New Life in Old Wires

To millions of Americans, the 113-year-old Western Union Telegraph Co. means bicycling messengers in green uniforms, miles of wire-carrying poles along railroad tracks and yellow shafts of light from all-night offices. The telegram business still accounts for more than half of the company's revenues, but it is dwindling along with the poles and messengers. Venerable Western Union is transforming itself into a new kind of telecommunications giant, using the latest pushbutton automation to provide a range of services as broad as electronic wizardry allows. This week, from the top of its 24-story brick-pile headquarters in lower Manhattan, the company will inaugurate its biggest diversification yet: a 7,500-mile $80 million transcontinental microwave system that will transmit teletype, telephone, facsimile or computer-tape messages with equal ease.

Stocks & Candy. Western Union has already gone a long way toward shedding its 19th century image. It operates a nationwide system for the Air Force designed to detect nuclear bomb explosions, an automatic teleprinter network that serves 9,129 customers in 2,000 U.S. cities and a private telephone system for the Philadelphia-Baltimore-Washington Stock Exchange. Its 30,000-mile facsimile-data-voice net serves the National Aeronautics and Space Administration, and a bigger hookup works for the Pentagon. In September, it opened a "broadband exchange service" to 19 cities that not only combines telephone, teletype and facsimile communication but enables computers to send data across the nation.

The source of all this bustle is Walter Peter Marshall. 63, the company's $141,000-a-year president. A Brooklyn-born, Manhattan-schooled accountant who is one-eighth Cherokee, Marshall got into communications accidentally by answering a help-wanted ad by All America Cables in the mistaken belief that it manufactured cables rather than sent them. After working up to executive vice president of Postal Telegraph, he came to Western Union in the 1943 merger that gave W.U. a monopoly on domestic telegraph business. When he became president in 1948, Western Union looked ready for the undertaker. With a creaking plant, antique methods and little research, it was losing money at a $1,000,000-a-month clip.

Marshall has rescued the company by automating to trim payroll costs from 69% of revenue to 57% last year, by closing unprofitable telegraph offices and by adding such new services as flower orders, wake-up calls and candy-by-wire in the 15,000 offices that remain. The company has made money every year since 1950, last year netted $16.8 million on $297 million in sales.

Frequent Clashes. Battling to revive Western Union, Marshall has repeatedly clashed with American Telephone & Telegraph (usually protesting to the FCC that A. T. & T. rates on its private-line networks are unfairly low), but the two companies see eye to eye about one thing: the future. Says Marshall: "A. T. & T. says the data and private-line business will grow to several billion dollars by 1970. I agree, and I expect our share to be in the hundred-millions." To keep W.U. healthy, Marshall plans to push data and private-line business still harder, mesh private telegrams into his teleprinter network, and use telegraph offices as merchandise outlets. Despite such changes, one W.U. tradition is still reasonably intact: singing telegrams remain available in 285 cities.

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