United Wireless Telegraph Company
[2] (There had been considerable skepticism about Amalgamated at the time of its formation, with a United States Investor reviewer labeling it "the latest move in the De Forest Wireless comedy".
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.
[4] The newly formed United was initially, and falsely, promoted as being a consolidation of the most prominent U.S. and British radio firms, combining American DeForest with the worldwide holding of London-based Marconi's Wireless Telegraph Company, Limited.
However, an alternate explanation is that he was no longer welcome, due to his inability to develop an effective and non-infringing radio receiver — American DeForest's employment of electrolytic detectors had led to the Fessenden lawsuits, resulting in adverse and expensive legal judgments over the company's use.
Moreover, General H. H. C. Dunwoody, an American DeForest vice president, had recently invented a non-infringing carborundum detector, which made the services of de Forest appear to be unneeded.
United Wireless promotional materials painted a glowing picture of the company's future, including claims that their engineers would soon perfect audio transmissions, bringing income from subscribers using radiotelephones for personal communication or for listening to entertainment broadcasts.
These restrictions meant that United's management could declare arbitrary stock valuations that increased at regular intervals, eventually reaching $50, allowing the company to claim fictitious appreciation that was never tested on the open market.
Because the primary objective of United Wireless was the sale of nearly worthless stock at inflated prices, day-to-day operations could be used as a "loss leader" for gaining publicity, and also for driving legitimate competitors out of business by starving them of revenue.
[10] Following years of complaints, in June 1910 inspectors from the United States Postal Department moved to shut down what was described as "one of the most gigantic schemes to defraud investors that has ever been unearthed in this country",[11] beginning with the arrest of Christopher Columbus Wilson and one of his top associates.
Overall, United Wireless' six-year dominance of U.S. radio communications had a strong negative impact, in part due to the skepticism and disrepute it and other fraudulent U.S. companies brought to the fledgling industry.
By providing radio equipment and operators below cost to freighters and small passenger vessels, which normally would not have been able to afford the service, United helped save the lives of endangered seafarers now able to summon assistance during emergencies.
