Rerun: The Founding of G&E

General Electric has been around for more than 100 years. It's recently been in a bit of a slump. How did this company get started?

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Episode Transcript

Speaker 1 (00:04):
Welcome to Tech Stuff, a production from my Heart Radio.
Hey there, and welcome to tech Stuff. I'm your host,
Jonathan Strickland. I'm an executive producer with I Heart Radio
and I love all things tech and I am currently
on vacation. If you are in the Disney World area,

(00:27):
you might see me. Um. By the way, it was
a big decision to actually go through with this vacation
and to go to Disney World, one that I'm still
conflicted over. But I am fully vaccinated, as is my
entire family, and we're all going to be super precautious,
you know, making sure that we wash our hands thoroughly,

(00:49):
and we were wearing masks and all that kind of stuff.
But I'd be lying to you if I said I
was comfortable with this, but hopefully we have a fun
time and I were turn home healthy and happy, and
um yeah, that's that's the best we can hope for.
But I didn't want to leave you without any episodes
while I'm away, and so I thought something that would

(01:12):
be interesting to do. What to be revisit a series
of episodes I did in September of two thousand nineteen,
and it was a deep dive into the history of
General Electric a k a. G And the reason I
wanted to bring these back for this week is that
we recently heard that g E is going to split

(01:34):
into three separate companies, one that will focus on healthcare,
one that will focus on energy, and one that will
focus on aviation. It will be the aviation one that
retains the name GE, by the way, so it's kind
of the end of an era, and I thought it
would be interesting to go back and listen to this

(01:56):
series of episodes where we do a deep dive on
the history of g E. So sit back and relax
and listen to The Founding of GE, originally published on
September second, two thousand nineteen. In mid August two thousand nineteen,
a financial analyst named Harry Marcopolis released a one hundred

(02:19):
seventy five page report alleging that g E, that is,
General Electric, the venerable company that is more than a
century old, was secretly on the verge of insolvency. He
claimed the company was using accounting tricks to hide an
enormous threat to its very existence, something akin to the

(02:40):
Shenanigan's in Ron polled years ago, and giving Marcopolis some
credibility was his own history. He had raised warning flags
about Bernie Madeoff before the world found out about Madeoff's
Ponzi scheme. And to learn more about Ponzi schemes, you
should look up the classic stuff you should know episode
all about It. It's great, particularly with the way Chuck

(03:03):
adopted It's a Ponzi scheme into that and subsequent episodes.
Now as I record these episodes, the report and the
responses to it are still part of the news cycle.
GE and some third party analysts have disputed Marcopolis's findings,
claiming that Marcopolis himself actually stands to earn a lot

(03:24):
of money by taking down GE. And Marcopolis has said
he was hired by a Hedge fund to look into
GES practices, but he refuses to name the fund as
of the recording of this podcast. Meanwhile, some other third
parties seem to agree with at least some of Marcopolis's findings,
and GE has been under increased scrutiny for its accounting

(03:46):
practices over the last few years. So there are a
lot of unanswered questions around this, and it's by no
means a settled matter. I don't know if Marcopolis's allegations
reflect reality, and in fact, if I'm being totally honest,
I don't even understand all of those allegations. And in
the interest of full disclosure, I have not read the

(04:06):
full one report, but I did think it would be
good to do a full rundown on the history of
General Electric. It is an incredibly influential company, and it
spans many industries it has had and and it's heart
to stress how big an impact it has had on

(04:28):
the history of the United States in particular and tech
in general. Now I should also add that back in
two thousand twelve, Chris Palette and I recorded three episodes
about the history of GE. But Tech Stuff was a
different kind of show back in those days, so I
thought it might be good to take a deeper dive

(04:48):
into the history and see how GE shaped technology. And
beyond that being said, if I were to do a
comprehensive history on the company and all its subsidiaries, this
series last a dozen episodes or more. So to avoid
making this episode and this podcast turned into GE Stuff,
I'm going to try and focus on what I think

(05:09):
are some of the most important historical moments of GE,
and a lot of that is in those early years.
So let's go back to where it all began. And
like many corporate histories, this involves going back to older
companies that would form the foundation for the one we
actually want to talk about. So strap in guys and
women and all others. I don't mean to lump everybody

(05:32):
in under the term guys. Anyway, we all know about
Thomas Edison, right. He was an inventor, he was an entrepreneur,
He was a master at self promotion and more. And
some folks might throw in some less complementary labels in there,
perhaps suggesting he was also a thief, or if that's
going too far, someone willing to take credit for the

(05:54):
work of people who are working beneath him. But whatever
your opinion of the fellow, Edison got stuff done. In
the eighteen seventies, Edison was working on the light bulb,
and no, he didn't invent the light bulb, but that's
a story for another podcast. In fact, my former co
host Chris Poulett and I actually did cover that story

(06:15):
in an episode titled tech Stuff Gets a Bright Idea,
which published on October twenty nine, two thousand twelve. But
Edison did make improvements on the lightbulb, working with his
engineers to discover a material to serve as a suitable
filament too in condess, brightly enough, and long enough to
be a practical use. In eighteen seventy eight, Edison founded

(06:38):
a company to concentrate on that goal. It was the
Edison Electric Light Company. He had some big names in
US history, particularly US financial history, as his investors, folks
like the Vanderbilts and JP Morgan. Now Morgan is going
to become very important to this story. Now. At the time,

(06:59):
he had yet to find a suitable approach. The lightbulbs
he made would burn out in just a few hours.
The following year, in eighteen seventy nine, his company produced
a lightbulb able to last for forty hours. Not superb
by any means, but a real sign of progress, and
Edison boldly stated that his company would make electricity affordable

(07:20):
enough so that only the wealthy would ever burn candles.
That same year, again, eighteen seventy nine, for those who
have forgotten, a couple of teachers created their own company.
Edwin James Houston was a physics teacher, and Alihu Thompson
taught chemistry and mechanics at the Central High School for

(07:41):
Boys in Philadelphia. They created a company called the American
Electric Company in New Britain, Connecticut, with the help of
some local investors. In eighty three, a different group of investors,
this time from Massachusetts, bought out the company from the
original group of investors and the company got a new name,
the Thompson Houston Electric Company. Thompson would head up the

(08:05):
research and development department, which was called the Model Room.
A fellow named Charles A. Coffin, the head of the investors,
would lead the company and act as a sort of
president and chief financial officer, while Elwyn W. Rice led
the manufacturing part of the business. Both of those names
will be important for Ge and Charles Coffin wasn't a

(08:28):
physicist by nature. No, he was a man with a
lot of soul. And by that I meant he was
a shoe manufacturer, as a dad joke for you. So
where many of his fellow investors. They were all from
the shoe manufacturing industry, and they were all located in Lynn, Massachusetts,
and they pulled their money to purchase this burgeoning, this

(08:52):
this blossoming electric utility company, the Thompson Houston Electric Company
would relocate its headquarters to Lynn, Massachusetts, and get back
to that company in just a second. Edison was not
just working on lamps in the eighteen seventies and eighteen eighties.
He was also creating some of the first generators. These
are devices that would convert mechanical energy into electrical energy.

(09:16):
On December seventeen eighty, he founded the Edison Electric Illuminating Company.
In eighteen eighty two, he was responsible for building and
operating the first steam generated power station in London to
power street lamps and a few private homes that were
not far from the power plant. In New York, he
was responsible for creating an electric power distribution system called

(09:40):
Pearl Street Station, which supplied electricity to fifty nine whole
customers in Lower Manhattan. Now, at the time, not everyone
was sold on the idea of this new fangled electricity
replacing candles and gas lamps, so as an incentive, Edison's
company offered the first three months of service at no charge.

(10:03):
He also began to acquire smaller businesses that were likewise
getting into the electrical power generator game, and by eighteen
ninety this motley group of companies merged to form Voltron,
and by Voltron, I mean they became the Edison General
Electric Company. It was this company that in eight installed

(10:25):
electrical wires and switching equipment in the United States White House,
and that made Benjamin Harrison, the twenty third President of
the United States, the first US president to have electricity
in the White House. Back to the Thompson Houston Electric Company.
Like Edison, Charles Coffin was determined to be a big
player in the electricity generating business. He had led Thompson

(10:49):
Houston to go international and he bought out a British
company called the Brush Company, which did not sell brushes. No,
it was actually founded by a guy named Charles Brush,
and it was a company that had patents for stuff
like dynamos and had been in litigation with Thompson Houston
Electric Company over some technologies. But we all know the

(11:11):
old saying, right, if you can't beat them, by them,
and that's what Thompson Houston Electric Company did. So both
Edison General Electric Company and the Thompson Houston Electric Company
were buying up competitors and more importantly, patent holders. So
they each had dozens of patents to their name, and

(11:33):
they were quickly becoming the dominant players in electricity generation
and distribution in the Northeast United States, and there was
just enough overlap to make business tricky for both companies.
Without stepping on the toes of the other, they could
have become great rivals, and in fact they kind of were.
Henry Villard, who was the president of Edison General Electric

(11:55):
Thomas Edison, wasn't involved in the day to day operations
of the company. Villard had an idea both Edison and
Thompson Houston were in a bit of a cash crunch
as the market was in a bit of a slump.
In addition, because both companies owned dozens of patents, that
made it hard to be the sole provider of any
kind of electrical infrastructure. Business was too expensive. It was

(12:20):
not just expensive to lay out the infrastructure, but you
had all these legal battles that would come up because
one company would allege that the other company was infringing
on one or more patents. There were several lawsuits pending
around patents, and there would likely be even more in
the future. Villard wanted to solve all these problems by
having the two companies merge. Edison reportedly hated this idea

(12:44):
and advised against it. Villard felt that the Edison Company
was in a dominant position and could effectively define the
terms of the merger, and so he tried to move
on ahead. Then we get back to JP Morgan, the financier.
He had arrived at a similar conclusion regarding the merger,
but he felt that the Thompson Houston Company was actually

(13:08):
the one that was in a stronger position, and because
Morgan was Mr. Money Bags, he went behind Villard's back
and began wheeling and dealing to make the merger happen,
but on very different terms than what Villard was thinking.
Morgan spearheaded the effort to merge these two companies together
to form a new entity, one that would become known

(13:30):
as the General Electric Company and later g E. The
headquarters for the company would be in Schenectady, New York,
and Morrigan effectively removed Thomas Edison and Henry Villard from
any sort of leadership role. Edison didn't even know about
the merger until the day before it actually happened. Yikes,

(13:52):
with their powers and patents combined, the two former competitors
could rapidly expand throughout the Northeast and beyond and moreover,
the merger meant that the electric utilities industry in the
United States was now split between just two companies because
General Electric companies had been swooped up, you know, all

(14:14):
Thomas Houston and Edison Electric had brought up all these
smaller utilities, as had Westinghouse, the other big competitor in
the US. So now the electric utilities industry in the
United States was a dowopoli. It was either General Electric
or it was Westinghouse and General Electric and Westinghouse had
been part of a patent pool agreement in eight so

(14:38):
this was a big deal. It would also mean the
end of the war of the currents between direct current
and alternating current. I have a little bit more to
say about that in a minute. Now. I'm of two
minds about this merger that JP Morgan initiated. Generally speaking,
I'm in favor of competition in markets because that's usually

(15:00):
what ends up being best for the consumer. It's way
better if you have options and choices, because companies will
do different things in order to get customers, which usually
means cutting a better deal. But we're also talking about rain,
which most people didn't even have access to electricity. The
infrastructure itself had not been laid out, so there was

(15:21):
a real need to do that, and with competition in
the way, it made laying out the basic infrastructure to
get electricity to people harder to do. The same thing
would be true of the telecommunications industry, getting telephone lines
out to people. It was tough to do that while
also competing with other companies, and it could mean that

(15:43):
you could have different standards, corporate defined standards that are
incompatible with one another, laying out different regions. It was
just a big mess. So you could argue that the
monopoly like approach was actually been a official at least
to establish the infrastructure. It just wasn't a good thing

(16:06):
to have as an ongoing thing. The newly formed company
started in eighteen nine two, and Charles Coffin would serve
as the first president. So though you could trace the
history as far back as eighteen seventy eight, I think
is a reasonable reckoning day for g E. S Natal day.

(16:27):
Now we're gonna take a quick break, but when we
come back, we'll talk a little bit more about what
GE was doing during its first few years of existence.
In eighteen nine three, Edison's company developed an electric locomotive

(16:48):
that could use electricity to reach speeds of around thirty
miles per hour, which the company showed off at the
Chicago Exposition. This was another opportunity to demonstrate how electricity
could be used to a curious audience, and it helped
promote the industry. You gotta remember again in eighteen nine,
electricity is a brand new concept and to show that

(17:09):
it had the power to do something that typically would
be done with a steam engine was a very compelling
use case. In eighteen four, Thomas Edison chose to sell
his shares in General Electric. He would continue to serve
as a consultant for the company, but the Wizard of
Menlo Park would no longer be seen as the driving

(17:29):
force or voice for General Electric, and to be fair,
ever since the formation of the company he had little
say in its direction. While the name and headquarters favored
Edison's old company, the management for General Electric largely came
from the Thompson Houston Electric Company. So Edison out and
at just four years old, General Electric would become part

(17:52):
of financial history. See in eighteen ninety six, there was
this guy named Charles Dow and he took stocks of
twelve large industrial companies to create a stocks average, and
it was a sort of indicator as to how things
were going in the industrial market overall. You would watch

(18:12):
the averaged performance of these twelve companies and that would
kind of tell you how things were going. As a
broad rule of thumb, one of those twelve original companies
was you guessed it, General Electric. All of the original
dozen companies, GE would be the only one to survive
and remain on the dal Jones Industrial Average for more

(18:35):
than a century, though spoiler alert, GE was removed from
the dal Jones Industrial Average in two thousand and eighteen,
but I'll talk more about that in a later episode.
Also in eighteen ninety six, Eli Hu Thompson, one of
the founders of the Thompson Houston Electric Company and a
consultant at GE, created an improved X ray tube. So

(18:59):
let's talk about X rays for a second. X rays
are a type of electromagnetic radiation and they have a
very short wavelength, much shorter than visible light. So if
you were to look at a spectrum of electromagnetic radiation
from longer wavelengths to shorter at the longest end would
be radio waves. Those stretch very long, in some cases

(19:22):
more than a kilometer. Then if you move down the spectrum,
you come to microwaves below that are infrared waves. Then
you have visible light, then you have ultra violet light.
Then you have X rays. If you were to go
even smaller on the wavelength scale, you would then reach
gamma rays. X rays form when a charged particle like

(19:43):
an electron, experiences acceleration or deceleration, and you want to
have it be in a very controlled way to generate
specific X rays of a particular wavelength. Wilhelm Conrad Rerunchen
and I always mess up that name. I apologize, but anyway,
this is the fellow who first discovered X rays. In
eight he was working with cathode ray tubes in a lab.

(20:08):
These are crt s. Is the source of stuff you
would find in old television sets. And he had concluded
that there was a type of ray that was invisible
to the eye, and it could pass through lots of
solid stuff like heavy black paper. In fact, he figured
it could passed through lots of different stuff, and it
could cast shadows of solid objects. It could pass through

(20:29):
flesh but not bone. And one of the earliest experiments
he conducted with this discovery was to use film to
capture an X ray image of his wife's hand so
that she could see the skeletal structure of her hand.
So an X ray tube converts energy. Specifically, it converts

(20:49):
electrical energy into two other types of energy. One of
those is heat and the other is X radiation. Ideally,
you want to produce specific X radiation and you want
to minimize heat production because really heat represents waste, it's
lost energy in this case, so are the way we
think of heat being waste energy for a car engine

(21:12):
as another example. So, an X ray tube is a
particular type of cathode ray tube. That means inside the tube,
which looks a little bit like a lightbulb, you have
an element called a cathode and you have another called
an anode. Electrical current flows through the tube and electrons
flow from cathode to anode. The cathode connects to the

(21:35):
negative side of the circuit, the anode connects to the
positive side. So in other words, you can think of
the cathode as the component that sheds or contributes electrons.
The anode is the component that accepts electrons. As part
of this process, electrons lose energy as they move through
the circuit, and this generates X radiation. The material in

(21:56):
the anode and the energy of the electrons determines how
the energy gets converted into heat rather than X radiation.
Modern X ray tubes frequently have tungsten anodes, and there's
a lot more we could explore with X rays, but honestly,
I think that would require its own episode, so we'll
just leave it here. Just know that the X ray

(22:16):
tubes are pretty similar to the tubes you'd find in
old CRT televisions or monitors, though not modern TVs or
displays because they they don't use cathode ray tubes anymore.
The important thing for our episode here is that GE
became a leader in that space, with Thompson creating the
improved X ray tube just one year after X rays

(22:38):
had even been discovered. In nineteen hundred, Thomas Edison, still
working as a consultant for General Electric, partnered with Willis R.
Whitney and Charles Steinmitz to create the first industrial research
laboratory in the United States. The purpose of the facility
was to act as an experimental division for GE, where

(23:01):
engineers and scientists would work on innovating new technologies and
new applications of existing tech, and even making scientific breakthroughs.
It was in this facility where GE researchers could conduct
original research projects. The functions of this facility closely resembled
a model practiced in German universities. Much of the early

(23:22):
work in the research lab focused on improving the existing
technologies that GE was producing at the time. It was
only after a few years that the engineers were starting
to look at totally new types of technology, scientific principles
and applications. Also, this is where we get a little
Monty Python and the Holy Grail with the lab. The

(23:43):
original lab was not particularly grandiose. It was a barn
located behind the house of one of the researchers for GE. But,
and this will probably come as a surprise to absolutely nobody,
because they were working with electricity and heating elements, that
particular lab ended up catching fire and it burned down.

(24:04):
After that, GE re established the lab in Schenectady, New York.
The head of the research division was a professor from
m I. T. And I'm sure there were many more
fires over the following years, but as far as I know,
none of them burned The whole lab down to the
ground again. One early invention to come out of the
lab was the electric fan in n two. Now, there

(24:27):
is a small issue with this, and that other inventors
had already created electric fans years earlier. An inventor with
the fabulous name Skyler Scott's Wheeler built one in eighteen
eighty two, twenty years before GE would file patents for
its electric fan design. Another guy named Philip Deal took

(24:50):
the electric fan and flipped it a bit, creating the
first ceiling fan. He essentially took a fan blade, attached
it to a sewing machine motor, and then bolted that
motor to the ceiling in seven Now, I'm not sure
what innovations General Electric contributed to the electric fan, but
I will tell you I looked at lots of different
sources when I was creating these these episodes, and many

(25:13):
of them talk about two G E invents the electric fan,
which clearly is not the case. Uh. Now, they might
have come out with an electric fan, and they probably
did create some interesting innovations with the fan, but they
didn't truly invent it. It'd been around for two decades already.
In nineteen o three, GE acquired the Stanley Electric Manufacturing Company,

(25:36):
which manufactured transformers. In fact, William Stanley, the founder of
the company, was the developer of the transformer. And a
transformer in this case isn't a robot in disguise. Rather,
it's an electrical device that converts alternating current electricity from
one voltage to another. And depending upon its design, a
transformer can step up or step down the voltage and

(26:00):
it only works on alternating current. So let's talk a
bit about this and why it's important. Alright, at the
dawn of the age of electricity, you had the current Wars,
the brew haha over whether regions should invest in direct
current or alternating current for the purposes of distributing electricity.

(26:21):
Edison was in favor of direct current. Direct current is
the same sort of current you'd get with a battery.
The electricity flows one way only through the circuit. It's
a one direction type of thing. It's simple. But at
the time, transmitting direct current over longer distances was impractical.

(26:41):
So it worked fine if you were in a dense
urban environment and you could build power generation plants at
regular spots around the region, but it wouldn't didn't work
so great if you're talking about stretching across rural areas,
that the transmitting direct current at lower voltages was inefficient.
You lost too much electricity along the way, and it

(27:04):
higher curtains. That was considered higher voltages, I should say
it was considered very dangerous. Now, inter alternating current with
alternating current, the flow of electricity reverses many times a second,
going one way down the path and then reversing to
go the other way. And one benefit of this approach
is that you can create transformers to step up the

(27:26):
voltages for purposes of transmitting electricity over long distances, and
then have another transformer on the other end to step
the voltage back down so it can be used in
households safely. And it all has to do with electromagnetism.
Electricity flowing through a coil of wire creates a magnetic field,
and if it's alternating current going through that coil, so

(27:48):
it's you can think of it as going down the
coil of wire and then reversing and going up the
coil of wire and doing that many, many, many times
per second. Well, then it creates a fluctuay eating magnetic field. Now,
if you were to bring a second coil of wire
within that fluctuating magnetic field from the first coil of wire,

(28:08):
something interesting happens. All right, we've got coils A and B.
Each coil is wrapped around its own ferro magnetic core
of iron or steel, something that can be magnetized. We
run an alternating current of electricity through coil A. Then
we bring coil B, with no current running through it,

(28:29):
close enough so that it is within the fluctuating magnetic
field that is generated as a consequence of coil a's
electric current. That fluctuating magnetic field then induces a second
electric current to flow through coil B. So now coil
B is carrying a current because of being in that

(28:49):
fluctuating magnetic field from coil A. Even more interesting is
that if coil B has more coils or turns, as
we call it, then coil A does, The current running
through coil B will have a higher voltage. The relationship
between the number of turns is called the transformer turns ratio.
So a power plant could run current through a line

(29:12):
to a transformer and through the use of two sets
of coils, step up the voltage significantly. For a long
distance transmission, where higher voltage is more efficient. I wonder
if Thomas Edison was peeved the General Electric was purchasing
companies that were building tech for alternating current applications. Actually,

(29:32):
I don't have to wonder he was. He was pretty
pretty upset about He did not like the idea of
losing the War of the currents, even well after that
war was settled. In nineteen o five, GE formed the
Electric Bond and Share Company also known as Abasco e

(29:54):
B A s c O. This was a holding company.
Holding company as a company that exists largely to hold
onto the stock of other companies. Usually, a holding company
doesn't actually, you know, do anything. Its purpose is truly
just financial in nature. GE used the employee Retirement Investment

(30:17):
Fund for its employees to purchase securities from smaller electric
utility companies. This was largely in an effort to monopolize
the electric utility industry. This was something that financier JP
Morgan was very keen on doing. A few other utilities
holding companies would be would would pop up and scoop

(30:39):
up other regional companies, and so you started to see
even less competition in the region, and this would spell trouble.
I'll explain more in a second, But first let's take
another quick break. Now I'm going to stick with this

(31:01):
story about the holding company for a moment, and then
we'll give back to the timeline. We're gonna go down
this particular path just to get a complete picture of
this story. So Abasco ends up controlling tons of companies
and would even form subsidiaries of its own holding company

(31:22):
to oversee groups of these because there were just so many.
So you might have a subsidiary of Abasco that itself
was a holding company for like ten other companies. So
eventually the United States government pays attention and comes to
oppose the monopolization of utilities and says, you know, it
was okay when we were laying out the infrastructure to

(31:42):
make sure people got access to electricity, but now we're
not so comfortable with one company having this much control
over electricity distribution. This reached a crescendo in ninety five
when Congress passed the Public Utility Company Holding Act. That
act gave the securities an Exchange Commission, or sec the

(32:03):
authority to break up holding companies so that the individual
states in the United States could oversee operations within their borders.
Abasco fought tooth and nail to keep its holdings, but
ultimately lost that battle, and afterwards the entity that was
Abasco would reorganize and become an investment company. Now I

(32:25):
include the story here because it's just one of many
examples of how General Electric drew focus and criticism for
its operations, and it shows how powerful and influential the
company has been over the years. All right, now we're
gonna jump back to the timeline that we were covering before.
So around the same time that Abasca was forming, a

(32:46):
GE engineer named Ernst Alexanderson developed a type of high
frequency alternator and we now call the Alexanderson alternator, and
it was for the purposes of creating a radio transmitter.
He was doing this upon request from another guy, an
inventor named Reginald Fessenden, who had been trying to solve
the problem of sending sound over radio waves, essentially radio broadcasting.

(33:12):
Fessenden had figured out that he needed a much higher
frequency alternator than what was currently available to achieve his goal,
so he sent out the request to GE and Alexanderson
started to work on the project. An alternator, by the way,
is a device that creates an alternating current. The Alexanderson
alternator could create a continuous radio wave, and that's a

(33:34):
radio wave with a constant amplitude and frequency. I won't
go into it further here, as I've done plenty of
episodes about radio waves and technology, but it would be
an early example of how General Electric would become an
important part of the history of radio. So far, I've
been talking about electric utilities and radio waves. But around
the same time so nineteen o five or so, General

(33:57):
Electric would also dip its enormous corporate toe into the
tempting waters of consumer appliances. The first one I could
find on General Electric's own website was the Model D
twelve and electric toaster. Other sources cite a nineteen o
six electric range as the first consumer product. The toaster,

(34:19):
by the way, looks terrifying to me because it doesn't
have any solid surfaces. It's essentially a couple of racks,
open air racks that holds slices of bread and they
are placed on either side of a series of unprotected
heating coils. So I would imagine this thing was quite

(34:41):
the fire hazard in its day. Oh and in case
you wonder like, how does this stuff work? That's easy.
Conductive materials, that is, materials that can conduct electrons are
usually not perfect conductors most of the time. Now, if
you can cool one down to near absolute z euro
you can get a super conductor that doesn't lose any conductivity. Uh.

(35:04):
And if you use larger gauges of conductive material, you
reduce resistance. But because of a variety of factors, most
conductors have a certain amount of resistance to electric current.
Based on all these different variables, that resistance manifests as heat. Now,
normally we don't want heat in our conductive materials. Electronics

(35:27):
don't respond too well with getting hot. But with stuff
like electric ranges and toasters, the whole point is to
generate heat. We use materials that have a resistance so
that enough electrical energy will convert to heat in order
to cook or toast whatever it is we're exposing to
those elements. On the other end of the scale from
a countertop toaster is the delivery g E made to

(35:51):
the New York Central Railroad in nine. The company supplied
thirty electric locomotives, each weighing in at ninety four tons.
The locomotives had two thousand, eight hundred horsepower each. This
isn't just an interesting tidbit in gees history. The electric

(36:11):
locomotive and rails in New York would shape the development
of Manhattan itself, as did the electrical infrastructure. So one
could argue that modern Manhattan wouldn't look anything like it
does today without General Electrics business in the area. That
General Electrics involvement itself was what helped shape the modern

(36:33):
appearance of Manhattan. And because I'll probably forget about it
before I get to the recent past. In a later episode,
not very long ago from the recording, General Electrics spun
off its locomotive business in a merger with another locomotive
company called wab Tech w A B T e C.

(36:53):
The eleven billion dollar deal saw ge and its shareholders
take fifty point one at stake in the ownership of
this new company, with wab Text shareholders getting the other
forty nine point nine. This was part of the larger
effort to shed some of g S businesses, as I
think it's already apparent that the company had grown extremely large,

(37:16):
with lots of different departments involved in various industries. That
was true even in the early nineteen hundreds, but it
gets way more apparent as this series will go on.
In nineteen o nine, engineers at General Electric, led by
a guy named William Coolidge, developed the ductal tungsten filament
for incandescent light bulbs. Tungsten holds together well at high temperatures,

(37:41):
and it gives off a warm light when it incandescees,
but it's also a pretty tough metal to work with.
Coolidge created a process that made the metal easier and
more pliable to work with, and it was off to
the races. It made the Edison design much more efficient
and practical, and it quickly became the standard material for
light bulbs. It's essentially the same stuff you'd find in

(38:03):
the filament in an incandescent light bulb today. In nineteen eleven,
we have another acquisition sort of General Electric absorbed a
company called the National Electric Lamp Association or NILA in
e l A, and that organization traced its own history
back to nineteen o one. G had already been part

(38:25):
of NILA's history, having become a shareholder in the company
back in nineteen o two, just one year after it
was founded, and providing the old Brush Electric Company facilities
to serve as NILA's headquarters. Over time, General Electrics stake
in the company grew, and federal courts took notice, and
there were talks of antitrust concerns and GE was essentially

(38:47):
told it had to dissolve NILA, so General Electric absorbed
NILA into its own overall business. NILA had recently finished
building an industrial complex in Cleveland, Ohio, and NILA Park
would become the first industrial park in the United States.
And here's where I admit I finally looked up the

(39:08):
definition for an industrial park, because I've heard the term
hundreds of times but never really thought to see exactly
what the definition was, So imagine my surprise to find
out it means pretty much what it sounds like. An
industrial park is an area that is zoned for industrial development,
kind of like how a business park or an office
park is an area zoned for offices. Sometimes the obvious

(39:32):
answer is in fact the correct one. In nineteen twelve,
GE researchers developed improved vacuum tubes, which would help usher
in the early era of electronics. Before the development of
the transistor, the vacuum tube was crucial for electronics. A
vacuum tube is also known as a thermionic valve. Thermionic

(39:55):
gives you a hint of One of the important concepts
in this device has to do with heat and Vacuum
tubes are in many ways similar to cathode ray tubes
or light bulbs. Like a cathode ray tube, a vacuum
tube has a cathode and an anode separated from each
other inside a glass tube, and as the name vacuum
tube tells us, the inside of the tube has no

(40:18):
air in it. It is a vacuum. Heating the cathode
causes it to shed electrons in a process called thermionic emission.
Applying a positive voltage to the anode plate attracts those
electrons across the gap in the vacuum, creating a current flow.
A vacuum tube with just two electrodes, the cathode and

(40:39):
the anode, is called a diode. This is a type
of tube that allows electricity to only flow in a
single direction, so it's like a one way street for
electrical current. That we also have to remember that we
describe current as the direction of positive to negative, so
this is confusing. Electrons are traveling from negative to positive,

(41:01):
but we call the currents direction the opposite, So current
flows from anode to cathode even though electrons are flowing
from cathode to anode. And I know it's confusing, and
I blame Benjamin Franklin, But that's another story. One important
task these diodes did was convert alternating current to direct current.

(41:21):
This was important since electricity transmission was through alternating current,
but most devices you would plug into outlets relied on
direct currents, so you had to be able to convert them.
But vacuum tubes didn't just stop there. Back in seven
lead to Forest, an American inventor, created the first triode
vacuum tube. So this was a vacuum tube with three electrodes.

(41:45):
You had the anode, you had the cathode, and the
third electrode was a control grid. Think of it as
a sort of filter or mesh between the cathode and
the anode. So the cathode is shedding electron, the anode
is accepting electrons, and the control grid is between the two.

(42:05):
Connectors to the control grid allow for a change and
voltage to be applied to the grid itself. So adjusting
the voltage to the control grid acts as a kind
of valve adjusting exactly how many electrons can flow from
the cathode to the an notte. So if you applied
a negative voltage to the control grid, the control grid
will repel electrons, right because like charge will repel like charge.

(42:32):
Negative repels negative, and that would mean that you would
slow down the stream going from cathode to an notte.
So it's almost like turning a tap of water and
turning it so that the water is barely trickling out.
If you apply a strong enough negative charge to the
control grid, you turn off the flow entirely. But if

(42:52):
you apply a positive voltage, that increases the number of
electrons that flow through to the anode. And in fact,
such a YouTube can be used to amplify an electrical signal.
So let me explain how that works really quickly. See
a small signal coming into the control grid, perhaps one
created by say a radio wave, can be converted into

(43:12):
a much larger signal with the exact same wave form.
Another example is using a microphone. If you're using a microphone,
you're speaking into the microphone. The vibrations caused by the
sounds you are making cause a diaphragm to move inside
the microphone. That in turn causes a tiny electro magnet
to generate a weak electrical signal, and this signal is

(43:36):
far too weak to power a speaker. But let's say
you send this electrical signal so that feeds into the
control grid of a triode vacuum tube. It will control
the flow of electrons through that tube, and you can
have a much more powerful electrical signal coming out of
that tube that matches the one you created coming out

(43:56):
of your microphone, and that one would be enough for
you to send to a speaker to power it. It's
really pretty darn cool. Vacuum tubes would be used in
all sorts of early electronics, and they would usher in
an age of rapid development, though it was also one
in which those electronics were all very large, because vacuum
tubes are pretty big themselves, so a computer with vacuum

(44:20):
tubes and computers would come much later. But a computer
running on vacuum tubes would by necessity take up a
great deal of space, and it would also generate a
lot of heat. It wouldn't be until the development of
the transistor that these problems would be surmounted and we'd
be able to miniaturize electronics. Now, I think this is
a good place for us to leave off with the

(44:41):
story of GE. To recap, the company formed during an
era of industrialization and was largely under the influence of
a monopolistic capitalist, that being JP Morgan. It had hardly
any competition to speak of, being part of a duopoli
with Westinghouse and having far more of the mark A
share in the United States, and it's focus on research

(45:03):
and development as well as acquisitions meant it was becoming
increasingly powerful and cementing its near future. Now, in the
next episode, we'll look at how GE would play an
important part in establishing radio broadcasting in the United States,
as well as its early history with NBC, and we'll
also learn about how the US government began to chip

(45:23):
away at some of the moves Morrigan had made in
the early years of the company. But for now, it's
time to sign off. If you guys have suggestions for
future episodes of tech Stuff, why not send me an
email the addresses tech Stuff at how stuff works dot
com or pop on over to our website that's tech
Stuff podcast dot com. You're gonna find an archive of
all of our past episodes there. You're also going to

(45:45):
find links to our social media accounts, so you can
leave us a message on things like Facebook or Twitter.
And you'll also find a link to our online store,
where every purchase you make goes to help the show
and we greatly appreciate it, and I'll talk to you
again really soon. Y Text Stuff is an I heart

(46:08):
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