all you need to know about
Telephone History Series
by Tom Farley
Page 5 >> 1892 to 1913
At this time we should look at Strowger's achievement, before continuing our narrative. The automatic dial system, after all, changed telephony forever. Almon Brown Strowger (pronounced STRO-jer) was born in 1839 in Penfield, New York, a close suburb of Rochester. Like Bell, Strowger was not a professional inventor, but a man with a keen interest in things mechanical. Swihart says he went to an excellent New York State university, served in the Civil War from 1861 to 1865 (ending as a lieutenant), taught school in Kansas and Ohio afterwards, and wound up first in Topeka and then Kansas City as an undertaker in 1886. This unlikely profession of an inventor so inspired seems odd indeed, but the stories surrounding his motivation to invent the automatic switch are odder still.
The many stories suggest, none of which I can confirm, that someone was stealing Almon Strowger's business. Telephone operators, perhaps in league with his competitors, were routing calls to other undertakers. These operators, supposedly, gave busy signals to customers calling Strowger or even disconnected their calls. Strowger thus invented a system to replace an operator from handling local calls. In the distillation of these many stories, Stephan Lesher relates a story from Almon's time in Topeka:
"In his book, Good Connections, telephone historian Dave Park writes that Strowger grew darkly suspicious when a close friend in Topeka died and the man's family delivered the body to a rival mortician. Strowger contended that an operator at the new telephone exchange had intentionally directed the call to a competitor -- an allegation that gave rise to tales that the operator was either married to, or the daughter of, a competing undertaker."
Whatever the circumstances, we do know that anti-Bell System sentiment ran high at this time, that good telephone inventions commanded ready money, and that Strowger did have numerous problems with his local telephone company. Strowger was a regular complainer and one complaint stands out.
Swihart describes how Southwestern Bell personnel were called out to once again visit Strowger's business, to fix a dead line. The cause turned out to be a hanging sign which flapped in the breeze against exposed telephone contacts. This shorted the line. Once the sign was removed the line worked again. It may be supposed that this sort of problem was beyond a customer's ability to diagnose, that Strowger had a legitimate complaint. But on this occasion Southwestern Bell's assistant general manager, a one Herman Ritterhoff, was along with the repair crew. Strowger invited the man inside and showed him a model for an automatic switch. So Strowger was working on the problem for quite some time and was no novice to telephone theory.
Brooks says that, in fact, Strowger knew technology so well that he built his patent on Bell system inventions. It must be pointed out, however, that every inventor draws ideas and inspiration from previously done work. Brooks says specifically that the Connolly-McTighe patent (Patent number 222, 458, dated December 9, 1879) helped Strowger, a failed dial switchboard, as well as an early automatic switch developed by Erza Gilliland. But Strowger did not build the instrument since he did not have the mechanical skills. A rather clueless jeweler was employed instead to build the first model, and much time was wasted with this man, getting him to follow instructions.
As with Bell, Strowger filed his patent without having perfected a working invention. Yet he described the switch in sufficient detail and with enough novel points for it to be granted Patent number 447,918, on March 10, 1891. And in a further parallel with Bell, Almon Strowger lost interest in the device once he got it built. It fell upon his brother, Walter S. Strowger, to carry development and promotion further, along with a great man, Joseph Harris, who also helped with promotion and investment money. Without Harris, soon to be the organizer and guiding force behind Automatic Electric, dial service may have taken decades longer for the Bell System to recognize and develop. Competition by A.E. forced the Bell System to play switching catchup, something they really only accomplished in the 1940s with the introduction of crossbar.
In 1893 the first central office exchange with a common battery for talking and signaling began operating in Lexington, Massachusetts. This common battery arrangement provided electricity to all telephones controlled by the central office. Each customer's telephone previously needed its own battery to provide power. Common battery had many consequences, including changing telephone design. The big and bulky wall sets with wet batteries providing power and cranks to signal the operator could be replaced with sleek desk sets. I'll cover telephone design in another chapter, but, briefly, there were four great overlapping eras in telephone development: Invention, Crank, Dial and Handset. They went from, respectively, 1876 to 1893, 1877 to 1943, 1919 to 1978 and 1924 to the present.
1897 Milo Gifford Kellogg founded the Kellogg Switchboard and Supply Company near Chicago. Kellogg was a "graduate engineer and accomplished circuit designer" [Pleasance], who began his career in 1870 with Gray and Barton, equipment manufacturers for Western Electric. There he developed Western Electric's best telephone switchboards: a standard model and a multiple switchboard. Both were invented in 1879 and patented in 1881 and 1884, respectively. He retired from Western Electric in 1885, "and began making and patenting a series of telephone inventions of his own, which work extended over a period of 12 years and which culminated in the issue of 125 patents to him on October 17, 1897, besides which over 25 had previously been issued to him."[Telephony] He was also quite political, successfully winning suits against Bell and delaying other Bell actions to his benefit. Telecom History called him "probably the man in the American independent telephone business who first placed himself in opposition to the Bell Company."[Telephony]
His major accomplishment was the so called divided-multiple switchboard, of which two were built. One was sold to the Cuyahoga Telephone Company of Cleveland, Ohio and the other to the Kinloch Telephone company of Saint Louis. The Cleveland installation boasted 9,600 lines, with an ultimate capacity of 24,000! Such large switchboards were needed to handle increasing demand. The Kellog boards were much larger than Bell equipment, mostly designed by Charles Scribner. Saint Louis and Detroit independents started switching to Kellog boards, "threaten[ing] Bell's profitable urban markets."[Grosvenor] Under such pressure and once again running out of money, Bell regrouped.
In 1899 American Bell Telephone Company reorganized yet once again. In a major change, American Bell Telephone Company conveyed all assets, with the exception of AT&T stock, to the New York state charted American Telephone and Telegraph Company. It was figured that New York had less restrictive corporate laws than Massachusetts. The American Bell Telephone Company name passed into history.
In 1900 loading coils came into use. Patented by Professor Michael I. Pupin, loading coils helped improve long distance transmission. Spaced every three to six thousand feet, cable circuits were extended three to four times their previous length. Essentially a small electro-magnet, a loading coil or inductance coil strengthens the transmission line by decreasing attenuation, the normal loss of signal strength over distance. Wired into the transmission line, these electromagnetic loading coils keep signal strength up as easily as an electromagnet pulls a weight off the ground. But coils must be the right size and carefully spaced to avoid distortion and other transmission problems.
In 1901 the Automatic Electric Company was formed from Almon Strowger's original company. The only maker of dial telephone equipment at the time, Automatic Electric grew quickly. The Bell System's Western Electric would not sell equipment to the independents, consequently, A.E. and then makers like Kellog and Stromberg-Carlson found ready acceptance. Desperate to fight off the rising independent tide, the Bell System concocted a wild and devious plan. AT&T's president Fredrick Fish approved a secret plan to buy out the Kellog Switchboard and Supply Company and put it under Bell control. Kellog would continue selling their major switchboards to the independents for a year. At that time the Bell System would file a patent suit against Kellog, which they would intentionally loose. This would force the independents to rip out their newly installed switchboards, crushing the largest independents. The plan was discovered, aborted, and further scandalized AT&T.[Grosvenor2]
By 1903 independent telephones numbered 2,000,000 while Bell managed 1,278,000. Bell's reputation for high prices and poor service continued. As bankers got hold of the company, the Bell System faltered.
In 1907 Theodore Vail returned to the AT&T as president, pressured by none other than J.P. Morgan himself, who had gained financial control of the Bell System. A true robber baron, Morgan thought he could turn the Bell System into America's only telephone company. To that end he bought independents by the dozen, adding them to Bell's existing regional telephone companies. The chart shows how AT&T management finally organized the regional holding companies in 1911, a structure that held up over the next seventy years. But Morgan wasn't finished yet. He also worked on buying all of Western Union, acquiring 30% of its stock in 1909, culminating that action by installing Vail as its president. For his part, Vail thought telephone service was a natural monopoly, much as gas or electric service. But he also knew times were changing and that the present system couldn't continue.
In January 1913 the Justice Department informed the Bell System that the company was close to violating the Sherman Antitrust Act. Vail knew things were going badly with the government, especially since the Interstate Commerce Commission had been looking into AT&T acquisitions since 1910. J.P. Morgan died in March, 1913; Vail lost a good ally and the strongest Bell system monopoly advocate. In a radical but visionary move, Vail cut his losses with a bold plan. On December 19, 1913, AT&T agreed to rid itself of Western Union stock, buy no more independent telephone companies without government approval and to finally connect the independents with AT&T's long distance lines. Rather than let the government remake the Bell System, Vail did the job himself.
Known as the Kingsbury agreement for the AT&T vice president who wrote the historic letter of agreement to the Justice Department, Vail ended any plans for a complete telecommunications monopoly. But with the independents paying a fee for each long distance call placed on its network, and with the threat of governmental control eased, the Bell System grew to be a de facto monopoly within the areas it controlled, accomplishing by craft what force could not do. Interestingly, although the Bell System would service eighty three percent of American telephones, it never controlled more than thirty percent of the United States geographical area. To this day, 1,435 independent telephone companies still exist, often serving rural areas the Bell System ignored. Vail's restructuring was so successful it lasted until modern times. In 1976, on the hundredth anniversary of the Bell System, AT&T stood as the richest company on earth.