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This device made large streetcar, rapid transit and interurban railway systems possible by enabling them to be powered by distant electrical generating plants. Until late in the 20th century, low voltage direct current (DC) was almost universally used to power these types of electric railways. The most common voltage was (and is) 600 volts DC, although higher voltages were sometimes used. Most surviving systems (such as the Chicago rapid transit system) still use 600 volts DC.

A serious disadvantage with low voltage DC current is that it cannot be transmitted very far without a substantial lose of power. This was not a problem with early street railroads, which used very light equipment and did not venture far from their generating station. However, it became a problem as larger systems began to evolve in the 1890's. The obvious solution at the time was to transmit power from distant generating stations at high voltage AC to "substations" located at intervals along the railroad, where it would be changed to low voltage DC and fed into the trolley wire or third rail. Such a system, however, required development of a way to change AC to DC at the substations.

The rotary converter provided an unsophisticated, but eminently practical, way of changing from AC to DC. Essentially, the device is an AC electric motor and a DC electric generator combined into a single unit. It does not actually "change" the AC current into DC. The way it works is that the AC current is used up to drive the AC motor, which spins the DC generator thus producing DC power at the desired voltage. While this may seem to be Rube Goldberg in conception, rotary converters were used throughout the electric railroad industry until the introduction of solid state systems in the latter part of the 20th century.

Depending on power requirements, an electric railway would have substations approximately 3-15 miles apart. Each substation would have several converters, the number depending, again, on power requirements. Originally, electric railway substations had to be manually attended. In 1915, the first automatic substation was installed on the Elgin and Belvidere Railroad in Union, Illinois, a little over a mile from the present site of the Museum (the substation was located in town near the side of the existing water tower). This system was successful and was widely adopted by other electric railroads.

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