The Birth of the Telecom Industry and the Accidental Nat-Gas Bonanza
Jul 9th 2013 11:33AM
Updated Jul 9th 2013 11:34AM
On this day in economic and business history...
AT&T began on July 9, 1877 as Bell Telephone Company in Boston, Mass. It was the first telephone company in the world, established only eight years after the United States had finally connected East and West with the Transcontinental Railroad. A year earlier, the country of 38 states and 48 million people had celebrated its hard-won centennial -- and Alexander Graham Bell had earned the first telephone patent in the world, three days before he successfully tested his telephone for the first time. This was the patent that would help build one of the greatest communications empires the world has ever seen.
Prominent Americans began installing those newfangled "telephone" doodads shortly after Bell Telephone's founding -- in 1877, both Mark Twain and President Rutherford B. Hayes had telephones installed at their homes. The White House's first telephone stood ready outside of the Oval Office, and it would be more than half a century before it would be installed in the Oval Office itself. A year later, the first phone books (phone pamphlets, really, as so few people actually had telephones) were printed out, and the first switchboards went into operation.
By 1880, already serving roughly 49,000 lines, Bell Telephone began its transformation into the Bell System by merging with other Bell companies into American Bell. By 1885, the company's rapid growth necessitated the creation of a subsidiary to build out and operate long-distance lines -- the original American Telephone and Telegraph. AT&T grew to surpass its parent and would become the parent by acquiring American Bell's assets shortly before the 20th century began. By this point the Bell System was serving more than half a million telephone lines, and its growth only got faster from then on. By 1910, 5.8 million homes and businesses had phones connected through Bell switchboards. In 1915, Alexander Graham Bell himself participated in the first transcontinental telephone call at the ripe (but highly productive) age of 68. AT&T had established itself as the only viable long-distance telephone company in the country, and from then on it was effectively a monopoly.
A year after completing its transcontinental line, AT&T joined the Dow Jones Industrial Average . AT&T was removed in 1928 in favor of several bubbly "tech" companies near the height of the Roaring '20s (this was also the move that expanded the index from 20 to 30 components), but it returned to the index in 1939, where AT&T (as well as its post-divestiture Baby Bells) has remained to the present day. When AT&T began, it had a handful of customers. Today, there are more mobile phones in use than there are people alive in the world.
We've got all the natural gas we need right here
The worldwide oil industry is thousands of years old, but natural gas didn't start to enter the picture until the 19th century. In fact, the very first American natural-gas well was drilled by accident on July 9, 1815 in Charleston, W.Va., while workmen were digging out a salt brine well. The natural gas found here befuddled its discoverers, who could not figure out what to do with it. Other forms of gas, processed from coal, were put to use in Baltimore a year later, but natural gas remained a puzzle for decades until it was used, appropriately enough, to evaporate salt from briny water.
Today, West Virginia finds itself in the middle of a natural-gas boom, as major parts the Marcellus Shale lie beneath West Virginian land. Chesapeake Energy and EQT were two of the state's largest natural-gas producers during the early days of its boom, and thanks to the efforts of these (and other) dedicated drillers, West Virginia's natural-gas production doubled from 2008 to 2012. That's not quite so impressive as neighboring Pennsylvania, which has tapped the Marcellus for a nearly tenfold increase in monthly production during the same time frame.
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The article The Birth of the Telecom Industry and the Accidental Nat-Gas Bonanza originally appeared on Fool.com.Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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