Wizard

by Marc Seifer

  J. Pierpont Morgan1

  Mr. Boldt removed his monocle from his top vest pocket and eyed the man suspiciously. The foreigner was sweating profusely from the August heat. “Niko Tezlê,” he said in a heavy accent as he handed the hotel manager a crinkled envelope.

  Momentarily sidetracked by a spot of dust, Boldt retrieved the document to inspect Tesla’s letterhead. “You may go up,” he said disdainfully as he slammed his hand down on the clangor to call a bellhop.

  The man entered what appeared to him to be a palatial suite. “Jovan, so good of you to come,” the venerated engineer said in his native tongue. “You must find Uncle Petar. It is a matter of utmost urgency.”

  “He may be in Bosnia.”

  “Then go there.” Tesla handed the man a round trip boat ticket, a communique sealed with wax, and a billfold of spending money. “I am depending on you.”2

  Tesla’s three sisters, Angelina Trbojevich, Milka Glumicic and Marica Kosanovic, their husbands, all Serbian priests, and all of their children sat in the rectory to listen to the spell-binding account the courier brought of Niko’s laboratory and world telegraphy tower. “Its head reaches up to the clouds,” Jovan said, spreading his arms to their full extent, “and some day it will send messages to the whole world—right here to this town.” Jovan’s cousins gasped in amazement as he passed around a photograph taken just three months earlier by Dickenson D. Alley, the photographer also responsible for the Colorado pictures.3

  “How will we know when a message is sent?”

  “Everyone will have a little device, the size of”—Jovan looked around the room and spotted a prayer book—“the size of this book, with a wire attached which you will stick into the ground to receive the message!”

  Two first cousins, Nicholas Trbojevich and Sava Kosanovic, both just emerging from boyhood, listened intently. Fully captivated by such news from America, Nicholas announced proudly, “Some day I will be an inventor too.” Sava, destined forty years later to be Yugoslavia’s first ambassador to America, smiled back and nodded in agreement.

  Uncle Petar stepped from the room to open the dispatch in private. Niko had told his uncle that the Panic had hit him hard, that he was out of funds. He would have to close down the World Telegraphy Center if assistance was not received immediately. He asked Petar to go to a local bank and borrow funds using shares in Wardenclyffe as collateral. The bank, of course, would not comply,4 so Petar called a meeting with family elders for a pooling of resources. They then returned to Belgrade, where the transfer of funds could be accomplished. “You wish Niko well for us,” Petar said, grasping Jovan with both arms. Tesla received the money by the end of the month, but it was really only enough to keep a door open for the balance of the year.

  September 13, 1903

  Dear Mr. Morgan,

  Many years I was at your door with this invention, but I did not go in thinking it would be useless…My last undertaking has returned more that two dozen times the original investment and this in strong hands should do better still.

  Help me to complete this work and you will see.

  Yours most faithfully,

  N. Tesla5

  Altering his schedule, the inventor began visiting the lab only on weekends. Having thought the matter through, he abandoned the idea of meeting with small-time investors and placed his efforts in two separate directions. He would step up the manufacture of the oscillators and enlist other tycoons.6 With the money from his relatives, Tesla was able to hire back a few workers. Operations, however, were just about nil, and the rest of the crew were angry about not being paid.

  “You know, of course,” he told Scherff, “that when this panic came, a great many manufacturers simply dismissed their men. Our employees should understand that I have tried to treat them generously in the hardest times this country has known, and they should be grateful instead of impatient. Although the panic is practically over, there is still a general feeling of apprehension on the street. However, I have a few irons in the fire, and at any moment, I may come up with the solution which confronts me. I am more than ever assured that nothing can prevent my ultimate success.”7

  Tesla’s first stop was the home of John Jacob Astor. Taking with him Alley’s new dramatic glossies, the inventor tried his best to reignite the flame. Astor, who was earning approximately $3 million per annum, was nevertheless not a frivolous man. Most of his money these days was being spent on his yacht, the Nourmahal. Whereas Tesla had had an ally in Astor’s wife, the marriage was now in decline, with Ava spending most of her time in Europe with her two small children and her husband, Jack, continuing his practice of straying at home.8 “While wishing you all possible luck,” Astor wrote the inventor, “do not care to go into the company myself.”9

  Deciding that there were other fish in the sea worth hooking, Tesla compiled a list of the biggest ones and worked with a graphic designer to produce a flashy mailer. Known as the “Tesla Manifesto,” the pamphlet boldly announced the expectations of his world telegraphy enterprise.10

  Folded into a maroon vellum binder, the brochure contained lavish prints of the Colorado Station and also the imposing laboratory and tower at Wardenclyffe, a list of relevant patents, past and future accomplishments, a statement of his availability to be hired as a consultant, and a declaration of the breadth and scope of his plan, all of this surrounded by a scalloped design of pen-and-ink drawings of his many other inventions. Atop the new magnifying transmitter, drawn as part of the frame in fancy cursive, were the following words: “Electrical Oscillator Activity Ten Million Horsepower.” People on his list included numerous moguls, each worth anywhere between $20 and $200 million, just about all personally known by the inventor.

  “Luka,” Tesla wrote to Robert Johnson, “Rockefeller and Harriman are now taking up every moment of my time, but I think I shall get through with them very shortly.”11 Written partly in jest, this letter was not far from the truth, for Tesla was becoming more successful in penetrating a number of other wealthy enclaves.

  An Interview with Wizard Edison

  “Do you believe, [Mr. Edison] with Tesla that we should be able to talk around the world one of these days?”

  “No, I do not look for developments in that line. The wonderful thing that will be more and more developed is wireless telegraphy. Marconi is all right and is bound sooner or later to perfect his system.12

  With Edison leading the charges against his credibility, Tesla was placed in a delicate situation. The public at large had yet to know of the Morgan connection, and yet Tesla had to inform potential investors of his interest. Due to animosities that Morgan still held for Harriman, a contract with him was out of the question, but there were still many other financiers to consider.

  On October 12, 1903, Tesla met with Thomas Fortune Ryan. A stalwart, corpulent man five years Tesla’s senior, Ryan, whose real middle name was Falkner, had gotten his start as a dry-goods clerk in Baltimore. His break came after he moved to Wall Street, where he became a stockbroker and investor in large financial institutions. By 1905 his position had grown so extensively that he gained control of nearly $1.4 billion, which was equivalent to almost half of the entire public debt of the United States. Almost one-third of this figure stemmed from his acquisition of the controlling shares of Equitable Life Assurance Society,13 and this came about a little over a year after his initial meeting with Tesla. In and of itself, the connection would appear to be incidental; however, it was Tesla who arranged for a meeting between Ryan and Morgan in attempts to iron out an amenable agreement, and it is well known that Morgan was the secret power behind the famous Equitable Life insurance scandal which erupted in 1905.

  Aside from the handful of diamonds he perpetually fondled in his palm, Ryan’s other assets included control over Mutual Life and Washington Life Insurance, New York City Railway, American Tobacco, Morton Trust, Metropolitan Securities, and Mercantile Trust. Ryan also sat on the board of a dozen other insurance, banking, rail, and utility conc
erns.14 He also owned an immense estate covering hundreds of acres north of the city, near Monticello, where he had erected a $500,000 mansion. From this retreat, his wife, Mrs. T. F. Ryan made a name for herself as a philanthropist, founding a theological institution, erecting “a magnificent Catholic Church [and] a public hospital, [purchasing] fire company equipment, and [making] scores of minor contributions for the good of the village.”15

  Known for his “striking [proficiency] of systematic organization…decisive action, secrecy and the art of using great power behind the throne,” Ryan’s most effective gift was his persuasive ability. “Mr. Ryan makes his headquarters in the Morton Trust Company’s office, where he is Vice-President. He does not bar the door like John D. Rockefeller…Any caller gets to his secretary and very often to the inner room. There is none of the gruffness that so characterizes Mr. Morgan…Mr. Ryan is suavely silent…He never does and never says an important thing without consulting lawyers…Yet he always is polite, and never shows anger.”16

  Tesla had calculated that he required approximately $100,000 to complete his project, so his plan was to enlist “ten subscribers at $10,000 each.”

  “What is the use of going to so many people,” Ryan suggested, staring at the contents of the vellum binder. “I shall take one-fourth. Where do I sign?”17

  Obviously, this was a great opportunity, but it was not a simple matter of just signing a paper. Tesla had to go back to Morgan to confer, and $25,000 would still leave him way short of his goal. “Would you consider underwriting the entire $100,000?”

  “That’s a possibility.”

  “Let me speak to my partner about your generous offer and get back to you.”

  “Is it anyone that I know?” Ryan inquired.

  “I am under orders to keep his name confidential.”

  “We are talking about a significant amount of money, Mr. Tesla. I want to know who I am going into business with.”

  “It is Pierpont Morgan,” the inventor said cryptically.

  “Morgan! Well, then, you couldn’t be in better hands.”

  Tesla wrote Morgan on the following day to arrange a meeting. “Mr. Ryan is a great admirer and a loyal friend of yours and for this reason as well as on account of his ability, I am very anxious to enlist his cooperation. I have told him that $100,000 would be sufficient to reach the first commercial results, which will pave the way to other greater successes. Knowing your generous spirit, I have told Mr. Ryan that any terms you may decide upon will be satisfactory to me.”18

  For Thanksgiving, Tesla joined the Johnsons. He had good news to report. Just back from a two-month stint in Europe, Robert and Kate were eager to describe their meeting with Queen Elena of Italy. Having been decorated by King Humbert in 1895 for his work on the international copyright, Robert was received by the widowed queen as a distinguished personage. He read to her and the queen mother a selection from his most recent book of poems.19 They also stayed a few extra weeks to witness the jubilee at the Vatican, celebrating twenty-five years of the reign of Pope Leo XIII.

  “Mr. Tesla, do I detect a gleam in your eye?” Kate inquired.

  “You’re not about to become one of the detested wealthy elite, are you?” Robert teased.

  “My dear Luka, I do not want you to despise millionaires, as I am hard at work to become one. My stocks have gone up considerably this week.”

  “Morgan?” Katharine whispered hopefully.

  “Fortune Ryan,” Tesla said, taking out a bank note to display proudly. He would receive a total of $10,000 from the financier. “If it continues for a few weeks like this, the globe will be girdled soon. Now Kate, where’s that turkey?”20

  At this time, Morgan met with Ryan. Obviously, the Tesla deal did not go through. The question is, why?

  Every indication suggests that the meeting went well. Ryan had been described by Wheeler (one of Morgan’s harshest critics) as “a most adroit, suave and noiseless man,”21 and this makes some sense, for a few years later it would become evident that Ryan was, in essence, a Morgan puppet.

  In 1899, Henry Hyde passed away. He had been controller of the half-billion-dollar Equitable Life Assurance Society, “comprising the scrapings of the poor.”22 Fifty-one percent of the company was left to his son James, who was twenty-three at the time. A rather eccentric and naive millionaire, James charged the company for petty extravagances, such as importing barbers from France and placing his personal chefs at all of his favorite restaurants. The muckrakers were unable to tolerate the extravagent lifestyle of James, especially after it was learned that on January 31, 1905, he had spent $200,000 on a Louis XV costume ball at Sherry’s. They demanded his resignation.

  No doubt, ever since Hyde’s father had passed on, Morgan had had his eye on the company, but because of the Northern Pacific debacle, he had to proceed cautiously. It is plausible to consider that at the meeting concerning the Tesla project Morgan might have suggested that Ryan’s money could be better spent in a different area. Whatever he said, it appears to have been stated in such a way as to not completely turn off Ryan, as he did invest and maintain interest in the enterprise from the years 1903 to 1906, although he never paid Tesla more than the initial modest subscription.

  In a situation that paralleled the Northern Pacific fiasco, Morgan fought for the Equitable on one side against Harriman and his broker, Jacob Schiff, another financier who almost went into the Tesla deal. The end result was an obscure maneuver whereby Thomas Fortune Ryan was able to purchase the controlling shares of Equitable for a paltry $2.5 million. Young Hyde moved to France, where he remained for a quarter century.

  Rumors of mismanagement of the funds of a few million investors continued, however, and Ryan’s picture, throughout the summer of 1905, was slapped on the front pages of every newspaper in town. Drawn as a rapacious spider in his web, clutching his prey of the Equitable in one political cartoon, Ryan was described by southern banker and critic John Skelton Williams in a scathing article that appeared in the World: “Mr. Ryan has the tendencies which, if his lines had been cast in a humble and contracted sphere probably would have made him a kleptomaniac. His strongest impulse is to acquire money, and his one robust passion is to keep it…Ryan is simply an acquiring machine and operates himself for the purpose of getting what others have.”23

  Although Morgan, as head of a rival insurance company, supposedly had no interest in Equitable, Herbert Satterlee, his son-in-law, uncharacteristically revealed that Ryan was actually controlled by Morgan, stating that Morgan “was entirely conversant with Mr. Ryan’s plans…They had his thorough approval and possibly his financial backing.”24

  During the government investigations that continued relentlessly throughout the first decade of this century, it was discovered that dummy loans totaling $1.8 million were made to a fifteen-year-old Negro messenger boy in Morgan’s New York Life Insurance Company.25 Ryan also sold his 51 percent interest in Equitable to Morgan for $3 million in 1910. Testimony from the investigation explains quite clearly Ryan’s role as a Morgan puppet.

  Q: Untermeyer: Did Mr. Ryan offer this stock to you?

  A: Morgan: I asked him to sell it to me.

  Q: Untermeyer: Did you tell him why you wanted it?

  A: Morgan: No; I told him it was a good thing for me to have…He hesitated about it, and finally sold it.

  Taken from Wheeler’s Pierpont Morgan: Anatomy of a Myth, the author ended the passage as follows: “During the Panic of 1907, Morgan, in his 71st year, truly manipulated vast sums and groups of men [including President Theodore Roosevelt] in commanding fashion.”26

  As “the power behind the throne,” clearly Morgan dominated the conversation when Ryan came to invest in Wardenclyffe. Morgan redirected his new chess piece into the insurance arena, but this still does not answer the question as to why. If Tesla’s enterprise were perceived to have become potentially profitable, having Ryan put in another $100,000 to complete it would have been an easy thing to do. We can therefore conclude tha
t Morgan deliberately scuttled the Tesla venture.

  THE GUGGENHEIM CONNECTION

  Aside from being annoyed with the difficult inventor, Morgan was concerned about Tesla’s suggestion that he could transmit “unlimited power” by means of wireless. Tesla was boasting here, since he assured Morgan in future letters that Wardenclyffe would only be able to transmit “feeble amounts” of energy.

  We come to a juncture here where the decisions of individuals redirected the course of history. As John Stewart Mill has noted, individuals make the history, and here is a clear instance of this proposition. For all intents and purposes, Morgan made the decision in October 1903 to do his best to ensure the inventor’s defeat.

  Morgan, however, was opposed philosophically to Tesla’s overall scheme. It has been suggested that Morgan felt pressure from other Wall Street moguls, such as Bernard Baruch, Thomas Fortune Ryan’s young and highly successful stockbroker. One day, Baruch had mistakenly suggested that Morgan, like him, was a gambler. Morgan was reported to reply, “I never gamble,” and, indeed, may have backed down from the Tesla deal for fear of taking a chance that the controversial inventor might fail or that he might succeed in a way detrimental to existing corporate structures.

  The following quotation is from physician and inventor Andrija (Henry) Puharich, a man of Yugoslavian heritage who was tangentially involved in helping ship Tesla’s papers to the Tesla Museum in Belgrade in the early 1950s27 and who personally knew John O’Neill, Tesla’s first major biographer: “Now, I [Puharich] always got this second hand; you won’t find it anywhere in print, but Jack O’Neill gave me this information as the official biographer of Nikola Tesla. He said that Bernard Baruch told J. P. Morgan, ‘Look, this guy is going crazy. What he is doing is he wants to give free electrical power to everybody and we can’t put meters on that. We are just going to go broke supporting this guy.’ And suddenly, over-night, Tesla’s support was cut off, the work was never finished.”28