The following article is from our June 2008 issue.

Inventing in A Prison Cell Werner von Siemens: entrepreneur extraordinaire - By Christine Schulz

Right now, Siemens is mostly making headlines for corruption. With his unorthodox ideas, the company's founder Werner von Siemens would have been a good source of headlines, too, albeit more favorable ones. Even his workers in the Caucasus learned to keep up with the Joneses.

He produced his first successful invention behind bars, survived a shipwreck in the Red Sea and escaped disaster in the Mediterranean. He raised his workers' wages because "the money would burn in my hand like a glowing iron if I didn't give my loyal helpers the expected share," adding that it heightens motivation for "great new projects." Werner von Siemens, the founder of the high-tech corporation that is drifting in rough seas at the moment due to a bribery scandal, was an entrepreneur extraordinaire.

Born in 1816 near Hanover, the tenant farmer's son dreamed of forging a "global business la Fugger" on the template of the 15th-century Augsburg-based commercial and banking house.

Throughout his life, he experimented: sometimes with more, sometimes with less successful results but always with a willingness to take risks. Once he almost blew up his parents' house after storing a bowl with a slushy phosphorus-potash mixture in his room. His cleaning boy unsuspectingly placed the bowl on the stove and the stuff exploded.

The blast broke Siemens' right eardrum. He had ruined his left one shortly before during shooting practice. The lesions healed but Siemens was hard of hearing from then on.

In 1838, as an officer trainee at the Prussian Artillery and Engineering Academy in Berlin, he invented a method to use nitrocellulose - cellulose soaked in nitric acid - as a military propellant and discovered a new zincography process. But he didn't start to earn real money until the galvanization process using electrolytic current, which he invented while a prisoner in the Magdeburg citadel. The 24-year-old sat there because he participated in an illegal duel.

While other prisoners languished while behind bars, Siemens moved into his cell most cheerfully: Finally, time to experiment, he thought. He had brought along his own laboratory. Astonishingly, upon learning he was to be pardoned and released early, he asked that his sentence be extended. He said he had not completed his experiments yet.

Finally, he succeeded in gilding a silver spoon - and vice versa. A jeweler in Magdeburg bought the rights to use the galvanization process. His brother Wilhelm had the process patented in England, resold it and in doing so, laid the financial foundation for other projects.

In 1846, using a cigar box, tin plate and small pieces of iron and copper wire, Siemens built a telegraph that used a needle to point to the right letter, instead of using Morse code with an automatic switch. It worked better than the one by Englishman Charles Wheatstone. When he presented it at the Physikalische Gesellschaft in Berlin, the mechanic Johann Georg Halske proposed that they start a joint telegraph company. One year later, Siemens & Halske was producing porcelain insulations for the telephone cables attached to telephone poles and lightning rods in Berlin.

Attempts to run cables underground failed at the time because rodents and moisture destroyed the metal cables. This time, Siemens' brother Wilhelm helped to get the breakthrough idea: Wilhelm Siemens had sent him a rubber-like material called gutta-percha from England. Siemens found that it was easy to shape, once heated, and built a gutta-percha press that he used to jacket and insulate the cables.

The pivotal commission came in 1848, when the Prussian king ordered an underground telegraph line from Berlin to Frankfurt where the first German National Assembly was in session. The monarch wanted to be informed as quickly as possible about what was happening there. From then on, Siemens was doing international business: His lines connected Warsaw with Saint Petersburg, then the Baltic Sea with Moscow and Moscow with the Crimea. The French and the English soon telephoned via undersea cable from Dover to Calais. One line traversed the Red Sea and went on to India.

On the return from Egypt, Siemens' ship capsized on a reef, forcing him to spend five days on a coral island in the torrid heat, awaiting deliverance. On a different occasion, between Spain and Algeria, a massive waterspout ripped everything off the deck of his ship that wasn't nailed down.

Siemens also made history in the Caucasus − he had purchased a copper mine in Kedabeg but found that the locals always worked only until they had saved up enough money to last for a few months. Then they idled. When Siemens saw that the people lived in caves, he built small houses for a few families. He counted on "the female gender's innate sense for comfortable family life and easily-aroused vanity." Indeed, soon the others wanted their own nice dwellings, too. He had, as Siemens praised himself, awaked desires among the simple people for which the men would now need a steady income.

In Berlin, it displeased Siemens that every worker, whether lazy or industrious, received the same pay - so he introduced bonuses. On top of that, he created a fund for widows and one for pensions.

In 1867, the inventor presented the first electro-dynamic machine at the Paris World Fair. In 1879, he had the first electrically powered train run in Berlin. Nine years later, he was made a noble by Emperor Frederick III. From then on, he used "von" in his name.

By then, his company was already being run by his sons. Siemens died in 1892. Today, only 6.7 percent of the corporation belongs to the about 200 descendants of his family. They rarely speak up, making their recently voiced displeasure with the bribery scandal all the more extraordinary.