Need for Cobol
With the advent of Fortran in the late 1950s, computer had definitely grabbed the attention of large organisation and companies. Computer had the potential of handling the business chores such as accounting, logistics and manufacturing operations. However the most powerful language then was Fortran which was designed for engineering and scientific problems. There was a need for a new language inclined towards solving the common business problems.

The Initial Competition
With the immense success of Fortran one thing as sure that the company which would develop a business language first would have an big marketing advantage even if it was distributed free as IBM did with Fortran. Realising this fact two companies had put their efforts in developing a new business language in 1959 namely - Sperry Rand's UNIVAC division with its Flow-matic and IBM which was just beginning its work on Comtran ( Commercial Translator ). With two big companies announcing their plans for developing their plans for business data the market was in state of uncertainty.

The Collective Approach
Mary Hawes, a programming manager at Burroughs suggested a collective approach to build a standard for designing a business language. She along with Saul Gorn ( a professor at University of Pennsylvania ), Grace Hooper ( who was leading the development of flow-matic) and other representatives of small groups of customers and manufacturers approached the director of data systems research at Defense Department - Charles Philips, so that Pentagon could lead the collective undertaking. In late May, at a meeting conducted at Penatgon some broad guidelines were drawn for developing a new language standard, the most important of which was "maximum use of Simple English".
In June, a "short-range committee" comprising of executives from corporate users like U.S. Steel, Dupont, Esso in addition to pair of advisers from computer industry: Hopper of Sperry Rand, Rovert Bemer of IBM and Jean Sammett ( a seasoned programmer) was formed. This body was assigned the task of designing and detailing the new language within three months.

The "Common" Language
The committee had to streamline the efforts of all the major companies and recommend a "short range composite approach" for developing a business language. This involved blending the work of three existing business-language projects: Sperry Rand's Flow_matic, IBM's Comtran and Air-Force led version called Aimco. At a meeting on September 17 names for the new language were being discussed. Six names were suggested including Busy ( Business System ), Infosyl( Information System Language ), Datasyl( Data System Language ) and Cocosyl ( Common Computer Systems Language), but none seemed right. So Bemer suggested COBOL. "Grace said, 'OK', sounds good to me" Bemer recalled "There was no real debate about it".The next day, COBOL was agreed as a catchy contraction of COmmon Business Oriented Language.

After stretching the initial deadline of three months to six months this committee was able to present a technical specification of the new language in December 1959. Cobol did an important improvement to field of programming languages, in the realm of how the data is described and represented. And that, in turn, contributed to the development of database technology. Cobol, for example included a feature called "picture clause" which enabled data to be described in hierarchical tables.
COBOL was designed keeping programming for non-programmers in mind. Using Cobol one could write out instructions in what appeared to be natural-language statements like: 


However, Cobol fell short of its promise of "programming in English". " COBOL was just as fussy and unforgiving as any other programming language", Don McCracken (a computer book author) observed. Business executives never had the inclination to read the Cobol code written by their technical staff. Professional programmers soon adopted the mnemonic abbreviations for their code, shunning the verbosity of writing out English words as if sentences.
Success of COBOL

From the outset, COBOL got little respect from the academic community but the criticism had little impact on its acceptance. Because it was mainly in english and easy to learn. The United States Department of Defense - by far the largest purchaser of computers - oversaw the design of Cobol and, after it was created, the government announced that it would not buy or lease computers unless they spoke Cobol. 

"Cobol did hierarchical data layouts very well, and that wasn't even a gleam in the eye for FORTRAN or Algol"
Brian Kernighan