been assented to so far as its adoption seemed in the interest of convenient and economical management, but it should not be encouraged to an extent that would leave these companies entirely in the ownership of persons who are not residents in the territory where the business is carried on. It has always been our policy to keep local capital and influence interested in the business as far as possible, and to this course may probably be attributed a good part of the success which has attended the development of the business.
A year later the parent company reiterated the foregoing conclusions concerning care in consolidating companies and added:
In spite of the prevailing opinion that the development of the telephone substantially under one control is against public interest, we believe that an intelligent examination of this question would demonstrate that this is not true and that in no other way could the desired results be obtained and the difficulties be surmounted so rapidly and so well as by the present one.
Like the previous year, 1883 was a year of mergers; and when this two-year period closed, the number of Bell companies had been reduced, through absorption or consolidation, from several hundred to less than one hundred, and the parent company was gradually getting into a position where it could strongly influence the policy that should prevail.
In some states practically all the exchanges were absorbed by one strong company; in other states three or four companies aided in bringing about the consolidation, and then divided the territory. For instance, in the summer of 1882 the daily papers told how:
New York and Philadelphia capitalists are visiting various sections of Pennsylvania with a view to consolidate all local telephone companies between New York and Pittsburgh into one general organization, with main offices in New York, Philadelphia and Pittsburgh.
While the promoters failed in consummating so big an undertaking, their efforts paved the way for consolidations more limited in scope. In Massachusetts a combination known as the Lowell syndicate was quite successful in consolidating many exchanges, some of which will be more fully referred to in a following chapter.
Referring to the numerous consolidations of small local licensee companies into new organizations chartered to work on broader plans, the parent Bell company in its annual report for 1883 stated that:
the tendency towards consolidation of telephone companies noticed in our last report has continued and is for the most part in the interest of economical and convenient handling of the business. . . . As methods are devised for making the telephone commercially useful over long lines, the advantages of this centralization of management will be still more apparent, as well as the importance to the public of having the business dona in large territories under one responsible head, with far-reaching connections throughout the whole country. To make this service of the highest value to the people will be complicated enough under one control. Were it in the hands of many competing companies, the confusion resulting would be very serious, as the value of the telephone will be largely measured by its capacity to give prompt connection with all parts of the country.
