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Unable to attract investors to the project, Edison financed his own mines. The most promising site was at Ogden on the border of New Jersey and Pennsylvania. Edison moved there for five years to work on the project and sunk some $3 million into it. It was a massive undertaking, dependent upon a complicated system of ore-separation. It also used an intricate procedure of conveyer belts and assembly that influenced Henry Ford when he built his Model T business.

Unfortunately, the bottom fell out of the iron ore market just as Edison was preparing to put his product on the market in 1891. The Panic of 1893 had weakened businesses and prices dropped across the board. In addition, new deposits of pure iron ore were found in 1892 in Minnesota, further ruining Edison's chances. The eleven-year-long debacle drained Edison's personal finances and came to be known as "Edison's Folly."

Analysis

The 1890s were a transitional period for Edison. With so many projects and businesses, he no longer had the freedom of the lone inventor. He took a new interest in manufacturing and production, recognizing that the real profitability lay in those two elements of the invention business. For years Edison had done the inventing while his financiers and business interests made the real money. Now he determined to control his own inventions and business decisions. The West Orange facility was less romantic and dynamic than the laboratory at Menlo Park, but it fit in well with the direction of Edison's vision.

The phonograph is a good example of what happened more and more toward the end of Edison's inventing life. In order for Edison to see the profitability of one of his inventions, a competitor had to lead the way. This had very little to do with Edison's capabilities as a businessman or an inventor. In addition, sometimes he did not want to use his devices in the ways competitors were using them. Bell saw the marketability of the phonograph in the idea of a music box. Edison wanted to use the phonograph for educational purposes and resisted the idea of marketing it as a music device.

Despite his initial neglect of the phonograph, Edison quickly asserted his rights when it appeared that he would be threatened by a competitor. Therefore, when Bell began encroaching on his invention, Edison shook off his anger about the potential uses of the phonograph and set about claiming his share of the market.

The ore-milling fiasco is an unfortunate chapter in Edison's inventing life, but what is remarkable is the way he bounced back afterwards. In 1897 he even established an ore-milling syndicate in London. And he recognized a potential market in one of the by-products of ore-milling–cement. In June 1899, soon after the closing of the Ogden plant, he founded the Edison Portland Cement Company. The business was the fifth largest cement producer in the United States by World War I.

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