CORPORATIONS: The Automatic Pin Boy

At the Jewel City Bowl in Glendale, Calif., 300 spectators gathered for an unusual bowling event. They had come not to watch bowlers but machines. As a bowler sent his ball crashing into the tenpins, the ball hit the cushion, set off an automatic switch. Almost before a spectator could say “Strike,” an intricate machine swept the alley clean of pins, set them in place on a rack, dropped a second set of pins into place, and sent the ball back to the bowler. It was an impressive demonstration of the American Machine & Foundry Co.’s new automatic pinspotting machine, in operation for the first time on the West Coast. Last week Jewel City totted up the results of its first two weeks with the pinspotters: business was 30% better than it had ever been before. Said Proprietor Hugo Kohn: “Yessir, it looks as though these machines will revolutionize bowling.”

There was no doubt in the mind of A.M.F. President Morehead Patterson that the machines would do just that. Bowling is already the fastest-growing participation sport; the machines should give it a big boost. They not only replace hard-to-find pin boys but they enable bowling alleys to stay open 24 hours a day, a big advantage in industrial communities where teams on different shifts bowl round the clock. Already A.M.F. has installed more than 800 in bowling alleys, plans to step up production to 250 per month next year. Even so, it will take years to supply the 60,000 U.S. alleys, especially since new ones are being added at the rate of 2,500 a year. By renting its pinspotters for an average of 12¢ a game (about the same cost as pin boys), A.M.F. expects to gross $22 million a year from the machines by 1960.

Comfortable Cushion. The pin-spotter is also symptomatic of the revolution that has taken place in the American Machine & Foundry Co. Formed in 1900 as the cigarette machine-making subsidiary of James Duke’s tobacco trust, A.M.F. became an independent firm after the trust was broken up in 1911. Under the presidency of Rufus Lenoir Patterson, who had been an American Tobacco Co. vice president, A.M.F. developed the first cigarmaking machine. With a patent monopoly in the field, A.M.F. was able to charge the entire cost of the machine (about $4,800) upon installation, then collect a royalty of $1 for every 1,000 cigars produced. The company then expanded into bakery machines and specialized sewing machines, many of which it also rented out.

Morehead Patterson (Yale ’20, Oxford, and Harvard Law School ’24) joined his father’s firm in 1926 after he had taken a one-year fling at the law. He watched the company, with its cushion of royalties, sail through the Depression, paying dividends every year. But he decided that no company could expect to live on its patents forever. Says Patterson: “We could tell by 1938 that after 1946 we were going to have dividends of only half of what we had been counting on.”

Hardening Arteries. He began to look for a new machine for a relatively unmechanized market. A.M.F. got the patent rights for a crude model of a pinspotting machine from Fred Schmidt, the inventor, even though nobody before had ever succeeded in perfecting such a device. Finally, after 14 years, a satisfactory model was produced.*

But when the pinspotter was well along, Patterson saw that one more royalty-producing machine was not enough. The wild swings of the machinery industry had to be counterbalanced with some consumer products. Furthermore, A.M.F. was shocked to discover that it was not good enough to get prime war contracts, but only subcontracts. The average age of the engineering staff was 55 years by war’s end. Said Patterson: “Small companies in that position have died of hardening of the arteries.”

In 1948 A.M.F. began to diversify with a vengeance, sending scouts around the country to find companies for sale. A.M.F. investigated more than 400 companies, bought nine, mostly by trading A.M.F. stock: Transducer Corp. (radar, electronics engineering), Union Machinery Co. (baking equipment), DeWalt, Inc. (radial arm saws and homecraft power tools), Cleveland Welding Co. (“Roadmaster” bicycle, second largest seller in the U.S.) Junior Toy Corp. (“Junior” tricycle, biggest seller in the U.S.), Sterling Engineering Co. Inc. (electrical relays), Float-Lock Corp. (drill press vises), Thompson-Bremer & Co. (lock nuts and washers, electrical terminals) and Leland Electric Co. (electrical motors and equipment).

Automatic Baker. A.M.F. not only got a wide range of consumer products but its engineering staff has expanded from 100 men in 1945 to 1,300 today, and is good enough to land prime defense contracts. Of the company’s $100 million backlog, 80% is in defense orders. Gross sales rose from $16,700,000 in 1946 to $105,800,000 last year, reached $106 million in the first nine months of 1953, half in defense orders. In almost every case, sales of subsidiary companies increased after A.M.F. took them over. And, though the company’s outstanding stock was increased when new shares were issued to buy up companies, earnings per share climbed from $1.05 in 1946 to $2.05 last year, will go higher in 1953.

But Patterson, now 56, is not through expanding, is still brimming with new ideas for new machines. The most startling: an automatic bread mixer which will take in flour, milk, etc. at one end, send loaves for baking out the other.

*The pinspotter has about 1,300 parts, about half of them moving.