Joe Wilson and the Creation of Xerox

Charles D. Ellis

• Publisher: Wiley
• Year: 2011
• ISBN:
  9781118161166
• Edition: 1
• Topic: Business
• Subtopic: Business Biographies
• Index: Business

"Charley Ellis has written a magnificent portrait, capturing the indomitable spirit of Joe Wilson and his instinctive understanding of the need for and commercial usefulness of a transforming imaging technology. Joe Wilson and his extraordinary team, which I had the good fortune to first meet in 1960, epitomized the wonderful observation of George Bernard Shaw who said, 'Some look at things that are, and ask why? I dream of things that never were and ask why not?'

Xerox and xerography are not only a part of our vocabulary, but part of our everyday life. Charley Ellis gives the reader a poignant understanding of just how this happened through the life, adventures, critical business decisions, and dreams of Joseph Wilson and a cadre of remarkable individuals.

This book will surely join the library of memorable biographies that capture the building of America into a risk-tolerant, technologically sophisticated, idea-oriented society that thrives by understanding what Charles Darwin really said:

'Survival will be neither to the strongest of the species, nor to the most intelligent, but to those most adaptable to change.'"
—Frederick Frank, Vice Chairman, Lehman Brothers Inc.

CHAPTER 1

EARLY YEARS

Rochester is a river town, founded on the Genesee River where the falls drop 90 feet, providing power for the grain mills that were the first real business of the Flour City. Milling brought prosperity to Rochester in the early 19th century as the Erie Canal—on an ingeniously designed aqueduct bridge—crossed over the Genesee River. With the canal’s waterway crossroads established in 1824, Rochester’s population multiplied a hundredfold in just 10 years.

Before this surge, development had been slow, and for good reason. Ebenezer “Indian” Allen, the first settler in the mosquito-infested swamps south of Lake Ontario, where the insects caused what was called “Genesee Fever,” made a treaty with the Seneca Indians and built a mill in 1789. Then in 1803, Colonel Nathaniel Rochester and two partners in Maryland invested $17.50 in 100 acres they later described as “a god forsaken place, inhabited by muskrats, visited only by struggling trappers, and through which neither man nor beast could go without fear of starvation or fever or ague.” Hamlet Scranton was the first log cabin resident: He came in 1812. During the next dozen years, water power and grain milling supported a small town.

With the Erie Canal crossing over the Genesee River and creating a “water crossroads,” the small town became a small city. As water power lost prominence, Rochester’s climate, moderated by the Great Lakes, made the region ideal for growing hardy plants. In a few years, the Flour City became the Flower City, as more than 100 parks of various sizes attracted 200,000 visitors each May, who flocked to the area to see 540 different varieties of lilacs in bloom.

Half a century later, technology transformed Rochester when George Eastman popularized amateur photography by making it easy: “You push the button and we do the rest!” On the steady profits that flowed from one of the great consumer businesses of all time, he built the largest corporation in the Empire State: Eastman Kodak. Still known reverently as Mr. Eastman, he financed the Eastman School of Music, which holds 500 concerts annually, and joined with John D. Rockefeller to build the original University of Rochester.

Kodak was based on a technology and an innovative marketing concept that were just as new in the late 1800s as xerography and charging by the copy would be in the 1960s. Eastman Kodak headquarters remained in Rochester and Kodak was Rochester’s largest employer. Kodak was the major corporate citizen, and George Eastman was the major individual citizen of Rochester, providing a bar by which Joe Wilson could measure himself and his company.

Social activism became a celebrated tradition in Rochester. In addition to the philanthropy of Eastman, it was the home of former slave Frederick Douglass and the Abolitionist movement and is where Susan B. Anthony began the Women’s Suffrage movement. This may explain why taking responsibility for social improvement would have such special meaning for Joe Wilson.

The Wilsons came to Rochester in stages. Joe Wilson’s great-great-grandfather, William Wilson, emigrated from England to Binghamton, New York, in the early 1800s. His great grandparents, Harry and Ann Wilson, grew up in New York City and soon after their marriage moved to Syracuse where their son, Joseph C. “JC” Wilson was born in 1854. A muskrat trapper along the Chenango River as a boy, JC Wilson left school after the eighth grade, apprenticed to a jeweler, and soon became his leading traveling salesman. In 1878, JC Wilson moved to Rochester to become the partner of a pawnbroker-jeweler. He married Alice Hutton of Syracuse in 1881, and they had two daughters and one son. In 1885, JC acquired full ownership of the pawnshop and renamed it JC Wilson & Company. Later, he invested in a used clothes retailer, Acme Sales Company, and became the equivalent of a community banker by lending moderate amounts to help finance local businesses. In addition to earning good profits on his loans (and on street railway contracts), JC Wilson developed a network of grateful friends and the sort of influence that would fit well with his increasing interest in politics.

JC Wilson’s son, Joseph Robert Wilson, was born in 1882 and graduated from the University of Rochester in 1903. Since the affable father was always known as “JC”, the son—who was known as Dick to his family and friends—was often called “JR.” The nickname stuck, and later in life he became Mr. JR. While assisting his father in the pawnshop, JR Wilson met Katharine M. Upton, the daughter of a railroad engineer, when she came to pick up the gold watch her father had left for repair. They married in 1903.

The year 1906 was significant—just by coincidence—for each of four very different business beginnings in very different regions that would be important to Joe Wilson’s life for very different reasons. In 1906, Chester Carlson, the future inventor of xerography, was born in Seattle. In 1906, George Beidler started the Rectigraph Company in Oklahoma City to produce copies without requiring a photographic negative. And in 1906, John Gordon Battelle gambled successfully on a newly patented process for upgrading low-grade zinc ore mined from properties owned by his family in Joplin, Missouri, and made the fortune with which he would endow a great industrial research organization: Battelle Memorial Institute.

Also in 1906, JC Wilson and three partners incorporated in Rochester the tiny Haloid Corporation. Most of Haloid’s employees had been working for the M.H. Kuhn Company, a small paper coating shop located in an eighth-floor loft of the CP Ford Shoe Company building on Commercial Street at the upper falls of the Genesee River. M.H. Kuhn had been started in 1902 by the son of a German immigrant emulsion maker and a few others who had worked at Eastman Kodak. JC Wilson had arranged for JR Wilson to join M.H. Kuhn after graduating from the University of Rochester in 1903. But before he could get started with Kuhn, young Wilson suffered a serious kidney ailment that kept him out of work for two years. By then, M.H. Kuhn had failed. JC Wilson, believing his son’s best prospects were to grow with a small business, provided most of the start-up financing for Haloid. The new little company hired most of Kuhn’s employees and set up shop in the same eighth floor loft, enabling JR Wilson to join Haloid. He would later joke, “We started at the top!”

The scrappy little start-up enterprise certainly did not use sophisticated technology: The “air conditioning” needed to set the emulsions was provided by huge cakes of ice, with fans blowing the cooled air over the coated paper. Haloid’s coating alley was so short that the sensitized paper had to go down one side of the loft, make a U-turn, and go back up the other side. Primitive as it was, the small company developed a modest business making photographic paper that was sold directly to commercial photographers at a lower price than Kodak’s. Product irregularities had hurt the Kuhn Company badly, so Haloid recruited a skilled emulsions expert, Homer H. Reichenbach, who strongly recommended building a new plant where conditions could be controlled (he also suggested the name Haloid would suit a business based on Halogen salts).1

In 1907, Haloid and its 12 employees were ready to move out of the loft and into a new plant. But to make the move it needed money—a lot of money for such a small business—$50,000 (or nearly $1 million in current dollars). Finding that much equity capital for a small business was hard. No institutional investors made venture capital investments in those days, so the money would have had to come from wealthy individuals. JR Wilson turned to Gilbert E. Mosher, an acquaintance who was a successful Rochester businessman who had recently become wealthy when his company, Century Camera Company, sold out to Eastman Kodak. As JR Wilson had surmised, Mosher was looking for opportunities to invest.

Mosher was in a strong negotiating position; Wilson was not. So Mosher drove a hard bargain and insisted on being in charge of business operations and having, with his associate J. Millner Walmsley, effective ownership control through a voting trust that would hold the stock of JC Wilson and others. In addition to providing the needed capital, Mosher was a capable and experienced executive with good judgment who wanted to apply his management capabilities. “He might drive a hard bargain, but he gave you a dollar’s worth of value for every dollar you paid. What he was offering the Haloid Company was executive ability, financial astuteness, and strong leadership. Any company in Rochester would have welcomed this man’s help.”2 Mosher took a disciplined approach to business that differed considerably from Wilson’s.

JR Wilson liked to play the mandolin and the piano, and he liked to play loudly. At the company, he developed a reputation for being gregarious with customers and outside visitors, but having an explosive temper in the office, scolding employees he felt made mistakes and frowning sternly while muttering to himself. JR was often out late at night drinking with the boys and then back at work early the next morning, being just as hard as nails on the very same men. At home, JR’s grumbling about his frustrations at the company and his bragging about what he would have done or could have said—usually to Gilbert Mosher—so dominated family dinnertime that his young son quietly promised himself never to let that sort of thing happen when he was grown up and had his own family.

Joseph Chamberlain Wilson—always known as Joe Wilson—was born on December 13, 1909. He and his brother Dick, who was six years younger, were never particularly close. Nor was Joe emotionally close to his parents. Joe’s mother, Kate, was reserved and formal—certainly not “cuddly”—but invariably gracious and polite to others, a characteristic she passed on to her devoted and conscientious son. Recognizing his particular interest in books, she helped Joe learn to read and write at an early age. Despite his poor eyesight, he often spent time in bed reading with a flashlight under the blanket he had pulled up over his head, alone in his own private world of adventures and ideas.

As a boy, Joe often played alone in his room, constructing little buildings with ceramic poker chips. He had schoolboy friends, but was always quite shy, never good at sports, and something of a loner. When the Wilson family moved to Rugby Street, Joe changed elementary schools from No. 7 to No. 16, where he enrolled in a special program for gifted children. Changing schools changed his circle of friends and must have added to a feeling that he was on his own. He went to special classes for gifted students at Madison Junior High for two years and then on to West High School where, given his poor eyesight, he chose to be assistant manager of the basketball team and then, as a senior, became manager. Joe liked school, studied hard, earned good grades, enjoyed discussing books and ideas, and developed a lifelong appetite for knowledge and understanding. He began to realize that he could make his life more interesting, more useful to others, and more personally rewarding.

As a teenager, he also did conventionally unconventional things. He marked the racy passages of library books such as the Canterbury Tales, Don Juan, and Don Quixote. Readily accepted as the leader among his circle of friends, he assigned different days to each of his pals and gave explicit directions on how to approach the shelves holding the selected books indirectly and casually so they could all read the racy sections at the library without crowding together in ways that might attract the librarian’s attention.

Before completing high school, Joe paid a few surreptitious visits to the burlesque shows at Corinthian Hall located near Rattlesnake Pete’s Saloon. He also did his first back flip off the diving board at Keuka Lake and served as a counselor at the YMCA’s Camp Cory. He became skilled at shooting pool, learned the batting averages of all the great baseball players, and developed a major crush on Marilyn Miller, the Broadway star.3

Joe’s shy manner and intellectual inclinations made it hard for him to feel comfortable with his father, a volatile man who had strong convictions and was often gruff. Joe was much closer to his affable, knowledgeable, and patient grandfather, with whom he developed a special one-on-one relationship. This established a recurring, lifelong pattern of developing close counseling relationships with different men. Over the years, three individuals served as his principal personal advisors. With each, he discussed a wide range of topics to gain their perspectives and independent views, as well as to enjoy the pleasures of close friendship and trust: first, his grandfather, JC Wilson; then his classmate, Jack Hartnett; and later, his business colleague, Sol Linowitz.

During Joe’s formative years, the widely admired, respected, and well-liked JC Wilson was the greatest single influence on the development of his namesake grandson. They spent many hours talking about every subject under the sun. Joe was indelibly impressed with the self-control and willpower of his grandfather, whose motto was “Never make a promise you cannot keep and say nothing rather than something if you are in doubt.” Joe and his grandfather often discussed the City Manager movement, which was gaining momentum with the support of George Eastman. In the spring of 1927, this was the subject of Joe’s valedictory oration at West High School’s graduation.

Growing up in Rochester, Joe Wilson looked forward to becoming part of the community and, eventually, a leader within the city. Rochester, which would always be central in Joe’s world, was very clearly separated from such major centers of government, finance, culture, and recreation as New York, Boston, and Chicago, especially in winter when snowdrifts were deep. The minimum travel time to reach New York City was nine hours by train or twelve hours by automobile. There was no way to fly. Rochestarians may not have considered themselves isolated, but clearly their city was “geographically independent.”

At the same time, Rochester enjoyed many local strengths: The University of Rochester had the Eastman School of Music; the region had easy access to many types of outdoor recreation; and the greater Rochester community provided a good climate for raising families. In addition, Rochester was blessed by the absence of most of the problems that plagued America’s big cities: traffic congestion, slums, and divisive politics. Rochester was a peaceful place to grow up, and the Wilsons had become part of Rochester’s establishment. In Rochester, Joe enjoyed a strong and secure sense of place.

While Joe was growing up, Haloid was also progressing under the strict direction of Gilbert Mosher, who became general manager and then, taking over from JC Wilson, became president in 1917. He substantially expanded the sales organization and opened new sales offices. Mosher’s strength was finance and he dressed the part of a big-time financier: he wore spats, a homburg, and gloves—with a flower in his buttonhole—and carried a cane. Mosher lived in style, riding in a chauffeured Cadillac limousine, wintering in Boca Raton, and summering at a fishing camp in the Catskills. In business management, Mosher was from the old school. He expected employees to stand up when he entered the Haloid office and barely tolerated such follies as a coffee break. A stickler for neatness, Mosher liked to make unexpected visits to the plant, where he would check for dust in corners and on high shelves and then berate employees—including JR Wilson—for any discovered negligence. In his office, there were no chairs for visitors and smoking was not allowed. Mosher once ordered a subordinate to clear off the benches near the employee parking lot and to “fire the damned malingerers” who were lounging on them. They might get a 10-minute break, but “many of those lazy good-for-nothings had been goofing off for a full 20 minutes!” Mosher was right on the 20 minutes, but what he didn’t know was that the men were not stretching a 10-minute break, they’d come 20 minutes ahead of the start of the second shift. (Joe Wilson’s thoughtful discipline included choices of what not to do as well as what to do. He surely learned selective lessons about behaviors to avoid from both his father and Mr. Mosher.)

As John Dessauer, who led research at Wilson’s company for many years and produced a book about the company (My Years at Xerox), reported: “Mosher did not marry until he was well on in middle age, and during this bachelorhood he had an incredibly lengthy succession of housekeepers. If no one remained in his service very long, it was because he pursued the same tests in his house: He would conceal a match or a slip of paper on top of a cupboard....