The O'Reilly Contract

Reprinted from "INSULATORS - Crown Jewels of the Wire", February 1975, page 28

AMERICAN TELEGRAPHIC HISTORY.

This reprint, submitted by Roy M. Licari of Washington, D.C., is from The Telegraph In America by James D. Reid, published in 1879.

CHAPTER XIV.

THE O'REILLY CONTRACT.

On the 13th of June, 1845, Henry O'Reilly, a citizen of Rochester, N. Y., entered into a contract with the Morse patentees for the extension of the Morse telegraph over a region of territory wider and more valuable than any which had been yet contemplated under a single assignment. The contract defined the limits of O'Reilly's operations as follows:

"The said Henry O'Reilly undertakes on his part, and at his own expense, to use his best endeavors to raise capital for the construction of a line of Morse's Electro-Magnetic Telegraph to connect the great seaboard line at Philadelphia, or at such other convenient point on said line as may approach nearer to Harrisburg, in Pennsylvania, and from thence through Harrisburg and other intermediate towns to Pittsburg, and thence through Wheeling and Cincinnati, and such other towns and cities as the said O'Reilly and his associates may elect, to St. Louis, and also to the principal towns on the lakes."

In entering into this arrangement Mr. Kendall had in view, as he asserted, a large and dominating western management, which, by its control of the great channels of between the east arid west as well as south, would of necessity become immensely valuable. This interpretation is expressed by two words only, "a line," which are placed in italics to note them. Its great connecting points with other organizations were to be Philadelphia, Louisville, St. Louis, Chicago, and Erie, Pa. The contract gave O'Reilly no powers of organization. These were to be vested in trustees. If Mr. Kendall is to be believed, the value of the contract made with O'Reilly had its chief value in securing over this whole region a single and undivided ownership and control.

It was a wise purpose. Unfortunately, however, for him, and unfortunately for his principals, this chief feature of the contract, and underlying its value, had no adequate expression in the contract such as its important character demanded. This seems to have been left as its natural and necessary outgrowth. Under such an expectation the contract was an expression of great confidence in O'Reilly, and which was a confidence sincerely entertained. Yet it was a trust which had no justification as an act of business.

Henry O'Reilly had previous to this time been Postmaster at Rochester, N. Y.-- Mr. Kendall being Postmaster-General. In connection with that office, he had voluntarily become the active agent of the Post-Office Department, in the pursuit and punishment of mail robbers in Western New York. He was indefatigable, carried on an enormous correspondence, was successful in his pursuit of offenders, and gave reputation to the Department. Mr. Kendall saw in all these things the proofs of a man suited to the trust he now reposed in him.

Henry O'Reilly was in many respects a wonderful man. His tastes were cultivated. His instincts were fine. He was intelligent and genial. His energy was untiring, his hopefulness shining. His mental activity and power of continuous labor were marvelous. He was liberal, generous, profuse, full of the best instincts of his nation. But he lacked prudence in money matters, was loose in the use of it, had little veneration for contracts, was more anxious for personal fame than wealth. He formed and broke friendships with equal rapidity, was bitter in his hates, was impatient of restraint. My personal attachment to him was great and sincere. We were friends for many years, until he became the agent of F. O. J. Smith, and my duties threw me in collision with him.

The contract further stipulated that

"When the said O'Reilly shall have procured a fund sufficient to build a line of one wire from the connecting point aforesaid (i. e., the seaboard) to Harrisburg, or any points further west, to convey the patent right to said line so covered by capital in trust for themselves and the said O'Reilly and his associates, on the terms and conditions set forth in the Articles of Agreement and Association constituting the Magnetic Telegraph Company, and providing for the government thereof, with the following alterations, viz.: The amount of stock or other interest in the lines to be constructed reserved to the grantors and assigns shall be one-fourth part only, and not one-half of the whole, on so much capital as shall be required to construct a line of two wires.

No preference to be given to the party of the first part in the construction of connecting lines, nor shall any thing herein be construed to prevent an extension by the patentees of a line from Buffalo to connect with the lake towns at Erie; nor to prevent the construction of a line from New Orleans to connect the western towns directly with that city; but such lines shall not be used to connect any western cities or towns with each other which may have been already connected by said O'Reilly.

"Unless the line from the point of connection with the seaboard route shall be constructed within six months from date to Harrisburg, and capital provided for its extension to Pittsburg within said time, then this agreement, and any conveyance in trust that may have been made in pursuance thereof, shall be null and void thereafter, unless it shall satisfactorily appear that unforeseen difficulties are experienced in obtaining the right of way along the public works, and in that event the conditional annulment shall take effect at the end of six months after such permission shall be given or refused.

"And the party of the second part shall convey said patent right on any line beyond Pittsburg to any point of commercial magnitude, when the necessary capital for the construction of the same shall have been subscribed, within the period contemplated by this agreement."

Such, omitting a few unimportant sentences, was the O'Reilly contract, which was destined to become the root of a powerful and dangerous opposition to the Morse patent, and which never yielded a dollar to the patentees until many years thereafter, when a purse was made up by various companies interested in stopping litigation, and which was paid to F. O. J. Smith, one of the owners of the patent, to extinguish forever this and all outlying patent claims.

It will be readily granted, notwithstanding Mr. Kendall's claim, that there is nothing expressed in the language of the contract to prevent, but rather to encourage, the idea of sectional organizations, as the construction of the lines reached points of commercial importance. One feature of the contract is extraordinary. It virtually gave the right to the patentees to sell the same territory over again for lines to carry the business created for or from territory outside the O'Reilly limits.

The New Orleans and Ohio Company was organized, Mr. Kendall averred, on this right. Mr. Kendall's plan is related by himself thus:

"This range was intended to be embraced in one company, in which the patent right should constitute one-fourth of the stock. The design was to bring over this line all the telegraphic correspondence between Philadelphia and points east on the one hand, and the entire western country from Erie, Pa., to an indefinite point on the lower Mississippi, on the other."

There can be little doubt that Mr. Kendall's plan was the only true policy to secure value to telegraphic property. Why it was suppressed in the contract is not clear, and throws a doubt as to its being then a matured thought. There is no evidence to show that Mr. Kendall, by letter or by conversation, impressed Mr. O'Reilly with this project of a single company, so as to indicate it as a dominating idea in the work before him.

Immediately on the execution of his contract Mr. O'Reilly went to Rochester, N. Y., where he had long resided and where he was held in high esteem. He at once called together a few leading citizens, who promptly provided money to build forty miles of an initial line from Lancaster to Harrisburg, Pa. The members of this original compact, called the Atlantic Lake and Mississippi Valley Telegraph Company, were Jonathan Childs, Samuel L. Selden, Henry R. Selden, Elisha D. Ely, Hugh T. Brooks, Micah Brooks, John S. Skinner, Hervey Ely, Alvah Strong and George Dawson, all well-known and influential men. Henry R. Selden was made President, George Dawson, Treasurer, and Henry O'Reilly, Secretary. At O'Reilly's request also, James D. Reid, who had been his post-office assistant, and who was then serving with Anson Stager in the office of the Rochester Daily Democrat, the first as book-keeper and the latter as "devil," joined him early in September, of the same year, to aid him in organizing his work.

The building was commenced at Lancaster, Pa., in September, 1845. The builders were Capt. John O'Reilly and Bernard O'Connor. They had no experience, and were without instructions, except of the most indefinite character.

The line was built along the route of the Lancaster and Harrisburg Railroad, the officers of which were very courteous and friendly. The poles erected were small and had pins resembling chair rungs inserted through an augur hole near the top to bear the wires, which were to be wrapped round either end, and for which purpose a shallow groove had been worked near either extremity. 

If there is beauty in simplicity, it was surely here. As to insulation, it was a long word few of us understood. Vail's pamphlet, however, came to our relief, and it was faithfully studied. In it we were directed to dip cotton cloth in bees wax, as a method of securing good insulation. That seemed a simple and easy process, to which we were quite equal. David Brooks, a relative of Mr. O'Reilly, being keen at a trade, was delegated to purchase a supply of bees wax, and to contract for cotton cloth. He superintended also the melting process, and so imbibed his first lesson in insulation. 

From bees wax to paraffine was not a difficult ascent. The rags were cut up by Henry Hepburne, a young fellow from Rochester, now a Wall street broker, but who didn't take to the business much, and who made himself useful chiefly, in making sport with Brooks' wax-pot. It was a merry party. Henry O'Reilly wrote letters and smiled benignantly on the proceedings. Professor Silliman could not have expressed more quiet delight over the scientific aspect of things, than did O'Reilly with his round, rosy face. The room, however, with the waxed rags laying round to dry, looked much like a hospital in preparation for a wounded host.

The wires were No. 14 unannealed copper. They were ordered to be drawn up tight. The idea seemed to prevail that the curving of the wire might affect the destination of messages, and that there was safety only in their being pulled up so as to present a straight line. The notion at least seemed sensible, and all the wiremen of the party stroked their chins over it. So wrapping the waxed cloths around the grooved pins the wires were embedded in the grooves and strung tight from pole to pole. The line looked very trim and handsome, as in the evening of a fine October day we looked at our first day's work. We noticed that some enterprising bees, not yet frightened by the gentle frosts of the October nights, came to our waxed rags, no doubt to replevin on their lost stores. But their opportunity was brief, a heavy rain and a sharp frost soon left our cotton insulation fluttering in the air, and bees wax and cotton soon disappeared.

It was while this line was in progress that our first lesson in atmospheric electricity and earth currents was learned. We had seated ourselves on the bank by the side of the railroad to eat our noon meal. The wire hung from a pole near us, with the end reaching to about five feet from the ground. just then a bull calf, with an investigating turn of mind, walked up the bank and sniffed around the pole. Finally seeing the dangling wire, and possessed with a desire for knowledge, it reached up its nose and putting out its tongue licked the wire. It had no sooner done so than, with a prodigious baa and tail uplifted high, it leaped over our dinner dishes, cavorted over the fence into an adjacent field, from between the bars of which it gazed back in grieved wonder at the source of its alarm. We discussed the subject over our milk, and began to see. We got so far advanced, indeed, that on the instruments being set up at Harrisburg, some of us succeeded in sending a message by means of a wire dipped into the water of the canal, forming by short and long plunges the Morse signs. It was thought a wonderful feat, and certainly indicated progress.

On Thanksgiving day, November 24th, the line was finished from Lancaster to Harrisburg, forty miles. We had two excellent registers sent us by Mr. Vail. The magnets came from Mr. Ezra Cornell. They had eight coils, and from their peculiar construction and action, were called the wind-mill magnets. These magnets were strong and sensitive, with armatures at each end of two long levers, crossed diagonally. But the mechanical arrangement of the parts and defective construction prevented easy adjustment. The cores also were not thoroughly annealed, and with a stiff battery on, the armatures stuck. These magnets were accompanied by a paper for signature, recognizing them as an improvement, which O'Reilly refused to sign. Just then, also, a storm came on, the weather became severe, deep snow fell, and our tight drawn copper wire broke in a hundred places. Away out on the line, therefore, we had to travel, many a long weary mile.

We could not afford a conveyance. We were all poor. As we came home at night, sore and lame with fatigue, only to renew the same tedious work in the morning, the glory of the enterprise became visibly dim. Between the effect of this storm and trouble with the magnets, the offices were soon closed, and were not re-opened until January 6, 1846. Meantime I spent December with Mr. Vail at Philadelphia.

The six months named in the contract had expired December 13th. One link of forty miles, connecting two interior towns only, had been completed. Seventy miles yet lay between Lancaster and the seaboard. F. O. J. Smith claimed the contract as forfeited, but no official or other notice of the claim was served. Mr. Kendall also held that the subscription for the line to Pittsburg had not been filled as the contract required. Yet O'Reilly had done the best he could, and no man could have been more earnestly industrious.

On opening the offices again, we had received two large magnets from Washington, constructed by Mr. Charles T. Smith. The coils were of No. 16 copper wire, cotton covered and saturated with gum shellac, the whole magnet weighing about seventy-five pounds. They were similar to those first used in Philadelphia. We were now very anxious to get to work, for the money was all gone. So we arranged every thing with great care, had our Grove battery steaming up splendidly, and hoped for success. During December, the wires had been slackened, and we congratulated ourselves that the winter of our discontent was past.

But the line did not at once respond. We could hear the big iron cores throb with the effort to speak to us. It was sometime, however, before we got the wiggle of the thing; at last, however, after much careful adjusting, it came and we were happy. I had learned the Morse idiom by dint of tapping out the alphabet, day and night, with my finger-ends on tables, on car windows and my bedpost, having had no other means of learning. No schools for plugs had yet been opened. I had practiced so earnestly on my imaginary line that the "correspondent," as Prof Morse happily called his key, came quite readily to me, and I was delighted to find I could manipulate a message. And now we sighed for business. Our board bills were waxing large.

We needed material aid. So when the first visitor came in, looking cautiously before him, we felt that the age of gold had come. How kindly he was received, no tongue can tell. Others followed to whom we delivered learned lectures on electricity and made a good deal of the word "polarity," which sounded euphonious and inspired evident respect. But nobody proposed to send a message. Seeing this, and our needs being great, we proposed to do as they had done at Washington, send the names of visitors to and fro for six cents a piece, the letters to be "punched in the presence of the passengaire." Of this we did a small business, just enough to procure the material for a taffy-pull in the evening, which was the diversion of the time, when, after the day's anxieties, we met in the parlor of our boarding place. Yet we laid down our weary heads in hope.

It was two or three days before anyone offered to send a message. No one seemed willing to be the first fool. At last a brave burgher offered a message for Lancaster, for which he paid a silver quarter. How beautiful it looked only the hungry soul can tell. Happily it brought a quick reply. This elevated our feathers. The fame thereof quickly spread. Good old Governor Shunk and his family came down to see us, and who kindly wished us all manner of success. But just as it seemed to be coming, another storm desolated the line. The breaks, were many. It was a pitiful sight to see us straggling out again through the deep snow, crawling home at midnight, worn and sore, to our welcome beds. We braved all this awhile, but it was no use. Bravery would not pay bills. So, after a time, it was determined to take down the copper wire. This was done, and the wire sold. Our debts were paid. The line was not opened again until September, 1846, when, having been extended to Philadelphia, along the route of the Columbia or State Railroad, and supplied with an iron wire composed of three strands, made by Hugh Downing, of Philadelphia, the offices were opened for business. By this time, also, we had learned something of the secret of insulation; glass blocks were introduced to bear the wires, and the golden era at last seemed to have arrived.

Meanwhile, O'Reilly spent much of his time at Philadelphia, endeavoring to awake an interest in telegraph matters. He was successful in this.

He took the contract for building the Magnetic Telegraph Company's line to Baltimore from Philadelphia. He also secured several valuable subscriptions in Philadelphia for the line West, which was now pushed forward toward Pittsburg. William McKee, an aged merchant, but active, intelligent and enterprizing, was among the first to subscribe, and when his name went down for $5,000, light broke rapidly, and others speedily followed his example. The days of poverty were ended. At Pittsburg the scheme was received with much favor. Joshua Hanna, a man of influence and energy, first welcomed Mr. O'Reilly, and became his agent. Through him numerous valuable subscriptions were obtained, one of the first being from Gen. J. K. Moorhead, and thus abundant means were provided to complete the line to the iron city. The route selected was via the railroad through Carlisle to Chambersburg, and thence by the stage road through Bloody Run and Bedford to Pittsburg.

And now things, were pushed with so much vigor that, on December 29, 1846, the line was opened from Philadelphia to Pittsburg for business. The insulation was chiefly with square blocks of glass, flanged at either end and grooved to receive the wire. The upper edge of the groove was oblique, so as to retain the wire when once entered. A wooden roof covered the glass. The conductor was of three-ply No. 16 iron wire. This was, after some years, discarded for single No. 9. Our knowledge of many things came to us by bitter experience. The twisted wire added to the griefs of these early days. The method of plaiting or cording left a wild twist in it, so that when the wire broke, as it sometimes did, it would curl up wildly and become entangled in the wheels of passing trains; sometimes a car top would show where the wire had sawed its way in, while an involuntary shudder would pass over us as we imagined that car top to represent a neck. But there was much gallantry in the service then, and all the engineers were our friends. We often went out together on a midnight train with lanterns to hunt breaks, to sleep afterward on the banks of a railroad cut, and be at work early in the morning, reaching the city at break of day, on coal trains.

The staff of the line was, in 1847, as follows: 
Pittsburg--David Brooks, Manager; Isaac Livingston, Anson Stager. 
Bedford--Rufus Chadwick. 
Chambersburg--Ira Amsden. 
Carlisle--Donald Mann. 
Lancaster--H. E. Reddish, W. Johnston. 
Harrisburg--C. T. Smith. 
Philadelphia--James, D. Reid, Superintendent; James M. Lindsey, Manager; W. W. Downing, C. T. Miller.

Gen. Stager entered the service in October, 1846, and served at Lancaster and Chambersburg before going to, Pittsburg. When the office was opened in Pittsburg great crowds flocked to it. A low partition separated the multitude from the operating table. Mr. Brooks was the object of special wonder as he patiently explained the mechanism, and the meaning of the sounds. A long-legged hoosier, who had gazed at the "crittur" for some time, at last determined to turn his chance to practical account. So stepping over the barrier he walked rapidly up to the register, and placing his mouth very near the instrument, said in a kind of confidential and yet anxious voice, "I say, mister, can you tell me the price o' corn?"

The management of the line, on its acceptance from the contractor, was arranged as follows. It is given as a part of history, and to show the honor with which the interests of the patentees were guarded:

At a meeting of stockholders, held at the American Hotel, Philadelphia, March 1, 1847, on motion of Hon. Samuel L. Selden, of Rochester, N. Y.,

"Resolved, That, until permanent and satisfactory arrangements can be made for conducting the business of the line of telegraph between Philadelphia and Pittsburg, now surrendered to the company by Mr. O'Reilly, the constructor of said line, the same be placed under the management of James D. Reid as superintendent thereof, as far as compatible with his duties to the Seaboard lines, said superintendent to have instructions to employ, with the concurrence of the president and secretary of the company, such telegraphers, clerks and other assistants as may be required for the advantageous and profitable working of the line; to deposit all moneys received with the treasurer of the company, first paying out of the earnings of the line all necessary expenses; to keep an accurate account of all receipts and expenditures, and to reserve, in the hands of the treasurer, one-fourth of the avails over and above the expenses, for the use of the patent or invention which may be used upon such line, the residue to be kept for division among the other persons interested, in proportion to their respective interests in said line, said superintendent reporting weekly, at least, to the president the principal facts in the operation of the line, and having his books open for the inspection of the stockholders at all proper hours."

Hugh Downing, Esq., was made provisional president. The treasurership was offered to John B. Trevor, Esq., but was declined as incompatible with his duties as cashier of the Philadelphia Bank. It was given to William M'Kee, Esq., a venerable citizen of Philadelphia, a man juicy with humor, full of enterprise, shrewd, generous and just.

It is but justice to Mr. O'Reilly to say that he demanded an inspection of the line, and offered to remedy every defect. No one was willing to adjudge his work. It was a time of generosity. No claim was ever made for defective service. Yet, within a few years, the whole line had to be rebuilt, and that portion of it between Philadelphia and Harrisburg as early as the fall of 1849. That was more or less true of all early telegraphic structures.