Western Union

The Western Union Company is an American multinational financial services corporation headquartered in Denver, Colorado. Founded in the mid-nineteenth century, it played a decisive role in the development of long-distance communication in the United States and later evolved into one of the world’s leading providers of money transfer and remittance services. Western Union’s corporate history mirrors broader technological and economic transformations, spanning the rise and decline of telegraphy, the emergence of telecommunications, and the globalisation of financial services.

Origins and Early Development (1851–1866)

Western Union was founded in 1851 in Rochester, New York, as the New York and Mississippi Valley Printing Telegraph Company by Samuel L. Selden, Hiram Sibley, and other investors. Its initial aim was to construct telegraph lines linking the eastern United States with the rapidly expanding Midwest. Telegraphy at the time represented a revolutionary technology, dramatically reducing the time required for long-distance communication.
In 1856, the company merged with the Erie and Michigan Telegraph Company, a rival controlled by Ezra Cornell and his associates. At Cornell’s insistence, the merged entity adopted the name Western Union Telegraph Company, reflecting its ambition to unify telegraph lines across the western regions of the country. The term “Western Union” signified the consolidation of multiple regional networks into a single system.
By 1857, Western Union had become a participant in the Treaty of Six Nations, an agreement among major telegraph firms intended to divide the country into regional monopolies linked by shared trunk lines. Although this arrangement was short-lived, it facilitated further acquisitions. By 1864, Western Union had transformed from a regional monopoly into a dominant national firm, with only two serious competitors remaining.

The Transcontinental Telegraph and Technological Significance

One of Western Union’s most important achievements was the completion of the first transcontinental telegraph line in 1861. This project linked the Atlantic and Pacific coasts of the United States, marking a critical moment in the history of American communications infrastructure. The first transmitted messages were sent to President Abraham Lincoln, underscoring the strategic and political importance of the network during the Civil War era.
The completion of the transcontinental telegraph rendered the Pony Express obsolete and firmly established telegraphy as the backbone of long-distance communication. From the perspective of technological history, Western Union’s achievement represented a major investment in national integration, enabling faster economic coordination, military command, and political administration across vast distances.

Expansion and Near-Monopoly (1866–1881)

Following the Civil War, Western Union consolidated its dominance. In 1866, it acquired its two principal competitors, the American Telegraph Company and the United States Telegraph Company, effectively establishing a near-monopoly over the American telegraphy industry.
During this period, the company diversified its services beyond the simple transmission of telegrams. It introduced the first stock ticker in 1866, enabling real-time dissemination of financial information. In 1870, it launched a standardised time service that synchronised clocks across the country, and in 1871, it pioneered wire transfer, allowing funds to be sent electronically between distant locations.
Western Union also sought to expand internationally. It formed the Russian–American Telegraph Company with the aim of connecting North America and Europe via Alaska and Siberia. This ambitious project was abandoned in 1867 after the successful laying of a transatlantic submarine cable in 1866, which offered a more practical solution.

Competition, Regulation, and Decline of Telegraphy (1881–1963)

In 1881, financier Jay Gould orchestrated a merger between Western Union and the Atlantic and Pacific Telegraph Company, giving him effective control of the firm. By the late nineteenth century, Western Union had become one of the most influential corporations in the United States. When the Dow Jones Railroad Average was created in 1884, Western Union was among the original eleven companies included.
By 1900, the company operated approximately one million miles of telegraph line and maintained two international submarine cables. In 1909, AT&T acquired a significant minority stake in Western Union, but antitrust action under the Sherman Antitrust Act of 1890 forced AT&T to divest its holdings in 1913, restoring Western Union’s independence.
The telegraph industry entered a period of gradual decline after the Second World War, driven by the rapid adoption of telephones for long-distance communication. Although Western Union acquired its last major domestic competitor, the Postal Telegraph Company, in 1945, overall message volumes fell sharply between 1945 and 1960. Telegraphy was increasingly perceived as slow and expensive compared with emerging alternatives.

Diversification and Telecommunications Innovations

Despite declining demand for traditional telegrams, Western Union continued to innovate. In 1958, it introduced Telex services in New York City, enabling customers to send typed messages over switched networks. International telex connections to London and Paris followed in 1960.
The company also became known for cultural innovations such as the Candygram, introduced in 1959, which paired telegrams with boxes of chocolates. While such services enhanced public visibility, they could not reverse the long-term decline of telegraphy.
In 1963, Western Union reorganised its international cable operations into a separate entity, Western Union International (WUI), which was sold to American Securities. WUI later passed through several owners, including Xerox and MCI Communications, eventually losing the Western Union name altogether.

Satellites and Consolidation (1963–1984)

Western Union pursued further diversification during the late twentieth century. In 1969, it purchased the Telex/Teletypewriter Exchange Service from AT&T, becoming the dominant provider of telex services in the United States. From 1974, it operated its own fleet of geosynchronous communications satellites, known as Westar, making it the first American telecommunications company to do so.
The Westar satellites carried internal company communications and supported telex, mailgram, and facsimile transmissions. However, heavy investment in telecommunications infrastructure coincided with declining profitability. By the early 1980s, mounting financial losses forced Western Union to divest many of its communications assets, including the sale of the Westar satellite system.

Financial Crisis and Strategic Transformation (1984–2006)

By 1984, Western Union faced severe financial difficulties, prompting negotiations with creditors. In 1987, investor Bennett S. LeBow acquired control through a leveraged recapitalisation supported by large-scale junk bond financing. Robert J. Amman was appointed president and chief executive officer and initiated a fundamental restructuring.
Amman’s strategy divided Western Union into two distinct units. One focused on consumer money transfer services, identified as the company’s primary growth opportunity. The other comprised non-strategic communications assets, including long-distance networks, satellite operations, and undersea cables, which were progressively sold off. By 1990, many of these assets had been divested, including the sale of electronic mail and telex services to AT&T.
As regulatory changes such as the Depository Institutions Deregulation and Monetary Control Act took effect, Western Union expanded its global money transfer operations. By the early twenty-first century, these services had become the company’s core business.
In 2006, Western Union ceased all remaining communications operations. At that point, it was described as the world’s largest money transfer business, sustained by the growing volume of international remittances.