The bubbles that built America

After Samuel Morse first showed Congress how he could send information via wires in the early 1840s, the nation caught telegraph fever. Between 1846 and 1852, the number of telegraph miles in the United States rose more than ten-fold, from 2,000 to 23,000.

But many of the lines were redundant - by 1849, three telegraphs vied for the tiny amount of traffic between Boston and New York. And many others were plagued by floods, weather, and poor connectivity. The combination of excess capacity, brutal competition and technological kinks led most of the start-up telegraph companies to fail.

But the country wound up with a new communications infrastructure that created a national market in information. The rapid spread of cheap telegraph set other key innovations into motion: the creation of the Associated Press, the ability to send money via wire through Western Union, and the real-time transmission of stock data.