History of the phone
by
the beginning
was not that easy




on Auguste I, I877   the three members of the patent agreement formed the
Bell Telephone Company, a Massachusetts association




the way the stocks were distributed
demonstrates that Alexander Bell was a very creatif person,
not a business man
he preferred his wife Mabel to manage his affairs








The 5,000 shares
of stock were distributed as follows:
Alexander Graham Bell - I0 shares Mabel Bell Hubbard - I497 shares
Gardiner Hubbard - I387 shares Gertrude Hubbard (née Mercer) - I00 shares
Thomas Sanders - I497 shares
Thomas Watson - 499 shares
C. E. Hubbard (Gardiner's brother) I0 shares

Bell's telephone patent

is widely considered
to be the most valuable patent
ever issued

it was followed
by hundreds of legal suits



Thomas Edison
invented electricity
and contributed to
the phone




The enterprise's prospects were poor.
at the time Western Union Telegraph was
the dominant Telegraph company
Shortly after the Bells left on their honey moon for Europe,
Gardiner Hubbard, the father of Alexander's wife Mabel
and also financer of the project
is tired of the 'adventure'
he offered to sell all the Bell patents to William Orton,
president of the giant Western Union Company, for $ I00,000.

Seeing no way that the "electrical toy" could benefit his business,
Orton refused the offer as useless

Rejected, Hubbard set out again to turn Bell's invention into a successful business.
His first and most important decision was to lease the telephone instruments instead of selling them.


Although leasing would enable the Bell interests to protect their patent rights,
it actually increased the enterprise's needs for funds to move the business forward.
When the Bell Telephone Company was formed
only 778 telephones were in use
and the firm desperately needed additional capital.

Hubbard's second strategic decision was to solve that problem by using agents
to develop the business in other regions and in promising local markets.

Thomas Sanders managed to convince a group of men from Massachusetts and Rhode Island
to invest in a firm to develop the telephone in New England.
On February 12, 1878, they formed the New England Telephone Company (this firm has no direct relationship with the present-day New England Telephone and Telegraph Co.) and set about the task of leasing the telephones to customers in the urban Northeast.

Still, the Bell interests were short of funds,
and to bring in new investors and the much needed capital,
they incorporated a reorganized Bell Telephone Company in Massachusetts on June 30, 1878.
The next month, Hubbard persuaded Theodore N. Vail,
then superintendent of the government's Railway Mail Service, to join the new company as general manager.

Along with O. E. Madden (who was recruited from the Domestic Sewing Machine Company and placed in charge of agency operations), Vail brought professional management to the Bell enterprise for the first time.


what are
$ I00 000
in today's values ?


a few year before, I867
the United States bought
Alaska (I 5I8 775 hm²)
from Russia for
$ 7 200 000




the same year
the German Government
pays the Thurn and Taxis
family
3 000 000 Marks
for taking the Post





a view years later
in I889
the impressionist painter
Anna Boch
(aunt of Brigitte)
bought the only
van Gogh painting
sold during the artists life
for 400 Francs




surprise surprise
Western Union Telegraph

soon offered phone service
based on technology developped by Elisha Gray and Thomas Edison ...

Bell System took Western Union to court for
patent infringement

the case was settled in I879 and Western Union
had to sell its telephone activities to Bell.

and Bell could develop the business without competition
until the expiration of the I8 year lasting patent in I894





more coming soon




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