Editing Electronic Recording Machine, Accounting (section)

==History==
=== Background ===
[[File:ERMA Team.jpg|thumb|The ERMA team from SRI International]]

In 1950, [[Bank of America]] (BoA) was the largest bank in [[California]],<ref name="our"/> and led the world in the use of [[Cheque|cheques]]. This presented a serious problem due to the workload processing time. An experienced bookkeeper could post 245 accounts in an hour, about 2,000 in an eight-hour workday and approximately 10,000 per week. Bank of America's checking accounts were growing at a rate of 23,000 per month and banks were being forced to close their doors by 2&nbsp;p.m. to finish daily postings.

[[S. Clark Beise]] was a senior vice president at BoA who was introduced to [[Thomas H. Morrin]], SRI's Director of Engineering. They formed an alliance under which SRI would essentially act as BoA's research and development arm. In July 1950 they contracted SRI for an initial feasibility study for [[automation|automating]] their bookkeeping and check handling.<ref name="n2-2">[[#Nielson|Nielson, p. 2-2]]</ref><ref>{{cite journal| citeseerx = 10.1.1.175.6002|title=The Development of the ERMA Banking System: Lessons from History |author=Amy Weaver Fisher |author2=James L. McKenney |pages=44–57|journal=[[IEEE Annals of the History of Computing]]|publisher=[[IEEE]]|volume=15|number=1|year=1993 |doi= 10.1109/85.194091|s2cid=31809513 }}</ref><ref>{{cite book|url= https://books.google.com/books?id=1HPxUJNFgbgC |title= Waves of Change: Business Evolution Through Information Technology |author=James L. McKenney |author2=Duncan C. Copeland |author3=Richard O. Mason |publisher=[[Harvard Business Press]] |date= 1995-01-01|page=44|isbn= 978-0-87584-564-7 }}</ref> ERMA was under the technical leadership of computer scientist [[Jerre Noe]].<ref name="nielson">{{cite book | last = Nielson | first = Donald | title = A Heritage of Innovation: SRI's First Half Century | publisher = SRI International | year = 2006 | isbn = 978-0-9745208-1-0 | location = [[Menlo Park, California]] |pages = 2–8 | ref = Nielson}}</ref>

===First study===
[[File:Check with MICR.jpg|thumb|An early check, demonstrating the features developed by SRI: account numbers and [[Magnetic Ink Character Recognition]].]]

SRI immediately found a problem. Because accounts were kept alphabetically, adding a new account required a reshuffling of the account listings. SRI instead suggested using account numbers, simply adding new ones to the end of the list. In addition these numbers would be pre-printed on checks, thereby dramatically reducing the time to match the checks with account information (known as "proofing"). Numbered accounts are now a feature of almost all banks.

With that problem out of the way, SRI returned a report in September 1950 that stated a computer-based system was certainly feasible, which they called the Electronic Recording Machine (ERM).

===Second study===
[[File:ERMA wiring.jpg|thumb|The wiring in an ERMA machine]]

Bank of America then offered a second six-month contract in November to fully study the changes needed to banking procedures, and design the logical layout of production ERM machines. While this was underway, Bank of America went to a number of industrial companies to set up production of the machines, but none were interested. So SRI was given another contract in January 1952 to build a prototype machine.

One of the biggest problems found in the second phase was how to input the check information, especially the account numbers, with any sort of speed. Beise demanded a system that would not require the information to be changed from one medium to another, from check to [[punched card]] for instance, while simultaneously lowering error rates.

SRI investigated several solutions to the problem, including the first [[Optical character recognition|OCR]] system from a company in [[Arlington, Virginia]]. However, they found that it was all too easy for banks, and customers, to write over the account numbers and spoil the system. They also experimented with [[barcode]] information, and while this worked well even when printed over, if there was enough "damage" to the code a human operator could not read them in order to input them manually.

Instead, they decided to combine the two technologies, and used [[Magnetic Ink Character Recognition|MICR]]-printed account numbers which could be read by a magnetic reader similar to those in a [[cassette tape]] recorder. The resulting reader was a mechanical tour-de-force, combining five MICR readers with a large rotating drum that forced checks dumped in the top to come out the bottom single-file. The system was eventually able to read ten checks a second, with errors on the order of 1 per 100,000 checks.

===Final prototype===
The final ERM computer contained more than a million feet (304,800 metres) of wiring, 8,000 [[vacuum tube]]s, 34,000 [[diode]]s, 5 input consoles with MICR readers, 2 magnetic [[drum memory|memory drums]], the check sorter, a high-speed printer, a power control panel, a maintenance board, 24 racks holding 1,500 electrical packages and 500 relay packages, and 12 [[magnetic tape]] drives for 2,400-foot (731-metre) tape reels.

ERM weighed about 25 tons (22.7 tonnes), used more than 80&nbsp;kW of power and required cooling by an air conditioning system. By 1955, the system was still in development, but BoA was anxious to announce the project. At the time, computers (still known as "electronic brains") were all the rage; if BoA could announce that they were using them, it would convey a sense of futuristic infallibility. In September 1955, BoA froze the design.

By this point, no fewer than 24 companies had expressed interest in building the production machines, and [[General Electric]] won the competition.<ref>{{cite web| url=http://www.smecc.org/erma_proposal_icb-1100101.htm|title=ERMA Proposal ICB-1100101|publisher=Southwest Museum of Engineering, Communications and Computation|access-date=2012-07-15}}</ref> Among GE's team members was AI pioneer [[Joseph Weizenbaum]]. The company took the basic design, but decided it was time to move the [[Vacuum tube|tube]]-based system to a [[transistor]]-based one using [[core memory]].<ref>{{cite web| url=http://ed-thelen.org/comp-hist/ERMA.html |title= ERMA: Electronic Recording Method of Accounting |first= Ed | last= Thelen |work= Facts and stories about Antique (lonesome) Computers| access-date =2012-07-15}}</ref> This won SRI yet another contract, this time by GE, to study the commercial computer market and suggest how ERM machines could be sold into other markets. After the construction run, they also contracted them to dispose of the original machine.