Bell Telephone Company

“ The telephone was born in America and has reached its highest development in this country. Since 1876, when Alexander Graham Bell first talked successfully over his primitive telephone, a network of voice highways has grown up throughout the nation, linking more than fifty-four million telephones. About four-fifths of these are owned by the Bell System, which is a group of closely associated telephone companies, a research and development organization and a manufacturing and supply company, all headed by the American Telephone and Telegraph Company. ”

“ He was widely known among electricians, invented several important details of the telephone, enjoyed a royalty for many years in the telephone-switch, and was largely interested in the Bell telephone company. ”

“ The only time the Bell Company has had no competitor, Mr. Vail has said, was at the Philadelphia Centennial in 1876. Some of this competition has benefited the public but much of it has accomplished little except to enrich many not over-scrupulous promoters. Groups of farmers who frequently started companies to furnish service at cost did much to extend the use of the telephone. Many of the companies which, when the Bell patents expired in 1895, sprang up in the Middle West, also manifested great enterprise and gave excellent service. ”

“ Western Electric operates 29 distributing houses through which materials flow to the Bell companies. Each house is set up to meet the supplies requirements of the telephone company it serves. It works closely with the telephone organization to deliver the goods promptly and efficiently. Each 28 distributing house maintains a repair shop to recondition service-worn telephone apparatus so that it will give good service again, or, if not economical to repair, to dismantle it for salvage. ”

“ It connected these few telephones in the daytime by wires that were used for a burglar alarm system at night. New Haven, Conn., became the first city in the world to have a commercial 32 telephone exchange. A switchboard connecting eight lines and 21 subscribers went into service there in January, 1878.
Two years later in April, 1880, the American Bell Telephone Company was organized. It greatly developed the telephone organization and business throughout the country. A line from Boston to Providence was built in 1881. Service between Boston and New York, 235 miles, opened in 1884. ”

“ The other telephones are owned and operated by some 5,000 independent telephone companies and about 20,000 rural or farmer lines outside the Bell System but connecting with it.
Bell telephone service is home town service. Linked with thousands of other home town services, it makes a neighborhood of the nation. The company that furnishes your service is part of your community. ”

“ Suppose that at the expiration of this Berliner patent some new invention shall be made by which, in connection with those already free to the public, an instrument can be manufactured far surpassing in utility that used to day, and the Bell Company shall purchase that invention the public, which always insists on having the best and most serviceable, will undoubtedly take the new instrument, and in that way it may happen that what is called the 'telephone monopoly' is practically still further continued. ”

“ Passing by the statement that the patents which the Bell company holds were illegally procured in the first place, through the inventor having had access to the secret records in the Patent Office of other inventions for which a patent had been asked at about the same time as his own, it is an undisputed fact that the Bell company holds the monopoly of communication by electric telephone in this country. ”

“ A great corporation, nerved at every point with telephone wires, may now pay fifty thousand dollars to the Bell Company, while at the same time a young Irish immigrant boy, just arrived in New York City, may offer five coppers and find at his disposal a fifty million dollar telephone system. ”

“ But while he invented the telephone, the apparatus he devised was inefficient for public uses. Berliner invented something by which, taken in connection with Edison's and Blake's inventions, Bell's undulatory current could be made practically available for carrying on conversation at long distances. In other words, the telephone, as we use it, that which has become such an important factor in the commercial and social life of to-day,-does not embody simply the invention of Bell, but also those of Edison, Blake, and Berliner. ”

“ This agreement proved of the greatest benefit to both organizations, and did much to make possible the present development and universal service of both the telephone and telegraph. By the terms of the agreement the Western Union recognized Bell's patent and agreed to withdraw from the telephone business. The Bell company agreed not to engage in the telegraph business and to take over the Western Union telephone system and apparatus, paying a royalty on all telephone rentals. Experience has demonstrated that the two businesses are not competitive, but supplement each other. ”

“ As a telephone user, you want to be able to count on your telephone, to be able to call other telephone users any time, anywhere. You expect reliable service at low cost. The kind of service you expect depends on teamwork—among telephone people in your local company, and among the separate companies that make up the Bell System. ”

“ The first attack upon the young telephone business was made by the Western Union Telegraph Company. It came charging full tilt upon Bell, driving three inventors abreast—Edison, Gray, and Dolbear. It expected an easy victory; in fact, the disparity between the two opponents was so evident, that there seemed little chance of a contest of any kind. "The Western Union will swallow up the telephone people," said public opinion, "just as it has already swallowed up all improvements in telegraphy." ”

“ None had been invented, so it made telegraphic apparatus, burglar-alarms, electric pens, and other such things. But in 1878, when the Western Union made its short-lived attempt to compete with the Bell Company, the Western Electric agreed to make its telephones. Three years later, when the brief spasm of competition was ended, the Western Electric was taken in hand by the Bell people and has since then remained the great workshop of the telephone.
The main plant in Chicago is not especially remarkable from a manufacturing point of view. ”

“ His receiver was an electro-magnet having an iron plate as an armature capable of vibrating under the attractions of the varying current. But Gray allowed his idea to slumber, whereas Bell continued to perfect his apparatus. However, when Bell achieved an unmistakable success, Gray brought a suit against him, which resulted in a compromise, one public company acquiring both patents.
Bell's invention has been contested over and over again, and more than one claimant for the honour and reward of being the original inventor of the telephone have appeared. ”

“ Even so experienced a man in the world's work as a former president of the Western Union Telegraph Company declared, early in 1877, that 'the telephone could never be of any practical use in business affairs'; while men eminently successful in industrial and commercial circles ridiculed the inventor as 'the man who is trying to make the people believe you can talk through a wire,' and scoffed at his invention.
But Graham Bell's faith in the usefulness and the value of his invention and in its power to eliminate distance in many of the affairs of life never failed. ”

“ Thus the parent Bell company never granted to any operating company any right or interest in its patents nor the right to manufacture or sell telephones.
Within a year this method of locally introducing the telephone met with a cordial reception on the part of many with a speculative bent of mind, if not by permanent investors, and thereafter it became a comparatively easy task to interest local capital in local exchanges having a license covering a period of only five or possibly ten years. ”

“ The Western Electric Company not only manufactured apparatus for the licensees of the Bell system but engaged in other large operations and it cannot be merely assumed or conjectured that the net earnings on the entire business represent the net earnings from the sales to the Bell licensees generally or from those to the Illinois Company. ”

“ The bill alleges that Bell, the patentee, knew at the time of filing his application for the patent of March 7, 1876, that he was not the original and first inventor, as the law required he should be, of all the improvements in telegraphy described and claimed in said specification ”

“ The general opinion expressed was that the telephone was a remarkably clever toy, but that it was nothing more. Investors took this view of it, and Bell, who had been reduced to poverty by the expenses of his experiments, went from one financier to another offering stock in the company he had formed, but everywhere he met with rebuffs. Financiers did not care to have anything to do with a machine designed to accomplish the impossible feat of making audible the voice of a person many miles away. ”

“ With the help of fast, economical construction methods and new transmission techniques, the Bell companies are improving and extending telephone service in rural areas. Power-driven augers quickly drill pole holes. Special plows place wire underground and cover it, in one operation. By means of special equipment, both electric power and telephone conversations can travel to farms over the same wires. ”

“ On the same day, when speech was being transmitted by the Bell apparatus at Arlington to the engineers and the French military officers at the Eiffel Tower in Paris, the telephone company’s representative at Pearl Harbor, Hawaii, together with an officer of the United States Navy, heard the words spoken from Arlington to Paris.
By Means of the Universal Bell System the Nation May be Promptly Organized for United Action in Any Great National Movement
It is believed that wireless telephony will form a most important adjunct and extension to the existing schemes of communication. ”

“ The courteous, helpful service rendered by telephone operators has become a traditional part of American life. Even in communities that have dial service, “the voice with a smile” is on the job to handle long distance calls, to provide telephone numbers not included in the directory, and to give any other help that customers may desire.
Ever since World War II, the Bell companies have kept on installing new equipment in great quantities to meet the largest demand ever experienced for new telephone service. ”

“ It had tried to operate a telephone system on telegraphic lines, a plan that has invariably been unsuccessful, it had a low idea of the possibilities of the telephone business; and its already busy agents had little time or knowledge or enthusiasm to give to the new enterprise. With all its power, it found itself outfought by this compact body of picked men, who were young, zealous, well-handled, and protected by a most invulnerable patent.
The Bell Telephone now took its place with the Telegraph, the Railroad, the Steamboat, the Harvester, and the other necessities of a civilized country. ”

“ Besides the direct owners of AT&T, many other people—such as insurance company policy holders and bank customers—help indirectly to finance the business through the AT&T shares held by organizations and trustees. The largest AT&T shareholder is a nation-wide investment firm that holds stock for thousands of customers. Among other institutional holders are some 2,100 churches, 1,100 hospitals and homes, over 1,000 schools and libraries, over 500 foundations and charities. ”

“ From New York to Chicago a talk costs five dollars as against seventy dollars by rail. As Harriman once said, "I can't get from my home to the depot for the price of a talk to Omaha."
To say what the net profits have been, to the entire body of people who have invested money in the telephone, will always be more or less of a guess. The general belief that immense fortunes were made by the lucky holders of Bell stock, is an exaggeration that has been kept alive by the promoters of wildcat companies. ”

“ It is no longer protected by any patent monopoly. Whoever is rich enough and rash enough may enter the field. But it has all the immeasurable advantages that come from long experience, immense bulk, the most highly skilled specialists, and an abundance of capital. "The Bell System is strong," says Vail, "because we are all tied up together; and the success of one is therefore the concern of all."
The Bell System! Here we have the motif of American telephone development. Here is the most comprehensive idea that has entered any telephone engineer's brain. ”

“ Ownership of the operating companies by the headquarters organization came about because of their need to finance expanding service, and as a means of providing the best service at lowest cost. AT&T bought Western Electric in 1882 because it was the best manufacturer of telephone apparatus and because a dependable source of supplies was essential. The Bell Laboratories stemmed from the shop where Alexander Graham Bell made the first telephone. The work of the Laboratories is a continuation, on a much larger scale, of early efforts to discover improvements in the art of telephony. ”