United Wireless Telegraph Company

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 American (American Marconi).

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. 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.

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