The Ford Myth
I
IN a newspaper morgue the envelope filed under ‘Ford, Henry’ bulks larger than that devoted to any other private citizen. That measures his importance, for news is the breath of our communicating civilization. In that mass of clippings, the most significant is this: —
WHITE SULPHUR SPRINGS, W. VA., Sept. 27. — In addressing the National Tax Association here to-day, Representative William R. Green, Republican, Iowa, declared that the present system of corporate taxation presents an easy way of avoiding taxation, adding that he did not believe the American people would permit this state of affairs to continue indefinitely. Mr. Green said Henry Ford was popularly supposed to have the largest income of any citizen in the country, and that while no one knows what income tax Ford pays, it is certain that it cannot be at all in proportion to his income.
Here begins an irrepressible conflict that will be news for many years to come. A member of Congress, ranking Republican on the revenue-hunting Ways and Means Committee and slated for the Chairmanship since Fordney’s retirement, has talked to a serious audience of practical men about the Ford fortune. Let Mr. Ford laugh that off if he can; let him enlarge as he pleases upon wealth as a means to service, jobs, and enterprise. Nevertheless the talk will go on. Presently it will be heard in Congress, where the debate will centre, not upon whether the Ford fortune should be scotched, but whether it should be scotched as corporate profits, as income, or as inheritance. Years hence treasury experts will still have the Ford fortune in mind while adjusting their tax brackets. This prospect should be enough to disqualify Henry Ford as a presidential possibility. He and the Government mean enough to each other already.
The Iowa Representative’s speech reflects the beginning of a change, slight but meaningful, in the public attitude toward Mr. Ford and his possessions. Representatives seldom come by such trenchant ideas through sheer ratiocination. Instead, they pluck them out of street-corner conversations and general-store debates. Iowans must have been discussing the Ford fortune before Mr. Green mentioned it at White Sulphur Springs.
The latest estimate of the Ford wealth is $750,000,000. The assets of the Ford Motor Company, owned entirely by Mr. Ford and his son Edsel, were more than $536,000,000 last February. Since May the company has done the best business in its history, the cash item rising from $159,000,000 to more than $200,000,000 between February and May. Its domestic production of cars and trucks reached one new ‘high’ in the week ending August 7, and another in the week ending September 25, when production amounted to 41,769 cars and trucks and 1857 tractors. From January 1 to October 18, it produced 1,500,696 cars and trucks — almost as many as all other American manufacturers combined.
But domestic production of cars, trucks, and tractors is not the only source of the Ford wealth. There are Ford companies producing under other flags. Also, Mr. Ford owns all, or substantial parts, of companies that sell coal and transportation. The bulk of his property is in the Ford Motor Company. In the twelve months ending February 28, 1923, the company earned more than $119,000,000, after deducting $34,000,000 for taxes. This is 22 per cent on the $536,000,000 investment covered by the statement. In the current year the Fords are accumulating wealth at a rate close to $400,000 a day, or $150,000,000 a year. As corporate net income, moreover, this profit pays only 12½ per cent Federal tax. By leaving this profit in the corporation, instead of taking it out in dividends, the two Fords save at least 50 per cent additional tax that they would have to pay if the same sum were distributed as individual income to stockholders.
If Henry and Edsel Ford are not the richest father and son in America today, they soon will be. The enormous profits which Henry Ford ploughs back into the business, the pace at which he is extending his control of raw materials and his domination of supplies, his growing interest in water-powers and transportation, his exuberant health and zest for expansion, the morale of his labor forces and the competence of his technical staff, these predicate Ford production and profits beyond anything on record in American industry.
Great fortunes are usually accompanied by great expenditures, either for display or philanthropy. The Ford fortune is neither threatened by the one nor curtailed by the other. Mr. Ford has too much sense to play the rôle of a Crœsus. Perhaps because he is too interested in life and work to know what ennui is, he has acquired none of the expensive habits of the rich. His favorite recreation is motor-camping with a few cronies. He spends less than many a wealthy unfortunate who keeps up appearances with a racing stable, an ocean-going yacht, and sundry houses strategically located with regard to the seasons and the social whirl. Just as Mr. Ford has no ambition to shine as a pillar of the turf, so likewise Mrs. Ford reveals no ambition to rank as a pillar of society.
Philanthropy does not retard materially the bulbous growth of the Ford fortune. The Fords may indulge in many quiet benefactions; and no doubt they meet the levies laid upon them in various drives, like other well-to-do citizens whose names and ratings are down in the books of their local charity organizations. But the public gifts of Henry Ford are small and few in proportion to his huge earnings. He built a hospital in Detroit — to date that is his chief contribution to the publicservice plant of the city where he made his money. Derided as a ‘pay-asyou-enter’ hospital because it is selfsustaining, it nevertheless provides excellent hospital service at rates the average man can afford to pay. His purchases for public use of two literary shrines —John Burroughs’s birthplace and Longfellow’s ‘Wayside Inn’ — are graceful and pleasant acts; but not expensive when measured by the Ford ability to pay. He helps to support the Wild-Life-Protection Fund of the New York Zoölogical Society. Multiply the cost of these benefactions by ten and you would still be short of the Rockefeller or Carnegie gifts to public causes.
Unless Mr. Ford changes a deepseated conviction, this situation is not likely to change. In My Life and Work he goes on record against charity and philanthropy. Also, he doubts the value of professional social service. Come what may, Henry Ford is unlikely to deluge the land with libraries, save heathen from hookworm, or provide palatial quarters for college undergraduates. Prominent solicitors often return from Dearborn with this message: ‘We must wait till Edsel gets it.’ There is no hint as yet that the Ford wealth is troubling the Ford conscience or burdening the Ford spirit.
II
Thus far Mr. Ford’s rise to riches distresses few of us. No one abuses Henry Ford simply because he is rich; ‘soap-boxers’ do not rail against him and the radical press does not gird at him, as they rail and gird at many men of lesser wealth. His critics are mostly of two sorts: financiers and Jews — to Ford they seem to be one and the same. Neither group objects to his wealth and power, but merely to his talk. The common people extend a blanket blessing on all his works, in marked contrast to the hostility with which they have viewed other of the unco rich since the muckraking days of twenty years ago.
There are solid grounds for this approval, as well as mythical ones. Ford rose from commonplaceness ‘on his own.’ He ‘stuck by the shop’ when lesser industrialists fled from close touch with production and its human problems. He has raised wages, avoided strikes, and earned a reputation as a good boss —and good bosses are pearls of great price in industrial society. His company led in changing the ‘automobile game’ into the automotive industry — a dignified and solid business with substantial sales-depots, dependable service, and responsible managers.
But above all else Ford provided ‘folks’ with cheap motor-cars. When the automobile attacked America, the small producer needed the new means of transportation in order to hold his own in the world; otherwise he must inevitably have fallen back in competition with better-equipped forces. If there were no cheap cars to-day, American farmers would be well on their way to peasant consciousness.
These achievements, and the apparent ease of their execution sans special privilege, monopoly, or control of natural resources, have created a mass opinion that Henry Ford is a miracle man, a wonder-worker. To a complicated industry he brought a pioneer spirit which the sons and grandsons of pioneers were bound to respect. Fearless as any master scientist, this mechanic of genius, who seems to know tools and men equally well, carried mechanical production to its modern uttermost in devices that save time and drudgery. These aids to automatic production have their drawbacks, social and physical, but they obviously produce cheap goods, and by degrees they increase leisure for the masses.
Finally ‘this man Ford,’ as the first families of Detroit used to speak of him when he was on his way up, is scornful of many things, worthy and unworthy, that the common man scorns and to which the well-to-do defer at least in attitude. He scoffs at learning that has no earning power, at influence that is based only on affluence, at history, art, and many of those finer graces of life which, even in a democracy, as yet mean little to the masses. This plutocrat, sprung from the people, remains a rebel, conscious that much is wrong with the times, the world, and the country. In his own town he played a lone hand, refusing to sit in with the business oligarchy which, there as elsewhere in industrial communities, is the real seat of power. Bankers continued to be his pet aversion long after he became a banker himself. The American people could keep hold of such a man in spirit; could even, brooding upon him mystically, make him the central figure of a myth. In a world that daily became more of a puzzle for simple minds, here was a man of the people who could ‘beat the big game.’ Better than any man of his generation Henry Ford came to personify the dynamic democracy of naïve America.
Countless farmers think that, with Muscle Shoals in Ford’s possession on easy terms, they would get cheap fertilizer on easy terms. Hard-pressed folk fancy that he could give them the benefits of cheap money without any of its disadvantages. Oil operators shiver at the thought of Ford going into oil in the present debilitated condition of that industry. Millions of wage-earners think that they are being abused because their employers do not meet the Ford scale of pay. There are shippers all over the country who imagine that Ford could give them cheaper railroad rates by reorganizing the country’s railroad system, as easily as he reorganized the Detroit , Toledo and Ironton. To all these, Henry Ford is the good fairy to whom nothing is impossible.
Recently an Albany newspaper carried a story that illustrates neatly the power of the Ford myth. Its readers were assured that city and State officials were lying in wait for a certain exalted person, to impress upon him the necessity of having the Hudson River deepened at government expense. Once the sympathies of this worthy were enlisted, the United States simply could not refuse millions for improvements which would make their cities ocean ports. The citizens had visions of shiploads of Troy collars and Albany aspirin being loaded at their wharves for cities on the seven seas. And who was the personage to be waited upon thus humbly? You expect the answer, ‘Henry Ford.’ Not so; no such luck. Mr. Leibold, if you please, the secretary to the great man. Thus does the hero’s reflected glory elevate the underling. Convert Mr. Leibold, and Mr. Leibold can convert Mr. Ford, and Mr. Ford can convert the Board of Army Engineers and the Committee on Appropriations and whoever else needs to be converted. Presumably the meeting came off properly, because Mr. Ford, who incidentally owns a factory and water-power at Green Island, recently advised the Government to proceed with the improvement. If it does, Green Island will be conveniently near the head of navigation.
It is easy enough to pick holes in the Ford myth. Instead of rising singlehanded to success, Mr. Ford had the devoted aid of a group of notable men in the Ford Motor Company’s early years. One of them, a master advertiser, made Ford ‘first-page news’ by exploiting his ‘five-dollar-a-day profitsharing plan’ in 1914. Another laid the foundation of a system of office administration that remains a marvel of business efficiency long after his departure. There are dozens of ‘Ford alumni,’ as Dean Marquis calls them, filling high positions in the business world, whose contributions to the Ford Motor Company’s success must have been large. Of course, these men grew under Ford; yet no doubt Ford grew also because of those associations. Nevertheless the semi-autobiographical story of Ford’s business rise contains no mention of them. Mr. Ford does not share authority; neither does he share the limelight.
A good deal of Mr. Ford’s popularity on Main Street and Mill Street are due to his open dislike for Wall Street. Clashes between industrialists and financiers are common enough in industrial society to suggest incompatibility between those who deal in goods and those who deal in credits. In the new industry of automobile-making, this temperamental conflict between innovating and conservative forces was bound to crop out, and did so, not only in Mr. Ford’s case but in the cases of other manufacturers whose vision ran ahead of their resources. But with Ford the prejudice has hardened into an obsession, persisting unabated after he has become a money power in his own right, loaning millions to the city of Detroit with a nonchalance that contrasts oddly with the ceremony that attends Wall Street operations.
The attack goes on even after Wall Street has surrendered, hailing Ford ‘comrade’ with as much brotherly feeling as the spokesmen of that somewhat inhibited section can muster. The Wall Street Journal recently called him, in admiration that is almost affection, ‘Wall Street’s Shock-Absorber.’ There is reality in the phrase. Ford advocates openly ideas that Wall Street loves but, out of deference to public opinion, is constrained to keep in the background. When Ford says that labor unions are excellent devices for killing time, Wall Street chuckles. When Ford says that the Interstate Commerce Commission should be discarded, Wall Street beams. When Ford put forth his Muscle Shoals offer, Wall Street gasped at its sheer audacity. It reminded the old-timers of Jay Gould at his best. When Mr. Ford gets to hammering Wall Street, and then goes on to hammering international bankers and Jews indiscriminately, he reminds one of Æ’s Irish orator who was forever trying to bring up a large family of words on a small income of ideas.
III
Neither Mr. Ford nor his most enthusiastic admirers mention the most important factor in the extraordinary Ford success — the market. America at the opening of the twentieth century was the net result of political and economic influences ancient in origin and mixed in effect. Centuries of enterprise, thrift, labor, invention, political struggle, and legal interpretation — to say nothing of several wars — had to be lived through before this continent was ripe for the automobile. Before Ford cars could become as common as autumn leaves there had to be pipelines and railroads; and before these could come to pass there had to be Scotch inventors, Dutch bankers, Indian fighters, Pilgrims, conquistadors, feudal barons, Crusaders, martyrs, and all manner of other energetic, Westernizing persons, century without end. No Rockefeller; no Ford. No Stephenson; no Ford. No Cæsar; no Ford!
One result of the travail of all these centuries was a rich country of distributed wealth and eager-minded inhabitants, politically well-organized, called the United States of America. A land of magnificent distances and rich natural resources, populated by persons hungry for new means of transportation and prepared to pay spot cash. Europe had steel and laboratories and capital and able mechanics; yet Europe could not develop cheap automobiles, for lack of enough buyers to support quantity production. The past prepared the stage for Henry Ford; and if he had not undertaken to satisfy the American appetite for cheap cars when he did, someone else would have done so in short order. When our most notable beneficiary of history scoffs at history, practitioners of that noble art can afford to smile sagely, as Tacitus might have smiled at the struttings of a barbarian king.
True believers in the Ford myth overlook, also, the luck of the Ford success. The man has been lucky as well as shrewd. He was lucky when his ‘six’ failed to attract the public, and he was driven back to the small car. He was lucky when W. C. Durant could not quite raise in cash the relatively few millions for which Mr. Ford stood ready to sell him the Ford Company in the early days of the industry, when Mr. Durant was amalgamating the General Motors Company. Ford was lucky again when the upward swing of the business cycle enabled his dealers to dispose of the goods he dumped upon them when, as he says in My Life and Work, he dug assets out of his factory rather than borrow money. This shifting of part of his debt burden to his dealers might have seriously embarrassed the wide-flung Ford salesorganization; actually it did its members good rather than harm. Yet no mind, however shrewd, could have foretold that the upward swing of the business cycle was so near at hand. Luck again.
Ford was even lucky in his one defeat, when he ran for the Senate in 1918, and was beaten by a few thousand votes in a campaign where his opponents used too much money. The motor king scored a moral victory, and was spared the tedium — for him torture — of sitting in the Senate. Ford is lucky in anything that lets him concentrate on the job which he so completely masters, and unlucky when he wanders into other mazy passages of this intricate experience we call life. Edison knows his Ford, Couzens knows his Ford.
The public may never outgrow the Ford myth entirely, but Mr. Ford himself outgrows it little by little, a piece here and a piece there. He seems to have outlived the Messianic mood, in which he felt ‘called’ to evangelize a sinful world even though at great expense.
This phase ended with the Peace-Ship fiasco. He admits now that the Peace Ship taught him a good deal about war. Except for tilting against international bankers (always unidentified), Mr. Ford no longer concerns himself greatly over international affairs.
Lately he has been growing in humor and also in insight into his own character. The Wood interview in Collier’s Weekly is one of the most revealing of all Ford’s many utterances. That and the Crowther book1 give Ford’s view of Ford better than all secondhand expositions. In the former our richest man says he is unfit for the presidency ‘because he lacks a political mind.’
There are other equally good reasons why Henry Ford should never be President, but that is enough. Intelligent dictators do excellently well in business everywhere, and in European politics they seem to be quite the fashion just now; but hereabouts we still believe in checks and balances, constitutional rights and democratic processes, and other like intangibles which Mr. Ford, in order to secure efficiency in government, would have to shear away along with the red tape he so cordially detests. Therefore he says the country could not stomach him except in an emergency.
The moral is obvious. There is no present crisis equal to the penalty. Even the sale of that steam plant down in Alabama can hardly be magnified into a convincing emergency. Our politicians, if they value their places, will take care to avoid, for a few years to come, anything that savors of an emergency. Upon them the Ford boom serves notice: —
IV
Economically, Ford is building something new in America, a self-contained business for practical purposes, personally owned, that has the strength and solidity of a vertical trust without its legal complications. It controls raw materials, manufacturing processes, and marketing in ever growing degree. Merely for self-protection it must continue to unify control until it approximates complete production from ores to automobiles. Whereas vertical trusts are usually consolidations of corporations drawn together for mutual support and protection, the Ford Motor Company is reaching the same end by purchase and development. When the process is completed, the company will stand, from the standpoint of industrial security and efficiency, in a class by itself in America, and rivaled in Europe only by Krupps.
It will not do to dismiss this achievement as transitory. It constitutes a notable contribution to the industrial strength of the country. Moreover, it is likely to last as long as any business unit of our time. I cannot imagine any sort of civilized America, under any kind of political and economic régime whatsoever, that could or would dispense with the flexible transportation that the motor-car provides. The industry will always be noticeably sensitive to the ups and downs of general trade, but its quick recovery from the post-war depression showed strong recuperative power. And the low-priced market, of course, is the most dependable. There may be revolutionary changes in design and means of propulsion. It is not to be expected that the Ford Company will ever break new ground in those directions; but presumably it will take up proved betterments in time to save its position, as it did in the case of the self-starter.
Finally, even if chronic pessimists on the automotive industry should be proved right by events, it does not follow that the Ford Motor Company would be ruined. The Ford Company is to-day a complex of industries, a vast machine-shop and assembly plant, with pendent chemical, metallurgical, mining, hydro-electric, forest, and textile activities. There will always be demand for coal, pig iron, wire, machined parts, wood, glass, acids, cloth, and electrical energy. The Fords produce all those things now, and can go on producing them, whether they are sold as automobiles and tractors or in some other form. The change would be costly, but not necessarily fatal. There is a tremendous vitality in broadly based industrial enterprises. Krupps grew great making munitions of war; but it did not perish when that market was cut off by fiat. Instead of quitting, it began beating its cannon metal into locomotives and other peace goods. Industry is the indispensable, ‘key’ activity of modern life.
Henry Ford, busy in his huge new plant at River Rouge, provides the unique spectacle of a man occupying his own monument. It is one likely to outwear many a graven pillar and may even outlast some political principles held sacrosanct at the moment.
This is not saying that the Ford Motor Company will continue indefinitely its present terrific pace of expansion. Every business is the measure of the man at the top, and every business tends to become stiff with age. Still, Henry Ford presumably has at least ten active years ahead of him, and he has given his company a momentum that will not be lost until long after he departs, even though it may not be fortunate enough to find his like as a leader. And ten years of wealth-accumulation, at the present rate of growth, would make Ford thrice a billionaire, with an income of more than a million dollars a day.
Therefore the Ford fortune and the Ford policies have important social bearings. Are the Fords to become merely another rich American family, following the usual course of our plutocracy from shirtsleeves to polo, and from cookstoves to coronets, in three generations? Is the Ford business destined to be merely another big business which, founded by an original individual with spirited if somewhat narrow ideas of public service, is destined to degenerate into an impersonal, profit-taking machine, amid the growing indifference of its employees and the waning regard of a disillusioned public?
These are questions that time alone can answer. But inasmuch as Mr. Ford has expressed himself emphatically upon some of the determining principles of his life, we may deduce, perhaps, whither he is driving by setting down the directions in which he appears determined not to be driven. The conclusions, of course, are purely speculative; there is always the chance that Henry Ford will do the unexpected. Still, sixty years and ten times as many millions are not conducive to vagaries.
V
The professed aims of Henry Ford’s existence are to pay high wages and sell goods cheap. You might think an employer could easily avoid profits by so doing; but Mr. Ford does not agree. Every time he has lowered prices, he has tapped another layer of buyers and increased his sales. Whenever he has raised wages, he has increased efficiency of production. His volume is now so enormous that he could sell cars at close to cost and still reap large profits from the sale of parts only. So the manufacturing and merchandising policies which Henry Ford approves are no more likely to keep his fortune from growing than is philanthropy, which he disapproves.
Mr. Ford’s explanation of his socalled ‘profit-sharing’ plan leaves me unconvinced. His men get high wages, part of which is listed as profits; but that there is any general disbursal of company profits on a grand scale to rank-and-file workers is not apparent. At least, the sums divided so far have not kept the Ford fortune from ‘snowballing.’
At the time this profit-sharing plan was put through, great expectations were raised that the Ford Motor Company was destined to break new ground in the troubled sphere of industrial relations — great expectations never yet realized! They who believe that industrial difficulties cannot be solved altogether through authority; they who think that the wage system should be amended to allow the routine worker more voice in his destiny; they who give to the word ‘coöperation’ a humanitarian and spiritual emphasis — all these altruists are sadly disappointed in Henry Ford. Undeniably fair in his dealings with Labor, undeniably sage in discussing the practical psychology of toil, undeniably wise in his later policy of decentralizing production, still he does not grasp that in these latter years Labor has come by something it values above houses and gear and raiment— to wit: a vision of self-sufficiency, the promise of a new day when the Fords of this earth shall do Labor’s bidding, not Labor theirs. Mr. Ford is deaf, dumb, and blind to the labor movement and all its implications. He is a benevolent despot, standing firm against collective bargaining in all forms; an autocrat who would be as unapproachable to a shop committee as he is, notoriously, to processservers.
Yet Henry Ford has given the labor unions something they greatly needed
— competition in well-doing. On a grand scale he has demonstrated that the way to beat unions is to do more for one’s workers than the unions can win for them. The Ford organization is to-day an industrial clan. Its members are widely scattered in space and social position, and subject to all the myriad differences that make against solidarity in the human family. Nevertheless they are with the company and with its boss, in spirit. Critics, whether of high or low estate, have been sloughed off or shoved out, sometimes ruthlessly. Those who remain seem to be Ford’s men in the sense that the Gregara were The MacGregor’s men
— come weal, come woe.
That morale is Henry Ford’s best achievement. But in so far as this clan spirit is a reaction to the personality of a leader, it is likely to fade after the leader passes, unless it can be stabilized by definite concessions to coöperation in the forward-looking sense of the word. Perhaps any such contribution to the solution of industry’s central problem is beyond him; perhaps he does not care to try. At any rate, he says nothing to show that this matter is on his mind, and plenty to indicate that it is not. The chances are that the thing will not be done.
When the Ford score is finally cast up, the prospect is, therefore, that this extraordinary man, for all his originality and excellent intentions, will be found to have added to our social scheme merely another swollen fortune and another big business unit. In that event, the fortune inevitably will come to be appraised, rightly or wrongly, as evidence of gluttonous appetite, a tainted hoard to be raided, upon need or envy, by an embarrassed or jealous State.
The business, by reason of its size and social importance, will become in time one more battle-ground for unionism, one more target for state control, one more argument for Socialism. Henry Ford is a superman who has ploughed a straight, deep furrow through the crust of custom; but another generation may reap stranger crops there than Ford ever dreamed he was planting.
Mr. Green of Iowa, for the moment personifying the sovereign State in its unending struggle with too masterful individuals, pointed an accusing finger at Mr. Ford one mild September day. The incident passed without much comment. Few noted the challenging gesture, as few mark the turn o’ the tide. Yet the turn is as inevitable as the tide itself. This challenge, too, was inevitable, and registers, unless all signs fail, the high-water mark of popular favor for Ford. Now, unless the man be great beyond his words and works, the ebb is on.
- My Life and Work, by Henry Ford in collaboration with Samuel Crowther. New York: Doubleday Page & Company. 1923.↩