[Footnote 23: From _The Age of Big Business_, by Burton J. Hendrick, in
_The Chronicles of America_ Series. Copyright, 1919, by the Yale University
Press. By permission of the author and of the publishers.]
In many manufacturing lines, American genius for organization and large
scale production has developed mammoth industries. In nearly all the
tendency to combination and concentration has exercised a predominating
influence. In the early years of the twentieth century the public realized,
for the first time, that one corporation, the American Sugar Refining
Company, controlled ninety-eight per cent of the business of refining
sugar. Six large interests--Armour, Swift, Morris, the National Packing
Company, Cudahy, and Schwarzschild and Sulzberger--had so concentrated the
packing business that, by 1905, they slaughtered practically all the cattle
shipped to Western centers and furnished most of the beef consumed in the
large cities east of Pittsburgh. The "Tobacco Trust" had largely
monopolized both the wholesale and retail trade in this article of luxury
and had also made extensive inroads into the English market. The textile
industry had not only transformed great centers of New England into an
American Lancashire, but the Southern States, recovering from the
demoralization of the Civil War, had begun to spin their own cotton and to
send the finished product to all parts of the world. American shoe
manufacturers had developed their art to a point where "American shoes" had
acquired a distinctive standing in practically every European country.
It is hardly necessary to describe in detail each of these industries. In
their broad outlines they merely repeat the story of steel, of oil, of
agricultural machinery; they are the product of the same methods, the same
initiative. There is one branch of American manufacture, however, that
merits more detailed attention. If we scan the manufacturing statistics of
1917, one amazing fact stares us in the face. There are only three American
industries whose product has attained the billion mark; one of these is
steel, the other food products, while the third is an industry that was
practically unknown in the United States fifteen years ago. Superlatives
come naturally to mind in discussing American progress, but hardly any
extravagant phrases could do justice to the development of American
automobiles. In 1902 the United States produced 3700 motor vehicles; in
1916 we made 1,500,000. The man who now makes a personal profit of not far
from $50,000,000 a year in this industry was a puttering mechanic when the
twentieth century came in. If we capitalized Henry Ford's income, he is
probably a richer man than Rockefeller; yet, as recently as 1905 his
possessions consisted of a little shed of a factory which employed a dozen
workmen. Dazzling as is this personal success, its really important aspects
are the things for which it stands. The American automobile has had its
wild-cat days; for the larger part, however, its leaders have paid little
attention to Wall Street, but have limited their activities exclusively to
manufacturing. Moreover, the automobile illustrates more completely than
any other industry the technical qualities that so largely explain our
industrial progress. Above all, American manufacturing has developed three
characteristics. These are quantity production, standardization, and the
use of labor-saving machinery. It is because Ford and other manufacturers
adapted these principles to making the automobile that the American motor
industry has reached such gigantic proportions.
A few years ago an English manufacturer, seeking the explanation of
America's ability to produce an excellent car so cheaply, made an
interesting experiment. He obtained three American automobiles, all of the
same "standardized" make, and gave them a long and racking tour over
English highways. Workmen then took apart the three cars and threw the
disjointed remains into a promiscuous heap. Every bolt, bar, gas tank,
motor, wheel, and tire was taken from its accustomed place and piled up, a
hideous mass of rubbish. Workmen then painstakingly put together three cars
from these disordered elements. Three chauffeurs jumped on these cars, and
they immediately started down the road and made a long journey just as
acceptably as before. The Englishman had learned the secret of American
success with automobiles. The one word "standardization" explained the
mystery.
Yet when, a few years before, the English referred to the American
automobile as a "glorified perambulator," the characterization was not
unjust. This new method of transportation was slow in finding favor on our
side of the Atlantic. America was sentimentally and practically devoted to
the horse as the motive power for vehicles; and the fact that we had so few
good roads also worked against the introduction of the automobile. Yet
here, as in Europe, the mechanically propelled wagon made its appearance in
early times. This vehicle, like the bicycle, is not essentially a modern
invention; the reason any one can manufacture it is that practically all
the basic ideas antedate 1840. Indeed, the automobile is really older than
the railroad. In the twenties and thirties, steam stage coaches made
regular trips between certain cities in England and occasionally a much
resounding power-driven carriage would come careering through New York and
Philadelphia, scaring all the horses and precipitating the intervention of
the authorities. The hardy spirits who devised these engines, all of whose
names are recorded in the encyclopedias, deservedly rank as the "fathers"
of the automobile. The responsibility as the actual "inventor" can probably
be no more definitely placed. However, had it not been for two
developments, neither of them immediately related to the motor car, we
should never have had this efficient method of transportation. The real
"fathers" of the automobile are Gottlieb Daimler, the German who made the
first successful gasoline engine, and Charles Goodyear, the American who
discovered the secret of vulcanized rubber. Without this engine to form the
motive power and the pneumatic tire to give it four air cushions to run on,
the automobile would never have progressed beyond the steam carriage stage.
It is true that Charles Baldwin Selden, of Rochester, has been pictured as
the "inventor of the modern automobile" because, as long ago as 1879, he
applied for a patent on the idea of using a gasoline engine as motive
power, securing this basic patent in 1895, but this, it must be admitted,
forms a flimsy basis for such a pretentious claim.
The French apparently led all nations in the manufacture of motor vehicles,
and in the early nineties their products began to make occasional
appearances on American roads. The type of American who owned this imported
machine was the same that owned steam yachts and a box at the opera. Hardly
any new development has aroused greater hostility. It not only frightened
horses, and so disturbed the popular traffic of the time, but its speed,
its glamour, its arrogance, and the haughty behavior of its proprietor, had
apparently transformed it into a new badge of social cleavage. It thus
immediately took its place as a new gewgaw of the rich; that it had any
other purpose to serve had occurred to few people. Yet the French and
English machines created an entirely different reaction in the mind of an
imaginative mechanic in Detroit. Probably American annals contain no finer
story than that of this simple American workman. Yet from the beginning it
seemed inevitable that Henry Ford should play this appointed part in the
world. Born in Michigan in 1863, the son of an English farmer who had
emigrated to Michigan and a Dutch mother, Ford had always demonstrated an
interest in things far removed from his farm. Only mechanical devices
interested him. He liked getting in the crops, because McCormick harvesters
did most of the work; it was only the machinery of the dairy that held him
enthralled. He developed destructive tendencies as a boy; he had to take
everything to pieces. He horrified a rich playmate by resolving his new
watch into its component parts--and promptly quieted him by putting it
together again. "Every clock in the house shuddered when it saw me coming,"
he recently said. He constructed a small working forge in his school-yard,
and built a small steam engine that could make ten miles an hour. He spent
his winter evenings reading mechanical and scientific journals; he cared
little for general literature, but machinery in any form was almost a
pathological obsession. Some boys run away from the farm to join the circus
or to go to sea; Henry Ford at the age of sixteen ran away to get a job in
a machine shop. Here one anomaly immediately impressed him. No two machines
were made exactly alike; each was regarded as a separate job. With his
savings from his weekly wage of $2.50, young Ford purchased a three dollar
watch, and immediately dissected it. If several thousand of these watches
could be made, each one exactly alike, they would cost only thirty-seven
cents apiece. "Then," said Ford to himself, "everybody could have one." He
had fairly elaborated his plans to start a factory on this basis when his
father's illness called him back to the farm.
This was about 1880. Ford's next conspicuous appearance in Detroit was
about 1892. This appearance was not only conspicuous; it was exceedingly
noisy. Detroit now knew him as the pilot of a queer affair that whirled and
lurched through her thoroughfares, making as much disturbance as a freight
train. In reading his technical journals Ford had met many descriptions of
horseless carriages; the consequence was that he had again broken away from
the farm, taken a job at $45 a month in a Detroit machine shop, and devoted
his evenings to the production of a gasoline engine. His young wife was
exceedingly concerned about his health; the neighbors' snap judgment was
that he was insane. Only two other Americans, Charles B. Duryea and Ellwood
Haynes, were attempting to construct an automobile at that time. Long
before Ford was ready with his machine, others had begun to appear. Duryea
turned out his first one in 1892; and foreign makes began to appear in
considerable numbers. But the Detroit mechanic had a more comprehensive
inspiration. He was not working to make one of the finely upholstered and
beautifully painted vehicles that came from overseas. "Anything that isn't
good for everybody is no good at all," he said. Precisely as it was Vail's
ambition to make every American a user of the telephone and McCormick's to
make every farmer a user of his harvester, so it was Ford's determination
that every family should have an automobile. He was apparently the only man
in those times who saw that this new machine was not primarily a luxury but
a convenience. Yet all manufacturers, here and in Europe, laughed at his
idea. Why not give every poor man a Fifth Avenue house? Frenchmen and
Englishmen scouted the idea that any one could make a cheap automobile. Its
machinery was particularly refined and called for the highest grade of
steel; the clever Americans might use their labor-saving devices on many
products, but only skillful hand work could turn out a motor car. European
manufacturers regarded each car as a separate problem; they individualized
its manufacture almost as scrupulously as a painter paints his portrait or
a poet writes his poem. The result was that only a man with several
thousand dollars could purchase one. But Henry Ford--and afterward other
American makers--had quite a different conception.
Henry Ford's earliest banker was the proprietor of a quick-lunch wagon at
which the inventor used to eat his midnight meal after his hard evening's
work in the shed. "Coffee Jim," to whom Ford confided his hopes and
aspirations on these occasions, was the only man with available cash who
had any faith in his ideas. Capital in more substantial form, however, came
in about 1902. With money advanced by "Coffee Jim," Ford had built a
machine which he entered in the Grosse Point races that year. It was a
hideous-looking affair, but it ran like the wind and outdistanced all
competitors. From that day Ford's career has been an uninterrupted triumph.
But he rejected the earliest offers of capital because the millionaires
would not agree to his terms. They were looking for high prices and quick
profits, while Ford's plans were for low prices, large sales, and use of
profits to extend the business and reduce the cost of his machine. Henry
Ford's greatness as a manufacturer consists in the tenacity with which he
has clung to this conception. Contrary to general belief in the automobile
industry he maintained that a high sale price was not necessary for large
profits; indeed he declared that the lower the price, the larger the net
earnings would be. Nor did he believe that low wages meant prosperity. The
most efficient labor, no matter what the nominal cost might be, was the
most economical. The secret of success was the rapid production of a
serviceable article in large quantities. When Ford first talked of turning
out 10,000 automobiles a year, his associates asked him where he was going
to sell them. Ford's answer was that that was no problem at all; the
machines would sell themselves. He called attention to the fact that there
were millions of people in this country whose incomes exceeded $1800 a
year; all in that class would become prospective purchasers of a low-priced
automobile. There were 6,000,000 farmers; what more receptive market could
one ask? His only problem was the technical one--how to produce his machine
in sufficient quantities.
The bicycle business in this country had passed through a similar
experience. When first placed on the market bicycles were expensive; it
took $100 or $150 to buy one. In a few years, however, an excellent machine
was selling for $25 or $30. What explained this drop in price? The answer
is that the manufacturers learned to standardize their product. Bicycle
factories became not so much places where the articles were manufactured as
assembling rooms for putting them together. The several parts were made in
different places, each establishment specializing in a particular part;
they were then shipped to centers where they were transformed into
completed machines. The result was that the United States, despite the high
wages paid here, led the world in bicycle making and flooded all countries
with this utilitarian article. Our great locomotive factories had developed
on similar lines. Europeans had always marveled that Americans could build
these costly articles so cheaply that they could undersell European makers.
When they obtained a glimpse of an American locomotive factory, the reason
became plain. In Europe each locomotive was a separate problem; no two,
even in the same shop, were exactly alike. But here locomotives are built
in parts, all duplicates of one another; the parts are then sent by
machinery to assembling rooms and rapidly put together. American harvesting
machines are built in the same way; whenever a farmer loses a part, he can
go to the country store and buy its duplicate, for the parts of the same
machine do not vary to the thousandth of an inch. The same principle
applies to hundreds of other articles.
Thus Henry Ford did not invent standardization; he merely applied this
great American idea to a product to which, because of the delicate labor
required, it seemed at first unadapted. He soon found that it was cheaper
to ship the parts of ten cars to a central point than to ship ten completed
cars. There would therefore be large savings in making his parts in
particular factories and shipping them to assembling establishments. In
this way the completed cars would always be near their markets. Large
production would mean that he could purchase his raw materials at very low
prices; high wages meant that he could get the efficient labor which was
demanded by his rapid fire method of campaign. It was necessary to plan the
making of every part to the minutest detail, to have each part machined to
its exact size, and to have every screw, bolt, and bar precisely
interchangeable. About the year 1907 the Ford factory was systematized on
this basis. In that twelve-month it produced 10,000 machines, each one the
absolute counterpart of the other 9,999. American manufacturers until then
had been content with a few hundred a year! From that date the Ford
production has rapidly increased; until, in 1916, there were nearly
4,000,000 automobiles in the United States--more than in all the rest of
the world put together--of which one-sixth were the output of the Ford
factories. Many other American manufacturers followed the Ford plan, with
the result that American automobiles are duplicating the story of American
bicycles; because of their cheapness and serviceability, they are rapidly
dominating the markets of the world. In the Great War American machines
have surpassed all in the work done under particularly exacting
circumstances.
A glimpse of a Ford assembling room--and we can see the same process in
other American factories--makes clear the reasons for this success. In
these rooms no fitting is done; the fragments of automobiles come in
automatically and are simply bolted together. First of all the units are
assembled in their several departments. The rear axles, the front axles,
the frames, the radiators, and the motors are all put together with the
same precision and exactness that marks the operation of the completed car.
Thus the wheels come from one part of the factory and are rolled on an
inclined plane to a particular spot. The tires are propelled by some
mysterious force to the same spot; as the two elements coincide, workmen
quickly put them together. In a long room the bodies are slowly advanced on
moving platforms at the rate of about a foot per minute. At the side stand
groups of men, each prepared to do his bit, their materials being delivered
at convenient points by chutes. As the tops pass by these men quickly bolt
them into place, and the completed body is sent to a place where it awaits
the chassis. This important section, comprising all the machinery, starts
at one end of a moving platform as a front and rear axle bolted together
with the frame. As this slowly advances, it passes under a bridge
containing a gasoline tank, which is quickly adjusted. Farther on the motor
is swung over by a small hoist and lowered into position on the frame.
Presently the dash slides down and is placed in position behind the motor.
As the rapidly accumulating mechanism passes on, different workmen adjust
the mufflers, exhaust pipes, the radiator, and the wheels which, as already
indicated, arrive on the scene completely tired. Then a workman seats
himself on the gasoline tank, which contains a small quantity of its
indispensable fuel, starts the engine, and the thing moves out the door
under its own power. It stops for a moment outside; the completed body
drops down from the second floor, and a few bolts quickly put it securely
in place. The workman drives the now finished Ford to a loading platform,
it is stored away in a box car, and is started on its way to market. At the
present time about 2000 cars are daily turned out in this fashion. The
nation demands them at a more rapid rate than they can be made.
Herein we have what is probably America's greatest manufacturing exploit.
And this democratization of the automobile comprises more than the acme of
efficiency in the manufacturing art. The career of Henry Ford has a
symbolic significance as well. It may be taken as signalizing the new
ideals that have gained the upper hand in American industry. We began this
review of American business with Cornelius Vanderbilt as the typical
figure. It is a happy augury that it closes with Henry Ford in the
foreground. Vanderbilt, valuable as were many of his achievements,
represented that spirit of egotism that was rampant for the larger part of
the fifty years following the war. He was always seeking his own advantage,
and he never regarded the public interest as anything worth a moment's
consideration. With Ford, however, the spirit of service has been the
predominating motive. His earnings have been immeasurably greater than
Vanderbilt's; his income for two years amounts to nearly Vanderbilt's total
fortune at his death; but the piling up of riches has been by no means his
exclusive purpose. He has recognized that his workmen are his partners and
has liberally shared with them his increasing profits. His money is not the
product of speculation; Ford is a stranger to Wall Street and has built his
business independently of the great banking interest. He has enjoyed no
monopoly, as have the Rockefellers; there are more than three hundred
makers of automobiles in the United States alone. He has spurned all
solicitations to join combinations. Far from asking tariff favors he has
entered European markets and undersold English, French, and German makers
on their own ground. Instead of taking advantage of a great public demand
to increase his prices, Ford has continuously lowered them. Though his
idealism may have led him into an occasional personal absurdity, as a
business man he may be taken as the full flower of American manufacturing
genius. Possibly America, as a consequence of universal war, is advancing
to a higher state of industrial organization; but an economic system is not
entirely evil that produces such an industry as that which has made the
automobile the servant of millions of Americans.