Bell Telephone Company
Encyclopedia
The Bell Telephone Company, a common law
joint stock 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 a sister company — the New England Telephone and Telegraph Company
. The Bell Telephone Company was started on the basis of holding "potentially valuable patents", principally Bell's master telephone patent
#174465.
The two companies merged on February 17, 1879 to form two new entities, the National Bell Telephone Company of Boston, and the International Bell Telephone Company
, soon-after established by Hubbard and which was headquartered in Brussels, Belgium
. Theodore Vail then took over its operations at that point, becoming a central figure in its rapid growth and commercial success.
The National Bell Telephone Company subsequently merged with others on March 20, 1880 to form the American Bell Telephone Company, also of Boston, Massachusetts.
Upon its inception, the Bell Telephone Company was organized with Hubbard as "trustee", although he was additionally its de facto
president since he also controlled his daughter's shares by power of attorney
, and with Thomas Sanders, its principal financial backer, as treasurer. The American Bell Telephone Company would later evolve into the American Telephone & Telegraph Company (AT&T), at times the world's largest telephone company
.
and a partnership
, and was first established verbally in 1874 to be the holders of the patents produced by Bell and his assistant Thomas Watson
.
Approximate one third 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 very first to enter into an agreement with Bell); and finally by Alexander Graham Bell himself. Hubbard would subsequently register some of his shares with two other family members. An approximate 10% interest of the patent association was later assigned by its principles 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 first formalized in a memorandum of agreement on February 27, 1875. The Patent Association's assets would later became the foundational assets of the Bell Telephone Company.
At the time of the organization of the Bell Telephone Company (also known as the Bell Company) as a joint stock company in 1877 by Hubbard, who became its trustee and de facto
president, 5,000 shares in total were issued to:
Two days after the company's formation, on July 11, 1877, Bell married Hubbard's daughter Mabel Gardiner Hubbard
, and made a wedding gift of 1,487 shares of his allotment to his new wife, keeping only 10 shares for himself. Bell and his wife left not long after for a tour of Europe that lasted over a year, during which time Mabel left her shares with her father under a power of attorney
.
Alexander Graham Bell's ten shares of Bell Telephone Company stock were later converted into a single share of the American Bell Telephone Company, and still later into two shares of the American Telephone and Telegraph Company. AT&T President Frederick Fish would subsequently return Bell's single American Bell Telephone Company share to him as a memento after it had been converted and canceled.
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 made Bell's newly invented telephone a featured headline worldwide. Exhibition judges Brazil
ian Emperor Dom Pedro II 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 previously met Bell in Boston much earlier while visiting schools for the deaf in the United States.
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.
Ironically, Bell, who was then a full-time teacher, hadn't even planned on exhibiting at the fair due to 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.
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.
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 $ in current dollars). In only a few years Western Union's president would acknowledge that it was a serious business error, one that almost led to his company later almost being swallowed up by the newly emerging telecommunications giant that Bell Telephone would shortly evolve into. Western Union was saved from demise only by the U.S. Government's anti-monopoly interventions.
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 formally incorporated in New York State as a separate company named American Telephone and Telegraph Company on March 3, 1885. Starting from New York
, its long-distance telephone network reached Chicago, Illinois, in 1892, 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 AT&T Long Lines); this was because Massachusetts
corporate laws were very restrictive, and limited capitalization to ten million dollars, forestalling American Bell's further growth. With this assets transfer on the second to last day of the 19th Century, AT&T became the parent of both American Bell and the Bell System
.
John Elbridge Hudson
joined Bell Telephone as counsel in 1880 and served as president from 1889 to 1900. AT&T would later undergo mergers with SBC Communications and BellSouth
to become the New AT&T.
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
joint stock company
Joint stock company
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company...
, was organized in Boston, Massachusetts on July 9, 1877 by Alexander Graham Bell's
Alexander Graham Bell
Alexander Graham Bell was an eminent scientist, inventor, engineer and innovator who is credited with inventing the first practical telephone....
father-in-law Gardiner Greene Hubbard
Gardiner Greene Hubbard
Gardiner Greene Hubbard was a U.S. lawyer, financier, and philanthropist. He was one of the founders of the Bell Telephone Company and the first president of the National Geographic Society.- Biography :...
, who also helped organize a sister company — the New England Telephone and Telegraph Company
New England Telephone and Telegraph Company
The New England Telephone and Telegraph Company was a very early company set up to develop the then-new telephone.New England Telephone and Telegraph lasted only a year as a separate entity, from 1878 to 1879, and had no direct relationship with the later company of the same name, which after the...
. The Bell Telephone Company was started on the basis of holding "potentially valuable patents", principally Bell's master telephone patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
#174465.
The two companies 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 Telephone Company
The International Bell Telephone Company of Brussels, Belgium, was created in 1879 by the National Bell Telephone Company of Boston, Massachusetts, United States, initially to sell imported telephones and switchboards in Continental Europe....
, soon-after established by Hubbard and which was headquartered in Brussels, Belgium
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
. Theodore Vail then took over its operations at that point, becoming a central figure in its rapid growth and commercial success.
The National Bell Telephone Company subsequently merged with others on March 20, 1880 to form the American Bell Telephone Company, also of Boston, Massachusetts.
Upon its inception, the Bell Telephone Company was organized with Hubbard as "trustee", although he was additionally its de facto
De facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
president since he also controlled his daughter's shares by power of attorney
Power of attorney
A power of attorney or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter...
, and with Thomas Sanders, its principal financial backer, as treasurer. The American Bell Telephone Company would later evolve into the American Telephone & Telegraph Company (AT&T), at times the world's largest telephone company
Telephone company
A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...
.
Predecessor to the Bell Company
The Bell Patent Association (a name later assigned by historians), was technically not a corporate entity but a trusteeshipTrusteeship
Trusteeship may refer to*Trust law *Trusteeship *United Nations Trusteeship...
and a partnership
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
, and was first established verbally in 1874 to be the holders of the patents produced by Bell and his assistant Thomas Watson
Thomas A. Watson
Thomas Augustus Watson was an assistant to Alexander Graham Bell, notably in the invention of the telephone in 1876. He is best known because his name was one of the first words spoken over the telephone. "Mr. Watson - Come here - I want to see you." were the first words Bell said using the new...
.
Approximate one third interests were at first held by Gardiner Greene Hubbard
Gardiner Greene Hubbard
Gardiner Greene Hubbard was a U.S. lawyer, financier, and philanthropist. He was one of the founders of the Bell Telephone Company and the first president of the National Geographic Society.- Biography :...
, 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 very first to enter into an agreement with Bell); and finally by Alexander Graham Bell himself. Hubbard would subsequently register some of his shares with two other family members. An approximate 10% interest of the patent association was later assigned by its principles to Bell's technical assistant Thomas Watson
Thomas A. Watson
Thomas Augustus Watson was an assistant to Alexander Graham Bell, notably in the invention of the telephone in 1876. He is best known because his name was one of the first words spoken over the telephone. "Mr. Watson - Come here - I want to see you." were the first words Bell said using the new...
, 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 first formalized in a memorandum of agreement on February 27, 1875. The Patent Association's assets would later became the foundational assets of the Bell Telephone Company.
Earliest division of Bell Company shares
De facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
president, 5,000 shares in total were issued to:
- Gardiner Greene HubbardGardiner Greene HubbardGardiner Greene Hubbard was a U.S. lawyer, financier, and philanthropist. He was one of the founders of the Bell Telephone Company and the first president of the National Geographic Society.- Biography :...
(trustee and president): 1,397 shares, along with- Gertrude McC. Hubbard, likely Gertrude Mercer McCurdy Hubbard (wife of Gardiner Hubbard): 100 shares
- Charles E. Hubbard (brother of Gardiner Hubbard): 10 shares
- Alexander Graham BellAlexander Graham BellAlexander Graham Bell was an eminent scientist, inventor, engineer and innovator who is credited with inventing the first practical telephone....
(inventor and formally the company's 'Chief Electrician'): 1,497 shares - Thomas Sanders (financier and treasurer): 1,497 shares
- Thomas WatsonThomas A. WatsonThomas Augustus Watson was an assistant to Alexander Graham Bell, notably in the invention of the telephone in 1876. He is best known because his name was one of the first words spoken over the telephone. "Mr. Watson - Come here - I want to see you." were the first words Bell said using the new...
(head of operations): 499 shares
Two days after the company's formation, on July 11, 1877, Bell married Hubbard's daughter Mabel Gardiner Hubbard
Mabel Gardiner Hubbard
Mabel Gardiner Hubbard , was the daughter of Boston lawyer Gardiner Hubbard—the first president of the Bell Telephone Company...
, and made a wedding gift of 1,487 shares of his allotment to his new wife, keeping only 10 shares for himself. Bell and his wife left not long after for a tour of Europe that lasted over a year, during which time Mabel left her shares with her father under a power of attorney
Power of attorney
A power of attorney or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter...
.
Alexander Graham Bell's ten shares of Bell Telephone Company stock were later converted into a single share of the American Bell Telephone Company, and still later into two shares of the American Telephone and Telegraph Company. AT&T President Frederick Fish would subsequently return Bell's single American Bell Telephone Company share to him as a memento after it had been converted and canceled.
Early promotional success
Mabel Gardiner Hubbard
Mabel Gardiner Hubbard , was the daughter of Boston lawyer Gardiner Hubbard—the first president of the Bell Telephone Company...
was the indirect source of the Bell Telephone Company's early commercial success after his creation of the telephone. The U.S. Centennial Exposition
Centennial Exposition
The Centennial International Exhibition of 1876, the first official World's Fair in the United States, was held in Philadelphia, Pennsylvania, from May 10 to November 10, 1876, to celebrate the 100th anniversary of the signing of the Declaration of Independence in Philadelphia. It was officially...
in Philadelphia in 1876 made Bell's newly invented telephone a featured headline worldwide. Exhibition judges Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
ian Emperor Dom Pedro II and the eminent British physicist William Thomson
William Thomson, 1st Baron Kelvin
William Thomson, 1st Baron Kelvin OM, GCVO, PC, PRS, PRSE, was a mathematical physicist and engineer. At the University of Glasgow he did important work in the mathematical analysis of electricity and formulation of the first and second laws of thermodynamics, and did much to unify the emerging...
(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
Visible Speech
Visible speech is the writing system used by Alexander Melville Bell, who was known internationally as a teacher of speech and proper elocution and an author of books on the subject. The system is composed of symbols that show the position and movement of the throat, tongue, and lips as they...
—developed earlier by his equally famous father Alexander Melville Bell
Alexander Melville Bell
Alexander Melville Bell was a teacher and researcher of physiological phonetics and was the author of numerous works on orthoepy and elocution....
.
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 previously met Bell in Boston much earlier while visiting schools for the deaf in the United States.
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.
Ironically, Bell, who was then a full-time teacher, hadn't even planned on exhibiting at the fair due to 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
Lip reading
Lip reading, also known as lipreading or speechreading, is a technique of understanding speech by visually interpreting the movements of the lips, face and tongue with information provided by the context, language, and any residual hearing....
, deaf since age five.
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
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
'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.
Acquisition by AT&T
By 1881 American Bell had acquired a controlling interest in the Western ElectricWestern Electric
Western Electric Company was an American electrical engineering company, the manufacturing arm of AT&T from 1881 to 1995. It was the scene of a number of technological innovations and also some seminal developments in industrial management...
Company from Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
. 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 $ in current dollars). In only a few years Western Union's president would acknowledge that it was a serious business error, one that almost led to his company later almost being swallowed up by the newly emerging telecommunications giant that Bell Telephone would shortly evolve into. Western Union was saved from demise only by the U.S. Government's anti-monopoly interventions.
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 formally incorporated in New York State as a separate company named American Telephone and Telegraph Company on March 3, 1885. Starting from New York
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, its long-distance telephone network reached Chicago, Illinois, in 1892, 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 AT&T Long Lines); this was because Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
corporate laws were very restrictive, and limited capitalization to ten million dollars, forestalling American Bell's further growth. With this assets transfer on the second to last day of the 19th Century, AT&T became the parent of both American Bell and the Bell System
Bell System
The Bell System was the American Bell Telephone Company and then, subsequently, AT&T led system which provided telephone services to much of the United States and Canada from 1877 to 1984, at various times as a monopoly. In 1984, the company was broken up into separate companies, by a U.S...
.
John Elbridge Hudson
John Elbridge Hudson
John Elbridge Hudson was an U.S. lawyer, telephone businessman, and president of AT&T from 1889 to 1900.Hudson was born in Lynn, Massachusetts to John and Elizabeth C. Hudson....
joined Bell Telephone as counsel in 1880 and served as president from 1889 to 1900. AT&T would later undergo mergers with SBC Communications and BellSouth
BellSouth
BellSouth Corporation is an American telecommunications holding company based in Atlanta, Georgia. BellSouth was one of the seven original Regional Bell Operating Companies after the U.S...
to become the New AT&T.
See also
- American Telephone & TelegraphAmerican Telephone & TelegraphAT&T Corp., originally American Telephone and Telegraph Company, is an American telecommunications company that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. AT&T is the oldest telecommunications company...
- Bell, Alexander GrahamAlexander Graham BellAlexander Graham Bell was an eminent scientist, inventor, engineer and innovator who is credited with inventing the first practical telephone....
- The Bell Telephone Company of Canada Ltd., founded in 1880 after its predecessor was sold by Graham Bell's father, Melville BellAlexander Melville BellAlexander Melville Bell was a teacher and researcher of physiological phonetics and was the author of numerous works on orthoepy and elocution....
, to The National Bell Telephone Company. - Bell, Mabel HubbardMabel Gardiner HubbardMabel Gardiner Hubbard , was the daughter of Boston lawyer Gardiner Hubbard—the first president of the Bell Telephone Company...
, wife of Alexander Graham Bell. - Bell SystemBell SystemThe Bell System was the American Bell Telephone Company and then, subsequently, AT&T led system which provided telephone services to much of the United States and Canada from 1877 to 1984, at various times as a monopoly. In 1984, the company was broken up into separate companies, by a U.S...
, a name and trademark formerly used by AT&T. - Hubbard, Gardiner GreeneGardiner Greene HubbardGardiner Greene Hubbard was a U.S. lawyer, financier, and philanthropist. He was one of the founders of the Bell Telephone Company and the first president of the National Geographic Society.- Biography :...
- International Bell Telephone CompanyInternational Bell Telephone CompanyThe International Bell Telephone Company of Brussels, Belgium, was created in 1879 by the National Bell Telephone Company of Boston, Massachusetts, United States, initially to sell imported telephones and switchboards in Continental Europe....
, the Bell Telephone Company's European division. - Regional Bell Operating Companies, which were divested from the Bell System in 1984.
- The Telephone CasesThe Telephone CasesThe Telephone Cases were a series of U.S. court cases in the 1870s and 1880s related to the invention of the telephone, which culminated in the 1888 decision of the United States Supreme Court upholding the priority of the patents belonging to Alexander Graham Bell...
, the numerous court cases contesting the validity of the Bell patents. - Watson, Thomas Augustus, a machinist-fitter and Bell's assistant in creating his earliest telephones.
- Western ElectricWestern ElectricWestern Electric Company was an American electrical engineering company, the manufacturing arm of AT&T from 1881 to 1995. It was the scene of a number of technological innovations and also some seminal developments in industrial management...
, co-founded by Bell's early rival Elisha Gray, acquired by the Bell Company's rival Western Union, and finally acquired by the Bell Telephone Company, it became the Bell Company's key manufacturing arm, enabling its rapid expansion across the continent.
Further reading
- Tossiello, Rosario. "The Birth and Early Years Of The Bell Telephone System, 1876–1880" (dissertation), Boston UniversityBoston UniversityBoston University is a private research university located in Boston, Massachusetts. With more than 4,000 faculty members and more than 31,000 students, Boston University is one of the largest private universities in the United States and one of Boston's largest employers...
, 1971. - Larned, Larry. Birth of The Blue Bell Telephone Signs: The History of the Blue Bell Telephone Sign as implemented by New England Telephone and Telegraph, BellTelephoneSigns.com website, February 26, 2007. Retrieved January 12, 2010.
- Wu, TimTim WuTim Wu is a professor at Columbia Law School, the former chair of media reform group Free Press, and a writer for Slate Magazine. He is also a former Bernard L. Schwartz and Future Tense fellow at The New America Foundation...
, The Master Switch : The Rise and Fall of Information Empires, New York : Alfred A. Knopf, 2010. ISBN 9780307269935