ne,
was soon in deep trouble. In 1907, American Bell Telephone fell into
the hands of the rather sinister J.P. Morgan financial cartel,
robber-baron speculators who dominated Wall Street.
At this point, history might have taken a different turn. American
might well have been served forever by a patchwork of locally owned
telephone companies. Many state politicians and local businessmen
considered this an excellent solution.
But the new Bell holding company, American Telephone and Telegraph or
AT&T, put in a new man at the helm, a visionary industrialist named
Theodore Vail. Vail, a former Post Office manager, understood large
organizations and had an innate feeling for the nature of large-scale
communications. Vail quickly saw to it that AT&T seized the
technological edge once again. The Pupin and Campbell "loading coil,"
and the deForest "audion," are both extinct technology today, but in
1913 they gave Vail's company the best LONG-DISTANCE lines ever built.
By controlling long-distance--the links between, and over, and above
the smaller local phone companies--AT&T swiftly gained the whip-hand
over them, and was soon devouring them right and left.
Vail plowed the profits back into research and development, starting
the Bell tradition of huge-scale and brilliant industrial research.
Technically and financially, AT&T gradually steamrollered the
opposition. Independent telephone companies never became entirely
extinct, and hundreds of them flourish today. But Vail's AT&T became
the supreme communications company. At one point, Vail's AT&T bought
Western Union itself, the very company that had derided Bell's
telephone as a "toy." Vail thoroughly reformed Western Union's
hidebound business along his modern principles; but when the federal
government grew anxious at this centralization of power, Vail politely
gave Western Union back.
This centralizing process was not unique. Very similar events had
happened in American steel, oil, and railroads. But AT&T, unlike the
other companies, was to remain supreme. The monopoly robber-barons of
those other industries were humbled and shattered by government
trust-busting.
Vail, the former Post Office official, was quite willing to accommodate
the US government; in fact he would forge an active alliance with it.
AT&T would become almost a wing of the American government, almost
another Post Office--though not quite. AT&T would willingly submit to
federal re
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