Victor Hugo Emerson, founder of Emerson Records, was a recording engineer who at one time worked with Thomas Edison. When Emerson founded the company in 1915, he had been working at Columbia Graphophone Co. for 20 years as its recording manager. He saw that the demand for less expensive but well-produced records was increasing during his time at Columbia. This inspired him to start his own company focusing on the cheaper end of the market. According to Allan Sutton's "History of Emerson Records," Emerson's business strategy was to "borrow heavily and contract out as much work as possible."
Emerson launched two types of records: the 6-inch vertical cut records and the 7-inch universal cut type. The vertical cut records only played on Pathe machines, and Emerson licensed the cylinder masters that contained the original recordings, from Pathe in Paris, which was keen to get its artists into the American market. Enrico Caruso and Harry Lauder were among the catalog of stars licensed to Emerson. However, Emerson withdrew these vertical cut discs in 1916, selling them off at 4 cents each.
Emerson frequently claimed that he invented the universal cut disc, but Allan Sutton says that the process was invented by George T. Smallwood in 1899 and that he assigned the patent to Emerson in 1915. In 1918, Emerson introduced larger 9- and 10-inch discs, but these were replaced with 12-inch discs in 1919. At the same time, Emerson established its inexpensive Melodisc label, which Emerson filed a trademark application for in 1920. In the period 1919 to 1920, Emerson expanded rapidly. It signed new artists, launched its own trade magazine "The Emersonian" and unveiled lavish new headquarters on New York's Fifth Avenue.
Emerson's rapid expansion, and the company's debts, which stemmed from Emerson's business philosophy of heavy borrowing all contributed to the company's demise. Competition from stable, well-financed companies such as Brunswick, also affected it. The company was forced into receivership in December 1920. In addition, one of the company's suppliers, made a claim in court for unpaid advertising and printing bills. In 1922, the Emerson Phonograph Co. passed to new owners, Benjamin Abrams and Rudolph Kanarak. In 1924, they renamed the company the Emerson Radio and Phonograph Corp., and sold off the recording side of the business.