134 - Communication Revolutions

I'm David Veech and this is Elevate Your Performance.

I intended to share some thoughts about the birth of aviation today, but I didn't want to neglect a very important late 19th century set of developments that rapidly accelerated the growth of the economy of the United States and fed a second industrial revolution that further enabled the success of Henry Ford and other automobile manufacturers at the dawn of the 20th century.

I hear a lot of talk today of disruptive technology.  But every useful technology has its own ability to disrupt the lives of people everywhere.  The one I want to focus on today is the telegraph.

Most of us are familiar with the name Samuel F. B. Morse.  He is the inventor of a particularly successful type of telegraph machine.  What's strange, though, is that up to this point in his life, he was an accomplished artist, having painted several portraits of prominent people in American history such as John Adams and the Marquis de LaFayette.

The story is interesting.  Apparently, while away from his Connecticut home, Morse received word, presumably through the Post Office, that his wife was gravely ill.  He immediately left to return home only to arrive well after his wife's death and burial.  The delay in receiving the message became a burning interest for him.

On a ship returning from Europe in 1832, Morse met Charles T. Jackson and shared conversations about electromagnetism and wire transmission signals.  From this encounter, Morse had the idea of the single-wire telegraph and got busy trying to make it work.  

Over the following few years, several inventors in Europe were developing telegraph machines and trying to figure out how to transmit signals over longer distances.  In 1837, working with Leonard Gale (a chemistry professor) and Alfred Vail (a wealthy and enthusiastic young man), Morse was finally able to array the right switches and relays to transmit a signal further than ten miles.

On January 11, 1838, they made their first public demonstration of the telegraph at the Speedwell Ironworks in Morristown, New Jersey to a small and mostly local crowd.  

Morse went to Washington DC  to try to get federal funding of a larger telegraph line, but it wasn't until 1843 that Congress granted funding of $30,000 to build a telegraph line from DC to Baltimore, Maryland, about 38 miles along the right-of-way of the Baltimore and Ohio Railroad - What Monopoly game fans will recognize as the B&O Railroad. 

On May 1, 1844, the first impressive demonstration occurred when the results of the Whig Party Convention in Baltimore were transmitted to the US Capitol.  Henry Clay was their nominee for president.  

The Official opening of the line was on May 24, 1844 when, in the presence of VIPs, Morse transmitted the words "What hath God wrought" from the Supreme Court chamber in the basement of the US Capitol building to the B&O's Mount Clare Station in Baltimore.

Morse received a patent in 1840 for the electric telegraph, and a second patent in 1846 for local circuits, but these were aggressively contested by several parties, despite being renewed in 1848.  It wasn't until a supreme court case - O'reilly v. Morse in 1853 that definitively identified Morse as the inventor granting full royalties and license fees owed in the interval...a sum of almost $2 million dollars.

Over 20 companies raced to string telegraph cable across the northeastern US and further west.  In 1852, the New York and Mississippi Valley Printing Telegraph Company began consolidating these companies and in 1856, acquired the bankrupt New York and Western Union Telegraph Company and created the new and current Western Union Telegraph Company.

By the end of 1861, telegraph wires ran from coast to coast and rendered obsolete the 5-year-old Pony Express (from St. Joseph, Missouri to Sacramento, California) the US Postal Service had established.

About 15 years later, Western Union was offered a new technology for sale by a young inventor, but refused, leaving the rights to the Telephone to what would become the American Telephone and Telegraph Company, or AT&T.  More on the telephone tomorrow!

Have a great day and I'll see you tomorrow.

133 - The Birth of the Auto Industry

I'm David Veech and this is Elevate Your Performance.

The automobile industry literally changed the face of America.  This single enterprise led to more technological innovations in manufacturing, metallurgy, electronics, oil refining, distribution systems, road construction, labor relations, and management practices than any other in the history of the world.  Until the dawn of the computer age, the automobile industry was the absolute technological driver for the United States.

 

We can't talk about cars without talking about Henry Ford, but he certainly wasn't the first or the only person focused on mass producing cars.  Leonardo da Vinci designed a self-propelled wagon way back in the 15th century.  A steam-powered "road locomotive" was invented in England in 1801, but it really took the internal combustion engine to make an automobile economically feasible.  

The Otto engine was the first patented 4-stroke internal combustion engine, back in 1867.  Karl Benz and Gottlieb Daimler each developed practical cars in Germany in 1885 and 1886.  Shortly after that, in 1893, Ford finished his own internal combustion engine and then in 1896 built a steel frame around it, added 4 bicycle tires, and the Quadricycle was born.  When he tried to get it out of his shed to take it for a test drive, it was too wide to fit through, so he had to bust down a brick wall to get it out.

His first auto venture was as mechanical superintendent of the Detroit Automobile Company, formed in August of 1899.  By this time, there were 60 automakers in the US, a number that would grow to 253 by 1908.  This early competition killed the Detroit Automobile Company, but in 1901, with the same financial backers, he started the Henry Ford Company which also failed.  Finally, in 1903, and the Ford Motor Company launched with a simple car called the Model A that eventually morphed into the Model T.

In 1908, Ford produced 10,607 Model Ts.  In contrast, Daimler, working in the most integrated factory in Europe, with 1,700 workers, produced fewer than 1,000.  

In 1908, Ford’s Model T cost $850, which was more money than his workers made in a year of labor.  Ford’s vision was to build a simple but durable car at the lowest possible cost, then pay his workers high enough wages to allow them to afford the very cars they built.  At the root of this vision was a core value that a corporation exists to serve society (Henry Ford, Today and Tomorrow).  

 

To accomplish his vision, Ford needed to do something dramatic and revolutionary.  While all the other automakers employed teams of fitters working in dozens of workshops, custom shaping standard components to make them fit together, Ford, inspired by a visit to Chicago Meat Packers, decided to divide the labor involved among his entire workforce.  

 

In 1910, he built a new factory in Highland Park, Michigan and began work on a moving assembly line.  In 1913, the assembly line began operations.  It relied on each worker specializing in one small area of work and bringing the work to the worker by moving the car from station to station on a moving conveyor belt.  This single innovation resulted in a 900% improvement in productivity over the craftsmen fitters.  

 

In 1914, in response to high turnover rates and low morale, Ford began paying his workers $5 per day when the rest of the industry was paying $11 per week.  By 1916, Ford was making over 730,000 cars a year and selling them for about $350 each.   

 

The Government recognized the need for new roads and passed the Federal Aid Road Act in 1916, and the Federal Highway Act in 1921.

 

Several factors combined to enable this revolution in the auto industry, which essentially saved two other industries.  

 

First, the price of steel was low thanks to the construction of the nation-wide railroad.  But the railroads were no longer expanding at the same rate as through the last part of the 1800’s.  A reduction in the demand for steel may have forced some steel mills to close, but now they had another primary customer, the auto industry.  

 

The oil industry was about to fall victim to electricity until the automobile created the demand for a modified version of kerosene called gasoline.  

 

The availability of cheap raw materials, a shortage of skilled labor, and the high demand for cars drove Ford to mechanize the manufacturing process.  This in turn drove the consolidation of the automobile industry so that those 253 independent auto makers of 1908 turned into 44 makers in 1929.  

 

Of those 44, the big three (Ford, General Motors, and Chrysler) accounted for over 80% of 

new car sales in America.

https://www.history.com/this-day-in-history/henry-ford-leaves-edison-to-start-automobile-company

132 - Industrial Revolutions

Today I want to pick up from the last episode, where I talked about the birth and growth of Iron and Steel, railroads, and the oil industry through the early 1800s; evidence of the first industrial revolution in the US.

There's no real date for when the "revolution" occurred, but the biggest enablers of that first industrial revolution were:

 

• coal-fired furnaces to convert iron ore to finished metals, 

• the steam engine and steam driven equipment, and 

• Eli Whitney’s milling machines which established the American System of Manufacturing, where machines would produce parts in volume to be assembled into products sometime later.

In the last decades of the 19th century, three more technological advances fueled a second industrial revolution:

 

• the completion of modern transportation and communications networks

• electricity 

• “the scientific method.”

 

The modern communication networks began with Samuel Morse's invention of the telegraph in 1837.  But it wasn't until 1844, when Congress finally financed the construction of the first telegraph line from Washington DC to Baltimore, Maryland, that the revolutionary nature of this invention was realized.  Within 10 years, 23,000 miles of cable connected the country.  As railroads expanded westward, and eastward from California, the telegraph went along with it.

In 1856, the development of the “Bessemer” process for making steel dramatically reduced the time, energy, and money required for this task.  Since steel lasts longer and is much harder than iron, it became the substance of choice for making railroad rails.  

 

From 1864 to the end of the century, Bessemer converters produced millions of tons of steel rails as the nation expanded westward.    

The expanding steel market, driven by the demand of railroad networks, led to more efficient production methods and to the discovery of new deposits of coal and iron ore, dramatically reducing prices.  In 1880, Andrew Carnegie’s companies could produce a ton of steel for about $67.  By the turn of the century, a ton of steel cost only $17.  Steel mills ultimately exceeded 10 million tons annually.   J.P. Morgan, Elbert Gary, and Charles Schwab built the US Steel Corporation into the largest industrial enterprise on Earth.

 

The discovery of new oil reserves and more efficient refining reduced the cost of producing a gallon of kerosene from 54 cents to less than ½ cent.  

 

The deployment of electrical power generation provided a much more flexible power source to businesses than steam.  Factories had also relied on kerosene lamps for illumination for years.  With Edison's perfecting of the incandescent lightbulb, factories began converting to electricity and adding better illumination, achieving higher production rates both day and night along the way.  

 

Electricity provided the power behind exciting developments in chemistry and metallurgy, which were integrated into manufacturing operations.  Engineering emerged as a dominant skill for manufacturing companies as they began to apply the scientific method (controlled experimentation) to solving problems with products and processes.

 

Companies operated with high levels of capital equipment and relatively low levels of labor (high capital to labor ratio for you economists) which resulted in economies of scale and lower unit costs.  But sustaining those lower costs required operation of the equipment at near full capacity.  

 

This strain on resources gave birth to the science of management and to mass production systems.  These developments were put to use in two new industries born from the desire of Americans to have more control over getting around.  As the railroads, the telegraph, the steamship, and long-distance cable networks brought more people together, the turn of the century witnessed the birth of the automobile industry and the aviation industry.  

We'll talk about these industries more in the next episode.

Have a great day and I'll see you tomorrow.

131 - Developments through the 19th Century

As we're moving through our American timeline from craft manufacturing to mass production, I've rarely studied the period between Eli Whitney's milling machine and Henry Ford's assembly line.

The 19th century seemed to hide great strides in manufacturing because of the magnitude of other changes.  

Most notably, the 19th century in America is about expansion and about exploiting rich natural resources.  In 1803 alone, we doubled the size of the nation with the Louisiana Purchase, but even in the east, in Virginia, Maryland, and Pennsylvania, Iron Ore was abundant and became a huge export for the US.

But it also provided rails to connect the expanding country.  Further deposits discovered throughout the great lakes region, with easy transportation routes on those great lakes, accelerated growth.  J. P. Morgan, then Andrew Carnegie were able to make great use of the Bessemer process to refine iron ore into steel.

We also saw the development and growth of the Oil industry as we learned how to refine the crude oil discovered in Pennsylvania.  J.D. Rockefeller built his first refinery in Cleveland and took advantage of the wealth he generated to consolidate hundreds of players in the oil business into Standard Oil.

Cornelius Vanderbilt created a shipping and railroad empire that enabled us to reach further westward toward our "Manifest destiny."

But it was our manufacturing capability that produced the iron, the drilling rigs, the mining equipment, the steamships, and the locomotives.  Our first integrated factory opened in 1814, a textile mill.  By the middle of the century we're a leading exporter of all kinds of goods.  

Of course, with all this prosperity on one extreme, the downside was just as significant.  The expansion of slavery, the Indian Removal Act, and oppressive working conditions are all dreadful events we wish we could forget, but we're compelled to never forget.  

In the second half of the century, new technologies emerged with the wider availability of electricity, which was a much better power source for equipment in factories, and the light meant we could now exploit workers 24 hours a day.  

Electricity, the telephone and telegraph, are two keys to the second major industrial revolution.  More on that tomorrow.

Have a great day and I'll see you tomorrow.

130 - Interchangeable parts

I'm David Veech and this is Elevate Your Performance

We're continuing the conversation about the industrial revolution, bringing us from the craft manufacturing age to the mass manufacturing age.

The most significant enabler of mass production is the concept of interchangeable parts.  Throughout history to this point, craftsmen created individual parts for something, by forging or by milling, and then by filing and fitting two or more parts together.  You can imagine the extra time this takes to make things fit together precisely enough to function.

In 1785, a gunsmith from Avignon France named Honore Blanc built 50 Locks - the firing mechanism for a Flintlock Musket - the most advance firearm of the day and put on a demonstration for a small group of people where he quickly disassembled half of them, tossing each component part into separate boxes, mixing them all together.  

He then pulled parts at random from the boxes and began reassembling the locks, all of which worked perfectly.  This is apparently the first demonstration of the feasibility of interchangeable parts.  If all the parts were uniform, think how much more quickly we could repair damaged firearms, or sewing machines, or harvesters.

In the audience that day, among the angry gunsmiths (who's livelihood was clearly threatened with this new way of manufacturing) was the Minister to Paris from the newly established United States of America, Thomas Jefferson.  Jefferson wrote to the continental congress about this exciting new possibility and was promptly ignored.  Those angry gunsmiths, by the way, made sure that Blanc's workshop was destroyed when his patrons were killed during the French revolution in 1789.  He died in debt.

In the US, Eli Whitney invented the cotton gin in 1793.  According to the Patent Act of 1793, the US Department of State was responsible for processing patent applications.  In 1793, Thomas Jefferson was the US Secretary of State who received Whitney's first patent application letter.  Jefferson, whose plantation in Virginia produced a significant amount of cotton, was so interested in the cotton gin patent that he sent a letter back to Whitney asking for details and a model, or perhaps could he purchase a small gin for use on his "family farm."

Fast forward a few years.  It's 1797.  France is making noise about war with the US.  President Washington is concerned that the two national armories have only been able to produce 1,000 muskets in the last 3 years.  So the government solicits 40,000 muskets from independent gunsmiths in the US.  26 contractors bid on 30,200, and Eli Whitney gets a contract for 10,000, without a factory, a design, or any history of making firearms.  I guess then as now it pays to have a customer in the Vice President's office.

Where Blanc spent extra time hand finishing all the locks he made so they were as close to identical as possible, Whitney planned to build a machine that would produce identical parts.  His contract required delivery of the 10,000 muskets in 2 years, but it actually took him 10 years, but the significant result was Whitney's Milling Machine.  Because of his legal experiences with the Cotton Gin, Whitney never patented the milling machine or any other of his inventions.  

Stick around for how this had a significant impact on manufacturing throughout the 19th Century and even contributed to the second industrial revolution.