The Reminiscences of Mr. Herman L. Moekle
From the Owen W. Bombard interviews series, 1951-1961 Accession 65
Interview conducted: March 1955 Transcript digitized by staff of Benson Ford Research Center: November 2011
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20900 Oakwood Boulevard · Dearborn, MI 48124-5029 USA [email protected] · www.thehenryford.org The Besinfsceacee of
Ml, BS8MA8 L. 891ILS
Ford Motor Coarpaay Archive B Oral History Section March, 1955 The Kestl&lscences of
MRvHBa«Mi..i>. mmm
These re»ialBe©nc©e are tJa* result of a aeries of interviews with Mr. Hermua L. Moekle by Mr, Owen Boabari during the aont's of
December, 1953 :and, January, 195% at Fair Mm? Be^rhorn. m& l&m.
These interviews «re held under the auspices of the Ifeal
History Section of the Ford Motor Company Archives.
fhe intervlewr's questions ;-.^ve bean oMtted froa: i^.e .vc- count. The. questioning was prinarlly in tie form of toe icy su*jfrost^d to Mr. Hsrasa 1.. Moekle concerning vhlch he mi~ht t j.vo some infr.tfute knovledge. lo editorial insertions have be*» wade other than the brief synopsis of the donor's activities and the index,
the language of the narrative Is entirely tlmt of the doaor.
He has reviewed and corrected the mnuscript and by his signature be• low Indicated that it is a correct copy of his reminiscences,
fhisjaeiaoir is deposited in the Ford Motor Company Archives with the understanding that it nay be used by qualified individuals in accordance vith accepted archival practice as administered by the
Archivist.
Bexwan £.. loekle
it MS* BEffisui L. vomm ••• csmmmm
l685 Born, Pittab vr , ?re.-dv.io • \i
Mr. Koakl<9 was r«i.jCK.tf*i * •* P; • "re . ..• • .-*;> t , e„.awale»i ot* 0 -t, ,. school :.3 ,.*;it >* *?r*v\t : se:.0-3:1 and tb*n att"BCKM BufrV, fi.tKt.ves CoLb-o bo L.-t^r attended t- e 8v*>u'rio Sc^ OCL oJ bco-'-r ;c.i t I. bbwry't
of Ptttsl-an™rs eao^lf-tbn^ to- c«> i> r. b\ 1 -1 *-
I9I3 Saployt'd, Plvtsb-rv. Broac: cr t - 7or: -'-.to Co .0.
1315 Apjo'nted C -'if Cir>«e. P'tto'i*" Snar «,f ' . *V •« » r.i<' Company
1916 Assistant Mxw*r, Trott... Bianc , Foru -obo- Oo;j ...
I51I7 Road H«-pr.»st. tatlvo, St. i*c< 'c B/*,tC ., For! ! otc» Ccu^t
1918 frauaferrect to Auoltfu*, & puts? >.t, i«" -Ms .•-1 «vr* !•. *, Ford Motor Co^yoa;
1919 Liaison Wan, T .owpaon * Black "00 .
1920 lu Cb-arg-?, le4?ol tiejt »•> r,*-t-"cn., Fori «<'._/s.r>r COMCW
1928 In Clarke, ftuJit *«• DopMHoi- tn, Foro x^or Co,-; »0 •
1><^3 Secretary anil Aee:sVa.-t *i,wy.o-\o-eo, Krrb -..-or .— Cw.. ••.-¾
1-1½ : Vtca-fres^dtMtj. Fitane: , Ford "ol..or C0'«pa'O .
1^7 Retired
Htl-'ir-.'ss: liS73i »*•• : •« * ii tro : . ." c '
iii
A Career Begins x A Fori Branch...... 3
The War Interrupts 1;h
Canter of Power ... • »*• •* •«
4 Faaiilv Corporatloa. V Flnancial Crisis b
Fori of England. > -
Ken and Met: ods.....»...... *.«....»..•«•>•••«»••••*
Growth of: a Colossus ,,...... ,...... •...*.«•>*»••••*•* 77
End of an, Bra • «9 Toward Self-Buffleiene,
The Great Sepresiles...... •»•.•'•«•• dCi The Old Order Changes • •* Ford Abroad ...... 3£1
The Dealer's D'acooit i%0
A Bufeln* Holiday. 1^5
Th© Blue Sagle * ••••
Labor in Ferment. XH
The Arsenal of Deriocraej li>h k Sew Company. m I was born in Pittsburgh,. Feawyivaaia on October 11» 1¾¾*. % was educated; ia Flttsburgb. 1 had the ecpivalent of Mjpt school in. a private school and attended Buff"s Business College in Pittsburgh. I then attended the University of Httebwrgh, I went
there to night school on business natters. 1 completed that course about 1910. 1 didn't actually get a degree from the university. 1 think they called it the Evening School of Economics. That would consist of accounting, commercial law, money and banking, and subjects of that kind. Today I think you would call it a business adminis• tration course. 1 started to work in 1907, as 1 remember, with the Pittsburgh Coal Company and I stayed with it from that time until early ia 1913« My dutlesi were general clerical and accounting work. 1 was in. the office of the vice-president in charge of operations for several years. Then I was in the office of the controller for apfroxiaately the last three years, The Pittsburgh Coal Company was one of the very larae coal sitting cofflpaaies. It had fifty or sixty mines aad had coal >- •.1--:» stations ia the Great lakes region and down the Mississippi Valley us far as Hew Orleans, as I remember. I was doing general clerical »ork in the controller's office also. A goe# deal of that time 1 spent specifically on insurance
-1- natters. I handled the office end of a large inaur&nes -account. The company carried a great variety of insurance on its properties; lia• bility inwtraace, holler insurance, fire insurance on properties, and aarine insurance oa «srin« properties* I handled the office end of that. Aa engineer handled the field end of it. this was the period when the liability laws were undergoing a certain aaount of transfonsation in the courts. 1 did see it, but it all seeffled to be quits a natural evolution and i don't think It ever aad© any great impression on me.
1 left this coapany in the early part of 1913 because 1 wanted to get into auditing work, the field for that in the Pittsburgh Coal Coapwy sssned close! to as. They wanted ae to stay in the office, particularly to handle the insurance accounts, which .1 should have considered as a compli»est because they had a great deal of trouble before I:took it over. They wanted as to stay with it aad 1 wanted to get out into the auditing work. I left the company for that reason. Then 1 tried to get a$rself established in the insurance business, I started out on ay own. I worked at tbat for several isoaths but wasn*t able to accomplish it to ay own satisfaction. I had a friend, 0. L* Arnold, whom I had gone "to school with at the University of Pittsburgh, and who was associated with the fort Motor Company as cashier or clerk at the Pittsburgh branch. He had invited ae several tines to work for the Ford Motor Company and I finally did that.
-2- I went to work for the Pord Motor Company m July 86, 1913. there wasn't aay special procedure that 1 had to go through before 1 eould atart to work for the Coapany. Mr. Arnold introduced ae to Mr.
P. I, Weir vho «as then manager of the Pittsburgh branch. After a talk with him, they put me on the payroll starting right at that moment. The branch vaa then located on Satan Boulevard. I 've for• gotten the number. It was about a Kile fros the last location that the Ford Motor Company .had in Pittsburgh.
: this nasn't aa assembly branch. It was a distribution and sales branch. It had a certain territory which it supervised and throughout which it distributed cars. Also at thst time it had a re• tail salsa; force of its own which sold cart at retell in the Pittsburgh district* ©here vas a, service organization connected vith this branch.
Hr. Weir was manager, and at that time there was a fir. Cy
Perkins ae his assistant manager. Mr. Weir gave his attention to the ©ver»*all affairs. Mr. Perkins gave his attention to the sales end of it. ©iey had a superintendent whose name was Mr, Woo2.eni.aek.
He was 1» charge of the preparation of cars and in charge of service generally • la addition to that they had a road force that covered
the territory, fhey had a Distribution Itepartmsnt which distributed the cars and, of course* an Accounttog Department to take care of the
.record end of it. It kept individual books. I don't recall mm whether it was an actual profit center or not. I think at that tlm
-3- both cars tm& parts were charged to the branch and It aade an accounting of profit.
The branches at that time- operated under the direction of
Mr. I. A. Hawkins who was the sales manager. The various divisions in the Detroit offices, th® Servlco division, and the Accounting di• vision* had representatives who visited the branches and supervised their particular section. In other words, the Service division in
Detroit under.Mr. I. P. Hobart had eertain travelers who cans to the branch to supervise and discuss and audit our service work. Mr. L.
H, Turrell, who was then the auditor, had auditors that visited our branch to make accounting cheeks. The Sales division, under Mr. Hawkins directly, had certain people COM to m ia connection with sales matters.
Xach branch was given a certain territory which it operated.
It would choose dealers. Contracts were made with dealers yearly.
Territories were fixed yearly for each particular dealer and thea the dealers' operations were supervised to sows extent; that Is, they were supervised with the idea of helping them to sell the moat possible cars.
There were no special rigid requirements in those days for
14» dealers. We .selected dealers on the basis of the capital, of course, that they might have. We looked particularly to their apparent ability to sell cars. We had no special requirements as to types of buildings or kind of service they were to give. That was in th© eteye of development. We worked always with the Idea of giving the best
% possible service awl# of course, selling the raost possible e&rs. m all understood that it was Mr. Ford's philosophy that if yoa sold cars successfully and expected to stay i» business sad itic.reo.Sf-? the sales, you, had to give good service. A great deal of stress va* laid on the service end of the dealers* busloess. Hew service ideas weald be seat from letroit to this launches sad by then to the Aeal«r««
1 don't rewober that it was true in l;fL3 that J. Ford rotor
Company agent could handle only Ford fcotor Cosjp?.vny ciro. 1 think - good Many dealers handled other sates of cars, i don't tola!- thtt came until around 1915, It cams along with the success that w* in selling 350,000 cars in the year 191^--1915 and rebating ••50 yet- car to the purchasers. I think it was in ttett period that the ido.< was developed that the dealer -- These dealer contracts were baaed on u distinct territory* It was the Company's policy to bring these under study every year and revise territories. It was handled by negotiation with the dealer. From our experience with MM we determined whether or not lie was handling the territory properly and whether he was getting enough business out of the territory! whether he was situated in a natural buying center or not, and whether some of the territory that be coatrolled should properly go to another buying center. On the basis of these -5- studies aad negotiations vith the dealers, adjustments were aade. At that time, which was pretty early in the automotive sales work, we relied perhaps more strongly on vhat had heen sold ia that particular territory aad what we thought ought to he the increase is sales, rather than relating It to existing population and industrial, activity and figure it out that way. It vas based on experience of what had happened previously. Some of the years ended June 30 or July 31, and then they were changed to where they ended either September 30 or October 31. 1 believe in the years back 1¾!¾, the Ford Motor Company had a fiscal year that ended July 31, and 1 believe the contracts part of the fuse ended with the fiscal year of the Company* that was changed, although I believe the Company's fiscal year wasn't changed at the sane tiae. We would receive complaints froa dealers of illegal sales in their territory. We would find out the nuabera of the partieal&r cars and trace thea through our records as to who lad bought them, and determine whether or .not he had actually soli them illegally or whether he had sold thea to someone in his territory vho in turn sold it to somebody else in the territory. If we determined that the sale was an Illegal one, we asked the dealer asking the Illegal sale to turn over either all or part of the gross profit that no was supposed to make, that is, the difference between the regular retail price and the price at which he purchased it froa Ford Motor Company. •6- There were a lot of disputes about it because aatumlly the dealer was inclined to defend tbe situation by saying the sale, eo far as be knew, was a legal one to people in tIs own terrifjrv. Bat with experience that we had with .ill th- deth?rs, I "hint V\JC: pretty well able to determine whether the sale uod 'been nude by hi* In good faith or whether it was sicsply a sale with the idea, that it wouii end up in another dealer's territory. I:' .:. ease* of eor.sr.tau- •ri-yixt'-o of the -territorial contract, we would eancel his contract. The road man (the sales representative) van Uu»id up with a certain amount of informtion from Detroit and out of tta; .*jcserlyiice of his own branch, so he went out with sow ides* as to what, o-upt to be done by the good dealer. le would «o to the ae«*ler aad loo* over his place and wake suggestions to him aurf try to sexi Mir., on better business practices. He would ,-*o out with the dealer ia ex. effort to help him aake sales, and runy, many sales were t^de r.!*at way. The mere presence of a re present-it I ve from the factory seesae-i to have an influence on the buying public. It never got down to the order stage unless the dealer*® practices were considered so bid th*t his service to the customer wasn't good .tad Ms sales of -iutotohlies were suffering because of his bad business practices. The sales representative tr1 id to sell hr«; dealer on the idea of keeping an orderly place of business, keeping his sorviea department equipped with the best Wad of service equipment. If he -7- didn't have good service quarters, some efforts were sada to efteomsvaa a dealer to find new quarters with better facilities aad aore rooa where he could handle his busin&ss to better advant'a-e. .Skajr didn*t send aayoae around to look over his system of keeping book*. Sot very much of that was done 1¾ the early stages, as 1 reaeaber.; later on, that was done. We had a certain type of monthly statenent which ve rseoaasnded te the dealer. 1 think 1*& right whcu 1 say it that way. 1 don't reaeaber ir, 1713 that we had au -tecount*-.- system which was reconwended for the use of the dealer, h'tt -c di-i shortly thereafter. We asked the dealer to snake eeriaia re ports to our trance and to give u® a copy of hia monthly financial statements, he asked htm to give «S a report of the number of cars in stock, and the nut-she t- of cars sold. If 1 reaeaber correctly, the aatter of ^iviitt us flrurws on the nuaber .of cars in stoch and the number sold was in me from the earliest day of which I have any recollection. The aeco'intIu;:; figures we didn't get until a little later. 1 think it started aitt the year 191¾ or 1915» I*» talking froa a long vay back and 1 mgthh be wrong on some of those recollections. If the dealer had financial difficulty, we would work with hia and the local banks in an effort to find capital for hia, That -.as usually part of the work done by the assistant Manager or the stales representative if it was felt that he could tell the story w®31 enough. Every effort was aade to expiate the Company's position, not that the Company took any responsibility, but to explain the Ocatpaay's position so far as the autowoMXe business was coroerned; that would assist the dealer in establishing credit* there was no guarantee of the dealer's financial ability or of any loans aade, but the representatives would answer questions to the bankers as to what the policies of the ford Motor Coiisany wesej and the banker could satisfy M&self probably ®s to whether he was asking a loan to- a dealer that was §©ing to stay in business. In the early days there wouldn't be a mm who would eotae in and go right through the ass's books and make ve*y specific ree- Qaasendations as to how he could improve Ms financial standing, hater on, a good deal of work along that line was done. Service representatives fmm the Detroit office would pick up things like complaints front the dealer about deficiencies in the car which his customers were ceaplaiBlng about. 1 believe in the early days we had a system of reporting service coaplaints to the factory, There were periodic meetings in Detroit where the asm--.rre-rs and soaetli&es assistant managers were called to Detroit for general discussion. We had certain gmr&ntee policies ia respect to parte where part replacements were made, -and the net result of +-1-ose re• placements was reported in stage manner to Detroit, an iceountiny of -9- them had to be made, ana they g>>t to Detroit; tl'rou^r. «ncourit1r»i» »ro- cedure m well as by report of service difficulties. That -\vl <«' It was given attention. Dealer meetings were held, but I don't raaemtwr that they were held as early ae .1)13» S-ey w'Te U.'ld very sfr.'*r*4y after that. I think tbe Ford branches in ;:amt.m'-.i'.io"t-iuc^. sol-* wu-Jr. t:>« c'-- of Pittsburgh and it had dealers at the same time ;iro eexli- The dealer in the city -irea, would h'.vt* .» ts'rrit.n:, > *J tl"'-^'- they drew th® line that fin**, 1 thick th-z oeuierc "dUdr. K.'..*OJVI area (l say it that way because at tlut time i:-:> ntosani, c It-.y o**' Pittsburgh was divided into Pittsburgh <*irl -.llcgheny, vhfcV todi,/ is called the north side of Pittsburgh, ana then «aU fcovns o.» TIH? i'rL, ~ eaeh had a definite territory which they operated. One »3;/ter wnil operate in the city of McKeesport, one of the Piitsbnn-i* suuerbs, am dealer would operate in Alie3d>euy, W>o nrescntt aor+-h n'-.te o*i Pittsburgh, and so on. it didn't: s«e«i &o be espscl illy difficile a« the tiae. ftoere were quite a lot of ob.iecrUonc , ind i tbwx tl <•* €'a»tr -10- dealers "by insuring their being able tea get the business fro® their particular territories by putting out all possible effort to develop those territories. The-natter of subdealers had to l#> on an arrangement with the branchv At that time it was arse of the lar/je methods af molltu cars. As I remember, vm call tbera direct dealers and the.* Ibis dr-*i.*r had subdealers, and arrangements for the subde.aers * territories v->.&» made through the branches. Be would have to go throu;;h tbr> ;>ea<.' de.u. If 1 re»Bi»r correctly, the cars were shipped through the direct dealer} that is, the direct dealer would 'take the automobiles and then in turn distribute the® to the sub-dealers, except to the extent that subdealers took a carload of cars, that is, a freight carload of cars. In those days cars were always shipped lis freight care. They were knocked down. They were shipped to dealers on a knocked down basis and the dealer would assemble them. If a eubdealer was large enough to take carloads of ears, the carload was snipped directly to bin. There were may comparatively snail dealers who couldn't tafce automobiles in carload lots. They got them direct from the direct dealer. I think the change to single franchise came later. I think the territorial provision was changed later. 1 think that emm at d later time, as late as 1918. the situation, as 1 saw it, was from -11- 1913 through about August, 1916. Shortly after I joined th* Ford Motor Company, 1 worked on clerical work. I believe I stayed on clerical work shout tm months, and then went into the sales end of the work and the car distribution end of it first, the aatter of distributing ears mm ay duty, aai asking certain that schedules got to the factory as to ears required at certain tiae® for the deals ro, mA asking sure that those ears were actually shipped and received by the dealers. Then especially, during the tough months of the year, we had to asks sure the car stuck after they were seat out to the dealers. The cars were all shipped on a sight draft, and it was part of the job of this division to see that the sight drafts were picked up. Suring this period, the Ford Motor Coapany aad mom of 4» allocation prosiest in the suaaer. It vas a sales problea ia the winter* The Company recognized froa the earliest day that the way to nuke automobiles the cheapest was to aake a certain definite aartber regu• larly. It couldn't store those cars in vast numbers; it had to dis• tribute thea to dealers. In those days ears didn't ©ell so well in winter aonths because it was the custom of very aany -people, due to poor roads in those days, to set the cars up on horses in the fall and leave thea there until the weather becaae good in the spring. '.During that tiae, it was the sales problea. It was necessary to convince the dealer that if he expected to have cars on hand when the sales season -12- opened during April that he would have to take tt«?w during tue viwi - tiae and store them, or if be coold, «**li their to the custor*-rs ».t that time* He was encouraged %:> haul uher. oat on ; w.i*-on, 1" ;s-"t?o- ! ! sary, to the customer's home anJ le.-ivo thv vl sii -is? rvr fcTt. " r \ v than in the dealer's own warehouse* Actually it wusn't excess inventory for V.f >- - I don't clearly remember the evolution of the £%m& tram 75,000 cars the first year to 300,000 the second year that 1 was vith the Company. 1 was new at this time. Ve did increase dealerships partly to get better coverage of prospects and partly to give better service. In other words, it ma our belief vt tr.c ti"w *h*t .-. h-'lv- could handle so much business with so many c>rs» y«v{ it U'coc* r to get enough dealers into a territory so the product cou!5 be prsp* rlv serviced. Boring the period of the slow months, ve tried to find out which dealers could afford to carry extra cars. At the time the -13- contracts' were signed a certain schedule of shipo?r«ts v.a »T* »*•< o»» t . which the1 dealer agreed,. We shipped in accord %»ce with fhase echfv- ' those schedules had to he altered depending upon the dealer's ability to absorb the ears and to some extent depending upon his wminjpsss to handle big inventory, While it doesa*t sees as if the ears were great in number as we know numbers tod^y in respect to autombii*:s, in those days if a man had thirty or fort/ automobiles on have" t ••,: seemed to have a treraenioue suppiy oe h-uid; and h<** vouly v >»*:•/ • *aa inventory and his banker might worry about the inventory. »wj.y • * a history to point to, and we did xai.it to regularhy, hit\h aa V- aa- actually ever lost money through inventory. When the sales season came around, he never actually had enough ears, end that mm so in those years. At the beginning of s year the dealer accepted a certain schedule of delivery which had to 'be altered to meet the situation as it would develop. Those schedules were 'based to soae extent aa our production schedules in Detroit. We had a certain number of ears to dispose of ia a branch territory, and we tried to l*»v i oat * .»e total number and distribute them to the dealers accord 1¾, to t,b*ir ability to sell or rather, accord in j to she salt s e>,>erh .ie>-: particular territory, actually darln-;. this serio-'. .jroduefw •. -•• s setting the pace for sales. As 1 remember, 1 was given the responsibility to distribute; -Ih- ears In some way according to the ability of the dealer to handle the ears and secondly to make a fair allocation of the care within tntr ^m.*. Cars were distributed according to prearranged estlmtis ana seh»abib,-c.? hat changes had to be considered to meet x,;>r> curre.-iu sa in .iJ anur.„ was placed on this kind of work in i.ilj after tie c.>r,tr.«cU» h ,-1 aett- iJi/ been Made for the years 1913 ant 1 ah. In 1.4.', -md 1-.U3 I l sin* l !• was lay responsibility at that time ande** the- assist»nL %. through. It was done under the assist tnt murder vit>- th;' a'-»lf, af , certain number of sales representatives of toe territory. You c.n imagine that I didn't know too much about, it it that *xiy ^t^t I just came into the picture, but 1 did know siwactam; ^uaa* hua-» I.SH methods, and you had to learn fast. So far as 1 knew, we thought the annou'icemrat of *r a..y would extend to the branches and, of course, it uJ»i ext«u .; a the branches. It beeame effective in January, 191¾-, as fir *s th-> Vvuichers were concerned. 1 believe that was immediately. The effect of it v.* quite electrifying because it representee i tremendous .1«,^ra .ee in a-., for everybody around tne branch ^nti stopued jh-iost ^.Itoaeth'.v -,.>a- .a • o<- turnover for a long time. Labor turnover had been a problesf it branch to some extent. It wasn't peruana a hi;-: proble*, bat u.e branch was an organization of maybe fifty or sKty -ji.-opl*. <.a-\ there was a good deal of turnover of the ordinary clerical and ;<>oeb£Ui*ca"». -15-- force. After the #5 day came into effect, there was no mam turnover. They had a Branch Sociological Bep&rtment at the branch. They took one man fro* the Pittsburgh branch and brought M» ia to Detroit and taught him the routine. He- c*.«ae> b.-*ek airi i>«i- tho sysfcet'. into effect at the branch. He operated ulorw the- saiae Uney AS -l^v; operated in Detroit, the employees were iaterviewt-fiL f\ero w.« . lot of questions asked as to what tray ware .loin? wit'., Vwir «ooey and what they had hoped to do with it. Titore wus oosa* ±%t,vi»t «r„#* to encourage them to make some savings out *jf to? vtir> 4 *r~f ./«-»s that they were receiving ia comparison wltt. vh.it yii-l or?ii:wiIv for that type of work in the district. Some effort v^s 'uo.- to ,1¾:? 3« the employees as to how to handle their finances. The effects were mixed. Some t.*eople »ppreci*teo it} sor resented it. 1 think to some extent probably sow of near yJoet&Uftic a workers went too far ia their efforts to control tho Urtn* Inhhs of the people. That, of course, caused rescutaieut. This Sociological ma actually vas branch man ;m& vten fcc» took on the Sociological work, I dor.'I thisik ••«.• hoc....-.- ros r.w.i..i«* to Detroit* 1 think he always *»rkod directly for the ma;*ow. 1*--' Sociological man's name was Mr. McIAvala. So re ported «-*r*«?t i- Mr. Weir. Mr. Weir was in charge at the time the Sociological plae was put into effect* We didn't have much of an Amerlcanl?itioi) >X'O1;1.».T< ..¾ tite -16- Mttsburgh branch. There wwa't aay of the English schools at tiae flttefe&rgn branch for foreign 'people. On Koveaber 11, 1915, 1 was appointed as chief clerk at the branch. Up to that tiae I had been in charge of the car dis• tribution and a certain amount of territory supervision, working directly under the assistant aana.ier. The chief clerk position u^n*a up and it was considered a promotion from the work that I aai been doing. The existing chief clerk, who vas {*ta 0. L. ..rnoia, vas see" to Houston, Texas as assistant aanager. VUm he loft, I vas mde th- chief clerk. As chief clerk I had charge of accounting records and all .records relating to the plant. The sales work was turned ov*?r 1.. somebody else. There was ao assembly ta»re at this time. During the period that Ford Motor C»a*.**y offeree ^ t%> rebate to every purchaser of a Ford car if the Company sold over 300,000 in the year 19-1^-1915, the dealers sent us records showing the names and addresses of the purchasers of the ears, 1 believe the checks sent were issued froa Detroit and sent out to the purchasers. As 1 reaeaber, it was handled that way. The plan entailed consider.>.O.i additional work during the tiae that was coin ; ou. It sntuilrtd es• pecially an awful lot of work at the time the sales records were sent to Detroit. As chief clerk I had charge of Just the iecouatS*'..a reconia. It was an tedependeat set of books based on th® Ford Kotor Cormxa- -17- system. later It was changed to a mere report of sales activities and expenses, but I believe that didn't come until about 191:; or 1 .•'£•>. Burlng the time I was at the Pittsburgh branch, we ted a double entry system and a profit system based ©n prices charged to us by the factory, fhis was practically all merchandising. We made no east computations because all the aaterial we sold came to us completely s»i,iiuf.*ctureu. 1 don't remember that the branch had an advertising allocation. I think advertising was all handled from Detroit, .-it various times through the years we did have plans for advertising to help the dealers but 1 think those plans followed after 1916. I don't remember now that we had any advertising plans In 1915 and 1916. the branch would have its asm real estate property valuation and city and state taxes that they would pay. That would coss under me also. We had nothing hut one building and the lot on which it stood. As & matter of fact, 1 don't know that w« even owned the first building that, w© had. Me did, of course, own the next hollaing which was also on Mum Boulevard, hut a mile away from the first site. I haven't the slightest recollection of how many men I tew under my Jurisdiction as chief clerk. fhere Bight have bees about thirty. 1 say it that way because I believe during that period the chief clerk had some responsibility in connection with the stock of spare parts. There was a period of time when the chief clerk did have a certain amount of supervision over stock and stock clerks, vhsetbev -1G I had that at that time, I don't knew. 1 do r»em»ei,» however, that I was quite familiar with the spire parts stock and of it, fhst would include a stenographic force and record hamper* of one kind asd another and the accounting people, 1 think "chief clerk" was probably A pretty good designation. I had no responsibility in connection with the saloo or the- setting up of knocked down care, fhe latter was handle* by the superintendent, It was a position where we handled the general books, as 1 believe we called them at that time, sad the .records throughout the plant, 1 had a certain responsibility of rendering reports to Detroit. Usually the auditors eaas to as in pairs, but not always. One auditor would cover the record end of the business ana the other one was called a service auditor, sad be would deal with the stock of spare parts. What was being daws in connection with servicing dealers with the spare parts was also handled by thie s-aflitoer. Is was called a service auditor, 1 think he spent his time mostly at the branch going over the records of sales and returns because of defects. Both of them made some visits to sow© dealers ia the territory to assart-la what the relationship between the dealers und the brandies was. To some extent, that is actually going beyond the ordinary audit work. 1 think the record keeping activity of the Company was always a likely topic for the first need for economizing. Of coarse, we always understood that Mr. Ford didn't mat records. He had mo use -19- for records, which is the way I tfclnk it was ;t?ner I was right. Ife had te have certain records for cost purposes and inventory purposes, the eompany didn't realize probably prior to 1917 bow really important they were froa the tax standpoint alone. I believe commencing about 191? was when taxes got really heavy. S&ey commenced to reaiite the need for pretty good costing records* I thiak Mr. Ford was always agreeable that records were essential. If you've worked very much vith records and with people who have developed records, 1 think you will agree that they cut; niultinly all out of reason. Somebody would ask for a report of a certain ty^n and it was needed at tbe time probably, but If tbe meJ for it Ijpsr-'l, nobody canceled the report and tiie report continued to. h • ,\. *e out -.ad filed. As long as I was with tbe Company we used to «atas an in• ventory annually or make a survey annually of focus, inquiring of the people who were using them as to whether or not they were any longer needed} and we held down the forms as mean as we could that way. le did have a lot of success in eliminating reports along that line. 20- V® always ted records necessary t© determine our own fl* aaneial standing and to make proper tax returns. 1 think the fact that we did haws the necessary basic records was pretty veil borne out by the: fact that in my experience alone we mads out tax returns beginning with 1919 down through until 1 left, which seemed to be pretty satiefaetory to the (Soveroment. Soring «*>** «f that period, we bad one or two or. more Government auditors ia our offices carry-lag ©a continual e»»fnations of the returns that m had made. »8 never had any serious upset in the record© because of the Swrnseot's activities. Also, in connection with this last war, we had a total of about #6,000,000,000 in contracts and collected about $*,O0a,0OO>Q00 on that |6»00p,000,000. -¾© remaining #2,000,900,000 had been canceled at the close of 1*» war. Wt©n 1 left the Company, I think there i was uncollected about $30,000,000 oat of the $a,000,000,000. very little of the- $30,000,000 was actually ia dispute,, hut sorw sections of it were, in dispute which held up payment of others. Will® we had many discussions with the Government about our accounting^ because oar accounting was different from what they found ia other places and was not as elaborate, still basically it was sound enough that the Ctovera- meat felt it could pay the hills and did pay the hills. We didn't carry down through the years the many auxiliary records and. draft* and charts that many otter concerns did for the wry simple reason that our management didn't UBO thea. There v-xta no need for preparing that sort of thing unless aun.igeaent did use Uw.. If management wanted to know what a car key cost, ve knew, I think Mr. IfertiBiaie was the oa© to start the system ©f statistical analysis of pricing for cost articles under $10, After pricing for two months, the articles under #10 were determined at $2»fc3 average-cost per average requisition. Whereupon requisitions for anything under $20 was put la a pile. When the- pile was Mg enough,, it was weighed and 'the weight of oae sheet was divided Into the total weight. Thea that was multiplied by $2.1*3» which gave thea » predicted cost for that pile of invoices. It worked out quite satisfactorily because there were thousands of requisitions drawing Materials fro® our general stores into operation. Host of It waa Indirect material of one kind or another. If by survey the »ett that dealt with theses things could tell approximately whether that would "be a requisition of #10 or under #10, they segregated thea into two piles; aad oae pile they actually priced and the otter pile they weighed. It worked oat pretty well. The fact that it worked out pretty well is shown ly the fart that our inventories, after Mr. Martindule took it over rmd ae ao**-; together on it a good deal, came within three-tenths of orm >*»r cent of what our book inventories were. That was really quite close, We were interested ia the price of » ear. It Is true that -22. ve were interested ia tiie spare parts too, but th^ prise of the car as a whole wouldn't he changed very auch, no matter how yon put towrv>>r lahor and sateriai and burden. It vould all bo finally adder! up to one car. It night, however, affect spare parts, but when sp-.re parts were made in the vast volumes -that they were made by Ford Motor Company, the Influence of any activity of that kind was probably negligible. I'a sure that our individual spare parts were coated quite -accurately and emlte' satisfactory. I don't know if Mr. Pord had any formula to figure out tbe weight aad everything of the car and vita a few figures be -able to figure out how much that car was iolng to cost Mm to make, they did reptlarly talk of the car as costing so much a pound. That waa based, I'm sure, on what was told to them by the Accounting Departs at. as being the cost of a car. In other words, whether they knew it or not, they based that on cost records. I'm sure tlui'r. so, Of course, you can produce it the other way by engineering estimates. Mt„yte ti seme extent, I'm sure, it was produced that way, but. T think moat of the time it was produced on what the records snowed as having been the cost of a particular type of car. fhey always knew the weight of the car. They had the cost and they eould divide it and find mm how much it was per pound, that was quite a usual method for dis• cussing the value of a ear. Referring back to my work at tbe branches, 1 understood -23- the trawling auditors could oaly make rcconsaendations. It .vuuounted almost to authority because if the borne office agreed with tins auditor, the changes were made immediately. I don't know us the auditor h=v.l too much power. If their reports reflected cond:? tions tlmt eu«weste.-r changes were necessary, it was a matter of evaluating reports, 'iter* 1 assumed the .position as head auditor in the home office, the decision was made in the home office as to what kind of a move should be made. I think he• had the Influence that an auditor would have. It wa» vp to him to; get the facts and. place thea before the bos© office m& perhaps accompany It with some opinion in recommendations. 1 don't think generally the average auditor goes beyond the financial realm. 1 think the auditors, as generally understood, stay within that realm. These auditors went beyond that. They were asked to report on all of the things. That was especially tree ia the earlier days when the auditor who made the detailed reports and the service auditor were the only men who came around regularly to the branches. In the early days there were not so many piopM from the factory who visited the branches as later on. It was expected of the accounting auditor to give his views of the whole property. He visited some dealers and gave his reactions of hie visit to the factory- He looked over -the plant and reported on its orderliness or disorderliaess. It was one of Mr. ford's principles to operate a nice, clean plant; and every effort was aade by the people la authority to have that -3»- policy enforced at the plant** The auditor also reported on the personnel in mny instances. 1 think in all instances he reported. That was evaluated at the factory. Ixeerpts. Of the report were given to the various people involvr.-d -, ti -it is, tbe Purchasing Department vould he given excerpts relating to the kind of purchasing clerks they ban at the branches. The Sales Depart• ment was given aa excerpt of the- report relating to their end of tt. It was divided. The parehasiag clerk in a place like Pittsburgh, would be Just one wan buying the expense Materials of certain kinds which could be bought to better advantage locally, The assembly plants bad developed a little farther* although not very »aea farther. I don't remember that I eame ia contact with aay corres• pondence relating to the surveys of branch assembly plants. But, of course, I was familiar vith the expansion program. I knew that it was going on because in 1916 I was moved from tbe position of chief clerk at Pittsburgh to the position of assistant manager at a new branch organised in f ronton, Hew Jersey. 1 had no contact with Mr. ford's Peace Ship Expedition at all. I believe nobody at the Pittsburgh branch had any contact with that. I have no knowledge of any activity oa the part of the Philadelphia branch; it may have had but so far a© I knew, It was just Gastoa Plantiff in »ew fork. 1 don't remember aay paeifiatie material written by Theodore Delavigne being distributed to the branch. 1 was aware of the fact that scnwtbing along that line was being done, hat I don't remesfcer seeing any of it in the bwuaehes. July l6» 19l6» 1 was appointed as assistant mra^r ut thh Trenton, lew Jersey hranch. That 'branch hadn't been established at the time that I received this appointment. The )*m who w-*g appointed manager, Mr. Verne Hash, had been the leading retail saleemn at th. > Cleveland: branch. He and 1 met in Detroit and thea went to freatoa, I believe 1 was called to th© hose office to talk to ttr. lawkins. v« called them conventions at that time. We went 1» Trenton and organised the branch. 1 don't re- Member whether we found, and leased the building, or whether that ted been found for us and we knew where we were going. I do remember organizing the branch and territory. The branch territory mi or• ganized out of territory turned over to us by lew York and Philaielpt: h*. I had a great deal to do with it at the time because I hud bsja-o familiar with that type of 'work, having done it at Pittsburgh. I worked with Mr. Block at Philadelphia and with the assistant man t,mr in Hew York to get this final turnover of the territory at the 'i'rrnton branch, We bad a territory that consisted of suite a amafber of counties in Hew Jersey. It went down almost to Atlantic Ci fc;.,a s I remember, and included a number of counties ia Eastern Penney! v.*ni ^ Bucks County and maybe one or two others* My actual work was to pat the Branch in operation from the very ground up* We had dealers already operating under the authority of Philadelphia and lew York, and we took thea over. I think we arranged the contracts for the succeeding year. l*a pretty sure that I did that. 1 Believe the expansion la Branches was made in order to expand the retail sales activities of the Company itself, that policy was changed almost as BOOB as it was started But I believe the eapiasioa. of the branches? was really aade with the idea of «ac* pending the retail sales activities of the Company itself in the larger cities. We had to- choose salesmen within our -own area and. set up our own store. 1 think we 'had the histories of what had Been done to go on. I think that is all we had at the time, i think we Barely got started on our retell sales when it was determined that we should stay in the wholesale business, from that tins on, retell sales activity in all the branches was stopped. It mm on January 18, 1-&7 that they decided to liquidate all the retail sales activities. I think on the Mais of information that I bid at the tii-:- it was decided that a matter of retail selling was n thin,* l^xm^nixi of manufacturing and wholesaling, that it wouli be Better handled by separate organ!t»ttaas, that the Company had to depend for most of -27- it* sales:anyway upon dealers i aai. also by tbat time the matter of trade-las loomed on the horiaoa aad perhaps branches weren't equipped to d© that thing. All of that aai* Mr. fort and Ms advissers ia Detroit feel that we eould do a better job if we stuck to Manufacturing and wholesaling, and handled all the retail deliveries aad servicing through dealers* I think also at that time it teca« apparent that it was necessary: to have more than one service station is a city. It was necessary to have many service stations in cities. Cars had become so numerous that one service station jwst wasn't enough. 1 'believe this was the beginning of the Ford Motor Company's insistence on the service station attached to every dealer. I think this coincided with the time when Mr. Ford insisted that the dealer handle only the Ford car. I'm not(quite clear on that. I don't remember that there was aay dealer complaint in connection with. it. Tbe Trenton branch waa to be in every way just like the other branches that sere set up, I don't believe we were in full operation when they decided to close up these extra retail branches. I think we were still in the organising stage. I don't remember now that ve had gotten into th© matter of retail selling very far. «e had gotten fully into th® matter of distributing cars aad supervising dealer activity in the territory. 1 dealt with the dealers and we carried their accounts in our books. I don't believe our own retail activities -20- vere developed very far. I thiak m were stopped and then liquidated. I don't think we had developed many new dealers. We tool? over such dealers a© ve had. there might have been some adjustments made in the number of dealers. Every year there HER a certain amount of what seemed a natural expansion of dealerships in order to gala better coverage of the territories. 1 don't- remember any attempt* to put in m many dealers aa you could possibly find. 1 was called to Detroit along vith our manager Mr. Sash, and we were advised of the decision to discontinue tiie retail branches. Ve were asked vhat we wanted to do. 1 think at the tiae ve had aa opportunity of taking dealerships if ve wished to do so, or if we wanted, to continue with tbe Company* 1» my case, I considered taking a dealership in Pennsylvania but changed my mind about it and elected to stay with the Company. I was told to go back to Trenton and await orders. 1 don't think I got orders when I was in Detroit. 1 vas asked if 1 wanted to stay in the eastern part of the United States or if not, -where did 1 want to got It was a matter, of eourse, of being transferred to some branch. Since all of my activities had been in the eastern part of the United States, I elected to slay in the eastern part of the United States but I got orders to go to St. toils, which from my viewpoint was very, very far west. I went to St. Louis in april of 191? as a road representative. 1 vas still ia freaton, 1« Jersey when the United States entered tbe war, •which was April T* 1 believe. At that tiae we went to the dealer's place and looted over bis premises and tried to encourage his to have adequate parte, >. Me did try to sell the dealer, and we bad a lot to tie 11. The dealer had a lot to learn. I think the dealer ia those days, because it was so early ia the business, didn't have the toawledge of the best sales and service practices, ft* sales representative aC a certain background, even though they bad not teen dealers, by reason of the information received fros I*>troit ir- bulletins* and by reason of their experience in collecting information ^oin^ arewid to various dealers, some of whom were really away out front. A road man went into those places, not so much with the idea of helpiag th&fc dealer, but to leam something fro© him. He could carry it to the poorer dealer. A lot of constructive work was done among the dealers at that time. There was some work done along the line of looking for prospective dealers in other areas, if in looking over the rsport of the territory and reports of sales, and if we gradually beeaae alive to the necessity of looking to the industrial activity or -31- business activity in territories, and if it was felt that additional dealers- would' help, we did look up prospects or interview prospects that had made application. The development of territory cause about through complaints received of the type of service being received. People gradually became aware of the fact that they shouldn't have to go thirty-five or forty miles to get service. Tliey would mk us, "Why don't we have a service representative in our town?" If we got enough of that sort of pressure, we would look, into It. If we saw that another dealer could properly be placed in there and: the territory was worth developing, we would try to do it. The territory man was required to write report! just as the auditors wrote reports on the branches, except he wasn't auditing the accounts, m wrote a report about the dealer's activities, which was turned over to somebody in the branch for analysis and faUov-uf action. Bulletins were written from recommendations. Recommendations were always made by the road man to the dealers. Those recominendations were followed up from the office. Bulletins on sales or service practices originated at Detroit and then sere distributed to the branches and from there distributed to the dealers. the territory man ia those days was expected to cover every• thing* The manager of the branch and the assistant manner and the sales manager did a certain amount of traveling. They gave a* much of their time as they could spare from the general supervision to travel -32- among dealers. There weed to be attempt* usade on tbe part of tbe manager or assistant Manager to cover every dealer at least once a year* Sometime* that eould be done and sometimes it couldn't. There waa some such goal set up. A territorial representative lite I was at St. Louis had a certain territory which he would cover every two week* or maybe longer, depending a little bit on ths necessity of the situ• ation. If the dealer was in good shape we might not see hi:* -sore tf.< . once a month. Of course, finally as the mar deepened and assembling of ear* was stopped, theterritorial representatives were reduced and the territories were enlarged. In my case I was the only w?r*itorifL representative left working out of the St. Louis branch. I vould BI-.-J within a few months after the war the pressure began to show an the branche*. I think maybe by July 1 it was made* pretty deficit.; that we wouldn't assemble any more ears. St. Louis hid an HssenbLy c}unt. The only difference between the St. Louis branch ami the Pittsburgh branch was that it had a service superintendent, aa assembly superintendent, aa assembly stock superintendent* and a servlise stock superintendent. In other words, it mm Just increased by the assembly operations. It was a much larger operation, of course, The record keeping was a great deal larger. There was a certain amount of contact with otter branches by reason of shipments of cars to dealers in other -33- branch territories aai that sort of thing. Alii©f this operation cause under tbe waag«r of the branch. That was V. C+ Anderson at that tiae. It ua* either William Knodsen or Frank Badas who had the assembly follow-up from Detroit. 2 think Badas worked wader Mr. Knudsen, but I believe still later he haadlnd it alone, but I'm aot sure about chat,. fhis plant had aa assembly line with a conveyer, the model was almost the same as the Detroit plant, fhey were all alifcs, or aa closely alike as local conditions eould wake then, fhere mm a develop* aent period at that time. I think Long Island ms the first assembly plant and Kansas City was the second, or it ms .lust the other vay around. When the other assembly plants were opened, they were nodded after those pretty largely, except to the extent of i»prove«e;ats, hut they were pretty much all alike. Fro® the earliest time summaries were made of operations of the .assembly plants and those summaries were compared and used for measuring the efficiency of a particular assembly plant. I believe they operated with the saws kind of accounting records that the sales branch did* She way that 1 remember it is that this was aa individual profit center, the profit figures would be used as a comparison against the other as well as production figures. . 1 think they followed th* expense ead of it more closely than they did the profit end of it. I think ear profit waa figured on the basis of figures given to m fey Detroit, the Branch was toM By Detroit what was supposed to Bt the cost of a particular type of car and so on. the emphasis was placed oa the expense accountsi how many men were needed for sweeping and cleaning and so oa down the line. There were rules from the earliest days as to what labor was production labor, and what labor was expense labor. Of course, from the earliest days production summaries were turned over to Detroit and ear costs were always computed ia Detroit. 1 don't rsawaBer that car costs were computed at the assembly branches, I believe we did have certain knocked-down figures of the way the oars and materials cane to the plant. We used that as basic materiale for figuring car costs at the branches. I'm not quite clear oa that any more= The ck.a:,ge ir the Bookkeeping system in 1921 went to the assembly branches ,.3 will as the 'Sales branches. When we went to a single entry system, merely* a report system, that affected all Branches of every kind. We received knocked-down shipments which meant a carload of wheels, a carload of axles, a carload of tires, ana at various times the bodies were knocked down la various stages. Seme types of bodies were received as fairly complete "in the white" and not upholsteredj in the white meaning merely a prime coat, Later we re• ceived the bodies 1» .parte. The bodies themselves were knocked down and we assembled the bodies as well as upholstered them. -35- 1 lite** have much contact with the fact that thews assembly plants were $m% on one side of the freight breakage .point. 1 knew something about what was going oa» 1 'believe from th® earliest days they made•some kind of computations as to what might he saved from a freight standpoint, whether they ii&mld he built la Detroit or whether they should he built in the assembly plant. The price that w»> chafed the dealer was based on the local built-up cost plus the freight of a built-up ear from Detroit to the assembly plant. 0© we had that margin as a profit. In other words, if a knoetei-iwa ..job won sent to a plant for $6 a car and we could build it up for saotter #6, we bad a total cost In there of $12 j and if the actual freight of a built- up car from Detroit to a particular place was we had #12 profit in there. The cost of assembly of the car at a local area plus the freight rate was the cost, and the price was a Detroit price. Our margin of profit was what we could save assembling them locally over shipping them built up from Detroit to the dealer. The dealer was aware of this situation. I don't think 1 worked very long a© the lone survivor of territory men, which force at that tips was twenty-six people, 1 believe. When they got down to where I realized 'they were Just having one man, I asked for a transfer back into the office. As a roadman 1 was out two or three weeks at a time. We did most of our traveling ia those -36- Aay* toytrai n and not by oar, because the roads weren't good enough and our trip* were pretty long. i had a wife and one small youngster. I knew office work and 1 decided 1 would rather be in the office if it was agreeable to Ford Motor Company. fhey offered «e a position as eashitr. In those years I was steadily going back down. That was the only position available? and Mr. Anderson told me he would try and do it for me if 1 washed it that way. He sent papers in for the necessary transfer and then the Detroit home office advised him that if 1 wanted to come to the home office that they eould use me in there to better advantage. 1 went to Detroit on July 2k, 1/13. I hid an interview with Mr. furrell. At Highland Park I was placed in the Auditing Department, which was the department headed by Mr. Turrall at the tiae. The Company was Involved in making Government contract* for making caisson* and the Liberty motor and one or two other things; Eagle boat* and helmets. 1 was seat to do clerical wotfc in connection with tiie Liberty motor. This consisted of making up records of equip• ment used in the manufacture of such motors. 1 believe I did that for two months or something like that. I was setting up records for the machine tools that were coming in for use in making the Liber-y en^l*?. I believe it was cost plus percentage. I believe the fixed fee amasse meats hadn't bees worked out in World War I. I'm not quite euro a>ou<. that; 1 didn't have much to do with it. -37- I had no contact with the specialised machine tools that mm developed by the ford Motor Company to aake the liberty engine, fat only contact I would have was from the record., standpoint, I had no familiarity vita, the machinery or the origin or manner of development. I don't rewember that the campaifpi for Mr. Ford running for senator in 1918 was brought to ay attention especially. 1 don't remember that there was any attempt to get the ford workers to support Mr. Ford in this. There must hive been material handed out to Ford workers asking them to support Mr. Ford, but 1 don't remember any of it. I remember that I was all for Mr. Ford becoming a senator. The only personal contact I had with Mr. Ford up to this point was to meet him on a number of occasion© when we had meetings in Detroit, and I think probably in the dining room where Mr. Ford used to e.«t along with a good many of us. That was the dining room in the b tacrnent at Highland Park. He would eat there very informally. He didn't est there too often during the time I was in Detroit and before he made his office at Dearborn. 1 think he would, just drop in, hut be usually ate with a certain .group which included a number of top aen like Knudsen, Martin, and Kliagensmith. If .1 was aware of any of the discussions that were taking place, I don't remember now. I wasn't so closely connected -with Mr. Ford that 1 would be in any my involved with the Chicago Tribune libel suit. I only knew in a very general way what was being ion© to carry oat this suit -33- against the Chicago Tribune, I had no direct x*»»t -s-t t1-. ft. I knew the trial was going on and I knew some oi' t* '• •• • a, '«' • were involved with It froa the Compaq's side. During World War I, the Auditing Department vas He had a greal deal to do with settling the contracts. I 'believe Mr. Leister, who was then Mr. Turrell's assistant auditor, had a great- deal to do with closing of the contracts. Who actually negotiated th© contracts, 1 probably knew at the time, bat 1 don't know for sure sow. It was probably Mr. Klingensmith. All the Financial Department came under Mr. Klingensmith as vice-president and treasurer of the Coapany. As I reaeaber, he controlled the hegal Department and the General Cashier's Department, which handled all the Company's cash and at that tiae was under the charge of a Mr, Mills. Be controlled the Auditing Department, which wae under the charge of Mr. Turrell and he controlled the Cost division I believe they called it the Manufacturing Cost Department tl r-u. I believe Mr. Carnegie took it over from . Mr, Fre.icl . >t i »..• .ru-«« :. reported directly to Mr. Kllngensaith. There was a Disbursement Department under Fuller which 1 -39- believe also reported directly to Mr. Klingeasmlth. the Disbursement Department paid the bills. That department mm quite large. It received the receiving slips from tbr; receiving departments and matched them against invoices and against purchase orders- They checked ther for price and then paid the bills. That was a fairly large .3ep-.irtrae.:;t.. It was a separate division, The. general books were always placed ia the Auditing Department. You might think of that as the Accounting Depirtoent i.i some corporations. In this instance it '.as plucedl la cm>r--$( c of Kr. Turrell whoa you might call the controller, but they call*.';! vim u» auditor. They might call him controller because ho did h=*ve the general books. Otherwise, be would have been probably called ?,n auditor. I think Mr. KliagBBsaith*s power went much beyond just controlling those divisions. I think he had a big voice ia general policies of the Company. 1 had no part in the policy actions of the Company. As I understood it, there was Mr. Sills and Mr. P. S. Martin and Kr, Fred Diehl, the purchasing head, and Mr. Kllngensmith who esse immediately under Mr. Ford. I don't know too much about John E. tee's functions: .it th t time. The Sociological Department was under his ,'urisdictior-., ,<>& I remember* 1 hat no contact with him or his work* I believe Denis Marquis would report to John 1. Lee. -ho- Mr, Craig went down to Mr, Klingensmith's office in the early part of 1918, perhaps April or *5.*y. Prior to that tiae he had heen assistant to Hr. Turrell, the auditor. I don't believe Mr. Kliage«s»itfc had another assistant prior to Mr. Craig going iato hir :fi >?:>.•• Jift'-r 1918 he had a secretary whose name was Quintal. I. belv v tie now wnrfrs for the Fisher Body Company or son© division ia General Motors Corporation. 1 don't recall Mr. Hawkins going to Washington to work for the War Department. Mr. M. A. Ryan followed Mr. Hawkins in tbe position of sales manager, and I believe he was hie assistant prior to the tiae that he took Over the actual direction of all the sales. I went to work in the Auditing Department, which was under Mr. turrell who reported directly to Mr. Klingensmlth. There was no step in between Turrell and Klingensmlth. By this time Mr. Couzens lad resigned, 1 thiak before that Mr. Turrell reported to him, and also I think Mr. turrell worked fairly close with B. A. Hawkins. Maybe he didn't report directly to Mm but he still looked to him for a great deal of direction and policy making. Mr. Hawkins was in a way in complete charge of branches, as I understood it. When 1 went into the Auditing Department in Ivili, 1 think there were about thirty or thirty-five people in there. It was broken down to where one or two men had charge of the general ledgers. 0w> -41- m&n was ia charge of the field auditors and another xoun was in branch employment records, which at that time were kept in the Auditing Department. There night have been one or two other divisions. It totaled somewhere in the neighborhood of thirty to thirty-five people, as 1 remember. I don't know when the Manufacturing Cost Department came into being. 1 knew of it first in about 1913 or so, and 1 think it started out as a Time-keeping and Payroll division and gradually developed into a Costing division. Just when it started, I don't 'know, When 1 first knew of it, it. was under the charge of a imn by the name of French, who later became a Ford dealer when Mr. Carnegie took over that depart• ment. It was a fairly large departweat. It probably had fifty or sixty people in it. 1 believe Mr, Carnegie reported to Mr. KllngeiisKith directly. This Manufacturing Accounting Department was responsible for the labor costs that were produced or collected in the factory. The chief timekeeper reported to that division. 1 believe they sad© up payrolls and handled certain types of property .records, They looked after the factory record keeping in general. The figures from the Manufacturing Accounting Department would get onto the general books through reports that were made up by that division and sent to Mr. Turrell's department. These were secondary entries. It is unusual in the first place to have the general books in the Auditing division. Sad it been called a controller's -42- office Instead of an auditor's office with a separate detailed record departeent at the Maamfactwlng Cost apartment mi, 1 ste»*t think it would -have teens o unusual. Another function of the itusufaeturing Cost Department was preparing, coat summaries of parts and. ears, tee of its Mg seetioas related to what we called factory work orders; a vast masher of work was done throughout the factory oa forms that were termed factory work orders* It was the responsibility of this department to follow those through to allocate the charges accusalsted to the proper accounts, this was both tooling and maintenance expense, fhey treated them separately, of course, A lot of overhead is manufacturing expense. This department, of course, dealt with direct labor as well is -nti overhead.' fhey had an actual cost system throughout the Ccapany while 1 was working at branches. 1 can*t say that 1 ever was very fsailiar with that. I was familiar to some extent vitl the branc? -a»i af i*a I wasn't even too familiar with that because the branch in which 1 started was not an assembly branch, but a service brvKf- J.J;>\ vr.ru I was connected with tbe assembly branch at St. Louis, I wann't In accounting work at all. There were certain figures developed for the assembly line associated with th® factory. I think, efforts were made to compare the figures produced there with the various branches. For some time ia the beginning I believe the assembly lines were located ia the Highland Park plant, and then later they were raoved. to the building that stands at the comer of last Grand Boulevard ana Woodward il venue. They conducted Branch operations froa tliere with assembly lines jast as other aeecttbly lines were conducted throughout the States, fiat later was discontinued and the line was noted Back to hii»s.lv.j P-.r'c. For a tine there was no assembly ions at HiRhir.au r..r> J.* all. 1 think it was in the period of if>15 or 1916, somewhere in there. 1 Believe the assembly line at the [email protected] branch continued on into the twenties. 1. believe they had nothing at Highland Park while the Branch was in operation. I nay be wrong on thru I u-iak there was a tine when the lines weren't running at HighB-md Pirk. There ought to Be soweone who would know more about that. The ladlator Itep&rtment wouldn't have its own bookkeeping systen no it would operate as aa individual profit center. It would Be a centralised operation. The Hawkins* "system" which was a perpetual inventory and cost system, was in operation during this period. I think it was a conventional accounting system of the tine. We had the usual accounts of labor, arterial, and overhead. We lad all of our pro• ductive labor and productive materials charged into an account that we called MO (Manufacturing operations) and cleared froa there 0*1 trie basis of costs aade up for units and applied to production m reported to us from the factory. In-freight a« well as out-freight was cleared through freight account into manufacturing operations. All nonproductive Materials were charged iato account number 80, aad I think it was termed General Stores sad cleared from there oa the basis of costing re• quisitions* 1 don*t think Mr. Carnegie ehsaged tbe principles of the accounting system* I think he took the system as he found it and tried to strengthen it. He did strengthen it aad corrected situation:; th .1 hadn't been running too smoothly. I think thcv found it tiut t:;i>c- i.:nt there were a great many Inaccuracies In the system, t have told uboufc my own experience of making certain that the time reported to the Manufacturing Bepertmeat for payroll purposes vould actually check, out witt the time reported for production costs. That was on© of the things that was in bad order and had to be straightened out. It just happened that I spent a good deal of time straightening tbat, particular one out. The same thing was done in respect to all of tbe operations of the Company at that particular time. The principle vts Maint^inou" but it was made nore accurate, it was cleaned up. It hadn't been handled too accurately for various reasons by Mr. French, and that was the reason why Ir. Carnegie mas put ia that particular place. Mr. Carnegie was an accountant by training. I doa't kaow what educational background he had. Ie had come to the Coapany, 1 believe, from the -3+5. John R. Keim Mills in Buffalo. I think he was part of that orgnn.tr.it,ion. i During the two or three months that I was in the Audi tin?; Department, Mr. Carnegie was placed la charge of the Ifenttfacturiag Accounting Department. He mated someone to do special checking through the factory records to try- and straighten them out. the particularly had ones at the time were factory work orders and the time record*, reports of time and production. I worked on those two particular projects for quite a number of months, I think until the following April. Whether anyone else was transferred at the saae time, 1 don't recall, I believe 1 was the only one taiasferred over to his depart• ment. I don't remember that he was conducting surveys throughout the plant. Be might very well have been carrying on other work about which I didn't know at the time. It was about 1918 or 1919 that 1 was transferred out of that department to th® group of Thompson and Slack who had ease in to develop a cost system. A asm, named Jacob Shapiro of lew York, an accountant sad tax expert, had been called ia at the suggestion of Mr. tacking to consult with Mr. Klingensaith concerning tax matters, maybe also matters in respect to the minority interests. 1 *a not sure which c--tm first, but I know he did later have a good d@al to do with both. Out of those discussions apparently came the decision to improve our costing procedure. I think because of the heavy taxes that were coating into force at that time, this decision was side. 1 believe Mr. Shapiro recommended Colonel Thompson whose l»**guartexs were in Hev fork. Mr. Black's headquarters were in Kansas City, but the two worked together, I never saw Mr. Black. Colonel Thompson seemed to handle this particular 40b. Some arrangements were made after which Colonel Thompson aad Mr, Shapiro together brought in aad organised quite a big force of accountants aad brought thea into the old .school that was just above thm old branch building up there-, fa at was the St. Francis Home before that. They set up operations there and developed a costing system. Que of their first steps t*ts to amice a survey of all the Company. 1 don't think it was strictly an auditing survey. I know that they did set up a set of values which were ased in eonaectioa with placing upon the books of the Delaware company asset© taken over froa the Michigan company at the time the minority stock interests were acquired froa the Michigan company. Tbey had a great deal to do with developing the values of which those assets should he set oa tbe hooks of the new company. AH of that was done, of course, having .in aiad the value or the need for Invested capital for purposes of excess profit taxes and that sort of thing. It was put in line ©0 %*e aouid get the proper credit for values for tax purposes* There was a period of time where they were consulted in respect to tax matters and in respect to the minority purchase. They were consulted about the -U7- desirability cif organizing a new comply which was done, and carrying the assets trap the old company's records to ti» new cospaifiy*« re• cords. After all that was done, they continued on into making a cost system. One of their first tasks WAS to work oat this legal structure and the actual physical assets of the Caapuay for the transfer. They started this work about April of 1919. I think 1 mm transferred to that work about that time but I think they had done quite a llttlet work prior to that time. I think probably Mr. Shapiro's first contact wxs late in 1918. 1 understand that Mr. W. B. Kayo was very influential in bringing about the arrangements whereby the Old Colony Trust Company cane Into the picture. He was instrunental .to getting them to handle that. It would seem logical that Mr. Rltegeassitli would beadle eose- thiag like 'that, but I think probably he wasn't as close to Mr. ford, as Mr. Mayo was at the tin*. Mr. ford handed. Ma the job of negoti• ating for the purchase of this stock. 1 think there is a great deal of truth is the* statenant that Mr* Mayo instigated this by suggesting to Mr. Ford that he Buy the Minority stocks. 1 don't know that this is »0 of ny own know• ledge. If It is so that he .had suggested this, It would fit in nicely because he had a Brother-la-law at the Old Colony Trust Conp&ny. 1 couldn't teH you anything about Stewart 1%¾¾ who mm -48- the representative that picked up moat of the options of the stock. It was just a name to me. I did kaow about Boper, tiie commissioner of Internal Bevenue who was to supply a fair valuation figure for the stock prices. I don't believe at this tiae that 1 can recall too much about it. At this time the Ford Motor Company was going ahead with the program at the Bouge, and this was causing a certain .amount of financial difficulties, I didn't come into that situation at aU, I knew Mr. Todd, who was chief clerk of Sew fork City and was appointed assistant treasurer, but not very well. I believe he originally eaae from Milwaukee, 1 believe the original idea there was that he would be in Bew fork and could gp to the Chase national Bank and sign these negotiations. Mr. Todd was one of the oldesx the auditors and had gone froa auditing work to position of c; :>',' clerk of Hew fork. He was quite well known to Mr. Ford and had th- confluence of Mr. Ford. They set up the lastern Holding: Company that was Incorporated In Delaware. I think it was named the Eastern Holding Company initially to hide the fact that it was a Ford. Interest. It then became the Ford Motor Coapany of Delaware. It was merely a change of names, ae I remember. 1 think it was only « smoke screen so that people would aot be aware of who was trying to buy tbe stock, i was under the Impression that the stockholders did not know who was trying to buy tbe Ford Motor Company stock, ana working through Qam holding company was somewhat of an intended .smote screen. It is igr understanding that Mr. Couzens was perfectly aware of who was going to buy Ms stock. I've heard that Kir. Couzens was the only one who knew that. As a matter of fact, I beard that Mr. Gousens was approached first., and he said If the others soli mi he would tee* At the tins - of this transfer I was working with the Thompson and Black group. I knew a good deal about the transactiono klthoiigfi I didn't direct them or make them. I knew all the details at the time. I was fully aware of what was going oa hut 1 wass*t one of the direct• ing people in it. On these transactions that transferred the assets and the liabilities of the Ford Motor Company of Michigan to Ford S%tor Company of Delaware, the value of #300,000,000 was determined through Thompson and Slack. Mr. Jacob Shapiro was the moving force of the Tlxwpsoa and Black .group. 1 think he was also the one who was advising them as to how to carry out these transactions to the best advantage, 1 think he would be more influential in the picture than Stewart He-bb of the Old Colony Trust. Webb was really Just picking up the options and negoti• ating with the minority stockholders. The planning was done by Jacob Shapiro or by central ford figures with the advice of Mr. -Shapiro. I never thought that Mr. Shapiro being Jewish affected Mr. Ford's -50- attitude toward the arrangeaeat. 1 was only involved in the 1926 minority taxpayers' suit to the extent that Arthur Lacey tu tbe attorney for the Couzens* interests at tbe time, and he needed a good deal of iafowaatioa from the ford Motor Coapany in connection with the suit; and it vas ay job to have the information supplied to hits, the Company received ao compensation for giving out this infowatioa which covered the financial history of the Company. As 1 recall it, it WAS all infor- aation that was necessary in connection with the transaction as a whole, and it was aade available to hlau I believe ia the first instance Mr. Boper was requested to make this valuation because Mr. Couzene in negotiating for the s fie wanted to know where he would stand tax-wise, i lot of this infor• mation was got up for the purpose of getting a valuation froa Mr* Roper, that same information was aade available to the Gmwmm* Interests later. 1 was acting as liaison man with Thompson and Black, i liaison man as to tbe whole Coapany. 1 think it consisted minla of doing two things? 1 vas expected to supply to the* information directly or indirectly, and 1 was also expected to learn froa tbsa the system that they were installing with the Idea thai 1 mi^hi ce -ibl<» to c±rr^ on with the work after they left. The idea always was th>.t ..ft^r instaHation they would leave the picture altogether. -51- 1 think both, the coat system and the auditing vas done at the same time, hut I don't recall that one was necessarily Interwoven with the other* 1 believe the eost system development was a thing carried oa separately from the matter of valuation and the matter of handling the entries from the iichig»n coapany to the ©eJaware coapany. The one involving the transfer of entries was handled pretty closely by Mr. Shapiro and one or two of his top advisers. Whereas, the costing system was handled by another associate of Mr. Shapiro*s or Mr. Thompson's. I don't remember Ms name. The organization that dealt with the Ford problem was one that was really built up by Colonel Thompson and Mr. Shapiro for that purpose. By the Ford problem 1 mean tiie coat accounting problea. I was aware of all of the work but I don't remember to what extent 1 was liaison man for this tax work. 1 knew about it aaa I remember that very, very veil. I worked with two or three ssen or* the details of it aad oa the principles of it. There I was involved along with Mr. Shapiro at the time and an accountant, and economist named Mr. losenberg from lew fork. I've forgotten his first name, but he was an expert in tax matters and worked with Mr. Shapiro on the development of these entries from the Michigan company to the Delaware company so as to make it right for tax purposes. Taxation played a large part in this picture. The actual arrangements of transferring assets and everything else was taken into -52- account fully because the taxatioa at thai time had Become a very big financial problem. I didn't have anything to do with paying off the notes for the minority stockholders. 1 think that mm largely Mr. Klingensmitb's doings. There w*s a period there between sometime in 1919 after the close of the war and 1921 when a tort of a mild re• cession set la. At that time the Company had extended itself because of these loans and found Itself Just a little bit short of cash, fv;,- thlngs were done. In the first instance, of coarse, money me borrowed to pay for the minority stock interests. Thea a great many venders were paid by means of notes. I have forgotten how much w«ts outsta»di*ig but there were a lot of payments amde by six per cent draft. Then rapidly as the idea was developed and as It could be done, inventory was turned into finished products. By that tine Business had turned around and the Company was able to realise funds and profits with which to liquidate all of Its liabilities. The Company stopped production almost completely from Beeember of 1920 until January of 1921. That was tho tim** of quit.- \d: re• organization in the Company. I think that was the cause of ihe close• down. I think Mr. Ford felt the need for reorganising the whole Gon>,.-..ny and Its staff and operations. There was also to seme extent the question of a desire to know ^ust where the market was going at that particular time. I think there was some doubt about the economic stability of the -53- country at the tiae. There was an industrial depression, and i think this was Just a procedure to stop and take a look at tilings. 1 don't reaestoer anything special, 1 reaeaber at that time I was the only aaa out of my division that was retained on the payroll. When I say ay division, 1 asan the Tax division. After maybe a number of days or weeks, I was placed as assistant to Mr. Leister who was the auditor at that particular tiae. It is ay own opinion that Mr. Ford felt the whole organ• isation needed streamlining. You must understand that I wasn't in any top position at that tiae, and I didn't know too sack about policies except as I was able to view thea from the side lines. Of course, I was personally Interested in the situation. I don't remember that the previous period of financial pres• sure had been met satisfactorily fully. I think probably if the effects of it weren*t present that they were so recent that they influenced Mr. Ford into taking a look at his whole organisation and the whole situation. I think it was a combination of a financial stringency and Mr. Ford's desire to revaap that led to the reorganization. 1 think probably the financial stringency made him take a good long look at his whole organization at that tiae. I reaeaber that Mr. Fort was also looking not only to the production side of the Company but the reorganization of the business administrative side of the Company. During this period such men as Turrell, Brovnell, Knudsen, JUvklns, -mi Klingensmlth :wtJ, oui t..- Company. He also eliminated »s Kiny us 6:>) telephones lit this ttwft Just prior to this tiiftj the entire riufitir);-. .'usy vorking oa a series of physical asset recaps and waking studies of th." structure Of the Company, I believe that was p:trt of the -mrh dona by Thompson and Black, There waa so/as work done alow, tbit line bv Mr. Leister who had succeeded Mr. Turrell as auditor. Kev oiuiiii' of branch accounting was wade at that tine. 1 think that was the thee when branch profit and loss accounts vere discontinued, anu %tay wre placed on a simple single entry systea to the central office?. 1 recall in 1920 all tiae trawling auditors were called in to make surveys of all the departments for Mr. leister. Oa the thirtieth of December in 1920 the traveling auditors t.er; dismisses by Mr. Turrell and by tbe thirty-first of December the entire >'*udit: it, Department was wiped out. It vas at this time that Mi. Turrell xa": Mr. Kiingenamith were dismissed. Mr* leister was then p-iue*e* ia Mr. Turrell*s position. Mr. Leister was given i veek or so to stike <<, new syste-w a** accounting for all the branches. This was tba time when 'd-j- ^nnf^turin • Accounting Department was also discontinued. Before the cost system had had time' to be placed in operation by Thompson and Black, it was dropped. I bad been taken from tbe Thompson and Black frouu -in., ». i..c<*d in charge Of the Tax division. What I really did was to take over the Federal tax work that had been Ioae by the Thompson aad Black people for a short tiae, really by te. Shapiro's group for a short tiae. Then I added to the division all of the local tax work; state tax work and state report work all over the United States. I the assistant in charge of this division. Mr. Henry Barrett was actually in charge, is was aa attorney aad 1 believe maybe aa assistant secre• tary at -that particular tiae working for Mr. B. S. Bartaan. I was the aan tbat was in charge of the actual operations of the *hsx Department. 1 newt have gone to liaison work with Thompson aad- Black sometime before April of 1919, I was stationed over ia the old St. Francis Home before I went to legal tax work. I think the date of March 1» 1929 where I was in charge of accounting and all tax. work is the earns appointment th ,t i ' In this Legal Tax Department I think I had *bo»t ten or twelve 'people working on the accounting. He drew upon any department necessary to get the information that we needed for tax returns. It was the Auditing Department in part and the Manufacturing Accounting Department where th© property values were concerned and amrehaadlse values were concerned. Sometimes It was the* Msbureement Department for certain purposes. We kept no accounts ourselves. It was part of the Legal Tax Department work to decide that some expenses handled ia one way would he mors4 adv^ata.'^ous x-o ta<» Company. We made many changes j; whether uuder tlw* circuit oiricos Ua.;, were very great, I don't recall. 1 do fc.tov tv-tt *e ir.ajc- .a^a r_.tti.va- i* procedure^ as we learned about the tax laws sad as *«e le .rv * •< n the Company's operations. Me kept studying that type of ti»fnr • time» I don't believe Mr. Shapiro and Mr, Bosenberg were still available to give us advice, I think they were available for causal- tation, but once we set up a legal Tax Department I think we staved free of them pretty veil. We had our own independent operation in so many words. I personally had somewhere along the line learned someth?,i: about federal taxation. I think 1 learned quite a bit at the Wniversity of Pittsburgh, so that 1 knew something about it and thea studied it -57- quite intensively when I was placed with Thompson ani Black as liaison man. When we got to t»» 'point of actually* asking out re• turn* in the Begal Tax Department, I myself, along with some others, knew pretty well how to handle it. My work for this first year was largely setting up the structure of our own department and our own procedure as to bow this would be handled. We worked out income tax and federal sales tax and state taxes and local property taxes* We also made out reports to the state governments on. statutory agents and that line of work. That also included the report that would he given to Massachusetts every year. There was also a separate Legal Department ia addition to our department.. Mr. RoBerteen had left aai his place was totes 'by a man named Jack Kennedy. Be still lives here in Detroit. I i By Mr. G. B. Bongley. I didn't have anything to do with the time the auditors c a» ? in and made a complete survey of the whole Company including personnel. This was during the reorganization time. That was done under the Auditing Department completely. Mr. Leister was assisted in this work By a Mr. Hosmsr. I think Hosmer still works for the Company or was retired comparatively recently. When the Company ceased operations la December of 1 P. •, v -< -58- entire department except myself was laid off for a short time. 1 think a few. of them were laid off for just oae or two days • fhea they were rehired — ia th® case of the legal fax Department employees — as aeahers of the Auditing Department, fhe eonsolldation took place immediately, at this tiae. Some aen cans ia immediately aad some later, but I don't know how much later, a»ybe a month or so. I think they caae in as rapidly at we could satisfy somebody of the necessity for the aen and the necessity of the work that ve had heen .>ohv. The new Scheduling Department was started* somey-boro :.roup; 19¾ or 1921 under Harry Bills. That, woulo tie h! with tw IVX.VAH- -.tion. At this time Knudsen had bee» sent out to make a survey of all the branches. What 1 know about Knudsen's findings ia relation to the branch situation overseas had bee 3 tola to me V My. .iUjrt Byrar., who at the time vas a aetsber of the Vt-3 it in? Dor>jirtae.nt \.y.\ sn^a. ;-r>'-it of his time auditing foreign branches aad plants., Mr, Byrne told ae about this several times. Incidentally, Mr. Byrns is now deceased. Mr. Byrns did not aake a written report on the situation about Lord Perry and the English company in 1'.»19 because of t.*-a Eiutisn libel laws. I reaeaber Mr. Byrns telling «e that. 1 never 1-,-4($ .* written report froa Mr. Byrns and he siid 1¾ had never re»tfc»red H re• port for the fear of libel laws, getting either himself or ta-.e Co«a ;T- tbrough his representation is wrong in some way. He vas vlth Mr. Knudsen part of the tiae Mr. Knudsen woe there making an invesU.-jstiou -59- of some reports concerning the operation of the English coapany* •Hr. Perry at that tiae had soae aen associated with him vho were either directly employed by the Company or employed by seme company that seemed to be associated with Hr. Perry, fhey were t*m® rs, Mobb, Black, and Heathcote. 1 don't know ,)ust what positions they occupied or what companies they were located ia. Also involved vus a firm known as the Trafford Engineering Company and also a firm knova as the Motor traders Insurance Ccwpaay. Mr. Perry, about the same time, was interested also In the sale of British war surplus. 1 understand that hs represented the goverment part of the tiae in connection with the sal© of that var surplus and that either siaultaneously or In going froa oa© position to another, he was interested in a firm which dealt is British war surplus. Mr. Byrns told me that the new Trafford Engineering Company in which he believed Hr. Berry had aa interest had soae kind of oa arrangement by which th® product of the Fori Motor Gowpaay (which 1 believe was principally trucks) had to be sold through th-it company to the dealers. The Trafford Engineering Company took a profit; of some i 10 or $50 on each truck. Also, ©very unit that left the Ford Motor Company had to be insured through the Motor Traders Insurance Company which was a company that Mr. Byrns believed Mr. Porry baa *.i interest la. So the dealer and the public were compelled to r>s»y »60» something, beyond the regular dealer's price for the product of the Ford Motor Company, or the dealer's price was set in such a way that there was an allowance in there for insurance and for commission to the Trafford Engineering Works. Mr. Byrns also told me that he actually saw in the hoods of Mr. Xnadsen a check for some * 200,000 or somewhere crow id $1,000,000 at the current rate of exchange made out by Henry Fori & Son, payable to the British Government for war surplus. 1 don*t recall Mr. Byrns*s exact inference from that hut as 1 remember it, either Mr. Perry as an agent of the government was selling war surplus in the form of tractors or trucks to Henry Ford & Son, or he as rep• resentative of the Slough Company, which 1 believe he owned, was having Bsiory Ford & Son finance the p«el»se of the war surplus from the English Ooverament. All of these activities wer© considered highly i rre • hilar and out of line with Company policy. Out of that Mr. Perry vis asked, to resign and did so. This was at the time whan 11« C. .tndersoa became managing director of the' English Company. As I remember, it was la 1919 and it was at a time when Mr. Anderson, 1 think, because of what was learned about the operations of Sir fercival Perry, was asked t© go to England and take charge. Mr. Anderson had been an American branch manager up to that time. I never was familiar with the report that there bad been -61- a great deal Of propaganda throughout England to prevent the im• portation of American-made cars and products. It does fit in with what Mr. Byrns told me about the activities in England. 1 think that was a deliberate attempt oa the part of Perry to prejudice the sale except through his own organ!sation. He was building up his own selling organization using Ford Motor Company products and finances to carry his owe program forward. Also at that time he had an over-all distributorship covering London, i don't remember very'much about it now, but he did have such a distributorship, as I remember, and all the London dealers were expected to Buy their ford products through this London distributorshipj and it wasn't any longer possible to buy them direct from the fort Motor Company as it bad been in the earlier days. I don't know bat what that was true just in the London area. I didn't have too such familiarity with dealers' contract things at that time, but I do remember that Mr. Byrns spoke of oert'ti** dealers that wouldn't talk and seemed to be favored by i*r. Perry is against other dealers who made complaints and would tell whit they knew, either because they were loyal to Ford Motor Company or Iwc&aso they felt they had been discriminated -against, I remember that very well. It was Mr. Byrne's duty upon ae«ign»ent from America to go from company to company. At that time the assignments were made By -6¾- Hr. teister. while te was ia the company of Mr. Knudsen ia England, I'm sure he was expected to follow toe orders of Mr. Knudsen. 1 remember Mr. Byrns tellingrae that after he e iw the -fc 200,000 check upon the funds of Henry Ford k Son, .Ltd., he vu-vte,i> to make an examination of the Henry Ford & Son hooks but he visn't permitted to do so at that tiae. i don't knov who prevented this audit. I merely remember that Hr. Byrns stated that he wasn't permitted to make that audit. Whether that was the result of Mr. Knudsen'a orders, .who may have felt he bad all the evidence he needed, or whether it was the result of Hr. Perry*s orders, 1 doa't know. I'm inclined to believe that it vas probably at the orders of Mr. Knudsen, Be probably felt he vac clearing up the matter and didn't need an examination to get anything further. 1 think1 it is a fair conclusion to say that Mr. Knudsen aade the trip to Europe to re• establish business associations that had been severed by the results of World War I. Although. I didn't at the tiae have an active connection with the procedures in Europe, 1 do knov that s Mr. lee had teen manager at the Paris branch up to ths time of the war. He had succeeded a Mr. White. I think some of the European companies were incorporated to avoid the possibility of foreign lav applying to the operations of the Michigan company, of United States corporations* I'E» prwtt -63- sure I remember that the stock was held by individuals because of some laws, especially in France, which attempted to tax the whole operation of any company having a branch in France. I had thought that after It was once incorporated the business was always in the name of the individual, but 1 may be wrong. 1 feel pretty sure that they changed it as soon as they could* I wasn't familiar with Mr. Knudsen's report but I'm sure that Mr. Knudsen's visit at that particular time when Mr. Byrns accompanied him produced iaformatlon that caused ifr. Perry to resign or caused the request for Mr. Perry's resignation. I think Mr. Knudsen represented Mr. Henry Ford at the time. At that time I'm inclined to think that probably Mr. Knudsen held a position at least «4»! to that of Mr. 8orenaen, if not a little superior to that of Mr. Sorensen. Particularly, of course, Mr. Khudses had been working with branch operations more than Mr. Sorensen had up to that time. I think Mr. Inudsea had made some trips during the war to Europe in connection with operations of the ford Motor Company and was score familiar with them than Mr. Sorene#» was. I'm not sure about that, but I believe that is eo. I couldn't tell you any of the factors that led up to the break between Mr. Pord and Mr. Enudsen. I never knew what the reasons were. I do renwrnber very distinctly Mr. Knudsen's leaving and he had been so such a part of the reorganization that it surprised many .6¾- of us greatly, At that time I know some of us felt It wae again a case where Mr, Sorensen was taking top position and there was ale- agreement among Mr* Sorensen, Br, Mayo, and Mr. Baucises as to how some of these things ought to go. Again we always felt (1 say we, hut I wouldn't he able to tell you who we were) that Mr. Ford had to make a choice between several men who didn't agree among themselves, and he chose to keep Mr. Sorensea. By the time of 1921 Mr. Henry Ford kt.J set up a Tractor company in Dearborn. He had also started to build the Hou-re i He was no longer at Highland Bark personally. Se conducted hla oper• ations from Dearborn and 1 think he surrounded hir.s<»lf by nev wsriccre and included at that particular time some offe>.e olde r »v-.i. I t.in• fer. Mayo was still with him. Mr. W. H. Smith, a c'.cmist, >%?i still with him. Charles Sorensen played a big part in the situation. I think looking at it from Dearborn, to which be had moved his operations, and looking at it in the light of a lot of distaste• ful things that happened to him out of the Dodge suit, he decided that the whole organisation was top-heavy or had in it some timber that wasn't working to his objectives. Se thought that the reorganisation on that account was needed. That is the way 1 felt about it at the time. Whether that was correct strictly, 1 don't know. I wasn't very far up the ladder, although I was far enough up to observe a lot of things. 1 think Mr. Llebold also was a strong influence In advisi- t -65- Mr. Ford at that particular tiae. I think it vas following this period or Just before this period when they bought the Lincoln plant. I guess that vas in 1928. When they bought the Lincoln plant, they decided at one tiae to aove the Highland Park offices into the Lincoln plant offices, fbere were three or four great big floor© at Highland Bark aad just & sa&ll place in the Lincoln Plant, tbat would naturally mean a tremendous shrink• ing in the administrative side, the record keeping side, and so oa. It really wasn't a feasible thing unless you shrank the whole thing. I think he thought the whole thing was top-heavy. That particular thing didn't go through because when I was notified of it, and looking at the picture from a tax standpoint, I realized that it meant moving headquarters froa Highland Park to the city of Detroit. We bad tremendous taxable values in Highland Parh at the tiae because intangible persona1 property was taxed ad valorem aid not as it is today. when I took that point to Kr. Edsel lord and pointed oat to hia the difference in tax rates between Highland Park aad the city of Detroit and also the difference in the attitude of the assessors in Detroit froa those at Highland Park, It showed hia probably the now would cost aany hundreds of thousands of dollars annually la the fo« of additional taxes. He took a second look at the situation. 1 reaeaber very well going to hia aad saying, "1 'a bringlu -6t>- this to you because I think•it is ay duty to do soj hut I presume in these big:things, things like this don't count." 5 Se said, "Oh, yes, they do. fhey are very important.' Se directed as to get in touch with Mr. Liebold, which 1 did, aad I ex• plained tbe situation to hia. He asked ae a great aany taestlone about the thing and in a day or so the order to move was countermanded, 1 understand, because of tbat reason. 1 wasn't aware of any particular change in tbe attitude either toward employees or by the employees toward the Company during the period of I960 when the Tractor plaat was being moved into the Rouge area, I do think that it represented perhaps quite a change in the attitude of top people towards the business- of making aad selling cars. 1 think Mr. Sorensen probably was inclined to a little more direct action and rapid direct action, wore so than the man vho had been in charge of .policies prior to that time. 1 thinU from 1921 forward with the gradual move of manufacturing operations from. H.tghl -.nd Park to -the louge represents a period where Mr, Sorensen is in ascendancy. Of course, I always understood that Mr. Pord started the Tractor plant in Bearborn in order to have it separate froa the one in which the minority interests exercised a great influence. He moved it to the Bouge plant and tbat was a better location for general ammi- facturing purposes, but he did that only after he had eliminated the -6*?« influence #f minority directors. 1 think Ma trouble with the minority interests caused him to really examine the whole thing and decide it ought to he changed around a lot from the way it had existed up to that time, fhls period also represents th© end of the effect of the Sociological Departs»nt. Marquis was one who vent out and Had ne-r^-v been replaced, and the functions were sharply cur titled ~>t this iiifw. They were never really re-established under the old basic. I think at this tiae the general wage level of the country hid viBen to *?b«-re It was closer to what Mr. ford was paying. Maybe thcr^ vttsu*t the »-.mc-> necessity to try to help the employees handle their personU Sf;.\^i as there was at that time. It wis felt that the Company fud a.oac taa far in what you might call patern-iiisu. I would nark thie tlx- cha*irx?« 1 think Mr. P. 1. Martin hid probably been closer to Mr. Ford than Sorensen was up to this time. Mr. 8orensea came out here to organize and operate the tractor plant, t!h#a this period caae on, he had sort of taken th© lead and Mr. martin, while quite an influence and the son that Mr. Ford respected and mated around, waa really x,-*\>,i,>. second place from the factory end. i think Mr. Sorcnsen was waklna the larger decisions of over-all policy and Mr. Wirtin was foilovan the actual production activities withia the Comuany. 1 don't wovtu tr.„t Mr. Martin wasn't of some considerable influence in the policies of the Company at that timei 1 think he was. Be was a man who worked with -68» Mr. Ford almost from the beginning and I think he was highly reepeeted by Mr. Fori. There was another group of advisers, some of whom had been transferrtd to Highland Park, fhey were Mr, Kansler, Mr. Crawford, Biehard Kroll, and others. Mr. Kanzler was one of the first men to try and eat up a system of production scheduling la the Casparty. I've forgotten what his title was when he moved to lighland Park, but he did take re• sponsibility for production, at least at the Branches* and maybe at the factory too. Be had a large voice in that. He lad a voice in the amount of inventory necessary and that sort of thing, 1 believe Mr. Crawford was first noved to the Purchasing division it Highland Park and. then later it was decided that Mr. Sdsel Ford, who had just assumed the presidency, needed somebody as an assistant and they picked Mr. Crawford. lie had worked out here in tue Tractor Department and was an engineer, and he had a good knowledge of the Ford policies. He lad learned them from Mr. Sorensen and Mr, Fori out here. That came after his »ove from the Tractor plant, 1© was temporarily in Purchasing at Highland Park before be beeaae Mr, Edsel Ford's assistant. 1 think the Rouge plant was Built under the general direction of Mr. Sorensen who created an organisation of his own down "there. I believe he had Mr. frank Hadas down with him for a long tins as superintendent, the orgaaimtion at Highland fi&rk was considered a separate organisation but was being taken over by the Bouge plant. I believe it was left up to Br. Sorensen as to whether to keep the aen froa Highland Park or not to keep thea. Soae of thea were not kept. and soae of thea decided they did not like their new location or position and left. I think Mr. Hartxter left because of a dispute involving either Barry Bennett or a asa. naaed Kelly, the then Highland B&i* head of Plant Security, There was a crisis at that particular tiae in which the two clashed. If 1 remember correctly, Mr. Kelly had 'teen asked by Mr. Hartner to look into certain things, ami ran afoul of another asa who reported to Mr. Sorensen or Mr. Bennett, I'» not sure which. He was discharged. Mr. Bartner took the position that the aan wasn't responsible for what had been dose, that he had ordered it done. The aan was only doing what his own hose had told him to do and If there was any erittcian it should be of Kr. Hartner. He svU that \t that aan had to go he'd better go too, 1 understood that very de• finitely at that tiae, although 1 had m direct interest is the situation. That was about the year of 1925- About this time Mr. Martin was aoved from Highland Bark down to the Rouge. Mr. Sorensen still seeaai to be in the lead. He was the one who was shaping the Bouge growth. 1 always understood that Mr. Martin and Mr. Sorensen were supposed to work as sort of a partner- -70- ship la these natters. 1 think the do&lnatlag influence was Mr. Sorensen. He was the senior partner, yoa sight say* Mr. Sorensen was interested in tiie very large over-all policies. 1 think it is catting it a little too fine to cay that Mr, Martin would step into the operational end of it. I think Mr. Martin was ia oa the initial policy Baking to a large extent, i think also that Mr. Sorensen was in on the operational end after• wards to a large extent. I thiak their work overlapped a great deal, hut at the same time 1 think Mr. Sorensen was the senior partner ia the deal always. The cost system developed by Thompson und Black never really got a start. It was thrown out before it wus corapleted, tr.u t v. cost system that had been used by us vas continued. Mr. Carnegie continued to strengthen it. There were also soae changes made because of the single-entry system at the branches, whereby the operations at the branches were: reported to the central office here on a report basis aad incorporated in the central figures. If 1 remember correctly the Thompson and Black ec.ieae- never- got into any real operation to the extent that we started to aet production out of it. It was dropped because it vas to© voluminous. They lad a treaieadoae number of accounts and It vas considered entirely too voluminous, and It would have required a tremendous number of people. It was the thought of Mr. ford and his advisers that ve -71- could get along with much less than that. 1 think under the leadership of Mr. Klingenssalth this was allowed to he developed to completion and installed, and it wasn't until after Mr. KllngensBslth left that it was decided to throw it all out. It wight very well have been that such a situation was brewing for ojoite a long tins because, of course, there was a very netieoaVle activity ofi the part of Thompson and Black men, uod there was the assembling of quite a lot of men in the old St. Francis Home. It was visible that quite a lot of clerical, -people were working on accounts of some kind. They changed the accounting system at the brooches as part of the streamlining. It was necessary to make some changes, and it seemed to Mr. Leister at the time that that was one change that could be made and a certain amount of accounting work reduced at the Breaches. It actually resulted In a considerable reduction in clerical work at the branches. % to that tiae certain information lad to ha seat forward to branches relating to costs of components shipped to branches from various sources, and the branches in turn built their costs beginning at 'that point* That was so longer do*, from that time on that was all handled at the central office, ineorfwratiaa th© infor• mation that came from the branches. The double-entry system used by the branches was completely eliminated. The new reports wouM he, the masher of men hired, the -72- master of hour* worked, the production* and so on, The volume ia dollars of sales as divided between ears and parts was recorded, The dollar expenses were recorded because each branch had a. working; fend and It was necessary to record the dollar® of expenditure for aseejssbly labor and various expense accounts and for taxes* those expenditures were generally aade through the branches out of the torunc?workinj . fund whieh was leimfeursed in a few days. Quantity of curs produced was also reported. It was all the 'basic material necessary to make a profit .and loss statement. The actual accounting for that wm't done at the branches. In other words, they would not have the over• head allocation of executive salaries, for example. 'They maintained a certain account for inventory purpose* and for property value purposes. 1 believe I'm wrong ia saying for inventory purposes because I believe when it was necessary to make reports' for taxation, we used aa inventory taken near tax -late uad bad it priced at the central offlea, and the figures were given to the branches and the branches used that for their tax report* far local property taxes and that sort of thing. The actual physical inventory of the branches and the home office would be taken annually. They also took a physical inventory on sort of a spot basis, I think monthly, for the purpose of making production schedules and for the purpose of shipment of production, material and the purpose of balancing production material. Where 73- tax dates differed in various states, those figures were need along with figures relating to their stock of service or spare farts, I don't reaeaber whether the spare parts inventory figures sere kept on a perpetual inventory at tae branches or not. 1 believe they were not i I think tfct information was famished to the hone office which priced them and seat the figures hack. So far as the record end of it was concerned, Mr, Ford obviously couldn't personally examine what was necessary. 1 think he vas perfectly willing to allow necessary records, but aot being able to personally determine what was actually necessary, there were tines when h© took loss incident to asking eons grand, over-all re• ductions i aad then he allowed it to be built back as somebody proved it was necessary, ffeat WAS done daring ay experience there several times. I*» not so sure but what it wasn't a pretty good systea that he used, to tell you the truth, fhe administration tends te ash ton- heavy aad there are a lot of proce iures set up which alclt -t the moment seem suite proper but nobody thinks to turn off the faucet once they turn it on. By chopping it all out at one tiae it seeas rather hard, but it does make the people who are left coae up with suggestions of a necessary thing, fhls is actually what happened. It might be that 600 telephones were dropped. Froa ay experience it is probably that 300 or aore were pat back oo the 4©b as soon as -7¾- soBeoae could point out to the supervisors tbat they mm really needed* 1 don't know whether Mr. ford would always get the 'beet sen hack into the organisation. I doa't know whether these soves actually Increased production or aot. I wasn't la a position to aay. 1 think increased production aad improved production vas the result of an improved technique installed by the supervisors, ^ertaps over an organisation like that there was some stlwulttion of creative thinking in the production end of it and it did produce better results* If that was so I don't think I was aware of it. 1 was brought into the Auditing Department under Hr. leister who had taken Mr. furrell's place. 1 acted ia his place when he wasn't there on all work. My main Job was to care for the lax end of it* and I did that. I did help Mr* Leister ia his over-all work aad took his place in lis absence. Mr. £dsel Ford came In as president somewhere in here. At that tiae Hr, Kliageasmlta was treasurer. When Mr. Kllngensmlth left as treasurer, 1 believe Mr. Sdsel Ford assumed the title of president and treasurer, I believe Mr. Sartasaa had been a secretary or assistant secretary, and 1 believe Mr. Craig was given the title of secretary and assistant treasurer. He took that position whea Mr. Klingeasiilth left and carried on hie work from that tiae forward. I think Mr. Leister reported to Mr. Craig. That vas an intangible line. Ton couldn't see it on a chart anywhere. He probably -75- I also reported to Mr. Sdsel ford. I know when I took bis place, 1 nominally reported to Mr. Craig, but 1 reported also to Mr. ford, always of course with the full knowledge of Mr. Craig, We had a working arrangement that way because Mr. Craig wasn't always there. The line was through Mr. Craig. I don't remember that the iuditinc Departntent had W>en decreased very Botch. The Auditing Department never was a very lar^ organization. 1 think when we moved our tax worfc into the* Auditing Department, the Auditing Department as a whole was increased. 1 believe that it is possible that the traveling auditing staff was somewhat decreased at that particular tine, but 1 don't recall how much. Mr, Carnegie*s department was left pretty much as it was. Re carried .out the same system that had been used before the Thompson and Black .survey came- into the picture. We was improving it as he went along. He bad about 120 men in that department at that time. By 1928 that number hau been decreased. 1 don't recall just how it was decreased. 1 have a faiat recollection that there were eonsideruule changes made in the costing practices, and It was shortened up a whole lot. I don't now recall how that was done. I think it was decentralised to some extent. I think at that time a good deal, of the work that had been done ia the central office had been transferred to plants; not to Branches, but to plants lite IronMountain, Sortbville, and so on. That sight haw accounted for some of it, but I'm aot wire about that. My major responsibility with the Company during tr»«» tinr I was assistant to Mr. Leister was to care for the taxes und repots to the United States Federal Government. In addition to th it I X'-±rr * to act generally as far as 1 could to help Mr. Beister. I did considerable amount of analytical work oa reports that were submitted by traveling auditors to the home office, and I wrote letters to branch manager© Burlng this time the Foard Motor Company had a tremendous expansion in all fields, and for the first time besubsidiary companies in the Auditing Department. I think I am right in saying that we carried out the Bookkeeping trans• actions for them. I know we did handle the general Books for a great many of the subsidiary companies. I Believe we handled them for the Michigan Iron,Band & lumber Company as well, Based on reports suBmJ.tted By then. la the case of the Michigan Iron, Band & Lusher Company they did have quite a lot of records at one time or another at Iron Mountain necessary for carrying on lumbering operations there. There was a certain line of information also furnished to tK» Cost Dttpirtment .77- which made up the coats of the products of the Michigan Iron, Land & Lumber Company. I don't know whether that vas done at first or afW Mr. Martindale took over. It might be that the costing was done at Iron Mountain in th® first few years. That would be before the corporation was taken over 'by the ford Motor Company. I don't think I was involved ia any way is negotiations -of the purchase of these various holdings ia the Upper Peninsula. I did go up to take over a lot of records and cash aad some stocks th<*y had. 1 don't remember the details of it any more. I probably 1 ai somebody wtth.ae whoa I left 1» charge, hut I forget Just bow that waa done. 1 worked with Mr. Kingsford oa that particular transaction. When 1 took over the records of the Michigan. Iron, Land & Lumber Company, the predecessor company was located 1» Marquette. The Michigan Iron, Land & Lumber Company was set up at Iron Mountain. I didn't deal with Chase Osborne, as 1 reaeaber, but I did aeet hia aad have soae conversation with hia. 1 have forgotten who I met m there. I didn't carry on any negotiations with the Steams & Culver Lumber Company or the Claries A. Bebard Coapany* I think the only .part that I had in the transfer of that was -taking care of the accounting end of it. 1 don't think 1 had anything further to do with it than that. 1 think negotiations were all conducted by Mr. Kingsford. Mr* Mayo probably conducted a good deal of those negotiations. •78- If be vas vita tbe Company thea be bad. a great deal to do vith it. A Mr. 1. 1., Smith had a great ami to do with that also. 1 ratter thiak tbat if he mm still with the Coisp&ny at tbat tine tbat !® vould be involved, is tbat. Those two. mea were also involved ia the purchase of coal properties later. Whea a new company such as the f ordson Coal Company vonM be iacorporated to handle the raw material resources of the Company, they would be given an independent set ©f books within the Auditlag Department. It depended upon the volume as to how they were handled. I thiak in most cases one nan handled books of govern! co»panles. The details ware all bandied back it the plant, and what wc rot •. i? merely a suwsaary from which we could wake entries. Many of those coapanies vere selling directly to the Ford Motor Company. «e maintained a profit and loss statement for these companies. It represented ^ust bookkeeping operations. That would be true of all the other raw material areas. for tax purposes separate returns would have to be prepared for each one of these corporations and consolidated, the proper allowance was made for Inter-Company profits. What we vould do is make a general statement for the ford Motor Company Indicating its holdings ia all these subsidiaries.. Tbe D.T. 4 I. represented a more complete operation because it was operating, under Interstate Commerce rules. 1¾ pretty sure that -79- we did not keep the general hooks for that outfit at all- l .--\ i ;v- , however, that we finally had t-> consolidate it with thw bi* r.-ty—rr of the ford Motor Company. I think their operations v«<* c>j«nol.hh*t.«f all into one tax return. That would h.» on*.? of tha sroas tro** >r h>- f oid bandlea. The Dearborn Bealty & Construction Corporation come under our operations at ©as time, hut I've forgotten at vhat pou'-c. It didn't last very-10¾ as a heavily operating company. I think when it w-*s very actively operating as a builder and seller of houses, t--?y •>•,••.! books of their own. Somewhere along the line that was all discontinued and turned over to the Auditing Deijartmeht of the Ford ;- Coava::; The rubber operation vie handled .ilto*/cts.rr ho,n u B» 1 I think monthly statements were furnish-"--* froju dovr. th**!-"* h- COFJ.I! *<* •form. That was a separate profit eenV-r - T! -it involve.t fo-- 5;<». 1- -~ and a lot of things we were afraid, of, so we were pretty careful. Me didn't want to be Involved in anything like that. The- report* from these foreign companies would come to the Audi ting Department for survey - Soma of tun automotive co-v <••'!• •' ; in some cases came to our fore ha; sales am^-rer, >r. Bobc-r-:... •'^v-r.'Uij speaking,1 the monthly financial reports came directly to our Auditing Department.. 1 had no part in the actual negotiations of hurch-isin : th.- Lincoln Motor Company. I knew something about them. I knew yr. h'i- nd was ia financial trouble. The company vas ia receivership. I think Mr. Harold Emmons was acting as the receiver. Approaches were wade to Mr. Seary fori, 1 think ia the first instance by &r- Inland with whoa he had been associated in one of the very first Ford companies. As a way out of that a deal was aade by which ford Motor Company acquired the Lincoln Motor Company. 1 had ao part la the actual negotiations. 1 was generally familiar with it and got into it later froa merely an accounting angle when the assets were finally taken over by the ford Motor Coapany and had te he booked by the Ford Motor Coapany. I was not familiar with the reasons for the disagreement between Mr. Island and Mr. Ford which led to a suit against Mr. Ford by the inlands. 1 reaeaber the disagreements and the suits were based upon certain promises aad so on that Mr. henry Ford was supposed to have «de to Ir. Lelaiti. Of course, 1 knew nothing whatever about, those supposed statements or promises by Mr. Henry Fori. Th« actual bookkeeping transactions showed no records of this sort of agreement. I sever believed myself that any such agreement was aade. When the Lincoln Motor Company was brought into the Fort Motor Coapany, it was immediately set upon the books as a separate division. Of course, with the purchase of assets and for the purpose of keeping a divisional profit and loss statenent it was set up as a separate division, but I believe the assets were all placed upon -81- the books Of the fori. Motor Company Itself, properly identified tm to the source ©f the assets. The Lincoln division was treated as a profit center from the beginning. I think we maintained a bookkeeping system for them. I think even the cost records were maintained by our Cost Record Departments. I believe the Auditing Department maintained sort of a memorandum general ledger oa the operations of that business for the Lincoln Company. I would like to call to your attention the payment of $300,000' to Mr. Leland by the Ford Motor Coaptny. I believe it was exactly $300,000 to Mr. Leland, either la a lump sum or over a period of time when he became associated as a consultant and adviser with the Ford Motor Company. Me booked it as either salary or as fee*. In the natural course of events we took it as a tax reduction which it properly was under those circumstances, then the differences arose between Mr. Ford and Mr, leland, I think after Mr. Leland had left the Ford Motor Company a public statement- was supposed to have been made by Henry Ford stating that that was purely a gift. 4s 1 knew it would happen, the very next time we had an audit of our books the Internal Revenue auditor hud with Hm an article from the newspaper quoting Mr. ford as saying that the $300,000 was a gift. He then disallowed the item m an expense Item. I prepared summary statements for the Lincoln Company, the same as I did for the Ford Motor Company. 1 think maybe the Lincoln -6a- operations were actually reported on our Company finctnc Uu atjtetvfc-tr as sections of tbat statement. When 1 think it over, 1 believe v* had separate revenue accounts for a nuaber of items; ford cars aad trucks, for Instance, Ford spare parts, .Lincoln cars, Lincoln spare parts, aad other items. I believe the Lincoln operations, although they were accounted for separately, we actually handled as a division of the ford Motor Company accounts. That would be to make It easier for actual financial record keeping. I couldn't tell you any of the background leading up to the purchase of tbe Stout Metal Airplane Company. I recall that Mr. ford would take over the coapany only if he could *?st all of the outstunS in*; stock held by the stockholders. I had no part in the ncotiattona. I don't recall whether this was maintained as a separate division on the ford Motor Company books. 1 don't remember that we had a separate corporatloa for that. If wm had a separate corporation, then we had a separate set of hook* and balance sheets, aad merely consolidated it for tax purposes. I think m kept those books in the Ford Motor Company offices. In connection with that operation I would like to tell you a story la which you sight be Interested because you asked m how the matter of Investments or new projects would come up and be presented to Mr. ford or somebody for action. I used to make a very great sany trips to Washington In connection with -tax matters. I was is the -S3- railroad Station one day on ay way to Washington when Mr, Edsel Ford saw as and pasted as where 1 was going. I 'bold hi» and he said, "Well, father and I are on our way down to Washington. Pe have our car up here, so why don't you just come along with us?" Of course, an Invitation was a command and I went with him after he did this little errand that he was apparently doing on the platform. Mr* Ford was ia the car and Mr. Mayo and Br. KcClure i 1 were in the car along with Bdsel Ford. Mr.'Ford said, "Where are your bags?'* 1 told hia, "They arc probably up ia ray comaartneat. * & said, "tou'd better get them and bring thea back here. We've got .room for you." t didn't take any action really oa that. 1 didn't know whether 1 should really stay there or not. He brought it up again later and seat somebody up for my bags, so 1 aade the tn:> xn Washington' in his ear. I'm telling you all this as a preface to tb# real thing that 1 want to tell you. During this trip, after lunch time and after Mr. Ford had taken his usual nap, he was sitting talking, Mr. Mayo said, "Mr. Ford, it would be a nic® thing if you would erect a mooring tower on this airfield up there 1» view of the Government's interest in these diri• gibles and talk about bringing thea to Detroit and so on. It would be in line .with what you are doing in connection with aviation. Maybe it would be a alee thing if you did that,'* *Sfa«y talked, for a few minutes about that anil it seemed to m that it was the first tiae that the idea bad ever bees broached to Mr. Ford, there Mr. Mayo had gotten the ides fro*, of course? I didn't know. Very shortly thereafter the mooring tower was built, ,1 always felt that it came right oat of that conversation. I thought that it was sort of an example of how things cmm up and were con• sidered by Mr* Ford. If he thought the® good m ' oulc develop t* He would immediately put thea iato operation. I merely tell you th;i because t think it might be of mm interest to you. 1 don't remember BOW the bookkeeping mm set up for the airlines. 1 don't remember that the Aviation division had a separate system of bookk#epin«. 1 don't rememfeer that the Aviation division ever made any money. 1 think It was stopped by Mr. Ford when t very favorite test pilot, Mr. Brooks, was killed. Mr. Brooks had develop a little small airplane which he m» food of using between his aomv -, th© plant, then on a trip to the South somewhere his plaas was lost somewhere- below -Jacksonville, awl I always lad the idea tiiat Mr. ford felt very badly about that and that was the thin.-: that clinched his getting out of the airplane business. It might have been the pilot, named Maiming who was killed at that time. Anyway it was the loss of a pilot that seemed to he the tri.-gfer of the thing, Mr, Ford didn't want to develop anything that eould so readily he the cause of a lass of life, I never had anything to do with tiie Dearborn Independent. I understand that that was a separate corporation operated out of Henry Ford's office. I learned to know 1. -3. Pipp but I had no business contact with hia at all. It seemed to we that the Independent, while I was with tiie branches, was distributed among dealers. It seems to me that I' used to- sell subscriptions to the Independent to dealers. I oust be wrong on that because the first Issue was in 1919* It swat have been s<» other dealer publication, I know 'that we need to take subscription® for it froa the dealers. It must not have been the Isdepwtsjcmt. If I had anything at all to bring up about the Dearborn Independent, 1 would bring it to Mr. Cameron. I don't think I knew what he was, but we recognized hl» as a contact for Mr. ford aad for the Dearborn Eadepepdeat^ aad we would naturally go to him. It asi.^-i involve financial things as well ae policy. As I remember, it Involved mostly questions of information. It would 'be information atiybe th. t we wanted passed on. 1 aerely remember that we knev Mr. Cameron «*s a man to whew the information ought to pass and we would pas* it to hiia. There were times when Mr. Cas«roa appeared on the "Sunday Evening Hour." le used to prepare talks in the rough and sometimes give us copies of it in the rough for coswent. I don't think it was -86- always done, but 1 MA 2 used to get it if it involved figure*. I guess that was after the Dearborn Independent tisse. I knew nothing about the Sapiro suit except what I react in the papers. Whether Mr. Caaeron was out on his ova entirely as far as th* gtearbora Independent goes, 1 had ao my of knowing and I never did know, i think it is quite possible that the Bearbora Independent la this question of aati-Seaitiea really didn't reflect all of Ir* Ford's attitude aad thoughts on the subject, let, e«r* talaly Mr. Ford had laid out a poliey or objective or subject to follow just as he did in the operating end in the automobile aanufactanring, and it was left to other© to carry out Is detail* 1 think it 1» quite possible that Mr. Ford laid out soae end to be obtained by the work of the Dearborn Independent and then let Mr. Caaeron follow It out. I say this only because it could very veil h® 80, but 1 don't know whether it.was or not. I just didn't have a thing to do with the interworklnga of it. I always felt that Mr. ford felt he could m% along perfectly all right with Jews who produced work for a living by producing either as workaen or busiaessaen; that fee didn't life© the Jews in th® basking or financial fields and felt that many of them in these lines aaaipu- .lated business and intercontinental relations by finance. $h!s would tie in to a certain extent with Ms distaste for fall Street, I understood that Mr. Ford had the idea that there was actually -6> an international group of Jews who, through their own family •**ei,i.tiOi';- ships and racial relationships, controlled finance cap!talis* tfrrott-di- out the world. I think he thought that Wall Street in this country was influenced heavily by that group. X believe he thought that seme part of Hall Street was trying to handle finances for the purpose of actually increasing production as asjainst merely manipulation for profit. I think, hethought that the *T. P. Morgan Cosapuay, which 1 think was not Jewish controlled in any way, was a pretty sound institution I didn't have a great deal of contact with Mr. Fori so it wouldn't be likely that 1 would ever hear hip make any statements. 1 think Mr. ford, said that he thought; money was something to be used' to 1» put into productive enterprises and not something to be saved for its own sake. I think he always thought that any manipulation of business interests from the money staa£;.oint was wrong. I don't know just how to phrase it for you. I think be never had a groat deal of use for manipulation of stocks or iafc.wdble property through Banks. I tbink that ae thought that was a lino of work that when it got beyond ordinary coamerieal loans ana saving* it was wrong la some way. I think Mr. ford got interested in the bank situation quite early in: the .Highland Fark Slate Bank, but he never got into any very -88- Mg banking situation untilfee go t into the big Detroit Bask of Commerce group. 1 think Ms Interest was probably induced by Idsel fori. I always bad the feeling that probably Mr, ifeary fort mm supporting Basel rather than following oat Ms mm ideas is the bank* ing business, although Mr. fori, of course, did have the highland Bark State Bank and the Bearbora State Bank. He supported those froc an early date. 1 think all of the activity of a credit corporation W;„R promoted by Basel Ford and probably by Mr. Xanzler. I always believe*-, that was so. I don't believe that activity was promoted by Mr. leery Ford. By what happened later 1 think I'm right in say in;.: that he didn't. While he went along with it, he wusn't fully convinced that it was the proper thing for his interest. He later ordered the eredit company sold. Of course, he stayed in the banking business to save- a certain banking situation here in Detroit, 1 think. 1 think Mr. Kanelar was one of the guiding forces as far as this basking situation was concerned, and 1 think he got Mr. Msel Ford's support for it; and I think undoubtedly Mr. Henry ford aust h,J:ve gone along with the situation. 1 still think ti*at Mr. Henry Ford didn't wholly support it in Ms own mind. I think it was 1» 1926 when Mr. gassier left tke Company after a falling-out with Henry ford. 1 ca» ooly tell yoa what 1 [email protected] to he the situation at that time. Whether they are real -89- facts or not, I don't knov, although I believe they are so. Mr. Kanzler went with Mr. Henry ford originally at Dearborn as part of the tractor plaat operations. Then at the time of the big shake-up la 1920 he weat up to Highland F*».rk, to some extent as a representative of Mr. Pord, to watch the Highland Park operations sad sort ;©f be a guiding influence. 1' got the idea that he felt that there vere a lot of modern• isations that ought to be done, and 1 thiak he worked those out with Mr. Idsel ford. I thiak seme of these ideas Mr. Idsel ford considered important,;but weren't in agreement with th© ideas of Mr. Bear? ford. I thiak that sowwher* along the line they clashed, and the result was that Mr. K&asler was asked to leave. I*is sure in j?$r 0¾¾ mind th.it that was so. I'a aot so sure that Mr. Kanzler*e idea for an Improved system of' production scheduling had anything, special to do with the feeling in.the matter. I think it urns aa attempt made by Mr. Kaaaler to center control of Company operations at Highland Park under Hr. Idsel Pord.. % think tbat even though Mr. Edsel ford vas president at that time, Mr* Benry Ford considered himself the final control, as he actually was on the basis of stock ownership, ie mated to exercise that insofar as daily operations were concerned when he wished to «0 so* That ©lashed with what Mr. Kaaaler WHS setting up. Mr.: Kaastler w»s trying to set up a corporate structure -90- which would have a central administrative system similar to aay corpo• ration. Fartl&ularly be wanted, control to be in the office of the president. Mr., ford, did not care for that and 1 think that resulted in the break between Mr. ford and Mr. Kanzler* I believe Mr. Bdeel ford was oat of the country when Mr, KanHer was asked to leave, I think it happened that way ia order to avoid embarrassment for Mr. Bdeel Ford. In other words, Mr. Henry- Ford decided that the certain situation was wrong aad Mr. Bdsel Ford may lave had soae part ia setting it up, but being wrong it should be changed j sad rather than bother Mr. Bdsel Ford with going back on his arrangements that he algbt have aade, it was cleared up while he was away. It was done presuaably so it wouldn't embarrass Mr. Idsel ford, I think it wets a conflict in philosophy as to how a business should be run. I don't think there were any great changes that oaae out of Mr. Kaazler's leaving, except, of course, I think Mr. Sorensen became such more prominent ia the outside operations, that is, the sales aad asseably operations. Up until that tiae Ms authority had aore or less been permanent at the Bouge. Mr. Kansler's leaving represented a further step in his gaining authority. I think there was a difference of opinion between Mr. Idsel Ford and Mr. Sorensen, I think Mr. Sorensen was carrying out orders that he thought he had froa Mr. Beary Ford and I think Mr. Idsel Ford -91- didn't always a&ree with thea* I think he always .icceivted thorn •.•.-11- ingly when he was convinced that they ease from ME father, I :*ivayi? thought J-Jr, Eds«l Ford had a philosoph* that- jft-r -.11, Uiis «.a*i;iet.f was originated and huilt to very great profxjrtions by his fitter ttnd he should follow whatever his f&taer decided should 1¾¾ the toiley. There was a good deal of talk along the lines of c)i*agl^\'i from the Model T to the Model A ia that period. ,\ lot, of people- seemed to see that the competing cars were pulling up oa the Ford, that they had things that the Ford did not have at th^t ti r/-. The; thought something ought to be done, I don't think J wus .>*:•? ;xir,. of any discussion in respect to those things, I think Mr. Henry Ford wasn't sold on ths idea that a ek;.u-,e was really needed. After all, lie wis producing a car at- tae Lowes;, possible cost and any real chan~e would have made x>i i no re.-»sa iu cost. He thought as long as we were selling tfass la great volume, and I be• lieve we were selling them ia great volume daring those particular years, he wasn't soli that that would change to any immediate futare. He felt that the Model T still had usefulness cs low-? :--0 it could *!-c sold. He felt it was a good ear, and It wt,. They were iri great quantities and everything so far seemed to ha all n c« 1 think Chevrolet is making the saae sis tike today* Costs were computed and thos>.? costs were mho -ivuihttle to Mr. Edsel Ford and Mr. Sore risen an-i perhaps Mr. Knudsen >.nd m.iyh* even Mr. Mayo. Mr. Henry Ford, so far as I knew, was jsade aware of what the hook Costs showed during those years. I think the prices were always fixed by Mr. Henry Ford finally. He evidently bar! so« very definite ideas and some pretty good ideas as to vl at would fcg$ea if you increased your production in the way of lowering your cost through a tetter distribution of overhead. I think be -used tr, :-<> .u ;. out in keeping the price low and then asking the organization to f i v? ways and intone to actually produce good results on the basis of that low price. I thiak Mr. Ford believed from the very earliest that he wanted to sell Ms product at the Lowest possible arlc. Me re illy believed in the idea that a little bit of noney mad*? on a -r^-it wany pieces of; mereh«n#is« was naeh batter than making a lot of money on just a fern He actually mated to nut out a lot of ears for the benefit of the people. 1 believe that Mr. Ford set the prices 50 close that his top executives didn't recommend putting aome things 0« the cu- that might have: otherwise been put 00. They felt that they shouldn't pat them on because the price, was so close. 1 don't remwfflfcer that any model was ever set up sad then reduced ia fuality or reduced by the elimination of any accessory because of the price. Policy was followed then as it is today, by setting- a basic price and thea selling certain things as extras, which would increase -93- the total price for the customer. Sometimes spare parts profits as a total vould be higher than what was being realised oa the cars. li-t% was true some of the tiae, eat I don't know how mmh of the tine. Baring this tiae they were undergoing a large expansion operation at tbe Bouge. I don't think there was an over-all financial plan under which the organization worked. There vas no asster pl^: unless it existed ia tbe wind of Mr. B«mry Ford -md s o of B.s laasdlate advisers, lo meter plan was ever draw* up froa a financial standpoint or froa the stand-point of sueh a consideration by Ford directors as far as 1 know. If the fori Motor Coapany decided they were going to hate a steel plant it would be just as simple as saying, "Well, we're going to have a steel mill* Find out how much It will cost and let's build one.** 1 think those things were aot decided simply oa the spur of the moment. 1 can't give you examples, but they usually earns out of difficulties that were had in getting a certain particular thing. 1 remember particularly the glass situation and after quite a lot of discussion aad a lot of worry, somebody would decide that this would be the tiling to do. I remember the glass specifically because I did know something about that. After the closed car becaxae a big factor in the market, the glass situation was such that we were able to buy window glass only if we could show that we actually needed it for production actually planned. There seemed to be a control la effect that aade It impossible for us to lay up any stores of glass, that resulted in hardships at the tiae. If we wanted to expand our operations we didn't have any stock out of which to expand suddenly. Also it affected our service seriously, the servicing of care in the territory.' As a result of that trouble Sr. ford somehow or other decided to.get into the glass business. Ia did develop a continuous plate glass pouring, aad it was quite a successful thin*. I believe it revolutionized th© glass industry in respect to that kind of ^lass, I think tfa#se other things ea» in the saae way. I don't reaeaber now that 1 had aay 'knowledge as to why Mr. Ford went into the steel: business. 1 know some of us used to think that it would be better; if we stayed out of th© heavy work that required a few aen, and concentrate on those things that required the work of a lot of mm aad a lot of machinery. We thought perhaps we could save aore there than we could in doing soae of the basic work like producing pig Iron where there wasn't so aueh ia the way of labor used and machinery used. I don't reaeaber, if 1 ever knew, what aade Mr. Ford go into the steel business. Most of these new manufacturing operations were the result of a felt need to supply soae ltea for the car. That is why he went into th® lumber business in the Sorth. there was oa© time when there was a great deal of lumber used in the bodies and 1 think be was .95. commencing to have trouble getting enough supplies of the right kin! for that, Mr. Klngsford sold him on the M«& that it would be a good idea, for hi» to get into that business himself in the Horth artd ha j;.?. I think that idea was promoted by Mr. Kinr:sforJ and was foun^ good by Mr. Ford and bis Immediate advisers, 1 think at the tiiae Bill Smith and Mr. Mayo inspected those things, it wasn't too «any years after that :that tits wood went out of the business and titer, the properties in the forth weren't Marly so necessary. 1 think the coal strike la the early twenties would have something to do with the coal mine situation. The railroad strike had a great deal to do with it whan he ms buying the & 1, Co-iJ, of course, was a very central thing for the operations at the Rouge and Highland Park, and there was always the threat of not inviar-; it. He thought if be owned coal tuines and railroads Icu'iin,* to fie coai mines that he wouldn't have that trouble. Sat had a great deal to do with it, as I remember. The rubber situation would be the seaae thing, We furnished information to the Purchasing t^r>-**rtase.at as to our owft cost on our own products. The Purchasing I^p.*rtmerit always had that information in connection with buying. 1 don't believe Mr. Ford attempted to regulate outside prices by what he made himself, or that he went into these things to make then Massif with the idea of regulating or influencing outside prices* He might have done some -96- of it in order to kive oore than one source for a particular type of component tbat bs needed, There vas ulways a question of dourer for having only one source for one component. It WAS aluays better to have two or three because of various thingsj labor trembles, fi• nancial troubles oa tl* part of suppliers, aad things of that kind. AU of th® work concerning the building of a steel plant or such was done either on contract by outside people or it vsa acre on factory work orders, which was an internal construction order. Ml the costs of that were accumulated and cleared into capital accounts, Onee the plant commenced operation, they wre bundled in the re.-ra.kir way and charged to the product. 1 remember ths glass situation. 1 think they vorkod **bout a year after building the plaat before they actually had That was all charged off to an experimentil expense. 1 don't reimnnor whether it was included aad spread over the cost of the product or not. Senerally we did, but not always. la the case of Iron Mountain wm used to include all of th® expenses as cost product up there, and we did that bee tuso Mr. For.- said he lad these things for the benefit of the automobile and the spare parts. He was working always with the idea of producing It is ears and parts better or cheaper or both. Therefore, ve us .*eeountctnta included all expenses in connection with it; either as direct expenses or as overhead expenses. -97- la mmm few cases vhere there wer« protests by local imna.'-^rs that we were packing on too much overhead, Mr. Ford personally took a hand in.it aai said, **!««, it should not be charged overhead.* fhere were sate eases where w® didn't place excessive expenditaores on the rest of the product as overhead, but handled it ia sane my separately on our books; but showed it la our loss and gain statement and tried to handle it always in such a way that we got, it .is » tax reduction, from my standpoint as tax aan, 1 wanted to be sure to get it as a tax reduction. I felt they were always proper tax re• ductions even if they were excessive. .4s long as ttr. ford had the idea that he was doing it with the idea of proBsoting or bettering his operations as a whole, they were proper business expenses. In tbe case where Mr. Ford decided all parts needed for the car could be cut directly froa the preen lumber, that expei'luentul cost would be allocated to the coat of the car as an operating ex• pense, low that particular thing was handled i .n't. raviea^r, ^va the general practice ms to spread it over the operation as :i I lad to meet many arguments as to why some of those thirtia; shouldn't be done. 1 never felt it was aa serious, except ia the minds of the local aan, as soae people thought it was* The Purchasing Sfepartiasat knew that Mr. Ford wanted those things done. If we were asking theja at Iron Mountain and the Purchasing Bepartaeat could purchase a .particular thing at a lower figure, except for this work that vm going on, they wouldn't do it because it wis coning from Iron Mountain anyway* When you know that we purchased out of fl coot about 1.89 of material* and we put into the product through ear own labor about #.20,. it was only the $.20 that was affected by these things. the expenditures wade in these experimental deals were a very ssa.ll proportion, they were large in themselves but they wire re• latively very snail as compared to the total payroll that the Ccwtpaay had. They affected the $.20 but little. 1 never felt from a business standpoint that it really affected the cost ia any great way heeauee you were affecting only one-fifth of the total cost and that one-fifth was affected only to a very slight degree. 1 don't think Mr. Ford was too familiar with details of the financial organisation, but 1 think men like Mr. Kingsford could get very close to hiss, We would probably 'take that exgerimental expense and hold it separately and not spread it over the cost of the product. In the average business corporation in any plan the accounting financial end of it plays a major part ia determining whether or not the plans should go forward. That wasn't true to such a Treat aegr-ie in the Ford Motor Company, lifter Mr. Ford's operations r;;ot very I think many of these planning schemes and finer accounting schemes were in their first stages of development. Trey probably could m put to good use ia a woolen mill, a hook bindery, or & shoe factory, -99- which businesses were well settled, fhe automobile business ia those days was not a well-settled thing. Success depended to soaae extent upon design and distribution end acceptance by the public, wither than upon a lot of fine accounting* 1 think Mr* Ford recognised that and stayed in the field of bold experiment rather than trying to foresee .just what might happen because of:what happened out of history, There was no real history. Be was pioneering and he did pioneer, i think for that reason toe didn't think so much of and didn't follow so mack a lot of practices that were; considered good in other industries, and perhaps today apply- pretty well to the automobile industry. I don't think they .•-.palled in the early days of the autoaobile industry. When it c-ane tu« time that they1 migkt haw applied to the automobile industry, Mr. Ford had perhaps passed his zenith and didn't pick them up. 1 think the pioneer experimental stage of the automobile industry was over in 1930» and the business administrative techniques were beginning to crystallise in a certain direction. I think Mr. Sdsel ford had more- of a concept of business administration, for setting up these finer techniques. 1 think he was much a»re inclined to look at what did happen and us* that to some extent &# a guide as to what he might do. His fatter, of course, was the dominant man in the situation,, and to what extent he was influenced lay Sdsel *s thinking, 1 don't know. I do think tbat Mr. Sdsel ford, coasnencir<£ somewhere with, the Model A, had full bead (he never said so, but I always uaierstooi that) as to styling. 1 think styling connected with tbe KotfeL « BUS pretty much Mr. Edsel Ford's. Ie influenced tbat a very r-;reat deal, if he didn't actually control it. In comparing how much of Mr. Ford's bold experimentalisa ia this period actually succeeded and how auch of it turned out to be rash, I thiak the balance was away in Ms favor, 1 thiak he did achieve the unexpected aad aade it work, Just as he did ia the Clla«s plant. 1 think two ©r three per cent of the $.20 could be charged against experimental work. It really didn't aajouni to very Much. There were other things in the situation that were much more important than that. I think, for instance, that we probably :,;•*, fcoo closely. In Mr. Ford's effort to spread the market he really held down prices. I always felt that he held those prices down too far. he held t«r«;i down to some extent because of competition from General Motors. 1 know that 1 felt that Oenerni Motors didn't set their «i prices, that they waited for'Mr. ford to set his pried and thea they set theirs a littl© higher, aad they still did all right. If we had set ours a little higher they would have ©et theirs & .little higher aad ve both would still have done all right. J don't think tbe question of how much aoney was actually -101- available for expansion would play any .part In these decisions^ be• cause with the exception of one short period of time there "mm always money available to take care of expansion. 1½ referring to the later thirties.; 1 don't think a great deal of attention was paid to that. That argument was settled when he bought out the minority interests. If they decided that they would build a large additional capacity, finances never entered into the planning because thoy Lae it, that is the way I understood it and 1 believe that was so. OB- dottbtedly Sir. fori took account of how much money was in the "teaks* I think his yardstick was, **low much cash do we have on hand?" I believe that Mr. Ford's iwuediate advisers, like Cousins, Klingensaith* Idsel Port, and Craig, did keep him advised through Mr. Liebold as to Just how much cash we had and some idea of what should be on hand for operating capital. As 1 remember, reports were regularly Kid* up as to what our commitments were, both for productive materials and for capital expenditures. Those reports were sent .along so they could be shown, to Mr. Ford if the question arose, una would be available certainly to his advisers when he discussed affairs with them. Whether they were actually placed before him or not, 1 doa't know. They were made up with that idea anyway. 1 don't believe that the question of money «vcr bothered them in any expansion that they wanted to make. Expenditures male were always collected ia clearance accounts, and then on the basis -102- of accountant's examination were classified as either capital or as expense* and charged that way ©a th© hooks* In doing that tax laws had a great influence. So far as capital expenditures vere made, there never was aay desire expressed to force the charging of them off at any accelerated pace. It was always hone on. the basis of life expectancy. Along ia the early- thirties 1 think there were BOS* dif• ferences between our own accountants, who worked for ae, aad our tax advisers as to what rates of depreciation should be used on .. yood many accounts. Of course, once it is called to your attention, n^auaai;, you want to get your expenditures charger! off as early as possible frosi a tax standpoint. The question arose only because these tax advisers thought we Blight increase our depreciation rate*, fhere sever was aay question brought upon that subject so far as Mr. fori or Ms top advisers were concerned. When 1 say tax advisers* ia this particular instance Vm referring to tyhraad, Boss Brothers & Montgomery who were called ia somewhere around 1928 or at a time when same question was raise-'i as to whether or not our tax returns were being nude out to the best advantage under tax laws. Up to that time tax returns lata oeen st-Me out under try direction and they continued to be made out under ry direction but with the advice of ties® people. Lybr&nd, lose Brothers * Montgomery is a nationally known accounting firsi. 1 think they -103- came In at the suggestion of Mr. Bennett or Mr. Sorensen. there was in charge of the local office of Lybrand. loss Brothers & Montgomery a man named FitE43erald who had an acquaintance• ship with:either Mr. .Bennett or Mr. Sorensen. 1 thick really he raised tone Questions and It was his manner of approaching the Ford Motor Company for business, in spite of ethics, to the effect that you are not supposed to solicit business when you are ia that kind of business* 1 •think it was an effort to .get some business that some questions were raised, there were, of course, ojnestlons raised from tine to time and suggestions made as to how Mr. ford aright save a lot of money lb the matter of taxation, those suggestions 1 asver fauna to be any good. there was one particular thing that happened that 1 think brought it. to a head. At the time of the purchase of the minority interests, which was ia 1919, our tax returns were consolidated a* of a certain date, foe Michigan company ran to a certain point and then the Delaware company took over. ft®. Government decided some yeare later, maybe five or six years later, that we had stopped, the Michigan company at the wrong date and therefore started the Delaware company at the wrong date. It resulted in no change ia the total of taxes but it made a big refund for one company and a big payment for toe other company. One balanced out the crtiter* the way the law read at the particular tlwe (2 think Mr. -10U Partindale 'brought it to ay attention) mm tbat if they carried that oat under the laws that stood at that particular tiae, we would aot have to pay aay interest 'whatever on the deficiency, "feat ve would im entitled to interests on the overpayment. That is, one coapany would have aade aa overpayment and would he entitled to interest on the re• fund, the other coapany had a nig deficiency to pay but would not under the Jaws that existed at that tint have to pay any interest on that deficiency, fhe amount involved was a full $1,009,000. After they put the thing through, we decided that we would aake a claim for tills interest. I know ay superiors told ae 1 was crazy because 1 was |ust juggling a technicality her© and 1 didn't have any real basis for getting this interest. I got authority t© sake the claim and I knew from a lejal standpoint that ve vere ripht. I took the aatter up with 1£ashlngtoa and presented a, claim ir* regular order and dealt almost exclusively with the deputy commissioner of Internal Se venae asuaed William Sherwood. I thiak froa the beginning they had recognized th*t In oravr to make some technical changes dowa there because somebody thought was rirht that they had. perhaps aade an error, they realized t\ .*t this $1,000,000 was really coming to us. Billie Sherwood told «e if I ever collected it te would tax it right out of as, because at tl&t tlas he «i writing a lot of legislations for the senate aad the house. We weren't able to collect that $1,000,000 and that $1,000,000 -105- got to be a subject of some comment in financial circles. I remember at a tiae when I baa 'recommended to ay superiors tbat we pise© it into tbe bands of some outside attorneys for actual law suit, about that same time Mr, Gillespie brought tbe question up to our people- in Detroit, and they Introduced ae to Mr. Siliespie somewitere along 1928 or 1989» By that tiae 1 had gotten authority to pass title 0« to lawyers on.a contingent basis. We finally collected the $1,000,000. Tbat raised a ipestion in the .minds of oar top .people as to our tax returns, which were very important. I knew they were very important, but 1 think even up to that tiae our top people hadn't realised how really important they were, how. much money was actually involved. They were being handled by a group inside tbe Company headed by ae and they wanted to cheek oa that. As a result of that tbsy finally got tybraai, Boss Brothers & Montgomery:in to check it all ov«r. fills resulted mainly ia tbe changing of depreciation r:,tes. I don't think It involved any other important change. The stepping up of depreciation rates, of coarse, in itself was aa important tbirt-a I've forgotten now, but I think that I hud the feeling that In tnc u>w; run it would make no difference and didn't mates any difference. Of eourse, it: did have the effect of reducing your taxes earlier instead of later. Once you had 100 per cent depreciation yoa had no aore depreciation. As I remember, outside of seme comparatively minor -106* things that was the only important change they n»de. We knew what we were doing on the tax end pretty well. Ur,: SiH@sple had quite a history in the political and business affairs of this town. He owned or held the interest in what was called a reduction company, which I think was a garbage disposal outfit. He also was ia polities. 1 think he was our police commissioner at one time and he was in the insurance business. Because of his political connections he worked in that fringe of activities where you do things by influence. Somewhere, as he 'was known to he in that area of business, this thing got to his attention. I haw no idea how it got to his attention, le brought it into the Company and he later exercised a considerable influence in connection with our labor situation. Mr. $1,000,000» Be did bring up the subject, and 1 think in bringing up that subject he brought up the whole subject of whether or not these tax things were being handled all right. The collection was actually made by a New fork firm. I think a Mr? Saterlee was one aember of it. iolwae was quite a prasi- neat member. I think Mr. Holmes was killed. He fell off of a sub• way platform in Hew York. I don't know whether that was before or -107- after our ease. One of the other men ia that office handled our case: actively and finally collected it for us. There wasn't any Question about collecting itj we were going to go to court. 1« ay estimation it was just a matter of finally driving these people to see the in• evitable and mate a settlement with us. Randolph Paul was the a-tn of the other man Involved, for years the senior partner of this t.,>- firm put out a book on taxation. I've forgot tea the mm of it ntt-. » They were taxation experts. Financial budgeting wasn't taken into account until Mr. Henry ford II came into control* 1 think it was ay suggestion thai we put into effect a certain type of Budgetary control over expen- ditares and consider all expenditures very carefully before we authorise them. It was considered by a committee including Heary Ford II and Mf. Brleker. I've forgotten who else was involve.1. U. until that 'time, so far as 1 know, finances weren't -token into «JC i--it specially,. although undoubtedly Mr. ford must have had in the hack of his mind something about what his hank account stood at before 1» stepped out onto some of these very large capital expenditures. the' ford Motor Company didn't have a budget prepared for the fiscal year in advance. They had no form of 'budgetary control at all. There was no financial control of any type. The accounting would have' a part to play in the pricing situation. Of course, it was »103« essential tax purposes, bat 1 think because of the fact that it was a one-family company there m* always lots of money, and planaing and budgetary control of any kind had never really gotten to the point where it was considered an essential thing ia these years* It was a question as to whether or not the particular de« velopiseat was a desirable thing, 'Whether it would projsote the business whether it would do something better than was being done prior to that time. If it was considered to be that 1« the opinion of Mr. F^rd advisers and Mr. Ford agreed with thea, why, they went through wife, it Mr, Ford wist have had the actual finances ia a is mint because I raaeaber that Mr, Ford mm time said he would buy Muscle Shoals, and 1,believe he went pretty far la obligating hiss-elf to do it. I don*t reswmber how far he went but he went tone distance in that particular thing, later be canceled Ms offer or else hie offer wasn't accepted. I think he did that because he felt *t the. finm his finances might be jeopardized by golnc into anything as lar,:te as that particular thing was. I think Mr. Ford fin illy cropped the ideu because it was •too risky. 1 don't know what part the securing of aluminum from btux : te ores played in. this picture. I didn't know too much about the vlwruc* deal anyway. I think all I knew about it was that some people were; afraid it was1 .growing Into too large an enterprise. I know towards the end 1 believe that Mr. Ford felt that very strongly himself. Kc -10-?- was very anxious to eyjt out finally. Tfere "as Bo.ar"-»i.ero v* •».-.» ,>ORaS/bI-t nonavai 1-ibtl I ty of money made aa 3TPTretBlon, o;» Ms air»i. Once a project was decider af.-ai I taii>tt 1. cy ^Ta ys ; ? estimated figures fror; the Power and Coostraction De;urtr»-.:«t -».s to wiiut a project voulci coat, if .it vas dec iJe.-d tl-az the pro,;eft \aal.i toe carried out, contracts were let aad t-.ey vere booked aaJ j^.-dt? the entries, It was as simple .ve that 1 ini.jk .-ill praa.cfcp were looked into, as far as Mr. Ford and njs top advisers felt It a* necessary to look into them. Knowing BOIBC of ti*e t^sis for the h}« ones, 1 think that is so. fhey bought the railroad, because of threatened strikes. They bought th© coal mines because of threatened strikes, fhey went into the glass business 'because of <*. short «*,€• of class. They wont into the lumber business up North for the same reason, I rece^ier-. I don't know why they west into the steel sills- I aleay© thought that be could have gotten all he wanted of tfc.it chnapcr th.it; what we wero making it. In fact, 1 think statistics shoved tlal ^.ric^s were lower than our cost. At the same time, la the long run it was a very fine thing for the Company to have the mills because th© time did case i» later years when it was difficult for them to get steel. Whether it would have been different had we depended upon the steel producers down through the years, 1 don't know. -no- As authority for Making payments, tbe Meburseaent ^partfflest either bad an approval from the Power and Constraction Bep&rtment or the Purchasing Department. If it was machinery froa the Machinery division, or if It was productive or nonproductive Materials of the ordinary type, they had a receiving slip plus a purchase order and could verify prices and receipt on that basis. the BiebursMent Bepartment put all these papers together aad entered it on a purchasing record charging it to a certain account. They made out a check which along with all of the vouchers was sent to the Treasurer's division or the Cashier's division where the check was signed. Presumably the asm who had authority to sign the cheeks eould sake whatever investigation they wished, having before thea all of the papers that supported the check. All this work was summarised and turned over to the Auditing Separtaeat which handled th© general books and eatercd it in a summary way in the general books. In a way the head of the Purchasing Bepartaent would coraait the Coapany through the issuance of purchase orders. It urns a fairly effective control. The furehasing Department aade eoaaitaeats only oa the basis of what had been decided to be built during the coming year or season or several months. The Purchasing Department had rules as to how far they might commit themselves. With steel, of course, they had to commit themselves for two or three quarters. fhey were also bound to maintain only a certain inventory -111- condition. , They didn't have authority to mice unlimited purchases. If for any reason they thought that they might benefit "by staking son* terrifically large purchase of copper or cloth* 1 think the de• cision was always aade for thea or it was done if the decision was made after some consultation with the very top people, which probably did Include Mr. Beary Ford. While they had no actual mmrny budgetary figures, they did have certain lines of policy and certain controls as to the number of care that were to be built and inventories as to the amount:of actual spare materials that were on hand and how much more- was'needed during the following, several mouths. Quite a little attention was given to costs of similar things mad* ia our own plant. Certain rules were followed ia respect to some things. It would he decided that regardless of cost and price we were going to make it for one reason or another. others we would mate: fifty per cent and we would buy fifty per cent, or in s«se proportions like that. #e followed certain rules as to what the Purchasing had to buy for ia order to make any real saving. In cases where it was considered whether of not we should continue to make them or discontinue them altogether, we knew if we were making them we would have certain plant Investment oa hand. That investment would have to be continued and depreciation expense would have to be absorbed by the Conpany even if they went on: the outside to buy. Their purchase price k-%d to i , : -112- be lower than our cost less our fixed expenses. If they weren't lower than that 'they weren't gaining any real, benefit and wouldn't go out and buy a* against our making them in the plant. In any event, infor• mation was always available to the Purchasing Department and supplied to the Purchasing Department from our Cost division as to what the costs were as coKparea to the purchase price. there was always quite a lot of discussion about those things. That was always a lively conversation. The Purchasing Department was a very important segment of the Company because, as I said before, the Purchasing Department was responsible for about $.80 out of the ftt total cost. I would say it was true to some extent that the Ford Motor Company was tough on their suppliers, although X wouldn't look u>:>n that in an unfriendly way. 1 wouldn't criticise that as being highly Improper. Maybe there were some instances where some hardships were worked, but I had enough contact with our top Purchasing people to know that we all realized that we couldn't live without suppliers. Suppliers that were insolvent were no ijood to the Company. Yet in Mr. Ford's efforts to hold down the costs it was up to the Purchasing Department to buy just as low as possible. Wat the low figure was, we didn't always know, except in a few instances, Ho attempt was made generally to actually get into th« books or to know the real operating coats of our suppliers. -113- Means used at times vers probably driving mm the pries. I do 'know that there were instances when the Gtmpmny found that their prices were really too low, and they wou'Li give the vendors - hi-.^et" price and make an adjustment in the price. I think it was handled on a real tough business basis. I'm inclined t.o thins: a t. it probably wasn't too bud because I have laid dozens md dorans of supplier representatives tell me that they were very happy tu th^ir association with the Ford Motor Company; that sure, tbe boys wer? tough but when the end of the month cane they knew they wer«* xtoi rig to get their1 money. 1 think it is right that they were tough, but 1 don't mt the idea that; they were tourer than th® other companies that 1 hear about. It is business, fhey were asking our suppliers tv- do aih they could' to ^ keep their costs down, and one way to kmc thc-m (10¾¾ was to keep tbe price as low as possible. fe would make advance payments on our orders, hay only if we felt pretty secure in the situation. The Disbursement Department made many, •, many advance payments on orders ia order to carry a supplier "through. It might very well he tbat the supplier bad actually obligated himself for a lot of materials for our Company. In fast, that always was the basis for doiag it. there was a time when I believe Mr. Diehl, head of the Purchasing; Department, was in a position to get free the s?wk plir.c -llU- used in production If the SSK supplier eould sell to mr dealers the service requirements, fhey were perfectly willing to do that hat Mr. Benry ford himself turned that dowa. He said he didn't want anything froa anybody for nothing. That would have meant a lot of aoney for the ford Motor Company. Mall© 1 didn't actually have part In this thing, it was told to me and I still believe that It was so. I don't kaow what the factors were that led Hr. Mull to leave the Company. I think it might have been difference of opinion between he and Mr. Sorensen as to how the thing should be operated. I don't think I ever knov, 1 remember very neH whea he left. Mr. Leister had never done aay traveling and I think some• time before he left the employ of the Coapany he had been asked to make a trip to Europe. It was customary in those days for the men to make those trips without their wives. Mrs. Leister was a very dominant character in Mr. Leister's life (they were later divorced) aad he wouldn't make that trip without his wife, and didn't aake the trip. I always felt, probably along with other things, that that was the big Influence In his leaving. Be had been asked to do that by soae- body up at the top and he couldn't see Ms way clear to do lb. I think they believed 'because of that that perhaps he couldn't be used Just the way they would like to use hia to the best advantage. I know that Hr. Leister thought that 1 undermined him, but I'm also just as sure as I'm here that I didn't do anything along that -115- line. Mr. Leister and I had differences of opinion on many things, as any two wen night have differences of opiaion. 1 don't think those differences, even though ay superior Mr. Craig knew about them, wer-s of such a.character that they would cause thea to- lay him off. 1 think there were other things, and 1 always felt it was probably his own home situation. At this time Mr. 1. P. Hobart, who had been Service manager for eighteen years, also resigned. 1 don't know what the factor* were that caused his leaving* I think Mr. Bills then took his place. Then M. A. Ryan, the sales manager, was released. I don't Snow what the influences' were 1» those cases. It was Just .* C*«Y. of . wv regime taking over, the new regime being Leaded in -.4 good r^ny w*ye by Mr. Sorensen and maybe Mr. Bennett. 1 think perhaps Bam of those men to some extent had agreed perhaps with Mr. Kansler's Ideas in connection with some of these lines of control. 1 don't think the statement is true that Mr. Ford didn't want any men around that had any of the Model-T mentality because 1 don't think there were any men of that mentality. 1 think their mentality was anything else but that. These were all strong characters| Mr. Biehl, Mr. Kansler, Mr. Byan, and Mr. Sorensen. Somebody had to be boss. Somebody had to lead, and I think it got to the place where Mr. Henry Ford had to select who would stay out of a group and who couldn't get along together. 1 think it resulted ia this sort erf a -116- reorganization. 1 think that was really so, rather than representing any real reflection on the ability of sorae of those men. I don't know how the decision to change from the Model f to the Model A cans about. 1 don't know today ami 1 don't think 1 ever knew, I thing from every side there was information coming to Mr. Ford's attention that people thought that -i change ou> mde. Just where he switched over and why, 1 don't know. Of course, Mr. Ford did do a great deal of personal Investigation. i*e urove il i over the country, fe stopped at this little dealer's and chut, little dealer's place arid asked questions or made observations. Par!taps thut had a lot to do with his asking the change. He hid u. lot more in t.v- vay of personal Investigation and personal observing of vJe.it was goi.t," on than a lot of people realised. Mr. Ford may not have known a lot of history, but Mr. ford was a very, very smart man in my estimation. When Mr. Ford was out, he wasn't thinking about golf; he was thinking about car business. I don't know that the changeover from the Model f to the Model A took so long under the circumstances. It was the first eftwtvs? that had been wade and; therefore was such more difficult than any later change. It represented a complete turning, over of the facilities and that would E«ke it take a long time. Legal advice is certainly a very essential thing to lav* around th* office of a business concern. It porlvps to he wore -117- Important as the Company grew older and learn*. 1 think the reason for abolishing the tmml Department waa thai some people in the Company, and maybe Mr. Ford, felt there was too much channeled through the legal division, and that the decisions weren't really business decisions hut:they were decisions of the Lagal department bused oa legal ©pinion or fro* a legalistic :*n#le. 1 think that was really the whole reason. I think it was so that all major things were channeled througn the Legal Department, breause people that were handling them •saw certain legal angles to it sad wanted to be assured by the L«« .1 Department that they were oa the right track* It might very «alx Uxw been that a lot of these people based their own final, decisions tr, do or not to do a thing oa the law Department's opinion rather t<* \: take the responsibility themselves. I'm quite sure there w-as *, feel in;: on the part of Mr. Ford that there was too much of the legal Department's influence, that they Influenced the business procedure entirely too far, and it was discontinued 'because of that reason, Mr. Longley established Ms office downtown. I think it was understood that legal affairs would be referred to him in town and that was actually done, there were a few men that Mr. Longley didn't choose: to take with him. One of them was transferred to ny department;, teat was Mr. Edgar Mats. One of them was transferred to the Purchasing .Department. Be is still there and now part of tbe •116- Legal Bepartaant again. Ie was transferred to tbe PurcUisia:r. Department where they continued to do legal work, but presuKbbly only those thlr.'S of a minor .nature, rather than handling any complicated problems that re-quired big investigations. Hr, ford mated decisions to 'be free of restrictions. 1 think it was about the sane tins that Mr. Leister left that oar outside auditing staff waa cut in two. there wasn't very auch change aade in ay iaaedlate division, which never was a very large division, at mmm point a very drastic .reduction vas aade in the total clerical force that occupied tbe third floor of the Bo«gs office building, the third floor was completely vacated vith the exception of the part that I occupied, fhey allowed ae to stay there because I did have the top records of the Coapany .And 1 needed a vault. The only vuult available vas the one vc b~d. To coapeasate for the space that 1 occupied, space of similar proportions: was vacated on tbe second floorj so that one floor was completely done away with. 1 don't reaesnher that ay Iaaedlate force wee reduced at all, because 1 had comparatively tm people and 1 could show that they were really necessary and they were doing actual work on either the Coapaay's top statewmts or tax returns.. There was a tiae when the outside auditing, staff, which was really an Internal auditing staff, was asked to be cut in half. 1 did so,. of course. -119- » « f:li« Reminiscences of M JR. E E R M k If L. HOEKLI mum 11 Ford Motor Company Archives Oral History Section March, 1955 the Manufacturing Accounting ©apartment was cut down a great deal 4 I think that Might have been toe tiae when we instituted the scheme of'weighing requisitions rather than pricing them all, fhis matter of weighing requisitions took place after Mr* Carnegie died, fo some extent the work was decentralized. Some of the work that had been done ia the office building was shoved back to the timekeeper's office and to chief clerks at the little factories. Sorae of it was: cut out. I think certain short cuts were made 1» 'the Purchasing department in.the matter of keeping records of quotations and the mtter of: follow-up work on receiving of Materials, and some short cuts were Bade by* finding ways to use &m record, instead of almost a duplicate record. Maybe they didn't have exactly the same infor• mation but they found -ways of consolidating. I don't remember all of the details. We tried very hard to cover toe business of the Company. I tried especially to protect the cost end of it and to protect the basic records .needed to make proper and acceptable tax returns* there was a good deal of moving out of the building at that time. I went in charge of the auditing Department ,1ust a few days before we all moved to the Bou«e, which was the same date that the Model A came into effect. 1 believe that Mr. Leister arranged for toe office apace and all that sort of thing at the Rouge, and then 1 moved into it. Mm did not come along. 1 think that was -120- January 1» 1936, I became tsead auditor und I hid as .my assistant Mr. Martiaiale. The force was about the same as It bad been up to that time. Mr. Carnegie waa still head of Manufacturing Ac conn tin'-. 1 didn't realize that say duties bad charted e-rpeeiull/, I Knew .all of Mr. Leister's work as well as ray own. 1 merely took on the work where he left off. 1 didn't have to ask fat* to pace oa my decisional that's about all. I doa't reaesfeer that ths office force suffered any de• preciation by the note from Highland fark to th* Rouge. 1 think we aoved and brought the whole force along with the exception of Mr, Leister. I thiak this represented a revision of the organlz-atio*; in order to give complete and unquestioned control to one or two new assistants, vho were then Mr, Sorensen aad I think Mr* Sennet*. during the period of time between 1919 and 19S8, the managers of the separate foreign companies almost without exception reported -to the Ford Motor Coapany in Detroit directly. They were handled, generally Just the came m 14« United States branches vere handled. The people here in charge of assembling and people her** i\ charge of service advised the European companies in respect to those matters. The Auditing Department here and its auditors supervised the accounting of the local or foreign companies. That applied .is well t© the branches ia South America* which »9« never during that time separately Incorporated, maybe with one exception which wm Brazil. -121- They were handled ia all respect* Just as the American branches were handled, The auditor, being familiar with financial procedure and financial matters, seemed to be a conwenient wan to use ia exercising effective control in same areas. Also it was done to some extent because certain auditors spent nearly all of their time In Europe and were readily available for meetings and organisational waiters. I think following Mr. Anderson's leaving England his place was taken by Mr. Gould, then I believe Mr. tarringtoa, who had been an American manager, was seat to Europe with offices in Paris, and be did act a* sort of a zone representative. t*m not quite sure of that. I'm not sure whether he also acted as manager of one of the companies over there at the sane time as he did a certain amount of eupervisioa over the entire continent or not. It sees® t© me that another ma followed him and Ji. i »oa*. the same idling; a former manager of CopenV»twn wbo o'^ao- ti - "*icos at Berlin and later at Cologne, Germany. His name was Mr. George Carlson. It seems to me that he succeeded Mr. Harrington, and they did do a certain amount of supervising of all of the operations over there. 1 don't believe the auditors assumed certain controls. Actually auditors never were really effective managers of the operations over there. They acted only as auditors and did certain specific -122- things under orders from Detroit; whereas, if I remember correctly, Mr. Harrington and later Mr. Carlson acted as sort of general rep• resentatives and exercised a sort of general control, working always under the advice of the Detroit offices. He had a Foreign Sales Department, which at that tim was under the charge of Mr. Robergc. ife supervised all foreign '^rxnco sales work. 5bese ma reported to soae extent to bin but the o;>2r,tU;nfi were so important and so much called to the attention of oar to-., ma.fo• ment that it was pretty much of an arrangement by which Mr. P.oi>jr;r- worked closely with Mr. Edsel Ford, Mr. Sorensen, and these men over there. It was one of the operations which I think received the close attention of the very top offleals like Mr. Sorensen and Mr. Edsel Ford. Mr. Georra' Brubaker was a brotner-in-law of ffonry Pora's and he ms in tbe picture quite prominently in the days -.-ben th: Bouge plant was built and for some little time thereafter. I be• lieve Mr. Brubaker was an accountant and his activities related ho la- financial end and to the accounting end more than it did to tbe hro-ide** operations of assembly or manufacturing or sales. I think I'm right on that. 'There was the thought to erect a plant la England to have the same relations to the Continental companies as the Bouge had to the American branches, ftmt was tfei idea as I understood it. ftie idea was that England, being closer to the Continental companies, -123«. could better supply then, aii perhaps could do so store cheaply than the American Company which was so fay away. They thought they could build up an English Manufacturing plant under local supervision and in close co-operation with the Continental companies, sod do a better job then could be done here from America. that didn't work out because of the quota laws established during the following few years by the various Continental countries, and also it didn't work out because it turned out that England far one reason or another wasn't able tc- produce as cheaply as the American Company could produce. So many of these countries could ouy cheaper actually from the American Company than they could from the English Company. the reorganization in 1908, I think, was on the recommendation of Mr. Percival Perry, who by that time had "been taken back into the organisation following a visit by Mr. arid Mrs. Ford to England. 1 think the plan for the reorganisation was one proposed by Sir Percival Perry to Mr. ford and had back of it- the thought that the Ford product would be more acceptable to the public in the various countries if there was a local ownership interest, especially if the companies could he formed and have on the boards of the various companies, prominent, local businessmen or men in public life. fo some of us It was naturally a surprise to find Sir Percival back with Mr. Ford and we wondered why that happened. As near as X -124- can remember, some of the mam who were over there and who learned southing about what was going on, determined that Lady Ferry, who had been friendly in the old days with Mrs. Henry ford, got ia tows.li with Mrs- .Henry Ford while Mr. and Mrs. ford were ia London. She told Mrs. ford her side of the story or Sir Perelval's aids of the story and convinced Mrs. ford that an iaJustice had been done to Sir Perelval ferry, ftet story was taken to Mr. ienry ford, who apparently agreed that an injustice had been close. Sir Perelval Perry wanted to return to the ford Motor Company and waa restored to the »aagemeat of the Ford Motor Company. At this time he came up with «* plan t© supercede the eld Ford Motor Company of Inglaad, Ltd. with a new public company. It is* ay understanding that this idea originated with Sir Perelval Perry. t remember both the prospectus and the statement* showing the assets of the European companies, bat I don't believe 1 had very much to do with it. I may have at the time checked them with our own copies of financial statements from several companies. I think 1 probably would do that naturally. The prospectus, if I remember correctly, somewhere or other was cheeked by Mr* C. B. Loagley who was thea the Company's general attorney. If my recollection is correct, somewhere la this reorganisation Mr. Loagley made a trip to England to discuss matters with the local attorneys over there. I see by the notes that the thought that the stores 'be ao'id for one pound each mm expressed over here a» against the suggestion by Sir Jesfelval ferry that they be sold st a prealua. I think that instance **eepllfies Hr. Beary Ford's attitude towards banker*. They did not want manipulation of this so that profits accrued to bank In-: syndicates rather than to individual investors. They probably dion1'. recognise that probably the individual investors would have iiamedi^t*»i.y turned thea over to the aarket, which 1 thiak is probably vtut happened. These shares weat up in price immediately to something like double their Issuance price. That was determined here in tbe United States and 1 rei«8tfl»r something about it. I do know that it waa the feeling of the Ford family that if there was anything to the idea that the ford Motor Cospraiy wale r»t a benefit: of having, the .participation of local investors, then the local investors should get whatever benefit goes with the purchase of aa. interest in the Coapany, rather than soma way or another a certain amount be siphoned off by banking syndicates. It was Mr. Ford's philosophy that a saall investor should be the one who woull be allowed to buy the stock and that waa one of the reasons they set it at each a low price. In Sovetsber of 192S lord Perry bad suggested to Mr. Sdsel Ford that the branch of tee, Ilggiasoa Corporation subscribe to 0,500,000 of the total 28,000,000 shares of stock and then sell it to the public at preaiums. Mr. Idsel Fowl very sharply disagreed with that and said it should go to the English small investor r-ther thaw to the Lee, Higglnson Corporation for a premium which they would make an immediate profit oa. That is an excellent indication of Mr. Ford*s interest in the small investor as opposed to banking syndicates. The whole philosophy behind this idea of a public company was to allow participation la all of the European companies by local people. So far as 1 know, the tax aspect of the situation bad no special influence on the aatter at that time. It was a matter of finding better methods of distribution. I*m only assuming that the local attorneys, accountants, and advisers did take taxation Into account, but I don't know that tbat was so. Sometime later I doubted it because it seemed that the dividends paid by these Continental companies would be subject to English tax, and the major part of them would eventually be transferred to the American company where they would again be subject to taxes by the American Government or by the Iritish Government at the time of distribution, fhat resulted la the making of a holding company in one of the European countries for this stock. It was later set up under the laws of Luxembourg. That was an operation done solely for tax purposes. This reorganization of the European companies represented a change In the supervision of these companies. So far as operations were concerned, it started out by the European companies reporting altogether to the English organization. 1 believe there were no more -127- visit* made' by the ordinary traveling auditor, the ordinary man dealing with sales and service or with assembly. 1 believe the only trips made were by soae of the top executives and p«rlmp« by some specialists: at one tine or another for the purpose of advising thai as to new Ideas that had been developed her© in America. ;I believe there was sons liaison setup by which certain people from European or English companies would, be sent to the Waited States in order to pick up new ideas. The whole idea seemed to be one by which the European and English companies were absolutely detached from American supervision 4«et as the Canadian Company was operating entirely separate fross the American Company. As holders of fifty-one per cent of the stock is this Ford Motor Company of England, ltd,, the Ford people in this country "would still have a certain interest in the operation of that corporation. They had, of course, ultimate control through England, bat I believe the idea was that Sir Percival Perry should have exclusive control -nd not be "bothered by the auditors or by ordinary traveling representatives, 1 believe somewbere along the lime we were asked to haw our auditors make cheeks in Europe. 1 believe Mr. Byrne and one or two other men (Brlggs who is presently treasurer of Ford f-otor Covey-.ny and Mr. Moffet who was traveling auditor then) continued to mike tri .»3 to Europe to do a certain amount of auditing work. Copies of th« report were seat to England as well as to us. 1 remember that 1 -128- myself made eight or ten tripe to Europe, usually for some special purpose, aoroetliaas alone ana sometimes in company vith somebody else. I remember one time making a trip with Mr. Vioel and one with Mr. toagley. Some of the trips were made in connection with the purchase of the plants at Strasbourg, Prance by Mr. Bollfus from Mr. Mathis. One of my first trips was made la company with Mr. Craig to Engl^-an and to the Continent, just as a general viewing of all of the operations to see how things seemed to be going to us and to report back to Edsel Ford. One trip was made when there was some consideration being given to the purchase of an automobile plant ia Belgium. I forget its name now. Another trip was made In connection with the possibility of making Volkswagens in Germany, this trip I cede with Mr. Wlbel at the request of the representative of Hitler's government through Prince Ferdinand. We looked over sone Ideas and talked vith ohem about soaa ldea» for the manufacture of a small German car which was to be known as the Volkswagen. The ideas that they had seemed to both Mr. Wibel and me completely Impractical from the standpoint of any private mam** facturer, It simply wasn't possible to produce in Quantities or on the cost such as they desired* There were no provisions made for subsidising the operation. -1¾- Hotfaiag actually eaae froa it. fhey were anxious to get ft tranendoiis number of ears oat to all of the people real quickly. As I inter• preted the thing soae years later* it was Merely a swine of getting out a treaei&dous attentat of aato»ohll« equipment which would he used la the war that eaae a little later, that is the way it seeaed to ae although nothing like that was said. When we aade these trips* it vas ^ust a general survey of operations* It involved talking to division heads and visiting a certain nunher of dealers * going over their suataarles of sale© and getting .the feel of the situation so to speak. We got as well a© we could the idea of whether or not things vere operating along the general lines that they were supposed to he operating under tbe irr.m-e- aents aade by Lord terry and ir. ford fi«r«* It mm not aa audit in any sense of the word. It was just a survey. The plaat at Luxembourg was set up purely as a stock propo• sition and purely for tax purposes, that still left effective control of all English coapanlee aad all luropean companies in Lord Perry's hands. All of the stock in the holding coapany wis owned by the Ford Mate Coapany of England. Lord Perry %m» to have a free hand within the policies m they might be laid down froa tiae to tiae by Mr, Scary few! or iir» Idsel Pord Or Sorensen for thea. The rest of the organisation mm kept out of the picture pretty »11« Ford Motor Coapany here -130- owned fifty-one per cent, which represented really actual, ultimate control ia the situation; and at no tins was there evmr the desire by Mr. Ford to give away hi© own complete control over these things. While he wight and did m% up an organisation over there for Mr. Perry's control and supervision, that did not mean that Mr. Ford himself couldn't step .to as the majority stockholder anytime he saw fit to make sowe changes. That is what he would do fro* tlw to tiro. 1 never could understand bow Mr. Ford, with his attitude towards stockholders, acceded to the suggestion that there be a public company; 1 .never knew why, 1 think, of course, there was at that time because of high taxes, some difficulty in selling a regular For.J. product, especially in England, not so much on the Continent. Ihul was bothering Mr. Ford, to some extent, and then apparently be believed statements made that Ford was discriminated against over there because it was Amsricaa. That belief was fostered by Sir Percival Perry aad later by Mr. Dollfus. I never myself believed that was so. 1 believed anything American really had an edge over anything European, so far as mass production automobiles were concerned, Nevertheless, Jh-. For:- was convinced of that and 1 believe he believed from wh it these «w reported to him that the business as a whole would go along better if it was partly owned locally. When lord Perry organised the French Company, one of the men whom he approached was Mr. Dollfus who at that time was a banker -131- and perhaps has teen intimate to name extent with stock market operations. I believ© he- had be«s» interested in mm stock market operation*w Mr. Perry took Mr. Oollfus into the orgaaiaation ferth e purpose of organizing the French Company. Mr. Bollfus "became quite a strong figure in the picture, le ms rather a strong appearing figure and a convincing talker, tte made direct contact with Mr. Ford here in tae United States. Finally he set himself up to having a really big influence, and really got Mr* Ford's agreement to operate independent to soae ex• tent of Mr. Ferry** supervision. Mr. Berry and he- could simply not get along together, so I believe some arrangements were actually made by which the American Company took over actual direct control of the French Company and took responsibility for tbe French Company's operations, Mr. Sollfus had made certain propositions to which Mr. Perry wouldn't agree, but which seemed to Mr. Ford to be proper, and the result was that Mr. Pollfus not from under control of Mr. Ferry in that way. I think the circumstances mainly were: It was a question of finding manufacturing facilities in France and finding a French name for the Ford ear in France. Mr. Uolhfus then developed the Idea of associating with some other French company. Whether Mr. M&thie approached bim or whether be approached Mr. Mathis, I don't know, but Mr. Dollfus developed the idea of as association with the Mathis S/A, -132- a manufacturer of automobile© at Strasbourg. 1 don't think Perry objected to this because it was taking away from the English market, because 1 believe at that time franee had passed certain quota laws which mde it impossible to bring com• pleted materials from England in any event. It was mostly directed to points that he didn't believe the deal for the Mathis Company was really a sound one. There was some additional investment made iw kbe French Company directly by the United States 1 believe, with the consent of the English Company, so that control was established legally by the American Company.. I'm not altogether awe of that. I'm sure some loans were made by the American Company in the form of merchandise or equipment sent to France. I believe Patford might have beta then withdrawn from tbe Luxembourg Holding Company. 1 think that was the way it was handled, and payment for it was made direct to England. I'm not quite sure of that. But certainly, whether done inside the corporate structure or outside the corporate structure there was the time for all practical purposes when control waa exercised from America iu respect to the operations of France. I went over on this deal to arrange with Mathis and Dollfus to make the consolidation, 1 really ought to remember the terms of this ia great detail! but 2 don't. I would have to refer yow to -133- .records on that* I remember going over to Strasbourg m& looking over the plants. 1 remaster waking some reports to America oa it. I wasn't sent over to pass upon the desirability -.-i the amalgamation. I remember being told very definitely bj »•*. COJV..3*» J that 1 wasn't:sent over -to do that, but 1 was sent over to *t,\c i% ..vk and not to pass upon the desirability of the association. Tat fa»t already been decided upon. My ,}ob was to look it over Mid sec? that it worked satisfactorily and to see that the legal end of it was set up to the best advantage possible for all concerned. 1 did ssostly a cheeking job, The corporation actually was sat up 'by Mr. Bollfus and his legal adviser, a French attorney, who® 1 believe was also a member of the French House of Deputies at the time. 1 believe his name was Mr. Berg«re. 1 had engaged at the time Paris representatives of aa American accounting firm. I thiak they were the local office of Lyorand, Boss Brothers & Montgomery- They helped m look over the documents and. the situation ia general sad see that it was lined up pretty well along the ideas under which the whole arrangement was supposed to be made. I, of course, wasn't familiar with the French language, nor was 'I familiar with local customs that had to be followed in connection with a thing like that, I wasn't sent over 'to pass upon the desirability of the -13*- organization, feat ay Mea at tiie time was aad always Ms "been that tbe Ford Motor Company didn't need a French name. Tbat was one of the big. selling points of Mr. Bollfus, that the business should have a French mm rather than the name Fori.. It «s my own idea then, and 1 have never changed it, that a French naae detracted froa Ford operations rather than added to it. Also it vould have been mush batter for the Pord Motor Coapany if ve had developed our own munuf.icturln.;* organization over there, although that might have t ikeu a little luii~.er. We did, by associating ourselves with Kr. Mathis* orfp.nl •.uvr-iou, acquire immediately a Kanufaeturlnr plant -ind tb/» personu'-:! that operate®. It. I felt at the tiae that could have been done just as well by the Ford Motor Company and uaybe could have been done better, because we certainly had to modernise the plant after we got into it. froa ay observation, of the plant at that tiae, the manu- facturing techniques aad standards were not anywhere up to the ford methods. It was necessary aot oaly to modernize the plant but to modernise the thinking of the operators. That was aot in my department at that time. 1 den*t recall just how that was toadied. Of course$ by that time various representatives of the departments of the American Coapany were seat over. 1 don't know now who they vere. 1 do know that a great deal of assistance mm given to thea in the handling of it. Mr. ©ollftts., of eourse, was not a mechanic either. He mm a banker. 135- The German Company always continued under the English Company, except, of course, Germany prohibited imports altogether except on a barter basis. Germany also needed capital sad it seems to me that the American Company helped by certain barter arrangements. They sent us certain materials and we in turn seat them rubber which was a thing that they were very badly ia need of. 1 believe we sent them quite a lot of machinery. How we were paid, whether we carried that as accounts receivable, or whether we got some stock, I don't remember now? but there was considerable activity along that line with the German CoRpway. 1 believe generally they continued to report to England. We did have, by reason of helping Germany, a considerable greater interest in that and a considerable greater decree of super!vision than we did over Copenhagen or Barcelona, Spaia. It all arose oat of the needs of the Company* Germany also needed a Manufacturing plant because of the laws against Importing any materials. That is what led to the Cologne plant. •I- don't remember whether in 1930, when the Cologne plant was started, that Germany bad already passed their import quotas of prohibiting foreign trade. I don't remember whether Cologne was intended t©' be established as anytiag more than an Assembly plant. It seems to me that was just to be aa Attsentoly plant, but 1 *n not quite stare of that. Come the more stringent laws, it was aade into 13$- a Manufacturing plant. After Hitler took over in 1.)33, they had an embargo oa capital being sent to foreign countries. I don't, remember that we ever got any money out of there unless it was for material that we actually sent in, material that they needed aad wanted and for which funds were provided through governmental authorisation. 1 don't believe aay dividends ever came out of Germany. I believe when the German Company waa organised^ there sere no laws against exporting of dividends and no laws against the ex• portation of materials, because I remember that individuals in the United States bought shares in the German Company aad they certainly wouldn't have bought share® la the German Company if they had known at the time that they couldn't get the dividends. I think It is rivht to say that it wasn't until after 1933 that these strong nationalistic programs were put into effect. fhere was some discussion of purchasing another plant in another town in Germany, but 1 believe that deal never went through. Of course, we did have a Berlin showroom, but 1 think the only plant of any importance tbat we ever had was the one at Cologne. It started out to make - passenger cars as well as trucks, but somewhere along the line its business was limited to the making of trucks. I don't re• member where that c«me in. I don't remember whether they were per• mitted to make passenger cars up to the time of the war In *39 or not. -13?" 1 think following the entrance of the United State© into the war we had no contact, practically speaking, with Germany, hfter the German invasion of franee, we had practically no contact with the French iplants. A few hits of information leaked once in awhile through some neutral spots. I myself made a visit to Franee and Germany ia about .July of 1939» 'Which was thirty days 'before the war started. 1 remember going through, bomb shelters in Francej they were protecting themselves against Oeraaay. 1 remember going to Germany, and the boys over there took me througp the bomb shelters then:, which they had to .«roteet themselves against tbe French. Then later I went to lagland where J found out: they had not only bomb shelters there, but decont-.*aiav.tl3n units and all that sort of thing. It gave me ratter a queer sensation. Going over there, from here and seeing that, -plus the Hindenburg Xdne which J passed over at two or three points going to Switzerland and to Germany, it seemed to me that there was a fight just around the comer. 1 told that to some of our people when 1 got back, but the idea still prevailed hare in the United States that thers wouldn't be any war. Me simply lost contact with everything so far as our books were concerned* and simply remained status $ao. There was somewhere in the period! of tile war where tax laws permitted th® deduction as ex• pense of investments that had been lost in war in foreign countries. -133- 1 believe Ford Motor Company at that time did write off soae of its investments. I've forgotten which ones and to what extent, but it does seem to ae that Germany was written off aad Japao was written off. We certainly want over that thin;.; very carefully aad. took advantage of that lav to the extent that we thought it mis desirable. The companies in South America were controlled Just as Ohilad States branches were controlled, except they vorked altogether throuai our Foreign Sales apartment under the charge of Mr. Roberge. She Irasili&a Company was organised separately heeause of its peculiar tax laws which attempted to tax the home operations (in our case, the American operations) of any American company that hid branches ia Brazil. 1 believe one or two of the other countries had laws sou• thing lite that, hut we were able by some action to allocate capital Instead of' organising local companies. 1 think It- vap necessary only in Mexico for these local companies to be totally owned aad controlled by the cititams of t«h« country in which they were organize!. I believe Mexico hah sue* s. law, and 1 believe we worked through attorneys down there und perh.^s our local manager, lie did have a separate company ia Mexico quit* early aad I don't remember why ve did that* There was soaks local law, because as a policy 1 believe we worked through branches rather than local corporations where it was legally possible to .'So so. Companies such as that in Egypt were all handled from £u*land -139- after the English reorganisation of \$®8* That included Portugal, Spain, Norway, Denmark, Sweden, and Egypt, which I believe took the place of the Turkish Company. We pulled out of Turkey altogether after considerable trouble there. We believed that the countries that Turkey had been serving could just as well b# served from Egypt. The Gerwaft Coapany had a subsidiary in iomaala which reported to Germany. The companies except Germany and. Prance were pretty gener• ally supervised right fro* England* In 1930 the Sales Department lowered the discount to dealers to eeveateen and a half per cent. The reason why ford Motor Company decided they would change their discounts for the Fori Motor Company dealers, was a combination of Mr. Ford's desire to keep prices low and the ford Motor Company's rather low earning. Also, as I recti! it, there were some stories of rather high profits which dealers seemed to be able to make on the discounts that tod been offered to them. I remember distinctly some of those stories were supposed to have influenced Mr. Ford quite a good deal, tim foundation for it was: Mr. Ford's Idea of holding down prices, thinking he could gain greater markets and thereby change the trend ef low profits that the ford Motor Company was making. I rewember Mr. Rockelman's leaving, but whether it had to do with his disagreement that that was a good plan or not, I don't know. If I remember correctly, I believe the Sales Bepartssent's -1*0- executives at that tiae felt the discount was very much too lot?. It might have been that Mr. Rockelraan was too persistent in his protest against thea*and that Mr. Ford felt he was trying to sake it not work instead of trying to make it work. I don't recall really tie details of the controversy or the discussion that took place. Mr. Davis and Claude Meliee followed Mr. Koekelman as joint sales aanagers. 1 think there was so much change in management in Sales because Mr. Ford felt it moat be the fault of the Sa3f>« Tte jyrstfent that there was so much trouble with the ear; it was not n ll?r<<, a.o making as much money m it had la previous years. Ix wan .- in i<1tu and Mr. Borensen1 s idea about certui;- operations of t' e S-J.es Depart .v**-*t. Mr. Hawkins and Mr. Ryin up to t:-e tiia? of vr. Rook--lnv-.r, • been the only sales managers. There were probably a few in the very early period. Mr. Rockelman bad been up to that time in charge of the D.T. & I. frier to that time he bad been superintendent at one of the branches. He had been a manager of the Buffalo branch, I think, but I'm not sure. He really wasn't a sales executive, t liked Mr. Rockelman very well, but be knew nothing about the sales problems really. Mr. Rockelman left at the time these discounts ware changed. Whether controversy about them directly led to his leaving or not, I don't know. Then Mr. Belles and Mr. fiavis were put la charge as a team. -1*1- That followed aa attempt to rationalise this deal by which Mr. Soranseu aad Mr. Martin were sort of ia charge of oar operation* as a team. Why have two m»a in charge? there was aa attempt to establish a principle there that there should be a teem In charge of certain lines of operations, rather than a head and an assistant. In my estimation Mr. Sorensen always was the senior partner in the situation. There was aa attempt to justify the setup by saying thet it was a team and not a top and an assistant. Mr. Relies and Mr. Bavin were put in charge at that par• ticular tiae. Mr. Davis was the man who knew all about the sales operations.' Mr. Belles knew nothing at all about them, having been engaged solely in the Purchasing division. Be was a very competent man, I think, but he knew nothing about the sales end of it. Of course, that didn't work finally. There was a division of authority, which meant that nobody had any authority and there ma bickering and com• plaints about the situation. So that was changed over. It seems to ae there was a certain attempt aade at that time to use tills team thing even in soae aspects of branch irun^geir-ent. I think there was some attempt aade to use that ia the Auditing Department because I think I rather defended myself on the situation. I believe there was some Idea possibly of bringing somebody in, and I said that I bad a team; that ma Mr. Martlndale aad myself. That was so. I think we worked as close together as a team as any two men -142- could work. 1 believe at that tine that they were actually thlakiitn of bringing in another auditor, There was a good deal of talk about tilings like that at that time. Then Mr. Cowling was brought in. I believe perhaps be had been running the B.T. & I. -He was the traffic manager at the same time. Ho was experienced in traffic work, and he ag-ie Lac aa ayxj~ iflcations to handle sales work, he W.AS a verj rood public .~>o.ikcr and could aake wonderful talks and that sort of thing, but he still didn't know anything about sales. .411 this time the sales work was really being held together by Davis, Then Mr. Cowling was let go and 1 believe at that time Mr. Davie was put in charge* He remained ia charge for a time. Baring that time Mr. Bennett w*s taking a very active ;ra~s in a lot of these activities of the Company — a leading part in » great many of them. He was Interfering with sales in one way or another. He was intervening la the sales practice and policy of the Company-. Mr. Bavis was sent out to the Weat Coast as a result of a rather violent dispute with Mr. Bennett on some natter* of policy. Mr. Bennett prevailed and Mr. Bavls was sent out to the West Coast in charge of one of the western divisions. I believe it w&s Richmond. Then Mr. Boss was brought in and Mr. Boss, of course, did know sales policies* He had been a branch manager for many years. -11*3- V® all felt that he was quite a good waa. J believe ae lost out finally because be tried to be right vitb Barry Benaett aad be also tried to be right with everybody else. Be Just was riding a fence and he fell off. Then there was set up a peculiar system of district sales managers, That was a, system set up under some agreement between Mr. Sorensen aad Mr. Bennett with the consent of Mr. Ford. The setup was that we really didn't need a sales manager* that all we needed me somebody whom .the districts could report to; aad they reported to Mr. Sorensen or Mr. Benaett or both of them in conventions from time to time or perhaps singly as they might be called is. That didn't work because you simply lave to have SQB» kind of central control for an operation of that kind. It was finally superseded after Mr. Henry ford II took charge and he brought Mr. Duvis back. It was before Mr. Bennett aid left, aad I had groat fears that it wouldn't work because I vnsn't Burn what Mr. Bennett's influence continued to "be at that time. It wis still pretty high at that time but I think 1¾% Benry ford II had got the consent of his grandfather tbat he vould be allowed to manage tbe place, aad 'that was one of tbe things he did, which 1 think, vas a very excellent move. 1 can't tell you any of the initial difficulties thut tb«vy had getting the ?-S Into production other than a great deal of casting -1¼%. difficulty in easting the V-8 blocks. Thtt io the thiu;; that st-ande out in my mind. Other than that 1 lave no recollection of the sitj- ation. That was a large expense and, as 1 remember, it was written off as experimental expense. 1 don't remember that we accumulated any of that particular expense. We did accumulate at one or two periods of the Company some experimental expenses and wrote them off over a short period of time. I don't believe that was oae of tbe things that we accumulated. 1 don't believe I can tell you anything about tbe conditio ,s that led up to the financial crisis in the spring of 1933» 1 didn't have say conneetiott with the banking group. t remember in 1932 when Henry Ford found it necessary to give SOUK? assistance to the Guardiui Detroit aoup by loaan.--. thr Ford Motor Company's credit, a 13,500,¾¾ loin froa r, -¾ Ford Motor Company itself. 1 handled some of the mechao.it :>" >:.hv but 1 lad no knowledge of the background of it ot«.er i.ha./< th., -K*»» of the banks for. ready capital. I don't recall tbat aay of the Ford Motor Company people were asked to investigate the situation at the basks. 1 don't know whether or not Mr. Liebold was very active ia this. The only thing I remember about bongley and Mr. Kanzler going to Washington to see if they couldn't get a loan from the WC, and ttr. Couzens as senator opposing his loan, is what I read in rhc -1*5- newspapers :an4 what 1 heard* 1 heard that Mr. Couzeae sail he wouil expose something or other and would stoat it froa the house tops la ease any loa»!was aade to the Detroit hanking group. 1 think in the Company itself they were hard pressed far cash during this period to wet their payroll, that is, while the banks were closed. 1 think the Company was able to handle this situation quite satisfactorily by accumulating cash from the sale of its product asd waking necessary payment of wages in cash out of that fund so accumulated. 1 don't remember that they relied upon outside banks that.were not affected by this banking holiday to assist thea. I believe there were some dealings with outside banks not affected by the thing for a time, but I fea't remember the extent of it, nor do I remember the banks that were involved. the only part of the hanking picture is which I baa a part came a little bit later when trustees were named for the Guardian group. There was a certain over-all committee and then a subcommittee to liquidate certain portions, and I was on one of the committee* that had to do with the National Bank of CaasBerce. I was on a committee, sort of a board of directors. I've forgotten what the group «as actually called. We were called a board of directors, which included Mr. Charles f. Fisher, the' treasurer of General Motors at that time, myself, and two or three others. The actual liquidation was carried on by u man that U<1 -1*6- been with tbe Government Banking Department, Mr. Torn J&ur Schmiede. 1 believe he vas for a time on ths board at Packard after he left this. Mr. tut Sebmlede acted as a liquidator of all th« ;.«»et6 of th -.% company; that is, acted as a collactor for debts outa-fcsndln;., sntfcl?- meat of accounts against the Company, liquidator uf lis assrts, .And settlement of the entire proposition. All of Ms deals vere subject to the approval of this com• mittee of which t ma a member. We met weekly.,, as I remember, or perhaps more frequently aad weat over the xeoommemdatloae as made by this gentleman, aad approved or disapproved* the committee didn't do very attach disapproving and yet sow. 1 thiak we handled it aa a business board of directors generally mould. As a matter of fact, I thiak we considered the liquidator a vary, very capable sua on*- thoroughly f-miliar with banking work In which ha had iWi a lot of experience. Be did a very fine Job of It. 1 think he later, towards the close of the liquidation, took owr the finishing up of the liquidation of the First national Bank as well. I believe he aotu&ily sat over the liquidation of both banks la the final stages. I wasn't called before the Senate Banking Investigation Committee that came to Detroit. I had nothing whatever to do with that phase of it. It all related to prior banking operations, aad 1 was not involved la any of it. In reference to industry coles under HE* I -%ppointod „5 a representative of the Ford Motor Company along with a wisher of Mr. €« B.l^ngley's fins. I've forgotten now whether that man was Mr. Henry Bogle or whether it was Mr. W. 1. Middleton, 1 'believe it was one or the other. Me met with representatives of other auto• mobile companies, and 1 believe parte manufacturers as well, in the General Motors Building. I think our office* were in the board room or some meeting room of General Motors Caapaay. We drafted the auto• mobile code at that place over a period of some weeks. I believe it was Mr. Sdsel Ford who designated me for this assignment from the Company, 1 don't remember that he had any ideas as to what this automobile code should he. 1 remeiaber we were worrte \ about control, We wanted to be as free as possible of controls. '1:-.-.,1, was about the only concern that 1 can remeaber at this tine. I -think none of us knew enough about the law to form any advanced opinions of the situation. In my ©pinion, Mr* Brown, who was vice-president of General Motes in charge of finance, took the lead in preparing this code. I don't remember his first name. So far m I observed, he took, the lead in the situation which he naturally would, perhaps as chairman of the committee* Whether there was back of It any guiding band, 1 don't think I know now, if I ever knew. We started from scratch at the first meeting, if I remeaber right. There jwere some basic things that everyone felt would 'he -1½- Quickly agreed upon. I wasn't expected to take Issue with tbe philosophy of the legislation. It was s aatter of drafting a code in line with the legislation as hast we could aad seeing that se conformed to the letter of the law and the spirit of the law because as 1 remember now, the law didn't require the actual entering into of the agreement or actual signing of any code that might be formulated. I think mostly the other man aad myself representing Ford Motor Company tried only to see that the code didn't include a lot of things that to us did not seem to be intended by the law. 1 don't remember what these things were except that they related to control not compelled by law and would be undesirable to Mr. Ford, m all knew that Mr. Ford wasted to haws a free hand in his own business. 1 don't remember that Mr. Ford objected to any one thing more strongly than another. During this time 1 did not deal with Mr* Henry Ford at all. The conversations that t had were all with Mr. Sdsel ford. I don't remember that we bad too many conferences about It, 1 can merely remember that wo did spend considerable time working this out and finally developing something which, after talk• ing it over with Mr. Sdsel Ford aad Mr. Craig, we met with Mr. lenry Ford and some of the other men and explained what we had done and why we had done it. 1 think the two of us felt It was the bast kind of agreement that could come out of that law. 1 remember that we reeomsmated it to Mr. Benry ford. tfe believed that it vat a thing that fori Koto* Company could properly eater, although we tew at the aaae time that it represented a certain amount of control. We recommended it to Mr. fori. Be didn't, of course, approve it. 'Be thought it ©war several days and decided not to approve it. My recollection was that Mr. Bdsel ford wee willing to go along with:tiie ©ode a® It was written up. It wag really the senior Mr. Ford who aade the ultimate decision against joining the automotive code. It' was altogether based on the matter of costrol. He felt it would he giving away the control of his own business that properly should be left with him. I beard later on from pretty good authority tint his firm). talk •with any masher of the organisation was with Mr. Loiurley bimself right here la' this residence, and that Mr. i*ongleys listening to Mr. Ford's ideas on the thing and knowing what he did on the other side, recommended to Mr. Ford that feeling as he did he should not sign t*u code. Mr. Ford the next day made the decision not to sign It. 1 don't know whether the Archives has that story or not. I might not have that accurately, but 1 remember that. How I learned it, I'm not able to tell you, but 1 know I was satisfied ia my own, mind at the time that that was the final thing that happened. It was Mr. I^ngley'si conversation with Mr. Pari that aade the final decision. -150- I think b® was the last nan that My. Ford, consulted with prior to hie leaking th® .decision. I couldn't tell you anything about General Hugh Johnson coming out to Dearborn to speak to Mr. Ford. 1 didn't have any »*rt in that conference. I think that Mr. Eds©! ford and we men who worked on the code, although we realized the control feature of it, felt that the Government was taking a heavy hand in business. 1 believe there WAS a certain amount of Government business involved in all of this situation. Our own situation was rather low. lie either wore- making n.- money or very little nosey at the time. Some of us felt t-t»t by noin,- along with the situation we probably would be able to get -.Jovorament. business which ve otherwise would not get. 2 think that was in tits picture to some extent. Refusing to sign the BRa code would eliminate the Ford Motor Company's opportunities to do business with the Government * @n® of the thing* that Mr. Ford was afraid of was that he saw the code as a means of opening the way to unionisation. It was prior to the time of the unionisation of his own shops. I think Mr. Ford didn't object so much to following a law as it seemed to he written at that time. I think we did follow the law in practically all respects Just as closely as we could. Be didn't want his hands tied in such a way that perhaps by some interpretation he would b* «151- compelled to do things vhleh he hadn't thought were in the lav at the time he agreed to a code. As I remember it, we stayed away from that hearing ia 1933, and 1 think ve did so deliberately* The suggestion by General Johnson that theTord Motor Corns .\\ be boycotted if it didn't approve the code simply proved to Mr. Ford that somebody was trying to control bia, and It made hia more deter• mined than ever sot to be a part of it* As I remember it, at the same time he went along with all the rules and regulations and naturally followed them for the period of the time the law was in effect. One of the things that Mr. Ford objected to was the absolute necessity under the code for the employer to approve of collective bargaining within the shop. I didn't have any conversations with Mr. Ford ia respect to these things, but as 1 remember that was correct. I don't remesher that the labor problem entered into Mr. Ford's picture at that time, except that the labor orobleir was prsser-t. the am situation implied certain consols thar, might uCf>eh Hr. Fork's situation. I don't remember tbat there was anything special that came? up in connection with that, and if it did I didn't fcnov about it. I believe Mr. ne&nett was Mr. Ford's adviser in relation to labor problems at,, this time. 1 don't know very much about Mr. Bennett' background and how he came to get into the Company. I've heard stories of eourse, that Mr, Bennett met Mr. Ford first in lew fork, Mr. Bennett having been a sailor in the united States fcvy up to that time. Just -1¾- bow be met .Ma, 1 doa't kaow, I've heart stories about it, tut I don't remember the stories now. The Ford Motor Coapany always did bate a Plaat Protection service aad Mr. Bennett became a aestber of that ia eon© way. At the time Mr. ford:warn building at the Bouge plant he installed Mr. Bennett as the head of that service at the Bouge, instead of placing it tinder •the man who 'had previously been bead of that sort of thing at Highland Park, whose name., If 1 reoember, wee Kelly. Mr. fori seemed to lite Mr. Benaett and, of course, is a comparatively short tiae he became one of Ma strongest and most Important lieutenants. 1 didn't knov too much about Ma. Ife knea* he mas a strong aan in Mr. Ford's operations. 1 really don't knov why Mr. Ford found Bennett ae useful to him. Mr. Bennett either then had or developed an ability to sate a lot of friends amou.' eortate types of politicians, among Italian leaders of * certain type. Hr. Beaaett was an athletic aaa. Ie vas a 'boxer of some mete in amateur circles. S© seemed to be quit© fearless. I think thou* things appealed to Mr. Ford ae being perhaps something that he could use in accomplisb- lag some of the things that he wsmtad accomplished. After ail, I f ink the organisation and the operations vere so big that Mr. fort didn't have time to explain a lot of things that he wealed accomplished, and he wanted somebody to do that. Mr. Beaaett was o>» of the rcfntha t could and would do certain things without undue delay and ur-azMsnt. •153- 1 have no clear recollection of when Hr. Bennett's stren.it' began to show in the organization. It seemed to be built ur> -ilon*:: vi th the building of the Rouge plant. 1 think th© first tiae that I got a knowledge: of Ms true strength was one tiae when Charlie H&rtner had assigned the M#la,»d Fark nan Kelly to investigate aoas of th® ac• tivities at the Rouge plant which seemed to Mr. aartner to be irregular. 1¾® result of that.was, Mr. Kelly found himself tramping on the toes of Mr. Bennett and was discharged. As I understood, it, that led to Mr. Bartner'e resignation because he had assigned Mr. Kelly to do that particular 30b, and he felt that if anybody was to he discharged for it, it should he Mr. Hartner. I think, that »s the first tine that I became aware of Mr. Bennett** real 'power and strength. 1 don't remember what the date of that happening was. i don't think it was a case of choosing between the two men (Bennett and nartner). Mr. Hartner was an operating man, one of* Mr. F. B* Martin** superintendents, and under Ms supervision was Mr. Kelly. I don't think necessarily Mr. ford was choosing between Mr. Bennett and Mr. lartner. fie just felt that something should be done and Mr. Sartaer was not necessarily at fault. I cart remember Mr. Martin tried to persuade Mr, 3artner from resigning hut Mr. IUriner said no, that he wouldn't he able to stand for that sort of thin>r, m he left. By 193^ and 1933 Mr, Bennett had a fairly weU-establisned position of Authority within the Ceapaay, It was generally unders-tonl that be wis the industrial relations nan for the Company. 1 didn'i- see the "ftanger March* at the loagij at all. 1 .had no connection with the operation of hiring these 5*000 veterans of the First World liar who had m previous experience with the Ford Motor Company. I remember it having been done. 1 don't think 1 had any knowledge of why it was done. 1 always thought and I still think: that Mr. fori was trying to show ir* sow way or other that be had no feeling against workmen generally or the Government in its legitimate place, and he was trying to showfey som e such means as this "that be was willing to co-operate with what seemed to be tee necessities of the situation. Of course, necessities were finding work for a lot, Of people. I don't think he necessarily thought he was discriminating against his own .-sen.; that is, men who had been on the roll for a long time, by taking on the war veterans. I think it was a matter of public relations with Vr. For?). He felt that as the American Legion was a very prominent and strong group, he- could better overcome the result of Ms not signing the HM code through some co-operation with it. I think Mr. Ford also felt that out ©f his experience witfc the Ford trade School that he would be able to teach a lot of men trades or some activity or part of trades, so that they might he able to make a living for themselves. -155- I knew labor agitation was &olnj on within tbe plant bat I had no contact with it. I had no part in the operation* of handling the problem, this problem would generally be handled through Mr. Bennett. I think Mr. Ford newer thought that unions would he a good thing in the plant. 1 think he thought they would attempt control aad attempt practices of one kind or another that would Interfere wi :Ji his handling the property and interfere with production. 1 think ala of this was dons in an attempt to stop unionir-r.tiou. I think his points were pretty well proven later, because 1 think roost of his theories were justified later in the way that unions did interfere with operations. I never felt that Mr. Ford, mm aati»uaion 1« anything that I could ever see of the situation, or that 1 ever heard of hia say;u , that is, ant i-union In itself. He feared the type of leaders hi,? fchtt the unions would get in such a situation. Mr. Ford never lost his feeling of good will towards the workmen, this was just » step that he thought la the end would benefit them. 1 think be thought he was protecting the workman just m much as he waa protesting, himself. When later the men voted as t© whether or not they wanted unions and voted overwhelmingly that they wanted unions, Mr. Ford leaned over backwards to give them everything and more than they had asked for. -155» I didn't see any of tbe "Battle of the Overpass" in 193T- I couldn't tell yoa how it developed, flier® was a point in those negotiations with Boner Martin where 1 was asked to sit on a ne• gotiating committee. This was done at the request of Mr* Idsel fori. I sat in those meetings two or three different times. J sensed very tuiekly that 1 wouldn't have aueh of a part In the situation. The real negotiations in connection with, tiie matter were being handled outside of tiie formal negotiation. I felt t>iut I Uvi been. j,srd;uv-»-? or allowed to be assigned there just a© a sort of a device to satisfy Mr. Sdsel ford In soae way. 1 thin* Mr. Sdsel ford wasn't too happy about the way sorae of the negotiations were going, I can't tell you exactly when this took place, except I think it was After 1937 or just prior to the tiae that the union contract was signed. I don't believe Horaer Martin was representing the although I'm aot I think the committer ©a which I sat was the ©ae that ne• gotiated the very first contract. Oa this committee there were some people acting for Mr. Beaaett. Mr. Bennett was there too. I don't recall no*;at all who those people were. I ems the only one from tte Financial section or from Mr. Sdsel Ford's office so far as 1 can recall. 1 attended only two or three meetings. They were quite informal. So minutes were taken. I really think I as forced on them ia some way. The meetings had been going on before 1 was appointed to the committee. I kaow I was asked whether or not I wished minutes -15?- to be taken. I told then I had no Idea of clanging the procedure of the committee. So far as I vaa concerned, if they had been taking minutes all right, and if they hadn't omen taking minutes, all rigfet too. I didn't feel that 1 had very much authority in the situation, and I didn't have, as a matter of fact. The really important dealings were held somewhere else be• tween Mr. Bennett and one or two of the very high union people; and theme committee meetings were, I felt, to a very large extent a rubber* stamp affair.. I disliked responsibility without authority. After two or three of such sessions 1 was able to excuee myself and say 1 would be ready upon call and* of course, I was never called. I think I explained this to Idsel Ford. These meetings were held on the ground floor of the Rouge offices. The way I remeaber It, it was from this committee that the first contract came. I don't recall any contention between the Company »»§ the labor union, such as the closed shop. 1 bad no part in th© dealings concerning them. 1 think probably I knew about them, and that was all. I think Mr. Gillespie was. .part of the negotiations 'too. I didn't have enough to do with it to really remember it. J think 1 had a general knowledge of the situation because of the position 1 had in the Company, and then 1 was asked to sit is on this committee, lad I continued 1 might have known a lot of the details, hut since X -156- didn't continue ©a It I knew nothing. Bottling mm mm public out of the meetings. '. I believe Mr. MmX fori felt there was a efeage going oa that the Company ought to follow, whereas Mr. Henry ford thought- ao ehange should be mm. 1 think we «11 felt the filing, which ms a fact, that the unionisation would be forced by the Oorernment In power away beyond th© actual reouiremeats of law. In other words, as far as you.eould see, there was supposed to be ao compulsion on employers in connections with the matters of unionisation. If the unions could show that: they had something really to offer, -yes, but not otherwise. Such things a* sit-down strikes aai destruction of property we a thing; allowed to be continued by the Government to power at the .particular time, and la our particular locality It was the Oovemment represented by Severnor Murphy. Mhen we bad the strike and our plant was taken over by employees for. a time, Governor Murphy refused to allow bis police to clear the plant. fte&Uy, the men took over the plant and forced the situation on us with the help of the 6overa»nt* 1 thiak tbat was very clearly outside the letter of the law. Mr. ford, Mr. Sdsel ford, and all of us- resented that very, very much. They were compulsive feature© outside of the actual Jaw, tbe enforcement and imposition of a philosophy upon people by responsible Sovafwaent officials that hadn't b«eh by law provided for at all. «159- 1 always carried the idea that Mr. lenry Ford and Mr. Sdsel Ford had the interest of the workmen generally at heart, which didn't mean that they thought men should do as they please; they ought to he subject to some discipline and they ought to work the hours expected of thea and work diligently during that tiro. Outside of tliat, 1 always had the idea that they were very, very much interested ia their workmen. 1 think Mr. Idsel Ford never felt kindly towards Mr. Bennett's manner of carrying out the orders of Mr. lenry Ford. I think while Mr. Edsel Ford never said too much about it in my presence, he did say enough and we did have enough conversation about those things to make me feel quite sure that he didn't agree at all with many of the procedures:-as they were handled by Mr, Bennett. I have heard that lugas was brought into the Company to sort of keep a check on Bennett's activities, and I think he was brought in at Mr. Edsel Ford's suggestions. I don't know whether Mr. Bvgas at the time knew that. I think he was brought in through Mr. Bennett and as one of Mr. Bennett's man. X didn't exactly get the idea that he was brought in to cheek Mr. Bennett's actions. I think I had more or lees the idea that he was brought in because of his knowledge of the behavior of human 'beings because of his police experience, and that he would be a capable assistant in the handling of our labor relations. I think it was Mr. Bttgas* previous FBI work that brought him into the picture. -l6o- 'There were apiareatly in these labor group* a lot of or• ganizations; that were' organising or working against the Interest of the Fori Motor Company. 1 think Kr. Sagas was a man who would be able to haw those situations ferreted out and corrected. I think Bennett used his authority within tbe Ford Motor Company to favor rather undesirable elements throughout tiie sbatss, -••^ he used his power in iaay instances to arxunge dealership* for acquaintances who claimed they had lone something for Ford. 1 dos*t think Sdsel Ford approved of this at all. I often thought that Mr. Benry Ford didn't realise fully the Implication of those situations. That gets into the realm of vhor? 2 start to pass Judgment upon the activities of a man who was really my superior at the time, although 1 didn't report to him. I always assumed that he V>AS work In; directly for Hr. Henry Ford and he had aoiae kind of over-all permission to do this. 1 always felt that Mr. Henry Ford didn't exactly understand the implication of all that Mr. Bennett did. That seemed to me to be so, because once in a while some situation would turn up that clearly in ay estimation was wrong, which would le cleaned up %-hen it really got to Mr. Henry Ford's attention. low auch of it Mr. Henry Fori really knew about, 1 don't knew, but he certainly supported Mr. Benaett generally aad.seemed to support him as against Mr. Idsel Ford. 1 think this placed Edsel Ford in a peculiar position through- -161- out this period. Hr. Edsel Ford assumed the presidency of the Company as quite a young man and without the experience of bard knocks that Benry Ford, Sr. had heen through. 1 think Mr. Sdsel Ford was a very fine son who reeogalsted a thing that was absolutely true, &nd that was that Mr. Benry Ford, Sr. built this Company from the bottom and sade it a very, very great thing, and he was willing to defer to him at all times, regardless as to what the title situatioa might be. While some of the things he didn't like and wouldn't approve, nevertheless if they were things that Ms father wanted, as far as he was concerned he went along with them* I never heard him at any tlae ia any bitter way denounce anything that •seemed to have been ordered by his father. I think I always heard that if that was the way his father wteted it, that was the way we would have to work it out; and we would find a way to work it out ia the proper mnner. If this caused any bitterness on the part of Edsel Ford it wasn't evident bo those of us around him. He felt that he would not do some of these things the satae way, but we sever thought that any of those things made him respect his father any less. At some point around the change in the Auditing Department, in 1933 Mr* lesser, who had been Mr. Leister's assistant, was trans• ferred to the West Coast, hut altogether of his own request because he had a son. whose health was very bad and he wanted to take him oat there and live out there because of the difference ia climate. -168- There was once or twice through those situations where we were sates* to reduce our auditing force; I man the tmwliag auditors who were actually making the.audits. Wfcether a change was wade at that particular time or not, I don't knew. I think the depression years brought about a gradual shrinkage in the Auditing Ifepsrtaeut in the «arly thirties. I'm talking about the trawling audi tors as we called them* Sven though they may not have gone out of the building they were still doing auditing work as distinguished from the general force which was in the Auditing Department taking care of tax records and general hooks and employment records relating to branches* That force- was a atiaiwaa force in any- event* I think owe or twice when there were general reductions made, I was asked to take off one or two men just to show that every department had done something* There weren't any changes la my immediate department ia the thirties. We did from time to time wake seme changes in the Manufacturing Cost Deparlasent. 1 remssftwr ia respect to subsidiary aamufaetwfiag plants, we brought into tie sain office a good deal of cost work that they had been doing; hut we were able to do it with less ssea because of the- summary records that they had prepared in respect to production art labor. We could d© it cheaper because If they did it, we had to supply them wit* certain general information at the branches; whereas if they sent la their summary records, we could avoid that operation of sending;out information to thea. 1 think a good deal of central• ization took place at that tine In those accounting records. 1 •believe during those days too certain changes were aade ia the Purchasing division in respect to follow-up work and a manner of handling specifications and so on in an effort to shorten up those operations as much as possible. I know those things were done but i don't reaeaber exactly when, nor io 1 reaeaber all of the details of Just bow the adjustments were aade. these were economy measures. 1 think economy 'was the motivating factor, but also it. was ia line with what we had been working on all the time, and that was the avoid1¾¾ of duplicating records. In a general way as new federal or state laws went into effect, weiset up -sections to handle thea. We never had an over-all section for the handling of Government laws except the auditing Department to which these laws were referred. Under services that we had at the time the bills, as they were going through the legislature, were being studied by us. Affected departments would be consulted. Where desirable we would present our views through representatives to legislative eosadttees. fben the Auditing Bepartwent would send out Instructions to the various divisions as to what they would have to do in order to abide with the laws as they were finally passed. 1 don't remember in detail how the Social Security law was -16V handled, I think in respect to tbat particular law accounting In• struction* Or instructions casing froa tbe Awaiting ©apartment were sent to tbe various branches and to the various payroll divisions aad the central factory at Detroit. Summaries had to be made up and re• ported to Us ia Detroit, and 1 believe we actually made the payments to the Government of all taxes in connection with it. All puyaeate were made through central office aad they were and* direct Jy thro*-::, our department. 1 think the payroll office would send the mm aad his accumulated benefits to the Auditing Department. I'm not ^nlte sor- . It could have been done better by the local division in order to avoid a duplication of the work. It mas a matter of sumaariziag figures and making payments. We handled it through our Bouge offices. I don't think all of the details were brought into the Auditing Bepartment. Mr. A. 1« Wibel at the beginning of Government contract aegotiations was designated as the top Ford contact ma with the Government. 1 think he came to me for information on the day that that happened, when te was asked by Mr. Henry Pord to be that contact man. lie came to me and told se about it and .'±skad for suggestions-. I told him that I thought he ought to tie himself up with some man that bad a very good knowledge of accounting and a lawyer, and keep them in on every bit of it so they could advise proper con• tracts or review contracts that might be presented by the Oovernment, .165- and also so that we in the Company could properly supply information for the Governmental operations. VI th that he elected me to be that man, and from1, that time on I was part of the government contract work. Mr. Wlbel and 1 spent a great deal of time at Wright Field and .in Washington in connection wit* these contracts. Mr. 8enry Bogle from Mr. longley''s office worted with as oa the Fratt & Whitney eon- traet. 1 think at the same time he was working oa th© Packard contract for the loH8**loyce. He helped us oat with the legal angles of the first contracts, ant 'he and I together did a great deal of work oa those contracts. 1 think In the very early contracts certain preliminary discussions tod taken place, but in the very first contracts ve wen? in on them. That didn't mean that there wasn't a lot of conversation taking place at the time between, our operating people, particularly Mr. Sorensen on ths physical tide of it. 1 was in on them pretty early in the discussions, and I think Mr. Mitel was to oa thea in. the beginning on nearly «11 of them. Often the Ford Motor Company would agree to build aotaethha', and long before a contract had been signed they would go ahea-1 and commit funds for this. That was a thing that I fought just m hard as I could because 1 felt that was tbe wrong way to Ao it. From an operational standpoint, both, froa the side of the Government aai our people who had been ejommltted by that time to assist the Soimrnaent, -166- it was a desire to get production going and take ear© of records, if and when they could get to them, Mith ay knowledge of the lack of knowledge production men have of com»i%Bent» they might make, especially in Government con• tracts, I always fought awfully hard to get letters of intent as early as possible, and not to do anything unless they had letters of ince.n, and especially to find out what *»eys had beeu appropriated for the particular job. Then 1 tried to set up records at our plant to be sure that;we didn't exceed those appropriations. Once you exceed them it was rather difficult to get additional appropriations in case the deal fell through in some way or other. It was s difficult thing to handle. However, we probably were pretty well able to satisfy hot*, ends of it. Our operation people satisfied the Government production people who wanted things fast. Me were able on th* record side of it to keep close enough behind it so nobody got into actual •trouble. There were Questions from time to time but they were always cleared up. These were mostly cost plus fixed fee contracts. I don't remember whether we got into fixed price later or not, We did get to the point where 1 we* satisfied that we could do some of the business on a fixed price basis, which was what the Government really wanted. This was after we bad had some experience with some of the contracts, aircraft engine contracts and so on. «16?- By that tiae Mr, Hibel bad left and I organised a Contract Department which I believe was placed la charge of Mr. Soberge. Export sales almost disappeared, aad Mr. Roberge was a good executive type and m placed the thing in Ms hands. there was a time when we were in a position to mate fixed price contracts. Our records were good enough aad our experience was good enough that 1 was guite satisfied that we could do so, and Mr, Sdsel ford with th® consent of his father authorised us to go ahead on that basis. Bight now I don't remeaber whether we got over on that basis or whether by that time the war had sloughed off and the contracts changed so we :never went over, the record keeping was very, very greatly expanded. !>!e had to make a .great ©any changes ia our record system ia order to satisfy Government auditors. Those frequent clashes indicated that they were not satlsifed with the kind, of records we kept. One time there was quite a clash because we had not completely separated the bomber operations from the other operations. In order to satisfy all parties we set up a whole record systen at the Bomber plant for the bomber operations. Then we had, some dispute with the Government about our amaner of overhead distribution. Considerable discussion came about on that particular subject. We made stony changes in order to satisfy the Government. There were certain methods that we followed to produce -168- certain results which the Government didn't particularly agree with. They insisted that we use another method, which we did, and it re• sulted is a very much higher overhead distribution to the (kwernment work than under our own system. When they found out that was happening, they suddenly de• cided the kind of division we had made was correct, which we always thought was so ia the first place. We only weat over to their manner of making these allocations upon their insistence. I've forgotten now whether we settled on their basis or oar basis. Mr. tfurtlnual* would know because ha was pretty much a central figure in that over• head distribution, fhere were two or three switches back aad forfeit which worked .really to the Government's disadvantage following the procedure that they advocated. I think Government checkers finally, especially if they were allowed to work with us for any length of time, worked very well with us and were quite satisfied with tee records we had, as they were modified to meet the needs of the Government. We didn't have the vast subdivision of accounts that they wen; accustomed to see in/ in otter large manufacturing concerns. We didn't use them for manager!uL purposes and therefore didn't wake them, but we did have very accurate cost. When these men were able to really cheek the thing oat, they were pretty well satisfied. I feel now that what 1 believed in the situation then was -169- correct, 'because out of about $6,000,000,000 of contracts, ve acta illy collected about $4,000,000,000. When I left tbe work, there vas About $30,000,000 that remained uncollected unci most of the :130,000,30:; -,.s not In. dispute. It was merely »0« .parts of some of this contract! that had remained unpaid, that were In dispute, and none clearances had not been effected. I think finally some lump settlement «us adfle 1:: respect to at least sows of tbe things, I think oa the whole our records stood up pretty well. There WHS quite a lot of discussion <..-ue* criticism of our records, a great deal of which vas not villi!. When the Government come to the Ford Motor Company and said they would like the Company to raake Pratt & Whitney enrlnoc, tmn the production men would go to Pratt & Whitney. 1 would p-et into tnts even before that, although these things were handled pretty much si«ltaneottsly. Immediately Mr. Wibel and I and some of the people working with us would start on a contract side of it. In the early days we didn't have much in the v,:.y of Government forms to start out with. I think our Como-itsy vis re• sponsible for the creation of many of the provisions that later appaoreu in the standard Government contract. Se would contact the particular division that was involved, and their contract aen and omt contract men would meet aad thresh out different provisions of tbe contract. She- matter of fixed fee was usually left to Mr. Wibel aad myself, tout the contract provisions themselves were argued out bftv^en -170- myself or s*»»body for me and the Soverwot .people, There were a very great many fuestloas. Occasionally we would have to go to Washington la irespect to that. At different tines I Know Mr. Mitel and 1 wet with Undersecretary Cleveland, and them there was another man who was a lawyer from- Baltimore who was with the War Department. They helped us out ia th© more difficult matters. Still later, somewhere in the picture we had to go to Sr. Patterson, Secretary of Mar, in connection with sorae questions. -\s I remember, those questions related to depreciation allowances. It- was a very important question, and strangely enough the mm who was handling it for the Government and was opposing Mr. Vibel and I vis Mr. Browning, who later became our Purchasing agent, and hie .Assistant was Mr. Duffy, who I believe is our purchasing agent now. Mr. Patterson gave us what we wanted at that time. The things were ironed, out 1 think th* Magnesium plant was one owned by the Defense Flant Corporation. 1 believe it was a Government plant, but was operated by Ford. We dealt with a mssber of people, for instance, Mr. Snyder who later was Secretary of the Treasury. The. first plant that we built at Government expense was the Aircraft plant. That was not a Etefense Plant building. It was some way or other Government owned, outside of the Defense Plant plan. -171- Maybe It became a part of tbe- Defense Plant operations later, but 1 1 don't believe it was at the beginning. We bad a lot of complicated talk about 'that because we wanted to be in a position at the ead of the war to ask them to take that building away or to sell it to us. According to the contract they were obliged either to sell it to us or to take it away. 1 don't think any of us actually felt that the (kmsrnmsnt would take it away, I believe tbe Ford Motor Company bought the plant after the war, although It had sway drawbacks for auto production purposes. 1 tUink the negotiating of manufacturing rights was done altogether by the Sovernmsnt. The government would assure us that they would make available to us the right, to manufacture tbe product to which these other corporations held patents or ri-hts of SOCK? kind or other. We had: no part ia that end of it. I' don't know to what extent I was involved in the negotiations for the B«Sk contract. I was fully familiar with tbe eituatiss, 1 think we started out as a subcontractor. It wasn't a satisfactory arrangement. We finally became a prime contractor. I think I was actually involved in the negotiations that took place in. respect to it. I always felt that setu? was dictated by a desire of the administration not to have a direct contract with a concern that was to some extent in disfavor with the administration. There were no practical reasons for it. Every practical reason dictated that the -172- contract should be made directly with us. The Consolidated Aircraft Corporation, which held 'the patents, were located on the West Coast, Outside of .giving us a start in lie matter, they couldn't help us. Our operations and consultations would have to 1» pretty much direct to the Government after we got going. 1 felt sure at the time that the Qomrmmt merely vested to avoid at the outset to give direct contracts to the Ford Motor Company. •ftoera were contract renegotiations, but the only thing they knocked down was the total over-all fixed, fee that was paid to the FMC. I don't 'believe we had any fixed price contracts. I think I myself finally arrived at the decision with the Government on the supercharger contract and arranged for six per cent fixed fee vith titw people at Wright Field. I think that fee was knocked down ioter or . total amount of it was reduced. The fee was fixcci on the Lis is ot an estimated cost, and then whatever the cost may have turned out to be, the fixed fee remained at six per cent of the original estimated cost. If there were any fixed price contracts, then they rei^resented conversions of the aircraft engine and the 1-2¾ contract. I believe we were prepared to go through with fixed price contracts. Our ss&nu- faeturisg operations had gone along enough and our experience showed to jay satisfaction that we could do it if the Government wanted It done, but I.don't believe we actually got into that. I believe we aade and sold a lot of trucks ass jeeps to the -173- Government at fixed prices * fhey probably entered iato the new re• negotiation picture later. We didn't make to© won on our Government contracts. We vere able very greatly to reduce costs on aircraft engines and tbe bombers. I think our records for the reduction, of costs ia aircraft engines were better than that of aay other producer of aircraft engines, .as 1 remember it, according to the Government's own statistics. We would have the fixed fee for all of these things baaed oa aa estimated cost in each instaac®. It was arrived at ia tbat way. There were always saw people who would say, "Well, you didn't have a fixed fee contract. You still have the cost plus the percentage,'* but it wasn't so. I think these cost estimates were adjusted from time to time. We would be handed aa order for the production of a certain, number of units at a certain fixed fee and before those units were produced, we would negotiate for a new order continuing that production, and based oa the experience w© had up to tbat time, fix a new fee. Of eourse, the Government was continually trying to buy at the lowest possible fee, so these contracts really wouldn't get settled finally and signed finally until the operations were a long ways on. Then efforts were made to have us reduce our fixed fee to what cost later turned out to be. It was a rather sharp purchasing, practice In my estimation because in that way we w»ren*t compensated as we should -IT1*- have been for the lot of grief that went with the earlier development of the product* However, it was always our thought that Mr. fori, never wanted to mate® very much money out of the Government contracts. It was felt that he thought he would fee asking, money out of war find Mr. Ford had no stomach for making profits out of war* a* we could under• stand it. 1 don't think Mr. Ford cared what the fixed fee on these things would he. 1 think we in the operating side, especially me, cared a very great deal, because the Company 1». those days wasn't making a great deal of money and we felt the necessity for the Company being able to maintain itself on some respectable basis. I don't think Mr. Ford interested himself a very great deal ia those things. % had no part ia the physical operation of Willow Bun, which some tagged. 'Illl-it-Run." The beginning of that operation was a most difficult thing. When we entered into the B>2k contract, we supposed that somewhere there was 1» existence a very goot set of specifications and blueprints which could be takes, and put into effect and a plane built. That turned out to be absolutely wrong. We seat out many men 1» the Long Beach operations of the Consolidated Aircraft Company where they had to build up blueprints from mock-ups of one kind or another which existed out there, A lot of the design and working procedure was Just in the minds of people and not set up clearly. Then there was a period of very rapid dewelop- -175- meat in the bomber, BO that all of tbat together soae it terriflcall,? difficult to set up m operation here. It vas also necessary to set up operations here to produce them on a large scale so that the assembling manufacturing facilities bad to be entirely different froa those that were in existence at that time on the West Coast, Our own people had no experience in the building of a.ireraft. It was something entirely new, and it was a very difficult thiifc: to get going. Things didn't coae out the way the people bad thought tae;- would for a time, That set up a lot of resentment on the airt of i v> Government* 1 think the Government vas as much to blame in this as the me was or if aot to blame, they were responsible in that they didn't foresee many of these difficulties. Tbe operations at Willow Sun also were ia etar-2 of a Mr. Boscoe Smith, who had been in charge of some hraneh manufacturing operation but didn't have a specially wide experience. He had, of course, as his advisers Mr. Sorensen and others from the plant. 1 think that our people finally decided that maybe someone with wider experience would do better as an actual over-all ©ana^er, and Mr. Brieker was then placed in charge of the Willow Ban operations. Mr. Brieker up to that time had wiven all of Ms atl^ntiou to th' aircraft engine contract, which also presenter greut diffictiltiec bi«. not nearly so much as the Bomber plant. After Mr, Brieker got out there, he reorganized to soma -176- extent sad1got an agreement out of the Government to freeze certain units of proAtetioni that is, freeze the design ia blocks of 100 and anything that came up after the 100 was started would he incorporate-:; in the design of the succeeding. 100, the operations went along la better shape and 1 believe finally were • 1 believe there was some reluctance oa the part of Mr. Ford to select a site for the Willow Run plant, I don't now rewsaber the reason for it. I think the shifting of the men during this period was done at the request of the Government. They had a desire to have some sort of an ior^snlsatioaal system, someone to bold authority in each area. They would really have liked to have what might be called a separate corporation operating at Willow Run. fhey wanted somebody at Willow Run to whom they could go to with everything, a thin.3 v?-,ie\ couldn't he accomplished under our corporate setup, after every thio; was said and done, -tern president's office and his staff was at the Rouge plant. They just weren't twins. Oar organisation probably at the time wasn't extensive enough so that there were enough people familiar with Company policy to permit Willow Run to go on all alone. However, the government did desire that. That was met ia part and fairly weH to the satisfaction of the Government by Mr. Bricker's going out there, and also by the -ITT- establishment of purchasing operations and stock keeping operations at Willow Run: or development of them a little farther than originally had heen thought necessary. These weren't totally taken out froa under the supervision of the Bouge stock and purchasing operations. Ivery effort was aade and tolerated to give the boys at Willow Bun full authority, so that the Government wouldn't feel it was delayed in aay way because of the necessity for checking back with the Rouge. The Government insisted on a considerable modification of the original setup, Their reasoning behind that was to get quick decisions. Mr. Edsel lord along with his father vas still making the decisions. That was never changed. With sore experience of the organization out there they were allowed to have greater headway. It was a natural development; maybe accelerated a little bit by conpl-ilnts of the Government, fhe real decisions were made where they had always been made. t thiak to some extent Mr. Sorensen gave maybe snore attention to it than he had before. There was a time when Mr. Bennett took a great deal of interest ia tbe situation out here. I think he got into the over-ell Operations quite a little bit, especially at the latter part of Mr. Smith's administration. 1 thiak after Mr. Bricker took hold there was sort of an understanding that Mr. Bricker's word would go aad he voulda't be interfered vith either by Mr. Bennett or Mr, -ITS- Sorensenj not tbat be didn't respond to them, but still hit wort wot pretty much law oat there. They gave him a very free band. 1 think Mr. fori, spent a good deal of tins at Willow Baa, but 1 don't believe he took very much part ia any activities relatinr. to production or design, other than putting his full support und vrh-ht behind the Idea of getting them out in quantities and fast. I'm not sure tlsat he didn't have just as deep an interest in them as the cars, because 1•think it was pretty much with hie knowledge and with his realisation of the fact that things production-wise weren't going se• ven at Willow Sua that Mr. Brieker was placed ia charge out there, Mr. 'Brieker had done a very good Job up to that tine of organising the Pratt & Whitney engine situation at the Rouge. I think he was brought to Willow inn to carry oa aad reorganise that plate* because of his record at the louge and also because he vas generally considered by Mr. Ford as a very, very capable factory Manager. I didn't have any contact with the Truman Committee's In• vestigation of the Ws war contract work generally. 1 think I bad ao connection whatever with, initial investigation by the Truman Committee which had to do with the lo»ber plant. There was later another visit hers by Mr. Truman and one or two of his associates la connection with our tank contract which had been canceled or altered in such a way that it made many millions of dollars worth 'of machinery obsolete. The question was vh-tt to do vitn machinery, and. there were a lot of charges being made that the machinery was not being: properly handled. It happened that I was so closely associated with that situation that I was one of several people who made the trip through the plant with Mr. Truman and whoever his associates were at that time, sand spent some time with them and bad lunch with thea in order to arrive at a decision as to what to do with, this vast quantity of very wonderful looking machinery which wasn't worth the space It was occupying because the teak had been changed. The result of that was that it was nearly all disposed of as scrap. It would break your heart to see sorae of the faney v • tel.- like machinery which was absolutely worthless. These were «11 special tools, mostly tools rather than machines. Any standard machines were kept and taken car© ©f» There were millions of dollars worth of special tools and jigs and fixtures which bad absolutely no value when %m t*nk was discontinued. They were worth more as scrap steel which was ia short supply at the time, and they were very wonderful looking machine tools. The Government was responsible for that. I refcasber ^steinr Mr. Truman (l didn't realize then that he was someday going to be President) when t happened to be seated beside him at the luncheon that day, "How that you have seen it all, what do you think, about it? So you think it can be anything but scrap!" -1&0- Be didn't say yes or no. He merely shrugged bis shoulder, indicating tom y way of thinking that 'be agreed it was scrap. He didn't want t© commit himself by saying that. I had no chance to see any of the visits made by President Roosevelt to Willow Run. I had no contact with it at all. 1 heard rumors about President Roosevelt threatening to take over the MS and run it as a war project during the World War II period if the Conpany didn't show better results ©a the Miller Run proposition. I was never approached officially ©a that. I wouldn't be surprised that things like that weren't dis• cussed, especially in view of the differences that had occurred be• tween Mr. Roosevelt's administration and Mr. Fori, there was mvmr any real foundation for it, because 1'm sure that nobody tried any harder than Mr. Ford and bis organisation to meet Cover nsaent• demands. I think when top Government people can© here and looked into the situation real carefully, they agreed that was so. Mr.:lnudsen helped to expedite difficult problems for us but to what extent, I don't know. Mr. Xnudsen expressed himself to me that he always felt very favorable to Kr. Basel Ford and the JKC be• cause of his prior connection. Be seemed to carry no resentment what• ever of his having left the Company, I think he took a sincere interest in expediting materials and helping IMC and everybody else with material difficulties and machinery difficulties. 8s did everything he possibly -181- could to expedite tbe whole defeats* program. there vaa seme time there (I've forgotten th® date) whea we received a flood of telegrams telling us to stop right now and close off the productioa of war materials. We did, of coursej we had to. We had to he Careful. If we had aot stopped ve would aot have been paid. Almost siimiltaaeoualy with that negotiations were started from the Government's side to keep oa with eertsia quantities of certain things ia order to finish certain contracts where the completed unite and materials for then vould he of more value to the Government than if allowed to he unfinished and perhaps scrapped. Pretty generally things were cut off sharply and settlements were made on thst basic. We ia turn had to send out similar notices to our subcontractors. It was a short period. I don't remember the date in relation to this. fhe contract renegotiating was handled through the Contract Department' that we had now set up. A good deal of that was handled before I left' the Company, although I thiak sow; of it was handled after 1 left the Company, these floverament accounts wre a long, continual process of settling up. Arrangements were made under the contracts for us to present vouchers for expenditures made and proof that expenditures were made and materials received or units produced, which were checked currently by quite a large force of Government auditors and our offices. Then they wer «182- forgotten, now'just tm that was worked. I don't know 'but what we had certain advanced funds from the Government against wbieb these things were charged and then the advanced funds were reimbursed. 1 think that was done in some cases, if not with all the contracts. We worked very diligently towards heaping the contracts p.*5d up as,closely as possible to the point at which we were entitled pay- went, as t remember, we were w&ason&bly successful ia keeping them up pretty closely. There was some delay la some of them for lack of information upon audit by the Government. It was not a particularly serious situation. The renegotiating of a contract that 1 \r-\n speak in:-; of related to the profits that we made out of Government business. I didn't have ia mind that the basic contracts were .negotiated when I was speaking of that. There was some renegotiating of basic contracts, of course,' at one time or another; a change in fixes fee based on a revision of estimated cost and that sort of thing. On the basis of the renegotiation act the Oovemment would expect a refund from the Company. If it was found that we bad wade more profit than the policy of the Government allowed, it would he expected that we would make refund. I wouldn't' be able to -tell you when 1 first became aware of torn fact that Mr. Bdsel ford was not ia good health. 1 think 1 first became aware of that' fact that be was seriously ill when be went to -183« the hospital for an operation. 1 don't know what date that was. Perhaps it was in 19kg. I realized then that Sdsel Ford was very ill. 1 believe he was quite a long time costing back to the Company and didn't spend fait© as much time there for a while, but if 1 remember correctly he got back finally on the Job and spent a lot of time there. To me he seemed quite normal, except on one trip that I happened to make with him to Washington and back. We came back on the plane and he seemed to be in trouble j that is, he was cold and wanted to be covered, and did cover himself with his overcoat on the plane. I felt that it was simply because be wasn't feeling well for some reason or other, because 1 was feeling the same way about it. Oe/. sr*lly speaking, be seemed to go along as I expected bin to. I think some of us saapeeteft how serious his condition was but nothing was made public. There was no talk about it. After Basel Ford was not present as much as he had been in the Company, I think the administration was carried out +u.*t .\boui. t>..r same a© it had been. 1 think we looked to Mr. Edsel Ford as our over there and also we looked to Mr. Henry Ford, We realized that Mr, Henry Ford was getting well up ia years, and I think there was a good deal of thought that he wasn't able to give to the business Just all of the attention that it ought to have. % contact wasn't with Mr. Henry Ford very much, although I did quite a bit of the time have lunch with Ms and Ms group. 1 was part of the group over at the £earhorn Bound Table. There was a period of time there when- there was a lack of depth of organization among oar top people. That w»m a pressure upon the rest of us aad a»l« us carry a heavier load than, normally, because we just didn't - have enough top flight aen among which to distribute the top line of duties aai policies. I think all of as felt that to quite &e<. extent. 1 think for a long time the top positions, when thta-e were resignations or deaths or something that took the* out of tbe picture, were hot filled. There waa a period there when Mr. Benry ford and Itr. idsel Ford didn't seem to build up tbat top personnel aa rapidly as it was going down. It was thinning out, so to speak. I would say this hejrafi ia the early forties. It cane at a time when Mr. Henry Ford aot to la very well up in years and at the time vii« Edsel Ford becan** quite ill. Then, of course, it was even aore accentuated upon Mr. Bdsel Ford's death. Tf«u could tsll that Mr. lenry ford's health was falling froa 1939 forward by talking, with hia. I think it was characterised by loss of Ms usual physical ability and mental alertness. 1 think I was aware at the tins of his sickness in *39» It was a slight stroke. My contact on current business wasn't so mash directly with Mr. ford and 1 wouldn't notice these things so much. Most of asy impressions were gained by what I heard end also by what 1 did see at one time or -185- another or at lunch. He didn't, take the sumo .Interest in tr-ings th*t I had seen bim take in prior y»ars when I ivid tiie cliance to observe him. 1 think Mr. Ford relied more oa other people now to make decisions within tbe Company, those .people were Mr. Bennett and Mr. Sorensen» there was sore place la there where Mr. Sorensen left and Mr. Bennett was sol® top representative. These was iwjsmwhere In there that Mr. loiary Ford II came in. From that time on Mr. Bennett bec&sr- the liaison man, so to speak, between tho Ford family and the business. He took really active leadership after a time. I bellow fcr.Bennet t was there for some time still after Mr. ienry ford 11 caw on the job when he came back froa the lavy. J don't kacnr Just what those dates were. One of the first aa^or changes took place in l -U". vt en Mr. Wibel left the Company. I would say tbe beginning of Mr. Wibel's leaving and the successive things tbat happened sfter tbat — Mr. Crawford's leaving and Mr. Qalaab leaving oa the engineering side aad Mr. Heboid's leaving — meant % thinning out of the top ^ruonnoi. There wss no real replacement wide. Of course, the vork vxs cared for, but there wasn't the mm leadership that we had had before, the Company was sort of drifting during this period until fcary Ford II was really able to take hold. Mr. Wibel left because of differences with Mr. Bennett. -186- Mr. Bennett Intervened in some of the purchasing matters. There were things that didn't look right to Mr. Wlhel and he carried them to Mr. Sdsel Fori or directly to Mr. Henry Ford, The result of that WAS that Mr. Bennett was supported against Mr. Mitel and Mr. tflbel left. trior to Basel's death 1 think Mr. Crawford, who was an important man :ln the place, left. He was transferred over to Gate k} the production offices, hut that »ve amounted to forcing his out practically. So far as 1 know, his leaving was caused beeause of differences between he and Mr. Bennett and perhaps Mr. Sorensen and Mr. Rausch. He carried his side of the story to Mr. Edsel ford and through Sdsel ford to Mr. Henry fori. At that time Mr. Sdsel ford was pretty sick and I got the impression that it was developed that Mr. Crawford was carrying things to Edsel Ford that would worry him and he shouldn't be worried, and they were things that scwebody else in authority had decided should be done, and he was doing Mr. Sdsel fore more harm than good. Somebody took on the responsibility of putting him out. That was possibly the sane situation as Mr. libel's. I think the: discharge of these n represented a desire ©a Bennett's part to assume a more active leadership. 1 think it represented support for whatever Mr. Bennett saw fit to do in the various depart• ments, 'regardless as to what the department had thought about it. It resulted ia Mr. Bennett taking a more important part ia leadership. 1 think by this time Mr. Henry Ford had come to rely upon Bennett as his -19?- adviser. 1 think Henry Ford was taking some .fart ia the- business out I don't know Mow much. Certainly the moves like the letting out of Mr. Wibel and Mr. Crawford couldn't have been done without his approval. I® must have been making final decisions- is sews important situations, although, 1:don't know that for a fact. There was a period in here {1 can't date it for you) when there was a question as to what would happen to tbe presidency of the Company. There was some question, as to whether or act Sorensen or somebody else: would take it or whether Mr. Henry Ford -would assume the office. 1 believe Mr. fienry Fort, Sr. did assume that office. 1 gathered at that time that he did that in order to settle the question. There were times down thorough the years when some way or oV-er Mr. Sorensen was called or considered himself as ceneral manner of the Company, That was a thing which 1 think, was distasteful to Bennett and not ia line with Mr. leary lord's ideas. This assumption of tbe title of president by Mr. ford, was to settle that question. Mr. Ford was tbe top and not Mr. Sorensen. 1 don't know any otter particular thing around that line. I heard that there was once the thought of a committee to carry the administrative load of the Company, and there would be no new president. I always thought that that was Mr. Bennett** plan, hut I don't Wow that that was a fact. -188- 2*» sure that Mr. Beary ford took the title ss president of the Company to settle aay dispute between Bennett and Sorensen ae to who would be top aan* In so doing he aade it very clear that he wns still la ©barge of the Coapany. leaving It that way it didn't place either Mr. Bennett or Mr. Sorensen ia the top spot. 1 think Mr. Ford relied pretty much oa Mr. Bennett, more than be did on Mr. Sorensen. 1 think it was a tossup for a long time as to who was Mr. Ford's top adviser. 1 think Mr. ford was quite well aware of the fact that there were two men fighting for power and he never settled it one vay or another. 1 think by what occurred fro© tiae to tiae Mr. Sorensen would be on top for a tiae and then again Mr. Bennett would be on. top for a tiae. the forces of one or the other at one tiae or another were adversely affected by decisions of Mr. ford, 1 think Bennett rose to power enough so that he could rival the position Of Mr. Sorensen at the tiae of the inception of the union contracts in 19¾-!. Mhr. Bennett bad a very large power prior to this time. Hie power seemed to be pretty well at the top frotc the time that the Highland Park plant's main offices were aoved to the Bouge, which was the first of 1926. From that time on be seemed to be one of the very top men. People like myself certainly recognized Mr. Bennett as our superior;: although we didn't retort to him. When Mr. Bennett spoke, -189- we jumped. I don't think hie position equaled that of Sorensen, but he was pretty well up on a level wl th Sor- wa. There wasn't anybody but Sorensen Who had any influence over him. They had spheres pretty much separated so they eould oexsrate without stepping on each other's toes. Mr. Bennett handled the per• sonnel end of .it and I believe there was a time when he handled the nonproductive 'end of it to some extent* He did that through Mr. Bausch. 1 don't know when Mr. Bausch got into the picture ia a big way, hut Mr. Benaett did control a lot of the factory things through MR Bausch. Mr. Sorensen'« field was more in production and la branch and ia sales. Mr. Bausch was generally considered a Benaett aan. Mr, Bricker had •-- big part back there and he was considered a Sorensen man. Mr. Martin, of course, always went along as sort of a partner of Mr. Sorensen. I think he took second place all the tin®, although it appeared oa the surface as if he was oa aa equal footing. Be wasn't really on equal footing in ths estimation of any of us, bui he did have a great deal of authority aad we recognized him ae our superior, fe always felt Mr. Henry ford had a great deal of confidence in him. I think Mr. Martin cams about as close to being neutral as anyone could be. I don't thiak he really took any sides, but he was placed as sort of a partner Of Mr. Sorensen. Mr. Ford would keep all of these forces in balance and make the ff- -I decisions himself. 1 think this caused a certain amount of insecurity and. Instability among those la either group who felt they were working with a side. In fact, 1 think that was the harm that all that sort of arrangement produced. There weren't really definite lines of authority, If a man working on Mr* Sorensen*s side received an order from Mr. Bennett, if he didn't comply with that order he was going to be in wrong with Mr. Bennett some time in the future, and if he did comply with it he was tn wrong right now with Mr, Sorensen. That applied throughout the whole of the organisation. Tl» kind of setup that we had then 1 always felt was bad for the morale of the entire executive force throughout the Company, branches as well as the home office. The branch people were mixed up to some extent because Mr. Bennett had a line of authority through the personnel work and Mr. Sorensen through the assembly plant. Then there was the Sales Department which I think was dominated to a large extent by Mr. Sorensen, but it was not fully under his control as Mr. Bennett dipped, into that. Bier© was always & certain division of control and certain necessity for watching just how you stepped so you didn't get. ia wrong yourself. Mr. Edsel Ford, operated at the top and ail important .matters were taken up with him, certainly from the finance side. I think Mr. Wlbel took his problems to Mr. Sdsel ford, and Mr. Sdsel Ford dipped into the whole: situation as he saw fit to do it. I think he acted always with the idea of being sure that what he did was ia line with -191- his father's policies. He himself was newr in danger of losing his job, so he aslie many decisions on his own and once in a while tone of those decision* were reversed afterwards, apparently by Ms father. When they were, the situation was accepted by Mr. Edsel Ford. I think sometimes Sorensen, Martin, or Bennett did tell Mr. Edsel Ford when they were asked to change things by Mr. Henry Ford, and I think sometimes they didn't tell Mr. Edsel Ford. It was simply a case of their working first for Mr. Henry Ford, and when be ordered certain things done,.they were done. On the other hand, 1 think if Mr. Edsel Ford gave orders to either Mr. Bennett or Mr. Sorensen they were carried out. 1 don't know of any eases where they weren't. Certainly there was a feeling on the part of Mr. Sorensen and Mr. Bennett that their orders came first from Mr. Henry ford, In this Mr. Sdsel Ford would be sort of a junior partner with his father, I think Sdsel bad sort of a personal following in fje Corgr^iy, like Mr. Wibel, who relied upon hia to carry things that they fvlt incorrect to his father to get some kind of a more satisfactory decision. I think some of us thought more along the orthodox linos t* :>.?. Mr. Henry Ford did about the way they carried on the business of the Coapany, or in any event, more orthodox then either Bennett or Sorensen did. We could reason with Mr. Sdsel Ford and we could not reason with Mr. Sorensen or .Mr. Bennett at times, la any event, it would be our -192- duty aot to g© to Mr. Bennett or to Mr. Sorensen oa Mg things, but to Mr, Sdsel Ford, Bat, of eourse, by the time we got to the place where we wanted, to go to Mr* Idsel Ford, we knev what Mr. Bennett's aad. Mr. Sorensen*s positions were in these natters, so there vouldVt be any- use going to thea. Mr. Idsel ford did reason these things out aore in line with what aany of us thought were proper business lines. Se did not take the drastic aad arbitrary actions without very thoroughly going into matters iavoived. that were taken by Mr* Bennett and Mr. Sorensen. pre• sumably at the direction of Mr. lenry ford. Mr. Easel ford sight hack* track on soae of his ideas where it would sees that the other people never did. in this confusing situation it would seem that Mr. Idsel Ford, would be a stabilising balance wheel. 1 think that when things were wrong in Mr. Sdsel Ford's estimation* he would just bide his tig* with the idea of having the thing corrected through bis father, if not Immediately, at sow* other tiae. le would go through his father on these problems. There never wae very much .said at the Round Table meetings concerning:any problems. I think If Mr. Idsel Fort discussed anything in detail with hi® father, aad l*a sure he did, it was ions la this house or at private meetings between he aai his father. There never was any evidence of disagreement between the father ami the son that I ever saw:at any meetings where I was in attendance. Mr. Sdsel Ford -193- generally seemed to accept the decisions of Ms fath©r or adopted the policies that hie father sight suggest. 1 remember a few cases where Mr. Sorensen had. put into affect certain policies apparently at the direction of Mr. Henry Fori, con• trary to what Mr. Sdsel Fort had put out, and Mr. Sdsel Ford's manner of handling it was finally supported.. I can't remember at the moment any but one. I remember one incident that had to do with Lord Perry, vr;ere Lord Ferry seemed to assume a tremendous amount of authority contrary to what Edsel ford liad outlined for him. Mr. Sorensen supported Perry. I've forgotten what the particular things were, but they were isroortaat. I remember It because I was involved ia the letter writing end of the matter. It bad been done through me. fhat was one of the particular times when.I think 1 had a narrow escape, these things that 1 had done had been after discussion with Mr. Edsel Ford, and .1 don't know with whom he had discussed the* and 1 know they were quite proper. 1 remember that Mr. Sdsel Ford was supported by Mr. Senary Ford, and Mr. Perry was told that he must follow the orders of Mr. Edeel Ford and was told that by Mr. Soreaaen after Mr. Sorensen ha:! told il the other way around before. Mr. Sorensen had informed Mr. Perry that it was necessary to follow Sdsel's instructions. Mr. Sorensen was told that by Mr. Menry Ford. 1 think at. on® time or another everybody was placed in a peculiar position by these Hues of authority, although I think it was more frequently with Mr. Edsel Ford and those people who looked to Mr. Idsel; Fori. Whea 1 aay arbitrary decision on the part of Mr. Beary Fori, I don't kaow that he did these things without reasons. They were satisfactory -to hia, even though the rest of as couldn't understand thea. I thiak Mr. Beary Ford didn't explain his reasons for these things so much, but 1 think most of bis important decisions were aade after a lot of thought oa Ms part, a lot of gathering of ideas by listening perhaps to Mr. Sorensen.Mr. Bennett, Mr. Edsel Pord, Mr. Mayo, and whoever the mea were, and also to Ms own farmer, Mr. Bahliager, and to dealers as he went around, aad everybody else. 1 think moat of his big decisions were made only after a good deal of thought. 1 often thought that sometimes the decisions as he made them were not carried out in just tbe way that he might hope they would be carried out or that fee would'have carried them oat himself. Certainly with an empire as Mr. Ford had, he didn't have too much time to go into details once he had mad© a decision. It was just too big a thing for any one man to do, and take up his tiae doing that rather than spending his tiae oa new thoughts concerning his business, I wouldn't think that Mr. Benry Ford jumped to conclusions. He might have done things once in awhile quickly to some extent on «. -195- hunch, bat not too such 00« I'm ear© bis decision is not signing the IRA. code was certainly nothing done quickly and arbitrarily. & spent a lot of time thinking about that after the law was passed and up to the tiae that die had to asks the decision whether or not to sign the code. Any tiling that was really quite important I'm sure had a lot of thought given to it by Mr. Henry Fori. J feel sure that I'm right on that because I bad some opportunity to bear him, and be couldn't have made those remarks without considerable knowledge about tbe sub• ject of which he was speaking. Mr. Gregory wasn't a director ia the Company. Se was a designer. He had been quite close to Mr. Ford, i think Mr, Gregory was quite a temperamental character, le probably had to listen to more bosses after a certain time than he .had to prior to that tine. Somewhere along the line he got tired of that. 1 think he wasn't let out; 1 think he resigned. I think it came out of bis temperament and unwillingness to battle with four or five bosses at one time or try- to satisfy a lot of bosses at one time. Mr. Sbeldriek lad gotten himself in disfavor in some way or other and 1 believe he was asked to resign. I'a not sure about that. He had been through a lot of battles and I don't think battling bothered him any. I don't know if it was the question of the tank engine design that got .Mr. Sbeldriek into trouble. 1 don't believe 1 ever knew. -196- • Itr. Benry fori II , when be ease hack to take aa aetlve part In the aanageiaeitt of tbe Company, spent bis time going about the plant and asking questions and seeing how things went, nothing ms too big for hia to; watch nor too saall to watch,, nor too big to ask a question about, and so on. I know he asked me aany, many questions by the hour about what I knew about the Coapany and how 1 felt about a lot of tillage in the Coapany. 1 believe he did the same thing with respect to aany other aea in the Coapany, 1 think he had is mind the reorganisation. I'a not so sure bat what he expressed tbat at one tiae or another. 1 think I said before that we lacked top personnel. We lacked the depth of personnel,: so to speak, that was easily recognised, 1 think, arid- 1 think Mr. feary Ford 11 was aware of that. After he became executive vice-president, I presume he had made up hi® mind to one or two moves. One of the things he did wag bring Jack 'Satis back from the Coast as sales manager* 1 think some time afterthat Mr. Bennett wae asked to resign* that is when he became president. 1 don't believe 1 know who all Mr. Benry fort II talked to during the period before he became president of the Company. I do know 'he talked a good deal to Mr. Martindale about cost accounting. If 1 did know who he talked to, I don't remember today. I do know he talked to a lot of people. I was aware of It at the time, and laterally that -lf7- is vhat he would do. He vas busy at that time collectinr as mac-- information as be could about the Company. I think he got tbe ideas of every man about his own feelings about other departments. Re found out ho--.* other departments were working with a particular department head v'r.oa he v..is talking with. He got the feel of the organ!satlon in that way. I'm sure somewhere along the line Mr. Henry fori II made up his mind that a reorganisation vas necessary. One of Mr, Henry Ford II 's ideas was the deeentrj.li.'.vition .jf the Company and the making of separate profit centers. I think proH.My the work of Mr. Martindale urns in that direction, done with the idea of bringing up something for Mr. Ford's examination, lo definite decisions had been made in -respect to that, but that warn one of tbe things that Mr. Henry Ford wanted to accomplish in those early days at some tiae or another. There was a food deal of talk about Sorensen and Bennett "educating the young man," so to speak. Of course, Mr, Henry Ford war. quite frank in expressing hie feelings, that after all, he was a young man and had been ia the Savy one or two- years. While as a boy he was generally familiar with the Company, but he had no familiarity with general over-all business practices. He had to learn, and he was quite frank by saying that t:.at was what he wanted to do. He wanted to learn and learn us rapidly -*a possible, % think Hr. Benry ford II did not agree with many nf the things that were done by Mr. Sorensen, Mr. Hausch, and Mr. Bennett. I think he felt that probably Mr. Brisker wee the sounder smn on that end of it, and also Mr. Bugas in personnel was a sounder man. Davis was in the sales and so on. 1 think he wade up his mind about where these things were soundest. I think he had la mind ail the time that the place needed a thorough going over, as of course it did, because it had bean allowed to settle down and run more or less free without a good co-ordinating head, someone who could review all depnrtssnts objectively. We didn't have that for years. Even thougb Mr* leery Ford, Sr. was rough, 1 do think ha viewed all of the divisions objectively. He wanted all of them, bat he wanted them naturally only to the extent of producing something. He didn't have for a period of time any such leadership at that. (I'm speaking, now of the period after the death of Edsel Fori.) 1 think Mr. Henry Ford II knew that, and he wasn't willing to take on the full responsibility himself because he realised that it should be taken on by someone with probably a much lon.jer and wider experience than be had been able to have at that time, through no fault of Ms own, but Just by the absence of years, that was his reason for bringing Mr. Breech into the picture. ©nee Bennett realized that §Sr» Henry Ford, Sr. me going out of the picture, he made an effort to ingratiate himself with Mr. Henry Ford II, but 1 think his practices were such that he was never able -199- really to to that. Be didn't think like Mr. Henry Ford II thought on many business'practices. It seemed torn in ay opinion that Mr. Sorensen'a method of managing was not good and was not objective-, as I understand it. It was not done along the line of real investigation analysis prior to asking decisions. I think Mr. Sorensen bad been accustoaed to carrying out Orders of Mr, Henry Ford, and when it came to his really putting thing* together, he did not give proper weight to all tilings that go to make up a sound business organization. le needed the leader• ship and direction to carry out things, and onee that had 'been gone he couldn't carry on on his own. 'As t understand it, there was a period during which Mr. Bennett stilljbad a tremendous amount of power. It was before Mr. Henry Ford Sr's. retirement* I think Mr. .Sorensen had tried to assume the position as general manager of the company. It was sort of a struggle for power, and at that particular point I think Mr. Sorensen was asked to retire* It happened when Mr. Sorensen was in Florida, fhere is no question about it is my mind that Mr. Sorensen was definitely asked to retire, but then again I don't know the actual facts. I'm sure that he was definitely asked to retire. I. think this would account for Rauseh being placed in full charge of the Rouge for a time. 1 think Bennett had in mini placing Mr. Rauseh in that position. .1 think he had been groomed to take that -200- position, over at one time or another. At the tiae in 19%5 when Mr. Benry fort had a stroke in Georgia, Mr, Benry ford II commenced to take authority at that tiae. 1 believe froa what I could observe- that he did this with the advice of Mrs, lenry Ford, ir. All during this tiae I felt that he had the advice of his mother'and possibly Mr. ICansler. I don*t know this for a fact, but Mr. Kansler lad had a very great Easiness ability and was a aeaber of the family. I always believed that Mr. iteary fori II ia asking Ms decisions consulted all of those people. % think he par• ticularly consulted the wishes of his grandaother, Mrs. Benry ford, Sr. in those rather serious times* Why 1 lave that opinion, I don't know, unless 1 had beard soae things that would indicate that. During the period froa Janu:iry of l')U!; u?;, to September of 19^5 there was no big changes brought about. There wore such changes as Mr. MeCarroll being aade chief engineer. I don't know Just when that happened. Mr. Craig was placed ia charge of the fort Foundation and soae subsidiary eoapsnies which Mr. Beary Ford with the Advice of his family thought ought te be separated. fioaewbsre along there when Mr. Craig left to take charge of that end of it, I took Mr. Craig's place as vice-president ia clrir-n of finance. There were no outside people brought into the picture. Mr, Henry Ford II wag going along witft the organization that was witu the Company up to that time. There were merely soae rearrangements -201- made in the situation. Hhea Mar, Mitel left, Mr. Charlie Carroll was placed ia VH of the Purchasing Department.. Other than sow rearrangements of the personnel ©a the inside, there was nobody brought ia. Soaewhere along the line Sr. Suth«rland was brought ia ia charge of the steel work. After Charlie Carroll had been in charge of purchasing for sow© time, Mr. Browning was brought ia. Those were two exceptions to what I said before. Browning was brought in to head the Purchasing Division. »o over-all co-ordiaator was brought ia until Kr. Benry Ford II brought in'Mr* Breech. Mr. Brisker was brought back from Willow tea. During the time that Mr. .Bennett continued with the Company, there was a division aade so that Mr. Iricker bandied all productive operations and Mr. i&useh handled all nonproductive operations. 1 think Mr, Bennett exerted considerable control still daring this period. 1 don't know when he left.. 1 believe it was ia 19^5- I couldn't tell the factors that led up to the eventual resignation of Mr. Benry Ford, Sr. I knew there was a feeling that it was necessary for somebody to actively top the Company without it being necessary to go back to Mr. Ford for confirmation of every decision. It was difficult to operate freely as long, as Mr. ford bald himself in a position to!eaaage decisions and that sort of thing. I know there was that feeling, but I don't think I knew too much about that. I knew that: Situation ©Mated sad 1 knew somewhere along the lias Henry Ford II got the consent of Mr. Henry Fori, Sr. and. Mrs. Henry Ford. Sr. that his decisions would stand, from that tins on. I have heard that it was said that if Henry Ford II wore to COM into the Company, he was to he given full authority aad not be placed in a position such as his father had been, I always thought that was very'possible and it wouldn't surprise as at all if it actually took place. I don't know that for a fact. 1 was present at all of the directors* meetings, with maybe one or two exceptions when I WAS out of town, but 1 don't recall that being discussed at any directors' meeting. 1 think that was purely a family affair. 1 was very much aware of the directors* meeting ia 19&3 when Bennett and anyone participating on the Ba«a*tt side were eliminated from the Company, but 1 don't believe 1 can describe to you very much about the actual happenings at th© time, there was nothing wrong or hard about it. It was a decision naturally aade by Mr. Henry Fori II that Mr. Bennett should he asked to resign. Maturally that took with him some people. It involved Mr. Rauseh certainly and probably Mr. Mack, It probably included acre who bad acted, as Mr. Bennett's lieutenants in carrying out various things, that he wanted to carry out.. I think there was a written resignation by Mr. Bennett, hut I'm not sure of that. I was an officer and director in practically all the sub- -203- sldiary companies of tbe ford Motor Coapany in those ysars ami I be• lieve we made it a practice of having oa file letters of resignation which could be accepted. I don't believe that was so in respect to the main company aad I doa't know that that was so in all cases in re«pect to the subsidiary companies. I'll tell you why I say that, When I resigned from the Company ia 19%T» I'm stare there vas ao letter.of resignation on file ia ay ease; 1 mean a letter resigning from the directorship. (1 had resigned from the Company.) Afterwards I was asked to sign a letter of resignation from the directorship in order to have the records ia regular order. If that was so in my ease it mast iiave teen so ia respect bo the other directors. I certainly wasn't with Mr. ford when he went directly to Mr. Bennett's:office and asked hia to resign from tbe Company. Whether 1 knew about It in advance or not, I doa't know. I probably did be• cause I was pretty close to those things at that time, Mr. Rausch was a mysterious character to some extent. Se operated ia a;kind of mysterious way. le lad eertala people that be trusted and who knew something about what he did aad where he was. He had a private office, I believe, in the old Powerhouse or somewiiere. It was difficult to get into and he had a very great variety of things there, and that Is where lie spent a very great deal of his time. I was ia it after Mr. Bausch left and it wis really ammslag. I doa't believe I can tell you just what was in there, but then* v:;s everything. in the world, including some instruments, lite maybe type• writers or radios or something, along, that line. They had been bought for Company use but they had beea found in his office; 1 don't know for what reason. There were all arrangements for lodrrin,;- there, and I think he even had somebody there who pressed his clothes. It was a most amassing setup and seemed to be quite unknown to anybody generally. I don't believe 1 knew of it and 1 don't believe Mr. Bricker knew of it. I don't believe he had ever been ia it until after Mr. Bausch left. 1 remember one time that Mr* Bauseh and 1 were going to attend some important meeting in town. I didn't make any effort to go with Mr. Rausch but he very nicely invited me .Just prior to going. He said he would drive over to wherever this was and to whatever it was, and I 5 said, '§k*y, that will be all ritfht with me." I went over to his office 1 and nobody knew where he was. He just couldn't, oe found, lie ippearo'. on time and 1 knew afterwards where ha was; he was over at the place getting all cleaned up and ready to go. I don't know how 1 got into all this story. That was a sample of Mr. Hansen's operation®, Mr. Bennett's right-hand man. One of the big things about Mr. Rausch was this: 1 tbiuk Mr, Rausch had a lot of ability but either couldn't or wouldn't give decisions in respect to things that other people needed to know about. In my case on 'the finance side there were many things on which I had to have decisions from people In the factory. If it was a decision from -205- Mr. Rauseh, it was almost impossible for use to ever get a decision. I think the same thing was true in respect to other executives of the Company, t think that was one aspect of his operations that was not good. Sometimes 1 would he forced to make a decision myself, but ordinarily a man wouldn't do that and it was just simply a case of delay in following him and tracking him down, it was an unnecessarily long and Ishorious procedure and highly unsatisfactory. Any drawing account Mr. Bennett might have had was in the form of expense advances. All those advances were cleared by expense accounts. Mr. Bennett always bad a salary, 1 believe. Mr. Bennett's signature was recognised as the proper signature on an expense account or expense^reports submitted by him or assistants who might have ted expense advances. If they bore Mr. Bennett's okay we asstwei them to be proper and cleared the accounts. Expense account was one of ay personal worries for many years, and 1 know that is the way it wis done. In any organisation as big as that if sMpments of electrical appliances were diverted to the personal us® of some wishers of this group, it is easily possible for trucks to go through the gates without being examined. The force that examined the trucks or cheeked those things out were- in charge of Mr. Bennett finally. The things wouldn't be cleared; from the books directly, hut inventory would have the effect of clearing most of them. All of those things would be charged into -206- our general stores account as distinguished from tl» productive materials account. Cfoaeral stores sere Inventoried annually as veil as pro• ductive material account* were inventoried. Aa adjustment was aade in tbe books of any differences, that is tbe way anything lite that, if it happened, vould be cleared from tbe account®. Tbe inventory shortages were never really very imit ir? terns of percentages. These things, if they happened, happened over .... period of years. We knew that some of these gentlemen built quite e.'Uborvtr establishments, and how they got the material, ve don't knov. Whether they paid for them or vhetiter some of this material came out of Costp..uy stock, we don't know* there was no record that Mr. Bennett built Ms hose with Ford Motor Company1 material and with the consent of Mr. Beary ford. It would be handled .through the inventory adjustments. That is tiie way It vould be washed:out. Ve la the accounting end had ao toowledge of such diversioasd If we had, 1 certainly would have been down in the front office with it. When you consider that the turnover In terns of dollars at the time was somewhere close to $800,000,00G a year, tl«s inventories as a whole .amounted to some $230,000,000. Things like that didn't amouat to very much in terms of percentage. % would thiak that probably Mr. leary Ford knew about vhat was happening. 1 don't kaow whether it was done with his permission, but certainly he tolerated it. It was maybe a way tbat Mr. leary Ford •207- had fer paying a nan upon whom he relied without spreading a practice to tbe force of the executives as a whole, but favoring some of tbe aen tbat he immediately relied upon. I always felt that if it was ^ ;".-.et, the real harm that the practice did was not in giving these a-eu sow : additional compensation. the real harm was that these stories were prevalent through• out the organization and had a very, very bad effect upon tia- ctorulc of the organisation, because if the boss can do things that are quite unconventional, it gets into the minds of many other people that they too can do that. It had the effect of giving to people in lower cate• gories and lower positions, authority that they shouldn't have. Ia other words* if these people in these lower categories did this or thn. and somebody attempted to disagree with them, no matter how wrong it was he found he was in trouble because those people were supported: and tbe people who tried to make corrections that should have been made couldn't make the corrections. It was a very bad thing morally. I think in the stories that I have heard there was more than one individual involved in that, femember, nose of these eould 1 prove. I .always thought that even if the stories were so, it was additional compensation, and if they had been bandied in toe ordinary way there would have been entirely proper deductions as expenses of the Coapany. 1 newer myself felt that there was anything really serious about the situation so far as aoney value was concerned. It was the »208- weaamv that I ;was concerned about, h 1 don't believe 1 know what Mr. Benry Ford II*s t.ow.,hts really were about reorganising the Company. I think Nr. henry Ford told me, for instance, quite early in his studies that one of the things he thought of was to find some nan with wide business experience who could head up the Company, soias man that had not been a pari of the Company and therefore wasn't swayed by factionalism within tw. Company. 1 think he told me that quite early after he went on the as president of the Company. I always felt he was quite right ia that, because hie own organisation there, what was left of it ia the top positions like myself,, was getting pretty weU up in year©, ly that time 1 was sixty years old and sow? of the otter men were nearly that oM» We were all pretty well up in years. 1 always thought that was a pretty good idea and that is eventually what he did do. low he worked that out, 1 don't know. I think he worked it out with his own family, his mother and possibly his graiadisjther and very likely with Rr. Kanzler. 1 thought it was a natural thing for Mrs. meaner Fori to take advice from Mr. Kanzler, and naturally Mr. Benry fori might do the same thing, X have no knowledge as to how he worked that out, other than knowing that he was thinking 410¾-; that line because I tow he told as that oae time. •I don't reawsher just when the budgetary control was set up for capital expenditures. It wasn't really so much a budgetary control as It was an attempt tofull y examine any proposed capital expenditures. It was really that because it was necessary ia an operation such as that to make frequent renewals, change^ and additions involving very, very large sums of money, these had been done on the fecwrmndatloas of this man or that man:and finally approved by Mr. Henry Ford, perhaps either orally or in writing. Usually those things were don© orally. Many of us felt that we didn't know enough about proposed expenditures, that .particularly Mr. Henry ford II as head of the Company then didn't know enough about tbe plans, the ultimate expenditures: and the way to do it would he to organise a committee of a half a- dozen or so of the top people, and all expenditures beyond soas minimum figure should be passed upon by this coasittee and formally approved. I believe that was temporarily a big help so far as handling of our capital funds were concerned. The Company's cash position at that time was good because the Company didn't owe a cent, but it was something that had to be watched in view of the very large expenditures that were necessary at the conversion time. I retired in the beginning of 19%?, although 1 was on leave from that time until October. Mr. Breech, came in the previous July actively. There was some discussion of the subject of decentralisation prior to the time that Mr, Breech came in. After he came ia, he brought -210- vith hint *br. Crusoe, and thea he brought ia other people later. A plan for decentralization vas studied immediately after Mr. Breech eaae ia, as I remember it, I think it was pretty well developed by the end of six months or so, but it wasn't in complete operating fore© even at the tine 1 left. Halle I was generally familiar with It, aad as a member of tl* executive committee I heard a good seal of dlseussioa about It, I wasn't there when it was finally put iato effect. S#m© parts of it were placed in effect. I believe the Liacoln was separated by the time 1 left. It hadn't settled dova to a good working thing. It was in the process of being elwnged'Over and 1 hadn't seea the finish of It. 1 thiak Mr* Beary Fori had the idea at the beginning tbat it would be a good idea If our organization was act up along lines similar to that of Seaeral Motors. I think that when Mr* Breech oast© ia, that is exactly what they tried to do, taking into account the differences of the actual physical situation as existed ia our place. I think t.* >.t he aad Mr. Crusoe under him, with toe assistance of a staff of specialists, did just about that;.and tried to model it along what Mr. Breech, and Mr. Crusoe had been familiar with, ia the General Motors organization. fhey planned to set up separate profit centers for ©vary operating division ia the Company. There were certain natural lines that could-be followed if you wanted to work out a plan like that. The Steel Mills could be outlined as, a unit aad 1 think that is what •211- they did* A certain outside plant, for instance, was clearly a wait and eould be bandied separately, fhe Lincoln Motor was soaiething with a division that could be pretty well outlined, although there was a certain dependence by the- Lincoln Motor division upon the facilities of the Rouge plant for certain materials, but a buy-and-sell arrangement could be made and was made* I denH know what they have to tbe way of profit centers today* 1 don't know whether the Foundry is set up as a profit center or not. In the old days, for incentive purposes managers worked on the basis of volume sold, that is, physical ioli» sold. Ia tin; Production Department the incentive was improvement of time in the operations and so on down the line. Mr. lenry Ford II felt that the incentive, would be better if it ms oa a money profit basis rather than oa a basis of the other kind, that is the thing to which they shifted. Ke had before him, of course, the fact that we were going along ©a thin ice for a long time. He hadn't been making much money and otter companies, Chrysler, General Motors, and people not in the automobile business, were making good raoney at the same time. Ke felt our manner, of organisation perhaps had something to do with it. When reorganization actually took place, there was a new kind of security fear. The people who had been, on the job for aany years -212- felt that they were feeingsupercede d feypeopl e who were brought in from the outside. That feeling nay have been allied a very great deal because, so far as I know, unless scoebody did something wrong- they stayed there. If anybody left they did it pretty -generally of their ova accord and not because they were turned out. I know there was a feeling of the lack ©f security and the lack of opportunity for personal advancement in the organization due to outsiders having been brought in. Those are the things that go with any reorganisation. % think the arrangements for carrying out the administrative Side of the Company bad resulted in direct lines of authority. By the time 1 left there were certain definite divisions formed, and thus© divisions went along in 'that manner, reporting to their separate, heads. There wasn't any more of this overlapping that always had existed in the ford Motor Company, low you tew where to go for decisions. When I moved up. to secretary aai assistant treasurer in r,Vs, 1 believe Mr. Brlggs moved into raypositio n in the Auditing Dep-irtisent, Mr. Martiad&ie remained as head of the Cost Department* There was a question at that time as to whether or not Mr. Martindale should fee brought over to the position that 1 was vacating. 1 felt that Mr. Martind&le.was of much more value where he was. It was Just as broad a line of work and ^ust as good a place from which to be advanced to •& higher place if such an opportunity came. I think Mr. Crai:- at that "213- time agreed, and I'm sure that was right. when I became a vice-president la elsarge of finance, I bandied aU tbe auditing* accounting, disbursement, and all the financial end of the work. .A very great deal of that was taken over by Mr. Crusoe. That was necessary la order to develop lines of accounting. One division that was related purely to finances was left with me. The work was divided. I think the legal division up to that time was under my jurisdiction and X think the legal division stayed with me. The work that had been centered in me up to that time was divided ia two or three ways. I've forgotten Just how that was done. 1 think the Auditing division was split up and turned over to Mr. Crusoe. That would make sense because they were the controlling center for tbe assembly branches throughout the country. As vice* president In charge of finance I would exercise in an advisory and consultant: capacity with Mr. Crusoe for financial problems that arose. All. of this decentralisation and tbe desire to have more detailed records and more reports of one kind or another to be user? guides for production and general management of the business called for a tremendous expansion of tbe clerical and administrative side of the business. 1 don't know Just how much expansion there was, hut I know it was a very large expansion. X don't know whether the central accounting records and the -21¾- Income tax matters were still centered In tiie Finance division, Yon could find that in the organization chart. 1 don't remember now ^ust how tbe tax end of it was bandied, later there wan a very definite Tax division Set up, but 1 think that was after I left. It was some- what after the fashion of tbe one that lasted for a year ia 1319- |n ay case, before 1 had worked with tUt Ford f otor Cojo-ny I had spent seven years with a very large corporation, at lenst verj large in those days, where 1 worked for a time in the operating division wader tiie vice-president in charge of operations, and then in the financial division under the controller. At the saae time I was studying accounting and business laws and economies, money ma banking, and some other things at the University of Pittsburgh night- school. I ;had considerable knowledge of a corporate orv.i'ilj^tlon. Ifben I came with the Ford Motor Company, my first experience was in tbe 'branches ia accounting and sales and working among dealer• ships, so I really had a pretty broad experience over a period of about thirteen years before I came with the central office of the Ford Motor Company. 1 was always la the central office of the Ford fcotor Company, that is, In the middle of the things, and I saw this picture of organization develop and saw it go down tbe hill. % was aware of what I thought was needed when Mr. Henry Ford became quite old and Mr. Idsel Ford died* I think my impression was that it was happening just about the way I thought It would happen. -215- • I expected It should happen that way. I thing perhaps I wasn't so surprised about what actually happened; I mean the actual reorganization. 1 lad seen a good deal of reorganizations in one way or another over the years* not only in our own internal reorganisations and shifting, but sane reorganisations of outside places like Lincoln Motor Gmmts? with which I had some direct or indirect contact. It seemed to we like a very, very neeessary thing and I still think it was very necessary. I think it waa very, very well done by Mr. Henry Ford II. -216- Uic- Rminiscejecs or the, L. Fi^ckV' latex American Legion* Anderaoa, V,. C., 3¾, y{, 61, LI' -\rnols, 0. L., '/'-j, I? : Bank Hoi 1 Axy, 1 • *3, «A;. -lhj Bennett, 1. H., T>> 1-^, 137, iin, id, ll .,,-1¼¾, l>':-i>:-, I60-I6I, l'fg, 106-1^:, 1#, x;7-P(w» :-0? Be r/.ere, Mr. (Fraaeh l-\v,yer), 1-¼ Bills, liirr/, 5'» U6 Black, 1-¾ . (ueco mt.wt), t7 Black, Mr. (cut 'ineer), 60 Block, 1».f &6 Bogle, hoary, 1½, 1¾ Breach, E. R,, li>, L%S '•-*-¾* i'-l.-illi Briekej, M. 1>., 10S, 1?6-17*, ii)» 802, J?05 BrUus, !. a., 126, Li • Brooks, H., B$-i:6 Bro-.ju, liorjaidso^, i'i'.- Brownc-li, C. E., Brownirt;, A. J., 171, Br'bake ..100¾¾, 1?" Bu - 4«, Jjltn, 16J, i;, Barrett, Beury, 56 Bjrna, Aliwrt, bj>~6!*, Xiii Carerui , U. J , '36- '?7 Carlson, »v>or ;c, 123-12;' Cawio -.1*, W. £., 3.., -»:.': , f*5-U6, 76, 180-101 CairoJU, C, 10;-' Charles A. B>bard Co&pany* 78 Chase; National Bank, ' - Chevrolet ear, )2 Chicago Tribute «idt, 36-39 Cbr;/ s i>- r Corporation, fl--' Cleveland, Ifr., {^Jover^.icnt official), 171 Consolidated .aircraft Cowp-v^y, 173, 17s Cogens, James, in, SO-51, 1%5, Ife6, It.'.'' Coviinr, y. c, 1V3 Cral,-, B. J., 1»1, 73-7¾, 10?, 116, 129, 1¼¾ iUl, 213-21**- Crawford, John, 6J, lb& Cri'soe, L. D., fll, 21% Da)-litii-:;;r, R. C, 1 Davis, J. R,, lijl-lW, 1/?, 1/,/ Dearborn ltatepend'.;at, 36-87 Dearborn Realty It Construction Company, •3./ -217- fins leiaialseenees of Mr, lenaaa 1». Msekls- Index Defense Plant Corporation 171-172 Delavi^-ne, Theodore, 25 -26 Betrolt Bank of Coi&so-rco, 8,'- Betroit, tola-do & 1 ronton Railroad, 79-80, 96, 310, 1¾!, 1*3 Dlehl, Fred, to, 1x4-lie i Dodge* Brot-'iers suit., f'55 Dollfus, H.f 12y, 131-135 BOBS, H. C, .1¾¾-!¾ Duff's Business Collo.?*;, 1 Duffy, T., I?L Eastern Boldiag Company, h'j Erarjon6, if* H., hi Federal Bureau of Investigation, 16\>-I6l First 11 itionai Bank, 1¾-? Fisher, Crarl'-rs T., H;h Fisher Bod}! Company, hi Ford, Clsra Perry, Perclv.d, Lactv, relations v! t , i£r/ Beor?;ani aatioa, 19¾ >jf 201, 205, ''th Ford, S'-JiRi-.i E. adfldaistrattoi., 66, 73-76* x.^-1.4, iixa:.i» HM, 1 ft, IdV'cvV 191-195 Beauett, h. 11., nations nit;., 161-16¾, 16? Cruwi'ord, J., relatione viih, 6 < Beat- of, Ijj, 215 Ford, Henry, relatione with, m$ 6./- ivk>, U2, id •1*', Vfc. L - .1 '• Ford Wotor Company of England, Ltd., 126-12*], 12. -i'',. doverni'eat contracts, Vorld • >-;r II, U9i Health, 183-185, IS? Kansirv, 5, C, relations with', Kaatom, V. S., relations wis,., iSl IK, interest in, W6-151 Sorensen, C, 4., relations with., >l-,r, 1--1-1/% Unioi. ..legotlatioji, "iaterest Iri, i5Y-,l£>J Universal Credit Corporation, i.vL-.n-est In, -lv Ford, k.lo*nor Clay, 201, ^.n* Ford, Henry Accotoitlfe;, Ideas oa, 71-72 Administration, jJ-l.Tj, lOfe-110, l6:i, ifa, lQ-V}1}, 1¾-, i 1., -'J •:> 1..)^200, 2:,2-203, kl.,>, 215 Admin' *tratlv$ ideas, iUl-lih". American Legion, interest in, 155 Aviation, interest I >%~86 -ai8- fm mwXa&mmmm of Mr* Herann 1», lloekie Ford, Honry Bank Hoi day, ,1^33, IU5 Banking, interest ia, Banks, attitadu fcomri, 12-5 Bennett K. B., relations with, 13?-15«, I6J~1<*-', lSS-i! , 1 /.-1 ;* i;5, I9>20o, £-07*a>J Cale&f.;o Tribjgae suit, 3B»Ti Cleanliness, Interest, in, 24-25 Cost system, views on, £3 Dealer discount, c1.an.7e in, Ik '•• -lk L Dearborn Ituie^ndont, 06 -37 Dearborn Round Tnolv*, l8fc-l#5» 1.)3 Detroit, Toledo a IYQI.XOU Railroad, j$ Dod^c Brothers s dt, 65 Dollfus, H., relations with, 132 Expansion, idass ntwt, 101-103, K/-} li<> Expendi tores, control of, 210 Expertewtati ideas, >S~132 Ford, Edsel X>., relations witb, .¾, hi -/2, 1,."', t i-Sl-.-ok', i:>2-i:?5 Ford Motor Conpaoy of En-'land, Lid , hlk-11*5, ia .= -131 Glass aawifactiira, interest in, ..<> a©ver«B»*i*t contract©* World Mar II, l$% 16$, ITS Health, 185-1536, 2-11, 215 Rangier, E. C ., relations aj ta, 8:a-vl Kingsford, E. 6., relatione wila, /1 KnudscJi, V. S., relations v.?th, 6h Le^ai Department, abolitioa of, ilo -> 1. inland nuit, 81 iieboid, £, 0., relations with, 6V6f. Lincoln Motor Canrp*;t.), ourcfcnsr of, B'i Luncheons, H • .jhland Park, 36 Martin, P. E., relations with, 08-6-*, 1, 'a JU 4» say©, V;. B«, relations vitu, 8¾--85 Minor I ty stockholders, attituuc to-jar-J, 67 -6C Minority stock purchasw, l-M;, Model chaa.e, iJP.'h 3.1? Model '£ cb.an,'48, opposition to, /2-.-3 Momyf theories about, 88 Muscle Shoals, interest in, lOp-iiO NBA Code, views 0,¾, 1^-152, 155,» l;"o Peace Ship, interest in, ^5 Perry, Pereival, Loru, 12%-125, Ijo-1.-1' -Jr.. 1 y • 3 - •? -x Ford. Jteary' Pr--cta, fixing oi', ->;-A, lv>l, 1-¾% a*;' Prod wtlau, ideas on, fJ~jB PurcaastOUK, control of, 112-.( L.U Li1.- ( Racial virvs, 50-51, bY-J8 Rav sat'irial control, a -sir;' f->r, .A-100, 110 Records, utt i tcd-i toward, 7- •'^ Roor riulaatiaa, 1,21, So -½, u"> -66, 7^-75 Iteor wr.lzatio'i, 1.^7, .116-117, 1.1, Retail salea, 1d-?as auwt, Roos'iv. It, F. I),, .rt.iattCMis vtt: , lOl Sales, theorise ^U> x, lk -ihk Senatorial ca.-^paif a, f'.ervic«:, attitude to;.un.l, J r ( Sorecs*m, C, E , rolat'ona wiU, 60, lM», 136', i J3 i V- .1. fiteel /aaf act-..ard, 15'i-L';^, 15,' 36 ' Veterans, effiptoyme.-a of, 1¾ Wall 6trc--:t, ittit.-uH t-ivard, 87-% Willoi' Ran, " uteresr. Ln, 177, 1?.. Ford, Fonry II, 108, 1½, 186, 1>7-?;A, -P12, Pl6 Ford Votor Con] avial.'...T Airlines, 85 Flivver plane, 6*> Moor Hint, 0¾-.¾ Sto-.t, >-:ta.i Airj.lxu" Company, #j Branc. Operations, Domestic Aceo'intta/ crofted ,ros, 17-£1, > * <% S% 7¾ -YJ Aiu'iis, 32, 7^-7'- Dral>r aaa. rvisio;;, 7 -1.;, 2 Kansas C.lt;:, ;A Loar. Islanu, 3*1- Pi wtsbur^t, 2-6, C, If; •^;, 2*»-2;?, .• Production, 35-36 Re.-}r.j*ni.;atio.i, 1.,31, 3;>, 5./, T-?-7A RiC, -ftOftrt, Aj St, iouis, 2. 35-37 The- HealM sconces uf V.r. • «?.* va 1». Kocklr Fo?4 Motor Company Branch OjperattoaB, posesiic- Sales supc:rvt«'or, h~12, Ih, >• - ".1 Trnnto/t, ?5-3"> Eranc . Operations, Foreign Bsi;jiiw, 22) Bra>:U» 121139 CanvU, i2# Df&Tatfk, iihr, i;'6, lU:i E,;y/t, 13-3-l«*:> En/.Und, 5 j 122-131, 13'5, 1>, I... • *• > Eurootf, 63-6¾ Franc;, 6%, 12;?, IHi-i/tf, ihu Gernaa./, .122, 129-1.jo, 136-2.hr. Japan, ljl fc*xleo,13J Horvay, l4h- Or/*aniaatton and adwAnhstrahicu, l£i-iUN- Rcorsaais-at-Ion, 1J28, 12%-12,h Port ^al,'lUo Roa&nia, lUo Spain, i;i6, lU-'J Sveac u, 1^> Turkey, IkO Bn-llnaerli^: StyiJ,ti#; Ford Vodel A, 1-c-T, 101 Tahk enne, 1.-.6 Flnarie <.-••• .\cco a'it: n/r Coal system, 22-2$, 3»-35» 55-57, T-l-T?, Y6-7-:, -/-- -, |:N l l63-l#*, 213 Pejrreelattoii r&t e, iu- -1.., )j Keorgaui,, ttioa, 1. ,•<-:!., 33 l Acco latino sycttn, kh y.t 7:)-''.' AisUtln* DepirtMfii, 3? 9j~%h 75-¾, HI, ll/.lai, 1-^-lhj, 1W2 lb;,, i>.l'S-21h Bank Holl&v, 1½ Buv.etary <-onti*ol, 1JO-1-\V» 20, Cue . position, lM-lu ,., I')5'. Cnshlar's Depart. £nt, 5.. IK no lrseno.-.t I>.Jfx\rtra?rtt, JLiH Earning, '•-'12 -S£l- 1¾ Reainiscsnces of kr> Hsytaa&n 1». MoekJL« 1ox u isotor COUJ.-^- finance Fisanol&i criu 1^21, 53~ijU Govcrascnt, Concr&ei De^artaerft, 168, l?Ji?»lB3 Uovei.^»ent contracts, Worlo foar 21, CI 22f 16>-17;?, 1¾!-!,¾ GuarJian .Detroit ionn, 1^5 Le,:.*l lax Ixs par taunt, 76-5. toauufacturinf AcOw.uafc.tn," D< ;urt'*»'il, j, ' '* \ >, 55-57* Jl'W-t 76-73, :6-0, 12... • i,":i, i6j-i'A, rj • Minority Atock pave' cee, l^l.v, Re o r; ani t.; on, 1,1.;, 35^ ^-53 Ruotv.-aai sr^t-Ion, 1-,-.-1, , '(1-1(% Reor'.sni-ition, 1 ,-27, ll->-121 J Taxeu, 20-21, k6-h'ft j>2-53* 66-67.. 77* 7 , 3><% d, 1.---1''., r Industrial Belatiort,: tator, l$c, J»^^—15t.7, iol "hitiie ox' tit Overpass,'' i'37 Strive, Ijilf V>; Union negotiations, 157-15,,-, ibl Plant Protection, 153-15-'* Sociological Deparfcoeat, 15-17, ho, 68 Veteran £jK-'loyaent» 1¾1? V'a&oe & douro \,vs da,y, L;5-16 Legal VouiS Brot? are s J it, 65 Gc.ve»-n»oiit regulation?;, 161-16^ JIBA, 1U3-I52 Social Bcc ;rLt; , 16¾--!¾, 1;¾ Reor.>ni -ation, lv7> 117-11?? h iiicoin V I v i « i -.>:. Lincoln 1'otor CoAjaa;v, p-mshasr: of, 66, 8^-82 i»ianvifrvctur<. liod' parts, -)<'. uln::s, ~,>5, )7* idi, XJ. • Stecii, 95., 110 V--U blocks, l.?3i;, LU~t.V^ Vixla:,t* Industries HortlvllL*, 77 Organisation 4 Administration, 65-7*5 Branch 0, orations, Domestic, '•-12, 1¾, 17-2x, 3? M, vi—>>, -ass- Tbe Rerainlscences of Kr, Beiwn 1. 3o*%le Index Ford Motor Company Organisation & Administration Brancr« Operations, Foreign, L°l -1¼-.- Dearborn Realty fc Construction Com.Anj , 5\> Detroit, Toledo lb I ronton Railroad, ? ">-B: Executive office, 65.-67 Experimental raanufacturt:, -IV Finance, 4, 35, 3>-J+l, 1*6-53, 55-5,, 71-7-. ll';-12L, i Fordson Coal Company, 7'i Legal Departseut, 58, 117-llC Lincoln Division, 211-212, 216' Mic t,ma Iron, Land ft. Lumber Compatij » 77 -7¾ Officers & Directors, 18^-1^2, 1*5-V7 B-nnctt, i! H., 152-15';, 157-15'^ 16;-!¾., 199-20C, 202-209 Ford, Ideal B., 66--67, 7^> 10^-101, 1?3, 15?6-I.?/, I? Ford, Henry, 67-0¾, 1B8, l»ot UZ Highland Park, k-Q-kZ Kanzler, K. C., o^-^i Martin, P. E., 66-71» lkil, if.i», i>°. Sorensen, C. 67-71» 91-/2, .1.:-:.1, V% IT> = 16¾, 175, 178-17'.), 286-!>>*, I/J~1'0. Pvrcbasing Dcpart,«nt, 120, 202 Reor jan i ratio!; 1;/I9» 35, 1*6-53 1:¾!, 53-5/, 64-6¾, 71-76 1-.527, 115-lfii HM, 1***, 197-202% 205, = 1.46, 21.)-216 801.1¾: plant, 69-71 SaMa department, k, lko-\hk Stoel Mi Us, 2U-21SJ Tractor division, 67-6c Plant 3:v.l not r 1 rr -: Assembly line, Sl.-hland Park, 't'j-W* Bra net: operations, 3¾ Expansion, plaaniuc-, for, ^--j)t 1,0 -rn Glass plant, ;A->5 Orand Boilevard plant, 2*3 Ws- Steel Mill, World War II Aircraft Build 1¾* 171 «1llov Run, 17:;- -223 Beai*dec*-nc«is of r>« l^r.-r.-i I., Moefcle Ford Motor Coma-.ay Production Financial crisis, 1;21, % Fori, ly>?, V-o, 1VJ-IV> Fori Model A, X-JS'b, 120-:151 Model CI,auii-, IX!?, 11? Scnddallng OepartaK-at, 52» Seasoa-ii cfcanges, 12-15 Shutdown, ly?.0, 53-A Vor.l.; War I Jaissons, 37 Contracts, 3y Ea^le boats, 37 .nelsiets, 37 Liberty canines, 37-, :.' Vorlu War II B~±k> 172-181 Government eorr;rj«ctB, 165-17½, i£.?-Iv, }'^-,nc«J.UR), 171 Pratt & V-dtRfcj contract, 166, 17©, X?%, l?y Snperchar. ;cre, 173 Tanks, 16;>-I6l Truman Conreittec, 17,---181 Public Relat:.uns "Bum,cr hard;," 155 "£ • diday Swain*: Kour," 86-3? Troium Comal; tee, IJ^-lBj ?u cUw.in; Cl%ss, ;A~ >5 Ir.^utor; lev*.: is, ill -1,12 Machinery, Ul PpynentB, 3.11, Xi<'* Pprootwel rod-actions, 161 PoJ.,' cy, ill-115 ?r c*s, ;•(>->;', iiS-JjA- Heo:* jasii-ation, 1 •'.:7% 12-- S>a.->; pluia;, i.14.-11 fi St&&*» : ill Su.-mierK, ltj-ll'- Rav iiat^rial Coal, ',»6, L1> Class, .Hi.} Lumber, 77~T'J> -V.'A HO Tie Heminieeeneea of Mr. Herein L. Index Ford Motor Cowpz'ij Raw Katsirlal Rubbr.r, j6 Ftn-dlaudia, 80 Sales Advertising, lf> BranclK*, supervision of, h-l2t lh, 4/-2-;, Beater co^ taints, j Dealer development, U-ll, 13-1¾, 27-X Dealer discount, l>3->, 1*0-142 Dealer education, 7-U, 2S, 3:'.' -'j2 Dealer franchise, 5-7, 10-IT, l£«15, 2=3 Dealer or£»uination, %-8, i2-l»i, 2? -31 $y> Rebato, 1.)15, 5, 17 Korean, 123, 139 Model T, 1920's, '-,Sv3 Pr^ea, 35-36» 1)1-102, 108 Betall sales outlets, 1;., 27--,¾,4 Seasonal charges, 12-15 Service, 2C traffic Dealer ship.iente, 11-12 Detroit, Toledo & I ronton Railroad, 9^> 11¾ Freight eisari.es;, R Uroad Detroit, Toledo & Iron tor.,, 7 /4''.• Ford Motor Company of Canada, 12t. Ford Kotor Company- of Ewlaad, Lti , ±2'; • 15 L Fordscn Coal Company, 1, Fr-mcr, l*r. (accountant^ 3>, ^2, «5 Fuller, Kc-d, 3,; GaLarot, JoseiJi-, .:86 Ocner&I Motors florporati.cn, in, 101, iW. , 1¾, 21' -21 'lillesple, John, 106-L>7, 158 Goold, h'v. (Enflisi'^rana;. er), 122 Gregorle, £. lj6 Guard j art Detroit Bank, lkj-lk6 H-idac, Frank, 3U, 6.,-7J Barrin;,,-tc»i, Ja^es, 122-123 Hartaan, H. 1., 56, 5?.., 75 Hartncr, Charles, 7d, 15% Hawkins, H. A., 4, 25, U, M*, 55, 1**1 Heatfacota, Kr. (Sa/rlaad), -225- *Fm lesdniseenees of Mr. Herman 1. Jfoekle Index Henry Ford & Son, 6l, 63, 65, 67-6,, Henry Ford lr*dj Bc.iool, 135 Hi.-blanc Park State Batik, 38-8,- Hindenbr.r.; Line-, 13(J Hitlrr, Adolf, x2;s 137 Bocart, E, P., 116 Holies, Mr, (lav?.?r), 17 Hosi-er, Mr. (acco.intar.t), f/3, l32 Jo! n R. K.-iJr. Mi Lie, l*t Johnson, 11¾*, (imer-al, 151-152 Karaler, S. C., 69, '3.;-,1, 116, IU5, 211, 23 > Kelly, Vr. (S.?rvic:)f lh 153-15* Kennedy, Jobs., 38 Kingeforrt, K. fl.,76 , .,6, >»/ K15uf;ens3jiU,, F. 1., 38-',?, 46, W:, 33, 55» 72f 75, >' «' KaudsestV. 8., 3¾-, 3«, 55, jfr-Oi, <3~65* 98, 1BI Kroll, Richard, 6y Laeey, -\rtii xr, 51 Lr-., Join R., U>) Le., HI-inson & Company, 126-,127 LTlater, H. !"..., 39, 55-3b, 5U, 63* 72, 1T5-77, 115-116, il.-L t, Leiet?r, K. £., Mrs., 115 Leland, Ii., 60-:31 Lie, Alf;x, 63 Liebold, L. 6., 65, 67, 1()2, 186 Longley, Cliffords., 56, lU, 12.¾, 12?, i^5# 1½, 15- 1*¾ Lucking, A. G._, h& fcack, liunry, 2 •3 larquis, S. f. , Ite on, 40, 68 Kartisi, Horner, 157 Martia, P. K., 3S, 4c, 60-71, 1^2, 15¾, 1. -1,-2 Kartiadale, C, 22, 10;-, 121, lhj,, IS , 1.7 -1 £-•, 2i-~ Matford a/A, 133 Mab.is, S, F., C, 12V, 133» -'• MOMS s/A, 12j, 132-135 Mut2, ii; ?iar, 11.8-11. Mayo, W. 1., 48, 6$, 73.7:', ^-a5.. 53, 96, MS f'cCarvoil, R. •'»., 2,'-L KcCl.ir*, Ho;. D., Dr., Mellvra-, Mr., (flttsb..u-..;3, 16-17 Klciiia'an Iron, Land & Lumber Covtpau:* * 77-7^ Mfddletun, V. R., 143 Mills, Mr. (firutneti), 39 -226- The BearU;'.scenees of Kr. Beraart L. **o*}uu Index Kobb, Mr. (EndUad), Foffctt, ff. (auditor), 128 Korean, J. P.f Cosspany, 68 Motor Traders iaouraace Cvwapaajf, 6 ' Murpby, fra-jk, Governor, 15-; Muscle SI o*l«, I0'jt 110 Nusl., ¥>rw , 26, 2j- Rational S*ak of C^XTwrce, ihG-Vu Rational Recovery Aa^Lviet ration A-..fco-'»>- \l Cot •, 1^1-152 lelies, Claude, lkl-lte Old Colon,/ Trust Company, M>, % Osborne, Chasw, ?£•- Packard U'ator Car Coajwy, l&S Patterson, Robert, P., 17i Paul, Randolph, Kic- Peace Sti^, Perkins, Cy, • Parry, Pc.-rclval, Ladjr, 121? Perry, Porcival, Lord, 5>6fc, 12b->X£u, .ij)-133* 1> Pi pa, i. ; <., 66 Pittsbon;: , University of, 1 -2, 57? Pittsburr, . Coal Company, 1-2 Plaatiff, Gastot, 23 Pratt & K;,ltwzj 3lvis3o»-., O.-xttea Aircraft Ccsjpeuiy* 1T0 palatal, Mr. (accountant), Ui Reconstruction Finance Corporation, Ik'} Robert, H I,, 00, 12;, 13?, i£F; RocVjeliuai,, P., 1^0-ls4l Rolls-Royce Company, 166* Roos^wlt, F. B., l3l Roj -.r, B.vif.~l, '>9, 51 Rosenbr.v?. Mr. (auditor), 52, 57 Rausch,, R., 137, 1», 1/), 206 Ryan, V, A., kl, lib, 1½ Salat Francis Howe, ^7, 36, 72 Sap-'ro B'jlt, 0*3 Suterle:, Mr. (iftvtycr), 1)7 Sba.pl.ro, Jacob, 4b-½, ^ -227- ft** Beiainlsceneee of Mr, Bers&n h* Koefcle Index Sorensen, C. &.« 64-65, 67-71» 10;:, US Ho, L-'L, 1*'' , !-? 13k, xkl~lk2f l-+h, 16¾, 176, 178 -17 •', 136-1,-5, h$~20• Stearns & Citlwsr teaser Company, 7& Stout f'.etal Airplane Co».»any, fa'.' ''Siaida,. "/!.:nin.-? Hour," ,16 Suth.erlii.ad, Hr. {steel), 20? Todd, hr. (assistant treasurer), Thompson, Color.ol, k~{* 52 Thompson ft Black, *>6, 50-51, 55 56, 58, 71-72, 76 Tr&fford nesTiitf? Cosqiany, 60-61 Tr-snan, H. S., iSO-lBl Truman Couwittee, 17y-l8l Turrell, L. K„, 4, 37, 35-½, 55, 75 aw-cio, 157--15,, 161 United States Government Internal Revenue B^tartoeflt, 105-1.,6 Interstate- Comseree Co.m5ssiou, '{ Senat: Banking Investigation Cowaftt'jc, 1¾? Universal Credit Corporation, 8"-5 Vv'.r, P. S., 3, 3.6 White, E. B. 4 6-. Wibol, A. M., 125, 165-166, 168, 17-'-171, 186-168, 151-1:./2, 202 Mills, c. I., ao Woolensack, Mr, (Ptttsb .rgt*), 3 World •-ar II, 137-13*1 Wright y.l*ld, 166, 1?;, Zur Sch.nLed.2, T. W., i47