John Henry Patterson
and the early history of the National Cash Register Company
The cash register, which was NCR's original product, was invented in the 1870s by a Dayton saloon-keeper, James Ritty. Ritty's establishment, the Empire Cafe, was at 10 South Main in downtown Dayton. While the Empire Cafe had plenty of customers it wasn't making much profit, and Ritty suspected his bartenters were dipping into the cash box -- which literally was just a box into which was tossed the money from each transaction. There was no record of what was taken in at the end of the day except how much money was still in the box.
This problem was apparently on Ritty's mind during a trip to Europe in 1878. He noticed a device in the ship's engine room which automatically recorded the revolutions of the propeller shaft. Inspired by that idea, Ritty went back to Dayton and built a machine which punched holes in a roll of paper to record the amount of each transaction. The "Incorruptible Cashier" was patented on Nov. 4, 1879.
Ritty himself never made any money with his invention and sold out after a couple of years. John Patterson entered the picture in 1884, buying the rights to the machine and creating the National Cash Register Company.
John Henry Patterson grew up on a farm outside of Dayton, the seventh of eight children. The family was not poor, however, and John Patterson was sent to Dartmouth College for his education. Patterson's first business was delivering coal, and with his younger brother Frank, built up a business which included retail coal yards, three mines, a store and a railway.
But then after investing in a venture that went bad, the Patterson brothers were forced to sell their businesses. John Patterson was 40 by this time, without a job and looking for a new start.
After a trip out West with the idea of buying a cattle ranch, Patterson in 1884 turned his attention to Ritty's cash register. Patterson was already familiar with the device, having used them in his coal store and even owned a small amount of the floundering company's stock. Ritty was by this time out of the picture and the controling interest in the company was in the hands of Dayton businessman George L. Phillips.
In October 1884, Patterson bought out Phillips' stock for $6,500. (Legend has it Patterson got cold feet the next day and tried unsuccessfully to get out of the deal).
If Patterson wavered at first, he seems not to have again. He quickly launched an aggressive and expensive direct-mail program to convince shopkeepers that they needed something they'd gotten along without so far.
Patterson's first factory employed a dozen workmen and cranked out four or five registers a week. He then built his own factory on his farm with better working conditions and output increased to 25 registers a day.
Although paternalistic to the point of tyranny, Patterson paid his employees well and introduced many innovations to improve their condition. He provided employees with building lots on the factory grounds, served free hot lunches and paid for company doctors and dentists . He even built a park where employees could go on Sundays.
The "Cash" grew rapidly through the 1890s and into the new century. Much of that success was due to a good product and innovative sales techniques. Patterson's brother-in-law, Joseph H. Crane, had honed a sales pitch that he used repeatedly with every prospect. Patterson had the speech printed out and distributed to all salesmen. Patterson also opened his own salesman's training school -- Sugar Camp -- in 1894.
Of course, not all of Pattersons eccentric directives can be looked back on as innovations. He fired men indiscriminately and pried into the personal lives and habits of his salesmen. In 1904, enthusiastic about a health trainer he had brought from England, Patterson ordered his salesmen to report to the factory at 5 a.m. where exercised and rode horses before beginning their work day.
During this period Patterson began a public feud with another important Dayton leader, James M. Cox, the publisher of the Dayton Evening News. When one of Patterson's men died in a morning riding accident, Cox wrote an editorial about it. Patterson sued for libel and a feud began. Cox editorialized against Patterson and Patterson filed repeated suits and threatened to move his business away from Dayton.
Patterson also had legal troubles with the federal government. In 1911 the government filed an antitrust suit against National Cash Register. According to the suit, Patterson's company had spied on competitors, pried secrets from competitors' employees and even hired "competition men" to hound other salesmen on their rounds.
Patterson also faced a criminal charge of restraint of trade.
He was convicted Feb. 13, 1913 and sentenced to a year in jail. And then in March of that year came the Great Flood of 1913 and John Henry Patterson took his place in Dayton history. During a five-day period beginning March 23, 10 inches of rain fell in the Miami Valley. On March 25 the Great Miami River rose above its levee and water rushed through Downtown Dayton at 25 miles per hour. The city, situated at the convergence of three rivers, was flooded an average of 12 deep and as much as 20 feet in some places. The deluge killed 79 people, 1,400 horses and did $129 million in damage.
When it became clear that the levee would likely fail that day, Patterson ordered his factory closed and converted to flood relief. The building was on high ground and remained dry. Patterson's organization commandeered vehicles to move food and medical supplies to the factory, part of which was converted to building rowboats and oars. Patterson himself rode on horseback along the banks of the flood giving orders.
John H. Patterson, third from right, stands at the water's edge during the 1913 Flood. Patterson organized his employees at NCR to provide relief efforts for those stranded by the flood.