Thomas Edison Study Guide: Thomas Edison, Inc.

Summary

By the turn of the century, Edison's age was beginning to show. Though he was only in his fifties, he began to talk of retirement. His physical health was deteriorating–a series of illnesses in 1900 and 1901 frightened both his family and financial supporters. The latter urged Edison's staff and lawyers to take steps that would protect their investments and prepare the Edison companies for life without their inventor.

One of the most immediate tasks was to lessen the headaches of running so many businesses. Company executives tried to wean Edison from his many business responsibilities, giving him more freedom to work in the laboratory. He had spent most of his time over the past decade dealing with the hassles of running an enormous conglomerate and had missed inventing. But the Edison enterprises were far-flung, and it was impossible for any one executive to deal with the business of all of them.

Executives and key staff members close to Edison, especially his lawyers, impressed upon him the importance of a centralized organization to the long-term health of the Edison companies. On March 2, 1911, Thomas Edison, Inc. was born. The new company was the first step toward combining all the Edison companies under a single head. In addition to greatly streamlining business headaches, it had the additional benefit of capitalizing at about $12 million. The new structure also allowed the less-profitable branches of Edison's ventures, such as the dictating machine company, to access more capital for research and development. By 1915, TAE, Inc., was a multipronged enterprise with a centralized administration.

Edison continued his experiments. His biggest project during this time was developing a storage battery. Inventors had been struggling to develop a storage battery (as opposed to a primary battery) for over a hundred years with no success, but Edison's determination was based on the myriad of market opportunities he saw for such a device: electric streetcars and motorcars, isolated lighting systems, support for electric stations. He eventually developed a storage battery for motive power in 1910, though the market for such a product was substantially slighter than he had anticipated. His friend Henry Ford's Model Ts had taken away Edison's plans for electric cars.

Analysis

The transformation of Edison's companies into a large, centralized organization marked the final stage of his own transformation from an inventor to an industrialist. He simply had too many assets and business concerns to continue on as he had in the glory days of the Menlo Park laboratory. As one of his biographers has said, "Bound by his commitments and his celebrity, he was now the establishment, less frequently the trend setter." Ironically enough, Edison completed his transformation just as the age of the great American industrialist was waning. The Sherman Antitrust Act of 1890, followed by the "trust-busting" activities of President Theodore Roosevelt in the early years of the twentieth century, was slowly shutting down the massive conglomerates and preventing the rise of new Vanderbilts, Carnegies, and Rockefellers.

All the same, the move towards centralization was excellent for the health of Edison's businesses. The powerhouses of his industry that remained were the phonograph and his motion picture technology, and spreading their wealth among his other businesses helped to insure their survival. It also helped to insure the survival of the entire Edison conglomerate; without centralization, it is doubtful that the businesses, with their complicated, disorganized structure, would have outlived their inventor.

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