The powerful Speaker of the House missed not one but two chances to invest in AT&T in the early days
When ex-Speaker Joseph Gurney Cannon of Illinois retired from politics in 1923, he had served almost continuously in the House of Representatives for nearly fifty years, and was regarded as a master political strategist and a shrewd judge of men. But, as he sorrowfully confessed to his longtime secretary and biographer, L. White Busbey, his discernment did not extend to inventors and their get-rich-quick schemes.
I met a learned Justice of the Supreme Court who had looked into [an invention for converting base metal into gold] … He assured me that a man who had a thousand dollars to invest would become a millionaire in a few years. … I had been a man of frugal ways and had saved a thousand dollars. I had the money in bank and I took the advice of the jurist and the scientists and got in on the ground floor. The scientists and other less scientific dreamers, including myself, are no longer looking for millions but would be quite happy to get back our thousands.
A few years later I was on Newspaper Row, on Fourteenth Street, where the newspaper men had their offices, and I met Uriah Painter, one of the veteran Washington correspondents. He was also a good business man. Painter asked me if I had ever seen a telephone and I confessed that I had not. We went into his office and he walked over to a little box on the wall. He put a little instrument to his ear, rang a bell and spoke into the box. He said, “Hello, Puss, how are you? I want you to speak to Mr. Cannon, who is here in my office.” He handed me the receiver and putting it to my ear, as I had seen him do, I heard Mrs. Painter’s voice distinctly. It was amazing. Then he told her to play on the piano and I heard the music. It was magic. I was very much interested, and Mr. Painter told me about the young Scotchman Bell, how they were organizing a company and insisted the men who invested their money could not lose. He said if I had a thousand dollars to invest, I would be sure to double, perhaps quadruple my money in a few years; I might even make ten thousand by getting in on the ground floor. I had been much impressed by hearing a human voice that I recognized come out of that little piece of metal … but I was even more impressed by the proposition to get in on the ground floor. I remembered my experience with the wonderful discovery to make gold out of any old thing, and I said, “Nay, nay, Brother Painter, I’ve tried these get-rich-quick inventions and I am done.”
Not long afterwards I went down to the office of the Superintendent of Railway Mails to get a young man appointed to that service. The Superintendent, Theodore Vail, was a bright young fellow, accommodating and always ready to help me when he could. That morning Mr. Vail was not there. His assistant told me that poor Vail had suddenly become moonstruck and resigned to be the manager of a telephone company that had been foisted on the market. Vail had saved up about four thousand dollars, and in a crazy moment he had blown it all in on telephone stock and resigned from the Government service. Worse than that, he had persuaded every friend in the office who had a dollar to let him have it for investment. We all liked Vail and were much concerned about his sudden madness, for he was a good Superintendent of Railway Mails and we thought he had a future in the service. We condemned him for the reckless use of his influence over other young men in the service who had saved a little money, and we did not know what would become of them when the magic bubble burst and the telephone stock went like that of the company that was to make gold out of junk.
Some years later, I was in Boston and met Theodore Vail. He was round and jolly and looked prosperous. He was the President of the American Telephone Company and the Western Union Telegraph Company. I asked a mutual friend how much Vail was worth, and he said at least twenty-five million. All those fool friends who had let Vail have their savings thirty years ago had made money. They accepted the offer to get in on the ground floor on telephone stock and I refused. I had been a member of Congress and Vail and his friends had been poor devils working in the treadmill. I had the same opportunity as Vail but I guessed on the wrong card.