Edison, His Life and Inventions [77]
and other controlling patents the Western Union Company had already set going some eighty- five exchanges, and was making large quantities of telephonic apparatus. In return for its voluntary retirement from the telephonic field, the Western Union Telegraph Company, under this contract, received a royalty of 20 per cent. of all the telephone earnings of the Bell system while the Bell patents ran; and thus came to enjoy an annual income of several hundred thousand dollars for some years, based chiefly on its modest investment in Edison's work. It was also paid several thousand dollars in cash for the Edison, Phelps, Gray, and other apparatus on hand. It secured further 40 per cent. of the stock of the local telephone systems of New York and Chicago; and last, but by no means least, it exacted from the Bell interests an agreement to stay out of the telegraph field.
By March, 1881, there were in the United States only nine cities of more than ten thousand inhabitants, and only one of more than fifteen thousand, without a telephone exchange. The industry thrived under competition, and the absence of it now had a decided effect in checking growth; for when the Bell patent expired in 1893, the total of telephone sets in operation in the United States was only 291,253. To quote from an official Bell statement:
"The brief but vigorous Western Union competition was a kind of blessing in disguise. The very fact that two distinct interests were actively engaged in the work of organizing and establishing competing telephone exchanges all over the country, greatly facilitated the spread of the idea and the growth of the business, and familiarized the people with the use of the telephone as a business agency; while the keenness of the competition, extending to the agents and employees of both companies, brought about a swift but quite unforeseen and unlooked- for expansion in the individual exchanges of the larger cities, and a corresponding advance in their importance, value, and usefulness."
The truth of this was immediately shown in 1894, after the Bell patents had expired, by the tremendous outburst of new competitive activity, in "independent" country systems and toll lines through sparsely settled districts--work for which the Edison apparatus and methods were peculiarly adapted, yet against which the influence of the Edison patent was invoked. The data secured by the United States Census Office in 1902 showed that the whole industry had made gigantic leaps in eight years, and had 2,371,044 telephone stations in service, of which 1,053,866 were wholly or nominally independent of the Bell. By 1907 an even more notable increase was shown, and the Census figures for that year included no fewer than 6,118,578 stations, of which 1,986,575 were "independent." These six million instruments every single set employing the principle of the carbon transmitter--were grouped into 15,527 public exchanges, in the very manner predicted by Bell thirty years before, and they gave service in the shape of over eleven billions of talks. The outstanding capitalized value of the plant was $814,616,004, the income for the year was nearly $185,000,000, and the people employed were 140,000. If Edison had done nothing else, his share in the creation of such an industry would have entitled him to a high place among inventors.
This chapter is of necessity brief in its reference to many extremely interesting points and details; and to some readers it may seem incomplete in its references to the work of other men than Edison, whose influence on telephony as an art has also been con- siderable. In reply to this pertinent criticism, it may be pointed out that this is a life of Edison, and not of any one else; and that even the discussion of his achievements alone in these various fields requires more space than the authors have at their disposal. The attempt has been made, however, to indicate the course of events and deal fairly with the facts. The controversy that once waged with great excitement over the invention of the microphone, but has long
By March, 1881, there were in the United States only nine cities of more than ten thousand inhabitants, and only one of more than fifteen thousand, without a telephone exchange. The industry thrived under competition, and the absence of it now had a decided effect in checking growth; for when the Bell patent expired in 1893, the total of telephone sets in operation in the United States was only 291,253. To quote from an official Bell statement:
"The brief but vigorous Western Union competition was a kind of blessing in disguise. The very fact that two distinct interests were actively engaged in the work of organizing and establishing competing telephone exchanges all over the country, greatly facilitated the spread of the idea and the growth of the business, and familiarized the people with the use of the telephone as a business agency; while the keenness of the competition, extending to the agents and employees of both companies, brought about a swift but quite unforeseen and unlooked- for expansion in the individual exchanges of the larger cities, and a corresponding advance in their importance, value, and usefulness."
The truth of this was immediately shown in 1894, after the Bell patents had expired, by the tremendous outburst of new competitive activity, in "independent" country systems and toll lines through sparsely settled districts--work for which the Edison apparatus and methods were peculiarly adapted, yet against which the influence of the Edison patent was invoked. The data secured by the United States Census Office in 1902 showed that the whole industry had made gigantic leaps in eight years, and had 2,371,044 telephone stations in service, of which 1,053,866 were wholly or nominally independent of the Bell. By 1907 an even more notable increase was shown, and the Census figures for that year included no fewer than 6,118,578 stations, of which 1,986,575 were "independent." These six million instruments every single set employing the principle of the carbon transmitter--were grouped into 15,527 public exchanges, in the very manner predicted by Bell thirty years before, and they gave service in the shape of over eleven billions of talks. The outstanding capitalized value of the plant was $814,616,004, the income for the year was nearly $185,000,000, and the people employed were 140,000. If Edison had done nothing else, his share in the creation of such an industry would have entitled him to a high place among inventors.
This chapter is of necessity brief in its reference to many extremely interesting points and details; and to some readers it may seem incomplete in its references to the work of other men than Edison, whose influence on telephony as an art has also been con- siderable. In reply to this pertinent criticism, it may be pointed out that this is a life of Edison, and not of any one else; and that even the discussion of his achievements alone in these various fields requires more space than the authors have at their disposal. The attempt has been made, however, to indicate the course of events and deal fairly with the facts. The controversy that once waged with great excitement over the invention of the microphone, but has long