A Look at Western Union History
From Ivy League schools to the Dow Jones stock market index and from candygrams to a surprisingly innovative foray into sending money, western union is an organization that has left an indelible mark on the history of American life. The company’s legacy is a testament to the importance of innovation in business and a reminder that even the most mundane tasks can become extraordinary when you use a little imagination.
With the help of its uniformed messengers who served as living symbols of a burgeoning nation often separated by thousands of miles, western union quickly became one of the most important elements of daily U.S. life, a role that was made possible only by the relentless pursuit of innovation. From the company’s first consumer charge card to the invention of teletypewriters and the creation of the world’s first public facsimile service, Western Union was a pioneer in its industry and a driving force in modern communications.
In April 1851 Western Union was founded in Rochester, New York with the filing of the Articles of Association for the “New York and Mississippi Valley Printing Telegraph Company.” In 1852 Judge William Selden became a member of the board of directors and was instrumental in the company’s push west of Buffalo. The goal was to create a unified telegraph line between the east and west networks. This was done by purchasing the existing telegraph companies and connecting them to the House system.
The unified line was completed in October of 1861, making the first transcontinental telegraph possible. This ushered in a new era of rapid communication in America and prompted the federal government to stop using the Pony Express.
Western Union continued to expand and absorbed many larger and smaller telegraph companies. By the end of the Civil War it had grown into a national oligopoly and a dominant player in the telegraph industry.
By the 1860s Western Union was also looking for a way to connect North America and Europe via telegraph. It was instrumental in negotiating with the Russian government to acquire Alaska and Siberia. It also developed its own time service that helped standardize the nation’s time across the country.
In the early 1900s, Western Union continued to innovate with the introduction of a prepaid telephone service and a money-transfer service that allowed individuals to send cash to family members overseas. By the 1970s, the company had started to branch out into other industries, such as insurance and financial services.
In 1984, Western Union began to experience severe financial problems and debt issues. Eventually the company was forced to file for bankruptcy. In 1987, investor Bennett S. LeBow acquired Western Union through an out-of-court chapter 11 process in a leveraged recapitalization transaction backed by a total of $900 million in high-yield bonds and preferred stock underwritten by Michael Milken’s group at Drexel Burnham Lambert. LeBow installed Robert J. Amman as president and CEO who led a comprehensive strategic, operational and balance sheet restructuring of the company over the next six years.