HISTORY LESSON by Les Smith To "Gina" Carter For naught escapes the wares time has to vend\ And all that has a start must have an end. ****** Some time ago, I challenged list members to identify "the most influential man in the history of the American piano". No one was able to do so. I wasn't surprised. First of all, it was something of a trick question because its answer consisted of two names, not just one. Secondly, I knew full well that 99% of the techs out there had never even heard of these two men, and thus didn't have the slightest idea who they were, or what it was that made them so important. In fact, that's why I asked the question in the first place! (If a person's a moron, it's an accident of birth and genetics. OTOH, if he's an ignoramus, the fault's entirely his own; he can't blame anyone else.) And now I'll answer my own question: The two most influential and important men in the history of the American piano were William B. Tremaine and his son, Harry! 'What? I've never even heard of those two bozos! Is this some sort of Joke?" Hardly, William and Harry Tremain were two sides of the of the same coin, both cut from the same bolt of cloth, and they shared a common goal: More than a hundred years ago, their ambition was to as completely dominate the piano industry as Bill Gates and Microsoft dominate the computer software industry today. And the thing about the Tremaines is that they almost made it. Almost. Ultimately, they were tripped up by events over which they had no control and which they couldn't possibly have foreseen. Nevertheless, this doesn't dim in the slightest their positively brilliant insights into the marketing possibilities of a self-playing piano. That's why, whenever great men and their ideas are discussed, the names of William and Harry Tremaine deserve to be mentioned. To illustrate what I mean, I'm going to take you into the mind of William Tremaine for a moment. FIRST PRINCIPLE: To whom does one sell a piano? "Well. duh, that's an easy one. Pianos are sold to pianists and pianist-wannabes." Okay, but now consider this: To whom does one sell a _self-playing_ piano? The answer is EVERYONE! In other words, William Tremaine expanded his market to include every single household in the country! Being able to play the piano was no longer a prerequsite for owning one!That's just the beginnng; there's more. SECOND PRINCIPLE: The advent of the self-playing piano rendered EVERY SINGLE HAND-PLAYED INSTRUMENT _EVER_ PRODUCED as obsolete and made it a candidate for replacement! Such was William's objective. Indeed, one of Tremaine's most famous pieces of sales literature depicted a new self-playing piano being delivered to a customer's home while at the same time, his old, now-obsolete, hand-played instrument was being taken away. There was, of course, much more to theTremaine's Grand Strategy than just this, (for example. one of their original takeover targets was the firm of Steinway, itself!), but these two principles by themselves give you an idea of the scope of the their ambitions: Total domination of the piano industry. "Okay, Les, you've got my attention, but who _were_ these guys?" William Tremaine was a rare and gifted visionary . In the 19th Century -- long before the days of the radio, the phonograph, or even electricity! -- William looked into his crystal ball and accurately foresaw the future of the piano. He was not content, however, merely to watch it happen, he was determined to make it happen, and so he did. William began by quietly buying up patent rights -- and sometimes, entire companies -- relating to self-playing pianos (and organs). Finally, in 1887, the ground-work had been laid and he was ready to found his company. Uncharacteristically, however, he did NOT name it after himself , or even a piano, but after a self-playing organ. William Tremaine called his company AEOLIAN. He was its founder and first president. His son, Harry, was his hand-picked successor. Between them, they set into motion forces that would change the world. The lives and times of the Tremaines; the reasons behind the founding of Aeolian; and a detailed accounting of that firm's first half century of operations make a fascinating story. It reads like an adventure novel -- albeit a tragic one -- and illustrates that then, as now, it's the lust for wealth, power and glory that spurs men on to greatness. (This story also puts into perspective Aeolian's final years.) Even when great men miss the mark, their failures can sometimes be spectacular. So it was with the Tremaines. Athough they just barely missed grapsing the brass ring, that failure touched off an industry-wide meltdown of epic proportions. This is the story of what happened. ****** Although William Tremaine was the first to recognize the marketing possibilities of a self-playing piano, he was not alone for very long. Money makes the world go around, and as soon as the other piano manufacturers grasped the huge profits to be made, they were quick to jump on the Tremaine juggernaut. This had one immediate and far-reaching consequence. The coming of age of the self-playing piano coincides precisely with the disappearance of high- quality, hand played instruments. This is not happenstance. The two are mutually exclusive. First of all, the piano was now only one half of a whole, the other half being its self-playing mechanism. Secondly, these instruments were now being aggressively marketed to musically-ignorant, non-pianists. Consequently, many of these instruments would _never_ be hand played. (One of the long standing jokes to come out of the era was that a person no longer needed a good ear to play the piano, just a good foot!) Manufacturers were quick to take advantage of this fact by cutting piano construction costs where ever possible. After all, every dollar saved was another dollar in their pockets, and no one would ever know, right? Thus, when the whole era came to an abrupt end, manufacturers not only lacked the financial wherewithall to return to making high-quality, hand-played pianos, they had forgotten how! Because of this, the majority of the highest quality, American-built, hand-played pianos date from within a very narrow time frame. It runs from the Great Philadelphia Exhibition of 1876 to 1906 -- a period of only thirty years! This latter date is not arbitrarily chosen. 1906 marks the founding of the American Piano Company -- certainly the beginning of the End. If one views William Tremaine's formation of Aeolian as the opening move in a chess game for domination of the American Piano Industry, then the creation of the American Piano Company may be seen as a countering, defensive move in that same game. The founding of Aeolian and the APC would ultimately prove to be to the American piano what hitting the iceberg was to the ocean liner Titanic. A thorough development of this theme would take an entire book by itself. I'll leave that task for someone else. The fact remains, however, that with the exception of Steinways, Richard Gertz's Mason and Hamlins, and some early Baldwins, the vast majority of hand-played pianos built during the 20th Century were litle more than embarrassments to the names on their fallboards. That's part of the Tremaine legacy. ****** Self-playing pianos were expensive. Even an average quality, run-of-the-mill "note-knocker" cost twice as much as its hand-played-only counterpart. Higher quality, more sophisticated and complex instruments cost even more, sometimes a lot more. For example: only the wealthy could afford a nine-foot Steinway concert grand outfitted with Aeolian's top-of-the-line Dou-Art reproducing mechanism and connected to their Concertola twelve station automatic roll changer! No wonder Aeolian's advertising literature for this product depicted a man in his tuxedo and a woman in her evening gown, seated in the mahogany-paneled drawing room of their mansion, listening to this magnificient instrument! Even today, the faultlessly performing, highly complicated preumatic technology involved invites both wonder and increddulity. Imagine how it must have seemed 3/4's of a century ago! ****** (Footnote: Because of the great expense of doing so, only the largest manufacturers -- like Aeolian -- were able to tool up for and produce their own self- playing mechanisms. Most piano manufacturers out-sourced their self-playing mechanisms, buying them from firms like the Standard Aciton Company which built nothing else. In this way, even the smallest manu-facturers were able to participate in the revolution,,and the debacle that ended it.) ****** Aeolian -- as well as all the many copycat manufacturers who had jumped onto the self-playing piano band-wagon -- needed a gimmick to help them sell these high-priced instruments, and they found one: they would sell them on credit! Thus, for only a small downpayment and the promise to make regular installment payments on the remaining balance due, a person could take immediate delivery of his purchase. (Less-expensive, hand-played-only pianos were also sold this way.) The idea went over like free booze at a piano tuner's convention! Consequently, as the 1920's roared, the piano indistry roared right along with them. Everything was proceed-ing exactly as William Tremaine had foreseen. The brass ring was almost within reach. What could possibly go wrong? (When things are going exceptionally well, _never_ ask yourself this question!) It would be a mistake to assume that pianos were the only consumer goods being sold on credit during the 1920's. They weren't. The idea of "buying now and paying later" permeated every aspect of the economy. One could buy virtually anything on credit -- even stocks. ****** The stockmarket, like an individual stock, is governed by the law of supply and demand. If there are more buyers than sellers, it moves up; in there are more sellers than buyers, it moves down; and if everyone is selling and no one is buying, it drops like a piano falling out of a 10th story window! The stockmarket of the 1920's was a highly speculative one -- it defied rational analysis. A steady influx of new investors sent the market soaring. It was not uncommon to see prices of individual stocks double, triple or even quadruple in a span of less than a year. This kind of performance, of course, attracted even more investors, pushing the market ever higher. Stock prices bore no correlation to the financial realities of the underlying companies. Even if the company was a scam, had no financial assets, never turned a profit and its entire board of directors was on the FBI's "Most Wanted List", as long as there were more buyers than sellers, its stock would continue to rise. Such as market was a very dangerous place for unwary investors, and during the 1920's, they abounded. Nevertheless, for a long time it seemed as though the bubble might never burst. Seemed. Then, like a perverse game of "Musical Cairs", the music suddenly stopped and when investors looked around, they discovered someone had hidden all the chairs, there were no seats to be had, and that they were all losers. ****** When a person invested in stocks during the 1920's, he only had to put up 15% of their purchase price and the brokerage house would "loan" him the other 85%. ( this is known as "buying on margin", a very dangerous practice for the uninformed.) Thus, on a $2000 purchase, the investor only had to put up $300 and the brokerage house would front him the remaining $1700. Assume now that the stock doubled in price. The position was now worth $4000. When the investor sold, he would pay the brokerage house back the $1700 it had loaned him, and be left with $2300. He had his $300 back and $2000 of pure profit! The dream of making big bucks on a small investment lured droves of financially-unsophisticated people of modest means to invest in the stockmarket. When they signed their account agreements, they had no idea they were committing financial suicide. They would soon learn the truth , but like all of Shake-speare's tragic heroes, that understanding would come too late to save them. Way too late. It always pays to read the fine print. Unfortunately, the hordes of neophyte investors who flooded the stockmarket during the '20's in search of '"easy money" neglected to do so. That was a fatal mistake. When the clueless investor bought some stock and put up his 15%, he naively assumed that the brokerage firm was loaning him 85% of the stock's PURCHASE PRICE. It wasn't. It was loaning him 85% of the stock's CURRENT VALUE. There's a huge difference. 85% of current value meant that as the price of the stock in the investor's account fluctuated, the amount of the loan it would collateralize fluctuated, too. In other words, the size of the loan was not fixed. It varied. As long as the market was rising, everything was fine. As soon as the market started to decline, however, the entire country was given a "crash" course in " Stock Brokerage Realities 101". Let's return to our original example. The investor had purchased $2000 of stock, put up his $300 (15%) and borrowed the other $1700 (85% of the stock's CURRENT VALUE) from his brokerage firm. Now assume that the stock moved down in price by 50%. The account was now worth $1000. This dollar amount of stock would only collateralize a loan of $850. (85% of its current value). Therefore, the investor would receive a demand from the brokerage company to immediately pay back half of the $1700 it had originally loaned him (based on the stock's then current value of $2000.) This is called a "Margin Call". If the investor couldn't meet this demand for more money, he was in for another nasty surprise. The brokerage company would sell sufficient stock in his account to cover the amount owed. This is called a "Sellout" In this particular case, the firm would sell all the stock in the account because the investor owed it a total of $1700. When the smoke cleared, this is the situation in which the investor found himselff: He had lost his $300 investnment; his stock had been sold out from under him; and he still owed the brokerage firm $700! If his stock a dropped in price to zero, his situation would be even worse. He'd be out his $300 inveastment; his stock was worthless; and he still owed the brokerage firm the $1700 it had originally loaned him! At this point, Aunt Zerelda's habit of saving her money by putting it into an old sock tucked away in the back of a dresser drawer didn't seem quite so foolish! ****** The stockmarket crash off '29 started out as a modest decline -- just enough to trigger the first round of margin calls. When these calls weren't met -- and most of them weren't -- the stocks in the investor's accounts were sold out. This selling, coming into an already declining market, pushed it even lower. This triggered another round of margin calls and sellouts; they triggered another and they triggered another, etc. In short, the declining market fed on itself and what started out as a modest decline turned into a rout. When the smoke cleared, stocks had lost more than 80% of their value, an amount measured in the tens of billions of 1929 dollars. ****** We remember best those lessons that cost us money and the more expensive they are, the better we remember them. After the crash of '29, people stayed away from the market for decades, convinced that stockbrokers were little more than crooks, thieves and con men. However true that might be, it's not the complete story. The investors, themselves, were partly to blame, too. In their rush to make a quick killing in the market, they had let greed get in the way of good judgement. There's an old Wall Sreet adage worth remembering: "Bulls and Bears can make money in the market; Pigs can't." It's unfortunate that a bull is the mascot of the country's largest brokerage firm. While many people believe that it symbolizes the firm's investment philosophy, others hold that it merely represents "truth in advertising"! :) ****** It's commonly assumed that the maket crash of 1929 was the cause of the Great Depression. It wasn't. It was only a contributing factor. For example, not all people were dumb enough to allow themselves to get sucked into investing in the stockmarket. These were prudent people who worked hard for their money, knew the value of a dollar, and put it where it would be safe: into a bank. So imagine their surprise when one day after the stockmarket crash, they went to their bank to withdraw some money from their account and discovered that its doors were padlocked shut because it had gone bust! Although the idea of depositer's insurance would arise from the ashes of the banking system's colllapse, it would come far too late to be of any help to the crowd of angry people milling around on the sidewalk outside their bank, shaking their fists -- or at least one finger! -- at the institution that had betrayed their trust. Their money was gone just as surely as if they had taken a market flyer on Consolidated Buggy Whips! ****** The strockmarket crash followed by the collapse of the nation's banking system (some 5000 banks failed) dealt the economy a devastating one-two punch, American's credit driven economy of the 1920's was essentially a huge pyramid scheme. Its sustainabilty was predicated upon the necessity that consumers keep making regular payments on their installment loans. Suddenly, they were unable to do so. Moreover, they didn't have any money to purchase new goods either. This brought the whole house of cards tumbling down. The economy came to a standstill. Massive layoffs ensued and many factories closed their doors forever. The unthinkable had happened, All throughout the decade, the people had been payiing for the present by mortgaging their tomorrows and had thought the note would never come due. They were wrong. When the dust from the economic collapse had settled, they discovered Snidely Whiplash standing amidst the ruins of their lives, mortgage note in hand, demanding his money, and the people had no way of paying him. No way at all.. At that moment, the world changed forever. The past was irretrievably lost and the future was an impenetrable enigma. What would become of the people now? What would they do? No one had the answers the people sought, but some lied and said that they did. Chief among those liars was a man named Franklin Delano Roosevelt... (Ralph Martin would have loved this part!) ****** During the 1920's, one could buy a self-playing piano for as lttle as 10% down and finance the remaining 90%. For a while, this certainly moved the goods. Unfortunately, no one ever gave any thought to what would happen if all the purchasers defaulted on their loans at the same time and they (the loans) suddenly became uncollectable. That's exactly what happened. The effect was the same as if the manufacturers had been holding a decade-long going-out-of-business- sale, liquidating their instruments for 10 cents on the dollar: i.e. selling a $600 oiano for $60. a $1500 piano for $150; etc. The financial losses were staggering and their effect, catastrophic. Like a herd of stampeeding cattle blindly following its leader over the edge of a cliff to certain death, the entire piano industry followed Aeolian over the brink of a bottomless abyss. Although no one was aware of it at the time, the entire piano industry had suffered a mortal blow. It would take another fifty years to finish driving all the nails into the lid of its coffin, but by the time that happened, they were merely burying a decades-old corpse and there were no mourners at its funeral. The industry's epitaph? Rust In Peace. That is William and Harry Tremaine's ultimate legacy and the reason why they are so important to the history of the American piano. (Footnote: A few players have been made in modern times, but they were merely echoes of a long-distant past. The Tremaines did it first, and no one ever did it any better. Not ever.) ****** "After the economic collapse, why didn't manufacturers just return to making regular, hand- played instruments?" They couldn't. The financial devastation was just too great. Leaf through the pages of your piano atlas and you can read the death notices of all the firms that didn't make it. Some companies did survive, of course, chief among them, Aeolian, itself, but it was only a ghost of its former self. Its glory days were gone forever. Aeolian (and the other survivors) would spend the next five decades building increasingly inferior pianos. The reason for this is not difficult to understand: there were few buyers, not even for poor quality, cheaply made instruments. The Great Depression lasted all throughout the 1930's and into the early '40's. All this time, the people were waiting for Roosevelt to make good on his promises to revive the economy and to bring about full employment, but he never did, He had lied. The New Deal turned out to be The Raw Deal. Consequently, although the people had plenty of time on their hands, they had no money in their pockets to buy pianos. The Nation's entry in World War ll did for the economy what Roosevelt, hinself, could not: it got it going again.. The men all went off to fight the war and the women entered the work force, taking over those jobs in industry that had traditionally had held by men. With everyone involved in the war effort, however, no one had time for pianos. When the men came home after winning the war, they discovered America had changed. The Depression was finally over; the economy was humming along and jobs were plentiful. Most importantly for our purposes, however, there was soon to be a vast array of dazzling new consumer goods competing for their dollars. Pianos weren't even on the list. Radio had come into its own during the '30's and 40's, but would soon be upstaged by a new kid on the block. Late in the decade, RCA introduced an invention that would transform the world: television. Sales boomed all throughout the '50's and then, just when it seemed the saturation point was being reached, color television was introduced in 1960. This rekindled the buying frenzy as everyone scrambled to replace their now-obsolete Black & White sets with color ones. The war now over, new cars were once again in production. At the same time, the Federal Government built an elaborate system of modern highways crisscrossing and unifying the entire nation. Because of these two factors, we were now a highly mobile and interconnected society. In the 1950's, the big band sound of the '30's and '40's was replaced with something new: Rock n Roll. Soon the music of performers like Chuck Berry, Buddy Holly, Flvis Presley, Fats Domino, Johnny Cash, Jerry Lee Lewis and Carl Perkins was blaring from the speakers of radios, juke boxes and 45 rpm record players all across the country. Hi-Fi was introduced in the '50's, stereo, several years later. And then, in the 1960's, America suffered two notable foreign invasions: the first was by a British music group called "The Beatles"; the second was by a Japanese piano with a strange sounding name: Yamaha. (Properly pronounced, the enphasis is on he second syllable: ya-MA-ha.) Japan had lost one war, but it would win this one. During the post war era, although the people had both the time and the money for pianos, they had little desire for them. Once such an important part of America's economy and culture, as the 20th Century progressed, the piano became increasing irrelevant to both. What had happened? Simply put: the World had changed. Again. ****** 'What about Steinway? It Still exists." The "Instrument of the Immortals" is just as dead as they all are, and has been for some time. If you're reading this essay, I assume you can "connect the dots" for yourself, but I'll give you an example of what I mean. Early Steinways were so good that even Franz Liszt, himself, -- he died in 1886 --had an American-built Steinway upright in his teaching studio at Weimar. He got this piano (as well as a second one!) courtesy of Richard Gertz's father who was a supplier of fine-quality pianos to the European concert tarde (Brahms, Wagner, etc). That was a long time ago. Things have changed. Take a modern Steinway upright, remove its top board and look inside. Do you notice anything missing? You know, like its entire action!!!!! What's happened to those vaunted, tubular metal action rails; those snazzy, "signature" flanges; and all those other proprietary action parts that once made a Steinway a Steinway and could be found on no other piano in the world? That's just the beginning. Try playing even a moderately difficult Lisztian composition -- like the Concert Etude in Db (Un Suspiro), or the first movement of the Sixth Hungarian Rhapsody -- on this instrument and you'll quickly discover why if Franz Liszt were alive today, it's an _absolute certainty_ that he would NOT have a modern Steinway upright in his Studio! If you're unable to understand any of this, reread the second paragraph of this essay. ****** And what of Today's piano technician? He, himself, is little more than a gray-bearded anachronism, a cob-webbed relic from the distant past. For all his relevancy to the modern world, he might just as well be working on Model-T automobiles; crystal radios; clockwork mechanism, Victrola record players; vacuum-tube, black & white television sets; or hula-hoops. It turns out that Barney isn't the last surviving dinosaur. He has plenty of company. CONCLUSION There is a lesson to be learned in all this and it's an important one: The one constant in life is change. The world is in a perpetual state of flux and no matter how permanent something may appear to be, the sad truth is that nothing lasts. Nothing. Expressing this a little more poetically: For everything there is a time, but once that time has passed -- however much you might wish otherwise -- it's gone forever. To put this all into perspective for you, I'll conclude by posing a heart-breaking question Newton Hunt asked me not long before he died: 'Whatever happened to Yesterday, Les? Where did it go?" Lately, I've been wondering the same thing. Les Smith copyright 2003 Les Smith This email was cleaned by emailStripper, available for free from http://www.papercut.biz/emailStripper.htm
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