The Western Electric Manufacturing Company
In the late 1860s, the Western Union Telegraph Company consisted of three operating divisions, with headquarters in the following cities:
Eastern division, New York City
Southern division, Louisville, Kentucky
Central division, Cleveland, Ohio
Located within these three divisions were four company owned and operated "machine shops" that provided all the instrument needs for the company. Their locations and factory superintendents were as follows :
Williamsburg, NY, George Phelps (Eastern)
Louisville, KY, W.H. Johnson (Southern)
Ottawa, Ill, Robert Henning (Central)
Cleveland, OH, George Shawk (Central)
The Ottawa and Cleveland shops of the central division were under the jurisdiction of Anson Stager. Stager first became a telegrapher in 1846 and became prominent in organizing the interests of Western Union during their various consolidations and railroad contract negotiations. When the Civil War broke out, the governors of Ohio, Illinois, and Indiana took possession of their telegraph lines and placed Stager in charge. Stager was then called to Washington to form a military telegraph corps and was appointed Chief of Military Telegraphs throughout the U.S. and achieved the rank of Brigadier General. He devised a secret code that the Confederate Army was unable to decipher. At the end of the war, General Stager became the general superintendent of Western Union's central division based in Cleveland.
In the Fall of 1868, General Stager and Western Union decided to consolidate its Cleveland shop into their larger facility at Ottawa Ill., located 75 miles southwest of Chicago. Western Union had purchased the Ottawa (Caton) shop from John D. Caton a year earlier. The tools and stock of the old Cleveland shop were sold off to their former superintendent George Shawk and his new partner Enos M. Barton who were trying to form their own manufacturing business. Shawk had been working in shops of Western Union since 1857 and was superintendent of the Cleveland shop since 1865. Barton was a college educated telegrapher from Rochester, N.Y. who was discouraged by the declining earnings of being a telegrapher and decided to go into business with Shawk as a electrical manufacturer. In January of 1869 the firm Shawk and Barton began operations at 93 St. Clair Street in Cleveland. The firm advertised their telegraph instruments were of, "Western Union Standard Patterns."
Elisha Gray had spent five years at Oberlin College in Ohio pursuing studies in natural philosophy. In 1865, at age 30, he began devoting his time to the study of "electrical mechanism." He invented a self-adjusting Morse relay in 1867 that captured the attention of General Stager who encouraged Gray to conduct his experiments at Western Union's Cleveland shop. Gray conducted experiments and used the machinery at the shop during the Western Union era and later when it became the factory for "Shawk and Barton."
The partnership of Shawk and Barton did not last long. They had cash flow problems and could not meet payroll during the first few months of operation. The business differences between the two strained the partnership to the point where Shawk wanted out. Barton, meanwhile, was impressed with Elisha Gray and felt his work represented the future in electrical manufacturing. Gray's technical skills complimented Barton's strong business abilities but Gray did not have the necessary funds to buy out Shawk's share. In May of 1869, Gray met with General Stager who was very interested in Gray's work involving a new private-line printer. Stager came up with idea to purchase an interest in Gray's invention giving Gray the needed $1500 dollars to buy out Shawk. In August of 1869, the first ads for Gray and Barton started to appear in the Journal of the Telegraph.
During these early months, Barton was the firm's salesman and ran the day to day business while Gray continued with his experiments. The Chicago shop foreman was Charles "Charlie" Lewis. During this period Western Union was their best customer but they were also busy manufacturing annunciators and burglar and fire alarms, as well as Morse instruments and electric signaling devices for railroads. The new firm quickly grew out their South Water Street location and was forced to make two more moves by June of 1870. They moved to 13 La Salle St. on January 1, 1870, and six months later, moved to a 60X80 foot room at 479 State Street. In just one year they grew from a work force of only a "handful of men operating a half dozen foot lathes" to a shop now employing 30 men.
The famous "Mrs. O'Leary fire" destroyed a third of the city of Chicago in October of 1871. The fire burned within two blocks of Gray and Barton's State Street shop. The fire destroyed Western Union's new Central Division headquarters and most of their lines. The production of Gray and Barton helped rebuild Western Union in Chicago and also help supply the city of Chicago itself with fire alarm equipment and other electrical products.
In February of 1872, company records show that Western Union began discussions on consolidating their Ottawa factory with Gray and Barton in Chicago. In March, by recommendation of General Stager, Western Union approved the plan of forming a independent manufacturing establishment to be named, The Western Electric Manufacturing Company. The company was capitalized with $150,000 dollars with Western Union having a one third interest. General Stager owned another third and the remainder was owned by friends of Stager, Gray and Barton, and other employees. General Stager was elected president and simultaneously maintained his position as General Superintendent with Western Union. Enos Barton was elected secretary/treasurer and Elisha Gray was superintendent and "Company Electrician."
It was Gray and Barton's manufacturing philosophy "to devise apparatus for purposes not already satisfactorily provided for." Accordingly, they manufactured the proven telegraph instrument patterns of the Western Union Ottawa shop for a few years before shifting to newer designs of their shop foreman, Charles Lewis.
W.E. Mfg. Co. was associated with some unique products during their short history, including an exclusive contract with Thomas Edison to handle the entire business of manufacturing and selling his electric pen. Edison decided on W.E. Mfg. Co. in part because of their manufacturing capabilities. Gen. Stager placed the marketing in charge of George Bliss a former telegrapher and manufacturer who also purchased an interest in the company. Another was the marketing of the first commercial typewriter. C.L. Sholes demonstrated a Sholes and Glidden typewriter to Stager and Barton with the hopes that they would be the manufacturer. Barton suggested that the under-utilized Remington Arms factory in Ilion, N.Y. become the manufacturer and that W.E.Mfg. Co. would assist in the design and become their exclusive sales agent in "northwestern" states. The first lot of 500 machines was delivered to Chicago in 1874 and were sold for $125.00 each. Mark Twain was one of their first customers.
In 1874, Elisha Gray gave up his position as superintendent but continued his relationship with W.E. Mfg. Co. as an absentee owner and the company's first engineer. He went on to obtain several patents in the fields of telegraphy, telephony, and electrical signaling. In 1875, both Gray and Alexander Graham Bell were conducting experiments in multiplex telegraphy and both came to the same conclusion that they could transmit speech. On February 14, 1876, Gray filed a caveat for voice transmission within hours of Bell's patent application for "An improvement in Telegraphy."
Western Union originally did not see a future in the telephone and passed on the opportunity to buy Bell's patent. But by 1878 had a change of heart and began the production of telephones under the patents of Elisha Gray, Thomas Edison and George Phelps. With their Chicago factory thriving, W.E. Mfg. Co. increased their capacity to produce phones by purchasing Western Union's New York Factory at 62-68 New Church St. in April of 1879. This sale ended the era of Western Union factories. The superintendent of the new factory was George M. Phelps Jr. the son of the instrument maker and inventor who shared his father's "fine sense of accuracy and finish in the construction of electrical devices." The New York factory continued to produce printers and telegraph instruments in addition to telephone equipment.
Western Union's entrance into the telephone business resulted in a patent infringement suite filed by Bell. The case was settled out of court in November of 1879 with Western Union withdrawing from the telephone field and handing over all their telephone patents, exchanges, and telephones to the Bell Company. Bell agreed to pay a lucrative 20 percent royalty on telephone rental income for the life of Bell's patents and to stay out of Western Union's core telegraph business. Bell's telephonic connections between exchanges were limited to "personal conversation" and "not to be used for the transmission of general business messages, market quotations, or news for sale or publication in competition with the business of Western Union."
With no Bell license, this agreement at first appeared to put a dark cloud over the telephone manufacturing future at W.E. Mfg. Co. But it was the efforts of General Stager and events taking place at Western Union that turned this situation around. Stager personally owned a controlling interest in a dozen mid-west telephone companies. He arranged for W.E. Mfg. Co to buy a controlling interest in the Gilliland Electrical Mfg. Co. of Indianapolis who had a Bell License. He subsequently proposed to Bell officials due to the patents still held by the W.E. Mfg. Co., the quality of their products, and their manufacturing capabilities, that they should be the logical choice as the manufacturing unit for Bell. This plan also called for the acquisition of another Bell manufacturer, the Charles Williams Jr. Shop of Boston who were operating beyond their capacity.
Also happening at this time was the hostile take over of Western Union by financier Jay Gould who replaced many of Western Union's top people, including Stager who was a vice president and on the board of directors since 1877. Western Union's actions accelerated Stager's efforts to solidify W.E. Mfg. Co. ties with Bell. Western Union, meanwhile, fearing hostilities by the ousted Stager, and weaker control of W.E.Mfg. Co. decided to sell-off its interest to Bell. By November of 1881, W.E. Mfg. Co. was reorganized as the Western Electric Company with Bell having the majority interest. General Stager was named president and Enos Barton vice president of Western Electric. In February of 1882, Bell and Western Electric signed an agreement making Western Electric Bell's exclusive manufacturer of telephones in the United States. Western Electric went on to produce an array of telephone, telegraph, and electrical products. The dating of instruments marked "W.E.Mfg. Co." is fairly easy, 1872-1881 for instruments made in Chicago and 1879-1881 for ones made in New York.
as The Origins of Western Electric in the
April and July 2006 issues of
The AWA Journal, (Vol.47, #2 & 3)
the quarterly journal of
The Antique Wireless Association.
( A nonprofit historical society )