On this day in economic and financial history…

The New York and Mississippi Valley Printing Telegraph Company, predecessor to Western Union , was founded in Rochester, N.Y., in April of 1851. It was less than 15 years after Samuel Morse successfully tested the telegraph and only eight years removed from Morse’s successful lobbying for the nation’s first “long-distance” telegraph line. The Smithsonian’s HistoryWired site describes the telegraph’s business climate at the time:

By 1851, there were over 50 separate telegraph companies operating in the United States. This corporate cornucopia developed because the owners of the telegraph patents had been unsuccessful in convincing the United States and other governments of the invention’s potential usefulness. In the private sector, the owners had difficulty convincing capitalists of the commercial value of the invention. This led to the owners’ willingness to sell licenses to many purchasers who organized separate companies and then built independent telegraph lines in various sections of the country. 

Hiram Sibley moved to Rochester, New York, in 1838 to pursue banking and real estate. Later he was elected sheriff of Monroe County. In Rochester, he was introduced to Judge Samuel L. Selden who held the House Telegraph patent rights. In 1849, Selden and Sibley organized the New York State Printing Telegraph Company, but they found it hard to compete with the existing New York, Albany, and Buffalo Telegraph Company. 

After this experience, Selden suggested that instead of creating a new line, the two should try to acquire all the companies west of Buffalo and unite them into a single unified system. Selden secured an agency for the extension throughout the United States of the House system. In an effort to expand this line west, Judge Selden called on friends and the people in Rochester. This eventually led in April 1851 to the organization of a company and the filing in Albany of the Articles of Association for the “New York and Mississippi Valley Printing Telegraph Company,” a company which later evolved into the Western Union Telegraph Company.

Western Union was created five years later after Selden and Sibley had acquired 11 competitors — and the rights to the vital Morse technology. Western Union paid its first dividend at the end of 1857.

By the eve of the Civil War, a transcontinental telegraph line was seen as a vital element of national commerce, and by the war’s outbreak it became important to the national defense as well. Sibley was the most ambitious of the telegraph company leaders, and he won the bidding to build a line that would link the east and west coasts. The effort succeeded within one year, ending the Pony Express and establishing Western Union‘s dominance over the maturing telegraph industry.

Western Union‘s lead was insurmountable by the 1880s, as the company had grown to control 432,000 miles of telegraph …read more
Source: FULL ARTICLE at DailyFinance