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Western Union scraps telegram service

Telecommunications pioneer ends 155 years of telegraph

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STOP: After 155 years in the telegraph business, Western Union has cabled its final dispatch.

The service that in the mid-1800s displaced pony-borne messengers has itself been supplanted over the last half-century by cheap long-distance telephone service, faxes and e-mail. In a final bit of irony, Western Union informed customers last week in a message on its Web site.

"Effective January 27, 2006, Western Union will discontinue all Telegram and Commercial Messaging services," said the notice. "We regret any inconvenience this may cause you, and we thank you for your loyal patronage."

The terse notice, confirmed Wednesday by Victor Chayet, a spokesman for the Greenwood Village, Colo., unit of First Data Corp., was in keeping with telegraphese, the language customers devised to hold down costs. Sentences were separated by "STOP," which was cheaper to send than a period, Chayet said.

Western Union employees were informed of the decision in mid-January, one operator said Wednesday.

"My aunt sent me a telegram when I turned 16, when I graduated from high school and went to the convent, where I didn't stay, of course," said the operator, who gave her name only as Marilyn. "And I still have it."

Western Union, which now primarily transmits money from about 270,000 locations in more than 200 countries and territories, ended the service a day after First Data said on Jan. 26 that it will spin off the company. Western Union may be valued as a public company at more than $20 billion.

"The telegram was the last remaining bit of our telecommunications heritage and doesn't really fit with where we are moving forward, as a financial services company to the world," Chayet said.

Western Union, founded in 1855 as the New York and Mississippi Valley Printing Telegraph Co., built the first transcontinental telegraph line during the U.S. Civil War and in 1866 introduced the ticker system that supplied New York Stock Exchange prices to brokers around the country.

Funded by a $30,000 grant from U.S. Congress, inventor Samuel F. B. Morse sent the first telegram from Washington to Baltimore on May 24, 1844. It read, "What hath God Wrought?"

"It was the beginning of the telecommunications age," said Leonard Bruno, who oversees a collection of Morse's papers as science manuscript specialist at the Library of Congress. "Now you could stay in one spot and let the electrical impulse go from Point A to Point B."

Telegraph lines crossed the American continent beginning in 1861 and the Atlantic Ocean in 1866. Morse helped found the Magnetic Telegraph Co., which was later bought by a company that was bought by Western Union.

"At the time there were scores of competing telegraph companies, and the marketplace was such that the biggest gobbled up the little ones," Bruno said. "Western Union ended up being the biggest, controlling all the lines."

Telegrams were ubiquitous for years. In wartime, they brought news of military casualties. Western Union messengers on fleets of bicycles ferried congratulations to actors after Broadway premieres. In the 1942 movie "Yankee Doodle Dandy," entertainer George M. Cohan, portrayed by James Cagney, receives a telegram from the White House.

Western Union, which introduced singing telegrams in 1933, was known as "The Nation's Timekeeper" for almost a century after developing a service in 1870 to synchronize clocks. It started handling money transfers in 1871.

First Financial Management Corp. bought Western Union in a 1994 bankruptcy auction for $1.19 billion. A year later, First Data bought First Financial for $6.5 billion.

Last year, Western Union had total revenue of $4 billion and $1.12 billion in operating profit. Revenue from money transfers rose 14 percent to $3.8 billion. The company didn't break out revenue from sending telegrams.

Faster and cheaper technology will inevitably replace older methods of communication, said Arvind Malhotra, a professor at the University of North Carolina's Kenan-Flagler Business School.

"I'm surprised it's lasted this long" Malhotra said of Western Union's telegrams. "Communications have moved from snail-mail time to real-time."