MTFCA Forum

The four preceding links, from last to first.

4th - "Ford and Malcomson, fourth installment, and final thoughts."
viewtopic.php?f=2&t=31226

3rd - "The last straw, Ford and Malcomson," October 1905 through January 1906:
viewtopic.php?f=2&t=31175

2nd - "Henry Ford and A.Y. Malcomson 1905:"
viewtopic.php?f=2&t=31107

1st - "The day Alexander Malcomson lost:"
viewtopic.php?f=2&t=31027


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.

This, I have read before. However, it certainly needed to be included here in the Malcomson story. It sounds as though he went from leveraging one bad deal after another. Often hoping to pull roses from someone else's manure pile.
I am sure there is more to the stock sale story, from other sides.
Thanks again Rob!
W2

Wayne, I agree. This letter is damning, sad, poignant and compelling all at the same time. Like all of us, Alexander Malcomson and Henry Ford must have been intriguing, multi-dimensional men. Unfortunately, I think the lens of history becomes one or two dimensional at best, and we forget these men lived, loved, and strived for the same things we all do. And as with us all, were products of their time and environment.

It seems to me Alexander Malcomson had two primary desires, to make money and be known as a mover and shaker in the business world. Unfortunately, beginning with his Aerocar venture, his investments and schemes often didn't go well. I'm going to address a couple of the highlighted areas of the letter (bold). My goal is to put a few events in context, and paint a picture of a complicated, and finally defeated man, as well as contrast him with his former partner, Henry Ford. Finally, I'm going to present a question that anyone who may be reading is invited to give their opinion to. It's a question I find myself pondering, and thinking to myself, "Did He?"

When I first read this letter, I was struck by the portion that mentions Mrs. Ford being the last person to take flowers to Mr. Malcomson's dying daughter in the hospital. At the time I read it, my assumption was this was some years after the breakup of Malcomson and Ford, and time had to an extent healed what must surely have been a heated rift between the two men. However, as with many things, I should have looked into this earlier.

Below is a photo (from an article) of Alex Malcomson at the wheel of a 1906 Aerocar. The article is dated April 5, 1906. Beside him is his young daughter, Grace:


A bit of research revealed this poor little girl passed in early 1908. The Fords, at least Mrs. Ford, were on terms such that she was the last to bring flowers to the stricken girl in the hospital (see excerpt from the Malcomson letter below). Does this tell us the breakup wasn't as bitter as we may think? At least Mrs. Ford and the Malcomson family seemed to be on good terms.

What's more, this is at the time when Aerocar is failing, going down to bankruptcy for the second and final time in three years. Mr. Malcomson stated to the reporter, "Shortly after her death you (Henry Ford) picked him (Malcomson) up at the corner of Woodward and Seward Aves., and took him downtown to his office."

Let's think about this a moment. If these two were bitter enemies, if Malcomson had forced Ford to produce cars he didn't wish to, and then secretly started a competing concern, would Henry Ford stop, and offer a ride? If Malcomson had been unfairly "forced from the company," would he have accepted the offer of a ride? This is less than two years after Malcomson's shares were sold and he was out of FMC for good.

From the letter above: "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."


From the first part of Malcomson's letter, regarding his son George:
"he had given George, his son the papers and a letter to you, and sent him out to see you."

This sentence, early in the letter, indicates Alexander Malcomson entrusted his son to approach Henry Ford, and relay the information that is also in this letter, all the while admitting to himself, Henry Ford, and his son, his failures. In effect, he sent his son to approach Henry Ford, and ask for money from him. Not an easy thing for a man to do, and certainly not an easy thing to ask your son to do for you, I would think. This may become important as we near the end of this story, and A. Y. Malcomson's life.

A question I have is, wouldn't his son, and Malcomson's entire family, have despised Henry Ford? If they were aware of the blame Alexander Malcomson placed on Henry Ford for the many business losses and failures he endured, in no small part to his suggestion that Ford had not paid him what he was owed, loaned money when he thought Ford would, and otherwise assisted when Malcomson expected Ford's help, wouldn't the family be furious with Ford?

My guess is this would be a family who thought Henry Ford a dirty rotten scoundrel, as far as the way he dealt with their father and husband.

Next, the end comes, and leaves a lingering question.

Following the failure of Aerocar, Alex Malcomson continued his coal business, and followed up with numerous real estate, mining and other speculative business pursuits.

Saving his Aerocar plant from bankruptcy, he leased it to Hudson in 1909:

1910 business property purchase:
1913, more real estate purchases:
Below, Malcomson part of a large fuel and real estate company and held up by two robbers at gunpoint. Meanwhile, his children had large society weddings, and in 1922 his wife filed for alimony:


In late 1922, announcement of another society wedding for a daughter, and a 99 year lease deal for A. Y. Malcomson.

My guess is these were difficult years for Alexander Malcomson. Authors such as Allan Benson were writing biography's about the wealthiest man in the world, Henry Ford, and Malcomson's name was always included in the story of Ford Motor Company. I suspect to Malcomson's dismay, the story of his involvement and exit from FMC usually wasn't flattering. Below, the Detroit Times ran excerpts of Benson's book on Ford, including less than a less flattering profile of A. Y. Malcomson's early involvement in the company, and how he left riches on the table, exiting the company early:


In a 1922 biography on Henry Ford and Ford Motor Co., author Sarah Bushnell interviewed Malcomson for her book, "The Truch About Henry Ford," and he gave his narrative about his time with Ford. He neglected to mention his venture in Aerocar:


In late July, 1923, Alexander Young Malcomson's last business deal was reported:


Next, the end, and a final question.

On August 2, 1923, newspapers reported the passing of Alexander Y. Malcomson. As with much of his business life, his association with Henry Ford was included in the announcements of his death:


In this announcement (below), son George Malcomson, now President of Malcomson Coal Company, announced the business would be closed in honor of Alex Malcomson. If you recall, George Malcomson was the son tasked by his father with reaching out to Henry Ford in 1919 to request financial assistance, and airing his grievances against Ford regarding his sale of Ford Motor Co. shares back in 1906:

Henry Ford postponed a planned vacation with Thomas Edison to attend the funeral:

Henry Ford attended both the private service prior to the public ceremony, as well as attending the gravesite internment:
"Mr. Ford seemed lost in thought as if remembering the days when he was but a struggling mechanic with a vision and Malcomson the financial colossus ready to bear his burdens."



Next, the estate, and a final question.

Henry Ford and James Couzens (right) entering the Church for Alexander Y. Malcomson's funeral:


Good article about the older church in a run down portion of Detroit the funeral was held in:

The last article I'll post was published serval months after A. Y. Malcomson's passing. His estate was valued at $2,000,000, plus $225,000 in March 1923 (divorce settlement), or just over 70 million today. For anyone who read the letter/report to Henry Ford in 1919, Malcomson was requesting "consideration" for his sale of shares to Ford, as well as other financial misfortunes he (Malcomson) encountered, as it appeared he was in dire straits financially.

Four years later (below), his estate is valued at 2 million dollars. Add to this the fact Henry Ford was asked, and accepted, to be an honorary pall bearer, and attended the private ceremony at the Malcomson home, the church service, and internment, as well as postponing an annual vacation with Thomas Edison and others (The Vagabonds?), I have a question.

Did Henry Ford, at this point the richest man on earth, bail his former business partner Alex Malcomson out?


I'll do an overall wrap up later. For anyone reading along, thank you, and i hope you enjoyed this work,
Rob

Rob,

These have been well balanced articles, and in reading them I've appreciated the humanity you have brought to the interactions of the two main protagonists.

I don't know about you, but in considering how it all came about I have kept in mind the upbringing of Ford and Malcomson, as well as the general ethos of the times.

While I should imagine most readers on this site know about Ford's early years it's perhaps useful to bear in mind that - if I have it all correct - Malcomson was born in Ayshire, Scotland, to an Irish father, and a mother who died when he (Alexander) was just eleven years old. His oldest sister, Mary Jane, also died in the same year (I should think it possible he named his oldest daughter after her).

To my mind the Irish/Scottish upbringing he'd have had in a large family (he was the youngest of ten children), along with the tragedies in his early life and then emigration to the U.S. when he was 15, must have had quite an affect on his outlook and interactions, not to mention the complicated accent he probably had!

In terms of your question I guess it's possible that some of that could perhaps be answered in probate records, which are often public. However, having conducted such research as a result of my interest in land history, I wonder if there might be family member who could flesh out the history somewhat more? It's been my experience that people have been generally happy to talk of their long passed forebears and family lore, particularly when the reason for the enquiry is explained.

That said, were I to speculate; I suggest that Alexander Malcomson had quite a diverse portfolio, and was possibly not quite as personally destitute as he may have appeared in some of the documents you've obtained. Alongside this Henry has been an avowed believer in the rewards for hard work and careful financial management, and may not have been inclined to hand Alexander money, although Clara (whose been known to put her foot down at other times) could have persuaded him otherwise - but, if so, I'd have thought it unlikely to extend to millions of dollars?

Rob, fascinating as always! Thank you.

Luke, yes, this doesn't necessarily make a lot of sense (Henry Ford bailing Alex Malcomson out). I did consider each man's background, however, there was a lot "left on the cutting room floor" just to work this into 5 segments. One thing I considered putting in, but didnt take the time to find it (and didn't wish to go down another rabbit hole) was a statement made in one of the Reminiscences (I believe by HF personal secretary Liebold) that Henry Ford did help out groups and individuals, but that he he did it quietly, without fanfare or press. If this is true, it makes sense, as I'm sure Ford was inundated anyway with requests for assistance, and if he had a public reputation of helping I suspect the public pressure/requests would have been overwhelming.

All I know is, according to the reporter who sent the letter to Ford, Malcomson seemed like a broken man, despirited, and seemed to be at his financial and emotional end. His marriage was breaking up, his seven children expected to retain the place in social circles they had grown up in, and Malcomson himself seems like the kind of person who would not be able to downscale or curtail the lifestyle he was displaying to the world. He also reported that A.Y. Malcomson's son George had also contacted Henry Ford, and given him a letter explaining what we read in this letter.

Finally, while it may not be unusual that Malcomson's family would ask the wealthiest man in the world, and former business partner Ford to participate as an honorary pall bearer, I was surprised that he attended both the private ceremony at the Malcomson home, the public service, and then went on to the internment ceremony. I must say that surprised, and impacted my opinions and guesses as to what the two men's relationship was like. I found it interesting that as early as 1908, when the "split" of the two was fresh, Mrs. Ford was friendly to the point of visiting Grace Malcomson in the hospital, and equally or even more interesting, that Henry Ford would stop his vehicle, offer Malcomson a ride, and discuss business, shortly after.

If I see someone I don't care for, let alone dislike or even despise, I'm going to look the other way if I happen to notice them walking along the street.

Thank you for your research, post and comments. One thing I've found (regarding my research) from experience, what I think I know today will ultimately change tomorrow.

And I do plan to do a "wrap" on this, hopefully tomorrow. First, a few more things to check.
Cheers,
Rob

Interesting stuff! Of particular interest to me? (I actually read nearly all of it!) As I read through the list of other people that attended as honorary pallbearers, I noticed an old (historic?) friend. Harry M Jewett, then president of Paige Detroit Automobile Company, and former coal merchant that had sold his coal interests to A Y Malcomson nearly twenty years before. Harry Jewett and Henry Ford, both attended A Y Malcomson's funeral, and sat in the same special section. Quite interesting.

As for the evaluation of his estate? That is often a tricky subject. Between business, personal, and family, assets can be valued quite differently. Two plus two does not always equal four. Business solvency can also be tricky, and often nasty. The ability to pay "today's" balances due often trumps actual values. The speculation on near and/or distant future values often can work either for, or against, an individual.
Any businessman that over-leverages his assets risks building the proverbial "house of cards". And we know Malcomson did tend to over-leverage his deals.
That said, it does seem odd that he would have been in such dire straights for several years earlier, and even with an expensive (for the day?) divorce, managed to die with a sizeable estate.
I was a bit surprised when I caught mention of his divorce in a couple of the articles that you posted. Divorce in those days was fairly rare! They usually involved drunkards or otherwise wayward husbands not taking even bad care of their wife. That a moderately wealthy businessman should be divorced would have been unusual. In those days, society wives generally accepted wandering husbands as a part of their "wifely duties".
When I first caught their divorce mentioned in a posted article, I wondered if Alex Y Malcomson may have become difficult when his business deals weren't turning the way he expected them to? Coupled with doubts about their financial future? A society wife could find that intolerable. Or perhaps she became difficult due to the stresses? Most likely a number of contributing reasons for it.

The question, did henry Ford bail out his old business partner? It would not surprise me if he did. Nor would it surprise me if Henry might refuse such a request. As much as I have studied the man, his history, his business acumen, and how he changed as he got older? I don't have a solid "feel" for it either way?

Thank you Rob for sharing all this research, questions, and opinions.
W2

Wayne,
As always interesting observations. Thank you for posting.

I don't wish this lengthy series to become "wrapped around the axle" (how's that for using my agrarian background..?) on this one issue. Below is a recap of what I believe the information presents to us.


The first point (and segment) focused on a directors meeting in 1904. A. Y. Malcomson made a motion that Ford Motor Co. built 2500 "little cars." Not only did the motion not pass, but it didn't receive a second. Then, Anderson moves, and Henry Ford seconded a lesser number of C and F be produced for 1905. This, while all directors were present. This suggested a couple of things to me. First, Malcomson did not have a "faction" who exercised control over FMC, and what the company produced.

Second, and maybe more importantly, his interest in this motion was to build more Models C and F. Not the larger Model B.

If these observations carry any weight, this may be an indication that what many (most) historians have put forward, that Malcomson's "forced" Ford to build the larger models (B and K), and that Malcomson and a few other investors were able to force production of two Ford models, have no basis in fact.


Next, regarding the well accepted belief that "Malcomson forced Ford to build Model B and K, the following two portions from Ford Motor Co. BOD minutes show that Malcomson did not move or second the building the second group of 250 Model B (initially 250 were approved by the board, with the second 250 approved at this later meeting. This time, Dodge moved and Ford seconded building the second group of Model B:


Regarding the Model K, the final number to be produced was approved at a January 1906 meeting. This time, Malcomson, who had already been asked to resign his board positions, wasn't present, and the board, with Henry Ford present, approved building 1,000 Model K:

One of my last points, A. Y. Malcomson, when he planned his "dream car," chose a 20 hp four cylinder power plant for that car. This at the same time Henry Ford was racing the six cylinder racer, of his design, and planning, drawing and preparing for the 400 cubic inch six cylinder Model K. Again, we know this because Malcomson secretly contracted with Reeves Pulley for 500 of his 201 cubic inch 20 hp four cylinder motors, signed November 1, 1905:



Lastly, Charles Bennett, initial FMC investor, and friend of both Ford and Malcomson, said the following, "I would say that the entire start of the company fo the first two years was all done by Mr. Ford, Mr. Wills, and Mr. Couzens." "I don't think that Mr. Malcomson went up to that factory on Piquette Avenue twice a year."


I rest my case........

And I would say a rather compelling case at that!
Thanks Rob!
W2

Thank you Wayne.
Borrowing from my old "investigator" days - "Because the prosecution has the burden of proof, it gets the final word."

My last presentation of evidence is the two sided argument (that's like "talking out of both sides of ones mouth) that Malcomson "had fallen in love with the design of the much costlier six-cylinder Model K (Allan Nevins, "Ford, The Times, The Man, The Company, pg. 275, 1953), in which about every early Ford history claims the Model K (and often the Model B too, just for good measure) was "forced upon" Henry Ford and FMC by Malcomson and his allies:


Then, often on the same page, sometimes same paragraph, Ford Motor Co. historians claim that Ford Manufacturing Co. was a "scheme" perpetrated upon Malcomson and his allies, to "siphon off profits" to "force Malcomson out." However, in A.Y. Malcomson's own words, written in his letter of response to the FMC BOD letter demanding he resign as treasurer and board director, he wrote - "In this new company, the minority stockholders were not invited to join."


You can't have it both ways. Malcomson couldn't "force Henry Ford to build the Model K," and then, at the same time (late 1905),in the same sentence, paragraph or page, accuse Henry Ford and his allies of starting Ford Manufacturing Co. for the purpose of freezing Malcomson out. And Malcomson writes in his own words, that "minority stockholders were not invited to join." The two largest stockholders, far and away, were Ford and Malcomson, with John Gray a distant third. Malcomson would not have written "minority stockholders" if he, and Gray, had "not been invited" to join.

Last point (I keep saying that); Ford Manufacturing Company served a purpose. Prior, American Ball Bearing was contracted to build the front axle and differential assemblies for the Model B. Piquette was at full capacity. Dodge Brothers were at full capacity, and according to the board minutes, forced to build additional storage. If Ford Manufacturing Co. didn't contract to assemble Model N chassis (the front and rear axles came from Dodge Brothers), who would? Ford Motor Company was expanding production to a point where some company(s) were going to have to fill the void. And any company contracted, was going to make a profit to do the work. That's how business works. For some reason, those "facts" are lost upon historians. If not Ford Manufacturing, who? Where were 10,000 Model NRS assembled chassis going to come from? Piquette was at full capacity. Dodge Brothers was at full capacity. The N chassis had to be contracted for, and assembled by someone.

It wasn't a move to "freeze" anyone out. It was a move to keep profits "in house," primarily benefitting 58% Ford Manufacturing owner Henry Ford, and have more direct control of a major supplier.

That's my story, and I'm sticking with it (until we learn more, and I change my mind again..........).

Rob, And I would add to that that Ford was already experiencing problems with outside suppliers pushing their profits higher at the same time causing delays in production. Henry Ford recognized that to avoid a future wholly dependent upon the whims of outside suppliers, he needed to take some control back from them. One thing to that end, was to let outside suppliers know that he would and could go around them, and take over that part of the business on his own. Outside suppliers knowing that they had no monopoly for his needs became more agreeable.
Ford never actually produced "everything in house". They didn't begin to seriously build bodies inhouse until the end of the model T's brass era! Even into the mid 1920s, about a third of all bodies (nearly all sedans and coupes, and a significant number of open cars as well!) were provided by outside suppliers. Only in the "improved " cars were nearly all (and still NOT ALL!) bodies built inhouse.
In addition to whole bodies, many interior trim pieces, tops, wheels, tires, bearings along with other minor bits were largely supplied by outside supplier companies.
Ford did manufacture some of almost all those things! I would imagine one reason for that was Henry's desire to let the outside suppliers know that he could if needed ramp up his production and do without them if they got greedy. I suspect that as long as the outside supplier was easy to get along with, it was better for Ford to take advantage of them, their investments and facilities, than to handle that much more in management himself.

Wayne,
I'm not sure why it took the "light bulb" to come on so long (albeit dimly). Every early Ford history I've read (ok, maybe I'm embellishing...) has reported that Ford Manufacturing was created to siphon profits away from Ford Motor Company. I don't know why I didn't ask the questions before; if Ford Manufacturing didn't do it, who was? FMC was going to hire someone/company to do the work Ford Manufacturing contracted for. Dodge Brothers was already doing Model K motors, front axles, differential and transmission, plus the font axels and differential/rear axles for the upcoming 10,000 Model N.

If it wasn't Ford Manufacturing, someone was going to make the profit. And...... the Board of Directors still had control over contracts. If Ford Manufacturing gave a price that was out of line, Malcomson and Gray were still there to resist.

Thank you for your posts,
Rob

1913, more real estate purchases.

Those were bogus from what I remember. He was not able to sell these real estate purchases ever I beleive because thy were never actually his. Or it might just be that he was bad at generating leads for his real estate LOL Should've learned from communityinfluencer. All jokes aside, from what I have read there is no definitive proof of him owning that real estate.

Shawn,
Not sure which real estate you are referring to, but this reminds me I wanted to post this. While they are many “signs” of Henry Fords presence and influence in the Detroit area, there is still one from Malcomson. August 1905 article:
As it looks today:

And here it is, as 1219 Griswold in 1921. It was 78ft high, had two elevators, tin-clad doors, and opening windows on all floors! :




Image is clipped & transformed from a Fire Insurance map courtesy Library of Congress Geography and Map Division Washington, D.C.

ShawnStyles wrote: ↑

Wed Aug 31, 2022 1:12 pm

1913, more real estate purchases.

Those were bogus from what I remember. He was not able to sell these real estate purchases ever I beleive because thy were never actually his. Or it might just be that he was bad at generating leads for his real estate LOL Should've learned from communityinfluencer. All jokes aside, from what I have read there is no definitive proof of him owning that real estate.

Shawn, I have read and followed much of this story and Rob's research for several years! However, I am not very good at indexing things myself. So i can't at this time link to certain specific postings.
I do recall reading a few times, even in the newspaper clippings Rob and other wonderful researchers have posted, that Alexander Malcomson often bought real estate "options".
"Options" are a clever scheme to tie up potential real estate deals with a bought and paid for "first right of refusal". This gives the option holder the right to seek a better buyer, or long term lease potential, for the property, then buy it at the previously agreed upon price. It can be a great way to make a huge profit in a short term, with low actual investment. The big problem for the middleman (Malcomson) is that if he cannot find that better buyer, or lease it for his expected amount? He forfeits his initial investment, which may have been small compared to the actual value of the property, but is usually still a significant amount. Purchase options are often five to sometimes even ten percent of actual value. So one does not need to have many such deals go badly in order to lose a lot of money.

Wayne,
I wasn't sure what Shawn was referring to. As you explained, "options" are just that. I've used them as a marketing tool for commodities when I was actively farming. At that point, at least with grain options, the average was 85% of options expired worthless. However, that was ok. If I truly expected a market to move a certain direction, I simply would have sold (or bought) the commodity (grain in this case). One way to look at options is as an insurance policy. If they are a "hedge," they protect the purchaser from an adverse market move, for a period of time.

However, when used as a speculative tool, they can slowly "bleed" the purchaser/holder, or "bury" the seller (writer). Anyway, I learned pretty quickly not to "bet" on options. Don't ask how I know......

Anyway, the transactions I've posted were publicly documented real estate transfers, not options.
Cheers,
Rob

Options (of many types!), commodities exchanges, even the stock market today (but that could be another political drift?), are all not much different than horse racing or a floating crap game. A few people that know how to "game" the system can make a fortune! Many people will win big (occasionally?)! But for every one of those, a hundred other people will pretty much break even or maybe lose bigtime.
Don't get me wrong. The legitimate exchanges, and real estate dealings are very important parts of legitimate economy and business. Through the antique automobile hobby, I have a number of very good friends that made their fortunes in legitimate real estate! One (who's name I am not at liberty to mention?), is/was a well known slum-lord! Privately, I can mention his name, and I will admit to liking him. He may have been hated by certain citizen's groups? But I know his side of the story!
I have never played with real estate options? But I have had discussions with good friends on the subject. Somewhere I read about Malcomson buying options on a couple buildings that had been vacated, a common practice if someone thinks he knows of someone needing such a building, either to rent or buy? Often, however, it turns out the people one thinks he knows that may want such a vacated building, cannot afford it. The stories I read stuck with me because of the discussions I have had with friends on the subject.