A History of Wall Street’s Stock Tickers

These machines sped up the communication of stock prices

4 October 2017

A version of this article appears on the Engineering and Technology History Wiki. It was written with assistance from the IEEE History Center, which is partially funded by donations to the IEEE Foundation.

In 1867 Edward A. Calahan, an engineer at the American Telegraph Co., invented a system using the telegraph that quickened the pace at which stock prices flowed. Previously, the information was carried by mail or messenger. The telegraph’s distinct sound eventually earned it the name stock ticker.

A few years later Thomas Edison devised an improved stock ticker, which was one of his first inventions. His early years as a telegraph operator had given him an intimate knowledge of the device’s inner workings. By 1869, when he moved from Boston to New York City, the printing telegraph developed by Calahan had already been adopted by the New York Stock Exchange.

Edison eventually went to work for the company that owned the patents to the machine, Gold and Stock Telegraph, which became a subsidiary of Western Union. He soon struck out on his own, inventing several improved versions of the machine, which printed abbreviated company names as alphabetic symbols followed by numeric stock transaction prices and volume. An operator typed in stock information on a keyboard and the information was sent down the telegraph line. Each ticker on the line printed the information on a long, narrow strip of paper.

By 1871 he had incorporated his best designs into what he called the universal stock printer. It incorporated several key innovations such as a screw-thread device that made sure printers connected to each other on the same wire were synchronized to a central transmitter. In one version of Edison’s machine, the basic printing mechanism was changed slightly to print stock prices more efficiently. Another feature was a typewheel-shifting mechanism that reduced friction. When it was combined with a new paper-feed mechanism, the ticker consumed significantly less energy.

The New York Stock Exchange bought nearly 5,000 of Edison’s universal tickers between 1871 and 1874—making it the most successful device of its kind on the market. The money Edison earned from his invention enabled him to build his laboratory at Menlo Park, N.J.

In 1890, the New York Stock Exchange bought the rights to Edison’s ticker and began manufacturing them and selling stock quotation services to brokers. Soon many brokers and businessmen kept tickers in their offices, with the machines continuously printing out strips of tape when the stock market was open.

Workers in those New York City offices soon found that tossing the machine’s paper tape out the window made lovely streamers during citywide celebrations, giving rise to the ticker-tape parade.

The volume of trading grew in the late 19th century, and high-speed versions of the machines appeared around 1900. But when the stock market crashed on 24 October 1929—Black Thursday—even the high-speed tickers could not keep up with the falling prices, leading to panic selling by stockholders. It wasn’t until 1934 that the New York Quotation Co. introduced its black-box ticker, an extremely fast stock printer meant to handle rapid market changes.

The mechanical ticker’s days were numbered with the arrival of electronics technology, and the last model was introduced in 1960.

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