Rehearsal for media regulation: congress versus the telegraph-news monopoly, 1866-1900.

• Author: Blondheim, Menahem

1. THE CENTURY THAT NEVER HAPPENED 300 II. FREE SPEECH AND THE RISE OF CORPORATE AMERICA 302 III. WESTERN UNION, THE ASSOCIATED PRESS, AND THE LEGISLATURE 304 IV. WESTERN UNION'S MONOPOLY OF KNOWLEDGE 308 V. ZEROING IN ON THE ASSOCIATED PRESS 314 VI. THE REGULATOR, THE AP, AND THE FIRST AMENDMENT 318 VII. EXIT CONGRESS, ENTER THE JUDICIARY 322 VIII. EXIT THE HISTORIAN, ENTER THE LEGAL SCHOLAR 325 I. THE CENTURY THAT NEVER HAPPENED

   Until quite recently, legal scholarship tended to consider the nineteenth century a First Amendment wasteland. No landmark Supreme Court decisions or major debates in the legal system alerted legal scholars to the evolution of free expression ideas and practices in that otherwise lively century. (1) This presumed century-long stasis should have appeared curious: after all, the years between the demise of alien and sedition laws and the era of the World Wars witnessed the radical democratization of American politics, political debate, and the media coverage of both. That period also witnessed revolutions, first in transportation and then in electric communications, which together transformed the nation's information environment and its press. The nineteenth century also produced the greatest event of United States history--the Civil War--in which the concepts of freedom and rights were central. That same century hosted the American Industrial Revolution and processes of centralization and national integration. These historical processes should have had a significant beating on the development of free-speech-related theory and practice.

   And indeed, recent historians of the First Amendment, taking their cue from developments beyond the narrow confines of the legal system, have been encountering a rich nineteenth century legacy of discourse on freedom of the speech and press. Scholars including Michael Kent Curtis (tracing free speech issues in the antebellum and Civil War eras) and David M. Rabban (studying turn-of-the-century events) have been exploring heretofore untraveled paths for understanding the transformation of First Amendment sensibilities prior to the Supreme Court's great free speech decisions in the twentieth century's interwar period. (2) Yet with all of its richness, this new scholarship has failed to find antecedents for one of the major issues on our contemporary free expression agenda: government regulation of powerful, new technology-empowered communication corporations that play a major role in shaping America's public sphere. As Rabban has observed, "[S]ome current free speech issues were not addressed before the [first world] war." (3) A case in point was media regulation. "Regulation of mass media and cyberspace," Rabban averred, "were not topics of concern ... between the Civil War and World War I." (4)

   The present essay is intended to add a chapter to the emerging story of freedom of expression in the nineteenth century. Its focus is precisely on the missing link highlighted by Rabban: it discusses free press dilemmas emerging from the diffusion of powerful media of public communications in the post-Civil War generation. More specifically, it reconstructs a prominent, generation-long debate over government regulation of the telegraph ("the Victorian Internet") and the newswire services (America's first national media enterprise) in the Gilded Age. This inexplicably neglected chapter in the history of free speech is particularly compelling in that issues that were rigorously negotiated during that time resonate in present-day jurisprudence dilemmas regarding the nexus of communications technology, government regulation, and free expression. Such parallels between the nineteenth century debate and our contemporary quandaries are not explicitly drawn out in what follows. They are, however, quite patent, even striking. Moreover, and at least as important, the case of telegraph and wire service regulation seems to provide a coherent link between nineteenth century technological, business, and social developments, and twentieth century First Amendment thought.

2. FREE SPEECH AND THE RISE OF CORPORATE AMERICA

   In antebellum America, political and ideological controversies over the fate of the Union subsumed the free speech debate. (5) Free expression was a significant aspect of the overall contest between slavery and freedom, as illustrated by the Republicans' 1856 battle cry: "Free Speech, Free Press, Free Men, Free Labor, Free Territory, and Fremont." (6) The Union's victory, in a war construed by the North as a conflict about the overall meaning of freedom, vindicated and enshrined an expansive theory of civil liberties, freedom of expression included. (7) Thus, during the Gilded Age, it was no longer politics and ideology that launched and fueled the free speech debate, but rather the state of the Union's economic, business, and technological development. Concern over freedom of press and speech in the postwar era emerged as an aspect of the nation's grappling with the rise of corporate America and its search for a new industrial and business order in the aftermath of the late-century Industrial Revolution. In that context, the particular focus of the freedom of speech debate was on the role of government. More specifically, it centered on the powers of government to regulate utilities that affected the circulation of information and opinion. (8)

   The story of the emergence of industrial America and the appearance of its big business organizations has been told from a variety of perspectives. One of the most important, albeit neglected, is the communication perspective. After all, the earliest and most formidable of the new generation of businesses, corporations of unprecedented scale and scope, were concentrated in the communication and transportation sector. As concern over big business mounted in the decades after the Civil War, it came to be focused on the problem of monopoly. And indeed, the first two private-sector national monopolies in America were communication concerns: the New York Associated Press and the Western Union Telegraph Company. These two major players in the field of communications foreshadowed the emergence of giant national corporations in other sectors of the economy. Moreover, as business historian Alfred Chandler has persuasively argued with reference to Western Union, and as I have tried to demonstrate in the case of the Associated Press, national communications concerns were instrumental, perhaps even prerequisite, for the emergence of other clusters of industrial and service corporations operating on a national scale and dominating their respective fields of business. (9)

   Thus, once government confronted the rise of big business and the problem of private-sector monopoly, it would inevitably encounter the First Amendment. But the bar, the prosecution, and the courts played no part in the drama, and consequently, scholars who focused on the legal system in tracing the development of First Amendment ideas--particularly when using that system's records as their sources followed suit and tended to ignore these free expression quandaries. More surprisingly, perhaps, the public debate over the regulation of communications during the Gilded Age has evaded most students of American political economy, and of communications history as well. In these realms, however, the oversight was not due to a lack of sources: a massive corpus of primary materials recording the debate, in print and in manuscript, is extant, and although not always easily accessible, these materials are certainly compelling. (10)

3. WESTERN UNION, THE ASSOCIATED PRESS, AND THE LEGISLATURE

   For more than a generation after the Civil War, government studied the new realities of American communications as shaped by novel technologies and microeconomic change. In the course of that generation, the legislative and executive branches pondered their powers to control and regulate the telegraph and news monopolies, which in turn profoundly affected the American communications environment and the nation's press. Indeed, the debate over telegraph and wire service regulation served as a significant prelude and a useful rehearsal for realigning the powers of government, judiciary, and corporate America, as well as the freedoms of America's press and of its people. (11)

   Western Union, established in 1851 as the New York and Mississippi Valley Printing Telegraph Company, began buying out and merging small Midwestern telegraph companies in the mid-1850s, the telegraph's "era of consolidation." (12) By the Civil War it represented the western leg of a national telegraph duopoly, and after the war it managed to swallow up its major eastern rival, the American Telegraph Company. Thus, by 1866, Western Union could be considered what business historians call a "center firm"--a corporation controlling more than ninety percent of its field of business. (13)

   Less conspicuous, but at least as dominant in shaping the national communication and information environment, was the Associated Press ("AP"). By 1867, the AP was a coalition of regional press associations, dominated by the New York Associated Press ("NYAP"). The NYAP, founded in 1846, had managed, by shrewd maneuvering in both the telegraph and newspaper sectors, to gain the questionable distinction of being America's first private-sector national monopoly. From the mid1850s on, the AP and Western Union were very closely aligned. They fully deserved their contemporary description as "a double-headed monopoly." (14)

   While Western Union was a household name to most Americans, few had ever heard of the AP, let alone realized its key role in the information business. This was paradoxical. Only a small minority of Americans actually used Western Union's facilities, but practically all literates in America were daily consumers of AP's product: the telegraphic news appearing daily in their morning and evening newspapers--the news that...