Very common, even today, in the two way radio field to use DTMF to enable/disable link transmitters on repeater sites. DTMF pads are common on a lot of commercial two way radio's and are used for exactly these purposes. Another common use is to use DTMF over-dial on a touch tone phone to access such things as paging terminals, security systems, etc.
Yes, it's called CTCSS and DCS coding. Primitive but effective for eliminating unwanted signals being received but the 'privacy' word was just a marketing ploy used by Motorolla and others.