In the mid-nineteenth century, electric telegraphy developed both in America and in Europe. It was in 1844 that commercial telegraphy with a Morse system started in America. In July 1866 (Wikipedia), trans-Atlantic cable telegraphy came into operation. The new technology posed an awkward problem when sending the first encrypted cable message with the diplomatic code that had been used by the US Department of State for many decades and finally caused its replacement.
The end of the Civil War (1861-1865) allowed the United States to pay attention to the French military presence in Mexico, which was under Emperor Maximilian set up by Napoleon III in 1864. In 1866, the United States requested withdrawal of the French troops from Mexico and obtained an agreement from Napoleon III.
However, William Seward, Secretary of State, received a despatch dated 8 November 1866 from John Bigelow, minister in France, to the effect that Napoleon III was postponing the agreed evacuation plan. Napoleon III explained to the American minister that the decision was simply based on military considerations that reduction of forces in stages might put those remaining behind in a perilous situation. He made the point that the telegraph instructions to Mexico were not sent in cipher to show that there was nothing in his plans to disguise and that any misunderstanding between France and America might be readily rectified by means of telegraphy.
The diplomatic code then used by the Department of State was the Monroe Cipher (WE028; THE=1385), which assigns numbers 1-1600 to letters, syllables, and words. This was a code which James Monroe was given when he was sent to France in 1803. With the amount of code in diplomatic exchanges diminished after the Napoleonic turmoil in Europe, it was used almost exclusively by American foreign ministers after 1814 (see another article). Apparently, it was kept in embassies even during more than fifteen years of disuse since 1848. Thus, it was at hand when a diplomatic problem arose in 1866.
Use of the Monroe Cipher was against cryptographic common sense both in its longevity and common usage among legations. When praising the inauguration of the Atlantic cable, Bigelow advised Seward to develop a new cipher and even suggested different ciphers for various legations overseas. It was not that Bigelow was aware of the partial reconstruction of the Monroe Cipher by the British Deciphering Branch in 1841 (see another article) but he was concerned that copies were taken from the State Department archives by "traitors to the government" working in the late Buchanan administration. However, Seward not only dismissed Bigelow's concern but declared that the Monroe Cipher was believed to be the "most inscrutable ever invented". According to Seward, Bigelow was not the only person to advise replacement of the Department code and the State Department under successive secretaries of state rejected the offer of five or six new ciphers each year. (Weber1993 p.122)
Atlantic cable was by no means affordable. From any telegraph station in America to any in Great Britain, the first twenty words or less , counting the address of sender and receiver, were sent for 20 pounds (100 dollars) in gold and the letters of the additional words after the first twenty cost 1 pound (5 dollars) per five letters (i.e., $5 per word, counting five-letter groups after the first twenty words as words). To any station in Europe, the charge was 21 pounds for the first twenty words or less and 21 shillings (1.05 pounds) for every five letters or fraction. What was particularly significant in sending a message encoded with the Monroe Cipher is that all numerals must be written and charged as words. Further, a double rate was put on messages in cipher (i.e., secret writing). (TransAtlantic Telegraph Companies; Utica Morning Herald, 3 August 1866; Weber1993 p.124)
(At the time, the nominal price of first-class transportation between Europe and North America was on the order of $100 ("Passenger Fares for Overseas Travel in the 19th and 20th Centuries", PDF). In 1844, a Webster dictionary at 15 dollars was considered too expensive (Wikipedia).)
When one thinks of a submarine cable running on the floor of the Atlantic in the Victorian age, the high rate may not be so exorbitant as it might seem at first. But a newspaper questioned "whether a cheaper rate might not be more profitable." (Utica Morning Herald, 3 August 1866)
At first, the Department of State did not use the cable because, as Seward said to one of the directors of the cable company, it was too costly and "the Government of the United States was not rich enough to use the telegraph." (Weber1993 p.124) The conversation left Seward an impression that the directors, coveting government endorsement for publicity, promised that the charges should not be excessive (Weber1993 p.125 ff., Haswell p.89).
In a few months, the cable company reduced the cable charges by fifty percent (i.e., $2.5 per word and $5 per word for cipher), effective on 1 November 1866 (Weber1993 p.125), which brought Seward to send a brief message (not ciphered) to Bigelow of 10 November by cable. This was the first State Department cable.
The day after (Weber1993 p.129) Bigelow's despatch of 8 November arrived, Seward sent a long message, dated 23 November 1866, encoded with the Monroe Cipher, telling Bigelow to urge France to stick to the agreed plan. This was the first encoded American diplomatic despatch to be sent by cable.
While the message in plaintext was 780 words in length, the encoded message included more than 1200 code numbers because the limited vocabulary caused many words to be expressed with several code numbers representing syllables (see specimens of encoding below). Furthermore, although the Morse code had provisions for digits, the cable company required that all numerals must be written and charged as words. This inflated the message into 3722 words for transmission (Weber1993 p.131). The task of spelling out the figures in the encoded message received from the Department of State was performed by a telegrapher (Weber1993 p.129), which caused errors such as transcribing "1424" as "fourteen twenty six" (Weber1993 p.131).
It began as follows (plaintext supplied):
It took six hours for transmission, including repeating it back for confirmation (Weber1993 p.129). This translates to 10 words per minute (or 20 words per minute, if words repeated back are counted separately). (The speed had been assumed to be five words a minute but experience was showing fifteen words per minute was possible (Weber1993 p.126).)
When John H. Haswell, then a temporary clerk of age 25 (Weber1993 p.191), was told to put the message in cipher, he pointed out the great expense of cable transmission (Haswell p.89) but the Secretary of State gave the go-ahead, believing in the promise he thought he had from the directors (Weber1993 p.125 ff.).
As it turned out, the cable charge was an enormous $19,540.50 for this single message (Weber1993 p.132, 139). This appears to correspond to (3722 words) times (2.5 dollars per word, the new rate applicable on and after 1 November) times 2 (double rate for cipher) times 1.05 (premium for continental Europe). This breakdown seems to indicate that words were counted on their own rather than per five-letter group as specified in the original tariff. (Weber says the fees based on five characters per word was one of the several systems tried (Weber1993 p.142 n.13).)
The enormity of the cost is obvious when the figure is compared with domestic telegraph bills, which were $73.79 for September, $76.34 for October, and $46.94 for November (Weber1993 p.132). The first plaintext cable of 10 November cost $60.37 (Weber1993 p.139) (the breakdown probably being 23 words * $2.5 per word * 1.05 premium).
Unaware of the amounting bills, Seward sent two more cables in code by the end of November: one for the minster in London, costing $1400 (280 words * $2.5 per word * 2 for cipher) and another for Bigelow, costing $3995.25 (761 words * $2.5 per word * 2 for cipher * 1.05 premium). The cable bill for November amounted to $24,996.13, which equals the yearly salary of the President of the United States and three times more than that of Seward (Weber1993 p.139, 132-133). By comparison, the salary of Haswell as a temporary clerk was $1200 and that when appointed chief of the Bureau of Indexes and Archives in 1873 was $2400 (Weber1993 p.191, 192).
Embarrassed Seward proposed an initial payment of between $5000 and $6000 based on the number of words before encoding. But the cable company (the New York, Newfoundland and London Telegraph Company) could not accept the compromise because it had already paid to the other companies their shares (Weber1993 p.133, p.146 n.71, 136, 137 ). Seeing his proposal was not accepted, Seward refused to pay the bill at all.
Naturally, the lengthy despatch in code attracted interest in the diplomatic circle in France. Bigelow was asked about the message by various people but remained silent. The New York Herald was informed of the message by a telegram from London.
Why did the message have to be encoded and so long at that? The very use of cable required use of code for a sensitive message because telegrams had to be handled by telegraph operators on both sides of the Atlantic. (Although the Black Chamber had been abolished in France in 1848 (Kahn p.188), it was considered as a matter of fact that "nothing goes over a French telegraph wire, that is not transmitted to the Ministry of the Interior [of France]" (Weber1993 p.122; see also p.215, 208).) And indeed sensitive was the message, which implied US military intervention couched in a diplomatic request of observance of the agreed evacuation (Papers Relating to Mexico p.15; Haswell p.89). And it was long because Seward left no word out for cost saving so that Bigelow could read the sensitive message, approved by President Johnson, in its entirety to Napoleon III (Weber1993 p129).
Contrary to Seward's (unexpressed) intention, the cable message was not read to the Emperor of France (Weber1993 p.130). Still Bigelow drew reassuring remarks from the French officials.
In response to Seward's message, Bigelow cabled an explanation of the French Foreign Minister on 3 December, again in the Monroe Cipher. .
The first and last portions of the received telegram are as follows (plaintext supplied).
The French Foreign Minister explained that the resolution of the French government was not changed but from military consideration, it was better to withdraw the whole army at once rather than in three stages and promised the withdrawal by March the next year.
A few days later, on 7 December, the New York Herald published the documents Seward submitted to the Senate Committee on Foreign Relations, including the 23 November message which was supposed to be secret! (Weber1993 p.130) Bigelow later recollected that the message was from the first more for reassuring the Congress about the government's position than for urging Bigelow to protest to the French government (Weber1993 p.121). Indeed, there was no ulterior motive on the part of the French and the same page of the New York Herald reported the reassuring cable of 3 December from Bigelow.
In the end, under circumstances difficult for the imperialists, the French commander Bazaine skillfully conducted embarkation from Mexico the next year (Wikipedia, Weber1993 p.134).
Indignant as he might have been, Seward could no longer do without cables. He continued to send cables in the following months, sometimes in code. That he had learned a lesson is apparent in the modest length of these messages. The department even paid the charges, albeit with a delay of many months. (Weber1993 p.139, 134)
When two cables in code to the minister in London in May 1867 added another cost of $7300, however, Seward told the ministers in London and Paris (Adams and Dix) to "use the cable no more in cipher or writing. It will not be used here." The cost of the two cables for these short instructions was $111.75 (Weber1993 p.135-136, 139). Indeed, there was no cable sent in June 1867. In July, Seward sent four cables to Adams but they all fit within the first twenty words and thus cost only $50 each (except for one in code that cost $100) (Weber1993 p.139).
A compromise was precluded by the fact that the cable company already made payments to the other companies. The attempt of the company (the New York, Newfoundland and London Telegraph Company) to negotiate with Atlantic Telegraph to get a refund was unsuccessful (Weber1993 p.137). Still, for future, the joint companies were ready to concede to the secretary's position of counting the words before encoding. When in late 1867 the initial charge was lowered one half to $25 for ten words, each word containing no more than five letters, the new tariff schedule stated "Government using a code shall pay for the number of words contained in the dispatch before it be translated into code, provided that the code be so constructed that not more than four letters or four numerals be used to constitute a word." Further, a distinction was made between cipher and code and it was stipulated that messages in code carried no extra charges, while ciphers were to be charged $25 for the first ten letters. (Weber1993 p.137)
Although the rates were lowered, existing bills remained and the secretary was adamant in refusing to pay.
When Seward's successor, Hamilton Fish, maintained Seward's position, the cable company brought the matter to court and the court decision (26 May 1871) approved the amount claimed by the company. A small consolation for the government was that payment in gold was not required (Weber1993 p.141). (A dollar in greenback relative to a dollar in gold was about 0.7 in November 1866 but about 0.9 in May 1871 (Mitchell (1908), Gold, Prices, And Wages under the Greenback Standard, Internet Archive, p.302, 316, cited by Weber1993 p.142, 148).) At last, the government made the full payment on 28 August 1871 (Weber1992 p.108).
Right after learning of the enormous cable bill of November 1866, Seward realized it was inevitable to prepare a new economical cipher (Weber1993 p.133). The pre-telegraphic age code proved to be unsuitable for cable transmission. A new code (WE029, to be described in a separate article), designed to economize in view of the cable cost, started to be used in August 1867.
The verdict given to the Monroe Cipher in the Explanatory Remarks of the new code was: it was "quite inconvenient for correspondence by magnetic telegraph. The trouble and expense of messages by that medium are in proportion to the number of letters which they contain. If, therefore, a message in cypher be expressed by numbers, many of which are often used to signify a single letter, as the numerical signs cannot themselves be transmitted, they must be expressed in words, so that sometimes from fifteen to twenty letters, which form such words, are necessary to express a single letter of the cypher."
Ralph E. Weber (1979), United States Diplomatic Codes and Ciphers, 1775-1938
Ralph E. Weber (1992), "America's First Encrypted Cable", Studies in Intelligence Vol. 36 No. 5 (PDF); this supersedes the description of the topic in Weber (1979).
Ralph E. Weber (1993), "Masked Dispatches: Cryptograms and Cryptology in American History, 1775-1900" (PDF, accessed in July 2013; as of March 2014, it is updated to a 2013 "third edition"); Chapter 17 is a much expanded version of Weber (1992); cited as "Weber1993" here.
Papers relating to Mexico (1866) (Internet Archive)
John H. Haswell (1912), "Secret Writing", The Century Illustrated Monthly Magazine, p.83 (Internet Archive) (The article appeared in the November 1912 issue (Weber1993 p.143, n.36).)
Old Fulton NY Post Cards ... Stores old news papers in New York, including New York Herald. Go to "FAQ HELP INDEX" and click on "here" to find the index.
History of the Atlantic Cable & Undersea Communications ... This page mentions cable rates and this page mentions the relation between the Anglo-American Telegraph Company and the Atlantic Telegraph Company, separately mentioned in Weber1993.