|Telegraph :: 1857 :: Land Grant Telegraph|
The Transcontinental Telegraph
With the entrance of California into the Union, and anticipation of the coming Civil War, there was a strong desire for a Transcontinental Telegraph Service that could unite the country and foster commerce. A nationwide telegraph service would be a military strategic advantage and could help communications with western forts. [Bates, Telegraph in California] [History Pacific Telegraph(lobbying of Congress for a transcontinental line started in about 1851)] 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]
It was thought, however, that the job was to big for any one telegraph company. Morse's initial business strategy of licensing many smaller companies had resulted in many providers in the market, none of which had the capital or scale to take on a transcontinental venture. Therefore, state and federal funding was considered necessary to create an incentive and ability for the providers. [Gamble ("An examination of them in detail led to the conviction that no private company would be able to successfully build and maintain telegraphic communication across the continent, the cost of maintenance after the construction of the line being too great. Government aid was consequently considered absolutely necessary if the enterprise were to be carried out.")]
In order to effectively bid on the USG's requests for proposals to built the transcontinental line, smaller telegraph companies would have to pool their financial resources. This would, in effect, create an incentive on the part of telegraph providers for collusion and consolidation. The US Government along with the States created a winner-takes-all funding opportunity for whichever company managed to achieve the feat of crossing the West with a telegraph line. According to James Gamble, in response to the Federal announcement of funding for the telegraph line, large telegraph companies gathered in New York city, decided that Western Union was the company in the best position to bid on the contract, Western Union would big the maximum possible price for the contract, and all participating telegraph services would be able to take advantage of the telegraph line."The Grand Confederated North American Association held a convention at New York, and agreed, as the Western Union Company had more at stake than any other Eastern company, to refer the whole matter to it and to the Placerville and St. Joseph Company. The Western Union Company resolved to put in a bid at the maximum price fixed by Congress, the bid to go in Hiram Sibley's name, but if successful, all the California lines, so disposed were to share in the benefits." [Gamble]. See also [History Pacific Telegraph discussing how whichever 'Nation's' territory the line would run through would benefit and own the line, "it was agreed in the North American Association, at its convention in the summer of 1859, that the central route should be adopted."] [The members of the Grand Confederated North American Association were the members of the Six Nation Treaty]
In the end, Western Union is the sole bidder for the contract - all other bidders stepping aside for Western Union - the contract would drive substantial expansion of Western Union, and drive consolidation with the participating telegraph companies along the way.
The bid was for a guarantee of $40,000 worth of USG business for 10 years, with an excessive traffic charged at an additional rate. [Smithsonian] [Beauchamp 66] [Smithsonian Guide 1986] [Smithsonian ("In 1860 Congress passed, and President James Buchanan signed, the Pacific Telegraph Act, which authorized the Secretary of the Treasury to seek bids for a project to construct a transcontinental line. When two bidders dropped out, Hiram Sibley, representing Western Union, was the only bidder left. By default Sibley won the contract.")] [History Pacific Telegraph ("On opening the bids they were four: Hiram Sibley, $40,000 a year; B.F. Ficklin, $35,000; Theodore Adams, $29,000; Harmon & Clark, $25,000. But before the time for giving the bonds rolled around, all parties except the highest bidder had withdrawn- so Secretary Cobb gave the job to Sibley.")] [WU History of the Post Roads Act 1947 at 133 ("It was feared that, among other things, the Indians would interrupt its operation. There was still greater doubt as to whether, if completed, it would be possible to operate it at a profit... It was completed on October 24, 1861, 4 months and 11 days after the work commenced, and on November 1, 1861, the formal contract between the Government and Mr. Sibley, reciting that the line had been built and was then in operation, was executed. The contract was thereafter assigned by Mr. Sibley to Western Union. ")] [WU History of the Post Roads Act 1947 at 133 ("In other words, the Government guaranteed the contractors that it would send $40,000 worth of telegraph messages, calculated at full commercial rates, each year, and would pay at full commercial rates for any excess.")]. [WU History of the Post Roads Act 1947 at 133 (Pres. Egan, "an effort to aid other telegraph companies to compete with (Western Union), and thereby give the Government relief from its contract of 1861. This contract had been made for 10 years and since it had fixed the maximum rates there was no possibility of regulating the rates below that maximum. The Act of 1860 might, of course, have provided for lower maximum rates, or for a sliding scale, or for the reservation of power in Congress to regulate rates; but the important thing in 1860 was to make sure that a line should be built, and built by private enterprise. This contract was very profitable to the company and it was to secure some relief from this contract that the Post Roads Act was introduced.")] [Post Roads Act Leg. His. at 3486 (Sen. Doolittle, "The truth is, that in 1860, before we had any. such communication as telegraphs across the continent, and when by the great mass of the people it was regarded as almost a Utopian scheme to propose to build a telegraph to the Pacific, Congress passed a law by which it let to the lowest bidder the right to build a telegraph line from Missouri across to San Francisco. The bids were to be advertised for, I think, sixty days, and as an inducement to enable some person or company to go into the con struction of this telegraph line Congress agreed in behalf of the Government that it would use the line across the continent and pay for the use of it $40,000 per year. They further agreed that if the company did more than $40,000 worth of telegraphing for the Government at the ordinary price for which telegraphing was done for individuals, they would pay the excess over the $40,000. Congress agreed that the Government business should amount to the sum of $40,000 a year to the contractors. The fact is, that the business of the Government has much exceeded, I suppose, the $40,000 every year since the telegraph line was completed.")] [Supplemental Statement of Norvin Green, June 9, 1890 at 5 ("Indians only , without aid from the Government , and the Government , as subsequent exigencies proved , most wisely extended it . My company , the Southwestern , was asked to unite in bidding for this contract , but declined . Judge Caton , the presi dent of the lines in Illinois and Missouri , also declined . Even the Western Union Telegraph Company , as a corporation , declined to put up the money for this hazard ous undertaking There was but one bidder at the maximum annuity authorized to be paid . That bidder was Hiram Sibley , on his own account , though he was then president of the Western Union Telegraph Company . The law did not authorize a contract to be made until the line was built . The bid was accepted , the line constructed , and the contract entered into and signed by Salmon P . Chase , Secretary of the Treasury , and Hiram Sibley , on November 1 , 1861 . For the first five years of the term the Govern ment might better have paid $ 100 , 000 per annum than been without the use of that line . It was completed just at the time that its use was indispensable to the Govern ment . You can imagine how gladly Secretary Chase signed that contract at that particu lar juncture ; and how grateful was President Lincoln for the wisdom and foresight of the preceding Congress in providing that timely and opportune facility for quick communication across the continent . The records in the Treasury Department show that the assignment of the contract to the Western Union Telegraph Company was approved December 2 , 1869 , or when it had less than two years to run .")]
Part of the same policy of connecting the nation, and giving the federal government the ability to move troops, moves supplies, and communicate with nation, the Transcontinental Telegraph Act was quickly followed by Pacific Railroad Acts.
The policy objective was nationwide telegraph communications service; the policy outcome was a nationwide telegraph communications service provider.
1858: Legislation introduced for the Postmaster General to contract for the construction of a transcontinental line to carry government messages, at the expense of $70,000 per year. The bill did not make it out of committee. [History Pacific Telegraph]
1859: California enacts legislation establishing a grant of $6000 for the first company that could build a transcontinental telegraph line, and $4000 a year for the second company to build a line. [Gamble[Bates, Telegraph in California] [History Pacific Telegraph]
Multiple proposals were introduced in Congress
- Southern Route is proposed by Mr. Green through Missouri, Arkansas, Texas, to Los Angeles.
- Dr. Gwin introduced legislation for the Postmaster General to contract for the construction of a line through Salt Lake to San Francisco, to be built by the Placerville Humboldt Company. Jefferson Davis opposed this legislation.
The Pacific Telegraph Act is enacted authorizing the construction of a transcontinental telegraph. Bids from private companies were solicited.[Smithsonian] [Beauchamp 66] [Smithsonian Guide 1986] [Smithsonian ("In 1860 Congress passed, and President James Buchanan signed, the Pacific Telegraph Act, which authorized the Secretary of the Treasury to seek bids for a project to construct a transcontinental line. When two bidders dropped out, Hiram Sibley, representing Western Union, was the only bidder left. By default Sibley won the contract. The Pacific Telegraph Company was organized for the purpose of building the eastern section of the line. Sibley sent Wade to California, where he consolidated the small local companies into the California State Telegraph Company. This entity then organized the Overland Telegraph Company, which handled construction eastward from Carson City, Nevada, joining the existing California lines, to Salt Lake City, Utah. Sibley's Pacific Telegraph Company built westward from Omaha, Nebraska. Sibley put most of his resources into the venture. The line was completed in October, 1861. Both companies were soon merged into Western Union")] [Stathis]
"AN ACT TO FACILITATE COMMUNICATION BETWEEN THE ATLANTIC AND PACIFIC STATES BY ELECTRIC TELEGRAPH"
PASSED BY THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES AND APPROVED BY THE PRESIDENT, JUNE 16, 1860.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury, under the direction of the President of the United States, is hereby authorized and directed to advertise for sealed proposals, to be received for sixty days after the passage of this act, (and the fulfillment of which shall be guaranteed by responsible parties, as in the case of bids for mail contracts,) for the use by the government of a line or lines of magnetic telegraph, to be constructed within two years from the thirty-first day of July, eighteen hundred and sixty, from some point or points on the west line of the State of Missouri, by any route or routes which the said contractors may select, (connecting at such point or points by telegraph with the cities of Washington, New Orleans, New York, Charleston, Philadelphia, Boston, and other cities in the Atlantic, Southern, and Western States, to the city of San Francisco, in the State of California, for a period of ten years, and shall award the contract to the lowest responsible bidder or bidders, provided such proffer does not require a larger amount per year from the United States than forty thousand dollars; and permission is hereby granted to the said parties to whom said contract may be awarded, or a majority of them, and their assigns, to use until the end of said term, such unoccupied public lands of the United States as may be necessary for the right of way and for the purpose of establishing stations for repairs along said line, not exceeding at any station one-quarter section of land, such stations not to exceed one in fifteen miles on an average of the whole distance, unless said lands shall be required by the government of the United States for railroad or other purposes, and provided that no right to preempt any of said lands under the laws of the United States shall inure to said company, their agents or servants, or to any other person or persons whatsoever: Provided , That no such contract shall be made until the said line shall be in actual operation, and payments thereunder shall cease whenever the contractors fail to comply with their contract; that the government shall at all times be entitled to priority in the use of the line or lines, and shall have the privilege, when authorized by law, of connecting said line or lines by telegraph with any military posts of the United States, and to use the same for government purposes: And provided , also, That said line or lines, except such as may be constructed by the government to connect said line or lines with the military posts of the United States, shall be open to the use of all citizens of the United States during the term of said contract, on payment of the regular charges for transmission of dispatches: And provided , also, That such charges shall not exceed three dollars for a single dispatch of ten words, with the usual proportionate reductions upon dispatches of greater length, provided that nothing herein contained shall confer upon the said parties any exclusive right to construct a telegraph to the Pacific., or debar the government of the United States from granting from time to time, similar franchises and privileges to other parties.
Sec. 2. And be it further enacted, That the said contractors, or their assigns, shall have the right to construct and maintain, through any of the territories of the United States, a branch line, so as to connect their said line or lines with Oregon; and that they shall have the permanent right of way for said line or lines, under, or over, any unappropriated public lands and waters in the said territories, by any route or routes which the said contractors may select, with the free use during the said term of such lands as may be necessary for the purpose of establishing stations for repairs along said line or lines, not exceeding, at any station, one quarter-section of land, such stations not to exceed one in fifteen miles or an average of the whole distance; but should any of said quarter-sections be deemed essential by the government, or any company acting under its authority, for railroad purposes, the said contractors shall relinquish the occupancy of so much as may be necessary for the railroad, receiving an equal amount of land for like use in its stead.
Sec. 3. And be it further enacted , That if, in any year during the continuance of the said contract, the business done for the government, as hereinbefore mentioned, by such contractors or their assigns, shall, at the ordinary rate of charges for private messages, exceed the price contracted to be paid as aforesaid, the Secretary of the Treasury shall, upon said accounts being duly authenticated, certify the amount of such excess to Congress: Provided , That the use of the line be given, at any time, free of cost, to the Coast Survey, the Smithsonian Institution, and the National Observatory, for scientific purposes: And Provided further , That messages received from any individual, company, or corporation, or from any telegraph lines connecting with this line at either of its termini, shall be impartially transmitted in the order of their reception, excepting that the dispatches of the government shall have priority: And provided further , That Congress shall at any time have the right to alter or amend this act.
Approved, June 16, 1860.
36 Cong., 1 Sess., Chapter 137. 12 Stat. 41-42
The Pacific Telegraph Act was a government contract for ten years of telegraph service. The USG received telegraph service and priority over the line; the telegraph company received guaranteed payment for service for the bid price ($40,000) for ten years, plus payment for any service provided in excess of that amount, access to public land, and the ability to use the line for commercial service.
Benefits to Telegraph Co. Benefits to USG
- Bid price ($40,000) annually, for ten years, for service to the government; as well as revenue for any service in excess of that amount (Sec. 3)
- Permission (not title) to use public land until end of term. (Sec. 1)
- Transcontinental telegraph service
- Priority service
- Established rate for service
Western Union organized two companies to build the telegraph line; one going west from Omaha, the other going east from California. The two lines would meet in Salt Lake City, and split funding equally. Upon completion, the two companies would be merged into Western Union.
Pacific Telegraph Company formed in 1861 to build transcontinental telegraph line westward from Omaha, Nebraska. [Bates, Telegraph in California]
The California State Telegraphy Company would build the line from California to Salt Lake City; the Overland Telegraph Company was formed to do the work. James Gamble from the California State Telegraph Company was placed in charge of the Overland Telegraph Company. [Gamble ("The parties whom Mr. Sibley represented met at Rochester, New York, and agreed that if all the California lines would consolidate they should have construction of the line from Salt Lake to the Pacific connection, while the Western Union Company should build from Salt Lake to the eastern connection. It was also agreed that the California and Government subsidies, together with the receipts, should be divided equitably between them. In the fall of the same year, 1860, J.H. Wade, the representative of the Western Union Company, came to California to complete arrangements for the commencement of the great work. He brought the matter before the several companies then in operation on the Pacific Coast, proposing to them a plan of consolidation of all their lines, which was immediately carried out. The different companies agreed to consolidate with the California State Telegraph Company, and to create a new company called the Overland Telegraph Company with a capital stock of $1,250,000, to complete a line from San Francisco to Salt Lake. This company, on the completion of the line, was merged into the California State Company (the capital stock being doubled), which, from that time until its later consolidation with the Western Union, owned and controlled the telegraph lines from San Francisco to Salt Lake.")][Smithsonian ("The Pacific Telegraph Company was organized for the purpose of building the eastern section of the line. Sibley sent Wade to California, where he consolidated the small local companies into the California State Telegraph Company. This entity then organized the Overland Telegraph Company, which handled construction eastward from Carson City, Nevada, joining the existing California lines, to Salt Lake City, Utah. Sibley's Pacific Telegraph Company built westward from Omaha, Nebraska. Sibley put most of his resources into the venture. The line was completed in October, 1861. Both companies were soon merged into Western Union")] [Smithsonian Guide 1986 (The Pacific Telegraph Company and the Overland Telegraph Company were then merged into Western Union.)] [Bates, Telegraph in California ("Jeptha H. Wade, another prominent figure in the building of the new line, succeeded in consolidating the four lines in California and in obtaining a concession of $100,000 from the state for the work.")] [History Pacific Telegraph ("The reader will see at a glance that if California had any hope that its lines should ever effect a junction with the wires of the East it must be by consolidating all the Pacific companies into a ninth nation, accepting a seat and a share in the Great Telegraph Confederation, and in return be governed by the tariffs and rules that it might vouchsafe. The 'Nations' were all powerful by virtue of their agreement mutually to respect each others rights, to protect each other jointly from competing lines, and - in case a desirable line should be erected by outsiders, to give it no support, but if necessary to erect an opposition line between the same points and starve the interloper into a lease or abandonment.")]
The route of the telegraph line tracked the route of the Pony Express. It went as follows
- Virginia City, Nevada
- Ruby Valley
- Egan Canyon
- Deep Creek
- Salt Lake City
- South Pass
- Fort Laramie
- Fort Kearney
- South Platte
[Gamble (recounts negotiating with the local Indian Chiefs)] [Telegraph History ] [Bates, Telegraph in California ]
Pony express route April 3, 1860 - October 24, 1861, LOC
With the Pacific Railroad Act and the establishment of the transcontinental railroad, the original transcontinental telegraph route was abandoned and moved to the railroad line. Partly the telegraph benefited the railroad (train coordination; station communications), and the railroad benefited the telegraph (movement of employees and material) - and partly placing the telegraph along railroads helped protect it from destruction by Native Americans. [WU Report 1869at 10] [Supplemental Statement of Norvin Green, June 9, 1890 at 6 ("It has been said the amount given annually by the Government was sufficient to construct the line. So far is that from the truth it was not one quarter sufficient to maintain the line, and would not be at this time if the line had not been removed to the rail roads under a subsequent act of Congress, but was still on the highways or trails where it was built.")]
Oct. 24th: First Transcontinental Telegraph System completed. Western Union's eastern and western networks are linked in Salt Lake City. [America's Story, LOC] [History.com] [Learning Lincoln Online] [Engineering and Technology History Wiki] [Standage 59] [WU History] [Gamble] [Porticus]
One report estimated the cost of construction at approximately $400,000. [History Pacific Telegraph ("The cost of construction is not, we suppose, a public fact; but "they say" that $200,000 will cover the cost from Carson Valley to Salt Lake City, and the same figure must have put it through from that point eastward to the construction. In return they have, without any question, a guarantee in the California State subsidy, and the Congressional grant, of ten percent of the cost yearly, for ten years, to say nothing of the use for 10 years, of the land for stations, where a ten years' use conveys substantially a vested right for ever. If the tariffs will pay the expenses of maintaining the wire in working order now, it must yield a handsome profit as soon as the people have fully awaken to the advantages its use affords them.")
First Telegraph from Salt Lake City to California[Gamble]
GREAT SALT LAKE CITY, OCTOBER 24, 7 P.M.
TO HON. H. W. CARPENTIER, PRESIDENT OF THE OVERLAND TELEGRAPH COMPANY
DEAR SIR: I AM VERY MUCH OBLIGED FOR YOUR KINDNESS, MANIFESTED THROUGH YOU AND MR. STREET, IN GIVING ME PRIVILEGE OF FIRST MESSAGE TO CALIFORNIA. MAY SUCCESS EVER ATTEND THE ENTERPRISE. THE SUCCESS OF MR. STREET IN COMPLETING HIS END OF THE LINE UNDER MANY UNFAVORABLE CIRCUMSTANCES IN SO SHORT A TIME IS BEYOND OUR MOST SANGUINE ANTICIPATIONS. JOIN YOUR WIRES WITH THE RUSSIAN EMPIRE, AND WE WILL CONVERSE WITH EUROPE.YOUR FRIEND
First Telegraph Over The Transcontinental Line:[Gamble]
TO ABRAHAM LINCOLN, PRESIDENT OF THE UNITED STATES:
IN THE TEMPORARY ABSENCE OF THE GOVERNOR OF THE STATE I AM REQUESTED TO SEND YOU THE FIRST MESSAGE WHICH WILL BE TRANSMITTED OVER THE WIRES OF THE TELEGRAPH LINE WHICH CONNECTS THE PACIFIC WITH THE ATLANTIC STATES. THE PEOPLE OF CALIFORNIA DESIRE TO CONGRATULATE YOU UPON THE COMPLETION OF THE GREAT WORK. THEY BELIEVE THAT IT WILL BE THE MEANS OF STRENGTHENING THE ATTACHMENT WHICH BINDS BOTH THE EAST AND THE WEST TO THE UNION, AND THEY DESIRE IN THIS&MDASH;THE FIRST MESSAGE ACROSS THE CONTINENT&MDASH;TO EXPRESS THEIR LOYALTY TO THE UNION AND THEIR DETERMINATION TO STAND BY ITS GOVERNMENT ON THIS ITS DAY OF TRIAL. THEY REGARD THAT GOVERNMENT WITH AFFECTION AND WILL ADHERE TO IT UNDER ALL FORTUNES.STEPHEN J. FIELD
CHIEF JUSTICE OF CALIFORNIA
The significant of the completion of the transcontinental telegraph line for uniting the country and creating a singular "The United States" can not be overstated. As stated by James Gamble,"With it disappeared the feeling of isolation the inhabitants of the Pacific Coast had labored under. San Francisco was in instant communication with New York, and the other great cities of the Atlantic seaboard. The change was a great one, but it was one to which the people readily adapted themselves to, having wished and waited so long for it. In that moment California was brought within the circle of the sisterhood of States. No longer as one beyond the pale of civilization, but, with renewed assurances of peace and prosperity, she was linked in electrical bonds to the great national family union."[Gamble]
Completion of transcontinental telegraph line disrupts the Pony Express Postal Service, which ends service. [Standage 60][America's Story, LOC ("On October 24, 1861, the first transcontinental telegraph system was completed. This communication advancement would soon spell the end for the horses and their riders working for the Pony Express.")][Pony Express Historical Timeline, Pony Express National Museum ("The Pony Express is discontinued. ...the government contract stipulated the service be discontinued after the Overland Telegraph Company completed its construction of the telegraph line.")][Evan Andrews, 10 Things You May Not Know About the Pony Express, History.com (June 10, 2016) ("For all its financial troubles, the Pony Express didn’t truly collapse until a better alternative appeared on the scene. The company had spent its brief history bridging the gap between the Eastern and Western telegraph lines, but it was finally rendered obsolete on October 24, 1861, when Western Union completed the transcontinental telegraph system at Salt Lake City.")] [Farley ("Telegraphy became big business as it replaced messengers, the Pony Express, clipper ships and every other slow paced means of communicating. The fact that service was limited to Western Union offices or large firms seemed hardly a problem. After all, communicating over long distances instantly was otherwise impossible. Yet as the telegraph was perfected, man's thoughts turned to speech over a wire.")] [Field 248]
1864: Western Union acquires Pacific Telegraph Company. [Bates, Telegraph in California] [WU Report 1869 at 7]
1866: Western Union acquires a controlling interest in the California State Telegraph Company. (California State Telegraph Company had previously acquired the Overland Telegraph Company). [Bates, Telegraph in California] Western Union fully acquired California State Telegraph Company in 1867. [WU Report 1869 at 8 ("On the 1st of June, 1867, the Western Union Company absorbed the lines of the California State Telegraph Company")]
1862: Pacific Railroad Act - the beginning of Common Carriage
Consistent with the Transcontinental Telegraph Act, Congress soon begins authorizing, funding, and giving public land land-grants and materials to transcontinental railroad projects - which the provision that the railroad companies must build and operate telegraph service lines. Sometimes legislation specifies the telegraph company that can fulfill the telegraph obligation - which only resulted in that telegraph company getting purchased by Western Union - and sometimes the obligation was open ended, and Western Union stepped forward to fulfill the service. The railroads for their own purposes desired telegraph lines to operate the railroad service.
Western Union would enter into agreements with railroads. Prior to the Post Roads Act, Western Union would attempt to make these agreements exclusive agreements. Western Union would provide free message service to the railroad companies and the railroad companies would provide free transportation to the telegraph companies. [Nairn Chap. 3 ("The railroads needed a fast and reliable communications service; Western Union provided this, effectively annexing large parts of the country's infrastructure as it tied up most of the railroads.")] [WU Report 1873 at 9 (In past year, $565,000 regular toll service "was performed for railroad and other transportation companies, all of which render us similar service in return. Without this service our lines could not be kept up so cheaply, nor our business so well conducted. Such, messages are not free business in the proper sense of the term. They are sent under contracts which stipulate to give the Company an equivalent in right of way, trans portation of men and material, and labor to maintain and operate our lines.")] [WU Report 1869 at 41 (giving data of number of messages sent, stating "These are exclusive of railroad messages, of which this Company sends many millions per annum. In fact, the safety of all the roads in the United States is largely due to the free use of our wires in running trains.")] [WU Report 1869 at 45 (explaining why telegraph service in Europe is cheaper, stating "An important item of expense is the large amount of free business which we are obliged to perform for rail road companies, in order to secure rights of way over those routes, and which, if paid for at regular rates, vwould exceed a million dollars a year.")] [Union Pacific, 160 U.S. at 1 (holding contract between railroad and Western Union violated the Post Roads Act which gave free railroad service to Western Union but any other telegraph company would have to pay full fare)]
Pacific Railroad Act: An Act to aid in the construction of a railroad and telegraph line from the Missouri river to the Pacific ocean, and to secure to the government the use of the same for postal, military, and other purposes (1862)
Sec. 2 also stated: "The United States shall extinguish as rapidly as may be the Indian titles to all lands falling under the operation of this act and required for the said right of way and grants hereinafter made."
- Sec. 2: Granted railroad company right of way through public land and use of materials for construction
- Sec. 3: "for the purpose of aiding in the construction of said railroad and telegraph line, and to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores thereon..."
- Sec. 4&5: Upon completion, the USG gave title of the land to the RR company and a bond of $16,000 per mile at 6% interest, to be repaid to the USG over thirty years.
- Sec. 7: interconnection of the line with "eastern connections"
- Sec. 6: USG has preference of use; compensation shall be at fair and reasonable rates
- Sec. 19: Allows transcontinental telegraph line to make an agreement with the railroad and move the line to the railroad ROW, satisfying the obligation of the railroad to build a telegraph line. By 1868, the original transcontinental telegraph line is abandoned after four years of service, with Western Union moving the line to the railroad routes. [Bates, Telegraph in California]
The Act will be amended multiple times in the next few years including:
- The Pacific Railroad Act of 1863 (12 Stat. 807) (setting the gauge of the railroad)
- Amendment of 1864 - adding common carrier obligations
- Pacific Railroad Act of 1865 (13 Stat. 504)
- Pacific Railroad Act of 1866 (14 Stat. 66).
- Amendment of 1888 - expanding common carrier obligations and placing enforcement under authority of new ICC
Many amendments are simple authorizations of new lines or extensions related to the Pacific Railroad Act.
The railroad line authorized by this statute was completed in 1869. [Landmark Legislation: The Pacific Railway Act of 1862, United States Senate ("Authorizing the Union Pacific and the Central Pacific railroad companies to construct the lines, the legislation provided government bonds to help fund the work, in addition to vast land grants… On May 10, 1869, workers drove in the ceremonial “Golden Spike” at Promontory, Utah, joining the two lines.")]
Pacific Railroad Act of 1864 (13 Stat. 356) added something new - the first seeds of communications carrier public policy. This would again be expanded in 1888. Even though these are first statutory expressions of common carriage for electronic communications networks, it is the Post Roads Act - not the railroad acts - which becomes part of the Communications Act of 1934Sec. 15: And be it further enacted, That the several companies authorized to construct the aforesaid roads are hereby required to operate and use said roads and telegraph for all purposes of communication, travel, and transportation, so far as the public and the government are concerned, as one continuous line; and, in such operation and use, to afford and secure to each equal advantages and facilities as to rates, time, and transportation, without any discrimination of any kind in favor of the road or business of any or either of said companies, or adverse to the road or business of any or either of the others, and it shall not be lawful for the proprietors of any line of telegraph, authorized by this act, or the act amended by this act 'to refuse, or fail to convey for all persons requiring the transmission of news and messages of like character, on pain of forfeiting to the person injured for each offence, the sum of one hundred dollars, and such other damage as he may have suffered on account of said refusal or failure, to-be sued for and recovered in any court of the United States, or of any state or territory of competent jurisdiction.
1879: American Union Telegraph Company contacted Union and Central Pacific Railroad, wishing to exchange traffic pursuant to Sec. 15 of the 1864 amendment. The Roadroad had already made an agreement with Atlantic and Pacific Telegraph (a.k.a. Western Union) pursuant to Sec. 19 of the 1862 Act to operate the telegraph line. Western Union claimed that it did itself fall under the Pacific Railroad Act obligations and was under no obligation to interconnect with American Union. The Railroad, believing it was under obligations of the Pacific Railroad Act, announced that it would be taking back the telegraph lines in order to comply with the law. USG entered as a party and argued that the railroad company could not "part with any of the franchises obtained by the organic act without the consent of the USG, which is a part owner, and which has claims upon the net earnings of the telegraph line to protect it against loss on the bonds guaranteed by it for the construction of the roads and telegraph lines." According to the NY Times, the USG also sought to prevent Western Union and American Union simply merging the two companies. [The Telegraph War.; An Injunction Against the Atlantic and Pacific Telegraph Company and the Missouri Pacific Railroad Obtained by the Western Union Company. NYTimes May 1, 1877] [The Atlantic and Pacific Telegraph Company against George B. Prescott, The Western Union Telegraph Company and Lemuel W. Serrell: defendant's testimony and exhibits ..., 1830-1894 Smithsonian Library] [The War of the Telegraph; The Government Preparing to Protect Its Interests Under the Pacific Railroads Act, NY Times, April 5, 1880] [Western Union acquires American Union in 1881] #interconnection
Next:: 1866 Post Roads Act :: 1867 Associated Press and the Progressive Era
1888 :: Pacific Railroad Act amendment
50th Cong. Sess. 1 Chapt. 772: An act supplementary to the act of July first, eighteen hundred and sixty-two, entitled "An act to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," and also of the act of July second, eighteen hundred and sixty-four, and other acts amendatory of said first-named act.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That all railroad and telegraph companies to which the United States has granted any subsidy in lands or bonds or loan of credit for the construction of either railroad or telegraph lines, which, by the acts incorporating them, or by any act amendatory or supplementary thereto, are required to construct, maintain, or operate telegraph lines, and all companies engaged in operating said railroad or telegraph lines shall forthwith and henceforward, by and through their own respective corporate officers and employees, maintain, and operate, for railroad, Governmental, commercial, and all other purposes, telegraph lines, and exercise by themselves alone all the telegraph franchises conferred upon them and obligations assumed by them under the acts making the grants as aforesaid.
SEC. 2. That whenever any telegraph company which shall have accepted the provisions of title sixty-five of the Revised Statutes shall extend its line to any station or office of a telegraph line belonging to any one of said railroad or telegraph companies, referred to in the first section of this act, said telegraph company so extending its line shall have the right and said railroad or telegraph company shall allow the line of said telegraph company so extending its line to connect with the telegraph line of said railroad or telegraph company to which it is extended at the place where their lines may meet, for the prompt and convenient interchange of telegraph business between said companies; and such railroad and telegraph companies, referred to in the first section of this act, shall so operate their respective telegraph lines as to afford equal facilities to all, without discrimination in favor of or against any person, company, or corporation whatever, and shall receive, deliver, and exchange business with connecting telegraph lines on equal terms, and affording equal facilities, and without discrimination for or against any one of such connecting lines; and such exchange of business shall be on terms just and equitable.
Note that the Interstate Commerce Act establishing the Interstate Commerce Commission had been enacted in 1887
SEC. 3. That if any such railroad or telegraph company referred to in the first section of this act, or company operating such railroad compliance. or telegraph line shall refuse or fail, in whole or in part, to maintain, and operate a telegraph line as provided in this act and acts to which this is supplementary, for the use of the Government or the public, for commercial and other purposes, without discrimination, or shall refuse or fail to make or continue such arrangements for the interchange of business with any connecting telegraph company, then any person, company, corporation, or connecting telegraph company may apply for relief to the Interstate Commerce Commission, whose duty it shall thereupon be, under such rules and regulations as said Commission may prescribe, to ascertain the facts, and determine and order what arrangement is proper to be made in the particular case, and the railroad or telegraph company concerned shall abide by and perform such order; and it shall be the duty of the Interstate Commerce Commission, when such determination and order are made, to notify the parties concerned, and, if necessary, enforce the same by writ of mandamus in the courts of the United States, in the name of the United States, at the relation of either of said Interstate Commerce Commissioners: Provided, That the said Commissioners may institute any inquiry, upon their own motion, in the same manner and to the same effect as though complaint had been made.
SEC. 4. That in order to secure and preserve to the United States the full value and benefit of its liens upon all the telegraph lines required to be constructed by and lawfully belonging to said railroad and telgraph companies referred to in the first section of this act, and to have the same possessed, used, and operated in conformity with the provisions of this act and of the several acts to which this act is supplementary. it is hereby made the duty of the Attorney-General of the United States, by proper proceedings, to prevent any unlawful interference with the rights and equities of the United States under this act, and under the acts hereinbefore mentioned, and under all acts of Congress relating to such railroads and telegraph lines, and to have legally ascertained and finally adjudicated all alleged rights of all persons and corporations whatever claiming in any manner any control or interest of any kind in any telegraph lines or property, or exclusive rights of way upon the lands of said railroad companies, or any of them, and to have all contracts and provisions of contracts set aside and annulled which have been unlawfully and beyond their powers entered into by said railroad or telegraph companies, or any of them, with any other person, company, or corporation.
SEC. 5. That any officer or agent of said railroad or telegraph companies, or of any company operating the railroads and telegraph lines of said companies, who shall refuse or fail to operate the telegraph lines of said railroad or telegraph companies under his control, or which he is engaged in operating, in the manner directed in this act and by the acts to which it is supplementary, or who shall refuse or fail, in such operation and use, to afford and secure to the Government and the public equal facilities, or to secure to each of said connecting telegraph lines equal advantages and facilities in the interchange of business, as herein provided for, without any discrimination whatever for or adverse to the telegraph line of any or either of said connecting companies, or shall refuse to abide by, or perform and carry out within a reasonable time the order or orders of the Interstate Commerce Commission, shall in every such case of refusal or failure be guilty of a misdemeanor, and, on conviction thereof, shall in every such case be fined in a sum not exceeding one thousand dollars, and may be imprisoned not less than six months; and in every such case of refusal or failure the party aggrieved may not only cause the officer or agent guilty thereof to be prosecuted under the provisions of this section, but may also bring an action for the damages sustained thereby against the company whose officer or agent may be guilty thereof, in the circuit or district court of the United States in any State or Territory in which any portion of the road or telegraph line of said company may be situated; and in case of suit process may be served upon any agent of the company found in such State or Territory, and such service shall be held by the court good and sufficient.
SEC. 6. That it shall be the duty of each and every one of the aforesaid railroad and telegraph companies, within sixty days from and after the passage of this act, to file with the Interstate Commerce Commission copies of all contracts and agreements of every description existing between it and every other person or corporation whatsoever in reference to the ownership. possession, maintenance, control, use, or operation of any telegraph lines, or property over or upon its rights of way, and also a report describing with sufficient certainty the telegraph lines and property belonging to it, and the manner in which the same are being then used and operated by it, and the telegraph lines and property upon its right of way in which any other person or corporation claims to have a title or interest, and setting forth the grounds of such claim, and the manner in which the same are being then used and operated; and it shall be the duty of each and every one of said railroad and telegraph companies annually hereafter to report to the Interstate Commerce Commission, with reasonable fullness. and certainty, the nature, extent, value, and condition of the telegraph lines and property then belonging to it, the gross earnings, and all expenses of maintenance, use, and operation thereof, and its relation and business with all connecting telegraph companies dur- ing the preceding year, at such time and in such manner as may be required by a system of reports which said commission shall pre- scribe; and if any of said railroad or telegraph companies shall refuse or fail to make such reports or any report as may be called for by said Commission, or refuse to submit its books and records for inspection, such neglect or refusal shall operate as a forfeiture, in each case of such neglect or refusal, of a sum not less than one thousand dollars nor more than five thousand dollars, to be recovered by the Attorney-General of the United States, in the name and for the use and benefit of the United States; and it shall be the duty of the Interstate Commerce Commission to inform the Attorney-General of all such cases of neglect or refusal, whose duty it shall be to proceed at once to judicially enforce the forfeitures hereinbefore provided.
SEC. 7. That nothing in this act shall be construed to affect or impair the right of Congress, at any time hereafter, to alter, amend, or repeal the said acts hereinbefore mentioned; and this act shall be subject to alteration, amendment, or repeal as, in the opinion of Congress, justice or the public welfare may require; and nothing herein contained shall be held to deny, exclude, or impair any right or remedy in the premises now existing in the United States, or any authority that the Postmaster-General now has under title sixty-five of the Revised Statutes to fix rates, or, of the Government, to purchase lines as provided under said title, or to have its messages given precedence in transmission.
Approved, August 7, 1888