Vail, Theodore Newton

Theodore Newton Vail (July 16, 1845–April 16, 1920) was a senior executive with the company now known as AT&T at two of the most critical moments in its history:

• From 1878 to 1887, when the telephone began its voyage from fledgling invention to ubiquitous home and office appliance •
• From 1907 to 1919, when the company, beset by competitors and despised by its customers, moved from the brink of financial ruin to a de facto monopoly affectionately known as “Ma Bell”

Vail was hired for his experience in managing complex operations, but his real success stemmed from his view of public relations as a critical component of business strategy.

Vail was born in Ohio and raised in Morristown, New Jersey, where his father supervised an uncle's ironworks. His cousin, Alfred Vail, was a close associate of Samuel F. B. Morse and helped develop the telegraph at the ironworks, devising the dot-and-dash alphabet of Morse code. So it's not surprising that Theodore Vail was interested in telegraphy as a young man and took a job as a telegraph operator for Western Union in New York City when he was 19. In 1866, his father purchased a farm in Iowa, and young Vail moved with the family. After two years of farming and teaching, he became a night telegraph operator for the Union Pacific Railroad at a supply station in Wyoming territory as the railroad pushed its way west. The following year, he married a cousin from Newark, New Jersey, and they moved to Omaha, Nebraska, where he landed a job as a clerk with the Railway Mail Service. Vail devised a system for presorting mail on railroad cars and attracted the attention of the Railway Mail Superintendent in Washington, DC, who made him his special assistant in 1873. Vail applied his new system to rail routes across the country, and in 1876 he was promoted to Railway Mail Superintendent himself, becoming the youngest officer in the Railway Mail Service.

That same year, Congress established a commission to devise a better system for paying railroads to transport mail. Vail worked closely with the commission's chairman, Gardiner Greene Hubbard, who happened to be Alexander Graham Bell's father-in-law and one of his original backers. Hubbard was impressed with the young postal executive's energy and creativity. For his part, Vail was fascinated by the telephone, which had just been invented. In February 1878, Hubbard hired Vail as the Bell Telephone Company General Manager. At that point, the Bell Telephone Company was less than one year old and controlled by a small group of Boston-based investors. It was assigning franchises [Page 888]in major cities, renting telephone sets to the local operators, and taking an ownership position in their companies. But it was low on cash; its principal assets were the four basic patents Bell had filed less than two years earlier, and it was suing the powerful Western Union Company for infringing them.

Bell and Western Union settled their suit in 1879, basically agreeing to stay out of each other's business. With a patent position that would not expire for 17 years, the company reorganized itself into the American Bell Telephone Company, with Vail as its chief operating officer. By then, the company managed 133,000 telephones, including 55,000 turned over to it by Western Union, and it had a capitalization of over $7 million.

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