Privateline.com's Telephone History Page 4 --1876 to 1892
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(Soundwaves) (Life at Western Electric)
- IV. The Telephone Evolves
At this point telephone history becomes fragmented and hard
to follow. Four different but related stories begin: (1) the
further history of the telephone instrument and all its parts,
(2) the history of the telephone business, (3) the history of
telephone related technology and (4) the history of the telephone
system. Due to limited space I can cover only some major North
American events. Of these, the two most important developments
were the invention of the vacuum tube and the transistor; today's
telephone system could not have been built without them.
came slowly after the original invention. Bell and Watson worked
constantly on improving the telphone's range. They made their
longest call to date on October 9, 1876. It was a distance of
only two miles, but they were so overjoyed that later that night
they celebrated, doing so much began dancing that their landlady
threatened to throw them out. Watson later recalled "Bell
. . . had a habit of celebrating by what he called a war dance
and I had got so exposed at it that I could do it quite as well
as he could." [Watson] The
rest of 1876, though, was difficult for Bell and his backers.
Bell and Watson improved the telephone and made better models
of it, but these changes weren't enough to turn the telephone
from a curiosity into a needed appliance. Promoting and developing
the telephone proved far harder than Hubbard, Sanders, or Bell
expected. No switchboards existed yet, the telephones were indeed
crude and transmission quality was poor. Many questioned why
anyone needed a telephone. And despite Bell's patent, broadly
covering the entire subject of transmitting speech electrically,
many companies sprang up to sell telephones and telephone service.
In addition, other people filed applications for telephones and
transmitters after Bell's patent was issued. Most claimed Bell's
patent couldn't produce a working telephone or that they had
a prior claim. Litigation loomed. Fearing financial collapse,
Hubbard and Sanders offered in the fall of 1876 to sell their
telephone patent rights to Western Union for $100,000. Western
(Special thanks to William
Farkas of Ontario, Canada for his remarks and corrections)
April 27, 1877 Thomas Edison filed a patent application for an
improved transmitter, a device that made the telephone practical.
A major accomplishment, Edison's patent claim was declared in
interference to a Notice of Invention for a transmitter filed
just two weeks before by Emile Berliner. This conflict was not
resolved until 1886 however, Edison decided to produce the transmitter
while the matter was disputed. Production began toward the end
of 1877. To compete, Bell soon incorporated in their phones an
improved transmitter invented by Francis Blake.
Blake's transmitter relied on the diaphragm modifying an existing
electrical current, an outside power source. This was quite different
than the original invention and its improvements. Bell's first
telephone transmitter used the human voice to generate a weak
electro-magnetic field, which then went to a distant receiver.
Bell later installed larger, better magnets into his telephones
but there was a limit to what power the human voice could provide,
Myer indicating about 10 microwatts.
On July 9, 1877 Sanders, Hubbard, and Bell formed the first
Bell telephone company. Each assigned their rights under four
basic patents to Hubbard's trusteeship. Against tough criticism,
Hubbard decided to lease telephones and license franchises, instead
of selling them. This had enormous consequences. Instead of making
money quickly, dollars would flow in over months, years, and
decades. Products were also affected, as a lease arrangement
meant telephones needed to be of rental quality, with innovations
introduced only when the equipment was virtually trouble free.
It proved a wise enough decision to sustain the Bell System for
over a hundred years.
In September, 1877 Western Union changed its mind about telephony.
They saw it would work and they wanted in, especially after a
subsidiary of theirs, the Gold and Stock Telegraphy Company,
ripped out their telegraphs and started using Bell telephones.
Rather than buying patent rights or licenses from the Bell, Western
Union decided to buy patents from others and start their own
telephone company. They were not alone. At least 1,730 telephone
companies organized and operated in the 17 years Bell was supposed
to have a monopoly.
Most competitors disappeared as soon as the Bell Company filed
suit against them for patent infringement, but many remained.
They either disagreed with Bell's right to the patent, ignored
it altogether, or started a phone company because Bell's people
would not provide service to their area. In any case, Western
Union began entering agreements with Gray, Edison, and Amos E.
Dolbear for their telephone inventions. In December, 1877 Western
Union created the American Speaking Telephone Company. A tremendous
selling point for their telephones was Edison's improved transmitter.
Bell Telephone was deeply worried since they had installed only
3,000 phones by the end of 1877. Western Union, on the other
hand, had 250,000 miles of telegraph wire strung over 100,000
miles of route. If not stopped they would have an enormous head
start on making telephone service available across the country.
Undaunted by the size of Western Union, then the world's largest
telecom company, Bell's Boston lawyers sued them for patent infringement
the next year.
On January, 28 1878 , the first commercial switchboard began
operating in New Haven, Connecticut. It served 21 telephones
on 8 lines consequently, many people were on a party line. On
February 17, Western Union opened the first large city exchange
in San Francisco. No longer limited to people on the same wire,
folks could now talk to many others on different lines. The public
switched telephone network was born. Other innovations marked
On February 21, 1878, the world's
first telephone directory came out, a single paper of only fifty
names. George Williard Coy and a group of investors in the New
Haven District Telephone Company at 219 Chapel Street produced
it. It was followed quickly by the listing produced by the oddly
named Boston Telephone Despatch Company. [First
In 1878 President Rutherford B. Hayes administration installed the first telephone in the White House. [First tele] Mary Finch Hoyt
reports that the first outgoing call went to Alexander Graham
Bell himself, thirteen miles distant. Hayes first words instructed
Bell to speak more slowly. [Hoyt]
In that year the Butterstamp telephone came into use. This
telephone combined the receiver and transmitter into one handheld
unit. You talked into one end, turned the instrument round and
listened to the other end. People got confused with this clumsy
arrangement, consequently, a telephone with a second transmitter
and receiver unit was developed in the same year. You could use
either one to talk or listen and you didn't have to turn them
around. This wall set used a crank to signal the operator.
For another great page
on the earliest commercial telephones go here:
The Butterstamp telephone.
On August 1, 1878 Thomas Watson filed for a ringer patent.
Similar to Henry's classroom doorbell, a hammer operated by an
electromagnet struck two bells. Turning a crank on the calling
telephone spun a magneto, producing an alternating or ringing
current. Previously, people used a crude thumper to signal the
called party, hoping someone would be around to hear it. The
ringer was an immediate success. Bell himself became more optimistic
about the telephone's future, prophetically writing in 1878 "I
believe that in the future, wires will unite the head offices
of the Telephone Company in different cities, and that a man
in one part of the country may communicate by word of mouth with
another in a distant place."
Subscribers, meanwhile, grew steadily but slowly. Sanders
had invested $110,000 by early 1878 without any return. He located
a group of New Englanders willing to invest but unwilling to
do business outside their area. Needing the funding, the Bell
Telephone Company reorganized in June, 1878, forming a new Bell
Telephone Company as well as the New England Telephone Company,
a forerunner of the strong regional Bell companies to come. 10,755
Bell phones were now in service. Reorganizing passed control
to an executive committee, ending Hubbard's stewardship but not
his overall vision. For Hubbard's last act was to hire a far
seeing general manager named Theodore Vail. But the corporate
shuffle wasn't over yet. In early 1879 the company reorganized
once again, under pressure from patent suits and competition
from other companies selling phones with Edison's superior transmitter.
Capitalization was $850,000. William H. Forbes was elected to
head the board of directors. He soon restructured it to embrace
all Bell interests into a single company, the National Bell Company,
incorporated on March 13, 1879. Growth was steady enough, however,
that in late 1879 the first telephone numbers were used.
On November 10, 1879 Bell won its patent infringement suit
against Western Union in the United States Supreme Court. In
the resulting settlement, Western Union gave up its telephone
patents and the 56,000 phones it managed, in return for 20% of
Bell rentals for the 17 year life of Bell's patents. It also
retained its telegraph business as before. This decision so enlarged
National Bell that a new entity with a new name, American Bell
Company, was created on February 20, 1880, capitalized with over
seven million dollars. Bell now managed 133,000 telephones. As
Chief Operating Officer, Theodore Vail began creating the Bell
System, composed of regional companies offering local service,
a long distance company providing toll service, and a manufacturing
arm providing equipment. For the manufacturer he turned to a
previous company rival. In 1880 Vail started buying Western Electric
stock and took controlling interest on November, 1881. The takeover
was consummated on February 26, 1882, with Western Electric giving
up its remaining patent rights as well as agreeing to produce
products exclusively for American Bell. It was not until 1885
that Vail would form his long distance telephone company. It
was called AT&T.
July 19, 1881 Bell was granted a patent for the metallic circuit,
the concept of two wires connecting each telephone. Until that
time a single iron wire connected telephone subscribers, just
like a telegraph circuit. A conversation works over one wire
since grounding each end provides a complete path for an electrical
circuit. But houses, factories and the telegraph system were
all grounding their electrical circuits using the same earth
the telephone company employed. A huge amount of static and noise
was consequently introduced by using a grounded circuit. A metallic
circuit, on the other hand, used two wires to complete the electrical
circuit, avoiding the ground altogether and thus providing a
better sounding call.
The brilliant J.J. Carty introduced two wireservice commercially
in October of that year on a circuit between Boston and Providence.
It cut noise greatly over those forty five miles and heralded
the beginning of long distance service. Still, it was not until
10 years later that Bell started converting grounded circuits
to metallic ones. And ten years after that until completion.
Depending on local conditions and economies, some independent
telephone companies did not introduce two wire for decades after.
Consider this example from the Magazine Telephone Company of
central Arkansas: "After the end of WW II, the R.E.A. System
was introduced to the area. This electrification project induced
noise into the one wire magneto system that was currently in
use by the Telephone Company. Henry [Stone] converted the magneto
system to a new system called common battery. Instead of just
one wire, common battery required two metallic wires for each
- For a short but well
detailed history of an independent telco, visit the Magazine
- http://www.magtel.com/heritage.htm (external
On February 28, 1885 AT&T was born. Capitalized on only
$100,000, American Telephone and Telegraph provided long distance
service for American Bell. Only local telephone companies operating
under Bell granted licenses could connect to AT&T's long
distance network. Vail thought this would continue the Bell System's
virtual monopoly after its key patents expired in the 1890s.
He reasoned the independents could not compete since they would
be isolated and without long distance lines. With licensed companies
providing local service, Western Electric manufacturing equipment
and AT&T providing long distance, Vail's structuring of the
Bell System was now complete.
In September 1887, Vail resigned
from American Bell. They lost a great man. He was at odds with
Bell's Boston bankers and financiers, people who often ignored
an area if profits might be marginal. J. Edward Hyde explained
the situation best:
"The singular worship of profits so disgusted Theodore
Vail that he left the Bell Company in 1887. As a parting shot,
he wrote: 'We have a duty to the public at large to make our
service as good as possible and as universal as possible, and
that earnings should be used not only to reward investors for
their investment but also to accomplish these objectives.' Bell
management thanked him for his comments and wished him a happy
retirement. Those he left behind had neither his visionary business
sense nor his sensible principles of customer service. Ignoring
the protests of customers regarding exorbitant rates and the
pleas of rural areas for service at any price, Bell's leadership
plundered selected profitable areas during the remaining years
of their exclusive ownership without realizing that they were
pinning a target on their own chest in the neglected regions.
Undoubtedly Bell's management suspected that bad times lay just
on the other side of the initial patent expiration. Incredibly,
they did nothing to prevent the deluge. In the cities where the
Bell had its biggest stake, competitors appeared on nearly every
In 1889 the first public coin telephone came into use in Hartford,
Connecticut. The first payphones were attended, with payment
going to someone standing nearby.
In 1892 Bell controlled 240,000 telephones. But the independents
were coming on fast, especially by using better technology. The
first automatic dial system began operating that year in La Porte,
Indiana. The central office switch worked in concert with a similar
switch at the subscriber's home, operated by push buttons. Patented
in 1891 by Almon B. Strowger, this Step by Step or SXS system,
replaced the switchboard operator for placing local calls. People
could dial the number themselves. The first automatic commercial
exchange began operating in La Porte, Indiana in 1892.
Strowger's switch required different kinds of telephones and
eventually models with dials. A.E.
Keith (internal link), J.
Erickson, and C.J. Erickson (internal link) later invented
the rotating finger-wheel needed for a dial. The first dial telephones
began operating in Milwaukee's City Hall in 1896. Independents
were quick to start using the new switch and phones.
The Bell System did not embrace this switch or automation
in general, indeed, a Bell franchise commonly removed "Steppers"
and dial telephones in territories it bought from independent
telephone companies. Not until 1919 did the Bell System start
using Strowgers durable and efficient switching system. This
tardiness contributed to Bell's poor reputation around the turn
of the century. Almon Strowger went on to help form Automatic
Electric, the largest telephone equipment manufacturer for the
independent telephone companies.
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tele] From the official White House web site biography on
President Hayes: http://www.whitehouse.gov/WH/glimpse/presidents/html/rh19.html
(2000) (back to text)
[First directory] Stern and Gwathmey.
Once Upon a Telephone: An Illustrated Social History. New York. Harcourt Brace and Company. 1994, 46
Image of that directory (external link), courtesy of Gwillim Law. (external link) (back to text)
Hyde, J Edward, The Phone Book:
What the telephone company would rather you not know, Henry
Regenry Company, Chicago, 1976, 23. ISBN Number 0-8092-8008-6
(back to text)
[Hoyt] Finch, Mary Hoyt "Hello,
This is the White House." Good Housekeeping, June
1986 (back to text)
Watson, Thomas. Exploring Life:
The Autobiography of Thomas Alva Watson. New York: D. Appleton
and Company. 1926, 95 (back to text)