"(3) No expense is required, either for its operation or repair. It needs no battery and has no complicated machinery. It is unsurpassed for economy and simplicity."The only telephone line in the world at this time was between the Williams' workshop in Boston and the home of Mr. Williams in Somerville.
But in May, 1877, a young man named E. T. Holmes, who was running a burglar-alarm business in Boston, proposed that a few telephones be linked to his wires. He was a friend and customer of Williams, and suggested this plan half in jest and half in earnest. Hubbard was quick to seize this opportunity, and at once lent Holmes a dozen telephones. Without asking permission, Holmes went into six banks and nailed up a telephone in each. Five bankers made no protest, but the sixth indignantly ordered "that playtoy" to be taken out. The other five telephones could be connected by a switch in Holmes's office, and thus was born the first tiny and crude Telephone Exchange. Here it ran for several weeks as a telephone system by day and a burglar-alarm by night. No money was paid by the bankers. The service was given to them as an exhibition and an advertisement.
The little shelf with its five telephones was no more like the marvellous exchanges of to-day than a canoe is like a Cunarder, but it was unquestionably the first place where several telephone wires came together and could be united.
Soon afterwards, Holmes took his telephones out of the banks, and started a real telephone business among the express companies of Boston.
But by this time several exchanges had been opened for ordinary business, in New Haven, Bridgeport, New York, and Philadelphia.
Also, a man from Michigan had arrived, with the hardihood to ask for a State agency--George W. Balch, of Detroit. He was so welcome that Hubbard joyfully gave him everything he asked --a perpetual right to the whole State of Michigan.
Balch was not required to pay a cent in advance, except his railway fare, and before he was many years older he had sold his lease for a handsome fortune of a quarter of a million dollars, honestly earned by his initiative and enterprise.
By August, when Bell's patent was sixteen months old, there were 778 telephones in use.
This looked like success to the optimistic Hubbard.
He decided that the time had come to organize the business, so he created a simple agreement which he called the "Bell Telephone Association." This agreement gave Bell, Hubbard and Sanders a three-tenths interest apiece in the patents, and Watson one-tenth. THERE WASNO CAPITAL. There was none to be had.
The four men had at this time an absolute monopoly of the telephone business; and everybody else was quite willing that they should have it.
The only man who had money and dared to stake it on the future of the telephone was Thomas Sanders, and he did this not mainly for business reasons. Both he and Hubbard were attached to Bell primarily by sentiment, as Bell had removed the blight of dumbness from Sanders's little son, and was soon to marry Hubbard's daughter.
Also, Sanders had no expectation, at first, that so much money would be needed. He was not rich. His entire business, which was that of cutting out soles for shoe manufacturers, was not at any time worth more than thirty-five thousand dollars. Yet, from 1874 to 1878, he had advanced nine-tenths of the money that was spent on the telephone. He had paid Bell's room-rent, and Watson's wages, and Williams's expenses, and the cost of the exhibit at the Centennial.
The first five thousand telephones, and more, were made with his money. And so many long, expensive months dragged by before any relief came to Sanders, that he was compelled, much against his will and his business judgment, to stretch his credit within an inch of the breaking-point to help Bell and the telephone.
Desperately he signed note after note until he faced a total of one hundred and ten thousand dollars. If the new "scientific toy"succeeded, which he often doubted, he would be the richest citizen in Haverhill; and if it failed, which he sorely feared, he would be a bankrupt.
A disheartening series of rebuffs slowly forced the truth in upon Sanders's mind that the business world refused to accept the telephone as an article of commerce. It was a toy, a plaything, a scientific wonder, but not a necessity to be bought and used for ordinary purposes by ordinary people. Capitalists treated it exactly as they treated the Atlantic Cable project when Cyrus Field visited Boston in 1862. They admired and marvelled; but not a man subscribed a dollar. Also, Sanders very soon learned that it was a most unpropitious time for the setting afloat of a new enterprise. It was a period of turmoil and suspicion. What with the Jay Cooke failure, the Hayes-Tilden deadlock, and the bursting of a hundred railroad bubbles, there was very little in the news of the day to encourage investors.
It was impossible for Sanders, or Bell, or Hubbard, to prepare any definite plan. No matter what the plan might have been, they had no money to put it through. They believed that they had something new and marvellous, which some one, somewhere, would be willing to buy.
Until this good genie should arrive, they could do no more than flounder ahead, and take whatever business was the nearest and the cheapest. So while Bell, in eloquent rhapsodies, painted word-pictures of a universal telephone service to applauding audiences, Sanders and Hubbard were leasing telephones two by two, to business men who previously had been using the private lines of the Western Union Telegraph Company.
