At Dickerman Prints, we do a lot of scanning and repairing of old photos: many of which have edges that look like as jagged a postage stamp. Referred to as a deckled edge, there were a few theories floating around the photo lab as to why it was done. My favorite was that it was a marketing gimmick and the photos were cut that way using a special machine.
The “real” answer proved considerably harder to find, as most searches turned up tutorials on creating decked edges in Photoshop. A cool trick, but not a history lesson. So, after extensive looking, the best answers I have found are:
Commercially made “deckle edge” photographs didn’t have a true deckle edge, but a simulated deckle edge cut with a die. The paper was available from manufacturers pre-trimmed (Kodak made it until the later ’60s or early 70′s) and paper cutters were sold that produced the effect. The commercial deckle edge was a simulation of the true deckle edge often seen on fine art paper and thus on hand coated photographic prints.
~Source: The Photo Forum
and
When paper is produced, it naturally has a deckeled edge. Paper produced on a paper machine (in rolls) has two deckeled edges, while paper produced in sheets (ie, artist’s paper) usually has four.
I suspect that having deckeled edges on photographs was an outgrowth of pictorialism. The pictorial school of photography believed that the best photography emulated traditional painting. Having four deckeled edges on a photograph looked something like a painting on a sheet of artist’s paper.
~Source: Answers.Yahoo.com
What is YOUR theory on why folks used to use deckled edges?
And, check out a great tutorial on creating deckled edges in Photoshop!