Nikola Tesla – Where was the Genius Legally Wrong

When he arrived in America in 1884, Nikola Tesla owned books of poetry, four cents and most valuable to him – a letter of recommendation for work with Thomas Edison, at that time one of the most famous businessmen in America.

Although one of the most prominent scientists left behind 300 patents, it can be said that Tesla was at one time very rich, at the time of his death in 1943. he went bankrupt.

Edison: I was kidding

After his arrival in America, Nikola Tesla got a job at Edison General Electric. His salary was $ 18, which would be about $ 440 today.

According to some sources, Edison then offered Tesla a bonus of a whopping $ 50,000 (today it would be about $ 1 million) if he upgraded the DC system.

When Tesla fulfilled his part of the agreement (oral contract), Edison refused to pay him the promised sum by saying, “Young man, you do not understand American humor.”

Afterwards, Tesla departed from Edison and founded its own Tesla Electric Light & Manufacturing company.

Why Tesla tore the contract

Very soon Tesla patented an AC that turned out to be much better than Edison’s DC.

After the expansion of Westinghouse Electric & Manufacturing Company, Tesla is offered $ 60,000 for a patent license and $ 2,000 a month salary to work with them, which would be about $ 48,000 today.

Edison was certainly not happy that his electricity had fallen into oblivion and was beginning a kind of “electricity war” that would cause Westinghouse Electric to suffer great losses.

After 20 years of fighting Edison, Westinghouse comes to the brink of bankruptcy, and in order to survive, Tesla asks it to temporarily waive its fee.

It can be said that Tesla made two of the biggest mistakes in life at the time. In gratitude that Westinghouse believed in him, he tore the contract.

He also agreed that for the sum of $ 260,000, Westinghouse was entitled to use his patents indefinitely.

The status of the richest man – a missed opportunity

Bankers estimate that Tesla’s inventions were worth about $ 12 million. Today, that amount would be $ 300 million.

By tearing the contract, Tesla probably missed the opportunity to be the richest man on the planet.

Legally speaking, Tesla gave up his existing and occupied legal position emotionally, well-meaning. Its adherence to a new clause that has no limit in time and space for a fixed amount of compensation for all patents without the right to a percentage cost Tesla a fortune.

Certainly the smart move would be if Tesla offered to suspend the payment of his fee, say for five years, until Westinghouse got to its feet in the fight with Edison.

Tesla would then be materially secured, and so materially secured his contribution to humanity would probably be even greater.

Edison and Westinghouse, post factum

Otherwise, karma reciprocated Thomas Edison in some way. His company Edison General Electric was also devastated by debt during the so-called currency war. J.P. Morgan used those debts to gain full control of the company and distance Edison. J.P. Morgan then acquired Edison General Electric with the Thomson-Houston Electric Company of Massachusetts. Edison’s name has been removed from the newly formed General Electric. As you may know, General Electric is still a growing company today with numerous business operations around the world and its market value is estimated at a whopping $ 244 billion.

Similarly, Westinghouse also grew into a multinational company, owned by the CBS television network, the Viacom channel, considered one of the leading nuclear power plant companies in the world (!). A series of business transactions in the 1990s and during the first decade of the new century were acquired by British Nuclear Fuels Ltd and then sold to Toshiba in 2007 for $ 5.4 billion.