Monopoly on Wheels: Henry Ford and the Selden Automobile Patent

VIII. Trade War

VIII Trade War THE INDUSTRY-WIDE battle outside the courts began with the organization of separate trade associationsand the emergence of the first unified and stable alliance of independents against the Selden licensees. The sharp clashes between these camps were not without constructive achievements o£ enduring significance, for the trade association functions of the rival bodies early institutionalized the pattern of voluntary cooperation among competing automobile firms. But recurring skirmishes along a wide front, which saw the A.L.A.M. bringing legal actions against independent dealers and owners, underscored the disruptive character of the struggle over the Selden patent. Looming above such developments was the boldness with which Henry Ford took his case before the bar of public opinion and transformed the humdrum routine of a patent suit into an exciting trial by publicity. In all of the great industrial conflicts over patent rights in American history, nothing parallels Ford's shrewd instinct for marshaling popular feeling to his side. As the medium through which the Selden patent case was dramatized for a national audience, Ford gained a wider reputation, and it was during these years that the legend of his unorthodox individualism shone with its first luster. As yet, this reputation was chiefly limited to the automobile industry, but there is no question that the image of the self-reliant and knight-errant industrialist began to take shape during these years. 1 The factional alignment in the motor car industry was precipitated when the A.L.A.M. suddenly and unexpectedly excluded the independents from the New York automobile show. Since 1900, when the first national auto exhibition was held at Madison 169 Monopoly on Wheels Square Garden, the New York show had been conducted under the joint auspices of the National Association of Automobile Manufacturers and the Automobile Club of America. By the fall of 1903,a majority of the firms in the N.A.A.M. were A.L.A.M. members. Yet many independent manufacturers, among them the Ford Motor Company, displayed their machines side by side with those of licensed producers at the show held in January, 1904. The New York show, which drew dealers from all sections of the country was of strategic commercial importance. After the A.L.A.M. was organized, the balance of power in the N.A.A.M. passed to the licensed forces. The president of the N.A.A.M. in 1903 was Milton J. Budlong, head of the Electric Vehicle Company, and a first vice-president was Charles Clifton, treasurer of the George N. Pierce Company of Buffalo, New York, who in 1904 succeeded Frederic L. Smith as president of the A.L.A.M. The show committee was controlled by members of the Selden association. In January, 1905, the A.L.A.M. obtained an exclusive lease of Madison Square Garden for the motor shows of 1906 and 1907, with an option on a two-year extension of the lease. This move blew up a storm of protest from the independents , but they were unable to dislodge the licensed makers from their dominating position in the N.A.A.M. It was not long before George H. Day announced that the New York show scheduled for January, 1906, would be restricted to licensed makers and importers.1 The industry was divided into two camps, but the independents, many of whom had withdrawn from the N.A.A.M., were unorganized. John S. Gray, president of the Ford Motor Company, condemned the licensed association's coup as coercion and predicted that it would hasten the formation of an unlicensed counterpart. "In the event of other independent manufacturers organizing," said Gray, "we would give them all possible encouragement." Several anti-Selden makers in Detroit hinted that "there might be important developments on the other side of the fence." Indeed , a large number of firms which refused to acknowledge the validity of the patent stood ready to make common cause with the Ford Motor Company. With three other independents (the National, Premier, and St. Louis companies), Ford took the initiative in organizing a trade association. James Couzens be770 vni Trade War came chairman of a steering committee, and on February 24, 1905, at a secret meeting held at the Ford plant in Detroit, the American Motor Car Manufacturers' Association was formally organized. All unlicensed manufacturers were invited to join. The headquarters of the A.M.C...