It was at this period, when segregated lines were feeling their
weakness, and their revenues were unequal to even a current vigorous
support, that a few clear-sighted men in the West conceived the project
of buying up the groups of feeble organizations, and making them direct
leaders between the large Western cities. The stock was comparatively
valueless, and easily and cheaply bought. The needs of commercial
intercourse were pressing. The project had in it the true elements of
success, and it was accomplished.
For seven years thereafter the purchasers went on improving the lines
thus acquired, and rendering their connections more certain. During all
these years no dividends were paid. Time and money and all the earnings
of the line were devoted to that series of combinations which, from a
mass of weak and perishing organizations, culminated in the Western
Union Telegraph Company.
This combination of lines saved the system from disgrace, and made it
available to commerce and to public wants. No increase of rates followed
any of these movements; and none would ever have been made, had not war
come to change values, and rendered it necessary.
At the East, the American Telegraph Company, organized in 1855, followed
a similar course, and ultimately controlled lines extending throughout
the Atlantic seaboard and Mississippi Valley. These two companies,
working in connection and harmony, covered the entire area of the United
States, and performed the business of telegraphing better than it had
ever been done before.
In 1863 the United States Telegraph Company was organized, and
constructed lines in the territories occupied by both the Western Union
and American companies; but in 1865, with 16,000 miles of wire,—all
newly built,—worked to their full capacity during the year they were
unable to meet their current expenses; but under the most vigorous
administration, with its expenses reduced within the closest limits,
found that it was conducting its business at an average net loss of
nearly $10,000 per month.
In the spring of 1866 the Western Union, American, and United States
Telegraph Companies were consolidated, thus producing a complete
unification of the great telegraphic system of the United States, and
rendering it the most complete and extensive in the world. This
consolidation, however, gave the Western Union Telegraph Company no
monopoly of the business. The Morse patent having expired, and no
exclusive privileges being granted by either State or national
governments, the construction and operation of telegraph lines within
the jurisdiction of the United States remained freely open to all.