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A Larger View
ADDRESS BY
A. C. LINDEMUTH
President International
Independent Telephone Association
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Published by
THE INTERNATIONAL INDEPENDENT
TELEPHONE ASSOCIATION
Monadnock Block, Chicago




“The Integrity of the Independent Telephone
System and its Universal Extension’’
OR ten years we have been building ex-
changes. Let us now build systems. For
ten years we have been building rapidly
and inadequately. Let us now build care-
fully and amply large. For ten years we
have been building for an extensive and
popular service. Let us now add to this a
more careful consideration of finances and
methods. For ten years we have been
building too much for the present. Let us
now build more for the future.
There are three stages or periods in the
history of the Independent telephone move-
º ment, or, rather, there have been two and
we are now entering upon the third. The first period may
be likened unto the “period of conquest,” which represents
the struggle with the Bell over the patents and which de-
termined the right of the Independents “to live, move and
have their being,” in the telephone world. Unlike most
revolutionary struggles, it was along purely legal lines,
wise, just, persistent and forceful; carried on by the gener-
ous and voluntary contributions of the people and crowned
with boundless success. Though a period of conquest, it
was not for the acquisition of new territory, but for the
recovery of the rights of the people. A popular revolt
against the intolerable conditions of abominable service,
discourteous treatment, exorbitant rates and ultra-conserva-
tive tendencies of an arrogant monopoly. We are some-
times criticized by the opposition for always speaking of
them as the monopoly, but why should we be criticized
when they themselves have always claimed and are preach-
ing to-day more persistently than ever, that the telephone
business is a “natural monopoly” and should be so owned
and carried on P. In its plan of organization, in the con-
duct of its business and in its beliefs and tendencies, it is
as thoroughly monopolistic as any monopoly in the country.
As contra-distinguished from the principles and policies
of the Independents it was and is as diametrically opposed
to them as two competitive systems could well be. There
have been some evidences of late of a change of heart, but
whether it be a change of principles or only a change of
method is worthy of more careful analysis. There have
been many changes before in the attitude of the Bell to-
wards the Independents. These changes, however, have
been principally in its methods of attack rather than in its
aims and desires. It is to be hoped that the recent pre-
tensions of our competitor are sincere and that the policy of
“rule or ruin” so long pursued by it has been abandoned
forever.
But the issues of that struggle over the patents were won

by the people, and the Independent telephone movement at
once started upon the second period of its history, “the
period of development.” This was the formative stage,
during which the Independent telephone exchanges sud-
denly sprang up all over the country, but especially in the
middle west; when scores of factories for the manufac-
ture and sale of Independent telephone equipment and hun-
dreds of firms for the supply of Independent telephone ac-
cessories appeared as if by magic, until there are, at the
present time, no fewer than IO,OOO Independent telephone
companies operating approximately 20,000 Independent
telephone exchanges in the United States and Canada, with
tens of thousands of miles of toll lines, occupying in whole
or in part all the states and territories of the Union and
of the provinces of Canada, having over 4,000 OOO of Inde-
pendent telephones installed and being supplied by upwards
of I,000 factories and supply houses, and altogether repre-
senting an investment of over $350,000,000. All this has
been accomplished in the short space of ten or twelve years.
No such record as this has ever before been made by an
enterprise in the commercial or industrial world.
It is true, that in the building up of this wonderful
industry or public service, we have made some mis-
takes. It would have been a miracle if we had not. Up
to that time the Bell company possessed a monopoly of the
telephone business and as a part of that monopoly it
retained within its exclusive circles practically all tele-
phone information. It has been wise unto cunning. No
records, history or technical information inimical to its
interests were allowed to escape to the public. For an
employe of that company to be so enterprising as to fur-
nish to the public prints an article on telephone subjects,
however technical, meant immediate reprimand or dismissal
from the service. We, the pioneers of the Independent
telephone movement—and I say “we, the pioneers,” be-
cause the enterprise is so young that only a few of the lead-
ers have departed, the great rank and file being still here—
were from all the various walks of life and necessarily inex-
perienced in the telephone business, but our hearts were
right and we were courageous, progressive and public
spirited, so that with “a willing mind there was a ready
hand.” Our aims were more patriotic than mercenary, and
the great wonder is that so few and fio greater mistakes
were made. But such as they are, they should be corrected
until our Independent system is as firmly established and
made as financially sound as money and business acumen
can make it.
During this period of Independent telephone develop-
ment many important things were demonstrated, one of
them being that the Independents could successfully con-
struct and operate a telephone exchange, and also the fact
that under the stimulus of sharp competition and by reason
of the many fresh, bright and active minds suddenly en-
listed in the cause and vigorously bent upon telephone con-
struction and equipment, it has resulted in the extension,
perfection and development of the art beyond the dreams
of the old and unprogressive monopoly. Modern service,
too, is equally as great a revelation over that of a dozen
years ago as is the mechanism and capabilities of recent
equipment over that of the old. It is but another instance
of the great benefit to humanity of free and unhampered
competition and of the induction of young, progressive
and vigorous minds into any worthy enterprise. Great
reforms in any sphere of life always appeal to the best
and in this respect the Independent telephone movement
was no exception. *
One of our mistakes—if it can be called a mistake where
no one was to blame—was in not being able to foretell the
wonderful growth and possibilities in the telephone business
ahead of us. As there never had been competition in the
telephone business before, there was no criterion by which
to anticipate its results. Hence, when we built for double
the capacity of our then known competitor, it was deemed
an ample provision for an immediate increased service as
well as for all reasonable future demands. A prediction of
the results which actually transpired would have been re-
garded as the dreams of an illusionist. For, at the advent
of the Independents into the field, ten or twelve years ago,
the Bell company, after having had exclusive control of
the business for about twenty years, had only about 300,000
telephones in the entire country, or less than the Inde-
pendent companies now have in the state of Ohio alone.
Under the stimulus of Independent competition, favored by
its policy of popular rates and expanded service to village
and rural communities, financed by local capital and man-
aged and controlled by local citizens, the telephone busi-
ness grew by leaps and bounds until within half the period
consumed by the Bell the number of telephone users in the
country increased twenty-five-fold, or to the enormous
degree of 2,500 per cent. In view of this stupendous
multiplication in telephone subscribers, which no one could
in saneness anticipate, we, in most cases, builded too small
and accepted a schedule of rates, fair and reasonable at the
time, but which are not now commensurate with the cost
and extent of the service. This inadequacy in rates should
be readjusted. Not restored to the exorbitant demands of
the old company, nor made unreasonable, but adjusted to a
standard which will defray cost of maintenance and opera-
tion, pay a reasonable return on the investment and provide
a reserve sufficient to renew the equipment when worn out
or the limit of its capacity reached. No reasonable person.
should object to this, and I have so much faith in the fair-
ness and intelligence of the American people, that, when
honestly and candidly appealed to, I believe the reasonable
needs of all Independent exchanges will be favorably met.
I know that it has been so in many of the towns and cities
during the last year, and I have no reason to believe that
the citizens of one community are less fair than those of
another. And the people may well heed these appeals, for
the benefits are mutual. They have profited immeasurably
in the past, by the competition which the Independents have
afforded and the continuance of that Independent compe-
tition upon a living and healthy basis is the only guaranty
for their future protection.
This brings me to the third epoch of our development,
which I have been pleased to designate as “the period of
commercial success and supremacy.”
It is true there is still some territory undeveloped and a
few of the larger cities of the land unoccupied by the In-
dependent telephone systems, yet if the policies contended
for by the Independents are sound and if legitimate compe-
tition in the telephone business has proven a benefit to the
people, then it is and can be only a mere question of time
when all unoccupied territory, both urban and rural, will be
fully developed. Its progress may be impeded for a time
by unfair or unlawful means, or by an unscrupulous literary
bureau and by appeals to the alleged interests and the
prejudices of the people, but the Independent policy of ex-
tensive telephone service at reasonable rates has come to
stay, and in the near future, we have all reason to expect,
will prevail everywhere. In fact, if we may judge by the
support which the people have given to the Independent
cause, in the past, the benefits of Independent and legitimate
competition have already been recognized and approved all
over the land. Our investment is already greater than that
of our competitor. We are supreme in the number of our
patrons. In territory where fully developed, we generally
excel in the extent and quantity of our construction, equip-
ment and service, and there are no superiors anywhere in
ingenuity and mechanical skill to those now enlisted in the
Independent field.
This being true, I know of no good reason why any
territory, however great or small, now occupied by the In-
dependents, should be surrendered to the enemy, or why
the policies of the Independents, which have proven so
sound and so beneficial to the people in the past, should
now be abandoned. Rather let them be more firmly estab-
lished and their advantages more widely extended. Hence,
I have adopted as the motto of this administration, “The
Integrity of the Independent Telephone System and Its
Universal Extension.” This motto implies the continuing
of the present Independent telephone system as a separate
and distinct system, extended into all undeveloped territory
RSITY OF MICH
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3 9015 08011 4526
whether in city or country, reorganized and strengthened
into a complete and effective whole. -
I am aware that this policy may involve the question of
continued commercial and legitimate competition and
whether such competition be beneficial. That this competi-
tion has proven most beneficial in the past has been both
demonstrated and acknowledged. What changes of condi-
tions have there been to reverse the rule? The best tele-
phone minds of the country have given it most, careful
consideration and none is yet prepared to say that under
present conditions the policy should be reversed. The
only persons I have yet heard to question the advantages of
legitimate competition at the present time have been em-
ployes of our competitor and a few laymen, who, finding it
necessary to use the telephones of both companies have
condemned it without having given the subject a broad and
careful consideration, and who, I fear, are not altogether
actuated by unselfish motives.
It is claimed by some that in telephone competition there
is duplication and economic waste. In what business, pray,
under modern civilization, is there not duplication and eco-
nomic waste? From the railroad and telegraph companies,
with their parallel lines and their duplicate machinery and
organizations, to the grocerymen, the ice men and the milk
men, who, with many unnecessary teams and drivers, criss-
cross each other's paths daily like a spider's web, we have
duplication and economic waste. Can there be greater
duplication and economic waste than here? What an enor-
mous saving to all owners would it be if all the same
classes of business of the country could be combined and
all duplication and waste eliminated. And yet it is not
done or permitted, to the end that trade may be unre-
strained and not reserved to a favored few, and to the
further end that the people may be served fairly and well,
or in other words, that the people may enjoy good service
at reasonable rates and without discrimination or favoritism.
And so firmly is the principle of legitimate competition
established and recognized that all the powers of the federal
government under the strenuous efforts of the President,
backed by the people, have been and are being brought to
bear to prevent any combination, coalition or merger
among large corporate interests tending to stifle or de-
stroy fair competition. The congress and the legislatures
of the various states have passed stringent enactments
against trusts and other unlawful combinations in restraint
of trade. One of the most conspicuous candidates for the
presidency, Mr. Taft, regarded it of so transcendent im-
portance, at this time, that at the Ohio state convention
only last week, he placed in the platform upon which he
desired to go before the people, the short but significant
planks, “commercial and industrial liberty” and “competi-
tion as against monopoly.” In view of these things, is it
not singular then that there should be those who advocate
the destruction of competition in the telephone business
and the monopolization of the service under one company?
The only possible unification of interest that could be
thought of under any conditions must be along the lines and
under the protective policy of the Independent system. So
whether there shall continue to be competition in the tele-
phone business must be left wholly with our adversary, for
the duty of the Independents is plain. It is “onward and
forward” until our supremacy and the ultimate safety of
the people are assured. -
The Independent telephone companies having always
recognized and approved regulation by law and cheerfully
accepted all reasonable limitations to safeguard the public
interests, they and they alone, can safely be entrusted to
furnish to the public adequate and efficient service at rea-
sonable rates in the absence of competition. Even without
regulation of law, or the right to do so, this would most
naturally be true, owing to the fact, that the Independent
system is composed of local companies, officered, financed,
managed and controlled by local citizens, whose interests
are identified with those whom they serve.
Nothing could be more ill-advised at this time than for
legislative or municipal bodies to undertake by law to force
physical connection between, or a consolidation of, the Bell
and Independent systems, and thereby stifle and destroy
legitimate competition. Although such a connection or
combination might prove beneficial temporarily to the com-
peting companies, its result would inevitably be detrimental
to the people by increasing the cost of service to the tele-
phone using public, and in the equally inevitable deteriora-
tion of the quality of the service and a certain loss of all the
many benefits which follow legitimate competition. Even
if these things are to be brought about, it should not be by
abrupt legislation, but through the natural evolution of fair
and legitimate competition.
Let our aim, then, be the planting of the Independent
system in all unoccupied territory whether city or country;
the reduction of maintenance cost and depreciation charges
by the best and most durable construction known to the
art; the readjustment of rates along adequate but conserva-
tive lines; the adoption of the most approved business
methods and a continuance of our recognized fair and
courteous treatment of the public. The interests of the pub-
lic and of the Independent telephone companies are one and
it is for the common good that the Independent telephone
movement should be strengthened and perpetuated through-
out the land. te