banks moved into processing their deposit account work with computers, the
majority went with using the MICR (Magnetic Ink Character Recognition)
printing that we began printing on the bottom of the checks and deposits.
For the first time customers were required to buy personalized checks with
their names and their account numbers imprinted on their checks and
There were a lot of problems with pre-encoded items. For the
customer service people in the banks there was the job of selling checks.
Customers were accustomed to just asking for a pad of checks and that is
what they got. Suddenly the bank was requiring customers to actually buy
checks and regardless of how neat we tried to make it sound that the
checks were personalized and errors were reduced, the idea of purchasing
something that had always been free was traumatic for the majority of
There was also the change to something with which people were not
accustomed. Customers went to the bank, took a deposit slip from the
counter, completed it and made their deposit. A few smart guys went into
some banks and put some of their personalized deposit tickets into the
racks on the tables. Customers would unknowingly take one of the
preprinted deposit slips, complete it and put their funds in someone
Word got out that a tiny pin hole through a MICR number on the
check could delay posting for several day while the bank dealt with the
check as an exception item. Frequently, it was not necessary for the
customer to make the pinhole because MICR printing was so haphazard in the
early stages that the result of the printing was not dependable.
In the beginning, the overall rate of MICR rejection was well over
40%. It just did not go smoothly for a significant period of time.
Valley National Bank of Arizona and City National Bank of New York
chose a different approach to entering the electronic data processing of
demand deposits and savings deposits. The high rate of MICR failure was
causing untold customer relations problems
for banks. These two banks were known for their superior customer care and
wanted to avoid the hassle other banks were experiencing. The solution was
expensive but the banks felt justified in bearing the expense to preserve
Each bank purchased specialized equipment from a Belgium company to
use for processing checks and deposits without using the magnetic ink
printed directly on checks. The system required only that the customer
write his account number on the check or deposit slip. Valley National
Bank was able to encourage the practice by providing each customer with a
medallion in the form of the bank’s logo, which was a spread eagle on an
octagonal background. The wings spanned beyond the background. On the
medallion, the customer’s account number was imprinted. Customers were
proud of those medallions and they became very conscientious about using
the number of their items.
All banks process their work through some kind of proof machine to
make sure the debits equal the credits. A deposit ticket has to be
supported by checks and cash in tickets equivalent to the amount being
deposited. The process using the Belgian equipment began with such a
process. When the items were entered into the proof machine function, each
items was mechanically inserted into a plastic jacket. Across the face of
the jacket was a magnetic tape strip, just like that to which a tape
recorder can read and write. The accumulated jackets could be sorted
magnetically in a similar manner as Hollerith cards had been sorted by
mechanical data processing equipment.
The internal items were sorted and separated from the external
items, such as checks drawn on other banks, and captured for input into
the computer system. After capture, the jackets were removed to other
equipment called Unjacketers, where all the items were removed. The
internal items were sent to the branches to be filed and the external
items were sent with cash letters to correspondent banks or the Federal
Reserve Bank for credit.
General Electric built a building on the southwest corner of
Thunderbird Road and I-17, where they started building computers. Valley
National Bank always tried to do business at home so when it came time to
get into electronic data processing, GE got the business. The first
computer was designated the 210.
I never programmed the 210 or it’s successor, the 415 but
eventually learned a little about them. I believe they had their own
programming language which was some form of assembly language. The word
“byte” had not yet come into existence. General Electric computers
were “word” machines.
A word consisted of four characters. Efficient programmers strived
to work in units of four to preserve precious memory. Commands such as
“save” and “copy” could be very efficient. If you had to resort to
a field like zip code, you lost the use of three quarters of a word. For
example, 85303 use up two words with four characters (8530) in the first
word, one (3) in the second word and the remaining characters of the
second word lost. If it was possible to combine the state code with the
zip code, efficiency could be
restored. For example again, AZ 85303 would use two words if combined.
“AZ_8” would use the first word and “5303” would use the second
I ran into a friend named Ed one day. Ed had been working on a
special project of some kind for a few months. The year was 1966.
had been a branch operations officer.
When I met him in the hall, he told me he was going to become a
computer programmer. That intrigued me because I had wanted to be a
computer programmer. I
started to take a class in programming at Arizona State University but it
started out with wiring circuit boards, a dying practice, and I decided I
could better utilize my time with something else. Ed said management had
decided to choose three operations officers and train them to be computer
programmers. The idea was that it was easier to teach bankers to be
programmers, than it was to
teach programmers to be bankers. He
said another operations office, Tom, had been selected to take part in the
program also but as far as he knew a third man had not been selected.
Off I went to the Personnel Department.
found the usual guy I hassled about such things and told him I had talked
to Ed and wanted to be the guy number three.
He showed his usual excitement and said they wanted operations
officers. I said try it. He called them. They said that if I could pass
the test they would consider me.
went to the Customer Service Department where the newly trained
programmers would work and they gave me the test. The test was a breeze.
It was the kind of test where you had to reason out sequences. It was
logic. When I was in the seventh and eighth grades we had to take the same
kind of tests, among others. We were going from a school with 150 students
to a school with 5,300 students. It was like going to a university and we
were told that, at this early point in our lives, we had to decide what
our life’s work would be. Sounded okay to us, but what did we know.
they gave us a battery of tests. My results were mixed. I was told I had
all the logic required to be an engineer but all the math skills required
to be a professional chimpanzee.
I was a lot better at math at this time, thanks to Albert Qually, a math
professor at Arizona State. That,
along with the long time logic ability I possessed, I passed the test with
flying colors and was soon informed that I had been selected to
participate in this experiment.
IBM System/360 Model 30, had been ordered for my new department and was in
the process of being installed. It was called a third generation computer
and was designed by a second generation computer and beyond the
understanding of mere mortals. At
least that is what they claimed. Ed
got delayed in starting but Tom and I went to IBM’s school. It wasn’t
long before we were more than willing to accept the premise that this
computer was beyond the understanding of mere mortals, and bankers as
woman from Los Angeles came to Phoenix to hold classes for us. She tried,
and not only did Tom and I have a hard time, but those who had past
experience, had a hard time understanding.
We were in class for six weeks.
The first two weeks “taught” us basic computing for the 360.
The next two weeks “taught” us assembly language programming.
The final two weeks “taught” us I/O – Input/ Output.
We didn’t feel like we had been taught anything, and if we were,
we didn’t learn anything. Our
instructor was obviously frustrated. We agreed that the situation was
had been hinting to management that things weren’t going well but they
kept saying, “Don’t worry about it”.
I did worry about it.
went in the Monday following the completion of our training and I had a
bad case of the dreads. We
were convinced we just weren’t going to be able to handle this work.
A COBOL SHOP
There is a computer programming language called COBOL, which is an
abbreviation for COmmon Business Oriented Language.
Assembly Language, which we had been “exposed to” at school is more
than difficult and just one level above “machine language” which is
written by no one, except possibly second generation computers. At the
time I became a programmer, some work had to be written in Assembly
Language and we had a couple of experts that took care of that kind of
work. We were told that our
department was a “COBOL shop”. We
were also told the department had Programmed Instruction manuals for us to
use to learn IBM COBOL and the department also had some very experienced
COBOL programmers that could help us.
THE COMPUTER –
Before we get into that, I need to describe our new computer.
It had huge metal boxes stuffed with electronics and that could
fill a couple of good sized rooms. We
had one printer, very high speed. We
had five tape drives, four 7 track and one 9 track, virtually obsolete
now, and slow. We had two
disk drives, a new creation. It
was essentially what we all have for hard drives in our computers now,
only much larger and with much less
capacity. This very modern computer operated on a memory called
“core” which was a network of tiny wires that crossed one another and
had a little ring circling each crossing. Each “intersection” was
either on or off, thus the computer operated on the “binary”
principal. All our core printouts were in hexadecimal. A majority of this
technology is completely obsolete now.
We had 13 CRTs, which is another name for the monitor you have on
your computer. CRTs were new
in those days also. CRTs weren’t much use unless you had disk drives
like I have mentioned that were also new.
CRTs were replacements for all those printouts I talked about when I
mentioned the start up of the credit card program. With CRTs and disk
drives, merchants could not call one number and the operator who answered
could access any account and update it in “real time”.
powerful was this computer? Well
the computer I’m working at right now is 4,000 times more powerful than
that computer. Put another
way, that computer was .0000003% as powerful as my computer. The computer
I’m working on now cost me about $850 total, after the infamous mail-in
rebates. That computer leased
for $16,000 per month.
Mr. Watson, long time president of IBM, once said, “There may be
a need in the world for two, maybe three, computers.”
I have four in this house now and one is in the garage, unused.
Just putting things in perspective.
At the time we were installing and using CRTs, Arizona Bank, across
the street, was introducing their customers to audio response. This
technology is now so prevalent that we think nothing of calling the bank
and having a voice read out balance to us. It wasn’t always so. Arizona
Bank’s programmers struggled mightily getting that technology to work in
At this time the 360 was so new and with two banks, across the
street from one another, heavily involved in experimenting with new ideas
and technology, we had no shortage of IBM personnel hanging around,
helping us and learning for themselves. The 360 was so advanced for its
time that there were a great number of mysteries to be explored and
solved. We got a lot of bad information from IBM but we all learned
I thought programmed instruction was pretty neat. The manuals were
like the kind of workbooks we have all used in school.
I used a piece of paper as I worked my way through the book.
It started very basic. There
was a lesson of one short paragraph and the answer to a question at the
end. I used the paper to
cover the answer while I read the material. Then I read the question and
checked to see if I got the right answer. Working independently, Tom and I
worked our way through the first volume of the manual.
I was getting it. Tom
wasn’t. I had spent several
years of analysis type work. Tom
had been an operations officer doing more generalist work.
We were both good in our background but this was completely foreign
COBOL is a little like English.
You identify something as A and something as B and a third thing as
C. Then you can say, “Add A to B, resulting in C”. There was a large
list of “reserved” words. These
words, such as “add”, “to” and “resulting in”, had specific
meanings to the “compiler” program so the words would be converted to
machine language. You had to
be selective how you used the reserved words or your program would not
compile and would not work. Tom somehow got the idea that being reserved
words, they could not be used at all.
At the conclusion of Volume One of the manual, we were told it was
time to get to work. We could do Volume Two on our own, as time permitted, but
there was work to do and we needed to jump in and get our feet wet.
all, we had some excellent tutors available to us. The computer had very
limited ability, although we didn’t know it at the time, so everything
had to be programmed in small segments.
Tom and I were each assigned a segment of whatever it was that
needed to be programmed at the time.
I drew my flowchart, which is what computer programmers did in
those days, and should do now days but don’t, and went over it with my
supervisor. He made some suggestions and I did it again. He liked the
revision. That accomplished,
I started coding. Coding is
the actual step by step work the computer is to do.
Using the flowchart as my guide, I coded the segment.
When I didn’t know how to proceed, I would go to Sue, a splendid
COBOL programmer and teacher. She is the reason I was able to learn to do
the job. When she, my supervisor and I were satisfied with my coding, the
coding sheets were taken to the keypunch department and punched into
were commonly called IBM cards and even my spell checker never heard of
Hollerith. Mr. Hollerith invented them and for size decided to make them
the same size as United States Currency.
If you could find one of those cards today and compare it to the
currency you have in your pocket, you would find the card much larger.
That is because the card was invented so long ago, none of us ever carried
bills that size. At some point they decided to make them smaller.
I guess so they wouldn’t stick out of our wallets.
program segment was punched and run through the compiler and it worked. I received congratulations all around and began to feel maybe
I could handle this job. I
knew I still had a long way to go because I had needed a lot of help.
Tom. On the other hand, Tom needed a lot of help with his flow charts and
eventually came up with something workable.
But then … when he tried to code without using any reserved words
… the old timers couldn’t contain themselves. They would read his
coding aloud and howl. Tom was always a good sport and could laugh at
himself, and he put on a good show. No Brit ever had a better “stiff
upper lip”, but Tom was really made to feel bad. We had become good
friends and I felt badly for him. When
not around him though, even as a novice, I couldn’t help but lose
control of myself when I read his attempt at coding. I don’t remember at
what time he went back to being an operations officer but he didn’t stay
never did become a programmer. They always had something else they needed
for him to do. Also after the
situation with Tom, I understood they decided against continuing with
their initial plan. After
hearing what happened with Tom, I think Ed decided he didn’t really want
to pursue the programming thing either.
I don’t think he would have liked it but I think he could have
liked programming. It was a
contest all the time. The
programmer against the computer. It
was like a wild horse I was trying to tame and I was never sure who was
going to get tamed and who was going to get trampled. I had some good
“cowboys” to help me though.
bank decided to write a universal payroll system that could be used for
the bank’s payroll, and that we could sell as a payroll service to
customers. I was assigned to the project.
We worked together and had planning meetings and tried to design
the payroll system. We had an
accomplished leader and were making progress.
We had a new data processing manager who was a go-getter and we
were really up for the project.
It isn’t easy to design a universal payroll.
We had to take into account that many different companies had many
different kinds of income paid to their officers and employees: hourly,
overtime, double time, sometimes more, bonuses, commissions, etc.
They had many different kinds of deductions besides income taxes
and FICA taxes. There were insurance deductions for life, disability,
health and accident. There were deductions for union dues, profit sharing
plans, pensions, etc.
To make the payroll work for the bank and for all the possible
customers we had to take into consideration every possibility.
We thought we were doing a pretty good job of designing the system,
when the bottom dropped out.
There are always politics involved with everything.
General Electric had a plant in Phoenix that manufactured
computers. Up until we took delivery of the IBM computer all of the banks
internal work was done using GE computers, strictly because they were
locally manufactured. The whole configuration of the GE computer was
different from the IBM computer. It seemed to me that trying to deal with
the GE way of programming would be very frustrating but those who had only
experienced those restrictions didn’t know the difference.
Well, the political powers that were, decided the payroll had to be
done using the GE computers. None of us were GE programmers, although we
had been “threatened” that we would probably have to change, so we had
no way to take the work we had done and convert it to the different way.
The nature of politics is that the GE programmers weren’t going
to even accept our concepts. To add to our morale problem, the decision
wasn’t made overnight. We
were told it might happen early on. At
some point, we were told to stop work on the project.
Now we had six or eight project managers and programmers sitting
idle. Rumors sprang up both ways – we were going ahead, we were losing
the project. Morale got lower and lower.
Finally the decision was made and the project was taken away from
us. A couple of other, smaller projects came along.
We were supposed to be a customer service department so that was
the direction we took. One
project was given to me and it ended up making me a pretty good
programmer. I was able to
learn a great deal in a very short time.
A customer of the bank was selling land.
There eventually was a scam and scandal regarding these land sales
but it had not surfaced at the time.
The customer contacted the bank and was interested in the
possibility that maybe a computer could be used to keep track of the
contracts he carried when he sold the land.
I think he took 10% down and carried the remainder on an
installment basis. Usually our salesmen went out and promised the world
for a very little price, because they had no idea of what it took to
provide the service they agreed to provide.
This time the salesman came to the department for advice.
Management decided I should go with the salesman to the customer.
I went. We talked and
I told him what we could do. He decided to do it. It was supposed to be
When the contract was signed, we were informed.
My manager, Dave, and I sat down and started working out the
details. I flowcharted the
system, in the usual small increments.
I flowcharted each increment so we could see that the increments
would function properly. Dave
and I went over all this work and he approved it, after making corrections
he knew were necessary. Dave
was great to work with. (He also introduced me to the term “gut-bomb”
in describing Jack-In-The-Box hamburgers. There was often a late night
visit there for dinner when we had no other choice.)
I don’t remember what else was going on but I had to do the
project pretty much by myself. The customer was, of course, in a hurry, wanting it done
yesterday. He hadn’t really believed me when I had told him how long it
would take. I hadn’t
understood either and didn’t give us enough time anyway.
I did the job and made a lot of novice mistakes.
Some were unbelievable. Something
else that was unbelievable was Dave’s patience. I finally got all the
segments coded and keypunched. Time
was running out so Dave and I decided to work Saturday compiling and
debugging my little system. The
program took about one and a half boxes of IBM cards. The cards had to be
read into the computer with a card reader and the compiler program run.
The compiler program would provide a list of errors, called syntax errors.
Sometimes I could mess the coding up so badly the compiler
couldn’t even figure out what kind of errors I had made. That’s when
Dave was at his best.
Our office was in the Arizona Title Building Annex. The same
building now houses the City of Phoenix Personnel Department.
The computer was in the basement. We showed up for work on Saturday
and took our “deck” of cards to the basement.
We loaded them on the card reader and pushed all the right buttons.
The reader started to read, got about halfway through the deck, and
stopped. Those computers
generated a lot of heat and had built in sensors that made the peripherals
stop when they got too hot. The card reader had gotten too hot and
stopped. We noticed the room
was getting too warm for us too. Usually the temperature and humidity were
very carefully controlled. Not so that day. There was something wrong with
the building’s cooling system.
We called the building office and got a recording. We were told to
leave a message and that someone would be back to us within the hour. The
machine cooled down in the meantime but it is impossible to tell what was
the last card read and what should be next. We weren’t even sure if we
could pick up where we left off anyway.
So we reloaded the deck and tried again. It stopped again. More
than an hour had passed, so we called again. Same message to us, same
message to them and the same results. We tried all day. We would fan the machine while it tried to
read, thinking maybe we could fool it.
The room got hotter and hotter and our deck stopped sooner and
sooner. Finally we had to give up and just wait until Monday.
On Monday, we finally got the card deck read and got a list of
errors. Dave helped me
correct them and we got a good compilation.
We ran test data to see if the system did what we wanted it to do.
Dave helped me get that right. I felt that I had really messed up but Dave
assured me it wasn’t all that bad. I would like to have done it over but
that was impossible.
When we got it where we wanted it, I went to the client with the
user manual and input forms. Our
data processing manager required us to write a user manual before we
started anything, revising after our flow charts were done, revise it
again after coding was done and then revise a final time after testing was
done. Our user manuals were good. I trained the employees that were to use
the system and we worked out delivery of raw data to us and delivery of
reports to them. All went well for about a month, then the client decided
it wasn’t quite fancy enough and demanded more. It was already a
financial loser but clients with big bank accounts have a way of getting
their way. I’m sure he got
his way, for a time.
The client and others with whom he was associated were soon
indicted for land fraud. They
were using pictures of nice land with forests, and selling worthless land
that was all desert. They were selling land with no hope of water, no
expectation of utilities and totally uninhabitable. Most of the land was
sold sight unseen to ignorant people from the east who had hopes of
retiring in Arizona. Those who did eventually come to see their land
realized they had been sold worthless land.
was one other problem with the deals. They really did sell the land --
over and over again. I don’t know the final outcome.
I was long gone by then.
I was off on another project.
Tellers were not on line with the computers as they are now. The
bank began to work on moving that direction.
On-line involved “telecommunications”. Telecommunications with
CRTs or any other device was not supported with “high level”
languages, like COBOL. It is now. When
this project came up the only way to handle telecommunications was by
writing programs in the dreaded assembly language. I became an assembly
This was more experimental than an expectation of reality.
Anything the tellers might have reason to access was on the GE
computers at the time. The
handwriting was on the wall though and management was hinting that our
allegiance was about to change from GE to something more customer
friendly. I think they knew
GE was going to sell and their computer would cease to exist. Both
eventualities became reality in a short time. General Electric sold to
Honeywell not long afterward.
Anyway, IBM had a device that was sort of an IBM typewriter, with
wires attached. Management decided to write a system that would allow
tellers to use the typewriters to enter a request for a balance and the
response would be typed back to the machine.
was not a lot different than the way computer operators exercised control
of the computer, which was done through typing on a typewriter type
keyboard built into the console of the machine.
The computer operator did not have a screen to look at as we do
I was assigned a segment to write in assembly language.
Dave and Rich, our real assembly language expert, who had done all
the CRT work, were running this show.
See how forgiving Dave was. Anyhow,
I set out to write my segment and got it accomplished.
It would go nowhere without the other segments so it was assembled,
as opposed to compiled as high level languages were, and there were only a
couple of errors. I was proud of that because they could be, and were,
A few months after I had left programming and moved on to other
things, I visited the programmers with whom I had worked on the
teleprocessing project. They said my module was the only module that
worked the first time. I was very proud of that.