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 November 2005

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your engineering heritage

The Sesquicentennial of the Founding of Western Union

by Frederik Nebeker


Western Union office in New York City in the 1880s 
Photo: Courtesy of the IEEE History Center

On 1 November 1855, following the acquisition of a number of competing companies, the New York and Mississippi Valley Printing Telegraph Company reorganized to form a new telegraph company, the Western Union Company. In the decade after the famous 1844 demonstration of the Morse telegraph between Baltimore and Washington, D.C., dozens of telegraph companies tried to profit from the new technology. The companies had different business practices, their hastily built lines were often unreliable and poorly maintained, and they struggled to survive. Service areas were quite limited and there was little cooperation between different companies to relay messages. A group of investors headed by Samuel Selden and Hiram Sibley set about consolidating the companies to provide reliable and geographically extensive telegraph service and, of course, to turn telegraphy into a highly profitable business.

The new Western Union Company rebuilt poorly constructed lines and united them into a single network. Western Union quickly adopted the 1856 invention of an automatic repeater, obviating the need for an operator to re-send attenuated signals. Western Union continued to acquire competitors, and by the time it completed a transcontinental line in 1861, it had obtained a near monopoly on the U.S. telegraph business. Incidentally, the company employed a young Thomas Edison for a spell (in early 1869 he would resign from his operator job there to devote his time to inventing).

After Alexander Graham Bell's invention of the telephone in 1876, Western Union flirted with the idea of getting into the telephony business. But in 1879, Western Union and the Bell company agreed that Western Union would stay out of the telephone business and Bell out of the telegraph business. The telegraph business thrived for almost a century, despite the telephony's proliferation, partly because a great many people still did not have a telephone, and partly because telegraphy provided a permanent communications record. The 1940s were the peak decade for U.S. telegraph use, but usage dropped off rapidly thereafter.

Western Union made several efforts to diversify its business. In 1948, Garvice Ridings developed a small, easy-to-operate low-cost desktop facsimile machine named Desk-Fax, and within a few years, 40,000 of these machines were in use. Western Union was also quite successful with teletypewriter services, as its Telex and TWX networks were used heavily from the 1960s into the 1990s. The company became an important developer of satellite technology; its Westar satellite, launched in 1974, was the first satellite for U.S. domestic communications. (The earlier AT&T Intelsats were for international communications.) Most recognizable to younger generations, the money-order service has enjoyed the greatest longevity. In 1988, the Western Union Telegraph Company was reorganized as the Western Union Corporation, with money orders as the primary business. In 1994, First Financial Management Corporation acquired Western Union, and the Western Union service remains the largest money-transfer business in the world.

 

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Frederik Nebeker is Senior Research Historian at the IEEE History Center at Rutgers University in New Brunswick, N.J. Visit the IEEE History Center's Web page at: www.ieee.org/organizations/history_center.


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