Almon Brown Stowger, a Kansas City Undertaker, becomes concerned that the telephone operator in his city is routing all customer calls to a competitor, and begins designing an automatic telephone switching system. This "Strowger Switch" is first put into use in LaPorte, Indiana in 1892, and the design is improved upon until the first "Step by Step, Up-and-Around" switching systems are in place. These automatic switching systems are vital in removing human intervention at the telephone company for telephone calls.

Source

http://www.agcs.com/aboutv2/history/