Transportation Deployment Casebook/2018/Telegraph (1870-1970)

Qualitative

Abstract

When comparing the S-curve to the actual data collected, it can be said that the initial birth stage of the telegraph was higher than expected due to the niche market and foreseen potential. The growth stage was concise in both models. However, the following maturity stage was shortened and a resulting declination phase commenced, as the development of better communication technologies made the telegraph obsolete. Nevertheless, current technologies and business movements would have not been so prominent without the telegraph aiding their own growth stage.

Introduction

The telegraph was an early communication system implemented first in the US, which allowed the almost instantaneous transmission of coded messages (normally in the format of Morse code) by pulsing currents of electricity through a wire.

Like many other inventions developed during the same time, the telegraph was exploited by a single distributer (Western Union) and paved the way for many current technologies, businesses and processes during its maturity stage.

However, the standardisation of the telegraph was short lived, as with many other means of technology, they are constrained by “The Product Life Cycle” (PLC).

The PLC consists of three main stages, this includes the “Birth” phase, the “Growth” phase and the “Maturity” phase. The PLC may also include the “decline” phase if a product eventually becomes obsolete, which in this case the telegraph has.

1. Birth: this stage comprises from conceptualisation to the development of a product; the new market allows for easy monopolization and patients.  
2. Growth: the success of the product results in an increase in sales and demand; this stage comprises of the greatest profit and exposure of the product.
3. Maturity: the produce has become standardized, resulting in a well-established market and distribution. Here, the revenue of the product still increases, however at a slower rate.

Technology characteristics

When an electrical current, (produced by a battery), transmitted through a (single) wire is “broken” using a “key” (a physical device like a button), the discontinuation would be received at the recipient station, and detected using an electro-magnet, the message would then be presented using some sort of signal (for example, a written symbol or noise) that allows for the recipient to decipher the coded message.

Morse code was the popular format for messages sent using the telegraph. A pattern of “dots” and “dashes” or short and slightly longer sounds corresponded to a letter. A combination of the, in sequence allowed for an entire message to be sent by using pulses of electrical currents; for example, ‘SOS’ was coded as (… - …).

Predecessors

Prior to the development of the telegraph commonly understood today. Visual signals were used to transmit messages over large distances, which too were encoded. Smoke, drums and mirrors were just some of the early forms of communication systems. However, environmental factors; for example, the weather greatly affected communication quality.

Additionally, animals were used to send messages from one person to the next. “Homing pigeons” and “The pony express” were famous cases of animal delivery systems used in the US. However, animals used to deliver mail were relatively slow (it took approximately 10 days to travel 2900km using horses) ^[8], unpredictable and expensive to maintain.

Successors

The implementation of the telegraph also facilitated the growth and adaptation of many modern technologies used for communication and transportation.

An example of this is when the telegraph aided the establishment of the railroad system in the US. The telegraph and railroad system developed a “symbiotic” relationship. As train coordination relied on and were communicated using telegraphs. The telegraph in turn used the network established by railroads to further its communication potential.

The combination of the telegraph and the railroad system in the US reduced the number of accidents that occurred and maintained consistency in travel hence, resulted in an acceleration in progression of railroads in the US.

This is because, single lane rail tracks could still be operational when the railroad network expanded, as the telegraph allowed for the transfer of time schedules, delays and occupancy from one terminal to the next, eliminating the need to implement a ‘double-railed’ track or give priority to certain trains over others, resulting in delays and dissatisfaction.

Stock exchange and developing businesses also benefited from the telegraph, further explained in the maturity section.

Time line

Year	Event
1791	Claude Chappe developed one of the first forms of “Far writing” (the meaning of telegraph). He used a clock, codebook, coloured panels and a telescope to send messages 16.1 km long. He further expanded his network using towers and mechanical arms.
1838	Morse’s patent of the electric telegraph was approved.
1846	Lines that ran from New York to Washington were completed, and were the first commercial telegraph lines.
1851	Telegraph and train railroads were integrated together
1857	“Treaty of Six nations” signed.
1876	Telephone patent issued to Alexander Graham Bell
1924	AT&T developed the Teletype system.
1970	Telegraph began to phase out from the communication industry, as better communication technologies allowed for messages to be sent from home, without the need to be coded, and deciphered.

Advantages

Compared to its predecessors the telegraph allowed the transition of messages from the source to the recipient in a reliable and inexpensive manner. It also created many job opportunities (like many of the inventions of the 19^th century) from skilled operators, interpreters and maintenance workers. 

Travel time from New York City to Cleveland for example, took an average of 2 weeks ^[1] (to transmit messages using horses), However the use of the telegraph allowed for the transfer of information almost instantaneously.

Allowing for businesses, stock exchange and the rail system to expand drastically during their own birth and growth stages.

Disadvantages

Nevertheless, messages send using the telegraph had to be short and were coded meaning that the recipient needed knowledge to decipher the messages; Furthermore, messages sent often lacked personal touches and emotions.

Mis-communication was common, which were worsened due to the complexity of the networks, as the number of companies trying to gain revenue from the newly innovated system were exceeding the acceptable threshold that allowed for healthy competition and reliable services.

Market

As mentioned before, the niche market produced by the telegraph was exploited by many companies all trying to gain revenue. subsequently, many lines owned by different companies layered over one another, resulting in messages travelling over 5 to 6 lines just to travel from one telegraph station to another telegraph station located in a different region, this allowed for prices to be unjustifiably increased.

Polices and government agreements were put in place to compile the large number of independent and relatively small companies into a single organisation.

The stages of the telegraph

Birth: 1844 - 1870

Prior to the first message ever to be sent using the telegraph, the telegraph itself was thought of as an invention, however, it was in fact an innovation. As the components needed to compose the telegraph were invented prior, and included those of Luigi Galvani (1786) and Anastasia Volta (1800), just to name a few.

Morse obtained a patent from the US government (1838). However, Morse noticed that he could not continue the innovation alone. Hence, later split the patent and established partnerships with four other members. Business matters were managed by Amos Kendall; whilst Leonard Gale and Alfred Vail helped Morse further develop the Telegraph and Smith who obtained the grant for the US government. Therefore, it can be concluded that patients inhibit the innovation process.

During the birthing stage of the innovation, many companies competed with one another, and wanted to establish partnerships with companies who they considered to be advantageous. This completion was needed to combine companies together through policies enforcing integration.

Furthermore, mis-communication was common during the birthing stage of the telegraph due to the complexity of the telegraph network and its many companies all trying to profit; telegraph companies also did not claim responsibility for the mis-communication, Hence, once again policies were established to counter this.

In summary, between 1853 and 1857 the “Treaty of six nations” ^[2] was signed, which compiled smaller companies, depending on their region, into six large organizations. As progression continued, these organizations continued to merge with one another, until 1866 when Western Union dominated the market and remained as the last telegraph communication company.

From here the start of the Growth period began.

Growth: 1871 - 1930

During this stage Western union dominated the market field (80%-90%). Messages transmitted using telegraphs increased drastically, this resulted in a reduction in the average cost per message over the same period, from $1.09 to $0.30 per message ^[2]. In other words, as the production increased the level of costs decreased proportionally or in other words the Economy of Scale.

Furthermore, as the excess telegraph companies were all acquired by Western Union, the quality of transmission was vastly improved. Responsibility for mis-communication, line failures and inaccessibility were all prioritised by Western Union.

Hence, the increase in Quality and reduction in costs resulted in a corresponding increase in demand, and intern an increase in the Economy of Scale. This is because, the relationship between elements like Quality, Cost and Demand formulate a feedback loop between one another.

The increase in Quality results in an increase in demand (positive-positive feedback loop), and the decrease in cost also results in an increase in demand (negative-negative feedback loop), subsequently the increase in demand increases the Economy of Scale (positive feedback loop).

The main issue faced by the Western Union was competition from equally large telegraph companies, or new technologies which bettered the transportation of information, in other words, the Maturity and Decline stages.

Maturity: 1931 – 1945

During the Mature phase, the revenues standardised and product improvements and innovation become risky as the previously established Economy of Scale can be diminished if the improvement proves to be unsuccessful.

There are essentially three strategies for dealing with the Maturity of a technology, these include;

1. Escape: Essentially research and development are used to escape or postpone the maturity stage.
2. Adapt: fine tuning the economy of scale just enough to oppose the competitions and market
3. Accept: When the maturity stage of a technology is perceived as inescapable

The development of the “long line” telephone (or “talking telegraph”) which allowed for non-coded communication over greater distances resulted in a complete transition from telegraph to telephone communication by the 20^th century.

Even though, there were many attempts to improve the telegraph, which ranged from improving equipment quality to reducing the number of lines needed to transmit signals simplifying the encryption, it was no match for the giant AT&A, Hence, accepting the maturity of the telegraph and evident decline.

Decline: 1950 – onwards

The decline of the telegraph occurred just after 1930 and continued to fall, until its complete dismissal during the start of the 20^th century. Nevertheless, the telegraph allowed for businesses and existing technologies to flourish; Hence, if not for the telegraph and its communication potential, methods of production commonly seen today would have not existed or been established on a solid foundation as they are right now.

For example, refrigeration and the telegraph allowed for butchered produce to be kept “fresh”, reducing the price of shipping by half, when compared to the shipping of live animals. The telegraph also allowed for stock exchange to increase, as the market relied heavily on communicating information, hence, when the process become instantaneous, the investments increased.

Quantitative analysis

Using Microsoft excel and the solver application a regression analysis was done on data obtained from historic dates, collected and published in books including ‘Historical Statistics of the United States’ and ‘Report of the Superintendent of the Census for December 1, 1852’. Which presented the number of handled messages transmitted via the telegraph during 1870 to 1970 ^[2]. (Tabulated below).

Date	Messages Handled
1870	9,158,000
1880	29,216,000
1890	55,879,000
1900	63,168,000
1910	75,135,000
1920	155,884,000
1930	211,971,000
1940	191,645,000
1945	236,169,000
1950	178,904,000
1960	124,319,000
1970	69,679,000

Figure 1:Telegraph life-cycle

A S-curve was calculated from regression analysis and represents the predicted life-cycle of the telegraph, shown in figure 2. The blue line represents the predicted number of messages handled from the regression analysis, this was plotted against the raw (actual) data obtained (red), The point of inflection represented the transition from the birth stage (positive: rapid increase) to the mature stage (negative: slowed increase), and can be found during the growth phase.

The S-curve was generated using a three-parameter logistic model.

• S(t) = K/[1+exp(-b(t-t0)]
• S(t): is the status measure.
• t: is time (usually in years),
• tnought: is the inflection time (year in which 1/2 K is achieved),
• K: is saturation status level (estimated)
• b: is a coefficient (estimated)

Variables of K were first assumed, however, had to satisfy the rule that the initial K value needed to be greater than or equal to the maximum saturation value collected in the data (236169000), because mathematically a negative value cannot be solved using a log function, nor can the detonator of the formula be equal to zero.

With the objective that the least squared regression value needed to be as close too yet, not greater than one, solver was used to obtain the K value 282x10^6 (282161400.558516), and the corresponding b and tnought values as 0.089908 and 1921, respectively. (tabulated below).

Variables	Value
K	282200000
tnought	1921
b	0.0899
RSQ	0.9541

Realistically, the value K represents the saturation of a system, or in this case the number of messages handled during maximum capacity predicted by the S-curve, tnought is the infliction time (1921), where the rate of growth slowed, yet still increased.

Figure 2: S-Curve of the telegraph life-cycle

When comparing the predicted S-curve with the raw collected data, the actual life-cycle of the telegraph consisted of periods that disagreed with that of the predicted dates, as listed in table below.

Actual stages of the telegraph		Predicted stages of the telegraph
Stages	Dates (yrs)	Stages	Dates
Birth	1844 - 1870	Birth	1844 - 1890
Growth	1871 - 1930	Growth	1891 - 1940
Mature	1931 - 1945	Mature	1941 – onwards
Decline	1950 – onwards	Decline	-

For example, from the S-curve, the predicted maturity phase was in fact a declination phase. This is because, the technology became obsolete when better communication methods like the telephone dominated the market. The S-curve fitting resulted in a Squared regression value of 0.95, which can be concluded to be relatively high, resulting in a reliable S-curve.

Nevertheless, inconsistencies occur due to real-world variables, like a changing demand, economic status and unpredictable environment, just to name a few. However, to improve the accuracy of the data, more data needs to be collected or in this case compiled. Nevertheless, the data itself was collected from Western Union, reassuring its integrity.

Reference list

[1] https://classroom.synonym.com/advantages-disadvantages-telegraphing-8626545.html

[2] https://eh.net/encyclopedia/history-of-the-u-s-telegraph-industry/

[3] https://en.wikipedia.org/wiki/Pony_Express

[4] https://www.enotes.com/homework-help/what-3-advantages-telegraph-578600

[5] https://transportgeography.org/?page_id=4276

[6] Report of the Superintendent of the Census for December 1, 1852, Washington: Robert Armstrong, 1853.

[7] Historical Statistics of the United States: Colonial Times to 1970: Bicentennial Edition, Washington: GPO, 1976.

[8] The Transport Experience: Second Edition William L. Garrison and David M. Levinson, 2005