DEVELOPMENT OF TELEPHONE SERVICE 495 



facilities offered by these early exchanges afforded a service esteemed 

 by the public as a desirable convenience, then the manifold advantages 

 that might be derived from a telephone exchange system embracing 

 all the probable users of telephone service in a town or city, would be 

 in direct ratio to the growth and expansion of that system. Hence, 

 as it appeared evident that this new industry had come to stay, and 

 was quite likely to prove a good revenue producer, capitalists began to 

 look favorably upon ' Bell's toy,' to wonder whether it might not turn 

 out to be an exceedingly valuable invention, and whether it was safe 

 to infringe the Bell patents. Thus it came about that before the close 

 of 1878, a number of promoters who had formerly scoffed at the in- 

 ventor and his telephone were offering large sums in cash for exclusive 

 rights to operate in given territory, in several cases paying a good 

 premium for the same rights offered for a nominal payment a year 

 previous. 



These sudden conversions to implicit belief in the tangible value of 

 the telephone appear the more remarkable when we recall the fact that 

 throughout the United States commercial and financial affairs remained 

 in a depressed condition during the entire year of 1878, and it was an 

 exceedingly difficult matter to get capital interested in any new enter- 

 prise. Nevertheless, nearly seventy Bell exchanges were in process of 

 being planned, or were under construction, or were in operation when 

 the year closed. In the following named cities Bell exchanges were 

 in operation at the close of 1878, and, while the number of telephones 

 shown in service is comparatively small, the records show that several 

 of these exchanges had secured from two to four times that number 

 of contracts, and were connecting new subscribers as rapidly as possible. 



Albany 250 Indianapolis 150 



Baltimore 100 Lowell 200 



Boston 150 Meriden 100 



Bridgeport 175 Xew Haven 350 



Buffalo 250 New York 250 



Chicago 550 Philadelphia 250 



Cincinnati 200 St. Louis 325 



Columbus 50 Toledo 100 



Detroit 150 Troy 100 



Then exchanges were in process of construction in Washington, 

 Louisville, New Orleans, Nashville, Cleveland, Springfield, Hartford, 

 Providence and other places. 



A very different condition of affairs prevailed in financial and com- 

 mercial circles a year later, when, in the autumn of 1879, the resump- 

 tion of specie payment caused a feeling of elation to pervade all 

 branches of industry, and started a remarkable boom in railway con- 

 struction and in stock speculation that spread throughout the country. 

 Thus it was not surprising that many investors appeared eager to 

 identify themselves with the telephone industry, nor was it so remark- 

 able that as one of the results of this frenzied activity, there were sev- 

 eral hundred operating Bell companies when the year of 1879 closed. 



