Case Files: AT&T

Photograph of Theodore Vail, taken by New York Photographer-of-Men Pirie Mac Donald


In 1916, the world awaited the technology that would enable instant voice-to-voice communication. The American Telephone & Telegraph Company was making great strides in the pursuit, with tremendous excitement greeting each new distance record that it set.

Today's world of instant global communication owes much to the A.T.& T. engineers of a century ago, but how did the American Telephone & Telegraph Company get started? What were AT&T's contributions to the science of telephony?

Improving the State of the Union

In March of 1916, The Franklin Institute recognized AT&T for its contributions to the art of telephony with its revered Elliott Cresson Medal. The case file that chronicles the decision-making process leading up to AT&T's recognition includes several drafts of the arguments made in support of AT&T's receipt of this honor. The final draft declares that the Cresson medal was conferred on AT&T in honor of its constructive and far-seeing policy in the development of telephony, its promotion of telephone engineering, its establishment of telephone systems in every part of the US, and its success in placing all states of the Union in speaking communication.

The time spanning between the establishment of AT&T in the late 1800s, and its recognition by The Franklin Institute in 1916 saw many changes in American Society. The improvement of railroads, mail delivery, and telecommunications helped make the country seem smaller by making it easier for the population to get in touch. As President Theodore Roosevelt spearheaded the creation of the Panama Canal, AT&T set up switchboards and long distance telephone service. Under the leadership of Theodore Vail, AT&T flourished, establishing many practices which continue to be adhered to by companies specializing in telephony today. The documents detailing the accomplishments of Vail's company sing the praises of this noteworthy figure in AT&T's history.

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. 

Switching Styles

The structure of the Bell Company's local agencies changed dramatically in 1878 with the development of the switchboard. Prior to the switchboard, all telephone connections had been "point-to-point," meaning that one telephone line connected only two telephones stationed at two different points in a given city. The invention of the switchboard broadened the number of connections which could be made among local telephone users. The switchboard functioned as a central exchange to which all telephone subscribers in a particular area could connect. With the switchboard acting as the center of local exchanges, any telephone subscriber in the operating area could connect with any other subscriber as long as both were connected to the same switchboard. The switchboard thus facilitated greater amounts of communication on the local (and eventually the national) level.

Going Corporate

The Bell Telephony Company was formally incorporated in June of 1878, and Theodore Vail was hired as the company's general manager. As general manager, and eventually as President, Theodore Vail inspired change in his company and earned respect and admiration from his colleagues. During his time at AT&T, Vail helped orchestrate and oversee numerous consolidations and reorganizations of the local branches of the Bell Telephone Company, reincorporated in 1880 as American Bell. The newly incorporated American Bell was empowered by law to construct, own, and maintain public and private telephone lines. From 1881 through 1884, the Company underwent one of its most significant restructurings, which consolidates small, isolated businesses into multi-state operations.

In early 1885, Vail stepped down from his position with American Bell in the interest of assembling and directing a long-distance subsidiary of the parent company, American Bell. This new subsidiary was incorporated and named the American Telephone & Telegraph Company (AT&T). American Bell continued to exist until 1921, but eventually its traditional lines of business were combined with AT&T's long-distance operations and the single company formed has since been known as AT&T.

Hail to the Chief

The AT&T case file archived at The Franklin Institute is as much an encomium to Theodore Vail as it is a tribute to the AT&T Company itself. The file includes a biography of Vail, pulled from a work entitled History of the City of New York, written by John William Loonard in 1910. The biography details the history of Vail's family's involvement with the New Jersey Iron Works, and tells the story of Vail's own climb from a respected position in the Railway Mail Service to the Presidency of AT&T.

After conducting a study of the question of distribution and dispatch of mail, Vail successfully streamlined this process and was recognized in Washington DC and appointed to the position of Assistant Superintendent of the Railway Mail Service. Though the Service's youngest officer, he was eventually promoted to General Superintendent, having contributed significantly to the development of the Railway Mail System.

Uninterested in active political involvement, Vail left DC in 1876 to take on the position of General Manager of the American Bell Telephone Company. As general manager and eventually as President of AT&T, Vail helped to bolster the public's confidence in the telephone, and to establish the telephone as a permanent fixture in the daily life of American citizens. He and other leaders of American Bell and AT&T encountered numerous obstacles, from technological setbacks to patent lawsuits brought by the Western Union Telegraph Company. Western Union established itself as both a successful provider of telecommunication service and a fierce competitor with American Bell and AT&T. Some of Vail's most significant contributions to AT&T were his development of long-distance telephony and his work towards company standardization and reorganization. He encouraged the creativity of his employees while working to establish company standards for service and for technology. His policy was: "One system, one management, universal service."

In 1884, Vail resigned from work with the Bell Telephone Company, splitting his time between working his farm in Vermont and developing rail lines in Buenos Aires. After setting a rail company in Buenos Aires in working order, he retired to his farm. Vail met with tragedy in 1906, in which year he lost both his wife and his son. To overcome his despair, he reengaged with the telephonic field, and in 1907 he assumed the Presidency of the American Telephone and Telegraph Company. As President, he extended AT&T's long distance service, and primed the company to respond more promptly to the constantly enlarging demands made on its facilities. In recognition of Vail's achievements and standards of quality, his biography proclaims: "Mr. Vail represents the highest type of the American corporate executive."

A Memorable Evening

Conducted in the Auditorium of The Franklin Institute, the 1916 awards ceremony saw the presentation of both the Franklin Medal and the Elliott Cresson Medal. The Franklin Medal is awarded to "those workers in physical science or technology, without regard to country, whose efforts, in the opinion of the Institute, have done most to address a knowledge of physical science or its applications." Awardees were Professor Theodore William Richards of Harvard University, recognized for his contributions to Chemistry, and John J. Carty, Chief Engineer of AT&T, awarded for his contribution to telephone service.

The Elliott Cresson Medal is awarded for "discovery or original research, adding to the sum of human knowledge, irrespective of commercial value; leading and practical utilization of discovery, invention, methods or products embodying substantial elements of leadership in their respective classes, or unusual skill or perfection in workmanship." This honor was bestowed on AT&T, and received by renowned President Theodore Vail.

Switching Back and Forth

The earliest switchboard installed in large cities usually stretched from the ceiling to the floor. As a center of subscriber connections, the switchboard facilitates the completion of circuits of communication. The high back panel of the switchboard has rows of jacks, each jack representing a local subscriber. This jack is wired to connect to the home or business of the local subscriber and is called a local extension. Some jacks represent lines connecting one switchboard to another, called trunk lines. Each jack has a corresponding lamp, which lights up to indicate an incoming call from a local subscriber.

The table or desk area in front of the operator (or operators, depending on the size) of a switchboard includes columns of switches, lamps, and cords. Each column is made up of a front switch and a rear switch, with the front switch wired to the front cord and the rear key wired to the rear cord. The rear cord is used to receive incoming calls to the switchboard, and the front cord to which it connects is used to connect to send an outgoing ring signal to the local extension requested by the incoming call. The front and rear cord thus complete the circuit, connecting two local subscribers.

The front and rear switches have three positions: back, normal, and forward. When a switch is in the normal position, it creates the connection necessary for the transmission of speech over a telephone line. In the forward position, the key connects the operator to the cord to which it is wired. In the back position, the switch sends a ring signal out on the cord.

When a call comes in, the lamp associated with the jack of that caller lights up. The operator responds to the call by placing the rear cord on the table in front of her into the appropriate jack on the back panel. After plugging in the cord, she moves the switch to the "forward" position, completing the circuit that connects her to the caller. She then speaks with the caller, asking where the caller would like to be connected. She then places the front cord in the jack representing the local extension specified by the caller, and switches the key into the "back" positing to ring the party being called. After she connects, the operator leaves both cords in the jacks and places the switches in the "normal" position, creating a talk path between the two subscribers.

From Shore to Shore

With the support of his colleagues, Theodore Vail resigned his position within American Bell in 1885. He did not leave the telephone industry; rather, he focused all his efforts on the development of a long distance subsidiary of American Bell. The subsidiary was incorporated and named the American Telephone and Telegraph Company (AT&T) in 1885. By 1892, Vail and his colleagues had succeeded in building an interconnected long-distance telephone network which stretched from New York to Chicago. This distance represented the technological limit of the wiring in use in the late 1800s. With the development of two new technologies, the long-distance network would eventually span from coast to coast. These two key new developments were termed loading coils and Audions.

Loading Coils

AT&T's long-distance network reached Denver, Colorado in 1911, helped along by the development of the loading coil. Loading coils, when inserted periodically into the twisted pairs of wires transmitting speech from one long-distance caller to another, work in conjunction with line capacitance and resistance. Prior to the introduction of loading coils, high frequency noise caused degradation of communication signals and speech transmittals over long distances. To resolve this problem, loading coils were inserted in order to create low-pass filtering. Loading coils worked with telephone wires to effectively cut out the high frequencies causing interference by creating an electrical filter which allowed only low frequencies to pass along the telephone wires. Less higher frequency interference brought AT&T miles closer to its goal of bridging the distance between the East and West Coast.

The Audion

The Audion made it possible for telephone signals to reach from coast to coast. Inventor Lee de Forest first developed a working model of the audion in 1906. This device is made up of three elements: a filament, a plate, and a grid. The Audion is essentially a vacuum tube: an arrangement of the three elements listed above within an insulating, temperature-resistant envelope. De Forest's early model of the Audion had an "envelope" made of glass, causing it to resemble a light bulb.

The early Audion worked by creating a current of electrons that amplified the weak long-distance signals sent through AT&T's phone lines. When the filament mentioned above was heated, it released electrons into the vacuum created by the glass envelope enclosure. These negatively-charged electrons were drawn to the positively-charged plate. The current of electrons flowing from the filament to the plate were projected onto the grid, thus amplifying the telephone signal. The strengthening, or amplification, of telephone signals made it possible for these signals to reach from coast to coast.

De Forest's original patents stipulated that low-pressure gas present inside the Audion's glass envelope was essential to its function. The gas, however, was occasionally absorbed by the electrons, resulting in the production of a blue haze and the malfunction of the Audion. While in AT&T's employment, physicist Dr. Harold Arnold made improvements to the Audion by increasing the vacuum inside the glass envelope, thereby removing residual gases. By the summer of 1913, AT&T had tested high-vacuum tubes and determined their efficacy as signal amplifiers. The company completed its long-distance network in 1914, after the development, modification, and installation of loading coils and Audions.


The AT&T project was made possible by support from The Barra Foundation and Unisys. 

Resource - AT&T - Case File Report

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