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    [Illustration: _On Main Street, U. S. A., the telephone company is a
    home town institution, run by local people. Linking together home
    town communities all over America, the telephone makes a
    neighborhood of the nation._]




                        The Telephone in America


    [Illustration: Typical city street scene]

                         Bell Telephone System

    [Illustration: _This radio-relay station on Buckhorn Mountain in
    Colorado is one of 107 in the Bell System’s transcontinental
    microwave system. Flashed from station to station, telephone calls
    and television programs first spanned the continent by air in
    1951._]




                        The Telephone in America


The telephone was born in America and has reached its highest
development in this country. Since 1876, when Alexander Graham Bell
first talked successfully over his primitive telephone, a network of
voice highways has grown up throughout the nation, linking more than
fifty-four million telephones. About four-fifths of these are owned by
the Bell System, which is a group of closely associated telephone
companies, a research and development organization and a manufacturing
and supply company, all headed by the American Telephone and Telegraph
Company. The other telephones are owned and operated by some 5,000
independent telephone companies and about 20,000 rural or farmer lines
outside the Bell System but connecting with it.

Bell telephone service is home town service. Linked with thousands of
other home town services, it makes a neighborhood of the nation. The
company that furnishes your service is part of your community. Its
operators, installers and other representatives are your neighbors. Some
may be your friends or relatives. Its departments are managed by your
fellow citizens—men and women who have come up through the ranks.

Nine out of every ten telephone calls handled by these home town people
are local calls. The tenth call may go across the continent or across
the ocean. But wherever the calls go, they travel by means of a
marvelously ordered world of wires, cables, switchboards, dial
equipment, radio and above all, with the help of people working together
to serve the public.

This booklet gives you a personal glimpse of that world. It tells the
story of the Bell System, but it should be remembered that much that is
said here applies also to the other telephone companies that share with
the Bell System the privilege and the responsibility of providing
telephone service for the people of America.




                         Behind Your Telephone


    [Illustration: Bakelite telephone]

When you pick up your telephone, you have at your fingertips a
communication system that is mainly local in its operations. Probably
you will use it most of the time to talk to people in or near your own
community, but wherever you wish, it can carry your voice across the
continent or even across the seas to other countries. The telephone
industry in the United States now includes:

■ Telephones serving homes and businesses in 75,000 cities and towns,
and more than 3,000,000 telephones in rural areas.

■ A network of wire linking these telephones. About 95 per cent of this
wire is in sturdy cables, and almost three-fifths of the cable is
underground.

■ More than 25,000 central offices in which telephones are connected by
means of switching equipment. Over 9,500 of these offices are operated
by Bell System companies.

■ Literally billions of small parts—relays, condensers, resistors,
vacuum tubes each carefully designed and finely fashioned so that it
will work in harmony with all other parts, anywhere in the country.

■ Radio-telephone links to automobiles, trains, ships, airplanes, and
countries overseas.

■ A growing system of radio relay routes used for transmitting both long
distance telephone conversations and television programs.

■ Highly skilled telephone people living and working in nearly every
American community. The Bell System alone employs about 700,000 men and
women, who are busy planning, designing, manufacturing, improving,
building, operating—all working to fulfill the traditional telephone
policy of providing the best possible service at the lowest possible
cost.


In the telephone office

Every time you make a telephone call—either by dialing or by giving the
operator the number—you first reach the _telephone central office_. This
nerve center of your local telephone system contains equipment through
which your telephone can be connected to any other telephone you wish to
reach.

In a small community there may be only one central office. In large
cities there are many of them, all joined by trunk lines. The term
_telephone exchange_ means the whole local area served by one or more
central offices.

Over four-fifths of all Bell System telephones are dial-operated.
Intricate machinery in the central office makes connections by obeying
the electrical signals that you send over your line as you turn the dial
on your telephone.

Before you dial, the equipment in the central office tells you it is
ready to serve you by transmitting a “hum-m-m-m” over your line. You
should hear this _dial tone_ before you start to dial. The dial tone
serves the same purpose as the operator’s “Number, please!”

    [Illustration: _Telephone company buildings are built to harmonize
    with surroundings in communities where they are located. A central
    office in California._]

    [Illustration: _Another one in Connecticut._]

    [Illustration: _Testing equipment in a dial central office in a
    large city._]

Telephones that are not dial-operated are connected with _manual_
central offices, where operators seated at switchboards make the
connections by hand. Switchboards differ greatly in size. In small
villages one or two operators handle all calls. In large cities the
volume of calls requires hundreds of operators working at large multiple
switchboards. The term _multiple_ comes from the fact that the end of
each subscriber’s telephone line is duplicated or multipled at intervals
throughout the switchboard. For example, a switchboard serving 6,000
customers might have positions for 20 operators. The board would be
multipled so that each operator answering a call from any of the group
of customers assigned to her, could reach his line and connect it with
any one of the 5,999 others.

Written as well as spoken messages are handled through switchboards.
Teletypewriter Exchange Service (TWX) does for the written word what the
telephone does for the spoken word. This service transmits typewritten
messages over any distance through connections made by operators at
switchboards. It is especially valuable for business firms; there are
now some 37,000 listings in the TWX directory.

    [Illustration: Typical traffic curve

    _City telephones are generally busiest between 9 and 11 A.M., when
    business is in full swing. There is another business peak between 4
    and 5 P.M. Residence telephones are usually busiest about 7 P.M._]

    [Illustration: _Operators, who answer when you dial “O” (operator),
    will lend a hand if you need help in calling from a dial
    telephone._]

The courteous, helpful service rendered by telephone operators has
become a traditional part of American life. Even in communities that
have dial service, “the voice with a smile” is on the job to handle long
distance calls, to provide telephone numbers not included in the
directory, and to give any other help that customers may desire.

Ever since World War II, the Bell companies have kept on installing new
equipment in great quantities to meet the largest demand ever
experienced for new telephone service.


Where the wires go

The arrangement of wires that connects your telephone with the central
office and with the telephones of other subscribers is something like a
tree. Just as twigs lead to branches, branches to limbs, and limbs to
the trunk, so individual telephone wires come together in small
_distribution cables_. In turn, these cables come together in _feeder
cables_ that increase in size as they approach the central office. Often
as many as 2,121 pairs of fine copper wires enter the telephone office
in main feeder cables about as big around as a baseball bat.

    [Illustration: _Splicers “cutting in” wires in a new cable, below
    the street in manhole._]

    [Illustration: _Bell telephone installer connects drop wire to new
    subscriber’s home._]

Most wire in city telephone cables lies underground in tile conduits and
comes into the telephone office through a _cable vault_ in the basement.
If the city has more than one central office, _trunk cables_
interconnect the offices.

At each telephone office the cables run to the _terminal room_, where
their hundreds or thousands of pairs of wires fan out to _terminal
blocks_ on one side of a large _distributing frame_. Other wires run
from the opposite side of the distributing frame to the switchboard or
dial equipment. Cross-connections on the distributing frame bring each
telephone user’s line to its proper terminal in the switching equipment.

A telephone office is dependent on electric power, both direct and
alternating. The direct current comes from storage batteries. These are
kept charged by generators driven by the regular current supplied by the
power company, which also provides the electricity needed for other
purposes. Standby generators, usually driven by gasoline or diesel
engines, are provided for emergencies in most large offices and in many
smaller ones.

Ringing machines generate alternating current to operate your telephone
bell and provide the various signals you hear in your telephone
receiver. These machines are installed in pairs so that there will be no
interruption of telephone service should one machine fail to operate
properly.

    [Illustration: _Technicians check for trouble at a desk in a central
    office. Preventive maintenance, outside as well as inside telephone
    offices, helps provide good service._]

Preventive maintenance, both inside and outside telephone offices, is
vital in furnishing dependable, satisfactory telephone service.
Telephone men periodically check the condition of telephone plant. Using
steadily improving techniques, they often discover faults or weaknesses
and have them corrected before the customer is aware of them.

Test desks, where testmen also track down troubles in the telephone
plant, are essential to giving good service. These are special
switchboards with equipment that enables the testman to diagnose the
cause and location of trouble on a customer’s line.


Teamwork to serve you well

In addition to good equipment kept in good condition all the time, good
telephone service depends on capable people who are well trained and
skilled in their jobs.

    [Illustration: _Telephone people strive to make the telephone
    company a friendly, helpful institution. This young lady is one of
    the courteous service representatives who assist the customers._]

Not only must these many people perform many different jobs to give you
good service but they must work together as a team. In the Plant
department, linemen, installers, cable splicers, repairmen and others
build and maintain the plant so that the operators in the Traffic
department can put your calls through as swiftly as possible. Similarly,
the members of the other departments of the company do their work in
such a way that they help others do theirs.

    [Illustration: _Good telephone service depends on teamwork of many
    people working together at different jobs. These girls are typing
    telephone bills in the Accounting department of a Bell telephone
    company._]

In every Bell telephone company there are staff people who are
specialists in various phases of the business. They assist the
front-line forces in meeting day-to-day problems. They find better, more
efficient ways of doing things.

The purpose of all is to serve you well and with unfailing courtesy.
Telephone people have a genuine desire to make the company a friendly
and helpful institution. Because telephone men and women are good
citizens of your community, they take pride in conducting the affairs of
the company so that the public will think of it, too, as a good citizen.

A large proportion of the people in the Bell System make a career of
telephone work. More than 245,000 of them have been in the business over
ten years. Wages are good, employment steady, and working conditions are
pleasant. The Bell companies’ Benefit and Pension Plans, among the
oldest and best in industry, assist employees and their families in
meeting the problems that arise from sickness, accident, old age and
death. Opportunity to advance in the organization is open to all on the
basis of individual ability. Supervisory and management positions are
filled from the ranks.

    [Illustration: THE BELL TELEPHONE SYSTEM

    The principal telephone subsidiaries of American Telephone and
    Telegraph Company serve generally the areas shown. The Southern New
    England and Cincinnati and Suburban are associated but
    non-controlled companies. In nearly all areas other telephone
    companies operate and connect with Bell System lines.]

  THE PACIFIC TEL. & TEL. CO.
  BELL TEL. CO. OF NEVADA
  THE MOUNTAIN STATES TEL. & TEL CO.
  THE SOUTHERN NEW ENGLAND TEL. CO.
  NEW JERSEY BELL TEL. CO.
  THE DIAMOND STATE TEL. CO.
  THE CINCINNATI AND SUBURBAN BELL TEL. CO.
  THE CHES. & POT. TEL. CO. (D.C.)
  THE CHES. & POT. TEL. CO. OF BALTIMORE CITY
  THE CHES. & POT. TEL. CO. OF VIRGINIA
  THE CHES. & POT. TEL. CO. OF WEST VIRGINIA




                         Organized to Serve You


As a telephone user, you want to be able to count on your telephone, to
be able to call other telephone users any time, anywhere. You expect
reliable service at low cost. The kind of service you expect depends on
teamwork—among telephone people in your local company, and among the
separate companies that make up the Bell System. That is the way the
Bell System is organized to serve you. This is what it contains:

■ A group of operating telephone companies, each known as an Associated
Company and each serving its particular territory.

■ One of the finest research and development organizations in the world,
Bell Telephone Laboratories. Its work consists of research, development
and design in the communications field. It creates apparatus that
improves telephone service, makes it more efficient, and keeps its cost
low.

■ A supply organization, the Western Electric Company. It manufactures
or purchases equipment and supplies for the operating companies on a
more economical basis than the individual companies could do for
themselves. It distributes equipment and supplies to the various
companies. It installs equipment in telephone central offices.

■ A headquarters organization, the American Telephone and Telegraph
Company. AT&T functions as a general staff for the Bell System,
co-ordinating the enterprise and assisting the operating companies. It
owns most of the stock of most of the operating companies. It owns
nearly all the stock of the Western Electric Company, and it shares with
Western Electric the ownership of the Bell Laboratories. In conjunction
with the Associated Companies, the AT&T Long Lines Department furnishes
long distance telephone service and other communication services over
its lines and radio relay channels.

    [Illustration: _Principal elements of the Bell System_]




                AMERICAN TELEPHONE AND TELEGRAPH COMPANY

        SERVICES TO TELEPHONE COMPANIES UNDER LICENSE CONTRACTS
                                  AND
                    OPERATION OF LONG-DISTANCE LINES

   PROVIDING INTERCONNECTION BETWEEN AND THROUGH TERRITORIES OF THOSE
                               COMPANIES

                        WESTERN ELECTRIC COMPANY
MANUFACTURING, PURCHASING, DISTRIBUTING AND CENTRAL OFFICE INSTALLATION
                          FOR THE BELL SYSTEM

                      BELL TELEPHONE LABORATORIES
  RESEARCH AND DEVELOPMENT WORK FOR THE BELL SYSTEM (INCLUDING WESTERN
                           ELECTRIC COMPANY)

          SUBSIDIARY AND OTHER ASSOCIATED TELEPHONE COMPANIES
   PROVIDE TELEPHONE SERVICES AND FACILITIES WITHIN THEIR RESPECTIVE
    TERRITORIES WITH THE AID OF SERVICES RECEIVED FROM THE AMERICAN
        TELEPHONE AND TELEGRAPH COMPANY UNDER LICENSE CONTRACTS

The organization of the Bell System has grown up in a natural way over a
period of many years. The American Bell Telephone Company, predecessor
of AT&T, owned the original Bell patents. It licensed local companies to
rent Bell telephones to their subscribers. Ownership of the operating
companies by the headquarters organization came about because of their
need to finance expanding service, and as a means of providing the best
service at lowest cost. AT&T bought Western Electric in 1882 because it
was the best manufacturer of telephone apparatus and because a
dependable source of supplies was essential. The Bell Laboratories
stemmed from the shop where Alexander Graham Bell made the first
telephone. The work of the Laboratories is a continuation, on a much
larger scale, of early efforts to discover improvements in the art of
telephony.

    [Illustration: _Motor launches pull first segment of the new
    transatlantic telephone cable toward the Newfoundland shore from
    HMTS_ Monarch, _world’s largest cable ship. The new underseas cable
    will link this continent with Great Britain._]


Long Lines—When you call across the land

Within its own territory your local telephone company provides
inter-city service. But when you make a call that crosses the
territories of various Bell companies, you are served also by the
facilities of the Long Lines Department. This organization is
responsible as well for overseas telephone service to points in
countries abroad.

More than 337,000,000 conversations a year are handled over Long Lines
facilities. To handle this volume of conversations and its various other
services, Long Lines requires:

■ About 27,000 highly trained telephone employees, including operators,
engineers, maintenance men, construction forces, Commercial and
Accounting people in 40 states and the District of Columbia.

■ Telephone central office forces in 233 cities and towns.

■ Telephone equipment and plant, including almost 2,400 buildings, in
all but one state.

■ About 27,000,000 miles of talking circuits.

Nine years after the telephone was invented, when the farthest one could
talk was from New York to Boston, AT&T announced in its charter its plan
to connect every place in the country “by cable and other appropriate
means with the rest of the world.” Long distance lines reached Chicago
in 1892. Gradually, telephone scientists solved the technical
difficulties of transmitting speech over still greater distances. By
1915, Bell engineers had developed vacuum tube amplifiers to step-up
fading voice currents, and the human voice spanned the miles between New
York and San Francisco.

    [Illustration: _Calls to overseas points are handled by operators at
    three terminals. This Long Lines operator at the overseas
    switchboard in New York City is putting through a call to Paris._]


When you call across the sea

In that same year, telephone engineers also made history by establishing
experimental radio-telephone connections across the Atlantic between
Arlington, Va., near Washington. D. C., to the Eiffel Tower in Paris, as
well as to the Hawaiian Islands and Panama.

Although World War I delayed the development of overseas service, years
of further experimenting and perfecting led, in 1927, to the opening of
regular overseas telephone service between the United States and
England. Since then service has been extended to more than 100 countries
and territories overseas, and it is possible now to reach some 96% of
the world’s telephones from any telephone in the United States. Today,
overseas conversations take place at the rate of over 1,000,000 a year.
Overseas centers in New York, Oakland and Miami furnish the overseas
radiotelephone service, handling calls in much the same way as other
long distance calls.

    [Illustration: _A Bell Laboratories and a Long Lines engineer check
    the quality of a full-color picture at a special monitoring position
    in one of the Bell System television network control centers._]

Now, to handle more calls and for greater dependability in telephoning
between this continent and Great Britain, the first transatlantic cable
is being built. Another cable is being built to Alaska, which will be
able to carry 36 conversations at a time, and will be immune to
atmospheric disturbances that sometimes affect radiotelephone circuits.
There is also a new method of radio transmission, called
“over-the-horizon,” soon to be introduced between Florida and Cuba. This
will provide needed additional telephone channels and will also open up
the possibility of television service over the route.


Radio and television networks

Not everybody realizes that network radio programs go over telephone
channels from point of origin to the local radio stations that actually
broadcast them. The Bell System’s experience in serving radio networks
dates from 1923, when network broadcasting began. Today, in order to
link the nation’s radio stations, Long Lines operates about 200,000
miles of program transmission circuits. And within their own
territories, the operating telephone companies, too, furnish some
program circuits.

Bell System scientists pioneered also in sending television images from
one place to another, by both wire and radio. The years of experience in
serving radio networks have been invaluable in solving the problems of
TV network transmission. As of July, 1955, the System linked about 365
TV stations in about 240 American cities. To keep pace with the latest
developments, the nationwide TV network has been equipped for color
programs, which are available to over 230 stations in about 130 cities.

    [Illustration: BELL SYSTEM TELEVISION NETWORK ROUTES JULY 1, 1955]

  Color and Monochrome Available To Cities On These Routes
  Routes Equipped For Monochrome Only
  Planned


Other “Custom-tailored” services

Long Lines and the operating companies also provide extensive private
line services—that is, service for customers who have a large enough
volume of communications between two or more points to need facilities
for their exclusive use, tailored to their individual requirements. The
private line services are provided by means of both wire and radio, for
a specified period of time and usually on a recurring basis. Many
American industries, the press and governmental agencies use these
services, which include telephone, teletypewriter, teletypesetter, radio
and television network transmission, facsimile and telephotograph.

_Teletypewriter_ service transmits typewritten messages from one point
to another, whether the sending and receiving machines are in the same
building or across the continent. _Teletypesetter_ service, by means of
electrical impulses sent over Bell System circuits, makes it possible to
set type for newspaper or other publication use speedily and from a
distance. _Facsimile_ service reproduces documents, drawings and maps at
the distant end and _telephotograph_ service does the same for pictures.


“General Staff” services benefit all

Serving the local communities in their territories is the responsibility
of the operating companies. There are, however, general problems shared
by all the companies. In order to handle these problems efficiently and
at reasonable cost, the operating companies contract with the AT&T
Company for those things that a centralized organization can do better
and more economically.

This contractual relationship is an outgrowth of the original licensing
arrangement, in which the first telephone companies obtained instruments
for the use of their subscribers. It was founded on the necessities of
the business. It exists today for the same reason.

To meet this responsibility, AT&T is organized to serve the operating
companies in matters of engineering and operation, finance, accounting
and law, and to assist them in other ways that may help them in
conducting their business.

Through AT&T, patent rights covering the results of Bell System research
in communications are made available to the operating companies. It is
the System’s policy also to make licenses under such patents available
to others outside the System on reasonable terms and on a non-exclusive
basis.

    [Illustration: _Placed in service by Long Lines, this teletypewriter
    system is the “nerve center” of a large business having main offices
    located in many states._]

Among the many AT&T staff services to the telephone companies are those
described as “operation and engineering.” These include the entire range
of construction, operation, maintenance, methods and practices. The AT&T
general staff constantly studies new ideas for improved equipment and
practices that may originate anywhere in the System. Promising ideas are
developed and tested, usually in collaboration with the Bell Telephone
Laboratories. Improvements that result are spread over the whole Bell
System.

Besides operation and engineering services, other AT&T groups help the
telephone companies devise better business and office routines. Still
other groups advise the companies on the most efficient methods in
accounting, statistical analyses, public relations and advertising
activities, and in all the many other phases of the telephone business.


Out of the savings of the many

One of AT&T’s most important services to the operating telephone
companies is financial assistance. This is especially true in periods of
rapid growth, like the present. In these times the telephone companies
need vast sums of money for equipment and buildings to expand and
strengthen the nation’s communications network for defense, and to meet
the public demand for telephone service.

The money for improving and expanding telephone service comes from
people in all walks of life. It comes from the savings of the many, not
the wealth of the few. Most of this money is invested in securities of
the AT&T Company, which in turn supplies funds to the operating
companies.

By mid-1955 AT&T was owned by about 1,375,000 people. These owners live
in all parts of the country, in large cities, small towns and rural
areas. They are truly a cross-section of America.

Many AT&T share owners are long-time investors. More than a fourth of
them have owned their AT&T stock ten years or more. And over 60 per cent
of these have increased their investment during those ten years.

About 351,000 of the shareholdings represent two persons—husbands and
wives, mothers and daughters, sisters and brothers—who have invested
savings in their joint names.

Besides the direct owners of AT&T, many other people—such as insurance
company policy holders and bank customers—help indirectly to finance the
business through the AT&T shares held by organizations and trustees. The
largest AT&T shareholder is a nation-wide investment firm that holds
stock for thousands of customers. Among other institutional holders are
some 2,100 churches, 1,100 hospitals and homes, over 1,000 schools and
libraries, over 500 foundations and charities.

    [Illustration: DISTRIBUTION OF A. T. &. T. SHARE OWNERS END OF 1954]

     608,000             WOMEN                Average Holding 29 Shares
     351,000         JOINT ACCOUNT            Average Holding 26 Shares
     297,000              MEN                 Average Holding 38 Shares
      51,000  TRUSTEES AND ORGANIZATIONS     Average Holding 194 Shares

More than 200,000 Bell System employees own AT&T stock purchased under
payroll sayings plans. Many of these, together with other employees, are
now buying shares under the current payroll sayings plan.

Such widespread ownership by investors helps make possible the good
telephone service you get today.


Ideals and aims

The management of the Bell System recognizes its responsibility to treat
fairly _telephone users_, _employees_ and _share owners_. It believes
that the interests of these three great groups of people are linked
closely together.

Management’s aim and responsibility is to see that telephone users get
the most and best possible service. The cost of service must be as low
as may be consistent with good wages and working conditions for
employees and with a reasonable return for share owners on their
investment in the business.

The Bell System believes that the _most and best possible service_ means
telephone service for the nation that, so far as possible, is free from
imperfections, errors or delays—service that enables anyone, anywhere,
to pick up a telephone and talk to anyone else, clearly, quickly, at
reasonable cost.

    [Illustration: _Coaxial cable can simultaneously transmit hundreds
    of telephone conversations and several TV programs._]




                  Research Improves Telephone Service


Telephone research began in 1876 in the Boston attic where Alexander
Graham Bell carried on his first successful experiments on the “electric
speaking telephone.” From Bell’s modest beginning has evolved the Bell
Telephone Laboratories of today, where over 9,000 scientists, engineers,
technicians and auxiliary personnel constantly seek ways to improve
telephone service, widen its usefulness, and keep its cost low.

Some members of the Laboratories are engaged in _basic research_. They
explore the physical sciences—physics, mathematics, chemistry—seeking
basic knowledge that may contribute to better communications.
_Fundamental development_ is the second step in the chain leading toward
manufacture and use. In the third step, groups engaged in _systems
engineering_ plan how the new knowledge and discoveries of research can
be used to create new facilities for telephone service, improve service,
or reduce costs. Final step is the specific _development_ and _design_
of new systems or products. This involves the construction of laboratory
models, trial models, service tests, and preparations for mass
production.

This description is, of course, a highly simplified account of the work
of the Laboratories. The broad functions of research and development
constantly merge. At all times there must be close co-operation among
various groups in the Laboratories, between the Laboratories and the
telephone companies, where models are tried out, and between the
Laboratories and Western Electric, where products are manufactured.

Here is just one example of the way research and development have
extended telephony, improved it, and reduced its cost:

Many years ago, the use of a pair of wires instead of a single, grounded
wire greatly improved transmission and made it possible to talk longer
distances. This increased the demand for service but also increased the
number of wires strung on telephone poles. The large number of wires on
towering poles along city streets began to cast shadows of doubt on the
prospects for further growth. Compact cables had to be developed and a
way found to run them underground. Years of painstaking study and trial
accomplished this. Now some exchange cables contain as many as 2,121
pairs of wire.

This cable evolution illustrates the dollar value of telephone research
and development. The standard cable of 1888 contained 50 pairs of wires
and its installed cost was more than $150 per pair-mile. In 1954,
despite rising costs, underground cable cost in the order of $20 per
pair-mile in place, and much of it was 2,121-pair.


A few milestones in research

Through the years Bell Laboratories has led progress in communications
and electronics. No scientific achievement has had more far-reaching
effects on communications than the Laboratories’ work in the development
of the vacuum tube. Bell scientists were the first to devise a practical
amplifier tube which, placed at intervals in long distance lines,
restored the energy of weakening voice currents, making it possible to
telephone from coast to coast.

The Laboratories was the first to develop automatic equipment that can
“remember” telephone numbers and perform other complicated operations in
the central office.

By means of filtering apparatus, developed by the Laboratories, one high
frequency “carrier” can carry many speech currents at the same time.
Largely because of carrier telephony, the Bell System has been able to
reduce greatly the cost of long distance telephone service.

The Laboratories pioneered the development of coaxial cable and
microwave radio-relay systems. Both can be used to transmit television
programs and hundreds of telephone conversations.

Among the many other achievements of the Laboratories have been
important contributions to the design of computers—the amazing
electronic machines that can work out problems that might otherwise take
months or years of work by mathematicians.

A few years ago, scientists at the Laboratories invented the
_transistor_. This is a radically new device, simple in design and tiny
in size, that performs most of the functions of the vacuum tube and does
other things besides. Its effect on communications technology promises
to be revolutionary.

Early in 1954, the Laboratories announced a device that realizes one of
the ancient dreams of mankind—the Bell Solar Battery, which converts the
sun’s light directly into useful amounts of electricity. Research that
led to the transistor led also to the battery—and to a tiny and durable
switch that one day may handle the automatic switching of your telephone
calls, and other things not yet imagined.


The Laboratories and national defense

The Laboratories makes its services available to the armed forces for
work to which it is uniquely suited. It specializes in military
communications and those instruments of war that depend heavily on
communications and electronics.

In carrying out its military responsibilities, the Laboratories follows
the same time-tested pattern that guides its Bell System activities. Its
military work grows out of _research_, _fundamental development_,
_systems engineering_, and finally specific _development_ and _design_.

    [Illustration: _Bell Telephone Laboratories at Murray Hill, New
    Jersey_]

Reliability and trouble-free operation throughout long life are
objectives of the Laboratories in designing new equipment and products
for the Bell System. The same objectives are also very important in
designing military equipment. Because of this similarity in the two
fields, scientists and engineers in the Laboratories often divide their
working days between Bell System and military problems. Personnel moves
frequently between the two fields of endeavor. Thus the Laboratories’
long experience in the peacetime science of telephony helps strengthen
the nation’s defense—and discoveries that grow out of military
preparedness help strengthen and improve the nations telephone system.

    [Illustration: _“Nike,” one of the new weapons in America’s defense
    arsenal. This guided missile is directed in flight by electronic
    controls designed by Bell Laboratories and made by the Western
    Electric Company._]

    [Illustration: _Scientists responsible for the invention of the Bell
    Solar Battery examine its characteristics at Bell Laboratories._]




                   Service of Manufacture and Supply


The manufacture of reliable, standardized telephone apparatus is a major
responsibility of another Bell System unit, the Western Electric
Company. It supplies to the operating companies telephone equipment of
high quality at reasonable prices.

Western Electric also buys for the operating telephone companies
supplies that it does not itself produce. Since large quantities are
required, this arrangement results in important economies.

Western Electric speeds delivery to the telephone companies of the right
equipment and materials, and the right time, from stocks maintained in
distributing houses from coast to coast.

Also, specially trained western Electric forces install for the Bell
companies most of the complicated central office equipment required to
connect all parts of the telephone system.

Experience has proved the great value of centering these
responsibilities in an organization that works as a unit of the System
toward the same goals as the telephone companies—a service steadily
improving and increasing in value to more and more people.

    [Illustration: _One of many assembly operations in making Bell
    telephones at a Western Electric plant in Indianapolis. One-fifth of
    these sets are now produced in colors._]


Evolution of an Industry

In the first few years after the telephone was invented, six different
manufacturers made telephone apparatus for the Bell companies. Each
produced equipment of different design and quality. It quickly became
apparent that progress depended upon standardized equipment of the best
possible quality.

In 1882, the Bell System purchased the Western Electric Manufacturing
Company. This company had grown out of a partnership formed in 1869 by
Enos M. Barton and Elisha Gray. It had specialized at first in telegraph
and then in telephone equipment. Ownership of Western Electric gave the
System assurance of standardized equipment of high quality, reasonable
prices, and a dependable source of supply.

    [Illustration: _A Western Electric installer, one of the members of
    a nation-wide team, puts the finishing touches on new central office
    switching equipment installed for a Bell telephone company._]

    [Illustration: _High-powered optical apparatus is needed to maintain
    the hair-splitting tolerances that are required in making miniature
    electronic tubes used in communications equipment._]

Growing with the System, Western Electric became an enterprise of
national stature. Its manufacturing operations are principally in
Chicago, Ill., Kearny, N. J., Baltimore, Md., Allentown, Pa., Tonawanda,
N. Y., Indianapolis, Ind., and Winston-Salem, N. C.

In the years since World War II the company’s manufacturing facilities
have undergone an almost continuous modernization and expansion. In
addition to building a number of new factories, the company has rented
or purchased other plants to obtain the manufacturing space required for
the dual job of furnishing equipment needed by the armed forces and
continuing to meet the requirements of the Bell System.


A complex manufacturing job

As manufacturing unit of the Bell System, Western Electric must be ready
at all times to produce over 200,000 different kinds of apparatus and
component parts for telephone equipment. Each year, about 70,000 of
these are required and manufactured. The quantity of each item produced
varies from one to many millions. Mass production methods are used
wherever possible, but the items required in large quantities are very
much in the minority. In a recent year, less than one per cent of the
products manufactured were made in quantities of over 100,000. About 30
per cent were made in quantities of less than 10.

    [Illustration: _Applying lead sheathing to telephone cable._]

    [Illustration: _Each of Western Electric’s 29 distributing houses
    maintains an efficient repair shop where service-worn telephone
    apparatus is reconditioned so that it will give good service once
    again._]

Because telephone equipment must be tailor-made—much of it in small
quantities—it is necessary for the manufacturing and supply unit to have
intimate knowledge of Bell System plant everywhere. And since telephone
plant must give trouble-free service 24 hours a day, telephone equipment
must be of the highest quality and built to exact, uniform standards.
Experience has proved that the design, manufacture and operation of
standard telephone equipment can be accomplished best when the
designers, the makers, and the operating people work closely together on
the same team.


Supplies—when and where needed

Western Electric’s purchasing people constantly study world markets,
prices and potential sources of raw materials and finished products.
They work closely with suppliers that provide equipment and supplies
that Western itself does not make, so that these will meet the Bell
System’s high standards. Western also helps them develop better
production methods.

    [Illustration: _A fingertip view of a “2A” transistor, one model of
    the astonishing electronic device invented by Bell Laboratories and
    now being produced by Western Electric._]

In a recent year Western Electric purchased from 28,000 large and small
suppliers located in over 3,000 towns and cities in all the 48 states.
Purchases included, in addition to all kinds of raw materials, finished
products ranging from pencils and pen points to automobiles and
telephone poles.

Western Electric operates 29 distributing houses through which materials
flow to the Bell companies. Each house is set up to meet the supplies
requirements of the telephone company it serves. It works closely with
the telephone organization to deliver the goods promptly and
efficiently. Each distributing house maintains a repair shop to
recondition service-worn telephone apparatus so that it will give good
service again, or, if not economical to repair, to dismantle it for
salvage. In a recent year the repair shops reconditioned over
$155,000,000 worth of used equipment for the telephone companies,
including 5,400,000 telephones.

Highly trained Western Electric men install central office equipment for
the Bell telephone companies. Altogether, Western Electric is able to
supervise all steps in making the equipment ready for use, from purchase
of raw materials to finished installation. This assures the telephone
companies that new apparatus will give the best possible service.


A national asset

Time and again the unified service of supply within the Bell System has
proved to be a national asset. After hurricanes, floods and fires, when
telephone company people go “all out” to restore service, Western
Electric swings into action to deliver the needed equipment and
supplies. And this equipment is standardized. It is familiar to all
telephone people and can be installed quickly anywhere.

Western’s productive capacity is ready also in any national defense
emergency. Throughout World War II all of the company’s resources were
devoted to the needs of the United States and its allies for electronic
and communications equipment, including radar, sonar and various types
of radio equipment.

In the present national defense program, Western is not only helping to
expand and improve America’s telephone system, but is using experience
gained in its regular telephone job to supply specialized military
equipment to the armed forces.

After World War II Western Electric produced record-breaking quantities
of equipment to meet America’s telephone needs. It increased its
production tremendously to meet the big demand for telephones, willingly
undertaking the financial risks of a big expansion program so that the
operating companies could serve millions of people faster than otherwise
possible.

Since the end of World War II, prices of manufactured goods of all kinds
have gone up, but Western Electric prices have gone up far less than the
average—as of the end of 1954, they had gone up less than half as much.

Because it works as a unit of the System rather than toward a separate
end of its own. Western Electric plays an essential part in furnishing
Americans with the best telephone service at the lowest possible cost.




                        From Bell to Bell System


    [Illustration: This model of Bell’s first telephone is a duplicate
    of the instrument through which speech sounds were first transmitted
    electronically, 1875.]

The telephone we use today is very different in design from the first
instrument invented by Alexander Graham Bell, but it works on the same
principle. As soon as Bell proved his invention practical, he foresaw it
could link homes with offices, sweep aside the isolation of farms, and
bind together cities and nations with electrically transmitted speech.

Alexander Graham Bell had prepared himself to follow the professional
footsteps of his father and grandfather in the teaching of proper
articulation and the correction of speech defects. He became a teacher
of speech to the deaf. Early in his training, his investigations into
the nature of sound led him to study electricity. It was out of this
work, together with his understanding of the organs of speech and
hearing, that his invention grew.

He attempted to apply sound to telegraphy in a device called the
harmonic telegraph. He hoped it would transmit several Morse messages
tuned at differing levels over the same circuit simultaneously. While he
was working with this device, Bell conceived the principle of the
telephone.

He told his young mechanical assistant, Thomas A. Watson: “If I can get
a mechanism which will make a current of electricity vary in intensity
as the air varies in density when a sound is passing through it, I can
telegraph any sound, even the sound of speech.”


The twang of a reed

This idea was clear in Bell’s mind by the summer of 1871, but he did not
then know how to reduce it to practice. On June 2, 1875, he succeeded in
doing so. In adjoining attic rooms at 109 Court Street, Boston, he and
Watson were trying out several pairs of harmonic telegraph instruments
each consisting of an electromagnet with a steel organ reed vibrating
over it. One reed stuck. Watson plucked it with his finger to start it
again, but it did not come free, so Bell heard an unusual sound. Instead
of hearing a series of electric pulsations, he recognized the twang of a
vibrating reed! He knew then that, as Watson has put it, “he was
hearing, for the first time in human history, the tones and overtones of
a sound transmitted by electricity.” That afternoon Bell directed Watson
to make the instrument that was to be the first Bell telephone. This
instrument transmitted voice tones, but not until March 10, 1876, did
Bell succeed in transmitting an intelligible sentence of speech.


The telephone talks

On the evening of that day, as the young inventor prepared a crude
experimental transmitter to try to send his voice over a wire to a room
down the hall where Watson was listening, he upset the acid of a
battery. It spilled over his clothes. Impulsively, Bell called out, “Mr.
Watson, come here: I want you!” An instant later Watson burst into the
room shouting “Mr. Bell, I heard every word you said—distinctly!”

Bell exhibited and demonstrated his telephone at the Philadelphia
Centennial in June, 1876, where it won the enthusiastic approval of
leaders in the scientific world. But the general public showed little
interest. The young inventor had no financial backing other than that of
Thomas Sanders and Gardiner C. Hubbard. In the fall of 1871 these men
had agreed to supply funds for Bell’s telegraph experiments in return
for a share in whatever patent rights might result from his experiments.
His telephone patents were later included in this agreement.

Bell’s first telephone patent had been granted on March 7, 1876, but was
earning no return. Sanders and Hubbard had advanced all they could. In
order to eke out his small personal income as a teacher, and to provide
funds for further experimentation, Bell began, early in 1877, to give
lectures at which he demonstrated the telephone. These were well
attended, and accounts of them were widely published. A few
forward-looking people began to realize the usefulness of the telephone.
In May, 1877, the first telephones were put into use on a commercial
basis. Soon people throughout the country began to inquire about how to
get into the telephone business.


How the Bell System was formed

The commercial development of the telephone had begun and the time had
come for a more definite organization than the rather informal
arrangement that had been made between Bell, Sanders and Hubbard, into
which Watson had by this time been admitted.

This took the form of a trusteeship, instituted in July, 1877, by these
four owners of the patents. Hubbard was trustee and virtual executive
head of the enterprise. It was he who introduced the policy of leasing
instruments instead of selling them and who introduced the system of
licenses to authorized agents or licensees throughout the country for
the commercial development of the telephone, laying the foundation for
the Bell System of today.

Telephones first were leased in pairs. The lessee put up his own wire to
connect his telephone with that of a friend or neighbor, or ran the line
between his home and place of business. There was no way he could talk
by telephone with others in the community who leased instruments.

    [Illustration: “_Mr. Bell, I heard every word you
    said—distinctly!_”]

The interconnection of these individual subscribers awaited the
development of the telephone switchboard. The first switchboard was
installed in the office of E. T. Holmes, in Boston, in May, 1877, and
connected four banks and a manufacturing concern. It connected these few
telephones in the daytime by wires that were used for a burglar alarm
system at night. New Haven, Conn., became the first city in the world to
have a commercial telephone exchange. A switchboard connecting eight
lines and 21 subscribers went into service there in January, 1878.

Two years later in April, 1880, the American Bell Telephone Company was
organized. It greatly developed the telephone organization and business
throughout the country. A line from Boston to Providence was built in
1881. Service between Boston and New York, 235 miles, opened in 1884.

An important step in the attainment of a nation-wide telephone service
was the organization of American Telephone and Telegraph Company in
1885. This company was formed to build and operate long distance lines
to interconnect the regional companies that had developed, by merger and
growth from early licensee companies.

To attain the ideal of universal telephone service, it became
increasingly important to extend the long distance lines even farther,
to carry on continuous investigation in the practical development of the
telephone art, to make further progress toward the standardization of
apparatus, equipment and methods and to handle economically and
efficiently the many general problems shared by the telephone companies.
In 1900, therefore, the American Telephone and Telegraph Company took
over the assets of the American Bell Telephone Company and became the
headquarters company of the Bell System.

    [Illustration: _Artist’s conception of the first commercial
    switchboard, placed in service in New Haven, Conn., 1878. In the
    early days of the telephone industry, operators were men._]




                     The Future Holds Great Promise


    [Illustration: Bakelite telephone]

Year after year, the Bell System has provided service of steadily
increasing value to more and more people. Through times of boom and
depression, during all-out war and postwar readjustment, and now in a
period of defense preparation, the Bell companies have improved and
strengthened the communications network in order to do the best possible
job for the nation. Here are some of the accomplishments that have been
made in the period since 1920:

■ Fast, accurate dial service has been extended to more than four-fifths
of all Bell System telephones.

■ Sturdy cable lines, capable of carrying thousands of conversations,
now reach from border to border, and from coast to coast. These
transcontinental cable lines are invaluable for maintaining
communications in case of a national emergency.

■ A microwave radio relay route, carrying both telephone conversations
and television programs, now spans the nation.

■ The regional companies of the Bell System have enlarged their
facilities in order to take care of about 160,000,000 telephone
conversations per day—more than four times as many as in 1920.

■ Drawing Americans closer together, long distance facilities have been
expanded in order to handle more than 2,600,000,000 intercity calls a
year, compared to about 270,000,000 in 1920.

■ Radio-telephone provides regular service overseas, to ocean liners,
coastal and inland watercraft, motor vehicles, trains and airplanes.

    [Illustration: _By pressing keys, these operators dial calls
    directly to telephones in distant places._]


Your telephone is more valuable

Your telephone is a much better “buy” than ever before. Many more people
now have telephones, and local calling areas have been extended. You can
call more people and more can reach you.

These days, when the cost of nearly everything is higher than ever
before, the price of telephone service has remained relatively low. On
the average, since the Korean war, the cost of telephone service has
gone up much less than the cost of other things you buy.

    [Illustration: In the average exchange, telephone customers are able
    to reach over five times as many telephones at local rates as in
    1920.]

                          1920      30,000
                          1954     156,000
  Chart based on study of 170 U. S. cities over 50,000 population.

Over the years there has been a remarkable reduction in long distance
rates. Between 25 of the principal cities in the country, the average
day rate for station calls has dropped from $6 in 1920 to about $1.55
today. The day rate for a New York-San Francisco station call has been
reduced from $16.50 to $2.50. Overseas rates have been cut drastically
since the service opened in 1927. A New York-London call that cost $75
in 1927 now costs only $12 in the daytime, or $9 nights and Sundays.


The goal—constantly improving service

The Bell System strives constantly to improve service. New devices, new
systems, promise more and better telephone service at the lowest
possible cost.

Dial service is being extended, of course, to more and more communities.
Also, new equipment now enables operators to dial many long distance
calls straight through to distant telephones without the assistance of
other telephone operators along the route. Operator long distance
dialing networks now crisscross the country, reaching out to about 3,600
cities and localities. Other localities are constantly being joined to
these networks.

In more than 40 towns special installations enable customers to dial
long distance calls directly to more than 11,000,000 telephones from
coast to coast. An “electric brain” receives a number as it is dialed
and completes the call. An automatic accounting system gathers the
information for billing. Bell telephone engineers plan the extension of
this Direct Distance Dialing to serve the whole nation in a decade or
so.

Bell System mobile telephone service is now a reality in most major
cities and on many highways. “Traveling telephones” are numerous on
ships that ply coastal and inland waterways, and a growing number of
passenger trains now offer regular telephone service. In addition,
private line mobile telephone systems, leased and serviced by the
various Bell telephone companies, are being used increasingly by police
departments, utilities and industrial concerns.

With the help of fast, economical construction methods and new
transmission techniques, the Bell companies are improving and extending
telephone service in rural areas. Power-driven augers quickly drill pole
holes. Special plows place wire underground and cover it, in one
operation. By means of special equipment, both electric power and
telephone conversations can travel to farms over the same wires.

    [Illustration: _Information for billing toll calls is punched on
    paper tape by automatic message accounting machine._]

    [Illustration: _Ambulance driver talks over mobile telephone._]

These methods have helped telephone engineers and construction forces
put in rural telephone facilities three times faster than ever before.
Gradually, the telephone is eliminating the traditional isolation of
farm life. Rural localities have been linked by literally tens of
thousands of miles of new pole lines, by modern central office
buildings, by the most up-to-date switchboards. Great strides are being
made in improving the quality of rural telephone service.

With the steady pressure of world tensions, the Bell System has taken
many steps to make sure that America’s defense needs will be met. The
telephone companies have a good foundation to build on. Telephone
buildings are of unusually strong construction. The entire United States
is blanketed by a network of telephone circuits. American cities are
underlaid by networks of underground cables, which, as wartime
experience in Japan showed, would not generally be destroyed even by
atom bombs.

The nation is now spanned—coast to coast, and north to south—by
“backbone” communication routes. Calls between cities can be routed over
many alternate paths, and destruction of telephone facilities at one
point would be like throwing a pebble through a huge spider web. While
service at the one point might be temporarily interrupted, the
nation-wide communications web would continue to function. Because of
the strength and flexibility of the telephone network, the basic means
of communication in the nation’s Civil Defense setup has been built
around the telephone.

Throughout America the work of improving and strengthening the telephone
system goes on. The goal is to help make the nation invulnerable against
attack, and to provide the public with the best possible service, at
reasonable cost, in rural communities, in cities, and on intercity
routes.

    [Illustration: _Power driven augers help speed construction of rural
    telephone lines._]

    [Illustration: _Civil Defense air raid warning network relies mainly
    on telephone communications._]




                        Story without an ending


Neither chance nor mere good fortune has brought this nation the finest
telephone service in the world. Americans enjoy this service as a result
of their own enterprise and common sense.

The people of this nation have found more and more ways to use the
telephone in their daily lives. They have encouraged initiative and
invention. They have made the job of providing telephone service a
public trust. At the same time, they have given the telephone companies,
under regulation, the freedom and resources to do their job as well as
possible.

In this climate of freedom and responsibility, the Bell telephone
companies have provided service of steadily increasing value. And the
quality of service has been steadily improved.

In the years since World War II, the public demand for service has been
so great that the Bell System has carried out the most extensive
construction program ever undertaken in so short a time by any single
enterprise. The people of America made this program possible. Since the
war, and through 1954, they have invested about seven billion dollars of
their savings in Bell System securities, and this money has been used to
construct new telephone buildings, buy new equipment, and extend
service.

Now, some ten years after the war, the term “extend service” means much
more than being able to provide a telephone for those who want it.
Today, the telephone in America has gained many new dimensions as the
Bell System offers more and more things to meet the wants of the
American people—things that add even more variety and convenience to its
service. Telephones in attractive colors that blend or contrast with any
decorative scheme; telephones with illuminated dials that can be seen in
the dark; telephones with push buttons to answer as many as six lines;
equipment that will automatically answer calls when no one is in, and
give and take recorded messages—these are only a few of many.

Bell System men and women, with experience and skill, backed by the
great flexibility of their communications network, are writing the story
of steadily improving telephone service—a story that will have no
ending.


                                                  Printed in U.S.A. 8-55

    [Illustration: Sample telephones]

    [Illustration: Endpapers]




                          Transcriber’s Notes


—Silently corrected a few typos.

—Retained publication information from the printed edition: this eBook
  is public-domain in the country of publication.

—In the text versions only, text in italics is delimited by
  _underscores_.