Editing Electronic Recording Machine, Accounting (section)

===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.