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CHAPTER¡¡III

THE¡¡HOLDING¡¡OF¡¡THE¡¡BUSINESS

For¡¡seventeen¡¡months¡¡no¡¡one¡¡disputed¡¡Bell's¡¡claim¡¡to¡¡be¡¡the¡¡original¡¡inventor¡¡of¡¡the¡¡telephone¡£¡¡All¡¡the¡¡honor£»¡¡such¡¡as¡¡it¡¡was£»¡¡had¡¡been¡¡given¡¡to¡¡him¡¡freely£»¡¡and¡¡no¡¡one¡¡came¡¡forward¡¡to¡¡say¡¡that¡¡it¡¡was¡¡not¡¡rightfully¡¡his¡£¡¡No¡¡one£»¡¡so¡¡far¡¡as¡¡we¡¡know£»¡¡had¡¡any¡¡strong¡¡desire¡¡to¡¡do¡¡so¡£¡¡No¡¡one¡¡conceived¡¡that¡¡the¡¡telephone¡¡would¡¡ever¡¡be¡¡any¡¡more¡¡than¡¡a¡¡whimsical¡¡oddity¡¡of¡¡science¡£¡¡It¡¡was¡¡so¡¡new£»¡¡so¡¡unexpected£»¡¡that¡¡from¡¡Lord¡¡Kelvin¡¡down¡¡to¡¡the¡¡messenger¡¡boys¡¡in¡¡the¡¡telegraph¡¡offices£»¡¡it¡¡was¡¡an¡¡incomprehensible¡¡surprise¡£¡¡But¡¡after¡¡Bell¡¡had¡¡explained¡¡his¡¡invention¡¡in¡¡public¡¡lectures¡¡before¡¡more¡¡than¡¡twenty¡¡thousand¡¡people£»¡¡after¡¡it¡¡had¡¡been¡¡on¡¡exhibition¡¡for¡¡months¡¡at¡¡the¡¡Philadelphia¡¡Centennial£»¡¡after¡¡several¡¡hundred¡¡articles¡¡on¡¡it¡¡had¡¡appeared¡¡in¡¡newspapers¡¡and¡¡scientific¡¡magazines£»¡¡and¡¡after¡¡actual¡¡sales¡¡of¡¡telephones¡¡had¡¡been¡¡made¡¡in¡¡various¡¡parts¡¡of¡¡the¡¡country£»¡¡there¡¡began¡¡to¡¡appear¡¡such¡¡a¡¡succession¡¡of¡¡claimants¡¡and¡¡infringers¡¡that¡¡the¡¡forgetful¡¡public¡¡came¡¡to¡¡believe¡¡that¡¡the¡¡telephone£»¡¡like¡¡most¡¡inventions£»¡¡was¡¡the¡¡product¡¡of¡¡many¡¡minds¡£

Just¡¡as¡¡Morse£»¡¡who¡¡was¡¡the¡¡sole¡¡inventor¡¡of¡¡the¡¡American¡¡telegraph¡¡in¡¡1837£»¡¡was¡¡confronted¡¡by¡¡sixty¡­two¡¡rivals¡¡in¡¡1838£»¡¡so¡¡Bell£»¡¡who¡¡was¡¡the¡¡sole¡¡inventor¡¡in¡¡1876£»¡¡found¡¡himself¡¡two¡¡years¡¡later¡¡almost¡¡mobbed¡¡by¡¡the¡¡¡¨Tichborne¡¡claimants¡¨¡¡of¡¡the¡¡telephone¡£¡¡The¡¡inventors¡¡who¡¡had¡¡been¡¡his¡¡competitors¡¡in¡¡the¡¡attempt¡¡to¡¡produce¡¡a¡¡musical¡¡telegraph£»¡¡persuaded¡¡themselves¡¡that¡¡they¡¡had¡¡unconsciously¡¡done¡¡as¡¡much¡¡as¡¡he¡£¡¡Any¡¡possessor¡¡of¡¡a¡¡telegraphic¡¡patent£»¡¡who¡¡had¡¡used¡¡the¡¡common¡¡phrase¡¡¡¨talking¡¡wire£»¡¨¡¡had¡¡a¡¡chance¡¡to¡¡build¡¡up¡¡a¡¡plausible¡¡story¡¡of¡¡prior¡¡invention¡£¡¡And¡¡others¡¡came¡¡forward¡¡with¡¡claims¡¡so¡¡vague¡¡and¡¡elusive¡¡that¡¡Bell¡¡would¡¡scarcely¡¡have¡¡been¡¡more¡¡surprised¡¡if¡¡the¡¡heirs¡¡of¡¡Goethe¡¡had¡¡demanded¡¡a¡¡share¡¡of¡¡the¡¡telephone¡¡royalties¡¡on¡¡the¡¡ground¡¡that¡¡Faust¡¡had¡¡spoken¡¡of¡¡¡¨making¡¡a¡¡bridge¡¡through¡¡the¡¡moving¡¡air¡£¡¨

This¡¡babel¡¡of¡¡inventors¡¡and¡¡pretenders¡¡amazed¡¡Bell¡¡and¡¡disconcerted¡¡his¡¡backers¡£¡¡But¡¡it¡¡was¡¡no¡¡more¡¡than¡¡might¡¡have¡¡been¡¡expected¡£¡¡Here¡¡was¡¡a¡¡patent¡¨the¡¡most¡¡valuable¡¡single¡¡patent¡¡ever¡¡issued¡¨and¡¡yet¡¡the¡¡invention¡¡itself¡¡was¡¡so¡¡simple¡¡that¡¡it¡¡could¡¡be¡¡duplicated¡¡easily¡¡by¡¡any¡¡smart¡¡boy¡¡or¡¡any¡¡ordinary¡¡mechanic¡£¡¡The¡¡making¡¡of¡¡a¡¡telephone¡¡was¡¡like¡¡the¡¡trick¡¡of¡¡Columbus¡¡standing¡¡an¡¡egg¡¡on¡¡end¡£¡¡Nothing¡¡was¡¡easier¡¡to¡¡those¡¡who¡¡knew¡¡how¡£¡¡And¡¡so¡¡it¡¡happened¡¡that£»¡¡as¡¡the¡¡crude¡¡little¡¡model¡¡of¡¡Bell's¡¡original¡¡telephone¡¡lay¡¡in¡¡the¡¡Patent¡¡Office¡¡open¡¡and¡¡unprotected¡¡except¡¡by¡¡a¡¡few¡¡phrases¡¡that¡¡clever¡¡lawyers¡¡might¡¡evade£»¡¡there¡¡sprang¡¡up¡¡inevitably¡¡around¡¡it¡¡the¡¡most¡¡costly¡¡and¡¡persistent¡¡Patent¡¡War¡¡that¡¡any¡¡country¡¡has¡¡ever¡¡known£»¡¡continuing¡¡for¡¡eleven¡¡years¡¡and¡¡comprising¡¡SIX¡¡HUNDRED¡¡LAWSUITS¡£

The¡¡first¡¡attack¡¡upon¡¡the¡¡young¡¡telephone¡¡business¡¡was¡¡made¡¡by¡¡the¡¡Western¡¡Union¡¡Telegraph¡¡Company¡£¡¡It¡¡came¡¡charging¡¡full¡¡tilt¡¡upon¡¡Bell£»¡¡driving¡¡three¡¡inventors¡¡abreastEdison£»¡¡Gray£»¡¡and¡¡Dolbear¡£¡¡It¡¡expected¡¡an¡¡easy¡¡victory£»¡¡in¡¡fact£»¡¡the¡¡disparity¡¡between¡¡the¡¡two¡¡opponents¡¡was¡¡so¡¡evident£»¡¡that¡¡there¡¡seemed¡¡little¡¡chance¡¡of¡¡a¡¡contest¡¡of¡¡any¡¡kind¡£¡¡¡¨The¡¡Western¡¡Union¡¡will¡¡swallow¡¡up¡¡the¡¡telephone¡¡people£»¡¨¡¡said¡¡public¡¡opinion£»¡¡¡¨just¡¡as¡¡it¡¡has¡¡already¡¡swallowed¡¡up¡¡all¡¡improvements¡¡in¡¡telegraphy¡£¡¨

At¡¡that¡¡time£»¡¡it¡¡should¡¡be¡¡remembered£»¡¡the¡¡Western¡¡Union¡¡was¡¡the¡¡only¡¡corporation¡¡that¡¡was¡¡national¡¡in¡¡its¡¡extent¡£¡¡It¡¡was¡¡the¡¡most¡¡powerful¡¡electrical¡¡company¡¡in¡¡the¡¡world£»¡¡and£»¡¡as¡¡Bell¡¡wrote¡¡to¡¡his¡¡parents£»¡¡¡¨probably¡¡the¡¡largest¡¡corporation¡¡that¡¡ever¡¡existed¡£¡¨¡¡It¡¡had¡¡behind¡¡it¡¡not¡¡only¡¡forty¡¡millions¡¡of¡¡capital£»¡¡but¡¡the¡¡prestige¡¡of¡¡the¡¡Vanderbilts£»¡¡and¡¡the¡¡favor¡¡of¡¡financiers¡¡everywhere¡£¡¡Also£»¡¡it¡¡met¡¡the¡¡telephone¡¡pioneers¡¡at¡¡every¡¡point¡¡because¡¡it£»¡¡too£»¡¡was¡¡a¡¡WIRE¡¡company¡£¡¡It¡¡owned¡¡rights¡­of¡­way¡¡along¡¡roads¡¡and¡¡on¡¡house¡­tops¡£¡¡It¡¡had¡¡a¡¡monopoly¡¡of¡¡hotels¡¡and¡¡railroad¡¡offices¡£¡¡No¡¡matter¡¡in¡¡what¡¡direction¡¡the¡¡Bell¡¡Company¡¡turned£»¡¡the¡¡live¡¡wire¡¡of¡¡the¡¡Western¡¡Union¡¡lay¡¡across¡¡its¡¡path¡£

From¡¡the¡¡first£»¡¡the¡¡Western¡¡Union¡¡relied¡¡more¡¡upon¡¡its¡¡strength¡¡than¡¡upon¡¡the¡¡merits¡¡of¡¡its¡¡case¡£¡¡Its¡¡chief¡¡electrical¡¡expert£»¡¡Frank¡¡L¡£¡¡Pope£»¡¡had¡¡made¡¡a¡¡six¡¡months'¡¡examination¡¡of¡¡the¡¡Bell¡¡patents¡£¡¡He¡¡had¡¡bought¡¡every¡¡book¡¡in¡¡the¡¡United¡¡States¡¡and¡¡Europe¡¡that¡¡was¡¡likely¡¡to¡¡have¡¡any¡¡reference¡¡to¡¡the¡¡transmission¡¡of¡¡speech£»¡¡and¡¡employed¡¡a¡¡professor¡¡who¡¡knew¡¡eight¡¡languages¡¡to¡¡translate¡¡them¡£¡¡He¡¡and¡¡his¡¡men¡¡ransacked¡¡libraries¡¡and¡¡patent¡¡offices£»¡¡they¡¡rummaged¡¡and¡¡sleuthed¡¡and¡¡interviewed£»¡¡and¡¡found¡¡nothing¡¡of¡¡any¡¡value¡£¡¡In¡¡his¡¡final¡¡report¡¡to¡¡the¡¡Western¡¡Union£»¡¡Mr¡£¡¡Pope¡¡announced¡¡that¡¡there¡¡was¡¡no¡¡way¡¡to¡¡make¡¡a¡¡telephone¡¡except¡¡Bell's¡¡way£»¡¡and¡¡advised¡¡the¡¡purchase¡¡of¡¡the¡¡Bell¡¡patents¡£¡¡¡¨I¡¡am¡¡entirely¡¡unable¡¡to¡¡discover¡¡any¡¡apparatus¡¡or¡¡method¡¡anticipating¡¡the¡¡invention¡¡of¡¡Bell¡¡as¡¡a¡¡whole£»¡¨¡¡he¡¡said£»¡¡¡¨and¡¡I¡¡conclude¡¡that¡¡his¡¡patent¡¡is¡¡valid¡£¡¨¡¡But¡¡the¡¡officials¡¡of¡¡the¡¡great¡¡corporation¡¡refused¡¡to¡¡take¡¡this¡¡report¡¡seriously¡£¡¡They¡¡threw¡¡it¡¡aside¡¡and¡¡employed¡¡Edison£»¡¡Gray£»¡¡and¡¡Dolbear¡¡to¡¡devise¡¡a¡¡telephone¡¡that¡¡could¡¡be¡¡put¡¡into¡¡competition¡¡with¡¡Bell's¡£

As¡¡we¡¡have¡¡seen¡¡in¡¡the¡¡previous¡¡chapter£»¡¡there¡¡now¡¡came¡¡a¡¡period¡¡of¡¡violent¡¡competition¡¡which¡¡is¡¡remembered¡¡as¡¡the¡¡Dark¡¡Ages¡¡of¡¡the¡¡telephone¡¡business¡£¡¡The¡¡Western¡¡Union¡¡bought¡¡out¡¡several¡¡of¡¡the¡¡Bell¡¡exchanges¡¡and¡¡opened¡¡up¡¡a¡¡lively¡¡war¡¡on¡¡the¡¡others¡£¡¡As¡¡befitting¡¡its¡¡size£»¡¡it¡¡claimed¡¡everything¡£¡¡It¡¡introduced¡¡Gray¡¡as¡¡the¡¡original¡¡inventor¡¡of¡¡the¡¡telephone£»¡¡and¡¡ordered¡¡its¡¡lawyers¡¡to¡¡take¡¡action¡¡at¡¡once¡¡against¡¡the¡¡Bell¡¡Company¡¡for¡¡infringement¡¡of¡¡the¡¡Gray¡¡patent¡£¡¡This¡¡high¡­handed¡¡action£»¡¡it¡¡hoped£»¡¡would¡¡most¡¡quickly¡¡bring¡¡the¡¡little¡¡Bell¡¡group¡¡into¡¡a¡¡humble¡¡and¡¡submissive¡¡frame¡¡of¡¡mind¡£¡¡Every¡¡morning¡¡the¡¡Western¡¡Union¡¡looked¡¡to¡¡see¡¡the¡¡white¡¡flag¡¡flying¡¡over¡¡the¡¡Bell¡¡headquarters¡£¡¡But¡¡no¡¡white¡¡flag¡¡appeared¡£¡¡On¡¡the¡¡contrary£»¡¡the¡¡news¡¡came¡¡that¡¡the¡¡Bell¡¡Company¡¡had¡¡secured¡¡two¡¡eminent¡¡lawyers¡¡and¡¡were¡¡ready¡¡to¡¡give¡¡battle¡£

The¡¡case¡¡began¡¡in¡¡the¡¡Autumn¡¡of¡¡1878¡¡and¡¡lasted¡¡for¡¡a¡¡year¡£¡¡Then¡¡it¡¡came¡¡to¡¡a¡¡sudden¡¡and¡¡most¡¡unexpected¡¡ending¡£¡¡The¡¡lawyer¡­in¡­chief¡¡of¡¡the¡¡Western¡¡Union¡¡was¡¡George¡¡Gifford£»¡¡who¡¡was¡¡perhaps¡¡the¡¡ablest¡¡patent¡¡attorney¡¡of¡¡his¡¡day¡£¡¡He¡¡was¡¡versed¡¡in¡¡patent¡¡lore¡¡from¡¡Alpha¡¡to¡¡Omega£»¡¡and¡¡as¡¡the¡¡trial¡¡proceeded£»¡¡he¡¡became¡¡convinced¡¡that¡¡the¡¡Bell¡¡patent¡¡was¡¡valid¡£¡¡He¡¡notified¡¡the¡¡Western¡¡Union¡¡confidentially£»¡¡of¡¡course£»¡¡that¡¡its¡¡case¡¡could¡¡not¡¡be¡¡proven£»¡¡and¡¡that¡¡¡¨Bell¡¡was¡¡the¡¡original¡¡inventor¡¡of¡¡the¡¡telephone¡£¡¨¡¡The¡¡best¡¡policy£»¡¡he¡¡suggested£»¡¡was¡¡to¡¡withdraw¡¡their¡¡claims¡¡and¡¡make¡¡a¡¡settlement¡£¡¡This¡¡wise¡¡advice¡¡was¡¡accepted£»¡¡and¡¡the¡¡next¡¡day¡¡the¡¡white¡¡flag¡¡was¡¡hauled¡¡up£»¡¡not¡¡by¡¡the¡¡little¡¡group¡¡of¡¡Bell¡¡fighters£»¡¡who¡¡were¡¡huddled¡¡together¡¡in¡¡a¡¡tiny£»¡¡two¡­room¡¡office£»¡¡but¡¡by¡¡the¡¡mighty¡¡Western¡¡Union¡¡itself£»¡¡which¡¡had¡¡been¡¡so¡¡arrogant¡¡when¡¡the¡¡encounter¡¡began¡£

A¡¡committee¡¡of¡¡three¡¡from¡¡each¡¡side¡¡was¡¡appointed£»¡¡and¡¡after¡¡months¡¡of¡¡disputation£»¡¡a¡¡treaty¡¡of¡¡peace¡¡was¡¡drawn¡¡up¡¡and¡¡signed¡£¡¡By¡¡the¡¡terms¡¡of¡¡this¡¡treaty¡¡the¡¡Western¡¡Union¡¡agreed

£¨1£©¡¡To¡¡admit¡¡that¡¡Bell¡¡was¡¡the¡¡original¡¡inventor¡£

£¨2£©¡¡To¡¡admit¡¡that¡¡his¡¡patents¡¡were¡¡valid¡£

£¨3£©¡¡To¡¡retire¡¡from¡¡the¡¡telephone¡¡business¡£


The¡¡Bell¡¡Company£»¡¡in¡¡return¡¡for¡¡this¡¡surrender£»¡¡agreed

£¨1£©¡¡To¡¡buy¡¡the¡¡Western¡¡Union¡¡telephone¡¡system¡£

£¨2£©¡¡To¡¡pay¡¡the¡¡Western¡¡Union¡¡a¡¡royalty¡¡of¡¡twenty¡¡per¡¡cent¡¡on¡¡all¡¡telephone¡¡rentals¡£

£¨3£©¡¡To¡¡keep¡¡out¡¡of¡¡the¡¡telegraph¡¡business¡£


This¡¡agreement£»¡¡which¡¡was¡¡to¡¡remain¡¡in¡¡force¡¡for¡¡seventeen¡¡years£»¡¡was¡¡a¡¡master¡­stroke¡¡of¡¡diplomacy¡¡on¡¡the¡¡part¡¡of¡¡the¡¡Bell¡¡Company¡£¡¡It¡¡was¡¡the¡¡Magna¡¡Charta¡¡of¡¡the¡¡telephone¡£¡¡It¡¡transformed¡¡a¡¡giant¡¡competitor¡¡into¡¡a¡¡friend¡£¡¡It¡¡added¡¡to¡¡the¡¡Bell¡¡System¡¡fifty¡­six¡¡thousand¡¡telephones¡¡in¡¡fifty¡­five¡¡cities¡£¡¡And¡¡it¡¡swung¡¡the¡¡valiant¡¡little¡¡company¡¡up¡¡to¡¡such¡¡a¡¡pinnacle¡¡of¡¡prosperity¡¡that¡¡its¡¡stock¡¡went¡¡skyrocketing¡¡until¡¡it¡¡touched¡¡one¡¡thousand¡¡dollars¡¡a¡¡share¡£

The¡¡Western¡¡Union¡¡had¡¡lost¡¡its¡¡case£»¡¡for¡¡several¡¡very¡¡simple¡¡reasons£º¡¡It¡¡had¡¡tried¡¡to¡¡operate¡¡a¡¡telephone¡¡system¡¡on¡¡telegraphic¡¡lines£»¡¡a¡¡plan¡¡that¡¡has¡¡invariably¡¡been¡¡unsuccessful£»¡¡it¡¡had¡¡a¡¡low¡¡idea¡¡of¡¡the¡¡possibilities¡¡of¡¡the¡¡telephone¡¡business£»¡¡and¡¡its¡¡already¡¡busy¡¡agents¡¡had¡¡little¡¡time¡¡or¡¡knowledge¡¡or¡¡enthusiasm¡¡to¡¡give¡¡to¡¡the¡¡new¡¡enterprise¡£¡¡With¡¡all¡¡its¡¡power£»¡¡it¡¡found¡¡itself¡¡outfought¡¡by¡¡this¡¡compact¡¡body¡¡of¡¡picked¡¡men£»¡¡who¡¡were¡¡young£»¡¡zealous£»¡¡well¡­handled£»¡¡and¡¡protected¡¡by¡¡a¡¡most¡¡invulnerable¡¡patent¡£

The¡¡Bell¡¡Telephone¡¡now¡¡took¡¡its¡¡place¡¡with¡¡the¡¡Telegraph£»¡¡the¡¡Railroad£»¡¡the¡¡Steamboat£»¡¡the¡¡Harvester£»¡¡and¡¡the¡¡other¡¡necessities¡¡of¡¡a¡¡civilized¡¡country¡£¡¡Its¡¡pioneer¡¡days¡¡were¡¡over¡£¡¡There¡¡was¡¡no¡¡more¡¡ridicule¡¡and¡¡incredulity¡£¡¡Every¡¡one¡¡knew¡¡that¡¡the¡¡Bell¡¡people¡¡had¡¡whipped¡¡the¡¡West¡­¡¡ern¡¡Union£»¡¡and¡¡hastened¡¡to¡¡join¡¡in¡¡the¡¡grand¡¡Te¡¡Deum¡¡of¡¡applause¡£¡¡Within¡¡five¡¡months¡¡from¡¡the¡¡signing¡¡of¡¡the¡¡agreement£»¡¡there¡¡had¡¡to¡¡be¡¡a¡¡reorganization£»¡¡and¡¡the¡¡American¡¡Bell¡¡Telephone¡¡Company¡¡was¡¡created£»¡¡with¡¡six¡¡million¡¡dollars¡¡capital¡£¡¡In¡¡the¡¡following¡¡year£»¡¡1881£»¡¡twelve¡¡hundred¡¡new¡¡towns¡¡and¡¡cities¡¡were¡¡marked¡¡on¡¡the¡¡telephone¡¡map£»¡¡and¡¡the¡¡first¡¡dividends¡¡were¡¡paid¡¡178£»500¡£¡¡And¡¡in¡¡1882¡¡there¡¡came¡¡such¡¡a¡¡telephone¡¡boom¡¡that¡¡the¡¡Bell¡¡System¡¡was¡¡multiplied¡¡by¡¡two£»¡¡with¡¡more¡¡than¡¡a¡¡million¡¡dollars¡¡of¡¡gross¡¡earnings¡£

At¡¡this¡¡point¡¡all¡¡the¡¡earliest¡¡pioneers¡¡of¡¡the¡¡telephone£»¡¡except¡¡Vail£»¡¡pass¡¡out¡¡of¡¡its¡¡history¡£¡¡Thomas¡¡Sanders¡¡sold¡¡his¡¡stock¡¡for¡¡somewhat¡¡less¡¡than¡¡a¡¡million¡¡dollars£»¡¡and¡¡presently¡¡lost¡¡most¡¡of¡¡it¡¡in¡¡a¡¡Colorado¡¡gold¡¡mine¡£¡¡His¡¡mother£»¡¡who¡¡had¡¡bee

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