In 1966, the Board of Directors
of the Gilroy Telephone Company
marked the end of an era as they
pose in front of the company office
on Eigleberry Street. It was the final
meeting of the private company
which was sold in 1967 to the
Golden State Telephone Company.
The Gilroy Telephone Company
had been in existence since 1891.
Left to right: Charles Schemel, Don
Malinoff, Sig Sanchez, Don Strahl,
Dr. Elmer Chesbro, and Art Bannister.
full-time operators. With an investment of two and a half
million dollars, the company served 4,300 customers. At
the time, the company’s Board of Directors included Cecil
Carlyle, Arthur Chesbro, Sig Sanchez, Dr. Elmer Chesbro,
John B. Scherrer, Elmer Weymouth, Charles Schemel and
Mabel Schemel, both relatives of Jules Schemel, one of the
early phone company organizers. For many years, Donald
Strahl served as company manager.
Plans finally materialized to switch to dial telephone
service. For the better part of a year, customers were
encouraged to turn in their old phones and receive the
new dial-operated models. Each household got a new
number, with the local prefix Vinewood. There would be
no more operator-assisted calls and no more party lines.
At midnight on July 2, 1955, the old switchboard on
Monterey Street was shut down and calls transferred to
the new switch room at the Eigleberry Street facility.
Dial service officially began.
By 1957, after two years of speedier, more economical
dial service, the new operation proved so successful that
the company reduced telephone rates for its customers.
Gilroy enjoyed a quiet moment of national recognition
in the modern direct dial telephone system on August 19,
1956 when the first long distance telephone call west of
the Mississippi was direct-dialed from Gilroy. The feat was
enabled by an investment of $53,000 in complex electrical
switching and recording gear known as automatic toll
GILROY • MORGAN HILL • SAN MARTIN
ticketing equipment. The direct dial service brought Gilroy
to the front of the era’s modern communication services.
By the 1960s, the employee count increased to 28 full
and part-time operators who worked in shifts around the
clock. The private company’s service by then had expanded
to encompass San Martin in the north, stretching south to
the San Benito County line, extending over to Bell’s Station
in the east and to the Mt. Madonna area in the west. Until
that time, outlying rural telephone service had been covered
by small independent farm lines serving San Ysidro, Rucker,
and Redwood Retreat, where residents shared a total of
eight party lines.
By 1965, the telephone company was able to guarantee
uninterrupted service in the event of an electrical power fail-
ure via a diesel generator operation. Mobile car telephones
were just coming on the market, with local service from a
base station on Cañada Road. Progress increased when the
first electronic IBM business machines were installed. A
taping system that recorded the time and number of each
call enabled accurate billing, processed by the Continental
Telephone Company regional office in Bakersfield.
An era came to a close in 1967, seventy-six years after
a group of 125 Gilroy subscribers first signed up for day-
time telephone service. The profitable and reliable Gilroy
Telephone Company sold to the Golden State Telephone
Company, thus concluding a proud and thriving period of
local ownership.
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