The American Telephone and Telegraph Company’s consolidation of the research and development arms of its telephone companies created one of the world’s most important and successful industrial laboratories.
The Bell Telephone Company, which was established in July, 1877, was formed around Alexander Graham Bell’s valuable patents and was intended to finance his experiments. The company’s emphasis on research and development began as soon as the first spoken words were transmitted along a wire. It was clear that telephone transmission could be significantly improved and would have to be improved if it was to become a commercial proposition. The large number of inventors who entered the field of telephonic communication brought instant competition. The industry was dependent on technological innovation.
The telephone business was soon divided between local operating companies and companies that manufactured equipment. The latter usually had the facilities to experiment and test. The first individual to be given the right to make telephones was Charles Williams, in whose machine shop Bell had constructed his first experimental telephones with the assistance of Thomas A. Watson, who was a machinist employed by Williams. As demand for telephones grew, Bell Telephone looked for a larger and better-organized manufacturing arm to replace the several individual manufacturers licensed to make telephones. It approached the Western Electric Manufacturing Company
By 1900, Western Electric was carrying out much of the technical development of telephone service. It had departments that carried out testing and tried to solve problems that arose in operations. It had a department devoted to designing new equipment and improving old machines. This still did not constitute industrial research, as defined by pioneers such as General Electric and the Du Pont companies, which set out to investigate new technologies in the hope of finding new products.
The forces that pushed the telephone companies into industrial research were primarily competitive. Although telecommunications is a natural monopoly—that is, service provision is most efficient when there is only one system—there was no hope of this happening in the United States until one system was so technically superior to all the others that it dominated communications. When Bell’s central patents began to expire after the turn of the century, competitors entered the telephone business. The strategy adopted to overcome the independent companies was for the Bell organization to dominate the long-distance telephone networks. This goal could be achieved only through a massive influx of capital and the development of a new technology of amplifying and switching telephone messages.
American Telephone and Telegraph (AT&T) was the vehicle for this grand plan. It began as a subsidiary of the original Bell company, but in 1889 the latter transferred all of its assets to AT&T to provide a better base to raise capital. With the support of financier J. P. Morgan, AT&T pursued the policies of experimenting to improve service while buying out independent telephone companies. Theodore Newton Vail was made president of the company in 1907. He energetically pursued the twin goals of universal service and a coast-to-coast telephone network. Vail was committed to research and development, and his tenure as president marked a significant increase in the resources devoted to industrial research.
AT&T had its own research organization, the Engineering Department, which looked into problems connected with telephone transmission, such as sound quality and interference from power lines. Western Electric’s Engineering Department was charged with improving the equipment used in the telephone system.
Vail consolidated many of these functions at one large Western Electric laboratory in New York City. He placed the facility under the command of chief engineer John J. Carty, whose major task was to find a method of extending the distance of telephone communications. The Western Electric Engineering Department was provided with the scientists and funds to develop a transcontinental telephone system in time for the Panama-Pacific International Exposition, which was scheduled for 1914.
After examining magnetic and electromagnetic devices, the Western Electric laboratory decided to investigate the potential of the newly invented vacuum tube as a means of amplifying telephone messages. AT&T had purchased the rights to Lee de Forest’s “audion”
On the eve of World War I, the Western Electric Engineering Department was one of the largest industrial research organizations in the world. It had a staff of more than one hundred formally trained scientists and engineers. Its policy of recruiting graduates from the leading universities and technical institutes brought it some of the finest young minds in the country. This policy also represented an investment in basic scientific knowledge that was to pay dividends in the years to come.
In 1925, AT&T consolidated its research activities through an amalgamation of Western Electric’s and AT&T’s engineering departments into Bell Telephone Laboratories, commonly known as Bell Labs. Frank B. Jewett, who had worked for Carty on the transcontinental telephone project, was made president of the laboratories. As the name implies, Bell Labs was never concentrated in one place but consisted of several research laboratories working in different parts of the country.
The creation of Bell Labs did not change the research activities undertaken by its two parts, nor did it change the location or function of its principal personnel. The research teams stayed in the same laboratories and continued with the projects assigned to them. Several elements of AT&T’s Development and Research Laboratory were not incorporated into Bell Labs until the 1930’s. AT&T and Western Electric shared ownership of the new organization. What the founding of 1925 achieved was a consolidation of research and development, making it more responsive to corporate control. Formation of a single research entity also provided a greater public profile to this activity. AT&T exploited this profile in advertising and public relations; Bell Labs was soon known around the world as the epitome of industrial research. More than any other laboratory, Bell Labs represented the application of pure science to commercial ends. Every triumph of innovation and Nobel Prize awarded to a researcher served to underline the importance of basic research to the business community.
Bell Labs did not confine its attention to telephone service; it also exploited technological opportunities in other areas. In 1925, it introduced a system of electrical recording of sounds, a technology that was successfully diffused to record companies and to motion-picture studios. This proved that the modern industrial laboratory was a means to develop entirely new products and create new industries.
Bell Labs had undertaken a study of the characteristics of human speech to provide a basis for its research on telephony. Its scientists needed a method to save sound as part of their recording of experiments. Telephone engineers also needed samples of messages for testing. The existing system of sound recording was the acoustical method invented by Thomas Edison in 1877, the phonograph. A team of experimenters under the direction of Joseph Maxfield worked to devise an electrical version of this system, using a microphone invented by another Bell Labs scientist, E. C. Wente, and the amplification units developed by Arnold.
Maxfield’s system of electrical recording was successfully demonstrated to representatives of the record and talking machine industry and soon became standard in recording studios. The project had been initiated by Edward B. Craft, who was second in command under Jewett. Craft persuaded the upper management of AT&T that this technology had applications in the motion-picture industry and received permission to develop a system of talking pictures.
During the 1930’s, Bell Labs undertook a wide range of research in telephone and radio communications, sound recording, electronic switching, amplification, and a host of other subjects. Some of this research had immediate practical applications; some had potential for future use, such as the system of stereo sound recording demonstrated in 1933; and some was basic scientific research with no commercial application, such as the investigation of the conducting properties of certain types of silicon materials. That project was the foundation of the transistor research of the 1940’s.
The focus of Bell Labs was widened to cover all aspects of communications. It investigated the possibilities of transmitting images as well as telephone messages, including the transmission of photographs along the wires. It was also one of the first laboratories to experiment with television pictures. This was part of AT&T’s strategy to provide video telephone service, through which customers could see as well as hear one another.
During World War II, Bell Labs was devoted to war work, including the development of radar, the pioneer guidance systems for guns and missiles, and synthetic substances to replace strategic materials, such as the rubber substitute polymer microgel. The staff of Bell Labs had grown to about six thousand, all of whom were exempt from military service because of the importance of their contribution to the war effort. In 1941, the Murray Hill, New Jersey, facility was opened; this would become the headquarters of Bell Laboratories.
The postwar years saw Bell Labs’ greatest and most publicized success—the invention of the transistor.
Much of the groundwork for these famous inventions had been done in the 1930’s and early 1940’s. The same could be said for the digital revolution of the 1980’s: Bell Labs was a pioneer in the transformation of electrical information into digital codes. The goal was to increase the carrying capacity of telephone wires and reduce cross-talk between messages along the wires, but the applications spread to many other functions and produced many important new products. The combination of basic scientific research and practical engineering produced technology with wide commercial applications and gave the telephone companies an important competitive edge in a new field. Bell Labs continued to work on the frontiers of scientific knowledge with the goal of improving telephone communications.
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Bell Telephone Laboratories. Facts About Bell Laboratories. 12th ed. Murray Hill, N.J.: Author, 1982. Brief volume describes the variety of work undertaken by Bell Labs. An essential reference source for any study of the laboratories. Intended for general readers. -
Bernstein, Jeremy. Three Degrees Above Zero: Bell Labs in the Information Age. New York: Charles Scribner’s Sons, 1984. Brief account by a leading science writer provides a clear and easily understood picture of the work of Bell Labs and describes some of its most important research projects. -
Brooks, John. Telephone: The First Hundred Years. New York: Harper & Row, 1976. Excellent single-volume history of the telephone provides an introduction to the technological development of telephone systems. -
Mabon, Prescott C. Mission Communications: The Story of Bell Laboratories. Murray Hill, N.J.: Bell Telephone Laboratories, 1975. Provides a good overview of the work of Bell Labs. Written to commemorate the fiftieth anniversary of the founding of Bell Labs, and has a self-congratulatory tone throughout. -
McMaster, Susan E. The Telecommunications Industry. Westport, Conn.: Greenwood Press, 2002. History of the rise of telecommunications in the United States includes discussion of the roles played by AT&T and Bell Labs. Features glossary, bibliography, and index. -
Reich, Leonard S. The Making of American Industrial Research: Science and Business at GE and Bell, 1876-1926. 1985. Reprint. New York: Cambridge University Press, 2002. Scholarly and meticulous account of the early research carried out by the telephone companies. Covers the period up to the formation of Bell Labs. Provides an understanding of the motivation and style of industrial research in the communications industry.
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