Technology & Money

This story starts in the 1850s with the founding of Western Union Telegraph and the beginning of the Second Industrial Revolution.


When Morse was approaching his eightieth birthday it was felt among the telegraph fraternity at Western Union that a formal testimonial in the U.S. should be given to honor him - Saturday, June 10th, 1871 Morses final message was:
" Greeting and thanks to the Telegraph fraternity throughout the world.
Glory to God in the Highest, on Earth Peace, Goodwill to men."

S ... F .-. B -... M -- O . . R . .. S ... E .

Ezra Cornell’s story is the story of the telegraph in America. Always confident of its great commercial future, he enthusiastically demonstrated it, enlisted capital, and built lines. Although doing so frequently left his family destitute, he always took a large part of his pay in stocks, and invested in the first telegraph company, which connected New York and Washington. He built lines from the Hudson to Philadelphia and from New York to Albany, as well as lines in New York, Vermont and Quebec, and west to Buffalo, Cleveland, Detroit, Chicago, and Milwaukee. He was involved in the rapid construction of subsidiary lines, especially in the midwest, where the telegraph preceded rather than followed the railroad.
The early days of the telegraph industry were tumultuous. Many companies were formed, operated briefly and died. Stronger companies managed to survive despite conflicts, deception, and numerous lawsuits. Service on the hastily built lines was frequently unreliable. In 1851, the New York & Mississippi Valley Printing Telegraph Company was organized in Rochester by Hiram Sibley and others, with the goal of creating one great system with unified and efficient operations. Meanwhile, Cornell had bought back one of his bankrupt companies and renamed it the New York & Western Union Telegraph Company. Originally fierce competitors, by 1855 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. Western Union rapidly expanded operations to most parts of the United States and Canada. While Cornell now took a less active role, he continued to have great faith in the telegraph. He held on to his Western Union stock, and for more than fifteen years was the company’s largest stockholder.
Western Union bought out smaller companies rapidly, and by 1860 its lines reached from the East Coast to the Mississippi River, and from the Great Lakes to the Ohio River. In 1861 it opened the first transcontinental telegraph. In 1865 it formed the Russian American Telegraph in an attempt to link America to Europe, via Alaska, into Siberia, to Moscow. (This project was abandoned in 1867.) The company enjoyed phenomenal growth during the next few years. Its capitalization rose from $385,700 in 1858 to $41 million in 1876. However it was top-heavy with stock issues, and faced growing competition from several firms, especially the Atlantic and Pacific Telegraph Company—itself taken over by financier Jay Gould in 1875. In 1881 Gould took control of Western Union.
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. As the telephone replaced the telegraph, money transfer would become its primary business.
When the Dow Jones Transportation Average stock market index for the New York Stock Exchange (NYSE) was created in 1884, Western Union was one of the original eleven all-American companies tracked.
By 1900 Western Union operated a million miles of telegraph lines and two international cables.

Image: Cornell 1910 via: http://en.wikipedia.org/wiki/File:Rummell,_Richard_Cornell_University.jpg
In 1862 the Morrill Land Grant Act had been passed, appropriating public lands to aid state agricultural and mechanical colleges. By 1864, Cornell’s family, his personal philanthropies, and the Public Library required only a small part of his considerable fortune. He had been elected to the New York State Senate, where he made the acquaintance of Andrew Dickson White of Syracuse. Through discussions with White, the idea of a university grew in Cornell’s mind. When the Legislature met in 1865, White introduced a bill in the Senate “to establish the Cornell University and to appropriate to it the income of the sale of public lands granted to this State.” After much political maneuvering, the bill was passed in the Assembly on April 21, in the Senate on April 22, and was signed by Governor Reuben E. Fenton on April 27. The first meeting of the Board of Trustees was held on April 28. Cornell endowed the university through an outright gift of $500,000, to which would be added the sum realized by Cornell’s purchase of the Morrill land scrip from the state.
Cornell was closely involved in all aspects of the new university. He superintended construction and purchased equipment, books, and collections. On October 7, 1868, Inauguration Day, 412 students, the largest entering class admitted to any American college up to that time, came to Ithaca. Cornell gave a brief address, concluding with the University’s newly adopted motto: “Finally, I trust we have laid the foundation of an University—an institution where any person can find instruction in any study.”
  • via: http://rmc.library.cornell.edu/Ezra-exhibit/EC-life/EC-life-11.html

The second story of wealth & philanthropy

LVMH to Buy Duty-Free Empire for $2.47 Billion

NYT Published: October 30, 1996
LVMH Moet Hennessy-Louis Vuitton, the French luxury goods conglomerate, has signed an agreement to buy a controlling interest in DFS Group Ltd., the lucrative empire of duty free shops, for $2.47 billion, DFS announced yesterday.
But Robert W. Miller, the high-flying billionaire who holds a 38.75 percent stake in DFS, is seeking to block the sale of the stake by his longtime partner and co-founder of the company, Charles F. Feeney, and Alan M. Parker, the company’s tax lawyer. Together they own 58 percent.

Rumpled by habit, limping on old knees, smiling faintly after a night of celebration, Chuck Feeney stepped out of a building on Park Avenue Monday night and vanished, carried away on a river of passing strangers who knew nothing about him. Perfectly disguised as an ordinary man, Mr. Feeney, one of the most generous and secretive philanthropists of modern times, had dropped from sight once again. It is a skill he mastered over decades.
Last year, the foundation Mr. Feeney created, the Atlantic Philanthropies, gave $458 million in grants around the world, more than any United States charity except two, the Ford and the Bill and Melinda Gates Foundations. Atlantic, and small predecessors also started by Mr. Feeney, have given $4 billion since 1982; the plan is to give away the remaining assets — now $4 billion, but growing every day — by 2017.
Despite this record, Mr. Feeney is little known, a result of the web of intrigues that he fashioned to disguise his identity, his wealth and his giving. Atlantic does not appear in the annual rankings of the biggest American philanthropies because it was set up in Bermuda, to avoid the disclosures required in the United States. A rare glimpse of Mr. Feeney’s story emerged a decade ago during a business dispute, but he quickly disappeared from the news.
Now, however, Mr. Feeney, who is 76 years old and grew up in Elizabeth, N.J., is stepping out from behind his veil. He cooperated with a biographer, the journalist Conor O’Clery, whose book, “The Billionaire Who Wasn’t,” is being published by PublicAffairs. In it, he describes how Mr. Feeney and his partners went into business nearly 50 years ago selling five-pack boxes of liquor to American sailors in ports around Europe, and expanded into a worldwide empire of duty-free airport shops — often one quick step ahead of police or immigration authorities.

It is also reported: Then, by the use of off-shore cutout corporations, he gained anonymity to pursue his philanthropic goals. To further protect his identity, he did not even take a tax deduction for his charitable contributions.

For a great read of the History of DFS Group Ltd read more here:
http://www.fundinguniverse.com/company-histories/DFS-Group-Ltd-company-History.html
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