The Key was a Latchstring

In pioneering days of Colonial America, the "key" to the lock of the house often hung on the outside of the door. It was a length of string. Doors were latched on the inside with a pivoted wooded bar or bolt, one end dropping into a slot in the jamb. Attached was a piece of string that was threaded through a small hole to the outside. To the visitor, the dangling string was an immediate welcome, as pulling on it, raised the bolt and opened the door. This lock and key became the origin of our expression of hospitality, "the latch string is always out."