On this day in economic and business history…
AT&T Inc. (NYSE:T) began on July 9, 1877 as Bell Telephone Company in Boston, Mass. It was the first telephone company in the world, established only eight years after the United States had finally connected East and West with the Transcontinental Railroad. A year earlier, the country of 38 states and 48 million people had celebrated its hard-won centennial — and Alexander Graham Bell had earned the first telephone patent in the world, three days before he successfully tested his telephone for the first time. This was the patent that would help build one of the greatest communications empires the world has ever seen.
Prominent Americans began installing those newfangled “telephone” doodads shortly after Bell Telephone’s founding — in 1877, both Mark Twain and President Rutherford B. Hayes had telephones installed at their homes. The White House’s first telephone stood ready outside of the Oval Office, and it would be more than half a century before it would be installed in the Oval Office itself. A year later, the first phone books (phone pamphlets, really, as so few people actually had telephones) were printed out, and the first switchboards went into operation.
By 1880, already serving roughly 49,000 lines, Bell Telephone began its transformation into the Bell System by merging with other Bell companies into American Bell. By 1885, the company’s rapid growth necessitated the creation of a subsidiary to build out and operate long-distance lines — the original American Telephone and Telegraph. AT&T Inc. (NYSE:T) grew to surpass its parent and would become the parent by acquiring American Bell’s assets shortly before the 20th century began. By this point the Bell System was serving more than half a million telephone lines, and its growth only got faster from then on. By 1910, 5.8 million homes and businesses had phones connected through Bell switchboards. In 1915, Alexander Graham Bell himself participated in the first transcontinental telephone call at the ripe (but highly productive) age of 68. AT&T Inc. (NYSE:T) had established itself as the only viable long-distance telephone company in the country, and from then on it was effectively a monopoly.
A year after completing its transcontinental line, AT&T Inc. (NYSE:T) joined the Dow Jones Industrial Average (Dow Jones Indices:.DJI). AT&T was removed in 1928 in favor of several bubbly “tech” companies near the height of the Roaring ’20s (this was also the move that expanded the index from 20 to 30 components), but it returned to the index in 1939, where AT&T Inc. (NYSE:T) (as well as its post-divestiture Baby Bells) has remained to the present day. When AT&T Inc. (NYSE:T) began, it had a handful of customers. Today, there are more mobile phones in use than there are people alive in the world.