Webster was born in Roxbury, Massachussets (later part of Boston), the second of three children of Frank G. and Mary Fidelia (Messenger) Webster. His father became a member of the Boston banking firm of Kidder, Peabody & Company in 1888 and was later a senior partner.
Edwin Webster first met Charles Stone in 1884 when taking the entrance examinations for the Massachusetts Institute of Technology. Electing the recently inaugurated course of study in electrical engineering and seated together, they became such close friends that their classmates knew them even then as "Stone and Webster. " Later, they prepared a common senior thesis pertaining to the efficiency of a Westinghouse alternating-current generator. They graduated in 1888.
He and Charles Stone planned to go into partnership as electrical engineers, at that time a new profession offering great opportunity. Their plan was discouraged, however, by Charles R. Cross, professor of physics and head of electrical engineering at M. I. T. , who doubted that there would be enough demand in Boston for two consulting electrical engineers. Stone, therefore, worked first as an assistant to Elihu Thomson at the Thomson Electric Welding Company of Lynn, Massachussets, and then as the agent for the C & C Motor Company in Boston. Webster spent several months touring Europe observing business and engineering developments there, and then worked at Kidder, Peabody & Company. Yet their idea persisted, and in November 1889, with $2, 600 borrowed from their parents, Stone and Webster launched a consulting engineering company in Boston. Since neither gave up his regular job, they employed a recent M. I. T. graduate to manage the office. Slowly, in their spare time, the partners proceeded to organize the company further and to find clients. Webster began full-time work with the company in January 1890, and Stone a few months later. Their firm, at first called the Massachusetts Electrical Engineering Company, listed among its references Gen. Francis A. Walker, president of M. I. T. , Prof. Charles Cross, and Webster's father. The ties with M. I. T. engineering and Boston finance were - and would remain - close. Stone and Webster's concept of the company, expressed in its early literature, suggests the state of electrical technology and helps define the function of the consultant at that time. Noting in 1890 that the development of "electrical invention" in the past few years had been marvelously rapid, the partners believed that the business community needed advice before "taking pecuniary interest in electrical matters brought before them. " Stone, Webster, and their experts therefore offered to design, estimate, and superintend construction of electric light and power plants; they were also prepared to test and calibrate equipment. Their first major project provided New England with one of its earliest high-voltage power transmission facilities. On the recommendation of President Walker and Professor Cross, S. D. Warren & Company in 1890 commissioned the young consulting firm to design and construct a 400-horsepower hydroelectric plant on the Presumpscot River at Saccarappa, Maine, where excess waterpower was available, to supply electricity for its Cumberland paper mill, a mile distant. Stone and Webster used 1, 000-volt direct current for the transmission system. There was little engineering precedent for the work, and they drew confidence from its success. During the next few years they built small electric light plants, reported on the operations of existing facilities, and gained support for their laboratory by testing electrical materials for the Underwriters Union, which did not establish its own laboratory until 1895. The depression of 1893 greatly affected the careers of Stone and Webster. Electrical manufacturers such as General Electric and Westinghouse had taken the securities of operating light and power companies in partial payment for equipment when the investment market would not come forward fast enough with the needed capital. During the panic of 1893, banks demanded reduction on loans to manufacturers, and General Electric had to turn the unseasoned and unsalable securities over to a syndicate, the Street Railway and Illuminating Properties Trustees. Unable to evaluate the properties, the syndicate engaged the firm of Stone & Webster to examine and report upon them. With a combined background in engineering and finance, Charles Stone and Edwin Webster were well suited for the assignment; they also learned greatly from the experience. From examination of the various properties in many parts of the country they became familiar with the problems of financing, operating, and managing electrical plants. On the advice of the elder J. P. Morgan, they invested in one of the most promising of the properties, the Nashville (Tenn. ) Electric Light and Power Company, thus entering what Stone called "the entrepreneur business, " which he defined as the "business of conceiving, creating, developing, and operating any important enterprise. " They later gained a controlling interest in the Nashville company, extended and developed it, and within a few years sold it for a staggering profit. "The way was paved, " Stone later wrote, "for investing in various power, lighting, and railroad interests throughout the United States. " In the decade before World War I, the organizational genius of the two partners allowed the company, like the electrical industry itself, to grow rapidly. To distinguish, however, between their respective contributions is impossible. They maintained desks side by side; they even signed correspondence as "Stone & Webster. " Until 1905 they were the only partners and were known as the "firm, " but then Russell Robb, an M. I. T. classmate, was taken in, and others followed, until by 1912 there were seven. Earlier, Stone and Webster together had managed all the company affairs; now department heads assumed increased responsibility for engineering, construction, reporting, managing, and banking. By 1912 Stone & Webster had about 600 officials and employees and occupied an eight-story building. Of the 283 college men in the organization, ninety-four were M. I. T. graduates and fifty were from Harvard. Stone and Webster had begun the executive management of public utilities in October 1895, when they agreed to supervise the Edison Illuminating Company of Brockton, Massachussets, for $250 per month. By 1912 their firm managed thirty-five utilities, primarily electric and railway. For a fee, they provided specialized managerial and engineering consultants, as well as a local manager and treasurer; but the utility's board of directors, legal staff, operating organization, and bank account remained local and independent. This remained the policy until 1925, when the Engineers Public Service Company, organized by Stone & Webster, acquired control of companies the firm had managed. Meanwhile, the need for capital to improve and extend the utilities they managed had led the partners to establish, in 1902, a securities department in their firm which acted as fiscal agent in floating securities for the utility companies under their management. By World War I, Stone & Webster was handling as large a volume of utility securities as passed over the counters of the leading investment bankers. To inform officers, directors, stockholders, and potential stockholders of the financial condition of Stone & Webster-managed public utilities, they also began publication, in 1902, of an annual "black book. " Although the finance and management functions of Stone & Webster grew in importance, engineering did not languish. At first the partners made engineering designs but sublet construction. Gradually, however, they added construction men to their staff, and in 1906 they formed the Engineering Corporation to systematize design and construction and to relate these to management and finance. Clients were not confined to the managed utilities; the Massachusetts Institute of Technology had these two graduates of the Class of 1888 build the monumental neoclassic limestone-faced buildings of its new campus (1913 - 15) on the Charles River esplanade. Other Stone & Webster engineering achievements were notable. The Big Creek transmission system extending 241 miles from Big Creek to Los Angeles, Calif. , with 150, 000-volt lines, was, in 1913, the highest voltage over the longest distance yet attempted. In 1913 the company also completed construction of the Keokuk hydroelectric station at Des Moines Rapids on the Mississippi River, which had the highest capacity - 120, 000 horsepower - of any high-voltage transmission system in the world. The firm arranged the financing of the $25, 000, 000 enterprise, and Stone negotiated the sale of half the power to St. Louis, Mo. , 144 miles distant. World War I in Europe and an industrial boom in the United States brought a slump in electric utilities; according to Webster, the firm "had about as quiet a time as we ever had. " During the war Stone moved his offices to New York City to facilitate discharging his additional responsibility as president of the American International Corporation, formed in 1915 to promote American industry and trade abroad. The move also brought him nearer the Hog Island Shipyard in Philadelphia, a mammoth undertaking constructed in 1917-18 by his firm. The utility business recovered sharply in the 1920's. By 1930 the partners could survey some notable achievements. In about a quarter of a century, their company had completed more than $1, 000, 000, 000 of construction, examined and reported on properties worth over $7, 000, 000, 000, participated in new security issues totaling much more than $1, 000, 000, 000, and built steam and hydroelectric plants developing one-tenth of the nation's central-station power. The firm could justly claim a prominent role in ushering in the age of electricity. Various structural changes had come during the postwar decade. In 1920 the partnership was incorporated in Massachusetts as Stone & Webster, Inc. , with Webster as president and Stone as chairman of the board. Webster became vice-chairman in 1930 and succeeded to the chairmanship after Stone's death in 1941. Subsidiary firms were set up to manage the company's various functions: in 1927, Stone, Webster & Blodget, Inc. (later Stone & Webster Securities Corporation), to handle securities sales; in 1928, Stone & Webster Engineering Corporation, to assume the engineering and construction work; and in 1929 the Stone & Webster Service Corporation, to take over the development and operation of public utility properties. Until 1925 Stone and Webster had not used the holding company as a financing device, despite the precedent of such American superholding companies as Electric Bond & Share Company, headed by Sidney Z. Mitchell. In 1925, however, they helped form, and later controlled, the Engineers Public Service Corporation, which acquired several utilities receiving management services from Stone & Webster. A new corporation, Stone & Webster, Inc. , of Delaware, formed in 1929, became the top holding company in the corporate structure, and in 1930 it acquired 90 percent of Engineers Public Service Corporation, which by 1933 had invested $95, 116, 675 in six major groups of light, power, and street railway companies located in fourteen states. Stone & Webster, Inc. , also controlled the Sierra Pacific Electric Company. In aggregate, the Stone & Webster group consisted of forty-three companies, not including outside companies it managed; the total securities investment of Stone & Webster, Inc. , in 1932 was $66, 601, 913. Two years after the passage of the Public Utility Holding Company Act of 1935, Stone & Webster divested itself of Engineers Public Service Corporation and relinquished controlling interest in public utilities. Despite these changes in organization, Charles Stone and Edwin Webster in their later years saw their company continue to provide services along the lines they had established. Though their offices were separate, they preserved the tradition of desks side by side, two in New York and two in Boston. Both served on the executive committee of M. I. T. for many years and were directors of numerous organizations. Edwin Webster died of a cerebral hemorrhage in Newton, Massachussets, in 1950. Webster was buried in Mount Auburn Cemetery, Cambridge, Massachussets.
Webster had married Jane de Peyster Hovey of Brookline, Massachussets, on June 1, 1893; their children were Frances, Mabel, Edwin Sibley, and Mary Messenger.
