At the time of the organization of the Bell Telephone Company as an association (also known as the Bell Company), on July 9, 1877, as a joint stock company in 1877 by Hubbard, •
Gardiner Greene Hubbard (trustee and president): 1,397 shares, along with • Gertrude McC. Hubbard (born Mercer, likely Gertrude Mercer McCurdy Hubbard, wife of Gardiner Hubbard): 100 shares 10 shares •
Alexander Graham Bell (inventor and the company's 'Chief Electrician'): 1,497 shares • Thomas Sanders (financier and treasurer): 1,497 shares •
Thomas Watson (head of operations, and its first full-time employee): 499 shares{{#tag:ref| Bell's earliest joint agreement with Hubbard and Sanders had each being awarded a one-third share of their venture. However, the financing provided to Bell for him to conduct his research and development was inadequately low to the point that he had to continue teaching just to make ends meet. When the Bell Company was organized in 1877, an approximate 10% share was provided to Bell's engineering and mechanical associate, Thomas A. Watson, in consideration for his previous unpaid service and for the loans he made to Bell while they worked together creating their first working telephone. The Bell Telephone Company was incorporated in Massachusetts on July 30, 1878, with 4,500 shares of stock. and made a wedding gift of 1,487 shares of his allotment to his new wife, keeping only 10 shares for himself. Bell and his wife left not long after for a tour of Europe that lasted over a year, during which time Mabel left her shares with her father under a
power of attorney, allowing him to become the new company's
de facto president. Both Hubbard's and Sanders' roles in the newly born company were pivotal to its early survival and its eventual growth to become a corporate giant. Hubbard's very early structuring of its telephone service by leasing, instead of selling telephones, was critical to its success. He based his decision on the previous legal work he performed for the
Gordon McKay Shoe Machinery Company, where its shoe sewing machines were leased, not sold, and royalties also had to be paid to the Gordon McKay Company based on the numbers of shoes produced. Hubbard insisted that leasing was the better option, even if it significantly raised the need for initial capital expenses. Not long after the National Bell Telephone Company was established, it required substantial new capital in order to maintain its majority share ownership of its affiliate telephone companies and to provide further funds for expansion of its overall telephone infrastructure. On April 17, 1880, National Bell was split into the American Bell Telephone Company, led by
Theodore Vail as general manager, and with the
International Bell Telephone Company (IBTC) as a holding company for its international subsidiaries. Of the Bell Company's original shareholders, Thomas Watson resigned his position in 1881 with his shares making him a millionaire, thereafter living a colorful life as a
Shakespearean actor and later as a shipyard owner and ship builder—always retaining his friendship with Bell. Thomas Sanders, whose entire personal fortune was virtually depleted during the Bell Telephone's first formative years (until a historic settlement was reached with Bell's fierce competitor
Western Union on November 10, 1879), quickly sold his Bell shares for almost $1,000,000 but then lost most of his wealth with an investment in a Colorado gold mine. He also remained a confidant of Bell, who later helped ensure the welfare of Sanders' deaf son in his adulthood. Hubbard was satisfied to leave the head of the Bell Company to another major investor, William Forbes, who was brought into the company as its president and as a member of its board of directors in late 1878. Under Forbes' leadership, a new executive committee was created at its corporate level to reorganize and run the overall company with professional management. The company was also recapitalized, with Vail continuing as its head of operations. After leaving the offices of what became the American Bell Telephone Company, Hubbard created the
National Geographic Society as its president, with Bell succeeding him the next year. Ownership of American Bell was transferred to its own subsidiary,
American Telephone & Telegraph Company (AT&T Company) on the second to last day of 1899. AT&T had been incorporated on April 17, 1880, as American Bell's "
long lines" division to handle its long-distance telecommunications. On January 1, 1900, AT&T, a publicly traded corporation, owned the major assets of American Bell and thus became the head of the
Bell System. By December 31, 1900, it had 569,901 shares of stock outstanding, which rose to 18,662,275 shares at the close of 1935. == Early promotional success ==