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Crossed Wires and Missing Connections: Valdemar Poulsen, The American Telegraphone Company, and the Failure to Commercialize Magnetic Recording

Published online by Cambridge University Press:  13 December 2011

Mark Clark  and
Henry Nielsen
Mark Clark
Affiliation:
Mark Clark is the director of the History Project of the Association of Textile Chemists and Colorists and a visiting scholar at the University of Delaware.
Henry Nielsen
Affiliation:
Henry Nielsen is associate professor at the Institute for the History of Science at the University of Aarhus, Denmark and director of the graduate program in the History of Technology.
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Abstract

The first magnetic recorder, the telegraphone, was invented in 1898 in Denmark. Despite favorable publicity and considerable investment, the telegraphone was a commercial failure. This article uses the theoretical concept of “frames of meaning” to explain that failure, focusing on three factors in particular: Denmark's status as a technologically peripheral country, the telephone orientation of the telegraphone's inventors, and management failures by the firm set up to manufacture the machine.

Type
Articles
Information
Business History Review , Volume 69 , Issue 1 , Spring 1995 , pp. 1 - 41
Copyright
Copyright © The President and Fellows of Harvard College 1995

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References

1 A number of inventors in the late 19th century worked with the magnetic recording of sound prior to the invention of the telegraphone, most notably Oberlin Smith of Bridgeton, New Jersey, who published an article in 1888 describing a system essentially identical to that eventually used by Poulsen. However, none of these individuals produced a working machine, and there is no evidence that Poulsen was aware of their work. See Clark, Mark, “The Magnetic Recording Industry, 1878–1960: An International Study in Business and Technological History,” Ph.D. diss., University of Delaware, 1992Google Scholar, chapter 2.

2 See, for example, Smith, Merritt Roe, Harpers Ferry Armory and the New Technology: The Challenge of Change (Ithaca, N.Y., 1977)Google Scholar; Williams, Karell et al. , The Breakdown of Austin Rover: A Case-Study in the Failure of Business Strategy and Industrial Policy (New York, 1987)Google Scholar; Lazonick, William, Business Organization and the Myth of the Market Economy (New York, 1991)Google Scholar, and “Learning and the Dynamics of International Competitive Advantage,” in Thomson, Ross, ed., Learning and Technological Change (New York, 1993), 172–200CrossRefGoogle Scholar; Ford, Peter A., “Charles S. Storrow, Civil Engineer: A Case Study of European Training and Technological Transfer in the Antebellum Period,” Technology & Culture 34 (April 1993): 271–299CrossRefGoogle Scholar.

3 Carlson, W. Bernard, “Artifacts and Frames of Meaning: Thomas A. Edison, His Managers, and the Cultural Construction of Motion Pictures,” in Bijker, Wiebe E. and Law, John, eds., Shaping Technology/Building Society: Studies in Sociotechnical Change (Cambridge, Mass., 1992), 175–200Google Scholar.

4 Valdemar Poulsen (1869–1942) was born in Copenhagen, the son of a lawyer who eventually became a judge on the Danish Supreme Court. He graduated from the Borgerdydskolen in Copenhagen as a classical student in 1889. He then began the study of medicine at Copenhagen University as his father had wanted, but soon gave it up to read for the entrance examination at the Technical University of Denmark. His difficulties with mathematics prevented him from taking that exam. In 1893 he was hired as an assistant to the chief telephone engineer at the Copenhagen telephone company (KTAS), where in his spare time he invented the telegraphone in 1898. Poulsen left KTAS at the end of 1899. After inventing the arc-transmitter for wireless telegraphy (“The Poulsen Arc”) in 1902, he spent the next 20 years developing it into a commercial product. Poulsen served as a member of the boards of the companies created to profit from his inventions, which were patented in most industrialized countries. He received many honors in his lifetime, including an honors degree at the Technical University of Denmark in spite of his inability to pass the entrance examination to that institution! He died in Copenhagen in 1942.

5 Aitken, Hugh G.J., The Continuous Wave: Technology and American Radio, 1900–1932 (Princeton, N.J., 1985), 14–17Google Scholar.

6 See, for example, Politiken, 21 October 1899, p. 2, which contains the first Danish newspaper article describing his invention. It is evident that the article was written after an interview with Poulsen.

Telephone answering machines based on phonograph technology were available in the United States beginning in the early 1920s, though opposition by American Telephone and Telegraph limited their use to private telephone systems operated by large firms. The first answering machines using magnetic recording were not offered to the American market until 1953. See Clark, Mark, “Suppressing Innovation: Bell Telephone and Magnetic Recording,” Technology & Culture 34, no. 3 (1993): 521–4, 537CrossRefGoogle Scholar.

7 Poulsen describes this apparatus in his article “Das Telegraphon” in Annalen der Physik 3 (1900): 754Google Scholar. An English version of this article is “The Telegraphone: A Magnetic Speech Recorder” in The Electrician 46 (1900): 208Google Scholar.

8 Holst, Helge, Opfindernes Liv, Vol 2 (Copenhagen, 1915), 239Google Scholar. That August 1898 is the month of Poulsen's invention is confirmed by Larsen, Absalon in “Telegrafonen og den Traadlose,” Ingeniorvidenskabelige Skrifter, No. 2, Teknisk Forlag (Copenhagen, 1950)Google Scholar, a book-length Danish-language account of Poulsen's and his partner Peder Pedersen's work on magnetic recording and wireless telegraphy. Absalon Larsen's book contains a wealth of technical and biographical information, a list of Poulsen's and Pedersen's patents by country, and a list of published newspaper and technical journal articles about the two men. Larsen was a retired electrical engineer who had known both inventors well, and he wrote the book at the request of the Association of Danish Engineers to honor “our famous inventor Valdemar Poulsen.”

9 Petition to the Commissioner of Patents, June 7, 1899, Patent file for United States Patent #661,619, “Method of Recording and Reproducing Sounds or Signals,” United States Patent Office (referred to below as “Patent File”), now in the National Archives, 15.

10 Danish Patent #2653, 1 (translation by authors).

11 Peder Oluf Pedersen (1874–1941) was born in the small village of Sig in Jutland, Denmark. The son of a poor farmer, he revealed exceptional interests and abilities in scientific and technical matters at an early age. In 1889, at the age of 15, he conceived of a new land of engine that would allow irrigation of his father's dry fields with water from a nearby river. Not knowing whom to ask for advice, he wrote a letter to the king of Denmark on the subject! Even though the machine did not work, the letter nevertheless changed Pedersen's life in a dramatic way. He was given a royal stipend allowing him to commence studies at the Technical University in Copenhagen. During his time there he lived in the house of S.C. Borch, a docent at the university. He was introduced to a number of the people who eventually would have great influence on his life. Among these were Marie Lihme, later to become his first wife, Valdemar Poulsen and Søren Lemvig Fog. Pedersen graduated from the Technical University with a degree in civil engineering in 1897. In the years from 1899 to sometime around 1920 he collaborated with Valdemar Poulsen on the development of the telegraphone and the Poulsen Arc, an early radio transmitter. In 1909 he became docent at the newly established Institute of Telegraphy and Telephony at the Danish Technical University, 1912 professor at the same institute, and from 1920 until his death in 1941 he was the director of the Technical University. During his lifetime, Pedersen published a large number of scientific articles, mainly on the theory of the Poulsen Arc and on the generation and transmission of radio waves.

12 Søren Lemvig Fog (1863–1906) was born in Aalborg, Denmark, the son of a customs agent. He originally trained as an officer, but left that career after he authored a series of articles for the Danish newspaper Politiken that were critical of the Army. He went to Brazil some time around 1887. He first set up a match factory, and then invested in a paper mill and various agricultural projects. Fog benefited from the economic boom that followed the establishment of the Brazilian Republic. During the revolutionary period in that country during the early 1890s he turned to the import business, selling war material and railway equipment to the Brazilian government. After making his fortune on a series of large deals (for example, he imported four naval cruisers from Germany to fulfill one contract), he returned to Denmark in the mid-1890s as a wealthy man.

Fog had a reputation for being flashy, especially among other Danish businessmen, since he often gave elaborate parties and always entertained guests in lavish style. He also had a reputation for involving himself with businesses that combined “Danish skill and American smartness.” Surviving correspondence shows that Fog saw the telegraphone as a potential example of this sort of business, and that he developed a close personal relationship with Poulsen as a result.

13 Fog to Poulsen and Pedersen, March 28, 1899, P.O. Pedersen Archive, History of Science Department, Aarhus University, Aarhus, Denmark. This archive contains most of Pedersen's surviving correspondence and other personal papers, including his notebooks and diaries. Poulsen's papers have not been located, and apparently were lost after his death.

14 The company was capitalized at two million Danish kroner, at that time roughly equal to half a million American dollars.

15 Pedersen to Lunn, 4 August 1900; Poulsen to Lunn, 6 August 1900, P.O. Pedersen Archive.

16 Hansen, Svend Aa., økonomisk vœkst i Danmark, 1 (Copenhagen, 1976), 230Google Scholar.

17 William Scharling, “Københavns udvikling og fremtid”, in Nationaløkonomisk Tidsskrift (1890), 10.

18 C. Hentzen, “Hvilken Betydning har den nye Toldlov for den danske Elektrotekniske Industri?” in Elektroteknikeren (1910), 2–7.

19 For more details on the Great Northern Telegraph Company and its success in the international telegraph communication traffic, see Nielsen, H. and Wagner, M. “Technology in Denmark” in Hult, Jan and Nyström, B. (eds.) Technology & Industry—A Nordic Heritage (Canton, Mass., 1992), 16–17Google Scholar. The authoritative sources for Great Northern's history prior to 1886 are Lange's, OleFinansmaend, Straamaend, og Mandariner (Copenhagen, 1978)Google Scholar, and Partnere og Rivaler (Copenhagen, 1980)Google Scholar.

20 The firm Mix & Genest was set up as a mechanical workshop in Berlin in 1879, but was incorporated and renamed in 1889 as Mix & Genest, Telephon- und Blitzableiterfabrik, Inc. In 1899 the company became Mix & Genest, Telephon- und Telegraphenwerke, Inc., the president and general manager being the engineer Werner Genest. The company's main quarter was in Blowstrasse 67, Berlin, but around the turn of the century the company operated branches in Cologne, Hamburg, London, Glasgow, Amsterdam, and Moscow. At the turn of the century the total number of employees was close to 1700 and the capitalization was 3.6 million Marks. Mix & Genest was purchased by Standard Elektrik Lorenz in the 1930s and was merged in 1954. Saling's Börsen Jahrbuch 1901–02, 2. Teil; Handbuch der Deutschen Aktiengesellschaften (1938), 6977–79 and (1961), 1946–47.

21 Ferguson, Eugene S., “Expositions of Technology,” Technology in Western Civilization: The Emergence of Modern Industrial Society—Early Times to 1900, Vol. 1 (Oxford, 1967), 706–726Google Scholar.

22 Ibid., 725; Millard, Andre, Edison and the Business of Innovation (Baltimore, Md., 1990), 118–21Google Scholar.

23 P.O. Pedersen diary, 1900. The diary covers the period from 1 May (the day of Pedersens arrival) to 7 June (the day before he left for Paris), and is currently in the P.O. Pedersen Archive.

24 U.S. patent 873,083 of 1907. The application was filed on 12 June 1902.

25 Pedersen underlined the key sentences, something quite unusual for him. The advantages of using DC-bias in magnetic recording was, as far as we know, first mentioned in the article by Poulsen, Valdemar, “Das Telegraphon”, Annalen der Physik 3 (1900): 754–60CrossRefGoogle Scholar.

26 Danish patent no. 3629, 29 December 1900.

27 P.O. Pedersen to Mrs. Pedersen, 18 June 1900, P.O. Pedersen Archive.

28 The guest book used at the exhibition is in the collection of the Danish Technical Museum, Helsingor, Denmark.

29 See, for example, J.H. West: “Rundschau” in Electrotechnische Zeitschtift, 17 May 1900 and 21 February 1901; J. Blondin, “Telegraphone Poulsen” in L'Eclairage Electricque, 16 June 1900; V. Poulsen, “Sur le telegraphone” in Comptes Rendus, 25 June 1900, 1754; H. Zopke: “Die Weltausstellung in Paris” in Annalen für Gewerbe und Bauwesen, 1 August 1900, 55; Gavey, J.: “Poulsen Mirrophonograph” in Journal of the Institution of Electrical Engineers 30 (1900): 88Google Scholar; Hammer, W.J.: “Important European Electrical and Engineering Developments at the Close of the Nineteenth Century” in Transactions of the AIEE 18 (1902): 47Google Scholar.

30 Gavey, “Poulsen Mirrophongraph,” 88.

31 Ibid.

32 Ibid., 89.

33 Mix & Genest to Pedersen, 11 July 1900 and 17 July 1900, P.O. Pedersen Archive. Poulsen was also in Denmark at this time. It is unknown if he received a similar letter, but it seems likely.

34 Lunn to Pedersen, 2 August 1900, and 6 August 1900; Pedersen to Lunn, 4 August 1900; Poulsen to Lunn, 6 August 1900; Lunn to Pedersen, 11 August 1900; Lemvig Fog to Pedersen, 11 August 1900, P.O. Pedersen Archive.

35 Poulsen and Pedersen to Mix & Genest, 22 August 1900. P.O. Pedersen Archive. It is clear from this letter that Poulsen and Pedersen did not attempt to record telephone conversations over more than one exchange. As later tests would show, the recording of long-distance calls established via more exchanges was much more difficult, and in fact was never solved by the Danes or their German collaborators.

36 Pedersen diary, 1 June 1900, P.O. Pedersen Archive.

37 Lunn to Siemens & Halske, 28 April 1902, Siemens Archive, Siemens Museum, Munich, Germany.

38 Poulsen, Valdemar, “Telegrafonen”, Fysisk Tidsskrift 2, (1903): 33Google Scholar.

39 The highest surviving serial number of a telegraphone built by the company is 121, and it is unlikely that many more were built. The machine is in the collection of the Danish Technical Museum, Elsinore. The figure 200 is from “Depositions by Valdemar Poulsen and Jacob Tesdorph,” Court Hearing on the Extension of Patent, The High Court of Justice, Chancery Division, Public Record Office (London, 1913), 6Google Scholar.

40 Our knowledge of the Danish delegation's travel to the United States in early 1901 is primarily based on letters from Fog and Hagemann to Poulsen and Pedersen in Copenhagen. The letters are in the P.O. Pedersen Archive.

41 These experiments were similar to those carried out in Europe during the previous year and involved primarily recording long-distance conversations. Hagemann to Pedersen, 31 January and 24 February 1901; Fog to Pedersen and Poulsen, 24 February 1901, P.O. Pedersen Archive.

42 Agreement between Lemvig Fog and Stilson Hutchin, 23 March 1903, P.O. Pedersen Archive.

43 Charles Kingsley Fankhauser, born in 1866, was educated at Yale, graduating in 1893. While attending school he started one of the first trading stamp businesses in the United States. In 1900 he sold that business and moved to Boston, where he and others organized the Columbian National Life Insurance Company. In 1902 he sold his interest in that company and moved to New York, where he became a stock and bond broker. He was closely associated with American Telegraphone from 1905 to 1914. His activities after 1913 are largely unknown, but in 1925 he was engaged in the export of timber and lumber, with an office in New York. In 1948 he was still located in New York and was active in the export trade and also operated a tourist office.

44 Depositions by Poulsen, Valdemar and Tesdorph, Jacob, Court Hearing on the Extension of Patent, The High Court of Justice, Chancery Division, Public Record Office (London, 1913)Google Scholar.

45 Fankhauser, Charles K., The Story of the Telegraphone (Charles K. Fankhauser & Co., 1908), 7Google Scholar. This pamphlet was sent to shareholders by Fankhauser after the 1908 shareholders meeting. A copy is located in the records of the court case O'Reilly vs. American Telegraphone Company, Equity Cause 37690, Supreme Court of the District of Columbia (hereafter “Equity Cause”). These records are now in the National Archives in Washington, D.C.

46 According to Fankhauser, he agreed to purchase 275,000 shares of the 350,000 in the company treasury (the other 150,000 shares of the company's 500,000 issued shares belonged to the Danish company through the Telegraphone Corporation of Maine). Fankhauser, 7.

47 Clark, “Suppressing Innovation: Bell Telephone and Magnetic Recording,” 534–7.

48 Millard, Edison and the Business of Innovation, 253–68.

49 Fankhauser, The Story of the Telegraphone, 16.

50 Ibid., 17.

51 Harry S. Sands (1864–1952) graduated from Cornell University as an electrical engineer and moved to Wheeling in 1894. He founded his company in 1896, and made a great deal of money electrifying coal mines in the area around Wheeling. He started Wheeling's first electric power company, and later brought in the area's first X-ray machine. He became a well-known figure in the community, and served on a number of corporate boards in the region. He purchased the Sands Crest farm just outside Wheeling in 1922, and devoted a great deal of time to experimental agriculture until his death.

52 Fankhauser, The Story of the Telegraphone, 12.

53 Ibid., 12–14.

54 The Board of Directors set the price of $300 in February of 1908; they also authorized sales commissions of up to 33.3 percent for local sales agents. In April of that same year, the Board lowered the price to $150, but it is unclear if this was intended to be a retail or wholesale price, as no commissions are mentioned (Minutes of the American Telegraphone Company Board of Directors, 12 February 1908 and 16 April 1908, Equity Cause, hereafter “Minutes”)The phonograph price is from Millard, Edison and the Business of Innovation, 257.

55 According to Harve Stuart, who worked for Sands, no more than 100 disk machines were built in the Wheeling factory. Stuart was unsure of the exact date of their manufacture, though it was after 1906. The machines would have been completed by 1910, since the Wheeling factory was closed and the machinery moved to Springfield, Massachusetts that year (Deposition of Harve R. Stuart, 16 November 1925, Equity Cause).

56 Edwin Dexter Rood (1840–1935) was born in Ludlow, Massachusetts. He was first employed as a traveling salesman by a jewelry-importing firm in New York, beginning around 1866. He became a partner in the firm in the early 1870s. In 1877 he sold his interest in the jewelry business and purchased the Hampden Watch Company (formerly the New York Watch Company), a bankrupt manufacturing firm. He then moved the company to Canton, Ohio, and later purchased the Aurora Watch Factory. In 1893 he moved the machinery of both Hampden and Aurora to Lancaster, Pennsylvania, where it was consolidated with that of the Lancaster Watch Company to form the Hamilton Watch Company. Rood served as the president of Hamilton from 1893 to 1909, when he left that position to run the American Telegraphone Company. Rood continued to be involved with American Telegraphone as a major shareholder until his death, though he was removed from the presidency as a result of legal action in 1919.

57 Minutes, 26 May 1908.

58 Minutes, 21 January, 28 February, and 29 March 1910.

59 An examination of the minute book of the corporation, preserved as part of the “Equity Cause” collection, shows this pattern clearly. Prior to Rood's takeover, meetings are regular, all board members are present, and there are extensive notes detailing the decisions made by the board. Notes for a single meeting often run for several pages. In contrast, under Rood's control, the meetings mandated by the bylaws of the corporation were skipped, there was often no discussion, notes are short, and only one or two of the board members actually attended.

60 Lewis, Tom, Empire of the Air: the Men Who Made Radio (New York, 1991), 80Google Scholar.

61 Rood's contract with American Telegraphone called for him to purchase a certain amount of stock from the company within three years—a clause clearly designed to increase the firm's working capital. A copy of the contract is included in the Equity Cause papers.

62 United States Patent 1,142,384; filed 17 March 1909, granted 8 June 1915.

63 Senate Committee on Patents, A Bill to Renew and Extend Certain Letters Patent: Hearings on S-1301, 72nd Cong., 1st sess., 10 March 1932, 18 (hereafter “Senate Hearing”).

64 The spelling Harve is correct—it appears on numerous documents in the Equity Cause records.

65 Stuart Deposition, 16 November 1925, Equity Cause.

66 The new foreman was Mr. E. F. Creager of Lancaster, Pennsylvania, who had managed the Hubley Toy Factory for the previous fourteen years (Minutes, 20 October 1910).

67 Senate Hearing, 21.

68 Ibid.

69 Ibid.; James S. Grant to H. L. Washburn, 15 Jan. 1919, “Exhibits” folder, Equity Cause.

70 Correspondence between American Telegraphone and Du Pont, Folder labeled “Depositions,” Equity Cause.

71 Receivers Report, March 1921, Equity Cause.

72 Ibid.

73 Harrold, Michael C., “American Watchmaking: A Technical History of the American Watch Industry, 1850–1930,” a supplement to The Bulletin of the National Association of Watch and Clock Collectors, 14 (Spring 1984)Google Scholar. The account of American watchmaking management methods below is drawn from this work.

74 Millard, Edison and the Business of Innovation, 258–267.

75 At least six machines were sold in 1914 to the German government; it is unknown if the German Navy had additional machines built or if more than six machines were purchased before the war. A German submarine that visited the United States in mid-1914 was observed to have a telegraphone on board by those given tours of the ship, but it appears that this did not spark the American Navy's interest at that time. Senate Hearing, 24.

76 Edwin Rood to Lt. M. Paternot of the U. S. Radio Station, Sayville, Long Island, New York, 18 July 1917, Equity Cause.

77 Due to the lack of surviving records, the exact number of machines sold is unknown. Prior to 1920, roughly one hundred wire machines were sold to the McCrillis organization, and fourteen more to the American Navy. Six were sold to the German Navy, but it is unclear if these are separate or should be included in the McCrillis total. After American Telegraphone went bankrupt in 1920, approximately forty-five other machines were sold while the firm operated under a court-appointed receiver. Thus, it appears that the firm sold no more than 170 machines total. The actual total is probably less, since it is known that the company refurbished returned machines returned and resold them. Of these, only six survive in various museum collections and in private hands. All of the serial numbers on the surviving machines are in the 900s, but other evidence suggests that the leading 9 was a model designation rather than a reflection of the overall production.

The total number of wire machines manufactured was probably not much more than this, if one includes prototypes and machines used by the company itself. The firm also built between 40 and 100 of the disk machines designed while H. S. Sands was in charge. It appears none of these machines were sold to the public, and none are known to survive.

78 Minutes, 26 Feb. 1918.

79 Minutes, 11 March 1918.

80 This suit is the one referred to in note 43 as “Equity Cause.”

81 R. E. Curtis to Dr. Alexander M. Pontiatoff, 28 April 1960, box 14, Ampex Archives, Ampex Museum, Redwood City, California.

82 Senate Hearing, 10–43.

83 The term “presumptive anomaly” is defined in Constant, Edward, “A Model for Technological Change Applied to the Turbojet Revolution,” Technology & Culture 14, no. 1 (1973): 553–9Google Scholar.

84 Alfred D. Chandler Jr., “Learning and Technological Change: The Perspective from Business History” in Thomson, ed., Learning and Technological Change, 24–39.

85 Lazonick, Business Organization and the Myth of the Market Economy, 195.