was the original inventor.

(2) To admit that his patents were valid.

(3) To retire from the telephone business.

The Bell Company, in return for this surrender, agreed--

(1) To buy the Western Union telephone system.

(2) To pay the Western Union a royalty of twenty per cent on all
telephone rentals.

(3) To keep out of the telegraph business.

This agreement, which was to remain in force for seventeen years, was a
master-stroke of diplomacy on the part of the Bell Company. It was the
Magna Charta of the telephone. It transformed a giant competitor into
a friend. It added to the Bell System fifty-six thousand telephones in
fifty-five cities. And it swung the valiant little company up to such a
pinnacle of prosperity that its stock went skyrocketing until it touched
one thousand dollars a share.

The Western Union had lost its case, for several very simple reasons:
It had tried to operate a telephone system on telegraphic lines, a
plan that has invariably been unsuccessful, it had a low idea of the
possibilities of the telephone business; and its already busy agents had
little time or knowledge or enthusiasm to give to the new enterprise.
With all its power, it found itself outfought by this compact body of
picked men, who were young, zealous, well-handled, and protected by a
most invulnerable patent.

The Bell Telephone now took its place with the Telegraph, the Railroad,
the Steamboat, the Harvester, and the other necessities of a civilized
country. Its pioneer days were over. There was no more ridicule and
incredulity. Every one knew that the Bell people had whipped the
Western Union, and hastened to join in the grand Te Deum of applause.
Within five months from the signing of the agreement, there had to be
a reorganization; and the American Bell Telephone Company was created,
with six million dollars capital. In the following year, 1881, twelve
hundred new towns and cities were marked on the telephone map, and
the first dividends were paid--$178,500. And in 1882 there came such
a telephone boom that the Bell System was multiplied by two, with more
than a million dollars of gross earnings.

At this point all the earliest pioneers of the telephone, except Vail,
pass out of its history. Thomas Sanders sold his stock for somewhat less
than a million dollars, and presently lost most of it in a Colorado gold
mine. His mother, who had been so good a friend to Bell, had her fortune
doubled. Gardiner G. Hu