Western Union History

Western Union History

The first telegraph lines to connect the East and West Coasts of the United States began service in the fall of 1861, less than five years after Congress authorized a subsidy to anyone who would build the line. The company named for the western frontier, the Western Union Telegraph Company, was one of several to submit a bid. Congress approved the line in September, and the company immediately began construction in Hopkinsville, Kentucky. Originally, the telegraph wires were wrapped in cotton and tied with knots to prevent interference and ensure privacy. They were also buried in the ground to avoid tampering. When a party of Sioux warriors cut the line and removed a long section for bracelets, a medicine man convinced the tribesmen that the spirit of the talking wire had avenged its desecration.

Throughout the 1980s and 1990s, financial burdens forced Western Union to file for bankruptcy protection. The company was reorganized as New Valley Corporation, which helped shield the brand from the negative publicity that typically accompanies such proceedings. The company used its financial woes as an opportunity to reduce debt and concentrate on money transfers, which were becoming increasingly popular. The company’s strategy paid off. The company was able to eliminate its overleveraged balance sheet, and it continued to grow its international money transfer business.

In 1933, Western Union divisional plant superintendents were sent memoranda urging them to save old telegraph instruments. Within a few years the collection grew to over five hundred artifacts, and in 1936 it was moved to a new museum called the Western Union Engineering Museum. This exhibit was featured at the Century of Progress exposition in Chicago, where many instruments from the collection were borrowed from the Smithsonian Institution and duplicated for use in the display.

After 1945, the number of telegraph messages halved and in 1958, Western Union purchased a teleprinter system that allowed customers to send and receive telex messages from overseas. The service was called the ‘Candygram’ and it was marketed in a Valentine’s Day commercial featuring a rotund Don Wilson.

The company consolidated its industry in the 1960s by buying its only remaining competitor, Postal Telegraph, Inc. By the end of the decade, Western Union had transformed from a regional telegraph monopoly into a national oligopoly.

The company continued its expansion into Africa in the late 1970s and early 1980s, launching operations in Ghana, Ethiopia, Kenya, Senegal, Zambia and Uganda. By the beginning of 1995, Western Union had a presence in more than 200 countries worldwide. The company expanded into Mexico at the start of 1996, establishing an alliance with Grupo Elektra to provide remittance services in that country. The partnership grew in the following year, when Western Union announced a joint venture with Kuwait Finance House for co-branded international money transfer services. The company’s international growth fueled much of its growth in the mid-1990s. Its presence in Mexico has grown to more than 30 million customers.