Henry Ford, Alexander Malcomson, 1905

[Rob]

This is the second thread in what may be (I never know....... ) three threads.

1905 is a pivotal year for Ford Motor Co., as well as for the individual fortunes of Ford Motor Company's two largest investors. A few things I'd like to recap. Henry Ford and Alexander Malcomson entered into partnership to build motor cars in 1902. By late spring 1903, it was evident that additional capital was needed for the two men to realize their hope to produce a viable, profitable car. Malcomson had invested about $7,000 of his own funds, and according to reports, was strapped for additional cash, as his primary business, wholesale and retail coal, had him completely leveraged. As a result, the other original investors joined the two men, creating Ford Motor Co.. Capitalized for $100,000, only about $28,000 (if my memory serves, and it often doesn't), with several investors who had not put in their pledged investment dollars too.

Henry Ford and A. Y. Malcomson each owned 25.5% of FMC shares, equally. The next largest shareholder was President John Gray, I believe with about 10% of shares. John and Horace Dodge owned a combined 10% (5% each), and several other shareholders held lesser percents. One investor, who will be key to this story is Charles H. Bennett, investor and employee of Daisy Air Rifle. He will play a significant role later.

During 1904, Henry Ford had rebuilt the wrecked 999 (actually Arrow, the twin to the more famous 999), and set the world record mile time, running on the ice of Lake St. Claire in the winter of 1904. Ford, and Ford Motor Co. were once again recognized as a famous designer of fast racers. During this time, Henry Ford was already at work on his next "space annihilator," a six cylinder racer he began in late 1903.

1905 kicks off with Ford Motor Company building and promoting three new models for model (and fiscal) year 1905. The 10 hp Model C, that used the same 10 hp motor as the Model A, the new 20 hp Model B, and 12 hp Model F. While the Model F was a little later in development, an example, as well as models B and C were demonstrated at the New York Auto Show in January, as well as the other major auto shows of early 1905. Below, the John Wanamaker Ford booth at the 1905 New York auto show. The Model F is to the left of the booth, Model C to the right in back, and Model B to the right front. This Model B has running boards, indicating the step plate Model B appears to have had a short run:

At this time, as Henry Ford is preparing the six cylinder racer to compete at Ormond (Daytona) Florida, some historians begin to associate Alexander Malcomson as a driving force in FMC's production of Models B and eventually K. Below is an excerpt from page 275 of Allan Nevins excellent book, "Ford, The Times, the Man, the Company. In this excerpt, author Nevins wrote "Malcomson, however, had fallen in love with the design of the much costlier six-cylinder Model K, of which he had high expectations."

We are able to put Henry Ford, and Alexander Malcomson together with the six cylinder, and early on. Below is an article that indicates Mr. Malcomson accompanied Ford, Couzens, Wills and others to Ormond Beach for the unveiling of the Ford six-cylinder racer in February, 1905.

Maybe Malcomson "had fallen in love with the design of the ............ six-cylinder:"

However, at the time, only one man drove the six cylinder racer:

Next, I'll compare the schedules of both men as well as key events as Ford Motor Company successfully markets their three 1905 automobiles.

[Rob]

While Malcomson, along with Couzens and Wills joined Henry Ford at the Ormond racing meet, I've not found any involvement or record of them in photos. Ford makes headlines at home as well as nationally with his new six-cylinder racer:

While warming up the racer before the meet, Barney Oldfield and Alexander Winton comment on the racer:

Below, Henry Ford beside FMC President John Gray, with the six cylinder racer crankshaft, 1905. ("Ford, The Times, the Man, the Company," Allan Nevins, 1954, pg. 290)

Meanwhile, Ford Motor Company was building models B, C and F, delivering them around the country and to foreign locations:

[DHort]

If I had a picture of a B,C, and F, I would add them here. I know I saw them at Piquette, but did not take pictures.

[Rob]

1905 began as a "normal" year with Ford Motor Co. The first Board of Directors (BOD) meeting didn't include Mr. Malcomson, and business included approving the sale of Model B to Ford of Canada at a 25% discount (instead of shipping components), and setting the retail price of Model F at $1200:

February 3rd 1905 the BOD included Malcomson, but not Ford. Mr. Malcomson moved that a contract be submitted to Dodge Bros., "subject however to the approval and signature of Mr. Ford." It appears to me everyone was "playing nicely...."

February 13, 1905; Ford and Malcomson collaborated on a few motions. All good........

Meanwhile, during the first half of 1905, Malsomson's coal business is "busy." Law suits, late to bid meetings, generally what one would expect of the largest coal business in Michigan with interests in Canada and surrounding states:

Meanwhile, Henry Ford has not lost interest in racing is six cylinder racer, and still generates local and national headlines:

Next, FMC is printing money, Henry Ford heads to the beach, and A. Y. Malcomson hires an assistant.

[Rob]

1905 was shaping up to be a banner year for Ford Motor Co. While the price was reduced on the two cylinder "C" and "F" in late May to stimulate sales, Ford Motor Company was reported to be approaching the rank of number two auto manufacturer. In the article below, Henry Ford is acclaimed, and FMC is reported to be approaching sales of 2,100 runabouts and 500 touring cars, with total sales of about two million dollars. A good piece, with minor mention of A. Y. Malcomson:

Meanwhile, the company was making money. Lots of money. At the June 14, 1905 board meeting, a 100% dividend was approved by the board. The dividend was motion by J. W. Anderson, seconded by Henry Ford. At the same board meeting, A. Y. Malcomson reported on his trip to western cities for the company. An accompanying newspaper blurb mentions he and Metzger staying at a Chicago hotel a few days before the board meeting.

The 100% dividend meant 25.5% of $100,000 to both Henry Ford and A. Y. Malcomson, or about $790,000 in todays dollars.

At the July 22, 1905 board meeting, a motion for another 100% dividend was made, by Malcomson. Henry Ford seconded the motion. President John Gray was the lone dissent. In just over a month, A. Y. Malcomson and Henry Ford took home the equivalent of just over 1.5 million dollars.

At the same meeting, Malcomson moved, and Ford seconded, that Secretary James Cousens be "empowered to make temporary arrangements for a branch to continue the business there. Carried."

If there was a "rift" between Malcomson, Ford and Couzens as reported by some historians, it doesn't appear to have surfaced, at least during the process of making motions and carrying out business.

In August, Alexander Malcomson hires an assistant who "Will Manage All of A. Y. Malcomson's Coal Enterprises." Maybe Malcomson is going to slow down? Take life easier?

Finally, in early September, a Detroit Free Press real estate transaction article writes "A. Y. Malcomson Buys a Beautiful Home." At the bottom the same article, Henry Ford (as well as W. E. Metzger) has bought two lots in the last two weeks where he will build a new home.

Life is good for the Ford Motor Co. investors. Especially for the two largest shareholders, Ford and Malcomson.

What could go wrong?

Next, "It hits the fan."

[Rob]

I meant to interject this. While the Model B was a one year model (as was the Model C), and had nowhere near the performance capabilities of the Model K, I did find one instance of the Model B racing during this time frame.

The driver? Henry Ford. On a 1/2 mile track, the B averaged a mile in just under 42 mph, the best mile time of the day:

[Rob]

The remainder of Fiscal Year 1905 (through September) is more of the same. Alexander Y. Malcomson has hired an assistant, yet Detroit headlines follow his business and personal moves. Below, articles tell us he has bought office frontage in downtown Detroit (there will be more on this at the finish). He also purchases a lakeside cottage within an hour of the city, and continues business matters (law suit with a railroad and coal contractors).

Meanwhile, Henry Ford is making his last great push to set records for 1905 with his newly revamped six cylinder racer. The horsepower has been increased and the machine lowered. In late August he joins Walter Christie, Louis Chevrolet (Fiat) and A. L. Cambell (Darracq) to attempt world and American mile and kilometer speed records.

In the first article below, as Ford leaves for the beach races, FMC President John Gray says what other FMC investors may have thought, "I hope he will not try it." Said John S. Gray, president of the company, last night. "I am afraid to have him make the trial."

But Henry Ford, along with Frank Kulick, did compete with the racer. On one occasion they broke the world competition mile record, only to have it disallowed after the Darracq driver Cambell filed a protest:

Meanwhile, Ford Motor Company was ending their best fiscal year by far. With 200% dividends to investors, and moving into the top five in sales in the industry, the future looked bright. The company was planning two new models fort 1906, and both would be widely acclaimed in the industry, and major departures from their three 1905 models. FMC was also moving from one year models of 1905, to models K and N, that would form the nucleus of a three year plan.

I've often wondered how Alexander Malcomson was doing with this? He was used to being a "big fish" in the relatively small business world of Detroit. Now, even though he was an equal partner to Henry Ford in terms of ownership, the company he helped form, but named "Ford," was becoming nationally and internationally known. Henry Ford was a nationally known figure. Meanwhile, Alexander Malcomson was relatively unknown outside Detroit business circles. As it turns out, we all know the answer. But, I'll add a bit more in another thread, as we follow the story to it's conclusion, of the Malcomson-Ford partnership.

This French newspaper "L'Auto" ran an article publishing automobile sales in United States eastern states as of July, 1905. Ford Motor Company was moving up, and becoming a force in the indurstry:

[George House]

Here’s one.....