Era 01 · 1800s — 1920s

Telegraph & Newspaper

Reaction speed

Days to Weeks

Pulse cycle

4.5s

Financial news traveled by telegraph wire then printed in morning papers. A London statement took 3 days to reach New York traders. Information was scarce and power concentrated in those who had it first.

Events in this era

Jun 1815

Rothschild and Waterloo

Nathan Rothschild received news of Wellington's victory at Waterloo nearly a full day before the British government did — via a network of private couriers and carrier pigeons. The wilder versions of the legend (that he shorted and then cornered the bond market that afternoon) are exaggerated. The underlying fact — a private actor with a better information network outpacing the state — is the original version of the entire timeline.

First documented finance-over-state information edge

Aug 16, 1858

First transatlantic telegraph message

On August 16, 1858, Queen Victoria sent a 99-word message of congratulation to President James Buchanan over the freshly-laid transatlantic telegraph cable. The transmission took sixteen and a half hours. Before the cable, news between London and New York moved at the speed of a steamship — about ten days. After it, market prices in London and New York could be exchanged the same day. The cable failed within a month from a voltage error, and a working line was not restored until 1866. But the experiment had proven that the financial centers of two continents could trade on the same information.

London–NY arbitrage window: 10 days → 1 day

1907

Panic of 1907 — Knickerbocker Trust Bank Run

A failed attempt by a copper magnate to corner the United Copper Company stock triggered the collapse of Knickerbocker Trust, one of New York's largest. The run spread to other trust companies inside 48 hours. No Federal Reserve existed. There was no lender of last resort. A full-blown banking crisis could only be stopped by private coordination, which is what happened.

NYSE −50% from peak

1907

Rockefeller's Statement

John D. Rockefeller told a reporter that sound stocks were cheap and that he personally was buying. The quote ran in the morning papers. That alone was enough to stabilize sentiment across a market where, at the time, the word of one wealthy private citizen could effectively substitute for a central bank's statement.

Dow +25% in following weeks

Next era →

Radio & Wire Services

Loading signal…