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, bi-planes 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.

01/05

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.

01/10

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-Co., 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.

01/05

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.

“I had the leisure to turn to a field which has since interested me more than any other one—that is, the consolidation of corporations, the forming of what used to be known as ‘trusts.’ I have been called ‘the father of trusts,’ although sometimes I think I have been more nearly in the relation of godfather.”

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, bi-planes 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.

01/05

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.

01/10

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-Co., 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.

01/05

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.

“I had the leisure to turn to a field which has since interested me more than any other one—that is, the consolidation of corporations, the forming of what used to be known as ‘trusts.’ I have been called ‘the father of trusts,’ although sometimes I think I have been more nearly in the relation of godfather.”