On Ticks and Tapes
On Ticks and Tapes: Financial Knowledge, Communicative Practices, and Information
Technologies on 19th Century Financial Markets*
Alex Preda
Department of Sociology and History
University of Konstanz
Paper prepared for the Columbia Workshop on Social Studies of Finance, May 3-5, 2002
Please do not cite, quote, or circulate without permission from the author
*
Address: Department of History and Sociology, University of Konstanz, PO Box D-46,
Konstanz 78457, Germany. E-mail: Alex.Preda@uni-konstanz.de. Research for this paper has been
supported by a Gilder Lehrman Fellowship in American civilization.
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On Ticks and Tapes
On Ticks and Tapes: Financial Knowledge, Communicative Practices, and Information
Technologies on 19th Century Financial Markets
Abstract
The present paper shows how the ticker, invented in 1867, changed the cognitive bases of
financial markets. I argue that such communications technologies should not be reduced to a
mere transparent medium for the rapid, efficient transmission of information. The socio-cognitive
changes effected by the ticker were much more profound and not limited to just speeding up price
transmission. Using an approach developed in the sociology of science and technology, I analyze
here the ticker as a nexus of discursive modes, cognitive rules and operations, and teleo-affective
structures. The data I use is provided by investor manuals, brochures, newspaper articles, reports,
stockbrokers’ correspondence, and investor diaries. I show how the ticker substituted a whole
network of social interactions within which securities prices were previously recorded. The ticker
(a) introduced new language and representation modes, which made possible the visualization of
financial transactions as abstract and dislodged from the particular conditions of the marketplace;
(b) it changed the production and processing of financial charts, leading to the institutionalization
of a new profession, that of the stock analyst; (c) it required permanent presence and attention
from investors, tying them affectively to market events; (d) it led to organizational changes on the
trading floor and in the broker’s office alike. On these grounds, in the conclusion I argue that the
operational principles of the ticker have been continued and developed by financial computer
screens in our days.
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On Ticks and Tapes
On Ticks and Tapes: Financial Knowledge, Communicative Practices, and Information
Technologies on 19th Century Financial Markets
I. Introduction
This is the story of the ticker. In the age of the Ethernet, of mobile communication
technologies and instant, satellite-supported price transmission, the ticker survives mostly on
screens like those of Bloomberg television, or in the windows of brokerage firms like E*Trade. It
is adapted to contemporary computer technologies and directed at the broad public. The narrow
paper tape has been replaced by a pixel strip at the lower edge of computer monitors. Such is its
afterlife. The last mechanical device was produced in 1960, being afterwards replaced by
electronic ones. Its fellow travelers—the telegraph and the telephone—have been privileged by
economic historians and sociologists alike, but the ticker has been rather neglected. While the
relevance of communication technologies for financial globalization has been much discussed,
most of the times it does not even get cursory mentions as an “also ran.” As I will argue below,
the ticker played a key role in the financial marketplace.
However, the main aim of this paper is not so much to do justice to a neglected
technology. The ticker confronts us with a paradoxical situation: why was it necessary to have it
invented when the telegraph was already there? Why have stock prices transmitted by the ticker
when the telegraph could do the same? How can we explain the tremendous success of the ticker
(and its survival in the 21st century) if it was so redundant? While the electric telegraph had been
in operation since the 1840s, and the first transatlantic cable became operational in 1865, the
ticker appeared in December 1867. During the 1870s, its success was tremendous and its
expansion rapid. Sociologically speaking, we are confronted with a situation where financial
markets, the paragon of rationalization and efficiency, rapidly adopted an apparently redundant,
useless technology. While economic historians unanimously agree that in the late 19th century
financial markets grew more and more efficient, integrated, and global, these very markets were
also ready to invest effort and money in useless things. Were they then less efficient than one
might think? Efficiency and rationality are inextricably tied to information and knowledge. This
brings us to the question I will examine here, namely that of the relationship between financial
information, knowledge, and (communication) technologies. Are these latter a simple, transparent
medium for the rapid, efficient transmission of financial information or are they more than that?
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If they are something more, and different from a transparent medium, how do they affect
financial knowledge, information, and the specific forms of market rationality? What is their
impact on the behavior of market actors? If we take into account the role played by
communication technologies in contemporary financial markets, these are key questions, still
waiting for an answer. Seen in this perspective, the story of the ticker is not just about another
neglected technology.
My argument here is that financial markets-related communication technologies (in this
case: the ticker) cannot be conceived as a transparent medium which (a) accelerates the
transmission of market-relevant information without affecting it in any way, (b) enlarges
accessibility to information without shaping investors’ behavior, or (c) contributes to market
rationalization and globalization without essentially changing the social shape of financial
transactions. I will show instead that the ticker was not a mere medium for the speedy, accurate
transmission of price information. It profoundly changed the ways in which financial market
operated. I discuss the ticker as a nexus of mutually reinforcing language and representation
modes, cognitive instruments and rules, and teleo-affective structures (Schatzki 1996: 99, 103;
2001: 48; Preda 2001a).
The data I use here is provided by US investor manuals, brochures, newspaper articles,
reports, investors’ diaries, and the correspondence of stockbrokers covering a period from about
1866 to 1910. This time span coincides with the period when the ticker was invented and
enthusiastically adopted first in the US, and later in Great Britain. I examine not only public
representations and comments on this technology, but also how individual users perceived and
connected it to other technologies like the telegraph and written correspodence. My approach is
that of a historical sociology of financial knowledge and technology, grounded in a
reconstruction of finance-related knowledge processes from the documents of the financial
marketplace.
In the first step of the argument, I provide an overview of how financial markets-related
communication technologies have been treated in economic history and sociology. I show that,
most of the times, they have been considered as perfectly transparent media which serve to
increase speed, efficiency, and rationality. Notable exceptions here are analyses from the field of
science and technology studies. In the second step, I recall the notion nexus which grounds my
analysis. The third step of the argument reconstructs the discovery and introduction of the ticker
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On Ticks and Tapes
on the New York Stock Exchange. The fourth step analyzes the discursive and representational
changes it brought about. I show how a new transaction language emerged, together with new
modes of analysis and representation. I argue that this language required new skills from financial
actors and led to the emergence of new professions in the marketplace. With that, the fifth step
can be taken, which concentrates on the relationships between ticker and chart analysis. I trace
the origins of the chart analysis—so popular nowadays—in the new cognitive possibilities
opened up by the ticker. As a new cognitive mode, the chart analysis led straight to the
institutionalization of a new profession, the stock analyst. In a sixth step, I examine the ways in
which the investors’ behavior changed under the influence of the ticker. In opposition to the
received view, according to which modern communication technologies increasingly rationalize
the behavior of market actors, I argue that their consequences are more complex. The ticker
requires permanent attention and presence in the marketplace, but, at the same time, it reinforces
affective ties between investors and the objects of their actions. Affective structures emerge,
which may run counter to rationality patterns based on maximizing profit. In a seventh step I
examine the organizational changes brought about by the ticker on the trading floor, as well as in
the broker’s office. While the trading floor was reorganized around tickers and along specific
lines of trade, the broker’s office bundled together several communication technologies and
became a local enactment of the central marketplace. The conclusion re-evaluates the role of this
communication technology in the emergence of global financial markets.
II. Financial Markets and Communication Technologies in Economic and Sociological
Perspectives
Historians of financial markets have treated communications technologies like the electric
telegraph and the telephone as factors increasing market efficiency and rationality. The electric
telegraph was invented in 1838 by Samuel E.B. Morse, and the telephone by Alexander Graham
Bell in 1878 (Nye 1997). A transatlantic cable between North America and Western Europe went
operational on August 5, 1865. Information, together with capital, flowed between markets,
attracting more and more investors, making investment decisions more rational and market events
easier to follow. In this perspective, the electric telegraph and, since the 1870s, the telephone,
contributed to the globalization of financial markets by disseminating and speeding up financial
news (O’Rourke and Williamson 1999: 215; Rousseau and Sylla 2001: 35).
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These technologies “shaped the modern American daily newspaper” (Shaw 1967: 3) and
made the dissemination of news easier and speedier. This increased efficiency is shown, among
others, by the growing share of financial and market reports in the commercial and general press
of the time. During the 1830s, a "commercial revolution" took place in the US news industry,
characterized by the shift from local, specialized, advertising-oriented newspapers to regional,
news-oriented ones, meant for a general readership (Schudson 1978: 17-25). The number of
general and commercial dailies, as well as their aggregate circulation, expanded rapidly after
1870, propelled by technical advances in mass printing (Mott 1962: 497, 507). Parallel to these
developments, the electric telegraph and the telephone were first introduced in commercial and
financial centers in the 1840s and the late 1870s, respectively, and spread at a brisk pace
(Burrows and Wallace 1999: 677, 1059; Stehman 1967 [1925]). Menahem Blondheim (1994),
Andrew Leyshon and Nigel Thrift (1997: 335) have stressed the role played by the news industry:
the rise of nationwide news agencies, together with the electric telegraph and later the telephone
facilitated the access to financial news and greatly increased their speed (Geisst 1997: 81-82).
Menahem Blondheim, for example (163, 170) has shown the extent to which professional
investors fought for control over the news services, as well as the sixfold increase in market
reports between 1870 and 1880. In this context, the speedy dissemination of financial news and
the increase in their quantity attracted new actors to the market (e.g., Baskin and Miranti 1997).
Information technology thus appears as (a) a productivity-increasing economic factor
(Rosenberg 1994) and (b) a transparent medium for the dissemination of information (see Figure
1). This view has been unmistakably expressed with respect to financial markets by historical
analyses (Tarr, Finholt, and Goodman 1987: 69; Yates 1986). What “information” may actually
mean from the sociological point of view is rather obscure. We can, however, infer that
information consists in written utterances which act as props for the actors in the marketplace in
their decision-taking process. These utterances describe the “state of the world” as a necessary
background for the actors’ decisions. In this respect, stories, prices, reports, and more fall under
the category of information. Prices occupy a special place here, since—according to a standard
assumption of neoclassical economics—they reflect all the information available to market actors
(Stigler 1986 [1961]). Needless to say, this is also a key assumption of the efficient market
hypothesis. The presence of a large number of actors in the market, who act independently of
each other, handling all the relevant information they can get, is a fundamental condition for
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market efficiency and liquidity (Fama 1970, 1991; Jensen 1978). These participants “compete
freely and equally for the stocks, causing, because of such competition and the full information
available to the participants, full reflection of the worth of stocks in their prevailing prices”
(Woelfel 1994: 328). Hence: communication technologies like the telegraph and the telephone
increased market efficiency because they speeded up the transmission of securities’ prices, which
in their turn synthesized all the information available to market actors.
Figure 1 about here
In the past fifteen years or so, sociologists of technology have argued against the
economic reductionism which sees technological systems only in terms of productivity,
efficiency, and capital. They (e.g., Bijker, Hughes, and Pinch 1987; Bijker 1995: 15; Mackenzie
1990; Law 2000; Callon 2001) have maintained that such systems trigger social changes
irreducible to economic processes and that the a priori assumption of separated scientific,
technical, social, cultural, and economic factors is misleading. In the spirit of the strong program
in the sociology of science, these authors and others (Latour 1993) have questioned the
productivity of a sharp distinction between human actors and artefacts. Instead, it has been
argued that both should be seen as nodes of social knowledge, relating to each other in specific
ways.
In this perspective, communication technologies cannot be seen as media meant only to
increase efficiency and transparency. In the words of Richard Coyne (1995: 145), information
technology generates a world—that is, a complex web of human actors and artifacts which does
not simply reproduce an external, given reality, but is governed by its own rules. The few
sociological studies focusing on the telephone and the telegraph point at their cognitive and social
complexity. The telegraph and the telephone were at the core of debates about gender in the
workplace and triggered social reforms facilitating women’s access to the labor market
(Bertinotti 1985). The telephone required a certain voice amplitude (which could be provided by
women), introduced new speech manners, and required vocal skills which were not present until
then (Siegert 1998; Bakke 1996). The telegraph, in its turn, led to the introduction of uniform
public time (Stein 2001: 115). Friedrich Kittler (1986, 1998) makes the argument that such
communication technologies introduce new modes of writing, which in their turn shape social
reality. An example in this sense is the typewriter, which radically changed several professions
(the writer’s, the calligrapher’s, the typist’s, the secretary’s), the organization of firms and public
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administration, and the temporal structures of office work. Accordingly, communication
technologies are rather to be understood as knots of social knowledge requiring special skills
from the human actors and triggering complex social changes.
While these communication technologies have been acknowledged as central with respect
to financial markets and globalization, the relationships between them and the financial
marketplace still await a closer sociological scrutiny. It is certain that during the later 19th
century, developments in communication technologies were closely related to financial markets,
and that the US financial markets (rather than the European ones) played a pioneering role in this
respect (Bazerman 1999: 41-42). Since there are several convincing arguments that the telegraph
and the telephone did not simply speed up everything, but had a more profound role, such a
scrutiny will help us better understand the social factors underlying financial globalization. With
that, I come back to the initial argument: if they were that efficient, why did the ticker appear and
why was it so successful? Besides, there are some empirical arguments (detailed in section IV)
which do not fit the telegraph’s success story: if this latter increased efficiency and speed, we
should expect investors to rely more on telegrams when placing their orders. The correspondence
of brokerage houses and investors from the 1850s and 1860s (before the introduction of the
ticker) shows, however, that good old letters continued to play a dominant role. Even after the
transatlantic cable became operational in 1865, the documented cases where investors made
intensive use of this technological advance are very rare. Why did investors use the telegraph
only now and then? Why did they continue to write so many letters? Clearly, there is more to be
investigated here.
III. Integrative Practices and Communication Technologies
Here I approach communication technologies (more specifically: the ticker) as a nexus of
discursive modes, cognitive rules, and teleo-affective structures. These modes, rules, and
structures characterize both the doings and sayings of human actors and the working of artifacts.
Hence: the ticker is not regarded as a simple, clearly delineated tool, but is considered as a
complex constellation of cognitive operations and instruments. At the same time, the distinction
between human actors (operating the machinery) and the hardware (being operated upon) is less
important here than the ways in which these modes, rules, and structures are distributed and
related to each other. The notion of nexus is related to the concept of integrative social practice,
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which stems from Wittgenstein-inspired theories of social practice (Schatzki 1996) and provides
an explanatory model for how unrelated individuals with completely different backgrounds and
upbringings engage in similar, yet not identical actions. As such, this notion is a broader and
more flexible alternative to Pierre Bourdieu’s notion of habitus (1990 [1980]), which requires a
system of differences between fields of action and between the actors’ positions in each field. A
good example of an integrative practice is popular investing, which is prominent not only
nowadays, but also in the second half of the 19th century (Preda 2001a). When investing in
financial securities, unrelated actors engage in similar, but not identical actions. Each of them has
her own individual pursuits. This kind of social action requires not only a disposable income, an
acknowledged legal and financial framework, and a minimal level of education. It also requires a
common framework of understanding, shared cognitive rules, and teleo-affective structures.
This common framework of understanding is given by representation and discursive
modes—that is, the literary and visual devices through which financial markets are made
intelligible to participants and through which they latter access the market. These literary and
visual devices do not provide a mere abstract intelligibility, but are practical tools with the help of
which actors structure their actions. For example, a financial analysis or a stock price list employs
a vocabulary different from that of a satire like Tom Wolfe’s Bonfire of the Vanities. It requires a
different attitude, different skills, and imposes different courses of action on the reader.
Cognitive rules, in their turn, provide the actors with special skills, and require special
skills in order to be used. A financial chart, for example, incorporates skills (the user does not
have to draw it herself) and requires reading skills different from, say, a financial cartoon. Most
of these rules are tacit, being enacted by actors without a critical examination of their
prerequisites. For example, I may be critical of a financial chart, but I do not question the
geometrical and economic assumptions underlying chart drawing, or the mathematical
assumptions underlying chart-drawing software programs. Rather, in reading a financial chart I
take for granted that skills are distributed on humans and artifacts, and that they form a complex
cognitive network.
Teleo-affective structures designate the emotional bind which cognitive rules, together
with discursive and representational modes put on social actors. The argument here is that, since
these modes and rules are not external with respect to social actors, but internalized, written on
their bodies and in their heads, they generate emotional, affective ties. These help the actors make
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sense of their actions not only in “cold,” cognitive terms, but in ways which mix cognition and
emotions. For example, investment bankers describe their analyses not only as knowledge, but
also outline aesthetic and emotional aspects (Preda 2002; Knorr Cetina and Bruegger 2002a).
They consider these aspects as intrinsic features of epistemic products.
Discursive and representation modes, together with cognitive rules and teleo-affective
structures are the fundamental dimensions of integrative social practices, they are mutually
reinforcing and form a nexus to which both human actors and artifacts participate. Paths of social
action are made possible in such a nexus. What is more, this allows actors to reciprocally
acknowledge their doings and sayings as instantiations of the same kind of practice: for example,
as instantiations of “investing,” or of “following the market.” Common horizons and expectations
emerge and become in-built features of practices like “stock evaluation,” “forecasting,” and the
like.
Equipped with this conceptual apparatus, I will now turn to the ticker as an apparently
useless, redundant artifact. Instead of treating it as a medium, or as a machine “out there,” I will
take it apart into the representational modes, discourses, rules, and emotions it generated, carried
along, and disseminated. The starting point is a short history of how it came into existence.
IV. The Story of the Ticker
As mentioned earlier, the telegraph did not automatically induce investors to send price
information and orders by telegram, in spite of all the apparent benefits. In fact, when we
examine the correspondence of investors and stockbrokers, we can see that, even after the
inauguration of the transatlantic cable in 1865 and the introduction of the first telephones to Wall
Street in 1878,1 brokers still used letters extensively. We have here the example of Richard Irvine
& Co., which in the last four decades of the 19th century was one of the major New York
brokerage houses. Richard Irvine catered to a large pool of British customers, which came mainly
from Glasgow, Manchester, Edinburgh and London, and (rarely) from the countryside too. He
also catered to Canadian customers, and his American investors covered an area between Maine
and Tennessee. In short, his was a major, internationally operating house. The business
correspondence of Richard Irvine & Co. with their British clients shows that in most cases orders
1
The Magazine of Wall Street, Vol. 40/9, August 25, 1927: 753.
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were placed by letter; in some other cases, the New York brokerage firm wrote letters to
investors, supplying them with price quotations and other information, and asked them to order
back by cablegram. In 1868, Irvine still provided to some of his clients quotations which were
twelve days old.
Of course, the new technology was rather expensive and investors used it parsimoniously;
at the same time, the fact that price quotations were circulated by letters between New York and
Europe points to the main informational problem of investors. This problem consisted not only in
getting accurate information about prices, but—first and foremost—in accurate, timely
information about price variations. It is rather irrelevant to know that the price of, say, the
Susquehanna Railroad Co. is at $53.20. What is really relevant is whether it is higher or lower
than thirty minutes ago, or an hour ago, or yesterday.
Certainly, there were price lists published in the commercial and general press. But it was
impossible to determine what kind of prices were published on the lists. The practice of
publishing closing prices was not common everywhere. In New York City, publications like the
Wall Street Journal began publishing closing quotations only in 1868. The New York Stock
Exchange got an official quotation list on February 28, 1872. In the 1860s in London, only the
published quotations of consols were closing prices. Besides, some prices were compiled from
the floor of the Exchange, while others were compiled from private auctions, which ran parallel
to those on the exchange floor. The process of cognitive standardization was far from finished
(Preda 2001a: 225).
There was also a long history of forging price lists. Stock quotations published in
newspapers were not always perceived as reliable; in fact, stock price lists had a very bad
reputation in the US (and not only), as being unreliable and manipulated:
The many-headed monster-dog
(Cerberus is the name in vogue,)
Seems to have left his place in H—l
With us on Earth, a while to dwell;
But, fearful lest he raise a storm,
Assumes another shape and form:
Wall Street is now the gate he guards,
For which he gathers rich rewards;
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And spite of art, in cunning's spite,
The Stock-List shows him to our sight;
Its rise or fall—his appetite.
This monster-stock-list also shows,
What Milton's muse could scarcely disclose
"A formidable, shapeless shape,"
Something 'tiwxt Bull, and Bear and Ape;
A mass, with members out of joint;
A mixed-up jumble, without point;
A grand array of lies, facts, figures;
A witch's caldron—whites and niggers.2
More generally, 19th century academic economists, in the US as well as in Western
Europe, were skeptical about the accuracy of economic statistics and, more often than not, did not
use them (Desrosières 1994: 170). Since many transactions were private, it also made sense to
circulate private prices by private letters. Without an adequate technology for recording and
transmitting price variations accurately and rapidly, it was not very sensible to rely solely on
telegraph or (later) telephone communication.
This problem found its solution in 1867, with the invention of the ticker, or the "stock
telegraph printing instrument." The ticker was invented by E.A. Callahan, an engineer associated
with the American Telegraph Company, who had noticed that a key problem of stockbrokers was
keeping track of prices. On the floor of the Exchange, prices were written on paper slips, which
were lost, misread, misdirected, or forged on a daily basis.3 Writing down transactions on paper
slips was a common practice among brokers in early 19th century. For example, William
Bleecker, a prominent New York broker in the 1830s, president of the NYSE and scion of the
family which co-founded Wall Street, did not keep any transaction ledger (or at least he did not
leave one, nor did he mention having one). His carefully kept records consisted in paper slips
recording transactions. Courier boys ran with paper slips to the brokerage houses and back,
2
The Bulls and Bears or, Wall Street Squib. No. I. New York 1854: 10.
Edmund Clarence Stedman (ed.). 1905. The New York Stock Exchange. Its History, Its
Contribution to the National Prosperity, and Its Relation to American Finance at the Outset of the
Twentieth Century. New York: New York Stock Exchange Historical Company: 433.
3
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making the confusion even greater. Agents listened at the keyhole for prices, wrote them down
and sold the information in the street. The keyhole privilege was sold for $100 a year.4
The first ticker consisted of a stiletto, placed under a glass jar bell and powered by a
battery, which recorded prices and company names on a narrow paper strip; it was installed in the
brokerage office of David Groesbeck in December 1867. The ticker tape was divided in two
stripes: the security’s name was printed on the upper stripe, and the price quote on the lower one,
beneath the name. A clerk stood by the ticker, reading prices aloud. With that, the brokerage
office was directly connected to the floor of the exchange and had access to real time prices.
However, technical problems were soon to arise: on the one hand, the stiletto blurred and mixed
up letters and numbers, instead of keeping them in two distinct lines. On the other hand, tickers
required batteries, which consisted of four large glass jars with zinc and copper plates in them,
filled with sulphuric acid; this, together with uninsulated wires, made accidents very frequent in
the tumult of a brokerage office.
These problems were solved in the 1870s by Henry van Hoveberg's invention of the
automatic unison adjustment and by the construction of special buildings for batteries; brokerage
offices were connected now to a central power source (the battery building) and to the floor of the
Stock Exchange. The Gold Exchange received a similar instrument, the gold indicator; a
clocklike indicator was placed on the facade of the Exchange, so that the crowds could directly
follow price variations.5 After these technical problems were fixed, the ticker expanded rapidly
and several companies competed for the favors of brokerage houses and investors alike. While
the figures about the number of tickers in use at the turn of the 20th century are contradictory, it is
clear that the ticker was present in provincial towns, at least between Midwest and the East Coast.
The New York Stock Exchange (p. 441) claimed in 1905 that 23,000 US offices subscribed to
ticker services. The Magazine of Wall Street6 stated that in 1890 there were about 400 tickers
installed in the US; in 1900, there were over 900 and in 1902 they had reached 1200. Other
publications7 claimed that by 1882 there were 1,000 tickers in New York City alone, rented to
offices at a rate f $10 per month. Peter Wyckoff (1972: 40, 46) evaluates the number of tickers in
4
Henry Clews. 1888. Twenty-eight years in Wall Street. New York. Irving Publishing Co.: 8.
The New York Stock Exchange: 436.
6
Vol. 40/9, August 25, 1927: 753.
5
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use at 837 in 1900 and 1,278 in 1906. Bond tickers were introduced in 1919. The ticker was also
mentioned in the correspondence and diaries of well-to-do New York investors. We encounter
the example of Edward Neufville Tailer, a rich (though not among the richest) woolen goods
wholesale merchant, who kept a diary between 1848 and 1907. When Tailer undertook a business
trip through the Midwest and South in 1880, he regularly went to brokerage offices in cities like
Nashville and Cincinnati, in order to watch the ticker.
At least some of the New York City restaurants had tickers in the dining rooms. At
Miller's and Delmonico’s, investors could follow the price variations in real time, ordering a meal
and some stocks at the same time.8 Private stock auctioneers also installed tickers on the
exchange floor. Not only that the ticker was present in places where the upper middle classes
congregated—it was also present on the fringes of the marketplace, in the badly lit, narrow
bucket shops where poorer people came to invest their few dollars. So strong was the influence of
the ticker and the prestige associated with it that bucket shop operators felt compelled to install
fake tickers and wires going only to the edge of the rug, together with additional paraphernalia
like mock quotation tables and fake newsletters (Fabian 1990: 191; Cowing 1965: 103).
The ticker became a prized possession, to be kept until a speculator’s last breath: when
Daniel Drew, the famed speculator of the 1850s and early 1860s died in 1879, his only
possessions were a Bible, a sealskin coat, a watch, and a ticker (Wyckoff 1972: 28).
V. The Ticker as a Sociolinguistic Machine
In the absence of the ticker, it was understandable that even big brokerage houses like
Richard Irvine’s did not bother much sending telegrams: the telegraph did not solve a basic
problem of the marketplace, that of directly tying prices to floor transactions (see Figure 2). Inbetween there was a myriad of paper slips littering the floor, a crowd of courier boys running in
all directions, ears at the keyhole, as well as some forgers (not very rare). This whole system of
social interactions obscured any direct relationship between the published price and the
interactional nature of financial transactions. The said transactions were, then as in the 18th
century (Preda 2001b) and as today (Knorr Cetina and Bruegger 2002) conversational exchanges.
7
George Rutledge Gibson. 1889. The Stock Exchanges of London, Paris, and New York. A
Comparison. New York and London: G. P. Putnam's Sons: 82.
8
The Ticker, Vol 1 No 3, January 1908: 47.
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Securities prices were set by conversational turns; a “market turn” meant in early 19th century
London a conversational transaction, a price variation, and the broker’s fee on £100 worth of
transacted securities. Contracts were written down by back office clerks at the end of the working
day.
Figure 2 about here
This meant that the interactional price-setting mechanism of the marketplace was the
speech act. This had to fulfill specific felicity conditions in order to be valid, of course:
participants knew each other, had legitimate access to the floor, and had a transactional record,
among others. But this does not obscure the fact that it was the perlocutionary force of a speech
act which set the price (Austin 1970 [1961]). Paper slips fixed and visualized this conversational
outcome post hoc and only for momentary needs. They were an ephemeral trace left by
conversations, which could otherwise be observed only from the visitors’ gallery, as a
conglomerate of shoutings and wild gestures. Conversations could not be directly and
individually witnessed; the only proof of them having taken place lived less than a fruit fly. This
is why all commentators of the financial marketplace, from the 18th century on, emphasized the
key role of honor as an unspoken condition for the felicity of transactions.
In the same way in which the speech act’s felicity conditions required that the broker was
honorable and known to the other participants on the floor, the paper slip had to be handwritten,
signed, certified thus as original and tied to its author. This, of course, made the price dependent
on the individual, context-bound features of conversational exchanges.
The ticker radically changed this situation. It visualized the results of conversational turns
as these went on and untied these results from the authority of participants to conversations. At
the same time, it tied these results to each other, made these ties visible as the tape unfolded, and
made the market visible as an abstract, faceless, yet very lively whole. All the felicity conditions
which made the speech act valid (intonation, attitude, look, wording, pitch of voice, etc.) were
darkened out. It should be noticed here that in the US and in Britain, at the time of the ticker’s
invention, several efforts were under way to develop machines for making speech visible. On the
one hand, there were attempts at developing technical devices for the deaf, connected to the
method of lip reading. The people involved in these attempts were also involved in the
development of better telegraphic devices and tried their hand (though unsuccessfully) at a
telegraphic machine fitted for financial transactions. Alexander Graham Bell’s father was among
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those making such efforts (Siegert 1998: 81). On the other hand, there were attempts at
developing machines which should automate speech and writing, turning these into standardized
activities (Gitelman 1999: 94, 188). More generally, in late 19th century phonology was devising
transcription systems and machines which should make speech sounds visible (Robins 1990:
223). These experiments were at the forefront of the revolution in linguistics, which took place
around 1900, when historical-etymologic approaches were replaced by descriptive-structuralist
ones.
The new technology also meant that printed stock lists lost some of their importance as
decision instruments—a fact already noticed by observers of the period. At the same time, lists
became more sophisticated and began to show not only opening and closing prices, but also
prices at different times of the day—a fact mirrored by more detailed market reports in the New
York and provincial newspapers. In 1884, with the ticker being a solid market fixture, Dow Jones
began publishing average closing prices of active representative stocks (Wyckoff 1972: 31), thus
initiating the first stock market index.
The ticker, combined with the telegraph and the telephone (Stehman 1967 [1925]: 14-15),
made time shrink: the investors couldn't let time pass before placing an order anymore, since this
could mean losing money. Not only that more rapid decisions were required from them, but also
more rapidity in the way they worded their decisions. This made brokerage houses adopt and
distribute telegraphic codes to their clients, standardizing the language of financial transactions
and adapting it to the new technological requirements. For example, a client of the house of
Haight & Freese in Boston could telegraph them, "army event bandit calmly" instead of "Cannot
buy Canada Southern at your limit. Please reduce limit to 23."9 An effect of this standardization
was that investors were bound to their brokers even more than before: as an investor, one had to
learn a special telegraphic code from the broker's manual, spend as much time as possible in his
office, and read his chart analyses. Brokerage houses advertised their telegraphic codes as a sign
of seriousness and reliability. Some distributed them to their clients for free, while others charged
a fee.
The changes effected by the ticker with respect to representational and discursive modes
were profound. Not only that the new language was standardized and adapted to the rapidity of
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transactions; it was now a credential by itself. First and foremost, the ticker wiped out the social
entanglement which stood between conversational speech acts and the visualization of prices.
The observer of financial markets wasn’t anymore to be equated with the confused tourist
standing on NYSE’s visitors’ gallery. The observer of the market was the observer of the tape. In
this sense, it can be argued that the ticker contributed to a radical abstraction and reconfiguration
of the visual experience of the market. It was part of the broader efforts of the 19th century to
rationalize visual perception and render it manageable, predictable, and productive (Crary 1990:
147).
The ticker did not merely replace the skills of a myriad of courier boys. In this sense, the
ticker definitely did not act as a door opener (Latour / Johnson 1988). Rather, it promoted
sociolinguistic principles superimposed on (and equivalent to) economic ones. The contingent
features of conversational exchanges were obscured; their result was visualized in a spatial
arrangement replacing the temporal structure of conversations, but equivalent with it at the same
time. It made the meaning of securities prices depend on differences between earlier and later
prices. Prices were related to each other, and not to an external reality. It unveiled patterns of
repeatability in both conversations and prices. I do not mean by this that the ticker was built
according to abstract linguistic and economic principles. Quite the contrary: its way of working
generated discursive and representational modes directing investors and brokers along specific
paths of action, orienting them toward price differences, disentangling authority from concrete
persons, shrinking time, standardizing language.
VI. From Tapes to Financial Charts: The Cognitive Instruments
Perhaps not entirely by accident, the ticker was invented at a time when US psychologists
(but not only) were engaged in hot debates about permanent attention as a fundamental condition
of knowledge (Crary 1999: 21-23). The ticker durably bound investors and brokers to its ticks.
Permanent presence, attention, and observation were explicitly required by manuals of the time.
This corroborates the argument formulated by Karin Knorr Cetina and Urs Bruegger (2002), that
a central feature of financial markets is its observational epistemology.
9
Guide to Investors. Haight & Freese's Information to Investors and Operators in Stocks, Grain
and Cotton: 385, 396.
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The duty of the stockbroker was simply to be always by his "instrument," which "is never
dumb" and ensures that the US is "a nation of speculators."10 The term "instrument" was equally
used by the press of the time and by brokers in their account books: for example, in the 1870s the
New York firm of Ward & Co. paid a monthly rent of $25 for their "instrument." Other firms
rented their tickers at a rate of $1 per day. The ticker became simply “the instrument,” the
paragon of the marketplace. Investors too felt motivated to spend more time in their brokers'
offices, watch the quotations and socialize. Edward Neufville Tailer minutely recorded in his
diary not only the actual dates he went to his brokers' offices—during the years 1880-1882, at
least once a week—but also the times when he should have gone, expressing regret for not doing
so:
Feb 24 1882: Stocks are better today. I sold Louisville and Nashville @ 72 1/2, Erie @
36 1/4, and they have since advanced 1 1/2 to 2%. I bought Union Pacific @ 111 1/2 in
the margin and sold it @ peak @ 114. It was a lovely afternoon for riding . . . I missed it
by not being at Louis T. Hoyt's office this afternoon, as stocks fell off 1 @ 2 points. Feb
27 1882: Stocks are all better this morning, I missed it by not being at the opening of the
market, as I later in the day paid an advance of 1 @ 2 % on the closing prices of
Saturday, upon which I visited Mr. Hoyt in the morning.
Not only that presence in the stockbroker's office was a must, if one was to be au courant
with the latest prices and price variations; it was also a must for the investor eager to hear
"scientific" interpretations and analyses of price variations. A major cognitive effect of the ticker
was that it gave a decisive impetus to cognitive instruments and procedures like the chart
analysis. While financial charts were in use in England and France since the 1830s (see Preda
2001a), traditional procedures of data collection allowed only large time series: it was thus
possible to visualize the price variations of a certain stock over a couple of years or months, but
not over a couple of days or over a single day. Price data were not collected day by day, much
less hour by hour, a difficulty mentioned by many chart compilers.
It was now possible to visualize (and analyze) minute price fluctuations over hours, days,
or months. By the turn of the twentieth century, detailed, by-the-hour financial charts began to be
published in investor magazines. Since the data had to be recorded much more rapidly now, new
10
"Stocks and the Big Operators of the Streets. The Science of Speculation as Studied by a
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cognitive skills were required: those of the "tape reader," a trained clerk or a stockbroker who
stood by the ticker, picked out and recorded the price variations of a single security in a diagram,
so that at the end of the trading day a chart was already available. This required a great deal of
attention, as well as agility and a well trained memory. With that, the chart analyst became an
established presence in brokerage offices, as well as in investor magazines:
There was a chart-fiend in our office—a wise-looking party, who traveled about with a
chart book under his arm, jotting down fluctuations, and disposing in an authoritative
way, of all questions relating to "new tops," "double bottoms," etc. Now, whatever may
be claimed for or brought against stock market charts, I'll say this in their favor, they do
unquestionably show when accumulation and distribution of stocks is in progress. So I
asked my expert friend to let me see his "fluctuation pictures," my thought being that no
bull market could take place till the big insiders had taken on their lines of stock. Sure
enough, the charts showed, unmistakably, that accumulation had been going on at the
very bottom. [...] But it is one thing to know what a road is earning, and another to
consider this earning power in relation to the market price of its stock. Viewed solely
from the standpoint of earnings, a stock earning 3% and selling at 50 is not so cheap as
one earning 7% and selling at par. Therefore, I rearranged my list, setting down the then
market price of each stock and figuring what rate was beign earned on this price. [...]
This, by the way, is the simplest and most accurate method I know, of forecasting a rise
in any particular stock, provided the advance is not manipulative or due to special
causes. I have tested it out in many ways and the results at times have been almost
magical.11
In his reminiscences written under the pseudonym of Edwin Lefevre (1998:18-19, 22), an
investor who started around 1900, at the age of 14 as a quotation-board boy, stressed the
importance of judgment by the chart, of having a proper system of assessing the meaning of
fluctuations on the basis of charts alone, together with the strong desire for constant action. The
chart was the market, as well as the means of understanding the market.
At the same time, the establishment of the stock analyst as a distinct profession—which
should ensure the impartial distribution of meaningful information to investors and help them
Leading Operator," Cincinnati Enquirer, April 13 1881.
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On Ticks and Tapes
make their decisions—was loudly required in journal articles. A stock analyst would be on the
same plane with a physician who recommends a medicine solely on its curative merits, he "would
have to stand on a plane with George Washington and Caesar's wife. He must have no connection
with any bond house or brokerage establishment, and must permit nothing whatever to, in any
way, warp his judgment. He must know all securities and keep actual records of earnings and
statistics which show not only whether a security is safe, but whether it is advancing or declining
in point of safety."12
In 1890 “Poor’s Handbook of Investment Securities,” the first systematic coverage of
industrial stocks was published. Around 1900, John Moody began rating the investment quality
and character of bonds. While the practice of gathering information about stock companies was
initiated by the Bank of England in the 1830s and the gathering of long-term statistical data on
securities had begun in the 1840s, the ticker tape acted as a centrifugal force around which other
kinds of data could be ordered and interpreted.
The new financial charts—different from the older ones—came with their own
metaphorical luggage and discursive modes: there were now “double bottoms,” “tops,” and
“shoulders” to enrich the analyst’s arsenal. What’s more, the chart continued the visualization
process initiated by the tape: it was the visualization of concatenated visual representations of
conversational outcomes. Correspondingly, the analytical language is full of visual metaphors:
we do not need any references to the bricks, furnaces, tracks, and machinery of stock companies
any more. Price differences suffice. Discursive modes supported the chart as a cognitive
instrument, which in its turn conferred authority upon the stock analyst as the only one skilled
enough to discover the truth of the market in the dotted lines. The analyst promoted the charts,
which required a special language. Since these cognitive instruments required permanent
presence and attention, the public depended on the agile eyes and skilled hands of brokers and
analysts.
VII. Why Do Investors Have Sentiments?
11
"A Method of Forecasting the Stock Market," The Ticker Vol. 1, Nr.1, November 1907: 2, 4.
"Why Not Investment Experts? Demand for Advice and Opinions on Investments, Suggests the
Establishment of a New Profession," The Ticker Vol. 1, Nr. 6, April 1908: 35.
12
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Fancy metaphors, new-fangled charts: how did they influence the investors’ attitudes?
With that, I come to discussing the teleo-affective structures generated by cognitive rules and
representation modes.
A relevant notion, discussed extensively in behavioral finance (e.g., Shleifer 2000: 12,
112; Odean 1998; Shiller 1984; Kahneman and Riepe 1998), is that of “investor sentiment.” It
designates the fact that investors form and hold beliefs about financial securities, according to
which they make their investment decisions. This has a considerable influence on how financial
markets work. The investors' beliefs do not seem to be based entirely and exclusively on a
detailed, “cold” analysis of securities prices, which shall take into account all the available
relevant information. Rather than that, other factors, generally termed as "irrational" (but not
known in detail) seem to play an important role. What's more, such beliefs do not seem to emerge
randomly, but according to certain social patterns and processes, which are not yet understood in
detail either.
This is paradoxical, since standardized communication technologies should allow a rapid
and equal distribution of information and, at the same time, provide all investors with the
epistemic means for rationalizing their decisions.
The ticker was a popular, not an elitist instrument. It required permanent presence and
bound investors to market events. It made them come to their broker again and again, and spend
hours there. The case of Edward Tailer, the investor discussed above, is relevant in this respect,
since he kept a detailed diary. First of all, his participation to financial transactions increased after
the introduction of the ticker; second, this participation became a reflexive one. We know that he
regularly went to watch the ticker. Up to 1870, Tailer (who traded in woolen goods) bought stock
only occasionally, and gold only for the purpose of covering his import-export activities.
Whenever he bought gold on margin and gold futures between 1866 and 1870, he admonished
himself for risking too much. In mid-1867, he began recording stock prices regularly. He thus
began monitoring his actions with respect to the evolution of stock prices and commented upon
his past decisions. Here is a short excerpt from his diary, showing the frequency with which he
monitored his investments and his own decisions:
Dec 2 1880: I telegraphed today to L.T. Hoyt from Nashville to buy me one hundred
shares of Western Union at ninety. It was quoted in Nashville @ 90 1/2 at noon. Dec 4
1880: The special to the Cincinnati Commercial reports money tight in NY, plus a
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On Ticks and Tapes
commission of 1/32 @ 1/4 of 1% per day. Mr. L.T. Hoyt bought me 100 Western Union
@ 90, a good purchase. (On a letter from J.A. Hamilton from NY, dated Nov 27 1880,
he scribbled: J.C. 82, L.S. 123%, NYC 146 1/2, Del&H 92, DL&H 105, Chat 74 1/2.)
Dec 21 1880: I bought today through L.T. Hoyt 100 Louisville and Mississippi preferred
@ 91, Louisville and Nashville watered @ 87 1/2, through Broke and Smith Western
Union @ 80 3/8. Dec 24 1880: Preparations are made to complete the Northern Pacific
RR and I bought today through L.T. Hoyt 100 shares of the preferred stock @ 64 3/4. I
sold at last summer @ 45-53. Dec 30 1880: I purchased today 200 Delaware and Hudson
@ 92 1/4, 100 Western Union @ 81 1/4, 100 Chesapeake and Ohio preferred @ 35 1/2.
As mentioned above, he admonished himself whenever he felt he should have been at his
broker's office instead of riding in Central Park. He pasted newspaper clippings in his diary and
commented upon his own transactions as corresponding or not to what newspapers said was the
right thing to do. When on trips to Europe or in the US, he took care to go to stockbrokers’
offices and record prices. What is more, beginning with 1879, the frequency of his transactions
increased dramatically and remained very high in the coming years. For example, between
October 3, 1879 and November 21, 1880, he recorded 36 financial transactions in his diary,
which means about one every ten days. During the next year, he took a six-month trip to
Europe—taking care to monitor stock prices from London and Geneva (among other places)—
but his diary records 18 trades for the remaining six months. It is hard to believe that he was an
isolated phenomenon: Ms. Mary Bowman, a client of Ward & Co., another prominent NY
brokerage house, traded eleven times in the stock of the Bank of Commerce, the Bank of the
State of New York, and the Bank of America between April and December 1876; she bought
these stocks mostly on margin, being thus a more active investor than some of Ward & Co.'s
male clients. In both cases, increased frequency of investment activities overlaps with the
introduction of the ticker.
Permanent attention to market events also meant permanent attention to one’s own doings,
systematic reflection upon the satisfactions derived from the own behavior. Is riding in Central
Park giving me a greater satisfaction than a visit to my broker? What is the right thing to do? At
the same time, when studying such diaries we can notice the fact that popular investors were still
very reluctant to sell certain stocks, even when they were losing money; some of them at least
tended to monitor the price variations of certain stocks more actively than other stocks, even if
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they did not hold a significantly greater amount of money invested in the stocks they followed
more actively. Edward Tailer, for example, held Lake Shore and Michigan Railroad Co. stock for
years, although its price continuously decreased. He expressed joy over a small dividend,
although the gain was written off by the price decline:
Sept 28 1874. Stocks have been excited in Wall Street today and Lake Shore has
advanced to 82 3/4 at this price I could get out without a loss having purchased in the
panic at 91 & last April @ 74 1/2 for an average. [...] Jan 7 1876. I am pleased to see
that the Lake Shore and Michigan Southern railway, in which I am interested, has earned
a dividend of 2%, payable on the 1st of February next out of the earnings, for the six
months ending with Dec 31 1875. [...] May 5 1876. I bought today 200 shares of Lake
Shore, through Broke & Smith @ 52 1/2.
We have to do here with what behavioral finance theorists call "stickiness" or "frame
dependence" (e.g., Shefrin 1999: 23; Andreassen 1990; Scharfstein and Stein 1990)—that is, with
the apparently irrational unwillingness to sell bad stocks. "Stickiness" does not corroborate key
assumptions of the efficient market theory, namely that (1) investors act on the grounds of
information having the same meaning for everyone and (2) they clearly distinguish between
relevant and irrelevant information. While noticed and discussed in behavioral finance, this
phenomenon still lacks a sociological explanation. It is not to be confounded with apathy or
indifference—quite the contrary. Someone like Tailer was anything but indifferent with respect to
his portfolio, but he still couldn't bring himself to sell a stock the value of which had decreased
by more than a third. My argument here is that permanent observation of market processes and of
stock prices (induced, at least in part, by the ticker) has emotional effects. In other words, stocks
become not only an object of permanent monitoring, but—and exactly because of permenanent
monitoring—they become an object of emotional attachment too.
This phenomenon has been noticed and described at least in two cases until now: as the
emotional attachment of scientists to the object of their research activities (Knorr Cetina 1997),
and as the emotional attachment of professional traders to market processes (Knorr Cetina and
Bruegger 2000). However, we should not think that this is a very recent phenomenon: the
increased frequency with which in the late 19th century at least some American investors
monitored the performance of their stocks (due to the ticker), as well as the increased frequency
of their transactions made them (or at least some of them) associate their stock transactions with
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On Ticks and Tapes
private events (the birth of a child, birthdays, anniversaries, the death of a relative, etc.). At the
same time, particular performances of stock prices (an unexpected high price, a desastruous low),
which were now monitored much more frequently, could also be associated with public events.
Moreover, a continuous monitoring could lead investors to "give stocks another chance"
and "wait a little longer," since under the new conditions they could in principle be sold any time.
We can observe this in Tailer's case, who recorded stocks bought on his eldest daughter's
birthday, or stocks sold on the brink of great political events, like the 1876 war between Russia
and Turkey. Other investors, like George Dow (a New York shoe vendor), attached to stocks
because they came from their native towns—like the Portland Gas Company—in spite of the
financial irregularities accompanying them. The overall argument is that an increased cognitive
preoccupation with financial securities necessarily leads to the development of emotional ties; as
a consequence, stocks will not be valued solely according to the information held by investors, or
to their price dynamics, but also according to the investors' emotional attachment to stocks.
Accordingly, the "stickiness" of stocks is not a consequence of judgment deficiencies or lack of
information on the part of investors, but a built-in feature of their cognitive preoccupation with
financial securities.
The ticker—by requiring permanent presence and attention to the marketplace—
encouraged (if not generated) a continuous monitoring of one’s own behavior, together with
emotional ties to securities one could associate with private and public events. Permanent
monitoring, reflexivity, and attentiveness may seem unexceptionable today, indeed, even intrinsic
components of a “natural rational behavior” which serves as the normative foundation of many
economic models. The above arguments show how little “natural” or “given” and how much the
result of a cognitive nexus such behavior can be. Self-monitoring and emotional ties are elements
of the teleo-affective structures binding investors to the marketplace. They tie human actors to the
language and cognitive rules of the ticker, being justified and reinforced by these rules and
language. In the nexus of discursive modes, rules, and teleo-affective structures, human actors
and artifacts (of various kinds) are fused together in durable ties.
VIII. The Ticker as an Organizational Device
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How did this nexus, then, affect the organization of the marketplace? How did it put its
imprint on the broker’s office? In order to understand this better, we have to examine first how
the production of financial knowledge worked as an organizational device in the pre-ticker era.
During most of the 19th century, many stockbrokers were not specialized, but maintained
heterogeneous lines of trade. They acted as centers of competence, gathering and distributing
various kinds of information to their clients. They made use of their various business lines in
order to get access to this information, and to distribute it further. In this sense, their lack of
specialization was an advantage. They also actively used their networks and businesses in order
to attract new investors and promote the sale of financial securities. For example, the firm of
Richard Irvine & Co. traded in pig iron (they had a pig iron yard in Brooklyn) and iron futures
(among others). In their letters to clients, they offered not only this particular commodity, but
stocks too. When selling a used engine to a Southern railroad company, they also got information
about their state of affairs. Or when writing to clients about a successful shipment of fruit, they
offered some attractive stocks too, together with the latest New York quotations:
We have shipped to you care of Messrs Lampart and Holt, by this steamer, the apples
you ordered in your favor of the 20th September last. We are assured the peaches and
oysters are of the best quality, and trust they will prove so. Below we give you memo of
their cost to your debit. We think it well to mention that 1st Mortgage 6% gold
Chesapeake and Ohio Railroad bonds can now be bought here to a limited amount at
86% and accrued interest. They are well thought of by investors, and were originally
marketed by the company's agents as high as 14% and interest. We enclose today's stock
quotations.13
This, among others, makes clear why stockbrokers cherished good old letters. They were
a more efficient means of distributing information, networking, and deal-making—in short, of
producing knowledge and relationships at the same time. In this perspective, brokers were knots
in a network where knowledge, deals, private services overlapped. Clients did not have to visit
their brokers very often, since for all practical purposes letters worked very well. The empirical
data also speak against the telegraph as merely speeding up everything and making everybody
just more efficient. In the above example, relevant information cannot be separated from a
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complex narrative structure evocative of deep social ties, of an economy of favors, and full of
allusions impossible to render by means of a telegram.
One of the main social changes effected by the ticker was that it transformed the
stockbroker's office into a kind of community-cum-communications center, where investors
could spend the whole day watching quotations, talking to each other, and placing orders. The
technology of real time price quotations was quickly combined with that of the telegraph and
later the telephone. The telegraph and telephone capabilities of brokerage offices, their linkages
to the world, as well as their facilities for customers were advertised in the street, in front of the
office, on poles and on the facade. In the customers' room, rows of tickers (attended by clerks)
worked uninterruptedly, while clients seated on several rows of seats watched other clerks
updating the quotations board. The modern brokerage office had a separate telegraph room, an
order desk, a ticker room, and a back office. At the center of this spatial arrangement was the
ticker room. Advertising brochures praised the stockbroker's office as a model of efficient
communication, accuracy, and machine-inspired modernity:
A passenger standing on the observation platform in the engine-room of a modern
ocean-liner will observe great masses of steel, some stationary, some whirling at terrific
speed; he may go down into the boiler-room where is generated the power with which
the great ship is driven, but all this will give him only a crude idea of the actual
workings of the machinery of propulsion. He must know and be able to grasp all the
component parts of that machinery, and their relation to each other, in order to
appreciate what a tremendous undertaking it is to move this gigantic mass of men and
materials over the watery miles separating two continents. So it is with the machinery of
a large banking and brokerage house. A client may spend many days in the customers'
room, from which vantage point he will observe much, but his knowledge of the inner
workings of the machine, built to handle orders in the various markets, must still be
superficial. . . . Everything is run with clock-like precision. No matter how large a
13
Letter of Richard Irvine & Co. to J.A. Wiggins, London, Nov. 19 1872, New York Historical
Society.
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On Ticks and Tapes
business is being done, there is no confusion, the plant being designed to handle the
maximum volume of orders.14
One consequence was that the nexus of discursive modes, cognitive rules, and teleoaffective structures reinforced broker-investors networks and made them more stable: cognitive
organization was one of their central features. The ticker centralized and bundled knowledgeproducing activities in the broker’s office. Customers had to show up to an office regularly in
order to access this knowledge. As mentioned above, some took care to keep in touch regularly
even when they went on longer trips. This corroborates arguments formulated in economic
sociology, as well as in the sociology of knowledge, according to which economic transactions
are embedded in processes of knowledge production (Knorr Cetina and Bruegger 2001; Preda
2002). Another consequence was cognitive standardization: the ticker brought the same prices
(and the same price variations) to everyone at the same time. It also brought standardized
analytical instruments (charts) together with a standardized analytical (double bottom, head-andshoulders, etc.) and trading language. In this sense, it is an example of what Bruno Latour (1999:
28-29, 306) calls an "immutable mobile"—that is, a networking technology which allows the
transfer and the standardization of knowledge at the same time. By allowing this transfer, it binds
investors to networks and to financial exchanges. This nexus, with its stress on the scientific side
of financial investments, reinforced their social legitimacy and thus coped well with the overall
discourse about the "science of financial markets," so popular in late 19th century. It required
from investors exactly the qualities preached by manuals: attention, vigilance, a constant
observation of financial transactions and of price variations. For the investor, it becomes
reasonable to follow the market movements and to try being efficient. Fourthly, it shrank time
and thus contributed to increasing the velocity of transactions, at the same time attracting more
and more investors to the market: with that, the markets' liquidity was deepened.
The ticker threatened the monopoly of the older, larger brokerage houses. Access to prices
wasn’t bound exclusively to honor and personal connections any more. Having the right machine
and a few copper wires was enough. Power struggles were fought over who should be entitled to
14
The Ticker, Vol. 1, Nr. 4, February 1908: 7. See also The ABC of Wall Street: 27-28; The
Boston Stock Exchange. Boston 1893: Hunt & Bell. For period photographs of brokerage offices
see, for example, Guide to Investors. Haight & Freese's Information to Investors and Operators in
Stocks, Grain and Cotton. New York 1898: 62, 78.
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get access to prices; in 1889, in a short-lived attempt to drive bucket shops out, the NYSE banned
all stock tickers (Wyckoff 1972: 33).
The floor of the exchange was reshaped too. The stock exchange floor was organized in
specialized "crowds"—brokers and market makers trading a single security around a ticker, under
a streetlamp-like signpost.15 The ticker was clearly perceived as giving the New York Stock
Exchange a decisive advantage over European stock exchanges, and especially over the London
Stock Exchange, making it more abstract and less dependent on the honor system:
Not only is the "ticker" service better here than in London, but the American plan is far
superior to the English in furnishing first over these instruments, and later in the printed
stock lists, the actual number of shares and bonds dealt in, with their prices. A stock
ticker in London gives such bidding and asking prices as may be obtained by the
representatives of the Exchange Telegraph Company on the floor, but since the custom
does not prevail there to make open bids and offers, a large part of the quiet business
between brokers and dealers escapes the observation of the persons engaged in
collecting quotations.16
Themes like “organization” and “efficiency” became very actual. How to monitor and
collect quotations in an efficient way, how to transmit them further without missing anything
were topics regularly repeated by brokerage houses in their advertising brochures and manuals. In
this sense, at the institutional level the ticker triggered a process of self-monitoring similar to that
it had triggered at the individual level. Both the organization and the individual had to pay more
attention to what they did, to weigh courses of action, to monitor permanently their activities. The
decentralization of the trading floor was accompanied by the centralization of activities in the
broker’s office. In this sense, again, the ticker generated principles of efficient organization
superimposed on the sociolinguistic theory it disseminated.
Hence: the ticker acted as a complex organizational device, (1) introducing a new
profession (the stock analyst), (2) de-centralizing certain activities, while centralizing others, (3)
standardizing evaluation procedures, (4) reinforcing investor networks, and (5) encouraging, if
not triggering reflexive processes at the individual and organizational level.
15
The ABC of Wall Street: 19.
28
On Ticks and Tapes
IX. Conclusion
I open up the conclusion by reiterating one of the initial questions: in view of the above,
was the ticker really that useless and redundant? Certainly not. Was it just a speedy, transparent
medium? Far from it. This shows that our sociological understanding of how communication
technologies work on financial markets has to be revised.
In a historical perspective, we should not overvalue the telegraph’s and the telephone’s
role in financial exchanges. The empirical evidence about their real use in the transmission of
securities prices (and not the mere promotional hype) suggests that, before the ticker was
introduced, they were not used much by investors and brokers. Letters were powerful networking
devices.
With that, I come to my second argument, namely that communication technologies
should not be seen just as transparent media, speeding up the transmission of financial
information and making it only more efficient. This interpretation rather obscures the sociological
examination of “information.” What information is, depends, among other things, on the nexus in
which it is generated: before the ticker, minute price variations could not constitute any real
information for investors who were not permanently present in the marketplace, did not have the
memory of a whole herd of elephants and the computation capabilities of an army of accountants.
My argument here has been that financially-relevant communication technologies have to
be understood as nexuses of discursive modes, cognitive rules, and teleo-affective structures
inducing important changes both at the individual and at the organizational level (see Figure 3).
They broaden the reach of the market not only by their speed (which, however important, is not
enough), but by focusing the permanent attention of a public of investors and brokers, by binding
them to the unfolding of market events. The ticker made market turns visible as they happened:
the market is thus disentangled from its local, context-bound, contingent features and made into
something which is both abstract and visible in several forms to everybody at once. It is visible in
the flow of names and prices on the paper strip, but also in the financial charts, which are
nowadays produced in real time too.
Figure 3 about here
16
George Rutledge Gibson. 1889. The Stock Exchanges of London, Paris, and New York: 83.
29
On Ticks and Tapes
In this sense, we should ask ourselves whether the computer screen—the ultimate form in
which financial markets are visible to us—does not continue and develop the ticker principle. I
do not mean by this the mere fact that pixel tapes are running on, say, E*Trade monitors. What I
mean is that the computer screens used in financial markets work on the same principle of
visually processing the results of conversational exchanges, which now take place as on-screen
conversations. At the same time, computer screens re-process their output in real time, providing
financial workers and investors with prices, real-time price charts and real-time chart analyses,
coupled with real-time representations and analyses of political and economic events. The
principle of uninterrupted attention and presence is as valid today as it was in late 19th century, if
not even more valid. Seen in this perspective, the difference between networked computer
screens and the ticker (with the adjacent telegraph and telephone) is one of degree, not of
substance.
Hence, the instrument whose story I have told here is still present—not only on pixel
stripes, but deeply burrowing beneath the monitors’ shining surface.
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On Ticks and Tapes
Figure 1: The ticker as a medium and as a
machine
Medium
Input
Output=input
Machine
Creates new economic
branches
Increases efficiency
Machine
Increases productivity
35
Speeds up economic
processes
On Ticks and Tapes
Figure 2: Price recording as an interaction system
Conversational exchanges
Interaction system
Price list
sell
buy
sell
Prices
Back
office
buy
sell
36
Lake Shore….5.15
Michigan RR….10
Amalgamated….51
On Ticks and Tapes
Figure 3: The ticker as a nexus
buy
Buy sell buy sell buy sell buy sell buy sell buy sell buy sell buy sell
sell
Storm!
chart
buy
sell
I recommend
buy and sell
37
Sunshine!
I love stocks!