Abstract: The Telegraph Act of 1866: An "Entering Wedge" against the Western Union Monopoly

Joshua Wolff

Abstract

In 1866, the Western Union Telegraph Company consolidated with its major rivals, giving it a nearly total monopoly over the American telegraph and inciting a debate in Congress over whether control of the industry should be left in the hands of a single corporation. The resulting legislation, the Telegraph Act of 1866, is easily dismissed as a weak and ineffective compromise, a clumsy first round in what would be a three-decade battle between Western Union and the federal government. However, despite the limited aims of the approved legislation, the debate in Congress should be viewed as a bold response to the sudden appearance of a monopoly on a scale never before seen in the United States, in an industry deemed essential to the public interest. The proposals in the 39th Congress to foster competition, regulate tariffs, or purchase Western Union's lines represent what Senator B. Gratz Brown called an "entering wedge" against the monopoly. In accepting the Telegraph Act's provisions, Western Union acknowledged the federal government's interest in upholding the public purpose of the telegraph, helping to create what David Hochfelder has called a "quasi-regulatory environment" in the telegraph industry.