the life of Philo T Farnsworth - Early Television Foundation

FINANCIAL PROBLEMS UNEXPECTED BANKING SUPPORT l8l
burden of the financing for the next six years reverted directly
to Mr. McCargar and me. The estimated program required a
monthly budget of $1,500 in the beginning,
but a research
laboratory, like a government bureau, has a habit of growing,
and it was not long before operations were on the basis of
$5,000 to $10,000 a month, including the expense of the small
staff at the San Francisco laboratory and the fees for necessary
patent protection.
Because of the highly speculative nature of the investment,
it was not possible or advisable to resort to public financing.
Neither Mr. McCargar nor I was willing to make a stockjobbing
enterprise out of it. There has probably never been a
more alluring opportunity for blue-sky speculative activities.
There was no overhead salary expense except for the necessary
accounting and simple bookkeeping. Miss Baker took care
of all this. All our funds went into research and patent fees. In
all
the years of our association with the venture neither Mr.
McCargar nor I ever received any salary or fees as compensation
from the company. The only reward for our time and effort
was the accretion in value to our original holdings in stock. Mr.
McCargar, as president of the company, had one inflexible rule
that we never violated: we never incurred any obligations, no
matter how pressing the need, unless money was on hand in the
bank to meet them.
As a California corporation, the company was subject to the
very rigid rules imposed by the Commissioner of Corporations
of that state. During all the ensuing years of development, and
up to the time that the Farnsworth company was expanded
into a manufacturing organization, the stock of the company
was held in escrow subject to the supervision and control of
the state commissioner.
From time to time officials of the company were permitted