Emil Rathenau and the German Electrical Industry

Emil Rathenau and his wife Mathilde Rathenau

Emil Rathenau and his wife Mathilde Rathenau

On December 11, 1838German entrepreneur and industrialist, Emil Moritz Rathenau was born. Rathenau was a leading figure in the early European electrical industry. He founded the Allgemeine Elektrizitats Gesellschaft (AEG), the German General Electric Company, with a product range including power stations, railways as well as electrical machines and devices. Rathenau was also the first to produce aluminium in Germany for industrial use.

Emil Rathnau studied mechanical engineering at the Polytechnic in Hanover and at the Technical University of Zurich. He began working at the locomotive factory August Borsig in Berlin and later went to England for two years, where he deepened his knowledge in various workshops and companies.

In 1865, Rathenau returned to Berlin and bought a factory together with a friend and with the help of a financier. They were soon able to profitably implement the production of transportable “unit steam engines” and to continuously expand the company’s operations. However, in 1873 the company dissolved and Rathenau faced difficult times searching for a new project. During the 1870s he visited the world exhibition in Vienna, Philadelphia and Paris. During the 1880s Emil Rathenau was employed by the Reichspost for the establishment of a telephone network in Berlin.

Emil Rathenau was highly influenced by Edison‘s invention of the electric light bulb and recognized its future potential. However, he failed to win Werner von Siemens over to the plan for an electric street lighting system. However, Rathenau acquired the rights to use Edison’s patents for commercial purposes in Germany in 1882. One year later the German Edison Society for Applied Electricity was founded as a joint-stock company under the management of Rathenau.

In 1887 Rathenau freed himself from the American Edison company and Deutsche Bank and Siemens became shareholders. The company became known as Allgemeine Elektricitäts-Gesellschaft (AEG). By the early 1890s the small company developed into an international group of companies with around 3000 employees. However, AEG’s relationship with Siemens turned into confrontation and competition rather than cooperation. During the early 1890s, the conflict expanded into a price war in all areas before an amicable unbundling of contractual relations was achieved in 1894.

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