chapter26.txt

CHAPTER XXVI







EDISON IN COMMERCE AND MANUFACTURE







AN applicant for membership in the Engineers'



Club of Philadelphia is required to give a brief



statement of the professional work he has done.



Some years ago a certain application was made, and



contained the following terse and modest sentence:











"I have designed a concentrating plant and built a



machine shop, etc., etc.              THOMAS A. EDISON."











Although in the foregoing pages the reader has been



made acquainted with the tremendous import of the



actualities lying behind those "etc., etc.," the narrative



up to this point has revealed Edison chiefly in



the light of inventor, experimenter, and investigator.



There have been some side glimpses of the industries



he has set on foot, and of their financial aspects, and



a later chapter will endeavor to sum up the intrinsic



value of Edison's work to the world. But there are



some other interesting points that may be touched on



now in regard to a few of Edison's financial and commercial



ventures not generally known or appreciated.







It is a popular idea founded on experience that an



inventor is not usually a business man. One of the



exceptions proving the rule may perhaps be met in



Edison, though all depends on the point of view.



All his life he has had a great deal to do with finance



and commerce, and as one looks at the magnitude of



the vast industries he has helped to create, it would



not be at all unreasonable to expect him to be among



the multi-millionaires. That he is not is due to the



absence of certain qualities, the lack of which Edison



is himself the first to admit. Those qualities may not



be amiable, but great wealth is hardly ever accumulated



without them. If he had not been so intent



on inventing he would have made more of his great



opportunities for getting rich. If this utter detachment



from any love of money for its own sake has not



already been illustrated in some of the incidents



narrated, one or two stories are available to emphasize



the point. They do not involve any want of the higher



business acumen that goes to the proper conduct



of affairs. It was said of Gladstone that he was the



greatest Chancellor of the Exchequer England ever



saw, but that as a retail merchant he would soon



have ruined himself by his bookkeeping.







Edison confesses that he has never made a cent



out of his patents in electric light and power--in



fact, that they have been an expense to him, and thus



a free gift to the world.[18] This was true of the Euro-



pean patents as well as the American. "I endeavored



to sell my lighting patents in different countries



of Europe, and made a contract with a couple of



men. On account of their poor business capacity



and lack of practicality, they conveyed under the



patents all rights to different corporations but in



such a way and with such confused wording of the



contracts that I never got a cent. One of the companies



started was the German Edison, now the great



Allgemeine Elektricitaets Gesellschaft. The English



company I never got anything for, because a



lawyer had originally advised Drexel, Morgan & Co.



as to the signing of a certain document, and said it



was all right for me to sign. I signed, and I never



got a cent because there was a clause in it which



prevented me from ever getting anything." A certain



easy-going belief in human nature, and even a



certain carelessness of attitude toward business



affairs, are here revealed. We have already pointed



out two instances where in his dealings with the



Western Union Company he stipulated that payments



of $6000 per year for seventeen years were to



be made instead of $100,000 in cash, evidently forgetful



of the fact that the annual sum so received was



nothing more than legal interest, which could have



been earned indefinitely if the capital had been only



insisted upon. In later life Edison has been more



circumspect, but throughout his early career he was



constantly getting into some kind of scrape. Of one



experience he says:











[18] Edison received some stock from the parent lighting company,



but as the capital stock of that company was increased from time



to time, his proportion grew smaller, and he ultimately used it to



obtain ready money with which to create and finance the various



"shops" in which were manufactured the various items of electric-



lighting apparatus necessary to exploit his system. Besides, he



was obliged to raise additional large sums of money from other



sources for this purpose. He thus became a manufacturer with



capital raised by himself, and the stock that he received later, on



the formation of the General Electric Company, was not for his



electric-light patents, but was in payment for his manufacturing



establishments, which had then grown to be of great commercial



importance.















"In the early days I was experimenting with metallic



filaments for the incandescent light, and sent a



certain man out to California in search of platinum.



He found a considerable quantity in the sluice-boxes



of the Cherokee Valley Mining Company; but just



then he found also that fruit-gardening was the thing,



and dropped the subject. He then came to me and



said that if he could raise $4000 he could go into some



kind of orchard arrangement out there, and would



give me half the profits. I was unwilling to do it,



not having very much money just then, but his persistence



was such that I raised the money and gave



it to him. He went back to California, and got into



mining claims and into fruit-growing, and became



one of the politicians of the Coast, and, I believe, was



on the staff of the Governor of the State. A couple



of years ago he wounded his daughter and shot himself



because he had become ruined financially. I



never heard from him after he got the money."







Edison tells of another similar episode. "I had two



men working for me--one a German, the other a Jew.



They wanted me to put up a little money and start



them in a shop in New York to make repairs, etc. I



put up $800, and was to get half of the profits, and



each of them one-quarter. I never got anything for



it. A few years afterward I went to see them, and



asked what they were doing, and said I would like



to sell my interest. They said: `Sell out what?'



`Why,' I said, `my interest in the machinery.' They



said: `You don't own this machinery. This is our



machinery. You have no papers to show anything.



You had better get out.' I am inclined to think that



the percentage of crooked people was smaller when



I was young. It has been steadily rising, and has got



up to a very respectable figure now. I hope it will



never reach par." To which lugubrious episode so



provocative of cynicism, Edison adds: "When I was



a young fellow the first thing I did when I went to



a town was to put something into the savings-bank



and start an account. When I came to New York



I put $30 into a savings-bank under the New York



Sun office. After the money had been in about two



weeks the bank busted. That was in 1870. In 1909



I got back $6.40, with a charge for $1.75 for law



expenses. That shows the beauty of New York



receiverships."







It is hardly to be wondered at that Edison is rather



frank and unsparing in some of his criticisms of shady



modern business methods, and the mention of the



following incident always provokes him to a fine



scorn. "I had an interview with one of the wealthiest



men in New York. He wanted me to sell out my



associates in the electric lighting business, and offered



me all I was going to get and $100,000 besides. Of



course I would not do it. I found out that the reason



for this offer was that he had had trouble with Mr.



Morgan, and wanted to get even with him." Wall



Street is, in fact, a frequent object of rather sarcastic



reference, applying even to its regular and probably



correct methods of banking. "When I was running



my ore-mine," he says, "and got up to the point of



making shipments to John Fritz, I didn't have capital



enough to carry the ore, so I went to J. P. Morgan &



Co. and said I wanted them to give me a letter



to the City Bank. I wanted to raise some money.



I got a letter to Mr. Stillman; and went over and told



him I wanted to open an account and get some loans



and discounts. He turned me down, and would not



do it. `Well,' I said, `isn't it banking to help a man



in this way?' He said: `What you want is a partner.'



I felt very much crestfallen. I went over to a bank



in Newark--the Merchants'--and told them what I



wanted. They said: `Certainly, you can have the



money.' I made my deposit, and they pulled me



through all right. My idea of Wall Street banking



has been very poor since that time. Merchant banking



seems to be different."







As a general thing, Edison has had no trouble in



raising money when he needed it, the reason being



that people have faith in him as soon as they come



to know him. A little incident bears on this point.



"In operating the Schenectady works Mr. Insull and



I had a terrible burden. We had enormous orders and



little money, and had great difficulty to meet our pay-



rolls and buy supplies. A...