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Quick facts for kids Thomas J. Watson

Born	Thomas John Watson (1874-02-17)February 17, 1874 Campbell, New York, U.S.
Died	June 19, 1956(1956-06-19) (aged 82) Manhattan, New York City, U.S.
Occupation	Chairman and CEO of IBM 1914–1956
Spouse(s)	Jeanette M. Kittredge (m. 1913)
Children	4, including Thomas Watson Jr. and Arthur K. Watson

Thomas John Watson Sr. (February 17, 1874 – June 19, 1956) was an American businessman who served as the chairman and CEO of IBM. He oversaw the company's growth into an international force from 1914 to 1956. Watson developed IBM's management style and corporate culture from John Henry Patterson's training at NCR. He turned the company into a highly effective selling organization, based largely on punched card tabulating machines. A leading self-made industrialist, he was one of the richest men of his time and was called the world's greatest salesman when he died in 1956.

Early life and career
NCR
Head of IBM
Personal life
Famous motto
See also

Early life and career

Thomas J. Watson was born in Campbell, New York, the fifth child and only son of Thomas and Jane Fulton White Watson. His four older siblings were Jennie, Effie, Loua, and Emma. His father farmed and owned a modest lumber business located near Painted Post, a few miles west of Corning, in the Southern Tier region of New York. Thomas worked on the family farm in East Campbell, New York and attended the District School Number Five in the late 1870s. As Watson entered his teen years he attended Addison Academy In Addison, New York.

Having given up his first job—teaching—after just one day, Watson took a year's course in accounting and business at the Miller School of Commerce in Elmira, New York. He left the school in 1891, taking a job at $6 a week as bookkeeper for Clarence Risley's Market in Painted Post. One year later he joined a traveling salesman, George Cornwell, peddling organs and pianos around the farms for William Bronson's local hardware store, Watson's first sales job. When Cornwell left, Watson continued alone, earning $10 per week. After two years of this life, he realized he would be earning $70 per week if he were on a commission. His indignation on making this discovery was such that he quit and moved from his familiar surroundings to the relative metropolis of Buffalo.

Watson then spent a very brief period selling sewing machines for Wheeler and Wilson. Watson would later enforce strict rules at IBM against alcohol consumption, even off the job. According to Tom Jr.:

Watson's next job was peddling shares of the Buffalo Building and Loan Company for a huckster named C. B. Barron, a showman renowned for his disreputable conduct, which Watson deplored. Barron absconded with the commission and the loan funds. Next Watson opened a butcher shop in Buffalo, which soon failed, leaving Watson with no money, no investment, and no job.

NCR

Watson had a newly acquired NCR cash register in his butcher shop, for which he had to arrange transfer of the installment payments to the new owner of the butcher shop. On visiting NCR, he met John J. Range and asked him for a job. Determined to join the company, he repeatedly called on Range until, after a number of abortive attempts, he finally was hired in November 1896, as sales apprentice to Range.

Led by John Patterson, NCR was then one of the leading selling organizations, and John J. Range, its Buffalo branch manager, became almost a father figure for Watson and was a model for his sales and management style. Certainly in later years, in a 1952 interview, he claimed he learned more from Range than anyone else. But at first, he was a poor salesman, until Range took him personally in hand. Then he became the most successful salesman in the East, earning $100 per week.

Four years later, NCR assigned Watson to run the struggling NCR agency in Rochester, New York. As an agent, he got 35% commission and reported directly to Hugh Chalmers, the second-in-command at NCR. In four years Watson made Rochester effectively an NCR monopoly by using the technique of knocking the main competitor, Hallwood, out of business, sometimes resorting to sabotage of the competitor's machines. As a reward he was called to the NCR head office in Dayton, Ohio.

In 1912, the company was found guilty of violating the Sherman Antitrust Act. Patterson, Watson, and 26 other NCR executives and managers were convicted for illegal anti-competitive sales practices and were sentenced to one year of imprisonment. Their convictions were unpopular with the public because of the efforts of Patterson and Watson to help those affected by the Dayton, Ohio floods of 1913, but efforts to have them pardoned by President Woodrow Wilson were unsuccessful. However, their convictions were overturned on appeal in 1915 on the grounds that important defense evidence should have been admitted.

Head of IBM

Charles Ranlett Flint, who had engineered the amalgamation (via stock acquisition) forming the Computing-Tabulating-Recording Company (CTR) found it difficult to manage the five companies. He hired Watson as general manager on May 1, 1914, when the five companies had about 1,300 employees. Eleven months later he was made President when court cases relating to his time at NCR were resolved. Within four years revenues had been doubled to $9 million. In 1924, he renamed CTR to International Business Machines. Watson built IBM into such a dominant company that the federal government filed a civil antitrust suit against it in 1952. IBM owned and leased to its customers more than 90 percent of all tabulating machines in the United States at the time. When Watson died in 1956, IBM's revenues were $897 million, and the company had 72,500 employees.

Throughout his life, Watson maintained a deep interest in international relations, from both a diplomatic and a business perspective. He was known as US President Franklin D. Roosevelt's unofficial ambassador in New York and often entertained foreign statesmen. In 1937, he was elected president of the International Chamber of Commerce (ICC) and at that year's biennial congress in Berlin stated that the conference keynote would be "World Peace Through World Trade." That phrase became the slogan of both the ICC and IBM.

Dealings with Nazi Germany

In 1937, as President of the International Chamber of Commerce, Watson met Adolf Hitler. During the 1930s, IBM's German subsidiary was its most profitable foreign operation, and a 2001 book by Edwin Black, IBM and the Holocaust, proves that Watson's pursuit of profit led him to personally approve and spearhead IBM's strategic technological relationship with Nazi Germany. It describes how IBM provided the tabulating equipment Hitler used to round up the Jews. His Hollerith punch-card machines are in the Holocaust Museum today. The book describes IBM's punch cards as "a card with standardized holes", each representing a different trait of the individual. The card was fed into a "reader" and sorted. Punch cards identified Jews by name. Each one served as "a nineteenth-century bar code for human beings". In particular, critics point to the Order of the German Eagle medal that Watson received at the Berlin ICC meeting in 1937, as evidence that he was being honored for the help that IBM's German subsidiary Dehomag (Deutsche Hollerith-Maschinen Gesellschaft mbH) and its punch card machines provided the Nazi regime, particularly in the tabulation of census data (i.e. location of Jews). Another study argues that Watson believed, perhaps naively, that the medal was in recognition of his years of labor on behalf of global commerce and international peace.

Because of his strong feelings about the issue, Watson wanted to return his German citation shortly after receiving it. When Secretary of State Hull advised him against that course of action, he gave up the idea until the spring of 1940. Then Hull refused advice, and Watson sent the medal back in June 1940. Dehomag's management disapproved of Watson's action and considered separating from IBM. This occurred when Germany declared war on the United States in December 1941, and the German shareholders took custody of the Dehomag operation. However, during World War II, IBM subsidiaries in occupied Europe never stopped delivery of punch cards to Dehomag, and documents uncovered show that senior executives at IBM world headquarters in New York took great pains to maintain legal authority over Dehomag's operations and assets through the personal intervention of IBM managers in neutral Switzerland, directed via personal communications and private letters.

Dealings with the United States

During this same period, IBM became more deeply involved in the war effort for the U.S., focusing on producing large quantities of data processing equipment for the military and experimenting with analog computers. Watson, Sr. also developed the "1% doctrine" for war profits which mandated that IBM receive no more than 1% profit from the sales of military equipment to U.S. Government. Watson was one of the few CEOs to develop such a policy.

In 1941, Watson received the third highest salary and compensation package in the U.S., $517,221, on which he paid 69% in tax.

Watson had a personal interest in the progress of the war. His eldest son, Thomas J. Watson Jr., joined the United States Army Air Corps and became a bomber pilot. He was soon hand-picked to become the assistant and personal pilot for General Follet Bradley, who was in charge of all Lend-Lease equipment supplied to the Soviet Union from the United States. Watson, Sr.'s youngest son, Arthur K. Watson, also joined the military during the conflict.

Post-World War II

Watson worked with local leaders to create a college in the Binghamton area, where IBM was founded and had major plants. In 1946, IBM provided land and funding for Triple Cities College, an extension of Syracuse University. Later it became known as Harpur College, and eventually evolved into Binghamton University. Its school of engineering and applied science is named the Thomas J. Watson College of Engineering and Applied Science.

After World War II, Watson began work to further the extent of IBM's influence abroad and in 1949, he created the IBM World Trade Corporation in order to oversee IBM's foreign business.

Watson retired in 1956 and his oldest son, Thomas J. Watson Jr., became IBM's CEO. He died on June 19, 1956, in Manhattan, New York City and was buried in Sleepy Hollow Cemetery in Sleepy Hollow, New York.

Personal life

Watson married Jeanette Kittredge, from a prominent Dayton, Ohio railroad family, on April 17, 1913. They had two sons and two daughters.

Thomas Watson, Jr. succeeded his father as IBM chairman and later served as ambassador to the Soviet Union under Jimmy Carter
Jeanette Watson Irwin married businessman John N. Irwin II, later ambassador to France
Helen Watson Buckner became an important philanthropist in New York City
Arthur K. Watson served as president of IBM World Trade Corporation and later, as ambassador to France

As a Democrat (after his criminal indictment by the Taft Administration), Watson was an ardent supporter of Roosevelt. He was one of the most prominent businessmen in the Democratic Party. He was considered Roosevelt's strongest supporter in the business community.

The gravesite of Thomas J. Watson, Sr.

Watson served as a powerful trustee of Columbia University from June 6, 1933, until his death. He engineered the selection of Dwight D. Eisenhower as its president and played the central role in convincing Eisenhower to become president of the university. Additionally, he served as a trustee of Lafayette College and is the namesake of Watson Hall, a campus residence hall.

In 1936 the U.S. Supreme Court upheld a lower court decision that IBM, together with Remington Rand, should cease its practice of requiring its customers to buy their punch cards from it alone. The ruling made little difference because IBM was the only effective supplier to the market, and profits continued undiminished.

In 1937, Watson was awarded the Order of the German Eagle by Adolf Hitler. Watson was also president of the International Chamber of Commerce in 1937; the medal was awarded while the ICC was meeting in Germany that year.

In 1939, he received an honorary degree in Doctor of Commercial Science from Oglethorpe University.

In the 1940s, Watson was on the national executive board of the Boy Scouts of America and served for a time as an international Scout commissioner. E. Urner Goodman recounts that the elderly Watson attended an international Scout commissioners' meeting in Switzerland, where the IBM founder asked not to be put on a pedestal. Before the conference was over, Goodman relates, Watson "... sat by that campfire, in Scout uniform, 'chewing the fat' like the rest of the boys". He received the Silver Buffalo Award in 1944. His son, Thomas Jr., later served as national president of the Boy Scouts of America from 1964 to 1968. He was also inducted into the Steuben County (NY) Hall of Fame. Throughout his life Watson continued to own and enjoy the family farm on which he was born. In 1955 he and his wife gave it, along with one million dollars, to the Methodist Church for use as a retreat and conference center, to be named Watson Homestead in memory of his parents. Watson Homestead became independent of the church in 1995, and continues as a conference and retreat center. The one-room school that Watson attended as a child is still on the grounds.

Watson was chairman of the Elmira College centennial committee in 1955 and donated Watson Hall, primarily a music and mathematics academic building.

Watson was a member of both the American Academy of Arts and Sciences (1960) and the American Philosophical Society (1984).

He was posthumously inducted into the Junior Achievement U.S. Business Hall of Fame in 1990.

Famous motto

"THINK" – Watson began using "THINK" to motivate, or inspire, staff while at NCR and continued to use it at CTR. International Business Machines's first U.S. trademark was for the name "THINK" filed as a U.S. trademark on June 6, 1935, with the description "periodical publications". This trademark was filed fourteen years before the company filed for a U.S. trademark on the name IBM. A biographical article in 1940 noted that "This word is on the most conspicuous wall of every room in every IBM building. Each employee carries a THINK notebook in which to record inspirations. The company stationery, matches, scratch pads all bear the inscription, THINK. A monthly magazine called 'Think' is distributed to the employees." THINK remains a part of IBM's corporate culture; it was the inspiration behind naming IBM's successful line of notebook computers, IBM ThinkPad. In 2007, IBM Mid America Employees Federal Credit Union changed its name to Think Mutual Bank.