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Business Adventures
twelves classic tales from the world of wall street
John Brooks
5. xerox xerox xerox xerox 166
pp.166-200
p.166
mimeograph
Thomas Alva Edison
churches, schools, boy scout troops
p.167
a bad repute reflected in the various overtones of the English noun and verb “copy”
p.167
from the late 16th century until Victorian times “copy” and “counterfeit” were nearly synonymous.
p.167
it was a favorite Victorian habit to call one object, or person, a pale copy of another.
p.168
offset printing press
p.168
Photosats
largely limited to the copying of architectural and engineering drawings and legal documents.
p.168
a typewriter with carbon paper in its platen.
p.169
Minnesota Mining & Manufacturing's thermofax, introduced in 1950, used heat-sensitive copying paper;
American photocopy's dial-a-matic autostat (1952) was based on a refinement of ordinary photography; Eastman Kodak's verifax (1953) used a method called dye transfer;
Autostat and Verifax were hard to operate and turned out damp copies that had to be dried, while ThermoFax copies tended to darken when exposed to too much heat, and all three could make copies only on special treated paper supplied by the manufacturer.
p.171
Battelle Memorial Institute, a large non-profit industrial-research organization in Columbus, Ohio.
1938 and a second-floor kitchen above a bar in Astoria, Queens,
32-year-old inventor named Chester F. Carlson.
The son of a barber of Swedish extraction, and a graduate in physics of the California Institute of Technology,
Carlson was employed in New York in the patent department of P.R. Mallory & Co., an Indianapolis manufacturer of electrical and electronic components;
p.172
He was devoting his spare time to trying to invent an office copying machine, and to help him in this endeavor he had hired Otto Kornei, a German refugee physicist.
p.172
The process, which Carlson called electrophotography, had ── and has ─ five basic steps: sensitizing a photoconductive surface to light by giving it an electrostatic charge (for example, by rubbing it with fur); exposing this surface to a written page to form an electrostatic image; developing the latent image by dusting the surface with a powder that will adhere only to the charged areas; transferring the image to some sort of paper; and fixing the image by the application of heat. The steps, each of them in itself familiar enough in connection with other technologies, were utterly new in combination ── so new, in fact, that the kings and captains of commerce were markedly slow to recognize the potentialities of the process. Applying the knowledge he had picked up in his job downtown, Carlson immediately wove a complicated net of patents around the invention (Kornei shortly left to take a job elsewhere, and thus vanished permanently from the electrophotographic scene) and set about trying to peddle it.
p.172
Over the next five years, while continuing to work for Mallory, he pursued his moonlighting in a new form, offering rights to the process to every important office-equipment company in the country, only to be turned down every time. Finally, in 1944, Carlson persuaded Battelle Memorial Institute to undertake further development work on his process in exchange for three-quarters of any royalties that might accrue from its sale or license.
pp.172-173
By 1946, Battelle's work on the Carlson process had come to the attention of various people at Haloid, among them th younger Joseph C. Wilson, who was about to assume the presidency of the company.
p.173
Sol M. Linowitz, a bright and vigorously public-spirited young lawyer, recently back from service in the Navy,
Although Haloid had its own lawyer, Wilson, impressed with Linowitz, asked him to look into the Battelle thing as a “one-shot” job for the company.
p.173
“We went to Columbus to see a piece of metal rubbed with cat's fur”, Linowitz has since said. Out of that trip and others came an agreement giving Haloid rights to the Carlson process in exchange for royalties to Carlson and Battelle, and commiting it to share with Battelle in the work and the costs of development. Everything else, it seemed, flowed from that agreement.
p.173
Meanwhile, small teams of scientists at Battelle and Haloid, struggling to develop the process, were encountering baffling and unexpected technical problems one after another; at one point, indeed, the Haloid people became so discouraged that they considered selling most of their xerography rights to International Business Machines.
p.173
as the research went on and the bills for it mounted, Haloid's commitment to the process gradually became a do-or-die affair.
p.173
The cost was staggering.
pp.173-174
Between 1947 and 1960, Haloid spent about 75 million dollars on research in xerography, or about twice what it earned from its regular operations during that period;
([ 13+ years of product development ])
p.174
; the balance was raised through borrowing and through the wholesale issuance of common stock to anyone who was kind, reckless, or prescient enough to take it.
p.174
The University of Rochester, partly out of interest in a struggling local industry, bought an enormous quantity for its endowment fund at a price that subsequently, because of stock splits, amounted to fifty cents a share.
p.174
“Please don't be mad at us if we find we have to sell our Haloid stock in a couple of years to cut our losses ot it”, a university official nervously warned Wilson. Wilson promised not to be mad.
p.174
Meanwhile, he and other executives of the company took most of their pay in the form of stock, and some of them went as far as to put up their saving and the mortgages on their houses to help the cause along.
p.174
p.175
And instead of worrying about the future of themselves and their families, the Xerox executives were worrying about their reputation with the friends and relatives whem they had prudently advised not to invest in the stock at twenty cents (20¢) a share. In a word, everybody who held Xerox stock in quantity had got rich or richer ── the executives who had scrimped and sacrificed, the University of Rochester, Battelle Memorial Institute, and even, of all people, Chester F. Carlson,
p.176
“one-per-cent program”, often called the Cleveland Plan ── a system inaugurated in that city under which local industries agree to give one per cent of pre-tax income annually to local educational institutions, apart from their other donations ──
p.177
Further evidence of a systematic campaign turned up when an analysis, made at Xerox's instigation, showed that the 15,000 letters had been written by only about 4,000 persons.
p.178
(The only important part of its technology for which Xerox had refused to grant a license was a selenium drum that enables its own machines to make copies on ordinary paper. All competing products still required treated paper.)
p.178
there was even talk of the day when copiers would be given away to promote sales of paper, the way razors have long given away to promote razor blades.
pp.178-179
For some years, realizing that its cozy little monopoly would eventually pass into the public domain,
mergers with companies in other fields,
mainly publishing and education;
for example, in 1962 it had brought University Microfilms, a library on microfilm of unpublished manuscripts, out-of-print books, doctoral dissertation, periodicals, and newspapers,
and in 1965 it had tacked on two other companies ── American Education Publications, the country's largest publisher of eductional periodicals for primary- and secondary-school students, and Basic Systems, a manufacturer of teaching machines.
p.179
914, a desksize machine that makes black-and-white copies of almost any page ── printed, handwritten, typed, or drawn, but not exceeding nine by fourteen in size ── at a rate of about one copy every six seconds;
the 813, a much smaller device, which can stand on top of a desk and is essentially a miniaturized version of the 914
pp.179-180
2400,
Copyflo, which is capabable of enlarging microfilmed pages into ordinary booksize pages and printing them;
the LDX, by which documents can be transmitted over telephone wires, microwave radio, or coaxial cable;
Telecopier,
a sort of junior version of the LDX and is especially intersting to a layman because it consists simply of a small box that, when attached to an ordinary telephone, permits the user to rapidly transmit a small picture (with a good deal of squeaking and clicking, to be sure) to anyone equipped with a telephone and a similar small box.
p.180
Of all these, the 914, the first automatic xerographic product and the one that constituted the big breakthrough, was still much the most important both to Xerox and to its customers.
.
p.180
In 1966 it could be brought for $27,500, or it could be rented for twenty-five dollars monthly, plus at least forty-nine dollars' worth of copies at four cents each.
p.180
The 914, which is painted beige and weighs six hundred and fifty pounds, looks a good deal like a modern L-shaped metal desk; the thing to be copied ── a flat page, two pages of an open book, or even a small three-dimentional object like a watch or a medal ── is placed face down on a glass window in the flat top surface, a button is pushed, and nine seconds later the copy pops into a tray where an “out” basket might be if the 914 actually were a desk.
pp.180-181
Technologically, the 914 is so complex (more complex, some Xerox salesmen insist, than an automobile) that it has an annoying tendency to go wrong, and consequently Xerox maintains a field staff of thousands of repairmen who are presumably ready to answer a call on short notice.
p.181
The most common malfunction is a jamming of the supply of copy paper,
“mispuff”, because each sheet of paper is raised into position to be inscribed by an interior puff of air, and the malfunction occurs when the puff goes wrong
p.181
copying paper
black electrostatic powder, called “toner”
the selenium drum, must be cleaned regularly with a special non-scratchy cotton, and waxed every so often.
p.182
wallet, watch, keys, and such
pictographic receipt.
p.186
Herbert S. Bailye, Jr., director of Princeton University Press, wrote in the Saturday Review of a scholar friend o his who has cancelled all his subscriptions to scholarly journals; instead, he now scans their tables of contents at his public library and makes copies of the articles that interest him.
p.186
fair-use doctrine should be liberalized for scholastic purposes.
pp.190-191
Dr. Dessauer, a German-born veteran of the company who had been in charge of its research and engineering ever since 1938
, was the man who first brought Carlson's invention to the attention of Joseph Wilson, after he had read an article about it in a technical journal in 1945.
“You want to hear about the old days, eh?” Dr. Dessauer said.
“Well, it was exciting. It was wonderful. It was also terrible. Sometimes I was going out of my mind, more or less literally. Money was the main problem. The company was fortunate in being modestly in the black, but not far enough. The members of our team were all gambling on the project. I even mortgaged my house ── all I had left was my life insurance. My neck was way out. My feeling was that if it didn't work Wilson and I would be business failures but as far as I was concerned I'd also be a technical failure. Nobody would ever give me a job again. I'd have to give up science and sell insurance or something.”
Dr. Dessauer threw a retrospectively distracted glance at the ceiling and went on, “Hardly anybody was very optimistic in the early years. Various members of our own group would come in and tell me that the damn thing would never work. The biggest risk was that the electrostatics would prove to be not feasible in high humidity. Almost all the experts assumed that ── they's say, ‘You'll never make copies in New Orleans.’ And even if it did work, the marketing people thought we were dealing with a potential market of no more than a few thousand machines. Some advisers told us that we were absolutely crazy to go ahead with the project. Well, as you know, everything worked out all right ── the 914 worked, even in New Orleans, and there was a big market for it. Then came the desk-top version, the 813. I stuck my neck way out on that, holding out for a design that some experts considered too fragile.”
p.191
privileged knowledge
pp.191-192
Dr. Harold E. Clark,
“Chet Carlson was morphological”, began Dr. Clark, a short man with a professorial manner who was, in fact, a professor of physics before he came to Haloid in 1949.
“I don't really know whether ‘morphological’ means anything. I think it means putting one thing together with another thing to get a new thing. Anyway, that's what Chet was. Xerography had practically no foundation in previous scientific work. Chet put together a rather odd lot of phenomena, each of which was obscure in itself and none of which had previously been related in anyone's thinking. The result was the biggest thing in imaging since the coming of photography itself. Furthermore, he did it entirely without the help of a favorable scientific climate. As you know, there are dozens of instances of simultaneous discovery down through scientific history, but no one came anywhere near being simultaneous wih Chet. I'm as amazed by his discovery now as I was when I first heard of it. As an invention, it was magnificent. The only trouble was that as a product it wasn't any good.”
p.171
1938 and a second-floor kitchen above a bar in Astoria, Queens,
32-year-old inventor named Chester F. Carlson.
p.192
The main trouble was that Carlson's photoconductive surface, which was coated with sulphur, lost its qualities after it had made a few copies and became useless.
Acting on a hunch unsupported by scientific theory, the Battelle researchers tried adding to the sulphur a small quantity of selenium, a non-metallic element previously used chiefly in electrical resistors and as a coloring material to redden glass.
The selenium-and-sulphur surface worked a little better than the all-sulphur one, so the Battelle men tried adding a little more selenium. More improvement. They gradually kept increasing the percentage until they had a surface consisting entirely of selenium ── no sulphur. That one worked best of all, and thus it was found, backhandedly, that selenium and selenium alone could make xerography practical.
pp.192-193
“Think of it”, Dr. Clark said, looking thoughtful himself.
“A simple thing like selenium ── one of the earth's elements, of which there are hardly more than a hundred altogether, and a common one at that. It turned out to be the key. Once its effectiveness was discovered, we were around the corner, although we didn't know it at the time. We still hold patents covering the use of selenium in xerography ── almost a patent on one of the elements. Not abd, eh? Nor do we understand exactly how selenium works, even now. We're mystified, for example, by the fact that it has no memory effects ── no traces of previous copies are left on the selenium-coated drum ── and that it seems to be theoretically capable of lasting indefinitely. In the lad, a selenium-coated drum will last through a million processes, and we don't understand why it wears out even then. So, you see, the development of xerography was largely empirical. We were trained scientists, not Yankee tinkers, but we stuck a balance between Yankee tinkering and scientific inquiry.”
p.193
But once the machine was on its way out of the shop and on to showrooms and customers, Becker related, his troubles had only begun, because he was now held responsible for malfunctions and design deficiencies, and when it came to having a spectacular collapse just at the moment when the public spotlight was full on it, the
p.194
914
Edse.
Intricate relays declined to work, springs broke, power supplies failed, inexperienced users dropped staples and paper clips into it and fouled the works (necessitating the installation in every machine of a staple-catcher), and he expected difficulties in humid climates developed, along with unanticipated ones at high altitudes.
p.194
914
Or if the machines did do something, it was something wrong.
; he did so, and not only was no copy made but a giant generator serving the line was blown out. Thus was xerography introduced in Great Britain later become far and away the biggest overseas user of the 914 appears to be a tribute to both Xerox resilience and British patience.
p.194
Webster, a farm town near the edge of Lake Ontario, a few miles from Rochester,
where all Xerox copiers are assembled (except those made by the company's affiliates in Britain and Japan),
p.194
Amalgamated Clothing Workers of America,
Rochester used to be a center of the clothing business and the Clothing Workers has long been the strongest union in the area.
p.195, p.196
Eastman Kodak
Bausch & Lomb,
Xerox
They want to make Rochester a place that will be attractive to the people they want here.
p.197
But then he added, “The danger in ingenious hardware is that it distracts attention from education. What good is a wonderful machine if you don't know what to put on it?”
pp.197-198
McColough said that since he came to Haloid, in 1954, he felt that he'd been aprt of three entirely different companies ── until 1959 a small one engaged in a dangerous and exciting gamble; from 1959 to 1964 a growing one enjoying the fruits of victory; and now a huge one branching out in new directions.
5. xerox xerox xerox xerox 166
Business Adventures
twelves classic tales from the world of wall street
John Brooks
copyright © 1959, 1960, 1961, 1962, 1963, 1964, 1965, 1966, 1967, 1968, 1969
All the material in this books has appeared in the New Yorker in slightly different form.
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