During the Great Depression of the 1930s, IBM managed to grow while the rest of
the U.S. economy floundered. Thomas J. Watson, Sr., took care of his employees.
IBM was among the first corporations to provide group life insurance (1934),
survivor benefits (1935) and paid vacations (1937).
While most businesses had shut down, Watson kept his workers busy producing new
machines even while demand was slack. Thanks to the resulting large inventory of
equipment, IBM was ready when the Social Security Act of 1935 brought the company
a landmark government contract to maintain employment records for 26 million
people. It was called "the biggest accounting operation of all time," and it went
so well that orders from other U.S. government departments quickly followed.
Watson created a major division in 1932 to lead the engineering, research and
development efforts for the entire IBM product line. The following year, IBM
completed one of the finest modern research and development laboratories in the
world at Endicott, New York.
Similarly, the IBM Schoolhouse was also completed at Endicott in 1933 to provide
education and training for employees. That same year saw the addition of an
entirely new product unit - the Electric Writing Machine Division - to IBM's
organization. In 1935, IBM launched a new line of business with the introduction
of the International Proof Machine.
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Despite the Great Depression, IBM increases its employment, trains more salesmen,
and increases engineering efforts.
The Automatic Accounting Scale Company, makers of automatic counting scales, is
acquired. The International Scale Company is organized as a subsidiary of IBM, and
takes over the now complete line of industrial scales.
