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American Telephone & Telegraph: The Art of Telephony, 1916

On the Local Level

The structure of the AT&T Company underwent many changes as it worked to support the development of the art of telephony. On July 9, 1877, Gardiner G. Hubbard—Alexander Graham Bell's father-in-law—and Thomas Sanders formed the Bell Telephone Company of Massachusetts. At its inception, the company was an unincorporated, voluntary association. Hubbard acted as the company's trustee and principal officer, holding the rights to Bell's invention. Bell himself assumed the role of company Electrician, and never played a major role in the organization of the business.

Gardiner Hubbard had his work cut out for him as he began trying to build up a population of telephone users. In its early days, the telephone was not in high demand, and Hubbard ended up establishing agencies across the country. He solicited the support of local agents, whom he contracted to lease the Bell Telephone Company's equipment. These agents leased telephone equipment to customers, and were compensated with an annual commission. The first telephones could be leased "for social purposes" for $20.00 per year, while phones leased for "business purposes" went for $40.00 per year. The higher business rate reflects Hubbard's belief that the telephone would be more widely used for commerce than for social conversation.

As it was first set up, the Bell Company operated on a "point-to-point" configuration, and each pair of telephones leased communicated with one another using a private line. The Bell Company benefited by employing local agents who were both technologically savvy and respected as thoughtful businessmen in their communities. This helped the Bell Company to instill faith in telephony, and to secure the rights necessary for constructing telephone poles and stringing lines through towns and cities.

AT&T would come a long way from its humble beginnings in point-to-point local lines to its standing as a forerunner in long-distance communication. You can click on the covers which would eventually be placed at the beginning of the company's Elliot Cresson Medal case file by clicking on the document links at right.