A Story of the Telegraph

by John Murray

THE POSTAL TELEGRAPH CABLE COMPANY.

This Company was organized in 1881. Its original promoters expected by the use of compound steel and copper wire of large size and the use of the Leggo-automatic and Gray-harmonic apparatus to transmit a large volume of business by the use of so few wires and at such a speed that a uniform and low rate would produce a revenue sufficient to justify a capitalization largely in excess of the cost of the plant.

The name postal was chosen upon the theory that the new plan of construction and method of transmission would bring the property into extensive use in competition with or perhaps as an auxiliary of the Post-Office department.

How far the purpose of the founders was speculative need not now be considered. Probably some of them were sincere in their beliefs, but they were ignorant of the telegraph business, and the fallacy of their plan was soon demonstrated.

In order to help a friend, who had become largely involved in the bonds of the Company, Mr. John W. Mackay found himself in control of the property in 1884. He had in the meantime been induced to interest himself in the organization of a new cable service between Great Britain, France and the United States, of which, through the failure of some of those who were to join in the enterprise, he also came into control. Having “put his hand to the plow,” so to speak, although the business was wholly new to him, he was not the man to turn back, and the more he examined the merit of the business itself, the better satisfied he became that, if it could be properly conducted in its details and the complicated and chaotic condition of the numerous comparatively small, but ruinously competing land line companies could be brought into right form and order, a successful and in every way creditable business worthy of the employment of his ample resources could be built up.

When the Western Union Company, early in 1881, under the leadership of Mr. Jay Gould, acquired control of the Atlantic & Pacific, the American Union and the combined Canadian telegraphs, and formed an alliance with the cable companies, it then seemed as if competition in the telegraph business had come to an end, and many of its ablest men were of that opinion, but by the end of 1884 more extensive and more injurious competition had been built up in the United States than had ever existed before, and the possibility of bringing order out of such chaos seemed remote, but Mr. Mackay was not discouraged.

Early in 1884 he secured the services of Mr. George G. Ward, who had been brought up in the business of the telegraph in England, and had been in the service of the cable companies almost from their inception, and was Superintendent of the Direct United States Cable Company from 1875 to 1883. Under his direction the first of the Commercial Cable Company’s cables was completed in December, 1884.

Early in that month Mr. Albert B. Chandler entered Mr. Mackay’s personal service, having been assured of his purpose to permanently establish a telegraph system upon sound and just principles respecting which they were in full accord.

Mr. Chandler had served in almost every capacity known to the telegraph business, from operator in 1858 to President in 1879, and had won the confidence of proprietors of telegraph property, of their officials and employees, and the public as a practical, energetic and conservative manager. Under his guidance as receiver, the mortgage which had been placed upon the property of the Postal Telegraph Company under complete misapprehension of its earning power, was foreclosed.

The Postal Telegraph Cable Company, of which he became President and General Manager early in 1886, was organized. Extremely complicated and vexatious litigation, chiefly a legacy from the smaller companies, was gradually removed, and when, near the close of 1887, the various fragmentary companies had been acquired by either the Western Union or the Postal Companies, competition, based upon the cutting of rates, rebates and other wasteful practices which could only end in destruction, was promptly terminated by the competing companies.