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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