Western Union - Business in United States of America
Identification: Initially the major company in the telegraph industry; later a worldwide provider of financial and communications services
Date: Founded in 1851
Significance: The telegraph, invented in 1837, provided the first technology for rapid communications and gave businesses the ability virtually instantaneously to contact their own branches, other companies, or consumers. Through a series of mergers, Western Union became the major company in the telegraph industry, driving its development and expansion.
The New York and Mississippi Valley Printing Telegraph Company was created in 1851. Hiram Sibley and Ezra Cornell were principal figures in this firm. In 1856, after a series of mergers united numerous companies in the Midwest, the resulting corporation adopted the name Western Union. In 1861, Western Union completed the first transcontinental telegraph line. In 1884, the company was one of the original eleven stocks listed in the Dow Jones Industrial Averages. By 1900, Western Union had acquired more than five hundred telegraph companies and was operating in several countries around the world.
By the mid-twentieth century, new developments in communications were making the telegraph less significant, and Western Union moved into a variety of other communication and financial services. It had long been involved in some aspects of these businesses, however—introducing the first successful stock ticker in 1869, money transfer services in 1871, and the first consumer credit card in 1914. In 1980, for the first time, the company’s revenue from money transfer fees exceeded its revenues from telegraph services.
As did many other American businesses, during the late twentieth century Western Union went through a series of mergers, changes in corporate structure, and attempts at diversification. In 1993, the company was facing bankruptcy and, in an effort to protect the historic Western Union name, changed its name to New Valley Corporation. In 1994, the most profitable operations of New Valley were sold to First Financial Management Corporation and operated as Western Union Financial Services. In 1995, First Financial Management Corporation merged with the First Data Corporation. First Data spun Western Union off in 2006 by selling it to investors as an independent, publicly traded corporation. A symbolic milestone in the company’s history occurred in January, 2006, when the last telegraph message was delivered.
Although no longer in the telegraph business, Western Union remains a worldwide financial services and communications giant. An important part of its business is money transfers by immigrant workers around the world, who send funds to their families in their home countries. In 2007, Western Union, operating in more than two hundred countries, reported making more than 167 million consumer- to-consumer money transfers and more than 400 million consumer-to-business transactions.
Burns, R. W. Communications: An International History of the Formative Years. Stevenage, Hertfordshire, England: Institution of Electrical Engineers, 2004.
Thompson, R. L. Wiring a Continent: The History of the Telegraph Industry in the United States, 1832-1866. Princeton, N.J.: Princeton University Press, 1947. Reprint. New York: Arno Press, 1972.
See also: Alexander Graham Bell; telecommunications industry; Transatlantic cable; transcontinental railroad.
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Alexander Graham Bell