The statement that “soon after the validity of the Morse patent was
confirmed by the courts in 1852 many of the competing companies were
enjoined and compelled to wind up or sell out” is incorrect, as is also
the assertion that “the American Telegraph Company bought out most of
the old companies, and continued to occupy their territory for many
years without serious opposition.”
The validity of the Morse patent was never disputed. In 1849 the Morse
patentees commenced suits against the New York and New England [Bain]
Telegraph Company, and the New York and Boston [House printing]
Telegraph Company, for an infringement of the Morse patent. The case
against the company using the Bain patent never came to trial, while the
other was decided in favor of the defendant, by Judge Woodbury of the
United States Supreme Court, 1850.[18]
Footnote 18:
For an abstract of this decision see “Prescott’s History, Theory, and
Practice of the Electric Telegraph.” Boston: Fields, Osgood, & Co.
The consolidations between competing lines, in 1852 and 1853, was caused
by the inability of the companies under separate organizations to meet
their working expenses. They were generally confined, however, to the
union of the Morse and Bain lines, and there still remained two
competing lines upon all the principal routes. There has never been but
a single year, since 1849, when there have not been at least two
competing lines between Boston and Washington.
The American Telegraph Company was not organized until 1855, and it was
not consolidated with any opposition line until 1860. The next year
after the consolidation the Independent Company built a competing line
between New York and Portland, Maine.
The assertion that “the United States Telegraph Company was organized to
oppose this monopoly, and entered into a vigorous competition with the
Western Union, and that prices were reduced in consequence,” is also
incorrect. The United States Telegraph Company never reduced the rates
at any point. On the contrary, it was not until after the United States’
lines were put in operation that the rates were advanced. This was
rendered necessary by the great depreciation of our currency, and
consequent advance in the cost of labor and materials for working the
lines, and was done by agreement of all the companies.