Aspire | Action | Acquire
Aspire | Action | Acquire

Powering Up

Thomas Edison can claim to have been the first person to have his name in lights at Crystal Palace, London in 1882. Some one thousand lamps spelled out E-D-I-S-O-N along the viaduct system.[1] That very same year electrification began its rapid replacement of coal-gas illumination in New York. As a consequence of the English Parliament’s adoption of an anticommercial Electric Lighting Act, however, much of London remained in the relative darkness of coal-gas lighting for another half-century. At the same time, Edison was exploiting the virtues of electrification J.D. Rockefeller was arguably building the world’s first global brand, Standard Oil, to refine and distribute kerosene used for indoor lighting.

Unlike the so-called Robber barons of his era, Edison was largely revered by American public. By contrast, Rockefeller’s Standard Oil fell victim to the “muckraker” press and a journalist whose oil producer father refused a takeover offer from the oil magnate. Rockefeller’s crime was to make kerosine lighting affordable to the general population by monopolising the industry and becoming inordinately rich as a consequence.  Today, the internet behemoths’ founders face no less public admonishment for refining and distributing the invention of the world wide web by Tim Berners-Lee at no cost to financial cost to users.

The Edison Light company was formed in 1878 by associates of the Gilded Age generation banker J. P. Morgan. Edison was awarded $250,000 in stock and promised a guaranteed minimum share of annual royalties plus other personal allowances.[2] Fifty years after his invention of the incandescent lamp a public commemoration in Edison’s honour was organized by Henry Ford and US President Hoover. At a sit-down candle lit dinner, other important business and cultural identities to attend included Walter Chrysler, George Eastman, J. P. Morgan, John D. Rockefeller, Jr., Adolph Ochs Charles Schwab, and Orville Wright.[3] Of the attendees, Morgan was no more liked than Rockefeller.

In 1895 a venture into mining caused Edison to liquidate all of his stocks in General Electric, and from which his name had been dropped, to fund a venture into iron ore mining. The timing could not have been worse – the 1890s recession. The 1890s recession was the consequence of overinvestment and overspeculation in railroads which were the largest customer of steel. It was the want to be as wealthy as Andrew Carnegie, intimated in the Edison biography by Edmund Morris, that near bankrupted the inventor.[4] Meanwhile, Carnegie was investing to undermine collapsing prices for steel by improving operating efficiencies of his mills. At the time publicly traded steel stocks of his rivals languished.

What is significant about this Edison’s mine in Ogdensburg, New Jersey, was that when forced to lay off workers much of the mill operated with a small contingent of workers;[5] a real testimony to Edison’s technical abilities that preceded Henry Ford’s accolades as the father of mass production. For all his technical ability, however, Edison was unable to compete with a deal struck by Carnegie and Rockefeller. In Hendrick’s biography of Andrew Carnegie, Rockefeller is quoted for being astonished “that the steelmakers had not seen the necessity of controlling their ore supply,”[6] as he had done with oil.

Carnegie had bought up leases in the Mesabi but knew better than go head-to-head with Rockefeller, who must have felt somewhat similar in agreeing to a supply contract that favoured the canny Scot. The Mesabi leases would in time be acquired by Morgan’s U.S. Steel and become its most valuable asset. Edison’s prolific inventing made him a candidate for both repeated successes and failures interspersed. Whether or not the Current War between AC and DC power of the late 1880s and early 1890s, that Edison lost to George Westinghouse, incited his investment in mining is not known. Like Edison, Westinghouse’s electric business was consumed by Morgan’s financial might.

[1] Edmund Morris, Edison (New York: Random House, 2019), 419.

[2] Edmund Morris, Edison (New York: Random House, 2019), 565-6.

[3] Cary O’Dell, “Light’s Golden Jubilee (October 21, 1929),” national registry, (2005).

[4] Edmund Morris, Edison (New York: Random House, 2019), 324, 332.

[5] Edmund Morris, Edison (New York: Random House, 2019), 332-3.

[6] 1. Burton J. Hendrick, The Life of Andrew Carnegie (London: William Heinemann Ltd, 1933), 391.