I thought that, for the most part, the telegraph systems described above were to reduce cable charges (1 code word instead of a 15-word sentence, a huge savings in those days).
Was one use however I seem to recall citations dating back to Niccolo Polo reguarding the use of trade codes & that was a while before the telegraph. If I were really curious, would also check out Reuters, Lloyds, Rothchilds, and the Borgias. Would not be surprised to find a reference in either/all "The Prince", "The Art of War", and the letters of Nathan Hale. However I suspect that Markoff really meant to be referring to mathematical algoritms such as the LOASDR. I suppose that only dates back to the diameters of stygi (sp ?) about the same time that passwords were first recorded (and changed daily). Warmly, Padgett ps if anyone has a spare LOASDR or CMSDR, I would be interested 8*).