You never saw so many blue suits.
The Xerox 914 Copier, the original, is 25 years old, and yesterday Xerox Corp. gave a 914 to the Smithsonian.
It wasn't your usual executive lunch: The room was filled with the very men who put that pioneering machine together, designed it, and manufactured and sold it.
This is one of the more hair-raising sagas of American industry, about a modest firm in Rochester, N.Y., named the Haloid Co., with 500 employes and a president named Joseph C. Wilson who was willing to spend -- in perfecting and producing an invention that nobody knew for sure was really wanted -- more than the firm made for an entire decade.
In the most literal sense, he bet his company on it.
"Joe Wilson found himself," said David T. Kearns, the present chairman of Xerox, "in the position of having spent money he didn't have to build a machine he couldn't sell."
He did, however, think of a way to sell it. And created a $27 billion industry. And also made it economically feasible, for the first time in history, to print, just like that, a single copy of anything you wanted on paper.
And when Kearns called the copier "a marvelously free expression of a free society," he wasn't just waving his teeth. For, as one Xerox veteran pointed out, in the Soviet Union, where every sheet from every copier has to be logged, tagged and accounted for, underground literature is reproduced with carbon paper . . .
In the beginning, there was this inventor.
His name was Chester Carlson, and he was a 29-year-old patent attorney who spent his weekends in a small room over a bar in Astoria, on Long Island, trying to build a copying machine. It was 1938.
Since the word xerography didn't exist, Carlson went to the public library and looked up articles on the ways that light affects matter. Seeking techniques that the big photographic companies probably wouldn't have bothered to explore, he hit upon electrostatics as a means of picking up an image and putting it down somewhere else.
But he was no good at lab work. How do you spread melted sulfur on a metal plate while preventing the substance from bursting into flame? Once you get it there, how do you give it an electric charge? Things like that.
Carlson's solution was radically simple: From a job ad in a technical magazine, he hired an unemployed physicist named Otto Kornei to work as long as Carlson could afford him. Within three weeks, on Oct. 22, 1938, Kornei had produced a glass plate with "10-22-38 Astoria" inked on it. He rubbed it with a silk handkerchief, giving it an electrostatic charge, then shone light through it.
The light neutralized the charge except where the inked marks were. When Kornei dusted the plate with powder, grains stuck to the charged areas, and when he laid waxed paper on the plate, the powdered image was transferred.
That historic device is already at the Smithsonian.
Other people had made paper transfers, of course. There were the wet-paper techniques -- Thermofax by 3M, Verifax by Kodak -- and there was carbon paper, which smudged your fingers. The great thing about Carlson's copies was that they were on ordinary paper . . . and they were dry. That's where the word Xerox comes from, in fact: the Greek xeros means dry.
Carbon paper, the workhorse of the office, was about to become -- like the horse -- obsolete. But it would take awhile.
For inventor Carlson, all thumbs in the lab, also was no salesman.
"He never came directly to Haloid," said Horace W. Becker, the engineer who helped bring the idea to the production line. "Tried to sell it to several large corporations, but they weren't interested. Then finally, the Haloid people saw something about it in a magazine, and in 1944 Wilson bought limited rights in it."
What did Haloid, a manufacturer of photocopy paper with sales of $5 million a year -- and particularly Wilson, its driving force -- see in a dry-copy machine? This is the fascinating part: Whatever he saw, it wasn't in sharp outline. It was hazy -- a potential, a dream, a hunch. Yet Wilson had absolute, total, out-the-window faith in it: a machine that could make clear, dry copies on ordinary paper must be useful to somebody.
"When I got there in 1959," Becker recalled, "Wilson asked me to estimate what it would cost Haloid to produce this machine; he'd never done any market research himself. I gave my estimate, and the room went very quiet. The company had already spent several times earnings on the thing. So they tried to find someone else to build it."
Bell and Howell said the idea would never fly; the image would blur. IBM called for an Arthur D. Little survey. The survey showed that very little copying was done in the American office, not enough to warrant building more than, say, 5,000 machines.
"What they didn't ask," Becker said, "was: 'Why?' "
Why so little copying was done was that wet-sheet copies were a nuisance and cost 19 to 25 cents each.
"What they really researched was the carbon paper market. Nobody was looking at the possibility of copies being made at point of receipt."
Nobody, in other words, realized that the people who received a memo might want to copy it. In those far-off days, offices were tyrannized by the buck slip, a memo with various names on it that was initialed and passed along. A buck slip could take weeks to circulate through a large office staff.
Wilson pressed on. Over 12 years, Haloid spent $75 million to develop the machine, more than the firm had spent on all of its products in its 40-year history, and twice its earnings from all of its operations in sensitized papers.
When at last Wilson had his product ready to sell, he found himself pitted against Kodak's Verifax and 3M's Thermofax, both selling for under $400 and small enough to fit on a desk top. His new machine sold for $29,500 and was as big as a desk, weighing 648 pounds.
Wilson's solution was almost as ingenious as the Xerox machine itself: He offered to lease it for a mere $95 a month, with the first 2,000 copies free and additional copies costing 5 cents each. Plus, he would make repairs himself. Plus, the user could cancel within 15 days.
"Nobody bought it at first," Becker said. "But there weren't many cancellations, and few repairs. It ran pretty good. We could have done a better job if we'd had two more years, but then there wouldn't have been a company anymore."
In 1960, Haloid Xerox Inc. changed its name to Xerox Corp. and sold its first 914 to Standard Pressed Steel of Boston. From the first day, the machine was mobbed by users. In the first month it made more than 100,000 copies.
Xerox had stumbled on an astonishing fact: A vast, unsuspected market was sitting right under everybody's nose. It was thought that 5,000 machines would saturate the market. Within two years, Xerox had produced twice that many; by the end of the 1960s, production passed 200,000. And copies: Xerox had figured maybe 10,000 copies a month from an average machine. Right from the start, machines were turning out more than 10 times that number. People in offices all over America were lining up to make copies. Some machines made 5,000 copies a day, and 120,000 a month was nothing special.
Even before the company went on the New York Stock Exchange in 1961, some of the faithful had bought stock. But the engineers, as Becker says, though they believed in the product, "saw only the problems; we weren't sure the company knew what it was getting into. The thing wouldn't feed, the motors wouldn't work, the relays didn't relay, and anyway, we were only going to make 5,000 of them."
As everyone knows, the stock split and split and zoomed out of sight. A share of Haloid Xerox bought over the counter in 1959 for about $100 would be worth something like $3,150 today.
Said Becker: "I didn't buy any, but my wife Gloria bought some on her own, without telling me. I'm very polite to her now."
Incidentally, the 914, named for the 9-by-14-inch paper it could take, ran somewhat better than pretty good. "There are still about 1,600 of them flailing away," Becker said. Of course, at seven copies a minute they are a mite slow compared with the 120 copies a minute the Xerox 9200 is capable of churning out; and the gray-scale reproduction has been improved since the 914, as well as paper-handling ability. Today, Xerox copies can be made for 2.5 cents a click. But the 914 is still around.
Paul A. Strassmann, a former Xerox vice president, is considered the philosopher of copying and has written a book about it. "One way of measuring the evolution of mankind," he said, "is through communication. Gutenberg was a watershed in western civilization. He made everybody a reader. Before, only priests and a few others had books. But it didn't come for free; printing was costly. Five hundred years after Gutenberg there were only 200,000 printers in the world.
"The significance of the late Chester Carlson is that he made everybody a printer. He brought printing to the masses, as Gutenberg brought reading. Suddenly you have 20 million printers in the world. This is an enormous democratization. Until recently, information was a privileged possession, but after Carlson -- and Wilson's principle of transaction pricing -- information becomes a commodity. Xerography makes information a commodity. Suddenly you can buy and sell information."
And the computer, he says, has taken the process one giant step further. In the next stage, Strassmann says, beyond Gutenberg and Carlson, everybody will be an author. The prospect is numbing.