On this day in economic and financial history…
April 2 is notable for two important patents, both of which have contributed greatly to the fortunes of two longtime components of the Dow Jones Industrial Average (Dow Jones Indices:.DJI). In fact, these two patents can be considered indirectly responsible for much of the modern industrial world’s efficiency, as well as the success of other Dow components. As such, they may be two of the most underrated patents in American industrial history.
The motor of the world
George B. Brayton gained a patent for his “Ready Motor” — an early reciprocating internal-combustion engine and one of the first internal-combustion engines ever to provide motive power — on April 2, 1872. The Brayton engine, as it’s now popularly known, maintained its operation by means of pilot flames, similar to today’s gas stovetops, and also established the “Brayton cycle,” which remains a popular principle in the construction of gas turbine engines to this day. The Brayton engine, within a few short years, would also become the focal point of the auto industry’s first major patent war.
Brayton’s Ready Motor went on display at the Philadelphia Centennial Exposition in 1876, where it caught the eye of tinkerer George B. Selden. The sight of this chugging motor inspired Selden to create the “road engine,” which was to become the first true patented automobile in the United States. This patent was to create such trouble for the early auto industry that it brought Henry Ford Motor Company (NYSE:F) into a fierce legal fight that lasted for years. Before Ford Motor Company (NYSE:F)’s ultimate triumph in 1911, Selden used the patent and its defensive cartel to push many other automakers to either enter licensing agreements or go out of business. Once the threat of patent litigation cleared, the auto industry was free to develop along competitive lines, rather than legal ones — and here Ford Motor Company (NYSE:F) would triumph with its assembly line manufacturing process.
Although the auto industry transitioned away from Brayton-type engines very early in its history, the Brayton cycle informs the development of engines to this day. Gas turbines and air-breathing jet engines both operate under Brayton cycle principles — which means that the underpinnings of virtually all modern airline flights were first patented more than 140 years ago. General Electric Company (NYSE:GE) leads the world in jet engines; this segment is worth more than $18 billion to the industrial conglomerate. General Electric Company (NYSE:GE) also happens to be a major developer of gas generators, which makes the company — which traces its origins to the same decade in which Brayton developed his engine — perhaps the greatest beneficiary of Brayton’s innovation.
Foiling high production costs — for good
Charles Martin Hall also gained an important patent on April 2: His process for low-cost extraction of metallic aluminum from raw ore was patented on April 2, 1889. For the first time, the abundant metal could be brought out of the earth without great labor and the resulting exorbitant prices.