One week later.
Maryland, headquarters of the Baltimore and Ohio Railroad Company.
Smoke swirled within the president's office.
John Garrett sat behind his desk, clutching a newspaper clipping.
Andrew Carnegie sat on the leather sofa opposite him.
He had just finished a brief report on subsequent steel rail deliveries, but Garrett's reaction made him uneasy.
"Andrew," Garrett said, pushing the clipping across the desk.
"Have you seen this morning's Wall Street Chronicle?"
Carnegie leaned in to take a look.
"Are you referring to Lex Steel's five-year installment plan? I saw it. But Mr. Garrett, it's clearly just Argyle playing word games. With four percent interest on a sixty-five dollar principal over five years, their cost per ton is far higher than the fifty-eight dollars I'm offering you."
"But that's not how the math works, Andrew."
Garrett sighed and rubbed his temples.
"You're an industrialist; you only look at the absolute profit per ton. But we railroad companies look at cash flow."
Garrett picked up a financial report from the desk.
"I just held a board meeting, and the directors are very interested in Lex Steel's proposal. We previously received a three-million-dollar renovation loan from the Treasury Department. If we go with your plan and pay entirely in cash, that three million will only buy less than fifty thousand tons of steel rails. The renovation project would only be less than half finished."
"But if we accept Argyle's proposal..."
Garrett stared at Carnegie with a hint of apology.
"We only need to put down three hundred thousand dollars as a down payment. The remaining two point seven million can be used to purchase new standard-gauge locomotives, renovate stations, and pay workers' overtime. The project's progress will triple in speed."
Carnegie stood up abruptly.
"Mr. Garrett! Have you lost your mind? You must know there are riders in that contract; the Argyle Bank wants to audit your books. They even want to put people on your board! You are handing control of the Baltimore Railroad to Argyle on a silver platter."
"Andrew, watch your tone."
Garrett's voice rose, his apology turning into displeasure.
"I know it's poison, but at least it can quench our thirst. If we stop work because our funds dry up, the shareholders will kick me out of this office next month. You must realize that the subsidies from Washington don't come for free."
"Then have you forgotten our alliance agreement?"
Carnegie pressed both hands onto the desk.
"We agreed to stand against him together!"
"Sigh... Andrew. In the world of business, there are no eternal alliances, only immediate survival."
Garrett avoided Carnegie's gaze.
"I will pay cash for the two thousand tons we previously ordered as per the contract. But for subsequent purchases... the board has decided to suspend orders from your factory. We will begin negotiations with Lex Steel."
Carnegie felt as if he had been struck. He took two steps back and slumped onto the sofa.
"He's cut off my cash flow,"
Carnegie muttered to himself.
Without continuous orders, the blast furnaces would have to reduce production or even be extinguished. And those Appalachian coal mine owners he had just contacted would defect because they wouldn't receive payment.
"I'm very sorry about this, Andrew."
Garrett opened his snuff box and took a pinch.
"No need for apologies."
Carnegie grabbed his bowler hat from the side.
"Mr. Garrett, you will regret this. When Argyle's auditors are sitting in this office, you will miss the decision you made today."
Carnegie turned and walked out of the office.
He didn't linger, heading straight for the train station to board a train back to Pittsburgh.
Two days later.
Pittsburgh, the accounting office of the Carnegie Steel Company.
The narrow room was piled high with ledgers.
Accountant Henry Phipps was frantically checking figures. Tom Carnegie stood by, his face grim.
The door was pushed open, and Andrew strode in.
"The situation is dire."
Andrew took off his overcoat and threw it onto a chair.
"The Baltimore Railroad defaulted; they canceled the subsequent orders. Argyle used credit to steal our clients. Several other Midwestern railroad companies have also sent telegrams demanding similar five-year installment terms."
"But we can't provide that."
Phipps pushed up his rimless glasses.
"Andrew, the funds Old Morgan gave us are meant to subsidize the loss per ton. That's dead money. We don't have a banking license; we can't do financial discounting. If we let customers pay in installments, our cash chain will break next month. We won't be able to buy coal or pay wages."
Tom slammed his fist on the table.
"Then what? Shut down the blast furnaces? We just signed guaranteed purchase agreements with those mine owners. If we stop production, the liquidated damages alone will bankrupt us."
Andrew paced back and forth in the room, his leather shoes creaking on the wooden floor.
"We can't stop. The fires must never go out."
Andrew stopped and made a decision.
"Argyle can lend because he has the Argyle Bank behind him. We don't have a bank, but we have something to mortgage."
"Mortgage what?" Tom asked. "The factory's title deeds are already mortgaged to Drexel."
Andrew turned his head, his eyes flashing with a gambler's glint.
"We don't need them to pay in cash."
Andrew looked at Phipps.
"If those Midwestern railroad companies want to buy rails, tell them we don't need five-year installments. We can allow them to pay with equivalent railroad bonds or stocks."
"Payment in stock?" Phipps was stunned.
"But... Andrew, those Midwestern railroad stocks are highly volatile. Some lines haven't even finished their roadbeds; their stocks are called'scrap paper' on Wall Street. Are we going to use a pile of scrap paper to pay the workers' wages?"
"It's scrap paper in Pittsburgh, but not in London."
Andrew walked to the desk. As his thoughts became clearer, he drew a cycle on a piece of paper with a pen.
"We exchange rails for their railroad bonds. Then, I take these bonds to Philadelphia to see Drexel. I'll have Drexel package these bonds and sell them to Old Morgan in London via the undersea cable. Old Morgan has countless European clients looking to invest in American railroads."
"Old Morgan gets the bonds and pays us in pounds sterling. The pounds are converted to dollars in Philadelphia. The dollars return to Pittsburgh to become coal and wages. The coal becomes rails, and the rails go out to be exchanged for more bonds."
Tom listened, dumbfounded.
"This is a massive capital cycle, but what if it breaks at any link?"
"Rest assured, it won't break," Andrew said firmly.
"Everyone knows Old Morgan loathes Argyle. As long as I tell him these bonds belong to Midwestern trunk lines not yet controlled by Argyle, he'll take them all. He needs these chips to counter the Argyle Bank's expansion across the railroad map."
"Argyle wants to use credit to trap the existing railroad tycoons. Fine, then we'll support the western pioneers who haven't made it big yet, using rails to trade for their future right-of-way."
Andrew grabbed his hat.
"Phipps, send telegrams to all the railroad planning committees in Chicago, St. Louis, and Omaha. Tell them Carnegie Steel Company accepts bonds in exchange for rails."
"Tom, ready the carriage. I'm going to Philadelphia again. This time, I'm going to weld the gears of this cycle firmly onto Drexel's desk."
The coal smoke in Pittsburgh remained thick.
In a desperate situation, Carnegie had found a way to survive by binding physical steel to transoceanic finance.
This commercial strangulation was escalating in an even more complex fashion.
April 2, 1870.
Argyle Central Laboratory, New Jersey.
The wheels of the carriage ground over the uneven dirt road. Felix pushed open the door and stepped down from the footboard.
As soon as he landed, he covered his nose and mouth with a handkerchief and coughed violently twice.
This was not the peaceful manor on Long Island.
The air was thick with the strong smell of ozone, the pungent odor of sulfuric acid, and the dust of burning coke.
Six massive red-brick buildings crouched like beasts along the banks of the Hudson River. The roar of machinery made the ground tremble slightly.
Heinrich White was already waiting at the entrance of the main building.
"Boss, welcome to the inspection of General Electric's core incubator."
White stepped forward, speaking loudly to be heard over the surrounding noise.
Felix put away his handkerchief and nodded.
"How is the progress of Power Station No. 2 over in New York?"
Felix asked as he walked.
"The grid connection test can be conducted next month."
White followed closely beside him.
"We've laid an additional thirty miles of underground copper cable in Lower Manhattan. Once the test passes, the entire financial district and several large warehouse areas along the river will be able to use our Incandescent Lamps. Additionally, the 'Electric Fans' you requested have been manufactured; the first batch of five hundred prototypes has rolled off the line. Sholes is arranging distribution channels."
"Good, pick up the pace."
Felix entered the laboratory building.
The interior space was divided into countless independent work areas. Some areas were testing massive transformer coils, with blue electric arcs jumping through the air; others were conducting heat-resistance experiments on chemical insulation materials, emitting pungent white smoke.
Felix walked through a corridor to a smaller laboratory located on the east side of the building.
A wooden sign hung on the door that read "Acoustics and Micro-current Research."
Pushing open the door, the noise inside was relatively quieter.
But the floor was covered in tangled wires, looking like a nest of snakes.
Thomas Edison was hunched over a cluttered workbench.
His hair was disheveled, and he held a pair of tweezers, adjusting a metal reed. His ear was pressed close, as if listening for some subtle sound.
"Tom," Felix spoke up, interrupting him.
Edison jumped, and the tweezers in his hand fell onto the table.
Turning around and seeing it was Felix, he immediately stood up straight and wiped his hands on his dirty pant legs.
"Boss, what brings you here?"
"To see how the improvements on your Phonograph are coming along."
Felix walked to the workbench and glanced at the scattered parts on the table.
"Sholes complained that the first batch of tin foil cylinders were too easily damaged in an office environment. The recording quality degrades very quickly."
"Ah... that... I'm working on solving that problem."
Edison scratched his head, looking a bit embarrassed.
"I'm trying to use hard wax instead of tin foil. The recording depth of the wax cylinder is better, and it can be replayed hundreds of times. It's just that the pressure of the stylus still needs fine-tuning."
Edison seemed to remember something, walked to another table, and picked up a stack of blueprints.
"By the way, Boss. Besides the Phonograph, I'm also improving the transmission efficiency of the telegraph. I call it the 'Quadruplex Telegraph.' It can simultaneously transmit two signals in both directions on the same wire. This could quadruple the data throughput of the Western Union Telegraph Company."
Felix flipped through the blueprints casually.
He wasn't interested in the technical details, only the commercial value.
"Can this be patented?"
"Of course, the principle has already been proven," Edison said confidently.
"Good then, hand the blueprints to the legal department. Go to Washington to register it immediately." Felix put down the blueprints.
"Information transmission is also a part of our business."
Edison hesitated for a moment.
"Boss, speaking of information transmission... I've heard some strange news recently, out of Boston."
Felix looked at him, somewhat surprised.
"What news?"
"There's a Scotsman. A teacher who teaches the deaf and mute to speak. His name is Alexander Graham Bell."
Edison picked up a wire and wound it around his finger.
"He seems to be doing some very... foolish experiments."
"Hmm? Foolish?"
"Yes. He believes that human voices can be transmitted directly through wires."
Edison curled his lip, his tone carrying the disdain of a professional rival.
"He calls it the 'Harmonic Telegraph,' and he's researching some kind of multiple audio oscillation. He says he wants to make wires sing like a Phonograph."
"God... it's a complete waste of time."
Edison threw the wire onto the table.
"Telegraphs are meant to transmit clear Morse Code. The waveform of a voice is too complex; the current simply cannot accurately reproduce it. Even if it were transmitted, it would just be a bunch of indistinguishable noise. He's looking in the wrong direction. I want to make wires print text, but he wants to teach wires how to speak."
Edison's words echoed in the laboratory.
White listened from the side without expressing an opinion. As a heavy electrical engineer, he also lacked interest in such micro-current acoustic research.
But Felix did not join in Edison's mockery.
He stood silently in place, his gaze locked on the copper wire Edison had thrown on the table.
His brain was operating at a terrifying speed.
No need for Morse Code operators, no need to wait in line for the telegraph office's translation.
A businessman could speak directly from his office to a client hundreds of miles away.
A general could issue verbal orders directly to commanders on the front lines.
Wasn't this transmission of instantaneous information the telephone?
Bell? There seemed to be a holy land of the scientific community called Bell Labs.
Could it be this person?
If it was, this was a disruption.
"Tom."
Felix's voice suddenly became deep, forming a sharp contrast with the surrounding noise.
"Boss?" Edison looked at him, somewhat confused.
"What did you say that man's name was? Alexander Bell?"
"Yes, in Boston. I heard he's been looking for investors everywhere lately, wanting to buy better experimental equipment."
Felix turned abruptly to look at White, who was standing at the door.
"White."
"Ah? I'm here, Boss."
"Temporarily stop all secondary work you have on hand, except for the grid connection of Power Station No. 2."
Felix issued an extremely stern command.
"Eh? Why?" White was stunned.
"I want you to send someone immediately. No, you lead the team yourself to Boston." Felix pointed a finger.
"Take checks from the Argyle Bank and find this man named Bell."
Edison's mouth hung open.
"Boss, you think his absurd idea can succeed?"
"I don't care how absurd it is at this stage; I only value its potential."
Felix walked up to Edison.
"Tom. If one day, a banker in New York can sit in his chair and directly hear the opening bell of the London Stock Exchange... do you know what that means?"
"It means that whoever controls this'speaking wire' controls the ears of the world."
Felix turned back to face White.
"Find Bell. If he lacks money, buy him out. Give him a laboratory and assistants. Make him work for General Electric."
"What if he's unwilling to sell?" White asked.
A strange glint flashed in Felix's eyes.
"If he refuses, then send people to figure out his research progress. Then organize staff to draw on the principles and blueprints. Have our legal department keep a day-and-night vigil in Washington."
"Beat him to it and register all relevant harmonic oscillation patents. Use legal barriers to seal him inside his Boston attic."
"What I want is not cooperation."
Felix straightened his collar, preparing to leave.
"Remember! Either possess it or destroy it. In this country, no sound is allowed to exist that Argyle cannot hear."
As Felix strode out of the laboratory.
Copper coils lay scattered on the tabletop.
Edison watched the Boss's departing back and swallowed hard.
He suddenly realized that in this man's eyes, science was never about exploring the truth, but about forging a scepter of power.
The steam locomotive belched columns of grayish-white smoke, its wheels grinding against the rails with a piercing screech of brakes.
Heinrich White stepped down from the train's footboard, carrying a cowhide briefcase.
The air at Boston South Station carried the distinct salty tang of the Atlantic Ocean, mixed with the musty scent of old brickwork characteristic of New England.
There was none of the suffocating industrial clamor of New York here; the streets were mostly lined with red-brick row houses, and the roads were paved with neat cobblestones.
White hailed a horse-drawn cab.
"To Somerset Street."
White sat back in the carriage and gave the address to the driver.
The carriage wound through the narrow streets.
White opened his briefcase and double-checked the note he had obtained from Timmy in the Intelligence Department.
Alexander Graham Bell.
Scottish descent, twenty-three years old.
Currently teaching at a school for the deaf in Boston, while renting an attic on Somerset Street as a laboratory.
The carriage stopped in front of a brick building with mottled exterior walls.
White paid the fare and climbed the wooden stairs. The floorboards gave an ear-piercing creak.
The attic door was slightly ajar.
White pushed the door open.
The room was dimly lit, with sunlight filtering through only a single skylight. The air was thick with the smell of sulfuric acid from storage batteries.
On a wooden table in the center of the room lay a cluttered assortment of metal coils, several glass jars filled with acid, and a row of tuning forks of various sizes.
A tall, thin young man with a thick black beard stood with his back to the door, holding a small hammer.
*Ding.*
The young man struck one of the tuning forks. It emitted a clear, vibrating sound.
He immediately pressed his ear to a cylindrical electromagnet on the table, closing his eyes and muttering to himself.
"Frequency one hundred twenty-eight Hertz... current passing through the interrupter... diaphragm vibration frequency consistent."
White walked over to the wooden table.
"Mr. Bell," White spoke up.
The young man started, the hammer in his hand dropping onto the wooden table. He turned around and looked at the stranger in the well-tailored navy blue engineer's uniform with a hint of wariness in his eyes.
"Who are you? How did you get in?"
Bell sized White up.
White pulled a business card from his breast pocket and handed it over.
"Heinrich White, Manager of General Electric Company."
White looked Bell in the eye.
"My Boss, Mr. Felix Argyle, is very interested in the experiments you are conducting."
Bell took the card and glanced at the title and logo on it.
On the East Coast, anyone who read the newspapers couldn't have failed to hear the names Argyle and General Electric.
That was the monopoly giant that had been turning New York's nights into day in recent months.
"General Electric?"
Bell placed the card on the table, his tone showing little sign of being flattered.
"You seem to deal in high-power DC generators and electric lights. I only have a few voltaic piles and some tuning forks here. You've come to the wrong place."
White pulled over a wooden chair that was missing half a leg and sat down.
"We haven't come to the wrong place. Thomas Edison mentioned you to us."
White pointed to the coils on the table.
"He said you are researching the 'Harmonic Telegraph.' Trying to send signals of multiple frequencies over the same wire."
A flash of surprise crossed Bell's eyes, followed by a furrowed brow.
"Edison? The one in New York working on the Multiplex Telegraph? He only knows how to make machines spit out more Morse code. He doesn't understand the nature of sound at all."
Bell walked to the other end of the table and picked up a metal reed connected to a wire.
"Mr. White, the telegraph transmits intermittent current. On or off. That is the most primitive language."
Bell's voice grew louder, carrying the characteristic fervor of a researcher.
"But sound is not intermittent; sound is a continuous wave. If an iron diaphragm is placed in a magnetic field, when sound waves cause the diaphragm to vibrate, it cuts the magnetic field lines, generating an induced current with an identical waveform."
Bell pulled the wire along the table.
"This current travels along the wire to the other end, and through an identical electromagnetic device, it can reconstruct the vibration of the diaphragm, reproducing the sound. This isn't a telegraph; it's a'speaking telephone.'"
White listened quietly.
As a top-tier electrical engineer, he immediately constructed the physical model Bell described in his mind.
Theoretically, it was feasible.
But the technical difficulty lay in the fact that the induced current generated by sound was extremely weak; it would attenuate rapidly over long distances, eventually turning into a mess of noise.
"The principle is ingenious, Mr. Bell."
White sat with his hands crossed over his knees.
"But turning theory into a product requires crossing a chasm. Your attic lacks a mercury vacuum pump, high-precision wire-drawing machines, and even your battery voltage is unstable."
White looked around the meager laboratory.
"You lack capital and equipment, and more importantly, you lack a platform that can turn your ideas into a commercial empire."
Bell set down the reed, looking thoughtful.
"I see. You've come here wanting to buy my patent?"
"More than just the patent," White said, looking directly at Bell.
"Mr. Argyle sent me to buy you. And all of your future time."
White opened his briefcase and took out a document.
"General Electric will establish an independent acoustic communications laboratory for you. The equipment budget will have no upper limit. Whatever materials you need, we will source them for you from around the world. If you need assistants, we will recruit them for you from Columbia University. Your starting annual salary will be ten thousand dollars. Once telephone technology is successfully developed and enters mass production, you will receive a lifelong two percent royalty on the net profits of the product."
A ten-thousand-dollar annual salary, a two percent royalty, and an unlimited budget.
In 1870, this was an offer generous enough to tempt any university professor.
Bell looked at the document, his Adam's apple bobbing.
He currently earned a meager salary teaching classes to the deaf, and he had to calculate carefully for days just to buy a piece of high-purity copper wire.
But he didn't immediately reach for the contract.
Bell's father was also a phonetics expert; he had a Scotsman's stubbornness in his bones, along with the pride of an intellectual.
"The terms are very generous, Mr. White."
Bell took a step back, distancing himself from the contract.
"But I cannot give you an answer right now."
White narrowed his eyes.
"You're not satisfied with the numbers?"
"Oh no, no, no. It's not a matter of money."
Bell pointed to a stack of letters under the table.
"In truth, I am not doing this research alone. I have two partners: Mr. Gardiner Hubbard and Mr. Thomas Sanders. They have provided a portion of the startup capital for my experiments."
"Mr. Hubbard is a lawyer, and Mr. Sanders is a leather merchant. They are also the fathers of my students. I promised them that we would share the future proceeds of this invention. If I am to transfer the entire research project to General Electric, it must be with their consent."
White leaned back in his chair, frowning slightly.
He knew these types; investors always wanted to maximize their interests.
"I must say, Mr. Bell, the law of business is that the big fish eat the small fish. Your two partners can provide you with a few thousand dollars in pocket change, but they cannot provide an industrial-grade supply chain. If they know their business, they will realize that accepting an acquisition by General Electric is the only way out."
White stood up, left the contract on the table, and picked up his briefcase.
"I will be staying at the Parker House Hotel in Boston for three days. You can take this contract to see your partners. In three days, I hope to see your signature in the hotel lobby."
White walked toward the door, then paused and looked back at Bell.
"One more thing, as a friendly reminder. Mr. Argyle is determined to have this technology. If General Electric cannot be your employer, then we will be your competitor. And General Electric has never lost a competition since its inception."
The door closed, and the creaking of footsteps sounded on the wooden stairs once more.
Bell stood where he was.
He looked at the heavy contract on the table, embossed with the Argyle Family crest, and then at his own meager tuning forks and glass jars.
He knew very well that this wasn't just a job offer.
It was an ultimatum delivered to him by a vast commercial kingdom.
To refuse the takeover meant facing the crushing weight of a steel behemoth with endless resources.
Bell took a deep breath, no longer in the mood for experiments.
He had to go see Gardiner Hubbard immediately.
The gravity of this matter had far exceeded the coping capacity of a laboratory inventor.