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Through the '20s and '30s, no fewer than 45 new business machines appeared under the new IBM label. While other companies cut payrolls through the Depression, Watson refused to lay off men. IBM stored away what it could not sell, against better days. In 1933 Watson bought up Electromatic Typewriters, Inc., a Rochester (N.Y.) firm which had the first completely electric typewriter, and put the first such mass-produced machine into U.S. business offices.
Today the IBM empire spreads to every corner of the world, selling or renting business machines at the rate of $461 million in 1954. In the U.S. alone, IBM employs 34,000 workers; at six plants (Endicott, Poughkeepsie and Kingston, N.Y.; Washington, D.C.; Greencastle, Ind.; San Jose, Calif.) it makes 5,960 different models of business machines which it sells or rents through 188 U.S. offices. Overseas, IBM's World Trade Corp., run by 35-year-old Arthur Watson, Tom Jr.'s younger brother, employs 16,500 more workers in 17 smaller plants, 227 offices in 79 nations.
IBM has never had a union; it never needed one. Besides high wages ($2.25 an hour for production employees, $10,000 and up for salesmen), IBM puts large chunks of its payroll (24% in 1954) into employee benefits such as free country clubs, bowling alleys, 52 extracurricular activities with 656 instructors, teaching everything from psychology to home repairs. And for IBM's stockholders, Watson has not missed a dividend in 39 years. A man who bought 100 shares of IBM stock in 1914 would have paid out $2,750 for his original stock, sp.ent another $3,614 to take advantage of all options. Today he would own 3,893 shares worth $1,492,965.
At Work at Five. Tom Watson was not content just to build an empire; he also carefully trained Tom Jr. to take it over. The training started as soon as Junior was old enough to toddle. At the age of five, he went on his first inspection tour of an IBM plant; four years later he went to Europe with his father on the first tour of the new overseas division. IBM executives were frequent guests at the big, rambling Watson mansion in Short Hills, N.J. and at the 1,000-acre farm 30 miles away in the rolling Jersey hills near Oldwick. Tom Jr. got to know them all, and through them, IBM.
When he was twelve, he even made a speech before IBM's 100% Club of star salesmen. It was a "very good, short speech," his father happily recalls. For Tom Jr., his father set strict standards and never relaxed them. When Tom, an ardent boy scout, failed to make his Eagle badge, his father refused to send him on a gala seven-week trip to Europe, which he was financing for other Short Hills scouts.
Young Tom Watson was no ball of fire in his studies in school. He went to private schools in Short Hills, barely managed to scrape through Hun School in Princeton. After graduation from Brown University, he joined IBM. Starting at the bottom as a salesman in Manhattan's financial district, young Tom soon proved that he was his father's son. In an area where previous IBM salesmen had never made 100% of quota, he hit 231% and hung up a record. Says his father: "That was the only right way. He had to make his own records. Otherwise, people might feel that he had some special help, which he did not have."