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Art. 6.—THE AMERICAN TELEPHONE AND ITS LESSON. 1. Annual Reports of the Directors of the American
Telephone and Telegraph Co. New York, 1902–1921. 2. Report from the Select Committee on Telephone
Charges and Minutes of Evidence (247). London: H.M.
Stationery Office, 1920. 3. The History of the Telephone. By Herbert N. Casson.
Ninth edition. Chicago, 1917. ONLY those who have been in the United States can realise how vastly superior the American telephone service is to the English and how much our industries suffer owing to the backwardness of our system. It has been asserted that the English telephone is as efficient as the American, and that it is cheaper. Let us study the position and see what we can learn from America.
America's predominance in the telephone world is absolutely overwhelming. On Jan. 1, 1919, the United States and the United Kingdom compared as follows with regard to their telephone outfit:
Percentage of Telephones per
telephones of the hundred of telephones.
population. United States 12,077,637 64.96 per cent. 114 United Kingdom 854,045 4.59
1.9 Since Jan. 1, 1919, the number of telephones has increased by more than 1,000,000 in the Uuited States, while only about 100,000 have been added to the telephones of this country. At present the United States have fully two-thirds of the world's telephones. During the year 1920 806,188 were installed in the Republic, a number almost equal to the total in the British Isles. The City of New York alone has as many telephones as the whole of the United Kingdom. As regards telephones England is inferior, not only to the United States, but also to many other countries. This appears from the following figures :
Number of telephones per 100 inhabitants, United States 11:4 Australia
4.0 Canada . 8:1 Switzerland
3:0 Denmark 7:3 Germany
2:3 New Zealand 6'5 Great Britain
6.4 Netherlands Norway 4.5 Argentina
America's superiority is particularly noteworthy if we allow for the difficulties under which that country suffers. In the large cities of the Republic the telephone problem is similar to that of London, Glasgow, and other English towns. In the densely populated industrial sections of the United States the position is very similar to that in Lancashire and Yorkshire. However, in addition to supplying a vast number of telephones within relatively narrow areas, the American telephone engineers have to overcome gigantic distances. Telephone wires and cables have been taken through the extensive deserts and across the gigantic mountain ranges of the American continent; and the telephone poles are exposed not only to the severest wind and weather, but also to attacks by savages, ants, bears, etc. Compared with the problems to be solved in the United States, those existing in Great Britain are trifling.
It should not be thought that the American telephone system consists of a number of highly organised telephone nets in the more advanced States which are connected by long-distance lines. The telephone is practically universal in the Republic. Millions of farmers possess that time-and-labour-saving convenience.
There are more than 3,000,000 subscribers within the agricultural area. The farmers can easily speak with most of their neighbours over the wire. They are in constant communication with the towns where they carry on business, and they can call up their labourers in a few seconds. Very few English farmers possess a telephone.
It is difficult to visualise the American telephone system because the figures are so vast that they stagger the imagination. At the end of 1920 the United States had 12,601,935 telephones. There was, therefore, a telephone to every nine people. In the construction of that gigantic system 25,377,404 miles of wire were used. In order to protect the wire against damage and disturbance 61.8 per cent. was laid in underground conduits. These conduits would girdle the earth twice at the Equator.
The American telephone stands under private control. The service is dominated by the American Telephone and Telegraph Company, shortly called the Bell Company after the inventor. It possesses virtually a monopoly. Of the 12,601,935 telephones of the Republic 8,333,979
were owned by the numerous companies which have been united in the Bell System, while the remaining 4,267,956 telephones were owned by independent companies connected with the Bell System, which work under sub-licence or connexion contract of that great enterprise. At the end of 1920 the Bell Company had a capital of $1,180,847,115, or of about 300,000,0001. at the present rate of exchange. Owing to its cautious and conservative policy it had then an accumulated reserve and surplus of $444,039,203, or of more than 100,000,0001. The assets of the company stood in the books at $1,634,249,533, a sum equivalent to about 400,000,0001. However, the value of the property vastly exceeds this gigantic capital. In 1920 the total income of the company came to $149,442,115. Vast sums have been applied every year to improvements and extensions. During the last twenty years additions to the value of $1,182,280,000 were made to the plant. The interest paid on the ordinary shares has risen of late years from 7 per cent. to 9 per cent. The vastness of the undertaking may be gauged by the fact that the Bell Company has an army of 231,316 employees.
In the beginning the United States had numerous independent companies. Gradually these were amalgamated with the Bell Company by agreements, purchase and exchange of shares, etc. About 10,000 companies have thus been united by the great Bell Company, which serves as a financial and intellectual centre to all the local organisations that enjoy full self-government in all local matters. Among the enterprises controlled by the Bell Company is the Western Electric Company, a giant concern which manufactures electrical apparatus. It is by far the largest undertaking of its kind in the world, and has branches in Antwerp, London, Berlin, Milan, Vienna, Petrograd, Tokio, Sydney, Montreal, Johannesburg, Buenos Ayres, and Budapest.
One of the most remarkable features of the American Telephone and Telegraph Company and of the Western Electric Company which it controls is the magnificent research department which serves both concerns. That department is unique in the world. The annual report of the American Telephone and Telegraph Company for 1920 states with regard to its activities :
'In this department, including the laboratories at the Western Electric Company, 2800 employees are engaged exclusively in research and the development and improvement of telephone and telegraph apparatus and materials and methods. Of these, 1100 are engineers, chemists, physicists, and other scientists, among whom are graduates of more than 100 American colleges and universities. The remainder are laboratory assistants, draftsmen, stenographers, clerks, model-makers, and administrative personnel. At the close of the year, upwards of 2500 research and development projects were in hand-all these calculated to improve the service which the associated companies are rendering to the public or to make it more economical.
During the year hundreds of new patents relating to the telephone and telegraph, issued in various countries, have been examined and studied; the latest discoveries in science have been followed with care by our scientific staff; and over 1000 United States patents relating to telephony and telegraphy have been applied for by, or issued to, or acquired for the use of, this Company. Not only has attention been given to fundamental improvements in transmission and in apparatus and materials, but minute care and study have been devoted to improvements in the thousands of diversified parts which are required for the most effective and economical operation of the Bell System. In the magnitude of its operations, the number of its personnel, and in the size and equipment of its laboratories, this research and development organisation far exceeds that maintained by the telephone and telegraph administration of any government or by any other corporation engaged in similar or related work.'
The facts given explain why the United States are far in advance of all other countries in telephonic science. The vastness of the American research organisation ensures constant progress on the part of the Bell Company by its own inventors and engineers. Besides, the paramount importance of the American Telephone and Telegraph Company and its vast wealth cause foreign inventors to take their inventions in the first place to America. The extraordinary alertness of the Bell Company and its energy in promoting progress will be seen from its yearly reports. For instance, we read in the one published in 1918:
“There is no more important part of the telephone system than the transmitter and the receiver and their associated
apparatus located at the subscriber's station. During the past ten years over 1000 changes have been made in the design and materials of the sub-station equipment, each of which has made for improved transmission or better and more dependable service, and, as far as is consistent with these, for reduced costs. During the last decade we have made many advances in all phases of telephone switchboard development. In switchboards we have devised during the past ten years over 30,000 new arrangements, each of which has resulted in improved service, lower costs, or both.
• The Engineering Department has given advice to the associated companies on all major projects involving new building construction and new switchboards to be located therein, the total first cost of which is over $100,000,000. Thousands of other matters pertaining to buildings and switchboards have been studied and suitable advice given in each case.
In addition to a large number of fundamental plans for small places, which have been prepared by the various associated companies, following the methods and advice of the Engineering Department, this Department has co-operated actively in making new complete fundamental plans for all large communities during the last ten years. These plans combined involve an increased development, fifteen years hence, of about 6,000,000 stations. The total additional plant investment represented by these plans, furthermore, will be more than $600,000,000.'
In England and in Europe in general the telephone is the luxury of the well-to-do. In the United States it is a necessity in universal use. When a factory builds a number of houses for its workers, it instals in each a telephone as a matter of course. It has often been asserted that the telephone is dearer in America than in England. An exact comparison of rates cannot be given because these vary in every American town. Every local company belonging to the Bell System charges the rates which it thinks suitable. In trying to discover whether the telephone is cheaper in England or America we cannot mechanically compare the payments made. We must allow for the difference in money standards in the two countries. The mere fact that even poor factory workers and labourers have the telephone shows that it is far cheaper in the United States than in England, where many middle-class people do without it because they find the charges too high.