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John Henry Patterson (December_13, 1844—May_7, 1922) was an industrialist and founder of the National Cash Register Company. He was a business innovator, sales genius, social progressive, patriot, and benevolent tyrant.

Family and Early Years

John Patterson was born on the family homestead south of Dayton, Ohio to Colonel Jefferson Patterson (May 1801—23 Mar 1863] and Julia (Johnston) Patterson (1812—29 May 1897). His paternal grandfather was Colonel Robert Patterson (1753–5 Aug 1827), of Scotch-Irish descent, a veteran of the Revolutionary War, the founder of Lexington, Kentucky and one of the founders of Cincinnati, Ohio. Colonel Robert Patterson was born in Pennsylvania and married Elizabeth Lindsay (1760–22 Oct 1833) of eastern Pennsylvania.

After graduation from Central High School in 1862, John entered Miami University where he remained two years. With three of his brothers in the Civil War and his father serving in the Ohio legislature, he interrupted his studies to help his mother on the family farm. John became a "Hundred Days" Man by enlisting in the 131st Ohio Volunteer Infantry until August 25, 1864 when he was honorably discharged and returned to Miami University.

In the fall of 1865 he entered Dartmouth College and was graduated with an A. B. degree in 1867. He always felt keenly that his college education did not prepare him for a business career.

In 1888, he married Katherine Dudley Beck (1860–11 June, 1894) of Brookline, Massachusetts. The couple had two children, Frederick Beck Patterson (June 22 1892–?) and Dorothy Forster Patterson (October 27, 1893–?) before Katherine's untimely death.

Business Kindergarten

Returning to Dayton after Dartmouth in 1867, he was unsuccessful in obtaining a position in the city so returned to the family farm. He decided he was wasting his time at work which could be hired at seventy-five cents a day and obtained a job as toll collector on the Miami and Erie Canal.

He soon put out a "Coal and Wood" sign to augment his income and took orders from passing boatmen, to whom he was on call day and night as toll collector. There was a coal business nearby that Patterson bought, selling quality coal and giving receipts. In 1876, he resigned from collecting tolls and devoted himself entirely to the coal business, which by then included a coal mine and narrow gauge railroad. He sold his coal interests to New York and Boston investors for bonds and stock in the new company.

He and his brother Frank J. Patterson operated a general store that did a good business, yet made no money. John heard about a cash register being made in Dayton and telegraphed an order for two machines for the store. The store soon began to show a profit. Two more registers were acquired for another store and one of these revealed a leak (employee embezzlement) which had been costing them $600 per year for two years. Their experience with the cash registers game them confidence in the machines.

The National Cash Register Company

The machines were made by the National Manufacturing Company. In 1883, John H., Frank J., and their brother Stephen J. Patterson bought a minority share of the company but soon discovered the company was actually operating at a loss. Unable to dispose of their shares, for good or bad, they were in the cash register business. In 1884, John Patterson sold his other businesses and bought a controlling position in the National Manufacturing Company and changed the name to The National Cash Register Company. From thirteen employees and space in the Callahan Power Building, the business prospered and grew under his direction.

In 1888, Patterson decided to build a factory and chose his family farm as the location.

In 1894, $50,000 worth of registers was returned as defective, which endangered the health of the company. Patterson knew the design of the machine was sound and that something must be wrong in the factory. He moved his desk from the executive offices into the heart of the factory and began what would later be called root cause analysis. He found many things wrong, and to remedy them, he began what is now known all over the world as industrial welfare work. He determined that workmen were trying to make the new model with the same tools they had used to make earlier models. The factory itself was unsanitary. The grounds were littered with scrap and material.

Industrial welfare

He began with the improvement of working conditions. Better sanitary accomodations were furnished. He constructed the first "daylight factory" buildings with floor-to-ceiling glass windows that let in light and could be opened to let in fresh air as well. This was in an era when "sweatshops" were still in operation elsewhere. The next spring, he hired John Charles Olmstead to landscape the grounds of the company campus in with spacious lawns and landscaping with colorful plantings.

The immediate result was better work on the part of employees. This proved to Patterson he was on the right course. One day he saw some of the women employees warming a pail of coffee on a steam radiator. This started him thinking of the benefit of a hot noon meal for factory workers. At first, only the women were given a hot lunch at cost, but eventually the practice was expanded to all employees.

The lunch was part of health promotion. Patterson was something of a health fanatic, and adopted one regimen after another, most of which were required of his executives and employees. Rest periods for the women twice daily were introduced and the benefit of outdoor exercise was taught in every possible way. For these practices, Patterson was criticized and ridiculed. But he persisted and the efforts continued to pay off in productivity and quality.

Having improved conditions at the factory, he began to help the neighborhood. One problem was what to do with the boys who broke the windows in the factory and destroyed the shrubbery and flowers. The boys were invited to a meeting and given an opportunity to learn clay modeling, wood carving and drawing. Then the neighborhood girls were offered classes in sewing, embroidery and cooking.

Recalling the valuable lessons he learned on the farm, Patterson had a piece of ground cleared near the factory, purchased necessary tools, and gave each boy a garden to take care of. Seeds and a competent instructor were provided and the produce raised belonged to the boys. This was the beginning of the children's garden movement in America. Afterward, in Dayton, nearly all the schools included a course in gardening.

Olmstead also had a hand in designing the residential community surrounding the plant (South Park) as well as a park system for the City of Dayton. Prizes were offered to the residents of the neighborhood for the best kept lawns, back yards and gardens. A campaign of improvements transformed Slidertown into South Park, one of the most desirable residential areas of the city.

Learning to Sell and Scientific Selling

Based on a 16-page handbook written by his brother-in-law, Patterson established the world's first sales training school on the grounds of the NCR factory campus (at Sugar Camp).

Men and Management

He was famous for hiring and firing Thomas Watson Sr, who went on to found IBM. In fact, "John H." was famous for firing many people on rather trivial grounds, for example, if they couldn't tell him why the flags happened to be flying that day.

Watson's stint at NCR shaped him and helped him build the power of IBM. Both Patterson and Watson were sentenced to one year imprisonment for unfair business practices, later overturned by appeal. Meanwhile, both Patterson and Watson had been pardoned by President Woodrow Wilson as a result of their leadership roles in dealing with the Dayton 1913 flood.

Patterson's methods influenced United States business for a generation. In the period 1910-1930 it was estimated that one-sixth of United States business executives were former NCR executives.

Legacy

When he died in 1922, unlike many of his contemporaries, he left no great fortune because of his expeditures on social programs at the Cash, and because he believed that "shrouds have no pockets."

John Henry Patterson is interred in the Woodland Cemetery, Dayton, Ohio.

"The Cash" after "The Chief"

He left ownership of the company to his son Frederick Beck Patterson who took it public in 1925. $55 million in stock was offered to the public in what was the largest business public offering up to that time.

Sources

• "Cash Register Men Sentenced to Jail," New York Times, February 18, 1913, page 6.
• "John H. Patterson Dies Aboard Train," New York Times, May 8, 1922, page 16.
• "Patterson Left $6,800,000," New York Times, May 16, 1922, page 39.
• Anonymous. In Memory of John Henry Patterson, 1844-1922.
• Crowther, Samuel. John H. Patterson, Pioneer in Industrial Welfare. New York: Doubleday, Page & Company, 1923, 364pp.
• Anonymous. Program, Dedication of Patterson Memorial, May 26, 1928.
• Johnson, Roy W. and Lynch, Russell W. The Sales Strategy of John H. Patterson. Chicago and New York: The Dartnell Corporation, 1932, 344pp.

External Links

• John H. Patterson
• Patterson homestead
• Patterson Family Papers
• John H. Patterson Memorial
• Patterson Sales Strategy

Patterson, John H. Patterson, John H. Patterson, John H. Patterson, John H. Patterson, John H. Patterson, John H.