Edison’s associates eventually began to sense that the tide might be turning and tried to convince the great inventor that, from the standpoint of his own industrial future, he was making a monumental mistake. But stubbornness was one of his weaknesses, and he refused to see it. It would be twenty years before he would admit that this had been his greatest blunder. After all, one of his favorite sayings was: “I don’t care so much for a fortune… as I do for getting ahead of the other fellow.”
But long before Edison was prepared to admit scientific error, it was borne in on him that his priorities must be revised. His financial difficulties had grown extreme, and a merger seemed almost inevitable.
The Thomson-Houston Company provided an object lesson when it was taken over by the House of Morgan and placed under the direction of a professional manager named Charles A. Coffin. An apt student of J. Pierpont Morgan, Coffin waged price wars against his competitors and then, once they were weak, wheedled them into lethal mergers. Along the way, Thomson and Houston lost control of their firm.
As Westinghouse later described an interview with Coffin to Clarence W. Barron: “He [Coffin] told me how he ran his stock down and deprived both Thomson and Houston of the benefits of an increased stock issue. He was enabled, by the decline in stock which he had forced, to make a new contract with both Thomson and Houston, by which they waived their rights to take new stock in proportion to their holdings under their agreement with the Company.
“I said to Coffin, ‘You tell me how you treated Thomson and Houston; why should I trust you…?’”10
Edison, however, was not granted the luxury of deciding whether he trusted Coffin. On February 17, 1892, The Electrical Engineerannounced a consolidation of the Edison Electric Company and the Thomson-Houston Company, with none of the founders’ names in the new title. Henceforth the new firm would be called General Electric Company, with Coffin as its president.
In the same article The Electrical Engineer has written:
It seems quite reasonable to expect, as many do, and as rumor has it, that absorption of the Westinghouse Company into the proposed new corporation will soon follow. The provision of $16,600,000 of stock—$6,000,000 of which is in preferred shares—remaining to the treasury after taking up the Edison and Thomson-Houston stocks, is thought by many to imply the use of a considerable portion of it in taking over the Westinghouse Company when convenient; but no definite information of such a plan has been made public.
In short, Morgan was close to realizing his ambition of controlling the future electrification of America, both AC and DC, through the elimination of “costly competition.” He meant to use the same tactics that had worked so well in centralizing the control of the railroads, of oil, coal, and steel. Clearly, the best growth investments of the future would be in controlling the manufacture of all electrical appliances and machinery and providing the related services that eventually would become known as “public utilities.” But to do this he would need the Tesla patents.
Coffin, in his reckless interview with Westinghouse, had revealed that he had been “cutting prices fearfully” in order to “knock out” other electrical firms. The important thing, he advised, man-to-man, was to get one’s own system installed before the competition did so, whether it be for running electric trolleys or whatever; after that, any changes would be prohibitively expensive. “The users willingly pay our price as they cannot afford to change the system,” he exulted.11 He had been talking to precisely the wrong person, however, for Westinghouse was committed to proving that a superior system could indeed knock out an entrenched but inferior one.
Coffin had spoken earnestly of the advantages of “boodle.” He had asked Westinghouse to raise the price of his street lights from $6 to $8, as his own firm had done, since this would enable him to pay $2 in boodle to the aldermen and other politicians without losing a cent of profit.12 But when it became clear that Westinghouse was not to be a willing partner to his own demise, General Electric Company and the House of Morgan turned upon him where he was most vulnerable, in the money markets.
“From all the stock-market sub-cellars and rat-holes of State, Broad, and Wall streets crept those wriggling, slimy snakes of bastard rumors,” wrote Thomas Lawson in Frenzied Finance. “‘George Westinghouse has mismanaged his companies … George Westinghouse … is involved beyond extrication unless by consolidation with the General Electric….’ There came a crash in the Westinghouse stocks.”
Lawson reports that he himself was called in as “an expert in stock market affairs” to assist Westinghouse, and that he drove a heroic bargain. First, there must be a consolidation of some sort. Westinghouse was indeed overextended in his drive to put the country on an alternating-current system.
The financial advisers arranged a merger with several smaller companies including U.S. Electric Company and the Consolidated Electric Light Company. The new firm would be known as the Westinghouse Electric and Manufacturing Company.
So far, so good, but there was one problem: Nikola Tesla’s patent royalties under the generous arrangement with Westinghouse would sink any ship, according to the investment bankers. One source has stated he was told by Tesla that Westinghouse had paid him $1 million in advance royalties.13 Only four years after the contract was signed, it was rumored that the accrued royalties could be in the neighborhood of $12 million. No one seemed to know exactly, least of all Tesla. As utilities expanded, royalties would be collected on powerhouse equipment and motors and on every application of the alternating-current system patents. Tesla stood to become a billionaire, one of the world’s wealthiest men.
“Get rid of that royalty contract, Westinghouse,” the investment banker advised. Otherwise the stability of the reorganization would be emperiled.
This Westinghouse was loath to do. He himself was an inventor and believed in royalties. Besides, he argued, royalties were paid for by the customers and included in costs of production. But the bankers left him with no choice.
Reluctantly he called on the inventor in what must have been one of the most embarrassing confrontations of his life. (In the official biography of George Westinghouse the episode goes unmentioned.) The contract between Tesla and Westinghouse had been made in good faith on the part of both men. Tesla, had he chosen, undoubtedly could have gone to court and had it upheld. But to what end if Westinghouse were to lose his firm?
As usual, George Westinghouse went directly to the point. Explaining the problem, he said, “Your decision determines the fate of the Westinghouse Company.”14
Tesla’s absorption in his new fields of research had been total. Money was something he spent freely when he had it, but he seldom knew how much was available. To him the value of money consisted in what one did with it rather than in any intrinsic worth.
“Suppose,” he asked, “I should refuse to give up my contract; what would you do then?”
Westinghouse spread his hands. “In that event you would have to deal with the bankers, for I would no longer have any power in the situation.”
“And if I give up the contract, you will save your company and retain control? You will proceed with your plans to give my polyphase system to the world?”
“I believe your polyphase system is the greatest discovery in the field of electricity,” said Westinghouse. “It was my efforts to make it available to the world that brought on the present difficulty. But I intend to continue, no matter what happens, with my original plans to put the country on an alternating-current basis.”
Being no businessman, Tesla could not refute Westinghouse’s assessment of his financial situation; but he trusted the industrialist. “Mr. Westinghouse,” he said, “you have been my friend, you believed in me when others had no faith; you were brave enough to go ahead… when others lacked courage; you supported me when even your own engineers lacked vision to see the big things ahead that you and I saw; you have stood by me as a friend…. You will save your company so that you can develop my inventions. Here is your c
ontract and here is my contract—I will tear both of them to pieces, and you will no longer have any troubles from my royalties. Is that sufficient?”15
The Westinghouse Company’s annual report of 1897 states that Tesla was paid $216,600 for outright purchase of his patents at this point to avoid the payment of royalties.
By destroying the contract, Tesla not only relinquished his claim to millions of dollars in already earned royalties but to all that would have accrued in the future. In the industrial milieu of that or any other time it was an act of unprecedented generosity if not foolhardiness. He was to live well for another decade but thereafter would be plagued by a chronic shortage of research and developmental capital. How many discoveries were thus to be lost to society can only be surmised.
Westinghouse returned to Pittsburgh, where the mergers and refinancing were arranged. His company went on to become a giant, and he kept his promise to Tesla. Years later in a formal testimonial to the industrialist, Tesla wrote: “George Westinghouse was, in my opinion, the only man on this globe who could take my alternating-current system under the circumstances then existing and win the battle against prejudice and money power. He was a pioneer of imposing stature, one of the world’s true noblemen of whom America may well be proud and to whom humanity owes an immense debt of gratitude.”16
Tesla had returned from his months in Pittsburgh depressed not only by his disagreements with the Westinghouse engineers but because of several lawsuits just beginning over his alternating-current inventions.
“Hundreds of electrical manufacturers pirated the Tesla patents,” John J. O’Neill noted in a private communication, “and when Westinghouse had them completely upheld in the courts and smashed down on the trespassers, all of the hate of the losers was vented on Tesla.”
Some attacks went beyond simple piracy. Claims were advanced in behalf of Professor Galileo Ferraris of the University of Turin as the first to have described a method of producing a revolving magnetic field. He apparently had given some thought to the problem in 1885 but had made no progress. Tesla, by comparison, had made his discovery of the rotating magnetic field in 1882 and within two months had evolved the complete system, which included all the apparatus he later patented. He had actually built his first induction motor. Ferraris, however, had concluded that the principle could never be used for making a practical motor.
He nevertheless had been publicized by The Electrician in London as the man most likely to invent one. When the editors learned of Tesla’s invention, they erroneously assumed and reported that he had been inspired by the concept of Ferraris.
Because of the vicious rivalry between Edison and Westinghouse, the former faction seized on any opportunity to smear Tesla. The specious argument over Ferraris seemed as good an excuse as any.
Two prominent immigrants (although they would later be allied with the Edison camp) rose at once to Tesla’s defense. Steinmetz, in a paper for the American Institute of Electrical Engineers, said: “Ferraris built only a little toy, and his magnetic circuits, so far as I know, were completed in air, not in iron, though that hardly makes any difference.”
As for Professor Michael Pupin, he wrote to Tesla: “The Ferraris humbug has been indulged in by your competitors to a disgraceful extent. As I understand it there is a gigantic step from Ferraris’ whirling pool to Tesla’s whirling magnetic field. The two things seem to me radically different and ought to be pointed out and shown in their true lights….”17
Tesla, deep in his research, was scarcely aware of the corrosive antagonisms raging around his inventions. He was immersed in a whole new world of electrical phenomena.
Westinghouse, meanwhile, when he was not testifying or speechifying, was aggressively extending the front lines of his industrial domain. Out in the little mining town of Telluride, Colorado, the first commercial use was made of Tesla motors and generators built by Westinghouse. They were installed in 1891 to furnish electricity for the mining camps.18
6. ORDER OF THE FLAMING SWORD
As long as the world left him alone in his Manhattan laboratory to pursue his love affair with electricity, Tesla was the happiest man alive. In the waning years of the 1880s and the early 1890s he had enjoyed such a brief period. But when he delivered four blockbusting lectures in America and Europe in 1891–92, he became, in a matter of months, the world’s most celebrated scientist, and his private life was never the same again.
A weird, storklike figure on the lecture platform in his white tie and tails, he was nearly seven feet tall, for he wore thick cork soles during his dangerous demonstrations. As he warmed to his act, his high-pitched, almost falsetto voice would rise in excitement. The audience, riveted by the cadenced flow of words, the play of lights and magic, would stare as in a trance.
The language of science then being completely inadequate, Tesla described visual effects in the style of a poet in love with the sheer dance of flame and light. Indeed it seemed as if these were as significant to him as tapping the energy within. Yet no scientist could fault him on technical details.
Despite the fireworks, philosophy, and poetry, his every scientific claim was based on experiments he had personally repeated at least twenty times. Each item of equipment was new, designed by him and usually fabricated in his own shop. The same demonstration was seldom repeated from one appearance to another.
As to the inadequacy of the scientific terminology of his day—the luminous feathery discharge of electricity in a vacuum tube that he referred to in his lectures as a brush was in fact a beam of electrons and ionized gas molecules. He did not say, “Now I shall describe the cyclotron,” for the word was nonexistent; but what he would describe and what he would demonstrate was thought by some who were knowledgeable to have been an early ancestor of the atom smasher.
Nor did he say, “Now I shall describe the point electron microscope. Now I shall describe cosmic rays. Now I shall describe the radio vacuum tube. Now I shall describe X ray.” When he described a vacuum bulb which turned out to be the forerunner of the Audion, radio was called wireless, and wireless was scarcely in its infancy. When he described blurred photographic plates in his laboratory, and visible and invisible light, not even Roentgen knew what X rays were or might be used for. And when Tesla created a flame that he described as “burning without consuming material or even a chemical reaction,” he probably was venturing into plasma physics.
“Phenomena upon which we used to look as wonders baffling explanation, we now see in a different light,” he told the American Institute of Electrical Engineers. “The spark of an induction coil, the glow of an incandescent lamp, the manifestations of the mechanical forces of currents and magnets are no longer beyond our grasp; instead of the incomprehensible, as before, their observation suggests now in our minds a simple mechanism, and although as to its precise nature all is still conjecture, yet we know that the truth cannot be much longer hidden, and instinctively we feel that the understanding is dawning upon us. We still admire these beautiful phenomena, these strange forces, but we are helpless no longer….”1
He spoke of the mysterious fascination of electricity and magnetism, “with their seemingly dual character, unique among the forces in nature, with their phenomena of attractions, repulsions, and rotations, [their] strange manifestations of mysterious agents,” that stimulate and excite the mind.
But how to explain them?
“An infinitesimal world, with the molecules and their atoms spinning and moving in orbits, in much the same manner as celestial bodies, carrying with them and probably spinning with them ether, or in other words, carrying with them static charges,” he said, “seems to my mind the most probable view, and one which, in a plausible manner, accounts for most of the phenomena observed. The spinning of the molecules and their ether sets up the ether tensions or electrostatic strains; the equalization of ether tensions sets up other motions or electric currents, and the orbital movements produce the effects of electro and permanent magnetism.”
It had been only three years since, speaking before this same professional group, he had introduced the power system that was to revolutionize industry and bring light to even the most remote homes. Now he described his research into the very nature of electricity by way of light and luminous effects, holding his audience in thrall.
The stage from which he spoke was illuminated with stunning displays of gas-filled tube lights, some of which had been made phosphorescent to enhance their brilliance and for some of which he used uranium glass. They were the forerunners of today’s fluorescent lights. Tesla never patented or commercialized them, and they did not appear on the market until fifty years later. For his lecture, characteristically, he had twisted the tubes into names—not only those of great scientists but of his favorite Serbian poets.
Turning to a table, the spellbinder carefully selected a delicate prop. “Here is a simple glass tube from which the air has been partially exhausted,” he said. “I take hold of it; I bring my body in contact with a wire conveying alternating currents of high potential, and the tube in my hand is brilliantly lighted. In whatever position I may put it, wherever I move it in space, as far as I can reach, its soft, pleasing light persists with undiminished brightness.”2
As the tube he held began to glow—demonstrating among other things a political message about the safety of alternating current— “Professor” Brown, the Edison agent, arose unnoticed and hurried from the hall. His boss would chew nails when he heard about this razzle-dazzle. But George Westinghouse, who had come from Pittsburgh just to hear the lecture, leaned forward, shook his head, and smiled.
Tesla next revealed his wireless or electrodeless discharge lamps inductively coupled to a high-frequency power supply, which he had invented after discovering that gases at reduced pressure exhibited extremely high conductivity. These, as he showed, could be moved anywhere in the room yet would eerily continue to burn. He would never get around to making them practicable for commercial use, but they are still being investigated more than eighty years later, as shown by patents recently issued.
Tesla: Man Out of Time Page 8