IBM manufactured and sold document processing equipment such as proof machines, inscribers and document reader/sorters for financial institutions from 1934 to 2005.
IBM and document processing Prior to the introduction of computers, cheque processing was performed manually by each institution. IBM recognised the opportunity to automate this processing and began building machines for this purpose, starting with the IBM 801 Bank Proof machine in 1934. By eliminating hand written ledgers, the IBM 801 automated teller operations.
By the mid 1950s many banks began investigating the use of new technology to handle the ever growing volume of cheques that needed to be processed each day. As an example, Bank of America's checking accounts were growing at a rate of 23,000 per month and branches were forced to close their doors by 2 p.m. to finish the daily postings. In the United Kingdom, wages began to be paid by cheque. The number of cheques cleared by the central clearing house had grown from around 250 million in 1938 to around 320 million in 1951 and reached over 500 million by 1964.
A number of technologies were developed by companies like EMI in the UK (Figure Reading Electronic Device or FRED), and Compagnie des Machines Bull in France (CMC-7) to make cheques machine-readable by means of pre-printed characters or characters that were inscribed on the cheque when it was being proofed at the branch. IBM Poughkeepsie lab under J.A. Weidenhammer meanwhile was working on equipment that could mechanically feed, transport and stack paper checks, as these could not be handled by the existing techniques used for punched cards. They created a system of friction wheels and belts to achieve this. Meanwhile, another group within IBM collaborated with Weidenhammer on developing a machine-readable magnetic ink barcode, printed below human readable numerals, which they demonstrated to Barclays Bank in 1957. But after much industry consultation, the E-13B MICR font developed by General Electric as part of a solution sold to Bank to America became the American standard adopted by the ABA in 1958. The ABA had previously concluded that IBM's proposed marking system would be too costly and also, that it was visually unattractive. After some hesitation, IBM developed their own multi-track read head for MICR characters and switched to using E-13B. In 1959 they began promoting the IBM 1210. IBM Supplies Division (which also manufactured punched cards) also saw an opportunity to sell paper checks, printed by IBM in an IBM plant.
IBM's main competitors in 1959 were Burroughs with their B101 Reader/Sorter, which could sort 1560 documents per minute, sold as part of their B251 Visible Record Computer System, and NCR, which sold a sorter jointly developed with Pitney-Bowes that also used components supplied by General Electric.
By 1963 the American National Standards Institute (ANSI) adopted the ABA specifications as the American standard, along with countries like the UK, Canada and Australia. Meanwhile, CMC-7 was adopted as the French standard in 1964 and grew to be widely used in Europe and South America.
Adoption of these sorters was usually linked to adoption of the computer system it attached to, although the first 1210 rented by Barclays Bank in 1960 was used purely in an offline capacity before the bank bought an IBM 1419 attached to an IBM 1401 in 1963. New procedures and standards were also adopted, for instance Martins Bank in the UK took delivery of an IBM 1412 on 22 October 1961, but it was not fully operational till April 1963.
Document processing usually involved the following process. First, documents to be proofed would be loaded into the hopper of a proof machine and then fed through the machine one at a time. For each document:
The document would be read: The operator would read the value of each document and key that value into the machine. The machine would keep a running total of amounts and usually print that out. The document would be inscribed: inscribing was the process of printing the value of the document onto the document, so it could be read back electronically, by either the proof machine or a reader/sorter. The document would be endorsed: endorsing was the processing of stamping the document, either on the front or the back or both. The document would be sorted: proof machines could sort the document into pockets. As an example the IBM 4723 order of operations was described as follows:Hopper --> View --> Slot --> Read -> Stamp front (endorse) -->. Audit trail print --> Inscribe -->. Stamp back (endorse) -->. Sort (into 1 of 3 pockets)After proofing the documents would be sent to a reader/sorter for data capture and final sorting. The sorter might endorse the document as well as print a sequence number onto it. The sorter might also microfilm the document, while later sorters used document imaging technology.
Proofing machines and inscribers
IBM 801 Announced by IBM in 1934, the IBM 801 could list and separate checks, endorse them and record totals. It was withdrawn on Jan 18, 1956. The 801 is unrelated to the later IBM 801 processor.
IBM 802
Announced by IBM in July 1949, the IBM 802 is a proofing machine that could sort, list, prove and endorse checks and sort them into 24 pockets. It was withdrawn on June 28, 1965.
IBM 803 Announced by IBM in July 1949, the IBM 803 is a proofing machine that could sort, list, prove and endorse checks and sort them into 32 pockets. This machine remained in the IBM Sales Manual till Dec 18, 1981.
IBM 1201 The IBM 1201 is a proof inscriber, that could perform all the functions of an IBM 803 (which it closely resembled) as well as document inscribing. It has 10 models offering a variety of options including up to 32 pockets plus document endorsing as an optional feature. IBM Rochester began shipping the IBM 1201 in August 1961. In 1963 IBM Supplies introduced a new endorsing roll for the IBM 1201 which can provide for up to 375,000 endorsements. It was withdrawn on Nov 22, 1978.
IBM 1202 The IBM 1202 Utility Inscriber is a specially designed electric type-writer that is used to inscribe documents prior to them being sorted. It was announced Jan 12, 1959 and withdrawn April 26, 1966.
IBM 1203 The IBM 1203 is a unit inscriber that can print numerals and special symbols on documents using magnetic ink. It is also an adding machine. It was manufactured by IBM Rochester. It was announced Mar 8, 1961 and withdrawn Nov 22, 1978.
IBM 1206 The IBM 1206 described either as a coder or encoder, was a CMC-7 inscriber. The Belgian GIRO Administration was using 26 of them in 1970, attached to Olympia adding machines.
IBM 1260 The IBM 1260 Electronic Inscriber was a proofing machine with eight stackers. It could inscribe documents as well as optionally endorse them. Three or five external stackers could optionally be added. It was manufactured by IBM Rochester until September 1971, although it remained available for rental for many years afterwards.
It was approximately .
It was announced on July 1, 1965, and withdrawn on December 18, 1981.
Reader/Sorters There are several families of IBM sorters. The IBM 1259 (which was an OEM) at 600 documents a minute. The smaller 1255/1270 running at between 500 and 750 documents per minute. The 1210, 1412, 1419 and 1275 moving from 900 to 1600 documents per minute. There were two midrange sorters, the 3892 and 3891, released in that order. Finally the IBM 3890 running at 2400 documents per minute.
IBM 1255 / IBM 1270 The IBM 1255 is a MICR reader/sorter. The IBM 1270 is an OCR reader/sorter that uses the same sorter engine as the IBM 1255 but with more processing hardware. The CMC-7 models of the IBM 1255 as well as the IBM 1270 were not offered for sale in the United States.
The input hopper holds a 5-1/2" stack of documents that uses a gravity feed. Each stacker pocket can hold up to 2-1/2" of documents.
Two offline sort patterns are possible but with a 6 stacker sorter, it is typical to sort in two phases. Phase one sorts on the even digits of one field (using five stackers) with odd digits going to the reject stacker (the top stacker). Phase two sorts on the odd digits of one field (using five stackers). The operator can leave the documents from phase one in the stackers when starting phase two. If a 12 stacker sorter is in use then sorting can be done in a single phase using ten stackers, with the remaining two stackers being used for rejects (using the top stacker of the first bay known as stacker R) and special sorts (using the top stacker of the second bay known as stacker A).
The 1255 and 1270 can be attached to an IBM System/3, IBM System/32, IBM System/34, or IBM System/36 using a serial I/O channel adapter. They can also be attached to a System/360 or System/370 parallel channel.
IBM 1255 There are six models, the differences being: maximum speed; stacker count and whether the sorter could read E-13B or CMC-7. Models 1, 2 and 3 are E-13B while models 21, 22 and 23 are CMC-7. Models 1, 2, 21 and 22 have 6 stacker pockets while Models 3 and 23 have 12.
IBM 1270 There are four models. Models 1 and 3 have 6 stacker pockets while Models 2 and 4 have 12 stacker pockets. The machine is both longer and heavier than an IBM 1255. The majority of the hardware for the extra pockets in the Models 2 and 4 appears to already be present in Models 1 and 3. +IBM 1255 /IBM 1270ModelMICR TypeAnnouncedWithdrawnDocuments per minuteStacker pocketsLength Width HeightWeightHeat output/hr1255-1E-13BOct 20, 1970Oct 1, 19855006 1255-2E-13BOct 20, 1970Oct 1, 198575061255-3E-13BOct 20, 1970Nov 3, 1987750121255-21CMC-750061255-22CMC-775061255-23CMC-7750121270-1/3OCR61270-2/4OCR12
IBM 1259 Announced September 20, 1967 for use with the System/360 Models 20, 30 and 40. Read and sorted cheques at up to 600 cheques per minute into 11 pockets. It was withdrawn from marketing on July 16, 1973. It was manufactured for IBM by Lundy Electronics & Systems of Glen Head, New York. Deliveries began in third quarter of 1968.
Models included 1, 2, 3, 31, 33 and 34. Specifications below are for the Model 2. +IBM 1259AnnouncedWithdrawnDocuments per minuteStacker pocketsLength Width HeightWeightHeat output/hrSeptember 20, 1967July 16, 197360011
IBM 1210 Announced on January 1, 1959, it could read and sort E-13B cheques at up to 900 cheques per minute. An IBM 1210 Model 4 Sorter-Reader could be attached to an IBM 1401 The model 4 was withdrawn from marketing on September 16, 1960. Models 1, 2 and 3 were withdrawn on April 26, 1966. The Service Bureau Corporation offered document sorting as a service using the IBM 1210 reader/sorter in 1961. The Pacific State Bank of Hawthorne, California used the service to sort 11,000 checks a day, sending them daily from their three branches, with SBC returning the sorted cheques the following morning.
IBM 1219 The IBM 1219 was announced on August 24, 1961, the same day as the IBM 1419. It sorted magnetically printed or inscribed documents.
The IBM 1219 was withdrawn on Feb 2, 1971.
IBM 1275 Optical Reader Sorter The IBM 1275 Recognition System is a check reader sorter that reads OCR fonts rather than MICR fonts. It uses the same sorting engine as the IBM 1419 (and the IBM 1218/1228), but with an additional module for character recognition processing. This was needed because with a transport speed of 6.7 meters per second it needed much faster recognition logic. It was developed by IBM Uithoorn, The Netherlands with support from IBM Rochester and IBM Endicott.