ERMA: The First Computer for the Banking Industry

Around 1950, there was a great leap in the development of computers. But as with all inventions, there still exists a problem – the computers were not able to perform accounting functions.

It was around the time when checks were introduced to the world. People find it useful and practical. The banks, on their part, did not foresee the huge demand for checks. Thus, it became a burden for most to process the increasing number of checks of their clients. Some were even forced to close early and refuse accepting more checks just so they can finish closing their transactions for the day.

To solve this problem, the Bank of America tapped the help of Stanford Research Institute (SRI) to create a facility that would automate bookkeeping for banks. It was not an easy feat. The team over at SRI stumbled upon a number of roadblocks. Checks were done alphabetically so if a new account is to be added, the whole collection needs to be reshuffled. Thus, the alphabetical listing was converted into account numbers wherein a new account can merely be added to the end of the list.

But that’s not all, they need to devise a way wherein discretion of account numbers is kept. Barcodes and the OCR system are not viable candidates for inputting the account numbers to the system since they could be manipulated. In the end, it was decided that the account numbers will be printed via MICR which would then be recognized by a magnetic reader.

For a span of five years, they worked and tested numerous models until finally, the ERMA computer was created. ERMA, short for Electronic Recording Method of Accounting, became the first computer that is able to perform accounting functions. But it was only in 1959 when the first model was distributed to one of the branches of Bank of America. But nevertheless, the ERMA computer was a success. It paved the way for efficient banking and check handling. One ERMA computer could handle 600 checks in a minute. It proved to be so effective that by 1970, the Bank of America became the world’s largest bank because of it.

IBM 701 EDPM Computer

IBM, short for International Business Machines, is perhaps the largest computer manufacturing company in the world. It has provided us with a number of breakthroughs in the world of computers. But like most companies, they didn’t start with computers. IBM, when it first began in 1911, was producing punch card tabulating machines. Later on, they branched out to calculators. It was only in 1953 when they started to build what was to become IBM’s first commercially available computer, known as the 701 EDPM Computer.

It began when Thomas Watson Jr. wanted to build a Defense Calculator for the United Nations. It was during the time of the Korean War and a number of scientific computers would greatly aid the US government and the United Nations in their aircraft design and nuclear development. By this time, IBM only had the experience of building a single computer, namely the Mark 1 Computer. They have no experience in producing multiple computers of the same kind, one that would be able to fit in all the requirements for these technical applications. But Watson knew what he was doing. They began the design immediately. A year after, the first 701 EDPM Computer was produced.

It was a success. The 701 Computer was IBM’s first computer that stores programs in their internal electronic memory. It uses magnetic tape for information storage. Although its speed is highly reliant to its memory capacity, it was the fastest input-output processing computer at that time. After the commercial production, all 19 units were shipped out for use of the government. Eight of these were distributed to aircraft companies, three to research centers, three to atomic research laboratories, two to the navy and the rest to the Defense Department of the United States.

The production of the 701 Computer also became a significant step for IBM. It became the start of their transition from being a company that produces punch cards to becoming a worldwide computer manufacturing company. They went on to improve the model and began a series of inventions that will change the course of computer history.

The ABC Computer

Before the UNIVAC computer and the ENIAC 1 computer, there is the ABC computer. In fact, the ABC computer has always been considered as the first computer ever invented. Although it was not programmable, it can solve linear calculations which, at that time, is already considered a groundbreaking achievement.

The ABC Computer, short for the Atanasoff-Berry computer, was created thanks to John Vincent Atanasoff and Clifford Berry. Around 1930s, Atanasoff was a Mathematics and Physics professor at Iowa State College. He was at the forefront in discovering new theories related to Physics. But his experiments and theories require a great deal of calculations. During that time, the most advanced calculating machine would be the Monroe calculator but even that, required eight hours to complete a simple set of linear equations. The amount of time set aside for calculations greatly stalled the experiments. Atanasoff felt the need of something more advanced to carry the computations. He and his team could not afford the time lost and errors brought by the Monroe calculator.

Atanasoff sought the help of Clifford Berry and they went on to create the first electronic digital computer. With Atanasoff’s background in electrical engineer, they decided that electricity will be the proper medium for the computer. They were looking to create a machine that would ensure the accuracy and speed of the calculations. But it was no easy feat. They have to deal with lapses in the computing process brought about by the lack of and leakage of power. For the next few months, they brainstormed over various ideas. Finally in 1937, they were able to come up with the appropriate designs for the computer construction. To avoid any lapses, they would make use of a regenerative process, condensers for the memory and direct logical action for the method of computation.

The ABC Computer was finally built in 1940. Although it lacked most of the components of what is considered to be a “complete” computer today, the ABC computer was regarded by many as the first computer.

UNIVAC: The First Commercial Computer

UNIVAC, short for Universal Automatic Computer, was the first computer to be available commercially. It marked the start of computers being mass produced and ordered by companies and large establishments. Prior to that, most computers were built and designed according to the specifications of a single company. A company would normally have only a single computer.

It was in the year 1946 when the design of UNIVAC and its subsequent manufacture began. The United States Census Bureau needed a computer that was fast enough to record the rapidly increasing U.S. population at that time. It was, after all, the period of the baby boom. They approached John Eckert and John Mauchly. Both were still associated with the Moore School of Engineering but soon left after receiving the invitation from the Census Bureau. They went on to form the Electronic Control Company and started the design of what was to become the UNIVAC Computer.

After a series of tests, negotiations and redesigning, they have not yet finished the project. Worse, their company is nearing bankruptcy. Eckert and Mauchly have no choice but to seek another investor in the form of Remington Rand Inc. Finally in 1951, the first UNIVAC computer was delivered to the Census Bureau. They went on to manufacture 46 other UNIVAC computers thus, becoming the first computer to be mass produced commercially.

These computers were highly favored compared to that of IBM which was, at that time, the largest computer company. UNIVAC has 500 microseconds in speed which is faster than any computer IBM has ever manufactured. But its popularity truly heightened when UNIVAC was able to correctly predict the U.S. presidential elections.

The UNIVAC computer predicted that Eisenhower would win the following year’s presidency over Stevenson. The numbers showed that Eisenhower would win by a landslide. But the television network’s crew doubted the predictions and dismissed the numbers as a mere error of the computer. However, Eisenhower really did win by a huge margin the following year, exactly within a 1% range of the predictions.

News spread fast and UNIVAC became the most sought after computer during that period. Companies began ordering more units, including General Electric who used the UNIVAC for its payroll services.

Ethernet: The Start of Networking Systems

Our lives have become more convenient thanks to the numerous advancements in technology. But it wasn’t always like this. Decades ago, internet was not yet invented. Computers were not even able to stay connected to one another. Everything has to be done the hard way. If you need to transfer one file to another computer, you have to make use of floppy disks. At that time, there is no such thing as a shared folder. But all that changed when Ethernet was invented.

Ethernet is a system that allows multiple computers to stay connected together. It networks all the computers that are housed nearby, let’s say, within a building. This great invention was made possible thanks to Robert Metcalfe and his team at Xerox. It was around 1970s when Xerox wanted to build the first laser printer that could accommodate all the printing jobs within a building. To be able to achieve this, they need to connect all the computers to the printer and ensure that the network is fast enough to immediately capture the print command and avoid having to wait over the lag time. That’s where Robert Metcalfe entered the picture. He was tasked to head the project and come up with something that would solve their problem.

Metcalfe achieved this by connecting computers through the Ethernet cable. Its media access control is based on the ALOHAnet, a radio network, but there were problems when using this. When two or more computers are sending signals at the same time, they would collide with one another. This results to the loss of the transmission. Metcalfe improved this by ensuring that an acknowledgement is in place. A sender will receive an acknowledgement when their signal passes through. If there is a collision of transmissions then, a jam will be signaled and the sender has to resend his signal. This way, transmissions will not be lost.

Finally in 1973, Ethernet was invented. And it was a success! Users found it useful and more convenient. Thus, Xerox went on to work with Intel and Digital Equipment to standardize the use of Ethernet for local area networks.