HISTORY OF THE
Automatic Electric Company
Almon B. Strowger, a Kansas City undertaker, had, in 1889 or before, conceived the idea of a telephone system which would do away with delays and mistakes of manual operators. He had in mind some kind of electrical switch, driven by electro-magnets, which could be controlled by the subscriber so as to connect him with the desired telephone. With him was associated his nephew, Walter S. Strowger, while N. F. Frazier gave financial support. A model switch was made for them by a jeweller in Wichita, Kas.
Joseph Harris, of Chicago, on a trip to Kansas, heard of the work and approached A. B. Strowger with a proposal to exploit the idea. Associated with Mr. Harris was M. A. Meyer, also of Chicago, and they urged Strowger to come to their city and develop his invention. The Strowgers did go to Chicago and they and Harris and Meyer signed a contract, the latter two at once starting to raise money.
A model was set up in the Rookery building where it was seen by Frank Lundquist of Kansas, a telephone lineman who was in Chicago on a visit. This had important results. The first switch was made by the Union Model Works, which had a shop on Clark street. Twenty machines were built at a cost of $60 each.
The first company was formed on Oct. 30, 1891, taking the name “Strowger Automatic Telephone Exchange.” The first officers were: M. A. Meyer, president ; A. B. Strowger, vice president ; Joseph Harris, secretary. Early in the following year the Brush Electric Company sent one of it’s engineers, A. E. Keith, to investigate the new system. Keith was so impressed that he resigned from the Brush organization and joined the Strowger group. The twenty switches which had been built by the Union Model Works were exhibited in various parts of the country as part of the campaign to raise money for development. This same year, 1892, the exchange at La Porte, Ind. was built, the first automatic installation.
Meanwhile Frank Lundquist, the visiting lineman who had seen the Strowger model in Rookery, had returned to Lindsborg, Kansas. There he induced his friends, the Erickson brothers, to attempt to make a better automatic system than that of the Kansas City undertaker. John and Charles J. Erickson had been experimenters and inventors for some time. Lundquist obtained financial aid from John Gus Anderson, neighbours, and the Ericksons started working out a machine. Many of their tools were of their own making. It soon became apparent that better mechanical facilities were needed, as well as closer contact with patent attorneys. Chicago seemed to be the most likely place.
Thus, in 1893, Lundquist and the Ericksons moved their shop to Chicago, renting a store room on the south side.
It was shortly after this that the Andersons found they could no longer finance the scheme and contact was made with Masten and Son of Chicago, who agreed to supply funds if the Ericksons would build three switches that would work. The Ericksons did this but Masten and Son backed down. Then the invention was offered to the Western Electric Company, which declined to buy it. At last Lundquist approached the Strowger people. A. B. Strowger and A. E. Keith went see the Erickson apparatus. The result was that the Kansans were invited to become a part of the Strowger organization, which they did in December of 1893.
During the years immediately following, several exchanges were installed, such as Albuquerque, N. Mex., Trinidad, Col., and Amsterdam, N. Y. In the fall of 1896, A. B. Strowger retired from the organization.
In the early part of 1897 Col. T. W. Tyrer and others formed the Automatic Telephone Exchange Company, Ltd., of Washington, D. C. to commercialise the Strowger system by sub-licensing. The operating companies were to rent switches at $3 a year. A New England company was formed, as was the Pacific Automatic Exchange Company. In 1898 A. E. Keith went to Europe in connection with foreign royalties, taking switchboards and giving demonstrations in London and elsewhere.
The plan of national expansion did not work satisfactorily and in June of 1900 the Automatic Telephone Exchange Company Ltd., sold everything back to the Strowger Automatic Telephone Exchange and went out of business.
In 1901 the Automatic Electric Company was formed to continue the exploitation of the Strowger system, while the Strowger Automatic Telephone Exchange remained only to hold the patents, issuing rights to the new company. Mr. Meyer retired at this time. Active in the new organization were C. D. Simpson, president; Joseph Harris, vice president and general manager; A. G. Wheeler, secretary-treasurer; A. E. Keith, general superintendent. A. E. Keith, T. G. Martin, John Erickson, C. J. Erickson and E. C. Dickenson, formed the engineering staff.
Many important automatic systems were installed in the following years, among them being Lincoln, Dayton, Columbus, Grand Rapids, Tampa, Jacksonville, St. Paul, Sioux City, Buffalo, Spokane, Portland, Omaha, Edmonton, Regina and Saskatoon in Canada; Havana, Cuba and practically all of Australia.
In 1909 Joseph Harris went to Europe and in Germany made contractual relations with Siemens & Halske which resulted in installation of automatic equipment in many European countries. Similar arrangements were made with Thomson-Houston in France, in 1911, and with Helsby Cable Company in England and with Nicholson & Bainton in Australia.
Mr. Simpson retired as president after about six years and was succeeded in office by Mr. Harris, who retained the place until 1919 when control of the organization was taken over by the Gary-Woods interests. He then became chairman of the board, retiring in 1923. During this period, his son, the late Harmon A. Harris, was general manager.
Following the retirement of Mr. Harris, the ranking offices were filled by men identified with the Gary-Woods interests. The present (1934) list of officers is: W. F. Benoist, vice president and general manager; T. C. Thompson, vice president; Martin Lindsay, vice president; R. W. Hamill, secretary and treasurer.
The position of the Automatic Electric Company in the telephone industry is illustrated by the fact that from time to time it has granted licenses under its patents to the Western Electric Company of U. S. A.; Northern Electric Company, Canada; Automatic Telephone Manufacturing Company Limited, England; Siemens Brothers, England; Siemens & Halske, Berlin; Thomson-Houston, Paris and other firms and corporations.
Theodore Gary & Company is an investment company which is the head of a group of telephone operating and manufacturing companies worldwide in character. Telephone Bond & Share Company, which controls operating telephone subsidiaries in fifteen states, is directly controlled by Theodore Gary & Company through ownership of 100 per cent of voting stock; Associated Telephone & Telegraph Company, which controls manufacturing and operating telephone companies throughout the world, is controlled through ownership of over 70 per cent of voting stock. The company owns other important interests which are not enumerated here.
Generally speaking, the business of what is commonly known as the Gary group, embraces practically every country in the world, either through manufacturing and operating company business. There are approximately 200 corporations in the group engaged in business throughout the world. The company was incorporated Oct. 14, 1907, under the name of Theodore Gary Investment Company and in 1919 changed, in a corporate reorganization, to the name of Theodore Gary & Company.
It holds or has held investments in syndicate operations, businesses and enterprises of various kinds, including telephone and manufacturing companies, banks, mines and other investment concerns and has carried on throughout the world miscellaneous syndicate operations and financial trading, particularly in the telephone and electrical business, the financing being usually of the private nature and not accompanied by public distribution. Generally, it has acted as a specialist in the telephone field in financing of trading operations beneficial to the industry.
Among the well-known enterprises of the group are British Columbia Telephone Company and Eugene F. Phillips Electrical Works in Canada, the International Automatic Telephone Company, Ltd., and Telephone & General Trust, Ltd., London; Automatic Electric Company, Ltd. Of Liverpool, Automatique Electrique de Belgique S. A. Antwerp, Belgium; Automatic Telephones, China; Automatic Telephones, Sydney; the operating telephone properties and wireless systems in Colombia, Venezuela, Santo Domingo, Philippines, Portugal, etc., Automatic Electric Company, Chicago and operating properties in fifteen states in the United States.
The company’s business consists primarily of a distinctly separate operation as distinguished from that of a holding company, and it is not integrated with the business of any subsidiary. Its income and profits have been chiefly derived from its general business activities rather than from the holding company side of the business.
At the time of the organization of the business the chief officers were Theodore Gary, H. L. Gary, and A. F. Adams, who still occupy these positions. E. C. Blomeyer, C. A. Bennett, J, G. Crane, H. L. Harris and V. E. Chaney subsequently joined the company and are officers thereof.
This is an excerpt of pages 271 through 276 from “The Story of Independent Telephony” by Harry B. MacMeal. Written 1934.
Last revised: December 18, 2010