Alexander Graham Bell's patent for the telephone, #174,465, issued by the patent office on March 7th, 1876, has been called the most valuable patent ever issued. There is no denying its importance today, but the story of the Telephone includes a little known, but historic competitive chapter that began a short time after the first patent was issued and didn't end until Bell's monopoly was firmly entrenched. This is how it began...
When Bell's attorney filed his application at the patent office on February 14th, 1876, it came only hours before Elisha Gray filed his Notice of Invention for a telephone. Mystery still surrounds Bell's application and what happened that day. In particular, the key point to Bell's application, the principle of variable resistance, was scribbled in a margin, almost as an afterthought. Some think Bell was told of Gray's Notice then allowed to change his application. That was never proven, despite some 600 lawsuits that would eventually challenge the patent, all of which Bell won or settled.
The months following the patent grant proved financially difficult for Bell and his backers. Critics claimed Bell's patent could not produce a working telephone and many stated they had a prior claim. Litigation loomed. By the fall of 1876, Bell offered to sell his telephone patent rights to Western Union for $100,000. In one of the greatest mis-calculations in history, Western Union said no. Instead, Western Union believed that the telegraph, not the telephone, was the future. In September, 1877 Western Union changed its mind when one of its largest subsidiaries, the Gold and Stock Telegraphy Company, ripped out their telegraphs and started using Bell telephones. Rather than buying patent rights or licenses from Bell Telephone, Western Union decided to buy patents from others and start their own telephone company. They were not alone. At least 1,730 telephone companies organized and operated in the 17 years Bell's patent was supposed to be protected.
Most competitors disappeared as soon as the Bell Company filed suit against them for patent infringement, but not all. Some disagreed with Bell's right to the patent, some ignored it altogether, others started a phone company because Bell's people would not provide service to their area. In any case, Western Union began entering agreements with Thomas Edison, Elisha Grey and Amos E. Dolbear for their telephone inventions.
In December, 1877 Western Union created the American Speaking Telephone Company. A tremendous selling point for their telephones was Edison's improved transmitter. Bell Telephone was deeply worried since they had installed only 3,000 phones by the end of 1877. Western Union, on the other hand, had 250,000 miles of telegraph wire strung over 100,000 miles of route. If not stopped they would have an enormous head start on making telephone service available across the country. Undaunted by the size of Western Union, then the world's largest telecom company, Bell's Boston lawyers sued them for patent infringement the next year.
On November 10, 1879 Bell won its patent infringement suit against Western Union in the United States Supreme Court. In the resulting settlement, Western Union gave up its telephone patents and the 56,000 phones it managed, in return for 20% of Bell royalties for the 17 year life of Bell's patents. It also retained its telegraph business as before.
The court's decision made the National Bell Telephone Company even bigger, resulting in a new entity with a new name. American Bell Telephone Company was created on February 20, 1880, capitalized with over seven million dollars. Bell now managed 133,000 telephones.
Shortly thereafter, in 1882, Bell completed the takeover of Western Electric Company, a previous rival and a manufacturer of telephones that would, from that day on, produce products exclusively for the Bell Telephone System.
In 1885, American Bell introduced a new Long Distance Company. It was called American Telephone & Telegraph and the Bell Telephone System would forever be known as AT&T.
Story of the Candlestick Telephone
The first consumer telephones were heavy wooden wall mounted hand cranked telephones. That changed in 1892 when Bell introduced the first upright desk top telephone called "desk stand" or "candlestick" telephone. This was a significant improvement over the wooden wall models and Bell understood the need for innovation because this was now one year before his first telephone patent was set to expire, opening the door to competition.
In 1893, Bell's first patent expired and in a span of 10 years, over 6,000 independent competitive telephone companies emerged. By 1903, independent telephones numbered 2,000,000 while Bell managed 1,278,000. Dozens, maybe hundreds of manufacturing companies were designing and producing beautiful, distinctive candlestick telephones to fill the demand of thousands of independent telephone companies across the country.
Some of the most beautiful telephones ever made were introduced during this brief competitive window in history. But consumers quickly discovered that most communities were wired with Bell Telephones and non-Bell Telephones could not be used on the Bell System. Because Bell had such a huge head start building its wired nationwide infrastructure (with the help of Western Union), consumers everywhere were reluctant to purchase non-Bell equipment for fear that it would isolate them from everyone else on the Bell System.
It was only a matter of time before independent telephone companies started to fail. In fact, over the next few years, most of them did fail. Bell also acquired dozens of competitive independent companies when it proved advantageous to feed the monopoly, and when it did, Western Electric telephones replaced whatever telephones were being used at the time.
One more note. In 1926, Bell introduced the first desktop cradle telephone, made by Western Electric. It actually was a sawed-off candlestick fitted with a cradle and receiver handset. This marked the end of the candlestick era (1892 - 1926) and the beginning of theï¿¼desktop cradle telephone. Although still in use well into the 1930s, candlestick production ended about 1926.
As government scrutiny increased and complaints were filed about Bell's growing monopoly, the U.S. Justice Department and AT&T voluntarily worked out a deal in December of 1913, ending any plans for a complete telecommunications monopoly. AT&T agreed to sell all of its Western Union stock, they also stopped acquiring independents without first getting government approval and, AT&T agreed to let the remaining independents place long distance calls on their network, for a fee.
The Bell System would grow to service 83% of all American telephones, but never controlled more than 30% of the United States geographical area. To this day, 1435 independent telephone companies still exist serving small rural areas that the Bell System ignored. This did not change the fact that in every community Bell/AT&T served, they were, in fact, a monopoly.
While most historians and telephone collectors are intrigued by Bell Telephones of all kinds, for one brief moment in history, the truly rarest telephones were the candlesticks manufactured by companies who dreamed of competing with Bell by producing radically different, beautiful designs that included nickel plated rope shafts, fluted shafts, potbellies and more. The 35 year life of the candlestick telephone provides indisputable evidence that just as Bell's dominance began, there was one brief bitter fight raging among thousands of legitimate contenders, most of whom succumbed to what would become the greatest monopoly in American history.
The telephones in this collection represent some of the rarest, original telephones on earth, and they also provide evidence of the most competitive chapter in telephone history.
Sources for the stories in this introduction come from research in two primary places. The Internet provided dozens of articles confirming the history and timeline of the Telephone. The other source is a wonderful book entitled: The Tangled Web of Patent #174,465, written by Russell A. Pizer. If you have any interest at all in the history of the telephone, this is a fascinating book and I can promise it will challenge what you know about the invention of the telephone and the early years of the telephone's development.
I would also recommend visiting the websites of both American Telephone Collectors Clubs:
Antique Telephone Collectors Association, www.atcaonline.com
Telephone Collectors International, www.telephonecollectors.org
Like most collectors, we dream of uncovering buried treasure. And even better is uncovering a chapter in American History that weaves together historical facts with stunning evidence of a very special window that played a big role in the history of the telephone.
One of the greatest inventions led to one of the most powerful monopolies and ultimately, to the most important personal device owned by every American. The telephone business is a highly competitive and exciting business today, but it was even more competitive for one brief stretch in history almost 120 years ago.
I hope you enjoy looking at the beautiful candlestick telephones in the collection. Let me know if you have a unique candlestick telephone that you would consider selling or trading. I am always looking to add unusual, original candlesticks to this collection.