Fintech History: Caselli and the Pantelegraph
Banking Before Electronics
Before the advent of electronic technologies, banking was a world steeped in tradition, characterized by physical vaults and paper ledgers. This was the world of George Bailey and Ebenezer Scrooge, where clerks would spend their days carefully recording each transaction into bound books that lined the walls of the banks. Money was passed from hand to hand, and the security of these transactions often necessitated armed guards. The pace of banking was dictated by the postal system, with settlements taking days to finalize. Financial dealings were often built on personal relationships and community standing.
The Telegraph
Outside the imposing walls of the banks, the telegraph was revolutionizing how information was shared over long distances. Giovanni Caselli, an Italian physicist and inventor, recognized the potential for this new form of communication to transform how financial transactions were conducted and verified, paving the way for more secure and efficient banking practices across vast distances.
The Pantelegraph
In the late 1850s, Caselli began working on a system for transmitting images and texts over telegraph lines. In 1860, he successfully demonstrated his invention, dubbed the pantelegraph, by electronically sending an image of composer Gioacchino Rossini’s signature across a distance of 87 miles.
The pantelegraph’s ability to transmit exact copies of documents, like signatures, over telegraph lines, provided banks with a new tool to verify transactions quickly and securely.
Setting the Electronic Stage
This application of Caselli’s reinvented telegraph technology in finance represented an early but critical use of electronics in the financial sector, laying a practical foundation for the sophisticated electronic financial systems that would develop in the following decades.
