by Jeff Guinn
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From the first stories of their 1914 trip to the Everglades together, Edison’s name always came before Ford’s in newspaper headlines, except in some Detroit newspapers. But beginning with coverage of the 1919 trip, that order began to change. From the mighty New York Times (“FORD ON A VACATION: To Go Camping with Edison and John Burroughs”) to the newswire-dependent Oregon Daily Journal (“Ford, Edison and Burroughs Enjoy Living the Simple Life”), the controversial automaker gradually assumed top-of-the-bill status over the beloved inventor. The 1919 Vagabonds trip through New York state and New England was essentially a victory lap for Henry Ford.
Chapter Six
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1920
A main purpose of the Vagabonds’ summer trips was to demonstrate how much they had in common with other Americans. Though their vacation trappings were fancier, Edison, Ford, Firestone, and Burroughs embraced the national enthusiasm for outdoor exploration and adventure made newly possible by the proliferation of cars. The resulting publicity kept not only their names but their products prominently in public consciousness, and in the process the four famous friends had fun, too.
It seemed fitting in 1920 that the Vagabonds shared something else with their fellow citizens—financial scrambling and setbacks caused by an economic downturn that caught them and the rest of America by surprise.
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In the years immediately prior to U.S. entry into World War I, foreign demand for U.S. goods ramped up as never before. European nations enmeshed in the conflict needed raw materials and foodstuffs that their own war-weakened economies could no longer provide. American farmers stepped up and were rewarded with stunning profits. Before hostilities commenced in Europe, cotton sold internationally for an average of 12 cents a pound. During the war, that rose to 40 cents a pound, and as Europe struggled to recover economic equilibrium following the armistice, a pound of U.S. cotton fetched 50 cents in overseas markets, with 60 cents anticipated. All across America, farmers naturally wanted to expand their landholdings so they could raise even more crops, and banks were eager to provide the loans making it possible. Wartime manufacturing in America contributed to the economic boom—every factory in the land worked frantic shifts, so company owners raked in profits and well-compensated jobs were widely available. Americans had never enjoyed such a time before. Virtually everyone in the middle class had more money to spend on leisurely pursuits, from movies to car trips, and they happily indulged. If prices went up, too, it was not considered a problem, since that gave distributors and store owners their own opportunity to make more money—there was plenty to go around. Nineteen nineteen and its internal chaos caused deserved national concern, but amid the uproar there was still a comforting sense that the economy, at least, continued expanding in new, thrilling ways with no apparent end in sight.
But across the Atlantic, recovery was under way. European nations that had seen much of their territory reduced to blood-soaked mud regained equilibrium—farmers in France and Belgium and Germany once again tilled their fields. Early in 1920, revitalized U.S. competitors overseas started taking advantage of international shipping lanes regained with peace and undercut American prices in global markets. Suddenly, farmers in the States could get only 10 cents a pound for cotton, then 8 cents. Meanwhile, notes at banks on loans for purchases of additional farmland came due, and throughout the nation farmers defaulted on those payments and the banks began foreclosing.
There was a ripple effect. It took some months for the rest of America to realize what was happening, but the farmers’ troubles led to struggles for the banks, and from there the blossoming U.S. economy went into steady wilt. When enough jobs were lost to cause national concern, even the most reckless middle-class spenders began cutting back, beginning with leisure-related purchases—phonographs, books, cars, tires.
Among the four Vagabonds, Burroughs was least affected. He didn’t have much money to begin with, and at age eighty-three he no longer made appearances along the Eastern Seaboard lecture circuit. Burroughs’s books always sold reasonably well, but he never rivaled authors like Mark Twain, whose royalties ensured them considerable steady income. The naturalist mostly stayed home in New York, where his journal notes for much of 1920 concerned the death of similarly aged friends (“April 28: The octogenarian has no alternative but to live in the past. He lives with the dead, and they pull him down”) and the ongoing minor travails of living close to nature (“July 22: Had a skunk in a trap that I set for a woodchuck, and in trying to liberate him got some of his essence. . . . What marksmen [they] are! I held his tail down with a stick, but he managed to uncork his bottle all the same”).
In late 1919, Firestone Tires in Akron operated at absolute peak efficiency. In that single year, its factories produced four million tires and sold them all, resulting in $9 million in corporate profits. Firestone recalled, “We could not keep up with demand.” Ford remained his best customer, and Model Ts still dominated the automobile market, but other car manufacturers did brisk postwar business, too. Firestone’s tires rolled along every mile of American roads. Nineteen twenty was expected to be a banner year; Firestone borrowed heavily from banks to finance the rubber and fabric necessary—the loans totaled $35 million. Then in May, raw materials in hand and an endless bull market apparently assured, he rented an estate in England and crossed the Atlantic to live there with his family on a vacation expected to extend through much of the summer.
But back in America, early summer brought a hiccup in car sales—the problems of farmers and banks began spooking consumers. July was always a strong sales month for Firestone Tires, but not in 1920. Before the month was over, inventory backup overflowed company storage and factory shutdowns seemed imminent. Firestone hurried back to Akron and chose aggressive marketing over retreat. He told an emergency meeting of branch and district managers that “the public has not stopped using tires, but they are not going to buy at present prices,” which he ordered reduced by 25 percent. “It was a fire sale,” he admitted later. “We thrust aside all our dignity and customs.” Firestone’s competitors, caught off guard, closed their factories and charged full price for inventory tires. Within a month, they changed course and cut prices, too, but by then Firestone, who “plastered the country” with ads touting his discount, had a solid head start. He reduced his workforce by 25 percent, too, and remained ready to slash prices and employment further.
For years, Thomas Edison endeavored to remove himself from day-to-day company supervision, preferring to spend work hours experimenting in his laboratory. By 1918, his son Charles had assumed a leading role in management, enjoying considerable autonomy. Edison’s decision on the 1919 Vagabonds trip to focus on rubber-related research seemed to ensure Charles’s permanent position as overall head of company business. But the economic troubles of 1920 diverted his father from the laboratory. People weren’t buying phonographs or electric fans or even as many light bulbs. Edison always took a basic rather than nuanced approach to business. If not enough money was coming in, that simply meant too much in salaries was going out—“Too much supervision of supervision, from too many executives, in short, from too many non-productive additions to both manufacturing and selling.” Charles Edison prided himself in the modern, multilayered corporate workforce he’d put in place. Now, without consulting Charles, Edison embarked on a series of what longtime employee A. E. Johnson termed “firing campaigns . . . he’d stop you and say, ‘Who are you? What do you do?’ You’d tell him, he’d ask a couple of questions . . . say, ‘you’re fired.’ ” While most Americans still loved the genial inventor whom they felt they knew, Johnson recalled that “around here in West Orange [there are] people who say, ‘Oh, he was rotten, he was an S.O.B.’ ” Charles Edison was just as unhappy with his father, who by year’s end reduced the company’s manufacturing workforce from ten thousand to three thousand, eliminating his son’s prized personnel department in the process.
Among the Vagabonds, the 192
0s economic slump may have surprised Henry Ford most. The late spring/early summer gradual decline in Model T purchases should have been a harbinger, but during those months Ford was distracted by sagging sales of another pet product.
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Since he had acquired the weekly Dearborn Independent in December 1918, Ford’s intention was that the newspaper would quickly become one of the nation’s most popular periodicals, just as Ford himself had established himself as a preeminent national presence. He hired seasoned journalists as editors and writers and reserved prominent space for “Mr. Ford’s Own Page,” which, while ghostwritten, was assumed by many readers to be Ford’s personal beliefs expressed in print by the man himself. As with the Model T, Ford expected that he would hire the best professionals, provide them with product direction, and preside over matchless sales success, all the while maintaining complete control. To work for Ford was to submit to him. He had little patience with disagreement and less for results that didn’t meet his expectations. In January 1919 the first new-era Dearborn Independents rolled off the presses, sixteen pages long and a nickel per copy, with yearlong subscriptions available for $1. Ford did not offset production and editorial costs by selling ads—advertisers might expect editorial quid pro quo, which Ford suspected was the norm at competing papers. Just the fact Ford was associated with the Independent impressed the public. New customers boosted the initial subscription total to forty thousand, then more than fifty thousand, many times higher than what the weekly had reached prior to being acquired by the carmaker. But the Independent’s sterile copy and primitive illustrations—Ford biographer David L. Lewis describes it perfectly as “colorless”—combined with the economic troubles of 1920 dropped circulation by more than half. The Independent was hemorrhaging Ford’s money, which was bad, but also, in his opinion, tarnishing his hard-earned reputation as a winner in every endeavor, which was worse.
Ford turned to his automobile dealerships for help. Besides unwavering devotion to selling cars, they were now instructed to peddle the Dearborn Independent, too, installing racks in their showrooms and, when possible, folding annual subscriptions into the purchase price of a Model T. That helped over the next several years, but not quickly enough to satisfy Ford. At one point, determined to gain immediate subscriber traction, Ford turned to Edison. Though his inventor friend was laying off workers in droves, Ford still asked that Edison allow G. C. Smith, “an Independent sales representative,” to set up shop in Edison Company plants “for the purpose of enrolling [those] who may desire to subscribe.” Already unhappy with their own boss, Edison’s remaining employees were in no mood to accommodate his friend. Only two weeks after Smith set up in New Jersey, Edison’s secretary W. H. Meadowcroft sent an apologetic note to Ernest Liebold, now Ford’s right-hand man both for cars and the Independent:
Mr. Edison wishes me to write to you in regard to Mr. Ford’s representative Mr. G. C. Smith who has been here several days for the purpose of obtaining subscriptions from our employees for the Dearborn Independent. We have given him every facility for getting in contact with our people. . . . Mr. Smith worked hard and faithfully, but has only been able to secure about fourteen subscriptions in spite of all his hard work and faithful endeavor.
By fall 1919 Ford made clear to the experienced journalists staffing the Independent that his patience was running out. He was prepared to spend whatever was necessary for the weekly to succeed, but he needed some strategy to bring that success about. The vision was his; implementation was theirs. Recent hire Joseph J. O’Neill, though, poached from the New York World, submitted a memo laden with capital letters and spelling out a solution instantly dear to the conspiracy-obsessed Ford’s heart:
Find an evil to attack, go after it and stay after it . . . PUSSYFOOTING and being afraid to hurt people will keep us just where we are if not send us further down the ladder . . . FEARLESS, TRUTHFUL, INTERESTING, PLAIN-SPOKEN articles . . . LET’S HAVE SOME SENSATIONALISM.
Ernest Liebold probably made a strong suggestion about the evil to be attacked, but Ford needed little encouragement. Beginning in 1920, the Dearborn Independent began a series of antisemitic editorials and articles that continued for ninety-one consecutive weeks. These were largely presented as part of a theme whose headline was emblazoned in every issue—“The International Jew.” Much of the material was dredged from Protocols of the Elders of Zion. The first few issues described the rise of Jews to power and presented as fact secret Jewish control in America of various industries, including “the liquor business . . . the loan business . . . the motion picture industry . . . news distribution.” According to the Independent, Jews had even insidiously seized control of Major League Baseball.
Some of the weekly paper’s staffers refused to participate and quit before they could be fired. A few brave members of Ford Motor Company management suggested to Ford that antagonizing a significant section of the public might very well result in a Jewish boycott of Ford cars. Ford professed indifference. If the product was good and the price was right, Jews and everyone else would buy it. In Ford’s view, the majority of hardworking Americans agreed with the Independent’s stand, or at least welcomed attention-grabbing plainspokenness. Circulation picked up considerably during the ninety-one weeks of antisemitic editorializing, peaking at about 650,000 by 1925—Ford chose to believe it was the ongoing attack on Jews that spurred sales. He failed to realize that almost the entire increase was based on subscriptions sold by Ford dealers to Model T buyers as part of the car’s overall price. Only an infinitesimal percentage of Independent sales came from street racks and non–Ford Motor Company customers.
To Ford, the Independent was doing America and the world a service. All right-thinking men of any faith would surely be supportive. Jews ought to feel relieved that their secrets were out and they no longer needed resorting to subterfuge. Any Jews who somehow weren’t aware of their “race’s” schemes would not only learn about them thanks to the Independent, they’d probably be won over by the editorial arguments, Ford believed. He was shocked and hurt when Jews he considered friends took offense at the articles. His regard for Rabbi Leo Franklin of Detroit was such that he’d recently presented him with a Model T as a gift. Soon after the Independent began its antisemitic campaign, Rabbi Franklin returned the car. He received a personal phone call from the baffled Ford, who asked plaintively, “What’s wrong, Dr. Franklin? Has something come between us?”
But Ford’s attention was eventually wrenched away from the Independent and its campaign. It was one thing to have difficulty selling a five-cent weekly newspaper, and very much another to suddenly be faced with a precipitous decline in sales of Model Ts.
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The economic slump of 1920 could not have come at a worse time for Ford. Payments on the bank loans he’d taken to buy out his Ford Motor Company partners in 1919 were coming due in 1921. There had been considerable additional outlay for plant expansion and/or construction. Total obligations were $58 million. Ford Motor Company had $20 million in cash on hand. Had Model T sales continued as expected, ramping up year after year (now about half the cars sold in America were Fords), the bills would have been no problem. Suddenly, they were.
Ford’s immediate response was similar to Firestone’s—he cut prices on the Model T, from 14 to about 30 percent depending on car style. Ford did it with considerable flair, announcing at the same time as the price cuts that he would continue paying the generous wages that gained him so much positive coverage in 1914. Most media coverage was gratifying. Some editorials speculated that Ford’s largesse toward his workers and consumers compensated for his witness stand bumbling during the Tribune trial. Others, like the Denver Post, simply lauded him: “Your life, your character, and your achievements should be an inspiration to every laboring man, to every good American citizen, and to every rich man and capitalist in the country—plain, simple, good-hearted, just, generous Henry Ford!”
The price cuts moved some cars, but not enough. Financi
al pundits began speculating that Ford might have to swallow his pride and go crawling to the banks that he traditionally enjoyed disparaging. There was every expectation that, at the least, they would make him grovel. But Ford had a different plan.
Ford dealers had a strict financial arrangement with the parent company. When they ordered cars, they paid for them in advance rather than as they sold. The premise was that with their money at stake rather than the company’s, they’d work even harder to sell the cars. Since the Model T was constantly in high demand, this was no hardship for the dealers. They considered themselves lucky to be affiliated with Ford, even when the boss wanted them to sell newspaper subscriptions as well as cars. But the 1920 economic slump left Ford dealers anxious to move the cars they had on hand and reluctant to order more. No one knew how long the crisis would last—the dealers wisely wanted to play it safe.
They were shocked, in the fall, to receive shipments of Model Ts that they hadn’t ordered. The edict on these cars was the same—Ford Motor Company must be paid for them. Refusal would terminate the dealer-company relationship. Dealers already had considerable personal stakes in their car showrooms and lots, often in attached garages, and car inventory already on hand. If they refused to accept these additional Model Ts and were fired by Ford, they could be ruined. Or, as the parent company suggested, they could accept the cars, if necessary get loans from their own banks to pay Ford for them, and then aggressively keep trying to sell Model Ts and hang on until the national economic crisis was over. The dealers had little choice but to accept. That provided Ford with enough money to meet his immediate corporate debts—the dealers had to risk wrath from their banks instead.