Banker Backed

When he was six, towheaded Philo Taylor Farnsworth became so delighted with a toy dynamo that he solemnly declared he hoped he had been born an inventor. By 1921, when he was 15, Philo had conceived a basic principle of television--electronic scansion of an image.

Soon learning there was no spot cash up that alley, the young inventor turned to more practical pursuits. To earn money for his first pair of long pants, he invented a thief-proof auto lock which netted him $25. At 19 he was working in a railroad yard. Then he landed a job in the fund-raising office of George Everson, a San Franciscan with brains and friends.

Though no scientist, Everson recognized genius when he heard his gangling new employe's television theory. He went to see two officers of San Francisco's Crocker First National Bank, Jesse B. McCargar and the late James J. Fagan. Crusty Banker Fagan remarked: "Well, that is a damn fool idea but someone ought to put money into it and someone that can afford to lose it." He and McCargar put up an initial $25,000. The year was 1926.

Inventor Farnsworth had still to prove that his ideas worked. For twelve years he labored in San Francisco and Philadelphia laboratories--watched over by his pretty wife, Pern, who saw to it that he did not forget to eat while building his complex equipment. By 1930 the world of science admitted his theories on television were practical.

In 1934 television had become a reality in England, where Farnsworth licensed Baird Television Ltd., and in Germany, where he licensed Fernseh A. G. But though the U. S. was the home of Philo Farnsworth and the adopted home of his sole peer in television, RCA's Vladimir Kosma Zworykin, television remained something U. S. citizens heard much about but seldom saw. Last week the U. S. heard something more about television: after twelve years Philo Farnsworth was to have his own manufacturing company with two factories and over $2,500,000 in cash behind it, one of RCA's major executives at its head. And vast RCA was to have its first full-fledged competitor in television.

Back of Farnsworth's latest luck were two more bankers with imagination, this time New Yorkers. One was Kuhn Loeb Partner Hugh Knowlton, whose company has been chaperoning Farnsworth financially for four years. The other was Harry Cooke Gushing of E. H. Rollins & Sons, Inc. Last week Farnsworth Television & Radio Corp. filed with SEC a registration statement covering 600,000 shares of $1 -par-value common stock. Mr. Cushing's firm will head a syndicate to raise over $3,000,000 from sale of the stock. Farnsworth Corp. will absorb The Capehart Inc. (famed record-changing phonograph) and the manufacturing facilities of General Household Utilities Co., which include the plant at Marion, Ind. where the old Grigsby-Grunow radio sets were made.

Farnsworth -Nicholas. Philo Farnsworth will be a vice president and director of research of his company. Chairman of the board is Farnsworth's old backer, Banker McCargar. Backer Everson is treasurer, secretary and a director. To be president, Edward A. (for something he promised his wife not to tell) Nicholas resigned from RCA.

Descendant of Nordic sea captains, big, blue-eyed Edward Nicholas became a wireless operator on Great Lakes steamers about the time radio got into the dictionary. He left the sea to manage a wireless station in Cleveland, became chief operator, then supervisor of the Great Lakes Division of Marconi Wireless Telegraph Co., whence he was hired by RCA's David Sarnoff as his assistant. When RCA bought Victor Talking Machine Co. he was put in charge of Radiola sales. He got into televison in 1934 when RCA promoted him to manager of its license division. For running Farnsworth, 45-year-old Edward Nicholas will get a block of stock and a starting salary close to the $30,000 he drew down at RCA.

Inventor Farnsworth, who, besides his televisionary accomplishments, is Philadelphia's leading Mormon, will move his laboratory out to Capehart's streamlined plant in Fort Wayne, Ind. The old General Household plant at nearby Marion will be used for manufacturing. With a complete line of radios, phonographs and radio-phonographs, besides Capehart's record-changer patents, Farnsworth Corp. will have something to keep it busy while'television is turning the corner.

Although the new company will be nowhere nearly as big as RCA (or Philco Radio & Television Co. and Zenith Radio Corp. which are also equipped to make television sets), it has the strongest patent position in television outside of RCA. Philo Farnsworth owns 55 patents, has 78 pending, is positive that no television sender or receiver can be made without using some of his patents. But neither can Philo Farnsworth build a set without the patents of RCA's Zworykin, and so Farnsworth and RCA will cross-license each other.

RCA's subsidiary, NBC, has already announced that it will begin its own public televising, a series of two-hour-a-week programs, on April 30, with the opening of New York's World's Fair.

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