In the spring of 1866 there were three telegraph companies, covering
vast areas of territory in the United States. Two of these companies
operated lines over separate divisions of the country, but worked in
connection with each other, while the third, which covered some portions
of the territory of the others, was a competitor for the business of all
sections. These three companies were the Western Union, with lines
extending from New York to California, and throughout the Western
States; the American, with lines extending from the Gulf of the St.
Lawrence to the Gulf of Mexico, and through the lower Mississippi and
Ohio Valleys; and the United States, with lines extending from Portland,
Me., to Richmond, Va., and from New York to Kansas.
The necessity for direct communication between the East and the West,
and the economy of one set of officers and employees instead of two,
demanded the consolidation of the American and the Western Union; and
the still greater saving to all the companies by the uniting of the
lines and offices of the United States with those of the other two
equally necessitated its amalgamation with the others.
Par Value. Market
Value.
The capital of the Western Union Telegraph
Company, which had sold at par and over in $22,000,000 $22,000,000
1865, was
The capital stock of the American Telegraph
Company, which sold at $180 per share in 4,000,000 7,200,000
1865, was
The capital stock of the United States 11,000,000 11,000,000
Telegraph Company was
——————————— ———————————
$37,000,000 $40,200,000
The proportion of lines and wires to the capital varied with each
company, the American company having the greater number; and in the
terms of consolidation these differences were equitably arranged, and
the capital stock of the consolidated company was established as
follows:—