The (almost) Russian-American Telegraph

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By then Western Union was reaping abundant rewards from construction and operation of its transcontinental line, which had been built in less time and at less cost than anticipated, assisted by a federal subsidy. Visions of even greater profits dangled before the eyes of Hiram Sibley, the Western Union president, and his associates. Collins asserted that with a side extension of the line from Siberia to China half of the world’s population would be tributary to the Russian-American line. The company saw the possibility of controlling the worldwide flow of telegraph messages, a prospect hard to ignore.

Western Union endorsed the idea, the normal caution of its board of directors overwhelmed by Sibley’s enthusiasm. At one point he wrote Collins: “The work is no more difficult than we have already accomplished over the Rocky Mountains and plains to California; and, in my opinion, the whole thing is entirely practicable, and that, too, in much less time and with much less expense than is generally supposed by those most hopeful. No work costing so little money was ever accomplished by man that will be so important in its results.”

The scope of the project that Sibley, Collins, and their associates approached with such nonchalance would have given pause to men less wrapped up in their own visions. The obvious possibility that the need for the line’s existence would be destroyed if Field completed his Atlantic cable did not deter them. A path must be opened for the telegraph line through forests, over mountains, across many stretches of Siberian steppes where no trees grew to provide poles, through thousands of miles of almost unexplored and unpopulated wilderness. All supplies except poles must be hauled from the United States, many of them by ship from the East Coast. Poles must be cut, hauled from afar and erected, wire strung, relay stations constructed. In fact, the promoters knew almost nothing about the terrain to which they were committing millions of dollars.

The line would run some thousand miles up the Pacific coast from San Francisco across the border to New Westminster, British Columbia; from there twelve hundred miles up the Fraser River Valley and Caribou Trail to Russian America; nine hundred miles across unknown territory to the Bering Strait; under the strait by cable; and then eighteen hundred miles across the Siberian steppes to the mouth of the Amur—in all approximately five thousand miles of construction, much of it under ferocious conditions of weather and terrain.

During the years of promotional work for the scheme by Collins the project was known as the Collins Overland Telegraph Company. That changed when Western Union took over the project in March, 1864. For his ideas, promotional work, and contacts with all the governments involved in providing the necessary official approvals, Western Union agreed to give Collins one tenth of the stock in the project, free from assessment or call; the right to subscribe one tenth more on an open basis; and a hundred thousand dollars in cash to pay for his services and expenses during the years he had been beating the drums.

Russia promised to complete her trans-Siberian telegraph to the mouth of the Amur in order to hook up with the American project, gave the American company the right to construct its line through Siberia and through Russian America, and promised the company a 40 per cent rebate on tolls from international messages passing over the government wire. In June, 1864, Congress passed an act granting Collins and his associates the right to construct a line from any point on the Pacific telegraph north to the British Columbia border over unappropriated public lands, to take timber and stone for construction, to build stations, and to receive forty public acres for each fifteen miles of telegraph line constructed. United States troops were to secure the line “from injury by savages or other evil-disposed persons.” However, an effort by Collins’ friends in Congress to guarantee the telegraph company fifty thousand dollars a year for ten years after completion of the line was defeated. From the Legislative Council of British Columbia Collins obtained permission to build the line through the territory without restrictions or subsidies.

The Western Union directors decided to finance the venture separately from the parent company. They created the Western Union Extension Company with Sibley as president and authorized sale of a hundred thousand shares at a hundred dollars par value, a total of ten million dollars. Stockholders and the directors themselves took a majority of the stock, and Collins received his stipulated share. A 5 per cent assessment, or five dollars, was declared against each share for operating purposes, with the idea that a total of not more than 20 per cent in assessments would be charged to complete the line. As a reflection of confidence in the wisdom and financial wizardry of Western Union, the entire ten-million-dollar stock issue was quickly sold.

Few people outside the Western Union management, and not many within it, questioned the assumption upon which the Russian-American telegraph scheme was based: that the Atlantic cable could not succeed.