Columbia Corporate History: Electrical Recording and the Late 1920s

Columbia Master Book, Volume I, Tim Brooks, ed.

A number of record companies had experimented with electric recording to replace the antique, and quite limited, acoustic recording horn. British Columbia had actually pressed an experimental electrical disc in 1920 (“Burial of the Unknown Warrior at Westminster Abbey”), and in 1921 U.S. Columbia had made a number of electrical trials with some of its popular artists. The results were disappointing. It was the engineers at Bell Labs-Western Electric who got it right, however, and in the fall of 1924 they offered their process to both Victor and Columbia. Victor was having a management crisis at the time and delayed its response, while Columbia was simply too broke to afford the considerable investment. In December Louis Sterling found out about Western Electric’s breakthrough and wanted it, but Western Electric would only make it available through an American affiliate. So Sterling immediately sailed to New York and opened negotiations to buy Columbia. In March 1925 he purchased a controlling interest in the company for $2.5 million.66 Columbia promptly signed with Western Electric, followed a few weeks later by Victor.

Electrical recording at Columbia began on a regular basis in April, although the most spectacular of the early electric issues was a field recording of the Associated Glee Clubs of America—4,850 voices strong—made at the Metropolitan Opera House on March 31, 1925 (50013-D). Surprisingly, neither Columbia nor Victor billed their new releases as electrically recorded until 1926, however. This was in order to give dealers time to sell off their huge stocks of older acoustic discs. However the change must have been apparent. Even on cursory listening the records sounded different, fuller and with much more bass, just like radio. It was the beginning of the rebirth of the battered industry.

Sterling installed H. C. Cox as President and himself as Chairman of the Board, and began liquidating the large stock of obsolete records and phonographs and upgrading the company’s manufacturing plant. In order to get a cut of the expanding low-priced record market he launched a series of budget labels, beginning with Harmony (September 1925) and followed by Velvet-Tone (1926) and Diva (1927) the latter a custom label for the W. T. Grant department stores. These were recorded separately from Columbia, but they often used Columbia artists recording under pseudonyms. In a master stroke of economy, Sterling put his now-obsolete acoustic recording equipment to work recording the budget label material. Those releases remained acoustic until mid-1929. Sometimes old acoustic Columbia masters were recycled on these cheap labels as well.

On November 1, 1926 Sterling expanded further by buying the leading blues and country label, Okeh, from the General Phonograph Company. Okeh was operated as an independent, separately recorded subsidiary for the rest of the 1920s. Also during late 1926 he countered Victor’s stunning new Orthophonic phonograph (an acoustic machine engineered for the best possible reproduction of the new electric discs) with Columbia’s own Viva-tonal phonograph. The first electrically amplified models were introduced about a year later.

It took time, but Sterling’s hard-nosed management eventually began to turn the company around. After a loss of $875,000 for the year ending February 28, 1926, Columbia/Okeh posted a $270,000 profit for the following year—its first profitable year since 1920. Nineteen twenty-seven was even better ($760,000), thanks in no small part to the phenomenal success of a comedy record issued without any particular notice during the summer. “The Two Black Crows” by Moran and Mack sold over a million copies.

Emboldened by success, Sterling undertook other ventures that proved less profitable. In July 1927 Columbia signed a deal with Federal-Brandes to market its Kolster radio set as the Columbia-Kolster. Several companies had been fabulously successful in the mid-1920s by being first on the market with reliable and affordable home radios. However in 1927 everyone was jumping on the bandwagon, and by 1930 Kolster was in receivership.

Also in 1927 Columbia lent its name to an incipient radio network that would in later years become a colossus. Columbia took over the chain from promoter Arthur Judson when it was still in the planning stages, and renamed it the Columbia Broadcasting System.67 The new network went on the air in September with 14 stations in the East and Midwest; Columbia provided ten hours per week of programming. Programs included “The Columbia Phonograph Hour” with the Columbia Symphony Orchestra, conductor Fritz Reiner, Charles Hackett and Sophie Braslau.68 Columbia no doubt hoped to reap publicity from the venture, as Victor had from its association with NBC, but the costs proved too great and Columbia sold out to United Independent Broadcasters in November. The name CBS stuck, however.

Nineteen twenty-eight brought the signing of the most famous (and highest priced) bandleader of the 1920s, Paul Whiteman. Although Columbia flooded the market with Whiteman recordings (as had Victor before it), his sales were on the decline, and he stayed with the label for only two years.

Columbia nearly merged with Paramount Pictures in 1929, but the deal fell through. There were also negotiations with Westinghouse Electric toward the possibility that Columbia might begin marketing television sets.69 Columbia had posted another substantial profit in 1928, and seemed to be in a strong position once again. To celebrate his fiftieth birthday, and his twentieth anniversary with the company, Louis Sterling distributed $500,000 to Columbia employees around the world, with individual employees receiving from $75 to $5,000 according to length of service.70

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The Columbia Master Book Discography, 4 Volumes, Complied by Brian Rust and Tim Brooks. Reprinted by permission.