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The Telegraph in America, 1832-1920

Author(s):Hochfelder, David
Reviewer(s):Nalbach, Alex

Published by EH.Net (April 2013)

David Hochfelder, The Telegraph in America, 1832-1920. Baltimore: Johns Hopkins University Press, 2012. viii + 250 pp. $55 (hardcover), ISBN: 978-1-4124-0747-0.

Reviewed for EH.Net by Alex Nalbach, Department of History, Baldwin-Wallace University.

Sensitive readers of David Hochfelder?s brief history of nineteenth-century American telegraphy may cringe at the title of his introduction, ?Why the Telegraph Was Revolutionary,? fearing sweeping generalizations and a crude technological determinism. In fact, however, the author, a historian of technology at the State University of New York, Albany, develops nuanced analyses of the impact of telegraphy upon American life, noting that many of the changes it wrought were modest, or partial, or moderated by an array of factors. As Hochfelder writes in his conclusion, ?a technology does not effect change by itself but requires mediation through existing institutions.? (p. 179)

To be sure, by eliminating the need for a physical courier of messages, telegraphy ?liberated communication from transportation,? a ?revolution in technical practice? (p. 3) And it did inspire some users to change their habits, organizations, and expectations in order to maximize its potential. But the high costs of telegraphy in the late nineteenth century restricted its use to only about one in sixty Americans, and many of these users refused to adjust their social preferences and political goals to suit the new technology.

Hochfelder?s first chapter presents the Civil War as a key accelerant of the advance of American telegraphy. This was the first conflict in which military leaders relied on electrical communication, which facilitated conversations between grand strategists and field officers, relayed information about supply needs, and improved tactical control on the battlefield. But the full military potential of telegraphy was limited by the fact that the U.S. Military Telegraph Corps remained a civilian organization, as well as the failure to integrate telegraphy with other forms of signaling.

The war led to a dramatic expansion of the nation?s telegraph network as the government strung up military lines. Many firms, especially Western Union, hoped these would be handed over to them after the war. But Hochfelder notes that the ascendance of Western Union in the 1860s owed more to other factors: the failure of the Atlantic cable strung by the American Telegraph Company in 1858, the completion of a line to the Pacific coast in 1861, and the expiration of Samuel Morse?s patent in the same year. Hochfelder also points out that while there was a high demand for military telegraphers ? so much so that they were exempted from military service ? such men nevertheless complained of a lack of respect and low pay, problems exacerbated by postwar industrial consolidation.

In his second chapter, Hochfelder challenges the common notion that telegraphy tended toward a ?natural monopoly.? Rather, Western Union developed several active strategies to ensure its monopoly, including exclusive contracts with railroads and press associations, ruinous rate wars with rivals, ?franks? (free telegraph passes) for important officials, and exclusive control of key technologies. Many of the latter were acquired but never deployed by the firm: it hired Thomas Edison to invent and patent as many variations as possible merely to keep them out of the hands of the competition.

In response to the rise of this monopoly, between 1865 and 1914, a ?postal telegraph movement? urged the United States Post Office to assume control of the telegraph system, hoping that the eschewing of profits, particularly on capitalizations as inflated as those of Western Union, would bring down rates and transform telegraphy from an exclusive ?business medium? to a ?social medium.? Such activism peaked in the 1880s, following the acquisition of Western Union by the unpopular financier Jay Gould in 1881, and a bitter telegraphers strike in 1883. But the mounting losses of the British telegraph system (nationalized in 1871) served as a discouraging counter-example, and the experiment with nationalization during the First World War, under the autocratic and overreaching Postmaster General Albert S. Burleson, proved a costly disaster.

Hochfelder?s third chapter analyzes the impact of telegraphy upon the American press and American prose. Rapid information flows led to new standards of timeliness and newsworthiness, while the costs of telegraphy likely mandated increasingly impersonal, ?matter-of-fact? reporting, with the most important information presented first. The steady and voluminous stream of largely undifferentiated data offered by wire services like the Associated Press may also have shifted the responsibility for prioritizing and contextualizing information from newspaper editors to their readers. But the telegraphic news story probably did not inspire a ?telegraphic? style in American writing, since most newspaper editors reworked telegraphed dispatches into longer and more detailed stories: indeed, most messages for the press were in some way enciphered to reduce sending costs.

Perhaps the most dramatic change wrought by the telegraph occurred in finance capitalism, as described in Chapter 4. Beginning with the introduction of the gold indicator in 1866, traders were able to follow real-time transactions on exchange floors, and price differentials in different markets shrank. Increasingly, brokers regarded markets less as places to trade goods than as places to monitor quotations, which could become more important than other factors in determining a transaction. (Indeed, the telegraph era witnessed the rise of ?bucket shops? ? gambling parlors in which participants bet on stock prices, but did not actually make investments.) Leased wires from brokerage offices to exchanges, in turn, allowed brokers to place orders in nearly real-time response to ticker quotations, though tickers and telegraphs never fully eliminated the lag time between a price quotation and a broker?s order. And until the First World War, relatively high costs and the opposition of exchange officials to broader public participation kept telegraphic trading the preserve of a small elite.

Hochfelder analyzes the decline of Western Union in Chapter 5. This was in part due to the rise of telephony, though not, as is often suggested, because of an indifference to the technology. Indeed, in the late 1870s, Western Union had a better apparatus and a better corps of sales agents than Bell, aiming, as usual, to force a consolidation. It only agreed to a flawed truce contract in 1879 in order to try (ultimately, unsuccessfully) to fend off a takeover bid by Jay Gould. Despite lawsuits that would cost both companies $10 million over thirty years, Bell steadily encroached on the telegraph market and in 1909, AT&T bought Gould?s shares of Western Union.

This might have spelled the end of Western Union, but in 1914, AT&T shed the firm for regulatory reasons, while retaining the telephone business and a lucrative leased-wire market for itself. AT&T maintained strong support for research and development, but Western Union did not: by the Depression, toll telephones, air mail, and Bell?s TWX system all offered better service at lower prices. The FCC hoped to sustain Western Union as a counterweight to AT&T, but by 1949, the former handled only 16% of the country?s long-distance communication, at losses of $1 million a month. Belated efforts to modernize into data transmission in the 1960s and 1970s proved disastrously expensive, and the firm dwindled into nonexistence by 1994.

Hochfelder concludes that ?a company that succeeds through technological innovation and leadership must never lose that capacity? (p. 173) and he skillfully illuminates the political, economic, and cultural factors which can encourage or discourage those attributes.

Alex Nalbach is an independent scholar and adjunct faculty at Baldwin-Wallace University in Berea, Ohio. His scholarship concerns the history of global telegraphic newsgathering in the nineteenth century. He is currently completing a manuscript for a world history textbook, Discovering the World: Inquiries into the Global Past.

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Subject(s):Business History
History of Technology, including Technological Change
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII