The Stock Ticker - 5

The Stock Ticker - 5

Another glimpse of this period of development is afforded by an interesting article on the
stock-reporting telegraph in the Electrical World of March 4, 1899, by Mr. Ralph W.
Pope, the well-known Secretary of the American Institute of Electrical Engineers, who
had as a youth an active and intimate connection with that branch of electrical industry.
In the course of his article he mentions the curious fact that Doctor Laws at first, in
receiving quotations from the Exchanges, was so distrustful of the Morse system that he
installed long lines of speaking-tube as a more satisfactory and safe device than a
telegraph wire. As to the relations of that time Mr. Pope remarks: "The rivalry between
the two concerns resulted in consolidation, Doctor Laws's enterprise being absorbed by
the Gold & Stock Telegraph Company, while the Laws stock printer was relegated to the
scrap-heap and the museum. Competition in the field did not, however, cease. Messrs.
Pope and Edison invented a one-wire printer, and started a system of `gold printers'
devoted to the recording of gold quotations and sterling exchange only. It was intended
more especially for importers and exchange brokers, and was furnished at a lower price
than the indicator service.... The building and equipment of private telegraph lines was
also entered upon. This business was also subsequently absorbed by the Gold & Stock
Telegraph Company, which was probably at this time at the height of its prosperity. The
financial organization of the company was peculiar and worthy of attention. Each
subscriber for a machine paid in $100 for the privilege of securing an instrument. For the
service he paid $25 weekly. In case he retired or failed, he could transfer his `right,' and
employees were constantly on the alert for purchasable rights, which could be disposed of
at a profit. It was occasionally worth the profit to convince a man that he did not actually
own the machine which had been placed in his office.... The Western Union Telegraph
Company secured a majority of its stock, and Gen. Marshall Lefferts was elected
president. A private-line department was established, and the business taken over from
Pope, Edison, and Ashley was rapidly enlarged."
At this juncture General Lefferts, as President of the Gold & Stock Telegraph Company,
requested Edison to go to work on improving the stock ticker, furnishing the money; and
the well-known "Universal" ticker, in wide-spread use in its day, was one result. Mr.
Edison gives a graphic picture of the startling effect on his fortunes: "I made a great
many inventions; one was the special ticker used for many years outside of New York in
the large cities. This was made exceedingly simple, as they did not have the experts we
had in New York to handle anything complicated. The same ticker was used on the
London Stock Exchange. After I had made a great number of inventions and obtained
patents, the General seemed anxious that the matter should be closed up. One day I
exhibited and worked a successful device whereby if a ticker should get out of unison in a
broker's office and commence to print wild figures, it could be brought to unison from the
central station, which saved the labor of many men and much trouble to the broker. He
called me into his office, and said: `Now, young man, I want to close up the matter of
your inventions. How much do you think you should receive?' I had made up my mind
that, taking into consideration the time and killing pace I was working at, I should be
entitled to $5000, but could get along with $3000. When the psychological moment
arrived, I hadn't the nerve to name such a large sum, so I said: `Well, General, suppose
you make me an offer.' Then he said: `How would $40,000 strike you?' This caused me to
come as near fainting as I ever got. I was afraid he would hear my heart beat. I managed
to say that I thought it was fair. `All right, I will have a contract drawn; come around in
three days and sign it, and I will give you the money.' I arrived on time, but had been
doing some considerable thinking on the subject. The sum seemed to be very large for the
amount of work, for at that time I determined the value by the time and trouble, and not
by what the invention was worth to others. I thought there was something unreal about it.
However, the contract was handed to me. I signed without reading it." Edison was then
handed the first check he had ever received, one for $40,000 drawn on the Bank of New
York, at the corner of William and Wall Streets. On going to the bank and passing in the
check at the wicket of the paying teller, some brief remarks were made to him, which in
his deafness he did not understand. The check was handed back to him, and Edison,
fancying for a moment that in some way he had been cheated, went outside "to the large
steps to let the cold sweat evaporate." He then went back to the General, who, with his
secretary, had a good laugh over the matter, told him the check must be endorsed, and
sent with him a young man to identify him. The ceremony of identification performed
with the paying teller, who was quite merry over the incident, Edison was given the
amount in bundles of small bills "until there certainly seemed to be one cubic foot."
Unaware that he was the victim of a practical joke, Edison proceeded gravely to stow
away the money in his overcoat pockets and all his other pockets. He then went to
Newark and sat up all night with the money for fear it might be stolen. Once more he
sought help next morning, when the General laughed heartily, and, telling the clerk that
the joke must not be carried any further, enabled him to deposit the currency in the bank
and open an account.