America 1919

The work of the tabulating machine revolved around punched cards: the operator first used a punch to create the punched cards, then a card reader to identify the information on the cards—mechanically carrying out data tallying and displaying the results in real-time on a counter dial. Lastly, cards were deposited into a particular compartment of a sorting box, categorized, and stored for future use in data tabulation. Once the invention was realized, and it proved capable of bringing in dollar bills, Herman Hollerith quickly established his own tabulating machine company. By 1911, the Tabulating Machine Company had merged with three other companies to form the CTR Company. Now, tabulating machines were like future computers; many large companies purchased them for business data-statistics. Starry Entertainment and Surf Hotel, owned by Donnie, were no exception, and Donnie was also an important customer of CTR—without it, there was no way to compile so much ancillary data in a short time! Thomas Watson said with a smile, "Mr. Block, you misunderstand me. I am not here to sell our company's products. I have come to discuss a matter with you!" Donnie looked around and replied, "If you don't mind, Mr. Watson, we can go back to the Surf Hotel and talk there!" Thomas Watson laughed, "If that's the case, then that would be perfect!" Without further conversation, the two made their way back to the Surf Hotel. Donnie poured himself a whiskey, glanced at Thomas Watson who politely declined with a gesture, and Donnie then returned to his seat without further ado. "Alright, Mr. Watson, there's no one else here. You can speak freely about the matter at hand," Donnie said. Thomas Watson surprisingly opened with, "I came to borrow a sum of money from you, Mr. Block. If possible, I would like two million US dollars." Donnie was about to scoff at the customer who dared to ask so boldly, but considering the man was Thomas Watson and a future helmsman of the giant-to-be, he treated him with respect and did not laugh. Instead, he asked, "Mr. Watson, as you know, two million US dollars is not a small sum, and there isn't any particular relationship between you and me. What makes you think I would lend you two million dollars?" Thomas Watson's expression did not change as he calmly said, "Although we have not met before, Mr. Block, I know you're a very smart man. Smart businessmen tend to make decisions decisively. The two million dollars I'm asking to borrow isn't for personal use but to allow Mr. Block to buy shares of CTR on the stock market, becoming a shareholder of IBM!" CTR Company went public in 1914 with a market value of 3.5 million US dollars. Over the years, its market value had reached 12 million US dollars—a figure trivial to the future behemoth CTR! Indeed, if Donnie bought two million dollars' worth of IBM stocks, he could become one of CTR's shareholders and be eligible for a seat on the board of directors. However, Donnie knew that in this affair, Thomas Watson had overlooked something: if he made a large-scale entry into the stock market to purchase CTR shares, it would undoubtedly drive up the price of CTR stocks. By then, making it onto the board of directors with two million dollars would be impossible! "The development prospects of CTR are very well-regarded by Wall Street, and CTR's own growth is robust. I believe, Mr. Block, that your investment is sure to yield a substantial return!" Thomas Watson continued trying to convince Donnie. Donnie gestured with his hand to calm things down, then inquired, "Mr. Watson, let's set aside the stock price of CTR for a moment. There's something I really don't understand. As the general manager of CTR with company shares in hand, why would you want me to acquire shares of CTR? Plus, we didn't even know each other before this!" Thomas Watson wanted to let himself acquire shares of CTR, which for Donnie, was absolutely a pie falling from the sky. But the bigger the pie falling from the sky, the more cautious one should be, for a pie falling from above could also kill a person! After pondering for a moment, Thomas Watson said, "Not to hide from you, Mr. Block, before coming to you, I had researched many people, many institutions, but in the end, I chose you, Mr. Block, among these people, these institutions. The reason that drove me to make this decision was actually because of Mr. Block's partnership model with the Coca-Cola Company." Donnie just thought briefly and, combining the current situation of the CTR company, he guessed why Thomas Watson did this. The CTR company was formed by four companies and certainly had a very complex shareholding structure internally. Now, Flint, the helmsman of the CTR company, was already old, and Wall Street was already speculating about CTR's succession, Thomas Watson was indeed the hottest candidate but not the only one. Moreover, having experienced the internal power struggles at the National Cash Register Company and being dismissed, Thomas Watson was actually more sensitive to such situations. This man certainly did not want to experience such a situation again! So, in order to ensure that he could take the position of CTR president without fail, Thomas Watson needed more support. Now he had placed this support upon himself. Because before this, the fact that Donnie had become the largest shareholder of the Coca-Cola Company yet continued to hand over the management of the company to the Woodruff family had been disclosed by Wall Street, which, to a certain extent, demonstrated his respect for the company management. Besides, there are probably two other reasons. The first is that his company bought tabulating machines from CTR, but it does not have any direct relation with this industry or this company, just as with the Coca-Cola Company. Being a shareholder of CTR who supports Thomas Watson was the most in line with Thomas Watson's interests. The second reason was his cash at hand. Now many people know that he has a substantial amount of cash at hand, in fact, the ones who have come to Donnie for a loan were not the first, it's just that Donnie had rejected all those others. With no relation, why would I lend money to you! "Mr. Watson, you've given me a tough decision, I have never thought about becoming a shareholder of CTR, and to be frank, the market value of your company, in my view, is just so-so!" Although Donnie had already made a decision in his mind, he did not reveal his true thoughts! CTR at that time was not the later IBM, and naturally, Thomas Watson did not know what kind of monster IBM would grow into! So, at this moment, facing the possibility of being rejected by Donnie, he finally showed a hint of anxiety, "Mr. Block, I know that CTR is not strong enough now, but please believe me, I can definitely develop CTR into something much greater!" Donnie waved his hand and said, "Let's do this, I will think about this matter, and as for what to decide, I will give you an answer in one day!"