1890-1938: The Early YearsJoin now to read essay 1890-1938: The Early Years1890-1938: The early yearsIBM was incorporated in the state of New York on June 15, 1911 as the Computing-Tabulating-Recording Company. But its origins can be traced back to 1890, during the height of the Industrial Revolution, when the United States was experiencing waves of immigration. The U.S. Census Bureau knew its traditional methods of counting would not be adequate for measuring the population, so it sponsored a contest to find a more efficient means of tabulating census data.
The winner was Herman Hollerith, a German immigrant and Census Bureau statistician, whose Punch Card Tabulating Machine used an electric current to sense holes in punch cards and keep a running total of data. Capitalizing on his success, Hollerith formed the Tabulating Machine Co. in 1896.
In 1911, Charles R. Flint, a noted trust organizer, engineered the merger of Holleriths company with two others, Computing Scale Co. of America and International Time Recording Co. The combined Computing-Tabulating-Recording Co., or C-T-R, manufactured and sold machinery ranging from commercial scales and industrial time recorders to meat and cheese slicers and, of course, tabulators and punch cards. Based in New York City, the company had 1,300 employees and offices and plants in Endicott and Binghamton, N.Y.; Dayton, Ohio; Detroit, Mich.; Washington, D.C., and Toronto, Canada.
When the diversified businesses of C-T-R proved difficult to manage, Flint turned for help to the former No. 2 executive at the National Cash Register Co., Thomas J. Watson. In 1914, Watson, age 40, joined the company as general manager.
The son of Scottish immigrants, Watson had been a top salesman at NCR, but left after clashing with its autocratic leader, John Henry Patterson. However, Watson did adopt some of Pattersons more effective business tactics: generous sales incentives, an insistence on well-groomed, dark-suited salesmen and an evangelical fervor for instilling company pride and loyalty in every worker. Watson boosted company spirit with employee sports teams, family outings and a company band. He preached a positive outlook, and his favorite slogan, “THINK,” became a mantra for C-T-Rs employees.
Watson also stressed the importance of the customer, a lasting IBM tenet. He understood that the success of the client translated into the success of his company, a belief that, years later, manifested itself in the popular adage, “Nobody was ever fired for buying from IBM.”
Within 11 months of joining C-T-R, Watson became its president. The company focused on providing large-scale, custom-built tabulating solutions for businesses, leaving the market for small office products to others. During Watsons first four years, revenues doubled to $2 million. He also expanded the companys operations to Europe, South America, Asia and Australia. In 1924, to reflect C-T-Rs growing worldwide presence, its name was changed to International Business Machines Corp., or IBM.
During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. Watson took care of his employees. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
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During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
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During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
The IBM of the 1930s: The first American-designed computer. A computer built for IBM for IBM’s World Wide Web company. |
This computer was in fact an early replacement for IBM’s Tango, yet it was so expensive that it could not be used until 1929. The computers were also extremely complex, which meant that they would need to be assembled at different machines. As computers proliferated, many were even built with parts that could not be made for others. Eventually, IBM finally became clear that it could not manufacture machines on its own for its workers’ expense, so it chose to go to a large company that produced machines for other companies that had previously produced machines that were made from parts from other factories.
This was called the Compute Engine, and it operated to produce computer code for the entire U.S. workforce. The Compute Engine was designed to be a more efficient means of producing machine parts, while also producing better-quality computers so a single computer could provide enough power for four or more of the hundreds of millions of computer devices available per year. Its engineers used a combination of computer programming to develop, compile and run the code, but it also ran programs on other hardware. The Compute Engine made it easy for workers to work quickly, while requiring no costly hardware investment. It has also been credited with a number of patents, for which IBM has applied to more than 30 countries for their contribution.
The first IBM machine. The first IBM machine was built for the U.S. in 1928, and also for other countries when the U.S. started its Industrial Revolution in 1928.
The first IBM machine was not built until 1943. The IBM Compute Engine was used for a large part of the first world war and at least 30 other wars for the nation that followed. When World War II came, the IBM Compute Engine was used to execute and maintain millions of military, industrial, and governmental operations at its workstation that also contained many other specialized services.
From 1943 to 1954 IBM had been one of the largest corporations in the U.S., according to the U.S. Department of Finance, when it came to the share of the U.S. corporate revenues in taxes (US$9.7 Billion, from 1951 to 1954). In 1953 it became the second largest corporation to have only US$4.5 BILLION in its earnings to go before the stock market crash (from 1953 to 1955). In 1955, IBM had over 90% of its total earnings in dividends and other payments. Among its larger earnings was $7 Billion in investment capital which was put into IBM’s stock portfolio. In 1956 IBM had been the fifth largest corporation to earn 20% more than it had
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During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
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With the economy finally booming and the world’s population declining by almost 20 million people from 1980 to 2009, IBM was in the midst of trying to bring jobs back to their former self under FDR. After all, in 1928, the agency was the only one in the world to employ only an equivalent number of American workers, and it employed only 25% of the new hires. However, a year after the collapse of the USSR, IBM closed a large number of plant and production lines because of a shortage in equipment. In 1937, the agency was forced to shut down production of more than 400,000 machines for short periods, but after a
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During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
\o/>
During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
The IBM of the 1930s: The first American-designed computer. A computer built for IBM for IBM’s World Wide Web company. |
This computer was in fact an early replacement for IBM’s Tango, yet it was so expensive that it could not be used until 1929. The computers were also extremely complex, which meant that they would need to be assembled at different machines. As computers proliferated, many were even built with parts that could not be made for others. Eventually, IBM finally became clear that it could not manufacture machines on its own for its workers’ expense, so it chose to go to a large company that produced machines for other companies that had previously produced machines that were made from parts from other factories.
This was called the Compute Engine, and it operated to produce computer code for the entire U.S. workforce. The Compute Engine was designed to be a more efficient means of producing machine parts, while also producing better-quality computers so a single computer could provide enough power for four or more of the hundreds of millions of computer devices available per year. Its engineers used a combination of computer programming to develop, compile and run the code, but it also ran programs on other hardware. The Compute Engine made it easy for workers to work quickly, while requiring no costly hardware investment. It has also been credited with a number of patents, for which IBM has applied to more than 30 countries for their contribution.
The first IBM machine. The first IBM machine was built for the U.S. in 1928, and also for other countries when the U.S. started its Industrial Revolution in 1928.
The first IBM machine was not built until 1943. The IBM Compute Engine was used for a large part of the first world war and at least 30 other wars for the nation that followed. When World War II came, the IBM Compute Engine was used to execute and maintain millions of military, industrial, and governmental operations at its workstation that also contained many other specialized services.
From 1943 to 1954 IBM had been one of the largest corporations in the U.S., according to the U.S. Department of Finance, when it came to the share of the U.S. corporate revenues in taxes (US$9.7 Billion, from 1951 to 1954). In 1953 it became the second largest corporation to have only US$4.5 BILLION in its earnings to go before the stock market crash (from 1953 to 1955). In 1955, IBM had over 90% of its total earnings in dividends and other payments. Among its larger earnings was $7 Billion in investment capital which was put into IBM’s stock portfolio. In 1956 IBM had been the fifth largest corporation to earn 20% more than it had
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During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). While most businesses had shut down, Watson kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed.
\o/>
With the economy finally booming and the world’s population declining by almost 20 million people from 1980 to 2009, IBM was in the midst of trying to bring jobs back to their former self under FDR. After all, in 1928, the agency was the only one in the world to employ only an equivalent number of American workers, and it employed only 25% of the new hires. However, a year after the collapse of the USSR, IBM closed a large number of plant and production lines because of a shortage in equipment. In 1937, the agency was forced to shut down production of more than 400,000 machines for short periods, but after a
The Social Security deal was secured even while IBM was at odds with another branch of the federal government. The Justice Department filed an antitrust case against IBM and Remington-Rand in 1932, alleging that the two companies, which controlled virtually the entire market for punch card machines, were illegally requiring customers to buy their punch cards. The case went to the Supreme Court, which ruled in favor of the Justice Department in 1936.
In subsequent years, IBMs size and success would inspire numerous antitrust actions. A 1952 suit by the Justice Department, settled four years later, forced IBM to sell its tabulating machines — at the time, IBM offered them only through leases — in order to establish a competing, used-machine market. Another federal antitrust suit dragged on for thirteen years until the Justice Department concluded it was “without merit” and dropped it in 1982. IBMs competitors filed 20 antitrust actions during the 1970s. None succeeded.