700 - THIS CLEVELAND OF OURS It was a difficult time for automobile financing. As "Men, Money and Motors" records : "Public opinion was prejudiced. Mechanical imperfections were numerous. High prices prevailed over a relatively low per capita income. There were inadequate service facilities. Bad roads were everywhere. Capital was unfriendly. The principal force working for the development of the industry was curiosity in this new form of transportation. Manufacturers intrigued that interest and curiosity by holding hundreds of track and road races. The public thought little of a car unless it could beat another car, and it is fair to assume that without these races the industry would have passed through a much longer experimental period before coming into public acceptance." The Ford capitalization was to be $150,000, with $100,000 subscribed and paid. As a matter of fact, there was only about $28,000 actually paid in. The principal stock-holders were Henry Ford, with 255 shares; A. Y. Malcolmson, a coal dealer and patron of Ford's, with 250 shares; John S. Gray, a banker, with 105 shares ; John F. Dodge and Horace E. Dodge, makers of automobile parts, each 50 shares; James Couzens, a coal man employed by Malcolmson, 25 shares. Gray, the largest cash investor, put in his $10,500 only on condition that he could get it out whenever he wanted it. Couzens had $900 cash, to which his sister Rosetta, from a savings account of $200, added $100; for the remaining $1,500 Couzens signed a note, endorsed by Ford and Malcolmson. Ford and Malcolmson's contributions were represented by patents granted and applied for, plus machinery valued at $10,000 and $1,000 worth of contracts. Ford was to do the inventing and engineering and Couzens to run the plant, the former getting a salary of $3,000 a year and the latter $2,500. The car was to sell for $850 complete, spot cash, with 20 per cent selling commission. Ford was thirty-nine years old and apparently had never made more than $1,000 a year. This new enterprise attracted little attention. Automobile companies were springing up like mushrooms, and vanishing as quickly. One might call a long roll that would be as THE CITY'S WEALTH AND POWER - 701 dead as the catalogue of Homer's ships. Durant's Buick was newly born, to join Winton and Packard and White. There were Auburn, Overland, Studebaker and Pope and Marmon, and a few other less sturdy infants whose names still mean something. But Ajax, Aerocar, Buffalo, Buckmobile, Ben Hur, Conrad, Cincinnati, Comet, Duer, Durocar, Fredonia, Hewitt, Iroquois, Milwaukee, Mohawk, Niagara, Rambler, Sandusky, Steamobile and scores of other ambitions pioneers, —where are they now? During the five years from 1902 to 1907 there were not leSs than 322 automobile companies organized, and during the same period 287 companies perished. The panic of 1907 wrought havoc among the weaklings. A little later, in the depression of 1910, manufacturers went out of business at the rate of one a week. Ford somehow survived the. slaughter. The first year his business paid 100 per cent dividends. In 1906 Ford and Couzens bought out Malcolmson for $175,000, and Ford and Couzens together bought out four minor stockholders, leaving Ford in control with 58 per cent of the stock and Couzens with 11 per cent. But we are getting a little ahead of our story. Returning to Cleveland, where we left Alexander Winton building primitive little cars of attractive appearance and excellent quality for their time, we find his immediate successor in commercial production of gasoline cars, Paul Gaeth, who in turn was followed by twenty-four manufacturers. This is not a very important name in automotive history, but an interesting one to Clevelanders. Gaeth started building cars in 1898, at the age of twenty-two. He began with a one-cylinder car, then proceeded to two, three and four cylinders. Of his three-cylinder cars there were only two made, one for himself and the other for Charles F. Keys, a West Side insur-ance man. Keys' car had a rear entrance. In his own car Gaeth had a side entrance, the first of the sort seen in Cleveland. He built in all only about 300 cars, but they were good ones, almost completely hand-made. That, says a local news-paper man, is why they lasted so long and why they Made so little money for the manufacturer. 702 - THIS CLEVELAND OF OURS Gaeth's plant was on West Twenty-fifth Street near the Nickel Plate tracks. He went out of business in 1909, then returned, but built no more new cars, contenting himself with rebuilding. and repairing old ones, in a garage and shop on Abbey Avenue. He remarked in 1932 that he could still make a car if he wanted to, but there was no money in it. Until a few years before Gaeth drove one of his old cars, with the gear-shift outside. There were still two Gaeth cars in the city, one made over into a truck and out of commission, but the other, a 1908 model, still in use. It was owned by a Lakewood resident who, Gaeth explained, could afford to drive so old a car. Gaeth was still making replacement parts. Next comes White, third Cleveland automobile maker and a large part of the local motor story. In 1859 Thomas White, .twenty-three years old, working in a Massachusetts chair factory for $1.25 a day, obtained a patent on a little hand sewing machine and began making and selling it. Instead of trying to make and sell a great many, he built a few and made each as nearly perfect as possible. The reputation of his machine grew. He moved into a larger factory; then in 1866, observing the westward movement of population, he decided to come farther west himself. He selected Cleveland as the strategic center for his business, set up a factory on Canal Street and for the next ten years made sewing machine heads. Then he organized the White Sewing Machine Company, manufacturing and selling complete machines. The White company, like other Cleveland concerns, as manufacturing developed in scope and variety, began to feel the need of lathes and screw machines, so it proceeded to make them itself. Better manufacturing machines brought new opportunities for their use, and when roller skates appeared, White began to make them. As roller skates led to bicycles, in an age determined to go about on wheels, and the "safety bike" replaced the old and perilous high wheel, White turned to that. For several years during the 'nineties, he made 10,000 bicycles a year, and his cycles became as famous as his sewing machines. THE CITY'S WEALTH AND POWER - 703 The first motor cars, made by Winton and Gaeth, began snorting around the streets, feeling their way through the horse and cycle traffic, and the White family with its usual flexibility, while holding its old lines, swung also to the new. There were now three sons, Windsor T., Rollin H. and Walter C., associated in the business. Steam, for the time being, vvas the thing. Rollin White, seeking to build a better steam automobile than the English, masters of steam locomotion, had produced, invented his new flash boiler ; his family began production of the Stanhope. The father, for the most part, stuck to his sewing machines and let the boys do it. This work for the new age, he felt, was theirs. The result was the first successful, and most successful, steam motor car in America. It was regarded, however, as a side line of the family's fundamental business. While other pioneers, apparently, were thinking only of carrying people, the Whites were thinking also of carrying goods. Their idea included not only horseless carriages but horseless wagons. Thus one of the first White cars produced, and the one which was sold first, had a truck chassis. This fact was prophetic. The reputation of the White company itself recommended their car and gave a push to the infant automobile industry. In six months it was producing three cars a week. Windsor T. White, the eldest son, who was vice president of the sewing. machine company, assumed the administration of the new business. Rollin operated the plant, a small building outside of the main factory. Walter, aged twenty-five, who had emerged from a scientific course at Cornell, gone into his father's office as bookkeeper, sickened of such work, studied law and had been admitted to the bar, and then decided that "the law was not an exact enough science," had begun to wonder whether he was good for anything. While Rollin was working on his steam motor, Walter joined him in the shop. First he tested engines, then built them. When production was well under way, he was sent to England, primarily to sell patents, secondarily to sell cars. At that time he knew nothing of salesmanship. But people liked him and 704 - THIS CLEVELAND OF OURS became interested in his car. He sold one to the Prince of Wales. He carried mail in a White car to show the British government that it could be done, and was offered a five-year contract. In 1904 he returned home and assumed charge of American sales, soon becoming also what might be termed demonstrator-at-large. The White car had been participating, with much success, in the public contests that played so great a part in popularizing motor cars. As early as 1901 four White Steamers had made a reliability run from New York to Rochester with a perfect score. In the same year a White car made a new track record. In 1902, when trucks were still regarded as impractical, five White trucks made a perfect record from New York to Boston and return. The next year Windsor T. White as pilot drove a car from New York to Pittsburgh. After a notable series of victories in reliability runs, continuous runs, sealed-bonnet events and Glidden tours, the White car won the Grand Prize at the world's fair in St. Louis in 1904. Webb Jay had done much of the driving. Walter himself took up the sport, and in 1905 made a record from Chicago to St. Paul. He was in one of the big Vanderbilt cup races, and as he said, "lost the race but got a lot of advertising." In Cleveland he beat the Cleveland made Stearns car, which held the national speed record, by six seconds. He won fame as a racer, but remained in the game too long, and in a race at Cincinnati broke his leg and was laid up for a year. He was thus forced back into executive work. By 1906 the production of White steam cars had attained an output of 1,500 a year. That seems a small production now, but at the time it meant twice as many large touring cars as were made by any other manufacturer in the world. The Whites' automobile business, conducted thus far as a branch of the sewing machine company, was considered grown-up. It moved from Canal Street into a home of its own on a site of twenty-nine acres at St. Clair and East Seventy-Ninth Street, occupying the first buildings of the present huge plant, and becoming the White Company, with Windsor T. White as president and Walter C. White vice, THE CITY'S WEALTH AND POWER - 705 president. Throughout this period it produced trucks along with passenger cars. In 1902, the second year of White production, there were 106 manufacturers in the country building steam cars, 40 building electric cars, and 99 making gas cars. Steam was far in the lead, but gas was gaining. In 1906 steam was still holding its own, but the alert Whites were experimenting with gas engines. They held broad patents on their steam car which gave them an advantage in that field. But the field began to narrow rapidly. Competition became a fight not of one steam car against other steam cars, but steam against gas. The Whites, seeking to stem the current, offered to share their patents on liberal terms with any company desiring to produce steam cars. A few years before the offer would have been eagerly accepted. Now there was no response. The Whites quietly abandoned steam, bringing out a gasoline passenger car in 1909 and a gasoline truck in 1910, marking the doom of steam propulsion for American high-ways. This, many engineers and many motorists have agreed, was a pity. Nothing but electricity could match the simplic-ity and noiseless, clean, odorless, flexible operation of the steam car. The gas engine won, despite its defects, because it provided great, quickly available power, and was more convenient especially for winter use. The steam car is now extinct in America. Yet there are engineers who prophesy its return. It may only await a new motor. The electric car, too, was doomed to pass out, but more slowly. This type of car, more than either of the others, is to be credited to America. The first successful electric car on record was designed by William Morrison of Des Moines, Iowa, in 1891, and sold to J. B. McDonald, president of the American Battery Com-pany of Chicago. Its appearance in Chicago in the fall of 1892 was thus described by the Western Electrician: "The sight of a well-loaded carriage moving along the streets at a spanking pace with no horses in front and apparently with nothing on board to give it motion was a sight 706 - THIS CLEVELAND OF OURS which has been too much even for the wide-awake Chicagoan. It is most amusing to see the crowds gather wherever the ve-hicle appears downtown. In a number of instances so great has been the curiosity of those on the streets that the owner, when passing through the business section of the city has had to appeal to the police to aid him in clearing a way for his carriage. The mysterious quality of the electric car has always had a strong appeal. The steam or gas car was always visibly understandable. The silent electric, with no outward hint of propulsive power, was a perpetual wonder, and so remains to anyone who still retains capacity for wonder. Its immediate success with a public already predisposed in favor of anything electrical was natural. Only automotive engineers and inventors, the Wintons and Fords and Oldses and Whites, and their kind, could see beyond this obvious appeal to the de-mands of future transportation. The electric runabout was adapted to city use, but was limited to the city. It was the most comfortable, easily driven type of car built, and the most convenient for neigh-borhoods errands or social use. But it required pavements. It was a poor hill-climber. It was handicapped by its weight of storage batteries and limited in range by the necessity of frequent recharging. Nevertheless it outlived the steam car by many years, and a solitary Baker or Rauch and Lang Electric may still be seen occasionally on Cleveland streets. Nothing takes its place for the use of old ladies unwilling to do their driving from the rear seat. TRUCKS NOW COME INTO THE PICTURE White's pioneering in trucks was contagious. In the first years it had not occurred to automobile builders or to the public that there was a field for mechanical drayage. People bought cars for their personal use, not for commercial use, except for advertising. The first auto delivery wagon, built in 1896 for a department store in Providence, Rhode Island, cost more to operate than a horse-drawn wagon, but was effective in attracting public attention to the store. Thus THE CITY'S WEALTH AND POWER - 707 other firms began buying commercial cars and charged them to advertising. The Whites, however, intended their trucks for work, and adapted them to that end as rapidly as purchasers grasped the idea. Other manufacturers began to grasp it, too. It became clear that by the use of motor trucks, trade territory could be expanded, time saved and delivery cost reduced. Trucks became differentiated more and more from passenger cars, and multiplied. In 1904 there were manufactured in the country 411 trucks. In the next six years there were about 10,000 made. Then the truck really got its stride, and in 1911 alone production reached the same figure. By the opening of the World war the output was 75,000 a year. Automotive engineers and economists began to suspect that hauling goods might be even more important than riding around for pleasure. Thus began rivalry with the horse which ended in competition with the railroad, its range ever widening as roads improved. First the trucks were made by a few manufacturers of passenger cars. But soon this branch of the industry began to grow specialized, as exemplified by Autocar, Federal, Garford, Graham, International, Mack and various others, and finally by the Whites themselves. It is difficult to carry on in an orderly fashion an industrial narrative which is necessarily an Arabian Nights collection of a thousand tales. We turn now to the story of Studebaker, which began contemporaneously with the White episode and will merge with it later. Henry and Clement Studebaker, sons of a Pennsylvania blacksmith and wagon builder, grew up at Ashland, Ohio, whither their father had come in a covered wagon, and learned the paternal trade in a shop over whose door was carved the motto : "Owe no man anything, but to love one another." They moved to South Bend, Indiana, and there in 1852 established their own firm after the manner of their father, building wagons. There were two forges in their shop, and their joint capital was $68. Their brother, John M. joined them. He was lured by the California gold rush, and 708 - THIS CLEVELAND OF OURS they built him a wagon for the journey. Arrived in the gold country, he prospered by making wheelbarrows for prospectors and miners, returned after five years with $8,000 in nuggets, and bought out his brother Henry. Now, equipped with funds, the firm began to grow. Another brother, Peter, joining them, was sent to St. Joseph, Missouri, an assembling place for wagon trains, and made that a distributing point. Soon the fame of Studebaker wagons spread all through the West. The Mormons became good customers. They soon had branch houses in Salt Lake City, Portland and San Francisco. Their wagons were the first western railroads. During the Civil war they supplied wagons for the Union armies. In the Boer war they did likewise for the British armies in South Africa. It was an inevitable expansion from wagons to automobiles. The Studebakers began in 1899 building bodies for electric cars. By 1902 they were making an electric car of their own, also a truck. Two years later they brought out a gasoline car. In 1911 they bought out the E-M-F Company, whose sales they had been handling, and acquired its new car. They organized the Studebaker Corporation. Thus, after two generations of wagon-making, they turned definitely to motor cars. They were now joined by Albert R. Erskine, one of the great figures of the motor industry. He came to Studebaker as an expert accountant. The corporation at the time had a capacity of 22,000 automobiles a year—and 150,000 wagons and buggies. Erskine began by separating the bookkeeping entirely from the other departments, because "salesmen and manufacturers are not accountants." In three years he was president, running the business. We shall meet him again. Perhaps the biggest event in the motor industry, after it was once under way, was the organization of the General Motors Corporation, though few realized it at the time. And the man who organized it was probably one of the two biggest men the industry has produced, William C. Durant. This may be admitted even though Durant, comet of the motor galaxy, was less a manufacturer than a financier. He has THE CITY'S WEALTH AND POWER - 709 always been a free lance, always unpredictable, always cutting up capers in Wall Street. Yet with his vision, brilliancy and daring., he has made valuable and permanent contributions to the industry. His full story, surely, would fill one of motordom's Arabian Nights. He, too, qualified with Studebaker as a carriage maker before turning to horseless carriages ; and the way of it was characteristic. Durant, a young man, moved from Boston to Flint, Michigan, worked in a little grocery store and then in his grandfather's mill. He was a laborer, machinist, inspector. Then in turn he became drug clerk, cigar store clerk, traveling salesman, insurance agent, real estate man and secretary of a private waterworks plant at twenty-five dollars a month. He developed a knack of handling men and selling things. He was facile, flexible and sudden. One day a stranger gave him a lift on the road in a two-wheeled cart that pleased him. He found that it was made in Coldwater, Michigan, boarded a train for that city and within twenty-four hours had bought the business for $2,000. He didn't have the $2,000, but little things like that never bothered Durant. A friendly hardware clerk put up $1,000 and the Durant-Dort Carriage Company was born. Durant was then twenty-five. The year was 1886. Dort made the vehicles and Durant financed and sold them. In a few years they had fourteen plants and were producing 150,000 units a year, a record never equaled in the world up to that time. In that business Durant got his training for the bigger game. He failed in a bicycle venture, then, in 1903, took hold of the Flint Wagon Works, the oldest plant in the city, which had bankrupted itself trying to make a horseless carriage. He raised half a million and started his automobile career, determined to repeat his triumph with horse vehicles. His car was the Buick. His production was 16 cars the first year, 28 the second, 627 the third and 2,295 in the fourth. Durant was now sure of his destiny. He started a great expansion program, raising money, selling stock, extending his plants, putting thousands of men to work. He began buy- 710 - THIS CLEVELAND OF OURS ing other automobile companies, struggling in the depression. There was nothing small about his ambition. He was going to dominate the automobile industry. He would consolidate everything, doing with Motors what had been done with Steel seven years before. He went to George W. Perkins, of J. P. Morgan & Company, who had organized the United States Steel Corporation, and broached his plan for an International Motors Company. The bankers agreed to underwrite one-third of the new capital required. Then they withdrew because Durant would not ask the consent of his own stock-holders. Durant smiled, as always, and proceeded to organize the General Motors Company. The incident made little stir. Automobile companies were making and breaking in rapid succession, and going cheap. The entire capital involved at first was only $10,000,000, but Durant had added to his Buick the Cadillac, Oldsmobile and Oakland. He proceeded to add others with such rapidity, by his financial legerdemain, that by 1910 he had more than twenty companies, most of which have long since passed out of existence. He also acquired some potentially valuable lamp and accessory companies. He improved and expanded the plants and borrowed incessantly. Then, needing $15,000,000 to avert bankruptcy, Durant was forced from control of General Motors. Banking interests took hold of his company, to handle it through a voting trust for five years. Durant calmly went back to Flint, rallied a group of associates and bought a car known as the Republic, designed by a French racing driver, Louis Chevrolet, establishing an assembly plant at Tarrytown, where New Yorkers could see it. He began making money with it, and in 1915 was ready for a coup. The end of the five-year period of the General Motors voting trust was approaching. Durant made an alliance with Pierre S. du Pont and John J. Raskob, incorporated his Republic company as the Chevrolet Motor Company with authorized capital of $20,000,000, sold a few millions easily, then began offering General Motors stockholders Chevrolet THE CITY'S WEALTH AND POWER - 711 certificates in exchange for their holdings. They responded, with faith in Durant's wizardry. Chevrolet capitalization was raised to $80,000,000 common stock, and the trading went on with growing momentum. General Motors stock had started rising on the market, as du Pont and his asso-ciates quietly began buying. It had been as low as $24 a share. During the year 1915 it rose steadily until it passed $500. When the five-year period ended, there was no re-newal of the voting trust, as the directors had intended. Du-rant had 450,000 shares of the stock, a majority. An impossible thing had happened. A little, almost unknown car had swallowed General Motors. Durant was back in the driver's seat. He began another career of expansion which made the previous one look like child's play. Meanwhile another Cleveland car, the Chandler, had been born. It created a sensation at the Chicago automobile show in 1913 with. its handsome body and efficient, six-cylinder motor. The Chandler Motor Car Company, organized by F. C. Chandler, continued successful production for many years. Then came the Jordan, in 1916, introduced by Edward S. Jordan who had been a Cleveland newspaper man. Impressed by Fred Fisher's famous remark about the automobile saturation point—"There isn't any; they won't walk !"—he obtained financial backing, planned the Jordan car, produced it in this city and became a prominent figure in the industry. His car started with a Continental engine, Timken axles, multiple-disc clutch, Bosch magneto, two-unit starting and lighting outfit, Stewart vacuum tank, Stromberg carburetor and other modern equipment. The Cleveland car appeared in 1919, as a companion of the Chandler, another "six," selling in the medium price range and popular here for some years. The last contribution in the local field was the short-lived Rollin, put out by the Rollin Motors Company in 1923, the work of Rollin H. White. It was an ultra-modern car, with a small bore, long-stroke, four-cylinder engine, balloon tires, four-wheel brakes and numerous other mechanical improvements. But it lasted only two years. 712 - THIS CLEVELAND OF OURS Early in the century the Selden patent became an important factor in the industry. George B. Selden, the Rochester patent lawyer, had applied for his patent--covering engine, clutch, gear-shift, reverse mechanism and differential—away back in 1879, shortly after Otto had made his gas engine in Germany, but before Benz had adapted it driving a vehicle. For many years he had merely watched motor develop-ment and bided his time. When his paper-invention was perfected and his patent was granted, in the strategic year of 1895, he sought to take advantage of it. Winton, Olds, and the other pioneers ignored him. In 1900 he sold control of his patent to William C. Whitney's Electric Vehicle Company, which proceeded to enforce its claims. The company moved immediately against the Winton Motor Company of Cleveland, alleging infringement. Winton fought the suit and lost it in the United States District Court. He appealed, to sustain whatever technical rights he might have, but also took the practical action of joining nine other companies to form the Association of Licensed Automobile Manufacturers, whose members agreed to pay a royalty on all the cars they made. Selden got a share of this royalty, and prospered. But the manufacturers rebelled at the tribute they were paying, and finally had it reduced to a fixed sum of $150,000 a year. From the saving, they created a war fund to fight the patent. A few manufacturers refused to pay, chief among them the Ford Motor Company, operated by Henry Ford and James Couzens. The latter, writing to the Cycle and Automobile Trade Journal, boldly declared : "We intend to manufacture and sell all the gasoline cars of the type we are constructing that we can. We regard the claims made under the Selden patent as entirely unwarranted and without foundation in fact. We cannot feel that Mr. Selden has ever added anything to the art in which we are engaged. We believe that the art would have been just as far advanced if Mr. Selden had never been born, that he made no discovery and gave nothing to the world. Our Mr. Ford is one of the pioneers, as he built the third gasoline automobile machine in the United States." THE CITY'S WEALTH AND POWER - 713 The natural result was an immediate suit against Ford and his associates, who organized as the American Motor Car Manufacturers Association. The federal District Court decided against them in 1909. Ford's associates all deserted him. He stood fast, and appealed to the Circuit Court of Appeals. Then in 1911 this court announced that the Selden patent, while valid, did not apply to Ford's engine, which was of the Otto type, against whose manufacture there was no legal obstacle. As it happened, American gasoline cars in general fell into the same class, using the Otto principle, rather than the Selden, so they were all freed from Selden control. They promptly stopped paying tribute. This good fortune led to a more important step. When the Selden patent expired in 1912, the Association of Licensed Automobile Manufacturers became the Society of Automobile Engineers. Every company had been using its own independent processes. Engineers and designers decided that it was for the good of the industry to set up standard specifica-tions for materials and so far as possible to standardize parts, while leaving designers free to follow their own ideas in utilizing the materials and parts. Thus a great number of almost similar products, varying only enough to cause infinite trouble, were reduced to a few standard products, permitting mass manufacture and general use, with lower cost. Parts became largely interchangeable. Thus became possible the "assembled car," set up with many parts made in many factories, in contrast with the pioneer type of car made slowly and laboriously, all in one shop. The next obvious step was the development of automatic machinery to make the parts. The way was being cleared for big production. Still another step remained, unprecedented in industry. This was the pooling of patents. It was not to be expected that basic patents would be shared with competitors ; but there were many important non-basic patents whose surrender, by helping the development of the industry in general, might bring to individual patent-holders more benefits than they lost. The revolutionary idea was urged by Charles C. Hanch of the Nordyke and Marmon Company, maker of 714 - THIS CLEVELAND OF OURS the Marmon car, who had seen the flour milling business crippled by patent disputes. The industry was soon convinced. In 1915 there was organized the National Automobile Chamber of Commerce. This enlightened body cross-licensed to its members all patents gained by any of them, except patents which covered body design or which made radical changes in mechanism. Thus all minor improvements were available to all members. This arrangement, still continued, has been one of the reasons for the rapid and vast expansion of the industry. The unexampled success of this industry has possibly been due less to its unexampled opportunity than to the intelligence and cooperation of its leaders. Ford, however, always a law unto himself, remained in-dignantly aloof from the manufacturers who had failed to stand by him in his Selden patent fight, and whether by his own genius or the impetus of the industry, grew with spectacular rapidity. After that first year ending in June of 1904, dividends by the Ford Motor Company were bettered until the original 100 per cent looked petty. When Ford obtained a controlling interest in 1906, with Couzens next, success continued without interruption, in spite of occasional mistakes. One of the mistakes was yielding to the temptation of bringing out an expensive car in spite of Olds' demonstration and his own experience. It was, however, a yearning for speed rather than elegance that betrayed him. In 1907 he produced Model K, a six-cylinder automobile selling for $2,800. It was soon discontinued. In the same year Ford and his associates, to balance their six-cylinder experiment, had organized another company to build motors for Model N, a four-cylinder car to sell at $500. It gave way in 1908 to the famous Model T, of which 15,000,000 copies were to be sold. Likewise in 1908 Ford's first tractor was built. He had begun to think of applying- the gas motor to farm machinery. It took several years to work out that problem and develop a tractor to the production point. The next high light in the Ford story was January 5, THE CITY'S WEALTH AND POWER - 715 1914, in the dull business period which preceded the World war, when Ford astonished the world by announcing a minimum wage of five dollars a day in his plants, for men who had been earning less than half that much, and proportionate advances in the higher brackets, with a reduction of working time to eight hours. It was Couzens' idea, but Ford made it his own and did the talking. The new rate was to apply to 15,000 men, plus 5,000 that were to be hired in addition to take care of the increased demand expected for Ford cars : "We believe," Ford explained, "in making 20,000 men prosperous and contented rather than follow the plan of making a few slave drivers in our establishment." At that point began a new career for Ford, in the role of a social reformer and economic monitor. At the time he was quite modest about his amazing innovation. Talking with the writer of this chapter in New York, immediately after his public announcement, when the world was buzzing with comment and competitors and industrialists generally were angrily condemning such "socialistic" action, Ford said : "Socialism? I am not sure I know what that means. I want my men to have good wages because they deserve it. It is mostly labor that makes industrial profit, and labor should have its rightful share. I know how that is, because I have been a worker myself. I am just a mechanic who happens to have made good." Ford assets at the time were figured at a little over $35,000,000, about 30 per cent being cash, with $57,000 for patents and no allowance for good will. Of the balancing liabilities, the main item was $28,000,000 surplus. Ford followed by instinct Rockefeller's advice to Carnegie, "keep strong in cash." Ford, more than any other manufacturer or group, exemplified the principles of standardized parts, product and service, straight line production and mass output. His low-price range fitted the economic need. Wherefore he took the leading position in the motor market and held it for many years. In 1918 its output rose to 60 per cent of the national production. In 1919 Edsel Ford succeeded his father as 716 - THIS CLEVELAND OF OURS president of the Ford Motor Company and the Fords acquired all the minority stock, at a cost of more than $100,000,000. In 1926 they refused to sell for $1,000,000,000. Ford's business has always been of great importance to Cleveland, because of the market he afforded for our city's enormous production of automobile parts. After Ford and General Motors, the leading producer of motor cars for some years was Willys-Overland, with head-quarters in Toledo, taken over from the Pope Toledo Company, and with a closer relation to Cleveland through its subsidiary Edwards-Knight Motor Car Company in Elyria, pur-chased in 1913. Through its large plants and various subsidiaries it became one of the most nearly self-sufficient producers, with an output of varied automobiles, trucks and tractors, acquiring the latter from the Moline Plow Company in 1918, and dabbling for a short time in airplanes. It pioneered in bringing to America the small European type car, in its Whippet model. Latterly, third place in the industry has been attributed to Chrysler. Walter P. Chrysler is the man who, when working in a railroad locomotive shop in Oelwein, Iowa, went to the Chicago automobile show in 1905 and was so fascinated by a $5,000 car that he bought it and had it sent home, when all he had in the world was $700. He learned about automo-biles by taking that car apart and putting it together again forty times. He landed eventually in General Motors, became first vice president and head of its Buick unit, left after the post-armistice slump to help Willys-Overland, was lured then to Maxwell-Chalmers for first-aid work, brought out his own car in 1924, and four years later achieved the triumph of acquiring Dodge Brothers. John F. Dodge and Horace E. Dodge were the two sturdy brothers, makers of automobile parts, who had invested $5,000 apiece in the Ford Motor Company in 1903 and started making parts for Ford. They broke with him in 1914 and produced their own car, with the success that the world knows. After their death their widows, in 1925, sold the business to Dillon, Read and Company for $146,000,000. Thence, three years later, it went into the THE CITY'S WEALTH AND POWER - 717 Chrysler bag. In 1932 Chrysler was energetically pushing Dodge, Chrysler, Plymouth and De Soto. The tractor was the slowest of all our present forms of motor car to be developed. It was pioneered mainly by Henry Ford. The experiments that began in 1908 did not bear fruition until nine years later, under the stress of war. England, threatened with starvation in 1917, sent an emergency call for tractors to break up the grass land and plow for wheat. The "Fordson," invented by Henry Ford himself, was almost ready for production. The company got a contract for 5,000 tractors at $700 apiece. Shipment started immediately. There were only 254 tractors made in that year, but quantity production quickly followed. Willys and other manufacturers were now taking up this new line. The war made tractors imperative not only for agriculture, but for military operations. The "caterpillar," appearing. as the war advanced, was invaluable for dragging guns or supplies over soft or rough land. Toward the close of the conflict appeared a remarkable variety of this invention, the armored tractor, a mobile fortress, armor-plated, equipped with guns and ammunition, running on wheels or moving belt of steel plates, and capable of attack over almost any terraine against almost any obstacles. "If it were ever truthful to call the automobile the 'horse-less carriage,' " says Malcolm Keir in his "Manufacturing," "then with equal veracity we might refer to the tractor as the 'mechanical horse.' In reality, a tractor does much work of which no horse is capable. "A tractor is a moving power plant. It may be employed to push or pull loads or to drag many kinds of machinery after itself. On the other hand, it can be blocked in a stationary position and its power used to saw wood, cut ensilage, pump water, or almost any other job imposed upon a stationery engine. Equipped with wheels, a tractor can go wherever a wagon may be operated. When it is fitted with a continuous tread, there is almost no kind of ground a tractor cannot traverse. The maneuvers a skilful driver can execute with his machine pass the bounds of belief. 718 - THIS CLEVELAND OF OURS "Beyond all other markets, the farm is the best customer for tractors. There it may plow, pull stumps, haul rocks, draw wagons filled with anything a farm needs or produces, run a sawmill, grist mill or electric lighting plant, fill a reservoir with water, or milk a cow. But the tractor is equally valuable to men engaged in forest enterprises or in mining operations. Public highway departments have found it valuable for road-making or repairing, while country clubs have rolled greens and tennis courts and cut grass with tractors. Indeed, the tractor is more marvelous than the automobile, whose child it is." Tractor history, he concluded in 1928, was "yet to be made." Some of it is being made today by the Cleveland Tractor Company, with its plant in the suburb of Euclid. Its "mud horses" are scattered from the mountains of Washington and Oregon to the alluvial plains of Russia, from Hudson Bay to Argentina, doing work that the narrow-hoofed, long-legged horse produced by Nature could never do. This local institution is the second largest maker of crawling tractors in the country. But again we are getting ahead of our story. Here is what the ante-bellum period accomplished : In 1900 there were 4,192 passenger cars produced, worth $4,899,000, and no trucks. In 1905 production was 24,550 passenger cars and 450 trucks, together worth $40,000,000. In 1910 it was 181,000 passenger cars and 6,000 trucks, together worth $225,000,000. In one year, 1909, annual in-crease was over 100 per cent. In 1915 the total was 895,930 cars and 74,000 trucks, worth $701,778,000. This was normal growth, though the 1910-1915 figures were doubtless raised a little by early war demands. Then came the deluge of war orders, and in 1917 the United States made and sold 1,745,792 automobiles and 128,157 trucks worth all told $1,274,000,000. Was there ever in history such growth in any industry? We pause here to consider one of Cleveland's war contributions. There had been a connection between the White THE CITY'S WEALTH AND POWER - 719 Company and the army ever since Walter C. White's early racing days, when he provided three "steamers" for General Corbin in the Virginia maneuvers of 1904. That is said to have been the first time the automobile was ever recognized by American army officers as a useful appurtenance of war. White cars became regular army staff cars. White gasoline cars succeeded steamers in this function. White trucks began their actual war record in 1912, when they served American troops in China, and were used the next year in Haiti and Santo Domingo. They constituted the motor train sent into Mexico with the Pershing expedition, and were used by the American Army along the Mexican border in 1914. When the World war broke out, the French government promptly ordered 600 White trucks. Other orders from the Allies followed rapidly. When the United States entered the war, it adopted the two-ton White truck as Class A standard for the army. The White truck fleet was awarded the Croix de Guerre by the French government for its service. Altogether there were 18,000 White trucks in the armies of the United States and the allied powers, without counting the thousands of automobiles and trucks serving in other ways essential to the war. In 1918 the United States government alone took the entire production of the White factory until the signing of the Armistice. Returning to a peace basis in 1919, the company discontinued its passenger cars, concentrating on trucks. In the same year it began publishing its interesting honor roll of trucks that had been operated from 100,000 to more than 300,000 miles, a new demonstration to doubting champions of the horse that the truck was really practical. Later records of individual trucks surpassed 500,000 miles. The war contribution of the Chandler Company, in trac-tors, has been told in another chapter. The war gave the youthful motor industry its first big boom. Motors had become a billion-dollar industry. Yet this was only a new beginning, to be far surpassed in peace time. After a slight drop in 1918, the curve started rising again, in 1920 reaching 2,227,000 units worth an av- 720 - THIS CLEVELAND OF OURS erage of $1,000 apiece. Another brief slump during the depression of 1921, then an upward swing that brought the record-breaking total of 4,180,000 in 1923, worth less per unit (here was a deluge of cheap Fords), but selling for $2,592,000,000. The new level continued during the great prosperity wave, for several years, before making a new record of 5,621,000 cars and trucks valued at $3,576,000,000 in the climacteric year of 1929. The automobile in three decades had become the greatest of all industries. This vast growth in production was accompanied by high mortality among manufacturers. Companies shrank in numbers as they grew in size and productivity. In 1927 there were hardly a score of cars that had been in the market more than ten years. Many had died, and many had been absorbed, during this age of mergers and holding companies. Two manufacturers emerged as billion-dollar corporations, becoming members of the select ten which included the United States Steel Corporation, the Standard Oil Company of New Jersey, the American Telephone and Telegraph Company and five railroad systems. The two giants were the Ford Motor Company and General Motors. The former of these was perhaps the most remarkable phenomenon in all industry—a one-family, and virtually a one-man, corporation. Couzens had left Ford, the Dodges had left him, others had been bought out or dismissed. But despite continual prophecies of disaster for this eccentric mechanic-inventor, Ford continued to expand production and accumulate wealth, weathering crisis after crisis, always eluding the "Wall Street money sharks" that sought to swallow him and his business. No other industrialist except possibly Rockefeller has attracted so much attention and discussion. He built new plants in and near Detroit and assembly plants in other cities until he could, and did, produce 8,000 cars and trucks a day. He made his Fordson truck plant the largest in existence. Deciding to make his own steel, he planted his heel in a marsh on the River Rouge, below Detroit, and announced : "Here we will build a new plant. Midway THE CITY'S WEALTH AND POWER - 721 between coal and ore—this is the place for a blast furnace." He would build foundries, glass factories, everything to make himself independent. "The tail of the Ford industrial plant will be at the Rouge," he said, "and the head at Dearborn"—five miles away. Soon his works covered 1,500 acres. He set up foreign branches in Canada, England and else-where throughout the world. He bought a railroad and coal mines. He acquired the Lincoln car, to contrast with his "flivver." He built and operated lake freighters and a fleet of ocean ships. He developed, built and operated airplanes. He established a great rubber plantation in Brazil. He built a museum in Dearborn to preserve old American furniture, utensils and implements of all kinds, and recreated an old-time American village, school and all, as a living museum. He revived an old New England schoolhouse as a monument to Mary and her lamb. He worshipped the past and pointed new ways to the future. His fads, fancies and fights entertained the nation and provided an inexhaustible fund of publicity for his products. No one has ever been able to understand his enormous success. In 1932 it was uncertain whether his latest car, a small, powerful, V-shaped eight-cylinder model selling for about the price of his old Model T or his 1927 Model A, would succeed. After trying to defeat the industrial depression almost alone, he was relaxing his efforts—or waiting. General Motors had both profited and suffered under the brilliant and expansive Durant. He had brought in United Motors and numerous other companies. He had organized the Nash Motors Company and started it on the way to success. The General Motors group benefitted immensely from war orders. In 1920 it paid a dividend larger than any other ever paid except the war profit dividend declared by United States Steel. Then the bottom dropped out of business—also out of the market for General Motors stock. Durant organized a syndicate, threw in all his resources and bought frantically to stem the tide, but failed. Deeply in debt, he resigned. His place was taken by Pierre S. du Pont, with Alfred P. Sloan executive vice president. 722 - THIS CLEVELAND OF OURS Durant was soon organizing another company, and selling stock to hundreds of thousands of investors. His successors began anew building up their complex holding and operating company, with such good results that in a few years more they were leading. the world in production, beating Ford in his own field with the little car that had once absorbed General Motors, and paying fabulous dividends. Sloan became president and inaugurated teamwork among the varied units, which in 1927 consisted of Cadillac, Buick, Oldsmobile, Oakland, Pontiac and Chevrolet, with a line of trucks and taxi-cabs, and ownership or control of fifteen accessory companies, including the great Fisher Body corporation. Latterly it has acquired La Salle, and has branched into individual home light and power plants and electric refrigeration. This remarkable corporation, with plants scattered over the United States and Canada, with more than two dozen major divisions and as many sales organizations, is a good example of family unity combined with individual freedom. The different divisions are largely autonomous, competing not only in the general market but with each other, and buying where they choose, much in the manner of the dissolved members of the old Standard Oil Trust. Each does its own advertising. The policy seems to be all for each, but not necessarily each for all. In 1925 the corporation as a whole passed Ford in the value of cars produced, though Ford still led in the number of cars. Since the Chevrolet passed Ford in production in 1927, the rivalry of these two light, popular cars has been of un-usual interest. In 1927 General Motors had net sales of $1,269,000,000 and net income of $235,000,000. In the latter years of the recent "boom," it has been a world wonder as a producer of profits. In the third quarter of 1932, after three years of unprecedented depression, it reported the first net loss since 1921, but was still paying dividends. Another group which may deserve to rank with the two industrial powers mentioned is the Fishers, even though it may not be literally true, as MacManus and Beasley declare, in their "Men, Money and Motors," that "if there had been THE CITY'S WEALTH AND POWER - 723 no Fisher Body, there could have been no General Motors." The seven Fisher Brothers are assuredly one of the most remarkable phenomena of business history. Like so many other notables of automobile fame, they had their origin in the carriage business. In the little town of Norwalk, Ohio, their father had a blacksmith and carriage shop, even as the father of the Studebakers had in Ashland. Fred J. Fisher, eldest son and leader of the brood, learned the business from his father. Four others in turn followed the same apprenticeship. They were joined in time by the other two, one of them a railroad man. These seven, operating as a family unit, and building up a vast business indispensable to the motor industry, inevitably suggest to Clevelanders the two Van Sweringen Brothers, who in their realty and railroad enterprises have functioned as a unit, being equal in authority and owning everything in common. The Fishers, however, because of their numbers, suggest rather the European Rothschild family. Fred Fisher quickly realized that motor cars must have bodies, and that it was a carriage-making job. He worked in the automobile industry in Detroit half the year for several years, spending the other half in the family shop at Norwalk. The little business grew. In the rush season he and his father would employ twenty-five men. Inevitably they began making automobile bodies, first of wood and then of steel. Fred became manager of a body company in Detroit. In 1908 he and his brother Charles organized the Fisher Body Corporation with a capital of $50,000. The other brothers began coming in, and the business grew, until in 1918 Durant, with his keen eye for able men and his genius for strategic moves, proposed to consolidate them with General Motors. Durant and Raskob together could not persuade them to surrender their independence. General Motors had to buy 60 per cent of their stock and let them continue managing their own business and selling bodies to other manufacturers, as long as they provided General Motors itself with all the bodies it needed. General Motors would buy only from them. Thus they were assured a good market, yet free to expand 724 - THIS CLEVELAND OF OURS elsewhere. It was an admirable arrangement for both sides. The resources of the seven brothers were estimated in 1930 at no less than $500,000,000, invested in a dozen important fields, making them one of the world's big financial forces. MacManus and Beasley rate the Fishers as "almost undeniably the greatest of all the great figures which the whirling wheels of the motor car have produced." And with all their success, as plain and unassuming as most of their 50,000 or 60,000 employes. They and their achievement are of special interest to Cleveland, because of the local importance of their industry. Their plant at East One Hundred and Fortieth Street and Coit Road, employing several thousand men, is one of their own largest manufacturing units and the largest body-making plant in this city, where so many bodies are made. Reference to the Fishers leads naturally to the subject of automobile design. Here we find a form of art which deserves more attention than it usually receives. The present-day automobile is probably America's most distinctive artistic contribution to the world. This could hardly have been said of the first cars. Early builders, shutting their eyes to reality, made their horseless carriages look as nearly as possible like the old horse-drawn vehicles. Winton, Olds and the rest at first merely thrust an engine somehow into a buggy or carriage of some sort, keeping the accustomed lines as far as possible, preserving even the dashboard and whip socket. The motor was placed in front, or in the rear, or under the seat, as might happen. Wheels, springs and levers might stick out almost anywhere. Soon builders began trying to conceal the ugliest parts. But there was little effort to attack the problem freshly, from the standpoint of either beauty or efficiency, by suiting form to function. For that matter, the old buggies and carriages themselves had seldom possessed much real beauty—look at them today, in Ford's museum, and see! It is not merely strangeness that makes most of them look so ugly, but an essential lack of grace and proportion and often, indeed, of real fitness for their purpose.