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article number 161
article date 09-04-2012
copyright 2012 by Author else SaltOfAmerica
A Penniless Thomas Edison Makes Some Money, 1869
by George Bryan

From the 1926 book Edison, the Man and His Work.

The Telegrapher Turns Inventor

After an adventurous railway journey, during which he was snowed in by a Canadian blizzard, Edison reached Boston. There was a five-minute interview with Superintendent Milliken, who gave him a job and asked him when he would be ready to report for work. “Now,” said Edison; and Milliken told him to be on hand at 5:30 that afternoon.

Milliken was wise enough to discern the sort of operator he was getting; but the night shift of the Boston office saw only an uncouth-looking young fellow, clad lightly for such freezing weather. They thereupon put their heads together to rag the new arrival from the “woolly West.” A seat at a special table was finally given to him. He was to take press from New York for the “Boston Herald”; but he did not know that his fellow-operators had arranged to have the message sent by one of the speediest men at the New York end.

Having begun slowly, the sender increased his pace until he had soon reached the limit of his ability—but Edison continued to receive with ease. Then the New York man tried slurring the words and running them together; but Edison’s experience in Cincinnati and Louisville had made him fully equal to this kind of thing. At last, when the message was about completed, Edison opened the key and advised New York, “Young man, change off and send with your other foot.” It is not recorded that Edison’s associates attempted anything further.


In Boston the Western Union office was on the ground floor; but it was in many ways scarcely an improvement over the quarters to which Edison had been used in the West. The premises had previously been occupied by a restaurant, and swarms of cockroaches had their lair between the skirting-board and the wall. At midnight an old Irish vendor, known as the “cake man,” would come around with eatables, and the operators would buy a bit of luncheon.

Then the cockroaches sallied forth. They became such a nuisance to Edison that on the wall beside his table he fastened two strips of tin-foil. He connected one strip with the positive pole of the battery that furnished current to the telegraph wires, and the other strip with the negative pole. A cockroach would climb up the wall; and when he came in contact with both strips at the same time, there was a flash and the cockroach, as Edison said, “went into gas.” A reporter for an evening newspaper wrote a half-column story about this ingenious device, but the night-manager did not fancy such publicity and the electrocutions were discontinued by request.

“Milt” Adams told how Edison had once rigged a similar contrivance in the cellar of the building in which the Western Union had its Cincinnati office. The place was infested with rats, and Edison so prepared two insulated plates connected with the main battery that a passing rat would readily complete the circuit. He called this arrangement his “rat paralyzer.”

One day the principal of a select Boston school for young ladies asked that a demonstrator be sent from the Western Union office to explain the Morse system of telegraphy to the “children.” Already known as the most intelligent of the operators, Edison was selected for this purpose; and being always glad of additional funds for his perpetual experiments, he agreed to “do the stunt.” Adams went along. He and Edison ran a telegraph line across the schoolroom. Edison took up his station on the platform, while Adams waited at the opposite side of the room. When the door was opened, in filed the “children”—about twenty young ladies, none younger than seventeen and all in elaborate toilettes. As to exactly what happened thereafter, Edison and Adams were not agreed. Each related that the other was so embarrassed he couldn’t utter a word. Each claimed to have saved the day. Edison, according to his version, when he viewed Adams’ dumb embarrassment, started in and “talked and explained better than I ever did before or since.”

Edison lived in a hall bedroom, which he shared with Adams when Adams was laid off and financially reduced to “absolute zero centigrade.” (“I generally had hall bedrooms,” was Edison’s later comment, “because they were cheap.” . . .) His meals he took at a boardinghouse about a mile distant. He was constantly studying and experimenting. This, with his work as an operator, kept him busy from eighteen to twenty hours a day. Once he bought a complete set of the works of Faraday. He triumphantly appeared with the volumes at his lodgings at four o’clock in the morning, and read until breakfast-time. Then he said to Adams, “I have got so much to do and life is so short, I am going to hustle.” With that, he started for the boarding-house on a run.

In those books of Faraday’s, Edison found a great stimulus. He liked them because of their clear explanations, free from complicated mathematical formula, and he tried almost all of the experiments. He browsed in the second-hand book-shops along Cornhill; and would spend his last cent for books, apparatus, and supplies, though he cared little about clothes. A new suit in which on one occasion he invested thirty dollars, was promptly ruined with acid. “That,” observed Edison, “is what I get for putting so much money in a new suit.”

He tried not only the Faraday experiments, but many others that he ran across. In a scientific journal he found directions for making nitro-glycerin, and he was attracted by the possibilities of the preparation. He and an acquaintance manufactured some, but tests that they conducted with a small quantity were so disconcerting that early one morning Edison put the remainder in an empty pop bottle and lowered it into the sewer.


Not always, however, did he escape accident. He had a borrowed induction-coil that he kept for experimenting in the shop of a man named Hamblet, who was then working on electrical clocks and who afterward, it is said, developed the Western Union system of distributing standard time. One day the young experimenter inadvertently took hold of both electrodes of the coil, and then he discovered that he couldn’t let go. The Grove battery was on a shelf; and so far as he could see, the only way to get free was to back away with the coil, so that the wires to the battery would dislodge the battery-cells. This would, of course, break the circuit; but the nitric acid, in which the negative plates of the cells were immersed, might splash. Edison closed his eyes and backed away. The acid was spattered over his face and ran down his back. He rushed to a near-by sink and dashed water over himself as well as he could; but his face was temporarily so disfigured that for two weeks he did not go out by daylight.

Walter P. Philllps, a fellow-operator in the Boston office, in after years wrote of Edison as spending his salary on helices and coils; eloquent in explaining his diagrams of quadruplex telegraphy; but no longer strongly attached to his once favorite work of receiving press report. According to Phillips, he wrote out 1,500 or 2,000 words of “press” in a hand so fine and a space so limited that the matter had to be copied for use by the newspaper compositors. Rebuked for this, he next made “copy” by writing but one word on a sheet, and that in the very center. After that, he was relieved of the press wire.

On Court Street, one Charles Williams, a maker of electrical apparatus, had a workshop. There Edison was welcomed; and there, with the aid of one of Williams’ workmen, he built a working model of his first patented invention. This was a vote-recorder, for which patent 90,646 was issued on June 1st, 1869. A telegraph operator named Roberts furnished capital to the extent of $100, and Edison’s attorney was Carroll D. Wright, later director of the eleventh census and for twenty years United States Commissioner of Labor.

The machine was designed to facilitate the taking of votes in legislative bodies. When a member closed a switch at his desk, the machine would record and count the vote. Edison thought it ought to be adopted by the Federal House of Representatives, and so he made the trip to Washington to demonstrate it before a committee. It worked to perfection, but the chairman of the committee informed the inventor that no invention could be less desirable for the House of Representatives than a vote-recorder. He made it plain that one of the means by which a minority might block ill-considered legislation was “filibustering”—a method of gaining delay and tiring the majority by long speeches, technical objections, and futile motions. And with filibustering, a vote-recorder would obviously interfere. Edison resolved to devote his abilities thence-forth to inventions for which there was likely to be a demand.

In accordance with this resolve, he invented a stock-ticker and introduced a ticker-service for which he had about forty subscribers. The appearance in 1867 of the first ticker—the invention of E. A. Callahan—had set many an operator to experimenting in the same direction. Edison journeyed to New York in an unsuccessful attempt to dispose of his ticker. He also devised an instrument with an alphabet-dial, for direct telegraphy between business houses. Under his direction, private lines were strung along the roofs. The instruments were so simple that the average person could in a few minutes, learn to operate one. He had them made in Hamblet’s shop. Gradually he was finding his true vocation.

After a time, “Milt” Adams went westward on his cycle of roving. Edison, for his part, decided to have done with telegraph operating and to devote himself to invention. Considerably in debt, but bound to improve his fortunes and to seek broader fields, he left the employ of the Western Union and quit the hub.

Under Way

When Edison started for New York, he had only money enough to pay for the boat trip. His instruments and books were perforce left in Boston. He not only was insolvent, but even lacked the cash to buy his breakfast when he went ashore. As he walked along one of the down-town streets, he passed a warehouse where he saw a tea-taster inspecting teas. He asked the taster for some of the tea, which the man kindly gave him. Such was his first meal.


He had an operator acquaintance in New York; but it chanced that this operator, when at last found after a considerable search, was likewise out of a job and had but a dollar to spare. To the tired, hungry Edison, however, a dollar was a hundred cents better than nothing. He proceeded to order apple-dumplings and coffee in Smith and McNeil’s restaurant, just across the way from Washington Market and long known, even beyond the limits of New York, for its good food. He once said that in all his life he never ate anything that looked more inviting. That same day, he applied for work with the Western Union; but there was no vacancy and he was put on the waiting-list. Somehow he got permission to pass the night in the battery-room of the Gold Indicator Company, and thus the problem of lodging was temporarily solved.

The Gold Indicator Company, and the “gold-reporting telegraph” that it controlled, owed their existence to certain special conditions of the time. Towards the close of 1861 the banks had suspended specie payments, and the Federal government had begun to issue large amounts of paper-money. Throughout the United States, with the single exception of California, gold ceased to be a medium of exchange. The national banks redeemed their notes in government paper. As the government fell more deeply in debt, its promises to pay came to be considered much less valuable than gold, and gold consequently went to a premium. In 1863 the price of gold in paper-money reached 170; in 1864 it touched the quotation of 285, though according to some authorities the actual price probably never went much above 250. This disparity in value between gold and government notes continued until the Federal treasury resumed specie payments on January 1st, 1879.

Under these circumstances, gold naturally became the chief object of speculation. In Wall Street, a Gold Exchange was introduced, under the direction of its own board and exclusively devoted to transactions in the standard metal. The “gold room” was the converging-point of the activities of “the street.” At first the quotations were chalked up on a blackboard, as they are today in brokers’ rooms. A small army of crowding, noisy messenger-boys carried the changing information to private offices. After a time, the vice-president of the exchange, Dr. S. S. Laws, invented an electrical indicator to exhibit the quotations, and this was operated with keys by the registrar of the board. It did not do away with the scuffling, noise, error, and loss of time involved in the system of messenger-boy distribution.

Finally Laws hit on the scheme of a central transmitting instrument, with indicators controlled therefrom in the offices of subscribing brokers. This gold-reporting telegraph, Laws patented. Having resigned from the exchange, he formed the Gold Indicator company, to which distribution privileges were granted. In a comparatively short time he had three hundred subscribers to his service. The transmitting instrument, a complicated and by no means quiet affair, was located in the company’s office and controlled by a keyboard on the floor of the gold room. The indicators were box-like constructions, with a horizontal row of dials travelling past a slot through which (as in fare-registers on street-cars at the present day) the figures were shown.

On the third day after his arrival in New York, Edison was sitting in the company’s office. He had not yet found employment; and apparently the battery-room was still his shelter by night. During the daytime he had been studying Doctor Laws’ telegraph system. All of a sudden, on this third day, the transmitter came to a standstill. There were two or three minutes of surprised silence—then up the stairway rushed some three hundred boys, all shouting at once that the indicators were out of order. The superintendent lost his head, and had not the slightest idea as to what was the matter.

At this juncture Edison stepped to the instrument, which, as it proved, he had been examining to good purpose—so good, in fact, that he now surmised where the difficulty might be, and quickly detected it. A contact-spring had broken and dropped between the two gear-wheels. Then in came Doctor Laws, in no very calm frame of mind. The superintendent was dumb; but on Edison’s saying that he believed he knew what the trouble was, Laws burst out, “Fix it! Fix it! - Be quick!” Edison, who thought Laws the most excited person he had ever seen, thereupon removed the broken contact-spring and set the machine at zero. A force of men was sent out to adjust the indicators; and in about two hours, service was renewed.

A standard stock ticker.

The upshot was that Laws, after a couple of interviews, offered to make Edison manager of the entire plant; and that Edison, having accepted, improved the Laws system in numerous ways and held the position until the Gold Indicator company was consolidated with the Gold and Stock Telegraph company. This company supplied a stock-quotation service that employed a type of indicator different from that of Doctor Laws. In this indicator, the invention of E. A. Callahan, two type-wheels printed a double line of characters upon a strip of paper tape. The quotations were sent from the Stock Exchange by the regular Morse system to a central station at 18 New Street, whence they were transmitted to various brokers. After the consolidation of the two companies, the Laws indicator was retired and Callahan’s new ticker took its place.

The most spectacular event of this period of speculation in gold, was the panic of September 24th, 1869—ever afterward known as “Black Friday.” Jay Gould and his partner “Jim” Fisk had already won an unenviable notoriety through their purchase of judges, corruption of legislatures, and alliance with the Tweed Ring. In August 1869, they embarked upon a cynical attempt to corner the gold market.

They seem to have believed that they had influence with Grant’s administration; and as they kept buying gold they drove the price rapidly upward. It is said they reasoned that as the price of gold rose, the price of western wheat would also rise to such a figure that the farmers would hasten to sell; whereupon enormous wheat shipments to the East would greatly increase the freight business of the Erie railroad, which they controlled. ‘Whatever their motive, probably no more thoroughly heartless example of financial buccaneering has ever been known in this country. At the eleventh hour their attempt was defeated by George S. Boutwell, secretary of the treasury, who ordered the sale of gold by the government. The market broke with the “Black Friday” panic, when in one trading day the price of gold dropped from 162 to 135. Much of this panic Edison saw; and part of it he was.


Quotations were at first forced upward so rapidly that September day, that Doctor Laws’ gold indicators simply couldn’t keep step with them. It was one o’clock in the afternoon before Edison, by vigorous efforts, managed to get the machines abreast of the correct gold-room figures. This was his chief concern; and when the right quotation had been reached, he calmly watched the frenzied throngs that surged about the exchanges and blocked the streets. A Western Union operator congratulated him with, “Shake, Edison, we are 0. K. We haven’t got a cent.” Late into the night the crowds continued aimlessly to walk the streets; late into the night the lights burned in brokers’ offices, where clerks toiled amid a snarl of records and accounts; and late into the night, Edison was striving to get the refractory indicators down to the low figure.

There was something almost amusingly characteristic in the phlegmatic detachment of this young man of twenty-two. He had already invented a stock-ticker; he was now the manager of the Gold Indicator Company; and he was afterward interested, as both inventor and manufacturer, in stock-tickers. Yet he never speculated; and to him the scenes of Black Friday were but so many curious phenomena. A dozen years later, when the first central station of his incandescent electric lighting system was being installed in New York and a method of distribution worked out, while shares of the Edison Electric Light company were advancing in price from $100 to $3,500 (and gas stocks rapidly falling), he appeared to his associates equally calm. He was occupied with what he considered his real business—the job of getting the station properly started.

A week after Black Friday—on October 1st, 1869—was published in the “Telegrapher” what is believed to be the first advertisement of electrical engineering service ever printed in this country. It announced the partnership of Edison and Franklin L. Pope, a young telegraph engineer who also had been connected with the Gold Indicator Company, and who subsequently was editor of the ‘Electrical Engineer” and a recognized expert. The style of the new firm was “Pope, Edison & Co.,” but J. N. Ashley, publisher of the “Telegrapher,” also became a partner. The office was at 78 Broadway, but during most of his working hours Edison might have been found conducting experiments in a little shop in Jersey City. He boarded with Pope at Elizabeth, which he usually reached on a train leaving Jersey City at one in the morning.

Pope and Edison invented a “gold printer,” for recording gold quotations and sterling exchange, and designed for use principally by exchange brokers and by importers. They also undertook to build and equip private telegraph lines. Their business was absorbed by the Gold and Stock Telegraph Company; and before long that company was acquired by the Western Union. Marshall Lefferts, its new president, asked Edison to see what he could do for the improvement of the stock-ticker, which was still crude in many respects. Money for Edison’s experiments was supplied by Lefferts, and Edison developed a series of inventions on which he obtained patents.

One, for example, was a device called the “unison stop,” whereby all the indicators might be brought to zero directly from the central office, and thus made to record in unison with the transmitting instrument and with one another. If an indicator happened to “go wild,” it might thus be set right without the delay and trouble involved in sending repair-men to the subscriber’s office. The final result of these experiments of Edison’s was the Edison Universal printer, which came into very extensive use.

One day Edison was summoned to Lefferts’ office, and Lefferts told him that he wished to settle the matter of the inventions. “How much,” he said, “do you think you should receive?” Edison, though feeling that $5,000 would be about right, had decided to accept $3,000; but now even this seemed to him so large a sum that he replied by asking Lefferts to make an offer. “How would $40,000 strike you?“ demanded Lefferts—and Edison came (to use his own words) “as near fainting as I ever got.” He was able to speak to the effect that he thought the offer a fair one; and in three days he called by appointment to sign a contract and get his money. This was in the form of a check that is stated to have been the first he had ever received. For a first check, it was doing decidedly well.

Edison went to the bank on which it was drawn, and passed it in at a paying teller’s window. The teller passed it back and said something that Edison in his deafness failed to catch. With the notion that be must somehow have received a worthless piece of paper, Edison sought Lefferts, who explained that the check must be endorsed and sent a clerk with him to identify him. The paying teller, who seemed to think the matter highly amusing and who must have considered himself a very funny fellow indeed, thereupon paid the entire amount in bills of small denominations. Edison laboriously stowed them in every pocket; and then, fearing that they might be stolen, sat up all night. In the morning, bulging, he again appealed to Lefferts, who helped him to deposit the money and open his first bank account.

He had arrived in New York without work and without the means to buy a meal. Within a space of time that seems almost unbelievably brief, he had demonstrated his ability as an inventor, won a place for himself in the world of affairs, and gained financial independence. The story resembles one of the narratives of Horatio Alger.

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