John Henry Patterson 1844-1922

The Biography of the Founder of NCR

Part 1. 1844-1884

John H. Patterson's Grandfather's Log Cabin

The home to which Colonel Patterson brought his family in 1804 was a substantial log house which stood just west of the junction of Main Street and Spring House Road

The Patterson Homestead on Rubicon Farm

Central High School in Dayton

Miami University, Oxford, Ohio

Dartmouth College, Exeter, N.H.

The Dartmouth Graduation Class of 1867.

John H. Patterson is on the middle row, second right.

The Toll Collector's Office located at the Third Street canal bridge.

J.H.Patterson's Receipt of 1881

A Patterson & Co Receipt of 1883.

The Patterson General Store at Coalton, Ohio.

This photograph was taken in Montana during the six month trip to find a ranch.

John H Patterson is on the right and his brother Frank on the left

As is the case with most successful men John H. Patterson was always athirst for information. An inveterate cross-examiner, he invariably pumped people dry. He learned from everybody he questioned whether bootblack or banker.

While sitting in the lobby of The Antlers one evening he engaged in conversation with a New England merchant. When he discovered that the man expected to remain on holiday for two months he asked:

"How can you afford to leave your business so long?"

"That is not difficult," replied the man. "I have a capable manager and I own a cash register made in Dayton. Every day my manager sends me a statement together with the punched roll from the machine. I can keep a perfect check on my business." John H. was deeply impressed. The merchant's experience was identical with his own in the retail coal business and the general store at Coalton. He said to Frank:

"What was good for our stores and for this man's business in New England is good for every store in the world. The cash register business can be developed into one of the great industries of America."

With this pregnant observation the cattle ranch idea, happily for American business, went glimmering. On the following day the brothers started back to Dayton, determined to purchase control of The National Manufacturing Company.

John H. Patterson was the type of man around whom legends cluster. It follows that there is one concerning his purchase of the cash register business. Variations on the original tale exist. The facts, sifted out from the romance which envelops the story, are these:

John H. Patterson sprang from sturdy Revolutionary stock. His grandfather, Colonel Robert Patterson, who fought under George Washington, founded Lexington, Kentucky, and was also one of the founders of Cincinnati. In 1788, Robert Patterson, then a lieutenant in the service of the United States government, was ordered to strengthen the frontier of the colonies along the Kentucky River. He, with twenty-five other men, of whom he was the leader, erected the first blockhouse at Lexington. He ultimately settled on what came to be known as Rubicon Farm just south of Dayton. He acquired a large tract of land and erected a log cabin as his home. In March, 1780, he was married to Elizabeth Lindsay, of eastern Pennsylvania. Immediately after the wedding the bride and groom, accompanied by some kinsmen, started on the long journey for their frontier home. In 1799, Colonel Patterson set out to visit two of his brothers who had recently settled
near Dayton, Ohio, and while here he was urged to join them in the Miami Valley. He was very much pleased with the climate and fertile soil of Ohio. A few years later he bought a large tract of land south of Dayton.
There were ten children, of whom Jefferson Patterson, the father of John H. Patterson, was the youngest. Jefferson was born in 1801, and lived the life of a typical frontier boy. He helped his father and brothers till the soil and operate the mills on the farm. In February, 1833, he was united in marriage to Julia Johnston, at the bride's home in Piqua, Ohio. Julia Johnston Patterson was the daughter of Colonel John Johnston, Indian agent of the United States government. The Indians respected him, knowing that he always was watchful of their interests. He was absolutely fair and just in his transactions and insisted on white men and Indians always dealing justly with each other. The result was a fairly peaceful settlement of the district over which he presided for many years. On December 13, 1844, John H. Patterson was born at the Patterson homestead on Rubicon Farm. Here John spent his boy-hood serving a hardy apprenticeship in work. With the other children, he helped his father and mother carry out the many duties necessary to the successful conduct of the home. Each child had a definite task assigned and it had to be done. Mr. Patterson's mother, in telling of the duties of her son John on the farm, said:
"He used to be called at four o'clock in the spring, summer, and fall. He had to make his grandfather's fire, carry up enough wood to last Colonel Robert Patterson all day, split kindling and get it ready for the night. After breakfast he would turn the calves out, put up his dinner, and go to school. In the evening he drove up the calves, fed and bedded them, carried up wood to fill the boxes, and after supper studied lessons."
As he grew older he took on more duties of the farm. He worked with the men in the fields, ploughing, planting, and harvesting the crops. This experience, he often said, helped him to make the N. C. R. the greatest industry of its kind in the world.
In speaking of his mother, he often said:
"My mother gave me me inspiration to work hard, be successful, and make it possible to see the many things I have seen in all parts of the world."
John H. Patterson spent his youth on the family farm just south of Dayton, Ohio (population 10,000) selling his father's farm products. Sometimes the charges were unrecorded and Patterson later recalled, "I was often awakened at night by my father asking me if I had charged a certain person with the things he had taken home". Or,"I would be eating my dinner and some person would say 'Did you charge that sugar to Sonders?' I had to say, 'No, I did not'".

After graduating from Central High School in Dayton in 1862. That fall he entered Miami
University at Oxford, where he remained two years. Three of his brothers being in the Civil War service and his father in the Ohio legislature, it was necessary for him to interrupt his studies at the university to help his mother on the farm. President Lincoln issued a call for volunteers to serve in the Union army for one hundred days, and John H. Patterson answered the call of his country, enlisting in the 131st 0. V. I. He served with his company until at the end of his enlistment. When he was honorably discharged on August 25, 1864, he returned to Miami University.

In the fall of 1865, he entered Dartmouth College, and in 1867 was graduated with the A. B. degree. During his college vacation he helped to pay his expenses by teaching school.
Returning to Dayton after his graduation he sought a position in the city. He was not successful. So it was necessary for him to go back to the farm. He always felt keenly that his college education did not fit him for a business career. After working on the farm two years he decided that he was wasting his time at work which could be hired done for seventy-five cents a day. He then went into town to look for a position, After a brief experience as school teacher he secured the job of toll collector on the Miami and Erie canal.
His salary was $800 a year but he had to spend $300 for office rent and incidentals. He was on duty twenty-four hours a day because boats came through at all times. Mr. Patterson had a small room overlooking the canal. He slept in this room and occupied it all the time, including Sundays and holidays, except when the canal was frozen over. Passing boatmen would get him out at all hours of the night. After a few months he realized that his net yearly income of $500 was inadequate so he decided to go into the coal business on the side. He hung up a sign proclaiming "Coal and Wood" outside his office. When he received an order he bought coal from a
dealer and hired some one to deliver it This left him a very small profit. His day book was a slate. When an account was settled he wiped it off. In this crude way the future magnate of the cash register began his commercial career.

Patterson had big ideas even when he had a little business. He heard that a coal dealer located nearby wanted to sell out. He borrowed $250 from Gebhart, Harman & Co. a local bank and bought the business. The assets were a tumble-down coal yard, a pair of scales, two carts, some coal, lime, cement and wood, and two blind horses. John took his brother Stephen into partner-ship and opened up shop as H. J. Patterson & Co. After he started in
the business, he found the best coal to be had, and secured the exclusive agency for it. He built up the business on selling quality coal and giving receipts.
He took his brother, Stephen J. Patterson, into partnership. They employed a clerk, and soon developed a good business. In 1876, Mr. Patterson resigned from the position as toll collector and devoted his entire time to the coal business. From the start John H. was meticulous in his dealings with customers. He needed no Marguery of Paris to tell him that "the customer is always right." He sold the best coal, used spirited horses to draw his brightly painted carts, and advertised liberally. In that early day he revealed the basis of the sound business procedure upon which a world-wide enterprise was later to be reared.
One detail will illustrate.
Some of Patterson's customers disputed the quantity of coal for which they were charged and the amounts they were required to pay. Since every complaint was a personal matter Patterson devised a system of receipt tickets for both coal and cash. It was John H. Patterson who, in later years, first put the receipt on a cash register
Patterson's determination to create good will as well as good business led him into unconventional procedure. He had obtained the agency for Jackson County coal. It was good coal but sometimes it had to be coaxed before it caught fire. It followed that on occasion Patterson had complaints about it
At the root of his business creed was education which always meant training. He later applied it to every detail of his cash register production and selling. In that early day he demonstrated it with his customers. Although co-head of the coal firm he visited customers' homes, went into kitchens
and showed cooks and housewives how to get the fire started. There were no caste lines in his teaching code. He went from the residences of the socially elect to tenements. Often he would turn up in a kitchen almost before the household was astir. The business increased and they later had two offices in the city. John H. Patterson’s scrupulous attention to details and his liberal expenditures for advertising irked Stephen who, being older, believed in more conservative methods. In consequence, the partner-ship was dissolved in 1879, Stephen buying out
John's interest. With his youngest brother Frank J., John now organized the new coal firm of Patterson & Company. The first period of expansion in John's business life began. Although handicapped by lack of capital John began to widen the firm's activities. The coal they sold came from the Coalton and Weliston fields by a roundabout way which increased the freight over-head. John H. started a movement which led to the building of a direct line-the Dayton & South eastern-from the mines to Dayton. The Patterson brothers now decided to mine their own coal so they leased mines at Coalton and Wellston. John H. borrowed $15,000 and had 52 coal cars built for the firm's use. They bore the inscription "Patterson & Co." in large vivid letters. John H. always
believed in business publicity. The firm flourished. By this time John H. and Frank were operating three coal mines, a chain of retail yards, and a general store at Coalton, Ohio. This same year the narrow gauge railway from Jackson County to Dayton was completed, and the brothers secured the agency for Jackson County coal. While operating the store at Coalton John H. Patterson had his first actual contact with the cash register. He had practically no competition, no bad debts, paid cash for all he bought, and did a big business, that is big, for the locality. At the end of two years he had lost $3,000. He suffered from the same malady that
had played havoc with James Ritty's profits. His clerks, with an open cash drawer constantly conjuring up temptation, purloined part of the daily receipts. One day he heard of a Dayton-made machine that registered sales. Without inquiring the price he telegraphed for three of them. They were the original paper roll machines. Within six months the store showed a profit of several thousand dollars.
The cash registers had turned the trick for there was no more pilfering. Patterson was so impressed with the results that he ordered two registers for his retail coal business in Dayton, and one of these made it possible for the brothers to discover a leak which had been costing them $600 a year for two years. In 1881 John H. Patterson embarked for the first and only time in his life in a business that he did not control. A group of Boston capitalists tied up a network of narrow gauge railroads in Ohio and Indiana, including the Dayton and South Eastern, into a single system. Then they decided to go into the coal business. John H. and Frank Patterson had become known as the most alert
and progressive operators in the Jackson County field. The eastern financiers engaged them to acquire coal mines which were sold to a corporation, The Southern Ohio Coal and Iron Company, which they formed to operate the properties. The Pattersons took over the management of the mines and the sale of the product receiving an allocation of stock and bonds for their services.

By 1882 Patterson & Co. had six offices; Office A, at Third Street opposite the Park; Office B,near T. D. & D.& B. ( Toledo,Delphos, Dayton & Burlington) Railroad Depot; Office C, Third Street, near Railroad Crossing; Office D, Wayne Street opposite market House; Office E, at Southern Ohio Coal & Iron Co's Transfer; Office F, at Fifth Street Railroad Crossing.
They continued their retail coal business in Dayton, after selling their own mines and leasing their equipment to the corporation. John H. Patterson was made the manager of the Southern Ohio Coal and Iron Company. The association with the Southern Ohio Coal and Iron Company was not altogether happy. John H. Patterson was a minority stockholder. Being wilful and impatient, he chafed under the restraint that this imposed. He was born to control and he had no control over the properties he managed. Frank, who was much less temperamental, took things in his stride. John H's dissatisfaction with the situation led to two events. One was the retirement of the brothers from association with The Southern Ohio Coal and Iron Company. The other was the sale of their coal business in Dayton. For the first time since he established himself in the little toll-keeper's office on the Miami and Erie Canal John was free to do as he pleased.

A year prior to their retirement from all branches of the coal business John H. and Frank had made their initial investment in The National Manufacturing Company which in 1883,decided to increase the capital stock from $12,000 to $l5,000 and John H. Patterson, Frank J. Patterson, and Stephen J. Patterson bought all of the new stock issued.with the purchase of 50 shares.
John H. was the instigator because he had a strong conviction, based on his experience with cash registers both at Coalton and Dayton, that the machine had a future. The cash register business, however, was not getting anywhere. The annual statement of the company, issued early in 1884, showed a loss. This discouraged Frank to such an extent that he disposed of all of his shares. John H. could only get rid of five. This explains how it happened that he appeared on the books of the company as owner of 20 shares at the annual meeting held in January 1884. His retirement as a director followed.

It was impossible for a man of John H. Patterson's temperament to remain idle. As he cast about for an activity to engage his energy his thoughts reverted to those rigorous boyhood days on the Rubicon Farm. He was torn between farming and manufacturing. For the moment some occupation on the land seemed to win out In his impulsive way he said to Frank:  "We should get into a business with limitless possibilities. Nearly everybody eats meat. Let us buy a ranch and raise cattle." When Patterson spoke of "limitless possibilities" he revealed the extent of the vision that was to lead him to the industrial heights. Always impatient of petty details, he saw life and work in a large way. Frank was agreeable to the cattle-raising suggestion. In May 1884 the brothers set forth for the West which still beckoned to the seeker of business and other adventure. For four months they ranged through half a dozen States from Missouri to California. Late in September they paused at the Antlers Hotel in Colorado Springs to take stock of travels, and to decide which one of three ranches, on which they had options, to buy.
On the evening of the day the Pattersons arrived in Dayton-it was now late in October-they had a long talk with George L. Phillips, President of The National Manufacturing Company, who owned the controlling interest. Phillips was a well-known Dayton capitalist who organized the first telephone exchange in the city. John H. agreed to buy the Phillips stock for $6500. After the deal had been closed, save for the actual payment, the brothers went over to the Dayton Club where they spoke enthusiastically about the transaction. What they did not know was that The National Manufacturing Company had become something of a jest in town. It had lost money steadily and was looked upon as a failure. It followed that when the Pattersons spoke so glowingly about their purchase of control they were met with jokes and even jeers. The banter at the club depressed and discouraged John H. He went home that night determined to cancel the deal with Phillips the first thing next morning. Just why he got cold feet on the product to which he subsequently dedicated himself is inexplicable. John H. Patterson, however, was a capricious person. It was difficult at times to understand what motivated certain of his actions. When Patterson sought to retire from the deal he was thwarted. Phillips insisted that the strict letter of the arrangement be carried out. Patterson then offered him $2,000 for a release from his obligation. Phillips remained adamant. To Patterson he is reported to have said
"You have purchased the stock. If you had paid for it and I had turned it over to you, I. would not have it hack as a gift."
"Very well," replied Patterson. "I am going into the cash register business and I will make a success of it. You will be sorry later on."
Every outstanding industry sets up mile-posts of its progress. So it was with cash register production which flow entered upon the first phase of what became a momentous advance. The time had arrived when the chief protagonist in the drama of its development stepped on the scene. That protagonist was John H. Patterson.

Soon after he acquired control Patterson changed the corporate name of the company back to that of The National Cash Register Company. The hesitancy in the deal with Phillips was obviously a passing phase with Patterson. Once committed to the cash register it became the passion of his life, charged with the fire and fervour of a crusade.

Like many other Americans who rose to distinction.he obtained his early education in a little red schoolhouse.
The one that John attended stood at the corner of Far Hills Avenue and Brown Street. The photograph on the left was taken,age 12, when he was attending this school.