|Telegraph :: 1866 :: Post Roads Act|
"the telegraph transports nothing visible and tangible; it carries only ideas, wishes, orders, and intelligence."
[Pendleton, 122 U.S. at 356]
"Federal regulation of interstate electrical communication may be said to date from passage of the Post Roads Act of 1866." [FCC Report 1959 at 11]
Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, That any telegraph company now organized, or which may hereafter be organized under the laws of any State in this Union, shall have the right to construct, maintain, and operate lines of telegraph through and over any portion of the public domain of the United States, over and along any of the military or post roads of the United States which have been or may hereafter be declared such by act of Congress, and over, under, or across the navigable streams or waters of the United States: Provided, that such lines of telegraph shall be so constructed and maintained as not to obstruct the navigation of those streams and waters, or interfere with the ordinary travel on such military or post roads. And any of such companies shall have the right to take and use from such public lands the necessary stone, timber, and other materials for the posts, piers, stations, and other needful use in the construction, maintenance and operation of said lines of telegraph, and may pre-empt and use such portion of the unoccupied public lands subject to preemptions through which its said lines of telegraph may be located as may be necessary for its stations, not exceeding forty acres for each station; but such stations shall not be within fifteen miles of each other.
Sec. 2. And be it further enacted, that telegraphic communications between the several departments of the Government of the United States and their officers and agents shall, in their transmission over the lines of any of the said companies, have priority over all other business, and shall be set at rates to be annually fixed by the Postmaster General.
Sec. 3. And be it further enacted, That the rights and privileges hereby granted shall not be transferred by any company acting under this Act to any other corporation, association, or person: Provided, however, That the United States may at any time after the expiration of five years from the date of the passage of this Act, for postal, military, or other purposes, purchase all the telegraph lines, property, and effects of any or all of said companies at an appraised value, to be ascertained by five competent disinterested persons, two of whom shall be selected by the Postmaster General of the United States, two by the company interested, and one by the four so previously selected.
Sec. 4. And be it further enacted, that before any telegraph company shall exercise any of the powers or privileges conferred by this Act, such companies shall file their written acceptance with the Post master General of the restrictions and obligations required by this Act.
Approved July 24, 1866
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The "Post Roads" provision of the Constitution apparently had not received significant attention during the drafting of the Constitution. [Lord 638 ("the founders of our Government never attached grave importance to the post-roads power")] It was less than clear what the "establishment" of a "post road" meant. What did it mean when a road was designated as a post road? Did it mean that the federal government could build roads without asking state's permission? Did it mean the federal government would pay for, construct, and maintain roads [Lord 639 ("the word 'establish' meant to 'construct' as well as to 'designate' – finally prevailed, and a policy of construction of post-roads was inaugurated)]; there was not yet the federal highway system - but it appears that perhaps the drafters of the Constitution anticipated a scenario where state roads fell into disrepair and the central government had to act in order to maintain communications lines. [Lord 638 (citing Dickey v Turnpike Co., 7 Dana 113 (Kentucky Supreme Court) it is a "power to make roads, whenever the unfitness or unreasonableness of State policy may render such a course expedient.")] Apparently States were "clamoring" for them and new states had provisions in the Acts accepting them into the Union that address post roads. [Lord 639]
What could be a "post road"? In time all roads [Act of Congress, March 1, 1884, 23 Stat. 3, c. 9.] [PA RR I, 195 U.S. at 557], railroads [Rev. Stat. § 3964, March 3, 1853, 10 Stat. 225, c. 146; Rev June 8, 1872, 17 Stat. 283; 17 Stat. 308, sect. 201] [PA RR I, 195 U.S. at 557][Pensacola Telegraph, 96 US at 4], canals, and waterways would be declared "post roads." [Act of Congress, July 7, 1838; Act of Congress, March 3, 1853, 10 Stat. 249, 255, c. 146; Act of Congress, sec. 3964, Rev. Stat., June 8, 1872, 17 Stat. 283] [Joyce at 72]
Post Offices and Post Roads were established by the Constitution as a communications network to facilitate the transmission of "intelligence." [Pensacola Telegraph, 96 US at 9]. With the rapid expansion of the nation (a.k.a Manifest Destiny), the USG needed nationwide "interstate transmission of intelligence" in order to govern, direct troops, and unite the country; people needed communications in order to build the new nation and economy. [PA RR I, 195 U.S. at 562 (The Post Roads Act was enacted "in the interest of commerce and the convenient transmission of intelligence from place to place by the government of the United States and its citizens")]. The purpose of the Post Roads Act (and the Transcontinental Telegraph Act, the War Department during the Civil War, the Pacific Railroads Act, and the Atlantic Cable Act) was an industrial policy to get the communications network built. [Post Roads Act, Sec. 1 ("An Act to aid in the construction of telegraph lines")] [Union Pacific, 160 U.S. at 44 ("The object of 'that act was not only to promote and secure the interests of the Government, but to obtain, for the benefit of the people of the entire country, every advantage, in the matter of communication by telegraph, which might come from competition between corporations of different States.")] [Joyce at 66 (stating "The purpose of said act was to aid in the construction of telegraph lines, having in view not only present needs, but embodying a great scheme of material progress, and the growing necessities, not only of the public in commercial transactions, but also of the nation in the exercise of its commercial, postal and other governmental afiairs and business." citing Hewett v. Western Un. Teleg. Co., and Dist. Col., 4 Mackey (D. C.), 424, 16 Am. & Eng. Corp. Cas. 276, 2 Cent. Repr. 694, 2 Am. Elec. Cas. 222, 225, 226, per Merrick, J.)] It is not a regulation of telegraph companies (oversight of telegraph companies fell under common law and the courts until the first legislation of general communications policy, the Manns-Elkins Act of 1910).
The Post Roads Act was, in its essence, a government contract. It is a request for providers of telegraph service in exchange for value. The Post Roads Act was a USG offer to telegraph companies to build telegraph networks for USG and national communications in exchange for access to ROW, land grants, and materials. Telegraph companies under the Post Roads Act were government contractors, described as "agents" or "agencies" of the USG when transmitting USG messages.
The Post Roads Road Act was enacted during the period of tremendous national expansion west. The United States was pursuing Manifest Destiny. The Mexican American War concluded with California, New Mexico, and Texas established as part of the Union. Prior to the Civil War, telegraph providers had experienced tremendous growth in the industrial North but minimal establishment in the agrarian South. The Civil War concluded with a need to restore telegraph service in an essentially underserved Southern market. The USG knew it needed communications to govern, unite, and build the nation. As recounted by the FCC in its Silver Anniversary Report,"Invention of the steamboat and locomotive reduced greatly the time element in communication. But it remained for the telegraph to strengthen our national life and unity... The telegraph provided speedy communication at the time the West was being opened. It aided in the extension and operation of railroads. Side by side, the iron rail and the iron wire pushed over plain and through wilderness to make new settlements possible, and to bring regions into closer contact. The association of telegraph and railroad built up communities, opened markets, and aided commerce."
[FCC Report 1959 at 168] During that era, the USG had initiated the Pony Express service, enacted the Transcontinental Telegraph Act (a contract awarded to Western Union), and enacted the Pacific Railway Act (which included the purpose of the "safe and speedy transportation of the mail" and construction of telegraph lines along every railroad route). Western Union, which had crucially aided the Army of the North during the Civil War, was at the ready and prepared to advise to government on what it needed to get a network built: ROW, materials, and land (following the model of the railroads). It can be presumed that Western Union had a strong hand in crafting the Post Roads Act.
Benefits to Telegraph Co. Benefits to USG Per Statute:
- right to construct and operate lines through and over U.S. public domain, military or post roads, and navigable streams or waters [#ROW]
- right to take and use from public lands stone, timber, and other materials; and
- right to use public land for stations
USG telegraph rates set by postmaster general
Per Supreme Court:
- Pre-emption of state ability to establish an exclusive monopoly;
- States may impose fees based on property intrastate and impose construction codes, but may not exclude telegraph companies from Post Roads (aka access to ROW)
USG Rates: Emergency Fleet, 275 U.S. at 417 ("For the fiscal years beginning July 1, 1921 and July 1, 1922, they were fixed for domestic telegrams substantially at 40 percent of the commercial rate, and for cablegrams at 50 percent of the commercial rate.")
What rights the Post Roads Act in fact bestowed on telegraph companies, and how they should be properly classified, would be litigated over the next six decades. The Post Roads Act was enacted at the same time as the Pacific Railroad Acts, and other related railroad acts. The railroad acts were land grants from federal public lands to the railroads; it conceivable that Western Union thought they were getting the same deal as the railroads - not just access to ROW but actual possession of the ROW. After all, Western Union argued, if the act granted no more rights than permission to negotiate contracts with railroad companies for access to railroad private right of ways, it confers no more than telegraphs already had to negotiate directly with the railroad companies. [PA RR I, 195 U.S. at 567]
All of these cases consider the Post Roads Act as authority for federal restraint on state authority. In analyzing the issues before the Court, the Court considers:
- The Commerce Clause of the Constitution
- The Constitutional authority of Congress over post-offices and post roads, which the Court referred to as "interstate intercourse" or "interstate transmission of intelligence." This rationale appeared in the early Court decisions but quickly vanishes in favor of the Interstate Commerce rationale
- The Reserve Power Clause of the Constitution
- The Post Roads Act.
Issue Telegraph Argument Supreme Court Ruling Federal Jurisdiction: Exclusive Congress' authority preempts state authority Congressional authority over interstate commerce and post-offices is supreme over state authority [Philadelphia, 190 U.S. at 162 (Congressional authority over interstate commerce is "exclusive")] [Pendleton, 122 U.S. at 357 ("states may exercise a concurrent authority until Congress intervenes and assumes control")] [Leloup, 127 U.S. at 645] [Pensacola Telegraph, 96 US at 9 ("A law of Congress made in pursuance of the Constitution suspends or overrides all State statutes with which it is in conflict.")] Federal Jurisdiction: Post Offices Congress has authority over Post Offices and Post Roads. [Const. art. 1, sect. 8, pars. 3 & 7] [Leloup, 127 U.S. at 645] [Pensacola Telegraph, 96 US at 9 ("Both commerce and the postal service are placed within the power of Congress, because, being national in their operation, they should be under the protecting care of the national government.")] [Joyce at 66] Telegraphs are "Posts" (a.k.a. Transmission of Intelligence)
telegraphs were "posts" and therefore fell under Congress' authority over post offices and post roads. [Pensacola Telegraph, 96 US at 10]
- Telegraph service is postal service [PA RR I, 195 U.S. at 562] [Leloup, 127 U.S. at 645 ("communication by telegraph is ... in the nature of postal service")] [Pensacola Telegraph, 96 US 1 (The Post Roads Act "is appropriate legislation to carry into execution the powers of Congress over the postal service")]
- "Post-offices and post-roads are established to facilitate the transmission of intelligence." [Pensacola Telegraph, 96 US at 9]
- Telegraph service is transmission of intelligence and intercourse [Pendleton, 122 U.S. at 356 ("the telegraph transports nothing visible and tangible; it carries only ideas, wishes, orders, and intelligence")] [Pensacola Telegraph, 96 US at 10]
- Acceptance of the terms of the Post Roads Act "was required to be filed with the Postmaster General, who has charge over the mail service." [Southern Bell, 174 U.S. at 775-76]
- NOTE: court avoids taking this argument to its conclusion that telegraph service should be operated by the post office [Pensacola Telegraph, 96 US at 10 ("It is not necessary now to inquire whether Congress may assume the telegraph as part of the postal service, and exclude all others from its use. The present case is satisfied, if we find that Congress has power, by appropriate legislation, to prevent the States from placing obstructions in the way of its usefulness.")]. See also Debate over Government Control of Telegraph Service.
Therefore Congress has authority over telegraphs [PA RR I, 195 U.S. at 562] [Pensacola Telegraph, 96 US 1 (The Post Roads Act "is appropriate legislation to carry into execution the powers of Congress over the postal service")] State authority over telegraph (Post Roads Act) Post Roads Act preempts state authority. Western Union itself was a federal agency - or franchised by the federal authority [Richmond, 224 U.S. at 165 ("The bill is brought wholly on the ground that the appellant has such rights that no state legislation can touch.")] [Gottlieb, 190 U.S. at 413 (WU's franchise was "derived from the United States under certain acts of the Congress"")] [Call Publishing Co., 181 U.S. at 94] [Charleston, 153 U.S. at 694 ("no State or municipal authority can exact a license for the privilege of conducting its business, thus restraining the powers possessed by it under its franchises and under the acts of Congress")] [Massachusetts, 125 U.S. at 548 (WU's franchise was "derived from the United States by virtue of the" Post Roads Act)] Rejected. Post Roads Act is permissive. Authority of corporation is derived from state law. is permissive; the Post Roads Act did not create corporate rights [Richmond, 224 U.S. at 169 ("the statute is only permissive, not a source of positive rights")] [Gottlieb, 190 U.S. at 424 ("the statute is merely permissive")] [Talladega, 226 U.S. 404] [St. Louis, 148 U.S. at 102] [Massachusetts, 125 U.S. at 548] [City of Portland, 228 Fed. 254] Eminent Domain (take property with compensation) (Post Roads Act) Post Roads Act gives telegraph the power of eminent domain [PA RR II, 195 U.S. at 596 (seeking to maintain telegraph lines along the private property of a railroad company)] [PA RR I, 195 U.S. at 559] [Richmond, 224 U.S. at 169 (citing Pennsylvania RR)] [Philadelphia, 190 U.S. at 163 ("No corporation, even though engaged in interstate commerce, can appropriate to its own use property, public or private, without liability to charge therefor.")] [PA RR I, 195 U.S. at 569 ("the Act of July, 1866, there is not a word which provides for condemnation or compensation")] [PA RR II, 195 U.S. at 597] , or the right to enter private property without the consent of the owner. [PA RR I, 195 U.S. at 563] [Ann Arbor, 178 U.S. at 243 ("that statute did not confer on telegraph companies the right to enter on private property without the consent of the owner")] [Pensacola Telegraph, 96 US at 1 ("If private property is required, it must, so far as the present legislation is concerned, be obtained by private arrangement with its owner. No compulsory proceedings are authorized.")] The Court had "no occasion to consider the validity of the act of 1866 as an attempt to grant the power of eminent domain." If it granted such power, judicial review of the constitutionality of the Post Roads Act would have to be reconsidered. [PA RR I, 195 U.S. at 571] Exclude Others (Post Roads Act) Post Roads Act
- prohibits states from establishing state monopolies; excluding competitors
- WU can make agreement with railroad company and exclude competitor [Union Pacific, 160 U.S. at 1]
Preempted States from excluding telegraph companies or establishing a state telegraph monopoly [Richmond, 224 U.S. at 169 (citing Pensacola)] [PA RR I, 195 U.S. at 571 (citing Pensacola, stating "We decide the act to be an exercise by Congress of its power to withdraw from state interference interstate commerce by telegraph")] [Adams, 155 U.S. at 696 ("But a State cannot exclude from its limits a corporation engaged in interstate or foreign commerce, or a corporation in the employment of the general government, either directly in terms or indirectly by the imposition of inadmissible conditions.")] [Massachusetts, 125 U.S. at 548] [Pensacola Telegraph, 96 US 1]
- Preempted parties ability to enter into exclusive contracts or exclude telegraph companies from Post roads [Union Pacific, 160 U.S. at 1 ("The agreement of October 1, 1866, between the Union Pacific Railway Company, Eastern Division, and the Western Union Telegraph Company gave the telegraph company the absolute control of all telegraphic business on the routes of the railway company, and consequently tended to make the act of July 24, 1866, c. 230, 14 Stat. 221, ineffectual and was hostile to the object contemplated by Congress; and, being thus in its essential provisions invalid, it was not binding upon the railway company.")]
- Because states could not enforce its taxes, fees, or regulations by excluding a telegraph company, it had to seek other means of enforcing its laws. [Massachusetts]
Federal Jurisdiction Interstate Commerce (Commerce Clause) Congress has jurisdiction over Interstate and Foreign Commerce. [Const. art. 1, sect. 8, pars. 3 & 7] [Leloup, 127 U.S. at 645] [Pensacola Telegraph, 96 US at 9 ("Both commerce and the postal service are placed within the power of Congress, because, being national in their operation, they should be under the protecting care of the national government.")] [Joyce at 66] Telegraph is interstate commerce (Commerce Clause) States have no authority over interstate telegraph service. [Call Publishing Co., 181 U.S. at 95] Telegraph service is interstate commerce [Leloup, 127 U.S. at 645 ("communication by telegraph is commerce ... and if carried on between different States, it is commerce among the several States, and directly within the power of regulation conferred upon Congress, and free from the control of state regulations, except such as are strictly of a police character.")] [Texas, 105 U.S. at 464 ("telegraph was an instrument of commerce")] [Ratterman, 127 U.S. at 425 (citing Pensacola)] [Pendleton, 122 U.S. at 356 ("intercourse by the telegraph between the states is interstate commerce")] [Pensacola Telegraph, 96 US at 9 ("commercial intercourse is an element of commerce")] common carriage [No Argument]
- Telegraph service is a public service [Call Publishing Co., 181 U.S. at 99]
- Telegraph service is common carriage, the same as railroad service and postal service [Leloup, 127 U.S. at 645 ("we have decided that communication by telegraph is commerce, as well as in the nature of postal service")] [Ratterman, 127 U.S. at 425 ("a company occupies the same relation to commerce, as a carrier of messages, that a railroad company does as a carrier of goods.")] [Pendleton, 122 U.S. at 356 (quoting Texas)] [Texas, 105 U.S. at 464 ("A telegraph company occupies the same relation to commerce as a carrier of messages, that a railroad company does as a carrier of goods... They do their transportation in different ways, and their liabilities are in some respects different, but they are both indispensable to those engaged to any considerable extent in commercial pursuits.")]
NOTE: It's not clear what the point of the Court is here. These are not common carrier cases. No one is making a claim about liability or discrimination. It appears to be that the Court is arguing that Congress' authority over telegraph as commerce is justified in the same way Congress has established authority over these other industries. Judicial consideration of whether telegraph falls under common carrier obligations will not come till later. See Pimrose 154 U.S. 1 (1894) (telegraph is not a common carrier); Call Publishing Co., 181 U.S. at 99 (1901) (reversing the holding of the Court, telegraph is common carriage)
State Taxes - all telegraph service Post Roads Act franchise means states cannot tax telegraph service. [Gottlieb, 190 U.S. at 417 (franchises "having derived solely from the Federal government are exempt from taxation")][Ratterman, 127 U.S. at 427 ("the telegraph company have argued that this statute secures the corporation from taxation of any kind whatever")] [Massachusetts, 125 U.S. 530 ("It was alleged that the defendant company, having accepted the provisions of that law, was entirely exempt from taxation by the State")]
- States may not tax interstate commerce [Philadelphia, 190 U.S. at 162 ("No State can compel a party, individual or corporation to pay for the privilege of engaging in interstate commerce")] [Adams, 155 U.S. at 696 ("a tax is levied by a State on interstate comimerce, such taxation amounts to a regulation of such coinmerce and cannot be sustained.")] [Leloup, 127 U.S. at 648 ("no State has the right to lay a tax on interstate commerce in any form, whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts derived from that transportation, or on the occupation or business of carrying it on, and the reason is that such taxation is a burden on that commerce, and amounts to a regulation of it, which belongs solely to Congress")] [Pendleton, 122 U.S. at 358 ("Whatever authority the state may possess over the transmission and delivery of messages by telegraph companies within her limits, it does not extend to the delivery of messages in other states.")] [Texas, 105 U.S. at 464 ("As such, so far as it operates on private messages sent out of the State, it is a regulation of foreign and inter-state commerce and beyond the power of the State.")]
- [St. Louis, 148 U.S. at 102 ("there is no expression in it which implies that this permission ... carries with it any exemption from the ordinary burdens of taxation.")] [Leloup, 127 U.S. at 649 ("does not prevent the State from taxing the property of those engaged in such commerce located within the State as the property of other citizens is taxed, nor from regulating matters of local concern which may incidentally affect commerce, such as wharfage, pilotage, and the like.")] [Massachusetts, 125 U.S. at 548 (Post Roads Act does not create "any exemption from ordinary burdens of taxation")] [Gottlieb, 190 U.S. at 424 (Post Roads Act "conferred no exception from the ordinary burdens of taxation")] [Massachusetts, 125 U.S. at 552 ("it never could have been intended by the Congress of the United States, in conferring upon -a corporation of one State the authority to enter the territory of any other State and erect its poles and lines therein, to establish the proposition that such a company owed no obedience to the laws of the State into which it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support.")]
State Taxes, intrastate telegraph service [Alabama, 132 U.S. at 473 ("such taxes may be levied upon all messages carried and delivered exclusively within the state.")] [Ratterman, 127 U.S. at 425 (quoting Texas)] [Massachusetts, 125 U.S. at 548 (citing Texas)] [Texas, 105 at 466 ("Any tax, therefore, which the State may put on messages sent by private parties, and not by the agents of the government of the United States, from one place to another, exclusively within its own jurisdiction, will not be repugnant to the Constitution of the United States.")] State Taxes, property in state telegraph company property within a state [Philadelphia, 190 U.S. at 163 ("This immunity does not prevent a State from imposing ordinary property taxes upon property having a situs within its territory and employed in interstate commerce")] [Adams, 155 U.S. at 696 ("property in a State belonging to a corporation, whether foreign or doniestic, engaged in foreign or interstate commerce, may be taxed"; affirming state tax apportioned based on value of property in state measured by miles of network)] [Charleston, 153 U.S. 692] [City of Portland, 228 Fed. 254] [Massachusetts, 125 U.S. at 536 (where WU attempted to argue, in order to avoid taxes, that the value of its property in Massachusetts was zero; "the company receiving the benefit of the laws of the state for the protection of its property and its rights is liable to be taxed upon its real or personal property as any other person would be.")] [Texas, 105 U.S. at 464 ("Its property in the State is subject to taxation the same as other property, and it may undoubtedly be taxed in a proper way on account of its occupation and its business.")] State Fees, Use of State Property States may not charge telegraph for use of Post Roads [St. Louis, 148 U.S. at 100] its own property and may appropriately charge telegraph companies for use and condition such use [Richmond, 224 U.S. at 170 ("When the appellants, without the right to exercise the power of eminent domain, desires to occupy land belonging to others, prima facie it must submit to their terms" affirming municipal construction code and Fire Chief inspection )] [Southern Bell, 174 U.S. at 773 ("when an appropriation of any part of this public property to an exclusive use is sought ...it is within the competency of the State, representing the sovereignty of that local public, to exact for its benefit compensation for this exclusive appropriation.")] [St. Louis, 148 U.S. at 97] State Taxes / Fees, Assessment (Commerce Clause) State method of assessment of taxes amounts to an interference with interstate commerce [New Hope, 187 U.S. at 419 (local fee upon poles and wires was excessive and therefore "void because a regulation on interstate commerce")] [Adams, 155 U.S. at 691 (state tax apportioned based on miles of network in state is unconstitutional)] Appropriateness of assessment of legitimate state taxes is a matter for the state courts to resolve. State Taxes of Federal Govt States may not tax government use of telegraph service Affirmed: States may not tax government use of telegraph service. [Texas, 105 U.S. at 466 ("As to the government messages, it is a tax by the State on the means employed by the government of the United States to execute its constitutional powers, and, therefore, void.")] When telegraph companies provided service to the US Government, the telegraph companies acted as agents or agencies of the U.S. government [Charleston, 153 U.S. at 693 (agreeing to the Post Roads Act, the telegraph company "has put its lines at the service of the United States for postal, military, and other purposes")] [Texas, 105 U.S. at 464 ("as to government business, companies of this class become government agencies.")] [Joyce at 78 ("such accepting telegraph companies become, however, by virtue of their acceptance of the terms of the grant in said Post Roads Act, Federal agenicies as to Government business...")] State Police Powers (Post Roads Act) (Constitution Reserve Powers) States lack authority pursuant to Post Roads Act to have oversight of construction of telegraph network with codes of safety inspections [Richmond, 224 U.S. at 165 (objecting to compliance with local ordinance that city engineer review construction, poles must be shared with third party companies upon reasonable compensation, and inspection of poles by Fire Chief)] [Southern Bell, 174 U.S. at 764 ("that under the act of Congress of 1866 it was and is entitled to maintain and operate its lines through and over the streets and alleys of the city of Richmond, "without regard to the consent of the said city, and it did in fact locate many of its poles and wires and begin the operation of its business without applying to the said city for permission to do so")] Police power (Constitution Tenth Amendment): [Richmond, 224 U.S. at 170 ("When the appellants, without the right to exercise the power of eminent domain, desires to occupy land belonging to others, prima facie it must submit to their terms" affirming municipal construction code and Fire Chief inspection )] [Richmond, 224 U.S. at 171 ("The requirement that space be left in the conduits for wires of third parties, to be used upon permission by the city and compensation is merely another incident of the necessity for insisting upon a single system. It would seem not to be unreasonable for legislation... to require that a single conduit should contain all the wires under a street. ") [Philadelphia, 190 U.S. at 164 ("the city of Philadelphia had power to pass such an ordinance as this, requiring the company to pay a reasonable license fee for the enforcement of local governmental supervision.")] [Hope, 187 U.S. 419 ("a charge in the enforcement of local governmental supervision [is] not in itself obnoxious to the clause of the Constitution relied on.")] [Pendleton, 122 U.S. at 359 ("under the reserved powers of the state which are designated under that somewhat ambiguous term of "police powers," regulations may be prescribed by the state for the good order, peace, and protection of the community. The subjects upon which the state may act are almost infinite, yet in its regulations with respect to all of them there is this necessary limitation: that the state does not thereby encroach upon the free exercise of the power vested in Congress by the Constitution. Within that limitation, it may undoubtedly make all necessary provisions with respect to the buildings, poles, and wires of telegraph companies in its jurisdiction which the comfort and convenience of the community may require")]
The tone of the Supreme Court decisions suggests that even the Court was taken aback by the brazenness of Western Union's claims - particularly in the context of Western Union's claim of the power of eminent domain.
"It is a misconception, however, to suppose that the franchise or privilege granted by the act of 1866 carries with it the unrestricted right to appropriate the public property of a State. It is like any other franchise, to be exercised in subordination to public as to private rights... It never could have been intended by the Congress of the United States in conferring upon a corporation of one State the authority to enter the territory of any other State and erect its poles and lines therein, to establish the proposition that such a company owed no obedience to the laws of the State into which it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support." [St. Louis, 148 U.S. at 100]
Responding to Western Union's argument that railroads had morphed into "public highways" and that Western Union could therefore enter railroad land without restraint, the Court retorted "Counsel, in advancing the argument, exhibits a consciousness of taking an extreme position". [PA RR I, 195 U.S. at 573] [PA RR II, 195 U.S. at 597 ("they have carried the analogies between ordinary highways and railroads too far; indeed, have gone beyond analogy, and have contended for almost legal coincidence in attributes and effect.")] See also [Gottlieb, 190 U.S. at 425 ("Every one of the fundamental propositions, therefore, contended for by [Western Union, was] unsound.")] [Massachusetts, 125 U.S. at 549 ("It never could have been intended by the Congress of the United States, in conferring upon a corporation of one state the authority to enter the territory of any other state and erect its poles and lines therein, to establish the proposition that such a company owed no obedience to the laws of the state into which it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support.")]
Of the 20 Post Roads Act litigations* which reached the Supreme Court, telegraph company interests won five (25%) and lost 15 (75%) of the cases. In the first five years of Supreme Court cases, telegraph won 71% of the cases. After 1889, telegraph interests lost every case. Telegraph companies initially were successful on interstate commerce cases. Having learned their lesson from these and similar railroad cases, states were careful to have their jurisdiction end at the state border. After 1889, litigations generally involved telegraph companies seeking to avoid state taxes or oversight - and losing each round. Post Road Act Supreme Court cases were frequent for 35 years (with an odd outlier in 1928 concerning whether the Emergency Fleet Corp. qualified for the government telegraph rate under the Post Roads Act); thats an average of a case every two years.
Western Union had become the dominant telegraph company and this is reflected in who the stakeholders were in these litigations. Seventeen of the cases (85%) involved Western Union (or its officers or affiliates) as a party; two cases involved Postal Telegraph (a company which did not exist at the time the Post Roads Act was enacted), and one case involved a Bell Telephone company seeking to take advantage to the benefit of access to right of way bestowed by the Post Roads Act.
* Note that this is an analysis of Supreme Court cases that considered the Post Roads Act. It does not include any of the other litigations raised on other statutes or other grounds - such as the transcontinental acts or litigation considering common carrier obligations.
The Post Roads Act - along with the other legislation enacted with the purpose of the build-out of a nationwide communications network, the Transcontinental Telegraph Act, the War Department during the Civil War, the Pacific Railroads Act, and the Atlantic Cable Act - were the origins of federal communications law. [FCC Report 1959 at 11 ("Federal regulation of interstate electrical communications may be said to date from passage of the Post Roads Act in 1866")] It is industrial policy adopted and implemented by Congress prior to the establishment of independent expert agencies like the Interstate Commerce Commission, the Federal Radio Commission, or the Federal Communications Commission. As an expert agency would do today, Congress and the Courts of that era engaged in the day-to-day operations and oversight of telegraph, enacting several new pieces of legislation with each new Congressional session and hearing a plethora of litigation.
In 1910, the Mann Elkins Act of 1910 placed all telegraph companies under the authority of the Interstate Commerce Commission, but did not alter the Post Roads Act. [See also Emergency Fleet, 275 U.S. at 418, 426 ("The Post Roads Act had been in force, without amendment, more than 55 years." "it clearly was not the intention of Congress, by the Act of 1910, to abrogate or modify the scope or affect the application of the Post Roads Act.")]
In 1934, the Post Roads Act was incorporated, with minimal change, into the first sections of the Communications Act of 1934. Postal service and other agencies authority over telegraph was consolidated in the Federal Communications Commission. Note that while Congress invested significant effort in revising the common carrier obligations first articulated in the Pacific Railroad Act amendment of 1888 and then in again in the Mann-Elkins Act of 1910, creating title II of the Communications Act, Congress put little effort into the Post Roads Act, simply pressing copy and paste of the provisions into the first sections of the new statute.
The Post Roads Act was repealed on July 16, 1947: ch. 256, § 1, 61 Stat. 327: An Act To repeal the Post Roads Act of 1866, as amended, and for other purposes
The Post Roads Act does not reference telephone companies [PA RR, 195 U.S. at 551 ("this court having limited the application of the act of July 24, 1866, to telegraph companies proper.")] The Post Roads Act was enacted in 1866; Bell first patented the telephone in 1876. [Southern Bell, 174 U.S. at 775 ("Congress in 1866 knew only of the invention then and now popularly called the telegraph.")] The first of Post Roads Act case that contains a reference to telephone companies is St Louis v. Western Union,148 U.S. 92 (1893). In 1899, the Court considered directly the question of whether the Post Roads Act covered telephone companies, and concluded that it does not. [Southern Bell, 174 U.S. at 777-78 (noting that Congress was not aware of the telephone invention at the time of enactment of the Post Roads Act)] The Court opined that if Congress wanted the legacy communications legislation to cover the new communications medium, Congress was at liberty to amend the legislation to achieve that end. [Southern Bell, 174 U.S. at 777 ("If, Congress desires to extend the provisions of the act of 1866 to companies engaged in the business of electrically transmitting articulate speech ... let it do so in plain words.")]
But Congress may have had little incentive to do so. First, the Post Roads Act was a government contract for communications service; government work was done by telegraph not telephone. [Southern Bell, 174 U.S. at 776] . Second, telegraph service provided interstate communications. Telephone service for its part and well into the 20th Century provided local service, outside the jurisdiction of Congress.
There is also the fact that while the Court in Southern Bell concluded that telephone did not equal telegraph, every other forum for every other purpose that considered the question did conclude that telephone = telegraph. [Southern Bell, 174 U.S. at __ (noting but distinguishing authorities that concluded telephone = telegraph)] [Joyce at 70 (a treatise on electric law written before Southern Bell, stating that courts had held "that a telephone company might avail itself of the privileges conferred on telegraph companies by said Post Roads Act. ] Compare The Wisconsin Teleph. Co. v. Oshkosh, 62 Wis. 32, I Am. Elec. Cas. 687, 690, per Cassody, J. (citingPensacola concerning the evolution of the law to cover unanticipated inventions at enactment, stating “Of course no one supposes that the legislature intended to refer specifically to telephones many years before they were invented, but it is highly probable that they would, and it seems to me clear that they eventu ally did, use language embracing future discoveries as to the use of electricity for the purpose of carry ing intelligence.”)
Nevertheless, according to Southern Bell, the Bell companies could not take advantage of the Post Roads Act by merit of the fact that they were named "telephone and telegraph" companies. In 1879, AT&T and Western Union settled a patent dispute and divided the market; AT&T provided telephone service and Western Union provided telegraph service. Regardless of having both services in many Bell telephone company's names, they in fact provided only telephone service. [Southern Bell, 174 U.S. at 773 (finding that Southern Bell was in the business of providing telephone service, noting the 1879 agreement between Western Union and Bell Telephone)]
It is true, however, that telephone and telegraph companies used the same poles and ROW. Telegraph and then telephone service were revolutionizing industry, the economy, media, and society. People were demanding these services; the local governments' incentive was to facilitate the build out of the information superhighway, not impede it. The states, for there part, amended statutes to include telephone companies. [PA RR, 195 U.S. at 551 (citing "New Orleans, M. T.R.R. Co. v. S. A.T. Co., 53 Ala. 211; Colorado: Union Pac. R. Co. v. Colo. Postal Tel. Cable Co., 69 P. 564; Georgia: S.F. W. Ry. Co. v. Postal Tel. Co., 38 S.E. 353; Idaho: Postal Tel. Co. v. O. St. Line Ry. Co., 104 F. 623; Illinois: St. L. C.R.R. Co. v. Postal Tel. Co., 173 Ill. 508; Kentucky: Postal Tel. Co. v. Mobile O.R. Co., 54 S.W. 727; Louisiana: Postal Tel. Co. v. M., L. T.R.R. S.S. Co., 21 So. 183; Mississippi: Mobile O.R. Co. v. Postal Tel. Co., 26 So. 370; North Carolina: Phillips v. Postal Tel. Co., 41 S.E. 1022; Tennessee: Mobile O. Ry. Co. v. Postal Tel. Co., 41 L.R.A. 403; Texas: T. N.O. Ry. Co. v. Postal Tel. Co., 52 S.W. 108; Virginia: Postal Tel. Co. v. Farmville P.R. Co., 32 S.E. 468; Utah: Postal Tel. Co. v. Oregon Short Line, 65 P. 735; Ohio: R.S. §§ 3454 et seq.")] [Southern Bell, 174 U.S. at 764 (citing The Code of Virginia adopted in 1887, § 1287, giving telephone and telegraph companies right to construct lines along roads)]
When telegraph service first sought to install poles on roads and right of ways, the service was novel and the negotiation with local governments new. By the time telephone service came along as the younger sibling, electronic wire communications was well established and in high demand, and the speed bumps of negotiating with local authorities had been pounded down - at least to an extent. Telephone may not have equaled telegraph under the Post Roads Act, but it did for just about every other purpose, and thus the telephone followed easily in the wake of telegraph.
Telegraphs = Posts (Congressional authority over telegraph service and ability to enact Post Roads Act)
Telegraphs = Rail roads (judicial interpretation of common carrier obligations)
Telephone = Telegraph (ROW access, right to incorporate, liability, non descrimination and subsidies)
Legacy of the Post Roads Act
What did we learn from 50 years of Post Roads Act litigation?
Not a lot. A least, not in terms of the Post Roads Act. Few of the outcomes of these cases where the Post Roads Act was raised by the litigants were determined by the Post Roads Act itself. Instead, these cases were determined primarily by the Commerce Clause - with the court exploring a novel clash - post Civil War - between federal and state authority. These courts explored the boundary where the authority of the federal government ends and the authority of the states begins. [PA RR I, 195 U.S. at 565 ("the distinction which was necessary to make was between intra- and interstate commerce, and to determine what rights as to the latter were conferred by the act of 1866")].
Did the Post Roads Act make a difference? It's not clear that it did. The Civil War had just been won by the North using its industrial might, including strategic use of the telegraph. The media value of telegraph was now well established with the coverage of the Mexican American War, the Civil War, and Reconstruction. Industry had come to rely on it as a vital economic input. Western Union had established itself as one of the first nationwide monopolies - its network effect value - the ability to reach so much of the country over that network - was large and meant any state which obstructed the entrance of Western Union into that state's market was an idiot and harming its own economy (oops, Florida). This was the original Digital Divide program - with people demanding telegraph service - not attempting to thwart it.
What the Post Roads Act did was grant access to ROW. In terms of state owned and municipal owned ROW, public demand and economic necessity achieved that. In terms of railroads, the Pacific Railway Acts did that - requiring all railroad lines to build telegraph lines; an obligation which they could, and did, assign to Western Union. What the Post Roads Act did do was a land grant for the construction of telegraph service over public land - and that land grant was not itself a source of legal contention. Otherwise, other than first Post Roads Act Supreme Court Case Pensacola, where Florida sought to exclude Western Union - oh and Union Pacific where Western Union sought to exclude a competitor - the core right which The Post Roads Act granted (access to Post Roads ROW) was not itself in contention.
This was the birth of public communications policy. It was a time before an independent expert agency. Congress and the Courts addressed oversight of industry on a day to day basis. The Post Roads Act cases brought a case before the Supreme Court on average once every two years - and this was over a law which did little more than give the telegraph service access to ROW. That does not include the litigations that were resolved in the lower courts. That does not include the litigations that involved the questions of common carriage or the rights of telegraph companies under other legislation such as the Pacific Railway Act. Congress, for its part, enacted at least eighteen new telegraph related statutes over 30 years. The justification for assigning telegraph (and telephone) oversight to an executive agency, getting it off the desk of Congress and the courts, was being well established.
This was an era of firsts. Electronic communications was new. Instantaneous information transmission was new - leading to new media in the form of newspapers and the Associated Press - and new industry. Privately owned communications networks were new. National monopolies were new. Public communications policy itself was new. Everything was being invented.
Also new was restraint. Since 1842, Congress had been actively supported the innovation and expansion of telegraph service. During that time, telegraph had helped save the Union, it had helped avoid a war with Britain, it helped unite a westwardly expanding nation, and it created a new form of media and democratic discourse with real time information transmission of the news of the nation. Up until the Post Roads Act litigations, the only federal policy telegraph had experienced was the receipt of support and funding. That changed. The Court said no, telegraph could not take land for free; no, telegraph could not take land even with compensation (no power of eminent domain); no, telegraph could not avoid paying fees and taxes on land it lawfully occupied; no, telegraph could not avoid paying for police and government services; and no, telegraph could not ignore local zoning and safety regulation. Private telecommunications companies - here in the form of telegraph providers - were experiencing for the first time restraint at the hands of the federal government.
Anticipating the great court dissent of Justice Brandeis (who was in law school at this time observing this transformation), the court reflected on the challenges of innovation and the necessity of the evolution of the law:"The powers thus granted are not confined to the instrumentalities of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances. They extend from the horse with its rider to the stage-coach, from the sailing-vessel to the steamboat, from the coach and the steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth. They were intended for the government of the business to which they relate, at all times and under all circumstances."
- Pensacola Telegraph, 96 US at 9 (Chief Justice Waite).
See also Telegraph Reference Caselaw
Post Roads Act Supreme Court Litigation Outcome
Relative to telegraph
Emergency Fleet Corp. v. Western Union Telegraph Co., 275 US 415 - Supreme Court 1928 (whether plaintiff should be charged the government rate or the commercial rate, stating that "For the fiscal years beginning July 1, 1921, and July 1, 1922, they were fixed for domestic telegrams substantially at 40 per cent of the commercial rate; and for cablegrams at 50 per cent of the commercial rate.") [Emergency Fleet, 275 U.S. at __] Lose Williams v. Talladega, 226 U.S. 404, 416, 33 Sup. Ct. 116, 57 L. Ed. 275 (1912) ("the privilege given under the terms of the act to use the military and post roads of the United States for the poles and wires of the company is to be regarded as permissive in character and not as creating corporate rights and privileges to carry on the business of telegraphy, which were derived from the laws of the State incorporating the company,") [Talladega, 226 U.S. 404] Lose Western Union Telegraph Co. v. Richmond, 224 U.S. 160 (1912) (The act of Congress of course conveyed no title and did not attempt to found one by delegating the power to take by eminent domain) [Richmond, 224 U.S. at __] [k] Lose
Western Union Telegraph Co. v. Pennsylvania Railroad, 195 U.S. 594 (1904) ("does not confer upon telegraph companies, the right to enter upon private property without the consent of the owner or grant them the right of eminent domain") [PA RR II, 195 U.S. 594, __]
Western Union Tel. Co. v. Pennsylvania R. Co., 195 U.S. 540 (1904) [PA RR I, 195 U.S. at __] [k] (PP RR I addresses primarily WU's arguments concerning the Post Roads Act; PP RR II addresses primarily WU's rights under state law as a lessee, finding that the rights belonged to the lessor not the lessee)
Lose Western Union Telegraph Co. v. Gottlieb, 190 U. S. 412, 23 Sup. Ct. 730, 47 L. Ed. 1116 (1903) (WU sought to avoid state tax assessment, repeating now resolved argument that it is franchised by USG pursuant to the Post Roads Act and that the tax was excessive. Held, the Post Roads Act "was merely permissive" and was not authority for the establishment of the corporation and does not give WU the ability to avoid state taxes; and whether state taxes are excessive is appropriately reviewed by the state judiciary)" [Gottlieb, 190 U.S. at __] Lose Atlantic and Pacific Telegraph Company v. Philadelphia, 190 U.S. 160 (1903) (a license fee for police supervision of property, "the municipality is not bound to furnish such supervision for nothing, and may, in addition to ordinary property taxation, subject the corporation to a charge for the expense of the supervision." Atlantic and Pacific Telegraph had been acquired by WU) [Philadelphia, 190 U.S. __] Lose Western Union Telegraph Company v. Borough of New Hope, 187 U.S. 419 (1902) (local "license fee upon telegraph poles and wires within its limits" "was a charge in the enforcement of local governmental supervision, and as such not itself obnoxioous to the" Constitution) [New Hope, 187 U.S. at __] [k] Lose Western Union Tel. Co. v. Ann Arbor Railroad Co., 178 U.S. 239 (1900) (Post Roads Act "did not confer on telegraph companies the right to enter on private property without the consent of the owner, and erect the necessary structures for their business; `but it does provide that, whenever the consent of the owner is obtained, no state legislation shall prevent the occupation of post roads for telegraph purposes by such corporations as are willing to avail themselves of its privileges.'") [Ann Arbor, 178 U.S. 239 ] Lose Richmond v. Southern Bell Telephone and Telegraph Co., 174 U.S. 761 (1899) [Southern Bell, 174 U.S. at __] [k] Lose United States v. Union Pacific Railway Co. & Western Union Telegraph Co., 160 U. S. 1 (1895) (Pursuant to the Post Roads Act, "no railroad company operating a post-road of the United States, over which interstate commerce is carred on, can bind itself, by agreement, to exclude from its roadway any telegraph company") [Union Pacific, 160 U.S. at __] [k] Lose Postal Cable Telegraph Company v. Adams, 155 U.S. 688 (1895)(Mississippi's tax on telegraph company, "according to the amount and value of the property measured by miles," in lieu of other taxes, was within the power of the state to charge) [Adams, 155 U.S. at ] [k] Lose Postal Telegraph Cable Co. v. Charleston, 153 U.S. 692 (1894) (affirming authority of Charlestown to impose license fee on telegraph companies for business conducted within Charleston excluding interstate commerce and U.S. government business ) [Charleston, 153 U.S. __] Lose St. Louis v. Western Union Telegraph Company, 148 U.S. 92 (1893) (rejecting WU's argument that the Post Roads Act WU was entitled to occupy the streets of St Louis without charge to the city - WU objecting to a charge of $5 per pole for purposes of upkeep and maintenance of the road and sidewalk where the pole was installed. 99: The court anticipates the streets of cities becoming overwhelmed with telegraph and telephone lines: "By sufficient multiplication of telegraph and telephone companies the whole space of the highway might be occupied, and that which was designed for general use for purposes of travel entirely appropriated to the separate use of companies and for the transportation of messages.") [St. Louis, 148 U.S. at ] Lose Western Union Tel. Co. v. Alabama State Board of Assessment, 132 U.S. 472 (1889) (Alabama tax on gross receipts of all telegraph business done in the state, including "receipts from messages carred partly within and partly without the state," held the gross receipts for intra and interstate telegraphs can be separated, and Alabama courts's affirmation of the tax is reversed)[Alabama, 132 U.S. at __] [k] Win Leloup v. Port of Mobile, 127 U.S. 640, 645 (1888) (state license tax on telegraph company's right to do business in state, "a large part of whose business is the transmission of messages from one State to another and between the United States," held to be unconstitutional. Leloup was WU agent.) [Leloup, 127 U.S. at __] [k] Win Ratterman v. Western Union Telegraph Co., 127 U.S. 411 (1888) ("A single tax, assessed under the laws of a State upon receipts of a telegraph company which were partly derived from interstate commerce and partly from commerce within the State, and which were capable of separation but were returned and assessed in gross and without separation or apportionment, is invalid in proportion to the extent that such receipts were derived from interstate commerce, but is otherwise valid." Leloup was an agent of WU) [Ratterman, 127 U.S. at ][k] Lose
Western Union Telegraph Co. v. Massachusetts, 125 U.S. 530 (1888) (rejecting WU's attempt to operate within Massachusetts under the authority of the Post Roads Act exempt from state taxation - a tax imposed by the laws of Massachusetts upon the Western Union Telegraph Company, a corporation of the State of New York, on account of the property owned and used by it within Massachusetts, was valid.) [Massachusetts, 125 U.S. __] [k]See alsoMass. v. Western Un. Tel. Co., 141 U.S. 40 (1891) (a follow up litigation where parties quibbled over how Western Union could pay for the taxes due, and whether WU "was entitled to the benefit of the sum paid into court.")
Lose Western Union Telegraph Co. v. Pendleton, 122 U.S. 347 (1887) (Complaint based on Indiana law, for failure to deliver in Iowa a telegraph originated in Indiana addressed to plaintiff in Iowa - holding that whatever jurisdiction a state may have over telegraphs in its own state, it does not extend into another state) [Pendleton, 122 U.S. at __] [k] Win Telegraph Co. v. Texas, 105 U.S. 460 (1882) (464 A Texas tax on all telegraphs, "so far as it operates on private messages sent out of the State, it is a regulation of foreign and inter-state commerce and beyond the power of the State. ... As to the government messages, it is a tax by the State on the means employed by the government of the United States to execute its constitutional powers, and, therefore, void.") [Texas, 105 U.S. at ] [k] Win Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1 (1877) (states may not franchise state telegraph monopolies: The Post Roads Act "substantially declares, in the interest of commerce and the convenient transmission of intelligence from place to place by the Government of the United States and its citizens, that the erection of telegraph lines shall, so far as state interference is concerned, be free to all who will submit to the conditions imposed by Congress, and that corporations organized under the laws of one State for constructing and operating telegraph lines shall not be excluded from prosecuting their business within its jurisdiction, if they accept the terms proposed by the National Government for this national privilege.") [Pensacola Telegraph, 96 US at] [k] Win
Postal Telegraph Co. v. City of Portland, 228 Fed. 254 (D.Or. 1915) ("The privilege granted by Congress under the Post Roads Act to use the military and post roads of the United States for the poles and wires of the company is permissive in character only, and is not to be regarded as creating corporate rights or privileges to carry on the business of telegraphy. Those rights and privileges are derived from the laws of the state under which the company is incorporated, and the state is not, by reason of the Post Roads Act, prevented from taxing the real or personal property belonging to the company within its borders, nor from imposing a license tax upon the right to do a local business within the state.") [City of Portland, 228 Fed. 254]