The Demon Electric Pencil joke
This appears to be an ordinary graphite pencil, but you tell your friends that it can write either red, white or blue. They fail to get the pencil to do this. The laugh is on them when you take the pencil and use it to spell out the words red, white or blue. The illustrated advertisement from a Davenport catalogue is either a more complicated version with a green wire, or it may be that this wire is missing on this particular example.