The Computing-Tabulating-Recording
Company, the precursor to IBM, was founded
on June 16, 1911. At its beginning, it was a
merger of three manufacturing businesses, a
product of the times orchestrated by the
financier, Charles Flint. From these humble
beginnings sprang the company that Thomas
Watson Sr. would mold into a global force in
technology, management and culture.
In 1911, biplanes dotted the air and Ford Model Ts appeared in
the streets. Forward-thinking people wired their homes for electricity
and installed their first telephones. In a Belfast shipyard, workers
were finishing the hull of the biggest passenger ship ever, the Titanic.
The booming US economy was creating a new hunger for information.
There was a need to keep track, to understand and to inform.
Into that milieu stepped financier Charles Ranlett Flint. He
worked out of an office on Broad Street, just off New York’s Wall
Street, and invested in shipbuilding, munitions, rubber, starch and the
production of caramel. By the early 1900s, Flint had become friends
with Theodore Roosevelt, William McKinley, Orville Wright, Andrew
Carnegie and other giants of politics and business.
Starting in 1900, Flint attempted to build a number of trusts by
merging several small companies to create one dominant player.
One of these trusts was in time clocks—the kind factory workers
would punch on the way in and out of work. The clocks helped
employers keep track of hours worked and hourly wages. Flint took a
number of companies that made recording time clocks, including the
time recording business of Bundy Manufacturing in Binghamton, NY,
rolled all the companies into one and called it International Time
Recording Co. (ITR).
Early International Time Recording Company products
The first Dial Recorder, 1888.
Model time clocks in ITR service office, 1925.
Employees punching in on ITR dial recorders, 1926.
The 1914 lineup of time recording products from ITR.
Employees of Mexico’s Power and Light Co. clock in on ITR time clocks.
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Around the same time, Flint rolled up several companies that
made computing scales, which weighed items and added up the cost of
whatever was placed on the scale. One of the largest of those
companies was the Dayton Scale Company of Dayton, Ohio. Flint
rolled all the companies into the Computing Scale Company of
America, and made Dayton the trust’s headquarters.
Early Computing Scale Company products
A Dayton meat slicer.
A Dayton coffee mill.
A Dayton coffee mill.
A Dayton meat grinder.
“Dayton Money Making Machines.”
“The Complete Computing Scale.”
Scales in a Mexico butcher shop, 1928.
A Dayton computing cheese cutter.
A Dayton candy scale.
The Dayton scale assembly plant, 1918.
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Through the early 1900s, ITR grew modestly and Computing
Scale struggled. Flint, searching for a way to help the companies,
realized that both were, at their core, about collecting, quantifying and
analyzing information—a mission that would actually be the mainstay
of the company through the next century.
He was also at the time becoming interested in another
information-based company, Herman Hollerith’s Tabulating Machine
Co., based in Washington, DC. Hollerith had built the tabulating
machine to count the 1890 US Census. It sorted and counted
information recorded by punching holes in cards, and Hollerith had
begun selling the machines to governments, railroad companies and
retailers.
In 1911, Flint bought out Hollerith, and then merged the
Tabulating Machine Co. with Computing Scale, ITR and what
remained of the Bundy Manufacturing Co. The new information-
based entity was named the Computing-Tabulating-Recording
Company, or C-T-R. Headquarters moved to New York, and the
company operated factories in Endicott, NY, Dayton, Ohio and a few
other cities.
Very quickly, Hollerith’s tabulator emerged as the most
promising technology in C-T-R’s catalog. Before the merger, the
machines had been used to conduct population censuses in a variety
of countries, including Austria, Canada, Denmark and Russia. Not
only could the machines count faster, but they could understand
information in new ways. In a census, for instance, a single card,
about three inches by seven inches, could be punched with holes that
form an information portrait of a person—city of residence, age,
nationality, job and more. Hollerith’s contraptions were able to sort
through millions of cards and count how many teachers lived in
Chicago, Illinois, or count any other subset of the population. Society
could learn things it never knew it could learn, and at speeds no one
thought possible.
Businesses quickly realized that the portraits on those cards
didn’t have to be citizens, but of a product a company sells, or a freight
car on a rail line, or an insurance customer. Early adopters of the
electric tabulation method included the freight office of the New York
Central Railroad and the Eastman Kodak Company, which used a
tabulating machine to keep track of customers and salesmen.
Despite the progress the tabulating machine line was making, as
a whole C-T-R stalled in its first years after the merger. So, in 1914,
Flint hired Thomas Watson Sr. to run the company. It turned out to be
an inspired move.
Over the following decade, Watson forged the disparate pieces of
C-T-R into a unified company with a strong culture. He focused
resources on the tabulating machine business, foreseeing that
information technology had an ever-expanding future and literally
creating the information industry.
Watson also began expanding overseas—beyond the UK, Canada
and Germany where its products were already sold—taking tiny C-T-R
global. By 1924, he renamed C-T-R with the more expansive name of
International Business Machines.
The computing scale and time clock businesses fell away. IBM
grew to become the most significant player in every stage of the
evolution of information technology over the 100 years after it was
first formed.
C-T-R in the Watson Sr. era
The Endicott, NY, toolmakers group, circa 1917.
A sampling of C-T-R’s 1920 product display. Note: “The more it costs to do business, the less
you can tolerate waste.”
Share No. 00000 of the Computing-Tabulating-Recording Company capital stock.
A 1924 storefront marks the “Computing-Tabulating-Recording Company, Manufacturers of
International Business Machines.”
Thomas J. Watson Sr.’s February 13, 1924, letter explaining C-T-R’s new name—International
Business Machines Corporation.
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In 1911, C-T-R had US$800,000 in net income. In 2010, IBM’s
net income was US$14.8 billion. One IBM share in 1915, adjusted for
all splits and stock dividends, would be equal to 11,880 shares today.
Through the years, the company has changed ideas about how
corporations should operate, and contributed cultural touchstones
such as the THINK signs, punched cards, the IBM Selectric
typewriter, the IBM PC and the Watson computer that won the
Jeopardy! TV game show in 2011.
It has been a rich and historic century.
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