facilities offered by these early exchanges afforded a service esteemed by the public as a desirable convenience, then the manifold advantages that might be derived from a telephone exchange system embracing all the probable users of telephone service in a town or city, would be in direct ratio to the growth and expansion of that system. Hence, as it appeared evident that this new industry had come to stay, and was quite likely to prove a good revenue producer, capitalists began to look favorably upon 'Bell's toy,' to wonder whether it might not turn out to be an exceedingly valuable invention, and whether it was safe to infringe the Bell patents. Thus it came about that before the close of 1878, a number of promoters who had formerly scoffed at the inventor and his telephone were offering large sums in cash for exclusive rights to operate in given territory, in several cases paying a good premium for the same rights offered for a nominal payment a year previous.
These sudden conversions to implicit belief in the tangible value of the telephone appear the more remarkable when we recall the fact that throughout the United States commercial and financial affairs remained in a depressed condition during the entire year of 1878, and it was an exceedingly difficult matter to get capital interested in any new enterprise. Nevertheless, nearly seventy Bell exchanges were in process of being planned, or were under construction, or were in operation when the year closed. In the following named cities Bell exchanges were in operation at the close of 1878, and, while the number of telephones shown in service is comparatively small, the records show that several of these exchanges had secured from two to four times that number of contracts, and were connecting new subscribers as rapidly as possible.
| Albany | 250 | Indianapolis | 150 | |
| Baltimore | 100 | Lowell | 200 | |
| Boston | 150 | Meriden | 100 | |
| Bridgeport | 175 | New Haven | 350 | |
| Buffalo | 250 | New York | 250 | |
| Chicago | 550 | Philadelphia | 250 | |
| Cincinnati | 200 | St. Louis | 325 | |
| Columbus | 50 | Toledo | 100 | |
| Detroit | 150 | Troy | 100 |
Then exchanges were in process of construction in Washington, Louisville, New Orleans, Nashville, Cleveland, Springfield, Hartford, Providence and other places.
A very different condition of affairs prevailed in financial and commercial circles a year later, when, in the autumn of 1879, the resumption of specie payment caused a feeling of elation to pervade all branches of industry, and started a remarkable boom in railway construction and in stock speculation that spread throughout the country. Thus it was not surprising that many investors appeared eager to identify themselves with the telephone industry, nor was it so remarkable that as one of the results of this frenzied activity, there were several hundred operating Bell companies when the year of 1879 closed.
