Though the company was largely unsuccessful in its goals due to legal, technical and financial problems, it set the stage for the modern recording industry in the mid 1890s.

[1] Between 1880 and 1885, Alexander Graham Bell and his associates at the Volta Laboratory experimented with a variety of processes for improved sound recording.

On January 6, 1886, the associates formed the Volta Graphophone company and were awarded a patent on their wax cylinder process.

Based on the model of the Bell Telephone Company, North American would buy Phonographs and Graphophones and lease them to regional sub-companies, who would in turn rent the machines to local businesses for dictation.

Some companies found that it was more profitable to publicly exhibit entertainment recordings (music, stories, jokes) than to rent the machines.

North American, realizing that this was the future, signed an agreement with Automatic in April allowing the local companies to do business with them.

[5] As the automatic exhibition model gained ground, American Graphophone's dictation-optimized format (colloquially 'Bell-Tainter cylinders' today) fell suddenly behind.

[3] By the end of 1890, North American was deeply in debt to the Edison Phonograph Works, and was missing the income generated by Automatic's coin-slot business.

In December, North American instructed the local companies that they were expected to offer Phonographs and Graphophones for sale to the public.

The Automatic Phonograph Exhibition Company filed an injunction on the same date, arguing that unrestricted sale would damage their business, and citing their April agreement allowing them to operate in this way.

[5] In May 1891, North American was forced into assignment (an alternative to bankruptcy) for its inability to pay Edison Phonograph Works.

Through 1893, North American, under Edison, continued to sell Phonographs, and offered the option to buy the machines on the installment plan.

[6] Throughout 1895, Edison tried to buy North American's assets in order to recover his Phonograph patents and resume manufacture and sale.

Other creditors of North American blocked the purchase, worried that Edison would not have to pay their debts if the sale proceeded.

When the judge in charge of this case died in December 1896, the warring parties agreed to cross-license each-others patents, and let the phonograph business begin in earnest in 1897.

[6] Beginning in 1897, Edison and Columbia sustained a thriving competition in spring-powered home phonographs and wax cylinder records.

The Columbia Phonograph Company, General (the portion of the business incorporated as a part of North American) voluntarily dissolved in June 1913.