Edison and the Electric Chair_ A Story of Light and Death - Mark Essig [117]
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,