Speaker 1: Welcome to Tech Stuff, a production from my Heart Radio.
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio
Speaker 1: and I love all things tech and I am currently
Speaker 1: on vacation. If you are in the Disney World area,
Speaker 1: you might see me. Um. By the way, it was
Speaker 1: a big decision to actually go through with this vacation
Speaker 1: and to go to Disney World, one that I'm still
Speaker 1: conflicted over. But I am fully vaccinated, as is my
Speaker 1: entire family, and we're all going to be super precautious,
Speaker 1: you know, making sure that we wash our hands thoroughly,
Speaker 1: and we were wearing masks and all that kind of stuff.
Speaker 1: But I'd be lying to you if I said I
Speaker 1: was comfortable with this, but hopefully we have a fun
Speaker 1: time and I were turn home healthy and happy, and
Speaker 1: um yeah, that's that's the best we can hope for.
Speaker 1: But I didn't want to leave you without any episodes
Speaker 1: while I'm away, and so I thought something that would
Speaker 1: be interesting to do. What to be revisit a series
Speaker 1: of episodes I did in September of two thousand nineteen,
Speaker 1: and it was a deep dive into the history of
Speaker 1: General Electric a k a. G And the reason I
Speaker 1: wanted to bring these back for this week is that
Speaker 1: we recently heard that g E is going to split
Speaker 1: into three separate companies, one that will focus on healthcare,
Speaker 1: one that will focus on energy, and one that will
Speaker 1: focus on aviation. It will be the aviation one that
Speaker 1: retains the name GE, by the way, so it's kind
Speaker 1: of the end of an era, and I thought it
Speaker 1: would be interesting to go back and listen to this
Speaker 1: series of episodes where we do a deep dive on
Speaker 1: the history of g E. So sit back and relax
Speaker 1: and listen to The Founding of GE, originally published on
Speaker 1: September second, two thousand nineteen. In mid August two thousand nineteen,
Speaker 1: a financial analyst named Harry Marcopolis released a one hundred
Speaker 1: seventy five page report alleging that g E, that is,
Speaker 1: General Electric, the venerable company that is more than a
Speaker 1: century old, was secretly on the verge of insolvency. He
Speaker 1: claimed the company was using accounting tricks to hide an
Speaker 1: enormous threat to its very existence, something akin to the
Speaker 1: Shenanigan's in Ron polled years ago, and giving Marcopolis some
Speaker 1: credibility was his own history. He had raised warning flags
Speaker 1: about Bernie Madeoff before the world found out about Madeoff's
Speaker 1: Ponzi scheme. And to learn more about Ponzi schemes, you
Speaker 1: should look up the classic stuff you should know episode
Speaker 1: all about It. It's great, particularly with the way Chuck
Speaker 1: adopted It's a Ponzi scheme into that and subsequent episodes.
Speaker 1: Now as I record these episodes, the report and the
Speaker 1: responses to it are still part of the news cycle.
Speaker 1: GE and some third party analysts have disputed Marcopolis's findings,
Speaker 1: claiming that Marcopolis himself actually stands to earn a lot
Speaker 1: of money by taking down GE. And Marcopolis has said
Speaker 1: he was hired by a Hedge fund to look into
Speaker 1: GES practices, but he refuses to name the fund as
Speaker 1: of the recording of this podcast. Meanwhile, some other third
Speaker 1: parties seem to agree with at least some of Marcopolis's findings,
Speaker 1: and GE has been under increased scrutiny for its accounting
Speaker 1: practices over the last few years. So there are a
Speaker 1: lot of unanswered questions around this, and it's by no
Speaker 1: means a settled matter. I don't know if Marcopolis's allegations
Speaker 1: reflect reality, and in fact, if I'm being totally honest,
Speaker 1: I don't even understand all of those allegations. And in
Speaker 1: the interest of full disclosure, I have not read the
Speaker 1: full one report, but I did think it would be
Speaker 1: good to do a full rundown on the history of
Speaker 1: General Electric. It is an incredibly influential company, and it
Speaker 1: spans many industries it has had and and it's heart
Speaker 1: to stress how big an impact it has had on
Speaker 1: the history of the United States in particular and tech
Speaker 1: in general. Now I should also add that back in
Speaker 1: two thousand twelve, Chris Palette and I recorded three episodes
Speaker 1: about the history of GE. But Tech Stuff was a
Speaker 1: different kind of show back in those days, so I
Speaker 1: thought it might be good to take a deeper dive
Speaker 1: into the history and see how GE shaped technology. And
Speaker 1: beyond that being said, if I were to do a
Speaker 1: comprehensive history on the company and all its subsidiaries, this
Speaker 1: series last a dozen episodes or more. So to avoid
Speaker 1: making this episode and this podcast turned into GE Stuff,
Speaker 1: I'm going to try and focus on what I think
Speaker 1: are some of the most important historical moments of GE,
Speaker 1: and a lot of that is in those early years.
Speaker 1: So let's go back to where it all began. And
Speaker 1: like many corporate histories, this involves going back to older
Speaker 1: companies that would form the foundation for the one we
Speaker 1: actually want to talk about. So strap in guys and
Speaker 1: women and all others. I don't mean to lump everybody
Speaker 1: in under the term guys. Anyway, we all know about
Speaker 1: Thomas Edison, right. He was an inventor, he was an entrepreneur,
Speaker 1: He was a master at self promotion and more. And
Speaker 1: some folks might throw in some less complementary labels in there,
Speaker 1: perhaps suggesting he was also a thief, or if that's
Speaker 1: going too far, someone willing to take credit for the
Speaker 1: work of people who are working beneath him. But whatever
Speaker 1: your opinion of the fellow, Edison got stuff done. In
Speaker 1: the eighteen seventies, Edison was working on the light bulb,
Speaker 1: and no, he didn't invent the light bulb, but that's
Speaker 1: a story for another podcast. In fact, my former co
Speaker 1: host Chris Poulett and I actually did cover that story
Speaker 1: in an episode titled tech Stuff Gets a Bright Idea,
Speaker 1: which published on October twenty nine, two thousand twelve. But
Speaker 1: Edison did make improvements on the lightbulb, working with his
Speaker 1: engineers to discover a material to serve as a suitable
Speaker 1: filament too in condess, brightly enough, and long enough to
Speaker 1: be a practical use. In eighteen seventy eight, Edison founded
Speaker 1: a company to concentrate on that goal. It was the
Speaker 1: Edison Electric Light Company. He had some big names in
Speaker 1: US history, particularly US financial history, as his investors, folks
Speaker 1: like the Vanderbilts and JP Morgan. Now Morgan is going
Speaker 1: to become very important to this story. Now. At the time,
Speaker 1: he had yet to find a suitable approach. The lightbulbs
Speaker 1: he made would burn out in just a few hours.
Speaker 1: The following year, in eighteen seventy nine, his company produced
Speaker 1: a lightbulb able to last for forty hours. Not superb
Speaker 1: by any means, but a real sign of progress, and
Speaker 1: Edison boldly stated that his company would make electricity affordable
Speaker 1: enough so that only the wealthy would ever burn candles.
Speaker 1: That same year, again, eighteen seventy nine, for those who
Speaker 1: have forgotten, a couple of teachers created their own company.
Speaker 1: Edwin James Houston was a physics teacher, and Alihu Thompson
Speaker 1: taught chemistry and mechanics at the Central High School for
Speaker 1: Boys in Philadelphia. They created a company called the American
Speaker 1: Electric Company in New Britain, Connecticut, with the help of
Speaker 1: some local investors. In eighty three, a different group of investors,
Speaker 1: this time from Massachusetts, bought out the company from the
Speaker 1: original group of investors and the company got a new name,
Speaker 1: the Thompson Houston Electric Company. Thompson would head up the
Speaker 1: research and development department, which was called the Model Room.
Speaker 1: A fellow named Charles A. Coffin, the head of the investors,
Speaker 1: would lead the company and act as a sort of
Speaker 1: president and chief financial officer, while Elwyn W. Rice led
Speaker 1: the manufacturing part of the business. Both of those names
Speaker 1: will be important for Ge and Charles Coffin wasn't a
Speaker 1: physicist by nature. No, he was a man with a
Speaker 1: lot of soul. And by that I meant he was
Speaker 1: a shoe manufacturer, as a dad joke for you. So
Speaker 1: where many of his fellow investors. They were all from
Speaker 1: the shoe manufacturing industry, and they were all located in Lynn, Massachusetts,
Speaker 1: and they pulled their money to purchase this burgeoning, this
Speaker 1: this blossoming electric utility company, the Thompson Houston Electric Company
Speaker 1: would relocate its headquarters to Lynn, Massachusetts, and get back
Speaker 1: to that company in just a second. Edison was not
Speaker 1: just working on lamps in the eighteen seventies and eighteen eighties.
Speaker 1: He was also creating some of the first generators. These
Speaker 1: are devices that would convert mechanical energy into electrical energy.
Speaker 1: On December seventeen eighty, he founded the Edison Electric Illuminating Company.
Speaker 1: In eighteen eighty two, he was responsible for building and
Speaker 1: operating the first steam generated power station in London to
Speaker 1: power street lamps and a few private homes that were
Speaker 1: not far from the power plant. In New York, he
Speaker 1: was responsible for creating an electric power distribution system called
Speaker 1: Pearl Street Station, which supplied electricity to fifty nine whole
Speaker 1: customers in Lower Manhattan. Now, at the time, not everyone
Speaker 1: was sold on the idea of this new fangled electricity
Speaker 1: replacing candles and gas lamps, so as an incentive, Edison's
Speaker 1: company offered the first three months of service at no charge.
Speaker 1: He also began to acquire smaller businesses that were likewise
Speaker 1: getting into the electrical power generator game, and by eighteen
Speaker 1: ninety this motley group of companies merged to form Voltron,
Speaker 1: and by Voltron, I mean they became the Edison General
Speaker 1: Electric Company. It was this company that in eight installed
Speaker 1: electrical wires and switching equipment in the United States White House,
Speaker 1: and that made Benjamin Harrison, the twenty third President of
Speaker 1: the United States, the first US president to have electricity
Speaker 1: in the White House. Back to the Thompson Houston Electric Company.
Speaker 1: Like Edison, Charles Coffin was determined to be a big
Speaker 1: player in the electricity generating business. He had led Thompson
Speaker 1: Houston to go international and he bought out a British
Speaker 1: company called the Brush Company, which did not sell brushes. No,
Speaker 1: it was actually founded by a guy named Charles Brush,
Speaker 1: and it was a company that had patents for stuff
Speaker 1: like dynamos and had been in litigation with Thompson Houston
Speaker 1: Electric Company over some technologies. But we all know the
Speaker 1: old saying, right, if you can't beat them, by them,
Speaker 1: and that's what Thompson Houston Electric Company did. So both
Speaker 1: Edison General Electric Company and the Thompson Houston Electric Company
Speaker 1: were buying up competitors and more importantly, patent holders. So
Speaker 1: they each had dozens of patents to their name, and
Speaker 1: they were quickly becoming the dominant players in electricity generation
Speaker 1: and distribution in the Northeast United States, and there was
Speaker 1: just enough overlap to make business tricky for both companies.
Speaker 1: Without stepping on the toes of the other, they could
Speaker 1: have become great rivals, and in fact they kind of were.
Speaker 1: Henry Villard, who was the president of Edison General Electric
Speaker 1: Thomas Edison, wasn't involved in the day to day operations
Speaker 1: of the company. Villard had an idea both Edison and
Speaker 1: Thompson Houston were in a bit of a cash crunch
Speaker 1: as the market was in a bit of a slump.
Speaker 1: In addition, because both companies owned dozens of patents, that
Speaker 1: made it hard to be the sole provider of any
Speaker 1: kind of electrical infrastructure. Business was too expensive. It was
Speaker 1: not just expensive to lay out the infrastructure, but you
Speaker 1: had all these legal battles that would come up because
Speaker 1: one company would allege that the other company was infringing
Speaker 1: on one or more patents. There were several lawsuits pending
Speaker 1: around patents, and there would likely be even more in
Speaker 1: the future. Villard wanted to solve all these problems by
Speaker 1: having the two companies merge. Edison reportedly hated this idea
Speaker 1: and advised against it. Villard felt that the Edison Company
Speaker 1: was in a dominant position and could effectively define the
Speaker 1: terms of the merger, and so he tried to move
Speaker 1: on ahead. Then we get back to JP Morgan, the financier.
Speaker 1: He had arrived at a similar conclusion regarding the merger,
Speaker 1: but he felt that the Thompson Houston Company was actually
Speaker 1: the one that was in a stronger position, and because
Speaker 1: Morgan was Mr. Money Bags, he went behind Villard's back
Speaker 1: and began wheeling and dealing to make the merger happen,
Speaker 1: but on very different terms than what Villard was thinking.
Speaker 1: Morgan spearheaded the effort to merge these two companies together
Speaker 1: to form a new entity, one that would become known
Speaker 1: as the General Electric Company and later g E. The
Speaker 1: headquarters for the company would be in Schenectady, New York,
Speaker 1: and Morrigan effectively removed Thomas Edison and Henry Villard from
Speaker 1: any sort of leadership role. Edison didn't even know about
Speaker 1: the merger until the day before it actually happened. Yikes,
Speaker 1: with their powers and patents combined, the two former competitors
Speaker 1: could rapidly expand throughout the Northeast and beyond and moreover,
Speaker 1: the merger meant that the electric utilities industry in the
Speaker 1: United States was now split between just two companies because
Speaker 1: General Electric companies had been swooped up, you know, all
Speaker 1: Thomas Houston and Edison Electric had brought up all these
Speaker 1: smaller utilities, as had Westinghouse, the other big competitor in
Speaker 1: the US. So now the electric utilities industry in the
Speaker 1: United States was a dowopoli. It was either General Electric
Speaker 1: or it was Westinghouse and General Electric and Westinghouse had
Speaker 1: been part of a patent pool agreement in eight so
Speaker 1: this was a big deal. It would also mean the
Speaker 1: end of the war of the currents between direct current
Speaker 1: and alternating current. I have a little bit more to
Speaker 1: say about that in a minute. Now. I'm of two
Speaker 1: minds about this merger that JP Morgan initiated. Generally speaking,
Speaker 1: I'm in favor of competition in markets because that's usually
Speaker 1: what ends up being best for the consumer. It's way
Speaker 1: better if you have options and choices, because companies will
Speaker 1: do different things in order to get customers, which usually
Speaker 1: means cutting a better deal. But we're also talking about rain,
Speaker 1: which most people didn't even have access to electricity. The
Speaker 1: infrastructure itself had not been laid out, so there was
Speaker 1: a real need to do that, and with competition in
Speaker 1: the way, it made laying out the basic infrastructure to
Speaker 1: get electricity to people harder to do. The same thing
Speaker 1: would be true of the telecommunications industry, getting telephone lines
Speaker 1: out to people. It was tough to do that while
Speaker 1: also competing with other companies, and it could mean that
Speaker 1: you could have different standards, corporate defined standards that are
Speaker 1: incompatible with one another, laying out different regions. It was
Speaker 1: just a big mess. So you could argue that the
Speaker 1: monopoly like approach was actually been a official at least
Speaker 1: to establish the infrastructure. It just wasn't a good thing
Speaker 1: to have as an ongoing thing. The newly formed company
Speaker 1: started in eighteen nine two, and Charles Coffin would serve
Speaker 1: as the first president. So though you could trace the
Speaker 1: history as far back as eighteen seventy eight, I think
Speaker 1: is a reasonable reckoning day for g E. S Natal day.
Speaker 1: Now we're gonna take a quick break, but when we
Speaker 1: come back, we'll talk a little bit more about what
Speaker 1: GE was doing during its first few years of existence.
Speaker 1: In eighteen nine three, Edison's company developed an electric locomotive
Speaker 1: that could use electricity to reach speeds of around thirty
Speaker 1: miles per hour, which the company showed off at the
Speaker 1: Chicago Exposition. This was another opportunity to demonstrate how electricity
Speaker 1: could be used to a curious audience, and it helped
Speaker 1: promote the industry. You gotta remember again in eighteen nine,
Speaker 1: electricity is a brand new concept and to show that
Speaker 1: it had the power to do something that typically would
Speaker 1: be done with a steam engine was a very compelling
Speaker 1: use case. In eighteen four, Thomas Edison chose to sell
Speaker 1: his shares in General Electric. He would continue to serve
Speaker 1: as a consultant for the company, but the Wizard of
Speaker 1: Menlo Park would no longer be seen as the driving
Speaker 1: force or voice for General Electric, and to be fair,
Speaker 1: ever since the formation of the company he had little
Speaker 1: say in its direction. While the name and headquarters favored
Speaker 1: Edison's old company, the management for General Electric largely came
Speaker 1: from the Thompson Houston Electric Company. So Edison out and
Speaker 1: at just four years old, General Electric would become part
Speaker 1: of financial history. See in eighteen ninety six, there was
Speaker 1: this guy named Charles Dow and he took stocks of
Speaker 1: twelve large industrial companies to create a stocks average, and
Speaker 1: it was a sort of indicator as to how things
Speaker 1: were going in the industrial market overall. You would watch
Speaker 1: the averaged performance of these twelve companies and that would
Speaker 1: kind of tell you how things were going. As a
Speaker 1: broad rule of thumb, one of those twelve original companies
Speaker 1: was you guessed it, General Electric. All of the original
Speaker 1: dozen companies, GE would be the only one to survive
Speaker 1: and remain on the dal Jones Industrial Average for more
Speaker 1: than a century, though spoiler alert, GE was removed from
Speaker 1: the dal Jones Industrial Average in two thousand and eighteen,
Speaker 1: but I'll talk more about that in a later episode.
Speaker 1: Also in eighteen ninety six, Eli Hu Thompson, one of
Speaker 1: the founders of the Thompson Houston Electric Company and a
Speaker 1: consultant at GE, created an improved X ray tube. So
Speaker 1: let's talk about X rays for a second. X rays
Speaker 1: are a type of electromagnetic radiation and they have a
Speaker 1: very short wavelength, much shorter than visible light. So if
Speaker 1: you were to look at a spectrum of electromagnetic radiation
Speaker 1: from longer wavelengths to shorter at the longest end would
Speaker 1: be radio waves. Those stretch very long, in some cases
Speaker 1: more than a kilometer. Then if you move down the spectrum,
Speaker 1: you come to microwaves below that are infrared waves. Then
Speaker 1: you have visible light, then you have ultra violet light.
Speaker 1: Then you have X rays. If you were to go
Speaker 1: even smaller on the wavelength scale, you would then reach
Speaker 1: gamma rays. X rays form when a charged particle like
Speaker 1: an electron, experiences acceleration or deceleration, and you want to
Speaker 1: have it be in a very controlled way to generate
Speaker 1: specific X rays of a particular wavelength. Wilhelm Conrad Rerunchen
Speaker 1: and I always mess up that name. I apologize, but anyway,
Speaker 1: this is the fellow who first discovered X rays. In
Speaker 1: eight he was working with cathode ray tubes in a lab.
Speaker 1: These are crt s. Is the source of stuff you
Speaker 1: would find in old television sets. And he had concluded
Speaker 1: that there was a type of ray that was invisible
Speaker 1: to the eye, and it could pass through lots of
Speaker 1: solid stuff like heavy black paper. In fact, he figured
Speaker 1: it could passed through lots of different stuff, and it
Speaker 1: could cast shadows of solid objects. It could pass through
Speaker 1: flesh but not bone. And one of the earliest experiments
Speaker 1: he conducted with this discovery was to use film to
Speaker 1: capture an X ray image of his wife's hand so
Speaker 1: that she could see the skeletal structure of her hand.
Speaker 1: So an X ray tube converts energy. Specifically, it converts
Speaker 1: electrical energy into two other types of energy. One of
Speaker 1: those is heat and the other is X radiation. Ideally,
Speaker 1: you want to produce specific X radiation and you want
Speaker 1: to minimize heat production because really heat represents waste, it's
Speaker 1: lost energy in this case, so are the way we
Speaker 1: think of heat being waste energy for a car engine
Speaker 1: as another example. So, an X ray tube is a
Speaker 1: particular type of cathode ray tube. That means inside the tube,
Speaker 1: which looks a little bit like a lightbulb, you have
Speaker 1: an element called a cathode and you have another called
Speaker 1: an anode. Electrical current flows through the tube and electrons
Speaker 1: flow from cathode to anode. The cathode connects to the
Speaker 1: negative side of the circuit, the anode connects to the
Speaker 1: positive side. So in other words, you can think of
Speaker 1: the cathode as the component that sheds or contributes electrons.
Speaker 1: The anode is the component that accepts electrons. As part
Speaker 1: of this process, electrons lose energy as they move through
Speaker 1: the circuit, and this generates X radiation. The material in
Speaker 1: the anode and the energy of the electrons determines how
Speaker 1: the energy gets converted into heat rather than X radiation.
Speaker 1: Modern X ray tubes frequently have tungsten anodes, and there's
Speaker 1: a lot more we could explore with X rays, but honestly,
Speaker 1: I think that would require its own episode, so we'll
Speaker 1: just leave it here. Just know that the X ray
Speaker 1: tubes are pretty similar to the tubes you'd find in
Speaker 1: old CRT televisions or monitors, though not modern TVs or
Speaker 1: displays because they they don't use cathode ray tubes anymore.
Speaker 1: The important thing for our episode here is that GE
Speaker 1: became a leader in that space, with Thompson creating the
Speaker 1: improved X ray tube just one year after X rays
Speaker 1: had even been discovered. In nineteen hundred, Thomas Edison, still
Speaker 1: working as a consultant for General Electric, partnered with Willis R.
Speaker 1: Whitney and Charles Steinmitz to create the first industrial research
Speaker 1: laboratory in the United States. The purpose of the facility
Speaker 1: was to act as an experimental division for GE, where
Speaker 1: engineers and scientists would work on innovating new technologies and
Speaker 1: new applications of existing tech, and even making scientific breakthroughs.
Speaker 1: It was in this facility where GE researchers could conduct
Speaker 1: original research projects. The functions of this facility closely resembled
Speaker 1: a model practiced in German universities. Much of the early
Speaker 1: work in the research lab focused on improving the existing
Speaker 1: technologies that GE was producing at the time. It was
Speaker 1: only after a few years that the engineers were starting
Speaker 1: to look at totally new types of technology, scientific principles
Speaker 1: and applications. Also, this is where we get a little
Speaker 1: Monty Python and the Holy Grail with the lab. The
Speaker 1: original lab was not particularly grandiose. It was a barn
Speaker 1: located behind the house of one of the researchers for GE. But,
Speaker 1: and this will probably come as a surprise to absolutely nobody,
Speaker 1: because they were working with electricity and heating elements, that
Speaker 1: particular lab ended up catching fire and it burned down.
Speaker 1: After that, GE re established the lab in Schenectady, New York.
Speaker 1: The head of the research division was a professor from
Speaker 1: m I. T. And I'm sure there were many more
Speaker 1: fires over the following years, but as far as I know,
Speaker 1: none of them burned The whole lab down to the
Speaker 1: ground again. One early invention to come out of the
Speaker 1: lab was the electric fan in n two. Now, there
Speaker 1: is a small issue with this, and that other inventors
Speaker 1: had already created electric fans years earlier. An inventor with
Speaker 1: the fabulous name Skyler Scott's Wheeler built one in eighteen
Speaker 1: eighty two, twenty years before GE would file patents for
Speaker 1: its electric fan design. Another guy named Philip Deal took
Speaker 1: the electric fan and flipped it a bit, creating the
Speaker 1: first ceiling fan. He essentially took a fan blade, attached
Speaker 1: it to a sewing machine motor, and then bolted that
Speaker 1: motor to the ceiling in seven Now, I'm not sure
Speaker 1: what innovations General Electric contributed to the electric fan, but
Speaker 1: I will tell you I looked at lots of different
Speaker 1: sources when I was creating these these episodes, and many
Speaker 1: of them talk about two G E invents the electric fan,
Speaker 1: which clearly is not the case. Uh. Now, they might
Speaker 1: have come out with an electric fan, and they probably
Speaker 1: did create some interesting innovations with the fan, but they
Speaker 1: didn't truly invent it. It'd been around for two decades already.
Speaker 1: In nineteen o three, GE acquired the Stanley Electric Manufacturing Company,
Speaker 1: which manufactured transformers. In fact, William Stanley, the founder of
Speaker 1: the company, was the developer of the transformer. And a
Speaker 1: transformer in this case isn't a robot in disguise. Rather,
Speaker 1: it's an electrical device that converts alternating current electricity from
Speaker 1: one voltage to another. And depending upon its design, a
Speaker 1: transformer can step up or step down the voltage and
Speaker 1: it only works on alternating current. So let's talk a
Speaker 1: bit about this and why it's important. Alright, at the
Speaker 1: dawn of the age of electricity, you had the current Wars,
Speaker 1: the brew haha over whether regions should invest in direct
Speaker 1: current or alternating current for the purposes of distributing electricity.
Speaker 1: Edison was in favor of direct current. Direct current is
Speaker 1: the same sort of current you'd get with a battery.
Speaker 1: The electricity flows one way only through the circuit. It's
Speaker 1: a one direction type of thing. It's simple. But at
Speaker 1: the time, transmitting direct current over longer distances was impractical.
Speaker 1: So it worked fine if you were in a dense
Speaker 1: urban environment and you could build power generation plants at
Speaker 1: regular spots around the region, but it wouldn't didn't work
Speaker 1: so great if you're talking about stretching across rural areas,
Speaker 1: that the transmitting direct current at lower voltages was inefficient.
Speaker 1: You lost too much electricity along the way, and it
Speaker 1: higher curtains. That was considered higher voltages, I should say
Speaker 1: it was considered very dangerous. Now, inter alternating current with
Speaker 1: alternating current, the flow of electricity reverses many times a second,
Speaker 1: going one way down the path and then reversing to
Speaker 1: go the other way. And one benefit of this approach
Speaker 1: is that you can create transformers to step up the
Speaker 1: voltages for purposes of transmitting electricity over long distances, and
Speaker 1: then have another transformer on the other end to step
Speaker 1: the voltage back down so it can be used in
Speaker 1: households safely. And it all has to do with electromagnetism.
Speaker 1: Electricity flowing through a coil of wire creates a magnetic field,
Speaker 1: and if it's alternating current going through that coil, so
Speaker 1: it's you can think of it as going down the
Speaker 1: coil of wire and then reversing and going up the
Speaker 1: coil of wire and doing that many, many, many times
Speaker 1: per second. Well, then it creates a fluctuay eating magnetic field. Now,
Speaker 1: if you were to bring a second coil of wire
Speaker 1: within that fluctuating magnetic field from the first coil of wire,
Speaker 1: something interesting happens. All right, we've got coils A and B.
Speaker 1: Each coil is wrapped around its own ferro magnetic core
Speaker 1: of iron or steel, something that can be magnetized. We
Speaker 1: run an alternating current of electricity through coil A. Then
Speaker 1: we bring coil B, with no current running through it,
Speaker 1: close enough so that it is within the fluctuating magnetic
Speaker 1: field that is generated as a consequence of coil a's
Speaker 1: electric current. That fluctuating magnetic field then induces a second
Speaker 1: electric current to flow through coil B. So now coil
Speaker 1: B is carrying a current because of being in that
Speaker 1: fluctuating magnetic field from coil A. Even more interesting is
Speaker 1: that if coil B has more coils or turns, as
Speaker 1: we call it, then coil A does, The current running
Speaker 1: through coil B will have a higher voltage. The relationship
Speaker 1: between the number of turns is called the transformer turns ratio.
Speaker 1: So a power plant could run current through a line
Speaker 1: to a transformer and through the use of two sets
Speaker 1: of coils, step up the voltage significantly. For a long
Speaker 1: distance transmission, where higher voltage is more efficient. I wonder
Speaker 1: if Thomas Edison was peeved the General Electric was purchasing
Speaker 1: companies that were building tech for alternating current applications. Actually,
Speaker 1: I don't have to wonder he was. He was pretty
Speaker 1: pretty upset about He did not like the idea of
Speaker 1: losing the War of the currents, even well after that
Speaker 1: war was settled. In nineteen o five, GE formed the
Speaker 1: Electric Bond and Share Company also known as Abasco e
Speaker 1: B A s c O. This was a holding company.
Speaker 1: Holding company as a company that exists largely to hold
Speaker 1: onto the stock of other companies. Usually, a holding company
Speaker 1: doesn't actually, you know, do anything. Its purpose is truly
Speaker 1: just financial in nature. GE used the employee Retirement Investment
Speaker 1: Fund for its employees to purchase securities from smaller electric
Speaker 1: utility companies. This was largely in an effort to monopolize
Speaker 1: the electric utility industry. This was something that financier JP
Speaker 1: Morgan was very keen on doing. A few other utilities
Speaker 1: holding companies would be would would pop up and scoop
Speaker 1: up other regional companies, and so you started to see
Speaker 1: even less competition in the region, and this would spell trouble.
Speaker 1: I'll explain more in a second, But first let's take
Speaker 1: another quick break. Now I'm going to stick with this
Speaker 1: story about the holding company for a moment, and then
Speaker 1: we'll give back to the timeline. We're gonna go down
Speaker 1: this particular path just to get a complete picture of
Speaker 1: this story. So Abasco ends up controlling tons of companies
Speaker 1: and would even form subsidiaries of its own holding company
Speaker 1: to oversee groups of these because there were just so many.
Speaker 1: So you might have a subsidiary of Abasco that itself
Speaker 1: was a holding company for like ten other companies. So
Speaker 1: eventually the United States government pays attention and comes to
Speaker 1: oppose the monopolization of utilities and says, you know, it
Speaker 1: was okay when we were laying out the infrastructure to
Speaker 1: make sure people got access to electricity, but now we're
Speaker 1: not so comfortable with one company having this much control
Speaker 1: over electricity distribution. This reached a crescendo in ninety five
Speaker 1: when Congress passed the Public Utility Company Holding Act. That
Speaker 1: act gave the securities an Exchange Commission, or sec the
Speaker 1: authority to break up holding companies so that the individual
Speaker 1: states in the United States could oversee operations within their borders.
Speaker 1: Abasco fought tooth and nail to keep its holdings, but
Speaker 1: ultimately lost that battle, and afterwards the entity that was
Speaker 1: Abasco would reorganize and become an investment company. Now I
Speaker 1: include the story here because it's just one of many
Speaker 1: examples of how General Electric drew focus and criticism for
Speaker 1: its operations, and it shows how powerful and influential the
Speaker 1: company has been over the years. All right, now we're
Speaker 1: gonna jump back to the timeline that we were covering before.
Speaker 1: So around the same time that Abasca was forming, a
Speaker 1: GE engineer named Ernst Alexanderson developed a type of high
Speaker 1: frequency alternator and we now call the Alexanderson alternator, and
Speaker 1: it was for the purposes of creating a radio transmitter.
Speaker 1: He was doing this upon request from another guy, an
Speaker 1: inventor named Reginald Fessenden, who had been trying to solve
Speaker 1: the problem of sending sound over radio waves, essentially radio broadcasting.
Speaker 1: Fessenden had figured out that he needed a much higher
Speaker 1: frequency alternator than what was currently available to achieve his goal,
Speaker 1: so he sent out the request to GE and Alexanderson
Speaker 1: started to work on the project. An alternator, by the way,
Speaker 1: is a device that creates an alternating current. The Alexanderson
Speaker 1: alternator could create a continuous radio wave, and that's a
Speaker 1: radio wave with a constant amplitude and frequency. I won't
Speaker 1: go into it further here, as I've done plenty of
Speaker 1: episodes about radio waves and technology, but it would be
Speaker 1: an early example of how General Electric would become an
Speaker 1: important part of the history of radio. So far, I've
Speaker 1: been talking about electric utilities and radio waves. But around
Speaker 1: the same time so nineteen o five or so, General
Speaker 1: Electric would also dip its enormous corporate toe into the
Speaker 1: tempting waters of consumer appliances. The first one I could
Speaker 1: find on General Electric's own website was the Model D
Speaker 1: twelve and electric toaster. Other sources cite a nineteen o
Speaker 1: six electric range as the first consumer product. The toaster,
Speaker 1: by the way, looks terrifying to me because it doesn't
Speaker 1: have any solid surfaces. It's essentially a couple of racks,
Speaker 1: open air racks that holds slices of bread and they
Speaker 1: are placed on either side of a series of unprotected
Speaker 1: heating coils. So I would imagine this thing was quite
Speaker 1: the fire hazard in its day. Oh and in case
Speaker 1: you wonder like, how does this stuff work? That's easy.
Speaker 1: Conductive materials, that is, materials that can conduct electrons are
Speaker 1: usually not perfect conductors most of the time. Now, if
Speaker 1: you can cool one down to near absolute z euro
Speaker 1: you can get a super conductor that doesn't lose any conductivity. Uh.
Speaker 1: And if you use larger gauges of conductive material, you
Speaker 1: reduce resistance. But because of a variety of factors, most
Speaker 1: conductors have a certain amount of resistance to electric current.
Speaker 1: Based on all these different variables, that resistance manifests as heat. Now,
Speaker 1: normally we don't want heat in our conductive materials. Electronics
Speaker 1: don't respond too well with getting hot. But with stuff
Speaker 1: like electric ranges and toasters, the whole point is to
Speaker 1: generate heat. We use materials that have a resistance so
Speaker 1: that enough electrical energy will convert to heat in order
Speaker 1: to cook or toast whatever it is we're exposing to
Speaker 1: those elements. On the other end of the scale from
Speaker 1: a countertop toaster is the delivery g E made to
Speaker 1: the New York Central Railroad in nine. The company supplied
Speaker 1: thirty electric locomotives, each weighing in at ninety four tons.
Speaker 1: The locomotives had two thousand, eight hundred horsepower each. This
Speaker 1: isn't just an interesting tidbit in gees history. The electric
Speaker 1: locomotive and rails in New York would shape the development
Speaker 1: of Manhattan itself, as did the electrical infrastructure. So one
Speaker 1: could argue that modern Manhattan wouldn't look anything like it
Speaker 1: does today without General Electrics business in the area. That
Speaker 1: General Electrics involvement itself was what helped shape the modern
Speaker 1: appearance of Manhattan. And because I'll probably forget about it
Speaker 1: before I get to the recent past. In a later episode,
Speaker 1: not very long ago from the recording, General Electrics spun
Speaker 1: off its locomotive business in a merger with another locomotive
Speaker 1: company called wab Tech w A B T e C.
Speaker 1: The eleven billion dollar deal saw ge and its shareholders
Speaker 1: take fifty point one at stake in the ownership of
Speaker 1: this new company, with wab Text shareholders getting the other
Speaker 1: forty nine point nine. This was part of the larger
Speaker 1: effort to shed some of g S businesses, as I
Speaker 1: think it's already apparent that the company had grown extremely large,
Speaker 1: with lots of different departments involved in various industries. That
Speaker 1: was true even in the early nineteen hundreds, but it
Speaker 1: gets way more apparent as this series will go on.
Speaker 1: In nineteen o nine, engineers at General Electric, led by
Speaker 1: a guy named William Coolidge, developed the ductal tungsten filament
Speaker 1: for incandescent light bulbs. Tungsten holds together well at high temperatures,
Speaker 1: and it gives off a warm light when it incandescees,
Speaker 1: but it's also a pretty tough metal to work with.
Speaker 1: Coolidge created a process that made the metal easier and
Speaker 1: more pliable to work with, and it was off to
Speaker 1: the races. It made the Edison design much more efficient
Speaker 1: and practical, and it quickly became the standard material for
Speaker 1: light bulbs. It's essentially the same stuff you'd find in
Speaker 1: the filament in an incandescent light bulb today. In nineteen eleven,
Speaker 1: we have another acquisition sort of General Electric absorbed a
Speaker 1: company called the National Electric Lamp Association or NILA in
Speaker 1: e l A, and that organization traced its own history
Speaker 1: back to nineteen o one. G had already been part
Speaker 1: of NILA's history, having become a shareholder in the company
Speaker 1: back in nineteen o two, just one year after it
Speaker 1: was founded, and providing the old Brush Electric Company facilities
Speaker 1: to serve as NILA's headquarters. Over time, General Electrics stake
Speaker 1: in the company grew, and federal courts took notice, and
Speaker 1: there were talks of antitrust concerns and GE was essentially
Speaker 1: told it had to dissolve NILA, so General Electric absorbed
Speaker 1: NILA into its own overall business. NILA had recently finished
Speaker 1: building an industrial complex in Cleveland, Ohio, and NILA Park
Speaker 1: would become the first industrial park in the United States.
Speaker 1: And here's where I admit I finally looked up the
Speaker 1: definition for an industrial park, because I've heard the term
Speaker 1: hundreds of times but never really thought to see exactly
Speaker 1: what the definition was, So imagine my surprise to find
Speaker 1: out it means pretty much what it sounds like. An
Speaker 1: industrial park is an area that is zoned for industrial development,
Speaker 1: kind of like how a business park or an office
Speaker 1: park is an area zoned for offices. Sometimes the obvious
Speaker 1: answer is in fact the correct one. In nineteen twelve,
Speaker 1: GE researchers developed improved vacuum tubes, which would help usher
Speaker 1: in the early era of electronics. Before the development of
Speaker 1: the transistor, the vacuum tube was crucial for electronics. A
Speaker 1: vacuum tube is also known as a thermionic valve. Thermionic
Speaker 1: gives you a hint of One of the important concepts
Speaker 1: in this device has to do with heat and Vacuum
Speaker 1: tubes are in many ways similar to cathode ray tubes
Speaker 1: or light bulbs. Like a cathode ray tube, a vacuum
Speaker 1: tube has a cathode and an anode separated from each
Speaker 1: other inside a glass tube, and as the name vacuum
Speaker 1: tube tells us, the inside of the tube has no
Speaker 1: air in it. It is a vacuum. Heating the cathode
Speaker 1: causes it to shed electrons in a process called thermionic emission.
Speaker 1: Applying a positive voltage to the anode plate attracts those
Speaker 1: electrons across the gap in the vacuum, creating a current flow.
Speaker 1: A vacuum tube with just two electrodes, the cathode and
Speaker 1: the anode, is called a diode. This is a type
Speaker 1: of tube that allows electricity to only flow in a
Speaker 1: single direction, so it's like a one way street for
Speaker 1: electrical current. That we also have to remember that we
Speaker 1: describe current as the direction of positive to negative, so
Speaker 1: this is confusing. Electrons are traveling from negative to positive,
Speaker 1: but we call the currents direction the opposite, So current
Speaker 1: flows from anode to cathode even though electrons are flowing
Speaker 1: from cathode to anode. And I know it's confusing, and
Speaker 1: I blame Benjamin Franklin, But that's another story. One important
Speaker 1: task these diodes did was convert alternating current to direct current.
Speaker 1: This was important since electricity transmission was through alternating current,
Speaker 1: but most devices you would plug into outlets relied on
Speaker 1: direct currents, so you had to be able to convert them.
Speaker 1: But vacuum tubes didn't just stop there. Back in seven
Speaker 1: lead to Forest, an American inventor, created the first triode
Speaker 1: vacuum tube. So this was a vacuum tube with three electrodes.
Speaker 1: You had the anode, you had the cathode, and the
Speaker 1: third electrode was a control grid. Think of it as
Speaker 1: a sort of filter or mesh between the cathode and
Speaker 1: the anode. So the cathode is shedding electron, the anode
Speaker 1: is accepting electrons, and the control grid is between the two.
Speaker 1: Connectors to the control grid allow for a change and
Speaker 1: voltage to be applied to the grid itself. So adjusting
Speaker 1: the voltage to the control grid acts as a kind
Speaker 1: of valve adjusting exactly how many electrons can flow from
Speaker 1: the cathode to the an notte. So if you applied
Speaker 1: a negative voltage to the control grid, the control grid
Speaker 1: will repel electrons, right because like charge will repel like charge.
Speaker 1: Negative repels negative, and that would mean that you would
Speaker 1: slow down the stream going from cathode to an notte.
Speaker 1: So it's almost like turning a tap of water and
Speaker 1: turning it so that the water is barely trickling out.
Speaker 1: If you apply a strong enough negative charge to the
Speaker 1: control grid, you turn off the flow entirely. But if
Speaker 1: you apply a positive voltage, that increases the number of
Speaker 1: electrons that flow through to the anode. And in fact,
Speaker 1: such a YouTube can be used to amplify an electrical signal.
Speaker 1: So let me explain how that works really quickly. See
Speaker 1: a small signal coming into the control grid, perhaps one
Speaker 1: created by say a radio wave, can be converted into
Speaker 1: a much larger signal with the exact same wave form.
Speaker 1: Another example is using a microphone. If you're using a microphone,
Speaker 1: you're speaking into the microphone. The vibrations caused by the
Speaker 1: sounds you are making cause a diaphragm to move inside
Speaker 1: the microphone. That in turn causes a tiny electro magnet
Speaker 1: to generate a weak electrical signal, and this signal is
Speaker 1: far too weak to power a speaker. But let's say
Speaker 1: you send this electrical signal so that feeds into the
Speaker 1: control grid of a triode vacuum tube. It will control
Speaker 1: the flow of electrons through that tube, and you can
Speaker 1: have a much more powerful electrical signal coming out of
Speaker 1: that tube that matches the one you created coming out
Speaker 1: of your microphone, and that one would be enough for
Speaker 1: you to send to a speaker to power it. It's
Speaker 1: really pretty darn cool. Vacuum tubes would be used in
Speaker 1: all sorts of early electronics, and they would usher in
Speaker 1: an age of rapid development, though it was also one
Speaker 1: in which those electronics were all very large, because vacuum
Speaker 1: tubes are pretty big themselves, so a computer with vacuum
Speaker 1: tubes and computers would come much later. But a computer
Speaker 1: running on vacuum tubes would by necessity take up a
Speaker 1: great deal of space, and it would also generate a
Speaker 1: lot of heat. It wouldn't be until the development of
Speaker 1: the transistor that these problems would be surmounted and we'd
Speaker 1: be able to miniaturize electronics. Now, I think this is
Speaker 1: a good place for us to leave off with the
Speaker 1: story of GE. To recap, the company formed during an
Speaker 1: era of industrialization and was largely under the influence of
Speaker 1: a monopolistic capitalist, that being JP Morgan. It had hardly
Speaker 1: any competition to speak of, being part of a duopoli
Speaker 1: with Westinghouse and having far more of the mark A
Speaker 1: share in the United States, and it's focus on research
Speaker 1: and development as well as acquisitions meant it was becoming
Speaker 1: increasingly powerful and cementing its near future. Now, in the
Speaker 1: next episode, we'll look at how GE would play an
Speaker 1: important part in establishing radio broadcasting in the United States,
Speaker 1: as well as its early history with NBC, and we'll
Speaker 1: also learn about how the US government began to chip
Speaker 1: away at some of the moves Morrigan had made in
Speaker 1: the early years of the company. But for now, it's
Speaker 1: time to sign off. If you guys have suggestions for
Speaker 1: future episodes of tech Stuff, why not send me an
Speaker 1: email the addresses tech Stuff at how stuff works dot
Speaker 1: com or pop on over to our website that's tech
Speaker 1: Stuff podcast dot com. You're gonna find an archive of
Speaker 1: all of our past episodes there. You're also going to
Speaker 1: find links to our social media accounts, so you can
Speaker 1: leave us a message on things like Facebook or Twitter.
Speaker 1: And you'll also find a link to our online store,
Speaker 1: where every purchase you make goes to help the show
Speaker 1: and we greatly appreciate it, and I'll talk to you
Speaker 1: again really soon. Y Text Stuff is an I heart
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