Who was Nikola Tesla? What would he thought of The Tesla Taxi Company? Nikola Tesla was born an ethnic Serb in the village of Smiljan, within the Military Frontier, in the Austrian Empire (present day Croatia), on 10 July [O.S. 28 June] 1856. His father, Milutin Tesla (1819–1879), was an Eastern Orthodox priest. Tesla’s mother, Đuka Mandić (1822–1892), whose father was also an Orthodox priest, had a talent for making home craft tools and mechanical appliances and the ability to memorize Serbian epic poems. Đuka had never received a formal education. Tesla credited his eidetic memory and creative abilities to his mother’s genetics and influence. Tesla’s progenitors were from western Serbia, near Montenegro.
Tesla was the fourth of five children. He had three sisters, Milka, Angelina and Marica, and an older brother named Dane, who was killed in a horse riding accident when Tesla was aged five. In 1861, Tesla attended primary school in Smiljan where he studied German, arithmetic, and religion. In 1862, the Tesla family moved to the nearby Gospić, where Tesla’s father worked as parish priest. Nikola completed primary school, followed by middle school. In 1870, Tesla moved to Karlovac to attend high school at the Higher Real Gymnasium where the classes were held in German, as it was usual throughout schools within the Austro-Hungarian Military Frontier.
Tesla later wrote that he became interested in demonstrations of electricity by his physics professor. Tesla noted that these demonstrations of this “mysterious phenomena” made him want “to know more of this wonderful force”. Tesla was able to perform integral calculus in his head, which prompted his teachers to believe that he was cheating. He finished a four-year term in three years, graduating in 1873.
In 1873, Tesla returned to Smiljan. Shortly after he arrived, he contracted cholera, was bedridden for nine months and was near death multiple times. In a moment of despair, Tesla’s father (who had originally wanted him to enter the priesthood), promised to send him to the best engineering school if he recovered from the illness.
In 1874, Tesla evaded conscription into the Austro-Hungarian Army in Smiljan by running away southeast of Lika to Tomingaj, near Gračac. There he explored the mountains wearing hunter’s garb. Tesla said that this contact with nature made him stronger, both physically and mentally. He read many books while in Tomingaj and later said that Mark Twain‘s works had helped him to miraculously recover from his earlier illness.
In 1875, Tesla enrolled at Austrian Polytechnic in Graz on a Military Frontier scholarship. During his first year, Tesla never missed a lecture, earned the highest grades possible, passed nine exams (nearly twice as many as required), started a Serb cultural club, and even received a letter of commendation from the dean of the technical faculty to his father, which stated, “Your son is a star of first rank.” During his second year, Tesla came into conflict with Professor Poeschl over the Gramme dynamo, when Tesla suggested that commutators were not necessary.
Tesla claimed that he worked from 3 a.m. to 11 p.m., no Sundays or holidays excepted. He was “mortified when [his] father made light of [those] hard won honours.” After his father’s death in 1879, Tesla found a package of letters from his professors to his father, warning that unless he were removed from the school, Tesla would die through overwork. At the end of his second year, Tesla lost his scholarship and became addicted to gambling. During his third year, Tesla gambled away his allowance and his tuition money, later gambling back his initial losses and returning the balance to his family. Tesla said that he “conquered [his] passion then and there,” but later in the United States he was again known to play billiards. When examination time came, Tesla was unprepared and asked for an extension to study but was denied. He did not receive grades for the last semester of the third year and he never graduated from the university.
Tesla aged 23, c. 1879
In December 1878, Tesla left Graz and severed all relations with his family to hide the fact that he dropped out of school. His friends thought that he had drowned in the nearby Mur River. Tesla moved to Maribor, where he worked as a draftsman for 60 florins per month. He spent his spare time playing cards with local men on the streets.
In March 1879, Tesla’s father went to Maribor to beg his son to return home, but he refused. Nikola suffered a nervous breakdown around the same time. On 24 March 1879, Tesla was returned to Gospić under police guard for not having a residence permit.
On 17 April 1879, Milutin Tesla died at the age of 60 after contracting an unspecified illness. Some sources say that he died of a stroke. During that year, Tesla taught a large class of students in his old school in Gospić.
In January 1880, two of Tesla’s uncles put together enough money to help him leave Gospić for Prague, where he was to study. He arrived too late to enroll at Charles-Ferdinand University; he had never studied Greek, a required subject; and he was illiterate in Czech, another required subject. Tesla did, however, attend lectures in philosophy at the university as an auditor but he did not receive grades for the courses.
AC and the induction motor
Drawing from U.S. Patent 381,968 , illustrating the principle of Tesla’s alternating current induction motor
In late 1886, Tesla met Alfred S. Brown, a Western Union superintendent, and New York attorney Charles F. Peck. The two men were experienced in setting up companies and promoting inventions and patents for financial gain. Based on Tesla’s new ideas for electrical equipment, including a thermo-magnetic motor idea, they agreed to back the inventor financially and handle his patents. Together they formed the Tesla Electric Company in April 1887, with an agreement that profits from generated patents would go ⅓ to Tesla, ⅓ to Peck and Brown, and ⅓ to fund development. They set up a laboratory for Tesla at 89 Liberty Street in Manhattan, where he worked on improving and developing new types of electric motors, generators, and other devices.
In 1887, Tesla developed an induction motor that ran on alternating current (AC), a power system format that was rapidly expanding in Europe and the United States because of its advantages in long-distance, high-voltage transmission. The motor used polyphase current, which generated a rotating magnetic field to turn the motor (a principle that Tesla claimed to have conceived in 1882). This innovative electric motor, patented in May 1888, was a simple self-starting design that did not need a commutator, thus avoiding sparking and the high maintenance of constantly servicing and replacing mechanical brushes.
Along with getting the motor patented, Peck and Brown arranged to get the motor publicized, starting with independent testing to verify it was a functional improvement, followed by press releases sent to technical publications for articles to run concurrent with the issue of the patent. Physicist William Arnold Anthony (who tested the motor) and Electrical World magazine editor Thomas Commerford Martin arranged for Tesla to demonstrate his AC motor on 16 May 1888 at the American Institute of Electrical Engineers. Engineers working for the Westinghouse Electric & Manufacturing Company reported to George Westinghouse that Tesla had a viable AC motor and related power system—something Westinghouse needed for the alternating current system he was already marketing. Westinghouse looked into getting a patent on a similar commutator-less, rotating magnetic field-based induction motor developed in 1885 and presented in a paper in March 1888 by Italian physicist Galileo Ferraris, but decided that Tesla’s patent would probably control the market.
In July 1888, Brown and Peck negotiated a licensing deal with George Westinghouse for Tesla’s polyphase induction motor and transformer designs for $60,000 in cash and stock and a royalty of $2.50 per AC horsepower produced by each motor. Westinghouse also hired Tesla for one year for the large fee of $2,000 ($56,900 in today’s dollars) per month to be a consultant at the Westinghouse Electric & Manufacturing Company’s Pittsburgh labs.
During that year, Tesla worked in Pittsburgh, helping to create an alternating current system to power the city’s streetcars. He found it a frustrating period because of conflicts with the other Westinghouse engineers over how best to implement AC power. Between them, they settled on a 60-cycle AC system that Tesla proposed (to match the working frequency of Tesla’s motor), but they soon found that it would not work for streetcars, since Tesla’s induction motor could run only at a constant speed. They ended up using a DC traction motor instead.
Tesla’s demonstration of his induction motor and Westinghouse’s subsequent licensing of the patent, both in 1888, came at the time of extreme competition between electric companies. The three big firms, Westinghouse, Edison, and Thomson-Houston, were trying to grow in a capital-intensive business while financially undercutting each other. There was even a “war of currents” propaganda campaign going on with Edison Electric trying to claim their direct current system was better and safer than the Westinghouse alternating current system. Competing in this market meant Westinghouse would not have the cash or engineering resources to develop Tesla’s motor and the related polyphase system right away.
Two years after signing the Tesla contract, Westinghouse Electric was in trouble. The near collapse of Barings Bank in London triggered the financial panic of 1890, causing investors to call in their loans to Westinghouse Electric. The sudden cash shortage forced the company to refinance its debts. The new lenders demanded that Westinghouse cut back on what looked like excessive spending on acquisition of other companies, research, and patents, including the per motor royalty in the Tesla contract. At that point, the Tesla induction motor had been unsuccessful and was stuck in development. Westinghouse was paying a $15,000-a-year guaranteed royalty even though operating examples of the motor were rare and polyphase power systems needed to run it were even rarer. In early 1891, George Westinghouse explained his financial difficulties to Tesla in stark terms, saying that, if he did not meet the demands of his lenders, he would no longer be in control of Westinghouse Electric and Tesla would have to “deal with the bankers” to try to collect future royalties. The advantages of having Westinghouse continue to champion the motor probably seemed obvious to Tesla and he agreed to release the company from the royalty payment clause in the contract. Six years later Westinghouse purchased Tesla’s patent for a lump sum payment of $216,000 as part of a patent-sharing agreement signed with General Electric (a company created from the 1892 merger of Edison and Thomson-Houston).