This week we plan to tell the story of how Emile Berliner and Fred Gaisberg set up their record company in America. Seven blog entries on seven days. This is day #3. Its 1894. Berliner has developed the gramophone to a degree that it’s ready for market. Fred is on board to make demo recordings to show investors the potential of the new medium.
Berliner was not finding it easy to raise the money he needed to grow his gramophone business. Fred Gaisberg recalled that “a stream of punters and speculators, rich and poor, visited Berliner’s small laboratory. They were all amused and interested but sceptical. They would not part with their money and Berliner’s funds and courage were getting lower and lower…He often confided to me that something would have to be done or he would be forced to close down. I had been weeks without my modest salary, but as I was earning money with my piano playing in the evenings this was no great hardship for me.”
Fred decided to try to help and persuaded an establishment figure friend of his, one B.F. Karns, to help him try to raise money for Berliner. Karns proved less substantial than he appeared and in the first instance Fred ended up lending him money….
Karns did however get them in front of some movers and shakers including the Directors of newly established and prospering Bell Telephone Company “oozing opulence and exhaling fragrant Havana cigars” but despite being tickled by the gramophone they showed no interest in backing the fledgeling record business.
Karns also got them to meet “Mr (FAO) Schwarz, the greatest toy maker in America, who ….asked for a talking doll.”
Gaisberg and Karns spent much of the winter of 1894 and 1895 on the road trying to raise money. Karns talked money, Fred demo’d the gramophone. But by March all the money was gone. They found themselves stranded in New York by a blizzard “snowed up in a dollar a day hotel for one whole week and without funds and with all communications cut off. For food, we patronised the free-lunch counters when the bartender’s face was turned away. Altogether we spent a week of great discomfort.”
On the return to Washington they stopped off in the City of Brotherly Love and made one last pitch to a couple of Philadelphians. They were non-committal and Gaisberg and Karns proceeded back to Washington fed up and fundless.
As 1895 turned from spring to summer, the future of the Berliner gramophone looked bleak. Fred continued making what recordings he could and Berliner concentrated upon perfecting the technology. But as far as money was concerned, the cupboard was decidedly bare.
This last diversion to Philadelphia proved ulimately to have been worthwhile. By the end of the summer the Philadelphians had formed a syndicate of 5 (two steel jobbers, a clothing manufacturer and two building contractors) to pump $25,000 into a new company which was named The United States Gramophone Company.
Gaisberg and Berliner were out of the starting blocks.