At this juncture a young Bostonian named Francis Blake wrote to Vail,
announcing that he had invented a transmitter that was the equal of
Edison’s, and offering to sell it for stock in the company. The
purchase was made, and the claim of the inventor proved true. The Bell
telephone was again as good as that of the Western Union Company. A
new company, called the National Bell Telephone Company, was
organized, with a capital of $850,000, and Colonel Forbes of Boston
became its first president.
There have been few patent struggles to compare with that which was
waged over the telephone. McCormick fought for years to uphold his
rights to the invention of the reaper, but he fought a host of
competitors, and the warfare was of the guerrilla order. The Bell
Company fought alone against the Western Union, and it was a struggle
of giants. The Western Union was certain that it could find patents
antedating Bell’s, and it went on that assumption, even after its own
expert had reported, “I am entirely unable to discover any apparatus
or method anticipating the invention of Bell as a whole, and I
conclude that his patent is valid.” It claimed that Gray was the
original inventor, and instructed its lawyers to bring suits against
the Bell Company for infringing on Gray’s patents.
The legal battle began in the autumn of 1878, and continued for a
year. Then George Gifford, the leading counsel for the Western Union,
told his clients that their claim was baseless, and advised that they
come to a settlement. The Western Union saw the wisdom of this course,
and went to the Bell Company with an offer of compromise. An agreement
was finally reached, to remain in force for seventeen years, and the
terms were that the Western Union should admit that Bell was the
original inventor, that his patents were valid, and should retire from
the telephone business. On the other side, the Bell Company agreed to
buy the Western Union telephone system, to pay them a royalty of
twenty per cent. on all their telephone rentals, and to keep out of
the telegraph business.
That ended the great war. It converted a powerful rival into an ally,
it gave the Bell Company fifty-six thousand new telephones in
fifty-five cities, and it made that company the national system of the
United States. In 1881 there was another reorganization; the American
Bell Telephone Company was created, with a capital of six million
dollars. The following year there was such a telephone boom that the
Bell Company’s system was doubled, and the gross earnings reached more
than a million dollars.
Public-domain text, read in full here on John Shaqi.
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