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February 15, 2013

Historical Echoes: Bankers Behaving Calculatingly – with Slide Rules

Amy Farber

How do bankers do calculations? Currently, on the computer
(or calculator). What about before computers and calculators? If they couldn’t
figure things out using pencil, paper, and pre-prepared tables, they used slide
rules (and pre-prepared tables; see p. 188 of this 1887 book
of tables).


    
With a slide rule, very complex calculations are possible. It’s
primarily with the help of the slide rule that the United States was able to
send astronauts to the moon, according to a Smithsonian
National Air and Space Museum blog entry
. Note that the slide rule in that
story is circular—more on that later.

    
Usually, when we think of a slide rule, we imagine a long,
flat, rectangular gadget that looks like a ruler gone wrong. The International Slide
Rule Museum has a great
page of photos
of important people of all kinds using all types of slide
rules. Most of the slide rules in the pictures appear to be rectangular. A few
can be seen as round (like the one Peter Sellers is holding in the still from Dr. Strangelove). True, in all those 575
photos, there’s only one actual banker (Harry V.
Keefe, Jr.
, founder of Keefe, Bruyete, and Woods Investment Bank).

    
Although the first slide rule was invented in 1622 by William
Oughtred
, the different-looking (round) and more accurate type of slide
rule was developed in 1915 for use by bankers, accountants, and businesses. The
blog Calculating describes the
development of the Atlas 50-foot slide rule
:

Clair Gilson was a civil engineer and developed a circular slide rule for use by banks, businesses and accounting offices. This new form of a slide rule was patented by Gilson on October 19, 1915 and was considered far more accurate than the traditional straight slide rule.

    
In a 1999-2000 blog
entry
(scroll down to the big circle picture), the sociologist David D.
McFarland explains what makes a round commercial slide rule (called the
Commercial Calculator) different from others:

Unlike most slide rules, the Commercial Calculator has specialized capabilities that include calculations pertaining to loans and interest, which in turn require calendrical calculations such as the length of time between two specified dates. Accordingly it includes scales for Day Of Year (1-365), Month And Day (Jan 1-Dec 31), and Year (1900-1972).

    
He also likens the fact that his antique slide rule can only
deal with dates up to 1972 to the Y2K problem of computer coding being unable
to deal with dates after 1999 (thus producing his own version of a Liberty Street Economics “Historical
Echoes” blog post).

    
In a Smithsonian blog
post
about Charles
Babbage
—son of a banker, inventor of the difference machine, and
grandfather of the modern computer—the end of the slide rule era for bankers
and others is described:

Up until 40 years ago, engineers, navigators, astronomers and bankers used slide rules and books of tables to perform calculations. “The defining event which brought the end of the slide rule and the books of tables was in 1972, when Hewlett-Packard introduced the HP-35,” says the Computer History Museum’s senior docent, Tim Robinson. “This was the first hand-held, full-function scientific calculator that replaced all the normal functions of tables and the slide rule.”

    
Is it a coincidence that the antique slide rule could only calculate
up to 1972—the same year that the HP-35 was introduced?

Disclaimer
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.


Amy Farber is a research librarian in the Federal Reserve
Bank of New York’s Research and Statistics Group.

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