Necessity is the mother of invention. Thomas A. Edison started his long career of invention with the gold market.
“The decade after the Civil War was the heyday of speculation,” wrote Historian Daniel Boorstin. Indeed, speculation in the gold market was a special concern of the Lincoln Administration after Congress passed greenback legislation in February 1862. Speculators vied to get inside information on the course of the Civil War. Both Congress and the Lincoln Administration tried fruitlessly to limit that speculation.
“When Edison came to New York City in 1869,” wrote Boorstin, “the telegraph was already serving the Gold Exchange with a new ‘gold indicator’ that transmitted numerals as electrical impulses and instantaneously sent information of market fluctuations to distant places. At the height of the speculative mania, when the gold indicators broke down, Edison found the trouble, fixed the machines, and was engaged by the Gold Indicator Company at the then handsome salary of $300 a month. He made a series of inventions serving the gold market. Then Edison and a few friends set themselves up as ‘electrical engineers’ to devise further improvements in telegraph apparatus. When the powerful Western Union discovered his talents, he was added to company’s team of inventors and given a half-million-dollar order to manufacture twelve hundred stock tickers of his new design. In 1871 Edison could report to his mother that at only twenty-four years of age he had become a ‘Boated Eastern Manufacturer.’”
Boorstin noted that once the inventor set up shop at Menlo Park, New Jersey, “Edison intended to turn out ‘a minor invention every ten days and a big thing every six months or so.’ By an ‘invention ‘ Edison meant a social, or more precisely, a marketable product. And this gave his very idea of ‘invention’ a distinctively American cast.” Indeed, Edison’s inventions mirrored the changing nature of American society.
Unfortunately perhaps, the markets have now become wedded to the kind speculative frenzies that the telegraph helped facilitate. There is, after all, only one letter of difference between inventor and investor.
Boorstin noted that Edison’s first patent was granted at age 21 for a “telegraphic vote-recording machine to automatically count votes in Congress. But because it would diminish the opportunity of a minority to filibuster, there was no market in Congress.
Even the market for information is limited by the desire of politicians to accept, understand and use information. Times haven’t changed so much.