Speaker 1: Welcome to Tech Stuff, a production of I Heart Radios
Speaker 1: How Stuff Works. Hey there, and welcome to tech Stuff.
Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer with
Speaker 1: How Stuff Works in iHeart Radio and I Love All
Speaker 1: Things Tech. And In mid August two thousand nineteen, by
Speaker 1: financial analyst named Harry Marcopolis released a one hundred seventy
Speaker 1: five page report alleging that g E that is General Electric,
Speaker 1: the venerable company that is more than a century old,
Speaker 1: was secretly on the verge of insolvency. He claimed the
Speaker 1: company was using accounting tricks to hide an enormous threat
Speaker 1: to its very existence, something akin to the Shenanigans in
Speaker 1: Ron polled years ago. And giving Marcopolis some credibility was
Speaker 1: his own history. He had raised warning flags about Bernie
Speaker 1: made Off before the world found out about made Off'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 answered 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 page report, but I did think it would
Speaker 1: be good to do a full rundown on the history
Speaker 1: of General Electric. It is an incredibly influential company, and
Speaker 1: it spans many industries it has had and and it's
Speaker 1: heart to stress how big an impact it has had
Speaker 1: on the history of the United States in particular and
Speaker 1: tech in general. Now I should also add that back
Speaker 1: in two thousand twelve, Chris Palette and I recorded three
Speaker 1: episodes about the history of GE. But Tech Stuff was
Speaker 1: a different kind of show back in those days, so
Speaker 1: I thought it might be good to take a deeper
Speaker 1: dive into the history and see how GE shaped technology.
Speaker 1: And beyond that being said, if I were to do
Speaker 1: a comprehensive history on the company and all its subsidiaries,
Speaker 1: this series would last a dozen episodes or more. So
Speaker 1: to avoid making this episode and this podcast turned into
Speaker 1: Ge Stuff, I'm going to try and focus on what
Speaker 1: I think are some of the most important historical moments
Speaker 1: of GE. And a lot of that is in those
Speaker 1: early years. So let's go back to where it all began.
Speaker 1: And like many corporate histories, this involves going back to
Speaker 1: older companies that would form the foundation for the one
Speaker 1: we actually want to talk about. So strap in guys
Speaker 1: and women and all others. I don't mean to lump
Speaker 1: everybody in under the term guys. Anyway, we all know
Speaker 1: about Thomas Edison, right He was an inventor. He was
Speaker 1: an entrepreneur. He was a master at self promotion and more.
Speaker 1: And some folks might throw in some less complementary labels
Speaker 1: in there, perhaps suggesting he was also a thief, or
Speaker 1: if that's going too far, someone willing to take credit
Speaker 1: for the work of people who are working beneath him.
Speaker 1: But whatever your opinion of the fellow, Edison got stuff done.
Speaker 1: In 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 to incandess brightly enough and long enough to be
Speaker 1: a practical use. In eighteen seventy eight, Edison founded a
Speaker 1: company to concentrate on that goal. It was the Edison
Speaker 1: Electric Light Company. He had some big names in US history,
Speaker 1: particularly US financial history, as his vester's folks like the Vanderbilts,
Speaker 1: and JP Morgan. Now Morgan is going to become very
Speaker 1: important to this story. Now. At the time, he had
Speaker 1: yet to find a suitable approach. The lightbulbs he made
Speaker 1: would burn out in just a few hours. The following year,
Speaker 1: in eighteen seventy nine, his company produced a light bulb
Speaker 1: able to last for forty hours. Not superb by any means,
Speaker 1: but a real sign of progress, and Edison boldly stated
Speaker 1: that his company would make electricity affordable enough so that
Speaker 1: only the wealthy would ever burn candles. That same year, again,
Speaker 1: eighteen seventy nine, for those who have forgotten, a couple
Speaker 1: of teachers created their own company. Edwin James Houston was
Speaker 1: a physics teacher, and Alihu Thompson taught chemistry and mechanics
Speaker 1: at the Central High School for Boys in Philadelphia. They
Speaker 1: created a company called the American Electric Company in New Britain, Connecticut,
Speaker 1: with the help of some local and susters. In three
Speaker 1: a different group of investors, this time from Massachusetts, bought
Speaker 1: out the company from the original group of investors and
Speaker 1: the company got a new name, the Thompson Houston Electric Company.
Speaker 1: Thompson would head up the research and development department, which
Speaker 1: was called the model room. A fellow named Charles A. Coffin,
Speaker 1: the head of the investors, would lead the company and
Speaker 1: act as a sort of president and chief financial officer,
Speaker 1: while Elwyn W. Rice led the manufacturing part of the business.
Speaker 1: Both of those names will be important for ge and
Speaker 1: Charles Coffin wasn't a physicist by nature. No, he was
Speaker 1: a man with a lot of soul. And by that
Speaker 1: I meant he was a shoe manufacturer. As a dad
Speaker 1: joke for you. So where many of his fellow investors,
Speaker 1: They were all from the shoe manufacturing industry, and they
Speaker 1: were all located in Lynn, Massachusetts, and they pulled their
Speaker 1: money to purchase this burgeoning, this this blossoming electric utility company,
Speaker 1: the Thompson Houston Electric Company, would relocate its headquarters to Lynn, Massachusetts.
Speaker 1: And we'll get back to that company in just a second.
Speaker 1: Edison was not just working on lamps in the eighteen
Speaker 1: seventies and eighteen eighties. He was also creating some of
Speaker 1: the first generators. These are devices that would convert mechanical
Speaker 1: energy into electrical energy. On December seventeenth, eighteen eighty, he
Speaker 1: founded the Edison Electric Illuminating Company. In eighteen eighty two,
Speaker 1: he was responsible for building and operating the first steam
Speaker 1: generated power station in London to power street lamps and
Speaker 1: a few private homes that were not far from the
Speaker 1: power plant. In New York, he was responsible for creating
Speaker 1: an electric power distribution system called Pearl Street Station, which
Speaker 1: supplied electricity to fifty nine whole customers in Lower Manhattan.
Speaker 1: Now at the time, not everyone was old on the
Speaker 1: idea of this new fangled electricity replacing candles and gas lamps,
Speaker 1: so as an incentive, Edison's company offered the first three
Speaker 1: months of service at no charge. He also began to
Speaker 1: acquire smaller businesses that were likewise getting into the electrical
Speaker 1: power generator game, and by eighteen ninety this motley group
Speaker 1: of companies merged to form Voltron, and by Voltron, I
Speaker 1: mean they became the Edison General Electric Company. It was
Speaker 1: this company that in eight installed electrical wires and switching
Speaker 1: equipment in the United States White House, and that made
Speaker 1: Benjamin Harrison, the twenty third President of the United States,
Speaker 1: the first US president to have electricity in the White House.
Speaker 1: Back to the Thompson Houston Electric Company. Like Edison, Charles
Speaker 1: Coffin was determined to be a big player in the
Speaker 1: electricity generating business. He had led Thompson Houston to go international,
Speaker 1: and he bought out a British company called the Brush Company,
Speaker 1: which did not sell brushes. No, it was actually founded
Speaker 1: by a guy named Charles Brush, and it was a
Speaker 1: company that had patents for stuff like dynamos and had
Speaker 1: been in litigation with Thompson Houston Electric Company over some technologies.
Speaker 1: But we all know the old saying, right, if you
Speaker 1: can't beat them, by them, and that's what Thompson Houston
Speaker 1: Electric Company did. So both Edison General Electric Company and
Speaker 1: the Thompson Houston Electric Company were buying up competitors and
Speaker 1: more importantly, patent holders, so they each had dozens of
Speaker 1: patents to their name, and they were quickly becoming the
Speaker 1: dominant players in electricity generation and distribution in the Northeast
Speaker 1: United States. And there was just enough overlap to make
Speaker 1: business tricky for both companies. Without stepping on the toes
Speaker 1: of the other, they could have become great rivals, and
Speaker 1: in fact they kind of were. Henry Villard, who was
Speaker 1: the president of Edison General Electric Thomas Edison, wasn't involved
Speaker 1: in the day to day operations of the company. Villard
Speaker 1: had an idea. Both Edison and Thompson Houston were in
Speaker 1: a bit of a cash crunch as the market was
Speaker 1: in a bit of a slump. In addition, because both
Speaker 1: companies owned dozens of patents, that made it hard to
Speaker 1: be the sole provider of any kind of electrical infrastructure.
Speaker 1: Business was too expensive. It was not just expensive to
Speaker 1: lay out the infrastructure, but you had all these legal
Speaker 1: battles that would come up because one company would allege
Speaker 1: that the other company was infringing on one or more patents.
Speaker 1: There were several lawsuits pending around patents, and there would
Speaker 1: likely be even more in the future. Villard wanted to
Speaker 1: solve all these problems by having the two companies merge.
Speaker 1: Edison reportedly hated this idea and advised against it. Villard
Speaker 1: felt that the Edison company was in a dominent position
Speaker 1: and could effectively define the terms of the merger, and
Speaker 1: so he tried to move on ahead. Then we get
Speaker 1: back to JP Morgan, the financier, that he had arrived
Speaker 1: at a similar conclusion regarding the merger, but he felt
Speaker 1: that the Thompson Houston company was actually the one that
Speaker 1: was in a stronger position, and because Morgan was Mr
Speaker 1: money Bags. He went behind Villard's back and began wheeling
Speaker 1: and dealing to make the merger happen, but on very
Speaker 1: different terms than what Villard was thinking. Morgan's spearheaded the
Speaker 1: effort to merge these two companies together to form a
Speaker 1: new entity, one that would become known as the General
Speaker 1: Electric Company and later g E. The headquarters for the
Speaker 1: company would be in Schenectady, New York, and Morrigan effectively
Speaker 1: removed Thomas Edison and Henry Villard from any sort of
Speaker 1: leadership role. Edison didn't even know about the merger until
Speaker 1: the day before it at actually happened. Yikes, With their
Speaker 1: powers and patents combined, the two former competitors could rapidly
Speaker 1: expand throughout the Northeast and beyond and moreover, the merger
Speaker 1: meant that the electric utilities industry in the United States
Speaker 1: was now split between just two companies because General Electric
Speaker 1: Companies had been swooped up, you know, all Thomas Houston
Speaker 1: and Edison Electric had brought up all these smaller utilities,
Speaker 1: as had Westinghouse, the other big competitor in the US.
Speaker 1: So now the electric utilities industry in the United States
Speaker 1: was a do Woppoli. It was either General Electric or
Speaker 1: it was Westinghouse and General Electric and Westinghouse had been
Speaker 1: part of a patent pool agreement in eight so this
Speaker 1: was a big deal. It would also mean the end
Speaker 1: of the war of the currents between direct current and
Speaker 1: alternating current. I have a little bit more to say
Speaker 1: about that in a minute now. I'm a two minds
Speaker 1: about this merger that JP Morgan initiated. Generally speaking, I'm
Speaker 1: in favor of competition in markets because that's usually what
Speaker 1: ends up being best for the consumer. It's way better
Speaker 1: if you have options and choices because companies will do
Speaker 1: different things in order to get customers, which usually means
Speaker 1: cutting a better deal. But we're also talking about era
Speaker 1: in which most people didn't even have access to electricity.
Speaker 1: The infrastructure itself had not been laid out, so there
Speaker 1: was a real need to do that, and with competition
Speaker 1: in the way, it made laying out the basic infrastructure
Speaker 1: to get electricity to people harder to do. The same
Speaker 1: thing would be true of the telecommunications industry getting telephone
Speaker 1: lines out to people. It was tough to do that
Speaker 1: while also competing with other companies, and it could mean
Speaker 1: that you could have different standards, corporate defined standards that
Speaker 1: are incompatible with one another, laying out different regions. It
Speaker 1: was just a big mess. So you could argue that
Speaker 1: the monopoly like approach was actually beneficial at least to
Speaker 1: establish the infrastructure. It just wasn't a good thing to
Speaker 1: have as an ongoing thing. The newly formed company started
Speaker 1: in eighteen nine two and Charles Coffin would serve as
Speaker 1: the first president. So though you could trace the history
Speaker 1: as far back as eighteen seventy eight, I think is
Speaker 1: a reasonable reckoning day for g s natal day. Now
Speaker 1: we're gonna take a quick break, but when we come back,
Speaker 1: we'll talk a little bit more about what GE was
Speaker 1: doing during its first few years of existence. In eighteen
Speaker 1: nine three, Edison's company developed an electric locomotive that could
Speaker 1: use electric city to reach speeds of around thirty miles
Speaker 1: per hour, which the company showed off at the Chicago Exposition.
Speaker 1: This was another opportunity to demonstrate how electricity could be
Speaker 1: used to a curious audience, and it helped promote the industry.
Speaker 1: You gotta remember again, in eighteen nine three, electricity is
Speaker 1: a brand new concept and to show that it had
Speaker 1: the power to do something that typically would be done
Speaker 1: with a steam engine was a very compelling use case.
Speaker 1: In eighteen, Thomas Edison chose to sell his shares in
Speaker 1: General Electric. He would continue to serve as a consultant
Speaker 1: for the company, but the Wizard of Menlo Park would
Speaker 1: no longer be seen as the driving force or voice
Speaker 1: for General Electric, and to be fair, ever since the
Speaker 1: formation of the company, he had little say in its direction.
Speaker 1: While the name and headquarters favored Edison's old company, the
Speaker 1: management for General Electric largely came from the Thompson Houston
Speaker 1: Electric Company. So Edison out and at just four years old,
Speaker 1: General Electric would become part of financial history. See in
Speaker 1: eight six there was this guy named Charles Dow and
Speaker 1: he took stocks of twelve large industrial companies to create
Speaker 1: a stocks average, and it was a sort of indicator
Speaker 1: as to how things were going in the industrial market overall.
Speaker 1: You would watch the averaged performance of these twelve companies
Speaker 1: and that would kind of tell you how things were going.
Speaker 1: As a broad rule of thumb, one of those twelve
Speaker 1: original companies was you guessed it, General Electric. All of
Speaker 1: the original dozen companies, GE would be the only one
Speaker 1: to survive and remain on the dal Jones Industrial Average
Speaker 1: for more than a century, though spoiler alert, GE was
Speaker 1: removed from the dal Jones Industrial Average in two thousand
Speaker 1: and eighteen, but I'll talk more about that in a
Speaker 1: later episode. Also in eighteen, s Eli Hu Thompson, one
Speaker 1: of the founders of the Thompson Houston Electric Company and
Speaker 1: a consultant at GE, created an improved X ray tube.
Speaker 1: So let's talk about X rays for a second. X
Speaker 1: rays are a type of electromagnetic radiation, and they have
Speaker 1: a very short wavelength, much shorter than visible light. So
Speaker 1: if you were to look at a spectrum of electromagnetic
Speaker 1: radiation from longer wavelengths to shorter at the longest end
Speaker 1: would be radio waves. Those stretch very long, in some
Speaker 1: cases more than a kilometer. Then if you move down
Speaker 1: the spectrum you come to microwaves. Below that are infrared waves.
Speaker 1: Then 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. Vilhelm Conrad Runchen
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 sort 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 pass 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, a electrons lose energy as they moved
Speaker 1: through the circuit, and this generates X radiation. The material
Speaker 1: in the anode and the energy of the electrons determines
Speaker 1: how much of the energy gets converted into heat rather
Speaker 1: than X radiation. Modern X ray tubes frequently have tungsten anodes.
Speaker 1: And there's a lot more we could explore with X rays,
Speaker 1: but honestly, I think that would require its own episode,
Speaker 1: so we'll just leave it here. Just know that the
Speaker 1: X ray tubes are pretty similar to the tubes you'd
Speaker 1: find in old CRT televisions or monitors, though not modern
Speaker 1: TVs or displays because they they don't use cathode ray
Speaker 1: tubes anymore. The important thing for our episode here is
Speaker 1: that GE became a leader in that space, with Thompson
Speaker 1: creating the improved X ray tube just one year after
Speaker 1: X rays had even been discovered. In nineteen hundred, Thomas Edison,
Speaker 1: still working as a consultant for General Electric, partnered with
Speaker 1: Willis R. Whitney and Charles Steinmitz to create the first
Speaker 1: industrial research laboratory in the United States. The purpose of
Speaker 1: the facility was to act as an experimental division for GE,
Speaker 1: where engineers and scientists would work on innovating new technologies
Speaker 1: and 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 rese searchers
Speaker 1: for GE. But, and this will probably come as a
Speaker 1: surprise to absolutely nobody, because they were working with electricity
Speaker 1: and heating elements, that particular lab ended up catching fire
Speaker 1: and it burned down. After that, GE re established the
Speaker 1: lab in Schenectady, New York. The head of the research
Speaker 1: division was a professor from m I. T. And I'm
Speaker 1: sure there were many more fires over the following years,
Speaker 1: but as far as I know, none of them burned
Speaker 1: the whole lab down to the ground again. One early
Speaker 1: invention to come out of the lab was the electric
Speaker 1: fan in two. Now, there is a small issue with this,
Speaker 1: and that other inventors had already created electric fans years earlier.
Speaker 1: An inventor with the fabulous name Skylar Scott's Wheeler built
Speaker 1: one in eighteen eighty two, twenty years before GE would
Speaker 1: file patents for its electric fan design. Another guy named
Speaker 1: Philip Deal took the electric fan and flipped it a bit,
Speaker 1: creating the first ceiling fan. He essentially took a fan blade,
Speaker 1: attached it to a sewing machine motor, and then bolted
Speaker 1: that motor to the ceiling in seven Now, I'm not
Speaker 1: sure what innovations General Electric contributed to the electric fan,
Speaker 1: but I will tell you I looked at lots of
Speaker 1: different sources when I was creating these these episodes, and
Speaker 1: many of them talk about two G. E invents the
Speaker 1: electric fan, which clearly is not the case. Uh No,
Speaker 1: they might have come out with an electric fan, and
Speaker 1: they probably did create some interesting innovations with the fan,
Speaker 1: but they didn't truly invent it had been around for
Speaker 1: two decades already. In nineteen o three, GE acquired the
Speaker 1: Stanley Electric Manufacturing Company, which manufactured transformers. In fact, William Stanley,
Speaker 1: the founder of the company, was the developer of the transformer.
Speaker 1: And a transformer in this case isn't a robot in disguise. Rather,
Speaker 1: it's an electrical device that inverts 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 fluctuating 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, than 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: roll over electricity distribution. This reached a crescendo in ninety
Speaker 1: five when Congress passed the Public Utility Company Holding Act.
Speaker 1: That act gave the securities an Exchange Commission, or sec
Speaker 1: the authority to break up holding companies so that the
Speaker 1: individual states in the United States could oversee operations within
Speaker 1: their borders. Abasco fought tooth and nail to keep its holdings,
Speaker 1: but ultimately lost that battle, and afterwards the entity that
Speaker 1: was Abasco would reorganize and become an investment company. Now
Speaker 1: I include the story here because it's just one of
Speaker 1: many examples of how General Electric drew focus and criticism
Speaker 1: for its operations, and it shows how powerful and influential
Speaker 1: the company has been over the years. All right, now
Speaker 1: we're gonna jump back to the timeline that we were
Speaker 1: covering before. So around the same time that Abasca was forming,
Speaker 1: a GE engineer named Ernst Alexanderson developed a type of
Speaker 1: high frequency alternator and we now call the Alexanderson alternator,
Speaker 1: and 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 zero, you
Speaker 1: can get a super conductor that doesn't lose any conductivity.
Speaker 1: Uh and if you use larger gauges of conductive material,
Speaker 1: you reduce resistance. But because of a variety of factors,
Speaker 1: most 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 deliver verge made to the
Speaker 1: New York Central Railroad in the company supplied thirty electric locomotives,
Speaker 1: each weighing in at ninety four tons. The locomotives had
Speaker 1: two thousand, eight hundred horsepower each. This isn't just an
Speaker 1: interesting tidbit in Gees history. The electric locomotive and rails
Speaker 1: in New York would shape the development of Manhattan itself,
Speaker 1: as did the electrical infrastructure. So one could argue that
Speaker 1: modern Manhattan wouldn't look anything like it does today without
Speaker 1: general electrics business in the area. That general electrics involvement
Speaker 1: itself was what helped shape the modern appearance of Manhattan,
Speaker 1: and because I'll probably forget about it before I get
Speaker 1: to the recent past. In a later episode, not very
Speaker 1: long ago from the recording, General Electrics spun off its
Speaker 1: locomotive business in a merger with another locomotive company called
Speaker 1: wab Tech w A B T e C. The eleven
Speaker 1: billion dollar deal saw GE and its shareholders take fifty
Speaker 1: point one percent stake in the ownership of this new company,
Speaker 1: with wab Text shareholders getting the other forty nine point nine.
Speaker 1: This was part of the larger effort to shed some
Speaker 1: of g S businesses. As I think it's already apparent
Speaker 1: that the company had grown extremely large, with lots of
Speaker 1: different departments involved in various industries. That was true even
Speaker 1: in the early nineteen hundreds, but it gets way more
Speaker 1: apparent as this series will go on. In nineteen o nine,
Speaker 1: engineers at General Electric, led by a guy named William Coolidge,
Speaker 1: developed the ductal tungsten filament for incandescent light bulbs. Tungsten
Speaker 1: holds together well at high temperatures, and it gives off
Speaker 1: a warm light when it incandescees, but it's also a
Speaker 1: pretty tough metal to work with. Coolidge created a process
Speaker 1: that made the metal easier and more appliable to work with,
Speaker 1: and it was off to the races. It made the
Speaker 1: Edison design much more efficient and practical, and it quickly
Speaker 1: became the standard material for light bulbs. It's essentially the
Speaker 1: same stuff you'd find in the filament in an incandescent
Speaker 1: light bulb today. In nineteen eleven, we have another acquisition
Speaker 1: sort of. General Electric absorbed a company called the National
Speaker 1: Electric Lamp Association or NILA in e l A, and
Speaker 1: that organization traced its own history back to nineteen o one.
Speaker 1: G had already been part of NILA's history, having become
Speaker 1: a shareholder in the company back in nineteen o two,
Speaker 1: just one year after it was founded, and providing the
Speaker 1: old Brush Electric Company facilities to serve as NILA's headquarters.
Speaker 1: Over time, General Electrics stake in the company grew, and
Speaker 1: federal courts took notice, and there were talks of antitrust concerns,
Speaker 1: and GE was essentially told it had to dissolve NILA,
Speaker 1: so General Electric absorbed NILA into its own overall business.
Speaker 1: NILA had recently finished building an industrial complex in Cleveland, Ohio,
Speaker 1: and NILA Park would become the first industrial park in
Speaker 1: the United States. And here's where I admit I finally
Speaker 1: looked up the definition for an industrial park because I've
Speaker 1: heard the term hundreds of times but never really thought
Speaker 1: to see exactly what the definition was. So imagine my
Speaker 1: surprise to find out it means pretty much what it
Speaker 1: sounds like. An industrial park is an area that is
Speaker 1: zoned for industrial development, kind of like how a business
Speaker 1: park or an office park is an area zoned for offices.
Speaker 1: Sometimes the obvious answer is in fact the correct one.
Speaker 1: In nineteen twelve, ge researchers developed improved vacuum tubes which
Speaker 1: would help usher in the early era of electronics. Before
Speaker 1: the development of the transistor, the vacuum tube was crucial
Speaker 1: for electronics. A vacuum tube is also known as a
Speaker 1: thermionic valve. Thermionic gives you a hint of One of
Speaker 1: the important concepts in this device has to do with heat,
Speaker 1: and vacuum tubes are in many ways similar to cathode
Speaker 1: ray tubes or light bulbs. Like a cathode ray tube,
Speaker 1: a vacuum tube has a cathode and an anode separated
Speaker 1: from each other inside a glass tube, and as the
Speaker 1: name vacuum tube tells, us. The inside of the tube
Speaker 1: has no air in it. It is a vacuum. Heating
Speaker 1: the cathode causes it to shed electrons in a process
Speaker 1: called thermionic emission. Applying a positive voltage to the anode
Speaker 1: plate attracts those electrons across the gap in the vacuum,
Speaker 1: creating a current flow. A vacuum tube with just two electrodes,
Speaker 1: the cathode and the anode, is called a diode. This
Speaker 1: is a type of tube that allows electricity to only
Speaker 1: flow in a single direction, so it's like a one
Speaker 1: way street electrical current. That we also have to remember
Speaker 1: that we described current as the direction of positive to negative,
Speaker 1: so 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 electrons, 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 anode. So if you applied a
Speaker 1: negative voltage to the control grid, the control grid will
Speaker 1: 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, it you turn off the flow entirely. But
Speaker 1: if you apply a positive voltage, that increases the number
Speaker 1: of electrons that flow through to the anode. And in fact,
Speaker 1: such a vacuum tube can be used to amplify an
Speaker 1: electrical signal. So let me explain how that works really quickly.
Speaker 1: See a small signal coming into the control grid, perhaps
Speaker 1: one created by say a radio wave, can be converted
Speaker 1: into 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 the 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 could
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 monopoly sick capitalist that being JP Morgan. It had
Speaker 1: hardly any competition to speak of, being part of a
Speaker 1: do woppoli with Westinghouse and having far more of the
Speaker 1: market share in the United States, and its focus on
Speaker 1: research and development as well as acquisitions, meant it was
Speaker 1: becoming increasingly powerful and cementing its near future. Now, in
Speaker 1: the next episode, we'll look at how ge would play
Speaker 1: an 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
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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. Text Stuff is a production of I
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