AT&T incorporated as a subsidiary of American Bell Telephone

Background. American Bell Telephone was organized in Boston, Massachusetts, on July 9, 1877, by Gardiner Greene Hubbard, Alexander Graham Bell's father-in-law. Massachusetts corporate law later proved restrictive, limiting American Bell's capitalization to $10 million and forestalling its further growth. The company therefore pursued a separate corporate vehicle for its long-distance project.

Incorporation. The American Telephone and Telegraph Company was formally incorporated in New York State on March 3, 1885. It was created as a subsidiary of American Bell Telephone specifically to manage long-distance telephone lines. This move was a strategic response to the capitalization limits imposed by Massachusetts law, which hindered American Bell's ability to grow further.

Asset Transfer. On December 30, 1899, the assets of American Bell were transferred to its subsidiary, AT&T. This transfer occurred because Massachusetts corporate laws restricted capitalization, forestalling further growth. Consequently, AT&T became the parent company of both American Bell and the broader Bell System, effectively becoming the head of the telecommunications network.