Triumph of heavy current engineering and internationalization (1865 - 1890)
Werner von Siemens assiduously pushes the expansion of the company: Under his vision of a “global business in the Fugger style,” the company increasingly maintains agencies in other European countries. The successful implementation of technologically challenging and financially expensive large-scale projects brings international recognition to Siemens & Halske.
The cable ship "Faraday" is launched in London, 1874
Werner von Siemens discovered the dynamo-electric principle in 1866. With the advent of the dynamo, it became possible to generate and distribute electrical energy cost-effectively and in large quantities. Unlike others working in the same field at this time, Werner von Siemens was quick to appreciate the economic significance of his discovery. In 1867, Siemens secured the necessary patents in Germany and Britain to enable the company to capitalize on its invention and then announced it to the world.
In the late 1870s, power engineering began to develop at breathtaking pace. In 1879, the first electric railway was presented at the Berlin Trade Fair and the first electric street lighting was installed in Berlin; in 1880 the first electric elevator was built in Mannheim; and in 1881 the world’s first electric tramway went into service in Berlin-Lichterfelde.
Siemens & Halske’s activities in telegraphy entered a new phase of expansion in 1866. Werner von Siemens had had a revolutionary idea to construct a telegraph line reaching all the way from London to Calcutta. Dispatches would be transmitted by means of induced current, fully automatically, and continuously. The company was contracted to build large sections of the 11,000-kilometer line. On April 12, 1870, the sensation was complete: In London, William Siemens demonstrated that it was possible to exchange telegrams with Calcutta within the space of an hour. The laying of ocean cables across the Atlantic, joining Europe and North America, by the Faraday, a purpose-built cabling ship, marked a supreme technical accomplishment. The continents were now joined by cables.
To bind qualified and experienced workers to the company and to secure an employee base, Siemens instituted a variety of welfare measures at an early stage. One of the most prominent was the so-called stock-taking bonus, introduced to enable wage employees to share in the company’s profits. In 1872, Werner von Siemens set up a pension fund that included benefits for widows and orphans. In 1873, the company introduced the nine-hour working day; this was subsequently shortened to an eight-and-a-half-hour day in 1891. And in the same year, the company introduced apprentice training programs for specific trades. These were followed in 1893 by programs focused on workers’ onward training.
With time, Austria emerged as an important source of business alongside Russia and Britain. In 1879, Siemens & Halske set up a subsidiary in the city of Vienna to develop trade with countries in the southeast of Europe. Parallel efforts to gain a foothold in the U.S. market, however, proved unsuccessful, and a U.S. subsidiary formed in 1892 had to be closed down only a few years later. Even so, Siemens & Halske’s foreign business had reached such a volume that the management began setting up foreign agencies in all its key markets during the 1870s.