A distinguished English journalist, who was visiting the United States,
in 1917, on an important governmental mission, had an almost sublime
illustration of the extent to which the telephone had developed on the
North American Continent. Sitting at a desk in a large office building
in New York, Lord Northcliffe took up two telephone receivers and placed
one at each ear. In the first he heard the surf beating at Coney Island,
New York, and in the other he heard, with equal distinctness, the
breakers pounding the beach at the Golden Gate, San Francisco. Certainly
this demonstration justified the statement made a few years before by
another English traveler. "What startles and frightens the backward
European in the United States," said Mr. Arnold Bennett, "is the
efficiency and fearful universality of the telephone. To me it was the
proudest achievement and the most poetical achievement of the American
people."
Lord Northcliffe's experience had a certain dramatic justice which
probably even he did not appreciate. He is the proprietor of the London
Times, a newspaper which, when the telephone was first introduced,
denounced it as the "latest American humbug" and declared that it "was
far inferior to the well-established system of speaking tubes." The
London Times delivered this solemn judgment in 1877. A year before, at
the Philadelphia Centennial Exposition, Don Pedro, Emperor of Brazil,
picked up, almost accidentally, a queer cone-shaped instrument and put
it to his ear, "My God! It talks!" was his exclamation; an incident
which, when widely published in the press, first informed the American
people that another of the greatest inventions of all times had had its
birth on their own soil. Yet the initial judgment of the American people
did not differ essentially from the opinion which had been more coarsely
expressed by the leading English newspaper. Our fathers did not denounce
the telephone as an "American humbug," but they did describe it as a
curious electric "toy" and ridiculed the notion that it could ever have
any practical value. Even after Alexander Graham Bell and his associates
had completely demonstrated its usefulness, the Western Union Telegraph
Company refused to purchase all their patent rights for $100,000! Only
forty years have passed since the telephone made such an inauspicious
beginning. It remains now, as it was then, essentially an American
achievement. Other nations have their telephone systems, but it is
only in the United States that its possibilities have been even faintly
realized. It is not until Americans visit foreign countries that they
understand that, imperfect as in certain directions their industrial
and social organization may be, in this respect at least their nation is
preeminent.
The United States contains nearly all the telephones in existence, to
be exact, about seventy-five per cent. We have about ten million
telephones, while Canada, Central America, South America, Great Britain,
Europe, Asia, and Africa all combined have only about four million. In
order to make an impressive showing, however, we need not include the
backward peoples, for a comparison with the most enlightened nations
emphasizes the same point. Thus New York City has more telephones than
six European countries taken together--Austria-Hungary, Belgium, Norway,
Denmark, Italy, and the Netherlands. Chicago, with a population
of 2,000,000, has more telephones than the whole of France, with a
population of 40,000,000. Philadelphia, with 1,500,000, has more than
the Russian Empire, with 166,000,000. Boston has more telephones than
Austria-Hungary, Los Angeles more than the Netherlands, and Kansas City
more than Belgium. Several office buildings and hotels in New York City
have more instruments than the kingdoms of Greece or Bulgaria. The whole
of Great Britain and Ireland has about 650,000 telephones, which is only
about 200,000 more, than the city of New York.
Mere numbers, however, tell only half the story. It is when we compare
service that American superiority stands most manifest. The London
newspapers are constantly filled with letters abusing the English
telephone system. If these communications describe things accurately,
there is apparently no telephone vexation that the Englishman does not
have to endure. Delays in getting connections are apparently chronic.
At times it seems impossible to get connections at all, especially
from four to five in the afternoon--when the operators are taking tea.
Suburban connections, which in New York take about ninety seconds,
average half an hour in London, and many of the smaller cities have no
night service. An American thinks nothing of putting in a telephone; he
notifies his company and in a few days the instrument is installed. We
take a thing like this for granted. But there are places where a mere
telephone subscription, the privilege of having an instrument installed,
is a property right of considerable value and where the telephone
service has a "waiting list," like an exclusive club. In Japan one can
sell a telephone privilege at a good price, its value being daily quoted
on the Stock Exchange. Americans, by constantly using the telephone,
have developed what may be called a sixth sense, which enables them to
project their personalities over an almost unlimited area. In the
United States the telephone has become the one all-prevailing method of
communication. The European writes or telegraphs while the American
more frequently telephones. In this country the telephone penetrates
to places which even the mails never reach. The rural free delivery and
other forms of the mail service extend to 58,000 communities, while our
10,000,000 telephones encompass 70,000. We use this instrument for all
the varied experiences of life, domestic, social, and commercial. There
are residences in New York City that have private branch exchanges, like
a bank or a newspaper office. Hostesses are more and more falling into
the habit of telephoning invitations for dinner and other diversions.
Many people find telephone conversations more convenient than personal
interviews, and it is every day displacing the stenographer and the
traveling salesman.
Perhaps the most noteworthy achievement of the telephone is its
transformation of country life. In Europe, rural telephones are almost
unknown, while in the United States one-third of all our telephone
stations are in country districts. The farmer no longer depends upon
the mails; like the city man, he telephones. This instrument is thus the
greatest civilizing force we have, for civilization is very largely a
matter of intercommunication. Indeed, the telephone and other similar
agencies, such as the parcel post, the rural free delivery, better
roads, and the automobile, are rapidly transforming rural life in this
country. In several regions, especially in the Mississippi Valley, a
farmer who has no telephone is in a class by himself, like one who
has no mowing-machine. Thus the latest returns from Iowa, taken by the
census as far back as 1907, showed that seventy-three per cent of all
the farms--160,000 out of 220,000--had telephones and the proportion is
unquestionably greater now. Every other farmhouse from the Atlantic to
the Pacific contains at least one instrument. These statistics clearly
show that the telephone has removed half the terrors and isolation of
rural life. Many a lonely farmer's wife or daughter, on the approach of
a suspicious-looking character, has rushed to the telephone and called
up the neighbors, so that now tramps notoriously avoid houses that
shelter the protecting wires. In remote sections, insanity, especially
among women, is frequently the result of loneliness, a calamity which
the telephone is doing much to mitigate.
In the United States today there is one telephone to every nine persons.
This achievement represents American invention, genius, industrial
organization, and business enterprise at their best. The story of
American business contains many chapters and episodes which Americans
would willingly forget. But the American Telephone and Telegraph Company
represents an industry which has made not a single "swollen fortune,"
whose largest stockholder is the wife of Alexander Graham Bell, the
inventor (a woman who, being totally deaf, has never talked over the
telephone); which has not corrupted legislatures or courts; which has
steadily decreased the prices of its products as business and profits
have increased; which has never issued watered stock or declared
fictitious dividends; and which has always manifested a high sense of
responsibility in its dealings with the public.
Two forces, American science and American business capacity, have
accomplished this result. As a mechanism, this American telephone system
is the product not of one but of many minds. What most strikes
the imagination is the story of Alexander Graham Bell, yet other
names--Carty, Scribner, Pupin--play a large part in the story.
The man who discovered that an electric current had the power
of transmitting sound over a copper wire knew very little about
electricity. Had he known more about this agency and less about
acoustics, Bell once said himself, he would never have invented the
telephone. His father and grandfather had been teachers of the deaf and
dumb and had made important researches in acoustics. Alexander Graham
Bell, born in Edinburgh in March, 1847, and educated there and in
London, followed the ancestral example. This experience gave Bell an
expert knowledge of phonetics that laid the foundation for his life
work. His invention, indeed, is clearly associated with his attempts
to make the deaf and dumb talk. He was driven to America by ill-health,
coming first to Canada, and in 1871 he settled in Boston, where he
accepted a position in Boston University to introduce his system of
teaching deaf-mutes. He opened a school of "Vocal Physiology," and his
success in his chosen field brought him into association with the
people who afterward played an important part in the development of
the telephone. Not a single element of romance was lacking in Bell's
experience; his great invention even involved the love story of his
life. Two influential citizens of Boston, Thomas Sanders and Gardiner G.
Hubbard, had daughters who were deaf and dumb, and both engaged Bell's
services as teacher. Bell lived in Sanders's home for a considerable
period, dividing his time between teaching his little pupil how to talk
and puttering away at a proposed invention which he called a "harmonic
telegraph." Both Sanders and Hubbard had become greatly interested in
this contrivance and backed Bell financially while he worked. It was
Bell's idea that, by a system of tuning different telegraphic receivers
to different pitches, several telegraphic messages could be sent
simultaneously over the same wire. The idea was not original with Bell,
although he supposed that it was and was entirely unaware that, at the
particular moment when he started work, about twenty other inventors
were struggling with the same problem. It was one of these other twenty
experimenters, Elisha Gray, who ultimately perfected this instrument.
Bell's researches have an interest only in that they taught him much
about sound transmission and other kindred subjects and so paved the way
for his great conception. One day Hubbard and Sanders learned that Bell
had abandoned his "harmonic telegraph" and was experimenting with an
entirely new idea. This was the possibility of transmitting the human
voice over an electric wire. While working in Sanders's basement, Bell
had obtained from a doctor a dead man's ear, and it is said that while
he was minutely studying and analyzing this gruesome object, the idea of
the telephone first burst upon his mind. For years Bell had been engaged
in a task that seemed hopeless to most men--that of making deaf-mutes
talk. "If I can make a deaf-mute talk, I can make iron talk," he
declared. "If I could make a current of electricity vary in intensity as
the air varies in density," he said at another time, "I could transmit
sound telegraphically." Many others, of course, had dreamed of inventing
such an instrument. The story of the telephone concerns many men who
preceded Bell, one of whom, Philip Reis, produced, in 1861, a mechanism
that could send a few discordant sounds, though not the human voice,
over an electric wire. Reis seemed to have based his work upon an
article published in "The American Journal of Science" by Dr. C.G. Page,
of Salem, Mass., in 1837, in which he called attention to the sound
given out by an electric magnet when the circuit is opened or closed.
The work of these experimenters involves too many technicalities for
discussion in this place. The important facts are that they all involved
different principles from those worked out by Bell and that none of
them ever attained any practical importance. Reis, in particular, never
grasped the essential principles that ultimately made the telephone a
reality. His work occupies a place in telephone history only because
certain financial interests, many years after his death, brought it
to light in an attempt to discredit Bell's claim to priority as the
inventor. An investigator who seems to have grasped more clearly the
basic idea was the distinguished American inventor Elisha Gray, already
mentioned as the man who had succeeded in perfecting the "harmonic
telegraph." On February 14, 1876, Gray filed a caveat in the United
States Patent Office, setting forth pretty accurately the conception of
the electric telephone. The tragedy in Gray's work consists in the fact
that, two hours before his caveat had been put in, Bell had filed his
application for a patent on the completed instrument.
The champions of Bell and Gray may dispute the question of priority to
their heart's content; the historic fact is that the telephone dates
from a dramatic moment in the year 1876. Sanders and Hubbard, much
annoyed that Bell had abandoned his harmonic telegraph for so visionary
an idea as a long distance talking machine, refused to finance him
further unless he returned to his original quest. Disappointed and
disconsolate, Bell and his assistant, Thomas A. Watson, had started work
on the top floor of the Williams Manufacturing Company's shop in Boston.
And now another chance happening turned Bell back once more to the
telephone. His magnetized telegraph wire stretched from one room
to another located in a remote part of the building. One day Watson
accidentally plucked a piece of clock wire that lay near this telegraph
wire, and Bell, working in another room, heard the twang. A few seconds
later Watson was startled when an excited and somewhat disheveled figure
burst into his room. "What was that?" shouted Bell. What had happened
was clearly manifest; a sound had been sent distinctly over an electric
wire. Bell's harmonic telegraph immediately went into the discard, and
the young inventor--Bell was then only twenty-nine--became a man of one
passionate idea. Yet final success did not come easily; the inventor
worked day and night for forty weeks before he had obtained satisfactory
results. It was on March 10, 1876, that Watson, in a distant room,
picked up the first telephone receiver and heard these words, the first
that had ever passed over a magnetized wire, "Come here, Watson; I want
you." The speaking instrument had become a reality, and the foundation
of the telephone, in all its present development, had been laid.
When the New York and San Francisco line was opened in January, 1915,
Alexander Graham Bell spoke these same words to his old associate,
Thomas Watson, located in San Francisco, both men using the same
instruments that had served so well on that historic occasion forty
years before.
Though Bell's first invention comprehended the great basic idea that
made it a success, the instrument itself bore few external resemblances
to that which has become so commonplace today. If one could transport
himself back to this early period and undergo the torture of using
this primitive telephone, he would appreciate somewhat the labor, the
patience, the inventive skill, and the business organization that have
produced the modern telephone. In the first place you would have no
separate transmitter and receiver. You would talk into a funnel-shaped
contrivance and then place it against your ear to get the returning
message. In order to make yourself heard, you would have to shout like a
Gloucester sea captain at the height of a storm. More than the speakers'
voices would come over the wire. It seemed to have become the playground
of a million devils; moanings, shriekings, mutterings, and noises of
all kinds would constantly interrupt the flow of speech. To call up your
"party" you would not merely lift the receiver as today; you would tap
with a lead pencil, or some other appliance, upon the diaphragm of your
transmitter. There were no separate telephone wires. The talking
at first was done over the telegraph lines. The earliest "centrals"
reminded most persons of madhouses, for the day of the polite,
soft-spoken telephone girl had not arrived. Instead, boys were rushing
around with the ends of wires which they were frantically attempting
to peg into the holes of the primitive switchboard and so establish
"connections." When not knocking down and fighting each other, these
boys were swearing into transmitters at the customers; and it is said
that the incurable profanity of these early "telephone boys" had much to
do with their supersession by girls. In the early days of the telephone,
each instrument had to carry its own battery, usually installed in a
little box under the transmitter. The early telephone wires, even in
the largest cities, were strung on poles, as they are in country and
suburban districts today. In places like New York and Chicago, these
thousands of overhanging wires not only destroyed the attractiveness of
the thoroughfare, but constantly interfered with the fire department and
proved to be public nuisances in other ways. A telephone wire, however,
loses much of its transmitting power when placed under ground, and it
took many years of experimenting before the engineers perfected these
subways. In these early days, of course, the telephone was purely a
local matter. Certain visionary enthusiasts had foreseen the possibility
of a national, long distance system, but a large amount of labor, both
in the laboratory and out, was to be expended before these aspirations
could become realities.
The transformation of this rudimentary means of communication into the
beautiful mechanism which we have today forms a splendid chapter in the
history of American invention. Of all the details in Bell's apparatus
the receiver is almost the only one that remains now what it was forty
years ago. The story of the transmitter in itself would fill a volume.
Edison's success in devising a transmitter which permitted talk in
ordinary conversational tones--an invention that became the property
of the Western Union Telegraph Company, which early embarked in the
telephone business--at one time seemed likely to force the Bell Company
out of business. But Emile Berliner and Francis Blake finally came
to the rescue with an excellent instrument, and the suggestion of an
English clergyman, the Reverend Henry Hummings, that carbon granules be
used on the diaphragm, made possible the present perfect instrument. The
magneto call bell--still used in certain backward districts--for many
years gave fair results for calling purposes, but the automatic switch,
which enables us to get central by merely picking up the receiver, has
made possible our great urban service. It was several years before the
telephone makers developed so essential a thing as a satisfactory wire.
Silver, which gave excellent results, was obviously too costly, and
copper, the other metal which had many desirable qualities, was too
soft. Thomas B. Doolittle solved this problem by inventing a hard-drawn
copper wire. A young man of twenty-two, John J. Carty, suggested a
simple device for exorcising the hundreds of "mysterious noises" that
had made the use of the telephone so agonizing. It was caused, Carty
pointed out, by the circumstance that the telephone, like the telegraph,
used a ground circuit for the return wire; the resultant scrapings and
moanings and howlings were merely the multitudinous voices of mother
earth herself. Mr. Carty began installing the metallic circuit in his
lines that is, he used wire, instead of the ground, to complete the
circuit. As a result of this improvement the telephone was immediately
cleared of these annoying interruptions. Mr. Carty, who is now Chief
Engineer of the American Telephone and Telegraph Company, and the man
who has superintended all its extensions in recent years, is one of
the three or four men who have done most to create the present system.
Another is Charles E. Scribner, who, by his invention of that intricate
device, the multiple switchboard, has converted the telephone exchange
into a smoothly working, orderly place. Scribner's multiple switchboard
dates from about 1890. It was Mr. Scribner also who replaced the
individual system of dry cells with one common battery located at the
central exchange, an improvement which saved the Company 4,000,000 dry
cells a year. Then Barrett discovered a method of twisting fifty pairs
of wires--since grown to 2400 pairs-into a cable, wrapping them in paper
and molding them in lead, and the wires were now taken from poles and
placed in conduits underground.
But perhaps the most romantic figure in telephone history, next to Bell,
is that of a humble Servian immigrant who came to this country as a boy
and obtained his first employment as a rubber in a Turkish bath. Michael
I. Pupin was graduated from Columbia, studied afterward in Germany, and
became absorbed in the new subject of electromechanics. In particular he
became interested in a telephone problem that had bothered the greatest
experts for years. One thing that had prevented the great extension of
the telephone, especially for long distance work, was the size of the
wire. Long distance lines up to 1900 demanded wire about one-eighth
of an inch thick--as thick as a fairsized lead pencil; and, for this
reason, the New York-Chicago line, built in 1893, consumed 870,000
pounds of copper wire of this size. Naturally the enormous expense
stood in the way of any extended development. The same thickness also
interfered with cable extension. Only about a hundred wires could be
squeezed into one cable, against the eighteen hundred now compressed in
the same area. Because of these shortcomings, telephone progress, about
1900, was marking time, awaiting the arrival of a thin wire that would
do the work of a thick one. The importance of the problem is shown by
the fact that one-fourth of all the capital invested in the telephone
has been spent in copper. Professor Pupin, who had been a member of the
faculty of Columbia University since 1888, solved this problem in his
quiet laboratory and, by doing so, won the greatest prize in modern
telephone art. His researches resulted in the famous "Pupin coil" by the
expedient now known as "loading." When the scientists attempt to explain
this invention, they have to use all kinds of mathematical formulas and
curves and, in fact, they usually get to quarreling among themselves
over the points involved. What Professor Pupin has apparently done is
to free the wire from those miscellaneous disturbances known as
"induction." This Pupin invention involved another improvement
unsuspected by the inventor, which shows us the telephone in all its
mystery and beauty and even its sublimity. Soon after the Pupin coil
was introduced, it was discovered that, by crossing the wires of
two circuits at regular intervals, another unexplainable circuit was
induced. Because this third circuit travels apparently without wires,
in some manner which the scientists have not yet discovered, it is
appropriately known as the phantom circuit. The practical result is that
it is now possible to send three telephone messages and eight telegraph
messages over two pairs of wires--all at the same time. Professor
Pupin's invention has resulted in economies that amount to millions of
dollars, and has made possible long distance lines to practically every
part of the United States.
Thus many great inventive minds have produced the physical telephone.
We can point to several men--Bell, Blake, Carty, Scribner, Barrett,
Pupin--and say of each one, "Without his work the present telephone
system could not exist." But business genius, as well as mechanical
genius, explains this achievement. For the first four or five years
of its existence, the new invention had hard sailing. Bell and Thomas
Watson, in order to fortify their finances, were forced to travel around
the country, giving a kind of vaudeville entertainment. Bell made a
speech explaining the new invention, while a cornet player, located in
another part of the town, played solos, the music reaching the audience
through several telephone instruments placed against the walls. Watson,
also located at a distance, varied the program by singing songs via
telephone. These lecture tours not only gave Bell the money which
he sorely needed but advertised the innovation. There followed a few
scattering attempts to introduce the telephone into every-day use and
telephone exchanges were established in New York, Boston, Bridgeport,
and New Haven. But these pioneers had the hostility of the most powerful
corporation of the day--the Western Union Telegraph Company--and they
lacked aggressive leaders.
In 1878, Mr. Gardiner Hubbard, Bell's earliest backer, and now his
father-in-law, became acquainted with a young man who was then serving
in Washington as General Superintendent of the Railway Mail Service.
This young man was Theodore N. Vail. His energy and enterprise so
impressed Hubbard that he immediately asked Vail to become General
Manager of the company which he was then forming to exploit the
telephone. Viewed from the retrospection of forty years this offer
certainly looks like one of the greatest prizes in American business.
What it signified at that time, however, is apparent from the fact that
the office paid a salary of $3500 a year and that for the first ten
years Vail did not succeed in collecting a dollar of this princely
remuneration. Yet it was a happy fortune, not only for the Bell Company
but for the nation, that placed Vail at the head of this struggling
enterprise. There was a certain appropriateness in his selection, even
then. His granduncle, Stephen Vail, had built the engines for the first
steamship to cross the Atlantic. A cousin had worked with Morse while he
was inventing the telegraph. Vail, who was born in Carroll County, Ohio,
in 1845, after spending two years as a medical student, suddenly shifted
his plans and became a telegraph operator. Then he entered the Railway
Mail service; in this service he completely revolutionized the system
and introduced reforms that exist at the present time. A natural bent
had apparently directed Vail's mind towards methods of communication, a
fact that may perhaps explain the youthful enthusiasm with which he took
up the new venture and the vision with which he foresaw and planned its
future. For the chief fact about Vail is that he was a business man
with an imagination. The crazy little machine which he now undertook to
exploit did not interest him as a means of collecting tolls, floating
stock, and paying dividends. He saw in it a new method of spreading
American civilization and of contributing to the happiness and comfort
of millions of people. Indeed Vail had hardly seen the telephone when
a picture portraying the development which we are familiar with
today unfolded before his eyes. That the telephone has had a greater
development in America than elsewhere and that the United States has
avoided all those mistakes of organization that have so greatly hampered
its growth in other lands, is owing to the fact that Vail, when he first
took charge, mapped out the comprehensive policies which have guided his
corporation since.
Vail early adopted the "slogan" which has directed the Bell activities
for forty years--"One System! One Policy! Universal Service." In his
mind a telephone company was not a city affair, or even a state affair;
it was a national affair. His aim has been from the first a universal,
national service, all under one head, and reaching every hamlet, every
business house, factory, and home in the nation. The idea that any man,
anywhere, should be able to take down a receiver and talk to anyone,
anywhere else in the United States, was the conception which guided
Vail's labors from the first. He did not believe that a mass of
unrelated companies could give a satisfactory service; if circumstances
had ever made a national monopoly, that monopoly was certainly the
telephone. Having in view this national, universal, articulating
monopoly, Vail insisted on his second great principle, the
standardization of equipment. Every man's telephone must be precisely
like every other man's, and that must be the best which mechanical skill
and inventive genius could produce. To make this a reality and to secure
perfect supervision and upkeep, it was necessary that telephones should
not be sold but leased. By enforcing these ideas Vail saved the United
States from the chaos which exists in certain other countries, such as
France, where each subscriber purchases his own instrument, making his
selection from about forty different varieties. That certain dangers
were inherent in this universal system Vail understood. Monopoly all
too likely brings in excessive charges, poor service, and inside
speculation; but it was Vail's plan to justify his system by its works.
To this end he established a great engineering department which should
study all imaginable mechanical improvements, with the results which
have been described. He gave the greatest attention to every detail of
the service and particularly insisted on the fairest and most courteous
treatment of the public. The "please" which invariably accompanies the
telephone girl's request for a number--the familiar "number, please"--is
a trifle, but it epitomizes the whole spirit which Vail inspired
throughout his entire organization. Though there are plenty of people
who think that the existing telephone charges are too high, the fact
remains that the rate has steadily declined with the extension of
the business. Vail has also kept his company clear from the financial
scandals that have disgraced so many other great corporations. He has
never received any reward himself except his salary, such fortune as
he possesses being the result of personal business ventures in South
America during the twenty years from 1887 to 1907 that he was not
associated with the Bell interests.
Vail's first achievement was to rescue this invention from the greatest
calamity which would have befallen it. The Western Union Telegraph
Company, which in the early days had looked upon the telephone
as negligible, suddenly awoke one morning to a realization of its
importance. This Corporation had recently introduced its "printing
telegraph," a device that made it possible to communicate without the
intermediary operator. When news reached headquarters that subscribers
were dropping this new contrivance and subscribing to telephones, the
Western Union first understood that a competitor had entered their
field. Promptly organizing the American Speaking Telephone Company, the
Western Union, with all its wealth and prestige, proceeded to destroy
this insolent pigmy. Its methods of attack were unscrupulous and
underhanded, the least discreditable one being the use of its political
influence to prevent communities from giving franchises to the Bell
Company. But this corporation mainly relied for success upon the
wholesale manner in which it infringed the Bell patents. It raked
together all possible claimants to priority, from Philip Reis to Elisha
Gray, in its attempts to discredit Bell as the inventor. The Western
Union had only one legitimate advantage--the Edison transmitter--which
was unquestionably much superior to anything which the Bell Company
then possessed. Many Bell stockholders were discouraged in face of this
fierce opposition and wished to abandon the fight. Not so Vail. The mere
circumstance that the great capitalists of the Western Union had
taken up the telephone gave the public a confidence in its value which
otherwise it would not have had, a fact which Vail skillfully used in
attracting influential financial support. He boldly sued the Western
Union in 1878 for infringement of the Bell patents. The case was a
famous one; the whole history of the telephone was reviewed from the
earliest days, and the evidence as to rival claimants was placed on
record for all time. After about a year, Mr. George Clifford, perhaps
the best patent attorney of the day, who was conducting the case for the
Western Union, quietly informed his clients that they could never
win, for the records showed that Bell was the inventor. He advised the
Western Union to settle the case out of court and his advice was taken.
This great corporation war was concluded by a treaty (November 10, 1879)
in which the Western Union acknowledged that Bell was the inventor,
that his patents were valid, and agreed to retire from the telephone
business. The Bell Company, on its part, agreed to buy the Western Union
Telephone System, to pay the Western Union a royalty of twenty per cent
on all telephone rentals, and not to engage in the telegraph business.
Had this case been decided against the Bell Company it is almost certain
that the telephone would have been smothered in the interest of the
telegraph and its development delayed for many years.
Soon after the settlement of the Western Union suit, the original group
which had created the telephone withdrew from the scene. Bell went back
to teaching deaf-mutes. He has since busied himself with the study of
airplanes and wireless, and has invented an instrument for transmitting
sound by light. The new telephone company offered him $10,000 a year as
chief inventor, but he replied that he could not invent to order. Thomas
Sanders received somewhat less than $1,000,000 and lost most of it
exploiting a Colorado gold mine. Gardiner Hubbard withdrew from business
and devoted the last years of his life to the National Geographic
Society. Thomas Watson, after retiring from the telephone business,
bought a ship-building yard near Boston, which has been successful.
In making this settlement with the Western Union, the Bell interests not
only eliminated a competitor but gained great material advantages.
They took over about 56,000 telephone stations located in 55 cities
and towns. They also soon acquired the Western Electric Manufacturing
Company, which under the control of the Western Union had developed into
an important concern for the manufacture of telephone supplies. Under
the management of the Bell Company this corporation, which now has
extensive factories in Hawthorne, Ill., produces two-thirds of the
world's telephone apparatus. With the Western Electric Vail has realized
the fundamental conception underlying his ideal telephone system--the
standardization of equipment. For the accomplishment of his idea of
a national telephone system, instead of a parochial one, Mr. Vail
organized, in 1881, the American Bell Telephone Company, a corporation
that really represented the federalization of all the telephone
activities of the subsidiary companies. The United States was divided
into several sections, in each of which a separate company was organized
to develop the telephone possibilities of that particular area. In 1899
the American Telephone and Telegraph Company took over the business and
properties of the American Bell Company. The larger corporation built
toll lines, connected these smaller systems with one another, and
thus made it possible for Washington to talk to New York, New York to
Chicago, and ultimately--Boston to San Francisco. An enlightened policy
led the Bell Company frequently to establish exchanges in places where
there was little chance of immediate profit. Under this stimulation the
use of this instrument extended rapidly, yet it is in the last twenty
years that the telephone has grown with accelerated momentum. In 1887
there were 170,000 subscribers in the United States, and in 1900 there
were 610,000; but in 1906 the American Telephone and Telegraph Company
was furnishing its service to 2,550,000 stations, and in 1916 to
10,000,000. Clearly it is only since 1900 that the telephone has become
a commonplace of American existence. Up to 1900 it had grown at the rate
of about 13,000 a year; whereas since 1900 it has grown at the rate of
700,000 a year. The explanation is that charges have been so reduced
that the telephone has been brought within the reach of practically
every business house and every family. Until the year 1900 every
telephone subscriber had to pay $240 a year, and manifestly only
families in affluent circumstances could afford such a luxury. About
that time a new system of charges known as the "message rate" plan was
introduced, according to which the subscriber paid a moderate price for
a stipulated number of calls, and a pro rata charge for all calls in
excess of that number. Probably no single change in any business has had
such an instantaneous effect. The telephone, which had hitherto been an
external symbol of prosperity, suddenly became the possession of almost
every citizen.
Other companies than the Bell interests have participated in this
development. 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. These
companies have made valuable contributions, of which perhaps the
automatic telephone, an instrument which enables a subscriber to call
up his "party" directly, without the mediation of "central," is the most
ingenious. Although due acknowledgment must be made of the honesty and
enterprise with which hundreds of the independents are managed, the fact
remains that they are a great economic waste. Most of them give only a
local service, no company having yet arisen which aims to duplicate the
comprehensive national plans of the greater corporation. As soon as an
independent obtains a foothold, the natural consequence is that every
business house and private household must either be contented with
half service, or double the cost of the telephone by subscribing to two
companies. It is not unlikely that the "independents" have exercised a
wholesome influence upon the Bell Corporation, but, as the principle of
government regulation rather than individual competition has now become
the established method of controlling monopoly, this influence will
possess less virtue in the future. In addition to these independent
enterprises, the telephone has unfortunately furnished an opportunity
for stockjobbing schemes on a considerable scale. The years from 1895 to
1905 witnessed the growth of many bubbles of this kind; one group of men
organized not far from two hundred telephone companies. They would
go into selected communities, promise a superior service at half the
current rates, enlist the cooperation of "leading" business men, sell
the stock largely in the city or town to be benefited, make large
profits in the construction of the lines and the sale of equipment--and
then decamp for pastures new. The multitudinous bankruptcies that
followed in the wake of such exploiters at length brought their
activities to an end.