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Telegraph :: 1866 :: Western Union's Gilded Age Dont be a FOOL; The Law is Not DIY

"Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end... We are in great haste to construct a magnetic telegraph from Maine to Texas; but Maine and Texas, it may be, have nothing important to communicate." - Henry David Thoreau, Walden, chapter 1, p. 67 (1966).

"With the channels of thought and of commerce thus owned and controlled by one man or by a few men, what is to restrain corporate power or fix a limit to its exactions upon the people? What is there to hinder these men from depressing or inflating the value of all kinds of property to suit their caprice or avarice, and thereby gathering into their own coffers the wealth of the nation?" SENATOR WILLIAM WINDOM, 1881 [Harlow at 322]

"What is the chief end of man?--to get rich. In what way?— dishonestly if we can; honestly if we must." — Mark Twain-1871

Western Union emerged from the Civil War as the victor. At the beginning of the Civil War, the Transcontinental Telegraph Act was enacted in order to unite the growing nation providing coast to coast telegraph service; the legislation and funding had the effect of uniting the telegraph companies as Western Union. At the war's outbreak, Northern industry had come to the aid of the Northern government. The Union Army wired the South as it advanced, ceding 15,000 miles of wire to Western Union at the end of the war, and turning Western Union's competitors in the South, such as they were, into tree tinsel. Northern Industry has vast new markets of Southern Reconstruction and Western Manifest Destiny in order to build new national corporations. By 1866, Western Union completed the consolidation of telegraph companies involved in the Six Nations Treaty, involved in the Transcontinental Telegraph, and that had emerged from the ruins of the South. Western Union was now the dominant private commercial communications network. It now had scale, network effect, and financing. [History of the US Telegraph Industry, EH ("Horizontal and system integration had two causes: efficiency and market power. Horizontal integration created economies of scale that could be realized from placing all of the wires between two cities on the same route or all the offices in a city in the same location. This consolidation reduced the cost of maintaining multiple lines. The reduction in competition due to horizontal integration also allowed firms to charge a higher price and earn monopoly profits. The efficiency gain from system integration was better control of messages travelling long distances. With responsibility for the message placed clearly in the hands of one firm, messages were transmitted with more care. System integration also created monopoly power, since to compete with a large incumbent system, a new entrant would have to also create a large infrastructure.")]

In its 1869 Annual Report, Western Union stated

"The numerous consolidations of lines throughout the country which have been going on almost uninterruptedly for nearly a score of years, have now resulted in a complete unification of the great majority of the telegraph lines in the United States, and rendered the system the most extensive and efficient in the world." [WU Report 1869 at 8]

Western Union had many weapons in its arsenal for dealing with unwanted competition. It could

In its 1872 Annual Report, assuring investors that WU had nothing to fear from rivals, WU explained how it would lower its rates in competitive markets until rivals were unable to earn a profit:

"The scale of rates fixed by competition on the most important routes, and between the principal cities, we have applied recently to the whole country east of the Eocky Mountains, so that the inducement to subscribe capital for the extension of competing lines, in order to secure the benefit of competing rates, no longer exists. At the rates now established it is impossible for any competing com pany to realize profits, and some of them are known to be, and all are believed to be operating at a loss. As a result, the extension of competing lines has ceased, and it is not believed that capital can be found wherewith to in augurate new enterprises in any quarter." [WU Report 1872 at 23]

AT&T will use similar tactics during the telephone era of Dual Service.

"One Service; One System; Western Union"

Western Union acquired:

1854

  • Lake Erie Telegraph Company
  • Cleveland and Cincinnati line, Cincinnati and St. Louis line, and the Ohio Telegraph Company

1855

  • Erie and Michigan Telegraph Company - becomes "Western Union"

1856

1857: Six Nation Treaty

  • Michigan Southern Telegraph Company

1859

1864

1866

1867

1868

1871

1873

1875

1876

  • Southern and Pacific Telegraph Company (99 year lease) [Reid at 454]

1878

1879

  • New Jersey & New England Telegraph

1881

1882

1885

  • American Rapid Telegraph Company [Ohio 1889 at 1094 (July 10, 1885)]
  • Southern Telegraph Company

1886

1887

1890

  • San Antonio and Arkansas Pass Telegraph (which itself had acquired the Frontier Telegraph Company)
  • Empire and Bay State Telegraph Co. [WU v Empire and Bay State Telegraph Company, NY Supreme Court 1940s (99 year lease)]

1900

1902

  • South Florida Telegraph (2nd largest telegraph company in Florida) [The Ocala Evening Star from Ocala, Florida · Page 2 October 31, 1902 ("The Western Union Telegraph Chas absorbed the South Florida Telegraph Co ")]

In 1870, the Vanderbilts took financial control of Western Union. In 1881, Jay Gould executed a hostile takeover of Western Union. In 1908, AT&T acquired Western Union but quickly divested it. In 1943, Western Union acquired financially crippled Postal Telegraph. Western Union sold off its TWX service to AT&T in 1970. Western Union reorganized in 1988 selling off international lines and selling teletypewriters to AT&T.

Policy: Choice Between Private Industry or Government Ownership

Western Union was a new creature. A private commercial (serves the public) communications network, with interstate service, with national reach, with market power. By its own words, it had no rival:

WU vs rival companies 1869 WU Rivals
Number of miles of line 66,263 6,773
Number of miles of wire 121,595 9,100
Number of stations 4,692 337
Source: WU Report 1869 at 33. Rivals include Frankly Telegraph (acquired by A&P), A&P (Gould), National Telegraph, Mississippi Telegraph
"The effect of these rival lines upon the business of this Company has not been seriously felt. While their operation has occasioned reductions in rates between many places, in some cases below a just and remunerative scale, still the number of their offices is so small in comparison to those belonging to this Company that the loss of all the business which they obtain is barely appreciable in our receipts." [WU Report 1869 at 33]

The Constitution and the government of the early nation had no policy for such a creature of industry. Such a policy would have to be invented - concurrent with the invention of commercial communications service itself.

The policy itself was largely in place. The Constitution had identified the value of communications - the transmission of information or intelligence - by including the "post office" and "post roads" in the Constitution. Ben Franklin had molded that communications service with colonialist liberalism - that it was private, secure, non discriminatory, affordable with just and reasonable rates, and served the whole Nation. That policy continued into Manifest Destiny and the tremendous expansion of the Nation, identifying the need for communications across the country with the creation of services like the Pony Express and the evolution of the Post Service to include using steam ships and railroads. The Civil War (was well as the Napoleonic Wars) highlighted the strategic national importance of an efficient communications system.

There were obstacles to those policy objectives. At the time of the Colony and the Constitution, the obstacle was the British King. The King and his agents had used the Postal Service to favor newspapers loyal to the king, and to intercept and read colonialists mail. The Constitution and Benjamin Franklin's post office were a reaction against, or a remedy to the harms of, the King.

Now a new threat to those policy objectives emerged: a private communications corporation. In Congressional and public debates, the harms caused by Western Union - that justified consideration of some new government solution - were:


Photo: Bob Cannon (cc)

The Post Office perpetually lobbied that the telegraph, as well as all transmission of intelligence, be placed under Post Office control. Have initially declared that the telegraph could not succeed, the Post Office regularly expressed concern that telegraph, and then telephone, and then email and the internet, were substitute communications services that would disrupt and displace its service.

The Post Office also argued that telephone service and email be placed under its control. The Post Office argument, that it should control all transmission of intelligence, taken to its completion, would give the Post Office control over all information exchange including radio, newspapers, TV, the Internet.... The Post Office seemed unable to recognize an appropriate boundary between where its jurisdiction ended and where other communications services began. While the Post Office articulated justifications of rate stabilization and uniform rates, at times its arguments appeared to be nothing more than a naked assertion that the Constitution gives it a monopoly and therefore nothing should compete with it; and in these assertion the Post Office is wrong - the Constitution gives Congress authority to set up the Post Office but does not dictate how that is achieved. There is no necessity in the Constitution that this be achieved through a monopoly. Post Office rhetoric on the appropriate policy treatment of private common carriers is anemic - amounting to a claim that it could do it better - with little evidence. The unsuccessful experiment of World War I nationalization of communications services appeared to extinguish these arguments, as did the rise of agency regulation of private common carriage in the form of the Mann Elkins Act and the Communications Act.

The Constitution had not anticipated this problem. Supreme Court Justice Waite wrote in Pensacola, law and policy would have to evolve along with the evolution of technology and industry.

"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)]

At this time, there were types of creatures: there was private industry or there was government owned and operated services. Those were the two options before Congress as it considered remedies. Congress was persuaded that it lacked the authority for rate regulation or other regulatory oversight. It was choice between government or private.

Western Union was a private corporation. It did not have regulatory oversight. It vigorously resisted the introduction of regulatory oversight. According to WU President William Orton, "the World is Governed too much." An imposition of government authority over private industry was viewed as an offence. [Wolff at 112] At that time, the Courts did not consider Western Union to be a common carrier, because it did not carry goods - and thus could have no bailment relationship for the shipment of those goods. WU resisted the Post Roads Act and the establishment of any beachhead of government oversight.

Washington will struggle for the next 45 years on the appropriate treatment of telegraph, either government or private industry owned. A Third Way, a government regulated common carrier, will not emerge until the height of the Progressive Era, when the pressure for government ownership had grown so hot, that AT&T was willing to invent a new policy creature.

At a number of turns it seemed that the arguments in favor of government ownership were riding the tide of the Progressive movement. Yet it failed. The primary argument against government ownership that can be observed in the record: the expense at this point of the government acquiring Western Union. Another factor that could have cut against the argument in favor was the Post Office's own arguments regarding the efficiencies of a Postal take over; in its reports it regularly talked about how many thousands of telegraph offices and telegraph jobs could be eliminated in the merger with the postal system. In times of economic uncertainty as experienced during the turn of the century, no member of Congress was going to vote for the elimination of jobs in their own state. Finally, it can be presumed that Western Union engaged in effective lobbying

A hybrid option between government ownership and private industry emerged. It was suggested not that private telegraph service be purchased by the US Government (something that appeared quite expensive), but simply that the US government introduce a US government funded and subsidized corporate into the market to compete with private industry. This was generally known as "Postal Telegraph" where a corporation would be set up, connecting post offices, providing service through post offices, and competing with Western Union. Between unregulated private industry and the possibility that the government might buy all of Western Union, Western Union hated this hybrid option. Western Union believed it entirely inappropriate for the federal government to set up and fund a corporation to compete with private industry.

"While I believe that the telegraph can be more satisfactorily and economically conducted under private than public control, and that its assumption by our Government would be a mistake, still what I have so strenuously opposed is not the purchase of existing lines, for the purpose of establishing a national system, as has been done by England and other European countries, but the unjust proposition for the Government to build rival lines and engage in the telegraph business as a competitor. Upon these points I coincide with the views expressed by the Committee on Post-offices and Post-roads, that " two systems of telegraphs, one public and one private, cannot operate side by side with success to either or ivith benefit to the public. The functions of the Govern ment are necessarily exclusive, and whenever it formally undertakes any service as proper to be exercised by it, private parties must be excluded from the performance of the same service."" [WU Report 1869 at 44

In 1881, a company known as the Postal Telegraph Company will be established by MacKay, leveraging the market position of the undersea cables and built with the remnants of some defunct companies. It was a private company that at times financially struggled and finally was acquired by Western Union through an agreement with the US Government.

The Progressive Era begins in 1887 with the passage of the Interstate Commerce Act, creating the Interstate Commerce Commission. A new creature had entered the policy sphere: the expert regulatory agency with oversight authority. In 1888, the Pacific Railway Act was amended giving the ICC authority over telegraph - an authority it largely ignored while it paid attention to railroads. In 1890, Congress passed the Sherman Act, the first federal anti-monopoly law. In YEAR, the Supreme Court reversed itself in Call Publishing, holding that Western Union was in fact a common carrier. In 1910, Congress codified this with the Mann-Elkins Act, placing telegraph under the authority of the Instate Commerce Commission, and requiring uniformed tariffed rates. In 1911, the Supreme Court ruled in favor of the United States Government, and, based on the Sherman Act, broke up Standard Oil. In 1916, Woodrow Wilson was elected as a champion of the Progressive Movement.

At the same time, AT&T perhaps overplayed its hand. In 1909 AT&T acquired Western Union and had control over both the telegraph and the telephone markets. The cauldron of pressure from the Progressive Movement forged a new regulatory creature: the government regulated monopoly.

But its Really a Government Contractor

While the debate framed the question as a choice between government ownership or private corporation, the reality was different. The telegraph service operated more as a government contractor or government agent, than either a fully private corporation or as a government department. Telegraph was from the beginning and until it was disrupted by telephone service highly entangled and dependent upon the government for funding. The US Government initially owned and operated telegraph service, until Democrats gained control of Congress - and Southern Democrats were disinterested in such innovations of the industrial age. With Manifest Destiny, the US Government embarked on a massive land-grant program, giving telegraph and railroads massive value in the form of land in order to build out their infrastructure. The transcontinental acts took the telegraph and railroads west, while the undersea cable acts to the telegraph to foreign lands. The U.S. Navy was at the disposal of telegraph in order to find proper routes. During the Civil War, the telegraph service was part of the War Department and concluded its service receiving significant value in the form of lines from the government - and destruction of its competitors. After the war, the Post Roads Act gave telegraph continued value in the form of access to public land, lowering barriers to entry to right of way, and government contracts. The US Government would be an anchor tenant consumer of telegraph service through out World War I and into World War II. Telegraph service was built with US government funding in response to US government policy objectives.

USG Entanglement with Telegraph Service

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Date
Cong
Action
Govt Funding
Govt Ownership
Regulation
1807First advocacy for USG (optical) telegraph system
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1837Woodbury's Report on a USG (optical) telegraph service anticipates that it would be associated with the Post Office, concludes construction of telegraph would "prove useful for national defense, official government correspondence, and commerce."
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1843Congress funds Morse' experimental telegraph line; operated by the US Post Office until 1847.
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1845Appropriations for Expenses for Telegraph Between Washington and Baltimore, 5 Stat. 757 (Mar. 3, 1845).
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1845Post Office Order No. 11: Rules for telegraph service includes funding, record retention, privacy, interconnection
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1845Annual Report Postmaster Cave Johnson: recommends ownership of telegraph service be retained by USG; Morse offers to sell telegraph patent to USG for $100K
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1845An Act Making Appropriations for the Service of the Post Office Department for the Year Ending Thirtieth of June Eighteen Hunder and Forty Seven, 9 Stat. 19 (June 19, 1846)
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1846AN ACT making Appropriations for the civil and diplomatic Expenses of Government for the Year ending the thirtieth Day of June, eighteen hundred and forty seven and for other Purposes, 9 Stat. 89 (August 10, 1846) Appropriations Act: Proceeds from telegraph service treated as postage and placed in Treasure for benefit of Post Office; Authorizes Postmaster to lease or sell telegraph line.
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1846Annual Report Postmaster Cave Johnson again calls for government ownership of telegraph [Thompson at 52 ("A private express service for transmitting news forty-eight hours in advance of the regular government mails had been put into operation between Montgomery and Mobile, thereby cutting into the revenues of the Post Office Department. .." Johnson thought a govt telegraph service would check private express mail)]
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1846Senate Bill introduced to fund telegraph line to New Orleans, in light of Mexican American War. [Thompson at 51]
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1855AN ACT authorizing the Construction of a Line of Telegraph from the Mississippi or Missouri Rivers to the Pacific Ocean, 20 Stat. 610 (Feb. 17, 1855)
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1857Atlantic Cable Act
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1858U.S. Congress. Senate. Committee on the Judiciary. Memorial of the Magnetic Telegraph Company and the New England Union Telegraph Company Praying the Enactment of a Law Which Will Prevent Combinations Between Citizens or Companies in the United States, and Monopolists or Companies out of the United States, for the Purpose of Oppressing Telegraph Companies and Monopolizing the Business of Telegraphing in the United States: Report (Statement of Sen. James A. Bayard Jr.). 35th Cong., 1st. sess., June 9, 1858. Rep. Com. 313. ("Bayard Report")
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1860Pacific Telegraph Act transcontinental telegraph constructed by Western Union.
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1861Civil War: North took control of all telegraph service in the United States, placing them under the control of the War Department. The General Superintendent of Western Union acted simultaneously as the Military Superintendent of all military lines. The North would build 15,000 miles of telegraph line during the war, much of which it gave to Western Union. The South took control of telegraph lines and placed them under control of the Southern Post Master General
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1862Pacific Railroad Act. USG funds the construction of the transcontinental railroad and telegraph lines.
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1862Appropriations 1862 / 1863 ($40,000 for Pacific Telegraph Line for 1863, $26 for November to June 1861)
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1862An Act to authorize the President of the United States in certain Cases to take possession of Railroad and Telegraph Lines and for other purposes, 12 Stat. 334-35 (January 31, 1862)
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1862An Act to Provide Internal Revenue to Support the Government and to Pay Interest on the Public Debt 12 Stat. 478 (July 1 ) (no messages may be transmitted without a duty tax stamp) [Annual Report Dept. Interior Appendix I 1880, p. 197]
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1862An Act Making Further Appropriations for the Support of the Army for the Year Ending the Thirtieth of June, eighteen hundred and sixty three, and additional Appropriations for the year ending the thirtieth of June, eighteen hundred and sixty two 12 Stat. 507 (July 5, 1862) ($500,000 for telegraph)
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1863Joint Resolution in Relation to Telegraph Companies in the District of Columbia 12 Stat. 827 (March 3, 1863)
1863An Act for a Grant of Land to the State of Kansas, in alternate Sections, to aid in the Construction of Certain Railroads and Telegraphs in said State 12 Stat. 772 (March 3, 1863)
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1863Military Appropriations 500,000 telegraph
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1863TREATY between the United States of America and the Shoslionee - Goship Bands of Indians, concluded at Tuilla Valley, October 12, 1863. 13 Stat. 681 (includes provision for protection of telegraph lines)
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1864Appropriations 1864 (Deficiency appropriation $20,000 for Pacific Telegraph Line)
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1864Military Appropriations $275,000 telegraph
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1864Postmaster General Montgomery Blair "favored government ownership or, as an alternative, the Government's giving aid to a smaller company to combat Western Union." [Harlow at 331]
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1864An Act to provide Internal Revenue to support the Government, to Pay Interest on the Public Debt, and for other purposes 13 Stat. 276 (June 30, 1864 ) (telegraph companies pay duty of 5% of gross receipts)
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1864An Act making an additional Grant of Lands to the State of Kansas to aid in the Construction of Railroad and Telegraph Lines 13 Stat. 339 (July 1, 1864)
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1864Russian Telegraph Act of 1864
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1864Idaho Act (land-grant Act establishing the U.S. Telegraph Company)
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1864Amendment to Pacific Railroad Act
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1864An Act granting Lands to aid in the Construction of a Railroad and Telegraph Line from Lake Superior to Puget's Sound, on the Pacific Coast, by the Northern Route 13 Stat. 365 (1864)
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1865Military Appropriations $500,000 telegraph
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1866Resolution to encourage and facilitate Telegraphic Communication between the Western and Eastern Continents. 14 Stat. 350 (February 26, 1866) (USG authorizing a naval steam ship to lay cable)
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1866Appropriations 1866 (appropriation $40,000 for Pacific Telegraph Line)
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186639thSenate asks Postmaster to report on advisability of government owned and operated telegraph service; Postmaster General reports and recommends against it. Senate Ex. Doc. 49 [Wanamaker 1890 at 169] [Field 248] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (One report concerning postal telegraph; three legislative proposals concerning postal telegraph)]
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1866"An act to encourage telegraphic communication between the United States and the island of Cuba and other West India Islands and the Bahamas." 14 Stat. 44 (May 5, 1866)
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1866
  • AN ACT to reduce Internal Taxation and to amend an act entitled "An Act to provide Internal Revenue to support the Government, to pay Interest on the Public Debt, and for other Purposes," approved June thirtieth, eighteen hundred and sixty - four, and Acts amendatory thereof. 14 Stat. 136 (July 13, 1866) (reducing the gross revenue tax on telegraph companies to 3%) [Annual Report Dept. Interior Appendix I 1880, p. 204]
    • 1866The Post Roads Act gives telegraph service value in the form of public land and ROW access, contains clause that USG has right to nationalize telegraph service, is administered by the Post Office. Establishes govt rate for telegraph service that continues until 1947
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    1866An Act granting lands to aid in the Construction of a Railroad and Telegraph Line from the States of Missouri and Arkansas to the Pacific Coast, 14 Stat. 295 (July 27, 1866) (authorizing the Atlantic & Pacific Railroad and Telegraph Lines) [Annual Report Dept. Interior Appendix I 1880, p. 205]
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    1867Annual Report of Postmaster General Randall (recommending that the U.S. Government inquire into Great Britain's nationalizing telegraph and the feasibility of that model for the United States). [Report on Govt Ownership 1914 at 20] "Nearly every" Postmaster General from the Civil War till World War I calls for government ownership and control of telegraph and telephone service. [Govt Ownership 1914 at 36] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one legislative proposal concerning postal telegraph)]
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    1867Appropriations 1867 (appropriation $40,000 for Pacific Telegraph Line)
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    1867
  • An Act Making Appropriations and to Supply Deficiencies in the Appropriations for the Service of the Government for the fiscal year ending June thirtieth, eighteen hundred and sixty seven, and for other purposes, 14 Stat. 470 (March 2, 1867) ($30,000 for Dept of State for sending telegraphs over the Atlantic Cable)
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    186840thBill proposed by Sen. C.C. Washburn for "construction by Government of a line of telegraph, with four wires, from Washington to New York, to be operated, as far as practicable, by the employes of the post-office." Washburn Report to Congress regarding Postal Telegraph, to accompany House Bill 1083 entitled "Union of the Telegraph and the Postal System." House Mis. Doc. 129 [Wanamaker 1890 at 169] [Postal Telegraph. Speech of Hon. C.C. Washburn, of Wisconsin, Delivered in the House of Representatives, December 22, 1869] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one report, one legislative proposal concerning postal telegraph)]
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    1868Appropriations & Supplemental Appropriations 1868 (appropriation $40,000 for Pacific Telegraph Line for 1869, $40,000 for 1867)
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    186940thBill for creation of US Post Telegraph Company, authorizing G.G. Hubbard to construct lines on post roads between post offices, and for post offices to provide telegraph service to public. Report of Postmaster General A.W. Randall, transmitting report of G.G. Hubbard, House Ex. Doc. 35 Hubbard lobbies Congress to establish a postal telegraph company, critical of Western Union's exorbitant rates (William Orton leads WU's efforts to defeat Hubbard) [Wanamaker 1890 at 169] [Wolff p. 41] [Harlow at 333] /TD>
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    1869Appropriations 1869 (appropriation $40,000 for Pacific Telegraph Line)
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    186940thBill authorizing James F. Hall to construct line between Boston and DC which the government shall purchase within three years.
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    186940th Bills were not reported favorably out of committee. Report of Committee on the Post Office and Post-Roads, to accompany bills H.R. 1083, 1415, 1504, and 1689. Adverse. House Report 32. In reaction to these bills, Western Union published The Proposed Union of the Telegraph and Postal Systems, Statement of the Western Union Telegraph Company, 1869, available at Project Gutenberg. Testimony of Western Union Pres. Orton, before the Post Office Committee of the Sentate, Feb. 24, 26, 1870 (arguing against the Hubbard Bill) [Washburn 1870 at 29] Testimony of Western Union Pres. Orton, before the House Select Committee on Postal Telegraph, April 30, 1870 (arguing against the Hubbard Bill and the Washburn Bill) [Washburn 1870 at 31] Speech of Mr. Hubbard before House Select Committee on Postal Telegraph Lines, June 21, 1870 [Washburn 1870 at 140 App. 19] Mr. C. C. Washburn, Chair Select Committee on Postal Telegraph, Postal Telegraph in the United States, HR 2365, July 5, 1870 (nationalize telegraph after 1872) [Washburn 1870 at ] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (eight reports, thirteen legislative proposals, concerning Postal Telegraph in 1870)] [Report Govt Ownership Telegraph 1914 at 21] [Wanamaker 1890 at 169] [WU Report 1869 at 42-43] [Beauchamp p. 65] [Harlow at 333] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (two reports, four legislative proposals in 1869)]
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    186940th Annual Report Postmaster General Creswell p. 37 1869 (referencing Randall's 1867 recommendation and Gardiner G. Hubbard, recommending further investigation) [Govt Ownership Report 1914 at 20] [Harlow at 333]
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    187041House Misc. Doc. 126, Cyrus W. Field, Memorial Relative to telegraph traffic communications between America and Asia [Wanamaker 1890 at 169]
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    187041stSenate Report 114, Select Committee on Postal Telegraph Lines, to accompany H.R. 2365 (Washburn). Postal Telegraph in the United States. Favorable. [Wanamaker 1890 at 170]
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    187041stSenate Report 115, Select Committee on Postal Telegraph Lines, to accompany H.R. 2366 (Palmer). Favorable [Wanamaker 1890 at 170]
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    187141stHouse Misc. Doc. 36, Washburn, Postal Telegraph System in Europe. House Misc. Doc. 39, Hubbard, Memorial on the Postal Telegraph. [Wanamaker 1890 at 170]
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    1871Annual Report of Postmaster General Creswell ("These facts, all tending with overwhelming force in one direction, demonstrate conclusively the utility of the postal telegraph for the government and the people."); Pres. Grant endorsed recommendation of Postmaster General to place telegraph under government control stating "The suggestions of the Postmaster General for improvements in the department presided over by him are earnestly recommended to your special attention; especially do I recommend favorable consideration of the plan for uniting the telegraphic system of the United States with the postal system. It is believed that by such a course the cost of telegraphing could be much reduced and the service as well, if not better, rendered. It would secure the further advantage of extending the telegraph through portions of the country where private enterprise will not construct it. Commerce, trade, and, above all, the efforts to bring a people widely separated into a community of interest, are always benefited by a rapid intercommunication." [Govt Ownership 1914 at 20] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (three reports, three legislative proposals, concerning Postal Telegraph in 1871)]
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    1871Appropriations 1871 (appropriation $40,000 for Pacific Telegraph Line for 1872, $40,000 for 1870 and 1871)
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    187242ndSenate Ex. Doc. 14, Letter from William W. Belknap, Secretary of War, Recommending Construction of a Government Telegraph Line from San Diego to Prescott and Tucson, Arizona. [Wanamaker 1890 at 170]
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    187242ndSenate Report 20, Committee on Post Office and Post Roads, To Accompany Bill S. 341 (Ramsey), Favorable. Senate Misc. Doc. 86, Memorial of Western Union Telegraph Company against the passage of Senate Bill 341. William Orton, Pres. Western Union, Correspondence on the Government and the Telegraph. Senate Report 242, Committee on Post Office and Post Roads, To Accompany Bill S. 341 (Ramsey), Favorable. [Wanamaker 1890 at 170]
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    187242ndReport of Postmaster General Creswell ("The time having now come, in my opinion, when the benefits of a Government telegraph should be secured to the people, it is desirable that advantage should be taken of the provisions of this act and the lines of some or all of the above companies brought under control of this department."). Hubbard Bill "to connect the telegraph with the Postal Service and to reduce the rates of correspondence by telegraph." [Report Govt Ownership Telegraph 1914 at 21-22] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (fourteen reports, two legislative proposals, concerning PostalTelegraph in 1872)] [Harlow at 335 ("Hubbard's Postal Telegraph bill was introduced again in the Senate in December, 1873. By its terms, the Postal Telegraph Company was to be incorporated by Hubbard and two associates, one of whom, by the way, was a rising young man named Andrew Carnegie of Pennsylvania.")]
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    187342ndHouse Misc. Doc. 73, James A. Garfield, Committee on Appropriations, Proceedings in the matter of the postal telegraph, and paper entitled "The Relation of the Government to the Telegraph" by David A. Wells. Senate Misc. Doc. 79, Gardiner G. Hubbard, Memorial in reply to the above paper of David A. Wells. [Wanamaker 1890 at 170]
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    187342ndAnnual Report Postmaster General Creswell 1873 (stating "Under the present management the use of the telegraph by the masses of the people is almost prohibited, by reason of arbitrary rates, unnecessarily high charges, and a want of facilities.") [Report on Govt Ownership Telegraph at 22] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (two reports, five legislative proposals, concerning Postal Telegraph in 1873)]
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    187443rdS. Bill 123. William Orton, Argument on Postal Telegraph Bill Before Committee (Jan. 20, 1874). [Wanamaker 1890 at 171] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (three reports, one legislative proposal, concerning Postal Telegraph in 1874)]
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    187443rdS. Bill 651. Sen. Rep. 242, Committee on Post Offices and Post-Roads, to accompany S. Bill 651 (Ramsey). Favorable. [Wanamaker 1890 at 171] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (three reports, one legislative proposal, concerning Postal Telegraph in 1874)]
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    187543rdS. Bill 1201. Sen. Rep. 624, Committee on Post Offices and Post-Roads, to accompany S. Bill 1201 (Dorsey). Favorable. H. Bill 4470. H. Rep. 125, Committee on the Judiciary, to accompany H. Bill 4470 (Butler). Favorable. [Wanamaker 1890 at 171] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (two reports, three legislative proposals, concerning Postal Telegraph in 1875)]
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    1878[Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one legislative proposal concerning Postal Telegraph in 1878)]
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    187945thH. Bill 6471. S. Rep. 805, Committee on the Railroads, to accompany amendment to H. Bill 6471 advising a more thorough investigation. [Wanamaker 1890 at 171] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one report concerning Postal Telegraph in 1879)] [Lindley 1971 at 244 (rider to Army appropriations, authorizing railroads to operate commercial telegraph service, citing Congressional Record, 45th Cong., 3 Sess. 1762-66, 1809-20 Feb. 22, 24, 1879)] [Congress and the Telegraph.; Conclusion of the Argument on Behalf of the Western Union Company-- Gen. Butler Speaks in Favor of the Pending Bill. NYTimes February 16, 1879, Page 5 (bill "authorizing railway companies to construct and maintain telegraph lines for commercial purposes")]
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    1880Annual Report Postmaster General Maynard (renewing call for inquiry about placing telegraph under control of Post Office) [Report Govt Ownership Telegraph 1914 at 22] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (two legislative proposals concerning Postal Telegraph in 1880)]
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    188146thH. Rep. 137, Committee on Post Offices and Post-Roads, In Reply to a resolution of inquiry. Favorable. [Wanamaker 1890 at 171] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one report, seven legislative proposals, concerning Postal Telegraph in 1881)]
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    1882Annual Report Postmaster General Timothy Howe (renewing call for placing telegraph under Post Office) [Report Govt Ownership 1914 at 23] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one legislative proposal concerning Postal Telegraph in 1882)] >Report on the Postal Telegraph Service in Foreign Countries, Compiled by Robert B. Lines, US Census, 1882
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    1883Annual Report Postmaster General Gresham (calling for establishment of USG Postal Telegraph) [Report Govt Ownership Telegraph 1914 at 23] Telegraph Commission. Report of the Committee on Post Offices and Post Roads. March 3, 1883. 47th Cong. 2d Sess. Report. No. 2004. (reporting on (H. H. 227) to provide for the appraisement of the telegraph lines, property, and effects of companies acting under the provisions of the act of July twenty-fourth, eighteen hundred and sixty-six," entitled "An act to aid in the construction of telegraph lines, and to secure to the government the use of the same for postal, military, and other purposes"; the bill (H. R. 2990) "to establish postal telegraph lines in the United States"; the bill (H. R. 7199) "to create the postal telegraph of the United States," [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one report, three legislative proposals, concerning Postal Telegraph in 1883)]
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    188347thH. R. 7542, "to authorize the appointment of a commission to examine into the telegraph service of the United States". H. Rep. 2004, Committee on Post Offices and Post-Roads, to accompany H. Bill 7542 (Bingham). Favorable. [Wanamaker 1890 at 172] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (one report, three legislative proposals, concerning Postal Telegraph in 1883)]
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    1883Gardiner G. Hubbard, Government Control of the Telegraph, The North American Review, Vol. 137, No. 325 (Dec., 1883), pp. 521-535 (Hubbard was Alexander Graham Bell's partner)
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    188448thReport of the Senate Committee of Post Offices and Post Roads on Postal Telegraph, 48th Congress. 1st Session. Report 577 part 2. Testimony and Statements Taken by the Committee on Post Offices and Post Roads (with testimony from Hubbard, Green) [Wanamaker 1890 at 172] [Senate Postal Telegraph Report 1884] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (four reports, five legislative proposals, concerning Postal Telegraph in 1884)]
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    188448thH. Ex. Doc. 107, H. M. Teller, Secretary of the Interior, Letter on telegraph lines of subsidized railroads. [Wanamaker 1890 at 172]
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    188448th S. Rep. 577, Committee on Post Offices and Post-Roads, to accompany S. Bill 2022 (Hill), Favorable. [Wanamaker 1890 at 172] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (four reports, five legislative proposals, concerning Postal Telegraph in 1884)]
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    188448th H. Rep. 1436, Committee on Post Offices and Post-Roads, to accompany H. Bill 6864 (Rogers), Favorable. [Wanamaker 1890 at 172] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (four reports, five legislative proposals, concerning Postal Telegraph in 1884)]
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    1885[Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (five legislative proposals concerning Postal Telegraph in 1885)]
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    188649th Cong. Sess. 1 CHAP. 637.-An act to forfeit the lands granted to the Atlantic and Pacilic Railrail Coimpany to aid in the construction of a railroad and telegraph line from the States of Missouri and Arkansas to the Pacific coast, and to restore the same to seltl rmiilt aind for other purposes [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (six legislative proposals concerning Postal Telegraph in 1886)]
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    1887[Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (four legislative proposals concerning Postal Telegraph in 1887)]
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    188850thS. Misc. 39, Norvin Green, Memorial Against the Passage of the Bill for the Establishment of a Government System of Postal Telegraph. S. Rep. 434, Committee on Post Offices and Post-Roads, to accompany S. Bills 534, 614, and 2222. Adverse. [Wanamaker 1890 at 172] [Supplemental Statement of Norvin Green, June 9, 1890 at 33 Appendix A (four reports, fourteen legislative proposals, concerning Postal Telegraph in 1888)]
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    1888USG funding railroad and telegraph lines amended to include non discrimination and interconnection obligations. Authority given to ICC to enforce.
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    1890Postal Telegraph Facilities, Report of the Postmaster General John Wanamaker, Sept. 25, 1890 p. 148 (Testimony of J.C. Reiff, Before the Senate Committee on Railroads, Feb. 1-3, 1879; Hearings of the House Committee on the Post-Office and Post Roads, on Postmaster General Wanamaker's bill for a "limited postal telegraph system." (Testimony of Postmaster general Wanamaker, February 11 [Wanamaker 1890 at __] [For a Postal Telegraph.; Postmaster General Wanamaker's Bill Before Committee. NY Times Feb. 12, 1890 (Noting that Green and Chandler were invited but did not appear)] [In the Postal Service; The Work and Suggestions of Mr. Wanamaker, NYTimes page. 3 Nov. 29, 1890] [John Wanamaker Bio, USPS]) [Testimony of WU Pres. Norvin Green: February 28; March 1; May 20; and June 9th (two legislative proposals concerning postal telegraph)]
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    1893Pimrose v. Western Union, 154 U. S. 1 (telegraph service is not common carriage)
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    1901Illinois Supreme Court breaks up Associated Press (Western Union's coconspirator)
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    1901Western Union Tel. Co. v. Call Publishing Co., 181 U.S. 92 (1901), reversing previous holding, telegraph service is common carriage
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    1910Mann-Elkins Act places Telegraph under jurisdiction of Interstate Commerce Commission<
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    1912Britain nationalizes its telephone service. By 1913, most nations had nationalized their telephone service.
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    1913AT&T Agrees to Kingsbury Accord; Agrees that telephone and telegraph shall be govt regulated monopolies.
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    1914Report of Postmaster General Burleson: Government Ownership of Electronic Means of Communications 1914
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    1915The Postalization of the Telephone: Hearing on H.R. 20471 Before the House Committee on the Post Office and Post Roads, 63d Cong., 3d Sess. (1915)
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    1918WWI Telegraph and telephone are nationalized and placed under authority of Post Office
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    1934FCC established; jurisdiction over telegraph transfered from ICC and Post Office to FCC
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    Timeline

    1862

    Thomas Edison is hired as a telegraph operator at the age of 15 (telegraph operators had gone off to fight the Civil War, creating a demand for operators)

    1863


    William Orton, President Western Union. Wikicommons.

    "The territory now occupied by the lines of this company embraces almost the entire civilized portion of the continent of North America... The consolidations which have resulted in the Western Union system mark a new and important era in the progress of the telegraph in this country. By them the means of communication at all points have been greatly increased, while between all the large cities and many of the less important a system of direct circuits has been established, which affords facilities for rapid and reliable communication at all times. Instead of several repetitions of messages between the great commercial centres of the country, as formerly, transmission is now in most cases direct and instantaneous; and the operation of our system over the vast territory covered by our lines is fast assuming the certainty and uniformity of mechanism. Not only, however, have the public gained in time and in greatly increased facilities by these consolidations, but they have received also the benefit of large reductions in the rates for both public and private despatches." [WU Report 1869 at 9] [Compare Theodore Vail's "One Service" promise to have all phones interconnect]


    Gilded Age Politics:Crash Course US History #26

    June 10th, 1871 "New York City--The Morse celebration at the Academy of Music, June 10th--Professor Morse manipulating his signature to the message telegraphed by Miss Sadie E. Cornwell" Source: Library of Congress. Frank Leslie Newspaper. Believed Public Domain.

    1864: Morse patent expires

    1865

    1866 :: Post Roads Act

    1867

    In 1867, Western Union and the Associated Press came to an agreement which strengthened their respective holds on their markets.

    In the disputed election of 1876, Western Union and Associated Press are accused of influencing the outcome of the Presidential Election. Associated Press ran numerous articles in favor of Republican Rutherford Hays and critical of democrat Samuel Tilden. Western Union gave the New York Times telegrams from the Democratic Party showing that there was uncertainty whether the democrats or the republicans had won the electoral college votes from Florida, Louisiana, and South Carolina. Republicans quickly took advantage of the telegraph services of pro-republic Western Union. "During the long controversy in Congress over who actually won the districts in the disputed election of 1876, Western Union secretly siphoned to AP's general agent Henry Nash Smith the telegraph correspondence of key Democrats during the struggle. Smith, in turn, relayed this intelligence to the Hayes camp with instructions on how to proceed. On top of that, AP constantly published propaganda supporting the Republican side of the story. Meanwhile, Western Union insisted that it kept "all messages whatsoever . . . strictly private and confidential.""" [Ars Technica] [Ezra Klein, When Control Crushes Innovation, Washington Post, Dec. 5, 2010] In 1877, the Progressives in Congress would subpoena from WU all of the telegraph traffic of republicans involved in the 1876 disputed election; Western Union would object. [Harlow at 337 ("The Western Union was accused of crookedly aiding the Republicans against Tilden in 1876 and against Cleveland in 1884. The election of '76, one of the most disgraceful episodes in our history, appears to have been a contest in thievery between the two major parties, with the Republicans proving rather more adept at it than the Democrats. At the instance of Democratic Congressmen, thousands of political telegrams were seized from Western Union offices after the election; but though the buying of an Oregon elector and some minor skullduggery were unearthed therefrom, most of the dirt must have been either well enciphered or kept off the wires.")]

    [Harlow at 333 ("it being practically impossible to launch a daily without the consent of the Western sUnion Telegraph Company and the Associated Press"")]

    1868

    1869

    1870: Vanderbilt takes control of Western Union

    1871: Morse Signs Off

    June 10th, 1871: A day of celebration of Samuel Morse. Statue of Morse is unveiled in Central Park. Morse sends his final message: "Greeting and thanks to the Telegraph fraternity throughout the world. Glory to God in the Highest, on Earth Peace, Goodwill to men." Keyed by an operator. Morse keys his signature "S… F.-. B-… M-- o.. r. .. s… e." The audience included William Orton, Cyrus Field, Jefferson Davis, and Annie Ellsworth. [Casale]

    Apr. 2 1872: Samuel Morse dies. New York Times Obituary: "Although the practical working of it had been demonstrated on a small scale, the invention seemed altogether too chimerical to be likely ever to prove of any worth. Again and again he was pronounced a visionary, and his scheme stigmatized as ridiculous." [Standage 41]

    1872

    1873 :: Long Depression 1873-1896

    1874

    1875

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