Odds and ends from THF Benson Library

[Rob]

Working on an article, and cleaning up a few odds and ends from THF, i thought these copies were interesting. Many historical accounts I read seem to suggest discord between the Dodges, Henry Ford and longtime équivalant of a modern Chief Financial Officer, James Couzens. I suspect at the height of FMC early growth, while these men were essentially “printing money,” they had a degree of affection and cooperation between each other.

First, a note from Couzens to the John Dodge, reimbursing for service rendered and paying for board meeting attendance. Couzens issues a $25.00 check for service rendered, because “I know you would never send a bill in”. $25 in 1904 is about the equivalent today of $625, so not exactly chump change, especially one year in to the history of the company.

Couzens finishing with “if you don not need it, then you can buy me a D______ next time you see me.” Considering the D with open underlining, and the reputation of the Dodge brothers, I suspect the D is followed by r-i-n-k.

Documents courtesy of The Henry Ford, all rights apply.

Some historical accounts read that Dodge Brothers were limited to “only” producing Model K motors and components when Henry Ford and investors started “Ford Manufacturing Co.” in early 1906. However, this letter spells out how many Model N transmissions and differentials Dodge Brothers were to deliver for the remainder of 1907. It also demonstrates how Ford was ramping up, as they became the world leader in number of cars produced during 1907:

Lastly, research has shown that the Model K was the sales leader for Ford in 1906, providing 85% of new car sales net revenue, in part due to good sales of the big six touring car, and in part due to slow production of the Model N. Ford 1907, the Model K was second in revenue production, behind the Model R and still slightly ahead of the Model N, giving Ford tremendous profits form all three 1907 models.

With this page from the 1908 independent audit, the Model K is still slightly leading the Model N in profit. It also demonstrates that models S and S Roadster were the real leaders as Ford transitioned to Model T production.

With 119 Model K sold, Ford net profit was over $540 per car. Again, in todays dollars, over $13,000 profit per car. While the sale of 119 units was not much compared with Models NRS, many carmakers were profitable with sales of 100 or more in a fiscal year.

Self-quarantining in eastern Nebraska

[DanTreace]

Rob

So interesting, thanks for posting, esp. the year end Sept 1908 summary.

Such good detail, and to those bean counters who just tabulate, bet they had no idea those tiny 2 sale units of the new ‘T’ ; that ended at loss of $32.42 , would be the future of fantastic revenue!

[Rob]

Thanks Dan,
I’ve often wondered where the three T sold prior to Oct 1, 1908 (two T and one “Landaulet”) went, and what they looked like? We may have a photo of the “Laundaulet,” as there’s a photo of a town car with an NRS style radiator out there. Ford was showing a few reporters and dealers their prototype T’s during the Detroit auto show held in late 1907. I believe they were located at the Ford Detroit branch store.

[Rob]

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[Kaiser]

Nice Rob, great to see the change in the letterhead, in the first letterhead Mack av. is the address and Henry F is the vice president, in the second letter Piquette is the address and the original names are blacked out and Henry Ford is now President so after the buy-out of Grey and adding one of the Dodge brothers to the board, and where did Malcolmson go ? he was still with the company in '07 i think..

[DHort]

wonder why the commercial expense for the Model S was $37/car, and the Model S Roadster was $15/car.

[Rob]

Leo, I’d have to check, but I believe John Dodge was on the board from the 1903 start. Gray died and his son came on the board in the summer of 1906, near the same time Malcomson sold his shares, mostly to Henry Ford and I believe a few went to Couzens. I believe Bennet and one or two other investors sold at the same time as Malcomson.

Malcomson received about $175,000 in the summer of 1906 for his shares. His 1903 investment was $5,000 (I don’t believe he actually put cash in, but committed to this amount, however he had already funded Ford when their partnership began in December or January prior to this). In todays dollars, about 4.37 million. Not a bad return on investment. And this doesn’t include the dividends he’d received up to that time.

Many historians make it sound as though Ford “forced’ Malcomson out. However, Ford and the entire board only demanded that Malcomson resign from the board, feeling, rightfully, that as a competitor, (he began the Aerocar company in October/November 1905, incorporating in Dec 1905, and producing cars that competed price wise with the model K in early 1906). Malcomson received a tremendous amount of money for his shares, and promptly ploughed the money into his soon to fail Aerocar company.

I’ll put more up on this in a bit.

Dave, I wish I were an auditor, but my layman’s guess is that “Commercial Costs” includes several fixed costs, and the S had been sold (and so maybe assigned advertising/branch store/etc.) since September 1907, whereas the Model S Roadster wasn’t advertised and distributed until early spring of 1908. Add to this more S Roadsters so less commercial cost per unit? Another complicating factor to this number may be that as of June 1908, Ford announced they would only produce Model S roadsters and Model K roadsters, ending production of S, R, N and K tourings. The reason given was because Picquette was gearing up for the Model T, and we know the yard was full of T components by the summer of 1908.