Look Back Erie: A Telephone for the People

There was once a telephone service in Erie, Pennsylvania, that was subscription based, designed so that a sole interest could not direct the future of the company. Well, that was the plan.

As early as the 1870s, telephones were in use in Erie, but they were rare and very expensive. The Bell Telephone Company held an all-inclusive patent until 1894. 

On July 4, 1896, the Erie Daily Times reported that subscriptions were being sold for a new telephone service at half the price of the present company. A limit would be placed on the number of shares any one person could hold, “so as to prevent any set of men from securing a monopoly.”  The organizers of the proposed Mutual Telephone Company included William Hardwick, W.H. Nicholson, George Burton, and others. 

When feathers flew from supporters of the old company, the Erie Daily Times paraphrased Nicholson’s comments in a July 9, 1896 article, “Here is a company formed for mutual benefits. It is not a money-making scheme in any sense of the word. All the profits that are received from the concern go right back to the people who use the service. There is no danger of the smallest shareholder being crowded out, or of the company being crowded out, or of the company being gobbled up by private speculators, because the [holding] of any one person is limited to $200 worth of stock.”

Subscriptions flew. New lines were strung, and new telephones purchased. One down side, was that apparently, Mutual Telephone customers could not call Bell Telephone customers, but eventually Bell Telephone moved on to larger markets.

The Mutual Telephone Company was housed in the Downing Building at the northwest corner of Ninth and Peach Streets. The owner of the building was one of the company’s original organizers, Jerome F. Downing, an Erie attorney and husband of Henrietta Bagg Downing (one of the 13 Presque Isle DAR founders). 

Sometime after 1897, the limit on subscriptions was lifted. In 1930, President A.A. Culbertson and Manager John Z. Miller purchased additional stock to keep the company from falling into a Chicago company’s hands, but the stock-market deflation had forced them to sell and the Mutual Telephone Company was acquired by Associated Telephone Utilities of Chicago, which changed the name of Mutual and other Pennsylvania telephone companies it acquired (including Petroleum Telephone Company in Franklin) to Pennsylvania Telephone Corporation. 

By 1938, Pennsylvania Telephone was controlled 100 percent by General Telephone Corporation of New York. In April of 1952, the name was formally changed to General Telephone Company of Pennsylvania. In the 1980s, the company became known as GTE and in June of 2000, GTE merged with Bell Atlantic to become Verizon. 

It’s interesting that a grassroots, subscription-based company was able to force Bell, a huge monopoly out of town, but eventually, that company became part of Verizon, the second-largest telecommunications companies in the world.