How Henry Ford foiled British bankers here
October 27, 2010 - This is the third in my series on Henry Ford, recounted from the 1938 Detroit Free Press columns by Iffy The Dopester (Malcomb Bingay.)
Titled "Who does Henry Ford think he is?" We first repeated the story of Ford rejecting the New Dealers early in the century, then came his $5 a day plan, then he won the fight with Seldon Company over rights to the gasoline engine.
Now, here comes more Iffy.
"After the World War (I) a syndicate of British bankers were coming over here to float a two billion dollar loan. Henry stated publicly they should turn around and go home.
The hint went out to banks all across the country that if they bought any of those bonds Henry might have to withdraw his deposits.
The Wall Street crowd figured it out this way:
They controlled about 80 percent of all the steel manufactured in America and about 75 percent of the rubber. When they got ready they could step on Henry just like you could step on a cockroach on the sidewalk. They would show what happened to lone wolves who didn't play ball, if you know what I mean.
He slowed down the bond issue. Wall Streeters asked how come? Henry said all he wanted was a fair field and no favors.
He'd like something like a blanket contract for five years duration for all the steel he would need at the going market price the day he ordered--and another one of the same kind for rubber.
To get him off their backs they had to take him to their bosom long enough to give him that agreement. And during the next five years our Henry bought more mines and ships and built glass plants and developed rubber plantations and blast furnaces so they could never step on him as you would a cockroach.
And, there was a time after the war when he bought out all his partners and there was that money panic and he was in need of 85 million dollars.
The House of Morgan sent a fire alarm squad out to "save" the Ford company because they didn't want other businesses to go down like a row of dominoes.
Wall Streeters offered Henry the money, but said they had to have their representative on the board. Henry rejected that.
The weeks passed and Henry didn't go out of business. In a few months he was in a more sound financial position than ever. How he worked it was a financial mystery of the age. How?
Well, the way I get the yarn, Henry sent agents all over the Country to the smaller banks of the crossroad towns and offered them deposits of Ford money, which they were very glad to get indeed.
"But," the agent would say, "if we give you a deposit we will expect, of course, a line of credit for our dealer at your bank."
So the agent he would go to the dealer and tell him he would have to buy more cars and that there was that line of credit for him to draw on at the village bank.
He had to sell those additional cars and the millions rolled in to Dearborn without benefit of Wall Street."
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Back to the present as Jottings contemplates more Henry Ford experiences.
The lady ruler in Germany declared "multiculturalism has failed." She said the Germans aren't reproducing enough to stay a majority, that imports, legal and illegal, are taking hold.
That certainly should be taken as a warning for loose-bordered America.
Jim Sherman, Sr. is president of Sherman Publications, Inc. He has penned "Jim's Jottings" since 1955.