For every dollar paid by you for De Forest preferred or common stock there will be issued $1.10 worth of United Wireless Telegraph Company preferred stock, plus 5% thereon for every year the stock has been held by you for over one year. To holders of bonds who desire to exchange them for preferred stock, we will exchange by allowing 20 percent on the par value of the bonds and the holder will be allowed to retain his bonus stock. To the holders of bonus, cut rate, or broker's stock we will exchange at the rate of one share of United for six of American De Forest. This applies either to preferred or common stock purchased prior to January 1, 1907. All stock exchanged must be held in escrow in bank or trust company for two years.4For the first time De Forest realized White's true intentions and strenuously objected to his actions. This aroused White's ire. He completely ignored De Forest and left him completely out of the new organization. In a letter to Frank Butler, dated 10 October 1906, De Forest explained the existing situation:
That philanthropist has cut me off entirely. I can't get a dollar from the company nor will he allow me to sell my stock.For his entire holdings in the American De Forest Wireless Telegraph Co., including all patents excepting those pending on the three-element vacuum tube, De Forest received a paltry $500. His attorney pocketed one-half of that.
. . . It's pretty tough after all I've done to make the enterprise out of which so many were reaping huge commissions a success . . . to get this treatment . . . As soon as your immediate usefulness was ended, it was a case of "to hell with you." I might have foreseen my own treatment from the treatment you received . . . Reformation is an impossibility. There will be no great things in wireless until the present management is out.
. . . Just as I was arranging to leave New York for Pittsburgh I received a telephone call from Colonel Wilson, President of the United Wireless, asking for an interview. I informed him I was leaving New York that evening, and would not be able to see him until my return to New York. He asked me what time I was leaving and I said 9:30 p.m. and he asked me to see him at his hotel, Waldorf Astoria, on my way down at 7 o'clock. He then asked me at the interview to become president of the United Wireless Telegraph Company, saying he would retire if I accepted. He also promised me a block of the company's stock. I said I would not under any circumstances accept his proposal as the company had degenerated and was being used to swindle the people by selling them stock that had no value and my final remark was that the company was ''conceived in sin and brought forth in iniquity." He was furious.6Unfortunately, no date is connected with the above. Obviously, Wilson, at that time, was looking at the "handwriting on the wall" and was searching for a scapegoat. He did not succeed in accomplishing this, for in 1910 he was adjudged guilty of perpetrating a fraud and, like his erstwhile associate, White, was sentenced to be a Government guest in the Federal Penitentiary, Atlanta, Ga. Following this, the company continued to suffer reverses. The notoriety incident to Wilson's conviction ruined the further sales of stock. In 1912, it was adjudged guilty of infringing Marconi patents and was forced into bankruptcy. Its few remaining assets were purchased by the parent Marconi Co. and given gratuitously to the American Marconi Co.
It will come true quicker than you think. I am prepared to take your order today for a 100-kw. set embodying the very latest features in wireless and which will connect you at will with every ship in our service.Sweet was impressed with the old gentleman's sincerity, and took him to see his superior, who directed him to investigate and contract with Firth, provided the equipment would be guaranteed to meet the specified requirements.25 Although his connection with the National Electric Signaling Co. may have been suspected, since his own firm did not manufacture transmitters, he did not reveal it until after the decision was made. Regardless of Firth's offer, specifications had to be drawn up and bids requested on the equipment from all possible suppliers. This was done and, additionally, two ship installations were included.
On Jan. 5 proposals for furnishing long-distance wireless plants for the Navy will be opened, consisting of a sending station at Washington, having a range of 3000 miles, and two equipments for vessels having a receiving range of 3000 miles and a transmitting range of 1000 miles. The circular for prospective bidders is a formidable document which, if taken too seriously, might well deter any manufacturer from submitting a proposal. Aside from forms, there are 33 paragraphs, of which 31 consist mainly of conditions to secure the government from any possible loss, or exercise of any generosity toward a manufacturer who might, in his zeal to meet the need by the government for such a plant, too lightly pass over the difficulties incident to its design and construction--these precautions recalling the interesting game of "Heads I win, tails you lose." Apparently exhausted in the work of preparing these safeguards, the writer of the document confines to two paragraphs of the specifications to guide the successful bidder, as follows;One of the above mentioned "31 paragraphs" reserved the right "to award the contract for either of the items, to accept any bid, to waive any defects or informalities in the proposals, and to reject any or all bids."
"The station to be capable of transmitting messages at all times and at all seasons to a radius of 3,000 miles in any navigable direction from Washington, D.C. Such messages must not be interrupted by atmospheric disturbances or intentional or unintentional interference by neighboring stations. The station to be capable of transmitting and receiving messages with entire secrecy. The contractor must supply the necessary concrete buildings, with living accommodations for four operators, towers, ground connections, wiring and apparatus complete. Such to be erected at or near Washington, D.C., the exact location to be decided at a later date.
"Two sets of apparatus installed on board vessels of the United States Navy, to be capable of transmitting and receiving messages at all times, in all seasons and in all latitudes, to and from a distance of 1000 miles, and to receive messages from the high-powered station above-mentioned at a distance of 3,000 miles at all times, the apparatus to be capable of transmitting and receiving messages at the maximum radius with entire secrecy and without the possibility of interruption due to atmospheric conditions or intentional or unintentional interference. These sets to include as an adjunct wireless telephone apparatus capable of establishing and maintaining satisfactory communication to a distance between ships of 100 miles. Such communication to be sustained without adjustment of instruments or interruption therefrom for periods of at least 5 minutes. This ship apparatus must be so constructed as to be installed in a room with 100 sq. ft. deck space. The antenna must be so disposed as not to require a change in the height or distance between masts or to materially change the outward appearance of the vessel.26
Marconi Wireless Telegraph Co. of America
$249,245 to $361,094
Stone Telephone & Telegraph Co.
$100,000 to $275,000*
Collins Wireless Telephone Co.
Radio Telephone Co.
National Electric Signaling Co.
Telefunken Wireless Telegraph Co.
Massie Wireless Telegraph Co.
*Bid did not guarantee to meet specifications.
%Both items and buildings and towers.
#Both items but not buildings and towers.
. . . this much is clear about Fessenden as an inventor: in the period from 1905 to 1913 he succeeded in competition with the better organized and aggressive Marconi enterprises, in developing a wireless system which, from a patent point of view, was completely self sustaining.33
As the matter stands we alone possess the sure knowledge to foretell a revolution in the art of Radio. That revolution will come whether with or without our help. But whereas on the one hand we stand to gain the credit that comes of clear-cut, scientific investigation, confident judgment and decisive action, taking the leading place in a progressive movement, on the other we are placed in the position of indecision, timidity, self-mistrust--in short, inefficiency.38
The colonel was an engaging character and a great salesman. He used to drop in at least once a month to see us, to see what was going on and to see what he could sell us. I became very fond of the old man. There was no question about it, he wasn't in business for his health and the prices he charged were pretty exorbitant in my opinion, but he had valid patents. It was a matter of detectors which finally made me take a step which has since caused me to wonder about the ethics of the business. We didn't have much money and I finally told him, 'Colonel you will have to bring down the price of those crystal detectors we're buying from you. We were paying $75.00 a set for them and I judged they could be made for about two dollars and five dollars would have allowed him a fair profit. I said, 'of course, we have to have them and we haven't the money to pay you $75.00 a set. Now what I am going to do is pirate those sets and make them ourselves. We have to have them. You would have a good claim against the government for infringement of your patent and you can go to law about it. In two or three years you can undoubtedly get some compensation, but you will have to pay a good deal of legal fees, but we must have them and unless you do better that is going to happen.' He came back in a few days and said I had him over a barrel, that it was a dirty trick and a few other good-natured remarks of that sort, but thinking it over he thought he could let us have those detectors for fifteen dollars a set. I told him I thought we could do that and we went ahead."In early 1912 Firth sold his stock in the company to the United Fruit Co., which then gained control of the firm. Firth then established the Wireless Improvement Co.