Promoting Monopoly

Names: Russell, Karen Miller, author.
Title: Promoting monopoly: AT&T and the politics of public relations,
1876–1941 / Karen Miller Russell.
Description: 1 Edition. | New York: Peter Lang Publishing, 2020.
Series: AEJMC—Peter Lang scholarsourcing series; vol. 5
ISSN 2373-6976 (print) | ISSN 2373-6984 (online)
Includes bibliographical references and index.
Identifiers: LCCN 2019058241 | ISBN 978-1-4331-4733-3 (hardback: alk. paper)
ISBN 978-1-4331-4734-0 (paperback: alk. paper) | ISBN 978-1-4331-4735-7 (ebook pdf )
ISBN 978-1-4331-4736-4 (epub) | ISBN 978-1-4331-4737-1 (mobi)
Subjects: LCSH: American Telephone and Telegraph Company. | Telephone
companies—United States. | Telephone—Law and legislation—United
States. | Telecommunication—Law and legislation—United States. |
Public relations—United States.
Classification: LCC HE8846.A55 R87 2020 (print) | LCC HE8846.A55
(ebook) | DDC 659.2/93846097309041—dc23
LC record available at https://lccn.loc.gov/2019058241
LC ebook record available at https://lccn.loc.gov/2019058242
DOI 10.3726/b16633

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Nationalbibliografie”; detailed bibliographic data are available
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About the author

Karen Miller Russell (Ph.D., University of Wisconsin-Madison) is Jim Kennedy Professor of New Media and Josiah Meigs Distinguished Teaching Professor at the University of Georgia. She is the author of The Voice of Business: Hill & Knowlton and Postwar Public Relations.

About the book

Since the invention of the telephone in 1876, publicity has been central to the growth of the industry. In its earliest years the Bell company enjoyed a patent monopoly, but after Alexander Graham Bell’s patents expired, it had to fight competitors, the public, and the U.S. government to maintain control of the telephone network. It used every means its executives could imagine, and that included constructing one of the earliest and most effective public relations programs of its time. This book analyzes the development of public relations at AT&T, starting with a previously forgotten publicist, William A. Hovey, and then including James D. Ellsworth and Arthur W. Page, who worked with other Bell executives to create a company where public relations permeated almost every aspect of work, leveraging employee programs, stock sales, and technological research for PR. Critics accused it of disseminating propaganda, but the desire to promote and protect the Bell monopoly propelled the creation of a corporate public relations program that also shaped the legal, political, media, and cultural landscape.

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This edition of the eBook can be cited. To enable this we have marked the start and end of a page. In cases where a word straddles a page break, the marker is placed inside the word at exactly the same position as in the physical book. This means that occasionally a word might be bifurcated by this marker.

List of Illustrations

Preface

Acknowledgements

1 “A Necessary Adjunct to Nearly All Commercial Enterprises”: The Rise of Corporate Publicity in the United States

2 “To Undertake Something in the Missionary Line”: William A. Hovey and Corporate Publicity at American Bell, 1876–1903

3 “A Largely Random Basis”: AT&T, Competition, and the Publicity Bureau, 1903–1907

4 “One Policy, One System, Universal Service”: Educating the Public, 1908–1913

5 “We Are Really Governed by Publicity”: Institutionalizing Public Relations, 1913–1926

6 “To Serve Well We Must Earn Well”: AT&T’s Financial Policy and the Great Depression, 1927–1934

7 “All Business in a Democratic Country … Exists by Public Approval”: The FCC Investigation, 1935–1941

Conclusion “The Number One Public Relations Post in Industry”: AT&T in U.S. Public Relations History

Index

Illustrations

Figure 2.1 Alexander Graham Bell opens the Chicago line (1892)

Figure 2.2 Operators working the switchboard at the Columbian Exhibition (1893)

Figure 4.1 Two advertisements created by journalists and run in the Rochester newspapers (1908)

Figure 5.1 Thomas Watson exhibits an early telephone device (1928)

Figure 6.1 Walter Gifford speaks to Paris (1928)

Preface

This book traces the history of public relations at American Telephone and Telegraph from its roots as a patent monopoly, through a period of intense competition, to a return to monopoly that made it the largest company in the world. Publicity began with exciting demonstrations of the telephone, which invigorated press coverage of the rapidly developing technology in the 1870s and 1880s. It continued with William Hovey, who experimented with dealing with the press in 1886 and with face-to-face communication with the public at the 1893 World’s Fair. In 1903 the company hired an external agency, the Publicity Bureau, and finally it formed an internal Information Department led by James Ellsworth starting in 1910 and by Arthur Page in 1927. As AT&T promoted monopoly, it also developed a publicity program that other companies envied, and then emulated.

But corporate publicity was never confined to one department at AT&T; public relations thinking occupied many executives and departments. Public relations could not be managed by one person or department partly because of the Bell System’s sheer size, but mostly because its entire existence hinged on public support for its status as a private, regulated monopoly. In fact, the programs were so numerous and massive that I have not attempted to document them all, mentioning only in passing, for instance, Western Electric’s farm and technical publication program or AT&T’s 1919 rate increase campaign. Instead I have focused ←xi | xii→on the development of corporate publicity and public relations necessitated by its continuous drive to garner public support and avoid, as much as possible, government interference in its business.

Critics have long recognized a connection between public relations and politics in the United States. Writing in the 1950s, the journalist Irwin Ross stated, “What PR is trying to sell, in an ultimate sense, are the merits of a particular corporation, and the merits of the American capitalist system.” More recently Robert E. Brown has argued, “PR is not political in part but thoroughly—structurally, historically, continuingly. Its very nature is political …”¹ This analysis of Bell’s publicity from its founding through the Great Depression confirms that politics, and to a lesser extent the need to sell the service, drove the development of corporate public relations in the U.S. telephone industry. Promoting and then protecting its monopoly status influenced management decision-making and pushed executives to innovate public relations strategies and tactics.

Chapter Overview

To set the stage for understanding the development of the public relations function at AT&T, Chapter 1 reviews scholarship on publicity and press agentry before the turn of the twentieth century. Early histories of corporate public relations typically start around 1900, with the formation of the Publicity Bureau in Boston, and in 1904 with the founding of Parker & Lee in New York. More recently, however, scholars have developed a better understanding of early publicity efforts in other sectors, particularly politics and nonprofit organizations that, collected here, provide a better understanding of why and how public relations emerged in corporations.

Chapter 2 begins with an examination of the early history of the telephone in American history, including attempts by Bell Telephone’s founders to draw attention to their invention and company, and then introduces a previously unknown Bell publicist, William A. Hovey. The chapter shows how he began the company’s efforts to develop a media relations program, but also to communicate with stakeholders—employees and stockholders—directly, and how he urged a degree of transparency that would have served the company well in later years. Hovey traveled to cities where the press and public opinion were fervently anti-Bell, organized publicity opportunities such as the opening of the New York to Chicago line, a 940-mile technological marvel, in 1892, and helped to organize and run Bell’s exhibit at the 1893 World’s Fair. Underpinning these efforts was the ←xii | xiii→notion that Bell offered such good service that subscribers should remain with the company after Bell’s patent monopoly ended in 1893–94. But the publicity was sporadic and lacked a clear message, and when the patents expired, the company had no plan to counter the rapid rise of competition.

By 1913 most Americans seemed convinced that a single telephone system was best – the apparent alternative was for businesses and individuals to subscribe to more than one – but another threat came to the fore: nationalization of the industry. As Chapter 5 reveals, AT&T and the Bell operating companies used every argument and medium they could conceive to fight this idea, but during World War I President Wilson nevertheless ordered a government takeover of the entire industry, although few outside the telephone industry seemed to care. However, the Post Office Department’s handling of the industry was so ineffective and unpopular that the government returned control to the companies after the war, thus ending any serious consideration of government ownership. Ellsworth ←xiii | xiv→turned to the institutionalization of the publicity function in AT&T and operating company publicity departments and throughout every level of the system. AT&T president Harry B. Thayer made operating company presidents accountable for public relations, encouraging them to support employees who joined local civic organizations, to work with the press and release as much information as possible, and to improve relationships with subscribers and shareholders. These strategies were premised on the “spirit of service” said to permeate Bell employees, who were the targets of an extensive welfare capitalism program meant to ensure their cooperation.