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The Truth about Tesla’s Contract with Westinghouse
This video is my attempt to correct what I think is an injustice.
The erasure and villainization of a man named George Westinghouse Jr. who I think was a decent and generous person, as well as being an incredibly important person for the development of electricity. Now you might ask, how can I say all that about George Westinghouse?
Didn’t Westinghouse just take all his ideas from Nikola Tesla? And didn’t Westinghouse then convince the too-generous Nikola Tesla to rip up a contract for royalties from polyphase current that was worth billions? And, even worse, after his company was more solvent, didn’t Westinghouse still refuse to support Tesla in his experiments to distribute electricity wirelessly throughout the globe?
I mean, just imagine what Tesla could have accomplished if he wasn’t hindered by this altruistic act towards the ungrateful and greedy Westinghouse.
That is what I thought too, it was in his first biography and every story about Tesla from then on. This is not a fringe idea in science history, for example, check out this clip from PBS:
Then, I found a letter to the editor from Tesla about Westinghouse written in 1900, many years after Tesla had supposedly been swindled out of billions by Westinghouse, and I was shocked to my core. Here is what it said:
“[Westinghouse] is one of those few men who conscientiously respect intellectual property, and who acquire their rights to use inventions by fair and equitable means… Had other industrial firms and manufacturers been as just and liberal as Mr. Westinghouse, I would have had many more of my inventions in use than I now have.”
It sure didn’t sound like Tesla felt that Westinghouse had swindled him, in fact it sounded the exact opposite. But I thought that maybe the story could still be true. But then I found a business announcement as Westinghouse was sharing patents with GE where they legally announced that, on April 2, 1896 Westinghouse had, “purchased outright for $216,600 the Tesla patents for multiphase current motors, in order that both companies might manufacture apparatus covered by those payments without the payment of royalties.” Let me repeat, in 1896, Tesla was paid a large lump sum so that Westinghouse and GE could use Tesla’s patent “without the payment of royalties.”
If Tesla was paid a lump sum for his patent in 1896, then it was impossible that Tesla ripped up a contract for his patents in 1891. I then realized that Nikola Tesla, who lived until he was 86 and wrote a ridiculous number of articles and even an autobiography never, as far as I can tell, not once, told this story.
I really can’t help but come to the conclusion that this story just wasn’t true. But if this story wasn’t true, then I think we can take Tesla’s comments from 1900 to heart. Westinghouse wasn’t a greedy financer who stole from everyone. Instead. He was an incredibly generous inventor who had an astonishing impact on the development of technology,
That is a story that I think deserves to be told. So in this video, I wanna go over the real story of who Westinghouse was, how he became a wealthy industrialist, because he definitely was a wealthy industrialist, and how he had so much influence on the development of alternating current electricity.
Ready to have your mind blown? Let’s Go!
How Westinghouse Became an Industrialist
One of the first things that surprised me about Westinghouse was that he was not born to a rich family but instead created an empire out of his own creativity. See, Westinghouse had formed his first company when he was just 20 years old to promote a device that he invented to help derailed trains get back on track that he called a frog (as it hopped from track to track). This business was very successful especially after he convinced Vanderbilt to order a lot of them.
However, Westinghouse couldn’t get his company (or Vanderbilt) to be interested in his other idea of air brakes, so in 1869 the now 22-year-old Westinghouse found a wealthy friend who helped him form a new company, “the Westinghouse Air Brake Company” with a market value of a cool half a million dollars. Both these companies were unmitigated successes, especially the brake company, and according to a biographer by 1881 the Westinghouse Air Brake was the “largest international manufacturing enterprise in the world.”
From the very beginning, Westinghouse insisted on fair pay for his employees. For example, in 1877, the rail workers averaged between five and six dollars a week, while Westinghouse Air Brake employees averaged four dollars a day. Considering that Westinghouse insisted on a nine-hour workday with half days on Saturdays, instead of the typical 10 to 12 hours, 6-7 days a week Westinghouse’s employees made more than five times the pay-per-hour than the abused rail workers.
Years later, the legendary labor leader and founder and president of AFL-CIO Samuel Gompers said, “I will say this for George Westinghouse. If all employers of men treated their employees with the same consideration he does, the American Federation of Labor would have to go out of existence.”
After viewing the Centennial Exhibition in Philadelphia in 1876, Westinghouse decided he wanted to electrify train signals and make them safer. However, neither of his companies thought that it would be profitable, so, in 1881, he put up his own money along with his new house as collateral to start a new company called the Union Switch and Signal Company. Years later a railroad operator said that “if the men who work the railroads ever choose a patron saint it will be St. George—in honor of George Westinghouse.”
Now I want to talk a little about how Westinghouse got in the natural gas business as 1) it is a story that illuminates his and his wife’s personalities, and 2) his use of high pressure gas transmission lines was a vital part of why he was so receptive to AC high voltage transmission.
George Westinghouse Transitions from Gas to Light
George Westinghouse’s interest in natural gas started in 1883 when he read in the paper that natural gas was found in Murrysville, a Pittsburgh suburb. According to a biographer, George’s wife Marguerite teased her husband that he would soon get caught up in natural gas like he did with brakes, stating that “the brakes had one advantage over gas—you could always work out your problems at home, instead of running off to Murrysville every day.”
George told her not to worry, saying “I can work out my problems at home just the same, that is, if you don’t mind me boring a well through your flower beds.”  And, that is almost exactly what George Westinghouse did, except that he drilled behind the stable in their house nicknamed “solitude.” After three weeks of drilling, on May 29, 1884, that nickname became ironic when Westinghouse’s team found a natural gas well that blew the top off of the drilling machine “with the infernal violence of a volcano.”
A visitor recalled that “for days you could not hear your own voice.” Everyone in the town was naturally up in arms about it—everyone, of course, but George and Marguerite Westinghouse. George, according to that same visitor, “had a never disappearing smile on his beaming face, [even] while the Fire Department was pumping water over the house to prevent it from catching fire from the burning gas.” When Marguerite came to investigate with their newborn on her hip, George asked her if she was satisfied with the experiment. She replied that she was quite happy, especially as “the house still has a roof on it and the kitchen isn’t wrecked.”
George Westinghouse was delighted with this new way to provide heat and light to Pittsburgh, as it was also so much cleaner than coal, and started another new company. However, there was one major drawback—it was terribly flammable. Westinghouse turned his interest, once again, to safety. Within 2 years he filed over 30 patents on natural gas safety and transfer, which were helped with his background in air pressure valves for his brake systems. The other problem was that the best way to transport gas long distances is with high pressure gas, but high-pressure pipes tended to leak. His ingenious solution was to place a high-pressure pipe inside another pipe with low pressure gas. That way any leakage in the high-pressure pipe would just seep into the low-pressure area and not into the ground or worse, into the air. Luckily, the consumer needed low pressure gas, so none of the gas was wasted, as the customers received the gas from the low-pressure area.
Westinghouse was in the middle of all that when he read the proceedings of an “International Inventions Exhibition” that was held in London in May of 1885 and found an article by a French inventor named Lucien Gaulard that would change Westinghouse’s life.
Westinghouse and the Transformer
See, a few years before the London exhibition, Lucian Gaulard was thinking about a certain kind of lamp called an arc lamp. Now, arc lamps work by heating up two carbon pieces so that they make a carbon gas and the carbon gas flows, and it was found that it worked better on alternating current because both carbon rods burn at the same.
However, there were so many different kind of arc lamps and each one was set up to work at different voltages, and Galulard was thinking that it was a shame that you couldn’t just use one voltage for one and then change it and use another voltage for another.
Then he started to think about a common device at the time called an induction coil or a Rhumkorff coil that had two coils so that the changing current in one coil would induce a higher voltage lower current in the secondary coil. Perfect for giving big shocks.
Gaulard realized that he could use these two coils without the rest of the electronics to transform voltage but only for alternating current (the coils use magneto-electric induction, the fact that changing magnetic fields induce current, if you have a constant current, no current is induced in the second coil).
Then, Gaulard realized that he could use it backwards to take high voltage AC and transform it to low voltage AC, which was less dangerous. In other words, Gaulard’s brilliant leap was to produce AC at very high voltage and very low current so that the power loss in the wires, which depends on the current squared, would be minimized. Then, near the lamps, he used his device to transform the voltage to a safe level to be used with lamps. With the financial backing of a man named William Gibbs, Gaulard patented what he called a “secondary generator,” but it was quickly called a step-down transformer as it lowered the voltage in one step.
This seemed completely logical to Westinghouse and parallel to his method of transmitting high pressure natural gas. Excited, Westinghouse immediately cabled a junior engineer named Guido Pantaleoni who was in Italy and check it out. Pantaleoni didn’t have to travel far, as he reported that the system was already being used in Turin, Italy and was already successfully lighting buildings some 50 miles away from a waterfall-powered generator. However, Pantaleoni remained deeply skeptical. Since the recently developed self-excited generators couldn’t be used with AC and there were no AC motors. It also seemed to most scientists and inventors at the time like a step back to use alternating current with anything besides arc lamps (where the alternating current made the lamps burn evenly). Years later, Pantaleoni recalled, “Werner von Siemens [creator of the Siemens company] whom I had known, assured me there was nothing whatsoever in alternating current, that it was pure humbug.” Despite this, Westinghouse was sold and immediately purchased an AC Siemens generator (for arc lamps), two Gaulard transformers, and the services of an English employee of Gaulard’s named Reginald Belfield.
When Belfield arrived in Pittsburg, Westinghouse was surprised to find that, despite the fact that Gaulard described the coils in his device as being similar to those of a simplified Ruhmkorff coil, they were actually composed of soldered disks stacked on top of each other. According to an early biographer who knew all the people involved, “Westinghouse… applied himself toward the production of a piece of apparatus which could be wound on the lathe, discarding the unpractical soldered joints and stamped copper disks [of the Gaulard–Gibbs transformer] for the more commercial form of ordinary insulated copper wire, and it was then a question of only a few days before he had evolved…the essentials of a modern transformer.” All in all, according to the biographer, if you added the time to study the transformer, “it took Westinghouse only three weeks to work out those leading features of mechanical design which have been the standard ever since.”
Westinghouse and the AC Transmission
Still, despite their successes, everyone in the laboratory with the possible exemption of Belfield (the engineer who worked with Gaulard) and a man named William Stanley (who they hired for his light bulb patent) still believed that Westinghouse was on a fool’s errand. Pantaleoni recalled, “The opposition by ALL the electric part of the Westinghouse organization was such that it was only Mr. George Westinghouse’s personal will that put it through.”
By December 1885, William Stanley convinced Westinghouse to let him try a soft opening of AC electricity in the small town of Great Barrington, Massachusetts, where he used to vacation as a child. Meanwhile, on January 8, 1886, 38-year-old Westinghouse started the Westinghouse Electric Company. He sent Pantaleoni back to Italy with instructions to purchase the Gaulard–Gibbs patent, come hell or high water. When Pantaleoni asked for the price range, Westinghouse scoffed. “They’ll tell you their price. Whatever it is, close the bargain, and I’ll send the money by cable to you.” As it turns out, Gaulard and Gibbs asked for a shocking $50,000, which is around $1.4 million dollars today.
Meanwhile, in Great Barrington, Stanley and Belfield spent three months working on their AC system, and displayed it on March 20, 1886. Stanley and Belfield kept the details of their device secret (they even went as far as hiding their transformers in basements) but let it be known that they could electrify any building in town. Soon, the Westinghouse company had four or five more contracts than Edison’s people did. Still, Westinghouse didn’t like newspapers and made no announcements, so Edison had no idea what was happening for several months.
Then, in September of 1886, Stanley patented “his” transformer without mentioning Westinghouse’s involvement. Westinghouse didn’t object. Stanley’s contract covered any of his inventions and it seems likely that Westinghouse didn’t feel any need for extra name recognition. However, this action ended up hurting Westinghouse four years later when Stanley tried to form his own AC company and asserted that he had invented all parts of the transformer. (Westinghouse knew how to write a contract and this effort failed in the courts, but history has usually given full credit to Stanley because of this duplicitous behavior.)
George Westinghouse and Thomas Edison
It was only a few weeks after Stanley patented “his” transformer that Edison realized that Westinghouse was creating an alternating current incandescent light bulb company and started to get very, very, worried. Now, Edison had known about transformers since 1885, and had even bought a patent for it from a group called the ZBD group that had made a superior transformer to Gaulards (but slightly after Gaulard).
Anyway, Edison had a good patent but he didn’t want to use it because Edison didn’t want to use it because he was very worried about electrical safety and insisted that all electrical lines would be buried. If you are going to bury all wires, the amount you saved in copper doesn’t really compare to the amount you have to pay to bury the wire for long distances.
However, once Edison learned about Westinghouse, he started to work himself into a frenzy of concern. Part of it is that Edison misunderstood how AC works.
He knew that alternating current is as powerful, not as the maximum amount or the minimum. But the average amount called the root means squared.
But Edison erroneously thought that the damage, “as far as the body was concerned,” was the distance from the top to the bottom, which means he basically thought it was 2.6 times more dangerous than it was. Also, he knew that the high voltage for the transmission lines were very, very high. For example, in reference to the numbers he got from Zipernowsky, one of the inventors of the ZBD transformer, Edison remarked “why ZIP uses 2000 volts AC, That’s 4,000 volts. Holy Moses!!!”
No wonder Edison wrote in his notebook, “Just as certain as death Westinghouse will kill a customer within 6 months after he puts in a system of any size.” Soon the battle of the currents was on.
To recap, Westinghouse was a creative and generous person, who according to everyone who wrote about him in his life noted that he was the main architect of using AC electricity. This is why Tesla not only wrote that Westinghouse was generous in 1900, he also wrote that, “It is chiefly due to Mr. Westinghouse that we the extensive introduction of alternating currents, for it was he who first understood its value, and aided efforts of pioneers, of whom I may count myself one.”
So, why did we all think that Westinghouse had nothing to do with the implementation of AC? How did so many people fall for the false story that Westinghouse had stolen from Tesla? And how did the myth of Tesla get so very popular? That story is next time on the Lightning Tamers!
If you want to know more, I am happy to announce that my book, “The Lightning Tamers” which covers the history of electricity from 1600 to today is available wherever you buy fine books (or not so fine books).
 Tesla “Tesla’s Tribute to Westinghouse” The Age of Steel (Sept 8, 1900) No. 10, vol. 88 p. 9 https://www.google.com/books/edition/Iron_and_Machinery_World/rnEgAQAAMAAJ?hl=en&gbpv=1
 “Annual Report of the Board of Directors of the Westinghouse Electric” Electricity vol 12(June 1897): 387. https://www.google.com/books/edition/_/9To8AQAAMAAJ?gbpv=1
 Skrabec, George Westinghouse: Gentle Genius, (2007) 47. https://www.google.com/books/edition/George_Westinghouse/C3GYdiFM41oC?hl=en&gbpv=0
 Skrabec, George Westinghouse: Gentle Genius, (2007) 68. https://www.google.com/books/edition/George_Westinghouse/C3GYdiFM41oC?hl=en&gbpv=0
 Skrabec, George Westinghouse: Gentle Genius, (2007) 58 https://www.google.com/books/edition/George_Westinghouse/C3GYdiFM41oC?hl=en&gbpv=0 [Note that in 1877, the rail workers went on strike that turned into a riot so there were newspaper reports of what people were paid]
i If a rail worker worked 72 hours a week for $5-6, they averaged around 7.6 cents per hour, whereas Westinghouse’s employee got $4 a day for a 9-hour day and therefore earned around 44 cents per hour.
 “George Westinghouse Commemoration,” American Society of Mechanical Engineers (1937), 49. https://www.google.com/books/edition/George_Westinghouse_Commemoration/MSxVAAAAMAAJ?hl=en&gbpv=0
 Wohleber, “‘St. George’ Westinghouse.” Found in Skrabec, George Westinghouse: Gentle Genius, (2007) 65. https://www.google.com/books/edition/George_Westinghouse/C3GYdiFM41oC?hl=en&gbpv=0
 Leupp, George Westinghouse: His Life and Achievements, (1918) p. 107 https://www.google.com/books/edition/George_Westinghouse_His_Life_and_Achieve/-0yLyyo1m78C?hl=en&gbpv=0
 David Waples The Natural Gas Industry in Appalachia (2014) p. 50 https://www.google.com/books/edition/The_Natural_Gas_Industry_in_Appalachia/EedYrOtmmEkC?hl=en&gbpv=1
 Leupp, George Westinghouse: His Life and Achievements, (1918) p. 111 https://www.google.com/books/edition/George_Westinghouse_His_Life_and_Achieve/-0yLyyo1m78C?hl=en&gbpv=0
 “Electric Lightning at the inventions exhibition” (May 1, 1885) Engineering vol. 39 p. 454 https://www.google.com/books/edition/Engineering/r7aNKPHQuLgC?hl=en&gbpv=0
 Jonnes, Empires of Light, (2004) p. 120 https://www.google.com/books/edition/Empires_of_Light/BKX5UYWzVyQC?hl=en&gbpv=0
 Quoted in Journal of Society of Engineers (1954) p. 169 https://www.google.com/books/edition/Journal_Society_of_Engineers/A_ceAQAAMAAJ?hl=en&gbpv=0
 Henry Prout A Life of George Westinghouse (1922) p. 108 https://www.google.com/books/edition/A_Life_of_George_Westinghouse/6T85AQAAMAAJ?hl=en&gbpv=0
 Quoted in Matt Ross “The Development of A.C. Currents” Harvard College Economist vol. 6-7 (1983) p. 14 https://www.google.com/books/edition/Harvard_College_Economist/WY21AAAAIAAJ?hl=en&gbpv=0
 Leupp, George Westinghouse: His Life and Achievements, (1918) p. 138 https://www.google.com/books/edition/George_Westinghouse_His_Life_and_Achieve/-0yLyyo1m78C?hl=en&gbpv=0
 Skrabec, George Westinghouse: Gentle Genius, (2007) p. 120 https://www.google.com/books/edition/George_Westinghouse/C3GYdiFM41oC?hl=en&gbpv=0
 Tesla “Tesla’s Tribute to Westinghouse” The Age of Steel (Sept 8, 1900) No. 10, vol. 88 p. 9 https://www.google.com/books/edition/Iron_and_Machinery_World/rnEgAQAAMAAJ?hl=en&gbpv=1