CHAPTER 22

The End of the Battle of the Currents

IN THE WEEKS before and after Kemmler's execution, Thomas Edison and Arthur Kennelly were busily engaged in new experiments on alternating current. They were spurred to action by an angry letter from Samuel Insull, the vice president of Edison General Electric. At a meeting of Edison utility companies in the summer of 1889, managers from many cities had complained that they were being crushed by competition from Westinghouse. Insull had promised the local companies that within six months Edison General would have its own alternating system available. Because of Thomas Edison's intransigence, that promise was not kept. As another meeting of the local Edison companies approached in the summer of 1890, Insull reminded Edison of the earlier promise. "A year has now expired since that meeting was held, and we are no further ahead to-day than we were at that time." Insull had instructed Edison General's engineers to begin work on alternating generators, and he now urged Edison to get started on a transformer. "It is of the utmost possible importance that we should be able to go ahead on alternating apparatus," Insull told Edison. "I think that it is particularly important that in our new organization any promises I make to our people should be absolutely adhered to, and I shall be glad if you will bear this in mind when you reply to this letter."1

Although he was under contract to develop electrical equipment for Edison General Electric, Thomas Edison was not used to receiving such peremptory marching orders. He nonetheless complied. He and Kennelly worked on a transformer in August, and during the fall they began designing a generator as well. Before long they had a working alternating system.2

In the fall of 1889, during the frenzied months of the electric wire panic, Edison's goal of having alternating current banned had looked surprisingly attainable, but one year later all of his lobbying efforts had ended in failure. Although he still had doubts about the safety and efficiency of the technology—as late as 1891 he would say that "the use of the alternating current is unworthy of practical men"—he conceded that his firm needed an alternating system. He also tempered his rhetoric. "The death rate [from high-voltage alternating current] will be reduced to a minimum, or rather there will be none at all," the inventor told a reporter in November 1890. "The electric wires—I mean the small, cheap, high tension wires—ought to come under strict inspection laws." A year after having advocated a complete ban, Edison claimed that the safety of alternating current could be assured simply through proper regulation.3

ALTHOUGH EDISON'S STATEMENTS indicated that the battle of the currents was inching toward a conclusion, competition among the leading electric light firms remained fierce. Edison, Westinghouse, and Thomson-Houston were fighting city-by-city skirmishes for lighting and electric streetcar contracts, and patent litigation grew feverish. Competition took a heavy toll on the firms, which struggled to remain profitable. The situation turned darker in the fall of 1890, when the failure of a major London brokerage house roiled world money markets. Westinghouse was forced to reorganize and find new investors, and Edison General struggled to remain solvent.4

The crisis confirmed Edison General director Henry Villard's view that competition—with its expensive takeovers, patent litigation, and price slashing—was killing the electrical industry. Villard and Charles Coffin, the head of Thomson-Houston, had discussed a merger as early as 1889, but Thomas Edison refused to go along. "If you make the coalition, my usefulness as an inventor is gone," he told Villard. "My service wouldn't be worth a penny. I can only invent under powerful incentive. No competition means no invention." Edison knew how much money his business demanded, but he clung defiantly to an earlier model of entrepreneurial culture, one based on pride in craft, in which the inventor's identity and the company's identity were one and the same. Edison managed to hold off Villard's merger plans in 1889 and again early in 1890.5

After the financial crisis of late 1890, Villard again explored consolidation with Thomson-Houston. Again, the talks went nowhere, but this time the major obstacle was not Thomas Edison's pride but the lamp patent infringement suit against Westinghouse, which in July 1891 was decided in Edison's favor. The presiding judge ruled that Edison had invented the first commercially viable incandescent lamp by placing a high-resistance carbon filament in a one-piece glass globe exhausted of air. The decision, which gave Edison interests a monopoly over a central element of all electrical systems, convinced them they could outcompete their rivals and therefore did not need to merge. That confidence proved misplaced. Both Thomson-Houston and Westinghouse found ways to skirt Edison's lamp patent—for instance, by using a bulb with a stopper rather than Edison's one-piece globe—and the legal decision had little effect on competition between the three major firms.6

The failure to translate legal victory into industrial dominance convinced Edison General's investors that they could no longer go it alone. The company had potent resources—major factories, a national marketing structure, the Edison name, the Edison laboratory—but Thomson-Houston had built a more efficient organization. In 1891 Thomson-Houston and Edison General had roughly comparable sales figures—$10.3 million and $10.9 million, respectively—but Edison General earned profits of only $1.4 million, whereas its rival cleared nearly twice as much. Thomson-Houston managers saw benefits in consolidation with Edison General: It would create a diverse product line, boost profits by quelling price competition, and attract new investors. In February 1892 a committee of six financiers-including Edison investor J. P. Morgan and Henry Higginson, Thomson-Houston's primary broker—hammered out the details of a merger and formed a new company. Edison's named was dropped, and the new firm was known as General Electric. Charles Coffin became its president, and four of his five top officers were from Thomson-Houston. As the directors saw it, the Thomson-Houston men—and not their Edison General counterparts—were best equipped to manage the company efficiently.7

Thomas Edison owned about 14 percent of the new company's stock, and he professed to be thrilled with the new arrangement. As rivals, the inventor said, Edison General and Thomson-Houston had cut prices so low that they were selling equipment at a loss and losing their shirts. Asked about rumors that he opposed the merger, Edison only laughed. "I haven't been either frozen out, euchred, or turned down," he said. "My stock is worth more now than it was before."8

But there was a great deal that he did not say. The formation of General Electric marked the Edison company's full surrender in the battle of the currents, because it lost its identity as a company primarily committed to direct current. According to Alfred Tate, Edison's personal secretary, the inventor had been unaware of these merger plans until the day they were publicly announced. Samuel Insull acknowledged in his memoir that "Mr. Edison was not in real sympathy with the consoli-dation," and that the merger led to a falling-out between the two men. Reports at the time claimed that Edison blamed Insull for the turn of events, believing that Insull's mismanagement of Edison General made the merger necessary. If he was upset with his own managers, he was outraged by the men chosen to lead General Electric. Unlike his earlier enterprises, it would not be run by his close friends, the craftsmen and machinists who had worked with him for years. Edison's inventions—a decade's worth of sleepless nights—fell under the control of the professional managers from Thomson-Houston, the very men he had accused a few years earlier of "having boldly appropriated and infringed every patent we use."9

Some reports held that the new directors summarily dropped the "Edison" from the new company's name, but according to Insull it was the inventor himself who insisted that General Electric do without his name. Edison's creation had outgrown him. He was trapped between a desire for personal control of a company and the need for the capital required to spread his inventions around the globe. General Electric would be an enormous company run by professional managers, pooling the resources of thousands of investors, employing the patents of dozens of inventors. Since it was no longer his company, it should no longer bear his name.

Edison's emotions were best captured in a memorandum he wrote to Henry Villard regarding an earlier merger proposal. "You will see how impossible it is for me to spur on my mind under the shadow of probably future affiliations with competitors, to be entered into for financial reasons," Edison wrote, then continued in a mournful vein: "I think up to date I have performed every duty asked of me, made every concession, and I would now ask you not to oppose my gradual retirement from the lighting business, which will enable me to enter fresh and more congenial fields of work."10

Alfred Tate reported that only once did Edison reveal his bitterness about the merger. "I've come to the conclusion that I never did know anything about [electricity]," Edison told Tate. "I'm going to do something now so different and so much bigger than anything I've ever done before people will forget that my name ever was connected with 269 anything electrical."11

Such forgetting was unlikely, but Edison did turn to other ventures.

In 1888 he had prepared a patent application for a "kinetoscope," which he described as "an instrument which does for the Eye what the phonograph does for the Ear, which is the recording and reproduction of things in motion." In 1892 Edison and his assistant William Dickson created prototypes for the kinetograph (a camera) and kinetoscope (a peephole motion picture viewer). In 1894 "Edison Kinetoscopic Record of a Sneeze" became the first motion picture to receive copyright protection, and in the following years Edison emerged as the pioneer of the American motion picture business.12

Another project proved less successful. Forsaking the delicate consumer goods that had made his reputation and his fortune—the phonograph, the lightbulb—Edison began to devote his time and his passion to the crude work of hard rock mining. Newspaper men dutifully trekked to Edison's sprawling mine complex in the mountains of northern New Jersey where the wizard told them about his grand plans to revolutionize the iron ore industry The scheme was doomed. In the coming years he sold off most of his General Electric stock and poured the money down a mine.13

He never expressed any regret over the failure. Perhaps he saw the loss of his electricity fortune as a ritual purging, the severing of ties with the industry that he had created, only to have it escape his control.14

THE TWO COMPANIES that formed General Electric complemented each other perfectly, with Edison General's strengths in direct current balancing Thomson-Houston's experience in alternating current and arc lighting. Both firms had lucrative lines in electric railways. Boasting solid patents and expertise in the full range of electrical equipment, General Electric was well positioned to slug it out with its lone rival, Westinghouse Electric.

The biggest battleground was the market for alternating equipment, both lighting systems and motors. Despite his strong patents, Nikola Tesla failed to produce a practical alternating-current motor while on the Westinghouse payroll in 1888 and 1889. The idea, though, was too important to be abandoned. Inspired by Testa's patents, other inventors continued to experiment. Their results were unveiled in spectacular fashion at an 1891 electrical exhibition in Frankfurt, Germany. A German and a Swiss company pulled off the greatest feat of electrical transmission to date, sending 15,000 volts of alternating current along more than 100 miles of cable, from a hydroelectric plant in the Alps to the exhibition building in Frankfurt. As impressive as the transmission itself was, it was matched by the machinery it drove in Frankfurt: a 100-horsepower alternating motor. Both the transmission system and the motors were far more efficient than anyone expected them to be. At long last, direct current had a rival in the field of electrical power.15

The Frankfurt display caught the attention of electricians worldwide, but none were more interested than those working on a project in upstate New York. Niagara Falls was the Holy Grail of power engineering. Draining one Great Lake into another, the falls offered one of the heaviest, steadiest sources of hydraulic power in the world, but no one knew how to harness it. Financiers, J. P. Morgan among them, created the Cataract Construction Company in 1889. To make the enormous project pay, the company needed to supply power to factories fairly close to the site, as well as to Buffalo, more than twenty miles away.

In the fall of 1889 the Cataract company had sought advice from Thomas Edison, who at the time was in Paris collecting honors and reviewing his displays at the Universal Exposition. The inventor wired his response: "No difficulty transferring unlimited power. Will assist. Sailing today" Back in the United States, he admitted that there were in fact considerable difficulties. Direct current was unsuitable for high-voltage, long-distance transmission. Alternating current was perfect for transmission, but the lack of a good motor meant that the current could be used only for light and not for the industrial applications needed to make the project pay The Niagara plans stalled for lack of attractive options. Then came the Frankfurt exposition in 1891, which demonstrated alternating current's clear advantages over direct. Throughout 1892 both General Electric and Westinghouse scrambled to create alternating-current proposals for Niagara.16

They also battled for another prize: the contract to light the world's fair planned for Chicago in 1893. Officially known as the World's Columbian Exposition, the fair would commemorate (a year late) the quincentennial of Columbus's voyage to the New World. Like all world's fairs, its real purpose was to showcase industrial progress. This would be the first great American fair of the electrical age, and the contract to supply incandescent lighting carried great prestige. After submitting a bid of $1 million, General Electric was shocked to learn that Westinghouse had secured the contract with a bid of $399,ooo.17

The Chicago fair centered on the "White City," a collection of elaborate classical buildings surrounding a central lagoon. There were buildings devoted to Fine Arts, Agriculture, Mining, Transportation, and Manufacturing, but electricity captured the spirit of the times. At the last great American fair, in Philadelphia in 1876, Americans saw a few crude dynamos and arc lamps. Less than two decades later, a new industry was in full flower. Westinghouse lit the grounds and buildings with 100,000 incandescent lamps, while other companies added 5,000 arc lamps. Spotlights with colored filters turned iridescent the jets of water in the fair's fountains. Visitors could board an electric train or putter about the lagoon in an electric launch. The massive Ferris wheel—invented for the fair—was studded with 1,500 bulbs.

At the entrance to the Electricity Building was a heroic fifteen-foot-tall statue of Benjamin Franklin, kite in hand, and displays inside traced the history of electricity over the previous centuries. Thrusting up at the building's center was the Edison Tower, a tall shaft encircled with thousands of colored lamps and topped by a huge incandescent bulb. Many of the fair's 27 million visitors were experiencing the wonders of electricity for the first time, and the exposition "dissolved much of the mystery that had pervaded its domain," one official claimed. "It brought electricity to the people in the light of a servant not as an awful master." Fairgoers admired the latest phonographs, telephones (including an underwater version for divers), railway signals, pickpocket detectors, seismographs, clocks, tabulating machines, cash registers, and egg incubators. The military-minded could see an electric torpedo, while industrialists enjoyed electric fans, hoists, riveters, welders, pumps, drills, conveyor belts, and air compressors. Medical electricity was not neglected. In addition to devices for giving therapeutic shocks, there were dental mallets and drills, surgical lamps, cautery devices, and a lamp-tipped catheter for illuminating kidney stones. The Edison Manufacturing Company displayed a physician's kit in a black walnut case that included a battery, sponge electrodes, and an "interchangeable fast and slow vibrator." The average citizen was most interested in devices for the home, including the "model electric kitchen" that featured ovens, kettles, frying pans, saucepans, griddles, coffeepots, dishwashers, coffee mills, cigar lighters, hot-water heaters, irons, hair curlers, and boot polishers. The myriad uses of electricity struck one fairgoer as "little short of miracle or witchcraft."18

Although the exhibits showcased the electrical future, the real revolution at the fair was the system providing the power. In 1893 electrical equipment ran on many types of current, with the division between alternating and direct current being only the most basic. Alternating generators produced current of different types—known as one-, two, and three-phase—that were not interchangeable. Arc lamps required high pressures (1,000 to 2,000 volts), incandescent lamps low (50 to 100 volts). Power needs were even more numerous. The new alternating motors worked well for devices that ran at a constant speed, such as dentist's drills and fans, but electric streetcars and elevators—the two major uses for electrical power in the 1890s—required direct-current motors, which were better equipped to run at varying speeds under heavy loads. Individuals, companies, and municipalities had invested in many different kinds of electrical equipment. The Pearl Street district in New York could not afford to scrap its direct-current lighting system and start all over with alternating, just as an early Westinghouse lighting company that was heavily invested in single-phase alternating current could not convert to two- or three-phase. And any city with electric railways needed direct current to run them. It was like having a dozen railroads, each running on a different-gauge track. The current, ad hoc solution to the problem of incompatibility was to generate different types of electricity for each application.

Together with Nikola Tesla, George Westinghouse created a universal system of electrical supply At the core of the Tesla Polyphase System used at Chicago was a two-phase alternating generator (soon three-phase would become the industry standard). Flexibility was provided by new coupling devices, such as phase-converters that changed two- or three-phase current into single-phase. Even more important was a device called a rotary converter that was capable of changing alternating current into direct. The universal system could supply, from one generator, electricity to serve any need: direct-current motors, single-phase or polyphase alternating motors, electrochemical processes (which required direct current), and incandescent and arc lamps requiring direct current, single-phase, or polyphase alternating current.19

George Westinghouse's bid for the Chicago fair contract was so low that he lost money on it, but the true purpose of his Chicago installation was to stake a claim to Niagara. Not accidentally, the Westinghouse univeral system was perfectly adapted to meet the needs of the Niagara power station. In the fall of 1893, not long after the fair closed, Westinghouse won the Niagara contract. Two years later Niagara delivered power to its first customer, the Pittsburgh Reduction Company, which built near the falls to exploit the cheap electricity. In 1896 Buffalo received its first Niagara power, and before long growing demand forced an expansion of transmission lines. Although Westinghouse won the initial contract, Niagara was very much a cooperative affair. General Electric built transformers, transmission lines, substations, and rotary converters. When generating capacity was expanded, the company supplied some of the new generators. By 1900 Westinghouse and General Electric together controlled virtually all of the electrical manufacturing market, and both firms prospered throughout the next century,20

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The Westinghouse Electric and General Electric exhibits at the World's Columbian Exposition in Chicago, 1893.

The Niagara project marked the symbolic victory of alternating over direct current, but Thomas Edison's beloved current did not disappear. Some of Niagara's heaviest customers used direct current for streetcars, industrial motors, and electrochemistry, and Edison's old three-wire direct-current systems in urban centers remained viable—and profitable—long into the twentieth century For decades, most electrical systems entailed both alternating- and direct-current applications; alternating generators, however, were at the core of those systems.

Alternating current triumphed in the battle of the currents for the same reasons that attracted George Westinghouse to it in the first place. It could be produced at relatively low voltages, stepped up to higher voltages with transformers for economical transmission over long distances, and then stepped down to any voltage required. As electricity expanded into every aspect of life, alternating current offered a flexibility that direct current could not hope to match. By 1917 more than 95 percent of the electricity generated in the United States would be alternating current.21

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