Each of these companies operated under its own management, was governed by its own policy, and supplied its service at such rates as each thought best adapted to meet the views of local patrons. There was little or no uniformity in these rates, for the majority had been established not only without regard to the brief but costly experience with low rates that the companies established in 1878 had passed through, but adversely to the sensible suggestions of the parent company to make the service so good that business houses would pay at least a dollar a week for local telephone service. Again, not only were rates established without a due regard for the amount of cash investment that would be required per subscriber, but in entire forgetfulness of two essential factors in determining cost of production and supply:
(1) Decrease in plant valuation due to improvements in the art, and
(2) the destructive action of the elements.
In some states there was, in 1879, a Bell license for each county, and as each licensee was wholly independent of any and all other licensees, there naturally came to be a great diversity of opinions regarding proper methods of construction and operation, equitable interchange of toll-line traffic, profitable rates and the legal protection that the parent company should insure to its licensees. Furthermore, the broader-minded licensees began to perceive that the telephone business, instead of being merely a local issue, was not only interurban and interstate in character, but continental in scope, and that the healthy growth and ultimate success of these operating companies were largely dependent on the scope and the character of the service supplied, rather than on patent protection. In 1879, it was also foreseen that an amount of capital many times larger than the original estimate called for would have to be invested to place the business on a permanent foundation. Thus the wisdom of consolidating these small county licensees into large state or interstate companies was perceived, and large operating companies controlling exchanges in many counties were in existence before the close of 1879.
Incidentally it is worth while to recall that while some of the pioneers were men to whom too much credit can not be given for the intelligent and persistent manner in which improvements in and extensions to the service were introduced, there were other pioneers whose grasp of the problems they were facing was exceedingly slight, though these latter gentlemen had no hesitation in branding as heretical all views opposed to their own, or in combatting the progressive suggestions of the parent company. Even the technical press was pessimistic in belief concerning the future of the telephone. In 1882, the editor of The Operator wrote: "The telephone is almost entirely a local convenience, nearly as much so as gas lighting and horse cars; its monopoly, which is not an oppressive one, rests upon the possession of patents, and must expire with the patents."
