The COMPUTING-TABULATING-RECORDING COMPANY (CTR) was a holding
company of manufacturers of record-keeping and measuring systems
subsequently known as
In 1911 financier and noted trust organizer, "Father of Trusts", Charles R. Flint amalgamated (via stock acquisition) four companies: The Tabulating Machine Company, International Time Recording Company, Computing Scale Company of America, and the Bundy Manufacturing Company ; creating a fifth company - The Computing-Tabulating-Recording Company. Located in Endicott, New York it was renamed International Business Machines (IBM) in 1924.
The individual companies of CTR continued to operate using their established names until the businesses were integrated in 1933 and the holding company eliminated. They manufactured a wide range of products, including employee time-keeping systems , weighing scales , automatic meat slicers , and punched card equipment .
* 1 Companies amalgamated
* 1.1 Tabulating Machine Company * 1.2 Computing Scale Company of America * 1.3 Bundy Manufacturing Company * 1.4 International Time Recording Company
* 2 Amalgamation
* 3 Organization and leadership
* 3.1 Early Watson era
* 4 Watson\'s strategies * 5 Organizational change and strategies * 6 See also * 7 Further reading * 8 Notes and references * 9 External links
TABULATING MACHINE COMPANY
Hollerith's plant in 1893.
Herman Hollerith initially did business under his own name, as _The
Hollerith Electric Tabulating System_, specializing in punched card
data processing equipment . In 1896 he incorporated as the
_Tabulating Machine Company_ and in 1905 reincorporated as _The
Tabulating Machine Company_. Hollerith's series of patents on
tabulating machine technology, first applied for in 1884, drew on his
work at the
U.S. Census Bureau
In 1896 the Tabulating Machine Company leased some machines to a railway company but quickly focused on the challenges of the largest statistical endeavor of its day – the 1900 US Census . After winning the government contract and completing the project, Hollerith was faced with the challenge of sustaining the company in non-Census years. He returned to targeting private businesses both in the United States and abroad, attempting to identify industry applications for his semiautomatic punching, tabulating and sorting machines. Flint bought the business for $2.3 million (of which Hollerith got $1.2 million) in 1911.
COMPUTING SCALE COMPANY OF AMERICA
The Computing Scale Company of America was a holding company, organized in 1901 and amalgamating as subsidiary companies The Computing Scale Company, Dayton, Ohio; The Moneyweight Scale Company, Chicago, Illinois; The W.F. Simpson Company of Detroit, Michigan; and The Stimpson Computing Scale Company of Elkhart, Indiana. In 1891, Edward Canby and Orange O. Ozias, two businessmen from Dayton, Ohio, purchased the patents for the newly invented computing scale and incorporated the Computing Scale Company for the production of commercial scales.
BUNDY MANUFACTURING COMPANY
Main article: Bundy Manufacturing Company Front cover of a January 1920 sales catalog showing clocks, scales and tabulating equipment)
The first time clock was invented on November 20, 1888, by Willard Bundy, a jeweler in Auburn, New York . A year later his brother, Harlow Bundy, organized the Bundy Manufacturing Company , and began mass-producing time clocks.
In 1900, Bundy Manufacturing sold its time recording business to a new company, the International Time Recording Company. Bundy Manufacturing went on to produce adding machines.
In 1906 Harlow Bundy moved his business into a new three-story brick building in Endicott, New York.
INTERNATIONAL TIME RECORDING COMPANY
In 1894, J. L. Willard and F. A. Frick of Rochester, New York , formed the Willard & Frick Manufacturing Company as the first time card recorder company in the world.
In 1900 George W. Fairchild , an investor and director of the Bundy Manufacturing Company, led the formation in Jersey City, New Jersey, of the International Time Recording Company (ITR) which consolidated the time recording business of Bundy with the Willard in 1935 IBM renamed the magazine _Think_ .
Flint amalgamated the four companies into the new CTR holding company. CTR had a bonded indebtedness of $6.5 million, three times its current assets, of which $4 million was borrowed from the Guaranty Trust Company. Flint assigned it a value of $17.5 million, while its tangible assets only added up to $1 million. Flint stated that the various manufacturers produced _similar but not identical products_ and that the
..."allied consolidation", instead of being dependent for earnings upon a single industry, would own three separate and distinct lines of business, so that in normal times the interest and sinking funds on its bonds could be earned by any one of these independent lines, while in abnormal times the consolidation would have three chances instead of one to meet its obligations and pay dividends.
CTR's 1911 stock prospectus reported net earnings, from May 1, 1910 to April 30, 1911, of $950,000 for the four companies .
ORGANIZATION AND LEADERSHIP
CTR and the four amalgamated companies had 1,300 employees and offices and plants in Endicott and Binghamton, New York; Dayton, Ohio; Detroit, Michigan; Washington, D.C.; and Toronto, Ontario. CTR was located in Endicott. The chairman was George Winthrop Fairchild , who, having been a member of Congress since 1906, was not expected to take an active part in management. When the first president left after just one month, however, Fairchild took over and ran CTR until 1912, when Frank N. Kandolf, formerly CEO of the International Time Recording subsidiary, took over. Flint was a member of the board of CTR (and later IBM) until his retirement in 1930. Hollerith, then 51, joined the CTR board and served as a consulting engineer until he retired ten years later.
EARLY WATSON ERA
Thomas J. Watson 1917 Organizational Chart This style of chart, pyramids dividing into five parts, was required by Patterson. One of the many things Watson brought from NCR to CTR.
Thomas J. Watson Sr. , along with 29 other NCR officials, had been convicted in 1913 of various antitrust violations for their roles in a widespread National Cash Register scheme to run used cash register retailers out of business (see NCR Corporation § Expansion ). Watson's own extortionate writings were used as evidence against him. That lesson taught Watson to thereafter keep very little in writing. In 1914, having been fired from NCR Corporation and with a prison sentence threatening his future, Thomas J. Watson approached Flint, a leading financier, for assistance in finding a similar job. Despite his apparently perilous situation he was still very clear as to the type of job he wanted. He had already turned down a number of offers. He wanted control of the business for himself, and to be able to earn a share of the profits. Flint offered him CTR. Flint was, as described earlier, a great promoter of trusts and was presumably less worried about Watson's impending jail sentence. The other members of the CTR board were less sanguine, asking who was to run the company while he was in prison. As a result, they only gave him the title of general manager. After Watson had been at CTR for 11 months, the Appeals Court ordered a retrial. Although he refused to sign a Consent Decree, a new trial never took place, and he was duly promoted by the board of CTR to the position of president. Among the many things Watson brought to CTR from NCR was the motto _THINK _.
Surprisingly, in view of his past record at NCR and his later
colossal influence on IBM, Watson initially maintained a very low
profile (almost tantamount to seeking obscurity) for the next decade
until 1924, when the chairman George W. Fairchild died and he finally
took over sole control. For the whole of the previous decade, in some
ways uncharacteristically, he consistently deferred to Flint,
Fairchild and Hollerith.
In the meantime he took personal charge of 400 demoralized and
poorly-supervised salesmen. His stated objective was to produce a
sales force in the NCR mold, as well as advanced machines that would
be superior to any of the competitors' machines. In a series of small
meetings he presented his 'competitive proposition' to the sales
force. Despite the aggressive-sounding title, right from these
beginnings there was as much emphasis on the ethics and philosophies
of the business as there was on sales techniques. In particular he
stressed sincerity, integrity and loyalty, saying that they should do
nothing that could be construed as 'unfair competition' and should
conduct themselves in an 'honest, fair and square way' -- something
which would be radical even today. Musical events, even
The other philosophies that motivated CTR and
ORGANIZATIONAL CHANGE AND STRATEGIES
CTR was a company with three separate elements:
- Computing Scale interested Watson the least and the largest element of this (Dayton Scale) was eventually sold off in 1933, to Hobart Manufacturing . After the sale the company, to Watson's chagrin, began making money.
- Time Recording was at first the main revenue earner, and was used by Watson as a vehicle for diversification, though none of these was great success.
- The tabulating business most interested Watson, perhaps because it was closest to his NCR experience. This was where he directed much of his attention and by the early 1930s this had indeed become the largest piece of CTR.
In 1920s, while still under Fairchild's domination, Watson focused on achieving a significant degree of growth. Revenue grew from $4.2 million in 1914, when he took over, to the peak of $16 million in 1920. The price of this, however, was a precarious cash position. In 1921, sales fell to $10.6 million and Watson faced a cash-flow crisis. Once again CTR was to be funded, and rescued, by Guaranty Trust. Watson was forced to cut costs across the board, including reducing R ">
Hollerith, beginning with the 1890 census, had rented his machines so that his company could provide the maintenance necessary to assure reliable operation. Watson recognized other benefits including the idea that renting equipment was inherently more stable, since the income continued when equipment orders would otherwise have dried up. Less obviously, it forced sales personnel, aware that they might lose the rental, to maintain regular contact with customers, thus ensuring — even as early as the 1930s — that customer relationships were well-managed. This approach became central to IBM's activities.
Thereafter, Watson deliberately lagged on the introduction of new
products, though but not on research. Even after competitors launched
new products he still waited until the market was ripe for large scale
development. Watson recognized the importance of sound R&D, appointing
James W. Bryce in 1922 to manage this (moving him from its Time
Recording Division, which he had joined in 1915). However, Watson
continued to be personally involved R Meredith, Suzanne M. (2005).
NOTES AND REFERENCES
* ^ _A_ _B_ Certificate of Incorporation of
Computing-Tabulating-Recording-Co, 14th day of June 1911