During a short stint compiling manufacturing statistics for the US Census Office, Herman Hollerith grew frustrated with the organization’s manual process of counting questionnaires. The tedious, error-prone labor was creating an operational nightmare for an overtaxed agency. Certain that automation was the answer, he invented an electric-powered counting machine. It introduced the world to mechanized data processing and laid a foundation for the development of computers and the binary system of zeros and ones still used in information processing today.

Hollerith’s punched card tabulator, developed in the 1880s, eased the administrative burden of hand-counting the population in a country whose numbers were exploding. Its success in the 1890 census led countries around the world, including Austria, Canada, Cuba, France, Norway, the Philippines and Russia, to procure Hollerith’s tabulator for their own national counts.

Hollerith also licensed the machine to private businesses for statistical and accounting purposes, including for railroads, department stores and public utilities. Over the next 60-plus years, variations of the tabulator and its punched-card methods would itemize, categorize and compile data on all kinds of products and people across society. While spitting out numbers, these machines generated exorbitant profits over decades for the company that would become known as IBM.

A mining engineer from Buffalo, New York, Hollerith didn’t set out to be an inventor. But the challenge of stripping banal labor from the census process appealed to him. After a colleague at the Census Office proposed the idea of automating calculations in 1879, he got to work designing the new apparatus.

Hollerith applied for his first patent in 1884, outlining a proposed method to store data using holes punched into strips of paper, similar to how player pianos read thick rolls of paper full of notched notes. By 1886, he switched to punched cards, and a year later he applied for a second patent. The patents were granted in 1889.

Punched cards weren’t Hollerith’s idea. About 80 years prior, Joseph Marie Jacquard of France devised a way to use punched cards to automate steam-powered weaving looms. In the mid-1830s, English mathematician Charles Babbage developed plans for a computing engine — later dubbed the Analytical Engine — that could do math using instructions from punched cards. But Hollerith was the first to apply the principle to data processing.

In 1886, Hollerith began testing his machine by compiling mortality statistics for Baltimore, Jersey City and New York City. In 1888, the Census Office held a competition to find the fastest tabulating solution. The winner would earn a contract to process the 1890 census. His two competitors clocked in at 144.5 and 100.5 hours to capture the data used for the challenge. Hollerith came in at 72.5 hours. Hollerith’s machine also excelled at the task of preparing the data for tabulation, logging a time of 5.5 hours, which dramatically outperformed his competitors’ times of 44.5 and 55.5 hours.

The census contract in hand, Hollerith readied his mechanical system for the audacious task. The multistage tabulating process required various machines and gadgets to record, sort and compile the information. First, clerks would manually transfer census data from paper schedules to punched cards using a hole puncher (or pantograph). Each hole corresponded to a different piece of demographic data collected from surveyed households. Census clerks performed this phase at a rate of about 500 per day.

These punched cards then were fed manually into a card reader, which resembled a modern sandwich press. Closing the top flap lowered spring-loaded metal pins onto the punched card. When a pin passed through an open hole in the punched card it would connect with a mercury reservoir and close an electrical circuit. This sent a pulse to one of 40 dials that corresponded to the demographic data on the card and registered a “1” on the dial. No connection was the same as registering a “0.” This binary principle of ones and zeros is still used today in detecting the presence or absence of an electrical charge in semiconductors.

He later added a separate machine that sorted the cards into as many as 24 categories. Based on the location of the holes on the card, the lid on the sorter bin would open and the clerk would drop them in. Proficient operators could sort 80 cards a minute.

Hollerith’s tabulating system saved the Census Office USD 5 million and more than two years of labor. It completed the count in six months and finished detailing all the data in two years. By contrast, the 1880 census took more than eight years to complete.

Hollerith’s machine was a practical and critical hit. In 1890, the Franklin Institute of Philadelphia awarded Hollerith the prestigious Elliott Cresson Medal for his “machine for tabulating large numbers of statistical data.” He won a gold medal at the 1889 Paris Exposition and a bronze medal at the Chicago World’s Fair of 1893.

In 1896, he founded the Tabulating Machine Company to begin adapting his invention to other commercial applications, though he wasn’t done with US census work just yet. He won an 1899 competition for the 1900 US census contract with relative ease since his was the only mechanical solution available. While the total cost of tabulating population statistics rose by 6%, the per capita cost, given the 21% uptick in population, actually fell by 13%. Nevertheless, census officials challenged the cost of Hollerith’s machines once the agency became a permanent government bureau in 1902.

Census Bureau officials concurrently decided to develop their own tabulators and sorters based on Hollerith’s original patents, which were expiring in a few years. The agency hired some of his former employees to learn more about the designs. In 1905, Hollerith received an ultimatum: Improve your machines and prices or lose the business. Hollerith objected and failed in patent litigation against the government from 1910 to 1912. 

On July 6, 1911, Hollerith agreed to sell his Tabulating Machine Company to financier Charles Flint for USD 2,312,000 (more than USD 65 million in 2022 dollars). Flint merged the company with two other time recording and measuring businesses to create the Computing-Tabulating-Recording Company, which was renamed International Business Machines Corporation in 1924.

Hollerith stayed on with C-T-R as a consulting engineer under a 10-year service agreement. He continued to make important improvements to the machine, though his role was diminished over time and his contract was not renewed. Otto Braitmayer, whom Hollerith hired as a low-level office assistant in 1889, took over development of the tabulator business and became an IBM vice president.

Upon his death in 1929, the IBM publication Business Machines paid tribute to Hollerith, citing that he helped ease “drudgery, mental toil and human error … both business and human welfare have benefited through his contributions to the world’s progress.”

In 1990, Hollerith was inducted into the National Inventors Hall of Fame in recognition of the importance of his machine to the birth of the data compilation industry and its more than half-century of contributions supporting some of mankind’s greatest statistical, computational and scientific feats. Hollerith’s machine transformed data tabulation from a manual burden that was stifling society’s advancement to a powerful agent for understanding the world around us.