Logo of the Bell System created by Bell Telephone Company. | |
Company type | Public |
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Industry | Telecommunications |
Founded | July 9, 1877 |
Founders |
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Defunct | 1899 |
Fate | Merged assets with AT&T |
Headquarters |
The Bell Telephone Company was the initial corporate entity from which the Bell System originated to build a continental conglomerate and monopoly in telecommunication services in the United States and Canada.
The company was organized in Boston, Massachusetts, on July 9, 1877, by Alexander Graham Bell's father-in-law Gardiner Greene Hubbard, who also helped organize the New England Telephone and Telegraph Company. A common law joint-stock company, the Bell Telephone Company was started on the basis of holding "potentially valuable patents", principally Bell's master telephone patent #174465.[2] Upon inception, Hubbard was installed as trustee, although he was additionally the company's de facto president, since he also controlled his daughter's shares by power of attorney. Thomas Sanders, its principal financial backer, was treasurer.[3]
Bell Telephone and New England Telephone merged on February 17, 1879, to form two new entities, the National Bell Telephone Company of Boston, and the International Bell Telephone Company. International Bell became headquartered in Brussels, Belgium.[4][5][6] Theodore Vail took over its operations, becoming a central figure in its rapid growth and commercial success.
The National Bell Telephone Company merged with American Speaking Telephone Company on March 20, 1880, to form the American Bell Telephone Company, also of Boston, Massachusetts.[7] The American Bell Telephone Company evolved into the American Telephone and Telegraph Company (AT&T), one of the largest telecommunications companies in the world.
The Bell Patent Association (February 27, 1875 – July 9, 1877, a name later assigned by historians),[8] was not a corporate entity but a trusteeship and a partnership. It was established verbally in 1874 to be the holders of the patents produced by Alexander Graham Bell and his assistant Thomas Watson.
Approximately one-third of these interests were at first held by Gardiner Greene Hubbard, a lawyer and Bell's future father-in-law; Thomas Sanders, the well-to-do leather merchant father of one of Bell's deaf students (and who was the first to enter into an agreement with Bell);[9] and finally by Alexander Graham Bell. Hubbard later registered some of his shares with two other family members. An approximate 10% interest of the patent association was later assigned by its principals to Bell's technical assistant Thomas Watson, in lieu of salary and for his earlier financial support to Bell while they worked together creating their first functional telephones.
The verbal patent association agreement was formalized in a memorandum of agreement on February 27, 1875.[10] The patent association's assets became the foundational assets of the Bell Telephone Company.[11][12]
Alexander Graham Bell's fiancée Mabel Hubbard was the indirect source of the Bell Telephone Company's early commercial success after his creation of the telephone. The U.S. Centennial Exposition in Philadelphia in 1876 brought Bell's newly invented telephone international attention. Exhibition judges Emperor Dom Pedro II of the Empire of Brazil and the eminent British physicist William Thomson (Lord Kelvin) recommended his device to the Committee of Electrical Awards, which voted Bell the gold medal for Electrical Equipment, helping to propel him to international fame. Bell also won a second gold medal for his additional display at the exposition, Visible Speech —developed earlier by his equally famous father Alexander Melville Bell.
Pivotally, late in the evening moments after the main group of tired judges and newspaper reporters had quickly looked over and derided Bell's telephone display, Emperor Dom Pedro, who was straggling, entered the fair's Education Building where Bell's two displays were located. As the main group started moving on to the next exhibit to be reviewed, Dom Pedro came upon the displays and called out to Bell in his booming voice: "What are you doing here?" The emperor had met Bell before in Boston while visiting schools for the deaf in the United States.[18]
"....it was around seven o'clock when the 50-person delegation of judges, scientists, reporters and other officials arrived at the Department of Education. Tired and hungry, they hardly looked at the telephone, made some jokes at Bell's expense, and wanted to leave the exhibition quickly when suddenly, Dom Pedro II, Emperor of Brazil from 1840 to 1889, with his wife Empress Theresa and a bevy of courtiers, entered the room. Dom Pedro recognized Bell and exclaimed "Professor Bell, I am delighted to see you again!" The judges at once forgot their tiredness and wondered who this young inventor was who was a friend of an emperor. Dom Pedro had once visited Bell's class of deaf-mutes at Boston University and initiated the first Brazilian school for deaf-mutes in Rio de Janeiro.".... ....The judges stayed the next three hours with Bell. Bell's telephone became the star of the centennial...."[21]
"On a hot Sunday afternoon, June 25th, Sir William Thompson (later Lord Kelvin) and many other distinguished guests inspected the exhibits. Few paid much attention to Bell, tinkering with his crude instruments. At last the party approached his booth. Among them was Dom Pedro de Alcantara, the Emperor of Brazil. He had met Bell a few weeks previously in Boston and spoke to him as an old friend."[22] "Dom Pedro had met Alec at a school for the deaf in Boston. When the emperor greeted Alec, the judges took note. They wanted to see what the emperor's friend had invented."[23] "The centerpiece of the emperor's trip was the Centennial Exposition in Philadelphia. There, Dom Pedro II sought out a young, relatively obscure teacher at the School of the Deaf named Alexander Graham Bell, with whom he had exchanged letters."[24]
Startled by the emperor's enthusiastic response to Bell's telephone demonstration—during which the emperor exclaimed "My God! It talks!", the crowd of judges and press members became energized and vied to take turns communicating with Bell over his invention.[18][21][22][23][24]
Bell, who was then a full-time teacher, had not planned to exhibit at the fair because of his heavy teaching schedule and preparation for his student's examinations. He went to Philadelphia only at the stern insistence of Mabel Hubbard, his then-fiancée and future wife and who was an expert multilingual lip reader, deaf since age five.[25]
Mabel had understood Bell's reluctance to go to the exhibition and display his works, so she secretly bought his train ticket to Philadelphia, packed his bag, and then took the unknowing Bell to Boston's train station, where she told her shocked fiancé that he was going on a trip. When Bell started arguing, Mabel turned her sight away from him and became literally deaf to his protests.[25][26][27]
Main article: International Bell Telephone Company |
In 1879 Gardiner Hubbard founded the International Bell Telephone Company in order to promote sales of its telephone equipment throughout Europe. During his tour of the continent, the Belgian government offered him the greatest financial incentives to establish his European subsidiary's headquarters in their country.[28]
The International Bell Telephone Company (IBTC) shortly evolved into a holding company for its various telephone service and production divisions, with its major manufacturing arm being the Bell Telephone Manufacturing Company (BTMC), which was founded in Antwerp, Belgium, on 26 April 1882.[4] BTMC was created as a joint venture by the International Bell Telephone Company of New York and the Western Electric Company of Chicago, Illinois.[5] BTMC then established la Compagnie Belge du Téléphone Bell (Bell Telephone Company of Belgium) in the same year as its Belgian operating subsidiary for telephone service, one of several companies that provided such service in the country, the others having evolved principally from telegraph carriers.[29]
BTMC eventually came under complete ownership by Western Electric, and also established other divisions as national companies across Continental Europe and Russia.[29] Western Electric was itself later majority owned by the American Bell Telephone Company, returning indirect control of BTMC back to the Bell organization.
At the close of 1899, the American Bell Telephone Company was acquired, for business purposes, by its own subsidiary, the American Telephone & Telegraph Company (AT&T), which then became the head of the monolithic and monopolistic Bell System.
Significant criticism of AT&T (a monopoly) had emerged in the United States that domestic telephone system rates were higher than they needed to be, and that AT&T was using those revenues to subsidize its European operations. Due to that reason and others, and also due to the U.S. Government's regulatory intervention, AT&T president Walter Gifford divested almost all of its international interests in 1925, with the exceptions of the Bell Telephone Company of Canada (now called Bell Canada), and Northern Electric (now called Nortel).
In 1925, the European division and its subsidiaries were sold to the International Telephone & Telegraph Company (IT&T, unaffiliated with AT&T) of Cuba, at the start of that company's meteoric rise in the international telecommunications industry.[30]
Main articles: American Telephone & Telegraph and Bell System |
By 1881, American Bell had acquired a controlling interest in the Western Electric Company from Western Union. Only three years earlier, Western Union had turned down Gardiner Hubbard's offer to sell it all rights to the telephone for US$100,000 (approximately $3.16 million in current dollars[31]). In only a few years, Western Union's president would acknowledge that it was a serious business error, one that later nearly led to his company being swallowed up by the newly emerging telecommunications giant into which Bell Telephone would shortly evolve. Western Union was saved from demise only by the U.S. Government's anti-monopoly interventions.[32]
A year earlier in 1880 the management of American Bell had created what would become AT&T Long Lines. The project was the first of its kind to create a nationwide long-distance network with a commercially viable cost-structure. The project was incorporated in New York State as a separate company named American Telephone and Telegraph Company on March 3, 1885. Starting from New York City, its long-distance telephone network reached Chicago, Illinois, in 1892,[32] with its multitudes of local exchanges continuing to stretch further and further yearly, eventually creating a continent-wide telephone system.
On December 30, 1899, the assets of American Bell were transferred into its subsidiary American Telephone and Telegraph Company (formerly only the long lines company); this was because Massachusetts corporate laws were very restrictive, and limited capitalization to $10 million, forestalling American Bell's further growth. With this assets transfer on December 30, 1899, AT&T became the parent of both American Bell and the Bell System.[33]
John Elbridge Hudson joined Bell Telephone as counsel in 1880 and served as president from 1889 to 1900.
Main articles: Bell Telephone Memorial and Bell Homestead National Historic Site |
In 1906 the citizens of the City of Brantford, Ontario, Canada and its surrounding area formed the Bell Memorial Association to commemorate the invention of the telephone by Alexander Graham Bell in July 1874 at his parents' home, Melville House, near Brantford.[34][35] Walter Allward's design was the unanimous choice from among 10 submitted models, winning the competition. The memorial was planned to be completed by 1912 but Allward did not finish it until five years later. The Governor General of Canada, Victor Cavendish, 9th Duke of Devonshire, ceremoniously unveiled the memorial on 24 October 1917.[34][35]
Allward designed the monument to symbolize the telephone's ability to overcome distances.[35] A series of steps lead to the main section where the allegorical figures of Inspiration appears over a reclining male figure representing Man, the inventor, and also pointing to the floating figures of Knowledge, Joy, and Sorrow, positioned at the other end of the tableau. At each end of the memorial there are two female figures mounted on granite pedestals representing Humanity, one sending and the other receiving a message.[34]
The Bell Telephone Memorial's grandeur has been described as the finest example of Allward's early work, propelling the sculptor to fame. The memorial itself has been used as a central fixture for many civic events and remains an important part of Brantford's history, helping the city of Brantford to style itself as 'The Telephone City'.
The Bell Memorial Association also purchased the Bell family's former farmhouse, Melville House, and its orchard at Tutela Heights, opening it as a museum to the family and to the invention of the telephone. In 1996, it was declared a historic landmark, and is now known as the Bell Homestead National Historic Site.[36][37]