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Business Demand and the Development of the Telegraph in the United States, 1844–1860*

Published online by Cambridge University Press:  11 June 2012

Richard B. Du Boff
Richard B. Du Boff
Affiliation:
Professor of Economics, Bryn Mawr College
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Abstract

“The telegraph system in America is eminently characteristic of the national mind. At its very birth, it became the handmaiden of commerce.” So wrote the editor of a telegraph trade journal in 1853. Professor Du Boff describes an antebellum American business community that was as ready for a “revolution” in its size and structure as the dawning science of electricity was ready to make it happen. The result was the telegraph and its enthusiastic adoption in a few short years by a business system that quickly became national in scope and outlook. The railroad may ultimately have changed America even more than the telegraph but, as Du Boff shows, the railroad was originally conceived as a local and regional facility whereas the telegraph was interregional in its impact from its very beginnings.

Type
Research Article
Information
Business History Review , Volume 54 , Issue 4: Business History and the History of Technology , Winter 1980 , pp. 459 - 479
Copyright
Copyright © The President and Fellows of Harvard College 1980

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References

1 “Editorial,” National Telegraph Review and Operator's Companion, I (April 1853), 97.

2 Gallman, Robert, “The Pace and Pattern of American Economic Growth,” in Davis, Lance E., Easterlin, Richard, and Parker, William, American Economic Growth: An Economist's History of the United States (New York, 1972), 21–29.Google Scholar

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4 Gallman in Davis et al., American Economic Growth, 27.

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11 Thompson, Wiring a Continent, chs. xvi–xviii, xxviii.

12 In 1848, for instance, a proposal to lower rates was rejected by the Magnetic Telegraph Company's directors on the grounds that “the employers of the telegraph are not of a class who regard the cost, if they can be assured of certainty in the transmission of intelligence;” Articles of Association of the Magnetic Telegraph Company together with the Office Regulations and the Minutes of the Meetings of Stockholders and Board of Directors, vol. I (May 1845–July 1852), 89–90.

13 “In a country in which industry and the arts are progressive — in which business is spread over a vast area, and thousands of miles interpose between one commercial emporium and another — the telegraph answers to a use the complexion of which is unique, and of American origin;” “The Telegraph,” De Bow's Review, 16 (February 1854), 167.

14 This “revulsion” began just at the time the telegraph was born. See Goodrich, Carter, “The Revulsion Against Internal Improvements,” Journal of Economic History, 10 (November 1950).CrossRefGoogle Scholar

15 See 39th Congress, 1st session, Senate Executive Document no. 49, Letter from the Postmaster General relative to the Establishment of a Telegraph in Connexion with the Postal System (1866), for estimates by several telegraph company presidents; also Thompson, Wiring a Continent, 136, 243–246, 370, 409.

16 Thompson, Wiring a Continent, 167.

17 Thompson, Wiring a Continent, 275. In 1869 Western Union president William Orton well described the earlier problems of “unity and despatch in conducting the [telegraph] business … the public failed to secure everywhere the benefits of direct and reliable communication. Telegraphic correspondence between the Eastern, Western and Southern sections was not only burdened with several tariffs but with unnecessary delays [for] copying and retransmission at the termini of each local line …. Another serious evil which the system had to contend with was the existence of competing lines upon the more important routes. The effect … is to augment the expenses without increasing the business.” Orton's conclusion: “Practical men saw that there was but one remedy for these difficulties, and that was by a consolidation of all the rival interests into one organization.” Annual Report of the President of The Western Union Telegraph Company to the Stockholders, July 13, 1869, 6. Alice Critchley of the Western Union Corporation Information Center, Upper Saddle River, N.J., provided access to the Western Union annual reports cited in this article.

18 Chandler, Alfred D. Jr., The Railroads: The Nation's First Big Business (New York, 1965).Google Scholar

19 “The Telegraph on Railroads,” New York Daily Tribune, September 27, 1855; also Thompson, Wiring a Continent, 206–212. In 1853 electrical engineer and telegraph expert Laurence Turnbull lamented the reluctance of U.S. railroads to adopt the telegraph and claimed that this was largely responsible for their horrendous safety records. In the state of New York alone in 1852 more railway passengers were killed than on all British railroads. Overall, the accident rate was ten times higher in America. Turnbull, , The Electro-Magnetic Telegraph: With an Historical Account of Its Rise, Progress, and Present Condition (Philadelphia, 1853), 193–199.Google Scholar

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23 The Telegraph Question, by L. G. (probably Leonard Gale, a Morse associate and professor of chemistry in New York City; n.d., ca. February 1850); New York Historical Society, Henry O'Rielly Documents Collection, Journalistic Series, VI.

24 Address to the Stockholders of the New York and New England Telegraph Co., by Marshall Lefferts, President. January 1851, 10; O'Rielly Documents, Miscellaneous Series, III.

25 The several telegraph company reports in the O'Rielly Collection and the Alfred Vail Telegraph Collection, Smithsonian Institution Archives, Washington indicate that no such information was regularly gathered. Dispatch copies normally had to be retained for one year only. Not until an Act of Congress on March 3, 1879 was the Superintendent of the Census required to collect and tabulate data from domestic telegraph companies.

26 Statement of the Directors of the Western Union Telegraph Company for the Stockholders. October 1, 1865, esp. 3. Annual reports, however, did not begin until 1873.

27 And the telegraph intensified competition among newspapers and press associations; Thompson, Wiring a Continent, 219–239. Well before 1844, however, the gathering and reporting of information was becoming an increasingly competitive business; see Pred, Allan R., Urban Growth and the Circulation of Information: The United States System of Cities, 1790–1840 (Cambridge, Mass., 1973), 35–77, 255–257.Google Scholar

28 “Morses's Electro-Magnetic Telegraph,” The Commercial Review (De Bow), 1 (February 1846), 137.

29 “Telegraph,” Gazette and Advertiser, January 21, 1847; O'Rielly Documents, Journalistic Series, I.

30 “By Magnetic Telegraph,” Cincinnati Daily Enquirer, August 21, 1847; O'Rielly Documents, Journalistic Series, I.

31 “The First Flash,” Cincinnati Gazette, August 21, 1847; O'Rielly Documents, First Series, I.

32 “By Telegraph,” Evening Bulletin (Philadelphia), January 5, 1848; “By the Magnetic Telegraph,” Louisville Courier, February 25, 1848; “Telegraphic Dispatches,” Louisville Courier, April 26, 1848; “Telegraphic Dispatches,” Daily Delta (New Orleans) April 17, 1848; all from O'Rielly Documents, Journalistic Series, III; also “Telegraphic,” New York Herald, August 21, 1847; O'Rielly Docs., Journ. Ser., I. These five columns carried fifty items, thirtyeight of which were commodity price, shipping, or other market condition items.

33 Jones, Alexander, Historical Sketch of the Electric Telegraph: Including its Rise and Progress in the United States (New York, 1852), 105Google Scholar, 112, 115. Jones dedicated his book “To the Merchants of New-York … in their liberal encouragement of works of internal improvement, and to whose patronage, with that of the public press, the electric telegraphs are largely indebted for their support and success.”

34 Marburg, Theodore, “Income Originating in Trade, 1799–1869,” in Conference on Research in Income and Wealth, vol. 24, Trends in the American Economy in the Nineteenth Century (Princeton, 1960), 319–321Google Scholar; and Eighth Census of the United States (1860): Manufactures (Washington, D.C., 1865), 725.

35 Jones, Historical Sketch of Electric Telegraph, 110.

36 Jones, Historical Sketch of Electric Telegraph, 100, 105, 110, 117.

37 Lefferts, Marshall, “The Electric Telegraph; its Influence and Geographical Distribution,” Bulletin of the American Geographical and Statistical Society, II (1856), 258–259.Google Scholar The remaining 644 were “messages for railroads.”

38 The first part of this statement relies on Pred, Urban Growth and the Circulation of Information, while the second part, based on work in progress, clashes with Pred's thesis that new modes of communication create outside, subsystem contacts that themselves can be trade-generating.

39 New-York, Albany and Buffalo Telegraph Company: Annual Statement of the Business of the Company 1st January 1851; Vail Telegraph Collection, box 12.

40 Statement of the Accounts of the New York, Albany ir Buffalo Telegraph Company, from 1st January to 31st December 1854, Department of Manuscripts and Archives, Cornell University, Ezra Cornell Papers, box 17.

41 Minutes of Proceedings of the Meetings of Stockholders and Board of Directors of the Magnetic Telegraph Company, vol. II (August 1852–November 1859), quarterly reports, passim.

42 Monthly Statement of the Illinois & Mississippi Telegraph Company (May 1856–April 1857); Cornell Papers, box 18.

43 “The Magnetic Telegraph,” The Republican, September 18, 1847; O'Rielly Documents, First Series, I.

44 “The Great Atlantic and Ohio Telegraph Line,” Pittsburgh Gazette and Advertiser, March 13, 1847; O'Rielly Documents, First Series, I.

45 “Magnetic Telegraph Extension in the United States,” Commercial Review of the South and West, 4 (September 1847), 138.

46 “Telegraph to Columbia,” Weekly Missouri Statesman, April 19, 1850; Henry O Rielly Papers, vol. 43. The line to St. Louis was saving businessmen “time and expense of voyages” to inspect, purchase, and sell wares.

47 “A Word About Telegraphs,” Troy Daily Whig, January 4, 1850; O'Rielly Documents, Journalistic Series, VI.

48 Report of the Proceedings o f a Meeting of the Stockholders of the Atlantic and Ohio Telegraph Company, Philadelphia, July 19, 1849; O'Rielly Documents, First Series, II.

49 Thompson, Wiring a Continent, 49.

50 Thompson, Wiring a Continent, 71–73.

51 “The Magnetic Telegraph West,” Public Ledger and Daily Transcript (Philadelphia), August 24, 1846; O'Rielly Documents, Journalistic Series, I; and “The Telegraph,” The Republican (St. Louis), November 23, 1847; O'Rielly Docs., First Ser., I.

52 “St. Louis and the Telegraph,” Morning Courier (Louisville), February 9, 1848; O'Rielly Documents, First Series, I.

53 Prospectus, Telegraph Express Agency, 181 Broadway, New York (n.d., ca. July 1850); and O'Rielly's Ohio, Indiana, and Illinois Telegraph, August 1, 1849; both in O'Rielly Papers, vol. 36.

54 “The undersigned ASKS NOTHING FROM THAT GOVERNMENT which should not be shared in common with all citizens.” Memorial: O'Rielly's Atlantic and Pacific Telegraph, April 20, 1850; O'Rielly Papers, vol. 36. According to the Troy Whig, January 15, 1850, O'Rielly's subscription meeting in Troy “was attended by a large number of our most respectable and influential business citizens …;” O'Rielly Documents, First Ser., II.

55 Cotterill, R. S., “The Telegraph in the South, 1845–1850,” South Atlantic Quarterly, 16 (April 1917).Google Scholar

56 See Thompson, Wiring a Continent, 41–42, 48, 58–63, 69, 81–83.

57 See, for example, De Bow's, account, “The Magnetic Telegraph,” Commercial Review of the South and West, 8 (March 1850), 289–290Google Scholar, and Office of the New-York, Albany & Buffalo Telegraph Company, Utica, Jan. 1, 1851 (report by T. S. Faxton, president), Vail Telegraph Collection, box 4, vol. 2. Early lines in California were also profitable; see Bates, Alice, “The History of the Telegraph in California,” Historical Society of Southern California Annual Publications, IX (1914), 183.Google Scholar On the consistent profitability of major telegraph companies through 1857–1858 (a recession), see Thompson, Wiring a Continent, 65–67, 135–137, 195–198, 369–371, 398–399, and Reid, James D., The Telegraph in America: Its Founders Promoters and Noted Men (New York, 1879), 140Google Scholar, 165, 196, 208, 236–241, 258, 321, 391–392, 484.

58 Thompson, Wiring a Continent, 41–51, 81–83.

59 “Mismanagement of the Telegraph,” New York Sun, November 18, 1846, and “The Foreign News — The Price of Flour and Wheat,” Albany Argus, November 9, 1846; O'Rielly Documents, Journalistic Series, I.

60 “The Telegraph,” Daily American (Rochester), November 20, 1846, and “The Magnetic Telegraph,” Evening Mirror (New York), December 15, 1846; O'Rielly Documents, Journalistic Series, I.

61 O'Rielly Documents., Journalistic Series, I is laden with alleged examples of “speculation” and “flagrant abuses” designed to “gouge the public.” The period covered is July 1846 through August 1847. Journ. Ser. VI contains as many examples for 1850.

62 “Atlantic and Pacific Telegraph,” St. Louis Reveille, December 23, 1847; O'Rielly Documents, First Series, II.

63 A good example is “Condemnation of ‘Discreditable Tricks’ Played Off Upon the Telegraph,” American Telegraph Magazine, I (February–March 1853).

64 Cochran, Thomas C., Railroad Leaders 1845–1890: The Business Mind in Action (Cambridge, Mass., 1953), 61.Google Scholar

65 These possibilities were perceived from the very start of the telegraph age. Cipher systems and codes, replete with common commercial phrases, were worked out in 1844 and 1845. See Vail, Alfred, The American Electro Magnetic Telegraph with the Reports of Congress, and a Description of All Telegraphs Known (Philadelphia, 1845), 47–49Google Scholar, and Smith, F. O. J., The Secret Corresponding Vocabulary; Adapted for Use to Morse's Electro-Magnetic Telegraph (Portland, Maine, 1845).Google Scholar

66 Porter, Glenn, The Rise of Big Business 1860–1910 (New York, 1973), 43.Google Scholar

67 For a summary and criticism of this “cutting technological change down to size” approach, see Rosenberg, Nathan, “Factors Affecting the Diffusion of Technology,” Explorations in Economic History, 10 (Fall 1972), 29–33.CrossRefGoogle Scholar

68 This is the theme of Alfred Chandler's major writings since 1959, as summed up in The Visible Hand.

69 Thomas Cochran suggests, in effect, that without technological progress the cost obstacles noted above might have blocked growth in an economy hindered by “the disadvantages of space.” Cochran's thesis, in these terms, is that the added transactions, information, and transport costs of commercializing vast geographic expanses, and widely dispersed agricultural areas and natural resources, might have exceeded the marginal benefits of regional specialization. “The Paradox of American Economic Growth,” Journal of American History, 61 (March 1975).