The article misses quite a bit of the real story. Codes came to telegraphy both for reasons of privacy and for reasons of economy. The story in the US is abou

The article misses quite a bit of the real story. Codes came to telegraphy both for reasons of privacy and for reasons of economy. The story in the US is about like this: The price of a telegraph message was based on the number of words, mostly a certain number of cents per word. For businesses that communicated regularly with a regular set of sales and purchasing agents (either traveling or fixed) in remote cities, the telegraph expense was sufficient for them to adopt communication by code words that could shorten their messages considerably. Two implications of this were obvious. First, the telegraph customers realized that because they were encoding and decoding their messages anyway, they could obtain privacy with little extra expense by going to 100% ciphered messages and securing their codebooks. Second, the telegraph companies realized that they were losing revenues and worked out a new rate structure for coded messages. The use of 5-letter groups as code words developed in this period because the telegraph companies figured that a word was (on average) five letters, and they did not want to would lose revenue if they charged per word for messages with longer code words. The hackers still found ways to hack the system. For example, before the age of government-issued IDs, a stranger (from out of town) could go into a telegraph office and send a telegram over the signature of any other similarly unknown out-of-towner.