At least once a year, some DXer or contester re-starts the perennial question of why the signal report exchanged by every DXpedtion or in every contest is always 59. This is a dangerous road of inquiry, for implicit in the question is the expectation that logic and reason should be the basis of amateur radio activities. When it comes to contesting and DXing, logic and reason are qualities rarely in evidence. Tradition is the triumphant rule in most matters, as it is here. All signal reports are 59 because of tradition. But not the tradition which you might think.
Most contesters and DXers assume the 59 signal report is merely a shorthand way of exchanging the required information without having to think . After all, signal reports are subjective, much like interpretations of the speed limit signs on the highway. Readability 5, perfectly readable. Well, that is when the splatter and QRM of the guy running 1.25 kHz above you isn't wiping you out. Signal strength, 9, very strong signal. On a quiet band, if I had a six element monobander at 100' pointing your way, I'm sure you would be very strong.
But the common 59 signal report we exchange today does not derive from the oft quoted RST system of signal reports. To understand why, and where, we got the 59 exchange from, we must dig back into the very earliest days of amateur radio.
It was 1929 and amateurs radio operators were pushing the boundaries of radio technology and DXing. A group of British amateurs decided to sponsor a test to see which amateur stations could work the farthest and most DX. Today, we would call this a DX contest, but this was before such organized events were conceived.
The British group decided that to prove a valid contact had been made, they would assign each station participating in the test a unique number that they would exchange with each station they contacted, which would then be reported to validate the contact.
A Welsh amateur radio operator by the name of Ergryad ap Tywysog was very keen on proving his station was the best in the British Isles. Ergryad has assembled a monstrous AM station that put out a dominant signal, so he jumped into the test full bore.
Unfortunately, the organizers of the DX test had done a good job of publicizing the event, but had failed to adequately communicate the need to obtain a unique number for each station. Thus, there was some chaos on how the test was supposed to work. Ergryad understood the rules and had gotten his unique identifier number. But Ergryad had a bad habit of randomly switching between speaking English and Welsh, and often mixed the two, which made him difficult to understand. During the test, Ergryad, who had been assigned the number 253, would give his exchange as, "Fi nifer two-fi-tree." In Welsh, "Fi nifer" means "my number".
Needless to say, not many other radio amateurs of the day understood or spoke Welsh. Ergryad's signal was so strong though, he worked almost all the stations on the air, both in Europe and in North America. The other amateurs, many not knowing how the DX test was supposed to work, assumed that Ergryad was saying "Five-Nine Two-Five-Three" just with a thick Welsh accent, and assumed that the five-nine was a signal report and the two-five-three was a serial number. So they quickly adopted the format and began making DX contacts.
After the DX test ended, the sponsoring group realized what had happened. Rather than try and correct the very widespread misunderstanding, they adopted the new format. It proved so popular, that other groups began to adopt it for tests they sponsored. By the time the concept of organizing a formal radio contest developed, the Five-Nine 'signal report' was ingrained among DXers. It wasn't until the mid- to late-60's that high speed phone operators began to realize that careful enunciation was slowing down their rates and hurting them competitively and they developed the technique of giving the signal report as "Fi-Ni", which is actually very close to Ergryad's original exchange. It also laid the foundation for the future founding of the Lost Island DX Society and it's Fi-Ni Report.