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.
