George Westinghouse: The mystery

georgewestinghouse sum06Our history pages are thick with Mellons, but it was Westinghouse who changed the course of the country
It was a dreary fall day when, on a friend's suggestion, I visited the George Westinghouse Museum in Wilmerding. It is housed inside the former Westinghouse Air Brake offices, a gray stone building with a hint of the medieval, appropriately named “the Castle.” The edifice was built by a man who lived 68 years and who's credited with more than 361 patented inventions. He founded 60 companies around the world, including two Fortune 500 companies. In the pantheon of American investors he is surpassed only by Thomas A. Edison. As an industrialist he deserves admittance into a small circle, including Carnegie, Ford and Rockefeller. As an inventor/industrialist he stands by himself.

Yet strangely we know little about this man. Rockefeller and Ford had their occasionally tarnished reputations burnished by Ivy Lee and Samuel Crowther, respectively, and Carnegie, ever conscious of his public image, did it brilliantly by himself.

Westinghouse never lifted a finger to claim his rightful place in history. He seldom gave interviews and refused but on the rarest of occasions to have his picture taken. To their everlasting credit, Carnegie, Ford and Rockefeller left behind what are now multibillion-dollar foundations. Despite dying a wealthy man, Westinghouse left no foundation. He gave everything to his heirs.

Westinghouse left no paper trail: no records of interviews, speeches, internal memos or personal letters. Hardly anything survives. Consciously or unconsciously, he pretty much scuttled any attempt to produce a readable or interesting biography, quite necessary to keep his reputation alive and in the public mind. While the shelves groan with biographies of Carnegie, Ford and Rockefeller, we only have two biographies of Westinghouse, the last being published in 1922. Neither is exactly a page-turner.


Beginnings
 

The United States economy shot out of the Civil War like a coiled spring. The post Civil War era gave rise to American big business and the first big business was railroads. As economic historian Alfred E. Chandler wrote in “The Visible Hand,” the railroad industry set the pattern for all the major industrial enterprises to come in its wake. It was the railroad industry that created the demand that fueled the growth of the American steel industry. Hard upon the heels of the industrial infrastructure provided by railroads and steel, the electrical revolution played out over the 30-year period beginning in 1890. Electricity spread industry and commerce into every nook and cranny of America, completing our transition from an agrarian to a manufacturing economy. From Appomattox to Sarajevo, from 1865 to 1914, George Westinghouse was intimately involved with the creation of the world's largest and most technologically advanced economy.

The eighth of 10 children, Westinghouse was born in a small village near Schenectady, N.Y., in 1846. His father, also George Westinghouse, was of Westphalian stock, the name having been Anglicized from Westinghausen. Westinghouse, Sr. was the proprietor of a small shop manufacturing a variety of machinery for agricultural and industrial applications. The elder Westinghouse was also an inventor of sorts and had seven patents to his name. Ironically, the little shop, proudly bearing the sign “G. Westinghouse & Co.” still stood many years later alongside the main gate at General Electric's mammoth Schenectady works.

The young Westinghouse went to work for his father at 50 cents an hour in 1860. Metalworking and machinery were in the very air that he breathed. Like countless thousands on both sides of the Civil War, George Westinghouse ran off to enlist in the Union army at the tender age of 15. His father grabbed him back, but two years later, in 1863, with his father's consent he enlisted in the infantry and soon became an engineer in the Union Navy. He was mustered out of the service at 19. After three months at tiny Union College, his formal education was over and he was back at his father's shop.

He was 19 when his first patent for a rotary steam engine was issued in 1865. His last patent was issued 53 years later in 1918, four years after his death. Married in 1867 at 20, the Westinghouses died three months apart in 1914, after 47 years of marriage. They're buried side by side in Arlington National Cemetery. Their only child, George Westinghouse III, worked for his father but moved to California in 1916 and then to Canada shortly after his parents' death.

Between 1869 and 1873, George Westinghouse was issued more than 20 patents on one of the great inventions of the 19th Century, the revolutionary air brake. And it laid the foundation for his fame and fortune. In developing his phalanx of patents on the air brake he learned from his prior mistakes. His first attempts at patented railroad products were a device to rerail derailed cars, called a “car replacer” and a “frog” to switch a train onto new tracks. They were practical successes but commercial failures. The railroads adopted both but sidestepped his modest patent protection, yielding him little return. But he was a fast learner and didn't make the same mistake twice.

By 1873, the young Westinghouses had moved to Pittsburgh, a major railroad hub offering low-cost steel and an ample pool of trained mechanics to work it. For a young man with proven mechanical aptitude, inventive genius and overwhelming ambition, it was the ideal place to be—the Silicon Valley of its day. His attorneys, Bakewell, Christy and Kerr, artfully wove a web of patent protection around the flow of air brake improvements springing from Westinghouse's drawing board. This time the patents held, and the railroads paid; they paid big. Westinghouse was on his way to be a leading industrialist in a growing and vibrant city.


Steel wheels on steel rails
 

Before the advent of the air brake, rail cars were stopped by a brakeman on each car turning a heavy wheel to apply the brakes. The original Westinghouse air brake patent, #88929, was dated April 13, 1869. In the next seven years, 38 percent of the nation's rolling stock used his product. The number of feet required to stop a train going 30 miles per hour dropped from 1,600 feet to 500 feet. And buttressed by a blizzard of 103 inventions from 1869 to 1907, Westinghouse Air Brake held the market like a vise.

The implications of the automatic air brake were staggering. Longer trains running at higher speeds caused rail haulage costs to plummet. With notable improvements over time, the automatic air brake has been used continuously for 119 years—and still counting. But Westinghouse's contribution to the railroad industry was no single act play. To replace railcar coupling springs he invented the friction draft gear. A.J. Cassart, president of the Pennsylvania Railroad, once said that the friction draft gear was equal in importance to the air brake.

Increase in railroad traffic necessitated a system of signals and switches that were interlocked with one another to ensure adequate distance between trains and to give the right of way to one train over another, avoiding collisions. From 1881 to 1882, Westinghouse patented 18 inventions in switch and signal control. In 1881 he established the Union Switch and Signal Company which was later merged into Westinghouse Air Brake. Backed by critical patents and a broad vision of where the field was going, Union Switch and Signal came to dominate the business.

By century's end, power signaling and interlocking was the third and final act of the product line that George Westinghouse developed for the railroads. Along with the friction draft gear, signal interlocking unleashed the full potential of the air brake. Together they gave us the modern rail system that we know today.


Interlude
 

In 1883, Westinghouse became interested in natural gas. As usual, he wasted little time. He applied for 28 patents in 1884 and 1885, with 10 more to follow. His gas inventions included the proportional gas meter, the automatic cutoff regulator, pressure regulator valve and long-distance gas transmission through a series of increasing diameter lines in lieu of lines of uniform dimension; the list goes on.

His most intriguing invention is innocuously termed: well drilling apparatus, Patent #307606, 1884. A summary reads: “The invention combines rotary cutting apparatus and a fluid-pressure motor actuating it. ...” Sound familiar? With it, Westinghouse came within a hair's breadth of beating “Big Howard” Hughes to the invention of the rotary drill bit, the foundation of his son's erratically run empire.

When Westinghouse went into a new industry such as natural gas, he jumped in with both feet. Much to the dismay doubtless of Mrs. Westinghouse and his neighbors, George punched down a well right in his own back yard at Solitude, his residence in Homewood. As usual, he was successful; gas was struck in a moderate amount at 800 feet. This was quite sufficient to serve his own needs and those of a few neighbors; but now caught up in the excitement, Westinghouse pushed on. A few hundred feet later, with a roar, came a flaming blast of gas along with tools and the casing head.

For several weeks he brightened his neighborhood with a roaring torch 100 feet high. He had his own Spindletop. In order to market the inventions, Westinghouse founded the Philadelphia Company in 1882. It produced and distributed natural gas as well as electricity in the Pittsburgh area and for many years ran the streetcar systems of Pittsburgh and San Francisco.

Unlike many other inventors, Westinghouse never sold a patent. He brought his inventions to life with the sole aim of expanding a business enterprise in which he played a triple role of inventor, executive and financier. With Westinghouse it was not so much a matter of money as it was always making things better by solving a succession of technological challenges. To this degree he was an early precursor of the Japanese system of “kaizen,” or continuous improvement. As abruptly as he had thrust himself into the natural gas business, he now moved on to a much bigger challenge.


The main event
 

Had the life of Westinghouse been tragically foreshortened before the age of 40, his reputation as an inventor of the first rank and industrialist of note would have been secure. Fortunately, all this was merely prelude to an extraordinary 30 years to come. In the words of the famous singer, Al Jolson: “You ain't heard nothing yet.”

In 1886, the electrical revolution was at hand. America's greatest inventor -- Thomas Edison, the Wizard of Menlo Park --was bringing forth a stunning series of improvements to the telegraph and the telephone, along with the invention of the phonograph, all laying the foundation for his invention of the incandescent light bulb. Having conceived of a product of great practical utility and universal application, Edison was driven to build a generating and transmission system to bring light to the millions. For starters he announced he would light up lower Manhattan. Edison made good on his claim. In September of 1882, Edison's Pearl Street generating station sprang to life.

The direct current generator had one serious drawback. The low voltage incandescent bulb limited the DC service area to 500 yards. Alternating current operating at high voltage can be transmitted great distances. The missing piece of the puzzle was a transformer capable of “stepping up and stepping down” AC current. Moving with his usual dispatch, Westinghouse bought the U.S. patent to the Gaulard Gibbs transformer. The newly founded (1886) Westinghouse Electric Company improved upon the Gaulard Gibbs transformer turning it into a workable product, which provided the backbone for an AC distribution system. By the end of 1886 Westinghouse Electric had orders for 27 new systems.

Nicholas Tesla was a highly educated Serbian inventor who wrapped his genius in formal attire and Old-World eccentricities. He worked for Edison briefly but struck out on his own. At the end of 1887 he filed for seven U.S. patents that were among the most important in the history of the electrical industry. They covered AC motors supported by a complete system, including generation, transformers, transmission lines and lighting.

Westinghouse Electric had been patiently putting pieces of this puzzle together, and the company brain trust in Pittsburgh told Westinghouse they could get to the finish line. Instead, Westinghouse, with a Hail Mary pass, went for the main chance. Tesla had it all. He paid Tesla $60,000 in cash and Westinghouse stock and agreed to pay him $2.50 per horsepower on all AC capacity the company sold. This over-generous royalty kicker showed even the ever-optimistic Westinghouse had no idea how big the market would become. It was the best deal he ever made; it was the best deal Tesla ever made.

The lighting contract at the 1893 Chicago World's Fair, also known as the Columbian Exposition, held out a blue ribbon prize to Westinghouse. The front-running competitor was the newly formed General Electric Company backed by Edison and the Morgan interests. The contract called for 92,000 lights to illuminate the fair. Westinghouse, the underdog, was confident that by providing a complete AC system to power the exposition it would be worth the price. It was. Unfortunately, weeks before the fair opened, Westinghouse lost a patent case with GE denying them the use of the GE incandescent bulb. With only days to spare, Westinghouse delivered a new “stopper lamp” which, though inferior to the GE lamp, lit the fair as promised. The blazing lights of the “White City” were seen by millions and read about by tens of millions more.

From Chicago it was on to Niagara Falls. Water has long been used as a direct power source, and in the closing years of the 19th century it began to be used to generate elec- tricity. There was no better opportunity than Niagara Falls. To pursue this enormous project, an East Coast financial syndicate capitalized the Cataract Construction Company in late 1899, with $2,630,000. The proposal called for a mind-numbing 100,000 horsepower of generating capacity, exceeding all the central station capacity then installed. By 1891 Westinghouse had more than 1,000 AC stations, five times the number of Edison's DC stations. The Niagara Falls contract was sure to settle the question of leadership once and for all. After six months of twists and turns, including purloined Westinghouse blueprints that found their way to GE and a futile attempt on the part of the Cataract Company to design its own generators, by October of 1893 Westinghouse had the contract.

One more piece of the puzzle remained. Niagara Falls was not a lighting plant like Columbian Exposition's “White City;” it was a power plant. The bulk of the power generated at Niagara Falls had to go to Buffalo and beyond. The power was stepped up and then stepped down to 440 volts and delivered at first to Buffalo streetcars and then throughout the city. The long-distance transmission of AC power was now a proven reality. The twin triumphs of the Columbian Exposition and Niagara Falls were, in the words of the Duke of Wellington on Waterloo: “A near thing.” George Westinghouse was intimately involved at every stage of the game. His technological versatility, his entrepreneurialism, his manufacturing capability, and above all, his force of personality carried the day.

This triumph was all the more remarkable in the face of the dire financial straits in which he found himself. The collapse of the British Barings Bank in 1891 tightened the credit markets, which hit home just as Westinghouse Electric was riding a surge of growth with inadequate capital. Financially, Westinghouse simply cut it too thin. Here he stands in sharp contrast to fiscally prudent Andrew Carnegie who was always prepared to ride out a downturn and gain ground on his rivals at the same time. Turned down by Pittsburgh bankers in 1891, Westinghouse got the money he needed in New York, but a critical stumbling block was the generous royalties he had agreed to pay Tesla. In a dramatic gesture Tesla tore up his contract, thus saving Westinghouse Electric from reorganization and the loss of control by its founder. In the later years of Tesla's life this action condemned him to relative poverty.

After Niagara Falls, Westinghouse Electric grew to be a major industrial corporation. By 1907 sales had reached $35 million, equivalent to $700 million today. The financial panic of 1907 struck Westinghouse hard. Westinghouse lost control, and the East Coast bankers put their own man in to rein in the expansionist bent of the founder. By 1910 Westinghouse was no longer on the board. As he traveled from Homewood to Wilmerding, the sight of the mammoth works at East Pittsburgh was always painful.


Taking his measure
 

As an inventor Westinghouse was second only to Thomas Edison — a close second. For a 49-year period, Westinghouse produced on average one invention every seven weeks — more than 361 in all. He founded 60 companies, a number of them significant, including two Fortune 500 companies. At its peak the Westinghouse Air Brake Company ranked 185th in 1957. Westinghouse Electric was the 13th largest industrial corporation in America in 1955, 1959 and 1971. Although he lost control of the electric company in 1907, at his death he left an estate of $50 million, or the equivalent of $1 billion today.

Westinghouse was also recognized as one of the most progressive industrial employers. He built the town of Wilmerding and provided it with a host of services for his Air Brake employees. He was the first major Pittsburgh industrialist to reduce the workweek from six to 5 1/2 days. There were no Homestead strikes in his legacy.

It's not surprising that patent law makes frequent mention of: “The state of the art.” Inventions, while aimed at practical matters, are to a degree art and, by extension, the inventor is an artist. Inventors, by and large, don't make good business men. Henry Ford is a stunning exception, but as an inventor he falls far short of Westinghouse, and of course, as an industrialist he was incomparably superior. The remarkable thing about Westinghouse is how well he balanced his extraordinary talents. In this respect he is almost unique in the annals of American economic history. Despite doing everything possible to leave no footprints and thus diminish his reputation, proper due diligence fast brings us to the conclusion that he was Pittsburgh's preeminent industrial figure. To take a refrain from a popular song of the 1960s, “The Wichita Linemen,” George Westinghouse is all around us today “we can hear him singing in the wires.”

(The writer thanks Ed Clarke, Ed Reis and Bill Kassling for their help in the research and preparation of this story.)

William S. Dietrich II is a trustee and chief investment officer of the Dietrich Charitable Trusts.

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