Business and Politics of Underwater Cables

by Daniel H. Hendrick and Pascal Griset

The Years of Experimentation, 1838-1866

Telegraphy was already half a century old before it went underwater. The first telegraph network, developed by Claude Chappe in the 1790s using towers and semaphores, was built across western Europe by Napoleon's armies; similar, if more modest, networks appeared in Sweden, Prussia, England, and the United States in the early nineteenth century.  2 

Electricity was first applied to long-distance communication in the1830s and spread rapidly throughout Europe and North America in the 1840s.  3  Laying a telegraph line underwater was more difficult because water conducts electricity and a bare wire immersed in water would immediately cause a short circuit. What delayed the introduction of submarine telegraphy was the need to find an effective insulating material.

In 1838, William Brooke O'Shaughnessy, a British physician and professor of chemistry at the Calcutta Medical College, successfully laid three kilometers of insulated wire in the bed of the Hooghly River. His experiment was purely scientific, however, for there was neither the demand nor sufficient capital for such a service in India at that time.  4 

	Every business exists in a political environment.
	—Daniel H. Hendrick and Pascal Griset

The discovery of gutta percha, the latex of a tree that grows in Southeast Asia and forms a polymer of isoprene, a thermoplastic substance that can be molded when warm, led inventors to insulate copper cables with the new material. The first underwater cable, laid across the English Channel by Jacob and John Brett in 1850, had no protective armor and cost £2,000; it lasted only a few hours before it was snagged by a fisherman. A year later, Thomas Crampton founded the Submarine Telegraph Company. With £7,500 of his own money and another £7,500 from two associates, he was able to purchase and lay a second cable across the Channel, this one protected by an armor of iron wire wrapped around the core of copper insulated with gutta percha. This cable was a success (it lasted thirty-seven years) and launched a new industry.  5 

Long before engineers had mastered the technology of long-distance cables, entrepreneurs promoted ambitious schemes to connect the world, for they expected intercontinental cables to be merely longer versions of the successful Channel cable. Manufacturers of iron cables for mines and bridges like R. S. Newall and Company and Kuper and Company, of telegraph equipment like W T. Henley and Siemens and Halske, and of molded plastic like the London Gutta Percha Company, as well as new firms like Glass Elliot and Company, all vied for a share of the new business. In the process, they encountered many unforeseen obstacles in manufacturing long cables, laying them on the ocean floor, and understanding their electric properties. There were few successes and many spectacular failures.

The first long-distance cables were government ventures undertaken for military and colonial purposes. In 1854, the French and British governments paid Newall and Company £7,500 to lay a temporary unarmored cable from Romania to the Crimea in support of their expedition against Russia. 6  Cables laid in deeper seas, like the Mediterranean, were much more prone to failure, however, because of insufficient slack, inadequate armoring, or faulty laying equipment. The French government, eager to communicate with its troublesome colony of Algeria, ordered cables from English and German firms. One, laid by John and Jacob Brett, broke in 1856; another, laid by Glass Elliot and Company, was lost overboard in 1862; a third, made by Siemens Brothers, was lost in 1863.  7 

The same problems plagued the first cable to India. In 1858, the entrepreneurs Lionel and Francis Gisborne obtained a concession from the Ottoman and Egyptian governments to lay a cable from Egypt to India via the Red Sea. The British government at the time was desperate to communicate with India, where a major uprising, called the "Sepoy Rebellion" (after the Indian Army soldiers who mutinied), threatened to overthrow British rule. In its haste, the government offered the Gisborne brothers a fifty-year dividend guarantee of 4.5 percent on their capital of £800,000 and neglected to demand guaranteed service in return. The ships of Newall and Company that laid the cable did not allow sufficient slack for the floor of the Red Sea, which had not been properly surveyed and was covered with jagged rocks. As a result, the cable broke before a single message could be sent to India. Nonetheless, the Treasury paid the stockholders of the Red Sea Telegraph Company £36,000 a year for the next fifty years.  8 

The first generation of cables, laid in response to the urgent needs of the two major colonial powers, failed because the technology was not yet sufficiently developed to satisfy the demands of its customers. The failure of both the cables themselves and the techniques of laying them constitutes what historian of technology Thomas Hughes has called a "reverse salient."  9 

The failure of the Red Sea cable did not diminish the British government's demand for communications to India. Instead, it fell back on an older technology, land lines. One such line, from the English Channel to the Persian Gulf, where it connected to a cable to Karachi, depended on the goodwill of all the countries along the way and, what was worse, on the ability of telegraph operators in the Ottoman Empire to retransmit telegrams in English, which few could read. During 1868 and 1869, the Prussian firm Siemens and Halske built a land line across central Europe, Russia, and Persia to the Persian Gulf and staffed it with British operators. This line worked well but was overshadowed in 1870 by the laying of a successful cable from Britain to India via the Mediterranean and the Red Sea.  10 

If governments were eager to communicate with their colonies, the business community was much more interested in the North Atlantic. The first entrepreneur to take on this challenge was the American Cyrus Field, who began promoting the idea of a cable between Ireland and Newfoundland (the two closest points on either side of the Atlantic) in 1854. He was encouraged by the report of lieutenant Matthew Maury to the secretary of the U.S. Navy, describing the ocean bed as "a plateau, which seems to have been placed there especially for the purpose of holding the wires of the submarine telegraph, and keeping them out of harm's way."  11  In this, as in most subsequent ventures, naval surveys provided cable entrepreneurs with information about the depth and quality of the ocean floor, a valuable if hidden subsidy.

In 1855, Cyrus Field moved to England to seek the necessary capital of £350,000. There, he secured the backing of Jacob Brett, the engineer Charles Tilson Bright, and several investors, with whom he founded the Atlantic Telegraph Company. They hired the London Gutta Percha Company to manufacture the insulated copper cores of two cables, Glass Elliot and R. S. Newall to cover them with an iron armature, and Glass Elliot to lay the cables. The first cable, laid in 1857, was lost.  12  A second cable, laid a year later, worked well enough to provoke transatlantic jubilation, pompous speeches, and congratulatory messages between Queen Victoria and President Buchanan. Technically, however, it was a disaster, for it required sixteen hours to transmit Buchanan's ninety-nine-word message and then, after five weeks of intermittent use, it died completely. The problems it suffered from were numerous and poorly understood. The cable had deteriorated after being left out in the air too long; its insulation was uneven and defective in spots; and its chief engineer, hoping to revive it, sent too powerful an electric current through it, damaging the insulation even further.  13 

Of the 11,364 miles of cables that had been laid by 1862, only 25 percent worked. The spectacular failure of the first Atlantic cables provoked not only handwringing in the business community but also serious technological research and a complete commercial restructuring. In response to these failures, the British government appointed a joint Committee on Submarine Telegraph Cables, with representatives of the Board of Trade (Britain's ministry of commerce) and the Atlantic Telegraph Company. The committee sought input from scientists and engineers, especially William Thompson (later Lord Kelvin), and suggested innovations in the construction, laying, and electric operation of cables that would make this technology a reliable enterprise; they recommended making the core of the purest copper and gutta percha to prevent the insulation from drying out, protecting the core with an armor of iron wire, and laying the cable smoothly and with sufficient slack.  14 

Plans to lay new transatlantic cables had to be postponed during the American Civil War, for British financiers refused to invest their money as long as the outcome was in doubt. Once it was clear that the Union would win, however, the recommendations of the joint Committee attracted the attention of John Pender, a Manchester cotton magnate. By investing his considerable fortune, he persuaded other, more nervous, investors to join him in a new enterprise. He merged the London Gutta Percha Company with Glass Elliot to form Telegraph Construction and Maintenance, or TC&M, a full-service supplier of cables. TC&M in turn traded its cable for shares in the Atlantic Telegraph Company, now renamed Anglo-American Telegraph Company. TC&M profited from the failures of its predecessors and the findings of the joint Committee to manufacture and lay cables that were efficient and durable. Meanwhile, another competitor appeared on the scene. In 1861, the American telegraph promoter Perry Collins, convinced by the 1857-58 fiascoes that transatlantic cables would never work, proposed to construct a land line from the United States to Europe via British Columbia, Alaska, and Siberia. He secured $50,000 from the United States government to survey the coasts of the northern Pacific Ocean and received the enthusiastic support of Hiram Sibley, president of the Western Union Telegraph Company. When the Civil War ended, Collins and Western Union recruited veteran army telegraphers and began surveying and laying wires in British Columbia, Alaska, and northeastern Siberia. Their line was half completed when news arrived of a new, and successful, Atlantic cable, putting a stop to their project.  15 

In 1865 and 1866, TC&M leased the Great Eastern, the largest ship built before the twentieth century and the only one able to carry enough cable to span an ocean. The Anglo-American Telegraph Company profited from its failure as a passenger liner, for it was too large for most harbors and too fuel-voracious for long voyages. By their loss, the investors in the Great Eastern subsidized the cable industry for several years. The first cable it laid, in 1865, broke but was recovered and repaired the next year and worked flawlessly for years thereafter, as did its twin, successfully laid in 1866. Pender's company had conquered not only the ocean but also the most important long-distance telecommunications market in the world, a market it would dominate for over twenty years.  16  Western Union had by then acquired the lines and offices of the American Telegraph Company along the eastern seaboard of the United States and was well on its way to achieving a near monopoly of telegraphs in the United States. Though it lost money on its ill-fated land line to Russia, it was well compensated by distributing, for a fee, almost all telegrams between the United States and Europe.  17 

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Excerpted with permission from "Submarine Telegraph Cables: Business and Politics, 1838-1939," Business History Review, Autumn 2001.

Thomas Haigh is a Ph.D. candidate in the History and Sociology of Science Department of the University of Pennsylvania.

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