A Computer Called LEO: Lyons Tea Shops and the world’s first office computer

A Computer Called LEO

Lyons Teashops and the World’sFirst Office Computer

GEORGINA FERRY

1 A Mission to Manage

The clatter of machinery was relentless. Light fell through the high windows on row after row of workers, bent to their identical tasks; but this was no factory. This was the Checking Department of J. Lyons & Co. at Cadby Hall in West London, part of the vast clerical infrastructure that underpinned the operation of Britain’s largest food empire in its mid-1930s heyday. Seated at their desks in ruler-straight rows, the clerks tapped away at their Burroughs mechanical calculators, separated from one another by partitions erected to reduce distraction. The adding machines, solid constructions of steel and varnished wood, had up to a dozen columns of numbered keys to input the figures, and a crank on the side to sum the totals. Like a cash register, they printed out a record of the calculation on a roll of paper.

The three hundred clerks in the department, most of them girls not long out of school, had but a single job to do: to add up the totals on the waitresses’ bills from the two hundred and fifty-odd high street teashops run by Lyons, and to check them against the cash takings banked by the shops. A squad of office boys kept them supplied with sets of bills, received from the teashops that morning in locked leather bags and sorted into numerical and alphabetical order by the office juniors. The senior clerks and managers, invariably male, stalked the aisles between the desks in their sombre suits, ensuring that every fashionably waved head was bent to its task; it would be their duty to follow up any discrepancies revealed as the streams of numbers gradually unrolled.

The Checking Department was one of three central offices at Lyons supervised in those pre-war days by a young manager called John Simmons. Yet as Simmons surveyed the roomful of clerks and their clacking machines, all he saw was a waste of human intelligence. Punching a Burroughs calculator could be worse drudgery even than unskilled factory work for the girls who made up most of the workforce. At least on an assembly line, he mused, you could chat to the next worker or let your mind wander while you carried out a repetitive task. Mechanised clerical work demanded total attention, but granted no intellectual satisfaction in return. Simmons began to dream of the day when ‘machines would be invented which would be capable of doing all this work automatically’. Such machines would free managers such as himself from marshalling their armies of clerks, and allow them ‘to examine the figures, to digest them, and to learn from them what they had to tell us of better ways to conduct the company’s business’.

Within little more than a decade he had made that dream a reality by persuading the board of Lyons that their company must become the first in the world to build its own electronic, digital computer. This was not, as computer historian Martin Campbell-Kelly has written, merely ‘the whim of a highly-placed executive’. While occasionally unrealistic, perhaps even grandiose in his conceptions, Simmons was not a man subject to ill-considered whims. From his perspective, building a computer was not only logical and rational but essential to the good of Lyons and the efficiency of British business. Moreover, his idealism was not out of place in the Lyons corporate culture. Far from being surprising that the seed of business computing should take root and grow in Lyons before any other company in the world, in almost every respect it provided ideal conditions.

A Family Affair

To anyone who has lived in Britain for more than thirty years the name of Lyons is instantly recognisable. The fame of J. Lyons & Co. rested principally on its chain of high street cafés known as the Lyons teashops. Before the outbreak of the Second World War there were more than two hundred and fifty of them throughout the country, with the densest concentration in London. Oxford Street alone had six, while the closely packed streets of the City of London, the financial heart of the capital, revealed another teashop at almost every turning. They spread through the suburbs from Camberwell to Wembley; from Plymouth to Newcastle, provincial cities each had their own.

At its peak the Lyons empire also included grander restaurants and hotels in London and other big cities, including the legendary Lyons Corner Houses and the Trocadero; a food manufacturing and distribution business that not only supplied the teashops and restaurants but also delivered Red and Green Label Tea, Kup Kakes and Lyons Maid ice cream to grocers’ shops the length and breadth of the country; and a catering service for large-scale events including Masonic dinners, Buckingham Palace garden parties, the Chelsea Flower Show and the Wimbledon tennis championships.

How did a firm founded on gratifying English tastes for tea and bland, comforting food become a high-tech pioneer? Behind the Lyons shopfronts with their pyramids of iced fancies lay a manufacturing and distribution empire launched with immense commercial vitality. The Lyons of the early twentieth century was a young, progressive company, eager to adopt new methods in both manufacturing and management. The company was founded just as a wave of social and technological change was beginning to transform the world of business; for the first fify years of its existence, Lyons was riding the crest of that wave.

J. Lyons & Co. had its origins in a family tobacco business established in London by Samuel Gluckstein, whose father Lehmann Meyer Gluckstein had brought him and his seven siblings from their native Prussia to settle in London in 1841. Jewish immigration to Britain from continental Europe in the mid-nineteenth century stemmed from the discriminatory practices of a number of trade and craft guilds, which effectively excluded Jewish citizens from many profitable areas of work. German and Dutch Jews settled predominantly in the narrow, crowded streets of Spitalfields in East London, and it was here that Samuel Gluckstein first lodged with his aunt Julia Joseph. Samuel and his younger brother Henry started a small tobacco business in Leman Street, Whitechapel, in 1864 with their cousin Lawrence Abrahams, employing skilled local people to make cigars and cigarettes by hand. But the partners fell out among themselves and the company had to be dissolved in 1870.

A few years after arriving in London Samuel married his cousin Hannah Joseph, and by the 1870s they had ten surviving children. In 1872 Samuel started a new, small-scale cigar-making business in Whitechapel Road, in partnership with his sons Isidore and Montague and another tobacco trader, Barnett Salmon, who had married Samuel’s daughter Helena. Almost immediately their fifty-four-year-old father’s unexpected death from diabetes left the young men with responsibility for the welfare of a large extended family.

Still shocked at their bereavement, the three remaining directors met to decide how to proceed. Mindful of the feud that had destroyed Samuel’s first company, they shook hands on an extraordinary agreement. Adopting the motto L’union fait la force (strength in union), they placed the assets of the new company, Salmon & Gluckstein, in a family fund in which each of the sons and sons-in-law of Samuel Gluckstein had an equal share. While individual family members undoubtedly had greater or lesser influence in the years to come, the philosophy of collective family ownership and collective family decision-making proved extraordinarily durable. The family continued to hold its property in common until the early 1990s, sharing all the proceeds of the business equally and owning houses and even cars communally rather than individually. Pushed to think of an exception, a surviving family member says that he supposes he might have been allowed to keep his winnings if he had a lucky bet on the horses.

From small beginnings the company grew rapidly. To increase its profitability in the highly competitive cigar-making market, the directors opened a retail tobacconist’s shop in Edgware Road shortly after the company’s foundation. By 1894 there were thirty Salmon & Gluckstein shops throughout London. Three years later there were double this number, and by the end of the century it was the world’s largest chain of tobacconists with 140 shops.

The shops sold Salmon & Gluckstein’s own products – such as ‘Raspberry Buds’ and ‘Snake Charmer’ cigarettes – as well as cigars and cigarettes from other manufacturers. With Boots the Chemists, the stationers W. H. Smith and Barratt’s Shoes, the company was among the first in Britain to recognise that selling through multiple outlets gave it the bargaining power to drive down wholesale prices, and hence to inspire consumer loyalty by passing on savings to enthusiastic customers. It sold its products at aggressively competitive prices, leading to frequent protests from small, independent tobacconists who could not command such large discounts from suppliers. Salmon & Gluckstein also made extensive use of advertising (‘The more you smoke, the more you save!’) and of gimmicks such as cigarette cards, now collectors’ items, that could be saved up and exchanged for gifts. Their business methods occasionally verged on the unscrupulous: on one occasion they were successfully sued for continuing to label their cigarettes ‘handmade’ after they had introduced automatic cigarette-rolling machines. But while their competitiveness provoked indignation among their rivals, their success could only earn grudging admiration.

By the end of the nineteenth century the tobacco business in the United Kingdom was under threat from the United States. ‘Buck’ Duke, the uncrowned king of the American tobacco industry, had used factory automation, national advertising, price-cutting and takeovers to give his American Tobacco Company a virtual monopoly on the booming cigarette market in the United States. In 1901 he bought a British company, Ogden, and seemed set to wipe out all British competition in the same way. In some respects the situation mirrored the predicament of the British computer manufacturers sixty years later, and the tobacco industry adopted the same solution. In December 1901, thirteen of the biggest British companies, led by W. D. & H. O. Wills, merged to form Imperial Tobacco Ltd. In 1902 American Tobacco and Imperial Tobacco agreed not to compete in each other’s home territories, and formed a joint company, British American Tobacco, to market all their products overseas.

Salmon & Gluckstein had held on to their independence in 1901. But a year later they sold a controlling interest in their greatest asset, the Salmon & Gluckstein chain of retail tobacconists, to Imperial Tobacco. By that time, however, tobacco had ceased to be the main business interest of the Salmon and Gluckstein family.

Montague Gluckstein, though younger than his brother Isidore, was the driving force of the business and spent much of his time on the road promoting the company’s products at trade fairs and exhibitions around the country. Entrepreneur that he was, he used the time to think about new business opportunities. He told his story to the author William H. Beable, whose Romance of Great Businesses was published in 1926: ‘Any man moving about the country can, if he cares, pick up useful information upon the needs of the public, and he can then try to plan a way to meet them.’ It was Montague’s experience at exhibitions that ‘first brought home to me the dreary and standstill methods’ of the catering establishments he was forced to patronise.

The Great Exhibition of 1851, which took place in the Crystal Palace in Hyde Park, was the forerunner of a series of similar events mounted by major cities in the years that followed. They combined popular entertainment with the opportunity for businesses at home and overseas to promote their wares. They were the Millennium Domes of their day: the difference being only that they were hugely popular and successful. The Manchester Exhibition of 1887, for example, attracted five million visitors. But as he queued for an indifferent and expensive cup of tea, or ventured in search of a pie or a sausage in a neighbouring pub, the fastidious Montague Gluckstein reflected that as far as refreshments were concerned the exhibitions catered very poorly for their visitors, especially women and families. ‘The ordinary man visiting a strange town and wanting a meal had a choice between a public-house, where he would get cold meat, pickles and beer, or a coffee-house, with its dirty little horse-box-like compartments, untidy shirt-sleeved waiters, grimy tablecloths, bad food and worse smells,’ wrote Thomas Charles Bridges, describing Montague Gluckstein’s experience in his 1928 book Kings of Commerce.

Surely, thought Gluckstein, there was money to be made from offering people at least a good cup of tea when they were away from home? When, in the mid-1880s, he proposed to his brother and brother-in-law that they diversify into catering, they were slow to agree. They were concerned about the risks involved in a new area of business, one which, as Montague Gluckstein himself put it, was seen as ‘hardly the thing for people engaged in the aristocratic business of cigar manufacturing’. Eventually they concurred, as long as the catering venture was screened behind a different trading name.

The compromise was to find a partner to run the new venture who was almost family, but not quite. Joseph Lyons, an entrepreneur and salesman, was a distant relative of Rose Cohen, the wife of Isidore Gluckstein. Born in Southwark in 1847, Joseph Nathaniel Lyons had begun his working life as an optician’s apprentice, but his quick imagination and gift for selling had led him into a colourful assortment of other occupations. He invented a device called a chromatic stereoscope – a combination of telescope, microscope, magnifying glass and binoculars – and sold it for 1s 6d (7½p). He wrote detective stories, music hall sketches and songs, and was a moderately successful watercolourist. He was married to Psyche Cohen, the daughter of an entertainer who later ran the Pavilion Theatre in Whitechapel; his marriage certificate gave his occupation as ‘artist’.

Once the brothers had agreed that Lyons was their man, Montague Gluckstein went to meet him. At the time he was running a stall, probably selling his own artistic or technological creations, at the 1886 exhibition in Liverpool. ‘I went there for a night, that stall was closed down, and the terms of our arrangement I put on an ordinary sheet of notepaper,’ recalled Gluckstein. The deal they struck was that they would go into the catering business together as long as Joe Lyons could win the catering contract for a large exhibition taking place in Newcastle in 1887 to mark the Golden Jubilee of Queen Victoria.

Joe Lyons had no previous catering experience, and none of managing a business larger than a market stall. But he was cheerful, ebullient and persuasive, and he had the resources of a highly respected firm behind him. He won the contract, and he and his partners discovered, just as Gluckstein had supposed, that there was a vast, untapped market for the combination of style and good value that they felt they could offer. There was nothing tentative about the first venture into catering by J. Lyons & Co., the name adopted for the new company in 1887. Customers in the tea pavilion at the Newcastle exhibition were entertained by a Hungarian string band, they could choose from a varied menu and enjoy attentive service, and of course, they could wash their meals down with a pot of excellent tea for threepence (1¼p). ‘Out of that humble but very important trio, tea, bread and butter of the best kind sold at a reasonable price,’ reflected Gluckstein later, ‘the foundation was laid of what was afterwards to be the largest catering business in the world.’

Catering on a huge scale for exhibitions and similar temporary events was to remain an important part of the company’s activities for the rest of its existence, but the Lyons directors did not stop there. In 1891 Joseph Lyons raised the capital to mount a spectacular entertainment called ‘Venice in London’, complete with Italian gondolas on water-filled canals, at the Olympia exhibition hall in West London. The show ran for more than a year, and others followed. At the same time J. Lyons & Co. won the contract to provide all the catering at Olympia, a contract they held until 1978. The association with Olympia was a factor in uprooting the family firm from its East London origins. First, Montague Gluckstein moved from his flat above a tobacconist’s to a house in Kensington, next to Olympia. Then in 1894, the year J. Lyons & Co. was formally registered as a limited company, it moved its headquarters from Whitechapel to Cadby Hall, a former piano showroom and factory in Hammersmith Road, near to Olympia. Following the earlier model of the tobacco business, the company began to manufacture the products needed to supply its catering enterprises, beginning with bread and rolls from the Cadby Hall bakery. Within twenty-five years the site held a complex of red-brick factory buildings, erected fortress-like around a central yard; thousands of workers were employed on the site.