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ELECTRIC LIGHT COMPANIES.—THEIR RISE AND
“They come as shadows; so depart."
HE early days of the history of electric lighting are
uneventful. For years the arc light had been known as a scientific toy, and for a considerable time modifications of it had been employed in some French and English lighthouses, where brilliancy was the primary and expense a secondary object. It was not until after the display at the Paris Exhibition of 1876 that public attention was more prominently directed to its utilisation as a practical competitor with gas for the efficient illumination of our streets, warehouses, and homes. The improvements in dynamo-machines for generating a steady electric current, and in the carbons used in producing the arc, gave the light a commercial value, and for the next three years we had many instances of its value in our midst,-in lighting up warehouses and large spaces, -as in the case of the Thames Embankment. But although gas companies' shares on several occasions were seriously depressed in price by bold prophecies of their worthlessness when compared with the brilliant future of the infant prodigy just being awakened, the time had not yet arrived for a permanent "fling for popularity," which is nowadays gauged by the amount of money the public can be got to subscribe for a given purpose.
Towards the end of October, 1878, the British Electric Light Company was formed, with a capital of £100,000, and acquired rights in the Gramme patents, subsequently also becoming interested in those of Mr. Lane-Fox.
Early in the following year the Anglo-American Light Company, Limited, was first started, with the modest capital of £15,000, to purchase the Wallace-Farmer patents and certain premises rented at Shoreditch; but in December, 1879, this company transferred its interests for £13,000, in shares, to a new company bearing the same name, which had a nominal capital of £60,000. This new company acquired the Brush Patents for £ 10,000 in cash and £ 5,000 in shares, together with £12,000 in shares to a third party, so that altogether their rights cost them £40,000. These rights were subsequently disposed of to the AngloAmerican Brush Electric Light Corporation, registered in December, 1880, for £200,000, and it has since then gone under the euphonious name of the “Parent Brush." In July, 1881, it purchased some of the Lane-Fox patents, subject to the rights of the British Electric Light Company, for £ 5,718, and for a long time had a tolerably successful career. Happy the prolific parent with such a prolific offspring in companies, sub-companies, and syndicates ! Usually children are an immediate cause of loss to their parents, and require long years of careful nurturing before getting out of leading-strings. Not so the young members of the Brush family. They were sent out into the world early, and having been attended to by careful nurses, not only proved a source of immediate gain to the happy parent, but of profit to themselves. The first sale made by the Anglo Brush Corporation was to the Eastern Électric Light and Power Company, Limited, in July, 1881, and this brought them, in cash and shares, £ 38,000. Next they disposed to Mr. R. Hammond for £20,500 the right of sale in the Brush and Lane-Fox patents, who, remembering the fifth commandment, like a tractable child, followed in the footsteps of his parent, turning his purchases to such good account that a separate space must be devoted to the tale of his success. Then the City and Suburban Electric Light Company (which syndicated the Metropolitan Brush) added £175,000 to the coffers of the original Brush, and, besides this amount and £20,000 paid to Mr. Hammond, a sum of £40,000 appears to have adhered to the syndicate which took in hand to form the company for this section of the metropolis. Their next sale was to the Great Western Electric Light Company, Limited, who had vested rights granted them in thirteen counties in England and Wales, and for these £27,530 was received from the promoters of that company. The Great Western Company, in turn, sold their rights over two counties for £15,000, and the Devon and Cornwall Electric Light Company was the result.
The only other company formed in 1879 was The London Agency, Limited, capital £5,000, which apparently had some interests in after years in setting afloat the Electric Sun Lamp and Power Company.
In the middle of 1880 the Electric and Magnetic Company, Limited, was formed to purchase the Jablochkoff patents for England and most of the colonies ; but it subsequently sold them to the Jablochkoff Electric Light and Power Company, Limited, promoted two years after
wards. The only other company registered in that year was Siemens and Co., Limited, to purchase their electric light business, but the shares were privately aliotted among the members of that firm, so that, up till the end of the year 1880, only six companies were really in existence.
The advent of 1881, however, brought more briskness to the newly-found industry, which was destined to do such wonders at no distant date in revolutionising the lighting of the world. In February, 1881, The Swan Electric Light Company, Limited, was brought out, with a capital of £100,000, and this company paid Mr. J. W. Swan £50,000 (half in cash, half in shares) for his patent rights. In the following year advantage was taken of the so far successful working of his lamps and the still more successful promotion of light companies, to dispose of their business to The Swan United Electric Company, Limited. The Electric Light and Power Generator (now The MaximWeston Electric Light Company) was inaugurated on ist April, 1881, and appears to have paid altogether for the Lontin patents, the Harding and Rapieff patents, and the Maxim, Nicholls and Weston patents for England, India, and the colonies, together with certain machinery and plant, £104,500, out of an original capital of £ 150,000, afterwards increased to £172,500. More recently, they, having gone through all their disposable capital, were again in the market for more ready money. The London Contract Company was also formed in 1881, and took a part in the formation of sundry undertakings, notably in the Jablochkoff and the Electric Sun and Lamp Companies. In August and November, 1881, the Anglo-Colonial Electric Light Company, Limited, and the Anglo-General Electric Light Company, Limited,—twin brothers,—with capitals of £8,000 and £24,000 respectively, were formed, as syndicates, to bring out the Laing Electric Light Company, Limited, which, out of a capital of £ 1,000,000 was charged £120,000 for the cost of the patents, the difference intercepted by the two syndicates being apparently £88,000. Why this company could not have been set afloat without the interference of two syndicates it is impossible to divine, unless it be that the capital was so big that it would have to be curtailed in some way, and that this was the only method that suggested itself to bring about this curtailment. At the end of 1881 the list of companies formed was only about TWELVE in number, and of these some were merely floated to assist in floating others, while the systems represented by them were the Wallace-Farmer, Brush, Jablochkoff
Lane-Fox, Swan, Maxim-Weston, Lontin, Rapieff, Crompton, and Laing.
Things thus far had gone on quiescently, and much had been done to improve the various forms of lights and dynamo-machines. The patent office had been besieged by inventors, the best of whose inventions were taken up and shelved by the “knowing ones ” who could bide their time to shower them upon the public. That time had now conie. In January, 1882, four companies were registered ; in February two ; in March five ; during April four, and in May no fewer than thirty-five. On one single day in the last-named month as many as seven companies—four of them of the Brush brood—applied for registration, and still promoters were far from satisfied. Assisted by StockExchange mancuvring, which forced the quotation of shares of companies of very questionable promise to a high premium the day they made their first appeal to public notice, and fresh companies taking care to quote this fact in all their prospectuses, we find that fourteen companies made their debut in June, whilst in July and August (when everybody is supposed to be out of town) a short breathing space was given, only three and one respectively being registered in these months. We had also a few in the waning months of the year; but before then many had had quite enough of electric lighting, so the last few efforts did not meet with the pronounced and favourable receptions which greeted earlier attempts.
It would occupy too much space here to detail the sales of concessions to various parties, and the syndicate companies which were floated in rapid succession while yet there was time, but this can be in part gleaned from a study of their prospectuses, the principal of which are referred to in the following chapters. Anything having an affinity to electricity, whether in the shape of a light, or telephone, or insulating material, or agency to deal in any of these articles could have been floated by the wire-pullers, and the competition for a time seemed to be not on the part of companies to get subscriptions, but of the public to obtain shares which, in the event of not being allotted, they purchased at higher prices from those who took good care to have a substantial allotment. What the result has been we all know; and it is to be regretted that not only are shareholders left with much worthless scrip on their hands in insolvent undertakings, but that many bought them at high premiums, for not only did those who got up the companies obtain a large sum in cash, but were able to get rid of the bulk of their shares at double and treble their
par value, knowing well that when the turn came they could, if so disposed, buy them again at nominal prices.
During the past few years, then, there have been altogether ninety-one companies registered with nominal capitals aggregating £26,000,000, an amount out of all proportion to the present necessities of an industry which is only passing through the experimental stage; and this is the more apparent when it is taken into consideration that the debentures and paid-up capital of all the British gas companies quoted on the Stock Exchange do not exceed £30,000,000.
What is the present position of matters? The balance sheets of such of the companies as have published them show that the bulk of their capitals has been absorbed by the heavy sums paid for so-called “valuable patents” and extensive outlay for plant, for which there is no ready sale, the assets for the most part consisting of sundry shares in offshoot companies, which are at present of no value. Of the principal companies quoted in the official list of the Stock Exchange, representing a considerable capital, it may be stated that the quoted prices at one period reached an average of four times their par value, whereas now, with attenuated funds and a lack of profitable business, they stand at a heavy discount. Many, by misleading prospectuses, got their shares subscribed for, and some, which at the time were much sought after, are now left to the tender mercies of the liquidators. Unfortunately, this does not occur until after the bulk of the capital subscribed has been passed on to the promoters, so the shareholders are left to suffer.
We append a list of the companies floated, or endeavoured to be floated in connexion with electric lighting, showing the amount of their nominal capital, what was absorbed by the patentees and promoters, the systems they intended to use, and so far as can be ascertained the transfers and sales that were arranged. Although every endeavour has been made to supply reliable information, the table may not be absolutely correct in every detail, but sufficient to give a fair idea of the extent of the operations carried on so merrily for a few months in 1882, and on a smaller scale in previous years.