The Vidette-Messenger Centennial EditionThe 1936 special edition celebrating Porter County's centennial year . . . .

The following article has been transcribed from the August 18, 1936, issue of The Vidette-Messenger, published in Valparaiso, Indiana. This particular special edition focuses on Porter County's centennial celebration and contains a 94-page compendium of Porter County history up to that time.

Return to the index of articles from The Vidette-Messenger's Porter County Centennial special edition.

Source: The Vidette-Messenger, Valparaiso, Porter County, Indiana; August 18, 1936; Volume 10, Section 4, Page 5.


James McGill Was Founder of County's Telephone System; Success Came When Harry R. Ball Was Named Manager

Valparaiso's Northwestern Indiana Telephone Company, which provides Porter county's communication system, enjoys several distinctions that set it apart from the usual run of monopolistic utilities.

Most notable of its distinctions is the fact that all through its forty year career it has been favored with the continuing good will of the public it served.

Another distinction -- and it is closely linked with the one cited above, that of good will -- is that is has never been subjected to attacks before the Public Service Commission or the courts.

Still another proud citation for the Northwestern Indiana Telephone Company is the fact that it has never been engaged in squabbles with the several city administrations to come and go during its period of operation.

Then, as if to wind-up one phase of its career with real dramatics, Northwestern Indiana Telephone Company, forced to the side lines in a bitter battle that was to determine its "fate", saw Valparaiso and Porter County administrative, business and civic forces rally to fight its cause in its stead.

Northwestern Indiana Telephone Company, now the property of the Crown Point Telephone Company, which, in turn is owned by the Illinois Bell Telephone Company, is indebted to the "try anything once" spirit of James H. McGill, Valparaiso industrialist, for its successful pioneering. For the high degree of public acceptance and good will it enjoys, credit is accorded the late Harry R. Ball, who, for a period of 35 years, was its manager and directing head.

It was back in 1894 -- some 42 years ago, that Mr. McGill entered the telephone business in Valparaiso and as with most of Mr. McGill's business ventures, there's an interesting story back of it.

As Mr. McGill tells the tale, he went to Chicago with the idea of contacting Marshall Field and Company to sell some of the hay that was stored on the McGill family farm, near Hebron.

Arriving in the city, Mr. McGill made a call upon a friend who was in the telephone supply business.

Preliminary greetings concluded the friend addressed Mr. McGill as follows: "You are just the man I have been wanting to see." He then explained the reason. A man from Michigan was in the city, ready to buy equipment for a telephone exchange -- a switch board.

"I am not quite ready to get down to business and I would like to have you take my customer out and entertain him until 3 o'clock this afternoon. Can you do it?" Mr. McGill replied that he could -- and he did. During the time he spent with the man from Michigan, who was enthusiastic about the money making possibilities of the then new telephone business, Mr. McGill was pretty much sold on going into the business for himself in Valparaiso. In a short time that is just what he did.

Records disclose that in November, 1894, the Valparaiso city council granted Mr. McGill a telephone franchise in the name of the Valparaiso Telephone Exchange which had a capital stock of $5,000.

Besides Mr. McGill, the original stockholders in the telephone exchange business were his father, J. A. McGill, A. D. Bartholomew, F. A. Turner, J. R. Pagin and J. N. Roe.

The exchange was built in early 1895 and the company started operations with 50 telephone subscriptions, the minimum permitted by its franchise.

First employees were Harry Harrold who, from this time on, was to become closely associated with all of Mr. McGill's enterprises, and Harry Slagle, who was the first line foreman.

Followed four years of operations with the public becoming gradually telephone conscious. Even so, the going was difficult, and in 1899 it was decided that more operating capital was needed, so, a new company, the Northwest Indiana was formed, with a capital of $8,000. Mr. Bartholomew was elected president, Mr. Turner, vice president, Mr. McGill, secretary and treasurer and P. W. Clifford and L. M. Pierce were added to the directorate.

The following year the newly organized company purchased the plant of the Northern Indiana Telephone Company, at Chesterton, owned by the late Charles L. Jeffrey. It also purchased the American Telephone and Telegraph Company toll line extending from Chesterton to Hobart, and a similar line to Aetna. The same year, the Northwestern Indiana sold its LaPorte county holdings, a line between Otis and LaPorte, to the LaPorte Telephone Company. A toll line connection was also established with the Chicago Telephone company.

A year later, two more men were brought into the company and made directors: H. H. Loring and Paul Nuppnau.

It was in 1901 that Mr. McGill was able to secure the services of Mr. Ball, who, after resigning his position at the Pennsylvania freight office, agreed to take over management of the Northwestern Company. It is said that the outlook for possible operations was so bad that, had not the services of Mr. Ball been obtained, Mr. McGill was ready to write off his telephone venture as a loss.

Under Mr. Ball's direction things took a turn for the better, almost at once, and in 1903 Mr. Ball became one of Northwestern's directors, destined to remain on the board until his death in 1936. J. W. Sieb and L. R. Skinner, also were made directors.

The same year the Northwestern Company further extended its field of operations by acquiring the property of the Porter County Telephone Company, consisting of a toll line from Valparaiso to Hebron via Kouts.

There followed eight years of successful operations and in 1911 the Northwestern Company built a new office and exchange, which still serves the company as headquarters. The building cost $11,460. The late Henry Lembke was the builder.

And so it was that the telephone business in Valparaiso and Porter county became a basic part of community affairs. With Valparaiso as its headquarters the Northwestern Company provided telephone service for Hobart, Chesterton, Porter, Wheeler, Kouts, Aetna, Miller, and their adjacent rural communities.

The directors elected in 1903 served continuously until 1914 when Mr. Lowenstine and George M. Dodge were elected and Paul Nuppnau, retired.

In 1919 Northwestern Indiana sold its exchanges at Aetna and Miller to the Chicago Telephone Company with which in 1900 it had arranged for inter change of tolls.

A year later George W. Neet succeeded L. R. Skinner on the board of directors.

In 1924 the Northwestern Indiana was hard hit when a heavy sleet storm swept its field of operations, breaking 600 poles and damaging many miles of wire. The storm so handicapped the Portage Home Telephone Company that it sold to Northwestern.

Two years later negotiations developed that brought about the retirement of Mr. McGill and his associates, and subjected the question of ownership to most unusual proceedings.

Buyer of the common and preferred stock of its Valparaiso holders was the First Chicago Corporation. The sale of stock was announced in early 1927 and was changed to reflect the new control. Directors were: Harry R. Ball, who was continued a manager; Charles McGill, L. C. Jones, J. O. Sorg and Elmer E. Schurus, of Chicago. Shortly thereafter Harry S. Albe, was made a director.

At the time of the sale the common stock had a part value of $150,000 and their holdings brought owners approximately $300,000. There was outstanding some $180,000 worth of preferred stock, also owned by Illinois Bell.

No sooner had the sale been announced that it was disclosed that Former Governor James P. Goodrich, who then was the controlling stockholder of the Winona Telephone Company, Plymouth, and active in other telephone promotions, was ready to challenge the transaction, claiming that the Illinois Bell Company had broken its rule of giving independent companies the first chance to buy exchanges that were up for sale. Shortly the Illinois Bell afraid of the former governor's political power in Indiana announced a deal whereby Mr. Goodrich's company was to take over operations of the Valparaiso and Kouts exchanges of the Northwestern Company while it would retain control of exchanges at Chesterton, Porter, Wheeler and Hobart.

This meant that Porter county telephone operations which had been consolidated under the Northwestern Company were to be divided between two operating companies. It meant that Valparaiso telephone service was to be diverted from Plymouth instead of from Chicago. It also meant that Valparaiso was no longer to be the hub of Porter county telephone companies. In addition, business and civic interests of the city and county sensed that if Former Governor Goodrich got his hands into Porter county telephone operations, they would be made a mere football of his promotional activities.

So it was that when, following Indiana law, the Illinois Bell through its Crown Point Telephone Company went to the Indiana Public Service Commission asking for approval of the sale of the Valparaiso and Kouts exchanges of the Northwestern system to the Winona Telephone Company, Valparaiso civic interests, through the Chamber of Commerce, decided to make contest. Attorney Bruce B. Loring was retained as counsel.

When the case was called before the commission the Valparaiso civic group was placed in the position of having to fight both the Illinois Bell and Winona companies.

But, so detrimental to the public welfare of the cities and towns affects by the Illinois Bell-Winona proposal that the Public Service Commission ruled against its consummation. The Commission ruled that it would be against sound public policy to split up Porter county telephone operations. It also endorsed the contention of the Valparaiso civic group that Valparaiso and Porter county telephone operations out to center in the Chicago-Calumet region, controlled by Illinois Bell.

Announcement of the decision of the Commission brought great citation to Valparaiso's business and commercial interests, but it was to be short lived. Taking advantage of the law which provided for court review of rulings of the Public Service Commission and the Illinois Bell and Winona Company appealed to the Lake County Circuit court over which presided Judge E. Miles Norton, who, years before, had been appointed judge by then Governor Goodrich. The results was that Judge Norton over-ruled the commission and sent the case back for rehearing. For reasons never disclosed the commission then reversed its self and approved the transaction.

Determined to fight to the limit the Valparaiso civic group then rallied the county at large to the contest and the County Commissioners joined with the Valparaiso City administration headed by Mayor Harold J. Schenck to aid in financing the appeal.

At this juncture Former Governor Goodrich was put on the spot for some shady promotional deals elsewhere and forced to retire from telephone operations. Thereupon a large independent telephone company, known as the United of Kansas, sought to purchase the Winona Company's holdings and was about to press its case when the depression of 1929 blocked action.

So, with the coming of 1936 the question of final control of the Northwestern Company's holdings had not been determined. New federal legislation had been enacted whereby the approval of the Federal Communications Commission had to be obtained before the Illinois Bell, now the only "buyer" left in the field, could claim ownership.

At this juncture the man who for 33 years had guided the Northwestern Company, watching it grow from small beginnings to one of the strongest small community companies in the state, was claimed by death.

Operations of the company are now being directed by the Illinois Bell Telephone Company with E. E. Day, accountant under Mr. Ball, as office manager.

One of the largest undertakings under Mr. Ball's management was the building of a new office at Hobart and the laying of cables to replace open wires. These operations cost about $100,000 and were completed in 1929. The depression then struck and Hobart was hard hit, badly crippling Northwestern finances.

When operating at full load, the Northwestern Company has in excess of 5,000 telephone stations. It started with a mere 50.

Prior to Mr. McGill's entry into Valparaiso telephone operations the old Chicago Telephone Company had been operating locally but it discontinued when the Indiana Legislature enacted a law which provided that no more than $3.00 per month could be charged for telephone service. The Chicago company operated a toll line with the Letherman Drug store as its office. Later the office was moved to the Academy of Music block.

Northwestern Telephone Company employees of ten years or more are as follows; Valparaiso exchange:

G. C. Stanton, H. W. Saute, Wm. F. Brown, Walter Martin, Roy Ransom, Riley Johnson, Frank Holzapfel, Theo Purdy, E. E. Day, Minna Jungohajn, Ruth Appelgate, Anna Boryczko, Vila Mills, Ruth Gustafson, Melba Schroeder.

Traffic -- Julia Wareham, chief; Lucy Richards, assistant; Ruth Richards, night.

Chesterton Exchange -- Margaret Anderson, J. H. Marquart, Offley Highwood.

Hobart Exchange -- Howard Ward, Edward Rosenbaum, Clarence Spratley, Olive Frye, Louise Benkie.

Wheeler Exchange -- Daisy Shearer.

Article transcribed by Steven R. Shook


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