Dec 27, 2013

Federal Telegraph, the Birthplace of Silicon Valley

A rapid scan of historical highlights might lead a reader to this view of events:

  1. Alexander Graham Bell invents the telephone.
  2. Thomas Edison invents the light bulb, and later notices the “Edison Effect” when you insert an extra element into the bulb.
  3. Lee De Forest takes that idea and invents the triode vacuum tube, which he called the Audion.
  4. Silicon Valley was started in Dave Packard’s garage.
  5. Shockley invents the transistor at Bell Labs, starts his own company in Silicon Valley until the “traitorous eight” defect and start Fairchild.

A very digital (sampled) view of history. But this is Analog Footsteps, so we take an analog view of history – in the sense of a continuum where something interesting might have happened right before or right after these iconic events. That’s why I want to talk about Federal Telegraph. I touched briefly on Western Electric’s role in #1, above. Historians question #2 since De Forest couldn’t even explain how it worked – but at one point he worked for Federal Telegraph! Federal Telegraph was a company that challenges #4. I agree with most of #5, except the first part.

Until the invention of the telephone, the telegraph was the main form of long-range, electrical communication. But suddenly, it was conceivable to skip the manual coding and decoding and hear the voice of someone hundreds of miles away. We just needed the technology. Due to their size, complexity and cost, alternator-transmitters were mostly employed for long-range radiotelegraphy, and rarely used for audio transmissions. But another developing continuous-wave technology also showed promise -- the arc-transmitter, which had been perfected beginning in 1902 by Valdemar Poulsen of Denmark. When I learned this, I was a bit surprised because I expected it to have been invented on the East Coast of the United States. Part I’m part Danish, so this makes me happy.

Poulsen presented a paper on the topic in Saint Louis in 1904. One person attending the conference was Lee De Forest, who would spend many years trying to develop arc-transmitters for audio transmissions. Depending on what you read, De Forest was either a creative genius with bad luck in business or an outright conman. Over and over, he built companies and great fortunes only to lose them and his reputation by over-promising and under-delivering (and possibly taking credit for things he did not invent or even understand). In 1911, De Forest was able to temporarily find employment at the one company that actually was operating a successful arc-transmitter radiotelegraph service, the Federal Telegraph Company.

Backing up a bit for a fascinating footnote in history, in 1903 a 15 year old boy, Francis J. McCarty, demonstrated one of the first audio radio transmissions using his own invention. This was in San Francisco. Yes, he was only 15 years old. Tragically, he was killed in a buggy accident two weeks before his 18th birthday. Cyril F. Elwell was hired by local businessmen to evaluate the commercial potential of the McCarty patents. Elwell was an Australian, a recent graduate of Stanford University and teaching there at the time. He got the system to work for a distance of over one mile but concluded that it was not practical.
Elwell and two associates (but not De Forest) in the early days
Instead, Elwell convinced backers to buy the patent rights for Poulsen’s arc transmitter. He founded the Poulsen Wireless Telephone and Telegraph Company (a California company), then later it reemerged in 1911, as Federal Telegraph Company (an Arizona company for more favorable tax reasons, much like today’s “Delaware companies”), with Elwell as president. Along the way, it was briefly named Wireless Development Company.

Federal Telegraph was not alone. All across the country and also throughout Europe, companies were being founded in the telegraph industry. Some were just transmitters. Some, like Federal Telegraph, owned stations and developed new equipment. It wasn’t long before consolidation occurred. Federal Telegraph was successful and gradually acquired other companies on the west coast. With stations in San Francisco and development being done in Palo Alto with connections to Stanford University, it might rightly claim to be the birthplace of Silicon Valley.
WKZO was the station I grew up with in Kalamazoo, MI

But history taught us that Packard’s garage was the birthplace. Didn’t Fred Terman create an atmosphere at Stanford University which led to the start of H-P and that whole Silicon Valley thing? Yes, Terman was inspired by his time at MIT to foster relations between the University and local industry. Terman’s early interest in radio was due to the proximity of Federal Telegraph – he built a crystal receiver in 1913 (age 14). And Bill Hewlett agreed, "Fred Terman didn't start Silicon Valley; the beginning of Silicon Valley was a supernova." He explained that Lee de Forest, an electronics pioneer in the Palo Alto area, and his work were the supernova. I trust Bill. Although, De Forest was only a visitor in the Palo Alto area; regardless, the work done at Federal Telegraph was pioneering.

De Forest moved to California and worked for Federal Telegraph Company at Palo Alto. According to Rogers and Larsen, in 1912 "De Forest and two fellow researchers for the Federal Telegraph Company…” were able to amplify a housefly's footsteps 120 times. This event was the first time that a vacuum tube had amplified a signal. Also Rogers and Larsen add that, "Lee de Forest had a Stanford University connection; his work was partly financed by Stanford officials and faculty." At Federal Telegraph, De Forest finally made his Audion tube perform as an amplifier and sold it to the telephone company for $50,000. By late 1916, he was gone again – back on the east coast seeking greater fortune. As much as I trust Bill, I suspect that Federal Telegraph’s Stanford-trained engineers contributed more than history recorded. But that’s my own opinion.

So why don’t most people know about Federal Telegraph? What happened to it? Well, history records that in 1917, Federal Telegraph was the junior partner with American Marconi in forming the Pan-American Wireless Telegraph and Telephone Company. In 1927, it was acquired by MacKay which was then acquired by ITT. So it didn’t die, but it didn’t live. In historical terms, it basically disappeared.


1. William Hewlett's quote, Carolyn Tajnai, 1995, author of "Fred Terman, The Father of Silicon Valley"


3. Moodys Manual of Railroads and Corporation Securities (Volume 2, Part 2), 1922

4. The Examiner, San Francisco, August 30, 1908

5. United States Early Radio History, Thomas H. White,

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