Henry Ford’s Own Story/Chapter 23
CHAPTER XXIII
FIGHTING THE SELDON PATENT
By sheer force of an idea, backed only by hard work, Henry Ford had established a new principle in mechanics; he had created new methods in the manufacturing world methods substantially those which prevail in manufacturing to-day; now he entered the legal field. His fight on the Seldon patent—a fight that lasted nearly ten years—was a sensation not only in the automobile world, but among lawyers everywhere.
The intricacies of the case baffled the jurists before whom it was tried. Time and again decisions adverse to Ford were handed down. Each time Ford came back again, more determined than before, carried the contest to a higher court and fought the battle over again.
On one side the Association of Licensed Automobile Manufacturers was struggling to save patent rights for which they had paid vast sums of money, to maintain high prices for automobiles, and to protect their combination of manufacturing interests. On the other, Ford was fighting to release the industry from paying tribute to a patent which he believed unsound, to smash the combination of manufacturers, and to keep down his own factory costs so that he could make a still cheaper car.
With the first adverse decision, the A.L.A.M. carried the fight into the newspapers. Most of us can recall the days when from coast to coast the newspapers of America blossomed with page advertisements warning people against buying Ford cars, asserting that every owner of a Ford car was liable to prosecution for damages under the Seldon patent rights.
Those were chaotic years in the industry. The hysteria which followed the huge profit-making of the first companies, checked only temporarily by the panic of 1907-8, mounted again in a rising wave of excitement. Dozens of companies sprang up, sold stock, assembled a few cars, and went down in ruin. Buyers of their cars were left stranded with automobiles for which they could not get new parts.
It was asserted that the Ford Motor Company, unable to pay the enormous sums accruing if the Seldon patent was upheld, would be one of the companies to fail. Buyers were urged to play safe by purchasing a recognized car—a car made by the licensed manufacturers.
Ford, already involved in a business fight against the association and its millions, thus found himself in danger of losing the confidence of the public.
The story of those years is one which cannot be adequately told. Ford was working harder than he had ever done while he was building his first car in the old shed. He was one of the first men at the factory every morning, and long after Detroit was asleep he was still hard at work, conferring with lawyers, discussing with Couzens the latest disaster that threatened, struggling with business problems, meeting emergencies in the selling field, and always planning to better the factory management and to lower the price and increase the efficiency of the car.
The car sold. Ford had built it for common men, for the vast body of America s middle-class people, and it was cheap enough to be within their reach. Ford knew that if he could keep their confidence he could win in the end.
He met the attack of the A.L.A.M. by printing huge advertisements guaranteeing purchasers of his cars from prosecution under the Seldon patents, and backed his guarantee by the bond of a New York security company. Then he appealed the patent case and kept on fighting.
In the farmer boy who had started out twenty years before with nothing but his bare hands and an idea found himself at the head of one of America's largest business organizations. That year his factory made and sold 6,398 cars.
Every machine sold increased his liabilities in case he lost the patent fight, but the business was now on a firm foundation. Agencies had been established in all parts of the world, orders came pouring in. Profits were rolling up. Ford found his net earnings increasing faster than he could possibly put them back into the business.
At the end of that year he and Couzens sat in their offices going over the balance sheets of the company. The size of the bank balance was most satisfactory. The factory was running to the limit of its capacity, orders were waiting. Prospects were bright for the following season. Ford leaned back in his chair.
"Well, I guess we're out of the woods, all right," he said. He put his hands in his pockets and looked thoughtfully at the ceiling. "Remember that time in the Mack avenue place," he began, "when that Chicago check didn't come in, and we couldn't pay the men ?"
"I should say I do! And the day we got the first order from Cleveland. Remember how you worked in the shop yourself to get it out?"
"And you hustled out and got material on sixty days time? And the boys worked all night, and we had to wait till the money came from Cleveland before we could give them their overtime? That was a great bunch of men we had then."
They began to talk them over. Most of them were managers of departments now; one was handling the sales force, another had developed into a driver and won many trophies and broken many records with the Ford car; Wills was superintendent of the factory.
"I tell you, Couzens, you and I have been at the head of the concern, and we've done some big things together, but if it hadn't been for the men we'd be a long way from where we are to-day," Ford said at last.
"Now we have some money we don't need for the business, we ought to divide with them. Let's do it"
"I'm with you!" Couzens said heartily, and reached for his pencil. Eagerly as two boys, they sat there for another hour figuring. They began with checks for the men they remembered, men who had been with them in the first days of the company, men who had done some special thing which won their notice, men who were making good records in the shops or on the sales force. But there seemed no place to draw the line.
"After all, every man who's working for us is helping," Ford decided.
"Let's give every one of them a Christmas present." Couzens agreed. "We'll have the clerical department figure it out. The men who have been with us longest the most, and so on down to the last errand boy that's been with us a year. What do you say?"
Ford said yes with enthusiasm, and so it was settled. That year every employee of the company received an extra check in his December pay envelope. Ford had reached a point in his business life where he must stop and consider what he should do with the money his work had ork had brought him, and those extra checks were the first result.
For twenty years Ford had spent all his energy, all his time and thought in one thing—his work. If he had divided his interests, if he had allowed a liking for amusement, ease, finer clothes, admiration, to hinder his work in the old shed, he would never have built his car. If he had cared more for personal pleasure and applause than he did for his idea, he would have allowed his factory plan to be altered, twisted out of shape and forgotten when he first found capital to manufacture the car. But from the day he left his farm till now he has subordinated everything else to his machine idea.
He applied it first to an engine, then to a factory. He fought through innumerable difficulties to make those ideas into realities. He destroyed old conceptions of mechanics and of factory management. He built up a great financial success.
Now he found himself with a new problem to face—the problem of a great fortune piling up in his hands.