page_title: United Wireless Telegraph Company
section_title: Formation
hierarchical_section_title: United Wireless Telegraph Company / Formation
caption_attribution_description: English: 1906 photograph of Abraham White, founder and first President of the United Wireless Telegraph Company.
context_page_description: The United Wireless Telegraph Company was the largest radio communications firm in the United States, from its late-1906 formation until its bankruptcy and takeover by Marconi interests in mid-1912. At the time of its demise, the company was operating around 70 land and 400 shipboard radiotelegraph installations — by far the most in the U.S. However, the firm's management had been substantially more interested in fraudulent stock promotion schemes than in ongoing operations or technical development. United Wireless' shutdown, following federal mail fraud prosecution, was hailed for eliminating one of the largest financial frauds of the period. However, its disappearance also left the U.S. radio industry largely under foreign influence, dominated by the British-controlled Marconi Wireless Telegraph Company of America.
context_section_description: United Wireless' establishment was announced with great fanfare in November 1906 by its founder and first president, stock promoter Abraham White. Legally, the company was a reorganization of the Amalgamated Wireless Securities Company, which had been organized under the laws of Maine on December 6, 1904. (There had been considerable skepticism about Amalgamated at the time of its formation, with a United States Investor reviewer labeling it "the latest move in the De Forest Wireless comedy".) United was initially capitalized by 1,000,000 shares of stock at $10 a share, par value. In February 1907 the capitalization was increased to 2,000,000 shares at the par value, divided between 1,000,000 preferred and 1,000,000 common shares.
  Beginning in 1902, White, promoting the work of inventor Lee de Forest, had headed a series of radio companies with dubious reputations, culminating in the American DeForest Wireless Telegraph Company. As part of the reorganization, United leased American DeForest's assets for $1, a maneuver that, not coincidentally, blocked American DeForest's creditors, most prominently Reginald Fessenden, from collecting on their legal judgments. United's head office was located at the old American DeForest headquarters at 42 Broadway, in New York City, and the company continued publication of the house organ The Aerogram.
  American DeForest stockholders were offered the chance to exchange their now essentially worthless holdings for United stock, in a series of complicated and confusing financial transactions that were generally to the advantage of company insiders at the expense of regular shareholders. One unusual feature of the stock transfer offers was that the number of shares to be received was based on the amount of money originally paid for the stock, and not on the number of shares held. This was designed to penalize persons who purchased their stock on the open market at pennies-on-the-dollar, instead of paying the full price charged for purchases made through the regular sales staff.
  The newly formed United was initially, and falsely, promoted as being a consolidation of the most prominent U.S. and British radio firms, combining American DeForest with the worldwide holding of London-based Marconi's Wireless Telegraph Company, Limited. However, the grand claims about gaining control of the Marconi companies were immediately and vigorously denounced by Marconi officials as "repugnant", and Abraham White's overture to form an international company under his control was quickly and effectively repulsed.
  Absent from the new company was Lee de Forest, who had been American DeForest's Scientific Director, but was forced out in the summer of 1906. De Forest later stated he had resigned in protest over the improper actions of company management. However, an alternate explanation is that he was no longer welcome, due to his inability to develop an effective and non-infringing radio receiver — American DeForest's employment of electrolytic detectors had led to the Fessenden lawsuits, resulting in adverse and expensive legal judgments over the company's use. Moreover, General H. H. C. Dunwoody, an American DeForest vice president, had recently invented a non-infringing carborundum detector, which made the services of de Forest appear to be unneeded.
caption: Abraham White, founder and first president of United Wireless (1906)[1]
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