The NATIONAL TELEPHONE COMPANY of BRITAIN
by Bob Estreich
* Freshwater Bob "The Telephone File" Website http://www.bobsoldphones.net/Pages/defaultLinks.htm
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.
July 1875 Elisha Grey 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 Bell.
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.
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.
In 1878 Francis Blake developed 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 Bell, who were running short on funds. They put the Blake into production after Berliner had improved it.. Despite its drawbacks it was sensitive and reasonably reliable, and better than anything else that Bell had at the time.
In the course of the litigation that resulted from the conflicting patents, Western Union dropped out of the battle and assigned all their patents and rights to American Bell. This included the valuable Edison patent. Bell now had all the patents they needed to build workable telephones, and Edison was left with 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 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 patents. It was based on a Hughes carbon-pencil transmitter, which already had a patent in Britain that preceded the Edison carbon-contact patent. Edison developed and patented a "Chalk Receiver" that used a rotating drum of chalk soaked in potassium iodide to produce sound from a diaphragm. Although it had to be constantly rotated by the user, it worked well. In 1879 Edison formed the Edison Telephone Company of London, Ltd to market his phone. He competed directly with Telephone Company Ltd (Bells Patents). This competition 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. Customers could not connect to an opposition company's customer. Telephone lines were being needlessly duplicated. Phones were being made from inefficient designs. On May 13, 1880, the two companies merged to become the United Telephone Company Ltd. They used Bell equipment as their standard, as the United held the patents for Britain.
In 1881 United and the Gower Bell Telephone Company formed a new company to manufacture their telephones and equipment. It was called the Consolidated Telephone Construction and Maintenance Company Ltd.
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 the Bell Telephone Manufacturing Company in Antwerp, so the cordial competition resumed. The Edison company appeared to have learned their lesson in London, however. In France, for instance, Societe du Telephone Edison was formed in 1879 to market an Edison/Ader phone in Paris, but 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 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 politics were interesting. In Britain, the Post Office realised that there could be a loss of revenue for their telegraph service and lobbied to have the telephone brought under their control. In France, however, the Government realised it did not have the money to compete against the private companies, so it allowed them free rein 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 French Government, which could issue other competing licenses or set up their own company. Annual fees would be set by the Government, who would also set up and service the trunk network.
Back in Britain…
There seemed to be a dislike of what was becoming a non-Government monopoly. In the Government the first pressures began to claim 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 need 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 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.
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. This also gave them the Hunnings transmitter. The British rights had been bought by the United 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 suspicion by the Post Office. Its growth was largely fuelled by buying out its less successful competitors. It was better financially backed, so it grew faster than the Post Office. 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 Post Office.
The Post Office seemed to deliberately set out to place obstacles in its 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 re-formed by a proposed amalgamation of the United, the National, and the Lancashire and Cheshire Telephone Companies. The company had a paid up capital of four million pounds and had 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 National to absorb the others under its own license, rather than to amalgamate. The Post Office also in the same year encouraged local Corporations (Councils) to set up their own 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.
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 (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, and about 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 phones they had been using were proving increasingly unpopular on 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 allowed National to use two-wire metallic circuits for its customers and remove the induction interference that was causing so many problems 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 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 100,000 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. In provincial towns, competition with the National would be left up to local Corporations. The Post Office would open small country telephone exchanges in unserved 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, they 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 the way of the future? 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 British Post Office and colonial markets that could be opened to them. The old National telephone repair works and woodworking shop at Beeston was enlarged, 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 and would not be renewed. They would buy out its networks and take over its customers. 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 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. Ericssons bought out National's share of the Beeston factory. In 1912 the Post Office completed the buyout of the rest of the company for over twelve million pounds. The only remaining private telephone company in Britain was Hull. The National Telephone Company was legislated out of existence.
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. Some old cast iron manhole lids still 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.
The first British Public Telephone "kiosk" was also due to United.
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 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 it caused strong resentment in the Post Office. The stamp did not carry the portrait of the Queen, but that of the Chairman of National, Colonel Robert Rainsford Jackson. The Post Office received a ten percent commission on all calls, so stamps were also used to attach to tally sheets at the Public Telephone kiosks. Subscribers could 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, 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, the earliest attempt at public broadcasting. The broadcasts were transmitted live on National's phone lines, built to the highest possible standards, 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 economic 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, industry 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 National and its predecessors used a small but significant range of telephones during their life. The phones can be divided into three groups Bell/Western Electric, Consolidated, and Ericsson. They also bought a number of special-purpose phones from Peel-Conner and GEC. A number of these phones are shown in the following pages.
The Bell phones were the conventional tall triple box wall phones with the 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 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 and Western Electric started their own factory.
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 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 soon 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 phones.
* Meyer Ralph O. "Old Time Telephones! Technology, Restoration and Repair" New York 1995
* Emmerson Andy : "Old Telephones" Princes Risborough, Buckinghamshire, 1994
* Allsop F C "Telephones: Their Construction and Fitting" London 1917
* Nibart Frederic "Fred's Old Phones" Website http://perso.wanadoo.fr/fredouille/index2.htm
* Bruckman Neil "A British Telephone Stamp of 1884" Website http://www.sigtel.com/tel_hist_stamp.html
* Jolly Ian "Last Reminders of the National Telephone Company" Website http://www.sigtel.com/tel_hist_lasts.html
* Unknown "A Brief History of the Red Telephone Box” Website http://www.eurocosm.com/Application?Products/Telephone-box
* British Telecom "BT Archives Timeline" Website http://www.btplc.com/Thegroup/BtsHistory/1851-1880.htm
* 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" Available from http://www.chs.org.uk/othercontent/beauchamp.htm
* Rutgers University "The Edison Papers" Website http://edison.rutgers.edu/ecopart2.htm
by Bob Estreich
* Freshwater Bob "The Telephone File" Website http://www.bobsoldphones.net/Pages/defaultLinks.htm
* Freshwater Bob "The Telephone File" Website http://www.bobsoldphones.net/Pages/defaultLinks.htm