Edison, His Life and Inventions, vol. 1

by Frank Lewis Dyer

  It has generally been supposed that Edison did not take up work on the stock ticker until after his arrival a little later in New York; but he says: ``After the vote-recorder I invented a stock ticker, and started a ticker service in Boston; had thirty or forty subscribers, and operated from a room over the Gold Exchange. This was about a year after Callahan started in New York.'' To say the least, this evidenced great ability and enterprise on the part of the youth. The dealings in gold during the Civil War and after its close had brought gold indicators into use, and these had soon been followed by ``stock tickers,'' the first of which was introduced in New York in 1867. The success of this new but still primitively crude class of apparatus was immediate. Four manufacturers were soon busy trying to keep pace with the demands for it from brokers; and the Gold & Stock Telegraph Company formed to exploit the system soon increased its capital from $200,000 to $300,000, paying 12 per cent. dividends on the latter amount. Within its first year the capital was again increased to $1,000,000, and dividends of 10 per cent. were paid easily on that sum also. It is needless to say that such facts became quickly known among the operators, from whose ranks, of course, the new employees were enlisted; and it was a common ambition among the more ingenious to produce a new ticker. From the beginning, each phase of electrical development--indeed, each step in mechanics--has been accompanied by the well-known phenomenon of invention; namely, the attempt of the many to perfect and refine and even re-invent where one or two daring spirits have led the way. The figures of capitalization and profit just mentioned were relatively much larger in the sixties than they are to-day; and to impressionable young operators they spelled illimitable wealth. Edison was, how ever, about the only one in Boston of whom history makes record as achieving any tangible result in this new art; and he soon longed for the larger telegraphic opportunity of New York. His friend, Milt Adams, went West with quenchless zest for that kind of roving life and aimless adventure of which the serious minded Edison had already had more than enough. Realizing that to New York he must look for further support in his efforts, Edison, deep in debt for his embryonic inventions, but with high hope and courage, now made the next momentous step in his career. He was far riper in experience and practice of his art than any other telegrapher of his age, and had acquired, moreover, no little knowledge of the practical business of life. Note has been made above of his invention of a stock ticker in Boston, and of his establishing a stock-quotation circuit. This was by no means all, and as a fitting close to this chapter he may be quoted as to some other work and its perils in experimentation: ``I also engaged in putting up private lines, upon which I used an alphabetical dial instrument for telegraphing between business establishments, a forerunner of modern telephony. This instrument was very simple and practical, and any one could work it after a few minutes' explanation. I had these instruments made at Mr. Hamblet's, who had a little shop where he was engaged in experimenting with electric clocks. Mr. Hamblet was the father and introducer in after years of the Western Union Telegraph system of time distribution. My laboratory was the headquarters for the men, and also of tools and supplies for those private lines. They were put up cheaply, as I used the roofs of houses, just as the Western Union did. It never occurred to me to ask permission from the owners; all we did was to go to the store, etc., say we were telegraph men, and wanted to go up to the wires on the roof; and permission was always granted.

  ``In this laboratory I had a large induction coil which I had borrowed to make some experiments with. One day I got hold of both electrodes of the coil, and it clinched my hand on them so that I couldn't let go. The battery was on a shelf. The only way I could get free was to back off and pull the coil, so that the battery wires would pull the cells off the shelf and thus break the circuit. I shut my eyes and pulled, but the nitric acid splashed all over my face and ran down my back. I rushed to a sink, which was only half big enough, and got in as well as I could and wiggled around for several minutes to permit the water to dilute the acid and stop the pain. My face and back were streaked with yellow; the skin was thoroughly oxidized. I did not go on the street by daylight for two weeks, as the appearance of my face was dreadful. The skin, however, peeled off, and new skin replaced it without any damage.''

  [6.1] The general scheme of a fire-alarm telegraph system embodies a central office to which notice can be sent from any number of signal boxes of the outbreak of a fire in the district covered by the box, the central office in turn calling out the nearest fire engines, and warning the fire department in general of the occurrence. Such fire alarms can be exchanged automatically, or by operators, and are sometimes associated with a large fire-alarm bell or whistle. Some boxes can be operated by the passing public; others need special keys. The box mechanism is usually of the ratchet, step-by-step movement, familiar in district messenger call-boxes.

  CHAPTER VII

  THE STOCK TICKER

  ``THE letters and figures used in the language of the tape,'' said a well-known Boston stock speculator, ``are very few, but they spell ruin in ninety-nine million ways.'' It is not to be inferred, however, that the modern stock ticker has anything to do with the making or losing of fortunes. There were regular daily stock-market reports in London newspapers in 1825, and New York soon followed the example. As far back as 1692, Houghton issued in London a weekly review of financial and commercial transactions, upon which Macaulay based the lively narrative of stock speculation in the seventeenth century, given in his famous history. That which the ubiquitous stock ticker has done is to give instantaneity to the news of what the stock market is doing, so that at every minute, thousands of miles apart, brokers, investors, and gamblers may learn the exact conditions. The existence of such facilities is to be admired rather than deplored. News is vital to Wall Street, and there is no living man on whom the doings in Wall Street are without effect. The financial history of the United States and of the world, as shown by the prices of government bonds and general securities, has been told daily for forty years on these narrow strips of paper tape, of which thousands of miles are run yearly through the ``tickers'' of New York alone. It is true that the record of the chattering little machine, made in cabalistic abbreviations on the tape, can drive a man suddenly to the very verge of insanity with joy or despair; but if there be blame for that, it attaches to the American spirit of speculation and not to the ingenious mechanism which reads and registers the beating of the financial pulse.

  Edison came first to New York in 1868, with his early stock printer, which he tried unsuccessfully to sell. He went back to Boston, and quite undismayed got up a duplex telegraph. ``Toward the end of my stay in Boston,'' he says, ``I obtained a loan of money, amounting to $800, to build a peculiar kind of duplex telegraph for sending two messages over a single wire simultaneously. The apparatus was built, and I left the Western Union employ and went to Rochester, New York, to test the apparatus on the lines of the Atlantic & Pacific Telegraph between that city and New York. But the assistant at the other end could not be made to understand anything, notwithstanding I had written out a very minute description of just what to do. After trying for a week I gave it up and returned to New York with but a few cents in my pocket.'' Thus he who has never speculated in a stock in his life was destined to make the beginnings of his own fortune by providing for others the apparatus that should bring to the eye, all over a great city, the momentary fluctuations of stocks and bonds. No one could have been in direr poverty than he when the steamboat landed him in New York in 1869. He was in debt, and his few belongings in books and instruments had to be left behind. He was not far from starving. Mr. W. S. Mallory, an associate of many years, quotes directly from him on this point: ``Some years ago we had a business negotiation in New York which made it necessary for Mr. Edison and me to visit the city five or six times within a comparatively short period. It was our custom to leave Orange about 11 A.M., and on arrival in New York to get our lunch before keeping the appointments, which were usually made for two o'clock. Seve
ral of these lunches were had at Delmonico's, Sherry's, and other places of similar character, but one day, while en route, Mr. Edison said: `I have been to lunch with you several times; now to-day I am going to take you to lunch with me, and give you the finest lunch you ever had.' When we arrived in Hoboken, we took the downtown ferry across the Hudson, and when we arrived on the Manhattan side Mr. Edison led the way to Smith & McNell's, opposite Washington Market, and well known to old New Yorkers. We went inside and as soon as the waiter appeared Mr. Edison ordered apple dumplings and a cup of coffee for himself. He consumed his share of the lunch with the greatest possible pleasure. Then, as soon as he had finished, he went to the cigar counter and purchased cigars. As we walked to keep the appointment he gave me the following reminiscence: When he left Boston and decided to come to New York he had only money enough for the trip. After leaving the boat his first thought was of breakfast; but he was without money to obtain it. However, in passing a wholesale tea-house he saw a man tasting tea, so he went in and asked the `taster' if he might have some of the tea. This the man gave him, and thus he obtained his first breakfast in New York. He knew a telegraph operator here, and on him he depended for a loan to tide him over until such time as he should secure a position. During the day he succeeded in locating this operator, but found that he also was out of a job, and that the best he could do was to loan him one dollar, which he did. This small sum of money represented both food and lodging until such time as work could be obtained. Edison said that as the result of the time consumed and the exercise in walking while he found his friend, he was extremely hungry, and that he gave most serious consideration as to what he should buy in the way of food, and what particular kind of food would be most satisfying and filling. The result was that at Smith & McNell's he decided on apple dumplings and a cup of coffee, than which he never ate anything more appetizing. It was not long before he was at work and was able to live in a normal manner.''

  During the Civil War, with its enormous increase in the national debt and the volume of paper money, gold had gone to a high premium; and, as ever, by its fluctuations in price the value of all other commodities was determined. This led to the creation of a ``Gold Room'' in Wall Street, where the precious metal could be dealt in; while for dealings in stocks there also existed the ``Regular Board,'' the ``Open Board,'' and the ``Long Room.'' Devoted to one, but the leading object of speculation, the ``Gold Room'' was the very focus of all the financial and gambling activity of the time, and its quotations governed trade and commerce. At first notations in chalk on a blackboard sufficed, but seeing their inadequacy, Dr. S. S. Laws, vice-president and actual presiding officer of the Gold Exchange, devised and introduced what was popularly known as the ``gold indicator.'' This exhibited merely the prevailing price of gold; but as its quotations changed from instant to instant, it was in a most literal sense ``the cynosure of neighboring eyes.'' One indicator looked upon the Gold Room; the other opened toward the street. Within the exchange the face could easily be seen high up on the west wall of the room, and the machine was operated by Mr. Mersereau, the official registrar of the Gold Board.

  Doctor Laws, who afterward became President of the State University of Missouri, was an inventor of unusual ability and attainments. In his early youth he had earned his livelihood in a tool factory; and, apparently with his savings, he went to Princeton, where he studied electricity under no less a teacher than the famous Joseph Henry. At the outbreak of the war in 1861 he was president of one of the Presbyterian synodical colleges in the South, whose buildings passed into the hands of the Government. Going to Europe, he returned to New York in 1863, and, becoming interested with a relative in financial matters, his connection with the Gold Exchange soon followed, when it was organized. The indicating mechanism he now devised was electrical, controlled at central by two circuit-closing keys, and was a prototype of all the later and modern step-by-step printing telegraphs, upon which the distribution of financial news depends. The ``fraction'' drum of the indicator could be driven in either direction, known as the advance and retrograde movements, and was divided and marked in eighths. It geared into a ``unit'' drum, just as do speed-indicators and cyclometers. Four electrical pulsations were required to move the drum the distance between the fractions. The general operation was simple, and in normally active times the mechanism and the registrar were equal to all emergencies. But it is obvious that the record had to be carried away to the brokers' offices and other places by messengers; and the delay, confusion, and mistakes soon suggested to Doctor Laws the desirability of having a number of indicators at such scattered points, operated by a master transmitter, and dispensing with the regiments of noisy boys. He secured this privilege of distribution, and, resigning from the exchange, devoted his exclusive attention to the ``Gold Reporting Telegraph,'' which he patented, and for which, at the end of 1866, he had secured fifty subscribers. His indicators were small oblong boxes, in the front of which was a long slot, allowing the dials as they travelled past, inside, to show the numerals constituting the quotation; the dials or wheels being arranged in a row horizontally, overlapping each other, as in modern fare registers which are now seen on most trolley cars. It was not long before there were three hundred subscribers; but the very success of this device brought competition and improvement. Mr. E. A. Callahan, an ingenious printing-telegraph operator, saw that there were unexhausted possibilities in the idea, and his foresight and inventiveness made him the father of the ``ticker,'' in connection with which he was thus, like Laws, one of the first to grasp and exploit the underlying principle of the ``central station'' as a universal source of supply. The genesis of his invention Mr. Callahan has told in an interesting way: ``In 1867, on the site of the present Mills Building on Broad Street, opposite the Stock Exchange of today, was an old building which had been cut up to subserve the necessities of its occupants, all engaged in dealing in gold and stocks. It had one main entrance from the street to a hallway, from which entrance to the offices of two prominent broker firms was obtained. Each firm had its own army of boys, numbering from twelve to fifteen, whose duties were to ascertain the latest quotations from the different exchanges. Each boy devoted his attention to some particularly active stock. Pushing each other to get into these narrow quarters, yelling out the prices at the door, and pushing back for later ones, the hustle made this doorway to me a most undesirable refuge from an April shower. I was simply whirled into the street. I naturally thought that much of this noise and confusion might be dispensed with, and that the prices might be furnished through some system of telegraphy which would not require the employment of skilled operators. The conception of the stock ticker dates from this incident.''

  Mr. Callahan's first idea was to distribute gold quotations, and to this end he devised an ``indicator.'' It consisted of two dials mounted separately, each revolved by an electromagnet, so that the desired figures were brought to an aperture in the case enclosing the apparatus, as in the Laws system. Each shaft with its dial was provided with two ratchet wheels, one the reverse of the other. One was used in connection with the propelling lever, which was provided with a pawl to fit into the teeth of the reversed ratchet wheel on its forward movement. It was thus made impossible for either dial to go by momentum beyond its limit. Learning that Doctor Laws, with the skilful aid of F. L. Pope, was already active in the same direction, Mr. Callahan, with ready wit, transformed his indicator into a ``ticker'' that would make a printed record. The name of the ``ticker'' came through the casual remark of an observer to whom the noise was the most striking feature of the mechanism. Mr. Callahan removed the two dials, and, substituting type wheels, turned the movements face to face, so that each type wheel could imprint its characters upon a paper tape in two lines. Three wires stranded together ran from the central office to each instrument. Of these one furnished the current for the alphabet wheel, one for the figure wheel, and one for the mechanism that took care of the inking and printing on the tape. Callahan made the further innovat
ion of insulating his circuit wires, although the cost was then forty times as great as that of bare wire. It will be understood that electromagnets were the ticker's actuating agency. The ticker apparatus was placed under a neat glass shade and mounted on a shelf. Twenty-five instruments were energized from one circuit, and the quotations were supplied from a ``central'' at 18 New Street. The Gold & Stock Telegraph Company was promptly organized to supply to brokers the system, which was very rapidly adopted throughout the financial district of New York, at the southern tip of Manhattan Island. Quotations were transmitted by the Morse telegraph from the floor of the Stock Exchange to the ``central,'' and thence distributed to the subscribers. Success with the ``stock'' news system was instantaneous.