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Part 1 Ford Motor Company

“Auto racing began five minutes after the second car was built.”

— Henry Ford

On June 23, 1909, Bert Scott negotiated his battered Ford Model T through the side streets of Seattle, Washington, to the Drumheller Fountain, the centerpiece of the Alaska-Yukon-Pacific Exhibition of 1909. Scott had just covered over 4,100 miles in 22 days and 55 minutes at an average speed of 7.75 miles per hour in his quest to capture a $2,000 prize and a trophy worth $3,500. First to arrive, hours ahead of the second place finisher—a much bigger, more powerful Shawmut—Scott and his co-pilot, C. J. Smith, were hailed as heroes, and the publicity of finishing first launched the Ford Motor Company into the permanent landscape of American culture, while the Shawmut company, and its car, sank into the dark recesses of obscurity.

So what made Ford so special? How did Ford survive and become a household name while so many others faded into obscurity?

In all likelihood, it wasn’t the car. It was the person behind it.

The Man Behind the Motor

On July 30, 1863, William and Mary Ford welcomed their first son, Henry, into Greenfield Township, Michigan. Henry leaned toward the mechanical even from an early age. His family considered him to be a slacker, skipping out on helping with the family farm to watch threshing machines or to disassemble his siblings’ wind-up toys. During these formative years Ford also began to develop anti-semitic prejudices.

In 1879, Henry set out to find work in a machine shop. His first job was milling brass valves at $2.50 a week, but after a short time he moved to Detroit Dry Dock Company and was assigned to the engine works. In his spare time he tinkered with parts to make his own engine and worked in a watch repair shop.

It should also be noted that Ford took his anti-semitic beliefs with him. In 1918 he purchased The Dearborn Independent newspaper and in 1920 began publishing a series of articles accusing the Jewish community of causing many of the problems facing the United States at the time. Faced with numerous lawsuits charging libel Ford shut the paper down in 1927. Still, however, in 1938, Hitler would award him the Grand Cross of the German Eagle, a medal given to foreigners sympathetic to Nazism.

Reinventing the Wheel

During a brief return trip home on the farm, Ford helped a neighbor rein in a modern steam-powered tractor and became enamored with the idea of building his own. The big problem in those days was the unwieldy weight and size of the steam engine. By 1885, Ford was obsessed with the idea of a “horseless carriage” but was still struggling with a suitable power plant when a friend asked him to take a look at one of the new single-cylinder Otto gasoline engines from England. After that, he spent hours in his shop developing his own version of the Otto, but he could never generate enough power from the single cylinder. Through a process of trial and error, he finally modified his design to use two cylinders, but he couldn’t get the thing to run. Giving up, however, wasn’t in his nature.

Henry Ford in 1892 with one of his first automobile models.

Chronicle/Alamy Stock Photo

In late 1891, Ford took a job with Edison Illuminating Company, maintaining the engines that provided electricity. During the days, he worked in his shop on the engine that would one day, he hoped, power his horseless carriage. Through connections at work, Ford was able to connect with Thomas Edison. After he described his work on what he called “the Quadricycle” Edison said something to the effect of, “You’re onto something!” That encouragement was all Ford needed to get back to work.

On Christmas Eve of 1893, Ford finally got his first rudimentary internal combustion engine to fire up. It was a small thing, clamped to his kitchen sink, and it belched smoke and fire, but it ran for fully 30 seconds and prompted Ford to work all the harder on his next version. During the following years, a group of experts gathered around Ford, intrigued with his idea, each contributing to the overall design. By 1896, several companies had come up with designs for a gas-powered engine and had even published their findings. On June 4, 1896, Ford rolled his first operational prototype, the Quadricycle, out of the shed behind his house, and with a little coaxing, fired it up and drove it around the streets of Detroit.

Ford had found the product that he wanted to mass-produce. He gathered a team around him and spent every penny he had on his second version, which he finished in 1898. He now had a marketable product, but he needed an organization and some way to mass-produce the thing, which meant he needed capital, so Ford the inventor stepped aside for Ford the businessman, and he created the Ford Motor Company.

Creating an Artificial Person

To incorporate literally means “to embody.” The word corporation comes from the Latin root “corpus,” or body. Legally, a corporation is a legal but artificial person, though it wasn’t always that way. Early corporations had to apply to a state legislature for a charter, which restricted the scope of the company’s operations, limited the amount of investment, and even specified how long the charter would be in effect. But as the pace of economic activity quickened, it proved cumbersome for legislatures to grant individual charters. As a result, state legislatures adopted general incorporation acts, which allowed any business to incorporate and removed limits on capitalization.

As American business grew, so did its power and influence, and corporate attorneys looked for loopholes and ways to free the corporate form of ownership from the legislative chains that bound it. In an 1886 decision, Santa Clara v. Southern Pacific Railroad Company, the court held that the 14th Amendment’s guarantee of due process applies to corporations. Subsequently, the 14th Amendment, enacted to protect rights of freed slaves, was used routinely to grant corporations constitutional “personhood.”

So by the end of the 19th century, as Ford was assembling his team and his automobile, he stood with others at the threshold of the industrial economy that would change the nation and the world. As his team of mechanics worked on the details of production, Ford began courting local investors, and raised enough capital to incorporate the Detroit Automobile Company on August 5, 1899. Papers for that corporation, filed with the county clerk, indicate that the company was capitalized at $150,000. Ford didn’t put any of his own money in; his shares were issued in exchange for his ideas and his prototype. The company foundered for reasons that are lost in time, but perhaps Ford just wasn’t quite ready to bring an actual automobile to market. The board of directors pulled the plug in January 1901. The next year, Ford created another company but abandoned it after only 3 months. Then, on June 16, 1903, Ford and his business partners incorporated the Ford Motor Company. This newest iteration was immediately profitable, with profits by October 1, 1903, of almost $37,000. By 1905, the company was making almost $300,000.

The original Model A came as a red, two-seater Runabout for $800, which would be the equivalent of just over $23,300 in 2020, adjusted for inflation. Subsequent models were simply named in order, with the Model C replacing the A (not all models went into production), and finally, in 1908, the Model T replaced the N and the S.

Racing into the Future

Ford was out making a name for himself and his product. People were pouring into the Grosse Pointe racetrack in Detroit to see the cars skidding through turns, belching smoke, and, occasionally, crashing spectacularly. The racing machines that Ford was designing would pave the way toward the modern look and feel of the automobile. But most importantly, Ford was becoming a household name, and that name was being associated with the new automobile. It was through racing that Ford met wealthy race aficionado Robert Guggenheim, and together they concocted an idea to propose a race across the country.

And so, concurrent with the opening of the Alaska-Yukon-Pacific Exhibition of 1909, the Seattle Automobile Club, the AYPE, the Automobile Club of America, along with Ford and Guggenheim, sponsored a transcontinental auto race from New York City to Seattle that would showcase the latest products of the automobile industry and emphasize the need for new and improved roadways across the nation.

Of the 35 contestants originally entered in the race, only 6 actually showed up at the starting line in New York. Ford had two entries, both Model Ts stripped of every nonessential item, making them the lightest competitors at about 1,200 pounds, but still the most underpowered at only 20 horsepower (about the equivalent of today’s average riding lawn mower engine).

Shawmut had entered a four-cylinder Runabout weighing in at 4,500 pounds but pushing a respectable (for the time) 45 horsepower. Also in the race were the Stearns Model 30-60, an Italian entry, and the Acme six cylinder, all comparable to the Shawmut in terms of size and strength.

One advantage Ford had over the other cars was a nascent network of dealers throughout the country. Although the rules dictated that only race-sanctioned repairs could be made, the Ford team quietly replaced an engine in Weiser, Idaho. So in spite of the fact that the heavy Shawmut had been ahead for most of the race, it was stuck in the mud on Snoqualmie Pass, just miles east of the finish line, and the lighter Ford passed it.

Five months later, race officials disqualified the now infamous Model T and awarded first place to the Shawmut, but Ford had already taken his place in history, and a little cheating wasn’t going to take that away from him.1

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