The National Telephone Company of Britain



The National Telephone Company of Britain came about as a result of two American companies moving into the British market. It ended up with the British Post Office taking them over in an attempt to keep revenue and local ownership. The early history of the National is tied up with the conflicts over the early telephone patents, so a brief review of the history of the telephone is in order.

The patents

In July 1875 Elisha Gray patented an electromagnetic receiver – a metal diaphragm resting on two poles of an electromagnet. It didn’t work well as such, but his patent did cover the principle that later became the familiar “Bell” receiver, after being refined and developed by American Bell.

Feb 14 1876 Bell patented his “gallows” telephone. It was inefficient and he later abandoned it, but it got him the patent and the credit. Elisha Grey lodged a caveat on the same day, but some hours later.

Bell changed tack to variable resistance using acidulated water, which he had included as an aside in his patent application. This one worked, but in such a random way that he concluded it could not be made reliable and returned to the magneto-induction method described in his original patent.

Emile Berliner applied for a patent on June 4 1877 on a transmitter that involved loose contact between a metal ball and a metal diaphragm. Thomas Edison and David Hughes in England were working along the same lines. Edison applied for a patent on April 27 1877. Berliner eventually won the legal case that resulted – in 1886. Berliner’s patent described varying pressure between two electrodes in constant contact, varied by the pressure of sound – a very wide-ranging description. He assigned this patent to the American Bell Telephone Company for development.

Edison’s patent covered contacts of “plumbago or a similarly inferior conductor”. This included carbon. After various appeals to the courts, Berliner’s patent was held in 1897 to cover metal electrodes only. This left Edison’s patent to cover what would be the basis of most transmitters for the next century. He assigned the patent rights to the Western Union telegraph company, who used it to develop their own telephones. Bell sued them for patent infringement.

In 1878 Francis Blake developed on Berliner’s idea and produced a single contact transmitter using a carbon pellet and a bead of platinum on an iron diaphragm. He patented the transmitter in 1879 and assigned the rights to American Bell in exchange for shares in the company. This suited American Bell, who were running short on funds due to the vast amount of litigation between the various patent holders. They put the Blake transmitter into production. Despite its drawbacks it was sensitive and reasonably reliable, and better than anything else that Bell had at the time.

Henry Hunnings, a British clergyman, applied for a British patent on a “new” transmitter in 1878, and for an American patent in 1881. It used a metal diaphragm and a rigid metal backplate, and the gap between them was filled with carbon powder. It conflicted with Edison’s patents, but the Bell company experimented with it for long-distance transmission, an area where the Blake did not perform well.

Finally, Anthony White, a Bell company engineer, developed the Solid Back transmitter using carbon granules sealed inside a metal cup , with a diaphragm closing the front. He patented this in 1892. Bell eventually dropped the Blake and used the Solid Back transmitter thereafter.

The Bell company was forced to vigorously defend its patents against all comers, especially the giant Western Union company. In the U.S. courts the arguments lasted for years. Western Union developed its own telephones using Edison and Gray designs. With their financial backing they could probably have won the battle, but they were faced with a hostile takeover of the company and did not have the time or resources to continue the court battles. Western Union dropped out of the battle and assigned all their patents and rights to American Bell in return for a percentage of revenue. This included the valuable Edison carbon-transmitter patent. This left American Bell with all the patents they needed to build workable telephones, and left Edison with nothing but minor glory.

With the value of the telephone now being proven by immense growth, Edison was spurred to do something about this. He now had to invent a new kind of telephone if he was to share in the industry he had helped create. He also had to expand overseas , where American Bell were selling telephones as fast as they could make them.

Britain – a new market

Britain and Europe were logical places to start. In Britain, Frederic Gower had patented a carbon-pencil transmitter that (in Europe, at least) got around the Bell-held Edison patents. It was based on a Hughes carbon-pencil transmitter, which had already been widely published and may have preceded the Edison carbon-contact patent. Edison developed and patented a “Chalk Receiver” to go with it. It used a rotating drum of chalk soaked in potassium iodide to produce sound from a diaphragm. Although it needed to be constantly rotated by the user, it worked reasonably well. In 1879 Edison formed the Edison Telephone Company of London, Ltd to market his new phone. He competed directly with The Telephone Company Ltd (Bells Patents). This competition soon became obviously pointless, especially when they began litigation against each other over patent infringement. Both companies knew how long and expensive litigation could be. There were other incentives to cooperate. Their customers could not connect to an opposition company’s customer. Telephone lines were being needlessly duplicated. Phones were being made from inefficient designs. Customers could have to advertise two numbers instead of one. On May 13, 1880, the two companies merged to become the United Telephone Company Ltd. They adopted Bell equipment as their standard, as the new company now held all the patents for Britain.

In 1881 United and the Gower Bell Telephone Company formed a new company to manufacture their telephones and equipment, called the Consolidated Telephone Construction and Maintenance Company Ltd.

Europe

Edison and Gower also formed the Edison Gower-Bell Telephone Company of Europe Ltd to market Edison phones in all Europe except France, Turkey, and Greece. American Bell set up a manufacturing company based in Antwerp , so the cordial competition resumed. The Edison company appeared to have learned its lesson in London, however. In France, for instance, Societe du Telephone Edison was formed in 1879 to market an Edison/Ader phone in Paris. In 1880, less than six months later, they amalgamated with Societe du Telephone Gower and the Soulerin Company to become Societe Generale des Telephones. Bell had already set up the Compagnie des Telephones, using their Blake-Bell phones, and they also joined in the amalgamation. The directors were Gower and Roosevelt, local telephone engineers Ader and Soulerin, and a representative from the Credit Immobilier Bank.

The political implications were interesting. In Britain, the Post Office realised that there could be a potential loss of revenue for their telegraph service and lobbied to have the telephone brought under their control. In France, however, the Government knew that they did not have the money to compete against the private companies. It allowed them free rein, but under licence conditions. Albert Cochery, the Post Office and Telegraph Minister, said in 1879

“At this time it was difficult to know much about this new application of electricity….Let alone calculate the cost of setting up telephone networks. This being the case, the Government could not envisage taking on all the responsibility and the costs involved in such networks. On the other hand, it could not deprive the public of a service which it could not supply. The ministers therefore decided to leave future developments up to the private sector while maintaining a state monopoly control".

Quite a contrast in attitudes. In France each license was to last five years. The licensee would pay 10% of their gross returns to the Government, which could issue other competing licenses or set up their own company. Annual fees would be set by the Government. The Government would set up and service the trunk network. (In spite of this, in 1899 the Government took over the private telephone companies by force and nationalised them.)

Back in Britain

In Britain there seemed to be an official dislike of what was becoming a non-Government-owned monopoly. Among the Government the first pressures began to claim and exert some form of control over the new technology. In 1880, the High Court ruled that a telephone call was really a telegraphic communication and that any company providing telephone services would require a license from the Post Office to do so. This was justified on the basis that the Telegraph was a “natural Government monopoly”. In the following year the Post Office started to convert some of its Telegraph offices to Telephone Exchanges. The first was at Swansea and was opened on March 23 1881. (or 22 October, according to other sources). They used Gower-Bell telephones. The phones were built for them by Consolidated. Despite the name, these phones had no connection with Bell.

The Post Office used the same tactic in later years against the new wireless technology devised by Marconi. As soon as wireless looked like becoming a commercial proposition, the Post Office denounced it as a “frivolous use of a national resource” and took control by licensing it.

With the license issue sorted out, a number of new firms opened up to service specific areas. Each firm had a monopoly in its area. The National Telephone Company came into being, using the assets of the United Telephone Company and others. This also gave them the Hunnings transmitter. The British rights had been bought by the United Telephone Company to overcome some of the limitations of the Blake. This put the National well ahead of the opposition in terms of quality of the transmitters.

The National was regarded with open suspicion by the Post Office. Its growth was largely fuelled by buying out its less successful competitors. It was better funded by its U.S. backers, so it grew faster than the Post Office network. It was becoming referred to as ‘the American company”, due to its habit of appointing Americans to the Chairman position and using American phones. With the experience of American Bell to draw on, it was more innovative than the British Post Office.

The Post Office seemed to deliberately set out to place obstacles in National’s way. In 1882 it announced that it would grant licenses for other firms to operate in the same areas as existing licencees. “It would not be in the interest of the public to create a monopoly in relation to the supply of telephonic communication” said Henry Fawcett, the PostMaster General, in 1882. This ran counter to the “natural monopoly” theory of the Telegraph only two years earlier, but the hypocrisy of this apparently escaped Mr Fawcett. On 1st May 1889 the National Telephone Company was to be re-formed by a proposed amalgamation of the United, the National, and the Lancashire and Cheshire Telephone Companies. The new company would have had a paid up capital of four million pounds and 23585 lines. The Post Office refused the new company a license on the grounds that it was not empowered to license amalgamated companies, only new ones. The answer was for the National to absorb the others under its own license, rather than amalgamate.

The Post Office also in the same year encouraged local Corporations (Councils) to set up competing companies. Six Corporations tried. One by one they failed, and were mostly bought out by the National. Only one survives today, in Hull. As a matter of interest, in Hull by 1911 the Hull Corporation system had 3000 customers, the National 9000, and the Post Office 50. The Post Office, however, charged each licensee ten percent of their gross income, as in France. A race for growth now began in earnest. In 1890 National proceeded to buy out the Northern District Company (1551 lines), South of England Telephone Co (3255 lines), and the Western Counties and South Wales in 1892 (a further 4027 lines). These purchases put a strain on its finances and led to it raising its rates in many towns. This did not pass without public protest. The Post Office in its turn used its revenue to buy overseas cable companies and submarine cable laying ships to expand the telegraph system, not the telephone network.

 

Left: Manchester Exchange about 1904

 

 

 

 

 

 

In 1891 the National built the first trunk circuit between London and Birmingham. Trunk lines to this point had been completely ignored by the Post Office (conveniently, since they would have competed directly with the Telegraph).

The Beginning of the End

1892 was a bad year for the National. Complaints were rising about the quality of their service, the background noise, the prices, and the massive amounts of wire being strung through the cities. Their attempts to obtain right-of-way for underground cables were being obstructed by Councils, Corporations, and the Post Office. The bulk of their right-of-way was held subject to a six-month notice of removal. The Bell/Western Electric and Consolidated phones they were using were proving increasingly unpopular on price, quality and styling grounds, compared with other phones available from European countries. On 22nd March, Bills were presented in Parliament that would at least allow the National some relief in the matter of cable easements. The PostMaster General opposed the Bills, and cited the wide public unhappiness with the National system. This was strange, as a move to underground cables would have improved the service. It would have allowed National to use two-wire metallic circuits for its customers and remove the induction interference that was causing the noise on its earth-return lines. In truth, the Post Office was experiencing a noticeable drop in Telegraph revenue and was determined to do something about it. The PostMaster also announced that the Government would buy out all of the National’s trunk network by compulsory purchase. Henceforth all trunk routes would be provided and serviced by the Post Office, in a move similar to that which had happened in France some years earlier.

This was, in some ways, a benefit to the National. Their funds could now be used to improve their local networks, although they lost the increasing Trunk Call revenue. The Bell patents had expired in 1890; patents that National had administered for Bell in Britain. They were no longer tied to Bell, and in 1898 they placed an order for one hundred thousand telephones from L M Ericsson in Sweden.

In 1899 the Government, disregarding the experiences of the private companies some years before, announced that they would set up a competing telephone network in London. This meant that some customers would have to go back to advertising two numbers again. Private companies could now only build lines up to 5 miles from a city centre. In provincial towns, competition with the National would be left up to local Corporations. The Post Office would open small country telephone exchanges in unserviced areas where they could tap into a nearby trunk line. Showing that they could still flog a dead horse, they called the enabling legislation The Telegraph Act.

In 1903, in an attempt to attract more customers, the Post Office introduced the first night rate telephone calls. A subscriber could call for six minutes for the same price as for three minutes, provided he called after eight p.m. Was the Post Office finally accepting that the telephone was here to stay?

In the same year, the National announced a joint venture with L M Ericssons to build telephones in Britain at their works at Beeston. The National had been Ericssons’ biggest customer for some time, taking almost half the Swedish plant’s production. Ericssons needed a new factory, and that factory should be in Britain to take advantage of the National and British Post Office contracts and colonial markets that could be opened to them. The old National repair works at Beeston was enlarged dramatically, financed jointly by Ericssons and National. The timing was unfortunate.

With the Post Office finally coming to grips with the telephone and devoting enough money to see to its expansion, the end was in sight for the National. In 1905 the Post Office announced that National’s license to operate would terminate in 1912. They would then buy out its networks and take over its customers. National stopped taking on new customers, stating that it would be necessary to recoup any new investment by 1911. The ensuing years were devoted to linking each others’ exchanges, and arranging interconnection between their customers. National did little new infrastructure work, using the Post Office’s cables, buildings and equipment where possible. It did, however, buy out the ailing Swansea Corporation Telephone Service in 1907. The remaining corporation, Hull, was allowed by the Post Office to extend its license on the proviso that it bought out the National services in its area and only serviced that area previously controlled by the National. This saved the Post Office the cost of buying out the National infrastructure.

Ericssons bought out National’s share of the Beeston factory. In 1912 the Post Office completed the buyout of the rest of the National for over twelve million pounds. They inherited a backlog of over 10,000 very unhappy waiting customers. The only remaining private telephone company in Britain was Hull. The National Telephone Company was legislated out of existence.

The Legacy

Or was it? Such a large company could not pass without leaving some traces. To this day there is at least one telephone exchange building with NTC carved into its front stonework. Cast iron manhole lids still sometimes show the NTC logo. Many miles of Britain’s cable conduits run in hollow cement blocks imported from Sweden and laid by National in the 1890s.

Historically the National and its predecessors created a large part of British telephone history – the first telephone exchange in Britain was opened by The Telephone Company in 1879.

National was the first to allocate the number 000 for all police, fire and ambulance calls. The Government actually agreed to this, and it has become almost universal.

The first Public Telephone “kiosk” was also due to United. The British Post Office banned them in 1882, and was later forced to open its own.

The Telephone Company issued the first British phone book in 1880.

The National introduced a system in 1884 where subscribers could pay their bills by buying special National stamps and saving them until the phone bill arrived. The stamps could then be stuck to the bill and mailed in as payment. A similar system was in use in Australia in the 1980s, and may still exist as far as I know. Initially the stamp scheme infuriated the Post Office. The stamp did not carry the portrait of the Queen, as was fit and proper, but that of the Chairman of National, Colonel Robert Rainsford Jackson. The Post Office received a ten percent commission on all calls, so Post office stamps were also used to attach to tally sheets at the Public Telephone kiosks. Subscribers could also make calls from a kiosk and have them billed to their home phone. The stamp system was discontinued when National introduced another innovation, the coin telephone or payphone, in 1891.

The first fully automatic switchboard used in Britain was patented by a National engineer, Mr Dane Sinclair. It was installed in Glasgow in 1883.

National helped develop the Electrophone system, Britain's earliest public broadcasting system. The broadcasts were transmitted live on National’s highest quality phone lines and then “broadcast” to subscribers’ phones on request from the Electrophone exchange. This system became the forerunner of today’s radio broadcasting stations.

Finally, despite the Post Office’s assertions that they could provide a better service than the National, the last National-built magneto exchanges were only taken out of service in the 1950s.

The philosophy of private entrepreneurs versus Government control is one that is still argued in economics circles today. For all its weaknesses, the National gave Britain a lead on many other countries in the new technology. Manufacturers sprang up to support it, business took advantage of it, Governments taxed it. Telephone exports became a new British industry, and British engineers developed the hardware at least as well as their American counterparts.

The Telephones

The National and its predecessors used a small but significant range of telephones during their life. The phones can be divided into five groups – Bell / Western Electric, Consolidated, Ericsson, Sterling and Peel Conner. It is very hard to separate the first two groups.

The Bell phones were the conventional tall three box wall phones with Blake transmitters initially, but they diverged from their American design as competition and better technology was introduced. Towards the end of the Bell period a distinctly European range of phones had been designed. At least one of these, an attractive little CB wall phone, was taken into the British Post Office as their Tel No. 1 when they took over National.

Consolidated manufactured a very small range of updated Bell phones, as well as producing one or two original designs of their own. Their career was short, however, as the National soon started buying Ericsson phones.

The Ericsson phones were standard Swedish models at first. The only difference was the National Telephone Co. transfers on the phones instead of Ericsson ones. Where a logo was used, it was usually a bell-shaped transfer with National in the centre. The bell shape was the same logo used by the American Bell company, and this may have been seen as flaunting the American origins of the company in the face of the British. One noticeable difference was on the Ericsson skeletal phone. National asked that the teardrops on the cradle be omitted, and that the phone’s metalwork be finished in a gunmetal black lacquer. This was a maintenance move – the teardrops were fragile, easily lost and added to the cost, and the black lacquer would make refurbishing of the phones easier. The British Post Office continued this policy for their own skeletal phones. The National also bought a modified version of WE's early candlestick phone, nicknamed the Golfball. This was also used by the BPO.

National bought in phones from Sterling and Peel Conner to fill specific market niches such as intercoms and mining phones. Some of these designs are shown in the following pages to give an idea of the range available to National’s customers. For a more comprehensive listing, visit Bob Freshwater’s website at http://www.britishtelephones.com/menutntc.htm. When the BPO took over National in 1912, most of the National phones were adopted into the Post Office system and gradually phased out .


Bibliography:

Meyer Ralph O. “Old Time Telephones! Technology, Restoration and Repair” New York 1995

Emmerson A. : “Old Telephones” Princes Risborough, Buckinghamshire 1994

Allsop F C “Telephones: Their Construction and Fitting” London 1917

Freshwater Bob “The Telephone File” Website
http://www.britishtelephones.com/homepage.htm

Nibart Frederic “Fred’s Old Phones” Website

Bruckman Neil “A British Telephone Stamp of 1884” Website
http://strowger-net.telefoonmuseum.com/tel_hist_stamp.html

Jolly Ian “Last Reminders of the National Telephone Company” Website
http://strowger-net.telefoonmuseum.com/tel_index.html/

Marshall Graham “The National Telephone Company of Great Britain” March 1994 Australasian Telephone Collectors Society Newsletter

Beauchamp Christopher “Intellectual Property, corporate monopoly and judge-made law: the telephone patents in Britain and the U.S.A. 1880-1894” Rutgers University “The Edison Papers” Website http://edison.rutgers.edu

Wallsten S. “Ringing In The 20th Century: The Effects of State Monopolies, Private Ownership, and Operating Licenses on Telecommunications in Europe, 1892-1914” Stanford Institute For Economic Policy Research, Stanford University, Stanford. June 2001

Typical National Telephones

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