Beautiful certificate from the International Wireless Telegraph Company
issued in 1903. This historic document has an ornate border around it with a vignette of an eagle with flags. This item has the been hand signed by the Company’s President, and Treasurer, and is over 108 years old.
According to the New York Times on January 10, 1904:
WIRELESS COMPANIES MERGE.
American De Forest Concern Acquires the International--Changes in Corporations.
The acquisition of the property and patents of the International Wireless Telegraph Company by the American De Forest Wireless Telegraph Company, a subsidiary company of the De Forest Wireless Telegraph Company, was announced yesterday. By reason of the deal the International Wireless Telegraph Company ceases to exist.
The consolidation was effected by the issuance of shares of the De Forest for shares of the International Wireless on a share-for-share basis. The International was organized originally as the American Wireless Telephone and Telegraph Company, with a capital of $5,000,000. It obtained control of five subsidiary companies--the Northeastern, Atlantic, Northwestern, Pacific, and Continental--each organized on a five-million dollar basis, and was subsequently reorganized as the Consolidated Wireless Telegraph and Telephone Company, with a capital stock of $25,000,000, through exchange share for share of the stocks of the controlled companies. This was later reduced to $7,500,000.
Throughout these changes the stock had been offered to the public, and when the Consolidated was formed further stock offerings were made. Then came, a year later, the organization of the International Wireless Telegraph Company, with a like capitalization, which is now superseded by the acquisition of the latter by the American De Forest. The shares of the International and De Forest have a par value of $10.
Success Magazine, January, 1907, pages 9-11, 49-52:
Fools and Their Money By Frank Fayant....The story of the Wireless Telegraph bubble...
How the Newcomers Made the Old Companies Look Ridiculous
The rival wireless companies again came in conflict in the international yacht races of 1903, when Sir Thomas Lipton brought over his Shamrock II to "lift" the "America's" Cup. One of the press associations used the Marconi system, and another had the De Forest apparatus on its tug.
The Gehring people, who had merged five of their companies in the $25,000,000 International Wireless Telegraph Company, failing in their effort to get the press associations to use their system, set up a very powerful station on the Navesink Highlands. Throughout the yacht races, they sent out so powerful a stream of electric disturbances in the ether that neither the Marconi nor the De Forest operators could get a word in edgewise. The International operators on the shore, when they tired of sending "A-A-A," and "B-B-B," amused themselves by calling the Marconi and De Forest operators bad names. Some of the etheric language sent out from Navesink Highlands during those races was not fit to print. The Marconi and De Forest people tore their hair, but the International promoters truthfully said that there was no law to prevent a man from sending all the wireless messages he desired out into the great unknown. White saw that wireless telegraphy would be a joke if the International promoters were not looked after, and so he conceived the plan of merging the $5,000,000 American De Forest with $7,500,000 International.
The Consolidated, American, New England, Federal and Northwestern wireless companies, using the Dolbear apparatus, had, in the previous year, been merged in the Consolidated Wireless, with $25,000,000 capital. The Consolidated capital had been reduced to $7,500,000 by squeezing out a few millions of the water. Then, early in 1903, the Consolidated had become the International. To merge the De Forest and International companies, White formed the $15,000,000 American De Forest, and the 14,000 disgruntled stockholders in the Gehring company and the 3,000 hopeful stockholders in the De Forest were all made stockholders in the new American De Forest. Before the merger, White "cancelled" $500,000 of the International stock. He did not neglect the opportunity to offer the International stockholders the "right" to buy more stock in the new company at eight dollars a share. The $15,000,000 company had $11,500,000 of common stock and $3,500,000 of "seven per cent. cumulative and participating preferred stock." Later on when the company was sadly in need of money, White issued $500,000 of six per cent. twenty year bonds.
The "parent" De Forest Wireless company, the $3,000,000 company, suddenly ceased to occupy its "parental" position. White had the $15,000,000 company "rent" it for $500 a year. This financial feat, that White found as easy as rolling of a log, disturbed some of his fellow promoters, and one of them, Snyder, the first of the promoters with whom De Forest formed an alliance when he came to New York, asked for a receiver for the American De Forest Company. This suit dragged along in the courts for several years, and was finally patched up a short time ago. White ran things with such a high hand, after the merging of the De Forest and Gehring companies, that his fellow promoters tried to take the control away from him. White seized upon this opportunity to get more publicity, and so raised the cry of "conspiracy." Gehring tried to force White to bring the company's books into court. White retaliated on Gehring by bringing a suit for damages against him and the six other "conspirators." This conspiracy suit was another device of the press agent to get into the newspapers. The whole trouble between White and the seven "conspirators" was that they thought they were not getting their share of the "rake-off." This trouble was patched up, and White settled with the malcontents and forced them out of the company.
In absolute control of the $15,000,000 company, and with no competitor but the Marconi, White went along swimmingly for a year or more. By making wild promises to investors as to what he was going to do with the De Forest system, he sold a great deal of stock, and used most of the money in publicity. He nearly bankrupted the company in erecting stations throughout the country, one of them at the Louisiana Purchase Exposition. Some of these stations were too remote from each other to send any messages at all, and many others were run at a loss. But they were great object lessons to investors, and were the means of selling more stock--and this was what White wanted. The De Forest system was used by the London "Times," in the war between Japan and Russia, and was adopted by many of the coastwise steamers. The De Forest system was really making much more progress in this country than the Marconi, despite the fact that it was very expensive progress for the company. White spent huge sums in advertising and in commissions to brokers who sold the stock. Although White confessed to some of his intimate friends that he did n't know how the company was ever going to make it pay, he told quite another story to investors. Here are some of the alluring promises be made:
$100 put into this stock now for children will make them independently rich on reaching their majority.
Stock in the De Forest company is as good a buy now as telephone stocks were in 1877 and 1878, and those who buy now for holding will receive returns little less than marvelous.
Just as soon as the company is on a dividend basis, the common stock with the preferred should advance to figures practically without limit. This is a stock that should be purchased in just as large quantities as an investor can afford. If set aside for two years, it is morally certain to be in demand at 1000 per cent. or more over present prices.
Tremendous developments are under way.
A few hundred dollars invested now will make you independent for life.
At that time White was selling the preferred stock at $10 a share, with an equal bonus of common stock. He also had a "special treasury "plan for selling this stock at $15 a share, with a "2-˝ per cent. monthly distribution." Investors who could n't buy all of this stock they wanted for cash were allowed to buy it on the installment plan--$2 down and $2 a month. It was the "greatest opportunity of the twentieth century for enormous profits." The $15,000,000 company was only a few months old, when White wanted to print more stock. He announced in the newspapers that he was forming the Amalgamated Wireless Securities Company, capital $10,000,000. The scheme of the Amalgamated was "to relieve the American Company from the expense of extending its work in foreign parts, and, at the same time, contribute large amounts of money for its home work." Some of White's fellow promoters could n't see why he wanted to print $10,000,000 more stock immediately after organizing the $15,000,000 company, and they entered so vigorous a protest that White gave up his Amalgamated idea.
But he went right on forming more companies. One of these was the Dominion De Forest Wireless Telegraph Company, Ltd., with a capital of $1,200,000. I want to tell a little story right here about the Dominion De Forest. A young man in Rochester, N. Y., bought thirty shares of this stock for $180 last August, through the Genesee Valley Securities Company. The shares were guaranteed by E. W. Humphrey, of Montreal, president of the company, to bear seven per cent. interest, payable quarterly, until the company could be on a profitable basis. The first quarterly interest payment was due in September. It was not paid. It was explained that Mr. Humphrey was "getting out a letter to send to the different shareholders, and that he would undoubtedly inclose the interest check at the same time." A letter did follow along from Montreal, sans check, giving the Rochester shareholder the privilege of buying more stock in a new company. This privilege did n't appeal to the Rochester man, who made repeated demands for his interest. Mr. Humphrey promised to send it. But he did n't. The second interest day was likewise ignored. The Rochester investor finally received a letter from Mr. Humphrey in January, in which the
head of the Dominion company wrote:
We desire to say to you that you are making a fool of yourself, as the stock you now hold is absolutely worthless, but we have given you the opportunity to make the exchange, and under no circumstances now will we accept your shares after the various letters we have received from you. We desire to say to you that, for the purpose of protecting shareholders of the Dominion De Forest Company, we have personally advanced over $50,000 to that company for the purpose of paying bills, etc., and we have stood between the company and its creditors for the benefit of its shareholders for just about as long as we desire. Now, you claim that you have certain certificates that bear interest. Possibly you have, and possibly you have not. The shares we represent are absolutely bona fide, and are not schemes to defraud, and we wish to inform you that the money you will lose in this transaction will be brought about by yourself, and you have no one to blame but yourself.
The new company, the shares of which Mr. Humphrey wished to sell the Rochester investor instead of sending him his interest checks, is the Northern Commercial Telegraph Company, Ltd., with a capital of #750,000 ($3,750,000). The officers of this company are Lieutenant Colonel Sir Henry M. Pellatt, of Toronto, chairman; E. W. Humphrey, of Montreal, president; F. Orr Lewis, of Montreal, first vice president; S. H. Ewing, of Montreal, second vice president; D. M. Stewart, of Montreal, treasurer, S. Carsley and Charles Morton, of Montreal, and Lieutenant Colonel Robert Cartwright, of Ottawa, are also directors. From the "confidential preliminary prospectus" of the Northern Commercial Company, I learn that the company proposes to own 200,000 shares of the 240,000 shares of the Dominion De Forest Wireless Telegraph Company, Ltd., and 110,000 shares of the 150,000 shares of the Canadian Radio Telegraph Company, Ltd. The Canadian Radio is an offshoot of an English company, of which Lord Armstrong is the head, and which owns the wireless patents of Daldemar Poulsen. The Northern Commercial, in addition to sending Poulsen messages across the Atlantic, and De Forest messages up and down the Great Lakes, also intends to use the old-fashioned wire method to send telegraph and telephone messages to the uttermost parts of Canada. The Northern Commercial mathematician, although not as proficient in the art as White, does pretty well. Adding up all the various sources of revenue from wire and wireless services on the ocean, the lakes, and the land, the Canadian mathematical shark figures out that the Northern Commercial will earn forty per cent. on its capital.
It was in 1904 that White went to England to float a De Forest company in the home of the South Sea Bubble, where Ernest Terah Hooley and Whittaker Wright had more recently practiced the gentle art of bubble blowing. The De Forest Wireless Telegraph syndicate was formed to operate in the British Isles, with no less a person than Lord Brassey as its chairman. Other well-known Englishmen on the board, dazzled by White's air castles, were Sir Hiram Maxim, Arthur Brand, M. P., Dr. Thomas Cochrane and Charles Bright C. E. In the preliminary prospectus, it was stated that #10,000 ($50,000), was to be paid to the "vendors," as the insiders are politely called in London. Later on this was raised to #40,000 ($200,000). The staid old English newspapers pricked up their ears, and began to ask impertinent questions, and the result was that Lord Brassey and his eminent associates withdrew from White's board. But it never bothers White to have a few directors get out. He can always find others. In place of Lord Brassey he got Lord Armstrong. One "lord" is as good as another in a company directorate. Only the other day White made this announcement concerning the English syndicate:
"The board of directors is headed by the Right Hon. Lord Armstrong, world-famous shipbuilder, and associated with him are Arthur M. Grenfell, of the firm of Chaplin, Milne, and Grenfell, bankers, J. Nevil Maskelyne, and --- Fras, inventor and electrical expert. The English Government has granted a license for the erection of De Forest stations in the British Isles, including a transatlantic station. In addition to commercial stations, orders have been received from the British Government for eleven stations, including three in India."
It was announced, a short time ago, that the English syndicate had "closed a contract to pay #160,000 ($800,000) for the patents of the world, except the United States, of the Poulsen system, and that it agrees to find an additional #100,000 ($500,000) as working capital."
So it appears that the English De Forest company has swallowed the Poulsen system, just as the American De Forest company several years ago swallowed the $25,000,000 worth of Pike wireless companies. Whether Lord Armstrong's company has paid this $800,000 in real money for the Poulsen patents I am unable to learn.