Omaha daily bee., 1909-12-05
RISE OF TELEPHONE COMBINE
Quiet Beginnings, Growth and Alb
sOrptiOn of Western Union.
LITTLE FISH SWALLOWS BIG ONE
A Tale that Is Vow Told for the First
Time-HOw IL Centers Around
the COmpnny's First
Organizer.
First Article.

Organizer.
FIRST Article.
Harry A. Bullock in Boston Transcript.
This is a story which runs directly
counter to the ordinarily accepted theory
Of evolution. The Dig fish did not swal-
low the little fish, but the little fish grew
large and strong. and now at the end of
thirty years is in process of swallowing
the big one. The big fish is the Western
Union-the little fish used TO be the Bell
Telephone company, although in these
later days Of its strength and magnitude
we must know It as the American Tele-
phone and Telegraph company. We are
going to see how It all came about and
the story may take on a little interest be-
lyond that of the narrative itself IL we
remember that 1t has never been told be-
fore, but is now put together. SO far as
concerns the telephone, from a wide va
riety of data, CLEANED from many first
hand sources.
SO right here, at the beginning, let us
pay our respects to Theodore N. Vail, the
big man of the telephone world, who
steered the little old Bell Telephone syn
dictate through its earliest days when the
telephone business was largely made up
of the hope and hustle of less than half
a dozen enthusiasts. then went on his way
down TO the southern countries to build
him a fortune of many millions. while he
built street railroads and lighting plants
flor Argentina and Brazil, and now is come
back again to take the headship of the
great system that he helped to found,
grown into one of the greatest OF cor
porations even in these days of mann
moth aggregations OF capital. The bill
l~lion-dollar telephone trust is not a phrase
which presents any great degree of eN-
laggeration; a company which can snow
actual assets that are Ss5,O00,O00 in eN-
cess of its capital obligations Of 100000
900 held by the public, does not have to
expand so very much farther to reach
the billion-dollar stage.
Fat at the start.
And when the telephone trust gets there
IL VIII have one important distinguishing
feature from other y, O00.O 1000 propositions
of which we have heard in the last half
dozen years. It will not be a company
which has had to grow Up into Its capital
cation while Its security holders waited
hungry for dividends or interest. Its bonds
and notes have never been in default; its
stock has always borne substantial returns,
and its entire capital today, as soon as a
DCUOllk pOllu AoAph RA0N
will represent cash paid in to an amount
exceeding the entire par value Of all of
the securities outstanding.
1t is a bit difficult to know where to
begin this story of telephone development,
whether from the corporate end or from
the personal. Perhaps the latter starting
point is better, because a corporation after
ali stands for the personality Of the men
who lave controlled It, and nothing Illus
trates this better than the history OF the
GOuld-managed Western Union and hat OF
the Bell telephone. There are a few men
now living who remember the beginning or
the latter story, although the history OF the
telegraph has been written and rewritten
and it's traditions are intermingled insepa-
rably with those Of the great struggle to
preserve the union. The telephone came
4 into existence and found its first develop
ment in no such stirring times; no staff
of war veterans remains to be gathered
YEARLY. though In diminishing numbers,
under the auspices OF 4 Carnegie, to tell
again OF their service to the country, no
less notable and often no less heroic than
that rendered by the troops In the field.
FOur Men who Started Telephone.
Four men met in washington In the early
seventies, from whose efforts the telephone
originated. They were, Prof. Alexander
Graham Bell, Gardiner G. Hubbard (his
father-in-law) Thomas Sanders and
Thomas A. Watson. The force Of clrcum-
stances drew the four together and Il was
circumstances merely that was responsible
for the invention Of the telephone. Prof.
DBen had none of the commercial genius
OF an Edison; he was a college Instructor
ana at that particular time was trying TO
invent a device which would help people
Of Unmarried hearing. He stumbled on the
idea Of the telephone. He talked it over
with his father-in-law. and the two told
Sanders about II.
Gardiner q. Hubbard had q good deal
OF the promote In his makeup. but his
CAPITAL WIS limited and Prof. Bell had
none OF his own. sanders was a man with
some little property and Hubbard talk ID
Elm into a realization Of the possibilities
OF the invention. The three men. however,
found themselves badly Handicapped
through the lack Of a me0hanician. Sanders
and Hubbard knew nothing Of mechanics
and to Prof. Bell the saying might be ap-
piled that his Fingers were all thumbs"
He could see how q thing ought to be dons.
but could not de It himself, 80 there was
added Thomas A. Watson and in Watson
| he TITO "a A1N0 NVNA -
partner who was worthy of their com
pany. Watson, indeed. was a mechanical
genius and it was largely through his
ingenuity that the mechanical details of
the first telephone instruments were per-
fected. which allowed the device TO have
at once a commercial value.
The story of Mr.. Vail.
In July. 1877, a trust or association was
formed TO take over the telephone in
venton. Hubbard was president and
Sanders was treasurer. The next year II
was determined to form two companies,
one in New England which was known as
The New England Telephone company
and another to cover the territory OF the
United States outside Of New England, to
be known as the Bell Telephone COM
pany. Here was where Theodore N. Vain
entered the telephone field. Among the
original four men no one contributed the
powers of organization. The inventor,
the mechanic, the capitalists and the pro-
motor-stin they needed the organizer,
ana It was this need which led them to
draft Theodore n. Vail
He was born out IN Ohio in 1s45 from
IETnHTHgh nUnaEawa Wuhn ~ --aaVa n-