by Jill Jonnes
Tesla would have been well aware in early 1891, as was the whole electrical fraternity, that Westinghouse Electric was in severe financial straits. So perhaps he was not surprised when Westinghouse appeared at his fourth-floor laboratory, where Tesla was making amazing advances with high-frequency research. The month that Barings practically went belly-up, setting off the whole Westinghouse crisis, Tesla had managed to light up protofluorescent lamps of his own invention using only ambient electrostatic waves. These unique light bulbs had no filaments, only gases that responded to the highly charged electrical atmosphere, and were connected to no electrical wires. When Westinghouse came to Tesla’s lab, wearing as always his dark formal vested suit, he got right down to his unfortunate task. Ever a mixture of bluntness and charm, he elaborated upon the crisis and asked Tesla to repudiate his contract and forgo his patent royalties. Tesla described this critical episode in his own life to his first biographer thus:
“‘Your decision,’ said the Pittsburgh magnate, ‘determines the fate of the Westinghouse Company.’
“‘Suppose I should refuse to give up my contract; what would you do then?’
“‘In that event you would have to deal with the bankers, for I would no longer have any power in the situation,’ Westinghouse replied.
“‘And if I give up the contract you will save your company and retain control so you can 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,’ Westinghouse explained. ‘It was my efforts to give it to the world that brought on the present difficulty, but I intend to continue, no matter what happens, to proceed with my original plans to put the country on an alternating current basis.’
“‘Mr. Westinghouse,’ said Tesla, drawing himself up to his full height of six feet two inches and beaming down on the Pittsburgh magnate who was himself a big man, ‘you have been my friend, you believed in me when others had no faith; you were brave enough to go ahead and pay me … 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. The benefits that will come to civilization from my polyphase system mean more to me than the money involved. Mr. Westinghouse, you will save your company so that you can develop my inventions. Here is your contract 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?’”14 And so, ever the romantic, the idealist, the brilliant dreamer of elysian electrical dreams, Tesla grandly sacrificed those possible future profits to Westinghouse’s own electric survival.
Was Tesla the major cause of Westinghouse’s financial woes? Probably not. Westinghouse was well-known for being generous to young inventors of all sorts, but he had also purchased numerous businesses that ate up capital and were not yet generating much income. He was always an enthusiastic litigator on many fronts, especially patent infringement, and his long-running and still ongoing battle with Edison over the incandescent bulb had racked up huge legal fees. But Tesla was certainly a factor and just one of many savings the financiers demanded. Moreover, at this stage of his burgeoning career, Tesla probably felt he could well afford to be magnanimous with Westinghouse, who was struggling to preserve his electrical empire. For the Serbian inventor’s own deep delvings into the mysteries of high-frequency electricity were just beginning and already were yielding all manner of fascinating secrets. Tesla, along with his fervent and loyal admirers, including editor T. Commerford Martin and Professor William Anthony, was firmly convinced that his AC system and motor were just the rich beginning, the mere debut of many magnificent and hugely lucrative inventions: Electricity was in its infancy, and Tesla was destined to be its greatest explorer, unveiling for the world the inner workings of a universe pulsing with invisible energy.
As Tesla advanced into more and more remote electrical terrain—the unknown peaks and valleys of very high frequency alternating current—T. C. Martin again urged him to publish his findings and then present his new work in another lecture. The rumors were rampant among the electrical fraternity about Tesla’s doings: hard-to-credit tales of wireless lights weirdly glowing in Tesla’s laboratory all through the night or talk that the strange young inventor was taking tens of thousands of volts through his body, standing there smiling and unharmed as he allowed crackling electrical flames to engulf him, like some medieval Serbian saint surrounded by a pulsing silvery blue aura. Tesla was harking back to the long-ago electrostatic shows of Dangling Boys. Martin was as important and influential as ever in the electrical field, having jumped ship from the Electrical World in early 1890, after squabbling with the publisher, to run the Electrical Engineer, which thereby immediately became the leading journal. Martin, always debonair with his huge handlebar mustachio and dashing British charm, cajoled the ever reluctant Tesla to emerge from the long nights at his lab and share with the world his rare and strange discoveries. Finally, Nikola Tesla agreed to speak on May 20, 1891, at the Wednesday night meeting of the American Institute of Electrical Engineers, the same prestigious forum where his first talk had catapulted him to fame among his peers.
Again the meeting was held at Columbia College up on Madison Avenue in the school’s electrical workshop. Tesla stood up on a stage, his apparatus arrayed on a wooden table before him. Many of the nation’s leading electricians crowded in, anxious to see what Tesla had got up to now. Was there anything to all the odd stories? The place was abuzz with excitement. T. C. Martin’s coeditor, Joseph Wetzler, was in that eager crowd and wrote for readers of Harper’s Weekly: “Mr. Tesla held his audience in complete captivity of attention and admiration for over three hours.”15 Tesla explained to his rapt audience that what he had been investigating in a broad sense was how to unleash the infinite energy “nature has stored up in the universe.” He had constructed in his downtown laboratory “alternating current machines capable of giving more than two million reversals of current per minute” and then had been experimenting with them to investigate a range of questions. But for his Columbia talk, he would confine himself to just one topic, “the production of a practical and efficient source of light.” Tesla had developed a series of powerful AC machines that generated great electrostatic waves—or thrusts—that produced varying kinds of “discharges,” eerie and luminous electrical emanations, ranging from the most delicate and threadlike fans to whirling pinwheels to great spurts of streaming, glowing flames that spread about a whole machine, like an unearthly corona.
Speaking in his high, nervous, but perfect (accented) English, Tesla demonstrated his numerous different electrostatic machines and explained the specific kinds of light each produced. Tesla had also been experimenting with new kinds of light bulbs that operated on completely new principles. “It cannot be denied that the present methods [of illumination], though they were brilliant advances, are very wasteful,” he explained. “Some better methods must be invented, some more perfect apparatus devised.” He then amazed his audience by showing a light bulb with a single looped filament. He then set that filament to spinning even as it was glowing brightly. But Nikola Tesla’s showstoppers, his most amazing wonders, were the long-rumored bulbs without any filament that indeed glowed as brightly as any incandescent bulb and yet were unattached to any wire or machine. The tall, pale Mr. Tesla in his slender swallowtail coat held them aloft in his hand, somewhat like the Statue of Liberty, and they shone. He explained how it was that his whole laboratory operated using just such magical lights, protofluorescents. “I suspend a sheet of metal a distance from the ceiling on insulating coils and connect it to one of the terminals of the induction coil, the other terminal being preferably connected to the ground. An exhausted tube [one with a vacuum] may then be carried in the hand anywhere between the sheets or placed anywhere, even a certain distance beyond them; it remains always luminous.” Thomas Edison’s proudest invention was his incandescen
t bulb. And indeed, it had lit up the world as he had promised. Now Nikola Tesla was declaring Edison’s technology passé, obsolete, a primitive and inefficient solution that deserved to be replaced.
Outside in the late spring evening, it had long since grown dark. For three hours, Nikola Tesla had mesmerized his well-educated audience of electricians with his demonstrations of completely new electrical effects, machines, and light bulbs. As he completed his lecture, he said, “Among many observations, I have selected only those which I thought most likely to interest you. The field is wide and completely unexplored, and at every step a new truth is gleaned, a novel fact observed. How far the results here borne out are capable of practical applications will be decided in the future. As regards the production of light, some results already reached are encouraging and make me confident in asserting that the practical solution of the problem lies in that direction…. The possibilities for research are so vast that even the most reserved must feel sanguine of the future.”
Tesla understood that many branded him a “visionary” for his deep belief that in time energy would be easily extracted from the universe around us. But he pointed out, “We are whirling through endless space with an inconceivable speed, all around us everything is spinning, everything is moving, everywhere is energy. There must be some way of availing ourselves of this energy more directly. Then, with the light obtained from the medium, with the power derived from it, with every form of energy obtained without effort, from the store ever inexhaustible, humanity will advance with giant strides. The mere contemplation of those magnificent possibilities expands our minds, strengthens our hopes and fills our hearts with supreme delight.”16
With that Tesla bowed modestly and stood beaming as the audience rose to its feet and thunderously clapped its amazement at what they had heard and seen. Electrical World declared it “one of the most brilliant and fascinating lectures that it has ever been our fortune to attend.”17 Joseph Wetzler, awed and astounded, proclaimed in Harper’s Weekly that with this second lecture of his career, Nikola Tesla had “at one bound placed himself abreast of such men as Edison, Brush, Elihu Thomson, and Alexander Graham Bell.” Was it any wonder that Tesla so generously gave up all rights to AC royalties when he and his admirers believed he was well on his way to unleashing in completely novel ways the energy of the whole universe for man’s needs? A mere decade hence, AC might well be as outmoded as DC.
As May turned to June, Westinghouse’s determined quest for money continued. Out in West Orange, Thomas Edison might well have gained great pleasure from Westinghouse’s financial woes in that grim spring of 1891, were he not in much the same predicament. Several months after his agreeable autumn of continental adulation in 1889, Edison was writing the ever charming, ever busy Edison General Electric president, Henry Villard, that the previous summer’s reorganization (which had made him a millionaire) was not, after all, such a great arrangement. Before, Edison wrote, he had “an income of $250,000 per year, from which I paid easily my Laboratory expenses. This income by the consolidation was reduced to $85,000, which is insufficient to run the Laboratory…. I am placed in such a position that my active connection with the Lighting business costs half my time … [and] has produced absolute discouragement.”18
Villard was well aware from his previous efforts to merge Edison’s company with rival firms that Thomas Edison bristled at such talk. The inventor had angrily dismissed the notion that mergers (and ensuing sharing of contested patents) would solve any problems by asserting, “The Company with the best and cheapest machinery will do the business, patents or no patents. Fact is, Mr. Villard, that all electric machinery is entirely too high now. These high prices hurt the business.” As for merging with Thomson-Houston, that was absolute anathema. Edison had already denounced its men for “having boldly appropriated and infringed every patent we use.”19 Edison’s AC war against Westinghouse made the Pittsburgh magnate and his firm an unlikely merger mate. Moreover, Edison fervently believed that were he to combine with any of his hated rivals, his inventive fertility would dry up. “If you make the coalition my usefulness as an inventor is gone. My services wouldn’t be worth a penny. I can only invent under powerful incentive. No competition means no invention.”20
In the wake of the Barings debacle, however, Villard had seen his German-funded North American Bank, source of much Edison GE electrical capital, collapse. Moreover, Edison now held only 10 percent of his own company’s stock. So about the same time that Westinghouse began desperately seeking Wall Street money, Villard once again began secretly talking to Charles Coffin, the former shoe salesman whose business brilliance had steadily forged Thomson-Houston into a major electrical power. Villard was still intent upon a merger of the two firms, with an eye to ending the draining and costly patent wars (sixty lawsuits were wending their expensive way through various courts) and to gaining access to Thomson-Houston’s well-developed AC lighting system at a time when Edison salesmen were clamoring for AC. And while the incandescent light bulb patent was still on appeal in the courts, the general feeling was that Edison would win. Thomson-Houston would very much need the rights to that all-important bulb. Then, of course, there were the obvious advantages of size and scale.
Yet nothing could proceed without the blessing of J. P. Morgan, who had in the past decade become one of the most powerful financial figures on Wall Street and, hence, in America. As Morgan sat in his office smoking monstrous Havana cigars, busily and efficiently combining what he viewed as wastefully competitive railroads into “trusts,” he provoked the growing ire of those disgusted by an arrogant plutocracy of unchecked big money. But in February of 1891, J. P. Morgan could see no purpose in an Edison merger with Thomson-Houston as proposed by Coffin’s Boston financiers. “The Edison system,” Morgan wrote them, “affords us all the use of time and capital that I think desirable to use in one channel. If, as would seem to be the case, you have the control of the Thomson-Houston, we will see which makes the best result. I do not see myself how the two things can be brought together, certainly not on any such basis as was talked about a year or more ago.”21 Villard gamely kept in touch with Coffin but held out little hope for the time being.
Charles Coffin tried on numerous occasions to woo Westinghouse into a merger of their two firms. Clarence W. Barron, a talented financial journalist, happened to stop by Westinghouse’s factory when the magnate was in an irritable mood, and with one mention of Coffin, out poured a blunt Westinghouse diatribe: “Mr. Coffin has a very swelled head. He talks about making [his] … Company bigger than the Standard Oil Company…. Coffin will make a man about ten different propositions in ten minutes. I have had many interviews with him. I suppose you know how he takes people into his inside room and then locks the door on them, so as not to be interrupted.
“At one of our interviews, I think it was in New York, he asked me if I would be willing to go into any electrical combination of which I was not the head. I said most emphatically that I would not go into any electrical combination of which I was to be head … [nor] of which he was to be head. He told me how he ran his stock down and deprived both Thomson and Houston of the benefits of an increased stock issue….
“I said to Coffin, ‘You tell me how you treated Thomson and Houston, why should I trust you after what you tell me?’
“At another time … we were at a hotel in New York and Coffin proposed, I forget the exact details of the arrangement, that we should form a combination, so that whatever occurred, whether the companies were successful or unsuccessful, we should make money under any circumstances. I said to Coffin … that I was not in the habit of robbing my stockholders. There was no reply.”22 As Barron heard, Westinghouse had nothing but contempt for his very successful rival.
In the early months of 1891, George Westinghouse was spending week after week in New York trying to save his company. Westinghouse, who hated newspaper puffery, even cooperated with The New York Times, which ran a flattering profile lauding his “inventi
ve genius … [and] the boldness and scope of his business undertakings” and his abilities to “offhand, tell approximately the condition of every one of his companies, even down to the items which figure in the assets and liabilities. He is a hard worker and not infrequently is at his office until late at night.”23 Nonetheless, January turned to February and the Westinghouse Electric news was only bad: “Boston men are gathering enough stock together to control the company.”24 The ever upbeat Westinghouse dismissed these rumors as sprung from some patent-sharing agreements with Coffin’s Thomson-Houston, a Massachusetts firm. But even George Westinghouse could not deny that the deadline for selling preferred stock had to be extended to March 1, 1891. Then that date had to be pushed back again, this time to March 20. Yet even as Westinghouse exerted his huge energies on rounding up reluctant investment capital, he found himself and his board suddenly ousted from one of his other companies, Union Switch and Signal. The industrial jackals, scenting weakness and distraction, were closing in to snatch whatever prizes they could. In the end, the jackals were beaten back and Westinghouse was reenthroned, but it was a rude reminder of vulnerability.
Finally, on May 4, the annual stockholders meeting was convened in Pittsburgh at the imposing Westinghouse Building. Fifty anxious investors assembled to hear what George Westinghouse would have to say. Westinghouse was present and looked as hale and hearty as ever, not at all like a man who had spent the past four months desperately seeking to save his company. Prior to the meeting, each stockholder had received a circular that provided welcome confirmation of what had otherwise been only broadly rumored: A syndicate consisting of August Belmont & Co. of New York, Lee, Higginson & Co. of Boston, and Brayton Ives, president of Western National Bank, was proposing to reorganize the Westinghouse Electric Company and its associated interests. However, as soon as Westinghouse opened the meeting, he politely made clear that negotiations were still under way, and thus the board proposed to adjourn the annual meeting to two weeks hence.