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afforded by his prostration, to discredit and embarrass him, by spreading false reports as to his solvency. In one instance this enmity proceeded so far as the purchase of one of his unadjusted obligations, by some of his telegraph opponents, for the sole purpose of prosecution, while he was still confined to his house by this accident. The unexampled brutality which would induce such a proceeding as this, illustrates the extreme hostility to which the telegraph war had been pushed in the West. Mr. Cornell was, however, enabled to provide for his outstanding liabilities; and those who were engaged in the disreputable attempt to ruin a competitor at a time. when he was disabled by a cruel accident, had the mortification afterward of witnessing him triumph over all obstacles, and by the wise and beneficent use of his fortune, establish a name and fame for himself, which will brighten in future ages when even the names of his petty tormentors shall be forgotten.

CHAPTER IX.

THE WESTERN UNION TELEGRAPH COMPANY.

Liberal Patronage in Western States.-Activity of Competition.

Threatened Bankruptcy.-Necessity of Consolidation.-Organization of Western Union Telegraph Company. Remarkable Success.--Good Resulting from Evil.-Railway Cooperation.-Growth of the Western Union System.--Reduction of Tariffs.--Russian Extension Project.--Success of Atlantic Cables.-Mr. Cornell's Services.--Profitable Investment.

THE newly settled and rapidly developing Western States were, from the beginning, the very El Dorado of the telegraph business. The new system of communication seemed peculiarly adapted to the necessities of the wide-awake business men of that region. In the older States, telegraph offices could be sustained only in the large villages and cities, but in the Western States, every little hamlet demanded telegraphic facilities, and often it was found that places quite insignificant in numbers of population proved to be rich placers for the new enterprise. This was true especially of points at which any considerable amount of agricultural produce was gathered for

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shipment to the Eastern markets. Dealers in grain were the earliest and most profitable patrons of the telegraph. The necessity of keeping themselves promptly advised of fluctuations in the market prices of their commodities, at the great trade centres, made them extremely liberal in their patronage. Those engaged in other

branches of business were not slow to avail themselves of the facilities of quick communication thus brought within their reach, and the telegraph business increased with unexampled rapidity. The inevitable consequence of this vigorous development, was the introduction of rival lines, and the opening of competing offices in almost every community, frequently three or four in towns of any considerable importance. In many places the competition was sharp and often bitter. Thus profits were consumed by an extraordinary burden of expenses, and an advantageous field for a single line was converted into an absolutely unprofitable region by the duplication of lines, while the companies owning these lines were drifting on to inevitable bankruptcy.

This alarming condition of affairs convinced the managers and proprietors that the salvation of their property from absolute ruin required immediate and radical change of policy. Various attempts were made, looking to the mitigation of

the evil, but nothing was accomplished to afford any substantial relief until 1855, when, by the cooperation of Mr. Cornell and some of the other principal owners of telegraph property in the Northwestern States, a consolidation of interests was effected, which resulted in the organization of the Western Union Telegraph Company. This new company was formed by a combination of the lines of the New York & Mississippi Valley Telegraph Company; Erie & Michigan; Cleveland & Cincinnati; Cleveland & Pittsburgh; Cincinnati & St. Louis; Ohio, Indiana, & Illinois; Lake Erie & Ohio; and a few other minor companies, embracing substantially all interests then existing in the States of Ohio, Indiana, Michigan, Wisconsin, and a portion of Illinois.

By this course a valuable territory for telegraph business was immediately relieved from the evils of competition, and the lines converted from an impecunious condition to one of great prosperity. The managers realized that, to save the advantages which their experiment at consolidation had so strikingly demonstrated, they must continue to develop the policy so auspiciously commenced. They wisely determined, therefore, to use their rapidly accumulating profits in establishing their own system over a more extended range of operations. This they did by purchasing

WESTERN UNION TELEGRAPH.

III

such lines as could be advantageously acquired, and by building new ones wherever a profitable field of business appeared within their reach. Old lines which could not otherwise be secured were leased in perpetuity, and thus brought under the management of the new company, rendering their position more complete and impregnable.

Primarily, therefore, the great and crowning triumph of the telegraph enterprise in America grew out of the ruinous competition which so speedily extended through the Western States, and reduced that prolific field of telegraph patronage to a condition of absolute loss, and, in many instances hopeless insolvency As indicated by the peculiar style of its name, the Western Union Telegraph Company was originally organized as a Western company, with no definite idea on the part of its active projectors, in the beginning, that it would become anything more than a local organization, and thus a part only of the telegraph system of the country. The evils of competition were first and most seriously realized in the Western States, and the necessity for consolidation of interests was there soonest appreciated. The success of the new policy, however, became so quickly apparent to the managers of the company, that they were speedily induced to push their advantage into new territory. Within a few