Western Union Corporation

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WESTERN UNION CORPORATION

The first electromagnetic communication that revolutionized the world's economic and social life was transmitted on May 24, 1844, by Samuel Finley Breese Morse (1791–1872). At the Capitol building in Washington D.C., in the presence of Dolly Madison, Henry Clay, and other officials, Morse tapped out his famous message, "What hath God wrought?" This telegraphed message, transmitted in Morse Code, traveled 40 miles to a Baltimore, Maryland, train depot and was received in seconds by Alfred Vail (1807–1859), the financier of Morse's telegraph. The era of telecommunication had begun.

When Congress declined Morse's proposal for the government to purchase his telegraph patent, Morse and several partners formed the Magnetic Telegraph Company. Competition among telegraph rivals across the country was fierce. Prepared to compete with 50 other telegraph companies in operation throughout the United States, the New York and Mississippi Valley Telegraph Company (NYMVTC) was formed on April 8, 1851, in Rochester, New York. Five years later the growing NYMVTC was renamed the Western Union Telegraph Company. In 1857 Morse and his Magnetic Telegraph Company teamed up with businessman and financier Cyrus Field (1819–1892) in a project to lay a transatlantic telegraph cable. In the meantime, Western Union had begun the almost impossible task of stringing the first transcontinental telegraph poles to enable coast-to-coast communication. This rapid mode of communication heralded the end of the U.S. government's pony express service. It also saw the end of Morse's Magnetic Telegraph Company. In 1866 Morse recognized that his company could not compete against such a big rival, and in 1866 the Magnetic Telegraph Company merged with Western Union Telegraph Company. Along with the introduction of the commercial telegraphic machine, Western Union was successful in developing its own transatlantic cable technology. The company was well on its way to becoming the fastest messenger service in the country.

The social and economic impact of the telegraph resounded across the country. As the telegraph lines followed the westward expansion of the railroad, ordinary people paid the expensive fees for communicating quickly across vast regions. Big business and governments experienced the advantages of communication as new services were offered to keep pace with the changing needs of the American people. After Western Union moved its headquarters from Rochester to New York City in 1866, it introduced stock tickers as a method to speed New York Stock Exchange quotes to brokerage firms. One of Western Union's key services was the Money Transfer. Introduced in 1871, this service was still used in the late 1990s.

Time was not yet standardized across the country, so in 1870 Western Union developed its own time service. The nation's tallest building in 1877, built by Western Union, had a time ball at the top, which dropped at noon on a signal telegraphed from the U.S. Naval Observatory. The need for a standardized time schedule was becoming apparent for safety factors and to avoid confusion as communication across the country became more immediate. Generally acknowledged by the public as the most reliable regulation of time, the official start of Standard Railway Time was signaled in 1883 from the descent of the Western Union time ball. With clocks that rang school bells, blew factory whistles, and flashed signal lights Western Union became known as "The Nation's Time Keeper."

The technology of communication advanced rapidly. Western Union began using radiotelegraph to reach people on ships. Telegrams became extremely popular. The key and sounder had been replaced by the teletypewriter, only to be replaced by Western Union's introduction of the telex, a direct dial customer-tocustomer teleprinter service in 1958. The telex would go on to serve as Western Union's second chief source of revenue. Mailgram messages began in 1970, becoming very popular for social and commercial use due to overnight delivery. The operation of the first domestic satellite communication system, Westar, was launched in 1974. By 1982 Western Union became the first U.S. company to have five satellites in orbit. For many years Western Union up-linked messages, data, and graphics to Westar satellites from major publishers, broadcasters, and corporations, and delivered the information across the country at the speed of light.

As early as the American Civil War (1861–1865) Western Union was contracted by the U.S. government to provide direct messaging to the White House communications room. Services included the filling of special money transfers, ensuring messaging needs were met and delivered to the troops during wartime, and delivering military orders of condolence for the armed forces. The services provided by Western Union to the government grew widely in the years following the Civil War. The company was chosen to provide communication for the Department of Defense, linking agency offices and supplying microwave communications for defense and intelligence agencies. A Western Union network connected the Federal Reserve member banks to a central computer center. Through Western Unions networks, law enforcement agencies exchanged data, and the Federal Aviation Administration provided flight and weather information to pilots.

Generations of people associated Western Union with hand delivered messages announcing births, deaths, homecomings, and even proposals of marriage. Western Union's telex business experienced success as the company continued to focus on other innovative business ideas. By the 1960s, however, telegraph use was waning as the telephone became the preferred method of communication. When it became cheaper to send data by telephone, the telex business began to suffer. Western Union was on the decline.

Since 1987 Western Union experienced many corporate and business changes. Despite its many past successes, the company found itself on the verge of bankruptcy in the early 1990s. On April 18, 1991, Western Union Corporation shareholders changed the name of the company to the New Valley Corporation in an effort to distance the failing enterprise from its successful subsidiary, Western Union Financial Services. New Valley assumed existing debts, but these soon skyrocketed to $800 million. In 1994 a bankrupt New Valley sold Western Union Financial Services Incorporated, all the Western Union money transfer trademarks, and trade names associated with the Western Union name, totaling $1.19 million. Utilizing this capital, New Valley continued to function, posting significant financial losses well into the late 1990s.

See also: Samuel Finley Breese Morse, Standardization of Time, Telegraph, Utilities Industry, Westward Expansion