History of Colorado; Volume I, Part 42

Author: Stone, Wilbur Fiske, 1833-1920, ed
Publication date: 1918
Publisher: Chicago, S. J. Clarke
Number of Pages: 954

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In the reports to the Tax Commission for 1917 the Western Union mileage of wire in the state was 21,248.32; that of the Postal Telegraph Company, 5,- 652.08, and that of the Colorado & Wyoming Telegraph Company, a Colorado Fuel & Iron Company subsidiary, 847.98.

The Mountain States Telephone & Telegraph Company has a mileage in Colo- rado of 269,893,-with a valuation of $2,527,250. There are many small telephone companies throughout the state, most of which are either part of the Mountain State system or cooperate with it. Of these the Colorado & Eastern Telephone & Telegraph Company has a mileage of 2,122; the Delta County Cooperative Tele- phone Company, 1,136; the Eagle Valley Telephone Company, 246.50; the Gar- field County Telephone Company, 275 ; the La Garita Telephone Company, 230; the Montezuma County Telephone Company, 526.40; the Springfield-Lamar Telephone Company, 185; the Yampa Valley Telephone Company, 216.

Late in the fall of 1889 the Postal Telegraph-Cable Company started the construction of a new line of telegraph from Kansas City to Denver, building westward from Kansas City paralleling the Atchison, Topeka & Santa Fé Rail- road through Kansas to Colorado, and terminating its line at Denver, in July, 1890. A main office was then opened at 1705 Larimer Street, with branch of-

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fices in the Windsor Hotel and at Sixteenth and Larimer streets, in the old office location of the Western Union Company, from which they had just moved.

The Postal Company, with its direct wires to Kansas City, St. Louis and Chicago, soon became a factor in the telegraph field in Colorado. The new line gave competitive telegraph service to such points in the state as Holly, Lamar, Las Animas, La Junta, Rocky Ford, Fowler, Pueblo, Colorado Springs, Palmer Lake, Castle Rock and Littleton, and it was not long before there were eighteen competitive branch offices being operated in the City of Denver by the two com- peting lines.

The next construction was in 1892, when the Postal built a line into Lead- ville via the Colorado Midland route, and the Postal was the first telegraph com- pany to give telegraph service in the Cripple Creek district, building its own independent line into that wonderful gold camp ahead of the railroads.

In 1893-94 the Postal extended a line of telegraph from Denver to El Paso, Texas, and from Albuquerque, New Mexico, to Los Angeles, California, to con- nect with the Pacific Postal system; and, in 1904, after seven years of litigation with the Western Union and Union Pacific (both owned by Gould interests, Har- riman not yet having secured control of the Union Pacific) the Postal, after set- tling its litigation, extended its lines from Denver to Omaha and from Denver to Salt Lake via Union Pacific rights-of-way, and still later a line of telegraph was further extended from Salt Lake to San Francisco, carrying the largest cop- per wire ever placed on poles for telegraph purposes.

THE TELEPHONE IN COLORADO

Within three years from the date in 1876 when Bell exhibited his electric tele- phones at the Centennial Exposition in Philadelphia the new method of transmit- ting messages was successfully applied in Colorado.

The Bell controlling patents were issued March 7, 1876, and January 30, 1877, the company was putting out magneto telephones in original form, on rental and royalty for about two years, which at first were used only on private lines.

In 1877 Berliner invented the Microphone (contact transmitter) and filed ap- plication for American patents. This was the original and basis of all later bat- tery transmitters. The Berliner patent was delayed by interference and litiga- tion, but the claim was finally bought by the Bell company in 1879, although the patent was not issued until 1891, persistent litigation following the issue.

In the same year Edison invented the Carbon Microphone transmitter, which gave to the Berliner invention its commercial effectiveness. The Edison British carbon patent was dated 1877, but the American application for the same was delayed in the patent office by interference and litigation and was not issued until 1891, fourteen years later, and then held to be technically void by reason of the prior British patent. Meanwhile Edison sold his American rights to the Western Union Telegraph Company, giving them a big advantage over the Bell company, which at that time had no transmitter, and consequently could not furnish any- thing but purely local service.

In 1878 the Blake Carbon Platinum transmitter was invented, and this en- abled the Bell company to furnish more than purely local service and saved the day for them in their competition with the Western Union.

Vol. 1-25

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The first telephone exchange was built at New Haven, Connecticut, in 1878, a crude switch and signal device being used. In the same year work on the Boston and Chicago exchanges was started. Prior to this telephones had been rented to merchants and others for private lines between departments or between offices and yards or factories.

In 1878 the Western Union Telegraph Company went actively into the tele- phone business, both private and exchange, relying chiefly on its Edison trans- mitter patent and the chances of litigation against the Bell patents. The Western Union Telegraph Company also acquired the Gray claims.

On Monday, February 24, 1879, the Denver exchange opened and was prob- ably the third or fourth one in the world. This was in a way a crucial year for this infant industry, for the Bell company and the Western Union began com- peting for territory. This was of brief duration for late in 1879 the Western Union sold all its rights, claims, patents and properties in telephone instruments and apparatus to the Bell company, retiring entirely from the telephone end of the message transmission business.

F. O. Vaille came to Denver on July 20, 1878, with the idea of engaging in some business enterprise in Colorado if the prospects appeared favorable. He visited Central City and other points of activity and became enthusiastic over the resources of the state. While he had some doubts as to the future of the tele- phone business, he concluded to embark in it, and visited Boston and secured from the Bell company the license to use its instruments in Colorado. He re- turned to Denver in October, 1878, formed a partnership with Senator E. O. Wolcott and Henry R. Wolcott, to carry on the enterprise, and at once announced to the public that a telephone exchange would be opened if 125 subscribers could be obtained. The new enterprise was given some publicity by the newspapers. In December Mr. Vaille began a canvass of the business men, putting telephones on exhibition. It was a new invention, there being only three exchanges in the world, those at New Haven, Boston and Chicago, and these had just started. The Bell company had been renting telephones for use only on private lines. There was such a line in Denver equipped with telephones rented of Mr. Vaille. This was used by the Colorado Coal & Iron Company (now the Colorado Fuel & Iron Company).

By February 2, 1879, sixty-three Denver exchange subscribers had been se- cured, not including those of the City of Denver, and work on the lines started. On Monday, February 24, 1879, the Denver exchange, which has now reached such huge proportions, was modestly opened for business, receiving meager recognition from the newspapers. While one paper gave considerable notice to the opening of the exchange, a second paper merely said under an inconspicuous heading, "The Line Open." "The telephone was in working order yesterday and the line was well patronized. After the novelty of the thing has worn off the operators will be able to get some rest. All of yesterday they were burdened with anxious inquiries from about two hundred subscribers asking questions about the weather, the telephone and other unimportant subjects."

The central office was located on the south side of Larimer Street, between Fifteenth and Sixteenth streets, on the second floor of the building owned by George Tritch and over Frick's shoe store. The company had three rooms, using

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the front room for a business office, the one back of it for a battery room, and the third or rear room for the central office.

In 1880 after consolidation with the Western Union, or rather the Colorado Eastern Telephone Company, which had followed the Bell with competing ex- changes, the company moved to the Bardwell Block, on Larimer Street. With- in three months it was moved to the top floor of the newly-completed Tabor Block, next door to the Bardwell Building.

In 1890 the company erected a fire-proof building at 1447 Lawrence Street, remaining there until 1903, when it built the first four stories of its present eight- story building at 1421 Champa Street. In 1915 the one-story building to the east of the large structure was erected, and later the greater part of the Wyoming Building at the southeast corner of Fourteenth and Champa streets was leased. Many branch exchanges have also been opened.

The first lines were iron, the discovery of the process for hardening copper to stand a strain not having been invented, and the subscribers were grouped together on grounded lines.

General Manager Vaille believed that lines should be run upon poles instead of upon fixtures placed upon roofs, although this latter construction was being followed in the few exchanges which had been started elsewhere in the United States.

The switchboard was crude, being modeled after that of telegraph companies. The subscriber's set consisted of a black walnut back board to which was at- tached a primitive apparatus consisting of a single stroke bell which tolled off the number of the subscriber's ring.

The rates established were $5.00 per month for business and $4.00 per month for residence use.

The line to Georgetown was the first long distance line built in the State of Colorado, the line to Boulder being built later. The rates made for local ex- change service at Golden and the towns mentioned, including Boulder, were $60.00 per annum for business and $48.00 for residence service.

The first telephones used in Leadville connected two plants of the Malta Smelting Company on May 15, 1879, and worked perfectly, and on June 25. 1879, a line a mile long from the Western Union office at the corner of Pine and Chestnut streets to the Birdwell & Witherell smelter, equipped with telephones, worked so well that an operator at the smelter heard over the telephone and re- corded telegraph messages which were being received at the telegraph office. This was only three years after vocal sounds were first transmitted by telephone.

An exchange was established in the old Herald Building, corner of Third and Harrison avenues, adjoining the Western Union telegraph office. It is recorded that at this time seventy miles of telephone wire were strung on poles, trees. housetops, and anything that would afford support for them, connecting the smelters, mines, hotels, business houses, etc.

A. G. Hood, manager of the Western Union Telegraph Company, was also manager for the telephone company. The switchboard, which was considered a marvel of the inventor's art, was a horizontal table affair with metal strips cross- ing each other at right angles. Connections were made by inserting "pumpkin seed" plugs between the strips at the proper points, which was "something to know." The talking instruments were of the Edison type receiver, transmitter

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and gravity battery. The signaling was with push-button and single-stroke bell, -rather old-fashioned, but up-to-date at the time.

In the spring of 1880 the Leadville Telephone Company was formed, and H. A. W. Tabor furnished the money to replace the primitive exchange. The Quincy Block was being built. This was the tallest building in town at the time, 'and the new company secured rooms for office purposes in it at a rental of $2,000 per year. A tower was erected on the top of the new building, from which wires were run in every direction. Poles fifty-five and sixty feet long were set along Harrison Avenue and Chestnut Street, and ten-pin cross-arms were placed on them. It was considered a brave act in those days, before Eastern climbers had reached this Western country and safety belts and straps were unknown, to carry up and place a ten-pin arm on one of those tall poles with only the grip of the leg around the pole for support.

A new Gilliland switchboard, thirteen feet long, standing upright and equipped for 300 grounded lines, with "barn door" annunciator jacks and ringing and connecting strips, was placed, and for many years gave excellent service to patrons.

In 1888 the Colorado Telephone Company bought the Leadville exchange and soon connected the great mining camp with Denver and its other exchanges by means of a copper toll line over Mosquito Pass and across the South Park via Fairplay, Como and Morrison to Denver.

In the early '8os every gambling house and up-to-date "joint" was connected -theaters, "free and easies," billiard halls, etc., where every class and kind of patron stood on a level. Whether from sound judgment of these conditions or from some other phase of undevelopment, it was decreed that the job of operat- ing or "switching" in the telephone office was peculiarly fitting for young men and decidedly inappropriate for girls.

An operator who could not answer back in kind was not well qualified for his job. His ability to compete in language and style with the slang-whangers of the saloons was considered quite the thing and commanded respect.

It was several years before young ladies were employed as operators.

In 1880 the Pueblo and Colorado Springs exchanges were opened and in 1881 party lines were run from Boulder to Longmont.

In 1882 the company had 593 subscribers in Denver, 46 in Boulder, 41 in Central City, 33 in Georgetown, 24 in Golden, 108 in Colorado Springs and 138 in Pueblo. The exchanges at Silverton and Gunnison were abandoned after the boom days in these camps.

The long distance lines, then called toll lines, were exceedingly few in num- ber, being only about two circuits of one wire each running from Denver through Golden, Central City and Blackhawk and thence to Georgetown, and one or perhaps two lines from Denver to Boulder. Even Colorado Springs and Pueblo were not connected with Denver at that time. However that connection was made in the spring of 1884, the line terminating at Pueblo. It was of iron and grounded. So limited at that time were the possibilities of talking with any satisfaction more than forty or fifty miles that when the Pueblo line was being built doubt was expressed as to its working.

After the invention of hard-drawn copper wire in 1883 by Thomas B. Doo- little, of the Bell company, the business made tremendous advances, for this

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wire, with six times the conductivity of iron, made long distance talking a certain quantity.

In 1884 F. A. Vaille, the founder of the company, retired, and was succeeded by E. B. Field, Sr., as general manager.

Mr. Field came to the company January 1, 1880, as an operator of the first exchange. He was soon made superintendent, and has now for many years been active as president of the company.

In 1884 the Bell Telephone Company in Boston organized a department of Telephone Engineering and Development for the benefit of all the Bell com- panies.

To this step the most notable improvements have been due, the last being the achievement of wireless telephoning between New York and Honolulu in October, 1915.

In New Mexico, probably about 1881, certain people of that state, which was then a territory, organized a telephone company and secured the Bell rights for New Mexico, Don Miguel S. Otero, delegate to Congress, being one of the in- corporators. The territory was so sparsely developed that they could not main- tain the organization of a telephone company, and do the small business offered it, with any profit. The company became bankrupt, and The Colorado Telephone Company purchased it about November, 1884, at sheriff's sale.

In 1885 Denver had 763 subscribers, Colorado Springs 92, Pueblo 98, Boulder 32, Central City 39, Georgetown 32, Golden 22, Longmont 15, total in Colorado, I,IOI.

In this and the succeeding five years there was a revolution in the types of apparatus involving big financial loss in discarding existing apparatus. Copper wire cost several times the price of iron, and had to be used for long dis- tance lines. This also increased the cost of constructing such lines in another way, namely, the spans had to be much shorter because of the tensile strength of copper being much less. The cost of long distance lines increased fully 300 per cent.

In June of this year street railroad men experimented with the first electric car system, building a line the full length of Fifteenth Street, Denver. The system was the invention of Professor Short, of Denver. The cars used an underground trolley. They were abandoned in June of the following year. The system while it lasted caused great inductive disturbance in telephone lines. Denver then resumed its dependence upon cable and horse cars until 1889, when the overhead trolley was introduced by one company on Lawrence Street, by an- other from Broadway and Alameda Avenue south. Then the real troubles be- gan with induction from the trolley car lines.

In 1889, however, it was found that the induction and resulting noise from electric light and trolley railroad circuits were somewhat reduced by using a common return wire.

Mountain construction of the telephone lines was not an easy task. When in 1888 the company built the celebrated line up the Platte River and over Mosquito Pass it was found that the first storm wrecked the poles which had been placed 100 feet apart. This is Mr. Howard T. Vaille's description of the undertaking after they found that fifty-foot spans would not work:

"Next we set two poles in between the poles making the spans only seventeen

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feet long. We had started out with No. 12 bare copper wire, then changed it to No. 10 insulated, thinking the snow would not stick to it, but it did stick. Then to No. 6 iron, and when we had the spans only seventeen feet apart we had the No. 6 iron wire on them. Our people then thought we would have no more trouble, for why should we, with heavy poles so close together and with iron wire almost as large as a pencil? But it was no use, the snow would freeze to the wires several inches thick, and the next winter the wind tore the wire down as though it had been cotton thread. Our people then concluded the place for the line was on the ground where the wind could not reach it, so they abandoned the poles and laid No. 10 insulated copper wire on the ground. That lasted a little while, but would get broken by burros in the summer and be blown around or be carried away by snows in the winter. We then put down a No. 10 copper submarine cable and put it in a trench or put rocks on it wherever we could. That lasted us nine years, when we placed our present wire, which is No. 14 twisted pair copper covered in trenches or by rock wherever possible."

The building of the Leadville line was a notable event for other reasons. It was the first toll line built into sparsely settled territory, and the first across the main range. At that time there were exchanges at Boulder, Denver, Golden, Central City, Georgetown, Colorado Springs, Pueblo, Cañon City, Leadville and Aspen, about twenty-five hundred subscribers in the state, and the toll line sys- tem went no farther north than Boulder, south than Pueblo or west than George- town. The lines then connected only the largest centers of population.

From Leadville the company went on to Aspen, later to Glenwood Springs, down the Grand River to Grand Junction, thence up the Gunnison to Delta and Montrose, south to Ouray, branching over to Telluride, from Ouray to Silverton and Durango, thence west to Mancos and south to Farmington and Aztec. It built south from Pueblo to Trinidad and down into New Mexico, bringing that state into Colorado business connection, over into the San Luis Valley, down the Arkansas to Holly, over to Cripple Creek, Salida and Buena Vista.

In 1893 there were in Colorado 2,782 telephones, and in Denver 1,731. The number of telephones in the state increased to 92,561 on September 1, 1915, and the Denver exchange to 41,903 on September 25, 1915.

It was in 1893 that the company experimented with the Beach village system for small towns. This system did away with a local manager, the forty-eight or smaller number of subscribers being divided among eight circuits and the sub- scriber controlling his connection by a certain number of rings. This was un- satisfactory, and later in that year the toll line was built from Longmont through Berthoud, Loveland, Fort Collins, Windsor, to Greeley.

In 1901 the company ran its lines up the Gunnison River through Delta to Montrose, thence south to Ouray, Silverton, Durango and Aztec to Farmington, New Mexico. From Durango it built a branch westward to Mancos and from Ouray west to Telluride. At the same time it made arrangements for the pur- chase of exchanges which were then in operation at Delta, Montrose, Telluride and Durango.

During the succeeding five years the San Luis Valley lines, and those at Salida and Buena Vista were purchased and put into good working condition. By 1912 it had bought the systems at Gunnison, Pitkin, Crested Butte, Lake

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City, connecting these with the rest of the system. The Julesburg line was bought in 1908, the Lincoln Telephone Company, operating in Hugo and Limon, was purchased in 1910.

During these constructive years it also bought the Akron line, extending it to Yuma, and also secured possession at sheriff's sale of the exchanges at Fort Morgan and Brush.

It also purchased and completely rebuilt the line running from Rifle north through Meeker, Axial, Craig, Steamboat Springs and Yampa, down to Wol- cott.

On May 8, 1911, the Bell company completed its line to Denver and gave a public demonstration with New York City. At that time the line from New York to Denver was the longest long distance line in the world.

In July, 1911, the name of The Colorado Telephone Company was changed to "The Mountain States Telephone & Telegraph Company," the company acquir- ing control of the Bell and other telephone exchanges and toll lines of all the Rocky Mountain region, including all of the states of Montana, Idaho, Wyoming, Utah, Colorado, New Mexico and Arizona, as well as El Paso and the section of Texas adjacent thereto, with a total area of 22 per cent of the total area of the United States.

In 1915 there were in the whole Mountain States system over 220,000 tele- phones, owned by this company, over 617,000 miles of wire, or enough to en- circle the globe twenty-five times, and an invested capital of approximately $35,- 000,000. Denver is the headquarters and, to an extent, the supply point of this large system.

CHAPTER XX

BANKS AND BANKING

EARLY BANKING IN DENVER-CLARK, GRUBER & COMPANY-ESTABLISHMENT OF UNITED STATES MINT IN DENVER-OTHER PIONEER BANKING BUSINESS-C. A. COOK & COMPANY-THE EXCHANGE BANK-P. P. WILCOX & COMPANY- KOUNTZE BROTHERS' BANK-BANKS NOW DEFUNCT-THE FIRST NATIONAL BANK -COLORADO NATIONAL BANK-DENVER NATIONAL BANK-OTHER BANKS- BANKING FRAUDS IN DENVER-DENVER CLEARING HOUSE ASSOCIATION-FIRST BANKING IN OTHER COMMUNITIES, COLORADO SPRINGS, PUEBLO, ETC .- STATIS- TICS OF COLORADO BANKS IN 1918.

EARLY BANKING IN DENVER

Banking was first started at the Cherry Creek settlements in the year 1860. During the two years prior to this time there had been little or no necessity for banks or brokerage concerns. The pioneers of 1858 came to Colorado with their supplies for the winter, and their personal belongings, but with no money. Very little cash changed hands in Auraria and Denver, whatever trading neces- sary being carried on largely by bartering.

But the gold rush of 1859 brought richer people to the colony and gold and silver coins made their appearance. The Clear Creek gold discoveries in the spring of this year brought forth a new medium of exchange-gold dust and nug- gets. Gold dust of varying quality was weighed out over the merchant's counter or the saloon bar in trade for supplies of all kinds. It became the common prac- tice for everyone to carry, in addition to his pouch of gold dust, a small pocket scale for weighing the gold. It is said that the dealer gave himself the advantage in a transaction of this kind, but upon the other hand the customer usually had a fair percentage of foreign metal-brass filings, for instance-mixed with his dust, so the bargain was even. With the increasing number of gold "strikes" the amount of gold upon the market reached a point necessitating a definite means of handling it, requiring persons whose business would be to receive the gold, ascertain its value by scientific methods, and give in return an equivalent amount in gold or silver coins. This led to the first banking business, as such, in Den- ver. These men who transacted this exchange business with the miners were more in the nature of brokers. They purchased the gold dust at prices ranging from $12 to $16 per ounce, the higher price being paid for the bright yellow ar- ticle, the purest of the gold. For three years the "Platte River" gold was the standard quality. They, in turn, shipped the dust to bankers upon the Missouri River. Gold dust continued to be the principal medium of exchange until the

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History of Colorado; Volume I, Part 42

Author: Stone, Wilbur Fiske, 1833-1920, ed Publication date: 1918 Publisher: Chicago, S. J. Clarke Number of Pages: 954

Author: Stone, Wilbur Fiske, 1833-1920, ed
Publication date: 1918
Publisher: Chicago, S. J. Clarke
Number of Pages: 954