The idea Philo T. Farnsworth had conceived at the age of 14 had worked. But to become the television we know today, there would be years of work, many more investors and legal maneuvers from well-financed competitors. Farnsworth's goal was to create a system that could show 400 lines per frame. The competition was still working with mechanical systems that could only show 50 lines per frame.
Phil's business partners had now invested $60,000 more than they planned. Some were ready to sell the idea to a large electrical company to recoup their investments. But Phil's vision was to file a number of related patents so that companies who wanted to use them would have to license these patents. In the long run this would be much more profitable than selling out so early in the game.
On Sept. 3, 1928, The San Francisco Chronicle described Phil's television as a "queer looking line image in a bluish light which smudges and blurs frequently, but the basic principle is achieved and perfection is now a matter of engineering."
Despite the growing publicity, financial difficulties were ever present and the original investors wanted to cash in. So a stock broker named Jess McCargar suggested they issue stock in the company. The new business was named Television Laboratories Inc.
In New York City, a Russian emigre named David Sarnoff was appointed vice president and general manager of the giant Radio Corporation of America. RCA had made millions by controlling the patents of radio broadcasting. They had purchased the patents of Marconi and other radio pioneers. Now every company that manufactured radio sets paid royalties to RCA, but these patents were due to expire. Sarnoff was most interested in Phil's work.
Sarnoff had learned of another Russian, a Vladimir Zworykin, who had also been experimenting with television. In 1929 he had produced images with a cathode ray tube. Zworykin had applied for patents also, but they had not been accepted. Sarnoff knew that television was the future. So he hired the Russian engineer to invent and patent television for RCA. Zworykin's first assignment was to visit Farnsworth in San Francisco to see what this young man, twenty years his junior, was up to.
Under the pretext of licensing the work, Phil showed him how the Image Dissector worked. Several eyewitnesses heard Zworykin exclaim, "This is beautiful. I wish I had invented it."
While Phil was out of town to see Bell Labs new improved cesium, David Sarnoff himself sought permission from the investors to see Phil's invention. When Sarnoff saw Phil's television working, he quickly offered to buy the Television Laboratories Inc. including Phil's services. George Everson rejected the $100,000 offer.
At this time the "Radio Trust" consisting of RCA, AT&T and GE had pooled their radio patents. Philco Radio Corporation, a smaller company that nevertheless sold a lot of radios, paid the usual royalties as others did. But they saw the opportunity and became the first television licensee. Farnsworth's company would move to the Philco labs in Philadelphia.
Phil's lab crew was out-of-place in its new corporate environment, but they continued to perfect their system. The F.C.C. granted them an experimental license to broadcast over the air. The first receiver was set up in Phil's home and his young son was fascinated with the broadcast of a Walt Disney film "Steamboat Willy." While there were no commercials, there was only the one program and it repeated itself over and over. A few miles away at the Philco lab Farnsworth's crew were manipulating the electronic circuits.
The relationship with Philco was straining to the breaking point. The final straw came when Phil and Pem's second son died before the advent of antibiotics. Grief stricken, Phil and Pem made arrangements to bury their son in their home town of Salt Lake City. Philco, however, would not grant Phil a leave of absence. Pem had to go without him.
The Great Depression was now in full swing, and according to their stock broker, the prospects of selling additional stock in Television Labs was unlikely. Farnsworth said he'd do it himself, if necessary. But whatever happened, he was unwilling to stay at Philco. Farnsworth moved all the equipment he owned back into the Farnsworth living room.
The stock broker offered to sell stock again if Phil would cut his staff drastically. The business was reincorporated as Farnsworth Television. With a core lab crew, the team began reconstructing their work, this time in a laboratory in the suburbs of Philadelphia. Over the last ten years, they had made a great deal of progress. The blurred image was much sharper thanks to their invention of the "sawtooth" waveform. Ghosting was eliminated by the introduction of a horizontal blanking interval. They were now achieving a horizontal resolution of 220 lines and the number of their patents had grown.
Back at RCA, Zworykin had developed a competing video camera tube called the "Iconoscope." RCA intended to claim priority over Farnsworth's "Image Dissector." They wanted to control television just as they had controlled radio. As Sarnoff said in private, "RCA does not pay royalties, we collect them."
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