Technology

and Culture
The International Quarterly of the
Society for the History of Technology

OCTOBER 1990, VOLUME 31, NUMBER 4

THE UNIVERSITY OF CHICAGO PRESS
High-Technology Calculation in the Early
20th Century: Punched Card Machinery
in Business and Government
A R T H U R L . N O R B E R G

Information-handling techniques changed dramatically in the last

quarter of the 19th century with the introduction of mechanical
contrivances for counting and for analyzing data. Calculators could
perform all four basic arithmetical functions;' bookkeeping machines,
similar in most respects to calculators, could generate various types of
ledgers; and tabulating systems could analyze data stored on punched
cards.2 The effect of the tabulating system was substantially different
from that of other business machines, such as desk calculators,

D R . N O R B E R G is director of the Charles Babbage Institute and

associate professor in the Program in History of Science and Technology
at the University of Minnesota. He is grateful to William Aspray, Martin
Campbell-Kelly, and I. Bernard Cohen for many helpful suggestions.
Research for this article was part of a larger project supported by the
National Endowment for the Humanities (RO-21098-85) and the National
Science Foundation (SES-8420481), whose generosity is gratefully
acknowledged.
The basic arithmetical functions were difficult to handle mechanically.
Addition involved two distinct operations: the addition of digits and the
carrying of figures. Various techniques were devised for these two
operations. Multiplication was essentially repeated addition. Division was
very cumbersome and was analogous to ordinary long division.
Subtraction often involved a switch for reversing the motion of the main
shaft but keeping the rotation of the handle constant. In business
calculations, credits were entered as nines complements and debits as
ordinary numbers, so that subtraction was not done directly. According
to I. Bernard Cohen, at the beginning of the 20th century the scale with
which mechanical calculators were used shifted. It was the introduction
of the keyboard and the key-driven machines, plus the high level of
reliability, that made them so generally acceptable. For details on the
operation of calculators, see E. M. Horsburgh, ed., Handbook of the Napier
Tercentenary Celebration or Modern Instruments and Methods of Calculation
(1914), Section D, vol. 3 of the Charles Babbage Institute Reprint Series
for the History of Computing (Los Angeles, 1982). See also D. Baxandall,
"Calculating Machines and Instruments," in Catalogue of the Collections in
the Science Museum (London, 1926); and "Instruments et machines a
calculer," Catalogue du Musee, Section A (Paris: Conservatoire National des
Arts et Metiers, 1942).
2 For a discussion of the introduction of these mechanical devices, see

James R. Beniger, The Control Revolution: Technological and Economic Origins

753
of the Information Society (Cambridge, Mass., 1986).
© 1990 by the Society for the History of Technology. All rights
reserved. 0040-165X/90/3104-0002$01.00
754 Ar thur L. Norberg
because of its contributions to data analysis and its role in preparing the
way for the more comprehensive computation device, the electronic
digital computer. Tabulator systems became an integral part of business
and government practice in the period after 1920. And in the 1930s, with
the advent of the Social Security system, ties between business and
government were cemented as more and more of the same data were
gathered by each for different purposes. For example, business uses of
data facilitated the transition to wage and tax reporting demanded by the
government to administer the Social Security program. Tabulators
became a necessity in defense plants during World War II. After the war,
business and government sought electronic computers more readily
because of their experience with tabulating machines. Yet, for the most
part, recent histories of computing ignore not only this precursor role
but also tabulators themselves.3.;
These histories do address the development of calculators and the
work of 19th-century computing figures, primarily Charles Babbage and
Herman Hollerith. They call attention to the introduction of punched
card machinery in the Census Bureau and, sometimes, to the increasing
significance of International Business Machines. But they leave the
impression that the significance of punched card machinery is limited to
Hollerith's initial invention. They discuss the introduction but not the
growth and diffusion of the technology, perhaps because of an implicit
interest only in "firsts." To be sure, James Cortada's study offers an
array of statistics about business machines in the United States between
1920 and 1940 that implies a substantial role for tabulators.' Yet even
Cortada's work does not tell the entire story. Although he lists the range
of activities in which these machines were used, he does not discuss
their operations or specific applications; hence we cannot assess their
significance in light of later events. In fact, it was at the stage of
application that tabulator machinery had its greatest influence on
American business and governmental activities.
Appreciating the role of the tabulator in business and government
requires linking these developments, the task of this article. First is the

3 The re is no discussion of tabulators in Michael R. Williams, A History of

Computing Technology (Englewood Cliffs, N.J., 1985); about five pages are
devoted to tabulators in Herman H. Goldstine, The Computer from Pascal to
von Neumann (Princeton, N.J., 1972); similar brief discussions can be seen
in Brian Randell, ed., The Origins of Digital Computers: Selected Papers, 1st, 2d,
and 3d eds. (New York, 1973, 1975, 1982); and Charles J. Bashe et al.,
IBM's Early Computers (Cambridge, Mass., 1986).
4 J a m e s Cortada, A History o f Data Processing in the United States (Westport,

Conn., forthcoming).
Punched Card Machinery in Business and Government 755

introduction of new tabulating mechanisms to the 1890 Census, a

story that has been widely told.' Second is the rise of companies to
manufacture, modify, and market these machines and techniques; the
principal U.S. companies in tabulation were IBM (originally Computing-
Tabulating-Recording Company), which traces its origins back to the
Hollerith company called Tabulating Machine Company (1896), and
Remington Rand, which traces its history in computation to Hollerith's
competitor, the Powers Accounting Machine Company (1911).6
The third development is the application of punched card machinery to
activities ranging from business accounting and reporting to
scientific analysis and to cryptology as the United States became
increasingly involved in complex international affairs.' Each of these
developments will be considered here in an effort to uncover the
elements that stimulated the growth of punched card machinery and
fostered interest in faster and more widely applicable techniques.

5 On the census, see Hyman Alterman, Counting People: The Census in

History (New York, 1969), and Leon E. Truesdell, The Development of Punch Card
Tabulation in the Bureau of the Census 1890—1940 (Washington, D.C., 1965).
Details about the events surrounding the beginnings of the Hollerith
company can be found in Geoffrey D. Austrian, Herman Hollerith: Forgotten
Giant of Information Processing (New York, 1982).
6 A minor part in tabulating was played by the Burroughs Adding

Machine Company, National Cash Register, and the Underwood Elliot

Fisher Company, although they played a more substantial role in
automating business activities. Histories of these companies for the period
before 1940 vary both in extent and quality. IBM has received the most
attention, no doubt because it had over 80 percent of the tabulating
machine business in the United States. On IBM see William Rodgers,
THINK: A Biography of the Watsons and IBM (New York, 1969); T. G. Belden
and M. R. Belden, The Lengthening Shadow: The Life of Thomas'. Watson
(Boston, 1962); S. Engelbourg, International Business Machines: A Business
History (New York, 1976); and Bashe et al. (n. 3 above); also see
"International Business Machines, " Fortune 5 ( January 1932): 34—40. No
such attention has been paid to the other companies on this list, but for
basic information a few items can be consulted. On Remington Rand, see A
History of Sperry Rand Corporation, printed by the Recording and Statistical
Company Division of Sperry Rand Corporation, September 1964; on
Burroughs, see Burroughs (Centennial History) (Detroit, 1985); on NCR, see
Isaac F. Marcosson, Wherever Men Trade: The Romance of the Cash Register (New
York, 1945), and Celebrating the Future 1884—1984 (Dayton, Ohio, 1984).
7 Here the literature is diverse, of uneven quality, and spread over many

sources. The admirable work of David Kahn describing intelligence uses

(The Codebreakers: The Story of Secret Writing [London, 1966]) can be highly
recommended. No summary exists for business uses. Indeed, the recent
histories of computation gloss over the tabulator era in their rush to move
from Hollerith to electronic tabulation in the post-1945 era. One exception
is the treatment of tabulator history by Martin Campbell-Kelly in William
Aspray, ed., Computing before Computers (Ames, Iowa, 1989). For scientific
uses of tabulators, several contemporary sources are extremely useful; the
best U.S. source is Wallace J. Eckert, Punched Card Methods in Scientific
Computation (New York, 1940; CBI Reprint Series vol. 5, Cambridge, Mass.,
1984).
756 Arthur L. Norberg

Following a description of the needs that gave rise to the invention of

the tabulator and the invention itself, I will examine the histories of the
industry and applications of the technology in two periods, the system
development period of 1900 to 1920, and the application period of 1920
to 1940.
The basic element of the tabulator system was the punched card.
Perforations on such cards represented pieces of data. They were made
at predetermined, numerically arranged positions in the card. The
system was flexible enough to accommodate many analytic purposes,
from an agricultural census to control of fabric designs in textile
manufacturing. The perforations could be sorted, counted, and
tabulated by a series of machines, automatically, as often and in as
many different ways as desired by the operator. The punched card, as
contrasted with products of the other business machines, could be
used for many purposes.8.'
Between 1890 and 1940 many changes took place in tabulating
machines and especially in their application. Their capabilities were
enhanced by the increasing adoption of electrical connections and by
the arrangement of machines into systems capable of more complex
tasks. Such machines were employed by the government in analyzing
census data, by business in the inventory of parts and products, and
by scientists in calculating mathematical and astronomical tables.
The digital computer's lack of historical precedent suggests, too
readily perhaps, that the industry that produces such machines, even
the culture that uses them, must also be unprecedented. In fact, many
of the distinctive patterns of corporate competition, government
support, and attention to market feedback in which the digital
computer has flourished can be discerned long before the advent of the
first "true" computers. Specifically, when the trajectory of mechanical
computation is examined its technical progress, its applications, and
its effects in business and government the similarities to digital
computing become far more striking than the differences. Such an
approach, rather than isolating the computer from its context and
underscoring discontinuity, offers a way of seeing a new computational
technology as embedded in existing social, political, and cultural
relationships. A now-familiar pattern of activity among business,
academic, and government institutions emerged not in the 1940s, but
in the second half of the last century, the period in which many
thinkers have perceived the advent of modernism, and took
8 For complete details on the workings of a punched card system, see Edmund C.

Berkeley, Giant Brains or Machines That Think (New York, 1949). Perhaps the best available
account of how the punched card systems actually functioned can be found in Bashe et al.,
IBM's Early Computers (n. 3 above).
Punched Card Machinery in Business and Government 757

firm root through the activities of the succeeding century. The

emphasis in this work is on mechanical machine development
and application between 1880 and 1940.
Business Needs
The history of mechanical computation is intimately connected
with a general rise in business activity after 1850, as well as
governmental concern with data on population and demographic
changes and, somewhat later, with changes in academic problem
solving. Even though this article focuses on the United States, it
should be noted that these are international phenomena closely
intertwined with an increasingly global economy.' As Eric
Hobsbawm notes in his recent book The Age of Empire, "The major
fact about the nineteenth century is the creation of a single
global economy, progressively reaching into the most remote
corners of the world, an increasingly dense web of economic
transactions, communications and movements of goods, money
and people linking the developed countries with each other and
with the undeveloped world. "10 Merchant shipping doubled
between 1870 and 1914, the consumption of foodstuffs
increased, and distribution companies multiplied." Between 1885
and 1915 U.S. railroads continued to expand at the same rate
they had expanded in the previous thirty-five years.
The rise of business interest in mechanical computation
parallels a rapid change in the domestic economy. By the middle
of the 19th century, major industrial sectors such as railroads,
iron and steel, and petroleum were taking off, or about to. As
each of these industries expanded, it outgrew local sources of
capital. At the same time, rapidly industrializing America
attracted large amounts of foreign capital. 12 These phenomena
engendered demands among investors for information on
companies about which they could have little firsthand
knowledge. Few if any companies provided financial reports
before 1870, but after 1900 it was the exceptional company which
did not prepare such r e p o r t s . ' In 1899 the New York Stock
Exchange took its first steps to require listed companies to
submit financial
9 See Martin Campbell-Kelly, ICL: A Business and Technical History (Oxford,

1989), which discusses at length the punched card era in England and the
international connections of British and American firms.
10 Eric J. Hobsbawm, The Age of Empire 1875—1914 (New York, 1987), p. 62.
11 Hobsbawm, p. 53, offers several English examples; there were 500 Lipton Tea

branch stores in England in 1899, whereas there had been none in 1870.
12 Michael Chatfield, A History of Accounting Thought (Hinsdale, Ill., 1974), p.

125. 13Gary John Previts and Barbara Dubis Merino, A History of Accounting in
America:An Historical Interpretation of the Cultural Significance of Accounting
(New York, 1979),chap. 4.
758 Arthur L. Norberg
statements on a regular basis." To prepare more than perfunctory
profit and loss statements, companies needed substantially more
information about their own operations.
How this came about can be seen in recent elegant studies by Judith
McGaw and Alfred D. Chandler, Jr. McGaw shows how the paper
industry changed its accounting methods over the course of the 19th
century to meet its needs for better knowledge of operations.15 During
the first half of the century, the emphasis was on financial accounting,
used to understand the overall financial condition of the firm. As firms
became larger and more complex after the 1860s, cost accounting was
added to enable better decision making. The desire within the
companies themselves for better information about internal costs was
more significant in this case than the need for public disclosure.
Breaking down costs and income into finer and finer increments
allowed the type of control that produced greater profit. Profitability
and increased sophistication in reporting seemed to go hand in hand.
As elsewhere in the development of American business in the second
half of the 19th century, the railroads showed the way. In The Visible
Hand, Chandler writes that, in meeting "the needs of managing the
first modern business enterprise, managers of large American
rail-roads during the 1850s and 1860s invented nearly all of the basic
techniques of modern accounting."16 Chandler provides evidence for
denominating the railroad as "the first modern business enterprise" by
reviewing the types of data assembled by operating companies. Data
about daily financial transactions were used to compile operating and
financial statements, the balance sheets. These balance sheets,
including capital accounting figures, could then be used to evaluate a
company's performance. This type of reporting was becoming
common-place by the 1870s, and in June 1879 a convention of railroad
commissioners recommended the adoption of a standardized form of
accounts.
In 1875 Albert Fink had published a book on accounting for
railroads, a system he had developed primarily as general superin-
tendent of the Louisville and Nashville in the 1860s.'7 Fink divided
maintenance of the roadway and general superintendence into thirty
accounts, with eleven more accounts for station operating expenses
14 Robert Sobel, The Big Board (New York, 1965), p. 177. See also Previts

and Merino, A History of Accounting (n. 13 above).

15 Judith A. McGaw, "Accounting for Innovation: Technological Change

and Business Practice in the Berkshire County Paper Industry,"

Technology and Culture 26 (October 1985): 7 0 3 - 2 5.
16 Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in

American Business (Cambridge, Mass., 1977), p. 109.

17 T h i s summary comes from ibid., pp. 109-20. Chandler reproduces

the entire form from Albert Fink, Cost of Railroad Transportation, Railroad
Accounts, and Government Regulation of Railroad Tariffs (Louisville, Ky.,
1875).
Punched Card Machinery in Business and Government 759

per train mile. Another thirty-four accounts addressed the expense of

the movements per train mile, such items as fuel, repairs, gratuities,
and damage costs. These accounts were then expressed as four ratios
whose sum constituted a total cost per ton-mile, the figure on which
rates were based. Until about 1895, with the introduction of calcula-
tors, all of this work was done by humans without any mechanical
assistance. There were hundreds of men (almost no women) collecting,
posting, and footing the data; other men evaluated the results; still
other men managed the personnel engaged in this work; and still
others used the evaluated results to formulate policies. As noted by
Chandler, "By 1860 the railroads probably employed more accoun-
tants and auditors than the federal or any state government."18
Moreover, railroad offices and inventory were spread over wide areas
(as was the case with other industries that came into being in the last
third of the 19th century). Transmitting data required increasingly
sophisticated communications systems and quick service. The faster a
decision could be rendered, the better the result for the company.
More and more machinery was needed to speed these processes.
Governmental Needs
The government's problems were similar to those of business. The
population of the United States increased from a little more than
5,000,000 in 1800 to over 50,000,000 in 1880. As the time ap-
proached for the 1890 Census, census consultants estimated that
more than 62,000,000 Americans would have to be counted. As early
as the 1870 Census, census-office personnel had been trying to
develop a mechanical means of analysis, and in 1872 Colonel Charles
W. Seaton (1831–85) designed a wooden counting wheel in which
paper passed over rollers which exposed only a small portion of it to the
enumerator. The enumerator entered census data across the exposed
length of paper, advancing it when finished. The aim was to increase
the efficiency of data entry on long forms. While only a marginal gain
in neatness was achieved, the potential of mechanical aids to counting
seemed clear.19
The need for such aids stemmed partly from the growing population
and partly from the demand for more information about this
population. For example, after the Civil War the accumulation of
information on vital and medical statistics was made a part of the
census office's duties. In 1870, the director of the census, Francis A.
Walker (1840–97), sought the assistance of the surgeon general of the
army in determining the classification of mortality statistics.' John
18 Chandler, Visible Hand (n. 16 above), p. 110.
19 Truesdell, The Development of Punch Card Tabulation (n. 5 above), pp. 17-24.
20 Ibid., p. 28.
760 Arthur L. Norberg
Shaw Billings (1838–1913), a physician trained at the Medical College
of Ohio and associated with the Army Medical Corps, was assigned to
aid in this assessment. A little over a year later, in February 1872,
Billings and a colleague, Joseph J. Woodward (1833–84), made a report
to Walker suggesting a procedure for collecting data. Among other
things, they recommended "1. That with regard to classification of
diseases . . . the tabular form should conform in all essential
particulars with the nomenclature and classification published by the
Royal College of Physicians of London, in 1869. 2. That figures should
be presented for individual States, rather than for groups of States as in
1860. 3. That the record of deaths should be published by months,
rather than by quarters."21
Billings retained his interest in vital and medical statistics, and, even
though not on the bureau's payroll, he supervised the work of
tabulating the data collected in the censuses of 1880 and 1890. In a
series of reports, he applied "statistical induction from the figures
furnished him to establish new data as to racial incidence in disease."22
He later showed that the census data lacked completeness and
suggested that data be obtained from other sources.23 Billings contin-
ued to be associated with the decennial censuses until his death in
1913. His interests transcended the mere collection of data. He also
was concerned with storing and analyzing them, suggesting "that the
various statistical data of the living and the decedent `might be
re-corded on a single card or slip by punching small holes in it, and
that these cards might then be assorted and counted by mechanical
means according to any selected group of these perforations.' "24 The
census example is the first of many. During World War I, tabulating
machinery assisted government agencies involved with the war effort,
which offered a significant learning process for businessmen. A later
example is the installation of the Social Security system in the 1930s, a
task that would have been immensely difficult without machine
computation.

Invention of the Tabulator

Two different but related types of machinery came into use at the end
of the 19th century to help with calculating tasks: mechanical
calculators and tabulating machines. Herman Hollerith (1860–1929)
credited Billings with the suggestion that led him to design a
mechanical tabulating system. In a letter of August 7, 1919, to a Mr.

21 Q u o t e d in ibid., p. 28.
22 Fielding H. Garrison, John Shaw Billings: A Memoir (New York, 1915), p. 342.
23 Tr ue sde ll, The Development of Punch Card Tabulation (n. 5 above), p. 29.
24 Quoted in Garrison, John Shaw Billings (n. 22 above), p. 343.
Punched Card Machinery in Business and Government 761

J. T. Wilson, Hollerith recalled that "he [Billings] said to me there ought

to be a machine for doing the purely mechanical work of tabulating
population and similar statistics . . . his idea was something like a type
distributing machine. He thought of using cards with the description of
the individual shown by notches punched in the edge. ..."25 A few days
later Hollerith reported to Billings that he thought he had hit on a
method for mechanical tabulation. In some ways his first design
resembled the Seaton machine. He used a paper roll into which holes
representing certain data elements could be punched and read by
passing them between a drum and metallic contact brushes. Wherever
a hole appeared, the brushes completed an electrical circuit. This
circuit included an electromechanical counter that advanced once for
each hole of a certain kind it encountered.26 Hollerith eventually
abandoned the roll of paper and substituted cards, the first use of
which took place in 1886 in Baltimore for public health statistics.27.'
Soon afterward the state of New Jersey adopted Hollerith's system, and
by mid-1889 the city of New York employed it as well. By the time of the
1890 Census, the Hollerith design had been thoroughly tested.
The story of the operation of the Hollerith system has been recounted
in many places, so we need review it only briefly here. The system
consisted of a keyboard punch for coding data on the cards, a gang
punch for producing cards with common data, a circuit-closing press
for reading the punched cards (inserted by the operator one at a time),
a tabulating machine, and a sorting box. Electric batteries ran the
counters and sorting box. A punched card placed in the circuit-closing
press completed a circuit by means of needles passing through holes in
the card and dropping under gravity to pools of mercury in the base of
the press. Completed circuits would send signals to counters, in the
form of clock faces, wired to receive only that specific kind of
information.28

25 Austrian, Herman Hollerith (n. 5 above), p. 6.

26 Excerpts from Hollerith's first patent describing this mechanism can be found in
Truesdell, The Development of Punch Card Tabulation (n. 5 above), pp. 37—38.
27 For a good description of Hollerith ' s early design and modifications, see Austrian,

Herman Hollerith (n. 5 above), pp. 13—16. A slightly different and abbreviated version
can be found in Goldstine, The Computer from Pascal to von Neumann (n. 3 above), pp.
68-70.
28In the use of the machine in the census, the data would be read from the clock dials

and copied onto large computing forms, and the clocks all set back to zero. For
descriptions of the system, see Herman Hollerith, "An Electric Tabulating System. "
School of Mines Quarterly 10 (April 1889): 238—55 (reprinted in Randell, The Origins
of Digital Computers [n. 3 above], pp. 129—39); T. C. Martin, "Counting a Nation by
Electricity," Electrical Engineer 12 (November 11, 1891): 521—30; Austrian, Herman
 762 Arthur L. Norberg

The most remarkable feature of this new system was its versatility.
Through the use of relays on the sectors of the sorting box, it was
possible to connect the system so that a section opened only when a
certain set of conditions were met. The system made simple counting
and complex tabulation faster and, by contemporary accounts, more
accurate.29 The range of successes in the U.S. Census, the health
departments of Baltimore and New York, and various agencies in the
states of Massachusetts and New Jersey seemed to assure the future of
the system and the fame of its designer. After final completion of these
various counting operations, however, the machines were re-turned. In
1894, as government contracts ended, Hollerith suddenly found
himself without income. He concluded that only the ongoing nature of
commercial business would keep his company active and growing.30 So
he turned his attention to railroads and insurance companies.
Tabulating business data, Hollerith found, was a far cry from the
counting done in the Census Bureau and local agencies. Nevertheless,
he had already encountered complicated statistical addition in the
agricultural census of 1890. Instead of counting individual items as
units, workers had to add different numbers from successive cards.
This involved taking the data from each farm number of acres, number
of livestock by type, implements, produce and accumulating totals. A
similar challenge existed with certain health statistics. For example, it
might be important to know when people were on sick leave: how many
people were absent one day, two days, one month. Hollerith developed
new machines for tabulating these types of data. He replaced the
"clock-face" counters with several "integrating" devices, which
contained up to eight decimal digits of capacity; each position was
represented by a ten-position wheel with visible numerals31 Toward the
end of September 1896, Hollerith signed a contract with the New York
Central Railroad for processing up to 4 million waybills anticipated in
the coming year. Hollerith decided to form a new company, which
would hold all his patents and would manufacture machines as
well.32 ." This was the Tabulating Machine Company (TMC).

Hollerith (n. 5 above); and Truesdell, The Development of Punch Card

Tabulation (n. 5 above).
29 Martin, "Counting a Nation by Electricity," esp. p. 529.
30Austrian, Herman Hollerith (n. 5 above), p. 112.
31Bashe et al., IBM's Early Computers (n. 3 above), p. 4.
32 Austrian, Herman Hollerith (n. 5 above). pp. 138, 152 ff.
 Punched Card Machinery in Business and Government 763

The Rise of the Tabulator Machine Industry, 1900–1920

Hollerith did not simply stake his future on his existing machinery;
rather, he sought to improve it. As early as 1901, a keyboard replaced
the movable handle used for punching the data onto cards in the
Hollerith system. But cards were still inserted one at a time, just as
paper is inserted into a typewriter. In the first years of the 20th century,
Hollerith tested an automatic card feed for the tabulator. Changes were
made to replace the mercury cups with brushes. With a co-worker,
Eugene A. Ford (1866-1948), Hollerith developed a method for
reading cards in motion. Eventually they standardized their
cards—cards each holding forty-five columns and ten rows. Later, the
tabulators were designed to halt whenever they encountered a blank
card, called a stop card. When the machine halted, an operator copied
subtotals and cleared appropriate accumulators. Charles Bashe and
his coauthors report that this newly designed system was sufficiently
impressive to the accounting departments of large firms that TMC was
soon "serving about a hundred customers."33 Hollerith sold his
successful company in 1911 to a group headed by Charles Flint,
which amalgamated four firms into the
Computing-Tabulating-Recording Company.34 In 1914, Thomas
John Watson was hired as president, inaugurating a new era at
C-T-R.35
It was the attitude at the Census Bureau toward Hollerith equipment
that seems to have led to the organization of another U.S. tabulator
maker. For the censuses of 1900 and 1910, the bureau had been
designing its own equipment and occasionally modifying equipment of
vendors all, it seems, in pursuit of faster, more versatile equipment.
With a $40,000 appropriation from Congress, the Census Bureau set
out to design an automatic machine of its own.36 One of the people
employed in 1907 for this purpose was James Powers, a Russian
émigré who had settled in New York City and worked for Western
Electric and Bergman's Electrical Works before joining the bureau.
Powers already had a number of patents for automatic machines.37 He
began work on a sorter and shortly took up the
33 Bashe et at., IBM's Early Computers (n. 3 above), pp. 6 - 7 ,

quote on 6. 34 Austrian, Herman Hollerith (n. 5 above), chap.

23.
35 There are several biographies of Thomas J. Watson, Sr. See, e.g.,

Rodgers, THINK: A Biography of the Watsons and IBM (n. 6 above). In 1924, the
directors of C-T-R authorized a name change to International Business
Machines (IBM).
36 Truesdell, The Development of Punch Card Tabulation (n. 5 above), pp.

120-21.
37 One reliable source of biographical information on Powers can be

found in Austrian, Herman Hollerith (n. 5 above), pp. 2 7 1 - 7 2 . Powers was

born in 1871, and Remington Rand histories of the 1930s and 1940s state
that he retired from the
764 Arthur L. Norberg
problem of tabulator design. The work went slowly, and it was not
clear that the new machine would be ready for the 1910 Census, even
though a semiautomatic design was operational and had been used for
the 1907 Cuban census. Moreover, the census machinists knew that
the new tabulator design would not be effective if faster sorters were
not available as well. The Powers sorter designs were just too slow.
TMC offered to provide Hollerith-pattern automatic tabulating and
sorting machines, but the offer was declined. The bureau planned to
use its own design, and Powers set about to modify the TMC sorter.
Essentially, TMC had been frozen out.38 .; In 1911, within a decade and
a half of the founding of the Tabulating Machine Company, Powers left
the census and established the Powers Accounting Machine Company
to market his new designs.39
In this period, the selection of certain types of equipment precluded
the possibility of employing other sorts of machines. For example, the
Powers punches apparently proved troublesome in the 1910 Census,
but these punches had been constructed to work with a particular kind
of punched card so it was not possible simply to substitute for a
Powers punch one manufactured by TMC. TMC would need to design a
punch specifically for use with the Powers card. In preparation for the
1920 Census, personnel first evaluated the range of punches available,
and, even though the C-T-R machine proved superior, cards punched
on it were not "conveniently adapt-able to the Bureau's tabulating
equipment," namely, the various Powers machines still in use.40 The
Census Bureau, however, had a variety of data to collect and analyze.
The bureau's machine shop could not satisfy all the different
equipment needs, and different machines were used for different
censuses. In 1920, for example, C-T-R equipment was used again for
the agriculture census.41
The period between 1914 and 1930 was one of significant product
development for both the Powers Accounting Machine Company and
the Computing-Tabulating-Recording Company, with technical supe-
riority seesawing back and forth. James Powers hired several talented
young engineers to work with him in product development, giving his

company at the time of the merger in 1927. The death date of 1915 found in
some sources seems incorrect.
38In fact, the Tabulating Machine Company took the Census Bureau to court in

1910 on infringement charges in connection with modification of the sorters.

See Austrian, Herman Hollerith (n. 5 above), pp. 294-305.
39A History of Sperry Rand Corporation (n. 6 above), p. 5.
40 Truesdell, The Development of Punch Card Tabulation (n. 5 above),

p. 141. 41 I bid., pp. 141-42.

Punched Card Machinery in Business and Government 765

firm the upper hand for a time. In 1914 Powers and his principal
associate, William W. Lasker, Sr., perfected the selection box for
changing connections to do another type of calculation, the running
total mechanism,42 and the automatic zero device on a seven-unit
tabulator. In 1915 Powers introduced a printing tabulator.
The Powers printing tabulator was an important machine.43 It listed as
well as tabulated, whereas the available Hollerith tabulator was a
nonlisting machine having a capacity of five adding sections. Now
tabulated totals could be printed with the designations of codes or
groups of numbers directly on the report or record, or one could list in
detail all the items represented on the cards. The tabulator selected and
added mechanically. Steel pins dropped through the card holes into
designated positions in a "selection box," later called a connection box,
making mechanical connections with the adding head directly above
the box. Connection boxes were made to be interchangeable in order to
facilitate different calculations.44 The Powers machine printed
designations and tabulated totals, with or without detail, on paper
strips or record sheets. In addition, it was equipped with one to seven
designating or adding units that operated simultaneously, and it made
five legible carbon copies.45
The competition posed by Powers's new designs played a major role in
Thomas Watson's strategy as he took over the new firm of C-T-R.
During World War I, Watson also hired a group to work on new
products. Some of the arrangements that engineers and mechanics
had made with TMC for R&D were more in the character of a modern
consultancy, and they did not spend all their time on Hollerith
business. When Watson took over the company, he brought
42 B e f o r e the invention of the "running total mechanism," it was
necessary for the operator to stop the machine and press a key in order
to "take " a total that reset the adding units. The new running total
mechanism was operated by two control cards, a "space" card and a "total"
card, which could be sorted in on top of each group of cards for which a
total was required or could be manually inserted in the deck by the
operator. "This increased the output of the machine, particularly where the
groups of cards to be totalled were small and numerous. This enabled the
operator to perform other duties, such as sorting, thereby reducing the
number of personnel necessary to operate a Punched-Card Department. "
("History of Remington Rand Punched-Card Accounting Machines, " n.d.
[internal evidence suggests mid-1930s], Vertical File, Unisys Archives,
Unisys Corp., Detroit.)
43See W. E. Freeman, "Improvements and Advantages Offered by the

Powers Accounting and Tabulating Machines, Consisting of Punching,

Sorting, Tabulating and Printing Machines, " National Electric Light
Association Thirty-Eighth Convention, Accounting Sessions, June 7 - 1 1 , 1915,
pp. 1 5 6 - 8 7, esp. p. 168.
44The Business Machines and Equipment Digest 1927 (Chicago, 1927).
45 Freeman, "Improvements and Advantages" (n. 43 above), p. 156.
766 Arthur L. Norberg

in one of these men, Eugene A. Ford, a former typewriter inventor and

associate of Hollerith's, to head development operations full-time. He
recruited other men, such as Clair D. Lake (1888-1958), a former
automotive designer, who became an influential figure at IBM in its
early years.46 These designers set about systematically improving the old
Hollerith equipment and devising new equipment by disassembling
Powers's machines for study and building machines they considered to
be better. In response to the selection box development by Powers,
C-T-R incorporated a plugboard into the back of the tabulator to enable
the operator to tailor an application by changing the wiring. This was
similar to the concept of using relays in the sorter designed for the 1890
Census.47

Applications of Tabulator Machinery

Between 1910 and 1920, tabulating machines attracted substantial
attention from business and industry. The first business applications
seem to have been in the compilation of actuarial data and the analysis
of sales and traffic statistics.48 Next, companies employed either
Hollerith or Powers equipment for preparing payrolls and for specific
accounting purposes.49 For example, Aetna Life and Casualty rented its
first Hollerith equipment in 1910 and began compiling mortality data
from as early as 1885. If we define accounting in its broadest sense, one
of the most widespread uses of tabulating machines was in railroad
freight accounting and rate statistics. The Rock Island line installed
Hollerith equipment for compiling freight statistics as early as 1906
and added equipment for compiling car-service statistics in 1919.50 By
1913 the Southern Pacific employed some twenty-five key punches and
twelve tabulators.51
Looking to the experience of various railroads in the two decades after
1905, a Railway Review author stated that "Punch card systems are a
proved means of economically producing facts and figures vital to
operating a railroad intelligently, from which business records can be
quickly and accurately classified and presented to the executives at
46 Bashe et al., IBM's Early Computers (n. 3 above), pp. 5-10.
47 Rodgers, THINK: A Biography of the Watsons and IBM (n. 6 above), pp. 79-80.
48 For a discussion of the increase in and identification of early users of

Hollerith equipment see Austrian, Herman Hollerith (n. 5 above), chap. 18.
49 G. A. Shattuck and E. B. Kapp, "Summaries of Business Research:

Accounting by Tabulating Machines," Harvard Business Review 5 (1926): 80-94,

213-18.
50Rock Island Goes Modern in Material Accounting," Railway Age 106 (1939):

976-84, see p. 977.

51 S. G. Koon, "Hollerith Tabulating Machinery in the Business Office,"

Machinery 20 (1913): 25-26.

Punched Card Machinery in Business and Government 767
the time they are needed in the form best suited to enable action." The
author added that "punch card systems are of no value unless more than
one set of figures is to be secured from the same source."52 The Powers
connection box and the C-T-R plugboard made this possible, although
another Railway Review item suggested that savings resulted only "at
stations handling a minimum of 40,000 accounting items a month."53
Use by the government expanded during these decades also. The Hog
Island Shipyard in Philadelphia installed tabulator methods to aid in
inventory control and purchasing and payroll. Similarly, the food and
fuel administrations used tabulator methods for compiling statistics on
supplies and demand.54
Before the tabulator, recording totals of numbers for different purposes
for example, total hours worked and pay per employee was all done by
hand, possibly taking totals using calculators. The tabulator reduced
the effort of the employee in accumulating, especially in large
enterprises, and the operator could focus on identifying and recording
the data. The introduction of tabulating machines reduced the amount
of operator time required. Faster sorters improved the rate of report
production and further reduced labor. The printing tabulator still
further reduced the human effort when the data could be printed as the
totals were being made. Moreover, it seems evident that this labor went
into the accumulation or reanalysis of other statistics more data for use
in railroad rate cases, for instance. In 1913 S. G. Koon described the
case of a steel company executive who requested sales data from the
previous five years for future planning.55 The company had been using
tabulating machinery for only three years. This three-year data
analysis was submitted to him the following morning; he decided
against an added month's work in the accounting department to obtain
the remaining two years' data. Reports of this kind at trade association
and professional meetings and in trade and professional journals
stimulated the spread of tabulating machines.56 In 1919 C-T-R is
reported to have had 1,400

52 "Railway Accounting with Punch Cards, " Railway Review 79 (September 4,

1926): 3 5 3 - 5 4, see p. 354.

53"Station Accounting by Punched Card System, " Railway Review 79

(October 16, 1926): 5 7 5 - 7 8, see p. 575.

54 F. I. Jewell, "Mr. Powers Went to Washington, " Sales Whys, April 1948, pp.

10-12, see p. 12. These tasks were supervised by Walter V Davidson, who
a few years later developed the Unit Inventory Control system used by
market chains such as A&P, Safeway Stores, and First National Stores.
55SKoon, "Hollerith Tabulating Machinery" (n. 51 above).
56 F o r example, see Freeman, "Improvements and Advantages" (n. 43

above), pp. 186-87, and John H. Kimball and R. M. Sedgwick, "Tabulating

Machines in Customer Accounting, " Journal of the American Water Works
Association 23 (1931): 1891- 94.
768 Arthur L. Norberg
tabulators and 1,100 sorters on lease at 650 locations.57 Powers seems
to have been running a distant second. But it was still the principal
competitor, and the competition continued into the next two decades.

Equipment Advances, 1920–1940

The "Type I" tabulator, introduced in 1921, was C-T-R's answer to
the Powers printing tabulator of 1915.58 The attempt to attach a
printing mechanism to the C-T-R tabulator led to the elimination of a
number of relays in the existing Hollerith machine, allowing the
plugboard to be placed in front on the new C-T-R design for easier
access. Cards were now read twice, the first reading coinciding with the
second reading of the previous card. This eliminated the need for a stop
card to instruct the machine to pause. If there was a change in the
identification field, the machine paused automatically. At this point,
the operator could read and copy the readings and, if desired, clear
totals. Hence the problem could be tabulated faster.59 Powers, in
response to C-T-R's tabulator of 1921, introduced a tabulator with an
alphabetic capability in 1924.60
By 1925, tabulator installations had achieved a conventional
makeup that was to last into the 1950s. The basic machines were the
punch, the tabulator, and the sorter.61 For more sophisticated users,
Powers and C-T-R added to their products list a verifier, an interpreter,
a reproducer, and a printing tabulator, and in the 1930s both firms
introduced separate punches for multiplying and calculating.62 The
C-T-R verifier, introduced about 1917, 63 was a device to check the
work of a keypunch operator. The operator of the verifier repeated the
keypunch strokes on the punched card. Nothing happened unless an
error occurred, at which point the machine stopped, automatically
calling the attention of the operator. The operator then confirmed the
error and punched a corrected card.
Several other improved machines entered the market in the 1920s.
IBM, the new name for C-T-R, introduced the Type 80 Sorter in 1925.
"The new machine was faster, more convenient [i.e., horizontal
57 Robert Sobel, IBM: Colossus in Transition (New York, 1981), p. 63.
58 Bashe et al., IBM's Early Computers (n. 3 above), p. 9.
59Ibid., pp. 8 - 9 .
60 There is some reason to believe that this is a machine developed by the

British Powers company. See Campbell-Kelly, ICL (n. 9 above).

61William W. Simmons with Richard B. Elsberry, Inside IBM: The Watson

Years, A Personal Memoir (Bryn Mawr, Pa., 1988), p. 9.

62For complete details on these machines, see Berkeley, Giant Brains or

Machines That Think (n. 8 above).

63 Bashe et al., IBM' s Early Computers (n. 3 above), p. 7.
Punched Card Machinery in Business and Government 769

instead of vertical], and more amenable to continuing improvement"

than earlier C-T-R designs, a step Powers had taken a decade earlier.64
In 1927, the machine came equipped with automatic group control to
permit subtotals within subtotals within subtotals. More capable
machines permitted the use of cards with more densely packed
information. IBM introduced the eighty-column card in 1928. The
following year, Powers Accounting, by then a division of Remington
Rand, followed with a ninety-column card along with redesigned
machines to handle them.65
In 1927, the Equipment-Research Corporation of Chicago, a busi-
ness machines evaluator and publisher of research data, offered the
following comparison of the two systems:

As between the Hollerith and Powers tabulating machines, the

principal differences are:
The Hollerith utilizes the principle of electrical contacts for its
operation. Circuits are closed by steel brushes making electrical
contacts through the holes in the cards, causing the counting and
printing mechanisms to function.
Powers is mechanically operated. Pins, engaging the holes in the
cards, cause the counting and printing mechanisms to function.
Hollerith controls are set for the order and arrangement in which
facts are to be recorded, through the medium of wires plugged
into a switchboard, thus connecting each punched position on
cards with a column in the counting register, or a sector in the
printer. Changes in circuit arrangement may be made by the
user's operator.
Powers controls are set mechanically. Through an arrangement of
bars in what is called the "connection box," each punched
position on cards is connected with a column in the printing
register, or a sector in the printer. Changes in connection boxes
are made by the manufacturer's mechanic. Connection boxes,
arranged for different results, in accordance with the user's
requirements, are interchangeable by the user's operator.66

In the beginning, these differences between electrical and mechan-

ical were not very significant. The machines essentially performed in
similar fashion. For example, the Powers sorter of 1915 sorted cards at
a maximum rate of 250 cards per minute; the machine of the 1930s
sorted at 400 cards per minute. Similar speeds were achieved
64Ibid., p. 10.
65Sales Whys (n. 54 above), p. 20.
66The Business Machines and Equipment Digest 1927 (n. 44 above), sec. 42,

p. 5.
770 Arthur L. Norberg

by IBM. Addition totals for each tabulator, mechanical or electrical,

were the same at 150 additions per minute per counter.n.67 At the end
of the 1920s, however, differences between the machines produced by
the two companies were becoming obvious.
By 1928, IBM was marketing its innovative Type IV subtraction
machine. Previously, tabulators could operate only on unsigned data.
Either debits and credits could be treated separately, as with a
handwritten journal entry in separate columns, or, at the time of
punching, credits could be entered by complementary numbers to
ensure that appropriate totals would be taken in the tabulation
process.68 If credits outweighed debits, an operator would need to
intervene, stopping the tabulator and making the necessary calcula-
tions. The IBM Type IV was designed to respond to a special indicator
on the card that a complement was needed, and the machine would do
the needed subtraction automatically in a mechanism called an
analyzer. Later this control technique was expanded to other data and
designators, such as repeated use of dates. Responding to these
changes, Remington Rand introduced its Model 2 in 1929.69
Both the IBM Type IV and the Remington Rand Model 2 were otherwise
based on the same set of principles as their predecessors. But with the
machines it introduced in the early 1930s, IBM began to apply a new set
of electromechanical circuit-design principles. In 1931 IBM engineers
introduced the multiplying punch, a device that went through a series
of modifications in the first few years. This machine (labeled the 601
by 1933) was designed to read two factors from a card, multiply them,
and punch the product into a blank field of the card.70 The basic
circuitry was composed of relays, hence it was an electromechanical
device. As we have seen, the control circuits of earlier machines were
mechanical, pins engaging the mechanisms of the Powers/Remington
Rand machines and clutches electrically operated in the C-T-R/IBM
machines.
The printing tabulators continued to undergo modification. In 1933
IBM introduced the numeric Type 285 tabulator, but it still tabulated at
a rate of 150 cards per minute. Like its predecessor, this machine had up
to five accumulators and seven printing sections. Since it could print
only numeric data, the alphabetical Type 405 printer was introduced

67See The American Digest of Business Machines 1924 (Chicago, 1924) and

American Office Machine Research Service 1940 (Chicago, 1940).

68Bashe et al., IBM's Early Computers (n. 3 above), p. 12.

69For a comparison of the two systems at this time, see Leslie J. Comrie, The

Hollerith and Powers Tabulating Machines (London, 1933).

70Bashe et al., IBM's Early Computers (n. 3 above), p. 14.
Punched Card Machinery in Business and Government 771

in 1934. The 405 remained the principal machine throughout the next
decade and a half.71 Remington Rand tried to match these
developments with its own machine (also named the 285) in 1937, and
with a Model 3 tabulator that appeared in mid-1940. The major
improvements over the Model 2 were in the accumulating and sector
printing mechanisms, and its use of the ninety-column card; there
were also some minor changes, such as the carriage.72 But this
machine differed little from the Model 2 and continued to be
mechanically driven.
The aim of this brief descriptive section has been to suggest the trend
in machine design, the nature of the competition between IBM and
Remington Rand, the range of machines used in data processing, and
the development of electronic design. Many changes seem to have been
a matter of competitive strategy rather than for new applications.
Sorting speed increased, but calculating speed improved only
marginally, if at all. The greater density cards were a distinct
advantage, especially for large firms. What is most apparent from
contemporary reports is the continuous spread in usage of the
punched card machinery.
Powers was reorganized in 1922, bringing together the Wales Adding
Machine Company and Powers Accounting Machine Company. Powers
was then acquired by James Rand and amalgamated into the new
Remington Rand Company, along with the Dalton Adding Machine
Company, makers of one of the first ten-key adding machines, in
1927.73 Nevertheless, by 1931 IBM was the leading manufacturer of
equipment and cards by a ratio of greater than eight to one; ten years
later IBM produced 16,956 units to Remington Rand's 1,583.74 IBM's
success in the marketplace was already clear.75

71 pp. 5 9 - 6 8 .
72 American Office Machine Research Service 1940 (n. 67 above), July
1940, sec. 1.2.
73"Remington Rand Inc., History," MS, n.d., Unisys Archives.
74"History of the Administration of Regulations of the Office Machine and

Type-writer Industries, 1942–1945," (U.S.) War Production Board, World

War II, 1941–1947 Collection, Unisys Archives.
75For example, in 1914 C-T-R had $2,200,000 in sales, with profits of

$490,000. Punched card equipment and supplies contributed about 65

percent of these profits. In 1919, these figures increased to $13,000,000
and $2,100,000, respectively (also 65 percent). In 1938, IBM had sales of
$44,700,000 and profits of $10,300,000, and 74 percent of this came from
its punched card activity. I could not find any data for Powers. While
Remington Rand sales are of equivalent amounts, the company did not
state what portion came from punched card activity. Indications are that
Powers/Remington Rand accounted for somewhere around 20 percent of
total punched card business in the United States.
772 Arthur L. Norberg
Applications Spread across Industry
Some of the lessons about inventory learned during World War I
were extended to business in the next few years. For example, Walter
V. Davidson, director of the business activities at the Hog Island
Shipyard, returned to the Larkin Company in Buffalo, New York, a
food distributor. During the 1920s, Davidson introduced a punched
card system for chain store inventory management, which came into
wide usage in the 1920s.76 Each unit of merchandise was represented
by a punched card, a record created when a vendor's notice and a
warehouse receiving report came in. The card indicated the item
number, alphabetic description, cost, selling price, and weight. Cards
were removed from the office as items were removed from inventory
and sent to a store.
Between the late 1920s and mid-1930s, the railroads continued to
expand their use of tabulators, adding machinery to do per diem
accounting, handle freight accounts, and begin centralization of
accounts and statistics. By 1935 the monthly card submissions from
all parts of the Rock Island amounted to 1,365,000. In 1936, machine
methods were extended to timekeeping, disbursement work, and
material pricing. This latter extension of data collection coincided
with the reports of employee wages and taxes and operations of the
line required by the Interstate Commerce Commission, a counterpart
of reporting by other industries to the new Social Security Adminis-
tration. The press of work became so large that the Rock Island
reorganized its tabulating activities in 1939, adding twenty-six
key-punches, two gang punches, four verifiers, one alphabetical
punch, twelve sorters, one collator, twelve tabulators, six printers,
and two summary punches, and concentrating statistical activity in
Chicago.77
By 1931 every department of the Aetna Life and Casualty Company
had its own "Hollerith Department."78 Additional examples of the
trend toward increasing tabulator use in the 1920s and 1930s come
from the textile, rubber, and automobile industries. Textile
manufacture entailed several peculiarities. First, fluctuations in the
raw materials markets affected purchases. Second, the length of
processing time and the types of processes varied greatly, affecting
everything from materials purchases to efficient machine use. And

76 “History of Remington Rand Punched-Card Accounting Machines " (n.

42 above), p. 14
77 "Rock Island Goes Modern in Material Accounting" (n. 50 above), pp.

976-77.
78 Information Systems at Aetna Life & Casualty: From Punched Cards to

Satellites, and Beyond (Hartford, Conn., 1984).

Punched Card Machinery in Business and Government 773
third, consumer demand often varied, sometimes suddenly. In the
1920s, several firms in the broad silk industry turned to
tabulator-produced reports to help cope with these problems. By 1926,
firms such as Schwarzenbach, Huber and Company and the Eagle Silk
Company employed punched cards in manufacturing and distribution
controls and sales analysis. Textile World noted that these companies
"found accounting machine methods of great value in providing quick
and accurate reports, thus eliminating losses due to lack of prompt
information." The advantages were in centralizing and eliminating
duplication of records and in standardizing production methods.
Moreover, the punched card method was applicable to practically all
phases of textile records such as finished stock, converting control,
production order control, dispatching, payroll, and standard costs.79
The rubber industry in the 1920s exemplifies an enterprise with both
production and distribution facilities, others being meat-packers, food
processors, and paper products companies. Most of the rubber
companies distributed their products through branch offices, some
with as many as fifty. Sales of some items, such as tires, varied with the
season, and at times local demand could he high and critical; the
problem was to keep "the stock balanced at all warehouses with all
sizes and grades of tires and t u b e s . ” 80 Inventory control of rubber
footwear presented a similar but more complex problem because of a
wider variety of styles and colors.81 To cope with expansion, both in
production and distribution, the rubber industry turned to punched
cards and tabulators.
While the footwear industry had a more complex control problem
than the tire industry, it had made the greatest progress in using
tabulator machine methods. In the late 1920s, the average line of
rubber footwear contained about 500 different styles. Compound this
with various widths, colors, and lengths, and break these down into
some thirty shoe parts, and the number of items in production and
inventory expands into the millions. Each item was assigned a code
number, customer number, cost and selling price, and date. One card
was punched for each case of merchandise. After an inspector
examined and graded the shoes, complete cases were sent to inven-

79 Floyd H. Rowland, "Textile Accounting and Punched Cards," Textile

World 69 (May 1926): 61-62.

80 S o m e Possibilities for Increased Efficiency in Rubber Factories:' The

Rubber Age 24 (March 10, 1929): 611-12.

81 “ N e w Methods to Order and Inventory Control in Rubber Footwear,"

The Rubber Age 25 (September 25, 1929): 671-72.

774 Arthur L. Norberg

tory, and the cards were delivered to the inventory file office. These
cards, sent through the printing tabulator, provided totals for each
day's production, changes in stock, and credits to the factory. The
companies followed similar accounting procedures before production
for planning of production runs and at shipment time for control of
inventory and billing.
The automobile industry is almost a mirror image of the rubber
footwear industry. Automobiles and trucks vary in style, contain many
parts, and require shipment to many locations. As with footwear, the
increasing variety of styles, colors, and options began to slow produc-
tion and delay delivery. Throughout the 1920s and 1930s, automobile
companies turned to the use of tabulator machinery to overcome these
delays. Here it is interesting to focus on the ordering procedure
developed by Chrysler Corporation.82 Upon receipt of a dealer's order,
two cards were punched with the essential information sup-plied by
the dealer: routing, region, district, dealer's name, order number, item
number, model, body type, paint, trim, wheels, trans-mission, radio,
heater, and other options. One card went to the equivalent of a
production planning office where a "Daily Master Building Schedule"
was prepared, and one went to the car distribution department where it
was filed according to region and dealer. Multiple copies of the
production card went to the various inventory-control points for parts,
while several copies stayed with the car as it was constructed. When
the car reached the shipping department, one of the last cards
remaining was checked to see that the order was correct. If so, the car
was shipped and the dealer was notified when to expect it. The cards
could then be used for many different types of statistical analysis, such
as trends in purchasing by color, size, and type of car.
Other examples of the use of punched card equipment between 1910
and 1940 could be drawn from the shipbuilding industry, electric light
and power, pharmaceuticals, and banking.83 A number of examples
could also be drawn from the public sector. The East Bay Municipal
Utility District, on the eastern shore of San Francisco Bay,
82R. G. French, "Quick Figures Cut Shipping Delays at Chrysler Plant, "

American Business 11 ( June 1941): 3 0 - 3 1 , 46.

83 A. E. van Bibber, "Using Punched Cards for Controlling Materials, "

American Machinist 51 (August 14, 1919): 295-300. "Tabulating Statistics

and Accounts by Machinery," Electric Railway journal 41 (May 10, 1913):
853-54. Hubert van Drooge, "Orders, Inventories, Billings under
Automatic Control, " Factory Management and Maintenance 97 ( June 1939):
5 6 - 5 9 , 132, 134. I. I. Sperling, "Reducing Routine to Minutes," Banking 30
(May 1938): 6 6 - 6 8 . The emphasis in this article is on U.S. activities, but
an equivalent set of examples can be given for the spread of tabulation in
other parts of the world. For example, by 1921 Australia and South Africa
had followed many of the European nations and conducted censuses. See
"Census Tabulating
Punched Card Machinery in Business and Government 775

began using tabulator equipment for customer accounts in 1916; a

similar development occurred slightly later with the Los Angeles
Department of Water and Power.84 In 1927, the North Dakota State
Highway Department, under legislative mandate, inaugurated a
revised bookkeeping method using tabulating equipment "to make
certain that department heads live within the amounts granted them"
and to provide better unit cost information "so that the public will be
advised from every angle just for what they are paying."85 And by the
late 1930s, the analysis of state legislative activities was being
auto-mated, in Ohio for example.86

The Social Security Administration

Federal officials, under the leadership of President Roosevelt,
designed the Social Security Act of 1935 as a broad umbrella for many
needs. The act "authorized a national system of contributory old age
annuities, a state administered, federally supervised unemployment
system, and a program of large federal subsidies to induce nationwide
financial aid to the needy aged, the blind, and children deprived of
parental support. It also amplified national financial encouragement of
improved public health services by expanding research, by helping the
states to improve their health staffs, by giving special aid for crippled
and disadvantaged children, and by renewing promotional health work
for mothers and infants."87 Responsibility for the act was divided
among a number of state and federal agencies. For example,

Machine," The Engineer 131 (May 20, 1921): 532—35. Businesses in the
United Kingdom, such as Dunlop (tires), Lever Brothers (pharmaceuticals
and soap products), Metropolitan-Vickers Electrical Company, and
Humbers Electrical Ltd. (electrical equipment) were all using equipment
supplied by British Tabulating Company (manufactured under Hollerith or
IBM patents). See E. W. Workman, "Cost Accounting by Machinery,"
Engineering and Industrial Management 6 (September 22, 1921): 314—18.
Similar developments were taking place in France at Compagnie des
Chemin de Fer du Nord (locomotives) and Roger Gallet (perfumes) and in
Russia at the Stalina Automobile Plant. See James Connolly, History of
Computing in Europe (IBM World Trade Corporation, n.d.), pp. 20, 35.
84Kimball and Sedgwick, "Tabulating Machines in Customer Accounting" (n.

56 above); Frank Twohy, "Application of Tabulating Equipment in

Accounting Procedure," Journal of the American Water Works Association 28
(1936): 1704—11.
85 "How a State Highway Department Uses Machines in Its Accounting

Work," Roads and Streets 68 ( July 1928): 3 7 0 - 7 2 .

86Mona Fletcher, "The Use of Mechanical Equipment in Legislative
Research," Annals of the American Academy 195 ( January 1938): 168—75.
87Charles McKinley and Robert W. Frase, Launching Social Security: A

Capture-and-Record Account 1935—1937 (Madison, Wisc., 1970), p. 12.

Although this book was not published until 1970, the authors were
gathering the information at the time the Social Security Administration
was being set up.
776 Arthur L. Norberg

supervision of data collection and monitoring of state activities became

the responsibility of the new Social Security Board (later Administration).
Collection of taxes would remain with the Internal Revenue Department.
Health programs were assigned to the Public Health Service and the
Children's Bureau. It was essential, then, to establish coordinating
procedures.
Social Security commenced business in the fall of 1935. One immediate
task had to do with designing a registration system. The system U.S.
citizens are now so familiar with was ready by mid-1936, but
implementation was postponed until after the 1936 presidential election,
and citizens were registered beginning in January 1937. The delay
allowed time for the hoard to acquire the punched card machinery that
made the task a relatively simple one. Although IBM in 1937 offered a
new collator specifically designed for the Social Security Administration,
the new registration and reporting scheme could be handled with
existing machines. It became, in the words of the New York Sunday
News, "the world's biggest bookkeeping!”88
Phase one, the establishment of the basic file for each individual,
comprised seven steps. The Social Security office first checked appli-
cations to ensure that they were correctly filled out. Second, the
applications were coded and prepared for punching of the information
onto cards, which constituted the third operation. Many different uses
were to be made of this information, so the fourth step involved gang
punching of the basic information of name, address, and Social Security
number on several cards. These cards could then be filed by name,
number, employer, or whatever. This step also involved "interpreting"
the information, or printing it on the card for easy reference by clerks. In
the fifth step, all of the cards were checked for correctness against the
original application. These cards could then be used for a variety of
purposes.
From this point on the cards were used for the preparation of~ ledgers
and accumulated information on premiums collected and
disbursements. To facilitate the production of ledgers, the master card
was duplicated, and blocks of cards were sorted and sent to the section
that would print the information on file strips the sixth step. By this
stage, there was a numerical file of master cards and an alphabetical list.
Later, as each employer submitted payments for employees, the
information could be checked against these files. The master cards were
also used for producing a chronological record: a ledger sheet for each
individual. With the establishment of this ledger

88 Ne w York Sund ay Ne ws, J a n u a r y 10, 1937, p. 60.

Punched Card Machinery in Business and Government 777
sheet, the seventh step, the system was organized for the maintenance
of wage records against which future payments were to be made for
the purposes specified in the original act.89
The first IBM equipment leased to the Social Security Administration
had been developed in the late 1920s and early 1930s, but the agency
also acquired models of two new machines, the 077 Collator and the
552 Interpreter, introduced by IBM in 1937, because they were faster
and more reliable.90 Using this machinery, Social Security processed
applications and established accounts for more than 26,000,000
people in a little over two months.
The federal government was not alone in needing control over Social
Security information; companies with large payrolls needed such
control as well. Hence the market for punched card machines
expanded almost overnight. At first the reporting system was exceed-
ingly complicated, but in 1938 the procedure was simplified so that the
employer paid on a quarterly basis. As the director of the Bureau of Old
Age Insurance explained: "instead of the wages of the employees being
reported separately they are accounted for on the same form used for
the tax return. That is, the employer sends to the Collector of Internal
Revenue the `Employers' Tax Return' showing (1) the number of his
employees at the end of the period (2) the total taxable wages paid to
those employees (3) the amount of his tax and (4) the amount of the
employees' tax. This form also carries spaces in which the Social
Security Account number, the name, and the total wages paid to each
employee are entered."91 Nevertheless, reporting requirements on the
employer increased at the same rate as the information demands of the
government did, and IBM took quick advantage of this situation.
In a 1936 booklet on "Payrolls—Reports--Statistics," IBM reviewed the
reporting needs of employers and indicated how those needs could be
met using IBM machines and accounting methods. Previously,
employers had been at liberty to shape their payroll records according
to their own requirements, but many record-keeping practices did not
allow easy access to the data necessary to adhere to the Social Security
Act. IBM had gathered information from foreign countries that had
social insurance plans, reviewed procedures for tabulating the
necessary records, and combined this information with
89Much of the information about the development of the individual's

records within the Social Security office is taken from a film produced by
IBM in 1937 called "Social Security at Baltimore: World's Biggest
Bookkeeping Job, " IBM Archives, Valhalla, N.Y.
90Ibid.
91John J. Corson, "From Tax Return to Wage Record, " 1938 address,

IBM Archives.
778 Arthur L. Norberg

an analysis of the U.S. law "in order to take full advantage of all the
facilities at our command in entering this new American field of
accounting."
Calculations for the Old Age Benefits tax to be paid by both employee
and employer, and the employer's contribution to state unemployment
compensation, could be performed on an IBM Automatic Multiplying
Punch. Cards of exempt persons, treated as a separate group, could be
used to prepare the periodic reports due both the state and federal
government.92 New cards were designed to contain information such as
gross earnings, Social Security deductions, and net earnings. Optional
report forms permitted employers to keep records for their own peculiar
needs as well as for govern-mental requirements. Still, the basic design
for the IBM tabulating system was the same as that developed in the
early 1930s. The advent of Social Security simply provided a greater
incentive for employers to adopt a tabulator system, whether by
acquiring their own machines or by using an IBM service bureau.

Tabulator Twilight
New demands for regular reporting of Social Security data firmly
cemented ties between business and government through the medium
of punched card machinery. To adhere to the system, business needed
the punched card, which had multiple uses in addition to compiling
data for reporting to government agencies such as Internal Revenue
and Social Security. The range of uses to which such machinery had
been put by business in the twenty years before 1936 keeping track of
inventory, sales, and employee hours facilitated the transition to wage
and tax reporting.
During World War II, as companies expanded to meet defense demands,
they had to do so with tighter inventories. Tabulators now became a
necessity, and tabulator companies appear to have had no difficulty
obtaining materials; annual production numbers exceeded prewar
totals by as much as double.93 Naturally, not all of these machines
went to business firms; between June 1942 and the end of 1943
approximately half went to the military. While some of these were
employed in traditional sorts of record keeping such as personnel and
purchasing, others were used for intelligence analysis and for
92Social Security Payrolls Reports Statistics (IBM, 1936), IBM Archives.
93See, e.g., "Controlled Materials Plan using punched cards to control the
flow of critical materials for the War Production Board, " Bulletin 1-0007,
Remington Rand, Tabulating Machines Division, 1943; "History of the
Administration ... ," War Production Board (n. 74 above), p. 43.
Punched Card Machinery in Business and Government 779
calculating artillery tables.94 But in those realms it was obvious that
they were slow and labor-intensive, and the natural consequence was
the pursuit of alternatives such as the Differential Analyzer and
ENIAC.95 The latter was a peculiar hybrid of punched card machine
and electronic circuitry. Yet it clearly suggested the feasibility of a
newer, faster system.
When one thought about it, the tabulator's shortcomings were clear.
First, cards had to be punched, verified, sorted, collated, and tabulated,
each in a separate machine. Second, operators had to carry volumes of
cards from one machine to another to accomplish the various tasks of
sorting, collating, and tabulating. Third, the machines were at their best
in analyzing large volumes of identical work; variations required
manual attention. Nevertheless, tabulators were significant tools in the
establishment of effective procedures for managing records. Most
important, they fostered a better under-standing of problems entailed in
calculation and, beyond that, a vision of how those problems could be
addressed even more effectively. The IBM 603 and ENIAC marked the
beginning of a new epoch. The epoch of punched card machinery was
essentially over by the early 1960s, by which time the virtues of two
generations of electronic digital computers had been demonstrated in
tabulator work as well as other forms of computation. Even so, for
another decade tabulators were kept in service for specialized,
repetitive applications. When electronic computers finally proved
sufficiently versatile for any sort of computation, business and
government had been thoroughly primed for their use through fifty
years' experience with mechanical tabulators. Now, as venerable
artifacts, tabulators may be found in exhibits of the tools that
facilitated the growth of American business and government in the
20th century.

94Kahn, The Codebreakers: The Story of Secret Writing (n. 7 above), pp.

563—64: Goldstine, The Computer from Pascal to von Neumann (n. 3 above),
pp. 129—30.
95 Nancy Stern, From Eniac to Univac: An Appraisal of the Eckert-Mauchly

Computers (Bedford, Mass., 1981); Arthur W. Burks and Alice R. Burks,

"The ENIAC: First General-Purpose Electronic Computer," Annals of the
History of Computing 3 (October 1981): 310—99. On the use of the
Differential Analyzer see Goldstine, The Computer from Pascal to von
Neumann (n. 3 above), and Larry Owens, "Vannevar Bush and the
Differential Analyzer: The Text and Context of an Early Computer."
Technology and Culture 27 ( January 1986): 63—95.