ALTHOUGH computerised ATM machines didn’t emerge as a mainstream feature of the urban landscape until the 1970s and 1980s, the first Automated Teller Machine was opened as early as 1967. Barclays Bank introduced the ur-ATM machine (branded as Barclaycash) which was located at its Enfield Town, London, branch, with popular 1960s TV comedy actor Reg Varney (above, performing the “celebrity opening”) selected in the role as “Customer No 1”. Designed by John Shepherd-Barron, the DACS machine lacked one essential ingredient of the modern ATM – no magnetic plastic card! Instead, customers inserted a cheque-like token impregnated with a radioactive compound which when matched with the customer’s ID dispensed money (initially limited to a maximum of £10).
Barclaycash (Source: deccanchronicle.com)
The need for ATMs grew out of the service limitations of the highly regulated banking system in a changing modern world. Banks in the UK and elsewhere were hamstrung by quite restricted business hours, often open only around ten to three weekdays. Customers who worked during these hours found their access to personal banking severely curtailed, especially when it came to the withdrawal of cash. In the Sixties project teams in banks in the UK, Sweden and Japan were all working at developing a form of automated cash dispenser. The successful introduction of the ATM in public locations solved the problem, offering instant, 24-hour access to cash.
After the Enfield ATM and it’s successors opened their windows there was some initial reluctance by customers to embrace the radical new way of banking⌖…a wait-and-see attitude prevailed, but not for long. Today ATMs swamp the commercial retail world, at a rough estimate there is over three million units operate globally (there’s even one in Antarctica!)
The pioneer of the PIN 📌 As with the debate over the invention of the first flying machine, Shepherd-Barron’s claim to originality has its challengers. Around the same time development engineer James Goodfellow came up with his own version, a Chubb machine❂ which worked on a PIN number associated with a code token in the form of a plastic card with punched holes. Goodfellow’s innovation was installed in branches of the Westminster Bank one month after the Barclays ATM.
Innovative Scanda
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But can we categorically say with 100% surety that Goodfellow was the sole originator of the PIN? Sweden has a claim here too for pioneering recognition. The Metior Company’s Bankomat came into operation at Uppsala Sparbank just one week after the Barclays’ machine. The Swedish technology, on display at a Stockholm fair in 1964, presented a plastic-coated card and linked PIN. It seems likely that Shepherd-Barron, Goodfellow and the Swedes all devised their ATMs at around the same time independently without any connexion to or cognisance of each other’s projects.
ATM pioneer Simjian (Source: alchetron.com)
Neither Shepherd-Barron or Goodfellow are credited with devising the concept of the ATM itself. The consensus tends to attribute this to Armenian-American inventor Luther George Simjian. Simjian’s Bankograph, patented in 1960 but never fully commercially developed, came up with the idea of a “hole-in-the wall machine” that would allow customers to make financial transactions.
As with the debate over the invention of the world’s first manned flying machine, Shepherd-Barron’s claim to prototype creation has its challengers. Around the same time as the Shepherd-Barron innovation development engineer James Goodfellow came up with his own version, a Chubb machine❂ which worked on a PIN number associated with a code token in the form of a plastic card with punched holes. Goodfellow’s innovation was installed in branches of the Westminster Bank one month after the Barclays ATM.
Introduction of the ATM in America 🏧 The first American ATM was introduced in 1969✪ at the Chemical Bank’s branch in New York’s Rockville Centre (in the US they are sometimes referred to as “cashpoints”). The pioneering 24/7 US ATM (designed by Donald Wetzel) the Docuteller utilised reusable magnetic coded cards.
Lloyd’s Cashpoint (Source: deccanchronicle.com)
On the road to digital banking 🏧
These early dinosaurs of the alternative to face-to-face banking, the 1960s generation of ATMs, were of course all offline. The world’s first computerised ATM, introduced by Lloyds Bank, didn’t have its genesis (again in the UK) until December 1972…installed in Brentwood, Essex, the ATM cash machine was developed in partnership with IBM.
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⌖ prior to the introduction of the ATM and in its formative stage there was unsurprisingly a degree of resistance to them from banking employee unions
❂ the Chubb cash dispensing machine in its earliest iteration retained the user’s card (as proof of receipt), which later was posted back to the owner
✪ coincidentally the same year of the first operating ATM machine in Spain
Stock Exchange 1.0 The world’s first known stock exchange is thought to be a market established in Bruges, Belgium, around 1309. This operation was a family concern conducted in the home of textile merchant Robert Van der Burse (or Van “ter Buerse/Buerze”). This type of early market which primarily deals with the exchange of commodities, ie, various agricultural products—and in its modern connotation, also with gas, oil, coal, etc—acquired the name ‘bourse’ from its founder. A bourse (typically European in location) is “a market organised for the purpose of buying and selling securities, commodities, options and other investments” [‘Bourse’, Investopedia, www.investopedia.com]. Another early bourse was located in Antwerp<a̷>.
𝕍𝕒𝕟 𝕕𝕖𝕣 𝔹𝕦𝕣𝕤𝕖: 𝕥𝕙𝕖 𝕠𝕣𝕚𝕘𝕚𝕟𝕒𝕝 𝕓𝕠𝕦𝕣𝕤𝕖
The Van der Burse exchange was the first organised market, before this landmark development such transaction processes were unorganised and informal – sellers and buyers would meet up one-to-one at specific meeting places such as town squares to conduct their trade <b̷> [‘Creation of the first stock exchange’, www.citeco.fr].
The Dutch, pioneers of capitalism
For the first ‘modern’ securities market we need to look to Belgium’s neighbours, the Dutch. The Amsterdam Stock Exchange is the oldest such market, founded in 1602 with the establishment of the Dutch East India Company (Verenigde Oostindische Compagnie or VOC). Amsterdam was the first bourse to deal in securities <c̷>. The VOC was empowered with quasi-government and monopoly status by the States General of the Netherlands, granted a 21-year charter to conduct all Dutch trade in Asia. In so doing, financial history was made…the VOC was a world first, a public company founded by a state government. Hitherto the Dutch trading environment comprised a number of competing private companies known as voorcompagnieën or “pre-companies”. By the 1602 Charter, the government merged those small, private companies into one “nationalistic Goliath”, VOC, creating a proto-megacorporation.
𝟙𝟞𝟘𝟚 ℂ𝕙𝕒𝕣𝕥𝕖𝕣 𝕕𝕠𝕔
Raising capital
At VOC’s commencement of business it held an unprecedented initial public offering (IPO). The company’s directors opened up share-holding to all Dutchmen by subscription (while investing 12,000 guilders of their own money up front). The public nature of the share issue was its revolutionary feature, hitherto predecessor companies (like the Oude Compagnie) had raised capital from a small circle of private investors. Some investors balked at the opportunity offered by VOC, wary of tying up their precious savings for such a long period (ten years). Concessions made by the VOC eased these concerns – in a subsequent amendment to the charter, investors were permitted to on-sell their shares to a third party prior to ten years [‘The world’s first IPO’, Lodewijk Petram, The World’s First Stock Exchange’, 15 October 2020, www.worldsfirststockexchange.com].
𝔸𝕞𝕤𝕥𝕖𝕣𝕕𝕒𝕞𝕊𝕥𝕠𝕔𝕜𝔼𝕩𝕔𝕙𝕒𝕟𝕘𝕖𝕒𝕟𝕕𝕓𝕦𝕝𝕝
What would NOT have seemed novel to financial market investors of the day was the ‘office’ for doing business…initially lacking a business premises the VOC—after the fashion of the Bourses’ 14th century Bruges exchange—issued an open invitation for would-be investors to come to the private home of the company co-founder Dirck van Os to do the paperwork and deposit their money. Ultimately, by the time subscriptions closed, some 1,143 individuals <d̷> had invested a total of 3,674,945 guilders in the Verenigde Oostindische Compagnie (including Dirck van Os’ own maid!) [Petram].
ℕ𝔸𝕊𝔻𝔸ℚ (ℙ𝕙𝕠𝕥𝕠: 𝕄𝕒𝕣𝕜𝕖𝕥𝕤𝕎𝕚𝕜𝕚)
Footnote: the VOC’s IPO had profound ramifications, fundamentally altering the nature of investing. Originally intended to facilitate the financing of risky capital-intensive ventures, it “inadvertently created an alternative for investor beyond fixed income investments, marking the beginning of retail investing in equities” [‘World’s First IPO: Dutch East India Co’, Suede Investing, www.suedeinvesting.com].
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<a̷> the most famous bourse today is that of the Paris Stock Exchange
<b̷> including the square in front of the Van der Burse residence
<c̷> printed stocks and bonds, debt and other interests in companies, government and private businesses
The seeming ubiquity of Woolies? Woolworths is an internationally known name synonymous with traditional merchandising budgeted within the reach of the average consumer. When I was a kid I thought that the Woolworths variety store-cum-supermarket chain in cities and towns strewn all around Australia and New Zealand was an offshoot of the famous pioneering Woolworths “dime and nickel” company in the US. Until I actually went to South Africa I wasn’t even aware that there was Woolworths in that country as well. When I did discover its existence travelling around the RSA garden route I initially assumed that it too was a spoke in the far-reaching American F W Woolworth imperial retail wheel.
Only much, much later did I learn of the total absence of any business or corporate connection between the three ‘Woolworths’ entities (sometimes displayed in singular form, sometimes plural, sometimes with an apostrophe). Both the retail chain in Australasia and the one in South Africa got the name ‘Woolworths’ through the same legalistic loophole. When a collection of businessmen began the Australian retail enterprise they acquired the name because the original American company had not registered the name in NSW (or anywhere in Australia). Thus the first store in Sydney CBD’s Imperial Arcade in 1924 was called Woolworths Stupendous Bargain Basement. The transition to the eventual nomenclature used (simply ‘Woolworths’) was not quite that simple. Before settling on ‘Woolworths’, the first notion that came to Percy Christmas (Woolworth’s inaugural CEO) and his directors was to call it ‘Wallworths Bazaar’, a pun on the American retailer’s name[1].
Somerset Mall ‘Woolies‘ Western Cape RSA
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Similarly, the South African ‘Woolworths’ acquired the name because there was no legal trademark impediment to it using the name in South Africa. Founder Max Sonnenberg and his son Richard started the first Woolworths store in Cape Town in 1931, and like the Australian namesake it has never had any financial connection to the prior existing F W Woolworth Co business. Woolworths South Africa-style was a different sort of retail animal, modelling itself on the upmarket British Marks and Spencer rather than the F W Woolworth bargain basement store concept[2].
Woolworths ground zero: Creating the retail template The American phenomenon started in 1878 when Frank Winfield Woolworth, son of a poor potato farmer, started his first store in Utica, New York, the basis of his business strategy was to sell a wide selection of items at low price (initially all the merchandise was set at 5 cents each). The store was poorly located and failed abjectly but Woolworth persisted, opening a second dry goods and variety store the following year in Lancaster, Pennsylvania, and the formula eventually caught on. The entrepreneur expanded his store concept to a “five-and-dime” one (items set at 5¢ and 10¢ each).
The early F W Woolworth & Co
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Woolworth’s brother Charles (known as ‘Sum”) got in on the business, starting up his own retail stores soon after his older brother’s. Frank expanded F W Woolworth Co into a chain by mergers and partnerships with his cousin Seymour Knox I and with other relatives and friends❈. By gathering together a little club of owners Woolworth could purchase large quantities of goods directly from the manufacturers. As the US stores multiplied and prospered, Frank, remembering his own disadvantaged childhood, took pride in the fact that the “ordinary man” could afford to buy from Woolworth stores[3].
From 1890 FWW would embark on annual (sometimes biannual) large-scale buying trips to Europe, always paying the suppliers in cash on principle. Exposure to European manufacturers promoted awareness of market potentiality in other countries and may have prompted Woolworth’s eventual decision to branch out internationally. Anglophile Frank had his eye firmly on Britain as his 1890 trip diary indicates: “a good penny and sixpence store, run by a live Yankee, would be a sensation here”[4]. The chain had already extended north to Canada and subsidiaries were launched in the UK, Germany, Austria, Mexico and Cuba. The UK Woolworth sub-set itself opened stores in the Republic of Ireland, Palestine, Cyprus, the British West Indies and Southern Rhodesia (now Zimbabwe).
FW Woolworth store in Glasgow (Source: Pinterest UK)
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British F W Woolworth Woolworths came to Britain in 1909 with the first store, selling clothing, stationary and toys, opening in Liverpool in northern England (family cousin Fred Moore Woolworth was the British arm’s first managing director). The pricing strategy matched the US “five-and-dime” one with items selling at 3d and 6d. The British chain flourished from the 1920s on, becoming a household name through the UK, so much so that most consumers in Britain and Ireland believed that their ‘Woolies’ shops were a local invention, “where sixpence once went a long way”[5].
Like the parent company in America, British Woolworths proved a retail innovator. The Liverpool store introduced lunch counters (followed by Blackpool and other large UK stores)回, which were the precursor to the standard food courts which became integral to shopping malls later in the 20th century[6]. The Woolies restaurants also adhered to the 3d and 6d price formula, although by 1941 there had been some increases, eg, a split lobster salad had risen to the princely sum of one shilling (12d or 1/-)[7].
Woolworth UK’s rise and fall The 1930s marked a high point for Woolworth in the UK … outside of the Christmas season the chain was opening a new store every five days! During the price inflation of the late 1930s the Woolworth giant kept the sixpence limit on its prices by asserting its buying power to coerce suppliers into accepting lower margins for their goods¤. By 1958 F W Woolworth Co had amassed 1,000 branches in Britain[8].
The first signs of the downturn in Woolworth UK’s fortunes can be traced from the 1960s, the parent company forced the British arm into introducing Woolco, a series of one stop shops usually located out-of-town. These did not succeed, as they had in America because the UK lacked the US’s higher car ownership which suited out-of-town shopping. This was also an unwise move away from Woolworth UK’s strength, its high street stores. The UK business’ problems continued in the 1970s – Britain’s decimalisation in 1971 caught Woolworth unprepared because unlike other retailers it had resisted the move to self-service. The upshot was costly to Woolworth (£5 million and a five-year process trying to replace their over-abundance of store cash registers. Also in the 1970s a number of Woolworth stores in Britain and Northern Ireland burned down, attributed at least in part in incompetent and short-sighted management … resulting in brand damage to the trusted F W Woolworth name from which it never entirely recovered[9].
Closing down: Bromsgrove store (Worcs.)
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British elements (principally Kingfisher plc) finally gained a controlling interest in the UK enterprise in 1982, but Woolies, this British institution on the retail landscape ultimately fell foul of intense competition from cut-price retailers … many customers defected to British supermarket giants Tesco and Sainsbury’s. Falling sales❀ and a cash-flow crisis affected its entertainment arm. The downturn was exacerbated by the adverse effects of the Global Financial Crisis of the late 2000s. In 2007 Britain’s Woolworth Co experienced its first trading loss in 95 years … and much worst was to come. Over Christmas 2008 807 stores in the UK closed. With Deloitte’s administrating, the whole Woolworth chain had a complete shutdown over a 41 day period (months short of what would have been 100 years of operation in the UK). The carve-up saw restructure specialists Hilco Capital acquire the retail business and the Shop Direct Group (owned by the Barclay brothers) taking over the online retail sector … this too however was closed down in 2015[10].
Rise and fall of the prototype organisation The America parent Woolworth company was spectacularly successful in creating a chain of “cash-and-carry” dime stores. By 1977 there were 3,414 stores in the US, Puerto Rico and the Virgin Islands and 1,884 outside of the US[11]. The pioneering merchandising methods of F W Woolworth with the founder’s emphasis on sales and customer service, and direct purchasing, established a solid base to enable his successors as CEO to continue to sustain and grow the Woolworth retail empire. However after WWII there was shift in the nature of shopping propelled by the burgeoning car culture … retailing in America and elsewhere moved on from the high street stores which had been the mainstay of Woolworth to the new malls located in the suburbs. Woolworth tried slowly to adjust but found itself less able to adapt to this change than its major competitors.
Woolco, Canada (Photo: Reddit)
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By the 1960s the original five-and-dime stores had morphed into other commercial entities: whilst the Woolworth flagship was retained there was a move into speciality stores and the large discount retail chain Woolco, which had a measure of success. Through the eighties and into the nineties the ailing FWW giant lingered on.
La Crosse (Wisconsin) store, 1992 (Source: La Crosse Tribune)
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In 1997 F W Woolworth Co in the US folded, following years of diminishing competitiveness with its rivals (the chain in 1996 posted a crippling loss of $US37 million). The Venator Group took its place and F W Woolworth ceased to be a trading name. Venator’s retail focus fixed on the foot ware market with Foot Locker and Kinney Shoes. This was a sudden end to a gradual process by which Woolworth Five-and-Dimes were overtaken by the likes of more dynamic enterprises, Wal-Mart, Kmart (formerly Kresge), Target and other commercial players who adapted to change far better than the veteran Woolworth[12].
F W Woolworth Co ultimately suffered the same fate as the British Woolworth – an accumulated obsolescence. As Jennifer Steinhauer summarised its plight, it had “faded in the collective memory of a nation warmly nostalgic for old stores but not willing to shop in them”. The pioneering retailer had become increasingly irrelevant to American consumers … the advantage of convenience it once possessed (where shoppers could get “lipstick, diapers and a milk shake at a discount, all under the one roof”) was now all-too-easily available at the abundance of handy drugstores, supermarkets and discount stores popping up everywhere[13].
PostScript: South Africa and Australia – Higher and Higher Whilst the Woolworths brand name no longer decorates the urban commercial landscape in the US and Britain, the Woolworths name in the Southern Hemisphere is a different story. Over the last 20 years both Woolworths Holdings Limited (RSA) and Woolworths Limited (Australia) have experienced impressive growth through expansion and diversification.
Woolworths Holdings Ltd (WHL) achieved a net income of R3.12 billion in 2015 as a provider of clothing, footwear, accessories, groceries, beauty products, home wares and financial services. WHL has pursued an aggressive campaign of expansion, taking over companies in South Africa (Mimco, Trenery) and Australia (David Jones stores, Country Road, Witchery).
Woolworths Casula (NSW)
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Woolworths Limited (WL) made a net surplus of A$1.2 billion in 2016 with its variety stores (Big W), supermarkets (Countdown, Food For Less, Safeway, Flemings, etc), grocers (Thomas Dux). Part of the company’s impressive growth has come from diversification – into petrol stations (Caltex-Woolworths) and into liquor stores (taking over BWS and Dan Murphy’s), hotels and gambling (Australian Leisure and Hospitality Group)[14]. The Aussie Woolworths brand currently maintains a presence in Australia, New Zealand and India▤. Business success aside, it has not been all smooth sailing for the RSA and Australian companies … both WHL and WL have been embroiled in controversies in their home countries from time to time. In 2010 WHL removed Christian magazines from its shelves (a financial decision by Woolworths), provoking a huge outcry from the powerful Christian community in South Africa with WHL having to back down[15]. WL’s move into alcohol has been extremely profitable (together with Coles it is estimated to account for ¾ of Australian liquor sales). Allied to this is Woolworths’ impact on poker machine gambling … through its ALH arm it has in excess of 12,650 pokies in pubs. Anti-gambling campaigners have accused WL of targeting children to push up pub sales by offering loyalty reward cards to frequent gamblers (and placing “Kid’s Club” playgrounds close to the poker machine areas in its hotels)[16].
﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌ ❈ FWW’s mergers absorbed Knox & Co, Kirby & Co, Charlton & Co, C S Woolworth & Co and Moore & Co 回 the concept was an elaboration on F W Woolworth’s ‘Soda Fountain’ introduced in his Lancaster (US) store in 1907 ¤ a similar bullying practice to that used by Woolworths Australia (and its rival Coles) this decade against local manufacturers ❀ one exception being the old Woolies favourite, the pick ‘n’ mix confectionary lines ▤ in 1989 Industrial Equity Ltd (IEL), part of the AdSteam Group (Adelaide Steamship Company), successfully took over Woolworths Australia … however the Woolworths company was subsequently publicly floated several years later
[1] ‘Woolworths Limited’, Wikipedia, http://em.n.wikipedia.org [2] after WWII the South African firm actually had a business relationship with Marks and Spencer for a number of years, ‘Woolworths (South Africa)’, Wikipedia, http://em.n.wikipedia.org [3] One incident in particular resounded with him, being unable to afford an item in a Watertown store as a child, ‘Biography of F.W. Woolworth’, (Woolworths Museum),www.woolworthsmuseum.co.uk [4] J Robinson, ‘Woolworths: the rise and fall of the departmental store giant’, The Guardian (London), 20-Nov-2008, www.theguardian.com [5] ‘Christmas Past and Christmas Presents’, (Woolworths Museum),www.woolworthsmuseum.co.uk [6] ‘The British Lunch Counter 1938-41’, (Woolworths Museum),www.woolworthsmuseum.co.uk [7] ibid. [8],’A potted history of F.W. Woolworth’, (Woolworths Museum),www.woolworthsmuseum.co.uk [9] ibid.;’Preparing for decimalisation “D-Day” on 15 February 1971′, in ibid. [10] ibid.; Robinson, op.cit. [11] J N Ingham, Biographical Dictionary of American Business Leaders, Vol. 4 [12] F W Woolworth also tended to cling to outmoded lines, eg, in its toy department old-fashioned puzzles and no action figures, J Steinhauer, ‘Woolworth’s Give Up the Five-and-Dime, New York Times, 18-Jul-1997, www.nyt.com [13] Woolworth Co’s competitors ultimately offered more choice of products, quicker checkouts and often lower prices,ibid [14] Woolworths’ move into hardware stores via Masters Home Improvement was far less successful with the retail giant getting badly singed, E Stewart, ‘Masters: Five reasons Woolworths is pulling the plug on struggling hardware chain’, 18-Jan-2017, ABC News, www.mobile.abc.net.au [15] ‘Woolworths (South Africa)’, op.cit. [16] L Mulligan, ‘Woolworths under fire from anti-poker machine groups for introducing gambling rewards card in pubs’, ABC News, 17-Sep-2015, www.abc.net.au
