Before the Computer: IBM, NCR, Burroughs, and Remington Rand and the Industry They Created, 1865-1956
402
Before the Computer: IBM, NCR, Burroughs, and Remington Rand and the Industry They Created, 1865-1956
402Paperback(Revised ed.)
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Overview
Before the Computer fully explores the data processing industry in the United States from its nineteenth-century inception down to the period when the computer became its primary tool. As James Cortada describes what was once called the "office appliance industry," he challenges our view of the digital computer as a revolutionary technology. Cortada interprets reliance on computers as a development within an important segment of the American economy that was earlier represented largely by such instruments as typewriters, tabulating machines, adding machines, and calculators. He also describes how many of the practices of the office appliance industry evolved into those of the computer world. Drawing on previously unavailable industry archives, the author adds to our understanding of IBM's early history and offers short corporate histories of firms that include NCR, Burroughs, and Remington Rand. Focusing on the United States but also including comparative material on Europe and Asia, Before the Computer will be a unique source of knowledge about the companies that built office equipment and their enormous impact on economic life.
Originally published in 1993. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.
Product Details
| ISBN-13: | 9780691600109 |
|---|---|
| Publisher: | Princeton University Press |
| Publication date: | 03/08/2015 |
| Series: | Princeton Legacy Library , #1775 |
| Edition description: | Revised ed. |
| Pages: | 402 |
| Product dimensions: | 6.00(w) x 9.10(h) x 1.00(d) |
Read an Excerpt
Before the Computer
IBM, NCR, Burroughs, and Remington Rand and the Industry they Created, 1865â"1956
By James W. Cortada
PRINCETON UNIVERSITY PRESS
Copyright © 1993 Princeton University PressAll rights reserved.
ISBN: 978-0-691-04807-9
CHAPTER 1
From Opportunities to Typewriters
Before computers were available, mechanical aids for computing and managing data existed. These products represented a broad range of mechanisms that supported data input (typewriters and tabulating machines), calculation (adding machines and calculators), communications (telegraph and telephone), and dozens of other devices to increase the ability of office and manufacturing personnel to manage their firms more effectively, to increase control over their jobs, and to improve their ability to make better decisions. All of these tools were in use before 1900 and collectively constituted a recognizable part of the American business scene by the 1920s — five decades before the first useful digital computers. These early tools shaped many features of the modern office and helped make possible large manufacturing facilities. By coming in an age of increased reliance on the results of technology and the mechanization of work, these devices and their users collectively formed a new industry that, by the late 1880s or early 1890s, was recognizable as an office products or, in the parlance of the day, an "office appliance" industry complete with companies, customers, products, associations, publications, and business conventions. That cluster of organizations and events (with the exception of the telephone) emerged in the 1950s as the data-processing industry.
The central issue of part one is the early development of the office appliance industry in the period from the end of the American Civil War to the start of the 1920s. In this period, various technologies emerged to address the needs of offices and plants but without the cohesion that "systems" of products offered later. The amount of activity, variety of products, and extent of their use, both in the United States and in Europe, far exceeded what previous historians have noted. NCR cash registers appeared on all continents, tabulating gear was used from Russia to California, adding machines were sold by the thousands, and nearly one hundred firms were active. Before World War I, patterns of behavior and a sense of industry identification existed. Publications of the period identified a new industrial sector while its volume of activity made typewriters and telephones common items in many offices. The need for more control, the ability to manage ever-growing amounts of paper and information, and competitive pressures made it obvious that it was no accident that a large, important office equipment market would exist in the 1920s.
Many of the practices of this industry in the 1920s–1930s and later, in the era of the data-processing industry, were worked out in the years before World War I. Practices at NCR in the 1880s and 1890s were carried over into the IBM of the 1920s and beyond by its founder and former NCR executive, Thomas J. Watson. Hardware leasing and sale of supplies by computer firms in the 1950s points to similar practices by Herman Hollerith, who sold tabulating equipment before the turn of the century. Antitrust problems emerged before World War I at NCR, in the 1930s and 1940s at IBM and Remington Rand, and in the 1950s at AT&T — all before the computer was widely available. Although the technology upon which the data-processing industry was based changed and always gave off an image of newness, the industry's business practices were always very conservative.
Historical issues evident in the 1865-1930 period mimic those faced by students in the 1950s to 1970s. How does one define the industry? Too often the student perspective of this industry was narrower than the facts suggested. There are those who see the industry as comprising just equipment manufacturers' and others who see the industry through company histories, particularly as extensions of IBM. To some, it includes telecommunications whereas to others it does not. They have defined the industry variously as the "computer industry," the "semiconductor industry," as part of the "electronics industry," and the "knowledge industry." All definitions either left out the largest element of the industry — users such as the typists of the 1890s or programmers in the 1980s — or minimized their roles. Vendors never did; they called them customers. One needs to see them as part of the new industry in some cases.
Similar definition problems exist for the earliest period in the history of data processing. But to appreciate fully the significance of office technology, one must broaden the definition of what constituted the industry in the late 1800s. It included vendors, engineers and mechanics who developed products, and equipment users.
Many disparate lines of development that preceded 1920, superficially at least, did not seem connected. Various lines of activity included, for example, the invention, marketing, and acceptance of the typewriter and, to an important corollary extent, the telegraph. Another thread involved the evolution of the cash register. A third concerned adding machines and calculators. Other miscellaneous devices dotted the office to a lesser extent, offering possible confusion. The one aspect of development that enjoyed much attention — Hollerith's equipment — must be set within the broader context of the industry; his was not the only or the largest portion of the new industry in its formative stages. The development and use of typewriters, cash registers, adding machines, calculators, and tabulating equipment provided a collection constituting the origins and early makeup of the modern data-processing industry. Technologies applicable to one set of products lent themselves to other types of devices (e.g., keyboards). In many cases, they were sold to the same set of customers. Most types of devices were marketed by the same companies. Thus the NCR of the 1880s was, by the late 1920s, also selling adding and calculating machines. The same was true of Burroughs, IBM, and Remington Rand.
How does one measure industry activities? One defines industry size and documents its financial performance, given the fact that much hard data is not available; narrates what products were introduced and why; and represents their users. In the first four chapters, I devote attention to each of these elements, arguing that the industry existed much earlier and was larger and more significant than previously thought, and that many of the features of the modern office can be attributed to the robustness and nature of this new industry. By the end of chapter 4, those who work within the information-processing industry in the 1990s should recognize much that is familiar in the work of their predecessors in the 1890s. Finally, the effects on a broad range of organizations evident in the years before World War II are later seen in the 1960s–1990s again looking for control and purposeful activity and using this technology and its industry for support.
Economic Preconditions and Influences
The development of new technology and products was no accident. Nor was it by chance that these items were bought, sold, and used and, thereby, made possible the inception of the data-processing industry. New technology to help manage information developed and emerged in response to perceived needs, not as an uncontrolled or accidental by-product of the pursuit of science and engineering. Reaction was to a real need to manage larger amounts of information (data) in shorter periods. The earliest and most fundamental impetus for modern data processing came from the positive economic conditions that prevailed in the United States for so many decades.
Individual events in this industry were either the result of some specific issue or were changed by longer-term and less obvious economic and technological trends. Most students of technology and mechanization have recognized the interrelationship of the problem. Those who do, understand that as technologies advance and create new jobs, economic impact may not be predictable when, for instance, jobs are simultaneously lost with little advance warning of the number or types that will be affected. Historians have recognized the correlation between the shift in employment from agricultural to manufacturing sectors as a direct and obvious element that influences the rise of data processing. Corporations as new economic elements after the Civil War, with their increasing ability to control production and distribution of goods and services, highlighted the variety of influences that affected all industries, including the fledgling office equipment suppliers.
The industry began most intensely first in the United States and second in Europe. First and more frequently in the United States, individuals and their firms spotted opportunities and exercised good inventive engineering and effective marketing. But economic conditions contributed mightily as well. Modernization of the American economy, with its broad move to industrialization, led to a "takeoff' in the 1840s that lasted until long after the introduction of computers. This move ensued despite civil war in the 1860s, financial panic in the 1870s, and a severe depression in the 1890s. The fundamental circumstance of long-term growth of the economy promoted confidence in bold ventures to, for example, the developers of railroads and, later, to large steel and chemical companies.
Total output of commodities rose at 4.6 percent before the Civil War and then at 4.4 percent between 1870 and 1900. Manufacturing share over agriculture grew proportionately as well. Manufacturing value added expanded at about 6 percent per year from 1870 to 1900 while that portion attributed to durable goods hovered at 42.5 percent. Per capita output grew rapidly too, averaging annual rates of 21.1 percent (compared to 1.45 percent between 1840 and 1860).
The size of the American market was very important as a critical factor that made possible economic expansion in the late 1800s. Alfred Chandler commented that during "the second part of the nineteenth century the American domestic market was the largest ... and fastest growing market in the world." He noted that in 1880 American national income and population were 1.5 times larger than Great Britain's, twice that of the British in 1900, and three times theirs by 1920. The population of the United States grew dramatically in the late 1800s too, but it was the rate of growth that provided such striking evidence of the dynamism in this national economy. Rates of growth of 25 percent between 1869 and 1878 and 1889 to 1898 were not uncommon. Such rates of growth in population and in national product exceeded those of all other industrialized nations. Other technologically advanced countries, such as Germany and Britain and, to a lesser extent, France, also were shifting to larger and more industrialized economies. A more homogeneous income distribution in the United States hastened adoption of new technologies while encouraging mass production, mass marketing, and mass distribution.
Conversely, those who studied Europe's economic modernization for the same period have argued that largeness of population and national economy gave Britain an initial edge over other European states in starting her industrial revolution in the 1700s but later served as a barrier to expansion on the continent, which was dotted with so many smaller national economies. These states imposed tariff barriers, practiced protectionism too frequently, and had smaller populations to support economic transactions. As economies of scale presented problems, so too did the smaller economy upon which a nation depended for infusions of capital.
The most obvious ways that largeness could influence an industrializing economy were through availability and productivity of labor. Between 1870 and 1960, productivity of American workers more than quadrupled. Employment jumped sixfold to more than 65 million; 12.5 million U.S. workers in 1870 expanded to 45.3 million in 1920. During the same period, the percentage of workers in industry increased from 32 percent in 1870 to 32 percent in 1920 while the absolute number of workers also rose. The service sector rose from 16.2 percent in 1870 to 25.1 percent in 1900, then dropped to 17.7 to 17.8 percent until the 1920s.
Office appliance customers came from outside the agricultural sector until very late in the twentieth century; thus the expansion of the manufacturing and service sectors proved critical to the success of this new industry. The industrial sector included about 25 percent of the U.S. labor force from the late 1800s to World War II and closer to 40 percent during the war years of the 1940s. Another sector, illustrated by James R. Beniger's work, grew from negligible numbers before 1865 to significant proportions by 1917. Frequently labeled the information sector (a phrase coined in hindsight), it consisted of that portion of the work force who handled data (bookkeepers, teachers, professors, statisticians, etc.). That community grew to 4.8 percent in 1870, jumped to 6.5 percent in 1880, then to 12.4 percent in 1890. The depression in the 1890s probably restrained this sector to 12.8 percent in 1900, but it grew to 17.7 percent by the end of 1920.
Increasingly, expanding organizations managed more people, who, if in the information sector, handled more information. By the 1860s, the volume of data being handled was rising. The trend accelerated in subsequent years, contributed to the ascendancy of office management, and increased bureaucratization — seedbeds of motivation and need for those who wanted to mechanize data handling. A by-product was the increase in American clerks from 1 to 2 percent of the work force in 1870 to more than 10 percent by 1940. The growth trend continued into the era of the microcomputer in the late 1970s.
For organizations that needed to handle greater amounts of information, reliance on the availability of people and technology became pressing. The availability of people to handle information provided one reason for data processing's success. This result is as true today as it was in the 1870s or 1880s. These clerks, accountants, and other "knowledge workers" became the most important general economic input for the new industry. The economic value of what they added to a product or service influenced directly the justification for information-handling technologies, individuals, dramatic in their singleness, influenced events too by inventing products and selling them through corporations thereby giving truth to Watson's idea that the "power of one" was, indeed, significant.
Labor productivity in this period was impressive and a closely related element. The GNP per capita grew steadily in general terms from the 1870s to the 1990s despite the panic of 1873, the depressions of the 1890s and 1930s, and the recessions that dotted American economic life after World War II. These rates of growth usually exceeded those of labor in Britain and in Europe. More importantly, however, anybody working in the American economy could have concluded that increases in productivity and, hence, standard of living and output were made possible by using new technologies. Real product per capita rose throughout the century. Growth in the early 1900s came despite economic fluctuations before 1917. The bottom line is that by 1870 the American economy had a full head of steam and was fed further between 1870 and 1910 by expansion across industrial America in steel, electricity, other forms of technology, and so forth, some of which was to make up the new data-processing industry in the twentieth century.
The GNP also rose in absolute dollar volumes, doubling in almost every decade before World War I (see table 1.1). In short, a nation that had 9.6 million workers in 1870 had, in the process of more than doubling these by World War I, increased its output per capita and the overall volume of goods and services and experienced dramatic shifts from agriculture to manufacturing. In turn, these trends heralded a postwar period in which the American economy could scarcely operate without the aid of corporate and governmental bureaucracies, all of which used information technology.
(Continues...)
Excerpted from Before the Computer by James W. Cortada. Copyright © 1993 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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Table of Contents
List of IllustrationsList of Figures
List of Tables
Preface
Acknowledgments
Pt. 1 Origins of a New Industry, 1865-1920
1 From Opportunities to Typewriters
2 Adding and Calculating Machines
3 Hollerith and the Development of Punched Card Tabulation
4 Cash Registers and the National Cash Register Company
5 Rudiments of an Industry Identified
Pt. 2 An Age of Office Machines, 1920-1941
6 Economic Conditions and the Role of Standardization
7 Products, Practices, and Prices
8 Commercial and Scientific Applications of Punched Card Machines
9 International Trade in Punched Card Machines
10 The Great Depression in the United States
11 IBM and Powers/Remington Rand
12 Other Accounting Machines and Their Uses
13 Vendors, Practices, and Results
Pt. 3 World War II and the Postwar Office Appliance Industry, 1941-1956
14 Economics, Government Controls, and Applications
15 The Role of Major Vendors, 1939-1946
16 Industry Structure, Vendors, and Practices, 1945-1956
17 Business Volumes
18 Conclusion: The Roles of Marketing, Distribution, and Technology
Notes
Index