Wizard: The Life and Times of Nikola Tesla (42 page)

In a situation that paralleled the Northern Pacific fiasco, Morgan fought for the Equitable on one side against Harriman and his broker, Jacob Schiff, another financier who almost went into the Tesla deal. The end result was an obscure maneuver whereby Thomas Fortune Ryan was able to purchase the controlling shares of Equitable for a paltry $2.5 million. Young Hyde moved to France, where he remained for a quarter century.

Rumors of mismanagement of the funds of a few million investors continued, however, and Ryan’s picture, throughout the summer of 1905, was slapped on the front pages of every newspaper in town. Drawn as a rapacious spider in his web, clutching his prey of the Equitable in one political cartoon, Ryan was described by southern banker and critic John Skelton Williams in a scathing article that appeared in the
World:
“Mr. Ryan has the tendencies which, if his lines had been cast in a humble and contracted sphere probably would have made him a kleptomaniac. His strongest impulse is to acquire money, and his one robust passion is to keep it…Ryan is simply an acquiring machine and operates himself for the purpose of getting what others have.”
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Although Morgan, as head of a rival insurance company, supposedly had no interest in Equitable, Herbert Satterlee, his son-in-law, uncharacteristically revealed that Ryan was actually controlled by Morgan, stating that Morgan “was entirely conversant with Mr. Ryan’s plans…They had his thorough approval and possibly his financial backing.”
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During the government investigations that continued relentlessly throughout the first decade of this century, it was discovered that dummy loans totaling $1.8 million were made to a fifteen-year-old Negro messenger boy in Morgan’s New York Life Insurance Company.
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Ryan also sold his 51 percent interest in Equitable to Morgan for $3 million in 1910. Testimony from the investigation explains quite clearly Ryan’s role as a Morgan puppet.

Q: Untermeyer: Did Mr. Ryan offer this stock to you?

A: Morgan: I asked him to sell it to me.

Q: Untermeyer: Did you tell him why you wanted it?

A: Morgan: No; I told him it was a good thing for me to have…He hesitated about it, and finally sold it.

Taken from Wheeler’s
Pierpont Morgan: Anatomy of a Myth,
the author ended the passage as follows: “During the Panic of 1907, Morgan, in his 71st year, truly manipulated vast sums and groups of men [including President Theodore Roosevelt] in commanding fashion.”
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As “the power behind the throne,” clearly Morgan dominated the conversation when Ryan came to invest in Wardenclyffe. Morgan redirected his new chess piece into the insurance arena, but this still does not answer the question as to why. If Tesla’s enterprise were perceived to have become potentially profitable, having Ryan put in another $100,000 to complete it would have been an easy thing to do. We can therefore conclude that Morgan deliberately scuttled the Tesla venture.

Aside from being annoyed with the difficult inventor, Morgan was concerned about Tesla’s suggestion that he could transmit “unlimited power” by means of wireless. Tesla was boasting here, since he assured Morgan in future letters that Wardenclyffe would only be able to transmit “feeble amounts” of energy.

We come to a juncture here where the decisions of individuals redirected the course of history. As John Stewart Mill has noted, individuals make the history, and here is a clear instance of this proposition. For all intents and purposes, Morgan made the decision in October 1903 to do his best to ensure the inventor’s defeat.

Morgan, however, was opposed philosophically to Tesla’s overall
scheme. It has been suggested that Morgan felt pressure from other Wall Street moguls, such as Bernard Baruch, Thomas Fortune Ryan’s young and highly successful stockbroker. One day, Baruch had mistakenly suggested that Morgan, like him, was a gambler. Morgan was reported to reply, “I never gamble,” and, indeed, may have backed down from the Tesla deal for fear of taking a chance that the controversial inventor might fail or that he might succeed in a way detrimental to existing corporate structures.

The following quotation is from physician and inventor Andrija (Henry) Puharich, a man of Yugoslavian heritage who was tangentially involved in helping ship Tesla’s papers to the Tesla Museum in Belgrade in the early 1950s
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and who personally knew John O’Neill, Tesla’s first major biographer: “Now, I [Puharich] always got this second hand; you won’t find it anywhere in print, but Jack O’Neill gave me this information as the official biographer of Nikola Tesla. He said that Bernard Baruch told J. P. Morgan, ‘Look, this guy is going crazy. What he is doing is he wants to give free electrical power to everybody and we can’t put meters on that. We are just going to go broke supporting this guy.’ And suddenly, over-night, Tesla’s support was cut off, the work was never finished.”
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From a technical and economic point of view, Morgan could not understand how free information and/or power could yield returns. And whether it was Baruch or not who warned Morgan, Tesla himself had voiced the opinion boldly, a decade earlier in the
Sunday World,
that by providing a reservoir of electrical energy throughout the earth through his apparatus, “all monopolies” that depend on conventional means of energy distribution—that is, through wires, “will come to a sudden end.”
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As the ultimate capitalist, Morgan’s existence was greatly defined by controlling the price and distribution of energy and maintaining a working class to support the giant corporate monopolies (called “public” utilities). Thus, he simply could not support a system where wireless information and power could be tapped by anyone with a receiving instrument and machines would replace the work force. Reorganizing existing power, lighting, and telephone industries to please the vision of a somewhat eccentric inventor was certainly an unlikely undertaking for the cautious Wall Street financier. “All those businesses who would [no longer] need loans [would] then [no longer] deposit the[ir] profits in his bank.”
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Tesla, as the quintessential iconoclast, had struck a bargain with the wrong king.
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In 1903, Bernard Baruch, just thirty-three years old and one of the wealthiest men on Wall Street, retired from the firm he had worked for, for over a decade, to set up his own office. One of his first major clients were the Guggenheim brothers. Their interest lay in metals, so Baruch met with the miners Darius Ogden Mills and John Hays Hammond Sr. to seek advice and gain investments. Mills suggested that Baruch go west and purchase
mines himself, and Hammond was hired by the Guggenheims to act as an adviser and acquire silver mines in Mexico. One of Baruch’s first acquisitions was the Utah Copper Company, for “he knew that there would always be a need for copper in the world.”
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Tesla’s wireless enterprise clearly threatened the Baruch-Guggenheim investment that Morgan was trying to involve himself in.

By 1905 the Utah Copper Company was producing copper and other metals at a rate in excess of $100 million per year, and this was a pace which maintained itself for another twenty-five years!
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In later years, John Hays Hammond would claim that “the development of the electrical and automotive industries were possible…‘only with assured large supply of copper.’”
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Unfortunately for Tesla, his ultimate world plan was perceived as a threat on quite a number of key fronts.

Tesla waited through the first weeks of December for a positive sign from the meeting between Ryan and Morgan, but none came. With no choice left, he was forced to confront the financial potentate eyeball to eyeball. He decided to take a pragmatic approach. “Will you permit me to call this or any other evening,” Tesla wrote, “[I wish] to bring a small instrument along to show you one or two experiments with my ‘daylight’?…The shark who will come after me will get the contract for lighting your home.”
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Timing his visit to coincide with the holiday, Tesla purposefully chose this opportune occasion to try and pierce the financier’s stalwart exterior. But at the same time, he used the symbol of the shark in his letter, as this was an animal which ate big fish. Anne Morgan was one of his allies. She met him at the door. Having recently become “a founder of the Colony Club, the first American ladies’ [society], patterned after a British gentlemen’s club” and designed by Stanford White, Anne had entered into the midst of an androgenous theater crowd with ties to the infamous homosexual author Oscar Wilde. With Tesla’s sexual orientation perpetually an enigma and Anne about to dabble in a lesbian fling,
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their bond transcended the surface amenities. Before meeting with her father, Anne was able to corral the avowed celibate and discuss with him the emerging view of the new women.

“Mr. Tesla, I believe that it is absurd that in this day of enlightenment, women do not yet have the right to vote.”

“I concur wholeheartedly, Anne. I also believe that this struggle of the human female toward sex equality will end up in a new sex order, with the females superior.”

“Indeed?” Anne responded, the pupils of her eyes widening into large black pools. “I would have considered the sexes equal,” she said as her hand reached out to touch the inventor.

“The modern woman, who anticipates in merely superficial phenomenon
the advancement of her sex, is but a surface symptom of something deeper and more potent fomenting in the bosom of the race. It is not in the shallow physical imitation of men that women will assert first their equality and later their superiority, but in the awakening of the intellect of women. As generations ensue, the average woman will be as well educated as the average man, and then better educated, for the dormant faculties of her brain will be stimulated into an activity that will be all the more intense because of centuries of repose.”
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“Mr. Morgan will see you now,” the butler interrupted.

“Mr. Tesla.”

“Mr. Morgan, thank you for seeing me. My enemies have been so successful in representing me as a poet and visionary that it is absolutely imperative for me to put out something commercial without delay. If you will only help me to do this you will preserve a property of immense value.”

“I am sorry, Mr. Tesla, as I said before…”

“Won’t you enable me to complete the work and show you that you have not made a mistake in giving me a checkbook to draw on your honored house. If you will imagine that I have found the stone of the philosophers you will be not far from the truth. My invention will cause a revolution so great that almost all values and all human relations will be profoundly modified.”

“Had you simply achieved what I had asked, you would not be in this predicament.”

“Mr. Morgan, I beg to call again to your attention that my patents control absolutely all essential features and that my work is in such a shape that whenever you tell me to go ahead, I shall girdle the globe in three months as surely as my name is Tesla. I have promised to the St. Louis people to open the door of the Exposition with power transmitted from here. It is a great opportunity, Mr. Morgan. I can easily do it, but if you do not aid me soon, it will be too late. Please think for a moment what this means for me. What I have told you long ago has happened. My competitors have collapsed, since their wholesale attempts [at practicable wireless transmission] has not succeeded. Now is the time to aid me. You know this better than anyone else.”

“I have done my part. There are many other businessmen out there with the capital to complete your project.”

“But you, sir, are the controlling partner. Should I obtain a commitment from another, will you consider a renegotiation.”

“I will think it over.”
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Having met with Morgan in December, Tesla not only came away empty-handed; he also came away with the distinct feeling that his partner was not going to facilitate finding new investors. Avoiding Katharine at
Christmastime was one way to telegraph the bad news. Using a full range of her feminine charms, the coquettish Mrs. Filipov issued one more of her provocative missives.

December 20, 1903

Dear Mr. Tesla,

You are most unkind…dear friend! Why do you not come to see ME instead of always dropping into The Century to see Robert.
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I must have done something to offend you, but what?

How can you be indifferent to such devotion?…If you are unhappy and disappointed and down on your luck, then all the more reason why you should seek the companionship and support of your loyal friends.

Indeed, if the whole world were against you, the more firmly would they cling to you.

Faithfully yours,
Katharine Johnson
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Aware of Morgan’s trepidation concerning the potential for his equipment to usurp the need for existing electrical power companies, the inventor wrote explicitly in attempts to allay these fears:

January 13, 1904

Dear Mr. Morgan,

The Canadian Niagara Company will agree in writing to furnish me 10,000 H.P. for 20 years without charge, if I put a plant there to transmit this power without wires to other parts of the world…As I outlined [earlier] I would use the energy not for industrial purposes, but for operating clocks, stock tickers and other apparatus which there are millions now in use, requir[ing on average] not more than 1/10 of the H.P. for each instrument…

Will you help me on any terms you choose and enable me to insure and develop a great property which will ultimately yield hundredfold returns. Please do not do me an injustice in believing me incapable simply because a certain sum of money was not sufficient to carry out my undetaking…You may see that my work remains uncompleted because of a lack of funds, but you will
never see
that machinery which I construct does not fulfill the purposes for which it was designed.

Tesla ended the letter with “hearty wishes for the new year.”
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How could he know that Morgan did not doubt that Tesla could succeed. He feared it.