In 1920, at the age of 73, Thomas Alva Edison returned to the company he'd founded after an absence of four years. During that time, America's great inventor had led the Naval Consulting Board under President Woodrow Wilson, where he was tasked with developing new defense technologies for World War I. To his annoyance, the bureaucracy adopted very few of his inventions, and he left government service frustrated by the whole experience.
As Edison saw it, his first order of business was to reimpose his own — highly individual — personality upon the sprawling industrial conglomerate in West Orange, New Jersey, that he had been forced to neglect during the war. He chose not to notice that it had thereby done much better than it had in earlier years, when he had run its manifold activities — phonograph and record production, movie making, cement milling, storage battery development, and laboratory research — with such autocratic willfulness as to make his executives despair of ever influencing him.
Edison was not an easy man to advise, being a combination of twinkling charm and bruising imperiousness. In his youth the charm had prevailed, but now that he was a septuagenarian and almost unreachably deaf, the urge to overbear had become a compulsion, and he had lost much of the bonhomie that had kept thousands of men working for him, and worshiping him, over the past half-century. Long gone was the perpetual hint of a smile flickering around the corners of his mouth, as if he were about to break into thigh-slapping laughter.
Edison still moved with the jerky energy that kept him awake and acting more decisively than young men unable to match his 18-hour-a-day schedule. He regarded exercise as a waste of time, and sleep even more so. Since he was 20, he had maintained his 175-pound, 5-foot-9½-inch frame with only a few lapses, quickly corrected. ("I do believe I have a big bump for cookies.") The most remarkable thing about his appearance, apart from the brilliance of the blue-gray eyes, was the largeness of his head, amplified by its thick mop of snowy hair. He wore custom-made size 8½ straw hats, and slashed the bands of his caps for comfort. His handshake was perfunctory and surprisingly cold.
Monomaniacally focused on whatever current project interested him, Edison strode at a forward angle, hands in vest pockets, aware only of his destination and completely unconscious of time. He never wore a watch, and made no distinction between day and night, nodding off when he felt like it and expecting his assistants to follow suit. The same went for waking up. If two hours of rest was enough for him, he did not see why anyone else should want more.
Lovable as he was — or had been in the past — Edison did not return affection, beyond the occasional beaming familiarity, in which there was often a note of tease. He thought hurtful practical jokes — electrified washbasins, a wad of chewing tobacco spat onto a white summer suit, firecrackers tossed at the bare feet of children — were funny. Having made money easily all his life, thanks to phenomenal energy and the mysterious gift of imagination (his personal wealth, at latest calculation, was almost $10 million 1 ), he was unmoved by the lesser luck or ill fortune of others. Now, returning to his laboratory desk, he was determined to teach his son, Charles Edison, a thing or two about running a large corporation.
For four years Charles had been under the impression that he, not his father, was the chief executive officer of Thomas A. Edison Inc. His formal titles were chairman of the board and general manager, but now that his father had come home from the Navy, reasserting command and firing off orders like grapeshot, he felt demoted. There was little he could do about it, since Edison had never relinquished the title of president.
Charles was nearing 30, married but childless, an oddly divided personality. At work he was the quintessential businessman: cautious, courteous, efficient and fair. The patrician manners of Hotchkiss and MIT sat easily on his sober-suited shoulders. Small and wiry (Edison called him "Toughie"), he was a handsome man, with heavy-browed eyes of the palest blue. In later life he would develop a startling resemblance to his father.
However, at home or in the Greenwich Village cafes he loved to frequent, Charles was a bohemian. For two years he had helped run an avant-garde theater off Washington Square, commuting back nightly to his home in West Orange on the "owl" train. He spoke fluent French, composed songs with titles like "Wicky Wacky Woo," attracted squads of young women, and wrote quantities of light poetry under the nom de plume "Tom Sleeper."
He had displayed all the forceful spirit of extreme youth when he became chairman in June 1916. Until that moment, Edison's skinflint, union-busting management style had made the West Orange complex "the last place at which men desired to work." Charles had taken advantage of his father's naval appointment to bring in some younger, more progressive executives, while decentralizing the enterprise into a web of largely independent divisions, serviced by an administration in charge of communal interests. He prided himself on having "put the business on a little more humane basis," and expanding it so judiciously that by 1920 Thomas A. Edison Inc., with 11,000 employees, was admired for its generous pay, medical and social policies.
Charles's dread was that the returned founder, already harrumphing that the company was too large and too loose, would move to dismantle his "beautiful organization" and reestablish totalitarian control. If so, there was bound to be blood on the boardroom floor. The prospect was enough to make Charles, whose health tended to be psychosomatic, sick with apprehension.
His fears were not unjustified. The first blow came when Edison upstaged Charles at a conference of Ediphone dictating-machine distributors in West Orange in the summer of 1920.
Nobody expected Edison to address the audience personally, since it was well known that he never spoke in public. Instead, he gave Charles a speech he had written and asked him to read it from the podium.
During the discourse, Edison sat unhearing and apparently unaware that he was the focus of all eyes. His own attention became fixed on his right shoe. He bent down to unlace it, then, in the words of a reporter present, "took it off and pruned a loose piece of leather from the sole with a jackknife." Discovering that the sole itself was detached, he peered and poked at it as if he were back at his workbench in the laboratory.
By now the only person in the room not fascinated by the shoe was Charles, still gamely speaking. Edison sensed the stare of the crowd, looked up, and received an amused ovation. He felt obliged to explain, in a voice overriding his son's, "I went over to New York to buy a pair of shoes, and found they were asking $17 and $18 a pair — "
Charles had no choice but to let him proceed.
Edison said he would not pay that kind of money for pointy-toe footwear. Instead, he had gone to a bargain basement and bought a pair of Cortlands for $6. He then launched into a harangue on extortion by haberdashers that segued somehow into a demand for greater productivity from his employees.
By the time he allowed Charles to go on reading, it was evident to the audience that the Old Man was back in charge.
Edison's complaint about inflated prices was not entirely the affectation of a rich man. The shoe he held in his hand may have represented inventory that the Cortland Company was desperate to unload.
Overproduction during the postwar boom, stimulated by rapacious consumption, easy credit and addictive speculation, had caused such a rise in the cost of living that men of his age, remembering the panics of 1873 and 1893, could see that the American economy was again a bubble close to bursting. In fact, it had burst already, manifesting itself in millions of canceled orders and a recent 25 percent increase in railroad rates that made cash-poor farmers slaughter their horses for hog feed.
Salaried city dwellers felt the inrushing cold air of a major depression, and reacted with a halt to optional purchases. Luxuries like phonographs (until then the topmost item on the Edison profit sheet) stacked up unsold. Shabbiness became the new chic. Women recycled last year's dresses, and men had their suits "turned," shiny side in. William McAdoo, President Wilson's former Treasury secretary, publicly sported trouser patches.
On Sept. 16 a wagon bomb packed with shrapnel exploded opposite the headquarters of J.P. Morgan & Co. on Wall Street, killing dozens of people and injuring hundreds of others. Investigators blamed the disaster on anarchists. But to financiers, a coincidental sharp drop in the Dow Jones Industrial Average was an even louder inducement to panic. Henry Ford slashed the price of his basic Model T, hitherto hard to keep in the showroom, from $575 to $440. General Motors followed suit. The Chicago billionaire Samuel Insull — Edison's former private secretary — had to borrow $12 million in personal funds to keep his web of power companies together. Deflation set in, at a rate unparalleled in American history.
Edison waited no longer than October to initiate a purge of most of the employees his son had hired during the war. He believed that the slump left him no choice but to trim the payroll and increase automation — in both cases, if necessary, by half. He did not scruple to fire some of his own long-serving aides as well.
Fears briefly subsided in November with the election of Republican Warren Gamaliel Harding to the White House, which was seen as a repudiation of the cloudy idealism of the war years. But for as long as the stroke-enfeebled Woodrow Wilson remained in office, the election did nothing to bolster consumer confidence. By late December bank presidents were committing suicide, homeowners were losing their all to sheriffs, and Billy Durant, the founder of General Motors, was out of a job.
Edison had no intention of sharing Durant's fate. Working 18 hours a day and often not returning home until dawn, he increased the savagery of his purge, dismissing the whole of Charles's personnel department before Christmas and laying off 1,650 employees of the Phonograph Works. He jettisoned five-sixths of the engineering force and a like proportion of bookkeepers, clerks, artists, copywriters, salesmen and talent scouts.
Those who survived had their wages slashed and were told to forget about Christmas bonuses. In the process, Edison destroyed his old image as a benevolent autocrat, and Charles lapsed into despair. It didn't help that Edison remarked the company had lost efficiency during the war "due to the negligence of those who were supposed to be watching it."
Certainly, Charles had to recognize that the company's profit sheet, substantial in 1919 and 1920, was reddening toward a loss of more than $1 million in 1921. But the depression, not his own management, was at fault: Nationwide, corporate profits plummeted by 92 percent. One of the phonograph division's biggest competitors, the Columbia Phonograph Co., had to float a $7.5 million bond issue, at ruinous interest, just to pay for a forest's worth of phonograph cabinets it could not sell. U.S. Steel, the nation's first $1 billion trust, was in the process of firing 100,000 workers.
Edison saw, with eyes older and colder than his son's, the necessity of similar action at a time when industrial wages were draining 85 cents out of every budgeted dollar. He kept pointing out that he had started out in business at age 11: "I've been through half a dozen of these depressions. I know how they work, and it's got to be this way or we'll go broke."
By February Charles's protests had weakened into second guesses that Edison, who often made a convenience of being deaf, ignored. One night, brooding in bed, Charles heard himself say, "There's a possible chance that he may be right and I may be wrong."
Warren Harding was sworn in as president on March 4, 1921. A placid, middlebrow, middle-of-the-road Midwesterner, he famously personified everything that was "normal" in America. Harding objected to extreme behavior, whether it was too emotional a reaction to the current state of economic affairs or too precipitous an action to combat it.
His inaugural speech echoed what Edison had been saying to Charles for the last five months. Citing the "delirium of expenditures" that had brought the depression on, Harding declared, "We must face a condition of grim reality, charge off our losses, and start afresh."
If this sounded like a warning of governmental intervention, Harding soon made clear that by "we" he meant the 62 million adult Americans whose buying and selling influenced the economy. He waited for the invisible hand of the market to reassert itself, doing little more than appoint a distinguished group of aides to monitor it. They included Andrew Mellon as secretary of the Treasury and Herbert Hoover as secretary of commerce.
Prices continued their free-fall. Edison congratulated himself that spring on having gotten rid of thousands of "untrained and careless workers" — by one estimate, nearly a third of his 11,000-man payroll — with further pink slips yet to be issued before the company was, in his opinion, slim and trim again. "You're going to learn a big lesson out of this depression," he said to Charles.
Apparently not caring that he had become the most hated man in West Orange, Edison worked on a new plan to replace highly paid executives with young men willing to work for less money. This meant a risky investment in recent college graduates. To ensure he got the best out of hundreds of desperate job seekers with degrees, he devised a questionnaire to bring out their general knowledge. Only 4 percent of his initial batch of applicants struck him as worth hiring. "The results of the test are surprisingly disappointing," he announced in May. "Men who have gone through college I find to be amazingly ignorant."
The contempt for higher education implicit in that remark was nothing new for Edison. It betrayed a prejudice much more complex than the anti-intellectualism of a small-town boy who had clawed his way to success with minimal schooling. Although his mother, Nancy, was his primary teacher, at home in Port Huron, Michigan, she had been a woman of enough culture to introduce him to Gibbon and Hume, even as he mastered R.G. Parker's "A School Compendium of Natural and Experimental Philosophy" by himself. And his father, Sam, had "larned" him the complete works of Thomas Paine when he was still a newsboy on the Grand Trunk Railway.
Edison's reading in the 60 years since embraced few of the humanities but most of the sciences, as well as a wide range of magazines and newspapers. He now claimed to study 27 periodicals, ranging from the Police Gazette and "the liberal weeklies" to the Journal of Experimental Medicine, plus five papers a day and "about 40 pounds of books a month." He was able to maintain this consumption because of his ability to flip pages fast and memorize whatever data appealed to him: "Nearly all my books are transcripts of scientific societies, which will never be republished." As the electrical theoretician Charles Steinmetz remarked, "I consider Edison today as the man best informed in all fields of human knowledge."
Hence the frustration of a Cornell man who publicized 77 Edisonian questions that he thought had unfairly disqualified him from a job at West Orange, such as "How is leather tanned?" "Who was Danton?" and "What is copra?" Another reject complained that he failed to see any useful connection "between the thyroid gland and selling incandescent bulbs, or between gypsies and talking machines, or attar of roses and sales production."
Edison had not meant his questions to be leaked. He was obliged to draft another 113, but they too ended up in newspapers across the country, under such headlines as "IF YOU CANNOT ANSWER THESE YOU'RE IGNORANT, EDISON SAYS."
Harper's Magazine accused Edison of indulging in "philallatopism," or pedantic pleasure in exposing the ignorance of other people. But the questions, though difficult, were not condescending:
- Which country drank the most tea before the war?
- What is the first line of The Aeneid?
- Where is the live center of a lathe?
- Name two locks on the Panama Canal.
- What is the weight of air in a room 20 × 30 × 10?
- Who invented logarithms?
- What state is the name of a famous violin maker?
- How fast does sound travel per foot per second?
The last item was too much even for Albert Einstein. Sounding defensive when it was put to him, the father of relativity said through an interpreter that he saw no point in cluttering his mind with data obtainable from any encyclopedia. "The value of a college education," Einstein huffed, "is not the learning of many facts but the training of the mind to think." Nikola Tesla, Einstein's rival in popular "genius" rankings, agreed. "Edison attaches too great a value to mere memory," he wrote.
To this, Edison could only reply that his questionnaire was "in the nature of a rough test" to bring out the executive quality he prized most: curiosity. In a public statement, he added that he was not trying to measure "intelligence, logic, or power of reasoning." He merely wanted to hire young men who displayed "alertness of mind ... power of observation, and interest in the life of the world."
This protestation did nothing to quell the delight with which humorists, professional and amateur, satirized his "Ignoramometer." The length of a short circuit, the number of stripes on a zebra and the provenance of "jazz" bow ties were urgently discussed, as was the etymology of the Mephistopheles mosquito. One cartoonist lampooned Edison as Diogenes, making tiny ignoramuses scurry from the glare of his intellectual flashlight. A group of Wellesley girls sent him a 5-foot-long list of their own questions, including "What are the chemical properties of catnip?" and "When you turn off the electric light, where does the light go?"
Edison groused that the newspapers "have balled me all up," and threatened lawsuits if any more of his questions were published. Yet part of him — the attention-loving side — relished the sensation he had provoked. The New York Times published almost 40 articles on the subject of "the Edison brainmeter," while magazines of the caliber of Literary Digest, Harper's and the New Republic began a debate on intelligence tests that promised to continue for years. Edison's multi-phasic questionnaire was not the first such probe — in 1917 a War Department aptitude test had alarmingly suggested that almost half of America's white population was "feeble-minded" — but it was deliberately unscientific and sought to illuminate character over cognition.
As such, it was discounted, even mocked, by most professionals, and when it eventually proved ineffective, he abandoned it. But in time it would be seen as a reproof to the nonverbal, overquantified tests that thousands of corporations would later adopt. The World newspaper remarked that at a time rendered dismal by depression and Prohibition, "Mr. Edison with his questionnaire has contributed to the gaiety of life but also to the dissemination of knowledge."
"Things look dark as far as business goes and Papa seems quite worried," Edison's wife Mina wrote to their son Theodore at the beginning of July. "There is a strangeness about everything — It seems like something sinister in the air. I wonder what is to happen."
What was, in fact, about to happen was an upturn in the national economy, thanks to President Harding's willingness to let the depression run its precipitous course. Prices were at last so low that money had regained its fair weight in gold. But the recovery was not yet apparent to Edison — nor for that matter to Harding, who on July 12 made an appeal to Congress to vote down a popular bill awarding bonuses to veterans. In words that could have been uttered in the boardroom at West Orange, the president spoke of "the unavoidable readjustment, the inevitable charge-off" consequent to any period of overexpansion. Cost cutting was "the only sure way to normalcy." Harding earned a standing ovation and widespread praise for his courage. The New York Times declared that he had risen above patronage politics and proved himself to be "President of the whole people."
Two weeks later Edison could judge this for himself in a meadow in the Blue Ridge Mountains. Henry Ford and Harvey Firestone corralled him, as they did almost every summer, into joining an automobile camping trip that purported to be recreational but served as excellent advertising for Ford cars and Firestone tires. Since 1918 these "Vagabond" excursions had become more and more elaborate, the line of tourers and supply wagons lengthening and the two magnates looking ever sleeker — in contrast to Edison, whom they paraded as a shabby, overworked genius in need of fresh air. This year Firestone supposed that because Harding and Edison were, like himself, native Ohioans, they would get on well. If a meeting between them could be arranged at some location convenient to the president, the Vagabonds would score their greatest publicity coup yet.
Harding was pleased to get out of Washington, if only for a couple of days. Congress was still in extraordinary session, debating economic policy. Apart from occasional workouts in a White House closet, he had enjoyed few diversions from affairs of state since his inauguration. His acceptance of Firestone's invitation to camp out on the weekend of July 23 near Peckville, Maryland, caused the motorcade to swell to its largest size yet, with wives, children, about 70 servants and even a Methodist Episcopal bishop in attendance. Firestone rounded up six thoroughbred horses in case Harding wanted to ride, Ford provided a refrigerator truck with 300 dressed chickens, and Edison, ever the technologist, set up a "wireless" radio telephone for communications with the capital.
The president arrived at noon on Saturday morning, trailed by bodyguards, aides and reporters. Edison seemed determined not to be seduced by Harding's good-natured charm and declined his offer of a cigar. "No, thank you, I don't smoke."
This was so patently untrue that Firestone boggled. But Harding took no offense. "I think I can accommodate you," he said, pulling a big plug from his pocket. Edison helped himself to a large cheekful. Later Firestone heard him say, "Harding is all right. Any man who chews tobacco is all right."
Ford's cooks prepared lunch. Soon the humid air was fragrant with the fumes of roasted Virginia ham, lamb chops and sweet corn. Edison ambled off into the woods and returned with a fistful of mint. "Who's got the julep?"
When the company sat down to eat, at a round table whose inner hub rotated for condiment delivery, Harding found it impossible to talk into Edison's deaf left ear. He had no better luck later, when the men adjourned to a "smoking parlor" of camp chairs beneath a giant sycamore. Reporters cordoned off 30 yards away heard the president's stentorian attempts at conversation:
Q. What do you do for recreation?
A. Oh, I eat and think.
Q. Ever take up golf? [Louder] Ever take up golf?
A. No. I'm not old enough.
Harding gave up after that and retreated behind a newspaper. Edison elected to take one of his famed on-the-spot naps. Careless of his white linen suit, he flopped down on the grass and slept like a child. Harding continued reading, and then, in an oddly tender gesture, rose and laid the newspaper over the old man's face. "We can't let the gnats eat him up, now can we?" he said to a little girl watching.
By the fall of 1921 it was clear that the U.S. was in a roaring economic recovery. Housing starts doubled, automobile production cranked up by almost two-thirds, and inventory bloat sweated away. But for a reason not yet clear to Edison, the phonograph industry remained stagnant. Cabinet and records sales had always been the most profitable part of his business. So why was Thomas A. Edison Inc. still encumbered with $2.3 million of recessionary debt?
Encouraged all the same by an order from the builders of New York's Yankee Stadium for 45,000 barrels of his patented Portland cement, Edison began to rehire factory and office workers. Charles responded with a letter that came close to groveling.
"Yours truly has experienced a kaleidoscope of rude awakening," he wrote. "What I want you to believe is that for some time past any pride in the air castle organization I helped to construct during the past few years is gone — completely, absolutely, unequivocally gone."
"Poor dearie, he is hurt clean thru," Mina told Theodore. "Papa does not realize how deep a hurt he has made."
Edison realized only that his company had come near to bankruptcy. If it had, he as the single largest shareholder would have been wiped out. His personal cash reserve at the end of 1921 was just $84,504. Although that was more than the average American earned in a lifetime, it still represented a 50 percent loss over the last two years.
The trappings of wealth meant nothing to Edison. Were he not married to a woman who had been brought up rich and wished to stay that way, he would have been ready to plow every spare cent back into his business and live like a laborer. For a while in the 1890s he had done just that, crashing through more than $2 million, and he looked back on it as a period of acute happiness. His most urgent task now was to return Thomas A. Edison Inc. to solvency. He had fired some 7,000 employees, and needed to cajole the rest into keeping it at the forefront of chemical and electronic technology.
Or more precisely, what he perceived to be the forefront, in an age of change that was fast leaving him behind. "Everything is becoming so complex," he complained, "so intricate, so involved, so mixed up."
- The equivalent of about $125 million in 2018, according to the Purchasing Power calculator at measuringworth.com.
The article is adapted from "Edison," which is being published by Penguin Random House this month.
Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement.