceived the above txvo extended licenses. Jamks l. Ami km, Secy. N. Y. Phono. Co." Juno 21, 1002. „.M1”,,0n,,ent oflr,!rs ev*J,!,|ee the letter of " 11,111111 Fahnestock as Treasurer, dated June is, ioo:i. Complainant’s connsel objects. to the intro¬ duction in evidence of the letter of June 18, lOOII, upon the ground that it does not appear that William Fahnestock, Treasurer, was au¬ thorized to write or deliver the letter to the Central Trust Company, or to take any action in regard to the subject matter of the letter. better is marked “ Respondent's Exhibit A o. 0, and a copy of it is as follows : “ Kl;"' Yokk Pi ioxoo it a fit Comcaxv, No. MO Nassau Street, New Youk Juno 18, 1002. Ckntkai. Trust Company op Ni:w Youk, f>-l Wall Stroot, Gfntifm .• New York. I am instructed by the Executive Conimittoe to call your attention to the letter sent you Fredsrick C. Randall D. Q. Ill , 14 by this company, dated Octobor 3, 180-1, a 331 copy of which I enclose, and to inform you that the conditions spoken of in that letter still continue. They therefore desire that tlio prohibition imposed upon you regarding the delivery of 2,000 shares of stock of The New York Phonograph Company, and the 2,000 shares or stock of the Metropolitan Phono¬ graph Company therein referred to, shall re¬ main in force until you arc notified by this company tlmt its claims agniust this stock have been settled. William Fahnkstook, Treasurer.” **32 Q. 00. Mr. Randall, have you over received any communications regarding the subject-matter of these trusts from the North American Phonograph Company, or any one purporting to represent that company? A. No, sir. Q. 01. If any communications or paper writings on this subject Imd been received by the Central Trust Company from the North American Phono¬ graph Company, would such writing have passed into your control and been kept with the other papers relating to the matter? A. Yes, sir. Q. 02. Is it true that in obedionco to the sub 333 paum served upon you, you have examined the papers relating to this matter and found no com¬ munications from the North American Phonograph Company? A. Yes, sir. Q. 03. Mr. Handall, have you made similar search for communications from Mr. Lippincott re¬ lating to this matter? A. In my search among the papers relating to this matter 1 found no commu¬ nication from Mr. Lippincott. Q. 0-1. In the course ol the business of yourcotn- pany would not all communications relating to the subject-matter of these trusts from whomsoever re- Frederick C. Randall [On left margin]: Capital stock $1,000,000. Increased June 25/00 to $1,250,000.00. Registered this dan. 27, 1801, Centra i. Trust Company of New York, Registrar of Transfers. Uy 13. G. Mitch km,, Secy. Vice President.” [Across face of certificate “Slinres$100, each.”] Metropolitan Phonograph Certificate in¬ dorsed on back in blank as follows : *• For value received i have bargained, sold, assigned and tranferred, and by these presents do bargain, sell, nssiga and transfer unto the capital stock named in the within certilicatu, and do hereby constitute and appoint true and lawful attorney, irrevocable, for and in name and stead, but to . use to sell, assign, transfer and set over, all or any part of the said stock, and for that purpose to make and execute all necessary acts of assign¬ ment and transfer, and one or more persons to substitute witli like full power. , Dated 18 . Signed and acknowledged in presence of "Capital $1,250,000. Incorporated under the Laws of tlm State of The New York Phonograph Company. This certilies that Central Trust Company of Frederick C. Fandall IM 3-10 Ninv York, Trustee, is the owner of Twenty- five Hundred Shares of llie Cnpit.nl Stock of Tlic Now York Phonograph Company, trans¬ ferable only on tlic books of the Company in person or by attorney, oil surrender of this cer¬ tificate. This certificate is not valid without the sig¬ natures of the Registrar and transfer agent. In testimony whuruof the said Company lias caused its corporate seal to he [ska i.. J hereunto aliixed and lids certificate to be signed by its President and Secre¬ tary, at the City of Poughkeepsie, Dutchess County, New York. May 10th, 1881). .Ions P. Hai.vkh, Hiciiaui) Tow.ni.ev 1 1. vises, President. Secretary. [Deft hand marginj : Registered this 10th day of May, 1 Ck.nticai. TltUST COMPANY OK N Kt Registrar. Secretary.” 31 a [Across face of certilicate "Shares §100. each."] (Certifier Company, lows:) ate of Tlie New York Phonograph indorsed in blank on back as fol- l’.01' valHU received, have bargained, sold, assigned and transferred, and bv these presents do bargain, sell, assign and transfer onto ll... capital stock named in the within certili- 1 rue and hr and in do hereby constitute and appoint vful attorney, irrevocable, for name and stead, but to use to sell, assign, transfer 343 and set over all or any part of the said stock, and for that purpose to take and execute all acts of assignment and transfer and one or more persons tosubstitute with like fall power. Dated Signed and acknowledged in the presence of .” Cross-examination of Mr. Jiandall by Mr. Hicks: x-Q. fit). ]Jo you know of any demand made upon the Central Trust Company by the North American Phonograph Company or by Jesse II. 344 bippincult, individually or as Trustee, or by any person or persons claiming under tlium or any one or more of them, for the 2,fi00 shares of stock in The New York Phonograph Company, or for the 2,500 shares of slock in the Metropolitan Phono¬ graph Company, or for the certificates therefor, which you say wore deposited with the agreements dated 'respectively June 13, 1880, and Juno 23, 1800? A. To the best of my recollection no de¬ mand was ever made upon the Central Trust Com¬ pany by the parties named for the certificates and stock in question. x-Q. 57. Do you know of any demand made upon .445 tltn Central Trust Company by any of the parties mimed with reference to the trust? A. No, sir. x-Q. 58. lias the Central Trust Company ever re¬ fused to deliver the said stock or tlic said certifi¬ cates to the North American Phonograph Com¬ pany or to Lippincott individually or as trustee? A. 1 don’t know. x-Q. 50. As Trust Oliicer of the Central Trust Company, no knowledge of any such refusal lias been obtained by you ; that is correct, is it not? A. It is correct. Adjourned subject to notice. X-Q. 1442 Richard Xi:w Viiiik, March I, 1 00-1 . Met _ pars, .am to notice at the offle« of Samuel ? ,I,,|lC00k- Standing Examiner, No. 15 " •Slr,,,,l. New York City, nt 1 1 o’clock a Appearances : kotns Hicks, Ksq., Counsel for Complainant CitAiti.Ks M. Ilotioir, Ksq . . Ciiaiii.ks L. Hiickinoiiam, Ksq.. Attorneys for lteI spondunt. 1HCHAKI) N. DYBK, being first ,l„|v 8Wor„ Company, lined examination by Mr. liuckinyham : Q. 1. Please slate your name, age, residence and aepa ion/ A. Hmhard N. Hyer, fortvlivo, Ust Orange, N. lawyer, with offices at 81 Xassan Street. New York. wiS; M ''t.'11 i,r° ,mvB l,eu" yow relations M., lho"",s A. Edison and National Phono- , ! i '"'P""1!'1’!' National Phonograph Coin- I 1 ,mi!‘" Illu defendant herein? A. I have •m "r 1 ^lL‘Ht,,li,ny years as connsel in patent rr“r, if"’ n,,d in *•*« twine capacity inLfion.0" ,"(,gral,h Co,"l>«ny since its Ka^hnestock"' li0’'", V‘ “ml Mr- William of e Ne«- V T'm "l "ml 1 reasnrer, respectively, ant her i. ^ ork 1 ,,0,,,>Br«ph Company, complain- ta , n " ‘/‘r “JSti,ied in thi* case concerning of the Z vT conducted by them on behalf Mr Thomas \ rr ,l.ollof>niPh Conqiany with v n 1 , t ; U! 1890 '«»«- in which Mr. Si Z* Mr ZHTroT ..rr' '“I . * »' l«WJ A. abSSljSwita m assets nt the North American Phonograph Com- 340 pany were sold to the National Phonograph Com- I’any, in February, 180(1, 1 was called upon by Mr. Adolph L. PiucofTs, a lawyer with whom I was ac¬ quainted, and who said that he represented tho New York Phonograph Company. He wanted to know wlmt Mr. Edison proposed to do for that com¬ pany. I told him that T would not undertake to bind Mr. Edison without authorization from him to do so, but that my personal viewwas. that, tlm only w,iy (or .the No\\rYork__l?honograph_ Company to benefit by tho situation was f or_ that .coin pen y to 8° phonograph business. This suggestion did not seem to meet Mr. PincoHs’ views; his 850 position was that, so far as he know, tho New York Phonograph Company did not want to go into the business of handling phonographs, but wished to reimburse its stockholders so far as pos-' sible for tho losses which they had suffered, by an outright sale of such rights, if any, as the New York Phonograph Company had. Mr. Pincoffs called upon mo several times, and nt one of these interviews, probably tho first — I undertook to see Mr. Edison and get his viows. This 1 did. Mr. Edison .approved of the statement Iliad made to Mr. Pincoffs, and asserted that lie would be glad to have tile New York Phonograph Company go 351 into the business, but, that he was not prepared to pay that company anything for. its alleged rights, or to pay it anything to stay out of the business. Mr. Hicks : Complainant objects to any conversations had between the witness and Mr. Edison, as incompetent. (Witness continues.) At my next interview with Mr. Pincoffs l reported the result of my talk with Mr. Edison. Mr. Pincoffs, however, not wishing to terminate the negotiation nt this point, asked me to meet a committee of the Now York Phono¬ graph Company and discuss tho matter directly Bicbard N. Dyer iomy l liiTfn f i New i ork Phonograph Company— while, on the oilier 1'ii'xi, I asserted that Mr. Edison had definitely deluded not to do this, and I urged upon them the desirability of putting the New York Phonograph Company in position to handle the phonograph business. I think I had only one interview with Hus committee j„ ISIMI. although there might, have iceti more than one, but the negotiation tor- niiimi.il with the matter left in the situation I have just .staled— that is to say, the refusal of the . , ‘T ' ork Phonograph Company to go into the business of handling phonographs, and the refusal o Jlr. Kdison to pay that company anything for Us alleged rights. b Q- 4- At these interviews with Mr. IMncolTs, and the committee of the New York Phonograph Com- pnny, was there any disposition shown on the part or the representatives of the New York Phono- graph Company to have that company exercise its alleged rights under the contract? Mr. //Ms: Question is objected to as in- definite and leading, it not appearing what is disposition,” and the 'question tiling to the witness the answer desired. A. I hole was not the slightest disposition to do 1,1 "•••'« n -liract refusal on the part M the officers of the New York Phonograph Com- i 3 1,0 ■s,,\or lo “crionsly entertain my propo- ’ . ‘ 1 T1.1' co,,,l"*»y should go into the bust- iv Mi. v° *.a v"K i "I* 0f tl"’ phonograph business ) e i. eu i ork Phonograph Company would 110 necessitate, as I understood the gentlemen of the 355 committee, the raising of more capital and the perfecting of an organization, two things which they did not contemplate doing. Mr. /licks : Complainant's counsel moves to strike out what the witness understood and what the gentlemen of the committee contem¬ plated, the only evidence being what they said. Q. 5. In answer to Q. !l, you have stated your recollection of the negotiations of 1800, ill which you are said to have acted as counsel for Mr. Kdi¬ son. Will you now please state your recollection of the negotiations of 1808, conducted by Messrs. 350 Haines and Fahnestock on behalf of the New York Phonograph Company with Mr. Edison? A. Before answering the question directly, I would liku to state that the business situation in 1808 in the phonograph business was quite differ¬ ent from what it was in 1800. In the Spring of 1800, tho business was in a condition of complete demoralization, and there was a very considerable uncertainty as to whether it could bo made a com¬ mercial success. The officers of the National Phono¬ graph Company wero then attempting to organize tho business on some operative schema. Just wluit would prove a successful plan of operation was not 857 known. If tho local phonograph companies had ( shown any disposition to take up the business at ) that time, their co-operation would have been V gladly accepted, and tho business would have been j organized on a plan recognizing their status. But [ the local phonograph companies- did not take tip the business, and it became necessary for the olli- cors of the National Phonograph Company to inter¬ est dealers in musical instruments and the liku, to add tho sale of phonographs and phonograph sup¬ plies lo their business as an adjunct. The progress in this direction was at first slow, but by the Spring r ii lulK-r from Mr H. W. Jessup. a member of the , lnwy«*. that _ Mr. J/icks : What tho letter slates is 0|(. t0’, ,.1'0 Iet,w i,su,f boro, should »>u olfuiud in evidence if anything is to bo said X'ST . . . 1 "in re!,a ,h« i*»if. .. ‘‘ March IB, 1808. Mr. Kiciiaici) N. Dykii, :tI Ntwsnu Strout, Dear Mn. JlYKtt: ^ York. Mr. Thomas A. Kdison requested, at sonio mmll" "hlUh hu ,m<1 yestordny with sou, and lie stated that ho would advise you by one r;';; tlle la,ttur l»rt of this Wook-not niirMt.n -cr early next week, when vou could “ x • « "r ,bu,:.‘ . . . *icXZ? tct, « ho are Mr. John P. Haines, Mr. William 1 ahnestock, and Mr. JJaninl R Lewis, „„d Yours very truly, llxMtr Wr. Jkssui*.” „ r*"1 b>- «» •"»"«» -in* who ‘ , ll“- S»l.llon»0 mice .Iwi 1 “s euttferenee, the confer- early in Vpril*1 ISOS "IT f°' 'l ?0U,>,° ot "'uult8t hut asked f„r t , i • i ’ ‘he meeting which Mr. Jessup kW‘ f°' hw lu“- ot March loth took place nt 121 my ofllce. The gentlomen of tho committee stated 301 to me frankly that now that the National Phono¬ graph Company had made a success of the phono¬ graph business, they thought that Mr. Edison should reconsider his refusal to purchase the rights of (ho New York Phonograph Company. Between the date of Mr. Jessup’s letter and the time of the meeting with the committee, 1 had seen Mr. Edison and ascertained his views, so as to be ablo to repre¬ sent those views fairly and accurately at the meet¬ ing. I told the gentlemen of tho committee that Mr. ICdisou’s views regarding the purchase of the alleged rightsof the Now York Phonograph Company which I gave them in 1800 had not changed, and that he 302 did not care to make tho purchase. I had, as I recol¬ lect it, more than one interview with this committee, which took place within a short interval of time in the Siiring of 1808, and I think all in the month of April. Another feature of tho situation arose during these 1808 negotiations. The competition between the National Phonograph Company selling tho phonograph, and the American Graphophone Company and the Columbia Phonograph Com¬ pany, making and selling the graphophones, had become quite keen. The graphophone interest was actively prosecuting the graphophone business in Now York. I believed that if the New York 303 Phonograph Company had any rights, - Mr. Hicks: What tho witness believed is objected to as irrelevant. (Witness continues) which I regarded as exceed¬ ingly doubtful; those rights wore just as effective against the American Graphophone Company and the Columbia Phonograph Company as they were against tho National Phonograph Company. Con¬ sequently, if tho New York Phonograph Company had enough confidence in the strength of its posi¬ tion to curry on the litigation for the establishment of its alleged rights, aud should succeed in that 123 !iX"i ' !‘,:rrul hr * *•., sit'inti in i!i «'«'"Pany. ami with tin, the \„w V "i1" in ll) ll,‘* «om III i ttc*u of • I , V Phonograph company tIlat „„ ,,,..,.,1. I aii.\ . iiil tlm New \ork j.|lon s; £ “ v rv.,,wi •nv"v v-k >»hono. ••stalilish it, rights 'i "n,l”r,nke !l Hiigniion to I! 1 ' ' 1 k 11 " >«r rlm.sVi'lonuioa!’ a[ t0K.it I Mr I | nl endeavor purchase ,1.1:1. ^ ^'onaimition not to ncenti-.ti,,,, , r s th, -v hail. To I, ring the sH foi ii ‘‘ 1 wn»«»Mr.J«M„p,aacoun- Hk.skv W . . •* April 81. 1808. M • «' Khh|J|»t Ksn street, City. «-ar Sm „ if U «t all till, torritorv* S.".,’<;,'ior riSl'»s in to .nakUanan,nm!'r,n •^,l wo,!I‘1 upon the . . h t .with your client baaed client’, claim" of if your Hie, , z*'1 ‘" go at tho present time. myself could foruiulatn the terms of nil arrange- 307 nient with thu National Phonograph Company. Yours very truly, Kiciiaiii) N. Dykb." On the next day Mr. Jessup informed me that lie had received my letter and had sent a copy of it to each member of the committeu. On April 23, 1H08, I wrote Mr. Jessup a letter which reads as follows: “April 23, 1800. IIknky \V. Jkshui>, Esq., 30 liroad Street, City. Dkak Mu. Jhs-sui* : 308 I have your favor of the 22.1 inst. Should your client seriously contemplate bringing suit against the graphophone interest, I think I can make some valuable suggestions in that con¬ nection. Yours very truly, Hiciiaiii) N. Dybk.” In looking at tho deposition of Mr. Fahnestock given in this case, I notice that in the minutes of tho meeting of the Hoard of Trustees of tho New York Phonograph Company, held June 3, 1S98, there is embodied a report from the committee which waited' upon me, in which report my letter to Mr. Jessup ' of April 23, 1898, iscopied, while my letterof April 21, 1898, giving a definite statement of my attitude is not referred to. On the contrary, this report states “ that no satisfactory statement in regard to Mr. Edison's future conduct was made _by Mr. Dyer, except that Mr. Edison would lie glad to deal with tho New York Phonograph Company .on. the. same basis as with any other. JocaLliigeilf Si_ and that any agreement I with Mr. Edison must be preceded by the establish¬ ment of its rights by the New York Phonograph Company.” The negotiation of 1898 had little or 124 'i,n nothing to do with tho question of the New York Phonograph Company going into tho business. Hint negotiation consisted, on the one hand, of a proposition by the Now York Phonograph Coin- pany for the sale of its alleged rights, which prop, osition was met with a refusal and, on the other hand, by a proposition on tho part of the National 1 honograph Company to make an arrangement for the purchase of those rights, if and when those rights should be maintained by a suit against the Gmphophone interest. This latter proposition was not accepted. There was, in the discussion with the committee, an incidental reference made to what would be the attitude of the National Phono- 8™ pi* Company and Mr. Edison, if the New York Phonograph Company should want to go into tho business. 1 told thu gentlemen of the committee that the business situation had changed materially since 1800 and that Mr. Edison had interested a huge number of dealers throughout the State of New \ ork in selling tho Phonograph which he would not throw over, and that the New York Phono¬ graph Company if it then went into the business, would be treated like any other dealer. This dis¬ cussion, however, 1 regarded as wholly academic, <179 , , , l lro- , Q. 0. Mr. Fahnestock, in answer to Q. .pj s.,j,| . Mr. Dyer, t|10 counsed for Mr. Edison, told me that m is opinion we had a very good case We had heen buncoed out of out lights. Did you make this statement? A. I have no recollection of making any such 378 statement, and siaco in these negotiations of 1808, to which, I understand, Mr. Fahnestock refers, I represented Mr. Edison, and siaco I never held tho view which Air. Fahnestock’s statement conveys, I do not see how it is possible that I could have made such statein . . So far from holding tho views which the statement imputes, the fact is that 1 regarded the rights of the New York Phono- graph Company as having so little strength that I declined to advise Mr. Edison to pay the expense of a litigation intended to maintain those rights, f cannot recollect any foundation for Mr. Fahne¬ stock’s statement. However, the negotiations he- 374 tween myself and thu committee were conducted in an entirely good-natured and friendly wny, and r, assume that Mr. Fahnestock’s impression is de- - rived from a misinterpretation of some jocular re¬ mark made during the long and, at times, irrele¬ vant talk of which the interviews consisted. Direct examination closed. Cross-examination by Mr. Hicks : x-Q. 7. lu your testimony you have sot forth a letter written by you to Henry W. Jessup, Esq., dated April 21, 1808, in which letter you say: “Yours of 10th inst. received." Have you present 375 Mr. Jessup’s letter so referred to? A. I have and here produce it. (Witness produces letter). The letter raids as follows: “ April 10, 1808. Richard N. Dykr, 81 Nassau Street, New York City. Mr Dear Mr. Dyer : I trust that at your convenience you will communicate to us tho final determination to which you eamo after a further conference you said you would have with Mr. Edison. Very truly yours, Henry W. Jessup.” 127 m mo conlerence committee on liolmlf of Nov York Phonograph Company ? A. Thu correspond unco ivns conducted entirely between Mr. Joshii| •ml myself. 1 have the entire correspondence here, consisting of a dozen or more letters, nml ivonhl he glad to produce nil or any part of it, [Witness produces the correspondence.) x-l). 0. You have prod . si a letter dated April 5, 1808, from Mr. Jessup to you. Will you kindly •end that letter to the Examiner ? A. I do so; it s as follows : " April 5th, 1808. Mu. UioiiAitn N. Dvkk, HI Nassau Street, New York Citv. Mv Dkak Mu. Dvkk: I enclose the following copies of agreement, which are all I have: 1. Agreement dated June 3.1nl, 1800, be¬ tween The North American Phonograph Com¬ pany and The Metropolitan Phonograph Com¬ pany. 2. Agreement dated October 12th, 1888, be¬ tween Thomas A. Edison, The Edison Phono¬ graph Co. and the Edison Phonograph Works and rhe North American Phonograph Coin- Agrouinent dated July 1st, 1808, between I ho North American Phonograph Company and the New York Phonograph Company. •I. Agreement dated June 13th, 1880, be¬ tween Ihe North American Phonograph Com¬ pany ml tl e ^ " YO'k FllonHfcrnil)l1 Coin- 5. Agreement dated October 12th, 1888 be¬ tween The North American Phonograph Com¬ pany and Thu Metropolitan Phonograph Com- 370 puny. 0. Agreement dated February 0th, 1889, be¬ tween The North American Phonograph Com¬ pany and John P. Haines. Yours very truly, Hunky W. Jussur. This letter of April 0th, to Mr. Jessup, was in answer to a letter I wrote him April 4th, 1808, as follows: “Armi, 4, 1808. Mr. Hunky W. Jussur, J King & Jessup, 80 Broad St., City. DuakSik: I cannot lay my hands on copy of the Metro¬ politan and New York Phonograph Company’s agreements. Will you kindly let mo have copies of these agreements to use for a lew days. Very truly yours, lliouAKD N. Bye it.” I see that this letter was dictated by “Cl. P-D-.” £ who was a clerk in my ollice, and who, as I recol¬ lect it, had undertaken to get together for mo copies of the agreements which boro on the nego¬ tiations. On April 5, 1S08, L myself wrote M . Jessup, returning the agreements, the lottei being as follows: •< Aritil, 5, 1898. Hunky W. Jussur, Esq., 30 Broad St., City. DuakSik: . I beg to return to you the copies of agree¬ ments which you sent me in your letter of to-day. Kindly return to me the papers which 1 loaned you from my office liles on Saturday 128 382 at your earliest convenience, since 1 wish to consult them. Yours very truly, Hichahii N. Dykk." x-Q. 10. Have you looked among your papers ,ln> correspondence imd between you and J honins A. Edison with reference to the subjeet- nmtter of the conferences between von and the committee of New York Phonograph Company? A. J have. I could not lind anv letters. My communications with Mr. Edison 'were made in person, as has been my habit for a number of years 383 111 1110 conduct of his business. x-Q. n. I put the same question to you with reference to tho National Phonograph Company, oH i“"nt & ,0rU’ ''°1,n K- Knn*lolplit and any Phi T'n18""1 °'' “'"^oyeo «io National ' looM JeUera m-' “"I6 y°V"y ,no,no,i,m1""1 other than e relating to the subject- S^S‘rfere,,CUS? A- bailbay S51 rs* i"° x-Q. H. VYhtit papers, documents or memo- conferences, '^tlufr'^hmr the' c*ai<^ ne8’°J''i',lol,,s ,l,*d you produced mul the ^ which !o° y'o,;? were l“er d i„ ?i, er°,,Ce conferences " x SIT J'le ^‘-^ofcdnlmcif “° diSCUSSi0n now in eWdencTum? Hr°m t,,e “««Pondi„ce Jessup’s letter to vou^nf W* recited in Mr- HZ!- "'r1 Wbat 1 nsked y0U ,vas- wl'nt other 38R pupota, if any, were used in such negotiations or conferences? A. My reply is that neither those nor any other papers were used. The conferences did not consist in the discussion of papers. x-Q. 10. My question relates not only to confer- ences, but to the entire negotiations? A. The negotiations consisted wholly of conferences. My letter of April 21, 1808, which is the only one stating anything in the character of a proposition, ' was simply intended to put into writing the propo- sition which I had made at the conferences preced- nig that letter. ,W?,‘ 171- 3’!Jllr, l)ravio,,s answers, have you 380 awn a distinction between the correspondence on the one hand and the negotiations and conferences on the othor hand, so ns not to include the corre- spondtuica in such negotiations and conferences? x-Q. 18. Were not the papers mentioned in Mr Jessups letter of April 5, isos, submitted to ypu by Mr. Jessup m tho course of tho negotiations? . No, they were not. I had asked my clerk to get together those papers, so that I could look them over and refresh my recollection ns to them In endeavoring to get those papers he wrote Mr. Jessup for them, as appears by the correspondence. 37a I returned them to Mr. Jessup the day I received them. I do not regard this matter ns being part of the negotiation at all. x-Q. 19. Ion did receive the papers, and you did return the papers; that is correct, is it not? A. Undoubtedly. x-Q. 20. And upon April 5, 1808? A Un¬ doubtedly. x-Q. 21. And at that date the negotiations were going on, were they not? A. That date was un¬ doubtedly intermediate the two conferences or pre¬ cedent the first conference, lam not certain which. Adjourned to 2 p.st. Monday, March 7, 1004. 131 Nkw Yoiik, March 7, 1001. Mel pursuant, to adjournment at the ollleu or S. M. Hitchcock, Esq., Standing Examiner, .No. 15 William Street, New York City, at 0 i\.m. -Appearances : Same as at previous meeting. Continued cross-examination of RICHARD N. DYKE. Jiff Mr. Hicks : x-Q. 22. In your answer to Q. 3, you refer to 380 1 10 of Mr. Kdison to pay New York Phono- «n,l’h Company “anything for its alleged rights.” lo what rights did yon refer, and why did you use the word “alleged?” A. The New York Phono¬ graph Company asserted that it had rights to do business in the New York territory. 1 regarded tliose rights as extremely doubtful. Those are the rights I referred to, and that is the reason I spoke of them as “alleged rights.” x-Q. 2,1. Didn’t you at that time — the time of the conference of 1890-admit that New York 1 Monograph Company owned the sole and exclu¬ sive right to sell within the State of New York 300 Phonographs and supplies therefor made under the patents of I liomas A. Edison? A. 1 do not recall any such admission. x-Q. 34. Did you, Mr. Kdison, or the National \\ b 1 ° 1 > 1 ' 1 s.o ? \ o on !“ C!"‘ 1 L‘C0"BUt or 80 far as I know, win, M, p;J ,r °"’ f,"0 ti,,1L‘ of the interviews pate the sol t,'0 C0"""ittuu die- putt the sole and exclusive right of New Yrork Phonograph Company aforesaid? A « jcicollect that I did dispute those rights, i k >r*| j§ v & If x-Q. 20. Did Mr. Edison or tlio National Phono- 301 graph Company at Hint time dispute such solo and exclusive rights of New York Phonograph Com¬ pany? A. When I say that I regarded those rights as extremely doubtful, I mean that Mr. Kdison and the National Phonograph Company also regarded them in that light, because they were acting under my advice, and that was the advice I gave them. x-Q. 27. You gave no assurance then, oitlior to Mr. PincolTs or the committee of New York Pho¬ nograph Company, that Mr. Edison or the National Phonograph Company would recognize the sole and exclusive right claimed by New York Phonograph 302 Company for the State of New York, under the phonograph patents of Thomas A. Edison? A. I will not say “No” to this answer, because the fact is that, as the representative of Mr. Edison and the National Phonograph Company, I urged the New York Phonograph Company to go into the business. I believed that if- it had" gone into the business at that time its rights under tile con¬ tracts would have been recognized. Consequently, I am not at all certain but what I suggested that that recognition would be given if the company went actively into the business. While I do not recollect this definitely, I would not undertake to 393 assert the contrary. x-Q. 28. Do you recollect in what month Mr. PincolTs called upon you in 1890? A. It was in the Spring of the year, I think in February, but it might have been as late as March, or even April. x-Q. 29. In your answer to Q. 3 you say, “Mr. PincolTs called upon mo several times, and at one of these interviews, probably the first, I undertook to see Mr. Edison and get his views. This I did.” When you saw Mr. Edison, did lie not show to you two letters to the following effect?* 132 ’ ! “Fuiikuaky 10, 1890. Thomas A. Edison, Esq., Orange, N. .J. Dkak Sin: At a mooting of tho New York Pho¬ nograph Company held this dav, the Secre¬ tary was instructed to congratulate yon upon acquiring the assets o f Hus North American Phonograph Company, and to assure you of tho interest or our company in your success ami in our own, both of which wo believe will ho greatly benefited by your purchase. Tho Secretary is further instructed to ask you to W™ 11 t to tl t ,| ■ 1 1 r piles be sold or delivered for use in New York except through our company. A committee rrom our company will call upon von at your early convenience, if you will n„,„e a day agreeable to you. 3 Yours very truly, lllCHAKD T0W.NI.KY IIa INKS, Secretary.” “ Pehuu a ky 31, 1800. Ihomas A. Edison, Esq., Orange, N. J. Wkau 'Mr. Edison : With best regards, I am, Yours very truly, tt'CHAItD TOWNI.KY IfAtNKS, Secretary.” x-Q. 30? Did Mr To. S‘™ tllose lotters before. 1460 those i fnr fc * ‘"I10' or at abo,lt the time of 307. “ . ,n tl,e S1”™S of 1800, give in- or o v iar no I,hon°g'-«Pl's or supplies be sold Nat Yo, rU°r “Se in, N°'V York> “^Pt through far as I kn?W0n0eroi,h Co,nl’aaJ'? A- No, not so Natim.al PI?8'1’1 H t,h® faot.' that at H>«t time the gra hs .ml Sr1)h .Comp“,,y ^selling phono- f',,3 ™d >" tho State of Now York, p tllrol,S|' than Now York Phono’ ?erv LS'"1?ny?- A> 1(10 not know ! that was a morebi * ag° t le duveloP»ient of the com- granh Pm»S",eSS’i ‘"l*1 "'hothe,';tho National Phono- t N w r^lr,rea°l,ed 6110 I,oint of seiM«g ™ wl^H.'n,32' r!i*e did h,X'q' 34 ' yo,u' answor to Q. 5 you say “in the Spring of 1896 the business was in a condition of complete demoralization, and there was a very considerable uncertainty as to whether it could be 390 "I a1nC0,nme,1'C,ill S.UCCe33'” Ul,oa what knowl¬ edge did you base that statement? A. Upon mv personal knowledge of the condition of the business and upon information derived from talks with Mr Edison and with Mr. Gilmore. x-Q. 35 By Mr. Gilmore, you mean William E Gilmore, the General Manager of the Edison Phono¬ graph Works and of the National Phonograph Company? A. I do. l x-Q 3° It appears from complainant’s exhibit No. 73 m this case, that on March 10, 1890, Wil- ham E. Gilmore wrote to Messrs. Wnlcutt, Miller down taking our inventory nearly sill of Inst, week and as a result are somewhat behind in our orders. We do not expect, to have any automatics in stock in less than two week’stime.” Are ypu prepared to state that the statement which 1 have quoted from complainant’s exhibit 71), is not correct? A. No, 1 have no doubt it is correct, but it docs not change my views as to the condition of the business at that time. The manufacture itself was exceedingly small, and it may well be that they were out or stock on hand. x-Q. 37. Yon recollect, do yon not, that you, as counsel for the Edison Phonograph Works and the National Phonograph Company, and as solici¬ tor for those companies and for New York Phono¬ graph Company in 1890, filed two billsof complaint against Edward 1). Easton and the Columbia Pho- nograph Company, in the Circuit Court of the United States for the Southern District of Now York? A. Yes, I recollect there were bills of that kind filed. x-Q. 38. Yon drew those bills, did you not? A. 1 did. x-Q. 39. And yon have no reason to believe that the statements set forth in those bills were incor¬ rect, have you? A. No, the statement was correct, but I wish to make this explanation: A number of suits had been brought on the Edison patents, re¬ lating to phonographs, against the American Gi.iphophone Company, or people selling the guphophone, and those cases had been held up at r7ht' fili,1« <)f Pl««. setting , it 1110 loc:l1 phonograph companies, which m des o"t "T^P' 1,ar,i°S 1 had nnm qUfUons ‘"‘‘sed by the local Ridhard 130 the counsol for the American Graphophone Com- 403 puny. His purpose was simply to delay the cases Consequently, in bringing one or more later suits in tlie Southern District of New York, I conceived that it would be a good plan to join the New York 1 honograph Company as party complainant, and set out in the bill of complaint that they asserted rights in the Southorn District of New York, in order to prevent the delay in the trial of the patent questions. I recall tha t before so joining the New York Phonograph Company, I had some talk with Mr. Pincofi's on the subject, and secured' through him authority to join that company. I 40, haven’t the bills before me to enable mo to give the exact language of the allegation, but my recollec¬ tion is that it was as I have stated. Complainant’s Exhibit No 10 is shown to witness by counsel for complainant. (Witness continues.) I see by looking at one of these bills, that I also put the Edison Phonograph Works in as a party complainant, although from my point of view that company was not a necessary party. I observe that the allegation I made regarding the New York Phonograph Company was that that company “avers” that it has certain rights. The whole point was to avoid the delay which might occur in the trial of the purely patent questions qofi which might be produced by a plea raising other questions. x-Q. 40. With reference to the National Phono¬ graph Company, you used the expression “Your orator shows.” Do you draw any distinction between tile expressions “Your orator avers” and “ Your orator shows? ” A. I see by examining more closely the framo of the bill of complaint, “Complainant’s Exhibit 10,” that I separated the allegations or title, and had the averments as to the title of each company made by that compahy alone. That was the way ■100 i worked tho tiling out. My recollection before looking ut this bill wns licit I had made the allega¬ tions of the title as coming from all the complain¬ ants, and had said that the New York Phonograph Company asserted certain rights, but I now see that I accomplished the same result, that is to say, the avoidance of any statement by the other com¬ plainants as to the rights of the New York Phono- graph Company, by having each complainant allege its own title separately, and not join in the allega¬ tion of the title of the other complainants. Answer¬ ing the question directly, 1 see no difference between tho use of the words "shows” and "avers” in ■iO? this bill. x-Q. -U. You satislied yourself of the truth of the averments or allegations of the bill before requesting verification of it, did you not? A. Not at all— that is to say, I did not satisfy myself that tho New York Phonograph Company had the title which that bill avers it has. x-Q. -12. But after having drawn tho bill you secured the verification of the truth of all the alle¬ gations in the bill by John I-'. Ha.ulolph, Treasurer of National Phonograph Company, did you not? A. ] secured that verification, but 1 do not think that verification covers the allegation of title of the 408 *atl0"al 11,°,1°graph Company. On that point Mi. Randolph was not competent to swear that the bill was true. x-Q. 43. The allegation or averment with refer- ence to the tide of New York Phonograph Com¬ pany was not made on information and belief, was t nn\VV!lS\ !l -m S,t! •?, ai,*'eCt alleKatio,> title, was madet? A‘ 1 b* 1 sho'vs for i,self ho"' 't was von'2.Vl4' ?0mph,ina,,t’B Exhibits 10 and 11, * “i"1 th!l , !l trreat interest has been manifested in the said se >, oll n d°maud ereatBd for devices constructed in 137 Kic.bard N. Dy; X-4- - - . rue same. Were were fltr8 C°!'r’ were correct in a sense tint such allegations are so put into bills on pat- cuts j they are more or less technical in their clmr- ab eV1?! i,;t':!,d0d t0 giV0 a color to the equit- able lights of tho complainants. Not what would bo regarded as a large commercial demand would be consulered as absolutely essential to support such an allegation. *;?: 4n- . ,Bnt y°u ulso said at the same time that the saul several inventions are of great com- manual rains and practical utility, did you not? A. If the bill so reads, it roads so. 4 x-Q. 40. Now, isn’t it the fact that in 1800 the said several inventions were of great commercial value and practical utility, and that such a demand • existed for articles embodying those inventions, that tho National Phonograph Company and Mr Mison were in the Spring of. 1800 unable to sup- ply the demand? A. There was more of a demand in the Pall of 1800, when these bills were filed, than there was in tho Spring of 1800. I cannot endorse your statement that in the Spring of 1800 the demand was so great that tho National Phono¬ graph Company and Mr. Edison could not supply it. The fact is that tho business at that time was 41 an exceedingly small one. If at any particular time in the Spring of 1800 the National Phono¬ graph Company ran out of stock on any special article it was because it did not have enough orders to warrant manufacturing that article in quantity. x-Q. 47. And if Mr. Gilmore has stated that it was because the demand was so great that the stock became exhausted, you disagree with him, do you? A. I have already stated that I have no doubt that the statement contained in the letter to which you undoubtedly refer is probably true, but 1 do not x-Q. 18. Now, you luivo referred to curtain suits in which picas had been tiled as the reason why you thought it best to join the local phonograph companies in such suits as those represented by Complainant’s Exhibits 10 mid 11. Will you kindly mention some suit in which such a plea had linen tiled? A. I can send for our docket and give you the titles of some such suits, but 1 cannot give them offhand with sullicient definiteness to identify them beyond question. There were several of them. x-Q. 40. You say in your answer to Q. 11 that Mr. Pirn-offs wanted to know what Mr. Edison pro¬ posed to do for that company, meaning Now York Phonograph Company. Slate as nearly as you can just what Mr. Piucolfs said? A. lie said what you have quoted from my direct examination, among other things, but the interviews did not end with that statement bv him. lie enlarged upon that idea. x-Q. 50. Didn’t he say to you that Now York Phonograph Company had requested Mr. Edison to give instruction that no phonographs or supplies be sold or delivered for use in New York except through New York Phonograph Company, or words to that elfect? A. Ido not recollect that he did. x-Q. 51. Are yon prepared to deny that he did? A. No, 1 simply do not. recall it. x-Q. 52. Where did the committee confer with you in 1890? A. Atmyollice, No. 30 Wall Street, Unllntin building. x-Q. 53. You say that that committee included Messrs. John P. Haines and William Fahnestock, did you not? A. I have said so, and that is my recollection. x-Q. 54. Do you know whether Richard Townley Haines called upon you at that time as a member 130 of that committee? A. I do not. The fact is my 415 recollection is somewhat indistinct ns to the mem¬ bers of that committee, except Mr. Fahnestock, whom I recall distinctly as being one of the com¬ mittee, and who acted ns the spokesman for the committco. x-Q. 55. Did Mr. Piucolfs state to you that he had been authorized by New York Phonograph Company to offer for sale the rights claimed by New York Phonograph Company under the Edison patents? A. I do not recall that statement; ho saul ho represented the New York Phonograph Company, and his talk was in the direction of offer¬ ing those rights for sale. 410 ^x-Q.^5(l. Isn’t it the fact that the committee of New York Phonograph Company called upon you in 1890 with reference to securing protection from Mr. Edison for the exorcise of its sole and exclu¬ sive rights under the Edison patents in the State of New York? A. Decidedly not. That was not the attitude of either Mr. Piucolfs or the commit¬ tee ; it was my suggestion that the company should go into the business, and it would only have be¬ come necessary to protect the company after it had gone into the business. The attitude of Mr. Pin- colfs and the committee was that the company did not want to go into the business. Consequently, I 417 see no reason why it should have asked for protec¬ tion in its territory, and I do not recollect that it did. x-Q. 57. Do you assert that the committee did not ask for such protection? A. I do, so far as my recollection goes. x-Q. 58. Do you recollect that the committee did not ask for such protection? A. So far as f recol¬ lect, it did not, and the situation was such that the asking for that protection would have been inconsistent with the attitude of the committee. x-Q. 59. You say the asking would be incon- sistenL. Would it not have boon more inconsistent for llie committee to have stated llmt it lmd no in¬ tention of continuing in the phonograph business, than to have asked Mr. Edison to purchase its rights, in your opinion? A. 1 think my recollec¬ tion of tile situation is a logical and consistent one. 1 would like to add, however, that it. was not a question of tile New York Phonograph Company continuing in the business, because it was not in tile business at that lime ; it was a quest ion whether it would again go into the business. x-Q. 00. Thu rights of New York Phonograph Company had been exercised for a period of about * two years prior thereto by the North American Phonograph Company and its receiver, lmd they not? A. That 1 do not recollect. x-Q. (11. The source of supply had temporarily been cut off, had it not, pending tile time when the receiver sold the assets of the North Amuricnn Phonograph Company, under Mr. Edison's bid, to the National Phonograph Company? A. 1 do not know. x-Q. 02. Do you know anything about the sup¬ plying of phonographs and supplies for phono¬ graphs to the market in the Spring of 1800? A. Undoubtedly 1 knew a great deal about it at the ) time. 1 do not know how much 1 recollect now. x-Q. till. State how much you do recollect now? A. I would not undertake to do so. X‘Q-.0-1- Dt> you know whether anybody was supplying phonographs and supplies to the market in the Spring of 189(1? A. My recollection is that the National Phonograph Company was, or at least that it was preparing to do so. x-Q. 05. You do not know then when the Na¬ tional Phonograph Company began to supply the market, do you? A. No; not in quantities. x-Q. 00. The National Phonograph Company was not incorporated until January, 1890, was it? A. T don’t know, I didn’t incorporate the com- 421 pany, and if you have the certificate in the record, you know more about it than I do. x-Q. (17. Do you know when the receiver of the worth American Phonograph Company ceased to supply the market in the United States? A. I do not recollect. x-Q. 08. Then, as far ns you know, there may have been a period of time during which it was im¬ possible for New York Phonograph Company to secure phonographs and supplies, isn’t that so? A. There was no such period after the National Phonograph Company secured the assets of the North American Phonograph Company ; whether 422 or not there was before timt time, I do not recollect. x-Q. 09. Did you, on behalf of National Phono¬ graph Company or Mr. Edison, notify the New York Phonograph Company that a demand for phonographs or supplies existed in the State of Now York at any time, and especially in the Spring of 1890? A. I have no recollection of any such notice. . x-Q. 70. Did you, on behalf of Thomas A. Edison or the National Phonograph Company, ever call upon New York Phonograph Company to supply such a demand. A. I have no recollection of any such call. 423 x-Q. 71. Have you any reason to believe that Mr. Edison or National Phonograph Company ever gave such notice, or made such a request to New York Phonograph Company ? A. I do not recollect any such notice or request. x-Q. 72. It appears from Complainants Exhibit 15, being the certificate of organization of Na¬ tional Phonograph Company, that the com¬ pany was organized in January, 1890. In your answer to Q. 3 you state that the assets of the North American Phonograph Company were sold to the Natioual Phonograph Company in February, ‘t-’-l 1800. Now. is it. not the fiict t lint immediately ")»>» tlio purchase of .such assets by National I’lio"ogra|)li Company, that, company at onco in- vailed the territory of the various local phono¬ graph companies throughout the United .States, including the Statu of New York, and began to sell phonographs and supplies therefor, manufac¬ tured under the Edison patents, without consult- ing the local phonograph companies? A. I do not know, .lust how soon the National Phono¬ graph Company began to do business actively, I am not able to say. or, *'% 7:i' V°" !l,-° m,t l,r,!lMlr,?d to. say that before ,lu N a t loiiul Phonograph Companv began to do business within the State of New York, or else- where within the United States, that company sought to secure the rights so to do from New ,rk 1 heliograph Company, or any other local phonograph company, are yon? A. No, I am not. x-Q. 7-1. You do know that National Phono- smm'i IT' V bT" lo SU" P>'°n«wnph» and Mipjilies therefor throughout the United States, irrespective of any rights possessed by the local phonograph companies, do you not? A ft is mv understanding that it did so when it began to 42(1 wtnt to just Hliui itjiegan to do business actively. ,|J|1)ly n°t fro,n Mr. Edison 01 the Edison l holograph Works or the National Phonograph Company, but from the American Graphophone Company, did it not? V Thu ^■itow,irih0i,OS,aph Comi’:in>’ "»*•«" »‘U< tho untoij including the District of Columbia and Company. I am tnlkiuir m, w “ , 1 hol,°Sr“P,‘ 1 x am talking uow about the time after 145 K.T.boS“‘ WftS the tirao 1 thought x-Q. 80. When did the National Phonograph Company begin to supply the Columbia Phono- giaph Company? A. I do not know. x-Q. 80. To what extent has the National i ionograph Company supplied the Columbia Phonograph Company? A. I do not know, but I do know this, that in the early days of the busi- ness, at least, that is in 1800, 1807 and 1808, the Columbia Phonograph Company advertised to sell both phonographs and graphophones, and had phonographs on exhibition at its store in Washing¬ ton. Now, since those phonographs wore only made by the Edison Phonograph Works, and sold by the National Phonograph Company, the Colum¬ bia Phonograph Company must have secured its supply either directly or indirectly from the Na- tional Phonograph Company. How much it had when it made the purchases. &c., I do not know, i X'?',87'.y°u ll° not ,nean ,0 say, do you, that uio Columbia Phonograph Company maintained itself upon tho business done by it in phonographs or phonograph supplies at any period of time subse- quent to the organization of the National Phono¬ graph Company? A. The Columbia Phonograph Company also sold the graphophone, and I supposed that that was by far the larger part of its busi- x.Q. 88. The Columbia Phonograph Company does not doal in phonographs and supplies to day, does it, in the District of Columbia? A. I do not know; the Columbia Phonograph Company at the present time is acting, as 1 understand it, as selling agent for the American Graphophone Company throughout tho United States; whether it handles any phonographs or not, now, I am unable to say. x-Q. 81). It is a fact, is it not, to your knowl- 3 udge, Unit iln? Columbia Phonograph Company lias '‘■“.I !1 coiitiimoiis source «,f supply from the'limu of its organization in 1889 down to tin; present dnv, from Urn Amorim,,, (ir„pl,opl,o„o Company ami ttio Mulling oumpauios of the American Grnplio- phono Company? A. What I say about the Columbia Phonograph Company Icoiilil hardly sav its to my own knowledge. I would also like to eorroet your date 1889. Boginning with sometime i t 1889. and extending for two or three years, the American Graphophone Com], any made nognipho- p tones. Its machine was withdrawn from the market, and ,t only reappeared as a copy in its substantial features of Kdison’s phonograph. After ,t did reappear, as I understand it, it made s sales, at least in the Washington territory, To no “ n0l'""l,ia 1>l,0"°Kl'!,l>h Company. x-Q. ! 0. During that early period when the graphophone was withdrawn from the market as Jon state, the Columbia Phonograph Coni], any was Uic Ldison Phonograph Works a “ so lit , 1 ght 1 1 r cl 1 terized. ' ‘l K°°d are so eharao- “■ ''‘'“wi"' *",'«»». .nSirrs''; -q. ;4n°t 'a "rr‘i™Mko “y- not know the fact ’ m,Kl,t hilve- but I do Cmim, , I At l,ll fivunls> the Columbia Phonograph 480 Company has had a source of supply from the time of its organization down to tile present day, so far as you know, has it not? A. It hits been con- tinnoiisly in the business, I think. x-Q. nn. It has lmd a source of supply, ns far as you know, from the time of its organization down to the present day, lias it not? A. I do not know « lint you mean by having a source of supply; all tlio local companies had a source of supply, from my point of view, from the beginning down to the time they abandoned the business. .\--Q. 90. What source of supply had the New 1 honogmph Company in the year 1808, at 440 the time the conference in which you took part? - A. IS ew York Phonograph Company was not in the business. If it hud been in the business it would undoubtedly have secured its phonographs from the Isational Phonograph Company or the Edison Phonograph Works, and its gmphophoncs, u it saw fit to handle them, from the American Graphophone Company. x-Q. 07. Upon the same basis as any other dealer in the Stale of New York? A. I have said in my direct examination that I explained to tlie commit¬ tee that tlie situation in 1898 had changed from what it was in 1890; that the National Phonograph 441 Company had, at great expense and by two years of effort, secured the co-operation of dealers in musical instruments and tlie like throughout the country in thesaleof the phonograph, and that tlie National Phonograph Company would not throw over these dealers. If the New York Phonograph-) Company had wanted to go into the business in ! 1898, it would have been obliged to secure its I phonographs on the same terms as oilier dealers, | at least, in advance of its maintaining its right to j any other recognition in tlie courts. I think it I would have been different in 1890, as I have stated / in my direct examination. 412 x-Q. 08. What assurance of any difference was Ki veil to New York Phonograph Company in 1890, upon wliicli yon can base such belief? A. In 1800 wo urged I, lie Now York Phonograph Company to go into the business, and as I have said in my di¬ rect examination, if it had gone into the business, thu business would have been organized on a plan recognizing thu rights of Hint company. x-Q. 90. That statement of yours was hypotheti¬ cal. What assurance did you give to New York Phonograph Company that that would be done? A. The only hypothesis was that thu New York Phonograph Company should lake the first step which was absolutely essential, namely, that it should undertake to do the business. x-Q. loo. You do not deny, do you, that in the early Spring of 1899, the National Phonograph Company and Mr. Hdison wuru infringing the rights of New York Phonograph Company in the State of Now York? A. J do most certainly deny it. Your question is a very general one, "and I deny it in language which is similarly general. x- Q. KM. Do you deny specifically that in the early Spring of 1890, the National Phonograph Company and Mr. Hdison were selling phonographs 444 •in l phonograph supplies made under the Hdison 414 patents within the State of New York? A. So fai¬ ns the National Phonograph Company is concerned, 1 do not deny this; just how early it began to make such sales I cannot say, but 1 have no doubt that they were i 1890. x-Q. 102. Not Company, to yoi x-Q. 102. Now, did the National Phonogrnidi oiniuny, to your knowledge, make any statement assurance to the New York Phono- such 'sales' 'with h' Jf00 ,Iu,t ;it "0'dd discontinue such su os within the State of New York? -V OM890 Ca"e(1I|,",0n 'ne «» ""-'Spring > . as I can recollect, tile business had I whether the National Phono- 440 I '^'T'-y ,m<1 »'llde any sales in New York I ,10t certain, but that was not a f 1 °" U‘° committee. I l teu lo , * ,l"' l,lilt ur«'"S "Pon the coinmit- \ iUL n . CT York Phonograph Company 1 . tl" phonograph business, I assured them that Hie business would bo done on a plan which wo d I y*"* right.- I do not seu \v h a t° ols'e°was not'ndl' foi- •m'1 I!"-8 ass"ra"co- T>'e committee did pom , and obviously the preliminary step of going I rieht^of nJ Lv1,lan would recognize tho ? I,® s,ntn , r v 01V °'10Srapl1 Company within ! ,of Yoik. could have been only a right M 7 ,'ncOS,,,zo ",0 sole exclusive i ..ei In 001,1 1,a,,y """'in that State. Was I ; ,SaD,n.?“llnd? A- No. No other I i , 8 ”.,y m",*d- 1 "ot undertaking to l ’ however just what tho rights of the New York \ ■Phonograph Company were or were not under their J ? ydS’y", viow of ‘he situation was that if i i T i1 °-’k 1 honograph Company saw fit to go : nto the business, and provided they had tho facili- ties for effectively doing that business in the State 447 of New \ork, that company could have lmd the exclusive sale of phonographs and supplies in tint territory. x.-Q. 104 Did you so state to tho members of the committee? A. I think I did in substance. x.-Q. ion. II, at they would have the solo and exclusive right? A. I have already an ered tin question. x.-Q. 100. You believed then that they were en¬ titled to tho sole and exclusive right at that time? A. No. I will have to make a distinction there I believed that the rights of the New York Phono * graph Company were exceedingly doubtful, but in view of the disorganized condition of the business, the uncertainty as to its future success, and the doubt as to tlie exact plan .upon which the busi¬ ness should lie done, the National Phonograph Company would have been glad of the co-operation of the New York Phonograph Company in tho handling of phonographs in the New York terri¬ tory, quite apart from any rights which the New York Phonograph Company claimed to have under x.-Q. 107. And yet you know of no assurance in writing given either by you or by Mr. Edison, or >‘1!> by tho National Phonograph Company, to tho New York Phonograph Company, that the rights of Now York Phonograph Company would in any way be respected? A. 1 know of no such writing. The negotiations did not go that far; tho New York Phonograph Company did not want to go into the business; they wanted to sell out for a lump sum and return something to their stock¬ holders. x.-Q. 108. Have you any reason to believe that on February 10, 1800, the New York Phonograph ?rolnl’i,'1-v not> through its Secretary, request Mr. Edison to give instructions that no phono- r>0 graphs or supplies be sold or delivered for use in Y,,rk territory, except through New York 1 honngmph Company? A. As 1 have said before, 1 never saw that letter. x.-Q. 100. Have you any reason to believe that sucli a request was inconsistent with the then inten¬ tion of New York Phonograph Company? A. No, irt5..DS ?S!ml '! !1S 'l,,:o,ls*stent with their that tli-'if I n' "‘lII,.L‘<1 t(> out- I should say Mr. Edison or the Nat om I pi Bmi> ' ,C°"lpany to definitely?" T'ln 2 r° if you «» recollect I would S i , •/,,1a"bst,mcu you have said: x S in t0 *'ec'111 tl10 wolih- when that statement 1U°S.U,I,(' !lt tlmt interview 452 A. M in ZZlr Tle by Mr- F,lll»ostock? : f Bwr' ““ * l,y rn or tlio.0 intm-icu's “180“™,"“'* bt" A- B witlnefer!mclV!rHy°U C0,lfe,T,id " ith Mr. Edison 453 Ar,- ir 1 1 , le ,10Sotiations of 1800, didn’t kind re °U 1r go into the hitsinesi to the business in 1898, to go in as any othei not propose to go into t> sell its rights to do ■tike those rights valu¬ able was to establish them in the Courts. I did not consider the suits of 1800 as being suits ill which those rights would be litigated. Those suits raised the patent questions, and as we had every¬ body in the suits who claimed any title, the Courts would have proceeded to the consideration of tile questions of validity and infringement. The suit of 1808 was proposed to be a suit raising the con¬ tract question as the principal question. x-Q. 12-1. In 181)8 neither the National Phono¬ graph Company nor the Hdison Phonograph Works could have brought a suit in the Stale of Now York against the American Graphophone Company or its selling agents, based upon the patents upon which the suits of 18915 had been brought, could Lhey ? A. In December, 1809, as the result of pro¬ tracted litigation between the phonograph com¬ panies and the American Cirnphophone Company, there was an exchange of licenses under certain patents. My attention is called to Complainant’s Exhibit 28, which appears to be a copy of the license agreement. If the patents set up in the odls of complaint of 1890 are included in this license agreement, • and the operations of the jiaphophone Company were such as they were lcensed to do under this agreement, then you are vlmmi,.128’ ^T’ ,tl,° s,,its of 1800- the* bills m i n . V0111'."1* Complainant’s Exhibits 10 mi’s i.’vi -TV 1,Tl“","“ia’ us sho"" •>>’ Complain- e,n or , ,S “nd ,3’as result or the agree- nuit of December 7, 1S90, being Comnlaimmi-s Exhibit 23, isn’t that so? A. That seems to bo the 403 Witness is requested to produce at the next session any memorandum which he may have made and may bo able to lind relating to the ^tuitions, interviews and conferences of It is stipulated that in accordance with the request following x-Q. 12(5, the witness, Mr. Richard N. Dyer, has made the search referred 404 to in the request, without finding any further memorandum relating to the negotiations, in- torviews and conferences of 1800, and that he would so testify if recalled. Nkw Yoiiuk, March 11, 1904. Met pursuant to adjournment at the office of S. M. Hitchcock, Standing Examiner, No. 15 William Street, New York City, at 11 o’clock. Appearances : Same ns at previous meeting. JOHN B. UPHAM. being first duly sworn on 466 behalf of the National Phonograph Company, tes¬ tified as follows : Direct examination by Mr. IlouyU : Q. 1. What is your occupation, Mr. Uphani? A. Clerk in the offico of Winslow, Lanier & Co. Transfer clerk. Q. 2. Are you in charge of the Transfer Depart¬ ment of Winslow, Lanier & Company'? A. lam. Q. 3. What is meant by the Transfer Depart¬ ment? A. I transfer the stock and register bonds, ■ and act as agent for them. John B, 1(50 l .|. Did you occupy tliis office in tlio year 1894. A. I did. ' Q. r>. Huvodouo so continuously? A. Ever since. Q. (i. lu tin* year 1804, were Winslow, Lanier & ainpauy transfer agents for the New York I’lio- igrapli Company and the Metropolitan Phono- •a])h Company? A. Wo were. <}. 7. When did you cease to be such agents? A. limit in .Inly, 1890. Q. 8. In October, 1894, did your firm receive n immiiuication from Richard Townley Haines? A. es, it did. Q. 0. Will you produce it, please. A. 1 will. (Witness produces letter dated October 1894.) Q. 10. Did this letter come to you on behalf of mr linn? A. Yes. Q. 11. lias it remained in your custody over nee? A. It has. Q. 1 -• Do you ]iroduce it from the files of Wins- w, Ijiinier & Company. A. Yes. Q. 18. Do you know Richard Townley Haines? A. I do. Q. 14. He is now dead, is he not? A. He is. Q. 15. Are you acquainted with his signature? Q. 10. Do you recognize that signature as thn gnnturo of Richard Townley Haines? A. Yes. Q. 17. Have you produced this letter pursuant i a subpicna duces tecum served upon vour firm? A. 1 have. Q. 18. Did you receive any other cominunica- ons from hew York Phonograph Coinpnnv relat- ig to the particular matter set forth in tlii’s letter ' October:!, 1894? A. No, 1 have not. Mr. 'Hough i Counsel for National Phono¬ graph Company offers letter dated October !!, 1894, in evidence, marked Respondent’s Ex¬ hibit No. 9, of which the following is a copy: 157 Mr. Hicks : Letter is objected to as imma- 409 tonal and irrelevant. •• Jons i UTl.1.1 IIICHAI ’• IIainks. President. 31 1'AII.NKSTOCK. Vico t’resldont. II row.vi.Kv IIAI.VKR, See rotary .t Treasurer. J |j ’ UwJIAPH COMPANY, New Youk, October 3, 1894. Messrs. Winslow, Lanier & Co., 17 Nassau Street, ,, New York City. 470 ue.viTjE.mk8: The following resolution was passed this day by the Executive Committee of the New York Phonograph Company: ‘ Jlcsolced, that the Secretary of this com¬ pany notify Messrs. Winslow, Lanier & Com¬ pany, Transfer Agent, not to transfer to any party or parties, the Twenty-five hundred (2500) shares of The New York Phonograph Company’s stock, nor the Twenty-five hundred (2500) shares of Metropolitan Phonograph Company’s stock, standing in the name of the Central Trust Company, Trustee, pending the ,m settlement of certain claims of the New York Phonograph Company against said stock, and to further notify the said Messrs. Winslow, Lanier & Company that the said New York Phonograph Company will hold them respon¬ sible as transfer agents if they transfer the said stock or any part of it, until notified by the New York Phonograph Company that its claim against the said stock has been settled.’ Please acknowledge receipt of this letter, and oblige, Yours very truly, Hioiiakd Townley Haines, Secretary.” 1486 ins Q. 10. Hid you acknowledge receipt of this let¬ ter, to tlx; best of your recollection? A. It was acknowledged. Q. 20. Did Messrs. Winslow, Lanier A Company ever transfer the stock referred to in tile letter which has been read? A. I cannot swear to that; as fares I know it has not. been transferred; but I do not know, as I haven’t the books in my pos¬ session. Cross-examination by Mr Ilicks : x-Q. 21. Was any request ever made to Messrs. Winslow, Lanier &■ Company to transfer the stock? A. I do not know of any; I would not be positive of it, though. x-Q. 22. As far as yon know no request ever was made by anybody? A. As far sis I know ; no. FREDERICK 0. HAND ALL, recalled. By Mr. Ifouyh : R. -I). Q. (10. Mr. Kandall, have you brought with you, pursuant to snbpmnn, the* letter dated October 3, 18!)-1, which yon produced at a pre¬ vious hearing in this case? A. I have. (Witness produces letter “ Respondent's Exhibit No, .4. for identification, February It), 1004.”) -JOHN. P. HAINES, duly sworn on behalf of the National Phonograph Company, testified ns follows : By Mr. Ilough : Q- 1. Mr. Haines, you have attended to-day in response to a subpumn served upon you, have you not? A. 1 have. ’ J Q. 2. I show you “Respondent’s Exhibit No. -t foi identification, February 10, 1004,” and ask you whether you were acquainted with Richard Town- 100 K'si”v'A"v;o.“pi,*"r* ,o “» m Q- 3. He was your brother? A. Yes. AQiam'VOr° y°" ilCqi,ai"tod witl‘ l»is signature? Q. 0. Do you recognize the signature at the foot of that letter as your brother’s signature? A I appears to bo. Mr. Hough: Respondent offers in evidence Respondent’s Exhibit No. 4, February 10 1004,” as of this date; and the letter roads as follows ; __ _ Mr. Ilicks: Objected to as immaterial and irrelevant. D-Q. •• Jons 1*. Halves, Presidcn -'470 NEW YORK PHONOGRAPH COMPANY 32 Park Place, Under authority of the North American Phonograph Company uiul tho licensee of the American Ornphophono Nbw Yottx, October 3, 1804. Oknthal Tuust Company, Trustee, 04 Wall Street, New York. Gkntukmkn : The following resolution was passed this day by the Executive Committee of The New York Phonograph Company : ‘ Resolved, that the Secretary of this com- / pany notify the Central Trust Company, Trustee, not to deliver the Twenty-five hun¬ dred shares of the New York Phonograph Company’s stock, nor the Twenty-five hun¬ dred shares of the Metropolitan Phonograph 1488 John H. Schemerhorn Company’s stocK Manning m mu »»»» Trustee, to the North Atnerienu Phonograph Company or its receiver, or to any person or persons claiming antler them, ponding the set¬ tlement of certain claims of this company against said stock : anil farther notify the said Central Trust Company that the New York Phonograph Company will hold it. responsible as trustee if it delivers the said stock or any part of it, until notified by tin; New York Phonograph Company that its claim against said stock have been settled. Please acknowledge receipt of this letter, and oblige, Yours very truly, UtctiAitn Towni.kv IIainks, Secretary.’ ” Cross-examination by Mr. Hicks : x-Q. 0. Referring to defendant’s exhibits, being letters dated October it, 1B1M, addressed to Central Trust Company, Trustee, and Messrs. Winslow, Lanier & Company, signed Richard Townloy Haines, Secretary, do you know whether any re¬ quest for the transfer of the stock mentioned in said letters was ever made to New York Phono¬ graph Company by North American Phonograph Company or Jesse II. Lippincott, individually, or as Trustee, or by any one claiming iimlur them or either of them, or by anyone else? Mr. Hough: Objeeted to as immaterial and irrelevant, as any request on that subject to New York Phonograph Company would be unnecessary. A. 1 do not know of any such request. x-Q. 7. Do you know of any such request made to Messrs. Winslow, Lanier & Company, to the Central Trust Company, or to anyone olse? A. I It is hereby stipulated by and between 481 counsel for complainant and defendant, National Phonograph Company, that the signatures to their testimony of the fol¬ lowing witnesses, Messrs. John R. Hardin, John p. Haines, William 13. Gilmore, Fred- ertek 0. Randall, John 13 Uphani and Rich¬ ard IS. Dyer, be waived, and it is generally stipulated that the signatures of all witnesses to their testimony be waived, unless specific¬ ally requested by counsel for complainant or ’ ! defendant. ‘ It is further stipulated by and between counsel for complainant, and defendant, Na- 482 tionnl Phonograph Company, that Complain¬ ant’s Exhibits 114 to 124 — 11 in number, being certified copies of assignments of patents, are true copies of the originals thereof, subject to correction by comparison with the originals, upon request of either party and production of the originals. JOHN R. SCIfERMERIIORN, being duly sworn on behalf of National Phonograph Com¬ pany, testified as follows : Hired examination by Mr. Hough: ^Q.1. Where do you live? A. East Orange, 483 t Q. 2. \\ hat is your position? A. Assistant General Manager of the Edison Phonograph Works and the National Phonograph Company. Q. 3. As such Assistant General Manager, what are your duties? A. To look particularly after the manufacturing. Q. -1. Are you actually occupied in the works. I L e-> Ote factory, where phonographs and supplies f therefor, and records, tire made? A. I am. Q. G. And how long have you been supervising these nianufactures? A. Since June, 1806. John R. Schemerhorn manager, do you Keep or liavo Kept records of th< number of phonographs and ninnhor of record! which are produced? A. I have. Q. 7. What company manufactures phono¬ graphs, as distinct from the records? A. The Edison Phonograph Works. Q. 8. And has that been true during Die entire time of your employment? A. It has. Q. !). Does any other company than 1I16 Edison Phonograph Works manufacture the machine known as a phonograph? A. Not to mv knowl¬ edge and belief. Q. 10. Do the machines which are manufactured, known as phonographs, by the Edison Phono- graph Works, supply the demand for phonographs for the entire world? A. They do. Q. 11. Both the foreign and domestic trade is supplied? A. Yes. Q. 12. Has that likewise been true during the sntue^time of your employment by the works? Q. U. During the time of yyiir employment by lie Edison Phonograph Works and superintend- ce„f .ts manufactures, what general change, if J’ ' kG 11 c ' 11 - instruction of the wtaa*™?’ ' rBforBncu to tllu '““tor which immteri^f*’ °b^Cted lo ns irreluv‘int and nmo.-"!!) ,WV0 i!'lopted thu »su of tlie spring notoi phonograph, which was not in use bv the Edison I honograph Works prior to Januntv 1 legtin ?" °A.S Yes' tllC "S0 °f the 8l)ri,,« mot«r had Q- IB- What other mninr i. „ . . - clusTvely 8P,ing ",0f°r!’ A< Blootl'ic type® ex- 487 Q- 10. Since January, 1800, has the Edison 1 honograph Works continued to manufacture both typos of manufacture, both the spring motor and the electric? A. They have. Q. 17. Explain the difference between the two ns to eaSe 0f operation and cheapness of operation? , A- 1 bo electric machine is much more expensive to build j it is necessary to have a purchased force to operate it, either by purchasing current from existing illuminating companies, or by the pur¬ chase of batteries, which become exhausted with use. The spring motor type machine is operated 488 by u spring, tho only force necessary being that it be wound. Q- 18. Is the spring motor which operates the phonograph substantially similar to the motor of a clock? A. It is. Q. 10. Has this spring motor been improved and reduced in expense since it was originally intro¬ duced? A. It has. Q. 20. Have you at my request, and from the records kept under your supervision, compiled figures showing the entire output of phonographs, both the spring motor and the electric types, since 1800 down to 1004, inclusive? A. I have. 480 Q. 21. Will you state the results of your in¬ vestigation? A. The figures which I give you will cover the fiscal years; our fiscal year begins March 1st and ends the last day of February in each year. For tho fiscal year ending February 28, 1807, we manufactured 774 Spring Motor type phonographs, 405 Electric type phonographs ; for the fiscal year’ ending February 28, 1808, we manufactured 4,005 Spring Motor type phono¬ graphs, 200 Electric type phonographs; for,., the fiscal year ending February, 28, I80jtf we manufactured 13,833 Spring Motor type [49; 1492 John R. Schemerhorn 13. Q. •100 phonographs, -122 Kleetrie type phonographs ; for Hie linen I year ending February 28, 1000, »i: iiiiiini f:iet ii reil -15,827 Spring Motor type phonographs. 270 Kleetrie typo phono¬ graphs; for the liseal year ending February 28, 1001, we inaiinfael tired -11,85(1 Spring Motor type phonographs. -1-1 Kleetrie type plionogrnplis; for the liseal year ending February 28, 1002, wo manufactured -11,015 Spring Motor type phono- giaphs, 0(1 Kleetrie type phonographs; for the the fiscal year ending February 28, 1000, we matin, factored 70,080 Spring Motor type phonographs, 277 Kleetrie type phonographs : for the liseal year 491 ending February 20, 100-1, we mnnufnctiired 112,- 0-10 Spring Motor type phonographs, 1,102 Kleetrie type phonographs. Q. 22. Are the electric type phonographs, con¬ cerning which yon have testilied, of a uniform pat- tern? A. Practically uniform pattern, blit two different types of winding for the motors. Q. 23. Is the electric type phonograph the pat¬ tern which has been manufactured the longest? A. It has. Q. 2-1 And how long has that type been con¬ tinuously manufactured? A. I cannot speak know- 402 If f, ? t,,"IU’ lM,t t0 ,h.u of my 402 knowledge and belief, since the phonograph was first manufactured. Q. 2n. When yon went into tile phonograph b smess in 180(1, was there any other type of ,|,e , L'0",,":-‘rT"-V 1 ness then remained about the same until the fiscal % 2S. The large increase : “V * tl,at pnrtioular year was caused by the fact iMl J ‘“J6 ,n.iKl° “ very improved reproducer, and we B ■Mmm' Se, lntrodticed to the public the moulded record, both of which tended to very largely in- Wm trn"30 bl,siness i a"d “‘is same statement holds WIth refl, !hu repertoire was small. We saw the “'Upl dV,Sablllly of Putting a record of our own on the - % market, and likewise the advisability of making Wm “ns record cheaper. After we started to manu- Br j f tr!?,."’U t"r,lc(1 t,‘0'11 out “»d sold them i ° !,St; 1,le ,,m ye“r — that is, the year 1807- ‘ U b"slaesa was small, owing to the fact '■''wM T. 11 'vas "‘oro or loss experimental with us; but dl"ing the following periods .you will note that 1 "-‘re 'vas a constant increase— all due to the fact PSfll , 14 'vas “old for 50 ceuts and due to the fur- iWkm-’ 4ler fttot that we 'vel'c “ble to supply a machine Stoat was within the reach of the public. Q- 54. Is it a possible tiling to state, with mathe¬ matical accuracy, the proportion of phonographs put out during the period that you have testified 1498 John R. Schemerhorn r.08 jo that are used for commercial purposes, us dis- tinct from amusement purposes? A. 1 haven't such (lain. Q. Bfl. I'Yom your observation of the phono¬ graph business, ami the general nature of the demand which is made upon the Edison Phono¬ graph Works for supplies and parts therefor, wlmt portion of your business is represented by the com¬ mercial demand for business, as distinct from the amusement demand? A. In my judgment the proportion is iatinilesimal. Q. flit. Is not practically the entire demand for phonographs to-day, and for years back, entirely f)00 for amusement purposes.' A. According to my Cross-examination by Mr. Hicks: x-Q. 57. When did you first become connected with this National Phonograph Company? A. I cannot answer the question, because I do not recall when it was organized, but it was on or about the time of its organization. x-Q. BS. In what capacity did you act when you lirst went to the National Phonograph Company? A. As manager of production, the same position I now hold. x-Q. 5!). What did the production consist of at that time by the National Phonograph Company? A. There was no production. x-Q. 00. Did you go there as innnnger of pro¬ duction when you lirst became acquainted with the National Phonograph Company? A. I went there as assistant Ceneral Manager, with particular duties to look after the production. x-Q. 01. To whom were you assistant ns General Manager? A. It was simply a title given me sons to show authority. ifX o- ,C*' "r*10 "as tku General Manager? A. i r. Gilmore. You are asking questions relating I to the National Phonograph Company now, aren’t <511 you? ’ x-Q O3. Entirely. Jlnvo you been a director not tl0,,a 1 ,0"0gl'ai)l1 Company? A. I have x-Q. 04. Have you hold any office other than that of Assistant General Manager? A. I haven’t Sjpi. llol(t any office whatsoever. I am not an officer of the concern. 05* you first become connected with the Edison Phonograph Works? A. .Tune fm, 1890. ’ 11$ X‘Q- At tl,e same time that you became - connected with the National Phonograph Com- <512 t&m A- I cannot answer that, I do not know. WM x Q; R7.- Do y°" kno'v whether you became con- u $ nected with the National Phonograph Companyat the same time that you became connected with the Edison Phonograph Works? A. I do not know fM P°sltive|y t«m#eir!m4° M, Thomas ,!lt.-VJ,1,,l;tt,0n lmvo >*““ >"“• "ill. Iirstbi.es,., A‘ SIMco 1,10 U'HO When vou Works' \ T'T Wi,l‘ the K,,ison Ponograph n or A', ° ,hrect oonuection. x-tiJ. So. Have you consulted with him’ A I !™^;I;!:;ne^rsuHuoor Mi- x-Q. SO. Details connected with the Edison Pho- I s A- W|‘" »< « I 151,1 Edis°n give instructions in re- if fe«'d to the manufacture of phonographs? I A. Novel- to my knowledge. §■ n 80- ,To 'vhom did he give them? A. I do | no‘ hnow that lie gave any instructions. £ i0' ,T° "',lnt did the consultations which I I ,!,d Mr- Edison refer? A. Principally I ,t0 ,S *lavu l,uun "mmifactured 0} the Edison Phonograph Works? A. 1 am not i ml'l'LT n,th thc 1',atcnts : 1 would have to take it H I till the patent attorneys and have them sifted I 0l,t; 1 11,11 ,10t in position to get them otherwise. 1 , I0,7- The Edison Phonograph Works aflixes ft to the phonographs which it manufactures and I ,8’ a I,s? of Patents setting forth the inventions ft knot? v" tr,l° pl,o,10sniiJ,,s '"aniifactured, does ® ,108- 0,1,1 you producc*such lists of patents rf alli.ved by the Edison Phonograph Works? A. Yes, you mean the plate? [H Counsel ; Yes. || (Witness is requested to produce such lists #' at ^he next session.) C §§■ X'Q- *°°- To whom has the Edision Phono- m pnil)'1 " 0l'hs sold the phonographs manufactured IP y lt’ “n? referred to by you in your testimony? H c^-pany to the National Phonograph || x-Q. 110. To whom beside the National Phono- Ill graph Company has it made sales? A. I think the Si name of the concern is the Edison United Phono-- graph Company. " || x-Q. 111. And the sales made to the Edison j§- United Phonograph Company have been made for H export only, have they not? A. That is my un- i Jerstanding, but not my present knowlege. CS I x-Q. 112. Is a motor any essential part of the I phonograph? A. A motor of some description is. | x-Q. 113. That is to say, it is necessary that a • phonograph have means for moving the phono- l graph cylinder or blank? A. It is necessary.. x-Q. 114. Is the motor used for any other pur¬ pose? A. It can bo used for other purposes, but those we manufacture are not, so far as I know. x-Q. 11C. Tlie motors to which you have refer¬ red in your testimony have been motors used in connection with the phonograph for the purpose of revolving the cyliudric tablet? A. Yes. tablet would nimble t In* phonograph to opcinto would it not? A. Yes. x-Q. 117. You do not regard a ohnnge in the kind of motor used in commotion with the phonograph as a change in the principle of the phonograph itself, do yon? A. No. x-Q. 118. The phonographs produced by the Hdison Phonograph Works in 181)0, were Edison phonographs, were they not? A. They were. x-Q. 111). And the phonographs produced by the works to-day arestill Edison phonographs, are they not? A. They are so styled. x-Q. ISO. ion said that the National Phono¬ graph Company began the manufacture of records in April, 1807, and I now ask you whether prior to April, 1807, the National Phonograph Company sold records? A. Not to my knowledge and bo- x-Q. 121. What did the business done bv the Nanonal Phonograph Company prior to April, ^80 <, consist of? A. The selling of phonographs and accessories thereto. x-Q. U>2. And included among the accessories inereto were recorders? A. Kecorders when they were supplied with the machines, or otherwise. x-Q. 123. And what beside recorders? A. P. ..shes, and cabinets possibly, at that particular m bla,,ks hr the making of phono- Ir V W"? A- Hla"ka for the making oi phonograph records. nrio',Qto~lS07ie /n'T'1 w««««niph Company, quantities, ,n I,ir«0 larirti minnfiti 4t0t c,l,,notte!I you in how . X 12°' i,rom wl,om did the National Phono¬ graph Company obtain blanks prior to April 1807? A. Prom Edison Phonograph Works. x-Q. 127. And since April, 1807? A. The Edi son Phonograph Works. x-Q. 128. That is to say, tho National Phono graph Company has never manufactured phono graph blanks? A. Tlioy have not. x-Q. ipo. And all the blanks used or sold by the National Phonograph Company have been manufactured by the Edison Phonograph Works! x.Q. 130. And tlioso blanks were manufactured : in accordance with the inventions of Thomas A. Edison, were they not? A. That is my under- [ standing. x.Q. 131. Mr. Edison has made several inven¬ tions involving tho material used in the blanks ; has lie not? A. That is my understanding, I do v not know positively. | X‘Q- 133- And from time to time changes in the | n'ato'ial ase(1 in the blanks have been made under §■' the direction of Mr. Edison, have they not? A. I i don’t kuow. : x-Q. 133. You know that changes have been iniulo in the material, do you not? A. I do. x-Q. 134. And as far as you know, those changes are in accordance with Mr. Edison’s in¬ ventions, are they not? A. I do not know. x-Q. 133. In tiio making of a moulded record, it is necessary lirst to make the engraved record, is it not? A. Yes. x-Q. 130. And the making of the engraved, or original or master record, is according to tho same process as that previously used Tor the making of original records? A. Same general plan. x-Q. 137. The National Phonograph Company began the making of moulded records in 1003? A. it began to sell, them in the year 1002; they were manufactured previous to that time in an exneri- John R Schem«xhorn mental way, ami as I rernll it, we were making n stock of them. x-Q. 138. Docs not the National Phonograph Company allix to the monhlcil phonograph records which it lias man n fact tired and sold sinco 1002, a list of Edison patents under which such moulded records are made? A. They are marked “pat- I believe the dates are given. ■ss is requested to produce at the next list of such patents.) It is a fact, is it not, that tho moulded words are made in accordance with (Wit piloting IVI.WU1 iii e inline in accordance witn tho inventions of Thomas A. Edison? A. That is my understanding. x-Q. MO. The National Phonograph Company 1ms sold the phonographs to which yon have re¬ ferred, within the Suite of New York, has it not? A. I do not know one way or the other, I am not identified with the selling end of the business. x-Q. Ml. You have seen such phonographs ill largu numbers offered for sale within the State of New York, have you not? A. I have seen them. x-Q. Ms.. And you have identified them as coin- mg from the National Phonograph Company and he Edison Phonographs Works; you recognized then, as the product of the Edison Phonograph Works, did you not? a. Yes. f„ 't Q i ,a jlllL flme is truo ot 1,10 records niaiiu- f.n.tured and sold by the National Phonograph Company, is it not? A. Yes. x-Q. M l. A phonograph record made for com- is- f°r dictation and copv- J? an oflice, is made according to the same pro- ,,,,7 “ l,llon°graj)h record made for iimuse- "*tnt. is it not? A. A record is not used for ssstrsrir £h! 7nt,“r" 0f. t,'e phonograph produces upon 535 tho blank a record of tho matter dictated, does he not/ A. Yes. x-Q. MO. In the making of a record for amuse- mont purposes, tho operator, by means of the phonograph and instrumental or vocal music, pro- not?8 T°Y.he bliUlk ” ‘eCOrtl °X ,nl,sio' does he x-Q. M7. In each case you have an original record produced in exactly the same manner, do you not. A. Yes, the same general thing. a ™ Wlmt difference is there, specifically? A. I he difference is in the appliances which we have as manufacturers of tho Master music 530 records. x-Q MO. Tho use of the phonograph for tho manufacture of music records was not new in 1800 was it? It had been operated prior to that year! had it not? A. I believe it had. I wish to say that my knowledge of the phonograph began in 1800, when I came in the company. x-Q. 150. And in* 1800 you know that such linns as Widen tt, Miller & Company, in New York, for instance, manufactured many thousands of music phonograph records? A. I do not know it: I have heard so. x-Q. 151. As far as you know, other concerns (337 throughout the United States were, in 1800, manu¬ facturing phonograph records for amusement, were they not? A. They were being manufactured when I came here. r X'Q- *52. The growth in the sales made by the National Phonograph Company, as described by you, has not then been due to the introduction of any new idea in die use of phonograph records for amusement, has it? A. Not the general idea, but specific ideas have been introduced— improvements have been introduced. x-Q. 153. Mr. Edison lias made improvements 181 right along upon the phonograph ami phonograph record, has In; not? A. Improvements have been made from lime to lime on phonograph records. x-Q. 15-1. And all yon mean to say is that the phonograph . . phonograph record of to-day, as to both the Edison Phonograph Works and the National Phonograph Company, are improved over what they were in 181)1). A. That is my conten¬ tion. x-Q. 155. And . . itlrilmte the increase of Sales in phonographs and phonograph records to those improvements, in pari, do yon not? A. To the ini- provenients and the reduction in prices. ’• * x-Q. 150. The American (irnphophono Company and its selling agents have been powerful competi¬ tors of the Kd isun Phonograph Works and the National Phonograph Companv since 1800, have they not? A. They have been competitors. x Q. lo?. And they have manufactured and sold graphophones in large quantities, have they not? A. I hey sell them. I do not know nnvthing about the quantities. x-Q. 1 i>8. And they have also manufactured and sold graphophone records in quantities, have they not. A. they have. 1 do not know- anything about the quantities; they have manufactured and »‘10 sold records. x-Q. 150. And the records inannfnctured by them consisted principally of records for amuse- ment. tlid they not? A. So far as 1 know. •'7; 1(,°; >l,,ere l,!,s 'w no dilferunce in that „ ■!? lu. *'lu ■‘‘-•cords manufactured and m „ ls"n 1’honograph Works and the Nationa! Phongraph Company on the one hand. spi.- L 1 uierican Graphophone Company and its selling, con, pames on the other hand, has there? A. Not so far as I know. 'v*'ut was the manner of doing busi- 3 in June, 1805, by the Edison Phonograph u orks ; by that I mean the mannerof carrying on 641 sales? A. I do not know. When I wont there in 1890 r was more or less new to tho business ; I went right out in the manufacturing department to look after tho t lungs wc were manufacturing and devoted all my time to that. x-Q 102. Were you familiar with the mnnufnc- turo of phonograph and phonograph records prior to the time you went to tho Edison Phonograph A\ orks? A. Know nothing whatsoever, except such machines as I had seen casually. x-Q. 103. And as I understand you, your oin- « Payment has been in the line of production ever i • «'"co J’011 l>«ve been with tho Edison Phonograph 512 ■■ >' orks and the National Phonograph Company? A. That is all. * • x-Q. 104. Prom whom did you acquire the knowledge which you have to-da.v of such produc¬ tion? A. Previous employment in other places. x-Q. 105. I refer specifically to the production • of phonograph and phonograph records? A. Tho j manufacture of phonographs is purely a mechanical ■ proposition ; I had a largo experience in that direo- tion before I came here. The manufacture of records I have grown up with, you might say, since we started. x-Q. 100. Who has been in charge of the mnnu- 543 facture of phonographs and phonograph records— I mean genera! charge? A. Mr. Gilmore. xQ. 107. Wlmt sort of a recording point is used in the recorders Hint have been manufactured and sold by the Edison Phonograph Works? A. Prin¬ cipally cup-shaped. x-Q. 108. Of what material is tho cup-shaped recorder made? A. We attempt to buy a sapphire, we suppose wo get it. x-Q. 109. Tho reproducing ball is also made of sapphire, is it not? A. Yes. x-Q. 170. The cup-shaped recorder is an inven- John R. S 182 1 tion of Thomas A. Edison, is it not? A. T do not x-Q. 171. To tin; best of vonr knowledge mid hc- lief it is, is it not? A. To lliu lies! of my know), edge, nil tin* patents tlmt apply on phonographs were inventions taken out l»v Thomas A. Edison. x-Q. 172. In the manufacture of the moulded phonograph record, yon first make the original or master record, and then yon coal the original or master record, either with graphite or some metal- lie substance, do yon not? A. There is n coating on the original record. x-Q. 17:i. The next step is to make an electro i plate or negative of the original record, is it not? A. Yes. x-Q. 174. Then, hy the process of moulding, a moulded record is made through the negative of the original record, is it not? A. There is a regu¬ lar cast made of it; the wax is put inside the mould and left to congeal there. x-Q. 175. And the material of which the moulded record is made is contracted, in order to enable it to be taken out of the matrix? A. Yes. Adjourned to Thursday, March 17, at 2 p.st. Nkw Yokk, March 17, 100-1. -'let pursuant to adjournment at the office of •“ Al: ■ •I'talieock, Esq., No. 10 William Street, Aew i ork City. Appearances : Same as at previous meeting. continued. of -I0IIN It. SCI 1 HUM KlillOHN -»// Mr. lfouyh : von’lmv ‘ ''‘"I Se,,omwl»urn since the last meeting A. 1 have"21' °VUI )0U1 tesli,"on-v> have you not? theneiJIs ° ,n,lko an>’ cor««tion 647 N i in , , V, ‘ employment by the to do s' T°I"°er"-Ph Co,nPan>'? A. I would like nlo on ; 1 ‘rVOn ,nves"'K«tod the date of my em- Ploy n out and find it to bo May, 1808. i - 178. That was the time when you began to p° I,a,d ‘"'y t>ii"g by the National Phonograph Company? A. That was the time I was put o "the mo °i~n°r fltional Phonograph Company, desire /o nmk° '"‘y ot,,L‘r ejections that you dts c to nuke in your testmiony of last week? A. ; , "° ot lor corrections, except tlmt this , 18 t0 "Pl«y t0 nil questions relating to mv ; j;;;}y0y,,,e,,t with ll*° National Phonograph Com 648 | Cross-examination continued. | BV Mr. Hicks- I Jour stittement tlmt you became con- % 1 fin . ' Muon Phonograph works it. June, £ Jo»u, IS correct? A. it is. I « X^-I18.1- Did y°uv (l,ll‘es change in May, 1808? tun* ofen!" Si° m"Ch 08 at that t,,no the tnanufac- w s m,c?, 8 'V!ls progressing favorably, and it j?1" , ",dor ",y ol*«rgo as wed ns the manufac- Works. I,a,t,,,0,,t °f th0 EdiS0" pl10,10t'raph ^ son Pirn182, VV,Ut? ‘lny other employes of the Edi- son Phonograph Works paid a salary by the Na- ‘0,'°f apl* Coml,any heginning with May, • 1808? A. I do not know. x-Q. 188. In answer to Q. 13, you say tlmt the spring motor phonograph was not in use by the ,1 'o'lograph Works prior to January 1, IHJO. How do you know that to be so, if your connection with the Edison Phonograph Works did not begin until June, 180(5? A. I hud. tiie ree- . ords of tiie Edison Phonograph Works examined, £ a,,d the Hrst record I could liud was December, John R. Schewerhorji I8!).r>, as I rural I it. at which time the inannfaetiirc of spring motors was begun. Therefore* I assumed that none were on the market previous to January 1. 180(1. x-Q. 181. As far as your information goes, Hum, you have been informed that spring motor phono, graphs were manufactured as early us December, I8!t.r). You have no information, have you, tlint spring motor phonographs were not manufactured and known prior to December, 181>.r»? A. I have x-Q. 18.1. Were not phonographs made and sold by the Edison Phonograph Works in the early part or 18015? A. I cannot answer that question. x-Q. 180. Why? A. Because, in tile first place, I have not looked up all the records prior to iny connection with the company. x-Q. 187. If, on March 10, 1800, William B. liilmore wrote to Messrs. Wnlcult, Miller & Com- pany, wherein he said : “The demand upon us for supply material has been so great that our stock is practically exhausted.’’ Do you know anything contrary to that statement? A. I do not. x-Q. 188. Do you believe that statement to bu correct or incorrect ? A. [ believe an v statement made under oath would be correct. x-Q. 180. If i his statement was made by Mr. tiilmore in a letter to Wnlcult, Miller & Co., have you any knowledge or information which would , .J1,* to beliuxe that that statement of Mr. t'lhnore ...the letter is incorrect? A. I have 0,10 «•'}’ or the other. x-Q. 1J0. As I understand it, vou have no Son r Be,W«,lh? huaatw ,l0"« by the Edison MV°rkf w lhB K»tto««l Phonograph Company prior to June, ,800 ? A. 1 have not ofXthosl !woD0US y°"- kno"',etlSe of the business A M - TT""'* »*S»» *«th June, 1800? Works begins 'with*J uno^'lSOo!'80" I ,, X:Q' }02- A,,tl did you acquire no knowledge of MS to business of the National Phonograph Company | until Ably, 1808 ? A. No specific knowledge. | x Q- 103’ the time that you have been I Ii°"l!|, pi"'tll»I',,U Kdis°" Ph0,,0«n*Pb Works. I 1 ,e bd,SH,,l Phonograph Works made any sales I or phonographs or phonograph supplies to any f p8PS°" °r Persons other than the National Phono- f «raph Company and the Edison United Phono- gnph Company? A. Not to my knowledge, * '“‘hough such sales may have been made without j: my knowledge. | 'Vllat did A'011 "lemi in your answer | '■i- when you said that you found tho busi- 554 I "uss !l VB,,y chaotic condition ? A. There was % PiacticaBy no phonograph business being done by the Edison Phonograph Works when I went in their employ. x-Q. 105. What business was being done? | A- Tl,cy were inaiiufacturing other devices. b 10(i- J" yo«>’ answer to Q. 37, you say tho p manufacture of tho phonograph with the clock £ mevoment was started in April, 1800. How do i’ou reconcile that statement with tho statement which you have just made, that in June, 1800, no . business was being done ? A. That was largely an experimental order, and tho phonographs so 555 ! assembled proved unsalable. x-Q. 107. You do not mean to deny, do you, ; that as early as March, 1800, the Edison Phono¬ graph Works was manufacturing, and through the National Phonograph Company selling phono¬ graphs? A. I do not know. -x-Q. 108. When were phonographs first manu¬ factured by the Edison Phonograph Works, to your knowledge, after you became connected with the Edison Phonograph Works? A. They were being manufactured, so far as I remember, at the time I identified myself with tho Company. John R. Schemerhor* x-Q. 100. A phonograph business was tliun being done by the Edison Phonograph Works in June, J8!)ii, wiis it not ? A. A very limited business. x-Q. 300. For the year beginning March I, 1800, nnd ending February 38, 1807, there were iiiunu- faetured 771 spring motor type phonographs nnd •105 elect rie type phonogRiphs, as you stated in your answer to Q. 31, were there not ? A. That is x Q. 301. And that is what yon mean by a lint- Med business? A. The major partof that business was done in the latter end of the fiscal year. x-Q. 303. Have you any figures to show what part of a was done prior to June. 1800? A. I haven I the details of the year’s business with me. x-Q. -’0.1. It is a fact, is it not, that the Kdison I heliograph Works, during the year 1800, sold other phonographs than those manufactured bv it during the liseal year 1800 u, 1807? A. That imghtpossddy beso; we might have had a stock '.ll 1 h f II fiscal year, bull have no positive knowledge on the subject. Ince^ ”? ■' r 1 SL'ssiou I asked you to pro- |lntt outain lists of patents affixed by the Kdison oK'apb W orkstophonogra.l tnd machin a. ..ufac.ured by ,t. Have yon done so? A- I >ffi-d,r2e2d;::s!l,u ,mtu,u ,,iatus wi,ich ,,nj W itness (produces plates.) ’on kindly sPUe two plates. Will ise h is l ^ "t 1 IONU l’1“,”s mo and what ^ Uot'diues1 .tanjkh.phu.a 1)Ia(L.is llsutl 0M tlle.,Gem„ 'ompiabnat’?V^.k-‘COlorud 0,,u is iduutic»l with ompl.unants Exhibit 85, of May 13, 1003, is it x-Q. 207. And the nicklo-plntcd one which you MO ibit ^ idenUual wit" Complainant’s Ex mbit 81, Of May 13, 1008, is it not? A. It is. T :°®- t0 Complainant’s Exhibit 85, lias that plate been affixed to phonographs manu- acturcd by the Edison Phonograph Wo, Its S the whole period of your employment with the Edison l honograph Works? A. It has not. teH Tdn°9, ,Vr|U,n " ,lS it ,irat ,lsed? A- I cannot toll, T do not know positively. x-Q. 210 Has it .been used by the Edison 1 honograph Y\ orks from January 1st, 1001, down to the present day? A. It has. VVr.!t by "ie Edison Phono- 5C0 feMph \\ orks during the year 10 OH? A. It was. x-Q. 212. And during the year 1002? A. I can- not recall j changes have been made in the plates ' ‘roni time to time. I should say that either this particular one or one similar to it had been used during the year 1002. «Q«*11m.Li the l,h°nograpli plate, Complain- - ant s Exhibit 81, used by the Edison Phonograph Works to day? A. It is. , x-Q. 214. When was that plate first used by the Edison Phonograph Wrorks? A. I do not know. x-Q 215 Have not plates substantially identical with Complainant’s Exhibits 84 and 85 been used 561 by the. Edison Phonograph Works during the whole period of your employment by it. beginning with June, 1800. A. Patent plates have been used during the time that I have been identified with the Edison Phonograph Works, but I do not think they have always been of this same general character ; that is, I do not think the printed restriction was used when I first became identified with the Company. x-Q. 210. But the statement upon the plates, Exhibits 84 and 85, that the phonographs to which the plates were affixed were manufactured under condition tin- lir.ms.- to ns.r and vend thin record ini | died by such sale, immediately terminates, lliomas A. Kdison. Tlionin.s A. Edison. Thomas A. Edison. x Q. 22H. Insidu tin- box there is a label con- taining tlJe statement : “Important notice. Made at tin? Kdison Knliomtorv, Orange*, 2s’. U. S A under patents of Thomas A. Kdisi.ii,” Ac. Is i'i true that the record contained in this box was made at the Edison laboratory? A. I. was made by the . .“.'“’""i 1 Company in the building •tcljiureiit to thy Kdison laboratory. x-Q. aail. What part of the work was done at the kdison laboratory? A. The master in . . wen* Hindi* at tin? Kdison laboratory. x-Q. ‘-'••to. The record contained in the box which }on have produced, then, is n moulded record? x-Q. ‘.'Ml. And by the master moulds you mean i-r'" fr°,n" f'lstor re or I V n r" ,e,ln " 1>hon<«n,Pli blank ? A. I do. w, deli ,t ** ' 10,0 w ",u *,l,,,,k uuule upon he I . ‘ m,"f,0r reconl w<“ «»gm«.d? A. Hr b^ldhS"'1 ,n0gr,l,>1' Work'' in ono of ",oi'r building 1>lu,no«mPb Company in tl r ‘b^.Sas'SJlo0',;,il^ng? A‘ Tho building Orange. ’ f "8 Vallo>' Jb.ad, West die original "'f ,,'«teri«l made which , •'"''■U. the master reconl nixed liv tin. r I-* ""l* u<' The materinl was ^.hei,.b„ildiI^SOn 1 l*0n08ri,I"* "* «»• X Q 23<5‘ Am' who “i»d the material of which ; this moulded record is made which you have pro- 61 1 ced to-day? A. An employee of the Edison J iioiiograph Works. x-Q. 2MT. So that tile Edison Phonograph Works .t01 th° National Plionograpli Company the material employed by the National Phonograph Company tl k fe of ill moulded records? A. Yes. if < x'Q-_288. That has been tho course of business | ever since you have been connected with tho | National Phonograph Company and the Edison | I honogrnph Works, inis it not? A. That course I has been pursued during my connection with the C7S I company. I X'9' 280- Now, do you know of any record sold | lae National Plionograpli Company since you I ,lrst became connected with tho Edison Pliono- Kn,l,h Works in June, 1800, which had upon it, or "l1011 tile box or other package in which it was i contained, a statement to the effect that it had been |; manufactured under a patent of anyone other than !'t '-Thomas A. Edison? A. Ido not know of anysucli § hibel being affixed. |v . X'Q- 240. You do know, do you not, tliat ever since you have been connected with the Edison I Plionograpli Works, all blanks and all phonograph 573 | records manufactured by the Edison Plionograpli | Works or tile National Plionograpli Company, and l sold, have lmd upon them, or upon tho boxes or, i packages in which they were contained, a state- f 1,10,1 1 to tho effect that they were manufactured i; under the patents of Thomas A. Edison? A. So far f 1,3 1 know, when there lias been a statement oil tile i, box, it lias been to tile effect that they were nmiitt- K Pictured under the patents of Thomas A. Edison. x-Q. 241. How long has the label upon the box ' which you have produced to-day been in use by the National Phonograph Company? A. I do not i recall speoific dates, but so fur as I recollect, ivo Felix Gottsciallt tt?cl using tlu> label about tile l e began to •ords. x-Q. 2-12. Ami the label lias been substantially lliu same as I lie label upon the box which you have produced to-day ? A. Xu. The label which is used at present was not used in the earlier days. x-Q. -’111. Hy that you mean thill the restriction set forth upon the label upon the box which you have produced to-day was not set forth upon the earlier labels. A. That is right. x-Q. 2-1-1. In other respects the labels have been substantially the same as the label upon the box produced to-day? A. So far as I can recall. x-Q. 2-ID. Wrapped in cotton and contained in the box produced by you to day is wlmt? A. A moulded record. x-Q. 2-10. .Manufactured by the National Phono¬ graph Company? A. Yes. x-Q. 2-17. Does the moulded record have any legend on it other than the phonograph record itself? A. It has. It has the catalogue number an it; likewise the word “ patented ” ; alsoa copy or Mr. Edison's autograph. •Q. 2-18. That is a facsimile of Mr. Edison’s 'ignat A. Yes x-Q. . >•!!). And the words " Thomas A. Edison" iUl , 1 ."l1011 ,hu on the outside of the box iwy iwWB are ,/V.Q- 1 sl,0'v -von Complainant’s Exhibit SS, ^ I •/ \ T' ask-vo" if y<>» «re familiar , • 111 !1 goueral way, I should say that ■i, ., 1 e !U,llogl,t,s iss"wl '»>• tl,u National Heliograph Company. neiitt Mill N«W’ ",! t,wt outalogue is this state- iiventio.. , « i '• ‘ * 'L‘ world owe-s this wonderful he great ‘ ‘I’” development to t^«rZ.r ,10"'aS A- KaiSO"-” l8that jour opinion correct? A. It is; that 10!) is my understanding; that Mr. Edison is responsi- 1577 ole For the phonograph. x-Q. 202. And the marked improvements in the phonograph to which you have referred in your testimony, are the cause of the present advanced development of the phonograph mentioned in the catalogue, Complainant’s Exhibit 88, are they not? A. Yus. Jtc-dirccl examination by Mr. Hough : U.-D. Q. 203. You have stated that in looking up the manufacturing record of the Edison Phono¬ graph Works you found that the spring motor ma¬ chine began to be manufactured in December, 1800 ; 578 do I correctly understand you? A. That is my recollection, ft was late in the Fall of 1800. U.-D. Q. 20-1. In looking back over the records of thu Edison Phonograph Works, did you find any earlier record of the manufacture of the spring motor by the Edison Phonograph Works? Mr. Hicks: Objected to upon the ground that the question calls for a hearsay statement on the part of the witness. A. I did not. FELIX GOTTSCHALK, being first duly sworn on behalf of the National Phonograph Company, ®T9 testified as follows; Hired examination by Mr. Ilough : Q. 1. Where do you live and what is your present office address? A. I live at No. 1 East 100th Street and my office address is 11 Broadway. Q. 2. And what is your present business? A. 1 am engaged in various mercantile enterprises. Q. 3. IV ere you ever an officer of the Metro¬ politan Phonograph Company? A. I was. Q. 4. Will you state your connection witli the Metropolitan Phonograph Company — when it began and when it ended? A. I was one of the syudi- •D.Q. 1520 101 50 , ;i I'liiilr.ict from Mr. Josss II. Mppini'ott for ilio formation of various local com- panics. Q. A. A motif; others the .Metropolitan Phono- ffttipli Company? A. Among others tho Metro- imlitan Phonograph Company. Q. (I. Dhl you assist in the organization of the Metropolitan Phonograph Company? A. Yes. '■ "’'-re you a stockholder? A. Yes. S'- s- "'• '** yon tin oIHc.t? A. I became an officer Inter on al the incorporation of it. IJ. !». And were you a member of the board of directors from the beginning? A. I reullv cannot , ,'>-'"»-“"iher; I have lost entire track of it. ' Q. 10. \\ hen did you become an oflicer of thu company and what III r did yon become? A. I became secretary of the company in 1880 or 1800. Q. 11. And hour long did you continue to bo suiU.iij ? *A. Lp to the time of the aintilgaiim- .,!! v'“ amcopolitiui Phonograph Company ‘I 1 he xNeiv 'i ork Phonograph Coiii|i:iny. I '■!. And after the amalgamation you ceased to be an oflnser of the consolidated company? noMmn’lo' h°" y'"! "Vn‘ 11,1 °nicer °r Cie Metro- 1 • ve • nm°fe'ra!’1' C’°!"l,:,,*y *Iid .1 t company business? T "t inVn,15 ^ ^ ,n‘"8aclion of Avenne. ‘ "" ,lt 207 ™th PlioiioL'i-ml’i '!■ ":lS 11,0 ,,nicu of The Wew York Tlf’K 1 Y°rk Metropolitan PhonogruT n* Sucretari’ °f thu 1‘egular attendance at Tt were 3™ ia I was there .1-, it. T . “'“t place of business? A. L daily during the usual ollice hours, Felix Gottfclalk the'eompa^?0 Tl ^ ““ b"B,ne88 °f * !7' As S!,Kh Secretary or the company, state tat the condition of tlio company was, and wlmt tho nature or success of tho business was? A 'V0,!"'S,t ,n“JP°™ted tlie various companies wo, like all of our friends, thought tliat we were nil going to make an independent fortune out of t, apparently tho phonograph was ready to lie launched upon the public. We soon found, how- ever, that the machine was not lit for public use- it was too delicately constructed. The stylus was C84 constantly becoming separated from tho diaphragm, the cutting knife required considerable mechanical know edge to adjust properly, the motor gave us considerable trouble, and we also had trouble with me blanks. Q. 18. While you were connected with the Alet- ropol.tan Phonograph Company, were yon soiling any machines? A. No, sir. “ Q. 10. What did you do? A. We were only renting them. * v twho,.n t? A. Jite Rorth American Phonograph Company. 3. 21. And the title to tlie machine inamtfac- 085 tiired in wlmt company? A. Tlie North American Phonograph Company. Q. 22. And if the machine got out of repair what happened? A. If wo rented si machine, we natur¬ ally would be compelled to put it in working order and that involved tlie employment of about four or live inspectors. In fact, wo kept track of one special machine which we had rented out and found that the expenses for taking care of it for less than six . months amounted to over $10.00. We were rent¬ ing machines Tor $-10.00 each per annum, $20.00 of which wo paid to the North American Phonograph Company, leaving us $20.00 per annum. q. 2:1. 1 me repairs, 1. W ho hail to bear Ihe er your company or the North American Company? A. The North American Company wns obliged to replace all worn out parts; that is the only ohli- nation they were miller. The balance of repairs ami taking care of the machines was at our own expense. Q. 21. What Style of motor wns in use at the time you were connecleil with the company? A. We started in by using storage batteries; some of our licensees preferred primary batteries, nml we also experimented with a spring motor, but for general use we employed storage batteries. i7 Q. 2fi. Were they economical and successful? A. They certainly were not economical, and we had considerable trouble in replacing batteries that hail run down. Our great difficulty was that there was no way to gauge the amount of work thnteach battery was being put to, and consc«|iientlv it was almost impossible to tell when a battery should lie renewed ; and out- telephone was ringing all day¬ long for new batteries to take the place of those which had run down. We employed two express¬ man )} the week to deliver machines and restore run down batteries. Q 2,). During the time that, you were an offleer i', ;,7"I|,:1''-v;,'V!IS ,Iiu business of the company ‘ ; f; . -)• 1 l,u business never was successful ; - tan behind from the very start of the business, and wo never caught up. wiX !)"ri"t' ,hc li,,,u 11,1,1 you were connected more ijlme "11 ' "'i-' ""S 'l £ro'vinK in the sense that a Ve ,"er° 'brnmnded by the public? md’rini vi '!""" beginning of the business we u» nm ,.i„„ 'ZTm! 1' “drr make l.-ises f ’ "" "mlly wo wuro compelled to .ng the ;,;ac..i^,;lf^^,-:^ inhl^^L:et,,rn' Q. 28. During the time that you were connected with tho Metropolitan Company for what purposes were machines calculated that you put out and leased? A. We tried wherever possible to induce commercial firms and others, principally attorneys, to use the machine as a substitute for the stenog¬ rapher, and during tho first year of our existence probably placed 400 machines for that purpose. It had been tho wish of Mr. Edison that the machine should not bo used as a toy, but ns a busi¬ ness machine, and working in thoso lines wo re¬ frained from diverting it from any other branch oxcepting for liigli-class exhibitions. Wo had a special department that exhibited the machine at private dwellings for a consideration, and this wns a very remunerative business as long ns it lasted, ns wo charged $25.00 for an evening’s exhibition ; but gradually, after the first novelty wore off, we coased giving these exhibitions. Q. 20. When you ceased your connection with tho company had tho business become more or less profitable, or more or less unprofitable than it wns when you began? A. I lost all interest in the com¬ pany towards the latter end, because I saw it going to pieces, as we were losing nil tho money we had originally placed into tho treasury for development purposes. Wo were running very much behind mouth after month, so much so that had we not arrangod with Tho New York Company, it would have been necossary to lmvo given up our lease on our oflico on Fifth Avenue. Q. 30. Were you a stockholder of the company ? A. I was one of the largest stockolders. Q. 81. Did you retain your stock as an invest¬ ment? A. I did at the start, but when I saw how things were going I disposed of considerable of tho stock, finally selling my last interests a year or two ago. Q. 32. So you finally sold all your stock? A. Yes. Q. DM. And did ynn find yourself compelled t 11 il for less than yon paid for it? A. Itwasonl f !l ""‘lu I had' boon trying to sell m ork for sometime, but could not got any price fo until I was finally ciiuldud to sell it at n nomina rox.i-c.ru m i nut ion by Mr. Hicks: x-Q. !M. To whom did you sell your stock re ally? A. 1 sold it to a broker. x-Q. H i. What, was the namo of the broker? A. ,n’l kno"' " •‘••'I'cr I care to answer that unless i necessary, because that is a private mattorof inj x-Q. .!G. Won’t you answer tho question? Mr. Hicks : The question is material, am tile witness is requested to answer it. Mr. Hough : The defendant, National 1‘lm nogiaph Company, has no objection to tlx witness answering the question, but I ndvist the witness that in my opinion, if he regards >t as injurious to his own interest to give tin name of the broker to whom he sold tho stock, til,”. 10 W ,,ot compelled to answer the interogn A. Unless I am compelled to answer I would pro. ” 'lul“,lu ^rom tk,: broker first whether liu has o 'jeeUoa to my disclosing his name. . ” , "I,s t,lu broker. Joseph V. McCoy? a. t refuse to answer. y°" SU" thu stMk bin. on his representation that he was working in a McCoy.' eHl‘ A‘ 1 offer I had received in five years for it, 1 let it go. ! X’Q- 40. Did you know when you sold the stock . t-hatyou were taking a stop toward putting Thomas ( A. Edison and this defendant National Plioau- f grapli Company in control of New York Pliono- i graph Company? A. I hadn’t the slightest idea of any such thing. As I have previously stated, ! 1 had lost entire interest in the wliole business : since the year 1892. x-Q. 40. You would not deny, would you, Felix Gottscls.il; tli;it Joseph I*. McCoy was the broker? A. I will not deny nor allirm. x-Q. 17. Did yon transfer tlio stock to John H. Helm? A. I transferred the stock to no one. x-Q. 48. Endorsed it in blank? A. Endorsed it in blank. x-Q. 4!). The Metropolitan Phonograph Com¬ pany and the Now York Phonograph Company consolidated in the year 1800, did they not? A. About that time. x-Q. BO. So that your connection with tho Metro- pohinn Phonograph Company did not continue for over two years, .lid it? A. No, it did not. x-Q. BI. Have you any technical knowledge of the phonograph? A. What do you mean by tech- meal knowledge? x-Q. 52. Have you a knowledge of tho different parts of the phonograph? A. I have a general Knowledge of the component parts of the phono¬ graph, having been able to take one apart and assemble it again. ^ t,i(I tllu cutting knife consist, prior to 800? A. It was an adjustable knife. th« ‘‘UUUi,,« ‘lo you mean ‘ ™ll"Vlfl,ls? A. I mean the knife that shaved the cylinders. * f.n‘ .>roJMlri‘lor}- io utigmi-ing tho sound """r u •» itai tine knif.. ....... ‘ , yr0 concerned. The cut- tl>c blank foranothei-recoT rL‘U°rd!i P"1*" is ^ a- '”“k . . ■"lie, it Ul„r„. loiiiu-uiL.’;.?1,,," I'J,1 'P stylus or roconliog diamond — or bortz, really— and this was affixed to tho diaphragm, and at that time in such a manner that the least shock or jar would separate them. x-Q. (58. Tho recording point then consisted of a jewel, did it not? A. It did. x-Q. BO. The recording point of tho phonograph to-day consists of a jewel, does it not? A. I don’t know, I haven’t seen a phonograph in ten years. x-Q. 00. The recording point, prior to 1800, con¬ sisted of a cup-shaped jewel, did it not? A. Itdid. x-Q. (it. And a cup shaped jewel, composed of a jewel, is the recording point used to-day, as far as you know? A. I don’t know, I haven’t seen a phonograph in ton years. ( x-Q. 02. As far as you know, then, there has been no improvement in the recording point of the phonograph of to-day over the cuji-shaped jewel of the recording point in uso prior to 1800? A. I have no knowledge of what they are using at present. x-Q. 03. In that respect then, you cannot say that tho phonograph was defective prior to 1800, as far as tho recording point was concerned? A. We never hud any troublu with the recording of records at that time. That point was perfect from the first day we received it and wo never had any trouble with it. 0 x-Q. 04. And the reproducing point was a jewel in thu shape of a ball? A. It was. x-Q. 05. And that ball was usually made of sap¬ phire? A. It was, — or bortz. x-Q. 00. And that is the reproducing point of the phonograph to-day, is it not? A. I do not know. x-07. Q. In 1800, the cylinder used in connec¬ tion with thu phonograph was a wax-like cylinder, was it not?. A. It was. x-Q. OS. And those are the cylinders used to- lay? A. They are the same shape, whether they ire composed of the same material, I do not know? 3?elix Gottscfcal !r x-3. n in tlx* cylinder of to-day, do yon not A. I dii not, tis I repeated, I Imd lost nil in tin* phonograph. 0. Tin* motors used prior to 1890 wore motors? A. They won* not; tlnsy worn batteries— primary batteries; at that time id tin* electric motor was not. a success, as titan; hoard that we tried in connection phonograph did not work successfully, so loncd its use by electricity. 1. Klectric motors are used to-day, are . in connection with phonographs? A. I now; I do not remember ever having seen e with the electric motor. !. \ on do not mean to say that, electric tave been abandoned for use in phono- 1° yon? A. I did not know they were in I. W hat do you mean when you say that mdoiied it? A. Thu Metropolitan Phono- nipany tried an invention that had been I by some party in interest, which we tried 1 would not work, so we abandoned it. • Did your direct testimony have anv- 10 with the graphophone? A. I know no ■eted with the Graphophone Company at mless they are old olilcers, none of whom m in ten years. • What I meant to ask yon was whether your testimony here to-day, in which •ed to various parts of the phonographs, in m t ml the graphophone as it existed 18J0? A. 1 he testimony* f have given 11 y relates to the phonograph. We had b es with the graphophone, the principle ich was t tin t it . . . . ,, 203 out of ten it was necessary to adjust the other 007 machines before a proper reproduction could bo made. x-Q. 70. The business of the Metropolitan Phono¬ graph Company included also the selling of phono¬ graph blanks, did it not? A. Phonograph blanks and phonograph records. x-Q. 77. And the phonograph records sold by the Metropolitan Phonograph Company consisted of records of musical selections, did they not? A. Yes. x-Q. 78. And those records of musical selections wero sold for amusement purposes, were they not? A. To the best of my knowledge. 008 x-Q. 79. They could have no other purpose, could they? A. They might be used for reproduc¬ tion for all I know. x-Q. 80. Itcprodiiction of similar musical records for amusement? A. Yes, for amusement. x-Q. 81. Do you recall the volume of business done by the Metropolitan Phonograph Company while you were connected with it. number of machines rented? A. To the best of my knowl¬ edge the rentals ran up to about 000 machines dur¬ ing the first year and then rapidly decreased. x-Q. 82. What tho business was after the con¬ solidation you do not know, do you? A. I haven’t 609 the faintest idea. x-Q. 83. Wlmt improvements were made in the phonograph after tho consolidation, you do not know? A. I do not know. x-Q. 81. You wero aware, were you not, that under the contract of the Metropolitan Phono¬ graph Company with the North American Phono¬ graph Company thero was a provision whereby the sale of machines could be required by the North American Phonograph Company? A. I was. x-Q. 85. During the time that you were con¬ nected witli the Metropolitan Phonograph Com- not required liy llm North American Phono, 'll (*oiii|i:iny ? A. It was not. Q. 8il. Ami it was not permitted, was it, by Morlh American Phonograph Company? It wa.s not. Q. 87. Have von ever been connected with the onal Phonograph Company? A. In no way. Q. :I8. Or with Thomas A. Kdison? A. Not 1 left the Metropolitan. I was interested in in puny in which he was interested. Q. 8!>. Were you snhpienned to testify here i.v? A. I was informed bv Mr. ISuckinghnm mie here. Q. 00. Are you acquainted with Mr. Hueking- Q. !)1. Have been acipiainted with him for i line. A. No, not very long— know him by Q. 08. l)o you still refuse to give the name of Hiker to whom yon sold your last shares of V l,nless '* ls necessary to do so— for the '1" re, m„, th.t I do not know whether he would me to disclose his name; 1 have no interest 7 1 fnj'i'iermore would like to make one . 1 s,!,,w' ll‘at 1 Imd not had an ‘"""K tll,! I'!‘st live years for anv stock— 'v|,° ,l,:,|le ail offer "of wlmt I ■ C •! "diculous price, and which I refused ; " as about two or th ree yea rs ago. "!,S tl,U ,m,nu of ll'"t broker? ' , f •' 1 '>'» "ot reinumber; I never met the e or„ and he had been sent to me by a friend. £ 't "."'"y •sl,i,r,-••s of s«";k ‘I'd you sell , tl,,,u ,of last sale? A. I do not care it .tnswermg that unless it is necessary. i»vV,rL«rr;,Tirr'lT 'er them, but decline to unless I 205 x-Q. 00. Isn’t it the fact that when you made 018 your last sale of stock you knew that that sale ot stock was made to persons acting in the interest of the defendants in this suit? A. Who are the defendants in this suit? x-Q. 00$. The National Phonograph Company, impleaded with Thomas A. Kdison, the Edison Phonograph Company and the Kdison Phonograph Works. A. I asked no questions. x-Q. 07. Were you not so informed? A. I was informed that the stock was bought on behalf of the Edison interests, but nothing specific. lie-direct examination by Mr. Hough: 014 It.-D. Q. 08. You stated that you had paid no attention to or had lost all interest in phonograph matters sinco the year 1802. Now, the consolida¬ tion took place in 1800; did you pay any atten¬ tion between 1800 and 1802? A. Nothing except that T knew what was going on after I ceased to be connected with it by hearing about it, but' after that I lost interest. It.-D. Q. 00. When you speak of the time you ceased to be connected with it, you mean you ceased to bo an officer of the company? A. Yes. R.-D. Q. 100. Was that between 1800 and 1802? A. I did pay some attention to the matter ; I heard qj 5 what was going on, but knew absolutely nothing about the details. K.-D. Q. 101. You had no further personal acquaintance with the business of the consolidated company. A. No. Adjourned to Thursday, March 24, 1004, at 2 o’clock 1*. M. V Yoiik, March 2*1, 1001. Mot pars., ant to adjournment at the olllco of S. Stiv t | ’ Sli"U i,IK K*",lli,,ur> No- Iff William Appearances : l-oi is Hicks. Esq., for the Complainant. Ciiaki.ks M. IIoi'iiii, Km,., a,„| Cii.Mii.Ks l, Hcckimii, am, for the Hespomlem. HUOII M. KUNSTQN. a witness pro, luce, 1 on behalf of respond,-, u, being first duly sworn, testi- 017 liwl us follows: Hired examination by Mr. Jluckinyham : ?' V *'s -v,,l,r residence ami occupation? A. I reside at. 309 Hark I*lace, Hrooklyu, N. Y„ ■» "! 1 *"'* ,L'!|I estate business. connected with the Now York A Yes” t'°'"|,!l,,-V’ C0l"l'l»inant, herein? t.h?co«,pa'ny lMt C","BilJr ? A’ v,<*-Pnaidont of A *lilV,; •v°l* l,•»» lone di.i'\v,T i''?i<' :V°U •s,t‘ute‘l President, how ..^^7 a- ■ ■*“* and 'loo l"^ two 'or- ,}!^reUce U'tie between 1903 Preside,,;? A 5^“' y°" ,mvo bc—* Vico‘ tbe second JendJ ° y“"'5 1 WIW . °’ sll» 1 don’t think I have. 1534 Hugh, M Fuaston. 207 Q. 9. Who signs the stock certificates? I A. Either the president or myself; if the presi¬ dent is absent I do. Q. 10. What in general have you known of the affairs of the company since you became president in 1901? A. There is so much of it, it would take a long time to explain; but the matters connected with the company have generally been submitted, and when I have signed anything it has been sub¬ mitted by the secretary and by the act of the board by request. I haven’t given it that study and attention perhaps where I could give you an answer in relation to why I signed such papers. I assume that all is correct; you see that I do nat c give but a certain portion of my time to tho oflice; I come there usually and if there is any business to transact whereby it is necessary for mu to sign any papers, 1 am there to do it. Q. 11. Are you, or have you been, a salaried officer? A. No. Q. 12. Are there any salaried officers in the New York Phonograph Company? A. No, sir. Q. 13. Hut in general you have known of the affairs of the New York Phonograph Company and its prospects since you became president? A. Well, I have imagined that I did, yes. Q. 14. What do you think of its prospects? 0 A. I have been much encouraged in the progress that has been made in our suit against Mr. Edison and his associates. Q. 15. Have you at any time since you became president of the New York Phonograph Company considered the stock of that company of any sub¬ stantial value? Mr. Hicks: Objected to as immaterial and irrelevant. A. Well, I think we have made it valuable; yes, I think tlint our procedure, &<:., against the Edisou people and the record we have made lias ' look hold nf ii. Q. Hi. When did you lir.si ii'k was valuahlo or uiiglii :>uld sav within throe years ■l 17. Hut during the hist oino to think this e valuable? A. I liiink it of any value? A. I , !8‘ * 011 ,,MVU soineliniu.s speculated in tins ck? A. Well, to a very limited extent. A-u*|r-h”‘ i- 2«. Prom whom did vou buy this sleeks L 'Y*:1’’ 'tl,li!,kl 1 '-'"'Sh. it— in faoi, I know I — of the H. 0. |)„„ uslllU. *' yusTllu l{- G- Jj|‘" the Mercantile Agency! sleo- 'V1,;lt or1 yOU giVU f°r tills lot of Stock, A- -,fi cents a share. Yus TI,Wy "U,U *100 slmres> "ere they? msnv’ti'li'r0,';1' °f l,,u lVts"‘ York Phonograph •puny is •72,fi0()lO00? A. Yes. irm'v tn.IiM l'.,i8 n,te l,lu entire stock of the 1 bring $0,050? a. I don’t know. .. . u,!f. ",,k>ss 1 hgnred it. ght," i,o"o^°" "K"rU il 1'll‘a8e? A. Yes, that tolhe \\lfU C’0,"1!lai,m",’!i counsel objects Umt is i examination, llpon the ground no evid.-r t‘1”’ "i,stu ut time, there being New Yorl-1 Pi"*1 ollll!r shares of stock of bought mid "mT11”' Co,"I'«»y have been 11 :;,...U..h,Un lli« «■ Ci. Dun stock v \ | d , i" |VC‘ry higl' rn,i"8 this fness they didn’t go into nn inves'i?' 1 horonglily. b inustigation of it very t share ftn'il'y l° ,M‘*V “ »><• made that omaiui n" /Vt u ^rWh0,‘ thCrt* «“ " don’t know I b fore wo comineiieed ; lenced, or befor" S“ ,0,,t tl,u <»"e wo com- ■ essioa that I can look it 1 h“v" ,m' sxt session ^which 'will h "u n"d bri“«,t“t the two o’clock ,*.>,.? a br Mnrch 28tl,» • O-1 Idlin' b0"gl,t ,his s,ock i[ the share for itV ‘ 1 ers,stei1 111 asking a dollar 1538 Hugh M Fnaaton 211 Mr. Hicks : Objected to upon the ground 631 that the question is hypothetical ; witness is not required to express opinions. A. I think eventually that I would. Q- It- What do you moan by “eventually? A. Well, I think that there was no market for the stock at the time and I had it in view, and would have been more anxious to gut it even at a good deal higher price later on j I am quite sureof that. Q. to. Hu tat the time you bought it, about what would you have given for it; would you have gone as high as 50 cents a share. A. I think I would if I was trying to get it. Q. 40. When you sold this stock,- was there any 632 considerable negotiation about the price? A. No, Q. 47. Weren’t you offered 50 cents a share for it? A. I do not recollect anything like that. Q. 48. Perhaps the letter which I show you will refresli your recollection on this point? (Counsel hands letter to witness.) A. 1 find that I was offered 50 ceuts a share for Q. 40. And yon thought this not a very good price? A. I don’t know that I gave it a great deal of thought; I made up my mind that I would ask a dollar for it, and got it; I think that is the way 033 Q. 50. When was it that you sold the stock? A. Shortly after September 20, 1002. Q. 51. This you ascertained from the letter which I have just shown you? A. Yes. Mr. Hicks: Complainant’s counsel admits that the 00 shares of stock bought by Major Fnnston from the 11. G. Dun estate was bought by him in the Spring of 1001, subject to cor¬ rection as to this date, if the witness subse¬ quently finds that the date is incorrect; but complainant’s counsel objects to the entire east*. ' ■' ,lll, ,nK "|,°" 1,10 in this (Diivn examination closed.) ('ross-c.riimhiiilion by Mr. Hicks : is L'onimlliJ !"v ' !'rkf ,’,,om>grnph Coinpnnv September 21 .L.-V r1" (Uo.,,,J’!,"-v? O" c;ir» of the company. ’ L'u(:tu(l ' “■•c-President ■» «*« ..r ,i,„ • ti.. .'iiFnir. i, . . ^zrz'Tm°' pany been in ^Ku'u-r-iV0 'I11111 or 0f the com- A. Yes B 'Lnii ,;lli,,Ku of the company? OiiO chi^?fi7;v'^";^™ 1*«« been i„ genera, orifcdnally Kvnms was ii,’ cj," ^raon ",l thu ti,n°i Person or oflieer'has ‘been l!','11,,18 tl"'t so",e 0,10 J*r- Buckingham.: Objected in „u i ,- A.~Yes.t00 ,m,ch eaienhited to coach°the witness! been taken solely <',° ' '* !’y 1,1 1 '"y, has Board of Trustees, iL-,,'.' to 1,10 “etion of the *-Q. CO. Since lee l!U,t corre^? A. Yes. '^toyonrkno,,^;^;!’0.01’ **«• ta" h ’ Uvv thero not, frequent 213 1540 Hugh M Funstoa. sales of stock of complainant, Non- York Phono- 037 graph Company? A. Yes. x-Q. 01. What is the highest price at which stock of Now York Phonograph Company has, since the Spring of 1001, been quoted? A. It lias been quoted at 20 “ bid " and 25 “asked.” x-Q. 02. That is for each share having a par value of $100. A. Yes. x-Q. 03. State what you know of the sales of stock of New York Phonograph Company since the Spring of 1901, and the prices at which the stock has been sold, and who the purchasers have been? A. I know that the stock was sold for it dollar, and then a largo lot of it was sold 038 for— I never could find out exactly whether it was $2.00 or $2. B0 a share, but it was about that, because I know I wanted to buy it myself, and originally could have bought it for about what I bought this stock from Dan’s man, but I was not in condition to buy it.' Our opponents bought it; they bought it for about $2.00. Some peoplo bought it for$2.B0 at auction, and then it went up to $5.00 and $0.00 a share, and then I know of some being sold at $10.00 a share, and one of the last sales that I heard of really de /ado, was a sale of $15.00 per share. x-Q. 04. Now, by whom were these purchasers of 039 of stock to which you have referred made? A. By the Edison syndicate — in their interest. x-Q. 05. State who composed the Edison syndi¬ cate or the persons purchasing in the Edison in¬ terest? A. They have made most of their pur¬ chases through a man named McCoy who solicited the stock and was energetic in buying it. x-Q. 00. To whom was most of the stock pur¬ chased, in the interest, transferred? A. To Mr. Helm. x-Q. 07. Were you present at the election of the Board of Trustees of tho New York Phonograph Has p refit'll l in’ 1001 |>„t •vQ. OK. |)„ you know whellier nn effort win ! "’[ Iu"t|,,i": 1 of ,lmst‘ ‘wo el | s to I | CI)I1; wlon? A Vel,l’^;r''S in Mr. |)rior l|„(i||,.'l!<|,n l..v",l l5'i10"' °r '"i made just [ thu of Trustees in Februnrv Him inni Sll"rus of 8 took 'for the AQi 1UI;J,T y°" know 'bat offer? A |k "; |".!mrl holding it so slated it. A. |l^i“ ,U Pnr,y ,,oWi«W «>•« -lock? K" Y'rt A ’.QNo1,'siJr.,<1 Mr' U,'Vis "ccul,t til o Offer? made? 'a NV^VT’" !? "'hom ll*o offer was think it was i, tlie Kill “".M "!,sily »"™ri»i„. I \ Q 7 r , . h,l,so" 'merest. by" .loll,, jj 2!Z'Tl ll,,! olTt>r "Hole of §5,000, ready ,0,1. d" ,l'r"',,'7iee to sell- "l*o have been npm-mel. T? "U,u ",u « '"""ber itiid offered Slo a slem i*' 1,10 Ktl|so" people x.Q. 77. Do ‘ , °r ",uir stock. ' New York 1’lio‘aognmh",. "f '"'y 8to,;kll"lders of b 1)11 Oon'pany who within the w 1542 Hugh M Funston. x-Q- past two years, and prior to the last two elections 043 of the Hoard of Trustees, who have not been approached in the interest of National Phonograph Company and Mr. Edison, and requested to sell their stock? A. I do not. x-Q. 78. Isn’t it the fact, as far as you know, tlint every stockholder of Now York Phonograph Company has been requested to sell his stock in the interest of National Phonograph Company, this defendant, and its co-defendants? A. It is a fact. x-Q. 70. Tsn’t it a fact to your knowledge, that the majority of stockholders of the New York Phonograph Company have refused to sell their stock to persons endeavoring to buy it in the inter- 644 est of National Phonograph Company and Mr. Edison? A. Yes. x-Q. 80. You say that the persons who have been chielly active in endeavoring to purchase stock of the New York Phonograph Company in the inter¬ est of defendants in this suit have been McCoy and Helm. Now, I ask you if McCoy has not made almost daily and weekly visits to the stockholders of the New York Phonograph Company, and to the office of thu New York Phonograph Company, while engaged in that business. A. Yes. x-Q. 81. If the rights of the New York Phono¬ graph Company of the State of New York, under 6415 the patents of Thomas A. Edson, relating to the phonograph can be enforced, would the stock of Now York Phonograph Company in your opinion have any considerable value? A. Yes. x-Q. 82. If those rights cannot be enforced, and are infringed upon by the defendants in this suit, can the stock of New York Phonograph Company in your opinion have any considerable value? A. No, sir. x-Q. 83. In your opinion, was not the cause why stock of Now York Phonograph Company was . . ,0"’ liK,,ro i« file Spring of had invn lLluIi , S,' "’ ><* this |llfrill ' , ' . ,!or>' ,,f 11,0 State of New few York PI, , , ' "I'0'* the rights «*««-»• if complainant’s Prw*«H»«t . 1 wHiiisi*i would place his .state noil.ing. unsweied can amount to t1 ^ pmna as a witness 1 . 1 "0,,ncB‘1 .sub- Hi it he 1ms in no wav I f 'luf<-*'i(lanti verse to fi4if . i tt%' s*,ou'« himself to head* asked of the witness •ir'".1 tlml 1,10 cl,,estio"s the irrelevant a„t, r" ,*; "T“Py »' hi which counsel for l r* l.lrec*' exni,,hmtion Mr. Buck ^ u,1l>aged. jeettoanv i„r •' x,t*f“"dants do not ob- >l« U* “E, U“‘ sUlt' 0 ts , t ., 1 101 fact to such to make, it js . . '-°"l|sel may wisli > 2nfttfr^"51S1n"",l.ly “"d as co"ciso as *y the value of the sto..,f * 3r°"r will de¬ ice dm value of tke stock °r co",l,,"'l>«nt,or on- i * Wonogmpk Company ; ehkn "t|liS0 the stock? A. Well, I really needed the money, and I was selling securities and had an oiler for that and I sold it, assuming purhaps that it was the best I could do. x-Q. 88. Was your stile of tho stock at that time in any way induced because of any unfavorable opinion which you may have held in regard to the eventual enforcement of tke rights of New York Phonograph Company in this suit? A. No, sir, I do not think it was. x-Q. 80. Have you ever held any such unfavor¬ able opinion? A. No. 051 Jie-ilirecl examination by Mr. Buckingham : K.-D. Q. 00. Now, as a matter of fact, was not this New York Phonograph Company in 1001 , when you bought the It. G. Bun stock for 25 cents per share, as dead as the proverbial door nail ? A. I don’t think it was; we were a company yet; we had our ollicc and were ready to do business. It.-D. Q. 01. There were a few sparks of life left in it, orutleastto the extent of 25 cents per share, us you thought? Mr. Hicks: Question is objected to as leading, witness not being adverse, and as R.-D. Q. 09. Who lumped you to purchase the 00 IBC shares of stock which you purchased of the R G Dun estate at 2a cents a share? A. Why, t think it was McCoy that I sent around there; lie was in our employ at the time, and lie told mu that it could ho bought, I think, at fit) cents, and lie told me to offer 25 cents; that is as [ remember it; it took some time to get it, I know; two or three months, I think. R.-D. Q. 100. That is to say, the Dun estate held olT for two or three months? A. Ves, they held oil. R.-I). Q. 101. They wanted 50 cents a share? A. Yes. 350 R.-D. Q. 102. And you wouldn’tgive them more than 25 cents. A. No. R.-D. Q. 10.1. You have given some picturesque figures for the price of this New York Phonograph Company stock in cross-examination, namely $10, $lf>, $20 and $29 per share. How does it happen if these good prices were going, that you didn’t get something of the kind for your own holdings? A. At the time that I bought it I do not suppose I could have gotten what I paid for it, I do not sup- pposo T could have speculated in it. It was a new thingwhen I bought that stock. If it had been later ou — if we had proceeded with our suits and been 057 successful, as we were in overruling the demurrers, &c., of the Edison people, why the stock would have gone up naturally. They saw, I suppose, that we were getting the best of them, and were trying to acquires majority of thestock; naturally that put the price of stock up. R.-D. Q. lo-l. But you held your stock from the Spring of 1901 until shortly after September 20, 1892. Do you mean to say that these big figures for the stock were to be had at any time prior to September 2(i, 1902? A. No, sir. R.-D. Q. 105. A dollar a share was the best that ,m,,K McCoy had bought KOIIIO for fifty ccnls share. It was nftcr that it went up. H.-l). Q. loti. About when wore the.su largo prim bail? A. Mostly just previous to— the latter price part of last year and the first part of this voar th l"Kli prices were gotten. K.-J). Q. 107 Yon not suppose that ii Urn making of these large prices there was what i popularly called “ washing of stock ” ? \ \o ;lo..;t think so; 1,11.1 not „ . . anything of th’a, H.-l). Q. 108. Do you know of any iiarticul'ii reason for this large nti.se in the price of the New 1 1 l,0,ioftriiph Company stock? A. J shouhl nter'st |' "•“■ “ <>' the Edison ... est tlcsinug K,t the majority of the stock •o tli.it they could control, and that was the main anise of its going up. .eopie'l'nvo c-i7.'l !*"' "'',y “ho“,', hhlisoi. took when !i t " i !’ ,Wy l,lrK° f°r this or twenti II, ‘‘l< K'L'" k,ck,n« al'0"t Hie street A. Several “•.'■|Lrs-in 1SlmrL‘ f"r SUVL‘ral -v,‘ars? even | Y r ‘ ° ,lot kno"‘ “bout the . >e New" Y«.rlcU3|»r",V0 <'°,,tro1 of the affairs of H- 1 Q 1 Company? A. Yes. a. orH . , ; • was lhis aotive ■»t of tlm'eonipa'ny.'"18 Kva"‘'- 11,0 l'r,‘si‘ K.-D. Q. Ijo \\r„ -j* mpanv? A~*y!wS wv®r president of the ir secretary ‘ ' ’ af‘«r»ards Mr. A tide..., a. Sot livu imrt! h',. . °,.lri "JS t’l,; t»oaH ; In, took tliu 1 “t dul a huge portion of the work H.-l). Q. 114. Now, do you know that there was over a luma lido sale of this New York Phono¬ graph Company stock, after 1001, at a price of $2f>, §10 or $10 a share? A. I know that there was a sale; have it. in mind now, of one at $3.00; the cash was paid for it, and I do know positively that there is no question about it where the money was offered at $10. H.-l). Q. Ilf). Did the gentlemen who owned this stock offenit to himsolf? A. No. K.-D. Q. 110. How do you know? A. Because he is a member of the society that I am, and that wo do not lio ; that is one of the tenets of ourorder. K.-D. Q. 117. How do you know that any of 00" this stock was bought by what you are pleased to term the “ Edison interest.” Is this merely your surmise, or do you know? A. I know it from the fact that the attorney of Mr. Edison, Mr. Helm, brings the stock in or sends it in ; that he buys and has it transferred to him. And the reason I hesitated about answering it is, that I could not ho supposed to know that he handed that over to Mr. Edison; we have got to surmise that. 11. -D. Q. 118. Hut Mr. Helm may, like yourself, have been of a .speculative turn? A. I do not know anything about that. „ H.-l). Q. 110. You do not just know whether Mr. Helm was speculating for himself, or whether he was turning it over to the “ Edison interest”? A. Jle was voting in the Edison interest that stock at our annual meeting. K.-D. Q. 120. While you were holding yourstock speculatively, how did you vote yourself, for the Edison interest or New York Phonograph Com¬ pany’s interest? A. It was the lust meetings there— I do not know how it was, I gave it to Evans, he had charge of that at the meetings, and I never paid much attention as to how it was voted ; I sup- nose it was voted in our own interest. 0“ R-1Vi121- -1.1 your Mock, did f°." ''Js':uul "l!" 11 "il!i Kum« to thu •* I&lisou interest”? A. No, I did dot',1 1 Q- '-‘r To 'v,mm 111,1 -vo" -11 11? A. i ao not know, I gave it to McCoy mid lie gave „,e the money for it. R-l). Q. 123. Yon thought McCoy might have been speculating likeyonr.self? A. Yes, I thought so he had other stock and outside securities, and e .anted me to see if I could get him any out- side securities— spoke of it. thf/iV*- 1 * 1 ' 'otl 1,0 1,01 •tnou‘ exactly then Ocn that McCoy was buying stock for the •• Edison in- ?„ A- Not '''"il later, I did later. K-l). Q. 125. What were the resources of the snarit . »«,„ ,, i,„i e„;“r" . . tl,“’ **• ■-.in 7T; Th“"",l“ attend to. good do‘l1 of that to not propose i-uydM ii“ do, instead of assuming things contrary to fact and trying to got the witness to admit them. Mr. liuckinyham : Complainant’s counsel should not coach thu witness. The next time that he wishes to enter an objection of this kind lie is requested to do so by written slip. A. We proposed to go in business again under our contract. K.-T). Q. 128. Did you hove in view the raising of capital to do this business ? A. There was no par¬ ticular necessity for capital; if we succeeded wo would put ourselves right to business ngaiu; Mr. Edison would have had to furnish tlio goods, and we could have gone right on in business; that is the way we assumed it would terminate. W e did of business without results. R.-l). Q. 121). But there was no one thing that the New York Phonograph Company was engaged in during your presidential term, except the prose¬ cution of this suit, was there V A. Not ns a com¬ pany that 1 remember. {e-cross examination — by Mr. Ilichs: It -C O 1110. For the purpose of refreshing our recollection, will you look at the Minute look and see whether New York P honog. ap h lompany was not engaged in attempting to es- nblish phonograph agencies throughout the late in the year 11)01 ? (Witness ' ite Book). A. Yes, I know we made an ;ot goods from Mr. Edison, and sent an older rhicli he declined to Hll. It P G 131 That is not what 1 asked jou, i ocal agents for it to deal in phonographs and sup^ iVourS STStauti Book to 'refresh vof-nllection ? A. Yes. 070 K- Q. i:»3. Wlini did (I,,, v.,,v y . Kr;1I>h Company I,, il,,. v,..„. , ,k. 1 ,lonn nosu ? v, ' | . 1 (l° f°r that pur Wo worn i •' ' ,;i • recollect „„,v busing r,!;/ f«*- *|«!|elH to ,,0 amount of tlioir sales AutmUnV to ll‘e do Imsiness. " ' t,lum pormission to hasN.ovVoru’i 1,1 lo mniiufneturing, a contract , h 1 1 C "l»«y rocentlv made s"i>i»iies wi„, i„ rc^rv01, ,.:hon;,«ra"h contract? Nacrtli;;!^^11 v,itmP,,r|,0S0 of t,"lt «»"• and Jjeu» 1 honograph whether those efforts w, 01 ^‘d you know representations with ref,., ncco,n»M"i«« with any «“» of this suit, orwtfrr ^ U‘U ,l,“con‘,"“- of any suit against H,» ,fu''0,.lce to ‘ho bringing ‘ C°H-d"q ;J0 1 1,0 ki,ow.nCUn Gra,,1,°I,h0"u McCoy 'sent Zlcvn "’!,?lhur »«•« and ^ork Phonograph Con.pa, r,',0fhrol‘lers of that they did; I have iL.V.i A* 1 do ,lot know soon letters that McC„y J J Ue^y-l have holders; have read soiiiVnf , t0 the stock¬ mans’. ,H0 of the Jetters-none of asn R.-C. Q. MO. Wlto ptirclinsed the Mntthiesen 073 stock? A. The Kdisoli interest. it.-C. Q. Ml. Do you know when they pur- purchtised it? A. No, some lime ago. R.-C. Q. M2. Wasn’t it just prior to one of the annual elections of New York Phonograph Com¬ pany? A. It must have beetf prior. Prior to the previous election; it must have been in I ODD, prior to February, 100H. R.-C. Q. Mil. To whom was the Mntthiesen stock transferred? A. .John K. Helm. Further re-direct examination by Mr. Bucking¬ ham: 074 R.-D. Q. 1-M. You say that at some ti mo after you became acquainted with the affairs of the Now York Phonograph Company it was proparing to go into tlte business. What did you do otherwise than to send out circulars threatening phonograph dealers, and calling upon them to pay royalty? A. Tlte business of the oliice was to keep things in shape in our various suits, and also the circulariz¬ ing of the stockholders, showing them in what condition we stood at that date, whatever it might be. ,1/r. Hicks: The question is objected to upon the ground that the witness has not said that New York Phonograph Company sent out circulars threatening dealers. Mr. Buckingham: Complainant’s counsel is again requested to make these objections out of the hearing of the witness. Mr. Hicks: Defendant’s counsel is requested to keep to the record. R.-D. Q. Mo. But you were threatening the phonograph dealers with circulars, weren’t you, at that time? A. We didn’t consider it as a threat, we considered wliut we were doing what we actually should do for our stockholders. , . . . . . iiu«inosH was l SmJ“ ,n^,‘l|»« inil? '"a. ' ,.l,,1mt would ,i„ „„,|W0 ,1!I(I done. " " ° n|> OI,r ,"""ls l,ufori‘ that lmd lx wen, win' ° •slooltl,,,l,|'!r.s. Th,.^. ietu thoyy A. | hell °f S“,uk’ 'V,! ]{.-]). Q j.-,. they were. general wjv 1 to these letters in yon. offering von'r n"'^ l° 11,0 °"c‘ ",al he " r<‘ ^.en,U,rV7oSr^^. for yonr slot No, I did not refer to that. ’ S0,”'! 8i,,CB lba ^joorned *'" »imn Mr! “PI*oinle.1 hy H..C. Q. :i! ,T ’ : ' °r “'»“«» llmi lime. 1,00,5 or comptai,;^0 ^“S:1 la"r0,,,py ■ in 1,10 Uln.Ua of Mr. Kiclmrtl Townlev it ?!r<-‘lu"L'u to *•!*« dentil “,,!lur 'lute of Mnv H ZT A‘ . Ytt* 1 1111(1 l!|il.v called. Ii(.|,| ... ,V ’ b ,0’ a sPocml meeting "■ H dm s, iCv!! ^ °"iw’ l»n*e"t, Heading 0r the minute o^S^L'!"'' tf,?«or>'- "■ dispensed with , , 1,10 I,ro' 'oils minutea tl,u 'lealli or Mr 11 r it ■ ‘ °nt 1,!'i,IU!i nnnounced «-C. Q. 303. ' April 3| 1800. tnry or New York IM,,..’ * r- Haines seere- '"ne or his death9 a 7Pa|,h c'°mpnny at tho treasurer hoth. ‘ u W!,s secretary and ]>V you in vollr'a^swe!0," °f *7b,'"!"T 10,1800, o secretary to wrf tj to M ° r,Q‘ 2°°’ i,MrM l 11 " !»■« or the duty of Vi, °",as A- letters written by him on bill „ *7^’ lo coW If of tho com imny i 556 William Fahnestock A. It was. i U-C. Q. HOr,. Have you the letter book of New York Phonognipli Company present? A. 1 have. H-C. Q. 1100. Do you find that on February 10, 1800, ami February 31. 1800, Mr. It. T. Haines ■opied in said letter book any letters? A. On February 10, 1800, lie did, and also on February 11, 1800. Jt-C. Q. 807. What were those letters? A. Wit¬ less reads from letter book). February 10, 1800, utter reads as follows: “ Thomas A. Edison, Esq., Orange, N. J. . (j DkakSiu: At a meeting of the New York Phonograph Company, hold this day, the secretary was instructed to congratulate you upon acquiring the assets of the North American Phonograph Company, and to assure you of tho interest of our company in your success aiul in our own, both of which we believe will be greatly bene¬ fited by your purchase. Tho secretary is fur¬ ther instructed to ask you to give instruction that no phonographs or supplies be sold or de¬ livered for use in Now York, except through our company. A committee from our com- y, pany will call upon you at your early con¬ venience if you will name a day agreeable to Vlso on February 21, 1SD0, as follows: “Thomas A. Edison, Esq., Orange, N. .1. 11 1: a n Mu. Edison: Will you kindly appoint an afteri za, . "7,,:::):!. ™ " illi best regards, [ nillj Yours truly, ItlCIIAIil) Towm.kv Haines, Secretary.” niituut nfN.Mr^n'luM S!'i ",,(1 I tlo not re- ■my action r “ ^pointed ever took ■'•t that time. Mr' %«r or anybody t-lsu A. 1 Im^'1 oftyn v j’,01', '"L‘li1t Mr' K 000 fer Mr. R.-C. Q. .103 K "ot ,t0 »y recollection. mil tee appointed February 10, 181)0, made any re- 001 port as a result of a conference with Mr. Edison or with Mr. Dyer, or as a result of any other thing that committee did? A. There seems to be noth- R.-C. Q. 101. Deferring to those minute books, do you lind that either the stockholders of New York Phonograph Company or the Board of Trustees or the executive committee of the com¬ pany took any action authorizing any oliicer or other person or agent of the company to oiler for sale the rights or franchises of the company within the State of New York? A. No. H.-C. Q. -105. Did you in 1800, or did the com- 002 mitteo consisting of yourself and Messrs. John P. Haines and Richard T. Ilaincs, otrer to sell to anybody the rights and franchises of New York Phonogaph Company within the State of New York? A. I never heard of any such oiler. H.-C. Q. -100. Did you ever hear of any offer made by or on behalf of the company to sell in 1800 any right of the company? A. Never. H.-C. Q. -107. And particularly did you ever hear or know of any offer to sell any right of the company made to Mr. Richard N. Dyer or the National Phonograph Company or Mr. Thomas A. Edison? A. No, I never heard of any. 090 H.-C. Q. 408. Did you. or tliu committee ap¬ pointed in 1800, confer with Mr. Adolph L. Pin- coffs? A. I never remember having had a confer¬ ence with Mr. Pincoffs on this subject at all. I have tried to remember what Mr. Piucolls looks like and I am not able to recall his appearance, ; although I have often hoard his name. H.-C. Q. 400. Hu vo you any recollection of ever having met and conversed with Mr. Pincoffs? A. If 1 have ever met him, it was only just casu¬ ally. I never had any conversation » .tl. hi.... R.-C. Q. 410. Cat) you describe the personal j appearance of Mr. Pincoffs? A. I caauot. II ISMS „ , "I’l’Minlud on January r.'f. rLn.r.' , , of ’»«'««»: now, with vou lh M, H In 1808, ,lo ^1.!: «l:;^v,nr,,v;rk-,;f n,!w v,,,k holders, hoard "of ,„is J TV’' ,".0,:k- of Hi,. a,lv or ., , , "Vu uo,m"l|l''e company 10 sell or t<‘, r ' "r. ngonl of tllu fenhe, ' IMiviL,. r v [‘,r Sill« any right or Company? There was no ' ' °rk 1>l,Hn,,f>r!lP*> » ? £ privilege of vLf ‘‘"y fni"chis„ or A. l did not honogruph Company? <«> 189(1 nnd^iso 81**1, kll^.?J,*,!'?,,^y " reference comn»i(t»*u.s of wliidi . . lw*ere,,c« to rlio two or t lie commit, *es mnku'-inv • ^ " ,n ,li,l you A- Edison or to A I,;' ° T1"®1 to A,r- Tliornn. National IMtoLmn,. n ^ N* ,,yur> or *«> ««» l»«o„ , , V 1 ^mpany.or to any other of NetWork I’homJra'oh' pS °r l,rlvl,eff° 000 Ijy them or by .„,y ‘ Company be purchased a.VK's:'-*- other writing coned,,!... , u,! n,,i‘ letter or never did; I don't ** S‘,fc ‘ " reess of A. Never to ,»y k»mrlea^°a°Bnph 8UM»,to? ' ' ^ 117< JJid New York Phonograph Com- 1560 William Fabnastook R-C.Q. jinny in 1800 desire to go into the business of 007 handling phonographs and phonograph supplies? A. That has been the only desire of the company ever since I have hud anything to do with it, and it still exists to day. K.-C. Q. 418. Did New York Phonograph Com- pany in 18118 desire to g» into the business of handling phonographs and supplies? A. It did. H.-C. Q. 4111. Did it make any refusal so to do in 18118? A. Never. It.-C. Q, 420. Was New York Phonograph Com¬ pany in 1898 willing to enter into business of hand¬ ling phonographs mid phonograph supplies within die State of New York upon the same basis as, or 898 in competition with any other dealer within the State of New York? A. No, it was not; ami I told Mr. Kdison that we were doing business as any other agent, hut claimed that we, having paid him a large amount, was entitled to some con¬ sideration. It.-C. Q. 421. Did you act as sj I tie ill 1890 or in 1898, of either committee appointed by the Phonograph Company, to consult with Mr. Kdison, either in conference with Mr. Richard N. Dyer or with any other person? A. No, I never was spokesman at any meeting. R.-C. Q. 42:1. Rid you or the members of either 099 of said two committees, either in 1S90 or 1S9S, state to Mr. Dyer, Mr. Edison, or anybody else, that tlio New York Phonograph Company had no money or no capital on which to run a business, or no organization for handling of the business? A. \Ve did not. R-C. Q. 429. When you met Mr. Dyer ill 1898, was any reference made to a prior conference with him held in 189(1? A. Not to my knowledge, I do not believe there was any conference in 1890. R.-C. Q. 424. Did the negotiations of 1898, car¬ ried on between the committee of New York WjlLiam Fahnv ti-C fled ii | in iwil til ■!•> business ns other ngeiiis- ..... . . K,,i""»“W 1.UW0U!,. Wt. ' , " f ,,,! 101,1 ,ls "•» con lit sue him if A. CUrt:,inly.UK<,,"fe,,"t0 bu>ine“ Bt llwl «"•«■ have hi vLv'!!ivI,i,'.1 11,0 or the committee so, statu tin. ° T'a Ut '‘",l if object thW 0l,JUl:t? A’ Wo had no other Thomas A Kiu,mnl N- <* Mr. Edison o, ihu S,,n, "f lM!nm Mr. statu to vou or t„.u . .. . I,w,.,,,8r"l»h Company, over a member, I t "h K i °f wh,eh -V0" «raph co,;,,*;: . . “r iw York Phonountil. t v" “ "°"ltl Protect Now X?*;: i l]Mtru^y To r With tile invunUons1,1',! ?,,,>1>h°8 ""ul° accordance locals or ThomT P^>r°VUmu,,tM> °r «».ler the i\uw Vork? A Thu’v 'rT"’ W,tl,ln tho StIll« of Ctcy emphasized tho fnet'thut’tV °" "'V contr,,r-v> ognize the right. 1 1 1 1 ,u-v 'vo,lli* »<'t rec- M^HlthQ,oH5wiuSr\Adol!,h L- Pi"coirs over iSOC or 1898? A 1 committees appointed in Mr. Jessup was , ,ever8«w •'■»* in 1800 orlSOS, o meeting at Orange 235 It.-C. Q. -120. In 1808 did the committee ap. 703 pointed in that year statu to Mr. Dyer or to any- Imily else, that now that the National Phonograph (’"in patty had made a success of the phonograph business, they thought Mr. Edison should recon¬ sider his refusal to purchase the rights of the New York Phonograph Company, or words to that effect ? A. \Ve never said anything of the kind. It. C. (J. 430. Did Mr. Dyer in 1808, tell you or the commit tee of which you were a member in that year, that Mr. Edison's views regarding the pur¬ chase of the alleged rights of the New York Pho- nograph Company which Mr. Dyer had given them in 1800 had not changed, and that he didn’t care 704 to make the purchase? A. I do not remember anything of the kind. It. C. Q. 431. In 1808, did you or the committee urge upon Mr. Dyer that he should again see Mr. I'Misoa and endeavor to get him to reconsider his determination not to purchase such rights as New York Phonograph Company had? A. We did not. Most of the time we discussed how much money it would take to sue Mr. Edison; they decided that it would cost $18,000 to sue Mr. Edison, and Mr. \ Dyer told us that we had a first-rate case and were buncoed and he thought we might win. It.-C. CJ. 432. Has Mr. Thomas A. Edison or the 70a National Phonograph Company, or any other person, claiming to he the successor of the North American Phonograph Company, including Fred¬ erick P. Ott, ever notified New York Phonograph Company that a demand for phonographs ami sup- lilies existed in tho Slate of New 'iork at any time since April I, 1805, or prior thereto, anil requested New York Phonograph Company to supply such demand? A. Never. It.-C. Q. 433. In your answer to x.-Q. 240, you state that you remember that New York Phono¬ graph Company did business in some machines "if"1"* 10 mind in v m’p " ' ! , ■VO" S"",! w,ml you \nur suid answer? A. 1801. vi Y,iMiMArojr"" , r , 1 Company, I,.,),] f()I ' " . "f boards or trustees l ,iii; Ju!,l «-C.(i ,:,5. Will yoll whn \ i,,!1; tUv *tn^* y[ ? A ' y^' U’!ls l,"-‘rua contest in Februi :r“' . sjr . 'em, Funston, H A’ Jlussrs- Cowl uestock. ",us> IJo««*nu, Slater at C. Q. •).)!). How many votes won l! tr"st««s then elected ® ,°,u ,cast r< otes east was Hi ’no r , 1,10 'otal numb, ho ticket ti,a, w-'s V °>9*' "«"* «u on ticket. UCte,,> a,1’ tha« "*al esti>* February, 10W?^.^,,,"1tl,° WjlLiam Fahnestock R.-C. Q. .141. Who were the nominees in the 700 lid i. son interest to whom von refer? A. John li. Helm, John U. Martin, Scott Tremain, William II. Markgraf, S. K. Jacques, Ford Holt and Joseph F. McCoy. H.-C. Q. ‘M2. Do yon know for how long a time Ford Holt line! been a stockholder of New York Phonograph Company prior to the election of Feb¬ ruary, 100-1? A. I should say about two weeks ; I do not know just what time. H.-C. Q. *M8. Do you know of any action taken by Ford Holt against you and New York Phono¬ graph Company just prior to the election of Feb¬ ruary, 1001? A. I do. It was on the Saturday 710 previous to tile election. H.-C. Q. -Ml. Was Unit Saturday, January 80, 1001? A. It was. R.C. Q. -MB. What occurred on that date? A. Mr. Holt was knocked out in an injunction in an attempt to enjoin me from voting on 1,017 shares of stock. H.-C. Q. -MO. Now, on the Monday following that Saturday, namely on February 1, 190-1, was any motion made on behalf of National Phono¬ graph Company to enjoin New York Phonograph Company from voting upon the same 1,017 shares of stock, at the election of February, 190-1? 711 A. There was, and this was argued before Judge Bischoflf with the same result. K.-C. Q. 4*17. Do you know who appeared as counsel for said Ford Holt and for said National Phonograph Company upon the said two motions? A. J. Adriance Hush. H.-C. Q. 4-18. And that is the same J. Adrinnco Busli who has appeared as counsel for defendant National Phonograph Company in this suit? R.-C. Q. 449. Was tho election held on Febru¬ ary 2, 100-1, tho day following tho motion before Judge Bischolf? A. It was. WilLiam Fahnai K-C. . ’ ' , , . ' 1 ° Know who) her the 7.ir ■ ; lz;;Zu^r nr : K" dilvor "Z ST!r °r two stork upon which Hint number of vote* wore* r-usl . . wnil-u',1," r"1' ‘ 1,|,',''",,'S|.'- pratik-il />,irto to one >•»» »..» ,ii„w „„ i1 ^:;:s"t,urr,,y' ,u" case‘s, l»r«v.„,.sly granted? A. The the compa!^ J<1 an*1 ilWiU' tluci‘l«' «" favor of the Appt^hio'ijjvi' I'* ’«* "Pp,!al lako" ljotl‘ to Snprene Command “I’’ ^T’0"'1 ,)*fl’nrtmetit uf tlm Nelvork? a. u1w!"itl,u »' Appeals of kySrnm," rim 7 '?'>thw ,,Wl s,,it liseoniiniied? A , ,,s ‘ ““.'.‘"W or b““ H.-C. Q. .ir, j u’l, T' 'H-seontiniied. ;°a, t of Appeals, if yo.:'kHowv T 1,1 11 *ln Hilary, 1 00*1 . * '* J^gnwl lion t Q lop examination, at etween New' Vorlc' l*'i" ,‘' n!'• Ne» York iZlZZ * 0aU,n <*»»I»ny “« "’ketlieryoa knS^"'^ N°". jainst Leeds & Gatlin ?• ‘ s",t “•‘milts brought int. National Phonograph Company, or tliu Edi- son Phonograph Company, against Leeds & Gatlin Company, upon the Imsis of any patents issued to Thomas* A. Edison? A. My recollection is that there were four suits brought against the l/ieds & Gatlin Company. H.-C. Q. -150. Have you seen the original papers served in those four suits? A. I have. H.-C. Q. 107. Will you briefly describe upon what letters-patent each of the said four suits was brought, and what was the day of appear¬ ance mentioned in the subpiuna of each suit? A. Suit No. 8500 was brought on letters-patent 3M3-1I8 and 882402, issued on the 8th day of 710 May, 1S88, granting to Thomas A. Edison, his heirs or assigns, for the term of seventeen years the full and exclusive right to make, use and vend the said invention throughout the United States and territories thereof, as by reference to said letters- patent and a duly authenticated copy thereof. H.-C. Q. 458. How is the invention set forth in Letters' Patent 882418 described? A. Now and useful improvements in phonograph blanks. It -U Q 450. Ami how is tho invention set forth in Letters Patent No. 882402 described ? A. New and useful improvements in phonograph ^ k'll.-C. Q. 400. Referring to the subpamn in suit No. 8500, was the return day the Hist Monday of November, 1003? A. It was. R.-C. Q. 401. Now, referring to the subpoona m the bill of complaint in suit No 8o l7, upon » hat patent was that suit brought? A. Patent No. 71R.°C. Q. 402. Issued to whom, and at what ditto and for what length of time, as a ef5®‘ of complaint? A. Issued to Edison, Noiembu U, 1002, for seventeen years. Letters .him’ *?' " ,l"sr,'il,,>'1 *" l*IH Of com. in Hi.. .. . w ' r , l1.""'!""1 "wr"1 improvements H C pidmogrums. . li-r-miiK lo mil.pimm, the return ^Ivember/'iuo:!!' wa«‘il no?? J”1 Mo"',a.v «f Jt !l""',,l'u tl,,! complainants in •uni |>| A' h, 'su" ,,||onoyrapli Company , ' ,wl 1 l*«,*io^rn.pI, Company. suit No/srlr’ Ar‘ vll,’""S t,"J complainant in j)anv ’ *' ^at,l)nnl Phonograph Com- 710 an^or'llt Nu- 6m> kindly A.T'ih .si'.i, was liro ugh i 'o u'Ta'uu rs' Pa to if t No ■ ll"'s s,,it is iV"tiom,i No- Kili-son on tl.VfMhm'n?" to T,l0"'ua A. teen years , . • ' ul,n,aO’’ 1001, for seven- 30 meats in "^fnl improve- recortLs. The i-etuim'day of'the w''1' 1,10 of tile four 'sails'' *''! "Vrw l'K* "us it not? injunction’ reltnin!!!1 !? *"ch of tho four suits an w selling tli0ei„,vet‘[U,,’ iM January, Idol, when ";1S "1,!d’ nnd *"re 1,10 «'"« i t t.tel » wore “ magnates ” of the company at that time, were they not? A. Yes, they were, 727 except Mint they wore not large owners. R-B. Q. 483. How largo were their holdings, if you know? A. Evans had one share at the election in 1003; ho claimed to have 18, but only had one; lie first tried, to my recollection, to vote 18 shares, and I think lie only had one. R.-D. Q. 484. And how large was Major Funs- ton’s holdings in the Spring of 1001? A. I could not answer that. R.-D. Q. 4815. Do you think he had more than otto share? A. I don’t believe lie' had much. R.-D. Q. 480. You know that later on the Major speculated in the stock, having purchased a 728 lot for 23 cents per share, but you think at the time this suit was brought lie had only about one share? A. I think lie was not a very large holder. jjfr. /Ticks: Complainant’s counsel objects to the method of examination, which consists in attempting to force words into the mouth of the witness, and requests defendant’s wit¬ ness to state tile facts in regard to the matters about which lie is interrogated; and com¬ plainant’s counsel gives notice that if the present method of examination is continued, lie will interpose appropriate objections thereto. 720 R.-D. Q. 487. Mow about the holdings of Mr. Scott Trcuiiiin, do you think they were above one share when this suit was brought? A. I do not know. U.-D. Q. 488. What would you guess about it? A. I have no knowledge; I might say that the number of shares that these people hud did not iutercst me at all. L was told that the suit was being brought and I readily joined it. R.-D. Q. 4S9. And how about the holdings Mr. James L. Andem had when the suit was brought? A. I think his holdings were very small also. 24-1 W-iiUam Fahna K-D„ 730 R.-D. Q. 490. Bui. in fact, the holdings of the four principal gentlemen of tliu complainant com¬ pany when this suit was brought, were merely nominal, even if any one of U I cl I i ,ro than one share: that is your view, I lake it? Mr. 1 tides : Question objected tons imput- lag a view to the witness, instead of asking the witness what his view is. (Question continued). Please state your view? A. I don’t think that I knew at the 'time of the suit "Mat the holdings of these people were; the statements that I have made were what f have 731 T!"? !l,oy tlw <>f the company, and told me the suit was to be undertaken. H. D. Q. 491 But please answer the question ; from such information as yon have, wh other acquired after the suit was brought or not? were Bmll"f0",mU°" iS l,ml t,ll!ir >w»Mlng« R.-D. Q. 492. Merely nominal? A. I would not say “ m ] I hut I say siniill. it.-IJ. Q. 493. It never occurred to you I sun- n:'- y""ls,!lf Mr- Haines had' fallen into 732 R-D. Q. 494. In your answer to x.Q. ;,.,7, vo„ Wt l.l,e Z'y l!r,!r‘* bUCIl,m and he had not I ° * lllom,Kn>Pli Company because loneo "a.S 't‘lt tlle uluulio» of February, 1902, or 19R D O 11 r'US !'ul)l'";u'y. 1902. A. Yes 19i> Y°" "uru 0,ecletl ilt that time? R-D. Q. 400. But you had not been an odicer of the compauy prior to that time for some years? out from Sen! 1T‘Vn,rS. To my recollection, I was out fioui September 21, 1900, to March 3, 1902? Mr. t tides : Complainant’s counsel suggests that the witness has already been interrogated on this point and has answered it. Mr. Buckingham : X am on a different line, and subjects mu into each other. A. After the death of Richard Townley Haines and the resignation of Mr. John P. Haines, I did not care to continue with Mr. Cheover in the com¬ pany. R.-D. Q. 408. But you still had a very con¬ siderable interest in tho company ? A. Yes. R.-D. Q. 409. Why didn’t you wish to stay to ' protect this interest ? A. I didn’t think it was necessary. R.-D. Q. 500. What, didn’t you think the in¬ terest was worth protecting? A. It was worth protecting, but I- didn’t euro to stay in the board. R.-D. Q. 501. Then, if I understand you cor¬ rectly, you thought the interest was worth pro¬ tecting, but you didn’t care to stay to protect it ? A. Yes. R.-D. Q. 502. Who was your representative in tho board to protect your interest ? A. I had no representative. R.-D. Q. 503. You simply left this interest “out 7 to grass, ’ ’ so to speak ? Mr. Hicks : Question is objected to as meaningless. .A. I have in the course of life had many in¬ terests in various things, and I did not feel called upon to be a director in every company that I owned stock in. R.-D. Q. 504. But while you were still holding a very considerable interest in tho New York Phonograph Company, you felt free to leave it in the hands of Messrs. Evans. Tremain, Andem and Anduin appeared (i i I ho si II UNION lie, is that it ? A. Yes. Q. nor.. In raol, the Now York Phono- graph Company was virtually ran daring this period, whoa yna worn not a director, by Messrs. , “ns and Tremain, who hold prosaamhly one share of slock each; is that correct ? ’ M, r. //iris: Olijocted to upon the ground (Mat it suggests the manner in which the com- pna.v was run, without any proof thereof, and . iatls to inquire front the witness as to how the company was ran. A I have already said, I did not know what hoy held at that time. H.-D. Q. fiOO. Hut these two men were ran nine he company at that period? A. I suppose so. K-JJ. «..K>7. \ou didn’t bother yourself to find ut.*' A. iSo, I didn’t. R.-I) Q. nos. And did Mr. John P. Haines otiblo himself to about the same extent over the Sv0fvt,r,,:0,"I,lain""1 ‘lining that • know "‘'thing of Mr. John P. Haines’ oublcs, 01 how much time ho gave to the eom- R.-l). Q. BOO. Hat in answer to x-Q. 848 and 3-10 1,11 ® ,,Han*z,,tion, and sines'sof til ', C0,:,,'°l of "*e affairs and n .rive 1 1, - nP‘"iy ; also in answer to x-Q. 3-11) Iders. i?oi“an ^ leMBr 8tock' V. 1 mav lei v., I U‘S’ * la a‘ t*’’ "’eru correct? > h-iiebeen wrong about their controlling the affairs of the company, but they wore large 730 stockholders and still are. R--D. Q. MO. At or about thu time this suit was brought, what was tho value of the stock of the New York Phonograph Company, in your opinion? A. The value of the stock of Now York Phono¬ graph Company depended entirely upon its being able to do business. I don’t think I ever thought of thu value of the stock at that time. Hut I knew that if this suit was prosecuted and won, wo would get back to the point where the stock would be of some valuo. R.-D. Q. fill. But what do you now think was its value at that time? You know that Major 710 Puuston speculated somewhat in the stock, having bought an amount of it in 1001 at 20 cents a share, which in the latter part of 1002 he sold for $1.00 a share? A. I don’t think the value of the stock ever interested me at that time. The last stock that 1 bought previous to the beginning of the suit, T think, was at $23.00 a share. R.-D. Q. 512. You subsequently had an oppor¬ tunity, as L understand it, to buy this stock, 1,000 shares of it, at $1.75 a share? A. That is correct. R.-D. Q. 013. About when was this? A. About two days before the election in Feb¬ ruary, 1003. 741 R.-D. Q. 014. Why didn’t you take the stock, the 1,500 shares? A. Because at that time I had no means of knowing how much the interest of Mr. Kdison had succeeded in securing. They had had our books and had been making desperate efforts for two mouths previous to gain control, and I didn’t care to spend $3,000 to be defeated. Had I known, however, how the stock stood, I should have been very glad to have taken it. Mr. Mat- thiesen, who sold the stock to the Edison interest, had previously subscribed to the carrying on of the suit and given his proxy. 2-18 7-12 R.-D. Q. 515. Did you know t 1i:i t. thin 1,fi00 shares of stork could have I icon bought, after the suit, wtis brought- in 1001 for an cents a share? A. 1 do not think I ever heard of that stock bo- fore tivo days before the election; that is, of it being for stile; I thought that Mr. Mntthiesen being a rich man would be likely to stay with us in the light, but his brother seemed to think otherwise. H-D. Q. 610. if you had known of this 1,500 shares in 1901, would you have paid 25 cents a share for it and taken it out of the market? Mr. J licks: Objected to as extremely hypo- 7*13 t helical, incompetent, irrelevant and imma¬ terial. A. if 1 could have read tile future and known what was coming, 1 probably would. K. l). Q. 517. But as matters stood you would not have paid the 25 cents a share? A. 1 cannot answer that question as the stock was never offered to me. If it had been offered, 1 think 1 should have been strongly templed to have taken it. K.-U. q. 518. But you might not hnvo taken it, stiong as the temptation may have been? A. Wo never can tell ho>> much temptation we can stand. B. -D. q. 519. Major Winston, as an excuse for not taking the 1,500 shares at 25 cents per share 1 h,s "°"l(l have been your excuse, 1 hope? A. Fortunately not. Spri'aKoMsufv A>° r q"itU S"rc tlmt in tho sllrSri . . U'O bond or the ™..ry of I!,,, , °nzz^m’d m- “!• Wh>’ you force an inter- only wont to see Mr. Dyer after the interview with 745 Mr. Edison in 1898, when he told us to go to Mr. Dyer. R.-D. Q. 522. But why didn’t you follow up tho matter in 1890; was it because yon did not wish to waste the time or to stand car fare to go out to Orange? A. I have already stated that my recol¬ lection of this period is that several letters were written to Mr. Edison and we were unable to ar¬ range an interview, and the death of Mr. Richard Townley Haines came at that time and that seemed to put an end to the whole thing, as well as I can remember. We were very anxious to see Mr. Edi¬ son and have something done in 189(1 the same as 740 we were in 1898. R.-D. Q. 523. About what were your holdings in the New York Phonograph Company in 1890? A. I don’t know exactly the amount; I really cannot answer that, I don’t remember. R.-D. Q. 524. Do you think you held as much as a thousand shares? A. Not near as much as that. R.-D. Q. 525. About how much? A. I don’t know. There was a little confusion as to my hold¬ ings and that of Fahnestock & Company, but I think I held something like 300 shares; I don’t . know what the amount was. The linn of Faline- 747 stock & Company had no interest, but some was in my name and some was in tho name of Fahnestock & Company ; I don’t exactly know what the amount R.-D. Q. 520. It was 700 or 800 shares, all told, between yourself and Fahnestock & Com¬ pany? A. Very likely. R.-D. Q. 527. That is to say $70,000 or $80,000 worth of stock? A. Yes, at par. R.-D. Q. 628. If this stock was of any value at that time, it would seem to the ordinary mind that. 1577 250 7-18 you might, have taken some action to Imve en¬ forced your right; why was it that you did not? Mr. JUcks: Objected to as assuming that tile witness took no action, instead of asking the witness what he did do. Mr. Jiuckimjham: Complainant's counsel must refrain hereafter from making objections that are obviously merely intended to conch the witness. Mr. Ilicks: Complainant’s counsel requests defendant’s counsel to refrain from putting words into the month of the witness and requests defendant’s counsel to ask the witness 7-1!) to statu the facts, and objects strongly to the method of examination which defendant's counsel is pursuing. Mr. Jiuckimjham : Defendant’s counsel states that the witness is the principal holder of the New York Phonograph Company and us such is obviously hostile to defendant. Under these circumstances, defendants are entitled to question the witness as if he were under cross-examination; the object ions, there¬ fore, by complainant’s counsel can amount to nothing more than attempts to coach the wit¬ ness. Hereafter, if complainant’s counsel 750 wishes to enter objections of this character, he is quite welcome to do so, but he must present them out of the hearing of the witness. Mr. JUcks : Complainant’s counsel replies tliat the witness is the witness of the defend¬ ant, has shown no hostility whatever, has shown a disposition to disclose the facts entirely, and complainant’s counsel points out that the method of conducting the examina¬ tion by defendant’s counsel is obviously calcu¬ lated to lead the witness into admissions which tile witness may not be aware of, and is not in any way calculated to bring out the truth, and 1578 William Fahnestock 201 the only remedy which is left to complainant’s 751 counsel is to object to the question as put by defendants’ counsel, and if questions are con¬ tinued to be put in the same way objections will be made. A. I have already stated that when we ilnally saw Mr. Edison, and after we saw Mr. Dyer, we were instructed to bring suit, and I did not care / personally to furnish the money to carry on the j R.-D. Q. 520. But this was two years later than 1890? A. But the subject is the same. R.-D. Q. 530. Then the facts are, as I under¬ stand it, that you or the committee of the New 752 York Phonograph Company, wrote a letter or two to Mr. Edison in February, 1806, and thereafter wholly dropped the matter until some time-in the early part of 1S08? fs this or not tile fact? . A. This is the fact, but as I have explained be¬ fore, I cannot tell you why nothing was accom¬ plished in 1800, except that nothing was accom¬ plished. R.-D. Q.. 531. If the stock of the New York Phonograph Company was worth 25 cents a share in 1001, when this suit was brought, wlmt was it worth between February, 1800, and the early part of 1808, in your opinion? A. I give it up— if I 753 am allowed to say that. R.-D. Q. 532. Do you think it was worth any more between 1800 and 1S98 than it was in 1001? A. No, I am sure it was not worth any more in 1890 than it. was in 1901. R.-D. Q. 533. If it was worth only 25 cents a share in 1901, it was not worth more than 25 cents a share, I lake it, in 1890 or 1808? Mr. Hicks: Objected to as hypothetical. A. That is your opinion. R.-D. Q. 5350 at the organization of the company. 11.. D. Q. 53(1. That is, yon paid §50 for one hundred dollar shares? A. Yes. H.-l). Q. 537. Now, isn't it n fact that along in the latter part of 1801 yon personally loaned New York Phonograph Company §5,000? Mr. Hicks : Objected to as immaterial, irrelevant and incompetent. A. I don’t remember the date, bat l did loan them §5,000; it was about that time, 1 think. 755 H.-l). Q. 538. Do yon know of nnother loan of §1,000 that was made about the same time through the agency of Mr. John P. Haines of the Con¬ stables? Mr. lficks : Same objection. A. 1 do. There was a loan of about that amount. R.-D. Q. 530. So that between yourself and the Constables at that time, there was a loan of §0,000 made to the New York Phonograph Company? A. That is conect. R--D. Q. 540. And were either of yon ever paid back this money? A. Not yet. 1 have the coin- 700 pany’s obligation. R.-D. Q. 541. Why was not this money paid back? A. I suppose they didn’t have the money to pay it. If they had had the money they would not have borrowed it. R.-D. Q. 542. Was the company in such straits in ISO l, in your opinion, that it could not survive without borrowing §0,000 from yourself and the Constables? Mr . Hicks : Objected to os immaterial, irrelevant and incompetent. A. The company was not very flush at Hint time. R.-D. Q. 543. And thereafter it didn’t gut flush enough to pay back this amount? A. That is cor- 757 rect. R.-D. Q. 544. These loans wore made at 0 per cent. A. I think so, mine was; I don’t know about the other one. R.-D. Q. 545. Wore you paid any interest on the loan? A. My impression is that I was, as the noto was renewed and several changes made, but I am not positive. R.-D. Q. 540. Is it or not a fact that at any time after January 1, 1802, if you had insisted upon the payment of this §0,000 loan, the New York Phonograph Company, complainant herein, would have boon forced hopelessly into insolvency? 758 Mr. flicks : Objected to as calling for a con¬ clusion on the part of the witness and hypo¬ thetical. , A. Tlieso were the only obligations the company had and payment was not demanded. R.-D. Q. 547. Do you recall the employment of a firm of professional accountants to investigate the affairs of the New York Phonograph Com- i puny along about the middle of 1802, and that these accountants submitted a. report pursuant to the request of your company? A. I think 'that is correct. R.-D. Q. 548. And do you recollect the purport 759 of this report? A. I do not. My recollection is that the report was a natural safeguard for the business of the company, and directed more to see whether there were any discrepancies in the ac¬ counts or any money missing, than anything else. R.-D. Q. 540. Do you recollect that this report showed that you were falling short about a thous¬ and dollars a month in paying your running ex¬ penses from the beginning of 1801 up to July, 1.892? Mr. Hicks: Objected to as calling for a conclusion on the part of the witness and WilLb 254 700 hypothetical, nml complainant's counsel re¬ quests defendant's counsel to produce the report, instead of interrogating the witness in regard to a written document. All further questions in relation to this report are ob¬ jected to on lids ground. A. 1 do not remember that the report said that, •but it may have done so. R.-D. Q. 550. 1 now hand yon a typewritten paper of 12 sheets, purporting to lie a report dated .Inly 12, 18112, to the President, Vice-President and officers of the New York Phonograph Coin, panv, 2157 Fifth Avenue, and signed by White- 701 head, Clerihew & Briggs, members of the Ameri¬ can Association of Public Accountants. I should add that this signature is at the end of the fourth page, and that the remaining 8 pages of the paper are tables apparently relating to the accounts and affairs of the New York Phonograph Company. Do you recognize this paper? (Hands paper to witness.) A. No, 1 do not. 1 cannot identify this report, but I know that we had at one or more times no- countants examine the books. Mr. Hicks: Complainant’s counsel asks that the paper just shown to the witness be* 702 marked by the Examiner for identification. R.-D. Q. 551. You recognize this firm of ac¬ countants? A. 1 had entirely forgotten the name, but it seems to me that these accountants were the ones who examined the books. R.-D. Q. 552. Prom the appearance of this paper, do you assume that it is a correct, copy of some report that was rendered your company at the date it bears? Mr. Jficks : Objected to ns irrelevant, incompetent and immaterial. A. I do not like to decide that- 1 simply say it may bo. ft| 255 R.-D. Q. 558. Who would be more likely to 703 know about this report than yourseir? A. Mr Haines, [ should think, Mr. John P. Haines. R.-D. Q. 554. You would assume that Mr. John V Haines had this report made? A. I should think so, yes. Mr. Hides : Question is objected to as • putting words in to the mouth of the witness. R.-D. Q. 556. Mr. John P. Haines at that time was more active in the management than yourself? A. Mr. Richard Townley Haines was the active member of the Haines family in the phonograph company. John P. Haines was President at that tune. . 704 R.-D. Q. 550. But whatever interest John P. Haines had in the company, you were loaning it more money than ho? A. Yes, that is a fact. R.-D. Q. 667. You would not have been inter¬ ested to read this report if the fact were that the company was running behind on its expenses about a thousand dollars a month? A. I would have been interested in reading any report about the airairs of the company, whether it was running behind or ahead. . R.-D. Q. 658. You are accustomed to reports of this kind, aren’t you — these accountants’ reports, which show the condition of a business corpora- 705 tion? A. Yes, I should say so. R.-D. Q. 559. Now, look over this report please, . and see if it does not show that the company rail behind substantially 822,000, between January 1, 189], and July, 1, 1802? Mr. Hicks : Objected to upon the ground that there is no proof in regard to the report, and any evidence as to the contents of the report is incompetent at the present state of testimony. Mr. Buckingham: Defendant’s counsel asks complainant’s counsel if he will have 250 700 present sit the next session of this proceeding, Mr. .lolm 1\ Haines, who, it is assumed, will lie aide to identify this paper? Mr. Hick is : Complainant's counsel cannot undertake to proilnee Mr. Haines. A. I think that is correct as you say, according to tlio account. It.- 1). Q. 500. That is to say, between January, 1, 1801, sind January 1. 1802, the eompsuiy mu be¬ hind about $12,000, and between January 1, 1802, sirnl July 1, 1802, it ran behind about $10,000 more? A. That seems to be so from the report. It.- U. Q. 501. You have just been talking with 707 Mr. John 1\ Haines over the telephone. Do you learn any thing, from him that enables you to more deliuilely recall or identify this report ? A. Simply . that ho said there was a report mode. Mr. Hicks: Complainant's counsel requests defendant’s counsel to disclose how he came into possession of this report; the report having been produced as si report apparently made to New York Phonograph Company, but it sippenriug that the repoit is not now in pos¬ session of New York Phonograph Company, but is produced by counsel for defendant and is apparently in possession of defendant. 708 Mr. Uuckinr/ham : Defendant’s counsel will tsiko under consideration the request of com- phiinaut’s counsel. At this time, however, he will not state just bow this report came into his possession, except Unit it came, as he be¬ lieves, in a very proper way. Defendant’s counsel here offers in evidence tile report just shown witness, and tlio same is marked “De¬ fendant’s Exhibit No. 10” (Auditor’s Report of New York Phonograph Company, July 12, 1892), March 20, 1904, S. M. II. Ex. Mr. Hicks: Complainant’s counsel does not object to the report upon the ground of 1584 William Falm?sto"k competency of proof thereof, but objects to it TOO as immaterial and irrelevant-, and reserves the right to correct any error in the report itself, should it afterward appear that the report is in any respect incorrect. R.-D. Q. 502. You have no trouble in finding in this report reference to the $0,000 loan, $5,000 of which was droppod by yourself and $1,000 by the Constables? A. None whatever. R.-D. Q. 508. Your note seems to have been dated April 12, 1892, for $5,000, while that of the Constables for $1,000, is dated June 29, 1892; have you any idea as to why these notes were not of the same date? A. None Whatever. 770 R.-D. Q. 504. It would rntliur look, would it not, that the $5,000 had been used by .Tune 29th, and that the assets needed replenishing at that time? V ‘ •' Objected to as leading. R.-D. Q. 505. And from the way things had been going, it would seem that the assets' were likely to require a still further replenishing, would it not? Mr. Hicks: Objected to as hypothetical. A. I cannot answer that; I suppose the loans were made large enough for the immediate and 771 prospective needs of the company. R.-D. Q. 506. Did you loan the company any money after this $5,000, which you gave them April 12, 1892? A. I am not sure, but my recol¬ lection is that I occasionally loaned them small sums which were repaid, $150 or so. R.-D. Q. 507. But don’t you suppose that you had about got through making large loans to them by the middle of 1892? Mr. Hicks: Objected to as hypothetical. A. I do not know. R.-D. Q. 508. You did not lend them $5,000 again? A. I did not. William F R.-D. Q. 0(50. And for this very obvious reason hat they were not likely to pay you the money mok ? Mr. Hicks : Objected to ns leading. A. That is not at all the reason. I should have been very glad to have loaned them money if there ivns an opportunity of hulping tile company. R.-l). Q. 571 . Now, doesn’t this report of July 12, 1802, show you that the assets of the company an January 1, 1802. were virtually’ $28,585.00, and that the assets of said company on July 1, 1S02, had fallen to $15,(510.15? Mr. Hicks: Objected to as lending, instead of asking the witness to slate what the assets of the company were, to his knowledge, at those dates. A. it seems to. R.-D. Q. 572. And even these assets, $15,(540.15, were not of such a nature ns to constitute u very good working capital, were they? Mr. llicks : Objected to as calling for the conclusion on the part of the witness. A. 1 do not think the question of the amount of capital needed is an important one; most of our dillicultics came from trouble with the North American Company. In addition to poor business, they from time to time arbitrarily advanced the prices of records and gave us poor supplies. I think we had as much trouble with the North American Company as we did with the public in those days, if my recollection serves me. R.- D. Q. 5751. But the North American Company became insolvent two years after the date of this report, didn’t it? A. 1 believe so. R.-D. Q. 57-1. Was the insolvency of the North American Company caused by the insolvency of your company, among other licensee companies? A. Not to my knowledge. Mr. Hicks : Question is objected to on tho ground that it assumes that New York Phono- 775 graph Company was insolvent, and such fact not appearing, but tho contrary appearing. R.-D. Q. 575. You will agree, won’t you, that according to the report of July 12, 1802, by White- head, Clerihew & Briggs, the affairs of the New York Phonograph Company in 1802 were in a very precarious condition? A. They were not in a happy state, I can say that. R.-D. Q. 57(5. Did they get any better between July 1, 1802 and July 1, 1808? A. I don’t remember. R.-D. Q. 577. What is your best belief? A. I don’t suppose they did; I don’t recollect what 775 happened in that time. R.-D Q. 578. IIow did the panic of 1803 affect your New York Phonograph Company business? A. I don’t think it spared the New York Phono¬ graph Company particulary. R.-D. Q. 570. Was there anything left of tho New York Phonograph Company to be ruined bv tliatr panic of 1803? Mr. Hicks: Objected to as indefinite and meaningless. A. There was no change in the affairs of the company of importance. R.-D. Q. 580. Did the assets of $15, (540. 15, shown 777 by the report of Whitehead, Clerihew & Briggs, ' last the New York Phonograph Company over from July 1, 1802 to July 1, 1803? A. I don’t remember. R.-D. Q. 581. Probably these assets, however, had been all used up prior to July 1, 1803? A. I don’t know whether they had or not, I don’t remember. R.-D. Q. 582. But at the rate you had been going, there would have been nothing left at that time? A. It does not follow that the relative loss kept on at any such loss per month. 1587 William Faliud; «-D. R.-D. Q. 583. Your nolo foi was six months? 'A. 1 believe R.-D. Q. 581. You no vor .sinv lining paul ? A. I never press for §5,000, howovnr, •r .saw any nliniiuu of this pressed puyinont of the ’’ nmeliine. When was tins “wound up” machino in use. Was it any time between 1887 and 1800? A. I do not remember any dates, lint the first machines were machines with the motor power furnished by springs; after llml I think we Imd batteries; I do not remember the date. It.. - 1 >. Q. (CM. These “wound up” machines were the old tinfoil phonographs? A. No, they were not; they were tile kind they gave the public at that dale. 1 never saw a tinfoil machine but one tlm! was on exhibition ; wo never had any tin¬ foil machines. R.-l). Q. o:tr>. You think that the Now York Phonograph Company did handle spring- driven ii lues A. I know they did. U.-D. Q. (!:«!. Were these clock-driven machines good serviceable devices? A. They were unsatis¬ factory. They were not as satisfactory as tho electric, machines, because you could never tell when they were going to run down; they might stop in the middle of a sentence. H.-D..Q. (137. You went to the battery .driven machines to better the service of the phonograph? A. That is my recollection. R.-D. Q. (128. And liually, the art has so evo- luted that yon have gone from the battery-driven machines to spring-driven machines again? A. 1 haven’t seen a phonograph since all this talk has been going on for the past year. tt-b. Q. (1381. Ts it your complaint, then, that Edison did not have a sulhciently good spring- driven machine from the first? A. Not particu¬ larly my complaint. It was tho fault of tho ma¬ chine at the time. They first supplied us with spring-driven machines, as 1 recollect, and then afterwards the electric batteries got around. ll.-D. Q. 0110. Did you think it malicious on 811 Edison’s part that the first spring-driven machines wore not any good? A. I didn’t think so at all; it never occurred to me; we understood that he was to give us the best ho had, and according to our contract; we took what he gave us, sometimes with a kick. R.-D. Q. 040. You have somewhere testified that Mr. Edison, or the Edison Phonograph Works didn’t give the North American Company, or at least that the North American Company didn’t give your company tho very best machines. How do you know that there were any bettor machines to be had than were given you? A. Because they 812 told us so ; they told us frequently to work off the older machines and they would give us better ones. I think we went through that period sevorul times. R.-D. Q. 041. But as you worked oil upon the public those machines that were not the best, did you get better ones or the best ones? A. But I think they improved them about three or four times. There was also a large amount of hope connected with the phonograph business when it first started, everybody rushed to subscribe. R.-D. Q. 042. The chief asset of the phono¬ graph business at that time was the “ hope ” that you had in it? ' A. I didn’t think so. I said that 813 the people who subscribed to phonographs were tilled with hope. Edison assured us it would be the best invention he had ever made; it__would _ rival the telephone. " R.-D. Q„ G42|. Do you really believe that Edison tried to make it so during those years? A. I think it was his intention at the first, yes. And I might say in this connection, that 1 think Mr. Edison has been badly advised in the whole or this busi¬ ness. 1 dare say that at heart Mr. Edison is not as bad us we have painted him ; I never had any direct intimation that Mr. Edison wanted to ruin this company, bill 1 think lie Inis buon told that this would bo a Rood way to got rid of it, mid ho lias fnllowod mil that lino. K.-l). Q. 048. Wlnil now do yon asssmo is the I'oal reason that- the phnnngrnph Inis at this Into dalo become a substantial, commercial success? A. I suppose that the phonograph, like all other inventions, lias gone through its periods of troubles and gradually become an established fact with tlio improved machines and tlio bettor knowledge of H.-l). (j. (ill. You assume its present success to be the result of that evolution that is necessary in the development of all mcchniiicnl devices? A. 1 think so. It.-I). Q. 015. Now, what has been the specific object of the New York Phonograph Company during the past two or three years in circtilari/.ing •he public or jobbers and dealers in phonographs? ' A. Simply to notify them of the rights of tlio New A'ork Phonograph Company, and that xve re¬ garded them as in our territory. K.-l). Q. ti-1 0. Have these jobbers paid royalties or license fees to the New York Phonograph Com¬ pany? A. None whatever. They have a specilic contract with the National Phonograph Company; afraid to have anything to do with us or sell us a machine, or anybody they fancy a friend of ours. 11. -1J. Q. (i-17. But you told these jobbers and salesmen you would license them to continue in the business, have you not? A. No, I don’t know as wo have; we told them we would when we got our rights established, and we certainly will, but we cannot get any supplies now. I have overlooked the circular which seems to have been sen toil till the year 1901 ; it is a schedule of lutes for phonograph dealers who desire to obtain permission to do busi¬ ness within the State of Now York under authority of the New Yoik Phonograph Company. lt.-D. Q. 048. These dealers were refractory? A. They already had a contract with Air. Edison in the National Company. K.-D. Q. 049. At any rate they would not pay? A. They could not without forfeiting any sup- lilies they hud received from the National Com¬ pany. H.-D. Q. 050. But you wore willing to license these companies, and held yourselves out us being willing to grant rights to phonograph dealers? A- 'Vo certainly would if wo had the supplies to-day. I suppose the business would be so large that one ollicc would be too small to take care of it on that account. 11. -B. Q. 051. Isn’t it true that the New York Phonograph Company, without being otherwise in the business, wished to grant licenses to phonograph dealers throughout the State of New York who are now in the business? A. Wo could do that with great propriety if we lmd tlio supplies. It -D. Q. 052. Isn’t that what the circular means that yon have just referred to? A. I suppose so. lt.-D. Q. 008. If you were willing in 1901 to grunt licenses, or in other words, to sell your ex¬ clusive privilege of doing business in the State of New York, why weren’t you willing to soil this privilege in 1898, or 1800? A. The question didn’t come up at that time. lt.-D. Q. 054. But Mr. Dyer is of the impression that it did. A. I do not agree with Mr. Dyer. R--D. Q. 055. Mow do you suppose he got that impression so deeply rooted ? A. I do not under¬ stand it. R.-D. Q. COO. Would your company have had any scruples against selling its rights in 1890 or 1898, and of keeping out of the business ? A. If by selling rights you mean appointing agencies throughout tlio State, I should say no. R.-D. Q. 007. Your company would not have sold its rights and staid out of the busiuess ? A. Tliiil. question did not come up, and I emmet lerefore decide now whnl wo might Imvo donu in 30(1. It.- 1). (). 0 58. Hnt weru you gentlemen so wed- ad to lliis husiness tluit you would not Imvo sold liatever interest you iiad in it in 189(1 or 1898? A. 1 eanuot deeide what limy would have done, «d wlml they would not have done in 1808, qieeiallv as we did not do anything, but [ am ire we would have been willing to do anything ■> help the company in going into business. It. -I). Q. 000. You have testified that you liotight it. required no capital to go into the 'heliograph business in 1800 or 1808. You wore iitisliod, however, as I gather from your answer a Q. 07, that it would cost money if you were to ue Mr. Edison at that lime, and that it would ost. some $1:1,000; didn’t yon think the rights 'f the New York Phonograph Company worth 111,000 ? A. This is another place where our lope came in. We thought it could not be much verse, and something might come along for the letter; we were sure of our rights and thought it vould wait. R.-D. Q. (500. Did you really think you would vnit until Kdison had made the business a sue- ess ? A. I am sure I never thought of that. R.-D.Q. (501. You thought that it was all fight o '<-‘t E'lison go to the expense of finding selling tgents ? A. I don’t think that occurred to us. IVe were willing to do our part, and that is all wo sould do. R.-D. 002. Why didn’t you gentlemen of the New York Phonograph Company buy up the issets of the North American Company ? Mr. Hicks : Objected to as a useless waste of time, the examination of the witness hav¬ ing already been prolonged by immaterial nnd irrelevant matters beyond all reason. William 275 A. It was never proposed to us to buy the North 823 American Company. R.-D. Q. 003. Did you know that the assets of tlto North American Company were for sale? A. I do not recollect that. R.-D. Q. 004. At any rate, when Mr. Edison bought them you were glad he had thorn? A. I think wo said that in our letter congratulating him in gutting a good thing when he bought that. Mr. Buckingham : Defendant’s counsel hero offers in evidence a document containing the By-laws of the New York Phonograph Com¬ pany, and the same is marked “Defendant’s Exhibit No. 11, By-laws of New York Phono¬ graph Company, March 20, 1904, S.M.H.Ex.” It is stipulated that tile document here offered is a correct copy of the by-laws of the New York Phonograph Company, and the same is received subject to correction if found in any way erroneous; it being understood that a comparison shall be made by the Ex- _ atniner before the next session, to discover such error, if any. (Re-cross continued.) By Mr. Hicks : 825 R.-C- Q. (505. In your answer to R.-C. Q. 397, you set forth two letters, dated February 10, 1800, and February 21, 1890, to Thomas A. Edison, were those letters in the handwriting of Richard T. Haines? A. They were. R.-C. Q. 000. Do you know of any reply re¬ ceived from Thomas A. Edison in response to either of those letters? A. I do not. R.-C. Q. 007. Do you know of any opportunity offered by Mr. Edison to the committee of New York Phonograph Company, or any other officer or agent of New York Phonograph Company, for 1800 or in 1808, or nt any olhor time, Hint phono- gmpliN ami supplies 1... sold to New York Phono- graph Company „„ credit? A. I don’t remember any such reipiesl. K.-C. Q. 000. Did the New York Phonograph Com | inny in 1800, or it* officers, committee or agents, Imre imy opportunity at nil in discuss with Mr. Kdison or the Nntiomil Phonograph Company any plan of doing hiisiness? A. 1 cun not remem¬ ber that they did. H.-C. Q. 070. In J808 did (lie New York Phono- graph Company, or its officers or agents or com¬ mittees, have any opportunity to discuss with Mr. Kdison or the National Phonograph Company, any pin ii of (loin# business, except upon the condition that New York Phonograph Company should enter the business of selling phonographs and supplies tipon the same basis as any oilier dealer in New ' ork ''nnuiviug supplies of phonographs nml pho¬ nograph supplies? A. They did not. * -?• Q- 07 '• K’ow, suppose that in 1890 the i m i °r k PI'i>nogiiiph Company had huen nol ilied by ihoninn A. Kdison or by ’the National Phono- ginph Company, or by any other person that htul succeeded to the rights of the North American Company, that a demand for phonographs existed within tlie State of New York, would not New York Phonograph Company have been willing to supply such demand if nolilied thereof? A. It certainly would. K.-G. Q. (i/2. Would not New York Phonograph company in pursuance of such notice from Mr. Kdison, the Nntiomil Phonograph Company, or siu.h successor, have requested from Mr. Kdison or 5STS ’ h0"v”'\l|»!' Co,"I>«uy, or such successor, nlin/t -.i1 '°‘ C I1,ol,°gruph Company be sup¬ plied with phonographs mid supplies in order that 1604 WJlLiajn Fahnestock «-O.Q. 277 it might meet such demand? A. It would, very 829 gladly. K-.-C. Q. 078. What was if that was necessary, in 1890, to enable New York Phonograph Com¬ pany 10 enter upon the hiisiness of selling phono¬ graphs and supplies within the State of New York? A. Supplies from the parent com¬ pany, the National, us a successor of the North American. K.-C. Q. 07‘1. You lmvo referred to notices sent by New York Phonograph Company during the year 1 901 , to dealers in phonographs and supplies within tlie State of New York, and to a proposed appoint¬ ment by New York Phonograph Company of such 880 dealers as agents within the State of Now York, of Now York Phonograph Company. Do you find in tho minute book of New York Phonograph Com¬ pany a copy of the contract which New York Phonograph Company proposed to make with such agents? (Witness examines minute book.) A. I do. ll.-C. Q. 07f>. Will you kindly read it? ‘ A. (Witness reads) ‘‘In consideration of tlie sum of $ the receipt of . which is hereby acknowledged, we hereby appoint our duly authorized agent for the year 1901, with full 831 authority to sell phonographs and supplies there- • for within our territory, that is, tile State of New York, and agree to hold him harmless during this period or previous thereto, from prosecution or infringement of our contracts or October 12, I860, giving us tlie exclusive right to sell said machines in tlie State of New York until March 20, 1903, and subsequent thereto. New York Phonograph Company, R.-C. Q. 070. Did New York Phonograph Com- WilLiam Fahnestock such contract.' A. I llnnk not. R.-C. Q. 077. Tliu bill of complaint, in this notion was lilcil in .Ian.. 1001, and it appears from the record that service was had upon defendant National Phonograph Coni]), any, subsequent thereto, and that subsequent thereto National Phonograph Com puny appeared in this action. Will you stale who constituted the Board of Trustees of New York Phonograph Company in in the year 1 1)01 ? A. II. M. Kunston, Scott Tre- main, James L. Andeni, .lames !•'. McCoy, Will- him liolzor and L. 15. Evans. R.-C. Q. (178. Who succeeded them ns the seven trustees of the company in 1002? A. W. Seward Webb, William Fahnestock, F. G. Bourne,.!. Her¬ bert Johnston, James !,. Andum, F. S. Sniithers, II. M. Fiinstou. R.-C. Q. (170. Mr. John P. Haines took the place of one of these directors who resigned, did he not, in the year 1002? A. Yes, he took the place of F. S. Sniithers. R.-C. Q. 080. After the election in 1002, what change, if any, took place in the attitude toward New ^oiK Phonograph Company, of Jj. E. Evans, J. F. McCoy and Scott Tromnin? A. They went over to the other side. . Q- 081. And yon have already explained in your testimony, have you not, their actions with reference to New York Phonograph Company, sub¬ sequent to election of the new board in 1002? A. Yes, they did everything to help the Edison side in the suit. i Jo’°' 088, 1*L'f(-M'rinK to the Board olected in t i~’ n°ir !‘"y "lum,K'l's of Board, including John 1 . Ilaines, formerly identified with the inter- esls of the company in its early history and there- “it- , Webb* "'yself, Herbert Johnston and John P. Haines R.-C. Q. 083. After t.iio beginning of tliissuitin 835 Jan., 1001, by the filing of the bill, wore the stock¬ holders of New York Phonograph Company noti¬ fied of tlie beginning of the suit? A. They were. R.-C. Q. 084. Upon what date? A. Notified on the 25th of February, 1001, in communications signed by James L. Andetn, Scott Tremain and Lemuel E. Evans, Executive Committee. R.-C. Q. 085. Did this suit meet with the sup¬ port of the stockholders of New York Phonograph Company? A. It did.' Evans collected quite a large amount; I don’t know exactly how much. R.-C. Q. 080. And lias this suit met with the support and approval of the majority of the stock- 830 holders of New York Phonograph Company from the time it was commenced down to the present day? A. It has; yes. R.-C. Q. 087. You have spoken of a loan of 85,000 made by you to New York Phonograph Company. Does New York Phonograph Company still owe you that sum of money? A. They paid the interest for I don’t know how many years ex- ictly, and the principal rose to, I think, about seven or eight thousand dollars, and I received ?5,000 in stock of the company.' R.-C. Q. 088. So that the amount due to yon has been paid to the extent of 85,000, in addition 837 to tlie early payments of interest? A. Yes. R.-C. Q. 089. Do you know of any indebtedness ixisting against New York Phonograph Company to-day? A. I know of nothing but the Constable R.-C.‘ Q. 001. As I understand your testimony, t is a fact, is it not. that your holdings of stock ii New York Phonograph Company have steadily ncreased from 1890 down to the present day? A. That is correct. . - 281 8118 n.-C. Q. 002. Have you sine. 1800 sold or other- wise disposed of any of yoiirsloek ? A. I have not, although I have had abundant opportunity; I have frequently been asked by the otherside, represented by McCoy, whether I would accept an offer of any size, the last being made t he day of the election at K.-U. Q. 003. Was any particular price offered to you through Mr. McCoy, or anybody else, for your stock? A. No. H.-C. Q. 00-1. What, did McCoy say? A. He wanted to know whether I would entertain a sale, but would not. mention.any price. 1 told him I was S:!n K<>>»K to leave it to my family. If.-C. Q. 005. You have been examined with reference to Defendant's Exhibit No. 10, to-day, which purports to be a report made to New York Phonograph Company. Is that report to-day in tlie possession of New York Phonograph Com¬ pany? A. It is not. H.-C. Q. 000. In whose possession do you find it to-day. A. In the possession of the defendant, National Phonograph Company, Mr. Bucking¬ ham. H.-C. Q. 01)7. Do you know how it came to be in his possession? A. I strongly suspect that it was one of the papers stolen from the company by Evans. There were a number of papers that have been missing and 1 dare say they may have others. H.-C. Q. ODS. Mr. Buckingham also exhibited to you to-day two papers endorsed each “Balance sheet, New York Phonograph Company,” one dated September 30, 1802, and the other dated October 31, 1802. Are those papers now in tlie possession of the New York Phonograph Com¬ pany? A. They are not. H.-C. Q. 000. Do you know how they came to be in Mr. Buckingham’s possession? A. I sup¬ pose through Evans, also. R.-C. Q. 700. In referring to tlie papers taken 841 by Evans and turned over to tlie National Phono¬ graph Company, do you refer to what was done with the books and papers of New York Phono¬ graph Company witli reference to which you have already testilied at length in this suit? A. I do. R.-C. Q. 701. Does New York Phonograph Com¬ pany know to-day what of its papers are or are not in the possession of this defendant, or of its conn- sol or agents? A. They do not. Evans seems to have kept everything that would be useful to the Edison Jute rest in the present suits. R.-C. Q. 702. At tlie last session you gave cer¬ tain testimony with reference to four suits brought 842 by National Phonograph Company and Edison Phonograph Company on Edison patents Nos. 713200, 382418, 382402, 007502 and 414701, and I ask you to state generally whether it ' is not alleged in each of the bills of complaint therein that the defendants are infringing upon said letters-patent? A. That is correct. R.-C. Q. 703. And infringing thereon within tlie Southern District of New York? A. Within the Southern District of New York and elsewhere in tlie United States. R.-C. Q. 704. You have been subpoenaed on be¬ half ol defendant to-day, by means of a subpoena 843 duces tecum, have you not? A. I have. R.-C. Q. 705. And included within tlie papers mentioned in the subpoena duces tecum served upon yon for to-day were “all trial balance sheets or statements, or balance sheets of New York Phonograph Company, or auditor’s or expert ac¬ countant’s reports on the condition of said com- pany, prepared or made up for the directors of said company or under direction of any officer of the same during tlie year 1801, 1802, 1803 or 1804, or any of said years, were they not? A. That is true. R.-C. Q. “oil. Have yon any “,w msiness and relations existing between Ibomas \. Edison ami the Edison Phonograph Works, nid between Thomas A. Edison and North Aineri- •aii Phonograph Company, and between the Edi¬ son Phonograph Works and the North American Phonograph Company prior to August 21, 180*1? A. I have not. K. C. (2. 707. Whether Mr. Edison sold goods on credit or loaned money to either or those cor¬ porations, do yon know? A. I do not. R.-C. Q. 708. Do yon know what Mr. Edison’s purpose was with reference to tile North American Phonograph Company, whether he desired to maintain it or destroy it? A. Not to my knowl¬ edge. lie direct continued— Mr. Buckingham : R.-D. Q. 700. Yon say that §5,000 of the in¬ debtedness of tile New York Phonograph Com¬ pany was dtschsirged by stock of that company? A. Yes. R.-D. Q. 710. How much stock did you get for this §5,000? A. 1017 shares, the amount or treas¬ ury stock that the company had. K. -D. Q. 711. When did you get it? A. I do not remember the exact date; it. was previous to the last election; it was some time previous to that; 1 think it was in the Summer of 1003. lt.-D. Q. 712. Why hasn’t the company given the Constables some stock, too, for their §1,000? A. 1 don’t know. lt.-D. Q. 713. How long has Mr. Lemuel E. Evans been dead? A. He died in February last. lt.-D. Q. 714. When do you assume it was that Mr. Evans took these papers? A. About the Spring of 1902. lt.-D. Q. 715. The storage facilities of the New York Phonograph Company in those days were rather limited, were they not, in 1901 nnd 1902? A. I don’t think so. T think the days of limited 847 storago was around at 21 Park Place. } lt.-D. Q. 710. What had been Mr. Evans’ posi- * tion just prior to his leaving the New York Phono¬ graph Company? A. Ho was the general hanger- on of Cheever; he was always in Cheever’s office. lt.-D. Q. 717. Mo was secretary of the New York Phonograph Company? A. I think ho was secre¬ tary under the Cheever administration. Cheever had a lot of oflicus and Evans was always in there. lt.-D. Q. 718. If Evans was the active man of of the company and was charged with tho custody of its papers and books, do you imagine that ho had a very convenient time of it in keeping them 848 together, with such facilities for storage, &c., as you had? A. I do not imagine; I have no knowl¬ edge of that; I was never in the otlico after I was there in 1900. lt.-D. Q. 719. In tho years 1901 and 1902, were these papers worth more than their avoirdupois i 'y value to the rag man? 'A. -At the beginning of the suit Mr. Evans’ chief occupation seemed to be 4 * in collecting money from the stockholders and encouraging us in what a grand thing it was to light Mr. Edison. Shortly after that ho began to gut away with the books. R.-D. Q. 720. Your stock was then worth 25 849 cents a share, according to Major Fiinston? A. Ido not remember anything about the value of the stock; it didn’t concern mo at any time. R.-D. Q. 721. Don’t you think it rather strange to talk of such papers as stealing? A. No, because , Evans took some money from me for which I have ’ no return. I am not disposed to speak of a dead man, and I do not think I say anything disrespect¬ ful when I say he stole those books. I do not think* it was anything but fear that made him give them back. R.-D. Q. 722. He seems not to have given you solicitin'1' mu' stockholders to soil. I l"1'0 ®“n a S„Sl of tills correspondence signed by Evans mid McCoy, and that is still going on. K.-D. Q. 72:). Didn't you atone time offei to sell your own stock to tliese seductive gentlemen. A Never have I made any offer of my slock at all. 11 -D Q 721. Didn’t you in substance reprseont that you might sell it? A. No; I have Imd John 1. Martin in, in addition to Evans and McCoy, and I might have said to them : “ What would you give me and I might consider it,” but I never had any idea or selling it. 11 -D. Q. 725. Just why are you so wedded to this stock? A. Because, when 1 get into a thing I never leave it, and 1 am going to stick by this thing, too, to help the innocent stockholders. It does not make any difference to me. I could have sold out any time and made a lot of money out of it. Adjourned to Wednesday. March 30, 1!>04, at II o’clock A. 51. New Yokk, March 30, 1004. Met pursuant to adjournment at the office of S. M. Hitchcock, 15 William Street, New York City, at 11 o’clock a. 5i. Appearances : Same as at previous hearing. JOHN 1\ HAINES, recalled by defendant. Direct examination by Mr. Buckingham: Q. 8. You are the Mr. John P. Haines wlm lies 1612 Join P. Haines Q. 0. f call your attention to n paper which has 853 been offered in evidence in this case as Defendant’s Exhibit No. 10, Auditor’s lleport. of New York Phonograph Company. Please state whether you have before seen this paper, and if so when, and what you know of it? A. l'liis appears to be a copy of a report mado by tile auditors in 1802, but the original of this I believe lias been removed from the possession of the New York Phonograph Company by someone, and I have no means of com¬ paring this or identifying it as a copy of the orig¬ inal. I believe it to be a copy. Q. 10. A correct copy? A. No, I cannot, say that, of course; I haven’t the original to verify it. 854 Q. 11. Do yon recognize the particular subjects dealt with in this report? A. I do. Q. 12. Do you recollect the circumstances under which you employed these accountants to make this report? A. IAlo. The circumstances were to mako an exhaustive audit of the books and accounts of the New York Phonograph Company at that time. Q. 13. Isn’t it true that this report shows that there was a diminution in the assets of the New York Phonograph Company of about $22,000 be¬ tween January 1, 1801, and July 1, 1802; that is to say, a falling of in the assets of the company of 855 about$22,000 in theeighteen months of the period, January 1, 1801, to July 1, 1802? A. It does, but ns I said before, it is not signed and not verified, and I do not recognize it as a report. Mr. Ilicks : Complainant’s counsel objects on the ground that the report speaks for itself and the question calls for a conclusion on the part of the witness. Q. 14. Have you any recollection as to what these accountants did really report; that is to say, do you recollect that they did report to the New York Phonograph Compauy that its assets had fallen ofT during the IS months, .Innmiry J, u«n, to July 1, 1S92, about 82-2,000? A. I do not. Q. 15. ITiivo you no recollection as to the condi¬ tion in whic.il these accountants found tile affairs ot the company? A. To tile best of my recollection, it was that they reported they found them in ex¬ cellent condition, but as to tlio figures 1 do not re¬ member. Q. Iti. But would you think the affairs of the company were in first class condition if tile assets of the company were diminishing at the rate of $22,0000 in 18 mouths at that period? A. Under the circumstances, inability to secure the ma¬ chines and necessary supplies, &c., of the North American Phonograph Company, 1 should say yes. Q. 17. That is, the Now York Phonograph Com¬ pany would have done well to have continued in existence from day to day under such circum¬ stances? A. The New York Phonograph Company was hoping for better treatment from the North American Phonograph Company and a better ful¬ fillment of its contracts, supplying us with better machines and better supplies to do business, which we wore promised from week to week. Q. 18. I find on next to the last page of this auditors report the following: “Schedule B. “Bills payable: “ William Fahnestock, note “ dated April 12/92, at 0 1614 John. P, Haines 287 Bo you recognize the item indicated on this 859 Schedule, “William Fahnestock, note dated July 12/92, at Omos., due Oct. 12/02, for 85,009? A. I do. Q. 19. Tli is was money borrowed by the New York Phonograph Company of Mr. Fahnestock? A. TlieNowYork Phonograph Company borrowed 85,000 of Mr. Fahnestock, but as to the date I do not remember. Q. 20. Bo you recall whether this loan was ever paid to Mr. Fahnestock? A. To the best of my recollection it was not. Q. 21. Bidn’t you hear that since this suit was bugun lie accepted a considerable block of stock in 800 part payment of this account?. A. No, I don’t remember that. Q. 22. You have just learned, have you not, some of the circumstances relating to this matter from your counsel, Mr. Hicks? A. I have. Q. 28. In tlic same Schedule B. appears a further matter, to wit: “Janies Coustable, dated June 29/02, at 0 mos. 81,000.” Bo you recognize this item? A. l'do. Q. 24. This was money borrowed from James Constable June 20, 1892? A. The company bor¬ rowed 81,000 of James Constable, but as to the date I do not remember. 8(51 Q. 25. Bo you know whether this 81,000 was repaid to Mr. Constable? A. My impression is .that is was repaid in full with iiffer5Stl > 'Q. iJoyou know when? A. i don’t remem¬ ber. Q. 27. From this Schedule B. it appears that the New York Phonograph Company borrowed April 12, 1892, 80,000 from Mr. Fahnestock, and that on June 29, 1892, it borrowed 81,000 from James Constable. Bo you know why these amounts were not both borrowed at the same time? A. Ido not.! Mr. Hicks : Question is objected to upouj J 302 the ground Hint it does not appear that the amounts were not borrowed at the same time, and the witness having testified that lie has no knowledge ns to the dates. Q. 28. Don’t you suppose it to be a fact that when the Fahnestock loan was made, April 12, 1802, the company needed money for running ex¬ penses, and that this $5,000 lasted up to about June 20, 1802, and that the company then found it necessary to replenish its assets by a further loan? A. I do not, 1 know that tile company had what was considered over $10,000 in good accounts receivable, and tha t, the collections were very slow, SBil and that, as in all business enterprises, they had to secure temporary loans to pay its own bills while it was unable to collect bills and accounts due to it. Q. 20. At the rate the New York Phonograph Company’s assets were diminishing during the period, January 1, 1801, to July 1, 1892, the assets shown at the latter date would not hnve lasted very long, would they? A. Notatthe same rate. But that was duo to the inability of the New York Phonograph Company to get machines sufficiently perfected to satisfy the demand of the public, and get supplies to enable it to continue in its business. The only reason for the dimuni- 80‘1 tion in assets was on account of the failure of tho Edison Phonograph Works to fulfill its agreements • with the North American Phonograph Company, and the North American Phonograph Company’s inability on that account to carry out its agree¬ ments with the New York Phonograph Company. Consequently, the New York Phonograph Com¬ pany was doing business at a great disadvantage, and the New York Phonograph Company found Join P. Bail D_< Q. ill. But, as this report shows, it had only 80D about $15,000 assets, and book-keeping assets at that, on July 1, 1892? A. According to these figures that you present here, 1 should judge that they were all live assets, or in other words, that everything of a doubtful nature was written off to profit and loss, and its only valuable, live assets were reported on the date of July 1, 1802. Q. U2. But even these “live” assets were not sufficient for office rent and running expenses, where cash was required ? A. They weren’t cash assets, but tlioy wore valuable assets. Q. mi- But how could the company continue in business without cash ? A. It had on hand, ac- 800 cording to this statement you show me, over $1,700 and accounts and bills receivable of nearly $17,000. Q. 84. llow did the panic of 1808 affect tho New York Phonograph Company ? A. Not ma¬ terially different from any oilier business concern ; of course, tile phonograph was looked upon as something of a luxury, and during hard times luxuries are dispensed with as far as possible. Q. 35. The panic did not, spare the New York Phonograph Company ? A. No more than it spared any other business. (J. 30. At any rate, the business of the New 507 York Phonograph Company was in a very pre¬ carious condition between July 1, 1892, and the panic of 1893, isn’t that so ? A. No, I would not admit it was in a “ precarious” condition at all. Q. 37. Now, from what you see of this auditor’s report of 1892, don’t you assume that it is a cor¬ rect copy ? A. I do not. Q. 38. Do you believe it is not? A. Iain not prepared to say ; it is simply a copy of something that I haven’t the original here to compare, and I do not remember the original figures and the origi¬ nal report; this is an unsigned and unverified typewritten report of something. made by Mr. Fahnestock and Mr. Lonslnmo, as referred to in this report, were in fact made ? A. I remember that Mr. Fahnestock and Mr. Constable both made loans to the Phonograph Company. I do not remember the dates of those loans. Bat if 1 remember correctly, the company was in the habit of borrowing money and paying loans in the general conduct of its business. Q. 40. This report yon would not regard as a “ball” argument for the stock of the New York Phonograph Company at that period, would you ? A. I should not; that is, these figures that you present to me here to-day. Q. 41. And taking all the statements on the first four pages of this report, yon would regard them as extremely unfavorable to the compnny, wouldn’t you? A. Not necessarily. It was in the beginning of the history of the phonograph business, and naturally the beginning of a business if that kind is more or less variable. Q. 42. Is it your theory that the New York Phonograph Company, acting as selling agent for North American Phonograph Company for the State of New York, really recpiircd no capital, no working capital? A. It required very little working capital. Q. 48. But some? A. But some. Q. 44. What would you have said a reasonable working capital for a selling company might have )een? A. It varies with the amount of business lone from day to day or month to month; he capital required in the phonograph oom- >any was required by the manufacturer of the naehines, not by the sellers of the machines. New fork Phonograph Company was not the munu- ncturer of the phonograph and phonograph upphes, but it was the selling agent of the manu- neturer, consequently did not renuirp -i l-m™ Join P. Haim •D.Q Q. 4fi. But it it did not require a large capital, it 871 did require the service of many accountants as well as agents, and there was required of the New York Phonograph Company a sullicicnt capital to pay the salaries of these men, and to pay the executive officers and oflico force of the company also to meet the office rent, &c., of the company? A. It’certainly required some capital to do that, but the selling agents were paid percentages on their sales — commissions on their sales. Q. '40. Now, to have conducted such a business throughout, the State of New York what, according to your estimate, would have been about the least capital that you should have had? A. I am not 872 prepared to make an estimate on that. Q. 47. Would you think that you could pru¬ dently proceed in such a business with 8:10,000? A. Yes, and a very small proportion of 8:10,000. Q. 48. How small? A. As I say, I am not pre¬ pared to state, but I should think 8:10,000 was excessive for actual needs. Q. 49. When you wore starting in the business of this company, didn’t you have fully 8130,000 in cash to conduct its business? A. We did. Q. 130. Do you know whether Mr. Edison made it a condition that the company should have that much working capital? A. I do not. 878 Q. 51. Do you recall how it is that you hap¬ pened to have such a capital when you began? A. I think that was the proposition made by the organizers of the. company ; that wo should retain 8:10,000 in the treasury as a working capital. Q. 52. 1 now show you two papers, respectively inscribed “ Balance Sheet, New York Phonogragh Company, September 30, 1S92,’’ and “Balance Sheet, New York Phonogaaph Company, October 31, 1892.” These papers purport to be balance sheets — the first for the three months ending Sep¬ tember 30. 1892. and the other for the month Q. 58. You sco nothing fnniilinr about thorn? A. I rlo not recognize Mint handwriting. Q. fi-J. Do you recognize the plan of these re¬ reports? A. I do not. Q. 55. You see nothing about them lo indicate that they were in fact the reports of the Yew York Phonograph Company for the quarter ending Sep¬ tember 80, 1802, and for tile mouth ending October 31,1802? A. I do not remembor ever having scon them before. Mr. Jiicks: Complainant’s counsel inquires from whose custody those reports were pro¬ duced. Mr. Buck iny ham : Defendant's counsel an¬ swers that they are jn defendant’s counsel’s custody at this time. Mr. IHcks: Complainant’s counsel further inquires how they came to be in Lite present custody of defendant’s counsel. Mr. Buckingham: Whether defendant’s counsel may hereafter find it advisable to an¬ swer this question he does not know. Me will take the question under consideration. De¬ fendant’s counsel, however, will add that lie is informed that these papers were found among the papers of Judge Hayes. The papers here shown the witness are marked for identification “New York Phono¬ graph Company Balance Sheets, September 80, 1S02, and October 81, 1802.” Q. 50. Did you know of this suit when it was brought? A. I was informed shortly after it was brought; I cannot remember when. Q. 67. You think, then, you did not know of it before it was brought or just at that time? A I was not president of the company at that time, nor a member of the Board of Hi,., ’ 203 ,620 John P. Haines D-Q. Q. 58. You had little or nothing to do with the 877 company prior to the bringing of this suit for some considerable time? A. Since 1807, I think; Ire- signed, I think, in 1807, 1800 or before. Q. 50. Why did you resign? A. My other duties demanded my wliolo time and attention. Q. 00. Do you still retain a considerable share of the stock of the New York Phonograph Com¬ pany? A. Yes, and have the same stock at the present time. Q. 01. Who represented your interests in the New York Phonograph Company after your resig¬ nation, and up to and after the beginning of this suit? A. No ono was authorized to represent mo 878 personally in the company. Q. 02.. You left your holdings then without rep¬ resentation? A. Except in the representation by the Board. Q. 03. Do you recollect who the members of the board wore in that period? A. I do not; I think Mr. Charles A. Clicever was the president of the company at the time; 1 think I succeeded him. Q. 04. Did you pay much attention to the for¬ tunes of the company during Mint period? A. I did not. I was not able to on account of the de¬ mands made upon my time in other directions. Q. 05. Did you think your holdings in the com- §79 pany of so little value tliat it was not worth while to spend time looking after them? A. No, I did not, but I did not have time to attend to those or many other interests of much greater value. Q. 0(1. But even if you thought those holdings of value, you did not take any pains to look after them? A. I did not consider them of no value — Q. 07. But during that period of two or three years, you took no pains to look after them. A. No, I would not say I took no pains to look after it; I had other and larger interests that demanded my time and attention. Q. GS. At any rate, yon did not look after them during that period? A. I don’t think that I did particularly. Q. 09. Major Fnnston, the vice-president of the company has tcslilied that during his presidency or some time between the Spring of 1901 and the Fall of 1902, he speculated in t lie stock of the New York Phonograph Company, having bought the stock at twenty-live cents a share and later having sold it for a dollar a share. Mow do these figures compare with the value that you place on the stock during that time? A. Absurdly low; I was asked to sell my stock at $5 a share and declined. Q. 70. When was that? A. That was a year or two ago; several propositions were made to me by several people to sell my stock. Q. 71. You would not have sold your stock in 1901 for twenty-live cents a share? A. No, nor for 810 a share. Q. 72. Major Fnnston has also testilied that while lie was speculating in one lot he knew of a block of 1,500 shares which he might have bought also for about twenty-live cents a share; did you hear of this stock at the time? A. No, I did not. Q. 79. Would you have bought and paid twenty- live cents a share for the 1,500 shares if you had known of it? A. That I do not know; I think probably I would. It' w'mt 'vere your holdings in this New \ ork Phonograph Company during the period when you were not represented in the board, that is to say, between 1S9G or 1897 and 1901? The ninute book of the New York Phonograph Com- pady, I understand, is at hand, won’t you please ook at it and lix these dates, if you can? A I •esigned, according to this, as a director January .0,1899 I resigned as president prior to that, I leheve. I had that 1 declined a renomination of ues.de.it in June, 1898, and resi, l h. t January 2(1, 1899; I was re-eleoted March 8, 1902, 883 as president and director. 1 think the stock books will show that I had at that time 351 shares of stock. Q. 75. And tlmt stock you have kept to the present time? A. I have. Q. 70. Are you acquainted with the four gentle¬ men who were active in the management of the the New York Phonograph Company at about tlib time this suit was brought, namely, Hugh M. Fun- ston, Lemuel 15. 15vans, James L. Andcm and Scott Tremain? A. I was acquainted with three of them, but did not meet Mr. Fnnston until my re-election to the directory of the company. 884 Q. 77. Those were the gentlemen who virtually instituted the present suit, weren’t they? A. That I cannot say. Q. 78. Hut what is your impression? A. I was not present and do not know what action was taken, if any. Q. 79. Do you know what their stock holdings were at that time? A. I do not. Q. 80. In the early part of 1890, after the assetsof the North American Company had been sold, your company wrote a congratulatory letter to Mr. Edi¬ son. Was this letter written in an ironical tone? ■ A. Not at all ; it was written in good faith, for 885 the reason that we had had so much trouble in making the North American Phonograph Company carry out its agreement with us, wo thought that Mr. Edison, being the actual owner and the one most interested in the whole matter, would use his best endeavors to facilitate the business of the com¬ pany and carryout his agreement existing between us, and this agreement, which was also ratilied by Mr. Edison personally, and by the Edison Works; that is, the agreement between Jesse 1L Lippincott and tbe North American Phonograph Company and the Metropolitan Phonograph Company, which 880 afterwards became a part of the New York Pho¬ nograph Company. Q. 8'J. When yon wrote that letter of congraln- lation, you did not assume that Mr. Edison had ever attempted to wreck the assets of the North American Company? A. We hud no knowledge of any such matter as that. Q. 82. Do you not suppose that Mr. Edison had done his utmost to make a success or this business at that time? A. [ was under that impression per¬ sonally, but 1 am also aware of the fact that ho was very dilatory in his methods to carry out his good intentions. Ilfs promises to us through the 187 North American Company and directly to the New York Phonograph Company were that he was perfecting a machine that would be ready in a few days, were not carried out with great speed. Q. 88. Has it been your observation that Mr. Edison usually tries pretty hard to make a suc¬ cess of his inventions? A. I always thought he did ; when he does not allow some* new hobby to interfere with the work at hand at that time. Q. 84. Can you name any man, living or dead, wh° lias done^o much for .science and the useful 3 irrelevant^"* ' °bjUCted t0 "s '"""“teriul and A. I do not consider Mr. Edison has done so very much in the advancement of science and tile arts lie has done a good deal to perfect other people’s inventions. 1 1 Q. 80. What other man alive or in history would you place by the side of Mr. Edison ns the pro¬ ducer of the new and useful? A. lam not pre¬ pared to state. 1 Q 80. After the New York Phonograph Corn- pan i or its predecessors, began business in 1888 !U,mmK ,exl*»ses or that company’, 207 John P. Haines X-Q. Q. 87. But a very considerable amount? A. Not 880 proportionately to its capital. Q. 88. You and Mr. William Fahnestock from the organization of this New York Phonograph Company or its predecessors, were the largest and most important factors in its affairs, were yon not? A. I should not say that at all. Q. 81). You, however, have been President of this company or one of the predecessor companies nearly all of the time since their organization in 1888 or 1889, have you not? A. With the excep¬ tion of four or live years. Q. 00. That was from 1898 to 1902? A. Yes. Cross-examination by Mr. Hicks : ° X‘Q- 91. You have been questioned in regard to tlie letter of February JO, 1890, congratulating Mr. Edison upon his acquisition of the assets of tlie North American Phonograph Company. Do you recollect who wrote that letter? A. T do. x-Q. 92. And do you find a copy of it in tlio let¬ ter hook of Now York Phonograph Company here present? A. I do. x-Q. 98. And do you recollect a subsequent let¬ ter. written to Mr. Edison, requesting that Mr. Edison appoint an afternoon when the committee of New York Phonograph Company could incut 891 him? A. I do. x-Q. 9-1. Do you know whether in reply to either of tlie loiters of February 10th and February 21, 1890, Mr. Edison appointed any time when the committee of New York Phonograph Company could meet him? A. 1 do not remember. x-Q. 95. Did the committee appointed in 1890 confer with Mr. Edison in 1800? A. That I do not remember. x-Q. 00. Did that committee in 1890 confer with any person representing Mr. Edison? A. That I do not remember. 802 x-Q. 07. In 1800 did Now York Phonograph Company olTor to soil its rights or franchises to Mr. Edison or the National Phonograph Company? A. It did not, with my knowledge or consent. x-Q. 08. Did New York Phonograph Company in 1808 offer to soil its rights or franchises to Mr. Edison, or the National Phonograph Company or any other person? A. It did not; or did it at any other time as far as my knowledge is con¬ cerned. x-Q. 00. Did New York Phonograph Company in 1800 refuse to enter upon or carry on the busi¬ ness of selling phonographs or supplies within the 80.1 State of New York? A. It did not to my knowl¬ edge; on the contrary, I know that the company was very anxious to enlarge and increase its busi- x-Q. 100. Did New York Phonograph Company make any such refusal in 1808? A. Not to my knowledge. x-Q. 101. You have testilied on behalf of the (tereiidant, with reference to a letter dated October * , 1S94, directed to Central Trust Company, This- tee ; can you state whether on the same day, October J, 1801, any communication was sent by you as President of the New York Phonograph North'^’ '°-J0l"n,K 1IimIi"’ ««»iver ot the Noith American Phonograph Company and to the North American Phonograph Company? v O im Iv-n "oti,iud Mmo day. ofn t i ' y°" k,,ul|y read the notification ”l e NorH,'- i 9.4’ :'°1"1 R- Htmliu, Receiver of 1 (Wta“Sf“oen . . “John R. Haudin, Esq ss;is:cicinpi“wh Dear Sir; The agreement entered into between The 1626 John P. Haines 200 North American Phonograph Company and 899 the Now York Phonograph Company, dated July 1st, 1808, having been broken and can¬ celled by the failure of The North American Phonograph Company, or its representatives, to carry out its terms, we hereby call your at¬ tention to all prior contracts or agreements entered into between The North American Phonograph Company and the Now York Phonograph Company or its predecessors, and request that you immediately proceed to per¬ form all the terms of said contracts or agree¬ ments, and take immediate steps to protect the New York Phonograph Company in its exclu- 898 sive rights to deal in phonographs, phono¬ graph - graphophones, and supplies, in the Statu of New York. Please acknowledge rccoipt of this letter, and without delay advise this Company if it is your intention to carry out the terms of the various contracts or agreements above referred to. Unless the New York Phonograph Com¬ pany be so advised and notified on or before the 10th day of October, 1894, by The North American Phonograph Company, or by or through its Receiver, of its or their intention sg7 to fulfill the terms and conditions of the said agreements or contracts, the New York Pho¬ nograph Company will regard said contracts or agreements as broken and repudiated by the said Receiver, and by said The North Ameri¬ can Phonograph Company, and the New York Phonograph Company will proceed to possess itse'f of, and use and enjoy all the rights and powers it possesses, or will possess in the prem¬ ises, and the New York Phonograph Company waives no claim for damages for non-fullillinent of any of said contracts or agreements oil t lie part of the said The North American Phouo- X-Q. graph Company or of said Receiver, for broach thereof, and neglect to fulfill and keep the said contracts or agreements by the said The North American Phonograph Company, or by said Receiver, or for neglect of the said The North American Phonograph Company or said Re¬ ceiver to keep and perform all orany contracts or agreements between said companies, or for stuns paid hi fiillillineiil of said contracts or agreements. (Signed) Jxo. P. I Li inks, President.” 'Vi,s tl,L“ notification sent to the Aortli American Phonograph Company upon the same day October it, 180-1, identical with the noti¬ fication of that date sent to John R. Hardin, re- culver? A. Jt was. Yo" l,ilVB l,prulof°ro testified in this l, siu0lew-,,tU il lusolul,on passed Soptem- bei 10, 18, M. Will yon kindly stale whether « copy of that resolution was sent to the Receiver °/» rtt'S” . . . “»i .. i*s°w|1"« . . . . • „ " 1 «'»«i'd of Trustees : lUsoUed, Unit the President of this Com 1-ny noufy the Receiver of the North In, erb Nortl. IO|OK“'-1>h C°,,"1,,ln-V> il,,d “'so said The service on'siKMl Company by « * -py‘ of tids,^tfo"1!,‘;0,,,lr,y - i 1 heliograph Company or s-iid Pm ing dato July tirst, 1803, according to the 001 terms and provisions thereof without further delay, and unless said Receiver notifies this Company on or before tho thirtieth day of September instant, that he elects and intends so to do, or that said Tho North American Company intends to and will keep and per¬ form tho same according to the terms and pro¬ visions thereof, the said the New York Phono¬ graph Company will regard said contract as broken and abrogated by the said The North American Phonograph Company, and by said Receiver; and this Company will at once and on the first day of October next, resume and 902 take possession of and exercise and use and enforce all its rights and powers under the original and prior contracts between it and said The North American Phonograph Com¬ pany, as though said contract of July first, 1803, last made between said companies had not been made; and will regard said contracts as broken and repudiated by said Receiver and by said The North American Phonograph Company; and that the New York Phono¬ graph Company waivo no claim for damages for non-fulfillment of said last made contract and on part of said Tho North American Com- 003 pany, or of said Receiver for breach thereof and neglect to fulfill and keep the said con¬ tract by said The North American Company or by said Receiver, or for neglect of said The •North American Company or said Receiver to keep and perform all or any prior contracts between said Companies, or for sums paid in fulfillment of said contract. “And it is also resolved that unless the New York Phonograph Company be advised and notified by the said The North American Company, by or through its said Receiver of its or his intention to fulfill the terms and conditions of said last made contract, the said New York Phonograph Company will proceed and its oflicers are hereby so instructed and directed to enforce, possess and use and enjoy all tlie rights and powers it possesses or did possess, and which existed or accrued under the said former contract or any contract lie tween it and the North American Phonograph Company, prior to September 20, 1891. 2nd. “And it is further resolved that the Receiver of The North American Company bo, and he is hereby respectfully requested and required to notify the New York Phonograph Company by notice in writing to be served on or before the 20th day of September instant, o he Presideat or Secretary of the last named Company, whether or not he intends of !,»' I “! Am®r,u,,n Company the provisions H ,"'<1 s,l|Misting contract be • d hi n ° Nortl‘ A'“°ri«>n Company • d tins Company, and will keep ami perform he same according to the terms and pro na k ing of* sa id tTsuiT3 1,rior *>Z Company and said Receiver liahle to all dam- 907 ages that have accrued by reason of the breach of said contracts or any of them. Please acknowledge receipt of same, and oblige, Yours truly, President.” tie-direct examination by Mr. Huekinyhani : R.-D. Q. 105. Do you find anything in the minute book of the New York Phonograph Com¬ pany minting to the auditor’s report of July 12, 1892, which lias boon offered in this case as De¬ fendant Exhibit 10; if so, please state what it is? 008 A. (Witness reads): “At a meeting of the New York Phonograph Company, held July 12, 1892, tlie Auditor's report was read, approved and ac¬ cepted,” but what auditor’s report is not stated. R.-D. Q. 100. Don’t you find from these minutes that it was a question as to whether the company, in view of tlie auditor's report, could safely con¬ tinue business? A. I find that it was moved by Noah Davis, seconded by William Fahnestock, that the executive committee bo requested to make a careful examination and report “where a saving can lie made ill tlie expenses and advances can be made in tlie price of supplies without injury to the 009 business of the company, witli a view to ascertain¬ ing if the company can continue without danger, and report within tlie next tea days to the Board.” R.-D. Q. 107. Do you assume that these minutes relate to this Auditor’s report of July 12, 1892? A. 1 presume they do. Mr. Buckingham: Defendant’s counsel re¬ quests the Examiner to copy the minutes in full into tlie record relating to this subject, ns tlie same are found on pages 102, 108, 104 and 105. The minutes read us follows ; “New Yoiik, July 12th, 1802. “A. special meeting of the Board of Trus¬ tees of this company was hold at tho ollfce of Messrs. Davis & Work, No. 2 Wall Street, New York City, July 12th, 1802. Present: John P. Haines in the chair, Noah Davis, Win. Pali nes took, Charles A. Cheover and Richard Townley JIaines. “The call for meeting was read. The min¬ utes of the previous meeting were read and ap¬ proved. The report of tho Executive Com¬ mittee was also read. “ It was moved by Noah Davis, seconded by Glms. A. Chcevor, and carried, that tho differ¬ enced existing between the New York Phono- graph Company and the Automatic Phono. Exhibition Co. be referred to the Executive Committee with power. “ The Auditor’s report was read, approved ami accepted. Moved by Clms. A. Cheever, seconded by Richard Townley Haines, and car¬ ried, that a copy of said report bo furnished to any director of this company who may re¬ quest a copy of the same. llln seco,ided and carried that the mattei of prices and the cutting down of ex¬ penses of the company be referred to -the Exe¬ cutive Committee with power. ' Wim!."'lpl,|IOVIitl Noul‘ J^lvis, seconded by nii!t * " ^a'mestock, that the Executive Coni- m ueo make a careful examination and report Ll" ')e lde 1,1 expenses and ‘.The resignation of Samuel Instill was read 3015 John P. Hai ■R-0. and on motion duly seconded, laid on the 913 table. “ The Treasurer was authorized to borrow one thousand dollars if needed. “ On motion duly seconded, the meeting ad¬ journed. “ Attest: “ Riohaud Towni.kv Haines, " Secretary.” “ New Yoke, July 10, 1892. “ A s]iecial meeting of the Board of Trustees of this company was held this day at the office of Messrs. Fahnestock & Co., No. 2 Wall Street, 014 N. Y. City. Present: John P. Haines, Noah Davis, Wm. Fahnestock, Chits. A. Cheever and Richard Townley Huines. “The minutes of the previous meeting were read and approved. The call for meeting was also read. “Tho report of the Executive Committee was read and accepted. “It was moved by Noah Davis, seconded by Chits. A. Cheover, that the saving in exponses mentioned in report of Executive Committee be put in operation by the Executive Com- mittee. lft “It was also moved by Noah Davis and seconded by Chits. A. Cheever, that the Ex¬ ecutive Committee be instructed to put the saving mentioned in their report in opera¬ tion without delay, and continue this line of improvement as far as possible consistent with tho best interests of the company. “The Executive Committee further reported having made arrangements for a process and put the same iu operation for the duplication of musical records. "On motion duly .second oil, Uio meeting ad¬ journed. “Attest: “Rioimto Towni.ky Ha inks, “Secretary.” R.-D. Q. 108. Do yon find anything subsequent these minutes on pages 103, 103, 101 and 105, luting to this auditor’s report? Mr. Buckingham: Defendant’s counsel is nmv denied access to the minute book except as to the three or four pages just referred to. Defendant’s counsel lmd supposed from vari¬ ous questions asked by complainant’s coun¬ sel that these books had been left to the in¬ spection of defendant’s counsel, and that de¬ fendants would thereby bo charged with full notice of all the contents of these books. Mr. Hides: Plaintiff's counsel replies that the minute book of New York Phonograph Company had not been left to the inspection of defendant’s counsel ; that it appears that defendant’s counsel now basin his possession many of the papers of New York Phonograph Company which are wrongfully in his posses¬ sion, and complainant’s counsel further replies that when the officers of defendant will purge themselves in contempt of court ill their re¬ fusal to produce the minute book of the Na¬ tional Phonograph Company and other papers, the same courtesy will be extended to defend¬ ant s counsel which is now requested from plaintiff’s counsel on behalf of defendant. Mr. Buckingham: Complainant’s counsel seems to have missed the point. The point is that it would seem from the record of yes-1 terday, as defendants’ counsel recalls it, that defendants were charged with full knowledge and inspection of these books. The fact oh- 307 John P. Ha R-D viously is that defendants are not to be 010 given inspection of these books, and under these circumstances presumably complainant’s counsel will not now say that defendants have had full opportunity to look through them. Mr. JHcks: Complainant’s counsel replies that the books, papers and records of com¬ plainant have always been open to defendants for any legitimate purpose, but are not here present for any fishing expedition. Further¬ more, that the books and papers of complain¬ ant have wrongfully been taken in possession by the defendant, and defendant has presum¬ ably had full examination thereof. 020 A. T have examined the minute book to March 3, 1803, and find nothing further in regard to the auditor’s report. R.-D. Q. 100. Don’t the minutes show some reso¬ lution authorizing the employment of these account¬ ants? A. I do not find any. R.-D. Q. 110. Do you think you looked very thoroughly? A. At a meeting on May 20, 1802, a motion was made that the books of the company be audited and report of the same furnished at the next session of the Board, which was done on July 12, 1802. R.-D. Q. 111. I find among the minutes of July 021 12, 1802, the following: “It was moved by Noah Davis, seconded by Win. Fahnestock, that the executive committee make a careful examination and report where a saving can be made in expenses and advances can be made in prices of supplies, without injury to the business of the company, with a view to ascertaining if the company can continue without injury, and report within the next ton days to the Board.” Do you recollect whether it was at that time, or subsequently, con¬ sidered safe to continue the business of the New York Phonograph Company? A. I never under- 922 stood that it was considered anything but sale to continue, if I remember correctly. Thu report of tile executive committee at that meeting was quite favorable to continue the business, with bright prospects ahead, also. I was a member of that committee myself. R.-D. Q. 112. Did yon have any particular diffi¬ culty in settling with the accountants who rendered this report— in settling their bill? A. 1 believe there was 'a delay in the settlement for some time, but it was afterwards settled. ll.-D. Q. 113. You thought their charges exces¬ sive? A. I believe there was some question as to 923 their charges. R.-R. Q. 114. The minutes referring to thcso accountants also refer to the borrowing of “§1,000 for the treasury of the company if needed.” Do you understand tlint this §1,000 was borrowed? A. No, I do not. ll.-D. Q. 110. Isn’t it likely that this §1,000 was borrowed from James Constable, June 20, 1802, as appears in Schedule B? A. That is very possible, but in the course of .the business of New York Phonograph Company it was necessary to borrow money from time to time, as previously stated, to conduct its business, in view of the fact that col- 124 lections were slow, and that wo had at that time over §18,000 in accounts receivable. Mr. Buckingham : Defendant’s counsel asks complainant’s counsel if he is willing that the examiner be allowed to look through this minute book and to place upon the record, within Ins discretion, whatever may be found relating to the impending insolvency of the New York Phonograph Company during the years 1891 and 1892. Mr. Hicks: Complainant’s counsel replies that the minute book being here, and the President of the com iulii v. ii. l i„. _ John P. Haines R-C. Q. 300 appropriate at the present time to continue 025 the examination us at prosent conducted, and he requests Mr. Iiaines to now make this examination. R.-D. Q. 110. Please, then, look through these minutes for the years 1891 and 1892 and call atten¬ tion to all of those matters relating to tile affairs of tile Now York Phonograph Company which might indicate its pecuniary disabilities? A. I find nothing. R.-D. Q. 117. About what did the auditors, Whitehead, Clerihew & Briggs, charge for this report of July 12, 1892? A. I don’t remember. ll.-D. Q. 118. Was it more or less than §100? 926 A. I don’t remember. Bc-cross-exnminntion continued. Mr. Hicks : R.-C. Q. 119. You have testified that the com¬ mittee appointed in 1800 consisted ol yourself, ns president, Mr. William Fahnestock and Mr. Richard Townley Haines ; was Mr. Richard l’ownley Haines your brother? A. He was. 11.-C. Q. 120. Will you state when he died? A. Ho was taken ill the latter part of February or the first of, March and was confined to his bed until the day of his death, April 3, 1890. ll.-C. Q. 121. And did that committee have any conferences witli Mr. Dyer or Mr. Edison or with any one else? A. I don’t remember that it did. R.-C. Q. 122. Will you state the interview had with Mr. Dyer in 1898? A. That occurred half¬ past three in the afternoon on April 8, 1S98, at Mr. Dyer’s office j present, Messrs. Fahnestock, Lewis, Jessup of counsel, and myself; and my present recollection of the result of that interview was that Mr. Dyer would not admit anything except that wo had been buncoed. That was the impression loft in ray mind from that time to this. R.-C. Q. 123. Defendant has offered in evidence the min ii l os of New York Phonograph Company, ■Tilly 10, 1802, and I rail your attention to that part which reads: “The Executive Committee further .-l.o.t i„„Jo iimiiiguiiieiils for a process, and put the same in operation, for the development of musical records.” is it your recollection that in .July, 1802, it was the intention of New York Phonograph Company actively to prosecute this business? A. Most decidedly it was. H.-C. Q. 121. Did you ever meet Mr. Itichard N. JJyer prior to the interview to which you have just 080 raSrS0S? 1 did not, to the best of iny Adjourned to 2.30 i-.j,. same day and place. Met pursuant to adjournment at 2.30 i*.m with same appearances as at morning session. ’ onPbSVoM fR;VDLBYi 1 ' * < * 1 ly sworn on behalf of defendant, testified as follows: 030 mreCl examtnali°n !>!/ Mr. Buckingham : tiou?1' WIWth y0'"' "R0* ,,eside,lco “"<1 occupa- A. I Has born in 1800; my occupation •» that of a lawyer .and I reside at Montclair, N J °f motion fort a.,1“rin«on ™'»Plai,. nut's Company, complahi im af v i Monograph Com,,,,,,,. „ Tl" J , T?"'P!' .“o,”.““k,b'“ 1 't '»«■«" 'h» ta",; 2 some u eeks or months back. recall U»WA tr'StllU f",reor this motion, if you ' 1 ll' A‘ 1 re,ne,,lber the motion perfectly well ; it was a motion brought by complainant in 931 that suit against the defendant, for a preliminary injunction ; I heard the motion as presented by both sides in its entirety. Q. -1. Who were the counsel appearing at that hearing? A. Mr. Hicks appeared for complainant, and Mr. Ward for the defendant. Q. 5. Mr. Ward, of Robinson, Diddle & Ward? A, Yes; Mr. Hough was also present at that Q. 0. What Judge heard this case? A. Judge IjucoiiiIiu. Q. 7. Are you able to state whether complain¬ ant’s counsel at that hearing explained to the 932 Court why it was that a certain license had not been taken from the Central Trust Company at some earlier date than it was taken by com¬ plainant? Mr. Ilicks: Objected to as incompetent, irrelevant and immaterial, as having no pos¬ sible bearing upon the issues raised in this, the same case to be heard al 1 1 1 1 1 g A. I remember an explanation at the time. Q. 8. What was that explanation? A. I remem¬ ber these words; I am quoting now as I remember them from statement of counsel: "We did not lake it out before because wo had no use for it 933 before.” Q. 9. Do you know the nature of this license to which counsel there referred? A. £ think so. It was the extension agreement between the North American Phonograph Company and the New York Phonograph Company and the Metropolitan Phonograph Company, if those names are correct, for the first ten years after the expiration of the first period of live years. Q. 10. Do you recall about when it was that this license is understood to have been taken by com¬ plainant from tlie Central Trust Company? Mr. Micks: Objected to us before. 034 A. Not, a great while before the motion in ques¬ tion was heard. I should say somewhere in, as I remember, in about the year 1002 or 1003. Q. 11. At any rate, it had been taken by com¬ plainants after this suit was commenced, as you understood it? Mr. Hicks: Same objection. A. Yes. Cross-examination by Mr. Hicks : x-Q. 12. You understood that the use to which complainant's counsel referred was the use in in¬ troducing the documents in question in evidence, 03fi d° you not? A. No, Mr. Hicks, 1 remember the statement made perfectly well, and you have got to let me think a minute so as to get it perfectly clear where that came in. But my recollection is that it was made at a time when the question came UP ‘on your argument ns to tile status of this ex¬ tension agreement. I do not remember that it was made in connection with the introduction of the documents, though possibly it may have been in reference to your references to the copies which you submitted. x-Q. 13. Were you present at the entire argu- went? A. Yes, entirely so. 030 x-Q- 14. What do you mean by my “ references to the copies which i submitted?” A. I mean just as the answer stands; I do not know how to make it any clearer than that. I simply remem- ber tlmt statement Jas made by you on the argument; I do not know whether you made that in reference to any of your exhibits or just where it came m in the argument; I simply remember that one statement; that is the clear thing in my memory. A considerble time has lapsed since the hearing. x-Q. 10. You remember distinctly, do you not, that upon that argument it was claimed on behalf 1640 of complainant that the rights of New York 037 Phonograph Company, including its extended rights, rested upon the original contracts between the North American Phonograph Company and The Metropolitan Phonograph Company and The Now York Phonograph Company, dated October 12, 1888, and February 0, 1880? A. I could not answer distinctly, but in a general way I believe that to be true. Adjourned to 12 o’clock March 31, 1004. Met pursuant to adjournment at the office of S. M. Hitchcock, 10 William Street, New York City, at 12 o’clock m. * Appearances : Same us at previous hearings. Direct examination by Mr. Buckingham : Q. 1. State your ago, residence and occupation? * A. 41 years old ; reside at 210 East S3d Street and am a real estate operator. Q. 2. You have known of the Metropolitan Phonograph Company of New York, have you not? A. I knew of its organization ; I was one of the original incorporators. Q. 3. Please briefly state thu circumstances of the organization of this company? A. The organ¬ ization occurred at 100-1 02 Broadway, the office of the North American Phonograph Company, in Octo¬ ber, 1888, and the company was organized by Timo¬ thy Cornwall, and another gentleman and myself were the original incorporators of it. They hail tile stock subscribed for — undertook to underwrite so much of tho stock. That was to pay the North American, which 1 believe was $100,000, and then they, under their contract, were to have a curtain amount in the treasury for their expenses; that stock was underwritten by Unger, Smilhors & Co. I believe it was underwritten to the amount of from between till the way from $(10,000 to $80,001), so that where a party that subscribed to live shares would only get about one. Q. 4. llow long did yon continue as president? A. I continued maybe for about a month or two months, no longer than two months as president of it. Q. 5. Did yon, after you censed to bo president, know of this company and its business? A. Yes, 1 gave them rooms in 13 and 15 Park Row free. I charged no rent. Q. 0. Tho capital stock of this company was $1,000,000? A. One million dollars. Q. 7. What was the value of this stock, .as fixed by the underwriters? A. Fifty dollars; it was subscribed at that. Q. 8. So that people who took this stock paid $50 per share?' A. Paid $50 per share. Q. !). How high did this stock get on tho market? A. I believe two or three days afterwards it got to be around 57; I think it was not as high as 57- that was sold on the curb. Q. 10. Aou say two or three days after; do you mean two or three days after the underwriting? A. After the underwriting had been closed and c echoed, what part was to go to their subscribers is what I mean— get their one share out of live snares. If a mail subscribed to $500 worth, he only got a hundred dollars worth. Q. 11. As I understand you, there was a pro¬ vision for a working capital, in addition to a oro- 1642 315 Victor E. BuTke D.Q. vision for an amount of money to pay the North 043 American? A. There was a provision, and the check was passed that afternoon on the organiza¬ tion of the company at 100-1(12 Broadway. Mr. Hicks : Objected to upon the ground that the question calls for (ho con teals of some written document not produced, that being the bust evidence. Q. 12. Do you recollect what (lie amount for working capital was? A. L think it was either twenty-live or fifty thousand dollars. I would not say positive, it was either one of tlioso amounts, I know that. Q. 13. And the Metropolitan Company was to 044 pay the North American Company $100,000 more? Mr. Hicks: Same objection; the contract itself being the best evidence. A. $100,000. Q. 14. How successful was the business of this company, if you know. A. Well, after they were incorporated they occupied at 102; they moved to 13 & 15 Park Row, and they had oflices thereon the second floor. The business did not amount to anything; it was only merely experiments and working out exhibiting and tilings iilto that; they had no real inentno or anything else; it was about all spent out in expenses and things like that up to 945 the time they left 13 to 15 Park Row, and then they went to 257 Fifth Avenue. The thing had always had a “ black eye,” because they could not get tho machines to go ahead with the working of them, but in 15 Park Row they never had more than from 10 to 15 machines in there at any one time. Q. 15. What was the value of this stock within say one year after the organization of the Metro¬ politan Company in the Fall of 18S8? Mr. Hicks: Objected to unless it appears that the witness has some knowledge in regard to the value of the stock. 940 A. T sold slock in 1800, 1801 and 1802 and so on. I sold it always from 82.00 a share up lo 80.50 a share. The majority of it less than 84.00 a share. Are yon speaking of New York and National? jVr. Buckingham .-•No, just Metropolitan. (Witness continues ) I wilMnke that. Wick; I never sold it as low then as 82.00 ; [ think tire iivor- ngo wasat 85.00or8ti.00a share. I thought you were speaking of Now York and National stock; very' little of the stock was transferred between the New York and Metropolitan, because they never thought it was worth while to get a transfer of it. Q. 10. \ou refer to the New York Company; do y?‘! ,meiln tl,e Ne'v r°rk Phonograph Company which was organized by Mr. John P. Haines? A. I mean the New York Phonograph Company organized by John P. Haines and Metropolitan thnUueigwl into the New York Phonograph Com- md ‘ n"-lt is, nSay’ Tho Motr°l»olitaii Company and Mi. Haines Company were merged into ono company? A. They were morgod into ono coin- •ind Ms b! ‘h 1,1 P‘ HilhlUS u,ucted Pfusidont and Ins blether secretary and treasurer, if [ am not mistaken, or secretary tliat I am pretty positive 948 Q. 18 Then, as I understand you, when the number the Metropolitan Company could no’^^T^ proved ■Mr. Buckingham: Yes. (Witness continues:) In the Bolting & Packing 949 Company they undertook to exhibit it as commercial article. They had tho whole place there, and all the different clerks in the ofiice had speaking tubes alongside the desks obthein, and had one in a cer¬ tain pdsjtioil in thewdilbe that hud a recorder there, and they wore supposed when they whistled from the speaking tube out of the other part of the room for her to put a cylinder on there and it would take the dictation, then she would take that cylinder off and copy a letter off on the typewriter. The thing proved a dead failure; it never was used, because they had no reliance on it. The reason why it was no use, was because they could not go 950 back and correct, when they corrected a mistake it would go on, and when she came to tiie end of the cylinder she would see tho mistake; that was sup¬ posed to bu a practical demonstration of the phono¬ graph at that time; that was supposed to be prac¬ tical. Q. 20. Was it your impression then that these demonstrations were not very successful? A. Not as a commercial article. Q. 21. Then am I to understand you that the stockholders of the Metropolitan stock, or many of them, thought their stock of too little value to bother about transferring it? A. Yes, that is so. 001 Mr. Hicks : Objected to as the witness can¬ not possibly know tho thoughts of the holders of tiie Metropolitan stock. Q. 22. You have just heard the objection of complainant’s counsel. Please state whether you have any knowledge of the thoughts of the Metro¬ politan stockholders? Mr. Hicks : Objected to as hearsay. A. I virtually had the control of it, and sold it, that is, the stock part of it. Q. 23. You discovered while selling this stock that the holders of it were quite williug to let it go? A. Were quite willing to let it go. They would have taken anything for it; in fact there was only one place yon could sell it. Q. 24. The merger of this Metropolitan Company with the New York Phonograph Company number one, occurred about when ? A. That occurred when they wont up to Fifth Avenue. It was about 18 months or so after the incorporation of tho Metro¬ politan Company during tho year 1800. Q. 25. Now, what was the condition of this New York Phonograph Company, if you know, during the year 1801 and 1802; did its business, in your opinion, enjoy any degree of prosperity? A. It was a general opinion of the whole thing that it was always running behind. Mr. J fid's : Objected to as hearsay. Q. 20. Who entertained this opinion, if you know? 1 il/r. If id's : Same objection. A. Ail the large stockholders. It was a sure thing that they did, because they sold their stock all the way from §2.00 to $0.00 a share. Q. 27. And you handled a good deal of this stock at these prices? A. I have handled a good deal; I have sold as high as 2,000 shares at a clip. Q. 28 Did you handle all of this stock which as sold at that time? A. No, I would not say t lut; there was a man by the name of Evans, and he "as selling to a party in Broad Street, I do not remember the name. • Q. 20 Do yon mean Mr. Lemuel IS. Evans? A. Mr. Lemuel ,15. Evans theEdison Building .'p^the 7 th Voorj'jA urns B. ra* FIX*; tell you. I controlled and sold all the nickel-in- the-slot stock, I believe it was 4,000 shares, at one clip for $2.00 a share, during the time that they were up in Fifth Avenue: that was in 1898 or 1801, from 1892 to 1891 I sold that. Q. 82. You mean the nickle-inthe-slot stock? A. Yes. Q. 38. That, however, was not the stock of the New York Phonograph Company? A. That is where their bright prospect was, in that one machine, that was tho only revenuo that was com¬ ing in those days. Q. 34. That is to say, the nickcl-in-thc-slot ma¬ chine or company for operating such machines, was the only thing that gave promise of success? A. That is it. Q. 35. And this stock you sold for how much? A. $2.00 a share. Q. 80. Were they $100 shares? A. I forget, but I guess all tho company was $100 a share; I can vouch for that very nearly. Q. 37. Now, during the year preceding the great panic of 1803, about how well was the Now York Phonograph Company getting along, if you know? A. I never heard, and to my own knowledge, from figures at dilTercnt times, the New York Pho¬ nograph Company never made a dollar. J fr. Ilicks : Objected to as hearsay. Q. 38. But was it getting on a little better in 1892 than it was in 1890? A. It always went back; from the first time they never earned money enough to support it. Q. 39. And how wore the affairs of this company getting on when the panic of 1S93 broke? A. I do not understand your question. Mr. Jficks: Objected to on the ground that it does not appear that tile witness lias any knowledge whatsoever in regard to the affairs of complainant at that time. Question repeated. (Answer continued) I used (o see tlic monthly records and I never saw any progress. Jl/h /lid's : Objected to as secondary evi¬ dence. Q. 40. Is it true, as complainant’s counsel says in his objection, that yon had no knowledge of the allairs of the New York Phonograph Company at that time? A. Well, I have positively always saw tlie reports when they came down aronml each month. from the company. Q. 41. Yon were in position to take account of them rei>°rtS? A‘ 1 wasi,,aP°sitio« t0 receive Q. 42. It was your business to roceive them? A. It was not my business, but it would coinein my way on account of being connected with Mr. Cheever. Q. 48. Mr. Cheever was keeping close track of ins matter? A. Mr. Cheever was keeping close tiack and was consulted at all times. Q. 45. Who was J. D. Cheever? A. He was thatlo c' “tlTT1’ men that f0nne<1 tllu syndicate ican ComptnyP 10,1°el,,1> ‘ r,'°m tl,e North Amer- a. He b£i;: t£ierof c,,arles A- oh“ ? yo°t°JC oXn n SoJ^eo^^",,■,tc0, i n been during the yenrTwi and S? U“ * ^ A Itiul T 0bjected to ils immaterial. A. it had no better value. Q. 48. It could not have been much worse? A. It 1648 Q. 40. Did you know that local phonograph 1 companies at or shortly after the organization of tlie Mot ropoli tan Company were organized for other States? A. Well, the phonograph business— it was the Metropolitan and New York State, then the New England, then it went all over the differ¬ ent countries, Kansas, Georgia, Mississippi, Vir¬ ginia, North Carolina, South Carolina, Tennessee —I had all those stocks. Q. 50. Do you know Itow tlie phonograph busi¬ ness succeeded in other States? A. There was only one that I heard from — a good report from — and that was Kansas. I had ti quotation tit one time of U5, but I could not get a buyer; someone * offered, but I could not deliver it. Q. 51. What became of the Kansas stock? A. I don’t know, but there was no market for any stock outside tlie Metropolitan, New York and New England. Q. 52. Just what do you mean by your last answer, that tlie stocks of the other companies, other than tlie New York and New England, were of no value? A. The stock of New York and New England, had no value excepting New York and New England, tlie others you could not sell — excepting tlie Kansas', there was a report that it could be i sold for 07 ; I failed to fiud a purchaser for the Kansas stock. Cross-examination by Mr. Hicks: x-Q. 58. What was your business at tlie time of the organization of the Metropolitan Phonograph Company? A. Private secretary to John H. and J. D. Cheever. x-Q. 54. How long did you continue thereafter to be private secretary to John H. and J. D. Cheever? A. Up to 1001. x-Q. 55. What was your business after 1001? A. Ileal estate busiuess, building. x-Q. 50. How long ,|j(] yo„ uoiilinuu in that business? A. Building, one and a half years, since then real estate. to d"in’?fi7'v y°U t*'° IUil* usti,l'e business to-d-o’' '"a ^ain "i U"8"8°l1 !"'y stock business x-Q. 59. Were you ever a stock broker? A. I never was a stock broker. x-Q 00. How did you come lo be elected the porators. ° to.Xn?M01' H0,V •'«• of your x O w v f 'k ,,e“ of -services. ;.q S' \vh'i\ rT'? A‘ From Ml' Weaver. Q. 00. \\ Inch Cheever? A. Both of them A. 'until Isaw it\v'i!°n8t all, and then I t0 "n,ount to "otl‘ing x-Q- 07. I asked how long you held it? «■ high as 856 for it ™'"V»nr, got as in regard toea'ch o!m yo“ ilns'ver tlle question fully x-Q. 00. Iiow Ion* AM 'US 1 'V0,lkl se]1 it- eng did yon actually hold it and 1650 Victor E. Burka when did you actually sell it? A. I did not com- 007 inence to sell stock until about a year afterwards. x-Q. 70. I am speaking with reference to tho stock which you say you actually owned in your own intorest; what I want to know is when you parted with the last share of stock in the Metro¬ politan Phonograph Company? A. I think the last I got was in 1801— in 1800, I think I sold my x-Q- 71. You say you continued to be president of the company for two months, is that correct? A. No, I said from one to two months. x-Q. 72. After you censed to bo president of the company, what connection, if any, did you have 008 with the company? A. I represented the Cheevers there, being in tho building, Mr. Clieever’s build¬ ing, I was up there most of tho time in the ollice. x-Q. 73. Wore you in the employ of the com ■ pany? A. I was not. x-Q. 7-1. Were you paid a salary by tho com¬ pany? A. No. x-Q. 715. Were you a director of the company after you ceased to be president? A. That I am unablo to say; 1 was a director after 1 resigned from tho presidency. x-Q. 70. When did you ceased to be a director— " at the time you ceased to be president? A. That I 900 would not want to state positively. x-Q. 77. Did you say that you gave Metropolitan Phonograph Company a room at 13 Park ltow for the conduct of its business for nothing? A. I gave them two rooms. x-Q. 78. Those rooms were owned by you ? A. I was the the owner of the building, owned by Mr. Cheever. x-Q. 79. Then it was Mr. Cheever that gave the authority? A. I had the authority to give them— I acted us his agent and I had full authority to do what I pleased. 070 x-Q. 80. Tt was not your property that was turned over to the use of the company? A It was; yes, virtually. x-Q. 81. Von hold the legal title to it? A. I was tlie general agent for Mr. Cheever in that property. x-Q. 82. Which Cheever? A. John II. Cheever. x-Q. 83. Now,; yon have spoken about certain underwriters subscribing for stock of Metropoli- tan Phonograph Company. Did yon ever sue the subscription list? A. 1 did. I had it in my hand every day during the time the subscription was being taken. 071 x-Q. 84. Why don’t you produce it to-day? A. 1 haven’t the slightest idea where they are. x-Q. 85 Made any effort to find them? A. I did not. x-Q. 8(1. Whose list was that? A. Unger & Smithers There were three or four books out for C u ries A fM St°Ck’ Mr- Cheever, Mr. C haries A. Cheever, and two or three other parties he stock a , Tri’ "".‘l they g0t the ■nbncrfptloM to the stock and then Unger & Smithers had the orig inai subscriptions. Say Mr. Cheever won d hafe §50 direr tlv r,. •• 100 "tie subscribed for at At! i ! ' fl,e C0lnPuny, do you? A. I didn’t say that, sir pay for the righ of Rer r'"g “,,,tal’ i,nd ness in the Metronol I. !-! - °1,0l,ti,n to Ao bl'si- x-Q. 884. That money was paid, was it? A. That money was paid; §100,000 to the best 073 of my knowledge. x-Q. 80. Now, the stock underwritten to which you have referred, was stock that had already been issued by the company, was it, as fully paid? A. That I could not tell. x-Q. 90. Did Smithers collect the money to pay over to the Metropolitan Phonograph Company? A. I don’t know Smithers. x-Q. 91. I am talking of the linn of Unger, Smithers &■ Company that took the subscription? A. 1 do not know either one of them. x-Q. 92. How do you know they took the sub¬ scriptions? A. Because I saw the subscription 974 blanks made out in their name. x-Q. 93. Did you ever subscribe to any of the stock? A. I subscribed as an incorporator. x-Q. 94. At par value? A. Yes. x-Q. 95. IIow- long did you say the Metropolitan Phonograph Company continued to do business at 13 Park How? A. They did it until they went up to 257 Fifth Avenue. x-Q. 9(1. How long was that? A. I should judge it was about 18 months. x-Q. 97. What did they go up to l'iftli Avenno for? A. Well, they wanted to get more elaborate quarters, I guess. x-Q. 98. Did they get more elaborate quarters? A. I should say they did. x-Q. 99. Did you ever go up and see their quar¬ ters there? A. I was there many a time. x-Q. 100. How elaborate were those quarters? A. It was a big brownstono house. x-Q. 101. And what part did the Metropolitan Phonograph Company occupy? A. The whole building. x-Q. 102. Do you know how long they continued to occupy 257 Fifth Avenue? A. They had it over a year. Amme?0(iAA,Ye.s'VU,'t r,’<,"l tl,uru tH 2r>7 fifth X'Q- 107. Now, von nhont you,. mitm „f B s>'“k«" considerably A. I singly" ook 'i1'1" u,,J,s««i»y rtlcl you act? P“Hy ami told them^o get i‘".(1 gi,ve H t0 » for them. fett "lmt l'«oo they could r°>>» H. Cheever ? °'‘v"'e,u as an employe of o do with it whatever ’ ‘ G lonvor Iliul nothing ^•Q.100, Who did? Alin. XwVo?" L‘ M,,ni" ‘°Ver’ A> • A. ClwovurZuiTotm T “if "S.for J- A- Cheever, :tl"K for them; bi t f A‘ 1 *■ not 3ck °f W«tropoma',;'p}lt5i; nd'o U,nt y°" solrt “iel" w1, " *'“'re “,“r Tllt Jl|etr‘TJUNl-m1'^t'! p.'"' !lnv" 1804? None was over bought or sold outside of New 070 York, New Knglund or Metropolitan. x-Q. 1 1*1. How do you know what was done with the stock of t he other local companies? A. Because 1 had plenty of it I could not sell. x-Q. 110. Do you know it was not sold in the States in which it was incorporated? A. I could not say that, hut I could get no market for it. x.Q. 1 10. Did you try in the City of New York? A. No, wo tried outside the city also. x-Q. 117. Where did you try? A. At the home office of each company. x-Q. 118. Did you go to Kansas? A. I did not; I communicated with the representative of the 080 stock who followed it in the State of Kansas and those places. x-Q. 110. But you don’t menu to say that none of the stock was sold, do you? A. They wore originally to form the company, but no market, for they had no machines. x-Q. 120. How did you know they had no machines? A. Because they didn’t have any. x-Q. 121. How do you know they didn’t have any? A. Because I was there continually from day to day. x-Q. 122. Did you say they tried to get machines? A. I saw the orders begging for machines. 081 x-Q. 128. Do you know that there was a refusal to give machines; how hard did they try? A. They tried mighty hard to get them, and that is tho reason they did not do any business. There was nothing doing, and wo could not get machines to do business with, except once and a while for exhibiting purposes, and all they could do was to get machines for exhibition purposes, that is all ; they could not get machines to sell on the open market; it wasn’t the intention of tiie Phonograph Company, when it first started, to sell machines outright, they were not allowed to sell them under the charter. 328 98~ x-Q. 124, How many machines did tlioy got? A The whole time they never got more than 1 to 20 machines, in the whole building. x-Q. 125. And that is all they got? A Yes us^n^m^me?11’! ihomlS;^;;;:1'1 . . . *«• ,oia 10 -* C,h‘ \2,7- yor vur ",ilke of tin Isoith American Phonograph Company or tin hdison Phonograph Works as to the si.pplyinit o mn ‘""3V°Ttl.le 1Metr°I’0,il““ Phonograph^ Com- noo 1 . .J • ,;V-r 1 lliu1 repeated inquiries come into me ' M ui „“"b« H.‘ " ",,d 1 “» x-Q. 128. And what reply would yon make to il,S0mer? A- Si"‘ply that there were no ti.:^::- ?°w ?° y°u iicco,"'t the biiara 0r ^#5*5^=?^= wtioi. ,u"m “»«m- .f ' iz zz-jzzsrzz -- f phonograph is in - ! ’ > ou k,1“'v that the Poses to-, lay on a consider! i11SBr°J' dictiltio" pur- A. I do not <-1Ub,u scale. do you not? 320 use the phonograph for dictation purposes in 085 New York City to-day? A. I would like to see one or know it. x-Q. 135. Don’t you know that the stenographers in the Circuit Court of the United States for the Southern District of New York make such use of it? A. I do not see how they could. x-Q. 13(1. How long has your acquaintance with the use of the phonograph been kept up? A. I have seen the original one and tried it and every¬ thing else up to a few years now, for eight years, anyway, since the original incorporation of the Metropolitan Phonograph Company, and I never knew a cylinder that would last more than six 08(1 months. x-Q. 137. Have you any knowledge in regard to the use of the phonograph for amusement pur¬ poses? A. I won’t say that I liave an expert opin¬ ion, 1 only have just au experimental opin¬ ion of it. x-Q. 138. You do not know in regard to the ex¬ tent of the use of the phonograph for amusement purposes and to what degree that use has increased from year to year, do you ? A. It has increased now, it is better now than it ever was; that is all it is used for. I never hoard where it is used coinmer- cially. 087 x-Q. 1311. You don’t mean to deny that the phonograph is used for commercial purposes? A. I mean to deny it from my own personal knowl- . edge ; no, I never heard of it. x-Q. 140. All you mean to say is that you haven’t heard of it, you don’t mean to deny that it is actually so used, do you? A. From my own personal knowledge I would say it could not be used commercially. x-Q. 141. Have you ever used a phonograph yourself? A. I have many a time. x-Q. 142. When wns tile lust time that you x-Q. M3. Now, you said there was only one place at which stock of Metropolitan Phonograph Company could bo sold and that was in the Edison building? A. That was the only place I ever heard of it being sold. x-Q. J‘U. Who was it besido Metcalf in the Edison building that dealt in Metropolitan Phono- graph Company stock? A. Metcalf was not in the Edison building. The only people I knew of that dealt in phonograph stock was one man in the Edison building and James B. Metcalf. . 1f\'V,,° was ‘Eat one man in the Edison building? Jhat I could not say; I could say a name, but I would not swear it was the name. x-Q. MO. What is your best recollection? . A- A t1hemimuor No>’us; 1 aoi'El not tell you the number. 147; Froni wholl> did Noyes purchase that . • *- x-Q. MO. Do you know to whom anv of the o°f0i^e°v day! "0gl'lI’h Co'»Pany? A. Not in those x-Q. 153. Did you say that? A. I said no «i,.. it never earned euougli to support itself. ’ ’ x-Q. 104. It maintained its office, did it not’ 001 A. Yes, it did. x-Q. 155. You don’t know that it made default in payment of its rent, do you? A. No, I do not know that; I would not say that; I know; I never got a cent out of it for rent. x-Q. 150. Wern’t you mistaken in saying that Metropolitan Phonograph Company continued at 13 Park Ttow for eighteen months; isn't it the fact that at the lime Metropolitan Phonograph Com- pany consolidated with The New York Phonograph Company, it was then at 257 Fifth Avenue? A. I believe to the best of my knowledge that they con¬ solidated and went to Fifth Avenue; there is where 002 tho consolidation took place. x-Q. 157. Tsu’t it tho fact that before tile con¬ solidation, Tho New York Phonograph Company had offices in the upper part of the building and the Metropolitan Phonograph Company had offices in the lower part of the building of 257 Fifth Avenue? A. I think you are right, yes. That was in tho first part of the lease, the first time they went there. x-Q. 158. So that Metroplitan Phonograph Com¬ pany had not attempted for any considerable length of time to do business before it consolidated with Tile New York Phonograph Company, that is cor- 993 reet? A. They tried very hard to do business. x-Q. 150. And failed because they could not get machines during that time? A. Failed because they could not get machines; had nothing to do busi¬ ness with. x-Q. ICO. But the length of time during which they tried before consolidation with The New York Phonograph Company did not exceed a year, did it? A. About IS months. x-Q. 101. You know pf the use of phonograph records for amusement purposes in 1S90 and 1891, do you not? A. Yes, to my sorrow, I do. 004 Re-Mrcd examination— Mr. Buckingham : R.-D. Q. 102. Am I to understand from your cross-examination that you sold some of your 200 shares of stock some 15 or 20 days after the incor¬ poration of the company? A. Yes. R.-B. Q. 103. About what did you get for this stock? A. $50.00. 5 18 11. -D. Q. 104. How long wore you selling out this 200 shares of stock, or didn’t yon sell it out? A. Didn’t soil none out the first of the year. ,77 Jillt 1 understood you to say that you did sell some for $55.00? A. $55 ; ten shares. 005 • Q’ 10C' t,lis "’as some that was sold • immediately when it was up high? then you had 100 shares left? A. That was ten shares that I got as a commission or something. nomi'nf* Q' Y°" menn 10 Sl,y that you sold one of your first 200 shares? A. Isold none of X“20?' “i ,■ «*■ .» a»t The Inst shares I sold in the month; say within piny -'S T 'ITlrr^1' ■l‘° inuorl)ori'ti"« of the com- SimrtL a f°r !t! U'at t0,‘ s,li,ros that E. S. bapoiates gave me ; that he had got. 10S' Abol‘t when did you sell your 200 shares? A. About all the way fromVs inontim 000 l,alf ilfter tlle i,,colT>oration. yo 'gOtS;. |!L n°,yOU Td “*"«* b°" much T J ,r 1 stook lJor share? A. The highest 2&ra.ss«BreS issues in this Le. ® whiltever the A. I always thought well of it as an arhihi.W !toy, but as a cotnmorcial instrument I never 99 thought it amounted to anything. , R.-D. Q. 172. You have said, as I understand your cross-examination, that you never saw, in tiie oflices of the Metropolitan Company, more than 15 or 20 phonographs at a time? A. No, sir; I did not, at that Park Row building. R.-D. Q. 178. Were those that you saw put out for U6o to customers, and others brought into the company’s offices? A. They were supposed to be brought in. R.-D. Q. 174. But the Metropolitan Company did do a business in getting these machines and of putting them out? DO! Mr. flicks: Objected to upon the giound that the question is lending and that the wit¬ ness has already testified to the contrary — to the effect that only 20 machines were put out, and that it is an attempt to get the witness to ; change his testimony on that point. Mr. Buckingham: Defendant’s counsel i i does not understand that this is the purport of the witness’ testimony. The witness is now requested to state what the facts are. A. As fast as they could get them. R.-D. Q. 175. Plaintiff’s counsel has stated that you have testified that the Metropolitan Com- 099 pany never put out more than one or two machines ; did you intoiul to make such a statement? A. During their existence, is that what you moan ? t . Counsel: Yes. (Answer continued) No, I did not. Mr. flicks : Complainant’s counsel referred to that part of the testimony where the wit¬ ness stated that while the Metropolitan Pho¬ nograph Company was at No. 13 Park Row it had put out but one or two machines bn Victor E. Burke ■h-C. Q. . '*• J,u- 'on Iliivu just heard Ihostiitcmont of complainant's counsel, are the facts as stated by bia. correct as to the puttiugoutor phonographs when tlie Metropolitan Phonograph Company was nt the 'lark Bow offices? A. When the company was at the 1 ark How office, they had their ollico there ; tiioy had from 15 to 20 maeliines on ex¬ hibition there; outside of that, to my own per soa.il knowledge, they might have had from one to live machines out, but as regard to rental as com niercial use, they did not K.-1X Q. 177. What do you mean by “ from one 100llSii;Sr°"t?” 'f'huy had them out in t178r' ,"r|,,U,;e 'V(ire 1,1 UX oxhibited, for c, i A‘. 1 '0ll t know "',K*,,L*- »»y Place par- mini, except you come down and say you would ai d we 'ilVC, 8xl,ib,tod ilt Jronr house that time, and we would go up and bring it back again. exhibit* W m ,Yo" m«an these machines weie exhibited at evening entertainments, *.c A. 1 es, that is it exactly. records tll8jr "SBl1 " k° thc.r A" On*?!', ’81 ' 7-he'e were the recoi'tls used? t u n 1Q! Iil«r nes i,‘ the b"ilding. A.’ NoQ' you ale Mr'0™ !'0COllls ,,seJ tov Profit? ingnow?’ Ung i,bout Park Kow build- Counsel : Yes. ^-cross-examination by Mr. Hides ■ that subsequently you sold shares of stock at 1003 $3.75, $2.75 and $2.50 per share; when was the last of these salos made at those low Ihaires? A. In 1891 and 1893, from 1893 to 1895. K.-C. Q. 18-1. And how do you account for the falling of prices in the stock of Metropolitan Phonograph Company during these years? A. Be¬ cause the business did not amount to a row of pins. It.-O. Q. 185. Why didn’t it amount to a “row of pins”? A. Because they had no business. K.-C. Q. 180. And why didn’t they have any business? A. Because they had nothing to have business with. K.-C. Q. 187. And wlmt did they need to do loot business with? A. Brains in the latter part of it, 1 should say. K.-C. Q. 188. Weron’t you in the business? A. No, sir. K.-C. Q. 189. Do you say that Mr. .1. D. Cheever had no business capacity? A. No; at that time lie had great business capacity, but he was not the real spirit in it. K.-C. Q. 190. And Air. Charles A. Cheever, did ho have no business capacity? A. 1 am talking about the parties that had charge of the business, all the way from the lime Mr. Charles A. Cheever resigned as the president of the company, up to the 1005 K.-C. Q. 191. Against whom particularly are your rumarks directed? A. To tile general man¬ agement entirely. K.-C. Q. 192. And particularly what individual or individuals? A. No individual ; I say the gen¬ eral management of the company, something must be wrong. K.-C. Q. 193. Now, at the early stage of this business, it required considerable brains to do busi¬ ness without machines, did it not? A. You could not do business unless you had machines. 1000 H.-C.-q. 39-1. As I understand you to testify, in your opinion, luui tliere lieon sulliciont brains, the busmess could have- been done, notwithstanding of ,."ilt0“,'L's? A. The reason 1 say that non , non is the business being done now? timoVn m>' Y°" t,,ink’-t,,e". at the present time ,f there was m.ilicient brains in il,0 New Yolk Phonograph Company, it would be able to do a large business in phonographs and supplies? A. I think they are doing it now V'0: York Phonograph Com- panvitfa' T P,,0'«»gniph com- ab0,,t thu PhmrarSihp7, B“ty?U tl,ink tlmt if Now York and ms ’ ^0,"1,,,ny “ not to don’t you? A. Yes? HU „ ‘ ymr 18U0- I don’t think the nl.mm ! t0 1 10 presont ti,r|o. ~»u r™uK£ ,rh"” '* ‘ I never thought it U u ,v"s incorporated. K. c.Q°«{;iuir I;iru;:t2rhine , ■ machine to-day? a Nr J , l commercial 11 n n on" „ , iN0> 8,r; I do not. factored and sold .'"‘T’ TS' wl" a °met,‘iug ,ike ai“ y’ 'VU,lt do you regard as a com- r 337 ineroial instrument? A. T mean taking dictation 1009 or something like that, as an instrument out of which large money can be earned. The original opinion of the phonograph was to use it commer¬ cially, where a person could talk in it and pass it over to a stenographer to take the record of it. H-C. Q. 20-1. And you don’t think that is being done to-day? A. It was being done, then, and could not be done. H.-C. Q. 205. Do you know anything about the business being done by the American Graphophone Company to day? A. I do not. H-C. (J. 200. Did you ever hear of the Ameri¬ can Graphophone Company? A. It was a phono- 1010 graph and a graphophone. There was no end of patents of both of those, I believe. H.-C. Q. 207. Don’t you know that the Ameri¬ can Graphophone Company to-day puts out phono¬ graphs in large numbers for such commercial use as you have referred to? A. I know nothing about it. I never heard of it. H.-C. Q. 208. You don’t know that is being done, do you? A. I don’t know anything about it at the present time. H.-C. Q. 200. As far as you know thousands of phonographs and gntphophones may bo in use to¬ day for such commercial use? A. I never heard 101 i of one. H.-C. Q. 210. Did you in 1800 see the possible development of the business to be done in the phonograph? A. No, sir. H.-C. Q. 21 1. You didn’t see that? A. No, sir, 1 didn’t; I saw the future in the phonograph if they could make it cheap enough to put it on as a play toy, that is all it was. Adjourned to 11 o’clock a. m. Saturday, April 2, 1904. 1012 Nkiv VoitK, April 2, 1001. Met pursiiiint; to adjourn men i. at the office of S. M. Hitchcock, Esq., 115 William Street, New York City, at 11 o’clock a. .11. Appearances: Same as at previous hearing. Adjourned to Monday, April 4, 100*1, at 11 o’clock A. .11. Nkw Yoiik, April 4, 1004. iMet pursuant to adjournment at the office of S; ' Citjq auTo’dock a’m 'V’illi“m Stret!,;> Now York Appearances : ' Louis Hicks, Esq., for Complainant. By Mr Ilour/h : i 'll'"' y°ZT' «"■! ocoiipntloii? N. Y. U' "I,lttlle"s Sons, Brooklyn, Q- t- I.. »tat t,„ci y” "I ! 1,1 is“°- and clerk. 1 i A. As a typewriter Q. 0. And how long did yon remain a. a... John Pi 330 Q. 0. And in what year was that, if yon re¬ member? A. To my recollection, it was about the latter part of 1804 or the beginning of 18015. Q. 7. So that during the time that you have in¬ dicated, were yon continuously in the employment of ^tho North American Phonograph Company? Q 8. Did yon occupy any oilier position than that of stenographer before yon left the employ¬ ment of the North American Phonograph Com¬ pany? A. In the year of 1803 and 1804 I acted as 1010 bookkeeper and cashier. Q. 9. As bookkeeper were yon in charge of their books? A. Not entirely. Q. 10. Who else had to do with the books be¬ side yourself? A. Scott Treninin and Cleveland Walcntt. Q. 11. Did you become familiar witii the books of the North American Phonograph Company? A. Yes. Q. 12. Will you look at the three books which are lying on the Examiner's table, and tell me whether you recognize them, and if you do recog¬ nize them, what they are? 1017 (Witness examines books.) ‘ A. .Journal 1 of the North American Phonograph Company ; Ledger 1 of tile North American Phono¬ graph Company ; and Ledger known as “A” of the North American Phonograph Company. Q. 13. Did you, during the time of your employ¬ ment by tile Nortli American Phonograph Com¬ pany, work on all these books? A. I did. Q. 14. Do you recognize them as books of the Nortli American Phonograph Company? A. Yes, 1668 MS stole .tatter „ book upon winch you worked? ^ ^(Witness looks :it ledger.) Q. 10. Page I of this Ledger J purports to be he account of the Edison Phonograph Work!? A No^sir ^ * 1610 ,nat*° *n y°,lr handwriting? WniJtt. ^ Wl,0SU IU,n,1'V,'Uin«? Cleveland mowrtrv™ "°°i“ »' “» «■»• ”7“m ;'i" or 5 it? Q. 20. This particular book, Ledger No 1 w,» nt one time in your charge? A Yes ’ ’ «.« witiri*.' rri *•'“ the other books of account t b°?k i,,,d proper entries at the closing ofA‘the%!rink° 11,0 1020 company. b by 11,0 treasurer of the •‘SigefifN. a!^p 1 Go » took r-- identilication. °” *'s ,,,:,1'ked for Q. 22. Look at the bnnlr »* . whether the account headed “ Ertf ' A»i 'l"‘l stiltu Works,” upon page So tlm ?,fm,P1;on'»»" attention lms been called by Mr Hough, in regard to the particular entries to 'which y 7 been called by Mr. Hough? x-Q. 82. Whether those entries are correct or incorrect, do von know? A ti.,,„, i , , of that. ' A. r have no knowledge , *;Q- f • All I you know is that these are the books of tlie North American Phonograph Com- l«tny, and that they contain certain entries in the 102fj ‘‘^loveland Wnlcntt? A Y. “rur'onri','°' . 1020 became President of thl ' Nortli1'''^ S‘l."",fcI1 T,ls,,)1 graph Company as tlJ ^ American Phono- sr-'^fassr^-sja m»;L3p, ^ ■»« graph Co,n« “ No'' ' American Phono- to the tinie thauLVcomnan v w 1 tlo"'M of the receiver, Hardin 1 di,] 1. 1 '!!t0 11,0 llall(,s knowledge. ’ d,d 1,8 not? A. To my x-Q. -10. Ho yon know of any other president during that period? A. I do not. x-Q. -II. Who was the head of the Edison Labora¬ tory in May, 1892, and subsequent thereto. A. Ido x-Q. -12. Do you know that Thomas A. Edison was the head of it? A. I cannot tell you. x-Q. -13. Do you know anything about the Edison Laboratory? A. I do not. x-Q. 44. Never saw it? A. I have been there. x-Q. 4(5. Did you see Mr. Edison in control? A. I did not. x-Q. 40. Did the North American Phonograph Company have any transactions with the Edison Laboratory? A. That I do not know. X-Q. 47. Did the Edison Laboratory over render hills to the North American Phonograph Com¬ pany? A. Not to my knowledge. x-Q. 48. You haven’t any knowledge of the business transactions of the North American Pho¬ nograph Company, have you? A. No, sir; I haven’t. i *‘Q. 49. Thomas A. Edison was President of the Edison Phonograph Works, was he not, in May, 1892? A. That I do not know. x-Q. 00. And you know nothing about the Edi¬ son Phonograph Works?' A. I do not, sir. x Q. 61. How is it that you do know about the k'orili American Phonograph Company, generally? A. You mean when you ask me that question — do you mean the general conduct of the business? x-Q. 02. Yes, I would like to find out what is the extent of your knowledge with reference to the North American Phonograph Company? A. My knowledge pertaining to the North Ameri- can Phonograph Company was that a Mr. A. O. Tate, who succeeded Mr. Thomas 11. Lombard, was Vice-President of the company, and, to my knowledge, Mr. Cleveland Waleutt was Secretary, 345 mid Mr Scott J’romain wns Tronsiiror; but ns to “ ftli business, Minvo no knowledge of only my position wns simply ns a book-keeper mid cashier, to take charge of the accounts from 10 t,lilt 1 *». employed in 1803 down to the ltueeiver UOI1,1>a,,y P"880*1 "lto the hands of the of f'10 '{,,0"'lu(1ge that you acquired of the •ilfans of the North American Phonograph Company, you know that it is a fact do vou not SnS'T ",t,‘ lul> I8!,a> continuing Sir mU hat 11,0 Korlh Al"cncan Phono- 031 C f"y 'V0nt i,"° the hands of a Pe- Phonotrranh P "St’ 18Wl 1,10 Nortl‘ American I J M°,ni,?ny undertook to do business men to “ °r U,e U,liturt upon pay- panics? ££ ^ com- York ptn ,T ^ my" kJSw* x-Q. 50. You know fh«tf ...» x-0 57 win L1B "',ls soine, yes. whether you /ind b.'1,,'!™"1"1'3 1110”6 books ilIld state A. That I do not know until I examine them. 1033 (Witness examines book.) (Answer Continued.) I do not find any entry on the Ledger here. In the Journal 1, page 111, I find something. x-Q. 58. In whoso hand is the handwriting on page 111? ° A. Henry C. Ware; ho was a book-keeper of the North American Phonograph Company; also worked on this Lodger. On page 111 is an entry of September 30 1893. “ Sundries to rentals, $394 ; rentals on phonographs due from following parties for September (N. Y. Co.).” x-Q. 59. Are the names of the parties thereafter ]03‘l set out? A. Yes. x-Q. 00. What do you understand that entry to mean ? A. I should understand from that that it was a rental due on machines that were leased by the various parties as mentioned in the Ledger. ' x-Q. 01. In what territory ? A. New York. x-Q. 02. At what time? A. September 30, 1893. x-Q. 03. Is there anything else ? A. Another entry in the same Journal, page 113, October 10, 1893: “Sundries, Dr. to rentals, $390.25; rental of Phonos due from the following parties for Octo¬ ber (N. Y. Co.).” On page 120, of the same Journal, I find : October 81, entry of royalty for1035 October, “ Dr, to sundries, New York Phonograph Company, see memo, copied, $021.35.” x-Q. 04. What does that “ memo, copied ” mean ? A. That it is made up from a memo¬ randum which has been placed on file. x-Q. 06. Do you understand from that last entry that $021.36 was paid by the North American Phonograph Company to New York Phonograph Company for royalty ? A. I do, sir. Here is a small eutry or $10.00, page 120 of the same Journal, November 24, “New York Phonograph Company, Dr. to A. W. Mott, rental charged July 1 ' , 0 iNo'v * 0,k Phonograph Company il , Irensferred by direction of Now loilc 1 Monograph Company, $10.00.” A further 2 °'! *’i,«u 128- 20, 180!!, run (als to Amonoan I Monograph Company, Buffalo ho iso, for rental wrong charged them in July, 180.1, ils per statement, they not having received any portion of these rentals, same having been collected direct by the New York Phonograph Company sagent, see S. Pnlsifer in Buffalo, N.Y • Sin V8l’o *'00; A,,S- 01, 1803, total 81000; Nov. 20, 1803, total $10.00; grand total 1037en^'to°; VVI'f ‘!° y°" "n,lerstl*"(l that last cntiy to mean ? A. I should judge from this ' amouiitto'f08210,tLT1 ‘'"i’ tl,oy "e,'° unfille(1 to irSf'S-S;- pany, should be • ^l0I,0Sn,Ph Com* A. There •troJr Ml, “ December 30, 18 3! r°yi,lt>’ to New York Phono- graph Company, for royalty on sales made in the New York City Show Room, as follows: as per cash book, 1893, Ang., §140.40 ; September, §.1154. 28 ; October, §250.81 ; November, §171. 45 • December 13 *772.00 ; total, §1,804.03, at 10 per cent’., §180 ^” Nea ro rk ] honograplr Cottt])any, sartte date, same page: 8733 to Buffalo lrotise, royalty on rental refunded G. II. Dnnston included in Buffalo account of §170.01, credited §73.25, 10 percent., *7 33. Royalty *171.10 to New York Phonograph Buffalo"^, '0yU,ty °" re,,tels of 31 ■'■nchirtes, Buffalo house, amounting to §084.40, at 25 nor §l" 778to7i'10lt Nr°"'Jovk Phonograph Company, to "nIv V n'ty f°r 25 per cent, rental of machines or Ci“' Wheel VVorks- nrnonnting to §51 iO, at 25 per cent., §12.77.” Page 142 December 30, 1893, royalty §00.78 to New York 1 honograplr Company, royalty on slot machine col- mnnTnt.f "'“"‘'' of December, 1893, amounting to a i.ct of *007.07, at 10 per cent. §09 78 ” NeTYork Phono, *«.08 'to of Decembe i °ma nl“ny’ roy!llt>r '"'month .8»», graph Company, royalty on rental nf , ° , • , '• BuITtilo 822.no; „ YoA n'"° ’““t' compnny, 011 ;,i' i “;osr;s per cent. See letter to W. J. 12/20, §22.00.” 1040 Page 151, in December, “Now York Phonograph Company, §20.00 to royalty account, royalty charged back on above bills amounting to the sum total of §80.00, at 25 per cent., §20.” “ Royalty account, December, 1893, §297.00, to Buffalo house, amount wrong charged them by reason of our royalty being included in price at which goods are billed such agents and dualers. November 30, $100.71; December 31, §44.08, total §214.90, less November §7.33, §207.00.” And a note is horo made: “Error of 10 per cent., C. ,1. A., Feb. 28/94, §207.50.” Pago 100, December 13, 1893: “Buffalo house, new account, §7,000.18; to Buffalo 1040 house, old account, inventory of stock and assets on hand December 30, 1893, §7,000.18.” “ Roches¬ ter house, new account, §332.42; to Rochester house, old account, inventory of stock and assets on hand Decombur 30, 1803, §332.42.” “Utica house, new account, §281.07; to Utica house, old account, stock on hand as per our bills for goods shipped thereon ledger account, §281.07.” x-Q. 72. You have read all the entries that you could find relating to royalty in the course of busi¬ ness between New York Phonograph Company and the North American Phonograph Company subsequent to July 1, 1893? A. I have. 1017 x-Q. 73. Were not the Buffalo house and the Rochester house and the Utica house percentages established by tho North American Phonograph Company within tho State of New York? A. They were, I believe, after the New York Phonograph Company came over to the North American Phono¬ graph Company. x-Q. 74. The books showing dealings subsequent to December, 1803, of the North American Phono¬ graph Company in the territory of New York are not hero present, are they? A. No, they are not. oxaimiaiion of these books that in December, 180.1, musical records wore sold by tlio North American Phonograph Company? A. No, I did x-Q. 70. On page ICO there is an entry “Sales ".uriBol records, 14th Stree’t, $i 1“ 88(1.58. ’ What does that mean? A T i,IMr„ knowledge of that entry. ' ; S,A!ha?mydidyJes ,,,,,aiCBl '^“'■'"■*''‘"^1 Umof “‘ST/r"" . *"•"«*£ rii," st Si"? Tn ~ ;i "»* S5- ---"Sr: rect? 1 yes. W’ 1804' is,,,t cor- ' North AmeS Phonogreph* Col0™1'’ °f tlle 1804? a Yon . , . ?fc ? ,Coml,a,1J' m August, ph.»g4X™»; of Km" 1 - - Counsel : Yes. son Phonograph Tvork'^1'1'’ Etllson nnd the Edi- August, 1894 to Air r'!!e,nbel tbe amount due in mk A:-?2~^eKdiS0" P,‘ono- not, that3 the1 North AmenVm"m PUtitio"1 Wils ifc Williaro Poize D. Q 351 s-Q. 84. Yon knew that it was J. Adrinnce 1051 Pash, who took I lie proceedings, did you not? A. I did not. lie-direct examination by Mr. IlougU: K.-l). Q. 85. Tlie extracts from tile journal which you have read at Air. Hicks request are largely in your handwriting, 'are they not? A. The majority of thorn, yes. K.-D. Q. 80. And your actually taking charge of tlie books, as the person who made entries therein, occurred in the Summer of 1893, did it not? A. Yes. K.-D. Q. 87. The book from which you have 1052 read is tlie same book to which I directed your attention at the beginning of my examination? A. Yes. K.-l). Q. 88. And it is a portion of one of the set of three books to which I directed your atten¬ tion? A. Yes. WILLIAM PELZEK, being first duly sworn, on behalf of defendant, testified as follows : Direct examination by Mr. Hough : Q. 1. Where do you live? A. New York City. Q. 2. Are you in the employ of tlie National 1053 Phonograph Company? A. In the legal depart- Q. 3. Have you produced the three books which have been referred to upon the examination ot Mr. Kelsey, marked respectively, “ Ledger A. N. A. P- Co.”; “Ledger 1, N. A. P. Co.”; and “Jour¬ nal 1, N. A. P. Co.”? A. Yes. Q. 4. Prom the custody and control of what corporation or person have you got them? A. National Phonograph Company. Q. 5. You have produced them at my request, from what place? A. Orange, N. J. 352 Q. 0. Whcro they have been for some time? A. As far as I know. Q. 7. How long a lime, to your knowledge? A. About six months. 1 suppose they have been there ever since the National Company got hold of the assets of the North American Phonograph Com¬ pany. Q. 8. Are you acquainted with Cleveland Wal- outt? A. Yes. Q. I). Do you know where ho is? A. In Paris engaged in business there with the Gramophone Company. 1 i nr.r, {rovVh •' 1 offer in evidence on behalf of 10..5 the defendant, the account found upon page 1, of the book marked “Ledger], N. A. P. Co.,’’ purporting to be an account with the Edison Phonograph Works, covering a period f 10111 May °> ]b'8£>, to December 31, 1889, and same is marked “ Defendant’s Exhibit 1* April 0, 1904, S. M. II. Ex.” I also offer in evidence what purports to be the continuation of that account, being page 392 of the book marked “ Ledger A. N. A. P. Co.,” headed Edison Phonograph Works, covering a period to '890, Mi same is marked Defendant’s Exhibit 13 Anrii n tion of page 241 of the book marked “ Ledger E’ ' ’ Co;>” headed “Experimental Expense Account,” and the item offered in evi- dence is that reading as foilows: “1892: May Edison Laboratory, X08, 808,598.29,” and same is marked “ Defendant’s Exhibit 14 Apr, 15, 1904, S. M. H. Ex.” I also offer in ^••s„,?vi]socof”r bo?k whole of said pages, and the same is marked Defendant s Exhibit No. 15, April 6, 1904, S. M. H. Ex. Defendant here gives notice 353 William Pel: X- of intent to photo-lithograph these pages for 1057 convenience and use upon the trial of this cause. Cross-examination by Mr. /ticks : x-Q. 10. Where are the rest of the books of North American Phonograph Company? A. I be¬ lieve they are still at Orange. x-Q. 11. In the possession of the National Phonograph Company? A. Yes. x-Q. 12. When did you first see any of the books or papers of the North American Phono¬ graph Company in the possession of the National 10fi8 Phonograph Company? A. I cannot state exactly, except as I stated before, about six months ago. x-Q. 13. In the charge of what particular officer were these books and papers? A. That I cannot say; I saw them in the storeroom. x-Q. 14. Was William E. Gilmore with you at that time? A. No. x-Q. 15. Was John I<\ Randolph with you at that time? A. No, sir. x-Q. 10. Gilmore and Randolph knew that those books and papers were in possession of National Phonograph Company, did they not? A. I don’t think they did. x-Q. 17. From whom did you receive the three lono books now present? A. I did not receive them from anyone ; 1 found them there and had them sent to New York. x-Q. IS. You took them yourself, then? A. Practically. x-Q. 19. If William E. Gilmore or John P. Ran¬ dolph, six months ago or thereabout, had taken the trouble to look among the records of National Phonograph Company, they would have discovered these same books, would they not? A. I cannot answer that. x-Q. 20. Are they hidden in any way? A. I James L. Andsm 354 1000 x-Q. 21. Were they six months ago x-Q. 22. Did you ever assist Mr. Gilmore . . Randolph in smirching for tho hooks or records of North American Phonograph Company? A. No, sir ; that is, 1 do not h 1 ing done so. x-Q. 23. Are you acquainted with Joseph F. McCoy? A. Yes. x-Q. 24. Have y chase of stock of N A. No. x-Q. 25. Have yo„ purchase stock of Nu» j.011 puny? A. I have heard of it. 1001 x-Q. 20. Who, to your knowledge, In liim? A. I do not know of any one. 1 ±«* fl assisted McCoy in the pur- York Plionograph Company? known of AfcCoy’s eirorts to H| York Plionograph Com- JAAIES L. ANDEAf, being first duly sworn on tho part of Defendant, testified as follows: Direct examination by Mr. Buckingham : Q. 1. A. on are the Air. James L. Amlem who has already testified in this suit? A. I am. Q. 2. When this suit was commenced, how much stock of New York Phonograph Company, c0i.iplai.mil t herein, had you or did you own?. 1002 A- One share. slmij8' ai'° y01lr P^cnt holdings? A. One Q.4. Have you ever owned more than one share in this company? A. I have not. Q. 5. Are you acquainted with Mr. Hugh AI. lwinston, Yice-President of the complainant com¬ pany? A. lam. Q.. 0. How long have you known him? A. Nearly four years. Q. 7. He was President of the Complainant com- - P!l2y Her°wuShaV1"S bee" elected Vice-President? 355 Q. 8. ne was President 18 months or two years 1063 from sometiiuo in 1000 until the Spring of 1902? A. 1 think so. Q. 0. How did Mr. Funston happen to get into this matter? A. By being a stockholder in the company. Q. 10. How much stock did ho own when ho was President or when he was elected President? A. (!1 shares. I think. Q. 11. f mean at the time he was elected; of course, wo know that subsequent to his election ho bought (10 shares at 25 cents per share, which some two years later ho sold tor $1.00 a share. Please answer the question without reference to the CO 1004 shares. A. After ho sold tho 00 shares he was the owner of one share. Q. 12. And before he bought tho 00 shares he was owner of one share? A. He was. Q. 13. And this was when he was elected Presi¬ dent? A. I do not recollect the date of his pur¬ chase of 00 shares. Q. 14. But this suit had been commenced before he bought his 00 shares? A. I could only say by referring to tho certificate book, which 1 have not here with me to-day. Q. 15. How did you happen to get Mr. Funston into this enterprise; was ho brought in to linanco > the company? A. AH. Funston was in the com¬ pany before I was connected with it, and I could not say. Mr. liicks: Complainant will object to any such questions imputing facts to the witness, and asks counsel for defendant to request the witness to state the facts and not to assume the facts. Q. 10. Now there were two other prime movers in the instituting of this suit, namely, Mr. Lemuel E. Evans and Air. Scott 1 e t tl,ilt soi D.Q. 1000 A. They were officers of the company when the suit was instituted. Q. 17. Do yon know how much stock they owned each when the suit was begun? A. I could not tell from memory, hut by reference to the cer- tihcnto book ] could tell you. Q. 18. You suppose, however, that they owned one share each? A. I think that Evans owned more than one share; T think that he owned n number of shares. Q. 10 The stockholders of New York Phono¬ graph Company generally did not know of this 1007 time I O iT l° beK""> "ntil som(i Httlu u 1 t,me “ftel Imd been instituted? A. I.could not say wlmt the stockholders knew; if they kent olmvir1 f u0"nL'utu(1 «'ith the com- pnny they knew what was being done. Q. 20. Were the stockholders generiilly takimr muc pains at that time to keep of Jilt .dh lis of the company? A. I saw several of them nio that’ helmV!1 T instiUlcutl‘« stockholder told tj. 21 Who was this stockholder? A The stockholder that I refer fr. i v x,le • , T 1 luel t0 "’as— I cannot recall .st now, .1 cannot recall the particular name now % D,d you rug!,l'd the New York Phono- -itKSTiKiKJKSS'— ..ta. “? “T,bl« of 357 James L. And. D.Q. Q. 21. Hut until some such action as that, the 1000 stock was of no value? A. I always knew it was of value, but I knew it would not become a matter of purchase and sale until some indication was given that an effort would be made to enforce its rights. (}. 25. Do you suppose that at or about the time this suit was brought, the stock of the New York Phonograph Company was worth 25 cents or iiO cents a share? A. I suppose its actual value was the value to be given it by the successful prosecu¬ tion of its suit under its contracts. Q. 20. Hut you liavo advised people from time to time, have you not, that the stock was not worth 1070 more than 25 cents or 30 cents a share at the time this suit was begun? A. Never. On the con¬ trary, whenever my opinion has been asked I have told every person who has questioned me that its value ultimately would be about $50 a share, the amount that was paid for it by most of the holders, and I have never said to anyone that it was worth less than that amount. Q. 27. You liavo never said to any one that this stock was not worth-more than 35 cents a share at the time this suit was brought? A. Never. Q. 28. I have a copy of what purports to bo a letter from yourself, date'd January 14, 1001, ad- 1071 dressed to Thomas C. Powell, Providence, It. I. In this letter it is said : “ Dkau Sin: “Mrs. Sumpsoii, of Boston, sends me your letter of inquiry for reply. “Tile value of New England Phonograph Company stock at present is very low— about 35 cents per share— The Edison people are paying for it. When the suit of this company is concluded, and wo net our injunction, we Slip 1072 when we began our suit it, also, was worth when the active prosecution of its suit a-iinst the Edison infringers is resume, 1 again. Lemuel r "VilIIS 1,i,s> temporarily, thrown the Board of Directors of the New England Co. into the ori° ° K(liS°" ,>U0|,I°’ 'vl,io1' accounts fo the slow progress in the injunction suit. But when the stockholders ascertain how they ,,,e be*»ff sold out, they will throw over the elected i •I,0!"'d’ nnd tho now hoard 1073 elected in their interests, will resume active pioceedmgs at law already started Yours truly, (Sg'l.) .Tajiks L. Andkm.” letter?^0" ^ °'' d proper cross- examination of defendant’s witness. a con-ectconv on,,",!6"01’ Whicl* 1 s"PPOse « 'vortl, only 3?' 1!'1° '?,’ill,h stock was TlCm ET. d°Sf thS . . . ^O" Si'y "> this letter, “ When i that the Edison people were V * ",f?rm,lMo». nil people "eie paying for the stock James L. at that time, although its value was, in my opinion, 1075 $50 a share and always has been. Mr. Hicks: Complainant objects to the let¬ ter, upon the ground that it relates solely to stock of New England Phonograph Company, and the quest ions asked by defendant’s counsel arc with reference to stock of New York Phonograph Company, and the opinion ex¬ pressed by the witness in regard to stock of New England Phonog \ h C i y t lie relevant. Q. 31. In the phrase last quoted, did you refer merely to New England stock, or did you mean the stock of Now York Phonograph Company? 1070 A. The letter is very plain ; it requires no ex¬ planation. I referred, as the letter states, to the New York Phonograph Company’s stock being then quoted at $15.50 per share, and that when we began our suit the New York Phonograph Com¬ pany’s stock was worth about 35 cents per share, by which I mean to say that 35 cents per share was about the price the Edison people were then pay¬ ing for it, according to the best of my information. Q. 32. If Major Punston had come into the New York Phonograph Company before you became connected with it, he, 1 assume, had been brought into the company by Mr. Lemuel E. Evans and 1077 Mr. Scott Tremain. Do you understand this to have been the case? A. I should agree with you in that opinion. Q. 33. At any rate, Major Punston was not found by yourself? A. Yes, ho was found in the com¬ pany by myself. Q- 3-1. Prior to your connection with the Now York Phonograph Company, you were connected with an Ohio Phonograph Company? A. 1 was President of the Ohio Phonograph Company for a number of years. Q- 35. The Ohio Couipauy operated under con- W8 fact* somewhat like that of the Non- York Pho uograpli. Company? A. Yes, it did. Q. ao. Did your Ohio Company 0vor pay nnv dividends? A. it did. ny J?l87' V°r h0W ,0"«? A. Eor two successive 1893. 38' 'Vhilt yoara were th°y? A. 1802 and Q. 30. When did the Oliio Company begin its operations? A. It was incorporated^ NoSi rf’,,, f,1,", ,,I!>1I1L‘SS •"nnediatoly after. i ■ ‘ 0. \\ lint was the capital stock of your Ohio Company? A. §1,000,000. J 0,110 1070 Q. 41. VVImt wns tlio higliost prim, of ip, suwh? m.ZZ JL“"* *"• ”«• "» »"■ <* *” e,o° *"™? *>« ™ I mwm for 'wh^t*8 ’’"l 1',t.ll",oE Ms stock in 1803; f w •’t q".°t,!l1 ,,ow ilt §00.00 a share? “ ~ q”M the persons who boiml.t " \ °V .1 tUmk 11,1 “r were then holdinir iAr h ‘" d 11,11 §',0-00 a share been holding ntthe same m 8:11110 ,igl"’e ,lnd ,mve 5”""y »' ■» r,r tj waf i.tril,™,1’, |“‘°t J"]"?- “»“f >■ »tter 1807, r'~e,,pko„,,;p.„nrr,;rrss Phonograph Company wliicli company had pur- 1081 chased tliu exclusive right for Oltio, the same as the New York Phonograph Company had for New York, when its territory was infringed upon by the National Phonograph Company, and the American Gmphophone Company and other un¬ authorized companies, had competition to meet with, so that its revenues were very greatly ini.' paired, and it was unable to continue paying dividends to its stockholders, on account of the unlawful competition of the National Phonograph Company and others. Q. 48. You did, however, keep up a kind of dealer’s business in phonographs, did you not, 1082 after the Ohio Company had become practically defunct? A. The Ohio Phonograph Company’s Board of Directors, finding that the business had been infringed upon, saw that itcould not compete with the National Phonograph Company at a profit, and to save its stockholders from loss, it concluded to dispose of its franchise and it was offered at auction and sold to a company called the Edison Phonograph Company, who carried on the business and tried- to compete with the National Phono¬ graph Company, but Anally the National 1 phono¬ graph Company and Mr. Edison, by blacklisting the Edison Phonograph Company and .James h. 1083 Andem, its manager, and by bringing suits in the United States Courts, and in the local courts, against the Edison Phonograph Company, for using the name Edison Phonograph Company without authority, and for so-called infringing of the pat¬ ents of the Edison Phonograph Company of flew Jersey, succeeded finally in closing up t io Phonograph Company ucce r, by piotentmfc its getting machines from any of the Nation. Phonograph Company dealers, who refused to sell goods or supplies to the Edison Phonograph Go pany on the ground that the company u [ W 1084 blacklisted, and they had been threatened that if they continued to sell goods to it, they would also be blacklisted, which means that no goods or sup¬ plies or machines would be furnished to them by the National Phonograph Company. Under these circumstances, the Edison Phonograph Company, which was the successor in business of the Ohio •Phonograph Company, was compelled to put up its shatters and go out of business, having been forced out in the manner 1 have described. Q. 49. Why didn’t the Ohio Company bring suit to enforce its rights, if yon thought those rights had been infringed upon by Air. Edison or 080 the National Phonograph Company, or any one else invading your territory? A. The Board of Directors of the Ohio Phonograph Company were • advised by counsel that while they had a good case against the National Phonograph Company and other infringers, for violation of its contract, such suit or suits would have to be brought in New Jersey, and the Board of Directors concluded that as steps were probably being taken by the local companies in Now York and New England, to enforce their rights, it would be a better plan to allow suit to be brought by these companies in the first instance, as they were located at the place 080 "'here such suit would necessarily have to be brought, and they therefore waited and deferred bringing suit in the name of the Ohio Phonograph Company because of the disadvantages that com¬ pany was under by reason of its location in Ohio. Q. 00. Didn’t you personally have considerable dealings with the National Phonograph Company, that is to say, didn’t yon sell phonographs for the National Company, or as its agent? A. The Ohio Phonograph Company had no dealings at all with thcNational Phonograph Company, butlns mnnager of the Edison Phonograph Company, the successor of the Ohio Phonograph Company, was compelled James L. Andem to ptirchaso phonographs and supplies from the 1087 only company which was handling them, the National Phonograph Company, or else go out of business and I therefore, in the name of the Edison Phonograph Company, bought phonographs and supplies of tlto National Phonograph Company for somo time. Q. fl 1 . What was your plan of doing business with the National Phonograph Company? A. It was to write the National Phonograph Company at Orange, N. J., and order from them phonographs, records, blanks, supplies, or whatever else was necessary, and pay them the bills rendered within 00 days of the time of purchase. 1088 Q. 02. Did you maintain any particular list of prices while you were dealing in the apparatus furnished by the National Phonograph Company? list^' ^Ca’ ^a'*ow «**«> «»•- James tlfe v u'L M * ,,rfk t'|ll0y Im.ll.lllKl 800,1 business policy 10H!) tlici would not have driven mo out of businm/ hut would have encouraged mo in business. I have never had the highest respect for the business p'iiiyfe,0,Me,lt °f 1,10 Nntiolml ^I'O'iograph Com- ohluined bv v n,T'° “''Jr* ',Ult 41,8 ,lV0,‘,8° di~t o .imcd I)} you .is selling agent for phonograph i cl ns tad records amounted to about $40 out of the *100. -ion understood this to have been about the discount allowed all other agents by that company? A. No, as I have stated, better dis¬ counts were allowed other people in Ohio than I ever was able to obtain. noo Q. 09. l)ut your discount amounted to about $40 i-1 -!,e o'''0 PhonoS,,«Pli Company X ' h . 8"!1,,nr ^"spension Agreement witli . i No itdia ‘not PhonogIaph Co"'pany ? D° *?" k"ow 'vhicl‘ ot the local pllo- nensim ,compames dul I10t 011 ter into that Sus¬ pension Agreement of 1803 ? A. I know some of all or not ° k"°'V wheUl8r 1 001,1(1 "tale them not ?ntM8r 'i,.yhi°h. °"eS’ t0 your kn°wledge, did iei into such an agreement? A. The Ohio James Company, the Columbia Company, tho Kentucky 1105 Comrnnv— T ‘ H ^'.sso,u'* Con.panyf’the Mi“a Old Dmfi • !ilnk 1 18 Company, the Old Dominion Company, tho Louisiana Company I o Texas Company, the New Jersey Company the Las tern Pennsylvania Company, the Western leiinsylvania Company-I think the Illinois State r°Tny’ a"SaS C,OI"I,any’ and 801110 of the Pacific Coast companies, I think. This is wholly from niemoiy and I may be mistaken in regard to one or two of the companies. i«ini2' fr‘i VVhlch ,°f the looal phonograph coin- pniiics did suspend business in 1893, in favor of 1'°,. An!elica" Phonograph Company, under n06 such Suspension Agreement ? A. The New York I honogrnph Company, the New England Phono- graph Company, and the others I am not sure about, f here were some others, but I cannot definitely name them. x-Q 83. Don’t you know of your own knowl¬ edge that during the years 1893 to 1S95, the Michi¬ gan I honogrnph Company continued to do business independently ? A. I may be in error in including me Michigan Company among those who did not enter the agreement. It may be that that was one of tlie companies who did. x-Q. 84. For tho purpose of refreshing your1107 recollection, I show you Complainant’s Exhibits 34 and 25, and ask you to look them over, and see whether you cannot state more definitely the com¬ panies that entered into tiie Suspension Agree¬ ment ? (Hands book to witness.) A- By referring to the time spoken of, I see con¬ tracts bearing date in 1893, which indicates to me that the Suspension Agreement contract was made ky the Louisiana Phonograph Company, so that the Louisiana Phonograph Company did enter into such an agreemeut, although I thought from memory that they did not do so. 110S x <3- 8!3- Bill you have any moans ot knowing actually whether each local phonograph company mentioned by you did or did not enter into a Sus¬ pension Agreement ? A. Only general informa- tion obtained in the course of correspondence and business with people who were in the same busi- x-Q. 80. And if your testimony on this point in any way conllicts with that of Air. Lombard, would you have any more reason to correct it ? A Mr Lombard would be more apt to be correct, ns he had personal knowledge of the facts, whore mv x-Q. 87. At all events, the Ohio Phonograph Company did not enter into such Suspension Agieement, and did it keep up its business during the suspension period subsequent to July 1, 1803? it- |. 1 U no.t u,lter ',,t0 S1,0h an agreement, and it did keep ,,p its business continuously until 1807. Pi™"8- i “r. lulWvo,'°r the North American ni il p ‘lP1 C'T1“,,y resl>uct f'o rights of tlie Ohio 1 heliograph Company? A. I am unable to atCds^i,1 thi"k h-8 ilt l0ilSt 1 d0 ,,ot ^collect source. ““y at'°" °f our tract from that 1110 x-Q.' 89. Which one of the local phonograph companies, if any, is in business to-day? A. The thirty two i,ho,10«ral>h companies of the original ' ™ th'lt ifo to-day in business England1^ Wk 11h°noSrill)h Company, the New 1""y’ 0<"n"'M“ - “■ ■» srsz granted to it by the North American Phonograph Company without invasion by the National Ph„ nogiaph Company, Thomas A. Edison, the Edison 1698 J»mes L. Andem Phonograph Works, or the Edison Phonograph mi Company? A. Only one, the Columbia Phono- graph Company. x-Q. 01. Now do you explain that the Columbia Phonograph Company has maintained itself in the full possession of its rights? A. By the fact that the Columbia Phonograph Company has had special relations with the American Graphophone Company, and lias been able by promoting the graphophone to carry on its business and maintain its territory, at a time when the phonograph busi¬ ness — that is, the phonographs made by Mr. Edi¬ son at his works, were not being promoted by the Aorth American Company, and -in this way they 1112 were able to tide the business along by handling graphophonos almost exclusively, under the priv¬ ileges they obtained from the Amuricnn Grapho- phone Company, and maintain a profitable business m their own territory. x-Q. 92. Is tlie phonograph business being pro¬ moted to-day by. tho successorof the North Ameri¬ can Phonograph Company, the National Phono¬ graph Company, through any local phonograph company? A. It is not. x-Q. 03. Do you know of any promotion in the phonograph business by the National Phonograph Company through any local phonograph company 1113 that derived its right from the North American Phonograph Company, subsequent to the time when the assets of the North American Phonograph Com¬ pany were transferred to the National Phonograph Company? A. I do not. x-Q. 94. Isn’t it the fact that the National Pho¬ nograph Company lias invaded tlie territory of every local phonograph company that derived its rights from tho North American Phonograph Com¬ pany, except the territory of the Columbia Phono¬ graph Company? A. It is the fact. x-Q. 95. Wliat is tho territory of tho Columbia 372 1114 Phonograph Company ? A. Tho District of Colum- bia, and the States of Maryland and Delaware, x-Q. 90. Prior to the transfer of the assets of the North American Phonograph Company to the JNntionnl Phonograph Company in February, J890 by the Deceiver, didn't tho Deceiver conduct the business throughout the United States. A. He did. x-Q. 07. And prior to tile appointment of the Deceiver on August 21, ISM, didn’t tile North American Phonograph Company conduct the busi¬ ness throughout the United States? A. It did. x-Q. 98. From whom lias tho Columbia Phono- lllfin!!1 C«»,P,,n3; 'ecoivecl its supplies fertile pur- 111(5 poses of its business? A. Itdenls mostly ingrapl.o- pl.ones and graphophone supplies. It lias thesame ou.ee for obtaining supplies of phonographs that the other local companies have, but how it has availed itself of that method I am unable to say. x-Q. 09 Has the National Phonograph Company umbHpf SQl? nHl eX tlmt th« National tor^ofthi'p 90,n},ilnl’ song'it to invade the terri- 111 0 ! Colu'nb.a Plionograph Company? A. It T?i“ i }e't mi !lge"cy tl,ere so,"« «*»« ^ thesaumc "‘etl theinj"nctio'>. and I understand tzrsarri; lionogiaph Company has been able to maintain Jimii L. Andem its exclusive rights for the sale of phonographs, 1117 graphophones and supplies in its territory, with no interruption except these attempted cases of infringement by tho National Phonograph Com¬ pany, which were unsuccessful. x-Q. 101. You have said that graphophones and supplies were furnished by the American Graplio- plionc Company to the Columbia Phonograph Com¬ pany, and that thereby the Columbia Phonograph Company was enabled to tide over a certain period of time. Was the time referred to by you subse¬ quent to February 18, 1890? A. It was from Feb¬ ruary, 1890, oil until the phonograph business was placed upon a good basis by the fact that Mr. Edi- 1118 son made great improvements to the phonographs, which made them marketable and more in demand than had been tho case up to the time of the North American Phonograph Company being put into hands of a Deceiver. x Q. 102. Subsequent to February, 1890, do you know of any local phonograph company that was supplied with phonographs and supplies? A. I do not. x-Q. 103. Have you had experience with the graphophone? A. I have. x-Q. 104. Wherein does the graphophone differ from the phonograph? A. It is a much coarser 1119 instrument; I have compared a phonograph to a fine steel pen, and a graphophone to a very coarse lend pencil as an illustration of the delicacy of the two machines. Witli the phonograph the dia¬ phragm is rigid and the vibrations are received and produced by a little stylus which is movable, wlieroas, on the graphophone the whole diaphragm and arm has to move in order to record or repro¬ duce sound, which renders itless sensitive. x-Q. 105. Which was the better machine in Feb¬ ruary, 1890, tho phonograph or the graphophone? A. Tho phonograph has always been, in my opin¬ ion, the better machine, and is to-day. x-Q. 100. Isn’t it the fact that all the fundamen- tai inventions relating to the phonograph and ?oon!‘01’!l0n0 "’er wh,oh of a better o g nal record being taken, and also an unlimited number of reproductions of a higher character than S*,,ntothe °'d method> aml> ils 1 under- stand it, at less expense. x-Q. 108. When the National Phonogrnnh Com- SrrleVnthe risl,ts of the North Ameri- can Phonograph Company, do you know of any at¬ tempt made by that company to carry on the nho- noginph business in accordance with the terms of apSSH 5if°r!LSrLA,',e,'i“1 Phonograph Re-dimsct Testimony. By Mr. Buckingham, : R.-D. Q. 110. You have just alluded to some and the present success of the phonograph is* he result to a great extent of the inip.tcd s rl motors winch are now in „Se, and which enabled phonograph to be used without the necessity of using storage batteries, as was the case X the local phonograph companies wore actively engaged i the business. In fact, if the spring motor had 1124 then been supplied the local companies, and tile unproved mothods of making records had been fc e “to ils th°y bad a right to expect they would, and as they were always told they would e e en "a,,,, supplied, they would no doubt all of then, h.iie done a hue business and been able to dechue dividends upon their stock, but the ma¬ chines and records furnished to the local compan- es, by thu North American Phonograph Company "ere so imperfect and inferior that the public would not accept them to any great extent, and as a result the local phonograph companies were un¬ able to conduct their business profitably, and could hob cially°ntlllU0 bll3h,csa without a great loss linan- R.-D. Q. in. Put imperfect as the phonograph was, without the improved spring motor and the now method of moulding records, the phonograph as a whole, as I understand you, was decidedly superior to the graphophono? A. I always so considered it. R.-D. Q. ns. You did give Mr. Edison the credit of beating the graphophono people at any rate, even j he did not furnish the last refinements which have since come to the phonograph? A. I have 1-0 always claimed and maintained and advocated the theory that the phonograph was a better machine in every respect than the graphophone. It.-D. Q. 113. Who got up the spring driving apparatus for the phonograph ; was it Mr. Edison or some ouq else? A. The first spring motors that I ever heard of were made in Chicago by the Chi¬ cago Talking Machine Company, which was a company, I think, acting under a license of the Chicago Central Phonograph Company, and which had the exclusive right to handle the City of Chi¬ cago and Cook County; that was a very imperfect spring.' It consisted of only one spring, and the governor was very imperfectly constructed, but with all its defects the public, who were looking for some kind of a spring motor, began purchasing them, and we, the Ohio Phonograph Company, suggested to the North American Phonograph Company the advisability of having proper spring motors made, but we were told by the North Amer¬ ican Phonograph Company that Mr. Edison had said that no spring motor could ever be made with a proper governor to run the phonograph so evenly that musical reproductions could be satisfactorily produced, and the only spring motors we were able to obtain for a year or two were those which -S we obtained from Chicago. Of course, it is very evident that Mr. Edison must have changed his JP"110'1 ve,T >nl*ch since that time on this sub- K.-D. Q. 114. Now, if the Ohio Phonograph Company was unable to keep up its business from the fact that tile National Company would not fur¬ nish it phonographs, why didn’t it go over to graphophones ? As I understand it, your contract between the North American Company and the Ohio Company gave the Ohio Company for the territory of Ohio the exclusive right to the use of grapho- phones, or at least the exclusive right to lease and R -D. Q. sell them? A. The Ohio Company had sold both H20 phonographs ami graphophones and phonograph supplies and graphophone supplies, but it found that tlio public preferred the phonographs and supplies, and consequently it devoted more of its attention to that branch of its business than it did to the graphophone and supply branch of its business. ll.-D. Q. 115. Tn short, you were unable to do a business in talking machines with the graphophone, is that it? A. It there had been only one machine, and that the graphophone, no doubt wo could have done a good business with that alone, but as we had tlio choice of both machines, and the publio 1130 seemed to prefer the phonograph, we naturally endeavored to meet the wants of the public, and in that way relied more upon the phonograph than we did upon graphophones to supply the demands of the public. K.-D. Q. 110. The graphophone in more recent years, however, seems to have become a pretty good machine? A. That is not my opinion. K.-D. Q. 117. Dut the graphophone people seem to have adopted about all of Mr. Edison’s inven¬ tions; why should not they make a good machine? A. There is no reason if they have adopted his inventions why they could not have a good machine. 1131 K.-D. Q. 113. Along in 1802, 1803 and 1804, :lid you understand that the Graphophone Com¬ pany contended that the rights of the North American Phonograph Company to the grapho¬ phone had been abrogated or rescinded by or owing to some default of the North American Company? A. I do not know what their views were. K.-D. Q. 119. Did you take pains to find out vhether the rights of the Ohio Company in the graphophone wero still iu existence? A. Not par- icultirly. K.-D. Q. 120. Why was this; was it because 1705 378 1 132 the graphophone was not worth the trouble? A. Tt was because, as 1 have stated, the demand seemed to be almost wholly for phonographs and not for gmphophones. Jle-cross-cxaminalion by Mr. Hides : R.-C. Q. 121. Did the National Phonograph Company ever offer to supply the Ohio Phono¬ graph Company with gmphophones? A. It did ll.-C. Q. 122. Was it your understanding that the North American Phonograph Company had no direct contract with the American Graphophone 11811 Company, but that the North American Phono¬ graph Company was supplied with gmphophones by Jesse II. Lippincott, who did have a contract with the American Graphophone Company?. A. That has always been my understanding. R.-C. Q. 123. So that whatever rights the North American 1 honograph Company could grant to the local phonograph companies were rights which it acquired with its contract with Lippincott in a previous contract with the American Graphophone Company? A. They were. R.-C. Q. 124. Do you know whether Mr. Lippin- cott became insolvent and made an assignment in 1184 °r A. I have so understood it. It.-C. Q. 125. Isn’t it the fact that after Mr. Lip¬ pincott made Ins assignment the North American Phonograph Company ceased to deal in graplio- p ho lies? A. I believe they did cease. • It.-C. Q. 120. Did the local phonograph com¬ panies have the right to get their supplies from any company or person other than the North American Phonograph Company? A. They did not the ’inn',,?' 1f7' D° y?" k»ow of any.way in which the local phonograph companies could have ob¬ tained gmphophones and supplies therefor if the Aortli American did not furnish them? A. Not under their contracts. 379 Jamas L. Atida R-C.Q. to !!•',? uQr ’f8' If.U,eIocal Ponograph companies H 38 ' V. ° ,nnko a demand for graphonhones and supplies therefor would they not. under their con.i-act, be required to make such demand o Iho successors of the North American Phono" graph Company? A. That is the only way in «h cl, they could make any demand. * * smofi^xr20', Al'(1 (1° y°" k,,owof any succes- soi of the North American Phonograph Company Q-13"- Dkl Mr- Edison, or the National I honograph Company, or the North American I honograph Company, during Mr. Edison’s Presi- 1130 dency, undertake to protect any of the local pliono- k 1 1 ° 1 o it sion by the Ameri- can tiraphophono Company? A. Not that I am aware of. K.-C. Q. i:u. Do you know whether the business of the Columbia Phonograph Company has been profitable? A. I understand it has been very profitable. R.-C. Q. 132. If the Columbia Phonograph Com¬ pany in the full exercise of its rights could do a profitable business in its territory, do you know of any reason why any other local phonograph com¬ pany, with the full exercise of its rights, could not 1137 have done a profitable business? A. I do not know of any reason. R.-C. Q. 133. Do you know whether the busi¬ ness of the National Phonograph Company has been profitable? A. I understand it has been very profitable, also. . R-C. Q. 134. And that company 1 0 I s m 1890, did it not? A. It did. R. C. Q. 135. Do you know of any reason why in 1890, if the local phonograph companies had been protected in the exercise of their rights, the business to be done by them in phonographs and supplies could not have been made profitable? Jamas L. Aadam 1138 A. It would have been exceedingly profitable in Ohio il that company had been protected in its exclusive rights; it had already declared two divi¬ dends, its I have stated, on its large capitalization ol $1 ,000,000, and il it had been protected in its exclusive rights by the National Phonograph Company, it would, in my opinion, have been able to declare yearly dividends of an increasing amount from that time to date. R-C. Q. 130. Did you mean to say that there was any such defect in the phonograph or in the graphophone in 1890 that a profitable business could not have been conducted by the local phono- 1139 graph companies in those instruments, or in either of them? A. The machines, though far inferior to what they are at the present day, would still have been very profitable to all the local companies if the local companies had had the exclusive right within their territory to handle them as their con¬ tracts provided for, notwithstanding their imper¬ fections. R.-C. Q. 137. Is it the fact that the phonograph of 1890 was as perfect a machine as the phono¬ graph is to-day in its essential features? A. Practically, although there have been im¬ provements in the diaphragms, but the chief 1140 improvements have been in the spring motors and in the moulded records. R.-C. Q. 138. Is the spring motor any essential Part of the phonograph? A. It is not; it is not a part of a phonograph proper, as I understand it, at R.-C. Q. 139. Comparing a phonograph run by spring motor with a phonograph run by a battery isn’t it true that the best and most successful phonographs sold by the National Phonograph Company to-day are battery phonographs and not the spring motor phonographs? A. The highest and best type of phonograph to-day is the electric motor phonograph, which is operated by a storage 1141 battery or by the direct electric current; that is the kind 1 am using to-day personally, and I would not have any other typo myself than that. R.-C. Q. 140. The spring motor phonographs are ilio cheaper grade phonographs, are they not? A. 1'hey are all of the cheaper grade. R.-C. Q. 141. And the use of the spring motor lias caused the phonograph to bo distributed more widely because of its cheapness? A. Because of its cheapness, and the fact that it can be used without having to attach a battery. R.-C. Q. 142. Now, referring to the uses of tho phonograph to-day, do you know whether the 1142 phonograph is used for dictation purposes to-day? A. It is, but to a comparatively limited extent; tho graphophone is used more for commercial pur¬ poses to-day than the phonograph. R.-C. Q. 143. Are not the phonograph and graphophone essentially one instrument called by a different name? A. They are both talking ma¬ chines, and the general public does not know one from the other. R.-C. Q. 144. Do you know of any essential dif¬ ference in principle between the graphophone and the phonograph? A. Only in the methods. R.-C. Q. 145. The graphophone originally did 1143 Hie cutting of a record upon a wax cylinder, did it not? A. That was the way. R.-C. Q. 140. And the Edison phonograph to-day cuts the record by means of a cutting stylus into a wax cylinder, does it not? A. It does. R.-C. Q. 147. Isn’t, then, the Edison phonograph and graphophone in that sense the same? A. It is. R.-C. Q. 148. Isn’t the phonograph and the graphophone adapted for commercial use? A. Both of them ; I have used the phonograph for commercial use myself, but owing to the fact that the graphophone people have made a specialty 1144 of the commercial machine, they have succeeded in putting out more of tile graphophones than the phonograph people have of the phonographs. K.-C. Q. Pin. Do you know whether those per¬ sons who have attempted to use the graphophono and phonograph for dictation purposes have difli- ciitty in so doing? A. No, if they use it properly, except they have to take some pains to make a proper record; they must have somo mech'inicii skill. K.-C. Q. 150. Do you know of the use of tho phonograph or graphophono by any court steno¬ graphers in the United States Circuit Court? H45 A. Yes; Mr. Ormsby uses the graphophono for dictation purposes and has the typewritten copy made from tho cylinders which are listened to by tho typewriter operators, and in the • West, especially m Chicago, there is a very extended use of the talking machine, botli phonograph and graphophono. Houses like Montgomery, Ward & Company, Marshall Field & Company, and others, T ?" a Very H“'se SCi,le r°'' di«tation pur- II * ‘ ’ . 1 h‘l''e s.ee'‘ thei" operation wliere there eie eu or 00 of the machines used for dictation purposes, and probably half tlmt number of trim- mo zizr . . . °* “» — •» Re-direct examination continued. By Mr . Buckingham : R.-D. Q. 151 Do you happen to know of any patents owned by the Graphophone Company vl ating to tho method of making these phonograph oi graphophone records? A. I do not mvself 1 H..D. Q. Ms. Did „ „.t „„ zzptrzzj- *-• 1 ^ >«■ R. D. Q. 153. Did you understand that Mr Edison could not go on with the phonograph busi¬ ness .without getting a right under these patents? A. I never went into it specially; I have heard 1147 seieial theories, but 1 have never investiirated . . ™i.u«™,«di,,outl,r“£“ enforce our exclusive rights than I was in tho patent rights of tho case. R.-D. Q 154. It was generally and popularly understood - that Mr. Edison was obliged to git some such right from the graphophone company? A. I could not say. J R.-D. Q. 155. Now, if the electric motor phono- graph was the best, as you assume it to have been, and to lie up to this time, why wore the spring motors desirable? A. Because they worn cheaper and more easy to handle, could be carried about 1148 without necessity of having a storage battery. R.-D. Q. 150. Tho great cheapness of the phono¬ graph is very largely duo to the spring motors? A. It is. . R--U. Q. 157. And its wide adoption? A. That is owing to the cheapness, and the fact that dealers now hare adopted a system of selling these cheap phonographs on a weekly installment plan, which enables a great many persons to buy them on the payment of a dollar a week and upwards, while the local companies wore compelled to charge a lump sum and had no such system of easy pay¬ ments? 1149 Adjourned at 2.45 to 3.45. Met pursuant to adjournment at 3.45. Appearances same as at morning session. ALEXANDER C. CLERIHEW, being duly sworn on behalf oi defendant, testilied as follows : Direct examination by Mr. Buckingham: Q- 1. Please state your age, residence and occu- 384 11 1>0 pation? A. I mn fifty-one years of age; reside at 117 Ogdon Avenue, Jersey City, N. j., and occu¬ pation is certified public accountant. Q. 2. I call your attention to a typewritten docu¬ ment of twelve pages, entitled in this case “ Defend¬ ant’s Exhibit No. 10, March 20, 1904.” Please state whether you hnve already seen this document, and if so, what you know of it? A. This exhibit, as you now show it, I see is a copy, but the original • was written by our firm. I saw this at the time this report was written, July, 1802, and together with Whitehead we made up the report, after going through the books together; I think Mr. 11(51 Briggs was there two days, too; but I know we made up that report together. Q. 3. At any rate, you had to do with the prepa¬ ration of this report? A. Yes, I did. Q- 4. Under what circumstances did you make . tliis report, or at whose request? A. At tho request of Mr. Townley Haines; ho was addressed as the President, but was not the President; it was at the request of Mr. R. Townley Haines; lie was tile Treasurer at that time. I think lie wrote ns a letter stating that they agreed to accept our ser- vices at a certain price, but whether it was signed by tlie Company or was signed by the President I 1152 do not know, because we never saw anybody there. Q. 5. It was at the request of Richard Townley Haines? A. Richard Townley Haines, he is now deceased some time. Q. 0. Are you able to recognize the subject-matter of this report throughout as matter prepared by yourself or by your associates? A. Yes, by the general phraseology and by the manner the work is got up. Q. 7. Was your firm, Whitehead, Clerihew & Briggs, paid for the work of preparing this report by the New York Phonograph Company? A. Yes, Alixi.td 385 Q. 8. And are you able to stato that this report 1153 was rendered to the Now York Phonograph Com¬ pany at tho dato which the paper bears, namely, July 12, 1892? A. Yes. Q. 9. Wlint impression did you get as to the condition of the New York Phonograph Company while preparing this report? A. We took the fig¬ ures as wo found them ; wo saw there was a loss, and we tried to analyze whero the loss caine in, at which period. Q. 10. Just wlint do you mean by the statement that there was a loss; do you mean a loss in the running expenses of the company? A. Yes; there was a depreciation in there — 1 will refer to 01101154 section — we saw that the surplus was less than the year before, than the period prior to this time, which is shown on a certain page here. Q. 11. Did your firm or any member of it, ren¬ der any subsequent report with reference to the affairs of the New York Phonograph Company? A. There was a report of some kind after this, but I did not make tho report personally ; I was out of the city at the time. Q. 12. Which member of your firm did make it? A. Mr. Whitehead. Q. 13. Do you recollect wlint this subsequent supplemental report was about? 1155 Mr. Hicks : Objected to as calling for the contents of a written document not produced ; the report itself being in the hands of the de¬ fendants in this record. Mr. Buckingham: Defendant’s counsel re¬ grets to say that lie lias not this report. A. I only know from a general statement; my partner told me that there was a loss ; I do not know the figures; I know they did not pay us our bill, anyway. Mr. Micks : Objected to as hearsay. Q. 14. Your bill was paid for the first report? A. Yes. 11fi0 Q- ]fi- That is the report which is in evidence here as Defendant's Exhibit No. 10? A. Yes. Q. 16. But your linn was not paid for the subse¬ quent or supplemental report? A. No, sir. Q. 17. Wliy was that? A. Wo tried several times to collect it, but Mr. Haines and Mr. Fahne¬ stock said it would come out all right, but they never got the assets to pay it. Q. 18. Then they didn’t refuse to pay for the report because they thought the work unsatisfac¬ tory? A. No; Mr. John P. Haines and Mr. l'ahnestock both said it would be paid probably, i ir,7 « t,1!fyv0uld got !t’ b,,t Sot tired of asking. Q. 10. \ on understood that the company was defunct and unable to meet its obligations? Mr. Hides: Objected to as leading and highly improper. A. Yes. Cross-examination by Mr. J Ticks : .. £'9' 2?' Yolilmve *'■ your hands a paper marked Defendant s Exhibit 10,” with reference to which you have testified. Do you find your signature upon that paper? A. It is signed Whitehead, Clerihew & Briggs; it is typewritten here; we never sign in typewriting. 11B8 X-Q-21. You don’t find your signature or the signature of your linn upon that paper, then, do yo" * “• ,rou 'nean il hand-written signature? x-Q. 22. \es? A. No, not in this. x-Q. 23. Now what do yon lind? A. I find at the end, » Whitehead, Clerihew & Briggs mem- bers of the American Association of Public Ac¬ countants.” A^Yes A'ld tImt iS in tyi)e'vliti»fi> is it not? x-Q. 25. Was it the custom of your firm or of yourself to send in a report without your signa- tuie? A. ihe original copy was always in our signature. 1714 Aitlx.a.ida x-Q. 20. J he paper you have before you is not 1150 the original report, is it? A. I would not say it was that; if it was that— that is, the original re¬ port, it would have tho written signature upon it, as a natural consequence. x-Q. 27. Now, isn’t it the fact that you never saw that paper, Defendant’s Exhibit No. 10, be- foie to-day; I refer to this specific paper in your hands marked “ Defendant’s Exhibit 10 ”? A. The original I did, of course, but if you mean these particular pieces of paper, I should say no. x-Q. 28. Isn’t it tho fact that that typewritten copy was not made in your office? A. I do not know as to that. 1100 x-Q. 29. Can’t you tell from the printed letters and tho color of the ink, and from the paper, that Defendant’s Exhibit 10 did not come from your office? Mr . Buckingham : Objected to as frivolous and calculated merely to waste time. A. From the phraseology of the whole thing, I believe this to be a copy. I could not tell that now, at this time, because that work was done outside, probably; I coulcf not remember that; I could not toll that now. x-Q. 30. If you did not have that paper before you. would you able to state any of the figures 2101 thereon set forth ? A. I would require the books. x-Q. 31. You do not know, aside from this paper, that the New York Phonograph Company was doing the amount of business set forth in that paper? A. In a general way my memory serves tnc, this must be about right, because I know of certain things that was there that no one would have known except they were there; no one could have copied an act of fiction there in certain figures, I refer particularly to where it states that certain amount about the registration of the stock. The Central Trust Company was charged with hold- c C. Clariha-w X-Q. 1102 ing 24,40Oshares ; Winslow, Lanier & Company, who were Choir transfer agents, lmd registered 20,000; I went to belli of those places myself, personally, the Central Trust Company and also to Winslow, Lanier & Company, about the transfer on their books, and they adjusted it afterwards, 1 think; the Central Trust Company had made an error of four shares, or something; I went to the odious of botli these companies. x-Q. 32. And, although you never saw this paper before, from that circumstance you think you can recognize the entire subject matter of that report? Mr. Buckingham: Objected to as con- 1103 tabling an inference not warranted by the witness’ testimony. The witness has not said that he never saw this paper. A. Yes; well, I should say yes. x-Q. 33. What is there in the statements relat- ting to Winslow, Lanier & Company and the Cen¬ tral Trust Company, which enables yon to state in dollars and cents the amount of business done by the New York Phonogrngh Company in the year 1802? A. I can state by this statement. x-Q. 34. All you mean to say is, is it not, that you recollect that in the original report there was something in regard to Winslow, Lanier & Com- 1104 pnny and the Central Trust Company? A. Yes. x-Q. 33. Do you mean to say anything more than that? A. I know that there was an account called the Metropolitan Phonograph Company on their books. x-Q. 30. For what period of time was this re¬ port rendered, do you recollect? A. It states there. x-Q. 37. But aside from the paper, for what period of time was this report rendered, according to your present recollection? A. There is a state¬ ment of assets and liabilities of the two different periods, oue at six months up to July,, 1802, and a tr*der G. 380 one at January 1, 1802. We had to go back some 1166 distance to adjust the apparent loss during a cer¬ tain period. x-Q. 38. Do you recollect what books you ex¬ amined? A. We usually examine all the books that is given to ns. x-Q. 30. I am not asking you what you usually do; have you any recollection about these books? A. I recall some of them, I know wo examined the cash-book, and the ledgers, and I remember one or perhaps two ledgers, and I think the original invoicos and the sales-book. x-Q. 40. Do you recollect the entries of the trade account of the New York Phonograph Com- 1166 pany? A. I would not unless I saw the figures; I could not remember 12 yoars back without seeing the figures. x-Q. 41. And if this Defendant’s Exhibit 10, is not tho original report which you made, you do not know whether tho statements contained in this paper aro correct or incorrect, do you? A. I would havo to have time to look it ovor to prove that probably. x.Q. 42. And if you do not recollect the trade account of New York Phonograph Company aside from this paper, how can you tell whether tho statements contained in this paper are correct, if 1107 this is not tho original report? Mr. Buckingham: Objected to as frivolous and wholly' immaterial. The witness is merely called upon to identify tho paper. Mr. Hicks : Complainant’s counsel replies that the witness has not identified the report; he has given no evidence to show that he ever saw the report bofore. Mr. Buckingham: Defendant’s counsel would suggest that if complainants are not satisfied with this report as a correct copy of the original, they should produce the original. 391 Mr. Ilicks : As the papers of New York Phonograph Company have been taken pos¬ session of by defendant, National Phonograph Company, the production of the original should be made rather by defendant’s counsel, if it is in existence. Mr. Buckingham : The minutes of the New York Phonograph Company which have been produced in this case in the course of the de¬ position of Mr. John P. Haines, show that this particular report was made for the benefit of the various directors of the company, and presumably for the large stockholders as well. For instance, among the minutes of July 12, 1892, which have been copied into the record is the following: “ The Auditor’s report was read, approved and accepted. Moved by Clias. A. Cheever, seconded by Richard Town- ley Haines, and carried, that a copy of said report be furnished to any director of this company who may request a copy of the same.” Obviously, the copy which has been produced in evidence was one of the copies furnished some one of the directors or one of the stockholders. Defendant’s counsel as¬ sumes, of course, that the original of this re¬ port, if there is any paper to be considered more an original than the present document, is still in the hands of the New York Phono¬ graph Company and accessible to complain- antra counsel. Mr. Hicks.- Complainant’s counsel replies that the papers pf New York Phonograph Company have been seized by the agents of National Phonograph Company, and such papers as were deemed of value to theNational Phonograph Company have been retained bv it and its ngents and counsel. No such ori«* inal report remains in the possession of the New York Phonograph Company. Air. Buckingham: Defendant’s counsel 1171 would inquire of complainant’s counsel if he has made or caused to be made a searcli for this paper? Mr. Hicks: Complainant's counsel under¬ stands that a very serious search has been made by the officers of New York Phono- graph Company for all papers and documents of tlie company, and no such report has by them been found. Complainant’s counsel fur¬ ther replies that the minutes of New York Phonograph Company do not refer to this particular report, but to a report, and as this paper has been producod by counsel for defend- 1172 ant, without any explanation of how it came into the possession of defendant, complainant is not willing to accept the paper as correct unless positively shown to be correct. Mr. Buckingham : Probably complainant’s counsel will admit that this paper might have been obtained otherwise than by an illicit taking. Mr. Hicks : That is not the understanding of complainant’s counsel. Mr. Buckingham : That is to say, even if every director and stockholder was entitled to a copy of this paper, complainant’s counsel 1173 would still insist that it had been stolen. Mr. Hicks: The history of this paper can readily bo shown by defendant’s counsel, but it having been admitted upon the record that it was found among the papers of Mr. Hayes, and the record showing that Mr. Hayes was a co-operator with Evans and others, who took possession of the papers of New York Phono¬ graph Company, the presumption is that any papors of New York Phonograph Company in possession of defeudnut, are not rightfully in such possession. 1174 Mr, Buckingham.' But Evans himself was a director of the Now York Phonograph Com¬ pany. Why should he have bothered himself to steal one of these reports, when according to tho minutes which have just been read he was entitled to a copy? Mr. Illcles : There is no snob evidence in the case, and Evans was not a director of the com¬ pany at tho date of this report, 1802, nor for several years subsequent thereto. A. From the general set-up of that paper, it looks to me as if it must have been from the original, because that was the way we set up our reports at 1176 that time;, the form in which we set them up. x-Q. 48. You think the form is all right? A. I think the form is exactly tho way it is. I remem¬ ber the rule at that time. x-Q. 44. And because the form seems correct, you infer that the subject is correct? A. I do not infer anything, I believe the subject-matter is cor- x Q. 46. What do you base your belief on? A. On the general phraseology of the report; the method of expression and writing of the report. x-Q. 40. Do you express iigures in a way dif¬ ferent from the way in which other persons express 1170 them? A, No, Iigures are always just figures. x-Q. 47. Whether the Iigures are correct you do not know, do you? A. If that is a copy of the report, the Iigures must be correct. x-Q. 48. And if it is not a copy of the report, then you do not know, do you? A. Of course, nobody can answer that question, 12 years ago. x-Q. 49. In this report is set down' “Capital Stock, par value, §2,600,000” and then Surplus A-C, as at January ], 1892, §127,686.00, and then Less loss on 0 M. trade to date, §12,936.46. Does that mean that on January 1, 1892, New York Pho¬ nograph Company had a surplus over and above its I D 393 capital stock of $127,680.00? A. That was a book 1177 ..sa liming that the patent rights and privi¬ leges was worth that money. x-Q. 60. And if you made this report, you made it on the assumption that the patent fights were worth that amount? A. That was given in stock for that when they formed the company oitlier in stock or in some other way. x-Q. 61. And in making out this report you did not question that value? A. I do not think we did particularly question any value. We never consider those nominal values. We were not ■ liquidating the account yon know. x-Q. 62. Now in tho balance sheet of July 1, 1178 1892, you have put down the assets of the com ■ puny at §26, ‘677.46. Wasn’t that your valuation of the assets of tho company at that date? A. Total assets, exclusive of capital stock was $20,677.46; that does not include the treasury stock of $101,700, which, of course, is only paper. x-Q. 63. The treasury stock had been stock issued, had it not? A. No, that treasury stock was in tho treasury, but not issued to any stock¬ holders or holders of it. x-Q. 64. Don’t yon know. that the treasury stock sot down hero of $101,700 was stock that had originally been issued by the New York Phono- 1179 graph Company and Metropolitan Phonograph Company, and transferred by those two companies upon the consolidation to the New York Phono¬ graph Company, in this suit? A. I cannot remem¬ ber what that treasury stock was ; I cannot state what that was now. x-Q. 66. You dou’t know that it had not been issued and turned back to the treasury, do you? A. I do not know now, I cannot recollect that particularly. I could not do that; I don’t know what that specifically means just now. ■Alexander C. Glerihe-vr 180 lie-direct examination by A Jr. Buckingham: R.-D. Q. 50. The mi mites of the New York Phonograph Company contain a resolution to the eirect that Hie various directors of tlio New York Phonograph Company should be provided with a copy of the report of July 12, 181)2. Would your hrm have furnished a largo number of copies of tins report, or would you in the ordinary course have rendered merely an original, which the New lork Phonograph Company would have copied? A Ordinarily we only issue one, the original; sometimes we give a duplicate, one extra, si xt11",?' Yo" "ro,,ltl P'esuiue then that the . A °''k 1 honograph Company had made several copies of your report? Air. Hicks : Objected to as the presumptions of the witness are not evidence. . l1h,1,,k 1 remember pretty well about this ii i, r’ Ikn“"' had to hurry with it to got t in for the day of the meeting. v ' °8, Bllt i’ou ‘1° not recollect whether uz:'1 of the di~ a,,d le^smn^ ,Dof the fact that you cannot recol- de tlvof H th“ flsun* °r this report indepen- ,!r v ,,r , e,?°rt Ieild y°u t0 believe that you belihve n, , V‘1U i"0,4 n'ake ll,ia report? A. No, I our firm did m"! ."‘ake this report. I believe of 18 months. ‘‘ “ "" ''ei>0,'t! thls covol's il Period ^■cross-examination by Air. Hicks: did C*°. uot Relieve that your Arm Exhibit Vo , 118 Pnrtmular paper, Defendant’s «SSSiB ta^h,,d01y0n? A' ^llr autograph sigiutme is not attached to that. Exhibit ?o, is ;:dsrticuii,r paper’ Defe,,t,ant’s writer is it L , "StT C0PJr "1!lde upon a type- tl.nM«n°r S!'mciently nc(inainted as to whether 118.8 tnat is a first copy or a second, R.-C. Q. 02. It is not a carbon copy, it it? A. I don t think it looks like a carbon copy, is ^-e^ ^ °3’ 11 18 i,,k’ isn’tit? A- 1 think it R.-C. Q. 01. No doubt about it, is there? A. I am not well acquainted as to that. This is one of the original copies rendered by the of. beers to some of the stockholders, as far as I know. R.-C. Q. 05. For all you know that is a paper prepared by someone other than your oflico? A. Not prepared— not prepared, I would not answer that— not prepared by other than our office. 1184 R.-C. Q. 00. I refer to the subject-matter; lam speaking of the paper itself? A. The subject-mat¬ ter, of course, means the paper; I can only answer you that way, that this is a copy of the subject- matter. I know that if it was the original we would have signed it here (pointing on the paper). Further re-direct examination by Air. Bucking- ham : R.-D. Q. 07. Have you any earthly donbt ns to whether it is not a correct copy of the report which you did render the New York Phonograph Company on or about July 12, 1802? A. Ibelieve 1185 to my best knowledge and belief that this is a copy of our report. R.-C. Q. 08. You find enough in this report to enable you to identify it as the work of yourself and your firm? A. I am willing enough to father it, because I think by the way I know of the num¬ ber of these diilerent book accounts; I know that they kept different accounts. I know, specifically, where different losses and gains might come in the different departments. I know that Mr. E. E. Morgan was the cashier there at. the time, and I never knew iiim except in that office. El.is.ha, 300 1186 R.-D. Q. 09. Did Mr. Morgan help you get- together data for this report? A. He was their bookkeeper during that period, and, of course, whenever we wanted help on the books we had to ask him to got us vouchers and other original papers and documents of purchase and sales, &c. R.-D. Q. 70. But you had the active assistance of Mr. Morgan in the getting up of this report? A. Yes, we say so in the last end of the report, I think. It.-D. Q. 71. But do you recollect Mr. Morgan? A. Yes, independently of anything in the re¬ port, and Mr. Townloy Haines, too. 1187 (Clerihew testimony closed.) New York, April 5, 1004. Met pursuant to adjournment at the office of S. M. Hitchcock, Esq., Standing Examiner, No. IB William Street, New York City, at 11 o’clock A. M. Appearances : i Louis Hicks, Esq., for Complainant. Charles L. Buckingham, Esq., for Re¬ spondent. ELISHA K. CAMP, being first duly sworn, testi¬ fied as follows on behalf of the defendant. Direct examination by i\Ir . BucTcinyham : Q. 1. Please state your name, age, residence and occupation? A. Elisha K. Camp; age 39, residence, 252 West 85th Street; lawyer. Q. 2. You are solicitor, and of counsel in this case, the New York Phonograph Company, com- phunant, against the National Phonograph Com- 1180 pany cl al., defendants, in which the bill was veri¬ fied January 12, 1001, are you not? A. Yes. Q. 3. A demurrer to this bill was filed by de¬ fendants, said demurrer having been verified Au¬ gust 21, 1001 ? A. Yes. Q. 4. And subsequently a plea was filed in this case? A. Yes. Q. 5. I now call your attention to a certified copy of various papers in the suit, “ New England Phonograph Company and American Graphophone Company, Complainants, against The Dawson Company, Defendant, In Equity, in the United States Circuit Court for the District of Rhode 1100 Island,” the bill in said case, as appears from these papers, having been verified January 30, 1003. Among these papers are : (1) A brief for defendant on motion for Preliminary Injunction, which is signed, “ Elisha K. Camp, Phillip Mauro, of coun¬ sel ” ; and (2) an Answer of the Dawson Company, filed April 0, 1003, which is signed “ The Dawson Company, by James E. Dawson, President, Elisha K. Camp. Elisha K. Camp, Solicitor and of coun¬ sol for Defendant, Post Office and Office Address No. 27t Broadway, Borough of Manhattan, City of New York.” Are you the Elisha K. Camp who signed this brief and the answer above referred to? 1191 A. I acted as counsel for the American Grapho¬ phone Company and the Dawson Company in the suit to which you refer, which was a suit brought ostensibly by the New England Phonograph Com¬ pany, but in reality by the Edison interests, for the purpose of iujuring the American Graphophone Company and its dealers throughout the New England States. I recollect that I filed a brief on behalf of the defendant iu that action, but whether or not the brief annexed to the papers which you hand me is a correct copy thereof I am unable to state. There seem to be a great many corrections -in red ink, &c., and it may or may not bo a coi root copy. American Graphophone Company \va joined as a party i 01 ] 1 u in, that action with out its consent, and was joined, ns I understand it because it was the owner of the legal title. to tin patents sued on. I also recollect that I drew ar answer for the Dawson Company in that suit. Q. 0. Yon recognize these papers containing yonr brief and answer in the Dawson suit, as hav- ing been duly certified by the Cleric of the United States Circuit Court for the District of Rhode Island, do yon not? A. The papers spealc for themselves. Q. 7. But yon recognize the papers as having been so certified? A. I think that is snflicient answer, the papers speak for themselves. Mr Buck inham : Defendant’s counsel here offers in evidence the certified copy of papors in the Dawson suit just referred to tho wit¬ ness, the same being scheduled in the certifi¬ cate of the Clerk of the Court for the District of Rhode Island, as follows : ‘‘Bill of Complaint, Schedule ‘A,’ Schedule B 5 Replication, Opinion of the Court; Decree. Complainant’s affidavit of Frederick C. Fisher (No. 1); Complainant’s affidavit of l-mler.ck C Fisher (No. 2); Defendant’s affidavit of Phillip Maura; affidavit of Merwin E. Lyle; Complainant’s affidavit in reply of Lemuel E. Evans (No. 1); affidavit in reply of Lemuel E. Evans (No. 2); Brief for Com¬ plainant, Brief for Defendant; Supplemental brief for Complainant; Rescript of Circuit Court (R I. District). Order denying Peti¬ tion for Preliminary Injunction; Answer of the Dawson Company,” and said papers are marked “Defendant’s Exhibit No. 30, Daw¬ son Company suit. April 5, 1904, S. II H Mr Micks : Complainant objects to the in- 1105 traduction in evidence of the said papers, and each of them, upon the ground that they are incompetent, irrelevant and immaterial, and upon the further ground that anything done in tlie suit wherein thoy were filed cannot in any way be binding upon complainant in this suit; and upon the further ground that no connection is shown to have existed between complainant in this suit and anything done in tho said suit of Now England Phonograph Company el al. against the Dawson Company. Q. 8. There were various other suits brought, were there not, in which substantially these same lioo matters wero brought in questiou? A. Yes, there was a well defined attempt on the part of the Edi¬ son interests to prevent tho dealers of the Ameri¬ can Graphophone Company and its selling agent, the Columbia Phonograph Company General, from doing business throughout the Now England States, and some 11 or 12 suits wore brought, in four of which motious for preliminary injunction were made by counsel representing the Edison interests, all of which wore denied. In only two of the cases lias testimony been taken, with the exception of the one deposition taken in tho case of Seavey Bros., of Haverhill, Mass., and in this 1197 particular case ugaiust the Dawson Company, no steps have ever been taken since the motion for the preliminary injunction was denied. Q. 0. Did you file briefs and answers for defend¬ ants in the other suits referred to in your last answer? Mr. Micks : Same objection. A. I argued the four motious for preliminary in¬ junctions brought by the New England Phonograph Company, through its Edison counsel, against the American Graphophone Company in the District of Connecticut, the Columbia Phonograph Com- 400 1198 puny, General, and Seavcy Brothers, in the District of Massachusetts, and the Dawson Company in the District of Rhode Island; and submitted briefs on all of those motions, on behalf of tho defendants named, and drew the answers for tho defendants in the other suits. Q. 10. Did you use substantially the same brief and answer in these other cases that you liled for defe It tl ie Dawson suit in Rhode Island? ' Mr. Ilicks: Same objection. A. The brief was substantially the same and the answers likewise. Q. 11. Briefly, under what circumstances and 1100 conditions did you become solicitor and of counsel in the present case, the New York Phonograph Company os. National Phonograph' Company el al., Southern District of New York? Mr. Hicks : Objected to as immaterial, ir¬ relevant and incompetent, and as calling for communications between attorney and client. A. As I wrote Mr. James L. Andein on December 20, 1000. Q. 12. Your letter to Mr. Andem appears where, in the record of this case? A. On pages 92, 93 and 94 of the printed record on tile plea entitled “ Plea and Answer, and Proofs.” 1200 Q. 13. It is a fact, is it not, that you undertook to act as solicitor and counsel in this case for a cer¬ tain percentage of whatever might be collected from defendants heroin? Mr. Hicks : Objected to as immaterial and irrelevant. A. The compensation which I was to receive for services rendered in connection with the case ap¬ pears from the contract between Mr. Andem and Mr. Hicks and myself, which appears on pages 82 to 87 of tlie said printed record on the plea. Q. 14. This is a very voluminous contract be¬ tween yourself and the complainant, the New York 401 ’ 1728 -EUisha K. Gamp D. Q. _ Phonograph Company; won’t you, therefore, 1201 please, briefly state what your compensation was to be for your services as solicitor and counsel in this case? iJ/)\ flicks: Com plai tin nl’s counsel suggests that the contract is not witli the Now York Phonograph Company. . A. Tlie compensation which counsel wore to re¬ ceive appears in paragraphs 1st and 7th of tho said contract, appearing on printed pages 84 and 80 of the said printed record. Q. 10. As I understand this contract, you were to receive 20 per cent, of all that might be recov¬ ered in tlie way of damages or otherwise in this 1202 suit for your services us solicitor and counsel in this suit, and that you were authorized to employ an assistant who should receive 10 per cent of any amounts recovered. Is this the meaning of tlie contract as I understand it? A. I did not employ Mr. Hicks, and the contract is sufficiently explicit to speak for itself. Q. 10. But Mr. Hicks did come into this case under Suction 7 of the agreement to which you refer me, providing that additional counsel might be employed who should receive 10 per cent, of all moneys or tilings recovered. Mr. Hicks: Objected to upon the ground 1203 that it does not appear that the witness lias any knowledge as to how Mr. Hicks came in, and any testimony on the part of tlie witness in regard thereto is objected to unless it ap¬ pears that the witness lias knowledge. A. Mr. Hicks came into the case, bat I have no other knowledge as to his compensation or employ¬ ment, except as set forth in tlie contrnet. Q- 17. But so far as you are concerned, Mr. Hicks might have been employed under Section 7th of tlie contract and given 15 per cent, of whatever moneys or things might be collected from de- ]~04 fondants? A. I am nimble to make any other answer to tho question than I have already clone. Q. 38. Yon, however, wore to receive Stiff? . A. The contract so states. Q. 10. And were* yon otherwise compensated for your services in tin's case by retainer or per diem? A. Mr. Edward D. Easton, as treasurer of the committee of which he was appointed a member, at the Convention held in Cincinnati on September 2f>, 1000, paid certain bills for disbursements in¬ curred that were presented to him by me. , Q- 30- 1''le question is whether your compensa¬ tor ,tl0n in tl,is L'i,se "’ils so,e,y the 2f iff of what might 1205 be recovorerl from defendants, or whether you were paid some additional retainer in money or other¬ wise, or were to receive something in money or otherwise as a per diem for your services as solicitor and counsel? A. No. Q. 21. You were to receive simply the 25#? A. I think 1 have already answered your otios- tion. J 1 „ 9' Ti; Jt Wils sil,,1>I-v tho 25#; please answer this ‘ \ es ” or “ No ”? A. 1 havealready answered the question. Q 2) I assume that I understand your answer, i iUt *lm1 ;.there nmy be no opportunity for a misiin- 1200 dersta tiding, please say whether the 25# was to constitute the whole of your compensation as solic- itor and counsel in this case? A. Yes. Q. 24. You understood that the complainant in tins case was duly and amply bound by your vari¬ ous contracts to give you in compensation for your services as solicitor and counsel the 25# mentioned in Section 1 of the contract, appearing on pages 81 to 87, printed record on the plea? Mr llicks: Objected to upon the ground that it does not appear that there was any con¬ tract between complainant and the witness. Also upon the ground that the question calls 1730 Elisha E. Camp 408 for a conclusion on the part of the witness ns 1307 lo what tho proper interpretation of several contracts may bo. Mr. Iiuckinr/ham : It is certainly proper to ascertain whether tho witness considered him¬ self secure in his 25# of what might be collected from defendants. If tho witness thinks his contract was not virtually with tho complainant, Now York Phonograph Com¬ pany, and was with Mr. Andeiti, it is proper to inquire whether the witness understood Mr. Andem’s contracts with the complainant to bo such as to secure him, the witness, in this matter. 1208 A. Yes. Q. 25. Even if your contract was with Mr. Andcin.you assumed that Mr. Andein had such con¬ tracts with the New York Phonograph Company, complainant herein, as would secure you in your 25# of the proceeds of this suit? A. I did not rely upon Mr. Andein, but looked to the New York Phonograph Company to coulinu tho arrangement ■undo with me as to my compensation, which they subsequently did. Mr. llicks : The last part of the answer is objected to upon the ground that any action of the Now York Phonograph Company to 1200 that effect must have been by action of the board of trustees, and that the only evidence thereof would bu the resolution of the board of trustees. Q. 20. I find from the certified copy of the brief which you filed in the Dawson suit certain erasures on pages 4 and 5 of tile typewritten pages forming a part of defendant’s Exhibit No. 10, Dawson case. The matter erased or crossed out hero is: “Moreover, the license agreement re¬ ferred to as ‘ Schedule A ’ in the bill expires on March 20, 1008, within three days (fol. 42) : ‘ The D.Q. 404 121° rights hereby granted shall remain in force find this agreement shall continue until the 20th day of March, 1008, and for such further period at the option of the party of the second part as shall be equal to the time for which the party of the first part shall become authorized to grant any exclu¬ sive license under any patent or patents relating to phonographs or phonograph-graphophones, or improvements thereon, unless sooner terminated its hereinafter provided, and shall extend and exist and be exercised, and the instruments and property leased hereafter shall be used only within the following described territory, vis: The States 1211 of Maine, New Hampshire, Vermont, Massachu¬ setts, Rhode Island and Connecticut, II. S. A.’ In addition to the failure to siiow any license from the American Oraphophone Company to said Lip- pineott, or any authority to the North American Phonograph Company from either the American Graphoplione Company or Jesse II. Lippincott, to grant the alleged licenso to the New England Company, there tire no allegations that the license agreement has been renewed beyond March 20, 1903, or that there was any authority in any one to renew it. On the contrary, it is shown by the defendant’s opposing nllidavits that one of the 1212 alleged grantors .is dead and that the other one went into the hands of a receiver in 1894, and is no longer in existence. “The patents, as will be seen later, expire in 1903.” When and by whom was this erasure made in your brief in the Dawson case? Do you imagine that this erasure was made when the brief was originally tiled in that case, or do you think the erasure was made sometime after the brief was tiled in the Clerk’s office of the United States Circuit Court for the District of Rhode Island? Mr. Hides : Objected to as incompetent, irrelevant and immaterial. 1732 .SUsi.*- X. Camp D.C^. Mr. Buckingham : Defendant’s counsel 1213 states for the information of the witness that in procuring these papers from the Clerk’s office, in Rhode Island, a copy of a brief which defendant's counsol understood was the brief filed in this case, was sent to Rhode Island to expedite certification. Defendant’s counsel now learns from Mr. Polzer that the brief which was sent to Providenco was made from a copy sorved upon defendant in the New England Company against American Graphophono Company, United States Circuit Court, District of Connecticut, under the con¬ tract in question in the New England case, 1214 and upon substantially the same bill. A. It appearing, from your statement, that the brief from which you have quoted, was not the brief submitted in the action; but that instead, the brief in the case of the New England Phonograph Company against the American Graphophono Company, in the District of Connecticut, was sent to the Clerk of the Court in Rhode Island for cer¬ tification; I take it for granted that the Clerk made the corrections at the date of certification, and that the probability is, that the quoted portion was not in the brief in the Dawson case. Q. 27. How do you explain this erasure? 1210 Mr. llicks: Objected to as incompetent, im¬ material and irrelevant; furthermore, upon the ground that the portions of the brief quoted from have no relevancy to the rights of the New York Phonograph Company under the patents of Thomas A. Edison. A. I assume that you sent, as you stated, a brief in another case to the clerk for certification. Mr. Buckingham: In view of the fact that the certified copy of defendant’s brief in the Dawson case, as it appears in Defendant’s Ex¬ hibit No. 10, does not show whether the erased m fitter of pages <1 and 5 was originally a part of tho brief in the Dawson case, defendant’s cpunsel will procure a photo-lithographic copy or a facsimile of said brief duly eortiliod from the Clerk’s Oflico at Providence, It. I., and' will offer such copy as an exhibit in this case, as soon as it can be procured. This, however, will necessarily be out of defendant’s time for taking testimony, as now lixed by Judge La- combe’s order. Doubtless such a facsimile copy can be procured within a week’s time. Adjourned to 3 i>. si. same day. Met pursuant to adjournment at 3 i*. sr., with me appearances as at morning session. Mr. Camp (the witness) : In order to facil¬ itate the hearing as much as possible, I pro¬ duce copies of the brief submitted on behalf of defendants in the ease of Now England Phon¬ ograph Company against tho Dawson Com-' puny, in the United States Circuit Court for the District of Rhode Island, and the case of the same complainant against American Graphophone Company, in the United States Circuit Court for the District of Connecticut, these are correct copies of the briefs sub¬ mitted, subject to any corrections that may have been made in them at the time of their presentation. Mr. Buckingham: The brief just produced by Mr. Camp m New England Phonograph Company vs. American Graphophone Com¬ pany, United Slates Circuit Court, District of Connecticut, No. 1100 in Equity, for defend¬ ants, is offered in evidence by defendants, and is marked Defendant’s Exhibit No. 17, April 0, 1004, S. M. H. Ex.” Mr . Hicks: Complainant’s counsel admits 1210 that tho brief offered in evidence is a correct copy of tho brief filed in tho suit in which it is entitled, subject to comparison with tho original, if desired hereafter by either side; but objects to tho introduction of the said brief upon the ground that it is incompetent, irrelevant and immaterial, and cannot in any way be binding upon complainant, Now York Phonograph Company. . (Examination continued.) • iiy Mr. Buckingham : -j 2g0 Q. 28. Do you find on pages! and f> of this type¬ written brief in Now England Phonograph Com¬ pany os. American Graphopone Company, District ol Connecticut, the matter which was cancelled from pages 4 and 0 of the certified copy of your brief in the Dawson case, which has here been pro¬ duced in evidence? Mr. Hicks : Samo objection. A. Yes. It is as I thought, you sent the wrong brief to the Clerk of the United States Circuit Court, District of Rhode Island, for certification. Q. 29. How does it happen that this matter does not appear in the Dawson brief, but does appear jg2l in the brief of the New England Phonograph Com¬ pany against American Graphophone Company? A. If the allegation does not appear in the Daw¬ son brief, it was due to an oversight. Q. 30. I now show you a certified copy from the files of tho Clerk’s office of tile Circuit Court of the United States for the Southern District of New York, of what purports to be an answer in the case of “ John E. Helm, Complainant, vs. American Graphophone Company, Columbia Phonograph Company, General, and New York Phonograph Company, Defendants, in Equity, No. 8413, Cir- i unit Court ot the United States for the Southern district of New York,” which is signed “Ameri¬ can Graphophono Company, by Merwin E. Lyle, Vice-President; Attest, E. 0. Jtoekwood, Sec’y; Columbia Phonograph Company, General, by Paul H. Cromelin; Attest, E. 0. Kockwood, Sec’y, Elisha K. Camp, Solicitor and of Counsel for De¬ fendants, Oilice & Post Office Address, No. 277 Broadway, New York City.” Are you the Elisha K. Camp who signed this answer us solicitor and counsel for defendants? A. Yes. That was part of the general conspiracy on the part ot the Edison interests against the American Graphophono Com- Jpany, its selling agent, the Columbia Phonograph Company, General, and their dealers. Mr. John E. Helm was an associate, at the time the Helm suit was brought and the answers interposed, of Howard W. Hayes, Esq., who was Mr. Edison’s personal counsel. As part of the conspiracy, Mr. Helm and others, acting on behalf of the Edison interests, acquired control of the New England Phonograph Company, and brought the suits re¬ ferred to in New England in the name of that com- pany against the American Graphophono Company, the Columbia Phonograph Company, General, and various dealers. Mr. Helm was a director at 1 tlie time in the New England Company, and there were various persons identified with the Edison in¬ terests on the board of directors. Mr. Helm also became a large stockholder of the New York Phonograph Company, and brought the suits in the Southern District of New York against the American Graphophone Company, its selling agent, the Columbia Phonograph Company, General, and vaiious other dealers in that district. The Helm suit was, therefore, a suit in reality between the Edison interests and Graphophone interests, and I felt called upon, as counsel for the Graphophone Company, pursuant to the terms of my. letter to ELisha K. Camp 400 Mr. Audom of December 20, 1000, to intorpose the122® answers which I did in those suits. Q. 31. You prepared this answer, did you? A. Yus. Q. 32. You satisfied yourself that the statements therein contained were true, or substantially true, f suppose? Mr. IJicks : Objected to ns calling for a con¬ clusion on the part of the witness, and also ns calling for testimony from the witness in re¬ gard to facts as to which it is not shown that he has any personal knowledge whatever. A. I refuse to answer that question ns calling for communications between counsel and client. Q. 33. But even if you consider your communi¬ cations between counsel and client as privileged, I suppose you would still say that they were true where they were placed in pleadings? A. I have no further answer to make. Q. 34. I find at the end of Section 19 of this answer the following ; “and said defendant, Ameri¬ can Graphophone Company, and said defendant, Columbia Phonograph Company, General, allege upon information and belief that New York Pho¬ nograph Company is not now, and for many years past, lias not been engaged in the business of sell- ing or leasing graphophones, graphophone records and graphophone supplies, and that it has no place of business in the City, County or State of New York, and that it has not carried on the business of leasing aud'selling graphophones, graphophone records and graphophone supplies for more than eight (8) years past, and defendants do not know that said Now York Phonograph Company ever has done any business whatsoever, and except as herein admitted, defendants deny the allegations con¬ tained in Paragraph 19 of the Bill of Complaint. Is this allegation of the answer true? 1738 APr. Hicks: Objected to upon the ground that tlio question culls for evidence which is 0 1 <«• 1 • I t 1 i terial, and upon tlie further ground that whatever may have been said by the American Graphophono Company or the Columbia Phonograph Com¬ pany, General, or by the witness acting as its counsel, can in no way bo binding upon New York Phonograph Company, no connection whatever having been shown as existing be¬ tween New York Phonograph Company and the defendants as put in by the American Graphophono Company and the Columbia Phonograph Company, General, in the suit in question. A. I refuse to answer that question ns calling for communications between counsel and client. Q. 35. In the part of your answer which I have quoted in the last question, you refer .to “New York Phonograph Company.” Is this New York Phonograph Company the New York Phonograph Company complainant in this suit? Mr. Ilicks : Same objection. A. Same answer. Q. 30. You refuse to answer any and all quos- j tlons feinting to this answer in the Helm ease, I assume? A. I shall refuse to answer questions in regard to all matters that are privileged. Q. 37. But yon, who appeared as solicitor and counsel in this Helm inswer, ire the HI, ha K Camp, solicitor and counsel in the present suit, ^ew York Phonograph Company vs. National Phonograph Company cl al , Southern District of New York? A. I think 1 have already answered Q. 38. If you were not afraid of answering a question twice, I assume that yon would say ‘ Yes to the last question? A. If you wish to 3 411 harden the record with cumulative answers, I shall 1231 be pleased to answer “ Yes ” again. Q. 3'J. You, of course, adhere to the statements which you have made in the briefs of the Dawson Company, Circuit Court of Khodu Island, and in the American Graphophono Company, Circuit Court of Connecticut, which have just been oll'ored in evidence? APr. Hicks: Objected to as incompetent, irrelevant and immaterial, and upon the further ground that whatever the witness mny have said in the suits mentioned are in no way binding upon New York Phonograph Company. 1232 A. Whatever statements were made in the briefs in the cases to which you refer were made with 1 reference to those two cases only. Q. -10. But the statements contained in those briefs wore true, even if made only with reference to those particular cases? Mr. Hicks: Same objection; and upon the further ground that the said two briefs relate to an action on behalf of New England Phono¬ graph Company and the rights of that com¬ pany, and relate also to questions of contract not involved in the issues in this suit. A. There were many statements purely argil- 1233 mentative in the briefs, as is usual in the case of all briefs. Air. Buckingham: The answer in the Helm suit is here offered in evidence as “Defend¬ ant’s Exhibit No. 18, April 5, 1004, S. M. H. Ex.,” and the same is so marked. Mr. Hicks: Objected to as incompetent, irrelevant and immaterial, and upon the ground that anything said by the American Graplio- plione Company or the Columbia Phonograph Company, General, or by Elisha K. Camp, act- Elislia K. Camp D.t,. 412 1284 ins as counsol for them and ouch of them, can in no way bo binding upon Now York Phono¬ graph Company in this suit, it not appearing that Elisha K. Camp appeared ns solicitor or counsel for New York Phonograph Company in the said suit wherein John E. Helm was complainant. Adjourned to 3 p.m. Wednesday, April 6, 1004. 1235 1230 Cleveland Walcott D.Q. SOUTHERN DISTRICT OF NEW YORK. New Youk Phonograph Com- National Phonograph Com- DEPOSITION of witnosB, produced, sworn and examinod the 16th, 17th, 18th, 10th, 20th, and 21st days of August, in the year ono thousand nino hundred and throo, be¬ fore Henry Poartroo, Esq., at his offleo, No. 36 Boule¬ vard Haussmann, in tho City of Paris, Ropublic of Franco, under and by virtue of a commission issued out of and under tho soul of tho Circuit Court of thoroin depending, and wherein NEW YORK PHONO¬ GRAPH COMPANY is tho Plaintiff and NATIONAL PHONOGRAPH COMPANY is Defendant. Tho Com- 1? appointment as * Commissioner, but^vns prevented Paris, August 15th, 1003. 10.30 A.at. Present— Henry Peartree, Esq., Commissioner. William Pelsser, for Defendant. No appearance for Complainant. Clevelend Waloutt, being duly and publicly sworn, testifies as follows in answer to interroga¬ tories by counsel for defendant : Question No. 1. What is your full name, age, residence and occupation? 1240 Answer. My name is Cleveland AValciitt. ; T an forly years of age; reside at Asnieres, Departmcu of Seine, Franco, and my occupation is expert menter and mechanic for the Compagniu Fraugaisi du Gramophone, of Paris, France. Adjourned until Monday, August 17th, 1003, al 11.30 o’clock a. si. at the same place. Paris, August 17th, 1003. Met pursuant to adjournment at 11.30 a. si. 1241 Present— 1 Cleveland Waloutt, tho witness. Henry Peartree, Esq., Commissioner. William Pelzer, Esq., Counsel for De- Pakis, August 18th, 1003. Met pursuant to adjournment at 11 a. si. Present Cleveland Waloutt, tho witness. HuNitv Peartree, Esq., Commissioner. William Pklzer, Esq., Counsel for lie 1242 fondant. at nlj0,"ned lllltiI Wedl,estl,,y> •‘'•"ffust 10th, 1003, Paris, August 10th, 1003. Met pursuant to adjournment at 11 A.st. Present— Cleveland Waloutt, the witness. Henry Peautree, Esq., Commissioner v\ illiasi Pelzer, Esq., Counsel for De fendant. employed by or 416 " ” "y other I’1* king machine enter- 1243 interested i prises? Answer. Yes. ”• p,'*“ ■>““ *■"“ •"«» Answer, f became connected witli the North nu,dUcontinued°tn0f,',lI,l“ C°mpany in J"»«- ^88, S ■ - r C,0nTtetl With tl,at Company until it went into the handsof the Receiver in 1804 Miller C V" ^77,,berof tlle drill of Walcott,’ 0 t T1110'1 llltf °*la,1ged into the name Un ,UtQr i,,t0 tllu Co">Pany , ^ *!fods> Limited. 1 continued with this last-named Company until, 1800, at which time 1 1244 tame to 1 tins in the employ of the Compagnie 1 lancaiso du Gramophone, by which Company I am still employed. J Question Hi. 4. What kind of machines were dealt in by the North American Phonograph Co.? Answer. The North American Phonograph Co. ' dealt in the Edison Phonograph, and the machine phone' Ufc t mfc timU ilS t,l° PI'0“0graph-Grapho- Question No. 6. Was the Phonograph. Grapho- piione tlie inacliine which is now generally known ' us the Graphoplione invented by Bell & 'fainter? i9lfi Answer. Yes. Question No. 0. Please describe as accurately at you can the character of the Phonograph as manufactured for and dealt in by the North American Company up to the time the Company went into the hands of the Receiver? Answer. The Phonograph was a machine for recording and reproducing sound by means of en¬ graving on a so-called wax cylinder. The machine was operated by an electric motor and an electrical battery, either a primary or storage battery. The cylinder was about 4 inches to 4$ inches long und 1240 between 2 inches and 24 inches in diameter, com¬ posed entirely of a metallic soap and made heavy enough to keep its shape and be reasonably strong, and at the same time thick and heavy enough to be shaved off and used a number of times. There were also a few machines made to be run by a treadle, like a sewing machine, but these machines were not used to any great extent. The batteries such as could be obtained on the market at that time for running Phonographs were capable of operating a machine from f> to 1C hours of actual use, after which the battery had to be replenished if it was a primary battery, or recharged if it was a storage battery. There were also a few machines made to run direct from an electric light current such as used for the ordinury incandescent lnmps, but these machines were very complicated and too likely to get out of order to be successful. The so- called wax cylinder used toreceivethe record was constructed with a tapering interior made to lit and in that way to centre itself on a tapering mandrel with which every machine was provided, the same as is used on the Phonograph to-day. Tlie first machines made were what is known as the double spectacle machine using separate recording 1248 and reproducing diaphragms which required very line adjustment and which were too difficult to operate to be successful. This machine was fol¬ lowed by what was known as the single diaphram machine, which was provided with a combination recording and reproducing diaphragm and which was especially designed and intended to be used for the dictation and transcribing of letters. The diaphragm as a reproducer required adjusting fre¬ quently in the course of reproducing a record which had been made any time before, because changes in temperature would probably have changed the size of the cylinder from that which Cleveland Walcott 417 it had at the time the record was made. For this 1240 reason the single diaphragm was not well adapted for the purpose of listening to musical records and was never successful for that' purpose. Later on a special reproduction diaphragm was made which could be used on the same machine and which ad¬ justed itself to the change in size of the cylinder caused by the temperature and was comparatively successful. There were several other changes of a mechanical nature which perhaps improved the machines to some extent, but nothing of grunt im¬ portance except the substitution of sapphire points for the recording and reproducing diaphmms in place of stool ones. Question No. 7 : Please describe as exactly as you can the character of the Phonograph-Grapho- * phono dealt in by the North American Company? Answer: The Phonograph-Graphophone in the early days was a machine designed essentially for dictating and transcribing letters to be used instead of a stenographer. As a means oi reproducing musical records it was absolutely useless and was not used at all in that way. The cylinder was a very light one, composed of a thin coating of a rather gummy wax spread upon paper and which was very susceptible to chatiges of climate. The 12I5J machines'were all made to be used with a treadle for motive power like a sewing machine. This ma¬ chine used a separate recorder and reproducer ar¬ ranged to automatically rest on a cylinder by their own weight, and in that way to follow the irregu¬ larities in the shape of. the cylinder. The record¬ ing and reproducing points were of steel. In general the functions of the Phonograph and the Phonograph-Graphophone were the same and they were both used to record and reproduce sound by means of the same principles. Question No. 8 : Are you familiar with the busi- 12i52 ness arrangements under which the North Ameri¬ can Phonograph Company exploited the Phono¬ graph and Phonogruph-Grnphophono. It so, state what those arrangements were? Answer: Yes. The Nortli American Phono¬ graph Company purchased tire Phonographs which they dealt in from the Edison Phonograph Works, which was the name of the Company which carried on the manufacture for Mr. Edison, and they pur¬ chased the Phonograph-Gmphophone through Mr. ■I esse II. Lippincott, from the American Grapho- phone Company. The North American Phonograph 126H Company in turn rented the machines to different sub-Companies which they had established in dif¬ ferent States of the United States, who in turn rented them to the individual users. The blank cylinders used for the Phonograph, and also those used for the Phonograph-Graphophone, were pur¬ chased by the North American Phonograph Com¬ pany from tile Edison Phonograph Works and the American Graphophone Company respectively, and sold by the North' American Phonograph Com¬ pany to the different sub-Companies, who in turn sold them to their customers, who rented machines from them. 1254 Question No. i). In tile handling of the two machines by the North American Company and by the various local Companies, were they in any way required to offer both types of machine to the public, that is to say, was it optional or not for the local Companies to deal in either or both types of machine? Answer. The Contracts made between the Nortli American Phonograph Company and the different local or sub-Companies provided that those Com¬ panies should offer the two machines to their clients impartially and at the same rental. Question No. 10. Did this method of handling Cler»laad Walcott the machines continue during the entire time that 1255 tlio North American Company continued in the business, or were any changes made in the business methods? Answer. The experience of attempting to rent the two machines soon proved that the customers would not accept the Phonograph-Graphophone, and would use practically nothing brtt the Phono¬ graph. The North American Phonograph Com¬ pany and the different sub-Companies wore unable to got the Phonograph-Graphophone in use, and after some time, I think in the year 1801, either the American Graphophone Company cancelled its l r contract with Mr. Lippincott, or the Contract be- came inactive through Mr. Lippincott’s having made an assignment. As tho North American Phonograph Company imd dealt in Phonograpli- Grnphophones entirely through Mr. Lippincott, who was the solo licensee of the American Graplio- pliono Company, they thereafter dealt no longer in these machines, and cou tinned to handle the Edison Phonograph only. Question No. 11. What I wished to ascertain was, did tho North American Company continue to hnndle machines on tho rental basis, or were any changes made susequently in the method of hand- 1257 ling its machines? Answer. The North American Company con¬ tinued always to rent Phonographs as before, but in about the year 1892, I.think, they began to sell the Phonographs to the different sub-Companies instond of renting them, and gave the sub-Com¬ panies permission to sell them in turn to their cus¬ tomers. 11 A.M. igt. 20th, 1003, 1748 420 58 Paris, August 20th, 1003. Met pursuant to adjournment at 11. a.ji. • • Present — Gi.kvki.and Wai.outt, tlio witness. 1 • Hknry Pkartrkr, Esq., Coininissionor. Willi All Pklsskk, Esq., Counsel for De- ' fondant. Question No. 12. At the time the North Ameri¬ can Phonograph Company began business did it have a standard machine of encli type? 0 Answer. Yes; they lmd a standard Phonograph and a standard Phonograph-Grnphophono. Question No. 13. Please state wlmt you know about these machines? Answer. The standard Phonograph was sent to tile North American Phonograph Company by Mr. Edison. It was taken by myself to Washington > to tile olllce of the American Graphophone Com- ■ pany or of some official of that company, where . .. it was marked with the initials of some of the officials of the American Graphopliono Company for identification as the standard machine, after which I brought it back to New York, and it re- 1 mnined in the offices of the North American Pho¬ nograph Company. There was also a standard Phonograph-Grnphophono furnished by the Ameri¬ can Graphophone Company, which was marked for identification and retained by Mr. Edison at his laboratory. The purpose of these standard ma- - . chines and their being marked for identification was to carry out an agreement made between the North American Phonograph Company, the Edison Phonograph Works and the American Grapho¬ phone people, through Mr. Lippincott, to the effect that while the North American Company should continue to handle these two machines and exploit 421 Cleveland Walcott D. Q. them impartially, that neither machine in the 1201 future could use any feature or device of the other machine wiiicii it hud not already at that time. Question No. 14. Please describe the essential features of this so-called standard Phonograph ? Answer. It was a machine with an electric motor attached to actuate it, and intended to be used in connection with a storago battery. The cylinder used was made entirely of a soft wax, apparently like beeswax, or perhaps a little bit harder. It tapered inside to fit the mandrel of the machine as I have already described. It was the double spec¬ tacle type of machine, provided with separate dia- phragms for recording and reproducing, which re¬ quired careful adjustment, and with steel record¬ ing and reproducing points. Question No. lfi. This type of machine, I under¬ stand from your previous testimony, was modified and improved in some respects, was it not ? Answer. This type of machine, exactly as it was at that time, was never dealt in, as the improved cylinder constructed of hard, metallic soap, was brought out by Mr. Edison almost immediately, together with, new styles of diaphragms for using this cylinder, which was a great improvement upon the first one. Shortly after, in fact as I remember, 1 263 before more than 100 or so of these machines had been put into use, another improvement was made doing away with the double spectacle and sub¬ stituting in its place a single arm desigued to hold a diaphragm which, by changing its position, be¬ came either a recorder or a reproducer. This dia¬ phragm was also fitted with sapphire recording and reproducing points. The adjustment of the ma¬ chine was simplified, and several other minor changes were made with the idea of making the machine easier to operate. These were the ma¬ chines which went into general use, and after some time a separate diaphragm for reproducing only was made which obviated the necessity for adjust¬ ing tile diaphragm during the processor reproduc¬ ing a record which might Imre changed its size on account of the change in the temperature. This was known as the automatic reproducer, and was tile last improvement of importance, although several unimportant improvements in the nature of construction were also made. Question No. 1C. How long did you remain in tile employ of the North American Phonograph Company, and also state what position you occu¬ pied ? Answer. I liavo already stilted that I was con- nected with the North American Phonograph Com¬ pany from June, 1868, which was prior to the actual incorporation of the Company, until the time it went into the hands of the Receiver, in August, 1894. At first I was employed its Ac¬ countant and Cashier until about January 1st, 1891, after which time I became the official Secre¬ tary of tlie Company, and continued in that posi¬ tion for tlie balance of the time. During part of tins time, in fact until Mr. Lippincott made an assignment, in May, 1891, I also acted as his private Secretary. Question No. 17. Was your connection with the North American Co. such as to enable you to state what the general conditions of tlie business were and how the machines were accepted by the pub- Answer. Yes, I was thoroughly familiar with all the details of the business. Question No. 18. What, if any, complaints were received by tlie Company as to both styles of pany1?'13 ^ ^ ^ Nonh Corn- Answer. The general complaint in regard to the Phonograph -Graphophono was tiiat tlie cylinder1207 was too susceptible to change of t i nt ,re md atmosphere, and that the machine was not adapted to the making and reproduction of musical or en¬ tertainment records. As regards tlie Phonograph, the principle complaints were in connection with the mechanical construction of the machine, which, although a machine made with the greatest accu¬ racy and of tlio finest possible workmanship, was or perhaps too delicate a nature to be easily kept in perfect order by the ordinary user, who might not bo a mechanic. As a machine for recording and reproducing sound it was perfectly satisfactory • m the results that could be obtained from it, and, in fact, was practically as perfect ns tlie Phono- graphs which are made to-day. The only diffi¬ culty was. that the machine was perhaps difficult to opeiate in the hands of an inexperienced person, and tlie fact that a battery was necessary was a' great drawback to the successful introduction of the machine. Question No. 19. Were the improvements made in the Phonograph from time to time directed to overcome those objections? Answer. No; because practically no attempt was made to .overcome the necessity fertile use of a 1299 battery and electric motor. Towards the end of the existence of the North American Phonograph Company some of the sub-companies or people not connected with Mr. Edison started the introduction of different clockwork or spring motor apparatus for operating tlie Phonograph, but up to that time they had hardly been perfected. Question No. 20. What, if any, other reasons can you give for the failure of the business as conducted by the North American Phonograph Company? Answer. The whole business of the North Amer- ican Phonograph Company was originally started with the idea of furnishing machines to be used for the dictation of letters or the taking of testi¬ mony in Courts and otherwise to replace stenogra¬ phers, and although this was the principal object always in view, the Company were unable to in¬ troduce any great number of machines to be used in that way. In fact, np to date, although some attempt is always made by botli the Phonograph interests of the present day and tile Gmphophone people to sell machines for this purpose, it is un¬ successful, nnd machines sold in this way form but a small percentage of the business done in talking machines. Since the failure of the North American Company up to the present time I have continued constantly in the talking machine busi¬ ness and have sufllcient knowledge of the business I believe, to state the above fact. The failure of the business was also due largely to the system originally started of renting the machines. By their Agreement with the different sub-Conipanies and with the Edison Company, the North Ameri¬ can Company were forced to rent their machines at 820 per year to the sub-Companies, who in turn rented them at 8-1.0 per year to their clients. In ! addition the North American Phonograph Com¬ pany were also obliged to replace free of charge any parts of the machines which wore out in use, and to add free of charge, to the machines any im¬ provements which might be made. These agree¬ ments were entered into before the cost price of making the machines was known, and the North American Phonograph Co. J' when it agreed to rent machines tit 820 per year had no knowledge of what the machines would cost, nor what would be the cost of keeping it in repair, nor the cost of adding such improvements as might be made. Eventually it turned out that the cost of the ma¬ CIs va chines was several times more than they had orig- ^72 inally estimated; the running expenses were ex¬ traordinarily high and the cost of putting on each new improvement on all tile machines which were scattered over the United States from New York to California as fast as the improvements were made, was something which made it impossible to realize any profit over the annual renting price of $20 per machine per year. After the method of selling machines had been in operation the North American Company was making a reasonable profit oyer its actual running expenses, but by that time they had issued 8300,000 worth of Bonds bearing (i% interest which were in payment for the bal¬ ance due on the original purchase of patents and tile purchase of some of tile outstand¬ ing stock of the old original Edison Phono¬ graph Company and for legal and other ex¬ penses in connection with the Company. Although for a year or so the Company was able out of its earnings to pay the 818,000 per year of interest on the bonds, it was finally unable to do so, and the Receiver was appointed upon the demand of one of tlie Bond-holders. The fact that the North Amer¬ ican Phonograph Company was unable to collect all of the money due to it from some of the sub- 1270 Companies also helped to bring about the inevit¬ able result. Adjourned until Friday, August 21st, 1003, 430 1270 August 21st, 1903. Met pursuant to adjournment at 11a. m. Present: Cleveland Walcott, the witness. Hunky Pkaktkke, Commissioner. William Pelzek, Counsel for Defendant. Question No. 21. What cimnges in the Phono¬ graph or Graphophone in your opinion are respon¬ sible for tlie present extensive use of these two ]277 machines? Answer. The principal and most important change was the adoption of clockwork or spring motors to the Phonograph. Tills made the ma¬ chine so that it could be used by anyone without expert knowledge; reduced the cost of running the machines, as it did away with the necessity for a battery which had to be replenished from time to time, and also enabled different types of Phono¬ graphs to be made which were much cheaper in construction than could possibly have been made when tlie electric motor was in use. Of course, these spring motors were not put into general use 1278 immediately after tlie failure of the North Ameri¬ can Phonograph Company. As I have already stated, at that date several types of spring motor had been made by some of the different sub- Companies; for instance, the Pacific Phonograph Company, the Kansas Phonograph Company, and later by tlie United States Phonograph Company of New Jersey, which was an independent Com¬ pany not organized under the North American Phonograph Company. These spring motors made at that time were either very expensive or unsatis¬ factory, but they were gradually improved and re¬ duced in price until finally they were practically 1754 427 Clevalamd Walcott D.Q. perfect and to all intents nnd purposes were the 1270 only tiling used except by professional record makers, who made records to sell. Question No. 22. What, if any, changes in the management of the North American Company, and tlie method of dealing with the public, took place during your connection with that Company? Answer. At tlie commencement the oflicors of the North American Phonograph Company wore . Jesse IT. Lippincott, President; John ltobinson, Treasurer; Thomas R. Lombard, Vice-President, and George H. Fitzwilson, Secretary. These offi¬ cers were not changed until about January 1st, a28o 1801, when, as I have already stated, I was elected • Secretary iu place of Mr. Fitzwilson. Later, Samuel Insull was elected President to replace Mr. Lip¬ pincott, and Thomas Butler was elected Treasurer to replace Mr. Robinson. I do not remember the exact date of these changes, but it was while the North American Phonograph Company was located in Jersey City, and just before they moved their offices to the Edison Building in Broad Street, probably about the close of the year 1801. Later’, Mr. W. Nolan became Treasurer in place of Thomas Butler, who became incapacitated owing to failure of health; Thomas A. Edison was elected 1281 President to replace Mr. Insull, and A. 0. Tate was elected Vice-Presiden t to replace Mr. Lorn bard. After these changes in the officers were made a considerable change was made in the policy of the Company. The sale of machines was commenced instead of renting them only, and some attempt was made to push the machines in connection with the use of musical records and for entertainment purposes. It was after making those changes that, as I have already stated, the Company began to make a profit over its running expenses, not including the interest on its bonded indebtedness, 428 1282 but tile fact that only the electrical motor was in use undoubtedly prevented the business from at¬ taining much larger proportions than it did. At about the middle of the year 1803 the North American 'Company also made an attempt to im¬ prove the business by making contracts with the different sub-Companies which allowed the North American Company to deal in the machines di¬ rectly to the public and to pay a commission on this business to the snb-Company in whose terri¬ tory the business was done. The North American Company was dissatislied with the amount of en- 1^83 ergy dfcp’nyoa by tlle different sub-Companies in their attempts, to introduce the machines, and believed that if it were allowed to do it itself a better result would be obtained. This system was actually put in use in the territories of almost all the sub-Companies and resulted in increased busi¬ ness, but not enough to prevent the ultimate fail¬ ure of the Company to meet the inturest on its bonded indebtedness. Question No. 23. Bid this change in the method of dealing with the public extend to tho State of New York, where the Metropolitan Phonograph Company and the New York Phonograph Com- 1284 pany, and subsequently a consolidation of these two Companies, attempted to do business? Answer. Yes. Question No. 24. So far as you are aware, were the officers or managers of the North American Phonograph Company at this period in any way personally responsible for the failure of the busi¬ ness, or was it due solely to the character of the apparatus? Answer. I am perfectly certain that the officers of the Company made every possible effort to make a success of the business, and attained the best re¬ sult possible with tho machines which at that time Cleveland Walcott 420 were made. In fnct I am sure that for a consider- 1285 able time after the failure of tho Company, when the business was done directly by the Edison fac¬ tory, that no better result was obtained as long ns the same classes of machines were used, and that it was not until the improvement and perfection of the spring motors was accomplished that any ma¬ terial increase in the business took effect. Question No. 20. AVlio, it you know, invented or improved the spring motors for Phonographs, which, as you say, made the machines a commer¬ cial success? Answer. As I have already stated, one of the earliest spring motors was made by the Pacific 1 Phonograph Company of San Francisco, who also made a motor actuated by a falling weight, and the American Graphophone people were also rather early in the field with a spring motor for the Graphophone. Later on Mr. Capps, a mechanic connected with the Kansas Phonograph Company, and later with the United States Phonograph Com¬ pany, succeeded in turning out a spring motor which, although rather expensive, was compara¬ tively satisfactory in the results obtained from it. There were also a number of other spring motors, for instance one made by a man named Pearce in 12S7 New York, who had no connection with the Phono¬ graph business, but which was also expensive and required an excessive amount of power to wind up, although it was very satisfactory as far as the re¬ sults to be obtained were concerned. Mr. Edison also objected to the use of the spring motor on the Phonograph because it was not perfect in the re¬ sult obtained at the commencement, and evidently he did not wish an imperfect motor used in conneo- nection with his machine. It was only after com¬ paratively satisfactory results had been obtained by people not connected with him in any way that 1288 he began to turn his attention to the motor him¬ self. Question No. 20. So far as you know, did Mr. Edison make every possible effort to improve the Phonograph and make it a butter selling appa¬ ratus? Answer. Yes, lie constantly experimented and made numerous improvements which were vury valuable and which are still in use, and f believe liis failure to give his attention to the spring motor was due to a sincere belief on his part that the spring motor could never be made to give satis- 12g£) factory results. Question No. 27. After the Metropolitan Phono¬ graph Company or the Now York Phonograph Company, or the Company which was a consolida¬ tion of these two Companies, ceased to do business in the State of New York in July, 1 SOS, did either of these Companies or the consolidated Company ever resume active business, so far as you aro aware? Answer. No, they never resumed active busi- Question No. 28. Can you state of your own knowledge whether or not after the 1st July, 1803, tlie North American Phonograph Company or its 1200 officers or employees ceased their efforts to sell or increase the sale of Phonographs and supplies therefor, or the use of same by the public, either on a rental or sale basis? Answer. No, on the contrary, they increased their efforts. Question No. 20. Please state, as fully as you can, your knowledge of the conditions of the market for Phonographs and supplies in the years 1893 and 1894, having in mind the sufficiency of the supply of Phonographs us compared with the public demand, and also state what are your sources of information on that point? Cleveland ^alcot Answer. There were always enough Phonographs *291 on hand to meet the demand, and there were no delays other than such as would be likely to occur in any business. The duties in which I was engaged were such as to compel me to know about these things. Question No. 30. Did the North American Pho¬ nograph Company continue to send out Phono- graphs up to the time it went into the hands of the Receiver? v Answer. Yes, but all the Phonographs sent out during the latter years were machines which had formerly been sent out by the Company, but had 10Q^tp{ *V; Ap^ ; \ •*y I /t-tro-o \ Whr’xv Sy> j; / y-crv~t> !j / I j /*?*A r ! ' i _ &&hr7 \&U* ; .. j ’ j~ ^ ^-^OsOLJLC mV; ^ //>■#* :•«! /'y/y 'iVM$jt!i i f*}fAiZ~ 'P'lfm.i) ; Wfe^' ^tT / r~|VH ; ' ' T ;^l,v ^ ■! > %^r7r>/ *S / l^tTi/7 V t/ 1 $lj -/V-jr-]* m '>j |W| f/J 4J~3 j Tyo fit *~AAAL aQ/u^ a.fisu{'/,/2j W s*?tn ^ ttrg^tovL. ^vc^P\ ^Of-u^U^y, AtA / 7 f. Kt/ £U~U 'kCiZZZcJj^, -j *& /oeIc« tun y$^uf ^ | ~/'y^ ^CtJ-c*. ft Xlo-nflt eA'/eio j?^,A> t-ty i ^ *-(’ -'/teht+.f n.f /i\ n .sk&i CM/U&Z aj*~c.*yz£**~-w * &t£Z ~//zur^ a.-) sUsf—v-^lt-^c-Cfcu^ /k*-j£ /U*if A-tMjLZ£f—4y isfeu. O-a&h^SLl £>-„ Ajosua-cs^ I'VUA /&s***fi fist *4*4) CL^ptltAju~7%<~ 1 - / SD ££t+AJh fiit. $fi«xAc 4/ t&c 6&C. /rffce/C“ &<*< *-t*^L.fcZ^i ar-tfci fisvA^. fiTsUvo, (&**/( #£t_ ygrf-i r*~ vATTC^i 4^QBL&C\ a. tftfZC, 71 •Muium CL&'fur*. Tu,. /iyy t MWMOT OK Clrc,,it c°urt °f th° Unued 8u,,e8 f°r ti>u di" The New England Phonograph Company, n corporation iloly organized and exlat- of tl,oi titntA°f >f,:lnvn,i I,!nrii,g ,ts princ5,mi °mc° nt G|,rdfner. irgnnized ami existing under the lima of till* Stu t e o°f W^r V^gi nin^ S hav i rfg i fa •m plu i'll t °m (:BJ 11 ^ l,W Plst^t^ 0ulliml)ta- brings this, tliolr bill of ■our orators will oror pray, olo. '' Solicitor (or Complainants. jH8 , E. Evans being duly sworn, uncording to law on his oath, nays: that president of tho Now England Phonograph Company, one of the complain^ e foregoing bill named; that ho has road said bill of complaint and is (until* lio facts therein set forth; that tho facts thoroln sot forth aro true to tho 1817 considering the aUbjeot matter embodied in thn olaiaa aljoro quoted, I find that there la a hollow cylindrical oelf-BUotaining tablet, a tablet-holder, a feod-3orew,gosr- lng :'or rotating tho aaid. feed- ecrew, a hinged frame for con¬ trolling aaid ocrow and a recorder and roprcduoer mounted on a atandnrd.and a carrier provided with a divided nut. There am otruoturnl differences between the apparatue oovored by said olalme and the aald cylinder graph- ophone machine "Exhibit 1, S. 0. F," but ouch difference* a> exist are of a oho.raoter that make tho said cylinder cruphophono machine praotloally the same apparatus oa covered by aaid claims. Whatever changes there ore are mechanical differonoee which a re equivalent for the meohon- lsm shown in the patenta. In my opinion the atrueture oovored by the above quoted olalme and the cylinder grmphophone arc identical. In ny opinion the ntnintura suamrlgori In o structural differences between « " th° SRlrt ottlndnr graphophong practically the s » patont. 7.?ml,iiYor changes for thn ajohenisa ooyorod lv thn claims. I®. ?h« combination, »d.th a rr.urodunin . of amounting therefor, »h)0h leavs*'!??, ?e, lile' to tot* lot.orgj.ly, ami thurehy gw ?. f?** frne ictO-ly to u eounrt-rooord, "roof°* ‘tally H dooori'bott, lc jly l,,M "■Oord.KUhgu.n- 31. 5»io roor«.dMoor mo, of i Joint nnd hold ncalnr.t ih, a nnivoroal «r«, substantially asdo^orlbed 7 7 1f JIUILV? *?• X ?hSTd’ J t ltD<,lf t0 "^tantftl^Xoribod. 1 lrronulor groove with sloping walls, of a raproduoor having a style for rubbing oyer said record and noun- tod on a universal Joint, substantially as dosoribod. 34. The combination, with a sound-reoord fortiori in wax or a vax-liko notorial, of a rsproduoor hi wind a rubbing style for reoolvlng sonorous vibra¬ tions fron said reodrd, substantially as dosoribod. 3(1. The reproducer mounted upon a hallow stand¬ ard uhloh forms a oound-oonveyer, substantially as described. S’. The roproduoer mounted on a hinged arm, and provided with a aound-o»nvoyor, extending longth- wlao of said arm, substantially as dosoribod. 38. Thn roproduoer mounted on a hinged ana, and prorlded with a cound-oonveyor extending length¬ wise of oald arm, end oonnooted at the hinge with on exterior sound-oonvoyer, substantially as de3orlbed. Hefsrrine to the specification and drawings of the patent and the said cylinder graphojdiono roproduoer marked "Exhibit 2, i'. 0. we have the reproduce er, a mounting thorofor whloh leavoe the reproducer style- fro* to movo laterally, thereby adjusting itself nutomatie- to the reoord, a universal Joint permitting the ro- ally DISTRICT or HHODB ISLAM) ENGLAND PHONOGRAPH >Ainr, true, g ^ ^ I1AWBON COUP ANY R 5 V I S Y. vitfT, '..'ilni; duly i. ora'll uoyu : I am already aado HEW ENGLAND PHONOGRAPH COMPANY VS. THE DAWSON CO. .IP ANY BRIEF FOR CO This suit is Brought to root: lettors potent. The infrijriRem doniod, and tho exhibits and- ex. existence of any rights, ariains from aaid agreement, t late of the fllinc of this hill. The doiibte aa to tho complainantb right to relief, its acquieaoenoe and entire lack of dtlleenoe require the denial of . tho petition for —559- 1883 : UNITED 8TA5B3 CTRC1/IT COUM DISSHIO’I OF CO’ti.'jiGTTCUS. ni!'=' ::!Iglai.'d pitohocuat-k o AlilliiTOAil OiSi «or.:;.-;ry , to roatrain itho dnfar.dnnt iron .-soiling graphoph-.-nou and suppiioo thorofOr. Tho potontu r.uod on ore owned by tho Amor io on Graphophono connany . Tho urticloo conplainod of aro r.ar.ufas turofi by it, and aro nr. Id by it in tho ordinary couroo of bnoir.oao to tho Columbia Phonograph coispony, - Conor ol, ito solo colling ogont, who in turn aollo them to dealoro, by whom they aro oold to tho publio, Tho only artiolon oomplainod of aro manhfnofaiand raoordo manufactured under tho patonto by tho ownor thornof. Tho claim of tho flow England Phonograph company io based upon on allogod lioonsa, granting aoid Company the e right in tho now England 3tatoa to loaoe and uoo sxolusive ' to. do tho thlngo oompiainod o Juj» 10, lope, sustained tho ; further prooeoutod for roaaon on* Ho. 341,014 and dated Hay 4, 1806. ducop affidavit;; showing b businooB of oolling Defendant shows by oortifioatoo from tho. propop authorities of tho Stato of Maine (whore tho van England Company ia inoorporatod) that oomplainant was mwoutod in of Lyle that tho Ho;? England Company hao not boon ongogod in tho bu3lneea oontomplatod by tho ullogod lioonuo-agroo- jfor roro than ten (10) years past graphophonoe and ouppHea have boon sold frooly throughout tho Hot: England 0 tatoo bjr tiny of noroh, loos, and for such further porlod at the option of tho party of the nooor.d pari, no ohallbbo equal to the tieo for which the party of thofirot part shall become authorized to grant any ozclunivo lioonne wider any patont or patonts relating to Phonographs or Phonograph Orophophonos or improvements therefor, unless aoonor terminated aa hereinafter provided, and ohall oxtond and exist and he oxaroioed and tho instruments and- property loauod hereunder nhaJL ho uood only within tho following doooribed territory^ namely, tho states of iiaino, nor Hampshire; vorraont, Hnonaehuoetts, nhodo Inland, 5 tho failure to ohor any lioonoo o auid Lippinoott, or any n Phonograph Company from mont hae boen renewed beyond liar oh no, 1003, a in a suit betwoon different porlio3; (b) the Hern Jorooy exorcioiric bald rifihtn, ban fulfilled anti la Lt» obligations undor fluid, aontrnot, is oorruing md or. llo.auoh allogationn corcioo, by a Court of Equity, of the extraordinary relief of pawijjiUiittv inj motion, in soil nottlnd by uni¬ form dooiolono. The gonoral prinoiplo, an otatod In Giwnil V3 FUBHOH (4 B & A 100), i» that "the Court sill not iond ito holp by ury of pro- linir.ary injunction in thono oasen shore it appears that tho oontploinont had ncquioaood in tho lnfringenont and unroaoonnhly dolayod oult ngainct tho ir.fringoro.. vnior, pa ton toon oloop over thoirrlghte without an oxoueo, thoy nniat not rely upon tho extraordinary aid or tho court shon thoy osaho iron thoir slumbers,* l>Q0hea and acquioaconco on tho part of tho oonpiainan* in a ouit for in'ringomont, uhothor of a patent, copyright or trode-mark, oro grounds for denying a preliminary in¬ junction. Keyoo vn Wining Oonpany, 158 U. 8. ISO; 15 sup. Ct. 773; Id., 45 Fed. 300; Kayos Vo Hofining Company, SI Fed. 5G0; Mindy vi; Ikmdall, 2S Pod. 591; United Hlohol company vd lies Mono sewing liaoh. Company, 17 Fed. 528; Price va Steel Oonpany, 46 Fed. 107; T/alto vo Chair Cor- any, 45 Fed. 258; Andrews vu spoor, Fed. oa a. Ho. 380; sparry vo Ribbar.o, Id., No. 13,230; Spring vo Sarin,': l!ach, Company, Id., Ho. 18,258) North vo Korshim, Id., No. 10,811; Oloat va Pymton, Id., Ho. 12,940; Stevcne vo Folt, Id., No. 13,397; P arbor vo coaro, Id, , IT.-, 10,740; Jonou vo i'errill,. id., tto. 7,481; Whitney vo Machine Vorko, id., No. 17,boc; *1 1 ■ Oooftyoar vo Honoingor, Id. , no. 5,572; I'orriu vo I!fg. oonpany, Id., llo. 9,8SS{ It hail boon hold that a dolay of eighteen (18) months if no good roaoon thorofor in ohmn. l.r, grouta fur rofuoing a preliminary injunotion. HoolOioiror vn Bagor, Fod. Can. Ho. 0568. A delay of uovon months wnu hold to bar an injunotion. Eoooourt vo Eoicourt Hop Sosonco oonpany, 10 Oh. App. 276. In thin regard tho oaao proonntod by eompidinant io truly ronarkabio. ornphephonec and soundtrooordo are sold throughout tho hot? England Btutou by hvndrudo of doalors. For oortniiily noro than ton (10) yoaro paot, tho .Vr/h'iorji Oraphopbono company, as. sorting oosploto title and nwnorahip, and tho full and eolo right to diopoao of its patented artiolee throughout tho Hen England States, hao proooedod without dioputo to oxcrcioe those rights; and, pith tho full knov/lodgo and aoquiosoonco of the complainant) their doalors havo ootabliohod a trade in those artiblen which they Ore nop engagod in supplying; Hi thin sis woe ha' of tho oxpiration of tho patents. and throe days of tho expiration of a lloonoe agronr.ont fif toon ( 15 ) yoaro old, complainant cornea into Court •.:1th tho auduoiouo requoot that thio trade bo inutantly danoliabod by an injunotion pendonto lite. It is not nocousory to olaborato on arcumont against, a requoot no palpably propostaroua. Of scurso ovon when a olonr right io established, the on in advanoo of Court rill graft an injure tic final hearing 1892 1893~ 7!m BTJ.I, DOES ho; CTATB A CASK roll IHTIili- POSITIOit Q? A COURT OF BOttITY. Alii) OIIOULP . qagr* Thlo^cuit under Eettnro Patent, tho juried! ction of a court of Equity oan ho invoked only upon tho otntnmont or u oiioo v/hioh, if fully ovpportod by-proofn, would juat- ify injunctive roller to uavo oompininant from irreparable lnjiav, and If, irlion tlio eaoo oonon before the Court on the application for preliminary injunction, it appoaro that up pround for injunctive roliof oxioto, tho .bill uhould be dloiiloonc. Thorn io no allocation in tho bill that tho aota of defendant ouuijo or tiiroanton injury to tho Hon England com puny, or abridge tho riphto it olvina, or that tho latter han not a full, adoquato and complete remedy at lav. The facto bring tho oauo oloarly within tho application of the oatabllehod dootrino ntated in tho following oaeea; 8Timro;ra vn btevehc Aims co.. (9G p. 344), snowy j. There rraft a dolay of ten yoarn in aasertlng tho alleged righto of complainant and tho court hold; =Tbero was a nanifeot good faith in tho elalia of thn defendant that it via a not infringing tho ooRplnlnnnta device, and it would oporato aa a groat injuotice at th.io lato day to ir.torfore with an eotabllohed buoinooa conducted under and upon claims of right for 110 many yoaro. Tlio eorely tho claim for profita, but any claim to i r,5}iof by injunction in innppro- lato ao whore tho potent han oxplrnd, or yMtme 5 cirounotnnooo oro cuoh on to Juntify a court eotmt*? '-‘Wttablo rolior, tlin uuit will not entertained for the more purpose of en account paut danagno and • rofita.” Ground for injunctive reiiof.iu wholly lgol-jlng in tho preuont cooe. not only bocauno of tho nvr.i.t Hn. m, _ smiOT/ITZ Upon a showing of ton yoara delay and aoquioooonoo in tho alleged infringing aoto held that •oor1(piainanto io die- ontitiort to relief in Equity by noaoon of ito lachoo and do- 800 ol oo judge Brower' a exhauotive opinion in McLaughlin vo Hallway Company, 31 Fad. 574, whioh woo fulA lowed by the Buprorao court in Keyeu vo Burofca Itlnlng co., 15« U. 3. 15ft- Opinion by tho Chiof Juntioo. In .the HoLaughlin . oaqo , Judge Brewer dluatoaod the *U1 beowae of thirteen yoara delay, by plaint J«Jbi in tafc- ing aotion to enforce hie alleged righto, Ac to this do- r«noo tho ecu t ouid:- •All tho adjudged eonoo in regard te laohoo prooood upon tho inoquitnblo conrtuot of tho eorplainant and tho inequity whioh would reault if tho otalo olein wan permitted, to be enforood, and the Judgment advoroe to the olairaant aro fwmded upon tho fact that the party to whom laohoo ia leputod han all tho timo 'hnowledgo of hia rigl'.ta, and an ample opportunity to ootablioh them in the tmn proper forura* ; that , by Beacon of hia dolay, tho ndvorae party iiaa good raaaon o boliovo that the ollogod rights are wotthleoo or havo been abandoned; and that, beoause of the ohango in oondition or rolationa during this period of de¬ lay, it would bo an injuatiso to the latter to pebmlt him to now aooert them." COXK J,. in lllCHAHDSOil V3 OSBOUIiHB A CO.. (82 7, 35 at P.98). "no for no the defendant io concerned the ocmplainant gave no intimation that at luot ho waa ready for tho oor- fliot. Ilia lothargio olucbor woo apparently unbroken by even a dronm of proapeotlvo profito. In 1883 the notice wuo given. In 1893 the cult was oommonood. Sho dofondant was, thoroforo, permlttod to infringo without a word of pro- toot for at louat ten yoara. " "It ic unnooouunry to ;>uroue tho nubjoot further. Suf— fieo it to oay that tho record prooonta ono of tho moat flagrant oason of Inchon with whioh tho court io familiar. If thin aotion can be maintained a patehtee hno simply to pookot bin patont, wait until tho field ia full of in- fringqrn and begin bio auit two nonthe before the patent ftxplrea. ■ r.Tion ohargod with laohoo he has simply to on nor t ■S' 1896 -14- that until ho coisnonocd hiti suit ho thought tho ohanooo of buooooo ttuhican and thoroforo, did not call tho lnfrinRors to account. It la pi "In that tho ;uhllo righto oannot do- pond upon conaidorutionn no ohadovy, unilateral and inoqult- ahlo, Unlooo tho Courthin prorwod to r/”> that tho do- fonno of laehOB rill no longer ho o-.ifrvri Is: : . ator.t' cult It ntot find for the riofnndmit osi this: icuuo. The law of Inchon io no poll undorntood. that it in rnnoocueary to re¬ state 4t. It^in thmrrht thot^no coco orji ho found oxouaing hcLn.rn v.j Florr.j , PC |. n. nnllihnr vo Catoell, 14B U. 0. 360,1!; Sup. Ot. 073 uonondna va Holt, 128 U. H. 514, 0 OUP.Ct. 14SJ Hardt vn Hoidpoyor, 152 U. S. 047, 14 nup. Ct.C71. VS Hophinn , 143 U. S. 224, 12 Sup.ct.41G; Konmand ■whon the party ban a plain anrl oojnploto rocedy at law, la to deprive the defendant or hla constitutional right of trial by jury. The late Justice naldein, of thlo circuit diecuanoo the oubjoot with isuch ability and rosearoh, in tho case of Baker vs Biddle, 1 Bald. 864. Bee aleo the more rooont oaoos of lllpp va Babin, 10 Her. 8TB. ItnrU va cooks, 88 vail. 466; Duraont vo Try, 18 Fed. R. 21. » In Pootor Pod. Pr. (8rd od. 1001) oeot. ao'o, p. osc. •Advantage Boy, horrover, be taken of the laolloo of tho plaintiff by a defendant uho hoo not Ploadod it,» Citing Bokor vn Biddle, oupra. ) AMERICAN GRAPHOPHONE COMPANY By MERVIN E. Itfuc, Viea ] COLOMBIA PHONOGRAPH COMPANY, By HAUL H, OROMELIn 1024 U^ITEIJ STATES CIRCUIT COURT, SOUTHERN DISTRICT OP Nh\V YORK. New York Phonograp] Company, Complainant, . against Thomas A. . Edison, Edison) Phonograph Company, Edi-i son Phonograph AVorks,! und National Phonograph Company, Defendants. /3i Zfttec Rlisiia K. Camp, fop Complainant. Louis Micks, John C. Tomlinson, of. Counsel. Roma so.v, Riddle & Ward, for Defendant. ■” h- Buckingham, C. M. Hough, Prank L Dyer, AVilliam Pelzer, of Counsel. Hazel, J.: This . action is brought to restrain the defend- ; n s 11 oi us A. Edison, Edison Phonograph Com- I' ,’ Phonograph AVorks, and National 1 honograph Company from selling, leasing or dis- posmg of phonographs and supplies tlierefor, with¬ in the State of New York, and for damages and an iicconnling The basis for the action is He II „ i infringement of a license or contract , Hole 011 ts Predecessors and the North r',‘0n?gl'npl1 Co,nPa"J (liereafter re- fhHcd to (is tliQ American Company, which the bill charges granted the solo and exclusive rights to use, exhibit and lot phonographs and to sell and dispose of appliances therefor, in the Slate of New York. The legal rights of licensees, under sub* slant iully similar contracts, have been several times before the courts of the United States on de¬ murrer and motions for preliminary injunctions. New England I’hono. Co. v. Edison cl at., 110 Fed. hep., 2(5 ; Now York Phono. Co. i\ National Phono. Co., 112 Fed. Pep., S22; New York Phono. Co. i>. National Phono. Co., 119 Fed. Pep. 5-1*1 ; Columbia Phono. Co. v. Whitson, IS App. D. C., 5(15; Colum¬ bia Phono. Co. v. Puli ley, 122 Fed. Pep., (123; New York Phono. Co. v. Jones, 123 Fed. Pep., 197; be¬ fore Jrnlgu Prawn in New England, Phono. Co. v. Dawson Co., and before Judge Carpenter in Ameri¬ can Graphophone Co. v. New England Phono. Co. ct. at., unreported. Thu bill charges Mr. Edison and defendant companies with entering upon a plan or scheme to avoid the contracts for licenses and to hinder and obstruct the complainant in the exercise of its sole and exclusive territorial rights. Sendee of a subpoena ml rcspomlvatlum was had upon tile National Phonograph Company only. The salient facts chronologically stated are these: Prior to 1SSS, Jesse If. Lippincolt acquired a license of certain patents of Alexander G. Pell, Chichester A. Hell and Sumner Tninlcr for the Invention known as the Graphophone for the pur¬ pose of exploiting, selling and manufacturing the same in the United States and elsewhere. At this time Thomas A. Edison bad also invented a ma¬ chine for recording and reproducing sounds and articulate speech, called the phonograph. On Oc¬ tober 28, 1SS7, the patents obtained by Mr. Edi¬ son on his invention were assigned to the Edison Phonograph Company, a corporation owned and controlled by him, the right to manufacture, how¬ ever, being reserved to him. This right was, on Work? 1888’ nSS!SUOd t0 1,10 Edison Phonograph Mr rr" 001 1)01111 011 also °"'ne' conveyance and assignment Edison, Edison Phonograph Works, Edison ^T'n ?d LippillC0tt- dited Octo- be 1. 18S8, the North American Phonograph Com- I 1113 became the owner in perpetuity of the sole and exclusive title and interest in and to the cer¬ tain patents of the defendant Edison relating to he phonograph, for the express purpose of on- ibling it to sell to sub-companies and agencies ^du»,vc to-itoHal rights throughout the United States and Cnnndn. The Company was in¬ corporated on October 12, 1SSS, under the laws of n e" Jersey, with an authorized capital of §G,G00,- 009, and Mr. Edison became a stockholder and di¬ rector therein immediately upon organization. Not on i "ere patents covering the phonograph trans- - ferred but it was agreed that future improvement patents and inventions made within fifteen years thereafter were to be assigned to the American Company, lhe Metropolitan Phonograph Company (hereafter referred to as the Metropolitan Com- puny), was incorporated on October G, 1S88, under the laws of New York. In consideration of the cash payment of one hundred thousand dollars the American Company granted on October 12, 1888 to the Metropolitan Company, for the period of five years the sole and exclusive rights to the use of the phonograph and graphophone and for the use of appliances therefor, and the right to use, exhibit mul sublet such insirumcnls and to sell the neces¬ sary appliances therefor, within certain specilied counties of the Stale of Now York. Such agree¬ ment, however, was extended, as will subsequently appear. On February (!, 18S9, a similar contract of license for a period of live years covering territory in the Stale of New York, not licensed to the Met¬ ropolitan Company and comprising the City of New York and certain other specified counties, was granted lo one John P. Haines, acting for thu New York Phonograph Company, a corporation to he organized thereafter in pursuance of such agree¬ ment. The actual cash piicc paid in consideration of tin; territorial license to the last mentioned Com¬ pany was one hundred and t.Weuty-llve thousand dollars. Both written agreements contained provi¬ sions and restrictions relating to retail prices to he paid by local companies or agencies, manner of buy¬ ing or leasing instruments and supplies, option for extension of license and general details regulating the conduct of the business. The New York Phono¬ graph Company (referred to as thu New York Com¬ pany) was, in pursuance of such agreement, in¬ corporated on February 8, 18S9, under the laws of (he State of New York. In September, IStlO, the Metropolitan Company and the New York Com¬ pany were consolidated into a single corporation, the complainant. J lie proofs show that thu licensees conducted the business for which they were incor¬ porated, in the Slate of New York, during three years without interference or molestation, hut with ratlmr_iiiillll'ej,i.'iil^liiiaiiciiil success, Contrary to nTeexpeelalinn of the promotors the business was not. prosperous, and all the witnesses are agreed that the enterprise was unsuccessful because of defects and imperfections in the phonograph and inability to procure machines with which lo do business. Between July 1, 18t)2, and July 1, 1S93, the New York Company, though engaged in business, 1928 owned scarcely any assets. For reasons hereafter stated, the business appears to have been conducted at a great disadvantage and resulted in financial loss. The evidence shows that the defendant, Mr. Edison, became a controlling stockholder in the American Company in 1SS9, and, in 1893, its presi¬ dent. On July 1, 1893, according to written agree¬ ment entered into between the American Company and the New York Company, the latter waived its ex¬ clusive rights under the licenses, until July 1, 1893, since which lime the cquipIainalfFconccdcdly has not actively engaged in business. By the termsTf this suspension ' ligcument, so-called, and upon pay¬ ment Of specified royalties, the American Company was authorized to come into complainant’s territory and to exclusively transact thu phonograph busi¬ ness. On May 1, 1891, after the suspension agree¬ ment went into effect, the American Company be¬ came insolvent and a Huceiver was appointed. Its assets, consisted principally of phonograph patents, shares of stock in the Edison Works and the good¬ will of the business. All the property of the insol¬ vent corporation together with contracts for licenses, were sold to Mr. Edison by the Receiver atp il lie s I ] iism t, to tl hi , tl|lt Mi. Edison transferred a portion of his purchase, consisting of patents, shares of stock and good-will to the defendant, National Phonograph Company, which was organized by him, while the interests in the many territorial licenses which bad been granted by the American Company, including those in con¬ troversy, were transferred to a trusted employee named Ott. On February 10, 1899, a few days after the Receiver’s sale, a communication was addressed by complainant to Mr. Edison, requesting that no instruments or supplies be sold or delivered in New ^ °rk, except through the medium of the New York Company. A few days later another letter was mailed and received by Mr. Edison, requesting an interview in behalf of complainant’s committee. Iiol.li communications were ignored. It is practically conceded flint immediately upon the acquisition by t he National Company of the assets of the American Company, in file manner in¬ dicated, it began the sale of phonographs and sup¬ plies in the restricted territory. This fact is also shown by file letters in evidence under (Into of March 10, 180(1, passing between said company and die firm of Walcott, Miller & Company, of New ^ orb. In May, ISOS, the defendant National Com¬ pany opened a store for the sale of phonographs and supplies in the City of New York. Prior thereto, on January 31, ISOS, a committee of the complainant company were appointed, pursuant to resolution adopted by its directors, to confer with the defendant Edison, regarding h is apparent hos¬ tile attitude and his evident disregard for complain¬ ant’s rights under the contract. Thereafter the committee, Mr. Edison anil Mr. Ciilmore, president of the National Company, met to discuss the on- satlcd question. Complainant’s claim to an ex- Jbmive license was assorted witli renewed insist¬ ence. Mr. Edison replied that lie would sell phono¬ graphs to (lie New York Company on the same basis as to other agents, and not otherwise, lie also staled in substance that complainant had better establish its rights by litigation. Further negoti- afmns toward a settlement of existing (inferences were, at Mr. Edison’s request, continued with his counsel, lint with no success. The witnesses for complainant and Mr. Dyer, witness for defendant, and counsel for Mr. Edison are not agreed ns to the exact purport of the negotiations. Mr. Haines, witness for complainant, declares the interviews to have been unsatisfactory and evasive His criti- 1 l'1,nvcl's«tio„s is corroborated by other members of the committee. Upon this point Mr. Dyer testified that the object of the interviews with complainant’s committee and other negotiations l.ad about the same time witli its counsel was not to arrange for the return of the Now York Company to the phonograph business, hut, on the contrary, that complainant desired a settlement which con¬ templated a purchase of its license by defendants. At this time, the phonograph and grnphophonc business was increasing and gave hopeful promise— of financial success. The machines had been im¬ proved by the adoption and use in 1807 of a so- called spring power attachment, invented by the United States Company. The general public be¬ came interested in the amusement features of the instrument and the asserted territorial rights of the complainant increased in value. Much testi¬ mony is found in the record regarding the substitu¬ tion by the National Company of tiie spring motor attachment to the phonograph in place of an elec¬ tric battery. The suggestion that Mr. Edison, prior - to the suspension agreement, designedly withheld his approval of the substitution of the later device is not sustained by the proofs. Complainant’s theory is that the early imperfections of the talking machine could have been obviated by- using the spring power and another form of moulded record; hut the evidence establishes that Mr. Edison doubted the ofliciency of the suggested improve¬ ment. The failure of the American Company or Mr. Edison to supply this improvement, which was not his invention in the earlier period of the ex¬ ploitation of the phonograph certainly does hot establish the claim that any improvements were withhold by him. Nothing further occurred until the bringing of this suit in January, 1001. Neither the American Company nor its successor, the de¬ fendant National Company, gave the thirty days’ notice required by subdivision' 10 of the con tract, which, in effect, declares that if the licensee neg¬ lects or fails to take measures to supply a demand ill liny portion of the licensed territory for phono¬ graphs or phonograph-grnphophones. or appliances therefor, then the licensor may supply the demand through its agents, lint only to the extent of com¬ plainant's default. In explanation of the failure of the National Company and .Mr. Edison to give the specified no¬ tice, it is argued that it was well known that when the National Company came into the Held the com¬ plainant had abandoned its license and was prac¬ tically nimble to carry out the provisions of- the contract, not only on account of its evident reluct¬ ance to re-enter the field of operations, hut hoenuso -o.r_ils. insolvency. The testimony, however, is to a dill'erent ell’eet. The witnesses Fahnestock and Lewis testified that had the New York Company received the notice mentioned it would gladly have met the demand for machines, as it was desirous of Increasing its business. During the entire period _of lime mentioned scveniPofTices were and still are maintained by complainant in the City of New York and at Tarrytown, N. Y. Annual elections of officers have been regularly held and the Hoard of Directors have met for the transaction of busi¬ ness frequently since 1S!)5. Other evidence is found in tlio record which will he mentioned herein when pertinent. Complainant insists that when the de¬ fendant Edison bought the assets of the North American Company lie did so with full knowledge of tlie facts, and, moreover, when the National Com- 1,1,11 11111 gnn 11 hn , i | I lie assets of the American Company, it also had full knowledge of the pre-existing contractual re¬ lations, ,. c, that the complainant was the exclusive licensee for the entire State of Now York for the period of time stated in the contract. Hence, ac- coiding to the decisions, the stipulations and con¬ ditions between the American Company and the complainant were binding upon it, 1932 In New England Phono. Co. v. Edison ct al., supra, Judge Gray, on the assumption that the bill correctly set out the contract, decided : “That the said contract contained an im¬ plied negative covenant; not to sell or deal in the articles or matters in regard to which the said exclusive right was granted, and that thu defendant Thomas A. Edison owned and controlled the defendant companies, and that lie and they succeeded to the rights and re¬ sponsibilities or the North American Phono¬ graph Company in regard to the contract iu question.” When the hill in suit was considered on demurrer by Judge Wheeler, who had before him the licenses, he, assuming the truth of the allegations of the bill, stated in effect that one who knowingly in pursu¬ ance of a scheme independently sells and uses phonographs and supplies in violation of a com- plainant’s contract rights, such salable articles com¬ ing from the same source, unjustifiably invades the legal rights of the complainant. The principle ap¬ pears to be well settled that where there is an ex- elusive right and such right is wrongfully invaded or violated by one having knowledge of the contrac¬ tual relations, a court of equity may be invoked to redress the breach of covenant. Appollinaris Co. o. Scherer, 27 Fed. Rep., IS; Standard Fashion Co. v. Siegel-Cooper Co., 30 App. Div., 5(1-1. In the Whitson case, supra, the Circuit Court of Appeals for the District of Columbia, having a similar license before it, said: “Any person, natural or artificial, into whose hands, after the execution of the con¬ tract between the North American Co. and the Columbia Co., the control of the Edison patents came, with knowledge or notice, actual or constructive, of tlie existence of sueli contract, and of tlie rights of the Co¬ lumbia, must lie assumed to Imve taken sub¬ ject to such rights, and to lie disijualilled from infringing in an.v manner the exclusive license given io the Columbia Co. If this were not so, it is ver.v plain (lint rights granted under a patent might lie destroyed with impunity against the will of tlie owner of the rights by the mere transfer of the patent.” As already indicated, tlie doctrine is well estab¬ lished that a license follows tlie assets of the li¬ censor into the possession of him who buys with his eyes open to the pre-existing contractual relations and existing equities. The assets of complainant’s licensor in no sense innocently came to Mr. Edison or his assignee, nor were they freed from the obli¬ gations created by the contracts of license. The transfer to Ott of the interest of the American Colin" Puny in the licenses cannot be considered in any oilier light than an ill-advised attempt to evade contractual liability. Whether it was (lie inten¬ tion of (lie transferor to dissolve the American Com¬ pany, and make room fora successor, is not thought to lie material. The assets were hid in and pur¬ chased “As a going concern,” and (lie receiver turned the remaining business over to the purchas¬ ing company, lining in possession, therefore, of all tlie facts and having succeeded to tlie rights of Hie American Company, tlie National Company lias, nevertheless, unwarrantably invaded (lie licensed territory of tlie complainant. That the contrac¬ tual rights of the New York Company have been obstructed and interfered with, in tlie manner indi¬ cated, cannot lie seriously controverted. Tlie defenses principally relied on challenge com¬ plainant’s right to enforce its exclusive license on 1931 account of its unexplained laches and denies that an extension of license was acquired under the pro¬ visions of tlie contract. fbe question of laches will be first considered. J-ho principal circumstances of eaeli enso must gov¬ ern the application of the rule. It is true that im- mediately after the receiver's sale of the assets of Co,,,P,u»' ,-t bec<‘»>° apparent that Mr. Edison did not regard that complainant’s license survived the dissolution of tlie American Company. His declarations to complainant's com¬ mittee, as already observed, were in effect an unal¬ terable repudiation of the asserted claims to a sub- sinting license. There was no room for misunder¬ standing. Under tlie circumstances of this case what was complainant’s remedy ami when should it have been brought to the attention of a proper tiibunal Thu circumstances undoubtedly de¬ manded that tlie limit of time be measured in which to seek relief. Upon this point defendants vigor- '■? tWrttliutcon.pl t s c g t of the invasion of its territory by the National Com¬ pany from the beginning; and that, asuming tlie paramount rights of the complainant, Mr. Edison’s refusal to recognize such rights should have admon- lied the compl l t s o bly question the interference by immediately commencing suit to establish its rights. These propositions are un¬ enable. According to one of complainant’s wit¬ nesses, no action was earlier instituted on account of lack of funds. The facts and circumstances are not convincing that the complainant lias slumbered on its rights. The maxim that “tlie laws serve the vigilant and not those who sleep” has application only where the party is silent and permits an inter¬ ference with his alleged rights without adequately and seasonably protecting them. This litigation was instituted within five years after the incorpora¬ tion of the defendant National Company, and with- 1030 in less tlmn three years from the tcrmiimtion of fruitless negotiations to settle existing differences. It already appears that the actual invasion by tile defendant National Company of complainant's ter¬ ritory by opening therein a place of business was in .May, ISOS. Nothing is shown from which it may be justly concluded tlmt the National Company or its eo-defeadants believed that complainant ac¬ quiesced in such intrusion, or tlmt there was an abandonment of or an intent lo abandon its asserted rights in the license. The contrary appears. The doctrine of ladies, as expounded in tile following cases, is thought to apply : Bradford e. Belknap, 105 Fed. Bep., 03; Ide i. Carpet Co., 115 / ; then that this agree¬ ment shall become and shall confer upon and shall fully and entirely vest in the party of the second part an extension of the rights granted to and conferred upon the party of the second part by said agreement of Febru¬ ary Oth, 1880, and the subsequent assign- ment to it for a further period and until the 20th day of March, 1003, and for such further t.mo at the option of the party of the second part as the party of the first part may bo authoi i/ed to extend such license; subject, however, to the covenants and agreements of said agreement of February (ith, 1SS9 as and entirely as if aid agreement had been in the first instance made to cover the period of the extension granted hereby, as well as the period originally thereby fixed and limited.” Oil October 3, ISM, siibscf|iient to the delivery to the .1 rust company of the stock certificates and said extension licenses, the complainant, by its executive commitco notified the trust company not to deliver the stock certificates deposited as agreed under both contracts “pending the settlement of certain claims of this company against said stock.” A similar lio- tieo in "riting was given to the stock transfer agents not to make the transfers of such capital stock standing in the name of said Central Trust Company, Trustee, until further notification. Later on June 20, 1902, after the commencement of this censes were deliveml lo eompliiiniinl. Another notice, however, was given to the depositary lo with¬ hold the certificates of sleek on account of a claim against, the receiver of the American company. The ■shares of stock were never demanded hy .Mr. In twin- ttTri. now contends t li'n't the context of the provisions relatinfc to the extension plainly show a license for t wo terms, namely, one for live years and the other for ten; that the amount, of money paid, via: §1 (){),- 000 h.v the .Metropolitan Company, and $125,000 hy the New York Company, was for the first term, while for the second, the consideration was t he nnmhcr of shares of capital stock deposited wit It the Trust Company, ami, lienee, when the depositary was notified not to deliver the capital stock there was in legal elVect a rescission of the contract. This interesting problem is dillicnlt of solution. In pursuance of the intention of the parties, plainly, apparent from the context of the contracts, it is thought Unit tiie agreements for extensions of license were completed contracts and not, dependent upon il fut, lire occurrence or cent ingeney. Tlui Cen¬ tral Trust Company, without furl her direction from either of the parties, was authorized and empow¬ ered to deliver the possession of the stock and the agreements as therein expressly provided. It. re¬ ceived the stock without, any accompanying reserva¬ tions or limitations, and, therefore, it was not an escrow dependent; upon the performance of future conditions. The subsequent notice to the deposi¬ tary not to make delivery or the stock could not tffect Hie contract rights as the delivery of the stock was not essential to its elfectiveness. The ownership of the shares of stock had passed from complainant to another. There was a constructive tlKUi.tlu ncM!r vested duDosil nrn ’| luislc‘c, or his successors. Oil deposit of the shares of stock, the complainant was unquestionably, at the termination of the original cMim of «*o documents shall not l r ‘ IU I>n,VISH fldit tiie rights c vl im.' 0,‘ l,W!,,m0 mtCl1 «»>«» tl>° htive I en c, i 'V 1,e,,roi,mttl is ,lot Uionght to ,• J.1i:lH "f lllL‘ “vicinal license. The contract is not separable or divisible in tl c sc sc TuTUT- money paid was in consideration of the first Item nml the delivery of the capital stock for the second, moreover, the transaction could not he recalled 1L‘ mT11!' 0f 1,,tere8tcd P^'lies, and lh . I ' ■ , L‘ of rtock hl t!l“ oianner in¬ dicated in tiie agreement was not revocable by the complainant. But it is suggested that the embar¬ go on the stock prevented the depositary from male !!'« "lt! 'I'sPositlon intended by the solemn act of the parties and that consequently tiie owner was deprived of the use of his property and hindered in its control. This proposition ignores the rule that any direction to a depositary hy a party to a com¬ pleted contract in contradiction of or inconsistent with the agreement under which the deposit was made, is imperative. Stanton v. Miller, 5S N. Y m s„ that, irrespective of whether tiie Central I rust Company could lawfully deliver the stock to the American Company or its receiver, or whether such depositary was restricted in its delivery to the actual person or persons mentioned in the con¬ tracts, the notice of cancellation was entirely inde- ctUA.ttLL'LCi _ 10-11 pendent of (lie contract and could not legally affect tlio disposition or delivery of 1.1m stock, as previ¬ ously agreed between the parlies. As stated in complainant's brief: \ \ “The assertion by the New York Phono¬ graph Company, of die existence of a valid claim against said stock in its favor, arising for all that appears independent of the con¬ tract under which the certificates were depos¬ ited and subsei|uent to the lime when it be¬ came abseolutely entitled to the physical pos¬ session of (lie agreements ‘Extending Li¬ censes’ and by its consideration of what rights, if any, were acquired by the National Phonograph Company, and Oil:, to the said stock have really no bearing upon the con¬ tract rights of the complainant." I agree that, the ‘stop notice’ was entirely outside of the provisions of the contract, and, therefore, could not have served the purpose intended. The reasons for deferring the delivery of the stock until after the expiration of the original term is not ma¬ terial. Furthermore, the proofs show that all the parties have heretofore treated the contract as an extension or (lie original term. Indeed, the ex¬ clusive rights of (lie complainant were recognized in an action brought against tlieTecmvmn'qTeco'ver :s sold (Hiring his flucl L. ^ . CL-i/ Mt / , i f/"’, ociler'iif the court for sales of phonograpi P~ the expiration of the original term of the * > Had there been no extension of the liccnsi ItTlnTid^iTirsiiant to (lie nplis after license, the license under V t>, 1881), (lie same would have r (i, 1SD-J, prior to the appoint- The language of the agreement :fc of Febr expired on Febn meat of a receive is as follows: “The rights granted by (lie original con¬ tract shall remain in force and this agree¬ ment shall continue until the Otii day of Feb- helei^ rf01’ llI,<1 f°1, 8UCh itod « ho einafter provided, unless sooner termi- hated as hereinafter provided.” This brings me to a consideration of the next point, namely, whether the licenses herein were ex- tended beyond the second term. As has been ob- Zm r r °WsillnI Nmr Y°Vk Goi“Pany license was n 1 1-obr.iary bth, 189-t (the Metropolitan Com- m,J I’c“nB0 expiring earlier), and later, ns lias been stilted, both licenses were extended until Minch ~(>, 1903. The original and extension li- censes, after sotting forth the conditions of tiie sec¬ ond term, contained this provision: “Such further time, at the option of the party of tile second part, as the party of the hrst part may bo authorized to extend said license.” Complainant insists tl.at the limited period spe- citied, namely, March 2lllilm,lt 1 'L IMMLl KS1 ctfully This is a suit in equity No. 7719 now pending, in this court. This suit was begun by the tiling of a bill of complaint on January 23, 1901. Thereafter defendant, National Phonograph Company, having been served with process of subpiunu ad respon¬ dendum interposed a demurrer and a plea to the hi” of complaint, which demurrer and plea, were successfully over-ruled. Thereupon and beginning on December 1, 1902, testimony was taken in this cause. By reason of the great obstacles interposed hy defendant, National Phonograph Company, com* pluinnnt was unable to complete its prim a [uciQ winu until October 21, 1903. Defendant began the taking of its testimony on Oelol.ee 2!), 1903, ami continual! (lie taking of testimony until April 5, 1D0J. Thereupon on April (i, 7, S ami 12 complain- oaf’s testimony in rebuttal was taken ami in ac¬ cordance With the ruling previously made on com¬ plainants motion by his Honor, .fudge Lucomhe, fins cause was placed upon (lie equity calendar of this court for (lie April term at one of its later ses¬ sions and finally came on to he heard upon the com¬ plaint, answer, replication and evidence taken as aforesaid, before his Honor, Judge Hazel, on May 111, 11)01. The argument occupied (lie days of May 31, June 1, 2 and 3, 1001. Defendant’s counsel af¬ ter repeated rcipiesls by complainant's counsel served on .May 21, 1001, one unbound copy of de¬ fendant’s exhibits, and on .May 23, 1001, served three hound copies of defendant’s exhibits. Uy ren- son of the late dale on which defendant’s exhibits were served, complainant’s counsel were unable to prepare and complete their briefs, and so stated to the court when the cause came on for hearing May 31, 1001. Deeau.se complainant’s counsel had for the reasons aforesaid been unable to prepare and have printed their briefs, defendant’s counsel with¬ held from complainant's counsel copies and inspec¬ tion of the brief of 220 pages which they had pre¬ pared anil which they presented to the court at tlie opening of the argument. Complainant’s coun¬ sel received no copy whatever of defendant’s briefs until seven days after the close of the argument, to "it, June 10, 1901. when all the papers were handed in to the court. Complainant, is informed and believes that among the pa pern handed in to tin: court by defendant's counsel on June 10, loot, were certain papers which complainant’s counsel never saw and have never seen, and of which no copies have ever been famished to complainant’s 1918 ounsel and especially complainant believes that certified copies of orders discontinuing two suits brought by the Columbia PI Bi 1 1 c pn against tins defendant, National Phonograph Com- pany, m the District of Maryland and the District o Columbia, were handed in to the court and com- plaiinint alleges upon information and belief that Ddimi" Pelzer of counsel for defendants refused to comply with the reipiest of Louis Hicks of coun¬ sel for complainant to furnish complainant's coun¬ sel with copies of such orders, and no copies of such onus " ei e ever furnished by defendant’s counsel o complainant's counsel, nor do the briefs of de¬ fendant’s counsel set forth copies thereof. On January 5, 1905, his Honor, Judge Hazel handed down an opinion in this cause at the close or which the following statements are to bo found: The language of the agreement is as follows: “The rights granted by the original coil- tract shall remain in force and this agree¬ ment shall continue until the Uth day of Feb¬ ruary, 1891, and for such further period as hereinafter provided, unless sooner termin¬ ated as hereinafter provided” This brings me to a consideration of the next point, namely, whether the licenses herein were extended beyond the second term. As has been observed, tile original New York Com¬ pany license was until February (i, 1891 (the .Metropolitan Company license expiring earlier), and later, as has been stated both licenses were extended until March 2r I hem was in full force and elVed snlixomient to March 2(i, 1UII3. ttefore referring to (lie record, and dealing for Ihe time being soiel.v with llie truth of the matter and with facts well known to defendant, and its counsel h,v reason of which defendant’s counsel never contended or ever suggested throughout, the entire course or this expensive litigation that, com¬ plainant laid not exercised the upturn clauses of the said contracts, it appears from documents in writ¬ ing and in (lie possession of defendant, and presum¬ ably in the possession of defendant’s counsel that complainant on the 2(llh day of .March, 1<)03, gave written notice to ail whom it, might concern and to IJionms A. Edison, The Edison Phonograph Works, The Edison Phonograph Company and the National 1 lionograph Company not only that it had thereto- fore exercised the said option clauses of the said contracts hat that it thereby formally exercised the said options. On the 2(lth day of March, 1003, New Pork Phonograph Company through its ollieers i.iul « "HUM 1 ind under the seal of the company wrote the following letter: "'h,,m il l,m-V concern, and Thomas A. Edison, 1 be Edison Phonograph Works, The Edison Phono- Ki’apli Company, tl.e National Phonograph Com¬ pany, and John F. Ott: ’ Take notice, that New York Phonograph Com- an.i hereby exercises, and lias heretofore exercised, (be options given to Metropolitan Phonograph Com- ennh.,!"!'1 V'? Yol'k 1’lllmorT|’aph Com puny, by con tiacts dated Octolier 12, 1888, and February (i, 1SS!) respectively, l.elween said Companies Imd s Lami n' ™" ('0ln Pany, and subsupientiy acquired by New York Phonograph Company, with the consent of the North American 1 lionograph Company, and that the rights of New York Phonograph Company under said contracts are extended, by ( lie exercise of said options and for such further time ns the North American Phono¬ graph Company, and its successors or assigns, be- U....L-, hi may become, authorized to extend the Take notice further, that the said extended rights of New York Phonograph Company include the sole and exclusive right to sell and to use, within tiie State of New York, phonographs mid supplies there¬ for made under, or in accordance with, the inven¬ tions patented and unpatented. of Thomas A. Edi¬ son and others, according to said contracts, and that all persons infringing or trespassing upon the said solo mid exclusive rights of New York Phono¬ graph Company will be prosecuted according to law. Dated New York, March 20, 1003. New Yoijk Piioxoniufti Company, By II. M. Funston, Vice-President. Attest: James L. Aniiem, Secretary. [Seal. — New York Phonograph Company.] B. K. Camp mid Louts Hicks, Attorneys, for N. Y. Phono. Company. On the same date James L. Andeni acting as at¬ torney in fact for New York Phonograph Company and for other phonograph companies wrote the fol¬ lowing letter: To whom it may concern, and to Thomas A'. Edi¬ son, The Edison Phonograph Company, The Edison Phonograph Works, The National Phonograph Company, and John F. Ott: Take notice, that each of the several Phonograph Onmrmiiies. the names of winch are siarned below. 1053 lms heretofore exorcised, and hereby exercises, the option ('milled to it to extend the rights grunted to it b,y The North American Phonograph Company. Take notice further, that the sole and exclusive rights of each of the said Phonograph Companies, in their respective territories, are extended, as aforesaid, by such farther term as Thu North American Phonograph Company, its successors and assigns, became, or may become, authorized to ex¬ tend the same, and that all persons trespassing or infringing thereon will be prosecuted according to Dated March 20, 1003. Nbw Youk Piioxikiiiai-ii Company, by James L. Andb.m, Attorney. New ExotAN'i) PnoNooiiAPii Company, by James L. Andb.m, Attorney. Wisconsin Piionoouapii Company, by James L. Andb.m, Attorney. Minnesota Piionooiiapii Company, % J-tMus L. Andb.m, Attorney. The State Piionooiiapii Company op Jemnoib, >'.V James L. Andb.m, Attorney. Missouni PnoNooiLVPii Company, by James L. Andb.m, Attorney. Ohio Piionooiiapii Company,' by James L. Andb.m, Attorney. D. K. Camp find Louis Hicks, Of Counsel for the Companies above named. Kansas Piionooiiapii Company, by James L. Andb.m, Attorney. Kentucky Piionooiiapii Company, by James L. Andb.m, Attorney. The first letter mentioned was signed by the pres¬ ent and then Secretary of New York Phonograph Company, James L. Ande.n, who also a (fixed to the said letter the corporate seal of New York Phono¬ graph Company, and the said letter was also signed by the present and then Vice .President of New York Phonograph Company, H. At. Funstou. Four copies of each of said two letters were prepared, signed and executed as aforesaid. One copy of eacli of said two letters signed and executed as aforesaid remains in the possession of complainant On the 2(!tli day or March, 1!)03, said Janies L. Andem en¬ closed one copy of each of said two letters in a sealed envelope directed to Thomas A. Edison, Orange, New Jersey; and one copy of each of said two leLters in a sealed envelope directed to The Na¬ tional Phonograph Company, Orange, New Jersey; and one copy of each of said two letters in a sealed envelope directed to John F. Ott, Orange, New Jersey; and having done so said Janies L. Andem tools the said three envelopes addressed as afore¬ said, with the said letters enclosed therein to the post-ollice of the United States, in the City and County of New York, and having paid the postage upon each of said envelopes with the letters therein contained, delivered them to the Registry Division of the said post-ollice to he sent as registered mail, and received three receipts consecutively numbered from the Post Office upon the delivery aforesaid of the said envelopes containing the said letters. The said receipts read as follows: Registered Letter No. 07232, P. O. New York, N. Y. Received Mar. 20, 1903, of H. M. Funstou, 110 Nassau, a letter adressed to John F. Ott, Orange, N. J. Postmaster, per Q. Received Mar. 20, 1903, of H. M. Funston, 110 Nassau, a letter addressed to the National Phono. Co., Orange, N. J. Postmaster, per Q. Registered Letter No. SJ71KM, 1*. 0., Now York, N. Y. Received Mnr. 2(1, I!K)3, of ii lolior addressed to 'riionms A. Kdison, Orange, N. J. i’ost master, per (J. Said .Tames I.. Amlem fearing that, mail sent in the name of New York Phonograph Coinpan.y or in his own name would not, he received li.v the ad¬ dressees above named, mailed the said three en¬ velopes containing the. said letters in the name of IT. II. Funslon, (lie Vice President of ( lie New York Phonograph Company, giving .Mr. Funslon’s ad¬ dress ns l it) Nassau street which then was and still is the ollicoof the NeW York Phonograph Company. Subso<|uently and on March 27, 28, 11)02, said il. M. Fnnslon received at the olllce of (lie New York Phonograph at MO Nassau Street, through the mail, tlie following registered return receipts: REGISTRY RETURN RECEIPT, Form No. 1518. Received from the Postmaster at Orange, N. J. (Delivering Olllce.) (Letter) Registered (parcel) No. 07232 From Post Ollicc at New York, N. Y. Addressed to J. F. 01 1 (Name of addressee.) Date Mar. 27, 1003 (Date of delivery.) |! j|| 'When delivery is made \ J. F. Ott. j| a registered article must not be delivered to anyone but the addressee, except upon addresee’s written order. When the above receipt lias been properly signed, it must lie postmarked witli name of delivering olllce and actual date of delivery and mailed to its address, without envelope or postage. REGISTRY RETURN RECEIPT, Form No. 1518. Received front the Postmaster at Orange, N. J. (Delivering Olllce.) (Letter) Registered ( |wwl-) No. 07233 From Post Olllce at New York, N. Y. Addressed to National Phonograph Co. (Name of addressee.) Date 3/2S, 1003 (Date of delivery.) When delivery is made \ National Phono. Co. to an agent of the ad- ) (Signature or name of dressee, both ad- 1 addressee.) dressee’s n a m e and / J. R. Schcrmcrhorn. agent’s signature must l (Signature of Ad- appear in this receipt, j dressee’s agent.) A registered article must not be delivered to anyone but the addressee, except upon addresce’s written order. When the above receipt lias been properly signed, it must he postmarked witli name of delivering ollice and actual date of delivery and mailed to its address, without envelope or postage. REGISTRY RETURN RECEIPT, Received from the Postmaster at Orange, N. J. (Delivering Cilice.) (Rutter) Registered (fftwrf) No. 1)732 From Post Cilice at New York, N. Y. Addressed to Thomas A. Edison (Name of addressee.) Date Mar. 281 li, 1903. (Dale of delivery.) "’lien delivery is made \ Thomas A. Edison, to an agent of the ad- ) (Signature or name of dressee, both ad- ( addressee.) dressee’s name and / A. D. Caskey, agent’s signature must \ (Signature of Ad- A registered article must not lie delivered to anyone hut (lie addressee, except upon addresee’s written order. When (lie above receipt lias been properly signed, it must he postmarked . . mine or delivering ollice and actual date of delivery and mailed to its address, without envelope or postage. J. R. Schermorhorn who signed the above regis¬ try return receipt on behalf of National Phono¬ graph Company testified as a witness on behalf of defendant herein, stating that lie was Ass’t. Gen¬ eral Manager of the Edison Phonograph Works and of the National Phonograph Compilin' on -March 11, 11)0-1, and had been such since 1S!)S. The sending and the receipt of the foregoing 1058 fondant or its counsel to the contrary. Further¬ more as appears from the Minutes of the Executive Committee of New York Phonograph Company, and as is the fact on March 25, 1.003, the following action was taken. Enw Yohk, March 25, 1003. At a meeting of the Executive Commitcc ■'eld this day at No. 2 Wall Street, New York the Secretary was instructed to have letters prepared and signed by the proper ollicers of the Company, under seal, ad¬ dressed to Thomas A. Edison, The Edison Phonograph Works. The Edison Phono¬ graph Company, The National Phonograph Company, and Frederick P. Ott, notifying them that this Company exercises the option given to the Metropolitan Phonograph Com¬ pany and Thu New York Phonograph Com¬ pany by contracts dated October 12, 1SSS, and February 0, 1SSI), subsequently ac¬ quired by this Company, of extending its sole and exclusive right to sell and to use, within the State of New York, phonographs and supplies therefor, for such further time as the North American Phonograph Com¬ pany, and its successors or assigns become, or may become, authorized to extend the At the next meeting of the Board of Trustees of New York Phonograph Company held after said meeting of the Executive Committee, March 25, 1903, and after the sending of said letters on March 20, 1903, said meeting of the Board of Trustees having been held on April 15, 1903, the following proceedings were had : NlJW loitK, April 15, 1903. The regular monthly liuJetTug of the Hoard of Trustees was held, pnrsimut, to noiieo, at the oil lee of the Treasurer, No. 2 Wall Street, at. i) o'clock r. m. Hreseut: Messrs. Ilaiues, lxjwis, Fahne¬ stock, Fnnston and Andoui. The minutes of the last, meeting were read and approved. The Secretary stated that in aeeordanec with inst met ions received from the Execu¬ tive Committee, letters had been sent to Thomas A. Edison, The Edison Phonograph Works, The Edison Phonograph Company, The National Phonograph Company, and John E. Oil, notifying them of (lie exercise of the option given this Company to ex tend its exclusive rights under its contracts with tiie North American Phonograph Com¬ pany. Thu following is a copy of the letter sent to the above-named parties: “To whom it. may concern and Thomas A. Edison, The Edison Phonograph Works, The Edison Phonograph Company, Thu Na¬ tional J I o„ 1 1 ( ] ad John F. Ott: “Take notice, that New York Phono¬ graph Company hereby exercises, and has heretofore exercised, the options given to Metropolitan Phonograph Company and The New York Phonograph Company, by contracts dated October .12, ISSti, and Feb¬ ruary (i, 1S8!), respectively, between said companies and The North American Phono¬ graph Company, and subsequently acquired by New York Phonograph Company with the consent of The North American Phono¬ graph Company, and that tiie rights of New 1900 York Phonograph Company under said con¬ tracts are extended, by tiie exercise of said options, and for such further time ns The North American Phonograph Company, and its successors or assigns became, or may be¬ come, authorized to extend the same. “Take notice further, that tiie said ex¬ tended rights of New York Phonograph Company include the sole and exclusive rigid, to sell and to use, within tiie State of New York, phonographs and supplies there¬ for made under, or in accordance with, tiie inventions patented and unpatented, of Thomas A. Edison and others, according to said contracts, and that all persons infring- ing or trespassing upon the said sole and ex¬ clusive rights of New York Phonograph Company will be prosecuted according to law. “Dated New York, March 20, 1903. “Nnw Yohk Puonouuaph Company, by [Sgd.] If. M. Funston, Vice President. “Attest: “Jamks h. Aniikm, Secretary. “E. K. Camp and Louis IIicks, [Sisal.] “Ally’s, for New York Phonograph Co.” The following resolution was submitted and unanimously adopted: Kcsolved, That tiie notification sent to Thomas A. Edison, Tiie Edison Phonograph Works, The Edison Phonograph Company, The National Phonograph Company, and John F. Ott, under date of March 20, 1903, signed by the oflicers of this Company by authority of tiie Executive Committee, exer- rising the option given this Company to ex¬ tend its sole mul exclusive right to sell and use, within the Slate of New York, phono¬ graphs and supplies therefor, under its con¬ tracts of October 12, 1 SSS, and February 0, 188!), copy of winch lias been submitted and read, is hereby ratified and confirmed. Mr. Fnnston offered the following resolu¬ tion. which was naanimouslv adopted : ltesolved, That a Commit tee of three mem¬ bers of this Hoard, Messrs. Unifies, Lewis and Fahnestock, lie appointed for the pur¬ pose of conferring with counsel and ascer¬ taining tilt; present status of the Company’s suits against llie Edison Companies, and whether it is expected that application for an injunction will lie made before the ad¬ journment of the present term of court. That said committee lie reipiested to make report thereon at a special meeting of this Hoard to lie held on Thursday, the 23d inst., at 3 o’clock i\ xi. A letter was read from one of the counsel of the Company enclosing copy of a pro¬ posed contract to be made before Hie ad¬ journment of the present term of court. That said committee be rei]ucsled to make report thereon at a special meeting of this Hoard to lie held on Thursday, the 23rd inst,, at 3 o’clock i\ xi. A letter was read from one of the counsel of tlie Company enclosing copy of a pro¬ posed contract to lie made with Thu Leeds & Call in Company, to manufacture for New York Phonograph Company cylindrical 1 1 111 1111 1 records, including duplicate cylindrical, molded, sound records; which proposed con- 1002 tract was read, considered and referred to the special committee appointed at this meeting, for its consideration and report. since'lh!'1'; '■‘I1' °f U,e ,,mUer is established and since the decision rendered by his Honor, Judge Hazel upon this point is not in accordance with " lm,t Ims b<*n in Hie case and is not in ac- New ' Yort " p!‘ ^ ^ th° Ilottra of Tn,steus of Auv York Ho. a ji c pnny on January 18, 1 11 5 S,J adopted the following resolu’ “N he. can, the decision rendered by Judge Hazel, January 5, 1005, in Hie case of the Now York Phonograph Company vs. the National Phonograph Company and others it is stated that there is no evidence showing that the New York Company ever exercised its option continuing its exclusive license after March 20, .1003, and Whereas, the minute books of the Board of Trustees of the Company, and copies of letters sent to the National Phonograph Company and others show that the Com- p.mj did exercise its option extending its exclusive license; therefore ltesolved, That the counsel of the com¬ pany be requested to take the necessary steps to bring this matter to the attention of the court, as speedily as possible, in or¬ der to obtain a modification of the decision and to secure the injunction asked for in our hill of complaint; and that the treasurer of tlm company communicate with counsel to this end.” Your petitioner, New York Phonograph Com- pany, furthermore calls the attention of the court to the following points and evidence already 1903 ill (lie record of the cause. On January 23, 1901, Hie hill of complaint was filed, alleging (hat (lie rights granted had been granted until (lie 201 h da.v of .March, 1903, and for such further time at the option of the complainant as should lie equal to (lie time for whiclic the North American Phonograph Company might lie authorized to grant the same (fols. 14, 22) and praying not only a preliminary injunc¬ tion, hut also a perpetual injunction, restraining defendants from violating liie provisions and rights of complainant under the contracts in question. Thu suit was vigorously prosecuted as the record shows, from the time of tiling the bill of com¬ plaint on January 23, 1901, until it was argued at final hearing on June, 1904. During all this time defendants were invading complainant’s rights, nml during all this time complainant was prosecuting this suit in a court of equity asking for injunctive relief. There was no way in which complainant could exercise this option except by the prosecution of this suit to compel the defendants to recognize these rights under (lie contracts. The prosecution of tins sit 1 1 was a noire solemn act and a more af- llrinatire acFtlntii was i'lie sending' of the letters above set forth. Comphiinant7m?Tho record shows, could not exercise this option by purchasing phono¬ graphs and supplies from these defendants, because (lie evidence shows Unit these defendants defied complainant's contract rights, invaded complain¬ ant's territory and even refused to fill or recognize orders sent for phonographs and supplies (C. H. Haines, fobs. 103S to 1042). Inasmuch ns the de¬ fendants had repudiated every obligation owing from them to complainant under, the contracts and in relation to the subject matter thereof, there was hut one resource open to complainant, and that was to invoke the aid of a court of equity, and by. so doing, aud by tile prosecution of this suit from January, 1901, until the present day, complainant has exercised in the most solemn and positive man- "or the option and all the rights derived from the contracts in question. Not only does the record of the suit show this hut it siiows nlso that notwitli- stniiding the invasion of complainant’s territory by defendants, and the repudiation of complainant’s riglits by defendants, complainant, on Hay 7, 1903 entered into a contract, with the Leeds & Gatlin Company for the manufacture of Edison records (Deft.’s Record Fahnestock, fols. 150 to 154). This was tlio exercise by complainant during the period immediately subsequent to March 20, 1903, of its manufacturing rights granted by the contracts in question in case the North American Phonograph Company or its successors refused or neglected to supply complainant with phonographs and sup¬ plies (Com.’s Exh. fols. 720 & 819). The record furthermore shows that as soon as complainant en¬ deavored to exercise this option and this right to manufacture by the contract of May 7, 1903, with the Leeds & Catlin Company, this defendant, Na¬ tional Phonograph Company, immediately brought four suits against the Leeds & Catlin Company upon Edison patents, the rights under which, for the State of New York, belonged to complainant, in order to prevent complainant and the Leeds & Cntlin Company from exercising complainant’s op¬ tion and rights (Deft.’s Record Fahnestock, fols. 714 to 720). As above stated in this petition the defendants themselves, subsequent to March 26, 1903, solemnly asserted in litigation based upon the contracts whereby complainant derived its rights, and brought in the interest of and on behalf of these defendants, that complainant had exercised the said option clauses of the contracts of October 12, 1888, and February 0, 1889, and that complainant’s rights 19CS under the said contracts were in full force and ef¬ fect subsequent to March 20, 1003, and would con¬ tinue in full force and effect until the expiration of the patents under which the exclusive license to use and vend the inventions, had been granted. The litigation referred to is the suit brought in this court b.v John IS. Helm on behalf of these defend¬ ants ngaiust the American tiraphophoue Company, Columbia Phonograph Company General and New York Phonograph Company. Defendant intro¬ duced in evidence the answers of the American Graphophone Company and Columbia Phonograph Company General and of New York Phonograph Company (Deft.’s ISxli., pp. 577 to 509). The nature of the suit is fully disclosed from the said two answers and the testimony herein; and this court will, if necessary, take judicial notice of a bill of complaint in the suit which is tiled on record in the office of the clerk of this Court. The answers having been introduced in evi¬ dence by defendant are available to complainant for all purposes. It conclusively appears from the allegations of the said answers that Helm brought his said suit and filed his said bill of complaint “at the sole expense of, and for the sole benefit of Thomas A. Edison, Edison Phonograph Company, Edison Phonograph Works, National Phonograph Company and Howard W. Hayes” (Deft’s Exh., p. 578) ; and that said Helm brought the said suit “in the interest of Mr. Edison and his said three com¬ panies (Edison Phonograph Company, Edison Phonograph Works and National Phonograph Company) and under the direction of their said counsel, Howard W. Hayes, Esq.” (Deft’s Exh. 507, 590.) It further appears from the testimony of defendant’s witness Fahnestock that when testi¬ mony began to be taken on behalf of I lie complain¬ ant, Helm, in that suit, Howard W. Hayes, counsel for National Phonograph Company in this suit, ap¬ peared for Helm in said suit and conducted the ex¬ amination of witnesses (Deft’s Record, Fahnestock x-Q. 282, fol. 2-iC) ; and that Helm was an associate of Howard W. Hayes uud acted on behalf of these defendants in numerous proceedings growing out of this litigation (Doft.’s Record, Fahnestock, fols. 257 to 2G0). Mr. Camp, being called as a witness for defendant, also testified, explaining that “the Helm suit was, therefore, a suit in reality between the Edison interests and Graphophone interests (Deft.’s Record, Camp, fols. 1124, 1221 to 1224). It is not necessary further to refer to the record to show that the Helm suit was brought on behalf of these defendants, including the National Phono¬ graph Company. The fact is established beyond dispute by the evidence introduced by defendant, National Phonograph Company, itself. It appears from the record that the Helm suit was brought in April, 1903. The bill of complaint was verified April 2, 1903, was filed April 3, 1903, and subpoena ad respoudendum was served upon New York Phonograph Company on April 6, 1903 (Deft.’s Exh., pp. 595-596, bill of complaint filed of record in this court) . The purpose of the Helm suit was to enable these defendants through a stockholder of New York Phonograph Company to attack the American Graphophone Company upon the basis of rights which Now York Phonograph Company laid acquired under its contracts of October 12, 18S8, and February 0, 1SS9, and the extensions thereof. The mere fact that the suit was began in April, 1905, and subsequent to March 20, 1903, upon a bill of complaint filed on the equity side of the Court and asking l'or a perpetual injunction as well as for a preliminary injunction was an assertion by these defendants that the contract rights of com¬ plainant were then in force, and that the option 1667 clnuses of the contracts lmd been fully exercised. But the bill of complaint specifically alleged that tlie rights which Hew York Phonograph Company had »c(| wired under the said contracts contained "during the life of the said patents” (Bill of Com¬ plaint, paragraph 13, uud Deft.’s Exh., pp. 577 to 59(1). It is true that the Helm suit related to graphophoue patents, but the rights to the grapho- Phone patents were derived and were alleged to be derived and could only have been derived through the contracts of October 12, 1888, and February 0, 1889, and the extensions thereof between Hew York Phonograph Company and the North American Phonograph Company. The situation then was this: Thomns A. Edison and his three companies, the defendants in this suit, and the successors of the North American Phonograph Company, tiled their bill or complaint in the name of Helm, April, 1903, and subsequent to March 20, 1963, asserting that the contract rights of complainant were (lien in full force aud etl'ect and requesting this court of equity to enforce such rights against their com¬ petitor, the graphophoue interest, and ostensibly on behalf of New York Phonograph Company, which was made a party defendant, but in renlitv on their own behalf and in their own interests. It is, therefore, respectfully submitted bv com¬ petitioner, New York Phonograph Company, ‘that the Court overlooked the conclusive evidence in the case when it said “there is no evidence that com¬ plainant ever exercised the option clause or the contract.” it is furthermore respectfully sub¬ mitted on behalf or complainant (lint such a con- rliiMon ,s manifestly contrary to the fact and that great injustice would result if such conclusion, clearly contrary to Hie fact, should be permitted to stand. If it is necessary further to show that com¬ plainant exercised the option clause of the con- 1668 tract, proof thereof is to be found in the statement of defendant’s witness Fahnestock on March 25 190-1, that the desire of the New York Phonograph Company to go into the business of bundling phono¬ graphs aud phonograph supplies “has been the only desire of the company ever since I had anything to do with it, and it still exists to-day” (Deft.’s Becord, Fahnestock, fol. 097), and in the statement of the same witness on October 29, 1903, that New York Phonograph Company "did business as long ns they could, they would do business to-day if thev had it chance” (Deft.’s Becord, Fahnestock, fol. lil, 57) ; and in statement of defendant’s witness Fuustou, that New York Phonograph Company would put itself right to business again if it succeeded in this suit (Eeft.’s Becord, fols. 006, G67). The other evidence in the record is to the same effect. On May 13, 1003, William IS. Gilmore, president of National Phonograph Company, testified that the National Phonograph Company was then, in ac¬ cordance with its agreements, defending and would defend all suits brought against its dealers in the State of New York by New York Phonograph Com¬ pany (Coin’s Becord, fols. 12-17 to 1219). In this way wo find conclusive evidence of knowledge on the pnrt of National Phonograph Company that complainant was endeavoring prior aud subse¬ quent to March 20, 1903, to exercise its right under the contracts and of determination on the part of National Phonograph Company to defeat complain¬ ant in its attempt to exercise its contract rights. Your petitioner further shows that his Honor, Judge Hazel, in the part above quoted of the opinion handed down in this cause on January 5, 1905, said : “Thu language of the option is vague and indefinite aud does not specify on what terms, if any; it becomes effective, or whether any consideration should be paid therefor.” 1069 In the oriyi uni contracts of October 32, 1888, nud February (i, 188!), and in (lit! loth paragraph there¬ of (Com.'s Exit., foist. 711, 835) the language which die Court had in mind and which (lie Court quoted in the said opinion is as follows: “Until t ho 2(Uh day of March, 1003, nnd for such further time, at the option of tiie party of the second pari, as the party of the lirst part may lie nuthorimi to extend said license us aforesaid.'’ As will he seen by reference to the said 15th paragraphs of the said two contracts of October 12, 1888, and February 0, 18S0, the provision quoted was used in the originnl contracts to define the periods of lime during which the extended licenses should continue upon (lie deposit of stools with the Central Trust Company by complainant’s predeces¬ sors. As the original contracts of October 12, 1S8S, and February (j, 1881), were complete and executed contracts, full force and effect must be given to all Ilieir provisions. In the 10th paragraphs of said original contracts (Com.’s Exh., fols. 722, 810) it is provided that : "If on the lirst day of .January, 1S90, or at H'*!l time thereafter there shall be in any por- lion of the lerritory covered by this agree- nnnit .. demand for phonographs or phono- graph-Ornphophoucs, Special Uxlras for appliances, which tile parly of the second part shall neglect or Tail to take appropriate measures to meet, the party of the lirst part may give written notice thereof to the party of the second pari, and ir at the end of thirty days (hereafter (lie said neglect or omission still continues, the parly of the lirst part may, so tuny us siwh default shall continue, 1070 „„„ , . «/ suvn default, pro¬ ceed to supply tiie demand through agents or otherwise Without liability to tiie party of the second part, provided that course shall not interfere wilii tiie delivery to the party of the second part of instruments, special extras or appliances, for which requisition shnll lie made by it under the terms of this agreement.’’ Other provisions in tiie originnl contracts like¬ wise show (lint tiie terms nud conditions of tiie orig- inni licenses were definite, full nud complete. If, however, nuy apparent indeliniloness existed in the original contracts of October 12, 1SSS, nnd Febru¬ ary «, 18SI), such apparent indoflnitcness was com- plctely ami absolutely removed by the express terms or the agreements extending licenses made June 23 1890, nnd June 13, 1889 (Com.’s Exh., fols. 815 7ol). In (lie third nnd fourth paragraphs, respec¬ tively, of said agreements extending licenses tiie following provisions occur (Com.’s Exh., fols. 859, “Until tiie 2(>tli day of March, 1903, and for such further time at the option of tiie party of tiie second part, as Hie party of the first part may be authorized to extend such licenses; subject, however, to the covenants and agreements of said agreement of October 12, 1S8S (February (i, ISSDJ, as fully and en¬ tirely as if said agreement had been in the first instance made to cover the period of the <- tc o j a ted hereby, as well as the period originally thereby fixed and limited,” It, therefore, appears that (lie terms and conditions upon which the extended licenses were granted “un¬ til the 2Gtli day of March, 1903, and for such further tiiiicj at tliu option of tlm party of the second part ns llio party of (lie first part may be authorized to ex¬ tend such license” wore definitely fixed and deter¬ mined in the agreements extending licenses or June 1800, and or June 13, 1880. ^our petitioner, there foie, shows unto your JJonnrs and avers (hat the extended licenses con¬ tinued in full force and oll'eet subsequent to March Ul’ l!)0:!- mtbjocf to terms definitely fixed and do- lermined as aforesaid by (be conlraels ami agree- meats referred to. As part, of this pci it ion and in support thereof your petitioner presents herewith to your Honors the annexed certificate of counsel and the annexed affidavits of James L. Andnni, and of Louis Hides and of William Fahnestock. Wherefore, your petitioner prays Unit a rehear¬ ing may be hud in this cause upon the question of the expiration of the said contracts and licenses on -larch «, 1903, and that sudi other and further pro¬ ceedings may be had in this cause for the purposes o such rehearing as may be in accordance with the justice and the practice of this Court in equity anil that the relief prayed for in the annexed order to sliow cause herewith presented, may be granted and that your Honors will grant to your petitioner •such other anil further relief as to your Honors may seem meet and as the equity and justice of the premises require. Dated January 30, 1905. x,;w York Phonograph Company, by H. W. Funston, Vice-President. CIRCUIT COURT OF THE UNITED STATES, Southern District op New York. New York Phonograph Com- I Thomas A. Edison, Edison \ Phonograph Company, Edi-/ son Phonograph Works and l National Phonograph Com- \ PA NY, I Defendants. I Affidavit of Will¬ iam Fahnestock. William Fahnestock, being duly sworn, says: 1 am a Trustee and Treasurer of New York Phonograph Company. I have read the foregoing petition and know the contents thereof, and the same is true to the best of my knowledge, informa¬ tion and belief. In Mnrch, 1903, I was a member of (lie Hoard of Trustees and of the Executive Com¬ mittee of New York Phonograph Company, and (lie proceedings linil on March 25, 1.903, and April 2d, 1903, are correctly set. forth, in the foregoing pe¬ tition, and such proceedings were had. T was pres¬ ent at tlie said meeting of the Executive Commit¬ tee and at (lie said meeting of the Board of Trus¬ tees. T attended the oral argument at filial hearing in this cause from day to day in May and June, 190t, and the foregoing petition correctly states what was done and said at the filial hearing ns heard and understood by me. The resolution of 1914 of, and tlie same is true according to the best of my knowledge, information aiid belief. In March, 1903, 1 was a Trustee and Vice-Presi¬ dent of New York Phonograph Company and I was present at the meeting of the Hoard of Trustees held April 15, 1003, aud the foregoing petition cor¬ rectly sets forth tlie proceedings had at said meet¬ ing. At tlie dates mentioned in tlie foregoing pe¬ tition for rehearing .1 received, through the mail, at 111) Nassau Street, the three registry return re¬ ceipts set forth in tlie petition. I was present from day to day in May aud June, 100-1, at tlie oral argu¬ ment upon tlie final hearing iu this cause, I signed I lie bill of complaint herein as Vice-President of the Company aud am familiar with tlie record at final hearing in this cause. Tlie foregoing petition sets forth the facts according to tlie best of my knowl¬ edge, recollection, information and belief. H. M. Funston. Subscribed aud sworn to before me ) this 30th day of Junuary, 1905. j T. P. Dalton, [8bal.] Notary Public, Kings County, Cert. Filed in New York County. Cl 1{ CL' IT COUBT OK THU UNITED STATUS, Hoijthukn blamin' op New Yoiik. New Yoiik Piionouiiaph Com¬ pany,, Complainant. Thomas A. Edison, Edison PiiONociHAPii Company, Edi¬ son Puonooiiapii Woiiks uud National PnoNooiupn Com¬ pany, Defendants. State and County of New York, as. : James L. Andem, being duly sworn, says: I am a trustee and secretary of New York Phono¬ graph Company, complainant above named. I have read the foregoing petition and know the contents thereof, and the same is true to my knowledge ex¬ cept ns to the matters therein stated to be alleged upon information and belief, and that as to such matters I believe it to be true. The grounds of my belief ns to such matters is information given to me by counsel, Louis Hicks, for New York Phonograph Company, complainant herein. In March, 1003, I was a trustee and Secretary of New York Phonograph Company, and I wns then a member of the Executive Committee and the Board of Trustees of the Company. The proceed¬ ings had by the Executive Committee on March 25, 1903, and by the Board of Trustees on April 15, 1976 1003, are correctly set forth iu the foregoing peti¬ tion 1 was present at each of said meetings and acted as Secretary thereof, and made the minutes thereof in each case. 1 personally prepared the let¬ ters dated March 20, 1003, and mailed them on said date, and received (lie three receipts therefor on said date, all as set forth in the foregoing petition, and the three registry return receipts mentioned iu said petition were, to my knowledge, received by the Vice-President, Hugh M. Eunston, of the Com- Pa"* at its oflice, No, 1-10 Nassau Street, in March, 1903, as set forth in said petition. I was present at the oral argument on final hearing in this cause May and June, 1001, and the foregoing petition correctly sets forth the facts in regard thereto as lienrd and understood by me. I am familiar with the record at final hearing in this cause and the foregoing petition correctly stales the facts appenr- iug-of record iu this cause to the best of my knowl¬ edge, information and belief. James L. Andem. Subscribed and sworn to before me ) this 30th day of January, tOOo, j T P. Da won, [seal.] Notary Public, Kings County, Cert, tiled in New York County. emeu it couut or tub united states, SouTnuitx Oistuio'i* or X >:\v Yotuc. State and County of New York, as.: Louis Hicks, being duly sworn, says: I am counsel for New York Phonograph Com¬ pany, complainant herein, and have lmd charge of the prosecution of complainant’s case since the til¬ ing of the bill of complaint, in January, IDOL J have read the foregoing petition for rehearing and know the contents thereof, and the same is true to the best of my knowledge, information and belief. I was of counsel for complainant at the argument at final hearing in May and June, 1904, and the pro¬ ceedings and arguments had at final hearing are correctly set forth in said petition as heard and un¬ derstood by me. I am entirely familiar with the record and the proceedings in this case and the statements in said petition with reference to the record of the proceedings in this cause are correct. I have read and carefully considered the opinion herein handed down by his Honor, Judge Hazel, on January 5, 1005, and especially that part of the opinion quoted and set forth in the foregoing peti¬ tion. No decree of any kind has been entered upon said opinion of his Honor, Judge Hazel. The state¬ ment contained in the part: of the opinion quoted in the petition that “there is no evidence that the complainant ever exercised die option clause of the . contract” came as a complete surprise to me. Dur¬ ing the entire course of this 'lengthy litigation I never hoard it asserted in any intelligible manner that complainant laid not exercised the option clause of (he contract: and in view of the bringing and of the pendency of this suit in equity wherein complainant was seeking, not only a preliminary, but a permanent injunct ion, both prior and subse¬ quent to March 20, I OIK), mid in view of nil the facts and circumstances set forth mjlirtorcgmng'JIStr' t never occhncirto moThat aiiv mie'stinn~ ever could orisons fdl lie exercise by.nimplniimnt of the option clause ofllie contract. Indeed, in the view which 1 took of complniiiniitTrights, the sending- of the letters of March 20, 1003, set forth in the foregoing petition, was unnecessary, and these let¬ ters were sent, to my knowledge merely out of an abundance of caution. In the view which I took of (he case, the bringing and the prosecution of this suit anil the asking for a preliminary and perpetual ’“junction was the most solemn and effective way in which complainant could exercise the option clause of the contract, for the reason that these de¬ fendants, by repudiating all obligation on their part arising out of the contracts between com- plainniit and the North American Phonograph Company had prevented complainant from per¬ forming the contracts on its part both prior to and subsequent to the 20th day of March, 1903. In my opinion the only way in which complainant could exercise the option clause of the contract wns by continuing to do business umler the twins nnd con¬ ditions of the contnici, hut. tills tlie defondiints con¬ tinuously prevented coinplmimiit from doing through their repudiation of the contrncts nnd throngli their do fin nee of complainant's rights un¬ der the contracts. The evidence adduced wns so voluminous nnd (lie exhibits offered in evidence by comphiinnnl were so ninii.v, nnd Hie difficulty of com pel ling defeinlnnts to produce necessnr.v d'oeu- "tents were so grant Hint, it never occurred to mo in the stress of the litigntion Hint. it. wns in any wtty necessnry or mnterinl to strengthen complain- nnt’s wise b.v putting in evidence (lie letters of March 2(i, 1903. In Hie view which I took of Hie option elnuse of (lie contract the rights were, granted to eompkiiimnt bv the contracts them¬ selves for n period of time snliseiniont to March 2(1, 1!I03, nnd no formnl net. by coinplninnnl to continue these rights in force subsequent, to March i>(>, 1 903, whs necessary. And if it. wns necessnr.v the prose¬ cution of this suit in itself seemed to lie t lie most perfect and formal way of continuing Hie rights in force nnd etfect. If, indeed, the offering in evi¬ dence of the letters of March 2(1, I !)():}, was ,i neces¬ sary or mnterinl part of complainant's case the omission to offer these letters in evidence, on the part, of complainant, was a mere inadvertence on the part of counsel, due to the great strain of this long litigntion and the many suits collateral there¬ to set forth in the record of this cause. Indeed, when I closed eoinpiaimint’s I'riiiw facia case October 21, 1903, ni.v health had been so shat¬ tered by the stress of this litigation that: it was barely possible for me to attend the session, and it was with the greatest dillieulty that I wns able thereafter to make the motion for preliminary in¬ junct ion, to prepare the ease for llnal hearing and to argue the case with associate counsel at final hear¬ ing. Furthermore, the Circuit Court of Appeals in Hie case of Unleigh v. Columbia Phonograph Com¬ pany, 122 Fed., (123, had on May 5, 1903, nnd there¬ fore subsequent to March 2(1, 1903, affirmed the granting of a motion for preliminary injunction against the agents of this defendant, National Phonograph Company, without any intimation that Hio continuance in force of Hio similar rights of the Columbia Phonograph Company in any way de¬ pended upon adducing evidence to show an nllirma- tivo act for the exercise of the option clause of the contract. The record in that case contained, so far as I am aware, no evidence of the exercise of the option clause of .the contract for the period subse¬ quent to Mnrcli 2(1, 1993, other than the bringing of the suit prior to March 2(1, 1903, and the prose¬ cution of the suit up to the rendering of the de¬ cision by Hie Circuit Court of Appeals subsequent to March 2(1, 1903, and on May 5, 1903. If at any time during Hie course of this liHgnTioirffefemr - • niils’ coifnseniiTTl~Bnggestcd— to— iiie-thab-in-tiicir' ‘ opinion it was necessary for complainant to prove a formal act for the exorcise of the option for the period subsequent to March 2(1, 1903, in order to avoid any dispute upon the subject my recollection of Hie letters of March 2(1, 1903, would have been re¬ vived and I should without question have offered them in evidence. But because defendant and de¬ fendants’ counsel presumably knew of . the letters of March 2GHi, 1903, and because the truth was Hint Hie letters of March 2(1, 1003, had boon written, sent and received and because of the bringing and prose¬ cution of this suit and because of the other circum¬ stances set forth in the foregoing petition, includ¬ ing the bringing and the prosecution of the Helm suit, it was in my opinion assumed and considered throughout this litigation that complainant lmd 1981 done everything which might lie necessary to exor¬ cise its option Cor the period subsequent to March 2(i, 1903. 1 1 nevcv occurred to me Hint defendant’s counsel would .or. could contend tliuT something Unit was nlisolutely contrary to tlurriicrsliottirnie considered liy the court ns n ground for deninl of a perpetual injunction prayed for by complainant, and I never understood defendants’ counsel to make such contention. liy reason of the premises the statement of the court in the opinion quoted that “there is no evi¬ dence that complainant; ever exercised the option clause of the contract” comes as a complete sur¬ prise, hollt in regard to the evidence in the cause and in regard to the law of the case. This state¬ ment is the first intimation which L ever had that any question could exist as to the fact, or that any point could he made under the circumstances ns to the law. As shown in the petition the evidence in the case conclusively shows in the absence of any contradiction that complainant had exercised the option clause of the contract and since the truth is that complainant had exercised the option clause of the contract, and since the conclusion reached by the court upon that point is manifestly contrary to the fact, the equity of this case suggests that the ends of justice require that a rehearing lie had and that complainant he permitted to offer in evidence the letters of March 20, 1903, and Hint such other further proceedings he had in this cause as will meet (he requirements of equity and enable the cause to he finally disposed of after a full presenta¬ tion of all the evidence upon all points deemed ma¬ terial by the court to the case. The expense of this litigation has been great and far beyond the means of complainant as the record fully shows. The suit lias been prosecuted as a test suit to secure from the courts an adjudication of the rights of the parties 1082 in view of all the facts. It would defeat the ends of justice and prolong this litigation beyond all reasonable limits to deny complainant’s request for a rehearing upon this point and for permission to put. m evidence the matter omitted through inad¬ vertence in a most voluminous record and because counsel had been misled by a prior decision of a Circuit Court of Appeals. Furthermore, as his Honor, Judge Hazel, intimnted in his opinion, the questions involved in this case should he passed upon by the Circuit Court of Appeals and manifest¬ ly the ends of justice require that when the case comes to the Circuit Court of Appeals the evidence in the case should ho full and complete so far ns it can be made so upon all questions which are deemed by the Circuit Court to be material to a proper de¬ termination of the issues involved. The letters of March 20, 1903, were never in pos¬ session of counsel for complainant, hnd passed com¬ pletely out of my memory, and nothing ever oc¬ curred until the handing down of the opinion on January 5, 1903, to revive my recollection of the letters, to suggest their materiality or even the ad¬ visability of offering them in evidence. Louis Hicks. Subscribed and sworn to before me J • , j ; ; this 31st day of January, 1905. j T P. Damon, [skao.] Notary Public, Kings County, Cert, filed in New York County. 1983 1984 CIRCUIT COtJUT OF TUB UNITED STATES, South hum District qp Nmv York. N i;\v York ruo.NooiiAi'ii Com- Thomas A. Edison, Edison \ I’ilONOdltADH C’OMI'ANV, Kill- j SON I’lIONOCIILU'H WoilKS 1111(1 l National Phonoiiiiai'h Com- \ Slate and County of New York, ss. : "We, the undersigned, Louis Hicks and John C. Tomlinson, counsel for complainant, in the above- entitled suit in equity, hereby certify that we have read the foregoing petition and affidavits thereto annexed and referred to therein and made a part, tliereor, that we have carefully read . 1 considered Hie opinion handed down by Ids Honor, .Judge Hazel, in lids suit on .Tanuary 5, 1005, and that in our opinion the circumstances and facts set forth in (lie said petition and allidavils are of such weight and importance that a rehearing of lids cause should he had upon (he question of the expiration or cnniphiinnnt.’s rights on March LMi, 190!!, and that, in our opinion if such rehearing is laid the facts and circumstances set; forth in the said peti¬ tion and allidavils, will change (he result, readied hv his Honor, Judge Hazel, in the opinion of Janu¬ ary 5, IMS, and lead the court to hold that com- . . . “fa'os mu sun in lorcc and continued in force subsequent to March 20, 1903. We hereby further certify that in view of the great expense at which tin's litigation lias been conducted and of the length of time elapsed since the suit was begun and because the questions in¬ volved should according to the intimntion of his Honor, Judge Hazel, lie passed upon by the Circuit Court of Appeals, the evidence iii the cause should bo made full and complete upon every question of fact deemed material by the Circuit Court to a proper determination of the issues involved. Dated Hu's 31st day of January, 1903. Louis Hicks, John C. Tomlinson, Counsel for Complainant. (Endorsed) — U. S. Circuit Court, Southern Dis¬ trict of New York.— New York Phonograph Company, Complainant, against Thomas A. Edison, Edison Phonograph Co., Edison Phonograph Works and National Phono¬ graph Co., Defendants.— Order to Show Cause. Petition and Affidavits for Itchenring. — Louis Hicks, Counsel for -Com plainnnt, 25 Pino St., Now York, N. Y.— U. S. Circuit Court, Southern District, New York.— Filed May 1, 1905.— John A. Shields, Clerk. UNITED STATES OIIiCUIT COUNT, SouTUUUN District ok New York. In Equity. New Youic Fiionwsuai'ii Com- l’ANY, Complainant, AGAINST Thomas A. Edison, Edison i’UOXOtlRAl'H C’OMl'ANY, EDI¬ SON Phonograph Works mid National Phonograph Com- Defendants. Elisiia K. Camp, for complainant. Louis Hicks, John C. Tomlinson, of C'OIIIlSIil. JioiHNSON, Diddle & Ward, for defendants. C. L. BUCKINGHAM, C. M, Hough, Flu NIC L. Dyer, of couusel. Hazel, J. : This is an application by complainant for a re- hearing of Ibis cause and for lpavp to introduce ad- rendered January 5, 1005, allowed an accounting and held that no injunction should issue ns the li¬ censes in question had expired and complainant had Ut exe,,cist-* its option to extend the same. 1 he petition for rehearing recites that because of Ibe opinion of the court, full and complete reargu- mentnnd the production of further available proofs upon the question whether the licenses were ex¬ tended beyond March 2(1, 1003, becomes essential lest injustice ho done if the cause be decided on the present record. Defendants contend that under well established rules of procedure the hearing sought should not lie allowed on the ground that the evi¬ dence now oJTcrod is not newly discovered and com¬ plainant has not been misled or surprised. This contention, persuasive of its correctness in a ma¬ jority of cases, need not be discussed, ns a careful review of the original decision and rereading parts of the evidence, satisfies me that the former ruling was erroneous in that complainant was not afforded all the relief to which it is entitled. The contention that the complainant’s rights under the licenses re¬ mained in force subsequent to March 20, 1903, was fully argued at the hearing and suflicient evidence is found in the record in support thereof, although it was not given the importance which I now believe it merits. The opinion after stating, “As has been observed, the original New York Company license was until February Gth, 1S94 (the Metropolitan Company li- cense expiring earlier), and later, as has been stated, both licenses were extended un¬ til March 20, 1903. The original and exten¬ sion licenses, after setting forth the condi¬ tions of the second term, contained this pro¬ vision, ‘Such further time, at the ontion of the parly of Ilia .second purl, ns Ilia party of Ilia first purl, may lio authorized to extend said license.’” out that there is no evidence that complain- -*r exercised such option clause and, accord- it: was dillicult to conceive upon what equi- rounds it was entitled to assert any rights tlie second term. The excerpt from the li- is misleading and does not correctly disclose find of time for which they were equitably ed. The paragraph containing the term of ion iu the agreement: of -Mine 23, 1800, lie- the American Company and tin; Melropoli- nipnny reads as follows: “'I'll i III). — It is furl tier agreed that upon delivery, as aforesaid, to said Jesse II. Lip- pincott, Trustee, or li is successor, by said Central Trust Company of New York of said shares of the capita] slock of the party of the second part, and upon Hie faithful performance by (lie parly of the second part nf all (lie covenants and agreements made in- L-umhent upon it. by said agreement of Octo¬ ber llitli, 1SSS, then that this agreement shall become and shall confer upon and shall fully and entirely vest iu the parly of the second part an extension or (lie rights granted to ind conferred upon the parly of the second part by said agreement of October 12th, 18SS, fora further period and until (lie 2(ith day of March, limit, and for .writ further time f said agreement of October 12th, 1SSS, as fully and entirely as if said agreement laid period of the extension granted hereby, as well as tlie period originally thereby fixed and limited.” (Italics mine.) It will lie noted that the words “at tlie option of tlie party of (lie second part,” upon which stress was placed in tlie original opinion are omitted, al¬ though such words of apparent limitation are con¬ tained in (lie original and extension licenses to tlie New York Company and in tlie original (not exten¬ sion) license to the Metropolitan Company. The question for further consideration is whether the franchise rights granted to tlie Metro¬ politan Company were extended for tlie full period of time for which tlie licensor laid authority to ex¬ tend tlie same, or, as tlie court assumed, whether such rights were wholly dependent upon tlie formal exercise of tlie option and tlie necessity of another agreement to extend tlie term. Complainant lays stress upon tlie perpetuity clause of tlie contract between Mr. Edison, tlie Edison Companies, Lip- pincott and tlie American Company by which it was agreed that the phonographs and supplies for use in thu United States and Canada should bo exclusively manufaetured by tlie Edison Phono¬ graph Works in perpetuity. Complainant insist that tlie licenses were in effect extended beyond tlie date mentioned in the contract and for such period as the American Company by its agreement with the Edison Works was authorized to extend the same. Tlie argument proceeds upon the theory that its the American Company acquired legal title of the Edison phonograph patents, the license granted by that company to the Metropolitan Com¬ pany continued during tlie life of the patents, and tlie manufacturing contract between tlie American Company and the Edison Works being in perpetu¬ ity, the license privileges conveyed to complain- 1080 ant’s predecessors were likewise perpetual or of imleflnite duration. This inference, however, is _not warranted liv the law or fuels! - - - Tlie parties to the various Contracts undoubtedly intended to ell'eet a mutually beneficial plan of co¬ operation in promoting and exploiting the phono¬ graph and to maintain, preserve and perpetuate the relations established by the contracts, Hence smell rights, franchises ami privileges as the Amer¬ ican Company had authority to convey were con¬ ferred upon complainant's predecessors. The agreements by which (lie patents were transferred to Hie American Company and the established rights of the parties, considered in connection with the testimony of Mr. Edison, nn(|iiesfionnhly war¬ rant a determination that the parties actually in¬ tended their relation to lie continuous and lusting. Sucli contracts not only in terms assigned to the American Company the then existing phonograph patents and those npplied for prior to August 1, 18SS, lint also any invention or improvement upon the phonograph made within fifteen years. -~yinit prtjd.se meaning may lie iriven to the words “in perpetuity” (contained in the contract between the American Company and Edison Phonograph, Works), is not necessary to a decision here. The duration of the manufacturing contract, as to whether it was continuous, perpetual or limited, does not. all'cct the authority to extend ti.e licenses m question, which the American Company imd un¬ der the agreement by which the patents were sold to it and tlie exclusive rights granted as herein- above mentioned. That tlie franchises, rights and privileges secured were transmissible to complain- ant s predecessors upon (lie terms and conditions Specified in the contract must, therefore, lie con- ceded.- It is_welLsett|e- mtly was dependent upon future improvements he phonograph and tlie status of the parties at expiration of tlie original term. Such an in- . . if tlie intention of tlie parties induces holding t hat. inasmuch as improvements were le suhscinicni to the contract of August 1, 1858, vit: in the years 1SSS. 1881). 1S!)(), IS!) I, 1S92 1 Stilt. Miaou, (lie license •lieges or franchises granted by the American ipany to the Metropolitan Company continued lout (lie necessity of further terms or comli- is expressive of such intention. Snell being the . tlie American Company had authority and er to convey the privileges mentioned in tlie -e’i'eiit until the expiration of the life of the nograph and improvement, patents, lie Xew York Company license: .xcept as hereinbefore pointed out, tlie provi¬ sions under which the duration of both licenses was extended, are tlie same. The legal effect of the option in the Xew York Company license, in i.i.l opinion, was to enable that company, if it so desired, to abrogate the existing relations. This conclusion is not reached without hesitation, but further consideration of the evidence warrants holding that the option was in effect a reservation of a right to the licensee to discontinue tlie existing relations on March 2li, 11)03, if it no longer wished to co-operate in tlie enterprise. The extension of the license obtained by tlie deposits of stock and of tlie extension license in tlie manner hereinbefore indicated, was for five years and for such further time at tlie option of the Xew York Company as tlie licensor was authorized to extend tlie same. This evidently was a positive grant and its terms doubtless were perfectly understood by the parties. As indicated, there is abundant evidence in tlie record from which tlie intention of tlie parties to extend the license to March 20, 1003, may be ascer¬ tained. . Defendant’s contention that it was ueces- * 1 a <-< 1 t i it fi t j] t should formally notify the American Company or its successors on March 20, 1003, whether it elected to continue under the license granted to the Xew York Company, or preferred to exercise its option, is thought not to be maintainable. Xot only was tin's action instituted prior to March 20, 1903, to compel a recognition of complainant's rights under the licenses, but complainant in many ways, as shown by tlie proofs, evidenced its intention to con¬ tinue in the phonograph business and to exercise tlie right of carrying on the same under tlie license agreement. Its franchise rights, however, as lias been stated, were persistently ignored and disputed by Mr. Edison and the defendants. That com¬ plainant endeavored to obtain phonograph records and supplies from other dealers when defendants 1094 refused to supply the siuiie (ns permitted by the terms of the license), is also shown. Attention is directed to the evidence showing that complain¬ ant’s ell'orls to Obtain phonograph supplies were obstructed by a suit, instituted by defendant, Na¬ tional Company, against l-oeds, Catlin & Company, to enjoin them from supplying phonograph records or appliances to complainant. As already ob¬ served, the defendants, in my judgment, by ’their acts must be deemed to have regarded the extension . clause as self executing and operative beyond the period therein specified. -Moreover, the invasion of complainant’s territory by the National Com¬ pany, the refusal on the part of the defendants to recognize their exclusive rights grunted, together with the institution of this action, would seem to have excused the New York Company from for- nmlly exercising an.v option. Such an act in the ' circumstances presented became nugatory and an idle -ceremony. The principle' TsHiq^ddTthnt he who obstructs another in the performance of an act, which otherwise would be obligatory mar not avail himself of the non-performance which lie him¬ self has occasioned. Dolan c. Dodgers, 140 N. Y. •ISO; Shaw c. Insurance Co., (i!) N. Y., 2SI1. Jly conclusion is that a rehearing ’of this cause is not necessary. A re-examination of the record and the correction or the previous opinion I deem warranted by (he proofs and hence complainant is untitled to an. injunction and accounting as proved for in the complaint. Such injunction, howcv Court of Appeals of the questions presented pre in u of course an appeal is taken and seasonnhl' prosecuted. A decree in conformity with the fore going opinion limy be entered. ( Endorsed ) United Slates Circuit Court, South¬ ern District of New York, in Equity.— New against Thomas A. Edison ei al, Defendants -Opinion, Hazel, J.—U. S. Circuit Court, Southern District of New York.— Filed Apr. . 20, 1005.— John A. Shields, Clerk. In the Circuit Court of the United States for the Southern District of New York, held in the Court Hoorn in the Post Office Building in the County of New York, on the 2nd day of May, 1005. Present— Honorable John It. Hazel, U. 8. Jmhjo. New Yokk Phonograph Com-\ PANY, Complainant, vs. Thomas A. Edison, Edison ) Phonograph Company, Em -[ son Phonograph W and the National PnoNO- 1 graph Company, Defendants. Decree. 'Hus cause came on to be heard upon the hill- answer, replication and evidence, and was argued oil May 31 and June 1, 2 and 3, 1004, by Louis Hicks and John C. Tomlinson, Esq.’s, counsel on behalf of complainant, and by C. L. Buckingham and C. M. Hough, Esq.’s, counsel on behalf of de¬ fendant, National Phonograph Company, and was further heard and argued by said counsel on Feb¬ ruary 27, 1005; and thereupon upon consideration 1090 icronf It was and hereby is ordered, adjudged and .•creed as fid lows: Fiasp — Tluil. Hie. defendant, National Phono- i-aph Company, has trespassed and infringed up- :i and wrongfully invaded the rights of complain- nt, New York Phonograph Company, l>y selling ad by using, and by eausing to he sold and by liming to he used hy others than eomplainant, ifhin the Slate of New York, phonographs and ipplies therefor, and by selling for use, and hy reusing for use, by others than eomplainant, it. hin the State or New York, phonographs and ipplies therefor in violation of the provisions of ml of tlie rights of the eomplainant under eertnin ontrncts as extended hearing date October 12, SSS, between (lie North American Phonograph ompany and the .Metropolitan Phonograph Corn- nay and also between Thomas A. Edison, the Edi- :m Phonograph Company, the Edison Phonograph forks, (lie North American Phonograph Com- any and Jesse I I. Lippincott, and a contract bcar- ig date the t ill l day of February, ISSi), between lie North American Phonograph Company and ohn P. Haines, and a contract hearing date July , 181)3, between complainant and the North Amur- an Phonograph Company. Skcond — That comphmmnl, New York Phono- raph Company, recover from defendant, National ’heliograph Company, the profits, gains and ad- milages which the said defendant, has received or undo, or which have arisen or accrued to it by eason of its said trespass, infringement, and mingful invasion, together with the damages vliicli the complainant has sustained by reason hereof. And since it does not appear to the court vlmt such profits and damages are, it is further Ordered, adjudged and decreed, for special rea¬ sons shown, to wit: the concurrence of the parties mi, rs ’'Tn “ aml tllC “P”1*** l« mattus of he appointee, that this cause be re- fured to John A. Shields, Estp, a standing exam¬ iner of this court to take, state and report to the Court an account of the said profits which the said defendant has made or received or which have arisen or accrued to it, hy reason of said trespass, infringement and wrongful invasion of eomplnin- ant’s rights, and also to assess the damages which the complainant has sustained by reason thereof as above stated. ' . 1 limn-— That the complainant on such account¬ ing have the right to cause the said defendant, Na¬ tional Phonograph Company, hy its officers, agents,, clerks and employees to be examined ore tains or otherwise, upon oath, touching all matters con¬ tained in said reference ; and also to require the pro¬ duction of all hooks, papers, writing, vouchers and other documents applicable thereto, and in the pos¬ session of said defendant or under the control of said defendant or its officers; and the said defend¬ ant, hy its ofllcers, agents, clerks and employees, shall attend for such purpose before the said mas¬ ter, John A. Shields, Esq., at such times and place as he, the said master, shall or may require. Pouirni.— That complainant, New York Phono¬ graph Company, recover from defendant, National Phonograph Company, the costs herein to be taxed by tiie clerk of this Court. Fifth. — It is further ordered, adjudged and de¬ creed that a writ of injunction issue out of and un¬ der the seal of this Court, as prayed for in the bill of complaint herein, directed to said defendant, National Phonograph Company, and enjoining and restraining said defendant, National Phonograph Compun.v, ils nflleers, agents, clerks, servants, em¬ ployees, attorneys, sneeessors, assigns, associates, dealers, confederates and all persons in privity with said defendant National Phonograph Com¬ pany from directly or indirectly selling or leasing, within tlie .State of New York, phonographs and supplies therefor, to others than complainant and from using within (lie State of New York phono¬ graphs and supplies therefor, and from causing to lie sold or caused to he leased to or causing to he used, within the State of New York, phonographs and supplies therefor by others than complainant, and from selling for use or licensing for use within the State of New York phonographs and supplies therefor by others than complainant in violation of the provisions of and of the rights of the com- rplmnifiTT undia’TertabTcontracts^ in'g date 'OHbbcr,. J 2, jsSSJ’nfttwecn^ltTrTfbrth Ameriea'ifl’honogrnph Company nod the .Metrofiuli- tail Thonoginph _ Company and also between Tli<7mus''A7_Eiiison, tliiT Edison lMionogriipln Com¬ pany, the Edison Phonograph Works, 'tfluT Nortli American Phonograph Company and Jessie H. Lippineott, and a. contraet hearing dale the titli day of February, iSSt), between the North American Phonograph Company and John P. Haines, and a contract, bearing date July 1, 1893, between cone plainant and the North American Phonograph Company. John It. Hazel, U. 8. J. Approved as to form. Romnson, Biddle & Waiid, For Deft. N. P. Co. Louis TIicks, For Complainant. (Endorsed) — TJ. S. Circuit Court, Southern Dis trict of N. Y.— In Equity, No. 7719.— Nev 19D8 York Phonograph Co. Complt. vs. Thomas A. Edison, Edison Phonograph Co., Edison Phonograph Works and National Phonograph Co. Defts. Decree. — Louis Hicks, Counsel for Complainant, 25 Pine Street, New York.— U. S. Circuit Court, Southcrn'District of New York.— Filed May 2, 1905.— John A. Shields, Clerk. In the Circuit Court of the United Stntes for the Southern District of New York, held in the Court Room in the Post Olllce Building in the County of New York, on the 2nd day of May, 1905. Present— Honorable John H. Hazel, U. 8. Judge. New Yoiuc Phonograph Com- pans, Complainant, Thomas A. Edison, Edison ) Phonograph Company, Edi-| son Phonograph Works and 1 Tiih National Phonograph 1 Company, . I Defendants. / Order staying Injunction. A decree for an injunction in favor of the com¬ plainant, New York Phonograph Company, and nga i si left la 1 N ,tionnl Phonograph Company, in the above-entitled suit in equity having been made and filed herewith, it is Ordered, adjudged and decreed that the said in¬ junction against the said defendant, National Phonograph Company, l*e and the same hereby is, stayed till the first, day of duly, 11105; that if on or before the said first, day of .Inly, 11105, said defend¬ ant National Phonograph Company shall have perfected an appeal to the United Stales Circuit, Court, of Appeal's for the Second Circuit from said leeree for tin injunct ion and shall, on or before that date, have tiled a bond ill the olllce of the clerk of this Court, in an amount, and with surety approved by the n 1 1 1 i itsi inset, or fixed and approved iy this Court, said hand to he conditioned upon the payment to complainant, by defendant National Phonograph Company, in ease the said decree shall lieallirmcd by the said United States Circuit. Court uf Appeals of all profits which shall he made by or which shall accrue to said defendant. National Phonograph Company, and of nil damages which shall lie sustained by complainant, New York Phonograph Company, by reason of this stay of the said injunction, then this stay is continued till the first day of Ihe next term of said United States Cir¬ cuit Court of Appeals; that if then said appeal is docketed and noticed for hearing by defendant Na¬ tional Phonograph Company, as a preferred cause, this stay is continued till the hearing, decision and mandate or said United States Circuit Court of Ap¬ peals. It is further ordered Unit (bo bond hereinbefore referred to he in the amount of §10,000. John K. Hazel, U. S. J. Approved as to form. Jtom.NsoN, Biddle & WAttn, For Defts. Louis Hicks, ■ . . For Complainant. (Endorsed)— U. S. Circuit Court, Southern Dis¬ tinct of N. Y. — In Equity, No. 7719. — New Edison, Edison Phonograph Co., Edison Phonograph Works and National Phonograph Co., Defts. — Order Staying Injunction. — Louis Hicks, Counsel for Complainant, 25 Pine St., New York. — U. S. Circuit Court, Southern District of New York.— Filed May 2, 1905.— Joint A. Shields, Clerk. CIRCUIT COURT OF TOE UNITED STATES, Southern District op New York. New Yoiik Phonograph Com- 1 Tan National Phonograph V Company, ) i Defendant. I Impleaded with Thomas A. I Edison, Tiie Edison Phono- I oitAPri Company and Tun I Edison Phonograph Works, i Know all men by these presents: That we, the National Phonograph Company, as principal, and Federal Union Surety Company, as Surety, are held and firmly bound unto New York Phonograph Com¬ pany, complainant above named, in the sum of Ten thousand dollars (§10,000), to be paid to the said New York Phonograph Company or its successors, 2001 to which payment, well and truly to he made, we bind ourselves, and each of us, jointly and sever¬ ally, and our and each of our successors, ‘firmly by these presents, Sealed with our seals and dated the 10th day of •May, 1005. Whereas, lately in the action hereinabove en¬ titled, a certain order or decree was made and en¬ tered on the 2d day of May, .1005, wherein and whereby if was directed, among other things, that an injunction issue out, of and under the seal of (his Court, enjoining and restraining the defendant Na¬ tional Phonograph Company from doing or suffer¬ ing the matters and things in said decree at length set forth; and Whereas, by another order of this Court also bearing date the 2d day of May, 1005, the operation of said injunction was stayed for a time and upon terms therein at. length set. forth pending an appeal by (lie defendant, National Phonograph Company to (lie United States Circuit Court of Appeals for the Second Circuit, provided (hat a bond be tiled in the cilice of the Clerk of this Court in the sum of $10,- 000; and Whereas, such appeal to said United Stales Cir- nil, Court of Appeals for the Second Circuit lias been taken by said defendant National Phonograph Company. Now, therefore, the condition of this obligation is such, that ir the above named defendant Na¬ tional Phonograph Company shall, in the event of the said order or decree of May 2d, 1005, first above alluded to being allirmed by the said United States Circuit. Court of Appeals, pay to the complainant New \ork Phonograph Company all profits which shall be made or which shall accrue to said defend¬ ant National Phonograph Company, and all dam¬ ages which shall be sustained by the complninnut, New York Phonograph Company, by reason of the stay of the said injunction directed by said decree or order of May 2d, 11)05, first hereinabove referred to, then and in such case this obligation shall be void; otherwise to remain in full force and virtue. National Phonograph Co., By IV. E. Gilmore, [seal.] President. Attest: Edgar W. Dennison, i Secretary. Federal Union Surety Company, [seal.] By Borhrt M. Nugent, lies. Vice-President. Attest: F. Stearns Erick, lies. Asst. Secretary. State op New York, ) County of New York, j On this IStli day of May, 1005, before me person¬ ally appeared liomiRT M. Nugent, llesulont Vice- President of the Federal Union Surety Company, with whom I am personally acquainted, who, being by me duly sworn, said that he resides in the County of New York, State of New York; that he is the Hesident Vice-President of the Federal Union Surety Company, the corporation described in and which executed the within instrument; that he knows tile corporate seal of said Company; that the seal affixed to the within instrument is sucli corporate seal; that it was affixed by order of the Board of Directors of said Company, and that he signed said instrument as Hesident Vice-President of said Company by like authority; and that the liabilities of said Company do not exceed its assets, Chapter 720 of K«W Vork Session Uiwh ol 18SM- Ami (lie siiM Roherl M. Nugent further said that ho is acquainted with F. Stearns Illicit, and knows l,lni to lio tlm Resident Assistant, Secrotnr.v of said Company; that the signature of the said F. Stearns Edick subscribed to the said instrument is in the genuine handwriting of the said F. Stearns Edick, and was thereto suliserihed by the like order of t ho said Board of Directors and in the presence of 1dm, the said Resident Vice-President. [seal.] CathrYn P. ASPKLL. EXTRACT FROM BY-LAWS. Bo it remembered. Shat at a meeting of the Board of Directors of the Federal UNION SURETY Company, duly called and hold on the 10th day of July, 1001, a quorum being present, the following By-Laws were adopted : “ABTioiiE VIII, Suction 1. The President, Vice- “President, or Second Vice-President may, from “time to time, appoint Resident Vice-Presidents, “Resident Assistant Secretaries and Attorneys in “Fact, to represent and act for and on behalf of the “Company, and either tiio President, Vice-Presi- “dent, Second Vice-President, the Board of Direc- “tors or tiio Executive Committee may, at any time, “remove any Hitch Resident Vice-President, Resi¬ lient Assistant Secretary, or Attorney in Pact, and “revoke the power and authority given him.” “Sue. !j. Resident Vice-Presidents shall lmvc “power and authority to sign and execute on behalf “of tlie Company, any and all bonds, recognizances, “contracts of indemnity, and other writings oldig- “atory in the nature thereof, and to hind the Com- “pany thereby as fully and to the. same extent US “the President could bind it.’1 2004 “Sec. -1. Resident Assistant Secretaries shall “have power and authority to aDlx the seal of the “Company to, and attest, on behalf of the Company, “any and nil bonds, recognizances, contracts of in- “demnity and other writings obligatory iu the “nature thereof, as fully and to the same extent as “the Secretary could bind it.” County of Marion. | NS,: I, U. R. Hinkle, Assistant Secretary of the Fed- kiiai, Union Suiiety Company, do hereby certify that the above and foregoing is a true and correct extract; from I lie By-Laws adopted by the Board of Directors or said Company, at a meeting held on the tenth day of July, 1001, as thu same appears upon the records of the Company now in my pos¬ session and custody as Assistant Secretary. I further certify that in accordance with the pro¬ visions of the foregoing By-Laws the following • I I Inly appointed in the capaci¬ ties and on the dates as respectively shown : As Resident Vice-President, at New York, X. Y., appointed February 23d, 1005: R. M. Nugent. As Resident. Assistant Secretaries at New York, N. Y., appointed February 271 h, 1005: Sumner S. Bowman, F. Stearns Edick, May JC. MuCaiie, am| fi ( s I 1 1 t (s II In witness whereof, I have hereunto set my hand and alli.xcd (he seal of said Company at the City of Indianapolis, this lSth day of May, A. D.'lOOo. [sea i,.] C. R. Hinkle, Assistant Secretary. (Endorsed) — U. S. Circuit Court, South. Dist. N. Y. — N. Y. Phono. Co., Complt., vs. The Nnt’l l’liono. Co., Deft., Impleaded with Thomas A. Edison, el til.— Bond for Damages.— RobinBOU, Diddle & Ward, Soli's. for Defendants, No. 7!) Wall SI., New York City.— Within Imml for damages is liereh.v approved. dune I, H'Oii. Louis I licks, Counsel for New York l’liono. Co.— Approved as lo form and sunicieuey, John Ii. Hazel, f. N. V. S. Circuit. Court, Southern District of New York.— Fijed Jnn. 2, 1 1105. — John A. Shields, Clerk. At a Stated Term of the Circuit Court. Judicial Circuit, in the Southern Dis¬ trict of New York, held at I ho Court. It . us in the Cit.v of New York on the lid I'd day of May, one thousand nine hundred and live. sent — Hon. ii. II. v York PnoNouiiArii Com- Complainant, I'iih National Phonocrapi C’OMI'ANV, Defendant, Impleaded with Thomas Edison, Tub Edison Phono- | oitAPH Company and Edison Phonoc.uaph Works. On motion of Robinson, Diddle & Ward, Esqs. solicitors for complainant, 2000 •Tt is ordered : That an appeal to the United States Circuit Court of Appeals for the Second Circuit from the order or decree heretofore filed and on- iered herein on t he 2d day of May, 1005, he, and the same hereby is, allowed; and that a certified tran¬ script of the record, testimony, exhibits, stipula¬ tions and ail proceedings herein ho forthwith transmitted to said United States Circuit Court of Appeals; and it is Further ordered: That the bond for costs on said appeal ho fixed at the sum of $250. Dated May 23rd, 1005. E. IT. Lacomdb, U. S. Circuit Judge. The defendant above named herein, the National Phonograph Company, feeling itself aggrieved by ho order and decree made and entered in tliiB rom-(. ill (III! notion above entitled on the 2d day or day, 11105, wjicrrhy it. was adjudged Umt this do- fiiilant had trespassed mid infringed upon and vrnngfully invaded tin* rights of (I 1 1 t lit, New York Phonograph Coinpan.v h.v wiling and wing, and h.v eansing to lie wild and h.v causing to :n> used h.v otliers Ilian eoni|dainant. in the State if New York phonographs and supplies therefor, mil h.v selling for use mid h.v licensing for use by itliers than eoniplaibnnt in the State of New York phonographs and supplies therefor, ns h.v a refer¬ ence to said order or decree will more fully and at. large appear; and win-rein it was further directed mid adjudged that tin- cnmplamuiil recover from the defendant Ole prnlils, gains ami advantages which tlie defendant, the National Phonograph Com¬ pany received or made or which had arisen or accrued to it liy reason of the trespass, in¬ fringement and wrongful invasion so as afore¬ said found by the Court; and wherein it was further adjudged and decreed that a writ of injunction issue out of and under the seal of your llonoralde Court, as prayed for in I he hill of complaint in this action, as h.v a further refer¬ ence to said order or decree will more fully and at; large appear, hereby appeals from said order or de¬ cree dated and entered in this cause on the 2d day of liny, 1005, to the United States Circuit Court of Appeals for the Second Circuit, and so appeals from eacli anil every part of said order or decree. And said defendant National Phonograph Com¬ pany now conies, h.v liobinson, Biddle & Ward, ICsqrs., its solicitors, and petitions the Court for mi order allowing said defendant, National Phono¬ graph Company, to prosecute said appeal, and also for an order fixing the amount, of security for costs which defendant shall give and furnish upon such appeal, and that upon the giving of such security all proceedings in this Court be suspended until I lie terminal ion of such appeal. And so your petitioner will ever pray. ItoniNsoN, Bumr.ii & AVard, Solicitors for Defendant National Phonograph Company. (ICndorsed) — U. 8. Circuit Court, Southern Dist. N. A-. — N. A'. Phono. Co., Complt., vx. The Nat’ I Phono. Co., Deft., Impleaded with Thomas A. Edison, cl ill. — Petition of Appeal and Order of Allowance. — Hobinson, Biddle & AVard, Solrs. for Deft., N. P. Co., No. 7!) AVnll SI., New York City.— Due service of within Petition & Order is hereby admitted, this 25th day of May, I !)()">. Elisha K. Cam)), Solicitor lor Complainant. — U. S. Circuit Court, South¬ ern District of New York. — Piled May 31, 1005. — John A. Shields, Clerk. CIIfCUlT COUHT OF THE UNITED STATES, SoirmmtN Distuiut or New Yoitic, Nuw* Yohk Phoxwiiami Com- 1 I'ANY, Complainant, Thomas A. ICnis Tiionooiiawi Co: son l’HONomiAVii , PlIOXOUitAI'lI I Assignment of Error Pursuant to Rule 11 of the United States Circuit Court of Appeals for the Second Clroult. Tim Nnlinmil Phonograph Company, defendant- appc-1 lant , res poet fully shows Unit the Court below erred : 1st. In not. '(hiding t hat. the complainant, New York Phonograph Company, Imd abandoned nil business, nnd particularly the business of selling, leasing or otherwise dealing in phonographs mid supplies theretor at, least, as early as the year 181)5. 2nd. In not tlnding that the complainant, New York Phonograph Company, did not, did not at¬ tempt to, could not, and would not resume the phonograph business after the sale by the Receiver of the assets ol I lie North American Phonograph- Company. 2010 3rd. In not finding that the complainant, New York Phonograph Company, had failed to perform its legal obligations to continue nnd maintain the phonograph business as a prerequisite for the en¬ forcement of its rights under the contracts referred to in the hill of complaint herein. ‘I til. In not finding that those contractual rela¬ tions which had been created between the North American Phonograph Company and the complain¬ ant, and which were executory in their nature, had ceased to bo effective upon the insolvency and sale of tlie assets of the North American Phonograph Company. 5th. In finding that the performance of those obligations which were executory in character, and which laid been created between the North Ameri¬ can Company nnd this complainant,, might devolve upon others than the parties to the contracts under which such obligations were undertaken nnd as¬ sumed. Otii. In not finding thill; Hie proposed coutraet between the North American Phonograph Company nnd the Metropolitan Phonograph Company, dated the 23d day of June, 181)0, for an extended license term for the period between October 12, 1803, and March 20, 1903, was never lawfully delivered and never became operative between the parties. 7th. In not finding that the proposed coutraet between tlie North American Phonograph Company and the New York Phonograph Company; dated the 13th day of June, 1SS9, for an extended license term for the period between February 0, 1894, and March 20, 1903, was never lawfully delivered nnd never became operative between the parties. 8th. In nut finding that ns n condition precedent o the; lawful delivery, execution and consummation d flic proposed contracts referred to in I lie litli and tli assignments of error, I lie Metropolitan Phono- ;rnpli Company and the Now York Phonograph ‘om piuiy were cadi obligated to deliver and trims- er to tile North American Phonograph Company, esse It. l.ippim-ott, or their representatives, two honsand live hundred shares of their capital stock ; hat sndi stock was not delivered, and that deliv¬ er thereof was withheld and prevented b,v earn- til'll. In not dialing that the action of the com- lailiaiil ill withholding and preventing the deliv- ry of tile shares of stock mentioned in (lie proposed [intraets referred to and dcserihed in (lie (it li mid tli assignments of error eonsliliiled aids of reseis- ion which were nerepted as such by Ilia North nierk-sn Phonograph Company, ii.s represent!!- ves, and Hie representatives of Jesse II. I.ippin- ,(t ;«"d i" not linding (hat, even if the parlies laid instructively aecepted and entered upon said pro- used eoalraets daring (lie period of the so-called "‘Pension agreement, wliieh ran from July I, I Stilt, > duly I, I Slid, said eontraets were thereby re- 'imied and set aside. Hit'll, la not linding that the rights of (lie com- lainaiit's predecessors, (lie New York Phonograph oinpuny and the Metropolitan Phonograph Com- "I-'-, P'riaimited with the expiration of the live- u'nils «i'U"ted to Hie New York Phonograph umpaii.v, through John P. Haines, by the agree- eat dated PetH'iiary (!, jSSt), and to the Metro- d.tan Phonograph Company by the agreement tied October 12, ISSS, except as to sudi terms may I'0 luM I-i olonged l.,y the so-ealleil suspension 2012 Su“o5dat thin the State of New York phonographs and supplies therefor hy others than the complainant- herein. 28tit. Tn refusing (o dismiss t he bill of complnint herein, with costs. Boiiinson, Binnuj & Waiid, Solicitors for Defendant, National Phonograph Co. (Endorsed) — U. S. Circuit Court, S. D. of N. Y— N. Y. Phonograph Co., Complt., vs. National Phonograph Co., &c. — Assignments of Error. — Bobinson, Biddle & Ward, Solicitors for Natl. 2016 Phono. Co, No. 79 Wall St, Borough of Man- hattan, New York Oity.-U. S. Circuit Court, Southern District of New York-Piled W 23, 190o. John A. Shields, Clerk. OINCDIT COUNT OF THE UNITED STATES, Soutiiuiin Distiiiot or New Youk, Nkw Youk PriONoniiArii Com¬ pany, Complainant, vs. Tub National Phonogiiaph * Company, Defendant, Impleaded with Thomas a. Edison, Tub Edison Phono- giiapii Company and Tnu Edison Puonooiiapii Woiiks. Know all men hy these presents: That we the National Phonograph Company, as principal,’ and Federal Union Surety Company, ns surety, are held and firmly hound unto the New York Phono¬ graph Company, the complainant above named, in the sum of §250.00, to he paid to said New York Phonograph Company, its certain successors, at¬ torney or attorneys, to which payment, well and truly to be made, we bind ourselves and each of us jointly nml severally, and our and encli of our suc¬ cessors, firmly by these presents. Sealed with our seals and dated the 19th day of May, 1905. Whereas, the above-named defendant National Phonograph Company has taken an appeal to the United States Circuit Court of Appeals for the Second Circuit from a certain order or decree made and entered in the action above entitled by Hut Cir¬ cuit Court of the United States for the Southern District, of New York, on the ltd day of May, 1905. Now, therefore, (lie condition of this obligation is such (lmt if 1 lie; above-named National Phono¬ graph Company shall prosecute said appeal to effect and answer all costs if it shall fail to make good its said appeal; then this obligation shall lie void, otherwise to remain in full force and virtue. [suai„] National Piionooiiapii Co., By W. E. Gilmore, President. Attest: K ik: Ait W. Dennison, Secretary. [seal.] Federal Union Surety Company, By Rorert M. Nun ENT, lies. Vice-President. Attest: F. Stkaiins Kimck, Bos. Asst. Secretary. State or New Youk, 1 County of New York, f ss' : On this IStli day of May, 1905, before me person¬ ally appeared Boiieiit M. Nuoe.nt, Resident Vice- President of the Federal Union Surety Company, with whom I am personal 1; i t<_l ho, being tluli’ morn> sail1 tLat Be resides in the County of New York, State of New York; tiiat lie is the Resident Vice-President of the Federal Union Surety Company, the corporation described in and which executed the within instrument; that ho knows the corporate seal of said Company; that the seal affixed to the Within instrument is such corporate seal; that it was affixed by order of the Board of Directors of said Company, and tiiat he signed said instrument as Resident Vice-President of said Company by like authority; and tlmt the liabilities of said Company do not exceed its assets, as ascertained in the manner provided in Section 3, Chapter 730 of New York Session Laws of 1S93. And the said Robert Jf. Nugent further said that lie is acquainted with F. Stearns Edick, and knows him to he the Resident Assistant Secretary of said Company; that the signature of the said F. Stearns Edick subscribed to the said instrument is in the genuine handwriting of the said F. Stearns Edick, and was thereto subscribed by the like order of the said Board of Directors and in the presence of him, the said Resident Vice-President. [seal.] Cathryn F. Aspell, Notary Public, New York County, Cert, filed in Kings, Queens, Suffolk, Richmond & Westchester Counties. Be it remembered, That at a meeting of the Board of Directors of the Federal Union Surety Company, duly called and held on the 10th day of July, 1901, a quorum being present, the following “Auticle VIII, Suction 1. Tlio President, Vice¬ -President, or Second Vice-President may, from “time to time, appoint Resident Vice-Presidents, “Resident. Assistant Secretaries and Attorneys in “Fact, to represent and act for and on behalf of the "Company, and either the President, Viee-Presi- “dent, Second Vice-President, the Hoard of Diree- “tors or (lie Executive Committee may, at any lime, “remove any such Resident Vice-President, Resi¬ lient Assistant, Secretary, or Attorney in Pact, and “revoke Hie power and authority given him.” “Sue. 3. Resident Vice-Presidents shall have “power and authority to sign and execute on behalf “of the Company, any and all bonds, recognisances, “contracts of indemnity, and other writings ohlig- “ntory in (lie nature thereof, and to hind the Com- “Pnn.v thereby as fully amt to the same extent as “the President could hind it.” “Six. -i. Resident Assistant Secretaries shall “have power and authority to atllx the seal of the “Company to, and attest, on behalf of the Company, “any and all bonds, recognizances, contracts of in- “demnity and other writings obligatory in the “nature thereof, as fully and to the same extent as “tlie Secretary could hind it.” State op Indiana, ) County of Marion, j ,ss' : i, C. R. Hinkle, Assistant Secretary of Hie Fed- kiiai- Union Suiibty Company, do hereby certify that the above and foregoing is a true and correct extract from the By-Laws adopted by the Board of Directors of said Company, at a meeting held on the tenth day of July, 1001, as the same appears upon the records of the Company now in my pos¬ session aud custody as Assistant Secretary. . 1 further certify that in accordance with the pro¬ visions of the foregoing By-Laws the following named persons wore duly appointed in the capaci¬ ties aud on the dates ns respectively shown : As Resident Vice-President at New York, N. Y. appointed February 23d, .1.005: R. M. Nugent. As Resident Assistant Secretaries at New York, N. Y., appointed February 27th, 1005: Sumnuh S. Bowman, F. Steaiins Edick, May e. McCabe, and that such appointments remain unrevoked. In witness whereof, I have hereunto set my hand and affixed tiie seal of said Company at the City of Indianapolis, this 18th day of May, A. D. 1005. tSEAL-] C. R. Hinkle, Assistant Secretary. (Endorsed)— U. S. Circuit Court, South’n Dist. V. — N. Y. Phono Co., Complt., ks. The Nat’J Phono. Co., Deft., Impleaded with Thomas A. Edison cl at.— Bond for Costs — Robinson, Biddle & Ward, Soil’s, for Complt., No. 70 Wall Street, Now York City. — Approved as to form and also as to sufficiency of sure¬ ties, with reservation, however, to the com¬ plainant-appellee of the right at any time to examine the proper officers of the Surety Com¬ pany under oath, touching its assets, liabili¬ ties and financial condition generally.— E. Henry Lacombe, U. S. Circuit Judge.— U. S. Circuit Court, Southern District of New York. —Filed May 31, 1905.— John A. Shields, Clerk. President of Tin: Uxmm Status to tub Ne' York I’noxoaiiAi'ii Company, Greetimi: mi im! hereby died mid iiilnmiiishcil In lie mi iippenr ul. Ilin United Stales Circuit Court of A] prills for lliu Soeotid Circuil, to In; Mil in tli Uniluil Stall's Coiirl and Post Oll'icu Building, ' tin.! Burottgl, of .Mmiliiiiimi and Oily of Now Yorl in i Im SI n In of Now York, williin lliirl.v iln.vs froi H,e "f 'Ills writ, piirsiinnl lo mi apponl'niLKl I llio ofiice of Hie Clerk of Hut Cireuil. Court of Hi United Slides for Hie Southern District of Not York, wherein Hie Niilioniil Phonograph Coiupmi, s Hu; npjiollmil. and you n re appellee or respondent mil then mid lliere show enuse, if tiny there he, wli, lie order or ileeree in the said appeal montionei iliould not ho eorreeled and speedy justice sliouli lot he done to Hie parlies in that hehnlf. Witness the lion. E. Henry Lacombb, Judge o he United States Cireuit Court for the Second Cii :uit, at the City of New York, this 2.‘ld day of May V. D. 1905. J J 13. II. Lacombb, Circuit Judge. Endorsed)— U. S. Circuit Court, Southern Dist •N- V'~N- Y- Phono. Co., Com pit, vs. Tkt Nat’l Pi, ono. Co., Deft., In, pleaded will: 1 homas A. Edison cl a/.-Citation.— Eohiuson Biddle & Ward, Solrs. for Coinplt., No. T£ . St.Ieet: Ne"‘ York City.— Sendee of with in Citation is hereby admitted this 25th day ol May, 1905.— Elisha IC. Camp, Solicitor for Complainant.— U. S. Circuit Court, Southern District of New York.— Piled May 81, 1905.- Jolin A. Shields, Clerk. United States of America, i Southern District of New York, [ ss,: I, John A. Shields, Clerk of the Circuit Court of the United Slates of America, for the Southern Dis¬ trict of Now York in the Second Circuit, do hereby certify that he foregoing pages, numbered from one to 2,020, inclusive, contain a true and complete transcript of (lie record and proceedings had in said Court, in Hie cause entitled National Phonograph Company, Appellant, against The New York Phono¬ graph Company, Appellee, as the same remain of record and on file in my olllce. In testimony whoreor, I have caused the seal of Hie said Court to lie hereunto nfllxcd, at the City of New York, in the Southern District of Now York, in the Second Cireuit, this 7th day of July, in the year of our Lord one thousand nine hundred and live and of (he Independence of the said United States the one hundred and thirtieth. tL' SJ John A. Shields, Clerk. [P7011] United States Circuit Court of Appeals FOR THE SECOND CIRCUIT the NEW YORK PHONOGRAPH. COMPANY Complainant-Appellee THE national phonograph company, ,TC. Defendant-Appellant transcript of record ™ C,“' U»m» States sos Southern District of New York Vol. IV 'l'UO~y a- U3 8S— /foluL,' ( // Uroasui-or’s Roport, N. Y. Co.,, Fob.-Aug,,. 1001, Exhibit No. 2 Ufi. U9-124. Pafehs Read into Testimonv. Agreements: Amlom-N. Y.. Co., Oct;. 22,. 1900; . 70-70 “ “ Nov.; 9;. 1900 . 21-28 “ “ (col¬ lateral) . 79 " Gamp, Nov... 14,. WOO; . . . 82-87 Letters: Easton to Andenr, Septr.-Octr., I000'. . . . 20-31 “ Fob-.-Sopt1., 1001'. ... 82 Camp to Andom, Dec. 2<>; 19001. . 021-0-1- Andom to-Camp; Dec; 22; 1900'. . 01-95 Hicks to-Evaus, July 2, 1901 . 111-112 Minutes: New York Go.-, Oct. 22j WOO . 32; 33 " Nov. 11-,. WOO . ’33 “ Fob, 20, 1901 . 31, 89 May 18, 1001 . 34 Nat. P. Ass’n, Nov. 1..1900.... . 72, 74, 70 “ Sept. HI, 1901 . ’■ ’73 Notices: Y- Co- t0 Phonograph Dealers (1st), Feb. 1, 1901 . 105-100 N. Y. Co. to Phonograph Dealers (2d.), Feb. 11, 1901 . 107^100 H- ,»m. N' Tooi^ l° Stoclt,)oltlbl's' Fob. 25, N. Y. Cb. to Stockholders,. July, 1001'. . 1T2-113 New York Co., Roceipt for Subscrip. tl0DS . 127 A SftmM gintw of Jamaica, m.: The President of the United States of America, To the Honorable the Judges op the Circuit Court of the United States for the South¬ ern District of New York, Greeting: Because it is allegod in the petition of tho Na¬ tional Phonograph Company, vorified by its Presi¬ dent, William E. Gilmore, on tho 2d day of Novem¬ ber, 1005, that tho transcript of tho record and proceedings of tho Circuit Court of tho United States for the Southern District of Now York, in the cause entitled in said Court, whoroin tho Now York Pho¬ nograph Company is complainant and appellee, and the National Phonograph Company respondent and appellant, and now on file in this Court, is incom¬ plete and doos not ornbody tborein tho proofs taken under and in support of the plea contained in tho joint plea and answer in tho abovo entitled cause on file in the Clerk’s ofiico of the above entitled Court, Wo, being willing that such error, if any hath been shown, should be duly corrected and full and speedy justice done to the parties aforesaid in this behalf, Do command you, that you certify and send to this Court on or before the 15th day of November, 1905, a full and complete transcript of all and every part of tho records and proceedings in said cause in said Circuit Court of the United States for the Southern District of Now York, wberoin tho New York Phonograph Company is complainant and ap¬ pellee, and the National Phonograph Company respondent and appellant, remaining on file in tho office of the Clerk of said Circuit Court of the United States for tho Southern District of New York, and not embodied in the transcript of appeal in this cause already filed in this Court, to wit: proofs taken under and in support of the plea con¬ tained in the joint plea and answer in this cause. Witness the Honorable Melville W. Fuller, Chief Justieo of the Supremo Court of tho United Statos, this 3d day of November, 1005, and of tho Independence of the United States 130th. Wji. Parkin’, Cleric of tho United States Circuit [seal,] Court of Appeals for the Second Circuit. I, John A. Shields, Clerk of tho Circuit Court of the Unitod Statos of America for tho Southern Dis¬ trict of Now York, in tho Second Circuit, by virtuo of tho foregoing writ of certiorari for diminution of record, and in obodionco thereto, do hereby certify that tho following pages, numbered from I to 101, inclusive, contain a true and comploto transcript of tho plea, answer and testimony taken thereon and tho opinion of Judge Lacombo on motion for pre¬ liminary injunction in tho causo entitled Now York Phonograph Company, complainant-appcllco, against National Phonograph Company, defendant- appollant, as tho samo remain of record and on filo in said offico. In testimony whereof I havo caused the seal of tho said Court to be hereunto affixed, at the City of Now York, in the Southern District of Now York in tho Second Circuit, this 14th day of November,’ in tho year of our Lord one thousand nine hundred and five, and of the Independence of tho United Statos tho one hundred and thirtieth. r , John A. Shields, [SEAL'] Clock. (Endorsed)— United Statos Circuit Court of Appeals Second Circuit. — Now York PhonograpliCo Complaman -Appellee, vs. National pLuograpi! Co., Respondent-Appellant.— Writ of Certiorari Vanlwl,'?" °f Eecord.— Kobinson. Biddle & Ward, Sols for Appellant, No. 70 Wall Street Boiough of Manhattan, New York City. UNITED STATES CIRCUIT COURT, SOUTH HUN D1STH1CT OF NEW YORK. New York Phosooiiaimi Com- Natiosal Phunouhai’h Com- The plea and answer of tho National Phono¬ graph Company, defendant, to the bill of com¬ plaint of the New York Phonograph Company, complainant. This defendant by protestation not confessing or acknowledging tho matternnd things in and by said bill set forth and alleged to bo true in such manner 3 and form as the samo are thereby and therein set forth and alleged, for plea as to so much of said bill as alleges that tho said bill is exhibited by the complainant named therein, or that the real coni- pl tin „.t therein . i resident of the Southern Dis¬ trict of New York, says: That tho complainants billot complaint was not exhibited by the com¬ plainant nor for the benelit of the complainant, and is not being prosecuted by the coniphuna , b it that the said bill of complaint wusi oxlj. American Gmphophono Company ami the Coin, bin Phonograph Company General, both be fc positions organized under tliu laws of tho State of West Virginia, and both being resident of said Stato, for their oxclusivo benefit, and that tho said suit is being prosecuted solely by them and that they are the only party or parties in any way in- torested in tho prosecution thereof. And this defendant not waiving its said plea, but " lolly relying and insisting thereon for answer to the residue of the complainant’s bill of complaint, not hereinbefore pleaded unto, ortosomuch thereof as this defendant is advised it is material or necessary for it to make answer unto, answering That this defendant admits that It is a corpora¬ tion duly organized and existing under tho laws of the State of New Jersey and having its principal o co nnd place of business in tile Stato of Now, lor- soy, and is a resident of the Statu of Now Jersey, and that some time in tho year eighteen hundred and ninety-four, the North American Phonograph Company, a corporation organized and existing un¬ der he laws of the State of New Jersey, became insolvent; that a bill of complaint was filed in the Court of Chancery of Now Jersey for tho appoint- nont or a receiver for tl.o said North American S:; Co'"P*ny, and that tho said North V nolle, a 1 honograph Company was adjudged in- I- Hi, r !l °f tl,U Sili,‘ Ooil«. John It. IT, mini, Esrp, of tho State of New Jersey, wasduly appointed t^eeeeiver of said corporation in said as siteor Sd rmiP S0l(l "l *nle stieli ■is werfin I ? ,A"1UnUil" 1>llonofe'i'aph Company tint the s l ‘!UU S ilt th° ti,"u (,f Sllil1 Side, and that the said receiver made to this defendant a bill American ,V>0lU0" °f lho assots o[ tl»e said North or the suit/ receiver115 ' C°"11,iUly the“ in ,ho l‘ands And this defendant further answering says, that it denies that it, prior to tile first of July, eighteen 7 hundred and ninety-three, or at any other time, ontorod upon a plan or scheme with the defendants lhomns A. Edison, tho Bdison Phonograph Com¬ pany, tho Edison Phonograph Works, or any / otlior person or persons or corporations, by means / of which the complainant might bo deprived of the enjoyment and profits of any exclusive rights and / privileges owned or claimed by tho complainant, or / for any other similar purpose; but, on the con- | trnry, this defendant states that it was not organ¬ ized until the twenty-seventh day of July, eighteen hundred and ninety-six, and at the time afore- L said had no existence. 8 And tiiis defendant, further answering, says that it doilies that any of the assets of the North Ameri¬ can Phonograph Company, for which a bill of sale was given by tho said John It. Hardin, Receiver, to til isdofendant, were bid for, or purchased, by the said Thomas A. Edison for his benefit, or that the said Thomas A. Edison caused the said bill of sale to be made to this defendant, or that the said bill of sale was made after the money for the said sale had been paid over and filial distribution thereof made by the said Receiver; but, on the contrary, this de¬ fendant says that the said assots for which the bill 9 of sale as aforesaid was made to this defendant by the said Receiver were bid in exclusively for the benefit of this defendant, and tho bill of sale there¬ for was made by the said Receiver to this defend¬ ant at tlie time the money for the said sale was paid over, or secured to be paid, and long before the Until distribution made by the said Receiver. And this defendant, further answering, admits that u bill of sale for the rights, if any, of tho North American Phonograph Company in a number of contracts made by various corporations with the North American Phonograph Company, including 10 the said alleged contracts with the Metropolitan Phonograph Company and John P. Haines, were assigned by the said Receiver to one Frederick P. Olt. And this defendant, further answering, says that it denies that in or about the month of February, eighteen hundred and ninety-six, or at any day after that month it ever caused the Edison Phono¬ graph Works to mannfaettiro any phonographs or supplies embodying the invention and improve¬ ments referred to in complainant’s bill of com¬ plaint, or sold, or caused the same to be sold, ^ -j within tlie Slate of Now York, or sold them else¬ where within the United States with any knowl- • odgo that tlie same were purchased to be sold in the Stato of Now York, or that tills defendant or the other said defendants ever sold or used, or caused to be sold, or caused to bo used within the State of New York, any phonographs or sup¬ plies therefor, or that this defendant ever violated any rights, privileges or property of the said com¬ plainants arising out of any agreement between the said complainant or any of its alleged predecessors with the North American Phonograph Company, or that this defendant over sold or used, or sold to 12 be used, in the State of New York, any phono¬ graphs or supplies in violation of any exclusive lights or privileges of the complainant; but, on the contrary, this defendant says that although tlie complainant has no rights whatever under tlie patents of tlie said Thomas A. Edison or other¬ wise in regard to phonograph supplies thereof, or improvements thereon, or has any exclusive right of any character for tlie use, letting or sale of them, this defendant having its principal office and place of business at AVest Orange, in tlie State of New Jersey, lias always since its incorporation sold and delivered all phonographs, appliances and sup¬ plies therefor, whother covered or not by tlie said 13' patents of Thomas A. Edison, referred to in tho / complainant’s bill of complaint, at its said princi- / pal office at AVest Orange, in the Stato of Now / Jorsoy, and lias never sold said articles elsewhere ' in the United States. And this defendant, further answering, admits that it lias a place of business in the City of New Aork, and a show room there for tho purpose of showing tlie various articles dealt in by it, including phonographs and supplies and appliances therefor, but denies that any sales of such articles ever have boon made by it at any other plnco that its princi¬ pal office at West Orange in tho Stato of New Jersey. And this defendant, further answering, denies that the North American Phonograph Company over owned or controlled any right, title or interest in or to any patents of Thomas A. Edison, apper¬ taining to wlmt is known as the phonograph and speaking phonograph .granted to tho said Thomas A. Edison, or any invention or improvements cov¬ ered thereby or over possessed any solu or exclu¬ sive right to use, or to let or sell to others for use and sale, within tlie United States such inventions, f or ever acquired or possessed tlie right to any in- 15! volitions or improvements made or to be made by tlie said Thomas A. Edison within live years from ■ October twenty-eight, eighteen hundred and eighty-seven, or within fifteen years from August first, cightoen hundred and eighty-eight, upon the phonograph as it existed at said dates, asset out in paragraph one of the complainant’s bill of coin- plaint. This defendant, further answering, denies that such alleged contracts niado by and between tlie North American Phonograph Company and the complainant or its predecessors are now or have 1 0 continued to lie in force since tlio salu of Mienssots of tlio said North American Phonograph Company by tliesaid llncoiver, or that this defendant, either by itself or in co-operation with any person or other corporation, lias ever injured or trespassed upon any rights of thu complainant in said contracts or otherwise, or lias deprived the complainant of any exclusive privileges belonging to it or of any ad¬ vantage or profits to which it is entitled, or that it ever wrongfully or unlawfully did any acts as set out in tliu complainant’s bill of complaint, or sold or caused to be sold or used or causod to be used ]7 or sold to bn used within tlio State of New York any phonographs or supplies therefor embodying tile inventions and improvements ns set out in thu complainant's hill of complaint. And this defendant, further answering, denies that the complainant or tlio Metropolitan Phono¬ graph Company, or tlio Now York Phonograph Company have complied with the terms, require¬ ments and conditions of the said allegod contracts made between the Now York Phonograph Com¬ pany and tlio Metropolitan Phonograph Company and John Haines and thu complainant, or that the said complainant or the said Metropolitan Phono- 18 graph Company or tliesaid Now York Phonograph Company have complied with tlio terms, require¬ ments and conditions of any other contracts by them and by each of them to be complied with in the premises, asset out in the complainant’s bill of complaint. And this defendant, further answering, denies- that the matter in dispute in the said cause exceeds, exclusive of interest and costs, the sum or value of two thousand dollars. And this defendant, further answering, says that it has no knowledge as to whether any agreements or transfers in writing or otherwise were made to which Thomas A. Edison, thu Edison Phonograph 1° Company or tlio Edison Phonograph Works, Jesse II. Jjippincott and thu North American Phono¬ graph Company, or any of them, were parties, as sot out in thu first paragraph of complainant's bill of complaint, or whether thu said Thomas A. Edison owned a majority of thu capital stock of the Edison Phonograph Company and of the Edison Phonograph Works and controlled said two com¬ panies, or either of them, or whether the said Lippincott paid to tlio said Thomas A. Edison any sums of monoy as consideration for any of said allegod transfers or agreements, or whether the 2Q said Thomas A. Edison, Edison Phonograph Com¬ pany, Edison Phonograph Works and Jesse H. Lippincott, have over co-operated to vest any own¬ ership, control or rights in the North American Phonograph Company, as set out in said paragraph of complainant's bill of complaint, or whether the said instruments in writing to wliioh reference is made in said paragraph of the complainant „ bill of complaint, ever existed or were signed or exe¬ cuted by said parties or any of them. And this defendant I tl o c 1 1 t to ke ck proof thereof as it is advised. 21 And this defendant, further answering, says that it lias no knowledge as to whether, on or about the twelfth day of October, eighteen hundred and uighty-oight, or at any other time, the said North American Phonograph Company entered into a con¬ tract ill writing with the Metropolitan Phonograph Company, or whether any such corporation of that name existed at that time, or as to what the con¬ sideration of tlio said alleged contract was, or as to what the terms thereof were, and this defendant leaves the complainant to make such proof thereof as it is advised. And this defendant, further answering, says that 8 it has no knowledge ns to whether, on or nbout the said twelfth day of October, eighteen hundred and eighty-eight, or at any othor lime, .the said alleged y rights claimed to have been granted by the North American Phonograph Company to tho Metro¬ politan Phonograph Company wore extended until the twenty sixth day of March, nineteen hundred nhd three, or for any further "timo, asset out in paragraph three of complainant’s bill of complaint, and this defendant leaves tho complainant to make such proof thereof as it is ndvised. And this defendant, further answering, says that it has no knowledge ns to whether by an instru¬ ment in writing, bearing date tho twelfth day of October, eighteen hundred and eighty-eight, or nt any other date, tho sipd Thomas A. Edison, Edison Phonograph Company, Edison Phonograph Works, North American Phonograph Company and Jesso H. Lippincolt, or any of them, in any respect authorized, ratilied or continued any alleged con¬ tract between the North American Phonograph Company and tho Metropolitan Phonograph Com¬ pany, or gave or executed any guarantees in regard to the same, or undertook to agree to ratify, con¬ firm or respect any such contract, and this defend¬ ant leaves the complainant to mako such proof thereof as it is advised. j And this defendant, further answering, says that I it has no knowledge as to whether, on or about the j sixth day of February, eighteen hundred and ninety-nine, or at any other time, tho said North ithierican'Plionograph Company entered into any contract with one John P. Haines, acting for the New York Phonograph Company, or any othor person or corporation, by the terms of which said contract the said North American Phonograph Company granted any sole and exclusive rights in regard to phonographs and appliances therefor made under the said loiters patent, or otherwise, ‘JO or whether tho said New York Phonograph Com¬ pany is or was a corporation organized under tho laws of the State of New York, or as to what tho terms of said contract were, or whether the alleged contract proforred by tho said set out in tho fifth para¬ graph of complainant’s bill of complaint, and it leaves tho said complainant to make such proof thereof as it is advised. And this defendant, further answering, says that it has no knowledge ns to whether, a_fter_tho ex¬ piration of any term mentioned in said alleged con¬ tract" between tho North American Phonograph g( Company and John P. Haines any rights or privi¬ leges purporting to have been granted and con¬ tinued by tho said contract were extended until the twenty-sixlh day of March, nineteen hundred and three, or for any othor time, and this defendant leaves the o 1 1 ii t to make such proof thoreoi ns it is advised. And this defendant, further answering, sajs that it has no knowledge as to whether the said North American Phonograph Company ccnsen ed to any pretended consolidation of the said Met. o- politan Phonograph Company am the in ul N -w York Phonograph Company into tho c 1 » S^K.1 «»“ o. *>»*■“ corporations devolved upon, b™™^ ,‘t“ wore acquired by tho complainant, i * covered and operated the complainant the.e.irtu covered and territory churned to hate ™,mnrniions nossessed by the said two first named coipo rations, ‘luM A ll co.nph.in ant to make such proof “ And' this* dM^dim^ays that any such protended ■28 consolidation was illegal and void, and that tho complainant has no logal corporate existence, and that any pretended transfer of any rights, interests or properties of either of the said corporations, namely: the Metropolitan Phonograph Company and the New York Phonograph Company to tho complainant, was illegal and unconstitutional, as tending to impair tho obligations of contracts. And tliis defendant, further answering, says that, it lias no knowledge as to whether the com¬ plainant or any of its alleged predecessors, pur¬ suant to the terms of said alleged contracts or other- Q wise, ever ordered any phonographs or supplies therefor from tho North American Phonograph Company, or whether said phonographs and sup¬ plies therefor were of inferior quality, or were un¬ saleable or occasioned any loss to the complainant, or whether the said North American Phonograph Company or the said Thomas A . Edison ever refused to make any attempt to remedy any such alleged defects or to improve the character and quality of - the said products, or to assist the complainant by supplying it with saleable and proper machines and supplies therefor, or whether tho said Thomas A. Edison ever became president or manager of 30 the said North American Phonograph Company as alleged in the eighth paragraph of the complainant’s bill of complaint, and it leaves the complainant to make such proof thereof as it is advised. And this defendant, further answering, says that it has no knowledge as to whether in tho month of July, eighteen hundred and eighty-nine, or at any other time tho said Thomas A. Edison became a stockholder in the North American Pho¬ nograph Company, or thereafter became an ollicer and president of tho North American Phonograph Company, or whether as such stockholder and president he and any other defendants, except this defendant, entered into any plan or scheme to do- 81 prive the complainants of the enjoyment and profits / of anv exclusive) rights or privileges, or whether ( the said Thomas A. Edison caused any .contract to he oxecutuiriietweeii the coniplaina.it and the f North American Phonograph Company, whereby < tllii consolidation of the Metropolitan Phonograph j Company and tho said New York Phonograph , Company to form the complainant corporation was ■ m tilled or confirmed, and any licenses, privi- . leges, rights or other interests alleged to have been v K, -anted by the North American Phonograph Com¬ pany to the predecessors of the complainant were ratiHud or coniirmed. or whether in -such agreement any performance by the parties thereto of the - «*«■ mints of said alleged igreements dated i eb uaty sixth, eighteen hundred and oighty-nine, .in tober twelfth, eighteen hundred and uightj-e.g t, should be waived, or whether during said turn, the said North American Phonograph Company should tv. any sole or exclusive right in regard to lea - imr selling, or otherwise disposing of phonographs „J „cl or act, o! th. >»« >» bill of complaint, and it <■ - , make sucli proof thereof as 12 84 This defondn n I, , further answering, says that the saicl Metropolitan Phonograph Company, John P. Haines, the Now York Phonograph Company and the complainant have, for a long time past, ontiroly ceased to carry on the said business described in the said alleged contracts made between the North American Phonograph Company and them, and have entirely abandoned and relinquished any alleged rights which they or any of them over had under said alleged contracts, and that said alleged contracts, if having any legal olToct what¬ soever, wore simply agency contracts for the sale gjj and lease of tho said articles described thorcin in such parts of tho State of Now York, asjiro, re¬ ferred to respectively in said pon tracts, 'and that upon the insolvency of the said North American Phonograph Company and the appointment of a Receiver thereof, the said contracts wore rescinded and abrogated, and the only rights, if any, of the said parties to the said contract then became claims for damages to be presented to the said Receiver. And this defendant prays to be lionco dismissed, with its costs and charges in this behalf most wrongfully sustained. 80 Roiiinson, Biddle & Waud, Solicitors for Defendant Nat. Phonograph Co. Howaud W. Hay us, W. Hayus, Of Counsel. UNITED STATES CIRCUIT COURT, 37 SouriiEiiN Distiiiot of New Yoiik. Nkw Yoiik Piionoguai'h Com- Complainan t, (ujaiiisl National Piionooiiaimi Com- I’ANY, Impleaded, &o., Defendant. Aimmjauanoes : Louts Hicks and Elisha K Cure the Complainant. ‘ ' ’ Es(ls’> for ^ Howaud W. Hayes, Esq., for tho Defendant. Direct examination by Mr. Hayes : ocmi'natbnV^t101 ,*’;.I,leaso ^ ** i™' residence and occupation? A. I live atBloomtield, New Jersey • I am Secretary of the Now York Phonograph Com- Associa“?omeCretfU'y °f ^ Nuti°"al P)*°nograph 14 40 Q. 2. Wore you atone time connected with the Ohio Phonograph Company? A. I was. Q. 8. In what capacity? A. I was President of tlio Ohio Phonograph Company. Q. 4. flow long did you occupy that position? A. From 1800 to 1807. Q. fi. Did the Ohio Phonograph Company go into tlm hands of a receiver? A. Yes, sir. Q. 0. Were you receiver of the company? A. 1 was appointed receiver of the company ; yes, sir. .. Q- y- About wlien were you appointed rece’ivor of the Ohio Phonograph Company? A. 1 will give yon tile date (referring to memorandum book). 41 I object to that on the ground that it is immaterial, irrelevant and incom¬ petent. The Wiliuutx: It was May, 1807. I don’t remember tlieday of the month. Q. 8. What was the result of tho receivership of that company? A. The assets and property and good will and business of tho company and all its rights of whatever kind and nature were sold bv mn as receiver. Q. 0. About when did this sale take placo? Same objection noted on behalf of complain- ant to all of this testimony. ‘ 42 A. Well the sale was in 1897. I must have been appointed receiver about January. I will correct that; about May, 1897, was the sale. turn 10'i 'H"1 t<,>."’llom "'ero tllese ai*et« and other , fcs ,lboilt w“,cl‘ you have spoken sold? A I Ohio Phono <1Ut l‘S 1,0,18 M0"’' Thu of the Ohio I ho lograph was sold by the receiver May 2* 1897, to the Edison Phonograph Company of In’ dmmipolis, Indiana. J Q. 11. Was the Edison Piionogrnph Company of which you have spoken a copartnership or a cor point, on? A. No, it was not incorporated. IB Q- 18. Who was tlie Edison Phonograph Com- 43 pany then? A. The Edison Phonograph Company t Indianapolis, Indiana, tho business done there under that name was done by me. Q. 18. And after this sale of tho assets and other property of tho Ohio Phonograph Company, of which you have spoken, to the Edison Piionogrnph Company the business carried on by you, what was done with those assets and other property? A. llie business was continued in Cincinnati, Ohio, puny1' Ul° mUne °f thL> Etlison Phonograph Com- Q. 14. I understand, then, that after the sale the business of tho Edison Piionogrnph Company was 44 transferred from Indianapolis to Cincinnati and there carried on by you ; is that right? A. No, it was not transferred ; business was carried on still at Indianapolis, Indiana, and also at Cincinnati Ohio, under tho name of tho Edison Phonograph * Company. Q. IB. How long did you carry on in Cincinnati f tins business under tho name of the Edison Phono¬ graph Company after this sale? A. Until after tho middle of June, 1900. Q. 10. I understand that this business carried on under the name of the Edison Phonograph Com- 4B pany in Cinicmiati was a business owned by you in which you used this trade name, the Edison Phonograph Company, is that right? A. That is right. Q. 17. You speak of a National Phonograph Company Association; is that right? A. National Phonograph Association. Q. 18. Please stato what that Association is? A. The National Piionogrnph Association is an asso¬ ciation of officers of the local phonograph com¬ panies covering the territory of the United States which were doing business in different parts of the 10 40 United States, and it had its first mooting in Chicago in the year 1800, about September. Q. 10. Ploase stato in a general way tlio objoet of tlio Association and what lias boon dono by it sinco that time? A. Tlio Association was organ¬ ized for the purpose of bringing together tlio offi¬ cers representing tlio local phonograph companies through the United States for the purpose of dis¬ cussing tlio best methods for carrying on their business, tlio best methods of protecting their ex¬ clusive rights to the rental andsaluof phonographs and grnphophonos throughout the United States, 47 !Uld Xor tho general good of the talking machine business. Q. 20. Did that Association have any mooting after you discontinued doing business under tlio name of tho Edison Phonograph Company? A. It had a meeting in Cincinnati, Ohio, on tlio 2fith of September, 1000. Q. 21. If j„,i can remember, who was present at that meeting? Pleaso give their names? A. Tho meeting held in Cincinnati by the National Phono¬ graph Association on tho 215th of September, 1000, was tlio fifth annual convention of that Associ¬ ation. Tho mooting was called by the Executive 48 Committee, consisting of Henry D. Goodwin, Chairman, August N. Sampson, Thomas G’onyng- ton, J. C. Wood and A. W. Clancy; tho call was signed also by .James L. Andem, Secretary I he call stated that tho object of the meeting was ‘ to consider tho present condition of tlio local phonograph companies’ contracts terminat- mg Jiarcli_J0,JJ303, and the best method of enforcing tlio same.” Representatives from various companies were present, all of them having been notified to attend by mo as secretary, and a largo number of letters were received from those mem¬ bers who were unable to bo present in person. Tho repdrt of the proceedings shows exactly who was peraonS’-T1 W°Pi,nem°ly 1 re°nI1 the Phono!,',, n ° an“y’ Pre8idont of tll<3 Missouri 1 Monograph Company; Mr. Janies C. Wood a SermSrc | T?e, M,r T' PllonoSniPh Company; p, ' R- G- Kinkead, President of the Kentuoky 1 honograph Company; Mr. B. D. Easton Presf dent of the Columbia Phonograph Company; Mr. PllnnnKaP ,,U nSt0Ckh0lael' antl ,neiriber °X the Ohio Phonograph Company; Mr. W. J. Overbeck, stock- holder of the Ohio Phonograph Company; Mr. R. P. Croinelin, member of the board of directors of Lvl n/'ni1 Ph0,1°”nil)h Co»nPany ; Mr. M. B. , a 8touklloIder> 1 understand, of S Pb,“ii °IIOf 1,11 Company ; Mr. James L. , '„ rea' tlle 0hio Hwnoampli Com- P l y, n"d S0lnQ other inembors of the Ohio Phono graph Company, as stockholders, whose names I f,,rn“h« ll,lt d0 not now recall. Those are all I lomember as present, although I think there «eio somo others. I could give the names of when 1 refer to the record. Q. 22. This meeting took place where? A. It took place at tho Burnet House, Cincinnati, Ohio September 215, 1000. Q. 23. You have referred to this meeting as the fifth annual meeting. Do I uuderst 1 that tl first, annual meeting took place in 1800, is that right? A. That is right; yes, sir. Q. 24. Do you know during what years meetings of this association have taken place, and if so please statu? A. I recall the firstjnegtjng at Chi¬ cago in JLS1HL; the second meoting, jn New York City, in 1801; the third meeting, I think in Chi¬ cago in 3802; and I am sure the fourth meeting occurred in Chicago in 1803, because it occurred at the time of the Chicago World’s Fair. There was another meeting called for New York City, which 18 fia JL'l'ist lmve boon in 1801, but 1 do not understand there was a quorum present; nt least the printed proceedings have never been brought to my notice; nnd the liftli mooting occurred in Cincinnati at the time slated, in 1000. Q. 25. By whom was this liftli meeting in Cin¬ cinnati called? A. I have already given the names of tho executive committee. I will repeat them if you want them. They wore called by tho executive committee of tho National Phonograph Associa- tion, whose names I have already given. Q. 20. Who sent out tho notices of the meeting, 53 if you know? A. I did, as secretary. Q. 27. By whom wore you directed to send out those notices? A. By the executive committee of tiio National Phonograph Association. Q. 28. What momber or members of tho com- mitteo directed you to send out the notices? A 1 lmvu letters from all of them directing me to do so but especially from Major A. W. Clancy, of Chi’ cago, who had always acted as president of tho association at all former mootings. Q. 29 llow did it happen, If you know, that after all these years, during which no meeting was called, this meeting happened to be called at this 04 time? Complainant makes tho same objection to this testimony in regard to the National Pho- , JJbgraph Association as heretofore made. A. The liftli annual convention was called as tho result of a long cc pondence, whiol s od cm for two or more years, between the olllcers of tho local phonograph companies in tlioir efforts to take some action to assert their territorial rights under their contracts, and tho result of this correspond¬ ence finally |(!,i tll, to mi agreement that they would meet if a convention would be called to discuss the matter as stated in their call. t*'IS correspondence that you speak ,~ of had with you? A. £ Participated in iUery gen- Q. 81. With whom did you correspond? A I cCiiTesponded with uj.llWlicers of the local pl“ Q. 32. \ VI, ere are thcHStto^ that you received from the officers of tho various local phonograph companies? A. They are in my possession .-ft m" homo, at my house. y Q. 83. At your residence in New Jersey? A At my residence; yes. * Q. 84. Bid Mr. Edward B. Easton participate in at correspondence? A. He did not partiepate in fil tl C 1 t 1 co c ! 01 k ee, but tho first letter that I received from Mr. Easton on the subject of a convention is one I have here— it is dated Septem- ber (5, 1900, and was in response to a printed copy of the call for the liftli annual convention which I laid sent to him sometime in August. Q. 85. Bid you have any correspondence with Mr. Easton until after the call was issued? A. I did not. Mr. Easton had nothing to do with the getting up of tlie call of the convention at all. He was in Europe at the time. Q. 30. Bid you have any correspondence with r.7 any other oliicer of the American Grnphophone Company or the Columbia Phonograph Company in regard to this meeting before the call of the meeting? A. With no one. Q. 37. How did it happen that you did not cor- rospondend with the Columbia Phonograph Com¬ pany while you say you corresponded with the other sub-companies? A. The Columbia Pho¬ nograph Company I know was in active business j nnd whenever we got a convention together they ! would be likely to respond, I knew their address j and knew they were interested in the subject. ‘ " ( 20 iSKstf among tlio mom bum wl,„ ,', ' i'8 '‘'‘‘I N™ v;n',:ap!,",g ll!,'V°" l,t,eM Se°™‘«ry Of the -1-tea 1 *«« C-mnpa„y 0I1 tb, ooth ()f a. i oxpM!°ii?,vim,si5i’j iir llr crim,iy? o» the 4th „f iWrtmry ifj!, , , L ' b°(lul for the your 1002, ami T am aim,, l . " 0,'g,l,lizu(1 "'trover until my successor is'.TT^'7 hold- Q. 41. Can you L! (, hoard ? A.TheJ, ' LS of tl'o l't cut ■» «m or z SToS; : tn,rs- « t,ioy woro elected at Tarrvtmv,, v nu«IM!l|i Company, Webb, William Fahnestock °'o ’’ Su"'m'd Heibert Johnston, p g Smi’ii, I Jjolmi0> J- Q’TUrM- JnM,L‘8 L‘ A„- was. 42‘ WW> y°" 1,PB8Bnt «t that election? A. I of the 'people that weru elec,!!]0.! ° " u,’u t,ll° na,,l«s 110 one else was elected? , f"stuos" md that book here which shows it' l!!lvu ,,ly «oord . 21 York phonograph Company and hands the 01 aanio to Mr. Hayes.) Please read to the Examiner the record of A n S" v ting v'T"8 thu cletniIs of the option ? Jfiiin ? "',,s Uillled on notice pub- 1 shed in the lnrrytown Argus signed by James L. Andom, Secretary. Tho meeting was called to older and the annual report of the President was 02 read; and Henry C. Gridin and M. D. Raymond were chosen inspectors to receive and count the votes for trustees for the ensuing year and they reported that a, 044 votes had been cast, all of w-n'-1 " er for tho r°llo"'i"ff : W. Seward Webb, William l'ahnestock, F. G. Bourne, J. Herbert Johnston, F. S. Smithers, James L. Ande.n and H. M. 1 unston, and they were thereupon declared unanimously elected trustees for the ensuing year. Do you want tlio names of the stockholders who voted by proxy? Q. 40. Yes. A. Tho stockholders not present who voted by proxy wore D. F. Lewis, J. Freder- ick Kernoclmn, William N. Peak, A. B. Shepard William Fahnestock, J. Herbert Johnston, F. o' Matthiesen, executor, F. G. Bowne, Martin Sclireu- kiesen, Jr., executor, F. S. Smithers, John P. Haines, H. M. Funston, Fahnestock & Co., J. A. F. W. and C. B. Gunther and John P. Haines’ executor of the estate of R. T. Haines. Then fol¬ lows the sworn certificate of the inspectors as a part of the record and the meeting was then de¬ clared adjourned. Q. 47. Does the book which you have before you 22 01 “w! A- “ to-- Q. 48. Do you know whether or not Edward D Enston is u stockholder of the Now York Phono’ graph Company? A. I don’t think he is. 1 h,ivo .I.?'01 !ll‘.y kH0«’l‘!‘,gif or information that ho o' „ u"k 0“M Si,-V- I'°»itivo!y, that he is not. was not " ilS 10 ,U'<,S0'lt “t tlli!‘ ""-‘oting? A. He Q. BO. You were there? A. I was there. Q- r,h \0 u know Mr. Easton so you would know whether he had been there or not. A. Yes I Z (JO Positively that ho was not present. .. thu *««*»" Gruphophonu Company s ockliolder ,n the New York Phouogmph Co nl Pim> A. I should say not. I never Imd any in formation of the fact that they were ii.nti.tt ,ot ..iyk..o.-i,lle„„mi EE number of stockholders who mu t bo ' A1 AHielel'l” si' iT n‘g U°"Stitl,to 11 quorum? A. At tide II., Stockholders, Section I: “Thoreiru paper published in the Village of Tarrytown. Sec¬ tion XI. : I he election of trustees at the stockhold¬ ers meetings shall be managed by two inspectors, who need not bo stockholders, and must not bo trustees of the company.” There is no provision in regard to a quorum at the stockholders’ meeting. By Mr. Hides : Q. BO. Have you looked through the by-laws? A. Yes. The by-laws state that what shall be a quorum of the board of directors, the only provi¬ sion of tlio by-laws in regard to a quorum is that in regard to tho meeting of the board of directors or trustees. By Mr. Hayes : Q. 157. When were you elected a trustee of the Now York Phonograph Company? (Witness refers to book.) A. February 20, 1001. Q. (58. Was that at tho annual mooting, or did you till a vacancy? A. It was to (ill a vacancy. Q. BO. Will you please turn to the minute book and state in general terms the action of the board ? A. At that date? Q. 00. At that date, yes? (Witness refers tn minute book of tho Nmv York Phonograph Company.) A. I was mistaken tliore. I was elected at the regular mooting, February (5, 1001. I got the two dates confused. Q. 01 . Who else were elected as trustees on that same day? A. Annual election, February (5, 1001, at Tarrytown, elected the following trustees for tlio' ensuing year: II. M. Funston, Scott Tremaine. L. E. Evans, J. L. Andoin, T. C. Powell, Joseph F. McCoy, William Haliief. . Q. 02. How many votes were cast? A. In 1001? J3. 03. For r oM&) those trustees lit tlmt meeting? A. Q. 04. Mow many shares of stock outstanding are tliero in tlio Now York Phonograph Company, if you know? A. It is a matter Mmvo not dolinito information about, as the treasurer 1ms those books in his possession. \ Q. 00. Who is tlio treasurer? A. Mr. Scott Tro- maine. I Q. 00. Ho is tlio treasurer elected at this moot- / ingin 1000? A. 1001. Q. 07. No treasurer has since been elected? A. The new board has boon elected, but has not yet organized. Q- 08. Do you know what the total authorized capital of the corporation is? A. I am not posi¬ tive at present. I can toll by referring to the, records. Q. 00. You have not possession of the stock book and other books showing theso facts? A. No, not at present. Q. 70. Were you prosont at this meeting in 1001 nt which you wore elected a trustee? A. I was. Q. 71. Have you a contract with the New York Phonograph Company in relation to this present suit? A. I have. Q. 72. Will you please produce it? A. I pro¬ duce it;. (Witness produces contract.) Q. 7.1. Please road this contract to the Examiner, ii/r. Jlickn : I object to it upon tlio ground that it is irrelevant, immaterial and incompe¬ tent. A. The following is the contract: j “THIS AGREEMENT, made this 9th day of November, 1000 by and between tlio Nkw York Piionooiiahi Company, of the City and State of 1 Now Yol'k. l’nrty of the first part, and James L. Andem, of Cincinnati, Ohio, party of the second part, WITNESSETH : 78 “ That the party of the first part having hereto¬ fore purchased and acquired the exclusive fran¬ chise for the sale of phonographs, graphophones and supplies within the territory covered by its con¬ tract or contracts with the North American Phono¬ graph Company, which contract has been violated by Thomas A. Edison, The Edison Phonograph Company, The Edison Phonograph Works, The National Phonograph Company, The American Cfrnphophone Company, The Columbia Phono¬ graph Company, and others, desires to enforce its rights under said franchises and contracts and to recover from the parties who may have violated the same the profits and damages resulting there¬ from, by such suit or suits at law, or by such com¬ promise or settlement as to the party of the second part acting under the advice of counsel, may seem 'most advantageous. “ It is therefore agreed by the party of the first part that said party of the second part shall have exclusive right to prosecute, compromise and settle any and all said suits, claims and demands for and on its behalf, in order to recover said profits and damages, and to enforce said rights, or to adjust the same by such compromise or settlement as to 75 the party of the second part, acting under the ad¬ vice of counsel, may seem most advantageous. “ It is further agreed by the party of the first part that tlio party of the second part shall receive and retain for his full compensation for said ser¬ vices and disbursements a sum of any and all moneys from any and all of said prosecution, compromise, settlement and adjust¬ ment of the rights, claims and demands of the party of the first part as herein provided for. “ It is further agreed that tho party of the first .part shall not be called upon at any time to pay., any costs or charges incurred in any proceedings that may bo instituted by tho said party of tho second part to recover said damage. “ it is farther agreed that the party of tho sec¬ ond part is hereby fully authorized and empowered to collect and receive on behalf of the party of the first part any moneys that may be colloctod on be¬ half of tho party of the first part by reason of tho prosecution, compromise, settlement and adjust¬ ment of the rights, claims and domaads of tho party of the first part by tho party of tho second part as herein provided for. “It is further agreed that upon tho filing of the suits heroin provided for, and during tho prose¬ cution of the sumo, tho party of tho first part will furnish such documentary and other proofs, contracts and arguments and sign such papers as may bo required and as may bo necessary for tho usu of tho party of the second part, including tho use of its corporate name, and will not, during the prosecution of any suit or within one year from the date of this agreement, without the written consent of the party of the second part, abandon, compromise, settle or adjust said rights, claims, demands or suits against said persons or any one or more of them, or recall or revoke any of tile conditions of this contract. “The said party of thu first- part hereby con¬ stitutes and appoints said party of tho second part as its true and lawful attorney with full power and authority to perform any and all things for and in its behalf that may be necessary to carry out this agreement as if the party of tho first part were per¬ sonally present. “In witness whereof, tho said party of tho first part, by its President and Secretary duly author- 27 i/.ed by its Board of Directors and the party of the 70 second part, have hereunto set their hands this ninth (9th) day of November, 1000. New Yoiik Pjionoouaph Co., H. M. Funston, President, Party of the First Part, .Jamus L. Andem, [seal.] Party of the Second Part. Signed, Sealed nnd Delivered ) in the presence of j The words “ nnd sign such papers as may be re¬ quired and” and “against” and “or contracts” 80 inserted before execution. Louts Htoks, As to Mr. Andem. (seal ok n. y. Attest: i-iioNOOKAi'H oo.) Scott Teem a in, Secretary. State and County of New York, ss. : “ On this Oth day of November, 1000, before me personally appeared Soott Tbemain, to me per¬ sonally known, who being by me personally sworn, said : That he is the Secretary of the New York gl Phonograph Company, one of the parties described in and which executed the foregoing instrument; that he knows the corporate seal of the said com¬ pany ; that the seal affixed to the within instru¬ ment is the corporate seal of said company and was affixed thereto by order of the Board of Directors of the said company ; and that he signed his name thereto by the like order as Secretary of the said Company. That the said Scott Tremain further said that he was acquainted with H. M. Funston, and knew him to be the President of said Company ; that the name of said H, M. Funston, President, 28 52 subscribed to the said instrument is in tiiu genuine lmtid writing of the said H. M. Funston and was tlieroto suliserilied by order of the said Hoard of Directors; and that said instrument was signed and sealed in behalf of said company by authority of its Hoard of Directors, and said Secretary ac¬ knowledged said instrument to be the free net and deed of said company. “ David 0. Rom:, Notary Public, [ska I/.] Kings Co. Certificate filed in N. Y. Co.” Q. 7!i. That contract bears date tlio Oth day of November, 1000; at what date was it actually ex¬ ecuted? A. At that date. Q. 74. You were subpeunaed to produce loiters received by you and the New York Phonograph Company from Edward D. Easton, the Amuricnn Graphophoue Company and the Columbia Phono¬ graph Company general. Have you those letters? A. There are no letters ; uo letters were ever re¬ ceived by tlio Nuw York Phonograph Company from either of tlio parties mentioned, but I myself produce all of tlio correspondence received by me 84 from Edward D. Easton, President of the Columbia Phonograph Company. Q. 75. Did you receive any letters from the American Graphophoue Company or Columbia Phonograph Company general? A. 1 received no letters whatever from oitherof those parties except those 1 gave you. Q. 70. When you say that the New York Phono¬ graph Company lias received no letters from Mr. Easton or the American Graphophoue or the Columbia Phonograph Company general, you mean, of course, that none have been received of which you have any knowledge? A. None have been re¬ ceived of which I have any knowledge; ns secre¬ tary I have the custody of all the correspondence of tlio company. It is put in my possession. Q. 77. Will you please read to the Examiner the letters which you have produced? Mr. Hides: I object to these letters ns im¬ material, irrevelant and incompetent. A. I received tlio following letters: “ Comjmwa Pjionoouai’h Company, “ 185 & 187 Broadway, “New Yoiik Cm-, Sept. 5th, 1000. “ Mr. James L. Andem, Race St. find Arcade, “Cincinnati, O. “Deak Silt: “Will you kindly send ine as many copies as you can spare of the call for the Phonograph Convention, together with a memorandum of ex¬ pense. “ Yours truly, “ E. D. Easton.” “Cor.u.MiitA Phonograph Company, “ 135 & 137 Broadway, “New York City, Sept. 10, 1900. “Mr. Jas. L. Andem, “ Race St. and Arcade, “Cincinnati, Ohio. “ Deak Sir: “Thank you very much for yours of September 7th with copies of the call for the Phonograph convention. “The Columbia Company hopes to be well represented. - “ Yours very truly, : “E. D. Easton.” 88 ‘‘Coi.umiiia Phonograph Company, “1813 & 137 Broad way, “New Youk City, Sept. 15th, 1000. “ Mr. James L. Andkm, “ Race St. & Arcade, .... ,, “ Cincinnati, Ohio. “ Dear Sue : “ 1,1 r°Ply to yours of September 13th, our party expects to leave Now York at 2 p. m“ via the Pennsylvania Railroad on September 2‘lth, and will go to the meeting plane immediately upon the ar¬ rival of the train in Cincinnati. ,o “ Yours "“iy. “ E. D. Easton.” “ Comj.miua Phonograph Company, “ 1815 & 137 Broadway, “Nuw Youk City, Supt. 22, 1000. “ Mr. Jamks L. Anbu.m, ‘‘Race Street and Arcade, (IT, „ “Cincinnati, Ohio. “Dear Sin: , “P^r Chicngq otlice is inquiring about special lates to the Phonograph convention. If yon can put them on the track of this, kindly wire Columbia 3 J’],0,1°S1‘,P1> Company, 88 Wabash Ave, Chicago, Ills, on Monday, giving details. “ Yours truly, “E. D. Easton, President.'” “Coi.umiiia Phonograph Company “130 & 137 Broadway, .. ,r _ N,sw York City, Sept. 24, 1000. Mr. Jamks L. Andem. “ Race St. and Arcade, „n „ “Cincinnati, Ohio. Dear. Sir : “ Mr. V. II. Emerson asks me to bring to the n,t- 31 tontion of the proper authorities the propriety of a resolution of regret for the death of Mr. George Tewksbury which occurred recently and I put the matter in this form so it shall not be overlooked. “Yours very truly, “E. D. Easton.” “Coi.umiiia Piionoouapii Company, “ 135 & 137 Broadway. “ New York City, Oct. 5, 1000. “Mr. James L. Ande.m, “ Race St. & Arcade, 02 “Cincinnati, Ohio. “ Dear Mr. Andkm: “I have yours of October 3d and shall be glad to meet with the Committee at the earliest con- 'vonieiit'diite! I expeot to be hero right along for the presunt and can take up the matter at any time. “ Yours very truly, • “ E. D. Easton.” “Coi.umiiia Piionoouapii Company, 03 “ 135 & 137 Broadway, “New York City, Oct. 10th, 1000. “ Mr. James L. Andkm, “ Race St. and Arcade, “ Cincinnati, Ohio. “Dear Mr. Andkm, “I have yours of October 8th, and am glad to note that the Committee will meet ill New York about the 15th of October. “ Yours very truly, “E. D. Easton.” 1 “Columiua Phonograph Company, “ 135 & 137 J3 roadway, "Nkw York City, Kelt. 2, 1001. “Mr. Jamks L. And km, “ Unco Street & Arcade, “ Cincinnati, Ohio. “ Dkau Silt: “Thank you for yours of January 31st, which will bo given prompt attention. “ Yonrs truly, “E, D. Easton.” “Comj.miiia Phonograph Company, “ 135 & 1H7 Broadway, “Nuw York City, September 17, 1001. “ Mr. Jam us L. An hum, “ Secretary, National Phonograph Ass’n, “ Park ltow Building, N. Y. City. “Dkau Snt: "I have yours of September Kith, and regret that owing to engagements of more than ordinary importance, 1 cannot attend the meeting, on the ISth. Shall be glad to hear what is done. “ Yours truly, “E. D. Easton.” Q. 78. Is there any record in tho minute-book of the company, the New York Phonograph Company, in regard to the contract entered into between you and that company in regard to this suit? A. There is. Q. 79. Please turn to that and read it to the Examiner ? A. There are two entries here, the first one under the date p.fOotobur._22, 1900. A special meeting of the Now York Phonograph Company, held at the office of tile company, at 253 Broad¬ way, October 7, 1900, pursuant to notice. Present: S. F. Noyes, H. M, Fniiston, L. E. Evans, Scott 97 I'reniain * * * contract relating to proseoution of suit was submitted by Mr. Tromain wherein Mr. .1. L. Andom of Cincinnati, Ohio, agrees to prosecute without costs to the company. On motion it was resolved that the officers of this company are hereby authorized and empowered to execute and deliver to Mr. James L. Andem, of Cincinnati, Ohio, the contract now submitted, bear¬ ing date Oetober22, 1900, whereby lie is empowered to commonce and prosecute suits on behalf of this company against any and all parties infringing on tho territory of this company. * * * On motion, resolved, that a copy of the resolu- 98 tions adopted at Cincinnati, Ohio, of September 25, 1900, by the fifth annual convention of the National Phonograph Association be spread upon the minutes and the printed copy follows. The meeting then adjourned. Another, meeting in regard to the contract was hold on tho 11th of November, 1900, at the office of the company, 253 Broadway. Present: Messrs. Eunston, Evans, Treinain and Noyes. * * * It was, on motion, resolved that the contract or agreement as made with Mr. James L. Andem of Cincinnati, Ohio, bearing the date of October 22, 09 1900, and relating to the prosecution of suits, and which was approved at a special meeting of the board of trustees held at this oflice October 22, 1900, be now cancelled and destroyed by roason of there being an omission therein, and that the new contract in lieu thereof, together with a collateral agreement, as made witli said Mr. James L. Andom, of Cincinnati, Ohio, and hearing date, re¬ spectively, November 9, 1900, and duly approved by the executive committee and executed by the officers of the company, be now approved, and copies of each agreement be placed on file. On 100 motion tlio mooting adjourned. Scott Trenmin, Secretary. Q. SO. is thuro nny other ruferenco -to this con- tract or this suit in tho minutes? A. Nothing, oxoept that at subseipioutdnius, from time to time, tile minute hook shows that Mr. Amlem reported progross being miulo in the legal proceedings that had been instituted under the contract referred to. Q. 81. Please road these references to tho Ex- nminor? A. Under the dnto or February 20, 1001 : “ Mr. Amlem repeated that legal proceedings liad been instituted in the Circuit Court of tho Unituil 101 Slides for tlie Southern District of Now York on behalf of this company against Thomas A. Edison, Tlio Edison Phonograph Company, Tho Edison Phonograph Works and The National Phonograph Company for an injunction and for dnmngus and profits for violation of its contract rights, and tlio same wore being vigorously pressed. Under date of May 18, 1001, I had another ref¬ erence in the minutes- to tho prosecution of those suits as follows: Mr. Evans reported to tlio board as to tlio slow progress being made in the suits now pending against various phonograph and supply dealers in this territory, and the necessity of their 102 being looked after more thoroughly. Therefore, it was on motion duly seconded and carried, re¬ solved that the vice-president of this company bo, and he is hereby, authorized and empowered to employ, on behalf of tile company, a capable attorney for the purpose of supervising tho con¬ duct of the aforesaid mentioned suits now ponding against the following parties: S. B. Davegn, John S. Jones, Douglas & Co., Foote, Pierson & Co. and A. D. Matthews & Sons, and for such otlior legal business as may affect tho welfare of tlio company,” That isall I find in tho way of entries on that point. Q. 82. Have you in your possession any contract ' between the Now York Phonograph Company and either Edward D. Easton, the American Grnphn- phono Company, or the Columbia Phonograph Company general ? A . I have not. I do not think there are any such contracts. I never have seen or heard of them. Q. 88. Have you made any written contract yourself with either Edward D. Easton, the Amoricaii Graphophone Company,- or the Colum¬ bia Phonograph Company general in regard to th eso suits? A. I have not. Q. 88. Have you any contract with any one in any way connected with Edward D. Easton, the American Grnphophono Company or the Columbia Phonograph Company general in regard to these suits? A. I have made no contract whatever ex¬ cepting with tlio New York Phonograph Company and with tlio counsel who aro prosecuting these suits. Q. 84. What counsel aro proseoutiug these suits? A. Mr. Elisha K. Ciunp, New York City, and Mr. Louis Hickq. Q. 85. Is Mr. Camp in the office or associated with Philip Mauro, general counsel of the American Graphophone Company? A. I do not know. Cross-examination by j\fr. flicks: x-Q. 80. Do you know who was employed by the New York Phonograph Company under the reso¬ lution, adopted May 18, 1001, to supervise the con¬ duct of the suits against Davega, Jones, Douglas & Co., Foote, Pierson & Co., and Matthews & Sons? A. Yes, Mr. Louis Hicks. x-Q. 87. Do you know whether those suits against those defendants were began and have been con¬ ducted solely by said counsel mentioned by you? A. They have been wholly. 33 100 x-Q. 88. With reference to the contract, dated November 9, 1900, between you and tlio Now York Phonograph Company which has boon oiTerud in evidence on defendant's belialf, did you have tiny negotiations with tlio oliicors of tlio Now York Phonograph Company prior to tlio making of that contract? A. Yes, tlio negotiation Hint led up to tlio contract. x-Q. 89. Did the American Ciruphophonu Com¬ pany or tlio Columbia Phonograph Company, or tlio Columbia Phonograph Company goneral or lid ward D. Easton take any part in those nogotia- 107 N011° whatever. x-Q. 90. Was tlio contract drawn by any attor¬ ney? A. It was. x-Q. 91. By whom? A. By Louis Hicks. (Signed) JamhsL, An ohm. Adjournod to a dato to bo agreed upon. Nnw Yoiik, March 12tli, 1902. Afet pursuant to adjournnieut. 108 Present— Counsel as before. JAMES L. ANDEM, re-called for further cross- examination : Cross-examination continued by Mr. Camp : x-Q. 92. Mr. A ndem, lias the present board of oflicers of the Now York Phonograph Company been organized or not? A. It has been organized since I gave my last deposition. x-Q. 93. State who the oflicers at present are? A. The oflicers at present are John P. Haines, President; H. M. Punston, Vice-President; VViTi- 37 iiun Fahnestock. . 'Ihensii re r ; _ Jam es L. Andem, lon Secretary ; and an executive committee' composed ofThreo" members, William Fahnestock. II. M. • Funston and James L. Andem. x-Q. 9-1. Have any changes been made in the board of directors? A. Yes, there was a now - Board elected, as I explained in my deposition on the 4th of February of this year. x-Q. 9fi. I mean since then? A. Yes, there was a change in the board owing to the resignation of Mr. F,S. Smithers, and the election of Mr. John P. Haines tcTfill jlTo .vacancy. ~ x-Q. 90. Wiiat action, if any, have the stock- ]1C holders in the New York Phonograph Company taken in rognrd to this suit? A. They have con¬ tributed prorata towards tlio oxpenses of the suit. x-Q. 97. Can you state who have contributed? A. I have a particular list of stockholders in my memorandum book who have contributed to the fund. I should suppose there were about fifl or 00 names here. x-Q. 98. You might read some of them? A.’ Among the contributors to the fund I find the * names of : P. S. Smithers, J. Herbert Johnston, Fahnestock & Co., W. Seward Webb, F. Gr. Bourne, VV. A. Slater, II. Van R. Kennedy, John P. Haines, Mrs. 11:1 If. S. Buukhnm, Estate of J. M. Constable, W. H. Doubleday, Lounsberry & Co., C. C. Cuyler, E. L. Keyes, J. Brooks, L. P. Miller, C. J. Magee, C. Kollstedt, Moran Bros., J. F. Kernochan, J. L. Mulford, Kessler & Co., Muller, Schall & Co., Webb & Prall, K. Weisner, Attorney, K. Weisner, C. W. Parker, R. Oliphant, C. A. Spoifard, A. Lothrop, M. D. Wyley, II. D. Lassey, C. Hoyt, C. A. Smith, E. Tlmlman, O. Arnes, E. Penfold, J. Penfold, W. H. Penfold, J. H. Ogden, G. L. Bradley, S. S. Smith, C. J. Langdou, J. M. Ceballos t 112 & Co., August Belmont & Co., C. T. Barney & Co., .M. K. Westervelt, C. N. Goddard, Kslato of F. 0. T. Wilson, H. ']’. Wilson, ,1. M. Ingnll, Mrs. C. B. Lawrence, Mrs. F. S. Hustings, E. L. llossiter. That is all I liavo in this mcniorunduni hook. There are others, bull haven’t them in this form. x-Q. 1)0. You have testified in regard to a meet¬ ing held in Cincinnati, Ohio, on the 2fith of Sep¬ tember, 1000. Please look at this paper which I hand you (Handing witness paper) and state whether that is the call for that meeting? A. This is the printed call for the meeting of the 215th of 11 a September, 1000. The ptt per referred to is offered in evidonco and is marked Complainant’s Exhibit 1, March 12th, 1002, J. A. S., Ex’r. Complainant’s Exhibit 1, .March tan,, 11)02. (Sgd.) J. A. S., Ex’r. I - “I desire every man to have an equal chance with mo to get back his share of the profit, who in any way put a single dollar into the Phonograph interests.” Tiiomas A. Edison, 114 President of the North V i 1 1 0g ij | Company. (See page 17, Proceedings Fourth Annual Con- j volition of lho jSntional Phonograph Association.) Fifth Annuai, Convention of Tine Nation At, Phonoouai'h Association to bo hold at Cincinnati. Ohio, September 25th, 1000. In pursuance of the authority given us by Sec¬ tions 1 and 2, Article 8, of the Constitution, the Fifth Annual Convention of Tim National Piio- lie NooiiAiMi Association is called to meet at Cin¬ cinnati, Ohio, Tuesday, September 215th, 1000, to consider the present condition of the local Phono¬ graph compmiies’ contracts terminating March 20th, t 1008, and the best method of enforcing the same. In viow of the important questions to be con¬ sidered, and the largo amount of money involved, a full attendance is earnestly requested. Hunky D. Goodwin, Chairman, Auoust N. Sami-son, Thomas Conyngton, J. 0. Wood, A. W. Clancy, HO James L. Andum, Secretary, Executive Committee National Phonograph Association. Race St. and Arcade, Cincinnati, O. Reduced Ratos on all Railroads to Cincinnati September 10 to 29. Extract from Notice issued by Receiver Offering Assets of thu North American Phonograph Company for sale, and under the conditions of which Tiiomas A. Edison purchased the “ All tho right, title and interest of the North 117 American Phonograph Company in the stock of the various local companies, whether now on de¬ posit with the Central Trust Company of New York, or still retained by the local companies, or hold in trust for the said North American Phono¬ graph Company. Said local companies are com¬ panies organized under agreements with the North American Phonograph Company, and are thirty- two in number. Stock in all of thorn was held by the North American Phonograph Company. ! Tho nbovo property of the North American Pho¬ nograph Company is to be sold by the Revolver subject to all claims and litigations affecting the property to bo convoyed, and tho Receiver will not guarantee the property so sold against patent or other litigation. The right, title and interest of the North American Phonograph Company, and of its Receiver, is all that tho Receiver undertakes to soil, and all that lie will expect to convoy, and tho purchaser buys at his own risk." John R. IIaiidin,. Receiver. i Present status of the Local Phonograph Com¬ panies' Contracts. Seven hundred and twenty-four_thpusand dollars cash ($724,000} was paid by the several local Pho¬ nograph Companies of tho United States for tho exclusive right to use, or let or sell to others within their respective territories, Edison Phonographs, Thu exclusive right given to the local companies was strictly enforced for several years; they were incorporated, sold their stock at high lignres, and their business was becoming quite profitable, when, Mr. Edison becoming President of the North American Phonograph Company, lie so managed affairs that lie was able to turn tho Company over into the hands of a Receiver, who finally wound up its business by selling its assets to Mr. Edison for $120,000, and lie thus became its assigueo and successor. Mr. Edison had previously sold his Phonograph patents aud exclusive rights therotlnder to the North American Phonograph Company, through Jesse fl. Lippincott, for $700,000, from whom the 121 local Phonograpn companies purchased their fit- teon-year exclusive licensos. By this transaction Mr. Edison netted a cash profit of $020,000, besides acquiring assets consist¬ ing of four thousand talking machines, and 13,030 ) f shares of the stock of the local Phonograph com- I panics, par value $1,303,000, issued by them for | their extended licenses. '“Since fclie "retirement from business of the North American Phonograph Company, Mr. Edison as its assignee and successor, by the terms of the con¬ tracts is obligated to respect, enforce, and carryout the conditions imposed by them, but has utterly 122 failed to do so. On the contrary, the first act done by him after tho Receiver’s sale was to attempt to evade these obligations. Recognizing the fact that by his pur¬ chase of the assets and franchises of the North American Phonograph Company, he also assumed its obligations to the local Phonograph Companies, owners of their oxolusive licenses, he devised a plan to got rid of them and their stockholders, which his personal counsel, Mr. Howard W. Hayes, has recently divulged in an affidavit made in the case of Andem vs. Uson, now pending in the local j23 courts of Cincinnati. Mr. Hayes testifies: n c^o- ^ sale Mr. Edison had assigned to the National Phonograph Company his claims against the North American Phonograph Company, and at the sale I bid on the property for the Na¬ tional Phonograph Company and for Frederick P. Ott. The bid was made in Mr. Edison’s name, as lie was the responsible person, and tlie Receiver wns_ not will! ng~fo"accoptr~a~ bid from the [National Phonograph Company or Frederick P. Ott, as about their responsibility ho had no knowledge. m I After tho money for the sale was paid ovor nml a Haul distribution made, tho Receiver made Rills of Sale of the assets to tlm National Phonograph Company and to Frederick P. Ott. In making the bid for these two parties / purchased for Frederick P. Oil whatever rights the North American Phonograph Corn- pang had in a number of contracts made bg various corporations with the North American Phonograph Company, including the above- mentioned contracts of the Ohio Phonograph Company. I purchased for the National Phonograph Company all tho remaining assets of tho cor¬ poration. The Jleccivcr accordingly gave a bill of sale to Frederick P. Oil for the rights of the North A merican Phonograph Company in the said contracts, and to tho National Phonograph Company for the balance of tho assets of the corporation.” The Frederick P. Ott referred to was an em¬ ployee of Mr. Edison’s. Howard W. Hayes was Mr. Edison's legal employee. Here we have tho shameful spectacle of Mr. Edison and his two employees conspiring together in an attempt to defraud the local companies of their rights under their contracts by a collusive sale, and substituting his own Company, Tho Na¬ tional Phonograph Co., in their place, which Com¬ pany is now usurping their territory. The fact that the stockholders of these local companies had paid him $721, 000 for their lifleon- year exclusive contracts, and had done so relying upon the guarantee of his name and reputation, and that as President of tho North American Com¬ pany he was their trustee, and as such bound to protect their interests, does not seem to have had These unsavory facts are of record, much to the regrot not only of tho stockholders of these local companies, whose investments in the meantime bring them no returns, but to every man having an interest in fair-play and honorable dealing. Many of the officers of tho local companies have been slow to believe that this deliberate plan to de¬ fraud them of their legal and equitable rights could have been sanctioned by the President of the Parent Company, and have therefore delayed com¬ mencing legal proceedings to enforce them. Having investigated these matters thoroughly and deliberately, they have finally concluded to delay no longer, and at the Cincinnati meeting of tile National Phonograph Association their plans will be matured under the advice of experienced counsel, and effective suits begun immediately. Tile Ohio Company was the first of the local PhonographCom panics to bring suit for an enforce- meliTof "territorial rights. They have sued the National Phonograph Company for $50,000 dam¬ ages, which suit is still pending, the Court having refused to dismiss on demurrer of defendant’s counsel. They have also sued a local dealer in Cincinnati (Andem vs. Ilsen) for injunction and damages. In this case, on the preliminary hearing, the Court “ In the case at bar the allegations of the plaintiff's petition are sufficiently broad not only probably to present this question, but the further question of fact whether the de¬ fendant and Thomas A. Edison and the Com- The Ohio Company has also issued the following notice anil sunt it to every person in Ohio dealing in phonographs and supplies: “ Notice is hereby given to all persons using, buying or selling Edison phonographs, records' and supplies, within the State of Ohio, except through or by the consent of tho undersigned, the exclusive licensees under tho patents of Thomas A. Edison for the Statu of Ohio, that they thereby render themselves liable to us for damages, under our contracts of .January itth and June lath, 1880, giving us tho exclusive right to use, rent or sell to others in the State of Ohio, phonographs and all supplies neces¬ sary for the same, until March 2(5th, 1008. “ Proceedings have already been commenced by us against Mr. Edison, the National Phono¬ graph Company and others, to enforce such exclusive rights, and all parties infringing tho same are hereby notilied that tlioy must im¬ mediately cease so doing, or answer to this Company in damages.” It is understood that tho Columbia Phonograph Jo., whose territory embraces the District of Co- umbia and Statu of Maryland, has up to the iresent time successfully maintained its territory rom unlawful intrusion (by legal action open to ny and all the local companies), and has thereby irotuutud its revenues and been able to give its tockholders large dividends. Pull information on all the legal points involved .’ill be submitted by experienced counsel at the linoinnuti meeting, looking to tho immediate proso- ution to recover exclusive rights for tho local ompanies, and indemnification for past infringe- lent. The present amount of phonograph business bo- >g done in tho territory belonging to tho local ompanies is as follows: Sixty jobbers or direct agents of the National Phonograph Co., averaging 133 an annual business of about $30,000 each— §1,800, - 000, and about 1,200 local denlers who procure their supplies from the jobbers. Yet every Phonograph so sold by Mr. Edison and his National Phonograph Company to-day is in violation of tho Contrnot of some local phono¬ graph company, as their exclusive contracts cover every portion of tho territory of the United States. It is estimated that the amount now due the ! local Companies, under their contracts in the way ! i of royalties on machines and supplies sold in their | respective territories by Mr. Edison and his dis- 1 tribnting companies since they became tho sue- j134 cessors and the assignees of the North American Phonograph Company, is about -|Z5Q.fl00. t No doubt is entertained that recovery can be had of this sum, or even a larger amount, ns will be ex¬ plained at the Cincinnati meeting, but it is not deemed advisable to indicate tho |egaTme~thods to bo omplpyed until that time. It is suflicient to say it can be done. Ohio Phonograph Co., Cincinnati. ^ James L. Andem. C. W. Baker. (w;, VV. J. Morgan. Michael Gr. Ileintz. C. B. Eidlar. A, O. Kaplan. Hon. J. H. Bromwell, M. C. New England. Phonograph, Co., Boston, Mass. Gen. A. P. Martin. J. S. Auerbach. Charles E. Powers. J. II. Lee. J. B. Gleason. B. Van Wngenem. Aug. N. Sampson. A. P. Higgins. Charles A. Choever. J. L. Martin. Schuyler Quackeubush. J. B. Metcalf. Tlios. C. Powell. Nebraska Phonograph Company, Omaha. IS. A. Benson. C-feorgo F. Wriglit. H. IS. Curey. W. S. Whitten. 0. C. Keddiek. Michigan Phonograph Co., Detroit. 0. C. Bowen. George S. Bavin. Charles M. Swift. C. B. Marsh. William V, Moore. W. II. Freeman. Iowa Phonograph. Co., Sioux City. W. P. Manley. G. A. Bench. A. C. Bmekebnsh. A. S. Gnrretson. Whiteliehl Stinson. P. W. Little. Edward P. Slone. 15. A. Benson. Minnesota Phonograph Company, Minneapolis C. H. Clmdbonrn. C. N. Clnidbonrn. S. G. Cook. John L. Martin. It. W. Chadboiirn. Edward B. Easton. Benjamin Bnrfoe. Wm. Herbert Sinitli, Charles H. llidenonr. 11. P, Cromelin. M. E. Lyle. Chapin Brown. Andrew Bovine. Louisiana Phonograph Company, New Orlean H. T. Howard. Hugh It. Conyngton. H. Lee Sellers. It. H. Sellers. Thoinns Conyngton. Ernest A. Hainil. John H. Bwight. Walter S. Gray. C. L. Hutchinson. J. C. Black. E. A. Benson. Charles Bickinso George B. Hoit. New Jersey Phonograph Co., Newark. George G. Frolinghuyson. Sylvester S. Bnttin. Nicholas Murmty Butler. V. H. Emerson. Howard W. Hayes. W. L. Smith. Kentucky Phonograh Company, Louisville. It. 0. Kinkead. Georgo W. Seymour. L. Leonard. W. H. Simmons. Georgo W. Grant. Charles H. Gardener. E. Gnlntti. Western Pennsylvania Phonograph Co., Pittsburg. Geo. B.Mothornl. P. C.Knox. L. S. Clarke. H. L. Childs. Henry P. Gilg. Geoige I. Whitney. P. L. Stephenson. J. H. Friend. State Phonograph Co., of Illinois, Chicago. Granger Farwell. Geo. A. McClellan. W. H. Hubbard. G. B. Shaw. E. L. Lobdoll. W. B. Preston. E. A. Benson. Eastern Pennsylvania Phonograph Co., Phila dclphia. E. P. Wallaco. Edwin P. Graham. James 0. Clephane. E. I. Postlethwait. Geo. H. MoFadden. Texas Phonograh Company, Galveston. H. E. Landes. L. S. McKinney. J. H. Atchison. Judge A. H. Willie. Thomas Conyngton. J. S. Montgomery. Hugh It. Conyngtou. Kansas Phonograph Company, Topeka. S. S. Ott. Geo. E. Tewksbury. A. B. Poole. <18 Montana Phonograph Company , Helena. B. I). Edgertoh. Don Davenport. C. K. Cola. K. A. Benson. A. It. Gatos. ' P. P. Shelby. Guo. B. Holt. Missouri Phonograph Company, St. Louis A. W. Clanoy. J. 0. Wood. A. A. Taylor. W. II. Yea ton. J. W. Mooro. I). D. Wobstor. .1. L. Martin. A. M. llumlursot). W. J. Wood. J. C. Elliott. Wisconsin Phonograph Company, Milwaukee. Joint II. Frank. T. J. Porelos. Joshua Stark. E. II. Bartlott. Ilonry D. Goodwin. W. S. Burnett. Wyoming Phonograph. Company, Cheyenne. E. L. Lindsay. A. Gilchrist. Tennessee Phonograph Company, Nashville. J. Balluras. Central Nebraska Phonograph Co. , Kearney. E. A. Benson. Colorado and. Utah Phonograph Co., Denver. S. W. Cantril. John Barber. Florida Phonograph Company, Jacksonville. J. C. Clarkson. Old Dominion Phonograph Co., Jloanoke, Va. J. II. McGilvra. C. F. llowo. It. S. Boswell. New York Phonograph Company, Neio York. Richard T. Haines. John P. Haines. Pacific Phonograph Company, San Francisco. Louis A. Glass. Alabama Phonograph Company, Anniston. Charles A. Cheever. South Dakota Phonograph Co., Sioux Falls. Henry Lacy. , i Spokane Phonograh Company, Spokane Falls, Washington. Louis Glass. West Coast Phonograph Company, Portland, Oregon. Louis Glass. x-Q. 100. Please look at this paper which I 146 hand you (handing witness paper) and state what that is? A. This is a printed copy of the resolu¬ tions adopted sit Cincinnati, September 20th, 1000, at tliu Fifth Annual Convention of the National Phonograph Association appointing a special com¬ mittee to consider the best plan of action to be adopted by the several local phonograph com¬ panies to maintain and enforce their contract rights. The paper referred' to is offered in evidence, and is marked Complainant’s Exhibit 2, March 12th, 1002, J. A. S., Ex’r. 147 Complainant’s Exhibit 2. March 12th, 1002. Signed, J. A. S., Ex’r. Riisor.tmoNs adopted, Cincinnati, 0., September 25th, 1000, by tlio Fifth Annual Convention of the National Phonograph Association. To the National Phonograph Association: jC The Special Committee appointed to consider the best plan of action to be adopted by tile several local Phonograph Companies to maintain and en¬ force their contract rights with the North Ameri- 50 can Phonograph Company and its successors, re¬ spectfully report the following, to- wit: That the salo of phonographs and supplies in various parts of the United Stales by Thomas A. Edison, through the National Phonograph Com¬ pany, is in llagrant violation of the rights of the various local companies having exclusive franchises covering the territory whore such sales are con¬ ducted. Your commit tee therefore recommend that ini- mediate concerted action ho taken by said local companies to enforce their rights by injunction, and to recover tho profits and damages' resulting from such unlawful sales. Your committee further recommend, that to give effect to the foregoing resolution a special commit¬ tee of five bo appointed, of whom tho President of this Association, Mr. A. W. Clancy, shall bu Chair¬ man, the said special committee to be invested with the full power of this Association to deter¬ mine a basis of concerted action, to secure tho co¬ operation of all the companies therein, to omploy counsel, to begin and prosecute actions at law or in equity for tho benefit of the allied interests, and to determine an equitable plan for distribution of the costs and benefits of such actions among tho companies who ratify the plan of procedure and participate therein. Respectfully submitted, E. D. Easton, Chairman. J. L. Andu.m. It. C. ItiNKKAl). A resolution to accept tho report of tho Commit¬ tee and approve and adopt tho recommendations contained therein was carried by vote of tho Con¬ vention, September 20tb, lt)00. Attest : J AMISS L. ANDKM, Special Committee, appointed by the National 151 Phonograph Association to carry out the instruc¬ tions contained in foregoing Resolutions: — A. W. CivANov, Chairman, Chicago, Ills. . Jamks L. Andkm, Cincinnati, 0. J Edward D. Easton. Washington, D. C. / RonutiT C. Kinkuad, Louisville, Ky. j Lem.ujoJE._E vans, New York City, N. Y. lie-direct, examination, by Mr. Hayes : R D. Q. 101. When did the meeting of the Trus¬ tees of tlie New York Phonograph Company, whom you say were elected at the last annual meet- " ing, take place, and where? A. The board of trustees elected at the annual meeting, February 4 til, 1002, met at the office of Messrs. Fahnestock & Co., No. 2 Wiill Street, New York, I think, Thursday, February 27th, but I could only tell positively whether it was Thursday or Friday by referring to the minute book, which I have not with mo to-day. R-D. Q. 102. Were yon present at that meeting? A. I was. R-D. Q. 108. Your knowledge in regard to the j proceedings at that meeting is from your memory, is it not? A. At present, as I have not brought the minute book with me. The minutes have been written out by me as secretary of the meeting, and I have them, but not expecting to be a witness called to-day I didn’t bring the minute book with R D. Q. 104. Where is your office in which this minute book is kept? A. The minute book at present is at my residence, Bloomfield, New Jer¬ sey, where I have written up the minutes. R-D. Q. 105. Is that the office of the New York Phonograph Company? A. No, sir; the present odico of tlio Now York Phonograph Company is No. 2 Wall Struct, at tliu ollice of Messrs. Palme- "stock & Co., Mr. William Fahnestock being the treasurer of the company. R'-B; Q. 1 0(5. Ilow long has the company had its ollice at No. 2 Wall Street? A. Hvor since the datu of the meeting of tliu hoard when they organ¬ ized. R D. Q. 107. That is sineo February 27th, 1002? A. Yes. K-D. Q. 108. Where did it have its olllco before that time? A. Its main ollice now, and nt all times, lias been at Tarrytown, New York, but it has had various olllees in Now York City, the last preceding olllco being in the Park How building and its oflice previous to that time being in the Postal Telegraph building, and previous to that time at 21 Park How (1 think) and also previous to that time it had an ollice in Park Place, and it had, previous to that time, an ollice at 257 (I think it was) Fifth Avenue, Now York, where it started. H-B. Q. 109. The ollice at Tarrytown is simply the formal ofllee required by law to bo kept by a com¬ pany at its alleged place of residence, is it not? A. Yes; and by the by-laws it is lixud as being the ollice of the company, and has always been main¬ tained there since its organization. H-D. Q. 110. What sort of an ollice has it at Tarrytown— has it a room? A. It has two rooms there in the ollico of an attorney. H-D. Q. 111. What is the name of the attor¬ ney? A. He is one of the inspectors of the elec¬ tion ; I never mot him bat once, and I can’t recall his name from memory. H-D. Q 112. Look at your testimony givon be¬ fore, and if that will refresh your memory, then state the name of this attorney? A. (After refer¬ ring) Henry C. Gridin is the name of the attorney ifi7 at whose odico the company hold their meetings. K-D. Q. 113. Have you been at this odico of tlio company at Tarrytown? A. I was there at the annual election this year. R-D. Q. 11-1. You say his odico consists of two rooms? A. Yes, sir. H-D. Q. 115. Has Mr. Gridin more than two rooms in his odico suite? A. I noticed another room, but whether lie had possession of it, or somebody else, I couldn’t say. R-D. Q. 110. Then, as a matter of fact, the odico you speak of is Mr. Gridin’s ollice at which the New York Phonograph Company has a habitat, ]r,s witli its name on the door, to conform to the law which requires it to have an ollice at tlio place of its location? A. Yes, sir. R-D. Q. 117. Is the company’s name on the pres¬ ent ollice at No. 2 Wall Street? A. I think not. R-D. Q. 118. When did the company have an , ollice in Park How? A. It had an ollice in Park C How from about February7 1001, until January, lOOST " E7D. Q. 110. At what number in Park Row was this ollice? A. The ollice was at rooms (321 and (322. R D. Q. 120. Rooms of that number in what 109 building on Park Row? A. The Park Row building. R-D. Q. 121. When did the company have an ollice in the Postal Telegraph building, if you know? A. It hud an ollice in the Postal Telegraph building in 1900, ‘ R-D. Q. 122. Can you tell between what dates it had an ollice in that building, and, if so, please do so? A. 1 could, if 1 had the minute book of the company here, but from memory, I could only sny Unit limy had boon tliero for about three years after removing from 121 Park Row. R-D. Q. 133. That would place tlmir oflleus in tliu Postal Telegraph building from about 1807 to 1000? A. Very likely; T think so. R-D. Q. 124. How long did it have an ofllce in 21 Park Row? A. I couldn’t sny; I don’t re¬ member. 11-11. Q. 12fi. That was before your time? A. Yes. R-]J. Q. 120. Can you toll how long it bad an ollieo in Park Place? A. 1 could not; I only know, from reference to the minute book of the company, that it had an ollieo there, and held mootings there of its board of directors. R-D. Q. 127. Do you know whereabouts in Park Place? A. I couldn’t recall the number; no. R-D. Q. 128. And at 257 Fifth Avenue, do you know how long it had an ollieo there? A. 1 re¬ member coming to Now York to attend a meeting of tlm National Phonograph Asssociutiou, which met at the Fifth Avenue Hotel in 1801, and at that time 1 visited the ollieo of the Now York Phono¬ graph Company at 257 Fifth Avenue, and I think tlm record book shows how long they remained there; I couldn’t say from knowledge or memory. R-D. Q. 120. Your acquaintance with the busi¬ ness of the company dates back how long? A. Back to about 1880 or 1800. U-D. Q. 180. By that you mean a general acquaintance with its business? A. No; 1 mean we were customers of theirs and they were custom¬ ers of ours. We bought phonograph records of them from their published catalogue of records, and they bought records of us— the Ohio Phono¬ graph Company; we had quite a largo bill with them, and they had quite a large bill with us. R-D. Q. 131. When vou suv “w».” „„„ the Ohio Phonograph Company? A. I mean the Ohio Phonograph Company. R-D. Q. 132. Do I understand, then, that the Now York Phonograph Company sold records to tho Ohio Phonograph Company to be used in Ohio? A. Yes, sir. R-D. Q. 133. And during what period was that? A. That was from 1889 or 1800 on up to 1803 or 1804 — 1804, I should say from memory. R-D. Q. 134. And when did you stop doing business of this character with the New York Phonograph Company? A. We stopped buying records of the other local companies in the East after we had become sufficiently familiar with the business to make our own records in Ohio. R-D. Q. 135. When was that? A. We began in 1802, probably, and gradually increased our making of records up to the time when we found wo could make enough to supply our wants, and then gradually ceased buying from other local companies, but were buying, at the same time, from tho North American Company nnd other sources. R-D. Q. 130. At what date did the Ohio Phono¬ graph Company stop buying records from the New York Phonograph Company? A. I couldn’t say postively, butlshould think somewhere about 1894 or 1805; 1894 I should say. R-D. Q. 137. Have you any acquaintance with tho business of the New York Phonograph Com¬ pany since 1894? A. Only from perusal of their books of account. R-D. Q. 138. When did you become officially connected with the New York Phonograph Com¬ pany? A. I stated in my deposition — I had my book then and could tell and would have to refer to it — I was elected director of the New York Pho¬ nograph Company, at the election of 1001, and the company organized oil February 30th, 1001, and I wns elected secretary. R-D. Q. 130. Wlmt do you mean by saying the company organized in 1001? A. 1 mean that after the trustees were elected at Tarrytown, according to the by-laws, in February, they held a mooting of the trustees for the purpose of organizing and elect¬ ing ofiicurs for tlio ensuing year, and that meeting was held on the 30th of February, and the ofllcers were elected for tho onsuing year thou. 114). Q. 140. By ‘‘organize'’ chon, you mean that the board of directors organized? A. The board of trustees as they are called. lt-J). Q. 141. When did you become a stock¬ holder of the New York Phonograph Company? A. In December, 1000, 1 think. H-D. Q, 142. You say that from your examina¬ tion of the books of the New York Phonograph Company, you are more or less familiar with tho business carried on by it from 1804 down to tho time you became officially connected with it? A. Yes, sir. 114). Q. 148. State, in a general way, what business it carried on from 1804 down to February 20th, 1001, when you were elected director? Mr. Hicks: Objected to unless the witness can testify from 1) is personal knowledge. A. I have no personal knowledge of tho business done by the New York Phonograph Company dur¬ ing that period, as I was engaged in Ohio in carry¬ ing the business of the Ohio Phonograph Com¬ pany of which I was president. K-D. Q. 144. Have you examined tho books of tho New York Phonograph Company showing what business was carried on by that company dur¬ ing that time, from 1804 to February, 1001? A. I have made no examination of tho books for that purpose. R-D- Q. 140. Have you made any examination 100 of tlie books? A. Only looked them over casually. R-D. Q. 140. From your casually looking over tlie books did you learn wlmt business appeared from tlioso books to have been oarriud on by tho company? Mr. Ilicks : Objected to on tlie ground that tlie books aro tlie best evidence. A. Yes, they would indicate the renting and sell¬ ing of phonographs and supplies. R-D. Q. 147. Where are those books? A. They are in the possession of tlie ex-secretary. R-D. Q. 148. Who is tlie ux-secretary? A. L. E. Evnns. 170 R-D. Q. 140. Have you made any effort to get possession of those books? A. No, because we haven't needed them yet. The board of directors have not selected their office for the present year, and it was not thought worth while to get the books until they had determined where to have tlieir office. R-D. Q. 100. Are yon familiar with the business carried on by tlie New York Phonograph Company since tlie timu you were elected director? A. Yes. R-D. Q. 151. Does that business appear in the books that you say are in tho possession of L. E. 171 Evans? A. Whatever business has been transacted during that time appears on the books of the com¬ pany. 11-D. Q. 102. When you say “ books of tlie com¬ pany,” you mean tlie books which are still in the possession of Evans? A. Yes. R-D. Q. 108. Can you, from your own personal f knowledge, regardless of those books, state what ^ business was carried on by tlie company during ) tlie time that you have been a director? A. The ( business of the company during the time sirice I j Tuivo been a director has been chiefly the looking / 172 after tho prosecution of its rights and its exclusive contracts uiul correspondence with parties who are infringing its territory, answering letters of in- ) quiry from such parties and answering calls of '•n stockholders, for information, collecting assess- / menus from stockholders, giving receipts for tho V. same and attending to general correspondence con¬ nected with the company;. It- U. Q. 154. You say this has been the chief business of the company during that time. Wlmt other business has it carried on during that time? AJ think L have named all the dilTuront kinds of 173 *,l,s'nL‘ss carried on by it during that time. It. I). Q. 1 {50. By whom have those assessments from the stockholders been solicited. A. I have already given a list of the names of parties who paid the assessments. It-IJ. Q. IfiO. You misunderstood my question. T asked by whom wore these ts 1 ited? A. They were solicited by the executive commit¬ tee of tho board of trustees of tho Now York Phonograph Company. Ii-D. Q. Ifi7. Is that executive committee, who you say solicited thosu assessments, the executive committee whose names you have given to-day? [74 A. No, that was the executive committee of last year, 1001. H-I). Q. 1 58. In what manner were these assess¬ ments solicited ? A. They wore solicited by cor¬ respondence and by personal solicitation. It-D. Q. 159. What are the mimes of the execu¬ tive committee who solicited these assessments? A. Tile executive committee tiro Scott Tremain, I,. B. Evans and James L. Andem. li-1). Q. 100. What was tho total amount of assessments which wore collected us the result of these solicitations by this executive committee? A. I couldn’t say from memory, not having the books before me, but I think somewhere between 175 $800 and $1,000. R-D. Q. 161. You speak of this as an assess¬ ment. Was not the stock of the complainant which was held by the stockholders who contributed fully paid up stock? A. Yes; this was not an assessment in that sense; it was a voluntary con¬ tribution, the assessment referring to the fact that each stockholder was asked to contribute pro rata on his holdings. R-D. Q. 102. What was the pro rata contribu¬ tion which the stockholders were asked to con¬ tribute? A. I think they were asked to contribute twenty-livo cents a share. R-D. Q. 109. How many shares outstanding of the Now York Phonograph Company was there at tho time these contributions wore solicited? A. I couldn’t say. The treasurer would bo able to tell, or I could if I had the books with me. R-D. Q. 104. Don’t you know the total capital of the complainant company? Mr. Ilicks : Objected to on the ground that the witness has already stated, at the time of his last deposition, that he has no knowledge in regard to the subject matter. A. The capital I think from memory is $2,500,000. R-D. Q. 105. Under what arrangement with the stockholders was this contribution made? A. There was no arrangement except that they were called upon to contribute towards the expenses of the prosecution and ofliee expenses, and were told that the suits were being prosecuted, and that a fund was necessary to meet incidental expenses. R-D. Q. 100. Was there any agreement of any kind given these stockholders who contributed, as you have described, in regard to a re-payment to them of the amount of their contributions? A. Yes, receipts were given by the treasurer to each no 178 party contributing, acknowledging the amount received, and promising to pay back the amount witli interest out of the amount they recovered from tlm defendant, companies. K-D. Q. 107. When yon say "defendant com- panics,” r presume you mean tile companies or in¬ dividuals against whom yon, under your contraet with tlie Now York Phonograph Company, ex¬ pected toliring suit in file name of tile Now York Phonograph Company, Is that right ? A. No, that is not. right because the suit had already been in- "tinned or complaints tiled and notices sent out 170 1,ufol’° contribution was asked Tor from the stockholders. It-T). Q. 1 (IS. Then I understand that the “ com¬ panies ’’out of the amount recovered from whom those contributions were to be re-paid with interest, meant t lie corporations or individuals against whom suits had been or were to be brought by you in the name of the New York Phonograph Company under the contract which you had with the New * °rk Phonograph Company about which you have testified in your direct examination? Mr. J ticks : The question is objected to upon the ground that it assumes that the suits 1 SO were to be brought by the witness, that fact not * . K kuun established by any testimony. A. No, sir, because of the fact that I have never brought suit on behalf of the New York Phonograph Company against any companies of individuals. lt-JJ. Q. lot). Was not the present suit brought y you in the name of the New York Phonograph Company under your contract with that company? A. J he bill of complaint of the Now York Phono¬ graph Company was signed by II. M. Fronton, President of the New York Phonograph Company! and --■twas brought by the filing of that bill. K-D. Q. 170. Was this present suit in which you are testifying brought at your instance and by 181 your counsel and at your expense? A. No, I couldn’t say that it was brought at my instnneo. The National Phonograph Association, which met nt Cincinnati in September, 1000, was composed of members of the different local phonograph com¬ panies, including the Now York Phonograph Com¬ pany, and it was there agreed that suit should be brought on behalf of all of these companies against the various defendants who were trespassing on their territory, and as the suits could not be brought, or it was thought they could not be brought, by the National Phonograph Association, it was suggested that tlio secretary of the associa- 182 tion (myself) should bo authorized to make arrange¬ ments with tlie local companies for the bringing and prosecuting of these suits. ll-D. Q. 171. iTIien do I understand that this present suit is brought practically by the National Phonograph Association? A. The present suit is brought, as I understand it, by the New York Phonograph Company by its filing its bill of com¬ plaint signed by H. M. Punston, its president. ll-D. Q. 172. You take the word “brought” to moan the Legal phrase allowing the nominal com¬ plainant in this suit. By the word “brought” I moan in these questions tile actual instigator of the ^gg suit, the person or corporation who procures at the first instance the suit to be brought. Bearing in mind this explanation of what I mean by the word “ brought,” please state whether this present suit has been brought by the National Phonograph Association. Mr. Jiiclcs : Objected to upon the ground that it is immaterial upon whoso instigation the suit may have been brought. A. I think the suit was brought at the instigation \ of the National Phonograph Association. j ll-D. Q. 173. Did the National Phonograph 184 Association take any official action particularly regarding this present suit? Mr. Hicks: Objected to ns incompetent, irrelevant and immaterial. A. It took the action which is recited in the ex¬ hibit already offered in evidence to-day, passed by the association appointing a select committee to prosecute any and all suits of the local phonograph companies for the recovery of their exclusive rights under their contracts. R-D. Q. 174. Give the names of that committee of live, please? A. The special committee ap¬ pointed by the National Phonograph Association 18r’ to carry out the instructions contained in the reso¬ lution consisted of A. W. Clancy, Chairman, Chicago, Ill; .lames 1-i. Andem, Cincinnati, Ohio; Kdward I). Easton, Washington, D. C. ; KoburtC. Kinkead, Louisville, Ky., and Lemuel 13. Evans, New York City. E-D. Q. 17(5. Are you familiar with all actions that have been taken by that eommitteo from the time of their appointment down to the bringing of this suit? Mr. Ilicks: Objected tons incompetent, ir¬ relevant and immaterial and upon the ground [gf, that no connection has boon shown between the action of that committee and the action of the complainant in the bringing of this or any other suit. A. lam. R-l). Q. 170. Did this committee take any action in regard to the bringing of this special suit? A. It did. R-D. Q. 177. What action did it take? Same objection. A. The action is shown in the minute book of the committee which was reported at each special It is consented that the same objection shall 187 apply to this on tire lino of testimony. R-D. Q. 178. Where is that minute book? A. I have it at my house at Bloomfield, New Jersey. R-D. Q. 170. Is the expense of this suit borne by that coinmitteo? A. The contract under which the casois being prosecuted states the terms and condi¬ tions of payment of the expenses, and it has already been put in evidence. R-D. Q. 180. That contract states that the suit is to be brought at your personal expense. In as¬ suming that expense, personally, do you assume it for yourself or ns a representative of that com¬ mittee? A. As a representative of that committee. 188 R-D. Q. 181. Have you any written agreement with the other members of that committee assum¬ ing this expense for which you have personally obliged yourself? A. I have agreement with local companies, whoso contracts I have, similar to the contract I have with the New York Phonograph Company. R-D. Q. 182. You misunderstand my question. My question is this: The agreement which was offered in evidence on your direct examination throws upon you the expense and charges of all suits to be brought in the name of the New York Phonograph Company similar to the present suit. Yon have testified that, in assuming this obligation to defray these costs and charges, you were acting not for yourself but us a representative of that Committee of five appointed by the National Pho¬ nograph Association. I now ask you whether you have any written agreement with the members of that committee by which they assume all or any part of the expense of this and similar suits for which you have obligated yourself by this contract? Mr. Hicks : Same objection. 04 100 R-D. Q. 183. Whs tliore a vorbal agreement bo- tween yourself and the members of that coinmittoo to that effect? jl fr. J licks : Same objection. A. No, sir; tho agreement in regard to tbo ex¬ penses is shown in my contract with my attorneys where the fund is to be raised from tho local pho¬ nograph companies and tho local phonograph com¬ panies, as companies, have contributed for tho in¬ cidental expenses of the prosecution. R-D. Q. 184. Where are those contracts with your attorneys to which you refer? A. I have thorn at my house in Hloomlield. 101 R-D. Q. 18fi. At the time you became a director of the New York Phonograph Company did tho company have any funds in its treasury? A. I think it had. R-D. Q. 180. Can you give any idea as to what amount? A. 1 could not from memory; it was a matter within the province of the treasurer and I had nothing to do with it. lt-D. Q. 187. Did it have any property at tho time that you became a director that you know of? A. It had its olllce furniture, desks and sta- tionerv. 102 lt-D. Q. 188. Those were at Tarrytown or in Park How? A. Those in Park How and tho Postal Telegraph building. H-D. Q. 180. What became of tho funds which it had at the time you became a director and of tho moneys contributed by tho stockholders about which you have testilied? A. Thu money was ex¬ pended for various purposes ns shown by tho treasurer's report. 11-D. Q. 100. You are not familiar with the de¬ tails of those? A. I couldn’t bo expected to re¬ member tile dotails of tho treasurer’s report ex¬ tending over tho period of one year. It-D. Q. 101. Wus this Executive Committee, 103 of which you were a member, authorized by the directors of tho Now York Phonograph Company to collect these subscriptions from stockholders? A. Yes, sir. H-D. Q. 102. Was that authorization in the nature of a resolution on tho minute book? A. Yes. lt-D. Q. 108. And that appears on tho book? A. That appears on the book. R-D. Q. 104. Do you know enough about the linances of tho company to know whether it was necessary to raise this money or whether the com¬ pany had enough money in its treasury to carry 104 on the suits and run its office expenses? Mr. Wales: Same objection. A. It was necessary to make the call for contribu¬ tions, in order to provide for current expenses. R-D. Q- 105. When did this need of making the call to provide for current expenses arise? Mr. Wales : Same objection. A. It arose immediately upon the taking of the oliices in tho Park Row building. H-D. Q. 1PC. And that was about when? A. That was about February, 1901, H-D. Q. 107. Then at that time the company 105 had not the necessary funds to keep its office and conduct These suits? A. No. ~ " ' R-D. Q. 1 98. As you had agreed by your con¬ tract to assume all these costs and charges, why did the company call upon, or why did you as a member of this committee call upon, the stock¬ holders to advance money for matters which you had agreed to advance the money for yourself? A. 1 had not agreed to advance the money to pay ( for the office expenses of the New York Phono¬ graph Company or for clerical hire, rent and telephone expenses. Those were fully of a per- Bond nnturo to tho Now York Phonograph Com- puny a ml thu money was called for to proyjilofor thorn. "It was not contemplated in my contraot to pay such oxpensus. 1M). Q. 100. Then as I nmlorstnml it this money which was advancod hy tho stoukholdors was not advancod for tho purpose of defraying tho expenses of tlie suits which wore to he brought, which yon have testilied about, but to pay tho current ex¬ penses of the company?. A. Per both purposes. A part was used for legal expenses and a part for ollicu expenses as the treasurer’s report shows. R-D. Q. 200. In your former answer you im¬ plied that this money was not called from tho stockholders for the purpose of carrying on suits but only for thu ordinary ollico expenses of the company ? A. Yes. R-D. Q. 201. You wish to change that answer now? A. The circular stales that it was for inci¬ dental expenses connected with the prosecution of tho suits such as office runt, clerk hire, copying papers and so on, and the call was made for con¬ tributions to cover those expenses. It- 15. Q. 202. Then its a matter or fact, at tho time you went in as a director, tho New York Phonograph Company was without funds, and in addition to your agreeing to carry on these suits without expenses t hey raised from certain stock¬ holders, moneys to pay current expenses, is that right? A. Current expenses and suitable legal expenses. lt-I). Q. 208. Well, were these incidental legal expenses of winch you speak the expenses which are provided for in your contract? A. No, I think they were outside of those expenses. It 'D. Q. 204. Thou these incidental legal ex¬ penses about which you speak were legal expenses of the company outside of tho prosecution of the presont suit and similar suits to be brought under your contract, is that right? A. They were in con¬ nection with tho expense of the present prosecu¬ tion. K-D. Q. 205. Explain what you mean by their being in connection? A. Well, there are two classes of costs for tho prosecution of legal cases, one the fees and the other tho incidental expenses, tho court costs and travelling expenses and other matters. There wero some mutters, as shown by tho treasurer’s report, that were paid; attorney’s expenses, that wero not supposed or regarded as being paid by me, and those were paid out of the money collected from stockholders also. R-D. Q. 200. Your answer is very indefinite. Can you specify just what legal expenses wore paid out of this money contributed by the stockholders and what legal expenses are covered by your ob¬ ligation to your attorneys or by the moneys that you have paid to them? Mr. Hides : Objected to as incompetent, irrelevant and immaterial. A. The principal items that I had in mind of ex¬ pense was the expense of the attorneys, to Wil¬ mington, Del., when the case was argued there of the New England Phonograph Company. That was the itom 1 had in mind in addition to ordinary ollice expenses. R-D. Q. 207. Then, as I understand it, this money contributed by the stockholders was used for the ordinary oflice expenses and also for the ex¬ penses of the attorneys arguing the case of the New England Phonograph Company against the National Phonograph Company and others at Wil¬ mington? A. As I remember the item in the treasurer’s report, it was tor that purpose. R-D. Q. 208. Why should the New York Phono¬ graph Company have paid for the arguing of the ~u~ ease Drought Dy tliu Now England Phonograph Company? A. Thu Now York l’lionogrnph Com¬ pany ami tlm Nuw England Phonograph Company had their olliees in tlm samu room, and thoy had accounts with uach other. Thu Now England Com- imny had paid somu expenses on liohaif of the New York Phonograph Company and thu Nuw York Phonograph Company had paid some expenses on hulmlf of thu Nuw Kngland Phonograph Company. Thu troasnrur was thu samu ollieur in both casus, and I suppose* in that way tliu Hum was charged np on tliu Nuw York Phonograph Company and vury 203 *'*a'**v !l wHiutur item on tliu Now Kng¬ land Phonograph Company. That is tliu only way I can explain it. H-JJ. Q. 209. W hat has bucomu of tliu fitrnitnru which yon say tliu Nuw York Phonograph Com¬ pany had when you b-unnio olio of its directors? A. Col. Kvaiis, thu ex-suurutary, lias it in charge. It-D. Q. 210. You don’t know whuru it is? A. I haven't inquired, but ns soon ns wo locate out* nuw ollieus, 1 shall gut it and put it in our nuw oiiicus. li-D. Q. 211. You have given thu names of thu stockholders who gave contributions to tliu Nuw 204 York Phonograph Company for its current ex¬ penses to assist in carrying on this and otliur suits. Can you givu tliu amounts contributed by uach of them? A. I can give thu amounts contrib- utucl by each of those whose names I have already given you. H-l). Q. 212. Will you please givu that? A. Of course, this is only a partial list: F. S. Smithers . $25.00 «• Herbert Johnston . 2fi.OO Fahnestock & Co . ” ’ {,4'00 W. Seward Webb . r.n'm F. G. Bourne . W. A. Slater . II. Van It. Kennedy . John P. Ilainus . Mrs. II. S. Bticklmm . Estate of J. M. Constable. W. II. Doubled ay . Lonnsberry & Co . C. C. Cuylur . E. L. Keyes . J. Brooks . L. P. Miller . G. J. Magee . C. Kollstedt . Moran Bros . J. F. Kornoohnn . J. L. Mulford . Kessler & Co . Muller, Scliall & Co . Wubb & Prall . J. II. Prall . K. Weisner, attorney . K. Woisnor . C. W. Parker . It. Oliphant . C. A. Spoliat'd . A. Lothrup . M. D. Wyluy . II. D. Lassuy . C. Hoyt . C. A. Smith . E. Thalman . 0. Arens . E. Pen fold . J. Penfold . W. H. Penfold . J. H. Ogden . G. L. Bradley . Kg 70 S. S. Smith . 12.no C. ,). Langdon . 0.00 .1. jM. Culuillos & Co . fi.OO August Belmont & Co . 8.70 C. T. Barney* Co . 10.00 M. E. MVstervclt . 10.70 C. N. (ioddnrd . -1.00 Estate of F. C. T. Wilson . 7.00 II. T. Wilson . 0.00 .1. M. Ingall . 2.00 Mi's. C. 11. Lawrence . 12.00 Mrs. F. S. Hastings . 12.00 E. L. Rossiter . 10.00 R-D. Q. 21 :-l. About wlien were these contribu¬ tions niado? A. They were mado from February, 1001, along during the months of March, April, May, .June, .July and August, 1 think. R-D. Q. 21-1. Of the year 1001? A. Yes. R-D. Q. 210. At the next hearing are you will¬ ing to produce the minute book of the Executive Committee of the National Phonograph Associa¬ tion and thu contracts with your attorneys which you have referred to, and the minute book of the Now York Phonograph Company, or do you pre¬ fer that I should subpcuna you to produce them? A. 1 have no objection to producing all the books ami papers you ask for except the minuto book of the special committee of the National Phonograph Association, and out of consideration to my asso¬ ciates on that committee 1 would prefer to bo sub- pauiaed, as far as the bringing of that book is con¬ cerned. 1W>. Q. 210. Do you know the address of Scott Tremaine, who you say has possession of (lie Treas¬ urer’s book of the New York Phonograph Com¬ pany, and if so please state it? A. The address given to me by Mr. Tremaine when I last saw him was Scott Tremaine, Post Offlco box 85, Roseville, 211 S. I. R-D. Q. 217. You don’t know whore his resi¬ dence is or where his businoss office is? A. That is his residence. Mr. Troinnine is an export ac¬ countant and travels in different parts of the coun¬ try writing up the books of insolvent companies and matters of that nature. R-D. Q. 218. Do yon know the address of L. E. Evans, the ex-secretary of the New York Phono¬ graph Company, and it so please state it? A. A letter addressed to him at Park Row building will reach him. R-D. Q. 210. Do you know where his house is or 212 where he carries on his business. A. I do not. (Signed) James L. Andem. Adjourned to Saturday, March 15th, 1002, at 1.80 v. m. NewYouk, March 15,1002. Met pursuant to adjournment. Present — Counsel as before. JAMES L. ANDEM, resumed : llc-direel examination continued by Mr. Hayes : R-D. Q. 220. Mr. Andem, please look at your answer to question 101 and see if you wish to make a correction as to the dates stated there? A. In my answer to question 101 I stated that the Board of Trustees held their first meeting to organize for the year 1902 on Thursday, February 27. I find by looking at the minute book that it was March 3d, 1902. 72 214 ll-D. Q. 221. Please look at. question 202. That, is a question which would call for an nnswur, yes or no, and the answer as it appears is not explicit. Please correct that? A. The answer should be: “ Yes, sir; current expenses and suitable legal ex¬ penses.” H-D.' Q. 222. You were subpoenaed to produce the minute book of the National Phonograph As¬ sociation. Have you done so? A. I have it here. 11 1). Q. 22!). Please turn to the entries in it which have any allusion to the suit brought by the New York Phonograph Company against tho 21(5 National Phonograph Company and others, and read them. Mr. Hicks : Objected to upon tho ground that such entries are immaterial, irrelevant and incompetent, and upon the further ground that no connection has been shown to exist be¬ tween complainant and the National Phono¬ graph Association, and upon the further ground that whatever may have been done by the National Phonograph Association or any committee thereof is not binding upon com¬ plainant. A. I find that the special committee had a session 210 in Now York November 1, 1900, in which the min¬ utes of the last meeting were read and approved, and it then says : “The general subject of the best course of legal procedure to unforce the rights of the lo¬ cal companies was discussed at length, and tho unanimous opinion was expressed that a test suit with the Now York Phonograph Company should be brought in the courts of New York City without delay and that the bill of com¬ plaint should be prepared, signed and prose¬ cuted at once.” I also find an ontry under date of New York, 217 September 10, 1001, ns follows : “ Tho secretary reported that counsel were proseouting the caso of .the New York Phono- . graph Company in the United States Court for the Southern District of Now York upon tho bill of complaint filed by them in January last, but the defence were resorting to every known legal technicality to delay favorable action, and that Thomas A. Edison, the Edi¬ son Phonograph Works and the Edison Phono¬ graph Company, hnd evaded service success¬ fully thus far, and that the National Phono¬ graph Company was the unly defendant In 318 this case upon whom service could be ob¬ tained; that suits hnd also been entered against five local dealers in phonographs and supplies doing business in New York and Brooklyn as follows: Messrs. S. D. Devnga, John S. Jones, Douglas & Company, Foote, Pierson & Co. and A. D. Matthews & Son.” Those are tho only entries I find that relate specifically to the caso of the New York Phono¬ graph Company. ll-D. Q. 224. Who was present at this meeting / on November 1, 1900? A. There were present Sj^g Messrs. Easton, Andom and Evans of the special C, committee.' L ll-D. Q. 22H. Who was present at the meeting on September 10, 1901? A. Messrs. Evans and Andem. ll-D. Q. 220. At tho meeting 011 November 1, 1900, does it appear that any resolution or motion was made by anybody in regard to tho matter? Mr. Hicks : Same objection to all this line of testimony. A. Only that which I have read. ll-D. Q. 227. Was that a motion or was it simply ill entry you maim ns secretary in w> mo jencral conversation hold at, the mooting? A. It ,vas not, a motion; it was a record of what trims- |)i rod in gonoral proceedings. K-D. Q. 228. Then I hero was no formal motion nmlo in regal'd to tlm suit in which you are now jiving testimony? A. NoL in reference to tlm Now York Company, but 1 son in tlm record Imre lihuro was a resolution passed that same day, hut is it did not, spocilically name tlm Now York Phonograph Company, I didn't read it with tlm other extracts. K-D. Q. 221). If that resolution refers to tlm New York Company with other companies or in any general way, please read it? Mr. Ilhkx : Same objection. A. It refers to all of tlm companies, and is as follows: “ On motion of Mr. Kraus, the following resolu¬ tion was adopted : “ Jiexoleed, That Messrs. I licks and Camp, attor¬ neys, whose propositions have been submitted to this committee, he requested to confer together in regard to tlm best method of procedure for tlm local 'companies to adopt to enforce tlmir claims and recommend in what courts action should he brought; and tlm secretary is instructed to see these gentlemen and arrange for such a conference.” K-D. Q. 280. In pursuance of that, resolution what, if anything, was dono by you, you, as 1 understand, being secretary? A. The next entry I Ibid is one L read under date of September 10th, where I reported that counsel were prosecuting the case of tlm Now York Phonograph Company. K-D. Q. 281. My last question related not to the records, but as to what action, if any, was taken by you in pursuance of this resolution accepting tlm proposition of Mr. llicks and Mr. Camp? A. My action consisted in seeing these gentlemen and 223 conferring with them as to tile best manner of prosecuting tlm local cases of the phonograph com¬ panies generally. K-D. Q. 232. And did that result in the con¬ tract being made between them and yourself or the National Phonograph Association and the New York Phonograph Company? Mr. Iliokx: Objected to upon the ground that tlm question calls for a conclusion of the witness. A. It resulted in my seeing the officers of the New York Phonograph Company and concluding a con¬ tract with them, whereby they employed me to ^ prosecute their suit in the terms stated in the contract, which is in evidence. JW>. Q. 233. Then this contract between your¬ self and the New York Phonograph Company was subsequent to this meeting of the Executive Com¬ mittee of the National Phonograph Association, at which an arrangement for carrying on certain sails was discussed and approved, is that correct? A. The last entry is dated September 18, 1001. Ary contract with the New York Phonograph Com¬ pany is dated, I think, November 0, 1900. K-D. Q. 231. This first meeting to which you 22.1 have referred took place 011 November 1, 1900, did it not? A. Yes, sir. K-D. Q. 23(5. Did you make the contract with the New York Phonograph Company before that date? A. Yes, sir. K-D. Q. 230. What date? A. My first contract with tlm New York Phonograph Company was dated October 22d, 1900. K-D. Q. 237. At the meeting of the executive committee on November 1, 1900, did you report to the committee this contract that you had already made with tile New York Phonograph Company? tory covered by its contract with the North Amer- 220 ican Phonograph Company, which contract has been violated by Thomas A. Edison, The National Phonograph Company and others, desires to insti- tuto a suit or suits in the proper courts to enforce its rights under said franchises and contract, and to recover from the parties who may have violated the same the profits and damages resulting thore- It is therefore agreed by the party of tho first part that said party of tho second part shall have exclusive right to prosecute any and all said suits for and on its behalf, to recover said profits and damngos. It is further agreed by tho party of the first part that the party of the second part shall receive for his full compensation for said services and dis- biirsoniunts a sum equal to (JO# of any and all moneys he may receive or colleot from any and all of said parties by reason of a violation of said ex¬ clusive franchise and contract. It is further agreed that the party of the first part shall not be called upon at any time to pay any costs or charges incurred in any proceedings that may bo instituted by the said party of the second part to recover said damages. '' ' It is further agreed that the party of the second part is hereby fully authorized and empowered to collect and receive on behalf of the party of the first part any moneys that may be collected on be¬ half of the party of the first part by reason of the violation of the said franchise and contract. It is further agreed that upon the filing of the suits herein provided for, and during the prosecu¬ tion of the same, the party of the first part will furnish such documentary and other proofs, con¬ tracts and agreements as may be necessary for the '1 i\"r au lino of the parly of the second part, including tin use of its corporate Maine, and will not, witliou the written consent of the party of thusucond part abandon, compromise or settle such suits agains the defendants or any one of them, or recall or re volte any of the conditions of this contract. Tile said party of the first, part hereby eolisti titles and appoints stud party of the second par tvs its true and lawful attorney, witli full power mu authority to perform any and nit tilings for und it its behalf that may he necessary to carry out tliii agreement, witli power of substitution nnd revocti lion, ns if the party of the first part were person ally present. In witness whereof, the said party of tlio firs part, by its President nnd Secretary, duly author i'/.ed by its Hoard of Directors, and the party o tlm second part, have hereunto set their lmnds tin 22d day of October, 1000. New Yoiik Phonograph Company, [suai..] By LI. M. Funston, Presd’t Jam us L. Andkm. Attest. Scott Tkhmain, Secretary. Witness ns to J. L, Andom, Ai.uxanduie So.hui.T7, Evans. K-P. Q. 2-12. Wlmt was the material omissiot in that contract which was the reason for its built) rescinded? A. Both contracts have now been pit in evidence in my testimony, and a comparison wil show. lt-P. Q. 2-13. Was there titty other agreemen between you und t lie New York Phonograph Com patty beside this one of October 22d which wn cancelled and the one of November Oth that is stil in forco? A. Yes, sir; there was one other of 2:iK November Oth culled the collateral agreement. K-.D. Q. 244. Will yon produce that and read it to tile Examiner? “COLLATERAL AGREEMENT made this Oth day of Novembor, 1000, by and between the New York Phonograph Company, of the City and State of New York, party of the first part, and James L. Andkm, of Cincinnati, Ohio, party of the second part, witnessed! : ; Whereas, tin agreement has this day been made by and between the parties hereto bearing even date herewith. Now, tneishuoue, it is mutually agreed by and between the parties hereto as follows : First. — That this agreement shall bo as between the parties hereto a part of said other agreement. Second — The party of the second part, in con¬ sideration of the making by the party of the lirst part of said other agreement, agrees that lie will not compromise or settle the claims and demands ^ of the party of the lirst part against Thomas A. Edison, the Edison Phonograph Company, the Edison Phonograph Works, the National Phono¬ graph Company or any one or more of them or others connected with said Edison or said coin- . panics for less than §10,000, unless 'hereafter authorized so to do in writing by the party of the lirst part. In witness whereof, the said party of the lirst part, by its President and Secretary duly author¬ ized by its Board of Directors, and the party of the Viv^t fe I L l-Jj 'Jtciutll} ox o I 80 ! second part have hereunto sot t lusir hands tins 0th day of November, 1000. | ska i.. 1 Nnw York Piionooiiaimi Co. H. M. Funkto.v, President, Party of the* first part. Jam ns L. A norm [ska I,.] Parly of tho second part. Signed, sealed and delivered ) in tho prosoaco of ) Louis Hicks, as to Mr. A nil cm’. lt-D. Q. 2*15. Was tho agrcomont of Ootobor 22d, 1000, prosoatod to tho committoc of tho Na¬ tional Phonograph Association on thoir mooting on November 1st, 1000V A. No, sir. lt-D. Q. 240. Wore the other memhors of that cominittoo aware at tho time of that mooting that yon lmd entered into this contract of October 22d, 1000, at tlio time of timt mooting? A. 1 think they were told of tho fact. 210 H-11- Q- 247. Told by whom? A. By mo. It-D. Q. 248. Did yon show them that contract or a copy of it? A. 1 think 1 did. lt-D. Q. 210. At that meeting of September 18th, 1001, do yon know whether tho two contracts of November 0th, 1000, were prosoatod to the other member of tho committee who was present at that meeting? A. At that meeting there wore two mem¬ bers present— that is, Evans and Andoin— and I think the contract was showTTat that time or was accessible. 1 couldn’t say from memory. There is no entry indicating that it was exhibited. lt-D. Q. 2(50. Yon stated in yonr testimony at 81 tho last session that yonr contract witli the New 241 York Phonograph Company in regard to the bring¬ ing of tins and other suits was made by yon on behalf of tho Executive Committee of theNationnl Phonograph Association. Is there any record of any kind in tho minutes of timt association showing that that committee ratified or assumed the re¬ sponsibility for those contracts? Mr. Jlivks : Objected to upon the ground that tile witness lias not so testified. A. No, sir. lt-D. Q. 251. Have the other members of that committee obligated themselves to carry out timt t contract which yon say yon made as the represen- 5 tativo of tho committee? A, No, sir. lt-D. Q. 8.12. Are the other members of the com¬ mittee liable, so far as yon know, for the expenses of carrying on those suits under that contract? A. They are not. lt-D. Q. 2/53. Then, what did yon mean by say¬ ing, in answer to question 180, where I said, “In assuming that expense personally did yon assume it for yourself or as the representative of thatcom- mitteo ? ” “ As the representative of that com¬ mittee? ” A. That was evidently a misunderstand¬ ing, because the only responsibility I assumed was 2 that named in the contract, and the committee are under no responsibility and have no connection with it. lt-D. Q. 254. Then, as I understand it, the ex¬ pense of bringing these suits is imposed upon you alone, and the other members of the committee are not liable to you for any part of these expenses? A. They are not; I am alone responsible for them. lt-D. Q. 255. Is there any arrangement between you and the other members of the committee, or any of them, by virtue of which they are to receive any part of tho money to be realized oat of the yLcfchuMt ,(/ ,$. < Ux ’ll r''. (<> 'IC-fA-v U - £c U-t (t-'t iiigument between the New York Phonograph loin puny anti nny other person except myself in egirnl to the payment, of the expenses of the suit. B-l). Q. Sfiti. I do not refer to the oxpenses. I ofer to the clause in the agreement which says you re to receive sixty per cent, of any amounts re- overeil fttnn these suits. Does tlmtsixty pur cent. ;o to you exclusively, or have any other members if the committee of the National Phonograph Vssociatiou any interest in any part of that? A. It roes to me exclusively. No other members of the lommittee have any interest in it whatever. B-l). Q. 257. You referred to certain contracts lotween yourself and the attorneys who are taking airt id tliese suits. Have you those contracts with vou? A. 1 have. R-D. Q. 3fi8. Will you please produce them and •end them to the UxaminurV A. I have but one lontract, with my attorneys, and that is dated No¬ vember 14, 1000, and is as follows: ‘•MEMORANDUM OF AGREEMENT, mado this 1-lth day of November, 1000, by and between Iamks L. Andkm, of Cincinnati, Ohio, party of the lirstpart, and Eusiia 1C. Cami1, Counselor at Daw, party of the second part, wiTNnssirru : W 1 1 K it l-t as, the party of the lirst part is advised and believes that certain valid claims and demands exist in favor of the New York Phonograph Com pany, against Thomas A. Edison, tile Edison Pho nograpli Company, thu Edison Phonograph Works the National Phonograph Company and other; and against any one or more of them arising espec hilly out of a certain contract or contracts made bj and between the said New York Phonograph Com pany and the Nor.tli American Phonograph Com pany, whereby certain rights wore bargained, sold granted and conveyed to the said New York Pho- 247 nograpli Company, including particularly rights, privileges and licenses in, to and under certain Lotters Patent mentioned and described in said certain contract or contracts made by and between said New York Phonograph Company and said North American Phonograph Company; and WiimiUAs, the party of the first part is advised and believes that certain valid claims and demands exist in favor of the New England Phonograph Company, against Thomas A. Edison, the Edison Phonograph Company, the Edison Phonograph Works, the National Phonograph Company and others nnd against any one or more of them ails- ^ ing especially out of a certain contract or contracts made by and between the said New England Pho¬ nograph Company and the North American Pho¬ nograph Company, whereby certain rights were bargained, sold, granted and conveyed to the said New England Phonograph Company, including particularly rights, privileges and licenses in, to and under certain Lotters Patent mentioned and described in said certain contractor contracts made by and between said New England Phonograph Company and said North American Company; and Wiikiikas, tlie party of the first part has by 249 certain agreements in writing made by and between the party of the first part and the New York Pho¬ nograph Company and by and between the party of the first part and the New England Phonograph Company acquired certain rights, interests and control in, to and over the claims and demands aforesaid in favor of the New York Phonograph Company and the New England Phonograph Com¬ pany and against the parties aforesaid and any one or more of them, and is desirous of having said claims and demands prosecuted diligently by ac¬ tion or actions at law or by suit or suits in equity,' the largest :i lid bust. recovery and advantages to and for and oa bolialf of flit) persons interested in Maid claims and demands, a ml t*atdi and uvory tmn of thuin, including the parties of the lirst and second part to this agreement; and WnnitKAs, tliii party of the sucom'l part is will¬ ing to prosecute said claims and demands as at¬ torney, solicitor ami counsel upon tile conditions, covenants and agreements hereinafter mentioned; Now, tii 1:1:1: t'oiti:, in consideration of the mutual covenants, promises and agreements herein con¬ tained, the parties hereto do hereby agree as fol¬ lows : FinsT. — Tile party of t he lirst part hereby retains and employs the party of the second part to prose¬ cute said claims and demands in the manner afore¬ said, and in the interest of and on behalf of the parties aforesaid, and eaclt and every one of them interested in said claims and demands, and cove- mints, promises, and agrees for ltimsolf, his heirs, executors, administrators and assigns that as com¬ pensation arid counsel fee there shall be paid to the party of the second part, twenty-live per centum (21 if?) of whatever stun or sums of money may bo recovered upon said claims and demands, or upon any one or more of them, whether sueh recovery be laid in nil action or actions at law or by suit or suits in equity, or in tiny other manner not herein specifically provided for, including a settlement or settlements of said claims and demands or of any one or more of them, exclusive of costs, tile costs ILhi'.Vj to belong to the party of the second part, and to he in addition to said percentage. ~ , Second — Tito party' of the lirst part covenants and agrees for ltimsolf, his heirs, oxecutors, ad¬ ministrators and assigns, that he will not settle 253 snid claim or demands, or tiny action, suit or pro¬ ceedings brought and bused thereon, or any one or more of them, or make any release, discharge or compromise, or negotiate therefor, except through tlio party of the second part. Tit tut). — Tito party of the lirst part promises and agrees that idl disbursements and expenses made or incurred in thu prosecution of said claims and demands in the manner aforesaid, exclusive of the compensation and counsel fee heroin provided for, shall ho paid out of tlio fund which the party of the lirst part hereby agrees to use iiis best en- 254 denvors to seenro from the various persons, includ¬ ing various sub-companies throughout the United . Status interested or which may become interested in tlio prosecution of said claims and demands in tile nmmier aforesaid. Fouiitii. — Tlio party of the second part agrees to undertake tlio prosecution of' and to prosecute said claims and demands in the manner herein pro¬ vided for, and for the purposes herein rucited, set forth and provided for, as an attorney, solicitor and counsel, and that in so doing Jiu .wijh coasidg.r solely tlie interests of those who may be entitled 255 to share in "any recovery that may be had in tlio actions, suits Brother proceedings herein provided Fifth. — The party of tlio second part covenants, promises and agrees that lie will not make any set¬ tlement, release, discharge or compromise in regard to snid claims or demands and said actions, suits, and proceedings, or any one or more of them, or negotiate therefor, unless lirst authorized in writ¬ ing so to do by the party of the first part, or his heirs, executors, administrators or assigns. 80 250 Sixth.— Thu part i«8 lioruto do hereby mutually eovenuht, promise mid agree that Louis _ Hicks, Esq., shall hu, mid hu hereby is, appointed by the pari y of the first part as associate 'counsel' to advise and aci with the party of the second part in regard to the matters herein provided for, and that actions or suits or otliur proceedings shall hu brought and prosecuted in such courts and in such man tier as the party of the first part and his said associate counsel shall designate and prescribe, and that said suits and actions or other proceedings shall be brought and prosecuted by the party of the second 2^7 part in such courts and against such persons, ex¬ cepting the American Grnphophono Company and its selling agents, and in such manner as the party of the first part and the said associate counsel shall designate and prescribe. Seventh. — It is hereby mutually covenanted, promised and agreed by the parties hereto that such associate counsol appointed by the party of the first part shall, as compensation and counsel fee for his services, be entitled to receive fifteen per centum (Hi;?) of the sum or sums of money upon which the party of the second part shall be enti- 258 tied to receive* twenty-live per centum (2B'?) for his compensation and counsol fee as hereinabove de¬ scribed. Eighth. — The parties hereto do hereby mutually covenant, promise and agree that tho party of the second part and the said associate counsel shall be, and they hereby are, retained as attorney and asso¬ ciate counsel to prosecute such other claims and demands against such person or persons, excepting the American Graphophone Company and its sell¬ ing agents, existing in favor of tho various sub- Phouograph Companies throughout the United States, which tho party of tho first part may be 259 authorised to prosecute, upon tho same terms and conditions as hereinabove set forth. Tenth. — Tho parties hereto do hereby covenant, promise and agree that the party of the second part, and the said Louis TIicUs as associate counsel, shall have joint and several liens upon said claims and demands and upon any action, suit or other proceeding, and upon any sum or sums of money realized or due upon or under said claims and de¬ mands of said actions, suits or other proceedings or settlement thereof which may be authorized as herein provided. • S In witness whereof, the parties hereto have here-, unto set their hands and seals the day and year first above written. ' Elisha K. Camp, Louis Hioks, Jambs L. Andem. Signed, sealed and delivered in the presence of C. A. L. Massiu, Chas. R. Mauthu. Tho foregoing contract is hereby agreed to and 201 ratified by and between tho undersigned as of the above date. (sgd.) Louis Hioks. (sgd.) Jambs L. Andem.” Mr. Camp: Upon behalf of both counsel, no objection is made to the introduction of the contract between them and Mr. Andem, and they are willing that the contract shall be pro¬ duced and offered in evidence in order to speed tlie hearing, but they desire to state upon the minutes that they regard it as most unusual i and extraordinary to call for a letter of attor¬ ney between counsel and client. Subject to this (inalilication, they have no objection to tlie contract going in evidence. lt-D. Q. 2 fit). This contract which yon have pro¬ duced is the only contract with your attornoys in regard to the prosecution of this suit which has been entered into? A. This is the only one. 11-]). Q. 200. 1 call yonr attention to paragraphs six anil eight of the contract, in which, as I under¬ stand them, it is provided that no suits shall bo brought by your attorneys, 'Elislm K. Camp, Esq., and Louis Hicks, Esq., against the American Graphophono Company. Can you state the reason’ why tho American Grnphophoue Company and its selling agents aro excepted from the parties against whom suits shall be brought? Mr. Hicks: Objected to upon the ground that no such provision is contained in the con- A. Yus, the exception referred to was made Lo¬ calise one of my connsol, Mr. Camp, informed mo that his business relations with the Graphophono people woro such that he would not bo willing to sign a contract with mo to prosecute any suits which might hereafter bo brought against tho American Grapliophono Company by the New York Phonograph Company for violation of its exclusive territorial rights, and one of the reasons which in¬ duced me to employ as associate counsel Mr. Louis llicks was that Mr. Kicks made no such require¬ ment, and would not be embarrassed by a request subsequently to prosecute the American Grapho¬ phono Company and its selling agents for a similar violation of tho contract rights of tho New York Phonograph Company. li-D. Q. 201. I understand, then, that Mr. Camp is one of tho attorneys of the American Graplio- 80 phono Company. A. I have no positive knowledge, 2U5 but my general belief is that ho transacts legal business for tho Graphophono people. lt-D. Q. 202. Wlion you say “grnphophone people,” you moan tho American Graphophono Company and tho Columbia Phonograph Company generally? A. I couldn’t distinguish which ones, but for tlie people who aro interested in grapho- pliones. lt-1). Q. 208. Hnvo any suits boon brought by tho Now York Phonograph Company against the American Grnphophone Company, tlie Columbia Phonograph Company, general, or any users or sellers of graphophones in tho State of New York? 200 A. Not yet. lt-D. Q. 20-1 . Please turn to the minute book of tlie New York Phonograph Company and read the resolution which authorized tho Executive Commit¬ tee to collect money from the stockholders about which you testified at tlie last hearing, giving the date of tho passage of tho resolution? A. I find in the minute book of tlie Now York Phonograph Company, under date of February 20, 1001, the notes of a meeting of tlie Board of Trustees, at which, among other tilings, occurs tlie following: “Mr. Evans from tho Executive Committee sub- 207 milted draft of circular letter requesting stock¬ holders to contribute financial aid to pay for office rent, services of secretary and other incidental ex¬ penses, and tho same was approved and the secre¬ tary was instructed to have the same printed and sent to every stockholder of record.” The letter referred to is appended hereto, dated February 25, 1901, and I submit a copy of the lettor. R-D. Q. 205. Please produce a copy of this cir¬ cular letter which was sent to the stockholders of tlie New York Phonograph Company in accord 208 :iii co with the resolution? A. This is the copy re- quested (producing copy), which rends ns follows: “Ni:w Yoisk I’uoNouitAt'if Co., Pauk How Huii.mxo, It! to 21 Park How, Hoorn OHii. Nuw YottK, February 20, 1001. To the Stockholders of the New York Phonograph Company. After a long period of deliberation on the part of the ollicers of this Company to determine the best 201) plan whereby the contract rights of this Company could he enforced against Mr. Edison and his sev¬ eral Phonograph Companies, wu are happy to in¬ form you that we have succeeded in providing for the successful prosecution of tile same in the United States Courts, by competent legal representatives, on such terms of" compensation as will entirely ob¬ viate tile necessity of calling upon you In contribute the large sums of money usually required in the prosecution of such important cases. The first step, already taken, was the filing in the Circuit Court of the United Status for the Southern District of Nuw York, on the 12th day of .lanuury, 1001, of our Hill of Complaint against Thomas A. Edison, the Edison Phonograph Com¬ pany, the Edison Phonograph Works and the National Phonograph Company, asking for an in¬ junction restraining those defendants from selling, using or otherwise dealing in Phonographs and sup- i plies within our territory, viz. : The State of New York, anil claiming damages and prolits in the sum of $225,000 for violation of our exclusive 15 year contracts, expiring March 2(1, 190)1, or subsequent thereto. This suit, which must necessarily be sustained against Mr. Edison and his co-defendants, and give 91 to our stockholders a proportionate return for the 271 money they have invested, is being prosecuted with vigor; and the feeble attempts of the defendants to justify or explain their action in disregarding the terms of our exclusive contracts show how weak . is their dufenso. While these legal proceedings are being ener¬ getically pushed, the Company, however, should he in a condition to maintain its oflices in a busi¬ ness-like manner; to provide for the services of a secrotary and otlior clerical aid to attend to the in¬ creased correspondence from dealers who have been notified of our action ; to prepare for local suits against them, to furnish legal documents, copies of 272 important papers in our possession, and other inci¬ dental expenses. Therefore, your Committee have decided to request our Stockholders to contribute financial aid to the extent of :i7;n> rata contribution of 20 cents per share, same to cover tho expenses before referred to. The amount so contributed by stockholders will be regarded as a loan or advance to be repaid out of the treasury of the Company from the proceeds of tho awards recovered from the defendants, and an obligation of tho Company to this effect will he issued to you immediately ou re¬ ceipt of your contribution, with interest at the rate 273 of six per cent, per annum. Wo enclose for your further information copy of notice being sent out to every dealer in Phono¬ graphs and supplies in our territory. Believing you will see the importance of promptly contributing this small sum for the purposes stated, and awaiting your response to this reasonable re¬ quest, we remain, Very respectfully yours, Jajiks L. Andk.m, Scott Tuemain,' L. E. Evans, Executive Committee.” Hs-cross-exa m in at Ion by Mr. Camp : H-x-Q. 200. Mr. Amlum, you lmvo testified to n proposition which you say was made by Mr. Hicks and Mr. Camp. Will you kindly explain what you mean by that, and if you received any letter from either Mr. liicks or Mr. Camp in regard thereto will you kindly produce the same and read it to the Examiner. A. The entry in the minute book where it speaks of propositions being submitted referred to the draft of the contract between myself and Messrs. Hicks and Camp which afterwards was outurod into. There wore no oilier propositions, verbal or written. lt-x-Q. 207. Were you authorized at any timu by either Mr. Hicks or myself to make any propo¬ sition to tlie National Phonograph Association? A. No, sir. Il-x-Q. 208. Please state whether or not you received a letter from Mr. Camp on the subject of an alleged proposition in regard to which there was some misunderstanding?. . A. I did. R-x-Q. 200. Will you please produce it and road it to the Examiner? A. I received a letter from Mr Camp, dated December 20. 1000, upon that subject as follows : “ Nnw Youk, December 20, 1000. , Tajiks L. A no km, Esq., Race Street and Arcade, Cincinnati, Ohio. Dkah Silt: I have your letter of the 12th inst., and in reply thereto have to inform you that the draft bill was turned over to Mr. Hicks for his perusal on the 14th inst., who still lias possession of it. Mr. liicks was very busy at the time, but will undoubt¬ edly give the matter attention at the earliest oppor- You will recall ronding from some minutes dur- 277 iug one of the interviews at my office which stated, in effect, that “ Mr. Camp’s proposition had been discussed and accepted,” &c., and that Mr. Hicks, who was present, concurred in my objection and criticism that the phraseology employed indicated that certain propositions as to the conduct of tlio cases had been made by me which had been accepted. As nothing of the kind occurred, and you came to me without the sligtest solicitation of any sort whatever, you will see that the minutes state the facts as they are as you promised to do when tlio objection and criticism wore made. I 27g . understand that I come into tiiese cases pursuant to tlio terms of tlio resolutions adopted at Cincin¬ nati, September 20, 1000, by the Fifth Annual Convention of Thu National Phonograph Associa¬ tion, which, among other tilings, authorized the special committee appointed at that convention to employ counsel. Notwithstanding the fact that I have repeatedly stated to you orally my absolute and firm convic¬ tion that no cause of action exists in favor of tlio local, or sub-companies, against_the American , Graphophene Company, or its selling agents, I wish" to place 'myself on record in writing to the 270 same effect in order to avoid any possible mis¬ understanding in tlio future, and to also be fully understood that if, at any time, the American Graphophono Company, or its selling agents, should be drawn into the litigation, my loyalty to its interests would make it impossible, without its consent, to continue to act for you or those whom you represent. I excepted it from the letter of attorney, or agreement, with you, dated Nov. 14, 1000, for the purpose not only of em¬ phasizing my opinion as to its liability, but also to prevent my being forced, by the terms thereof, "lost, positive' milliner that the proseiit. litigation eoncerns Tlioinas A. Edison, tliu Edison Phono- gruph Co., tliu Edison Phonograph Works and tile National Phonograph Go. only. If you do not fully eonriir in my understanding as to all of the aliovu be kind enough to lot mu know now wherein wo differ so that 1 may with¬ draw from the eases, if necessary, before it is too Nuw YottK, March 18, 1002. •% jI fr. Camp : ^ K-x-Q. 270. What answer did you make to Mr. Camp’s letter just referred to? A. I lmvo here letter dated December 22, 1000, written by me to Mr. Camp in reply to Mr. Camp’s letter of the 20th of Decern bur. The letter reads as follows : My Dkak Sin: Your favor of the 20th inst. just received and I urn obliged to you for the Information contained jegarding the bill of complaint now being propared in the Edison cases. I liopo when Mr. Hicks re¬ turns the draft of the bill to you tlieru will be no delay in filing the satrio. Regarding the matter of your employment ns counsel, will say that your letter states correctly, in my opinion, the basis upon which your contract with mo wns drawn, and I am willing to accept your statement of the circumstances relating to it, as stated therein, without further explanation. Hoping to hear that the bill has beon filed and proceedings commenced under it, T ronmin, Yours very truly, J A aits L. Andk.m.” R-x-Q. 271. Do I understand that at tlio con¬ vention hold in Cincinnati on September 25, 1000, the Now York Phonograph Company was repre¬ sented? A. No, there was no member present from the Now York Phonograph Company, the only representation being by letter from Colonel Evans as secretary of tliu company. _ H-x-Q. 272. is t ho National Phonograph Asso¬ ciation an incorporated association or has it any legal entity, so far as you know? A. It is not in¬ corporated and has no legal entity, as far as I know. It is simply an association of oflieors of 5 local phonograph companies, who meet for the purpose of advising and considering ways and means for the promotion of tliu interests of the companies, as I have already stated. R-x-Q. 27U. Referring to tile sale of goods in Ohio by tile New York Phonograph Company, was that mado with the consent or otherwise of the Ohio Phonograph Company? A. The goods that wore purchased for the Ohio Phonograph Company from tho New York Phonograph Company were purchased with tliu direction and consent of the Ohio Phonograph Company for its own use. R-x-Q. 27*1 . Was your contract with your attor¬ neys, wliicli appears on pages 7!) to 79 iuolusivo iu your testimony, uuiiio as a representative of tho Now York Phonograph Company, or as ropro- scuta tiro of tho National Phonograph Association? A. It was made as ropresontativo of the Now York Phonograph Company and not ns roprosoutativo of the National Phonograph Association. I dosiro to say that tho National Phonograph Association lias actud simply in an advisory capacity, and lias novor onturud into any obligations with mo or witli any of tho local companies in regard to tho proso- cation of any of these suits. R-x-Q. 270. And did that special cominittoe ap¬ pointed at the Convention of September 36, 1000, employ counsel? A. They have employed no coun¬ sel wliatevor as an association nor as a committee. They simply recommended tho employment of counsel, as the rocord shows. R-x-Q. 270. If I understand you correctly, the Now York Phonograph is to rocuivo -10 per cunt., the attorneys 40 per cent, and you to ruceivo per¬ sonally 20 por cent, of the amount recovered iu this suit; is that so? A. That is what the con¬ tract provides for, mid that is shut I understand is to be done and what I expect to receive. R-x-Q. 277. How about the injunctive relief prayed for; who is to derive the honelit or that, if you know? A. The New York Phonograph Com¬ pany will derive the bonolit of the successful prose¬ cution of the suit in the manner stated in the con¬ tract with them. R-x-Q. 278. Ho you know whether or not tho New \ork Phonograph Company lias miulo any contract or agreement of any kind in regard to the 40 per cent, and other bonolits which it may re¬ ceive as a result of this litigation? A. It lues made no nrrnngoinont, ns I know of, except tlmt stated 289 in the contract itself. R-x-Q. 279. Did yon make any proposition to tho National Phonograph Association from either Mr. Hicks or Mr. Camp or anyone representing them in nny way? A. Tho proposition from Mr. Hicks and Mr. Camp, which is roforrod to in the minutes of the National Phonograph Association, which I rend iu my previous testimony, consisted of tlic contract drawn up ready for signature be¬ tween me and my counsel, Messrs. Camp and Hicks, and was read to the mombers of tile asso¬ ciation for then; information uml to show what was being dono in prosecuting the suits of the local 200 companies. R-x-Q. 280. Hut subject to that (qualification that is all tiiat occurred? A. Tlmt was tile only purpose for which the contract was submitted, to give tile members of the Special Committee the in¬ formation and gut their advice and suggestions in regard to tlmt and nay oilier intermediate matter. Ihj Mr. Hicks : R-x-Q. 281. Under whoso authority and by whose direction was this suit brought? A. Undortlie authority of a resolution of the Now York Phono- 091 graph Company, and by virtue -of the contract entered into between the Now York Phonograph Company and myself to prosecute the suit as their representative. R-x-Q. 282. In tho conductor this suit, have yon actod its tile agent and oliicur of the complainant or as a principal? A. I have prosecuted the suit of tile Now York Phonograph Company nndor the terms and conditions of my contract with the New York Phonograph Company. R-x-Q. 288. It appears from your contract ol November 9, 1900, with complainant set forth in •os ami disbursements a saia equal lo 00 per iu of any ami all moneys you may receive or licet from any ami all of said parties by reason the prosecution, compromise, settlement ami ud* stment of the rights, claims ami demands" of u complainant; to whom will the remaining 40 r cent, of such moneys belong? A. To tlio New irk Phonograph Company. . H-x-Q. You say that the permanent and mporary injunction against violation of cotnplnin- t's contract rights prayed for in the hill of com- Hint iu this suit arc for the sole benefit of com- ainant? is that correct? A. That is correct. H-x-Q. 2Sf5. It appears from the contract of manlier M, 1000, set forth in your answer to -d-Q. 2 FuS, that the solicitor of record iu this suit to receive *2f> per cent, of the moneys, if any, re¬ vered upon tile claims and demands m question, id that. the associate counsel is to rocoivo 15 per nt. of said moneys, making a total of -10 percent, lie paid to counsel. Is this -lit per cent, to be lid to counsel to come out of the (50 per cent, to : paid to you for services and disbursements? A. comes out of the (it) per cent, that is to lie paid H-x-Q. 28ti. So that, there would remain for you i per cent, as compensation for your said services id disbursements? A. Yes, sir; that is right. H-x-Q. 287. Uxcepting the amount to bo received r you and the solicitor and associate counsel in is suit, and the amounts Which you have testified mplainaiit lias agreed to repay to its stockholders consideration of the contributions or loans made ’ them to complainant, 1ms complainant agroed pay to any one any part of what may bo recovered tins suit or may be recovered upon any of tile enums arm clomnmls set forth in said contract of 201 November 0, 1000? A. No, sir. H-x-Q. 288. Him complainant entered into any contract, agreement, or understanding whatever in regard to this suit, or in regard to any of the claims, demands or subject 'matter set forth in said con¬ tract of .November I), lotto, other than stdd contract of November 0, 1000, with you ami the contracts with tlie solicitor and associato counsel herein? A. It is not. H x-Q. 280. Has complainant agreed with any one not to prosecute its claims, rights and demands against the American Graphoplioao Company, tiie Columbia Phonograph Company, the Columbia Phonograph Company General, Edward 1). Easton or any other person or persons? A. It bus not. On tho contrary, the matter of future prosooution of all violations of its contract rights by the com¬ panies you have mentioned has been a subject of discussion in the Hoard of Trustees and attoflicially and oil various occasions-. H-x-Q. 200. Has not the past violation also been tho subject, of similar discussion, and do not the future and past violations now stand upon the same basis? A. They do. H-x-Q. 201. Have you made any agreement, ->07 either for yourself or on complainant's behalf, not to prosecute or cause to be prosecuted, any claim, demand or right now existing, or whichever did exist, in favor of complainant and against tho American Grnphophone Company, tile Columbia Phonograph Company, the Columbia Phonograph Company General. Edward 1). Easton or any other person or persons? A. I have not, nt any time. H-x-Q. 202. Is complainant and are you, as its agent and attorney in fact, free to prosecute any eliiim, right or demand now existing or whichever did exist in favor of complainant and against the 2i)d persons named in lliu preceding question, or any one or more of Ilium, or nny oilier person or per¬ sons? A. i nm, and the New York Phonograph Company is free to prosecute Ilium ninny time. R-x-Q. 293. tins nny Counsel been retained by complainant or by yon ns ils agent or attorney in fuel, to prosecute tile claims, rights and demands existing in favor of complainant and against the American Ciraphopliono Company and its selling agents, or any one or more of thorn, and if so, state wild said counsel is? A. Yes; I have retained bonis Hicks as counsel to prosecute on behalf of tile New York Phonograph Company nny suits which they may hereafter determine to bring against any infringers, including the gmphophonc company. lt-x-Q. 20-1. Has any agreement or contract over been made between complainant and thu National Phonograph Association, or nny committee thereof, or any person or persons acting for and on behalf of said association, in regard to the prosecution of complainant’s rights, claims or demands? A. There lias not boon any. The National Phonograph Association is nut known to thu New York Phono¬ graph Company except that a member of the Now 300 York Phonograph Company is a member also of Hie National Phonograph Association. The Now York Phonograph Company, in the prosecution of this suit, lias no relation to tlm National Phono¬ graph Association, except that thu association lias acted in an advisory capacity, as before stated, in regard to the prosecution of all local phonograph company suits. Il-x-Q. 290. Have you ever for yourself, or as an agent and attorney in fact for complainant, made nay agreement or contract with the National Phonograph Association, or any commUtoo thereof, or any person or persons acting for and on behalf 101 of said Association in regard to the prosecution of 301; complainant's rights, claims or demands? A. I have nut. 'lt-x-Q, 290. You spoke of a letter written by Hein iiul E. Evans, u mumherof the New York Phono¬ graph Company to the PHth Annual Convention of the National Phonograph Association, which met at Cincinnati in 1900: Was that a personal letter from Mr. Evans or did lie net for and on behalf of tile Nuw York Phonograph Company? Mr. Hayes ; This question is olijuctod to us the capacity in which Mr. Evans acted is a mutter of proof outside of the impression the witness may have. 302 lt-x-Q. 297. Do yon know where that letter is? A. T have several luttors from Colonel Evans wr!tton to mo. lt-x-Q. 298. I uni asking you in regard to this luttor? A. Yus, I have that letter. It-x-Q. 299. AVlioro is it? A. Among my papers at home, in lllooniliold, Nuw Jursuy. lt-x-Q. 300. Do you recollect whether thu letter was a personal lutter written by Col. Evans or whether it was a letter written by him us mi oiiieor of tile Now York Phonograph Company? Mr. Ifayes: Objected tons tile letter itself 303 is tile bust evidence us to whether it is a per¬ sonal letter or ono written as an officer of the New York Phonograph Company. A. I regard it as a personal letter. Il-x-Q. 301. To whom was it written? Mr. Hayes : Smile objection. A. It was written to James b. Aiidem, Cincinnati, Ohio. lt-x-Q. 302. Other than the letter of Col. Evans, referred to, I understand you to say that the New York Phonograph Company laid no representation at said Fifth Annual Convention of thu National ’heliograph Association; is that correct? A. It mil not; that is correct. R-x-Q. W Immi, in your answer to R-D. Q. 70 yon said “ It was agreed that suit should be Tough t on behalf of all of these companies against be various defendants who were trespassing on heir territory,” did yon mean anything more than ant it was agreed such suits should or ought to bo rotight as matter of opinion on the part of the issocialionV A. That is all. It was expressed as matter of opinion by the members of the Asser¬ tion. H-x-Q. HOI . Yon did not mean then by the use f the word “agreed" that any contract was ntered into? A. No, and no contract over was item! into. It-x Q. HOfi. In making yonr contracts with eom- lainant of October 22, 1000, and November 0, 100, did yon represent to complainant and its [Hears that yon wore acting as a principal and in onr own interest or as an agent and for and in to interest of the National Phonograph Associ- lion or any other person or persons? A. As an fan l on my own behalf and in accordance with the {pressed opinion of tile members of the National honogrnph Association as to wlmt should bo Tt-x-Q. HOG. Wlmt 1 meant to ask was whether in a king this contract, yon contracted for yourself ' as an agent Tor the National Phonograph ssociation? A. For myself wholly. The National heliograph Association has never acted in any ay except in an advisory capacity. I want that stinctly understood. lt-x-Q. 807. Now, then, did yon represent to o Now York Phonograph Company that yon ere acting for yourself wholly and wholly in yonr own interest? A. ics, nml the language of the contract expresses that only. H-x-Q. H08. I refer yon to R-D. Q. 180 and lt-D. Q. 182 and ask you whether it is not tho fact >as stated by Mr. Hnyes in R-D, Q. 182 that you misunderstood the question put to you and num¬ bered R-D. Q. 180? A. Thu record shows that R- D. Q- 180, a question put by Mr. Hayes was : “That contract slates that tho suit was to be brought at your personal expense” to which I answered: “ Asa representative of that committee.” R-D. Q. 182 says : “ You misunderstand my question,” and then my answer is given as corrected. 1 did mis¬ understand tile question R-D. Q. 180 in replying to it. lt-x-Q. HOD. Is it not tho fact then that when in the agreement with the complainant of November 0, 1000, you agreed with complainant as follows: “ ft is further agreed that the linrty of the first part shaljjiot.bo called upon at any time to pay any cost or charges incurred in any proceedings that may be instituted by tile said party of the sec¬ ond part to recover said damages,” you acted solely for yourself and not as the representative of the National Phonograph Association or any com¬ mittee thereof? A. I acted solely for mysulf. R.x-Q. H10. Did yon, prior to the making of tho contract of November 1-1, 1000, with Messrs. Camp and Hicks, consult with tho officers of tho com¬ plainant with reference thereto? A. I did. lt-x-Q. Hll. Did complainant through itsoflicors authorize or refuse to authorize you to agree with Mr. Camp that tho American Grnphophone Com¬ pany and its selling agents should not be prose¬ cuted on the complainant’s behalf? A. They so authorized me. (Question repeated.) A. Thoy refused to author¬ ize mo to agreo to any such exception. wlial? A. Hid oliicors of t.lm complainant, the Now York Phonograph Com puny, havu always as¬ sumed ami maintained that, tit tty had equal rights against the American (Irnphophonu Company and its associate companies as against tile Edison Phonograph Company and its associate companies, and in the discussion which arose about my con¬ tract with them, they refused to entertain any con¬ tract which would except the Gmphophone Com¬ pany from the prosecution of the suit against thorn for infringement, Imt put them both on the same basis as the contract shows. K-x-Q. til!!. Who were the olllcers at that time of the New York Phonograph Company? A. The olllcers of the New York Phonograph Company at the time of the signing of my contract wore II. M. Pension, president; Scott Tremaine, secretary, and L. E. Evans, vice-president. H-x-Q. ill-1. Do you know of any action taken by complainant other than the bringing of this suit, and since the1 bringing of this suit, to enforce and maintain its contract rights for the exclusive sale and use of phonographs and supplies within tile Statu of Now York? A. I do. A. Suits have been brought by the New York Phonograph Company against certain local dealers in New York and Brooklyn to enforce their ex¬ clusive rights. H-x-Q. 31(5. Can you state when those suits against local dealers were brought? A. I think about the latter part of April, 11)01. 11-x-Q. til 7. Those are the suits against Davega, dones, Douglas & Company; Foote, Pierson & Company, and A. D. Matthews & Sons, are they not? A. Those are tho ones 1 refer to. 11-x-Q. 018. Has complainant with reference to ion tho bringing and maintenance of said suits against 318 said local dealers, and with reference to enforcing and maintaining its said contract rights, sont cir¬ cular letters to phonograph dealers throughout tho Stnto of Now York? A. Tt has on several occa¬ sions. H-x-Q. till). Will you produce such circular letters and read them to the Examiner? A. I huvo here several letters, the first one being dated Fobru- . ary 1, 1001, notifying dealers of the infringements of the rights ; also letter of. February 11, 1001, for the same purpose. Also letter called tho Third -■•otiee to Dealers in phonographs and supplies, dated May lti, 1001. Also letter from Louis Iiicks 311 to Colonel L. E. Evans, President of the Now Eng¬ land Phonograph Company, dated duly 2, 1001 ; and a circular letter, dated duly, 1001, signed 11. M. Puustou. President, Now York Phonograph Com¬ pany. Tho letter of Mr, Funston incorporates as an enclosure the previous letter of Mr. iiicks. The letters are as follows: Ok kick ok tiik Nkw York PitoxocitAi'ii Cost- I'A.NY, Hoorn 033 Park How Building, 13 to 21 Park How, Now York City. ’ February 1, 1001. Notice is hereby given to all persons using, buy¬ ing or selling Edison Phonographs, Hecords and Supplies, within tho State of Now York, except through or by tho consent of the undersigned, the exclusive licensees under tile patents of Thomas A. Edison for the State of New York, that they there¬ by render themselves liable to us for damages, under our contracts with the North American Pho¬ nograph Company, of October 12th, 18S8 (subse¬ quently rat! Mud and conlirmed by Thomas A. Edi¬ son, the Edison Phonograph Company, the Edison 310 Phonograph Works and others), mid of February 0, 1880, giving ns tin; exclusive right lo use, rout or sell to otlio rs or ttjse within the Statu of New York, Phonographs mid all t lie supplies necessary for the saiupj until Milfoil 2 Fifth Avenue, Now York, evidently designed to quiet the reasonable fears of its customers, created by our circular let- ter of February 1, 1001, sent to all phonograph dealers within our territory, viz., thu Statu of New York. We reiterate our intention to enforce, through thu Uuitud Status Courts, our exclusive right to use, rent or sell to others to use within the State of New York, phonographs and supplies necessary for same, under our contract of Octobur 12, 1888, Ci and February 0, 1880, and we repeat our warning to dealers, who are infringing thu same, to imme¬ diately desist. The statement in the circular referrud to, that y^l there is no basis for our claims, we leave to judi¬ cial determination. As soon as we can get service on all the defendants, which they seem to be trying to avoid, there will bo no delay on our part in pushing thu case to a successful issue. Our con¬ tracts are so strong and unequivocal in their lan¬ guage that they cannot possibly be defeated by the defendants, and wo hope they will meet us without attempting further evasions. In the case of the Ohio company referred to in their circular, their claims were withdrawn, and no beyond the jurisdiction of tliu Ohio courts, and and could not. bo ruaohud, so that the merits of those contracts have never yet been judicially determined. Thu National Phonograph Association, repre¬ senting all the local Phonograph Companies of the United States, therefore decided, at its tnueling held in Cincinnati, 0., Sept. sr>, 11)00, to first Press the suits of companies located where the de¬ fendants, Thos. A. Kdisou, the National Phono- Uo. and others, could bu reached, and the bill filed by this Company in tliu Circuit Court of the United States for the Southern District of Now York, for injunction and damages, was tliu result of such action. This suit, which must necessarily be sustained against Mr. Kdisou and his co-defendants, will render every unauthorized dealer in phonographs liable to us in heavy damages, and our object in sending out our former notice of warning was to give such parties an opportunity of continuing their business undisturbed by obtaining our au¬ thority to dual in phonographs, without which 32-1 their liability must continue. The responses we have received from dealers lead us to believe that they are willing to co-operate ...tl. maintaining our contract rights. The National Phonograph Co., by C. II. Wilson, Manager of Sales, state in their circular of Fubru- : “ H atiy threats are made to you, notify us at once, and wk wh.i. po tiik ui--st ” It is usual, in all cases of this nature, for the principal to give a bond to each customer, guaran¬ teeing him against loss by suit or otherwise, and wo advise that you exact such a bond, provided you place any reliance upon their ability to pro¬ 100 tect you against any action which may be taken 3aB by us. , New York Phonograph Company, I3y II. M. Kunston, President. Attest : Scjorr Trk.main, Secretary. Ki.isiia K. Camp, Louts Hicks, Of Counsel. Third Notice to Dealer* In P/tonot/rap/t * and Supplies. " 320 OkEIOE OK THE New York Phonograph Company, r>21-f>22 Park How Uuilding, 13 to 21 Park How. New York City, Mny-13th, 1001. On February '1st, wo sent out- a notico to all per¬ sons using, buying or selling Kdisou Phonographs, records and supplies, within the State of Now York, except through or by consont of the tinder- )6 signed, they being the exclusive licensees under the patents of Mr. Thomas A. Kdisou for the State of New York. This notico informed you that you would render yoursulf liable to this company for 827 damages. On February Oth, following our le'tter or notice, Mr. C. II. Wilson, Manager of Sales, and representing Mr. Kdisou, sunt out a notice to the trade informing them that our action would in no way affect liny purchaser of their goods and that you should not be misled by any circulars or letters sent out by this company. Mr. Kdison's agent also stated that they did not anticipate that we would continue the prosecution of our suits. If we wore ready, they wore also ready and glad to meet us in any court that we might select. Wo regret lo state that Mr. Edison's agent was not very well advised when ho sent out such a cir¬ cular, because Mr. Edison and all those connected with him had been evading and avoiding the ser¬ vice of legal papers, and it is only recently that wo have been able to make service upon tile Presi¬ dent of the National Phonograph Company, which Mr. C. II. Wilson, who signs himself as Manager of Sales, represents. We have commenced action against several of the largest dealers in New York, amongst whom we might mention: A. 1). Mathews & Company of Brooklyn, Douglas & Company, S. ]3. Da vega, and a number of others. It is our intention also to commence action against a number of up-State Wo desire to state that the Columbia Phono- graph Company, who own all the rights for the District of Columbia, Maryland and Delaware, as we ‘lo for the State of New York, recently brought au action in Washington against the National. Phonmjraph Com pa in/ and Messrs. Whitson Brothers, for infringement of their territory, and Mr. .lust ice Bradley, who is one of the ablest men on the Bench of the Supreme Court of the Dis¬ trict of Columbia, granted an injunction against both the National Phonograph Company and Whitson Brothers unjoining them from doing business in the territory of the Columbia Phono- graph Company. The opinion by .Justice Bradley m a very elaborate one and we enclose herewith a synopsis. The contract which was interpreted in this suit by Justice Bradley under which the Columbia 1 heliograph Company held their territorial rights ,S 1 e"t,“,I1 1,1 with tbu contract vesting in ns the exclusive selling rights under Mr. Edison's phonograph patents in and for the State of New f 111 York, and our suits against him and others are to 831 bo prosecuted with the utmost vigor. The decision in the case of the Columbia Company forms a precedent which should constitute a warning to all those who persist in infringing the rights of the New York Phonograph Company. Nkw Youk Piionoo ha an Company, A Dost : By II. M. Punston, President. L And km, Hi.isiia K. Camp, Coins Hicks, Of Counsel. 882 Denis Hicks, Counsellor at Law and Proctor in Admiralty, Corporation, Patent and General Daw, 25 Pink Stukkt. Nkw Yoiik, July 2, 1001. Col. Lkmuki, TO. IOvanh, Pres., Now England Phonograph Co., 13-21 Park Bow, New York. My Dkah Sin: I beg to inform you that on the 28th day of J une, 1001 , a decision was rendered by Hon. George 333 Gray, Circuit Judge of the United States, sustain¬ ing tile Bill of Complaint liled by the Now England Phonograph Co. against Thomas A. Edison, Edison Phonograpli. Co., Edison Phonograph Works, and tbu National Phonograph Co. in the District of Now Jersey and overruling the several demurrers died by the defendants, to the Bill of Complaint. Judge Gray holds that the grantor of a sole and exclusive license under a patent cannot himself in¬ fringe upon the license grunted. The same point was hold by Judge Bindley on the 30th day of April, 1001, in the suit of Columbia Phonograph Co. against National Phonograph Co. in the Dis¬ trict of Columbia, and a motion for preliminary injunction was grunted by .Judge Uradloy. Thu emphatic decisions of Judges Gray and Urndloy make it clear that the sidt.s for injunction damages and profits brought by the New England Phono¬ graph Co. and the New York Phonograph Co. against Thomas A. Edison, Edison Phonograph Co., Edison Phonograph Works, and National Phonograph Co., will, in all probability, be suc¬ cessful. The cause of action slated in tho Hill of Complaint having been sustained and tho several demurrers thereto having been overruled by Judge Gray, the defendants, Thomas A. Edison and tho others above named, must now answer the Bill of Complaint, a matter which they will liud itdiflloult to do, since the allegations of the Bill are true and since the Court has held that tho allegations con¬ tained in tlie Bill constitute a cause of action. Counsel propose on behalf of the New England and the New York Phonograph Companies to bring the suits speedily to final hearing and to ask for an in¬ junction in addition to a decree for damages and profits. Yours very truly, Bouts Micks, Of Counsel for New England Phonograph Co. and Now York Phonograph Co. New York PiioNooitAfit Company, Park How Buii.dino, . Pi to 21 Park Row, Rooms 521 and 522 Telephone 3(181 Cortland. Dear Sir : — New York, July, 1901. Wo herewith bug to hand you copy of a letter Received from counsel who is acting for both this company and the New England Phonograph Com- US I he cases as decided by both J udge Bradley and 837 Judge Gray are identical with that instituted » against the same parties by this Company. The letter of the counsel spunks for itself and it is therefore, unnecessary for us to enlarge upon it! W o believe that you will agree that tho present management are doing all that can be done to ad¬ vance the interests of the Company and obtain for it its rights for which a very large sum of money was paid. J lho oflicors of the Company are working without compensation and the subscription asked for (which is small) is intended to meet tho current expenses of^our office, such as typewriting, postage, rent, 338 If you have not already done so, wo trust that you may see your way clear to send us a check for your subscription. We remain, Very truly yours, M. M. Funston, President. $ R-x-Q. HID. You have testified that thopresont Board of Trustees of complainant includes JohnP. Haines, William Fahnestock and W. Seward Wobb; were not these gentlemen members of tho first Board 999 of Trustees of complainant? A. They were. R x-Q. ,120. Is not the John P. Haines referred to tho same John P. Haines who is mentioned in the bill of complaint heroin as having secured tho contract of February 0, 1889, from tho North American Phonograph Company for complainant’s predecessor, tho New York Phonograph Company? A. It is the same person. R-x-Q. 321. In your answor to R-D. Q. 237 you read from the minutes of tho Executive Committee of tho National Phonograph Association a state¬ ment to the effect that you submitted and read “Thu writ lun proposition from Mr. Hicks,” and jn your answer to R-x-tj. 207 you say that, you were never authorized at any timo by either Mr. Hicks or Mr. Camp to make any proposition to the Na- tional Phonograph Association. Now, I ask you whether tile written proposition referred to in your answer to HD. Q. 207 was not simply the draft of tlie eontraot of Novuutijer id, 11)00, entered into between you and Mr. Camp and Mr. Hicks? A. That is what it was. R-x-(J. 322. Was not tin; draft in substantially tiie same form that it was in after having beun signed on November 1:4, WOO? A. It was. ll x-Q, 323. You have testified that tile contract of October 22, WOO, with complainant was can¬ celled and the contract of November 0, W00, was substituted therefor by reason of an omission made in tlie contract of October 22, WOO. Was not one of the omissions made in tho contract of Octo¬ ber 22, WOO, the failure to mention tlie claims of complainant against tlie American Ciruphophone Company tincl tlie Columbia I’houograph Company? lie-direct examination by Mr. Hayes : H-l). Q. 32-1. Your information about thoafTairs of the New York Phonograph Company urn of your personal knowledge only since the time you be¬ came connected with it, are they not? A. Ho you mean connected with if as an officer? HD. Q- 325. Connected with it as an officer? A. No; 1 have information previous to that time. RD.Q.320. Well, was not a great part of your information as to the affairs of the Now York Pho- nograph Company before you became an officer of it derived by you from conversation With former officers and by an .inspection of the books of tho company? A. Principally. 115 RD. Q. 327. In nnswor to one of tlie questions 343 you spunk of Mr. Tremaine as secretary of tlie company; plcnso look at tho minute book of tho company and see if you were not mistaken in re¬ gard to that, and whether lie was not treasurer of tltu company, and state during wlmt- timo lie was secretary and wliut timo lie was treasurer of tlie company? A. 1 find by referring to tlie minute book of tlie Now York Phonograph Company that tlie minutes of tlie meeting hold October 22, WOO, were signed Scott Tremaine, Secretary; also tlie minutes of tlie meeting hold November 11, WOO, are signed by Scott Tremaine, Secretary; also tile minutes of the meeting of February 20, 1001, are signed Scott Tremaine, Secretary. At tho meet¬ ing of February 20, 1001, at 3.30 i*.m., I find that Scott Tromaino was ulected treasurer of tho company. R-I). Q. 328. Who was elected secretary at that meeting? A. At tlie meeting of February 20, 3.30 ]*.m.? RD. Q. 320. Yes ? A. James L. Andem. RD. Q. 330. In your testimony in this case you spoke of L. 15. Evans as being tlie ex-secretary of tlie company; was he over secretary, and if so please state when lie was elected and when his office 3'.15 terminated? A. L. E. Evans was at one time Sec¬ retary of tlie New York Phonograph Company, but tlie last position that lie held on the Board of Trustees was that of vice-president of the company. R-I). Q. 331. When was lie elected secretary _ when did that office terminate and when was lie elected vice-president? A. 1 find by tlie minutes of tlie New York Phonograph Company that at the meeting of tlie Board of Trustees of February 24, 18U9, L. E. Evans was elected secretary of tlie com¬ pany, which office lie held until the meeting of • iiiMd mill omcu until tli 0 uo""n of tlli!4 >'«««•? A. Vos until the olootion f two present year. HP. Q. 33(i. win. was till) secretary befot l-ivans? A. Mr. bewis A. flregory. H-IJ. Q. 337. Who preceded Mr. Trunmine a treasurer? A. Mr. Lewis A. Gregory. Mo w» noting as secretary and troasuror, which -wa allowed by the by-laws. H D. Q. 338. And who did Mr. Houston succuci 1L“I 1 1 L ' 1 s l«»t? A. Mr. Houston sac eood cd Mr. S. F. Noves. bnimO.’* ?’ v” y°U With a" tboshih w ti li?' !r °,rk Companj fcl "at lln. olhcurs of the corporations, who llu m b, i V Sll“U? A’ Yu**’ that ia\ o been brought s.nco my connection with the company. l«H.‘ uieQ|'ie,‘1!l tIUV° otl,ur Sllits been brought ■• a the hve that you have mentioned? A. I do - ‘ any except those— except the live local , as we call them, and the one principal suit in ho United States Court. '"iJ ■»■* Wl « m.u , 117 similar linns to these suits about which you have 349 been testifying? A. I find no record of any. H H. Q. 349. I didn’t ask you whether you found any record of it. I asked you whether any Slid, suit had boon brought? A. I think not. H-D. Q. 343. Do you know whether any such suit has or has not been brought? A. Well my answer is tl.at I don’t know of anv such suit or remember any such suit having been brought. H-D. Q. 344. Have you ovor heard of any such suit having been brought? A. I have heard of such a suit being talked of being brought. H-D. Q. 345. From whom did you hear of such a suit? A. From my attorney, Mr. Hicks. ffi0 a H-D. Q. 340. And what did Mr. Hicks inform \ you ns to tho condition of that suit, and also as to / ^ any other suitsof similar character? A. My recol- \ . . ,.’/k> lection is that Mr. Hicks informed me that a sum- I I / '"ons had been served upon Mr. F. M. Prusoott \ l'- and also on a Mr. Hawthorne, of tho firm of Haw- , ,/ (. 1 'orne & Slieblo, but that no bill of complaint had ^ been tiled or served against either of tlioso parties. 1 K-D. Q. 347. In your answer to one of the ques¬ tions you say that tho right which tho complain¬ ant in this suit is trying to enforce in this suit and other suits is for the exclusive right for the sale ar,i and use of phonographs in Now York State. Please stato what a phonograph is? A. The best definition I can give of a phonograph is to put in evidence a book published by me in 1890 entitled ! . ’ S , “A Practical Guide to the Use of the Edison j Phonograph,” by .lames L. Andom, president and Vv i general manager of the Ohio Phonograph Com- | j) ( Pauy. It states fully what the phonograph is, tho | / / “ different styles of phonographs, the use of the dif- ' ferent ports and everything that at that time could be said or known about tho phonograph. K-D. Q. 348. Have you one of tlioso books with ly office, which I nhould .von? A. I lmve one at m ho happy to presold. 1?-D. Q. !M0. Will yon produce it at sonic sub- sequent hearing before this testimony is closed? A. 1 will do so. (Signed) James I,. Andkm. Adjourned to Wednesday, March It), 1002, at 2 Nnw Yoiik, March 10, 1002. Met pursuant to adjournment. Present— Counsel as before: .TAMILS h. ANDEM, re-direct examination con¬ tinued : By Mr. May ex : 1M). Q. OfiO. In response to tile last question at your examination yesterday, you produce a copy of the book written by you to which you referred at tl t c\ ii ti u is that so? A. I do. The book produced by thu witness is offered in evidence and marked “ Defendant’s Exhibit 1, March 10, 1002, .1. A. S., Ex’r.” Q-D. Q 1)01. I understand that you produce thu treasurers report as to the condition of the New iork 1 honograph Company as of March, 1001, tins report being the report to which you have re’ ftnt.1 i.. jour examination; is that right? A. Yus, except that the report shows. receipts and disbureu- me,tsrro"i |.ebnary 28, 1001, to August 10, 1001. 'S t,1U reI,ort uiade by the ticasurer to which you have referred in your pre¬ vious testimony? A. That is the report.' and in l° is 0'ruml in widoncu • i Mxl,ibit 2. Mur. 10, lUU“' J- A- s-> ^ and is as follows: Defendant’s Exhibit 2. M a milt 10, 1002. — J. A. S., Ex’u. NEW YORK PHONOGRAPH CO. TIIKASUIIKU'S KKPOKT. 4 At n PimimimaiKSTa kiiosi Kkii. SS.lOOl, to Aun, Vouclicre on flic. 8. Tiikmai _ Trci NEW YOIIK PIIONOOIIAPII CO. . testimony ye.stmluy. v< K-O. Q nn:}. Please produce that? (W itncHM produces letter.) »'"l sigimLn-o? Vl'Vdo ^ BVn,"‘’ l‘'UUl"',i 1 i! ' ini IjX r> Enroll 10, 1002 ” 1 lie letter is ns fniintuM . Nkw Yokk, September 22, 1000. : “•I. L. And i:m, Esq. , Cincinnati, 0. IIkau Mil. Andk.ii : ATuoli to my regrot I find Unit it will Im qnito impossible for me to get out to the Convention, certain important business matters requiring my presence here next week. 1 have already advised you in a former letter as to amounts paid by tlio local Companies, and I h,lvo papers to substantiate same. I also have a number of papers which T know will be vory useful in any proceeding which the local Cos. deride to 3 lake and such papers will be at their disposal. JJ. I "'ns at tho Convention I should suggest the appointment of a Committee with power to act in the milking of demands upon Mr. Edjson, and such Preliminary work as may ho necessary before going into any legal action, our several companies. N. Y. 'iliiJL JL Jiiivo...neyor reeogn ized the National Phonograph Co., nor do I believe that they would- have any standing in Court as against any of tho local companies. When tho North American Co. went out of existence, Mr. Edison bought only the assets of the N. A. Co., and if ho intended to :n carry on the business ho could only do so by pro- tooting tbo rights of the local Cos. When tho local companies wore formed they bought the solo right to uso, sell and vend in their respective Terri¬ tories. Tho N. A. Co. reserves the right to supply them, and Edison or the Edison Phonograph Co. reserve the right of manufacture. After tbo failure of tho N. A. Co. tho Local Cos. should have banded together and formed a parent Co. of similar import to the N. A. Co. who could lix prices, terms, &c. I do not think it is too Into to do so now, and if Mr. Edison will not supply upon the terras which ho was to .supply t|l(! , ,.A' c'*-> tll,! CO, will Imvo to nifr. I he iov(. that there is no Court hut whnt would up. hold such a course. Each one Co. would then con- trol its own territory. I have recently received estimates for the mfr. of the different forms of nm- < nms VM Home Standard md (ieni I find that the> can he furnished complete for Home $0.50, Standard $7.50, Clem >5.-10. If Mr. Edison will not supply the Parent Co. as outlined above, then of course wo would have to mfr. 1 do not know that I can say any more except of in vsulV ii! •mv.'il'-'" ll,l!VU ll"! ll,!,lrt-v co’°peration i !! • . "ng 11111 V decide to do, number of the slocklmldersb, 2," UhJSSk v„!r-n. |h" r°n lamU,a (,{ t,1L‘ Cos- 1 wish that * ", "<;t as °111- lepresentativo. Whatever expenses have been incurred both the Now York mid the Now England will bear their share!' Regretting that I am no. to be with you on Tues- f!'L!!ain'Vl gl° ^ rU,Me",bprL“1 nil Wends, Very truly yours, H. E. Evans, Secretary of New York Phono. Co. “ “ New England “ « KWly send me full report of proceedings.- receipt g’ivtn°' to^sto ckhol 1 C°r'y ,0t 1,10 fonn of to the ex noiises „r .. !?er8 'vll° «ontributed Company? A. I have."”* W Y°rlt Pll0,loK«H>Ii R D. Q. 357. Pleuay produce it? t t i 127 0 ‘•Ornmc ok tub Nkw Youk Piionooisaimi Com- 370 13 to 21 Park Row, Nkw Youk, . . . 1001. This is to cortify that . has contributed tho sum of _ ’ . Dollars, being twenty-livo cunts per share on . . . shares of tho capital stock of this Company, as per our letter of February 25, 1001, and we hereby agree to pay tho same to . with interest at tho rate of six percent, per annum upon tho award of any sum or sums which may be made to this Company arising out of suits now ponding for 380 recovery of dnmages undorits contracts with tho North American Phonograph Company. Nkw Youk PiroNooiiAKii Company. % . .... Treasurer. Attest: Secretary.” R-D. Q. 358. I understand that all of tho stock¬ holders who made this contribution to the treasurer of tho company received a receipt of that charac¬ ter? A. That was the instruction to tho treasurer, and I think tho treasurer observed the instruction and sent such a receipt to them. r Rdb Q. 350. You are a stockholder of tho New York Phonograph Company? A. I am. R-D. Q. 300. From whom did you receive your stock? A. From tho Company. R-D. Q. 301. Who sold you tho stock? A. The stock was sold to mo by Col. Evans. R-D. Q. 302. In whose nnme, if you know, did the stock stand before you received it? A. Tho I . , - „ . ml that, your stock I ,l"‘ lN,,'v ' <1,k Phonograph Company was trails, remsl to you by Co!. L. H. Evans; is tlu,. right? A. Hint is right. 1M>. Q. !)IM. When did yon gut that stock? A. H was pluvious to my elekfon as a trustee, but the dale I could not statu from memory. H-.C. Q. U«r,. How many shares?’ A. Ouu sliaru. ltd). (.i hull. Thai is all thu stock you hold in V mi""’ • 01 k "honograptj Company— oau share? A. I hilt is all, only mm share, lie'eross-exu minution by Mr. Camp : K-X. Q. 3U7. Mr. Amlum, did you ruprusont the , i ork 1 honogra].h Company in any capacity 2fi 'luouv" An‘v ‘‘m1 V Ci,,ui,,,l,,t.i 0,1 September f A* I had no authority to represent. Tv T-um «'r Y°rk Company. H.A q. «««. Thun, did you or did you not com- plj ' ill. the request contained in the letter fro... ^ yo ,iooo,,'t°ir l,l;causu it was a personal let- t ’ "nd 1 111(1,1 1 see that there was any authority 884 conferred upon me by the company to do so It was merely an informal letter. that ciin ven lion !i*K j f 1 ul>l L1!,'L‘" 1 '"O’ company at . 110,1 • Jr so, "hat company did you represent? A. Ijepreseiited the Ohio Phonogmph ^»y, as far as the compare h^ggl (Signed) .Jamus L. Andkm. Adjourned to Monday, March 31, 1002, at 11 a.m. Nk'V Voiik, March 31, 1002. Adjourned to Tuesday, April 1, 1002, at 11 a. it Nkw Yoiik, April 1, 1002. Mot pursnnnt to adjournment. Present — -Mr. IIavks and Mr. Ca.mi>. EDWARD D. EASTON, called and sworn as a witness on behalf of defendant, testified as follows : Direct examination by Mr. Hayes : Q. 1. Please state your name, residence and occupation? A. Edward D. Easton; residence, Areola, New Jersey ; occupation, lawyer, President of the Ainenenu Gmphophonu Company and six . 0tllul: tmmhine compauies'aiid allied' coiii: ! putties. Q. 2. Please state thu names of these other talk¬ ing umcihino companies of which you have spoken? A. I he American (iraiihophone Company, Colum¬ bia Phonograph Cmnpany, thu Columbia Phono¬ graph Company General, The Columbia Phonograph Company Limited °r Germany, the Volta Grapho- phone Company, the Globe Record Company and the Burt Company. A I'liu American Graphophonu Company, thu Columbia Phonograph Company and the Columbia Phonogmph Company General aru corporations of 3 " hat. State? A. Of West, Virginia. Q. -1. In what business is thu American Grapho- phono Company engaged? A. In thu manufacture and sale of talking machines and accessories. Q. fi. Wlmt is the special character of talking machines manufactured by the American Grapho¬ phonu Company? A. Thu A merman G rnphophono Company owns the fundamental patents under which all talking machines' now oil the market are made, unless they be Infringements ; that is to say, all so-called phonographs and graphophones are made under these fundamental patents. ;,V: Al * 1(1 Hull,' il ntor of ilii* im'1 s . . Q- 8. Tims,; pat, ;,its to which you refer now nr,, 1,10 AuM-ric-nn Gniphophone Com- jHiny. A. rliey nro. Q.O. Howls Um ty,u f ni t h i ii inn mi fact ii red •' ‘ , Al",;n,';lM ("’«pliophon,i Co, mini iv closer . . A- U kn™« l-ytlie m„„o give :)8o ^ United States Patent Ofilce to nil talking 'i;;: "7 ,,,ark1u")'j “»‘l Involving the common * ; Sm f^‘I,ll01,l,0,,-': lhnl •" tool, Ideal a o n f «H these machines. ' la.t ,,s ,lllfi 0 1 • l 1 loinlo ” to hml >01, refer/ A. The M^mTTSJ^dnc. SnlfSt ; "* ^ f"”" Q 1J The machine known to the trade as the A N ; "SmS aUylia« ,,1,1(le >n talilet Tm 1. , :‘l<;- "'.lncal u,b,Bl«"d with a Hat 300 record I tht\' n"* 0ll^llla^ intents show a Hat G o v "‘k ,'j1! wa" '!«» r«m, made. Q- IS. M hat talking machine is now on sale to c;m5^dnr"K71'i£i<;;;1 T.oriIs oU,,,r t,mM th« National Phonog^iiph luompnny is* the'onh^oiio *1 Know of in the Uni tod Slates. * ^ AQith‘cS r,no iH that machine known? m-aiTi- it ’ y, n'V'1 as th,! Phono- ft- M111 ’ ft la-!L grapJmj)li[)nL.. tl,e Natioilal'p!' ^ “‘l tfiS "mrkoted by Utu" a Phonograph and a gniphophone. i mean this question to got from you the general 301 trndu designation of those two machines and how they are distinguished by the trade? A. I think in the trade at largo the terms are used inter- c]|aiigeably that is to say, many men call a grapho- ’phono "ii phonograph, and nice term. G. 1(5. Is or is not the type of talking machine manufactured by the Edison Phonograph Works, and put on the market by the National Phonograph Company, generally known to the trade as a phono¬ graph? A. The dealers know it by that namo. Q. 10. Mow about the public? A. I think titc public has not a very clear idea on tlie’siibjeeK ~ " Q. 17. In the same way", is oris not the typo of 302 talking machine manufactured by the American Gniphophone Company and put on the market by tlio Columbia Phonograph ■ Company General, known as a gniphophone. A. Yes, to the dealers. Q. 18. And how about the public? A. As I say, I think the public is not very .clour as to the tTfitoroncns’, if any.’ Q. 10. Then do 1 understand from your expori- once in tile talking machine business by tlte public tlio typo of talking machine sold by the National Phonograph Company and tlio type of talking in, .cl., no- sold by the Columbia Phonograph Com- 808 puny General are not differentiated by mime. A. Mo»bt if the public 1ms very clear ideas on the subject. It is common to hear the machines mhT~ ■'called'; ‘ . . - . . . . - . Q7"20T "Then I understand that botli these types of machines are really graphophonus and differ oaly ia_-buillftj1"tl 0,1 the market by differuntjonTT panics ; is that right? A. That is my uiuierstand- mg. They differ also in the names given by the companies who make them. Q. 21. Whntnro those names given by tlio com- panics who make them? A. Thu machines mar- 3n'l kete.l by tho National Phonograph Compunv nr culled phonographs ; the machines manufacture, by tlie Americnn Graphophone Company nre mtinui graphophoiios. Q. 28. What relation him the (I I i I 1 , Kcnph Company General to the American Graph, phono Company* A. The American Gmphophon ""'US the -stock of the Columbia Phom gi.ipli Company General. C. a:t Does the American Graplmph.mu Cot* pany sell gmphophones or tablets or records di tu,Ttly IO rh<* A' T° 110 considerable ox Q. a-l. To what, extent does it sell them? A mere is no invariable rule on that subject. It doe soli to .some extent. Q. an. To "'hat. extent? A. Well, I conkin' tell j o'* without an examination of the books; no to a very largo extent. A*.1?'80: A,;c ,lms" miics made to a \ s] 1 ohm ... of customers, such as certain corporations o IS tlm sale general in character? A. Th'o Amur) big directly!' 10,113 ‘,OU#8Mro» sell Q. 27. Hy general selling you mean sellin.r , !)!)(! the public? A. Yes. J ( 'om nan v !! Am,!ri<:“" Clniphoplion. 0 Ulcus? A. Atl3ridgeportmUlU ^ t!ltl“ir °f tl10* Q. 80 The sales then to which you refer are 1 1111 ' u'S . i”"r '“'"“-O—.i phono Company? A. Tt is one of tlm solliti" ! agents. Q. 112. What other selling agents has tho Amer¬ ican Oraphophone Company? A. The Columbia Phonograph Company and tho Columbia Phono- graph Company, Limited. Q. 88. I understand tho Columbia Phonograph Company, Limited, sells only abroad ? A. That is a corporation orgai/.ed for tho purpose of opomting in Germany. It was organized under tho laws of Germany. Q. il l. Tho Columbia Phonograph Company does business, does it not, exclusively in tho District of » Columbia and tho Status of Maryland and Deln- ' "•nre. A. Yes. Q. ilfi. And is it the exclusive soiling agent of tho American Graphophone Company in thoso ter¬ ritories? A. I think so. Q. UO. Don’t you know so? A. So far ns I know it is, but it would not bo a point of great im¬ portance. That is a matter entirely in the option of tho American Graphophone Company; that is to say, tliero was no contractor agreement orront- Q. !)7. T understand, then, that the Columbia Phonograph Company is the exclusive enlHng agent of tho American 0 rn pliophono Com pany i n_ the territory referred to only so long ns the Ameri- can Graphophone Company wishes their relations to continue?" AT Precisely*. : Q. 88.' There is no contract between the two companies that gives the Columbia Phonograph Company any exclusive rights in those territories? A. Not a line. Q. 80. Tho Columbia Phonograph Company General, I understand, then, is the exclusive sell¬ ing agent of tho American Graphophone Company throughout the Unitod Statos other than tho terri- lory i„ which the Co . bin Phonograph Compim ; rI,s; lst;llal A. CI«I .orally speaking, tha / !“ ,l;l1,LV •»'« "•"•iKiutlon there is ns in the case ■ . ,llu Phonograph Company; that is a ' 1 "Xl-tliig entirely at the pleasure u ; j the American Graphophonu Company. There nr . no contract relations. • Q. 4(1 Ant yon entirely ftuuiliar with the affairs rim A inert can Graph j.hpuu ( mpany? A. I think so, generally. J ‘ (£l/ SSut: PboaaBnpi o™™ sio,iv,2;uf " «rHi.,,1i(1 do^" **«<•« m imPnm. companies. 11 'U|,a,S‘ L'nt I1,Kl of those rH;?VVb" « thU tnmurar of lll« Ameriean Smith 110,10 Compn,,y? A' Willi»» Herbert Q. 44. Who is the treasurer of the Cnlnmi,.,. i;rS-i!1 Co,ll»lil,-1Q*™' Gei';,y,o r, Co,r'ii com,!::;: tlm si.ii I ,ILS -Ij' Amlum 1,1 conneetion with "J2* !v“,0ib00,ka °f Ul° ™"'l>a'»y5IUSAU1Yes'U Pl-onogntph Company £25? A. are two vice-presidents, Andrew Bovine and R. V. 403 Cromelin, nod a secretary. Q. ho, Aro yon familiar with all agreements that have been made by the Colombia Phonograph Company with James L. Andom or the New York Phonograph Company? A. I know of none. Q. 51. I nssntno then that some contract might have been made between the Columbia Phonograph Company General and Andom or the New York Phonograph Company about the existence of which yon would not have knowledge? A. That could not he, lint I recall no such agreement. I presnmo yon refer now to a formal written agreement. 404 Q. f>2. I refer to any agreement or understanding either written or oral which would bo binding on the Columbia Phonograph Company General? A. I am certain the Columbia Phonograph Company General has made no such agreement. The Colum¬ bia Phonograph Company General has never taken Part in any of the proceedings which led up to tho situation you no doubt have in mind. Q. 53. What money, if any, has tile Columbia Phonograph Company General paid to James L. Andem or anyone for him, or any of his attorneys or counsel, in connection with the litigation be¬ tween the New York Phonograph Company and ’ the National Phonograph Company? A. None. Q. fit. How can you be sure of this? A. It could not be done without my act and I have not so acted. Q. 50. Wlmtact on your part would bo necessary to have any such payment made? A. To order a disbursement and to sign a check. Q. 50. Tho checks issued by the Columbia Phono¬ graph Company General aro signed by you? A. They are. Q. 57. Are no cash payments made by the Columbia Phonograph Company General without Timtaiini;00k;i„0t!; .mj.il ofija and for such purpose as you mention '! 0,1 ! ",-‘,:i'SS!“'i|y lm signed by mo; but it is trill ■!"'t 1,1 :l" ,l,hu “"I®*" "f th« Columbia Phonognml ,om]iany C.oneml llm managers sign ebooks foi M.tb hoi,ul technically, % P' ,n al1 ils ‘SHs.jntial purls it is thu suiiih jo.hj1 p.; tojmonts, mentioning then. by numliJrs. - „i7 ' '- ll!,(1,,.'sl!,"(I- tlimi. llmt these rights to eermin^ nMt'fr TT'* tllL‘ ,’"Vu"tlon ,l'-‘s,:','bod in )U,UI, I,H,unts; is thnl right? A. I so under "t^aro n^ "iM S,,uak for ; mS'UHut'l Ulv‘ '“,ki,,« ““«>•»«•». P«t on the ,7, tis4’ . phone patents/ ■ 'igl.t to use gnipl.o- „ J 7U; !*y armpltopl.one patents, y„„ ^nnd , nt,r patents? A. Ves in" pa " ^ understanding ■ ' u,,lt «* my Q. .80. Were any arrangements made for bring- 416 ing any snob suits? A. f know of none. Q. 81. If any such arrangoinent had been made would you have known of it? A. Probably not, but 1 would have known of the suits if the suits had been brought. Q. 82. Why would you not have known of any such arrangements if any had been made? A. Tn view of my relation to the American Grapliophonc Company and of the fact that such suits would bo an attack upon that company, it is improbnblo that. I would be taken into the confidence of tho movers of tho litigation in regard to tho filing of the suits. 410 Q. 8!t. Who wore the persons that had charge of the matter of bringing these suits? A. The com¬ mittee was composed of A. W. Clancy, Chairman and Messrs. Andem, Kinkend. Kvans and myself. Q. 8-1. This committee had full authorityTo bring these suits referred to? A. I do not so understand. My understanding is that tho Convention recom¬ mended and was in hearty sympathy with the attempt on tho part of each company to enforu its rights, but no action taken by the Convention or by tho committee could be more than advisory. Q. 85. This committee, then, had no authority 417 other than to advise certain grounds to bring suit? •A. And to aid by any menus in its power. Q. 80. Tho means you referred to consisted of furnishing tho money for bringing the suit? A. By all means, including mono v . Q. 87. What other means could there be? A. Money, services and advice. Q- 88. What sort of services? A. Personal scr- vices, I presumo. QHT157 Of what character? A. Letter writing, visiting, interviews with con 11 sol. 418 MO Q. no. This committee bail met from time t„ tinio nml nctud iim a body? A. Yos. v,My ni' Aro ^0tl with its notion? A. not J'Zg.”*’ A- Q. 03. Won- yon lujujiiforjiied n8 (o w|m, t)| com ni i (too .11,1 «t these various mooting T Onlvjnji general way. h A‘ f„n ’knl’t V"! K'!T"y ytm ,md' fro,n li»'° 10 ti me, toll knowledge »r what the comm in,. o Wns doing ZtSTn0' f'"'"ishi,,« preliminary aid and 410 dee L/ C,'-'m!,'i,"-V; -r ""(L°m!.V „ fair know]. « by no moans a full knowledge. f„ rnl.Mnim.r1 1'T- W!,',ll,op 11,0 nue*ti«„ of i ii islnng money for bringing suits by miv cor]lor. o against the mannfaotnrors or usJrs of* gmpho- A. °I « Idod. Afterwards advertising was ion8a,I''vn'Kr-V01,''' «lth that corpor- ^r5,?3Sr,^”ptoo“a,::^ to of’ t*dk!l,w,1rk i°*f on t),„ , > , 1 " 1 k cl , «? a. Those wil l*! Q. II. Tho.v are generally known as cylinder 427 mu Inn s ire they? A. Yes. Q. 12. I understand the cylinder machine is one having the record in the shape of a hollow cyliu- der, and the disk machine is one having tho record ' in the shape of a tint disk; is that right? A. Q. l!t. Which type of machines, disk or cylinder, does the National Phonograph Company put on tho market? A. Cylinder. CJ. M. Have they over put on the market any disk machines? A. No. Q. Ifi. What other company or companies have put on the' market in the United States a cylinder 428 machine? A. Thu Columhin Phonograph Company or American Grnphophonu Company. Q* Id- Do tho Columbia Phonograph Company and tlie American Grnphophonu Company put on tlie market the same machine? A. Yes. Q* IT. Is there any other cylinder machine put ou tlie market in competition witli the machine put on thu market by the National Phonograph Com¬ pany, except this machine which you speak of as being put on tlie market by tlie American Grnpho- phono Company and Columbia Phonograph Com- puny? A. None. 430 Cross-examination by Mr. Camp: x-Q. 18. Can you testify as to what statements, by way of advertisements, have been made to tho public during tlie time that you have been adver¬ tising man of tlie National Phonograph Company? A. lean. x Q. It). Will you kindly state what they are? A. That is a very wide question. If you will tell me tlie point you want to find out — on what par¬ ticular line? x-Q. 20. Tho statements you made to the public? x-Q. 21. Have you copies of tho advertisements of Lh ! r! • 'T !oU fonU “* 11,0 ,,,lvuI'lisii.g limit of Hit iNmioiml 1 houogmph Company? A. Yes. x-CJ. 22. Will you pro(iUCtt those copies? jfr. /lni/cx: Counsel for defendant slates unit tins is somewhat, unexpected cross-ex- niiiiiin tion. Inn that liu will instruct the wit ness to produce whatever printecl matter is do- x-Q. 21). Under whose instructions did you in- r^xr"1” . . n>/ Mr. Jlic/cs : »r X'^' 2;,:1 ,Is iMr- ('ilmore still president of the iNntiomil I honograph Company? A. To the best of my knowledge. ' 1 H.'/ Mr. Camj) : ff;. VVI|° "'■« Hie other ollleers of the t'o'ml 1 honograph Company? A. .lolin [<’ 10 I’li' secretary and treasurer, I believe incuts "°;i)iJ.Uf0.,'Ul,,U i"surtioM of these advertise- tion i.’ ','"‘1 tlmu’ ,lllv«y«ii hud any coil versa- A n rS?r,0r°,H "'ilhMr- TI|U«A. Edison? A- Amo. relating to tho wording on the ndver tiseinonts. Sometimes in ,, ur' picture. ' 1 !H!‘'d to copy— style of b- •"“« y» lm™ . . ferred with Mi- in- . 1 LttJ generally con- munis? A n, h T to ,h,! "dvertise- • Oiilj as far as the style of picture that signature appears on said advertisement? A. Th copy we are now running shows a woman lioldin (i »P n record. In every advertisement I have eve put out has figured the trade-mark and signatnr of Thomas A. Edison. x-Q. 29. You mean a facsimile of Mr. Edison' signature? A. Tho facsimile of Mr. Edison’s slg nature. x-Q. HO. And please state whether or not Mr Edison approved of the picture to which you hnvi referred? A. lie did. xQ.HI- And of the signature? A. Ho did. x-Q. 32. What picture appeared prior to tin picture as to which you have just testilicd? A Thu picture of a young woman laughing uml listen' ing to tho phonograph. x-Q- aa. And bearing also a facsimile of Mr. Edison’s signature?. A. Always. x-Q. !l-t. And did that meet’ with Mr. Edison’s approval also? A. Yes. x-Q. 8.ri. What picture appeared prior to that? A. A picture of a young woman listening to a phonograph with an air of rapt attention and pleasure only such as phonographs can give. x-Q. 80. And that also bore a facsimile of Mr. Edison’s signature? A. Yes. *-Q- And was it also duly approved by him? x-Q. 88. Please statu tho other pictures which have appeared as far as you can recollect tho same? A. In exact order? x-Q. 30. No? A. Wo had a picture of a girl — a young woman — in the act of declaiming to tho phonograph. Then we ran what wo call our Cupid scries, a Cupid with a phonograph and a pumpkin cut out at Thanksgiving time, a Cupid with a turkey for Thanksgiving time, and with a pumpkin for Halloween time, and a Cupid in a hammock for ; , ’ . 11 'viipiu rating on pony with a paraphrase of Yankee Iloodli*, an pnor to that, wo had a boy looking for a hand wit 11 ,"'t1c,'ut J,lst of demolishing the pi, on, graph to son whom the hand was. Another time piettiru of Mercury bon ring aloft ,i record. Anothe l]",U ;l l»n«l effect with a woman with , ;rrw"h i""1 « PlofttW of Mr. Kdison. Anothe time a ptclnmofa hand and a r rlo tl iir o Irngors. A different copy every month. Al f these inch . d i„ the space of the advertisemeni 11 . . 1,J signature of Thomas A. Kdison. x-lj. '10. And were all of these shown to and an- A- ,nlZ slate oi as rough sketches. muchli Pk'!1'SU st!‘t0 tllu "“"•‘-•s of ail talking ■ N i rr!»T,,M °f 'VhiU,‘ •V°" hnv“ knowledge? - . Rational I heliograph Company, Victor Talkinir £:,:,T,rn>% ,iw vu^ . 2 Phouo,rrm ,M !UllS M“uhl,ll! Company, Col . bin taW ">!l"yi,n<1 t'faphophonu Johiinhh 1Un'|,’«« know, does the ,M Monograph Company cover? A I ‘-•ally do,, t know the particulars Vino tan Cm f ifyoU know, does the equal, .'ted ' ' C0VU1'? A. Not uirkuted hyVlluV'Y^i^to 01 tJ1>u of "uichino ;;-o does ti,ecoi,„„. Sr£rr“‘y ie other. “ S“ ‘ "lt °,1U 1S tllu su,li"K “gent of ‘Vt ' ‘10' D° y°" k,,ow illly thing of the Columbia | M7 Phonograph Company operating in the territory comprised within the District of Columbia, the State of Delaware and the State of Maryland? A. Nothing at all. x-Q. -17. Yon have no knowledge of any such company? A. No. x-Q. -18. What talking tmichinn is now on sale to tlie public using cylindrical records other than graphophoncs? A. Thu phonograph. x-Q. -ID. Marketed and sold by what Company? A. Tlie National Phonograph Company. x-Q. fit). Dy what name is that mnehino com¬ monly known? A. The phonograph. x-Q. f,l. When you cp.ll the mnehinu marketed by tlie National Phonograph Company n phono¬ graph, (dense statu, in genornl terms, whnt distinc- tied you make between a phonograph and a graphophoiio? A. Well, tin, phonograph is made by the National Phonograph Company, nnd dilfurs slightly from the grapliophonu in construction. x-Q. 03. Is tlmt the best answer which-you can make to the question. A. Yes, I think that 1 answers it. x-Q. 53. Wlmt is the capitalization of the Na¬ tional Phonograph Company, if you know? I don’t know. x-Q. r,:s. Where are its oillces located? A. Orange, New Jersey. x-Q. r,r>. Have you no other offices than those located at Orange, New Jersey? A. We have a New York salesroom at 83 Cl, ambers Street, nnd Chiengo salesroom, 1-1-1 Wabash Avenue. x-Q. 50. And those are the only offices and sales¬ rooms of the National Phonograph Company? A. There is an olilce called tlie foreign department at 15 Cedar Street, New York. x-Q, 57. Wlmt offices has the National Phono¬ graph Company had in the State of New York vn n • i ’ ,'m‘l Avutftn; . 5 ut*VrJLX?lntm aVu“«'"' «I.,M "l 1'1'’ 1 lflh A vomits until April I, loos. IjO. Ami wliut olllees outside of tlu, Sou,) (|j,| . ’ *•»-« -x-Q. (II Ymi |,itVu testilied that Mr, W K Oil C ‘‘S U ‘ l"',;si,Iu"t <)f Ui« ‘-'"inpuny? A. . . •V . You have stated that Mr. .1. !•’. H,in. c'mIZy !"Tm i',“- A. W. H. Gilmoro |,Pu“u,»‘ »*»*«? . . I 10 Xmv York State? A. Not of positive knowledge 445 Those tiro tilings that do not concern meat all. x-Q. 71. Have you no knowledge on thu sub- jwt? A. No definite or no exact knowledge. x-Q. 7S. No knowledge which would enable you to slate wliut. machines nnd .supplies the National I’lionogrnpli Company bus sold in Now York Stntu? A. Well, I can say wliut machines and supplies * hey have sold in Now York Stato. but to whom tlioy Imvo sold them has noverooneorned mo. x-Q. 7!l. I'loaso stato wlmt machines and sup¬ plies tlioy Jmvu sold in Now York Stato? A. The maoliines and supplies that are listed in the cata- 4,10 loguos which I Imvo issued for the company and which, 1 assn mo, Imvo boon sold in Now York Stato. x-Q. 7-1. During tlio four years that you have boon connected with the company? A. Yes. x-Q. 75. Will you produce the list to which you refer? A. I will produce the di ITeron t catalogues that 1 have issued during the last four years. x-Q. 70. Where is the Udison laboratory lo- 1 cated, if you know? A. West Orange, New Jersey . x-Q. 77. What relation has it to tho National Phonograph Company? A. 1 don’t know. 447 x-Q. 78. What relation has it to the Udison Pho¬ nograph Works? A. I don’t know. x-Q. 70. What relation has it to the Udison Pho¬ nograph Company? A. I don’t know. x-Q. 80. Are phonographs and records sold by the National Phonograph Company unrestricted, or upon written agreements upon the part of dealers and users? A. They are sold restricted. x-Q. 81. Ilavo you a printed agreement which you uso for dealers? A. Wo have. x-Q. 82. Will you produce such a printed agree- «- P'-.y Pluck-lint dealers in Kdisou phonographs bv smiuiK printed circulars to tin- trade forbiddim- dealers to supply such black-listed dealers? a" a- suspend dealers I don’t think wo ever black- list 11 etn— never called it such, anyway. x-Q. 8-1. Do you issue printed circulars to the tiade satt.iiKoutthe names of the suspended par- Hs^A^ Yw!11 y°" r"r,,ii,l‘ "8" C01’y of " r, 8?' 1)0 know «-lioro the American Gi.iphophone Company has its olllces? A. 1 do x-Q. 87. Do you know wliero the Columbia 1 honogniph Company has its oflicus? 'A. I know they have an olilee i„ Chambers Street, New St. National Phonograph Compa^ Z chine sold by the Columbia Phonograph Com- n. v General? A. I think tliev have of late.. . c-Q. !M. Is it or is it not common to hear the chities miscalled? A. It is common. c-Q. 05. Does the National Phonograph Com- ■y manufacture 'phonographs and supplies there- ? A. I don't know. c-Q. 00. Are you familiar with ' agreements ich have been made between the Kdisou Phono- iph Company and the National Phonograph inpany? A. Not at all. c-Q. 07. What is your best recollection as to the iu when thu National Phonograph Company s organized? A. I don't know. c-Q. 08. Do you know whether or not the Na¬ nai Phonograph Company uses and sells inven- iis described in the patents grunted to Mr. Kdi- i under license from the Kdisou Phonograph inpany? A. I know that in some of our printed tier thoru is some reference to patents, but lly I have no knowledge of them. ;-Q. Oil. lias the National Phonograph Company in licensed by the American tiraphophone Com- ly to sell the inventions covered by thu patents nted to thu American tiraphophone Company? I don't know anything about those things. :-Q. 100. Do you know under the laws of what to tlio National Phonograph Company is organ- 1? A. 1 do not. :-Q. 101. Or thu American Grnphophone Com- ly, the Columbia Phonograph or the Columbia allograph Company General? A. No. :-Q. 102. And 1 bulieve you have stated that i do not know what territory is covered by the lerican Graphopliono Company ? A. They cover world, as near as I can understand it. :-Q. 108. What territory is covered by the Col- bia Phonograph Company? A. I don’t know. ''‘’'ll” ■Int t!|nphophoue Coin- ]’• ■sdlM 111 «»y »l>«-*cilio,l lorrllory? A. They I";' f yfe,'U th°y 1 «««•*•»■ I really don't 10 ' ■ 1 'v,,rku'1 f,»- H'u company ami don’t Kiinw anything about their goo. la or olllees or any. x-Q. lOfi. As matter of fact, Mr. Shattuok, yon loal y know nothing about it; i.s that not a fact? A. k,mw «!»,,, advertising and 1,rin.ed matter of the National Mu.nograph Company and don’t toncern myself ahont these otlier things wlmthi.ril!’ tS" T‘"-‘r °f Uwt ><>" d«n’t know Al,'';,'1L'a" Crnphophonc Company soils soltlj in Nuw \ ork or outside of New York or ZlKrlf I iloii’t knon-j nothing to v. It isn my department ami I really don’t know anything about it. 0 ^ Adjourned to Tuesday, April 15, moo, at 2.30 Nkw Yoiik, April 15, 1002. Met pursuant to adjoiirnnie.it. . . . IIKIUIEKT A. SHATTUOK, . . etl . . C'7q’ZT.‘ C““ muma a-rui'i-uil |1"olil")utJ 11,0 n(li-eni»j- U1U" t0,lt Ulu kwi hearing}’ nuvo yo„ (Tho witness produces advertisements.) ‘I The advertisements produced are olfered in evidence by complainant’s counsel and are marked “ Complainant s Exhibits Nos. ’.I to 15, inclusive, Advertisements, April 10, 1002, .1. A. S., Kx’r." x-Q. 100. In answer to cross-question 75, you testilied that there were certain catalogues which had been issued during the last four years, which you would produce at the next hearing. Have you the list referred toy A. I have the catalogues. x Q. 110. Will you produce them? A. I pro¬ duce them. There are eight catalogues numbered ( in tho corner from 1 up, in tho order in which they were issued. Thu catalogues referred to are offered iu evi¬ dence and markud ‘‘Complainant's Exhibits Machine Catalogues, Nos. 10 to 23 inclusive, April 15, 1002, .1. A. S., K.x’r.” x-Q. 111. Have there been any other catalogues issued during the Inst four years besides those? A. A groat number of record catalogues and special catalogues relating to coin slot machines or phono¬ graph accessories or phonograph parts and others By Mr. Hicks : x-Q. 112. What is it that induces you to select these catalogues in preference to tho others you have just mentioned? A. My recollection of tho request was for catalogues of phonographs. 11 y Mr. Camp : x-Q. 113. You wore asked at tho last hearing in cross-question 73 “ Please state what machines and supplies they have sold in Now York State,” and your answer was “The machines and supplies that are listed in the catologues which 1 have issued for ;7v";V «ml 'Wool. I assame have la,,,, «« l!'.' j’l"’ HCXt- l|tl(,s|i(j,| X(J , nro notall the catalogues which trii"WI,W ,1,,ri,w ,l,,! ‘"-t f»,.r year* knully pro.1,,,,0 A , . . « s»Z£ (Tliu nesses produces copy). 2rSfTr-"« ;; . o, . «!„i,s •loll burs' Price I Agreement am; »al«, »"«' Terms „, 1002.” * V- h,> J,'x r., April ifi ' s«y i, a" l~» Imiirovei — -s,r='r::;:rr; cirreci prior to my coming with the company. x-Q. 1 17. Was tin, spring motor type first oifuru, the public about the time the National Phono apl, Company was organized and commence, 'in K business? A. I don’t know. x-Q. 118. Are not about nine-tenths of all phono uplis How made operated by spring motors? A large majority of tin, phonographs sold a",: era ted by spring motors. I don't know abon t nine-tenths. x-(J. Ill). Have recent improvements been mad, the character of tin; records used on phono ipbs? A. Yes. v-Q. 120. Can yon specify what they are? A i, I cannot. c-Q. 121. Have not all these improvements in tlx king of records been adopted since the organize n of the National Phonograph Company? A, c improvements of which I speak I know have. :-Q. 122. Hut yon' are not able to specify jnsl lit improvements? A. No. :-Q. 12H. Has not the price of phonographs been ally reduced since the National Phonograph npany began doing business? A. We have sold aper phonographs, yes, and the price of some of older styles of phonographs have also been need. •tj. 12-1. Formerly the cheapest phonographs l for $1 HO each, did they not? A. That I don’t •Q. 125. What prices are they now sold for? $10, $20, $:to, $50 and up. ■Q. 120. Are not the records made very much ler and plainer than they were formerly? A. y are. Q. 127. Yon have written something on the ect of phonographs, haven’t yon, Mr. Shnttnck? 400 ,t,,,(1 rr "Z-SS srno 1,0 'miri5'i!it ii,,j ^^sss "'hom" fi ‘ip>i Company began to do business? \ SSSSSSSSS' '"" "ino "sod is mi organ gainst. u .law's |„m. y ‘mlm * ■'”"•■ "”p •» i i . . . . "»» .i,» »„s? ’£ . - . . . ■ ' in'i =.i=:r,^rrrl - JOS mo to. ' ^'‘c«nse lie wanted Mr'1 R,S, £, Hewitt" '"L'y" ^.C0,,!,u(!,lon' ir «»y. Company? A. I do not, ^ n,0,'°g'i'ph « it!,QMr. Wi'Jld® ‘a.1 C(,".ful'u"u,‘s tlui oliomical room one 0r , ", mt l!t ‘-'iillod J;V,V havo'in r eganUo tli *? in this’oalo K'iM'1'? A. No, I io“tkl2l,0n" M“d tlloi,h0'10- Adjournud to it date to be agreed upon. Met, pursuant to agreement. 1 losoni— Mr. Cash*, Mr. IIioks and a ruprosonta. UiSHUKKT A. SIIATTUGK resumed s Cross-examination by Mr. Camp (continued): x-Q. 130. At tile bearing on April 15, 1002, it developed tl it, t 11 the eat logne, which bad been issued during tbelast four years or since your connection with tbu National Phonograph Com- puny, the production of which was desired, had been produced, and on being asked to ,, reduce the others you agreed to dose; have you then, now, and if so, please produce them? A. I have all that f° tll“ buiit °r «»y knowledge and belief, have been issued, and I now produce them. Mr. Camp: 1 oirer the catalogues in evi- donee; same are marked “Complainants’ Kx- 27 to 'll) Inclusive, May I), 1002, J. A. S., x-Q. 137. Please state to what extent Mr. Edi¬ son approved tlieso exhibits? Objected to as immaterial. A. There is nothing hero that, to my knowledge, ho was consulted about. My dealings on this have been all through Mr. Gilmore. x-Q. 138. Did you or did you not confer with Mr. Edison at all in regard to the cuts, the fac¬ simile signatures or any of the printed matter in the exhibits which have been just produced? A. No. x-Q. 130. You were asked on your cross-oxami- nntion, x-Q. 20, as to the statements made to the public by the National Phonograph Company, and you answered: “1 have written millions of words and have made a trreat munv >> “T1- i» regard I he Unly mi regard to stylo of copy to In, used ;X'Q- , l1°' .V-m bur., shown ;• «, «"■ II", proof of theca t.s, have yon ,1(J ' -?f'g ('"1 "'"•'■lion iw ad vert is j ' will, Mr. Edison, also K io wording nf (,in« ;itjwi'tisi‘ii,i'iii8y a omo case Him I can remember. •V;Q. !.|l. Please Stale W'llllt Ilmt A- "«w,iS|„ regard loan ndv rt ,t i"« I no now moulded records, which In mmrn yet. Ho simply outlined ,, , | the advertisement, which I never used *-Q- M2. Can yon rocall whnl. tho'phra Hto ml vert, s,. "'em was ns Mr. El | /hfmdant’s Counsel.- I object, to and iminulorial; it is shown nave boon used. V'v n:ai'.Vl!!,,IOI"bur tllu ,,x,ltst "-01-ding. ,logv\ ' von' w',,a>i!!,,.rmU,,,,b"r Wl,nt tho I Pltjared? tlhM.ilvmison.ent a* H •Samo ohjootion. . . ndvortisomont is in ovi V Q r r . ‘‘i «xnct wording, , f Can y°" StJItO Which exhibit it is WtS;!.ii?d,"« "I> "•« niouldod record x Q. 140. What o (Ileus {„ Now yor| g :;„ZT !‘"n »■•">» ' » % .. k ,*.L ^ML‘- !,t 83 Clmmburs Sins., hearings that it was. Do yon wish to correct your 475 testimony in that regard? A. If I did I was in error; but I said wo did not sell any goods thereat Chambers Street. I may have used tho word “ salesroom ” in the sense of lining an ollico; it is x-Q. 150. Have you at, ollico m tho State of Now Yorlt at tho present time where you sell machines and supplies therefor? A. None that I know or. x-Q. 151. Arc machines and supplies sold at 811 Chambers Street? A. Not that l know of. x-Q. 152. What offices out. of tho State of New York at the present time has the National Phono- graph Company? A. Onu at Chicago, 1-14 Wabash 4,0 A venae. x-Q. 1511. Whoa did tho National Phonograph Company consu to make sales in tho State of Now York?' A. I don’t know; [have never been con¬ nected with the sales department. x-Q. 15-1. Do you know whether or not Douglas & Company aro at No. 811 Chambers Street? A. They are not at 8!l Chambers Street. x-Q. 155. Whore aro they? A. 87 or 89 right along on the same sido of the street. x-Q. 150. Do yon know whether or not they pur¬ chase machines and records from tho National 477 Phonograph Company? A. I believe they do, although, of course, 1 have no direct knowledge of x-Q. 157. They make sales at that address? A. Yes, they do. x-Q. 158. Mr. Slmttuck, an article recently ap¬ peared in tho afternoon edition of tho New York Jioeniny Journal about the middle of April headed “Kdison fight Ends.” Do you know anything about that article? A. I do not. Mr. Camp : I wish to call attention to the fact that Mr. Funston, the former presi- fit and present vice-president of N oik 1 lionoyrai.il | Company, is jiixwont, and n-u ‘ e pi’oil uci*d Jii in in responso to our second nvitation for Ins examination. 1)0 yon * oxamino him? 1 llefendant’s counsel status that ho does not tsli to examine Mr. Fmiston f tliu dufumlant, thu National Phonoyrnnh it. support of the phm, c|Jd b ‘ " , ■ . y;,‘ Lo.,»pkt ilia nt states tlmt it does ot dosiru to take any testimony on its hulmlf ll*o Pita and rusts upon the testimony taken 1 O ^ %- 101 - * ' * ^ Opinion on motion for preliminary 481 injunction. UNITED STATES CIRCUIT COURT, Southern District of New York. New York Phonograph Co. vs. National Phonograph Co. ct al. It must bo nrory extraordinary caso which should roquiro the Court, whero tho testimony has beon taken, to cunsidor it ns it would upon final hearing in ordor to administer preliminary relief. It is thought that complainant, having waited so long, should now wait until it can presont its enuso for intorlocutory decrco— especially when injunction will closo a going concern, and it does not appear that complainant is able to tako its place in supply¬ ing the public. Jan. SO, 1001. E. II. Lacoiibe, U. S. C. J. (Endorsed)— N. Y. Phono. Co. vs. Nat’I Phono. Co.— Roturn to Certiorari.— United States Cir¬ cuit Court of Appoals, Second Circuit.— Filed Nov. 15, 1005.— William Parkin, Clock. [R385] [ 119 P.H. 544. J OTW YORK PHONOGRAPH CO. NAT 10 'TAJ. PHONO OR APH CO. (Circuit, Court, November 13. 1902.) No. 7, 719. 1. PARTINS- -RIGHT TO .MAINTAIN SUIT— BKPRCT OP CHAHPPRTOUS The right of a complainant to maintain a suit is not affected by a contract constituting a third person its agent to prosecute and collect all claims against defendant for .a per ce of the amount recovered, even though such a contract my have been champertous . ' j In Equity, On plea. Loui3 Kicks, .for complainant. Howard V7,;viys, for defendant. V/AU.ACE, Circuit Judge. The complainant ' s right to maintain this action is in no respect affected by its contract with Andem. By this contract Anclem v prosecute all its' claims and demands against the defendant and ties, and collect all moneys arising therefri and to retain as his compensation ; of recoveries; and online without his consent, and he undertook not to settle or compromise with defendant for less than & specified sum without the consent of the complainant. Andem could not have maintained an action in his own name against the defendant. j As to the contention that the agreement was champertous! even if the law of champerty were in force in this state and f of the agreement were void, the complainant would not be pre- | eluded from maintaining an action not founded upon the agree- | The plea is overruled, with costs. ORE MILLING CASES The only significant infringement case involving Edison’s ore milling patents occurred in 1909. Edison v. Allis Chalmers Company, Empire Limestone Company and the Casparis Stone Company concerned the use of the crushing roll technology developed at Edison’s Ogden mine and later transferred to the Edison Portland Cement plant at Stewartsville, N J. Testimony from that case by Emil Herter and Walter S. Malloiy details research and development work by Edison and his assistants between 1889 and 1899. The complainant’s brief on final hearing provides an excellent summaiy of Edison’s case, including discussions of the state of the art and the later infringement that led to the suit. Thomas A. Edison v. Allis Chalmers Company, Empire Limestone Company and the Casparis Stone Company This infringement case details the work of Edison and his assistants in the development of rock crushing technology at the Ogden mine during the period 1889-1899. The case involves the transfer of this technology to the Edison Portland Cement plant at Stewartsville, N.J. and its sale to other companies. The testimony by Emil Herter and Walter S. Mallory details research and development work by Edison and his assistants. The pocket notebooks to which Herter makes reference in his testimony can be found in the New Jersey and Pennsylvania Concentrating Works Plant Operations Records. These notebooks have not been filmed. The following items have been filmed: Complainant’s Brief on Final Hearing Complainant’s Record on Final Hearing Testimony by Walter S. Mallory and Emil Herter Circuit Court of the United States, ' WESTERN DISTRICT OF NEW YORK. THOMAS A. EDISON, j Complainant, I ALLIS-CHALMERS COMPANY, EMPIRE LIMESTONE COMPANY and THE CAS¬ PARS STONE COMPANY, Defendants. Complainant's Brief on Final Hearing. Louis Hicks, Solicitor and Counsel for Complainant, 71 Nassau Street,, New York City. Circuit Court of the United States, Western District of New York. Thomas A. Edison, Complainant, I Ai.eis-Ciialmers Company, Em-/ pi re Limestone Company andl The Casparis Stone Company, I Defendants. I Complainant’s Brief on Final Hearing. Statement. Patents and claims In suit. Filing date Is July 10, 1807. This is a patent suit in equity brought by com¬ plainant against defendants for infringement of letters-patent of the United States to Thomas A. Edison, No. 072,610 (claims 1 and 2 thereof) for Method of Breaking Rock, and No. 672,617 (claims 1, 2, 3, 4 and 7 thereof) for Apparatus for Break¬ ing Rock. The two patents were issued oil April 23, 1901, upon an application filed July 10, 1897. It appears from the file-wrappers and contents of the two patents, offered in evidence by defendants (D.R., jip. 642, 690), that the Patent Office required a division of the application filed July 10, 1897, and that the description, drawings and claims of the original application were thereupon divided to form two applications, one for the method and one for the apparatus, upon which applications the " ! a ill smr. were issued on the dal named. Applicant’s filing date for cadi patent is thereiore, July 3 0, 181)7, the date of tli original application. ( Vidor TaVclnr, Mine Co. H al v. American Graphophone Co., 1 45 Fed., 8f>l n n A.j same vs. Duplex Phonograph Co., Ml Wd ’ ' S’ <*■ ’ «» ’»> ift Fed If? T / ' I: * ^XraotoffAsSn: 79 i !md he ildds (?.’ rlmT1! 0bj!5it 10f my inrention is to pro- I nch w, i!ei10- the breaking of rock which will be simple and effective will not lockdown lmnd:sledOinl/ or blasting of the wil 1 inv2e °Ze°eS °r moderate size, and aZCufZow™/0 l* o[ 11 m the prin- . “Ml'; Edison’s method is based o ciple of applying to the ro“L r„ the forTe factor Ts enelW m which being derived from the i^of imenonnS Sg work and involves two factors; first, force or pressure, and second, the space over which the force or pressure is exerted. The unit of the force is the pound and the unit of the space is the /oot, so that energy is measured in ‘foot- pounds, I said that energy is either the capacity for or the act of doing work and in the former case it is in the stored or potential form and in the latter case it is in the Active or dynamic form. A suspended weight, a tank of compressed air, a stick of dynamite, repre¬ sent examples of energy in the stored or inac¬ tive form, while if the suspended weight is dropped or the compressed air Used td operate a drill, or the dynamite exploded, the stored energy is released and assumes the active or dynamic form. o of stored energy, known as the kinetic iorm, is that fofind in a moving body, like a fly-wheel of an engine, a cannon ball, or, as in tlie present case, a massive Cylinder of iron rotating at high speed. “I have said that energy involves two fuc- tors, to wit: the force and the space com¬ monly measured in pounds and feet respect¬ ively, and obviously a given amount of energy may be composed of varying values in both of Us two factors, for example, 1,000 foot pounds of energy may be composed either of 1,000 pounds moved one foot or one pound moved 1,000 feet. Carried still further, it may be composed of 12,000 pounds moved one-twelfth of a foot or one inch, or 1S0.000 pounds moved one-tenth of an inch. “Mr; Edison’s object is to apply to the rock periodically an amount of energy not of an excessive total value but composed of a very large force, factor and a very small space fac¬ tor, and he does this by expending stored kinetic energy upon the rock in the form of an enormous number of pounds pressure ex¬ erted over minute distances. This mode of expending energy may be illustrated in a simple way by an ordinary pile-driver oper¬ ated m primitive fashion by a horse. In lift¬ ing the hammer the horse will walk, say 100 feet, or 1200 inches, nnil thereby store 100 foot-pounds of energy in the suspended ham¬ mer tor each pound of weight in the hammer. I he dropping of the hummer will move the pile— say one inch— and thereby the 100 foot pounds of energy which was stored in each pound ol weight of the hammer in the form ? , °"° l,0«"d pressure exerted over a space of 100 leet will be expended on the pile in the Jorin oj mo pounds mooed one-twelfth of a .loot, ihe law of the conservation of energy is that energy is not destroyed but may be changed in lorm by such a transaction as that; just described, each pound pulled by the horse becom ing JS00 pounds applied to' the driven pile, but the horse moving 100 feet to give the total of 100 foot pounds and the pile movin'' only one-twelfth of a foot to give the same total number of foot-pounds. “Mr. Edison said to me in a recent confer¬ ence on the subject, ‘You can call my machine a rotary pile-driver’ and that describes in a general way the principle upon which his method is based, while it is manifest to any one looking at the machine and seeing a hitnidccilf , !,S “.P1"1"'1 Piano crumbled , « lul’«0,1, tll,ln 11 man’s hat within ten oi fifteen seconds, that, an enormous num- bei oi pounds pressure must have been ex¬ erted to accomplish it. “Air. Edison produces his store of kinetic tiiert/!/ by means of two massive rolls having, in the example he mentions, ‘a combined neight of 107,000 pounds’ including all mov- ii>g parts, and 0 feet in diameter by fi feet in length. He works these rolls up to a. speed at the roll-surlace, of ‘about 1,000 feel per Minute and then drops the rock mass to^be stroipr i.011 01 '.h<3 .n),,s' Thu lolls have certain / i, i Pl0je‘itl0n 0,1 1110,1 ‘■"‘Aite, and’designated . SKTJS& SStsss & blows are resisted by the weight of the mass 1“ wedging of the rock against the sides of the hopper. These blows are not directed in a straight line as in the case of a reciprocating hammer, but the sledg- ing knobs travel in the arc of a circle so that, as they rotate they deliver successive blows resisted largely by the weight of the rock mass. In breaking rock by applied pressure it is necessary to produce some deformation exceeding the elastic limit of the material of which the rock is composed and the elastic limit of rock is very small. Hence at each impact of one of the sledging knobs, backed up by the great weight and speed of the roll, a shook is given to the mass representing an enormous number of pounds pressure exerted only, through the minute distance required to overcome the elasticity of the rock and shatter ♦ {he e"ei'Sy tlmt is applied must of course ue taken from the energy stored in the roll, the loss of energy from the roll being Tilth mutely represented by its diminished speed. „„,i^ll0";l!1S the sledging action just de- tb« , nniV"+iUoh pi'od!u.:e* the first fracture of Wi. V * J? !5md of i,ution m carried further by the gripping of tile large fragments pioducecl by the first shattering of the rock, and crushing them between the two rolls. Here also is a large expenditure of kinetic energy, or at least kinetic energy in which the pressure factor is very large, since the first fracture pioduces a large amount of broken material .i VV10!' C1'nshed betwee" the rolls at the late of about one ton per second. Ihe operation I have described all takes place in ten. or fifteen seconds, depending upon the charge of rock delivered to the machine, and when it is oyer it is found that the speed of the rolls Inis been materially reduced, the loss in speed representing the energy which has been expended in the crushing Operation, and, before another charge of rock can be crushed, the rolls must be again brought up to normal speed and the necessary energy thereby stored preparatory to the next crush¬ ing operation. “lliu foregoing explanation will, 1 trust, make clear the Edison method and the princi¬ ples ni)on which it is based and I will now refer to- the apparatus omployed in the method and particularly set forth in the apparatus patent No. 072,017. “For a general description of the apparatus I cannot do bettor than quote from I lie speci¬ fication, page 1, lines 24-80 inclusive ‘In carrying out my invention I prefer¬ ably employ a pair of independently (/riven, and dlseonneeled massive rolls, and feed the material periodically to the gap between snob rolls. As an illustration of an efli- eient embodiment of my invention I will say that the pair of giant rolls which I have built and operated have, including all mov- mg parts, a combined weight of one hundred and sixty-seven thousand pounds. Each roll is six feet in diameter and ./toe feet Iona, and the gap between the rolls is fourteen inches. These rolls are given a surface speed of about four thousand feet per min- ate. the speed of the driving belt which operates through slipping friction is prneti. cully constant, but the speed of the rolls is reduced about ten per cent, in tile breaking ot a rock and during a fraction of a second” while an interval of from twenty to forty seconds is required for the rolls to recover tlien- full speed. The friction employed is not sufficient to start the rolls from a stute ot rest, and consequently in starting hand- leiei's are employed. The energy of the blow which these rolls are capable of deliver ■ ing is enormous. I have in practice been i ro k on!,' W‘th tl‘aSei'0,,s 8il>S'« chunks f ,.^.k °.1 the '“tgnetic iron ore upon which 1 have been operating as large as six feet 0 J 1 "'oighing as much as four or hie tons. Tile rolls are faced witli remov- oonstnu.Hnn'tf te‘’ .Thioh in the preferred coi sti action are provided with radially nro- e ro1ltwm’llSP°tl,,ltia r,°uk 1,1 billing upon 1I1C lolls Mill be caught between the knobs on the approaching surfaces of the two rolls. ,ce a large rock presenting a flat surface might ride on these knobs if they were of uniform height, I provide nt one or more points (preferably two points) in the diani- eter of one roll a line of larger knobs, which serve to sledge such a large rock and reduce it to such a size that it will ho caught and finally forced through the rolls by the smaller knobs. This 'double operation of sledging with the larger knobs and then breaking by a rolling action with the smaller knobs makes the 'rolls effective for the breaking of pieces as large as the distance between the centers of the rolls The rock often strikes the rolls at an angle and produces end thrusts of the rolls. To compensate for this and prevent: the grind- ing of the rolls against the frame or the journal-boxes, I provide eacli roll-shaft with an inclosed centralizing bearing which pre¬ vents the longitudinal movement of the shaft ■in either direction. This centralizing bear¬ ing consists of divided steel rings which are placed in grooves in the shaft and form ribs thereon, which ribs are inclosed by a di¬ vided encircling collar having corresponding grooves and firmly secured to the Journul- [Note by complainant’s counsel; The im¬ portant. double operation, above described, of sledging with the larger knobs and then breaking by a rolling action with the smaller knobs, "'Inch disclosed and developed the “kinetic method" of breaking rock and which first made the giant rolls effective, as above stated, for the breaking of large pieces or rock, is described and claimed in claim 3 of ISo. 072,017 ( infra , p. 14). Before the inven¬ tion and adoption of the larger sledging knobs tile “kinetic method" u-as not understood o” utilized and the giant rolls could not be practi- cully operated. Among tlm other many difii- eulties encountered, before the invention and adoption of the larger sledging knobs, urns the riding of the rolls, above described, evon by comparatively small pieces of rock (CJ.Il pp. 043, 040; p. BiiO, Q. 88; D.R. p. 7fi, Q. 43’ P- 93, xQ. 123; p. 138, xQs 320-328; p. 143' xQs 320-3.33)]. 1 “The machine thus referred to is illustrated in a general way in Rig. 1 of the patent, a copy ol which I herein insert for convenient reference. Drawing (see Pig. 3 of No. 072,037). “In this figure the two rolls me d g tel ns A and B and are provided with rein 0 ball e near mg plates a which are secured to the man¬ drel or body of the roll by bolls (see b Pig. 2). ,Iho wearing plates carry projecting knobs 0 of The wearing plates carry projecting knobs cot uniform betr/hl and at opposite points in the di- ;w ^7°f m,'cof„the rol,“ is a line of larger S- a"* "" ”uM "> » ■“>“* "ls° sho"’s the mode of periodic delineig ol the charge of rock to the roll wldch itwiin18 11 re(rlllnS,ll!U' hopper K,' "Inch, it will be observed, embraces the aclia- cent halves ot Ihe rolls and at its upper end is ?. platform L forming an npper s.orv P p&z sss !?,rs!X£i the train of cars and picks up a skip loadml lear sale of the skip and the other Us two Mini lei sides. The skip is carried in a hori .iUW* wit,11baw 0 ol wioa upon hich the skip is lowered. The two forward kin1..'.? |looks attached to the sides of the kip .lie then detached and the crane then 8.2V10 uliuln and lifts the le skip so that its load is dumped into 31 the hopper. The point of the skip or its for¬ ward strengthening rib engages with one of the bars o so that the skip does not slide for¬ ward. After the load is dumped the skip is then lowered on Ihe bars 0, the forward hooks attached and the skip lifted and carried back to the car from which it was taken, and the hoisting chain then attached to the skip on the next, car, which in turn is delivered into the hopper. Between the delivery of the suc¬ ceeding char yes of root- the rolls are being brought up to their full speed preparatory io the next crushing operation. “The journal bearing (to provide against the end-thrusts, nliove described, of the rolls) for one end of each roll shaft is shown in hori¬ zontal section in Rig. 4. Drawing (see Pig. 4 of No. 072,017). “The end of the shaft is enclosed by a split collar of which the lower half E appears in plan in the above figure, a dust cap f being screwed to the outsidu of the collar. Within the collar arc grooves or recesses which receive two circular ribs c set in grooves on the shaft. Bp this means the rolls are centralised in the machine, being restrained against end motion bp the ribs or rings e. “The mode of driving the rolls is illustrated in the following Pig. 3. Drawing (see Pig. 3 of No. 072,017). “O11 the end of each roll shaft (opposite the end which carries the aforesaid centralizing rings or ribs e) is loosely mounted a pulley F. Outside of this pulley and secured by bolts }' to the end of the roll shaft is a band'wheel O Tims the band wheel is 011 the shaft of the roll’ uud the pulley P is driven by the belt. Edison then provides means for a frictional engage¬ ment of the pulley with the band wheel, con¬ sisting of a strap or band H carried by the pulley P and wrapped under tension around the band wheel. The strap H has its two ends attached to a lever 1 on opposite sides of the fulcrum respectively, the lever being pivoted on the pulley k\ The free end of the lever is ucted on by n spring I so us to draw the ends ol the strap m opposite directions and wrap it tightly on the band wheel. By this means, when he pulley F is rotated, it will carry with it the band wheel connected .... sltn i ! "yo" ' H '•* "i:ccmlry that each loll slmlt luce its own independent sledninii "v >onuud retardation . Am if the rolls wue rigidly yen red together, as by spur near, my, and one of the two rolls were umZed b , an impact on the rock the kinetic encriiu of the other roll would be expended in strippinl, the yeariiiy. Jt, would be in effect the sledti- as the an "I1,** thv roll, such rocli.e J ,V" ""akl oorinully exert on the “Moreover, by reason of the massive nature f the lolls and the necessity of utilisin'; hi- L W the 1, , g force supplied be arrested “ llL‘ V’11 «'«»* bi free to » " ™i l. “'A'S’S •;» zt; overwhelming form Such in overwl.eli. iZ 1 „ lL ■ 1 * lib t'- tl'c il tics t ' tllat secures kinetielv would lii Mil an enormous apparatus, even if it were l it!! tll Kiilistnntinlly 2 In apparatus for breaking rock by ki¬ no ie energy, the combination of a pair of 11 k> : nnd disconnected mas- s rfoc™ S l,"vin* or irregular surfaces, » power connection delivering 1, ‘ > /I tic HI, sllicct t s rt the roils from a state of rest, and means or penodically deinciing cbaiges of rock o suci! lolls at sufficiently infrequent inter- spmWo’ui'a tlie s’"8 10 ut0,L1 Hu llldcnt S’SlJf'S “ul di“ . ||»]? nm enongb to be subjected to tlie rollin'- ct m .. power connection delivering power ,-l i h 'e ,." ls '"sufficient to break tlie „ !»•> the direct pplieati f tl c i we m-Js'of"rnei T '’T'01”™11*’ delivering °f . ' to s,lcl‘ Kills nt sufflcieutlv fiupient intervals to permit (lie roll's recover sufficient speed to effect t!,e 4. In apparatus for breaking rock by ki¬ netic energy, the combination of tlie two in¬ dependent massive rolls having roughened or irregular surfaces, and the slipping power connections for both rolls, substantialiv as set forth. 7. In apparatus for breaking rock by ki¬ netic energy, tlie combination with inde¬ pendent massive rolls having roughened or irregular surfaces, of slipping power con¬ nections, nnd means for periodically deliv¬ ering rock to the rolls, substantially ns set Sudden ex**— . . iuiih momseives, 0} extent of time nnd s| Hammering knobs acting in a minute ace. Independent notion of the two rolls. In the course of bis answer to Q. 5, when testi¬ fying ill rebuttal, Mr. Bentley further explained Mr. Edison’s new method nnd apparatus for break¬ ing rock ns follows (CUT, p. 495) “The primary conception is that tlie opera¬ tion should be a cracking, or hammerinq opera- Mon, as distinguished from a mere piiwhinn operation. Furthermore, since the rock masses upon which Mr. Edison proposed to operate had previously to his invention been cracked by dynamite, involving stored chemical energy applied with extreme suddenness, the substitu¬ tion of kinetic energy for a similar operation likewise required an enormous amount of foot pounds (speed and weight) capable of smitten application in ii minute extent of time anti space; hence the idea of a hammer of gigan- Mc weight and high speed. Such a gigantic hummel Edison formed by lus massive rolls. TTo did not put tlie massive weight in an ex¬ ternal fly-wheel, but lie put it. into (lie rolls ihmtelm. Moreover, lie did not plan to U« ciprociitc (his heavy mass, as might he the case " , '.l reciprocating steam hammer, hat lie made it rotary. Moreover, lie did not make (lie rolls smooth, lmt provided lieavy, sahstaatial projections thereon, so that, although the rolls rotated, they were still aide lo deliver blown tiding largely against the mere inertia of the urge rock, delivering, so lo speak, a diagonal hloiv, instead or a merely reciprocating Tilow, such as a steam hammer or pile driver might deliver. Moreover, he tooth, somewhat as Hit jaws of a pair of pinchers react, on each other through the hinge, bat he gave to S Z ''f^'-iap it* blow with- l l,: other roll, the roll s beim, iljdoft ooo of the other, lie a ho did not wZZZZ l "S’11"' co""ooHoa with the driv ![{ aHCU(ih *>ut so anan^od it Hint Hu» mlN their' Xn ?}' could deliver lhc.li liloiis (with the consequent arrest in speed) without having the shock transmitted r. v. "I'd of the driving uncut. Intermittent feed end Intermittent ncc n Inti prior .„t. Expenditure or kinetic energy^howil"!) . “Still again this new principle of rock-crush- ohis\° 'RS k"'fie cnm'W> lv,"'ch in turn in- il lolves mass and speed. The mass renminimr 11 'K I I g o t hv -i lcduction in speed. Such speed reduction f continued without intermission would bring tlie rolls to a standstill. Conscniicnilv «■» S-S! have the feature of intermittent feed the rolls li tun* permitted to accumulate kinetic energy 11 m P,RV,ni,s crushing operation, just a pile di'ivor liftei1 it litis dftipped litis to he hoisted again and kinetic energy nccliiliulateil therein before it can deliver a second blow. Thin feature alone forms a clear line of dis- Unction, between Edison’s apparatus and those devices of the prior art wherein tile rock can lie fed t ioiitihUously, there being iio interval re¬ quired to accumulate kinetic energy prdpiira- tnry to (lie succeeding operation. For instance, a charge of rock delivered to the Slew Village Edison rolls drops the spedd f'roiii siiy 2?0 down to 140. If at this lower point of speed a second charge were dumped upon the rolls their speed would lie reduced a Second stage much greater than the first hcciin'So' of the lesser energy in the rolls at the lower Speed. Two or three charges so delivered without peniiittiiig speed Recovery Woiild bring the rolls to a, standstill. The same' is triic of the Defendants’ I'ekin rolls', which' admittedly drop in speed when operating on a charge of rock, like the Edison roils. Hence an¬ other characteristic feature of file Edison operation by kinetic energy is the periodic or intermittent feeding of the rock and the periodic or intermittent acctiniiilaiioii of kinetic eneryy. “The foregoing characteristics of tlie Edison invention should he taken into consideration in the attempt to find Hint invention in the prior art. In particular, aiiy anticipating de¬ vice would need lo show the mannirc hammer¬ ing roll n with the alternate storing of kinetic energy therein and a delivery of ' that energy in the cracking of tlie rock, it being fundamen¬ tal that kinetic energy expended by reduction in speed is forever lost from the rolls and a fresh supply in the form of re-established speed is necessary before the roll's can make a second expenditure tliei'eof.” n in tlie course of Ills’ answer to tlie si Q. 5, Mr. Beni le.v, after reviewing llic prior art, showed that by the inventions of the patents in suit Mr. Edison mttdc a departure of a pioneer character, the underlying kinetic method amt the apparatus required to practice that method heiaq fundamental!!, new. Mr. ISentley said (C.B., ii. *>07) ; — “I ngniii call attention to the facts stated at the outset of this answer that the prior art shows no example of rolls httr.int, toothed or roughened surfaces driven hi, hcliinu, while any embodiment of the Edison invention must so far as 1 know at present, have rolls pro! uded with knobs capable of delivering blows. and mast a iso have a belt drier capable of per¬ mitting the hammer action of the rolls am be arrest of speed incident to the I, 'elJ ,of k,],.let1,c ‘-'i.ergy hy such hammer ''s- Any disclosure in the prior art tide- 9™!'°, °. Otsclose the Edison invention should , ' \ ruillui't!S !lll<1. in my opinion, it. should also have some adequate e.rn/a nation 0 ,n,e Principle of kinetic operation, the re- qnirement of the periodic feed of the rock, the hammer blows applied to large rock masses mill • lrl> "»?,'SC1'Vi° fl'« progress of (be I™ 011 "PPltcntnm in tbe Patent Oillce his at- foi ney contended that. Mr. Edison had made a mlnnnn T“lci1nS thllt expression -'to i nn i,n cation winch is not merely an outgrowth or extension of previously known 1 ' fetl t-sl ed ,p„° h1' 1 :] to e tint tiJ * 1 l> (-pit t S o be EfiL , applicable Edison intention, it being clear that me kinetic metiioa. o, operation is funtlamen • \ tail], new with Mr. Edison and that the prior I art does not even show an example of rough¬ ened rolls driven by u belt, nor even a single I example of a rock-crash mg roll with hammer • I ing knobs. It seems to me clear that Mr. Edi¬ son’s invention is n pioneer, not only in the underlying method, hut also in the apparatus required to practice that method.” Plnneor chnrnotor of Edison's ktnotlo method and uppurntus The contention in the Patent Omce that Mr. Edi¬ son had made a pioneer invention is quoted by Mr. Bentley from the file-wrapper and is ns follows (C.R., p. 470) “On (lie whole, therefore, it is submitted that applicant’s invention is of the pioneer order and should be liberally considered. So far as “| can be determined, applicant was the first to provide tin uppurntus in which enormous pieces of rock could he broken in a very eco¬ nomical manlier by the sudden expenditure of energy stored up in it pair of massive rolls ro¬ tating at- high velocities, the rolls acting, ns stated, practically as a pair of enormous ro¬ tary combined, hummers and crushers. Nor J • did any one, prior to applicant, even suggest the possibility of sink a mode of operation, so j that the method claims appear to he clearly | patentable.” Distinguishing the belt-drive, of the form of ap¬ paratus shown in the patents in suit ns an embodi¬ ment of the inventions, from a drive by gears, Mr. Bentley said (C.R., p. 525) ; — “Mechanically speaking, in view of the heavy weight and high speed of the rolls, I lie- Hove Hint quite n wide range of hammer blows can lie delivered by reason of the yielding nature of the belt-drive even if then do not in¬ volve a perceptible slipping of the belt. Jl ore- over, with snub heavy rolls miming at high speed and provided with knobs capable of de¬ livering blows, I believe tlmt even mail blown which might, not emme n perceptible nlip of the belt upon the pulley would still be taken up by the yielding or clastic nature of the belt-drive, although if the rolls were positively geared to¬ gether by toothed gearing, the same small blows might strip the gear teeth. In other words, the belt drive prevents the rigid reac¬ tion of one roll upon the other, like the reac¬ tion of one jaw of a pair of pinchers upon the other jaw, and snsbtitutes therefor a cushion connection which prevents the shock of a blow by one roll from being transmitted rigidly to the other roll through gear teeth or oilier un¬ yielding mechanical connection. I therefore believe the belt-drive is an advantage even if its cushioning effect does not amount to n defi¬ nite slip of the belt upon the pulleys.” remlnnls employ the belt-drive of the Edison pntonts to do for the unenunl hnmmorlng of tho knobs of the' rolls. rolls ere ' Indopendonlly-drlvon" mid “disconnected." ie difference between a belt-drive and a drive by s being such ns Mr. Huntley lias shown in the •nl qindiitiwiis above made from his testimony, cason why defendants hare employed the licit- 1 of the patents in suit instead of a drive by 'j i is stated by Mr. lientley as follows (C.I!., p. : ";!S “The obvious reason why Defendants did lot use toothed gearing between the two rolls •s the necessity of providing, for unequal ham- noring of the’ rolls upon the rock. It is- im- lossiblo to expect that the hammering knobs m the two rolls will always strike the rock qnally and evenly at the same instant. If one oil delivers a hard blow and the other does not, the shock would strip any toothed gearing that could be employed and the shock which would strip toothed gears would inevitably slip a belt. So long as tho Defendants do not have their two rolls connected together by toothed gear¬ ing, they are ‘ disconnected ’ ami so long os one roll does not act to drive the other through toothed gearing they are ' independently driven ,’ as Edison contemplated.” The relation between the kinetic power or the rollB and the H driving agent. The driving agent must permit the massive ■oils to expend tlielr kinotlc energy upon the rock. With regard to the relation required by tho (kinetic principle of operation between the kinetic power of the rolls and the driving agency thereof, such ns. the licit, Mr. Bentley said (C.I!., p. 8);- “The kinetic principle involves the require¬ ment of a proper relation between the kinetic power of the rolls and the driving agency, so that the rolls will not be merely stopped by the rock but shall actually crack the rock without being brought to a standstill, and that the yielding or slipping of the belt will 1 merely permit the application of "the- roll- I energy to the crushing of the rock, and not be expended in tearing and burning the licit. In addition there are the slugging knobs which have the function I have repeatedly described.” As slated above (p. 0) before the invention [ and adoption of the larger slugging knobs the “ kinetic method'’ was not understood or utilized ' and Mr. Edison’s experimental set of giant rolls t Edison, N. J. could not be practically oper¬ ated. Without the sledging knobs the important double operation of sledging; with the larger knobs and then breaking |,y u rolling nation with the smaller knobs, which disclosed and developed the kinetic method of breaking rock and which first made the giant rolls effective for the breaking of rock, was, of course, absent, and, as a consequence, rock would continually ride and shill tbe rolls and not be broken and crashed thereby {supra-, p. !)). Air. Bentley points out that smooth faced rolls would be practically inoperative to deliver kinetic energy to the roek (C.H., p. 52(1, xQ. 5(1), that any embodiment of the Edison invention must, so far as he knows, have rolls provided with knobs cape- blc of tlelioeriny hummer-like blows (C.U., p. SOT, fob 1S20), and that without the slagging plates or knohs no practical embodiment of the kinetic method has so far ever been made ( CJ.lt., p. 088, fob 1013). Speaking of Mr. Edison’s first experimen¬ tal machine, which was not provided with the slagging knolis and in which a sine lining inter¬ vened between the face of the mandrel and the plates having knohs of uniform height, Arr. Bent¬ ley said (C.B., p. 541, fob 1023) “J, myself, do not know of huh instance of what / would consider a inuctical performance of such method without the sluyi/ina plates such as were not present in the experimental machine ni question and without a connec¬ tion of the hammering knohs to the roll man¬ drels such as would not he , Horded by the socket 8 with zinc lining.” The enormous power of the slugger knobs, when itriking hammer-like blows to break rock by ki- ictic energy delivered through the knobs by the in- lependen fly-opera ting massive rolls, that is by oils not geared together, was pointed out by Mr. wison’s attorney in the Patent Office in a passage noted by Air. Bentlev top. ,i™ imi The giant rolls do not simply crush the rock or ocks between them, but the same is broken np lore the rolls by the action of tbe slugger knobs ■fore it passes down between tbe rolls to be sub- eted to' tbe rolling action of the lower knobs, as cplained by Air. Stephens in his letter to Air. K. iispnris {infra, p. 54; C.B., p. 700), and by Air. lentley {supra, pp. 0-7). Air. Alason lias described e action as follows (C.R. p. 158) ; — “RDQ. 100. "Will you explain the breaking of a large rock by the knobs of the sledging plates? A. When a large rock is delivered on the rolls to he caught by the regular plates, the sluggers will project above the regular plates, striking this roek a sledging blow as the rolls revolve. The rock either has to break or lift against gravity to a height equal to the dif¬ ference between the slugging plates and regular plates. This, of course, occurs in a fraction of a second and the inertia of the large stone is so great that the stone shatters or breaks after one or more blows of this kind. ltDQ. 101. That is, the large roek is shat¬ tered or broken in preference to being lifted? A. Yes.” On cross-examination, Air. Alason stated the two istinct actions involved, first, the sledging of the ock above the rolls and, second, the crushing of he sledged pieces, by the rolling action of the nobs, between the rolls (C.B., p. 312, xQs. 201- 26 lamps are supplied directly from the dynamo, which is of adequate capacity to operate all the lamps directly. Another system is one in which a small electric power, totally inade¬ quate to operate the lights directly, is stored up during the day time in storage batteries and at night the lamps are operated from the storage battery which has accumulated suffi¬ cient electric energy for the purpose, and not by the small dynamo itself, which is totally inadequate for operating the lamps directly. Edison has devised an analogous system of rock crushing in which the inadequate driv¬ ing power is stored up in the massive rolls and is applied by the storage means and not directly by the driving agency itself. Of course the alternate storage and expenditure of kinetic energy in Edison’s method com¬ pletes its cycle in a few minutes, whereas the alternate storing and applying of electric en¬ ergy by storage batteries involves a cycle of some hours. In both, however, there is the elementary idea of alternate storage and ex¬ penditure of energy. The Umholtz patent in question, as well as all of the other prior art, is completely luckiny in this elemental principle of storage, or the repeated and sud¬ den expenditure at a high rate of energy accu¬ mulated during a much longer period at a low rate." The kinetic method involves rolls ot such weight that, hen revolving at the required speed, they will not only crack e rock, but will continue the rotation. Rolls ot Edison pat- it 567,187 and other rolls at the prior art distinguished. Mr. Bentley, further developing the point that ic small driving power cannot start the Edison assive rolls from rest, said (C.R., p. 529) ; — “For instance in the defendants’ machine and in the Edison machine at New Village the weight of the rolls is such that the driv¬ ing power will not start them from rest. No one would naturally build any machine in that way. It means that the construction of ions jor the kinetic method must ho stteh that i the weight of the rolls at, the required speed j ml! not only crack the rock hat will continue i the rotation. Otherwise the rolls wo " ' merely come to rest mul the belt would tw timie slipping 0n the pulleys mid tear itself i to pieces or fly oil' from the pulley. That is ' what happens in the ordinary machine driven by a belt; if the machine gets blocked or overloaded the belt cuts, burns and flies oir the Pulley. he Ed, son kinetic rolls, however, i cvcisc the ordinary mechanical use of belts • i J,Zh ":C", n11" V'0 80 ponderous and qo at ' such speed that, by their kinetic energy then no only crack the rock but continue their ro¬ tation and the belt slip is a temporary matter Ruining a useful characteristic of the inn- : ehme as distinguished from an objectionable mitrel'To.1'0.".8 ,?r1"' Tl,e construction re- i hicl bl i • ® ' V'otl,otl is therefore | mciinig in the instructions given in this prior Edison patent No. 6(17,187.” T011 arlvl"S power Is dollnea in two of tho rlnim» „ tUo^owor’^nnd In °ono MOnsuflM ‘h° d,r°Ct aP,”,Cal'0n °‘ « state or rest, Vo?,: “ ll'itli regard to tho relation existing between Z~r the poww Z TI TT;, u Cowt wi" obSCT'’e fi 7 h / lie ni,l,an,t,,s Patent No. G72,- the' power"! S ,lro ^>«ci;ibe(l „s “massive rolls” and the poaei connection is described as follows;— by the direct application of the power.” description rff tho SUIUe "PPnrntus patent the sst „ \z:zzizr° '■ ** - diirere.it, being £ fol,o«““ P°W°r COm,eCti°" In the quotations above made from Mr. Bent- nicy’s deposition, a full explanation is given of Svliat is meant by “a power connection delivering power to both tho rolls insufficient to start the rolls from a state of rest” (supra, pp. 4, 24) and !‘n power connection delivering power to both the foils insufficient to break tho rock by the direct ipplication of the power” (supra, pp. 4, 24). 1 As stated by Mr. Bentley, there is nowhere in the prior art a suggestion of rolls so massive with ■elation to tho driving power that they cannot be darted by the driving power from a state of rest (supra, p. 24), while with the Edison, mnssive, kinetic rolls, because of the small driving forco nnployed and tho great weight of the rolls, it is necessary first to start the rolls from a state of rest by means of levers, air hoists or other pre- ffiliminary starting device and then to apply the ■driving force or power to bring the massive rolls, ffithus started, up to a high rate of speed and tlicre- |by accumulate, by the continued application of lithe power, the enormous kinetic energy' required Ifin the operation of breaking rock by the kinetic Bmothod (B.R., p. 351, Q. 17; p. 360, xQ. 71; C.R., ip. 104, Q. 38; p. 107, Q. 48; p. 39, Qs. 155-156; ||p. 69, Qs. GS-70; supra , pp. 6, 13, 16, 24). } Mr. Peterson, the superintendent of defendants’ ||pctdii plant, testified (D.R., p. 360, xQ. 71), with preference to the starting of the infringing giant scrolls at Pekin, ns follows; — “I have seen the rolls get partly started with levers and air hoists, although not botli together, and the motor has been unable to pick lip the load, owing to the rolls coinin'' to a stop before the motor was thrown in.” With regard to the limitation in claims 1 and 3 of the apparatus patent of “a power connection delivering power to both the rolls insufficient to break the rock by the direct application of the power", Mr. Bentley has pointed out (supra, pp. 15, 24), that tho accumulation of kinetic energy in the Edison, massive rolls by means of u small power applied over n considerable period of time, thereby making the rolls themselves the active agent in the cracking operation, is in marked con¬ trast with the methods of the prior art, wherein the dric iny power was tho crushing agent and was of adequate magnitude to perform tho crush¬ ing operation. Since the breaking of rock by the kinetic method involves the use of “a power con¬ nection delivering power to botli the rolls insuf¬ ficient to break the rook by the direct application of the power,” it is a matter of common expe¬ rience, as pointed out by Mr. Mason, the super¬ intendent of the Edison giant rolls plant at New Village, N. J., that an inexperienced operator will frequently stall the rolls by introducing a charge of rock before the rolls have hud sufficient time to gain the requisite speed and thereby store up the kinetic energy required for the breaking opera¬ tion (C.R., p. 142, fols. 425-428). So in tho operation of defendants’ infringing Pekin rolls, it is necessary, after starting the rolls by means of levers or air hoists, to apply the driving power to the rolls for such period of time as will bring the speed of the rolls up to about 183 revolutions per minute (C.K., p. 2S7, D.R., p. 201, Q. 45- 412, xQs S!l-!)0). Then upon feeding rock to the rolls, the accumulated energy is expended in the breaking of the rock, the speed of the rolls fall- my, say, to 153 revolutions per minute (D.K. n. 328, xQ. 247; C.R., p. 287), proving that the rock has been broken not by the direct application of the power, for that was clearly insufficient as shown by the lull 111 speed of the rolls, but by the akinetic energy stored up in the rolls and expended I ;i'jfin tho manner above described by Mr. Bentley. tTlie small driving power of the defendants’ ekin and Detroit rolls is hereinafter more fully cpluined (infra, pp. 78-81). Rock crushing apparatus of the prior art operated to plneli d crush or split rock or coal by the direct application of 0 power, the "kinetic method" being entirely unknown, n tho prior art tho feed was continuous, not intermittent, joared rolls of tho Stutz patent, rolls of Edison patent 507,187 jg|Snd other rolls of tho prior art distinguished. That is to say, in the prior art, the operat¬ ing elements, for example, of a jaw crusher of a pair of ordinary grinding rolls, were riven by a driving force that was not only suf¬ ficient to start the operating elements from a state of rest, but was sufficient, without the storing of ’-.inetic energy, continuously to pinch and crush split small pieces of rock or coal continuously | applied . In the course of bis review of the history of the xpression, “independently-driven and disconnect- 1”, Mr. Bentley quoted freely from the able argu¬ ment of tile attorney who prosecuted the applica¬ tions for the patents in suit (C.B., pp. 4G9-481). Among the quotations made is the following, •JSfhicli explains the difference between the ordinary ;%mrushing rolls of the prior art, which operated to '■terush rock by the direct application of the suf- I ficicnt power, and the Edison, massive, kinetic Ms, which break rock by kinetic energy stored r accumulated in the rolls, the power connec¬ tion delivering power to the massive rolls being mtirely insufficient to break the rock by the di¬ et application of the power (C.R., p. 477) ; “The patent to Stutz, No. 203,794, describes ordinary crushing rolls, such ns have been used for years in reducing or pulverizing coal and coke. Manifestly, with these rolls, lmv- 30 ing u continuous, or practically continuous, feed, there would be no opportunity for tak¬ ing advantage of applicant’s si igyestion, nor would the apparatus be capable of operutiinj by kinetic eneryy, and finally, the material operated upon would not make such an opera- lion a necessity. With the Stuts patent, the rolls are geared toyethcr, so that they all turn in unison, and a lly-wheel is employed, as the patent states, ‘to regulate the move¬ ment of the machinery.’ It would be im¬ possible, in the iirst place, to employ a lly- wheel as a device for storing up energy in a crushing roll such as applicant describes, be¬ cause if the lly-wheel were made largo enough for the purpose no shaft could lie constructed to withstand the strains to which it would be subjected, nor could any bearings be built to receive them. Obviously, the muss should be located where the work is applied, and, there¬ fore, applicant has found it necessary to con¬ solidate the muss in the rolls themselves. Furthermore, it would lie impossible, in a set of rolls operating ns applicant describes, to positively gear them together, because the rolls are subjected to different obstructions and the speed of one is always arrested be¬ fore that of the other, so that the teeth of j any year that could be made would not with- i stand the strain; and, dually, concerning the j patent to Stilt?,, it is clear that the fly-wheel f is not relied upon to assist in the crushing S but is used simply to secure uniformity of f movement, as is the vase with all fly-wheels. ; Since Stilt? describes three distinct sets of I rolls and a single lly-wheel, it will be obvious ; to the Examiner that the rolls are not inde- J pendent, and that there would be no op- portumty for any one pair of the rolls to as- t sist by their momentum in the reducing £ operations. ,i, Applicant’s own patent, No. 5G7,1S7 is an }' ordinary pair of grinding rolls for reducing | the material after it leaves the intermediates, I which in Ins null m Edison, New Jersey are ? placed beneath the giant rolls. This patent [I has no bearing on the present case.” I? yfl Ulst,,ry of the expression “independently-driven SgSnnd disconnected” in tile patent ollicc. Delend- I® I’lio argument of Mr. Edison’s attorney in the patent ollice. iI|a'ho Babbitt, Stutz and Culver patents of the prior art dis¬ tinguished, the rolls thereof being geared togothcr and ono |T0ll only being drlvon by the operating powor. Distinction jbotweon hammering "knobs" opernUng Intermittently by jjdnotlo energy and grinding teeth tearing material constantly H Mr. Bentley reviewed the proceedings upon the Application for patent in suit No. 072,010 (C.R., ipp. 400481) and set forth the history of the ex¬ pression “independently-driven- and- disconnected'', jjpnnd in claims 1 and 2 of the method patent mid in claims 1, 2 and 3 of the apparatus patent, jfie quoted from the argument of Mr. Edison’s attorney distinguishing the prior art nnd show- jng, for instance, that the rolls of the Babbitt, |tutz and Culver patents were not “independent” polls but were rolls " geared together,-” that they aid not operate, and were incapable of operating, to break rock by kinetic energy developed and |tored in an enormous mass travelling at high velocity ; and that there was a constant or prac¬ tically constant feed of material to sucli rolls, which, like all other crushing rolls of the prior art, operated to crush rock by a steady and con¬ tinuous grind, the full poivcr of the engine being expended at ull times (O.R., pp. 475-478). Refer- nice to the Babbitt, Stutz and Culver patents (C.R., | 715; D.R., pp. 738, 7S4) shows that the two ‘oils are (a) positively geared together by toothed tearing and (b) one only of the two rolls is (riven, by the operating power, the other roll bc- \iy geared together by toothed gearing and (b) one only of the two rolls is aWr driven by tho operating power, the other roll 1 "&SS/ Going driven secondarily by its gearing con- _,;i| |H nection with the first roll.” By turning to the three patents cited by the “amincr, “the object of the reference is thus adily perceived” ( Vroamun v. Penhollow, 179 ed. 290,302, C.C.A., where the examiner cited reference without specifying what bis reference as intended to develop). In the Birkhote, patent (C.B., p. 718), for a slier Grinding Mill such us a “small or portable” ffee mill, the two grinding rolls are C and I fig. 5). The two rolls are geared together by e gear wheels J and K. Boll O is driven by md, by the balance wheel D, or by a driving lley in place of balance wheel D (p. 1, lines 57- ). Motion is communicated to roll I from roll through tho gear wheels J and K. Thus the lls of the Birkhote patent are not independently- iven and disconnected, because they are geared gather, one roll only receiving motion from the icing power and the other roll being driven '.ondarily by its gearing connection with the . f. st roll. ’■rWIn tlle patents to Coxe, Nos- 527,411 and 527,412 |f^.B.’ p. 774, and C.B., p.. 727), the arrangement iJBBtt precisely the same as in the Birkhote patent. SBalPiat is to say, Coxe’s two coal breaking rolls (B B') are “connected together for co-incident jMsmovement by iutermeshing gear-wheels 4 and 4'” WaKV- 1> line 9G of No. 527,411 and p. 1, line 74 of No. 11127,412), one roll only, to wit, the roll B, being by 11 belt 18 passing around a pulley 19 up- t be main s,lilft 10 nnd thence around a pulley 29 secured to the slmft 2, of the roll B, and the other \ roll B' being driven secondarily through its gear ■ ! ing connection with the first roll B (see Fig. 1 of \ each patent). i EdlBon avoided tlio uso of gears, so that ono roll would t not roact on tlio other roll. Ilo employed a holt-drlvo, thus i making his rolls “indopondontly driven and dlsoonnootod." !i The giant rolls of the patents in suit are not I: . . acted by toothed gearing or other rigid con- ! neetion. They are, therefore, “disconnected" j: (supra, p. 21). Nor does one roll act to drive : the other through toothed gearing or other rigid • connection. They are, therefore, "independently ’ driven’’ (supra, p. 21). Hr. Edison “did not year the two rolls together ! ’ hy toothed gearing so thut a blow delivered by one T roll would react upon the other roll through the gear teeth, somewhat as the jaws of a pair of j pinchers react on each other through the hinge, 1 but he gave to each roll the capacity of delivering ■ . its blow without reaction on the other roll, the : rolls being independent one of the other” (supra, '' P. 10). Defendants’ ] ■looted," and, tin patent and clntn s are "Indopendontly-dr Such then is the history and the clear meaning of the expression “independently-driven and dis¬ connected massive rolls” found in claims 1 and 2 of the method patent and in claims 1, 2 and 3 of i the apparatus patent. Therefore, defendants’ rolls at Pekin and at Detroit are independently-driven . ami disconnected, and, since the defendant’s .said ro Is embody every other element and limitation ! set forth m claims 1 and 2 of the method patent f and m claims 1, 2 and 3 of the apparatus patent, f ns hereinafter shown (infra, pp. 50, 52, G2, 100), in- ' fringement by defendants of those claims is cslub- J lishcd nnd the only question of infringement raised . - by the defence is whether the Pekm rolls are pro¬ vided with slipping power connections and infringe iCf.claims J/ and 7 of the apparatus patent. The proofs show conclusively that defendants’ Pekin and De- J’^troit rolls are provided with the slipping power ■^connections of claims 4 and 7 of the apparatus ^patent and that the defendants have copied said .^•slipping power connections from the complain- .■‘Want’s embodiments of the inventions of the patents S Jesuit (infra, pp. 50, 52, 02, 100). IS example glvon In the patents In suit of the lndepend- it drlvo of the two, masstvo, disconnected rolls is a slnglo It Imparting motion to the two rolls, through the separate ' the rolls. ^jEacli pulley, and, therefore, each roll receives its |mbtion independently from the common belt and through gears or any other rigid connection .jpvitli the other pulley or the other roll. Hr. fffijBentley has described the independent drive of |||each of the two, massive, disconnected rolls of She apparatus of the patents in suit ns follows $!(£•«., P- 530, xQ. 70) ; — “Thus in the New Village plant there is i common belt and each roll has Us own : individual drive by means of its own pulleys ''ing independently upon the common belt. in the defendants’ Dunbar plant the com- i source of power is the electric circuit, ‘ each roll having its individual electric motor and both motors being supplied from a com¬ mon source of current. Possibly each roll might have its individual steam engine but those steam engines might take steam from a common boiler. In other words the agency common to Both rolls may be more or less remote and the emphasis is rather upon the individuality of the drive provided for each roll.” The independent drive of defendants’ Pekin rolls and of the Edison rolls of the patents in suit at Sibley, Mich., is exaetly like that of the Edison rolls at New Village ( infra , pp. 8S-100). Each j roll has its own individual drive by means of its I own pulley bearing independently upon the com- ! mon belt. The pulleys are fast on the roll shafts, j The independent drive of the defendant’s (Allis- i Chalmers Co.) Dunhar rolls is exactly like that of j the Edison rolls of the patents in suit at the plants of the Little Falls Stone Co., the U. S. Crushed i Stone Co. and the Kelley-Islnnd Lime & Transport ! Co. (infra, pp. -IS, 52). Each roll is driven by a : separate belt and a separate motor. Dofemlnnts Imvo mtido Chinese copies of the Edison ma¬ chines. The defence of non-lnfrtngomont Is without merit, \ does not apply to tho inothod patent nor to clnlms 1, 2 nnd ■ 3 of tho apparatus patent, nor has It any truo hearing on ; claims -t nnd 7 thereof. Defendants have appropriated not only the sub- ji stance but every detail of the inventions of the [ patents in suit. They have made Chinese copies of ? Mr. Edison’s embodiments of his inventions. They ; obtained their information, as to all details, by deception and stealth (infra, pp. 53-01). The!; defence of non-infringement is that the driving :: belt of the Pekin rolls does not “slip” but “creeps’’ upon the pulleys on the roll shafts. This defence, as shown, has no hearing whatever upon claims 1 . and 2 of the method patent, nor upon claims 1, 2 ; nnd 3 of the apparatus patent. Moreover, it Ims 1 no true bearing upon claims 1 and T of the ap¬ paratus patent because “creep” is a form of “slip”, and because, concodcdly (infra, pp. 00-91, ioi, 100), the driving belt U of the Pekin plant (see Com- plnmnnts Exhibit, No. 5, Drawing Illustrating / Defendants’ Slugging Rolls near Pekin) slips V.’.upon the clutch pulley n on the line shaft T, nnd s/tUe belt passing from the motor pulley S about the pulley t on the line shaft T also slips, thus permit- .'(iptigg a reduction in speed of the rolls in the man- s‘|gner contemplated by the patents in suit (infra, ;SPR- 89-90). Moreover, the proofs conclusively j$fi?w (infra., p. 100) that the driving belt U of the ^ndnnts’ Pekin plant slips upon the pulleys on ' /She roll slinfts. With regard to the infringing rolls 1 vatDelmit, no defence of non-infringement has been off can be raised. [Claims 1 and 2 of the method patent and claims and 3 of the apparatus patent contain no lint- * “-jtion of a slipping power connection. The ex- -^pMssio", “independently-driven and disconnected Jgmassivo rolls,” found in those claims, means, as asatown. that the rolls are not connected by toothed llIld 0,10 r°n l,oes uot tJrwo thc ot!wr 'iPw through toothed gearing or other rigid connce- ‘'slipping power connections" of clnlms 4 nnd 7 are ^og.tmllod to mo friction clutchoB of clnlms 6 nnd C. Put Aith regard to the limitation of " thc slipping n“ . connections for both rolls”, set forth in >t of the apparatus patent in suit, No. 72,017, and the limitation of “ slipping power s” set forth in claim 7 of the said :;|p)atcnt, which limitations are not found in any of fihe other claims in suit, it is to he observed that Ill 1 Million Works v. Trout , 92 Fed., 375 a Judge Morrow said: “Infringement cannot lie avoided by read- 1 . ing into a broad claim of a patent specific dr. vices claimed in narrower claims of the pul- citing an opinion by Judge Sanborn, wlio said (n !■ 3SS) ;— 1 , “T1J'S invention consists essentially, as the;? inventor declares a( the beginning of his specif bcation, in the comliination, * * • ,1M(|fc t bat be has broadly claimed tins combination [ in the first claim of bis patent. There is not? an element m this combination which is not ; found in the windmill of the appellee, and ll fi ?|l- be permitted to read otlier elements r lll,s f ,,,m> '''"l then to defeat it, because j? it docs not use the elements it interpolates.” 8S0S ?x°' V' AC0Uml G°-’ 143 Fetl’l 880, SSo, (C.C.A.), the court said (p. 885);— N m'/coV r^ssr "> 'Malls! He thru 4 friction drivel, inherently capable of ,11,, pirn, «|R-1 , J particularly under sudden overload, and in U Ins respect ,s ladicmi, different from a positive' Onto hy toothed gearing, in which there is no slip I all times S~tl- A, f|,|‘ilItm Inhere ity ^ T"8^,t 'im0S) Particularly under ^ Sr!c.iS!!giw l,l“ rol,°* : A POSITIVE DRIVE is n r,„.„ r , mission senv in wlnVii n, n 1 trims* A face against the driven surface.” * ^ 8 ■ i gSS—H: ==E~HS=£::i suit and copied h„ thc defendant, ! JS ‘intthe construction and operation of the infringing trolls at Pekin and Detroit. V-jTho location of tho slip la Immaterial since It 1b intended >at!$PiP®ra>n n reduction in speed or tho rolls. As shown by patents, the slip may occur at any point between tho motor and tho rolls. Whether the slip occurs at one point or at an- ^}Sf|?e1, 18 entirely immaterial because, as stated in \-the passage above quoted from the method patent mmetiipra, p. 41), the slip is intended to permit the I lotion in speed of the rolls when rock is dumped n and broken and crushed hy the rolls. As ex¬ iled in the passage quoted, this result can be implished in any one of several equivalent ways, er hy a slipping power connection or by discon- ;ing the rolls from the driving-shaft, as hy ns of a friction-clutch pulley on the line shaft I., p. 18(1, xQ. 35), such as is employed in de- innts’ infringing rolls at Pekin (C.B., p. 56; J. 273-277) or “even by maintaining the con- ion with the driving-engine of small power and wing its speed to he reduced with that of the If a sliPPinK P0"’er connection be employed ’^accomplish this result, it is clearly immaterial, Abilin the meaning of the passage above quoted Alcorn the method patent, at what point the slip mM?* Place> so hmg as the slip permits the raluc- 1,1 8Peed of the rolls. The slip may occur at -i|®ny point between the driving-engine or motor and r»Hs. Referring to Complainant’s Exhibit, 4 Dr aw ing illustrating Defendants’ slugging rolls | ifeiiear Pekin, it may occur between tiie belt from engine and the pulley S (C.R., p. 80, Q. 128) S{ the pulley t on thc line shaft T about which J?h belt passes, or it may occur between IfPfe clutch pulley u on the line shaft T and iMpie belt U which passes around that pulley and iHS'e two pulleys U2 and U„ on the giant roll shafts, or it may occur between the last mentioned! holt ami one or both of the said pulleys on the giant roll shafts. Or, if a friction-clutch be employed ! between the giant roll shafts ami the saiil pulley,' thereon, it may occur at the friction clutches. l„! each of these cases there is, within the meaning of claims -1 and 7 of the apparatus patent, a slipnml power connection accomplishing the result of mr- ' mutiny a ret! notion in the speed of the rolls \v1iod> 1 k “ 1 I 1 I 1 bol d crushed by i the rolls. As shown by the proofs in this suit, lion- matter referred to (infra, pp. SS, 1.00), in the 12,11. !: son giant rolls at New Village and in the defend- f ants infringing rolls at Pekin, the slip has occurred* at every one of the points mentioned, permitting a! reduction in speed of the roils when breaking and' crushing rock. fi Cb2r£siSSLS''"’’;'“““p Upon this point of the locution of the slin Mr ! °f U,e “The defendants' rolls are driven hv i.,.a rnliiti- ii.i. ..in tllL' otl,UI- shaft so as la ' and the arc of contact between the I ,’n : •' have’a friction cllitch^co”* ,W^Mt8 tl,e hi Zisr,::; a ggg-g “?*>£> : itWj at Nc"’ Village, K. J. I found the pulleys fast m the roll shaft, just as in the defendants’ arrangement, and 1 understand that they have % h™" that "■'"// for several years, the slippage i‘ therefore occurring between the belt and the | Valleys instead of at the friction clutches i the arrangement shown in the drawings of Pntents »» suit, especially Fig. 3 of each pat- |nt two points are shown at which the slip referred ;Jnny take place; first, between the driving belt t'le Pl,Heys on the roll shafts; and second, at friction clutclles between the roil shafts and pulleys thereon. The apparatus patent states 1. line 38) that “(he driving-hell % operates 1 "!/h slipping friction ” and the friction-clutches slip. In the actual operation of the Edison tl,e friction-clutches, specifically claimed in dSims 5 and 0 of the apparatus patent, need not H|employed. Upon this point Mr. Bentley savs |n., p. 483) ; — a “3r*'- Edison, in the pntents in suit, shows | both roll pulleys driven from belts bv the | main motor, the pulleys having a friction | clutch connection with the roll shafts, ft ap- | pears that, in actual operation of these Edi- Kson rolls at the New Arillagc plant, the belt M friction. alone could he relied- upon , and the H cl niches were therefore practically eliminated |hy being made fust. 1 loth the belts and the notion clutches were forms of rntCTiox nurvi?. at- it proved that only one of them was ceded. It is clear that one form of Edison’s ‘indo- |pemlently-driven-and-disconnected’ nrrange- fejuent is the interposition of a friction drive | h.v which (a) the two rolls may both slow I1 together when delivering their hammer I blows to the rock and (b) one roll can slow ft down differently from the other whenever it i happens to deliver blows to the rock sepa- ' l'ately from the other blows. Another form of Edison’s ‘independently- il i- i vcMi-a iu1-d iacoii ncc ted ’ arrangement is nncj wliorein each roll is driven. hi/ its own . imli-i eidual motor. Iij- this arrangement also tliet two rolls may slow down together, or one nun ; slow down separately from the other. Tliis- form, is used in a number of practical instnl- k ations of the Edison apparatus and has also'1 been adopted by the Defendant, the Allis- ti Chalmers Co., in a recent installation at Ilo-fi troit, !; In the Pekin plant the Defendant Iinsj- adopted the frivlioiHlrive method substmi-r; tmlly as in the Edison machine at New Vll-i'1 lage and, as 1 have said, if the Defendant docs;:! not have rolls which are ‘independently-driven. K aml-d ^connected' then Edison himself dues? Hr. Knowlton, superintendent of the Sibley P Quarry Company, which installed a set of Edison fj giant rolls of the patents in suit in 1007 umlerp payment of royalty, states that, when the rollifj were first installed, the friction-dutches, belngp present, were employed, but that when one of th/ friction-bands happened to break, lie gave direct turns to make the pulleys fast on the roll shafts, I-! tl us elinnnatn'g the operation of the friction-1 : clutches (C.lt., p. (in, Qs. 15-1 i); p. ,ilT x(Js -)T. V;. m> x(i»' 105-10(1). This charne, '.Mr. I Kno"-,to'> t si ill s / / 0 cjfv(.t m {J ..I and he adds that' "Ik. tils ?! 8 f° VrlU IUkC" 11/1 h» ,he I Z,hJ r u n' iU ",C M *rW"'» 011 »"■ pulleys (C .It., p, (in, (2s. 18-iD). The same change bad previously been made ' upon the Edison giant rolls at New Village (C.lt, Q;, uaJ; llle «»nlt of the change at News* of the frl (• 1H! V? tilil"i"utiHI1 of ‘he operation on he r, i “S ‘>V «><» pulleys fash { ' tlui 1011 s,|afts, is stated by Mr Mason ' II"Q^ 57. The result of making the pulleys fast on the roll shafts, that is, so that the pul- eys revolve with the roll shafts, is what with ■espect to the belt passing about the pulleys vhen the rolls are engaged in breaking and mushing rock? A. It is the sumo to all br¬ ents and purposes. The slipping action I'liicli formerly occurred between the pulley nd tile shaft is now changed to the nullev nd the belt.” 'ore the pulleys were made fast on the roll i of the New Village plant, there was always or less slipping of the halt on the pulleys a roll shafts as well us slippage at the frie- lutohes (C.H., p. 186, xQ. 34; p. 79, Q. 122; HDQ. 271-272). Such was the case also the Edison giant rolls at Sibley (C.R., p. :Q- 37). elimination of the friction clutches merely sed the slipping of the belt on the roll shaft s. As above stated, the driving-belts also ue to slip on the pulleys on the line-shaft p. 15(1, xQ. 86; p. 124, xQ. 140; D.R., p. 246, p. 352, Q. 20) ping connection, wherever located, to permit a reduc- speed of the rolls, Is a “slipping power connecUon" atents. rover th e-slip may occur, to permit a reduc- ■ the speed of the rolls while breaking and ig rock, the connections making provision affo^such slip constitute “slipping power counec- -ittons” within the meaning of the patents in suit Muffiphe broad language of claims 4 and 7 of the f&Kiratus patent. Where there is a description of S|ogep>rm of a thing which would perform the same |§W§ce in other forms, the Court will apply the ailgeneral rule that the description covers all equiv- Igueflt forms, and the form described will be treated .Vsijnly us the one preferred ( Vroomun v. Penhollow, 179 Fed., 290, 307, 302, citing Winans v. Denmeaii 15 How., 330). This is in accord not only will!-- the well settled law but also with the statement of the patents in suit above quoted (supra, p. 41).! Exhibits and testimony showing the construction!! untl operation of'duruiidnnts’ Infringing Pekin rolls.! The construction and mode of operation of tltj! fondants infringing rolls at Pekin, N. Y., art!> shown by the following exhibits in evidence i| this suit; — k Dofondants' Exhibit. fi Blue print of Pekin rolls (D.ll. p. 398). ^ Complainant's Exhibits. !/ Drawing Illustrating Defendants’ Slugginjl Polls of the Empire Limestone Company neat*;’ Pekin, N. Y. (No. 5 in index). I Drawing of Pekin Plant showing Air Hoisli-’i and Means for Operating the Feed Roll (No. if in index). v U Photograph, Qenerai View -of Pekin Crustal I lant (No. 3 m index). f- Photograph, Parthtl View of the Giant Roll n. he Crusher Plant at Pekiu (No. 4 in index). ******* ***■*; of “ s"°wi''S Arc of Con tat f Dmiii& licit (No. 19 in index; cf. D K n .117 xQs. 101-105). ’ P‘ Contract between Ailis-Chalmers Co. and <* n of o-° v°- : Pekln sIed«»'g foils (C.H. pp. 194-19,; No. 12 in index). Ig: resSt!n!L'! °f- R°lls °f Pekin P>a»t with Rod ' testing against Hopper and a Slugger Plate ol Ihe North Roll (No. 51 in index) jK N vm °LDOf<:"da,ltS’ Giant rol>s at Pekin! N. Y. (No. 56 in index). ; t ‘Patents in suit, Nos. G72,01G and G72,G17 (Nos. ' Lland 2 in index). A- M ..[jTliat defendants’ Pekin rolls are substantially i:?S?xnct °°Py °f complainant’s rolls embodying inventions of the patents in suit appears 11 comparison of the foregoing exhibits with Vvtheffollowing complainant’s exhibits : — f /^Photograph of Edison Giant Rolls nt New Vil- ’"•lage, N. J. (No. 6 in index). \.';i/l/?jiotograph of Edison Giant Crushing Rolls at |‘s,,h,sy Quarry Co., Sibley, Mich. (No. 7 in index), otogrnph, Dumping Skip of Rock into giant irushers of Edison Portland Cement Co., New ge, N. J. (No. 8 in index), otogrnphs of the New Village plant coll¬ ared in the Catalogue (pp. 5-14) of the Edison “Sand Cement Co. (No. 10 in index). "etch of Belt Drive, 5 ft. x 5 ft. rolls, New Vil- N. J. (No. 18 in index). ipSat defendants’ Pekin rolls operate precisely rolls of the patents in suit and precisely ■'Usltlie rolls constructed by Mr. Edison and em- vJigdyibg the inventions of the patents in suit is 1 jg01' s,l0Wn tIie following complainant’s ex- ckiDinl Chaits 1 „i s 1 letteis (Nos. 21-47 ii'nindex) . ••^Substitute Belt for Defendants’ Exhibit, Illus- • slraHve Model of Belt creep (No. 48 in index). ‘.^Tabulation from Defendants’ Exhibit, Tnbu- &iSgn from Record H (No. 49 in index). ^Wattmeter Chart of U. S. Crushed Stone Com- it&P8Py,8 rolls (No. 50 in index). Srof. Martin’s Chart, sections 1, 2 and 3, plot- from Defendants’ Exhibit, Record C (No. 52 adex). 52 Pi'or. Pryor’s Chart plotted from Defendants’ i' Exhibit, Record C (No. 53 in index). ' The numerical tables in complninnnt’s record,; enumerated in tlie index thereto, also disclose same operation of defendants’ Pekin rolls. ’ Complainant's Testimony. Complainant’s witnesses, Messrs. Willinnu, Hartignn and Hertor visited and inspected dt ! fondants’ infringing Pekin rolls and, in conns-, tion witli many of the exhibits above referred to- described the same (C.R., pp. 12-130; pp. 221$ 242). | Testimony nml oxliililts showing tile eonstriietloj ami operation or tlio Infringing Detroit rolls lmllll liy the (leremlant, tlio Allls-Clialmers Company, bli¬ the Dunbar Stone Company. Mr. Howard 0. Williams visited the infringe! rolls built by the defendant, the Allis-Ciialmen: Company, for the Dunbar Stone Company at tin;? month of the River Rouge, near Detroit, Midi.', and Mr. Williams lias described the said rolli’ in a deposition (C.R., pp. 373-380). The Detroit!' roils are exactly like the Pekin rolls, havin' keen made by the Allis-Clmlmers Company (vdl the same blue prints (D.R., p. 415 xQs. 9T.9S| P. 203 xQs. 140-151), except that in making (lit Detroit rolls the AUis-Chalmcrs Company copW the independent drive of the Edison rolls of tin patents In suit at (be plants of the Little Fall? Stone Company, the U. S. Crushed Stone Com pany and the Kelly-Islnnd Lime ft Transport Company, wherein each roll is driven by a scpi rate bolt and a separate motor, instead of one licit1 dining both rolls, ns in the Edison rolls at 2fe& Pekin S nntl th0 then they would all come forward and ask leading questions of Mr. Stephens (C.R., p. 210, Q. 29). -Those leading questions related to details of con¬ struction and operation of the Edison giant rolls, including sizes of important parts of the rolls and .thgjUrives of the rolls (C.R., p. 210, Q. 30). In ad- dition to the measurements which- Mr. Stephens ,:gavej verbally to the Allis-Clmlmers men, other measurements of the Edison giant rolls at Sibley obtained a short time afterwards by one of the^Allis-Chulmers men on a subsequent visit (C.R,, p. 210, Q. 31). v4s,On May 0, 1908, Mr. Kenneth Caspnris wrote to .^Slgptupehens from Pekin, where the infringing SM^vere “istalled, asking for blue prints and di- ?|l§2iol,s of tbe Edison giant rolls, saying (C.lt., mSm- “'You,ld y°u 1{1,1<1ly send me blue print or Slflir '°*le 1 sket<:l1 of dimensions of crushing rolls 1 Vl!n ",oro properly draw up plun of plant y^meleeaUons. With little knowledge I have -of $WMLC,,jhlh> wk,th 111,11 length I cunt determine Pb'ot elevations till I have something to mBBbP by. If you would do this will be very ^^Mthankful.” V^%01" sil,Iey lri’- Stephens went on April 22 to £$J“?lI,lls> ®llio> 111,(1 there discussed with The Cas- ®tone Company contracts for the installa- . f(>m‘ or #ve Edison giant rolls on a royalty 01,0 of them to be installed at Pekin (C.R., Q- 31). The Casparis Stone Company’ kept "Ritbe pretense of negotiating with Mr. Stephens ■■■lfp,rjthe Edison giant rolls until sometime late in th^mmmer of 1908 (C.R., p. 219, xQ. (10). Sir. ' givcs. nt lo,1Sth the course of the negotia- rtioj^from which he testifies that “the Casparis SlggJ? "ever intended to sign” the contract, and P|gffi0ll|y trying to bleed us for information” (C 21!1> xQs. 00-01). Naturally, the parties IMlSf to agree upon the terms of a contract (C.R. |pj212, Q. 3Sa: p. 221. xO. fill. Tlmt Mr. Stephens made no mistake in his stale, menfc that the Casparis people never intended fc- sign the contract and tlmt they ami Hie Allis-Chli nmi's Company were, in (lie manner above set font only trying to bleed .Mr. Edison’s representative" and licensees for information, conclusively appoint from the fact that the contract for the infringin;:; Pelcin rolls, between the Allis-Chnlmers Compant and The Casparis Stone Company, shows that, ik¬ ing all the lime of the negotiations with Mr, Edi¬ son, the Allis-Chnlmers Company was under cot' tract with The Casparis Stone Company for tfe- construction of six foot by six foot sledging ro||^ to he installed at the Pekin quarry, one of the qnarjij ries to which the negotiations with Mr. Edison a! lated, (lie original contract therefor being dal# April 10, 1008 (CM?., p. 107, fol. 591). Furthermore, on May 27, 1908, after all obtain^ able in formal ion |,ad been obtained from an insp»V tion and minute examination and discussion of tb v Edison giant; rolls at New Village, N. J. and Sihk^b Mich., a new contract was made between the AlliV ' C. Iinlnioi's Oompsmy and The Casparis Stone Coi&;: pnn.v for the six foot by six foot sledging rolls li ho installed at Pekin (CM?., pp. 194-197; If.I?., ? 118, xQs. I (III- 1 25) and for the driving pullen 5 upon the roll shafts, the idler pulley, feed rail hopper above the giant rolls and discharge lioppo below the giant rolls, sheet steel doors or roll gnniiL' ; ; ( • ?• p. 10t„ fols. 588-589), 250 horse power elec trie motor, air hoists, belt conveyer and other up partitas (C.I?., p. 19-1 ) ; all ns shown in Complain' "• ants Exhibit, Drawing Illustrating Defendant!' Plugging 1{(,||S n(.ar Pekin, N Y (No 5 iC* Trnlox). !iVc The second contract of May 27, 190S (C.I?., k : • •>) contained the provision that the making there. ' " • ■ 1 ”"!|,eity cancel the previous contract to; “n/set of six foot by six foot sledging rolls (D.R., 'P-^}|)' xQ. 107). It also contained an agreement Allis-Clmlmers Company to defend at its own|expense any suits tlmt might he instituted The Casparis Stone Company for infringe- ;”}<|it|pf patents by the giant sledging rolls and otlier|.nppiii,atus to he manufactured, sold and do- Uvec|% under the said contract (C.R.. p. 195). '4fTho Allis-Clmlmers Company was well aware of .thdfgdison patents in suit and liad been warned invnntjail against infringement thereof ns early ns tr 10, 1907, in a letter written on tlmt date Edison’s attorney to the Allis-Chnlmers ny ( C.R., p. 199). The Casparis Stone Com- as also well aware of the Edison patents in reason of. the negotiations previously had r. Stephens (C.R., p. 212, Q. 38a). _ Villinms, in describing ids visit to the Pekin Isays (C.R., p. 14, Q. 7) r, 11 asked Mr. Casparis if these rolls were not tintlar to the Edison rolls. He, said that they very similar. I asked if there, was not mger of Mr. Edison bringing suit for in- Ingement. Ho said that it was possible but ,ls n°t expected, ns it was their uuderstnnd- ^ing that Mr. Edison had made large expendi- Jpires in investigations in connection with a I|new filament for incandescent lamps, and it Ipjas their understanding at the present time Itlmt lie was very lmrd up for ready money.” Williams also testified (C.R., p. 15) j;“Q- 10. Did Mr. Casparis say anything with Preference to previous negotiations with Mr. Edison for giant rolls? M? A. He did. Mr. Casparis was asked if they Jlmd not negotiated with Mr. Edison for the installation of a set of rolls. He replied tlmt *fUiey had, but decided tlmt they would he fool- Sgh.to pay royalty when the machine could be purchased outright.” -Ml' Haitigiiu test) lied to like effect, showing tk' dofcmhinls well know Unit they were infrL' the patents in suit and expected Unit Air. jj(£ ”’011pJ briny stilt. Air. Ilnrtigun said ( C. It,, p. g;V fir. Casparis told me that their conJv had been negotiating with Air. Edison, tla^ n Air. Stephens, for crushing rolls, it being if/ 1 tu 1 1 r ‘I t-1 Casparis Company to nut I? live sets of rolls and Unit they tried to mat' some arrangement with Air. Edison, tlmu* Air. Stephens, to reduce the royalty, or i' other words, pat the royalty on a sliding ml’i basis, but were unsuccessful in tins, anil Afi‘ ouled that they would build their own i# and 't‘e r0yul,«' that Ids fillip , J i&1'* 11,11 of tl,e Allis-Cluilmers Coi‘- I «"A had gotten together with a view of«$ l "I!1"® roI1»- Ce further stated tin tin. Allis-Uuilmurs Conipiiny laid built Ik''! sluguig rolls that were installed at Mir; at lie was sent there to superintend tlieon^ tUm_,,i,,i that after the rolls were put in sa 1 ovurfi ,t!,IL‘!‘ll",."> llln oC tlle Et?*S0Il giant rolls embodying the iavootions of the patents in suit. Having acquired sucWnforniation, they proceeded, in defiance of t^-Pa’tents, of which they had full knowledge, to tract at Pekin a giant roll crushing plant that ^substantially an exact copy of the Edison plants Village, N. ,T,, and Sibley, Mich. ; testimony of Air. Knp>vlton (GR,, p. 608) Jtlmt the defendants’ Pekin plant is an px- •gpy of the Edison giant roils of the Sibiey •ry Company and pf the rolls of the patents ut (infra, pp. 62-88), and since, ns stated by [Stephens, the Allis-Clmlmers men re-visited '*}oy plant to obtain further measurements, it |r that in constructing, erecting and operat¬ ic. Pekin plant, the defendants adhered closely ^Edison giant rolls of the Sibley plant which ibstantially an exact copy of the Edison giant it New Village. piereinabove shown (supra, p. 62), the in- ng giant rolls constructed by the Allis- jers Company for the Dunbar Stone Com- }t the mouth of the River Rouge near De- ilich., are exactly like the infringing Pekin [feeing mnde from the same blue prints, ex- i^|P?at in the plant of the Dunbar Stone Com- .i>anweacli giant roll is driven by a separate motor and4a' separate belt in precisely the manner in i ^i^. the Edison giant rolls of the patents iii ^iS^ave been driven at the plants of the Little- PaUs^Stoiie Company, the U. S. Crushed Stone jSgmgany and the ICelly-Island Line"* Transport Company. ^ Tlio ilefunilimts' Poltln Klimt rolls infringe It patents In suit anil nru exact copies of the Klimt rolls at Slliloy, jMIcli. anil Now VIIIhko, K.J,: The giant, rolls of the patents in suit and < the rekin, Sibley and New Village plants ca beeauso of their substantial identity, be descriW together. In the following description, ami eh where in this brief, reference letters used ntf’ respect to the Pekin plant refer to the pan designated by such letters on Complnnimt’s Ii hibit, No. 5, Drawing Illustrating Defcinlaii Slugging Polls near Pekin. Means (or periodically delivering sultnblo charges ol to tlio rolls at IntorvnlB dotormlnoil by the kinetic openti of the rolls. i; 1. It is stated in the patents that the “roeki; be broken is loaded on skips N which are broiifi on cars’’ to the building in which the giant rf; are (p. 2, lino 57 of No. 072,017). At Sibley ' New Village rock is loaded at the quarry by nica of steam shovels into skips on cars which if brought by means of locomotives to the buildis- in which the giant rolls are (see photographs, [( (1-14 of Complainant’s Exhibit, No. 10, Plioti graphs of New Village Plant contained in ft* Catalogue of the Edison Portland Cement ft C.R., p. 31, Q. 101). At Pekin the rock is handle at the quarry by a 100 ton Marion steam shore The steam shovel loads the rock into skips torn, ing parts of dump ears Z which, ns in the Edisa . plants, are drawn in trains by locomotives frffl the quarry to the giant rolls (C.R., p. GO, QsJ 59; D.R., p. 350, Q. 10). At the Pekin plant Mr. Hnrtigan saw twetf! four or twenty-five six yard dump cars 55 on ft track at the quarry (C.R., p. 67, Q. 53). *» Peterson, superintendent of the Pekin plant, slat* that the six yard dump cars loaded with rock as hauled', in trains of eight cars by an electric loco- motiv’e^to tlio giant rolls (D.B., p. 350, Q. 10), Tke)skips or dump cars Z are expedients for di- yiding'gthc rock into batches suitable for individ¬ ual] charges to the rolls and, together with their correlated parts, such as the tilting mechanism audVtlfe hopper XY, they form, hy reason of their -number and their adaptability for dumping rock, t'means for periodically delivering the charges of rock^to such rolls at sufficiently infrequent inter- yals^tdi permit the rolls to recover sufficient speed iStbfeffect the successive breaking operation” as set Iilaims 1, 2, 3 and 7 of the apparatus patent C.li. p. 177). > be observed that the skips or dump cars ly divide the rock into suitable charges, also retain the rock while the rolls are g their speed after breaking and crushing ing charge and then, when the rolls are to speed, deliver rock to the rolls, thus fimaking an intermittent or periodic feed or de- •\ivery|pf rock to the rolls, by reason of which the :«/rolij^opcrate to break and crush rock by kinetic energ^. As pointed out by Mr. Bentley (O.R., p. ^ P’ xQs. 4S-50), the said means for spertoaw delivery have a distinct relation to the ‘gidnuyoUs and to their mode of operation. While tliekskips or dump cars are not dumped automati- -'caUy^till the dumping of the skips or dump cars is\inlfact determined by the operation of the rolls andjsnot by. the mere whim or judgment of the operator (C.R., p. 509, Q. 7). Unless the operator .dumps 'the rock according to the operation of the f^llsjj^hc rolls will be stalled through failure to ^accumulate periodically sufficient kinetic energy S^feffect the successive breaking operations (C.R., i?SQs-25-29)- 2. In the practical embodiments of his hm. turns at New Village and Sibley, Mr. iZZ thereof 'i'1*0'’0 tllC "°PPei' tt,,d to 0».f tbeiLof, that can be revolved to assist or renite the delivery of the rock discharged from the! or damp cars into the hopper and upon the 2 ((Mi, p. ill, xQ. 204; p. 34, Q m. D^.; .fLd Ln ?•’ WD(* 110)- Att"c«n r,6 c ° i^ P« »v. W at Akron ^o 'h ^?3’,Q‘ 87)‘ Ia the Edison mid rernil’ams m ‘U /C,-d r°n l'evoIves continuous Tho hopper above the rolls. K? <»*«•■ **v giant rolls a i ? li,ge mid Sibley the Edisoi p. 33 Q o' PT dCd With 8,lc" » hopper (Cl S1;:3 ’^101)- The Pekin pits the hooper o "rv" l,0ppor XY ribs J to si,,.,/ , L< IS°" l,In"ts, is provided will them to msisl'n h°" tllU l,0pi'“' l)Iales lul<1 0111111,1 ^ dumped into the"! "MPUCt °f lai'gu pieces of iwt- $ thrown a,, , / l,0ppor n,ld the impact of rod • ; du g the , ° S ?? °f the ll0PPe»- hy the rolli : Q* *l«lV5 ol. ""’k ‘“"►I I ..■’itSi,Penre from I'1. dmnijiE, tlio hopper XY °»°kin Plant, like the hoppers of the Edison 1 (C-R, P- (>03, RDQ. 30; p. 033, Q. 2S), i Provided with a very large opening six feet iii 1 TidtH?nd al,out n'ne feet in length. Therefore, ■ ■ ' roJJs> Hho the Edison rolls, are adapted "dd break and crush immense pieces of ...XOcktiBny ns large as 10, 14 or even 3.7 tons and iO.B., p, 032, Q. 20; p. 593, Q. 4; p. 47, Q. The giant rolls will break and crush any lit can be received in the hopper (C.R., p. ’ ±04-1(55 ; p. 033, Qs. 27-31: p. 003, EDQ. 47, fol. 1940). The mandrels and plates ot the rolls. the patents iii suit two giant rolUj A and Ivo toward each other at tiie' top. Thesti isish of muiUlrels provided with remoiidblo plates a which are secured to the inun- bolts b, uiid by keys 6ii the plates fitting ■ways iii the mandrels (see Fig. 2 of each MBiblcy and New Village and at Pekin, the 10llS °f CUCh plllIlt rcvolve toward each '■'dWaS the top and consist of mandrels provided 'S|Sp1110vul,le wearing plates which are secured '’^^WUndleIs l,y dolts a,ld by and key-ways .igM^Phites and mandrels which fit into each P- 70> Q--T1J p. 72, Qs. 78-79; p. 31, ' In tlie Edisou rolls the key is on tiie plate d“dM‘e ,a‘y-way is in the mandrel, while in the ??i???10,1s tiie key M is on tiie mandrel J and B-way m is in the plates L and l (C.R., p. 79). This is about the extent of any dis- le difference between defendants’ infring- s and the rolls of the patents in suit or son rolls at Sibley, New Village and else- Y-I^^^ke Edison rolls at New Village, sixteen bolts IHHsped for securing each plate to the mandrel ru each giant roll and at Pekin the same number of bolts is used for the some purpose In exactly the same way (C.R., p. 81, Qs. 130-140; p. 38, Qs. 153-151; Complainant’s Exhibits, Nos. 4 and 0, Photographs of New Village and l’ekin rolls). At New Village the bolts securing the plates to the mandrels are secured from rotation after they have been inserted and screwed into proper posi¬ tion by moans of a key fitted into a key-way in the head of the boll, which key is secured by n ratchet in the plate. At Pekin a similar key is employed for the same purpose and in the same way (C.R., p. 72, Qs. 80-81; p. 24, Q. 58; p. 120, xQ. 148; p. 130, Q. 14). In the Edison rolls there are eight plates npon each mandrel (Complainant’s Exhibit, No. 0, Photograph of New Village rolls; C.R., p. 138, Q "0) Q1'-1° Sn"le 58 tMI° °f tl,C Peki" 10118 (C-R'’ In the patents in suit (see Fig. 2 of each pat¬ ent), the mandrels of the two giant rolls are cored out, that is, are provided with pockets. So are the Edison giant rolls at Sibley (C.R., p. G18 xQs. 47-48) and so are the defendants’ Pekii’ r° Si P- 334’ xQ- 333 5 ,lIld see Defendants Exhibit, Blue print of Pekin Rolls, D.R., p. -109) At New Village, however, and in the later gianl ■oil constructions, the mandrels are solid mil ■dug cored out (C.R., p. 003, q 4. p m> xQ , ; -Si 7°?: 1GG-ics; p- 120, rdQs. 178.179 ). 13J, Qs. lb-1 1 ; p. 147, Qs. 43-47). Neverthe- ess, defendants copied, in this respect, the man- rehs of (he giant rolls shown in the drawings of c patents ... suit and the mandrels of the Edi- on giant rolls at Sibley. The Court mill observe, onie, tl7r r°n C°!"in"cs> ,hut th<= defendants . !,,a,U rolls of »‘c patents in at table// in practical!// every detail. 5. The two giant rolls of the pntents in suit e mussive rolls. In giving an illustration of an Sfllcient embodiment of the inventions of the put¬ ts in suit it is said in each patent (p. 1, lines •37 of No. G72,017) ;— “As an illustration of an efficient embodi¬ ment of my invention I will say that the pair of giant rolls which I have built and operated have, including all moving parts, a combined weight of one hundred and sixty-seven thou¬ sand pounds. Each roll is six feet in. di¬ ameter and five feet long, and the gap be¬ tween the rolls is fourteen inches. These rolls are given «. surface speed of about four thousand '■ feet per minute." Allowing 40,000 pounds or 5b tons for the com¬ bined weight of the two roll shafts and of the two giilleys thereon (D.R., p. 283, xQs. 106-108), eacli lit roll of the patents would weigh about 31 is and is, as above stated, G feet in diameter 1 5 feet long. Each of the two giant rolls at tv Village is 5 feet in diameter and 5 feet long 1 weighs about 25 tons (C.R., p. 255, Q', 17; p. ', RDQ. 172), the mandrel being solid. The ison giant rolls at Sibley are G feet in di¬ eter and 5 feet long (O.R., p. G2G, xQ. 100) l weigh about 34 tons each, including the roll iplete and pulley, the mandrel being cored out (C.R., p. (IIS, xQ. 50). Without the shaft and tley each Sibley roll would weigh about 20 s. The defendants’ Pekin rolls are G feet in meter and G feet long and weigh 30 tons each, M'ding to the estimate of Sir. Peterson, the erintendent of the Pekin plant (D.R., p. 3G5, xQ. S7). Mr. Williams estimated the weight of tiie defendants’ rolls to be about 45 tons each R., p. 27, Q. 77) and Mr. Hartigan estimated tlieir weight to be from 40 to 42 tons each fm' ft !0’. Q-.71)> tllL* s,l"fts ami p„nUJ.8 !,„!%■■ L'v '!} ?d’ ev'd0"l,i» tbu iwlimates given I>y JrisL ' “'ul Edison giant rolls «' iw tll0«-‘ «t Little Falls, being o feet l!,,' SSI ^t--r great .eigb, „11(] dimensions, preeisdt' onil-dW ""y °f “ I,0(li’ iu equn!.P m n i ed vH0 ,CL °f 0,0 ir"; “ ami a snrfaee sneed V'^' 0t‘er ut " h,'Jh *M- is given as an ' " !,b0,,t J-000 feet P« »>i..ote ■•oils 0 feet in . Uht,'.allon of 11 Proper speed fur! each. Am, N.ee,l of about 4 000 talT01"’ u HUrfi,W! A 212 revolutions i 1K'1' makes about ; ; Ml). b ,let m,m,tu (CM., p. 550, Qs. » ' patents in sid/iml8? "!'icb ,;lle Sia,l(: rolls of the; ing, by reason of (1C,.,I,nble of developing and stor ! and of IS i°L UU; milss «nd bigb spceiL 1’lic rolls are eanald T*1*1"8 10t:k’ is °"onllo,ls ! ^ "otic «■«* eo v ;,f CX]mm"* “ st0''« * B i be expended by' tll°. k,"o0e J 10".000 pounds and rum f °CO,"otivo> "eighins 1; •■‘lies an boar if J lg at 11 sPe ed of 30 or 35 : ■ I>. 144, Q. 30) l’"1-'11 "’itbin 3 or 4 feet (0.1,.,t ’^Clie Now Village rolls, being 5 feet in diameter i weighing about 25 tons each, revolve, when <(§fc!2|w» at from 215 to 22S revolutions per minute (CM> p. 57(1, xQ. 211). At 220 revolutions per i~Jffljpnto the surface speed of the 5 foot rolls is 8455 « per minute (C.H., p. 570, xQ. 211). The Pekin froUs, being 0 feet in diameter and weighing about |30||>r 35 tons each, or from 40 to 45 tons each if SjjjMphaft and pulley be included, revolve, when pmpty, at from 180 to 100 revolutions per minute ?• 287; D.R., p. 204, Q. 45b; p. 358, xQ. 00). r’°0 revolutions per minute the Pekin rolls have •face speed of about 3300 feet per minute ftEWL, p. 303, xQ. 80), almost exactly the surface ’ of the New Village rolls, ace the Pekin rolls, like the rolls of the pat- Js in suit and the Edison rolls at New Village ■d Sibley, develop and store substantially Ilia e enormous amount of kinetic entry y (C.lt., p. Q. 20), by reason of their grent mass and high ijsgeed, and expend this enormous store of kinetic jergy in the breaking and cracking of rock, which “fed periodically to the rolls. ^ ?he dimensions of the Pekin rolls are substan- S’^lly those of the rolls of the patents in suit and the different Edison installations (O.R., p. 113, 84). Therefore, the defendants have so (Hu¬ rt! the mass of the Pekin rolls as to develop the otic energy required to crack rock (C.lt., p. IS!), 44) and have utilized it for that purpose, in Scordanee with the inventions of the patents in lit. jjjblcarly, therefore, the defendants have taken jVlm very substance of the Edison inventions, for "TtUson was the first to break rock “by the sudden penditurc of energy stored up in a pair of mas- ! rolls rotating at high velocities, the rolls act- i stated, practically as a pair of enormous roliir.v combined Iiiiiiiincrs timl crushers”, the prior art coiitiiiiiiiig not tin; remotest hint of such a mod.5: of opera lion nor of any apparatus capable af*' operating (C.H., p. .17!), fol. 1435; p. 508, fol. W Tf the tlefemlanls hail taken the substance n'nfi changed the form of the Edison inventions, slit they would have infringed according to the wet’ settled law ( Wiinnis v. Dai maul, 15 How., 3305 liemboie-lirmiiuier .1 ////. Co. v. 81 muss, Mg pfj; Il l, llti, t'.t'.A.). Hut the defendants have tnkei- not only the snhslanee hut every detail of the fnrat Larger ami smnllor knobs. o- The removable wearing-plates of the patent in Suit are provided with knobs of uniform bcidi and wilh bin/cr ami fiiyhcr kilobit disposed ini' longitudinal row, by means of which knobs a double operation, of sledging with the larger knobs mijli hen breaking by a rolling action with the smullcif knobs, takes place, thus making the rolls elfecliwv for hrcakmg rock by kinetic energy. The kaols" "f he giant rolls are described in the patents a, $ ;; lim,s 5,-7*,,r ^ «™,«i7..mi +4 of No. i;72,i;H5) • _ \: nlnfoli'0 fn^'<1 "’ilh ''‘-'movable wcaiing-f l1' tl,e /'referral construct!,^ • !„p milled with riiiliullij.projccliiui kiwlis, ftp ", 1,1 "|)on the rolls will If s F .J 'r .T"/1" 011 the appro, id, in?: ores,! , , f »'»*■ Since a large mol; knobs if it , . . sm'fllc.e "light ride on theft; at one !!‘V "LMU.lir ""ifoi'iii hcit/hl, I provide • in 1 . . . (preferably two points) i knobs whieh"!'.'.'',- " r"IC uf l,"'!icr ' and red, V ? «'ieh a large met jv eaiiLd t 1, ' 1 ‘ ,7 sudl 11 siz. 2»i), Qh. 17-21 ; 1 >.!{., p. 3 HU, 7-<> ; p, 4t ,n! 151; p. 2lis, xljs. 183-184; p. 252, Q. 30; Compltf ants Exhibit, So. 5, Drawing of 1'ckin rolls). J stated by .Mr. .Mason, superintendent of the W Villago plain, tin; pliotograpli, Complainant's hi lulm, So. 1, 1'artial Viuw of the Pekin Giant llolli imglit l,o a jihoiograpli of the knobs and plate i tlio Xow Village rolls (C.li., p. jys, Q. H). ! llio novelty ami utility of the hammering knoti if the Edison giant rolls of the patents in siiitlmi •L'oa poinled out (snpiv, pp. 1), 21, 23). Xotouljr ire the knobs in themselves and their liummwln-j? unlll,,|.v !«-•«• in Mil* art, being entirely tliikrl nit from the fragile teeth employed in pruvioni! aaebines to split and separate ooal on the piimip i e of a chisel or pick (C.li., pp. 502-504; p. 4S0, full, -uu)i tint- the ilouble operation till' lodging by ||,e linger knobs and crushing by lit' o nig notion of the smaller knobs, is fumlinm-L illy new. 1; 'I'lie defendants latte appropriated every detail! those siihsluiilinj features of the inventions olr io patents in suit. Claim 3 of the apparatus patent So. (172,(117 sci ' I ns an element -larger and higher knobs ,li s . a a longitialinal row on one of the rolls h * Z > e*c. rl lie apparatus patent was issue d i Hie method patent on April 23, 1001 upon ll"-‘ 0II«'"'il application tiled July If 'a,,. ,,r "'e application, as filed on Jnl; i’l ' ' '' iis f<,H""'s (see Defendants’ Exliiliil I! p'rai') an 2 of Complainant's Exhibitor Roils frustrating Defendants’ rcki.i dust-caps of the VewV'lT t'0ntn,Iii''ille bearings p. 22 J, q 5. , op Vl "ge and Sibley rolls (GUI- RDQs! 248-240)””* u f,”5 ‘l- 3S) Qs' 160*162? P- Pekin p],...,- ' At 10 Village, Sibley find! '« Provided n’t Z ‘ °f tlle tw° rolls! j '•ml dust-cnp and at tt C01ltr",ii!i'«g bearing fv: shown in »L ,, , tllc otll°r end witii n pulley, as U “ of ei,eh °f the patents in suit. - 'j nothod of and apparatus for breaking rock practical through tho ond thrust bearings of 1800, l^UmljeHer sledging knobs of 1807 and tho nccidontal Bpood- ;iVs^S®JP of U>0 roll* In connection therewith and through tho IiS.tkrif0lUu,ca dovlsod by Mr. Edison and copied by do- ■-■'fondnnta. )f|^^he quotation above made from No. G72,G16 promts out that the centralizing bearing not only ^-^mpensates for tho end tlwusts of the rolls, but jc| prevents the grinding of the rolls against thc r thc journal-boxes. It was not until 189G t^Mr. Edison succeeded iu overcoming the de- Jft: mentioned by means of thc centralizing bear- ||C.R., p. 549, Q. 30; p. G53, Q. 17). Mr. Herter scribes the difficulties encountered before the motion of the centralizing or end thrust bearings ^"10, as follows (C.H., p. 549) “Q. 31. What difficulties which had been Rencountered before 189G, were overcome by the ©'adoption of the end thrust bearings? A. The Watcral movement of the mandrel und shaft. ^Without the thrust bearing wo could not keep Wthe belt on the rolls while testing them. Also ^preventing the lateral movement which the K, thrust bearing did, the sides of the mandrel J® would not grind on to the housing, which, when it did, before thc tlirust bearings were *® put on, would grind tho grit into the sides of i'tlie bearings, which would then burn out thc Kbnbbitt, necessitating shutting down the rolls, K dismantling them and fixing up thc bushings * ngain. Q. 32. In your last answer you said that I' the adoption of the end thrust bearings over- 1, came the lateral movement of the mandrel and Ij'shaft. What was it that caused the lateral | movement of the mandrel and shaft? A. Why |: the throwing of rock into the rolls to test it until the early part of 1897 that Mr. jjgeon succeeded in breaking rock by kinetic m U"7'W; Tl,is 1,0 “t that time, by the invent, v 11,111 ;ul,,p(,°" (,f tho "l“88«r plates, the ucdS- speeding up of the rolls, running them at ,'"i0,'s I’01' ,lli'|«ilo) and the numerous other J striietions devise,] and evolved during the o2: mental stage of the invention, including tl.eS truli/.ing hearings of MOO. The Court will obsJ- that all these substantial elements of the ,W" tarns of the patents in suit, which cost Mr. EthW? rl'Ynn v /"ul,mi,li,<,"M of . . . !’• cun f ils 10.i3-l.Mo), have been appropriated by the*- ol, ,1SM ' tl,t!!1' ’"fataging Pekin and Wi lolls, m the precise forum invented by Mr. Efc! ' fokln r°" fc,‘",aB 0t 11,0 I:;illso" '"“'"hies nro employed tj- | 8. The giant rolls at New Village and at SIW?l| n liner ends1'' W,t'' "C° BUanla '""S09 1,1 nppu ends, one on each side of the giant rolls; m,0 f!lle fflmt rulls l*okln (C.H., p. 3-1, Qs. lll-P 1°'" t s L\I ib l Vos. 0 and 7, PI, ok! ? plni mint's Jo nT VI,",8° 11,1,1 Sil"^ ™lv, Co,; , *' 1 »««■ B and li, Drawing Ilk,; • > , , 1Vki" roIls ‘**'<1 Drawing ol;: “ 1 "’ins °f the Pekin rolls, art the lolls 1 TCI> the 8101,0 f,'om out while h i ds ,re breaking rock and „e raised 1 cfore st.,,t,, g the machine so that levers c (see Kxhibil ; ' 1'ihit No liTem? i0I)“mtC<1 by nil'-lloisls (sccEi ' v knobs or holes nr n TJ- 0,,d enSllSe(1 with the; ■oils (OR D1o f1? Pl“tes 10 ilid «" starling (be; 45). ’ P' J' foL aT> P- 101, Q. IT; p. 107, O^. t.ited in the patents that the giant rolls | irejinonnled in a suitable frame C (No. 072,017, p. |y||line 4). The frame C, shown in Fig. 2 of each ifpatent. consists of four housings or pillow blocks, each side, with spacing blocks between. j|Tl7ese: spacing blocks are intended to permit the $1|isttm‘ce between the rolls to be varied (C.R. p. Ww '*• 00'100> P- 148« Qs- 48'5°) nild they are in- piieMed in Figs. 2 and 3 of each patent by the cross ®iines|nt about the middle of the frame C on each ■|sRj.||pf the giant rolls. The two housings making )|up|the frame C on each side of the giant rolls arc, asisliown in Figs. 2 and 3 of each patent, held to¬ by through-bolts secured by double nuts at jjend. In the housings are the journal-boxes for aids of the two roll shafts. Such is the coll¬ ection employed at New Village and Sibley and ' hi by the defendants at Pekin (C.R., p. 37, Qs. .44; p. 75, Qs. 03-101; Complainant’s Exhibits, Bo and 7, Photographs of New Village and Sib- _ Soils; Complainant's Exhibit, No. 5, Drawing illustrating Defendants’ Pekin Rolls). ,!^j&New Village the housings B rest upon girders jThc girders are provided with grooves F and 'housings are provided with tongues moving in ffijffiamroovea of the girders, and these features have ggbeenj copied by defendants in the Pekin plant Imffipplaiiinnt’s Exhibit, No. 5, Drawing of Pekin J|Rolls; C.R., p. 37, Qs. 145-147). Thus the housings gaan|be moved upon the girders to regulate the dis- ;>tance between the rolls, in conjunction with the ^pacing blocks P and through-bolts G (C.R. p. 75, *J$f)7-100). The method of adjustment at Pekin isis’exaetly that employed at New Village and Sibley ijyandus that indicated in the drawings of the patents lllnpmit |3SS&:. New Village the girders rest upon stone mu- (sonry and at Pekin the girders A rest on a founda- |tjpn|D of concrete (C.R., p. 38, Q. 149; p. 70, Qs. ®°°)- aiT|f>°kh?umlIrDouB|r'VOr °£ ll‘° Edl8°n Im,cnIa ,9 ' 10. In tlu? original application tiled Juir f : !b! I'- 11 "!,ii sai(1 tlmt the object of the iovemh , .U ° ln,,,luc(i 11 «uil apparatus for ft hi caking of rock, which,” inter alia, ‘‘will hm*iic the eunau nipt ion of a small amount of power” 16 fide, a mwlhe wUsHUp0toesi ■ peed when no work is being donsVst tfi <0 sturt tk^ |t was akso said (file-wrapper, D.It,, p. 515) Ik in starling liand-lerers arc employed.” fi cad !,! f°'T!"8 Statou,e,,ts of th0 original nppi ’ " :U' bo,,lB » «lK J oll expended fi le, 000 "foot nof i'1"'" tl,C 1’eBHl"r ^ito^dfenCnSri?,0? kin°!iC e"- ‘O, revolutions per minute (C.11’ S'f “ d,‘0p °f It way be observed here flint n 1 , the slugger roll exceeded tlmt o! the ^ ^ *peod °f 13 revolutions and that »n\ IC rc‘«>n,a1, roll by ••"ffljor roll was t f ‘ '"'f «« -P«d of tlie regular roil; bufiiir oo St 11 ^ ’"glior than that H.o d»ft tha BiSi 'Sf t \ 1 U1 “ tliat of the regular roll, bein"^ *°U W,s I,ei 14 o. * ut,n» I®® coinjiared n* i II ns trst tioi.” of’Timr^th oVIji ^"'S ",ei'G,.V «* < Village iiiirt (1 1 u l i ' 1 1 J,s { inB Pekin and jjetriot rolls m H»wi«li the ucciun „ ,- , ?B1'flte to !>™ik roc "f kinetic energy. As i, Invent S"(Men exPonclitm GXPcnded\- tie tl S' 0,0 ki"eUc «' mons, while the noirrr , A “ge rolIs is enoi - ron/.:::;,"''"0^/0 ,/w- ’ey operate to break rock hZffT" ro,,s lU 81,1 so we way asshmtM.i it ^ kinetic energy in tla to» (0.1?., pp. 008-020 f 10 «fip”*sifion of3ri*- Know!. ™,ls of Urn United .States Ornsi° Edison Stoat P- 302, Qs. 1G5-3SS) ' St°"e °°mP"«V The rolls of the United States Crushed Stone Company accumulate, and expend enormous amounts of kinetic energy in breaking rock. As kinetic energy is expended, the speed of the rolls Cn\ i'!T -L,k® the llefon(1,,nt’s (Allis-Chalmers Co.) infringing Detroit rolls, they are driven by "o electric motors of small power, the slugger roll icing driven by a 250 horse power electric motor the regular roll being driven by a 200 horse power electric motor (C.K., p. 302, Q. lor). The Detroit u (Alltaf !,n,mo» Company) infringing Uctioit rolls are driven by two 200 horse power electric motors (C.l?., pp. 374,375) The defendants’ Pekin rolls are driven by a *50 sn’ n PiTr eICCtl'iC m°t01' (GI,>’ P- 113> Q- 70; p. * ;30;..DJi;’ P- 21i> <*■ 31). AS pointed out . Mi. Dentley (supra, pp. 12, 24) and ns indicated "r- M,l“" (*»/»'«. PP- 79-80) only a small driv¬ ing power is required in the operation of the giant ’oils which crack rock by kinetic energy, because ie " ork „ „ot done by the direct application of the driving power but through the accumulation iml sudden expenditure of kinetic energy. Mr Mason has shown that the kinetic energy (level- P«< in the New Village and Pekin rolls is sub- nhmtinlly the same (C.l?., p. 250 Q. 29; p. 302, RDQ. .T'‘°v moll °'1 of tho Patents of brooking rock by kinetic gy is employed by defendants at Pekin and Detroit. That the Pekin rolls t, like the Edison rolls of m patents in suit at New Village, Sibley and elsewhere, operate to break rook by kindle cneryy ” l0t »or eon it he. The expenditure I / ■indie energy in the breaking of rock is shown l ]fi 79 Sof"C/,'°" 'V>ni!,! °f thC ’'0lh {mpr"’ PP' „ defendants’ Exhibit, Curve D (offered, D.I?., p, -<0) plotted from Defendants’ Exhibit, Record C, which is ii chronograph record of the operation of i defendants’ Pekin rolls while breaking and crush- j ii'S m* (D.K., p. 231, Q. 30), shows a total drop | i» speed of the l’ekin rolls of aliont. 30 revolutions J per minute, from 1831/2 to 1531/3, due to llio i expenditure of a very large amount of kinetic j energy in the breaking and crushing of rock (D.H., p. 31.7, xQ. 221; p. 328, xQs. 2.15-210). Mr. Peterson, the superintendent of defendants’ Pekin plant, pointed out (D.R., p. 300, xQ. 71; I supra, p. 27) that the motor lias been unable to | pick up the load of the roils and set them in ino- f t ion u'un "lion tile rolls linve been partly started 1 witli the levers and air hoists. Mr. Van Xandt, 1 1 s its e n cei f the Allis-CImlmers Company, I wlio testified on behalf of defendants, pointed out f (D.lt., pp. 200-203) that defendants’ record M, which shows the kilowatt input to the motor driv- | "IS the rolls, discloses the fact tlmt, the /tower is I applied lo the rolls, after starling them from a S state of rest, for a- very Ion, g lime before the rolls | are brought up to the required speed, 'i'll 8 sliows that before attempting to break and ernsn i rock h, means of (lie Pekin rolls, the defendants develop and accumulate therein an enormous ""I"""4 °.f kiuctk energy, hringing the rolls, which weigh, with their shafts and pulleys, from 10 to •to tons each, up to a speed of from ISO to 300 thTions ,,S m m,m° l,0f0r° rock upon Mr. Van Ziindt, speaking of (he Pekin rolls, far- Pier says ( D.lt., p, 2(57) ;_ ,"L "i mt f retardation and of accelern- Hon uould he considerahly less if the motor durin.^hollf d col.lsiek may have been, during the tests of the Watt meter Record X, because the motor not only sup- p. 414, xQs. 93-03). This is wlmt frequently happens at the Edison rolls of the United States Crushed Stone Company. In stopping the rolls of the United States Crushed Stone Company, which are of the same diameter, 0 feet, hut one foot longer, 7 feet, than the I’ekin rolls, in order to utilize the enormous amount of kinetic energy stored in them, the power is thrown oil’ and three skip loads of rock, each skip containing ton tons, are dumped upon the rolls without any power from the motors and the rolls will break the 30 tons of rock and then it will take from three to four minutes before they will come to a stop (C.B., p. 59C, Q. 11 ; p. 304, fol. 911; p. 490, fol. 14SS ; p. 008, UDQ. 59). Nevertheless, tiie power delivered to those rolls by the motors is not only insullicient to break the rock by the direct application of the power, but is also insullicient to start the rolls from a state of rest; and, there¬ fore, it is necessary, during the continued opera¬ tion of the rolls, constantly to apply the driving power to keep the rolls in motion and to restore at intervals the kinetic energy periodically ex¬ pended m breaking and crushing the successive charges of rock (C.R., p. 598, XQ. 22-24). Such being the operation of all giant rolls in the breaking and crushing of rock by Edison’s ki¬ netic method, it is clear from the evidence above referred to that the defendants’ infringing Pekin and Detroit rolls operate in precisely' the same manner. Hr. Peterson, the superintendent of the Pekin plant, stated the entire proposition, saying that lie had noticed that the giant rolls ut Pekin slow down very perceptibly, when breaking rock, but that they “ always gained their speed after the stone has gone through” (D.I?., p. 359, xQ. (14). Mr. Herter, who witnessed the operation of the Into of rest. These nir hoists nre shown in Com- Ininnnt’s Exhibit, No. XI, Drawing of Pekin plant bowing Air Hoists, and are described by Mr. lortcr, who saw them in operation and made the rawing ( C.li., p. 101, Qs. 17-20). They consist f cables C'1 wound around the giant rolls and fast- ned by hooks D* in sockets K* in the plates of the nils, the cables being attached to piston-rods B1 of ir cylinders A2. By operating the nir cylinders lie cables are caused to poll upon the rolls and tart them from a state of rest in conjunction with lie motor, lint; the motor cannot pick np the load of lie rolls unless the motor and the nir hoists start t the same time (D.K., p. 802, xQ. 74). At times lie motor, the levers and the air hoists nre all cm- loyod together to start the Pekin rolls, eleven icn hearing their weight on I he free ends of the ■vers (C.B., p. 107, Qs. 43-45; p. 01), Q. 08). At few Village three or four men bear their weight n the free end of each lever and then the signal i given to turn on the power and by these menus lie rolls are gradually put in motion (C.R., p. 39, |. 150). As stated above, there is no detail of the hlison inventions of the patents in suit, nor of 'Mr. Edison’s embodiments of those inventions, •Inch the defendants have not appropriated, i At Detroit cables are employed as auxiliary means for starting the massive rolls from a state of rest (C.R., p. 374, Q. 4). :e to Complainant’s. Exhibit, No. 4, ■wing a Partial View of the Pekin o eye-bolts, one on each side of the own, affixed to the lower parts of These eye-bolts are employed for sings and even these were copied irom the Ellison rolls nt Now Village (C.H n g» Qs. 3 41-1-1(1 ) . 13. Benenlh the giant rolls at Now Village!! a hopper (» roooivu the rook Unit Inis liuun broken anil mislioil by the giant rolls, and as Ibo defend- ants oopioil ibo lioppor of tbu patents in salt of Ike Now Village plant above tbo rolls, so tliey Inn copied tbo lioppor of tbo Now Village plant below tbo rolls (C.U., p. 125, xQ. 151). roTlH°or Um'i°ir 'n",,1n,,,'nr,>,',s for driving tlio gin, (172,017; p. 2, line 49 of No. 072, GIG), and ns shown in Fig. 3 of oncli patent : — “The driving-belt I extends from the driv¬ ing-shaft to the rolls and at the rolls passes over an idler J, located centrally above tbo two pulleys F, From Ibis idler the belt I passes over one of the pulleys and then in tbo opposite direction over the other pulley and returns to tbu driving-shaft.” Tbo power applied through the belt tends to drive the rolls in opposite directions, ns indicated >y tbo arrows shown in’ Fig. 3. In these respects the Pekin rolls are like those of the patents. (Complainant's Exhibit, No. 5, drawing illustrat¬ ing Pekin rolls). Tlio slipping power connections nre intended merely to ■orailt a reduction in tho speed of the rolls. Three classes >J equivalent means for this purpose nre mentioned in tho Jl P entS,,n S,llt (Seo Fi88' 2 and 3 of each patent) each roll-sbaft is provided at one en with a large pulley F. Each pulley F has diameter ns large as the diameter of the g,a, mil, 0 feet. The face of each pulley F slHitl exceeds two-fifths of the face of the giant roll, nun (SP °f/"Cl1 Paten,)' Jll< f,CL <>f tin id.™ i , $i approximately twenty-fivi •oil r f. t' r' At tlU 8111,10 ,,ntlo> for a ginnl ol^l (.feet m diameter and 0 feet long, the driving alley 1 would be approximately t; fect in lianieter and^inehe aide, the d,„,ct , , i •c PI I® n“PU"e'VS 011 11,0 1,011 «>' >tls at the t o o";. (D- ” 3fi3> *Q- 77; p. 213, Q. 30; • Q- 20, p. 3ol, Q. 15; c, K) p 24) Q 52) i the patents (p. 2, line 34 Mr. Bentley lias described (supra, p. 11) the "riclion-clutches consisting of tbo pulleys mounted oosely on the rolls-sbafts, tbo band-wheels and ’riction bands specifically claimed in claims 5 and I of the apparatus patent. It is not necessary further to consider these specific devices of claims 5 and 0 because, ns al- oudy shown (supra, pp. 39, 41), the “slipping i power connections” of the broader claims 4 and 7 mf the apparatus patent are not limited thereto. As stated in the specification of the method patent and as heretofore pointed out (supra, pp. 40-41), the specific slipping friction-clutches set forth in the narrower claims, 5 and 0. are intended merely to permit a reduction in speed of the rolls while breaking and crushing rock. The slipping fric¬ tion-clutches are, as stated by the patentee, merely a preferred form of slipping power connection and in the passage referred to, it is said by the patentee that the same result can be accomplished riHfvi: any suitable device for disconnecting lliu mils fmm the driving shaft just before the rod; is dumped upon I lie mils mid re-con necthi* Llieni with Hie. driving shaft immediately after the melt is broken or” SECOND: “even by iiiiiiiitnining tlie eomieclion with Hie driving engine of smell power und allow¬ ing its speed to lie reduced with Hint of the rolls”; and, Tlllltl): “slipping power connections”, as s ated in claims 4 and 7 of the apparatus patent, ot which the slipping frictlons-clutclics are an example. Sli A" «H»l only re li/.ed Hat stated, that it was not essential to employ niiv partici"ar form of device to permit a reduction ill t a. speed of the rolls while breaking «„d crushing 11 ""s, lie said, that the same le iT *, 111 dillerent wavs, lienee the broad expression, “slipping power con- lections”, employed in claims 4 and 7, an expros- broad enough, in view of the invention and la- specific statements of the specification to cove; f '’tlrnmn ‘'“'i MVil’, I,el'"li,; " |,L‘d notion in spec, mils while breaking and crus . . rock ouu.r:,tice:p:7ci',1tiie pok,n ro"8 * °r «■«>> - ^sforpernmun.a^r.rr nicnt,onod *n tlio pat- eaklng and crushing rock U,° 8,>0cd of tho ro,Is whl,e o'frirL !'nf ''7" Sh°Wn P. 45) tll.lt 1ft T of", r 1 ,mku " el"I,lo^a 011 tl‘0 line , elnm f i,lf,'inKl||K I’ekin rolls is r.,,7'!1, !!'0 l,rH a«" °f equivalent devices (b) .1 he proofs show Hint the defendants em- vy a driving engine or motor of small power to ive the Pekin rolls (supra-, pp. 27, 78) and that iy permit llic speed of the motor to he redueed th that of the rolls, maintaining its connection trewilli, while the rolls are breaking and crush- ; rock (D.It. pp. 240-247, Q. 30; infra, pp. 101- i). Therefore, tho (lefcndiints use an equivalent the second class set forth by Mr. Edison. («) Furthermore, as already pointed out (supra, ■ 4040), the defendants employ the sHpplug i i-cr connections of claims 4 and 7 [1) because the driving belt U of the Pekin is slips upon the pulley u on the line shaft T, -mitting u reduction in the speed of the rolls '.If., p. 300, xQ. 00; C.R., p. 200, Qs. 140-157; 305, HDQ. 381), thus forming a slipping power inection within the menuiug of Hie patents; I [2) because tho said licit U slips upon the pul- s U.j and U,, on the roll shafts, as hereinafter wn (infra, pp. 100-100) ; and [3) been use the belt from the motor pulley 8 the pulley t on the line shaft T 'slips' upon one both of the said pulleys mul permits a rcduc- iu ill s]ieed of Hie rolls while breaking and sliing rock (D. If., pp. 240-247 Q. 30; C.R., p. !, Qs. 153-157; p. 350, xQ. 343). Therefore, the endants employ the slipping power connections (lie third class of equivalents set forth by Mr. e method and nnnaratus for driving the g 93 motor, which was belted to a pulley m on the line shaft.” Mr. Van Zaiult gives the following general de- Tiption (D.li., p. 232, Qs. 20-27) “Q2(l. Please give a brief description of the crushing apparatus or machine which you saw there? • A. I saw installed at this plant a set of crushing rolls consisting of two rollers, each approximately six feet in diameter by six leet face, each mounted upon a shaft which is provided with two hearings one at each end, and a pulley upon the one end. The pulleys upon the two shafts are both upon the same side of the roll. The rolls ore driven by means of a belt (U) leading from a pulley (u) upon the countershaft (T) over a belt-tightener pul¬ ley (V) to the roll pulley (U2) furthest away from the line shaft, coming in contact with this pulley on the lower side, passing partly around this pulley, then under and partly around the other pulley (U„), then up and over an idler pulley ( U, ) , and back to the countershaft (T), in such a way that the same licit drives both rolls in the proper direc¬ tion, that is, towards each other from the top. Each pulley is rigidly keyed to its roll shaft. Q. 27. How is the countershaft (T) driven? A. The countershaft (T) is driven by means of a belt delivering power to a-pulley (?) keyed upon the countershaft from an in¬ duction motor. A comparison of Pig. 3 of each of the patents 'in suit with Complainant’s Exhibits, No. 5, Drawing Illustrating Defendants’ Pekin Rolls, in connection with the above quoted descriptions thereof by Messrs. Newhouse and Van Zandt, will show that the drive of the defendants’ Pekin rolls is precisely that of the rolls of the patents in suit. Starting from the driving shaft and following the driving belt in the. direction of its motion, in each case the driving belt passes from tbe pulley on tin! driving sliart to t lie pulley on tlie roll sliatt S farthest away from llio driving shaft ; then under, ’ hack of, nnd over Hint pulley to the pulley on the 1 roll ninth nearer to the driving shaft; then under mul around that pulley to the idler pulley; then around and over the idler pulley and back to the pulley on the driving shaft. The comparison further shows that the arc o! contact, between the driving belt U and the roll pulley U, farther away from the driving shaft in the Pekin plant is precisely the arc of contact lie tween the driving licit 1 and the roll pulley If fur (her away from the driving shaft of Fig. 3 of each Pal cut m suit; and that the arc of contact of Hie driving licit U with the second roll pulley U, ol •lie Pekin plant is precisely the same as the arco contact of the driving belt. I with the second roll pulley F of Fig. 3 of each patent in suit, except Hint in the patents in suit the Idler pulley .1 i shown located cent rally above the two roll puller F, while in the Pekin plant the idler pulley U,'i located just to the left and nliove the two roll pn leys, thus extending the arc of contact in the m of the second roll pulley of (he patents in suit. Since in the operation of the giant rolls of Hi patenls in suit at New Village and at Sibley it no found tiial the slip which always look place Iv • ween (he driving hell nnd the roll pulleys uni elsewhere was sulTieient without the additional sll| occurring between I lie roll shafts and the roll mil leys nl the friction-clutches, the roll pulleys were, as already shown (supra, pp. -Kl-J*)) made fast lo the roll shafts and in this respect, as in all oilier respects, the defendants have copied Mr. Eilisim's embodiments of the inventions of the patents in mit._ As pointed out by Mr. Bentley, (supra, pp. 15-17), " bother (he slip takes place between the ill pulleys and the roll shafts, or at both places, ■ between the driving belt anil the pulley on the •ivlng slmft, or between the holt from the motor illey and the motor pulley or the pulley on the ■•ivlng shaft to which the belt from the motor illey runs, is a matter relating merely to llio lint of locution of the slip for the purpose of per¬ illing a reduction in speed of the rolls while •caking nnd crushing rock. It was stated above (supra, p. 88) that the etlioil of and apparatus for driving the giant Us of the Pekin plant are precisely those of the dison giant rolls of the patents in suit at Sibley nl substantially those of the Ellison giant rolls of e patents in suit at New Village. At Sibley a steam engine drives the countershaft • means of a belt (O.B., p. 013, Q. 31). The belt, course, passes from nnd around the engine pul¬ s’ to and around a pulley on the countershaft. Ktt Pekin, in like manner, the motor drives the untersliaft by means of a bolt, the belt passing om and around the motor pulley S to and around lie pulley t on the countershaft T. At Sibley the countershaft drives the rolls by cans of a licit (C.R., p. 013, Q. 31), which passes om the pulley on the countershaft to the two roll galleys and an idler pulley (C.It., p. 014, Q. 32), st as at Pekin, the idler pulley at Sibley, bow¬ er, being on the side of the roll pulleys away mil the countershaft, while the idler pulley at .'kin is on the side of the roll pulleys nearer to e countershaft (C.R., p. OH, Q. 33). At Sibley the roll pulleys are fixed rigidly to e roll shafts (C.R., p. Oil, Qs. 15-19), just as Pekin. At Sibley an adjustable belt tightener provided for regulating the tension of the belt licli passes around the pulleys on the roll shafts the Pekin rolls nre identical with the construction mid method of operation of the Edison giant rolls at New Village (CU?., p. 114, Q. SC). Mr. Mason, superintendent of the New Village plant, whose knowledge of the practical construc¬ tion and operation of the Edison giant rolls is probably unequalled, has shown the absolute hlen- tit!/ of construction and operation of the Pekin rolls with the Edison giant rolls of the patents in [suit in his three depositions (C.H., pp. 13C, 223 and ■12), and 1ms stated his conclusions as follows (CM?., p. 150, Q. 54; p. 257, Q. 33) “Q. 54. Referring now to the Pekin plant shown in the drawings to which I have called your attention, can yon statu whether or not the giant rolls in that plant operate in the breaking and crushing of rock in the manner in which the Edison giant rolls of the Now Village plant operate? A. From thu evidence which I have heard in regard to thu construction and operation of thu Pekin plant, and also from the drawings which are in evidence, I would say that the j rolls at Pekin must nccessarilg operate like those at the New Village plant, which I have described above.” “Q. 33. In view of your experience in the operation of such rolls and of the similarity existing between the Pekin and New Village rolls, namely, that they are, ns you stated, to all intents and purposes the same, do you know or can you conceive of any reason why the Pekin rolls should operate in n manner dif¬ ferent in any way from the manner in which tlie New Village rolls operate? A. No, I can¬ not conceive of ang reason [or a difference in the operation of these tiro sets of rolls and I do not believe that there is ang difference. Q. 34. Von heard the testimony of defend¬ ants’ witnesses, Van Znndt and Newhouso, in this case, did you not? A. I did. Q. 35. And does their testimony in any way ii iioct .your opinion tlmt there is no difference in the operation of (lie Pekin mid New Yillnee rolls? A. No.” Mr. Knowlton, n consulting engineer and general * 1 f tl I 1 s i Us t S lie) f which I lie Pekin rolls are an exact copy, as shown, tes- tides that the Pekin rolls cannot he operated to break and crush rock, delivered to the rolls ns de¬ scribed hy defendant's witnesses, without a slip taking place between the driving holt and the pul¬ leys fast on the roll slmrts, due to difference in re¬ tardation of the speeds of the two rolls (C.K., p. ,114> Q- 3r')- So do Profs. Martin and Pryor, me¬ chanical engineers of Stevens Institute of Tech- "0,0«y (C.n., p. 4S8, Q. 1(1; p. -151, Q. 0). The construction of the defendants’ Pekin rolls being, as shown, identical with the construction of the rolls of the patents in suit and of the Edison rolls at Sibley and Now Village, there can in reason he no difference in the operation of the several set of rolls. The passage above quoted {supra, p. 02) from he testimony of (he defendants- witness, Mr. New- •mployed ^ "'e rn,,s lllmi! “a belt tightener V to prerent the hell ti!\ the Pekin rolls the belt tightener has no such 'iirthennoro, the construction of the Pekin rolls den Ileal with the construction of the Edison at rolls of the patents in suit at Sibley, and the imony of Mr. Knowlton, superintendent of the ley plant, shows that the belt-tightener does not rent the belt from slipping on the pulleys nited on the roll shafts (C.E., p. 019, xQs. 5S- p. 012, Qs. 21-29). n the passage quoted, Mr. Newhmise concedes t without the belt-tightener the holt would slide llie driving pulley mounted on the line shaft and the driven pulleys mounted on the roll shafts, irefore, coneodcdly the defendants have con- icted at Pekin an apparatus which is exactly the meatus of the patents in suit and which is cn- le of operating, and in fnct does operate, exactly the apparatus of the patents in suit operate, ether or not the defendants ’employ the licit:- i teller is entirely immaterial, because either with >r without it they have the apparatus of the silt in suit. The entire defense, upon the ques- i of infringement, resls upon the preposterous position flint the employment of the belt- i tener in the Pekin rolls, a device copied from Edison rolls at Sibley, avoids the charge of in- senient. notwithstanding the fact that the Pekin neck'd massive rolls” mid, therefore, infringe claims 1 and 2 of the method patent and clnlmi 1, 2 and d of the apparatus patent. The Detroit rolls, built by the defendants, the Allis-Olmlmon Company, for the Dunlmr Stonu Company, In- fringe the same claims of the two patents for the It remains to consider claims 4 and 7 of the apparatus patent and defendants’ infringement thereof. It has already been shown (su/ini, |i]i. .40-44 ) that the “slipping power connections” ol claims 4 and 7 are not limited to the specific friction clutches set forth in the narrower claims, H and (1, and the authorities upon this point lane been cited (mipra, pp. 44-44). Therefore, claims! 4 and 7 are infringed by the Pekin and Detroit rolls. i.iShl'iH!"?4 ‘I1. th“ evidence priivliig tlmt dcronit. ants employ the slipping . . or tin Eiltson patents. Infringement by defendants already sn/Iicicnllf appears. Nevertheless, inasmuch as the debar of '''"'-infringement will he urged without suppu, m the evidence, it is necessary to state the ovidcnci Deleinhinls eon tend that the J’ekin rolls are no independently-driven and disconnected massiv rolls” and that, therefore, they do not liifrliifi- , ehmns | and 2 of the method of patent and claims 1, i - and d or the apparatus patent. This contention ■s ""tenable ns heretofore shown (»»,„■„, J)p. 30- "0t 1,0 rnl't,K!1, considered. Infringe ment of those claims by the Pekin and Detroit rolls is established beyond dispute Defendants further contend tlmt the Pekin rolls me no, provided with slipping power connections 102 through the rolls approximately in proportion to the amount irhich the rolls slow ilonn,” And “This record (Record I) does, however, establish the fact that the motor does slow , down very closely in proportion to the slowin'); / down of the rolls when rock is going througli the same * * Thus, defendants’ chief witness on the operation 1 of the l’ekin rolls, Sir. Van Zandt, nlmost in the | very words of the patents in suit, admits that the | defendants employ in the Pekin rolls an equivalent 1 mentioned liy Mr. Rdison in the patents in suit for | Lhu slipping power connections of claims -1 and i of the apparatus patent. Infringement of those claims is, therefore, clear, 1 since in the Pekin rolls, which nru 1 (") an “apparatus for breaking rock by kinetic I energy”, there is B (b) “the combination of the two independent | (he. not connected by gears, supra, p. 33) inns- f sivo rolls having roughened or irregular surfaces" | (as stated in claim 4), or “the combination will ft independent massive rolls having roughened or lr- 1 regular surfaces” (as staled in claim 7), and ® (c) the equivalent of “slipping power comic* 1 lions” (as staled cl i s l i d 7), and ® (d) “means for periodically delivering rock to 1 Hie rolls” (as stated in claim 7), substantially n 8 set forth. But not only does Mr. Van Zandt show that de¬ fendants employ in the Pekin rolls an equivalent mentioned in the patents in suit of the slipping r connections mentioned in claims 4- and 7, |lml lie states that in the Pekin rolls the defend- ;s employ the slipping power connections them- |si7cc«. Referring to defendants’ same chonogrnph ord (Record I), Mr. Van Zandt, interpreting e record, states that the record shows (D.R., pp. , Q- 30) “a slight sliding of the hell on the motor ■pulley occasionally noticed when rock is going through the rolls by the belt squeaking on this pulley.” I This sliding of the belt on the motor pulley Mr. Zandt distinguishes from so-called “belt p”, saying that the record shows the sliding E>f the belt in addition to the so-called belt creep KD.lt., p. 24(1, last line). "| The sliding of the belt on the motor pulley, niimvii by the licit squeaking on this pulley is, as Rtated by Mr. Van Zandt, due to the fact that the- giassive rolls and the motor pulley do not at all s of time slow down together (D.R., p. 240). o Is a slipring of a I Mr. Mason, interpreting the same Record I, Scat-lies the conclusion that the said record shows Khut in the operation of the Pekin rolls, while Trunking and crushing rock, there is a slipping of of the belts on a pulley between the motor I ml the north roll, showing that defendants em- loy the slipping power connections of the patents n suit to permit a reduction in the speed of the tills. Mr. Mason said (C.R., p. 208) “Q. 153. Defendants’ witness, Van Zandt, in answer to Q. 30, when speaking of de¬ fendants’ exhibit, Record I, compared the motor revolutions with the north roll revolu- lions. Will you read upon the record tit ligtires {riven hy Mr. Vail Zmidt for Hie motor revolutions and the roll revolutions and, ii i separate column, kindly give the fiijum ih 'lot in// the ratios c.i-istiiiij between the m/ici fire motor resolutions unit the north roll ra 'ihitioiisf A. They are as follows: to. Motor revolutions. North roll revolutions. Rats ii 52 3/4 17 1/2 3.01 (i 54 18 1/2 2.91 7 54 1/2 IS 1/2 2.91 8 54 1/2 IS 1/2 2.9) Q. 154. It appears front the table stated in your last answer that in such instances! periods Nos. 4 and 5, the ratio of the inoli resolutions to the roll revolutions has co siderably increased over what it was in tl preceding periods Nos. 1 to 3 and is consult nhly greater than what, it is in the succeedli periods, ■ Nos. 0 to 8. Wluit inference doyttii draw front this change and any other cluing | that you nitty observe in the table in the mil* § of the motor revolutions to the roll molt- 8 lions, that is, inference with respect to tin bells? A. I would infer that: one of the belli was slippiny on the /inllej/s. Q. 155. Js not that a necessary inference , A. il >s unless the dutch pulley was slip Ping on the line shaft. (}. loti. Mr. Van Ziindt says nothing iilinn the dutch pulley being in a position to sli| upon the line shaft and he apparently m stinted that there was no s-ucli slipping “I lie dutch pulley. Assuming, therefore Ihat there was no slipping of the child pulley on the line shaft, I understand froir r?!1.', i 'S ,MIS"L‘1 tliu change m ratio re terrotl to necessarily reunites the inference ol a slip of tt belt upon a pulley? A. Yes, I can your answer to Q. 153, it appears that the motor revolutions dropped from 54 to 51 1/2, being n drop of 2.5 revolutions or J/.li per cent and Hint the north roll reroliitions dropped from IS 1/4 to 17, being a drop of (i.i) pa¬ rent, from tlie third to the fourth period. Wluit does this indicate? A. This indicates that one of the belts between the motor and the north roll is slipphuj on a pulley." Tito roll pulleys at Pekin havo cast Iron surfaces. Hence t bolt is more apt to slip thereon than on the woodon sur- accs of tho roll pulleys at New Vlllngo. This is explained by Mr. -Mason (GUI., p. 304, dDQs. 377-381; p. 324, xQs. 250-251). At New rillnge and at Pekin canvas belts have been used C.lt., p. 234, fol. 700; p. 280, Q. 80). Mr. Hcrtcr buw the belt slipping on the roll pulleys of tho okln rolls. The capacity to slip of the driving belt U of the ’ckin plant, which pusses around the driving pul¬ ley ii on the line shaft T and around the pulleys CJ.j mill Ua on the roll slmfts, is shown by the bstimony of complainant's witness, Mr. Hcrtcr, gml of defendants’ witness, Mr. Peterson, i Mr. Hcrtcr witnessed the operation of the Pekin alls. WhCni lie arrived at the plant they were etling ready to start the rolls up for tho nfter- ooti’s run (C.lt., p. 10.1, Q. 17). The first ef- :>rts to start the rolls hy means of levers, air oists mid the motor were unsuccessful (C.lt., p. 07, Qs. 43-45), because rock was wedged in the oils (C.lt., p. 107, Q. 40). Mr. Herter described be slipping of the driving belt U upon the pulleys n the roll shafts on this occasion ns follows C.lt., p. 105, fol. 313) ; — Mr. Peterson, the superintendent of the Pekii csxed the operation of tin* Pekin rolls, while utilise Melt jiif <1 i rl not see the holt slip, snlil I ).](., i). Kill, xQ. 72);— Moreover, Mr. Peterson states that, mulur such conditions, ho .has observed the 'driving licit U ol the Pekin plant slipping on the line shaft pulley 11, Mir. Peterson .says (Jtf.lt., p. 3(10, xQ. Oil).;— “The pulley on -the line shaft would some- limes revolve and the holt would slip on Hit line shaft pulley under these uonditioms.” He also sa.vs (D.R., p. 352, Q. 20);— “Sometimes the licit which drives the volt would slip on •the line shaft pulley; other times the holt from the motor to the line-shut! would slip, and again .the circuit hroiikw would lly out.” Tlie foregoing instances of the slipping of tin licit, upon the pulleys on "the roll shafts and lip™ tlie .pulley on the line shaft or the Pekin plant, testified to by Mr. Herter and Mr. Peterson, were insln-ncos where the sliding was perceptible to the eye. Sometimes, when the rolls are running at high speed and lire -breaking rock, the slipping ol the belt upon the roll pulleys, ir considerable, may he -perceptible to the eye or one experienced "imrntimi of such ridls (C.lt., p. (112, (Js. P- 30,i> Qs. 174-175; p. Jl(), Q. (;b; p. 53, x(). JoU) ; hat ordinarily tlie slipping of the hell on the roll pulleys is not perceptible to tlie eye, especially to the eye of a person not experienced m the operation of such rolls (D.R., p. 3(U, xQs. In Oomplni mint’s Exhibit, 2fo. ,51, sketch of Pe¬ kin rolls witli a -large rock resting against tlie hop- permnd n slugger platc.of ,the north roll, Mr. Mason lias illustrated iliow one roll .will ibe stopped and the other continue to revolve. This .condition lias oc¬ curred at Is’ew Village -and at .tlie plant of tlie ‘Kelly Island Tit-me und Transport Co. as testified to ihy Messrs. Mason and IJarsh (>CJR., p. 310, Q. 19.7; L. 308, RDQ. 393.; p. 032, Qs. 21-.22.). Mr. Van limit admits that if such a condition icnn .occur lippnge of tlie licit upon tlie roll pulleys would ecessurily iresult (D.R., p. .321, xQs. 230-237;) . It -or) neatly happens that, for ;sonie roason, one of lie roils will ho revolving while the other stands till, us in attempting ito start the roils, and tlie elt must and will slip on tlie roll pulleys ( C.lt., . 14-1, Qs. 31-32 ; p. 140, Q. 30; p. 282, Q. 28; p. (13, RDQ. 375). The capacity of the Pekin belt i slip is, -therefore, obvious. It limy lie observed here that defendants pro- need as a witness no one having any experience :i tlie operation of giant rolls, such as those of lie Pekin plant, except Mr. Peterson, whose ex- eriencc had been very limited. Mr. Peterson, re¬ in-ring to the slip of tlie belt on tlie roll pulleys, nid (D. R. p. 304, Q. 81) ;— “I have never attempted to watch tlie slip¬ page.” Hence his testimony is of no value. Mr. Van Zimdt knew nothing about giant rolls until he •cut in March, 1910, to test tlie Pekin rolls. Pre- ions to that time Mr. Van Zandt’s experience 108 100 rolls »t Sibley for the Allis-Chulmcrs Company (0.11., |>. 271, xQs. 37.07). Mr. Newhonse life wiso knew nothing about (lie operation of giant rolls except what lie learned for the AllM'linl- mers Company h.v a visit to the Edison giant rolls at Sibley ( D. ]{., p. .|27, HXQ. 141; p. 422, xQs. 123-1 25 ) . Complainant's witnesses, Messrs. Mason, Knowlton, Iferter and others, have tad years of eontaet with and practical experience in the designing and operation of ginnt rolls. Their testimony, therefore, is entitled to far greater weight than the testimony of defendants' wit nesses. Wo have seen that Mr. Peterson states that lie saw the driving lielt U slipping on the pulley # on the lino shaft of the Pekin plant in the at tempts to start the rolls from a state of rest. Mr. Mason has shown in addition that during tie operation of the Pekin rolls, in breaking and crushing rock, the driving belt slips on the piillej on the line shaft as well as on the pulleys on (lie roll shafts. „ X’l'JT’ ,n',cord J. Interpreted by Mr. Mason, shoo ,, p f.t,l ° bolt 0,1 1,10 “no short pulley end on the ml pulleys of the Poktn rolls. From defendants’ Uecord J, introduced by .Hr. Ann Zandt, Mr. Mason shows that the driving belt U slips upon the clutch pulley „ on the line shaft T as well as upon the roil pulleys of (lie LeKm plant as follows (O. ]{., p. OJMJ) ; _ V*11' defendants' witness, .Mr. Van """'.It, answer to Q ;j:j compares (lie rev- Mr. Van Znndt says in his answer to Q. 33, that ‘to be exactly correct, the last figure (1 2/3) should be one and seven-eighth re¬ volutions instead of one and two-thirds.’ The difference lietwen one and seven-eights and one and two-thirds is five twenty-fourths of a revolution of the clutch pulley. Assuming that the circumference on the crown of the clutch pulley is 12 feet and S inches, 5/24th of 12 feet and S inches would be 31 inches. Now, if ns stated by Mr. Van Zandt, the sur¬ face of the clutch pulley travelled 31 inches less during the fifth 50 revolutions of the south roll pulley than during any one of the preced¬ ing four 50 revolutions of the south roll pul¬ ley, what is the conclusion to be drawn from the fact, with reference to the belt? A. The conclusions are that the belt is slipping on one or both of the pulleys. Q. 150. It appears from the tabulation made in the preceding question that the clutch pulley increased its speed over the south roll pulley during the fifth 50 revol¬ utions of the south roll pulley' to the extent, as calculated ill the preceding question, of 5/24tli of a revolution of the clutch pulley. Taking in view that fact, would you say that the slip of the belt occurred on the clutch pulley or on the south roll pulley? A. I would say that the belt slipped on the south roll pulley unless it was shown that at the same instant when the slip took place, the north roll slowed down an equal amount with the south roll. Q. 151. It appears from Mr. Van Zandt’s answer to Q. 33, that during the fifth 50 re¬ volutions of the south roll pulley a charge of rock was in the rolls and bad not gone 110 through the rolls. In view of this fact, what have ,von to say as to cause ami oltcct lio- tween the rock in the rolls and the slip of ; the hell; to which yon referred ia yoar an¬ swers to the last question? A. In all pink ability the slip would take place on the south roll pulley hut it is possible that it took place on the clutch pulley. I could mil tell positively Just what laid occurred with¬ out knowing the speed or the north roll at the iuslnnt when the slip occurred. Ia vie# of the fact that rock was in the rolls during this no revolutions of the clutch pulley, we would expect some slip of the belt on the pulleys and more probably on the south roll pulley. (J. 102. I understand that you would at¬ tribute the slip to the rock in the rolls as the cause of the slip? A. Yes, sir, that is cor- Defendants’ llocord II, ns Interpreted by Sir. Van Zand), Indicates slipping ot the bolt on tho Pekin roll pulloys. Hr. Van Zandt's interpretation of defendants' chronograph Record Jl indicates the slipping ol the driving belt U upon the roll pulleys Ua and U, of the Pekin rolls while breaking rock (D.R., |ip. 244-24(1). Record if shows revolutions of the belt- tightner pulley V, of the south roll and of the north roll. With regard to the belt-tighlner pal- ley, Jlr. Van Zundt; says (D.U., p. 245) “The belt- tightner pulley, being free to turn without, transmitting any power, docs ..... sl.p ..1 slide under the belt, nor does the noil creep upon it, consequently it acts as a measure of the belt travel." that w hue there is no sibling of a’ belt oil P!!, jv’ ‘1,e often inferential speed of m i? "' .I- !0 11 s the si cal of II li (IJ.lt., p. 3t>.}, Q. .jfi). Hlifle defendants’ it 1 If ,v„s being nm eight alleged charges of rock were sent through and crushed by tho rolls (D.R., p. 24(1, Q. 30). Interpreting Record IT, air. Van Zandt says that it “indicates with exceptional accuracy that there was not more titan four feet of belt slippage”, ! that is, not more than four feet of the slip of tho driving belt U on the roll pulley U:, or U-, (D.R.-, jp. 245, Q. 30). It is true that defendants’ conn- [sol, realizing the effect of this admission, after several adjournments and on re-direct examina¬ tion, had arr. Van Zandt testify, under objection, that Record H does not indicate belt slippage (D.R., p. 330, RDQ. 270). However, air. arason has conclusively shown that defendants’ chrono¬ graph Record H shows slippage of tho driving licit U on the roll pulleys U-, and U„ of the Pekin plant, the evidence being as follows. Prom defendants' tabulation from Record H, Mr. Mason proves Slipping of tho bolt on the Pekin roll pulleys. air. Newhouse produced Defendants’ Exhibit, Tabulation from Record If (D.R., p. 373, Q. 43). In this tabulation arr. Newhouse set forth the number of revolutions made by the north roll pulley and by the south roll pulley during each 100 revolutions of the belt tightner pulley, for 2000 1/4 revolutions of the licit tightner pulley. Right alleged charges of rock were delivered to the rolls during the making of said Record H. afr. aiiison completed the showing of Defend¬ ants’ Exhibit, Tabulation from Record IT, by a table showing, in the sixth and seventh columns thereof, the relative retardations of the north roll pulley and of the south roll pulley, expressed in fractions of a revolution in the sixth column and reduced to inches in the seventh column (C.R., p. 704, Complainant’s Exhibit, No. 40, Tabulation from Defendants’ Exhibit, Tabulation from Rec¬ ord H). Mr. Masou explained his tabulation from Dt- fendnnts’ Exhibit, Taliulal ion from Record i[ (0.1!., p. 280, Qs. 88-111 ; p. 200, Q. 148; p. 3fij liDQs. 801-307 ; p. 305, xQs. 8150-857). ' It appeared Unit the north roll pulley wns * turded with reference to the south roll pullet in nine instnnees and that the south roll pullet was retarded with reference to the north roll pni- le.V also in nine instances, there being one In¬ stance where neither roll pulley was retarded wilt reference to the other during the period in which the belt-tightner pulley made 100 revolution! ( C.l{., p. 288, Qs. 00-101). Another important fact appeared, to wit, that the sum of the nine re tarda tions of one roll pulley wns snbstiuitinllj tile same ns the sum of the nine retardations of tlm other roll pulley (C.H., p. 283, Qs. 00-100). From Sir. Mason’s tabulation from Defend¬ ants’ Exhibit, Tabulation from ltecord II, i appears that the greatest amount which the south e roll lost in speed, with respect to the north roll dm- 1 ing any one of the twenty 100 revolutions of the I belt-tightener pulley, amounted to 33.03 inches oil surface speed (GUI., p. 288, Q. 105; p. 705); and that the gi test amount I icl the north roll lost in speed, with respect to the south roll during any similar period, was 27.1S inches of surface sped (G.I!., p. 284, Q. 107). Of course, those figures do not begin to disclose the actual, individual, install- tnneous variations in speed between the two roils at Hie tunes when the hammering knobs of the rolls were expending the kinetic energy of the rolls by 11 - 1 K II ivs of great intensity to the l".‘‘ 1 lluj', me|,ely that at the end of the uniilw ° which the belt-tightener several lu'°*,ll'0IIS> Ike net result of the rolls was* j111.1! 10118 luul accelerations of the two > 111 ie one ease, that the south roil li 113 ( lost 33.03 inches of surface speed with respect to Hie north roll, and, in the other case, that the north roll had lost 27.18 inches of surface speed with respect to the south roll (G'.I!., p. 2S4, Qs. 108-100; p. 300, TlDQs. 304-305). Unquestionably defendants’ ltecord E shows that defendants’ Pekin rolls are independently driven and disio eeti 1 massive rolls, and it shows also Ihat the driving belt .dipped on the roll putlogs. As pointed out by Mr. Mason, had defendants’ rolls been geared together, the gears would have been broken, by reason of the variations in the relative speeds of the rolls in every one of the twenty 100 revolutions of the bolt-tightener pulley, except pos¬ sibly in the fourth 100 revolutions, during which it cannot bo determined from defendants’ tabula¬ tion from ltecord E whether the relative speeds of the rolls varied or not (C.R., p. 200, Q. 148). Deference to Mr. Mason's tabulation from De- I fondants' Exhibit, Tabulation from ltecord II (0.11., p. 705) shows that, during the nineteenth 100 revolutions of the belt-tightener pulley, the north roll was retarded with respect to the south roll 127.18 inches, a charge of rock being broken during this periol, and that during the next period the reverse took place, the south roll being retarded with respect to the north roll 33.03 inches. Mr. Mason points out that this indicates belt slippage and is in accordance with the tendency of the belt o bring the rolls to the same or approximately he same speed after any variation in the relative I speeds (C.l!., p. 355, xQs. 350-357; cf. infra, p. 1 110). s above stated (supra, p. 110), defendants wit- I nesses, Messrs. Van Zandt and Newhouse, testified that the belt-tightener pulley-acts as a measure of the belt travel. With this Mr. Mason agrees (C.R., p. 300, RDQ. 300). Therefore, since it appears like manner Hint tlie belt-tightener pulley made .10 (if n revolution or 1 1/2 feet more travel during tlie second 250 revolutions of tlie south roll pulley than during the first, and .04 of a revolution nr more than 0 feet more travel during the second 500 revo¬ lutions of the south roll pulley than during the drat, (C.H., p. 300, Q. 150; p. 301, Q. 102). Since, as stated by Messrs. Van Znndt and Ncwhouse, tlie belt-tightener pulley does not slip or slide under the belt, nor does the belt creep upon it, it nets consequently as a measure of tlie belt travel (supra, p. 110; D.]{., p. 245). Tills means that if there is a change in the relative speeds of tlie belt-tight- ener pulley and tlie roll pulleys, tlie licit is slip¬ ping on one or tlie other of tlie roll pulleys. De¬ fendants’ chief witness, Mr. Van 55andt, states this proposition ns follows (D.R., p. 245) ;— “This belt-tightener pulley is approximately 3 feet in diameter, consequently a changein the. differential in . speed of one revolution would represent slightly less than 10 feet of belt slip¬ page." Mr. Mason agrees with this, saying (C.R., p. 300, ). 150; p. 301, Q. Mil) that this change in differen- ial “indicates that the belt is slipping or, cr the forth and south roll pulleys’’, and points out tlint Defendants’ Exhibit, Tabulation from Record H, clearly indicates a slip of the belt, over the north find south roll pulleys amounting, as above shown, to over 1, feel and to over G feet.. Of course, the Court will hear in mind that it is possible to obtain from Defendants’ Exhibit, Tabu¬ lation from Record H, only the results existing at the end of 250 or 500 or 1000 revolutions of a roll 11!) II is not possible to interpret the notion of the giant rolls ill points of time during the breaking and emailing of rook by menus of u tnclioseopo (('.It., p. 27(1, Q. (17). It is possiblo by menus of a tachometer (C. It., p. 27(1, Q. (IS). This point is important and emphasis is put upon it. The chronoyraph records produced by defendants lire nil records of a tuehoseope. Those produced by fiiuijiluiiimit urc records of tachometers. The ncllon of the rolls Is more pronounced end more remlily Interpreted when breaking largo rook masses. For this rea¬ son also, defendants’ tnchoscope records, mndo whllo the I’okln rolls woro crushing smull ohnrgos of small rook, nro not records of proper tosts designed to dlscloso tho full capacity of the action of the rolls. idr. I Sen l ley, in explaining that the action of the rolls is more pronounced and more readily Inter¬ preted when breaking large rock masses than when breaking small charges of small rock, as in the teals produced by defendants of tho rekin rolls (('.it., p. 288, (). 120; p, 289, Q. 123; p. 347, xQ. 333), explained and illustrated in a clear manner the difference between tuehoseope records, which compare the time occupied by a number of rota¬ tions of one roll with the time occupied by a num¬ ber of rotations of another roll, and tachometer records, which record and show the speed rate of a roll and the variations thereof in even u sinyle turn, saying (C.H., p. 400);— “The fact is further shown by the tests here in evidence upon the Edison giant rolls at New Village, which demonstrate that while the rock musses lire turyc, the independent action of the individual rolls and the distinct arrest of the individual rolls is more pro¬ nounced, whereas, when the rock becomes liner the differential retardation of one roll with respect to the other becomes less pronounced and more difficult to detect. It may be still detected by the tachometer , which records the | 121 of Defendant's rolls would be one taken with largo rock masses such ns the rolls are par¬ ticularly designed to act upon. In other words, the tests should cover the entire range of the designed capacity of the machine and not bo rent rioted to that portion of Us capacity range, wherein its characteristics are more difficult of detection. That is, it should be tested with large rock masses, as well as with small ones.” Tlio hnmmorlng knoliB of the giant rollB deliver their blows within far loss thnn 1/24 of a socond and the bolt slips within far loss than that time. From the foregoing explanation the Court will understand the inadequate character of the chrono¬ graph records produced by defendants to show the operation of the Pekin rolls. The slip of the driv¬ ing licit U upon the roll pulleys U2 and U.n of the Pekin rolls occurs instantaneously, that is to say, at a point of time amounting to a very small frac¬ tional part of a second. The rolls, running at the rate of ISO revolutions per minute, make three revo¬ lutions in a second and the blows delivered by the hammering knobs upon the rock occur, therefore, within the fractional part of one-third of a second. Since the knobs can strike the rock only when pass¬ ing through one-eighth of the circle of revolution, each blow is struck within less than one twenty- fourth of a second (D.R., p. 31S, xQ. 227). There¬ fore, the slip of the belt, on the roll pulleys takes place within less than one twenty-fourth of a sec¬ ond. It is perposterons to suppose that defend¬ ants chronograph records, which merely give the total number of revolutions made by a pulley or a roll during a considerable period of time, will dis¬ close a slip of the belt taking place instantaneously and within less than one twenty-fourth of a sec¬ ond. Tils roll revolution linos of defendants- chronograph roc- slipped upon we roll pulleys U., and U3 of the Pekin rolls (C.R., pp. 419-408). The l it eo or thu north roll pulley of the L’ekin plant is on thu crown of the pulley 18 feel, LO'/o inches, or 22(1.5 inches, anil that of the south ■oil pulley is 18 feet, 10'/| inches or 228.25 inches (U.H., p. 351, Q. 15; p. 251, Q. 35). Upon (lefcml nils’ Record U, which we are now considering, the ivcrage length of each line representing a revolu¬ tion or the north roll or of the south roll is less Limn one-thiril of an inch (D.H., p. 330, xQs. 25i- 28(1). Therefore, defendants' ehronoyrupli reeorih present Hues which arc approximately l/lHSIh part of the circumference of the roll pulley. As pointed out by Mr. Mason, on defendants' chronograph records, a line denoting a revolution of one roll shows nothing except that the roll made the revolution (O.R., p. 388, liDQ. 388). Hence, If you desire to ascertain from defendants’ clirono graph records what the rate of spued of one of do fondants’ rolls was at any given instant of time, .ion must by extremely careful measurements, do termine the lengths of these minute Jines denot¬ ing the roll revolutions and also tl.e length ol t,m“ '!<• not correspoml «■ ictly with the lines denoting the roil revolii- mas, and then, by careful calculation, the speeds ml variations in speeds of the rolls can he do ernuned (C.K., p. .‘itit;, BDQs. 3SS-3S9). This has eon done by Prof. .Martin and by Prof. Pryor ia r° (;.,,su <)f dofim limits’ Record C, and Professor! ui in and Pryor hare conclusively shown that by 01 l,t 1 Ul0n in speed of defendants' Theoretically, as well as practically, power can¬ not lie transmitted from a belt to a pulley without a slip of the belt upon the pulley. Messrs. Van Zandt and Newhouse produced certain books of reference to show that when a belt is employed to transmit power to a pulley, the belt, by reason of its elas¬ ticity, will stretch between the points of approach and departure upon a driven pulley und that as the belt thus stretches, it slips or creeps over the surface of the pulley. Messrs. Van Zanilt and New- house attempt to distinguish between such creeping of the belt along the surface of the pulley and what they call the slip or actual sliding of the belt upon the surface of the pulley. In reality, as shown by Messrs. Mason anil Bentley, the creeping and the slipping or sliding of a belt upon a pulley are noth¬ ing but different stages of the same thing. Mr. Mason says that there is no well defined dis¬ tinction between the two (O.U., p. 313, xQ. 200) mid he adds (C.R., p. 327, xQ. 270) “I have always understood from the theory of belt drive and from the authorities which have been produced in this case, that there is always some slipping of a ■ belt in transmitting power. By some this is termed creep, by others allowance is made for creep and slip. Creep¬ ing and slipping arc so nearly alike that it is very difficult, if not impossible, to say where one slops und the other starts.” Mr. Bentley’ defines “belt creep” as “incipient dip”, saying (C.R., p. 514, xQ. 12 anil xQ. 14) tinction between the “creeping,” nnd the “slid, ing” of a belt oil a pulley? A. I have not been able to discover nny tangible distinction be¬ tween the two, the creep, ns I understand it, being a sort of incipient slip and both acting to characterize the connection of the belt with the pillion as not a fitted, unchangeable con¬ nection like that between two tooth-ycarcd wheels." “It is possible to make a more or less specu¬ lative distinction though it lias never seemed to me very tangible, it being difficult to tag at what point the partial slip to which the term ‘creep’ seems to be applied becomes « complete slip, it all being due to the tension of the belt or the pull of the belt against the resistance of the pulley to rotation.” Defendants havo adopted tlio friction drlvo by a belt c the Edison patents ns distinguished from a positive drir hy gears. Dealing further with tills subject, air. Bentley clearly shows that the belt drive of the Pekin rolls is the licit drive of the rolls of the patents in suit and involves the slipping power connec¬ tions of claims -t and 7 of the apparatus patent ITe points out that in the Pekin plant the de¬ fendants have adopted the friction drive ns ilk tinguished from a drive by gears, just as in the Edison machines of the patents at Sibley nnd New Village (C.B., p. 4S-1, fol. 1450). Tho records of the tesfR «... .... OM . , lests Produced by defendants were f small nafcC0Vcr on y 25 mInutos of time. Small charge* With regard to the tests made by defendants of lie Pekin rolls, Hr. Bentley points out that the ecords thereof were made during certain selected mes, covering about 25 minutes in nil, nnd that ot only were the times of the tests selected, bat the rock to lie crushed was also selected and the delivery of the rock was made gradual and the hells were made abnormally tight (C.H., p. 4S4, fol. 1451; D.lt. p. 209, xQs. 189-192). Mr. Mason lias conclusively shown that the small charges of small rock fed to the Pekin rolls, during the making of the selected records produced by defendants, were not calculated to disclose the operation of the rolls (C.B., p. 280, Qs. 114-123). Mr. Dontloy shows that tlio slowing clown of tho Pokin rolls provos dint they break rock by klnotlo onorgy; that tlio so-called “belt creep” proves that the belt can and will slip whonovor tho rock rod to the rollB Is of a character to evoke tho slipping capacity; nnd that, thoroforo, It Is Imma¬ terial whether tho belt did slip during the selected tests pro- tluccd hy defendants. Continuing Mr. Bentley states that it is not denied that la the Pekin plant both rolls taken together slow down to a material extent during tile crushing operation, which demonstrates, lie says, that their crushing operation is by the ap¬ plication of kinetic energy, tlio expenditure of such energy lining measured by the drop in speed. It is denied, however, lie says, that the rolls act upon the rock unequally, such differential action ns the tests show being attributed to (a) belt creep nnd (?i) a small difference in the diameters nf the two pulleys (C.R., p. 4S4, fol. 1452).. The so-called phenomenon of belt creep is, lie says, too indefinite (if it really exists as a matter separate from ordinary slippage) to determine with any accuracy (C.B., p. 485, fol. 1453). How¬ ever, witli regard to defendants’ theory of belt -I'cep he says (C.B., p. 480) : •As I understand Defendants theory of ‘belt creep’ it depends upon the stretching of the belt, due to the difference in tension be¬ tween the part of the belt approaching the pulley and the part of the belt which is on and leaving the pulley, nnd said stretching would lie a wholly indefinite matter, depend¬ ing upon the individual belt and is impossible of enleulntioii by general formube. As I un¬ derstand it, however, it dcmonsl rates tlw existence of slipping capacity (whatever eattse it may be due to), if there were any necessity of demonstrating that eapaeity. Therefore, since the Defendants’ apparatus is provided with a belt drive which is in¬ herently a friction drive with eapaeity for slip, as demonstrated tty Defendants’ tests,— whatever that slip or creep may have been due to, —it is, to my mind, totally immaterial \vhnt might have occurred at the particular limes and under the particular conditions in¬ volved in the so-called tests by the Defend¬ ants. If the belt, cun ‘creep’ on the pulley surface, it is not so secured to the pulley that " «hl> thereon if sufficient force were applied. Tins would not be true with rolls Ijcurcd together by toothed gears. Moreover, ‘ ,c. cupaeUy did not happen- to he ' l’"° «t the lime of the tests, it wwh m"C‘ pl"v ,hv ,U,,J "f'cr> ^ sttS'trirxsjtSzt gearli'S”WU1‘ 1,0"S g0aml toSL“tl,ei' by toothed , modifying oducod by (lofondun d without bolt slip; I a pulloy in enuo of by Mr Van Zandt upon mX m™ . . . (»•«•’!- ,li,j»mCr c,""wl be transmitted without Lett 'ibid'of TTHy m>'H t,mt “»n»P” is merely |7, f ij* 1,11(1 adds (D.It., p. 302, xQ. 32T Another authority produced by Mr. Van Zandt states (33.lt., p. 303, xQ. 190) ; — “Belt gearing has the disadvantage of slip”. Another authority produced by Mr. Van Zandt points out, as shown by Mr. Bentley, (supra, p. 19), that belts possess the quality of acting as a cushion, modifying on one pulley any shocks ex¬ isting on the other, and that in ease of a sudden or violent increase of load, (for example, dump¬ ing immense rocks upon the Bukin giant rolls), the belt will slide on the pulley, the statement being as follows (D.It., p. 304, xQ. 200) “From what has been said, it follows that when a mathematically equal velocity ratio is essential, belts cannot be employed, but the elasticity that disturbs the velocity ratio pos¬ sesses the quality of acting as a cushion, modifying on one pulley ting shocks, sudden strains, or jars existing on the other, while the longer the belt and less strained within the limit of elasticity, the greater this power of modification; furthermore in case of a sud¬ den or violent increase of loud, the belt will slide on the pulley, and in most cases slip off it, thus preventing the breakage of parts of the driving gear of the machine driven that would otherwise probably ensue. Further¬ more, belt connections are lighter and chenper than gear-wheel or oilier rigid and positive connections, and hence the wide application or leather belts for the transmission of power, notwithstanding the slight variations of pulley velocity ratio due to the unequal elasticity of the various parts of the leather composing the bolt.” Tbe same authority states that the allowance of 2 per cent, for slip ordinarily made should he di¬ vided into equal parts representing creep and slip proper, stating, “there is probably always more or less actual slip ” as distinguished from creep. The stutcmeht is ns follows (D.R., p. 305, xQ, 203) ;— “When u belt is too tight, there is u con¬ stant waste in journal friction, anil when too loose, there may be a much greater loss in clliciency from slip. The allowance recom¬ mended of 2 per cent, for slip is rather more than experiment would indicate for any pos¬ sible crawl or creep due to tlio elastacity of tlie belt, but m connection with this, there it probably always more or less actual slip, and we are inclined to think that in most cases this allowance may be divided into equal parts representing creep and slip proper.” The Court will, of course, understand that these authorities produced by Mr. Van Zandt deall with the ordinary driving of a pulley by means ofi belt. As stated, under such conditions, there 1 always more or less actual slipping or sliding ol the belt upon the pulley, which increases in cas of any sudden or violent overload. Obviously i« the operation of defendants’ 1’ekin rolls, the bell mast slip upon the roll pulleys when a charged rock is suddenly dumped upon the rolls. Mr. A’ewhousc also produced an authority ex¬ plaining, like the authorities produced by Jlr. J an ndt, that the slipping or creeping of a belt along the surface of a pulley, due to the stretch of the belt, causes a differential in sped between the driving and driven pulley about winch the driving belt passes (D.B. p. 3SG, Q. 47). Defendants’ witnesses, Messrs. Van Zandt and .New house, state that there is a difference in- sped of the north and south rolls of the Pekin plant i ue to the stretching of the driving belt U (D.K-, p. 340, 31DQ. 3S7; p. 3S4, Q. 40). They also say bat the Pekin rolls run at different rates of spool •clause the pulley U„ on the shaft of the south > is s ightly smaller in circumference than the pulley U2 on the shaft of the north roll (D.R., p. 231, Q. 35; p. 383, Qs. 44-4G). When the Pekin rolls arc running empty they say tliut one-half the difference in speed is due to the difference in the sizes of the pulley and the other half is due to the so-called belt creep, due to stretch (D.R., p, 251, Q. 35). When the Pekin rolls are breaking rock the difference in speed increases. This is shown even by defendants’ chronograph records as in¬ terpreted by Messrs. Van Zandt and Newhouse (D.H., p. 240, Q. 30; p. 218, Q. 42). According to these admissions, the Pekin rolls infringe be¬ cause clearly they are the independently driven and disconnected massive rolls of claims 1 and 2 of the method patent and of claims 1, 2 and 3 of the apparatus patent, and because they are the independent massive rolls of claim 4 and 7 of tlie apparatus patent, having power connections, which, like the slipping power connections of those claims, permit a reduction in the speed of the rolls while breaking and crushing rock. The admitted changes in the relative speeds of the rolls proves that there is a slipping power connection located at the roll pulleys as well ns at the motor pulley and at the pulleys on the line shaft. With regard to the stretch, due to elasticity, of that part of the driving belt U of the Pekin plant that passes between the two roll pulleys, Mr. 'Van Zandt states that the rolls could be com¬ pared to two pulleys connected by a band which is slightly elastic; that this intervening band would stretch in proportion to the tension re¬ quired to pull the north roll; that the south roll is permitted to turn further than the north roll by the amount of this stretch; that the stretch is greater when the rolls are breaking 130 131 rock limn when empty; and Hint as the belt stretches it creeps along the surface of the north roll pulley between the points of approach mid departure (D.H., pp. 250-2(10, Q. 43). Mr. Van Zandt concedes that because of the stated change in tension, and, therefore, in stretch, of the bell, the l’ekin rolls do not act as they would if posi¬ tively connected by gears (D.H., pp. 259-200, Q, 43). bmee defendants thus concede, as they must con¬ cede, that the driving belt U of the Pekin rolls is clastic and therefore stretches in different amounts, according to the tension put upon the licit, it follows that, in the absence of any actual sliding of the belt due to a violent shock, the elasticity and stretch of the halt prevents the rigid reaction of one roll upon the other and pro¬ vides a cushioning connection between- the rolli which modifies on one pulley or roll any sudden shock existing on the oilier. This, as explained by Mr. Bentley (supra, p. 19; C.K., p. 525) and by the passage above quoted from the authority produced by Mr. Van Zandt (supra, p. 127; D.E., p. 304, xQ. 200), is the equivalent of an actual slip of the belt on the ioIJ pulleys, since it enables the defendants to bieak rock by kinetic energy expended through ie hammering knobs of the massive rolls with¬ out one roll reacting upon the other roll and v . horn the destructive effect that would ensue Ion, I'°11'\"’e,'e l,ositive'y connected by toothed gearing and one roll were thereby forced to expend its kinetic energy stripping the gears of t other roll instead of expending its kinetic energy shattering the rock. The Court will understand that in ease of o the mil S '0«’ "" l)crill,tting a reduction in the v ° 0 I0,,s wlli,° breaking and crushing The slip of the driving belt U on the roll pulleys was proved in another way from Record H through the cross-examination of Mr. Van jjnndt. By menus of a scale measuring the one- hundredth part of an inch and a magnifying glass, complainant’s counsel and Mr. Van Zandt measured the lengths of three lines representing successive revolutions of the south roll and of three lines representing the corresponding succes¬ sive revolutions of the north roll (D.R., p. 330, xQs. 257-2fiG). The measurements were approxi¬ mately the same. Mr. Van Zandt gave the measurements ns fol¬ lows;— 1 2 3 S.R. .24— .275— .30 = total of .815 Jf.H. .28 or .29— .21 —.31 = total of .80 or .81 Complainant’s counsel gave the measurements as follows: — 12 3 S.R. .24— .27— .31 = total of .82 N.R. .28— .22— .30 = total of .80 In interpreting the foregoing measurements, it is necessary to bear in mind that the longer the line denoting a roll revolution, the slower must have been the average speed of the roll during the revolution and vice versa (C.R., p. 339, xQs. 315-310). The south roll, therefore, changed its speed at each of the three revolutions and con- stoutly decreased in speed. The north roll changed its speed at each of the three revolutions, hut increased in speed (hi ring the second revolu¬ tion and decreased in speed during the third revolution. During the first revolutions the south roll was going faster than the north roll, but during the second revolutions the north roll was going faster 135 Hum llie smith roll. During the third revolutions the two rolls were going at approximately the sii speed. - The fuel that the south roll decreased and nie E north roll increased in speed during the second f rccolulions, with the result that the north roll { eaufjh t up with and passed the south roll in speed, f prunes euaelusiecly that the drieiny hell U n slippiny on one of the roll pulleys. Mr. Van Zumlt, on re-direet examination, cm duavorod to escape from the showing of Itecord 11 that the north roll rotated faster than the smith roll at the time indicated by the measurements above set forth (D.lt., p. 313, UDQ. 293). He say: that, at the point taken upon lieeord 13, the paper upon which the chronograph record was made ivas accidentally retarded a slight amount. Obviously the retardation of the paper, if there was am, would have utlccted the lengths of the lines repre- seating the revolutions of one roll in precisely the same manner as the lengths of the lines represent¬ ing the revolutions of the other roll. Prof. Pryor Shows this (Clt, p. rn, XQ. 30). u„t there m 0/ 'hV P"l>er> during the sol volutions of the two rolls, the line repre- side ■ hi /C m’0l"tl0n of t,ie ««»th roll became com d ioi r TJCr’ Qa*> ,lild lll0I'e be«» “ ; , ' ^ ««> retardation would Hare "f mstcad of Jengthcncd that line, There 1 "’ H is conclusively established from the mcae umiienLs abovi* iriivo. i-L.t i . lotions or rim ’L l,t 1 UIIng the second rero- “ „ Z tl,U '"»■«' roll caught up *' rSL‘;' 1,0 roll in speed, ami the ° , fSJ 1,1 11 1 Place was obviousl, aa ■oil , i 1 ‘ f "cccssariiy slipped on one of the he simmir "" co,lcI,Isio,« is not avoided h.r ggcstiou that upon defendants’ chronograph records no two roll revolutions can be found that exactly correspond. Dclcmlnnta' Intorprotatlons of tholr chronograph rocordB rail to (ItscloBO tho action of tho PoUIn rolls, because dofond- nuts avoid intorprotlng tho action of tho rollB nt Instants of In dealing with defendants’ chronograph records we cannot ascertain the action of one roll within the time of a siny/e revolution. As nhovc shown [supra, p. 121) the roll may have been retarded within less than 1/2-ith of n second, that is to say, within less than 1/Stli of a revolution. All that we can do with defendants’ chronograph records as a basis is to compare the time of one entire revolu¬ tion with the time of a preceding or succeeding en¬ tire revolution of the sumo roll, or to compare tho time of one entire revolution of one roll witli the time of a corresponding entire revolution of the other roll, in tho milliner above set forth. Obviously this method must lie pursued if we are to interpret the action of the Pekin rolls at all from tlie defendants’ chronograph records. Neverthe¬ less, defendants’ witnesses, Messrs. Van Zniult and Newhouse, have set forth an interpretation of de¬ fendants’ chronograph records which conceals en¬ tirely the action and mode of operation of the Pekin rolls. They have counted the total number of revolutions made by one roll during a consider¬ able period of lime and have compared that number with tlie total number of revolutions made by the other roll during tlie same considerable period of time. Since during any considerable period of time tlie number of revolutions made by' eacii roll is approximately' tlie same, aJthouyh at instants of time the actions of the two rolls differ widely, tlie Court will perceive that tlie testimony of defend¬ ants’ witnesses, especially' of Messrs. Van Znndt i ind Xuwhuu.sc', given in interpretation of defend- mis’ chronograph records, is entirely worthless. Hr. Xuwhousc produced Defendants’ Exhibit, Il¬ lustrative .Model of Belt Creep (D.It., p. This model consists of pulleys arranged like the pulleys mi the roll shafts, the idler pulley, the clutch pul¬ ley u on the line shaft and the belt-tightener pulley of the 1’ekin plant and of a belt made of a rubber 111 passing around said pulleys. The model was produced in order to prove that by reason of “hell creep” the south roll of the Pekin plant rotates faster than the north roll. In operating the model Mr. Newhousc pointed out that the pulley corresponding to the south roll pulley ran faster than the pulley corresponding to the north roll pulley and tliiB dilVerence in speed he attributed to belt creep. While he was saying that it will be noted that there is no sliding of the belt on the north pulley, the said belt slid and slipped oil' the north pullley (D.U., p. 3S8 Q. 18 ami p. 31)5, Q, 58). The utter worthlessness of the testimony oi defendants' witnesses, Messrs. Van Znndt and Xewhoi.se, upon the subject of “belt creep" op pears from the fact that Mr. Xewhouse attrib- tited the greater speed of the south pulley over the north pulley of the model to the so-called belt creep.” At Pekin a canvas belt was cm- iloyed (C.R., p. 23d, fol. 700) to drive the rolls, ust as at Xew Village and Sibley (C.K., p. 280, }■ >, p. G2S; RDQ. 100). Mr. Mason Slihti- "!C!1 * cu,,vu* Mt, being Complainant’s Ex- ", * 0 • 'IS> Substitute Belt for the Rubber , - Substitute Belt for the Rubber “-mi of Defendants’ Exhibit, Illustrative Mode! Belt Creep, and thereupon the reverse action took pluve, namely, the north pulley ran faster Hum the south pulley, gaining one revolution in llil ( C.R., p. 270, Qs. 82-85). Moreover, us pointed out by Mr. Mason, the relative rates of the two pulleys would not ho the sumo on uni) two trials although with the canvas belt the north pulley would also rotate the faster (C.l?., p. 309, HXQ. 399). Defendants’ counsel produced two other sub¬ stitute belts for the said model, but the north pulley rotated faster than the south pulley with each of them (O.B., p. 357, xQs. 3G0-3Cd). The utter worthlessness of defendants’ ,(bolt vrev))” theory is further shown by the action of the New Village rolls. As explained by Mr. Mason, the theory of belt creep ns proposed by Messrs. Van Kandt and Xewhouse would tend to make the regular roll run faster than the slugger roll of the Xew Village plnnt (C.B., p. 203, Q. 52). As shown in Complainant’s Exhibit, Xo. 18, Sketch of Belt Drive at Xew Village, the belt, in the direction of its motion, passes from the slugger to the regular roll just ns at Pekin. Nevertheless, notwithstanding the “belt creep” theory, the slugger roll always runs fnstcr than the regular roll nt Xew Village when, of course, no rock is in the rolls (O.R., p. 202, Q. 47). It is true that the circumference of the regular roll is one inch greater than the circumference of the slugger roll nt Xew Village, being 1S9.22 inches compared with 188.22 inches, and that for this reason the slugger roll would theoretically make 189.22 revolutions while the regular roll makes 188.22 (C.R., p. 2G2, Q. 40). As a matter of fact, however, the slugger roll makes in one minute of time at least two revolutions more than the regular roll, 220 against 218 revolutions (C.R., p. 202, Qs. 47-50). Therefore, the slugger roll amount winch might bo accounted for theoreti¬ cally by the difference in the circumferences on the crowns of the roll pulleys, but by an additional amount, so that not only does “bolt creep” lmve no effect upon the relative speeds of the two pulleys hut the relative speeds of the two pulleyi arc tlic very opposite of whut they would be if the “belt creep’’ theory were correct (O.H., p. 203, Q- 53). We may, therefore dismiss “belt creep” entirely from consideration in the operation oi the I’ckin and oilier Edison giant roils. Mr. Newhousc criticises Mr. Hector's statement that, when he witnessed the operation of the i'ekiu rolls, lie suiv the bell slipping on the roll pulleys Ua and U3, the rolls failing to start. Mr. Newhouse says that the combined arcs of contact of the belt with the roll pulleys is greater than the arc of contact of the belt with the driving pulley on the line shaft (D.H., p. -104, Q. 72). From a blue print of the Pekin rolls, as nearly m Mr. Newhouse could determine, the arc of contact of tlic holt with the north roll pulley is 242°, with the south roll pulley 770° and with the driving puffey on the line shaft 170° (D.B., p. 418, sQ. , " 1,110 41,0,10 bgures and those given on Coin- ola.nant’s Exhibit, Xo. 11), Sketch of Pekin rolls, ' . . "s1, “I’l'ioxiniation, it may be taken U!“* 11,0 ‘-'l)ll,biiied arcs of contact be- n the belt and the roll pulleys exceed the arc f contact between the belt and the pulley on the uie- shaft. As pointed out l.y Mr. Mason, Mr. °. ,s 011 ()I' because lie failed to take o cons,dcrat|on the fact that it happens, in I" S ,"ch S,m,t ">»«, that one roll is started the other does not start. Then the arc of "tact between (he hell, and the roll that is started plus the arc of contact between the belt and the driving pulley on the line shaft is greater than the arc of contact between the belt and the pulley on the roll which is standing still, and the bell must slip on the pulley of the roll that is stundiny still. On this point Mr. Mason snys (C.lt., p. 303, RDQ. 870);— “I do not agree with Mr. Xcwhouse and 1 do not doubt but that the same thing happens occasionally in starting the Pekin rolls as it happens in starting the New Village rolls occasionally; that is, that the line shaft is started and one roll is started by external means, and for some reason the other roll does not start. Then the friction and the arc of contact of the belt on the line shaft pulley added to that of the belt on the roll which has started to move, is greater than the friction and arc of contact on the roll which is standing still and the belt must slip and does slip on the pulley on the roll which is standing still.” Mr. Nuwhouse himself gives an instance of the action described by Mr. Mason. When he visited the Sibley plant be witnessed an attempt to start the rolls at that place, which he describes ns fol¬ lows (D.lt., p. 428, BXQ. 148) ; “This was done by means of bars, a bar being placed' under each roll acting as a lever at the same time that the engine was started. When the first attempt to stnrt the rolls was made, one of these bars acting as a lever slipped, and. the consequence was mat the engine and one roll started to revolve while the other roll remained stationary. Under the conditions stated by Mr. Newhouse, the belt necessarily slipped on the roll that re¬ mained stationary' and revolved with the pulley on the line shaft and the pulley on the roll that not boon made fast on tlio roll shafts at Sibley but this ooulil lmvo bad no oll'oct upon tlio slipping of tlio bolt, which was duo solely to tlio fact that onu roll pulley stood still while the other roll pulley and the pulley on the lino shaft revolved with the belt, the belt slipping on the roll tlint stood still. Therefore, what Mr. Hcrter says lie aetually saw at Pekin is in accordance with ivlut happens at the Edison plants at New Village mid Sibley, which defendants copied in. the Pekin rolls. Mr. HoltholT, in describing the operation ol small belt-driven, smooth-faced Cornish rolls which wore set eluse together and were used I puhciuo small pieces of stone or ore, states that the feed of the ore to the rolls was “as nearly n possible a continuous stream” and that if the or was fed in too fast, the rolls would choke and be stopped by the belt slipping (D.l?., t, ;j"g n m P- 373, Qs. 15-16). ‘ ‘ “ Mi JJhinding al o, in describing the operation ofsimil.ii rolls, states that hell slippage will lab TST*)*”* of rock is to° heavy (D-a’ Mr. Wall also, in describing the operation o( Ins Pulverizing rolls provided with Iiitermesliing dim.!”n 10"S’ ,Slnl0S tlint tlle two could not IV •RP1T ,ove" 1,1 1,10 oxte"t of the distance //; . 'lcIl) between the iiitermesliing corrtiga- hons, without belt slip (R.R., p. 520, xQ. 33). Pokl'n roiisfCanmmg tnftoT" c,m:E08 of 6mnl1 rock t0 produced by thorn ZVnT, COrd?" on ono" of m0,i' slipped on tho pulleys th ‘ novortholQas "'o driving belt II fondants’ Exhibits, Uecords a! B, and 0"° ai,Pe"rS fr°" ^ These records consist of lines denoting revolu¬ tions of the north roll pulley and of the south roll pulley and of lines denoting time spaces, each time space being ,(j of a second or .01 of 11 minute. Records A and 13 were produced by Mr. New- house (D.l?., p. 21S, 4 41), Record C was pro¬ duced by Mr. Van Zandt (D.l?., p. 234, Q. 30). The instrument by which tho defendants’ records, showing revolutions of the roll pulleys, of Hie belt-tightener pulley, of the motor pulley and of the clutch pulley n on the lino shaft, to wit, Records A, 13, C, G, H, I and J, were made, was a luchoscope, called by defendants a ehrono- graph. The instrument was provided with three electrically operated, recording pens. It is de¬ scribed by Mr. Newliouse (D.R., p. 214, Q. 33) and by Mr. Van Zandt (D.l?., p. 232, Qs. 28-29). The records, made by defendants’ tnchoseope or chronograph, show tho total number of revolu¬ tions made by the pulleys named during consider¬ able periods of time. The interpretations of de¬ fendants’ said records, given by Messrs. Van Hamit and Newhouso, set forth only the speeds of the several pulleys over a considerable length of time and do not set forth the action ■ of the several pulleys or rolls at instants of time (C.R., P- 27G, Q. 70). For this reason the interpreta¬ tion of defendants’ said records, given by de¬ fendants’ witnesses, obscures the slipping of the driving belt U, epecinlly on the roll pulleys. More¬ over, the small charges of small rock fed to the rolls during the making of the records rendered •he action of the rolls and pulleys less pronounced and, therefore, more difficult to detect than would have been the case had the tests and records been made when larger loads and larger rocks were fed to the rolls. As above shown {supra, p. 121), the hammer¬ ing knobs of the giant rolls deliver their blows 143 charges of rook foil to the Pekin rolls (luring the tests produced by dcrendunts (lid not exceed 3 or 3'/e tons enoli, ussuming tlmt the alleged usual prac¬ tice at Pekin was followed (luring the making of the tests and records as stated by Mr. Peterson (D.R., p. 353, Q. 28). Even tiiese very small charges consisted of very small pieces of stone, for Mr. Newhouse attributes the tendency of the stone to olioke between the two roll faces, at the point where they are close to eacli other, “to the considerable amount of small pieces of stone loaded and fed to the rolls at Pekin” (D.R., p. 104, Q. 71). That very small charges of small rock were em¬ ployed by defendants daring their tests appears also from the statement of Mr. Van IZandt that the dump curs were loaded “with approximately all the rook which they would carry without spilling over the sides,” and that occasionally a car was loaded with only three-fourths or seven-eighths of what it would hold (D.R., p. 200, Q. 50). This reference to the spilling of the rock indicates, what Mr. Mason proves, that the charges of rock must have consisted of “ gravel or stone of approximately that size” that would fall through the opening be¬ tween the rolls without being crushed (C.R., p. 289, Qs. 122-123). Mr. Mason readied this conclusion from his interpretation of defendants’ Records A, R ami C, the showing of which ho set forth in a table (C.R., p. 287). In a photograph of the Pekin plant taken by Mr. Williams and ottered in evidence ns Complainant’s Exhibit, No. 20, Photograph taken at Pekin Plant on July 4, 1910. during the pendency of this suit, . rock of the Pekin quarry is shown together with a steam shovel for loading the rock upon the dump cars for transportation to the rolls (C.R., P- - > Qs. 13-25). Mr. Mason and Mr. Williams state jug the strength of tlic hopper at Pekin, ita plates were (racked li,v the force of a rock fed to the rolls that must have been of immense size and weight. However, in the tests produced in evi¬ dence in this suit, defendants contented themselves with feeding wlmt must have been mostly (/ravel to the rolls, as will now lie shown from Mr. Mason's Inhles hnsed upon defendants’ Uncords A, it and 0. Mr. Trnplingen and Mr. Mason counted, upon defendants’ Records A, U and 0. the number of revolutions made by the south and north rolls while rock was in the rolls during the time spaces indi¬ cated on the records. They then counted the mini- her of revolutions made by each roll during the some number of time spaces immediately before rock was dumped upon the rolls as indicated on said record. With the exception of two slight dif¬ ferences, one for the third crushing of Record A mid one for the fourth crushing of Record 11, the results reached by Messrs. Trnplingen and Mason were the same (O.R., p. 2S5, Q. 112; p. 388, Q. 7, 1'. 31)1, Q. 23; p. 39-1, Q. 30). Prom these results Mr. Mason calculated and set forth in tabular form the average rate of speed of each roll during the number of time spaces indi¬ cated both before and while the rolls were breaking rock, and in addition obtained, by subtraction, the dilfcronce or drop in the average rate of Sliced for rack roll, due to the kinetic energy expended in the breaking of the rock (C.R., p. 280, Qs. 113- 120). These results Mr. Mason set forth in tab¬ ular form (C.R., p. 2S7). Prom the table it appears that there were seven alleged crushing operations shown upon Record A, lint in four of these operations the north roll dropped in speed only 2, D, 9 or (i revolutions, the south roll dropping only i, 7, 7 or 0 revolutions. U7 I mid proved Hint the belt was slipping on the roll pulleys (C.R., pp. -tlO-JOS). Mr. Mn«on shows from defendants’ Records A, B nnd C that tlio Pokln belt slipped on tho roll pulloys. Notwithstanding the fact that defendants’ chronograph records are those of a tachoscopc and not those of a. tachometer, nnd although very small charges of very small rock were fed to tho rolls, air. Mason has shown that the driving belt was slipping on the roll pulleys even during such tests of the defendants’ rolls (C.R., p. 200, Qs. 1211-117). (During tho first crushing of Record A the drop in speed of the south roll exceeded the drop in speed of the north roll by 5/lflths of a revolution, amounting to 70 inches difference in travel on the surfaces of the two roll pulleys. Therefore, as stated by air. arason, the belt neces¬ sarily slipped on one or the other of the pulleys, since this difference in retardation or speed could ant take place without it (C.lt., p. 200, Qs. 12(1- I ill)). During the second crushing operation of Rec¬ ord A, there was a belt slip of 50 inches shown i" the same manner (C.lt., p. 202, Qs. 131-132). During the third crushing operation there was a licit slip of 37 inches, during the fourth of 2S inches, nnd during the fifth of 75 inches, while during the sixth and seventh crushing operations, although the belt must have slipped, it is not pos¬ sible to say from Record A that the belt did slip, since, unless the highly scientific method em¬ ployed by Profs, Martin nnd Pryor be resorted to, defendants’ records disclose only the difference existing at the end of a period of time between the net, result of the retardations and accelerations of one roll occurring during the period and tl.e net result of the retardations nnd accelerations of the At New Villain the slugger roll pulley 1ms a circumference one inch less than the regulnr roll pulley, just ns at I'ekiu the regular or south roll pulley has a circumference tyj. of an inch less limn the slugger or north roll pulley. Hence at New Village, if the speeds of the two rolls lie compared at the cud of a considerable period of lime, in the manner in which Messrs. Van Hamit and Newhousc have compared the speeds of the two l’ekin rolls, the comparison will show that (lii> New Village slugger roll always runs faster than the regular roll (O.H., p. 202, Qs. 10-53), hut the tests produced by complainant of Hie operation of the New Village rolls while breaking rock shows that at times the speed of die slugger roll falls far below that of the regulnr 'oil. Tu nn instance elsewhere referred to (supra, ). 80), the New Village slugger roll dropped from !21 to 188 or 80 revolutions while the regular roll trapped from 221 to 145 or 70 revolutions, the Imp of the slugger roll exceeding that of the 'cgiilur roll by 18 revolutions, and the speed of ho slugger roll going below the speed of the oguliir roll (C.It., p. 245). Mr. Mason gives minernus such instances (C.Tt., pp. 245-275). Mr. Traplmgen selected at random various 'laces upon defendants’ Ttecords A, IT, C and TT, ml by means of a microscope and a vernier nliper, measured the lines representing succes- revolntions of the. north and south rolls {., p. 389, Qs. 13-20; p. 392, Qs. 20-28; p. Unit lie linil measured accurately a few of the inai-ks on the records measured by Mr. Trap- uigen and found variations such as those given by tlr, Triiplingen. This, lie said, indicates clearly lint there are continual variations in speed of he rolls, the relative speeds of the two rolls niistantly changing and the speed of one roll Iso (•hanging from revolution to revolution (O.H., i. 21)5, Qs. I I -1-1.15; p. 847, xQ. 334). Jlemeiuhering that the longer the line indicating roll revolution, the slower was the average speed f the roll, it appears from the figures above quoted •mu Mr. Trnpluigen’s testimony that the speed of "■It roll is e liaiit/int/ from revolution lo revolution tul Ihul the relative speeds of the rolls are eliuiig- "!• In the first revolutions the south roll is ling faster than the north roll. In the third woliilions the north roll is going considerably ister than the south roll. In the fourth rcvnlu- nns the rolls are at about the same speed. While it; is not claimed for Mr. Trapliagcn’s easurements that they have the scientific aceur- ,V of the measurements and results obtained from [•cord C by Profs. Martin and Pryor, under more vorahle circumstances, nevertheless, the tables ■odneed by Mr. Traphngen are sulllcieiitly accur- e to indicate clearly the operation of the Pekin Us. Those rolls not being geared together and lug, therefore, as explained, indepcndently- iven and disconnected, are free to act indopend- tty and the independent vibration and a el ion of eh roll, inllhnnt era, •Him on. the oilier roll, is J’rof. Martin mid Prof. Pryor have explained the scientific manner in which defendants’ Record C lias licen interpreted hy them. Becnuse of the ini- IKirtance of their testimony and in order to avoid any unnecessary lengthening of this brief, the Court is respectfully referred to their testimony (C.It., pp. I19-40S). The following brief descrip¬ tion will indicate how Profs. Marlin and Pryor interpreted the first crushing operation of Record C and proved thereby that the Pekin rolls while breaking rock revolved at different and varying rates of speed to such an c.rlcnt that the driving belt necessarily slipped upon Lite pulleys on the roll shafts. The lines indicating the several revolutions of •be north and south rolls, during the first crashing period, were scientifically and accurately meas¬ ured in ten thousandths of an inch. So were the lines indicating the successive time ticks. All variations in the rate of motion of the paper upon which Record C was made were eliminated (C.R., p. -12-1, fill. 12T0; p. 447, fol. 1340). The length of tlie time line divided by the length of the revolu¬ tion line, multiplied hy 100, gives the rate of speed in revolutions per minute which the roll is making during the time of each revolution (O.R., 1>. 424, fol. 1271; p. 447, fol. 1341). The results thus obtained were tabulated hy Profs. Martin and Pryor (C.R., pp. *25, 449). Prom these tallies the charts were plotted. The charts show marked variations in the speed of each roll and marked variations in the relative speeds of the two rolls. The speed of each roll dropped from 18S or ISO revolutions per minute to about 152 revolutions l*er minute (see the two charts and the two tables on pp. 425 and 449). At times the south roll « going the faster and at other times the north roll is going the faster, so that the lines on the char s, nlso states that from his examination of Record C I lie two rolls acted independently nml the licit slipped on the roll pulleys (O.R. p. 451, Qs. 8-0). In mi attempt to shake the testimony of l’rofs. Ihirtin and Pryor, defeiidunts’ counsel asked them (C.R., p. 431, xQ. 24; p. 450, Q. 22n; p. 401, xQ. 34) whether there was anything in the data tallies obtained from their measurements upon Record 0 (C.U., p]i, 425, 440) which would prevent the lines indicating the changing speeds of the two roils from coinciding upon their charts. In asking this i|iiestion defendants’ counsel insisted that it lie answered without interpretation of the tallies (C.H., p. 431, xQs. 24-30; p. 408, Qs. 1-3; p. 450, xQs. 30-30). Prof Martin replied that the lines in¬ dicating the revolutions of the south roll and those indicating the revolutions of the north roll were independent data of two independent occurrences; that they could not consistently he linked together ((-'.It., p. 432, xQ. 24) ; that the suggested line would mean nothing and could not he inferred from the tabulated data of two independent and listinct phenomena (C.R., p. 432, xQ. 2(1) ; that to inswor the question the table must he interpreted (C'.R., p. 433, xQs. 27-28; p. 4G8, Qs. 1-3) ! and that lie suggested line would involve a mechanical mi- mssihility (C.R., p. 435, xQ. 34). Prof. Pryor re¬ died that his table was a record not only of rate >f speed hut of change of time when the speeds 'cenr, showing that the south roll was guininB m the north roll and that the speeds of the two •oils would absolutely cross (C.R., P* ^!), xQ. J > hat to answer the question the whole table must no That tlie attempt of defendants’ counsel t» nlitike tlie testimony of Profs. Martin mid Pryor is en¬ tirely futile not only appears from the absolute ini- probability and patent impossibility that defend- ants’ two rolls should nl ever// umlaut of travel at the mine rate of speed, but is established by tlie testimony of defendants’ witnesses, Messr Van /mult and New house, who testified that tli two rolls travel at different rates 'ot speed when empty and that tlie difference in rates of speed creases when (lie two rolls are breaking and cn ing rock ( 13.lt., p. 210, last sentence; p. 240, (list sentence). Pursuing their method of interpretin the action of the rolls only at the end of a consider¬ able period of time, .Mr. Van Znmlt states tlif from Kecord C, tlie one dealt with by Profs. Mortis and Pryor, it appears that when tlie rolls are empty one roll makes 301 revolutions while the oilier makes 300, but when rock is in tlie rolls, the r is 104 revolutions to 103 ( D.li., p, 240). Mr. V /mult states that defendants' llecord Q shows i ative speeds of the two rolls when empty that i 'l"ite different from those of Kecord C above stated, one roll making 821 revolutions while tlie oth make, 32(1 (11.14., p. 241). Furthermore, Defend- iints Exhibit, Tiilmliifcmii from Record II (D.R., (>o3), as carried out in tabular form by Mr. Mns i" Complainant's Exhibit, No. 40, tabulation fro.,, ilefe. ul. said exhibit (C.K., p. 705), shows tin the rclatiee speeds of the two Pekin rolls are coi stoutly « dun,,, in,/. Therefore, the line suggested li defenulanls’ counsel is, according to the cviile.u produced by defendants, an impossibility. Accon *"#. to Profs. Martin and Pryor, it is a mem, ingles uggestio", not warranted by anything shown oi iecord C. The evidence demonstrates, in the nianj unieieiit ways pointed out in this brief, that when - or Ihe action of flic Pekin rolls is examiml wilt 157 reference to instants of time, it is found that the speeds of the rolls are ohunyiny with respect to each other to such an extent that not only do the rolls clearly act independently, but the driviny belt must slip on the roll pulleys. I’rof. I*ryor shows tlmt Defendants' Exhibit, Curve D, does not dlscloBo tho operation of tho Pokin rolls and that tho truo action of tho rolls lies botwoon tho two linos constituting Curvs D, Defendants’ witness, Mr. Vun Zandt, plotted Curve D from the two crushing operations re¬ corded on Kecord C (D.K., p. 234, Q. 30). Curve D shows that during the first crushing opera¬ tion tlie speeds of tlie two rolls dropped about 30 revolutions, from about 1S3 to about 153 revolu¬ tions per minute. The reduction in speed shows that the rock was broken and crushed by the ex¬ penditure of kinetic energy and that the power supplied by the motor was insullleient to break the reek by the direct application of the power. Mr. Van Zandt states that Kecord C and Curve D show in a clear and positive maimer that the two rolls do not run at the same rate of speed and that the differential of speed between the two rolls is greater when rock is in tlie rolls than "'hen there is no rock in the rolls (D.K., p. 230, Q. 30). Curve D ns drawn by Mr. Van Zandt consists of two lines. The distance between tlie two lines varies, especially when rock is in the rolls. In plotting Curve D Mr. Van Zandt established a limitation of error amounting to .07 of an inch of which .00 of an inch he assigns to variations in speed of tlie paper and .01 of an inch to slight irregularities in the markings of the pen on Kec¬ ord O ( D.R., pp. 242-243). Because of the limita¬ tion of error thus established Mr. Van Zandt drew tlie two lines constituting Curve D a distance Opart corresponding to this alleged error of .07 L59 tween the lines representing the limitation of error * * »” (D.R., p. 3-12, RDQ. 292). It is true that Mr. Van Zandt added that lie did this to prevent any one, who won incompetent to measure Record C, from being misled. The Court will perceive, from this statement of Mr. Van Zandt, the truth of the remark that in every in¬ stance tlie records and interpretations of records produced hy defendants have been so made timt it is necessary to read “between the lines” in order to discover the true action of the Pekin rolls. Prof. Martin and Prof. Pryor, being competent, measured the lines on Record C within one ten-thousandth. of an inch, and, eliminating the limitation of error established hy Mr. Van Zandt, read between the lines of Curve D. They thus disclosed the true action of the Pekin rolls concealed butween the lines of Curve D, and proved that when breaking rock such a difference in speed was established be¬ tween the two rolls, the speed lines of the rolls crossing each other from time to time, that not only did the Pekin rolls act independently hut tlie driving belt slipped upon the roll pulleys. The limitation of error established hy Sir. Van Zandt consisted principally of the large amount allowed for variations in the speed of the paper. Profs. Martin and Pryor had no difficulty in making the necessary corrections to eliminate dif¬ ferences due to variations in speed of the paper (C.R., p. 424, fol. 12T0; p. 417, fol. 1.340). Dealing with Sir. Van Znndt’s explanation of his alleged limitation of error, Prof. Pryor said that there is no such error in interpreting Record 0 (C.R., p. 453, Q. 13), and that there is no difficulty in correcting the time space for its variation in length on account of variation m speed of the paper (C.R., p. 453, Qs. U-Uti). In conclusion Prof. Pryor pointed out that liig chart includes all that is shown on Curve D and that Curve I) does not give u correct interpret!. Hon of itecord C during the period of crushing rock; that Itecord C shows differences in the speeds of the rolls at particular instants of time amounting to as much as 7 revolutions per min¬ ute, and that such differences found by him r-d Prof. Martin are not shown in Curve D (OH n ‘152, Q. 12). ' ,P' Construction of tlio clnlms of tlio ISrtlson patent! in suit. I Tlio “Independently-driven and disconnected masslvo rolls* montlonod In somo of tlio claims nro a species of tho elm of Independent massive rolls ■ montlonod In other claln The massive rolls of the patents in suit arc either “imlepeiulently-drivon and disconnected" stated in claims 1 and 2 of tlio method patent and in claims 1, 2 and 3 of the apparatus patent, or they are “independent massive rolls”, as stated in chums 4, 5, G and 7 of the apparatus patent. 1,10 oxP''cssion “independently-driven ami dis¬ connected massive rolls” has already heea fullr considered in connection with the proceedings in the I ntent Office and the prior art (supra, p. 31). lhe expression was suggested by the Examiner mid accepted by applicant to distinguish the o is o the patents in suit from those of the prior •lit, wherein the two rolls were (a) positively connected together by toothed gearing, and (t °,lly of < 1,0 l"'o «*»■ was driven by the opera.- g Power, the other roll being driven secondarily ' , lS 1 S c cct on with the first roll. 1 0 uuu, the n ltur ,1 meaning of the expression, I 2 Hie patents in suit, is that there is Will connection between the two rolls, such ] .is su'd exist ,f they were positively connected f “ 1 101 hy t00tlicd gearing, and thut one roll don I 1G1 not net to ih-icc the other roll through any rigid connection, such ns toothed gearing, between the two, with the result tlint eacli roll has its own In¬ dependent action and is free to deliver, through tiie knobs of different height, hammer-like blows of groat intensity to the rock, without reuclion on tho other roil. The expression “independent massive rolls,” employed in claims 4, 5, G mid 7 of the apparatus patent, is apparently bronder than the expression “independently-driven mid disconnected massive rolls”, employed in tlio claims of the method patent and in the other claims of the apparatus patent (C.R., p. 184, xQ. 30). Massive rolls that are “independently-driven and disconnected” are a species of the class of “independent massive roils”. Mr. Edison lias shown, in the patents in suit, that “slipping power connections” may he em¬ ployed in connection with “ independent massive rolls”, and this combination lie claims in claims 4, 5, G and 7 of the apparatus patent. The Tact that "slipping power connections” nro clnlmcd in combination with “independent masslvo rolls” shows thnt This combination is claimed in claims 4, 5, 0 mid 7 of tiie apparatus patent. Hence, the “slip” per¬ mitted by tiie power connections is to he distin¬ guished from tiie “independence” of the two rolls. Tho “slip” permits a reduction in speed of the rolls (supra, p. 3!)). Tiie “independence” of the two rolls permits eacli roll to expend its kinetic energy upon the rock without reaction on the other rol . Tlio “slip” may occur at the line shaft pulleys or nt any point between the motor and the rolls to permit a reduction in tiie speed of the i M ■ cat” rolls (supra, pp. 45, 90). T1 e iq e 1 i ee of tliu rolls results from the absence of any rigid connection, as by gears, between the rolls. "Slip" therefore, is not involved either in the expression “independent massive rolls" or in I hi. i \pi ,M , “iadepeadently-driven and disconiiLetul a rolls.” Neither In tho ilesorlptloiiB nor claims ot tho patent. Bull is there any limitation that tho two rolls nt nuy tim their operation rotato nt Ulfforont speeds. Tho ovldcnci tho record upon this point rolntos Bololy to tho met adopted by complainant to provo that at Pokln one ot slipping power connections, ot claims i and 7 ot the appi tus patent, Is located nt tho roll pulloya, for tho holt m Slip on tho roll pulloya whenever tho two rolls travel dlftoroat rates ot speed. Defendants’ counsel correctly pointed out that neither patent contains any statement that tin two rolls at any time in their operation rotate nt different speeds (C.lt., p. 1S-1, xQ. 20). There “u 15111:11 limitation expressed in the description claims. Tho rolls have tiic capacity to rotate different speeds by reason ot tlieir slipping pom connections, but the pur, mo of the slipping power connections is, a* stated in the patents, to perm a “redaction in the speed of the rolls” when bi-eul mg rock (No. 072, 010, j>. 1, lines 52-00). Tin mrpose is accomplished, and Infringement « daims d and 7 occurs, if, by any 0f the means sped mil in the patents (supra, p. 00) or by any cqtib en menus, the rolls are permitted to slow down ■lietlier (hey slow down toyctlier or different '°m eacI' t,tll«' ( C.li., p. .183, fols. 1419-1150) he proofs show tlmt defendants’ rolls, like all -her Edison giant rolls, do both. In either ease As pninlnd out by Mr. Bentley [supra, p. 18), the prior art was devoid of nny hint or sugges¬ tion of Edison’s kinetic method of cracking rock by oppositely directed hammer blows of hammer¬ ing rods having groat weight anil speed. Nor was there in the prior art nny apparatus designed for or capable of carrying out tlmt method [supra, p. IS). Therefore, the Court will, in construing tlie expression “independently-driven and discon¬ nected massive rolls”, so construe it ns to protect tho invention fully and will not permit a defend¬ ant, who has taken the complainant’s invention, in escape the charge of infringement. Upon this well settled rule of the patent law, Hie following authorities may lie referred to. They show tlmt where a defendant 1ms taken the substance of a patented invention, the Court will Ibid infringement, notwithstanding any change in farm. In the case at bar, defendants have taken tint only the substance but also the precise forms )f the inventions claimed in the patents in suit. A imtontoo Is not llmltod to tho precise form of construction loscrlbod In n clnlm. Dofondnnts, therefore, Infringe claim y>'"l G Of tho apparatus patent, as woll ns^tho other c n ms III Kin as Co. United States Go., 1S2 P«l. 59, is held to tlio language of his claim, and i;,„ itcd to that specific form. But if his is „ veer invention, or one of such merit us to fa entitled to ( i- liberal construction, the claim unit not be thus limited, even if couched in sw, cifie lanuuat/c, unless the inventor has also shown his positive intention to relinquish to the public ail other forms in which iiis in tion might lie embodied. Winans v. Denim 15 Mow. 330; Western Electric Co. v. Lai 130 U. S., 00.1; Jloyl v. Horne, 1-15 U. S„ aw Sessions v. Jlomadka, 115 U. S. 29.” s was said in 'I'iUjhmun v. Proctor, 102 U. “Perhaps the process is susceptible of being applied in many modes and by the use many forms of apparatus. The inventor not bound to describe them all in order secure to himself the exclusive right to process if lie is really its inventor or d cmciei. But he must describe some parti ! ‘ Jr10 01i W,,IIU “I'P'ii'ulus by which th otess can lie applied with at least son e eTal result, in order to show that it 3S'£XZ? . m •“ I-'"—1 ell IS the rule to-day (Paper Ban Patent Gut the wnm» elVeel is Morrison v. Son it, 111 Fed. ialcntee is, therefore, simply culled upon to r!h one form of his invention or method of ag out bis invention and having done so, be illed to all equivalent forms or methods of plisliing tlie same result. The specification ; set forth one complete method of and ap¬ is for carrying out the invention, the lirond ige of (lie claims, therefore, covers all proc- iised for the same purpose in substantially me way and accomplishing the same result, ontoo having described ono motliod of carrying out is Is protected against all other methodB of practicing as stated in bead note 3 of Electric Co. v. 'a ml a m Co., 102 Fed. (118, C. C. A. “In a process patent it is no objection that ic claims are broader than the illustration of e process given in the description.” i ten lee having fully described one method of ag out a process is protected against f the broad process by a resort to any other il or practicing it ( Tilghmmi v. Proctor, 102 TOT, T28, T32, cited 1.02 Fed. 027 ; see also Hull Patent Case, 210 U. S., 105; Ilollutail khurtU, 20 Fed., 853, S58-S59; General Co. ehcr, 107 Fed., 540, 558). i1*"1'. ll«« 1'laeed his jn, ,.l! !" l»est fillcil disclosed Ids con™ in his description ' uceurulcl.y cxpresi '»!• subtracting froi tcnlcd device, by climiji it more or less ellicic 'liplc or mode of operntic V the use of the same v. Dealer, !M U. • v- MtituMt, 130 Ft Hie question of infringement the Supreme n Winnii* v. Deinneml , In Mow. 330), t is generally true, when n patentee de- lies a machine, mid then claims it as de- mil, that he is understood to intend to a and does by law actually cover not only precise forms lie had described, but all r forms which embody ids invention; it g a familiar rule, tlmt to copy the prmci- or mode of operation described is an in- iCinunt, although such copy should bu to- • unlike the original in form or propor- I is only ingenious diversifies of form and lortion, present ing the n])])earance of some- g unlike the tiling patented, which give to questions; and the property of invent- would bu valueless, if it were enough for defendant to say, your improvement con¬ 'd in a change of form ; you describe and n but one form; I have not taken that, and live not infringed. ic answer is, my improvement did not con- in a change of form, but in the new cl"' mail of principle* or power*, m " e of operation embodied in a form bj ns of which a new or better result is pin id; it was this which constituted my i • inn; this you have copied, changing old' form. And that answer is justly appim - to this patent * * * and it is not a lice, that it is embodied in a form not . icd in terms claimed by the patentee. Pat¬ es sometimes add to their claims - s declaration to the elicit that tin dun ...Is to the thing i— LTputthis i or proportions may he thc nneenssary. The law so mtei pi . n without the addition of those '' s Hiilistanlinl copies of it, varying its form 01 proportions, And, therefore, the patentee having described his invention, and shown its principles, and claimed it; in that form wliicli most perfectly embodies it, is. in contcmnlie lion of law, deemed lo claim every form in ivhieh his invention may lie copied, unless lie manifests an intention to disclaim some »r hose forms.” InUmnfioniil Co. v. It rammer Co., fyg ■100, the Circuit Court of Appeals, foUon'ing in,: Co. v. Murphy, 07 U. S., 120, stated the i't rale to lie followed in determining the (pics- if infringement of mechanical devices ns fnl- (head-note i j ; — “1. In determining the question of infringe, lent of a patent covering a new combination f elements the form of the several parts Inis at little weight; the correct rule lining that arts which perform substantially the si metion, in substantially tile same way, ■ reduce (he same results, are inceliaiiionl‘(M|iiiv- I" Inlemiliotiul Co. v. Dai). 142 Fed., 7311, tbe t Court of Appeals held;— “2. Identity of detail in a mechanical com- nation is not necessary in order to constitute fringemenl, which cannot he avoided by langmg the form and slmpe of (lie elements dering nilo I he combination, so long as ff sent ini features are appropriated and a. , midiM II lt | t ill the 'c/mrorc Co. v. Shelby Co., 1(50 Fed. 02S, 030, • ), it is said: — “This court lias repeatedly held that in 1.(10 identity are unavailing to escape infringe¬ ment” (citing eases). Tho courts look through tho form of an alleged Infringing dovlco for tho suhstunco, and whore that Is found, there Is Infringement. Ill Firry Co. v. llnllock, 142 Fed., 172, the court held; — “1. Where the whole substance of an in¬ vention — tluit which entitled the inventor to a patent — may be copied in a different form it is tlie duty of the courts to look through the form of an alleged infringing device for the substance which the patent was designed to secure, and where that is found there is in¬ fringement.” Tho claims of a patent will bo construed so ns to covor and protect the lnvontlon. Claims for a meritorious Invention aro to ho llborally construed. In Wnyiicr Co. v. 1 Vycoff, 151 Fed., 5S5, 501 (O.O.A.), it was held as follows: — “1. In construing improvement claims of a patent, consideration should lie given to the character of the improvements introduced by the patentee and the change in the art attrib¬ utable to them. When they result in con¬ verting imperfection into completeness, and in producing the first practically and com¬ mercially successful machine, however simple I lie change appears, the invention is entitled to liberal treatment by the courts. “3. A strict construction of the claims of a patent should not he resorted to, if. the result would he a limitation on tin it il invent unless it is required by the language of the claim.” It is well settled law that if the defendant has taken the complainant’s invention, the Court will endeavor to construe the claim lo conform with that fact ( Consolidated Co. v. Grosiiy Go., 7 Fed. T0S ; Mosshery v. Nutter, 135 Fed. 05 C.C.A.) A court will not; permit a defendant who |lm appropriated all the advantages of an invention to escape because of changes in form only, no matter how specious or ingenious they may be (Moi-rim r. Son ii. 111 Fed., 172; While C'o. v. M’ulhriilm IIS Fed. Kill). In Merino Co. v. Pittsburg Co., 125 Fed (Pit 137 (C.C.A.), it was held: — ’’ " ’ if unnecessary and unreasonable liniilations are incorporated in tlio claims, the court should interpret them liberally and not nor- mit a defendant to escape wlio readies the same result by analogous means, though lie may employ additional elements and Improved mechanical appliances. Ill Ventilating Co. v. Fuller & Warren Co., i>7 Fed. (i2(i, the Court says: ‘The actual invention, ir in conformity with the language of the claims, should control In the construct ion of patents. A strict con¬ struct ion should not lie resorted to if it be¬ comes a limitation upon the actual invention, unless such construction is re<| aired by the claim, it being understood that the construc¬ tion should not go beyond and enlarge the limitations of the claim.’ 1,1 'I'iighmnii v. Proctor, 102 U. 8., 707, the Court says, at page 733, 102 U. S.: ‘ft is probably true, as contended for If oerendanls, that by the use of a small pur- non of lime, tbe process can be performed with less heat than if none is used. It may lie .in Improvement to use the lime for that !-!"n'!’'S?’ ,mt t,IL‘ process remains snhslan- 'll. ! ": sal,"l!' 1110 I’ntoot cannot he evaded Co., M3 Fed., 110, 122 (C.C.A.) ; Los Angeles Co. v. Aeolian ■ Co., 143 Fed., 880, 8S5-8SG (C.C.A.) ; fSmglh Co. v. Sheridan, 144 Fed., 423, 428; Mar¬ coni Co. v. DcForcst Co., 138 Fed. 057, 078; Doicagiac Co. v. Urcnnan iC- Co., 127 Fed., 143, 150; Man mil a v. Siniell, 155 Fed., 535. Till! evliluncc shows tlmt tho action of llio Pokln rolls is exactly like tlio notion of nil other Kittson rolls when breaking small charges ol'sinnll reek. l>o- femlnnts refused to iierinit eoniplnliinnt’s experts to tost the Pekin rolls when breaking stogie pleees of Refusal of ilofondnnts to pormlt tests of tho Pekin rolls when breaking slnglo pieces of largo rock. When defendants lirst closed their case, de¬ fendants’ counsel offered to permit the represen¬ tatives of complainant to make tests similar to these eoncerniiig which defendants witnesses, Messrs. Van /mult mid Newhouse, testified of the usual operation of the rekin crushing rolls in crushing stone from the Pekin quarry (I>.K-, P- •liltl). The restrictions and limitations of the offer wore obvious. The permission was to make similar tests in the usual operation of tlio Pekin plant. An examination of the records produced by de¬ fendants of tlio tests made by Messrs. Van Zandt and Newhouse convinced complainant’s experts tlmt further tests of the same kind would lie worthless, for they would not bring out in a 1 i 1 :1 definite manner the / ct> existing in the Pekin rolls, to operate precisely as all oilier. Edison rolls operate in breaking large Is 11 to 1 1\ 1 t ergy expended through the hammering blows delivered >y l® slugger and smaller knobs upon the rock. in To tiie ic effect are Columbia Co. v. Kokomo different tensions. Ooraplnlnnnt’s experts desired to test tlie Pekin rolls in the manner stated be¬ cause such tests, said Mr. Mason, would he so con¬ clusive and easily interpreted that there could he no furl her question as to the similarity of opera¬ tion between the Pekin rolls and the Edison rolls at New Village and elsewhere (C.B., p. 257, Qs. 3(1-12). He knew that the Pekin rolls must oper¬ ate in precisely the same manner as the rolls at New Village and elsewhere nml was anxious to make tests that would he so clear that he who runs might read (C.R., p. 351, xQs. 347-351). How¬ ever, defendants’ counsel refused to permit tests to he made of the Pekin rolls in the manner re¬ quested (C.B., p. 712). Complainant could obtain no assurance that if he sent his experts to Pekin they would he permitted to include in the tests of the Pekin rolls any of the tests which complainant had requested should he included (C.R., p- 308, fol. 1103). The refusal of defendants to permit the Pekin rolls to he tested in a manner that would bring into action in a pronounced way the capacity of the rolls amounts to an admission that the Pekin rolls sire in every respect like the Edison rolls of the patents in suit. Complainant's tests of the New Village rolls show that the Pekin rolls must act like all other rolls of the patent m suit whon breaking largo pieces of large rook and I t a ^ action attributed by defendants to the Pekin rim ^ ^ “Bro7saof1hrpm0emsmm SUH when” biking similar A. Action of the rolls when breaking large elm ryes of large rock. In order to interpret the records produced m the testimony given by defendants* witnesses, 1 * Van Zundt, Newhousc and Peterson, Mr Mascm made a number of tests of the Edison rolls of the patents in suit at New Village (C.B., P- - > *>■«)■ For (his purpose lie employed two tacliom- flora, one for each roll, which, upon l.oing pro_ erly adjusted and tested for accuracy, by means of « tuehoscope and otherwise, accurately recorded on dial charts produced by Mr. Mason, the speeds of the two rolls and the changes in speeds of Ik two rolls ul every instant of lime (CM., p. 243 Q. 7; p. 275, (js. (15-74 ; p. 3128, xQs. 273-21)9; 11 331, xQ. 30!); p. 30(1, HDQ. 385-301; p. 400). i|‘e dial charts are correct within two per cent, nnd possibly less than one per cent. (C.l?., p, 32!), xQs. 288-28J ) . The diirerences in the relative speeds of the two rolls as shown hy the dial charts is, how¬ ever, so great at times that the possible error of one or two per cent, is of no moment whatever (C.It., p. 30(1, JtDQs. 385-380). From some of the dial charts Mr. Mason plotted diagrams showing the operation of the rolls when breaking rock and these diagrams, together with the dial charts, form Complainant's Exhibits, Xos. 21-47 of the index to complainant’s record. Inter¬ preting the dial charts Mr. Mason describes the action of the rolls when breaking charges of rock of dill'e rent kinds and weights (C.l!., pp. 245-252; I'. 25!), Qs. 42-114; p. 27S, Qs. 75-81). lie also points out that the Pekin rolls are the same in instruction as the New Village rolls and that the Uikm rolls must necessarily operate like the New ..ag® I0"s (C.R., p. 253, Qs. 8-41; p. 354, xt). Un,i *’■ :!!i7> UDli- 31,1 » 1>- 371, liXQs. 40(1-410). 11,0 tlii'1 f^'H'ts show that before rock was 1“",I,cd uI,. t it kin rolls 2 4/5 seconds to drop tGn I,Bl' ®0' ' peed, f 182 to 104. Mr. Vnn Kandt states it; as 3 2/5 seconds (D.R., P- 204, Q'4oll)' f nte D shows also that the time required to . the rolls and bring them back 1 ."“xpendRnre after the reduction in speed, duo to P 179 ably greater than the time in which the ic'lnctV: in speed took place, according to Ihe i>i-in.-ill| . slated in the quotation above made from the Ft son pateals (D.I! p. 203, Q. 45a). Usually the crushing work has been practically co.uplew mid the rolls have slowed down to the lowest speed some few pieces of rock will remain, being tossed’ by the rolls until dually they passed through the '‘"US' T'«> acceleration in speed of the rolls begins of course, before these remaining pieces arc cupel ’ and pass through the rolls and in most eases th tlmus "l,c“ •Sl|cli remaining small pieces of rock ace caught and crushed by the rolls are indicate, by small drops in speed of one or both rolls, ns illus- (rated on Complainant's Exhibits, Nos. 23 ami 20 being two of tbe diagrams plotted by Mr. Mason fl 1 1 I its of the tests of the Now Village 10 s: ’I’1'1; t 72 ! p- 1S0; xQ‘ 17 • P- 209, fob 800; . -i i, nil. 813). Of course, such accidents of die . of s"cl' I'emaining small pieces of stone . "fluct tllL‘ Principle stated of the opera- I "ll,nel.7> that there is a very sud- I exI),'iiditiire of kinetic energy and an install- m t, T ? ™m" in spoo<1 of tlle 1-olls oftcn causing o 'Stan ianeoas slip „f the belt on the roll pulleys, s rr,., , f „ "ll "ccelerate the speed of tlie rolls .„r i |LI, la" 1,10 time I" "'bicli the reduction in IhiM lakes ph.ee. Therefore, defendants’ wit- I ' ‘S’ j 0NS,'S' ^'m Zaudt and Newliouse, have nine T-f t J1'"0 °|,L'':,,io" of fl'o Pekin rolls to ..... 'cfuiing to the time when suck . ' "K . . 1 P’ecM of rock wore caught ami • •• ( through the rolls as the time when the ■ b of rock passed out of the roils (D.R., p. 2G3, Q. dun). Prof. Pryor points out that on Record 0 the mark made by Messrs. Van Zandt and New- liouse, indicating that rock passed out of the rolls, was made about 12 time spneos or .12 of a minute too late (C.R., p. 451, Q. 7). In other words, the mark on Curve D, indicating when rock went out of the rolls after the first crushing, should have been practically at the point where the lowest speeds of the rolls are indicated. Complainant’s Exhibit No. 20, being diagram plotted by Mr. Mason from dial charts of Tests B-l and 11-2, when the rolls were crushing two charges of cement rock weighing 7 and 8 tons respectively mul consisting of single pieces weighing from 3 to 5 tons each, shows, ns explained by Mr. M‘is°n (C.R., p. 247), that during the breaking of the lirst charge the regular roll dropped from 2-1 to 184 revolutions while at tiie same time the slug¬ ger roll had dropped from 224 to 140 revolutions, so that there was a difference of 44 revolutions between the relative speeds of the two rolls an. that when breaking the second charge a 1 1 01 mice of 21! revolutions was established between the relative speeds of the two rolls. The dial charts of other tests made by Mr. Ma¬ son show that as a rule when the rolls were break¬ ing large charges of large rock the spec n stagger roll generally fell below the spec. gab l .1 and a 1 rgc difference was established between the relative speeds of the two 10 s. Occasionally when the rolls are aea » ^ charges of large rock the drop in spcci is considerable but the difference tively relative snoods of the two rolls is co p 181 small. Tins is shown by dial charts D-I (n. ojst Therefore, Hr. Mason remarks that ulthonirh large tlilVeren tial in the speeds of the two mil', is usually established when breaking large pieces of rock, in some instances the differential cshl, lished is small (CM!., p. 241), fol. 745). Hence a, pointed out by Mr. Bentley, the selected tests produced by defendants do not cover the entire range of the designed capacity of the Pekin roll hat cover only the action of the rolls during p particular tests selected and produced (Gil , 48J, fol. 1451; p. 401, fol. 1472). ’’ B. Action of I ho rolls when breaking charncsol small rorh. 1 ltecan.se it appeared from an examination of (lie records produced by defendants that small charges of small rock had keen fed to the Pekin roll during the making 0f the tests shown hy the rec oids selected and produced, Mr. Mason concluded f, !'°" d l,u useless to repeat such tests at c i ckm ph'nt, since defendants’ records, when !> operly interpreted, as they have boon hy .Mr. M on and hy Profs. Martin and Pryor, showed ■ the l ekni rolls act precisely like the rolls ,,r,tuil:i 111 »""■ when breaking similar ... ,<)f Sl"al1 rock (supra, pp. 171-173). This tests (ii* h" v* l'Stllllli,sllL'd by dial charts of the Mr \|t lU I'U" VII,,lge ro,l« "mde by Mr. Mason, or r Y T'"' I)10d"ced and explained a number sll °f t(isU of tll(i Village rolls is the t . !,ction of t!|e New Village rolls Iweukfii*'1110 “ ac^on ^Iie Fokin rolls when f ?m< crushing comparatively small Os Jj'(. 1°, 'S,"!lil rock (0.n., p. 259, Q. 42; p. 264, I lie rolls ',., !ll>fai,s th“* ilt Mew Village when fast ii 1111 ' llL sI 'Bm ioll always runs , '"n tl,c ‘^"bii roil; j„st as at rekin the ° ‘ °‘ •soutl1 1,0,1 always runs faster than the slugger or north roll when the rolls are empty. Wlam a charge of rock consisting of small pieces is fed to the rolls, the work done by the slugger roll is far less than the work done by that roll when large pieces of rock are fed to the rolls (C.lt., p. 273, Q. 61). The reason for this is that in such cases the slugger roll is not required to shatter the large rock above the rolls in order to reduce it to pieces of such size that they will fall between the rolls and be subjected to the rolling action of the knobs. The tendency of the belt and of the small pieces of rock passing between the rolls is to eliminate any change established in the relative speeds of the rolls (supra, p. 116). Hence, when small pieces of rock are fed to the rolls, the work done by the two rolls is more nearly equal than when large pieces of rock, are fed to the rolls (C.K., p. 490, fol. 1408; p. 491, fol. 1472; p. 273, fol. 817). For these reasons when a charge of rock con¬ sisting of small pieces only is fed to the Now Village rolls, the slugger roll will at all tunes exceed the regular roll in sliced in many instances (C.lt., p. 265, Q. 55). So, if a very large piece of rock be fed to the rolls, after the slugger roll has done its work of breaking up the large piece of rock into smaller pieces, the normal rela m. speeds of the two rolls will be restored, the slug¬ ger roll catching up to and then passing the reg¬ ular roll in speed and continuing to run as ei than the regular roll, with occasional variations, until finally the high normal speeds of the two rolls are fully restored, the slugger roll runni y the faster (C.R., p. 274, Q. G4). |je_ Referring to Complainant’s Exhibit, ?>o. - » ing a diagram plotted by Mr. Mason from charts of tests JI-l and M-2, when the i i lage rolls were breaking 8 tons of Ox or ^ stone rock consisting of pieces of -smallur, the action of the Pekin rolls i„ the te8,. produced by defendants, as interpreted by Mr .Mason and Profs. .Martin and Pryor, is cleirh' shown (Chit, p. 200, fol. 778). The speed of J, roll constantly changing within small limitations and tlie relative speeds of the two rolls are con stantiy changing within small limitations in arc. ciseiy the manner shown by the charts made bv Profs. Martin and Pryor from defendants’ ltecori C and in precisely the manner indicated by Mr Traphagen’s measurements of successive roll revo¬ lutions upon defendants’ Itocords A, B C a [supra, p. 1-J0) . The action of the rolls is very irregular Al¬ though a large piece of rock usually establishes i. sudden ami large difference in the speeds of the two rolls, nevertheless, as shown in Complain¬ ants Exhibit, Xo. 23, Diagram plotted by Mr. from dial charts of Test IC, when the Xoiv Village rolls were breaking one large piece of ce- "lent rock weighing about T tons, the drop in speed of the two rolls was small and the slugger ./a'1 t!'»" the regular roll at every 1,01,1 of Hum except one, where the speed of the iegu nr roll was hardly one-half of a revolution Siutu than that of the slugger roll. This « “,0 SW;0I1<1 test shown on the diagram. Hut during the first test shown on the same di- •ifciam u hen the New Village rolls were breaking ne large piece of cement rock weighing about S ,1sj io drop in speed of the rolls was very great, ho slugger roll dropping from 222 to 135 and the igulnt .oil dropping from 219 to 145. There won! ii tl10 tCSts of tlle Now Village rolls it 1 ll! ,l 'u,d sniiple matter to select tests in llke tlle tests produced by defendants slinu- o Uf",<;I"Sio" is irresistible, for tlie proofs ’ t mt tIle defendants’ rolls at Pekin arc a Chinese copy of tlie Edison rolls of the patents in suit and operate to break rock by kinetic energy precisely in accordance with the inventions and machines of the patents in suit. Prior Art. Tho Eillaon kinetic method and apparatus of the patents In null nro In a class by themselves. Tho prior art Is devoid of anything that can bo rotorrod to aa imposing any substan¬ tial limitation upon tho scope of the Inventions claimed. Ill pointing out important features of the inven¬ tions of the patents in suit, Mr. Bentley made it clear that tlie prior art contained not tlie remotest bint of Edison’s kinetic method of breaking rock, nor any apparatus capable of carrying out t n method (supra, pp. 17-19). The patents cover, therefore, a pioneer invention. Tlie massive io s rotating at a high rate of speed and accumulating from a small driving power an enormous store or kinetic energy to be expended in breaking vot 111 new. The action of the hammering knobs is no*. Tlie combination of tlie higher sledging knobs vin the lower knobs and the double action of m kinds of knobs are all new. The employment oi tlie small driving power with tlie massive 10 b an entirely new conception. The ““ temiittent feed is new. The independently-d u and disconnected massive rolls having 10 S or irregular surfaces are new. ®e independent massive rolls having roughened or inegi fares in combination with slipping P°" tions are new. The apparatus for breaking io * rock by kinetic energy is new. . neW. imitation and expenditure of kinet ^“j^er slug- Unlike anything in the prior ait, n-innr i,-nnh« nf tlm Edison rolls break rock ana t plisliccl % the Edison method and tlio Edison m pa rains are not only new but stupendous. 'P There is no roek breaking apparatus tlmt comparable with tile Edison machines. They a in a class by themselves. No reference produced by defendants discloses any apparatus capable of doing the work of the Edison machines. Before tl disclosure of Mr. Edison’s inventions no one evt « . . the possibility of accomplishing the gigantic work done by the Edison machines, 'l'lier fore, the prior art is devoid of anything tlmt ca be seriously considered as an anticipation or tin can be referred to as imposing any substantial limitation upon the scope of tiie inventions claimed in the patents. No witness praducod know, or hod over hoard, of nnj- rod hroaklns apparatus la any way similar to or comparabli with tlio Edlsoa giant kinetic rolls. L bat tiie Edison method and apparatus for break¬ ing roek by kinetic energy are sui generis, appears from the fact tlmt there is not in use, and never has been in use, any other method or apparatus for breaking rock that is in any way similar to or comparable with the Edison method and appara¬ tus. witness produced by defendants referred t<> any. On tiie other band practical men, who ,, gl c r M e ce c f 1 tl tic kinds of roek crushing apparatus that have been ''1° nsc> Sll(d| as Mr. Mason, Mr. Knowlton, , Klotz nml Jr>'- Harsh, all testified that they do not know, and have never beard, of nnv stone crushing apparatus in any way similar to or com¬ parable with tiie Edison giant crushing rolls of the Mison patents in suit (C.R., p. 308, Q. 188; p. 62S, ,,Q; P- BOfi, Q. (i; p. 031, Q. 14). Mr. Harsh added that lie bad never known of any similar rolls except defendants’ rolls at Pekin (C.R., p. 031, Qs- In the Patent Office tiie examiner imcnc-u ... Mr. Edison’s apparatus for breaking roek by ki¬ netic energy as “a device of so much practical util¬ ity” (ll.it., p. 575). air. Edison’s attorney pointed out tlmt the underlying idea of Mr. Edison ■- scheme is to handle enormous quantities or rod. or ore at a minimum cost (D.U., p. Bob)- 1,10 ll!1 words, Mr. Edison’s apparatus is a machine ol titanic power capable of receiving, breaking am crushing rack masses of enormous sine taken a redly from tiie quarry. The Edison machine ds i primary rock breaking apparatus. Its work l therefore, entirely different from tiie seconcla y roek breaking machines described in the reference produced by defendants. Tiie only other piimaiJ roek breaking machines tlmt have been in use i the jaw ct ushers and tlio gyratory crusbeis, " “ are of an entirely different construction am 1 crate on an entirely different principle, suite the crush roek not by kinetic energy, but by dm* ■ 1 plication of the power, and they are also in“‘ of receiving, breaking or ernsbi. „ tie c on ■ rock masses imndled by the Edison tp Q Therefore, as tlio evidence sliows, the ltd n| roek at tiie quarry, by means of repea ei I . of drilling and blasting and by continued W b . of the rock by band, until the individual P of roek were small enough to be openings of tiie jaw crushers and fc_Jl t . ,0]Ve, and to lie broken and crushed t ^ llCcord great labor and expense. The C.0111 ■ ’ of t|,, ingly, perceive that the ”',.ont labor an( patents in suit have eliminated l ® gtc(1 nt tin expense necessary to reduce roe . tin 187 In the Patent Office Mr. Edison’s attorney pointed out that with the Edison giant rolls in oper¬ ation it was possible to blow out larger blasts of rock. The blast holes were extended back 10 feet from a 20 foot face and were disposed 12 feet apart, so that tiic cubical contents of eacli ldast was 2100 cubic feet or 20 times tiie cubical contents blasted out in the old operation (D.lt., p. 550). Mr. Edison’s attorney understated the capacity of the rolls. He said, in the patents, that they woidd break single pieces of rock weighing 4 or 5 tons. They have broken rock weighing 17 tons (supra, p. 05). He said that without further blast¬ ing or hand sledging the Edison rolls would handle ruck when blown out at the quarry in blasts of 2400 cubical feet. Mr. Mason shows that the Edison rolls at New Village and at the plant of the U. S. Crashed Stone Company will handle rock, when blown out in blasts of 35,000 cubic feet, nearly 300 times the cubical contents of a blast that could lie handled by the machines of the prior art (C.Ii., p. 350, ltDQs. 3C5-3G7; p. 474, fol. 1422). Mr. Kioto, president of the United States Crushed Stone Company, testified, at the time complainant was taking testimony in support of his primu facie case, that he had been familiar with the breaking of rock for 10 years. Excepting the Edi¬ son rolls, the only other forms of primary rock crushers in use in this country were gyratory crush¬ ers and jaw crushers (C.R., p. 130, Qs. 4-5; p. 135, •xQ. 27). On investigating the Edison giant rolls through experts and finding that the Edison rolls could be successfully operated as against the gyra¬ tory crushers, and, therefore, the jaw crushers, the United States Crushed Stone Company installed, under contract with Mr. Edison, a set of Edison giant crushing rolls, which, however, had not been operated up to that time (O.If., p. 131, Qs- t>-10 ) • 189 lest of the plant, but when the giant rolls were in¬ stalled, tlie reverse proposition was true. The capacity of the giant rolls far exceeded the capac¬ ity of the rest of the plant (C.lt., p. 594, Qs. 4-5). Great saving oftuctod by tho giant rolls. Tho economical possible thoroby. The giant rolls effected a saving of 38 1/3 per tent, or from twelve to fifteen cents a cubic yard of rock broken and crushed (C.lt., p. 595, Qs. 7-8). This saving was due to several causes. A steam shovel cannot be used economically to load rock into ears at the quarry to be fed to a gyratory crusher, even though the gyratory crusher be the largest ever made. Every dipper load handled by the steam shovel would contain a rock that would he too large for the largest gyratory crusher to take, and it is not practicable for the steam shovel to pass the stone to one side to be drilled and blasted afterwards (C.lt., p. 000, ltDQs. 30-44). lienee it 1ms been usual, where gyratory crushers are employed as primary crushers, to employ lab orers in the quarry to pick the stone up by hand and load it into quarry cars at a cost of from ten to fourteen cents per ton us against one and one- half to two cents per ton when large rock is loaded by steam shovels and broken by the giant rolls. Another source of saving amounting to four or live cents a cubic yard is that less dynamite and less drilling and blasting are required in the first blast¬ ing of the rock from the face of the quarry when tlie giant rolls are used, and the further drilling and blasting and hand slcding of the rock after i^ lias been separated from the face of the quarry are eliminated when the giant rolls are used (C.lt., p. 59(i, Q. 10). As far as maintenance and repairs are concerned, the United States Crushed Stone Company had spent so little that it did not igui 191 in tnc cost 01 iirealtlng rock. Breaking 85,000 tons per month, it cost approximately onc-quurler of cent per ton for the running of the rolls and mJ cost was principally power, only one nun I required to operate the rolls (O.R., p. 500 Yn t 28-20) . 1 1 U* So enormous Is tbo product of tho giant rolls that f aro not 20 quarries In tills country that could And a i ,lCu\ei',‘rk,”t/h0r0f0r', ?l0nCO th0 lnfrI"Slng Pekin and trolt rolls Injuro complainant greatly. Mr. Klotz points out timt the capacity of the giant rolls being practically unlimited, except for the .small intervals of time required between t successive breaking operations to enable the rolls sPoed and kinetic cner; (CM., p. 5 JS, xQs. 22-24), there are not more tin 20 quarries m the United States timt are in a no. ion to utilize the JSdison .giant rolls, the reuse being that not more. than 20 quarries are so sit, “ thL‘v eou,d 11,1(1 11 ''«»• or sufficient market Os rTS In'0d,,Ct 0f 11,0 1,0118 (C.R., p. 597, Z- 1„-1|4)'(1 Ir.0,ICB tlle «"«t injury done to Mi Edison by the infringing plants at Pekin and Dc- tln»I|liimt°(*iI!X1'l,l,IIS lllilt tll(i r■ v- Detroit TimuW P U,CV Iv;a-. o24j ir. F. Hrumnier Mfg. ■ '• Hittc Hardware Co. 159 Fed, 720.” In the case at bar there is, as shown, not eveu a nnt of Edison’s kinetic method, nor any descrip- "PPointiis cupuble of carrying out ■ t method. Defendants cannot seriously expect M'1 Co"H ittoinpt, under sneh eircii... ,.r ,. t,,L' Prior art an anticipation he iMlison inventions which have marked the ” . in Mlr,e0 eVeV nmd0 in «'® ™ck breaking 'it,. Slncu -Hr. Dentley has dealt fully ami ai'.'r Produced by defendants since the prior art has been fully distin¬ guished in the foregoing parts of this brief, but brief consideration will be given to such prior patents. Athim piitcn l No. 2Jh7 S3 (D.It, p. 714). This is a mere paper patent, concerning which defend¬ ants have introduced no evidence. It wns dis¬ tinguished in the Patent Ofllcc (D.It, p. 5G4). It shows small rolls geared together, one only of the rolls being driven by the driving power, the other roll being driven secondarily by its gearing con¬ nection with the first roll. There is nothing absolutely in the Adams patent relating to the breaking of rock by kinetic energy, nor could the rolls of the Adams patent by any possibility break rook by kinetic energy. Practically every distinc¬ tion between the inventions of the patents in suit and the prior art heretofore made applies to •be rolls of this Adams patent. Nmcillc patent No. 25,371 (D.U, p. 718). This is another impel- patent concerning which defend- •‘"its have introduced no evidence. It wns disliu- K'lislied in the Patent Olliee (D.It, p. 504). It shows two, vertical cylinders AA between which small pieces of stone are crushed, being continu¬ ously supplied to the vertical cylinders from the oiljacenl; vertical hopper 0. The patent lias not •ho remotest connection with the inventions of the Patents in suit. Onhollx patent. No. 27$}'t (D.R, I* T22). This is another paper patent concerning which defend¬ ants have introduced no evidence. It shows rolls that are geared together provided with the fragile, pointed, cutting tenth of coal breaking apparatus. Tito teeth of the coal breaking machines have been distinguished by Mr. Mason (C.It, P- 311> Q- ■ ' and by Mr. Bentley (C.It, pp. 502-503; p- 511), and •tv Mr. Edison’s attorney in the Patent Office ( ■ •> P- ISO, fol. 1-139). Such teeth are incapable of dc- 200 201 liv(,l'i"« ,,ll! oppoHitel.y directed 1 ai i L g n0 , of the knobs of the Edison rolls. The larger teeth 0, which alternate with the smaller teeth D nicrelv “curry the coal dommird,” ns stated in the patent (line 41), and then, by reason of the co-incident movement of the two rolls secured through the Hear wheels, the larger and smaller teeth, inter- mesh in,,, *pUt and separate the coal on the principle of a chisel (C.It,, p. 311, Q. 200). As explained • b'nholt* in his subsequent patent, No. 48^ ("I fra), the larger teeth O perform “the duty'of drawing m the lumps which the small teeth had failed to grasp” and the shape of the teeth is such that they “split (the coal) and clear their way as they traverse cthjc first.” Such teeth of the coal sp itting machines deliver no hammering blows, >at act upon soft material, pinching the coal and l ms separating it l.y a cutting and splitting action. I'm teeth are so fragile that they could not bean. "'lU 11 ’in- ding to deliver I iiiuncring •lei's upon hard rock masses (C.R., p. 503, fol. m * i11'/’1 ful- ]531) ' Patent has no bear- "'aa'aver upon the Edison inventions. Oanwer potent No. 40,46, (D.R., p. 72(5). This ,1 ' ' ‘ 1 ,U 1 ,tL,,t ^"corning which defend, liave introduced no evidence. It shows a jaw ier and has no relevancy whatever to the hive,,- '‘mis of the patents in suit. P"lc'" Ar°- JtSm (D.H., p. 730). This v h mVS, 1',’IIS SL‘ai'ud together and provided There nr ? °f Ule COil1 ^Making apparatus. ' ‘ "° 1,(l"'s of larger teeth upon each roll whirl, f,0' r0n" “tlle (luty of drawing in the lumps "S, V"U1 tuut" "ad failed to grasp.” It is (the rn n l. 734). This patent shows small rolls geared together in the usual manner, one roll only being driven by the driving power and the other roll being driven sec¬ ondarily by its gearing connection with the first mil. The small rolls of the Dickson patent arc provided with the usual sharp and fragile teeth of coal splitting apparatus. The patent has no bear¬ ing on the inventions of the Edison patents. None of the characteristic features of the Edison inven¬ tions above described (supra, p. 15) are set forth in this Dickson patent. Mr. Carter’s argument, based upon the Dickson patent, is answered by Mr. Heat ley (C.It., p. 503), and Mr. Mason, ns well as Mr. Huntley, has pointed out the difference be¬ tween the hammering knobs of the Edison rolls and the fragile, chisel-like teeth of the coal crushers (ft.lt., p. 31.1, Qs. 1!)8-200 ; pp. 502-503; p. 4S0, fol. 1430; p. 510, Q. 8). Mat : patent No. 200,104 (D.Tt., P- 738). This patent was distinguished in the Patent Office by Mr. Edison's attorney in the passages above quote" from his arguments (supra, pp. 20, 81). The Stilt/ pii tout shows rolls geared together driven in ' usual manner. It lias no hearing upon the n.ven- l ious of the Edison patents and has be s guished by Mr. Bentley (O.R., P- ‘*77; P- “ > 1142; ]i. 471; p. 503). m, ,jS llovis patent No. 2.72,7//3 (D.R-, P- •**)■ ™ patent shows a coal or coke breaker provided air lllc l»0"'er, the other roll being caused lo revolve by the coal or coke passing between the two rolls, Dor the reasons already stated, the Davis patent is entirely irrelevant, as shown hr Mr. Mentloy ( CM!., p. 502; and see p. 311 Os ins 200; ]i. -ISO, fol. 1,139). Smootli-fnced CornlBh Holla. 1I7W pa I ail Xo. 315,533 (D.R., p. 750). This pahuit shows ordinary, smooth-faced, Cornish rolls (distinguished, C.R., p. 4!)0). Kmm palail Xn. 33!), (HU, (D.R., p, 7oS1 nlsn shows small, smooth-faced Cornish rolls (,ijS|j,. flushed, O.It., p. 40!)). llrmlfml palail X o. 350,1,05 (D.R., p. 70(1) also shows smooth-faced Cornish rolls (distinguished, O.It., p. 400). ’ C/mw/o Iron Work .9 Catalogue (olTei'ed D.It., p, •t.lu) also shows smooth-faced Cornish rolls when- cvewaheh.drive is employed (distinguished, C.K., Hngiurering Descriptions of Crushing Halls (P. ,?’* sll°"' (,K! smooth-faced, Cornish mils " , l,! K|,,MI1 pa I cut (distinguished, C.R., p. 500). 0II'^ICIIC^ surfaces, they were in- 1 '/ together and driven in the usual 203 manner above described (supra, p. 31). In some cases the smooth-faced Cornish rolls were belt- driven, 1ml if provided with teeth or roughened sur¬ faces they were geared together (C.It., p. 501, fol. 1503; p. 30!), Q. 100; D.R., p. 480; p. 375, Q. 21; p. 3711, Q. 25; p. 433, xQ. 32; p. 433, photographs of i'lijiin Iron Works crushing rolls). The Cornish rolls described by defendants’ wit¬ nesses, Messrs. Hlanding and Holtlmll', were smooth¬ faced whenever a belt-drive was employed (D.lt. p. 433, xQ. 32; p. 374, Q. 20). When provided with tenth “for crushing coal or other soft mater¬ ial” they were geared together according to the uniform practice of the prior art (D.lt. p. 37(1, Q- 25). They were of the same small size ail'd weight and ran at the same low speed as the smooth-faced furnish rolls described in Engineering and here- idler considered (D.R., p. 374, Qs. 17-20; p. 430, Qs. 13-14; p. 434, xQs. 34-35; infra, pp. 200-207). An inspection of the patents, publications a,.,! other references and exhibits produced by defend¬ ants will show that in the prior art there was no instance of rock breaking or crushing rolls driven l>!) a belt and provided- with roughened or irregular surfaces. In every case, where, in the prior art, ruck crushing rolls were provided with roughened surfaces of any kind, such as the picker teeth of Hie coal breaking apparatus, the rolls were geared together, except when, as in the Davis patent, only one roll was driven by the motive power and the oilier roll was driven by the coal or coke passing between the rolls. Mr. Rentlcy states the matter »* follows (C.It., p. 501; p. 540);— “Mr. Carter points out that these (Cm'insh) rolls are also provided with teeth mid the e upon points to similar rolls used for c » coal with sharp pointed pointed picks or teeth lire geared together hy toothed yeai-iny (except when only one of the two rails is driven) which demonstrates at once their lack or pertinency to the matter of the Edison invention, since such gear teeth eliminate tlie possibility of the independently driven mnl disconnected features of Edison” (p, 50I) “As to the idea that the question is simply a matter of degree necessarily within the jiide- incut and choice of the mechanic, it should l«. remembered that crushers with cylindrical rolls such as the so-called Cornish rolls wet understood to lie only capable of use as n'ccoml- erg crushers or for small rock, while for large rock resort was had to jaw crushers and gym tor.v crushers. Hence there was nothing in the prior art to suggest the enlargement of he Cornish rolls for the primary crushing of large rock and still less anything to suggest tlie introduction into such enlarged uuicMne of the kinetic principles. On the contrary tlie f urnish rolls when belt-driven were generally used for line, pulverizing work with smootii surfaces ami when the surfaces were not smooth, they were merely provided with picker teeth for disintegrating material like coal ur coke, ami in hen so provided with TUirni, WERE xo i.oxuHii iiiir.T-nmvK.N hut oraiikii toiiotiirii. I liorcforo, I do not agree with Jlr. Carter that the comparison involves merely the matter of dimensions and that such matter of dimensions or size is immaterial'’ (p. 540). " W!IJ 's considered that, as above explained (sapm, ji. “I! ) , the Edison giant rolls of tlie patents m suit, break the rock above the rolls hy means of the hammering blows of the higher sledging knobs, mm that hy reason of such action only is it pos- si 1 e to break large rock masses and reduce them 205 lower or regular knobs mid be subjected to the roll¬ ing action thereof and pass through the rolls, it liecouies clear that there existed nothing in the prior art suggesting even in the remotest way the action or construction of the giant rolls of the pat¬ ents in suit. The results accomplished by the giant rolls hnd never been contemplated in the prior art ns being within the range of possibility. And how impos¬ sible would it bo to accomplish such results, break¬ ing such large rock masses above the rolls, by smooth-faced Cornish rolls, even if the size of the Cornish rolls were enlarged so as to bo many times (lie size of the Cornish roils of the prior art The Edison, kinetic, giant rolls will break and crush more then 250 times as many tons ot largo rock as the Cornish rolls could grind of very small rock. Tlie smooth-faced Cornish rolls were capable of grinding and pulverizing in 24 hours from 50 to 150 tons of very small stone primarily broken by a jaw crusher and thereby reduced to pieces about an inch in diameter before being fed to the Cornish mils (D.R., pp. 659, 661, 66T; p. 518, xQ. 29). The Edison kinetic, giant rolls are capable of breaking and crashing at the rate of from 12,000 to 15,000 Ions, of rock in 10 hours (C.R. p. H34, Q- 35), in¬ cluding pieces of rock weighing 10, 14 and 17 tons cadi as blasted at the quarry {supra, pp. 65, 187). could have been stored In the largest Cornish rolls of the Prior art revolving nt their highest speed. For this reason “lone, as well as hoenuBe of tholr inadequate construction, the Cornish and all other rolls of the prior art were In- capable of breaking rock by kinetic energy. Tlie Cornish rolls were not massive rolls. Nor did they revolve at high speed. They could not, therefore, accumulate kinetic energy sufficient to 20li 207 break large rock musses. ■ Nor is there to lie r«iiunl in imy description of the Cornish or other mils of the prior art the remotest hint of the utilization of kinetic energy in the breaking of rock. As shown by Mr. Bentley and heretofore stated I>. IS), in (lie prior art Micro was neither I he remotest hint of Edison's kinetic inetliod of breaking rock nor any apparatus capable of curry¬ ing out that method. A comparison of the Edison giant kinetic roils with the Cornish rolls of tlie prior art will show how true this statement is. . - mu iiirgesi size mid highest speed of the Cornisli rolls of the prior art. mentioned in the references produced by de¬ fendants. Mr. Carter, referring to the articles in Engineering for Nov. 18, and Nov. 20, 1885 (D.Ii,, PP. (108), which describe. the typical Cornisli rolls of the Krom patent (D.If., p. 758), points out Hint of the three sizes mentioned the largest was 80 indies iii diameter and 10 inches long ( D.II., p. 455; p. 05!)). With regard to the speed of these small rolls, Mr. Carter quotes a passage from the articles showing Hint the highest speed mentioned is from SO to 100 revolutions1 if' minute, which speed, it is said, is “entirely impracticable with gear (il.lt., p. -1 5f! ; p. 001). It is stated in the articles that the two rolls with their shafts weighed MOO pounds, which means that eacli roll with its shaft weighed 1.0 tons. The circumference of a Cornisli roll having a diameter of 30 inches is 7.85 feet, devolving at 100 revolutions. per minute, the surface speed is 785 feet. Each giant kinetic roil of the patents in suit Is ' 'eel in diameter, lias a circumference of 18.85 wt, it surface speed of 4000 feet per mlniite and weighs 3S tons with its shaft. nnd.withont its pulley wdueh weighs over 3 tons in addition (supra, p. The statement of defendants’ brief (pp. 87-88) that the Cornisli rolls described in the articles in Engineering weighed 18,010 pounds and the ro¬ tating parts weighed 9,000 pounds is misleading. N'o clear reference to the record is made in support if. the statement. The entire mnchinc, including the frame or pillow blocks, bed plate, etc., weighed 18,010 pounds (D.R., p. 059). On this basis de¬ fendants’ Pekin giant rolls machine, like other Edi- i cl cs, weighs 300,000 pounds (O.Ii. p. 27, (}. 75; p. GO, Q. 12). The two Cornish rolls with their shafts weighed 0400 pounds (D.R., p. 059). Hence, each Cornish roll with its shaft weighed I.S tons as against 38 or Jfi tons for each giant roll toilh its shaft (O.K., p. 129, RDQ. 172; supra, p. 07). The kinetic energy of a body in motion equals one-half the product of its mass multiplied by the square of its velocity (supra, p. 08). By well- known arithmetical computation, the kinetic en¬ ergy of the two giant rolls of the patents in suit is more than 285 times the kinetic energy that could have been developed in the largest Cornish rolls of tlie prior art, had it ever occurred to any one before the date of the Edison inventions to attempt to break rock by kinetic energy instead of by tlie direct application of tlie power. Mr. Mason 1ms proved that in the breaking o rock, as shown by one of the tests produced by him, the kinetic energy expended by the two rol s amounted to 1,390,000 foot-pounds, so that tlie kinetic energy of the rolls, which amounted to 2,320,000 foot-pounds before crushing, fell t° • > 900 foot-pounds by ^reason of tlie crushing ("“P”1' PP- 79-80). Therefore, aliont 3/5 of tlie kinetic energy of the rolls was expended in breaking an ■ crushing the rock. Had the kinetic energy or ti - mils boon equal only to that of tlie largest .mnis i 20S rolls of the prior urt, It would have been 1/285 of 2,320,000 foot-pounds or ubout 8100 foot-pounds and 8100 foot-pounds is less than the 1/170 part of the kinetic energy expended by the giant rolls in breaking the rock. How preposterous, therefore it is to spoil k of the possibility of the Cornish, or any other rolls of the prior art, breaking rock by kinetic energy. The formula for the calculation of the kinetic energy of n revolving body arc given in Kent’s Mechanical Engineer’s Pocket Hook and (lie calculations above given have been made by Mi*. Mason for complainant’s counsel. Tho Btunemlous results obtained by the Edison kinetic- Blunt rollB point to their fundamentally now construction nnd method of operation and render It an Idle task to look to the prior art for any such construction or method. The foregoing explanation of the tremendous power and unprecedented effect of the Edison giant rolls shows how marvellous was the step taken by Mr. Edison and of wlmt a pioneer character bis achievement was. When we come to the considera¬ tion of the years of toll and millions of dollars ex¬ pended by Mr. Edison in the making of the inven¬ tions of ilte patents in suit, the Court will under¬ stood from the foregoing explanation of the striking dillereiicc between the Edison giant kinetic rolls and the rolls of tho prior urt, why it was tlmt h Was tint until after .veai-s of experiment that Mr. Edison was able In produce or operate a machine which Would periodically store np mid expend the enormous amount of kinetic -energy necessary to weak and crush large reck masses. It was the ac¬ cidental speeding up of the rolls, together with the odoptiot, of the higher slugging knobs, that de- re oped in the rolls the necessary, enormous amount of kinetic energy, and enabled the slugging knol* to weak the rock above the rolls and the lower I knobs then to force the rock thus minced to piece* 20!) of small si/.o llinnigh Hie rolls (L'.lf., p. HTIi, xQs. 2011-210). It is idle to look to the prior art for any .such method or apparatus. Nor are the Edison kinetic, giant rolls, with their hammering knobs nf different heights, their belt-drive, their small driving power, their high speed and great mass, nail their other distinguishing features, merely on- hirgemeiifs of the rolls of the prior art. Tho Cornish ami all other rolls of tho prior nrl wore tlrlyci) by s power sufllciont to grind tho rock by tho dtroct applica¬ tion of tho powor. It was tho bolt nnd gears tlmt did tho work. Klnollo onorgy and tho klnotto method wore in no way involved. hike all other rolls of the prior art, the Cornish roils were driven by a power sufficient to break tho rock by direct application of the power. Defend¬ ants' wilness, Mr. Wnll, who devised Cornish rolls having intermeshing corrugations driven by Hears, as shown' in his patent No. 332,i)7S (D.K., p. 754), Iml who states that on one occasion he saw Ids inlermcshing Cornish rolls being driven by a hell instead of by gears (D.R., p. 509, Qs. S-10), lestiflwl tlmt. in such rolls (D.R., p. 514, Q. 21) “it is not the weight of the body which does Hie crushing lint the applied force produces the effect.” Mr. Mason points out tlmt it is very evident from Mr. Wall's description that the Wall rolls, like all mils of the prior art, operated entirely by the power supplied to them and not at all by kinetic energy. The power supplied to them was sufflcl- <'»t l'» crush the rock by the direct application of Hie power (C.R., p. 743, Qs. 4-G). Defendants' witness,. .Mr. Blnnding, testified that in the operation of the Cornish roils of the prior nrl, kinetic enenju was in no wap invoiced (D.H., P- 431, Q. 19). For the reasons stated, kinetic on- n,,R.v could not. lie involved. Nor is llmre t,ll! prior net any hint of the utilization of kinetic cn «rgy in breaking rock. Therefore, the Corubli rolls, like oil otlHir rolls of the prior art, broke rock by tiireci application of the power. Edison’s intermittent feed was foreign to the Cornish and nil other rolls of tho prior nrt. Defendants' witness, Mr. EToltlioir, in describing Hie Cornish rolls of the prior nrt, testiiied that the “ns nearly ns possible a continuous slrcnni of ore into the rolls” (D.U., p, 373, q. 15), If the feed of rook to tho Cornish rolls was too heavy, they would choke and stop, the belt of the smooth-faced, Cornish rolls slipping 011 the pul¬ leys (JJ.lt., p. -132, Q. 21; p. 373, Qs, 15-10). Neither Mr. Dlunding nor Mr. HoltliofI could testify that la the prior art there was ever 11 con- kcwiix attempt made to feed rock intermitlenlhj lo min crashing rolls. In trying to spell out ini intermittent feed and operation by’ kinetic energy Irnm .Mr. I’luiiding’s testimony, defendants’ coun¬ sel omit (brief, p. 03) his answer to Q. 19, in which lie said kinetic energy was in no way involved in lie operation of Cornish rolls. The feed of rock to (lie Cornish rolls and to all scrilioil in the passages quoted from Defendants’ Uxhibil, Articles in Engineering for Nov. 13 and Xov. 20, 1SS5, by Air. Carter (D.lt., p. -191, xQ. 23). It is said (pp. -192, 957) that a feed box was “ar¬ ranged with a series of inclines so as to spread the ore in a mu tin nous and even sheet between the surface of the rolls”. It is also said (pp. 493, 093) “I lie action of the rolls is coatimioas.” It is also said (pp. 493, 991) that “when ore is btipvrni 1 lie rolls a single driven roll will cause the oilier to revolve”, showing that where, in some eases, the principal part of the power, or the whole power, was employed to drive only one of the rolls, reliance was had upon the continuous feed and upon the continuous notion described to cause the second roll to revolve, ns in the Davis patent above considered. The articles in Engineering show the continuous feed to, and the continuous action of, the Cornish rolls in the clearest possible manner by the calcula¬ tion made of the capacity of the rolls, compared with the capacity of stamp mills. It is said (D.lt, I>. 991), in effect, that the surfaces of the rolls arc in contact, and acting upon the ore or rock at every instant of time. The idea of an intermittent feed was foreign to the prior art. Mr. Mason and Mr. Bentley show that the feed "f the so-called Cornish rolls and the action thereof is eoiitimmus and not periodic or intermittent ( * ■> he so-called Cornish rolls and the action thereof is 'oiitimious and not periodic or intermittent ( j. ■> 1. 309, Q. 102) ; p. 499, fol. 1497 ; p. !>00, fnl. 1498). Utllsnii's periodic nccumulntlon nnd oxpendlt 0 °j k won foreign to tho Cornish nnd nil other rolls of tho >rlor nrt. Tho external fly-wheels of tho prior nr ■toyed merely to secure uniformity of movement. Tito idea of breaking rock by the periodic no simulation and expenditure of kinetic encr„. jested. J n the articles m Engineering there ii dement (D.K., p. (1(13) ; — "Tlie action or the rolls is coil tin nous. 1’hei have nothing: to do and do nothing bat em-li the ore which falls between then | uni/ instant of time there is no on., the point expended b.y the machine is stored tip in the fly- wheats." ’• 1 Sen l ley explains (supra, p. 15) that Edison not pat tlie massive weight in an external fly. !. hat lie put it, into tlie rolls themselves.” I*<*int was made in the patent olliee by Mr. mi’s attorney Who added (supra, p. 30);- “lt would be impossible, in the first place, La employ a fly-wheel as a device for storing up energy in a crushing roil such ns applicant 1 escribes, because if the fly-wheel were made large enough for the purpose no shaft could lie constructed to withstand the strains to "’hi cl i it would he subjected, nor could any hearings lie built to receive them.” "'cover, as Mr. Edison’s attorney explained P- 30) n fly-wheel “is used simnlu to secure whether stored in the fly-wheels or in the Cornish rolls themselves, is so insignificant ns to bo incap¬ able of breaking rock, especially such rock masses as are broken by the Ellison kinetic, giant rolls. The Cornish rolls broke rock by the direct applica¬ tion of the power only, the full potoer of the engine licmi/ expended at all times. No one, other than Mr. Ellison, ever contemplated the possibility of breaking large rock masses by any machine or con¬ ceived of the breaking of rock by rolls periodically accumulating and expending kinetic energy. The fty-wheeis of the Cornish rolls merely stored up energy to secure uniformity of movement, as is the ease with all fly-wheels. lienee, the prior art is devoid of even the remotest hint of hldison’s kinetic method of cracking rock masses (supra, p. 18). Tlie Cornish and all other rolls of tho prior art wore sec¬ ondary or tertiary crushers employed to pulverise or grind very small pieces of rock or to split coat or like soft material. The Cornish rolls, moreover, were not primary, hut secondary, crushers. Defendants’ witness, Mr. Wall, testifies that liis intcrmesliing, belt-driven, •.’owiish roils were set so that the distance between I he nearest points on the surfaces of tlie intermesh- mg corrugations was about 1/2 an inch and that tlie largest material fed to the rolls was an inch or mi inch and a quarter in diameter (D.B., P- 518, x(3- 2!M. Compare this with rocks weighing li ••ms eiicli broken by the Edison giant rolls. Tlie practice was, as stated by Mr. Wall, first t0 cnish the rock in a jaw crusher, then to pass it through a pair of Cornish rolls and then to pass it throng i Wall’s rolls. So that. Wall’s rolls were a tertiary crusher. The Cornish rolls were secondary crushers cm ployed for pulverizing small pieces of rock or me having an extreme diameter generally of uhoii . I '/< inches. Mr. Carter says they were not used the rolls from "'"'.V crushing (D.H., p. -154, Q. to), anil Ir. Jliison and air. Bentley (C.U., p. aoi) ■1113; p. 41)7). Defendants’ witness, Mr! ', testified that the Cornish rolls of the •t were set with their faces running, to- >r a fraction of an inch apart, although seen them set from 2 to 4 inches apart 377, Q. 2!)). When he saw them so sot appear. ''tides in Engineering state that Cornish • always arranged in sets of two, one of reives the coarse ore from the jaw crusher other of which receives such of the prod- Hi" first as will pass through a sri'ecn . (ioil). irlor art tlio driving uowor wns In all cases sulll- tart the Cornish and all otlior rolla from n state Defendants' witness, Mr. Nowliousc, know of no tlio prior art whore tlio power connection vu . to start tile crusher. i case of the Cornish and all other rolls I’rior art, the power employed wns, of niflicient to start the rolls from a state since it was saflicieiit to break the rock ireet application of the power. Mr. Now- ill that he knew of no case of a crusher in power connection was iiisnlllcient to crusher (D.I{., p. 211, Q. 20). Mr. Holt- crihing the Cornish rolls, states that so I""1 remember, the belts were intomleil mit snllieient power to start the rolls fate of rest (D.B., p. 37(1, Q. 24). Tlie 'miiiji rolls so massive mid u power so ill I lie power mil Id not start the rolls lule of rest, was entirely foreign to II ic (D.K., p. 370, Q. 24). 'There is no hint the references produced by defendants Hint it cnuhl not star state of Wall potent. Xo. 332,1)78 (D-R-, 1'- 77,4) shows l 'am ish rolls. Not only are the rolls driven by He nrs in the: nsinil nutnner, but tlie rolls them- selves form n | i of 0 us I ui „ 1 1 »' M with iiiterineshing corrngations. Tliese Wall rolls are to lie ilistingaished for the reasons above set forth. They are further distinguished by Mr. .Mallory ami' Mr. Mason (C.U., pp. 733 and 742). Von: patent Xo. 327 ^ll (D.Ji., 1>- 774) shows rolls driven by gears la the usual manner and provided with the picker tenth of tire coal split¬ ting apparatus. These rolls were distinguished in the Patent OfTIce, ns above shown (supra, pp. 33, 31) and are o lie distinguished nlso for tlio reasons here given with regard to the prior art. Defendants introduced no testimony with regard to this Goxe Kilisim paleiU Xo. 5117,187 (D.B, P- 780) was 1 st g si cd ill tlie Patent Office, ns above shown (supra, pp. 25, 29). It contains no disclosure whatever of the inventions of the patents in sm and lias been distinguished by Mr. Bentley (G-J‘-> I'l'. 172, 478, 500 ; 527, xQs. 03-05). The file wrapper and contents of j- . eat Xo. 5117,187 (D.B., 007). This exhibit is no evidence (D.R., p. 529; C-T7-, P- 733, K>‘- - it contains nothing, however, hearing »P°" inventions of tlie patents in suit. On 'c fary, it relates solely to the interposition or -ft, lining between the mi, face o the man Orel of a crushing roll and the ,'’c" Kl tlie As hereinafter shown, when dealing mljt making of the inventions or the I"'0" d 0„(ra, p..204),:tbc use.of.a "'any of the troubles that stood in the ' - making of tlie inventions of the paten - •'ulur imlv.nl Ao. mm (D.lt., p. 781) , distinguished in the Patent Oflico dm above shown (supra, pp. 31, 29). It shows the usual ci splitting rolls driven by gears In the usual «« . M'*r and provided with the picker teeth of the coal splitting apparatus. The Culver patent. Is to he distinguished also for the reasons here set forth and Ims been further distinguished l»y Mr. Kent- le.v ((Ml., p. -172; p. 478, fol. 1484 ; p. 481, fol. III-). Defendants introduced no evidence relat¬ ing to this Culver patent. Srliivlv British patent Xo. JftS of JSliO (D,I|,, p. (128) is entirely irrelevant Defendants intro¬ duced no evidence concerning it. It is to be dl., tinguishnd for all the reasons here set forth. It is a mere paper patent that has made no contribu¬ tion to the rock breaking art. It shows (Figs, 5 and (I) an impractical apparatus, consisting of a small swinging hammer and a stationary anvil, for pulverizing very small pieces of stone. It docs not show massive bodies or rolls moving toward each other or hammering knobs of different heights or any of the other features of the Edison inventions. Ilihbiuutnn British patent Xo. 27011 of Ml (D.II., p. (138 ) is a more paper patent and shows incomplete sketches of crushing apparatus. De¬ fendants have introduced no evidence to s (lint any machine was ever made under it or that •un machine made in accordance with it would operate successfully. This remark applies to most of the prior patents produced by defend¬ ants, which for this reason, as well as for the 1 'masons stated, cannot be taken into con¬ sideration in dealing with the successful, priic- ica I inventions or the patents in suit (Kiiips Go. vs. Vuileil Site ten On., 182 Fed. 59, O.C.A., cited and quoted supra, p. 197). Mr. Bentley hits pointed out that the Bibbington patent is entirely irrelevant, is not intelligible and makes no dis¬ closure bearing on the inventions of the patents in suit ((.Mi., pp. 505-50(1 ) . As stated by Mr. llcntle.v, the rolls were provided with intermesh- ing corrugations, like Wall’s rolls, and this fact, together with the statements of the patent, indi¬ cate that the rolls were geared together. I-iko all other crushing and grinding rolls of the prior art, use, if it was ever used, wns necessarily that of w iiilan/ rock crushing apparatus receiving, like Wall’s rolls, very small pieces of rock, about one inch in diameter, broken primarily bj a jaw crusher. Any larger rock would ride tlm rolls, there being no provision for breaking large rock above the rolls, an operation never effected by nny ns except the slugger knobs of the Edison ki¬ netic, giant rolls. Si owe British patent Xo. OlJfi of JSS~> (D.Tb, P- (40) shows small rolls geared together and driven in the usual inannur of geared rolls and proya « with the sharp pointed teeth. It is distinguished because of the reasons here stated and l..-s b---- ilisluiguislied by Mr. Bentley (O.B., p. 505). - i(- all other grinding rolls of the prior art provided with sharp teeth or surfaces not smooth, Stowes rolls are “connected together for co-incident move ment by internioshing gear-wheels” (cf. Pntents " D»xe, explained supra, p. 35). They were nc snrily used ns seconder, 1/ crushers, receiving veiy small stone primarily broken by a jaw crus iier, for (he reasons given in connection with the ’ Miiglon British patent (supra) and witi rolls and the deposition of Mr. Wall (W>«l- explained by Mr. Edison’s attorney (supra. 1 • > when distinguishing the Bt..t> patent in the patent "dice, the lly-whccl of the Stowe rolls was no lied upon to develop kinetic oncig} an j the continuous grinding hut was ..s-1 s secure uniformity of movement of the two sets of gear-connected rolls, as is the case with all fly Jeffrey Oalahync (offered D.I?., p. .11)5) is snli. sequent in (lute to file inventions of the patents hv innii.v .veers. Its (into is 111.10 (0.1?., p. .J!)0, XQ. igj. It shows coni breaking apparatus provided witli frjiyilo picker teeth of (lie present day. The rolls nre gen red together. Mr. Bentley states tlmt the Jeffrey Catalogue confirms Ids statement tlmt no "Well ine having its rolls geared together would lie capable of practicing Edison’s kinetic method of breaking rock and that the pointed teeth would be incapable of delivering hammer blows upon hard rock, such as are involved in the kinetic action of the Edison rolls (C.H., p. 504). Wall's Hulls anil the Deposition of Mr. Wall. Wall’s rolls were Cornish rolls provided with inter- meshing corrugations so tlmt the rolls tlicmscka formed a pair of years. As shown in the Wall patent, they were geared together and driven in dm usual manner of geared rolls (D.I!., p. 754). As shown above, when dealing with the Wall patent (supra, p. 213), Wall’s rolls were used as a tertiary crusher, the rock fed to them never exceeding an 111,11 1,1 1111:11 ‘"id » quarter in diameter. They «ere set so that the corrugations, illustrated in fie- [‘‘"‘hulls’ Exhibit Model of Wall's crushing rolls, intoi nieshi d, dm* space between the surfaces of the corrugations being only y, inch (D.I?., p. 518, xQ- -!>). "all’s rolls were pulverizing rolls. They ’ . iovtf, .>mi,|| rolls, the model thereof their actual size (D.R., oil), Qs. 12- i’i’VL* inches in diameter with a 18 j Hell face. r weighed less than % of n each (D.R., p. 5io, Q. 27). ,. Asu:‘l . sh°wn, rock was continuously fed to ie Wall rolls and they broke rock by the direct implication of the power. In nil cases the Wall rolls were geared together (D.R., p. 52(1, RXQ. 52), except that in one instance only Mr. Wall witnessed on one occasion only (D.R., p. 500, Qs. 8-10) the driving of his intermeshing rolls by belts instead of gears, hut the rolls themselves formed a pair of gears by reason of their intermeshing corrugations and one roll acted to drive the other roll by reason thereof (D.R., p. 520, xQ. 33) when rock was in the rolls and when the corrugations, which were only y., of an inch apart, touched each other. The driving of Wall’s rolls by means of a belt was an ahamloned experiment. Nothing came of it and, as stated by Mr. Wall, his -rolls have been dis¬ carded, none being in use today (D.R., p. 521, xQ. 37). Mr. Wall stated that the space between the inter- meshing corrugations of his rolls when licit driven in the one instance referred to was Vc an me i (D.I!., p. 51S, xQ. 20), and when geared t.-sclhc1 the space was usually % of an inch and nevei ex reeded an inch and n quarter (D.R., P- 5-4, * b Hi). Therefore, even n rock of dimensions as small as 10 or 12 inches, could not he lirokeu Wall’s rolls, but would ride upon the *°PS °[ '' rolls (D.I!., p. 521, xQ. 38). Mr. W« ." » id"» « that ir the space between the two rolls m increased snlliciently to allow the rock to set le - tween the opposing corrugations, the rolls voui > lie wrecked, at least through the breaking ■ shafts (D.I?., p. 521, xQs. 3S-30). Clearly there is nothing in the Wall rolls hem upon the inventions of the patents m 81 Wall’s deposition was taken in surrelmtta by do fondants, under leave obtained by mo i°n, , The making of the motion was nil admission nf the correctness of Mr. Bentley’s statement. Mr. ^Vail’s deposition con Arms Mr. Bentley’s statement, for the Will I rolls in every instance, except on one oc¬ casion, an nlmndoned experiment, were driven by gears and the Wall rolls themselves constituted ii pair of gears, one roll driving the other through tlie intermeshing corrugations, just ns one gear-wheel drives another gear-wheel through tliu interim* ing corrugations of the gear-wheels. Mr. Mason lias shown, furthermore, that the sur¬ faces of Wail’s corrugated rolls are not to lie re¬ garded as roughened surfaces, hut as smooth sur¬ faces in (lie crushing of rock (C.B., p. 7-lt, (}, 10). According In Mr. Wall’s testimony very small stone was fed to the rolls mid this stone would drop into tin: corrngnlions and lie pinched by the correspond¬ ing corrugations ns the rolls revolved. Therefore, Mr. Mason says (lint the action of the Wall rolls resembled that of smooth lulls and not Hint of rolls with roughened or irregular surfaces. The comigulions were not used for the purpose of grip¬ ping or pulling (he stone into the rolls, hut solely for (he imrpo.se of pinching and crushing the shine between them. Therefore, the Wall rolls have no more hearing upon the action of the hammering kuolis of the Edison kinetic roils than bare the smooth surfaces of the Cornish rolls. It follows from wind lias hcetl said that (lie Edison inveii- tmi,n „f ||,e patents in suit are as broad ns the statement of .Mi-, Bentley, tlmt (lie prior art the* not itch slum i hi v.mmpio of rottr/briietl rolls tlriren by ti boll, nor even a single example of a rock- crushing roll with hammering knobs ( C.I!., p. HOS, fol. 1523; p. d!)3, fol. 1178; D.R., p. 502). Mi. Mallory testified that after using Wall's geared rolls in experimental way, they wor signed to the scrap pile. Afterwards they were resurrected for nil experiment at Edison, X. J., to which place they laid been brought from Bechtels- villc, lhi., after having been discarded at the hitter place. The experiment consisted in so changing Ihe rolls as to drive them by belts and of increasing the space between the corrugations to about C inches. It was then atteippted to break rock of 8 to !l inch cubes, hut these would ride oil the top of the rolls (C.H., p. 733, Q. 3). Only a very few pieces of ore were fed to the rolls, from half a dozen to a dozen pieces, the feed being done by hand fd.lt., p. 742, RDQ. 40). It was attempted to make these 8 or 0 inch pieces go through the rolls by poking them with a bar, without success (C.lt., ]i. 742, itDQ. 40). It was then suggested Hint the effect of dropping a piece of rock from a height might give it a velocity which would help ' it to pass through the rolls. There¬ fore, a 15 inch cube of rock was dropped upon Ihe Wall rolls mid the Wall rolls were thereupon wrecked, the shafts being bent, the bearings broken. Mid the driving belts coming off (C.K., P- 733, Q- |i- 7-12, ItDQ. 40). Wall’s rolls were thereupon re¬ lumed to the scrap pile and were subsequently sold is scrap (C.lt., p. 733, Q. 3). After these experi¬ ments, made in 1892 at Edison, X. J., with the Wn 'oils, by Mr. Mallory, under the direction of Mi. Uilison, it. took Mr. Edison many years before lie was able to make, at great expense, the inventions 'f the patents in suit. Wall’s rolls made no contri- mtion to the art. Their impracticability and ir- 'clevaney are fully shown by Mr. Mallory ami Mi- Mason in their depositions relating thereto ( • •P- 733, 742). Defendants’ unfounded conten hat the disastrous experiment with the a Ml to the designing and installing of 10 . limit rolls is the grasping at a straw in a P UliHhorpe cG Scoville patent No. 22 IJS (Dp P- 70S). This potent is not in evidence (Dlt Y ’.lid; C.i:, p. 788, fol. 2107). Defendants linvoks Imdiiccd no testimony in regal'd to it. Thu patent is inioiher example of rolls provided with pointed teeth, The rolls are geared together (D.U, p, tjo) the gearing lining ho arranged that the teeth of one roll shall inturmesh with the teeth of the other. For all the reasons slated, this patent, like the rest of the prior art, has no hearing upon the inventions of the patents in suit. It is idle for defendants to attempt to justify the Chinese copies they have made at Pekin and Detroit of the Edison kinetic, giant rolls upon the lmsis of this patent. The fads that it, is not set up in the answer, was not offered in evidence nor explained by the evidence ami lias been referred to by defendants’ counsel only upon the argument show that defendants themselves at- Inch no importance lo it. It is entirely irroleviuil, except that it shows how fundamentally new arc the Edison kinetic method and apparatus by which huge rock masses are broken up above the rolls •mil then further reduced by a rolling action bo- '"■ecu the rolls, through hammering blows doliv- b.v knobs which have the enormous power of the massive rolls, revolving at: a high speed, behind Authorities showing that the claims of tlio piitonts osoitiM-unotaottetpated and that no iiucstion of , /j 10 Wyootion or discovery relied on as n : . ‘St have been complete and capable ot producing the results sought to he ac¬ complished. if the thing were enihryotic or inchoate, if it rested in speculation or ex¬ periment, if the process pursued for its de¬ velopment had failed to reach the point of consummation, it cannot avail to defeat a pat¬ ent founded upon a. discovery or invention which was completed, while in the other case there was only progress, however near that progress may have bcun approximated to the end in view. The law requires, not conjecture, hut certainty. If the question relate lo a machine as thus exhibited, the conception must have been clothed in substantial forms, which demonstrate at once its practical ef¬ ficiency and utility.” An accidental prior use, wlioro tlio oporntlvo principle Is it undoi-stood, Is not an anticipation. Tn Anthracite Separator Co. v. Pollock cl al, io Pod, 108, 1U, Judge Arehlmld, said;— “Even if it was partially appreciated while it lasted, and the possibilities residing in it recognised, the operative principle docs not appear to hove been imtlcnlootl, so os to w intetliyvntly reproduced. A prior use, in or¬ der to nei/ntive novelty, must he somethin!/ more than an accidental or casual one. it must, indeed, he so far understood and prat; Heed, in persisted in, as to contribute to tin. sum ot human knowledge and he access li e lo the public, becoming an established fact in the art. Oayler v. Wilder, 10 Ij°«; ‘J“ ’ Tilghman v. l’roctor, 102 U. », 1,11 > * fll„ Flexible Clasp Company v. Caroy Mnmira taring Company (O.C.) 00 bed. * a Metal Company v. 1? « C / (C.C.) 155 Fed. 400. There w « he molest approach, to anything of that here.” In iicckmlh v.Malleahle Iron Jfaiiye Co., i ml, 1001, 1010, Judge Quarles said; “The law is well settled ^'Yqmimd'er'and cidcntal production, whej the lh(J p(lt. 224 witod invention ciune into being, cannot lm relied upon by way of anticipation. Wall® on I’atents (4tb JOd.) 07; Wickelman v. Dick Co., SS bed. 2(1-1, 200 ; Tilglnnan v. Proctor 102 U S. 707, 711; Pittsburg ItaduclCft v. Cowles Co. (C.O.) 55 Fed. 801: Chase v Fillebrown (C.C.) 58 Fed. 377.” An Invention Is not to bo forfoltoU by tbo wisdom that In Uunoock a. liogd ,,r ,, v v lleltiiin Gompitntl’ “In Mtigownn o. N. 1. 141 U. S. 332, invention »» » „ Bluff. jug a rubber back upon the pnt-hing In the Burled Wvo ola the court decided Unit tbo sulis. n l)lntc in¬ wire barli for one cut from an '>on > volved invention. tt <5 597, In Potts one, tlmt if a new combination and arrangement of known dements produce n new end !» Iicml mull, never attained before it i« evidence of invention. It certainly wns „ new and useful result to make a loom dace oO yards a day when it never before uni produced more (ban JO.’ The keynote of all the decisions is tlio ox- tent of the benelit conferred upon lninikinil. Wliere die court lias determined that tin's "enefit is valuable and extensive it will we lldnk, be diilienlt to find a well considered ease wliere the patent lias been overthrown on the ground of iiniiputcntnbility.” As slated in the hand note: “When the court 1ms to deal with a device winch Inis achieved an undisputed success, and accomplishes a result never atlained lie- fore, which is new, useful and in large demmul, is generally safe to conclude that the man who made it is an inventor.” n,0‘!i,lcntl0n 0f ft 1>r,0r device bo required to produce ,he ro8U,t of » Patented device. It does not anticipate. Tn Topliff v. Topliff, 145 U. S., 150, the Supreme T’ourt said;— “U is not siifiidont to constitute an antiei* Jn 1 viV A1”1 ^,e ^ev*ce 1‘elicd upon might ti,v nou i Heat ion he made to accomplish the fitiic- •on performed by the patent in question if it ,/M( i - by its maker nor mhipted funct ions ” 1,HC^ ^01* ^,e I)e,‘Tori nance of such Xiunerous other cases decided by the Supreme 111 Courts to like effect arc cited nml 1 ,0« .Trnlgo Pollocl in Hancock v. Doyil, 170 l od., (tno, fi04-(i00. Ill ftast v. Cohn, 11!) Pod., 505,508 (C.O.A.), it wns held that the substitution in the clasp of a hnsc-Hiippiirtcr of a button made of rubber dis¬ closed patentable novelty in vie» ,>f the I.e.l superiority of tlio article as so constructed. In Hie course of its opinion the court said (p. 508) “Whether tlio feature of novelty is the cm- plovmcnf of n new material, or a change of ndiiptntion in oilier respects, the inquiry al¬ ways is whether what was done involved the exercise of inventive faculty us distinguished from the ordiimry skill of the calling. A' hen I lie substitution lms accomplished » result which tliosc skilled in the art had long and vainly sought to effect, the evidence tlmt t involved something beyond the skill of i cal ling is so persuasive that it generally i-- solves the iiuiuiry in favor of patentable no ■ city. Applying that rule to the present case, we conclude that the patent in sm , s l- gards the claim in controversy, is not imaim for want of patentnldu novelty. To the same effect is American Gmphophone ('». v. Universal Co., 151 Fed., 505, where a pot¬ ent for dupl eating d sc si i 1 ilc il s s lidiicd on the point of invention upon grounds. A presumption of novelty always attends tlio grant of a 111 Morion v. Llewellyn , 1M Fed., (O- AA.) ; it wns held as follows;— ft ft i tic p. s ,t , q V Unit always attends Hie grant 1 patented law is that where it is show a U at . a P mi. device lias gone int>. general > nc p,u- perseded prior devices bating t . ]]t n pose, it is sullioient evidence of ■ ' « , t 113 doubtful case. The Barbed B <• Conl. TJ. S. 275,292; Keystone Ma.m^' v. Pany v. Adams, 151 U. S., , ijj > sll0e But- Iiasselman, 97 Fed., 901 ' ' Vqgo. National The (?ran(i of lollcrs-pntcnt is prime facie cvi- ilciiuu tlml the patentee is the first inventor of the device described in the letters-pnlent and of its novelty. Not only, therefore, is the harden of proof upon the defendants to make good the de¬ fence, of invalidity, but it has been held ia an- ""■‘roiis cases decided by the Supreme and other Courts, that, “every reasonable doubt should he resolved against; him” (If uncock v. Iloyd, 170 Fed,, (100,(110 and cases cited; Underwood Co. v. Ullioll Co., 105 Fed., 027,930.) As stated by the Circuit Court of Appeals in Aiiierictni Oruphophono Co. v. Leeds iC- Gatlin Co., 170 Fed., 327,331:— “The burden of proving anticipation hr clear and convincing evidence rests heavii'v upon the defendants,” citing II mi ifr n v. >21, xQ. 37). The Wall rolls are in the scrap pile where Mr. Edison consigned them prior to 18S!) at llechlelsville, Pa., after having experi¬ mented with them and found them to he useless. It has hern shown that neither the Wall nor ■ni.l other rolls of the prior art operated to break rock hy kinetic energy and that they were iiicii- puhh or so doing (mtpm, pp, 205, 21S). Defendants' counsel misstate (brief, pp. 100- 191) Mr. Mason's testimony, saying that lie ad¬ mitted that the Wall rolls involved the expendi¬ ture of kinetic energy. On the contrary, Mr. Ma¬ son proved from Mr. Willi’s deposition that the. leal to the Wall rolls was continuous (C.R., p. 713, Q. 3), that Mr. Wall never understood the use’ of kinetic energy in breaking rock (O.R., ]>. 713, Q. 5), that the Wall rolls operated entirely l,y the power supplied to them and broke the rock by the direct application of tin: miHu-iCnt l~ve. supplied (C.R., p. 7411, Qs. 4 and (1), that the Wall rails operated by continuous})/ pinching very small stone between the smooth surfaces of the inter- meshing corrugations, and not by hammcr-Hke blows, being absolutely incapable of doing such work as the Edison kinetic rolls do (O.R., P- 144, Qs. 10-12). Filially, Mr. Mason said that if the power sup¬ plied to the rolls is continuousl)/ expended upon rock continuous/// fed, kinetic energy will not he stored up in the rolls (CYR., p. 740, RDQ. 31) mid Hint it would he impossible to store up in the Wall rolls the kinetic energy necessary tor doing such work as is done hy the Edison giant ro s (C.R., p. 750, RXQ. 35). ' „ The error of the argument, of defendants coun¬ sel was pointed out when consid i S 11 L 1 sl limny of Mr. Newhouse (supra, p. 84). The f Hint, if . a small driving power he employed a . . ( i thin 1 I i' aof xQ. IP), the difference in fundmncnlul between niiimre rolls which period wall// store up, IhraiH, considerable periods of lime, the power supply l).v a mull driving powur, insuaicionf. to irak rook by I ho dlruct (i. u. continuous) npplicntion of the powur, and periodically expand upon the rock (lie power or kinetic energy thus stored up, mid small rolls which continuously expend the power supplied liy a driving power sufficient to crush small pieces of rock continuously fed. In the one case, the power is periodically stored up mill periodically expended, in the other, if is not. So 1,1,11 1,1 llll! ease, liy reason of the capacity of the uiassire rolls to store up an enormous quantity of kinetic energy, tremendous hammering blows can he struck pvriodicully to shatter immense rock masses, an operation utterly impossible in the other case or with Wall's rolls. : Burly operations with Jaw cruBhors mid Beared, Drcnnan rolls at Edison N. J. from 1889-1893 were abandoned because o cob proved prohibitive. Aftor lndeterininnte experiment, urge roils were constructed to secure “ft large angle of bite.” were °a n°u Ue r °f a N u re” ** dofonda,ltfl lo 1,rove n >mbISc ■heaving llechtelsville, Pa., Mr. Edison begun in TSS!) the building of a crusher plant at Edison, >*. This plant consisted of the jaw crushers mnl the geared, llreiinan rolls. It was operated during •Shi mid 181)2. .Mr. Mallory explains that the cost (,I)e,*nling the plant by such means was proltibi* !,!?•. P' (i3!l’ Qt Tlierefore, in 181)8, Mr. Jj( mn\ dismantled the jaw crushing plant ami lie- Kim (he making of designs for n new plant (C.R., !*' Wl, fols. 1023-.I !)24) . The idea that he then had mi mind was to construct roils that would linre " "l'{e of bite. With this end in view, he | xpei imented with small rolls, placing the roils 11 ',l|,.viog distances apart and discussed the hiiihl- IB of a pair of rolls of larger diameter (C.H., I’¬ ll f„i 1021). Eventually the idea <>( larger ,11s with a large “angle of Into” proved to he lm- incticalde for tile rock would ride on top of the ills, slow them down and stall them (C.E., 1>- » • > Mr. Mallory states that the preliminary tests, itli regard to a larger angle of bite, on the snm ,11s having a diameter of 24 inches, gave no nu • ition as to whether or not the larger rolls would » successful. He observes that in almost all e. • crimcutnl work it is possible to work out iiidels the principles involved, and in a mensi , predetermine the probabilities of success or fa. - re. It was not so in tbis case, however. So, he lid (O.U., p. (141, fol. 1022) “the only thing to do was to '’"'‘’'/^^"iVit on the experiment, renlimng the ' 11 lol. failed wo would lose many thousands oi lars.” The experiment did hill. The theory of I"®"** „g the angle of bite by making ^ ' bfope,,- tterly impractical. . The large rolls nc c I ive to break even comparatively smn 1 I-ces^ ork. The loss amounted not meielj ■ . millions, of dollars, The ^ ^ Hunt at Edison, is7. J, woo m . > tHl, ex- ■ml operation. Tlie plant was n • stl.nction, to test, it during the P01'10'1 0 , , fn mtil after the patents in suit had bee i n work) S’o business of any kind, except con. hurt -•-•"“friSSii- icon applied for. In view of (lefendniits nafter referred to, the state" r0nR were ’niniRol (brief, p. CO), tlint the of ft c0mmer- instsillert at Edison, N. J > aS * .Pfact Hint defend- mils’ counsel Jmve lieen obliged to misconstrue tin- evidence in these and other respects, ns hereinafter pointed out, will convince the Court’ that the do- reuses interposed are entirely without merit and without support in the evidence. Mr. Ilerter also testified that Mr. Edisoii’s orig- imil olijeet in making (lie rolls large was to ob¬ tain a umitcr nni/le of bite, in the expectation that the large rolls would thus receive and break larger pieces of rock (C.I1., p. 657, Q. 85). This idea, Mr. Ilerter testified, proved to an utter failure (CM. p. 531, Qs. 57-G7; p. 57(5, xQs, 20!)- 210). Mr. Ilerter also proved that from 1S!)3, when the construction or the plant began, to Jmi. 1, 181)8, no business was done anil no sales i cere niailii at tlie plant at Edison, N. J. To the same elVuct; was Mr. Edison’s report of Jan. 12, IS!)S ( infra, p. 25(1). 'i’lic building Of flic Edison kinetic, giant rolls of the pat. cals In suit was ono of the moBt colossal experiments of modern limes. Mr. Mallory stated in detail, as did all the other witnesses, including those produced by defendants, tlie persistent efTorts, experiments, failures ami changes made and encountered by Mr. Edison in the building of tlie single machine from which, in tlie early part of 1S97, lie evolved and perfected the invent ions of tlie patents in suit nnd revolution¬ ized (lie art of rock breaking. Those details. will ie set forth with references to the record. Upon i consideration of tin- evidence, tlie Court will tin- lonhtedly agree with Mr. Mallory, when he said P- OIS) “-As I have already stated, at tlie time of ft"’ panic in 1S!)3. Mr. Edison had contrib- II -llli) 000 making a total, cask investment :nmi Mr. Edison personally of $2,17-1,000, mt of a total expenditure of about two and i half million dollars. During the period from 1.8110 up to and ni-luding 1000, Sir. Edison personalty spent lie majority of his time at Edison, K. J., uni while there, I would estimate worked on in average of sixteen to eighteen hours per lay, Sundays excepted, when lie usually re¬ turned to Orange, and when I think of tne Iremendous amount of work which lie dal personally and the large amount of menu} which lie contributed personally, it makes me believe that his work at lidison was one of tlie most col I ossa I c.riwriincuts of modern limes, > while there limy be other cases wlieie, pel more money has been spent in experiment work, I do not know of a case where one - planned, dcsirjncd, constructed, e.emme ««■' > tested and rcdesUjncd, reconstructed, > spending as long hours as already st itu I d i „ it practically all on his own money D ■> * all this time Mr. Edison did not recei e u . recompense in the way of salary, and Hu. royalty he is now ,wn„««»dlg ^ 237 endurance, persistence mid rlotcrnilnrilimi tmi! nf liis genius ns mi in von I or flint the giant: mils of tilnnii: power wro lmill. mid developed into „ Hiecrssfnlly o]ieriiting iiincliinc. Defendants’ witness, Mr Oonloy, toatllloil Hint the kindle, limit rolls nro duo to Mr. Edison's energy und pluck In over- lomlns dllllcultlos encountered nml constitute n great achieve Defendants’ witness, Mr. Conley, who wns sii- iPi'iiilendeiit of the pinnl at Edison from Xovem- ier, 1889, to October, XS07 (D.H., p, 70, Qs. 4-S), ifter pointing out the dllllcultics coiitiiinoiisly 'iicmiiitered in the building mid testing of the limit rolls, teslilied Unit tlio ninebine simp nml Irnfting room were working almost font iimonsly; lint while everybody else wns down in Ids boots, fr. Edison chinned tlmt lie would make n success et (ll.lt., ]i. 95, xQ. 1*18) ; Hint in 1895, when Hie esls relied on liy defendniits were lining iiinile, lie diseonriigeiiienl; wns so great Unit the plant Iml down ( l). If., p. 05, xQs. 1.4-1-145) ; mid that living t lie opportunity to observe the courage "d iierservernnee displayed by Hr. Edisnn in oing ahead with the work to overcome the dilll- allies and make the giant rolls a success (D.It., tin, xQ. 14(1), Ini regarded Mr. Edison’s achieve- eat with respect to the giant rolls as a great 'hievomonl. lie said (D.It., p. <)(!, xQ. 140);- "I n had m opinioi •egard it as a great iiebievemeat. If it ol been for his energy and pluck we not have the giant; rolls to-day, in my z*jssr? provo ‘h"° i8s5, r nefendnnts have introduced in evidence a mini- '' of Periodicals. Some of these (D.It., pp- 531- i), published during tlie years 1804 nml 180-5/ contained meagre nccounts of clninges, accidents mid building operations going on tit Edison, N. J. Not one of them contained miy description of the a luiti ns of the patents in suit. Not one of them disclosed the breaking of rock by kinetic energy ur the operation of the massive rolls revolving at great speed mid delivering hammering blows of enormous power by menus of the higher or even Hie lower knobs. The reason is that these tilings were not then known. They did not exist. The articles speak of tearing down buildings and mu- I'liinury with extraordinary prodigality, not a single cent being realized from the investment, (14.lt., p. 531); of Mr. Edison’s dissatisfaction with the ponderous rollers (D.R., p. 031); of the closing down of the plant and the uncertainty us to whether tlie works would start up again, in August, 1805, subsequently in the ot the alleged public use (D.It., p. 033) ; of tlie belief tlmt perhaps tlie costly experiment had come to an end in August, 1895 (D.It., p. 533); of tlie hope in August, 1895, tlmt no serious obstacle was in the way of tlie ultimate success of “Wiz¬ ard" Edison’s gigantic enterprise (D.It., p. 534); of the accidents due to defective machinery and const met ion work (D.It., pp. 534-530) ; of con¬ struction work going on (D.It., p. 537) ; of changes living imido at Edison indicating “great mind and pocket-book power,” mid of belts that slipped nml caused trouble (D.It., p. 541). Tho articles In McClure's Magazine, Tho Iron Age and Engineering, for October nnd November, 1897, ^Introduced Jn lie U8e, public sale nnd anticipation In tho prior art. Hut the other periodicals introduced by defend- mils tire of inter date. They were published in October and November, 1897. For tlie first time, tlie inventions of tlie patents in suit are referred lo nnri partially described nnd Illustrated. There lire, il is true, some errors and many omissions. For instance. Fig. 1 of the Iron Aye for October 2S, 1807, shows the successful friction band of 1807 (D.It., p. GS3), while the photograph on page So of McClure’s Mayazin e for November, 1807, was taken when the impractical wire rope friction was employed and before the slugger knobs were invented or adopted. While the descriptions of the inventions set forth in the articles published in October nnd November, 1807, are lacking in many important details anil contain a number of inaccuracies, nevertheless, they prove that; Ur. Edison did not evolve and per¬ fect the inventions embodied in the kinetic, giant rolls before the year, 1807, and that prior to flint liiae lie had been engaged in designing, construct¬ ing and experimenting with the sinylc machine ut Edison, X. .J., from which the inventions were evolved. These periodicals contain, it is true, only hear¬ say evidence, hut, having been presented to the Eoiirl; by defendants, they are available to coni- phi Want for every purpose. Tlio article la McClure's Magazine proves Hint engineers chine that could erusli successfully live, six nnd seven ton rocks, nnd negatives said alleged defenses. The article in McClures speaks of the delermi- nation of the inventor to utilize every cent that he had and every year of his life, if necessary, to perfect the invention and overcome discourage- aicnts and embarrassments of every nature (p. 7S). It is said that (lie roek is “crushed by the stored momentum of gigantic rolls” (p. 80) ; that “it is the kinetic energy of the rolls that does the real work of crushing” (p. 87) ; that the crushing ca- Purity of a single set of Edison's giant rolls, the product of which was crushed by smaller rolls, was 20 per cent, greater than that of all the slump mills in California (p. 80); nnd that steam shovels do the work of loading roek on cars at the ipinrry to lie hauled to the giant rolls (p. 83). Then there is a statement that Is a complete an¬ swer lo the defense of alleged public use and to the defense of anticipation in the prior art. It is said (p. 7!)); — “Engineers, tried engineers, used to large operations, smiled incredulously. Some of them spoke of the enterprise us Edison’s ‘hob¬ by;’ olliers, less charitable, called it bis ‘folly.’ Those of a calculating turn ' of mind showed him on paper that no machine could ■ he con¬ structed powerful enough to crush successfully /ire, sis i and seven ton rooks; or if such a ma¬ chine could be constructed, that it would never withstand the terrific fur which would result. This particular difficulty, it may be said in passing, Mr. Edison surmounted so completely Hint, less limn one hundred horse-power is re- ipiirud to reduce rocks weighing six and seven Ions to dust in less than three seconds from tlio time they are thrown into the crushing- machine. Other difficulties wore overcome as completely, none proving too much for Mr. Edison’s indomitable will and rare concentra¬ tion of mind and energy.” Durability, being an use, howovor essential quality long, necessary to of tho kinetic, giant tost their durability, (Elizabeth v. Pavement Co., 97 U. S. 126). It was, indeed, a difficult tusk to design and construct a machine powerful enough to break and crush rocks weighing from live to seven and even seventeen tons and a machine that would with¬ stand the tend lie jars and shocks anil strains of the operation. Therefore, Mr. Edison was obliged to design and construct and experiment and then to redesign re-construct and experiment again am 210 again before hi; evolved a machine in the early part of lSi)7 that embodied the inventions of the patents in suit. Durability wan an amentia I quality to be attained, an well as a machine that would other¬ wise successfully do the work required. No hSU necessniw to test the durability alone of the inn- chine, though it lusted for several years, could be a public- use even if the machine embodied all the features of (lie completed invention ( Dlteubcth o. Vurement Vo., 07 U. S., 12(i, quoted infra, p. 202). Tlio nrtlclo In Tlio Iron Ago nogutlvoB snlil defenses In like nmnner, stilting Unit nftor yenrs of experiment nnd persistent Tlte til-tide in the Iron Aye for October 2S, 1807 referred to llte inventions ns littvinglieun completed {.IX li., p. (183). It is said that the giant rolls realty partake of the character of a rock cracker and con¬ sulate a new a/i/i/icalion in crushiny. The two kinds of knobs, lower mid higher, are described and it is said that these strike the rock a series nt hammer blows. It is also pointed out that the licit is not depended upon, us in the prior art, to do (lie crushing, serving only to speed up the rolls. Tlte intermittent feed and the periodic operation of (lie rolls are described. Also the small driving power (l).Il., p. (iS7). It is said that tlte Edison plant lots now passed beyond the experimental stage ( IXIt., i>. 7011). It is also said (D.H., p. IBS) “It has been a marvelous and persistent struggle, not alone with a series of perplexing ami diliicnlt technical questions, but also against the adverse circumstances which grow out of the radical changes, economically, which have swept over the American iron trade. It seems certain that after years of experiment- iny on a yiyanlh scale the technical problems hare been seined, and it is believed that a com- inercially profitable basis lias been rencheil.” Tim nrtlclo In Engineering negatives snld defenses, ststlng Iho novelty of the now kinetic method nnd pointing out the delects ut tho socondnry Cornish rollB, duo to their oxcesslve friction. la l-lnyinevriny for November 12, 181)7, it is said dint a sight of the steam shovels at work (Fig. 1) gives a vivid idea or the gigantic scale on which the whole cnlerpriso was planned (p. 570). The steam shovels load the rock at the quarry anil it is found iioccHsury, it is said, only to crack a portion of the face of the rock by dynamite, instead of actually blowing it oat (p. 570). The moving parts of the two rolls are said to weigh' 70 tons. They are driven by a friction belt. The rolls arc brought ap to a speed of a little less than it mile a minute. When breaking rock the rolls slow down, giving up purl' of their stored energy. Then the friction licit hriiigs them np to speed ready for the next loud, «*o that- aft the work of crushiny is done by hiuelie eneryy ltocks weighing 5 tons were crushed like egg shells (p. 570). The defects of the Cornish rolls are pointed out, the friction of the machine being about 82 per cent, or the horse power applied, leaving only IS pol¬ ecat. for the actual work of crushing. For doing the pulecnziny work of the Cornish rolls Hr. Edi¬ son evolved the “three-high” rolls, which have more tlum reversed the former conditions, the friction of these machines being about Hi per cent., leaving 81 per cent, of the horse power applied to do the crush¬ ing work (p. 57!)). The oiling system, which was sabsiiliiled for the greasing system in the early hart of 1807 (C.H., p. 555, Q. 73; p. 840, Qs. lo¬ th), is described (p. 580). , articles published In 1897 with 'lull, nud Hint prior lo 1897 ho kept secret nil manors, relating lo the Inventions of tlio patents In suit. Tim tii-l it'll! in Ent/inovring ror November 12, 1807, is very siiniliip to an urticlu that appeared in I lie IjWfW Engineer of New York fop Uctobcr 28, 1807. la llm latter article it is said (p. -101) Hitlierli i no details of consequence hurt bvai ■ yirvn nut, lint lie ami his associates have been .spending money freely lo acijiiire the workable ore deposits, then to treat them an a large scale of technical ami commercial suc¬ cess, ami lastly to market the various prod¬ ucts that result from thu treatment. The up- peurun ct: uf thy prevent article mark*, there¬ fore, the reaching hi/ Mr. Edison of 1 or i< bn co to l/io effect that before July Iti, Mr>, nr at any other specified time, any sinyle in- tlirhlnal now the yiant rolls, cither in operation or nut in operation, oilier than the workmen employed by Ur. Kdison in the construction thereof. The defense of two years public use is preposterous upon all grounds, but it necessarily falls upon this ground alone, that there is no evidence that any person other than the workmen employed m tl.ei. construction over saw the giant rolls or witnessed their operation prior to July 10, 181)5. All that Mr. Kverett testifies to is that at the time of ins visit, a month before April 27, 181)1, none of the machinery was running and that there was a. ma¬ chine there that ho presumed was for crushing, but the uses of the machine were not explained to him (D.li., p. 100, Qs. (i-12). The article that lie wrote was based upon wlmt was told to him, lie- ing, therefore, purely hearsay (D.li, P- l°-» xl‘; 14). Moreover, in April, 1804, the large rolls at Kdison were a complete failure and had to lie dis¬ mantled after an attempt to crash about. 100 tons of rock was made (C.B, p. 540, Q. 0; p. 0-U >«'■ 11)2(1; p. 505, xQ. 140; p. (i(>3, xQ. 54). If we assn mo, contrary to the faat-, that ue* fondants had proved that some one prior to July W, 1805 obtained a permit and witnessed the operation of the giant rolls, such proof would not be proof or a public use of the invention, even 'vc make the further assumption, contrary to tne that t Ik* inventions of the paten Is in suit [•oinjileled at that date, o of nn Invention In n bar to n patent only when It Is i n public clinrnctor ns to Inillcnte clearly that thn r Intended to abandon or dedlcato the Invention la bile (International Co. v. Kellogg Co., 171 Fed. 651, head nolo 2; Victor T. M. Co. v. Amorlcan Urapb, This is the doctrine of public use its stilted by defendants' counsel ( brief, p. 00) . They say that the purpose unit object, of the inventor governs the legal elt'eet of n two years public use. There¬ fore, the principle of the decision of the Circuit Court of Appeals for the Second Circuit in W'crel-ineixlvr v. American. Co., 134 Fed., 321, 32-1, C.C.A., also applies. That case involved mi alleged publication of a subject of copyright, it was held (hut the exhibition of a painting at an m-adeaiy, at which no person wits entitled to ropy the same, and to which the public, other than the nn-liihers of the academy, were not admitted, led for the roll shafts to positively p « d v danger of axial movement of ti c » « »> c Hue linin') interposed he ween he .1 titi.ndrels mis tin u t ' ' ' " lVl licit in direct contact with ll,c. - ,, c countershaft was changed, rt* It* cidental increase in speed tlie lini/ system was improved ( Homi i, - • i- “ no be on that roll and on the other roll (He. t, lt.D.Q. 200; C.K., B01). h regard to the accidental increase in spec : rolls, defendants’ counsel (brief, P- • n,„ Hnmnv Of Mr. lierter. As stntcu a per minute and in the test of July, 1895, they ran at 135 revolutions per minute and in the forepart of 1807, when the singer plates were put on, they ran at about 212 revolutions per minute p- 559, Q. 9T). At 1.00 revolutions per minute the surface speed was 1SS5 feet per minute. At 135 the surface speed was 25 44 feet. At 212 the sur¬ face speed was 3990 or substantially 4000 feet per minute, as slated in the patents (C.H., p. 559, Qs, 99-102). The increase in the speed of the rolls from 135 to 212 revolutions per minute resulted accidentally from a change made in November and December, .1895, in the countershaft and in the size of the pulley, on the countershaft, that drove the rolls (O.H., p. 574, o:Q. 202; p. 591, KDQ. 205). Hr. Mallory test Hied to the same effect (C.I!., p. (154, (is. 10-20). Furthermore, defendants’ witness, Geo. McKnteo, test Hied that although he could not say that he recalled the increase made in the speed of the giant rolls in the progress of their development, never¬ theless, he did know that there were changes mmle on the countershaft, that the countershaft was lultu» «»l- (wo or three different times awl the pul¬ leys taken off (D.R., p. M0, xq. ioo). The change in the countershaft consisted in rais¬ ing it up awl making the piers supporting it of cast, iron instead of timber, the timber not being strong enough. In doing this, in order to make the belts clear some part of the framework of the build¬ ing, it was necessary to increase the size of the p..lLy o,, the countershaft driving the giant rolls. These changes resulted in the accidental increase of the speed of the rolls from 135 to 212 revolutions per minute. The Edison patents in suit state, both in the description and claims, that the kinetic, giant rolls 249 travel toward each other ul a high speed and that in the periodic or successive breaking operations they recover sufficient speed to effect the successive breaking operations (see claims 1 and 2 of the method patent and claims 1, 2 and 3 of the ap¬ paratus patent). The patents state that each roll is (i feet in diameter and 5 feet long and such "ere the diumeter and length of the experimental machine at Edison, N. J., from which the inven¬ tions of the patents in suit were evolved, What is meant by a “high speed” and by a “sufficient sliced” is clearly and specifically stated in ench pat¬ ent, wherein it is said (No. 072,010,. p. 1, line 84; -Vo. (172,(117, p. 1, line 35) ;— “These rolls tiro given a surface speed of about four thousand feet per minute A roll G feet in diameter must make 212 revolu¬ tions per minute in order to have n surface speed of 4000 feet per minute. So that in the experi¬ mental work at Edison, N. J., the speed necessary to enable the massive rolls of the patents in suit to break rock by kinetic energy, was not attained until November and December, 1895, a date sub¬ sequent to July 1(1, 1895, Indeed, ns will presently be shown, the experimental machine at Edison, N. J. could not successfully be operated to break rock at all until after the accidental increase in speed, resulting from the changes made in Novem¬ ber and December, 1895, the adoption of the end thrust bearings in 189(1, the making and adoption of the higher slugging knobs in the early part of 1897 and the other important changes made during the years, 1895, 1S9G and 1S97, hereinafter par¬ ticularly pointed out (infra, pp. 2G2-2S7). For the present, the Court is requested to con¬ sider only two of the changes, which, as defendants are forced to concede, were made. subsequently to 251 July l(i, IS95, namely, the making nrnl adoption of the higher slugging Uaohs in the early part of 1.S97 and the increase in speed of the rolls result¬ ing from the changes made in November and De¬ cember, 181)5. It has been shown ( supra , p. 22) that without the higher slugging knobs no practical embodi¬ ment of the kinetic method or apparatus has so far ever been made. It is also true that without the high speed specified in the patents, neither the kinetic method nor the kinetic apparatus could be employed to break rock masses (infra, p. 252). THAT IS WHY DEFENDANTS EMPLOY DOTH THE HIGHER SLUGGING KNOBS AND THE HIGH SPEED AT PEKIN AND DETROIT. How impossible, then, is it for de¬ fendants to contend that Mr. Edison had com- ■ plated the inventions before he employed either. Roth the higher slugging knobs and Hie high speed and the other improvements made after July HI, 18113 were necessarily employed by Mr. Edison before he could realize that rock masses could he broken and crushed by a kinetic method and apparatus, lienee, the iitoentions described and claimed not on/// in claim 3 of tlw apparatus patent bat also in every one of the claims of the method and apparatus patents rest upon the con¬ ceded and other improvements made after July Hi, im. The argument of defendants’ counsel ami the cases cited h.v them (brief, pp. 37-50), based upon the false assumption that, before July 10, 1895, Mr. Edison had not only completed hut had tried out the inventions claimed in the patents in suit are entirely inapplicable to the facts proved by Hie evidence, including that of their own wit¬ nesses, in the case at bar. In the prior art small pieces of rock were broken by the direct application of the power. In the primary operation, after the rock had been blown out at the quarry in small pieces and had been further reduced by re-blasting and hand sledging, jaw crushers or gyratory crushers were employed. In the secondary and tertiary operations the small, smooth-faced rolls or the geared rolls with sharp, chisel-like teetli wore used. The feed to the crushers of the prior art was continuous. Hence, for these and other reasons heretofore pointed out, the conditions were such that rock was broken by the direct application of the power, the full power of the engine being expended at nil times, and in no way by kinetic energy. It is the object and great achievement of the in¬ ventions of the patents in suit that the kinetic, giant rolls thereof will break and crush enormous rock masses, just us they’ arc blasted out at the quarry and loaded on cars by powerful steam shovels. In order that such enormous rock masses, or c c i i t uly very small rock masses, may he broken by any set of roek breaking rolls, it is essential that the rock bo first broken up above the rolls. If the rock is of any size it will ride the rolls and not be caught and broken or crushed thereby and it will stall and stop the rolls, unless means are provided- for breaking up the rock above the mils so as to reduce it to pieces small enough to descend into the angle between the rolls to such au extent that the reduced, small pieces will be caught and subjected to the rolling and crushing action of the rolls. In the whole history of the rock breaking art, no instance can be found of rolls breaking rock above the rolls, other than the kinetic, giant rolls of the patents in suit provided with tl e 7 jl c 1 c iny and sledging knobs. The history of the ex¬ perimental machine at Edison, N. J., shows that before the adoption of Uie higher sledging knobs in the early part of 185)7, it was impossible to operate the giant rolls, because not only was tlioir speed insullieient, but also because, in the absence of the higher, slugging knobs, even, comparatively mall pieces of rock would ride the rolls ami stall and stop Hie rolls. This dilliculty was overcome and the giant rolls were made ell'cctivp for b leak¬ ing rock, and great masses of rock, by the making and adoption, in the early part of 181)7, of the higher, sledging knobs. If there were no other feature involved, this feature alone would he a complete answer to the preposterous defense that tlie building at Edison, X. J. of the single machine, from which the inventions were evolved, consti¬ tutes a two years public use invalidating the put- With regard to t he other point, namely, the in¬ crease in the speed of tile rolls from 135 to 212 revolutions per minute by reason of the changes made in November and December, 181)5, it Ims been shown (supra, pp. 7D-80), from Mr. Mason's testi¬ mony and Complainant's Exhibit No. 38, which is tlie second diagram plotted by Mr. Mason from the dial charts of tests K showing tlie operation of the New Village rolls when breaking a charge of rock, that tlie kinetic energy of tlie two rolls before tlie breaking and crushing operation amounted to 2,- 320,000 foot-pounds, the slugger roll running at and the regular roll running at 221 revolutions pur minute. In breaking and crushing the charge of rock the rolls expended 1,300,000 foot-pounds, (lie speed of the slugger roll falling to 133 and that of tlie regular roll falling to Up> revolutions per minute, so that the amount of kinetic energy re¬ maining in (lie two rolls was 930,000 foot-pounds, which is only two-thirds of the kinetic enemy ex¬ pended and required to break and crush the charge of rock. In other words, when the average speed of the two rolls had been reduced to 11,0 revolu¬ tions per minute, notwithstanding the great mass of tlie rolls, they had stored in them only two-thirds of the amount of kinetio energy that it would be necessary to expend in breaking and crushing the charge of rock. Obviously, therefore, running at a speed of 140 revolutions per minute, the giant rolls would be unable to break and crush the charge of rock. Mr. Bentley lias shown (supra, p. 25) that the kinetic method of breaking rock depends not only upon the enormous mass of the rolls, but also upon the requisite high speed of the rolls, so that the kinetic energy developed by the great weight and high speed of tlie rolls will not only crack the rook, but contin'uc the rotation. If, therefore, an at¬ tempt were made to-day to break an ordinary charge of rock fed to the giant rolls, when they are running at 11/0 revolutions per minute, the rolls would at once be stnlled and choked with rock and brought to a standstill, because there would be stored in the rolls only two-thirds of the amount of kinetic energy required to break tlie rock, so that after the expenditure of all the kinetic energy stored in the rolls, the rock would still be unbroken and there would be no energy whatever left to con¬ tinue the rotation. To-day we have the wisdom that comes after the event. Therefore, we can to-day explain why it was that, when prior to July 10, 1895, and, indeed, prior to the early part of 1897, attempts were made to break rock at Edison, N. J., by means of the set of large rolls which Mr. Edison was building and trying out, continued and repeated failures were the result. The rolls ran at 133 revolutions per minute. Therefore, even if the higher, slugger knobs had been made and in use before tlie early part of 1S07 and lmd been employed prior lo July 10, 1805, Uie rolls could not at tlint speed linve developed kinetic energy sufficient to crack (lie rock, let alone kinetic energy suiTlcient to crack liie rock and continue the rotation. The Court will now readily understand why it was that prior to July 10, 1895 und, indeed, prior to the early part of 1S97 the rolls that Mr. Edison was engaged m building were stalled by even com¬ paratively small pieces of rock which would ride on top of the rolls, choice the rolls, bring the rolls to a standstill, cause the driving belt to stretch and ■ hum and break, destroy the hearings and otherwise so mutilate and incupicitatc the rolls that extensive repairs were necessary after and during each test thereof. Defendants' witness, Mr. Conley, testified, upon his direct examination by defendants’ counsel, that during the tests of July, 1895, relied upon by de¬ fendants to establish the alleged defense of pub¬ lic use, when big chunks of rock were thrown upon the rolls, they would ride the rolls and not go through the rolls. The friction of those chunks would cause the rolls to slow down or stop and the holts would thereupon slide on the pulleys and hit rn up. An attempt was made to prevent the de¬ struction of the belts under such conditions by means of the wire rope friction clutch, which, how¬ ever, proved to be a failure (D.R., p. 75, Q. 43). When the big chunks rode the rolls, in the manlier described, a grinding action took place between the big chunk and the plates upon the large rolls (D.U., p. 91, xQ. 123). Defendants’ witness, William McEnlee, testified that ho saw pieces of rock riding on the giant rolls while he was at Edison, N. J. The riding of the rocks he described ns follows (D.H., p. 118, xQs. 1211-128) : — “The rock would be dropped into the rolls and the rock would ride the rolls until it even¬ tually slopped, the rolls and would have to he taken out." Defendants’ witness, George McEntee, testified that during the tests of the rolls before the im¬ provements of the later years were introduced, such as the higher, slugging knobs, large pieces of rock would ride upon the rolls, would certainly not go through the rolls, would grind upon the rolls, was destructive to the rolls und would stnll the rolls (D.R., p. 143, xQs. 128-133). Defendants’ witness, John T. Lang, testified that pieces of rock would ride upon the large rolls and stall them and that Mr. Edison was experimenting to overcome these difficulties (D.H., p. 101, xQs. 82-84). These difficulties were not overcome until the making and adoption of the higher, sledging knobs in the early part of 1897 in connection with the increase in the speed of the rolls resulting from . the changes made in November and December, 1895, and in connection with the many other im¬ portant changes and improvements made by Mr. Edison subsequently to July 10, 189o. Moreover, as hereinafter shown, during the period when rock would ride the rolls, because of the low speed of the rolls and the absence of the slugger knobs and other defects, the plates upon the rolls were con¬ stantly breaking and falling off. Mr Mallory testified that, during the test of August, 1895, rock that was too large for the angle of bite of the rolls would ride on the top of the knobs and frequently cause the rolls to lie stalled (CUt., p. (149, fol. 1939). He also testified that, when the rolls would slow down from such cause, tlic driving licit would stretch, burn mid break uiioii (lie roll pulleys when they were keyed fast to the shafts, as they are at Pekin mid New Village to-day. These troubles led to the adoption of the wire rope friction in use at the time Defendants’ Exhibits, Photographs Nos. 5 and 0 (D.H., pp, (170, (iSl) were made, but the wire rope friction proved to be a failure, since the stretching, hum. ing and breaking of the belts continued (infra, pp 204, 271, 274, 277, 270). Mr. IJerler testified that during the tests of the rolls at Edison, N. J,, before the adoption of the slugger plates in the early part of 1807, the rock would not go through the rolls mid would stall the rolls, whereupon the wire rope friction above re¬ ferred to, would not lot go on the pulleys and thus the belt would stretch and burn and break, just as it did when the pulleys were fust on the roll shafts and the rolls were stalled (C.E., p. S50, Qs., 80-44). Mr. ITerter further testified that a piece of rock wcit/hiiii/ .120 to 120 pounds would stall the rolls before (lie adoption of the slugger knobs and cause the belt to stretch, burn and break m the manner stated (0,lt., p. 554, Qs. 57-03). Even such rock under the conditions referred to caused the plates to break and fall off (C.lt., p. 554, Q. 04). After the adoption of the slugger plates in 1S97, the kinetic giant rolls successfully broke rock weigh¬ ing tons loaded by steam shovels upon the ears at the quarry (C.lt., p. 055, Qs. G5-G7). Therefore, according to the facts conceded by defendants and proved by the testimony of defend¬ ants’ witnesses, the alleged defense of a public use of the inventions more than two years prior to •Tilly 10, 1S97 is without foundation. was"-- Ellison's r0,10rt 0[ jnmmry 12i lg|)8i proveB tliat there applications for tho patonts In suit. Mr. Edison’s report of January 12, 1S97, was read by Mr. Mallory at a meeting of the stock¬ holders .of the N. J. & Pa. Concentrating Works held in January, 1808 (P.It,, p. 051, Q..10). Mr. Mallory produced the report (C.lt., p. 049) from which it; appears that on November 1, 1897 the mills of the company were completed and construction work laid stopped. The company then entered upon “ the lestimj period/' reducing the number of employees to 78, who were engaged in making such vhiini/cs as the tests might indicate .were necessary. It was “uncertain how long this testing period” would continue. Only, one trouble apparently re¬ mained. This nroso from the change in loading rock for the giant rolls from hand londing to steam shovels, the hitter taking all that conies in their way, whereas in hand work, mud, roots, ice and snow were not loaded. These materials caused Hefurring specifically to the giant rolls, Mr. Ndh an said; — "now the rolls will take anything that can lie put into the hopper” (C.lt., p. G50, fol. 1950). He referred to the slugger plates of the giant oils having been torn from the rolls by the action ,f the rock, hut added that this difficulty had been .vcrcome by a change made. Mr. Mallory explains hat the change referred to related to the method ,f fastening the slugger plates to the mandrel (C.lt., p. GG8, xQ. 80). Mr Edison said that the two, large steam shovels worked perfectly and loaded a greater quantity of rock and at a cheaper rate than was expected He pointed out that the “bricking plant was still de¬ fective in one particular. Finally he said that “when saUsfactoru tests shall have been made and the mills can be depended upon for continuous running, it will lm necessary to provide money for operating the plunt” (C.H. p. 051, fol. 1052). lie stated tlmt negotiations were under way to obtain " operating money’’ ami that ns to the money needed to liquidate the com- pony’s indebtedness and for "test expenses,” etc, nothing bad been done except by himself. He set forth bis belief in the ultimate profitableness of the enterprise of which the plnnt at Edison, N. J. was but the forerunner of a business which must reach great proportions. How absurd then is it for defendants to contend that prior to July 10, 1805, the plant wns in com¬ mercial operation and the inventions publicly used. nororo installing tlio giant rolls tor the Now Jorsey Zinc Company In the latter part of 1898 or the early part of 1899, Mr. Ellison neither constructed, Bold or Installed ginnt rolls for any other person, company or corporation. The single machine built at Edison, N. J„ from which the Inventions wore evolved, he kept under his own control. Therefore, within tho authorities, the defense of an nllogod two years public use is without foundation. The facts in support of this point are stated bv •Mr. Mallory (O.H., p. (158, Qs. 33-30; p. 072, xQs. 105-111; p. 074, ItDQS. 117-123). The New Jer¬ sey Zinc Company bad been awaiting the success¬ ful conclusion of Mr, Edison’s experiments witli I he giant rolls. Sometime in 1807 Mr. Mallory notified that company that the giant rolls were I hen considered to be successful. In the year 1S9S, tin arrangement was made between the New Jer¬ sey Zinc Company and Mr. Edison by which Mr. Edison agreed to design for the New Jersey Zinc Company a set of the giant rolls. Pursuant to such agreement the rolls were designed and in- Mailed in the latter part of ISOS or the early part <»f ISO!) (O.H., p. 05S, Qs., 33-35). -Mr. Mallory produced a letter dated April 21, ISOS, setting forth the terms upon which Mr. 250 Edison agreed to design a new crushing plant for the New Jersey Zinc Company (C.R., p. 075, IIDQ. 123). ft has already been shown under the preceding headings of this point dealing with the alleged defense of public use prior to July 10, 1805, that Mr. Edison kept under bis own control the single machine which be built at Edison, N. J. and from which lie evolved the inventions. The ginnt rolls were not used commercially until long after Mr. Edison’s report of January 12, 1808 (supra, p. 250). Mr. Mallory states that prior to 1897 and in fact prior to Mr. Edison’s report of Jan¬ uary 12, 1808, the giant rolls at Edison were not used commercially (C.R., p. 059, Q. 37). So does Mr. Herter (C.R., p. 558, Qs. S9-90). In Victor 'J'. J/. Co. v. American ■ Graph. Go., 140 Fed. 800, 804, 805, Judge Hazel cited the authorities showing that where an inventor does not allow his invention to go beyond his control, there is no public use or sale of it, and that it is not a public knowledge of the invention that pre¬ cludes the inventor from obtaining a patent for it, but a public use or sale of it. Such is the law even in the case of a machine embodying the features of a completed invention. In the case at bar, as already shown, the use at Edison, N. J. of the single machine was solely for the purpose of making the inventions through, experiments which it was hoped, would ultimately solve the apparently insuperable dilliculties encountered and result in a machine so designed and con¬ structed that it would, in some way, not then known, accomplish Mr. Edison’s object, namely, the breaking of rock masses. Tlio fuels of this point were proved by Mr. I lerter, who acted us Mr. Edison’s agent in re. building the Phelps rolls of JSOli (C.l!., p. 500, IJs., .1.04-12!)). The Phelps rolls were 8 feet in di¬ ameter and hud a 5 foot face. Mr. Phelps laid attempted to utilize Mr. Edison’s original idea, which proved impractical, of breaking rock masses by constructing large roils which would have u hiri/e inii/le of bile. Mr. Phelps used cor¬ rugations like the corrugations of the Wall rolls and of the llihliingtou . British patent relied upon by defendants. He' did not use hammering knobs and the corrugations were all of the same height. Mr. Phelps used the since lining. He dill not use an end thrust hearing, in fact the Phelps rolls were an absolute failure and Mr. Flertor found the rolls wrecked, a great many of the plates having been broken and left lying on (lie ground. Tn reconstructing the Phelps rolls in 1007, it was necessary to discard everything except the rrame consisting of the four housings with their . and foundation. New shafts, new man- Ircis, new plates having higher and lower knobs, ’"<1 thrust hearings, new pulleys and all other things were required to reconstruct the Phelps aachine, because there was no part of the Phelps 'oils that was of a design fit for use in a machine "tended to crack and break rock masses. Defendants produced Mr. Phelps as a witness. t(! teRt‘fied that he was at Edison. N. J. for two years (j), II., p. It,, Q. 4), and that lie was chief de signing engineer of the plant at Edison, N. J (I), it. p. 17, Q. 7). lie also said that the plant, or which the large rolls were a part, was not in operation during the period of in's employment (I). 11, p. 17, Q. 8). “The rolls wore not in use" ID. II, p. 20, Q. 27). Me made the working drawings for the said large rolls (D.R., p. 21, Qx. 80-82). In designing the rolls various mat¬ ters were determined b,y discussion and argu¬ ment. “We had some pretty warm times”, lie said (D.R., p. 21, Q. 32). Mr. Phelps described certain changes made in the large rolls at Edison which ho said “developed from experimental tests” (D.R., p. 20, Q. 28). The statements of defendants’ counsel (brief, p. 22) that the giant roils ns they existed in 1894 wore the same as shown in the drawings of the patents in suit except for the iron founda¬ tions, friction clutches anil centering henrings, is unwarranted. For instance, none of the features enumerated by defendants’, counsel on page 42 of their brief were embodied in the giant rolls before July 10, 1805, according to their own statement and admission. The only foundation ter this grossly incorrect statement of defend¬ ants’ counsel is that, by means of an improper question calling only for a conclusion and not for any facts, Mr. Phelps was asked to compare the drawings of the method patent in suit with the large pair of rolls at Edison (D.B., p. 21, Q. 35), and lie, looking at. the drawings only of the method patent for about two minutes and not reading the description (D.R., p. 24, xQs. 47- 4S), stated that lie observed the differences noted by defendants’ counsel on page 22 of tlieiv brief. The giant rolls as they existed in April, 1894, were so radically different from the rolls of the lll! .down mid the i ' n „ „,l(| unsidui'iililK Unit it wns not until after -Tuly, 1 Silo, that they could ha tasted X., ]). 0-12, fols. l!)2(i-li)38; p. (1(13, xQfi, Woreover, lifter July Kith, 18115, the niiftcs enumerated hy daremhints' conn- a 12 or their brief and iiiaiiy oilier im. iiiikcs elsewhere referred to ware . . elusion fi'oia the evidence is tlmt, in i defendants' witness, Mr. Phelps, who the drawings for the Edison large rolls l.v constructed and substantially as they July 10, 1805, and who had all the knowledge concerning the rolls, at- design a sat of large rolls that would , he met with absolute disaster. Whore, the public knowledge of the inventions mts in suit or the public use occurring "l.v HI, 1805, upon which defendants embody Ihe inventions of the patents in suit, they developed a capacity of breaking rock masses, in¬ cluding single pieces of rock weighing from 10 to 17 Ions each, at the rate of from 12,000 to 15,000 Ions in. 10 hours (C.lt., p. 031, Q. 35). The test of April, 1801, showed that the large rolls as then designed, constructed and operated were a complete failure (C.lt., p. 040, Q. 0; p. 012 fol 1920). The rolls were thereupon dis¬ mantled and taken out. The foundation was changed from wood to iron. The bearings were babbitted. New drive pulleys were constructed and were made loose on the roll shafts instead o being made fast thereon. A wire rope frieUon was devised. The sine lining wns continued. The defective plates which had knobs of uniform of lubricating the rolls was continued. No end thrust beurings were employed. No slugger knobs were employed. The defective means of secunng the plates to the mandrels were continued. Tl.e ,-niis were run at a low speed. There was no nn- 'lerstii riding rr'lmt.vo, .1 th. ■— “>f “t inir rock by the kinetic energy tlmt uould be 2rr,.pinthe massive rolls m- - rotated at a high speed and provided uitl. higher' sledging knobs. fil1(T£reated After making such changes as a t_ by the failure of the test of April, MM. “at Z,nnt mnde to test the large rolls in No- eember, 1894. But the elevators at once bro » , „ H,n( the test wns prevented (C.lt., P- r40 ”qs. 9-10; I). 044, fol. 1930; p. 063, xQs. 55- -n’ As ii result the balance of the yciu-, 1894, and the first half of 1895 was spent in recon- structing Urn second test of Urn large rolls was made. It was flu's lest, flint developed many of the serious dif. Ileullies Dial made it impossible to employ the large rolls, as llien designed and constructed, for the breaking of rock. The dillieulties were so numerous and so insuperable that they were not overcome until the early part of 181)7. The test began shortly after the 4th of duly and continued info August, 1805, when the plant shut down. So defective wero the large rolls found to be that it looked like n hopeless cuso (O.K., p. 55(1, Q. HO; p. (177, ltDQ. 125). The feeling of discouragement was such that work¬ men were careless of their work on the large rolls, saying that it made no dilTcrence as the machinery was very often torn down almost as soon ns it laid hern erected and completed (O.U., p. 077, fol. 2031). The rope, friction proved to be a failure under the attending conditions. It would stick or bind anil the driving belts would lie destroyed. The sine lining became compressed between the man¬ drels and the wearing plates so that the nuts would work loose; the belts and wearing plates would break, sometimes enusing so much of a wreck that it; would take several days before the experiment could lie continued. The lubricating system was ineilicient under the conditions and in the absence of the end thrust hearings the lateral movement of the rolls, when struck by the rock, would cause the sides of (lie mandrels to grind on Ha. housings, forcing the grit, into the hearings, ' . '"k out tin; linhitt and necessitating the dis¬ mantling or the rolls ( C.H., p. 045, fols. 1934- !!«(>; p. 518, Qs. 20-45). Small rock weighing not more than 120 or 125 pounds would ride on to;) of the rolls, stall the rolls, break the plates and dett'oy tliu belts (C.U., p. 551, Qs. 57-04; p. 045, fols. 19344930). It would lie impossible, nor It is necessary, to enumerate in tins brief the Infinite variety 0 (roubles, defects and perplexities tlmt stood ill the way or Hie making of the inventions of the fmt- rnts in suit. Messrs. Miillory add flectfei* liriWs stated many of tl.e.i. in detail. Tide oi.e fetituie, however, Should lie remarked, tlm"t>ly, thnt the defects and obstacles SVerd so serious UM at lime berore the early part of iSili tfas l In operate the large foils In « ‘V le oat tile fact that, by pfofmr eon f. ho , the massive rolls coitld, if prdt’idot w r^mjijitc tferc not matte 1*- dillieulties wei-o . Sm. diet the fai'ge XnSdil l^J already been Med out, w nnJ . Whatever in flic ^d- tUnp nf the Bay- -00° WNfO 008). At that time, which *as in ^iSkdccovfling to defendants’ con tent, Oil , 207 ills revolving at a spued 0f 135 revolu- limite could nol, ns already explained .’52), store up sullicient kinetic energy ill cnifili rock by the kinetic method, I'<*1 Is "'ere not. provided at that lie higher sledging knobs. Therefore, d have rteveioped sutlleient kinetic cn- ould not, in the absence of the higher nhs, have delivered that energy to the •'f 1,1 I'reak it above the rolls and thus d subject it to the rolling action of the icn the rolls. In other words, at the I lay lug accident, relied upon by defend- inking of rock by kinetic energy was n 'own or understood, nor was there in • that time any machine capable of that method. i the facts, it is very clear that defend- I (brief, p. 55) have, by omission, mis- -Mr. Hurler's testimony. They quote nswer to xQ. 220 and omit that part of which clearly shows that the period Ik: had in mind was long subsequent es accident. The intermittent feed, allow the rolls to pick up their nor- fore the second skip was delivered oc- dd, “at this period in ISOT’ (C.H., p. p. 580, ltDQs, 250-207; p. 502, liXQs. ofenda tits’ counsel eiscwlierc concede lion, the substitution of the oiling system for I lie grease system, improvements in the plates, ini* prnvomonts in the securing of the plates to the mandrels, the scraping of the surfaces so that an exact lit of the plates upon the mandrels was se¬ cured, the use of stronger and more bolts for se¬ miring the plates to the mandrels and inal y, mining other things, to the discovery of the kinetic "" AsnpponrR from the testimony of Messrs. Hel¬ ler and Mallory, these improvements, all subso- I 1 1 to July HI, 181)5, were made sic,, by Ml . In the early part of 1897, the result so>'K « i mined, when the higher sledging k no » " tinned. The large rolls "u0 their trreat son of their design and cons n j k j. odlcully delivered, b.l “ n it wa8 that ^Mr^MnUorv^testi^^ 'l stand” (O.H., p- 817, fol. 19(10) , ■ lieve (bncf, PP- J ’ p, successful opera- tion imi\ U ” of Voek. They would also have thousands of t • 21 on, 35) that before the Court believe (brief, PP- wl> - ’ ’ 2C9 .Tul.v Hi, I SI)', i hi! plant nt Edison wits engaged j(l uni kill}? “briquet Ins ready for shipment,” Tim evidence is Unit the plant was not in com¬ mercial operation for any purpose until long after .Mr. Edison's re|iort of .Tan. 12, 1808 (mi pm, p. 250). T’lmre wore no bri<|uottes made until tlie latter part of 181)7 (D.Tf., ]). 55, xQs. 100-108; C.B., p. 570, xQs. 170-173; p. (1(1(1, xQ. 74). The briquetting plant was not even tested out until the latter part of 1807 (O.lt., p. 570 xQ. 171). Defendants’ wit¬ nesses instilled lo this effect (inf in, pp, 272, 273 27-1). Mr. Mallory testified that the capacity of stock house No. 1 was about 10,000 tons (C.H., p. 005, xQ. (1(1). Mr. Hurler testified that crushed ore was stored in the stock house but not until it was full (O.lt., p. 580, llDQs. 250-257). During the tests that continued from after the 4th of July, 1.8(15, to the time when the plant shut down, on or about August 20th of the same year, (D.ll., p. 75, Q. 44), several thousand tons of ore wore crushed at irregular times during the scries of experiments conducted during those months (C.H., p. (1114, xQ. (if). While I hose tests were being made (he dif¬ ficult,, m encountered caused, from lime to time, so much of a wreck of the rolls that it would take several days before the rolls could be put into shape (o conduct further experiments (O.lt., p. G45, fols. 103 1-103(1 ; D.H,, p. 03, xQ. 131; p. 75, Q. 43; p. 73, Q. 31). Hock would ride the rolls, stall the rolls, break and (car oil' the plates and destroy the bolls. la fact all the difficulties enumerated by Messrs. Mallory anil Dorter and by defendants’ witnesses were encountered. Therefore, during a period extending over a considerable part of two inonllis, it, was not possible to crush, by means of lie large rolls, enough rock to fill stock house No. I, which had a capacity of only 10,000 tons. When giant rolls had a capacity of crushing rock, includ¬ ing single pieces weighing 10, 14 and 17 tons, at the rate of front 12,00ft to 15,0Qft tons in 10. hours (C.H., p. (134, Q-. 35). In other words, during the greater parts o( July and August, 1S95, the largo rolls could not crush as much rock as the giant mils, embodying the inventions of the patents, can. crush within d or 6 hours. Moreover, there is not a word of evidence in tho record to show how much, if any, of the said sev¬ eral thousand tons of rock was crushed before July 10, 1895. It. may all have been crushed after that date. However this may be, the evidence shows that the attempt to use the rolls to crush the rock resulted, from day to day, in wrecking the rolls. Defendants rest upon the untenable proposition, that Mr. Edison could not, in July, 1895, even try the large rolls for tho breaking of rock to any ex¬ tent, without showing an intent to abandon his rights and forfeiting his right to obtain the patents in suit by reason of an alleged public use. But, os shown, tho inventions of the patents in suit were not evolved 6r completed until the enrly part of 1897. It has been shown that defendants produced no witness upon the alleged defense of a two years public uso except workmen who were engaged in the construction of the single, experimental ma¬ chine, and a reporter, Mr, Everett, whose testimony is entirely immaterial (supra, pp. 243, 245). iho amended nuswer likewise sets forth the names only of these workmen and of the reporter, Mr. Everett. The testimony, of , defendants’ said witnesses 270 proves Hint (lie construction' of tlic large rolls nt Edison, N. .T., was not completed until the early part of 1807; that the incomplete and defective largo rolls wore not in use for any purpose except to test them during the period of designing ami construction; that prior to the tests of July anil August, 1SD5, the large rolls were tested with rock on one occasion only, in April, 1894, when they proved to lie a complete failure and had to he dis¬ mantled, redesigned and reconstructed; that dur¬ ing the tests of July and August, 1895 the defects and difficulties encountered were so great that the rolls were inoperative, being constantly wrecked from dug to dug; that, by reason of the defects ex¬ isting in the rolls prior to the cnrly part of 1897, tlie belts were constantly destroyed, plates were constantly broken, even small rock would ride the lolls, grind upon the surfaces of the rolls, choke, stop and stall the rolls, destroy the belts, cause the mandrels to grind upon the housings and to burn out the babbitt of the bushings, necessitating the shutting down of the rolls; that by reason of these and other defects the large rolls were impractical; Hint the breaking of rock by kinetic energy was not understood or developed until the adoption of the higher sledging knobs and other essential improve¬ ments in the early part of 1897; and that neither the giant rolls nor any other part of the plant was in commercial operation until long after January, 1 SOS. The lestimony of defendants’ witness , ,1/r. 1‘lielps, and his inability to design, in .18011, a set of large rolls (hat would be operative, have al¬ ready been considered and pointed out (supra, m 259-202). • he immateriality and hearsay- character of the lestimony of the reporter, Mr. Everett, have al¬ ready been shown (supra. pp.'2!3, 245). Defendants’ witness, lialehcllor, testified that during the entire period of his employment, from March, 1892 to December, 1895, he was engaged in construction work, consisting of the erection of mavhinorg (D.lt., p. 20, Qs. 4-C; p. 41, xQs. 84- S7) ; that he considered that the whole operations, I hat. occurred during his employment, were "one scries of tests”, including the operations nt the lime of the Hoyles accident (D.R., p- 55, xQ. 102); that from an examination ‘of Fig. 3 of the method patent, the only- part of the patents in suit he looked at (D.lt., p. 41, xQ. 82), lie ob¬ served that the friction clutch of the patent dif¬ fered from the wire rope friction shown in De¬ fendants’ Exhibits, Photographs, Nos. 5 and 0- (D.R., p. 30, Q. 80) ; that the sine lining was em¬ ployed and was pounded out from between the plates and mandrels during the entire period of ids employment (D.lt., p- 43, xQs. 92-94) ; that the “knobs or corrugations”, lie couldn’t say which, on the plates were all of uniform height, being about two inches high (D.R., p. 44, xQs. 99-100); that in testing the large rolls great trouble was had with the belts which frequently stretched so ns to become unfit for use and were broken or torn and had to be renewed (D.R., p- 45, xQs. 104- 105) ; that the plates upon the mandrels wore frequently torn off or broken when Jt -wn" " ’ tempted to crush rock (D.B., p. 45, xQ 100) ; that the trouble with the belts continued when the wire rope friction was employed (D.R., p. 45, xQs. 107-110) ; that the rock shown in Defend¬ ants’ Exhibit, Photograph No. 5, is one man s size rock (D.R., P- 40, xQ. 113), Which woukl weigh from 120 to 125 pounds (C.K., p. oo4, Q. 57) ; that when he said that steam shovels were employed to load rock nt the quarry, including 3 or 4 ton pieces during his employment (D.R., p. 40, xQs. J 12-125), lie was min taken , since, iqioii relterticm, lie knew Hint the company did not pos¬ sess nny stcnni shovel nt the time lie left their employment in December, 1805 (D.It., p. 58, xQs. 177-180) ; that very often he observed that when a piece of rock, somewhat larger than the usual, smaller size of rock employed in the trials, was fed to the rolls, the rock would ride the rolls and a. grinding action wonkl take place and that then the troubles with the belts and plates and wire rope friction took place (D.It., p. 48, xQs. ISO- 128); 'that he would not disclose Where he ob¬ tained the photographs, • Defendants' Exhihits, Photographs Nos. 1-0 (D.It., pp. 071-081) and did not know when they were taken (D.It., p. 40, xQs. J 20480) ; that after the shotting down of the plant in August, 1S05, lie wits employed in mak¬ ing tests on the wire ropo elevators (D.H., p. 51, xQ. 140), mid trials were made of the large rolls before December, 1805, when lie left, (D.It., p. 52, xQ. 14S), hut of this lie is miccrtuin (D.It., p. 53, xQ, 151-152); Hint lie laid no information negativ¬ ing the fact that the whole plant was shut down from .Tnnunry to duly, 1890, and that construc¬ tion work was liegnn again in August, 189(1 (D.It., !'• r’l> *<)■ 100); that, as far as he knew, the slugger plates were first used in 1S97 (D.R., p. »4, xQ. 1(51 ) ; that he remembered die burning and slipping of the belts (D.It., p. 55, xQ. 105); llial lie understood from wliat lie was told, that Hie attempt to make briquettes was an utter failure and Hint, as far as he knew, no briquettes were sold or shipped until the year, 1897 (D.R., p. u5, xQs. 100-108) ; that during the years, 1894 "I'd 181)5, there was no shipment or sale of con¬ centrates and that the sole purpose of the entire plant at Edison was to produce concentrates (D.R., p. 59, xQs. 181-182) ; that during the period of his employment the discouragement ut Edison was very great, large sums of money having been expended, au referred to; — ‘■A. They wen; constructed on u wooden fonmliition, east iron bushings mid did not prove n KucccHit— tnkcn out— shorts turned off —put hack on iron foundations— plates put on— iron to iron— failed— platen taken off— plates babbitted— put buck on— wasn't success- fill— taken otr — mandrels turned oil— plates scraped — bedded iron to iron — slugger plates put on— changes made in . tlio bushings— changes made in tlie oiling system— tlirust bearings put on— dust guards on— paeked with wool— continued running until 1900.” Dnf multi nix' witne-m, Gconjc MoKntce, also tea- titled to the innumerable obstacles that stood in the way of the making of the inventions of tlio patents in suit, lie was employed at Edison six years, just when lie does not know (D.H., p. 125, Qs. 3-1). ’Without setting forth in detail tlio troubles, experiments and changes encountered and made in the designing and building of the sin¬ gle machine at Edison, X. ,T., to which George lie- Entee testified, the quotation of his answers to a few questions will prove that there was no public use of tlie inventions of the patents in suit prior to the early part of 1807 and, in fact, prior to the con¬ struction by Mr. Edison of the set of giant rolls for the New Jersey Zinc Company in 1809 (xuprn, p. 258). George McEntee testified (D.K., p. 133, xQ. fit; p. 135, xQ. 74; p. 135, xQ. 70; p. 130, xQs. S0-S7; P. 138, xQ. 05; p. 138, XQ. 90 ) ;— “xQ. <54. Von said during your direct exam¬ ination, hut not. in reply to any question and speaking to Jir. ITurter, who , is presen I, ‘you know what troubles we had cleaning tlie rolls out sometimes.’ Will you kindlv describe fully the troubles which you had in clftining out the rolls at Edison, while you were there? A. Why, yes. At the commencement of run- mug these rolls there was considerable block- up to them, then we would have to open two large doors of hoppers, and we would have to get in there and pry out large chunks of ore, carry them out and put them in to a skip and the ore would he so wedged in between tlie rolls wo would have a lot of trouble get¬ ting that ore out or to move tlie rolls one way or the other. I have nt times put chain hook around the rolls in order to turn them back¬ ward to raise that ore up from between the '"‘‘xQ. 74. Now, kindly state the difficulties which you have in mind? . A. Why, in case of the rolls being blocked with a large chunk of fire or rock the belt would slip and burn the licit— destroy the belt, before we could got the engine stopped dM you t”°“.il]y (1U1 Tlmt Was about all he lli«xO 80 And what would he done during these long periods when the rolls were shut ‘’T Well, there was a number of them shut down, and a number of changes made n, he ' of changing plates, turning off the mnn- °f t I n roll changing of friction pulleys ond hands— wpesnnd^ hands, different styles f plates 1’ ll clag the style 0 hearh^ _ j cun’t remember them oil, so mmuj * ’'"ST- And why were all these changes ”ef mJriS'&cular rolls, the giant A. " n.i . »" ■ ., to overcoine the A. It wns certainly n big improvement, yes. “xQ. !)!). Well, don’t yon remember that the zinc lining was not done away with until the slugger pin tea and the new regular plates that yon have spoken about were put on? A. Yus, that was the time.” Defendants’ witness, Dr. Burd , wns unable to fix the date of the accident to Ilnyles, without refer¬ ring to his account book. lie did not testify that the entries in his account hook were correct (D.l!., p. 1 50, xQs. 23-80). The stipulation did not waive the objection (D.l?., p. 152). There is, therefore, no competent evidence in the record to shew the date of the Ilaylcs accident ( Rudd v. Robinson, 120 *?. Y., 113, 110-120; Nat, Bank o. Madden, 114 Y. Y., 2S0, 2S3-2S4). it would, however, be imma¬ terial if there were. Defendants’ witness, John T. Lang, confirms the testimony above set forth of the other witnesses, The rock would tear the phites off the mandrels, ride the rolls and stall the rolls (D.l?., p. 101, xQs. 80-S3). When the slugger plates were adopted the !!>ne I'l'Mig was eliminated and a good many changes were then made that improved the rolls ( ll.lt., ji. hit, xQs. 87-SO). Even then Lang, who couldn’t tix the times of his employments, couldn’t say whether the rolls were a success or not (D.l!., p- 102, xQ. f)0). Defendants’ witness, Frank 13. Ticknor, was employed at Edison until about December, 181)5 (D.l!., p. Kill, Qs. 5-11). Mr. Ticknor was employed I'.V a company doing business with the defendant, Allis-C’lmlmers Company (D.l?., p. 178, xQ. 70). He describes the troubles with the belts and the attempt to obviate them by the wire rope friction (D.l!., p. 1 (»S, Q. 17). At the time of the accident 1(1 Da, vies the impractical rope friction was still employed (D.l?., p. 171, Q. 31). During the entire period of Mr. Tieknor’s employment, that termi¬ nated in December, 1805, lie wns engaged in mill¬ wright work and carpenter work. The millwright work consisted, of the setting of machinery, most of the repair work being done by the master me¬ chanic (D.l?., p. 181, xQs. 00-107). Mr. Ticknor describes the employment of the zinc lining (D.l?., p. 1S3, xQ. 114) and staled that the object of the wire rope friction was to do away with the slipping and burning of the belt (D.I?>, p. 185, xQ. 125), which, however, as shown (supra, p. 25(1), it was not successful in doing. He refers to the continued troubles with the belts (D.l?., p. 185, xQ. 120). He shows that 1 is II 1 ns at fault by stating that to his recollection the zinc lining wns not used on the giant rolls when he left Edison in December, 1S05 (D.l?., p. ISO, xQ. 155 , this being contrary to the testimony given by eveij other witness. He states that a great many changes were made in the manner I the rails , were operated the last year before be left (D.B., p. 189, xQ 157) He did not know anything wliatevci about the slugger plates with the higher sledging knobs. All that he knew about were the knobs , ml if r i height t ibont t cl a (D H °t!)0, xQs. 158-H11). lie recollected that the ,1 tes 11 frequently lie broken and torn rom he rolls and that rock would ride the rolls (D.l?., „ i«jo xQ. HI3-HU). At least §2,000,000 had been Le t on the plant at Edison, of which a large t was spent the giant rolls themselve (D.l?., p. 101, xQs. 100-172). He never determined the surface speed of the giant rolls when ^running empty or with rock in them (D.l!., p. l->3, xQs- 181-182). He bad no knowledge of the changes in the ?d Its d the bolts r f the end thrus beariims, or of the use of steam shovels, oi of the M plates with the higher sledging knobs, oi of' the' requisite speed, or of any of the other in, - 281 portnn! matters that were introducer! after lie left Edison, N. .T, in December, 1805 ( I). it., p. 194 xQs. 191*201). Mr. Tieknor’s testimony is instruct- ive in that, having presumably the knowledge that existed at Edison, N. J. in December, 18115, Hie only idea of tin; operation of the rolls that lie had when giving his testimony was that the large rolls would “bile” the rock (D.It., p. 100, xQ. 158). ITe had no conception of the action of the rolls of the patents in suit, consisting in the breaking of rock through the kinetic energy expended upon the I'ock by the hammering blows delivered by the higher sledging knobs, revolving at a very high speed with the entire power of the rolls behind them, and then subjecting the pieces of shattered rock to the rolling and crushing action between the rolls. Mr. Mallory 1ms explained that the idea of making large rolls so ns to secure a large au'gle of bile proved to be an utter failure (supra, p. 282). The testimony of defendants’ witness, hid win J. Haddock, is to the effect that when he left Edison, N. >T. in August, 1804, the large rolls had not been tested out, although changes were being made. The necessity for making numerous changes, lie said, was not then realized ns fully as it was afterwards (D.R., p. 224, xQs. 28-29). Such, then, is the evidence. The Court will ob¬ serve that there in not a scintilla of evidence in the nine to tthow Hint before the carl// part of IS!fi there wan nan understanding of the kinetic method of breaking rock or that before the curia part of IS!>7 there wan 11111/ apparatus in existence capable of carrying oat that method. Defendants’ counsel, by means of lead ini/ ques¬ tions, which cannot escape the observation of the Court, continually endeavored to impute to the defendants’ witnesses statements to the effect that the rolls would change in speed, etc., but in no instance did bo obtain from any witness any state¬ ment showing that the kinetic method of operat¬ ing the rolls was in use or understood. He produced witnesses who wore at Edison, N. J. both before and after July 10, 1895, bat lie did not discriminate in Ids questions between the operation of the roils before that date and the operation of the rolls after that date. For in- stance, the testimony of Mr. Tlcknor, referred to by defendants’ counsel (brief, p. 54), is not refer¬ able to any point of time, nor is it of nny im- portnnee, since it is merely the statements of the witness, as to the possible operation of the rolls, made, some fifteen years after the event and years after tlie inventions were evolved and be¬ came known, in response to suggestions made in questions put by counsel who had acquired a thorough knowledge of the Edison inventions. A similar criticism' should he made of the ex¬ pression, “high speed”, suggested by defendants’ counsel to defendants’ witnesses, as appears from the testimony quoted by defendants’ counsel (brief, pp, 52-53). The witness, hearing the term “high speed” in the question, naturally employed it in tlie answer. Such testimony is condemned by the Courts (infra, p. 290). The meaning of the expression, “Iiigli speed”, nowhere appears. The evidence shows, as already explained (supra, pp. 240-250), that prior to July 10, 1895, the large i'oils were rim at such a speed that they could not, by any possibility, break rock by kinetic energy even if, contrary to the fact, they had been pro¬ vided with the higher sledging knobs and other essential improvements. The fact that the large , rolls at Edison were capable of crushing at intervals, between repairs, only an insignificant number of tons of rock during tlie test thereof, proves nothing except that be- 2S2 fore the curly part of 1897 the rolls operated to grind small pieces of rock m the manner of the rolls of the prior art. Tho history ot tho making of tbo Edison, kinetic, giant rolls proves that tho size and proportions of tho rolls aro only two of tho many essential features distinguishing tho rolls from tho prior art. Dofondnnts' counsel have mis¬ stated the testimony of complainant's witnesses with respect to tho mnsslvo character nnd kinetic onorgy of tho Edison, giant rolls. Messrs. Dorter, Mnson nnd nontloy Bhow that the groat wolght of tho rolls Is essential to tholr kinetic operation nnd that the Wall and nil other rolls of the prior art did not brenk rock by tho oxpondlturo of kinetic energy. Defendants' counsel refer to Mr. TTerter ns one “whose particular duty has been to design the Edison crushing rolls’’ (brief, p. .1.02). This is clearly a misleading statement, because Mr. Her- ter lestilied in the question following that quoted I'.v defendants' counsel, that we were to under¬ stand, from his statement that lie designed the rolls, that; he was an expert draftsman (C.H., p. 109, Q. (!). The determination of matters involved in the designing of the Edison giant rolls is made h.V Mr. Edison and Mr. Mason. Mr. Hortcr is then employed in doing the actual drafting work (E.U., p. M7, Qs. -11-12). Emm (lie foregoing incorrect basis, defendants' counsel (hrief, p. 102) endeavor to make it ap¬ pear that Mr. Hector testified that the weight of the roils was intended solely for the purpose of giving them strength nnd had nothing to do with the mode of operation of the rolls. They .omit Mr. H crier’s statement Hint “the heavier the roll, the greater the speed, the more crushing power is in tlie rolls” (C.lt., p. 128, ItDQ. 171). Mr. Hertcr explained that in the construction of the Edison giant, rolls at Little Falls, the fact that the rock Iheie is very hard and required a strong crushing power led to making the Little Fall rolls heavier 283 than usual (O.Ib, p. 129, ItDQs. ,172-179). The weight of the rolls also gives them sufficient strength to take up the strains and withstand breakage (CM?., p. 128, xQs. 1CC-107; p, 130, EDQ. 179). Mr. Mnson testified that the weight of the rolls is of very great importance as the theory of crush¬ ing rock by kinetic; energy necessarily takes in consideration the kinetic energy of the roll which depends upon the weight and mass of the roll as well as upon the speed of the roll (O.It., p. 147, Qs. 43-44). Mr. Hentley shows that the Edison, kinetic, giant rolls are not made as light ns consistent with the strength necessary to withstand the crushing strains, but are made so heavy that they shall have the mass lieccssury to develop the ki¬ netic energy required to crack the rock (which involves the mass nnd the speed), and that it is necessary to put the required mass into the proper compass (shape or proportions) with respect to tho work to be done (C.1L, p. 189, xQs. 43-44). He also says that defendants have copied the Mitoit rolls with respect to weight and dimen¬ sions so ns to obtain the kinetic energy required to crack the rock by Edison’s kinetic method when the rolls are rotated at their high speed (C.R., p. 175, fol. 523). It is not necessary at this stage of the case to show that the construction nnd mode of operation of the Edison kinetic, giant rolls are fundamentally new. The prior art shows no ex¬ ample of belt-driven rolls provided with surfaces not smooth. The hammering knobs are new. The higher sledging knobs that break the rock above 284 the rolls, through blows delivered with the whole power of the rolls behind them, are new. As here¬ tofore shown, the Edison kinetic method and ap¬ paratus are new by reason of many other import¬ ant features distinguishing them from anything found in the prior art (supra, pp. 188-107). None of tlio troubles encountered nt Edison prior to the curly port of 1807 ore encountered In tho operation ot tho kinetic Blunt rolls or tile patents In suit. The slutemcnls ot dcrondnuts’ counsel to tho contrary are disproved by the Hr. Klots, president of the TJ. S. Crushed Stone Company said that (C.R., p. 503, Q. 4): “Since we began operating the (Edison kinetic giant) rolls, we In wo never hud one minute'* delay by r canon of Ilia rolltt. We have crushed rock by the rolls in some in¬ stances weighing 14 tons. I mean one piece of solid ruck. / find that the capacity of the rath in practically unlimited". Mr. Klotss also stated (C.R., p. 50!), xQ. 20);- “As far as the maintenance and repairs are concerned, up to the present time we have spent so little that we have not taken it into consideration in our cost". Defendants’ counsel refer (brief, p. 47) to Mr. Mason's testimony, infereutinlly, in support of their misstatement (brief, p. 40) that the troubles encountered prior to July 10, 1S05 are sub¬ stantially the same as have been encountered in the operation of the rolls embodying the inven¬ tions of the patents in suit. They say that Mr. -Mason testified that it is customary to arrange the rolls for the renewal of the plates. Mr. •Mason testified that it is customary to arrange for the renewal of the plates because the knobs of the slugger and regular plates of the Edison giant rolls will he worn down in the breaking and ' 285 crushing of rock (C.R., p. 224, Q. 10). This proves that the Edison, kinetic, giant rolls of the patents in suit possess tho essential quality of durability because it is not necessary to renew the plates until the plates have been in use for such great length of time ns will result in tho wearing down of the powerful and massive ham¬ mering knobs of the slugger and regular plates. No words are necessary to characterize such mis¬ statements of the evidence. Defendants’ counsel (brief, p. 47) also say that Mr. .Knowlton said that at Sibley the plates of the Edison giant rolls broke and had to be re¬ newed by new plates. The fact is that Mr. Knowlton testified that at Sibley a single plate was broken shortly after starting, due to the carelessness of the erecting foreman, (C.R., p. G2G, xQ. 103). To replace that plate a few spare plates of poor quality were obtained, one or more of which broke so that the Sibley Company changed the foundry to obtain proper plates (C.R., p. G2G, xQs. 103-104). Defendants’ counsel also refer (brief, p. 48) to the testimony' of Mr. Mnson and Sir. Herter in support of their misstatement that the Edison crushing rolls now in use are frequently stalled. Sir. ITertcr, in his testimony referred to, made no mention of the stalling of the rolls, but stated that in 1807 and 1S08 the experimental machine was perfected in accordance with the inventions of the patents in suit. Defendants’ counsel here concede by their argument that Sir. Herter, in his answer to xQ, 220 (O.R., p. 580), was referring to the period of 1807 and not to the time of the Baylcs accident, ns they erroneously stated else¬ where in their brief (brief, p. 55), as above ex¬ plained (supra, p. 2GG). Sir. Slason testified that an- inexperienced oper¬ ator stalled the New Village rolls because he fed 28(5 successive charges of rock to the rolls after break- iug and crushing one charge of rock and before the rolls had regained sufficient speed and power to break and crush the next charge of rock (G.B, P- 148, Qs. 25-28). This proves that be- fore the early part of 180" the kinetic method of breaking rock was not understood and could not have been practiced, because, without an under¬ standing of the kinetic method of operation, the roils even in their perfected condition cannot be used to break rock masses. Mr. Harsh, of the Kelly Island Lime & Trans¬ port Company, testified that the Edison, kinetic, giant rolls will break rock, including 10 ton pieces, ut the rate of from 12,000 to 15,000 tons in 10 hours (OR., p. 034, Q. 35), a far greater tonnage in 10 hours, of immense rocks, than the rolls at Edison could grind, of small rock, during the greater part of the months of July and Au¬ gust, 1805, between continual break-downs and repairs. Other similar statements made by defendants' counsel (brief, pp. -1S-40) will be found, upon reference to the record, to be without foundation. Mr. Edison overcame the obstacles that stood in Ids way before the early part of 1S0T, and the kinetic, giant rolls of the patents in- suit are oper¬ ated without trouble or a minute’s delay. Tho evidence proves thnt the zinc lining of Edison potent No. [567,187 presented a serious obstacle In the ranking of tho Inventions of the patontB In suit. Tho statement Quoted from tho lllo-wrappor and contents of Edison patent No. r.07,187 is applicable not to tho giant rolls, but to an ordinary pair of grinding rolls for reducing material after It left the Intermediate rolls beneath tho giant rolls. Defendants’ counsel have introduced upon the argument of this suit, under objection (supra, p. 21o), the file- wrapper and contents of Edison patent No. 507, 1ST. From it ’they quote (brief, IP® ’78 270! pp’ 2G0> m> 271, 274, 275, -78, 279). Neither defendants nor Mr Edison mdo a*fmC li,linS an<1 use at Edison, Jf j pnor to tlie adoption of the slugger plates when tt eliminated, was disastrous ’ It is certainly unfair to produce at the arm, charnot" '“‘‘If6 co"tnining a statement of tWs ch rnctcr so that complainant shall have no on portunity to explain it or reply to it defendants have also introduced the file-wrapper nnd contents of the application for the method pa ent in suit, from which it appears M p 503; supra p. 30) that at the time of the prose? cation of the applications for the patents in suit, tho rolls of the Edison patent No. 507,187 wore mn ordinary pair of grinding rolls for re- (luting the material after it leaves the inter¬ mediates, which in his mill in Edison, N J oaf Hui gillllt mlls- Tills pat- uit lias no bearing upon the present case?” Hence we have, in the record as it stands, a complete answer to the unwarranted action and argument of defendants’ counsel. The zinc lin¬ ing of Edison patent No. 507,187 was found to give excellent results in practice when employed in an ordinary pair of small grinding rolls, form¬ ing a tertiary crusher, but was disastrous, as the undisputed evidence shows, when employed on the giant rolls in an attempt to break rock masses. Hut even if Mr. Edison’s attorney had been mistaken in 1S110 with respect to the zinc lining as applied to the giant rolls, lie was free from the error when prosecuting the applications for the patents in suit ana the only logical inference that could he drawn from the error would he that the problem of the giant rolls was, ns the evidence ’hows, one of perplexing and well nigh insupor- tide difficulty. For years it wns impossible to de¬ termine wlmt stood in the way of success or what n’ould lead to success. Tlicro was no public sale of the inventions of tho intents In suit until In the hitter part of 181)8 or he early part of 1800 Mr. Edison Installed a set of dnetle, {riant rolls for the Now Jersey Zinc Coin- any. Tl,° defense of a two years piddle sale Is rltliout support In fact or law. No such defense Is at up In the answer. The only defense relnting to a public use or sale at up in the answer is the alleged defense of a liblic use (D.H., p. 0, par. XV; p. 104, stipule- on amending answer). Therefore, under §41)20 f the Jicvised Statutes, the alleged defense' of a vo years public „su js not available to defend- However, on the facts proved by the evidence ;forc the Court, the alleged defense is without ipport in fact or law. Defendants’ counsel quote inef, p. (12) from the testimony of Mr. Mallory -R-, p. 0(10, xQs. 40-44), omitting his answer xQ- 42, showing that Mr. Edison, for the great nm of money contributed by him, took stock of e IS. J. & i'a. Concentrating Works up to the muni of the authorized capital, and that the ""P'iny stil1 °"’es him several hundred thou- d dollars. dr. Mallory testified, under objection (C.It., p. >), that in 188S or 1880, years before the inven- 1,8 °r the indents in suit were in Hie realm of u inland, a license agreement was executed he- en i Iv. liidison and the said company covering on .ioii8 already made and any that might be . . . S' w,!m Edison, but as a matter of fact, Mr. Edison neve received any royalty (CM., p. 001, xQ. 44) The plant at Edison wns not commercially operated mi- t long after July 12, 1808, if it was ever commer- o f “ Wfls a"Md0'>«l in 1000 The most that could be said for the allied license agreement, wliicl, is not i„ evidence because f ie defense wns not. pleaded as pointed out in tiie objection (0.11., p. (!(I0), is that, if it was intended to apply to the inventions of the patents in suit, which does not appear, royalty should be paid un¬ der the patent*, which were not granted till MO I Xo royalty ever was paid. Such is the evidence upon which defendants’ counsel allege a two years public sale. A public sale of wlmt? And when? The cases referred to by defendants’ conn sol (brief, pp. 04-05) all involve tlm sale of a. device embodying a completed invention, such ns a ma¬ chine. Here there was neither a i ( 0i machine in existence when the alleged license agreement wns made in 1888 or 188!). Moreover, it' appears from the cases cited by de¬ fendants’ counsel, and it is well settled, that a sale for experimental purpose s is not. a public sale and n'ill not bar the rii/ht to a patent. In the ease at bar, if the license agreement of 1888 or 188!) re¬ lated at all to the inventions of the patents in suit, it could have had no application thereto except as 291 e of inchoate rights which might;, through ox- mulls thereafter to he conducted, eventually t in something tangible when the patents, if should he granted. i! eases showing that a two years prior sale of ■tiele, embodying even a completed invention, do primarily for experimental purposes, will nvalidiite a patent are hereinafter set forth "< pp. 29S-300). The position of defendants’ nil comes to this, that Mr. Edison could not ge with (lie N. J. & Pa. Concentrating Works lie conducting r c\| i e ts -Inch might to the making of tin invention, without for- g the right to apply for a pnlent should an tinn lie made. Iioritles Mliowluir Unit there was no pulillc use e Invalidating the patents in suit, bunion Is upon defendants to establish, beyond a ible doubt, tho alleged defense of a two youru prior “8“ ®r Bnlo. All that defendants have shown Is an t; tlie harden is upon defendants to establish, 1 a reasonable doubt, the alleged defense of a -■ars prior public nse or sale is well settled, ted in tlie following cases, ms Co. e. Ilnthhone, 20 Fed. 202, 201, and ■it°d ; Pacific Co. p. Untie Co., 55 Fed. 7(S0, (>, 1 tutor T. M. Co, r. American Graph. Co., id. 800, 800; Mast, y.’oos dants’ >o to sbow t,mt pri°r wliatcvc.. , r f '0,'e "’,ls n,V "Mtlcrstandiiig ' Imtuei of the inventions in suit and, by means »r loading. questions, endeavored to suggest to the witnesses tlie early use of the various steps of the inventions. hi Parker v. Stabler et ah, 177 Fed., 21 0 (CO , A.), it is said (head note 1) ■ “The burden .of proof to establish a defense of prior use to invalidate a patent rests on the defendant, and, where oral testimony of wit¬ nesses speaking from memory only is relied on, u must be so clear and satisfactory as to convince tlie court beyond a reasonable doubt” Tlie Court also said (p. 213) ; _ “And in tlie llarbed Wire Patent Case tlie court said : Tlie frequency witli which testimony is tortured or fabricated outright to build up the defense of prior use of the thing pat¬ ented, goes far to justify the popular im¬ pression that the inventor may be treated as tlie lawful prey of the infringer.’” in American Ban'll Protection Co. v. Electric Pro¬ tection Co., 181 Fed., 350, it is said (head note “2. Tlie defendant in an infringement suit who attempts to defeat tlie patent by evidence of prior public use not only lias the burden of proof, but must establish tlie fact by clear and satisfactory evidence beyond a reasonable doubt.” If durability bo one of the qualities to bo attained, no use, however long, necessary lo test tho durability of tlie Mr. Justice Itradicr, in tlie case of Elizabeth V. 203 icc me ii I Co., 07 U. S., 120, hereinafter more fully furred to, In considering' this question, said: “If durability is ouu of the qualities to be attained, u long period, perhaps years, may be necessary to enable the inventor to discover whether bis purpose is accomplished. •‘And though, during nil tlmt period. UK .MAY NOT FIND THAT ANY OHANGKS AltK NiiOUSSSAK-Y, yet lie may be justly said to be using bis machine only by way of ex¬ periment; and no one would say that such " use, pursued with a bona fide intent of testing Hie qualities of the machine, would be a pub¬ lic use within the meaning of the statute.” In the American and Jinglish lincyeiopediu of -,1 Ed- Vol. 22, p. 338, it is said tlmt the 'criincnt in public, more than two years, prior the date of the application, in testing the opera- a of the invention, does not invoke the bar of the tute, “though no changes mug he made ” in the •ice by reason of the experiment. •hiHlico Bradley, in commencing the consideration the question of alleged public use, stated: “jK is Perfectly dear, from the evidence, that he did not intend to abandon his right to a patent” b Ho then showed that the use of the Nicholson .pavement in Boston, on one of the public streets, for a space of about six years before lie filed his ap¬ plication for liis patent, wus experimental, and for the purpose of testing its durability and other qualities, and could not be construed as a public use. Mr. Justice Bradley further stated : “The use of an invention by the inventor himself or by any other person under his di¬ rection, by way of experiment, and in order to bring the invention to perfection, has never been regarded ns such a use. Curt. Pat., Sec. 381; Shaw v. Cooper, 7 Pet. 292.” Finally, Mr. Justice Bradley said; — Robinson on Patents, Vol. 1, Sec. 355, states: “A »se clearly experimental, in good faith and for a reasonable time, tliougb it may show that, the invention is in fact complete , does not alleut the exclusive rights of the inventor or constitute a dedication to the public ” i lilixtibeih v. Pavement Co., 97 U. S., 12(1. Mr. “When tiie subject of the invention is a machine, it may be tested and tried in a build¬ ing, either with or without closed, doors. In either case, such a use is not a public use, within the meaning of the statute, so long as the inventor is engaged, in good faith, in test¬ ing its operation. He may see cause to alter it and. improve it or not. His experiments will reveal the fact whether any and what al¬ terations may be necessary. If durability is one of the qualities to hr. obtained, a long period, perhaps years, may be necessary to enable the inventor to discover whether his purpose is accomplished. And though, during all that period, he may not find that any changes are necessary, yet. he may be justly said to be using his machine only by way of experiment; and no one would say that such a use, pursued with a bona fide intent of testing the qualities of the machine, would be ii pulilii: who within tlio meaning or the "Hu tony tin he then not voluntarily allow others to make it and line it, and so lony an it in not on sale for yen era I use, ho keeps the invention under liis own control, and does not lone hin title to a patent. •‘II; would not lu* necessary, In suoli a case Hint tlio ninuliinc should bo put up and used’ -U Fed., 859, 892 and W8,J42; 0„ v. Struthvrs, 57 Fed., (137; Innis \. Boiler Works, 22 Fed., 7S0; Raster n Paper Bag Co. v. Standard Co., 30 Fed, 03, 00; Draper r. Wattles, 3 Ban., & A. CIS, 020, Fed. Cas. No. 4,073; Hall v. Macncalc, 107 U. S., 90; Manufacturing Co. v. Sprague, 123 V. S., 250. .. In Draper v. Wattles, supra, “the device sold did not embody the most complete and perfect form of tlio . invention.” Walker on Patents, Sec. 90, states : “If, however, the nature of the invention is . such that the inventor is obliged to put it into the hands of others for crucial experiment, ho may sell specimens to those others for that purpose, and such a sale will not he obnoxious to (he law now under consideration.” (Citing Graham v. McCormick, 5 Bnnn. & ■Awl., 244; Graham v. Mfg. Co., 11 Fed. Bep., 142). In National Co. v. American Co., 178 Fed., 79 (C.C.A.),- cited by defendants’ counsel (brief, p. (14), there was a sale of a completed machine by the inventor. The evidence showed “that the ma¬ chine was in perfect working order when delivered, and no one made any experiments with it” (p. 82). The Court, therefore, held that it was “clear that it was not made for experimental purposes” (p. 82) and for this reason held that (p. S2) ; — “The authorities holding that the sale of an article primarily for experimental purposes will not invalidate a patent arc, therefore, in¬ applicable.” “If necessary, in making tests, an inventor may sell a machine on trial, so ns to get it fully and fairly tested, in practical use, by the class of per- sons for whose use it is intended, and such sale or use, even for more than two years, if made for the' purpose of practical test, will not be n suf¬ ficient sale or public use to invalidate the patent.” (Sue Graham v. Geneva L. 0. if. Go., 11 F., 138), Tho cases cited by defendants’ counsel upon tbo alleged defenses of a two years prior public use and sale either liavo no application to the facts of tho case at bar, or show that tho defenses are Invalid. In Manning v. Isintjhiss Co., 10S U. S., 402, the inventor allowed Norwood and his son “the an- restrict el use of the patent during the period men¬ tioned without in junction of secrecy or other con¬ dition" (defendants’ brief, p, 01). . In Jcnncr v. liowen, 139 Fed!, 550, “tho inventor made and set up his machine for Bowen for tho purpose of being commercially operated. Bowen understood its mechanism and its method of use, and was under no restriction as to the place or manner of its operation, and under no obligation of secrecy” (defendants' brief, p. 01). There was a S|de of tin.- complete machine by the inventor to Bowen for commercial purposes only. Bowen did not use tho machine experimentally or to teRt it, but used it for profit only (139 Fed., 5G1). In llybcrt v. Lippmun, 104 U. S., 333, the facts were the same as in the two cases just referred to. The principles and exceptions laid down by the Supreme Court in Eybcrl v. Lippmun, when ap¬ plied to the case at bar, show that there was no public use. The Court said: “Nevertheless, if its inventor sells a machine of which his invention forms a part, and al< lows it to be used without restriction of any hind, the use is a public one, within the mean¬ ing of the law. So, on the other hand, a use necessarily opened to public view, if made in good faith, solely to test the qualities of the invention and for the purpose of experiment, patent la w.'”^0 w,tWn t,le fflcnnine ot El'zahcth v. Pavement Go., 97 17. S„ l-o , Sliuw v. Cooper, 32 U. 8., 202.) Tim other cases cited by defendants’ counsel (bnef, pp. 37-44; 60-08) show conclusively that In the case at bar there was neither a public use nor sale. Judge Hazel reviewed the leading cases in Amerkm &raph- 140 tntn°f,UBe °r Ba*° °r pubIlcaUon will forfeit the right to ob- , ,, palcnt tor an Invention unions It clonrly Indicates n- nlentlon on tho part of tho Inventor to abandon his right to obtain tho patent. Victor T. M. Co. v. American Graph. Co., 140 Fed., 860, 860, as follows;— "The burden, however, is upon the defend¬ ant to shorn that the invention was aban¬ doned. Wyeth o. Slone, Fed. Cas. No. 18,107 ATor, indeed, should evidence of abandonment rest upon doubtful or controverted inferences The publication in the Electrical World is not entitled to the probative weight claimed by tho defendant. The rule is that the prior publication, in order to anticipate, must fully and clearly describe the invention, so as to enable the skilled in the art to completely understand it and reproduce the apparatus without assistance from the patentee. Jiadische Aniin (C- Soda Fabrik v. Kalle (C. C.) 94 Fed. 163; Cohn v. Corset Co., 93 U S. 366. The prior publication, based upon the article mentioned, is not within the rule stated.” This clear statement of the law has been fol¬ lowed in many subsequent cases. Tn Underwood '■ Typewriter Co. v. Elliott-Fishcr Go., 105 Fed., 927, 930, Judge Ray held ns fol- patent or publication relied upon imist?byde scriptivo words or drawings, or by both, con¬ tain and exhibit a substantial representation of the patented improvement in such full clear, and exact terms as to enable any pei.! son skilled in the art or science to wldch it z ^;;Sono»ninke’ When Sir. Edison so for perfected the Inventions of the patents insult that the massive rolls would ornclc the rock and continue the rotation, tho hum. known slip of a bolt upon a driven pulley, especially when subjected to a sudden or violent overload, be came a useful expedient to permit a reduction i„ speed ortho rolls while breaking and crushing rock and was utilized by Sir. Edison. The argument of defendants' counsel that the sli . . the bolt Is not one ol the slipping power connections mentioned In the patents or tho known equivalent of the oilier pted Ot the rolls Is untenable in view of tbo evi- , - I , V" “'""nitonts are covered by a patent nbctbci the inventor thought of them or not mi Fed. 487, 400). Ml'11 Thc rudicnl change made in the construction and fU,U'!)" of tlle «>H" to the early part of HOT, um II l slugger Ills and high speed and other "" V ' L"s '<-,(> empl yed ippea, fro , tl suious troubles had with the driving belts during “ pu‘ 11,11 Preceding the early part of 181)7. si nr , 7 ' 10 l0'V s,)L'od 11,1(1 the absence of the ,v "s 11,1(1 "ti'ur improvements, the rolls '"'"ot H'ltlicient kinetic energy to crack the inik i ihc rotation. Therefore, thc ' 8 down to such an extent that they he- >1 e stalled, whereupon the driving belt would •sen no MV ’• I,0Ugl1 ■trotcl,lnft slipping and con- •irnl r! Ilmkr 11,1(1 breaking. When the high speed le s agger knobs and other improvements were employed in the early part of 1S97, the kinetic energy of the rolls was sufficient to break the rock and continue the rotation. Therefore, the stretch or slip of the belt upon the roll pulleys, which had previously been disastrous to the belt under the conditions stated, became a useful expedient, as a . slipping power connection, permitting a reduction in the speed of the independent, massive rolls when delivering their hammering blows upon the rock. That the slipping of the belt upon the roll pul¬ leys is one form of the slipping power connec¬ tions and other means specified in the patents for permitting a reduction in the speed of the roils, while breaking and crushing rock, has been fully shown ( supra, pp. , 39-41 ; 44-50 ; 89-99 ; 101-103 ; 124; 120-132). It has also been shown that the slip of a belt upon roll or other pulleys was known at the date of the inventions of the pat¬ ents in suit, as a means for permitting a reduc¬ tion in tho speed of the pulley and roll, driven by the belt, especially when subjected to a sudden or violent overload (supra, p. 127), and thus pre¬ venting a destruction of the belt under ordinary operating conditions (supra, same pages, especially p. 127; and D.B., p. 304, xQ. 200; p. 247, Q. 31, showing that date of passage referred to is 1888). A patentee is entitled to the benefit of equiv¬ alents whether be thought-, of them or not. In Oehrle v. Horstmunn Co., 131 Fed. 487, 490 (cited, supra, p. 100), the Court stated the rules as fol- “In contemplation of law, after lie lias fully described his invention, and shown its prin¬ ciples, and claimed it in a form which per¬ fectly embodies it, unless lie disclaims other forms, he is deemed to claim every form in . which liis invention may be copied. Murphy v. Eastham, 17 Fed. Cas. 1034, No. 9,949; 304 Will-tins v, Denmcad, 15 How. 330; drier v. Castle, (C.C.) 17 Fed. 523. All equivalents are covered, whether the Inventor thought of them or not. Burden r. Corn¬ ing, i) Fed. Cos. 70, No. 2143.” When, therefore, Mr. Edison so fur perfected the inventions of the patents in suit ns to enable (lie innssive giant rolls to crush the rock ami continue the rotation, instead of being brought to a standstill, the slip of the belt, which under the previous inoperative conditions of the rolls hail caused the burning and destruction of the belt, became a useful expedient, employed by Mr. Edi¬ son, as explained by Mr. Huntley (C.H. p. 404, fol. 1482), for permitting u' reduction in the speed of the rolls when breaking and crushing rock. The early diiliculties arose, not from the slip of the belt, but from the complete stoppage of the rolls. The slip of the belt on the roll pulleys was never eliminated hut continued to he one of the slipping power connections employed by Mr. Edison (supra, pp. 30-41; 44-50; S0-00; 101-103; 124; 120-132; and CJ.H., p. 483, fol. 1447). It proved, in practice, that the friction-clutches were an unnecessary addition, the slip occurring between the belt and the loll pulleys afforded a slipping power connection m itself sullicient to permit the necessary reduc¬ tion in speed of the rolls (supra, pp. 48-40). The elimination of the friction-clutches in no way changed or affected the operation of the rolls (supra, pp. 48-40). Mr. Edison, at New Village, and Mr. Knowlton, at Sibley, accordingly made the pulleys fast on the roll shafts (supra, pp. 48- 4!))' Tllis arrangement defendants copied at l’ekiii. Therefore, the argument of defendant’s counsel and the cases cited by them (brief, pp. 108-117) have no application, since (n) the slip of the belt is stated in the patents to be a slipping power connection, the belt operat¬ ing "through slipping friction” to permit a redac¬ tion in speed of the rolls (supra, p. 47; pp. 30-41; 44-50; 80-00) 101-103), (h) since the slip of the belt is codcededly and obviously an equivalent, of (.he other Uiciuis speci¬ fied in the patents ns equivalents for slipping power connections to permit a reduction in the speed of the rolls (supra, pp. 30-41 j 44-50; 80-OOj 101-103; 124; 120-132; and C.E., p. 483, foi. 3.447), and ■ i i ■ • ,* » ■(e) since the slip of the holt wits a my-kmen cq a i vulon t for permitting the reduction in speed of it driven pulley and roll at the dates of the in¬ ventions and patents in suit (supra, same pages, especially p. 127; find p. 303). The inventions hrh in lib why limited tii tilh iViie- tlon-cliltclies, Wllicli tiro hil unimportant dctnll men- tinned billy in claims B mill O of the apparatus pat* cut. Tlic patents mention three elasses of equiva¬ lents for the friction-clutches, all of which defend¬ ants employ. Defendants employ every cioiiioiit of tlic claims of tile method patent rthd of claims i, 2, 8, 4 mid 7 of the apparatus patent, Tlie question of the Omission of an clciliciit is hot Involved, Mr. Edison did not invent or patent n friction-clutch; nor docs a friction-clutch break rock by kinetic energy. Defendants! counsel argue (brief, pp, 108-117) that, because defendants have followed Mr. Edison and do not employ the friction-clutches mentioned only in claims 5 and C, of the apparatus patent they do not infringe any claim of either patent. Since tlic patents specifically state, that tlie fric¬ tion-clutches ni'e oiily h preferred fdrm for per¬ mitting a reduction in the speed of the roils when breaking and crushing rock and mention 300 three classes of equivalent devices to accomplish the same purpose, every one of which defendants employ (supra, pp. 30-41; 44-50; 80-00; 100-100), (lie defendants infringe claims 4 and 7 of the ap¬ paratus patent as well as the claims of the method patent and claims .1, 2 and 3 of the apparatus patent. The construction of the claims and do- fendanis' infringement thereof Iinve licen fully dealt with (construction, supra, pp. 31-50 and 100- 171; infringement, supra, pp. 20, 27, 30, 38, 40, 50, 52, 53, 02, SS, 100, 171). Mr. Edison invented and patented a method and apparatus for breaking rock by kinetio energy. Both method and ap¬ paratus are fundamentally new. Defend¬ ants have appropriated both the method and the apparatus in their entirety. He did not invent or patent a friction-clutch; nor does a friction-clutch break rook by kinetio energy; nor is it an essential part of an apparatus for so doing. The claim made by defendants (brief, pp. 108-129) that they do not infringe, because they have not appropriated the friction-clutch also, is so devoid of merit, substance and equity, like the other defenses interposed, that it is not conceivable that any court will permit them to escape the consequences of their wilful, wrongful acts, by so construing the broad claims of the patents as to destroy the protection to which Mr. Edison is justly entitled. Tlio filing (Into of the apparatus patent 111 suit, No. 072,017, Is July 10, 1807. Therefore, the alleged defense nl'iitwn years prior public use or sale has no application to any of the claims of the apparatus Reference to Defendants' Exhibits, Certified Copies of the Pile-Wrappers and Contents of the application for the two patents in suit (D.It., PP 542, 500) , sliows that on May 3, 1000, the Examiner required a division of the application filed July 18, 1807 between the two method claims and the remaining claims, which related to the apparatus (D.R., p. 570) ; that on August 1, 1000, the appli¬ cation for the apparatus patent was executed (P.R., p. 508) ; that thereupon an amendment, can¬ celling those parts of the original application that related solely to the apparatus, was prepared and filed August 0, 1000 , together with tiie divisional application for the apparatus patent (D.H., p- »»(), The amendment stated that the divisional ap¬ plication papers on the apparatus” had been pre¬ pared “in view of the Examiner’s requirement for division”; nnd that “the divisional case will he filed III totslj\ tl tl is n c d l t (D.K., p 5S0) as it was. Nevertheless, defendants’ coun- si-1 without disclosing these facts, have the hardi¬ hood to argue (brief, p. 72) that under the practice „f the patent office, the application for t lit i appa¬ ratus patent was not filed as a division of the np- n Mention filed July lfy 189<« F So description forming part of the application for the apparatus patent contains only found ill the original application filed July 1G> ^<17 except the introductory paragraph referring * . . O..U o„. dlgUt ZfirJhw >• to b;‘ti-t'».»a»«.i ■no chaiu/c whatever, because, as shown on pages 7 i 73 of this brief, where claims 6 and 7 of Mie appli¬ cation ns originally filed on July 10, 1S9. me quoted, it appeared from the original application that the massive rolls, as than darned, wo* ,i>!fii ui.-unhs of uniform height anil one oi 308 more sets of projecting knobs of prettier height;’ as stated in original claim 7, or wore provided with “projections of prettier extent for sledging- ”, ns stated in original claim (i. Clearly, 'therefore, when, in compliance with S 4S88 of the Hevised Stun tea, Mr. Edison pointed ont and distinctly claimed the part, improvement or combination which lie claimed as his invention, he stated specifically, with respect to the “project¬ ing knobs of greater height’’ or the “projections of greater extent for sledging”, that it was enough if there he one set provided, and, accordingly, lie claimed in the original application, ns tiled July .Hi, 1807, the combinations embodying his inven¬ tions whether one or more sets of the higher, sledging knobs were provided on the surfaces of the massive rolls. In view of these facts, the contention of defend¬ ants’ counsel ( brief, pp. 71-78), that because, in the description and drawings of the application for the apparatus patent, Mr. Edison illustrated and de¬ scribed only one of the two massive rolls as being provided with the higher, sledging knobs, the -up- plication for the apparatus patent is not to be con- sidered as a division of the original application, bled July 10, 181)7, is without any support in fact as well as in law. Hie point can have no possible application to ni-3 ..f the claims «,f the apparatus patent except claim 3, and Is clearly had as to claim 3. The essence of the invention, ns far as the higher, sledging knobs arc concerned, is that there be at least some higher sledging knobs, one or more sets, in order to break up, above the rolls, the large rock masses. In claim 3 of the apparatus patent the ns foil 1 "f t,l" j.nve claimed 1900, only have been an invitation to'i'dratos, such as ^Toiir t* mul ^lefeii^ ,.,'ws and they were using onij and higher, sledging kno is. defendant to pmuc liere interposed. i’t;rc 3. court - «»’■ ' u ,.ns decided the precise point "Inch n 310 are here considering in the enso of Vidor T. M. do. v. American Graph, do., 145 Foil., 350. Thai ease was brought on U. S. patent No. 534,513 to Berliner for a gramophone, granted February 1!), 1S05 upon an application tiled March 30, 1802. Only claims 5 and 35 of the patent were involved in the suit. A defense of two years public use be¬ fore I lie filing of the application was there set up, as here. It appeared, however, that on November 7, 1SS7, Berliner had filed an application for U. S. patent No. 504,580 for a gramophone and that the application therefor was still pending when the application for No. 534,543 was filed in 1802. Reference to the two Berliner patents will show that, Fig. 3 of No. 534,543 and Fig. 10 of No. 504,- 5S0 and the descriptions thereof (p. 4, line 05 to p. 5, line 33 of No. 534,543; and p. 4, lines 90-127 of No. 504, 5S0) are so essentially different that no one w.„,ld ever suppose that the machines illustrated and described could, from any point of view, be regarded as the same. Nevertheless, Fig. 10 and the description thereof of No. 504, 5S0 were snlfi- cent to warrant the making of the claims, 5 and 35, nl No. 534,543. Therefore, the Circuit Court of Appeals held that the second application was to be considered as a continuation of the first applica¬ tion although there was nothing whatever, except tlie filing dates, lo connect the two applications, and that it was not necessary to consider the de- 1 f 11 * 1 1 i I il 1 c I c. (I 1 H] <- ti t 1 t 1 II llegcd publ use. The Circuit Court of Appeals, nllirming •Bulge Basel, said (145 Fed., 350, 351);— r.“'rnp specifications in that application for i ni/nr ’nVtilt!i fU e,10,|gh to warrant the male- tag of the claims here in controversy (5 and do). At any time the application might have I >u n amended by adding such claims, and in "in opinion it is immaterial that, instead of . - - 311 thus amending it, lie took the broader claims on another application, filed wh. e tl e fust was pending. The second niny fnii '31,e » •w"'""” p"“"‘ ill suit. iirnnrinu tlie evidence, nt- Defendants' counsel, iginningt ^ o£ tempt to argue (inn- > P ■> . ].nobs nre on tl.o rolls is dillerent when s'uggf shlgging one roll only from vlmt it :« * flns above knobs aie on both rol «. .^tolial, if true. The given, tlie point Mould ;tcd hl/ any possible invention* are in no naj ? due to the difference in the opcraUon of tho^ ^ ^ ^ presence of the ' f n original claims h ally stated that Ug* „„ tKc ot projecting knoho B ((oM of -enter "massive roll* ° a{s0 appears from the. e.rtent for sM'l t in wbich the appava- ^I’lVwII'ar^iate’for carrying out the tus, shorn. as 11 icinctlc energy, is pm- 312 vifletl with slugging knobs on both rolls. Tint the point in not true. Of course, if the presence of the higher, sledging knobs, on one roll only, tends to establish instan¬ taneous differences in the speeds of the two rolls, t he presence of higher, sledging knobs on both rolls' would merely increase the number of instantaneous differences established in the speeds of the two rolls. The argument of defendants’ counsel upon this point (brief, pp. 71-78) is purely fictitious. They omit the testimony of Mr. Hartigan, to the effect that in addition to the higher, sledging knobs there are a number of tilings that vary the speeds of the two rolls and reduce the speed of the roll that is not provided with the higher, sledging knobs, known as the regular roll, below the speed of the slugger roll. Mr. Hartigan testified (C.R.. p fin 1?DQ. 244) ‘ ’ A. J here arc a number of thiiu/s that would ran/ the speed of the two rolls : for in- stance, the bulk of the load might he dumped on the toll that has no slugging plates. This would necessarily retard the speed of that roll, then again the object of the slugging plates is to shatter or break the larger particles of stone mfo sines sulllciently small to get the rolling process in order to pass between the roll. If a car load or skip of rock was com¬ posed mostly of small stuff that would neces¬ sarily retard the other roll that does not have Ihe slugging plates.” The evidence is conclusive upon this point. Ref¬ erence to Complainant’s Exhibits, If os. 52 and 53, 1 b •(- cl rts plotted by Prof. Martin and Prof. Pryor from Defendants’ Exhibit, Record C, show flint at defc-ndiuito Pekin plant the speed of the south or regular roll, which is not provided with the higher, sledging knobs, constantly falls below f he speed of the north or slugger roll (supra, p. Reference to Complainant’s Exhibit, No. Me- ing Tachometer Tests of the speeds of the Non Village rolls (C.R., p. «»T), shows that the speed of the regular roll frequently falls below that o the slugger roll. For instance, ... be fbs test of the first series of tests set fort! • > ' s<»<1 <-• hil.it, the speed of the slugger roll Ml to 1W «' that of the regular roll fell to 185 rev ol. P« minute. So in the first, third and i t tasts^f the second series of tests so j)eIow that hibit, tlic speed of tbc rcgiilni ioI of the slugger roll. Kvi.jhits, Nos. 21- Reference to Compin' ^ , JIr jinson «, b-W tbe DJI awl diagrams plotted^tberefrom (Exhibits Nos. ** » ™ *•*”*'’*' and vice versa, it ;a to say the least, „„Ui. ». i«w »«• ger roll is nioic ^ the presence of the speed of the rcgi roll alone is the higher, -^'"^‘^.tial slowing down in II has heeii fnlly s o ( V (liscomiectert 108), that H 1 |.,y rolls that are not geared massive rolls are in ^ (loes not act to drive together, so that . ^ connection, arf tht other roll throng were rigidly would be the case it t ,1S tlie massive veil does not act t „. mlcpeiidciit1jvdviven, toothed gearing, the> mo as Jfr. Ellison contemplated (supra, pp. 21, 31). The independently-driven massive rolls of the patents in suit are driven by a common belt, ns sliown in the patents, cacb roll being driven through its own, separate pulley bearing inde¬ pendently upon tlio common belt (supra, p. 37). As shown (supra, pp, 1(10-1(13), the imlepcnd- ent drive of the two massive rolls is in no way limited by any statement whatsoever, contained either in the descriptions or in the claims of the patents, to the effect tlint the two rolls at any time rotate at different rates of speed. The slip¬ ping power connections of claims 4, 3, (i and 7, of the apparatus patent, nrc intended, ns specifically stated in the patents, merely to permit a redac¬ tion in the speed of the rolls, when breaking and crushing rock, and that purpose is fully accom¬ plished, within the meaning and statement of the patents, when the rolls stow down tor/ctlwr ns well ns when the rolls slow down differently (supra, p. 102). The contention made throughout defendants’ brief, that because the rolls of the patents in suit have the vupaelty to slow down differently as well as the eapuaUji to slow down together, the claims of the patents must be so construed and limited ns to cover the operation of the rolls only when they slow down differently, is untenable. As shown, defendants’ Pekin rolls not only slow down together (supra, pp. 100-10(1; p. 102) by reason of the employment in the Pekin rolls of all the means mentioned in the patents for permitting them so to do, but they also slow down differently (supra, pp. 100-100; p. 102) because the slipping power connections of the patents located between the driving belt and the roll pulleys permit them to slow down differently as well ns to slow down together. As hereinafter shown (infra, pp. 3-1-3-i ) d fondants counsel have sc st. cltletst of complainant’s expert, Sir. Bont cy. aod. m thermore, the testimony of defendants’ oxpnit, Sir. Carter, is to the effect that the throe classes of equivalent .means specified in the 1 accomplishing the result accompl s l ed hi friction clutches are a reduction in the speed of the lolls ing and crushing rock. therefore, Claim 3 of the apparatus P«te nt > clearly warranted by the ^ ^T- of the original nppl«;utl e apparatus patent were All the other claims ot the W. ^ the claims also warranted 'thereby. J ^ b|kc|1 I)0(iily from of the apparatus pate' t ^ ol.,ginnlly filed the claims of tIie. "PI ,j ,ht amendments ns •T,lly 1(i’ SuS application in the the progress of taco fc amond,nents con- Patent Office snggos logy ti,nn of sub¬ sisted of terms nithor of ^ Ml, Bentley stance (D.H., PP- ^8-o51) been , nrt wns devoid of an) hi i , sges i,y oppositely di- method of cl'nulc'"® g of hammering rolls having rented hammer bl°"» ' of ntained no appnra- great weight M ^ d “ t etl„, : his capable of ^Sr testified that the gian The fact that Mr. j™ vock iu the forepart rolls first successfu l) , 1 point were here of 180T would, ^e whatever of a public use material, be up pointed put. by Judge in the forepart of 189 1- A ^ 0o> Hazel (Vidor ^ ^ by tlie author- control or surveillance, docs not abandon his right to obtain a patent for it, and does not sell it or allow others to nso or sell it without restric¬ tion. Use in the building of another under the surveillance nr control of the inventor, for the pur¬ pose of testing the invention, is not a public use, though no changes bo thereafter made (supra, nn’ 291-800). 1 ' ’ 11 There was no public use or sale of the invon- tions of the patents in suit until after the latter part of 1S!)S or the early part of 18911, when Mr ISdfsoi) installed for the New Jersey Zinc Conn pany a set of the giant rolls (supra, p. 258). Then it was that Mr. Edison, for the first time, per¬ mitted the inventions to pass out of bis own con¬ trol and surveillance and to be used without re¬ striction by others for commercial purposes. Hence if, contrary to the fact, August 9, 1900, and not July 10, 1897, were to be regarded as the filing- dale of tin nit tioi f , tl t , , , it us patent there would still be no proof of ft public use or sale more than two years prior to August 9, 1900. Defendants’ expert, Mr. Carter, testified Hint the ral 1 .sea of enulvnient means set forth lutne patents In suit arc intended merely to permit a slowing down of the rolls while the roelc is being broken and crashed. This purpose is accomplished the means employed are sneh as to permit the rolls to slow down together. Neither tho dcscrip. tions nor the claims of the patents in suit set forth any limitation or statement whatsoever that the rolls shall slow down differently. Some of e means specified in the patents for permitting „ re- di ction in speed of the roils while breaking rock will permit the rolls to slow down together and not dlflorcntly. Therefore, the construction put by do- ecc sarl’iv * ",SU " " t,,C Ul of th0 ■■“'ents Is ly -r ...IL...IS. Defendants’ counsel have misconstrued the testimony »1 complain t t ex pert, Mr. Bentley, upon this point. Mr. Carter’s ToBUmony. Defendants’ expert, Mr. Carter, in describing Mr. Edison’s kinetic method and apparatus of patents in suit said (D.K., p- 430, Q- ^ > “The patent points out that the two : rods are contemplated as being md^^^ m and very heavy, and as he li fc g[ spee(lj belt drive referred to at a t, great, so that their momentum ^ ryo[‘ W and with the result time, will dumped into the chute : j(1|„ aIld prin- be broken and crus ,L energy stored in cipally, if not wholly, bf ^ C ^f«m-tbcir , Continuing, Mfc J"rt“ is° contemplated z ss z sections, be snjs, , »« } otate independently being, tbe rolisNnUbe fu.e t b, £ree „ of their source of l’°"u othel. He refers to ret to depcndently of ^ ^ t llllistrated the friction dutch ‘ f01. permitting the that; . . Hint the same result can 'but it is evident im not so Conven- be acconipl sbed altn gsuitablo device for iently, by employmg y ^ tho driving S'S before the rock is dumped upon the rolls and reconnecting them with the driving shaft immcdintel.v after the rock is broken or even by maintaining tlie connec¬ tion with the driving engine of small power and allowing its speed to lie reduced with that of the roils.’ “Whatever the particular arrangement adopted, the idea is that the power will be an- plied to the rolls principally for the purpose of bringing them up to speed, and not with a view to directly accomplishing the crushing of the rock by the driving power— that the crush¬ ing of the rock will be principally accomplished by reason of the previously acquired momentum of the rolls, or, more accurately, by reason of the release of the energy stored up in the rolls because of their great weight and high speed of rotation— that the release of this energy and the crushing of the rock in this manner will necessarily invoice a slowing down of the rolls while the rock is being crushed; and that the driving connections lo the rolls should be such as to permit of tins slowing down and then immediately take hold again so ns to restore the rolls to ‘speed, leady for the next crushing interval.” Therefore, whatever the particular arrangement adopted, may be, the idea of the inventions 'is that the driving connections to the rolls should be such as to permit of the slowing down of the rolls during the breaking and crushing operation. That is the idea of (lie slipping power connections which limit e aims 4, o, (1, and 7 of the apparatus patent and do not limit any of the other claims of the patents, that idea is no part of the construction or arrange¬ ment whereby the massive rolls are independently dr.ifci, and disconnected. The reduction in speed of lie ro is is as stated in the patents, the purpose and lesult of the slipping power connections and equivalents thereof specified in the pntents. There is not one syllable contained anywhere in either patent to the effect that at any time Having their operation the rolls will, or even at different speeds. It appears, however, evidence in the case, that if the slipping po™ c°" ncctions be located at the roll pulleys, ^ friction-clutches are employed or asn I lie slipping power connections, thus °cat^J nH will have the capacity of .®>0' , sfowing down differ- will not have the “Pa^J1^ fo,f0ws that the ently. Therefore, could not have In- invcnlor did ,nJ“ ’ tioil consisting of a new tended, to limit f breaking rock by method and new appmatus . „s thafc kinetic energy, by any •“^““ly, tint the ki urged by ^"‘^ScipSrata^nvolv.0n^ m-'tic method and « '“"^differently. There a slowing d»nn of patents, either in the being UP such '”^ 0 claims thereof, such a limita- dcscriptioiis oi m tl c]il1ms, by any process tion cannot be read t0 appropriate the of subtle reasoning, in of f .ingeinent. inventions and aio ^ ^ents negatives The express l«ngn « entirely inconsistent 320 544; No. G72,G1G, p. 1, lino 52). As pointed out by Mr. Carter, in the passage above quoted from his testimony, the patents state that 'the same re¬ sult, of permitting a reduction in the speed of the rolls, can be accomplished “even by maintaining the connection (of the rolls) with the driving engine of small power find allowing its speed to be reduced witli that of the rolls,” If such means be employed for permitting a re¬ duction in the speed of the rolls, theu clearly the rolls must slow down together and not differently, for such means are stated in the patents to be a sub¬ stitute for tlie friction-clutches. Hence, in the words of Mr. Carter, whatever the particular ar¬ rangement adopted may he, the idea and the only idea contemplated by the patents is that the differ¬ ent classes of equivalent means specified in the pat¬ ents shall bo such as to permit the slowing down of the" rolls, and it is entirely immaterial whether the rolls slow down together or slow down differently, for in either case the rolls slow down and claims 4, 5, 0 and 7 of the apparatus patent are infringed, the point having no bearing whatever upon the other claims of the patents for those claims are not lim¬ ited by the slipping power connections or equivalent devices which limit claims 4, 5, G and 7 of the ap¬ paratus patent. As shown (supra, pp. 100-1G0). the defendants’ Pekin rolls not only slow down together because they employ all of the three classes of equivalent means specified in the patents for permitting a re¬ duction in the speed of the rolls, but they slow down differently because, in the breaking and crushing of rock, the driving belt of the Pekin rolls is constantly slipping on the roll pulleys. Therefore, the defence of non-infringement is with¬ out. merit or substance. The testimony of defend-' ■ 321 ants’ expert, Mr. Carter, iiffords a complete an¬ swer to the argument of defendant’s counsel. As shown by the authorities cited (supra, pp. 103-170) , no court of equity has over permitted a defendant to appropriate the whole substance of a meritorious invention and escape by reason of a construction of the claims that does not fully protect the invention and that is not absolutely required by language in the claims evidencing an intent on the part of the inventor to claim less than his whole invention. The rule is the other way. The Court will so construe the claims of a patent for a meritorious invention as to protect the invention fully. If a defendant has taken the substance of nil invention, no matter what the form adopted by him may be, infringement will be found. Here defendants have appropriated every detail of the form os well ns the substance. Defondants’ misconstruction of Mr. Bentley’s testimony. Defendants’ counsel (brief, pp. 8, 75, 142) have nken an isolated portion of Mr. Bentley’s prim iwie testimony and have endeavored to build upon t a fictitious argument in support of the defense ,f non-infringement. They refer to his answers to cOs 27, 2S and 29 (C.B., p- MB). In those on- ,wers Mr. Bentley was not undertaking to inter- ,ret in any way the claims of the patents in suit. [Je stated repeatedly that he had endeavored to tvoid any attempt to interpret the language of the •laims, that being a matter for the Court G.R., ,179 xQ- Hi P- 1W, xQ. 30; p. 191, xQ. 47; p. -ad vO 70). His attitude upon this point, which vas clearly 'll a dm load and stated bj defendant! ’ounscl in the question put and which is entire y different from that which they now urge upon the Court as his attitude, appears from lus following answer to tlie following question (O.H., p. 534, xQ. 70) ;— “xQ. 70, 1 understand it to be your opinion tlint the term ‘independently-driven and dis¬ connected’ ns used in the claims of the pat¬ ents in suit includes a pair of crushing rolls driven by a common belt passing around pul¬ leys fixed, to the respective roll shafts, and excludes rolls driven by a common geared power connection, is this correct? A. I do not remember that I have attempted to fix the limits or possible scope of the phrase, that being a matter which is not in my province; nml it is impossible to say what other forms of independently-driven and disconnected rolls may be invented in the future. / do think that a pair of rolls driven by a common belt passing around pulleys fixed to the re¬ spective roll shafts like the New Village rolls and the Pekin rolls are substantially like the rolls of the patents in suit upon which the phrase in question was bused. I, moreover, do not know of any construction in the way of rolls driven by a common geared power connection which I consider sub¬ stantially the same as the rolls of the Edi¬ son patents in suit which Mr. Edison aimed to identify by the expression ‘inde¬ pendently-driven and disconnected.”’ In his answers to xQs. 27, 28 and 29 (C.B., p. 183), Mr. Bentley was dealing with the “capac¬ ity’’ of the rolls of the patents in suit. In answer to xQ. 27 he said that he understood that the phrase "independently-driven and discon¬ nected” refers “to the arrangement by which each roll is driven so as to have the capacity for apply¬ ing its kinetic energy to the rock individually, being capable of slowing down regardless of whether the other roll slows at the same time or not”. This means that the phrase driven and disconnected” refers to the arrange¬ ment or construction of the apparatus; that it does not refer to the mode of operation; and that the ar¬ rangement is such that each roll, not being driven by or connected with the other roll, 1ms the capacity for applying its kinetic energy to he rock individually, that is to say, without reaction on the other roll. As Mr. Bentley has fully shown, this capacity results from the foot *att >J0d • son, kinetic, giant rolls are not ruj.dly ^mooted together by toothed gearing as were the tolls of ^'lif iinswer to xQ. 28, Mr. Bentley said that the specifications contain no definition of the phrase “independently-driven and «■> <»» ** 2 “Zi'h *' » no statement to tl,nfc eJctj slip- the fact that each roll h» ' ** tuiS) he snid, ping capacity ' tQ glow up in speed inde- would allow the statement is pendentlj one of ^ ^ ^ ^ referable ™ ,{eys witll slipping power provided nt the l I claims 4, 5, 6 and connections mcntione slipping power con- 7 of the the rolls Motions aie p ol. differently. It is nn- “independently- 324 323 provided with “slipping power connections” tlmt will permit a reduction in the speed of the rolls, irrespective of the question whether the rolls slow dowii together or differently. The decided cases show that tlio position ol' <1«. l'cmlnnts upon the question of Infringement is untenable. The claims of a potent for a mechanical device aro.not to bo limited by the functions or capacities of the devlco not mentioned therein. A patentee is entitled to every use to which bis device claimed can be put. When n patentee has plainly described and claimed his mechanical device and has secured n patent for it, he has the right to every function his device will perform and to every use to which it can be applied and to every way in which it can he made to perform its function, whether or not he described, claimed or was aware of these functions and uses when he claimed end secured his monopoly (Dunlap v. Witlbrandt Co., 151 Fed., 223, 227, 235, O.O.A.). It is not necessary for a patentee to describe in detail all the beneficial functions which he claims will result from his invention; nor is it necessary for him to mention in his claims the useful pur¬ poses tlmt may be served by the particular parts or elements mentioned therein (General Co. v. Bullock Co., 152 Fed., 427, 431-432, C.C.A.; Barnes v. Lingo, 151 Fed., 59, G4). It is the mechanical device mentioned in the claims to which the patentee is entitled and, as stated, he is also entitled to each and every func¬ tion that the device may perform and to each and every use that the device may be put to. Hence, the difference between the capacity of an appara¬ tus and the limitations set forth in the claims of a patent for an invention, consisting of a com¬ bination of elements embodied in the apparatus, The apparatus may have many capacities, func¬ tions nr uses, hut the invention may he broader than a combination of all the elements necessary to secure all the capacities. Nor are the claims to he limited by any element necessary to secure a particular capacity unless the element is specifi¬ cally included in the claims. It is the mechanical elements mentioned in a combination claim that limit the claim, and not any particular capacity which the combination may have in addition to other capacities. The words, “independently-driven and discon- nected” of the patents in suit clearly refer to the arrangement of elements whereby each roll is driven through its own separate pulley by the belt and not. through any gearing connection with the other roll. The capacities of rolls, so driven, are an independent matter and are not made a limitation of the claims, for the capacities , are several. The rolls may slow down together or differently, but in cither case they are covered by the claims, being independently-driven and dis- connected, ns explained. , , The interpretation of the phrase, independ- ontlyrd riven and disco,, neriedj.necessanlyj^ on the prioi' art ami neitiim m - considered by Mr. Bentley at the time of .com- ferred to by defendants’ counsel be was clearly describing the functions or the different ways m which the apparatus of the apparatus .patent, m- I’n tent Office and (supra, p. 31) ently-dviven and means that the the prior art, lie ciuuy that the expression “lndepeml- disconnocted massive rolls” two, massive rolls, with rough- oncd surfaces, arc not rigidly connected togetlier by toothed gearing as in the prior art, where one only of tlie two rolls was driven by the operating power, the other roll being driven secondarily by its gearing connection with the first roll. Defendants’ counsel concede the entire point when they state (brief, p. 107) : — “that it is essential to the supposed inven¬ tions or the patents in suit that the rolls should not he geared, that the alleged novelty resides solely in driving the rolls by n belt and pulleys.” h’or this proposition they cite the testimony of complainant’s expert, Mr. Bentley, who, they say (brief, p. 107), “repeatedly stated that it was an essential characteristic of the alleged inventions of the patents in suit that the rolls should not be geared togetlier.” Clearly, then, belt-driven rolls, that is, rolls not geared together, are independently-driven- und disconnected, and such rolls, when massive and provided with hammering knobs and combined with the other elemnts mentioned in the claims of the apparatus patent, form the subject matter of the claims of that patent. While consistency is not to lie found in defend¬ ants’ brief, nevertheless it is significant that de¬ fendants’ counsel (brief, p. 42) first admit that the friction-clutch was improved after July 10, fS!)5 and then argue; — the details of construction which were im¬ proved subsequent to July 1(1, ] S!)5, is in¬ cluded in any one of them, except the loca¬ tion of the slugger knobs on one roll, which is included in claim 3 of the apparatus pat- liere is a clear admission that, •>*> (supra, pp. 39-44), the friction-clutches, specifi¬ cally included in claims 5 and 0 of the apparatus patent, are not included in any of the other claims of the two patents which are at issue. jsssi to thotart, dotoSw had succeeded In ^P«™Ung tho Pekin css v:: PP' T/Jols While breaking and crushing rock, SPTtr, . frinied bv defendants; nor has t any and are , infringemcnt of said bearing upon _d^"da,,te inf ^ emplovnl(!))C claims 4 and i bj 10fi. 108.110) of slip- PP- f°°t it\Vf the rekin rolls, due to the belt-tight- d riving belt, of the 1 ei kinetic, giant oner pulley copied from the J ia> ,inves0 fnl. i 11s at Sit le ( / IP 1 ,1s tl t the ii1il>l'i,'1!(1.t,,(‘[:.^ l!L !^r^ connection located do not utilise the s ipi r, surfaces of the between tl 1 ,clt , 1 11 the Hint the rolls slow down nt “substantially” ((left’s brief, |). 12) the mime rates of speed and not nt, very different rules of speed. Of course, ns shown (supra, ])]). 102, 90), it is iminnterinl whether the defendnnts’ rolls slow down together or differently, for in either case the stilted purpose of the slip¬ ping power connections nnd equivalent menus speci¬ fied in the patents is accomplished, namely, n “re¬ daction iii the speed of the rolls” while breaking and crushing rock (supra, p. 41). That defendants copied the belt-tightener pulley from the Edison kinetic, giant rolls at Sibley, for the express purpose of alleging an impairment of the function of the patented structure and of alley- iny, contrary to the fact, that it prevents “tlie belt from sliding on the driving pulley mounted on the line shaft, or.on the driven pulleys mounted on the roll shafts’’ appears, as shown (supra, pp. 92, OS- 99), from the testimony of defendant’s witness, Air. Newhouse. Of course, the device is the same, what¬ ever may he the regulation of the belt-tightener Pulley or of the driving belt. At any time the ten¬ sion of the driving hell may he changed and the al- toyed effect of the belt-tightener pulley and of I he tension of the driving belt eliminated. For the reasons stated, the point above specified and urged by defendants’ counsel upon the ques¬ tion of infringement is entirely immaterial. The following authorities are conclusive upon the point. That impairing the function of a patented struc¬ ture does not avoid a charge of infringement is well settled hy authority (King Co. v. Hubbard, 97 illcst extent possible. The benefits which reside i or flow from the patented structure me not to e confounded with the device itsulf ( " 1/8 v- era n ton Co., 1.47 Fed., 525, 52(1; Hornes v. Lingo, ’a 'mere1’ mccluu.ie.il re-arrangement of diiving leans involving.no difference in principle , o e- »lt of the combined means and operation « » » void infringement (Columbia Co. v. A olomo Co., 43 Foil., 1.10, 121, 0.0. A.). . A patent is not to he limited by any fl'"ctl° mrpose, especially when no reference t > is made in the claims of the patent, 9inc0 mtentee is entitled to all the functions mid . w, A •>< *• s”'"“ :i,<«Tiin"ru hf is wel 1 settled that if two machines he Vmtiallv the same, and operate in the same nibstmitinlij mi- i . nropor- ons latent positions token I 889, 893, C.C.A.). Upon the question of infringement, it is the structure itself, as defined in the claims, that must be looked lo and infringement is not avoided be¬ cause Ibe patented structure is not utilised to the knobs on one roll < ■ lU(joloso tl,c errors of the rolls, in tl.e second c“8 ' “ admission, tlmt tlie SJsSSS^ja-«-M-: 330 That the Pekin rolls rotate at different rates of speed when breaking and crushing rock has boon conclusively established by the evidence (mi i>ra, pp. 100-100). The fact is admitted moreover, by the argument set forth in defendants’ brief. ■ ■- ■. Defendants’ counsel, in an effort shown to be fictitious (supra, pp. 311-313), argue that the operation of the giant rolls, when provided with the higher, sledging knobs on one roll only differs from the operation thereof when provided with the higher, sledging knobs on both rolls. It has been shown that the alleged difference in operation is fictitious (unpra, pp, 311-313). However, de¬ fendants’ counsel concede (brief, pp. 7-1-78) that when the kinetic, giant rolls are provided with the higher, sledging knobs on one roll only,’ the rolls must rotate at different rates of speed when break¬ ing and crushing rock. Defendants’ infringing, kinetic, giant rolls at Pekin and Detroit are pro¬ vided with the higher, sledging knobs on one roll only. Therefore, as admitted by defendants' coun¬ sel and as established conclusively by the evidence, the Pekin and Detroit rolls rotate at different rates of speed when breaking and crushing rock. Defendants cannot come into court blowing hot and cold upon the operation of the kinetic, giant rolls, and assert in one breath that the application for the apparatus patent is not to be regarded as a division of the original application because, ns they erroneously assert, the rolls rotate at dif¬ ferent rates of speed only when provided with the higher, sledging knobs on one roll only, and then in the next breath, in order to avoid the charge of infringement, assert that the Pekin rolls, which' are provided with the higher, sledging knobs on one roll only, never rotate at different rates of speed. t would be immaterial, as shown (mpm, PP' !, 31-1) if the defendants’ rolls do not i ferent rates of speed, because concede 'y «. ^ no statement in the descriptions . * ck. . . nr view, defendants Therefore, from uqr ^ in of ■ ^ fringe claims 4 mu < 1 connec- « ''“^a^Wth. speed of TZ ’’while breaking and crushing : «ek rentiy; and they » t b lnhM 0f the method ie apparatus patent ana ^ , the slipping i tent 1 1 ™ ""as shown, the defend- iw eonnectwiw, k a ^ ge[U.ed together but at»’ infringing ' their separate re driven a“a „re, therefore, in- eslIPl'inB jiiiectlous, montio . --r”i*ssr—'= ,«■ wh,1° .'."pulleys. Obviously, It Is imnmte ut the * ' ; " ®50S , L wl H3 ' ;t"cun licr tills slip takes I ,,y ,)utweon ys mat r]0l.1'“ ,felt, or portly In «.c ys and t,,c ,lr ' oHlor. In oaolieasctlie n ,11.(1 partly in ,g cxilctly tl.o same ai ipllsbod’ny (-1 Bivalent nriw>s- TJj® eases ( 332 333 927 (GO. A) and 142 Fed., 221 (GO.), it was liuld; — , “The t .substitution of pulleys integral with their central shaft or trunioii ends rotating in sockets for pulleys loosely revolving on slinfts whose ends nre fixed is too obvious, ns well as too old in nicchnnicnl nrts, not to niuko one. the equivalent of the other in a case like tlie present. , It is clearly a case of at¬ tempting to avoid infringement by tlie iis6 of mechanical equivalents.” Whoa frictioa-clatclips are employed tlie slip at the roll-pulleys takes plnce partly between the roll- pulleys and the roll-shafts, and pnrtly between the roll-pulleys and the driving belt (suprii, pp. 48- 49; GTl.,p. ISO, . xQ. 34). Obviously, it is im¬ material, in the operation of the rolls, whether the slip, that; occurs between the pulleys and the roli- shafts, when frictioa-elutehes are employed, is transferred from the turn of. the pntlei/s to the sur¬ faces of the piiihyx by making' the pulleys fast on the roll-shafts and thus causing the entire slip at the roll-pulleys to take place between the driving belt and the surfaces of the pulleys. In either case the mode of operation of the roils is exactly the same and is accomplished by equivalent means (ail inn, pp. 40-49; pp. 303-304). Therefore, with regard to tlie slip occurring nt tile roll-piilleijs of the Pekin plant, tlie cases cited by defendants’ counsel (brief, pp. 113-115) are not. relevant. Nor is there any question of tlie omis¬ sion of an element involved, because, as shown (an pm, pp. 305-30t>) defendants employ all the means mentioned in tlie patents as the equivalents of the friction-clutches for permitting n reduction in tlie speed of tlie rolls while breaking and crush¬ ing rock, and the slip of tlie belt upon the roll- pulleys is, moreover, iiot only an equivalent men¬ tioned in the patents but was nu cqinwient of fte friction-clutches, for the purpose state , the date of the inventions and of the paten (supra, p. 303). This Court has jurlsrtlettoii of e^ch of tho ^ irc^ ilel'emlnut corporations. J ° ,lcts of iniWiigc- stlimlntloiiB provo “'" ' J, ot- tnoiii within moist hart hoc. committed bj the coin- tho Western District ol No" ^ 1 thortefeml- mencement of this suit. M >r°u'" £„liy. is h.linl) - nut, The Umpire Lloiesto'm york, the evl- tant of the Western Vlstr let * "]|rcnts to infringe deuce and stlimlatlon 1 lcllCOmcnt of this made by it beiore tlie co g|iIt flgai,i8t it. Bj re 111 I ' ni a le 1 nt ' 1 n J. answering to the t ()i,jCet to the right they jWW'g district (134 Fort. -W- temmee of this im.isdiction of the Upon the orni argumc Jn(j Compnny was C°m'tieT''T!le proofs show that the Court has jurisdiction of all dcfcndaids. during Neither in tho anawer '“nf^urisdiction of the prosecution of the st defendant. The the Court challenged im 10,^3 co»„Sei (C.E p. •objection made 1»J f JU. nerter, upon the join to tlie depositioi , t tlie construe- ground that hie .testimony "gf ^ at . time tion and operation or U m of complnint, subsequent to the W . ^ oE the Court, in no way challenged J intl.0duced for the Mr. Herter’s testimonj ta, Pckin rolls, purpose of prov.ng_ti.at and Malted which hud hoc,,- of this smt, at Pekin »«/*»" Ml other Edison, ' must neccssnn J P^ ^ patents in suit, kinetic, B,nnt ' 1 wu nwi admitted m the a lt " of the three defendants ^ The testimony of Messrs. Williams and Hartigan (C.U., pp. 12-09) proves that the whole Pekin plant, including the giant rolls, had been completed and installed at Pekin before the commencement of this suit. The bill of complaint was (lied on June IS, 1.900 (CJ.B., p. 0). On June 17, 1009, Mr. Williams visited the Pekin plant with Mr. Hartigan (C.R., p. 13, Q. 7). Mr. Hartigan made three visits to the Pekin plant, first, on May 0, 1009, second, on June 10, 1900 niul third, on June 17, 1909 (O.R., p. 58, Q. 0; p. 01, Q. 10; p. 01, Qs. 20-21). On June 9, 1909, the day before his second visit, Mr. Hnrti- gan obtained two photographs of the Pekin plant, being Complainant’s Exhibits, Nos. 3 and 4, one showing a general view of tiie Pekin crushing plant and the other showing a partial view, including the slugger roll, of the giant rolls of the Pekin plant (C.R., p. 02, Q. 30; p. 01, Q. 23). From the information thus obtained by Messrs. Williams and Hartigan through their visits to the Pekin plant prior to the commencement of this suit on June 18, 1909, they made and introduced in evi¬ dence Complainant’s Exhibit No. 5, which is a draw¬ ing correctly showing every detail of defendants’ 1 otic, giant, rolls i their completed state prior to June IS, 1909 (C.R., p. 18, Q. 27; p. 00, Q. 47). Mr Hartigan states specifically that the drawing correctly represents the plant at Pekin ns ho saw it on June 17, 1909 (C.R., p. 00, Q. 47). The draw¬ ing conforms to the photographs of June 9, 1909, as appears from a comparison thereof. These facts are not denied. There is only one slight inaccuracy in the draw¬ ing according to the testimony of defendants’ wit¬ nesses. Messrs. Williams and Hartigan at the time of their joint visit on June 17, 1909, saw the slugger plate on one roll, as shown in the photograph of June 9, 1909, and were informed by Mr. Kenneth V' Casparis that there was a slugger plate on each roll (C.R., p. 242, RXQ. 82). Defendants’ counsel had evidently received the same information for upon his cross-examination of Mr. Herter he said (C.R.. p. 124, xQ. 14(1; p. 588, fol. 1704) ;— “At tiie Pekin plant both of the crushing rolls are provided with sledging projections.” The common error on this point was subsequently cleared up when defendants put in their testimony showing that the Pekin rolls, like Mr. Edison’s rolls, have laid the slugger knobs on one roll only (C.R., p. 588, fol. 1704) . This was to be expected because defendants copied the kinetic, giant rolls of the patents in suit, ns installed at Sibley and New Vil¬ lage, in every detail. Mr. Peterson, superintendent of the Pekin plant, testified that the Pekin rolls are the same now as when they were installed, that tiie north roll is the one having the slugger knobs and that the south roll has never lmd any projections larger than the rest (D.R., p. 350, Qs. 7-9). Tiie testimony of defendants’ witnesses, Messrs. Van Znndt and Newhouse, confirms Mr. Peterson (D.R., p. 252, Q. 30; p. 397, Q. 59). Therefore, defendants’ Pekin, kinetic, giant rolls of the patents in suit had been completed and in¬ stalled before tiie commencement of this suit, as fully shown by the said drawing and by said photo¬ graphs and by tiie testimony of Messrs. Williams, Hartigan and Peterson. In addition to the said testimony and exhibits, there are the stipulations by defendants’ counsel (C IS , p. 59; pp. 194-199). The stipulations show that the Pekin sledging rolls were made and sold by the Allis-Ohalmers Company under contract with The Casparis Stone Company and were deliv¬ ered by the Allis-Chalmers Company to The Cas- Paris Stone Company at Pekin, N. Y. (C.R., p. 59; p. 194). The sale was completed by the delivery at Pekin. Therefore, a completed act of infringement, by sale, within the Western District of Now York, was com- initted by the Allis-Chnlmors Company (see cases cited, infra, p. 338). Moreover, the Allis Chalmers Co. assisted the Casparis Stone in erecting the plant at Pekin (infra, pp. 337, 339) and, therefore, infringed by a completed act of infringement, by making, with¬ in the Western District of New York. The original contract between said two compan¬ ies was dated July 10, 1908 (C.R., p. 197, fol. 091), but this was superseded by a later contract finally approved July 3, 1908 (C.R., p. 105) . Prior to the commencement of this suit, as stated in the stipula¬ tion, the Casparis Stone Company contracted with The Empire Limestone Company for the installa¬ tion at Pekin of the sledging rolls and appurtenant machinery made and sold by the Allis-Chnlmers Company to The Casparis Stone Company and de¬ livered, as stated, at Pekin (C.R., pp. 197-198). The stipulation further states (C.R., p. ms, fol. that prior to the commencement, of this suit the said sledging rolls anil appurtenant ma¬ chinery covered by the said two contracts had been installed in the said plant (at Pekin) bv The Casparis Stone Company for the Empire Limestone Company in accordance with the nics,,C0MtK1Ct I)et",pa- flie testimony of Mr. Peterson shows that the kinetic, giant rolls and appurtenant machinery a. “de, sold and delivered at Pekin by the Allis- Chalmers Company were installed according to plans and bine prints furnished by the Allis-Chal- mers Company, anil that during the installation, the representative of the Allis-Chalmcrs Company, Mr. Newhouse, nmcle visitH to the Pekin plan o see what progress was being made and to consul with Mr. Casparis (D.R., 355, xQs. H-U). m Casparis Stone Company had charge of the bid ■ . ing or the plant but the Empire Limestone Com- pnny paid the workmen (D.R., P- 3oo, xQ. 40 installation of the plant was begun in he 1 all of 1908 (D.R., p. 355, xQ. 39) and 'vas hiusled shown by the evidence and the stipulations, befoic the commencement of this suit. As Mr. Peterson testified, and as is obvu u" »•« out proof on the point, the ™ « the time when the plant was being .»« « Ucdat Pekin was “for the purpose of installing tl P _ to break and crush rock” (D-Ib, P- ’ ‘ 0j,d. to break and crush rock by kinetic c iieifej, vx&SS&s si-— ..... Court is, therefore, establish d ^ appnratus, 101 ,S 1 fo e II CO c t f tl frmije, nude ^ ^ guffldent to maintain this suit, would n t ((!ndant. That there was not S1,it to infringe but a completed act of in- on|va thr a o n ttcd befol.e the com- fi-mge t r Suit is established Uowi mencement ^ ’d(,£eud„nts’ counsel (brief, point because in those cases pp. lo-lb) mcnm( ^ ^ tUveat t„ infringe made h f tlr 1 1 0 1 ot thU S'Ut' 33S In Cheater Forging S., 24), and that under such an executory con¬ tract, title does pass to the vendee upon delivery (Burrows v. Whitaker, 71 X. y., 291; Kcin v. tapper, 52 X. V., 550; Cornell v. Clark, 104 X. Y„ 451; Smith v. Lgnes, 5 X. Y., 41; First- Nat. Blc. v. l'celt, (il App. Div. 258, 202; Vnndegrift v. Cowles Co., 33 App. Div., 148, 152; Andrews v. Ihmint, 11 X. V. 35; The 1‘oeonokel, 07 Fed. 202 ail ’d 70 Fed. 040; North western Slate Ilk. v. Sil¬ verman, 154 Fed., SOi), 811). In Campbell, v. Mayor, 30 Fed', 200, 203, Judge ''heeler, held that an order for the construction of an engine, accepted, would not make a sale of it, but that delivery and passing of title, by reason of tlie delivery, was necessary. The Circuit Court of Appeals in Notional Co. v. American Co., 178 f; 330 70, 83 (considered supra, p. 200), held that a sale was shown, saying;— “The transaction was completed by the de¬ livery and acceptance of the machine. The title then passed.” 1„ the case at bar the giant rolls > ""<1 mint i ichinery made by the Ml f of Xew York before the commencement suit, is, therefore, complete. infringement by making boforo suit begun. ti10 three defendants it 1ms been shown tin P(jk5n plant, in- jointly assembled and insta tlierc- aditt'c f fore, a completed a«L ”f * jthin this district before was committed by thein t ^ contl,nct be- tbe commencement of this nna tll0 Cns- tween the Allis-Cl.nlmcr .Con pa ^ ^ Paris Stone Company «P eJ» J|U.nisll engineers, Allis-Cbalmers Compa "i ; . fni, tlie purpose of mil' i gUs 1 ’ 1 n i , latioi of tl superintending the ere o. p. 106, machinery covered bj tne The law of nf infringement co.n- establishes a comp , Company within tlie untied by the A1 ,s™ before the com- Western District of i - Allis-Clmlmers Com¬ mencement of tins sui • t1)e oUiel. defendants, maohinei-.v amt delivered tho same at Pekin amt thereupon co-operated with the other defendants m the erection, assembling and installing of tin* giant rolls and other appurtenant machinery. Ac¬ cording to the stipulation, the giant rolls and other appnrtenant machine^- had been assembled and in¬ stalled at Pekin prior lo the commencement of this suit (aa/ini, p. 8:1(1). Let ns assume/ contrary to the fact, that, the. Allis-Chalmcrs Company lin'd not taken part in the assembling and installation of the Pekin, giant rolls and appurtenant ma* chinery. Under this assumption the Allis-Chalmers Company would have been guilty of a completed act of infringement, other than the sale, committed within the Western District of New York before the commencement or this suit, because it knew the purpose for which the giant rolls and appurte- mint machinery had been made and delivered by it mid it made and delivered the same in order that the Cnsparis Stone Company and The Empire Lime¬ stone Company should install the same at Pekin in infringement of (lie patents in suit. Since the Pekin plant was, as shown, completed before the commencement of this suit, the Allis-Clmlmers Com pany was a party to the completed act of infringe¬ ment committed within this district before the (loimnen cement of this suit ( Walker on Patent s, HOi, p. 331; 3 Pud. Hep. Digest, pp. 0708-0773). I" .-baar/c"". Craph. Co. v. Talk-O-Phone Co.. 140 bed., 080, Judge Hazel held, without opinion, iftni .i full argument and submission of briefs, on demurrer, that, in a suit on a process patent sisunist a s I t d r 1 t c iponti , brought in the Southern District of New York an allegation in the hill to the ell'ect that the pro- hmuuiry steps of the process were carried out in the Southern District and that the final step of the process, completing II, e act of infringement,; was In Westinyhonse Co. v. (Stanley Co., 121 Fed., 101, Judge Wheeler, on n plea to the jurisdiction, held that a sale made without the district for use within the district was sufticient to support the jurisdiction of the court. This was in the case wherein Judge Lucomho (110 Fed., 041) denied the motion for preliminary injunction upon the ground Hint there wub no proof of a completed act of infringement committed within the district be¬ fore the commencement of suit, the defendant not being an inhabitant of the district. In Chieayo Co. v. Philadelphia Co., 118 Fed., 852, Judge Laeonibe distinguished and apparently overruled Ids previous holding. By answering to the merits, defendants waived any right they might have had to the maintenance ot this suit In tho Western District of Now York. Cases cltod, But whatever may he the correct rule1 where the ' question of jurisdiction is raised by demurrer, or by pica, or by motion to dismiss the suit for want of jurisdiction, or by objection taken on motion for preliminary jui ti ill s I t lcutlcl 1 t here is no authority to the contrary, that where, as in the ease at bar, defendants have answered to the merits, they waive their right, in a patent suit, to object to (he jurisdiction of the court upon the ground that they have not a regular and estab¬ lished place of business or have not committed an act of infringement in the district in which the suit is brought, such right being merely a matter of personal privileye which a defendant lias when sued in a district of which lie is not nil inhabitant (U IS. Co. v. Phoenix Co., 124 Fed., 234). This holding is in agreement witli the latest de- cisions of the Supremo Court of the United S tule.s Vo- '*»" t,efe"dnl*ts "art not, befoie the argument at Anal hearing in this suit 1 s,l1 3 1 «t whatever with regard to the jurisdiction of the court over any one of the three deteijdants Therefore, the following statement of the Ciicmt Court of Appeals in Porru Co. v. A losers Alclie Moldy, 152 Fed., 007, 009, CCA applies;— ’ ’ ’ isil'leHm }'ll,le tllu 1>iU'ties cannot confer jur- c ts ’ ?, L0"|’e"tj " here the jurisdictional ‘‘l „ pioperly alleged, and thus properly appe.u upon the record, and the parties upon plead. ngs which go to the merits, proved to tnal and particularly where the jurisdic- uinal facts are not sn. e i c tlj j t J is l>J the defendant or seriously denied, the case mdmaiily mil not be dismissed for want of jurisdiction, and this is especially so where the proofs do not create a legal certainty tlmt In the case at bar the bill alleged that, before he commencement of this suit, the defendants did, Lt,ri VUVTUlIf’ mUkC’ USC n,ld Sell> within this disti ict and elsewhere within the United Stntes the apparatus of No. 072,017, employing the method of No. 072,010 (C.B., p. 0, par. IX). Tile fact that tlio (lofcndant, Allls-Chnlmcrs Com¬ pany, made the infringing Detroit rolls for tile Dun¬ bar Stone Company ami tlmt tlio Detroit rolls are tlio same, in all essential respects, ns the Poitin rolls, was proved by defendants when they put In evidence a blue print of the Pekin and Detroit rolls. It nppenrs tlmt tlio Independent drive of the De¬ troit rolls consists of a separate motor and a sepa¬ rate belt imparting motion to tlio separate and dis¬ connected pulleys of tlio two roils, copied from tlio Kdlson Installations; while tlic Independent drive of tlio Pekin roils consists of a stnglo belt imparting motion to tlie separate and disconnected palloys of tlio two rolls, copied from other Edison installa¬ tions, the operation of tlic rolls In cncli case boing precisely the same. This Court having Jurisdiction of the Allis-Clmlmers Company, by reason of Its In¬ fringing acts committed at Pekin, before this suit was begun, will, under the well settled rule, nwnrd to complainant complete relief for all Infringing acts committed down to the time of tlio accounting. The authorities cited. Upon re-direct examination of defendants’ wit¬ ness Mr Peterson, defendant*’ counsel offered in evidence “Defendants’ Exhibit, Blue Print of Pe¬ kin Bolls” ( D.B., p. 3(18, BDQ. 101), and again of- fered the same bine print in evidence at the . close of Mr. Newl.ousc’s direct examination (D.B p. 409 Q 70). Deference to the blue print will show S tile blue print, which corresponds wMh the rolls of the Pekin plant (D.I!., p. 3(iS, BDQ. 101, , 409 Q 79) was mode m WOS, and was used by (he* Allis-Clmlmers Company for the construction of the giant rolls for the Dunbar Stone Colony, I1S testified by Mr. Newhouse (D.B., p. 415, xQs. 99) introduction i nvidomie of tlic s blue-print, defendants’ witness, Jit'. Vnn Zandt, testified on cross-examination, without objection by defendants’ counsel, that the Allis-Chalmers G’oni- P«ny, according to his information, was construct¬ ing or had constructed for the Dnnhar Stone Com¬ pany of Detroit, Mich., giant; rolls closely similar to the Pekin rolls, and that the said giant rolls for the Dnnhar Stone Company were like the Pekin rolls in that one roll had two slugger plates n bout 180° apart with knohs approximately two inches higher than the knohs on the other or regular plates of the same roll (D.R., p. 203, xQs, MO- Defendants having introduced the evidence re¬ lating to the Detroit rolls, by reason of the blue print, and no objection whatever having been inter¬ posed to the testimony of Mr. Van JJandt, the objec¬ tion to the testimony introduced by complainant on rebuttal with regard to the Detroit rolls is not well taken. Moreover, it would be immaterial, if well taken, because the evidence in regard to the Detroit, rolls exists in the defendants’ record, and the facts are before the Court by reason of the proofs intro¬ duced by defendants. Defendants’ motion to strike out complainant’s testimony with respect to the Detroit rolls was limited to certain parts of the testimony of com¬ plainant’s witnesses, Messrs. Williams and Bentley 50sf ’ P 50°^ TllL> motion WHS denied (D.It., p. At the time of the said motion defendants’ coun¬ sel made another motion for leave to take surrebut tat testimony (D.R., p. 502). This motion was granted (D.R., p. 500) and, at the time of the mak- ing of this other motion, complainant’s counsel, as the Court will remember, invited defendants’ coun¬ sel to take snrrebuttal testimony with regard to the Detioit rolls, but for obvious reasons, the infringe- ill 5 men!, being so clear, defendants’ counsel took no snrrelmtnl testimony on this point. He did, however, take surrebuttal testimony, under leave obtained upon the motion (D.R., p. 507), and he had full opportunity to take all the surrebuttal testimony I that he wanted to take with regard to the Detroit | rolls. ) Under these circumstances, defendants cannot I now lie heard to object with regard to complainant’s rebuttal testimony. In American Co. v. Oily Nat. lianlt, 181 Fed., 375, it was held, as stated in head note 2;— I “Testimony in rebuttal will not be sup¬ pressed, on motion or objection of defendant on the ground that it was not proper rebuttal testimony, after the defendant has by leave of j court taken testimony in surrebuttal.” To the same effect is West Go. v. Edward Go., 152 Fed., 1.011), wherein Judge Chatlield reviewed (p. 1020) the cases showing that “rebutting testimony is addressed to evidence produced by the opposite party, and not to his pleading” and that “it is only necessary that the testimony ollered should have a tendency to explain, repul, counteract u, dmpio.- tho opposite statement, in order to render it admis¬ sible ” For this reason also, complainant’s rebuttal testimony, with regard to the Detroit rolls, was proper, for those rolls, made from the same blue prints, are clearly infringing rolls and prove wlmt Pekin rolls. . Moreover, in an equity suit all the evidence is to be retained in the record for use on appeal (Mastin v. Noble, 157 Fed., 500, 512, C.C.A.; St. Louis Co. v. Hadley, 108 Fed., 317, 357 ; Parisian Co. v. Escli- wege, 92 Fed., 721). The testimony and exhibits in the record applic¬ able to the Detroit rolls have been referred to The Detroit rolls are exactly like the Pekin rolls except that at Detroit one form of Mr. Edison's independent drive is employed, copied from the Edi. son installations at the plants of the Little Fulls Stone Company, the Kelly-Island Lime & Transport Company and the U. S. Crushed Stone Company, consisting of « separate motor and a separate belt imparting motion to the two rolls through their separate and disconnected pulleys. The rolls are independently driven and disconnected because they are not rigidly connected together by toothed genr¬ ing, as in the prior art, and one roll does not act to drive the other roll through such rigid connection, so that each roll is free to deliver its kinetic energy upon the rock without remetion on- the other roll While at Pekin another form of Mr. Edison’s inde¬ pendent drive is employed, copied from the- Edison installations at Sibley and New Village, consisting ot one motor and one belt imparting motion to the two rolls through i their separate nnd disconnected’ pulleys. For the: same reasons the Pekin rolls are- independently driven and disconnected. /«■ each, ease the belt drive of the patents in suit is employed and it is immaterial whether two bells or. a sniytu belt he employed ‘to. impart motion to the separate and disconnected pulleys of the two rolls. In either case the result of the patents is obtained, each, roll being free to expend its kinetic energy ^ delivering hammering blows upon the rotk a, II out remet, on on the other roll. The identity of tlu se tuo forms of Mr Edison’s independent drive is shown by Mr. Bentley (C.R.. n. 483 fnl«= 1448-1450) . Defendants copied botl. from Mr Edi- son. Jn the patents in suit the belt drive shown is a swy/e belt, ns-at Sibley, Kew Village and Peldn, " 1,010 11,0 l,nn°-vs are fast on the roll shafts. Defendants' counsel have misstated the' testimony ot Mr. Hnrfcli with regard to tho independent drive of tlio Edison kinetic, giant rolls. DVifeiidaiits’ tonifsel (brief, p. 143) misstate ibi! testimony of lit. Marsh when they say that! “he stated in effect that two rolls are not hide- ppiid'ently-driveii when they' are driven by li single belt phasing iirouiid pulleys fixed upon the shafts.” All that Mr. Marsh stated was that in two of the four plant's of his company a separate bolt for dueli of the two rolls was employed (O.K'., p. GW,' xQs'. 30-40). fie' wits ti lay witness mid lie was in no way attempting to deilne what would be meant by the phrase “independently-driven and disconnected massive rolls”, nor was his attention directed toward1 that phrase in tlie patents, nor would lie- have been competent to iiitdr'prtit tliiit phrase' in tlie patents had his attention been di¬ rected thereto; The meaning of that phrase de¬ pends; as .Mr. Bentley lias shown (supra, p. 31), upon the proceedings in the Patent Office and the scope of the inventions in view of the prior art. Tlie' twisting mid turning of isolated portions of tlie testimony of some of the witnesses by defeml- ,i„ls> counsel, . . effort to narrow the scope of the claims of the patents in suit, is' unjustiliable', finding no support in the reiil meaning of thd i tes¬ timony and no support in the prior art to limit the broad scope of the inventions. In' an' equity suit complainant is cntltlWuj Infringements committed by ’ de'“d“'“ T-iJlementnl' gill 340 several dofo ->0lnt "1 se o al 1 f | kemc ls won ™a mny be had f°r th° “v«™i ■>» objection* urged 4ofonto”uBl^astBwalvedebyeneoIt1*domurrln0 fondants severally. ne° nst tho do- nf ‘"‘"P'itint charged that defendants ,,l,th ,ml «> <”>'»/ hi fringe the patent ii air rod 1 f n '/ 1 , !’ ■ j l'®? ’ ' ^femlan ta ant having de- a neii to the I, ,11, have waived any- objection with legal d to file several iiifriiigeinents charged and complainant can maintain tile suit as u suit against eacli defendant separately as well ns against all tie 1 fe 1 ts jo tl (/ Umm vital- ot« VT;,*?5 FMei- O’^.Sn.cX 0 led., ft both decided by Blatchford, C. J.). l i e case of Fichtcl v. liaHhel, 173 Fed., 4Sft, •’, RD(2S- counsel omit this. 110.1241 that the belt does not 'witnesses th rekin rdls because comphunan ^ ^ . were “shiny.” In view of the fact, that- complain- nut has conclusively proved (supra, pp. 100-100) the slipping of the driving belt on the roll-pulleys of the Pekin plant, this point seems frivolous However, defendants’ counsel fail to point out that they elsewhere allege (brief, p. 14) that the Pekin plant bad not been in operation when Messrs. Williams and Hartigan visited it. They also fail to point out that it had not been in operation for any great length of time when Mr. Herter visited it (C.R., p. 101, Q. IT). They also fail to state that Mr. Peterson, superintendent of the Pekin plant, testified that the creep of the belt, which is admitted, as well as the slip of the belt on the roll-pulleys, would in time tend to brighten or make shiny the surfaces of the pulleys (D.R. p. 3GG, xQ. 90). The fact is that the Pekin plant is a new plant. Defendants’ counsel (brief, p. 139) misrepresent Mr. Mason's testimony. Mr. Mason testified that the possible errors of bis dial charts, referred to by defendants’ counsel, are so insignificant, in new of the great differences in speed between the two rolls disclosed by the dial charts, that the possible errors are of no moment whatever (C.It. p. 300, RDQs. 385-38J) j compare, supra, pp. 70- 80). The uselessness of defendants’ chronograph records has been shown (supra, pp. 117-119).° , defendants’ witnesses testified that Defendants’ Exhibits, Photographs Nos. 5 and (1 . (D.lt. ,n> (>79,081) were taken while the giant rolls were ‘m the course of construction” (Dll p 77 q 55). This is evident from an inspection' of ’the photographs. The photographs show the giant rolls before any of the improvements, above enumer¬ ated (supra, p. 229), that made the giant rolls a success 111 the early part of 1S97, had been adopted. Of Defendants’ Exhibits, Photographs 353 Nos. 1-4 (D.R., pp. 071-077), Mr. Herter pointed out that Nos. 2 and 4 could not have been taken until 1897 and that Nos. 5 and 0 were taken “dur¬ ing construction” (C.R., p. 570, xQs. 177-178). Photographs Nos. 5 and 0, showing the rolls in the course of construction, might have been taken at the time of the Buyles accident (C.R., p. 570, xQs. 177-182). The date of Defendants’ Exhibits, Photographs Nos. 1 and 3 (D.R., pp. 071, 075) nowhere appenrs, none of defendants’ witnesses having been able to fix the date of any of the pho¬ tographs. Defendants’ counsel misrepresent (brief, p. 140) the statement of Mr. Edison’s nttorney in the Pat¬ ent Office. The Examiner cited against claims 0 and 7 several patents, all Of which, so far as they disclosed crushing rolls at all, disclosed rolls geared together or rolls of which only one was driven by the driving power, as in the Davis pat¬ ent (D.B., p- 555). “None of the references cited showed independent rolls, or massive rolls, or the slugging projections” as stated by Mr. Edison’s attorney (D.R., p. 570). Defendants’ counsel, by falsely making it ap¬ pear that the Bradford patent, showing belt- driven, smooth-faced, Cornish rolls (distinguished, supra, p. 202), was included among the references referred to by Mr. Edison’s attorney, arrived at the false statement that Mr. Edison’s attorney stated, in effect, that belt-driven rolls were not “independent rolls.” The Court must obviously l e on its guard before accepting such statements, many of which arc to he found in defendants’ Defendants’ counsel state (brief, p. 147) that iinnnrently” the elimination of the fi.ctio.. lntcl.es at Sibley and New Vill Bc as 1 e the ■knowledge obtained from defendants. 354 This is mi inexcusable misstatement of .the evidence. The friction clutches were first elim¬ inated nt New Village by Mr. Edison before Nov. 1007 mid probably before Nov. 1000 (C.R., p. 150, Q. 55). This was long before the visit of defendants to the Now Village rolls on April 15, 100S (supra, p. 53) and long before the contracts of April 10 and May 27, 1008 be¬ tween the defendants for the Pekin rolls (C.1L, p. 107, fol. 501; p. 195, fol. 583). Later they were eliminated at Sibley, by Mr. Knowlton, but not at the suggestion of defendants (C.R., p. 011, Q. 17). The statement that the New Village rolls were provided with friction-clutches nt the time of the contract between the Allis-Chalmers Com¬ pany and the Casparis Stone Company in April, 1908 (defendants’ brief, p. 147) is, therefore, false and is not supported by any reference to the record. Defendants followed Mr. Edison in milk¬ ing tbe pulleys fast on the roll-shafts, as in every¬ thing else. Defendants’ counsel (brief, p. 148) state that the Edison rolls at Little Palls were dismantled and their use discontinued. The purpose of the statement, as made, is to mislead. They were dismantled and their use was discontinued be¬ cause the Little Palls Stone Company was unable to live up to its agreement to pay for the rolls (C.R., p. 224, Q. 9). As shown (supra, pp. 190- 193), the Edison, kinetic, giant rolls have dis¬ placed gyratory crushers for primary rock crush¬ ing. The New Jersey Zinc Company crushes only very small stone, from pulverized stone to stone weighing not over 400 pounds (D.R., p. 124, RXQ. 170). In no instance 1ms any machine ever displaced the Edison, giant, kinetic rolls for pri¬ mary rock crushing, for there is no machine in existence that can do tbe work of the Edison rolls. 355 Defendants’ counsel state (brief, p. 108) that the drive by a bolt and the drive by gears had been recognized as interchangeable and substan¬ tial equivalents. This is a mere assertion, con¬ trary to the fact, and no reference is made to the record in support of the assertion. The truth is, as shown (supra, pp. 203, 219-220), that the prior art contains not a single example of belt-driven rolls provided with roughened or irregular sur- ■ faces. Wall’s, rolls were provided with smooth surfaces (supra, p. 220). Whenever the rolls of the prior art were not smooth, the rolls were geared together for co-incident movement. In the prior art it was evidently thought that the co-in¬ cident movement of the rolls, secured by gear¬ wheels, was necessary to enable the picker teeth of the coal splitting apparatus and the like to per¬ form their proper functions. CONCLUSION. For tlic reasons shown, complainant Is entitled to a decree ns prayed for in tlio hill of complaint (O.U., p. 7). Respectfully submitted, LOUIS HICKS, Counsel for Complainant. [8712] INDEX. COMPLAINANT’S RECORD. Bill of complaint . Replication . . Complainant’s notice of taking proofs . . . . . COMPLAINANT’S PRIMA FACIE TESTIMONY. HOWARD C. WILLIAMS, DIroot . Ro-dlroct . . . . FREDERICK L. HARTIOAN, Direct . Cross . Ro-dlroct . EMIL HERTER, Direct . Cross . Redirect . CHARLES A. KLOTZ, Direct . Ro-dlroct . . . WILLIAM H. MASON, WILLIAM H. MASON (r EDWARD M. BENTLEY HOWARD COMPLAINANT'S REBUTTAL TESTIMONY. HOWARD 0. WILLIAMS, WILLIAM H. MASON, HOWARD 0. WILLIAMS (recalled DIroot . PRANK E. TRAPHAGEN, Direct . Ro-dircct . lie-direct . LOUIS A. MARTIN, JR., Gross . Ho-dlrcct . FREDERICK L. PRYOR, Direct . LOUIS A. MARTIN, JR. (recalled), COMPLAINANT'S REBUTTA THEODORE E. KNOWLTON, Direct . WILLIARD M. HARSH, Direct . Cross . WALTER S. MALLORY, Dlroct . Ho-dlrect . HOWARD C. WILLIAMS frees Direct . C0MPLAINAN1 1 Certified copy or patent In e 016 of April 23, 1901, to Thi son, for Improvement In Breaking Rock . . . .- . 2 Certified copy patent In bi 617 of April 23, 1901, to Till son, for Improvement In A; Breaking Rock . 3 Photograph, General Vlev Crushing Plant . . 4 Photograph, Partial View ( 100 Deposition of Emil Hurter. Q. (i. Are w t nderstund li.v tlint that you lire mi expert draftsman? A. Yes, sir. Q. 7. Where do yon perform your duties at the present, time? A. At the New Village plant of the Edison Portland Cement Company. 0 8. Have you inspeeted the jiia.it rolls t i near Pekin in Niagara County in the Slate of New York? A. Yes, sir. Q. 1). On what date did you make your inspi • tion of said rolls at Pekin? A. On Oetolier P.ltli, Q. 10. Are yon familiar with “Complainant's Exhibit, Drawing Illustrating Defendants’ Slug¬ ging. Polls of Empire Limestone Company near Pe¬ kin, N. Y.”? A. No, sir, I am not. That is, I have not studied that drawing. That drawing was made in my absence. .... (). IT. Have you looked over this drawing.' A. 1 have, yes, sir. Q. 12. Will you kindly look at the drawing now and state wl tl yon understand II same? A. Yes, sir, I do understand this drawing. (2. 18. With whom, if anybody, did you go on October P.) to visit the Pekin plant? A. With Mr. William M. Harsh, general manager of the Kelley Island Lime & Transport Company of Marblehead, Ohio. There was also his elder engineer, Mr. Lake, 1 who is stationed at Marblehead, and also Mr. A. . I understand then that you went direct 801 to the plant at Pekin? A. Well that was on Tues¬ day. My visit to Biiil'alo really was iii connection with a set of rolls that we were to put in in Akron, which was on Monday, the 18th of October. Q. 17. Will you now state in detail what took ldnce at the Pekin plant at the time of your visit with Mr. Harsh and his associates on October It), 1!)09? A. We arrived at the plant, which is situ¬ ated about two miles outside of Pekin, at about 12.30 p.m, and they were then about getting ready to start the rolls up for the afternoon’s run. The guards marked b on the complainant's drawing of the Pekin plant wore raised up in the position shown in dotted lines. They also lmd two air cylinders which have a piston and piston rod, one at each end fixed from the floor above or timbers, above in such a position that with the nid of a wire rope fast at one end to the end of the piston rod at the end of the air hoist, and with a hook attached to the other end of the wire ropes, of such shape or form that the same could be made, by holding the same in place, to engage with one edge of the holes _ Umt in the plates. The hook would be held in this hole while the man operating two ropes at¬ tached to a stem of a valve on the air hoists would let air in on the under side of the piston and pull up the rope. 803 Q. IS. Have you prepared a drawing illustrat¬ ing the air hoists of the Pekin plant? A. I have. Q. 19. Will yon kindly produce the same? A Yes, sir. Q. 20. In the drawing which you have produced, will you designate by the letter A, the air pipe to which you have referred? A. I have done so. Q. 21. Now designate by tho letter B, the piston rods? A. I have done so. Q. 22. And designate by the letter C, the wire 102 Deposition of Emil Hertcr. !i04 ropes which you sny were connected :it one end to tlie piston rods B, ? A. I lnive done so. Q. 23. And designate by the letter D, the hooks at the other end of the wire ropes? A. I lnive done so. Q. 24. The hooks D, appear in the drawing which you have produced to lie caught in the holes in regular plates of the rolls wherein holts con¬ necting the snid plates to the mandrels of the rolls are located. Was that what you saw at the Pekin plant? A. Yes, sir. Q. 25. In the drawing which yon have pro¬ duced on tlie right and on the left of the two rolls 805 sIl0'v,1> Rtamls 11 1,11111 holding with each hand a rope c suspended from a horizontal piece. What is the horizontal piece operated by these ropes hold by the man? A. The horizontal piece or lever, as it may be called, operates tlie valve for permitting air to be let into the cylinders under the piston. Q. 20. Kindly designate the said levers by the letter E,? A. I have done so. Q. 27. In tlie drawing produced by von, have you shown tlie hopper of tlie rolls, and if so, letter it XY? A. I have shown the hopper and have lettered it XY. . Q; 28' I" your drawing have yon shown the • incline Z, shown in “Complainant’s Exhibit, Draw¬ ing of tlie Pekin plant”? A. Yes, sir, represented by one line, and I have lettered it 55,. Q. 20. You appear to have shown also the feed roll Zo. Kindly letter it Z2? A. I have done so. Q. 30. Will yon now kindly letter the two rolls shown in your drawing according to tlie lettering shown in Complainant’s Exhibit, Drawing of the Pekin plant? A. I have done so, and in addition I have designated the cored pocket in tlie plates T- and l by K,. Deposition of Emil Hertcr. 103 Q.. 31. You have shown a girder and the 307 foundation of the Pekin plant in your drawing. Kindly letter them respectively A and D? A. I ' have done so. Q. 32. You have shown also in your drawing the pulley S, the pulleys t and u and the counter¬ shaft T of tlie Complainant’s Exhibit, Drawing of the Pekin plant. Kindly letter them to corre¬ spond? A. I have done so. Q. 33. You have also shown the bolt conveyor O. Kindly, letter it? A. I have done so, Q. 34. You have also shown the idler pulley U,. Kindly letter it? A. I have done so. Q. 35. Yon have also shown the belt driving „„„ the rolls in the manner shown in Complainant’s Exhibit,. Drawing of the Pekin plant. Kindly letter the belt in your drawing by the letter U? A. I have done so. Q. 3G. And indicate by an arrow in your drawing the direction in which the drive belt U moves in the operation of the rolls? A. I have done so. Adjourned until November IS, at 10 n.m, same place. New York, November IS, 1000. Mot pursuant to ndjourment. Present: counsel as before. Direct examination of Mn. HERTER continued by Mr. Hioks: Q. 37. In addition to the matters already re¬ ferred to upon the drawing of parts of the Pekin plant, made by you, you appear to have shown on your drawing means for operating the feed roll 7j... Kindly explain your drawing with reference to the means shown for operating feed roll Z,? A. ltefcrring to the drawing, on shaft T there is mounted a pulley AV which in turn lms a licit \\', running to the countershaft AA7.„ on which pullej AA72 is keyed fust. On said countershaft \V;, there is also keyed thereon a spur pinion \\7.,. The said spur pinion AA7., engages with the spur gear wheel AA'r, which in turn is keyed to the feed roll shaft on which the feed roll 55.. is moulded. The reason for using gearing in driving the feed roll Za has been due to the change of direction from the line shaft T and the feed roll 55.. which runs in oppo¬ site direction, the set of spur gears have been interposed. Also, the speed of the line shaft being of a larger number of revolutions than what the feed roll Z2 would run, the gearing, ns shown, lias been used to reduce its speed or revolutions. I have shown on the belt AA7, the direction of motion. Q. 38. Will you now continue your statement of what occurred at the rekin plant at the time oi your visit on October 19, 1909? A. As I stated yesterday, we arrived just as they were ready to start up for the afternoon run and they were then trying to start the rolls. They had one man down at the motor connected with the pulley S. There was also one man stationed at each end of the rolls having in each hand n chain c and the foreman or superintendent of the plant told the liiotomnnn to start up his motor. He did so. The motor was started up and brought to full speed, which in turn started up the line shaft T through the pniley t and as this shaft T was up to full speed, he then jw in clutch that operates the pulley «, which n would drive the rolls through the belt U, i this they failed. Thu belt slipping on the s U2 and IP the rolls failed to start. The litoudciit then told the man at the motor to he motor down again. This was tried three each lime being unsuccessful. They then meed looking around the rolls and found that ml had wedged itself in between the side of II ami cheek plate, which is an extension of ipper A7, down the side of the rolls, wedging 11s fast, the material referred to being rock ay or loam. They then got some long pokers ere standing up in the corner and commenced ' this material out between the side of the ml cheek plate, which took them probably u hour. lit. AY ere these pokers levers « shown in aiuant’s Exhibit, Drawing of the Pekin A. No, sir, they were not. Apparently from imlier of tools that they used for this opern- lliey had very likely been up against this 0. Please continue your statement? A. One as told to get down into the rolls through the a hopper which is about a font; higher than the dump car 55 shown in Complainant's Ex- 10S Deposition of Emil Ilerter. 322 nil- hoists ami the motor ami without the aid of the rails? A. Yes, sir. (1. -111. Now that you have described the efforts made !o start, the Pekin rolls and the startin'; thereof, will .you now describe what took place thereafter? A. When the rolls were running at full speed they closed down the carers or guards b, and then startl'd lo dump in rack from the ear Vi to tlie incline Zj, and starling up the feed roll Via, fed iu about one-half a ear load. The rolls crushed this amount or material going to the hop¬ per beneath the rolls and fed hum there on to a licit conveyer O by a segmental gale operated by (j2S) 11 crank motion, operated by a . . II motor. Q. HO. As I understand you, the rack broken and crushed by (lie rolls passed into (lie hopper beneath the rolls and thence to the belt conveyer O, which conveyed away I lie broken and crushed rock. Is that correct? A. Yes, sir. Q. ill. How long did it take Hie Pekin rolls to break and crush the half load or rock fed to them h.v the feed roll Z2 as described by you? A. About lii seconds. f «07 which enabled the roils successfully to break rock? Deposition of Emil Hector. •Hy Mr. Wilkinson: Q. 1(1. What wore the changes made? A. We changed the style of plates in the first place and put on a plate with larger knobs on. We also changed the friction drive on the pulleys and wo also changed the grease system. We also changed the band friction and we also put a thrust him. ing on tlie lolls. We also changed the holts that hold the plates on. Q. 17. What were the plates having the larger knobs known ns? A. We called them a slugger Plata Q. 18. How many slugger plates did you use on one roil? A. There were two rows, one dia¬ metrically opposite the other. Q. 1!). How high were the knobs on the slugger plate? . A. About 4 inches high. Q. 20. Did you have slugger plates on both of the giant rolls? A. No, sir, we only had them on one roll. Q. 21. And in addition to the two diametric- aHy opposite rows of slugger plates on one of the giant rolls, did you have other plates’’ a Yes sir. ‘ ’ Q. 22. What were the other plates known as? ] A. Regular plates. Q. 23. And were the regular plates provided with knobs, and if so, how high were the knobs? A. The regular plates were provided with knobs about 2 inches high. Q. 24. And was the roll which did not have the slugger plates provided with regular plates having knobs 2 inches high? A. Yes, sir. Q. 25. In answer to Q. 10 you said that you changed the band friction. What kind of friction 548 Deposition of Emil Hurter. 1042 "'us employed before the hand friction was adopted? A. Hope fi'iction. Q. 2(1. With tlio adoption of the slugger plates in tlie uai'I.v pact of 1S97, was an.v motliod of breaking cock by means of the giant colls devel¬ oped? A. Yes, sic. Q. 27. Wlint was the method? A. Kinetic energy method. Q. 28. Did yon watch and did yon become familial' with the development of the giant colls at Edison, N. J.? A. Yes, sic. Q. 20. State what difficulties wece cnconnteced In the construction and operation of the giant ]048 i h1,s nt Ellison> J- (,htl what changes wore made in said colls so fac as you can nt present recollect them? A. In the first place when the colls were tested in April of 1S!)4, we had wooden pulleys keyed on to the shaft and the belt would slip on ' the wooden pulleys, burn and stretch the bolt and finally break it. We then discarded the wooden pulleys and put on icon pulleys with the cope friction. That proved a failure too. The rolls lining set on a. wooden foundation wo could not keep tlie rolls in lino, the shafts froze fast to the bushings. Wo had to make new babbitted bush¬ ings; we laid to take tlie rolls down mid turn oil' tlie shafts. We had to make new bushings alto- 3044 gather. We babbitted the now hashings. Wo then set them on an iron foundation. The iron pHileys that wore made, they had to he taken down and be babbitted as tlie rope friction that we used was becoming inoperative and the pulleys would stick fast to the shaft. The grease which we used for a .lubricant for lubricating tlie bearings with the ordinary compression grease cup could not be relied on. We made large, automatic grease cups and they also proved a failure. It was not until finally we used oil that we overcame that difficulty. h i \ Deposition of Emil Hector. 549 Q. 30. You have stated that one of the im- 704(5 provcnients leading to the successful operation of the giant rolls in the breaking of rock was tliu introduction of the end thrust bearings. When were tlie end thrust bearings put upon tlie giant rolls? A. Sometime in the forepart of 189G. Q. 31. What difficulties which laid been en¬ countered before 1S90, were overcome by the adoption of the end thrust bearings? A. The lateral movement of the mandrel and shaft. Without the thrust bearing we could not keep the belt on the rolls while testing them. Also preventing the lateral movement which the thrust bearing did, the sides of tlie mandrel would not ]040 grind on to the housing; which,' when it did, before tlie thrust bearings were put on, would grind the grit into tlie sides of tlie bearings, which would then burn out the babbitt, necessitating shutting down the rolls, dismantling them and fixing up the bushings again. Q. 32. In your last answer you said that the adoption of the end thrust bearings overcame the lateral movement of tlie mandrel and shaft. What was it tiiat caused tlie lateral movement of the mandrel and shaft? A. Why the throwing of rock -into tlie rolls to test them. Q. 33. What, if anything, was interposed be¬ tween tlie surface of tlie mandrel of the giant :,C4’7 rolls and the plates forming the surfaces of the giant rolls during the earlier stages of the con¬ struction and testing of those rolls at Edison? By ifr. Wilkinson : The question is objected to as leading. A. The lining of zinc. Q. 34. Did the use of tlie zinc lining continue down to the time when the slugger plates were adopted? A. Yes,- sir. •"•"(I Deposition of liniil Jlerler. 1048 Q. 35. State what the experience was with reference to the zinc lining in tile tests nnule of the giant rolls to bi-eak reek? A. Why the lin¬ ing would lie crushed out or squeezed out between the plate and the mandrel, allowing the plate to become loose and then the stud bolts, which were at that time employed or used, the nut on the outer end of this stud would become loose and finally the plate would either crack or fall oil’. Q. 30. Referring to the tests made of the giant rolls at Edison before the adoption of the slugger plates in the early part of 1S9T, that is, to the early tests of the giant rolls in breaking 1040 l'ock’ stlltG w,mt happened to the rolls during these tests? A, The rolls were continually being improved upon. It looked almost like a hopeless case, that is what it did look like. Q. 37. Yon have spoken of the burning, stretching and breaking of the belt driving the giant rolls. When did this stretching, burning and breaking take place, that is, during what operation? A. During the testing of the rolls. Q. 3S. Now, when, during the testing of the rolls, you found that the belt was stretched and burned and broken, what was it that caused the belt to stretch and burn and break? A. By tost- ing them with rock, the rock would not go 1 0n0 through them:; the rock would stall the rolls and the friction not letting go on the pulleys, the licit would be burnt, stretched and break. Q. 30. What friction do you refer to in your last answer? A. The rope friction. Q. 40. And was this same difficulty encoun¬ tered before the adoption of the rope friction? A. Yes, sir, this same condition was also encoun¬ tered with the wooden pulleys. (}. 41. And the wooden pulleys you said were Deposition of Emil Herter. fast on the roll shafts, is that correct? A. Yes, lOfil sir. Q. 42. Referring now to the time when the wooden pulleys were fast on the roll shafts and the rolls were stalled by the rock, what was it Unit caused the stretching, burning and breaking of the belt? A. Trying to crush rock. Q. 43. Under the conditions stated in the last question, wlmt took place with reference to the licit and the wooden pulleys? A. The belt would slip on tile pulleys. CJ. 44. And was it this slipping of the bolt on the pulleys under the conditions referred to flint caused the stretching, burning and breaking of the licit? ]0”3 By Sir. Wilkinson : The question is objected to ns lending. De¬ fendants’ counsel feels inipellod to be more critical of leading questions tlinn he other¬ wise would on account of the exceedingly critical objections to similar questions put by defendants’ counsel to witnesses testify¬ ing about the same matters as the present witness. By Mr. Hicks: The witness having described the stretch- ]cf)3 ing, burning and breaking of the bolt and luiving described also the slipping of the belt under tile conditions referred to, it is not thought that the question referred to is to be regarded as leading, since it merely asks the witness to state the relation existing between the matters already testified to by him. shovel referral to in your answer to Q. 47? A. I should say that it was. Q. 52. Ami according to the stamp of the N. J. & Pa. Concentrating Works upon said bill, at wlmt date was said steam shovel received at Edison, N. J.? A. July the 15th, 1S97. Adjourned to September 1, at 11 ti.in, same place. New York, Sept. 1, 1910. Met pursuant to adjournment. Present: Counsel ns before. Direct examination of Mn. HER'l'ER continued by Mr. Hicks: Q. 53. Before the Victor and Vulcan steam shovels wore introduced at Edison in July, 1S97, for loading rock to he supplied to the giant rolls, wlmt was the method of handling rock at the ■quarry at Edison? A. By manual labor. Q. 54. And by manual labor you mean wlmt? A. By hand labor j men using their hands, crow- liar. Q. 55. At the quarry into what did the men load the rock by hand? A. Into Hat skips. Q. 5(1. Did the loading of rock by hand into the skins continue down to the time of the ncvivel ■>">4 D(ipi),sition of Emil Herter. 1080 tlio witness stilted tlmt before tlie steam shovels arrived in 1S97, nuinnni labor was em¬ ployed for loading rock. Q. 57. What was the size of the rook supplied 1:0 tile giant rolls in the tests made thereof at Edi¬ son before the adoption of the slugger plates in 181)7? A. The rock would he culled one man’s size, a piece 12 by 15 by IS inches, weighing about ■120 to 125 pounds. Q. 5S. And before the adoption of the slugger pUtefs were any attempts made to break larger rock by the giant rolls? A. Yes, sir, pieces about 3 foot by 3 foot cube, weighing probably a ton and 100] u half. If- ol). What happened when a o weighing about a ton and a half, was supplied t., the giant rolls in a test thereof? A. Invariably tlie rock would slow the rolls down and stall them and the belt would slip, burn, stretch and break. Q. 00. Would such larger rock pass through the rolls? A. Very seldom. Q. 01. What then would the largo rock do in¬ stead of passing through the rolls? A. It would rule on top of the rolls, and finally stop the rolls. Q. 02. Wlmt happened when tests were made of the rolls prior to the adoption of the slugger 2 plhtcs by feeding the one man’s size rock to the rolls? A. The rolls would slow down, the belt would slip; so t i s 1 1 n tl e bolt, stretch it and . break it. Q. 03. Bid much smaller or one man’s size rock slow down the rolls to the extent of stalling the rolls? A. Yes, sir. • Q. 04. In answer to Q. 35, you spoke of tlie plates cracking and falling off from the mandrel of the giant rolls during the tests thereof in break¬ ing rock. Was the rock employed in those tests j A h r ) Deposition of Emil Herter. 555 like the rock to which you have just been refer- 1063 ring? A. Yus, sir. Q. 05. Wlmt have you to say of the size of the rock supplied to the giant rolls after the adoption of the slugger plates in 1S!)7? A. Why we done away with manual labor at the quarry and loading with steam shovels rocks 4 or 5 tons could be han¬ dled. Q. 00. And supplied to the rolls? A. Yes, sir. Q. 07. And when after the adoption of tlie slug- ,ger plates in 1S97 larger rock weighing 4 or 5 tons was supplied to the rolls, did the rolls successfully crack and crush such larger rock? A. Yes, sir. Q. OS. Prior to the adoption of tlie slugger dilates in 1S97, was the giant roll crushing plant at Edison open to public inspection? A. No, sir. Q. 09. Was there any notice posted at the plant? •A. Yes, sir, there was a notice painted, “Positively no visitors allowed.” . Q. 70. Mr. Conley, defendant’s witness, 1ms tes¬ tified that “sometimes Mr. Herter \vould fetch in ’some of bis friends,” referring to the' plant at Edi¬ son. What have you to say of this remark made by -'ll'. Conley? A. The only men that I have ever taken through the plant, that is, tlie crushing plant, wherein the giant rolls were, wore draftsmen who were working for me at the time. Nobody was al¬ lowed through the plant unless they had a permit 1 "f> wliieli was given by Mr. Edison or Mr. Mallory. (I. 71. Did these draftsmen accompany you in the course of their duties? A. Yes, sir. Q. 72. Wlmt was the length and diameter of the intermediate rolls, that is, the rolls directly ’be¬ neath the giant rolls at Edison? A. 4 feet 'in diameter and 4 feet face. Q. 73. Slate wlmt the tests showed with respect •to the intermediate rolls before the adoption of tlie SStt Deposition of Emil llertor. Deposition of Emil Dorter. 557 1G0G slugger plate on the giant rolls in the early part of IS!) 7? A. We laid the same trouble with the intermediate rolls as we did with tliu giant rolls. Plates would be broken, eomu oil : bolts would get loose and they would come out; the bearings would IWH out; the greasing system, which is the same as used on the giant rolls, was no good. We had the same trouble with belts, the belt would slip, luirn, stretch and break. We laid the same trouble with the friction and the same trouble with the bearings of the pulleys of the giant rolls. The zinc on tlie plates would also work out. Q. 74. What do yon mean by the zinc on the 1007 Ptoto? A. Tlie soft metal lining between tlie plate and the mandrel. Q. 75. Were the intermediate rolls stalled? A. Yes, sir. Q. 70. How far apart were the giant rolls at ISdison sot at the time referred to? A. About 14 inches. Q. 77. Since tlie adoption of tlie slugger plates in the early part of 1S!)7, how far apart lias it been found in practice possible to set the giant rolls and successfully operate them by tlie kinetic energy method ti cl g 1 c si 0 if rock? A. I. would say that that depends a great deal upon the ,.„o product you want to make. They have been set out as far as 22 inches. Q. 7S. And how near together have they been sot? A. So that tlie slugger plates would clear the other mandrel by about one-half an inch. Q. 7!). I understand from your last two answers that since the adoption of the slugger plates in the early part of 1S07, in the crushing of rock by tlie kinetic energy method, it has been found in prac¬ tice that the giant rolls can be set either close to¬ gether or rather far apart, according to the desired product, and that when set in either way the giant V -i f rolls will operate successfully in breaking and JGCO crushing rock. Is that correct? ISy Mr. Wilkinson : The question is objected to as loading. ' A. That is correct. 7 Q. SO. Referring to defendants’ exhibit, photo- 7 graph No. 3, state what was the use of the air cyl¬ inders shown on that photograph? A. Tlie air cyl¬ inders, marked Figure 1(1, were used to slide the skips from the center of the mine truss to the face of the quarry so that tlie men could load the skips with the rock. Q. 81. Over what did the skips slide? A. Over 1070 the bottom face of tlie quarry. Q. 82. You mean then that the air cylinders dragged tlie skips upon the ground? A. Yes, sir. Q. S3. Were the air cylinders used at all for ole- voting the skips, that is, for lifting the skips up r~ from the ground? A. No, sir Q. S4. And how were the skips loaded with rock? A. By hand labor. Q. 85. State, if you know, what was originally the object of milking the crushing rolls at Edisoii of so great a diameter? A. The larger the diam¬ eter, tlie greater the angle of bite or the larger )071 piece of rock it would take. Q. SG. From 1S93 to the latter part of 1S97, what class of men was employed at the plant at Edison, N. J., referring to the character of the work performed by them? A. Mostly men that can’t rend or write. Construction men. Q. S7. And what were the construction men \ doing during that time? A. They would be test- , ing the plant and repair it, test it and repair niid so on, that going on continually. Q. SS. And during that time from 1S03 to tlie fins Deposition of Emil Harter. 1072 latter part of 1S07 iii addition to testing and re¬ pairing, what have you to say as to construction work? A. That was continually going on. Q. SO. From ISOS to January 7, ISOS, was the N. J. & Pa. Concentrating Works doing business at the plant or with the plant at Edison, N. J.? A. No, sir. Q. 00. Was it making any sales during that time? A. No, sir. Q. 01. Was it spending money during that time? A. I should say it was. Q. 02. For what? A. To make a commercial success out of the giant rolls. 1078 Q- n3' Before the adoption of the slugger plates in the early part of 1807 and the develop¬ ment of the kinetic energy method of breaking rock in connection therewith, what was the feel¬ ing at Edison with regard to the possibility of making a success of the giant rolls? By Mr. Wilkinson : The question is objected to as calling for speculation on the part of the witness, ” and not for facts. A. Why if tlie giant rolls would not be a suc¬ cess, everybody would be out of u job up there. 1074 Nobody had any hopes at all that they would ever lie perfected. Q. 04. From 1SD3 to January 1, ISOS, did you observe whether Mr. Edison was present at the plant at Edison, and if so, whether lie was doing any work with regard to the giant rolls? A. Yes, sir. Why as soon as one “hug” would develop’ he would scheme out a way to remedy that and 1 11 1 1 B 1 lo]el | i | again and this continued from 1SU4, April, until 1887 when the slugger plates were put on the giant rolls. Deposition of Emil Dorter. 559 Q. 95. About how many hours a day did Mr. Edison work at the plant at Edison? A. We worked nil the way from one day to 30 hours with¬ out sleeping. This- was a greater part of the time while we were up there. Q. 90. You have referred to many difficulties that wore encountered in the development of the ■giant rolls. Do yon remember whether at the times these several difficulties arose there was anxiety or discussion with regard to them? A. Yes, sir. Well, in the first place, when wo tried the rolls in April of 1894, the discussion about the giant rolls framing, whether it should bo made out of cast iron or steel was quite a lengthy discussion and we also laid some very hot times over it. The discussion about the frictions, the wire rope; discussion about the elevators; the discussion «bout the whole plant anyway was — there were some hot times. Q. 97. Deferring now to the speed at which the giant rolls were revolved in tiie tests made at Edison to break and crush rock by means of them, state if you can, wlmt the various speeds employed wore? A. In 1S94, as near as I can recollect, they rail about 100 revolutions per minute and in tlie test of July, 1895, they ran at 135 revolutions per minute and in tlie forepart of 1S97, when the slugger plates were put on, they ran at about 212 revolutions per minute. Q. 98. 1 believe that you have stated that in the development of tlie giant rolls some oil system -was finally used, can you state when that oil sys¬ tem was first used at Edison? A. About the fore¬ part of 1S97. Q. 99. Assuming the diameter of the giant rolls to have been (1 feet, at 100 revolutions per minute tlie surface speed would he 1S85 feet per minute, would it not? A. Yes, sir. -( Deposition of Emil Hunter. 1C78 Q. 100. At 133 revolutions per minute wind wns the surface speed? A. 2,314 feet. Q. 101. At 212 revolutions per minute, what was tli'e surface speed? A. 3,000 feet per minute. Q. 102. Wlmt, if anything, can you say with regard to the wear and tear upon the giant rolls and tin i to i ill ti lolls resulting from the tests thereof in breaking rock before the adoption of the slugger plates? A. The wear was very con¬ siderable. Q. 103. And did the wear referred to necessi¬ tate repairs as a result of the tests? A. Con¬ tinuously. 1070 Q- 104. Are you acquainted with Hr. Fred A. Phelps, who has testified ns a witness on behalf of defendants herein? A. Yes, sir. Q. 105. Do you know whether or not Mr. Phelps designed a pair of crushing rolls for the Hudson Diver Stone Supply' Company? A. Yes, elr. Q. 10(1. When did he design said rolls? A. In 1800. 1080 Q. 107. Were the rolls designed by Mr. Phelps erected at any place and if so, whore? A. They were erected at Stone Coe, Dutchess County, Now York State about 0 miles below Poughkeepsie on the New York Central and Hudson Diver Bail- road. Q. 108. About when were the said rolls erected at that place? A. About the latter part of 180(1 or the forepart of 1807. Q. 100. Were the said rolls successful in breaking rock? A. No, sir, they had the same defects as the giant rolls at Edison had. Q. 110. Do you know whether application wns made to Mr. Edison for assistance in respect to said rolls designed by Mr. Phelps? A. Yes, sir. Q. 111. State, if you can, when application Deposition of Emil Horter. 501 Was first made to Mr. Edison for that purpose? 14)81 A. In 1807, the latter part. Q. 112. What was Mr. Edison’s answer, if you know? A. That lie would not touch them. Q. 113. After the first application made to Mr. Edison in the latter part of 1807, was there a second application made to Mr. Edison for the same purpose? By Mr. Wilkinson: This lino of examination is objected to ns irrelevant, immaterial and not proper rebuttal testimony. Q. 11.4. And when wns the second application made to Mr. Edison? A. In the forepart of 1007. Q. 1.15. And what wns Mr. Edison’s answer 'to the second application? By Mr. Wilkinson: The objection is repented anil the further objection is made that so far ns this witness is concerned the matter inquired about is purely hearsay. A. He rebuilt the rolls for the Benson Mines Company. Q. 11.(1, In view of the objection on the ground ]fi83 of hearsay, just made by defendants’ counsel, please state whether you acted as Mr. Edison’s agent in the rebuilding of the rolls? A. Yes, sir. Q. 117. Did you inspect the rolls at Stone Coo in the early part of 1007? A. I did, and also made a report on them. Q. IIS. State in what condition yon found the said rolls and the construction thereof? A. The rolls at Stone Coe or the Phelps rolls, as we called them, had mandrels constructed similar to the •mandrels of the Edison giant rolls. The plates were constructed the mime way. lie also iifn.il a / I „ 1 tween tlie plates of the mandrel ami the under-face of the plate, lie also used only one now of holts to each plate. The only dilTerenee in the construction of the plates was instead of hav¬ ing knobs on them, as the Edison giant rolls had, they had a corrugation the full width of the plate. These rolls were S feet in diameter and had a. 5 foot face. They wore also driven with a east iron pulley with a friction. The plates on the rolls, a groat many of them were broken. There were also some broken plates laying on the ground. The rolls were sold as scrap iron. Q. 110. Did the Phelps rolls which yon have been describing, have slugger plates thereon? A. No, sir. Q. 120. Then were the corrugations, which you say were used instead of knobs, of the same height? A. Yes, sir. Q. 121. Dow was the friction made on the Phelps rolls? A. Similar to a regular friction clutch. A cast iron rim upon which the wooden shoes would bite. Q. 122. I understand you to say that Mr. Edison in 1007 reconstructed these Phelps rolls, fu reconstructing them did Mr. Edison employ unv nnrt of the shafts, mandrels and nlates of the V ') Q. 1 2d, Dul the plates put on by Mr. Edison include slugger plates on one roll? A. Yes, sir. Q. 124. And what was the character of the friction device put on by Mr. Edison? A. Simi¬ lar to that used at Edison in 1807. Q. 125. That is, tlio friction band? A. The friction band with chilled iron shoes and chilled iron rings, mounted on a soft, iron spider, which was keyed and bolted fast to the end of the shafts. Q. 12(1. When the Phelps rolls had been thus dismantled and rebuilt by Mr. Edison, did they operate successfully in the breaking- and crushing of rock? A. Yes, sir. Q. 127. Where were the remodelled, Phelps rolls set up? A. At Denson Mines, St. Lnwronce County, State of New York. Q. 128. Do you know whether after said Phelps rolls were remodelled by Mr. Edison, royalty was paid to Mr. Edison under the two patents involved in this suit by the Denson Mines Company for the operation of said roils? By Mr. ILKINSON : The objections to this line of questions be¬ fore noted are repented and it is agreed by complainant s counsel that such objections are to bo considered ns applying without repeti- 504 Deposition of Emil Hcrtor. 1000 After recess. Cross-examination of Jin. HERTER by Mr. Wil¬ kinson : xQ. 130. During the seven years of yonr em¬ ployment, from 1S03 to 1000, by tins N. -T. & Pa. Concentrating Works, what positions did yon fill, nnd what where yonr duties? A. When I first cmne there in 1803 I wns employed ns n drnfts- mnn. Prom sometime in 1S94 I wns chief drafts¬ man nnd imd charge of the making of all drawings nnd held that .position up to 1000. xQ. 131. Did you become familiar, during your said seven years of employment, with the apparatus nnd machinery of which the plant at Edison, New Jersey, consisted? A. Yes, I did. xQ. 132. It appears from the testimony of other witnesses that previous to the construction of the plant of which the giant crushing rolls were n part, there had been in operation an old plant comprising a Lidgorwood cable way for carrying the ore from the quarry; jaw crushers and Ilrennan rolls; rotary screens; nnd separating liar nnd belt magnets. Wns such old plant still in operation when yonr connection with said com¬ pany commenced in 1893? A. No, sir. xQ. 133. Did you ever see the old plant in 1092 operation? A. No, sir. xQ. 134. When your duties commenced in 1S03, to what extent had the old plant been dis¬ mantled? A. Why it had been practically all dismantled. xQ. 135. The object in dismantling the old plant and constructing a new plant was to in¬ crease the commercial output of the mines over that of the old plant, was it not? A. That was tlie understanding. xQ. 130. Tlie new plant comprised quite a imposition of Emu Herter, 505 number of different machines of various characters through which the ore passed and was treated in me way or another from the time the ore wns taken from tlie quarry until tlie briquettes were ipmpleted, did it not? A. It did. xQ. 137. 'The new plant comprised the fol¬ lowing machines and apparatus, did it not? limit rolls; intermediate rolls; elevator No. 1; Irst 30 inch rolls; second 30 inch rolls; 24 inch ■oils; elevator No. 2; dryer; elevator No. 3; con- ’eyer to stock house No. 1; stock house No. 1; innveyor from stock house No. 1; three-high rolls; lonveyer and elevator to 14 mesh screens; 14 nesh screens; 12 inch magnets; first magnet; sec- aid magnet; third magnet; a second dryer; 50 nesh screens; 8 inch magnets; dusting chamber or dephosphorizing; 4 inch magnets; stock houses STos. 2 and 3; and briquetting plant? A. It did. xQ. 138. When the giant crushing rolls were irst tested by crushing rock with them in April, ,S94, what wns the condition of the rest of the lew plant, that is, had it been then completed? A. sTo, sir. xQ. 130. How far had the work progressed at hat time in constructing the rest of the plant, hat is the plant with the exception of the giant ■> Deposition of Emil Hurler. 3000 xQ. 1.43. After tile rock which had been crushed during the April, 1894, test, lmd been stored in stock house No. 1, wluit was done with it? A. That would lie used for testing mill No. 1 which was not completed at that time. xQ. 144. What did mill No. 1. consist of? A. Four sets of three high grinding rolls, 14 mesh screens, 12 inch bar magnets, a dryer. 30 mesh screen's, S inch bar magnets, a dusting apparatus and 4 inch magnets, belt conveyers, scraper con¬ veyers and elevators. xQ. 145. About what date was mill No. 1 completed and first tested? A. Not until about 1(!07 August, 1S95. xQ. 14(1. Have you, or are there in existence, any records which would establish the dates of the completion and testing of the various parts of the new plant at Edison, N. J.? A. I have no records; I have no data that I could refer to. That I could not answer. xQ. 147. Do you remember whether or not the plant at Edison, New Jersey, was shut down when a strike was threatened in the year 1805? A. Yes, sir. xQ. 148. Do you remember in what month said shut down occurred? A. Latter part of August, 1895. ' 10!)b xQ. 1 4 o. A ( the time the strike was threatened and the plant shut down in the latter part of August, 1S05, how long lmd the plant then been in operation? A. Which plant? xQ. 150. The new plant comprising the va¬ rious pieces of mechanism referred to in xQ. 137? A. The plant, as I understand your question, tile plant as a whole had not linen in operation up to that date. xQ. 151. Do you remember that on July 15, 1895, an accident happened to a man named V / I K \ Deposition of Emil Hertor. 507 ■James Bayles at the crushing apparatus at 1009 Edison? By Mr. Hicks: The question is objected to ns double, since it includes a question involving recollection of date and a further question involving recol¬ lection of tlie accident. A. Yes. xQ. 152. I call your attention to a certified copy ol' nil article entitled “Accident at Edison” which appeared in the Sussex Independent of July 19, 1S95, and ask you to state whether or not the accident therein described is the one which 1700 happened to James Bayles? A. Well, that is ail account of the accident but the man was not as badly injured as stated there. xQ. 153. The iron door which injured Bayles laid been provided to prevent rock from being delivered to the 30 inch rolls from the conveyer leading from the intermediate rolls, had it not? A. Yes, sir. xQ. 154. And such door lmd been provided because in the operation of the crushing plant the 30 inch rolls sometimes stopped rotating by reason of the shearing of the shear pins, and before the door was provided the rock would pass to the 30 inch rolls and have to be removed 3701 before the crushing plant could again operate, had it not? A. Yes, sir. xQ. 155. So that before the accident to Bayles occurred, the crushing plant lmd operated suf¬ ficiently to disclose the need of said door? A. I do not think so. xQ. 150. Why was the door provided then? A. Why on the first test that we run in April, 1S94, we broke a lot of gearing on account of the ore getting into the first 30 inch rolls and 50S Deposition of' Emil I.Iorter. 4702 the door was put in there on purpose to prevent the ore from getting down into the rolls, espe¬ cially so that the elevator delivering the ore or crushed rock from the intermediate rolls could not be stopped quick enough or the whole plant shut down to prevent the ore from going to the rolls while they were not up to speed. xQ. 157. About how long should you say the crushing plant had been in use prior to the acci¬ dent to James Bnyles? A. I should not say over 20 days, if it wns that. xQ. 15S. During that time, from about 20 days before the aceident to Buyles occurred until the plant shut down the latter part of August, -1703 1805, when the strike wns threatened, the crush¬ ing plant was running continuously, wns it not? A. No, sir. xQ. 150. It was running practically every day during that period, wasn’t it? A. No, sir. It might he running for a day and then repairing for a day or two days and then starting up and testing it again, and then something else would break in . the crashing plant, and we would have to shut down and repair that again. xQ. 100. Was not mill No. 1 put into operation about the time that the crushing rolls were put into operation, which you have said was something 1701 like 20 days before the Bnyles accident? A. I think not. In the first place you could not, run mill 1 unless you could run the crushing plant and to run the crushing plant, you would have to run mill 1. xQ. 101. Why was it, necessary to run mill No. 1 in order to run the crushing plant? A. Because your supply of ore in stock house No. 1 would not last for more than about a day. xQ. 102. So that it was necessary for the crushing plant to operate in order that there might Deposition of Emil Herter. 577 78 Reposition of Emil Heeler. 3782 xQ. 214. In ttie forepart of 1S97 when the friction connection between the pulleys and roll shafts had been improved by substituting the band and shoes for (lie rope clutch, was it then under¬ stood that this improvement in the friction clutch ■ had anything to do witli the successful operation of the giant crushing rolls according to the so- called kinetic energy method? A. Yes, it had. The shoes and hand being substituted for the wire rope, eliminated a great deal of our belt trouble. It was also found that while crushing rock the rolls would not slow down or he stalled as quick as they were when the wooden pulleys or the fric- 1788 tion "''t1' the wire rope had been used. I think that from Mr. Edison’s observation at about this time and probably April or March of 181)7, that he then tumbled on to kinetic energy that was stored in the massive rolls running at this high rate of speed, namely, about 212 revolutions. xQ. 215. To what extent was the plant, ns a whole, at Edison, If. J., operated commercially be¬ fore it was finally abandoned in 11)00? A. The plant ns a whole was run sometime in 1S08 and was finally shut down for repair about in Decem¬ ber, 180S. The whole year of 1S00 I was working at Orange in developing the drawings for the plant tile Edison Portland Cement Company at New Village. We again started up the Edison plant I think about the first of December, 1S00, but did not start crushing material until about the first of May. Our rope elevators in the crushing plant, nnd especially No. 1 elevator with the wire ropes that we had substituted for links and pins to carry the buckets, broke down sometime in the month of July. Mil] No. 1 was run to some ex¬ tent. We also had trouble in Mil] No. 1 with our fine pulverising rolls called three-high rolls. The concentrates or ore made by mill No. 1 was stored V J \ Deposition of Emil Hcrter. 579 in stock house No. 2, and from there taken to the 1785 briquetting plant and that was run to some extent. The briquetting plant finally shut down in the latter part of November of 1900. xQ. 21(1. Wlmt as the reason that the plant at Edison, N. J. was abandoned and dismantled, never to be used again, after November, 1900? A. It was a question of money because I had started when I came back from the plant in December of 1900 to remodel and build the whole crushing plant of concrete and structural steel, as the wood framing or timber gave us too much trouble in our small crushing plant wherein tiie first 3(i, second 3(i and 24 inch rolls were situated. Also our dryer 1730' building, which was made of wood, was getting ratjier flimsy, carrying the load and pull of the belts imposed thereon necessary to operate the ma¬ chinery in the same. The conveyer over our stock house No. 1 was badly on the sick list for want of some better material than wood to carry its load. This same condition existed in mill No. 1 and also at the briquetting plant. xQ. 217. As the giant crushing rolls were suc¬ cessfully operating ns early as the foropnrt of 1S97, they were not responsible for the final aban¬ donment of tiie plant at Edison, N. J., were they? A. Well, it was a question of money, ns I stated before to carry on the reconstruction. 3787 xQ. 21S. Does not photograph No. 5 also show the wooden elevators, which prior to July, 1895, had been replaced for iron ones? A. Yes, sir. This photograph No. 5 was taken during some con¬ struction period. xQ. 219. In the operation of the giant crush¬ ing rolls, before the accident to Boyles occurred, did the delivery of the rock to the rolls reduce their speed even when the rolls were not stalled? A. Deposition of Emil Dorter. 1738 xQ. 220. In the operation of the giant crush¬ ing roils prior to the Doyles accident, after the speed had been reduced by a charge of rock, the speed was allowed to accelerate before another charge of rock was supplied to them, was it not? A. Yes, sir. With onr system of delivering the rock to the rolls, there would he quite an inter¬ mittent feed which would allow the rolls to pick tq) their normal speed before the second skip was delivered. We also found at this period in 1S!>7 we tried the experiment of feeding the rolls witli a roller feed on the top platform so that the man having charge of this roller feed could hold hack 1731) "’'th a fulcrum and men at the outer • end of the lever giving these rolls a lift, ns we called it. xQ. 222. The giant crushing rolls as used in the forepart of 1S07 were the same as they were "’hen used in 1S35, except that the rope friction had been replaced with the hand and shoes fric¬ tion; that the centering bearings for the roll shafts laid been provided in the forepart of 1897; that tlie plates which were on the mandrels in 1895 had been replaced by plates seated on the mandrels Hjjm: with your rat-oiled ion or the Ellison , nt the time the m-ticte was published? A. si n lenient here tlint several large buildings like grain elevators were not completed at date. The statement, that the roll was 7 in diameter is not so. The statement that buckets on (lie belt were like millers use Hour is iueorreet and also takes tile ore ii]> al !t() feet is also iueorreet and should have 1 about (it) feet. “From this pair it goes dowi two smaller pairs say a foot each in dimne should he 2 feet in diameter. We had no 20, (on Hi nek house nearh.v. “I was told that a Hie trial of the erushers a few weeks ago the cri era themselves worked satisfactorily.” This not so. The only tiling that lie has got eon here is the slipping of the hells “whieii Inins power (o Hie rolls,” did not work siitisfae(oril.i *Q. 231. What should have been (lie sti his work at Edison was one of the most colossal experiments of modern times, as while there may he other cases where, perhaps, more money has been spent in experimental work, I do not know of a case where one man planned, designed, con¬ structed, experimented, tested and redesigned, re¬ constructed,' retested spending as long' hoars ns already stated, doing it practically all on his own money. During all this time Mr. Edison did not receive any recompense in the way of salary, and the royalty he is now receiving ail'd hopes to re¬ ceive in the future from the Edison giant crushing rolls will in small measure return to him the money expended in the work already described. I produce a report from Mr. Edison dated Jan¬ uary the 12th, 1S9S, which he had read at a meet¬ ing of the stockholders held in January, 1S9S. The report is as follows : — Thoms President. n Jersey City, N. J. Orange, If. J., 1/12 1S9S. The Mills of the Company were completed and construction work stopped about Novem¬ ber 1; The Mines were also ready, nnd strip- Valter S. Military. itil there remains at present lint . engaged iii milking such changes loajr this testing period will con- ere is every rensoii lo expect that e of long duration as the only re- enlly in the crashing plant is the the’ Dryer and the insufficient >r the slack, making it impossible >h heat into' the Dryer to evnpo- waler from the ore when it is d with imidj ice and snow. This use from the change in loading oading to steam shovels, the lut- 1 that comes in their way, where work, mud, roots, ice and snow ided. ngcs are now being made and we finished no further difficulty will wet ore. The working of the lint otherwise has been up to ex- leen constantly striving to reduce nining by drilling less boles and ynamite per ton of rock blasted, se, threw more work on the mill i vertigo size of the blasted rocks mi lack of dynamite, the slugger • Giant rolls were severely taxed it was readied where tliey were e rolls by the action of the rocks, e which has been made in tbe the slugger plates the defect was n advantage and now the rolls ytliing that; can be put into tbe the cost of mining lias been re- irge steam shovels work perfectly renter quantity and at a cheaper rns expected. The two shovels mpaeity lo supply the mills with •e tons per day of t>0 hours. Deposition of Walter S. Mallory. 051 Dleclrical Machinery is run from that plant. The Dricking plant has also been tested from time to time, and changes made until the only defect now known lo prevent con¬ tinuous operation, is tbe pinching of the oven buckets, causing a number to dump their contents prematurely. The whole of tbe 7,500 buckets Imd to be disconnected and sent to the shop to undergo an operation, this, while not; expensive, requires lime and is now being done. Our expenses now for labor are cpiite small and for material comparatively nothing. When satisfactory test: shall have been made and the mills can be depended upon for con¬ tinuous running, it will lie necessary to pro¬ vide money for operating the plant between the time the ore is delivered to consumers and the cash received from them; I am in negotiation at the present lime with a syn¬ dicate to furnish operating money until the Company has its own funds, but ns to the money needed to liquidate the Company’s present indebtedness and that for test ex¬ penses, leases, insurance and taxes nothing has been done except by myself. I am still prepared, ns far ns I am able, to furnish the Company money receiving for it (lie stock of the Company at par. Nothing so far has developed to change my estimates of the ultimate profitableness of this enterprise, of which the Edison plant is but a forerunner of a business which must reach great proportions.” Q. 10. At the meeting of the stockholders held in .Tannary, ISOS, who read Mr. Edison’s report dated January 12, ISOS, which you read upon the record at the end of your answer to the last question? A. I did. Q. 11. The letter head of Mr. Edison’s said report, gives the name of J. E. Ttandolph ns uuz imposition or Walter S. Mallory. if so, when did lie die? A. Mr. Randolph is dead and ho died two or three years ago. Q. 12. Have yon here present the hills for the two steam shovels mentioned by you and also mentioned in Mr. Edison’s report of January 12, ISOS? A. I have. Q. 13. According to said hills, when were the said two steam shovels delivered at; the plant at Edison, X. J.,? A. The Victor shovel, shipped by the Toledo Foundry and Machine Company was received at Edison, X. J. July (1, 1S07. The Vulcan shovel, shipped by the Vulcan Iron Works Company, Toledo, Ohio, was received at Edison, X. J. on July 15th, 1807. Q. 14. In your answer to Q. 0, yon spoke of mi electric crane employed for hoisting the skips containing ore and delivering the ore into the hopper over the giant rolls. Please stale whether nt any i‘"ie in the development of the giant rolls at Edison, another electric crane was employed for the same purpose, so that two, electric cranes were used? A. As I recall the second electric crane was installed in 1897. Q. 15. What, if anything, did the use of the wo electric cranes in 1S97 disclose with regard :o the manner in which the rock should lie dc- iveral to the giant rolls? A. Previous to 1897, vlie" "-e were operating only one electric crane’ ho interval of time between the dumping periods Deposition of Walter S. Mallory. 053 Then the two hooks on the sides would he re¬ engaged and the empty skip returned to the car. When we first had the electric crane we had a very great deal of difllculty with it which in a measure accounts for the difference in time neces¬ sary to make a round trip. With the two cranes in operation we, for the first time, were able to discharge the contents of a skii» into the rolls very shortly after the first one had been dumped, for the reason that one crane operated on one side of the crushing building and the other crane on the other side of the crusher building, so that each was independent of the other except as to the operation of dumping the rock into the rolls after the skip had been landed. Q. 1(1. Did the use of the two cranes in 1S97, one skip being dumped quickly after the other, teach anything in regard to the time within which rock could be properly delivered to the rolls? A. Yes. It showed us that, it was desirable to have a period of time for the rolls to regain their speed after the first skip had been dumped and it also showed us that it was necessary not to dump the second skip too quickly for fear of flooding the four-foot rolls, which were directly underneath the giant rolls. We also learned at that time that a skip load of small rock which would pass quickly through the giant rolls if followed up by a second skip load of small rock, would often J. IS. in your answer to Q. !), you referred to Gates crusher. Please state what kind of slier that was? A. A Oates gyratory erushcr. 1. II). Do you recall any change made hi the ntershaft which drove the giant rolls at Edison I in the pulleys on the countershaft and on the nt roll shafts? A. 1 do. The countershaft in which the giant rolls were driven was orig- lly built upon timber, and as 1 recall, in the er part of 181)5, it was replaced by a counter- f't resting on cast iron. At this same time, re was a change in the pulley lu the counter- ft driving the giant rolls which somewhat in- ised the speed of the said rolls. . 20. Do you know approximately in what >th or months in the latter part of 1S!)5 the ages referred to were made? A. As 1 recall, er in October or November. . 21. Deferring to defendants’ exhibit, namely, article entitled “.Edison’s revolution in Iron ing,” in McClure's magazine for November, f, it is said on page S7 ; — “Again, rock is dropped over ten feet into the pit before it strikes the rolls, and impact on the rapidly moving roll is orten great enough to break the boulder in two.” 0 3™ 1 1 I ctl er at any time in the ilopment of the giant rolls at Edison, the md described of breaking a boulder by letting ill from a considerable hniirht n ...... n.„ o Deposition of Walter S. Mallory. 055 Q. 22. Was the effort to obtain the benefit of this action made before or after the adoption and use of the slugger plates? A. My recollection is that it was after, as before the adoption of the slugger plates, comparatively few large rocks were crushed. Q. 23. In your answer to Q. !), you slated that from 181)3 to 11)00 Mr. Edison contributed the sum of §1, -100, 000, which taken with the sum of §705,300 previously contributed by Mr. Edison, made a total of §2,174,000. Please state, if you can, what the development of the giant rolls cost Mr. Edison up to the forepart of 1S!)7? Hy Mr. Wilkinson : The <|iicstion is objected to as irrelevant, immaterial and ns calling for a mere spec- - illation. A. I have no definite figures with me, but I re¬ call some years since working up an estimate for Mr. Edison in which we estimated that the direct and indirect cost of the giant rolls during the period mentioned, was over §200,000. Q- 24. Can you state approximately the amount spent upon the plant at Edison during the period mentioned in my last question? Hy Mr. Wilkinson: Same objection. gum i„ fl Ibi ic tilling to the lignres which .vou have given, amounts in the aggregate to what? A. Over $1,400,000. (2. 2(1. And about how much did Mr. Edison personally spend during the venr 1S!I7? A. I could not say. Q. 27. Do yon know how much money was spent during the year, 1807, upon the plant? A. I do not. If I did, I could give yon the amount that Mr. Edison contributed as at, that time he was supplying all the money. Q. 2S. What relation existed between the giant rolls and the rest of the plant at Edison, N. J., with reference to the utility of one without the other? A. From a commercial standpoint, the possibility of snving was greater, so far as costs were concerned, with the giant rolls than any other operation in the whole plant, as whatever could be saved per ton would be multiplied by at least 4 times per ton of concentrates, so that Mr. Edison thoroughly realised the fact that unless the giant rolls could he made to operate success¬ fully, our chances of reaching the commercial cost we hoped to obtain, would be very much less, as a result of which every effort possible was made to make the giant rolls a success. Q. 2fl. Disregarding the commercial operation, md taking into view only the actual or nossibb. radical operation, without, the existence of tin llama* of the plant at Edison? A. If the ginn ills laid been capable of doing the work fo hieli they were intended, they could have beei soil independent of (lie balance of the plant a dison, but as a matter of fact, to dispose o leir product it was necessary to use the Imlanc the plant, at Edison, X. .T. (j. ill. There would have been no utility in Mi rks regarding the use liv the Company 'iis made liy .Mr. Edison? A. The Xew I Pa. Concentrating Works worked an¬ ise liy which they were to have the ex¬ it in certain territory for the use or his in connection with the concentrating % loregoing <|iicstiou and answer and all • ones are objected to without repel I- s irrelevant, immaterial and improper calling for testimony not raised hy any II this suit, and as nor ni-mmi. Deposition of Walter S. Mallory. CGI ■him to the X. J. & Pa. Concentrating Works for stock in said Company, was it not? A. He took stock up to tlie amount of the authorised capital and thu Company now owes him several hundred thousand dollars, which it lias been unable to pay. All merchandise debts, as well ns loans from banks, have been paid in full. .\Q. 43. When was the X. J. & Pa. Concentrat¬ ing Works organized or incorporated? A. As I recall, it was either in 1888 or 1889, at which time it executed a license agreement with Mr. Edison •covering inventions already made and any that might he made in the future. About the same time two other companies were organized to carry on the same work, one being the Xew York Concen¬ trating Company of Xew York State, and the Edi¬ son Iron Concentrating Company of Michigan, both companies taking similar licenses from Mr. xQ. 44. What was the consideration received liy Mr. Edison for granting to the X. J. & Pa. Con¬ centrating Works the exclusive territorial license under his inventions? A. They were to pay him a. royalty of so much per ton on all concentrates shipped. .As a matter of fact, Mr. Edison never received any royalty from the three companies in question. xQ. 4i>. Itcferring to the first plant which was constructed at Edison. X. .T. liv the X. J. & Pa. (i(i2 Deposition of Walter S. Alullory. centrales encountered some dillieulty in utilising tlie concentrates by reason of the line powdered character resulting in Lite concentrates being blown up tlie smokestacks or chimneys of the furnaces, did they not? A. There seemed to be quite a de¬ cided difference of opinion among tlie various blast furnacu managers as to what percentage of tlie \ concentrates could lie carried on a furnace. \ xQ. 4!). One of tlie objects in constructing tlie new plant at Edison, X. J., was to overcome such real or fancied objection to pulverised concentrates by forming tlie concentrates into briipiettcs, was it not? A. Thu principal reason or constructing tlie new plant was to reduce the cost of manufacture and try and make tlie proposition commercial. At tlie time tlie plant was first discussed and designed, and by that I mean about tlie period of 1 S!)3, we did not consider ns seriously tlie problem of bri¬ quetting as was done at a later period, although some experiments were tried, as f recall, in 18!)5. xQ. 50. At the time that tlie giant crushing — ^ rolls were first used to crush ore in April, 1804, how far had tlie work of construction progressed of tlie rest of the machinery composing tlie new plant at Edison? A. Aly recollection is that we were compelled to spout outside the building tlie first ore which we attempted to nut throuiih tlie Deposition of Walter S. Afnllory. Ct>3 tiling, laid been done in the way of designing or constructing the briquetting machinery? A. I do not recall tlmt anything laid been done except to discuss tlie possibility of briquetting. xQ. 54. Approximately how many tons of ore were crushed by the giant rolls during April, 1804? A. Comparatively few number of tons. I would say probably not exceeding 100 tons. xQ. 55. When the giant crushing rolls were next used, which was stated by you to be in tlie lat¬ ter part of 1804, when one of tlie elevators fell down and put an end to the use at that time of the giant crushing rolls, how many tons of ore, approx¬ imately, were crushed at that time? A. Ary rec¬ ollection is that the elevator broke very shortly after starting up and that there had only been a •few skips of ore delivered to tlie giant rolls. xQ. 5(1. During the interval between April, 1804, when tlie giant crushing rolls were first used to crush ore, and the latter part of the same year when the elevator fell down, bad the work of con¬ structing tlie rest of the plant at Edison been pro¬ gressing? A. Tt had. xQ. 57. At that time had the rest of the crushing plant reached such a state of completion that it was ready for a complete, test thereof, I mean the latter part of 1S04 when the elevator 004 Deposition ot Walter S. Mallory. member whether we made any change in the lubricating, device daring that interval. The giant rolls in July, 1895, rested on' a cast iron founda¬ tion, (lie bearings consisting of cast iron bushings with babbitted surfaces and having iron pulleys with a wire rope friction. xQ. 00. In the latter part of 1804, did not the giant crushing rolls rest on iron foundations, and were they not at that time provided witli the cast iron hearings with babbitted surfaces and with the wire rope friction? A. Yes. xQ. 01. So that the only change in the giant crushing rolls between the latter part of 1804 and July, 1895, was in the lubricating device, and yon are not sure whether or not there had been any change made in the lubricating device, is this correct? A. That is so. My impresion is that being unable to get a test of the rolls in the latter part of 1804, that few, if any, changes were made between that time and July, 1805. xQ. 02. When the giant crushing rolls were used to crush ore soon after the fourth of July, 1S95, what was the condition then of the con¬ structive work on the rest of the plant at Edison, N. J.? A. I believe that the balance of the lilnnt Deposition or Walter S. Mallory. 005 , As I have already stated, during this series of periments, we would test the rolls at irregular ines, depending upon the trouble that we had ith the rolls themselves and other devices, such the electric crane. During the period named in air question, I think we crushed several tliou- ml tons, which, considering the capacity we had iped to obtain from the rolls, is approximately very small amount for such a period of time. xQ. 05. What was done with the ore which ns crushed by the giant rolls during said period, at is, July and August, 1805? A. After passing lough the rest of the machinery of the crusher uut, it was put in stock house No. 1. xQ. 00. Wlmt was the capacity of stock house n. 1? A. I think about 10,000 tons. xQ. 07. After the several thousand tons, which are crushed in July and August, 1805, had been livered to stock house No. 1, what was done ith it? A. ft was used to lest mill No. 1. xQ. OS. About what date was mill No. 1 first sled? A. I think sometime in August, 1S05. xQ. 00. At tile time the giant crushing rolls ire started up soon after the fourth of July, 05, had derricks and air hoists been installed the quarry to facilitate the loading of the mrried ore? A. Derricks were used at the qunr- is at that lime for loading the skips on to the rs and my recollection is that at that time we il tlie air hoists, which were used to assist the in in placing the empty skips for hand loading. xQ. 71. After the discontinuance of work August, 1805, when the strike was tlireatenc when was constructive work at the plant Edison resumed? A. After the threatened sti in August, 1S05, a few men were retained am think it was in October or November this fo was considerably increased and (lie work of elm ing the elevators to wire ropes from links \ started. xQ- 72. Deferring to the briquetting pin about when did the work of its construction ci mence, and when was it in condition for a te A. My recollection is that we built f.wo, mm briquetting machines in ISOii, the latter pa that these two machines were oncrated and sever Deposition of Walter S. Mallory. 007 July and August, 1805, by the giant crushing rolls 1009 and the rest of the crushing plant, was delivered to stock house No. 1, and after it had then been used in testing mill No. 1, what became of it? A. rt was put into stock house No. 2. xQ. 7