This article appeared in the Dayton Daily News on July 4, 1976
Counter device designed to keep bartenders honest led to birth of NCR
By Carl V. Roberts
The story has been told thousands of times and in almost as many different ways. But, it is a good story, fantastic story really, any way it is told.
It is that because its ingredients – things like saloons and tinkerers and ideas born in strange places to solve persistent problems and success out of failure by eccentric geniuses – are as much a part of the American business and industrial story as they are of the NCR story.
It starts with James R. Ritty, who had been a carpenter and a shingle maker before he opened a saloon at 5 Market St. about 1868. It was listed the first time in the 1868-69 city directory.
The next directory, which was dated 1871-72, shows Ritty with a restaurant and saloon at Old No. 92 Market St.
In 1873 he is in business with John Y. Dodds in a wine house and saloon at 10 S. Main St., a partnership that lasted two years, apparently.
THE 1875-76 DIRECTORY shows him at the Main St. stand, without a partner but with a considerably higher tone to his listing: “wholesale and retailer dealer in pure whiskies, wines and cigars.”
The single year directory for 1876, apparently a Centennial special, shows no change.
The next edition, for 1877-78, is significant. He has expanded and adopted a business name. James R. Ritty’s Empire Saloon is now at 10 and 12 S. Main St.
It was about this time, according to legend, that a business problem came to a head. He knew his bartenders were stealing him blind, because gross receipts at the end of any day came nowhere near matching the amount of booze that had been poured from the bottles.
We do not know whether it was the loss of the money or the loss of sleep from trying to watch the cash drawer close enough to stop the former, but it seems that by 1878 James Ritty, then just 42 years old, was on the verge of a nervous breakdown. He decided to take an ocean voyage, the bartenders having left him enough for that.
ON THE WAY TO Europe or on the way back, perhaps both, he visited the ship’s engine room. He undoubtedly saw pistons and governors and drive shafts and steam gauges, but something else caught his eye. It was the dial of the RPM counter which recorded the revolutions of the ship’s screw.
There is no technical relationship between what he saw and what came out of it, but a word describing the function must have stuck in his mind. That was what he needed, a counter, something to count the day’s receipts.
If a device could be made to count the revolutions, why not one to count transactions. When Ritty got home, he tossed the question to older brother John, “a mechanic with an inventive mind,” according to the legend.
It might be well at this point to examine the legend.
None of the Rittys are listed in the first effort at a city directory here, although the family probably had moved from Cincinnati several years before.
LEGER RITTY, THE father, was in the second directory, issued in 1856, as a botanic physician, or herb doctor, and appeared in every edition until his death in 1869 at the age of 77. The mother, Anna Mary Ritty, was 80 when she died in 1880.
The Rittys had five sons, Sebastian, Peter, John, James and Joseph, in that order. Joseph was killed in an accident when still a youth.
John, then 22, was the only other Ritty in the 1856 book and his occupation was carpenter. From 1858 through 1861 he was part of “S. Ritty & Brother, grain cradle manufacturers.” Peter was listed as a carpenter.
James made his first appearance in the 1864-65 book as a carpenter, by then John’s occupation again. Sebastian was now a partner in “Webbert & Co., strawcutters,” and Peter was in a similar role with “Steiner & Co., butchers.”
Two years later, Sebastian is a foreman for “P. Ritty & Brother, shingle manufacturers.” The “& brother” is James, for John is now running a saloon at 5 Market St.
This is a far piece from which to assay family relationships and the effect of recorded occupations on legends, but –
THE 1868-69 directory shows James as owner of the saloon at 5 Market St. and John as a laborer. And laborer or carpenter was as close to a mechanical occupation as John Ritty ever got, although he is said to have invented a railroad car coupling and was listed as co-inventor of James’ thief-proof cash counter.
Between 1868 and 1876, something over a year before James took his cash drawer problem on an ocean voyage, John appeared as one of his bartenders when not working as a carpenter or laborer.
Then in 1877, John and Peter opened their own restaurant and saloon at 7 Market St., not far from James’ Empire Saloon.
Sebastian never made it into the legends about one of Dayton’s many famed inventions and, with his qualifications, one has to wonder why.
He had apparently found his niche by 1874 when he became a machinist at the Dodds Agricultural Works. He rose to foremen the next year and 10 years later with the number of his own patents on agricultural machinery growing, he had become superintendent of the bit Ohio Rake Works here.
WHETHER OR NOT they had help from Sebastian, John and James came up with a cash register of sorts less than a year after the European trip.
It had two rows of keys along the lower front, labeled with cents in five cent increments from zero to 95 cents and dollar amounts from zero to $9.
Above that was a large dial, probably resembling the one on the ship, with two sets of numbers around its circumference and two hands operated by the keys. The outer circle of numbers showed cents and the inner one dollars, in amounts corresponding to those shown on the keys.
It had something else, two locked-in adding discs that moved in concert with the dial hands and total up the day’s sales.
There must have been some bugs in it, for the Rittys immediately went to work on a second machine. It was much like the first and was not offered for sale, although it was patented on Nov. 4, 1879.
The third one, called “Ritty’s Incorruptible Cashier,” had, instead of the dial, those pop-up numbers which wound become a familiar sight all over the world, but the brothers still were not satisfied.
THEY FIGURED THEY had something by 1880, when the city directory listed James as “proprietor of the Empire Saloon; also patentee of Ritty’s Cash Register and Indicator.”
This fourth model eliminated the adding discs, probably because slippage or some similar malfunction reduced the accuracy of that part of the operation. The solution was a wide roll of paper in which pins, activated by the keys, punched holes in separate columns, reflecting the amount of each sale – five cents, 10 cents and so on. If there were 100 holes in the 25-cent column at the end of the day, the merchant knew he had done $25 worth of business in 25 cent sales.
The Rittys, saloon keepers by occupation, appear to have had the outlook that has marked American invention and industrial progress – keep on experimenting until you get something that works.
Model No. 4 did work and it was the first one offered for sale, and several were sold. Two of them went into the Miners Supply Co. store at Coalton, Ohio, which had shown a $3,000 loss in two years of operation despite a good volume of business.
ADVERTISING HAD NOT caught on with James Ritty and his machine did not catch on with those who needed it after that initial flurry of sales. By October of 1881 Ritty had had it as an industrialist.
Jacob H. Eckert, a Cincinnati salesman, recognized the usefulness of the device and probably thought some salesmanship was the answer. He offered Ritty $1,000 for the rights to the invention and Ritty accepted, then plunged back into the business he knew best.
By 1882 that decision was paying off. He changed the name of his place at 10 S. main St. from Empire Saloon to No. 10 Saloon and opened a second business, at 123 S. Jefferson St., which he called the Pony House Restaurant and Saloon.
Brother John and Peter were doing all right, too, and expanded their operation to both 7 and 9 S. Market St.
Eckert was sold on the potential for the cash register and indicator. He moved from Ritty’s workshop into bigger quarters at 312 E. Fifth St. and made plans to step up production. He realized within a few months that one man couldn’t do the job, from the standpoint of either time or money. He organized a stock company, capitalized at $10,000 and sold something less than half the shares to four other men, keeping controlling interest.
ONE OF THESE HAD the same kind of interest in protecting cash receipts as the Rittys and he had a more varied business background to boot.
As early as 1862 William S. Sander had owned a saloon on E. Third St. In 1864 he joined with John H. Stoppleman in running the City Brewry on Warren St. opposite Oak. He added another business in 1868, Sander’s Hotel at 276 Third St.
Sander’s older son, Gustav, and the younger one, Adolph, apparently had worked for their father from the time they were old enough to perform various chores. That year of 1868 they became part of a business, however – “William Sander & Sons, dealers in family groceries, flour and feed, Third and Fronts Sts.”
By 1875, Gus was running the hotel which, with the new numbering system, turned out to be at 12 E Third, along with his own wine and beer saloon at 126 E. Third.
Nearby was his father’s “Central Wine Depot, 136 E. Third St., importer and dealer in foreign and domestic wines, liquors, English ale and porter, bottle lager beer, natural medicinal spring waters, brewers supplies, bar glassware, etc.”
ADOLPH, WHO WASN’T to get his own business, a saloon at 33 S. Jefferson St., until 1881, was working for his father.
Gus was prospering, apparently. He added new “imported and domestic” items frequently and the size of his listing got bigger each time a city directory was published. He also added some to “Gus W. Sander’s Sample Room” about the time Adolph got his saloon.
Considering Gus’ experience and success in business, it is not surprising that device designed to protect profits, or that the 1882-83 directory had this listing:
“National Manufacturing Co., 312 E. Fifth St., manufacturers of cash registers and indicators; Gus W. Sander, president; J.H. Eckert, secretary-treasurer.”
The 1883-84 book still had Sander as president, J.E. Gimperling was manager and treasurer and a fellow named John H. Patterson was secretary.
IT WAS JOHN H. PATTERSON who had bought those two Model 4 machines for his miners supply store in Coalton which had turned the profit-loss statement around before he sold the business in 1883.
He came back to Dayton then, the place of his birth, and went into the coal business with his brother, Frank J. Patterson. Eckert had increased capitalization of the National Manufacturing Co. to $15,000 the year before and John H. Patterson had brought 25 shares of stock. When Eckert subsequently sold his controlling interest to Dayton financier George L. Phillips, Patterson agreed to become a director and the secretary.
Despite improvements, including the “bell heard round the world,” no one was buying cash registers because, Patterson analyzed later, not enough people knew about them.
Coal was selling though in the Patterson & Co. coal yards, which had grown to six by the time Patterson decided to get out of that business in 1884. He sold that to the Acme Coal Co., but when he tried to sell his National Manufacturing Co. stock he could find buyers for only five of the 25 shares.
LOOKING FOR A NEW field, he and Frank went to Colorado with the idea of investing in a cattle ranch. While there, he met a New England merchant who said he could stay away from his business on the long vacation he was taking because, “I have a capable manager and a cash register made in Dayton, Ohio.”
So, the experience in the Coalton store wasn’t a one-of-a-kind thing, after all. The Patersons headed back to Dayton and with things even worse in the cash register industry, it was an easy matter to buy “Phillips’ folly” for $6,500, the day they got back in town.
The business community’s derision was now turned on John H. Patterson, so persistently that he offered Phillips $2,000 to take back the stock. Phillips said he wouldn’t take it back as a gift, to which Patterson is quoted as saying; “Very well. I’m going into the cash register business and I’ll make a success of it.”
The rest of the story is history, rather than legend. The firm name was changed to the National Cash Register Co. and it was moved into the Callahan Power building at Fourth and St. Clair. John H. Patterson became president and Frank J. Patterson became vice president, secretary and treasurer.
IN 1888, THE ‘‘OFFICE and works” were moved to “Brown St., near the south corporation line,” into a 60 by 100-foot building constructed specifically for the manufacture of cash registers.
John H. Patterson unquestionably blazed many trails in a career which brought praise and criticism. He is rated as having been well ahead of his time in salesmanship motivation, employee education and advertising, the last ending the status of unknown quantity which had caused the device to be a failure during the first years.
He inaugurated employe welfare programs that were unheard of, but he was an eccentric genius. His health faddism and dependence on an English valet’s physical fitness ministrations in the later part of his life led Patterson to give the valet unwarranted authority. One act was the formation of an executives’ horse patrol, which resulted in the death of one man. That brought strong criticism by The Daily News, under the late Gov. James J. Cox, and Patterson threatened to move NCR out of Dayton.
PATTERSON HAD a talent for gathering other great inventive minds about him – Hugh Chalmers, who became a major figure in the automotive industry; Thomas J. Watson, who headed the International Business Machines Corp.; Thomas Midgely Jr., chemical engineer of Ethyl Corp. fame, and, of course, many men who went on to big things in automotive development and other fields, Charles F. Kettering, William Chryst, Richard H. Grant and Col. Edward A. Deeds, who wound up his career as head of NCR.
Patterson didn’t have them all in the beginning, though. He took a company that nobody wanted as a gift from one with 13 employees in cramped, rented quarters to one with 115 employees in a specially-designed building – in four years.
It went on from there, of course. By the time John H. Patterson died in 1922 at the age of 78, there were nearly 2 million of those bells ringing on ever improving models in most parts of the globe.
NCR CORP., THE WORLD’S second largest manufacturer of business machines, now makes 21 “business machines” devices in plants in 11 cities located in eight states and in nine foreign countries on three continents and the British Isles. NCR has offices in about 100 countries. The firm is also into related products and services, such as special papers and electronic communications.
A lot of floor space had been added to John H. Patterson’s original 6,000 square feet before his death, but manufacturing facilities now use about 8 million square feet, and that’s less than it was before the transition from electro-mechanical devices to electronic ones.
That change, together with organizational streamlining, has reduced employment, too – from the 1969 peaks of 103,000 world-wide and 20,000 here to approximately 75,000 and 5,000 respectively.
The new, electronic machines – with “now” type nomenclature like “financial terminal” and “disc-oriented magnetic file system” – don’t have bells. But the cash registers (they are “electronic point-of-service” now) still have pop-up numbers, sort of, with a greenish, fluorescent glow.
IN 1886, A BARE 14years after he vowed to make a success of the business, Patterson sold his 1000,000th cash register, a small, counter-top model with a crank on the right side. By 1905 he had an electric model with a small motor invented by Charles F. Kettering and was approaching 500,000 in sales, NCR hit 1 million in 1920 and two million some three months after Patterson died on May 7, 1922.
NCR passed 10 million in 1972 and sales of all types of machines, from the beginning to now, are estimated at 11 million.