That war was actually a good thing for Bell, and Hubbard, and Sanders.
With the Western Union pushing this new invention, and not only
pushing it, but fighting for its claim to it, the public realized that
the telephone was neither a toy nor a scientific oddity, but an
instrument of great commercial value. Sanders’ relatives came to the
aid of the Bell Company, and put money into its treasury, and soon
Hubbard was leasing out telephones at the rate of a thousand a month.
But none of these partners was exactly the man to organize and build
up such a business as this of the telephone should be, and each of
them knew it. Then Hubbard discovered a young man in Washington who
impressed him as having remarkable executive ability. Watson met him,
and his opinion coincided with that of Hubbard. The upshot of the
matter was that the partners offered the post of General Manager at a
salary of thirty-five hundred dollars a year to this man, Theodore N.
Vail, and Vail accepted the offer. Vail himself knew little about the
telephone, but his cousin, Alfred Vail, had been the friend and
assistant of Morse when he was working on his first telegraph.
Hubbard had advertised Bell’s telephone, Sanders had financed it, and
now Vail pushed it on the market. He faced the powerful Western Union
and fought them. He sent copies of Bell’s original patent to each of
his agents, with the message, “We have the only original telephone
patents, we have organized and introduced the business, and we do not
propose to have it taken from us by any corporation.”
His plan was to create a national telephone system, and so he confined
each of his agents to one place, and reserved all rights to connect
one city with another. He made short-term contracts, and tried in
every way to keep control of the whole system in the hands of the
parent company. Then the Western Union came out with Edison’s new
telephone transmitter, which increased the value of the telephone
tenfold, and which in fact made it almost a new instrument. The Bell
Company was panic-stricken, for their customers demanded a telephone
as good as Edison’s.
Those were hard times for Vail and the partners back of him. The
telephone war had cut the price of service to a point where neither
company could show a profit. Bell, now married, returned from England
with word that he had been unable to establish the telephone business
there, and that he must have a thousand dollars at once to pay his
most pressing debts. He was ill, and he wrote from the Massachusetts
General Hospital, “Thousands of telephones are now in operation in all
parts of the country, yet I have not yet received one cent from my
invention. On the contrary, I am largely out of pocket by my
researches, as the mere value of the profession that I have sacrificed
during my three years’ work amounts to twelve thousand dollars.”
Public-domain text, read in full here on John Shaqi.
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