03_main_body - Going down to the Wire in the Money-Transfer...

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Going down to the Wire in the Money-Transfer Market 1 Case History (Western Union): 19th century In 1851, the New York and Mississippi Valley Printing Telegraph Company was organized in Rochester, New York by Samuel L. Selden, Hiram Sibley, and others, with the goal of creating one great telegraph system with unified and efficient operations. Meanwhile, Ezra Cornell had bought back one of his bankrupt companies and renamed it the New York & Western Union Telegraph Company. Originally fierce competitors, by 1856 both groups were finally convinced that consolidation was their only alternative for progress. The merged company was named the Western Union Telegraph Company at Cornell's insistence, and Western Union was born. It introduced the first stock ticker in 1866, and a standardized time service in 1870. The next year, 1871, the company introduced its money transfer service, based on its extensive telegraph network. In 1879, Western Union left the telephone business, having lost a patent lawsuit with Bell Telephone Company.[11] As the telephone replaced the telegraph, money transfer would become its primary business. .By 1900, Western Union operated a million miles of telegraph lines and two international undersea cables. 20th century The company continued to grow, acquiring more than 500 smaller competitors. Its monopoly power was almost complete in 1943 when it bought Postal Telegraph, Inc., its chief rival. In 1914, Western Union offered the first charge card for consumers; in 1923 it introduced teletypewriters to join its branches. Singing telegrams followed in 1933, intercity fax in 1935, and commercial intercity microwave communications in 1943. In 1958, it began offering Telex service to customers in New York City During World War II, families with sons in military service dreaded the Western Union "boy on his bicycle" to arrive at their home with a telegram from the War Department or the Navy Department. The message began: The Secretary of War (for soldiers and airmen) or Secretary of Navy (for sailors and marines), regrets to inform you that [name, rank and serial number of the man in the military service] was killed in action (or missing in action).
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Going down to the Wire in the Money-Transfer Market 2 In 1963, Western Union organized its international cable system properties and its right-of- way for connecting international telegraph lines into a separate company called Western Union International (WUI) which it divested that year to American Securities. In 1983, American Securities sold WUI to MCI Communications which renamed it to MCI International and moved its headquarters from New York City to Rye Brook, New York. The official name of the corporation was changed to New Valley Corporation in 1991, just in time for that entity to seek bankruptcy protection as part of Mr. Amman's strategy to eliminate the overleveraged balance sheet while continuing to grow the money transfer business . The name change was taken to shield the Western Union name from being dragged through the proceedings (and the bad PR that would cause). Under the day to day leadership of Robert J. Amman and the backing of
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