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La Porte, Indiana, November 3rd 1892.
The equipment was a Strowger, electromechanical system. Invented by Almon Brown Strowger.
His day job was an undertaker, but also inventor. Fed up with loosing trade to competitors, because of interception by human telephone operators, he devised and patented the first automatic system.
It worked by sending pulses down the phone line, which moved a mechanical switch at the exchange, selecting one of up to 99 lines. later designs involved the rotary dial, to produce the pulses.

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Q: What city and state had the first telephone exchange?
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