The first graduating class walked with canes, drawing from Ivy League school tradition. While the practice died out around 1924, Tom Karsten revived the tradition in 1993. Walking Cane Company, owned by Paul Sellers, made the walking sticks and sold them wholesale to the students at $59. Karsten organized a senior cane ceremony that coincided with a student picnic celebrating William Marsh Rice.
With the graduation of Karsten, the walking stick revival came to an end. Based on some cursory research, senior societies at Dartmouth University still use ceremonial canes at commencement. Does anyone know of other universities that still adhere to this tradition?
To read more on the original canes and the 1993 revival, you can peruse these Rice Thresher articles.
http://www.dartmouth.edu/~commence/facts/canes.html
The above link describes the usage at Dartmouth College (not university)