Western Union Called the Telephone an "Electrical Toy." Bell Built AT&T Instead.

In 1876, Alexander Graham Bell was a struggling inventor facing financial ruin. He offered to sell his telephone patents to Western Union—the 800-pound gorilla of communications at the time—for $100,000. William Orton, Western Union's president, reportedly dismissed it as a toy. Orton saw Western Union's 185,000 miles of telegraph wire and 7,000 offices as unassailable. What could a device for chatting possibly add? Bell went on to form what became AT&T, which at its peak was worth over $250 billion and employed nearly a million people. Western Union, meanwhile, spent the next 150 years slowly fading into irrelevance, eventually becoming best known for... sending money orders. The telephone patents Orton passed on are now considered the most valuable ever issued by the U.S. Patent Office. Orton's $100,000 "savings" may be the most expensive frugality in business history.