Lynn Korwatch located on top of Telegraph Hill. George F. Sweeney and Theodore F. Baugh were the two individuals to present the idea of a wooden semaphore on top of Telegraph Hill. A semaphore is a system in which one uses two flags or poles and sends signals in an alphabetic code. Sweeney and Baugh expanded their system by placing a signal station on Point Lobos, which is located 20–30 miles from port in San Francisco. The reasoning behind this was that there was high demand from people wanting to know when the ships were arriving at an earlier time so that
Direct holding system while in transit, securities were not available for use or investment, causing what has been called "pipeline liquidity risk". Because of these disadvantages, the "direct holding system" has been replaced by the indirect holding system. Settlement by physical delivery of certificates worked adequately until the 1960s, when a sharp increase in trading volumes overwhelmed the system. The amount of paper that physically had to be moved around led to the famous "paperwork crisis" on Wall Street in the late 1960s. This provided the impetus for the introduction of the indirect or multi-tiered holding system. Although the indirect or multi-tiered holding