The International Centennial Exhibition was a grand celebration. The largest fair in American history, it was staged in Philadelphia’s Fairmount Park to commemorate the hundredth anniversary of the signing of the Declaration of Independence. Almost 10 million people would see it.

The spectacle opened on May 10, 1876, boasting more than 250 structures, including a main building over a third of a mile long. There were many state halls, buildings exhibiting technological and industrial advances, and international exhibits from thirty-seven foreign countries: scandalous art and sculpture from Europe, fishnets from Norway, guns from Germany. Venezuela sent a picture of George Washington woven from Simon Bolivar’s hair. France’s contribution was the actual arm and torch from Bartholdi’s still-incomplete Statue of Liberty.

President Ulysses S. Grant, accompanied by Dom Pedro, Emperor of Brazil, and Empress Teresa, delivered the opening address, and the two men pulled a lever activating a huge, 1,500-horsepower Corliss steam engine to open the display. Popular patriotic songs were played (America had no national anthem yet) followed by Richard Wagner’s “Centennial March,” a ponderous composition that had cost the government $5,000.

There was no better place on earth in 1876 to introduce a new invention. Gardiner Hubbard, a member of the Massachusetts Centennial Committee for the education and science exhibit, had Bell’s name published in two places on the list of exhibitors: as an exhibitor of Visible Speech and among those displaying new technology.

Hubbard’s frustrations with his protégé had continued that spring, when Bell was considering a full-time teaching position. In an April 26, 1876, letter to his future son-in-law, it is easy to sense the warring emotions Hubbard, the orderly businessman, felt about Bell, the erratic genius: “If you could work as other men do you would accomplish much more than with your present habits. But you must overcome these habits by your own will, and not by rules imposed by a college faculty and President. . . . While you are flying from one thing to another you may accidentally accomplish something but you probably will never perfect anything. If you did not neglect the main thing, you would have been successful long ago. If you could make one good invention in the telegraph field you would secure an annual income as much as a Professorship and then you could settle that on your wife and teach Visible Speech and experiment in telegraphy with an easy and undisturbed conscience.”

Bell saw painful truths in the letter, along with what he believed was some bad advice. Alec would work hard on the multiple telegraph, but he believed that the telephone was the “one good invention” that would unite him with Mabel. Bell continued to follow his own instincts, and he worked hard. By late April 1876, both the liquid variable-resistance and magneto telephones functioned, and Bell improved his multiple telegraph equipment as well.

Bell began to show his new inventions on a small scale, first in a demonstration before a group of Harvard professors early in May. He wrote his parents that his audience had been able to distinguish vowel sounds and parts of Hamlet’s final soliloquy over the telephone wires. On May 25, at the Massachusetts Institute of Technology, Bell demonstrated functional telephones for the first time in public. The Boston Transcript reported that occasional sentences from the device “would come out with startling distinctness.”

These successful events were satisfying, but Bell and his backers knew that the time had come to unveil the telephone before a far larger audience. The week before the judging of electrical exhibits at the Centennial Exhibition, Mabel Hubbard took Bell to the Boston railway station and coaxed him onto a southbound train. Confronting the world scientific community in competition with other inventors was a prospect that filled him with fear, but Bell boarded the train. He met Gardiner Hubbard in New York, traveled to Philadelphia with him, and registered at the Grand Villa Hotel, where three judges of electrical apparatus were also staying. Bell introduced himself to Sir William Thomson, head of the judging panel, discovering with delight that Thomson was also a Scot.

Sunday, June 25, was the date set for judging Bell’s exhibit - and Elisha Gray’s harmonic and multiple telegraphs as well. By now, William Orton had purchased the rights to Gray’s work, and Gray’s equipment was proudly displayed in the lavish Western Union exhibit. Intimidated, Bell wrote to his parents: “I am afraid also that the effects I can produce will be much feebler than his as he has every advantage that the Western Union Telegraph Company can give him. My only chance consists in having my apparatus for the transmission of vocal sounds a success. If I am allowed to talk and explain I am all right - for I am sure of my theory.”

To make matters worse, Bell’s equipment arrived damaged in Philadelphia, and he feverishly made repairs. Writing from home, Mabel Hubbard offered steady encouragement, which fortified him. She celebrated his place among the great men gathered around him. She urged that “if you but persevere success must come.” In addition, she let Bell know she was heartsick without him, giving him someone to return to, no matter what: “How I miss you. . . . But I am satisfied when I remember where you are. And when you come home, the duty will have been done and the opportunity taken hold of.”

In fact, once he settled down, Bell was seized by the mood of the exhibition. He met and conversed with other scientists, including Rudolph Koenig, inventor of the manometric flame. He realized that this setting could be the grandest stage on which he would ever perform.

June 25 finally came, and officials closed the Centennial grounds to the public, it being a Sunday. It was unbearably hot in the cavernous main building, a gigantic glass-enclosed shed admitting a blistering summer sun. Fifty scientists and dignitaries gathered in stifling formal dress at the Western Union exhibit on the main floor.

Elisha Gray demonstrated his harmonic and multiple telegraphs, aided by theoretical asides from Professor George F. Barker of the University of Pennsylvania. Gray’s electrical transmission of music across 300 feet, including “Home Sweet Home,” was as loud and clear as Bell had feared. It caused a sensation. Excited spectators whispered “Hush, Hush!” at the constant exclamations that almost drowned out the tunes being played on Gray’s invention. Gray was a hard act to follow.

In the end, it was Dom Pedro, the Brazilian emperor, who came to Bell’s rescue. He had visited the Boston School for the Deaf that spring and he had met Bell, who agreed to send the emperor Melville’s books on Visible Speech. Now the Brazilian, who handled the summer heat easily, picked Bell out of the hot, wilted crowd, and went over to him to ask after his Boston students and thank him for the books. Heads turned, and perspiring judges reluctantly followed the two men and Gardiner Hubbard’s nephew Willie Hubbard, assigned to help Bell. The party traversed the huge building, climbing stairs to the remote East Gallery where Bell’s inventions, including telephone receivers, sat on a spartan wooden table.

Alec first explained the theory behind his work and then operated his telegraph equipment - telautograph, multiple telegraph receivers and transmitters, and a modified Koenig manometric flame. Sir William and Dom Pedro then used the Bell multiple telegraph simultaneously.

In a letter to his parents two days later, Bell described what happened next: “I then explained the ‘Undulatory Theory’ and offered to test the transmission of the human voice. I stated however that this was ‘an invention in embryo.’ I trusted that they would recognize firstly that the pitch of the voice was audible and secondly that there was an effect of articulation. I then went into a distant room and sang into the telephone. Willie Hubbard told me what happened.

“Sir William listened and heard my voice distinctly. I then articulated the sentence ‘Do you understand what I say.’ Sir William started up exclaiming ‘Do you understand what I say.’ He listened again and said ‘Yes - do you - understand - what I say.’ He then exclaimed quite excitedly ‘Where is Mr. Bell - I must see Mr. Bell.’ Willie pioneered the way - but Sir William ran along before him and came suddenly upon me shouting ‘Do you understand what I say’ - He said ‘I heard the words’ ‘what I say’ - He then requested me to sing and then recite something.

“Willie told me afterwards that he listened to my voice and then started up with the exclamation ‘To be or not to be.’ The Emperor then listened and exclaimed in surprise in his broken English ‘I have heard - I have heard’ and then listened again.”

Elisha Gray listened, finally discerning some words from Hamlet’s soliloquy: “Aye, there’s the rub.” He later admitted that these were the first words he ever heard on an electric telephone - and he turned to the assembled scientists and repeated them. The group cheered.

Later that day, Gray and Bell seemed to patch up their differences and pledged to help each other in multiple telegraphy. Bell returned that same night to Boston and his students’ end-of-term exams.

One version of history has Gray consulting the design in his caveat and feverishly constructing a telephone that did not work that night in Philadelphia. Another states that the inventor had, in fact, brought a completed telephone with him to the exhibition but had not tested it yet. In any case, the next day, he found some of the judges on the panel and insisted that Bell’s telephone was acoustic (working much as two tin cans attached by a wire would), and that the voice could not possibly have been carried by an electric current. Perhaps experimentation on his own invention had made him skeptical about Bell’s.

However, Joseph Henry’s “General Report of the Judges” at the Centennial called Bell’s invention “the greatest marvel hitherto achieved by the telegraph.” Thompson’s “Report on Awards” echoed Henry: “I was astonished and delighted; so were the others, including some judges of our group who witnessed the experiments and verified with their own ears the electric transmission of speech.”

Gray won a medal and extensive press coverage for his harmonic telegraph. Alec received a medal for the telephone (though not until months had passed, since he kept avoiding the necessary paperwork), which the press ignored that summer, and Visible Speech, entered in the education competition, won no recognition at all.

Now the Bell partnership would tackle the crucial next phase of the development of the telephone, the establishment of a profitable telephone business. Sanders would bankroll the inventions while Hubbard plotted business strategy. Bell was no longer writing and speaking melodramatically of a great day. Now he was living as a witness to his own rapidly expanding legend.

Bell continued working in Boston that summer, attending Fourth of July celebrations with Mabel, before finally leaving for a break in Brantford. He took his telephones with him. Once home in Canada, he ran wires out the window of his upstairs bedroom, around the house, and back in again, and tested the equipment late at night by talking to himself. Working alone, he staged the first successful telephone tests over long outdoor lines.

Bell bought up all the cheap iron stovepipe wire available in Brantford, and with the help of two farmers, who wondered privately if he was mad, strung it off the back of a buggy. It ran from the Bell house to Brantford’s telegraph office, which was connected by telegraph line to Mount Pleasant, Ontario. Alec then installed a phone at each site and returned home to run another line out of the house to an outbuilding in the back. At a party for Cousin Edward Bell, visitors and family happily tested the telephone, sending music and voice along the lines. The Toronto Globe carried a minuscule item about the tests in the August 11, 1876, issue.

In a second test with more demanding engineering, Bell again used existing telegraph lines, this time between Brantford and Paris, Ontario, eight miles away. He powered his phones with a battery tied into the circuit from Toronto, sixty-eight miles up the line. Using a three-way mouthpiece, Bell transmitted the voices of three singers at once, proving multiple signals could share a single phone line.

Early in October, Bell and Watson had their first two-way telephone conversation between rooms at 5 Exeter Place. They planned a more ambitious experiment for October 9, during which they conversed by telephone across two miles of telegraph wire between the Boston office and the Cambridgeport factory of the Walworth Manufacturing Company. The conversation appeared verbatim in the October 19, 1876, issue of the Boston Daily Advertiser.

Despite all these steps forward, Bell was still broke, begging lunch money from Watson. He wrote to Melville and Eliza asking for money to make it possible to apply for patents overseas; he estimated that he needed $925 to file in Europe’s biggest markets. Alec warned his parents “to send dispatch so as not to pass over the Western Union lines.”

By December, Bell and Watson had reached the limit of their telephone’s range. Carried on a railway telegraph line from North Conway, New Hampshire, Watson’s voice was barely discernible through the static in Boston, 143 miles away.

Earlier that year William Orton had dismissed the Bell telephone as a toy. But a wildly successful lecture Bell gave on the telephone in New York changed his mind, and Orton grew interested. Still, late in 1876, when Gardiner Hubbard offered to sell Western Union the rights to the Bell telephone for $100,000, Orton turned it down, apparently still smarting from his old rivalry with Hubbard, and so the most rational course for everyone - to incorporate Bell telephones into Western Union’s impressive existing wire network - was lost. William Orton became the man who refused to buy the most profitable invention in recorded history.

Instead, he would soon try to steal it. In early 1877, Orton quietly told Thomas Edison to drop his work on multiple telegraphy and focus on telephones, hoping to better Bell and Hubbard’s group. That summer Edison began experimenting with different voice transmission schemes, soon developing a transmitter that used a compressed piece of carbon secured to a metal diaphragm. Edison’s telephone was much louder and clearer than Bell’s.

In December 1877, Orton set up the American Speaking Telephone Company, creating a telephone patent pool with the inventions of Amos E. Dolbear, Elisha Gray, and Thomas Edison. Now the Bell partnership would have to defend its own patents not only against every American electrical inventor of consequence, but against an entrenched corporation worth $41 million while simultaneously building a national telephone business from the ground up.

Reading about magnetism one day early in 1877, Watson came upon a reference to a compound permanent magnet and replaced the electromagnets in Bell magneto telephones with compound magnets. Bell wrote a patent to cover this work and other improvements. This second Bell telephone patent was granted quickly, ensuring that no competitive magneto telephone designs would be allowed until 1894 - United States patent law granted inventors seventeen years to exploit their inventions exclusively.

Lecturing on the telephone began to take up more and more of Bell’s time. With Joseph Henry at his side, Bell spoke before the Washington Philosophical Society in January 1877. The next month, he appeared before a packed house in Salem, Massachusetts, as Watson both sang and spoke to the crowd by telephone from Boston. The event was such a success that the town fathers insisted on a repeat performance. Alec spent the money he earned from the Salem event on a unique piece of jewelry, a miniature silver telephone, for Mabel Hubbard. Between lectures in Rhode Island, Connecticut, Massachusetts, and New York, Bell and Watson refined their equipment, substituting a metal plate for the membrane diaphragm to improve telephone signal quality once again.

In March 1877, an article appeared in the Chicago Tribune claiming that Elisha Gray had invented the telephone. This provoked a series of letters between the two inventors, and in one, Gray credited the invention to Bell, admitting he had not built a working telephone before his rival. Again the two men made peace.

But on April 7, 1877, a former reporter and current Bell business associate named John Ponton wrote Bell with a warning: “About two weeks ago [Mr. Gray] tried a private experiment with your speaking telephone between Chicago and Buffalo for Mr. Orton in whose employ he is. According to all accounts it was a most wonderful success, every word being heard clearly and distinctly. This interference must be attended to at once or it may cause us a great deal of trouble.” Ponton’s words could not have been any clearer, but it appears that Bell ignored the warning, perhaps because of Gray’s personal assurances.

Early in 1877, the Bell phone looked like an old wet-plate box camera, with a single lens-like opening that served as combination mouth and earpiece. Callers spoke into it and then turned their heads to listen. In May, Bell and Watson developed the “butterstamp” receiver, a handheld receiver-transmitter that made conversation - and interruption - simpler.

In the meantime, the business of telephones was beginning to take off. Hubbard had decided to lease Bell telephones - not sell them - to homes and businesses, maintaining control of both the device and the system. Orders began to come in, but Hubbard’s policy, however wise in the long term, limited early financial returns at a time the company was struggling to survive.

A circular Hubbard had printed in May 1877 promoted “telephones for the transmission of articulate speech through instruments not more than twenty miles apart. Conversation can be easily carried on after slight practice and with occasional repetition of a word or sentence.” The advertisement praised the telephone’s advantages over the telegraph - many more words per minute, relative privacy, economy, and reliability. Most of all, anyone could use a telephone, at any time.

The rates: “The terms for leasing two telephones for social purposes connecting a dwelling house with any other building will be $20 a year, for business purposes, $40 a year.” There was an additional fee to install the lines. Orders were to be placed through Thomas Watson, 109 Court Street, Boston.

On July 4,1877, just a year after Bell’s Centennial demonstration, Thomas Watson counted at least 200 telephones in service. By August 1, the figure had risen to 778. Gardiner Greene Hubbard, now firmly behind this invention, happily wrote attorney Anthony Pollok: “The telephones are doing very well,” and continued to seek investors and answer queries from across North America.

One of the earliest customers was Edwin T. Holmes, owner of a Boston company that made burglar and fire alarms, who installed phones between his clients and his office in May 1877. All of Holmes’s lines converged on a group of telephones placed side by side, making it possible to listen and relay spoken messages from one telephone to another. Charles Williams, who helped oversee the manufacture of Bell telephones, installed the first private residential phone line from his shop to his home three miles away. The Cambridge Board of Water Works installed a line as well.

Of course, the telephone was not limited to the Boston area. In Hartford, Connecticut, for example, the Capitol Avenue Drug Store and a group of doctors hooked up, enabling physicians to authorize prescriptions by telephone without having to leave home.

Capitalists in other regions wanted a piece of the Bell invention, and Hubbard let them have one, under license. In this way, on August 27, 1877, Hilborne L. Roosevelt incorporated the New York Telephone Company. That summer, one of New York Telephone’s first lines crossed the East River on the towers of the incomplete Brooklyn Bridge; it connected J. Lloyd Haigh’s Manhattan wire company headquarters with his Brooklyn factory.

Bell elected his father as owner of the Canadian telephone patents, and on August 29, 1877, Melville hooked up three homes in Brantford on a single wire, creating an early party line. Next Melville connected the Canadian Prime Minister’s office to the home of the Governor General and rented them two telephones, each for $42.50 a year. By the end of August 1877, the North American telephone count had hit 1,100. Telephones were operating in Chicago, Philadelphia, and even in San Francisco, where Hubbard’s brother Samuel built a demonstration line for local businesses.

Elisha Gray was also cashing in, lecturing with his harmonic telegraph and a perfected telephone. That spring, Mrs. Hubbard bought Bell a ticket for Gray’s April 2 appearance in New York. Gertrude did not like Bell lecturing - “it savors too much of Barnum” - but she thought he should check out the competition. As reported in The New York Times, Gray singled Bell out in the crowd and acknowledged him as the inventor of the speaking telephone.

In the spring of 1877, the Hubbards decided that Alec and Mabel should be married at the earliest opportunity. A surprised and grateful Alec wrote his parents - “In fact they urge me very strongly to marry at once. . . . They say that I will never be well and strong until I have some one to look after me.”

In a modest ceremony at the Hubbard’s Cambridge home on July 11, 1877, nineteen-year-old Mabel Hubbard and thirty-year-old Alexander Graham Bell were married. Mabel later remembered the scent of lilies placed around the room. Her gown, she wrote, was “perfectly simple, all one piece from neck to feet.” As wedding gifts Alec gave Mabel a cross of eleven pearls, and 1,497 shares of Bell Telephone stock, keeping only ten shares for himself. The newlyweds took off on a brief honeymoon to Niagara Falls, with a stopover in Brantford, where Mabel met Eliza for the first time. “Mrs. Bell is just as nice and kind as she can be, so bright and quick,” Mabel wrote to her parents.

A longer wedding trip began in August 1877. The newlyweds arrived in England to find that Bell was famous. Alec lectured, and the couple was dined and feted by the cream of English society. Bell even demonstrated the telephone for Queen Victoria. Late in October he wrote to Gardiner Hubbard for advice in introducing his invention in Europe. Money was tight, and Mabel was expecting a child in the spring: “The only thing is that business (which is hateful to me at all times) would fetter me as an inventor. Still I must do something for a living and do it now.” Hubbard advised Bell to go slow and to use the agents he had hired to help introduce phones to each European country.

The Bells stayed on in England, for doctors advised against an Atlantic crossing until after the baby’s birth. Elsie May Bell arrived at quarter of seven on May 10, 1878, according to a letter home from Alec, “with as lusty a shout as ever demonstrated the possession of a healthy pair of lungs.”

After almost a year it was clear that Bell had done little to establish the telephone in Europe. Hubbard himself took over before Edison and Gray could sweep the continent. Now at the peak of his inventing power, Edison had devised a novel kind of receiver that allowed his company access to the British market without a Bell patent license.

Back home in the United States, both the Bell and Western Union systems continued to extend their reach. Railroads quickly distributed phones across the American west to those with the money to get them. By 1878 in southeastern Colorado, the Prairie and J.J. Cattle Companies installed a private telephone network across 150 miles of ranch land using fenceposts. Denver put in a Western Union telephone exchange. Telephones were reported in use in New Mexico to connect timber and gold camps on the Maxwell Land Grant. California mining companies built lines from camp to camp, including the state’s first long-distance line, connecting York and Liberty Hill, on January 22, 1878.

The rise of the telephone - and the striking advantage Western Union had over the Bell system - is shown by the fact that, on reaching a new market, Western Union, with its wire network already in place, often hooked up telephones to existing spare lines. Conversely, Bell workers typically straggled into town desperately stringing new wire on the heels of well-equipped Western Union crews. The result was that by the end of 1878 major urban markets had not one but two competing telephone systems.

By this time Western Union phones were using Edison’s carbon-button transmitter. This advantage might have doomed Bell Telephone, but for the work of Emile Berliner and Francis Blake, two inventors who came up with even better designs. After seeing Berliner’s transmitter, Watson purchased it on the spot and brought Berliner, a Washington dry-goods clerk, into the company. Showing remarkable faith in Bell Telephone, Blake even accepted Bell Company stock as payment in exchange for his new transmitter.

Still, by late in 1877 investors, resigned to a Western Union takeover, wrote off Bell Telephone. Bell stock prices stayed low, and Western Union began quietly buying it up.

Gardiner Hubbard decided it was time to fight back against Western Union. He began to prepare a patent suit, picking Peter A. Dowd, a Springfield, Massachusetts, Western Union agent and distributor, as the infringer. Hubbard also hired a brilliant young U.S. Postal System official, Theodore N. Vail (at $3,500 a year including an annual bonus) as general manager of Bell Telephone. Vail’s first act was to send a copy of the first Bell patent to all Bell agents and advise them to stand fast against Western Union harassment and infringement.

Throughout the fall of 1878, Western Union maintained a relentless drumbeat of publicity: Bell had stolen the telephone from Gray; Bell was not a skilled enough electrician to have invented anything; the U.S. Patent Office was crooked and had shared patent information illegally. It was an assault widespread enough to cripple Bell Telephone, even with Alec’s two telephone patents and the excitement of the telephone’s introduction still clear in public memory.

Thomas Sanders’s fortune had been exhausted early in 1878 by the pace of expansion. Desperate to save their company, the Bell partnership gave up control to a group of Boston financiers in return for new investment capital. One of Bell Telephone’s new investors, Colonel William H. Forbes, a Boston blue blood and Civil War hero, took over the presidency. The new management created the New England Telephone Company to franchise phone companies in New England and the Bell Telephone Company in New York to handle the rest of the country.

Throughout 1879 Forbes and Vail battled Western Union in the field. Bell Telephone hopelessly trailed Western Union in major telephone markets just as Charles Williams’ shop was outclassed in manufacturing by the Western Electric Company in Chicago.

Then an unlikely ally appeared - Jay Gould, one of America’s great corporate raiders, whose reach extended from railroads to gold to newspapers. Gould launched a takeover battle on Western Union’s stock as Western Union bullied Bell Telephone.

The Dowd Western Union patent infringement suit was set to go to trial in thefall of 1879. That spring Bell Telephone stock lingered at just above $50 a share with no takers, except Western Union.

The Bells were frightened. Their security was at stake, and they were almost out of money. What if the suit went badly? Mabel wrote her father seeking to liquidate her stock: “The stock remains so large Alec will be constantly bothered by the Company who will desire his vote, and he will be obliged to take an interest in their affairs which he does not desire to do, nor is fitted for. Then of course we want the money. Alec is so anxious to sell that he would be willing to take seventy five dollars if you could find purchasers who would act with you. If not he still desires to sell for as much as he can get.”

As pretrial depositions were taken, on April 4, 1879, Alec wrote Melville jubilantly: “First day of Elisha Gray’s Cross-Examination just concluded. Everything coming out in our favour. Counsel hope to obtain injunction inside of three weeks. Delay your suits - and if you sell your patents - don’t sell too cheap. It will all come out right.”

As the Bell attorneys, including Chauncey Smith, James J. Storrow, and Anthony Pollok, made their case, a chill settled in on Western Union chief counsel George Gifford. He was likely worried about Gould’s raid. Also, he knew that no skilled reader of the Bell patent and the Gray caveat could prove that one man had stolen from the other. The reasoning and interpretations in each were similar but arrived at differently. Bell’s patents and legal proofs were superior, carefully gathered before Gray began to take the telephone seriously.

Bell’s own testimony was crucial. Attorneys on both sides discovered that Bell’s almost photographic memory coupled with his natural speaking presence made him a terrific witness. Bell quietly detailed the sequence of events around his telephone patent submission in 1876, including the controversial variable-resistance clause, added to the margin of his patent with Wilber’s permission.

And then there were other witnesses, including Gray himself, who admitted Bell had demonstrated the first working speaking telephone. Most damning of all for Western Union was Elisha Gray’s letter to Bell on March 5, 1877, composed as the two men grappled with claims in the Chicago Tribune. Gray had written, in his own handwriting: “I do not, however, claim even the credit of inventing it, as I do not believe a mere description of an idea that has never been reduced to practice in the strict sense of that phrase should be dignified with the name invention.” A lawyer next to Gray in court looked mournfully at his client as Gray reputedly confirmed the letter as genuine and said to him, “I must swear to it. You can swear at it!”

Other grounds for the suit were no stronger. Thomas Edison, for example, had designed his transmitter after the Centennial demonstration. This left as possible winning issues only fraud in the Patent Office - which was hard to prove - and Amos Dolbear’s invention of a magneto transmitter. Although Dolbear’s work was not quite simultaneous with the discovery by Watson early in 1877 of the compound magnet transmitter, Dolbear’s claim still looked the best, though it would cover only magneto phones. On balance, Western Union decided that the risks were too great to continue its defense.

Attorney Gifford offered to settle with Chauncey Smith. He demanded half of Bell Telephone, but Smith refused. As negotiations picked up again in New York, and observers watched the tiny company successfully battle the powerful monopoly, Bell stock slowly began to rise. Alec and Mabel watched hopefully, unsure of the outcome. They had sold about 700 of her shares of Bell Telephone, but her remaining 810 shares still represented a small fortune in 1879.

Soon they began to cash in. On September 9 Alec wrote Melville: “I sold two hundred shares for Mabel yesterday at three hundred dollars a share which places us in possession of $93,000 in addition to the $12,000 received from the English Telephone Company. We have still left 600 shares which we could sell today at $337 per share so our remaining American stock is worth over $200,000.”

Just a month later on October 10, 1879, Alec wrote again: “Shares are now setting at $500 per share - and I have offered one lot of fifty shares at that figure to one person - and another lot of fifty to another person at $525.” And again on December 20, 1879: “I calculate our shares to be worth about seven hundred ($700) dollars so that one thousand ($1000) is a speculative value. I intend to sell another hundred shares at a thousand dollars if I can.”

By this time, Western Union had folded its hand to avoid a disastrous trial. On November 10, 1879, Gifford directed Western Union to sign an out-of-court deal by which Western Union transferred at cost all telephones, lines, switchboards, patent rights in telephony, and any pending claims belonging to Western Union to the Bell Telephone Company. In return, Bell agreed to stay out of telegraphy and to pay Western Union 20 percent of all telephone receipts for the next seventeen years. It was a stunning victory for Bell. After only two short years in the telephone business Bell Telephone shareholders held title to a successful monopoly with fourteen years left to run.

However, an out-of-court settlement did nothing to extinguish the claims of Dolbear, Edison, and Gray - each of whom could and did pick another time and courtroom to sue Bell Telephone. Telephones were profitable and the money was tempting. A round of new patent suits was prepared.

And being a monopoly had another price as well: When the press and public rose up in condemnation of the robber barons who controlled the railroad, finance, and telegraphy monopolies, Bell and his telephone company, so recently a popular underdog, were condemned as harshly as the rest.