Niagara and patents

Niagara and patents

In 1893 Richard Dean Adams, who headed up the Niagara Falls Cataract Construction Company sought Tesla's opinion on what system would be best to transmit power generated at the falls. Over several years there had been an off again - on again series of proposals and open competitions on how best to utilize power generated by the falls with many systems being proposed by several US and European companies including two phase and three phase AC, high voltage DC, and even compressed air. Adams pumped Tesla for information about the current state of all the competing systems. Tesla advised Adams that a two phased system would be the most reliable, and that there was a Westinghouse system to light incandescent bulbs using two phase alternating current. Based on Tesla's advice and Westinghouse's demonstration that they could build a complete AC system at the Colombian Exposition, a contract for building a two phase AC generating system at the Niagara Falls was awarded to Westinghouse Electric. A further contract to build the AC distribution system was awarded to General Electric.^[74]

The mid 1890s saw the conglomerate General Electric, backed by financier J. P. Morgan, involved in take over attempts and patent battles with Westinghouse Electric. Although a patent sharing agreement was signed between the two companies in 1896^[75] Westinghouse was still cash strapped from the financial warfare. To secure further loans Westinghouse was forced to revisit Tesla's AC patent, which bankers considered a financial strain on the company^[76][77] (at that point Westinghouse had paid out an estimated $200,000 in licenses and royalties to Tesla, Brown, and Peck^[78]). In 1897, Westinghouse explained his financial difficulties to Tesla in stark terms, saying that if things continue the way they were he would no longer be in control of Westinghouse Electric and Tesla would have to "deal with the bankers" to try to collect future royalties. Westinghouse convinced Tesla to release his company from the licensing agreement over Tesla's AC patents in exchange for Westinghouse Electric purchasing the patents for a lump sumpayment of $216,000;^[79] this provided Westinghouse a break from what, due to alternating current's rapid gain in popularity, had turned out to be an overly generous $2.50 per AC horsepower royalty.^[59]

American citizenship

On 30 July 1891, at the age of 35, Tesla became a naturalized citizen of the United States,^[80] and established his South Fifth Avenue laboratory, and later another at 46 E.Houston Street, in New York. He lit electric lamps wirelessly at both locations, demonstrating the potential of wireless power transmission.^[81] In the same year, he patented theTesla coil.^[82]

Tesla served as vice president of the American Institute of Electrical Engineers, the forerunner (along with the Institute of Radio Engineers) of the modern-day IEEE, from 1892 to 1894.^[83]