When Emile Berliner first established the United States Gramophone Company in 1893, the recording industry was already eight years old; it had been a tumultuous beginning for the business, marked by a race to register patents, industrial espionage, and personal rivalries. The next six years would bring more conflict, and in the end would lead to Berliner's decision to give up control of his patents in the United States to his associate, Eldridge Johnson, and establish an independent company in Canada.
Shortly after inventing the phonograph in 1877, Thomas Edison established the first business devoted to recorded sound, the Edison Speaking Phonograph Company. It had five stockholders including Gardiner G. Hubbard, Alexander Graham Bell's father-in-law. The company bought the tin-foil phonograph patent for $10,000 and a guarantee of 20% of future profits. After initial demonstrations of the new invention, like the one at Rideau Hall, however, the company went dormant and Edison turned his attention elsewhere.
In 1886, the Bells and Tainter formed the American Graphophone Co. to manufacture and sell the graphophone. This prompted Edison to take up his interest in the phonograph in an attempt to reassert control over sound recording technology, and to reorganize his original corporation into the Edison Phonograph Co. in 1887. It was at this time that Edison adopted modifications of some of the Bell-Tainter innovations and created the Improved Phonograph which utilized solid wax cylinders and a sapphire-point stylus. It was this type of phonograph upon which the oldest surviving recording 1, a message of Lord Stanley, Canada's Governor-General, to the people and president of the United States, was made.
Though there had already been considerable competition between the two rivals, the Edison Phonograph Company and the American Graphophone Company both agreed to allow a wealthy businessman, Jesse Lippincott, to form the North American Phonograph Co. in 1888; this company would oversee a sales network of local companies licensed to lease phonographs and graphophones as dictation machines. Lippincott agreed to invest $200,000 in the American Graphophone company and to purchase 5000 machines a year. He bought control of Edison's patents for $500,000, and Edison set up Edison Phonograph Works to manufacture and develop the phonograph. Lippincott's enterprise soon failed, however, and in 1890, the North American Phonograph Company went bankrupt. Edison, as its major creditor, took over operation of the business. When it became apparent that he could not assert control over the local licensees, he reorganized the company and founded the National Phonograph Co. in 1896.
Meanwhile, one of those regional companies, founded independently of the North American Phonograph Co. and thus immune from Edison's take-over, had become a leader in recording cylinders for coin-operated phonographs. This was the Columbia Phonograph Co., and when the North American Phonograph Co. failed, Columbia became the sole licensed seller of graphophones in North America.
While Edison was struggling with the bankrupt North American Phonograph Co. and Columbia was establishing itself as a major player, Berliner quietly stepped onto the field and complicated the quarrel. In 1893, he set up the United States Gramophone Co. to attract investors for the gramophone. He hired brothers Fred and Will Gaisberg, former employees of Columbia who had prior recording experience, and together they found a Philadelphia-based syndicate which agreed to contribute $25,000 to fund Berliner's enterprise. The Berliner Gram-o-phone Co. was established in Philadelphia to manufacture sound recording equipment and discs under licence from the United States Gramophone Co., which retained the gramophone patents. Berliner and the Gaisbergs then engaged the services of Frank Seaman to undertake advertising, distribution, and sales of the gramophone. To this end, Seaman formed a third company, the National Gramophone Co. Ultimately, the Berliner Gram-o-phone Company would be involved in a legal battle with Seaman and the Universal Talking Machine Co. (a company affiliated with the National Gramophone Co.), which would drive Emile Berliner out of the gramophone business in the United States.
By 1898, the gramophone business was booming and officials at Columbia were becoming worried. Unwilling, or perhaps unable, to compete in the marketplace without an extra advantage, Columbia set its sights on Berliner's patents. A complex legal battle ensued, involving not only the American Graphophone Co./Columbia Phonograph Co. party and the Berliner Gram-o-phone Co., but also Edison Phonograph Works, F.M. Prescott (an exporter), and Frank Seaman. When hostilities were brought to a close, a court injunction remained preventing Berliner from using the word "gramophone" on any of his products in the United States. This prompted him to establish E. Berliner, Montreal in 1899 which would hold exclusive rights to gramophones and discs in Canada (based on a Canadian patent of 1897), and to sell the rights to his American patents to his associate Eldridge Johnson, who had first been contracted by Berliner and Gaisberg to develop an effective motor for the gramophone. In 1901, Johnson set up the Victor Talking Machine Co., taking over the Berliner interests in the United States. For the time being, relations between Victor and the international Berliner affiliates, including E. Berliner of Canada, remained cordial.
According to Canadian law at the time, a patent was protected only if the manufacturer established production in Canada, and Berliner was happy to comply. He imported equipment from the American affiliate, set up shop in space rented from the Bell Telephone Co., and opened a retail outlet at 2315-2316 Sainte-Catherine Street in Montreal. The company began an intense promotion of the gramophone, highlighting the volume, endurance, and space-saving size of discs as opposed to cylinders. The advertisements also served to warn Berliner's competitors against infringement of the company's patents, and to caution consumers against purchasing imitation equipment and recordings. It was not long before E. Berliner, with Emmanuel Blout as general manager, was prospering.
It was decided to incorporate the business and, in 1904, the Berliner Gram-o-phone Company of Canada was given a charter with Emmanuel Blout, Joseph Sanders, Charles Gartshore, Robert Shaw and Herbert Samuel Berliner, Emile's son, as stockholders. Blout, Sanders and Herbert Berliner were named as directors of the new corporation. A recording studio was set up, and in 1906 a new factory was built at the corner of St. Antoine and Lenoir streets, one of the first reinforced concrete buildings in Montreal. In 1909, the company underwent a reorganization and was renamed the Berliner Gram-o-phone Company, with Emile Berliner assuming the presidency of the business, Herbert appointed vice-president and general manager, and Emile's younger son, Edgar, named secretary-treasurer. Blout returned to the United States.
Though both Columbia and Edison had entered the Canadian market by this time, and the industry would soon open up to independent companies as the original patents ran out, Berliner was clearly the front runner in the Canadian recording business. Apart from questions of convenience or quality, the Berliner company's status might be attributed to its almost ruthless conduct towards its dealers. For many years Berliner required its retailers to sell only Berliner products and to sell them at company-set prices. Though there was considerable resistance to this policy on the part of the record dealers, and in an editorial in the Canadian Music Trades Journal (November, 1914), for which the company filed a lawsuit and won, Berliner refused to relax its policy.
Concurrent with a surge of record sales during and just after World War I, Herbert Berliner decided to reduce the number of recordings Berliner imported from the States, in order to decrease its expenditure on royalties to Victor. In 1916, Herbert, through a subsidiary company, His Master's Voice, introduced the 216000 series, devoted to Canadian recordings. Later, an exclusively French-Canadian series was initiated in the HMV 263000 series. By 1920, the majority of the Berliner Gram-o-phone Company's records was recorded and pressed in Canada. Victor was vexed by this situation and asserted what must have been considerable pressure to displace Herbert Berliner from his position of control. How it was achieved will remain a mystery but, in 1921, Herbert Berliner resigned from the Berliner Gram-o-phone Company and departed for the Compo Company in Lachine, Quebec, which he had established independently in 1918 to manufacture records for other recording labels. His younger brother Edgar undertook the presidency and management of Berliner; the HMV series was phased out and replaced with Victor recordings. In 1924, Victor acquired controlling interest in the Berliner Gram-o-phone Company, changing its name to the Victor Talking Machine Company of Canada. Edgar remained president but the other directors were also active directors of the American company.
Even the formidable Victor Co. could not stand against the increasing predominance of radio in the sound recording business and, in 1929, RCA (Radio Corporation of America) merged with Victor, including the Victor Talking Machine of Canada, to create RCA Victor. Emile Berliner died the same year, at the age of 78, and the following year Edgar Berliner resigned from the presidency of Victor of Canada, severing the family's last tie to the company, and effectively ending the first era of recorded sound in Canada.
1 The whereabouts of the original cylinder, made on September 11, 1888, are unknown, but a re-recording was made in 1935.