Thomas J. Watson Biography

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Encyclopedia of World Biography on Thomas J. Watson

Thomas J. Watson (1874-1956), American business executive, assumed the management of International Business Machines (IBM) in 1914 and built it into one of the world's largest corporations.

Thomas J. Watson was born February 17, 1874, in Campbell, New York. He attended the Adison Academy but turned down his father's offer to pay his college expenses. Instead, he took a short course in the Elmira School of Commerce and became a salesman in Painted Post, New York.

In 1898 Watson joined the fast-growing National Cash Register Company as salesman. His first efforts were less than spectacular, but he received encouragement from his superiors, who realized the difficulty of the product market. During the next 15 years he moved steadily up the ladder, eventually becoming general sales manager. While working on advertising material, Watson produced a sign which read "THINK." This attracted John Patterson, the company's founder, who ordered copies for all offices.

Watson left National Cash Register in 1913 after a dispute over an antitrust legal issue and became president of Computing-Tabulating-Recording Company. The firm was a small holding company which controlled four other small firms that produced a punch-card tabulator, time clocks, and other machines. About this time Watson married Jeannette M. Kittredge, who bore him four children.

One of Watson's first tasks with his new firm involved the negotiation of a loan for expansion. Watson, like many other businessmen of his era, embraced the concept of research and development, and much of the borrowed funds went into an engineering laboratory. From this and other laboratories came new machines such as the key punch, card sorters, tabulators, and eventually the computer. In 1924 the firm merged with International Business Machines Corporation (IBM) and took its name. The success of Watson's leadership is dramatically revealed by investment data. One hundred shares, which would have cost $2,750 in 1914, by 1956 were equivalent to 3,990 shares valued at $2,164,000. By 1941 IBM held nearly 1,400 patents on various types of business machines.

Having been a salesman, Watson placed great emphasis on that area of company activity. He insisted that IBM salesmen know how to install and service products as well as sell them. Labor conditions and benefits were always regarded as excellent.

IBM became a virtual monopoly, largely because of its patents and because the firm chose to rent its equipment rather than sell it. In 1952 the Federal government instigated an antitrust suit against IBM, charging that the firm controlled over 90 percent of all the tabulating machines in the country. The company agreed to a consent decree in 1956, by which competition was ensured.

Watson had many other interests outside the business world. For many years he served as a trustee for Columbia University. He participated in many ways to encourage and support the fine arts and gave financial assistance to all religious groups. He served as president of the International Chamber of Commerce. Watson acted as an adviser to several U.S. presidents. He died on July 19, 1956, in New York City.