4th - "Ford and Malcomson, fourth installment, and final thoughts."
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3rd - "The last straw, Ford and Malcomson," October 1905 through January 1906:
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2nd - "Henry Ford and A.Y. Malcomson 1905:"
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1st - "The day Alexander Malcomson lost:"
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As we know, Henry Ford and Ford Motor Co. went on to unparalleled success. Alexander Malcomson, on the other had, struggled throughout the remainder of his business life. In 1919 the letter was written by an agent of Henry Ford. I obtained a copy from "The Henry Ford" several years ago. Unfortunately, I don't have the authors name (I thought it was a newspaper reporter, and hope to check when Benson Library opens again). The author indicates he is following up on a request by Henry Ford to talk with Alexander Malcomson. In many ways, this is a letter from Alexander Malcomson to his former business partner. The page copies are difficult to read, so a transcript follows:
Following your telegraphic instrucional communicated with Mr. A. Y. Malcomson and had a long interview with him at the Detroit Athletic Club on Monday Night and I am herewith endeavoring to communicate to you a condensed statement of his talk, which lasted several hours.
He seemed to be somewhat reticent to acquaint me with the details at first stating that he had given George, his son the papers and a letter to you, and sent him out to see you, and therefore did not consider it necessary to go into it with me, feeling that perhaps I not being familiar with what had transpired so long ago, I would not be in a position to view it from his standpoint.
However after considerable talk he finally opened up and spoke along the following lines. He felt that the active support he gave in assisting to finance the organization of the Ford Motor Company should have brought him more than he realized therefrom. He also stated that he had never bothered you about any business matters, but the time had finally come when he did not feel that he could let the opportunity pass to advise you of his feeling in the matter. He went over the early history of the organization of the Ford Motor Company, how he became acquainted with you and his efforts in getting other stockholders to contribute and organize the company. That he was obliged to guarantee the purchase of tires, steel etc. and also Dodge Bros contract who could not obtain any credit at their bank unless he did so, all of which he did willingly at the time. He went on to tell about the early differences arising about Mr. Couzens, and after the company had been organized and was proceeding, Mr. Couzens made an appointment to meet him one day and requested an option on all of his stock, and after spending an entire half day with him he finally gave him the option on his holdings in the Ford Motor Company for $75,000.00. The next day, he said, Mr. Couzens phoned him and said that Mr. Ford understood that the deal included the Canadian stock as well. Mr. Malcomson said that this was not so and did not so understand it, and would not consent to it, but after Couzens insisted and refused to go on with the deal he finally gave in. In the meantime he pruchased the stock of Chas. H. Bennett and V. C. Fry to a total of 10 shares.
When the notes were about to become due (those given in payment of
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his stock $75,000) Mr. Couzens phoned him and said Mr. Ford did not intend to pay them unless he gave over the rest of the stock he had acquired. This, he said was a great surprise to him.
The notes had been discounted at his bank and he had used the proceeds, and the bank would therefor look to him to make good, but Couzens said that you were to get all of his stock and the notes would not be taken up unless he gave up the stock. He therefore felt that you had received his Canadian stock without paying for it, as he never intended to give it up in this transaction.
As time went on he was chided by bankers and other business men who told him he made a big mistake and that the deal was not just, and even up to this time he says it is quite frequent that people bring the matter to his attention and ask him how much he would have made out of his original investment had he not sold out, and mentioned that as near as he could estimate it would run up to about $75,000,000.00. He also made reference to his daughter Grace who died some time ago, that Mrs. Ford was the last one to bring flowers to her at the hospital. Shortly after her death you picked him up at the corner of Woodward and Seeward Aves. and took him downtown to his office. It was while riding with you that he expressed a desire to build an office building on the site of the present Kresge Building, the lot which he then owned and this was to be a memorial for his daughter. This he said struck you as a splendid idea, and you promised to see him about it making an appointment setting the hour and date, but you did not keep the appointment. He could not understand this because you seemed to be in earnest about it.
He referred also to his last visit to the Ford Motor Company at which time he wanted to borrow some money in connection with a mine property he had optioned in Kentucky. As a result of your not grtanting the loan he lost somewhere in the neighborhood of $35,000.00 which represented the option price, engineers fees and other expenses included, which he could not afford to lose.
This resulted in a very severe disappointment to him, and he felt quite bitter toward W. H. Smith, whom he thought had advised you not to consider it. This property had since been sold to parties in Atlanta, Ga. who cleaned up quite a sum of money out of it, which would have been his if you had extended the loan.
The business of A. Y. Malcomson Co. was consolidated with the
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United Fuel & Supply Co. and I am told by him that he has a one-third interest in the company which represents total assets of about $3,500,000 with a bonded indebtedness of about $1,500,000 leaving a net worth of aproximately $2,000,000, which leaves his interest valued at about $666,000.000. He also bought the old Wayne County Bank Building on which he carries a mortgage of something like $160,000 or $170,000: This has been quite a burden to him owing to Oakman's Ford Boulevard scheme having met with failure. The Union Trust Company took over his (Oakman's) affairs and they consequently vacated his building at the time when it could not be rented which meant a loss of income from the building, notwithstanding the facty that taxes and interest had to be paid.
He bought out the H. Houghten Supply Co. and gave notes in payment of their business which have embarrassed him considerably as he expected to pay them out of his dividends which he expected to receive from the United Fuel & Supply Co. Owing to the poor year they had on account of the coal situation and the falling off of trade in building supplies they did not pay the dividend he expected to receive.
He salary is about $20,000 to $25,000 per year. His total debts aggregate about $1,000,000 or very close to this figure, which he claims is more than he can carry.
I am therefore inclined to believe that he is in a pretty close financial straits. He was worried considerably over it and is desirous of going away for a rest. He is rather nervous seems to show the strain, as a result of these matters preying on his mind.
People representing the Chicago Tribune have been to see him requesting a story of the Ford Motor Company or his early connection with it. Representatives of eastern papers have also tried to get him to talk but he says he has stood by you and steadfastly refused to say a word about it.
He feels quite bitter toward Mr. Couzens, being of the opinion that Couzens has succeeded in turning you against him in the earlier days.
I tried to get him to make an expression as to what he really thought he was entitled to or what he expected you to do for him, and he answered that you had received his Canadian stock for nothing and this would have helped him out considerably, and if it had been retained by
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him, the earnings as well as the appreciated value would have meant a great deal to him. He contracted how little some of the other stockholders had contributed to the success of the company with the untiring efforts he gave and the risk he had undertaken, notwithstanding which they had become wealthy and he received but a nominal compensation for his interest therein.
He admitted that there was absolutely no legal responsibility on your part, neverless it was a matter of high moral consideration with him, and that your success was due primarily to what he had done and through his standing by you in the beginning, also that he had made a serious mistake in permitting himself to sell out on Couzen's solicitation.
I am very much of the opinion, as result of the interview, that the banks are somewhat worried about his financial affairs, and it would not at all surprise me if this is a scheme on their part to get him to go to you for assistance in order that they may get out from under.
His attitude however is not vindictive. He feels that the matter should be put up to you for your fair judgment, in which case he is of the opinion you will give him some liberal and substantial consideration.
I did not make any attempt to discuss the merits from any angle whatever believing that you merely desired a report in detail concerning the matter about which he wanted to reach you. Therefor I left him by saying that I thought the matter was one which could not be readily transmitted to you by mail and I thoght it best to await your return, and will leave it rest unless you instruct otherwise.
Jan. 28th, 1919
No person other than myself is familiar with the contents of this report as I have written it at home and same has been forwarded to Mr. Edsel Ford by registered mail.
This letter paints an almost desperate Alexander Malcomson. Later today, I'll respond to the highlighted areas from this letter with additional information and/or corroboration, hopefully bringing some context and perspective.
