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The Triangle of Technology in the Golden Age Invention, Investment and Drive

Monica Clemens

October 13, 2019 Arizona State University Professor: Dr. Schnoll

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The Triangle of Technology in the Golden Age

Our inventors, investors and engineers worked together to advance during America’s golden age of technology by creating significant partnerships founded on original inventions. These partnerships created a dynamic triangle between inventors, investors and engineers that were pivotal to each other's success. As networks became more elite, business arrangements became more tactical and the world started to notice that not only was America blossoming, it was efficient and ingenuous too.

Introduction

Networks are defined as the many tributaries leading tangible or intangible information along a medium to one main campus. The main campus then disseminates and reassembles information for delivery to its grid or single recipient. Tangible networks could include physical mediums such electricity harnessed by wire and pole, salmon and creek, or star and moon, while intangible networks could be high frequency transmissions, or sub-atomic particles floating in the air. The most profitable inventions of technology during the Golden Age were raw, intangible, conceived by a single thought, and difficult to explain to investors. Nonetheless, whether investors understood ideas or not, they raised the capital necessary to back inventions.

Promoting Complex Networks to Raise Capital

The triangle of inventor, investor and engineer came together in various patterns before the element of electricity was introduced into the competitive fold. As America expanded versions of great partnerships were led by visionary investors who could convince people to put up their fortunes for just cause. In 1817 New York’s Governor Dewitt Clinton nearly single handedly convinced New Yorkers to fund and build the Erie Canal, a water network that would monopolize agricultural shipping from the Great Lakes to New York. Clinton harped on New Yorkers (in his Atticus papers) that “no produce of the soil (could) bear the expense of THE TRIANGLE OF TECHNOLOGY IN THE GOLDEN AGE 3

transportation by wagon from the western states to a navigable river.” The concept of the Canal was sold to New Yorkers to accommodate “millions of people beyond the western limits of this State” (Atticus. 1816, p. 1). Clinton mesmerized investors to bet millions in favor of building the Canal across 363-miles of dense forest and rock. The alternative, he argued, was to place “the state of Ohio and all our western territory into the arms of Great Britain for all commercial and useful purposes,” (Atticus. 1816, p. 2). Keeping prosperity away from Great Britain sealed the deal with New Yorkers and the State came up with the money.

Whether investors understood the theory of the water network or not, the vision and promise of significant control of intrastate commerce and the monopolization of the Hudson was enough to make New Yorkers invest. Once money was injected into the concept of the Canal, German masons and immigrant workers created the marvel of civil engineering. They moved mud by the ton, cleared tree stumps, shooed away mosquitos, and worked nearly around the clock with primitive equipment and unproven designs. In all, the 363-mile Canal was a speculative miracle, and at the height of its career, the Erie controlled thousands of shipping boats from the Great Lakes to Hudson.

Theories and inventions did not always have great mascots, which was to the detriment of inventors who seemed born to tinker rather than do business. For example, in 1791, when French telegraph engineer Claude Chappe developed an optical telecom relay system, or pendulum with arms, it was usurped during wartime the . Chappe’s telegraph grew so popular that it became difficult for the inventor to control. Eventually, post-war adopted the telecommunication network with little fanfare to Chappe. (Holzmann & Bjorn. 1995). Nevertheless, Chappe was the root inventor and developer of the optical relay telegraph. But Chappe’s invention needed perfecting to survive American ingenuity and the storm that was brewing with electricity.

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Samuel Morse, an artist from Yale, built upon the French telegraph model a single wire telegraph system that would transmit his language of dots and dashes down the wire in relay. He filed his first patent in France in 1838, forty-seven years after Claude Chappe invented the pendulum telegraph. (Morse. 1914, Vol. 2, p. 92). Morse also battled for rights to his invention amid fast growing piracy and would be inventors. These battles “proved itself to be an upward” fight “as claimants arose on every side” (Morse. 1914, Vol. 2, p. 1). According to Morse (1914) inventors learned to fight the disdain of piracy by creating dynamic partnerships that were built on “virtue, steadfastness, integrity, and loyalty,” (Morse. 1914, Vol. 2, p. 1).

As electricity evolved it proved to be the most popular conduit for inventors. Along with it came great inventors, electrical and mechanical engineers who maintained cordial and necessary relationships with investors. was unlike Chappe or Morse, as he was not a single-patent-inventor. Edison was many times a work-for-hire engineer that was paid to devise ways around patents holder’s rights. Edison was unusual and competitive in the inventor’s world, because he did not rely on one invention to make ends meet. During Edison’s lifetime “he received nearly 1,100 patents” for inventions, which he sold in quantity to American speculators. (Adair. 1996, p. 11).

The son of a Canadian political refugee, and at best home schooled, Edison joined the workforce selling candy and newspapers on the railroad between Lake Huron and Lake Erie

(Adair. 1996, p. 17). At age thirteen, Edison was taken under the wing of a Michigan stationmaster who taught him the basics of . With the increased cash-flow from the money he made working the job of a “tramp telegrapher” Edison was able to finance his own experiments (Adair. 1996, p. 30). He traveled with portable chemical labs and experimented between long shifts working as a telegraph operator in “filthy, cramped, cluttered offices” filled with other telegraph operators and their crude humor (Adair. 1996, p. 49). Edison was eager to invent and to sell patents, and his self-education gave him an unhinged kaleidoscope perspective.

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He also liked to tinker with patents held by other inventors. In his patent re-dos, Edison had an audience.

In 1873, while working for competing business entities, Thomas Edison approached William Orton, the President of Western Union, about an idea Edison had to perfect Joseph Stearns’ duplex messaging invention. Since Western Union held the rights to Stern’s invention, it was a matter of protocol to receive Western Union’s blessing. Within the year Edison perfected Sterns duplex, by utilizing the impulses in grey space on the wire. He then created a derivative of the duplex system that could send “four messages at once, two in each direction”

(Adair. 1996, p. 50).

Yet even though Orton bankrolled Edison’s duplex experiments, he was not trustworthy about paying him. Orton “haggled for months on the price” of Edison’s device and “drove him into the arms” of one of Western Union’s many “sworn enem(ies),” Jay Gould, who was even less gentlemanly than Orton (Adair. 1996, pp. 50-51). Thus, as competitive innovation rose, the antics and reputations of ruthless businessmen became more obvious.

In many ways Edison was vulnerable and unskilled in the dark-side of business. He was easily drawn into legal battles from copying or creating derivative patents, which kept his bank account full. He learned to “leave bills unpaid until creditors were [ ] pounding at the door,” and became dependent on the purse of Western Union to finance his inventions. Further, he was reliant upon the skills of his dutiful drafters and engineers who could physically build upon his theoretic imaginings. Fortunately for Edison he surrounded himself with teams of engineers who holed up with him in his lab and kept his “impetuous style” under control. Batchelor and Kruesi were two members in Edison’s Menlo Park laboratory that could work on multiple inventions with Edison while keeping him focused. They were reliable, secretive and found to be Edison’s “greatest resource” because they could “translate Edison’s rough ideas into detailed drawings . . .” (Adair. 1996, pp. 56-57).

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Nonetheless, the marvel of business competitors fighting over patents and inventions, continued to dominate the telegraph business, and the cast of characters expanded. In the case of Orton’s relationship with Edison, rather than create a trustworthy bond with the important inventor, Orton (and later Jay Gould) reduced payments to the inventor, attempted to restrain and dominate the market by buying patents, controlling production, and owning majority shares of telegraph inventions.

As the invention of the began to take shape on the horizon, the telegraph and Western Union scrambled for control. Western Union bet that Edison would “come up with a version that would get around Bell’s patents” (Adair. 1996, p. 60) because “Bell’s telephone was a relatively simple device, easily imitated” (Garnet. 1985, p. 15). But there were more inventions to come from Edison besides copying and building upon Bell’s telephone patent.

One day while laboring for his investors experimenting with the telephone, Edison got the “idea of attaching a pin to a diaphragm and placing a ribbon of wax paper beneath it.” He then “rigged up an instrument hastily and pulled a strip of paper through it, at the same time shouting ‘Halloo!’” (Adair. 1996, p. 60). Thus, while attempting to tinker with Bell’s patent, Edison discovered he could use an electromagnetic current to record sound on wax paper and invented the phonograph. Now Edison had a new profitable discovery that Western Union could not control. Further, as “ample as Western Union’s resources were, they provided no sure defense against America’s most ruthless financer . . .” Jay Gould, who was busy building “a rival telegraph system using the newly built Bell exchanges for local connections” (Garnet. 1985, p.

45).

A Company Built Upon a Gentleman’s Agreement

In contrast to short termed business relationships investors had with inventors and engineers, there also existed more sophisticated family styled business partnerships. Boston investors Thomas Sanders and Gardiner Green Hubbard doted over as a

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prized electrical engineer. Like many early investors, they used their own personal fortunes and household collateral to finance Bell. But Bell was “not a trained scientist. His discoveries resulted more from insight, persistence, and a keen sensitivity to human needs” (Bell Laboratories. 1975, p. 883). Bell vacillated between his research on the telegraph and the ‘wavering band of light’ by flame and sound that he thought might help the deaf hear. He was fascinated with the bones of the human ear donated to him for his research by his friend Dr. Clarence Blake (Bell Laboratories. 1975, p. 4). It was Bell’s “sensitivity to the human factor . . .” that “conceived the instrumentality that would leap across this operational barrier and quickly outstrip the telegraph in popularity” (Bell Laboratories. 1975, p. 2).

However, Bell’s deviation from inventing new ways to compete with the telegraph was not with the consent of his small circle of investors, and they let it be known. Sanders “a leather merchant of Salem, Massachusetts . . . felt that the telegraph experiments promised more immediate prospects of success” and complained about any research that was not telegraph worthy (Bell Laboratories. 1975, p. 25).

Regardless of the competitive drive of his investors and their demands for telegraph patents, Bell was steadfast in his to discoveries for the deaf. After many experiments with the human ear’s inner workings, Bell moved his theoretical research to another medium, wire. He was convinced that “if we could find in the electrical current any undulations . . . we observe in the air . . . it would be possible to transmit sound” down the wire (Bell Laboratories. 1975, p. 5). Bell believed that “magneto electricity (could) create such a current” and used “a piece of steel, a good chunk of magnetized steel, and vibrate it in front of the pole of an electromagnet” (Bell Laboratories. 1975, p. 5). (Electromagnets were the medium of choice for electricians, and mainly , who filed his patent for the Electro-Magnetic Telegraph System in France nearly forty years before the invention of the telephone (Morse. 1914, Vol. 2, p. 92)).

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Watson Understood Bell’s Mind

In 1874, while in their Boston workshop tinkering with wire and reeds in search of undulations, Watson readjusted one of the contact points of a sound reed and separated a strip of magnetized steel from the other reeds. While making that slight adjustment Watson caused the vibrating reed to actually ‘sound-shape’ Bell’s electrical current. Just as Bell imagined, the human voice undulated down the reed (Bell Laboratories. 1975, p. 9).

Upon the discovery the of the ‘electric voice’ the telephone patent was illustrated and signed by Bell. Nevertheless, when Bell went to file his patent in the United States and England concurrently, it was not at the urgency of Hubbard and Sanders. The telephone patent was to them further delay in their competition with the telegraph. Thus, when Bell’s friend from Brantford was too embarrassed to deliver Bell’s telephone patent to England “because of fear or ridicule” (Bell Laboratories. 1975, p. 9) it was as a courtesy that Hubbardtook sympathy and filed Bell’s telephone patent in the United States. Bell was only twenty-nine years old when he was issued one of the most significant patents in all history (Bell Laboratories. 1975, p. 9).

Interestingly, neither Hubbard nor Thomas Sanders held any controlling interest in the telephone patent, nor did they have an agreement to share in derivative inventions stemming from Bell’s telephone patent. In fact, on paper their interest holdings were “limited to the telegraph” and “the written agreement of this Association did not speak of the telephone or refer to it in a distinctive way” (Bell Laboratories. 1975, p. 26).

On more than one occasion Hubbard “offered to relinquish his rights in the telephone”

(Bell Laboratories. 1975, p. 26) even though he had no right to it. But Bell was a man of enormous sensitivity and “took the position that the telephone was to be included” in the written agreement of the Bell Patent Association (Bell Laboratories. 1975, p.26). Bell refused to accept Hubbard’s offer to relinquish his rights to the telephone patent cache. This was a wise business

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decision on the part of Bell, because it wasn’t long before the small triangle of technology learned how valuable the patent was to become.

Although Bell did not have to agree to share his telephone patent, he did. This was another great moment in the foundational history of AT&T as the miracle of the “gentleman’s agreement” would keep the invention intact and unified. (Bell Laboratories. 1975, p. 26). Bell’s business decision to share his telephone patent created a loyalty bond that would hold the budding company together and maintain business operations for the coming fight with Western Union. The creation of this dynamic partnership with his mechanical engineer Thomas Watson was also pivotal to the creation of practical commercial devices. In the patent arrangement, Bell was the electrician and inventor, while Watson (who would own one tenth of the invention) was the mechanical engineer, which suited Watson perfectly because he would rather work on the puzzle than the business and “had little to do with purely business affairs” (Bell Laboratories. 1975, p. 28).

A Family Affair

“The Bell Company of 1877 was more like a family partnership than modern business enterprise” and “officers and employees of the company had known each other personally for some time” (Garnet. 1985, p. 14). Nevertheless, Hubbard and Sanders had to find ways to raise capital for expansion.

Hubbard, a lawyer by trade, created a cache of Bell legal instruments that would encourage the rapid development of Bell’s telephone system. Hubbard devised and organized a board of managers for Bell Patent Association; created exclusive rights to certain territory; created the legal documentation necessary for leasing and licensing telephone lines and equipment; and ingeniously created royalties for the company and major incentives for sales agents (Bell Laboratories. 1975, p. 28). But even with his business acumen Hubbard was no match for the money and organization of Western Union, who was already building a war chest

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of derivative patents and duplicitous telephone networks. “The Bell Company was, however, determined and well prepared to defend its patented technology” and “detailed leasing records prepared by local agents aided in identifying the existence of bogus instruments” that were in production as . The detailed documentation kept by sales agents gave Hubbard and his lawyers the ability to “ultimately prosecute over six hundred infringement suits” and win (Garnet. 1985, p. 15). Had Bell withheld his telephone patent from Hubbard and Sanders, he would have lost control of his telephone patent early on and never would have been able to muster the front-line defense that Hubbard provided (Bell Laboratories. 1975, p. 9).

Yet to survive the salacious appetite for business competition that Western Union had for its competitors, Hubbard realized he had to relinquish a certain amount of control and incorporate. He sought and found a good General Manager in Theodore N. Vail. Thus, Hubbard was not an ego centric businessman, but a man interested in the success of his small company.

Vail, a seasoned railroad mail clerk, proved to be well organized, even tempered and a strong strategist. He quickly formed a great barrier between Bell Telephone and its surging competitor, Western Union. Vail became Bell Telephone’s “master of organization, and leader of limitless courage and resources” (Bell Laboratories. 1975, p. 29). The brilliance of Hubbard, Vail and Forbes soon created an unstoppable force as the expanded. With the right mixture of investment, invention and engineering the “spread of the telephone over the

United States was spectacular.” (Bell Laboratories. 1975, p. 29).

These samples of dynamic partnerships in the age of technology prove to a certain degree that investors, inventors and engineers counted on each other for success and competition. In some instances, the promotion of wealth led to the creation of something great, or inventors worked for profit; however, in nearly all instances research was based on “the effort of the mind to comprehend relationships which no one has previously known” (Bell Laboratories. 1975, p. 883) but ultimately would see.

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References

Adair, Gene. (1996). Thomas Alva Edison, Inventing the Electric Age. Oxford Univs. Press, pp. 48-57.

Clinton, DeWitt. (1816). Remarks on the Proposed Canal, from Lake Erie to the Hudson River, by Atticus. [Electronic Resource]. Printed by Samuel Wood & Sons, No. 357.

SearchWorks, searchworks.stanford.edu/view/8337066, p. 1-2.

Bell Laboratories. Fagen, M.D. (Ed.). (1975). A History of Engineering and Science in the , pp. 4-58.

Garnet, R. W. (1985). The Telephone Enterprise: the Evolution of the Bell System's Horizontal Structure, 1876-1909. Johns Hopkins University, pp. 29-44.

Holzmann, G. J., and B, Pehrson. (1995). The Early History of Data Networks. Digital Library, ACM, dl.acm.org/citation.cfm?id=179254.

Morse, E. L. (Ed.). (1914). Samuel F. B. Morse, His Letters and Journals, Edited and Supplemented by his Son Edward Lind Morse. Invention of The Telegraph. (Volume 2). Houghton Mifflin company, The Riverside Press Cambridge, p. 1, p. 92.