14

“Quickening Urgency”¹

The Telegraph and Wire Services in 1846–1893

Terhi Rantanen

Journalism histories are mostly written using a national framework. As Schlesinger (1995) argues, media histories in general and the history of journalism in particular “have an overarching interest in showing how media institutions have contributed to the shaping of nationalist culture, economics and policy” (pp. 5–6, my emphasis). The writing of nationalized journalism histories is closely related to recent discussions on the problems arising from methodological nationalism in the social sciences, where nation-states are taken as the most important starting point for any research. Wimmer and Glick Schiller (2002, p. 307) call this a container model, “in which societies are imagined in terms of an isomorphism of culture, polity, economy, territory, and a bounded social group” (Robins, 2006, p. 22, my emphasis).

Journalism historians have accepted their own role as often voluntary and sometimes even eager contributors to the construction of naturalized national media and/or journalism histories, presenting their work as, for example, “US,” “British,” or “Finnish.” This is, of course, important, especially when it is crucial to constructing a democratic narrative of a nation that can present its own unique history against those of other nations. Media and journalism play an important role in this narrative. Carey (1974, pp. 3–4) famously wrote that journalism history has been dominated by a Whig paradigm that reviews it as the history of a slow, steady expansion of freedom, from the political press to the commercial press. Further, as Nerone (1990, p. 16) observes, there is a fairly standard list of complaints that journalism history overemphasizes metropolitan daily newspapers and neglects women, minorities, labor, alternative media, religion, and other groups and topics in order to contribute to a Whig narrative. However, while critical in other respects, both these views take for granted that this narrative is always a national one.

The histories of all wire services are also nationalized, but especially the history of the Associated Press (AP), the oldest cooperative news agency, which still has a dominant position in the US market. For example, Schwarzlose's (1989, 1990) title is Nation's Newsbrokers and Menahem Blondheim ends his acclaimed book on the early history of the AP by writing:

Carey and Nerone's criticism of this Whig history can also be extended to wire services, where historical writing tends to concentrate on major national institutions that still dominate the market, such as the AP. There is also a tendency to celebrate cooperative ownership as the most democratic form of ownership and morally superior to other forms (e.g., Cooper, 1942). The early history of wire services in the United States is also often written as a narrative, beginning with the New York Associated Press (NYAP) and inevitably leading to the present-day AP. Other services are often ignored or cast as threats to the NYAP and competition is often described in military terms such as a “war.” Competing services which were soon founded, for example United Press (1882), and which were privately owned, have received much less scholarly attention. This happened in spite of the fact that many of AP's competitors were in many ways more innovative and radical than AP (Rantanen 1992, 1994, 1998).

While fully acknowledging the value of Blondheim's (1994) work and that of others (e.g., Gramling, 1969; Rosewater, 1930; Schwarzlose, 1989, 1990), I argue that the history of wire services cannot only be written in a national context. Even their names – wire services in the United States, telegraph (news) agencies in Europe – suggest that their birth was closely related to the invention and use of the telegraph and submarine cables, the first international electronic communications technology. Headrick (1990, p. 4) writes that, whereas railroads and electronic power reached their optimum efficiency on a regional scale, telegraph services quickly became national and, in the case of submarine cables, intercontinental and even global. I have elsewhere argued (Rantanen, 2009, pp. 22–23) that internationalization of communication started in the nineteenth century and was preceded by cosmopolitanization of communication in Europe, at a time when news was primarily exchanged within and between cities. With the use of the telegraph, wire services promoted not only the nationalization, but also the internationalization of news – defined as a kind of multiplied nationalization, as the term “international” (between nations) indicates (Rantanen, 2010, p. 27).

The international and the national are not such closed categories as is often thought. As Jill Hills has argued, the very terms “international” and “national” suggest that borders are determinant of policy:

The two inventions, wire services and the telegraph, are closely interconnected and together challenge the celebration of the progress achieved by exclusively national media. Although it is important to acknowledge that there are factors that can be analyzed as primarily national and thus differing from country to country, it is as important to acknowledge that there are factors that are similar across national borders. Very few communication technologies and institutions have been “founded” only in one country; rather, they have rapidly spread after their invention from one city to the next across national boundaries. This is, of course, what happened with the printing press and newspapers: following the invention of the Gutenbergian press in 1450, 236 towns in Europe had Gutenberg-style presses by 1500 (McNeill & McNeill, 2003, p. 180).

The uniqueness of each of the national wire services has been celebrated many times in company histories and media histories (Blondheim, 1994; Frédérix, 1959; Read, 1999; Schwarzlose, 1989, 1990; Storey, 1951). Much has also been written about the significance of telegraph and submarine cables (Ahvenainen, 1981, 1996, 2004; Carey, 1989; Griset, 1996; Headrick, 1990; Headrick & Griset, 2001; Hugill, 1999; Nickles, 2003; Peters, 2006; Standage, 1998; Winseck & Pike, 2007). However, what has not received enough attention is the combination of the four: the mariage à quatre between the telegraph and the wire services, domestic and foreign, and their mutual relationships.

In this chapter, I argue that, in order to gain a fuller understanding of the origins of wire services and telegraph and submarine cables in any country, we need to include their relationships with their counterparts in other countries. Wire services, by their very nature, were interwoven with one another through the technology they used and across national boundaries. Earlier research has pointed out that AP's monopoly in the US news market was based on the monopoly shared by Western Union and AP (Blondheim, 1994; Czitrom, 1982; Thompson, 1947). I further argue that we should explore the early stages of development that led to monopolies that were all interconnected: the NYAP's monopoly on the domestic news market, Western Union's hegemony in the US market, the European news cartel's monopoly in the world's news market, and the cable monopoly over the Atlantic submarine cable. However, it is important to note that gaining a monopoly was not easy. The first 50 years of wire services in the United States were ones of constant struggle, of the gaining, maintaining, and losing of monopolies.

Early Pre-Wire and Wire News Services

The fact that media and communications are by nature transnational is easily forgotten when constructing their national histories. In a similar way to printing presses and newspapers, news agencies were “invented” almost simultaneously in several cities around the world: Bureau Havas in Paris in 1832, Daniel H. Craig's news service in Halifax (later in Boston) in 1837, Telegraphisches Korrespondenz-Büro B. Wolff in Berlin in 1849, S. Josaphat and Co.'s Continental Telegraph in London in 1851 (from 1865, Reuters' Telegram Company) (Blondheim, 1994, p. 55; Fuchs, 1919, p. 74; Read, 1999, pp. 7–12; Schwarzlose, 1989, p. 22). To give a precise starting year for these organizations is often dubious: in the pre-telegraph era many of them experimented with different forms of transportation and transmission (from pigeons to news boats) in various locations and it is difficult to point to an exact date, name, or even a location. Charles Havas began translating items from domestic and foreign newspapers and was soon delivering news to its clients in European cities. Daniel H. Craig had a regular news reporting service by means of carrier pigeons from Halifax, Nova Scotia (a first stop for British vessels) to Boston (Rosewater, 1930, p. 3), from which New York papers used special trains to bring European news (Gross, 1977, p. 36). Both Julius Reuter and Bernard Wolff worked with Havas, and later they too founded their own privately owned agencies. Craig was aware of his European counterparts and their use of pigeons for transmitting messages (Gramling, 1969, p. 12). In this way, the operations of all these services were also, from their earliest beginnings, transnational.

Unlike early European wire services, which were either in private or government ownership, many, but not all, wire services in the United States were cooperative. Among the early cooperative organizations was the New York State Associated Press, founded in 1846 by newspapers in Albany, Troy, Syracuse, Auburn, Rochester, Buffalo, and Utica. It installed agents in Albany and New York to transmit news from these cities (Gross, 1977, p. 42, Schwarzlose, 1980, p. 54). The Harbor News Association was also founded in 1846, when New York City newspapers formed an alliance to share the cost of collecting news by means of “news boats” which met incoming ships from Europe. Another early enterprise was organized, again by New York papers and also in 1846, to deliver news of the Mexican war by pony express from Mobile to Montgomery, Alabama. All these associations have been seen as early forms of what was later called the Associated Press, although it is not entirely certain when the New York association started using this name. What we do know is that in 1848 six New York newspapers combined their news-gathering operations under the name of the New York Associated Press and proposed to a telegraph company a permanent set of schemes and rates (Blondheim, 1994, pp. 49–50; Knights, 1967, p. 9; Schwarzlose, 1989, pp. 94, 101). It is important to note that no paper outside New York was included in any of these arrangements (Thompson, 1947, p. 225).

These pioneer ventures were primarily attempts to organize foreign news transmission. From its early days the NYAP was connected to Reuters' agency in London. Even before the first Atlantic cable became operational, the NYAP had established a steamer news exchange arrangement with Reuters in 1857 (Desmond, 1978, p. 162) and the two concluded a formal agreement in 1861.² Through this contract with Reuters, the NYAP established its first contract with Havas and Wolff. In 1866, the NYAP opened its bureau in London and news from Havas and Wolff began to be transmitted through London (Basse, 1991, p. 38).

Despite their different ownership forms and locations, all wire services around the world came to share one similarity: they soon started to use the latest communications technology, the telegraph and submarine cables. In the most general terms, with the availability and use of the telegraph, former news agencies became wire services/telegraph agencies that could be defined as companies using the telegraph to collect and transmit news. They combined news, an earlier invention, with the telegraph and thus invented something new, telegraph news. However, even if they used the same technology, the control and ownership of the telegraph varied significantly between Europe and the United States. While in Europe the telegraph was owned by the state, in the United States it was in private ownership (Du Boff, 1984, p. 63). Apart from Reuter and Craig, most wire service owners did not own or invest in transmission technology, but instead rented lines or negotiated special fees for the transmission of their news telegrams.

The Inland Telegraph and Wire Services

The establishment of wire services was closely connected with the establishment of the telegraph. Their mutual dependency cannot be ignored in understanding their growth. In short, without the spread of the telegraph, wire services could not expand their operations. This is why it is important to explore their interconnectedness and show how it affected their business models even if their businesses remained in most cases separate.

Early telegraph companies in the United States were small and were run mainly on local and regional lines. The first telegraph line was built in the spring of 1844 between Washington and Baltimore and was rapidly extended to other cities. Newspapers published in towns and cities located along the new lines soon began to use the telegraph. The first telegraph news appeared in the New York City papers in early May 1846, before the city was even fully wired to the cities from which the dispatches originated (Schwarzlose, 1990, pp. 38–39, 57). By the summer of 1846, the telegraph lines stretched from Washington, south from Buffalo, and west from Boston and connected in New York, and were thus transformed into a network. However, because of the large number of local companies, a single message from Halifax to New York had to pass over the wires of five different companies, each employing different procedures, separate accounts, and varying policies (Blondheim, 1994, p. 55).

Although the NYAP itself considered buying a telegraph line, it was decided that this was outside the association's business (Schwarzlose, 1990, 194). However, Craig invested in several telegraph lines, including the New York, Newfoundland, and London Telegraph Line Company, between New York and Cape Race, Newfoundland, which was later used by the NYAP (Knights, 1997, p. 10). One of the first contracts of the New York Associated Press was with the New York and Missisippi Valley Printing Telegraph Company, which changed its name in 1856 to Western Union (Schwarzlose, 1990, pp. 188–189). The NYAP also used the New York–Cape Race, Newfoundland line to receive dispatches from Europe once these had arrived by steamer in Canadian ports (Knights, 1967, p. 10).

As Czitrom (Czitrom, 1982, p. 17) observes, disconnected and uncoordinated lines, the great expense of early telegraphy, inadequate facilities, inexperienced operators, and fierce competition for the use of the few existing wires made the period from 1846 to 1849 a chaotic one for both press and telegraph companies. At the beginning of 1851 there were still more than 50 separate telegraph organizations in the United States (Du Boff, 1984, p. 7). Du Boff remarks that the early years of the telegraph were fiercely competitive and the newly founded companies soon started creating their own “telegraph empires” and trying to penetrate each other's territories (p. 54), the model wire services adopted from them.

In a similar way to the telegraph, wire services started locally. Owens (1927, p. 385) argues that before the early 1890s the AP was not an incorporated body, but merely a combination of newspapers and small news associations loosely held together by a written agreement for the exchange of news. There was the New York State Associated Press (1846), which preceded New York City activity by at least two months (Schwarzlose, 1980, p. 562) and was founded in 1846. Other similar associations elsewhere followed: Boston Associated Press was established in April 1848 (Schwarzlose, 1990, p. 106), Western Associated Press (1862), and the New England Associated Press, the Kansas and Missouri Associated Press, the Southern Associated Press (Gross, 1977, p. 44; Thompson, 1947, p. 225; UNESCO, 1953, p. 12), but there is much less research available on these organizations.

The “authorized history,”³ the web version of the AP company history, starts from the year 1846, when The New York Sun established an arrangement whereby Mexican war reports arriving by boat at Mobile, Alabama, were rushed by special pony express to Montgomery, then 700 miles by US mail stagecoach to the southern terminus of the telegraph near Richmond, Virginia. That express gave the Sun an edge of 24 hours or more on papers using the regular mail. Four more New York papers were invited to join in the arrangement: The Journal of Commerce, The Courier and Enquirer, The Herald, and The Express. In May 1846, the offer to share news from the US war with Mexico was extended to rival newspapers. The resulting agreement formed the basis for cooperative news gathering by telegraph, just as the telegraph began a swift expansion throughout the country, linking New York to other telegraph nodes (Pyle, 2006).

Another agreement dates from 1848, when five New York papers, The Journal of Commerce, The Courier and Enquirer, The New York Sun, The Herald and The Express, formed the Harbor News Association in order to operate a small fleet of news boats to get foreign news from arriving ships. The Naushon (or Newsboy) steamship would meet the ships at Sandy Hook. Later a second Harbor News Association was rechartered to include The New York Tribune and a more formal framework for cooperation.⁴ Its management rotated among the partners, with each newspaper in turn assuming responsibility for one month. In the early stages of telegraphic news gathering, responsibility for procuring foreign news also apparently rotated among the members of an association (Blondheim, 1994, pp. 103–4). The New York Associated Press was formalized in 1851, when seven New York papers signed an agreement for the joint telegraphic transmission of news.⁵ By 1866, daily newspaper editors were receiving national and international news primarily by telegraph. Most of them bought it directly or indirectly from NYAP (Blondheim, 1994, pp. 145–146).

Monopolies in Technology and News

The cooperative form of ownership, while celebrating its democratic, non-profit nature, is simultaneously based on a principle of exclusivity whereby membership is strictly limited and the exchange of news can only take place between members. The Association's formal regulations from 1856 stated:

Another exclusive agreement was made between the NYAP and a telegraph company. By 1860, the American Telegraph Company had obtained an exclusive right to transmit NYAP news (Knights, 1967, p. 10). In 1861 its competitor, Western Union, completed the first transcontinental telegraph line, connecting New York and Sacramento, California, through St. Joseph, Missouri. According to Blondheim (1994, p. 145), Western Union was now well positioned for the increased importance of cross-country communication and strengthened the Chicago-centered, East–West-oriented system. As Du Boff (1984) observes, it was completion of the transcontinental telegraph in 1861 and the prospect of a successful Atlantic cable that touched off renewed rivalry between Western Union and the American Telegraph Company. A new company, the United States Telegraph Company, financed by a group of New York City businessmen, started in 1864. After an intensive period of competition, Western Union swallowed up its last two rivals and became a national monopoly by late June, 1866 (Knights, 1967, p. 7). By 1866 the Western Union monopoly controlled 90% of the telegraph traffic in the United States.⁶

After Western Union became the NYAP's exclusive partner, the latter started occupying space in the Western Union building at 145 and later at 195 Broadway in New York, where it remained until 1914 (except for a brief period in the 1890s; Schwarzlose, 1990, p. 223). The NYAP's close relationship with Western Union contributed to what Blondheim (1994, p. 143) calls a double-headed monopoly. Both companies would establish this monopoly in their respective but tightly linked markets, and it persisted for another 15 years. It was a combined news–telegraph monopoly and supplied most of the United States with its telegraphic news (Blondheim, 1994, p. 131).

The Atlantic Cable and News

Between 1850 and 1870 submarine cable technology grew from infancy to maturity (Headrick, 1990, p. 24). However, although inland telegraph and submarine cables diverged in terms of their ownership and organization, they had to be connected to each other. Hills (2007) calls one of the arrangements a “Western Union model” (pp. 25–28), whereby international networks owned by foreign companies are stopped at borders, while those owned by domestic companies penetrate the borders. Inland telegraph companies in Europe were owned by the state, while in the United States they were private and cable companies were mostly private, with the exception of two “imperial” British transatlantic cables (Brown, 1927, p. 122). However, all these different systems had to find ways to compete against and collaborate with each other.

Western Union's competitor, the American Telegraph Company, had invested heavily in the first Atlantic cable, which stopped working a couple of weeks after it was opened in 1858 (Prescott, 1866, pp. 205–206). After several unsuccessful attempts, another company, the Anglo-American Telegraph Company, finally laid an Atlantic cable that started working in July 1866 between Valencia Bay (Ireland) and Newfoundland. Although not itself involved with the cable, Western Union was well positioned for the increased importance of cross-country communication. Whereas the Atlantic cable, the great hope of the American Telegraph Company, was put on hold during the war years, Western Union's pet project, the overland telegraph to the West coast, had been completed in 1861 (Blondheim, 1994, p. 145).

Another factor that further strengthened the position of the US telegraph companies, although they did not own the first transatlantic cables, was that for the most part they came under the control of Western Union and the Commercial Cable Company (co-funded by Gordon Bennett of The New York Herald). These two companies, both of New York, also owned, directly or through affiliated companies, the land telegraph system of the United States and in part of Canada (Brown, 1927, p. 9). Two British cable companies, which had laid and operated a number of Anglo-American cables, had to depend on their US competitors for the provision of facilities for the collection and delivery of their traffic throughout the United States. As a result, the British companies' position became so difficult that they were eventually driven to lease their cables for a period of 99 years to Western Union (Mance, 1943, p. 63).

Wire service owners bought the services from telegraph companies, but rarely invested in them. However, there was one notable exception: Julius Reuter, who in 1866 had organized a cable from Lowestoft in the UK to Norderney in Germany,⁷ teamed up with the French financier Baron Emile Erlanger to establish the Société du Câble Transatlantique Français, which laid a cable from Brest to Duxbury, Massachusetts, via the island of St. Pierre (Parkinson, 1870, p. 25). In 1871 they joined the Anglo-American Telegraph Company in a joint purse or cartel, by which they agreed to charge the same rate and divide the income in proportion to their traffic. This gave the partners in the cartel the security to protect their interests but deprived them of the possibility of attracting customers by lowering their rates (Headrick & Griset, 2001, pp. 554–555). Interestingly, the joint purse term was also used in 1869 when Reuter and Havas signed an agreement between themselves which stipulated that profits from all sources would be divided equally between them (Rantanen, 1990, p. 41). After two years the Société du Câble Transatlantique Français was sold to the Anglo-American Telegraph Company. As Headrick (1990, p. 25) points out, the new cable route, which began as a monopoly, turned into a cartel.

Newspapers were early, but not the only, users of the telegraph. In the beginning, long-distance telegraph rates were staggeringly high. In 1866, the charges for the transmission of messages were described “as beyond the reach of all but the most wealthy capitalists or combinations.”⁸ The charge for 20 words was £20 sterling – a sum equivalent to US $150 today, or two months' wages at that time for an industrial worker (Headrick, 1990, p. 4). However, when the second Atlantic cable successfully began operating in 1866, newspapers used it almost immediately. The “ordinary” telegram traffic was always the most important source of revenue for the cable and wireless companies, but at an early stage a separate price category was introduced for press telegrams. These, usually of considerable length, were sent in plain language and were less costly for cable companies to deal with than ordinary commercial telegrams. Moreover, the companies usually reserved the right to send them when the lines were clear of other traffic (Brown, 1927, pp. 132–133). However, due to the cost of cable transmission, foreign news was the most expensive to gather, and its supply was an important source of the NYAP's dominance in the collation of press associations (Blondheim, 1994, p. 159).

European News Agencies

By the time the first Atlantic cable started operating in 1866 and connected the NYAP with European telegraph agencies, Havas in Paris, Wolff in Berlin, and Reuter in London had already started to expand their activities across national borders. They had three strategies in expanding their activities: (1) founding branch offices; (2) funding or buying agencies outside their home countries; (3) selling their news to other news agencies, newspapers, and other clients.

In the early days, the agencies operated freely across borders. Havas, for example, founded offices in Augsburg, Wurtzburg, and Stuttgart (Frédérix, 1959, p. 77; Storey, 1951, pp. 39–42). Reuter tried to buy other private agencies, for example Stefani in Rome and Ritzau in Copenhagen (Read, 1999, p. 54). Wolff and Reuter both tried to establish contacts in St. Petersburg and Moscow (Rantanen, 1990, pp. 82–83). In 1866 Reuters was still competing against Wolff in its home market: Reuter founded Telegraphenbűro fűr Norddeutschland, with branch offices in Berlin, Hamburg, and other German cities (Fuchs, 1919, p. 83). Wolff also “helped” to get new telegraph agencies started: Ritzau in Copenhagen in 1866, Svenska telegrambyr in Stockholm in 1867, and Norsk Telegrambureau in Kristiania in 1867 (Berg, 1952, pp. 25–29; Fuchs, 1919, p. 86).

Gradually the three agencies started to make contracts to collaborate, but also to achieve territorial monopolies through exclusive agreements. The first contract was between Havas and Reuter in 1856 and only concerned commercial news, but the first agreement between Havas, Reuter, and Wolff was concluded in 1859. According to this latter agreement, Havas was to transmit to Wolff – as it already did to Reuter – its telegrams from France, Spain, Italy, and the Levant. Wolff, for his part, undertook to deliver telegrams from Germany, Russia, the Slavic countries, and Scandinavia. The agreement was a cost-free exchange of news among the concluding parties, in the same way as in cooperative wire services. It was also exclusive: the parties agreed not to deliver to agencies that were not signatories to the agreement (Rantanen, 1990, p. 39). In 1865, Reuter signed an agreement with Wolff in which he undertook to provide Wolff with news from New York (Rantanen, 1990, p. 40). Reuter could only provide news from New York because of his agreement with the New York Associated Press, concluded in 1861/1862.⁹

The European News Cartel and Wire Services in the United States

The NYAP agreement with Reuter became an issue in the so-called US press war of 1866–1867 (Blondheim, 1994; Knights, 1967; Rosewater, 1930; Schwarzlose, 1990). After a period of competition between Wolff and Reuters elsewhere, it was in the US market that they again competed against each other. By 1866, the NYAP was the only wire service serving the whole country (Knights, 1967, p. 1). With its exclusive contract with Reuters and Western Union, it was geographically placed such that it could establish a linkage with the Atlantic cable and serve as the terminal point for overland telegraph communications (Swindler, 1946, p. 44). This soon became apparent to Western Associated Press (WAP). Forced to buy all its news from the NYAP, it had to cover two-thirds of the expenses; the NYAP papers paid only one-third, while the WAP and the other two groups, New England, Philadelphia, and Baltimore and the South, paid the remaining two-thirds (Knights, 1967, p. 17; Swindler, 1946, p. 44; Western Associated Press, 1870, p. 15). WAP complained that the news was not only overpriced, but also did not even fulfil its members' requirements. They complained that “fully one-third of these European telegrams are devoted to announcing the arrival and departure of New York steamers, and disasters to New York mercantile sail and steam vessels in all the waters of the old world, being items of special interest to the shipping interests of the port of New York, but of inferior value to the public outside of New York” (Knights, 1967, p. 22).

In an attempt to cut their costs, the NYAP had turned down Reuters' offer of an agreement as too expensive. Craig, in an attempt to become the “Reuter of America,” had founded a private company, the United States and European News Association, in 1866 (Knights, 1967, p. 19). Through this, WAP temporarily achieved an exclusive agreement with Reuters. This probably formed the backdrop for the NYAP to make its agreement with Wolff, which was also eager to get a foothold in the US market. Wolff had bitterly resented Reuters' incursion into German territory through the Norderney Cable Company and now refused to join the Reuter–Havas–NYAP agreement of 1867 (Desmond, 1937, pp. 221–222; Fuchs, 1919, p. 82; Read, 1999, p. 56; Williams, 1953, p. 23). After a period of intensive domestic competition, the Reuters agreement was shifted back to the New York Associated Press (Schwarzlose, 1990, p. 50).¹⁰

The Reuters agreement with the NYAP was significant in two ways. First, it restored the NYAP's predominance as the sole agency empowered to deliver foreign news to the other AP members¹¹. NYAP's contract with Reuters was exclusive, i.e., no other wire service in the United States could receive news from Reuters. Second, with this agreement with the NYAP, Reuters became the exclusive partner with NYAP in its agreement with Havas and Wolff in 1870. Although North America was formally divided between Havas, Wolff, and Reuter, it was Reuters that delivered news from two other agencies to the NYAP. Existing scholarship does not cite an extant copy of the 1867 agreement between the NYAP and Reuters, but its year matches the expiration prescribed by the 1861 contract and it is mentioned in Reuters' Minute Book of 1867.¹²

Not until 1870 did the three European agencies sign a collective agreement with AP, which recognized North America as a common territory for Havas, Reuters and Wolff.¹³ This agreement explicitly annulled the contract between Wolff and NYAP. The financial terms of the agreement were very different from the 1861/1862 contract with Reuters: both sides were now to pay all transmission expenses. Since the number of telegrams was much higher from Reuters, Wolff, and Havas, the NYAP had to deliver far higher cable tolls. In addition the NYAP had to pay an annual commission (£2,400). The agreement was exclusive and the contracting parties were not allowed to deliver their news to any other persons or newspapers (Rantanen, 1990, pp. 48–49).

The NYAP monopoly did not last very long. By the late 1870s the NYAP, WAP, and Western Union were again dissatisfied (Blondheim, 1994, pp. 150–151, 163). The rise of a new telegraph company, the Postal Telegraph Company, made competition possible again. The United Press (UP), a private wire service, was founded in 1882. UP, however, could only obtain foreign news from agencies outside the European news cartel. Thus it signed an agreement with the Central News Agency, a minor competitor of Reuters in London. UP and WAP now negotiated over ways to divide the US news market between themselves (Rosewater, 1930, p. 200). According to this agreement, UP was in undisputed control of all the territory east of the Alleghany Mountains and north of Virginia, while the Western territory was controlled by WAP. In addition, no newspapers served by AP news reports were to traffic with any rival association (Associated Press, 1893; Swindler, 1946, pp. 52–53) and then sign a joint agreement with Reuters. But these negotiations collapsed in 1892. Simultaneously, a new organization, the Associated Press (of Illinois), was founded, with Melville Stone as its general manager. At first, both agencies attempted to sever the other's access to foreign news by seeking exclusive rights to cartel news; both sent representatives to Reuters to negotiate an exclusive contract. To quote Frédérix (1959, p. 190), the result was total chaos in New York, Chicago, London, and Paris.

Although both UP and AP claimed to have “won” the race for exclusive rights, it was actually the AP of Illinois that gained the final agreement with the European news cartel. But the price was high: it had to pay £3,500 annually (originally planned as the commission from two agencies) – the highest sum ever. Still, this contract dealt a decisive blow to UP: by 1899, after AP had spent a million dollars, it had succeeded in driving UP out of business. Baron Herbert Reuter telegraphed congratulations to AP on having established a monopoly in the United States (Fenby, 1985, p. 39).¹⁴

It is no accident that the subsequent cartel agreement of 1898 for the first time mentions AP as their counterpart in the United States. Scholars have therefore been correct in concluding that in 1893 AP bought exclusive rights from the cartel for foreign news in the United States. It is not correct, however, to assume that AP also acquired exclusive rights to its home country, which, de jure, still belonged to the European news cartel. In fact, AP was able to maintain a domestic monopoly only until 1907, when a new competitor, the United Press Association, was founded.

Conclusion

This chapter has argued that the telegraph fundamentally changed the transmission of news. The telegraph created first a local, then a national, and finally an international electronic network for the exchange of news. The wires often followed established roads or railways, but the cables also created new routes connecting continents separated by seas. The telegraph created a new electronic space that could be used not only for private, but also for public communication. The first wire services, telegraph agencies, followed the expansion of telegraph lines and cables by using them for the transmission of electronic news that could be multiplied by sending the same item simultaneously to several places. The wire services established their offices in the proximity of major telegraph stations and/or stock exchanges, which were the first users of the telegraph. They sold news items to customers including newspapers, which edited and published their news, and other clients.

The wire services were established in cities with multiple connections that later became electronic news hubs. The concentration of printed media, the telegraph, the stock exchanges, and the new wire services contributed to changing these hubs into electronic news capitals. They were often, but not always, capitals of their respective nation-states or harbor cities. Some of them even became global news capitals that gradually were more connected to other global news capitals than to other places in their own respective nation-states.

In this chapter I have argued that we cannot study the early history of any wire service without taking into account its domestic and foreign relations. These relations include both the relation to technology providers, foreign and domestic telegraph companies, and other domestic and foreign wire services. The very essence of wire operations was to provide content (news) to customers (newspapers and other agencies) using the latest technology of the time: the telegraph and submarine cables.

I have shown that, both in technology and in the electronic news industry, there was an attempt to achieve a spatial monopoly. Western Union achieved a monopoly over inland telegraph lines; British and US cable companies achieved a monopoly over Atlantic cables; the European electronic news cartel, and especially Reuters, achieved a monopoly on the US and subsequently on the world news market; Associated Press achieved a monopoly on the US market. These monopolies were interconnected and dependent on each other. Their formation was complex and complicated. They faced internal and external competition and did not last indefinitely. But when the monopolies were all in force at the same time they were difficult to break.

Western Union's domestic monopoly would not have been possible without the Atlantic cable. The AP monopoly would not have been possible without its contract with Western Union and Reuters. The European news cartel's monopoly (and especially Reuters') on the world market would not have been possible without its contract with AP and with cable companies. The Atlantic cable companies would not have had their monopoly without their arrangements with inland telegraph companies that were also monopolistic.

As Innis (1964) has pointed out, monopolies are created over both time and space. The telegraph and submarine cables created a new market, where getting the news first became a crucial factor in competing against other newspapers. However, as with every new technology, the price of using it in its early days was high. To achieve a spatial monopoly, newspapers made agreements with each other to share the costs. It was New York and the East coast of the United States that had a spatial monopoly over electronic news. This happened primarily because of their strategic position as a news gateway to Europe based on harbor cities and cable landings. There was also continuity and even overlapping between transportation and transmission, ships and cables, trains and telegraph poles.

The fact that the AP domestic monopoly was only achieved in 1893 shows how difficult achieving and maintaining a monopoly is. Even that monopoly did not last long: when the United Press Association was founded in 1907 it soon started challenging the AP monopoly. The availability and increase in the use of wireless telegraph and radio challenged the power of the European news cartel, which was technologically based on the control of the telegraph by the respective nation-states. Among the agencies that rose to resist the cartel were the Associated Press and United Press, who used the wireless and formed alliances with other agencies subordinated to the cartel.

Eventually, after World War I, the telegraph monopoly was brought down by the wireless, and by 1934 the European news cartel monopoly had been broken by AP and the UPI in collaboration with other agencies. By that time, old news monopolies had served their purpose and gave way to “free” competition that was laid on the inherited structures of the former. As a result, after World War II, London, Paris, and New York became the leading global news capitals of the world.

NOTES

1 MacGill Hughes (1940, p. 58).

2 R 1/8714755, Reuters' archive, London.

3 Retrieved July 30, 2010, from http://www.ap.org/pages/about/history/history_first.html

4 Retrieved May 14, 2010, from http://www.ap.org/pages/about/history/history_first.html

5 Retrieved July 30, 2010, from http://www.ap.org/pages/about/history/history_first.html

6 Retrieved May 14, 2010, from www.corporate.westernunion.com/history.html; www.ieeeghn.org/wiki/index.php/western_Union

7 A list of telegraph companies owning submarine telegraph cables, all of which are paying dividends (printed 1868, source unknown). DOC///46/2, Cable and Wireless archive, Porthcurno.

8 “America,” Daily Telegraph, August 2, 1866. DOC//13/135. Cable and Wireless archive, Porthcurno.

9 R 1/8714755. Reuters' archive, London.

10 “Reuters' Telegrams,” Chicago Tribune, December 12, 1866.

11 “Reuters' Telegrams,” p. 20; Reuters' Minute Book, December 20, 1867, p. 172. R 1/883501. Reuters' archive, London.

12 Reuters' Minute Book, December 12, 1866, p. 172; April 24, 1867, p. 203; May 8, 1867, p. 209; July 3, 1867, p. 244. R 1/883501 and The New York Times, January 11 (1867). Reuters' archive, London.

13 Signed July 1, 1870. R 1/880234. Reuters' archive, London.

14 Reuters' Minute Book of February 1895, p. 98, refers to it: “The Managing Director reported the complete collapse of the UP of the US and submitted congratulatory telegrams exchanged with the AP in reference to the overthrow of their rivals. The Board expressed great satisfaction at this issue of the struggle between the Company's allies, the AP, and the UP, and authorized the Managing Director to stay the proceedings pending against the UP for breach of contract as soon as he might deem expedient.” R 1/883507. Reuters' archive, London.

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