Tesla later approached Morgan to ask for more funds to build a more powerful transmitter. When asked where all the money had gone, Tesla responded by saying that he needed more money because of the Panic of 1901, which he (Morgan) had caused. Morgan was shocked by the reminder of his part in the stock market crash and by Tesla's breach of contract by asking for more funds. Tesla wrote another plea to Morgan, but it was also fruitless. Morgan still owed Tesla money on the original agreement, and Tesla had been facing foreclosure even before construction of the tower began.
In December 1901, Marconi successfully transmitted the letter S from England toNewfoundland, terminating Tesla's relationship with Morgan. Over the next 5 years, Tesla wrote over 50 letters to Morgan pleading for and demanding additional funding to complete the construction of Wardenclyffe. Tesla continued his project for another 9 months. The tower was raised to its full 187 feet. In July 1903, Tesla wrote to Morgan that in addition to wireless communication, Wardenclyffe would be capable of wireless transmission of electric power. On 14 October 1904, Morgan finally replied through his secretary, that "it will be impossible for [me/ Morgan] to do anything in the matter", after Tesla had written to Morgan when the financier was meeting with the Archbishop of Canterbury in an attempt to appeal to his Christian spirit.
In June 1902, Tesla's lab operations were moved to Wardenclyffe from Houston Street.
On his 50th birthday in 1906, Tesla demonstrated his 200 hp (150 kW) 16,000 rpm bladeless turbine. During 1910–1911 at the Waterside Power Station in New York, several of his bladeless turbine engines were tested at 100–5,000 hp.
In 1915, Tesla filed a lawsuit against Marconi attempting, unsuccessfully, to obtain a court injunction against Marconi's claims. After Wardenclyffe, Tesla built theTelefunken Wireless Station in Sayville, Long Island. Some of what he wanted to achieve at Wardenclyffe was accomplished with the Telefunken Wireless. In 1917 the tower was seized and blown up with dynamite for scrap by the Marines, owing to fears that German spies were using it and that it could be used as a landmark for German submarines.
Before World War I (1914–1918), Tesla looked overseas for investors to fund his research. When the war started, Tesla lost the funding he was receiving from his patents in European countries. Tesla made predictions about the relevant issues of a post-World War I environment in a printed article, Science and Discovery are the great Forces which will lead to the Consummation of the War (20 December 1914). Tesla believed that the League of Nations was not a remedy for the times and issues.
Tesla started to exhibit pronounced symptoms of obsessive-compulsive disorder in the years following. He developed a hatred of jewelry and round objects, could not bear to touch hair, did not like to shake hands, and became obsessed with the number three; he often felt compelled to walk around a block three times before entering a building, and, whenever he went dining, demanded 18 napkins (a number divisible by 3) with which to polish his silver, glasses, and plates until they were impeccable. If he read one of an author's books, he had to read all of them. The nature of OCD was little understood at the time and no treatments were available, so that his symptoms were considered by some to be evidence of partial insanity, undoubtedly hurting what was left of his reputation.
At this time, Tesla was staying at the sumptuous The Waldorf-Astoria Hotel, renting in an arrangement for deferred payments. Eventually, the Wardenclyffe deed was turned over to George Boldt, proprietor of the Waldorf-Astoria, to pay a US$20,000 debt (about $400,000 today). In 1917, around the time that the Wardenclyffe Tower was demolished by Boldt to make the land a more viable real estate asset, Tesla received AIEE's highest honor, the Edison Medal.