Marconi Wireless Telegraph Company of America

Share of the Marconi Wireless Telegraph Company of America, issued 30. October 1916

The Marconi Wireless Telegraph Company of America (commonly called American Marconi) was incorporated in 1899. It was established as a subsidiary of the British Marconi Company and held the U.S. and Cuban rights to Guglielmo Marconi's radio (then called "wireless telegraphy") patents. American Marconi initially primarily operated high-powered land and transatlantic shipboard stations. In 1912, it acquired the extensive assets of the bankrupt United Wireless Telegraph Company, becoming the dominant radio communications provider in the United States.

During World War One the United States government assumed control of the radio industry. After the war government officials balked at returning the American Marconi stations to the original owners, distrusting British control of radio communication due to national security concerns. Lead by the U.S. Navy, the government pressured the Marconi companies to transfer American Marconi to a U.S. owner. The American Marconi assets were purchased by General Electric in 1919, which provided the foundation for creating its new subsidiary, the Radio Corporation of America.

Formation and corporate activities

American Marconi advertisement (1917)[1]

On July 20, 1897, the Wireless Telegraph and Signal Company, Limited, was founded in London to promote the radio inventions of Guglielmo Marconi. (The company's name was changed to Marconi's Wireless Telegraph Company, Limited in March 1900, and was commonly referred to as "British Marconi".) Looking to expand their efforts worldwide, a roster of subsidiary companies was established, holding regional rights to the Marconi patents. The Marconi Wireless Telegraph Company of America was incorporated in New Jersey[2] on November 8, 1899 as the first subsidiary company. It was granted the "sole right to use and exploit the Marconi patents in the United States of America, the Hawaiian Islands, Philippine Islands, Cuba, Porto Rico, Alaska and the Aleutian Islands".[3]

In the opinion of the Marconi companies, they were the only legitimate radio communication providers, as they asserted that all their competitors provided inferior offerings that infringed on the Marconi patents. Following standard Marconi policy, prior to 1912 American Marconi would not sell equipment, instead leasing it, while supplying operators who were loyal company employees. The most controversial early company policy was the standing order that, except in the case of emergencies, Marconi shore and ship stations would refuse to communicate with vessels employing radio equipment manufactured by other companies. This unwillingness to communicate with other systems would eventually be prohibited by international treaties, beginning with the Preliminary Conference on Wireless Telegraphy held in Berlin in 1903. In the United States, the Wireless Ship Act of 1910, which required that most passenger vessels plying U.S. ports carry radio equipment, also specified that they had to be willing to communicate "with shore or ship stations using other systems of radio-communication".[4] The Radio Act of 1912 instituted radio station licensing, and further required that shore stations open to general public service "shall be bound to exchange radiograms with any similar shore station and with any ship station without distinction of the radio system adopted by such stations".[5]

American Marconi's growth in the United States was initially limited due to some unusual factors. Its largest potential customer was the U.S. government, and in particular the U.S. Navy, which rapidly developed plans to equip its vessels with radio transmitters. However, the Navy would have a contentious relationship with the company during most of its existence. An early source of friction was a Marconi station installed on the Nantucket Shoals light-ship by the New York Herald in the summer of 1901. American Marconi's refusal to communicate with non-Marconi stations soon led to an international incident when, in early 1902, the Nantucket operators were unwilling to acknowledge a transmission from the German vessel Deutschland.[6] The German government made a formal protest, and Navy attempted to get American Marconi to eliminate the restrictive policy, but company officials refused, so the Lighthouse Board ordered the Marconi equipment removed, and it was replaced by a station designed by the Navy.[7]

Naval officials also wanted to purchase radio equipment outright, instead of leasing it, something American Marconi would not agree to prior to the 1912 policy change. They additionally felt the prices American Marconi wanted to charge were exorbitant. Thus, the Navy instead turned to other manufacturers, in particular, the German firm Telefunken. The Navy also contracted with domestic firms to produce equipment according to designs specified by the Navy, and produced additional equipment in its own shops.[8]

On the commercial side, American Marconi's primary early competitor was the American DeForest Wireless Telegraph Company, which in late 1906 reorganized as the United Wireless Telegraph Company. United concentrated on the domestic market, and built far more land stations and had many more shipboard installations than American Marconi. United's competitive advantage was due to the fact that it provided shipboard equipment and operators at little or no cost. It was able to do this because, instead of trying to make a profit on legitimate operations, both American De Forest and United were organized as stock promotion schemes, designed by management to loot the funds of unwary investors purchasing heavily promoted and vastly overpriced stock.[9][10]

Plaque marking the site of a high-powered station established by American Marconi at South Wellfleet, Cape Cod, Massachusetts in 1901-1902

Faced with these barriers, American Marconi initially concentrated on establishing a small number of high-powered land stations, which provided transatlantic communication in competition with the existing undersea telegraph cables, in addition to serving passenger vessels making the Atlantic crossing. As late as early 1912, the company had only five land stations and forty marine installations.[11]

John Bottomley, a New York attorney, had primary responsibility for setting up American Marconi, and after a 1902 reorganization served as the new company's general manager, secretary and treasurer. In 1913 Edward J. Nally took over the general manager's post. In 1905, the position of company president was established, which was held by former New Jersey governor John W. Griggs from the office's establishment until the company's dissolution. Frederick Stammis became the company's chief engineer in 1908, and was replaced by Roy Weagant in 1915.[12] Perhaps the most famous American Marconi employee was David Sarnoff, who was hired as an office boy in September 1906, and by 1917 had become the company's commercial manager. Sarnoff later became the third president of the Radio Corporation of America (RCA).[13]

American Marconi also branched out into some ancillary activities. In 1911, the Wanamaker department stores contracted to have radiotelegraph stations, providing two-way communication, installed atop their Philadelphia and New York City stores.[14] The next year a manufacturing plant was established in Aldene, New Jersey;[15] previously equipment had been imported from Great Britain. Beginning in 1912 the company published a monthly magazine named The Marconigraph, which a year later was expanded and renamed The Wireless Age, and in 1912 it also took over United Wireless' The Aerogram magazine, relaunching it as Ocean Wireless News. One of the more ambitious projects involved tests installing radio communication equipment aboard Delaware, Lackawanna and Western Railroad trains, conducted in 1913.[16] In late 1915 the company announced the formation of the National Amateur Wireless Association (NAWA), an organization oriented towards amateur radio enthusiasts. NAWA's primary objective at its founding was promoting military preparedness.[17] American Marconi also established a publishing house, Wireless Press, Inc. in 1916, and created the Marconi Institute to provide training for commercial operators.

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