Monopoly on Wheels: Henry Ford and the Selden Automobile Patent 0814335128, 9780814335123

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MONOPOLY ON WHEELS

GREAT LAKES BOOKS A complete listing of the books in this series can be found online at wsupress.wayne.edu Editor Charles K. Hyde Wayne State University Advisory Editors Jeffrey Abt Wayne State University

Susan Higman Larsen Detroit Institute of Arts

Fredric C. Bohm Michigan State University

Philip P. Mason Prescott, Arizona and Eagle Harbor,

Michael J. Chiarappa Western Michigan University Sandra Sageser Clark Michigan Historical Center Brian Leigh Dunnigan Clements Library De Witt Dykes Oakland University Joe Grimm Bkomfield Hills, Michigan Richard H. Harms Calvin College Laurie Harris Pleasant Ridge, Michigan

Dennis Moore Consulate General of Canada Erik C. Nordberg Michigan Technobgical University Deborah Smith Pollard University of Michigan-Dearborn David Roberts Toronto, Ontario Michael O. Smith Wayne State University Joseph M. Turrini Wayne State University Arthur M. Woodford Harsens Island, Michigan

Thomas Klug Marygrove College

MONOPOLY ON WHEELS Henry Ford and the Selden Automobile Patent

WILLIAM GREENLEAF

With a New Introduction by David L. Lewis

w Wayne State University Press Detroit

Paperback edition © 2011 by Wayne State University Press, Detroit, Michigan 48201. All rights reserved. No part of this book may be reproduced without formal permission. Manufactured in the United States of America. 1514131211

54321

Library of Congress Cataloging-in-Publication Data Greenleaf, William, 1917-1975. Monopoly on wheels: Henry Ford and the Selden automobile patent / William Greenleaf; with a new introduction by David L. Lewis. p. cm. Includes bibliographical references and index. ISBN 978-0-8143-3512-3 (pbk. : alk. paper) 1. Ford, Henry, 1863-1947—Trials, litigation, etc. 2. Selden, George Baldwin, 1846-1922—Trials, litigation, etc. 3. Patent suits—United StatesHistory—20th century. 4. Automobile industry and trade—Law and legislation—United States—History—20th century. 5. Automobiles—PatentsHistory—20th century. I. Title. KF228.F667G74 2011 346.7304'86-dc22 2010039050 (oo)

To ELLEN

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Contents FOREWORD BY ALLAN NEVINS PREFACE INTRODUCTION BY DAVID L. LEWIS

ix xiii xv

PROLOGUE: Roots of a Legend I. Beginnings II. The Long Vigil III. Mr. Whitney Comes to Hartford IV. The Opening Battle V. David and Goliath VI. A Mountain of Evidence VII. The Tournament of Motors VIII. Trade War IX. Argument and Decision X. Path of Progress

3 5 27 49 71 95 123 145 169 197 233

NOTES BIBLIOGRAPHY INDEX

255 275 291

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Foreword A Cause Celebre of Industry

I

t is seldom indeed that a story as dramatic as this, a narrative as fascinating, offers so much material of analytical value for the student of history. The author is concerned primarily with one of the numerous legal duels over patent rights; but he does much more than supply a case parallel with Cyrus W. McCormick's battle against Obed Hussey, of George Westinghouse's against Gardner & Ransom, or that of the Thomas A. Edison companies against the Joseph Swan companies. In three respects his book offers more important values. He furnishes the most expert and comprehensive account yet given of the birth and development of the essential elements of the automotive industry. In doing this he presents a thoughtful interpretation of the processes inherent in invention and in technological progress as applied to industry. Finally, he gives us an able psychological study of two unusual men: one, George B. Selden, a striking figure; the other, Henry Ford, as remarkable as anyone in his generation. Most inventions have deep and intricate roots, a fact one famous innovator summed up in the remark: "Our ancestors were all very dishonest; they stole all our best inventions." The pioneer inventor is usually ahead of his time, and to see his inspiration made fruitful he or his successors must wait until social, economic, and mechanical developments present a situation in which the experimental idea can be given practical shape to meet a clear demand. Mr. Greenleaf in this compact history shows what a wide array of talents had to be fused to form the mere foundation for the invention of the automobile: the talents of the Belgian Lenoir, the Englishman Brayton, the German Otto, the Frenchman De Rochas, and others. Selden, who was much ahead of his time, IX

Foreword

had the patience to wait, but not the persistence or industry to continue experimenting. This book contains a very sympathetic as well as detailed record of his actual accomplishment; but it has to record the fact that he never got beyond a crude embodiment of his first general idea. As the author puts it, "Reliance upon language rather than genuine development was to be characteristic of Selden." The environment had to mature, collective effort as well as individual insight had to elaborate the technological equipment needed, and then great difficulties had to be surmounted and heavy risks taken to give the new devices a sound economic application. Mr. Greenleaf so tells the story as to illumine the whole general process of invention. At every step he offers fresh and authoritative detail. He shows how the gifted Siegfried Marcus failed because his Viennese community was hostile; public sentiment stopped his noisy vehicle. He shows how the still more gifted Brayton met the requirements of power without satisfying those of space and weight. He explains how the advances of Benz had to be united with those of Daimler. As he emphasizes, it was because the time was ripe and not because any substantial exchange of information took place, that in the late 1880s and early 1890s scores of inventive promoters like Daimler and Benz, Panhard and Levassor, Duryea, Haynes, and Olds appeared; fifty in one time and country, as Hiram Maxim testified. On their heels came the industrial organizer, as the author tells us in his chapter entitled "Mr. Whitney Comes to Hartford." The eager financier took pains to arm himself with the best patents available; and with the emergence of well-capitalized patent-holders the giant Monopoly stalked on the horizon, crushing small independents under its heavy boots. It is at this point in the narrative that Mr. Greenleaf's presentation of Henry Ford becomes a dominant element. It is attractive as well as able, for here we have the Ford of the earlier and most idealistic periods. Always a complex man, Ford, of course, had mixed motives in playing St. George against the dragon. His pride was wounded by the allegation that the fruit of his brain and skill, his ingeniously devised car, should be stigmatized as the offshoot of another man's thought. His feelings were hurt by x

Foreword

the arrogant rebuff the Selden patentees gave his and Couzens's request for shelter. He saw his whole future prosperity at stake. Nevertheless, that he was largely actuated by public-spirited motives is undeniable. The man who defied the Selden ring was the Ford who earnestly wished to give farmers and workingmen as usable a car as the banker owned; who intended to break down the monotony, loneliness, and servitude to distance that had marked rural life since his boyhood; and who felt a deep thirst for independence, for he said that his chief ambition was "to be free—to be a free man." It was the Ford who had been taught by the Populists, the muckrakers, and the early Progressives to detest monopoly. It was the Ford of the five-dollar day and the welfare or "sociological' department at the Ford works; the Ford of the "Peace Ship"; the Ford who employed great numbers of negroes, gave paroled convicts a new chance, and hired the crippled and defective by the thousands. Mr. Greenleaf is not uncritical, but a sympathetic impression of this self-made leader, as of Selden, disengages itself from his pages. Yet the core of the book remains its account of a hard fought cause celebre, one of the great trials of our industrial history. No piece of patent litigation has greater suspense of more histrionic elements. At first the odds seemed so heavily against Ford that we follow the successive steps anxiously. The Russell House luncheon, where he and Couzens defied the monopoly and cast down the gage of conflict; the long-range artillery duel of newspaper advertisements; the subtle enlistment of public opinion; the marshalling of evidence; the courtroom grapple, where Ralzemond A. Parker, of rumpled clothes and bulldog tenacity, closed with the Selden attorneys and the hired experts; the initial defeat and undaunted renewal of the attack; the second trial, the feat of the attorney Frederic R. Coudert in confuting the chief opposition witness out of his own mouth, and the triumphant finale and ensuing celebration—all this is a tale of unflagging interest. Mr. Greenleaf, thorough in research, vigorous in style, has given us the definitive treatment of a significant and previously cloudy episode. ALLAN NEVINS XI

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Preface

T

he story of the early motor car industry in the United States is inseparable from the shaping influence of the Selden automobile patent and the pioneer builders who took their stand as champions or opponents of the broad Selden claim to the invention of the gasoline automobile. The formative period of the industry is also inseparable from the emerging legend of Henry Ford, who gained his first luster as an individualist by his central role in battling the Selden patent. This volume, which attempts to set down the first full-scale narrative of this celebrated patent controversy, is primarily a study in industrial and technological history. The book had its origin in 1952, when I went to Detroit as research associate of the Ford Motor Company History Project sponsored by Columbia University and executed under the directions of Allan Nevins. Some of the material in the present study appeared in different form in the initial volume of the Ford history, published by Charles Scribner's Sons in 1954 under the title Ford: The Times, The Man, The Company. It is a pleasure to acknowledge my debt of gratitude to Dr. Nevins, De Witt Clinton Professor Emeritus of American History at Columbia University, now senior research associate of the Huntington Library, San Marino, California, and Frank Ernest Hill of New York City, both of whom gave warm encouragement when this manuscript was being prepared as a doctoral dissertation accepted at Columbia University. Various persons and institutions have provided me with valuable help. I am thankful to Henry E. Edmunds, archivist, the Ford Motor Company Archives, Dearborn, Michigan, and his staff, for giving me access to a veritable storehouse of manuscript and published materials bearing on Ford history. I am obligated to the following persons and collections in Detroit: at the Detroit xm

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Public Library, Mrs. Elleine H. Stones, former chief of the Burton Historical Collection, Mr. Robert E. Runser, chief of the technology department, and Miss Maud Payne of the Automotive History Collection, which has a matchless file of early motor trade periodicals; the law division of the Wayne State University Library; and the patent department of the Automobile Manufacturers Association. I am also under obligation to Dr. F. Clever Bald, assistant director, Michigan Historical Collections, University of Michigan, Ann Arbor; Ralzemond D. Parker of Washington, D.C., and Grace E. Parker, of Royal Oak, Michigan; T. V. Quarnstrom, patent officer, American Steel and Wire Division, United States Steel Corporation, Cleveland, Ohio; the Buffalo Public Library and the late Professor Ralph C. Epstein of the University of Buffalo; the New York Public Library; William V. Connell, clerk, United States District Court for the Southern District of New York; the late Frederic R. Coudert of New York; the Hartford Public Library and the Connecticut State Library; and, in Washington, D.C., the United States Department of Justice, the Smithsonian Institution, the National Archives, and David C. Mearns, chief of the manuscripts division, Library of Congress. To the late Hermann F. Cuntz of Washington, D.C., who patiently answered inquiries about events in which he played a role, goes a special acknowledgment. I alone am responsible for any errors of fact and for the opinions expressed in this book. Special thanks go to my wife, Ellen Chanin Greenleaf, for her helpfulness, patience, and wise counsel. WILLIAM GREENLEAF DURHAM, NEW HAMPSHIRE JULY 15, 1960

xw

Introduction DAVID L. LEWIS

K

udos to the Wayne State University Press for reprinting William Greenleaf's definitive book on the Selden patent suit, which a century ago liberated the auto industry and became a foundation stone upon which Henry Ford's folk heroism was built. Copies of the original book, selling for $5.95 in 1961, are commonly priced at more than $800 on the used-book market. One seller is asking $1,044. Why such high prices? The question cannot be answered with certainty. One driver may be law firms engaged in patent litigation that might find instructive Greenleaf's perceptive analysis of legal patent issues. There are, of course, collectors willing to pay almost any price to round out a collection. Continuing interest in Henry Ford may be another factor. In any event, the reprint makes Monopoly on Wheels affordable to a much wider audience. The book grew out of Greenleaf's 1950s research in the Ford Archives, which led to the two best chapters in Allan Nevins's 1954 book, Ford: The Times, the Man, the Company. Nevins, a Columbia University professor and twice a Pulitzer Prize winner for history, was Greenleaf's doctoral chairman. His protege's research and writing doubled as a dissertation and the basis of his book. The thesis was "one of the outstanding dissertations of the Columbia History Department," Columbia historian Richard B. Morris wrote two decades after its completion. At first glance a treatise on a patent suit may not seem a compelling read, even though, as Nevins observed, it is based on a "wealth of colorful material" and records "one of the great trials of America's industrial history." Greenleaf, making the most of these assets, wove the suit's strands and personalities into an interesting, even suspenseful, book. xv

Introduction Reviews for Monopoly on Wheels were highly favorable. The Journal of Economic History's reviewer introduced his essay by stating, "I begin by seconding Allan Nevins's statement in the Foreword [that] 'this is a tale of unflagging interest. Mr. Greenleaf, thorough in research, vigorous in style, has given us a definitive treatment of a significant and previously cloudy episode.'" The Journal also described the book as being "dramatic and wonderfully revealing of the history of the automobile's 'invention' and early production, as well as of the oddities of the Selden case and patent law." Technology in Culture's review noted that "Dr. Greenleaf's research has been exhaustive . . . the material he has produced is impressive . . . he has given us a useful and lucid account of an important event in automotive history." The Business History Review described the book as an "admirable account of the litigation." The Mississippi Valley Historical Review observed that it was an "excellent monograph" [and] "provides a provocative framework for the record he [Greenleaf] has painstaking assembled." There was criticism. Harold G. Vatter's Mississippi Valley critique accuses Greenleaf of having a "pro-Ford perspective." Automotive historian John B. Rae, in Technology and Culture, questions some of Greenleaf's inferences and suggests that the book should have an additional subtitle: "The Case for the Defense." Rae also observes that the author, in discussing the technical aspects of the case, is sympathetic toward Ford, then adds that his criticisms "are admittedly details, perhaps minor." First, I offer a summation of the suit and its contribution to Ford's image—especially that of a "magnificent individualist"—then commentary on a self-effacing author described by former colleagues as a "great academic," "a traditionalist teacher," and a "devoted father." The suit grew out of an 1879 patent application filed by a visionary Rochester, New York, attorney, George B. Selden, for a road vehicle he had designed but not built. In anticipation of a future auto industry, he cleverly delayed the patent's issuance for sixteen years by filing additions and changes that took advantage of technological developments in the intervening years. His claims were valueless, of course, until motor vehicles were being built and

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sold in the United States. Finally, in 1895 he obtained a patent for a "road-carriage" covering all gasoline-powered vehicles designed since 1879 and manufactured, sold, or used in the United States during a seventeen-year period ending in 1912. In 1899 Selden assigned the patent to the Columbia & Electric Vehicle Company (reorganized as the Electric Vehicle Company in 1900) for $10,000 and a percentage of whatever royalties could be collected. Suits were filed against five automobile firms, including the nation's largest auto producer, Winton Motor Carriage Company. By March 1903, all of the defendants had been intimidated into acknowledging the validity of the patent and negotiating settlements. Ten other auto manufacturers, believing further resistance useless, made a deal with Electric Vehicle to organize a patent-pooling combination called the Association of Licensed Automobile Manufacturers (ALAM). In the summer of 1903, the association's twenty-six members agreed to pay Electric Vehicle a royalty of 1.25 percent of the price of each car sold. The company sent one-fifth of the fees to Selden, turned over two-fifths to the ALAM, and kept two-fifths for itself. Each party profited handsomely. The ALAM was given the privilege of selecting the manufacturers to be licensed under the patent and those to be sued. The latter, presumably, would be put out of business. In February 1903, four months before Ford Motor Company's June 17 incorporation and again in June or July (exact date unknown), Henry Ford and his associates approached the acting president of the ALAM seeking a license for their proposed enterprise. They were rebuffed, the ALAM executive expressing a lack of confidence in Ford's ability to meet the association's manufacturing standards and qualify as a creditable member of the auto industry. The rejection was followed by an ALAM advertisement in the Detroit News that characterized its twenty-six licenses as "the pioneers of the industry" and warned the makers, sellers, and buyers of unlicensed cars that they would be liable to prosecution for patent infringement. Ford's defiant advertising promised protection against suits that might be leveled against its dealers and purchasers. In addition to describing the company's founder xmi

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as an eminent designer, the ads claimed that Henry Ford also was a pioneer and inventor. "Our Mr. Ford made the first Gasoline Automobile in Detroit and the third in the United States," the ads declared; both assertions being untrue. The patent battle was to have an interest transcending the industry. The rising tide of Progressivism and hostility to special privilege loomed in the background. Now, as the manufacture of motorcars began to promise large profits, the Electric Vehicle Company and the ALAM, said to represent resources of $70 million, were attacking an automobile company that had just started operations with a working capital of $28,000. The public relations implications of this situation were not lost on Henry Ford, who stated that "he would give the 'trust' $1,000 if they would advertise his business by commencing suit against him." Ford's views were vindicated by the press's and public's view of the suit. News stories alluded to the ALAM as the "automobile trust," and many contemporary motorists believed that every time Selden added its royalty to the purchase price they were being "flimflammed, cheated, and robbed." Henry Ford and the Ford Company, on the other hand, were frequently pictured as underdogs fighting for their very lives. The Selden case was a suit in equity, and once begun, it was conducted in a routine and undramatic fashion. The evidence was highly technical, and for several years only sporadic reports on the suit's progress appeared in the general and even the trade press. Ford's attorney was partly responsible for the paucity of news, refusing to permit the company to furnish information to the press for fear of supplying legal ammunition to the Seldenites. The principal source of anti-Selden propaganda, therefore, was a trade group, the American Motor Car Manufacturers' Association (AMCMA), established in 1905 by Ford and nineteen other unlicensed firms. By 1907 all the evidence had been submitted to the court, and the Ford Company itself felt free to supplement the trade association's efforts. During the trial, the main exhibits provoked the most publicity. In 1907 the Selden forces had constructed a motor buggy to demonstrate that a car built in accordance with the patent's specifications would run. The defense, to refute Selden's claims to originality, built a machine xom

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with an engine resembling one patented by an Englishman in 1869. The cars were demonstrated to reporters, after which each side praised its car and deprecated its opponent's. In a typical exchange in Motor Age (which pointed out that it was running both stories "just as received so the dear reader may take his choice") the Selden group said that its car "was reversed, turned around and backed up several times much to the surprise and humiliation of those who have belittled the work." The adjacent Ford version said that its car traveled four times as far and fast "as what has been termed the Selden machine" and offered to race the Selden car over fifty miles, giving it a forty-five-mile head start. Ford also said that the Selden buggy started only when facing downhill and that it always had to be pushed into position. After these volleys, the case remained in limbo for two years. Finally, in September 1909, the federal district court in New York decreed that every manufacturer, importer, and user of unlicensed cars infringed on Selden's patent and was subject to consequent penalties. Henry Ford immediately announced that he would appeal. His resoluteness was not shared by the majority of his AMCMA colleagues. Within a month, eight of the organization's forty-three members defected to the AT.AM. In February 1910, with thirty of its members now in the licensed camp, the independent association folded. For all practical purposes, Ford now stood alone against the industry. By this time, however, the firm was Detroit's largest and was a king-size adversary. In 1910 the ALAM launched a nationwide advertising campaign "to educate the public" against the folly of buying an unlicensed vehicle. As in 1903, Ford also took his case to the public. "It is said everyone has his price," an ad said, "but I can assure you that while I am at the head of the Ford Motor Company, there will be no price that would induce me to permit my name to be added to those of the seventy-two varieties [the number of companies in the ALAM]. The patent," Ford added, "was a freak among alleged inventions," and he offered a bond to each buyer backed by the $12 million assets of the company and its bonding company. As to the suit's effect on Ford sales, the evidence is contradictory. Ford, in his 1922 biography, My Life and Work, said that fewer xix

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than fifty buyers asked for bonds to cover potential losses. In 1926, however, Ford's sales manager, Norval A. Hawkins, testified that the suit greatly increased sales resistance and that some dealers were so discouraged that they left the company. Ford's defiance of the patent was considered heroic. "There's a man for you, a man of backbone," typically declared a 1910 Detroit Free Press editorial entitled, "Ford the Fighter." "Of the case behind him," the Free Press continued, "lawyers are more able to talk, but as a human figure he presents a spectacle to win the applause of all men with red blood, for this world dearly loves the fighting man." The appellate court's decision was handed down on January 9, 1911, and Ford's victory was total. Dozens of telegrams and letters poured into company offices, many from opponents as well as from friends. Every automobile man in the country had the name "Ford" on his tongue. The decision was reported in most of the nation's papers, and Ford, for the first time, was front-page news in the Detroit and trade press. On all sides he was lauded as a giant-killer, as a symbol of revolt against monopoly, and as a magnificent individualist. The victory was of tremendous advertising value. Ford later said (and James Couzens, the company's secretary, and Hawkins agreed) that no one factor publicized the company and its products as effectively as the Selden suit. As noted earlier, the suit was a foundation stone, along with the Model T, mass production methods, and five-dollar day, upon which Ford's reputation—and particularly that of a rugged individualist—was built. Publicity at the conclusion of the case was but the beginning. Over the decades books and articles continue to comment on the suit in terms highly favorable to the automaker. In addition, the Ford Company, recognizing the public relations value of the case, has issued press releases, run advertisements, and aired radio and TV commercials pointing with pride to the founder's role in freeing the auto industry. As pugnacious as Ford was stubborn, James Couzens, Ford's principal partner, who controlled 10.5 percent of the company's stock, perhaps deserves equal credit for pressing the Selden suit to a victorious conclusion. Opposed to the ALAM from the outset, he never wavered in his determination to fight the case to the

Introduction

finish. Couzens also wrote or signed most of the early anti-Selden advertising and publicity. But his role in the suit's outcome was minimally recognized either in 1911 or afterward. Henry was handed the flowers—and kept them. The Selden win was one of Ford's sweetest. Although the victor did not dance a celebratory jig, as he did when acquiring full ownership of his company, he basked in the glow of effusive tributes paid him at posttrial banquets. In time Ford liked to believe that Selden was victim rather than villain. "He was a decent old fellow," he remarked after describing a meeting with his former opponent. Selden remained convinced that his patent entitled him to be regarded as the father of the automobile. "Morally the victory is mine," he said on his deathbed in 1922. The Selden patent casts a long shadow. In 1990 it was cited as one of "ten patents that changed the world" in an American Heritage article, "The Power of Patents," by Oliver E. Allen. Other patents designated as "world changers" involved the cotton gin, sewing machine, barbed wire, telephone, light bulb, machine gun, xerography, and transistor. Monopoly on Wheels focuses on issues of invention, patents, and technological progress, as well as the auto industry. These issues have changed since the Selden suit's resolution a century ago and the book's publication a half-century later. For one thing, the lone inventor has become a less important economic force over the decades. Inventions increasingly emanate from research and development laboratories of large corporations, universities, and government agencies; individual accomplishment is often difficult to measure. For example, there is no single inventor of the personal computer, the cellular telephone, or the iPod and similar devices, nor has anyone remotely attained Thomas Edison's reputation. Ironically, Edison's Menlo Park (New Jersey) industrial research laboratory, the world's first, played a primary role in shifting invention from individual endeavor into highly organized, large-scale activity. When publicized, lone inventors often are portrayed as victims of corporate greed, as was Henry Ford. One such man was Edwin Howard Armstrong, who forced RCA, AT&T, and other xxi

Introduction broadcasters and radio manufacturers to pay royalties for the use of his FM patents. Another was Robert Kerns, inventor of the intermittent windshield wiper, who after a lengthy court battle, squeezed royalties out of Ford and other automakers. Commenting on Kerns in his 1993 New Yorker essay, "Flash of Genius," John Seabrooks, draws on the Selden suit and quotes Monopoly on Wheels. So does Seabrooks's 2008 book of the same title. Patent controversies reminiscent of the Selden suit remain with us. In the 1980s, French and American teams battled over which deserved credit for discovering the retrovirus associated with HIV/AIDS. At stake was a lucrative patent for blood tests to detect the disease. In 1976, when Kodak introduced an instant camera, Polaroid filed suit, claiming infringement on its instant photography patents. After a fifteen-year court fight, Kodak was found liable for patent infringement and ordered to pay Polaroid $925 million. In 2010, Nestle filed patent infringement suits against European firms introducing coffee pods to compete with the plantiff's Nespresso coffee machine, a system protected by 1,700 patents. Firms also continue to file patent applications for inventions long before they can live up to their claims. The Department of Justice filed suit against Microsoft after the firm announced "vaporware products" (software yet to be proven) to dissuade consumers from buying or adopting competing software. Aside from blurbs on book jackets, little has been written about William Greenleaf, "a modern-day Thomas Carlyle," as described by Stephen Gilmore, a University of New Hampshire colleague. "He neither sought publicity, nor revealed much of his inner self," observed another colleague, Hans Heilbronner. "He hid his light under a basket." Thus a biographical sketch of the author seems apropos, the more in that 2011 marks the one hundredth anniversary of the Selden patent's resolution and and fiftieth anniversary of the publication of Monopoly on Wheels. As it happens, I became slightly acquainted with Greenleaf in 1952, when he and I worked in the Ford Archives, located in Fair Lane, the former Ford mansion in Dearborn, Michigan. I knew that he was researching the Selden patent suit. He knew that I, as

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a member of Ford's news department, was writing feature stories and playing host to journalists in advance of the company's 1953 golden anniversary. But we never did more than nod or utter a cursory "good morning" to one another. My lasting impression of him is of a man of serious demeanor in his mid-thirties (ten years my senior) absorbed in notetaking or typing, oblivious to all else. Upon reading this sentence to a Greenleaf colleague, Charles Clark, he exclaimed "You've got him!," an opinion seconded by Robert Mennel, chairman of UNH's Department of History from 1974-77. Greenleaf was born in Brooklyn on July 1, 1917. His father, Harry Greenblatt, born in Germany in the late 1870s, emigrated to the US around 1902. His mother, Annie Goldstein, born in the mid-1880s, lived on a farm in the Russian Steppes before her family emigrated to the US. The couple had four children: a daughter who died young, followed by Charlie, born in 1910, Minerva (Minnie) in 1912, and William. Annie and Harry died in 1926 and 1940, respectively. Greenleaf was educated in New York City public schools and in 1942 graduated from City College of New York, where he demonstrated exceptional proficiency as a writer. When he tried to enlist in the army early in World War II, he was initially rejected because of nearsightedness, a consequence of a childhood disease. Subsequently accepted for army service, he was assigned in 1943 to Supreme Headquarters Allied Expeditionary Forces (Eisenhower's command) in London. While with SHAEF he conducted interviews and served as a radio announcer for military radio. Following discharge in 1946, he enrolled at Columbia University on the G.I. Bill, and earned master's and PhD degrees from Columbia in 1948 and 1955, respectively. His mentors were Allan Nevins and Richard Morris, the latter also one of America's foremost historians. In 1952, Greenleaf married New Yorker Ellen Nora Chanin, the daughter of Leo and Sophie Chanin. That same year she received her MD from Columbia University's College of Physicians and Surgeons, an uncommon achievement for a woman in midcentury America. In addition, she was one of the first Jews to graduate from "Columbia P&S." The couple had four sons: Peter, David, xxm

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Eric, and Allan, born in 1954, 1955, 1956, and 1959, respectively. In 1952 Greenleaf also changed his last name from "Greenblatt" to "Greenleaf," blatt meaning "leaf in German. His given name last appears in print as an editorial assistant in the Encyclopedia of American History's 1953 edition. Greenleaf was a full-time Columbia researcher from 1952-56, working first in Dearborn, then in New York City. As noted earlier, he furnished two chapters—"The Shadow of Monopoly" and "No Monopoly"—for the first of Nevins's three books on Ford. The preface of this book acknowledges him as a "research assistant" who contributed "understanding, accuracy and constructive suggestions." He is credited as a "research associate" on the title pages of the second and third volumes, entitled Ford: Expansion and Challenge 1915-1933 and Ford: Decline and Rebirth 1933-1962, published in 1957 and 1962. The preface to the second volume notes that Greenleaf's "careful research, constructive vision, and able written reports on diverse sections of this history have been invaluable." In the third volume, he is thanked for his "invaluable services." Greenleaf served as an assistant professor of history at Colorado State University in Fort Collins from 1956-58. The latter year he became an associate professor in the Department of History at the University of New Hampshire in Durham, New Hampshire. He was promoted to full professor in 1964 and was later a visiting professor at Columbia in the fall of 1966. In 1964 Greenleaf authored a second acclaimed Ford-related book, From These Beginnings: The Early Philanthropies of Henry and Edsel Ford, 1911-1936. Its reviews were as favorable, if not more so, than those of Monopoly on Wheels. An on-and-off Ford Foundation consultant between 1955-61, Greenleaf also authored a manuscript entitled, "The Ford Foundation: The Formative Years." It was neither published nor made available for Nevins's [and Frank Ernest Hill's] second and third Ford volumes because, as explained by the Milne Special Collections and Archives of the University of New Hampshire, "The Ford Motor Company never waived the rights for this work." In 1959 Greenleaf authored a one-volume abridgement of Allan Nevins's 1953 two-volume Study in Power: John D. Rockefeller, XXIV

Introduction Industrialist and Philanthropist. When complimenting Greenleaf on the abridgement, titled John D. Rockefeller: A Study in Power, Nevins said that he wished he had written such a one-volume book in the first place. Greenleaf's other books included The Making of Industrial America: 1840-1900(1969}; USA: The History of a Nation, a two-volume survey text coauthored with Richard B. Morris (1969), American Economic Development Since 1860 (1969), and America: A History of the People, an abridgment of USA with a third coauthor, Robert H. Ferrell (1971). In 1968 Greenleaf wrote the preface for the reprint of Keith Sward's 1948 book, The Legend of Henry Ford, and in 1974 the Henry Ford entry for the Dictionary of American Biography. In 1971 Greenleaf was a judge for the Bancroft Prizes annually awarded by Columbia University to authors of distinguished works on American history and diplomacy. He also served as the University of New Hampshire's representative to the New England University Press. Reflective of his interest in early photography and oral history, he championed, among other books, publication of John P. Adams's 1976 book, Drowned Valley: The Piscataqua River Basin (the lower part of the river dividing New Hampshire and Maine). Greenleaf had varied interests, ranging from technology and old cars to Western literature, architecture, and higher art forms. He was exceptionally well-read, and his intellect impressed all who knew him. He was "very astute," recalls colleague Charles Clark. "He knew everything—he was a resource," says Robert Mennel, Department of History chair from 1974-77. "He was one of the most intelligent persons I've ever known," colleague Heilbronner remarks. "His I.Q. must have been very high, and he combined knowledge and good judgment." Melvin Bodick, a colleague and longtime neighbor, describes Greenleaf as "a genius." "You could ask him a question on almost any subject," Bodick recalls, "and his detailed answer would be so well organized that it could be published without editing." Colleagues also enjoyed Greenleaf's sense of humor and wry, witty conversational style. Attention to detail was a Greenleaf hallmark. To Heilbronner, he was "meticulous"; to Marion James, department chair from 1960-64, a "hard worker and very meticulous;" to Clark, XXV

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"very meticulous and careful"; and to another colleague, Douglas Wheeler, "the ultimate perfectionist and professional." A six-footer weighing about 190 pounds, Greenleaf was formidable in appearance. "He stood apart in stature and dignity," says Clark. "Although a force at faculty meetings," Wheeler remarks, "he was a voice of reason—an honest man who did not throw his weight around. Even so, he did not suffer fools gladly and could puncture others' pomposity. All in all, he made a wonderful contribution to the department." Liberal in outlook, Greenleaf supported a failed attempt to organize UNH's faculty by the American Association of University Professors. The association met with success in 1992. Greenleaf was a conscientious teacher. He taught in the traditional manner, delivering formal lectures to students expected to take notes. He is described by Wheeler as "a good teacher, not flashy, but very informative and well organized." Greenleaf experienced personal tragedy. His wife, Ellen, described as "brilliant" and "charming" by several of her husband's colleagues, died in 1965. He suffered another crushing blow when his second son, David, died in 1973. His work pace slowed as he focused on the needs of his young sons. Greenleaf was "stoic" in the face of adversity, Clark recalls. "He never complained," Heilbronner adds. "He was a great dad," Eric remembers. "He'd play pitch and catch with us, take us to the seashore, make supper for us, and tell us stories at the dinner table." His loan of $125 enabled fifteen-year-old Eric to buy a 1953 Jaguar, his first car. "He did his darnest to care for his boys," Heilbronner adds, "making sure, as he told me, that they got two hot meals a day. I admired Bill for holding the course as he looked after his sons, met classes, wrote, and kept his life from going off the rails." Greenleaf's "legendary" devotion to his sons is mentioned in the American Historical Review obituary written by Morris. In the 1970s Greenleaf was working on two disparate projects, testimony to his versatility as writer and historian. The first was an economic history of the North during the Civil War, to be part of the multivolume New American Nation series, edited by Henry Steele Commager and Richard Morris. Publication within XXVI

Introduction

this series, one of the more important projects in America's historiography, would have considerably enhanced Greenleaf's reputation. The second was a study of the Motion Picture Patents lawsuit of the 1910s-1920s, whereby the federal government sued to dissolve a combine of motion picture firms accused of trying to control the market for movies and motion picture theaters. Neither book could be completed. In the summer of 1975, Greenleaf felt weak after returning from a research-oriented trip to Washington. Even so, he resumed teaching in the fall. Diagnosed with pancreatic cancer, he gave up teaching in early November and died on December 17. Greenleaf's papers are in the Milne Special Collections at the University of New Hampshire, and include research notes, correspondence, and manuscripts, as well as lecture notes for his history classes. After Greenleaf's death, Morris visited the Collections in the hope that the author's Civil War research was sufficiently advanced to enable another historian to handily complete the project. He concluded otherwise. Symbolic of the esteem of the UNH's Department of History, the William Greenleaf Prize is awarded annually "to recognize undergraduate distinction in historical study and scholarship." At the time of his death, Greenleaf was serving as doctoral adviser for Dorothy A. Pettit, who was writing her dissertation on the influenza pandemic of 1918-20. Thirty-five years later, Pettit and a coauthor, Janice Bailie, published A Cruel Wind: Pandemic Flu in America 1918-20, dedicating the book to Greenleaf. If somewhere-in-time photos could be taken of Greenleaf, my favorite would be of him chatting with Nevins c. 1963 while sitting on the grass near the foundations of an old mill on the former Greenleaf property on the Oyster River. A witness to the event was Peter Greenleaf, then a youngster. We can only speculate as to the subjects discussed by the two professors—possibly the younger man's application for a prestigious Guggenheim Fellowship, supported by Nevins and Morris, and awarded in 1964, or perhaps the history and technology of the old mill, built by New England settlers toward the end of the seventeenth century. In any event, the tete-a-tete must have been among Greenleaf's most cherished memories. xxvn

Introduction For sharing their memories of William Greenleaf, I am indebted to his colleagues Melvin Bobick, Charles Clark, Hans Heilbronner, Marion James, Allen Linden, Robert Mennel, and Douglas Wheeler. Thanks, too, to William Ross, head of the Milne Collections, for acquainting me with these professors. I also am grateful to Greenleaf's sons, Peter, Eric, and Allan, for providing biographical information about their father. The sons are success stories, Peter being an oil trader in Russia, Eric a professor of marketing at New York University, and Allan a mathematics professor at the University of Rochester. The latter's brilliance earned him admission to the University of Chicago at age 14. DAVID L. LEWIS ANN ARBOR, MICHIGAN AUGUST 30, 2010 Postscript: One of Wayne State University Press's specialties has been the publication of auto history-related books, including reprints. For decades it has been a "go to" publisher for aspiring authors, to wit: In 1959 when asking my doctoral chairman, the University of Michigan's Sidney Fine, where best to shop my doctoral dissertation on Henry Ford, his immediate reply was, "The Wayne Press." Good advice, and I have passed it on to others.

xxvm

MONOPOLY ON WHEELS Henry Ford and the Selden Automobile Patent

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PROLOOUE

Roots of a Legend

O

NE OF THE momentous episodes of American industrial history is the encounter between Henry Ford and the Selden automobile patent. In grappling with the giant of monopoly in the motor car industry, Ford achieved a double purpose. He validated his legal right to accomplish the revolutionary feat of building a car for the masses. And, by the very fact of his resistance to the Selden claims, he held open to all comers a young and expanding industry in the years of its greatest promise. Thus the Selden patent suit is a landmark in the social diffusion of technology. The case itself is among the strangest litigations in the annals of the American patent system, comparable in scope and impact to the patent wars waged over other basic inventions like the Howe sewing machine, the McCormick reaper and binder, and the Bell telephone. The contest is memorable for yet another reason. From the time that Ford became embroiled in the controversy in 1903, destiny claimed him as an incurable maverick, foreshadowing the unpredictable individualist who later captured the folk imagination. Ford was never more unorthodox, and rarely more courageous, than in opposing the Selden patent. His refusal to conform to the dictates of monopoly sounded that note of fierce independence which lends an inner continuity to a variegated and discordant career. The blunders and follies committed by Ford in his later years lie beyond the province of this account. Flagrant though they were, they will doubtless fade into the far background as Ford gains his secure place as a world figure in our machine civilization. Ford will be remembered chiefly as a pathbreaker in the realm of technology. In the course of the Selden patent war, this revolutionary of the machine age already bodied forth as a disrupter of settled ways, and in fighting his battle against special privilege he aligned himself with the traditional American commitment to equalitar3

Prologue

ianism in the marketplace. Above all, he loomed as a creative innovator by which future generations will recall his historic contribution to the social use of invention. Although the liveliest passages of the Selden war were fought outside the courts, the final and decisive battle necessarily lay in the domain of the patent law. The case telescopes an epoch in the history of modern land transportation. The development of the automobile, that product of an uneven but continuous advance in invention and technology, threw its shadow over the entire episode. Just as the heart of the motor car is its engine, so in the progress and outcome of the Selden suit no single consideration had a more important role than the internal combustion engine. To the pulsing rhythm of its explosions moved the destiny of a country-born mechanic who gave to America and the world a car for the people.

4

I Beginnings

T

HE AUTOMOBILE, more clearly than most mechanical creations, illustrates the fact that any notable invention is seldom if ever one man's achievement, but rather that of a number of men, each building on the accomplishments of his predecessors. "Invention implies research," Waldemar Kaempffert has observed. "The 'heroic' theory of invention, the notion that an idea flashes from a brain and gives the world a sudden, fresh impulse must be dismissed." x The evolution of the automobile forcefully demonstrates the truth of this insight. In the years 1875-95 a scattered band of automotive pioneers on both sides of the Atlantic grappled with the development of a horseless carriage. While most of them worked in isolation and obscurity, all undertook to build a powered wagon, light and easily maneuverable, with a wide radius of movement. Until these conditions were satisfied, the early history of the motor car would remain a record of failure occasionally relieved by a page of shining promise. One page is stamped with the name of George Baldwin Selden, an inventor and patent lawyer of Rochester, New York. Selden had a vision shared by few of his contemporaries in the decade after Appomattox. In an epoch when the heavy steam engine was the main source of mechanical power, Selden glimpsed a form of land transportation based on the motive force of a new age of technics—the light internal combustion engine. He was the first American to envisage clearly an ancestor of the gasoline automobile. He was also the first inventor in any country to lay formal claim to the motor car as his exclusive invention. This act was to influence dramatically an industry not yet born. 1

In May, 1878, sputtering explosions in a machine shop overlooking the Genesee River in Rochester echoed upon the sleepy 5

Monopoly on Wheels

waterfront at the foot of Platt Street. Two men stooped over an internal combustion engine mounted on a pair of wooden horses fastened to the floor of a small room of the shop. The space, divided by a wooden partition to shield the experiment from prying eyes, was heavy with the odor of gasoline. The partly built motor—only one of its three cylinders had been completed—was being readied for its first trial by George B. Selden and his assistant, a Rochester machinist named William Gomm. To start the engine, Gomm repeatedly turned it over by hand; but after two or three puffs of coughing exhaust, the mechanism ground to a halt. Yet every cough of this contraption was for Selden an augur of eventual success. His enthusiasm was shared by his assistant. "We were after a power that could run a road carriage," Gomm recalled many years later; "that was the thing that was uppermost in our minds." 2 The internal combustion engine was then relatively new as a reliable source of power. Made in cumbersome sizes and shapes, it was fed by street gas and was used for stationary purposes in small industrial shops. Selden aimed at what he thought was a wholly novel objective: a light power unit of reduced weight and dimensions that would operate on liquid fuel and yield sufficient power to propel a road vehicle. He knew of earlier attempts to mechanize carriages, but had dismissed them as impractical because of the limitations imposed by the steam engine, which required bulky loads of coal and water. The internal combustion motor, of a type that consumed petroleum instead of coal gas, appeared to Selden as the most inviting mechanism for powering a horseless carriage. Selden pursued his experiment with scanty technical knowledge and resources. While the focal point of his conception was an explosive engine, he was barely acquainted with the explosive properties of petroleum distillates. Early in 1878 he confided this technical problem to Gomm, who conducted an experiment preliminary to the trial of the engine. In turn, Gomm spread kerosene, benzine, and gasoline upon an iron plate and put a lighted match to the surface. The kerosene was unaffected. The benzine burned slowly and produced a heavy smoke. But when Gomm applied a flaming match to the thin film of gasoline, the vapor "went off like a flash," leaving no smoke or visible residue. Gomm was encouraged. "It looks," he reported to Selden, "as if gasoline was

6

I Beginnings

going to prove a new motive power for an engine to drive a horseless carriage." That much Selden and Gomm knew in the spring of 1878, as they prepared the engine for its first trial. But would the motor develop power, even on one cylinder? It was to answer this question that Gomm kept turning the crank on that May day. He had almost exhausted his "wind and patience" when a jerk of the handle told him that the single working cylinder was beginning to throb into life. Gomm rested briefly, then resumed cranking. Suddenly, a sharp explosion tore the crank-handle from his fingers with such force that Gomm never forgot it. "We stood amazed," he remembered long afterward. Feeble though it was, the engine ran for a few moments. Selden was overjoyed. Turning to Gomm, he exclaimed, "Billy, we have struck a new power." s 2

The quest for a "new power" had filled Selden's imagination for almost two decades and was pursued in the face of hostility and ridicule from his father, Judge Henry R. Selden, a distinguished member of the Rochester bar. When George later remarked that he was "sneered at and otherwise discouraged from engaging in any mechanical enterprise," he undoubtedly had his father in mind. Yet it was a chance conversation overheard in Judge Selden's law office that planted the germ of the idea which was later to flower as the Selden patent. George, who was born in Clarkson, New York, on September 14, 1846,4 was virtually predestined to follow the path of the law. His father, a judge of the state court of appeals, was lieutenant governor of New York in 1856 and in 1873 defended Susan B. Anthony when she was tried in a federal court for illegal voting. His uncle, Samuel L. Selden, enjoyed a successful law practice in Rochester, where Judge Selden settled in 1859 and entered into partnership with him. In 1860, the fourteen-year-old George listened avidly as his father and a law client discussed the use of self-propelled road vehicles. Neither of the two men believed an operable mechanical carriage could be devised. As conclusive examples of failure, they pointed to the steam-powered carriages which had enjoyed a brief vogue in 7

Monopoly on Wheels

England some thirty years earlier. Long since discarded as impractical, most of these were buried in the scrapheaps of mechanical graveyards. The horse and the railroad were the common agencies of land transportation. From the day George heard this conversation, he fell under the sway of a fixed idea. He would, so he told himself, design a powered road carriage to supplant the horse and to outstrip the railroad in freedom of movement. George had a native mechanical bent that was stimulated by a Rochester inventor, Dr. George Hand Smith, but it was suppressed by Judge Selden, who had already laid out a career for his son. George attended the University of Rochester, where he showed only a mild interest in his classical studies, and, after a short tour of duty with the Sixth New York Cavalry and the Hospital Corps during the Civil War, went to Yale as a sophomore in 1865. His interest in mechanical invention remained undiminished. At New Haven he spent many hours in the college library turning over volume after volume for suggestive leads on selfpropelled vehicles. In 1867 George abandoned his classical course at Yale and entered the Sheffield Scientific School. His two years there as a special student were probably the happiest of his youth. He read Darwin and Spencer; he tinkered with machines and electrical apparatus; he somehow groped toward his central design. But this idyll was cut short in 1869 when, as an obedient son, he returned to Rochester to read law in Judge Selden's office. During his two-year apprenticeship, George became versed in patent law. He became a member of the New York bar in November, 1871, and three years later was admitted to practice in the United States Circuit Court for the Northern District of New York. As a specialist in patent litigation, he established his own practice in 1878. The first patent attorney engaged by George Eastman, Selden handled the application for Eastman's initial patent on an improved process for coating gelatine dry plates. Selden also defended the New York State Millers' Association in an infringement suit brought by the owners of the Denchfield meal cooler patent. As a demonstration of loyalty to family tradition, this devotion to the law pleased Judge Selden, but it also satisfied his son, for it gave George at least a peripheral footing in the field of invention. Whenever his law practice afforded some leisure hours, George 8

I

Beginnings

tinkered with inventions linked to his unflagging interest in selfpropelled vehicles. As early as 1869, when he began reading law, he created a device for attaching solid rubber tires to wheels. Although Selden filed an application for a patent, he lacked funds for developing his invention. His father firmly refused him assistance in any mechanical undertaking. For the greater part of his life George was to complain that his combined income as a patent attorney and an inventor was never large enough to enable systematic pursuit of his mechanical experiments. But he never lost sight of his main objective. Occasionally, while visiting Washington on business, he studied the literature on road locomotion in the Patent Office library. In his father's house on Gibbs Street, where George lived until the close of the iSyo's, he performed experiments in a basement workshop. Here, locked in solitude amid a litter of drawings, models, tools, and machines, he pondered the problem of mechanized road travel, and even developed a few inventions unrelated to his chief effort. These resulted in several patents for machinery to manufacture barrel hoops, which the Penney Hoop Company made under license. Selden also designed a typewriter and sold the rights to a manufacturer. Such inventions testify that Selden was more than a mere dabbler. He had a genuine if not high inventive talent. Through these undertakings Selden became acquainted with Gomm, who excelled in the construction of models. He came to rely upon Gomm for translating his ideas into three-dimensional form. Selden also drew upon others in Rochester—draftsmen, patternmakers, foundrymen—for technical assistance in his attempt to find a power for driving a horseless carriage. Gomm and the other artisans did not know that they had become involved in a drama whose climax lay more than thirty years off. 3

In giving rein to his ambition to extend the conquest of time and space, Selden delved into the history of mechanical land transportation in libraries from Rochester to Washington. He carefully investigated the steam carriages which had fired his boyhood imagination. These had a record of long and complex development. The powered highway vehicle had been foreseen as early as the seven9

Monopoly on Wheels

teenth century, before the emergence of the piston steam engine. The idea of a steam-driven carriage had been suggested by Isaac Newton as early as 1680. The concept moved closer toward realization over the following century, when the earliest piston engines were improved. The first steam carriage to move under its own power over highways was built and operated in 1679 by a French army engineer, Nicholas Joseph Cugnot, who designed a three-wheeled truck for hauling heavy artillery. While it had a speed of about three miles an hour and could carry a load of three and one-half tons over rough terrain, the vehicle lacked power and stability. Its huge copper boiler projected awkwardly over the front axle and was a strain on the steering wheel. The Cugnot carriage, like its descendants, revealed the serious limitations of the steam engine as a power unit for road travel. The boiler held only enough water for a fifteen-minute journey, necessitating frequent halts to refresh the supply. Extra water tanks and fuel bins for coal or wood could be added only if hauling capacity were reduced. Cugnot's experiment, which received financial support from the French war ministry, terminated with a change of government.5 The steam engine remained the favored power plant of inventors who came after Cugnot. Between 1820 and 1835, when the steam carriage reached the peak of its commercial use in England, the typical self-propelled wagon weighed from two to four tons, consumed as much as 700 pounds of water on short trips, and attained an average speed of not more than ten miles an hour. Cumbersome as they were, these steam wagons were promising as a novel means of surface transportation, but they were never allowed to develop their potentialities. Shunted off the highways by an unfriendly public opinion and by the concerted opposition of railway companies and mail-coach operators, their use after 1836 was sharply diminished by discriminatory tolls and restrictive legislation. The steam carriages disappeared after 1865, when an act of Parliament forbade self-propelled vehicles on public roads unless an attendant carrying a red flag walked in front of the car. Many inventors in the United States, among them Nathan Read and Oliver Evans in the first days of the republic, attempted to patent or construct operable steam carriages. Visitors to New York City in 1855 saw two self-propelled wagons, both operating on zo

i

Beginnings

steam, built by the Scottish master mechanic, Richard Dudgeon. In the summer of 1864, a little more than a year after Henry Ford was born on a farm near Detroit, a circus in that city featured as "The Marvel of the Age" a steam carriage whose driver claimed it would "supersede the use of horses on ordinary thoroughfares." In 1871 a Methodist preacher in Racine, Wisconsin, built a steam vehicle which attained a speed of more than ten miles an hour. Five years later the Wisconsin legislature offered $10,000 to the inventor of a "machine propelled by steam or other motive agent, the object of which is a substitute for the use of horses or other animals on the highways or farm." Only two machines were entered in the competition, and only one met the test of covering a aoo-mile course at an average speed of at least five miles an hour. It failed to merit the prize because its high operating costs doomed it as a cheap and practical competitor of the horse.6 Despite the refinement of earlier crudities, the adaptation of mechanical power to road vehicles continued to pose grave difficulties as the nineteenth century wore on. In at least one crucial respect the automotive art had made no significant advance since Cugnot's pioneer attempt: the steam engines, heavy and bulky, encumbered the space for passengers and goods. By the 1870'$, the common form of steam locomotion on roads was the heavy traction engine, which was only incidentally intended for transportation. These clanking giants, known as "road locomotives," served as portable power plants for threshing and other farm work. Weighing upwards of three tons, they were really huge boilers set on wheels. The "road locomotives" moved very slowly, required special attention by trained operators, and were immobilized for several hours when the supply of fuel and water was exhausted. Among Henry Ford's vivid boyhood memories was a steam traction engine he saw crawling along the road to Detroit in 1876. Such was the scene as Selden found it in his lonely search of the past. The fundamental problem was not the creation of the basic operating elements of the automotive unit, but their combination into a light road carriage with a small and reliable self-contained power plant using a concentrated fuel that yielded long runs. Selden's own experience in driving a steam traction engine buttressed his conviction that the solution lay in reduced weight and increased power. As early as March, 1873, he definitely rejected the II

Monopoly on Wheels

idea that a steam carriage could satisfy these requirements. As he put it, the "great trouble is evidently the weight." From that time forward he looked for a better source of power. In the autumn of 1873 Selden, preparing for his main task, conducted experiments in road traction which owed more to the findings of earlier pioneers than to his own insight. The slim and darkeyed patent lawyer, now twenty-seven years old, had little to show in actual accomplishment as an inventor, yet he pictured himself as the herald of a strident and restless world in which mechanical travel had telescoped space. To one of his friends Selden confided that "he was going to work a revolution in locomotion upon common roads, and that his invention would be entitled to a place in industrial history analogous to that of the inventor of the steam engine, the locomotive, the cotton-gin and the telegraph." 7 This boast outdid reality. Selden fell far short of the first rank of inventive genius. Yet he shared one trait with the great inventors. A gifted amateur unfettered by tradition, he was outside the province of established technological and industrial usage and studied his problem without reference to vested interests. Like most inventors, he borrowed from diverse sources, appropriating the elements for evolving his own design. By 1873 Selden knew that the single element which had thus far eluded him in his quest for a light self-propelled carriage was a suitable power plant. Not for long was Selden to want. He could observe the gas engine in a period of vital change. The course he followed was to affect his entire career as an inventor. 4

Not long after the patent James Watt took out in 1769 opened a new age in the use of power, one of his countrymen predicted that in fifty years a new invention would make the Watt engine appear to be a "slight and insignificant" discovery.8 The advent of the internal combustion engine was partial confirmation of this prophecy. By 1900 it had assumed a commanding position and become, with electricity, the basic power of a new phase in the Industrial Revolution. The ancestry of the internal combustion motor dates from the scientific revival of the late seventeenth century, when an interest 13

I

Beginnings

in applied mechanics stimulated efforts to harness the force of explosions for mechanical work. The principle of combustion within a closed motor cylinder was foreshadowed as early as 1678, when the Abbe Jean Hautefeuille of Orleans projected a gunpowder engine. Similar devices were built by the Dutch scientist and mathematician, Christian Huygens, and by his assistant, Denys Papin, between 1680 and 1690. Such explosive engines were novel but impractical, for gunpowder cannot be used as a fuel for sustained work. It was not until 1794, when Robert Street was granted a British patent for an engine using gases generated by heating tar or spirits of turpentine, that the first internal combustion engine using gaseous fuel was conceived.9 By that time steam had become established as the dominant source of mechanical power. When interest in the explosive motor was revived toward the end of the eighteenth century, inventors had access to a fuel superior to gunpowder. In 1792 William Murdock, then stationed in the mining regions of Cornwall as the agent of Boulton and Watt, began the series of experiments which soon yielded commercial illuminating gas, the standard fuel of most early internal combustion motors. This gas persisted as the common fuel even after the middle of the nineteenth century, when the oil fields of the United States and Europe were opened. The light and compact fuels of petroleum derivatives began a new stage in the evolution of the internal combustion engine; but before this type of motor could emerge, inventors had to discard entrenched modes of design and engineering associated with the steam engine. Early gas engine inventors erred in aping traditional practice. They failed to grasp the radical difference between the action of steam and explosive gases in a motor cylinder. The double-acting atmospheric engines they built used the conventional method of alternate explosions at the piston ends. The charge was ignited without previous compression. These engines operated on the two-cycle principle—that is, one of every two strokes comprising the complete cycle of intake and exhaust was a power stroke. The explosions were weak because the expansive force of the gases was largely wasted. Consequently only a small amount of power could be derived from comparatively large engines. Not until 1860, almost a century after Watt took out his patent, was the first commercially successful gas engine developed. Its in'3

Monopoly on Wheels

ventor was Jean Joseph Etienne Lenoir, a Belgian machinist living in Paris. Although it was basically an advanced improvement of the double-acting steam engine, the Lenoir motor was acclaimed as the first truly practical internal combustion engine. It was soon succeeded by another atmospheric pressure motor, the Otto and Langen free piston gas engine, which ranks as the first major departure from steam engine practice. Invented by Nicolaus August Otto, it was made in Germany and was first exhibited at the Paris Exposition in 1867. Within a decade, 4,500 Otto and Langen motors were in use. By 1876 the Lenoir and Otto free piston engines had pushed aside other non-compression gas motors and won wide acceptance as the only reliable atmospheric pressure motors of their class. Like all commercial gas engines made between 1860 and 1876, they were stationary power units fed by town gas generators. Little thought was given to utilizing them for self-propelled vehicles. The Otto and Langen was, from the standpoint of efficiency and economy, superior to the Lenoir; but it was heavy, bulky, and noisy. In the years when these French and German motors made their mark, another kind of gas engine was being pressed to completion by George Bailey Brayton, an Englishman living in Boston. Brayton was a resourceful inventor who, before his death in 1892, had taken out more than thirty patents, among them claims on gas, vapor, and steam engines, an endless chain drive, and friction gearing for streetcars. A decade before the Civil War, Brayton began experiments with motors using coal gas, and in 1871 produced a working model of a gas engine supposedly adaptable to liquid hydrocarbon fuels. It was a landmark in the art of the gas engine, for it augured the gradual change to concentrated and portable petroleum fuels. On April 2, 1872, Brayton patented his first internal combustion engine, a double-acting two-cycle gas motor. Shortly after its appearance on the market in 1873, this engine was modified to operate on crude petroleum. The converted Brayton, patented in 1874 and later made single-acting, was the one by which the inventor made his reputation.10 While the Brayton resembled other internal combustion engines in its use of the constant pressure principle, it was notable in two respects. It compressed the mixture before explosion, and it operated on liquid petroleum. Despite these advances, the motor reJ

4

I

Beginnings

vealed the extent to which the steam engine still overshadowed the technology of the gas engine. Although the Bray ton was the first internal combustion motor to make consistent use of liquid hydrocarbon fuel, it was not an explosive engine. It was a slow combustion motor, acting on the principle of continuous burning at constant pressure. Previous compression occurred in a reservoir outside the working cylinder; and the charge, pumped out over a flaming jet, was admitted to the cylinder as streaming fire. The Brayton was indubitably a constant pressure engine. The burning mixture increased in volume, but the pressure in the working cylinder never exceeded that in the external compressor. In operation the Brayton resembled a steam engine, and contemporary observers were quick to draw the comparison. The converted Brayton favorably impressed experts who weighed its merits against those of the clattering Otto and Langen. Its smooth action, and its capacity to run on petroleum fuel, soon brought the motor into use in many shops. Made and marketed in the United States and Great Britain, the Brayton, although inferior to the Otto and Langen in operating economy and efficiency, was free from excessive vibration. Some of the larger Brayton motors yielded as much as forty horsepower. Like every other gas engine of that day, the Brayton was large, heavy, and bedded in massive framing; but it was a figure of transition in the art of the internal combustion motor. An inventor with sufficient imagination might see it as the prototype of a light and portable power plant which did not depend, like the steam engine, upon coal and water, and did not require, like other explosive engines, a fixed connection to street gas generators. 5 By 1873 Selden had a limited knowledge of internal combustion engines fed by illuminating gas, although he was not acquainted with any previous attempt to adapt them to self-propelled vehicles. He early recognized that non-compression engines, too large and heavy in ratio to their power, were as a class unsuitable for utilization as units for light road carriages. Before 1876 he became familiar with the Lenoir engine, having obtained a copy of the American patent of 1861. "A glance at it," he said, "was sufficient to show 15

Monopoly on Wheels

that it never could be used for my purpose and I never seriously considered it." u Betxveen 1873 and 1876 Selden passed long hours in his basement workshop, where he conducted a series of experiments with different engine fuels. He preceded uncertainly, often with more confidence than knowledge. He built and operated an engine burning an externally compressed mixture of nitrous oxide and kerosene. He rejected this, and also abandoned another motor that ran on carbonic gas. Ransacking the technical literature within his reach, he considered the use of other fuels, including ammonia, bisulphide of carbon, picric acid, and oil of mirbane. None of these answered his purpose. By the outset of 1876 Selden had definitely turned his back upon steam and other power agents and had concluded that "the problem, if solved at all, would be solved by an internal combustion engine of the compression type using liquid fuel and of such fuel the cheapest and most easily obtainable was some one or other of the petroleum products." 12 But where or how could he find such an engine? Meanwhile, in his frequent discussions of a mechanical road carriage propelled by an internal combustion motor, Selden found that others thought it "too visionary for consideration." Selden never abandoned his belief that he had originated the idea. No doubt this conviction was stiffened by the frowning disapproval of his father and the scoffing of Rochester townspeople. Without being aware of it, Selden in 1876 stood at the edge of a dramatic meeting. It occurred in Philadelphia in the summer of that memorable year, when the Centennial Exposition unfolded its panorama of national and world progress. Few of the visitors to the Exposition failed to make a pilgrimage to Machinery Hall, measuring about a third of a mile from end to end, where the latest triumphs of mechanical ingenuity hummed and clanked an accolade to the new age.13 A dominant chord of ceaseless movement swelled up from the pistons of numerous engines. The giant of this array was the huge Corliss steam engine, weighing 680 tons and towering forty feet above the center of the hall. The Corliss had enormous plunging pistons with a ten-foot stroke and swung its walking-beams like "an athlete of steel and iron with not a superfluous ounce of metal on it." 14 The engine was a majestic symbol of the supremacy of steam power. 16

I

Beginnings

Yet the dominance of steam was already being challenged, if only on a modest scale. The visitor to the Exposition found more than one example of the stationary internal combustion motor which had begun to compete with the steam engine for small industrial uses. In the German section of Machinery Hall were five models of the Otto and Langen engine, ranging in size from one-quarter to three horsepower. Another Otto free piston motor, of one horsepower, could be seen at the Main Building, where it drove a small printing press in the London Graphic exhibit. All of these operated on illuminating gas. In contrast, a ten-horsepower Brayton in Machinery Hall used crude petroleum, and two other Braytons were employed for pumping water at the aquarium in Agricultural Hall. "The Brayton engine," reported an observer, "is a fine piece of workmanship, and in its working is smooth and equable, resembling in all respects, externally, a well-proportioned steam engine." 15 Among the more attentive spectators at the Centennial Exposition was Selden. Accompanied by a business associate, James A. Peoples, he had come to the Philadelphia fair to display his patented machines for shaving and finishing barrel hoops. Selden remained at the Exposition from its opening on May 10 until the first week in July, and from his vantage point in Machinery Hall had ample opportunity for careful observation. He bubbled over with talk about his proposed horseless carriage, often spinning out his scheme to Peoples until the early morning hours. Selden saw the Otto and Langen engine, standing about ten feet high, whose shuttling free piston created a mechanical bedlam that could be heard far off. Laughingly, Peoples pointed to it and said, "George, that is what you want to drive your road carriage with." But this clumsy atmospheric engine held no attraction for Selden. He knew, without having yet encountered one, that he required a compression motor consuming a compact fuel. He found that motor when he stumbled upon the Brayton. While Selden never saw the engine in operation, his interest was immediately aroused. To be sure, the Brayton was large and massive, but Selden, with a flash of insight, realized that it might be adapted as a light power plant. Returning to Rochester, he chafed with impatience to secure more details on the Brayton engine. Although Selden lamented Z

7

Monopoly on Wheels

that during this time he was chronically short of money for pursuing his investigations, he dug into his pockets and at his own expense sent William Gomm to Philadelphia in October. Gomm had only a limited knowledge of gas engines, but it is clear that Selden dispatched the machinist to make an appraisal of features which may have escaped the eye of the patent lawyer. Gomm was able to observe the Brayton motor in operation, and, upon his return, was eagerly questioned by Selden, who soon procured a copy of the Brayton patent.16 Selden also obtained the extensive report on the Vienna Exhibition of 1873 containing a detailed description of the Brayton engine. He now faced the task of reducing the size of the Brayton motor without lessening its power. Although he was now so enmeshed in his law practice that he could not continuously devote himself to the development of a lighter engine, Selden had good reason for jubilation and strengthened confidence. Within his grasp lay the basic principle, although not the minute structural details, of a power plant whose application might make him a pioneer in the evolution of the automotive vehicle. His technological borrowing bore the seal of a curious fate. Unknown to Selden at this moment when new vistas seemed to have opened before him, the art of the gas engine had reached a phase of vital change. In the making was a revolutionary transformation in the nature of the internal combustion engine, a major technological shift that was to produce the power unit of the modern motor car. 6

In the 187o's, the watershed of gas engine development, Nicolaus August Otto, the inventor of the free piston engine, directed his efforts toward an internal combustion motor with improved compression. Like some other workers in the art, Otto perceived that the gas engine had its own laws of action independent of steam practice. Above all, he understood that greater working pressure, lower fuel consumption, and higher engine speeds might result from compression of the charge before ignition. The importance of compressing the mixture had been grasped by earlier inventors, 18

i

Beginnings

and after 1850 external compressors were fitted on some motors, foremost among them the Bray ton. In 1861, when French and German engineers revived the idea of compression, they gave the concept a fresh meaning that brought the principle of internal combustion to its logical conclusion. They proposed an integral compressor and explosion chamber within the confines of a single motor cylinder. Unlike the double-acting, two-cycle engines modeled after steam practice, a motor built on this principle could effectively harness the expansive force of gases. These new insights were unified in 1862, when a French experimenter, Alphonse Beau de Rochas, formulated the theory of the four-cycle engine. Beau de Rochas proposed the use of the working cylinder as a compressor to prepare the charge for ignition and fixed a sequence of operations performed by four consecutive piston strokes: (i) intake by suction of the explosive charge at the first outstroke; (2) compression by the succeeding instroke; (3) ignition at constant volume upon the completion of the second stroke, followed by explosion and expansion at the third stroke; and (4) exhaust of the burned gases at the final instroke, clearing the cylinder for a fresh charge initiating another cycle. Each stroke in four was a working stroke. All of the operations were performed in the motor cylinder, increasing the efficiency of compression and eliminating the need for an external compressor. A theoretician rather than a practical engineer, Beau de Rochas never applied his formula. It remained for Otto to translate the concept into operating reality. The "improved" or "silent" Otto engine patented in 1877 closed the formative stage of the internal combustion motor and broadened its commercial use. It quickly rivaled the steam engine as a source of small power. Soon after the Otto had been displayed at the Paris Exposition of 1878 it was adopted in numerous industrial shops, and a few years later was generally employed by gas engine users in the United States. The superiority of the four-cycle Otto doomed its competitors, including the two-cycle Brayton, which by 1890 virtually disappeared from the market.17 Thus, in the years after 1876, when Selden chose the Brayton motor for his projected road carriage, gas engine practice was well '9

Monopoly on Wheels

on its way toward discarding the atmospheric principle in favor of compression within the cylinder. The operative principle of the Otto became the foundation of modern practice in most gas and gasoline motors. Augmented pressure on the piston, yielding greater engine speeds, enabled the reduction of motor dimensions without loss of power. Otto was hailed by his contemporaries as the Watt of the gas engine. That Beau de Rochas had been the first to formulate the four-cycle system did not detract from the stature of Otto's achievement. "The honour due to a successful invention," commented a British authority in 1878, "is not to him who clearly states the problem, but to him who solves it." 18 When Selden selected the Brayton for modification as a portable motor, he could not possibly have known of the Otto four-cycle engine, which made its appearance a year after the Philadelphia Centennial Exposition. But, having made his choice, Selden faced the immediate problem of building an engine on the Brayton principle that would be light and compact in proportion to its power. The solution of the problem was not obvious. Gas engine designers were accustomed to heavy engines. The acceptance of stationary gas motors in the industrial economy gave engineers little reason for considering them as units for propelling road carriages. They were interested in improving the gas engine as an industrial competitor of the steam engine. Even the refinement of the Otto lay in the future. It, too, was large, heavy, and intended only for stationary purposes. It remained for inspired amateurs like Selden to challenge convention. The Brayton was as conventional as other gas engines in that it had never been made without a massive and cumbersome bedplate. While the Brayton had been used in traction experiments, its size and weight showed that the motor was not a feasible unit for propelling light road vehicles. In 1873 Brayton engines of four and twelve horsepower were used in a streetcar of the Union Railroad Company in Providence, Rhode Island, with highly disappointing results. A Brayton engine was also employed in a partially successful attempt to drive a Pittsburgh omnibus in 1878, but the experiment was cut short by a disapproving city council. The test failed to demonstrate that the Brayton, in its existing form, might be used to power a light vehicle. It is unlikely that Selden was aware of these experiments. Even had he learned of 20

i Beginnings

them, the details would have taught him nothing for his o\vn purposes. The Brayton engine which Selden chose as a prototype weighed 1,160 pounds and developed 1.4 horsepower—a ratio of 828% pounds per horsepower.19 It had a heavy walking beam and a bristling complex of external reciprocating parts. It was set in a frame about ten feet long. In this state, the Brayton could not be mounted as the power plant of a free and light road vehicle, for it did not satisfy the requirements of reduced weight and space. If anything, the Providence and Pittsburgh experiments had underscored this deficiency. "It required a severe struggle on my part to arrive at the idea that an engine of any kind could be built without a frame," said Selden years later. In this respect, the Rochester patent lawyer was far ahead of his time, with a bold dream that shattered tradition. It \vas now time to give substance to the dream. 7

A bustling law practice made such demands upon Selden after the summer of 1876 that he was able to work only intermittently on his proposed road carriage. He was eager to adapt the Brayton engine, but his knowledge was not equal to his determination, and his soaring confidence frequently alternated with despair. Early in 1877 he confided to his notebook: "All this is going to require much study." Yet he dashed off a sketch of a combined engine and air pump for direct application to the shaft of a road vehicle. This was his first attempt to give a clear form to his idea. In his preliminary approach, Selden wisely decided to experiment on a small scale. During the summer of 1877 he designed a reduced brass model of a Colt oscillating-disk engine, a multicylinder motor fitted with air pumps for external compression. While the engine was a failure, it taught Selden how to arrange a set of compression and working cylinders around a crankshaft for direct transmission to an axle. He labored with gusto. "Blow your damned head off if necessary," he told himself. Selden was discouraged by frequent interruptions. "Can't carry on about a dozen patent law-suits and do much experimenting at the same time," he complained. "If ever I get a road wagon it will be by accident. Of the 21

Monopoly on Wheels

almighty effort which an invention requires, who knows but the inventor?" 20 This interlude with the brass model of the Colt motor schooled Selden for his task of modifying the Brayton engine. In December, 1877, he brought his specifications to Frank H. Clement, operator of a Rochester machine shop. "I think he was the only man outside of my workmen who knew anything about what I was trying to do at that time and who did not discourage or sneer at me," Selden recalled. Under the lawyer's direction, Clement made drawings of a three-cylinder engine cast as a single unit. Each of the three motor cylinders was opposed by a compression air pump. The casting was made at the Jones foundry in Rochester and sent to the Clement shop for machining and fitting. The crankshaft was forged at Buffalo. "The road engine comes on slowly," wrote Selden at the year's end. "Want of time is the principal difficulty. . . . She is going to go, unless I meet some more serious practical difficulty than I now foresee. Model begun." 21 During the winter and spring of 1878 work on the multicylinder engine progressed slowly at the Clement shop on Mill Street. Toward the middle of May, when only a few of the engine fittings had been installed, Selden was dealt a blow. The owner of the building, John Greenwood, refused to permit a test of the engine, protesting that it would violate his property insurance. Selden was forced to remove the motor from the Clement shop. He transferred his equipment and operations to the Michel machine shop, on the opposite bank of the Genesee River. At this time only one of the three cylinders had been bored out, finished, and fitted with a piston, air pump, and crank connections. Satisfied that the uncompleted engine would run, Selden and his assistant Gomm conducted the first trial, as we have seen, in the second week of May. The engine operated on flame ignition. After additional adjustments were made, the motor was tested several more times. It performed feebly and spasmodically. Those who saw the engine running in 1878 later testified that its operation, without load and unaided by manual cranking, could not be sustained for more than five minutes. The average period of continuous operation appears to have been from one to three minutes. One spectator remembered that he heard only two explosions, "and then the machine came to a standstill." William Gomm, the most informed 22

I

Beginnings

of the Rochester witnesses, said that the longest period of continuous and unassisted operation without load was three to five minutes. The turning impulses on the crankshaft were weak and erratic.22 The engine usually ran at 25 to 30 r.p.m. At most, and only infrequently, it developed a speed of 45 or 50 r.p.m.* Despite this performance, Selden was convinced he had found the answer to his problem. "I had thus, as I believed, after a long struggle, demonstrated the possibility and practicability of building a liquid hydrocarbon engine of sufficient power for the purpose of light road locomotion on a common road with the permissible limits of weight and space." 23 Plainly, this claim was excessive. The actuality had fallen far short of the mark. Yet the poor result should not obscure the fact that Selden's adaptation of the heavier Brayton demonstrated considerable mechanical ingenuity. Where the original Brayton had an open crankcase, Selden enclosed it and made it integral with the motor cylinders. The main feature of the redesigned engine, the enclosed crankcase, enabled Selden to eliminate the cumbersome bedplate and dispense with the walking beam and other large reciprocating parts. Selden also shortened the stroke of the piston and changed the mode of feeding fuel into the cylinder. These modifications greatly reduced the size and weight of the Brayton and made it possible to mount the engine on a vehicle no larger than an ordinary buggy. The Selden engine weighed 370 pounds. On all three cylinders —although Selden had never operated it on more than one—the motor could develop two horsepower, a ratio of 185 pounds per horsepower. This was in marked contrast to the Brayton ratio of 828% pounds. Had it been capable of delivering its full power, the Selden engine would have been a remarkable advance over the Lenoir and the Otto and Langen engines. The Lenoir weighed more than half a ton and developed one-half horsepower. The Otto and Langen weighed almost two tons and developed three and onehalf horsepower, a ratio of 1,130 pounds per horsepower. Despite the structural changes made by Selden, the operating principles of the Brayton and Selden motors were identical. Both were two-cycle, constant pressure engines using external compres* The Daimler engine which appeared some five years later developed approximately 900 r.p.m. ^3

Monopoly on Wheels

sion. It might have been expected that Selden would have completed his engine, but he brought this work to a halt. Instead of incorporating a finished motor into an operable road vehicle, Selden deferred actual construction and limited his development of the horseless carriage to paper plans. Time was to prove that Selden was not so much interested in the immediate application of his idea as in securing a comprehensive patent covering every self-propelled road carriage with a gasoline motor. In 1878 Selden took preliminary steps to submit his application for a mechanical road carriage to the United States Patent Office. After a draftsman under his supervision made drawings of the vehicle and engine for the application, William Gomm began to build from Selden's sketches a model required by the rules of the Patent Office. Completed within a few months in 1879, it was not a working model. Selden hoped that the Patent Office would accept one representing "in outline the general features" of his road vehicle. When Gomm suggested that an operating model was desirable, Selden replied that a description would be sufficient. We shall see that reliance upon language rather than genuine development was to be characteristic of Selden. He filed his patent application in the spring of 1879. Had Selden at this time built a workable vehicle powered by a gasoline engine, he would have earned a place in history as a leading if unrewarded pioneer in the evolution of the automobile. Instead, his transactions with the Patent Office remained shrouded in secrecy for more than sixteen years while inventors who knew nothing of him or his proposed horseless carriage brought the prototype of the modern motor car into being. Since an invention takes date from the time of application, and amendments may be entered before the grant is made, it is obvious that Selden occupied a unique position. As the first applicant at the patent office of any nation for a franchise covering the gasoline automobile as a unitary combination, Selden could bide his time until his claims, by devious but permissible adjustment to the changing art, were ready for issuance at a time of maximum commercial opportunity. But before we consider the Selden application and the process by which it finally became a patent, it is necessary to review the developments which in the intervening sixteen years made the gasoline automobile a reality. During that period, when the technology of the motor vehicle 24

I Beginnings

made rapid progress, a vigilant observer with an expert knowledge of patent office procedure could postpone the grant of broadly controlling claims until the patent had some assurance of profitable exploitation. In 1879 this was not yet Selden's strategy, but it became his central design over the following decade, as he saw that others by independent effort were shaping the invention he had claimed as his own. The ridicule and contempt which had greeted his obscure labors in Rochester only added to his conviction that all builders of gasoline horseless carriages were indebted to him. It was thus that an inventor who might have ranked as an honored automotive pioneer became instead a hawk-like figure lying in wait.

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II

The Long Vigil

I

N 1879 Selden had no reason to doubt the primacy of his scheme to harness a light internal combustion engine to a road vehicle. Indeed, had he made a thorough study of patent publications disclosing earlier attempts to use a gas engine for that purpose, he would have been encouraged in his belief that he was a trail-blazer. The record of such undertakings revealed a long train of abortive effort. The inventors who by formal registry of their claims antedated the Selden application failed to understand the necessity for a compact power plant, even in instances where some of them recognized the advantage of using liquid hydrocarbon fuel. For example, in 1877 a French civil engineer, Henri Menn, patented a huge road locomotive driven on petroleum. Menn boasted that the vehicle could "traverse the deserts which border Algeria or the Steppes of Russia," but his specifications belied this trumpeted hope. Powered by a fifty-horsepower engine, the Menn locomotive weighed about eighteen tons. It was never built.1 Yet such dismal failures served a larger end. They were signposts pointing to the possibility of creative accomplishment in mechanical road transportation. If nothing more, they revealed that workers in the art could draw upon a technology furnishing the separate elements of an advanced automotive vehicle. 1

By 1840 the steam-powered road wagon had evolved various constructions which were improved over the next half-century and permanently adopted in the art. Some of these elements were known in the late eighteenth century. In a section of a British patent granted to James Watt in 1784, the inventor indicated change gears and clutches for controlling speeds of "wheel car27

Monopoly on Wheels

riages" driven by steam. Another British patent, issued to Richard Trevithick and Andrew Vivian in 1802 for a steam wagon, showed a clutch, rear wheel drive, and a power shaft running faster than the propelling wheels. The French patent secured by Onesiphore Pecqueur in 1828 for a steam vehicle disclosed many of the basic features of the automobile. It described an engine mounted above springs in the front of the body, differential gearing, chain drive to the rear axle, a clutch, change gears for varying the speed, and a fixed front axle with steering arms. These constructions were incorporated in most of the motor vehicles built before the middle of the nineteenth century.2 In 1878, if not earlier, Selden was familiar with these essential elements. That such components were available to contemporary inventors is demonstrated by the Rosenwald patent granted by the French government in 1877. The Rosenwald road carriage, specifying an Otto and Langen motor, included every basic feature of an automobile except a compression gas engine. Anxious to secure a comprehensive patent, the inventor claimed "the exclusive exploitation of any system of locomotion by gas." 3 Had Rosenwald built this vehicle, its engine probably would have made the carriage unfit for road travel. While the Rosenwald patent revealed that most of the fundamental elements of a self-propelled vehicle lay at hand, it also showed that their mere designation was not enough. The prime requisite was their arrangement in a harmonious and operable combination. Two factors were necessary to achieve this aim. One was a power plant more suitable than existing internal combustion motors; another was an inventive mind capable of welding these elements into a unified combination. The state of the art after the middle of the nineteenth century invited attempts to construct effective machines. Unknown to Selden, European inventors before 1875 had built primitive horseless carriages which lighted the way toward the emergence of the modern automobile. Although Selden had dismissed the Lenoir non-compression gas motor as an unsatisfactory power plant for a vehicle, Lenoir had in 1860 constructed a road wagon driven by his engine. The motor of this two-passenger vehicle was enclosed in a box over the rear wheels. The engine housing occupied about half the length of the carriage, but Lenoir claimed that it did not interfere with the pas28

ii

The Long Vigil

senger capacity. The gaseous fuel was stored in a reservoir. Power was transmitted to the rear wheels by a sprocket chain. A steering column was fixed on the driver's platform, and the vehicle was equipped with a brake. The Lenoir carriage illuminated the possibilities of the gas engine for a novel purpose. "Let us drop for a moment the stationary engine," said a French commentator, "and look at the new invention from the standpoint of the services which it may render, as a propelling force on boats, as a motor for all kinds of vehicles, wagons, omnibuses. . . ." The costly volatile fuels used by the Lenoir carriage made its operation highly uneconomical, and observers were quick to suggest that petroleum fuel might bring better results.4 Lenoir heeded this advice. In 1863 he built a vehicle with a lighter non-compression engine operating on a petroleum derivative. Employing an unspecified means of carburetion, this motor developed one horsepower and a speed of 400 r.p.m. that more than doubled the performance of the engine he used in 1860. The road wagon made a return trip between Paris and Joinville-le-Pont at an average speed of more than five miles an hour, covering a distance of twenty-four kilometers.6 But the motor shared the common defect of non-compression engines. It was too heavy for the weight of the vehicle, and the difficulty was compounded by the large quantities of water for cooling the engine. Lenoir abandoned his experiments with road vehicles, although this lighter motor continued to be used for propelling boats. The next notable advance in the art was the road wagon built by Siegfried Marcus, a German who made his home in Vienna. Marcus had an extensive knowledge of mechanics, chemistry, and physics. The day of the practical gasoline automobile might have dawned sooner had Marcus carried forward his investigations systematically. Unfortunately, his interest in the horseless carriage was sporadic, largely because of slim encouragement. The case of Marcus, like that of Lenoir and many another automotive experimenter, illustrates how a pioneer may break off his effort in the absence of a prevailing social need for his technological contribution. When Lenoir completed his first engine in 1860, Marcus had already succeeded in igniting a mixture of vaporized gasoline he 29

Monopoly on Wheels

called "carburetted air." He used this charge for operating a twocycle non-compression free piston engine of his own design. Fitted with electric spark ignition, it was applied in 1864 to a fourwheeled handcart without brakes, steering gear, or intermediate clutch. The machine was crude. The motor had no manual controls and could not be idled. The driver, in order to start the engine, had to lift the rear wheels off the ground and spin them by hand. In 1865 Marcus made test runs, venturing forth in deserted areas under cover of darkness to avoid the hostility of the police and the citizenry. He drove the car over a distance of two hundred meters. Public opposition forced him to discontinue his experiments.6 That the Marcus vehicle lacked certain features which were available indicates that the development of the automobile was an uneven process whose evolutionary leaps depended upon the creative imagination of the inventor. One of these sudden leaps came in 1874, when Marcus renewed his interest in the horseless carriage. Independently of Otto, who was then developing his improved motor, Marcus designed a single-cylinder four-cycle gasoline engine with jet carburetion, timed electric ignition, and water cooling. It is possible that he was acquainted with the theory of Beau de Rochas. Marcus applied this more compact engine to a second vehicle which had a carriage fitted with a pivot mounting over the front wheels, a worm-wheel steering mechanism, a friction brake, and rear-wheel drive. While the vehicle had no gear shift, a signal improvement enabled the driver to start the engine from the front seat. A hand-throttle regulated the speed. This "Strassenwagen," as Marcus termed the machine, ran successfully in Vienna in 1875. However, its sharp explosions alarmed the townspeople and the police imposed crippling restrictions on the vehicle. Disheartened, Marcus gave up his automotive projects. Fie died in 1898. The second Marcus carriage was the high-water mark of the early experimental phase of the gasoline motor car. In its day, the "Strassenwagen" was the closest operable antecedent of the modern automobile. Marcus patented the engine features, but he never took out a patent on the vehicle in combination with the motor.

3°

n

The Long Vigil

2

We have seen that toward the mid-i88o's the Otto four-cycle engine won acceptance as the foremost commercial internal combustion motor and began to supplant steam engines of comparable power in small factories. The dominating position of the Otto was to have an important effect upon its adaptation to self-propelled vehicles. The outcome of a bitterly fought patent contest broadened the use of the four-cycle power unit. Between 1874 and 1886 the Otto factory at Deutz, enjoying the protection of German patent rights, enforced a monopoly over this type of engine. But other makers challenged the Otto claims, holding that they could not rightfully cover the principle originated by Beau de Rochas. After a fouryear legal battle before the courts of six European countries, the scope of the patent was reduced. In 1886 Otto was forced to vacate the controverted claim. During the course of the litigation other manufacturers, anxious to avoid injunctions and the payment of damages, produced two-cycle motors. When the Otto claim was narrowed, numerous engine firms quickly cultivated a ready market for the commercially proved four-cycle motor. Consequently, the two-cycle engine virtually disappeared from the market until the closing years of the nineteenth century, when it was brought out in improved form under new patents. While the Otto of the Eighties was still a large, low-speed stationary engine operating on illuminating gas, it soon became available as a portable motor fed by liquid petroleum derivatives. The portable type was employed on farms for threshing, baling hay, and pumping water. Grain dealers used it for running elevators, conveyors, feed mills, and corn shellers. Small internal combustion engines, possibly of the Otto type, also powered the naphtha launch, a self-propelled open boat introduced in the United States in 1885. Americans later noted as automotive pioneers made their first acquaintance with the Otto during these years. In 1885 Henry Ford repaired one at the Eagle Iron Works in Detroit. In the following year a young bicycle mechanic, Charles E. Duryea, saw an electrically ignited two-horsepower engine exhibited at the Ohio State Fair at Columbus. It was the first gasoline engine he had ever 31

Monopoly on Wheels

seen. "It was as big as a kitchen stove," Duryea recalled, "and must have weighed a ton." Duryea watched intently as the exhibitor, Henry K. Shanck, struggled with the unruly machine. "Clearly this was not an engine for a motor car," wrote Duryea long afterward, "but even more clearly it had all the elements needed for a successful motor car. It only needed to have each element refined, lightened and increased in capability. Here was the future power plant for the motor car." 7 More than five years would pass before Duryea, together with his brother Frank, brought this insight to fruition in the first operable gasoline automobile built in the United States. But even as Charles Duryea encountered the Otto engine for the first time, a German engineer had already made the necessary refinements in the four-cycle motor and converted it into a power unit for a light road vehicle. It was Gottlieb Daimler, the former manager of the Otto Gas Engine Works at Deutz, who created the light, compact and powerful gasoline motor that became the prime mover of the modern automobile. Between 1882 and 1883 Daimler reduced the weight of the Otto motor and increased its speed more than fourfold to 900 r.p.m. His air-cooled gasoline engine, completed on August 15, 1883, weighed about eighty pounds per horsepower, less than half the ratio of the Selden-converted Brayton motor (assuming the converted engine operated on three cylinders). The engine had improved carburetion and ignition, and successfully adjusted the mixture of air and gasoline vapor in the combustion chamber. Aware of the far-reaching implications of his achievement, Daimler was confident that he had "created the basis for a new industry." 8 He had deliberately developed his portable, high-speed engine for a motor vehicle. On August 29, 1885, Daimler received a German patent for a motorcycle using his engine. Soon afterward he built a four-wheeled vehicle with belt pulley transmission. Its one and one-half horsepower motor had an enclosed crankcase and incadescent tube ignition. The machine was patented in Germany on October 9, 1886 and in France on October 26, 1886. In 1888 the New York piano manufacturer, William Steinway, secured the American rights and produced Daimler motors for stationary, marine, and traction purposes at his Long Island factory. 32

II The Long Vigil

Karl Benz, a German contemporary of Daimler, pursued independent experiments which also eventuated in a practical motor vehicle. A manufacturer of gas engines at Mannheim, Benz produced a portable two-cycle motor developing one horsepower. It had electric ignition and a speed of 250 to 300 r.p.m. Benz applied the motor to a tricycle with belt and chain transmission. The machine was patented on January 29, 1886, although the inventor claimed to have operated it as early as the spring of 1885. On July 3, 1886, the Neue Badische Landeszeitung reported a successful road test of the Benz vehicle.9 Less technically advanced than the Daimler automobile, the Benz machine was improved in 1887. The United States patent on the Benz velocipede was issued on June 26, 1888, and the machine was described and illustrated in the Scientific American in 1889. As later developed by the Parisian auto builder Roger, the Benz used a four-cycle engine. It is bootless to claim priority for either Daimler or Benz as father of the gasoline automobile. More important is the fact that the Daimler high-speed four-stroke engine led directly to the rise of the motor vehicle industry. In 1891 the Parisian firm of Panhard & Levassor, which in 1886 had begun producing Daimler engines under license, brought out a horseless carriage designed by Emile Levassor that used the improved Daimler V-engine of 1889. The Panhard automobile, as developed by 1895, had the essential features and mechanical arrangement of the modern motor car. It had a separate body and chassis, with intervening elliptical springs; a vertical motor in front, with clutch and gearset behind the engine; and rear-wheel drive and hub brakes.10 The Panhard automobile soon demonstrated its superior performance. In June, 1895, it won an easy triumph over its rivals in an automobile race between Paris and Bordeaux, maintaining an average speed of almost fifteen miles an hour. This race not only made Panhard & Levassor the leader of the French automobile industry but also established the superiority of the gasoline engine over steam and electricity as the power plant of the automobile. Twenty-two vehicles started out from Paris. Of the nine horseless carriages which completed the 727-mile return trip within the specified driving time of one hundred hours, eight were propelled by gasoline engines. "It was an unquestionable and unquestioned triumph of the gasoline motor," American readers were told.11 33

Monopoly on Wheels

No longer was the automobile regarded as a toy in France, which led the world in the manufacture of motor vehicles until the opening decade of the twentieth century, when American auto builders took the first rank. "In Paris at this time a horseless carriage, driven by a petroleum engine, is so common a sight that it attracts no comment," reported Harper's Weekly in 1895. "It is not unlikely that this may also soon be the case in New York." 12 Already the first stirrings of the automobile age had been felt in the United States. 3

It was characteristic of the time that American pioneers of the automobile, like their European counterparts, worked in complete ignorance of each other. There was no regular medium of technical exchange. For the most part, independent efforts were obscured by a curtain of public indifference. Reports of experiments here and abroad occasionally filtered into the press, but they were fragmentary and aroused scant interest. "They obtained a place in the newspapers, chiefly in that space devoted to curiosities and freaks," said one of the early promoters of the automobile in the United States.13 It is highly doubtful that the Duryea brothers, commonly accredited as the builders of the first American gasoline automobile, were acquainted with the progress of automotive design and manufacture in Europe. The original sketches for the vehicle were drawn in 1891 by Charles E. Duryea; yet, even as the Duryea car remained on paper, Panhard & Levassor distributed illustrated catalogues (1891-92) listing passenger models for public sale. The Duryea tnotor car made its first run in September, 1893, at Springfield, Massachusetts.14 At the controls was J. Frank Duryea, who had been responsible for most of the developmental work on the machine. During these years the second successful gasoline automobile made by an American inventor was completed by Elwood Haynes, field superintendent of the Indiana Gas and Oil Company. The Haynes automobile was built by the Apperson brothers at the Riverside Machine Works in Kokomo, Indiana, and made its first run on July 4, 1894. Ransom E. Olds, of Lansing, Michigan, who in 1887 had built a steam car, completed a horseless carriage in 1895 but did not operate it until the following year. The search for an economical substitute for the horse motivated 34

II The Long Vigil

many of the pioneers. As Haynes said, "The great trouble with the horse was his lack of endurance and this became more apparent when he was driven day after day." 15 But another factor that stimulated interest in powered road transportation was the bicycle, which opened new vistas of free locomotion during the "bicycle craze" of the iSgo's. Such was the experience of Hiram Percy Maxim, plant superintendent of the American Projectile Company at Lynn, Massachusetts. A bicycle trip he made between Lynn and Salem in 1892 evoked the vision of a bicycle driven by a small engine. Maxim unhesitatingly chose the Otto gasoline motor, "blissfully ignorant," as he later wrote, that Daimler, Benz and others had anticipated his idea. "As I look back," remarks Maxim in Horseless Carriage Days, "I am amazed that so many of us began work so nearly at the same time, and without the slightest notion that others were working on the problem. In 1892, when I began work on a mechanical road vehicle, I suppose there were fifty persons in the United States working on the same idea." While each inventor was prompted by diverse and even accidental circumstances, said Maxim, the gasoline engine was not the central source of inspiration. It was the bicycle that "directed men's minds to the possibilities of independent, longdistance travel over the ordinary highway." 16 Maxim's insight into the influence of the bicycle is illuminating. Beyond a doubt the origin of the automobile owes much to the bicycle. "This simple machine has for the first time really put the human race upon wheels," observed the American Machinist in 1895; "its relative cheapness, its ready availability, its exhilarating influence and general all-around usefulness, making it one of the most popular vehicles ever devised." 17 But Maxim underestimated the key role of the gasoline engine. By its psychological impact, the bicycle created a demand for a better form of free road transportation; yet a wider radius of mechanical travel could not have been attained without the gasoline motor. Indeed, had this type of engine been unavailable to Maxim in 1892, his conception of a powered tricycle would have remained an idle dream. In 1895, when the "bicycle craze" was approaching its peak in the United States, few of the millions of cyclists turned their thoughts to mechanized locomotion. It was not until reports of the French automobile race held in June, 1895, appeared in the Ameri35

Monopoly on Wheels

can press that the horseless carriage became the object of lively curiosity. "Then the American people seemed to awake with a start to the importance of the motor vehicle," announced the first number of Horseless Age. "Where one inventor had been interested, a hundred now undertook to master the difficulties." The magazine estimated that three hundred motor vehicles were under construction in the United States between July ist and November ist, 1895. "Out of such a wealth of ingenuity many practical ideas are sure to come," it predicted. "While many lesser improvements will yet be made, the main problem of producing a practical and economical self-propelled road vehicle seems to have been solved." 18 Most of this was premature boasting and wild exaggeration, touched off by the impending automobile race sponsored by the Chicago Times-Herald. If there were indeed three hundred motor vehicles taking shape in American shops in 1895, the few automobiles entered in the Chicago race showed that most were failures. Eleven cars appeared for the contest on Thanksgiving Day, November 28, 1895, but only three negotiated the snow-covered course of 52% miles to the finish line.19 Among the cars which fell out early in the race were two electric vehicles. The first prize of $2,000 was won by J. Frank Duryea. That the three effective participants used autos driven by four-cycle engines underscored the European lesson of the gasoline motor's superiority. The Times-Herald race, as well as another contest held in New York City in May, 1896, under the auspices of John Brisben Walker, publisher of Cosmopolitan Magazine, aroused widespread interest in the automobile and encouraged American inventors to press ahead. Charles B. King, a Detroit engineer, publicly tested his machine on March 6, 1896. It was the first automobile built and operated in Detroit. Henry Ford, a friend of King, experimented with a gasoline engine late in 1895, while he was chief engineer of the Edison Illuminating Company in Detroit, and by the spring of 1896 had built his first horseless carriage in a brick shed housing his workshop in the rear of his home on Bagley Avenue. It was powered by a four-cycle engine and made its first run in June, 1896. A Scottish-born bicycle manufacturer in Cleveland, Alexander Winton, constructed an automobile which made its first road test in September, 1896. In 1897 he began its commercial production for the newly organized Winton Motor Carriage Company. 36

ii

The Long Vigil

By this time the motor car, although still a novelty, had secured a foothold in the United States. Within a few years the Duryea brothers and other pioneers were joined by hundreds of inventors seeking varying solutions to the technical problems of the automobile. The glowing announcements of enthusiasts could not hide the fact that many difficulties beset experimenters. "No problem yet before the American mechanic had proved so deceptive," said Charles Duryea. The conventions of the wagon industry impeded rather than helped the motor vehicle industry. "The most successful makers of automobiles were those who threw away or forgot all that had gone before and started a new science from scratch." 20 Durability, speed, comfort, and ease of handling remained to be improved. Ignition and lighting equipment were imperfect, the pneumatic tire was unreliable, and special metallurgical practice was faulty. There were no manufacturers of components, such as carburetors, magnetos, transmissions, and radiators. "The most ignorant chauffeur of today," said an automotive journal in 1912, "can buy parts and put together a car far superior to what the most skilled engineer of sixteen years ago could produce." 21 Despite the opening publicity burst of motor races, sustained popular interest and support were lacking. Auto builders had to fall back on their own inadequate financial resources. Many of them, laboring obscurely in barns, basements, and alley machine shops, sorrowfully noted that the field was "mainly in the hands of the inventor, who has not as yet been encouraged by capital." Investors quailed before the dubious prospects of the nascent automobile industry. "No safe, sound and conservative business man would consider such a thing as a horseless carriage," recalled one of the pioneers.22 The industry had little capital, virtually no market, and no complex of supply and collective technology. Only gradually, as operable handcrafted automobiles came from workshops in answer to public demand, would machine shops, foundries and other plants respond to the needs of the young automobile industry. Between 1895 and 1900, when the manufacture of motor vehicles in the United States began to assume recognizable form as an industry, the Patent Office reflected the bustling activity of inventors. A shower of patent applications on automobiles in the summer of 1895 was attributed by government officials to the in37

Monopoly on Wheels

terest stimulated by the Paris-Bordeaux race. In 1896 it was estimated that well over five hundred patents had been granted or were pending. "But the field, it seems, is yet open," said a writer who surveyed the scene in France and the United States. "The decisive system is yet unperfected. . . . The chief problems will be solved soon. . . . A fortune waits their conquerors." 23 In short, the motor car, as an invention and a marketable article, was in a fluid state of development. It invited exploitation by those who could attract financial support and combine mechanical ingenuity with managerial and manufacturing skill. Numerous inventors were improving the construction and arrangement of components, and taking out detail patents on particular machines. It occurred to none to patent the gasoline automobile as a basic invention. The generic concept was not regarded as the legal property of any individual. During these fruitful years when inventors came forward with hard-won solutions by trial and error, Selden had not so much as built a horseless carriage. Taking careful note of fundamental progress in the art here and abroad, he patiently nursed his patent application until 1895, at the dawn of the automobile age in America. His calculated delay in the Patent Office was the dalliance of a shrewd patent attorney. While other inventors infused their machines with life, Selden spun a paper web to ensnare the gasoline automobile as his original creation and legal monopoly. 4

The record of the Selden application in the Patent Office reveals the Rochester patent lawyer as a consummate master of systematic and intentional delay. After it became clear that the growth of the technical art had outstripped his own design, Selden considered it more important to keep his application pending than to have it issued. Gradually enlarging his original claims, he discarded specific limitations on his invention and spread a net of language to cover automotive structures subsequently disclosed by others. His legerdemain of delayed revision gave his claims a broader base. In this purpose he was abetted by the rules then governing Patent Office procedure. As a result, the patent finally allowed Selden differed substantially from the invention he described in 1879. 3S

II The Long Vigil

Like many another patent lawyer of the time who sought to cover competing structures of a later date, Selden was adept at drawing up an application or amendment with one or more claims whose allowance was not expected. Such maneuvers, designed to prolong the negotiations between the applicant and the Patent Office, extended the life of the patent, for the incidence of the invention began from the date of the application. The privilege of amendment was lawful, but intentional delay for the purpose of dominating an industry or an art which had meanwhile come into being was illegal. However, it was extremely difficult to prove deliberate delay with intent to embrace similar devices later invented by others. As a rule, such strategy could not be challenged unless the Patent Office commenced interference proceedings. This placed the burden of vigilance upon the Patent Office and its examiners. But the machinery of the Patent Office, inefficient and overworked, was unequal to coping with the tremendous expansion of the industrial arts between 1870 and 1900. The staff was deficient in numbers and quality. Many of the examiners were ill-trained and inexperienced, and the niggardly pay caused frequent turnovers. A heavy increase in the business of the Patent Office cramped the establishment. The disorderly storage of records, drawings, and other materials in hallways and shafts made patent searches a tedious labor attended by long delay. A functional classification system was virtually impossible. Scientific classification was still lacking in 1895, when the commissioner of patents made an appeal for a system that would permit rapid and accurate disclosure of the prior art. He noted that in the absence of proper classification "there have crept in errors and there remain deficiencies, almost entirely preventable, and yet inevitable from the vast avalanche of records." 2i Commissioners anxious to reduce the backlog of applications often hurried the work of examination without requiring a thorough and complete validity search. The staggering burdens under which the Patent Office operated during the pendency of the Selden application undermined the precise determination of priority. We have seen that in 1879 Selden turned aside from the further development of his modified Brayton motor and prepared his application for a powered road vehicle. Drawn on April 26, 1879, the application was filed with the Patent Office on May 8, 1879. The 39

Monopoly on Wheels

patent was not issued until November 5, i8g5- 25 During the intervening sixteen years and six months, no interference proceedings were initiated by the commissioner of patents to determine priority of invention. The undisturbed long sleep which his application enjoyed gave Selden the immense advantage of appropriating the teachings of other inventors. Not unjustly, the Selden patent has been termed as perhaps "the most notorious example of a delayed application." A writer who criticized defects in the American patent system called Selden "that prince of procrastinators." 28 Had the Selden patent been granted in 1879, the inventor would have been powerless to reap a material reward. The automobile industry was nonexistent; there was no felt social need for the motor car. The patent would have expired seventeen years later without bringing a penny to Selden. He could not predict the approximate time when his patent would have a potential earning power, but he knew that his invention was commercially worthless so long as the horseless carriage was considered a freak. By design, therefore, Selden did not press his case vigorously before the Patent Office. He merely complied with the letter of the law to keep his application alive until fortune should beckon. Taking full advantage of the statutory provisions governing the prosecution of patent applications, Selden leisurely submitted amendments and took other lawful delaying actions until it became apparent that the time for issue was propitious. His success in broadening the foundation of his patent and in deferring the grant until a measurable social demand arose for the automobile gave him the opportunity to use his claims for profit. Time was Selden's ally, but the partnership was cemented by the rules of the Patent Office. Under them a knowledgeable and far-seeing applicant could delay the issue of his patent almost indefinitely. Selden turned to account one of the prime weaknesses of the American patent system: the evil of the long-pending application. Other inventors of that day also tried to profit by this flaw in procedure. Few matched the tactics of Selden. The delayed patent application was a vexing problem which persisted in gross form until the end of the nineteenth century. Under the law of 1836 no time limit was set for replying to a Patent Office action. When this led to serious abuses by applicants, the Patent Act of 1870 fixed a two-year term for completing or per4°

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The Long Vigil

iecting applications. However, the allowed period was renewable without limitation. Thus a statute directed toward eliminating a common evil actually had an opposite effect. It created a vogue of willful delay that coincided with the rapid expansion of Patent Office business. The long-pending application became so widespread and serious that in 1887 the commissioner of patents called for legislative measures to prevent this means of exerting a grip over a developing industry. The law of 1870 remained in force until 1897, two years after Selden received his patent, when the statutory period was reduced to one year. It is plain that Selden enjoyed every legal advantage for attenuating the life of his application. The procedural apparatus moved in an endless circle. Any action taken by Selden required a corresponding step by the Patent Office. However prompt the reply by the government, Selden was permitted to exhaust the full limit of two years before making the answer stipulated by law. That he raised delay to the level of an art is established by the record of Patent Office applications for key inventions of the nineteenth century. Of more than sixty leading American patents issued between 1840 and 1899—among them the Morse telegraph, the Corliss valve gear, the Edison electric lamp, and the Bell telephone—the Selden patent had the longest sojourn in the Patent Office.27 From the standpoint of delayed prosecution, the only major patent which came within hailing distance of it was the Berliner telephone transmitter.* It should be remembered that Selden was only one among many who resorted to this legal stratagem. Patent commissioners were acutely aware of the abuse, but could do nothing to combat it until Congress acted. "There are applications now in the Office which have been kept alive nine or ten years," reported the commissioner of patents in 1887, "and the Office is powerless to compel speedier or earlier action on the part of the applicants." He strongly urged an inquiry and appropriate remedies. In 1894, a year before Selden received his patent, the commissioner presented the findings of an exhaustive investigation that cited numerous cases of inordinate delay. Of 12,000 applications which had been before the Office for two years or more, five had been pending for fifteen years. Although * Issued in 1891, the Berliner patent had a pendency of fourteen years and five months. 4i

Monopoly on Wheels

no instance was identified by name, this handful of extreme examples included the Selden application. The commissioner meaningfully remarked that where valuable inventions were involved, intentional delays were used to defer "the issue of the patent in order that the seventeen years of exclusive use under it may begin from a future date and under a more fully developed art." 2S By 1895 the evil of the delayed application waxed like rank jungle growth. To offset its encroachments, the Patent Office adopted a rule requiring applicants to show cause why cases of long standing had not been prosecuted with dispatch. Examiners were empowered to reject applications which had been nursed through an unreasonably long infancy. This rule, which went into effect on April 15, 1895, was applied conservatively. Both as a patent lawyer and an applicant, Selden learned immediately of its adoption, and he hastened to comply. Its enforcement, however weak, may be another reason why Selden completed his application in 1895. Yet any fears which Selden may have harbored on this account were needless. In the suit brought in 1893 for cancellation of the Berliner telephone transmitter patent, the federal government charged fraud on the ground that the issuance of the patent had been deliberately delayed to afford the Bell Telephone Company an extended monopoly. The patent was upheld. The court ruled that where no fraud was shown, an applicant was entitled to wait until the final day of the statutory two-year period before amending his application. Selden could feel secure. He had stayed completely within the letter of the law. 5 Although issued in 1895, the Selden patent applied to the state of the art as it stood at the time Selden filed. It therefore comprehended the technology of the gasoline automobile from 1879 onward. By sinuous maneuvers the patent rights were stretched to cover a period of almost thirty-four years, until the expiration of the grant in 1912. It is one of the paradoxes of the American patent system that such sweeping claims were awarded to an individual who made no practical contribution to the art of the motor car during its most vital phase of experimental development.

43,

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The Long Vigil

Between 1879 and 1895 Selden unhurriedly submitted his amendments, almost always replying to the rejections of the examiner within a few days before the two-year period expired. He did not appeal a single rejection. During the life of the application the Patent Office made no objection that could not have been answered with reasonable dispatch by a patent attorney familiar with the rules of procedure. Even for so trivial a cause as furnishing a smooth copy or a new oath, Selden took advantage of the full limit allowed by law. The life of his application shows approximately one hundred separate changes made by Selden. All of the nineteen original claims were cancelled and replaced by strategic revisions. During its entire pendency the application was actually handled by the Patent Office for a total of about seven months. For making eight replies to Office actions and paying the final fee, Selden took fifteen years and eleven months. The patent was granted on November 5, 1895, when Selden received United States Patent No. 549,160 for an "improved road-engine." The statement of invention in the original application was identical to that set forth in the patent as issued: "The object of my invention is the production of a safe, simple, and cheap roadlocomotive, light in weight, easy to control, and possessed of sufficient power to overcome any ordinary inclination." Citing the disadvantages of the ungainly and inefficient steam-propelled vehicles known in the art, Selden declared that he had surmounted "these difficulties by adapting to the purposes of traction a gasengine. . . ." The term "gas-engine," sometimes varied by allusions to "hydrocarbon engine," recurred throughout the original nineteen claims. But nowhere did Selden for many years use a term signifying the compression gas engine. Selden patented a mechanical structure consisting of the compression internal combustion motor in combination with all of the fundamental elements of the gasoline automobile. In general terms, his patent designated correctly the basic components of the motor car: the body, running and steering gear, clutch, power shaft, and liquid fuel tank. None of these separate elements was new in the art of 1895, nor did Selden lay claim to any one of them. The asserted novelty of his invention was the combination of these features with the compression internal combustion engine using liquid hydrocarbon fuel. Combination patents yielding a new and 43

Monopoly on Wheels

useful result through the novel reorganization of well-known elements occupied a secure place before the law. One Patent Office examiner who doubted whether the Selden combination was novel noted in 1893 that "no invention is believed to lie in substituting a Brayton engine for a steam-engine in the manner expressed in said claims." Nevertheless, the claim was approved. Had the Patent Office restricted Selden to the specific engine he described, he would have been limited to a motor vehicle using the modified Brayton engine and his patent would have been stripped of its broad character. By juggling the phraseology of his original claims, Selden expanded them to cover all types of compression gasoline engines, a feature on which his initial application had been notably silent. In 1879 no comparable specification and claims for a particular machine had been embodied in letters patent. By 1895 they had already been issued to other inventors. While Selden made no specific verbal reference to the Brayton motor, a technician acquainted with the art could have easily detected this indebtedness in the drawing which accompanied the application. Indeed, Selden at first had no intention of departing from the Brayton two-cycle principle. Learning of the Otto fourcycle engine before Daimler converted it to automotive use, Selden casually brushed it aside with the comment that the "Dutch way of Otto was impracticable." In 1882, while considering an improvement in his modified Brayton motor, Selden wrote that "in some way this may be done without using so Dutch a plan as Otto's." 29 But his contempt for the Otto principle gave way to sober interest after he learned of European progress. The turning point of the Selden claims came in 1888—89. ^ n 1888 United States patents were granted to Daimler for his engine and to Benz for his vehicle. As a patent attorney with a special interest in the horseless carriage, Selden probably became acquainted with the Daimler and Benz patents through the pages of the Official Gazette or general publications such as the Scientific American. The government sold copies of the patents for five cents each. Selden later admitted that he saw an illustration of the Benz vehicle in a popular weekly in 1888. His vigil over contemporary advances in the automotive art was ceaseless. By the close of the i88o's, after Selden had ferreted out "every patent and important publication in the English language upon gas and steam engines, 44

II The Long Vigil 30

and road locomotion," he knew that his claims would not have a basic character unless he covered all types of petroleum compression engines. It was thus that on June 6, 1889, Selden for the first time introduced a significant change in the wording of his key element. He amended the term "hydrocarbon gas-engine" to give his claim a broader scope. "Any form of liquid-hydrocarbon engine of the compression type," he said, "may be employed in my improved road-locomotive." Selden declared that he was "not aware that previous to the date of my invention any attempt was made to reduce the weight of a road-locomotive by the production of a compression liquid-hydrocarbon engine capable of locomotion, or that there was described or constructed a compression hydrocarbonengine of such a design that it was capable of propelling a roadlocomotive, more especially when the engine was so designed as to leave the body or platform of the carriage practically unobstructed for the conveyance of passengers or freights. . . ." This assertion, while manifestly true in 1879, did not accurately describe Selden's knowledge of the art ten years later. In reference to the compression gasoline engine, Selden also stated: "As the general construction and mode of operation of liquid-hydrocarbon engines are now well known, it is considered unnecessary to further describe them here." In this single sentence, he entrapped the culminating achievement of the automotive art. Later he struck out words or phrases that might compromise his position before the law. In July, 1895, only three months before his patent was issued, Selden requested cancellation of the term "compression mechanism" from his claims. He contended that "the said words are unnecessary, a mere repetition or reiteration, and surplusage, in view of the prior statement of each of the said claims that the engine therein specified is 'of the compression type.' " His petition was granted, but Selden could not change his drawing and specification, which clearly showed the external compression mechanism of the Brayton engine. For all of his disclaimers, Selden had taken refuge in ambiguity to safeguard the comprehensive scope of his patent. The engine was not the only feature which Selden adjusted to the changing art. While the drawing submitted in 1879 showed the engine mounted on the front axle, Selden made this position op45

Monopoly on Wheels

tional in an amendment entered in 1889. This change was timely, for by 1895, when rear-wheel drive was generally accepted, the front-axle mounting was an oddity. As for other details, they revealed that Selden had not progressed beyond the builders of carriages and wagons. His fifth wheel arrangement for steering was adapted from the horse-drawn vehicle. The reversing mechanism was awkward, specifying that the front driving wheels "may be turned completely around underneath the driver's seat whenever it becomes necessary to propel the carriage backward." A brake on the trailing wheels was controlled by a cord connected to a footlever on the front platform. No provision was made for changing speeds with a gearshift device. The Selden claims were divided into six groups, each describing the elements of his structure in their form as a combination. The statement of invention epitomized the transition from steam to gasoline power: The difficulties heretofore encountered in the application of steam to common roads are the great weight of the boiler, engine, water, and watertanks, the complicated apparatus necessary to adapt the machine to the roughness of the roads which it must traverse, the necessity of the attendance of a skilled engineer to prevent accidents, and the unsightly appearance of the locomotives built on this plan. I have succeeded in overcoming these difficulties by the construction of a road-locomotive propelled by a liquid-hydrocarbon engine of the compression type, of a design which permits it to be operated in connection with the running-gear, so that the full carrying capacity of the body of the vehicle can be utilized for the transport of persons or goods, and which, by dispensing with skilled attendance and with steam-boilers, water, water-tanks, coal, and coal-bunkers, very largely reduces the weight of the machine in proportion to the power produced and enables me, while employing the most condensed form of fuel, to produce a power road-wagon which differs but little in appearance and is not materially heavier than the carriages in common use, is capable of being managed by persons of ordinary skill at a minimum of trouble and expense, and which possesses sufficient power to overcome any usual inclination.

This was clear enough, except for the belated reference to the compression gasoline engine. For all of their substantial differences, could the compression mechanisms of the Brayton and Otto engines be viewed as one and the same structure? Was Selden's description of his two-cycle motor in accord with the four-cycle engine adopted by the pioneers who built their horseless carriages after 46

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The Long Vigil

he filed his application? In making his most vital change, had he not incorporated the teachings of other inventors? Whether Selden was entitled to the gasoline automobile as his exclusive invention depended upon the answers to these questions. Long before, a discerning justice of the Supreme Court of the United States had expounded upon the evils that might flow from the blurring of detail in the wording of a patent. His pronouncement, as read in light of the subsequent history of the Selden patent, is almost prophetic: To escape the incessant and intense competition which exists in every department of industry, it is not strange that persons should seek the cover of the patent act, for any happy effort of contrivance or construction; nor that patents should be very frequently employed to obstruct invention, and to deter from legitimate operations of skill and ingenuity. This danger was foreseen, and provided for, in the patent act. The patentee is obliged, by law, to describe his invention, in such full, clear, and exact terms, that from the description, the invention may be constructed and used. Its principles and modes of operation must be explained; and the invention shall particularly "specify and point" out what he claims as his invention. Fulness, clearness, exactness, preciseness and particularity, in the description of the invention, its principle, and of the matter claimed to be invented, will alone fulfil the demands of Congress or the wants of the country. Nothing, in the administration of this law, will be more mischievous, more productive of oppressive and costly litigation, of exorbitant and unjust pretensions and vexatious demands, more injurious to labor, than a relaxation of these wise and salutary requisitions of the act of Congress.31

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Ill Mr. Whitney Comes to Hartford

T

HERE is no doubt that in 1895 the Selden automobile was obsolete. The patent disclosed nothing that pushed forward the frontiers of technology. In its details, the Selden structure was inferior to the horseless carriages made by automotive pioneers after 1885. But, as the creation of a patent lawyer, the Selden car was an almost impeccable legal invention. All United States patents are valid on their face; and, according to the claims of his grant, Selden was the original inventor of the gasoline automobile. That he had not constructed an actual motor car did not affect the status of his patent. At its issue, the Selden patent received the blessing of high authority. In his annual report for 1895, Commissioner of Patents John S. Seymour heralded it as one "which may be considered the pioneer invention in the application of the compression gas engine to road or horseless carriage use." The patent had immense potential value because it awarded the inventor a legal monopoly when the commercial possibilities of the gasoline motor car loomed on the American industrial horizon. 1

Seymour's generous praise found no support from those who were actually building motor vehicles. Inventors took scant notice of the Selden claims when the patent was published in Horseless Age. That journal reflected the viewpoint of most automotive experimenters when it observed: "Many have contended and still contend that no basic patents can be held in the application of a hydro-carbon engine to the propulsion of road vehicles." Some investors, it acknowledged, were reluctant to enter the motor car 49

Monopoly on Wheels

industry for fear of infringing a fundamental patent. Horseless Age assured the timid that "no basic patents are obtainable in this line." l Generally it was the investor, rather than the engineer or technician, who became alarmed when knowledge of the patent spread throughout the industry. One night in 1896 Charles E. Duryea was routed out of his bed in the Grand Union Hotel in New York by one of his stockholders in the Duryea Motor Wagon Company. The investor was limp with anxiety over the Selden patent, but Duryea did not share his feelings. "If I had seen mention of the patent before that time," said Duryea in his account of the incident, "it produced so little impression that I arn unable to recall it." 2 Duryea had patented his own automobile on June 11, 1895, about six months before the Selden patent was issued. It is conceivable that he could have framed an application for a broad patent, but he had been satisfied to base his claims on particular improvements. Like any other automotive pioneer, he did not believe it was possible to engross an invention that was in the public domain. Duryea took the measure of the Selden patent, detecting in the Brayton engine the flaw in its broad claims: "I maintain that this type of engine shown and described by Selden is the type understood and referred to by him as a 'liquid hydro-carbon gas engine of the compression type,' and that if he is entitled to anything he is entitled to a device employing this type only." 3 Others were even more forthright in condemning the claims. European automotive engineers who had built marketable machines while the Rochester lawyer was still amending his application derided the Selden patent. When it came to the attention of Panhard & Levassor, their technical director scornfully characterized it as "antediluvian" and rejected the patent as a wholly useless guide to the construction of an operable automobile. Selden held only a paper patent. That he had not built a car was another reason why automotive designers and manufacturers ignored or ridiculed his claims. One may make out a case for the inventor of modest means who in 1879 set down the first comprehensive description of the motorized road carriage. If the Selden horseless carriage had occupied in 1895 the same relative position it occupied in the art in 1879, there would be no question that the inventor deserved honors, fame, and 5°

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a fair material reward. But the automotive art had moved forward with great strides. None of its leading inventors was indebted to Selden. On the contrary, he was under heavy obligation to others who had improved the key element of his patent. Selden later said that long before receiving his patent he made repeated efforts to obtain financial support for building his road vehicle. The subject was broached to many of his clients and fellow attorneys without winning their interest. In 1882, wrhen he approached two prospects, he evoked no response "beyond getting them to express a kind of commiseration for my family." His proposal was also declined by manufacturers of carriages and agricultural implements. Most of his opportunities for attracting investors seem to have arisen in 1886, when Selden exhibited his uncompleted motor to many persons, including George Eastman. A promoter who said he required $5,000 to build the car failed to raise even a fraction of that amount. Of the two persons who appear to have been genuinely interested, one died and the other went into bankruptcy before their assistance could be proffered. This almost uniform lack of enthusiasm was attributed by Selden to the novelty of his proposed road wagon. "If it had been a merely mechanical invention, such as anybody could examine and look at and learn all about by mere inspection," he said, "I think I should have had more success than I did, but here was something mysterious, chemical, the combustion within the cylinder, which the man with the ordinary mechanical education did not readily comprehend and consequently in which he could have little confidence." 4 This was true enough. Siegfried Marcus, for example, had learned as much to his sorrow. This reaction fortified Selden's belief that the world was not ready for an idea so far in advance of the time. But when the day should come that it was accepted as a socially useful invention, would Selden have to step aside and see the rewards and recognition go to others? During these years when he sought but failed to find investors, Selden redoubled his determination to preserve the pioneer status of his claims. Actually, Selden was fortunate in being unable to find financial supporters in the mid-i88o's. His investors would have insisted upon patent protection. Selden's rights, had they been granted in 1885, would have expired in 1902, before motor cars were produced in volume. More important, the foundation of his broad patent 51

Monopoly on Wheels

would have been destroyed, for the claims would not have included the amendments covering all types of compression gasoline engines. By 1900 a machine constructed to such a patent would have been a museum-piece. But under the patent of 1895 no gasoline motor car could be made, sold or used without Selden's permission. To be sure, the claims had only a theoretical value for exploitation. The American patent system has no statutory provision for enforcing the rights of an inventor. Four avenues were open to Selden. He might manufacture his own machines and become the nation's sole maker of gasoline cars. This course was manifestly impossible unless he secured capital. As a second alternative, Selden might persuade manufacturers to take out licenses and pay royalties. Failing this, he might bring infringement suits against trespassers; but such actions were notoriously expensive and protracted. Finally, Selden might assign his rights to organized interests capable of implementing the legal monopoly. Like any lone inventor in a day when patent development was rapidly becoming the province of the corporation, Selden lacked the one needful weapon for enforcing his monopoly: capital. Without the means to bring infringers to book, he could only look on helplessly as others built and sold the gasoline motor car of which he was assertedly the pioneer inventor. 2

"Yesterday, a mere mechanical wonder fresh from the hand of the inventor; to-day, a gigantic industry on two continents—that is the history in brief of the motor vehicle," wrote Ray Stannard Baker in i8gg.5 In the first half of that year, he noted, companies with a gross capital of more than $388,000,000 had been established for the construction and operation of motor vehicles in the United States. This imposing sum was actually a financial air castle of Eastern promoters. As yet, the American automobile industry rested on a flimsy underpinning. Wildly inflated paper investments exceeded by far the fixed assets and producing capacity of the young industry. While an English trade publication listed three hundred American manufacturers, those closer to the scene admitted that only a handful of auto makers were placing their vehicles on the market. 52

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"The auto industry in America has not emerged from swaddling clothes as yet," said a sober chronicler. "The much heralded schemes of stock jobbers and the excessive values put on devices of doubtful merit would lead the casual reader to believe that the industry is at present employing tens of thousands of men. This is of course not within gunshot of the truth." 6 A flood of promotional literature failed to conceal the fact that ninety per cent of the business consisted of stock jobbers who had not produced a single vehicle. Europe still led the United States in output. The grandiose promotion schemes of 1899 showed how radically investors had changed their attitude in a few years. In 1895, financiers had been stonily indifferent to motor vehicle development; in 1898, seventeen makers produced 239 cars with a combined value of $219,600. Even on such a modest showing, Eastern capital scented an opportunity for reaping profits. Within a short time stock promoters organized undertakings of pretentious scope. The impulse toward bigness appeared very early in the history of the motor car industry. Among the typical aggregations was the Continental Automobile Company, which had a capital stock of $8,000,000 and boasted control of fifty-nine patents on the gasoline automobile. It passed from the scene without ever having begun manufacturing operations. The American Automobile Company, another paper combination, was capitalized at $10,000,000. Hailed as the "automobile trust," it vanished before producing a single car. In 1900, thirty-four companies with an aggregate capitalization of $173,000,000 were incorporated. Most of these also sank from sight.7 Such schemes were doomed to fail for two reasons. First, the boundless optimism of promoters exceeded actual possibilities. The automobile was not a social utility. It was a plaything of the wealthy, and motor car festivals at Newport and other Eastern resorts showed how readily this new toy had been received by the Vanderbilts, Astors, Belmonts, and other members of high society. The 3,957 motor cars made in the United States in 1900 were purchased chiefly by the rich.8 A market of this kind could hardly support vast combinations. Moreover, most of these automotive promotions were organized as speculative enterprises without plant and equipment. The companies which enjoyed success were not the creations of stock promoters. They began modestly in small 53

Monopoly on Wheels

shops, with cash furnished by entrepreneurs, and their growth was nourished by the reinvestment of earnings and by the credits extended by parts-makers. Even so, the procession of multi-million dollar stock-jobbing ventures rolled forward. "The formation of automobile companies has been so frequent lately that the announcement attracts no attention now," remarked Horseless Age in 1900. It estimated that while more than five hundred firms had been chartered, only about thirty were engaged in production. A frenzy of speculation in motor vehicle stocks seized the public. Inventors besieged the Patent Office with applications for detail patents, and before long patents became important as capital looked for guarantees against excessive competition. "To aim at the control of as many patents as possible has become the fad among prospective manufacturing companies," commented a trade observer. "Since it commenced to be realized that hardly any one patent held fixed rank and value in the estimate of financiers, security is being sought in the possession of a multitude of them or in combinations of the patents severally owned by a number of companies." 9 Automobile circles were swept by rumors of combinations bent upon acquiring patents with the aim of monopolizing the industry. Those who favored open competition inveighed against the manipulators. "The claim that by any amalgamation of patents the gasoline motor vehicle industry can be monopolized is one which should be discountenanced, discouraged and exposed," urged Horseless Age, which early took a stand as an inveterate foe of automobile trusts. Citing the failure of monopolistic schemes in Great Britain and France, it maintained that "the utter lack of basic patents" on self-propelled vehicles precluded domination by a trust. It saw the future of the industry in the untrammeled efforts of inventors supported by capital committed to free competition.10 None of these rumors mentioned the Selden patent, which by 1899 was shrouded in obscurity. In Rochester, Selden attended to his law practice, far removed from developments in the industry. In the three years since receiving his patent he had made no attempt to build his vehicle. The engine he had constructed in 1878, and operated at infrequent intervals in the following twenty years, rusted in oblivion in his home. For all practical purposes, his patent was hardly worth the parchment on which it had been issued. In 54

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1896 a representative of the Winton Motor Carriage Company, of Cleveland, paid Selden twenty-five dollars for a ninety-day option on a license to manufacture cars under the patent.11 This was the first gain Selden realized from his invention. However, the option was never taken up. The rest was silence. By the end of the century the Selden patent was forgotten, and its deep sleep in the maze of the Patent Office was undisturbed. Only an alert and well-informed inventor or engineer could have been conscious of its existence. Then, suddenly, the wheel of fortune turned in Selden's favor. It revolved under the empire-building impulse which brought together Wall Street interests and New England mechanical skill in a partnership that created the most imposing combination of the infant automobile business. 3

The use of the automobile for public transportation in the United States began in January, 1897, when the Electric Carriage and Wagon Company placed its motorized hansom cabs on the streets of New York City. Originally organized in 1896 by two Philadelphia automotive pioneers, Henry G. Morris and Pedro G. Salom, the Electric Carriage and Wagon Company had been sold to Isaac L. Rice, who announced himself as "father" of the electric vehicle industry in this country. Rice was president of the Electric Storage Battery Company of Philadelphia, which held the Brush patent on lead storage batteries and supplied Exide batteries for the hansom cabs. His interest in public transportation was directed toward assuring a stable "feeder" market for batteries, of which the Electric Storage Battery Company, established in i895, was the leading manufacturer. Rice launched his New York venture on a modest scale, with a dozen cabs that ran six to ten miles an hour. This service, said to be the first of its kind in the world, was hailed as a sign that "the long-awaited era of mechanical locomotion on roads and highways has arrived." The success of the enterprise encouraged Rice to expand his operations. On September 27, 1897, he organized a new firm, the Electric Vehicle Company, a New Jersey corporation with an authorized stock of $10,000,000 and a paid-in capital of $3,000. Rice leased larger quarters in New York and drew up 55

Monopoly on Wheels

ambitious plans to equip and operate several hundred cabs. His hope that storage batteries for vehicles would find wider use was partly fulfilled by the development of the electric auto. In 1897 electric carriages accounted for 7,500 Exide plates for lead accumulators; in 1898, this outlet took 46,000 plates.12 Despite the proved superiority of the internal combustion engine as the power unit of the motor car, the electric vehicle held public favor until shortly after 1900. Of the twenty makes of cars exhibited at the Chicago automobile show in 1900, most were electric vehicles. The gasoline engine, for all of its improvements, irked fastidious drivers by its jolting vibrations, its malodorous fumes, and its emissions of fuel and oil. The electric motor, with its clean and noiseless operation, was preferred by the wealthy who made up the automobile market between 1895 and 1900. Manufacturers naturally bowed to consumer preference. From a practical standpoint, however, the electric motor and its lead-plate batteries were inferior to the gasoline engine. There was general agreement that the electric car was best adapted to city driving. Its cruising radius was limited to about forty miles on a new battery and eighteen miles on a recharged accumulator. It depended upon a centrally situated charging station, manned by skilled workers, where expensive equipment was required for changing batteries after each trip. Recharging took eight hours. The weight of the batteries was a serious drawback. Each storage unit weighed 1,200 pounds, almost half of the total electric cab load of 2,500 pounds.13 The reputation of the electric vehicle lived off the imperfections of the gasoline engine. Rice established a network of charging stations in Manhattan and by the close of 1898 had one hundred electric cabs in service. The Electric Vehicle Company was able to reduce its rate to thirty cents a mile, twenty cents lower than the prevailing charge for horse-cab transportation. Part of the reduction was made possible by improved charging-station service furnished by an engineer, George H. Condict, who designed special berths and hydraulic equipment for changing batteries in thirty seconds.14 But station operations still required hundreds of men for tending the electric cabs, and overhead and labor costs remained high. The defects of the electric cab did not detract from the novelty and value of the Rice fleet. Indeed, these were enhanced when a 56

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heavy snowstorm early in 1899 stalled city streetcars and forced horse-drawn cabs to quit. Although the electric vehicles could not plow through the heavy snowdrifts, they negotiated the cleared sidewalks without difficulty. New Yorkers were impressed. Among those whose interest was kindled was William C. Whitney, a New York lawyer and financier who had served as secretary of the navy in the first administration of President Grover Cleveland. Whitney was perhaps the most forceful figure in the powerful group of Eastern traction promoters known as the Whitney-Ryan syndicate. This alliance, which has been credited with originating the holding company as an instrument of financial manipulation, had no formal character. It was a union of capital resources dating from 1893, when Whitney and his associates used their holding unit, the Metropolitan Street Railway Company, to capture control of the New York street railways. Although the syndicate was active in banking and industrial combinations, it was best known for its forays into the field of public transportation. The other members of the group included Thomas Fortune Ryan, Anthony N. Brady, Peter A. B. Widener, William Elkins, and Thomas Dolan.15 When the Metropolitan Street Railway Company expanded its scope in 1894, it experimented with electricity and compressed air, and settled upon electricity as the better motive power. For reasons of economy, the Whitney syndicate decided to use electric storage batteries instead of centrally generated power transmitted through underground conduits, and moved to gain control of its source of supply. In 1896 Whitney and his associates purchased more than a million dollars of stock in the Electric Storage Battery Company. Their holdings assumed added importance soon afterward, when Rice inaugurated his electric cab service. After the Electric Vehicle Company cabs showed their mettle in the New York snowstorm, swarms of Wall Street speculators were attracted to Electric Vehicle stock. A heavy demand for its shares early in 1899 made prices soar 50 points above the par of 100. The reason for this sudden rise was the attempt of the Whitney syndicate to seize control of the company. Failing to corner the stock, Whitney finally arranged a meeting with Rice, who agreed to sell his interest at $141 a share, a price which netted him a handsome profit. Rice remained president of the company, but actual 57

Monopoly on Wheels

control was vested in the Whitney syndicate, \vhich projected electric auto transportation lines in major cities across the country. Its initial requirements called for two hundred electric vehicles.10 In 1899 no automobile manufacturer in the United States or Europe had the resources for filling such a large order within a short time. After searching for a suitable plant, the syndicate decided to use the facilities of the Pope Manufacturing Company of Hartford. In the opening days of April, 1899, shortly after acquiring the Electric Vehicle Company, Whitney conferred with Colonel Albert A. Pope in New York City.17 Their meeting was the first step toward an alliance which raised the Selden patent from obscurity and made it a weapon of monopoly. 4

The reasons which brought together the Whitney syndicate and a New England manufacturer illuminate the character of the early motor vehicle industry in the United States. New England was the cradle of the American automobile industry. In 1899 no other section was so deeply immersed in the commercial development of the automobile. Its numerous machine shops and foundries, and the traditions of precision workmanship stemming from the days of Eli Whitney, Simeon North and Samuel Colt, provided a nursery of skills for motor vehicle builders. The industrial plants of the region, particularly the bicycle factories, with their machine tools and advanced techniques of small unit assembly, facilitated the application of factory methods to automotive output. At the beginning of the twentieth century New England led the country in the production of motor vehicles. Most of the automobiles made there were powered by steam or electricity. In contrast to the motor car plants \vhich soon sprang up in Michigan and Ohio, the New England factories were slow to develop the gasoline automobile, and by 1905 the region had lost its leadership to Detroit, Lansing, Flint, Toledo, and other Midwestern centers. At the peak of automotive production in New England, the foremost maker was the Pope Manufacturing Company. It was the first large industrial firm in the country to appreciate the market possibilities of the motor vehicle, and the first to construct automobiles on a factory basis.18 $S

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The Pope motor carriage department at Hartford was an offshoot of the bicycle company founded in 1878 by Colonel Albert A. Pope, one of the major figures in American road transportation in the last quarter of the nineteenth century. Remembered as the "father of the American bicycle," Pope was in his day the leading apostle of the good roads movement. His bicycles, which supplanted the cumbersome "ordinaries" of the post-Civil War decade, were initially made under contract by the Weed Sewing Machine Company of Hartford, where Pope later erected factories employing 5,000 XTOrkmen. Integrated manufacturing operations attained a high level of development at the Pope bicycle works, in some ways prefiguring the concentration of resources in the modern automobile plant. The company's most striking accomplishment was the Columbia safety and chainless bicycle, unexcelled by any other domestic manufacturer. It made Pope's fortune.19 Pope had the instincts of a captain of industry. He spent a halfmillion dollars to perfect a bevel gear for the Columbia chainless bicycle, and a million more to develop a rigid frame for housing the gear. He brought into the company a former naval lieutenant and ordnance inspector, Harold Hayden Eames, who organized a mill for fabricating seamless nickel steel tubing with superior annealing properties. The mill was one of the industrial wonders of New England. In 1892 Pope called in Henry Souther, a Hartford consulting engineer, to establish a laboratory for scientific research in metallurgy and the improvement of bicycle design. It was said to be the first laboratory of its kind in New England, without peer save in the large steel mills. Pope had an extraordinary capacity for enlisting young men of promise as executives and technicians. His chief lieutenant was George H. Day, former head of the Weed Sewing Machine Company. Born in 1851, Day was still in his twenties when he left the insurance business in Hartford and urged Pope to convert the Weed plant to the manufacture of bicycles. In 1879 Day was made secretary of the Weed firm and soon became its guiding spirit. His association with the sewing machine industry, the first in the United States to establish a patent pool, taught him the importance of patents as levers for commercial advantage. The ease with which the Weed plant shifted its output from sewing machines to bicycles demonstrated the adaptability of New England techniques of 59

Monopoly on Wheels

interchangeable small parts manufacture. In 1890, when the Weed Company was absorbed by Pope, Day joined the Pope Manufacturing Company as vice-president and general manager. Other members of the Pope staff included Hermann F. Cuntz, a mechanical engineer and patent expert who acted as the company watchdog for patent infringements, and Milton J. Budlong, a young Westerner who had been a Pope bicycle agent before coming to Hartford. This corps of capable assistants was stirred to ever bolder accomplishment by Colonel Pope's enthusiasm for large undertakings, which raced through the company like an electric current. In 1895, as Hiram P. Maxim said, the Pope engineers and technicians could have built "flying machines if they had wanted to"— a tribute to the superb industrial methods which the Pope organization evolved after George H. Day became head of its operations.20 Day had managerial abilities of a high order. Under his direction the Pope plant became the leading American producer of bicycles. He made the Pope and Columbia machines household words for a generation of cyclists. A shrewd and masterful executive, he was known in the trade for his patience, charm, and tact. Inventors who believed they had originated basic designs or constructions for the bicycle inevitably sought out Day. "If Mr. Day did not buy their inventions," it was said, "he always dismissed them so courteously that they were invariably glad they had called on him, and were sure that they had at last met a man of sympathy and a gentleman." 21 His winning manner, and his ability to reconcile conflicting views, were to be of prime importance in the history of the Selden patent. Day was one of the first industrialists to recognize the market potentialities of the automobile. And it was he who brought Hiram P. Maxim to Hartford to build horseless carriages for the Pope Manufacturing Company. 5 The Pope plant in Hartford "was truly the nursery of the infant [automobile] industry," recalled Hermann F. Cuntz a half century later.22 The claim is not excessive, although the infant, no sooner than it felt the first flush of strength, struck out for the 60

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Middle West. The inception of the motor vehicle industry in New England was almost accidental. The chance seed was planted when the young ordnance engineer, Hiram P. Maxim, called on Hayden Eames at the Pope tube mill in May, 1895. Maxim, who was developing his gasoline-powered tricycle, came from Lynn, Massachusetts, where he was factory superintendent of the American Projectile Company. He had known Eames as a naval ordnance inspector. When Maxim described his plan for building a motor vehicle, Eames gruffly dismissed it as a waste of time. A motorized bicycle, he insisted, would offer no calisthenic benefits for the user. This brusque rejection did not close the episode. Learning of Maxim's experiments, George H. Day did not discourage the young engineer, but instead courteously inquired about his scheme. Day's interest was aroused, and a short time later, after sending Henry Souther to Lynn to report on the self-propelled tricycle, he invited Maxim to become engineer of a newly formed motor carriage department in the Pope Manufacturing Company. In July, 1895, Maxim began at Hartford two years of hard work on the experimental development of electric and gasoline vehicles. It soon became apparent to Maxim, who had adopted a small Otto engine for his tricycle, that the Pope executives had small understanding of the gasoline engine and even less regard for its use. Day in particular looked upon the gasoline automobile as a hopelessly complicated, noisy, and untidy machine. The first experimental car completed by Maxim in the summer of 1895 furnished some justification for this low estimate. The machine was a singularly ungainly affair, making even Maxim lose heart for a time. When Day took his first ride, he voiced his fear of this "terrible contraption," with its ear-rending explosions and oil-drenched transmission. The gasoline automobile, he thought, lacked elegance. He could hardly believe that anyone would be interested in buying one. Day's contempt for the gasoline automobile did not lessen after Maxim constructed an improved model in 1898. Eames, who became superintendent of the motor carriage department, also favored the cleaner electric automobile. Maxim despaired that the development of gasoline cars might be jettisoned by the Pope executives. On one occasion Day strolled into Maxim's workroom 61

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and stared morosely at several mechanics who were removing a gear-box cover. Maxim vividly remembered Day's unconcealed horror. Walking up to the carriage to see what the men were doing, he spied the gears in the box, all of them swimming in black oil. Mr. Day evidently had not realized that a gasoline-carriage must have a change-gear system. . . . In a shocked sort of way he asked me what all the cog-wheels were for. I told him they were the change gears. Then he asked me if they were necessary. I told him they were. . . . He looked at me a moment, then shook his head and walked away, taking up a position at the far end of the model-room, where he appeared to be sunk in profound gloom. After a few minutes he beckoned to me. I went over to him and he said, "Maxim, is it necessary to have all those gears in a carriage?" I repeated that there was no possible escape so long as a gasolineengine was used. He went on to ask, "And you have to have all that oil?" I explained that the gears ran more quietly in oil and that the bearings also needed oil. . . . Again shaking his head sadly, he announced, emphatically: "Well then, Maxim, let me tell you something. We are on the wrong track. No one will buy a carriage that has to have all that greasy machinery in it. It might be that young fellows like you and Souther would buy a few of them as interesting toys, but that would be only a drop in the bucket. No, Maxim, we are on the wrong track!" 23

Although Day did not suspend work on gasoline automobiles, he persisted in his belief that the four-cycle engine was impractical. He maintained that the electric auto would eventually dominate the American highway. Maxim and Souther investigated various makes of internal combustion engines, but never without remembering that Day and his aides were convinced that only the electric auto was marketable. "It was very difficult for the engineering force to get the management to believe that anyone could be persuaded to buy a motor car with a hot, smelly, greasy, noisy engine in front of the driver," said Souther.24 Not until some years afterward did Day admit that, he had miscalculated. Maxim, while walking up Fifth Avenue \vith Day, remarked that more than half the cars in the passing traffic were gasoline-powered, and asked Day if he recalled the incident in the model-room of the Pope factory. "Great Scott, Maxim!" exclaimed Day. "Do you remember that? I was awfully wrong, wasn't I?" 25 But in the late iSgo's, no doubts that he was right beset Day. When the Pope Manufacturing Company conducted the first public trial of its motor carriage on May 13, 1897, to celebrate the 62

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formal opening of its auto plant, the two-seater Columbia phaeton which ran along the Hartford streets, with Eames and Maxim at the tiller, was an electric vehicle.20 The large staff of designers and technicians in the motor carriage department concentrated exclusively on electric models. Together with the few other engineers who shared his minority view, Maxim repeatedly proposed the commercial production of gasoline cars, but years passed before the Pope executives accepted the idea, "and then only due to the invasion of the United States by French cars with the motor in front," as Henry Souther pointed out. Thus, at an early date, the Pope Manufacturing Company was committed to a type of automotive power plant which rapidly lost ground after 1900. This turn of events could not have been foreseen, but the outcome was also shaped by other predilections of Pope and the New England motor car builders who followed his example. The manufacturers of this region, unlike the auto makers of the Midwest, believed that the horseless carriage was a novelty whose limited use would fade, even as the social vogue of the far more popular bicycle had waned after 1896. Each year's small output appeared to mark the height of automobile manufacture, and production schedules were drawn up on the premise that the market was in danger of imminent collapse. Schooled in conservative business traditions, the New England manufacturer was generally cramped by a narrow outlook that lagged behind his technological daring. Where many Midwestern makers strove after volume production for a middle-income market, auguring the day of the popular-priced car, the New England builder aimed at the limited production of costly automobiles.27 In 1899 no one could detect the emerging lineaments of the industry. In Detroit, Ransom E. Olds and Henry Ford, exponents of the cheap car, found support for their first ventures in making gasoline automobiles. In Cleveland, Alexander Winton was steadily increasing his output of gasoline cars. Yet, of them all, only Winton had as yet left a stamp on the industry. The electric vehicle was the favorite of wealth and conservative taste, although it would soon become apparent that the electric auto was destined to play a minor role in the market. This outcome would naturally enhance the value of the Selden claims. Equally important for the future of the Selden patent was the 63

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strategic role which patent rights had occupied in the growth of the Pope bicycle enterprises. One of the chief reasons why the Pope company held a commanding position in the bicycle industry was the broad foundation of patent holdings reared by Pope after 1878. The bicycle era produced a large and complex body of patent litigation, and no producer was more vigilant than Pope in protecting his controlling rights. His company held the basic Lallemont patent, under which it collected ten dollars on every bicycle made by other firms. It also acquired the Smith bottom bracket patent, the bevel gear patents, and the Tillinghast patent on the single-tube pneumatic tire. Pope spared no expense to exact tribute and bring infringers into the courts. It is not surprising that Pope should have made a thorough investigation of automobile patents before establishing his motor carriage department in i8g5.28 But the researches in gasoline and electric vehicle patents which Maxim, Souther, and other Pope engineers conducted in the United States and Europe recorded no mention of the Selden patent, even though it is likely that between 1895 and 1899 no other American company was so well posted as the Pope firm on developments in the automotive art. One might expect that the Pope company, with its propensity for acquiring basic rights, would have bought the Selden patent in 1895. Yet Day and other Pope executives, when they learned of the patent, ridiculed its claims. Only one executive refused to join in this chorus of contempt. He was Hermann F. Cuntz, the head of the patent department. Cuntz set no great store by the mechanical features of the Selden patent, but he almost immediately discerned its possibilities for commercial exploitation. In January, 1896, Cuntz warned Maxim that the Pope company was infringing the Selden claims and would have to suspend the development of gasoline automobiles. "I snorted my derision," wrote Maxim in recalling this episode. I pointed out that the engine shown in the patent was utterly impractical and a joke. Mr. Cuntz had to explain that the drawings had nothing to do with it. Instead, it was the wording of the claims of the patent which decided what it covered. I maintained that the claims were so broad they were ridiculous. But Cuntz stood his ground valiantly, warning me that a United States patent was a real patent until the courts ruled otherwise, and that anyone infringing it was liable to the owner of the patent for damages. 64

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Alarmed, Cuntz flourished copies of the patent before George H. Day and Hayden Eames. They ignored his pleas. That a patent applied for in 1879 could possibly control the art more than sixteen years later was, in Maxim's words, "too awful to be believable." For the next three years Cuntz railed against the indifference of the Pope executives and engineers, only to be greeted by knowing nods and smiles.29 The collective attitude of Day, Eames, and Maxim was typical of the prevailing view in the industry. To those who had been intimately associated with the practical development of the motor car, the Selden claims verged on the fantastic. Few believed the patent could survive a test in the courts. But Cuntz had not long to wait, before his appraisal of the Selden claims would elicit serious consideration instead of disbelieving laughter. The change came suddenly, and almost as an afterthought. 6

In the early spring of 1899, as Whitney and Pope conducted preliminary negotiations, the Electric Vehicle Company shaped more ambitious plans. Announcing that it would place 12,000 electric cabs in service throughout the country, it made an eightfold increase in its initial order of 200 cars from the Pope factory.30 Pope and Day contemplated the expected rewards with satisfaction. They felt that their faith in the future of the electric automobile had not been misplaced. For them, the shift to motor vehicle manufacture came at a propitious time. With the exhaustion of the social impulse behind the "bicycle craze," over-expanded factories and a declining market were forcing many producers into retirement. It would not be long before most of the survivors, including the Pope bicycle works, were consolidated in the American Bicycle Company. In the middle of April, 1899, Whitney and other members of his syndicate came to Hartford for a conference with Colonel Pope and his aides. Whitney proposed a union of the financial resources of the Electric Vehicle Company with the automotive patents and motor carriage department of the Pope organization. A new unit, known as the Columbia Automobile Company, would be capitalized at $3,000,000. It would embrace the automotive assets of Pope, 65

Monopoly on Wheels

including the trademark "Columbia," valued at $1,000,000; the designs, patents, and installations of the Electric Vehicle Company, also valued at $1,000,000; and a cash contribution by the Whitney syndicate of $1,000,000 for working capital, plant extensions, and tools and equipment. This promised to be the largest operating organization in the industry. The conference went smoothly until Whitney inquired whether the projected company would infringe upon any basic automotive patents. Recent experience had taught Whitney that master patents were valuable instruments.31 When the financier raised the question, Hayden Eames left the conference table and dashed across the corridor to Cuntz's office. Was there, he asked impatientfy, a patent that controlled the art? Cuntz produced three sheets listing patents on steam, electric, and gasoline automobiles. Only one, the Selden patent, appeared to possess a basic character. There was no necessity for Cuntz to repeat the warnings he had sounded for three years. The resourceful Cuntz had not been idle. He had recently learned that five Wall Street speculators were planning to invest $250,000 for acquiring the patent. Through Philip T. Dodge, a lawyer and industrialist who for a time had been associated with Selden in handling the application in the Patent Office, Cuntz had explored the ground in Rochester. The rights were still held by Selden. Moreover, the inventor favored assignment of the patent to manufacturing interests rather than speculators. Cuntz recommended a direct approach to Selden. Returning to the conference room, Eames disclosed the details and assured Whitney that the patent could be acquired. After Whitney and Pope approved the merger of their automotive units, Eames instructed Cuntz to reach Selden without delay. The Selden patent had at last found the support of powerful industrial and moneyed interests. The Columbia Automobile Company was incorporated on April 19, 1899, with Pope as president, Day as vice-president, and Eames as secretary and treasurer. Whitney became chairman of the executive committe. The Whitney syndicate then gained control of the Electric Storage Battery Company and gave an exclusive license on its automobile storage batteries to the Columbia firm. A further consolidation occurred on May 3, 1899, when a new concern, 66

in Mr. Whitney Comes to Hartford

known as the Columbia & Electric Vehicle Company, was incorporated by the Pope-Whitney group. Capitalized at $5,000,000, it included the manufacturing assets of the Electric Vehicle Company, the Electric Storage Battery Company, and the Pope automotive plant. George H. Day was named president of the combination, and Hayden Eames its vice-president. The Electric Vehicle Company, which retained its status as a public transportation concern, contracted to purchase the entire output of the Columbia & Electric Vehicle Company.32 Meanwhile, Eames and Cuntz opened direct negotiations with Selden, who unhesitatingly gave the Columbia & Electric Vehicle Company an option on an exclusive license. The Pope and Whitney attorneys immediately instituted an exhaustive search of United States and foreign patent publications to determine the validity of the claims. Their investigations were extended after Selden renewed the option in the summer of 1899. William A. Redding, one of the patent lawyers active in the search, spent $10,000 for his survey. Cuntz visited automotive and gasoline engine plants, while Maxim went to Rochester to make a first-hand report on the Selden invention. "It turned out," said Maxim, "that he did not have very much beyond the patent." 33 On November 4, 1899, while the validity search was still in progress, Selden assigned an exclusive license to the Columbia & Electric Vehicle Company. It was given the right to issue sublicenses and was vested with absolute control of litigation arising over the patent. To Selden went a royalty of fifteen dollars on each vehicle, with a guaranteed minimum payment of $5,000 a year. But the agreement was not definitive. He was offered $10,000 for the assignment, and had already received $1,000. A binding contract was made conditional upon the payment of the balance of $9,000 to Selden on or before January 2, igoo.34 This inconclusive agreement reflected the determination of the Pope-Whitney forces to secure a foolproof patent. They now had two months to complete the validity search and make a final decision. The mass of information extracted from patent publications and other sources was digested by a patent attorney, William B. Greeley, who in December, 1899, sailed for London to consult Dugald Clerk, widely respected as the most eminent living authority on the internal combustion engine. At length Clerk announced 67

Monopoly on Wheels

that the Selden patent was valid, basic, and controlling in the art. His opinion settled all lingering doubts. Selden was paid the balance of $9,000, and exclusive rights to the patent were vested in the Columbia & Electric Vehicle Company. On June 20, 1900, this manufacturing unit was merged in the Electric Vehicle Company, whose capitalization was increased to $18,000,000. A few days later, on June 26, the Selden patent was formally assigned to the Electric Vehicle Company. Pope was bought out and his automotive plant became the property of the Whitney-Ryan syndicate. For the present, the syndicate was involved in promoting the electric automobile. But the pains the Eastern financiers had taken to acquire the Selden patent indicated that in some fashion the gasoline automobile would bulk large in their future operations.

7 Basing their plans upon the organization o£ interlocking units, the promoters of the Electric Vehicle Company projected a farflung structure of subsidiary corporations for absorbing the output of their Hartford factory. Competition with the horse-drawn passenger cab was only one facet of the grandiose scheme. The Whitney-Ryan syndicate also hoped to capture a large share of the urban trucking business by undercutting express freight rates and providing elaborate door-to-door delivery systems.35 The operating revenues would be augmented by the larger profits of the Electric Storage Battery Company. Thus it was that in 1899 the Electric Vehicle Company became a holding unit for operating automobile fleets in major cities. The New York Electric Vehicle Transportation Company was incorporated with a nominal capital of $25,000,000 as were the New England Electric Vehicle Transportation Company, with headquarters at Boston, and the Illinois Electric Vehicle Transportation Company, with central offices at Chicago. The Pennsylvania Electric Vehicle Transportation Company was capitalized at $6,000,000. The directorate of each subsidiary was divided between representatives of the Whitney syndicate and locally prominent financiers and promoters. Smaller sub-companies, each cap68

in Mr. Whitney Comes to Hartford

italized at $100,000, were projected in sixteen states as far apart as Georgia, Wisconsin, and California. An order for 4,200 electric vehicles was placed with the Hartford plant, to which extensive additions were made. Facilities elsewhere were purchased to maintain the expanded production schedule. Among the acquisitions were the factory of the Hartford Cycle Works, and the plant of the New Haven Carriage Company, which made bodies and wheels. Hartford became the center of the New England automobile industry as a direct result of this activity. The cabs made in Hartford soon appeared in Paris, where the Electric Vehicle Company organized a regular passenger service.36 The optimism of the Whitney-Ryan syndicate was unrestrained. After purchasing additional plant facilities at Chicago for supplying electric cabs to the West, the financiers announced that in 1900 they would build 8,000 automobiles with an estimated value of $20,000,000. In order to control all electric vehicle patents of commercial value, they acquired the Riker Motor Vehicle Company, of Elizabethport, New Jersey. During this halcyon period George H. Day, who had left the Pope company, became a trusted executive of the Whitney-Ryan automotive interests. In 1899 he succeeded Isaac L. Rice as president of the Electric Storage Battery Company, and in 1900 became president of the Electric Vehicle Company. The juggernaut progress of the syndicate aroused suspicion and distrust among proponents of the gasoline automobile. Horseless Age, mindful of the close connection between the Electric Storage Battery Company and the public transportation scheme, characterized the Electric Vehicle Company as "the Lead Cab Trust," linking it with rumored plans to control the motor vehicle industry through basic patents. It discerned no threat. "The period of the trust has not come yet," said Horseless Age. "The industry is too new, patents relating thereto of too limited a character, and the possibilities of improvement too great to make a successful trust possible now." Manufacturers were advised to disregard the "bluffs" of automotive combines. "It is true that capitalists of large means have been purchasing motor vehicle patents for some time past, probably with the intention of some day exacting tribute through their ownership, but of motor vehicle patents there will be no 69

Monopoly on Wheels

end. They will multiply like the dragon's teeth of old—too fast to be successfully monopolized." 37 It was now generally known that the Whitney syndicate controlled the Selden patent. But the small manufacturers who were now crowding into the gasoline car industry were confident that any move to use the patent as an instrument of intimidation or restrictive privilege would come to nothing. They did not see the storm clouds gathering at dawn.

;o

IV The Opening Battle

I

N 1899 the grand resources of the Electric Vehicle Company stood at more than $100,000,000, virtually all of it on paper. We have seen that the electric automobile could not find a market justifying this nominal capitalization unless the guaranteed outlets projected by the Whitney-Ryan syndicate developed rapidly. But many limitations and difficulties, chiefly those stemming from the storage battery, made the electric vehicle a mechanical and commercial failure for passenger and trucking use. By 1903 there were only 2,200 automobiles in the United States operating with batteries produced by the Electric Storage Battery Company.1 So limited a market could hardly support, the imperial ambitions of the Electric Vehicle Company. Shortly after 1900, advances in factory technology improved the construction and performance of the gasoline engine. Sturdier cylinder castings became available when American foundries abandoned the cupola for the reverberatory furnace and produced a better quality of foundry iron. Automobile makers began to insist on a higher grade of craftsmanship in engine components.2 Unreliable "hot-tube" ignition became outmoded when the improvement of coils, spark plugs, and other appliances enabled a general shift to electric ignition. These and like developments contributed to the ascendancy of the gasoline automobile over those powered by steam or electricity. The Whitney-Ryan promoters, it became apparent, had pinned their hopes on the wrong type of vehicle, and their miscalculations were shortly reflected in the financial affairs of the Elecric Vehicle Company. The means they chose to redress their error precipitated the first clash over the Selden patent.

7i

Monopoly on Wheels

1

Throughout the summer and autumn of 1899 the Electric Vehicle Company gave every outward sign of prosperity. Dividends of eight per cent were declared on both the preferred and common stock, and its securities enjoyed a market boom. This flourishing activity, however, was contrived and meretricious, the product of stock manipulation. Although the officers of the Electric Vehicle Company were confident that its subsidiaries would soon show a profit, their hopes were never fulfilled. When dividends on Electric Vehicle stock were suspended late in 1899, the subsequent market decline in its securities touched off widespread misgivings about the actual condition of the Electric Vehicle Company. Leaping to the attack, Horseless Age scarified the Whitney promoters. "They have become grotesque," it said, "and if they have any saving sense of humor they will retire and leave the field to the mechanics and manufacturers to whom it rightfully belongs." This suggestion was underscored by another drop in Electric Vehicle stocks that brought them far below par. The schedule of 8,000 cars which the company had announced for 1900 was cut to 2,000, and sharp reductions were made in the factory force at Hartford. "Where thousands of Lead Cabs were to be in service," snorted Horseless Age, "we find but fifties, groaning around with every sign of wear and tear, half the time in the hospital and indifferently patronized at that." 3 In 1900 the company fell under a shadow when a $2,000,000 loan made to it by the State Trust Company, a New York bank controlled by the Whitney syndicate, resulted in what one journalist termed as "one of the greatest banking scandals of a decade." The loan was made on notes secured by Electric Vehicle stock and signed by Daniel H. Shea. A dummy director of the Electric Vehicle Company, Shea was actually the office boy of Thomas F. Ryan. The loan was a technical violation of the New York state banking laws. The transaction was savagely attacked in the press and brought the Electric Vehicle Company into disrepute. Under the headline, "How An Office Boy Got $2,000,000," the New York Herald charged that the loan was linked to stock manipulations. 72

IV

The Opening Battle

"The financiering methods of the Lead Cab promoters," it said, "are beginning to leak out at last." * The subsidiaries of the Electric Vehicle Company fared poorly. In 1900 the Chicago factory was sold to the General Electric Company, and the Illinois Electric Vehicle Transportation Company, which had been operating at a loss, was liquidated early in 1901. When the New England Electric Vehicle Transportation Company was dissolved, its final statement showed that expenditures were double the amount of income. At its demise, this sub-company had only twenty-five vehicles instead of the hundreds that had been promised for its fleet. The recently acquired Riker plant in New Jersey was closed down. The stock of the New York subsidiary, which at issue had sold for $30 a share, fell to seventy-five cents. To fund its floating debt and raise working capital, the Electric Vehicle Company issued $2,250,000 in bonds secured by a mortgage on its real estate and Hartford factory, its stock holding in allied corporations, and all of its patents. The mortgagor was the Morton Trust Company, an affiliate of the Whitney syndicate. The grim turn of events was made plain in a dispatch in the Detroit Journal on September 21, 1901: "During the past year an enormous shrinkage has taken place in the stocks of the different concerns forming the Electric Vehicle Co., aggregating $57,532,535 and a loss of over 100 points. Mechanical difficulties of storage batteries . . . led to frequent losses and started both the Electric Vehicle and Electric Storage Battery Co. on the downward path." As the mortgage trustee, the Morton Trust Company held the Selden patent until 1903, when ownership reverted to the Electric Vehicle Company. The odor of financial scandal hovering over the Electric Vehicle Company thickened when a minority stockholder action brought in 1901 charged general mismanagement of company affairs. The bill of complaint alleged that large blocks of Electric Vehicle stock had been diverted to the treasury of the Electric Storage Battery Company for a fraction of their value. The bill also claimed that dividends had been paid while the Electric Vehicle Company was heavily in debt, and had been declared for the personal benefit of the coterie of financiers controlling both companies. The managers of the Electric Vehicle Company made a lame reply. They admitted that some of their investments had been "unfortunate," among 73

Monopoly on Wheels

them a loss of a million dollars on the Chicago plant. Ruefully noting that the company had made "mistakes" in the construction of its vehicles, they acknowledged that the outlook was not encouraging.5 As a result of this exposure, Electric Vehicle stocks again suffered marked declines. Investors nervously inquired about the future of the company. No one doubted that the Whitney syndicate had failed in its bid to develop the electric automobile as a popular mode of road transportation. In the midst of its financial misfortunes, the Electric Vehicle Company turned for relief to the Selden patent. For the first time, the patent invited serious thought as a valuable property. 2

Groaning under its financial embarrassments, the Electric Vehicle Company set out in 1900 to compel royalty payments on every gasoline car made, sold or used in the United States. Its main object in taking this step was to funnel an unbroken flow of royalties into its sagging treasury. Since a policy of restrictive licensing would have reduced potential revenue, the Whitney syndicate did not attempt to exclude manufacturers. The Electric Vehicle Company could enforce its legal monopoly only by filing infringement suits. Accordingly, Whitney directed the New York law firm of Betts, Betts, Sheffield & Betts to prepare a group of court actions.6 Associated with the Betts firm in an independent capacity was William A. Redding, of Redding, Kiddle and Greeley, a firm which had represented the Pope interests in numerous suits in the bicycle industry. The warnings served on leading makers of gasoline vehicles in June, 1900, gave proof that the Whitney syndicate was in earnest. The infringement notices announced: "Our clients inform us that you are manufacturing and advertising for sale vehicles which embody the invention of the Selden patent. . . . we notify you of this infringement, and request that you desist from the same and make suitable compensation to the owner of the patent therefor." 7 The Electric Vehicle attorneys indicated that legal proceedings would be instituted in the near future. The Whitney syndicate hoped for quick surrenders. The Elec74

iv The Opening Battle

trie Vehicle lawyers were certain that none would contest the Selden claims in a full-dress infringement action. If a sufficient number of manufacturers acknowledged the validity of the Selden patent, an almost irresistible precedent would be set for whipping recalcitrants into line. Settlement of the test suits would lend the patent the weight of judicial pronouncement and secure the acquiescence of the industry and the public. Almost from the outset, the Selden patent seemed to be allied with the unpopular acquisitive practices of less responsible business enterprise. That a company engaged in the manufacture and operation of electric vehicles should attempt to levy tribute on makers of gasoline automobiles had its ironic aspects. More important were compelling considerations of public sentiment. A movement of protest against giant trusts and combinations had been sweeping the country for more than a decade. Public opinion had registered its disapproval of financial and industrial monopoly. It was Selden's fate to be drawn into the struggle on the side of the forces which had excited popular antagonism. Any moral argument which Selden might have been able to marshal was severely weakened by this alignment. In addition, there was a growing uneasiness that the individual inventor was fast becoming the helpless captive of large corporations. Selden had placed his patent in the hands of known monopolists who had fallen into disrepute. He thereby sacrificed public sympathy for his claims. The first response from the manufacturers who had been summoned to pay tribute was irritation and anger, mixed with a sober realization that a struggle of wide scope impended. Motor Age, which opposed the scheme to dominate the motor car trade, announced that "the first gun has been fired in the first great legal battle in the automobile industry." Recalling how independent bicycle makers had banded together in the Cycle Trades Protective Association to fight one of the patents controlled by Colonel Pope, Motor Age suggested that gasoline auto manufacturers might well unite in a similar body to contest the Selden patent. It predicted that the Electric Vehicle Company would follow the tactics that had been used in the bicycle patent suits: "With practically unlimited means at its disposal, it will select for its first attack, some company that is none too strong, financially, and, with the best attorneys and the brute force of money, push the suit to a conclu75

Monopoly on Wheels

sion, without the proper defense having been made. Such a result would be disastrous to all makers of gasoline vehicles and would work incalculable harm to the industry." Breaking his long silence, George B. Selden pointed out that critics of the patent overlooked the warm endorsement which the commissioner of patents had given it in 1895. This view was not echoed by automotive experts. A Philadelphia patent authority, R. M. Hunter, asserted that any move to control the industry through a patent was "absurd and untenable." Despite their pretensions to broad coverage, he said, the Selden claims were actually limited in scope, "and the idea that there is some inherent novelty in the combination of such a specific motor with the rest of the elements is too preposterous to merit serious consideration." Hunter warned of the grave consequences that would come from failure to wage a strong defense. He was apprehensive that the courts, in the absence of stout opposition from the independents, might uphold a patent which the Electric Vehicle Company could then use "in applying for preliminary injunctions against the stronger manufacturers with a view of throttling all competition. If the manufacturers of gasoline vehicles are wise they will array themselves as a unit against any such attempt on their rights." 8 Auto builders who received warnings consigned them to the wastebasket, but not without a sense of foreboding. Whom would the Electric Vehicle Company single out? "Certain it is, that if the charge of infringement be sustained, the shops of many an automobile maker will be closed," was one typical comment.9 The industry did not have long to wait before the assault began. The first suit, naming the Buffalo Gasolene Motor Company as defendant, was lodged on July 12, 1900, in the United States Circuit Court for the Western District of New York. A second suit, filed on July 13 in the United States Circuit Court for the Southern District of New York, named the Winton Motor Carriage Company of Cleveland as co-defendant in an action brought against Percy Owen and A. W. Chamberlain, the Winton sales representatives in New York City. No one in the industry could miss the significance of these test cases. The Buffalo Gasolene Motor Company, which produced an Otto-stroke engine for automobiles, was selected by way of warning automotive parts makers that they would be held accountable for 7tf

iv The Opening Battle

contributory infringement. But the principal target was the Winton Company, organized in 1896 by Alexander Winton. In a few years this company had forged ahead to the first rank in the automobile industry. Winton was chosen for a test suit because he was at this time the leading volume producer of gasoline automobiles. If he could be brought to heel, the rest of the industry would probably follow him into the Selden camp. The determination of the Winton Company to fight the patent was voiced by its treasurer, George H. Brown. "The Selden patent is preposterous," he said, "and should never have been granted by the patent office. It will not have a leg to stand upon when it gets into the courts." Meanwhile, Motor Age resumed its agitation for organizing a protective association of independent producers, and warned that failure to agree on a common defense would spell doom for all makers, large and small alike. "Self-protection is the first law of business," it observed, "and the Winton company, or any other, would be fully justified in agreeing to recognize the validity of the Selden patent and to manufacture under a nominal license, thus laying other gasoline vehicle makers open to attacks in which they would stand less chance than in a preliminary suit —provided the company attacked did not have the united support of its brother companies." 10 Immediately after the two suits were brought, the editor of Motor Age, George K. Barrett, took the initiative in forming a protective organization. He stressed the proviso that prospective members must agree to be defended by lawyers chosen by the association. The Winton and Buffalo firms having given their consent, Barrett circularized leading manufacturers with a warning that the Electric Vehicle suits were "intended as the basis for driving all persons and firms out of the industry and monopolizing it to themselves." n Barrett's fighting spirit stiffened the opposition of the independents, and many of them decided to send representatives to a preliminary meeting. On August 2, 1900, twenty manufacturers of gasoline motors and vehicles convened at the Iroquois Hotel in Buffalo and organized a defensive body known as the Hydrocarbon Motor-Vehicle Manufacturers' Association.12 It was formed for the specific purpose of fighting the Selden patent. Elmer Apperson, of the Haynes & Apperson Company, was elected president. The executive com77

Monopoly on Wheels

mittee included members from the Buffalo Gasolene Motor Company, the Autocar Company (Ardmore, Pennsylvania), and the Duryea Power Company (Reading, Pennsylvania). The defense association gave its unqualified support to the uncompromising resistance pledged by the Winton and Buffalo companies. Much would depend on whether the ranks of the independents remained unbroken. 3

On September 3, 1900, the attorney for the Winton Company, A. S. Pattison, who had been retained by the independent association, entered a writ of demurrer asking for dismissal of the Winton suit by the district court. Basing his plea on the ground that the Selden patent was manifestly invalid for lack of invention, Pattison argued that all of the elements in the combination were admittedly old, and that the substitution of a gasoline engine for a steam engine in a familiar structure did not require inventive skill. On November 9, 1900, Judge Alfred C. Coxe handed down an opinion overruling the demurrer.13 The decision was a blow to the anti-Selden forces. The drift of judicial pronouncement in patent litigation favored comprehensive claims of the kind exemplified by the Selden patent, for the courts were disposed to take a liberal view of pioneer patents covering basic and widely adopted inventions. Pioneer combination patents enjoyed an especially important advantage, the courts usually holding that such patents were entitled to a broad and flexible application of the doctrine of mechanical equivalents. In contrast, judges leaned toward narrow construction in dealing with inventions of a limited character based chiefly on detail improvements. The Coxe opinion depicted a prior state of the art that was highly favorable to the broad claims of Selden and extended a liberal interpretation to the patent. "The patentee's contribution to the art should not be considered from a narrow point of view," said Coxe; "his work should not be examined through an inverted telescope; the horizon of invention should not be contracted to the periphery of a sixpence." According Selden recognition as a pioneer, Coxe maintained that the patent, in light of the state of the art in 1879, showed genuine in78

iv

The Opening Battle

ventive skill. "Upon the present record," averred Coxe, "he must be regarded as the first to construct a road-locomotive provided with a liquid hydrocarbon gas-engine o£ the compression type so arranged as to leave the platform of the carriage unobstructed." The reasoning of the court was dubious, for it flew in the face of changes in the art between 1879 and 1895. The Coxe opinion, however, was not an adjudication of the validity of the patent. In proceedings on demurrer, only patents which are palpably absurd or inoperative may be struck down without recourse to the testimony and evidence taken in the ordinary course of an infringement suit. The Coxe opinion was not based upon a reading of testimony, for none had been taken. It was not a decision on the merits of the case. In effect, Coxe had ruled that the issue must be submitted to the normal procedure of infringement proceedings. Nevertheless, the liberal interpretation which Coxe gave to the Selden claims inevitably conferred prestige upon the patent-holders, who readily exploited their position. The Electric Vehicle Company used the opinion to build up its presentation of Selden as an innovator who had fathered an industry. Deliberately ignoring the fact that the court had not ruled upon the validity of the patent, the Whitney-Ryan interests boasted that the opponents of the Selden claims had been effectively demolished. Indeed, even some among the independents who had an imperfect understanding of legal procedures thought that Coxe had legitimized the monopoly claimed by the Electric Vehicle Company. The Winton Company had tried to take a short route to victory, and had failed in the attempt. It committed the tactical error of believing that the court, without the full record of an infringement, case laid before it, would determine that the patent was obviously invalid for lack of invention. In asking the court to rule on demurrer, the Winton Company and its allies in the Hydrocarbon MotorVehicle Manufacturers' Association hoped they might be spared the trouble and expense of trying the case on its merits. Now the Winton firm had to take the usual course of filing an answer with a wide array of defenses for the consideration of a trial judge. From the legal standpoint, as Coxe had readily indicated, the fact that the demurrer had been overruled did not reflect in any way upon the probable outcome of the case. That a determined full-scale defense was essential became plain 79

Monopoly on Wheels

on November 30, igoo, when Judge John R. Hazel in the district court at Buffalo handed down an opinion overruling the demurrer of the Buffalo Gasolene Motor Company. He concurred in the Coxe opinion in the Winton case. Motor World, which alone among the trade publications gave editorial support to the Selden patent, advised auto builders to face up to the stern realities of the situation. Exaggerating the significance of the Coxe and Hazel opinions, which it construed as pronouncements in conclusive favor of the Selden patent, this journal told independent manufacturers that if they continued to heed the counsel of their "fool friends," they would eventually be compelled to foot a very large bill. "Plainly put," it said in an invitation to outright surrender, "the Selden patent is a very strong one; those behind it are even stronger, they know the value of their patent and the desirability of having its validity proven beyond question. Nothing that money and experience can do to accomplish this will be spared." 14 The Winton Company announced it would defend the case. It also promised to protect purchasers of its vehicles "from all annoyance," reassuring motorists that the use of a Winton car would not bring them into court as parties to an infringement suit. When it was pointed out that the cause of the independents might be strengthened by hiring more capable attorneys, the protective association retained the patent law firm of Kenyon & Kenyon, of New York City. Horseless Age urged all foes of the Selden patent to contribute to the defense all available data on the development of the automotive art. With but a few months in which to prepare their case, the attorneys for the independents spurred the collection of evidence. Agents of the Hydrocarbon Association searched in the United States and abroad for any details that would make the defense complete and convincing. The findings of this extensive investigation were incorporated in the answer filed by Kenyon & Kenyon on February 25, 1901. The reply listed thirty-two separate defenses and introduced a formidable array of anticipations to show that the Selden patent was not novel. Altogether it cited 126 American, British, and French patents dating from 1794 to i88i.15 The answer, which denied that Selden was the pioneer inventor of the gasoline automobile, contended that his delay in the Patent Office was contrived to extend 80

iv The Opening Battle

his monopoly and charged that the patent was illegal and void by reason of fraudulent alterations in the claims. The case went to trial. While the protective association contributed about $6,500 to defray the expenses of the Winton suit, it disintegrated before the case ended, and the financial burden of the defense fell upon the Winton Company. Robert N. Kenyon, aided by Pattison, waged a vigorous legal battle, producing many exhibits and taking more than 2,000 pages of testimony. The defense attorneys made thorough searches into the prior art, including the use of the Brayton motor in the Providence and Pittsburgh vehicles. The proceedings continued for more than two years. The Electric Vehicle Company pushed for a conclusion of the defense testimony by October, 1902. Meanwhile the Betts firm, in preparation for commencing additional actions, continued to serve infringement notices upon manufacturers of gasoline automobiles. Soon after Judge Coxe handed down his ruling, the Selden patent-holders filed two more suits with an eye to persuading the independents that the patent was invincible. Actions were lodged against the Automobile Forecarriage Company, of New York City, on December 27, 1900, and against the Ranlet Automobile Company, of St. Johnsbury, Vermont, on January 10, 1901. These firms, singled out because of their financial inability, were too weak to contest an infringement suit. The Ranlet Company consisted of two youths who were building a single automobile in the Vermont countryside. An emissary of the Electric Vehicle Company who notified them of the suit told the Ranlet brothers they could complete and sell their car. "Go ahead," said the agent, "we simply have to litigate a patent." 18 These suits had the anticipated outcome. On May 21, 1901, the Ranlet Automobile Company submitted to a consent decree and was perpetually enjoined from infringing the patent. On May 29, 1901, a decree pro confesso was entered against the Automobile Forecarriage Company. The Electric Vehicle Company, which had never doubted that these cases would be won by default, publicized them to spread consternation among the independents. Later, on January 17, 1903, a suit was brought against the importing firm of Smith & Mabley, a New York concern which handled French automobiles. This case was intended as a warning to foreign manu81

Monopoly on Wheels

facturers that they could not sell their vehicles in the United States without a Selden license. So long as the Winton Company continued its resolute defense, the gasoline vehicle industry remained free of domination by the Selden interests. But would Winton hold out? The protective association had been a failure. The suit, dragging on for more than two years, taxed the Winton treasury. In the autumn of 1902 the Winton officials became disturbed when they learned that seven manufacturers had applied for Selden licenses. They immediately consulted their attorneys, Kenyon & Kenyon, for an opinion on the probable effect of this move. The lawyers advised the Winton Company to make a settlement if a reasonable rate of royalty could be obtained. In November, 1902, the Winton firm began secret negotiations with the Electric Vehicle Company to secure favorable terms. Although the Winton suit remained before the court, the taking of testimony was discontinued on November 17, 1902. Some of the independents who had been associated with Winton in the defunct protective association did not know that Winton was abandoning his defense.17 A settlement would necessarily involve Winton's acknowledgment of the validity of the patent as a condition for terminating the case. This gave the Selden interests a lever for exerting pressure on other manufacturers. But before a settlement was reached, intervening events dictated a course far different from the one reckoned upon by the Whitney syndicate. To understand this unexpected turn, we must view the development of the automobile industry just after 1900. 4

The independents who denied the validity of the Selden patent might have chosen to manufacture steam and electric vehicles, which were not controlled by allegedly basic patents. But investment in a going plant is not easily or willingly liquidated, and each year saw a remarkable expansion of the facilities for making gasoline automobiles. Between 1900 and 1905 the number of motor car factories more than doubled, and the amount of capital invested in the industry increased by more than 250 per cent. This growth was largely attributable to the broadening use of the gasoline car. 82

iv The Opening Battle

Of the 21,692 automobiles made in 1905, the overwhelming number—18,699 cars> or 86.2 per cent of the total—were powered by the gasoline engine. Steam accounted for 1,568 cars, or 7.2 per cent; electricity for 1,425 cars, or 6.6 per cent.18 Public taste and preference, influenced by technical improvements, made the gasoline engine the standard power plant of the automobile. The vogue of the gasoline car encouraged many firms to participate in its manufacture. Entry into the industry did not depend solely upon sizable cash resources, although two of the earliest Detroit ventures attracted investors who had made their fortunes in mining and lumbering in Upper Michigan. The Olds Motor Works, which began operations in 1899 with a paid-in capital of $200,000, was financed by Samuel L. Smith, a Detroit lumber and copper magnate, after New York bankers declined to back the undertaking. The curved-dash runabout which Olds produced won immediate acceptance, and in 1903 he sold 4,000 cars. This record, which contrasted with the 700 units built by Winton in 1903, marked the beginning of quantity production of gasoline automobiles and contributed to the rise of Detroit as the center of the motor vehicle industry. Local financial support strengthened the Packard Motor Car Company, founded in 1900 at Warren, Ohio, by Colonel James Ward Packard, a manufacturer of electrical equipment. The Packard firm was transferred to Detroit in 1903 after Henry B. Joy induced other wealthy investors, including members of the Alger, McMillan and Newberry families, to furnish $400,000 for the construction of a large plant. But such investors were exceptional. In 1903 most Detroit businessmen, like bankers and industrialists elsewhere, believed the automobile industry was a highly speculative field, and refused to purchase stock in motor car companies. Auto makers were undeterred, for the character of the early industry made it possible to enter the business with a modest capital and plant. Automobile factories were assembly shops taking from parts-suppliers such components as axles, wheels, gears, and cylinders. Recourse to partsmakers, who grew in number as the industry expanded, freed motor vehicle manufacturers from heavy expenditures for plant and equipment and enabled a larger output without a proportionate increase in fixed overhead. The auto manufacturer, said Motor Age in 1900, "can now buy almost everything that goes S3

Monopoly on Wheels

to make up a motor-vehicle and can assemble it. ... This course requires the least investment, involves the least risk, gives the most rapid turn-over of what money is invested, and, finally, leads to success by the straightest and easiest road." 19 Another advantage lay in the custom of making all sales on a cash basis, which took hold early in the growth of the industry. Dealers made advance deposits of twenty-five per cent or more of the purchase price, and full payment on delivery. This influx of cash, combined with the favorable credit terms extended by partssuppliers, enabled manufacturers to conduct their business with small capital requirements. The effectiveness of the formula depended upon many factors, such as attractive design, reliable construction, skilled technicians and workmen, capable managerial direction, and resourceful sales methods. In too many instances, however, some or all of these ingredients were lacking. By 1903 virtually every automobile produced in the United States was a vehicle assembled from finished components made by parts-suppliers. The ease with which parts could be ordered brought the suggestion that any motorist handy with tools might well pocket the manufacturer's profit by purchasing components which could be "put together in any well equipped machine shop." Although this was an oversimplification, it illustrated the general tendency of the industry. Manufacturers merely assembled and tested the completed machines. Inexperience and over-confidence were responsible for many mechanical failures where the principle of interchangeable manufacture was undermined by poor shop practice. The term "assembled car" fairly characterized most automobiles made between 1900 and 1903 and for many years afterward. The phrase became a stigma when fly-by-night manufacturers, intent upon making quick profits, built makeshift cars from cheap parts in shops with a capacity of one or two cars. These inferior products damaged the reputation and stability of the young industry. Responsible manufacturers took alarm. In 1903 the cheap and unreliable assembled automobile threatened to discredit them. "Motors were bought in one place, bodies in another, and in this manner the components of a car were collected and put together under conditions and with the aid of facilities about on a par with those at the hand of the average mechanic who has a workshop in 84

IV

The Opening Battle

his barn," said a trade publication in recalling a time when the market was flooded with "ivorthless junk." 20 The organization of a multitude of small firms between 1900 and 1903 brought warnings that disaster might overtake the industry. Established manufacturers inveighed against the "fortune hunters" and "backyard assemblers" who copied the designs of reliable makes and palmed off defective machines on undiscriminating purchasers. "The manufacture of automobiles is fast becoming a craze," said Motor Age in 1901. "In the most obscure hamlets of the United States there are, at this moment, hundreds of men at work on automobiles which they expect, at some time in the near future, to place on the market." 21 Most of them never built a car, and hardly a week went by without its harvest of bankruptcies. Honest manufacturers saw that every failure, and every public exposure of a bogus company, endangered the trade. It was against this background that the Electric Vehicle Company embarked on its campaign to exact tribute from automotive manufacturers. The president of the company, George H. Day, knew that the demand would provoke resistance, despite the collapse of the protective association of independents. He trimmed his craft to the rising storm. He conceived of the Selden patent as the legal foundation of a restrictive policy for channeling the profits of motor vehicle manufacture into the hands of a select group. Were the patent used as a device for regulating output, it would undoubtedly receive the support of established auto makers who deeply felt the need for suppressing wild-cat firms. Could the Selden patent be employed as the police power of an entire industry? As a veteran of the sewing machine business, Day recalled that the first patent pool in the United States had been enforced by sewing machine manufacturers who had gained an effective monopoly in the middle of the nineteenth century. It occurred to Day, at a time when fly-by-night firms were infesting the automobile trade, that a guarantee of sound prosperity for the industry lay in a restrictive policy instead of the general licensing originally proposed by the Whitney-Ryan syndicate. The history of patent usages in the American industrial economy supported Day's conviction that the Selden patent could be used to restrict or suppress competition. 85

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5 "The only real monopoly," Mark Hanna is reported to have said, "is a United States patent." 22 This observation casts a light on the increasingly vital role of patents in the national economy after the Civil War, when corporations seized upon patent rights to consolidate their market positions. In an era of large-scale production, as a federal investigating body pointed out in 1912, the patent grant assumed new meaning. "To gain control of something absolutely new," it said, "has advantages which equal reduction of production cost or increase of gain in sale." 23 The American patent system is the outgrowth of the only guarantee of private monopoly written into the Constitution. The patentee is endowed with his right as a reward for contributing a novel, original, and useful invention to the industrial arts. The grant of monopoly for a specified period rests on the theory that the public is thereby enriched by an invention to which it previously had no access. Yet the history of the American patent system demonstrates that the constitutional provision for promoting "the progress of science and useful arts" has tended to become a bastion for entrenching privilege to the detriment of effective competition. A patent of wide and controlling scope gives the inventor, or more often the corporation which buys up his patent, an instrument for dominating the interlocking provinces of technology, industry and commerce. While our patent system has admirably served some of its original aims, it has also led to serious abuses which to this day cause concern among legislators and interested laymen.24 In the early days of the republic, the patent grant was defended as a just reward for the social benefits accruing from an invention. Such was the view of Thomas Jefferson, who, as secretary of state, was the first administrator of the American patent system. The economic development of the nation brought divergent perspectives. During the Jacksonian epoch spokesmen for small entrepreneurs argued that patent rights, when strictly construed, militated against private enterprise and free competition. After the Civil War, when the patent laws became more rigorous and industrial promoters took cover in them to stake out privileged domains, advocates of free trade denounced the patent system. Economic 86

iv The Opening Battle

theorists like Joshua K. Ingalls and Benjamin R. Tucker attacked the patent laws as props of industrial monopoly. Western agrarians pointed to abuses of the patent system as a favorite device of finance capital.25 In the United States, the use of patents to stifle competition dates from the mid-nineteenth century, when Elias Howe attempted to collect royalties on his improved sewing machine. His demand aroused the opposition of other sewing machine manufacturers. When the industry was threatened by a cross-fire of costly infringement litigation, leading makers readily gave ear to a plan to restore peace. One of them, Orlando B. Potter, president of the Grover & Baker Company, of Boston, proposed a scheme for pooling all patents covering the essential features of the sewing machine. An agreement adopted in 1856 divided the profits of the combination among Howe and three other manufacturers. It signified the birth of an important institutional device. The Howe pool set up machinery for controlling access to the industry. Licenses were issued to outsiders only with the consent of all parties to the combination. A portion of the license fees was kept in reserve as a fund to defray the costs of prosecuting infririgers. The pool and its operations ended the guerrilla warfare in the industry. Until its demise in 1867, this alliance succeeded in restricting competition and maintaining higher prices. Unlicensed manufacturers of sewing machines, terrorized by threatened lawsuits, were driven from the industry.26 After 1865 corporations in various sectors of the American economy exploited basic and tributary patents. Cyrus H. McCormick, whose reaper was embroiled in a major patent war between 1848 and 1855, became involved in bitter clashes over a period of twenty years. In 1860, when overlapping patent claims on agricultural machinery raised the likelihood of expensive infringement suits, a number of harvester manufacturers organized a combination known as the "Ring." This group collected tribute from more than twenty-five companies which paid license fees in exchange for guarantees against prosecution. McCormick fought the pool, but failed to break its stranglehold. In 1865 he agreed to pay royalties on his machines, and in 1879 was also licensed by a pool which controlled the key patents on the self-rake reaper. The complicated litigations in the harvester machinery industry developed some of 8?

Monopoly on Wheels

the tactics used in the patent wars of a later era. For example, the Harvester Rake Pool established in 1866 sought test decrees against small manufacturers who could not afford to retain capable counsel, with the certainty that weak companies would prefer settlements to long and costly lawsuits.27 Many other instances of patent rights used as levers for commercial advantage fill the pages of American industrial history. Beginning with the frustrated attempt by Eli Whitney to enforce his cotton gin patent, virtually all of the basic inventions which have transformed our national economy have been involved in patent controversies. Perhaps the greatest contest of this kind opened in 1878, when a host of small firms defied the Bell telephone patent and led the Bell System to file six hundred infringement suits over a period of eleven years. The United Shoe Machinery Company acquired an enormous stock of patents, ultimately numbered in the thousands, which it built up to exert a tight control over the shoe industry. After 1887 arc-lighting patents enabled an intercorporate alliance of electrical manufacturers to eliminate rivals and increase the profits of licensed makers. The American Steel and Wire Company, after filing suits in virtually every United States circuit court, won an effective monopoly of barbed wire manufacture. By 1890, when the Sherman Antitrust Act was passed, patents had become familiar weapons of business warfare. Because the Sherman Act prohibited resort to well-worn monopolistic practices, its adoption caused a shift in corporate strategy. To an increasing degree, large industrial units interested in preserving or extending market empires fell back upon the line of the patent system, which became "one of the most effective devices for emasculating the antitrust laws." 28 Between 1890 and 1912 monopolistic practices were fortified with legal immunity as the patent pool and similar forms of combination were used for restricting output and competition in many sectors of the economy. It was during this period, which marked the high tide of the use of patents to promote restraint of trade, that an expert could confidently say: "Patents are the best and most effective means of controlling competition." 29 While the absolute property rights regarded as inherent in the patent grant generally enjoyed judicial approbation, a notable 88

iv The Opening Battle

cluster of infringement suits in the agricultural implement industry toward the close of the nineteenth century showed that the courts were striving to balance the exploitation of patent rights against the doctrine of laissez-faire. The National Harrow Company, which had been organized to control the manufacture and sale of spring-tooth harrows, owned eighty-five patents under which it bound manufacturers to harsh restrictive covenants. Taking notice of these oppressive provisions, the lower courts declared the National Harrow Company an illegal combination in restraint of trade. The Supreme Court, however, refused to strike down the combination. While its decision in 1902 seemingly gave a wide construction to "reasonable and legal conditions" based on patent rights, the court did not remove patent monopolies beyond the purview of the Sherman Antitrust Act.30 Over the next decade the Supreme Court gave closer scrutiny to practices based on patent rights, but not until two major decisions handed down in 1912 did the court mark the point at which it began to read considerations of public policy into the wide liberty of contract supposedly conferred by the patent grant. The unlimbering of the Selden patent by the Whitney-Ryan syndicate coincided with the heyday of patent rights in the United States. The decision in the National Harrow case in 1902 indicated that the courts would countenance a protective body exercising rights based on the patent grant. In the same year the possibilities of such an association for the automotive industry loomed in the mind of the resourceful George H. Day. 6

While the Coxe opinion on the Winton demurrer served as a warning that the Selden patent could no longer be lightly dis missed by the industry, Day was nagged by doubts that the patent could withstand a full-scale test in the courts.31 This was the one potential obstacle which threatened to block unchallenged domination of the industry by the Electric Vehicle Company. It has been noted that a patent grant does not guarantee the legal validity of an invention. Its final standing, and often its material worth, must be resolved in the courts. In this sense, a patent is a franchise to use the machinery of litigation, and more than a century and a half of 89

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American patent controversies attests that a grant is not necessarily secure after it has left the Patent Office. Day was anxious to avoid a serious challenge to the Selden patent in a contest with a manufacturer or group of manufacturers determined to take a case as far as the Supreme Court. If he could keep the issue out of the courts, the Electric Vehicle Company would then be able to collect royalties until the patent expired in 1912. Triumph lay almost within Day's grasp when Winton signified his readiness to capitulate, but a fresh groundswell of resistance from other manufacturers gave Day an opportunity for making a general settlement. The Whitney syndicate favored a course of aggressive litigation for bringing the industry to its knees. Day preferred a tactful approach based upon a community of interest between the patent-holders and gasoline automobile producers. Accordingly, Day in the summer of 1902 devised a plan for bringing manufacturers into a combination for protective as well as licensing purposes.32 In this view, the projected organization of Selden licensees would eliminate costly and protracted litigation and would also exclude many of the small and weak makers, including the fly-by-night firms, which in all probability would retire from the industry rather than defend an infringement suit supported by reputable manufacturers. The success of this plan would have obvious advantages. The Selden patent would enjoy public acquiescence; the manufacturers who joined the combination would operate under the sanction of a legal monopoly; and the Electric Vehicle Company would be spared the expense of heavy legal fees. As Day pointed out, an association based on the patent would possess "power under the patent laws that a simple cooperative trade organization would not have." 33 This would be far more effective than the original plan of the Whitney syndicate to extend licenses to all makers. The argument was a winning one, and it was not long before Day converted the executive committee of the Electric Vehicle Company to his proposal for a restrictive licensing scheme. He directed Hermann F. Cuntz to enter into preliminary negotiations for the creation of a licensed group, and invited automobile manufacturers to "step up to the captain's desk and settle." 34 His proposal evoked a sympathetic response among the established producers who had spent time and money on technical development $o

IV

The Opening Battle

and were alarmed by the growing number of fly-by-night manufacturers and "backyard assemblers" who pirated designs and unloaded inferior imitations on an unwary public. In principle, they favored a control mechanism for protecting their investments and markets. Day saw here a broad ground for a community of views and interests, but his plans struck a snag when leading manufacturers approached by the Electric Vehicle Company refused to accept the royalty terms fixed by Day, who demanded a rate of five per cent on the retail price of each car. The negotiations with individual makers, who held out for a lower rate, continued until the autumn of 1902. It was then that Winton, who was unaware of these moves, considered abandoning his defense. At this point, too, a few Midwestern auto builders restored the fighting spirit of the scattered independents. Two Detroit manufacturers seized the initiative in forming the nucleus of a trade organization for dealing collectively with the Electric Vehicle Company. They were Henry B. Joy, vicepresident of the Packard Motor Car Company, and Frederic L. Smith, secretary and treasurer of the Olds Motor Works. Although Smith's attorney had advised him that the Selden patent was "a very flimsy proposition," both Smith and Joy, on taking second thought, concluded that it was "an uncertain quantity" which might be validated in the courts.35 Shortly after Winton opened discussions for a settlement, Smith and Joy were invited to take out licenses stipulating a royalty of five per cent. For a brief time the two young automobile executives seriously considered the proposal, for, as Smith said later, the Whitney syndicate was "far too strong for us to use any loose language indicating whither they might go with their double asterisked patent." Smith and Joy decided that united rather than individual action by the manufacturers would strengthen their hand. Late in 1902 they persuaded representatives of eight other companies to attend a conference in Detroit for the purpose of framing a reply to Day. At Joy's suggestion, the Winton Company was not invited to the conference.36 The meeting, held in Joy's office on January 2, 1903, brought to Detroit the emissaries of Eastern and Midwestern automobile companies. In addition to Smith and Joy, who acted as spokesmen 9i

Monopoly on Wheels

for their own firms, the gathering was attended by officials of the following companies: Peerless, Autocar, Searchmont, HaynesApperson, Knox, Pierce, Apperson Brothers, and Locomobile. Some of these had been members of the defunct Hydrocarbon Motor-Vehicle Manufacturers' Association. The Detroit conference was called to determine whether the participants would fight the Selden patent or accept the terms offered by Day. Privately, Smith and Joy had already agreed to urge the manufacturers to form an association for negotiating with the Electric Vehicle Company. The Midwestern producers supported Smith and Joy, and when the meeting revealed that their position was shared by the Eastern manufacturers, the two Detroiters acted with an unswerving unity of purpose. They secured general agreement on rejecting the royalty terms specified by Day, and won unanimous approval for establishing an independent group known as the Manufacturers' Mutual Association. Smith and Joy were appointed a committee of two for conducting the negotiations with the Electric Vehicle Company. "We put a brave face on everything," recalled one of the representatives who attended the meeting. "We hired a lawyer. We did not know whether we could ever pay for him or riot, and from that beginning we formed a defensive organization for the purpose of co-operatively defending ourselves against this awful bugaboo." 3T Joy assumed the leadership in dealing with the Selden interests. Without an association of manufacturers to support the Selden patent, he shrewdly pointed out to Day, the patent was "comparatively valueless" and "not a thing which any one seemed to dread." But if such an association should recognize the Selden claims, the patent would enjoy a prestige it could not possibly win unless it enlisted the good will of the reputable makers. Joy now came to the heart of his proposal. The ten manufacturers were willing to take out licenses at a royalty rate lower than five per cent, but they demanded control of the patent as an indispensable condition of any arrangement. "The argument of the manufacturers," wrote Joy, "is that if they undertake to support the patent they will be paying royalty for the very patent which their own act makes good." If the Electric Vehicle Company was prepared to cooperate in establishing a trade association for "offensive and defensive work," with full command of the patent handed over to the manufacturers, 92

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the validity of the patent would be recognized by the alliance formed at Detroit. For the present, the protective association indicated its readiness to pay a royalty of one-half of one per cent, a rate the Electric Vehicle Company refused to consider.38 Although the Detroit conference and the subsequent negotiations between Joy and Day were conducted in secrecy, rumors leaked out that prominent automobile manufacturers were planning to organize a combination. These reports were received by skeptical trade circles as evidence that the motor vehicle industry was willy-nilly falling into line with the general tendency of the day to establish trusts. "It is a wise generation in trade," commented Automobile Magazine, "that does not see the rise and fall of some supremely ingenious scheme for beating the law of competition, of supply and demand." 39

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V David and Goliath

I

N FEBRUARY, 1903, when the Manufacturers' Mutual Association gathered for a conference during the Chicago automobile show, a fresh counter-proposal on the royalty rate was dispatched to Day. The independents demonstrated their resolve by making individual contributions of $2,500 to a "fighting fund," as Smith called it. They elected Smith as president of the group, and Joy as its secretary and treasurer. The association also named an executive committee consisting of Smith and four other members: Charles Clifton (George N. Pierce Company, Buffalo), Samuel T. Davis, Jr. (Locomobile Company, Bridgeport, Connecticut), Elihu H. Cutler (Knox Company, Springfield, Massachusetts), and L. H. Kittredge (Peerless Company, Cleveland). The negotiations with the Selden interests, scheduled for the week of the New York automobile show in March, were entrusted to the executive committee. Meanwhile, the Winton Company was informed of the general aims of the Manufacturers' Mutual Association. Joy was hopeful that the Winton firm would join a projected association based on the Selden patent, "which we confidently believe will be of great benefit to the trade." 1 By the end of February, Day was ready to agree to the "substantial protective features" demanded by the independent alliance, although he still reserved decision on the royalty rate. Joy was certain that he could extract favorable terms on every crucial point. When the Electric Vehicle Company asked for financial control of the proposed trade association, Joy summarily rejected the demand. "If we have the funds and pay the bills, we will know what is going on," he told one of his fellow independents. "That was entirely our idea in Chicago." 2 Having taken the offensive, Joy and his allies refused to rest until the Electric Vehicle Company submitted to their terms. 95

Monopoly on Wheels

1

Until the eve of the New York meeting, the Smith-Joy group jockeyed for a stronger bargaining position. At the eleventh hour they bared their ultimate threat. They told the Electric Vehicle Company that unless it met their demands, the Manufacturers' Mutual Association would assist the Winton Company and revitalize the defense against the Selden patent.3 This raised the specter of a costly court battle that Day was trying to avoid. Should Winton resume his litigation, Day's plan for a protective association would be an utter failure, and the Electric Vehicle Company would be left with a patent that did not command the allegiance of a single auto builder of national reputation. Even were the patent validated after a lengthy lawsuit, the Electric Vehicle Company would then occupy the unenviable role of force-feeder to an industry which had only contempt for the Selden claims. Plainly, the better part of wisdom was compromise. When the executive committee of the independent group arrived in New York in March, 1903, Day invited its members to an informal conference with Whitney and his lawyers at the palatial Whitney mansion on Fifth Avenue. "This was a strategic mistake of the enemy," wrote Frederic L. Smith many years later. The confrontation in a plush New York drawing room, aimed at allaying the fears of the independents, instead made them suspicious and resentful. Neither the suave courtesy nor the evident sincerity of Whitney changed their impression that they were being corralled like sheep at shearing time. Their resistance stiffened. During their drive up Fifth Avenue the committee had appointed Elihu H. Cutler as its authorized spokesman. On a frayed envelope this shrewd Yankee trader listed the three basic points which the independents now presented to Whitney and his attorneys: First.—We will pay one and one-fourth per cent royalty, three-fourths of one per cent to the Electric Vehicle Co., one-half of one per cent into an association of our own. Second.—This association shall say who shall or shall not be sued under the patent. Third.—It shall say who shall be licensed and who shall not be licensed under the patent. 96

v David and Goliath

The other members of the committee who faced Whitney in his drawing room were Joy, Smith, Clifton, and Davis. Whenever Frederic Belts, a member of the law firm retained by the Electric Vehicle Company, attempted to elicit from the independents an elaboration of their fundamental proposals, they silently referred all questions to Cutler. Again and again, Cutler solemnly recited the three points jotted on the worn envelope. Refusing to be drawn into any discussion that might lead to a weakening of their demands, the committee members sat in silence as Cutler droned on in unchanging reply. Whitney knew that he had at last met his match. He broke off his attempt to wear down the united opposition of the independents and accepted their program. At that moment the organization destined to be known as the Association of Licensed Automobile Manufacturers sprang into birth. 4 A final agreement was adopted at a four-day closed meeting of motor car makers held at the Manhattan Hotel beginning March 3, igog. 5 The articles of agreement which formally established the A.L.A.M. as a voluntary and unincorporated association of gasoline automobile manufacturers were signed by ten firms on March 5. The life of the agreement was set until the expiration of the patent on November 5, 1912, "unless sooner terminated." Each of the companies took out a license under the Selden patent. The original signatories included the following: Electric Vehicle, Olds, Autocar, Pierce, Packard, Apperson Brothers, Searchmont, Knox, Locomobile, Haynes-Apperson, and Peerless.6 The officers of the A.L.A.M. elected at the meeting were Frederic L. Smith, president; Barclay H. Warburton, of the Searchmont Automobile Company, vice-president; Henry B. Joy, secretary and treasurer; George H. Day, general manager. Day, who was still president of the Electric Vehicle Company, became active head of the A.L.A.M., whose permanent headquarters were soon established at 7 East Forty-Second Street. Named to the executive committee of the A.L.A.M. were most of those who had served on the executive committee of the Manufacturers' Mutual Association— Smith, Cutler, Clifton, and Davis—with the addition of Milton J. Budlong, formerly one of Colonel Pope's promising young men and now vice-president of the Electric Vehicle Company. A month before the establishment of the licensed association, Budlong had 97

Monopoly on Wheels

been elected president of the National Association of Automobile Manufacturers, the first organized trade body in the industry. The independents, now leagued together under the Selden banner, had won all of their demands. The restrictive licensing group which Day had envisioned was now a reality, although not in the precise form he had envisioned, for the cardinal provision of the articles of agreement ceded control of the Selden patent to the members of the A.L.A.M. Legal ownership of the patent was retained by the Electric Vehicle Company, but effective power resided in the executive committee, which was given absolute control over the issuing of licenses and over the policy and scope of all litigation arising over the patent. The management of the A.L.A.M. was confided to a five-man executive committee whose members were elected annually. Funds to meet the costs of suing infringers were set aside from the treasury of the A.L.A.M. By collective action, the gasoline automobile producers who had been marked by the Electric Vehicle Company as sources of tribute had beaten off the threat of control by the Whitney syndicate. They were now armed with a weapon for denying licenses to their competitors. Each member of the A.L.A.M., including the Electric Vehicle Company, agreed to pay a royalty of 1% per cent on the retail price of every gasoline automobile it manufactured. In addition to a membership fee of $2,500, each licensee made an advance payment of $1,000 covering royalties due on output commencing January i, 1903. As the nominal licensor, the Electric Vehicle Company collected the royalties, retaining three-fifths for itself and paying two-fifths to the A.L.A.M. Of the portion reserved by the Electric Vehicle Company, a third went to George B. Selden, who thus received one-fifth of the gross royalties. Half of Selden's share was paid to George H. Day under a private agreement made about three months before the A.L.A.M. was organized.7 The executive committee of the licensed association was empowered to rebate to its members part of its share of the royalties. Perhaps the most striking feature of the arrangement was the formal understanding that the Winton suit would be terminated with the acceptance of a Selden license by the Winton Company. Thus the final settlement of the first attempt to test the Selden patent on its merits was made out of court on terms favorable to 9S

v David and Goliath

the patent-holders. On March 9, 1903, at the urging of the A.L.A.M., Winton joined the licensed association and steps were taken for ending the suit. It was mutually agreed that the legal expenses incurred by the Winton Company, and any other licensed firm which had earlier contributed to the Winton defense, would be rebated by the Electric Vehicle Company from its own share of the royalties. On March 20, a final consent decree, "without costs to either party as against the other," was issued by Judge Emile H. Lacombe. Winton acknowledged the validity of the patent, thus relieving his company from an injunction and an accounting, and entered the A.L.A.M. on equal terms with the founding members.8 Other independents, against whom suits brought in 1900 were still pending, joined the A.L.A.M. in a similar manner. On April 15, 1903, the importing firm of Smith & Mabley submitted to a pro confesso decree; on August 5, 1903, the Buffalo Gasolene Company followed its example. Winton and the auto makers who had aided his defense received rebates as follows: Winton, $43,278; HaynesApperson, $3,200; Autocar, $2,200; Buffalo Gasolene Motor Company, $1,000; Packard, $300; E. R. Thomas, $50. Contributors to the Winton defense fund who refused to join the A.L.A.M. were never reimbursed. In a separate arrangement, Smith & Mabley received a rebate of more than $1,500 for the costs of their defense.0 By a stipulation to the closing of the Winton suit, all testimony and exhibits produced by the defense were withdrawn from the court files and delivered to the lawyers for the Electric Vehicle Company, the firm of Betts, Belts, Sheffield & Betts. Many of the exhibits pertained to the Brayton engine and its application to self-propelled vehicles before 1879. The legal propriety of the withdrawal was beyond question, but its ethical aspect was open to suspicion, for the suppression of the records implied that Winton had produced a serious challenge to the validity of the Selden patent. Later attempts to secure these records failed. The obvious nature of the settlement was revealed by the fact that Winton submitted to a consent decree eleven days after joining the A.L.A.M. Deep misgivings were aroused when the law firm of Kenyon & Kenyon, which had defended Winton, was retained by the Electric Vehicle Company at an annual fee of $5,000 three months after the closing of the Winton suit. Although the Winton officials did 99

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not learn of the retainer until later, it gave them reason to believe that Kenyon & Kenyon had profited from the outcome of the suit. A Winton executive said he did not doubt that the suppression of testimony and exhibits was designed to hinder and discourage further opposition to the patent.10 Yet Winton, like the other former independents now in the A.L.A.M., had little cause for complaint. Through their domination of the executive committee, the manufacturers controlled the A.L.A.M. "Applications for new memberships," said Hermann F. Cuntz, who became head of the A.L.A.M. patent department, "were screened by the five-man executive committee, requiring a unanimous vote." u The licensed association brought to the Selden patent a prestige it had never possessed, but few of the licensees, despite the public pronouncements of the A.L.A.M., privately believed in the validity of the patent. Their position was summed up in the observation that it was "cheaper to join than to fight." This view was endorsed by an A.L.A.M. member: The members of the association are all paying tribute to the Selden patent. If that patent can be broken we are suckers for paying tribute. If the patent cannot be broken we gain a certain advantage by being allowed to participate in the monopoly. . . . Therefore we took over the litigation to be sure of prompt action and to be sure that we were being protected in our monopoly so long as we were paying for that participation.12

Not one of the makers owing fealty to the A.L.A.M. produced an automobile bearing the slightest resemblance to the awkward vehicle described in the Selden patent. By 1903, progress in automotive design and construction had made the patent a veritable antique. Nevertheless, Selden and his allies insisted upon their right to exact payment from an industry to which he had made no contribution. To those who contended that the patent was worthless, the A.L.A.M. merely replied that no unlicensed gasoline automobile could be constructed, sold or used in the United States without infringing upon the Selden patent. 2

As the self-appointed guardian of gasoline motor car manufacture, with the right to grant or withhold licenses, the A.L.A.M. had the power to deny access to the technology of the automobile. IOO

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The licensed association prided itself on having enrolled "the flower of the industry at the time of its formation," but the executive committee never divulged the precise formula by which applicants were judged. The licensed manufacturers were primarily interested in using control of the patent to curb the excessive competition which they professed to discern in the young automobile industry. This power was exercised by the A.L.A.M. with an eye to conserving the interests of its members. In May, 1903, fortythree auto producers proclaimed their eagerness to join the association; by July, only fourteen of them had been admitted. "There must be a profit in our industry to ensure its development," said Day. "We have no desire to oppress anyone; but we propose to protect the business for our agents as well as ourselves." 13 He pointedly added that the A.L.A.M. members could supply double the existing demand for motor cars. At the outset, the A.L.A.M. proceeded with caution, hoping to still the charge that it was a "trust." In 1903 the national atmosphere was electric with agitation against the abuses of giant industrial combinations. President Theodore Roosevelt had opened fire against the trusts; the exposures of the muckrakers heightened the alarm of thoughtful Americans. It was true that A.L.A.M firms remained independent in the scope of their corporate activities, and that they competed among themselves, but the association could not convincingly refute the charge that its denial of licenses was aimed at reserving for its members the profits of the automobile industry. Its restrictive policy cut across public sentiment against monopolies. Acutely aware of this chink in his armor, Day hastened to portray the A.L.A.M. as the benign conservator of the trade. It had, he said, averted the "imminent danger of overproduction." This claim was echoed by one of the Selden members, who said of the A.L.A.M.: "It will not try to shut out reputable and established manufacturers who build a reliable vehicle; it will license all such, but it will license no unreliable upstarts. In this way the association will protect the public and be a boon to all purchasers of gasoline automobiles." 14 But what was the hallmark of a "reputable" auto builder? At best, this was a vague and flexible standard, subject to opportunistic manipulation by the executive committee of the A.L.A.M. A blunt statement by Herbert H. Franklin, president of the company which

Monopoly on Wheels

produced the Franklin automobile at Syracuse, New York, revealed the hopes he and his fellow A.L.A.M. members attached to the Selden patent: The licensees under the patent will surely, as they have a full legal right to do, control the gasoline automobile business, for as soon as the public becomes informed of the situation it will be very shy of purchasing unlicensed cars. It seems severe, perhaps, that this patent will cause any restriction in the number of manufacturers in the field. Nevertheless this is the purpose of the patent laws of the United States, and we believe in the long run it will prove to be the best thing for the manufacturers and the public. It would be impossible for all who have attempted to go into the business to make a success of it. Those already licensed can more than supply the demand.15

As the months wore on after the founding of the A.L.A.M., those outside the licensed fold, manufacturers, dealers and owners alike, found reason to view the future with foreboding. In the summer of 1903 the A.L.A.M. adopted an exclusive agency contract that compelled agents of licensed producers to discontinue handling unlicensed vehicles. As for purchasers, the threat of an infringement suit was not an empty one. The record of American patent litigation offered more than one example of royalties extracted by court order from users of an article held to infringe. Buyers of unlicensed cars feared that they might be haled into court. "It is an old truism that no sensible man wants to buy into a lawsuit," was the advice of a pro-A.L.A.M. publication. "That holds true with automobiles. The sensible automobilist, therefore, will think twice about buying a machine manufactured by a firm outside the association." 16 Many disquieted motorists balked at placing orders for unlicensed machines. Uneasy buyers were told to scout the field to determine whether the "unlicensed manufacturer has . . . capital enough to make good in case any of his customers should be annoyed." Scores of independent makers did not have the resources for guaranteeing purchasers against infringement proceedings. Some of them had already decided to eliminate their exhibits at automobile shows. "I guess," said one unlicensed maker, "I will cut out the shows and save my money to fight the Selden patent with." 17 The rumblings of an approaching clash over the Selden patent 102

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were heard even in Europe. The Selden patent affronted the French, who had led the world in placing the automobile on a commercial footing. An officer of Charron, Girardot fe Voigt, who was disturbed by the licensing of his New York agency of Smith & Mabley, was outspoken. "I am of [the] opinion that the Selden claim is ridiculous and that legal proceedings taken against American manufacturers or importers of foreign-made machines should be strenuously defended. What surprises me most is that in a country where progress is the watchword the courts should even for a moment sanction such a monopoly. . . . It is detrimental to the advancement of a trade which has an immense future." 18 In 1903 the shape of that "immense future" had been discerned by a small number of motor car manufacturers who saw that the industry would never attain its destined growth until the automobile lay within the reach of a vast public. As yet, this minority of producers diverged from the main trend of the industry. The builders of high-cost, high-powered and heavy touring cars with expensive accessories confined their outlook to the current market, taking the expedient if short-sighted view that their models were controlled by an unchanging demand. They did not consider the possibility that additional layers of the population could be brought into the market by producing lighter and simpler automobiles at lower prices. They were guided by the star of high unit profits on a limited output. With few exceptions, the manufacturers who had joined the A.L.A.M. were committed to the policy of building cars for a luxury market. Other auto producers, most of them outside the licensed association, believed that the future of the industry lay in the lowerpriced machine. Their smaller unit profit, they saw, would be redressed by a large sales volume. One trade journal spoke for them when it remarked that the industry would reach full flower when the automobile was designed for "utilitarian purposes" and built with "simplicity and cheapness." By 1903 these needs were being met in a modest way, particularly in the Midwest, where manufacturers showed more enterprise than their Eastern counterparts in tapping the moderate income layers. "Out in the West," said one observer, "are great masses of professional men, merchants, farmers and delegates at large of the so-called great middle class, who wish reliable, moderate-price cars of all-around utility, which 103

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shall have touring endurance and ability for hard work at failspeed, but with simple construction, easy control and cheap maintenance."19 The development of light, cheap automobiles by Midwestern producers was a direct response to social need. These manufacturers followed the formula of cultivating markets in small towns and rural areas, where farmers, physicians, and traveling salesmen made long journeys into country districts in all kinds of weather. These motorists could not use large and heavy cars, even if they had been able to afford them, for the low axles and differential housings of expensive autos could not clear the rutted and humpbacked prairie roads. The Midwest was the home of the "motor buggy," a cheap utility car that attained its vogue between 1904 and igo8.20 This type of vehicle, ranging in price from $250 to $750, was little more than an ordinary buggy adapted to a gasoline engine and fitted out with chain or cable drive. Among the betterknown makes were the Holsman, Reliable Dayton, Jewell, and Culver, all made in Ohio or Illinois. The "motor buggy," because of its poor design and construction, had a brief career, but it indicated that a ready market awaited the builder of a sturdy utility machine whose cost was not excessive for middle-class purchasers. As one manufacturer pointed out: "There is an easy success awaiting the men who first produce a cheap, good, plain machine without frills, brass railings or monkey traps, and that is guiltless of seventeen coats of paint when four are all that practical use calls for." This would require creative imagination that coupled the vision of a large market with the factory technology capable of producing cars in vast numbers. "Piece work cannot be done successfully on a few constructions— there must be a multitude to allow low cost. And the multitude of buyers are ready whenever the machines are." 21 The Midwestern formula was in basic conflict with the A.L.A.M. policy of restricted production of luxury cars for a limited market. And it was in the Midwest that an auto maker who gave the fullest expression to this formula arose to challenge the licensed association .

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3

In the summer of 1902, after two abortive attempts to secure a foothold in the motor car industry, Henry Ford found support for his third venture. Then thirty-nine years old, Ford had a modest reputation in Detroit as an automotive engineer and motor car racer. From 1899 to 1901 he had been associated with the Detroit Automobile Company. In 1902 he had been active for a brief time in the Henry Ford Company, breaking with his financial supporters after a disagreement over policy and management.22 Ford had other ideas. Notably, he was interested in developing a low-priced automobile to satisfy everyday use. The idea was not novel, but Ford was destined to be the first to transmute it into reality. "When the history of the automobile industry comes to be written," a trade commentator prophesied not long after Ford had his third company under way, "it will be found that the giants of it have been men of concentration, who have struck sledge-hammer blows in one place until they have accomplished their purpose." 23 The industrial career of Henry Ford was the forging of a single idea under the massive weight of an iron will and ambition. The possibilities of a cheap utility car were foremost in Ford's mind in August, 1902, when he entered into a partnership agreement with a Detroit coal merchant, Alex Y. Malcomson, to build a "sample commercial automobile." To this venture Ford contributed only his mechanical skill and ingenuity, assigning to Malcomson a half interest in his patents. In February, 1903, the agreement was redrawn to establish a copartnership under the name of the Ford Motor Company.24 On June 16, 1903, the Ford Motor Company was incorporated with a stock issue of $100,000 and a paid-in capital of $28,000. It had twelve stockholders, including Ford, who was vice-president and general manager. Among the other officers of the new company were the president, John S. Gray, a Detroit banker, and the secretary, James Couzens. Like every other automobile concern of the day, the Ford Motor Company began business as an assembler of vehicles, obtaining parts under contract with outside suppliers. Soon afterward Ford told one of the stockholders: "The way to make automobiles is 705

Monopoly on Wheels

to make one automobile like another automobile, to make them all alike, to make them come through the factory just like one pin is like another pin when it comes to a pin factory, or one match is like another match when it comes to a match factory." Asked how he intended to sell this immense profusion of automobiles, Ford replied: "You need not fear about the market, the people will buy them all right, because when you get to making them in quantities, you can make them cheaper, and when you make them cheaper you can get more people with money, sufficient money, to buy them; the market will take care of itself." 25 As yet, this was only a hope. Its realization would come between 1906 and 1908, with the manufacture of the Model N and the Model T. For the present, Ford faced the urgent task of defending his moral and legal right to enter and remain in the industry. The A.L.A.M. had rejected Ford as a mere assembler with a questionable background in the industry. It had told him that he could not qualify as a motor vehicle manufacturer under a Selden license. Denial of access to the industry threatened to cripple Ford's plans for a mass-produced car. We may be certain that Ford had a low opinion of the Selden patent. But in 1903 he knocked at the doors of the A.L.A.M. for a license. He knew that the Ford Motor Company, with its limited resources, could not lightly undertake an infringement suit. Like many other manufacturers, he believed it would be cheaper to settle than to fight the A.L.A.M. As early as 1900, while Ford was connected with the Detroit Automobile Company, he was aware of the Selden patent and the lawsuit against Winton. In November, 1900, the patent law firm of Barthel & Barthel sent him a synopsis of the Coxe ruling on the Winton demurrer and a copy of the patent. "You will see," they told Ford, "that this decision is of a sweeping character and the results of further adjudication of the case will be watched with interest." 28 It is probable that between 1900 and 1903 Ford received additional information from his patent attorneys. His reading of the automotive trade press also acquainted him with the progress of the Winton case. In February, 1903, while attending the Chicago automobile show, Ford discussed an application for a Selden license with Hermann F. Cuntz, who had been authorized by Day to negotiate with automobile manufacturers. Ford had heard rumors of an 106

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association organized under the patent and wanted to know whether he could join after his company had been incorporated. While Cuntz was open-minded, Ford drew the disapproval of a few leading Detroit producers who were losing money and keenly desired patent protection to cover their initial development expenses. Ford was not deterred. Shortly before the A.L.A.M. was founded, Cuntz had other meetings with Ford, but with no conclusive result.27 For competitive and other reasons, the licensed Detroit producers were leagued against Ford. Joy and Smith refused to consider his application, seeing a threat to their own investments if the Ford Motor Company should succeed. They also believed that Ford's record of two failures in the industry justified deferral of his application until he proved that he could build a successful automotive enterprise. These views wielded a powerful influence in trie high councils of the A.L.A.M. Reporting on a meeting of the licensed association, Horseless Age said: "One manufacturer of the Middle West, we are informed, had been given to understand that there would be no question about his admission, all that was necessary being for him to apply for membership when the right time arrived. This manufacturer now has the impression that the association does not want to admit him, but says that he will continue in business just the same." 28 Joy was inflexibly opposed to admitting Ford, and later threatened to withdraw Packard from the A.L.A.M. unless legal action was taken against the Ford Motor Company. In the spring of 1903, as Ford and Malcomson tried to raise capital for their projected company, some of the investors feared that Ford's exclusion from the A.L.A.M. might doom the Ford Motor Company. In mid-June a Detroit lawyer, John Wendell Anderson, paid $5,000 in cash for his fifty shares. Two weeks later he was disturbed by reports that the A.L.A.M. was determined to keep the Ford Motor Company out of the industry. In a chance encounter with Frederic L. Smith, whom he had known for many years, Anderson asked the president of the A.L.A.M. to explain the Selden association. Smith told him that the A.L.A.M. had been formed for the purpose of stabilizing the industry and barring fly-by-night operators and mere assemblers. "But Fred, we are an assembly plant," exclaimed Anderson. joy

Monopoly on Wheels

"Yes, I know," replied Smith, "you have got a small capital, a small plant." "Well, what do you do with companies that are merely assembly companies?" "Well, we are disposed to be fair. We will take an inventory of their stocks, machinery, and equipment, whatever they may have, give them a fair value for it, and then they quit business." When he subsequently recounted this episode, Anderson added: "I had a feeling of gone-ness in my stomach after that—pretty blue." 29 Smith appears to have acted from immediate self-interest. After Ford made his first approach to Cuntz, his application was placed before the A.L.A.M. executive committee. Smith recommended the appointment of a subcommittee of Detroit licensees to investigate the Ford application and lay a report before the next meeting of the licensed association. Smith was named a subcommittee of one. The nature of his report may be surmised from the fact that, of all the Detroit producers in the A.L.A.M., Smith had the most to lose by competition from Ford. The announced list price of the Model A runabout, the first car built by the Ford Motor Company, was $750. As an officer of the Olds Motor Works, which was then making a car listed at $650, Smith was understandably concerned about the impending appearance of an automobile selling for only $100 more. While the veiled threat made by Smith left Anderson in deep gloom, he and his fellow stockholders were determined to support Ford in the event of a concerted attack by the Selden interests. The future of their company, they knew, depended upon the automobile designed by Ford. Ford himself was certain he could rely upon John S. Gray, president of the company. Head of the GermanAmerican Bank of Detroit, Gray was a doughty Scot who some years before, as a large candy manufacturer, had vigorously defended his glucose patents against the candy trust.30 Ford could also count on the company secretary, the fiery James Couzens, who had left his desk as a clerk in Malcomson's coalyard to join the young enterprise. Ever alert to the most trivial expenses, Couzens did not underestimate the probable effect of a patent suit whose court costs and legal fees alone might tax the slim purse of the company. During the summer of 1903, as the fledgling company be108

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gan production of its first cars, it came perilously close to exhausting its cash resources. Yet Couzens, like the other Ford associates, did not flinch before the prospect of an infringement suit. As long as there was an opportunity for compromise, Ford was prepared to use it. In the early summer of 1903 he again explored the possibility of obtaining a license. In an account of this interview set down in 1928, Frederic L. Smith remembered that "one morning long ago" Henry Ford called on him and wanted to know whether membership in the A.L.A.M. would be granted to the Ford Motor Company if the firm submitted an application. Informally, Smith replied that an application would not be favorably considered at that particular time. "I remember solemnly telling Henry Ford that his outfit was really nothing but an 'assemblage plant'—poison to the A.L.A.M.—and that when they had their own plant and became a factor in the industry they would be welcome. . . ." 31 In 1938, Edsel Ford said: "My father inquired of one of the officers of the association if it were possible to join this association and become a member as the other motor-car companies were. He was told, I understand, he had best go out and manufacture some motor cars and gain a reputation and prove he wasn't a fly-by-night producer before he should ask for membership in this association." 32 The A.L.A.M. view that an "assemblage plant" was ineligible for membership was disingenuous. Not one of the licensed manufacturers had a self-sufficient plant. All of them, in some degree, assembled the parts and components purchased from outside suppliers, even as the Ford Motor Company took its parts from the Dodge brothers and other sub-contractors. The E. R. Thomas Company, an A.L.A.M. member, was "purely an assembling concern." 33 As late as 1909, eighty per cent of the automobiles built in the United States were assembled cars under this definition. The standard for gauging an assembled auto was complex and was no nominal guarantee of the merit or inferiority of the vehicle. In the final analysis, much depended upon the technical proficiency and business probity of the manufacturer. Most of the failures in the early years of the industry were caused by a scarcity of working capital and by the production of an excessive number of models on inadequate liquid assets. In the long run, ample working capital joy

Monopoly on Wheels

and the one model plan based on the standardized chassis spelled success, for maximum operating economy lay in duplication on a large scale. The A.L.A.M. had no control over such factors of corporate management. Most of the companies in the Selden association did not early appreciate the value of the one-model car designed for a mass market. That a firm held membership in the A.L.A.M. was no guarantee that it was stable and solvent. Six months after the creation of the A.L.A.M., one of its founding members, the Searchmont Automobile Company, went into receivership. The Ford Motor Company, in contrast, was guided by rigorous business principles which soon made it a superior organization. Above all, it built a utility car and pioneered in tapping the low-priced market on a broad scale. As Couzens later pointed out: With such a price appeal we believed that we could sell a great many more cars and we therefore upset all of the traditions of the business by planning to sell in volume at a low margin of profit instead of selling a few at a high margin of profit. . . . We observed that, as we had planned, the cheap, serviceable motor car quickly took the automobile out of the luxury class arid put it into the necessity class. That is what we expected to happen. Most necessities start as luxuries. Price is the fertilizer that stimulates the growth of a necessity. A luxury market cannot easily be planned, for it is governed a good deal by whim. We developed the necessity.34

In 1903, this revolution in road transportation lay only a few years off, and it would be achieved by the company that had been declared an outcast by the A.L.A.M. That Henry Ford's application for a Selden license was rejected by the A.L.A.M. because he was a lowly "assembler" must be accounted one of the exquisite ironies of American industrial history. 4

After Smith dismissed the Ford Motor Company as an "assemblage plant," Ford and his associates swallowed the insult and made another attempt to secure a Selden license. Apparently this move was made in the early summer of 1903, when the company officers saw their cash resources sinking lower and lower. They were still anxious to avoid the crushing costs of a patent suit. Shortly after Ford called on Smith, John W. Anderson invited no

v David and Goliath

Smith to lunch at the old Russell House in Detroit to discuss the license application. Ford, Gray, Couzens, and several of the stockholders accompanied Anderson to the meeting. The gathering was a friendly one, although Smith was discomfited by an acute consciousness that his moral position was weak. He and Gray felt out each other gingerly. Gray, who said that he sincerely favored the A.L.A.M., was willing to pay the $2,500 initiation fee, but he drew the line at paying back royalties. "Mr. Gray put their case so fairly and simply that I had a guilty feeling of 'sassing' my elders and betters when I, in turn, tried to state the A.L.A.M. policy and purposes," records Smith. More than two decades later Smith was still aware that he had cut "rather a sorry figure before a group of friendly men who put me personally in the wrong by dealing with me officially." Smith replied that the objection to back royalties might be left to further negotiation, and again advised the Ford stockholders to defer a bona fide application until they had made their company a going concern. This plainly implied that the Ford Motor Gompany was a weakling firm with a dubious future. Smith was conscious of his impertinence. "Fortunately," he writes, "the awkward meal was much relieved by avoiding the semblance of 'applying' for admission or refusing the 'application.' " 35 According to another account of the Russell House luncheon, the meeting took place in a tense atmosphere that exploded in Smith was there for the purpose of whipping the company into line. He presented the case of the Selden backers, as well as the position of the association, and sat down to await an answer.

It came: "Selden can take his patent and go to hell with it!" roared Couzens. Ford, who had been dangling in a chair tilted against the wall, rapped out: "Couzens has answered you." "You men are foolish," counseled Smith. "The Selden crowd can put you out of business—and will." Couzens laughed unpleasantly. Ford, standing up, pointed a finger at Smith and cried: "Let them try it." The meeting broke up.36 Ill

Monopoly on Wheels

There are other varying accounts. Ford later told one of his dealers that the A.L.A.M. executive committee was prepared to grant him a license if he listed his car at $1,000 and agreed to produce not more than 10,000 cars a year.37 Yet it is clear that Smith made the final decision for the A.L.A.M. For all his professions of a racked conscience, he was the only Detroit member of the Selden association who would fare better without competition from Ford. As the subcommittee of one delegated to report on Ford's application, he held an extraordinary power that was reinforced by his position as president of the A.L.A.M. Smith later made good his promise to consider an application from the Ford Motor Company. It is significant that this move came after Smith and other stockholders of the Oldsmobile firm began producing a heavier and higher-priced car that did not compete with the Ford. The offer, made in 1904, was rejected by the Ford directors. By then, nothing could have altered their defiance. Incontestably, the several approaches Ford made to the A.L.A.M. were motivated by self-interest. He was struggling for survival and recognition. The Selden association threatened to close the door against his entry into the industry and to cut off his vision of a mass-produced automobile. The Selden patent was a barrier to his future, and he saw that it must be battered down. It was incomprehensible that a fiction of the patent laws should thwart his own self-realization. "There's too much tradition in all human activity, too much respect for mere precedent," said Ford many years later. "If it stands in the way of progress it must be broken down." 38 Even at this time, long before he was acclaimed as a prophet of the machine age, Ford regarded himself as an agent of social progress. It may be argued that his change of attitude toward the A.L.A.M. was the maneuver of an opportunist. But this does not lessen the truth that expedient conduct may undergo a sea-change and become principled courage when the defense of personal interest takes on the larger dimensions of moral conviction. "What is the greatest thing in the world—your greatest ambition?" Ford was once asked. "To be free—a free man," he shot back.39 After his final conference with Frederic L. Smith, Ford knew that he could not be free so long as the Selden patent clouded the destiny he had marked out for himself. 112

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The reasons for his opposition were largely personal. His rebuff by the A.L.A.M. disparaged his ability as a designer and builder of automobiles. Ford's reaction was shaped by his instinct of craftsmanship and the stock of ideas he had absorbed during his youth on a Michigan farm. It was also influenced by his emerging views on the patent system and, finally, by the native shrewdness that characterized his decisions as an industrialist. Ford's shift from the role of suppliant to rebel cannot be understood unless the springs of his motivation are explored. By the time the Selden challenge arose, Ford had devoted about a decade of thought and labor to planning and building motor cars. He jealously prized as a hard-won creation the automobile which bore his name. That car, like those of other automobile pioneers, owed nothing to the teachings of the Selden patent. As Ford pointed out, he "knew it was the product of his own brain and no man on earth was entitled to any 'rake-off' from that particular car." 40 His pride as a craftsman was piqued by an attempt to exclude him from the industry on the pretext that he had trespassed on Selden's primacy. "Selden Pat Not Workable," Ford scrawled in one of the vest-pocket notebooks he kept for jotting down his thoughts. This brief verdict was his final repudiation, as a craftsman and engineer, of the Selden patent.41 Another compelling reason for his decision to make war upon the patent was his deep-seated distrust of monopoly. Ford drew many of his ideas and notions from a Midwestern rural culture that had a strong flavor of Populist discontent. With many Midwesterners of his generation he shared a hatred of industrial combinations and Eastern financial power. As William J. Cameron remarked, Ford was "raised on that terrible fear of monopolistic power holding everything down." 42 In his young manhood, Ford may have responded sympathetically to the attacks which Midwestern Populists, moved by a bitter animus against patent monopolies, launched against the Bell System and other large aggregations. More immediately, his opposition to monopoly was reinforced by the knowledge that one or more of the licensed Detroit auto manufacturers were intent upon driving him out of business. As for the patent system, Ford regarded it as at best a necessary evil. He had a reasoned view of invention as "a matter of evolution." The Selden patent bore the inescapable marks of evolution, "3

Monopoly on Wheels

but Selden claimed nothing less than the credit for genesis. Ford was fond of saying there was "very little new under the sun." "I have taken out 300 or 400 patents in all countries," he said in 1921, "and I undertake to say there is not a new thing in our car." Believing that very few inventions were truly original, Ford held that no one had a right to take out a patent and prevent others from using it. "Patent monopoly awakens his fierce resentment," said a journalist in 1918, when Ford was a candidate for the United States Senate. At that time Ford declared: "If I should go to the Senate, one of the first things I would do would be to begin an agitation for the abolition of all patent laws. They don't . . . stimulate invention—that is an exploded theory. But they do exploit the consumer, and place a heavy burden on productive industry." *a They were the nemesis of free competition. Finally, Ford's canny business sense told him that he would gain rather than lose by fighting the Selden patent. For motorists who in 1903 could afford a car that cost upwards of ,$2,000, the A.L.A.M. royalty of 1% per cent, which was added to the retail price, was not an onerous levy. It could, however, be a burden for the purchaser of moderate means who was unable to pay more than $1,000 for an automobile. The tax was in conflict with the low-price policy that Ford envisioned. In addition, should Ford attain an annual output running into the thousands, his total royalty payments would represent a sizeable sum. This money, he probably calculated, might be used to better effect in defending an infringement suit. 5

In the summer of 1903 the A.L.A.M. publicists laid down an opening barrage to warn motorists of an impending patent war. Many of their statements were sheer misrepresentation, intended to foster the belief that the Selden patent had been adjudicated. A few small manufacturers were frightened off by threats of infringement suits. "Happy the man who makes or sells only steamers or electrics or the parts thereof!" said Motor World. "There is no Selden patent or ghost of other patents to cause him to shudder by day or to see bugaboos by night." 44 Ford and his associates were aware of the heavy odds they faced. 114

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The A.L.A.M., with a membership of twenty-seven companies by the autumn of 1903, represented a total capitalization of $70,000,ooo. Although this massive figure exceeded by far the actual value of cash, plant, and equipment, it was formidable to a new company which had begun operations with only $28,000 in cash. By the end of September, 1903, the Ford Motor Company had marketed 195 cars, and in its first year it sold 1,700. This was an excellent record by the standards of that day, yet only the omniscience of hindsight can detect in it the dazzling success which lay ahead. There was no assurance that the company, as it began its career, would be able to defray the expense of litigation or meet the accounting for damages and recoverable profits in the event it lost an infringement suit. In replying to the challenge of the A.L.A.M., Ford and the other stockholders gave proof of their faith in the worth and staying power of their enterprise. Their first need was a capable patent lawyer who could bring under merciless attack every vulnerable point in the Selden claims. The Ford associates turned to Ralzemond A. Parker, the leading patent attorney in Detroit. Ford and Couzens knew that Parker had already "made an investigation of the patent situation, was thoroughly familiar with it, and did not believe it was worth anything." *5 A veteran of the patent bar, Parker was born in 1843. He served in the Civil War with the i7th Michigan Volunteer Infantry and fought at Antietam. He received his law degree from the University of Michigan in 1872 and a decade later became the senior member of the firm of Parker & Burton. In 1884 he was admitted to practice before the Supreme Court of the United States. A few years later he made a specialty of patent and copyright law, in which he conducted many important suits. He was credited with never having lost a case. Throughout Michigan he was familiarly known as "Judge" Parker. In the early summer of 1903 the Ford stockholders delegated John W. Anderson to approach Parker. Then sixty years old, Parker was on the verge of retiring from active practice, but the "old man," as his office staff affectionately called him, had the strength and vigor of his prime. A reporter likened him in appearance to James Russell Lowell. "There is the same expansive forehead, the same searching eyes, set wide apart, and the lower 7/5

Monopoly on Wheels

part of the face is covered by a luxuriant, although somewhat unkempt, mustache and beard." Tenacity was his master trait. In cross-examining expert witnesses in patent suits, the graying and grizzled Parker, with his look of an old lion, displayed a striking power that left his adversaries shaken. He was particularly astute in throwing opposition witnesses off guard with contradictory and damaging admissions drawn from their own testimony.46 As a patent attorney, Parker naturally had an abiding interest in mechanical inventions; but he reserved a special enthusiasm for the automobile. Two steam cars were constructed to designs prepared by him, and in 1900 he bought a Locomobile steamer which he maintained and repaired himself. Parker is said to have been the first person to make the return journey by motor car between Detroit and Flint. His son recalls that "Henry Ford went to him because of my father's faith in the auto industry." Although Parker was not opposed to "big business" as such, he had a staunch belief in "justice for the little fellow." 47 With Ford, he shared a deep commitment to the traditional principles of free enterprise. Parker took the Ford case under advisement and began a study of the automotive art and the status and aims of the A.L.A.M. At the same time the licensed association and the Ford Motor Company came to grips in a preliminary skirmish which took the form of an advertising war. On July 26, 1903, when the Sunday readers of the Detroit News and Free Press opened the pages of these journals, they saw a four-column advertisement inserted by the A.L.A.M.: NOTICE To Manufacturers, Dealers, Importers, Agents and Users of GASOLINE AUTOMOBILES This notice called attention to the Selden patent, which it said "controls broadly all gasoline automobiles which are accepted as commercially practicable," and listed the twenty-six licensees of that date, terming them the "pioneers in the industry . . . [who] have commercialized the gasoline vehicle by many years of development and at great cost." It closed with the warning: No other manufacturers or importers are authorized to make or sell gasoline automobiles, and any person making, selling or using such machines made or sold by unlicensed manufacturers or importers will be liable to prosecution for infringement. 116

v David and Goliath

While the Ford Motor Company was not mentioned, it was obviously the target of this blast. In all probability the Ford stockholders were not taken by surprise, for ten days earlier the Selden association had published its "Trade Talk—No. i" in Automobile Topics. On the very day it appeared (July 16) the first car sold by the Ford Motor Company was shipped from the Mack Avenue assembling plant. "Trade Talk" glowingly described the alleged benefits created by the A.L.A.M., but its protest that "the association is not a TRUST" gave the piece a defensive air. It was a fair indication that the A.L.A.M. had already begun to reckon with the force of public opinion. The advertisement in the Detroit press had more serious implications. It reached Ford and Couzens that Sunday as they were loading cars on the shipping platform. They did not interrupt their work; but on Monday morning Parker began drawing up the text of an advertisement which appeared in the Detroit Free Press on July 28, 1903, over the signature of the Ford Motor Company: NOTICE To Dealers, Importers, Agents and Users of GASOLINE AUTOMOBILES "We will protect you against any prosecution for alleged infringement of patents," it announced, and went on to quote Parker by name. "The Selden patent is not a broad one," he said, "and if it was it is anticipated. It does not cover a practicable machine, no practicable machine can be made from it and never was as far as we can ascertain. It relates to that form of carriage called a FORE CARRIAGE. None of that type have ever been in use, all have been failures." To the assertion that the Winton and other settlements had constituted judicial validation of the Selden patent, Parker replied: "No court in the United States has ever decided in favor of the patent on the merits of the case, all it has ever done was to record a prior agreement between the parties." The advertisement closed with an assurance of ultimate triumph: We are the pioneers of the GASOLINE AUTOMOBILE. Our Mr. Ford made the first Gasoline Automobile in Detroit and the third in the United States. His machine made in 1893 is still in use. Our Mr. Ford also built the famous "999" Gasoline Automobile, which was driven by Barney Oldfield in New York on Saturday a mile in 55% seconds on a circular track, which is the world's record. H7

Monopoly on Wheels Mr. Ford, driving his own machine, beat Mr. Winton at Grosse Pointe track in 1901. We have always been winners.

Some of these claims were exaggerated. Ford had built his first gasoline automobile in 1896, not 1893, and it was not the first gasoline automobile in Detroit. The advertisement is chiefly interesting as the first hint of an emerging Ford legend. "Our Mr. Ford" resounded not only here, but also in the promotional matter soon issued by the company. While Ford did not hold the majority stock interest in the company (of the i ,000 shares, he held 255), he was clearly its most important figure. The first Ford catalogue, released in 1903, announced: "The Ford derives its name from the fact that it is the crowning achievement of the well-known inventor, Mr. Henry Ford, vice-president and general manager of this company." The advertising war that broke out in the Detroit press spread to the automotive trade papers. The Selclen licensees emphasized their unity of aim by including in their advertising matter the designation, "Member of the Association of Licensed Automobile Manufacturers." The Ford Motor Company replied with full-page advertisements, often taking space directly opposite the A.L.A.M. warnings. These exchanges appeared in the trade journals for many weeks over the summer and fall of 1903, and did not abate until early in 1904. They created a tense atmosphere in the trade. The A.L.A.M. propaganda took a variety of forms. Licensed makers attached to the dashboards or inside door panels of each car a small brass tag bearing a relief of the Selden horseless carriage and the United States patent number (No. 549,160). This plate, the imprimatur of the A.L.A.M., indicated that both the manufacturer and the purchaser had paid tribute and were immune to litigation under the patent. "If a machine runs without one of these tags a lawsuit will ensue as quick as the association hears of it," motorists were warned. "Many individuals who import cars to this country secure a Selden license. The association has a corps of men on the watch for cars brought into this country, and if licenses are not secured there is apt to be trouble." Parts-makers were told that they would be penalized by actions for contributory infringement if they sold their products to unlicensed auto builders. One trade journal said that a judicial decision upholding the patent "would entitle those who control it to have every unlicensed 118

v

David and Goliath

gasoline automobile in the land battered to pieces by officers of the law and utterly destroyed, whether found in the possession of manufacturers or innocent purchasers." 48 George B. Selden added his own reflections to the developing conflict. On August 31, 1903, an interview published in the Hartford Courant quoted Selden to the effect that any attempt to unite the independent makers and to indemnify purchasers against unfavorable court judgments was doomed to failure. "No guarantee can be given by an individual firm or corporation against an injunction of a federal court," he declared. "We now have six good and sufficient grounds on which the court would award an injunction—viz., five decrees and the public acquiescence—90 to 95 per cent of the trade having taken license under my patent— any one of which six facts is considered as sufficient basis on which to rest the injunction order. In truth, on a motion for a preliminary injunction as it now stands, the only question the court would consider would be that of infringement, and on this question all parties have agreed that it is impossible to build a gasoline automobile without infringing. . . . the courts will not waste their time by permitting the discussion of matters already thoroughly settled by their decisions." Copies of this interview were widely circulated by the A.L.A.M. Few of Selden's assertions were tenable, in law and in fact. Particularly exceptionable was his attempt to spread the unfounded belief that the patent had been adjudicated and pronounced valid. For the A.L.A.M., intimidation was less expensive than litigation. But should a resolute opponent refuse to acknowledge the validity of the patent, and broadcast his defiance, the A.L.A.M. would have no recourse but to test the patent in the courts. 6

The Ford Motor Company called the bluff of the licensed association. On September 18, 1903, the stockholders gathered in Alex Malcomson's coalyard office to hear Parker deliver his report on the Selden patent and the A.L.A.M. They took encouragement from his flat assurance that the Selden claims were "no good" as a master patent but anxiously asked Parker to estimate the cost of carrying the suit to the Supreme Court. They might reasonably 7/9

Monopoly on Wheels

expect, he replied, to spend $40,000. A deep silence settled over the gathering. How could the young company, whose gross profits at this time amounted to about $36,000, obtain the money to undertake a legal contest of such proportions? After an earnest debate the stockholders decided to "throw down the gauntlet and not join the Association, come what may," and named Ford and Horace H. Rackham to a committee to confer with Parker on a course of action. Their decision was heavy with fate for the future of the automobile industry.49 Parker and Couzens immediately drew up a reply to the A.L.A.M. Cast in the form of an open letter,50 it was a bristling attack on the Selden patent and the policies of the A.L.A.M. Its aggressive spirit drew upon the sure confidence of Ford and the closely reasoned analysis of Parker. With this letter, the Ford Motor Company became the first unlicensed automobile concern to make a full and public declaration of its position on the patent. So far as our plan of action is concerned for the future it is extremely simple. We intend to manufacture and sell all of the gasoline automobiles of the type that we are constructing that we can. We regard the claims made under the Selden patent as covering the monopoly of such machines as entirely unwarranted and without foundation in fact. We do not, therefore, propose to respect any such claims, and, if the issue is forced upon us, shall defend not only ourselves but our agents and customers to the fullest extent and this, too, without regard to whether or not we join any combination for the purpose of defending against said patent. In taking this position we cannot conscientiously feel that Mr. Selden ever added anything to the art in which we are engaged. We believe that the art would have been just as far advanced to-day if Mr. Selden had never been born. That he made no discovery and gave none to the world. If he did, it was a narrow and impracticable one having no value, and that he and his assignees cannot monopolize the entire trade by forcing upon it an unwarrantable construction of his claims by those interested in sustaining them.

As to the Selden interview given out in Hartford, the statement continued: "We are informed by the highest authority that these statements are absolutely false. That the Courts never regard consent decrees of any value whatsoever in establishing a patent, and that they would form no basis whatever upon which claims for a preliminary injunction could be made." The Ford Motor Company ridiculed the boast of the A.L.A.M. that it controlled four I2O

v David and Goliath

hundred automotive patents. Most of these patents, the company pointed out, were of slight value. Moreover, some 2,500 other patents had been issued "which cover various branches of this industry, and which are in the classes to which the 400 belong." It is further claimed that they are now making 90 per cent of the gasoline automobiles. We are not now in a position to state whether this is true or not, but we are endeavoring to do our level best to reduce the per cent. It is evident from the foregoing that the Association is not a philanthropic institution. It is in the business to make money at the expense of five or six times as many competitors, and that its members have joined together because of some expected pecuniary benefit in monopolizing the market under cover of the Selden patent, and not because they believe the patent to be impregnable. This is undoubtedly the truth, as is evident, because up to this date, although repeatedly challenged by outsiders and by ourselves, they have brought no action since the Association was formed, that we can learn of, against an alleged infringer. They are no nearer establishing the Selden patent as a monopoly than they were last April. . . . This is not diligence on their part, but conclusively shows that the advertisements which they are putting out are intended to influence the public and are a substitute for the proper tribunal—the Courts. In stating our attitude with regard to these mendacious statements and the position of the Selden Association before the automobile public we are confident that we are not only voicing the opinion of ourselves, but of all the outside concerns, in saying that they do not inspire us, nor the outside concerns, with any degree of confidence in the equity of the Association or the bona fidaes of their claims. If sued as to defenses. First—All the defenses heretofore set up in any of the cases that have been compromised are just as available in any new suit as they ever were in any of the old ones. Second—Our attorneys have matter which is very material to a defense which has not been set up or shown in any case, and we do not believe it has been considered by any of the attorneys that have acted in behalf of the Selden patent.

The open letter announced to the automotive world that the Ford Motor Company prized its complete independence of policy and decision. "We are fighting this matter single handed," it said in another statement issued a short time later, "and have not joined any association whatever, nor do we anticipate doing so." 51 Within a few weeks, Henry Ford and several other members of the board of directors were empowered to take action in the event 121

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the A.L.A.M. filed suit. On October 24, 1903, they retained Parker at $40 a day for the time actually spent in the defense. Parker accepted the retainer with the stipulation that his activity as a patent lawyer would be devoted solely to the Ford case. By the standards of the day, Parker's fee was not a princely one. His income from this source was reduced because, for some unknown reason, he allowed a large discount on his fee. It later developed that Parker was often pressed by James Couzens on minor financial items. Although Parker was sometimes burdened with bookkeeping details that must have interfered with his main task, such irritating minutiae did not dampen his enthusiasm. The future of the company had been committed to his hands, and he set about preparing his case with tireless energy.

123

VI

A Mountain of Evidence

A

THE AUTUMN of 1903 closed in, anxiety weighed heavily upon the unlicensed camp. The A.L.A.M. now had twentyseven members, and was narrowly restricting its membership. As Motor World put it: "It now looks as if there are some to whom it will be said, 'You may remain in business,' and others to whom the injunction, 'No room for you,' will be given." 3 More than one hundred manufacturers remained outside the A.L.A.M., but they were unorganized, and their $27,000,000 of estimated combined resources was overshadowed by the $70,000,000 in nominal capital of the Selden licensees. Attempts were made to unite the independents, but these efforts were the work of promoters whose only objective was personal profit. One of these brummagem creations was the Independent Automobile Association of America, established in New York on October i, 1903. Its founding members included the Moyea, American Darracq, Star, and Standard automobile companies. It claimed to have secured pledges from sixty makers and dealers. The moving spirit behind this independent organization was Parker H. Sercombe, who had a dubious record as a promoter of mining, banking, and newspaper ventures in the United States and Mexico. Sercombe announced that Ford would join his protective group, but the Ford Motor Company never had any connection with the association. The Independent Automobile Association had hardly been launched when it vanished with Sercombe's hasty departure from New York. The American Darracq Company shortly approached the A.L.A.M., hat in hand, and took out a Selden license.2 This brought to a close the third movement to unify the unlicensed makers. There was no longer any organized opposition, not even in name, to the campaign of the A.L.A.M. to validate the Selden claims by public acquiescence. The licensed associa'23

Monopoly on Wheels

tion still hoped that the pressures it exerted through intimidation would make a court test unnecessary. 1

The train of events that had been set in motion by the establishment of the A.L.A.M. now moved to a climax. Immediately after the Ford broadside against the Selden organization was published, the A.L.A.M. held a two-day meeting behind closed doors in New York in late September. Rumor held that the A.L.A.M. had decided to commence legal proceedings against the two most prominent firms outside the Selden fold, the Ford Motor Company and Thomas B. Jeffery & Co. "It has been no secret," reported Motor World, the trade spokesman for the A.L.A.M., "that certain of the licensees who have felt most keenly the Jeffery-Ford competition came to New York determined to force the Association's hand by either obtaining the protection promised them or causing trouble within the ranks." 3 When he emerged from the conference, George H. Day announced: "There will be a piece of news, big news, in a few days." For the present, however, the A.L.A.M. refused to disclose its decision. Actually, the Selden conclave had agreed to sue the Ford Motor Company for infringement of the patent. Meanwhile, a tense industry could only speculate about future developments. Would Ford and Jeffery unite against the A.L.A.M., or would each go his own way in opposing the patent? Would the brunt of the A.L.A.M. assault be directed against Jeffery, or would its full force descend upon Ford? A swarm of contradictory rumors swept trade circles in the major cities. They had an electrifying impact. Anxious motorists, shopping for cars, inquired about the risks of buying unlicensed cars. The Jeffery company distributed circulars assuring purchasers and users of its Rambler automobile against infringement actions. Proudly asserting that his dealers were standing firm in their loyalty to him, Jeffery pointed out that only one had deserted to the licensed ranks.4 For a few weeks in October the figure of Thomas B. Jeffery vied with that of Ford in dominating the thoughts of the uneasy independents. The doughty Jeffery, maker of the sturdy Rambler car, had long since won a reputation as an unyielding foe of 124

vi A Mountain of Evidence

patent combinations. During his long career as the manufacturer of the Rambler bicycle he had more than once clashed with the patent claims of Colonel Albert A. Pope and had dealt Pope his first defeat in an infringement suit. By 1890, Jeffery was known as one of the most dauntless makers in the bicycle trade. In 1901, after retiring from the bicycle industry, Jeffery produced the first Rambler car at his large plant in Kenosha, Wisconsin, where he achieved a high level of vertical integration under a single roof. Jeffery was later among the first auto builders to adopt a one-model policy.5 As one of the most successful manufacturers in the industry, Jeffery was eyed by the A.L.A.M. as an eligible applicant for membership. To repeated but unavailing efforts to woo him into the licensed association, Jeffery replied that he would remain wholly independent and fight the A.L.A.M, without aid from other manufacturers. His record of defensive warfare against the Pope bicycle patents was proof of his capacity to strike back. The A.L.A.M. feared that Jeffery would merge forces with Ford. The laconic statements issued by Jeffery only deepened the suspense in the industry. None outside the councils of the A.L.A.M. could say with certainty whether Ford or Jeffery would be chosen as defendant in the suit which all anticipated. The fog of rumor and speculation was dispelled on October 22, 1903, when the Electric Vehicle Company and George B. Selden, acting as nominal complainants, carried out the bidding of the A.L.A.M. and lodged suit in the United States Circuit Court for the Southern District of New York against C. A. Duerr & Company and the Ford Motor Company for infringement of the Selden patent. Duerr was the Ford agent in New York City. "The Selden lightning has finally descended," was the message flashed to the entire industry. "It is aimed to strike the Ford Motor Company, of Detroit, who have so boldly defied it." 6 In the fourth month of its corporate life, the company was brought under attack by the most powerful organized body in the automobile business. The timing of the suit was calculated to extract the maximum benefit in publicity and advertising for the Selden forces. The action was brought at the beginning of the 1903-04 season, when new models were being readied for the market. This had been a 125

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common tactic in other major patent litigations. The A.L.A.M. attorneys also chose with care the federal district court in which the suit was filed. Proceedings could have been commenced in any circuit jurisdiction where a Ford car had been sold and was in use. The complainants selected New York because it was, as it is to this day, the trade capital of the industry. As a port of entry where most foreign automobiles were delivered to their wealthy purchasers, New York offered yet another advantage as the seat of the action. The Selden association planned to exact tribute from importers of motor vehicles as part of its campaign to assert the supremacy of the patent. It was probably with a ground swell of pride that Henry Ford read in the Detroit Journal on October 24 that "the Ford company was picked out for a horrible example because it is the largest independent company in Detroit. . . ." Ford had already made a public statement that he "would give the 'trust' $1,000 if they would advertise his business by commencing suit against him. . . ." One of the Ford officials spoke for all the stockholders when he said: "It may take years to thresh the matter out in the courts. In the meantime we are now completing an enlargement of our factory, giving us three times as much capacity, and our output the coming year will be five times as large as during the present year. We have no apprehensions as to the result of this suit." On November 6, Ralzemond A. Parker appeared at a meeting of the Ford directors to discuss the likely strategy of the A.L.A.M. Later that day, James Couzens sat down at his desk to enter a report of the proceedings in the company minutes. He wrote: "The information xvas very reassuring of our success." None of the Ford associates underrated the burdens and the probable cost of the litigation, but all were buoyed up by the promise of ultimate victory. The industry foresaw that the suit would probably be of long duration, for the declared attitude of the Ford Motor Company made a settlement out of court highly unlikely. Some complained that the adjudication of the Selden patent had been excessively delayed, and predicted that a longer wait was in store. The case, said Automobile, would throw a sharp light on the deficiencies of a patent system "which affords no relief in those industrial [26

VI

A Mountain of Evidence

emergencies in which a quick, final decision is the desideratum, even more than the justice of the decision when it is eventually rendered." 7 Yet independent makers could feel reasonably confident that they would not be molested in the courts as long as Ford did not surrender before the conclusion of the test action. In the Duerr case, the Ford Motor Company had been joined as co-defendant merely for the purpose of bringing it within the jurisdiction of the circuit. In reality, it was the only defendant, and bore the full burden of the costs in this and other suits lodged against it at the behest of the A.L.A.M. For technical purposes, the original suit against Duerr covered the manufacturer and the dealer of an unlicensed automobile. Among the first purchasers of Ford motor cars in New York was the O. J. Gude Company, an advertising concern which pioneered in the use of illuminated displays on Broadway. The Gude Company bought a Ford automobile from Duerr on September 21, 1903. On November 5, 1903, a suit was filed against Gude to cover the purchaser and user of an unlicensed car. A third action, which did not involve Ford, was filed on December 28, 1903, against the French firm of Parihard & Levassor and the manager of its New York branch, Andre Massenat. This suit against the Panhard interests, makers of one of the most prominent imported lines marketed in the United States, covered a foreign manufactvirer. To these suits were added two more in the following year, making five cases in all. On January 21, 1904, suit was brought against John Wanamaker and his associates, who had succeeded Duerr as the Ford agent in New York. On November 12, 1904, the last in this series of actions was filed against Henry and Albert C. Neubauer, a firm of Dutch importers whose main offices were in Paris. The suit against the Neubauer agency, which had sold Panhard and Renault motor cars in the United States, covered an importer of automobiles. It was thus that the A.L.A.M. gave the patent war a far-reaching scope. Subsequently the five separate actions were consolidated into two test cases. One segment, embracing the Duerr, Gude and Wanamaker litigations, was known as the "Ford suits"; the other, consisting of the two remaining cases, was known as the "Panhard suits." Throughout the trade, however, the five actions were simply termed "the Selden patent case," under which rubric I2J

Monopoly on Wheels

they have since been remembered. All of these suits, in which the fundamental issues were essentially the same, were later consolidated in one hearing for purposes of adjudication. The Electric Vehicle Company, the nominal complainant, refused to enter duplicated testimony from the Panhard suits into the Ford record and instead insisted that depositions be taken again. As a result, the Selden case record attained formidable proportions. In each case, the complainants alleged infringement of the Selden patent and sought an injunction, an accounting for damages and recoverable profits, and the payment of costs. In his answer, Parker cited thirty-two defenses, ranging from minor technicalities to fundamental issues. This exceeded the number of defenses customarily invoked in patent suits. Parker later admitted: "I am frank to say that in all my experience in patent litigation I have never had a case in which every defense known in law to the validity of a patent was raised and relied on by the defendant to such an extent as in these Selden patent cases." 8 Parker contended that the invention claimed by Selden was neither patentable, useful, nor operable. He charged Selden with having obtained his letters patent through fraud, and lashed out at the withdrawal of the files and records in the Winton case, maintaining that their suppression had been calculated to hamper the defense of subsequent suits. Although the A.L.A.M. was not formally a party to any of the actions, Parker named it as the manipulator of the Selden patent and said it had been formed "with a deliberate attempt to monopolize the business of manufacturing gasoline automobiles. . . ." In the eight years of litigation that lay ahead, Parker was to return to this theme again and again as the Goliath of monopoly came under attack in and out of the courts. 2

As a suit in equity, the Selden patent case was now submitted to the routine process of the law. The procedures governing patent disputes during the labored progress of the Selden suit were cumbersome and unwieldy, encouraging prolixity and delay. Litigants were subjected to a wearisome ordeal in which economic strength rather than the intrinsic merit of opposing 128

vi A Mountain of Evidence

claims often determined the outcome of a contest. Heavy costs and failing endurance compelled many weaker concerns to abandon their resistance in the courts. "Litigation and threats of litigation," one authority has observed, "may often be more effective in establishing and perpetuating monopolistic control than any other recourse available to industrial giants bent upon eliminating competition." 9 The Selden suit, even before it came up for hearing in the lower court, was marked as a leading example of the abuses fostered by existing procedures. Because the case later became a byword for many of these abuses, the procedural deficiencies of patent litigation deserve more than passing notice. These flaws became evident soon after the Civil War, when the patent law took an increasingly important role in the development of the American economy. No form of litigation, complained The Nation in 1874, was "so slow and so costly as that of patents," while attorneys pointed out that this "notorious evil" might be alleviated by the adoption of simplified procedures. By 1910 critics were still inveighing against the "chaos" of patent lawsuits. Not until 1913, when revised rules of equity went into force, were some of these defects corrected.10 In a patent suit undertaken before 1913, the method of taking testimony abetted delay and the piling up of mountainous legal records. The proceedings were not held in open court. Witnesses were interrogated before a standing examiner of the court or a notary public in law offices, hotels, or other places. In instances where witnesses resided more than one hundred miles from the seat of action, testimony was taken in widely scattered localities. There was no effective way of excluding irrelevant matter. The standing examiner, whose duties were nominal and non-discretionary, was powerless to control or limit the line of inquiry. He merely maintained order during the taking of testimony and supervised the transcription of the stenographic record. From three to five years were ordinarily required for collecting depositions and evidence. Thus the trial judge heard arguments drawn from a record over which he had no control. It was generally admitted that much of the testimony introduced in patent cases would not have been admitted in a court of law. Attorneys habitually bur129

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dened the record with anything that might have even the slightest value when it came under the scrutiny of the trial judge. The voluminous records were often crammed with materials only remotely germane to the issues and to the direct relations of the contending parties. Industrialists and inventors alike were dissatisfied with the tedious delays and staggering costs of patent litigation. Thomas A. Edison spent about one million dollars in prosecuting infringers of his electric lamp patent but failed to secure an accounting of the full profits he thought his due. H. Ward Leonard, the inventor of an electrical device for automobiles, brought an infringement suit in 1903 which dragged on for five years. The defendant called more than forty witnesses. The record filled more than 5,000 pages. Charging that the procedure for taking testimony was the most egregious feature of a patent suit, Leonard observed that "Dickens' Circumlocution Office and Daniel Doyce's experience with it as to his invention" could hardly match the creakings of the American patent system.11 Expert witnesses usually received about $50 a day, although some were paid considerably more, and patent attorneys commanded a fee of about $100 a day for time actually spent on a case. A complicating factor was the unfamiliarity of many judges with the abstruse technical questions set before them—a deficiency which has not yet been remedied. The patent law, as Thurman Arnold has remarked, has become "one of the most intricate mysteries of the law—a combination of law and mechanics under which almost any results might be achieved." The application of the law sometimes falters when judges venture into a province where a misapprehension of the tangled facts of technology leads the march of logic into strange byways. "Patent law," an authority states, "may present questions which cannot be decided by objective tests but depend for solutions largely upon the personal views of the judge." 12 Expert witnesses who made a calling of appearing in patent cases noted that most judges, with rare exceptions, did not have the necessary training and knowledge to sift and appraise with certainty the multitude of conflicting statements on technical points. Again and again, the cry went up: "The judges cannot get at the facts." One justice of the Supreme Court readily ad13°

VI A Mountain of Evidence

mitted that jurists who did not have adequate guidance moved into the realm of patent law at their own peril. In an address to a gathering of patent attorneys, Charles Evans Hughes ruefully admitted that the patent law had a language and concept all its own. "Even the judges do not always follow it," he said. "I have known no more laborious hours than those I have spent in trying to understand you, and then in trying to make the court understand what I thought I understood." 13 Still another defect in the administration of justice prolonged the ordeal of litigants who appealed judgments. The road from the court of the first instance to the tribunal of last resort was unusually long and devious. The judiciary act of 1793 provided for a single court of appeals in all cases, but when the volume of business that came before the Supreme Court dictated the need for relieving the pressures on the high bench, the act of 1891 created the circuit courts of appeals. These intermediary tribunals brought relief and general satisfaction except in patent causes. While a patent is a national grant whose scope as a property right extends to the borders of the United States and its territories, it actually has been the subject of determination by nine different courts of revieiv, no one of which is bound by another. The decision of each circuit court of appeals is final and binding only within its own jurisdiction. Such flaws in the national patent system virtually guaranteed a protracted and expensive contest in the courts. The A.L.A.M., with its powerful allies among Eastern financiers, had the resources for sustaining a legal battle of far-reaching scope. The Ford Motor Company could foot the bill of a patent lawsuit only by relying upon its capacity to produce and sell its cars at a profit. Nothing but an abiding conviction that it was legally and morally in the right could have sustained the Ford Motor Company in the long ordeal ahead. 3

The Selden patent suit was almost wholly lacking in vivid scenes and episodes for the delectation of the press. Reports of the case that appeared in the newspapers were few and scattered. But in the trade press, which never lost sight of the suit's crucial 131

Monopoly on Wheels

importance for the industry, the developments of the Selden dispute drew almost continuous interest and comment. Testimony was taken in many cities, including New York, Ithaca, Rochester, Philadelphia, Reading, Boston, Providence, Cleveland, Lansing, and Detroit. On infrequent occasions, when an order was handed down by a judge of the district court, counsel for the opposing parties made a court appearance. In the three Ford cases, forty-two witnesses were called for the complainants and forty for the defendants. In the two Panhard suits, eleven witnesses were called for the complainants and thirtynine for the defendants. Among the witnesses were some of the most prominent automotive pioneers in the United States, such as Charles E. Duryea, Hiram Percy Maxim, Elmer Apperson, Ransom E. Olds, and Jonathan D. Maxwell. George B. Selden and Henry Ford, who emerged as the key personalities of the struggle between the licensed and independent forces, added their testimony, although it was Selden who spoke at far greater length. William Gomm and others who had been associated with Selden's early experiments in Rochester stepped forward from obscurity. Mrs. Rhoda B. Paulman, the widow of George B. Brayton, was summoned to present details of his work, as were friends and associates who had in some way been connected with the development and application of the Brayton two-cycle motor. Professor Rolla C. Carpenter of Cornell University, a leading authority on the internal combustion engine, appeared as an expert witness for the defense. Witnesses were also called from Europe. Dugald Clerk sailed from London to put in an appearance as an expert witness for the complainants. Arthur Constantin Krebs, director of Panhard & Levassor, came from Paris to testify on behalf of his firm. Others who appeared were officials or associates of the Electric Vehicle Company and the A.L.A.M., including George H. Day and Milton J. Budlong. Some of this testimony, as well as many of the numerous exhibits, made the Selden case record an invaluable source for the history of the internal combustion engine and the automobile. The massive record holds a wide range and variety of materials, such as patent publications, motor car catalogues, advertisements, newspaper and magazine articles, agreements and contracts, ac132

vi A Mountain of Evidence

count books, journals, charts, diagrams, drawings, and photographs. Together with the briefs and printed oral arguments, the entire record contains more than 14,000 pages and 5,000,000 words. A large part of it is dull and prolix except for the specialist with a consuming interest in the mechanical details of early motor cars. Imbedded in this stream of verbiage, however, are portions of testimony and evidence which for the automotive historian are matchless both for their intrinsic value and their availability in a consolidated source. Among the counsel in the case were some of the most distinguished members of the American patent bar. The Electric Vehicle Company was represented by the New York law firms of Betts, Betts, Sheffield & Betts, and Redding, Greeley & Austin. The major part of the case for the complainants was handled by Samuel R. Betts and William A. Redding, the latter a veteran of many years of bicycle patent litigation for the Pope interests. Other attorneys who made appearances for the licensed association included Frederic H. Betts, James R. Sheffield, Ramsay Hoguet, and John W. Peters. George Raines served as personal counsel for Selden. Frederick P. Fish, of the firm of Fish, Richardson, Herrick & Neave, and one of the eminent patent attorneys of the time, took no part in the examinations, but aided in preparing the briefs and participated in the arguments at the trial hearing. The defense of the three Ford suits was shouldered almost completely by Ralzemond A. Parker. With his rumpled clothes, wide-brimmed hat, and open Midwestern manner, Parker had a rural air that was in sharp contrast to the poise and polish of his Eastern adversaries. According to a friendly New York attorney who made his close acquaintance, Parker "knew more about the case than anyone connected with it." 14 At the suggestion of Parker, the New York firm of Cardozo & Nathan was retained as associate counsel. One of its staff members, William L. Eaton, sometimes appeared at the examinations; otherwise, Cardozo & Nathan attended to routine matters during Parker's absence from the East. Parker was assisted by Elliott J. Stoddard, an associate of Parker & Burton. A graduate of the Sheffield Scientific School at Yale who held a degree from the Columbia Law School, Stoddard was an expert on internal combustion engines. The Panhard and Neubauer interests retained the New York 13)

Monopoly on Wheels

law firm of Coudert Brothers. While the interrogation of witnesses in the Panhard suits was handled by John P. Murray, a handsome young attorney on the Coudert staff, the member of the firm who was destined to play an important role in the case was Frederic R. Coudert. He was not a patent attorney. Descended from a French grandfather who had settled in the United States in 1823, Coudert had a fluent command of the French language. His mastery of that tongue, and his excellent relations with Panhard & Levassor, were to serve in good stead all of the opponents of the Selden patent. Parker worked in close concert with the Panhard lawyers. He often visited the Coudert offices on Rector Street and maintained a correspondence with Murray. He shared with the Coudert firm the services of a New York patent expert and consulting engineer, George H. Benjamin, who furnished extensive information on foreign patents. Parker also communicated with Panhard & Levassor on technical aspects of the case, and arranged with its Eastern representative for a reciprocal sharing of patent publications. Parker stressed that the example of Winton's surrender must not be followed by any of the defendants. "We expect this fight to be fought out to a complete finish," he wrote to his French allies, "and in the event that you will join us to this extent in affording us aid requested against the common enemy we assure you that no arrangements will be made whereby your confidence will be betrayed or wherein you will be left to yourselves in any fight of your own." 15 The Selden lawyers began taking their testimony in New York on April 11, 1904, and completed their prima facie case the following June. This phase of the testimony filled two printed volumes running to about 550 pages. The proceedings were mainly exploratory in nature. The strategy of the complainants was based on the position that the Selden patent was a valid pioneer invention and hence entitled to a broad construction. Parker planned to bring under attack every vulnerable feature of the patent. His main defenses were anticipation in the prior art, lack of invention, and noninfringement. His primary aim was to demonstrate that the automotive art, as it existed before Selden filed his application in 1879, had yielded patents and '34

VI A Mountain of Evidence

constructions that anticipated the Selden claims in almost every respect. If Parker could show that the state of the prior art destroyed the novelty of the Selden combination patent, he might then proceed to prove that the Selden structure was devoid of invention and hence non-patentable. Alternatively, if the Selden combination was patentable, the prior art indicated that the only novel element in the Selden claims was the modified twocycle engine. On this ground, Parker could assert that the patent should be restricted to the specific engine described by Selden. Thus Parker articulated the logic of the facts at issue: a broad construction of the patent would hold it worthless; a narrow construction would hold it limited as a combination patent to the modified Brayton motor described by Selden. The heart of the dispute involved two points of law. Did the Selden patent disclose a new invention? Did the scope of the patent cover the modern gasoline automobile? Mindful that contemporary public opinion was hostile to trusts and combinations, Parker intended to bring under searching examination the policies and methods of the Electric Vehicle Company and the A.L.A.M. He used every available opportunity to link the Selden patent with the master design of industrial monopoly. In patent litigation, this counted for little at that time, but Parker knew that it would at least afford the defense a reserve of moral capital. Parker was most effective in the cross-examination of witnesses, particularly the experts produced by the licensed interests. "They are putty in the hands of Parker and when he has finished with one of them there is a gleam in his eye which indicates he is satisfied he had made the opponent's witness his own best advocate," wrote a journalist who observed Parker in action in the Selden case.16 Such xvas the result when Parker confronted the evasive Edward M. Bentley, the first expert witness to appear for the Electric Vehicle Company. Parker kept Bentley under cross-examination for twenty-three days, putting to him well over 1,700 questions. By the time Bentley completed his opening testimony at the end of May, 1904, the Selden lawyers were able to gauge the full measure of Parker's ripe experience at the patent bar. Parker followed his customary gambit of asking apparently in135

Monopoly on Wheels

nocuous questions, lulling the witness into a false complacency before striking hard with a rapid-fire of questions on fundamental issues. In Bentley, Parker had an ideal target for such tactics. Bentley was an electrical and mechanical engineer who had been an assistant examiner in the United States Patent Office and had frequently appeared as a technical expert in patent suits. He had testified for the Electric Vehicle Company in the Winton case. But his experience as an engineer had been confined to electrical machinery. In a case involving an allegedly basic patent on the gasoline automobile, Bentley was a singularly poor choice as an expert witness. His scanty knowledge of gasoline cars (he admitted that he had never driven one) was based chiefly upon his attendance at the annual automobile shows in New York. After getting off to an unpromising start, Bentley took refuge in indefinite and inconsequential answers. The court was not obliged to accept the testimony of an expert, but it would inevitably attach considerable weight to a cogent analysis. By the same token, the court might tip the scales against a patent for which an expert offered a flabby defense. Parker set his trap. He insisted on specific replies. Whenever Bentley failed to make a forthright response on a material issue, Parker exposed the inadequate technical equipment of this reputed authority on the automotive art. Asked whether he had ever studied the horseless carriage as a phase of mechanical engineering, Bentley replied: "I do not know what you mean. Of course I have had to consider the matter from nearly every point of view." Would a machine constructed according to the Selden patent prove a practicable means of road locomotion? "That is too indefinite a question for any one to answer," ventured Bentley. He had never seen a Brayton engine. Although he claimed twenty years of experience with internal combustion engines, he finally admitted that he was not versed in the art of the gas engine. His knowledge of this field did not go beyond a cursory examination of "one or two" standard texts on the subject. Long before Parker completed the crossexamination, Bentley had disqualified himself as a mechanical expert on automobiles. Devious, shaky, and uninformed, Bentley's opening testimony was a shambles of technical analysis and a liability to the comI36

VI

A Mountain of Evidence

plainants. Later, when he was recalled for rebuttal testimony, Bentley found himself enmeshed in contradictions. A New York reporter said of him on this latter occasion that "he was fed with choice bits of his previous testimony, at which he made wry faces; and when forced to compare one answer with another which he had made to the same question, variously worded, he frequently took refuge in those devices of the professional witness, a lapse of memory, or 'I don't know.' " 1T The Selden attorneys did not depend wholly on Bentley. They withheld for the present their most imposing expert witness, and waited watchfully as Parker opened the case for the defense. 4

Henry Ford was called as the first witness when Parker began his case in Detroit on July so, 1904. The first of three notable lawsuits in which he testified during his active life, the Selden patent case revealed Ford as reticent in manner but plucky in spirit. His tone was pitched at the level of a small-town mechanic talking of shop matters, and he was happiest when the questions centered upon topics directly related to his automotive interests. His intensity was concentrated in his keen gray eyes, which flashed with a brilliant and twinkling light. Spare and wiry, with a dry grin flitting on his lips, Ford looked and acted much as he did when he was later portrayed by the pen of John Reed: "A slight, boyish figure, with thin, long, sure hands, incessantly moving. . . . He spoke swiftly, easily, without raising his voice, without hesitating, and his vocabulary consisted mostly of words of one syllable." 18 His testimony did not have the brash self-confidence and shrewd humor which he used to good effect in the minority stockholders' suit brought against him by the Dodge brothers in 1916. It did not ring with the intimate personal note of his controversial appearance in the libel suit he pressed against the Chicago Tribune in 1919. Despite its largely impersonal character, Ford's deposition in the Selden case illuminated some of the basic traits of his enigmatic personality. His unadorned vocabulary, with the stark simplicity of a machined piece of steel, was the perfect instrument for expressing i37

Monopoly on Wheels

a mind constantly engaged in stripping complexity to its bare and muscular essentials. Little interested him save the world of machines, and the thought he communicated was as austere and utilitarian as the Model T, whose image was then taking form in his brain. In his replies to questions about engines and automobiles, Ford imparted the quiet joy of a craftsman reworking familiar materials. His testimony was among the briefest given by any of the leading witnesses in the case. Ford delivered an informative autobiographical account and detailed the mechanical features of the motor cars designed by him. Under cross-examination by Samuel R. Belts, Ford freely acknowledged his borrowings from the automotive art. He cheerfully admitted that his experimental engines had been patterned after the Otto gasoline engine. This was in keeping with the defense argument that the automobile had been evolved through a rearrangement of well-known mechanical elements, and that it was open to any experimenter to substitute an improved power plant for an inferior one in a familiar combination. "You have just been a good collector and mechanical arranger in getting out your present machine?" asked Betts with illconcealed scorn. "I guess so," drawled Ford. But he quickly added that the collecting and arranging had been done by himself. Then, as later, Ford believed that the success of his automobile was built upon the contributions of innumerable predecessors.* More than once Ford enlivened his testimony with a touch of wry humor, but he was unsmiling when he conceded that the Selden patent threw a shadow over his career. * Although he readily acknowledged the importance of individual genius, Ford regarded invention as fundamentally a social and cumulative process. When he built his first car (he pointed out many years afterward), "I invented nothing new. I simply assembled into a car the discoveries of other men behind whom were centuries of work, and the discoveries of still other men who preceded them. Had I worked fifty or ten or even five years before I would have failed. So it is with every new thing. Progress happens when all the factors that make for it are ready, and then it is inevitable. To teach that a comparatively few men are responsible for the great forward steps of mankind is the worst sort of nonsense."—"The Schoolmaster of Dearborn," New Outlook, CLXIV (September, 1934), 61-62. 138

vi A Mountain of Evidence Q. If the Selden patent in suit is sustained as valid and infringed and your company put under injunction preventing you from making cars . . . , it would be a pretty serious matter for you individually, would it not? A. Yes.19

In one respect, Ford was either willfully inaccurate or unable to recall the facts. He claimed that the initial public test of his first car had been made in the summer of 1892. In advertisements inserted in trade journals early in 1904, Ford had implied that the car had been constructed in 1891. Actually, this first public test appears to have been conducted on June 4, 1896, and if Ford had anything four years earlier, it was only an experimental engine. Yet Ford was not the only one to advance the date of his contribution. Other automotive pioneers who testified in the Selden case also pre-dated their claims. Later, as the industry grew, many of the pioneers became embroiled in rivalry for the honor of having operated the first American-built gasoline automobile. It is a fair assumption that Ford deliberately advanced the date of his first car to indicate that his machine had performed successfully before Selden received the patent. The predating was ill-advised and unnecessary. It had no effect upon the outcome of the case, and it later created confusion in the recording of automotive history. When Parker moved on to Reading, Pennsylvania, to examine Charles E. Duryea, another defense witness, he obtained testimony demonstrating that a gasoline automobile using an Ottotype engine had been operated before the Selden patent was issued. Duryea, then vice-president and general manager of the Duryea Power Company, supported his recital by frequent reference to correspondence read into the record. After a halfcentury, his testimony stands as a vivid if partial account of the birth of the first gasoline automobile built and driven in the United States. Parker next took depositions in Boston, Providence and Pittsburgh, where many witnesses told of the plans and achievements of George B. Brayton. They gave full accounts of the application of Brayton petroleum motors to boats, horsecars and omnibuses from 1873 onward. Mrs. Rhoda B. Paulman, the widow of Brayton, 139

Monopoly on Wheels

related how the Sprague interests of Providence had financed the experimental use of a Bray ton engine in a tramcar. While no clear anticipation could be delineated, for the motorized horsecar was in no sense a light and free road vehicle, Parker hoped that a perceptive trial judge might assess this effort as a signpost directing subsequent inventors to a logical refinement of the concept. The importance which Parker attached to the experimental Brayton vehicles was reflected by his formal request for the body of suppressed exhibits in the Winton case, many of which involved the Brayton motor. His request was refused by the opposition lawyers. Lacking these exhibits, Parker was compelled to prolong the recital on this phase of the prior art. Two brothers, James F. and William J. Fawcett, described the use of a Brayton engine in a Pittsburgh omnibus built in 1878. The omnibus had a rearwheel drive, and the connection between the engine and the driving wheels had a countershaft, bevel gears, friction clutch, and chains. The vehicle, which was wholly experimental, was imperfectly operated for a very short time and was abandoned in the summer of 1879 after the Pittsburgh municipal authorities prohibited its use. Its main defect was the engine, which did not generate enough power for the heavy load of the cumbersome vehicle. In 1878 one of the Fawcett brothers had termed the omnibus "a total failure." From this testimony Parker could only establish the essential fact that while Brayton had made some progress in building a lighter motor for self-propelled vehicles, he had never incorporated one in a successful horseless carriage. In the record of the prior art, as it had unfolded thus far, there was nothing which answered to the structure described in the Selden patent. 5 The remainder of the important testimony for the defense was taken by Parker in Lansing, where Ransom E. Olds buttressed the argument that no one could legitimately claim the automobile as his exclusive invention, and in Ithaca and New York City, where Parker examined his two expert witnesses, Rolla C. Carpenter and Jesse M. Smith. Carpenter, a professor of experimental 140

vi A Mountain of Evidence

engineering at Cornell University, was especially effective. He offered an illuminating analysis of the prior art and showed that in some respects Selden had less to offer than his predecessors. Carpenter devoted much of his testimony to the basic differences between the Selden engine and the Otto-type motor of the Ford car. He presented a concise comparison indicating that in at least fifteen particulars the Otto-type engine bore no resemblance to the modified Brayton motor shown in the Selden patent. In contrast to the weak performance of Bentley, the testimony of Carpenter was closely reasoned and supported by an abundance of factual reference. To the opposition lawyers, it posed anew the necessity for a vigorous rebuttal. Parker terminated his primary case in July, 1905. At this point the Selden case record occupied only four volumes of testimony and exhibits. We have noted that the opening testimony of the complainants filled two compact volumes. The Ford record was more voluminous, and contained a larger number of exhibits. The bulk of the exhibits for the defense consisted of domestic and foreign patents on internal combustion engines and automotive constructions. The testimony in the Panhard cases added to the record. The exhibits, which included several engines and automobiles, taxed the space of a large room where they were held in the custody of the court. It was reported, with only mild exaggeration, that "the accumulated evidence and exhibits in the case would fill two standard freight-cars." 20 In rebuttal to Parker's opening case, Betts and Redding produced a set of witnesses in Rochester who depicted Selden's ambitions and experiments before 1879. The accounts given by some of them left no doubt as to the feeble performance of the Selden engine. The sum of this testimony presented Selden as a farseeing inventor who had grasped the basic principles of the horseless carriage but had failed to reduce them to practice. Other witnesses brought forward by the Selden lawyers as the case entered its third year in 1906 included officials of the Electric Vehicle Company and the A.L.A.M. Betts and Redding hoped to demonstrate that the policies and activities of the patent-holders and the licensed association were devoted to the welfare and stability of the automobile industry. To the officials who aired these views, Parker put blunt questions about the advantages of 141

Monopoly on Wheels

a promised monopoly that had led them to acknowledge the validity of the Selden patent. Some managed to evade these queries, but Parker scored in his examination of Milton J. Budlong, who had succeeded George H. Day as president of the Electric Vehicle Company and was a member of the A.L.A.M. executive committee. Budlong admitted that the licensed association had refused many applicants, but insisted that the objective of the A.L.A.M. was "to take in every legitimate manufacturer who is building a good automobile." "Did you have any standards or tests as to what would constitute solid or legitimate business?" asked Parker. "Or did you simply use your judgment when applications for licenses were made . . . ?" Budlong replied that the executive committee had merely used its "judgment, after a thorough and careful investigation." "Then the term 'solid and legitimate business' meant nothing definite but was very elastic, wasn't it?" retorted Parker. "Made to fit different cases?" To this Budlong could only reply with the stock argument that it was necessary to exclude fly-by-night firms from the industry.21 Parker took delight in taunting members of the A.L.A.M. for acquiescing in a patent which had no practical importance in automotive technology. In one of its propaganda broadsides the A.L.A.M. had boasted: "Selden in this early model embodied many of the salient features of the present-day vehicle. Among them he located his engine near the front of the vehicle." 22 This publicity release understandably omitted mentioning that Selden had placed his engine directly on the front axle, a feature which had not been adopted by any manufacturer of automobiles, licensed or unlicensed. Parker had in mind misrepresentations of this kind when he waved a copy of the Selden patent under the nose of Elmer Apperson, an erstwhile opponent of the Selden claims who had joined the A.L.A.M. He demanded: "Did you ever build a commercial automobile having an engine on a swiveling front axle?" "No, sir, we never did," was the meek reply. To Henry A. Lozier, Jr., maker of the Lozier car, Parker directed a query flavored with sarcasm: "I suppose . . . after you read the Selden patent, 142

vi A Mountain of Evidence

you found it was such a bright and shining light in the automobile industry and gave you so many new ideas that you immediately proceeded to plan to build automobiles on the line of that patent, is that true?" "No, sir," answered Lozier.23 To throw light on the motives and character of the A.L.A.M., Parker probed the circumstances of the Winton settlement. One witness among the A.L.A.M. members who spoke with authority was uncommonly candid. He was Thomas Henderson, vicepresident of the Winton firm. He cited the retainer which Kenyon & Kenyon had received from the Electric Vehicle Company after the case was settled and noted that the withdrawal of the testimony and exhibits from the court files, an act of suppression which had been one of the conditions for the closing of the Winton suit, had been arranged by Kenyon & Kenyon. Parker asked: "Was it with the understanding that by the suppression of such testimony and exhibits, that is, the placing of them in the hands of those interested in supporting the Selden patent, would make it more difficult and more expensive for any person sued for infringement of that patent to thereafter conduct the defense?" "That wasn't discussed," replied Henderson, "but undoubtedly that was the purpose." 2* The precise character of these records and their ultimate disposition are lost to history, but a clue to the strategic role these materials might have played in the defense against the Selden patent is found in the standard monograph on Siegfried Marcus, the automotive pioneer, written by Erich Kurzel-Runtscheiner. According to this expert account, Viktor Tischler, an Austrian attorney who handled patent matters for Marcus, sent a file of documents to the New York patent agency of Richards & Co. in 1900. These papers, which supported the Marcus claim to having developed an operable motor vehicle powered by a fourcycle engine some four years before Selden filed his application, apparently were intended for use in the Winton defense. They were probably included among the exhibits delivered by Kenyon & Kenyon to the attorneys for the Electric Vehicle Company. The documents were never returned to Tischler. It will be recalled that Betts and his associates refused to heed Parker's request to produce the Winton evidence. 143

Monopoly on Wheels

The Ford and Panhard lawyers recognized the value of the Marcus vehicles as a clear anticipation of the automobiles later produced by their clients. Proof of its operation would strengthen the defense case. The possible importance of the Marcus car had been recognized by Parker as early as November, 1903, and the following year found him engaged in a search for papers and publications dealing with it. Letters published in Horseless Age told the defense lawyers they might profit by turning up Marcus materials in the libraries of France and Germany.25 On January 20, 1906, John P. Murray of the Coudert law firm requested the permission of the court to take testimony abroad on the performance of the Marcus vehicle and named witnesses in Vienna he wished to examine. Murray furnished a detailed mechanical description of the car operated in 1875, noting that it was in the possession of the Automobile Club of Vienna. The Selden lawyers opposed the motion. On February 23, 1906, Judge Emile H. Lacombe denied the motion, but observed that the defendants were free to make another application to interrogate witnesses abroad.26 The defendants, however, never made further attempts to obtain testimony on this foreign contribution. Their failure to explore this achievement remains a puzzling aspect of the Selden case. They thereby lost a major opportunity to challenge Selden's claim that he alone had given the gasoline automobile to the xvorld.

144

VII

The Tournament of Motors

B

Y FAR the liveliest episode of the Selden patent case in the legal arena was the rivalry of museum-piece motor cars built by the two major contestants. The long-delayed appearance of the Selden horseless carriage, suddenly called into existence after a dormancy of twenty-five years, recalled the misty origins of the automobile age. But even as it sprang into life from yellowed drawings, the Selden car was challenged by the Ford Motor Company. Appealing to history in an effort to demonstrate that the gasoline automobile had been an operative actuality almost two decades before Selden filed his application, Ford produced a horseless carriage from plans dating from the i86o's. The result was the strangest tourney in motor car history. Up to this time, the public had taken only a mild and passing interest in the arguments of the lawyers and the recitals of witnesses. Now, as the antique automobiles turned over their motors and clattered out of the past into the new century, the American people sat up and watched in wonder. 1

This phase of the conflict was touched off in 1906, when the licensed interests produced their key expert witness, Dugald Clerk, who was called from Great Britain. Clerk is said to have received a retainer of $20,000 and a liberal allowance for expenses.1 At any price, Clerk's services would have been cheap for the A.L.A.M. The licensed association was in sore need of his widely respected knowledge and judgment to repair the gaps in the weak testimony of Bentley. Clerk earned his keep. He took two months to complete his deposition. i45

Monopoly on Wheels

Fifty-two years old in 1906, Clerk was a handsome and imperturbable Scotsman who had made numerous appearances as an expert in patent suits before the British courts. He was, as one of the Selden lawyers characterized him, "admittedly the greatest authority in the world on the subject of internal combustion engines." 2 For thirty years his name had been a hallmark in the study and development of gas engines. He had won an international reputation with his books, The Gas Engine (1886) and The Gas and Oil Engine (1896), whose successive editions had been adopted as standard texts in technical schools in Europe and the United States. He was the inventor of the Clerk two-cycle engine patented in 1881. Since 1895 he had been a close student of the art of the motor vehicle. Clerk held membership in the Institution of Civil Engineers and the Royal Institution and was a fellow of the Society of Chemical Industry and the Chartered Institute of Patent Agents. He was the recipient of many honors, among them the James Watt Medal. His word as an expert was seemingly beyond challenge in any court of law or equity. Before his arrival in New York, where he began his testimony in July, 1906, Clerk conducted a lengthy correspondence with William A. Redding and submitted a report on the Selden patent and the state of the prior art. Although he was aware that Selden, in order to satisfy the requirements of a combination patent, disclaimed "the invention of any special engine," Clerk pointed out that the specification clearly showed that the engine was of the Brayton type. This admission, which the A.L.A.M. lawyers later sought to minimize, must have irked Selden, for the Rochester lawyer, in his own testimony, denied that this improved engine corresponded to the operating principles of the Brayton motor. So eager was Selden to establish his position as a wholly original inventor that he went so far as to deny any knowledge of the Brayton engine before 1879. Clerk made his favorable estimate of the Selden patent, he told Redding, on the understanding that the patent was not restricted to the engine shown in the specification. But he did not take the extreme position adopted by Selden.3 Much of Clerk's testimony, a detailed and extensive recital that added about 300,000 words to the record, was devoted to a 146

viz

The Tournament of Motors

review of the antecedent art. He insisted that in view of the fact that all attempts to build and operate self-propelled road vehicles before 1879 had been failures, a broad patent of the kind granted to Selden was entirely legitimate. More than this, the Scottish expert placed the stamp of his authority upon a sweeping classification of all compression internal combustion engines under a single rubric. Selden, he said, had "appreciated the advantage of the compression cycle, adapted it to the purpose of a motor vehicle, showed one form of engine which was powerful in proportion to its weight, and thereby disclosed to the world for the first time an effective combination of a liquid hydrocarbon gas engine of the compression type with the other elements mentioned in his combination." * Clerk's argument rested on two major premises: (i) the Otto and Brayton engines were essentially alike, each being a "modification of the compression cycle," and (2) Selden had achieved a result so strikingly new in its entirety that his machine, as a vehicle capable of "greatly increased range," was a qualitative advance and opened a new chapter in the automotive art. It followed from Clerk's proposition that Selden's alleged success in 1879 had led directly to the motor car of 1906. As a graphic illustration of his point, he cited the wide gulf between the Selden structure and the steam traction engines of the prior art which had developed a maximum speed of about three and one-half miles an hour for an operating time of one and one-half hours.5 In some ways, Clerk's testimony was more deliberate, balanced, and precise than the A.L.A.M. counsel would have wished. Belts and Redding could take satisfaction from the support which their leading expert gave to their contention that Selden was first among the pioneers, and they appreciated the weight his opinion was likely to carry with the court. On some points, however, Clerk sensed a deeper obligation to his standing as an authority. He detected subtle shadings where Selden and the A.L.A.M. attorneys had insisted upon antipodal distinctions. Thus, with some reservations, Clerk agreed that if the Rosenwald patent of 1877 could be shown to have been practicable, any "subsequent patent would require narrow construction." 6 If it was true that a patent issued two years before Selden filed his application had represented the essential elements of the Selden i47

Monopoly on Wheels

structure, with the exception of an operable motor, did it not indicate that the stage of development attained by the art at that point required merely the substitution of one engine for another? So Parker had argued, and Clerk's admission seemingly weakened his own interpretation of the prior art. Clerk unwittingly set off a controversy when he repeatedly maintained that the French inventor, Lenoir, could not have constructed an operable automobile with the engine patented in 1860. Clerk held that the Lenoir power plant, as a non-compression liquid hydrocarbon motor, was too large and heavy for successful use in a road vehicle. The operation of an automobile with such an engine, he confidently declared, would be "an impossible thing" even if the engine was reduced in weight and equipped with the primitive Festugiere carburetor available in the art in 1865. Yet even as he rejected this hypothesis, Clerk qualified his opinion. He admitted that if it could be demonstrated that the Lenoir engine was capable of powering a light road vehicle, then it followed that the broad scope of the Selden patent might require reconsideration.7 As a direct result of this pronouncement, Parker later offered as an exhibit a car propelled by a Lenoir engine. Toward the close of his testimony, Clerk more than once expressed an unfamiliarity with the American patent law. He was concerned that he had made contradictory and untenable statements. "If Mr. Parker is right as to the American patent law," Clerk said after completing his deposition, "I fear I have broken down the case of my side." 8 Parker's cross-examination of Clerk had proceeded with dignity and decorum. Not the slightest trace of personal rancor could be detected. Parker had conducted his questioning with unruffled calm. 2

A different atmosphere prevailed when Parker took George B. Selden as his witness. As a patent attorney of long standing, Selden gratuitously displayed his knowledge of his branch of the law, interlarding his replies to Parker's queries with arch comments, and sometimes scarcely concealing his hostility. His self-confidence was formidable, even to the point of arrogance. 148

vii The Tournament of Motors

"I find that, as usual, my memory is not seriously at fault," he solemnly remarked during one exchange.9 When he came to New York City to begin his testimony on May 2, 1906, Selden was almost sixty. He was proud of his descent from Puritan forebears who had emigrated from Kent, England, in 1636 and helped Thomas Hooker found the Hartford colony. His recent elevation to fame had made him conscious of the Selden genealogy. In 1905 Selden made a motor trip to the Connecticut River valley, where he inspected the family graveyard at Hadlyme and was acclaimed as "the patron saint of the Association of Licensed Automobile Manufacturers." He immediately announced that he would "erect a suitable monument to his ancestors." 10 Selden was lean, spry, and of middle height. He had gray hair and a gray moustache. His thin lips, set in a hard line above a firm jaw always clenched in repose, underscored his cold and aloof manner. He was irritable and even defiant. One felt that he had not wholly stilled the bitter memory of long years of discouragement in Rochester, where the townspeople had jeered at his ideas. A reporter who interviewed him in 1906 caught the flash of Selden's "quick eyes that gleamed like steel points when he spoke of his ultimate triumphs." u He had the inflexible and granitic demeanor of a prophet who had patiently waited for the march of progress to come abreast of his dreams. It was not long before the Rochester newspapers proudly spoke of him as "the Father of the Automobile," and passersby on the streets of that city pointed to him, saying, "That's Selden." 12 As the emblem of this eclat, Selden wore in the broad knot of his cravat a stickpin fashioned in miniature after the road carriage described in his patent; its hub-caps and lamps were small diamonds, and the body was made of sapphires. The pin that Selden displayed so conspicuously would have been sheer pretense if the machine itself had not been built. It will be recalled that as late as 1903, when the suit was commenced, Selden had not yet constructed a horseless carriage based on his patent specification. In 1905, after a slumbering life on paper, the vehicle was finally summoned from the past and given material shape and form. Its belated appearance attested one of the longest parturitions in the history of patented mechanical invention. This vehicle, introduced by the complainants as Exhibit 89, 149

Monopoly on Wheels

was the so-called Rochester-Selden "1877 §as t>uSSY-" ^ was built in Rochester during a three-month period between October and December, 1905, the costs of construction being borne by the Electric Vehicle Company. The bold marking "1877" was painted on its body to convey the impression that the car had been built in the year when Selden began work on his engine. Parker and the other defense attorneys repeatedly condemned this deceptive attribution as a piece of arrant misrepresentation, but Selden smoothly denied any intent to mislead the public. Actually, Exhibit 89 was new in every respect with the exception of the cylinder casting and the crankshaft. After Selden stored his uncompleted engine following the last trial in 1878, the motor remained undisturbed at his Rochester home until the autumn of 1904, when it was used to operate a lathe. Not until December, 1905, after the two unfinished cylinders had been bored and fitted, and the engine adjusted to the vehicle, was the motor able to turn over under its own power. Exhibit 89 was built behind closed doors at the Rochester factory of the Gundlach-Manhattan Optical Company, which had an excellent machine shop. The vehicle was constructed under the direction of Selden's two sons, Henry R. and George B. Selden, Jr., who later drove it in demonstration runs. The body was made by a local firm, the Faber Sulky Company, which also supplied the rear axle, springs, and wheels. The swiveling front axle, steering mechanism, and remaining parts were made by the Gundlach concern, whose workmen completed the engine and assembled the vehicle. The car had a black body mounted on red running gear. The Selden " '77 gas buggy," as it was familiarly called, weighed 940 pounds. More than a third of the total weight was accounted for by the engine, which weighed 376 pounds. "It is an exact copy of the drawings of my patent and I defy any cross-examination to show any substantial variation," Selden announced. It had been built, he said, to demonstrate to the court that a self-propelled road carriage made "exactly in accordance" with his patent was "a practically operative and useful machine." But Parker, the defense experts, and even one of the witnesses for the complainants, pointed to material departures from the motor described in the patent. Between 1905 and 1907 750

vii The Tournament of Motors

it was equipped with parts and devices which were either not available or not practicable in 1879. These included a modern carburetor, new cylinder heads and inlet valves, and an oil pump of recent design. The most radical departure was the employment of timed electric ignition, a feature that was non-existent in 1879 and was far superior to the constant flame ignition indicated in the Selden patent. These modifications gave Exhibit 89 the benefit of advances in the art contributed by others during the two decades between 1885 and igo5.13 The Selden engine did not have a water-jacket, and its cooling apparatus was rudimentary. A supply of water in the enclosed crankcase splashed with the movement of the reciprocating parts. While this arrangement cooled the crankshaft to a limited extent, it failed to prevent the overheating of the pistons and cylinders. It was probably on this account that the Rochester tests of Exhibit 89 were conducted on the streets of that city in January and February, 1906, at the height of the winter season, when the cold weather partly offset the defects of the cooling apparatus. These initial tests, conducted under the supervision of George Raines, Selden's attorney, were riot performed under the authority of the court. Indeed, the defense attorneys and experts were not notified and were not present. Selden, his sons, and several residents of Rochester later asserted that these first tests had been successful. Henry R. Selden claimed the vehicle had covered a total distance of between twentyfive and thirty miles, attaining a speed of as much as four miles an hour. He also maintained that Exhibit 89 had without difficulty made a continuous trip of four miles, and that its engine had been in uninterrupted operation for as long as twenty-five minutes. George B. Selden gave a glowing appraisal of the initial tests of Exhibit 89. "We could have sold some of the machines if we had been in position to make them," he boasted.14 Later tests were to show that these claims were exaggerated. It was with good reason that the defendants were assiduously denied an opportunity to operate the vehicle. Dugald Clerk merely conducted brake tests and examined the engine after it had been dismantled from the buggy. He never tested or observed Exhibit 89 on the road. A second car introduced by the complainants was Exhibit 157, known as the Hartford-Selden vehicle. It was built in secret 151

Monopoly on Wheels

at the Hartford works of the Electric Vehicle Company under the supervision of one of their engineers, Henry Cave. Selden had no part in the development of this vehicle. Its design and construction commenced in 1902, when Cave undertook the project at the behest of George H. Day. Cave devoted about five years to the effort. As Hiram P. Maxim recalls, Day had foreseen that it would be necessary to prove that a car built in accordance with the Selden patent was operable. But the engine described in the patent drawings, notes Maxim, "was a fearful and terrible affair." He credited the development of a successful vehicle to Henry Cave. "Had he not been the essence of patience, tenacity, and resourcefulness he certainly would have failed and brought himself to the madhouse." Untold thousands of dollars were spent on the development of the car.15 Exhibit 157, which resembled a truck, diverged in important particulars from the patent specifications. While Selden insisted that this vehicle represented the ideas embodied in his patent application, he admitted that Exhibit 89 followed his drawings more closely. Like the Rochester-Selden buggy, Exhibit 157 enjoyed the advantage of improvements made in the automotive art after 1879. Samuel R. Betts later conceded that the HartfordSelden vehicle incorporated several modifications "not definitely shown in the Selden patent. . . ." Its engine was equipped with a water-jacket, and the vehicle was fitted out with change speed gears, pneumatic tires and other elements which Selden had not indicated in his application.16 Consequently, the Hartford-Selden vehicle developed about fifteen horsepower as compared with the estimated two horsepower of the Rochester-Selden buggy. Frederic R. Coudert's quip about the Hartford-Selden car—"Much Hartford and little Selden"—was apt and precise. Selden could hardly maintain that both exhibits were "Chinese copies" of the road carriage he had projected in 1879. It was clear that the complainants hoped to benefit from the wide range of mechanical equivalents customarily extended by the courts to patents of a pioneer character. All of the salient issues in the case revolved about the nature of the relationship between the Selden claims and the prior art. If the complainants could succeed in convincing the trial judge I$2

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The Tournament of Motors

that Selden alone had lighted the path to success, their case was won. Exhibit 89 was brought to New York City and offered in evidence on May 16, 1906, about two weeks after Parker began his cross-examination of Selden. Parker protested against the introduction of testimony concerning the Rochester tests, contending that it was inadmissible in view of the exclusion of defense counsel and technical experts from the demonstrations. "Personally I don't believe that Exhibit 89 ... ever ran 10 rods in Rochester," he later said.17 Parker requested a court order allowing the defendants to demand tests in the presence of their experts. The order, granted on March 30, 1907, also permitted the defendants to take surrebuttal testimony, a move which virtually assured the expansion of the Selden case record to massive proportions. One of the A.L.A.M. attorneys later conceded that the failure of the complainants to give notice of the Rochester tests succeeded in protracting the case by at least two years.18 Additional delays resulted from the fact that the control and operation of Exhibits 89 and 157 were left to the complainants, who frequently refused to comply with Parker's requests. Meanwhile, on May 19, 1906, Parker and his technical experts, Professor Rolla C. Carpenter and Jesse M. Smith, were permitted to observe a test of Exhibit 89. It was held by arrangement with the A.L.A.M. lawyers in the basement of the garage of the Decauville Automobile Company at Broadway and Fifty-Sixth Street in New York City. Henry R. Selden operated the automobile in the presence of a battery of newspapermen who apparently had been invited by the A.L.A.M. lawyers in violation of their pledge to Parker that the demonstration would be conducted in private. "We were greatly interfered with by such a crowd of reporters," said Parker with asperity, "and I cannot imagine how they found out that we were going to examine the car. I surely did not send them word, and if the licensed association people did so without saying anything about it to me, I regard it as a personal affront. Our proceedings were so greatly embarrassed that we shall have to get at it another time." 19 The tests which Parker demanded were not held until the following year, after the Selden attorneys complied with the 153

Monopoly on Wheels

court order. For the present, Parker was content to note that the Selden engine did not "develop over an effective halfhorsepower on driving the car at ten miles per hour," and pointed out that the vehicle included features which had not been specified in the patent. 20 He now returned to his cross-examination of George B. Selden. 3

From the first, it was apparent that Selden clung to a profound and immovable conviction that he was truly the "father of the automobile." He spoke of the motor car as "my invention" and referred to modern gasoline automobiles as "exemplifications" of his patent. He narrated in rich detail his early trials and disappointments as an inventor, telling how he had tried to enlist financial support for his experiments. Buttressing his recital by frequent reference to his correspondence, notebooks, memoranda, and other documents, he unfolded a tale of a lonely fight for a master idea pursued in the face of great odds. His story had its winning aspects, and invested his patent with the aura of heroic effort. Parker, unimpressed, laid down a barrage of objections, but his protests that Selden's replies went beyond the proper bounds of rebuttal testimony were to no avail. Under the existing rules of equity no limits were placed on such recitations. Selden was an adroit witness. He evaded many of Parker's pointed inquiries and confined most of his answers to generalities. When Parker asked him to describe the specific improvements of his own devising in the modified Brayton engine which Selden claimed was "a substantially new creation," the Rochester lawyer wandered far afield into a lengthy disquisition on the difficulties ivhich had confronted him before 1879. Parker cut him short after Selden persisted in his evasion of the direct question. "Answer objected to as not responsive," said Parker in exasperation. "Mr. Selden, I will cross-examine you all summer if you don't answer that question. That is as sure as you are sitting in that chair." 21 The unconcealed enmity between Selden and Parker punctuated the cross-examination. In preliminary response to Parker's I

54

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The Tournament o/ Motors

inquiry concerning the private agreement with George H. Day, which stipulated a division of Selden's share of the royalties, Selden said: "There has never been any particular secret or effort to conceal this matter." But he hastily reconsidered, and, after consultation with his attorneys, declined to divulge the terms of the contract. "Did you intend to tell the truth?" Parker asked at length. "Your question is an insult, sir," shot back Selden, "and I refuse to answer it." Parker frequently charged Selden with taking refuge in specious reasoning and wily maneuvering; in turn, Selden accused Parker of asking unnecessary questions and protracting the suit so that the Ford Motor Company and other independents might continue to market automobiles and enjoy large profits. On many occasions Parker requested Selden to "answer yes or no," to which Selden would stiffly reply: "You have tried several times to dictate my answer to me, and so far as I know, you have not yet succeeded, and I really doubt whether you will. . . ." When Parker pressed him to describe some of the circumstances attending the changes made in the engine of Exhibit 89, Selden exclaimed: "That is another of your gross misrepresentations.'' Parker bristled with anger when Selden asserted that the Detroit attorney had been "choked off from prolonging the examination of Mr. Bentley by an order of the Court." "Who told you that I was choked off from examining Bentley by an order of the Court?" asked Parker. "I cannot say now who it was," countered Selden, "possibly some one then connected with the Association, or possibly some of my counsel." "Whoever originated that statement is a liar," said Parker.22 Parker brought up Selden sharply when the testimony centered on the actual achievement and technical knowledge of the professed "father of the automobile." He laid bare the scanty and inconclusive practical development of Selden's ideas up to 1879. He repeatedly demanded meaningful details. For example, Parker asked Selden to elaborate and clarify the ratio between the crankshaft and the driving axle of the vehicle. The patent was silent on this point; it merely stated that the crankshaft was to run faster than the propelling wheels. Selden admitted that his patent could not constitute invention or discovery unless i55

Monopoly on Wheels

the variation in speed between these two components produced a novel and useful result. But precisely what ratio was required? Selden was ready with a vague generality: "This ratio feature is but one of the elements covered by my claims." Parker suggested several ratios, asking whether a variation of 3 to i or 101 to 100 would satisfy the conditions for an operative vehicle. Selden answered that he had made no practical tests. Parker objected to the indefinite answer. "Have you given the public any information whatever in your patent as to what ratio of speed of the crankshaft relative to that of the propelling wheels they must have, in order to secure the new and useful results which you have specified . . . ?" But Selden insisted that under the terms of his patent there was no restriction on this feature. "As my invention is the pioneer in the art," he said, "my understanding is that my patent on it under existing decisions is to be liberally construed." 23 This reply, with its felt assurance that the trial judge would read the patent in the light of a broad interpretation, was typical of much of Selden's testimony. He artfully refused to be ensnared by Parker's demands for details, and frequently rambled on at excessive length into a maze of irrelevancies. Selden was acutely aware of the hazards of being drawn into a concrete explanation of his patent description and drawings. As a result, his testimony, as well as the depositions of other important witnesses for the complainants, was discursive and equivocal at many points. Sometimes the tactics of evasion were carried to unreasonable and ludicrous extremes. Hugo C. Gibson, a British mechanical engineer who was retained by the A.L.A.M. to attend to their mechanical exhibits, was questioned by Parker concerning the use of flame ignition in the Selden motor. Gibson had also been produced as an expert on gas engines. Fencing with Parker, Gibson cagily offered two distinct and separate aspects of his being. On one hand, said Gibson, he was an "ordinary human being"; on the other, he was an expert. Having gratuitously split his personality as a witness, he found it expedient to assume the role of an "ordinary human being" when Parker demanded direct and specific replies. Gibson's preposterous divagations culminated in the following squabble: I56

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The Tournament of Motors

A. I have no knowledge in my present capacity of pure flarnc ignition. . . . Q. What do you mean by "in my present capacity"? A. I mean that as an ordinary individual without special knowledge I have no knowledge of pure flame ignition. Q. Have you any knowledge of "purely [sic] flame ignition" as used in this case as an expert? A. I cannot say what I know as an expert. Q. As a fact, do you know what flame ignition is as applied to that engine? A. As an ordinary individual I do not, nor could I possibly. Q. Do you know as an expert? A. I cannot tell what I know as an expert. Q. You mean you can't or you won't? A. I mean I can't, just as I say. Q. Why can't you? A. I don't know.24

Parker brought Gibson's evasiveness and absurd rejoinders to the attention of the court, requesting a ruling to compel responsive answers. Judge Emile H. Lacombe ordered Gibson "to answer all questions of fact." Even so, Gibson tried to squirm out of his clear obligation. "Do you know what a fact question is?" Gibson was asked. "No, I do not know," replied the British mechanical expert.25 4

In the late spring of 1907 the complainants, at the repeated urging of Parker, finally cut short their delays and produced Exhibits 89 and 157 for tests in New York City. At the eleventh hour, the A.L.A.M. lawyers implausibly maintained that the city traffic regulations forbade such demonstrations. The two vehicles were then removed to a race track near Guttenberg, New Jersey, where a smooth and level surface offered optimum conditions for testing. More important, the trials would not come under the observation of city crowds. Beginning on Friday, June 14, 1907, Exhibits 89 and 157 were operated in the presence of Parker and his two experts, Professor Carpenter and Charles E. Duryea. The two vehicles were stored in a shed with a graded approach which gave them the advantage i57

Monopoly on Wheels

of momentum as they left the building. The Hartford-Selden vehicle, the more powerful of the two, was the first to be tested, and three attempts were made to run it that day. Special measures were taken to start the engine. A truck drawn by two horses and bearing a three-cylinder air compressor with tank drew up beside the shed. A hose was connected from the truck compressor to the engine of Exhibit 157, and air was pumped into its reservoir to raise the starting pressure. The engine came to life. Hugo Gibson climbed into the driver's seat and guided the vehicle down the sloping platform. As Duryea later testified: "The engine stopped, however, before more than six or eight feet had been passed over, but the vehicle coasted till a total distance of about 15 feet from its original position had been passed. Here it stopped with the front wheels outside and the rear wheels just inside the threshold." The vehicle rolled forward another fifteen feet and stalled. The truck compressor drew up and resuscitated the engine. After a third attempt, during which four men pushed Exhibit 157 a short distance, Gibson called off the tests for that day. A drizzling rain and a wet surface seem to have impeded the operations.26 Professor Carpenter kept a log of the performance of Exhibit 157 on the afternoon of June 14: 2:42. 2:43.

Electric igniting device was tested by Gibson. Car started from its position in shed. Ignition stops, but car coasts about ten feet outside shed door and stops at foot of slight grade. 2:45. I noted that air pressure on compressor was 120 Ibs. I was informed by Mr. Henry Selden that a pressure of 150 Ibs. was ordinarily used. 2:46. The fuel [gasoline] tank charged. . . . 2:48. Engine started with air pressure supplied by external compressor. 2:48.5. Clutch applied; one wheel turned a few times without moving car. 2:50.5. Old sacks applied to ground under wheel evidently to prevent slipping. 2:51. Engine stopped, Mr. Parker suggested that chains be applied to driving wheel. 2:55. Engine started, clutch applied and with help of four strong men pushing the car ascended the slight grade in front of the shed. The engine stopped at a distance of about 100 feet from the point of starting with the car at the top of the slight grade; it could not be started without moving up the external air compressor by horses and did not reach the race track. z58

vii The Tournament of Motors

Following this disappointing performance, Exhibit 89 was trundled to the summit of the approach to the shed. Three men were required to start the engine. Professor Carpenter's log noted the brief account of its attempted operation: 3:07. 3:10. 3:16.

Machine cranked, several explosions, but the engine did not run tor any appreciable time. Gibson and Bentley retired for a conference. Mr. Betts gave formal notice of postponement of tests until a P.M. Saturday, because of unfavorable weather conditions; to this Mr. Parker protested.

3:18.

Left in Ford car for New York.27

On the next day, June 15, Exhibit 157 gave a better performance. Again started up with the aid of the truck compressor, it emerged from the shed on freshly laid planks and was driven to the Guttenberg race track. It went around the track twice in about twenty minutes, making numerous halts caused by mishaps to the engine, and then returned to the shed under its own power. In two days, and with many mechanical breakdowns, this advanced version of the Selden vehicle succeeded in covering a distance of two and one-quarter miles. The second test of the Rochester-Selden buggy, also conducted on June 15, was marked by frequent halts, changing of the spark plugs, and labored cranking of the engine between brief journeys. The oil in the crankcase boiled "furiously," according to Professor Carpenter, and at one point the engine became so overheated that operations had to be discontinued. The car was not run on flame ignition. Exhibit 89 traveled a total distance of 1,309 feet at an average speed of 4.94 miles an hour.28 Parker was dissatisfied with the conduct of the tests. His experts had not been permitted to drive the machines; and while Duryea had been allowed to occupy the passenger's seat during the run of Exhibit 157, Professor Carpenter had been excluded from this observation post. Parker was angered by the material changes and adjustments made in the engines of Exhibits 89 and 157.20 Demanding that the tests of the vehicles by the complainants should comply with the general conditions set forth in the court order, he dispatched a stream of written requests to the A.L.A.M. i59

Monopoly on Wheels

lawyers during the demonstrations at the Guttenberg track. Parker called for the operation of Exhibit 89 on flame ignition, in accordance with the claim Selden had made for the tests in Rochester. In another note Parker specified a set of conditions for the operation of Exhibit 157: June 15, 1907. Samuel R. Belts, Esq., William A. Redding, Esq. Dear Sirs.—I request you ist. To start the Hartford-Selden vehicle without the aid of the air compressor on the truck which is drawn by two horses. and. To back it out of the shed where it now is (3:05 p.m.) grd. To run it up a grade of five per cent, for, say, 200 feet. 4th. To run on high speed. 5th. To change speeds without stopping. 6th. To run 200 feet and stop two minutes. yth. To run one-eighth of a mile and stop two minutes. 8th. To run balance of mile, making at least four additional stops. All starting to be without aid of air compressor. gth. To back 200 feet and stop, then backing again and stop, and then go ahead. All stops to be stops of engine as well as of vehicle. Prof. Carpenter to be allowed to ride with operator. At the commencement of above I desire starting to be made by one man without any assistance. (Sgd.) R. A. Parker

Betts and Redding declined to fulfill these requirements, contending that they were "unreasonable and . . . not required by the terms of the order under which these tests are being made." "Will you comply with any of the requests?" asked Parker. He met with adamant and repeated refusals. Betts indignantly replied that he and Redding were not "under cross-examination." 30 A short time later, in a published statement, Parker declared: "I never contended that a car made in accordance with the Selden patent would not operate mechanically. I contended, and I contend still, and shall prove that they are not practical road carriages." 31 Two weeks after the Guttenberg tests, Exhibit 89 was returned to New York City, where it was tested on flame ignition in a garage at Broadway and West Forty-Ninth Street. During this demonstration the vehicle itself was not in motion. The results were so feeble that the A.L.A.M. declined to issue a statement 160

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on the ground that "it in no way concerned the litigation in question." Motor World:, the pro-A.L.A.M. organ, was compelled to admit that the engine could not operate successfully according to the terms of the patent, even with the initial aid of electric ignition. It was a fearful performance. The engine belched flame and thick clouds of smoke, and the exhaust pipe turned red hot.32 In September, 1907, after the A.L.A.M. attorneys overcame their reluctance to operate the Selden buggy on the streets of New York, the vehicle underwent its final tests. Despite added improvements, the car again gave a weak demonstration as it groaned, missed, choked, overheated, and stalled during its halting progress along West Forty-Ninth Street between Sixth and Ninth Avenues. It was driven by Hugo Gibson, who was assisted by a mechanic known as "Cranky Louis." This sobriquet, explained Horseless Age, he owed "to his frequent performances in that line." At one point Louis cranked continuously for twelve minutes as Gibson strove to start up the engine. The motor smoked, despite quantities of oil poured into the crankcase, which emitted clouds of steam and jets of boiling water that spouted to a distance of almost nine feet. Gibson was "liberally sprinkled with the escaping mixture of oil and water." The straining engine did not develop enough power to propel the Rochester-Selden vehicle up a slight grade of one-half of one per cent, and the car had to be pushed. Finally, the Selden buggy was towed to the garage. During these tests it was equipped with electric ignition. The car did not attain a speed of more than nine miles an hour. Its average speed was about seven miles an hour.33 The longest run of Exhibit 89 was made on September 18, when in a single trip broken by two stops the car traveled a distance of 3,450 feet. During the tests made in June and September, it had been in actual operation as a moving vehicle under its own power for only fifty minutes out of eleven and one-half hours on the road. In all, it had covered a distance of about three and one-half miles.84 On any showing, the tests spoke poorly for Selden's claim that a car which was supposedly a "Chinese copy" of his patent was a practical horseless carriage. The A.L.A.M. lawyers, however, were content to announce that Exhibits 89 and 157 had met the re161

Monopoly on Wheels

quirements of operability. That both cars had traversed several miles, despite a host of mechanical difficulties, could be interpreted in Selden's favor if one granted that with additional experimentation and sufficient resources he might have built a less defective vehicle in 1879. It has been noted that the Rochester-Selden buggy, although not a precise exemplification of the Selden patent, was constructed in accordance with its basic specifications. But the tests proved that in its pristine state the Selden patent could not serve as a model for the modern gasoline automobile. If further proof were needed, the practice and progress of the industry attested as much. 5

During the late summer of 1907, as the Rochester-Selden buggy excited wondering stares among reporters, photographers and passersby who saw it tested on a New York side street, this museum-piece of automotive history was joined by a car introduced by the defendants. More modern in appearance, this vehicle had been constructed by the Ford Motor Company and offered as an exhibit. Known as the Ford-Lenoir car, it used for its power plant an engine built substantially in accordance with the patent granted to Lenoir in 1860. Thus its type of engine antedated the one used in Exhibit 89. The Ford-Lenoir vehicle was intended to disprove Clerk's flat assertion, which had been supported by Selden and Bentley, that the propulsion of a workable light road vehicle by a non-compression liquid hydrocarbon engine was an "impossible thing." Clerk, it will be remembered, had gone so far as to admit that the broad scope of the Selden patent might require re-examination if it could be demonstrated that the Lenoir engine was a suitable power plant for an operable road carriage. The defendants were enabled to challenge Clerk's view when the court granted them permission to take surrebuttal testimony. Even before this court order was issued on March 30, 1907, the construction of such an automobile was undertaken at the Piquette plant of the Ford Motor Company in Detroit. The design of the engine was based on diagrams extracted by Parker from a French technical journal, and its construction was ac162

vii The Tournament of Motors

corded priority at the direct order of Henry Ford. The motor was built under the direction of Fred Allison, the company's electrical expert, who was assisted by two Ford mechanics, August Degener and C. J. Smith. Professor Carpenter contributed his expert advice and was present during the first public tests of the Ford-Lenoir car on May 18 and 19, 1907, when the vehicle, with Allison at the controls, cruised along Grand Boulevard in Detroit at a speed of about twelve miles an hour.35 With the exception of the engine and an external carburetor, the Ford-Lenoir car was of modern design. "I understand that in the construction of this exhibit," Professor Carpenter testified, "the builders used so far as possible such material, patterns and shapes that they happened to have on hand. As a result the appearance in a general way and so far as the body is concerned is not essentially different from the single seated motor car in extensive use three or four years ago." 3e The motor was mounted on a 1903 Ford runabout chassis of the Model A series. The car, which weighed 1,190 pounds, Avas fitted with a modern clutch mechanism, planetary transmission, reverse gears, and other components, all of which were arranged in virtually the same manner as in the Ford passenger automobile. The object of the defense, as Professor Carpenter pointed out, was to prove that a noncompression engine could be effectively adapted for driving an operative and practical motor car. The transmission and other functioning parts, in construction and adjustment, had the benefit of later improvements in the art. It is clear that a car identical to the Ford-Lenoir automobile could not have been constructed a half-century earlier. The significant feature of the car was the engine, and the defendants centered their argument on it, holding that the effective adaptation of the motor undermined Clerk's assertion. The engine resembled that described in the British patent issued to the French engineer, Alexander H. Brandon, in 1869. It was a horizontal opposed double-cylinder motor with a bore of 6% inches and a stroke of from 7 to 7^2 inches. These engine dimensions were larger than those found in the automobiles of 1907. In most of its essential parts, the power plant followed the specifications of the Lenoir motor, except that its pistons were single-acting instead of double-acting. Its spark ignition followed 163

Monopoly on Wheels

the system described by Lenoir in his American patent of 1861. The cylinders were water-jacketed, as in the Lenoir motor, and the cooling system, similar to the one used in the Ford car, resembled in principle but not in construction the apparatus described in the Savalle patent of 1867. The engine weighed 340 pounds, as compared to the 376-pound engine of the RochesterSelden buggy. It developed about three horsepower. A Festugiere carburetor, whose details were supplied by a tracing made by Professor Carpenter from the French patent issued to Noel Festugiere in 1865, was mounted externally on the left side of the car. This carburetor, whose inventor had specified it for use in conjunction with the Lenoir engine, was a vertical brass cylinder eight inches in diameter and twenty-four inches long. This motor exemplified the art of the gasoline engine as it existed not later than 1867, twelve years before Selden applied for his patent. The Ford-Lenoir car received its first test in New York City on July 27, 1907, when Fred Allison drove it at controlled and varying speeds on a tour of the locality between West Fifty-Fourth Street and lower Central Park. It operated with ease and efficiency. Charles E. Duryea, who was a passenger, described the journey made by the car after it left the garage of the Ford branch house at Broadway and West Fifty-Fourth Street: When I first saw it it was on the second floor at the Ford garage, and the operator very kindly started it for me by giving the starting crank about one turn, much as a modern auto would be started. He then stopped it by shutting off the spark, and soon after by connecting the electric current started it by the use of the spark and not using the crank, as modern four cylinder four-cycle autos frequently are started. I have seen it started on the spark quite a number of times since. The operator drove the vehicle on to the elevator and it was lowered to the first floor, where it was backed out on the street, being handled by its own power, and then we drove up Broadway, into the Park, around a number of the curves and up and down some of the grades at a speed that I should think fully averaged ten miles per hour, sometimes going faster, sometimes, of course, slower. Coming back, at the Circle [Columbus Circle], at Broadway and 5gth Street we were halted by a policeman and turned to the right around the Circle, on the west side of which we were held up by a jam of other vehicles and street cars, the engine running, but the vehicle standing still with clutch disconnected. In attempting to get out of this jam, as soon as the way opened, the operator set the clutch too quickly and choked the engine, as operators of modern vehicles sometimes do, but it was only the work of a couple of 164

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The Tournament of Motors

seconds to jump out, apply the starting crank and give it a half turn to start the engine again, after which we started up nicely. We then returned to the garage, almost stopping at the gutter, then driving up onto the sidewalk and entrance, after which it was manipulated further for the benefit of others wishing to see it.

"To sum up," concluded Duryea, "the vehicle started with certainty when wanted, ran when wanted to the limit of its ability, which I should say was as high as 12 miles an hour on some occasions where the streets were good, stopped, started, slowed up, accelerated, reversed and otherwise handled in a satisfactory and practical manner and without undue exertion on the part of the operator, also without apparent worry or reason to believe that it would not get about the streets of New York and the roads in the Park in a safe and comfortable manner." 3T Impartial observers of this demonstration gave equally laudatory accounts of the car's operating capacities. A reporter said that it "could perform all the regulation stunts that any well-bred automobile could be expected to do. Its ability to run throttled down would easily gain it a record, as it would run so slowly with the throttle closed that a stop seemed imminent between explosions, despite which it could be speeded up and the car made to travel at a rate that would easily break more than one speed law." Even Motor World conceded that "the showing was a complete success," but it pointed out that the creditable operation of the Ford-Lenoir car did not affect the main issue. It echoed the argument of the Selden interests that the Lenoir engine was a non-compression type, while the Selden patent laid claim to covering gasoline automobiles using compression engines.38 Although clouded by incessant controversy and pettifogging distinctions, the issue was clear enough. Was Selden entitled to a broad interpretation of his patent if it could be shown that an engine in the antecedent art was a practical motor for an automobile? Few but the complainants and their attorneys, who had ignored an invitation to attend the tests, doubted that the FordLenoir vehicle was a success within the limits set for it. The Ford interests claimed it "was a case of 1865 beating 1877 without the slightest trouble." 39 The Ford-Lenoir car was able to run continuously for an hour, said Carpenter. It carried a supply of fuel adequate for a journey 165

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lasting an hour and a quarter, he added, but could not attain maximum range because the water for cooling was sufficient for only an hour's run. During a test held on September 24 it made an uninterrupted journey of 8%o miles at a speed of about 11.3 miles an hour.40 The A.L.A.M. attorneys subsequently denied that the Ford-Lenoir car developed three horsepower. They rated it at 1.3 horsepower and derisively rejoinderecl that it had "little or no relevancy except to show the advantage of compression over non-compression." 41 In face of the argument that the operability of the Ford-Lenoir car raised a presumption that the Selden patent did not possess a pioneer character, the complainants had already prepared a strongly entrenched position. In the fruitless motion which the defendants had made to take testimony abroad on the Marcus car, John P. Murray had also requested permission to question foreign witnesses concerning the Lenoir vehicle built between 1860 and 1862. In opposing the motion, the complainants declared that they had never challenged the capability of the Lenoir non-compression engine to propel a vehicle. Later, howrever, the A.L.A.M. lawyers contended that the application of a Lenoir engine to a road vehicle was an "impossibility." 42 The Selden and the Ford-Lenoir vehicles served a purpose beyond their explicit roles as exhibits. The public tests of the cars familiarized newspaper and magazine readers with some of the issues in the case. To the motoring public, then a small minority, and to many other Americans who watched the sudden dawning of the automobile age, these machines symbolized the sharp engagements that were being fought around a landmark in the developing technology of the twentieth century. 6

As the Selden patent case wore on, Parker kept Henry Ford informed of its progress. He sketched out strategy, zestfully described his cross-examination of witnesses, and reported on schisms in the enemy camp. His infectious enthusiasm must have buoyed up Ford's confidence. In January, 1906, he counseled Ford not to publicize the arguments against the Selden patent, pointing out that they "would prepare the opposition to meet 166

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them." In describing his cross-examination of Hiram Percy Maxim, who was a reluctant witness, Parker related how the noted automobile engineer, a member of the staff of the Electric Vehicle Company, had ignored Selden when pressed for an appraisal of "the factors of success" in the evolution of the motor car. "If he had said one of them was the Selden P.," wrote Parker, "I would have made him say what feature and then made him admit that not a distinctive feature was actually used." By the end of February, 1906, Parker envisioned two main thrusts against his adversaries: "i. To show that the art developed absolutely without regard to Selden. 2. To show that the Licensed Assn is a trust based on other considerations than that Patent." Soon afterward he confided to Ford that the A.L.A.M. was being weakened by internal disagreements. Its officials, he said, were discouraged by the large fees paid out to lawyers and the seemingly endless prolongation of the case. On Redding's word, Parker reported, Selden "was quarreling and taking things into his own hands without authority." Betts and Redding had also clashed. "The upshot of all this is that there is the great possibility of a row and kick in the Assn when April pay day comes around." He believed that the members of the licensed association "are about ready to throw it all up." On May 22, 1906, he enclosed a pin from Selden which the Rochester lawyer sent "with his compliments." This may have been a less expensive copy of the jeweled " '77 buggy" stickpin that flashed brilliantly from Selden's tie. Parker thought that Selden's testimony would redound to the benefit of the defendants. "I assure you," declared Parker, "that his evidence is emphatically in your favor." He believed that he was gradually forcing Selden to admit that "his patent was a special one" which could not "be read to cover your machine." The stream of reports to Ford continued throughout 1907. In moments of exultation Parker would dash off to the telegraph office to send a few lines on events he thought boded ill for the complainants.43 In the mid-summer of 1908, when Parker returned to his crossexamination of Selden, he was certain that Selden would concede the restricted scope of his patent. "The last two or three days I have driven him into the hole of admitting positively that his claim is limited to the structure practically set forth in his patent," 167

Monopoly on Wheels

said Parker. "He had to do this in order to avoid the charge that all he had done was merely the substitution of the Brayton engine of the '74 patent for an Otto-Langen engine of the Rosenwald French patent of 1877." He pointedly noted: "Such an admission would have been fatal to the claims. . . ." 44 By this time, the swollen river of testimony was beginning to ebb, and less than a year remained before the Selden case would come to trial. During the five years of litigation, the controversy had spread along a wider front and had reached into the fundamental character and development of the automobile industry.

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T

HE INDUSTRY-WIDE battle outside the courts began with the organization of separate trade associations and 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

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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.M.A. were established at Chicago. Couzens was elected chairman of the committee of management, and Job E. Hedges of New York was appointed general counsel.2 The A.M.C.M.A. began its life with a charter membership of twenty firms, among them Ford, the Maxwell-Briscoe Company, the Duryea Power Company, the Mitchell Motor Car Company, the Nordyke & Marmon Company, and the Dayton, Premier, National, Moline, and Jackson companies. The association disclaimed any intention to take part in the legal contest against the Selden patent-holders, and its members announced they would defend individually any patent suits lodged by the A.L.A.M. "The Ford Motor Company itself will attend to the Selden suit," declared Hedges, "and neither asks nor desires any assistance from any source." But the fiery Couzens told the organized independents: "We are in this fight for blood and we mean to draw it. This Electric Vehicle Company can't force us to pay royalties. . . . We manufacturers on an independent basis have simply decided to take the bull by the horns and co-operate for mutual benefit." 3 In May, 1905, the A.M.C.M.A. leased the 6gth Regiment Armory, then under construction at Lexington Avenue and TwentyFifth Street. Here, within the shadow of the A.L.A.M. stronghold in Madison Square Garden, the first independent show opened its doors on January 13, 1906, boasting twice as many exhibitors as the licensed exhibition. Beginning in 1907, the independent show was held at the Grand Central Palace in New York. The A.M.C.M.A. grew and prospered. By January, 1908, when it had fifty member firms, the organization could justly claim that it was the largest automotive trade association in the world. Among the companies that swelled its rolls were Reo, Dragon, Aerocar, Wayne, De Luxe, Moon, Crawford, Mack Brothers, Welch, Frontenac, Marion, Regal, Dorris, Reliance, Simplex, and American Mors.4 The only prominent unlicensed maker who did not join the A.M.C.M.A. was Thomas Jeffery, who refused to depart from his decision to remain free of all such affiliations. 171

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Alfred Reeves, a former journalist who had been secretary of the New York Automobile Trade Association, became general manager of the A.M.C.M.A. in 1906, and with his appointment the headquarters of the organization were transferred from Chicago to New York. It was noteworthy that in an industry of such recent origin, companies had united for promoting their common aims and had developed a sense of community of interest. As a trade association, the A.M.C.M.A. had several major objectives. It stimulated public interest in the use of motor cars; disseminated trade information and statistics; supported the good roads movement and fought discriminatory legislation against motorists; facilitated the exchange of technical information; and attempted to encourage the technical standardization movement in the industry. The independent association had committees on advertising and publicity, freight and transportation, and foreign trade. It issued handbooks and advertising posters, distributed lists of agents and dealers. It made surveys of the foreign market and explored overseas trade possibilities. In 1907 the independent assocation announced plans to establish an automotive testing and standards laboratory, but none was ever organized under its auspices. In 1909 Henry Ford was named a member of the standardization and technical committee. In this field, however, the A.M.C.M.A. produced nothing comparable to the achievement of the A.L.A.M., whose technological legacy is an inseparable part of the industry to this day. o

As a combination of producers, the A.L.A.M. pooled the experience of its members to formulate more effective methods of conducting business. It maintained committees on patents, tariffs, advertising and publicity, automobile shows, technical standardization, and good roads. Beginning in 1904, the A.L.A.M. issued annually the Handbook of Gasoline Automobiles, a catalog for general distribution which listed the specifications of licensed makes. It agitated for an increase in the tariff on motor cars and in 1909 cooperated with the A.M.C.M.A. in filing a joint brief in favor of a protective duty. The A.L.A.M. traffic 172

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Trade War

department induced the railroads to build more than 5,000 special freight cars and secured favorable rate classifications for motor vehicle shipments. On vital matters of pricing and production, the A.L.A.M. prefigured the policies of the trade associations that sprang up after the First World War. It compiled quarterly reports of automotive production and other trade information of a confidential character. A.L.A.M. members frequently gathered to discuss trade conditions and exchanged estimates of projected output in order to avoid overproduction. Informal agreements governed the increase or curtailment of output in relation to market trends, but these agreements did not arbitrarily restrict the manufacturing schedules of member firms. This practice was not confined to the licensed association. Members of the A.M.C.M.A. also compared estimates as a safeguard against surplus production.5 Both automotive trade associations were early exemplars of the "cooperative competition" which later emerged in the "open price" associations. They served as central clearing agencies, providing their members with comprehensive market data as a basis for formulating production and price policies. Before the autumn of 1909, when the A.L.A.M. imposed production quotas and price-fixing requirements on newly admitted members, it did not engage in practices familiarly associated with monopoly. The A.L.A.M. did not restrict the prices or output of its affiliated firms; nor did it limit their sales territories or range of models. While a reasonably uniform policy was adopted, there were many breaches. "What did matter," writes Frederic L. Smith, "was that we should all hang together on the matter of cash on the nail, sight draft with bill of lading, and a good sized deposit on orders." 6 The annual production totals of its members grew each year and receded only when market conditions were unfavorable. The A.L.A.M. sought to restrict competition by curbing the number and activities of independent producers, but the mere brandishing of the Selden patent failed to achieve this purpose. As Motor World observed in 1909, the number of independents "multiplied enormously" in the six years since the formation of the A.L.A.M.7 While the threat of the Selden patent deterred many investors from entering the industry, its discouragement i73

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of new investment did not exclusively benefit the A.L.A.M. The licensed makers were committed to a policy which maintained the high price of automobiles; most independents, however, produced cars in the low or middle price ranges. That the A.L.A.M. helped to retard the rise of competitors in the popular-priced field directly benefited the Ford Motor Company, which pioneered in the mass production of the cheap car. The membership of the A.L.A.M. was closely restricted. With few exceptions, new entrants found the doors of the association tightly locked against them. One year after it was organized, the A.L.A.M. had a membership of thirty-one domestic manufacturers. By January, 1909, despite changes in the roster, total membership stood at the same number. Most of the new companies which gained admission had to buy out a firm which held a Selden franchise. For example, the Buick Motor Company acquired a Selden license by purchasing the Pope-Robinson Company, and John N. Willys won A.L.A.M. membership for the Overland Automobile Company by acquiring the Pope-Toledo Company. Of all the Selden licenses granted by the A.L.A.M., none was granted under more curious circumstances than the one held by George B. Selden. In 1906, after Selden secured the financial support of a group of Buffalo and Rochester businessmen for manufacturing passenger automobiles, he made the painful discovery that he could not enter the industry unless he secured a license under his own patent. Having assigned his rights, Selden solved his dilemma by acquiring the license of the Buffalo Gasolene Motor Company, which on November 13, 1906, became the Selden Motor Vehicle Company. As one historian of the industry observes, "the situation probably ranks unique in the annals of patent law, where the patentee himself is debarred from manufacture, although willing to pay royalties to himself." 8 The A.L.A.M. was the stronghold of the exponents of the high-priced car. Virtually all of the expensive automobiles made by American manufacturers were licensed under the Selden patent. This emphasis made the licensed association a conservative influence, but not a restrictive one. As a trade association, the interest of the A.L.A.M. lay in the mechanical perfection of the car, not in volume production. Its members followed the i74

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traditional practice of taking a high unit profit on a limited number of cars. Most of the licensed makers, with the outstanding exception of William C. Durant, who later rebelled against the A.L.A.M., never adjusted their sights to a popular market. In any given year between 1903 and 1911, the A.L.A.M. never had more than four makes selling for less than $1,000. Most of the licensed automobiles were priced at between $3,000 and $6,000. One observer remarked that the A.L.A.M. was "not interested in producing a poor man's automobile." 9 In contrast, it was generally agreed that the majority of independent makers produced low-priced cars. Their ranks could boast of more automobiles selling at less than $3,000, and cite an average price that was $1,500 below the A.L.A.M. average. In 1909 the independents offered twenty-six models costing f 1,000 or less. While it would be easy to assume that the A.L.A.M. makers deliberately excluded manufacturers of low-priced cars, the explanation would be deceptively simple. As conservative businessmen who did not believe that the day of the cheap car and the volume market was at hand, the licensed producers were following the ways of orthodoxy in the automobile industry. But their lack of vision lent added force to Henry Ford's argument that he was battling privilege so that he might give the American people a car made for the multitude. 3

The Selden war flared up along a broader front when the assault upon the Ford Motor Company was supported by a series of flanking attacks against other independent makers. Not the least important phase of this far-reaching struggle was fought along the lines of distribution and marketing. Here the A.L.A.M. used its exclusive agency clause (which forbade the agents of licensed producers from handling independent makes) in an attempt to squeeze out unlicensed dealers in every city and town where automobiles were sold.10 This agency provision, dictated by the A.L.A.M. as a mandatory requirement, worked hardships on dealers and was detrimental to many small independent manufacturers who failed to secure retail outlets. This feature of the i?5

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patent contest, perhaps more than any other, aroused deepseated resentment in the trade. The A.L.A.M. denied all intent of restraint of trade, pointing out that the licensed association itself made no contracts with dealers. Citing harsh examples of patent enforcement in other industries as a gauge of its own liberality, the A.L.A.M. protested that it was following a policy of moderation. Quoting the opinion of the court in Victor Talking Machine Co. vs. The Fair, the A.L.A.M. warned: "Within his domain, the patentee is czar. The people must take the invention on the terms he dictates or let it alone for seventeen years. This is a necessity from the nature of the grant. Cries of restraint of trade and impairment of freedom of sales are unavailing, because for the promotion of the useful arts the Constitution and statutes authorize this very monopoly." n Yet such prerogatives did not lessen the sensitivity of the A.L.A.M. to charges that it was a "trust." It was probably for this reason that the Selden association did not take legal action against dealers who handled models manufactured by American independents. It followed instead the safer tactic of suing dealers of foreign motor cars, who catered to a very small market. As defendants it almost invariably named importers xvho could not afford to wage a legal contest on equal terms. The primary target of the A.L.A.M. in the marketing domain was the Ford dealer. The association exerted pressure on agents to discontinue handling the Ford line, warning merchants that failure to cancel their agreements would result in a boycott by the licensed companies. A Ford director recalled that at the New York auto show held in January, 1905, the last in that city to include licensed and independent makers, the A.L.A.M. tried "to create such a feeling of distrust and fear on the part of dealers, xvhich would so intimidate them, that they would not sign a contract for the sale of Ford cars." 12 The A.L.A.M. harassed dealers by threatening suits against purchasers of Ford automobiles. Lucius H. Elmer, the first Ford agent in Hartford, the stronghold of the Electric Vehicle Company, was in 1904 the only unlicensed auto dealer among the twenty-three agents in that city. To protect his customers against infringement actions, Elmer had to offer a bond of $1,000 with every Ford car. The bonds were furnished by the Ford Motor I76

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Company, which agreed to hold purchasers "free from any loss, cost, damage and expense" resulting from a suit brought under the Selden patent. The company explicitly pledged to bear the full cost of the defense. Beginning in October, 1903, the Ford Motor Company included in its advertisements a guarantee of protection to agents and individual purchasers.13 During his brief tenure (1904-05) as a Ford agent in New York City, John Wanamaker launched a vigorous advertising campaign against the A.L.A.M., flaying it as a "Trust" and assailing the "scarecrow" of the Selden patent. In one advertisement he shrewdly noted that the Ford double-cylinder automobile, fully equipped, sold for $900 in contrast to the $1,500 asked for the cheapest licensed makes with a similar power plant. "Don't Give $600 to the Bogey-Man," counseled Wanamaker. "WHEN YOU BUY A FORD MOTOR CAR FROM JOHN WANAMAKER, YOU ARE GUARANTEED AGAINST ANY TROUBLE WITH THE TRUST. That's all the insurance any man will want." 14 In another advertisement, Wanamaker taunted the A.L.A.M.: Some people believe in bogey-men. Some people even believe this bogeyman. They don't see the strings that pull him, and the straw that he is stuffed with; nor the wind horn back of him. One of our customers went around to see other automobiles, before deciding on the FORD motor car; and happened to mention the fact that he had the FORD in mind. The salesman immediately said: "I advise you to have nothing to do with it. If you buy it, you are liable to get arrested and have a lot of trouble. They have a lot of law-suits already." That's the Bogey-man's story. That's the only argument against the FORD MOTOR CAR. The Trust has no car to show in competition with it—• hence the scare-crow and tom-toms.15

Despite the threats made by the A.L.A.M., Ford did not lack for dealers. During the decade of the Selden patent suit he steadily built up his network of agencies, and, with the possible exception of the Model K, a heavy and expensive six-cylinder model brought out in 1906, never failed to dispose of his cars at a profit. The only limitations on the number of Ford dealerships were set by the manufacturing capacity of the Ford plant and the reluctance of some agents to accept the lower discounts on Ford automobiles. According to statistics compiled by the 777

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A.L.A.M., there were 1,545 automobile dealers in the United States in 1906. Of this number, 1,057 handled only licensed machines, while thirty-four sold only electric and steam automobiles.16 Thus the Ford Motor Company could place its contracts among 450 active agents. This was more than enough to guarantee the company a sufficient number of retail outlets. Although the A.L.A.M. used the Selden patent as its main instrument of aggression, it gave warning in 1903 that it would also wield the more than four hundred patents individually owned by its licensees. The A.L.A.M. retained a patent and mechanical expert who examined unlicensed models to determine possible infringements of detail patents controlled by the licensed association.17 The first of the infringement suits involving these minor patents was lodged on January 5, 1904, when the Electric Vehicle Company brought proceedings against the American branch of Panhard & Levassor for infringement of the back lock steering mechanism patented by Hiram P. Maxim in 1902. Other suits were brought under the Copeland patent on the universal ball joint in the steering mechanism and under the Elliott steering device. Additional sorties were shortly undertaken by the Association Patents Company, which was formed in 1905 by A.L.A.M. members for the purpose of handling all patents held by licensed firms with the exception of the Selden patent. Alone among the independents, Ford struck back against these secondary actions. In February, 1909, he notified several licensed manufacturers that he would bring infringement suits against them unless they stopped using his final drive patent. "We've been too busy fighting the Selden suit to protect our own patents," said Ford. "Now we have fought the Selden folks to a standstill and we have time to fix up our fences, which we find have been torn down or climbed over." On May 15, 1909, the Ford Motor Company sued the Cadillac Motor Car Company for infringement of the final drive device. The Ford Times noted with satisfaction that the company was "now lining up on the other side of the fence and becoming the aggressors." 18 The suit against Cadillac was abandoned in September, 1909, and no action was taken against any other A.L.A.M. member under the final drive patent. This is the first known instance when Ford used a patent for retaliation. We shall see that his ex1-78

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perience in the Selden patent case provided the setting for the patent policy of the Ford Motor Company.

Aware of the necessity to enhance the status of the Selden patent without drawing the fire of public criticism, the A.L.A.M. sued individual purchasers of foreign makes and refrained from taking action against users or owners of American-made cars lacking the Selden imprimatur. Virtually every owner of an unlicensed imported car was a person of wealth, and it could be foreseen that his harassment would hardly excite opponents of the trusts. Yet such isolated cases, if well-publicized, might stay many motorists from buying an unlicensed domestic make. The licensed association tracked down alleged infringers through "patent sleuths," who scoured the streets in their hunt for unlicensed foreign automobiles. Any imported machine which did not bear the small brass license tag of the Selden association was immediately suspect. After the detectives had found their quarry, William A. Redding, one of the A.L.A.M. lawyers, dispatched warning letters to the owners, notifying them of infringement and suggesting that they enter into "an amicable settlement" to avoid "the expense and annoyance of litigation." The payment of a Selden royalty did not pinch the purses of wealthy motorists, who might have to remit as much as $500 on an expensive foreignmade machine, and most of these owners gladly complied. They formally acknowledged the validity of the Selden patent and paid the five per cent royalty on the delivered cost of the machine, the stipulated rate for persons who imported their own automobiles.19 Among those whose foreign-made machines were licensed under the patent were Alfred I. du Pont, owner of a Decauville automobile, and Harry Payne Whitney, who purchased a Bollee vehicle. Whitney had good reason for scrupulously observing the ceremonial of rendering tribute. The son of William C. Whitney, who died a year after the A.L.A.M. was organized, Harry Payne Whitney shared with Thomas F. Ryan the controlling interest in the Electric Vehicle Company, which owned the rights to the Selden patent. i79

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Other motorists were not as complaisant, and refused to pay tribute on the ground of principle. These recalcitrants were promptly haled into court. One of them was Melville D. Chapman, a New York stockbroker who used an unlicensed Rochet-Schneider car which he had purchased in France in 1903. When the A.L.A.M. demanded that Chapman settle by paying $350, he defiantly replied that he was prepared to spend twice the amount to defend his rights. After some testimony was taken, Chapman submitted to a consent decree and paid up. Another socially prominent user of foreign cars was William Gould Brokaw, a New York sportsman who was sued in January, 1907, after he had refused to pay royalties on several imported machines. His failure to enter a defense was prejudicial to his position before the law. An injunction issued against him was accompanied by an order for accounting and costs. Another target of an infringement suit was John B. Trevor, a student in the Columbia University Law School. In February, 1905, Trevor imported two unlicensed cars from France. When the A.L.A.M. notified him that his machines were not covered by a Selden license, Trevor submitted to a consent decree, but was unable to pay back royalties. A permanent injunction restrained Trevor from using or selling his two cars. Having acknowledged the validity of the Selden patent, he was also restrained from buying any other unlicensed motor cars, whether of foreign or domestic manufacture. Early in 1906 Trevor nevertheless imported a Panhard car. The A.L.A.M. detectives reported the violation and Trevor was summoned to court. Judge Emile Lacombe held him in contempt of court and imposed a fine on the hapless law student. Trevor paid the fine and was left with three machines he could neither use nor sell! 20 How tireless the A.L.A.M. could be in picking off such violators is shown by the case of William J. Moore, a wealthy young New Yorker who was sued in December, 1904. Moore had purchased an unlicensed Martini car from a Manhattan agency. Failing to appear in court, Moore lost the case by default, and a decree pro confesso was entered against him on August 15, 1905, in the Circuit Court for the Southern District of New York. An injunction and an accounting for damages were issued. Moore promptly vanished and soon afterward was reported as having died while 180

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visiting in Texas. The false announcement of his demise was given out by the New York agents for the Martini car. Meanwhile, Moore stealthily flitted in and out of New York under an assumed name to avoid service of the injunction. The A.L.A.M. "patent sleuths" checked the death records, found that Moore was very much alive, and finally traced him to Albany, where a United States marshal thrust the injunction into Moore's hands as the reputed corpse imbibed at the bar of the Ten Eyck Hotel.21 The manner in which the A.L.A.M. publicized these victories was wholly misleading. The injunctions did not affect users of any unlicensed automobiles save those involved in the specific suits, and could not be invoked against other owners of independent makes. Moreover, in each case the court had not passed upon the merits of the Selden patent. These considerations did not prevent the A.L.A.M. from strongly implying that the injunctions applied to all users or owners of unlicensed cars. Since the public was barely acquainted with legal usages, the results of these actions against purchasers furnished the licensed association with powerful ammunition for its publicity campaign. Of far greater significance than these diversionary actions was a decision filed on February 15, 1908, by Judge George C. Holt of the Circuit Court for the Southern District of New York.22 The A.L.A.M. had instituted contempt proceedings against Walter G. Allen, a New York automobile tradesman who had secured a Selden license during his earlier association with the De Dietrich Import Company. Later, w7hen Allen established another agency for handling the Mercedes car, an unlicensed foreign make, he was sued for infringement. Like many others chosen as targets by the A.L.A.M., he permitted the suit to go by default. A decree pro confesso and an injunction were entered against him in October, 1907. When Allen subsequently became active as the manufacturer of the Allen-Kingston car, the A.L.A.M. sought to have him punished for contempt. Allen moved for a reopening of the default. Judge Holt denied this motion, properly holding that a judgment secured by default was as binding as one made in a contested case. At this juncture, most other judges would have relied upon the opinion of Judge Coxe on the status of the Selden patent, as rendered in the Winton case. But Holt, a tough-minded judge, 181

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took a divergent approach that demonstrated a realistic appreciation of the facts. He observed that the Selden patent had never been conclusively litigated on its merits and had never been declared a pioneer patent in any fully contested suit. He took notice of the fact that the complainants had collected $1,500,000 in license fees and royalties without ever having brought to trial a case testing the validity of the claims. "I think," said Holt, "that there is sufficient doubt whether the Selden patent is a pioneer patent. . . ." Aware that the punishment of Allen for contempt would be magnified by the Selden forces as an adjudication of the patent, Holt denied the A.L.A.M. motion. His decision cut through a fog of misrepresentation and confusion, and set in clear perspective the true implications of the secondary cases involving dealers and motorists. All now looked to the Ford and Panhard suits for the final and controlling decision. For a time it seemed that Ford might stand alone in opposing the A.L.A.M. In January, 1905, the independents were taken aback by the announcement that Panhard fc Levassor had capitulated. Andre Massenat, manager of the New York branch of the French firm, acknowledged the validity of the Selden patent and agreed to the entering of a consent decree. The settlement provided for an adjustment on back royalties and payments on future importations. The unqualified surrender brought high elation in the A.L.A.M., which informed the trade that Panhard cars might "now be purchased with license tags affixed, and without liability to prosecution." But the victory was short-lived. The French manufacturers, denying that Massenat had authority to act in their behalf, repudiated the settlement. The A.L.A.M. promptly renewed the suits against Panhard & Lavassor, and unity of purpose and action was restored in the unlicensed camp.23 Despite this firm reversal, the episode had disconcerting implications. It revealed that the A.L.A.M. could play upon weariness and impatience among its foes and might again profit from hasty capitulations and defections in the unlicensed ranks. 5 Since 1903 the Ford and Panhard suits had made slow progress along the tortuous path of the patent law, disappointing many

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who had hoped for a decision within two or three years. In the spring of 1904 the litigants had expressed their determination to avoid delaying tactics and to expedite the proceedings. Testimony was taken six days a week, and, to speed the action, the court consented to the grouping of the three Ford cases, ruling that testimony taken in one could apply to all. But confidence in an early conclusion waned after the A.L.A.M. attorneys made numerous requests for postponements and extensions. "This remarkable case," commented Horseless Age in February, 1906, "promises to develop into a record in patent litigation as regards the length of time during which the patent has been under dispute before the courts." 24 Year by year the costs of the suit mounted. It is small wonder that Winton and other defendants who made settlements had flinched at the prospect of financial strangulation in the labyrinthine coils of the patent law. In later years the case was characterized as a "Gargantuan maze of litigation" and "one of the most curious and intricate plots in the involved history of American patent law." 2B The case was in truth an indictment of the unwieldy procedures in equity that failed to distinguish material testimony from dusty and repetitious chaff. While the American independents had been momentarily alarmed by the weakening of Panhard & Levassor, they were profoundly aware that their common fate turned upon the decision in the Ford cases. The unlicensed companies were kept under a steady hail of letters from the A.L.A.M. Sent out by the thousands, these concluded on a grim note: "If this notice and warning is not heeded, you will render yourselves liable to a suit for an injunction and accounting on said Selden patent." 26 Established licensed manufacturers were not deterred from making plant expansions and improvements, but many would-be investors in new enterprises were reluctant to back an undertaking that might be involved in a law suit. Beyond a doubt, the industry would have fallen under the sway of an absolute monopoly if Ford had yielded and left a vacuum in the resistance against the A.L.A.M. No other suits for alleged infringement of the Selden patent were brought until January 16, 1907, when the A.L.A.M. lodged actions against several manufacturers and dealers. This move caught the industry by surprise, for it had been commonly be283

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lieved that the A.L.A.M. would take no further action until a decision was handed down in the Ford suits. In May, 1907, the Selden forces filed a series of actions in the Circuit Court for the Southern District of New York in the hope that a decision adverse to Ford in that jurisdiction would be equally binding upon the defendants in these pending separate suits. Actions were lodged in swift succession against more than fifteen unlicensed companies, among them the builders of the Reo, Premier, Rambler, National, Wayne, Dragon, Mitchell, Stoddard-Dayton, Welch, De Luxe, Marmon, Aerocar, and Maxwell. Announcing that this maneuver followed a precedent set in the cases involving the sewing machine and other leading patents, A.L.A.M. officials boasted that these suits would enable them to strike hard "all along the line" in the event the Selden patent was upheld. "Merely a series of whistles to keep their courage up," snapped Ford. By July, 1907, there were pending some seventy cases, each joining a manufacturer and his agent as defendants.27 This flurry of suits brought a host of unlicensed makers and their lawyers to Detroit, where they conferred with Ford and Couzens. Among those who attended the meeting were Ransom E. Olds, Benjamin Briscoe, and Jonathan D. Maxwell. Even the indomitable Thomas B. Jeffery, who had outwardly remained above the battle, appeared at this gathering. Some of the independents wavered, but they were reassured after Parker delivered an exhaustive analysis of the Selden patent. Their determination renewed, they proffered large sums of money to aid the Ford defense. These, wrote a reporter, "were smilingly declined, the Ford people stating that the matter was one in which all were concerned and that they felt amply repaid in being in position to allay any possible uneasiness that recent occurrences might have created." 28 Then as later, with the exception of the Panhard costs, the Ford Motor Company alone bore the expense of opposing the Selden patent in the courts. Soon afterward, the independents took added heart from a train of developments that weakened the strength and prestige of the A.L.A.M. This turn in the fortunes of the Selden association came with the failures of the Electric Vehicle Company and its former ally, the Pope Manufacturing Company. Another blow to the A.L.A.M. was the death of George H. Day in November, 184

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1907, when these business disasters were coming to a head. After the passing of Day, the "balance wheel" of the A.L.A.M., the licensed camp was beset by internal strife. The Pope Manufacturing Company, a member of the A.L.A.M., produced three makes of gasoline cars at plants in Connecticut, Ohio, and Maryland, and an electric model at its Indianapolis factory. Grossly overcapitalized and managed on an unsound financial basis, it was one of the first motor car companies to collapse in the panic of 1907, going into bankruptcy after failing to meet obligations of more than $400,000.29 The loss of one of its most prominent members belied the touted role of the A.L.A.M. as a stabilizer of the motor vehicle industry. More serious was the failure of the Electric Vehicle Company later that year. The company's property had been mortgaged since 1902. Its financial position weakened rapidly after the panic struck in 1907. Unable to borrow money to meet $2,500,ooo in mortgage bonds held by the Morton Trust Company, a banking adjunct of the Whitney-Ryan traction syndicate, the Electric Vehicle Company went into receivership on December 10, 1907. Its liabilities stood at $3,604,142. Its assets were listed at $14,084,432, of which $11,447,537 was credited to the book value of patents and patent licenses, including the Selden patent. Its cash assets were $12,000. Henry Ford tartly observed that he had "hardly expected there would be anything so tangible as cash," and his allies among the independents did not conceal their glee over the misfortunes of the Electric Vehicle Company.30 In an editorial, "The Trail of the Serpent," Horseless Age wrote a vitriolic epitaph over the grave of the Electric Vehicle Company.31 The company, it said, had been the creature of financial manipulators who had milked it dry. "The result of seven years' business is failure, Messrs. Ryan, Whitney, et al. having absorbed seven years ago all possible profits for years to come." The tirade against the "wily serpent of Wall Street" thundered to a climax as Horseless Age charged that "the company has never made a dollar from the manufacture of automobiles, and that its mainstay has been the revenue derived from the licenses under the Selden patent." The inventory of assets filed by the receivers showed that the book value of the Selden patent could be conservatively set at $10,000,000. Between 1903 and 185

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1907 the Electric Vehicle Company made more than $500,000 from the Selden patent.32 After the Electric Vehicle Company went into receivership, a widespread revolt against the payment of royalties swept the A.L.A.M., whose member firms threatened a mass exodus unless the royalty rate was reduced. The receivers, who faced a suit by their major creditor, were in no position to resist. In June, 1908, the royalty rate of 1% per cent of the list price was cut to one per cent, less one-fifth for cash paid within fifteen days after the quarterly royalty remittances fell due. Thus the new levy was effectively set at four-fifths of one per cent. The modified agreement provided that maximum royalties accruing to the Electric Vehicle Company in any single year were not to exceed $150,000. George B. Selden agreed to accept not more than $60,ooo a year. Henceforth the major share of the Selden royalties went into the treasury of the A.L.A.M.33 These developments, with their accompanying reports that the A.L.A.M. was torn by internal strife, were exploited by Parker. On May 3, 1908, he filed an application in the Circuit Court for the Southern District of New York, requesting that the Electric Vehicle Company post security for costs in the Ford and Panhard cases. He asked for dismissal of the suits in the event the Electric Vehicle Company failed to meet this condition. The A.L.A.M. was compelled to issue an indignant denial of Parker's charge that it was "on the verge of dissolution." 34 While the substantial reduction in the royalty rate prevented a serious upheaval in the A.L.A.M., a few of the insurgents held out against paying tribute. They were led by the audacious promoter, William C. Durant, the "Napoleon of the automobile industry." His Buick Automobile Company had been admitted to the A.L.A.M. in 1904, when Durant acquired the license held by the Pope-Robinson Company. In the spring of 1908 he was laying the foundations of the combine which shortly emerged as General Motors. The Buick, one of the few low-priced cars among the licensed makes, was in brisk demand, and Durant, as the largest volume manufacturer in the A.L.A.M., was paying the heaviest royalties. "We have concluded," said his attorney, "that the Selden patent does not mean anything." 35 Faced by the Durant revolt, the A.L.A.M. brought suit in z86

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September, 1908, to collect back royalties from Buick and from the Olds Motor Works, the other recalcitrant. Both companies were excluded from the forthcoming automobile show at Madison Square Garden. In January, 1909, the Olds Motor Works, whose license had already been cancelled, was expelled from the A.L.A.M. This train of events damaged the prestige of the Selden association. By this time the long legal contest was drawing to a close. On December 21, 1908, more than five years after the first action was filed against Ford, the taking of testimony was concluded, and the attorneys on both sides began drawing up their briefs. By the middle of 1909, more than $2,000,000 in royalties had been paid to the Selden interests. "In my experience," said one of the A.L.A.M. lawyers, "there has never been any such payment of license fees under any patent, in the history of patents in this country." The New York World commented: "Millions of dollars are concerned in the outcome, in which every manufacturer and owner of a gasoline automobile in this country are interested." S6 6

His involvement in the Selden patent war thrust upon Henry Ford the beginnings of a legend. The years of the litigation saw his rise as the most controversial figure in the formative period of the motor car industry. Well before the suit ended, the automobile world came to know him as its most ardent champion of the principle of free enterprise. Ford's role in the Selden case drew added meaning from his emergence as the leading manufacturer of a low-cost car produced in quantity for a mass market. This development, wholly unanticipated by the A.L.A.M., did much to detract from the Selden cause. Where the licensed association offered assurances that the patent was valid, and exacted a royalty for which there was no equivalent in the product, Ford stressed the positive contribution of a sturdy car designed for the people. Where the A.L.A.M. sought to exclude venture capital, Ford waged grim resistance against privileged monopoly on the traditional ground of unfettered competitive enterprise. By endowing his own struggle for a place in the sun with a luminous appeal to fundamental princi187

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pies, he translated a wearisome patent suit into one man's struggle for the right to enjoy unhampered opportunity. This was a potent theme in a day when the politics of Progressivism was sweeping the land and the movement for social democracy was still nourished by the hopes and ambitions of the small businessman. The first half of the Selden suit coincided with a marked change in Ford's personal fortunes. His ascendancy to a dominant position within the company paralleled his growing reputation in the industry. In 1906, he bought out the stock interest of his former partner, Alex Y. Malcomson, and a year later became president and majority stockholder of the company. Although his augmented holdings naturally reinforced his determination that the Selden patent must be broken, Ford's material interest was never paramount to his moral conviction that Selden was a trespasser upon individual creativeness and initiative. After the Ford Motor Company gave proof of its staying power, Ford never feared the patent as a real threat to the prosperity of the venture. The company reinvested its cash earnings, expanded its operations, increased its sales and profits by the year, and declared handsome dividends at frequent intervals. Such unslackened progress would have been impossible had the Selden suit actually hobbled the company. Indeed, even as the case was under way, the Ford Motor Company took the first step toward the epochal achievement of the American automobile industry. That development was the predecessor of the Model T, the first low-cost standardized automobile built in vast numbers. By 1905, Ford's vision of a light, cheap, and durable utility automobile that could be produced in quantity, like the matches and pins he had cited as comparable examples, was fast approaching realization. The industry as a whole was still committed to the concept of the motor car as a luxury product whose future improvement lay in elaborate refinements. Ford breasted the tide. "Early in 1904," he said, "I was convinced that the future of the automobile as a staple and permanent industry was dependent upon the production of a car for the ordinary man, and I wanted what ordinary people wanted, and I put my efforts towards developing a car that would meet what I conceived to be the ordinary man's car." 37 In May, 1905, came the stunning announcement that Ford 188

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would market a $400 car in 1906. "It will be so popular that everyone can own an automobile," said a company official. "This is one of the steps that will suit the pocketbooks of the masses," commented the Detroit Free Press.39 The car was the Model N, which incorporated some of the basic principles of design and construction later embodied in the Model T. In a letter to a trade journal, Ford enunciated his revolutionary policy. "The greatest need to-day is a light, low-priced car with an up-to-date engine of ample horsepower, and built of the very best material," he wrote. "It must be a handy car, not too cumbersome." Lightness and simplicity were the two key factors. Ford believed that the market for such a car was virtually limitless. "There are more people in this country who can buy an automobile than in any other country on the face of the globe," he maintained, "and in the history of the automobile industry in this country the demand has never yet been filled." The motor car was not a luxury; it was "now one of the absolute necessities" of American social development.39 Within a decade, the logical extension of this policy was to transform the automobile industry and make it a seedbed of factory technology. A trade observer quickly grasped the significance of Ford's pronouncement: "His aim is to reduce the manufacturing of automobiles to the same basis as sewing machines and typewriters, turning them out in quantities." 40 In January, 1906, the Model N was introduced to American motorists, to the accompaniment of a publicity campaign that portrayed Ford as the prophet of a car for the masses. Ford promised that 20,000 of these cars would be built in the coming year. Although actual output fell short of this mark, it did not alter the fact that no other producer had dared set a like goal. The advent of the Model N aroused wonder and consternation among builders of cheap automobiles. "If a success it threatens to throw the auto manufacturing business into chaos," said a Detroit newspaper.41 The Model N never reached the market at the $400 price. For a short time it was retailed at $600; then the rising costs of materials forced the company to increase the price to $700. Yet this initial step in the Ford revolution in auto building offered more than price as a challenge to the orthodoxy of the 189

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trade. When the Model N appeared on the scene, the demand for a durable low-cost car with economy of operation was large, but it had been barely exploited. The single-cylinder "motor buggy" used by Midwestern farmers was too crude, undependable and weakly powered to satisfy mass demand, and no established maker had adopted it. The industry had long considered it impossible to build a reliable cheap car selling for less than $650. Most low-priced cars of the day had single-cylinder engines rated at not more than eight horsepower. In contrast, the Model N had a four-cylinder engine capable of delivering fifteen horsepower. It came at the crest of a tendency toward more expensive models, when the heavy European-type touring car was finding favor among American manufacturers and was a conspicuous exception to the price pattern of the industry. With the Model N, Ford staked out the volume market of the future. The car demonstrated how an expanding market could be posited upon the economies of interchangeable quantity production, particularly the vital feature of the standardized chassis. The Model N gave Ford his first opportunity to test his basic formula of setting a price aimed at creating a mass market and then bringing manufacturing costs into line with the price. Thus the scope of the market stimulated ingenious technical advances. "The manufacturing world stood aghast," said a trade journal in retrospect. "Only a very few believed that Ford would progress far with so radical a departure. But he did. That year Ford sprang into the limelight as the largest producer of motor cars the world has ever known. And the principles laid down in Henry Ford's general scheme are substantially those that prevail in the industry to-day, except in the cases where a firm's output is not numerically great enough to warrant the initial expense." 42 With the Model N, Ford found his metier. The acclaim this car won for him as a proponent of the mass-produced cheap car merged with the vigorous advertising and publicity war he waged against the Selden interests. Thus the champion of a car for the people also became known as the foremost defender of competitive enterprise in the automobile industry.

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7

In his clash with the A.L.A.M. Ford displayed that canny instinct for self-advertisement which later made his name a byword. The Selden patent, as Ford admitted in 1905, benefited his company "through the publicity we have obtained through fighting it." Afterward he was more explicit. "As a matter of fact, probably nothing so well advertised the Ford car and the Ford Motor Company as did this suit," he said in his quasiautobiography. "It appeared that we were the underdog and we had the public's sympathy." And James Couzens, recalling the anxiety which the Ford officials had felt when the A.L.A.M. moved against them in 1903, remarked: "We did not realize at the time that the Selden suit was probably better advertising than anything we could put out." 43 Not all of the favorable publicity came through "free" advertising. The company took paid space in many newspapers and trade publications to level its blasts against the A.L.A.M. Undoubtedly the impact of this advertising was heightened by the Selden controversy. This situation also had the advantage of good economy, which must have pleased Ford and Couzens. Aside from advertising expenditures, which may be accounted as normal business costs, Ford found it cheaper to fight the A.L.A.M. than to pay royalties. Had the company been a Selden licensee, it would have paid an average royalty of $12.50 on each car sold before the autumn of 1908, when the Model T was introduced. Up to that time it was spending about $6.80 per machine to defend the Selden suit. Thus it could allocate about $6.00 per car for advertising before matching, on a unit basis, the sum that would have been paid as royalty.44 This was shrewd business sense, but it would not have been half so effective had it not been rooted in Ford's unwavering belief in the justice of his cause and in his individualist outlook. "Henry Ford has ever been an independent thinker," wrote a journalist in 1907. "Never, even in his leaner, much leaner, years has he followed a beaten path or taken any man's judgment before his own, preferring instead to shape his own course and steadfastly follow it, turning a deaf ear to any and all attempts /pj

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to swerve him from it. ... He has deliberately flouted trade customs and usage. . . . He is a man who appears to be sufficient unto himself. He is his own designer; his own manufacturer; he is his own financier. He has no use for a lawyer except to have him do in legal form that which he wants done. The wisdom of it he considers his own affair. . . ." 45 The central theme of the company's anti-Selden advertising was, as James Couzens put it, the "great American doctrine" of free industrial enterprise. It was Couzens, together with Parker, who drew up many of the Ford broadsides. Some were written in their entirety by Parker, who at the outset of the suit convinced Ford of the importance of conducting a spirited advertising campaign. It was not long before the figure of Henry Ford dominated each piece of advertising matter. The copy-writers delighted in portraying him as an automotive pioneer with a firm dedication to open access to technology in the public interest. In advertisements cast as personal interviews with Ford, he charged that the A.L.A.M. had blocked technical progress, an accusation to which he returned more than once. "It is perfectly safe to say that Mr. Selden has never advanced the automobile industry in a single particular," said Ford, ". . . and that it would perhaps be further advanced than it is now if he had never been born." 46 Ford smothered the Selden patent in scorn and ridicule. He cited its "checkered career" in the Patent Office and its use by the A.L.A.M. "to annihilate those that were deemed too weak financially to withstand the onslaught." Selden himself could not be credited "with one little grain of good faith or a glimmer of inventive genius. . . ." Ford promised he would demonstrate that "Selden did not and could not invent any part of an automobile . . . ; that this man Selden was not an inventor at all, but merely a patent attorney, who was willing to prostitute his profession and avail himself of the blind alleys of the law to gain an end." The patent was nothing more than "a huge joke," he insisted, and much of the income from it "a soft pension fund" for the A.L.A.M. lawyers.47 Some of these advertisements, revamped by editors for their news columns, enjoyed a wide consumption, and it is likely that their publicity value influenced Ford in his subsequent reliance upon controversial statements as a means of gaining "free" advertising. 192

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The company advertisements portrayed Ford as a disciple of the Manchester school of economics and a public benefactor who had preserved against powerful foes the traditional concept of American business enterprise. "Early in the history of the automobile industry," ran an advertisement published in 1906, "Henry Ford took the position that there should be no restriction in the price of the automobile. The automobile was a great institution, of stupendous possibilities, and so necessary that nothing should hinder its development, restrict its output, or hold up a fictitious value. So he refused to become a member of the automobile Trust. On the contrary, single-handed and alone his Company fought the so-called Selden patents [sic] for years, and the Ford Company has elected to make its own price on its product." 48 Another announcement spoke of Ford's determination to resist any combination that "would stifle genius, progress and development" and "keep from the public the benefit of the results of thousands of minds that were centered on this great industry, even if it did offer the company a chance for larger profits by holding up the people and confining the output to only such as would meet with the approval of the Trust. . . ." It continued: Mr. Ford has no quarrel with the Trust or its ideas. He is perfectly willing to allow them to conduct their business to suit themselves, provided they do not interfere in any way with his ideas and he is allowed to pursue his own course and work out his own inventions unhampered and without interference. And what is the result of this stand taken by the Ford Motor Co.? More independents are manufacturing cars to-day than are built under the socalled Selden patents. The Ford Motor Co. alone carried on this great fight, and because they called a halt to the bluff put up by the Trust, hundreds of non-licensed factories started up all over the U.S., turning out thousands of cars and giving employment to hundreds of thousands of men, and in every way the Automobile industry and the public at large have been benefited and every man of brains has been given an opportunity to develop his own ideas and get the benefit therefrom. All this comes from the unrestricted development of the Automobile. All this has been made possible because the Ford Motor Co. started in business with this one great principle in view—to take the Automobile out of the list of luxuries and put it into the class of necessities—and have not allowed any man or set of men to interfere with or dictate to *93

Monopoly on Wheels them as to how many cars they should build, or what price they should get for them.49

In a company advertisement which a Detroit newspaper adapted as a press interview, Ford said: We possess just enough of that instinct of American freedom to cause us to rebel against oppression or unfair competition. It goes against the grain of Americanism to be coerced, or bluffed, or sandbagged; and men who will not fight in such circumstances do not, in my estimation, possess the highest degree of self-respect or even honesty—for I protest it is dishonest to bow to expediency in such a case, and thereby not only become contributors of graft money, but subject the entire automobile industry and buying constituency to a tax that is unjust and uncalled for. In this attitude we feel we have the sympathy and moral support of all American people—a people who instinctively abhor underhanded methods, and who discountenance the use of a blackjack in a quarrel.

While he was not opposed in principle to the patent system, Ford continued, the laws furnished "opportunities for little minds, directed by others more cunning, to usurp the gains of genuine inventors—for pettifoggers to gain a strategic advantage over honest men, and, under a smug protest of righteousness, work up a hold-up game in the most approved fashion." The A.L.A.M. was dominated by men who were "unwilling to stand on their own ability and compete for business in an open market" and instead resorted to "smart practice and bluff." 50 This war of words did not rankle with personal animosity. Ford sincerely termed George H. Day "a gentleman for whom personally I have the greatest respect." With mixed feelings, George B. Selden said that personally he was "on good terms with Mr. Ford, and that I rather admire the business skill with which he has managed his enterprise, even if sometimes it did involve advertising of what seems to me to be rather illegitimate char acter. . . ." In July, 1906, Day and Charles Clifton, president of the A.L.A.M., had a chance encounter with Ford and Couzens in the lobby of a Detroit hotel. The four men hesitated until Ford extended a warm greeting, shook hands, and engaged his adversaries in friendly conversation. Impulsively, Ford asked: "How'd you like to look over our plant?" "We'd be delighted," they replied. Day and Clifton entered a Ford car waiting at the door and drove off to the factory.51 The incident generated rumors 194

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that Ford would settle the Selden suit and join the A.L.A.M. But such courtesies did not alter the determination of either side, and the company's anti-Selden advertisements continued to strike hard at the licensed association. In waging his battle against the Selden interests, Ford drew upon the deep sources of that national passion for economic equality which infuses the democratic individualism of the marketplace. He invoked the favorite American image of a race open to all, free of artificial barriers to business enterprise, and governed only by the traditional ideals of personal fitness for the rewards of a competitive order. The spirit underlying his resistance to special privilege based on a patent grant was in a direct line of descent from an earlier American epoch, when the small entrepreneurs of the Jacksonian epoch fought entrenched legal monopoly. It was in keeping with the social values of Populism and Progressivism, which stressed the claims of equalitarianism against the power of organized and accumulated wealth. Ford's role in the Selden patent case augured the individualist of later decades, whose renown flourishes wherever modern machine technology has taken root.

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IX

Argument and Decision

T

HE YEAR 1909 opened in a glow of optimism for the A.L.A.M. Its new emblem showed an eagle perched on an automobile wheel, clutching a laurel wreath. Confidence also prevailed in the unlicensed ranks, although hope was mixed with anxiety over the judge most likely to preside at the trial hearing. Since the central issues were questions of fact rather than law, the independents favored a judge who would take a fresh and critical view of the evidence. "I wish the case could be delayed a little," Parker wrote to Henry Ford on February 8. "There will be about 25 cases ahead of ours, maybe more. (I hope so). . . . This will bring our case about the middle of the May term before Judge Hough. Now Hough is said to be cranky & I know is not a patent Judge. It is probable that Judge Holt would take the next term after Hough—so I would prefer a little delay if we can have it." l His preference for Judge George C. Holt was understandable. In the De Dietrich Import case Holt had declined to accept the conventional judicial interpretation of the "pioneer" character of the Selden patent. While the refusal was tentative, it at least indicated that Holt would not adopt indiscriminately the opinions of the court in the Winton case and other preliminary skirmishes. The choice of a judge had wider implications. We have already noted the commonly held view that many jurists lacked proper training to cope with the technical questions raised in patent suits. More often than not, patent judges groped their way through unfamiliar realms of technological concepts and terminology. As Walton Hamilton has remarked, "In respect to novelty, the true inventor, the priority of claims, the modicum of originality essential to invention, or the line between the novelty and the established art, the jurist's art is not at its best." 2 Moreover, i97

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judges could be swayed by bold simplifications of recondite matters which strained their understanding. It was for such reasons that Parker desired a judge who was versed in patent causes and had displayed keen analytical powers. For a time it appeared that Hough would not take the case, but in the end it was he who sat as the presiding judge.

On Friday, May 28, 1909, Parker gathered with the other attorneys before Hough in the gloomy quarters of the old Post Office Building, whose weatherbeaten hulk, an architectural relic of the Grant era, towered on the southern margin of City Hall Park in Manhattan. William A. Redding, Samuel R. Betts, and Frederick P. Fish appeared for the Selden interests. The defendants were represented by Parker, Frederic R. Coudert, John P. Murray, and W. Benton Crisp, the last a New York attorney who had recently been brought into the case by the Ford Motor Company. Among the most attentive spectators were Henry Ford and Thomas B. Jeffery. The hearing occupied six days and terminated on June 4, the five cases being argued as one. The center of interest was Judge Charles Merrill Hough. Fifty-one years old, he had been on the federal bench only a short time. After his graduation from Dartmouth in 1879, he studied law in a Philadelphia office, and in 1884 moved to New York, where he joined the law firm of Biddle & Ward. Best known as an expert in admiralty law, Hough had often served as a proctor in important suits. In 1906 President Roosevelt named him a district judge for the Southern District of New York. He won an excellent reputation. Without fail, his decisions had been upheld by the appellate courts. Although plagued by delicate health and poor eyesight, Hough was an incredibly energetic judge. In his ten years on the lower court, before his appointment as a circuit judge in 1916, he filed more than 1,800 opinions and presided over 1,200 trials.3 Like most judges who sat in patent causes, he had less than a passing acquaintance with the background and terms of the art. He had a firm command of the rules and principles of patent 198

IX

Argument and Decision

law, but he knew nothing of automotive history and mechanical engineering. His was not a reflective mind. Hough had a propensity for plunging into the evidence and assaying it with terrific concentration. In his impatience to formulate a central and unifying principle, he sometimes tended to override concrete differences, a trait that impeded his careful weighing of all the relevant facts. To be sure, he admitted his limitations and attempted to surmount them. When Samuel R. Betts, who opened for the complainants, began with an exposition of Claim I of the Selden patent, Hough interrupted with disarming modesty: "Someone will have to explain to me what the liquid hydrocarbon gas engine is." 4 He signified his intention to read the entire record, but confessed that he was alarmed by its magnitude. Hough's judicial conduct was above reproach, yet during the hearing it became increasingly evident that precision of argument irritated him. This was of considerable advantage to the Selden lawyers, who knew they could win only on the premise of broad interpretation. It was perhaps meaningful that Hough broke into Parker's argument more often than he interrupted the presentations of other attorneys. Betts at once underscored the strategy of the Selden interests. "It is the basic, fundamental, pioneer patent," he said, "and I am not afraid to say it covers every commercial gasoline automobile that is run in this country, or anywhere else. That is my proposition. If it does not cover that, it is the most worthless proposition that was ever put on paper." "I can see that," commented Hough. "It is all or nothing." "Exactly," replied Betts. "If it is given the limitations that the defendants' experts put upon it, ... the patent, as they well know, is xvorthless. They will admit the Selden patent is a valid patent, limited to suit them. But the proposition of Selden as claimed broadly, illustrated, as he was required to do, an operative vehicle in that manner, but he was not obliged to illustrate every possible development of that type of vehicle." 5 Hough early accepted the argument of the Selden lawyers that the specific means of compression in the modern high-speed gasoline engine was of no importance. Admitting that he could not understand technical distinctions, Hough said: "All the disi99

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cussion as to differences of type of the various engines, if they are a liquid hydrocarbon gas engine of the compression type, would seem to me at present to be beside the issue." He added: "Refined arguments on differences of machines obscure the main issue." 8 Hough became exasperated when Parker insisted that the generic classification of all compression engines advanced by Clerk jumbled the Brayton and Otto engines in technological discord. "There is no state of the art prior to Selden," Belts had declared; and when Parker opened on June i, Hough brushed aside the argument that the Rosenwald patent of 1877 had anticipated the Selden structure. The Rosenwald device, said the court, was "a very engaging dream," but entirely impractical. "Now dreamers have great merit," continued Hough. "They frequently are prophets ... but I do not think prophets are generally entitled to a patent on their prophecy. Is the Selden patent anything more than a prophecy?" Hough apparently thought it was. "Now, if a man can see plainly what the future will bring forth and indicates the lines along which development is going to take place, and suggests, not a perfect, but a feasible line of bringing that result to pass, is not such a person entitled to a combination patent?" It is probable that Hough had already answered the question to his own satisfaction. Yet he made every attempt to be fair. He remarked: "I only wish to produce a meshing of arguments. It sometimes seems to me that each of you gentlemen has an argument machine that is going around merrily, but they are not meeting each other." 7 On the afternoon of June i, the New York-to-Seattle long distance automobile race began from City Hall Park, where Mayor George B. McClellan, Jr., fired the starting shot with a gold-plated revolver. As the drivers and mechanics idled the motors, Henry Ford left the courtroom to speed on the crews of the two Ford entries. Judge Hough and the attorneys stood at the windows, observing the event. Frederic R. Coudert, the Panhard lawyer, remarked with mock amazement: "Your Honor, there is something that puzzles me. I don't see a Selden car. I see a Ford car, two Ford cars, but I see no Selden car!" Hough joined in the general laughter. When William A. Redding began his oral argument the next soo

ix Argument and Decision

day, he said: "Every one of the automobiles entered in that race embodies the essential features of the Selden invention." "Every one has an Otto engine in it," rejoindered W. Benton Crisp. "Not an Otto engine," Redding countered, "but a re-organized Otto engine embodying the essential features invented by Selden to enable an Otto engine to be of light weight and small bulk and of high speed so as to be suitable for a road vehicle." Crisp and Parker demanded a precise explanation. "I am coming to that," said Redding. "Don't go too fast, Mr. Crisp, I can't get it all out at once." "I don't expect it," snapped Crisp. It was pointless, said Redding, to designate a compression engine as a Brayton or an Otto. The vital consideration was "an engine of the compression type of light weight and small bulk and of high speed, and no such engine was known prior to 1879." The Selden invention, he continued, had a "pioneer character" and was entitled to a broad and liberal construction.8 In his closing argument for the defendants on June 4, Frederic R. Coudert said that a victory for the Selden interests would be "hopelessly unjust." His clients, Panhard & Levassor, had built salable automobiles well before the disclosure of the Selden patent. It would be immoral, and contrary to the public interest, if Selden were permitted to monopolize an art and an industry to which his patent had contributed nothing. Selden had no right to exact tribute from pioneers who had dedicated "all their time not to the practice of law and the preparation of patent claims, but to the development and perfection of the automobile." 9 The summation for the complainants was given by the eloquent and persuasive Frederick P. Fish. A Boston attorney who specialized in corporation and patent law, Fish had represented the Bell Telephone Company when the Berliner patent case was argued before the Supreme Court. In 1901 he became president of the American Telephone and Telegraph Company, but returned to his law practice in 1907. Fish was general counsel of the United Shoe Machinery Company, one of the largest patentholding empires in the country. His oral argument in the Selden case was marked with a charm 2OI

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rare in the presentations o£ patent lawyers. Fish pressed for an application of the judicial literalism which had characterized the decision in the Bell case. The amendments submitted by Selden, he maintained, showed no departure from the original claims. "In this Selden case the thing disclosed and sought to be patented remained identically the same from the beginning," said Fish. He portrayed Selden as a bold thinker who had broken away from tradition and contributed a fresh insight rather than a specific construction. "It was not the work for a mechanic," declared Fish. "A poet might have done it." The changes made by Selden to bring his patent abreast of the four-cycle engine were "trivial" and "of no consequence." Should a new concept be confined to the form it assumed at birth, creative imagination would be shackled. "We stand or fall on our claims as drawn," Fish concluded, "and it is a plain case of giving to the words of the claims exactly their natural and necessary meaning." 10 The hearing did not end before Judge Hough and the attorneys voiced their dissatisfaction over the manner in which the Selden case had dragged through the court. "The procedure in patent cases is, as your Honor knows," said Fish, "the curse of the patent law, to patentees, to patent owners and to the community." "Why don't you gentlemen try to reform it?" challenged Hough. "It needs to be reformed," replied Fish, "and if anyone will give me an inspiration and the power I would devote my life to reforming it." u Better than they knew, the Selden case was to provide much of the "inspiration" for needed procedural reforms. 2

The massive record was sent to Hough's summer home in Rhode Island, where the judge devoted his vacation to the arduous task of applying the law to as wide and complex a range of facts as ever confronted a patent judge. In hacking his way through the maze of evidence, Hough relied chiefly upon the single brief filed by the Selden attorneys. This brief, running to less than two hundred pages, stressed fundamental issues and was equipped with excellent drawings, an elaborate index, and a glossary of terms. In contrast, the three briefs submitted by 2O2

ix Argument and Decision

the Ford and Panhard attorneys covered altogether more than 1,300 pages. The Selden brie£ was reared on the foundation of the pioneer character of the patent. Selden was lauded as an inventor of "great ingenuity." The stature of his claims was enlarged by projection against the background of a prior art limned as a succession of failures, and his achievement before 1879 was magnified thus: We have already pointed out in connection with the early work done by Mr. Selden that before the Selden application was filed the patentee commenced the construction of the vehicle patented, and completed the same, so far as the engine was concerned, so that it could be operated and tested. . . . The inventor did not file his application without having assured himself that the device was operative. He first determined the amount of tractive effort necessary to propel a road carriage; invented a rubber tire and traction device to insure the desired traction; designed, built and operated the engine for propelling the vehicle, and determined that it could be built so as to combine the two requisites, power and light weight, and then filed his application.12

The poor performance of the Rochester-Selden buggy compelled the A.L.A.M. attorneys to cite the Hartford-Selden vehicle as proof of operativeness. They termed Exhibit 157 a "Chinese copy" of the patent, merely noting that the parts of the HartfordSelden car were "new" and therefore more durable than the original components of Exhibit 89. The Ford and Panhard attorneys had demonstrated that Exhibit 157 had the advantages of automotive construction and practice evolved after Selden filed his application. The Selden lawyers leaned on the argument that the pioneer status of the patent entitled it to a wide range of mechanical equivalents. Asserting that the Ford-Lenoir car had "little or no relevancy except to show the advantage of compression over non-compression," they consigned the Lenoir vehicle of 1860 to the annals of failure in the art. The A.L.A.M. lawyers, noting that the Selden amendments had the full agreement of the Patent Office, insisted that the patent was a contract. "The large interests which might be adversely affected by a decision sustaining the patent should not be considered in giving to the inventor that to which he is legally entitled," they observed. "The contract is between the Government and the inventor, and the defendant infringers are not its proper 20J

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interpreters or entitled to benefits of interpretation." 13 No plea for judicial literalism could be stronger. The Parker brief was a ponderous treatise so swollen with documentation that the main lines of reasoning were engulfed in a viscid mass. Parker was at his best in the opening sections. In rapid review he covered the suppression of the Winton evidence, the false claims of the A.L.A.M. to judicial validation and public acquiescence, the hampering tactics the opposition had used to delay a trial hearing, the testing of exhibits without prior notice to the defendants, and the contradictory testimony of Bentley, Clerk, and Gibson. After launching into these preliminaries, Parker unfortunately blunted his argument under the grinding weight of inessential matter. His overlong disquisition on the prior art was a dry textbook on the development of heat engines and steam-powered road vehicles. It is probable that Hough, if he read these pages, dismissed them as a wilderness of extraneous detail. Occasionally the argument extricated itself from the bog of minutiae and regained its cogency. Parker cited a set of patents issued before 1879 that disclosed combinations similar to the Selden structure in every necessary element except the compression internal combustion engine. He described the French patent taken out by Savalle in 1867 and modified in 1869, tracing the line of development to the Rosenwald and Menn patents of 1877. Parker also listed British patents granted during the same period and asserted that one of them, the Hilton & Johnson patent of 1878, provided for the use of all "petroleum or other like motors" in a combination much like Selden's. In surveying applications of the Brayton motor to self-propelled boats, streetcars, and omnibuses, Parker was handicapped by tactual evidence that these experiments with heavy engines had been unsuccessful. Yet a judge who viewed these efforts as evolutionary developments might conceivably construe them as diminishing the Selden claim to a pioneer role. Parker was on less speculative ground when he suggested that technical complexities might be set aside if the court concentrated upon the substantial differences among the various types of internal combustion engines. Challenging the broad classification formulated by Dugald Clerk, Parker approached the heart of his case. 204

ix Argument and Decision It is sufficient legally to know that there were several different kinds or types of well-known motors or prime movers, without details, so long as it appears that Mr. Selden restricted himself to one of these types of motors, that all he did was merely to select that one which seemed to him, on the whole, to be best suited for the purpose of driving his road carriage, best adapted to modifications of its structure, in respect to its capacity and efficiency compared with its weight, and also with regard to certain other conveniences; i.e., that he selected an engine which necessarily used liquid hydrocarbon fuel, instead of an engine necessarily using gas fuel.14

Parker also dealt effectively with the testimony o£ Clerk and Bentley, pointing to serious inconsistencies as he made his central argument that Claim I of the Selden patent was void because it substituted one class of internal combustion motor for another without producing a new result. This was directly linked to Clerk's admission that the Selden claim might be laid open to re-examination if it could be demonstrated that a non-compression engine could successfully power a road carriage. The FordLenoir car had shown that a non-compression motor could be adapted to this purpose. Did it not follow that Selden had not been the first to convert a gasoline engine to automotive use? Parker illuminated the radical differences between the Brayton constant pressure engine of Exhibit 89 and the Otto constant volume motor of the Ford passenger car, noting that the Selden lawyers ignored these variations by taking cover in a liberal construction of the patent. "They must show," he said, "that the scope of the claim is broad enough to render all these differences immaterial." 15 The sprawling brief would have gained in forcefulness had Parker swept away the dusty lumber which cluttered up his argument and directed a sharp beam upon the basic character of the Selden patent. The presentation would have been more convincing had Parker stressed two defenses: first, that the Selden structure represented merely the substitution of one motive power for another in a well-known combination and, as such, was not patentable; and, second, that the scope of the patent was restricted to a vehicle incorporating the specific motor selected by Selden and hence was not infringed by the defendants. These arguments, submerged in the welter of the brief, were lost upon a judge who probed for fundamental issues. Judge Hough filed his opinion on September 15, igog.16 With 205

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few and minor qualifications, he accepted the argument of the Selden lawyers. Hough affirmed the comprehensive scope of the patent and accorded Selden formal recognition as the inventor of the gasoline automobile. His exhaustive opinion was based on the view that Selden's concept, as set forth in the original application, constituted an invention that was a clearly novel departure in the art. The consistently broad construction which Hough lent to the patent gave Selden, as the ranking pioneer in the automotive art, the benefit of a broad range of equivalents. To make this beginning, Hough adopted an erroneous perspective that did violence to historical reality. He ignored the evolutionary character of the mechanized road vehicle and treated the Selden claims as a cataclysmic development in the history of this branch of invention. Hough noted at the outset that counsel for all parties to the suit agreed that the Selden claims covered a combination. He stressed the fact that, unlike Whitney or Howe, Selden made no pretense to having invented a new mechanical device. All of the elements of his structure were known in the prior art. Selden laid claim to a combination reorganizing these elements "into a harmonious whole capable of results never before achieved, and of an importance best measured by the asserted fact, that after 30 years no gasoline motor car has been produced that does not depend for success on a selection and organization of parts, identical with or equivalent to that made by him in 1879." The defendants rested their case on a denial of this assertion; they held that their combinations differed from Selden's, "being neither identical nor equivalent." However, Hough continued, "the very grant of the patent raises a presumption in favor of the complainants," and he cited the Coxe decision in the Winton case as additional support for the validity of the patent. Hough now approached the state of the art in 1879. He observed that the testimony and arguments of the defendants had ranged over an unduly wide field, especially on the subject of steam-propelled carriages, and had laid inordinate emphasis on "matters of little moment," such as the Savalle and Rosenwald patents. He dismissed the Lenoir vehicle of 1860 with the comment that its non-compression motor proved "nothing that relates to the form of engine to be considered in this litiga206

ix Argument and Decision

tion. . . ." It was fitting to take a broad view: What was the state of the horseless carriage industry, in the United States or elsewhere, when Selden filed his application in 1879? "The answer given by the evidence is entirely plain; there was no such industry, the art existed only in talk and hope, no vehicles even faintly fulfilling the requirements above outlined had ever been built, and there is no competent and persuasive evidence that any experiment had ever moved a hundred feet, or revealed an organization warranting the expectation that it would ever do so." This was a bold oversimplification. Certainly it would have been untenable if the defendants had brought forward evidence on the Marcus automobile. Yet even in the absence of such testimony, the operativeness of the Ford-Lenoir car disproved Hough's underlying assumption. Had Hough extended to the Lenoir vehicle of 1862 the range of mechanical equivalents he bestowed on the Selden patent, his basic proposition would have crumbled. The effectiveness of a non-compression motor in an automotive combination built almost twenty years before Selden filed his application demonstrated that the prior art had evolved the fundamental design of the motor vehicle. But Hough clung to the "heroic theory" of invention. The Ford-Lenoir car was relegated to a footnote: "To me it is interesting but irrelevant. Mr. Clerk did intimate that he doubted whether any vehicle with a non-compression engine could move at all. [This diluted Clerk's reservations; actually, they had been put strongly, with implications that cast serious doubts on the pioneer character of the Selden claims.] Mr. Ford has shown that he was mistaken. By making the engine four times the size of Ford's compression type, there is obtained about one-seventh of the power. It hardly seems that the pleasure of contradicting Clerk was worth so much trouble." The "missing element" in the solution of the crucial problem in 1879 was the engine, said Hough; and on this point he accepted Clerk's testimony in its entirety. The three principal engines available in the art in 1879—the Brayton, the Otto 8c Langen, and the four-cycle Otto—were viewed as basically alike, Hough insisting that an "undeserved importance" had been attached to the difference between constant pressure and constant volume motors. It was of little importance that an engine 207

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had external or internal compression, or that it operated according to the two-cycle or four-cycle principle, for such features were "no more significant of specific or generic differences than are variations in rapidity of breath in different men, or in the same man at different times." Hough concluded that in 1879 the way was open "for any one who would really produce the thing described in Selden's first claim." He went on to the inevitable pronouncement: "Success is never anticipated by any number of failures, and when it is clearly kept in mind that what Selden claims is a combination, and not any one of its elements, the defendants' references to prior patents and publications may be thus finally disposed of so far as this court is concerned." The combination described in the original Selden application embodied an act of invention, the first to bridge the gap between the heavy steam carriage and the light gasoline vehicle; and Selden had "devised and used an arrangement of Brayton's engine never before attempted, one that Brayton himself never suggested, made or patented, and without which the road vehicle was an impossibility." Was the scope of the patent restricted to the particular engine described in the drawings and specification? Hough reiterated that all gas engines belonged to a single class whose broad character was paramount to internal differentiations of any consequence. He held that the Selden patent, as a pioneer concept, was entitled to a wide range of equivalents, which gave Selden the right to use devices, such as timed electric ignition, that had not been indicated in his patent. It followed that every automotive combination using an engine of the liquid hydrocarbon compression type was covered by the Selden claims. Hough found that Exhibit 157 met the test of operability. While it was not a "Chinese reproduction" of the Selden patent, its mechanical departures were unimportant in light of the range of equivalents. As for the specific capabilities of Exhibit 157, he said, "it is a wretchedly poor car for 1905, there were probably as good, if not better cars in 1895, but it is a marvel of invention for 1879,—and that is more than enough for the purposes of these cases." He made no comment on the performance of Exhibit 89. Hough admitted that "Selden has contributed little to motor 20*

ix Argument and Decision

car advancement in the United States and nothing at all abroad." With an eye on Selden's "very leisurely" delays in the Patent Office, he remarked: In short, this American patent represents to me a great idea, conceived in 1879, which lay absolutely fallow until 1895, was until then concealed in a file wrapper, and is now demanding tribute from later independent inventors (for the most part foreign) who more promptly and far more successfully reduced their ideas to practice. But the patent speaks from the date of its issue, and unless Selden did something unlawful during his sixteen years' wrangle with Examiners, or unless intervening American rights, available to defendants, sprang up while Selden was rewording claims,—he is within the law, and his rights are the same as those of the promptest applicant.

The circumstances attending the long sojourn of the Selden application in the Patent Office did not affect Hough's conclusions. He conceded that the grant, if issued promptly, would have had no exploitative value. "The difference he may well have considered as a lawyer, and personally I believe he did think of it." Hough acknowledged the singular character of the proceedings: No litigation closely resembling these cases has been shown to the court, and no instance is known to me of an idea being buried in the patent office until the world caught up and passed it, and then embodied in a patent only useful for tribute. But patents are granted for inventions, the inventor may use his discovery or he may not, but no one else can use it for seventeen years. That seventeen years begins whenever the United States so decrees by its patent grant. That the applicant for patent rights acquiesces in delay, or even desires delay, is immaterial to the Courts so long as the statute law is not violated. On these principles complainants are entitled to a decree.

Thus the finding of the court, which Motor World termed "by far the most momentous and vital decision ever affecting the automobile industry,"17 vindicated the position of the A.L.A.M. No gasoline car could be made, sold or used in the United States without infringing the Selden patent. Most reactions to the Hough decision were unfavorable. Some reasoned that the extreme application of the rule of equivalents posed a serious threat to the development of a free technology. But the legal considerations, as Horseless Age recognized, were secondary to the "question of commercial control of the gasoline 2

°9

Monopoly on Wheels

automobile business." 18 The A.L.A.M. could now brandish injunctions at all independent makers to compel payment of royalties. If the patent ran its full term, the total royalties would amount to about $5,000,000—a sum covering an aggregate value of production far exceeding that controlled "by any other patent during a corresponding period." Opinion in the Ford ranks was epitomized by Gaston Plantiff, the New York sales manager. "For the life of me I can't understand how a judge could ever hand down any such decision," he wrote to Henry Ford. It was incredible and preposterous for "a judge of the United States to get up and render a decision of this sort on a fake piece of junk which Selden had. . . ." 19 The unlicensed ranks held firm. "The automobile trade in Detroit," reported the Detroit Journal, "say that it is not believed that the Selden patents [sic] will be upheld in the higher courts, and that some of the best patent lawyers in the country have given opinions against them." 20 The war went on. 3

To the A.L.A.M., still dogged by the collapse of the Electric Vehicle Company and Durant's refusal to pay royalties, the decision brought fresh heart. It is probable that some of the licensed makers secretly hoped for the overthrow of the Selden patent; but the ineluctable fact of judicial validation scotched the further development of internal opposition. Yet it could not wither private skepticism about the intrinsic worth of the patent. Hiram P. Maxim was dumbfounded when Hermann F. Cuntz dashed into Maxim's office with news of the decision. No less astonished was Frederic L. Smith, who long afterward mused: "By what miracle that flimsy patent was ever sustained in the lower court I know not." Smith, one of the chief architects of the A.L.A.M., could let his conscience rest. He was no longer in the industry. His Olds firm, after being outlawed by the licensed association, was acquired by Durant toward the close of 1908. Continuing to defy the A.L.A.M., Durant had meanwhile built the automotive empire of General Motors. He purchased the Welch, Rainier, Cadillac, Oakland, and Reliance companies. The royalties due on their output gave him additional incentive for no

IX Argument and Decision

withholding Selden payments. After the A.L.A.M. brought suit against the Buick Company, Durant counterattacked with suits against four licensed firms, charging that the Selden group was a conspiracy in restraint of trade. Durant's resistance broke under the impact of the Hough decision. In October, 1909, he made his peace with the A.L.A.M., paying a reported $1,000,000 in back royalties. "A part of this immense sum, it is understood," said the Detroit News, "will return to General Motors in the form of dividends paid by the A.L.A.M. to licensed members of the corporation." 21 The Olds Motor Works was readmitted to membership; to complete the bargain, the suit against the Buick Company was withdrawn. Durant's return buttressed the damaged prestige of the Selden forces. In advertisements published by the Selden Motor Vehicle Company, George B. Selden dubbed himself "father" of the automobile, appropriating the title generally credited to Gottlieb Daimler. "Of course you know that every automobile in the world is but an adoption of the Selden idea," the public was told. "Selden invented the automobile. . . . Naturally Selden knows more about building automobiles than others that are simply following out his principle." 22 The A.L.A.M. cautioned the trade. "Every American automobile manufacturer was warned years ago not to infringe upon the Selden patent," said Alexander Winton. "The patent has withstood the assault of the ablest legal talent on this continent; it emerges from the court triumphant, and nothing now remains but to exact from the trespassers a share of that income which they have enjoyed for years without legal right and in utter defiance of the American law which rewards inventive genius with letters patent." 23 Within the A.L.A.M., sentiment was divided on the question of admitting the independents. Some members, notably Herbert H. Franklin, favored a policy of strict exclusion to prevent overproduction of low-priced cars. Others, among them Hayden Eames, a former officer of the Electric Vehicle Company who was now manager of the Studebaker Automobile Company, counseled the "exercise of broad-gauge liberality," probably with the thought of encouraging a settlement with Ford. The A.L.A.M. executive committee was prepared to offer concessions to the major unlicensed 277

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firms. It suggested they would be welcomed into an alliance to "preserve a great industry from attack by the riff-raff of modern commerce." 24 Ford refused to compromise. No sooner had the court rendered its decision than Ford sent telegrams to his dealers and to editors: "Selden suit decision has no effect on Ford policy. We will fight to a finish." Some accounts hold that Ford fell prey to weariness and discouragement. "It seemed like the end," said a company spokesman years later. Indeed, the company almost changed hands in the autumn of 1909, when Ford and Couzens were prepared to sell it to Durant for $8,000,000. On October 26 the board of directors of General Motors approved Durant's scheme to acquire the company, but negotiations were cut short when bankers refused to advance the cash. "We have changed our minds," the financiers told Durant. "The Ford business is not worth that much money." 25 If Ford seriously considered selling the company, it was perhaps with the thought of retiring from the industry until the Selden cloud lifted. He could have done so without risking personal liability under the patent. But Ford never came to the point of direct negotiations for a settlement with the A.L.A.M. When it was reported that the Ford Motor Company had received inducements to join the licensed association, Couzens replied: "No proposition is under consideration or has been made." 26 Meanwhile, the Ford directors took steps for carrying the case on appeal. Parker was not confident that the appeal could be entrusted to W. Benton Crisp. "I don't think Mr. C. is quite the right man for that under the circumstances, & I don't pretend to be." Parker assured Ford that it was "the consensus of opinion among pat. men that Hough did not do himself any credit & that the decision can and will be reversed." 27 Parker suggested the name of Edmund S. Wetmore, of the firm of Wetmore & Jenner, a New York patent attorney of high standing. In February, 1910, the company retained Wetmore, together with Livingston Gifford, of the New York firm of Gifford & Bull. It was stipulated that Parker and Crisp would assist the chief defense lawyers. Charles K. Offield, a Chicago patent attorney who had represented Jeffery against the Pope bicycle interests, was also brought into the case. Parker's role in the case diminished sharply after the Hough 2/2

ix Argument and Decision

decision. Parker himself felt that a polished Easterner was better qualified to conduct the appeal, but there were other reasons. He was now sixty-seven years old, and his strength had been taxed by the arduous labor of six years devoted solely to the Selden case. The recent death of a daughter, and other personal concerns, added to the burden. "He was a tired man in 1909," recalls Parker's son, and another member of his family states that "he had to let down a bit." 2S Parker had made his contribution. In other hands, the facts and arguments in his massive and overelaborate brief might be presented to the appellate court with skill and concision. 4

Abandoning its policy of strict exclusion, which had failed to deter free entry into the industry, the A.L.A.M. initiated its "broad policy" in October, 1909. The Selden patent was due to expire in three years. If the A.L.A.M. could win over the more important independent makers, it would be assured of a golden flood of royalty payments in the time that remained. Several members of the A.M.C.M.A. entered the licensed ranks; one surrender touched off another; and within a few months mass defections among the independents sealed the doom of the antiSelden group. The rout began when Charles Clifton, president of the A.L.A.M. induced seven of the leading independents to apply for full membership, offering them in return a voice in policy matters and the benefits of curtailed competition. Refusal of this invitation, he warned, would bring stern legal action. Within a short; time, these independent firms—Maxwell-Briscoe, Reo, Premier, Mitchell, Stoddard-Dayton, Regal and Jackson—received Selden licenses. They were soon joined by the Willys-Overland Automobile Company, and seven more independents deserted the A.M.C.M.A. before the year was out. Each of the newcomers to the A.L.A.M. paid an initiation fee of $2,500, as well as back royalties on all cars sold by the maker since igog.29 Applications rained upon the A.L.A.M., but not all were granted. Companies organized after the Hough decision were denied licenses. For the first time since its founding, the A.L.A.M. 213

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imposed restrictive licensing. For example, it decreed the types of vehicles a firm might produce. Some makers were confined to the manufacture of trucks, others to designated models of passenger cars. Firms licensed at the beginning of 1910 were compelled to limit their production to a specified annual volume; nor could they revise their list prices without the consent of the A.L.A.M. Many of these restrictions did not apply to companies holding full membership in the licensed association.30 The A.L.A.M. consolidated its victory by winning over Alfred Reeves, the executive head of the A.M.C.M.A., who in January, 1910, became general manager of the Selden forces. A month later the A.L.A.M. announced that it had seventy-two licensees. About half this number had been admitted since the Hough decision. On February 8, 1910, the A.M.C.M.A. was disbanded at Chicago, xvhere it had been organized in 1905. The independent group had been chartered to operate for five years, and its life might have been renewed except for wholesale desertions. Of its fortythree members, thirty were now in the A.L.A.M. A surplus of $60,000 was distributed among the A.M.C.M.A. members, regardless of affiliation with the Selden group.31 A few days after the dissolution of the A.M.C.M.A., its official handbook, Leading American Cars, furnishing details of unlicensed models for 1910, was distributed to independent dealers. This was the last gasp of the A.M.C.M.A. as a trade association. No organized body of independents filled its place. Meanwhile, the A.L.A.M. continued to expand its following. By March, 1910, it had seventy-nine licensees, and did not close its doors until eighty-four companies were listed on its roster. To the mass exodus of the independents there might have been added a more serious defection had it not been for the timely action of Frederic R. Coudert. In the fall of 1909, as the unlicensed manufacturers began their march into the Selden ranks, Coudert learned that his clients, Panhard & Levassor, were again planning to call a retreat. The case, they told Coudert, had been protracted and costly. Furthermore, they did not believe that the relatively small American trade in foreign cars justified their continued opposition. Coudert cabled his French clients: "Wait until I come over." 214

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Reaching Paris, he conferred with Panhard and Neubauer officials. The decision, said Coudert, could be reversed. Final judgment would enhance the prestige of the French independents and save them from the exaction of tribute. Still the Frenchmen were skeptical. Coudert then made an astonishing offer. "I have confidence that we can win, gentlemen, and I will show you that I have it," he declared. "If you will make the appeal, and pay the routine costs of printing—I cannot legally do that myself—I will charge you nothing for my services in case I lose." The offer was accepted.32 Had Coudert failed to bring about this dramatic reversal, the position of the Ford Motor Company before the courts would have been gravely weakened. Ford still had his French allies, and the moral support of a handful of unorganized American independents. Ford had opened the fight unaided; if necessary, he would finish it alone. The Hough decision was neither final nor conclusive, he said, and it would not alter the course of the company. Ford was unequivocal on two points: he would continue to produce motor cars to the limit of his capacity; he would resist all overtures and threats from the Selden camp. To protect his customers against suits, damages or losses, Ford posted bonds through the National Surety Company. "The bond is ready," the company announced in March, 1910. "It represents $12,000,000 worth of protection and is yours for the asking." Requests came from less than fifty purchasers. Even at the risk of exhausting $6,000,000 in Ford assets and $6,000,000 belonging to the bonding agency, said Ford, he would never compromise with the A.L.A.M. "The buyers of Ford cars shall not be intimidated," he declared. "There will be no letup in the legal fight, and I expect that ultimately the supreme court of the United States will hold that the Selden basic patent is not valid." 33 Such unslackened determination magnified Ford's stature as a single-handed opponent of the "trust." In a perfervid editorial, "Ford, the Fighter," the Detroit Free Press hailed his courage. "Ford the Fighter—salute!" The Free Press lauded him for having waged a struggle that was "make or break, win or lose, survive or perish, that shows the real stuff. . . . As a fighter he is certainly equal to his weight in wildcats. . . . Of the cause behind him, the lawyers are more able to talk, but as a human 2/5

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figure he presents a spectacle to win the applause of all men with red blood; for this the world dearly loves the fighting man, and needs him, too, if we are to go forward." 34 The Ford dealers also refused to admit defeat. Newton H. Davis, a Ford agent in La Rue, Ohio, who also handled other unlicensed cars, received cajoling letters from the regional sales manager of the Jackson Automobile Company, which had been one of the first to abandon the A.M.C.M.A. The Jackson representative assured Davis that the A.L.A.M., as a regulator of competition, was a salutary influence. The Ford dealer replied: Your second warning letter received. It is clear to me now that your company has shown the white feather, and it is the policy of the A.L.A.M. to shut out competition, and especially to force the Ford Motor Co. out of business. I am sorry to see things as they are or as the A.L.A.M. thinks they will be, but as you have taken the liberty to advise us two times since that there is h—1 in camp, I humbly beg to advise you that there is one small dealer down in central Ohio that is going to continue to travel the bridge that has safely carried him over. When I signed up with the Ford Motor Co., they had no objections to me handling your line, and now that you have joined the "Trust" you seem to be after a company that never in any way laid a straw in your path, but continued the policy of building light cars to meet the wants of thousands of people that could not afford a car such as the A.L.A.M. would design. I am not alarmed about the finish. I am of the "opinion" that Ford will be building cars when the "Trust" will be out of business, but "IF IT WORKS OUT THE WAY IT IS FIGURED," I go out with them. Whenever flowers are in order I will humbly accept a wreath for my Ford sign, but until that time I am going to continue along the lines of my present contract with the Ford Motor Co.35

5 The last phase of the Selden patent war opened in February, 1910, when the A.L.A.M. resumed its publicity campaign in the New York and Chicago press.36 "This Advertisement is Published for the Protection of Automobile Buyers," trumpeted the Selden forces. "No Bond is Required when you buy a Licensed Motor Car bearing this official plate." The patent, it assured readers, was "recognized by nearly all reputable automobile manufac216

ix Argument and Decision

turers," and had been declared valid by a federal court. "It is clearly the duty of every law-abiding American citizen to respect the exclusive rights secured by the patent, as it is a duty to respect any other valid patent, and to co-operate in upholding it, as it secures to the owner and licensees under it exclusive rights authorized by the Constitution of the United States and by law." The members of the A.L.A.M. had been "chiefly responsible for the development of the automobile to its present perfected state." The text closed: "This Announcement Is Made So That Buyers of Automobiles May Know The Facts and Be Governed Accordingly." The advertisement listed the seventy domestic man ufacturers and the two importers then comprising the membership of the A.L.A.M. Ford immediately met the challenge with counter-statements spread upon the pages of newspapers and automotive trade journals throughout the country. Many of the Ford advertisements were inserted opposite the Selden announcements and parodied them: "This Advertisement is Published for the Protection of Automobile Buyers by the Ford Motor Company, Detroit, U.S.A." The A.L.A.M. warnings, said Ford, merely echoed the threats which the "cabal" had published to frighten off prospective purchasers in 1903. There are many reasons why anyone should NOT buy a car licensed under the Selden Patent, because by doing so trust methods are encouraged, the evolution of the industry curtailed, and the maintenance of high-priced and poor quality cars assisted, because it is obvious that a protected monopoly does not try to please the public by producing better goods by more economical means. Who has constituted this "Divine Body" to tell the public the names of manufacturers who market honest or dishonest cars? Who will say that FORD cars are dishonest after all they have done to promote the advancement of the industry? In this connection we were speaking to one of the prominent Licensed members the other day, and during the conversation he stated that without doubt HENRY FORD had done more, in building and marketing his low-priced machines, to advance the industry than any dozen other manufacturers in the business. It is a safe bet that the car will be honest as long as the manufacturer pays his dues to this "Divine Body." And would this same body design to pronounce the FORD car dishonest in the face of what it has done for the development of the entire motor car industry? Would the FORD be a dishonest car if FORD would join the "72" varieties? 2/7

Monopoly on Wheels Our opinion and our position, taken from the beginning, is unshaken—that this Selden Patent is a freak among alleged inventions and is worthless as a patent and worthless as a device.

Castigating the Selden group for harassing innocent purchasers, the Ford advertisement termed the business methods of the A.L.A.M. reprehensible. It assured the public that no court decree had been entered against the sale or use of the Ford automobile. "The Lower Court Decision is far from final. It is only the first round of a patent battle. There remain the Court of Appeals, and then the Supreme Court, to both of which we can, and, if necessary, will, carry the case." Ford charged that the "Divine Executive Committee" refused to place its "blessing" upon unlicensed manufacturers unless the A.L.A.M. secured a pledge that prices would be advanced and production limited. Offering a purchaser's bond to any Ford owner who asked for protection, the advertisement closed: "N.B.—This fight is not being waged by the Ford Motor Company without the advice and counsel of the ablest patent attorneys of the East and West." 37 Soon after the advertising war broke out, Alfred Reeves arrived in Detroit to conduct an "educational campaign" for the Selden association. "The A.L.A.M. wants it understood that the keynote of its policy is the protection of the automobile industry," said Reeves. "The industry has reached a stage where precautionary measures are necessary. Men are starting factories on blueprints and nerve. They will never be able to meet the demands made upon them and it is only right that the public should be protected. . . . The pioneers in the industry have a right to protect themselves against what may be termed 'wildcat' companies which are springing up like mushrooms." Ford, however, commanded the respect of the A.L.A.M. "There will be no cut-throat methods employed toward him," continued Reeves. "He is recognized as one of the pioneers and the association only desires that he enter the A.L.A.M. The matter between Ford and ourselves is being fought out in the courts." 3S Joining the "educational campaign," Charles Clifton assured the public that the licensed builders "should be fully able to care for the demand for motor cars." Ford rejoindered that industrial and commercial growth hinged upon the preservation of free enterprise in its purest form. "It is said that everyone has 218

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his price," said Ford, "but I can assure you that while I am head of the Ford Motor Co., there will be no price that would induce me to permit my name to be added to those of the 72 varieties." 89 The propaganda disseminated by the A.L.A.M. provoked the resentment of many motorists. W. H. Schilder, the former owner of an automobile agency in Chillicothe, Ohio, dispatched a reply to the licensed association that was published by the Ford Times under the title, "This is certainly A LAM." Your circulars relative to the Selden patent received. The writer is no longer engaged in the sale of automobiles, but soon hopes to be the fortunate owner of a Ford (which I believe you call unlicensed), in my opinion the best automobile in America for all kinds of service, regardless of price. It seems to me that some of you licensed (or trust) manufacturers must be of the same opinion, or else you would not have the "Gall" to put in circulation some of the literature with which you are trying to "bluff" the buying public. When I purchase my Ford car, I don't want Mr. Ford or anyone else to give me an indemnifying bond to operate the same, as I feel that the Supreme Court of the United States will quickly see the injustice of your claim, and award to Mr. Ford such a verdict as will forever close the mouths of a lot of jealous minded manufacturers who are unable to compete with him in both price and quality.40

Meanwhile, the war in the courts flared up along a wider front. Failing to woo some of the prominent independent makers into the Selden group, the A.L.A.M. lodged infringement suits against eight of the Detroit recalcitrants on April 14, 1910. Named among the defendants were the Abbott, Anhut, Carhartt, Case-Detroit, Demotcar, Owen, Warren, and Paige-Detroit campanies. Similar actions were filed against five firms elsewhere, including the Velie Motor Car Company, of Moline, Illinois; the Parry Car Company, of Indianapolis; and the Imperial Automobile Company, of Jackson, Michigan. These independents announced they would contest the suits. The Warren Motor Car Company, which filed an answer charging the A.L.A.M. with conspiracy to control the automobile industry, declared: "We are not paying tribute to anybody's obsolete methods of motor car construction." The Abbott Company pledged "a bond to every purchaser against any molestation whatever from the ring behind the Selden patent." 41 The Carhartt Automobile Corporation exposed some of the 219

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devious practices of the licensed association. Before the commencement of the suit, the Carhartt firm had been assured that it would receive a Selden license. It confidently made a large investment in plant, equipment and materials. Carhartt was then curtly informed that no license would be granted. Left with heavy inventories of parts and raw materials, the company faced bankruptcy if it chose to suspend activity until the expiration of the Selden patent.42 One of the defendants, the Velie Motor Car Company, unexpectedly seized the offensive against the A.L.A.M., bringing suit against fifty-four Selden licensees in the federal district court at Milwaukee. Charging that the A.L.A.M. was an illegal combination in restraint of trade, Velie demanded $500,000 in damages. Velie also filed suits under the antitrust statutes of Wisconsin against twenty-six of the licensed firms with agencies in that state. It asserted that the offer of a Selden franchise was made conditional upon the payment of $17,000 in fees and back royalties, and the restriction of its output to 2,500 cars in 1910 and 2,000 in 1911. It also charged that the A.L.A.M. had instigated a boycott by advertising agencies against the Velie account.43 The A.L.A.M. filed another series of suits in September, 1910. The defendants included fifteen importers of automobiles and one domestic maker of a foreign model, the Fiat Automobile Company, of Poughkeepsie, New York. Among the importers were agents for English cars (Hotchkiss and English Daimler), Italian cars (Isotta and Italia), German cars (Benz, Zust, and Saurer), and French cars (Darracq, Delahaye, and Mercedes). The scope of these actions indicated that the Selden interests intended to exclude all unlicensed foreign automobiles.44 All of these suits were timed to converge upon the appellate court hearings of the Ford and Panhard cases in late 1910. The appeals could have been filed earlier except for the delays caused by the legal complications of transferring the title in the Selden patent from the defunct Electric Vehicle Company to its successor, the Columbia Motor Car Company. This firm, which had been established in June, 1909, became a unit of the United States Motor Company, a combine organized in January, 1910, by the New York financier, Anthony N. Brady. Under the merger agreement, the Columbia share of net profits from Selden royal220

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ties was paid to Brady and other former stockholders of the Electric Vehicle Company, including Thomas F. Ryan and the William C. Whitney estate. Actual control of the patent was retained by the A.L.A.M.45 Also delayed by wrangling was the hearing on the application for the entry of decrees. It was not held until July, 1910, when Judge Hough interrupted his summer vacation and conducted a special sitting at Narragansett Pier, Rhode Island. The A.L.A.M. attorneys asked for a perpetual injunction and an accounting for damages and recoverable profits. "When the Ford company started," said Samuel R. Betts, "it was a small concern. It has advertised this suit and has held itself up as an opponent to monopoly, thereby extending the business enormously. Its business has been built up in defiance of the patent rights. . . . The company has never had the right to build a single car." The Ford attorneys, Crisp and Wetmore, asked Hough to omit an injunction from the decree. All that was necessary, they insisted, was a bond covering damages and profits in the event the appellate court sustained the decision. In an interlocutory decree filed on August 11, Hough entered perpetual injunctions against the Wanamaker, Gude, and Neubauer firms, but suspended the injunction against the two chief defendants. He fixed the bond at $350,000 for Ford and $16,000 for Panhard & Levassor. "It will be no more to us than paying our water bill," commented James Couzens. "In the meantime, the Ford Motor Company will keep right on turning out cars." 46 The decree left barely a ripple in the industry, but one observer noted that the approaching expiration of the Selden patent in 1912 made the A.L.A.M. eager to collect back royalties from unlicensed firms. "The question as to whether those who have been proceeded against can collect punitive damages in case the Selden claims are not upheld and where they would collect them from is a matter for the courts to decide," he added. "The shrewdness of the late William C. Whitney is certainly seen in the history of the case." 47

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6

The hearing on appeal opened on November 22, 1910, in the old Post Office Building in Manhattan before a full bench of the United States Circuit Court of Appeals for the Second Circuit. The briefs had already been filed. The voluminous testimony was hauled into the crowed courtroom by lawyers puffing under the weight of satchels, trunks, and stacks of books. Among the spectators were more than forty attorneys representing companies which had been or were about to be sued by the A.L.A.M. Henry Ford and James Couzens attended every session of the hearing. Ford had again declared his intention to carry the case to the Supreme Court, but the industry surmised that the impending decision would probably be conclusive. The three judges sitting in the case were Emile Henry Lacombe, Henry Galbraith Ward, and Walter Chadwick Noyes. Lacombe had been presiding judge of the Second Circuit since 1907. Moderately experienced in patent causes, he had granted the consent decree in the Winton suit and had occasionally issued court orders in the Ford-Panhard cases. Sixty-four years old, he was a graduate of Columbia University, having received his law degree in 1865. He had been a protege of William C. Whitney and served as assistant corporation counsel of New York City during the drive against the Tweed ring. He became corporation counsel in 1884 and three years later was appointed to the federal court in the Second District. Lacombe was named to the Circuit Court of Appeals when it was created in 1891. Judge Ward, who was fifty-nine, had been associated with Hough in the firm of Robinson, Biddle & Ward; like Hough, he was an expert in admiralty law. Appointed to the bench in 1907, Ward was known for his perceptive grasp and tolerant views. Noyes was the youngest of the three and was destined to take the most important role in the case. A native of Connecticut, he attended Cornell University and studied and practiced law in New London, where he became judge of the county court of common pleas. He sat on the local bench until 1907, when, at the age of forty-two, he was designated by President Theodore Roosevelt as a circuit judge of the Second Circuit. This appoint222

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ment gave him a seat ex officio on the court of appeals.48 In his relatively brief experience as a federal judge, he had participated in several leading patent cases. His record showed no animus against large business organizations. Because the court sat only three hours each day, the hearing was compressed. The case had been fixed on the calendar for three days ending on November 24. The court allowed either side four and one-half hours for its presentation, but toward the end of the hearing permitted an additional hour for each principal on Friday, November 25. The argument for Ford was opened by Livingston Gilford, who, with Wetmore and Crisp, submitted an excellent brief which did not suffer from the prolixity and ungainly proportions of the Parker trial brief. Frederic R. Coudert again appeared for Panhard & Levassor, and Wetmore concluded for the defense. Betts and Redding opened for the A.L.A.M., leaving the summation to the silver-voiced Frederick P. Fish. The judges, following the arguments closely, asked many pointed questions. The Ford attorneys stressed Selden's delays in the Patent Office and contrasted his actual achievement with the contributions of Daimler, Duryea, and other automotive pioneers. Wetmore depicted Selden as a skulking patent attorney who had lain in hiding until the industry developed and then "greedily pounced upon it." The most effective appearance for the defense was made by Coudert.49 His oral argument, reinforced by a superb brief, challenged the basic assumption of the trial court that the Selden patent, as viewed against the state of the art in 1879, marked the borderline between success and failure. Coudert combined moving eloquence with penetrating and often mordant analysis. He presented a devastating summary of the performance of Exhibit 89. Despite the advice of extraordinarily capable engineers and mechanics, the Rochester-Selden buggy had been a failure. "If men who had that vehicle in charge for ten months could not, at the end of ten months, make it do better than 1,309 feet in one hour and twenty-two minutes, will anyone say that Selden showed a vehicle with any radius of action?" The performance of the Hartford-Selden vehicle was no better; indeed, in some ways it was even more damaging to the case for the 22)

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A.L.A.M. If Hough had extended to the Lenoir and Rosenwald cars the broad range of mechanical equivalents bestowed on Exhibit 157, the true nature of the Selden patent would have been exposed. Coudert insisted that the Ford-Lenoir car was the proved superior of Exhibit 157. Dugald Clerk, in order to emphasize the pioneer character of the Selden automobile, had drawn a contrast between the modern motor car and the clumsy steam traction engines that moved at a speed of three and one-half miles an hour for only an hour and one-half of continuous travel. But the Hartford-Selden vehicle, Coudert observed, "could not be made to travel eight miles in as many months. . . ." The failures of Exhibits 89 and 157, he said, made it "fair to assume that in 1879 mechanics could not have constructed a vehicle which would have operated one foot." Could it be held that Selden had solved the problem? The patent showed that Selden was a dreamer, but it did not support the claim that the Rochester lawyer was a pioneer. The motor car owed its development to an evolutionary process; it was the product of multiple conception and cumulative effort. None could claim the idea of the automobile for himself alone. Coudert turned to the testimony of Dugald Clerk, the underpinning of the case for Selden. An accidental encounter had given Coudert excellent preparation for the attack on the Scottish expert. Several weeks before the hearing, Coudert visited the law office of Samuel R. Belts to discuss routine arrangements for the appeal. Belts was occupied with other matters and kept Coudert waiting for about thirty minutes. Coudert passed the time examining a collection of books and magazines spread on a table in the reception room. Among the publications was a set of proofs from the latest British edition of Clerk's book on internal combustion engines, an enlarged and revised edition of which had been brought out in 1909. Consulting the index, Coudert found no reference to Selden; nor was the name mentioned in the historical summary of the gasoline engine and the automobile. Moreover, Clerk admitted that the modern motor car could not be traced to any single patent! Coudert immediately secured a copy of the book and incorporated pertinent passages in his oral argument and brief. 224

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When the hearing opened, Coudert asked Betts and Redding whether their case was based largely on Clerk's testimony. "Yes," they replied, whereupon Coudert produced the book and asked if they relied upon Clerk as a paid expert witness or Clerk as the author of a standard compendium. Divining the intent of this thrust, Betts objected that the new edition was not in evidence. Judge Noyes broke in: "Never mind, Mr. Betts, let Mr. Coudert continue; I think we can judge well enough if what he has to say is applicable or not." 50 Later, in delivering his oral argument on November 23, Coudert waved aloft a copy of the book. "Let us see what Mr. Clerk has to say about it [the Selden engine], not Clerk with a retainer in his pocket." That Clerk had received a handsome fee for his testimony was beyond reproach, said Coudert; but what did Clerk tell the world as a responsible author? "This man who for six years was their retained expert . . . has not a word in his book, not a single syllable, about Selden." Clerk in fact named others as the true pioneers of the modern automobile; indeed, he explicitly credited Daimler with the development of the small, high-speed, four-cycle engine, even as he ignored Selden. "In no work upon gas engines or upon automobiles is the name of Selden mentioned," continued Coudert. "If Selden made the invention which he requests the court to find, it seems incredible that not a single scientific writer has ever alluded to it. It is hardly possible that the whole scientific world, including Clerk, is wrong, when it ascribes the perfection of the automobile engine to Daimler, and the development of the automobile to Daimler, Benz and Panhard & Levassor." From Clerk's textbook Coudert read aloud the favorable appraisal of the motor invented by Brayton, with its closing sentence: "No one, however, has yet succeeded in carrying his type of engine further than he did." 51 Thus Clerk, in utter contradiction of his testimony, admitted that Selden had made no improvement on the Brayton engine. "Will this court prefer the theories of Clerk, the retained witness, to those of Clerk, the disinterested scientist, composing the 'classic' on gas engines?" asked Coudert. "If no one succeeded in carrying the Brayton type of engine further than Brayton himself, wherein did Selden make any improvement?" 52 There could be no convincing answer. 225

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The case, said Coudert, had far-reaching implications in its connection to the public interest. Were the Hough decision affirmed, Selden would continue to hold a legal monopoly on an idea he had not originated, and without his consent no one could use any improvement in the automotive art. Such a verdict would hamper invention and experimentation. "If this be the law," declared Coudert, "then we have a consecrated form of immorality admirably calculated to stay the march of mechanical progress." He denounced the Selden patent as a gross abuse of the American patent system, thundering: A powerful corporation, or aggregation of corporations, owning the flimsiest kind of patent can easily render it far too expensive a luxury to litigate. Few automobile owners could be found to hesitate between the alternative of a $500 license or a $50,000 law suit. Knowledge of human nature too easily indicates the answer to this dilemma. The actions of complainants' solicitors in this case may have been usual under all the circumstances. They may take refuge in the plea that their duty to their clients required that they should make the litigation as arduous, as expensive, as harassing as possible. We do not deem it necessary to discuss this question of professional ethics in this forum and content ourselves with calling the attention of this court to this case as a notorious instance of the misuse of legal procedure for the purpose of forcing automobile purchasers—hundreds of reluctant victims—to shun the courts.

Would the court permit Selden and his allies to reap the benefits of an invention perfected by others? The past, said Coudert, was witness to the sham of the Selden claims; and history could not be rewritten to clothe falsity in the trappings of truth. He concluded: "The Selden legend has some important elements of viability—money, publicity, talent; it only lacks a foundation in fact, without which most legends must ultimately fall when the fire of historic criticism is directed at them." 7

The court retired to study the record. Because of the fullness and intricacy of the testimony and other evidence, a decision was not expected before several months, but the reviewing judges moved with surprising speed. About six weeks later, on January 9, 1911, Judge Noyes read the unanimous opinion of the court.53 226

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The decision was a complete victory for Ford and the French defendants. Deft in its reasoning, the Noyes opinion demonstrated an understanding of automotive history and a firm grasp of technical considerations, such as Hough had lacked. It was a remarkable example of judicial realism in patent adjudication. The court recognized the basic technology of the modern gasoline automobile as the product of social invention, made that technology available to common use, and threw open the doors of the motor vehicle industry to all who chose to enter. The opinion ranks as one of the most meticulous analyses of a patent ever handed down in an American court. "The subject is most important," Noyes began; "the interests involved, of great magnitude; the record, phenomenally long, and the questions presented, complex." While he courteously acknowledged the indebtedness of the appellate tribunal to Hough's "very able opinion," Noyes said the conclusions of the lower court could not be adopted. Only on one leading point was there full agreement: Selden's delay in the Patent Office was eliminated as ground for unfavorable judgment. "If the statutes and rules permit unnecessary delays," observed Noyes, "they should be changed, but we reject the view that this Court owes any duty to relieve against their operation. The patent, even if it be useful only for tribute, must be viewed without prejudice and with absolute judicial impartiality." It was clear that Selden, in return for his letters patent, had disclosed "absolutely nothing" of social value. "From the point of view of public interest it were even better that the patent had never been granted." The vital Claim I of the patent must be tested against the historical realities of the art and the specific intention of the patentee. "A great idea may be embodied in a patent, and yet the patentee take nothing of value by it." Indicating that the strategy of the court would be guided by a narrow construction of the Selden claims, Noyes noted the alternative defenses set forth by Ford and Panhard: " ( i ) That if the patent be broadly construed it is invalid; (2) that if it be construed less broadly, but according to legitimate rules of construction, the defendants do not infringe." 227

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While virtually all of the elements in the Selden combination were old and known in the art in 1879, the patent imposed no limitation upon these devices. "The engine element in the claim is the one which requires the most extended consideration," remarked Noyes. "It is the feature of the patent." Although Claim I specified "a liquid hydrocarbon gas engine of the compression type," this description applied to both the Brayton constant pressure engine and the Otto constant volume engine, the leading types in use at the time Selden filed his application. Would the incorporation of an internal combustion engine in a self-propelled road vehicle in 1879 have constituted a novel combination? Citing the patents of Savalle, Menn, Rosenwald and others, Noyes pointed out that the basic structure, whether using a gas or gasoline engine, was not evidence of novelty. It followed that the consideration of novelty hinged upon the use of a compression engine. Yet even here the antecedent art indicated the workings of an evolutionary process. Noyes noted that the Brayton engine had been employed to propel boats and streetcars before 1879. The experiments with the Providence tram-car, although not commercially practicable, involved the public use of a combination which lay open to improvement. It "pointed directly" to the adaptation of the Brayton motor in another vehicle. Noyes refused to consider the Brayton-Pittsburgh omnibus of 1878, holding that it was neither a commercial nor a mechanical success; but the earlier Providence experiment sufficed to establish a signpost in the prior art. It was at this juncture in the development of the motor vehicle that Selden filed in the Patent Office. The specification and drawings described a particular type of engine, but Selden had added: "Any form of liquid-hydrocarbon engine of the compression type may be employed in my improved locomotive." On its own terms, the patent claimed a broad scope. "And," said Noyes, "if the prior art permitted such a patent in this case it might well be that it would be valid." Here Noyes took issue with the reasoning of the trial court. "But the prior art did not permit such a patent. Every element in the claim was old, and the combination itself was not new." That much was attested by the unarguable facts of automotive history. A broad construction of Claim I 228

ix Argument and Decision

made it invalid for lack of invention. A narrower interpretation, limiting the claim to the selection of the Brayton motor, also failed to disclose an act of invention, for Selden had not been the first to use that engine for locomotion. "But we are reluctant to so construe the claim that it must be held invalid for want of invention," declared Noyes. "We are of the opinion that the patentee had ideas ahead of the times and appreciated many aspects of the problem to be solved in creating a practical motor vehicle." That much could be credited to Selden. Noyes even granted that Selden had made "material improvements" in his adaptation of the Brayton engine, among them an enclosed crankcase, multiple cylinders, increased speed, and lessened weight and bulk. This improved engine was the "novel element" in the Selden combination. To be sure, it was a high-speed engine only in comparison with the Brayton; the modified Otto was its superior; but the patent might be deemed valid if the specification and drawings revealed an operative structure. Here Selden had taken refuge in vagueness and ambiguity. The patent stated: "As the general construction and mode of operation of liquid hydrocarbon engines of this class are well known, it is considered unnecessary to further describe them here." Selden's intention could be clarified only by reading it against the body of automotive technology existing in 1879, when Brayton and Otto motors were in general use. It was evident that Selden had chosen the Brayton. The court held the patent effective only for a road vehicle with the Brayton engine adapted by Selden, "the limitation to this type being read into the claim by the specification to save it from invalidity." Furthermore, the patent was wholly useless as a master guide to motor vehicles utilizing compression motors. "A patent is granted for solving a problem, not for stating one," Noyes insisted. "Its description must explain the invention itself, the manner of making it and the mode of putting it in practice. In the absence of knowledge upon these points the invention is not available to the public without further experiments and further exercise of inventive skill." And, although he had dismissed the argument that the patent was invalid for lack of 22

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Monopoly on Wheels

operativeness and utility, Noyes added: "But any contention that a motor vehicle constructed by the patentee according to the teachings of the patent operated so successfully as to demonstrate that Selden had solved a great problem and is entitled to the status of a pioneer inventor is, we think, without foundation." The court now considered the question of infringement. Did the defendants use a modified Brayton engine or its equivalent? There were substantial differences between the Brayton and Otto; the automotive pioneers had selected the Otto-type motor, using improvements that owed nothing to Selden; and, the patent having been divested of its pioneer character, it was "entitled to a fair and reasonable but not broad range of equivalents." He summarized the differences between the Selden engine and the Otto-type motor of the Ford and Panhard automobiles: (The tabular arrangement which follows is a condensation of the extended comparison made by the court.) Selden engine External compression mechanism Two-cycle engine Constant pressure (non-explosive) No distinctive external vaporizing device Constant flame ignition

Defendants' engine Compression in working cylinder Four-cycle engine Constant volume (explosive) Carburetor Timed electric ignition

These, Noyes maintained, did not comprise "differences in terminologies or theories," but "differences in principles and things." Thus the Selden patent was stripped of its protective shell of logomachy. Citing Clerk's book on internal combustion engines, Noyes remarked that the Scottish expert had regarded the dissimilarities of constant pressure and constant volume motors as so crucial that he based his system of classification upon them, "and, notwithstanding his present testimony, we must regard them as substantial." In light of this interpretation, Selden could not be accorded a broad range of equivalents, and his claims did not cover the Otto-type engine. The defendants did not infringe. The Selden patent embraced only the particular structure detailed by the inventor. The severe restriction of the 2)0

ix Argument and Decision

scope of the patent left Selden with a worthless piece of paper that did not control even the few American models using the two-cycle engine. Had Selden been able to anticipate all contingencies, concluded Noyes, he might well have been awarded an all-inclusive patent; but he had proceeded "in the wrong direction," despite his visionary grasp of the possibilities of the motor vehicle. "In the light of events we can see that had he appreciated the superiority of the Otto engine and adapted that type for his combination, his patent would cover the modern automobile. He did not do so. He made the wrong choice and we cannot, by placing any forced construction upon the patent or by straining the doctrine of equivalents, make another choice for him at the expense of these defendants who neither legally nor morally owe him anything." The suits were dismissed with costs upon the complainants. The final decision in the Selden case was in harmony with the contemporary movement against trusts and monopolies. While the judgment was based on complex technical considerations, the court had not overlooked the public interest. An entire industry was freed from the burden of a specious claim and from the threats of a powerful aggregation that sought to stifle competition.

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T

HE DEFEAT of the patent made Ford the dominant figure of the American automobile world. One editor termed the decision "a tremendous triumph for one man—Henry Ford," while another declared that "today the name of Ford is on the lips of everybody familiar with the motor industry and his fighting qualities are being admitted more than ever." Ford himself was reticent. "Whatever I'd say now might seem like boasting," he told Detroit reporters who pressed him for a statement. "I think the decision speaks for itself." l Twenty-four hours after the court spoke, a thousand telegrams from all parts of the country had streamed into Ford's office. Friend and foe joined in the praise. "Hurrah for Henry Ford!" wired Charles B. King, the Detroit automobile pioneer. Charles E. Duryea wrote: "It was a plucky, hard and above all, HONEST fight. I hope the great American public will awake to the result and not fail to appreciate the champion of their rights against trust methods. . . ." Frederic R. Coudert said: "Your indomitable courage and tenacity in fighting the case through when practically all other American companies had abandoned you was certainly admirable." Speaking for many licensed makers was Richard P. Joy, of the Packard Motor Car Company: "While my interests are on the other side of the fence I cannot but admire your determination to fight the matter out to the bitter end." 2 One message was freighted with special meaning. It will be recalled that Thomas B. Jeffery had steadfastly refused to join the A.L.A.M. He had died in 1910. Now his son, Charles T. Jeffery, told Ford: "Your determination and courage have surely won for you the admiration and respect of the whole automobile industry." A short time later, when the Jeffery Company contributed $10,000 to help defray the costs of the suit, the Ford directors distributed the money to the defense attorneys.3 This 255

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unsolicited gift was the only instance of financial aid accepted by Ford in the war against the Selden patent. In his rejoicing, Ford did not forget Parker. On January 10, 1911, the day after the Noyes decision was handed down, Ford and his son Edsel journeyed to nearby Royal Oak and congratulated Parker. The attorney could rest content that he had laid the foundations of victory.4 He now went into the retirement that had been deferred since 1903. His remaining years were a long golden afternoon that ended in 1925. 1 The decision had an electric effect on the licensed manufacturers, who had converged upon Madison Square Garden for their annual automobile show. The gathering was thrown into an uproar. Yet virtually all of the Selden licensees were satisfied with the outcome; it meant they would no longer pay tribute. Their feeling was expressed by the president of a large Detroit company who hastily asked his treasurer whether the quarterly royalty payment had been dispatched. Told that it had not, the president gleefully ordered, "Then hold it back." When he learned about this incident, James Couzens tartly observed: "I guess there will be more checks of the same kind held back." 5 After briefly considering an appeal to the Supreme Court, the A.L.A.M. executive committee prudently recognized the decision as final and lost no time in demonstrating a conciliatory attitude. It invited Ford and Couzens to the annual A.L.A.M. banquet in New York. Greeted by a storm of cheers, Ford and Couzens were welcomed as the guests of honor at the Hotel Astor on January 12. Loud cries of "Ford! Ford! Ford!" resounded in the banquet hall. Ford bowed appreciatively, but refused to utter a word. He had not changed his simple ways. The plain business suit he wore was the only one in the solid front of evening wear; the austerity of the Model T was incarnated by its maker. But Ford was not completely unbending. He momentarily relaxed his disapproval of smoking to perform a symbolic act when Alfred Reeves proffered a clay peace-pipe. Ford amiably took a few puffs, sharing the pipe with Charles Clifton and other 2

34

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leaders of the Selden association. This was the only concession Ford ever made to the A.L.A.M. W. Benton Crisp acted as Ford's spokesman. "We struggled for what we thought was right, as you, on your side, did," he told the audience. "You were manly opponents and we are proud to greet you as friends." Replying for the A.L.A.M., Clifton marked the event as "the unification of the industry," adding: "For the first time in all these years of endeavor we find our victory in defeat." 6 This "love feast," as the New York press called it, was continued the next evening, when leading members of the A.L.A.M. appeared at a victory banquet tendered at Rector's by the local branch of the Ford Motor Company. Among those who sat on the dais were Parker, Redding, Reeves, Harvey S. Firestone, Job E. Hedges, and Thomas Henderson. The presence of Henderson, who was still treasurer of the Winton Motor Company, attested the burial of old differences. The tributes to Ford had an incandescent glow. "Henry Ford is the greatest man in the automobile world," said Reeves, "and . . . the Ford organization is the greatest automobile organization in the world." A Negro instrumental quartet played, as the audience sang topical refrains on the Selden case set to popular tunes.7 George B. Selden accepted the judgment lightly but realistically. "I have succeeded much better than I expected," he said, "and as my patent has but a year or two to run, the decision has no severe significance." 8 His short-lived fame went out like a snuffed candle; and, amid sighs of relief that the "Selden bugaboo" had vanished, his patent was brought under attack. Of all the patents issued by the United States that had been improperly used "as a means of levying blackmail," remarked Engineering News, "the Selden automobile patent is doubtless the most remarkable." It evoked mordant observations on a flaw in the American patent system which permitted an application to be kept alive for many years by an inventor who dated his rights from the time of issue. The New York Tribune took Selden to task for his long delay in the Patent Office, observing that "practical common sense, as well as intelligent self-interest, strongly suggests that as soon as a useful device is invented it should be put to use." 8 $35

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For motorists, the immediate importance of the decision was that after January, 1911, no purchaser of an automobile paid a "Selden tax." For a short time Selden persisted in styling himself the "father" of the automobile, but even this public claim was abandoned after the summer of 1911. Privately, however, Selden never changed his conviction that he was the original creator of the gasoline automobile. He never conceded that the Noyes decision had altered his stature as an automotive pioneer. Selden died in Rochester on January 17, 1922, at the age of seventy-seven. "Morally the victory is mine," he said on his deathbed.10 His hope that posterity would honor him was in vain. His name survived in the Selden Motor Truck Company, in which he held a large interest; but even the name vanished from the trade when the company was dissolved in 1929. In automotive history, Selden is remembered as the holder of a freak paper patent that precipitated the strangest controversy in the motor car industry. Ford held no personal feeling against Selden. "He was a decent old fellow," said Ford. "But when others began to make automobiles, he got into the hands of those who wanted to exploit the industry by claiming tribute from every motor car manufacturer." u As for himself, Ford believed that his fight against the patent had opened a new chapter in industrial progress with the establishment of the principle of free competition in the automobile business. "If we had not won that suit," he observed, "there would never have been in this country such an automobile industry as exists." The Detroit Journal reflected his views when it hailed the decision of the court of appeals as "a declaration of liberty and equality of opportunity to all motor car makers." 12 Ford always regarded his role in the Selden case as a symbol of the fierce independence which he valued as his most precious possession. The case later became the substance of a myth-making process which has continued into the recent past. One aspect of this legend holds that the expansion of the Ford Motor Company was hobbled by uncertainty as to the final outcome. But the record of its sustained and unimpeded growth during the patent litigation flatly contradicts this view. Norval A. Hawkins, the Ford sales manager, later remarked that the Selden case had not "affected the great growth of the Ford Motor Company. . . . I do not think it affected 236

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13

the sale of cars much." There is no contemporary evidence that plant expansion was restrained by the patent controversy. Nor is it true that the company tied up an enormous amount of cash for the payment of damages and back royalties in the event the court of last resort affirmed the broad scope of the patent. The $350,000 bond posted by the company in 1910 did not tax its resources. Had it lost the case, the company would have suffered no strain in meeting the contingency out of its general cash reserves. The free advertising which Ford received from public interest in the case is beyond calculation; it was, of course, of inestimable value to the company and to Ford's personal reputation. It has also been held that the Selden patent shackled investment, production, and technical innovation in the industry as a whole. Such claims have no foundation in fact. The technological forces which accelerated the remarkable development of automotive manufacture would have been generated regardless of the Selden patent. Chief among these forces was the intensive use of the singlepurpose machine tool, the mainspring of the revolution in mass production that culminated in the moving assembly line. This consideration illuminates a significant facet of the Selden patent case. The rate of development of such technological innovations was inseparably bound up with the clash between Ford and the A.L.A.M. The most daring and fruitful application of the machine process to motor car manufacture was made by the Ford engineers between 1906 and 1913. By 1911, the Ford methods of sequential factory operations had been fairly articulated except for the moving assembly line. While the techniques which enabled the swift expansion of the industry were latent in other auto plants at that time, it was Ford who combined and perfected these processes, and it was from him that other manufacturers learned the arts of mass production. Furthermore, it is clear that the sharp increase in Ford production after 1911 resulted from the perfection of factory techniques, not from the overthrow of the Selden patent. Had Ford abandoned the industry in 1903, after the A.L.A.M. denied him a license, the automobile would have remained a luxury article for an indefinite period. The advent of the mass-produced, low-priced car would have been delayed; the production methods of the auto plants, and their radiating influence upon large seg*37

Monopoly on Wheels

ments of our industrial economy, would have developed at a slower rate. The total impact would have been felt in every corner of the land, for the transformation of American society by the common use of the motor car would have been checked for at least a decade. By 1923, half of the ten million passenger cars in the United States were Ford automobiles, and the unparalled success of the Model T had led other manufacturers to develop the mass market for the cheap car. It is not too much to say that Ford had become a dominant agent of social change. As Charles Merz has written: If the low-priced automobile had never been invented it is possible to believe that a rural culture unlike an urban culture might have existed in this country for some years. But with the development of an inexpensive motor car the last possibility of two unlike cultures existing side by side in the United States went glimmering. Henceforward it was destiny that millions of Americans should spend a large part of their time running up and down the nation, acquiring a common culture and an impregnable likemindedness, fashioning a new America in which town and country thought alike.14

One may say of Ford, as Justice Holmes said of John Marshall, that he was "a strategic point in the campaign of history, and part of his greatness consists in his being there." 15 Without Ford, the industry would have been stunted in its formative period. The Selden case itself, however, did not cramp or paralyze the development of the Ford Motor Company or the industry at large. The termination of the suit brought a feeling of psychological relief, but the determinants of success in the industry remained unchanged: managerial ability, technological resources, marketing facilities, and economic strength. The play of these factors had never really been limited by the A.L.A.M., which had failed to winnow the industry by use of the Selden patent. In the years that lay ahead, attrition would be accomplished by competitive struggles of mounting intensity.16 2

The economic stakes involved in the Selden patent war were enormous. Few industries in the United States equalled the strides made by automobile manufacture during the years of the litigation. S38

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In 1904, there were 121 motor car factories. Five years later, the number stood at 265, and the amount of capital invested had increased by more than 550 per cent. In 1910, the last full calendar year when licensed manufacturers paid Selden royalties, the value of motor vehicle production was $250,000,000, in contrast to $5,000,000 in 1900. Between 1903 and 1911 the American automobile industry made approximately 725,000 cars with an estimated value of $738,000,000." Had every builder in the country been licensed, the aggregate of royalties would easily have amounted to $10,000,000. Such were the factors which Parker must have considered when he wrote, shortly after the conclusion of the suit: "It became of more financial importance than any other patent cause that had ever been tried in the United States. . . ." 18 An authoritative estimate of the total royalties garnered under the patent has been fixed at $5,800,000.19 George B. Selden nominally received one-fifth of this amount, or about $1,160,000. Under the terms of his private agreement with George H. Day, Selden retained half of this amount or about $580,000. It is likely that this return may have been reduced even further, for in 1907 Selden reportedly sold his remaining interest to Day and Samuel T. Davis, Jr., president of the Locomobile Company of America.20 The estimate of $200,000 as Selden's total income from the patent is probably accurate. It was a bountiful harvest for the holder of a patent finally adjudged as completely devoid of commercial value. The expense of the suit was extremely heavy by the standards of the day. The court costs, which were borne by the A.L.A.M., came to about $23,700 in the Ford case alone. But these constituted only a small part of the total expense, which also included lawyers' fees, the retainers of expert witnesses (who, with the exception of Clerk, received between $40 and $50 a day), the salaries of engineers and mechanics, and the cost of patent searches here and abroad. Parker thought that $500,000 had been spent on the cases, yet this figure seems to be short of the mark. Between March, 1903, and the end of 1906, when the case reached the middle of its course, the A.L.A.M. paid out more than $228,000 to its lawyers. It spent at least as much afterward. The litigation cost the Ford Motor Company some $250,000, but this figure does not include amounts charged to the extensive advertising campaigns.21 Among the hidden costs which could not be itemized as direct expense were the 239

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time and effort of the principals and of many officers and executives of motor car companies and trade associations. In the final accounting, these would have augmented the bill for both sides. An estimate of one million dollars is probably not excessive. Yet the huge amount of money consumed by the Selden litigation, which many regarded as wasteful, indirectly contributed to constructive changes in legal procedure. The duration and other circumstances of the Selden case made it a flagrant example of the gross abuses of patent infringement actions. The suit, as we have seen, came before the courts when patent attorneys, inventors, and laymen were making mounting demands for reforms in the American patent system. Chief among the defects they singled out were the complicated and wearisome procedures in equity. In a long and angry footnote to his opinion, Judge Hough had lent the weight of judicial condemnation to such criticism. "It is a duty," said Hough, "not to let pass this opportunity of protesting against the methods of taking and printing testimony in Equity, current in this circuit (and probably others), excused if not justified by the rules of the Supreme Court, especially to be found in patent causes, and flagrantly exemplified in this litigation. As long as the bar prefers to adduce evidence by written deposition, rather than viva voce before an authoritative judicial officer, I fear that the antiquated rules will remain unchanged, and expensive prolixity remain the best known characteristic of Equity." Observing that "reforms sometimes begin with the contemplation of horrible examples," Hough catalogued the many abuses encouraged by existing procedures. He cited the elephantine dimensions of the Selden case record; the duplication of testimony and exhibits; the numerous squabbles over minor matters; the "objections stated at outrageous length"; and the frequent and rancorous verbal bouts, "uncalled for and unjustifiable, from the retort discourteous to the lie direct." The fundamental difficulty of which the Selden case was "a striking (though not singular) example," concluded Hough, "will remain as long as testimony is taken without any authoritative judicial officer present, and responsible for the maintenance of discipline, and the reception or exclusion of testimony." Not least among the members of the patent bar who echoed this 240

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powerful indictment were those who had participated in the Selden suit. William A. Redding asserted that if the case had been heard in open court under rules of evidence, the testimony would have been completed in sixty days instead of five years. Inventors joined lawyers in the clamor for reform, inevitably centering upon the Selden litigation as a "horrible example." Its costive deliberations were likened to those of the British courts of chancery mercilessly caricatured by Dickens in Bleak House.22 Parker, who agreed with much of this criticism, did not conceal his dissatisfaction with procedural defects. But he felt that the Selden case was being unfairly pilloried. In a detailed letter published in the Scientific American in 1912, he remarked that "loose statements" about the case showed scant understanding of the facts. The suit, although commonly designated as a single action, actually embraced five cases. Parker insisted that the size of the record would have been drastically reduced but for an unavoidable duplication of testimony.23 In a private communication written in 1911, Parker had been more to the point.24 Noting the complaints of inventors and members of the patent bar, he admitted that some of the strictures "were fairly well founded," but he added that under existing rules the courts could not consolidate testimony in a group of suits involving separate infringements of the same patent. The vast industrial interests caught up in the Selden suit, as well as the complex character of the automotive art, encouraged both sides to exploit "every possible chance" for or against the patent, said Parker. "This very seldom happens in this class or in other cases, and of course all of these matters led to a volume and an expense of the record beyond what ordinarily would occur." Parker listed the remedies he deemed essential for reducing the cost and mass of testimony. The most important of these found him in agreement with Hough's plea for reform. Parker called for abolition of the indiscriminate or uncontrolled right of taking depositions before officers of the court who had no authority to limit testimony. The taking of depositions, he suggested, should be placed under a special court examiner empowered to compel responsive and relevant answers and to exclude immaterial testimony. "I am satisfied that in the Selden case had this power existed 241

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and this course [been] pursued, it would have shortened the depositions of some of the experts nearly one-half and of some of the other witnesses thereto more than that." In the end Hough's acidulous protest, which Parker called the "now somewhat famous note on this 'Selden' case," did not go unheeded. In 1912 the United States Supreme Court adopted a new set of rules of equity which became effective on February i, 1913. The revised procedure was acclaimed as a long-overdue reform. Under the new rules, testimony is taken orally in open court in all cases except those of an extraordinary character. Other expeditious methods are designed to prevent prolixity, limit delays, and reduce the expense of infringement suits. One of the A.L.A.M. lawyers observed that if the Selden case had been tried under this simplified procedure, the testimony which filled more than a score of volumes, "at a minimum cost of $1 a page for publication alone, could have been contained in one volume." 25 While patent suits are still among the most complex and expensive forms of litigation, these rules have saved litigants uncounted sums of money. There is little doubt that they were promulgated by the Supreme Court as a direct result of the Selden patent suit. 3

Even before it was formally dissolved in 1912, the A.L.A.M. was succeeded by the Automobile Board of Trade, the direct lineal ancestor of the present-day Automobile Manufacturers Association. The trade bodies which came in the wake of the A.L.A.M. were more representative, for they never adopted a policy of exclusion. Nevertheless, it is from the Selden organization that the industry inherited its institutional machinery for furthering the broader interests of the trade. One of the chief features of this community of interest is the automotive patents cross-licensing agreement, a milestone in the development of American industrial cooperation. Its origin lies in the Selden patent controversy and its aftermath. From the earliest days of the motor car industry, before the A.L.A.M. was established, patent infringement loomed as a serious and vexing problem. Many patent contests were waged over auto242

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mobile components and accessories, among them tires, detachable rims, ball bearings, license brackets, and electric horns. The fluidity and momentum of the young industry abetted a general disregard of patent claims. As early as 1900 a Wall Street combination acquired detail patents with the intention of exacting heavy tribute from automobile manufacturers. 28 This scheme failed, and the following decade brought a deluge of infringement suits among individual manufacturers that reached its crest in 1912. In this tangle of conflicting claims, the patent-sharing scheme adopted by the A.L.A.M. at its founding proved to be the best device for avoiding or mitigating the burdens of incessant litigation. The interchange of shop licenses for a nominal royalty eliminated infringement suits among the members of the A.L.A.M. patent pool (although it did not protect them against outside actions) and kept open channels for the cross-fertilization of automotive technology. One of the conditions of the pool was a prohibition upon the withholding of patent rights among A.L.A.M. members. Within its limits, this arrangement had the actual or potential characteristics of a cross-licensing agreement. Its positive features outweighed the fact that the pool was an adjunct of a wouldbe monopoly. Since the A.L.A.M. holdings embraced only about twenty-five per cent of motor vehicle patents, the denial of rights to independent companies did not retard technical progress in unlicensed sectors of the industry. The highly important Dyer patents on the sliding gear transmission were held by the A.L.A.M. pool. But Henry Ford used the planetary transmission in his Model T and earlier cars and, in 1905, as a precautionary measure, took out a license from the man who claimed to be its inventor.27 For those affiliated with it, the A.L.A.M. pool was a haven from the infringement actions involving detail patents that beset the industry with mounting intensity after 1900. By 1910 the courts were crowded with cases, many of them brought by freebooters who trafficked in disputed inventions. It was commonplace for auto makers, parts-suppliers, and dealers to find warning notices and threats of infringement suits in their daily mail. "Purely from the business man's standpoint and without regard to the lawyer's view," commented a trade journal, "the matter of patents in the automobile and accessory trade is developing some phases and results that M3

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challenge thought as to how far patents are to become weapons of warfare in business, instead of simple beneficient protection devices for encouraging inventive creation." 28 Occasionally new enterprise was discouraged by the almost certain prospect of legal complications. One manufacturer who held an allegedly basic patent said: "I would readily put over $50,000 into the manufacture of the device, but it is so easy to make that we would enter immediately into a prolonged ordeal of patent litigation which would eat up all our profits." 29 The prevailing view in the industry was summed up in 1912 by a group of auto makers who told a Senate committee: "The exceedingly unsatisfactory and uselessly expensive conditions, including delays surrounding legal disputes, particularly in patent litigation, are items of industrial burden which must be written large in figures of many millions of dollars of industrial waste." 30 By that time it was commonly agreed that patent warfare was sapping constructive achievement and blocking the free exchange of technical information. At this point Charles C. Hanch, long an advocate of patent peace in the industry, became chairman of the patents committee of the National Automobile Chamber of Commerce, successor to the Automobile Board of Trade. Hanch was treasurer of the Nordyke & Marmon Company, an Indianapolis firm which had manufactured flour-milling machinery before producing the Marmon car in 1904. He had first-hand knowledge of the patent wars which had driven about ninety per cent of the milling equipment makers out of business in the mid-i8go's. Anxious to avoid a similar debacle in the motor car industry, Hanch went to Detroit in 1909 to enlist the support of leading A.L.A.M. members for an industry-wide patent-sharing plan. The breach created by the Selden patent doomed his proposal, but Hanch did not abandon his scheme. After the demise of the A.L.A.M., the time was propitious for establishing such a pool. Most manufacturers were now disposed to heed a proposal for the formal interchange of patents. "It is a much easier course to agree to let one another alone so far as ordinary patents are concerned," said a trade authority, "than to continue the costly effort of straightening the tangle in the courts or seeking to reform the patent system, which appears to be getting into deeper confusion every day." 31 244

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With the other members of the patents committee—Wilfred C. Leland, Howard E. Coffin, Windsor T. White, and W. H. Vandervoort—Hanch drafted a cross-licensing agreement whose essential feature of royalty-free licensing was his own contribution. The plan was supported by Frederick P. Fish, counsel for the National Automobile Chamber of Commerce. It will be recalled that in his summation for the A.L.A.M. before Judge Hough, Fish had condemned patent litigation as the curse of the American industrial community. He was well aware that some inventors and their allies used their patents solely for nuisance value. "My personal view is that not one patented invention in ten is worth making," he later told a Congressional committee.32 The eloquent persuasions of Fish guaranteed the adoption of the plan by the members of the automotive trade association. Drawn up in 1914, the cross-licensing agreement became effective in igiS- 33 It remained in force for ten years and has been renewed at five-year intervals since 1925. Under the original terms, each signatory enjoyed reciprocal privileges of free licensing. With certain exceptions, the scheme embraced all automotive patents then held by members of the trade organization, and also covered rights granted to them during the course of the ten-year agreement. Not included were the following categories of patents: design and styling; special classes of motor vehicles, such as trucks, tractors, fire-engines, ambulances, and motor buses; and basic and revolutionary patents. The last exception seemingly raised the specter of a patent that might be used to dominate the industry, with a future variant of the A.L.A.M., but no invention of this class has been patented since the cross-licensing agreement went into force. As long as the fundamentals of the gasoline automobile remain unchanged, it is questionable whether any single patent can be controlling in the art. At the present time automotive progress is based upon the perfection of details rather than comprehensive innovations. Seventy-nine companies controlling a total of 350 patents became parties to the agreement in 1915. The plan operated with unqualified success and in large measure fulfilled the hope that the industry would be free of the heavy burdens of patent litigation. By 1925, when the agreement covered 547 patents, there had not been a single suit among the more than two hundred manufac245

Monopoly on Wheels

turers who were then members of the pool. A complication was created by the fact that many small firms enjoyed the advantages of reciprocal licensing without contributing any patents to the pool. While this quickened the spread of technological knowledge to the far corners of the industry, it raised the objections of the larger producers who saw that they were in effect subsidizing the research development programs of the small companies. In later years, certain alterations in the agreement made concessions to the major manufacturers, and the present arrangement is endowed with symbolic value rather than operative meaning. But this does not minimize its real contribution. By 1932, when more than one thousand patents were included in the pool, royalties amounted to less than two dollars on each car; these were paid to non-member companies or to inventors whose patents lay outside the scope of the agreement. The vital importance of the scheme is illuminated by the fact that by 1930 one patent in every four on file at the Patent Office was germane to the automotive industry. While the cross-licensing agreement has become less significant as older patents have expired,3* the plan at the outset was the most comprehensive and effective of its kind in American industry. Similar agreements later adopted by the aircraft and petroleum industries have been validated in the courts, and judicial notice has been taken of their widely beneficial effect. Despite the changes which have modified its scope, the automotive cross-licensing agreement is a notable example of how the patent system may be harmonized with the spirit and aims of a free economy. As a result, the costs of patent royalties and litigation have never been more than a negligible factor in the manufacturing costs and consumer price of motor cars. Even so acute a critic as Walton Hamilton, who maintained that the American patent system had been deflected from its original purpose in order to serve the ends of corporate monopoly, conferred unstinted praise upon the scheme: It is hard to think of a form of cooperation between competitors which has brought as much benefit to the public as the cross-licensing agreement in respect to the automobile. To the extent effective, it has assured to every buyer the incorporation of the latest improvements in his motor-car, whatever his choice; it has guaranteed to him the latest and the best of motor transport. He has been freed from judgment upon intricate points in competing technologies, very imperfectly manifest to the naked eye; it has enabled him to make his choice, where he has a greater competence, by a 246

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comparison of esthetic qualities and facilities for comfort. He is free to choose the car with gadgets and style to his taste without putting in jeopardy his demand for a reliable instrument of transportation. The price he pays does not have to carry a heavy burden of expense for litigation. . . . The members of the trade are freed from the trouble and expense of struggling with patent problems. Their whole energies can go into improving their product, perfecting the process of manufacture, devising methods of marketing. . . . A heterodox chapter challenges the whole theology of the patent system.35

This virtually complete "abrogation of the patent law," 3e as another student of our patent system has termed it, was a direct outcome of the Selden case. Yet the conspicuous omission among the signatories of the cross-licensing agreement at its inception was the Ford Motor Company, which long remained aloof from membership in the Automobile Manufacturers Association and its predecessors. Characteristically, Ford chose an independent course. "I believe absolutely in free competition," said Ford, "and in abolishing patents, which kill competition." 3T To this day the Ford Motor Company stands apart from the rest of the industry by its choice of means for gaining access to the reservoir of the industrial arts. This independent patent policy was shaped as a direct response to the Selden suit.

4

Ford's unorthodox position is attributable to the refusal of the A.L.A.M. to grant him a Selden license in 1903, but during his lifetime it reflected more than a persistent animus against the shade of the long-departed "Selden trust." His involvement in the Selden suit aroused a sharp and rankling distaste for the American patent system that he never overcame. More than that, it implanted a determination to secure the necessary elements of a dynamic technology without laying himself under tribute to others. Yet, as much as Ford detested the patent system, he could not divorce himself from it. In an industrial order where inventions become private property by virtue of the patent grant, the Ford Motor Company has meticulously observed the formal requirements of the patent laws. But Ford himself never gave an inch in his conviction, which developed and hardened during the Selden case, 243

Monopoly on Wheels

that patents are worthless unless they contribute to the common store of industrial and social wealth. It was thus that the patent policy of the Ford Motor Company, a policy over which Ford exerted direct control during his active career, became the projection of one man's view that the inventive process is ultimately measured and tested by practical consequences. His experience in the Selden case taught Ford that a patent right used only for collecting royalties is detrimental to the growth of a free and progressive technology. His inflexible attitude was expressed in a statement he made in 1925: "Patents are silly things when they are used to hinder any industry. No man has a right to profit by a patent only. That produces parasites, men who are willing to lay back on their oars and do nothing. If any reward is due the man whose brain has produced something new and good he should get enough profits from the manufacture and sale of that thing." 38 Ford also held that the payment of cash royalties was wrong in principle, a view that may have been influenced by the "old Populist stuff" 39 that colored Ford's thinking. It is also probable that it was shaped as much by business acumen as by the contempt he had for the paper patent taken out by Selden. "There is no power on earth, outside of the Supreme Court, which can make Henry Ford sign a license agreement or pay a royalty," boasted one of his patent attorneys.40 This statement is only half-true. Since Ford had to make an accommodation to the patent system, there were occasions when he took out licenses and, as a last resort, even paid cash royalties. But the manner of that accommodation was consistent with the basic views he developed as a result of the Selden episode, and its ultimate effect, as a government official observed in 1938, was "just to abolish the patent system." 41 As a rule, Ford adamantly refused to adopt parts and components patented by others. Instead, he ordered his engineers to evolve their own designs.42 Only if they failed did the company take out a free license or a shop right. The company avoided payment of a cash royalty simply by using its massive economic power in an open market. For the ideas and devices that were the legal property of others, it traded the dispensation of its valuable contracts for the purchase of parts and materials. In many cases the parts-supplier who made a patented article for Ford also agreed to its manufacture by the Ford Motor Company in equal quantity on the basis of a 248

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free license or shop right. The profits made by the supplier on the Ford contract, as well as the assurance of sizable replacement orders from the vast army of Ford motorists, were the incentives to these arrangements.43 Here the company made a frank appeal to the realities of economic self-interest in a competitive business system where the rights vested in letters patent are worthless unless a market is created for the invention. Thus Ford, while remaining free of the automotive trade association and its patent pool, devised his own version of the cross-licensing agreement. Up to 1922, at least, the Ford Motor Company never paid a cash royalty to anyone for an outside patent used on the Ford car. It is significant that with only one known exception Ford made all of his agreements with actual producers. Under this policy, the arts of negotiation and persuasion replaced the traditional usages of the patent system. Concomitantly, the company never prevented others from using patented inventions originated in its own laboratories or shops. "Since 1903," said a Ford spokesman in 1946, "well over a thousand patents have been taken out by the Ford Motor Company. These patents have been licensed—innumerable times without charge—-to businesses of all kinds and sizes. Ford recognizes the rights granted by patents, but rather than exact tribute for their use, believes that industry is best served when these rights are freely given, or traded for rights under patents owned by others." *4 In this respect, Ford's commitment to free enterprise was absolute. Holding that too many patents were used to retard "the free use of ideas," he announced that his own patents would not be employed to curtail competition or to block the free flow of technological progress. "They will belong to the world," he said. "Anybody who wants to can use any improvement we make. The Ford organization has never proceeded against anybody for infringement of its patents." *5 Most of the Ford patents on the mechanical details of its automobiles were hardly as valuable as its patents on factory machinery and processes; and since the fertile technical resources and ingenuity of the Ford engineers were long unsurpassed in the industry, the flow of technological improvement was stimulated and enriched. In exchange for free licenses and shop rights, the Ford company often taught its parts-suppliers how to 2

49

Monopoly on Wheels

raise their production efficiency, without reckoning its own investment in the experimental work that had developed new techniques. The Ford Motor Company never used the infringement suit as an instrument of policy, although it is certain that its economic strength would have made it superior in most contests against lesser companies or individuals. It viewed the patent grant as a means of defense rather than of aggression, as a safeguard for its legitimate interests rather than a tool for establishing monopolistic control. "We never intend using patents to stop anybody else [from] making our goods," said a high Ford official in 1919, "but we need them as a matter of defense and protection." 46 The company has never departed from this fundamental position.* In observing Independence Day in 1911, the year of its triumph over the Selden patent, the Ford Motor Company declared it had freed the automobile industry from "the straining fear of patent litigation and kindred evils." That boast became an actuality after other auto makers pondered the lessons of the Selden patent suit. Today the constructive results of that episode are embodied in the operations of an industry which for almost a half century has pioneered in diffusing the benefits of advanced technology. The patent policy of the Ford Motor Company and the cross-licensing agreement of other automobile producers are tantamount to radical surgery upon the body of the American patent system. Both patterns have preserved free technology along the frontiers of the automotive industry where conflicts over patent rights might well have hampered it. 5 The most enduring and massive contribution of the Selden controversy was the inception and promotion of intercorporate technical standards in the motor car industry. The systematic and cooperative application of standards to parts and processes used in * Only on rare occasion, as some forty-five years ago, did the company resort to its patent or trade-name rights in an unsuccessful attempt to prevent the Ford automobile from being sold below list price. Yet it is noteworthy that in such instances the company was interested in enforcing resale price maintenance, not in protecting its patent rights as such. See Ford Motor Co. vs. Union Motor Sales Co., 225 Fed. Rep. 373 (1914). 250

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common by auto makers occupies a vital role in our industrial economy. Without it, the character of mass production in its present form would hardly be possible. "Standardization insures quantity production, and hence lower production cost, smaller investment of capital and, therefore, the release of capital for other industrial purposes and developments," said Herbert Hoover, who during his tenure as Secretary of Commerce was a tireless advocate of technical standards.47 The savings which industry-wide standardization has brought to manufacturers and consumers have been calculated in the billions of dollars. The early phase of this chapter in technological progress may be credited to the Mechanical Branch of the A.L.A.M. No forced growth, the automotive standardization movement is a measure of how voluntary associations have promoted the advance of technology in a competitive economy. Although standardization was advocated shortly after the emergence of the automobile industry, it made slow and almost indiscernible headway against accepted habit. The chief lack was a trade body with a wide community of interest, one which held a commanding position for the inauguration of technical standards and the encouragement of their acceptance by manufacturers. The A.L.A.M. was the only agency in the formative era of the industry which had the requisite prestige and resources for an undertaking of such magnitude. To be sure, the Society of Automobile Engineers * had been organized in 1904, but it was ineffectual for the first five years, when it led an "uneventful and passive existence." 48 During that time the Mechanical Branch of the A.L.A.M. was the only intercorporate agency which successfully fostered automotive technical standards. Interest in a standardization program was manifested by some licensed manufacturers when the A.L.A.M. was founded. "Anything that will save shop and cost and promote the quality of the goods and the convenience of users," wrote Henry B. Joy to an associate, "I think we should consider most earnestly." 49 A technical committee formed by the A.L.A.M. in 1903 was the predecessor of the Mechanical Branch organized in 1905. Before long the * It became the Society of Automotive Engineers in 1917, when the organization broadened its membership and character to include professional engineers in related fields, such as aeronautics and marine propulsion, involving the application of the internal combustion engine.

257

Monopoly on Wheels

A.L.A.M. officers were heeding the call of their engineers for the financial support of an automotive testing laboratory that was the first of its kind in the United States. At their monthly meetings the A.L.A.M. engineers promoted a free exchange of scientific and shop data that enlarged the fund of technical knowledge upon which a large segment of the industry depended for its progress.50 The activities of the Mechanical Branch helped to crown the automotive engineer with the recognition and status which had been denied him by more established branches of the engineering profession. Almost from the very outset, the central function of the Mechanical Branch was technical standardization. Shortly after it was launched, the Branch drafted a program for the standards and nomenclature of materials, parts, processes, and machine tools. While the fine pitch screw standard adopted by the A.L.A.M. in 1906 was not immediately accepted by all licensed auto builders, the belief that it would meet with universal favor was borne out by 1909, when the screw standard was in general use in the United States and abroad.51 The Mechanical Branch promulgated standards for many parts and accessories, particularly those most likely to require frequent repair or replacement. It thereby reduced the cost of maintenance for an ever growing multitude of motorists. Through the work of engineers like Henry Souther, the Mechanical Branch applied scientific principles to automotive construction in a day when most American automobile makers were indiscriminately copying European practice. As head of the testing laboratory which the A.L.A.M. maintained at Hartford, Souther experimented with improved automobile steels and was influential in stimulating American steelmakers to meet the special needs of the motor car industry. Despite the freedom which they enjoyed in the exchange of information within the Mechanical Branch, the A.L.A.M. engineers were eager to broaden the pattern of cooperation through an industry-wide body free of dissension over the Selden patent. Their opportunity came in 1909, when the Mechanical Branch was dissolved. Its membership and resources, including its valuable records of automotive standards, were merged in 1910 with the Society of Automobile Engineers. Infused with new life, the S.A.E. began under the guidance of A.L.A.M. engineers like Henry 253

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Souther and John Wilkinson that comprehensive program of standardization for which it is best known. "The plan which they put into effect," wrote an early chronicler of the standardization movement, "was really a continuation of the work which had been started in the Mechanical Branch of the A.L.A.M." 52 The once moribund S.A.E., now enjoying ample support, made over the next decade immense strides in the formulation and adoption of standards. By 1921, more than three hundred were being used by auto makers.53 It is probable that the A.L.A.M. spent on its Mechanical Branch only a small fraction of the millions of dollars it collected in royalties and fees under the Selden patent. Whatever the amount, it is overshadowed by the fact that the systematic adoption of automotive standards began with the A.L.A.M. The Mechanical Branch embodied the triumph of the engineer over the preference of the businessman for more immediate gain. The A.L.A.M. passed into history, dimly remembered as an example of how reliance upon patent rights alone can never match the superior force of production for social use. Henry Ford went on to become known as the father of the Model T and a world-wide symbol of American industrial technique in the machine age. In the vistas of time, the great patent war looms as a campaign in the unending struggle for a free technology.

2

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Notes CHAPTER I

BEGINNINGS 1. Waldemar Kaempffert, "Systematic Invention," Forum, LXX (October, 1923), 2015. 2. United States Circuit Court of Appeals for the Second Circuit: Columbia Motor Car Company and George B. Selden vs. C. A. Duerr & Company and Ford Motor Company et al., Transcript of Record on Appeal from the Circuit Court of the United States for the Southern District of New York, III, 700. These published proceedings, apart from briefs and printed oral arguments, consist of twenty-two volumes. Hereafter cited as "Selden Case Record." 3. Ibid., Ill, 707. 4. For material on Selden and his family, see Raymond H. Arnot, Rochester; Background of Its History ("Publication Fund Series," I, of the Rochester Historical Society [Rochester, 1922]), pp. 99-100; Blake McKelvey, Rochester, The Flower City, iS^^-iSyo (Cambridge, Mass., 1949); Leroy Scott, "Selden's Explosion Buggy," Technical World Magazine, VI (September, 1906), 1-8. A useful sketch is Carl W. Mitman, "George Baldwin Selden," Dictionary of American Biography (New York, 1928-), XVI, 567-568. In the Selden Case Record, III and VI, George Selden furnished a wealth of material concerning his career as an inventor, upon which the author lias drawn freely. 5. Shelby T. McCloy, French Inventions of tJie Eighteenth Century (Lexington, K

y- 1952). PP- 37-40.

6. William Fletcher, The History and Development of Steam Locomotion on Common Roads (London and New York, 1891); Paul N. Hasluck, ed., The Automobile (New edition; London, 1903), pp. 4-15; "Some Early Forms of the Automobile," Scientific American, LXXX (May 13, 1899), 296; Greville and Dorothy Bathe, Oliver Evans (Philadelphia, 1935), pp. 108-112; Detroit Journal, July 15, 1899; Detroit Free Press, August 30, 1864; S. E. Austin, "Wisconsin's First Motor Car Was a Product of 1871," Motor Age, XXV (March 19, 1914), 13-14; Scientific American, XXXIV (January 29, 1876), 64; XXXIX (August 17, 1878), 96. 7. Selden Case Record, III, 561. 8. F. M. Eden, State of the Poor (1797), quoted in Paul Mantoux, The Industrial Revolution in the Eighteenth Century (Revised edition; New York [n.d.]), p. 346. 9. Robert H. Thurston, A History of the Growth of the Steam-Engine (Centennial edition; Ithaca, N.Y., and London, 1939), pp. 25-26, 46-50; Bryan Donkin, A TextBook on Gas, Oil, and Air Engines (5th edition; London, 1911), pp. 20-21. 10. Donkin, A Text-Book on Gas, Oil, and Air Engines, pp. 23-24; Dugald Clerk, The Gas Engine (2nd edition; New York, 1887), p. 139; Polytechnic Review, I (May, 1876), 50; VI (September 14, 1878), 151-153; "Brayton's Early Work in Oil Motors," 2

55

Notes to Pages 16-32 Horseless Age, XII (November 25, 1903), 560; Morris A. Hall, "A Constant Pressure Engine," Automobile, XXI (July 8, 1909), 57-59; folder, "Brayton Engine," in Accession 13, Box 4, Ford Motor Company Archives, Dearborn, Michigan. Hereafter cited as "Ford Archives." 11. Selden Case Record, III, 1149, 1150, 1306-1311. 12. Ibid., Ill, 1151. 13. "Characteristics of the International Fair," Atlantic Monthly, XXXVIII (September, 1876), 358-359; Appleton's Annual Cyclopaedia, 1876 (New York, 1877), pp. 262-281. 14. William Dean Howells, "A Sennight of the Centennial," Atlantic Monthly, XXXVIII (July, 1876), 96. 15. Selden Case Record, XIV, 4079. 16. Ibid., Ill, 579, 583, 603, 729-738 passim, 1151-1152. 17. Donkin, A Text-Book on Gas, Oil, and Air Engines, pp. 37-40, 605-606; Rudolph Slaby, "Father of the Gas Engine," Automobile Magazine, V (December, 1903), 1090-1094; New England Cotton Manufacturers' Association, Proceedings of the Seventeenth Annual Meeting, 1882 (Boston, 1882), pp. 42-47; W. E. B., "A Brayton Engine in Use," Horseless Age, IX (January 15, 1902), 86. 18. "The Gas-Engine," English Mechanic and World of Science (March 29, 1878), photostat in folder, "Otto Engine," Accession 13, Box 22, Ford Archives. 19. Selden Case Record, IV, 1740-1741. 20. The notebook entries by Selden are, in the order cited, in ibid., VIII, 3558, 3560, 3563, 3565. (Selden's italics.) 21. Selden to M. T. E. Chandler, December 20, 1877, ibid., VIII, 3577. (Selden's italics.) 22. Ibid., Ill, 616, 708-721 passim. 23. Ibid., Ill, 1173-1177.

CHAPTER II THE LONG VIGIL i. Selden Case Record, XIII, 3833-3859. s. Ibid., XIII, 3446-3763 passim; Leonard Huntress Dyer, "Evolution of the Motor Vehicle as Shown by Patents," Horseless Age, VI (June 27, 1900), 11-15; James E. Homans, Self-Propelled Vehicles (New York, 1905), pp. 17-18; Charles E. Duryea, "Should Auld Acquaintance Be Forgot," Motor, XXIX (January, 1918), 7 ff; Henry Cave, "Detailed History of Automobile Steering," Old Timers News, III (October, 1945), 38-51. 3. Selden Case Record, IV, 1623-1629; XIII, 3829-3831. 4. Illustrated article by Emile Bourdelin in Le Monde Illustre (June 14, 1860), in Selden Case Record, XIV, 4218-4219, with translation, 4302-4304. 5. La grande Encyclopedic (Paris, 1886-1902), XXIV, 444-450; Henry Harrison Supplee, "Historical Review of the Development of the Internal Combustion Engine," Cassier's Magazine, XXXIII (November, 1907), 9-10. 6. The summary of Marcus' career is based on the standard monograph, Siegfried Marcus, by Erich Kurzel-Runtscheiner (Vienna, 1928). 7. Charles E. Duryea to David Beecroft, April 22, 1915; Duryea to Alfred Reeves, March 25, 1920, Charles B. King Papers, Automotive History Collection, Detroit 256

Notes to Pages 32-41 Public Library (hereafter cited as "King Papers"); Charles E. Duryea, "The Yesterday of Motoring," Motor Age, XIX (May 11, 1911), i. 8. Paul Siebertz, Gottlieb Daimler: Ein Revolutiondr der Technik (Munich and Berlin, 1941), pp. 68-116 passim. 9. St. John C. Nixon, The Invention of the Automobile: Karl Benz and Gottlieb Daimler (London, 1936), pp. 43-48. 10. Horseless Age, XII (August 5, 1903), 160; Selden Case Record, XX, 2648, 26542655; David Beecroft, "The Progress of 25 Years," Automobile Trade Journal, XXIX (December i, 1924), 20. 11. Motor Age, VII (March 25, 1905), 9; Scientific American Supplement, XL (August 10, 1895), 16344. 12. Harper's Weekly, XXXIX Quly 13, 1895), 663. 13. John Brisben Walker, "The Dawn of the Motor Era," Motor, XXV (January, 1916), 67. 14. The first road test of the Duryea vehicle was made on or about September 21, 1893 (Springfield Evening Union, September 22, 1893; see also J. Frank Duryea, America's First Automobile [Springfield, Mass., 1942], pp. 1-20). For many years a controversy over the precise allocation of credit to either of the Duryea brothers for their respective roles in developing the vehicle agitated the pages of automotive history. A contemporary report correctly stated that Charles "was the originator and projector, but his brother was the practical inventor" (The Homestead [March 21, 1896], clipping in King Papers). 15. Elwood Haynes, "How I Built the First Automobile," The Haynes Pioneer VI (July, 1918), 5. 16. Hiram Percy Maxim, Horseless Carriage Days (New York and London, 1937), pp. 1-4. 17. American Machinist, XVIII (July 25, 1895), 588; see also the "Bicycle Number" of Harper's Weekly, XL (April 11, 1896). 18. Horseless Age, I (November, 1895), 8. 19. Chicago Times-Herald, November 29, 1895; W. H. Mclntyre, "America's First Horseless Carriage Road Race," Motor Age, XXIV (August 7, 1913), 18-19. 20. R. L. Duffus, "The Rise of a Billion Dollar Corporation," New York Times, November 18, 1928. 21. Horseless Age, XXIX (June 26, 1912), 1091. 22. Charles B. King, "An Open Letter to Mr. John Brisben Walker," ibid., I (March, 1896), 23; Charles E. Duryea, "The Yesterday of Motoring," 2. 23. E. Irenaeus Stevenson, "The Horseless Carriage in France and America," Harper's Weekly, XL (October 31, 1896), 1075. 24. Annual Report of the Commissioner of Patents for the Year 1805 (Washington, 1896), pp. xiii, xiv. 25. Selden File Wrapper and Contents, Selden Case Record, XIV, 4333-4436. The description and analysis of the prosecution of the application in the Patent Office is based chiefly on this collection of official documents. 26. Floyd L. Vaughan, Economics of Our Patent System (New York, 1925), p. 192; William Hard, "Better Business," Everybody's Magazine, XXX (February, 1 1 9 4). 17727. "History of the Long Pending Patent Application Evil," in U.S. Congress Temporary National Economic Committee, Investigation of Concentration of Economic Power, Hearings, Part 2: Patents, 75th Cong,, gd Sess. (Washington, 1939), pp. 712-713. This, together with other hearings and monographs of the Temporary National Economic Committee, hereafter cited under "TNEC." 257

Motes to Pages 42-58 28. Annual Report of the Commissioner of Patents for the Year 1894 (Washington, 1895), pp. iii-iv. 29. Selden Case Record, III, 1434; R. A. Parker, Trial Brief, 463. 30. F. R. Williams, "A Dissertation on the Selden Patent," Automobile, XVIII (November 14, 1907), 734. The author o£ this article was an inventor who knew Selden between 1880 and 1885. 31. Winans vs. Denmead, 15 Howard 330 (1853), at 347, dissenting opinion of Justice John A. Campbell.

CHAPTER HI MR. WHITNEY

COMES TO HARTFORD

1. Horseless Age, II (December, 1896), 16-17; m (October, 1897), i. 2. Selden Case Record, IX, 121. 3. "Weakness of the Selden Patent," Horseless Age, VII (February 6, 1901), 89. 4. Selden Case Record, III, 1180-1185, 1194-1195. 5. "The Automobile in Common Use," McClure's Magazine, XIII (July, 1899), 195. 6. Motor Age, I (December 28, 1899), 328; see also Automobile Topics, I (December 15, 1900), 318. 7. Detroit Journal, August 25, 1899; Commercial and Financial Chronicle, LXIX (October 14, 1899), 796; Automobile Topics, I (November 10, 1900), 116; Motor World, I (January 17, 1901), 265; Cycle and Automobile Trade Journal, XII (May i, 1908), 24. 8. Twelfth Census of the United States . . . ryoo (Washington, 1901-1902), X, 300. 9. Horseless Age, VI (June 27, igoo), 25; Motor Age, I (September 12, 1899), 13; I (November 7, 1899), l*l&10. Horseless Age, IV (August 30, 1899), 5-6. 11. Henry R. Selden, "Selden Trudged Road to Riches," Old Timers News, III (January, 1946), 26-27. 12. Scientific American, LXXVI (March 13, 1897), 165; Hugh Dolnar, "The New York Electric Hansom Cabs," American Machinist, XX (July 8, 1897), 511; Electrical World, XXIX (May 15, 1897), 608; Commercial and Financial Chronicle, LXIV (June 26, 1897), 1222-1223; LXVI (June 18, 1898), 1187; LXVIII (March 4, 1899), 429. For the articles of incorporation of the Electric Vehicle Company, see Selden Case Record, II, 423-426. 13. "New York's Electric Cab Service," American Electrician, X (September, 1898), 407-418; Hugh Dolnar, "The Electric Vehicle Company," American Machinist, XXI (September 29, 1898), 715-719; Maxim, Horseless Carriage Days, p. 165. 14. Joseph Sachs, "Electric Cabs in New York," Harper's Weekly, XLII (December 10, 1898), 1209; Douglas C. Fox, "Ford Hunt for Old Cabs Sets Taxi World Agog," New York Times, October 14, 1928. 15. On the Whitney-Ryan traction syndicate, see Burton J. Hendrick, "Great American Fortunes and Their Making: Street-Railway Financiers," McClure's Magazine, XXX (November, 1907—January, 1908), 33-48, 236-250, 323-338; Mark D. Hirsch, William C. Whitney: Modern Warwick (New York, 1948), ch. XIV. 16. Horseless Age, IV (April 5, 1899), 7; Automobile, XVII (December 12, 1907), 881; Hermann F. Cuntz, "Hartford the Birthplace of the Automobile Industry," Hartford Times, September 17, 1947.

258

Notes to Pages 58-66 17. Albert A. Pope to William C. Whitney, April 4, 1899, William C. Whitney Papers, Library o£ Congress. 18. "Manufacture in New England," Motor Age, I (September 12, 1899), 4-8; "Lest We Forget," Automobile, XXIV (March 2, 1916), 398-399; XXVI (February 29, 1912), 574-577; Motor World, I (December 13, 1900), 181. New England produced 2,122 of the 4,192 motor vehicles made in the United States in 1900, when the region had 24 automobile plants as compared with 85 for all other states. Of the 1,575 electric cars made in 1900, New England produced about half, but it manufactured only 197 of the 936 gasoline vehicles made that year. The census of 1900 placed motor vehicle output at 3,957 units, but it did not classify production according to type of power plant or locale of manufacture (J. T. Sullivan, "New England a 1900 Leader," Motor Age, XIX [March a, 1911], 1-3)19. "An American Bicycle Manufactory," Engineering, LXIV (July 16, 1897), 65-67; LXIV (July 30, 1897), 131-132; "A Bicycle Factory," Outing, XXX (June, 1897), 277-280; Russell Stone, "The Columbia Chainless," McClure's Magazine, X (November, 1897; separate brochure), i-viii. For an extensive biographical account of Pope, see Motor World, XX (August 12, 1909), 817 ff. 20. Henry Cave, "Hartford—The Incubator of the Automobile Industry," Old Timers News, II (April, 1944), 28-32; Selden Case Record, III, 968. For a biographical sketch of Day, see Motor World, XVII (November 28, 1907), 468 ff. 21. "The Senator," "Mainly about Men and Motors," Automobile Magazine, V (January, 1903), 107. 22. Hermann F. Cuntz, "Hartford the Birthplace of the Automobile Industry," Hartford Times, September 17, 1947. 23. Maxim, Horseless Carriage Days, pp. 29-36, 47-49, 128-129. (Quotations by permission of Harper & Brothers.) 24. Henry Souther to David Beecroft, December 10, 1915, David Beecroft Papers, Automotive History Collection, Detroit Public Library. Hereafter cited as "Beecroft Papers." 25. Maxim, Horseless Carriage Days, p. 130; see also Maxim to Henry C. Hart, October 25, 1900, Selden Case Record, XI, 1725-1728. 26. Electrical World, XXIX (May 15, 1897), 614-617; Scientific American, LXXVI (May 22, 1897), 331. 27. Alexander Johnston, "Staking Out the Industry's Claim," Motor, XXIX (January, 1918), 67; E. D. Kennedy, The Automobile Industry (New York, 1941), pp. 14-15. But the geographical equation was not fixed and invariable; as Kennedy points out, exceptions to the rule are to be found on both sides. 28. Selden Case Record, III, 955, 964-966; Henry Souther to David Beecroft, June 21, 1915, Beecroft Papers. 29. Maxim, Horseless Carriage Days, pp. 163-164. 30. Horseless Age, IV (April 12, 1899), 11. The account following in the text is based chiefly on Cuntz, "Hartford the Birthplace of the Automobile Industry," Hartford Times, September 17, 1947. 31. A few years before, Whitney had been head of the Manufacturing Investment Company, which had been organized to exploit the Mitcherlich process for the conversion of lumber by-products into paper articles. He counted on an ample return from licensees under these reputedly controlling patents, but a flaw in the claims disappointed Whitney's hopes for dominating this phase of the paper industry. The episode doubtless taught him the necessity of properly exploring patent rights (Frank Barkley Copley, Frederick W. Taylor: Father of Scientific Management [2 vols.; New York, 1923], I, 335-336, 378). 259

Notes to Pages 67-83 32. Horseless Age, IV (April 26, 1899), 9. The details may be found in Commercial and Financial Chronicle, LXVIII-LXIX (April-July, 1899). 33. Motor World, VI (April 2, 1903), 29; Motor Age, IV (September 3, 1903), 14; Maxim, Horseless Carriage Days, p. 170. 34. License agreement between George B. Selden and the Columbia & Electric Vehicle Company, November 4, 1899, Selden Case Record, II, 435-450. 35. Detroit News-Tribune, June 4, 1899; Detroit Journal, August 7, 1900. 36. Horseless Age, IV (May 10, 1899), 6; IV (July 19, 1899), 19; Motor Age, I (September 19, 1899), 29, 33; Motor Vehicle Review, new series, I (February 13, 1900), 17-18; Electrical World, XXXV (January 13, 1900), 53. 37. Horseless Age, IV (May 3, 1899), 5; V (February 14, 1900), 9.

CHAPTER IV THE OPENING

BATTLE

i. Motor Age, VI (September 8, 1904), 19. z. F. K. Grain, "The Age of Gasoline," American Monthly Review of Reviews, XXXII (September, 1905), 320-321; E. F. Lake, "The Foundry in Its Relation to the Automobile Factory," Horseless Age, XVIII (September 12, 1906), 327-328; George Cormack, "Pioneering Days in the Gas Engine," Gas Engine, XXI (July, 1919), 224-227. 3. Horseless Age, V (November 15, 1899), 5~~6> VII (October 24, 1900), 9-10. 4. New York Herald, January 21, 1900; Burton J. Hendrick, "Great American Fortunes and Their Making: Street-Railway Financiers," McClure's Magazine, XXX (January, 1908), 324-325; Philip C. Jessup, Elihu Root (2 vols.; New York, 1938), I, 187-189. 5. Horseless Age, VIII (September 11, 1901), 489, 491; VIII (October 9, 1901), 582; Motor Review, new series, V (December 19, 1901), 2. The files of the Commercial and Financial Chronicle, LXXII-LXXIII (March-September, 1901), chronicle many of these developments. 6. Memorandum to author from Hermann F. Cuntz, August 19, 1954. 7. Motor Age, II (June 14, 1900), 417-425. The account which follows in the text is based chiefly on the extensive report in this source. 8. Ibid., II (June 21, 1900), 449-452, carries the statements by Selden and Hunter. 9. Scientific American, LXXXIII (August 4, 1900), 66. 10. Motor Age, II (July 19, 1900), 636-637. 11. Ibid., II (July 26, 1900), 667-669. 12. Motor Vehicle Review, new series, II (August 7, 1900), 6; Motor Age, II (August 9, 1900), 733-73413. Electric Vehicle Co. et al. vs. Winton Motor-Carriage Co., 104 Fed. Rep. 814 (1900). 14. Motor World, I (December 6, 1900), 169, 172—173. 15. Selden Case Record, X, 1372-1384. 16. Memorandum to author from Hermann F. Cuntz, August 15, 1954. 17. Selden Case Record, III, 1113-1115; IX, 171-172. 18. U.S. Bureau of the Census, Bulletin 66, Automobiles and Bicycles and Tricycles (Washington, 1907), p. 12.

260

Notes to Pages 84-8S ig. Motor Age, II (March 15, 1900), 3; Motor Vehicle Review, I (December 26, 1899), 9-11; see also Lawrence H. Seltzer, A Financial History of the American Automobile Industry (Boston and New York, 1928). 20. Automobile, XVI (March 28, 1907), 564. 21. Motor Age, IV (April 25, 1901), n.p. Illustrative of the numerous entries into the industry at this time are the announcements of new companies in the weekly column, "Minor Mention," Horseless Age, X (July-December, 1902), and XI (January-June, 1903). See "Motor's Historical Table of the American Motor Car Industry," Motor, XI (March, 1909), 36-42. This table, compiled by Charles E. Duryea, included firms whose advertisements appeared in recognized trade journals and of whose commercial work there was some authentic record. Its accuracy is challenged by Ralph C. Epstein, The Automobile Industry: Its Economic and Commercial Development (Chicago and New York, 1928), pp. 163-164, asgn. Another estimate, made in 1909, stated that from 1901 to 1907 about 310 firms entered the industry, of which number 158 retired from the field during the same period (Hermann F. Cuntz, "Circulation of Money Due to Automobiling," New York Herald, February 7, 1909). 22. Motor World, XXI (December 30, 1909), 709. 23. President's Commission on Economy and Efficiency, Report of the Investigation of the United States Patent Office, 62nd Cong., gd Sess., House Doc. No. 1110 (Washington, 1912), p. 239. 24. For a penetrating analysis and discussion of the American patent system, see Walton Hamilton, Patents and Free Enterprise, TNEC Monograph No. 31 (Washington, 1941). For later but substantially similar views, see K. William Kapp, The Social Costs of Private Enterprise (Cambridge, Mass., 1950), pp. 218-221. A concise and informative survey of the patent system may be found in Corwin D. Edwards, Maintaining Competition: Requisites of a Governmental Policy (New York, Toronto, and London, 1949), pp. 216-248. A case against the monopolistic effects of the patent system is made out at length in George W. Stocking and Myron W. Watkins, Monopoly and Free Enterprise (New York, 1951), ch. 14. 25. Joseph Dorfman, The Economic Mind in American Civilization (3 vols.; New York, 1946-1949), II, 775-777; III, 37-38, 39. For the place occupied by the patent system in agrarian anti-monopoly sentiment on the eve of the organized Populist movement, see D. C. Cloud, Monopolies and the People (5th ed.; Davenport and Muscatine, Iowa, 1873), ch. XXV, and two articles by Earl W. Hayter: "The Western Farmers and the Drivewell Patent Controversy," Agricultural History, XVI (January, 1942), 16-28; "The Patent System and Agrarian Discontent, 1875-1888," Alississippi Valley Historical Review, XXXIV (June, 1947), 59-8226. James Parton, "History of the Sewing-Machine," Atlantic Monthly, XIX (May, 1867), 538-539; Frederick L. Lewton, "The Servant in the House: A Brief History of the Sewing Machine," Smithsonian Institution, Annual Report, 1929 (Washington, 1930), pp. 577-579. 27. William T. Hutchinson, Cyrus Hall McCormick (2 vols.; New York and London, 1930-1935), I, 409-430; II, 365-571 passim. 28. Thurman W. Arnold, The Folklore of Capitalism (New Haven, 1937), p. 225; see Vaughan, Economics of Our Patent System, pp. 34-39. 29. Edwin J. Prindie, Patents as a Factor in Manufacturing (New York, 1908), p. 14; see also Giles S. Rich, "The Relation between Patent Practices and the Anti-Monopoly Laws," Journal of the Patent Office Society, XXIV (February, 1942), 88. 261

Notes to Pages 89-100 30. Bement vs. National Harrow Co., 186 U.S. 70 (1902); see also Alton D. Adams, "Legal Monopoly," Political Science Quarterly, XIX (June, 1904), 183. 31. Charles R. Flint, Memories of an Active Life (New York and London, 1923), p. 243. 32. Hart O. Berg to Charles E. Duryea, July 26, 1915, Beecroft Papers; Hermann F. Cuntz to Charles B. King, August 11, 1936, King Papers. 33. Motor World, VIII (April 21, 1904), 131. 34. "The Senator," "Mainly about Men and Motors," Automobile Magazine, IV (September, 1902), 781. 35. Henry B. Joy to J. W. Packard, December 29, 1902, Henry B. Joy Papers, Michigan Historical Collections, University of Michigan, Ann Arbor, Michigan. Hereafter cited as "Joy Papers." 36. Joy to George H. Day, December 23, 1902; Joy to Packard, December 29, 30, 31, 1902, Joy Papers; F. L. Smith, "Motoring Down a Quarter Century," Detroit Saturday Night, XXII (October 20, 1928), 3. 37. Joy to Packard, January 4, 1903, Joy Papers; Charles Clifton, "Cooperation and Its Results: How It Saved the Automobile Industry at a Critical Stage," Automobile Topics, XL (December 18, 1915), 461. 38. Joy to Day, January 5, 8, February 9, 1903; Joy to Packard, January 8, February 12, 1903, Joy Papers; Selden Case Record, III, 944-946. 39. Automobile Magazine, V (January, 1903), 89-90.

CHAPTER V

DAVID AND GOLIATH 1. Henry B. Joy to S. T. Davis, Jr., February 21, 1903; Joy to Winton Motor Carriage Company, February 24, 1903, Joy Papers; F. L. Smith, "Motoring Down a Quarter Century," Detroit Saturday Night, XXII (October 20, 1928), 3. 2. George H. Day to Joy, February 25, 1903; Joy to Edward Rector, February 28, 1903; Joy to S. T. Davis, Jr., February 28, 1903; Joy to J. W. Packard, March 2, 1903, Joy Papers. 3. "Memoranda of Facts Relating to the Licensed Association" (undated copy), Ralzemond A. Parker Papers, Automotive History Collection, Detroit Public Library. Hereafter cited as "Parker Papers." 4. Smith, "Motoring Down a Quarter Century," as cited in note i. 5. Motor World, VI (April 2, 1903), 18. 6. "License Agreement" and "Articles of Agreement of Association of Licensed Automobile Manufacturers," Selden Case Record, XIV, 4643-4653. 7. Statement by William A. Redding in W. J. Morgan, "Selden Patent War Nears End," New York Globe and Commercial Advertiser, December 24, 1910. The contract between Selden and Day was dated December 12, 1902. Selden acknowledged the existence of the agreement, but refused to disclose its particulars (Selden Case Record, VI, 2871-2874). 8. Joy to Winton Motor Carriage Company, March 9, 1903; Joy to Packard, March 11, 1903, Joy Papers; Selden Case Record, X, 1409. 9. George H. Brown to Charles E. Duryea, August a, 1907, Parker Papers; Selden Case Record, III, 883, 897, 1039-1040; XIV, 4625. 10. Selden Case Record, III, 901, 1118-1120. S&2

Notes to Pages loo-nr 11. Hermann F. Cuntz, "Hartford the Birthplace of the Automobile Industry," Hartford Times, September 18, 1947. 12. New York Sun, October i , 1905. 13. Motor Age, IV (August 6, 1903), 10. 14. Motor World, VII (December 24, 1903), 456; Motor Age, III (April 2, 1903), 10. 15. H. H. Franklin to editor, September 29, 1903, Cycle and Automobile Trade Journal, VIII (November i, 1903), 19. 16. Automobile Topics, VI (August i, 1903), 1083. 17. "The Senator," "Mainly about Men and Motors," Automobile Magazine, V (October, 1903), 943-945. 18. Motor Age, IV (November 12, 1903), 5; Horseless Age, XIII (February 3, 1904), 119. 19. Motor Age, III (February 19, 1903), 18. For an illuminating discussion of the price factor in the early years of the industry, see Mark Adams, "The Automobile—A Luxury Becomes a Necessity," in Walton Hamilton et al., Price and Price Policies (New York, 1938), pp. 27-33. 20. Harry W. Perry, "Development of Buggy Type Western Cars," Automobile, XV (August 2, 1906), 143-146. 21. J. S. Corbin, "The Opinion of One of the Million," Horseless Age, XIII (January 13, 1904), 41-42. 22. See Allan Nevins, with the collaboration of Frank Ernest Hill, Ford: The Times, the Man, the Company (New York, 1954), chs. IX-X, for a detailed account of the career of Ford from 1899 to 1903. 23. "The Senator," "Mainly about Men and Motors," Automobile Magazine, VI (April, 1904), 317. 24. Agreements dated August 20, 1902, February 28, 1903, Accession 140-1, Ford Archives. 25. U. S. Board of Tax Appeals, Estate of John F. Dodge et al. vs. Commissioner of Internal Revenue, Transcript of Hearings held at Detroit and Washington, D. C., January u-February 25, 1927, pp. 1277-1279. 26. Barthel & Barthel to Henry Ford, November 14, 1900, exhibit item, Fair Lane Papers, Accession i, Ford Archives. 27. Hermann F. Cuntz to Charles B. King, August 11, 1936, King Papers; Cuntz, memorandum to author, August 10, 1954. 28. Horseless Age, XII (August 26, 1903), 209. 29. Dodge vs. Commissioner of Internal Revenue, Transcript of Hearings, pp. 1281-1283. 30. Automobile, IX (December 12, 1903), 617. 31. F. L. Smith, "Motoring Down a Quarter Century," Detroit Saturday Night, XXII (October 27, 1928), 2. 32. TNEC Hearings, Part 2: Patents, pp. 268; see also W. J. Cameron, A Series of Talks Given on The Ford Sunday Evening Hour, 1934-1935 (Dearborn, Michigan, 1935), p. 51. 33. John K. Barnes, "The Men Who 'Standardized' Automobile Parts," World's Work, XLII (June, 1921), 206. 34. James Couzens, "What I Learned About Business From Ford," System, XL (September, 1921), 264, 360-361. (Reprinted by permission of McGraw-Hill Publishing Company, Inc.) 35. Smith, "Motoring Down a Quarter Century," as cited in note 31. 36. Theodore F. MacManus and Norman Beasley, Men, Money and Motors (New York and London, 1929), p. 56. (Quotation reprinted by permission of Harper & 263

Notes to Pages 112-127 Brothers.) MacManus and Beasley were not present at the meeting, but their account, written years after the incident, drew upon the recollections of prominent auto makers, who were active just after the turn of the century. 37. Hartford Times, February i, 1922. 38. Waldemar JCaempffert, "The Mussolini of Highland Park," New York Times, January 8, 1828. 39. "Henry Ford at Bay," Forum, LXII (August, 1919), 241. 40. "Why Henry Ford Fought the Selden Patents," New York Herald, January 14, 1906. 41. Henry Ford Diaries & Notes, Fair Lane Papers, Accession i. Box 13, Ford Archives (italics in the original); see also "Henry Ford Explains Why He Gives Away $10,000,000," New York Times, January 11, 1914. 42. Reminiscences of W. J. Cameron, Oral History Section, Ford Archives. 43. Judson C. Welliver, "Henry Ford, Dreamer and Worker," American Review of Reviews, LXVI (November, 1921), 493; Willis J. Abbott, "Our Job as a Nation," quoted in Henry Ford vs. The Tribune Co. et al., Transcript of Certain Articles, p. 60. 44. Motor World, VI (August 27, 1903), 811. 45. Dodge vs. Commissioner of Internal Revenue, Transcript of Hearings, p. 1283. 46. New York Sunday American, February 24, 1907; Detroit Free Press, May 3, 1911; Frances Clough Richardson to W. J. Cameron, January 7, 1935, Fair Lane Papers, Accession i, Box 49, Ford Archives. 47. Statement by Ralzemond D. Parker to Ford Motor Company History Project, Columbia University, April 12, 1953. 48. New York World, September 10, 1903; Automobile, IX (November 21, 1903), 55°49. Minute Books, Ford Motor Company, September 17, 18, 1903, Accession 85, Ford Archives; Dodge vs. Commissioner of Internal Revenue, Transcript of Hearings, pp. 1283-1284. 50. "Ford on the Selden Association," Cycle and Automobile Trade Journal, VIII (October i, 1903), 173. This letter was also carried in Motor Age and Horseless Age. 51. Cycle and Automobile Trade Journal, VIII (December i, 1903), 19.

CHAPTER VI

A MOUNTAIN

OF EVIDENCE

1. Motor World, VII (October i, 1903), 12. 2. Horseless Age, XII (October 7, 1903), 372; XII (October 14, 1903), 417; Motor World, VII (January 7, 1904), 531. 3. Motor World, VI (September 24, 1903), 951. 4. Ibid., VII (October i, 1903), 11-12. 5. Horseless Age, XXV (April 6, 1910), 521; Motor World, XXIII (April 7. 1910), 23-24; Automobile Trade Journal, XXIX (December i, 1924), 292; see also Pope Manufacturing Co. vs. Gormully & Jeffery Manufacturing Co., 144 U.S. 238 (1892). 6. Motor World, VII (October 22, 1903), 121. 7. Automobile, IX (November 21, 1903), 550. 264

Notes to Pages 128-148 8. New York World, April 4, 1909. 9. Joseph Borkin, "The Patent Infringement Suit—Ordeal by Trial," University of Chicago Law Review, XVII (Summer, 1950), 642. 10. The Nation, XVIII (January 8, 1874), 23-23; Frederic H. Betts, "The Policy of Patent Laws," Journal of Social Science, X (December, 1879), 172; William Macomber, "Patents and Industrial Progress," North American Review, CXCI (June, 1910), 813. 11. H. Ward Leonard, "The Legal Monstrosity of Our Patent System," Forum, XLI (May, 1909), 498, 501-502; see also L. P. Alford, "Some Hardships of Patent Infringement," American Machinist, XXXIII (February 10, 1910), 256-257. 12. Arnold, The Folklore of Capitalism, p. 226; Stephen H. Philbin, "Judge Learned Hand and the Law of Patents and Copyrights," Harvard Law Review, LX (February, 1947), 395. 13. Charles Evans Hughes, "The Patent Bar," Journal of the Patent Office Society, XII (July, 1930), 292. 14. Statement by Frederic R. Coudert to Ford Motor Company History Project, Columbia University, January 21, 1953. 15. R. A. Parker to Albert Lemaitre, November 16, 1903, in folder, "Geo H. Benjamin, Coudert Bros. & Panhard Co.," Parker Papers. 16. New York Sunday American, February 24, 1907. 17. Ibid. 18. John Reed, "Industry's Miracle Man," Metropolitan, XLIV (October, 1916), 66. 19. Selden Case Record, IX, 50, 59. 20. William Brown Meloney, "The Marvelous Growth of the Automobile Industry," Munsey's Magazine, XLII (October, 1909), 22. 21. Selden Case Record, III, 906, 915. 22. Motor Age, III (April 2, 1903), 10-11. 23. Selden Case Record, III, 1069, 1130. 24. Ibid., Ill, 1118-1120. 25. Kurzel-Runtscheiner, Siegfried Marcus, p. 30; Parker to Panhard & Levassor, November 27, 1903, and Parker to George H. Benjamin, November 10, 1904, as cited in note 15; Horseless Age, XII (October si, 1903), 44*; XV (March 15, 1905), 33826. Selden Case Record, XV, 4730-4752 passim.

CHAPTER VII THE TOURNAMENT

OF MOTORS

1. New York Sunday American, February 24, 1907. 2. Selden Case Record, Oral Argument of William A. Redding at Trial Hearing, 210. 3. Ibid., XIV, 4467, 4483, 4490-4491, for Clerk's estimate, and III, 1272-1274, 1363-1366, for Selden's assertions. 4. Ibid., IV, 1671-1672. 5. Ibid., IV, 1943-19446. Ibid., TV, 2162-2163. 7. Ibid., IV, 1534-1965 passim; R. A. Parker, Trial Brief, 146-150. 8. [bid., IV, 2129-2132; New York Sunday American, February 24, 1907.

265

Notes to Pages 149-161 9. Selden Case Record, VI, 2911. 10. Automobile, XIII (September 7, 1905), 253-254. 11. Leroy Scott, "Selden's Explosion Buggy," Technical World Magazine, VI (September, 1906), i. 12. George Gray Haven, "Father of the Automobile," Scrap Book, December, 1910, p. 983 (clipping in Parker Papers). 13. Selden Case Record, III, 1246, 1338-1342; VI, 3005. 14. Ibid., Ill, 815-817, 831-834, 1438-1447; VI, 2949-2951, 3175. 15. Ibid., Ill, 1328; VI, 2883-2886; Henry Cave, "Cave Cites Years in Developing Car," Old Timers News, III (April, 1945), 24-25; Maxim, Horseless Carriage Days, pp. 171-172. 16. Selden Case Record, VI, 2888; XII, 2735-2736; Oral Argument of Samuel R. Betts at Trial Hearing, 75. 17. Ibid., VI, 3117. 18. Ibid., Oral Argument of Samuel R. Betts at Trial Hearing, 6. 19. Horseless Age, XVII (May 23, 1906), 739. 20. Automobile, XIV (June 14, 1906), 947; Scientific American, XCV (July 28, 1906), 63. 21. Selden Case Record, III, 1249-1253. 22. Ibid., VI, 2871-2874, 2878, 2898, 2967, 3112. 23. Ibid., Ill, 1314-1323. 24. Ibid., XI, 1465-1469. 25. Ibid., XI, 1499-1508. 26. Ibid., XI, 2118-2122. 27. Ibid., XII, 2421-2423. 28. Ibid., XI, 2122-2128; XII, 2425-2429; Automobile, XVI (June 27, 1907), 1052; X. P. Huddy, "The Selden Patent Litigation," Horseless Age, XX (July 10, 1907), 44-45. 29. As Parker later observed in his trial brief: "Attempts were made by Complainants to operate, with some minor changes, and with the radical and entire changes of the fuel system and mixing system by substituting the Festugiere carburetor for the Brayton system of liquid fuel mixing, compressing such gaseous mixture from the 'carburetter' into the air tank and they kept this up until the latter part of the year 1907. Then radical changes were made in the cooling system; the crank case cooling system was abandoned; an entirely new set of cylinder heads were made with radical differences in the sizes of the valves, the valve openings, the arrangement of the valves, in the fuel system arrangement, and in the delivery of fuel by the oil pumps. The common single air tank was discarded and a separate air tank was furnished for each power cylinder, making practically three air tanks and separate engines working upon only the one common feature of a common crank shaft. The new cylinder heads had water jackets. A water circulating system was supplied together with a large radiator which very materially increased the weight of the engine, as well as destroying its balance on the front axle of the vehicle" (Selden Case Record, R. A. Parker, Trial Brief, 61). Parker also noted that "one of the air tanks, containing an explosive mixture, blew up. The tanks blew up four times." (Parker's italics throughout.) 30. Selden Case Record, XI, 1590-1592. 31. John C. Wetmore, "Ford Attacks the Selden Car Trial," New York Evening Mail, June 25, 1907. 32. Selden Case Record, XII, 2430-2450; Automobile, XVII (August i, 1907), 185; Motor World, XVI (August i, 1907), 783. 266

Notes to Pages i6i-ij6 33. Horseless Age, XX (September 11, 1907), 339-341; XX (September 18, 1907), 371-373; XX (September 25, 1907), 402-403. 34. Selden Case Record, XI, 2268-2270. 35. R. A. Parker to Henry Ford, December 24, 1906, Henry Ford Office Files, Accession 2; Reminiscences of Charles E. Sorensen, John Wandersee, and C. J. Smith, Oral History Section, Ford Archives; Selden Case Record, XII, 2451, 2452-2453. 36. For details of the car, see Selden Case Record, XII, 2473-2491 passim; XIV, 4589-4619; see also Charles E. Duryea, "A Historic Motor Vehicle Recently Reproduced—The Ford-Lenoir Car," Horseless Age, XX (October 2, 1907), 502-503. 37. Selden Case Record, XI, 1997-1998, 2001. 38. Automobile, XVII (August i, 1907), 185; Motor World, XVI (August i, 1907), 783-

39. Automobile, XVII (September 12, 1907), 353. 40. Selden Case Record, XII, 2681-2682. 41. Ibid., Frederick P. Fish et al., Appellate Brief, 213-214. 42. Ibid., XV, 4744-4745; Frederick P. Fish et al., Trial Brief, in. 43. Letters dated, in the order quoted, February 25, March 15, May 22, 1906. (Italics in the original), Henry Ford Office Files, Accession 2, Ford Archives. 44. Parker to Ford, July 30, 1908, ibid.

CHAPTER VIII TRADE WAR 1. Motor Age, VII (January 26, 1905), 6; VII (June i, 1905), 16; Detroit Journal, January 20, 1905; Detroit Free Press, January 22, 1905. 2. Horseless Age, XV (January 25, 1905), 141-143; XV (March i, 1905), 289; Detroit Journal, Evening Nevis, February 25, 1905. 3. Motor World, IX (March 2, 1905), 1107-1108; Automobile, XII (March 4, i905). 3494. Detroit Journal, January 25, 1908; Automobile, XIX (December 31, 1908), 957. 5. Motor World, VII (March 24, 1904), 1103; VIII (September 8, 1904), 861; XXII (March 17, 1910), 733; XXIII (April 14, 1910), 77-78; Roy D. Chapin to Alfred Reeves, May 20, 23, 1910, Roy D. Chapin Papers, Michigan Historical Collections, University of Michigan, Ann Arbor, Michigan (hereafter cited as "Chapin Papers"); Detroit News-Tribune, February 9, 1908. 6. F. L. Smith, "Motoring Down a Quarter Century," Detroit Saturday Night, XXII (October 20, 1928), 3, 7. Motor World, XX (September 16, 1909), 1054. 8. Frederick A. Talbot, Motor-Cars and Their Story (London and New York, 1912), p. 29. 9. Detroit Saturday Night, II (January 30, 1909), 5. 10. Motor World, VI (August 20, 1903), 219; Automobile, IX (August 29, 1903), 219; Cycle and Automobile Trade Journal, XV (February i, 1911), 141; Selden Case Record, III, 928-929. 11. Motor World, VI (September 10, 1903), 880-881. Victor Talking Machine vs. The Fair, 123 Fed. Rep. 424 (1903), involved the right of the patentee to dictate resale price maintenance. 12. Memorandum of conference with John W. Anderson, by Arthur J. Lacy, Janu267

Notes to Pages 177-188 ary 26, 1926, Dodge Estate Legal Papers, Accession g6, Box i, Ford Archives. 13. Hartford Times, October 6, 1923; indenture to A. D. Harlow, Newark, New Jersey, December 7, 1903, Legal-Selden Patent, Accession 20, Box i, Ford Archives; Ford Motor Company advertisement, Motor World, VII (October i, 1903) 3714. Horseless Age, XIII (January 21, 1904), xxxix. 15. "There's a Bogey-Man on Broadway Again," New York Evening Post, April 14, 1904. 16. Detroit News-Tribune, October 28, 1906. 17. Motor World, VII (March 24, 1904), 1103-1104. 18. Ford Times, II (March i, 1909), 5-6; II (June i, 1909), 16; Cycle and Automobile Trade Journal, XIII (April i, 1909), 70; Ford Motor Company vs. Cadillac Motor Car Company, Equity Case No. 4024, U.S. Circuit Court for the Eastern District o£ Michigan, Southern Division. 19. New York Sun, October i, 1905. 20. Motor World, XIII (June 21, 1906), 115. 21. Horseless Age, XVI (September 13, 1905), 311, 322; Motor World, X (September 7, 1905), 1039; XI (October 26, 1905), 221-222; Motor Age, VIII (September 7, 1905), 17. 22. Electric Vehicle Co. et al. vs. De Dietrich Import Co. et al., 159 Fed. Rep. 492 (1908). 23. Motor World, IX (January 12, 1905), 651; X (June i, 1905), 421; Detroit Free Press, January 13, 1905. 24. Horseless Age, XVII (February 28, 1906), 340. 25. W. A. P. John, "By His Works Ye Shall Know Him," Motor, XXXVIII (August, 1922), 76; Automobile Topics LXIV, (January 21, 1922), 893. 26. Selden Case Record, III, 1131-1132. 27. Dodge vs. Commissioner of Internal Revenue, Transcript of Hearings, 679680; Automobile, XVI (May 2, 1907), 735-736; Motor World, XVI (June 20, 1907), 515. The Parker Papers contain memoranda indicating that many of these independent companies retained Parker as defense counsel. Among them were Reo, Crawford, Welch, Aerocar, Mitchell, Maxwell-Briscoe, and Dayton. 28. Motor World, XVI (May 16, 1907), 287. 29. Horseless Age, XX (August 21, 1907), 253-254. The Pope assets amounted to $17,000,000, of which $14,000,000 was for "good will." 30. Horseless Age, XX (December n, 1907), 851; XX (December 18, 1907), 875; Motor World, XVII (December 12, 1907), 567-568; Commercial and Financial Chronicle, LXXXV (December 14, 1907), 1521. 31. Horseless Age, XX (December 18, 1907), 859-861. 32. Motor World, XVII (January 16, 1908), 733-734; Horseless Age, XXI (January 22, 1908), 100. 33. Motor World, XVIII (April 30, 1908), 141-142; XVIII (June n, 1908), 343-344; Automobile, XVIII (May 7, 1908), 653; "Third Agreement Supplemental to Articles of Agreement of A.L.A.M.," Selden Case Record, XIV, 4655-4666. 34. Motor World, XVIII (May 7, 1908), 173-174. 35. Automobile, XIX (December 24, 1908), 903. 36. Selden Case Record, Oral Argument of Samuel R. Belts at Trial Hearing, 8-9; New York World, April 4, 1909. It was estimated that up to the summer of 1909 some $2,000,000 in royalities had been paid under the Selden patent (Horseless Age, XXIV [September 22, 1909], 313). 37. Detroit News-Tribune, February 11, 1906. 268

Notes to Pages 189-201 38. Motor World, X (March 30, 1905), 19; Detroit Free Press, May 10, 1905. 39. Henry Ford, "Arranging to Build 20,000 Runabouts," Automobile, XIV (January n, 1906), 107 ff. 40. Motor Age, X (August 16, 1906), 7. 41. Detroit Journal, January 5, 1906. 42. Cycle and Automobile Trade Journal, XIV (December i, 1909), 128. 43. Selden Case Record, XVIII, 1471; Henry Ford, in collaboration with Samuel Crowther, My Life and Work (Garden City, N.Y., 1923), p. 63; James Couzens, "What I Learned About Business from Ford," System, XL (September, 1921), 263. 44. This computation is based upon data drawn from the following: "Ford Motor Company, Statistics as of Nov. 30, 1939," in folder, "W. J. Cameron—Statistics," Controller's Office Files, Ford Motor Company; "List Prices of Ford Automobiles and Trucks, 1903-1925, Inclusive," Auditing Files, Accession 33, Box 41; Secretary's Report, September 30, 1904, Minute Books, Ford Motor Company, Accession 85, Ford Archives. 45. Motor World, XVII (October 17, 1907), 105 ff. 46. Henry Ford, "Selden Patent Does Not Control All Gasolene Cars," New York Herald, May 24, 1905. A clipping of this advertisement in the Parker Papers bears the notation in Parker's hand, "Written by R. A. Parker." 47. Henry Ford, "Ford Against Selden Patent," Detroit News-Tribune, February 17, 1907; "What Henry Ford Has to Say in Reply," Automobile, XVI (May 2, 1907), 735-736. 48. Cycle and Automobile Trade Journal, X (January i, 1906), 108. 49. "Why Henry Ford Fought the Selden Patents," New York Herald, January 14, 1906. 50. Ford, "Ford Against Selden Patent," as cited in note 47. 51. Selden Case Record, VI, 3102; Motor World, XIII (August 9, 1906), 439.

CHAPTER IX ARGUMENT AND DECISION 1. R. A. Parker to Henry Ford, February 8, 1909, Fair Lane Papers, Accession i, Box 142, Ford Archives. 2. Hamilton, Patents and Free Enterprise, TNEC Monograph No. 31 (Washington, 1941), p. 131. 3. Van Vechten Veeder, "Charles Merrill Hough," Dictionary of American Biography, IX, 249-250; X. P. Huddy, "What the Selden Patent Decision Decided," Automobile, XXII (March 24, 1910), 602. 4. Selden Case Record, Oral Argument of Samuel R. Betts at Trial Hearing, 11. 5. Ibid., 22. 6. Selden Case Record, Oral Argument of R. A. Parker at Trial Hearing, 119, 122. 7. Ibid., 10, 47-48. 8. New York Herald, Sun, June 2, 1909; Selden Case Record, Oral Argument of W. Benton Crisp at Trial Hearing, Go; Oral Argument of William A. Redding at Trial Hearing, 21-22, 32; statement by Frederic R. Coudert to Ford Motor Company History Project, Columbia University, January 21, 1953. 9. Motor World, XX (June 10, 1909), 405; Selden Case Record, Frederic R. Coudert et al, Trial Brief, 376, 379.

261)

Notes to Pages 202-219 10. Selden Case Record, Oral Argument of Frederick P. Fish at Trial Hearing, 14, 28, 38, 51. (Fish's italics.) 11. Ibid., 73-74. 12. Selden Case Record, Frederick P. Fish et al., Trial Brief, 132. (Italics mine.) 13. Ibid., 116-117, 1^414. Selden Case Record, R. A. Parker, Trial Brief, 178. (Parker's italics.) 15. Ibid., 509. (Parker's italics.) 16. Electric Vehicle Co. et al. vs. C. A. Duerr et al., 172 Fed. Rep. 923 (1909). 17. Motor World, XX (September 16, 1909), 1053. 18. Horseless Age, XXIV (September 22, 1909), 313. 19. Gaston Plantiff to Henry Ford, September 16, 1909, Fair Lane Papers, Accession i. Box 142, Ford Archives. 20. Detroit Journal, September 16, 1909. 21. Detroit News, October 19, 1909. 22. Motor World, XX (September 16, 1909), 1036; Horseless Age, XXVII (January 18, 1911), 25. 23. Detroit News-Tribune, September 26, 1909. 24. Motor World, XX (September 23, 1909), 1099; W. J. Morgan, "Selden Contest a Vital Issue," New York Globe and Commercial Advertiser (undated clipping [c. October, 1909], in scrapbook, Parker Papers). 25. Henry Ford to Gibson Auto Company, Indianapolis, September 16, 1909, Fair Lane Papers, Accession i, Box 142, Ford Archives; Motor World, XX (September 16, 1909), 1054, 1064; W. J. Cameron, "Liberating an Industry," in A Series of Talks Given on The Ford Sunday Evening Hour, 1034-1935, p. 52; MacManus and Beasley, Men, Money, and Motors, pp. 70-72. 26. Detroit Journal, July 23, 1910. 27. R. A. Parker to Henry Ford, October 26, 1909, Henry Ford Office Files, Accession 2, Box 31, Ford Archives. 28. Statements made by Grace E. Parker and Ralzemond D. Parker to Ford Motor Company History Project, Columbia University, 1953. 29. Motor Age, XVI (October 7, 1909), 7; Motor World, XXI (October 14, 1909), 101; Detroit News, February 3, 1910. 30. Motor World, XXI (December 2, 1909), 469; XXIII (April 14, 1910), 78; Cycle and Automobile Trade Journal, XIV (February i, 1910), 161; Horseless Age, XXV (February 2, 1910), 193. 31. Detroit News, February 9, 1910. 32. Statement by Frederic R. Coudert to Ford Motor Company History Project, Columbia University, January 21, 1953. 35. C. D. Paxson to Newton H. Davis, October 14, 1909; Davis to Paxson, October pany, January 25, 28, 1910, Accession 85, Ford Archives; Ford, My Life and Work, p. 63; Detroit Journal, February 12, 1910. 34. Detroit Free Press, March i, 1910. 35. C. D. Paxson to Newton H. Davis, October 14, 1909; Davis to Paxson, October 15, 1909, Ford Times, III (November i, 1909), 6-7. 36. The initial A.L.A.M. advertisements appeared in Eastern newspapers on February 7, 1910. 37. Detroit Journal, February 26, 1910. 38. Detroit News, Journal, February 24, 1910. 39. Horseless Age, XXV (March 2, 1910), 329; XXV (March 9, 1910), 379. 40. W. H. Schilder to Alfred Reeves, May 21, 1910, Ford Times, III (June i, 1910), back cover. 270

Notes to Pages 2/9-23^ 41. Motor Age, XVII (February 17, 1910), g; Dodge vs. Commissioner of Internal Revenue, Transcript of Hearings, 682; Detroit Journal, February 26, April 21, June 4, 1910; Detroit News, April 21, igio. 42. Motor Age, XVIII (July 7, igio), 6. 43. Detroit Journal, April ig, igio; Motor Age, XVIII (July 7, 1910), 6-7 44. Motor World, XXIV (September 15, igio), 67g; Detroit News, September 22, igio. 45. Motor World, XX (June 17, igog), 447-448; XXII (February 3, igio), 341-342. 46. Ibid., XXIV (July 21, igio), 157-158; XXIV (August 18, 1910), 410; Selden Case Record, XXI, 306-358. 47. W. J. Morgan, "Selden Patent War Nears End," New York Globe and Commercial Advertiser, December 24, igio. 48. Robert E. Cushman, "Walter Chadwick Noyes," Dictionary of American Biography, XIII, 5gi~5g2. 49. Selden Case Record, Oral Argument o£ Frederic R. Coudert in Behalf of Appellants, 4. Except where otherwise noted, Coudert's statements in the text are quoted from this source, from his appellate brief, and from a typescript of his argument in the Coudert office files. 50. Statement by Coudert to Ford Motor Company History Project, Columbia University, January 21, 1953. 51. The quoted passage is in Dugald Clerk, The Gas, Petrol, and Oil Engine (New and rev. ed.; 2 vols.; New York, igog-igi3), I, 2g. 52. After the Court of Appeals handed down its decision, Coudert asked Judge Noyes whether the passage in Clerk's volume had influenced the findings of the court. Noyes smilingly replied: "Well, of course we took account of it, and when Betts and his associates didn't rebut what you brought out, Clerk didn't have very much credit with us." Frederick P. Fish afterwards sent Coudert a note praising his oral argument as "a fine piece of work, excellently organized, very well delivered" (Coudert statement to Ford Motor Company History Project, Columbia University, January 21, 1953). 53. Columbia Motor Car Co. et al. vs. C. A. Duerr et al., 184 Fed. Rep. 893 (1911).

CHAPTER X

PATH OF PROGRESS 1. Motor World, XXVI (January 12, 1911), 186; Motor Age, XIX (January 12, 1911), 3. 2. Ford Times, IV (February, 1911), 175-178; Fair Lane Papers, Accession i, Box 142, Ford Archives. 3. Minute Books, Ford Motor Company, April 21, 1911, Accession 85, Ford Archives. 4. During the course of the suit Parker was subjected to petty annoyances by the suspicious and irascible James Couzens, business manager of the Ford Motor Company. Parker's son states: "Couzens was a thorn in my father's side. He seemed constantly to pester him about expenses. This interfered with important matters. I have seen records of his complaints about costs and hints that it would have been less expensive to have paid royalties to the Association. I think Couzens deserves little or no credit for putting back-bone into the fight. He was a clerk" (Letter from 271

Notes to Pages 234-241 Ralzemond D. Parker to Ford Motor Company History Project, Columbia University, April 12, 1953). 5. Detroit Journal, January n, 1911. 6. New York Times, Herald, January 13, 1911; Motor Age, XIX (January 19, 1911), 18-19. 7. Ford Times, IV (February, 1911), 172 ff.; Detroit Journal, January 18, 1911. 8. Rochester Democrat, January 10, 1911. 9. Engineering News, LXV (January 19, 1911), 79; New York Tribune, January 10, 1911. 10. Henry R. Selden, "Selden's Contribution to the Automobile," ms. (photostat), February, 1940, Automotive History Collection, Detroit Public Library. 11. Allan L. Benson, The New Henry Ford (New York and London, 1923), pp. 158-160. 12. Detroit Journal, January n, 1910; see also Ford Times, IV (July, 1911), 292-293, for an amplification of the theme that the company was an exponent of "liberty and independence in the manufacturing world." 13. Affidavit of Norval A. Hawkins, June 26, 1925, Dodge Estate Legal Papers, Accession 96, Box 11, Ford Archives; Dodge vs. Commissioner of Internal Revenue, Transcript of Hearings, 1577-1586, 1679-1680. 14. Charles Merz, And Then Came Ford (Garden City, N.Y., 1929), p. 55. (Copyright 1929 by Doubleday & Company, Inc. Reprinted by permission of the publisher.) 15. Max Lerner, ed., The Mind and Faith of Justice Holmes (Boston, 1948), p. 383. 16. Harold G. Vatter, "The Closure of Entry in the American Automobile Industry," Oxford Economic Papers, new series, IV (October, 1952), 213-234. 17. Donald McLeod Lay, "Milestones—A Master Stride Made by a World's Industry," Automobile, XXIX (August 28, 1913), 361-365; Literary Digest, LI (August 28, 1915), 445-446; Scientific American, CXXIV (January i, 1921), i; Automobile Manufacturers Association, Automobile Facts and Figures (32nd ed.; Detroit, 1952), P- 318. Undated communication (c. 1911), R. A. Parker to Henry M. Campbell, Parker Papers. 19. Epstein, The Automobile Industry, p. 232. Epstein does not specify whether this estimate includes the back royalties paid by the independents who settled with the A.L.A.M. in 1909-1910. According to other reliable data, a total of $4,320,452 was paid in Selden royalties up to the end of 1909 (Alfred Reeves to Roy D. Chapin, March 14, 1910, Box VI, Chapin Papers). 20. Horseless Age, XX (September n, 1907), 341. However, Hermann F. Cuntz, who states that Selden received between $600,000 and $700,000, categorically denies that Selden sold his remaining interest in the patent (Memorandum from Cuntz to author, October 5, 1954). 21. Motor World, XVI (April 11, 1907), 63; XXVI (January 12, 1911), 186; "Selden Patent Expenses," Account No. 180, Auditing Files, Accession 33, Box 41, Ford Archives. 22. Automobile, XXVI (April 18, 1912), 914-915; L. H. Baekeland, "The Abuses of Our Patent System," Scientific American Supplement, LXXIII (June i, 1912), 346347; Waldemar A. Kaempffert, "Our Defective Patent System," Outlook, CI (July 6, 1912), 548-551. 23. R. A. Parker, "The Selden Case and Its Voluminous Record," Scientific American, CVI (April 6, 1912), 307.

272

Notes to Pages 241-251 24. As cited in note 18. 25. Motor Age, XXII (November 21, 1912), 28. 26. Horseless Age, VI (May 2, 1900), 20; Motor Age, III (January 30, 1901), 934935-

27. License Agreement and Memoranda re New York Gear Works and Ford Motor Co., December 5, 1905, Henry Ford Office Files, Accession 285, Box 239, Ford Archives. This agreement stipulated the payment of one dollar to the inventor, Frederic J. Bell, for each transmission used by Ford. When Ford failed to pay royalties, Bell filed an infringement suit, but later settled with the company (E. G. Liebold to W. G. Moore, December 7, 1923, ibid.). 28. Motor World, XXI (December 30, 1909), 709. 29. Automobile, XXV (December 21, 1911), 1102. 30. Horseless Age, XXIX (April 3, 1912), 626. 31. Automobile Topics, XL (January 22, 1915), 1082. 32. Quoted in Stocking and Watkins, Monopoly and Free Enterprise, p. 457, n. 19. 33. "In the Matter of the Cross License Agreement," December 28, 1914, Chapin Papers; "Agreements and Papers Relating to the Patents Cross-Licensing Agreement in Effect in the Automobile Industry," Automotive History Collection, Detroit Public Library; Federal Trade Commission, Report on Motor Vehicle Industry, 76th Cong., ist Sess., House Document No. 468 (Washington, 1939), pp. 58-63. 34. C. A. Welsh, "Patents and Competition in the Automobile Industry," Law and Contemporary Problems, XIII (Spring, 1948), 271-272. 35. Hamilton, Patents and Free Enterprise, p. 122. 36. Wrillis B. Rice, "Decay of Our Patent System," Brooklyn Law Review, V (May, 1936), 372, 388. 37. Judson C. Welliver, "Henry Ford, Dreamer and Worker," American Review of Reviezus, LXVI (November, 1921), 493. 38. New York Times, October 7, 1925. 39. Welliver, "Henry Ford, Dreamer and Worker," 481. 40. New York Times, March 18, 1928. 41. TNEC Hearings, Part 2: Patents, p. 331. 42. Ernest G. Liebold to John F. Bible, November 17, 1922, Henry Ford Office Files, Accession 285, Box 84; Reminiscences of Lloyd Sheldrick, Oral History Section, Ford Archives. 43. U.S. Circuit Court of Appeals for the Sixth Circuit: Ford Motor Company vs. Parker Rust Proof Company, Transcript of Record on Appeal, II, 2192, 2193, 2200-2202; New York Times, January 18, 1928; Vincent Bendix to C. E. Sorensen, July 5, 1929, Charles E. Sorensen Production Records, Accession 38, Box 114; J. Crawford to Edsel B. Ford, February 13, 1930, ibid., Accession 38, Box 116; Reminiscences of J. L. McCloud and Theodore Gehle, Oral History Section, Ford Archives. 44. Gordon Fraser, "Ford Patents," Ford Sunday Evening Hour, March 24, 1946, American Broadcasting Company. 45. William Atherton DuPuy, "If I Ran the Railroads—Ford," Nation's Business, IX (November, 1921), 7-8. 46. Ernest C. Kanzler to P. P. Barolin, March 20, 1919, Henry Ford Office Files, Accession 62, Box 109, Ford Archives. 47. Herbert Hoover, "Industrial Standardization," in Edward Eyre Hunt, ed., Scientific Management Since Taylor (New York and London, 1924), p. 189. 48. Motor World, XXIV (August 4, 1910), 287. 49. Henry B. Joy to J. W. Packard, March 10, 1903, Joy Papers.

277

Notes to Pages 253-253 50. See, for instance, A.L.A.M. Mechanical Branch, Bulletins i^-z^C, Reports of Tests 1-14, II, February, 1906—January, 1907 (copy in Automotive History Collection, Detroit Public Library). 51. Automobile, XX (April 22, 1909), 660. 52. John K. Barnes, "The Men Who 'Standardized' Automobile Parts," World's Work, XLII (June, 1921), 206-207. 53. See B. B. Bachman, "S.A.E. Standards," Journal of the Society of Automotive Engineers, IX (December, 1921), 355-356; "S.A.E.," Fortune, XXXVIII (August, 1948), 79 ft.; George V. Thompson, "Intercompany Technical Standardization in the Early Automobile Industry," Journal of Economic History, XIV (Winter, 1954), 1-20.

2J4

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COLLECTIONS

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PUBLIC DOCUMENTS AND LEGAL RECORDS Before the Solicitor of Internal Revenue. In re Valuation of Ford Motor Company Stock as of March i, 1913. Hearings held at Washington, D.C., June 29-30, 1925. (Copy in Accession 84, Box 2, Ford Archives.) Federal Trade Commission. Report on Motor Vehicle Industry. y6th Cong., ist Sess., House Document No. 468. Washington, 1939. Michigan Bureau of Labor and Industrial Statistics. Twenty-third Annual Report, Lansing, 1906. Michigan, State of. In the Circuit Court for the County of Macomb: Henry Ford vs. The Tribune Company et al., 1919. Transcript of Record. (Copy in Accession 53, Ford Archives.) 275

Monopoly on Wheels . Transcript of Certain Articles by Charles N. Wheeler, Appearing in the "Chicago Tribune," Relating an Interview with Mr. Ford, and Other Articles. Michigan Supreme Court Records and Briefs, Vol. 204, January Term, 1919: John F. Dodge and Horace E. Dodge vs. Ford Motor Company, Henry Ford et al. Sixty-second Congress, 3rd Sess. President's Commission on Economy and Efficiency, Report of the Investigation of the United States Patent Office. House Document No. 1110. Washington, 1912. Twenty-second Congress, ist Sess. Report on Steam Carriages, by a Select Committee of the House of Commons of Great Britain: With the Minutes of Evidence and Appendix. House Document No. 101. Washington, 1832. U.S. Board of Tax Appeals: Estate o£ John F. Dodge et al. vs. Commissioner of Internal Revenue. Docket Nos. 4640, etc. Transcript of Hearings held at Washington, D.C., January n-February 25, 1927. (Copy in Automotive History Collection, Detroit Public Library.) U.S. Bureau of the Census. Census of Manufactures, 1905. Bulletin 66: Automobiles and Bicycles and Tricycles. Washington, 1907. . Thirteenth Census of the United States . . . 1910. Washington, 1912-1914. U.S. Census Office. Eleventh Census of the United States . . . 1890. Washington, 1892-1897. . Twelfth Census of the United States . . . /poo. Washington, 1901-1902. U.S. Circuit Court, Eastern District of Michigan, Southern Division: Ford Motor Company vs. Cadillac Motor Car Company, Equity Case 4024, 1909. (Federal Records Center, Chicago.) U.S. Circuit Court of Appeals for the Second Circuit: Columbia Motor Car Company and George B. Selden vs. C. A. Duerr & Company and Ford Motor Company et al. Equity Cases 168, etc. Transcript of Record on Appeal from the Circuit Court of the United States for the Southern District of New York. Cited in the notes as "Selden Case Record." The Selden patent case consisted of five separate suits in equity commenced in 1903 and 1904 by the Electric Vehicle Company as principal complainant and continued in and after 1909 by its corporate successor, The Columbia Motor Car Company. Of the five actions, three were informally designated "Ford suits," and the remaining two as "Panhard suits." The issues and proceedings in each suit were essentially the same. To a considerable degree, the testimony in the Panhard group was directly stipulated from the Ford cases. At the hearing on appeal, all of the cases were argued from a single printed record. The legal proceedings in the trial court (U.S. Circuit Court for the Southern District of New York) were instituted in the following order:

"FORD SUITS" Electric Vehicle Company and George B. Selden vs. C. A. Duerr & Company and Ford Motor Company. Equity Case 8566. Bill of complaint filed October 22, 1903. Same complainants vs. O. J. Gude Company. Equity Case 8579. Bill of complaint filed November 5, 1903. ame complainants complainant vs. John Wanamaker, L. Rodman Wanamaker, Thomas B. Same Wanamaker, am and Robert C. Ogden. Equity Case 8638. Bill of complaint filed January 21, 1904

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"PANHARD SUITS" Same complainants vs. Soci^te Anonyme des Anciens Establissements Panhard & Levassor, and Andre Massenat. Equity Case 8616. Bill of complaint filed December 28, 1903. Same complainants vs. Henry & A. C. Neubauer. Equity Case 8901. Bill of complaint filed November 12, 1904. Under direction of the clerk of the appellate court, the testimony and exhibits for the complainants and defendants, in addition to miscellaneous papers, were arranged in twenty-two volumes. These were paginated as follows: Vols. I-VIII, inclusive (pp. 1-3888), comprising complainants' opening and rebuttal testimony and exhibits in the "Ford suits"; Vols. IX-XV, inclusive (pp. 1-5060), comprising defendants' opening and rebuttal, testimony and exhibits in the "Ford suits," and the opinion of the district court; and Vols. XVI-XX, inclusive (pp. 1-2795), comprising complainants' and defendants' testimony in the "Panhard suits." Vols. XXI and XXII, which include papers on application to file supplemental bills, appeal papers, and cognate matter, arc paginated separately. All citations to the Selclen Case Record in the present work follow the pagination authorized by the appellate court. The judicial opinions rendered in 1909 and 1911 are cited from the appropriate volumes of the Federal Reporter. There is no formal collection of the entire record under a single head which includes the briefs and the printed oral arguments. These have been designated by the author as "trial" and "appellate" and have been prefixed by the name or names of the attorneys who presented them to the court. The author has used the admirably full set of the Selden Case Record deposited at the Ford Archives. The set at the Automotive History Collection of the Detroit Public Library is complete except for most of the briefs and printed oral arguments. U.S. Circuit Court of Appeals for the Sixth Circuit: Ford Motor Company vs. Parker Rust Proof Company. Transcript of the Record (n.d.) on Appeal from the District Court of the United States for the Eastern District of Michigan. (Copy in Legal Cases, Accession 84, Ford Archives.) U.S. Congress. Temporary National Economic Committee, Investigation of Concentration of Economic Power. Hearings, Part 2: Patents. 75th Cong., 3d Sess. Washington, 1939. . Hearings, Part 3: Patents. 76th Cong., ist Sess. Washington, 1939. . Monograph No. 21. Clair Wilcox, Competition and Monopoly in American Industry. y6th Cong., 3d Sess., Senate Committee Print. Washington, 1940. . Monograph No. 31. Walton Hamilton, Patents and Free Enterprise. 76th Cong., 3d Sess., Senate Committee Print. Washington, 1941. U.S. Industrial Commission. Preliminary Report on Trusts and Industrial Combinations. Part I. 56th Cong., ist Sess., House Document No. 476. Washington, 1900. . Report of the United States Industrial Commission. Vol. X. 57th Cong., ist Sess., House Document No. 178. Washington, 1901. U.S. Patent Office. A List of Patents Granted by the United States from April 10, 1790, to December 31, 1836. Washington, 1872. . Annual Report of the Commissioner of Patents for the Year i88-j. Washington, 1888. . Annual Report of the Commissioner of Patents for the Year 1894, Washington, 1895. 277

Monopoly on Wheels . Annual Report of the Commissioner of Patents for the Year iHg>j. Washington, 1896. - . Annual Report of the Commissioner of Patents for the Year i^ffj. Washington, 1898. . Annual Report of the Commissioner of Patents for the Year 1910. Washington, 1911. . Centennial Celebration of the American Patent System. Washington, 1937. . Official Gazette of the United Stales Patent Office. Washington, 1875—. . United States Patent Law Sesquicentennial Celebration. Washington, 1941. —• . Report of the Commissioner of Patents for the Year r8.f6. Washington, n.d. . Report of the Commissioner of Patents for the Year 1855. Arts and Manufactures, I. Washington, 1856. . The Story of the American Patent System, 1700-1952. Washington, 1953. -. Subject-Matter Index of Patents for Inventions Issued by the United States Patent Office. 3 vols. Washington, 1874.

BOOKS AND

PAMPHLETS

Ackerman, Carl W. George Eastman. Boston and New York, 1930. Anderson, Rudolph E. The Story of the American Automobile. Washington, 1950. Appleton's Annual Cyclopaedia, 1876. New York, 1877. Arnold, Thurman W. The Folklore of Capitalism. New Haven, 1937. Ashton, Thomas Southcliffe. Iron and Steel in the Industrial Revolution. Manchester, London, and New York, 1924. Association o£ Licensed Automobile Manufacturers. What Is the Selden Patent on Gasoline Automobiles? n.p., 1910. (Pamphlet.) Automobile Manufacturers Association. Automobile Facts and Figures, gand ed. Detroit, 1952. (Pamphlet.) Barnett, Otto Raymond. Patent Property and the Anti-Monopoly Laws. Indianapolis, '943Bathe, Greville and Dorothy. Oliver Evans. Philadelphia, 1935. Beaumont, W. Worby. Motor Vehicles and Motors. London and Philadelphia, 1900. Bennett, William B. The American Patent System. Baton Rouge, 1943. Benson, Allan L. The New Henry Ford. New York and London, 1923. Burlingame, Roger. Backgrounds of Power. New York and London, 1949. - . Engines of Democracy. New York, 1940. - . Henry Ford. New York, 1955. Burns, Arthur Robert. The Decline of Competition. New York and London, 1936. Cameron, W. J. A Series of Talks Given on the Ford Sunday Evening Hour, 1934-1935. Dearborn, Michigan, 1935. Carpenter, Rolla C., and H. Diederichs. Internal Combustion Engines, grd and rev. ed. New York, 1910. Casson, Herbert N. The History of the Telephone. 8th ed. Chicago, 1913. - . The Romance of Steel. New York, 1907. Chronicle of the Automotive Industry in America, Rev. ed. Cleveland, 1946. (Pamphlet.) Clerk, Dugald. The Gas Engine. 2nd ed. New York, 1887. --. The Gas, Petrol, and Oil Engine. New and rev. ed. 2 vols. New York, 1909Cleveland, Reginald, and S. T. Williamson. The Road Is Yours. New York, 1951. 278

Bibliography Clymer, Floyd. Motor Scrapbook. 6 vols. Los Angeles, 1944-1950. Cohn, David L. Combustion on Wheels. Boston, 1944. Colvin, Fred H., in collaboration with D. J. Duffin. 60 Years with Men and Machines: An Autobiography. New York and London, 1947. Copley, Frank Barkley. Frederick W. Taylor: Father of Scientific Management. 2 vols. New York, 1923. Cressy, Edward. A Hundred Years of Mechanical Engineering. New York, 1937. Donkin, Bryan. A Text-Book on Gas, Oil, and Air Engines. 5th ed. London, 1911. Doolittle, James Rood, ed. The Romance of the Automobile Industry. New York, 1916. Doifman, Joseph. The Economic Mind in American Civilization, 3 vols. New York, 1946-1949. Drews, Gustav. The Patent Right in the National Economy of the United States. New York, 1952. Duncan, H. O. The World on Wheels. 2 vols. Paris, c. 1927. Duryea, J. Frank. America's First Automobile. Springfield, Mass., 1942. (Pamphlet.) . Data Relative to the Development of America's First Automobile, n.p., n.d. (Brochure in Automotive History Collection, Detroit Public Library.) -. Who Designed and Built Those Early Duryea Cars? n.p., n.d. (Pamphlet.) Eddy, Arthur. The New Competition. New York, 1912. Edwards, Corwin D. Maintaining Competition: Requisites of a Governmental Policy. New York, Toronto, and London, 1949. Epstein, Ralph C. The Automobile Industry: Its Economic and Commercial Development. Chicago and New York, 1928. Fletcher, William. English and American Steam Carriages and Traction Engines. London and New York, 1904, . The History and Development of Steam Locomotion on Common Roads. London and New York, 1891. Flint, Charles R. Memories of an Active Life, New York and London, 1923. Folk, George E. Patents and Industrial Progress. New York, 1942. Ford Dealer Story. Detroit, 1953. (Pamphlet.) Ford, Henry, in collaboration with Samuel Crowther. My Life and Work. Garden City, N.Y., 1923. . Today and Tomorrow. Garden City, N.Y., 1926. Fox, Harold G. Monopolies and Patents. Toronto, 1947. Garrett, Caret. The Wild Wheel. New York, 1952. Gibbons, Herbert Adams. John Wanamaker. 2 vols. New York and London, 1926. Gibson, C. R. The Motor Car and Its Story. Philadelphia, 1927. Gilfillan, S. C. The Sociology of Invention. Chicago, 1935. Glasscock, G. B. The Gasoline Age. Indianapolis and New York, 1937. Hamilton, J. G. de Roulhac. Henry Ford. New York, 1927. Harriman, Norman F. Standards and Standardization. New York and London, 1928. Hasluck, Paul N., ed. The Automobile. New and enlarged ed. London, 1903. Hirsch, Mark D. William C. Whitney: Modern Warwick. New York, 1948. Hiscox, Gardner D. Horseless Vehicles, Automobiles, Motor Cycles. London, 1900. Hofstadter, Richard. The American Political Tradition and the Men Who Made It. New York, 1948. Homans, James E. Self-Propelled Vehicles. New York, 1905. Hunt, Edward Eyre, ed. Scientific Management Since Taylor. New York and London, 1924.

27.9

Monopoly on Wheels Hutchinson, William T. Cyrus Hall McCormick. 2 vols. New York and London, i93°->935Industrial Standardization. New York, 1929. Ingram, J. S. The Centennial Exposition. Philadelphia, 1876. Jenkins, Rhys. Motor Cars and the Application of Mechanical, Power to Road Vehicles. London and New York, 1902. Jessup, Philip C. Elihu Root. 2 vols. New York, 1938. Johnson, Allen, et al., eds. The Dictionary of American Biography. New York, 1928—. Keiper, Frank. Pioneer Inventions and Pioneer Patents. 2nd ed. Rochester, N.Y., 1924. Kelly, Fred C. The Wright Brothers. New York, 1943. Kennedy, E. D. The Automobile Industry. New York, 1941. Kurzel-Runtscheiner, Erich. Siegfried Marcus. Vienna, 1928. Lief, Alfred. The Firestone Story. New York, Toronto, and London, 1951. Long, J. C. Roy D. Chapin. Privately printed, 1945. McCabe, James D. The Illustrated History of the Centennial Exhibition. Philadelphia, 1876. McCIoy, Shelby T. French Inventions of the Eighteenth Century. Lexington, Ky., "952McClure, S. S. My Autobiography. New York, 1914. McElroy, Robert. Levi Parsons Morton. New York and London, 1930. McKelvey, Blake. Rochester, The Flower City, 1855-1890, Cambridge, Mass., 1949. MacManus, Theodore F., and Norman Beasley. Men, Money and Motors. New York and London, 1929. Marquis, Samuel S. Henry Ford: An Interpretation. Boston, 1923. Maxim, Hiram Percy. Horseless Carriage Days. New York and London, 1937. Merz, Charles. And Then Came Ford. Garden City, N.Y., 1929. Mirsky, Jeannette, and Allan Kevins. The World of Eli Whitney. New York, 1952. National Cyclopaedia of American Biography. New York, 1893—. National Industrial Conference Board. Trade Associations: Their Economic Significance and Legal Status. New York, 1925. Nelson, Milton Nels. Open Price Associations. University of Illinois Studies in the Social Sciences, X. Urbana, 111., 1922. Nevins, Allan, with the collaboration of Frank Ernest Hill. Ford: The Times, the Man, the Company. New York, 1954. New England Cotton Manufacturers' Association. Proceedings of the Seventeenth Annual Meeting, 1882. Boston, 1882. Nixon, St. John C. The Invention of the Automobile: Karl Benz and Gottlieb Daimler. London, 1936. Non-Partisan Ford-For-Senator Club. Henry Ford for United States Senator, n.p., 1918. (Pamphlet.) Passer, Harold C. The Electrical Manufacturers, iSy^-Kjoo. Cambridge, Mass., 1953. Pound, Arthur. The Turning Wheel. Garden City, N.Y., 1934. Prindle, Edwin J. Patents as a Factor in Manufacturing. New York, 1908. Purdy, Ken W. The Kings of the Road. Boston, 1952. Quaife, Milo M. The Life of John Wendell Anderson. Detroit, 1950. Richards, William C. The Last Billionaire. New York, 1948. Robinson, William C. Treatise on the Law of Patents for Useful Inventions. 3 vols. Boston, 1890. 280

Bibliography Seltzer, Lawrence H. A Financial History of the American Automobile Industry. Boston and New York, 1928. Shannon, Fred A. The Farmer's Last Frontier: Agriculture, i86o-i8t)'j, \7ol. V in The Economic History of the United States, eds. Henry David et al. New York and Toronto, 1945. Siebertz, Paul. Gottlieb Daimler: Ein Revolutiondr der Technik. Munich and Berlin, 1941. Simonds, William A. Henry Ford. Indianapolis and New York, 1943. Sinsabaugh, C. G. Who, Me? Detroit, 1940. Smiles, Samuel. Industrial Biography. Boston, 1864. — . Lives of Boulton and Watt. Philadelphia and London, 1865, Souvestre, Pierre. Histoire de I'Automobile. Paris, 1907. Stephen, Leslie, et al., eds. The Dictionary of National Biography. London and New York, 1885—. Stocking, George W., and Myron W. Watkins. Monopoly and Free Enterprise. New York, 1951. Stratton, Ezra. The World of Wheels. New York, 1878. Sward, Keith. The Legend of Henry Ford. New York, 1948. Talbot, Frederick A. Motor-Cars and Their Story. London and New York, 1912. Thurston, Robert H. A History of the Growth of the Steam-Engine. Centennial ed. Ithaca, N.Y., and London, 1939. Uzanne, Octave. La Locomotion a travers I'Histoire et les Moeurs. Paris, 1900. Vaughan, Floyd L. Economics of Our Patent System. New York, 1925. . The United States Patent System: Legal and Economic Conflicts in American Patent History. Norman, Okla., 1956. Walker, Albert H. Text-Book of the Law of Patents for Inventions. 5th ed. by John H. Hilliard and Eugene Eble\ New York, 1917. \Vallis-Taylor, A. J. Motor Carriages and Power Carnages for Common Roads. London, 1897. Weber, Gustavus A. The Patent Office. Baltimore, 1924. (Institute for Government Research. Service Monographs o£ the United States Government, No. 31.) Wood, Laurence I. Patents and Antitrust Law. New York, 1942. Woods, C. E. The Electric Automobile. Chicago and New York, 1900. Yarnell, Duane. Auto Pioneering. New York, 1949. Young, Charles Frederic T. The Economy of Steam on Common Roads. London, 1860.

TRADE AND TECHNICAL PERIODICALS A.L.AM. Digest of Current Technical Literature American Electrician American Machinist Automobile Automobile and Motor Review Automobile Magazine Automobile Topics Automobile Trade Journal 381

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NEWSPAPERS Chicago Inter-Ocean Chicago Times-Herald Cleveland Plain Dealer Detroit Free Press Detroit Journal Detroit News Hartford Daily Courant Hartford Times New York Evening Mail New York Evening Post New York Globe and Commercial Advertiser New York Herald New York Sun New York Sunday American New York Times New York Tribune New York World Rochester (N.Y.) Democrat and Chronicle Springfield (Mass.) Evening Union s8z

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20.0

Index Abbott Motor Co., 219 Aerocar Co., 171, 184 A.L.A.M. See Association o£ Licensed Automobile Manufacturers Albany, New York, 181 Allen, Walter G., 181-82 Allen-Kingston car, 181 Allison, Fred, 163, 164 A.M.C.M.A. See American Motor Car Manufacturers' Association American Automobile Co., 53 American Bicycle Co., 65 American Darracq Co., 123 American Machinist, 35 American Mors automobile company, 171 American Motor Car Manufacturers' Association: established, 171; membership, 171, 214; trade association objectives, 172; price policies, 173; and low-priced market, 175; defections and collapse, 213-14 American Projectile Co., 35, 61 American Steel and Wire Co., 88 American Telephone and Telegraph Co., 201 Anderson, John Wendell, 107-8, 110, "5 Anhut Automobile Company, 219 Apperson, Elmer, 77, 132, 142 Apperson Brothers, 34 Apperson Brothers Automobile Co., 92, 97 Ardmore, Pennsylvania, 78 Arnold, Thurman: on patent law, 130 Association of Licensed Automobile Manufacturers: founded, 97; officers and terms of agreement, 97-99; membership, 97, 115, 123, 174, 214, 217; restrictive policy under Selden patent,

100-2, 141-43; exclusive agency clause, 102, 175-76; threats and warnings of infringement suits, 102-3, 1 J 4> J ^3> and luxury market, 103, 174-75; factors in rejection of Ford's membership application, 107-8, 109, 111, 112; advertising and publicity campaign, 118-19, 216-17, 218-19; attacked by Ford Motor Co., 120-21, 193-94, 217-18; commences Ford and Panhard suits (Selden patent case), 124, 125-27; internal dissension, 167, 18687, 210-11; and automobile shows, 169-70; Clifton named president, 170; trade association activities, 172-73, 251; pricing and production policies, 173, 213-14, 220; effect upon growth of automotive industry, 173-74, 238; campaign against Ford dealers and purchasers, 176-78, 216-19; attacked by Wanamaker, 177; supplementary infringement suits, 178, 179, 180-81, 183-84, 219-20; patent-sharing pool (Association Patents Co.), 178, 243; licenses purchasers of foreign autos, 179; blows to prestige, 184-85; reduces Selden royalty rate, 186; conciliatory attitude toward independents, 211-14; costs of Selden patent case, 239-40; disbanded, 242; and technical standardization, 250-53; Mechanical Branch, 251-53; Hartford testing laboratory, 252 Association Patents Co., 178 Astor, Hotel, 234 Autocar Co., 78, 92, 97, 99 Automobile, 126-27 Automobile Board of Trade, 243, 244 Automobile Club of America, 170 Automobile Club of Vienna, 144 29I

Monopoly on Wheels Automobile Forecarriage Co., 81 Automobile Magazine, 93 Automobile Manufacturers Association, 242, 247 Automobile races: Paris-to-Bordeaux, 33. 35"36> 3^ Chicago Times-Herald, 36; New York City, 36; New York-toSeattle, 200 Automobile shows: Chicago, 56, 95, 106; New York City, 169-70, 176, 234 Automobile Topics, 117 Automotive industry: character and conditions of early, 37, 52-54, 83-85; basic patents in, 49-50, 54; U.S. production in 1900, 53; New England leadership in early, 58; contrasting goals of New England and Midwestern manufacturers, 63; gasoline automobile, leadership of, 82-83; lowprice mass market, 103-4, 188-90; factors of success in early, 109; growth, and Selden patent controversy, 237-38, 239; patents crosslicensing agreement, 242-47; patent litigation in early, 243-44; and technical standardization, 250-53 Baker, Ray Stannard: quoted, 52 Barrett, George K., 77 Barthel & Barthel, 106 Beau de Rochas, Alphonse, 19, 31 Bell System, 88, 113 Bell Telephone Co., 42, 201 Benjamin, George H., 134 Bentley, Edward M.: cross-examined by Parker, 135-37; mentioned, 155, 204, 205 Benz, Karl: motor-driven velocipede, 33, 44; mentioned, 225 Benz automobile, 220 Berliner telephone transmitter, 41, 42, 201 Belts, Frederic Henry, 97, 133 Belts, Samuel Rosseter, 133, 138, 141, 143, 147, 152, 159, 160, 167, 198-200 passim, 221, 223-25 passim Belts, Belts, Sheffield & Belts, 74, 81, 99- '33 Bicycles and bicycling: influence on motor car, 35, 58, 59-60 292

Bleak House, Dickens, 241 Boston, Massachusetts, 68, 87, 132, 139, 201 Boullon and Walt, 13 Brady, Anlhony N., 57, 220, 221 Brandon, Alexander H., 163 Braylon, George Bailey, 14 Brayton engine: patented, 14; described, 14-15, 21; in Pillsburgh and Providence iraction experiments, 20, 13940, 228; and Selden's modificalioii of, 21-24 passim, 151, 208; in Selden palenl, 44, 45; in Winlon case, 99; crucial distinclions between Otto engine and, 228-31; menlioned, 81, 168, 201, 204, 207 Briscoe, Benjamin, 184 Brokaw, William Gould, 180 Brown, George H., 77 Budlong, Millon J., 97-98, 132, 142, 170 Buffalo, New York, 170, 174 Buffalo Gasolene Motor Co.: sued for infringement, 76-78 passim; writ of demurrer overruled, 80; settles suit, 99; mentioned, 174 Buick Motor Co., 174, 186, 187, 211 Cadillac Motor Car Co., 178, 210 Cameron, William J., 113 Cardozo & Nathan, 133 Carhartl Automobile Corporalion, 21920 Carpenter, Rolla C.: as expert witness, 140-41; and tests of Exhibits 89 and '57' '57. '58-59; and Ford-Lenoir car, 163, 164, 165-66; mentioned, 132, '53 Cave, Henry, 152 Chamberlain, A. W., 76 Chapman, Melville D., 180 Charron, Girardot 8c Voigt, 103 Chicago, Illinois, 56, 68, 73, 171, 172, 212, 214, 216 Chicago Times-Herald, 36 Chicago Tribune, 137 Chillicothe, Ohio, 219 Clemenl, Frank H., 22 Clerk, Dugald: lerms Selden palenl basic and controlling, 67-68; key wit-

Index ness for Seklen forces, 145; report on Sclden patent, 146; characterized, 146; his Gas Engine and Gas and Oil Engine, 146; tests Exhibit 89, 151; and Ford-Lenoir car, 162; Parker on expert testimony by, 204-5; contrasting views as witness and author, 224-25, 230; mentioned, 132 Cleveland, Grover, 57 Cleveland, Ohio, 36, 63, 132 Clifton, Charles, 95, 97, 170, 195, 213, 218, 234, 235 Coffin, Howard E., 245 Colt, Samuel, 58 Colt oscillating-disk engine, 21, 23 Columbia & Electric Vehicle Co., 66-67 Columbia automobile, 63 Columbia Automobile Co.: organized, 65-66; merged, 66-67 Columbia chainless bicycle, 59 Columbia Motor Car Co., 222 Columbia University, 222; Law School, 133, 180 Columbus, Ohio, 31 Condict, George H., 56 Continental Automobile Co., 53 Copeland universal ball joint patent, ,78 Corliss steam engine, 16 Cornell University, 132, 222 Cosmopolitan Magazine, 36 Coudert, Frederic Rene: on Exhibit 157, 152; at trial hearing, 198, 200; persuades Panhard & Levassor to continue defense, 214-15; oral argument before appellate court, 223-26; acclaims Ford, 233; mentioned, 134 Coudert Brothers, 133-34, 144 Couzens, James: on low-price policy of Ford Motor Co., no; at Russell House meeting, in; and open letter to A.L.A.M., 120-21; and Parker retainer, 122; and founding of A.M.C.M.A., 170-71; on Selden case as favorable publicity for Ford firm, 191; and anti-Selden advertisements, 192; mentioned, 105, 108-9, 115, 117, 126,

184,

194,

212,

221,

222,

234

C'.oxe, Alfred Conkling: judicial opinion overruling Winton demurrer,

78-79; Winton ruling cited by Hough, 206 Crawford automobile company, 171 Crisp, W. Beriton, 198, 201, 212, 221, 223, 235 Cugnot, Nicholas Joseph: steam carriage designed by, 10 Culver "motor buggy," 104 Cuntz, Hermann F.: on Hartford as early automobile center, 60; patent expert for Pope firm, 60; recognizes value of Selden claims, 64; estimate ignored, 65; on basic character of Selden patent, 66; discusses Selden license with Ford, 106-7, 1O^> mentioned, 67, 90, 210 Cutler, Elihu H., 95, 96-97 Cycle Trades Protective Association, 75

Daimler, Gottlieb: and power plant of modern automobile, 33; builds and patents road vehicle, 33; mentioned, 211, 223, 225 Daimler automobile, 230 Daimler engine, ign, 44 Darracq automobile, 220 Davis, Newton H., 216 Davis, Samuel T., Jr., 95, 97, 239 Day, George H.: and patents, 59; characterized, 59-60; derides gasoline automobile, 61-62; president of Columbia & Electric Vehicle Co., 67; president of Electric Storage Battery Co., 69; president of Electric Vehicle Co., 69; his plan for using Selden patent as restrictive device, 85, 90, 92-93, 96; seeks to avoid court test of Selden claims, 89-90; general manager of A.L.A.M., 97; agreement with Selden for sharing royalties, 98, X 55> 239' on A.L.A.M. restrictive policy, 101; and A.L.A.M. auto show policy, 170; death, 184-85; mentioned, 65, 132, 152, 194 Dayton Automobile Co., 171 Decauville automobile, 179 Decauville Automobile Co., 153 De Dietrich Import Co., 181-82, 197 Degener, August, 163

293

Monopoly on Wheels Delahaye automobile, 220 De Luxe Motor Car Co., 171, 184 Demotcar automobile company, 219 Detroit, Michigan, 31, 36, 58, 63, 83, 91, 92, 93, 105, 107, 111, 116, 117, 132, 137, 162, 163, 171, 184, 189, 194, 218, 233. 234. 244 Detroit Automobile Co., 105, 106 Detroit Free Press, 116-17, 189, 215-16 Detroit Journal, 73, 126, 210, 236 Detroit News, 116-17, 211 Deutz, Germany, 31, 32 Dickens, Charles, 130, 241 Dodge, Philip T., 66 Dodge Brothers, 109, 137 Dolan, Thomas, 57 Dorris automobile company, 171 Doyce, Daniel, 130 Dragon automobile, 184 Dragon automobile company, 171 Dudgeon, Richard, 11 Duerr, C. A., & Co.: made a defendant in Selden patent case, 125, 127 du Pont, Alfred I., 179 Durant, William Crapo: leads insurgency in A.L.A.M., 186-87; refusal to pay Selden patent royalties, 210-11; mentioned, 175, 212 Duryea, Charles Edward: on automotive possibilities of Otto engine, 3132; and first American gasoline automobile, 34; on early automotive experimenters, 37; opinion of Selden patent, 50; describes operation of Ford-Lenoir car, 164-65; mentioned, 132, 139, 157, 158, 159, 223, 233 Duryea, J. Frank: and first American gasoline automobile, 34; wins Chicago Times-Herald automobile race, 36; mentioned, 32 Duryea Motor Wagon Co., 50 Duryea Power Co., 78, 139, 171 Dyer patents, 243 Eagle Iron Works (Detroit), 31 Eames, Harold Hayden, 59, 61, 65, 66, 67, 211 Eastman, George, 8, 51 Eaton, William L., 133 294

Edison, Thomas A., 130 Edison Illuminating Co. (Detroit), 36 Electric automobile, 36, 55-57, 63 Electric Carriage and Wagon Co., 55 Electric Storage Battery Co., 55, 57, 66-69 po-ssim, 71, 73 Electric Vehicle Company: organized, 55-56; Whitney-Ryan syndicate acquires control, 57-58; and merger of Pope-Whitney interests, 65-67 passim; Selden patent assigned to, 68; expansion plans and activities, 6869; financial difficulties, 71-74; takes steps to enforce Selden patent, 7476; general licensing policy, 75; test suit against Winton firm, 76-77; exploits Coxe opinion on Winton demurrer, 79; test suits against small firms, 81-82; negotiates with Winton, 82; restrictive licensing policy, 90; negotiations with independents, 9193> 95' 96; and A.L.A.M., 97-99; nominal complainant in Selden patent case, 125, 128; goes into receivership, 184-85; income (19031907) from Selden patent, 184-86; succeeded by Columbia Motor Car Co., 220-21; mentioned, 81, 89, 90, 150, 152, 170, 186, 210, 211 Elizabethport, New Jersey, 69 Elkins, William, 57 Elliott steering device patent, 178 Elmer, Lucius H., 176 Engineering Neius, 235 Evans, Oliver, 10 Exide storage batteries, 55, 56 Faber Sulky Co., 150 Fawcett, James F., 140 Fawcett, William J., 140 Festugiere carburetor, 148, 164 Fiat Automobile Co., 220 Firestone, Harvey S., 235 Fish, Frederick Perry, 133, 198, 201-2, 22 3> 245 Fish, Richardson, Herrick & Neave, 133 Flint, Michigan, 58, 116 Ford, Edsel: quoted, 109; mentioned, 234

Index Ford, Henry (1863-1947): his first automobile, 36, 117, 118, 139; initial automotive ventures, 105; and establishment of Ford Motor Co., 105; and development of low-priced automobile, 105, 106, 187-90; informed about Winton suit, 106; attempts to secure license under Selden patent, 106-8, 109, 110-11; reasons for opposing Selden patent, 113-14; defies A.L.A.M., 126; characterized, 137-38; witness in Selden patent case, 137-39; reputation as individualist, 169, 187-88, 191-92, 193-94, 195, 215-16, 217-18, 233; member of A.M.C.M.A. standardization and technical committee, 172; on Electric Vehicle Co., 185; on Selden case as favorable publicity for Ford firm, 191; attitude toward patents and patent system, 194, 243, 247-50; refusal to compromise with A.L.A.M., 212, 215-16, 218-19; on Noyes decision, 233; feted by A.L.A.M., 234-35; his estimate of fight against Selden patent, 236; personal attitude toward Selden, 236; crucial role in growth of automotive industry, 237-38; reputation, 253; mentioned, 11, 63, 115, 116, 117, 120, 121, 132, 184, 197, 198, 200, 207, 210, 222

Ford-Lenoir car, 162-66, 203, 207, 224 Ford Motor Company: established, 105; Model T, 105, 188, 189, 191, 234, 238, 243; Model A (1903), 108, 163; Model N, 106, 189-90; as assembly plant, 105, 107-8, 109; price as factor in its success, no; rejects proffered Selden license, 112; sales in first year, 115; advertising and publicity campaign against A.L.A.M. and Selden patent, 117-18, 192-94, 217-18; decides to fight A.L.A.M., 119-20; sued for infringement, 124, 125; Piquette plant, 162; and establishment of A.M.C.M.A., 170-71; and expense of Selden patent case, 171, 184, 233-34, 239-40; offers protection to agents and purchasers, 176-77, 215;

Model K, 177; dealerships, 178; retaliatory patent infringement suit against Cadillac firm, 178; growth during Selden patent controversy, 188, 221, 236-37; and A.L.A.M. officials in visit to Detroit plant, 19495; negotiations for sale to General Motors, 212; prepares to appeal Hough decision, 212; bond under interlocutory decree, 221; victory in appellate court, 227; and Automobile Manufacturers Association, 247; patent policy, influence of Selden patent case on, 247-50; and resale price maintenance, 25on; mentioned, 145 Ford Motor Co. vs. Union Motor Sales Co., 25on Ford Times, 178, 219 Franklin, Herbert H.: on A.L.A.M. restrictive policy, 101-2; mentioned, 211 Franklin, H. H., Manufacturing Co., 102 Frontenac automobile company, 171 Gas and Oil Engine, The, Clerk, 146 Gas Engine, The, Clerk, 146 Gasoline engine. See Internal combustion engine General Electric Co., 73 General Motors, 186, 210, 211 Gibson, Hugo C., 156-57, 158-59, 161, 204 Gifford, Livingston, 212, 223 Gifford & Bull, 212 Gomm, William: assists Selden in early experiments, 6-7, g, 18, 22-23, 2 4> mentioned, 132 Grand Central Palace (New York), 171 Grand Union Hotel (New York), 50 Gray, John S., 105, 109, 111, 170 Greeley, William B., 67 Greenwood, John, 22 Grover & Baker Co., 87 Gude, O. J., Co.: made a defendant in Selden patent case, 127; mentioned, 221 Gundlach-Manhattan Optical Co., 150 Guttenberg, New Jersey, 157-60 passim 295

Monopoly on Wheels Hadlyme, Connecticut, 149 Hamilton, Walton: quoted on complexities of patent litigation, 197; quoted on automotive patents crosslicensing agreement, 246-47 Hanch, Charles C., 244-45 Handbook of Gasoline Automobiles, A.L.A.M., 172 Hanna, Mark: quoted on patent monopoly, 86 Harper's Weekly, 34 Hartford, Connecticut, 58, 59, 63, 65, 68, 69, 152, 176, 252 Hartford Courant, 119 Hartford Cycle Works, 69 Hartford-Selden vehicle (Exhibit 157), 151-53, 157-60, 161-62, 166, 203, 208, 223-24 Harvester Rake Pool, 88 Hautefeuille, Jean, 13 Hawkins, Norval A., 236-37 Haynes, Elwood, 34, 35 Haynes-Apperson Automobile Co., 77, 92. 97. 99

Hazel, John R., So Hedges, Job E., 171, 235 Henderson, Thomas, 143, 235 Henry Ford Co., 105 Hilton & Johnson patent, 204 Hoguet, Ramsay, 133 Holmes, Oliver Wendell, Jr., 238 Holsman "motor buggy," 104 Holt, George Chandler: judicial opinion questions pioneer character o£ Selden patent, 181-83, 197 Hooker, Thomas, 149 Hoover, Herbert, 251 Horseless Age, 36, 49-50, 54, 69-70, 72. 80, 107, 144, 183, 185, 209 Horseless Carriage Days, Maxim, 35 Hotchkiss automobile, 220 Hough, Charles Merrill: characterized, 198-99; in trial hearing of Selden patent case, 199-202; studies trial briefs, 202-5; opinion in Ford and Panhard suits, 205-9; issues interlocutory decree, 221; criticizes patent litigation procedure, 240-42; mentioned, 197, 212, 222, 227, 245 Howe, Elias: and patent pool, 87 296

Hughes, Charles Evans: on patent law, '31 Hunter, R. M.: on Selden claims, 76 Huygens, Christian, 13 Hydrocarbon Motor-Vehicle Manufacturers' Association, 77-78, 79, 80, 81, 92 Illinois Electric Vehicle Transportation Co., 68, 73 Imperial Automobile Co., 219 Independent Automobile Association of America, 123 Indianapolis, Indiana, 219, 244 Ingalls, Joshua K., 87 Internal combustion engine: early development and application, 12-15; four-cycle motor, 18-19; stationary use, 20; as automotive power plant, 27, 28-30, 56; influence on development of motor car, 35; improvements in manufacture, 71; compression element, 147, 148, 199-200, 201, 205, 207-8, 228-30; Selden's contribution to development of, 224-25; mentioned, 6 Invention: Waldemar Kaempffert quoted on theory of, 5; Ford's views on theory of, i38n Iroquois Hotel (Buffalo), 77 Isotta automobile, 220 Italia automobile, 220 Ithaca, New York, 132, 140 Jackson, Michigan, 219 Jackson Automobile Co., 171, 213, 21G Jefferson, Thomas, 86 Jeffery, Charles T., 233 Jeffery, Thomas B., 124-25, 171, 184, 198, 212, 233 Jeffery, Thomas B., and Co., 124, 233 Jewell "motor buggy," 104 Jones foundry (Rochester), 22 Joy, Henry B.: and negotiations of independents with Electric Vehicle Co., 91-93; treasurer of Manufacturers' Mutual Association, 95; and negotiations preliminary to founding of A.L.A.M., 95-97; secretary and treasurer of A.L.A.M., 97; and denial of

Index Selden license to Ford, 107; mentioned, 83, 251 Joy, Richard P., 233 Kaempffert, Waldemar: quoted on theory of invention, 5 Kenosha, Wisconsin, 125 Kenyon, Robert N., 81 Kenyon & Kenyon, 80-81, 8s, gg-ioo, H3

King, Charles B., 36, 233 Knox Automobile Co., 92, 95, 97 Kokomo, Indiana, 34 Krebs, Arthur Constantin, 132 Kurzel-Runtscheiner, Erich, 143 Lacorabe, Emile Henry, 99, 144, 157, 180, 222 Lansing, Michigan, 34, 58, 132, 140 La Rue, Ohio, 216 Leading American Cars, A.M.C.M.A., 214 Leland, Wilfred C., 245 Lenoir, Jean Joseph Etienne: invents engine, 14; builds motorized road vehicle, 28-29 Lenoir engine: described, 23; mentioned, 148 Leonard, H. Ward, 130 Levassor, Emile, 33 Locomobile automobile, 116 Locomobile Co., 92, 95, 97, 239 London, England, 132 London Graphic, 17 Lowell, James Russell, 115 Lozier, Henry A., 142-43 Lynn, Massachusetts, 35, 61 McClellan, George B., Jr., 200 McCormick, Cyrus H.: and patent wars, 87-88 Mack Brothers, 171 Madison Square Garden, 169-70, 171, 2S4 Malcomson, Alex Y., 105, 107, 119, 188 Manhattan Hotel, 97 Mannheim, Germany, 33 Manufacturers' Mutual Association, 93. 95-97 Marcus, Siegfried: road vehicle, 29-30;

potential value of evidence in Seldcn patent case, 143-44; mentioned, 51 Marion automobile company, 171 Marmon automobile, 184, 244 Marshall, John, 238 Martini automobile, 180, 181 Massenat, Andr£: made a defendant in Selden patent case, 127; acknowledges validity of Selden patent, 182 Maxim, Hiram Percy: on bicycle as factor in automotive development, 35; on Pope engineers, 60; experimental development of motor vehicles, 61-63; reports on Selden patent, 67; on engine described in Selden patent, 152; mentioned, 64, 65, 133, 178, 210 Maxwell, Jonathan D., 132, 184 Maxwell-Briscoe Motor Co., 171, 184, 213 Menn, Henri: patent, 27, 204, 228 Mercedes automobile, 181, 220 Merz, Charles: quoted, 238 Metropolitan Street Railway Co., 57 Michel machine shop (Rochester), 22 Milwaukee, Wisconsin, 220 Mitchell Motor Car Co., 171, 184, 213 Moline, Illinois, 219 Moon automobile company, 171 Moore, William J., 180-81 Morris, Henry G., 55 Morton Trust Co., 73, 185 Motor Age, 75-76, 77, 83-84, 85 "Motor buggy," 104 Motor World, 80, 123, 124, 161, 165, 173, 209 Moyea Auto Co., 123 Murdock, William, 13 Murray, John P., 134, 144, 166, 198 Narragansett Pier, Rhode Island, 221 Nation, 129 National Association of Automobile Manufacturers, 170 National Automobile Chamber of Commerce, 244, 245 National Harrow Co., 89 National Motor Vehicle Co., 170, 171, 184 National Surety Co., 215 *97

Monopoly on Wheels Neubauer, Albert C. and Henry: agency named a defendant in Selden patent case, 127; mentioned, 215, 221 Neue Badische Landeszeitung, 33 New England: and automotive industry, 58, 63 New England Electric Vehicle Transportation Co., 68, 73 New Haven Carriage Co., 69 New London, Connecticut, 222 New Outlook, i38n Newport, Rhode Island, 53 Newton, Isaac, 10 New York Automobile Trade Association, 172 New York City, 11, 36, 55, 56, 76, 81, 96, 97, 125, 132, 14°. *46. 153- 151160, 161, 164-65, 169-70, 172, 176, 180, 181, 182, 198, 2l6, 222, 235 New York Electric Vehicle Transportation Co., 68, 73 New York Herald, 72-73 New York Tribune, 235 New York World, 187 Nordyke & Marmon Co., 171, 244 North, Simeon, 58 Noyes, Walter Chadwick: judicial opinion restricting scope of Selden patent, 226-31; mentioned, 222-23, 225 Oakland Motor Co., 310 Official Gazette, 44 Offield, Charles K., 212 Ohio State Fair, 31 Oldfield, Barney, 117 Olds, Ransom E., 34, 63, 132, 140, 184 Olds Motor Works: established, 83; expelled from A.L.A.M., 187; mentioned, 91, 97, 210 Otto, Nicolaus August: devises fourcycle internal combustion engine, 1819; mentioned, 14 Otto and Langen engine, 14, 17, 23, 168, 207 Otto engine: introduced, 19; extensive use, 31; improved by Daimler, 32; rejected by Selden, 44; crucial role in Selden patent case, 228-31; mentioned, 76, 138, 139, 201, 207 Otto Gas Engine Works, 32. 20.8

Overland Automobile Co., 174 Owen, Percy, 76 Owen Motor Car Co., 219

Packard, James Ward, 83 Packard Motor Car Co., 83, 91, 97, 99, 233 Paige-Detroit Motor Car Co., 219 Panhard & Levassor: character and quality of automobiles, 33; named a defendant in Selden patent case, 127; repudiates Massenat's recognition of Selden claims, 182; contemplates settlement with A.L.A.M., 214-15; bond fixed under interlocutory decree, 221; mentioned, 50, 132, 178, 201, 223, 225 Panhard automobile, 180, 182 Papin, Denys, 13 Paris, France, 69, 127, 132, 215 Paris-Bordeaux automobile race, 33, 35-36, 38 Parker, Ralzemond Allen: characterized, 115-16, 133; and anti-Selden advertisements, 117-18, 192; discusses Selden patent and A.L.A.M. with Ford directors, 119-20, 126; open letter to A.L.A.M., 120-21; retained by Ford Motor Co., 122; defense strategy, 128, 134-35; an£l Panhard lawyers, 134; cross-examines Bentley, 135-37; completes opening testimony, 139-41; tries to obtain evidence of Marcus car, 144; and Exhibits 89 and 157, 153-54, 158, 159-60; crossexamines Selden, 154-56; cross-examines Gibson, 156-57; informs Ford of progress in case, 166-67; on choice of trial judge, 197, 198; at trial hearing, 198, 200, 201; trial brief, 204-5; role in appeal of Hough decision, 212-13; congratulated by Ford, 234; on financial significance of Selden patent case, 239; 011 defects in patent litigation procedure, 24142 Parker & Burton, 115, 133 Parry Car Co., 219 Patent litigation: strategy of test suits,

Index 74"?6 passim; courts on broad and pioneer claims, 78; procedure, 12831, 202, 240-42; judges and patent law, 130-31, 197-98; defects in procedure remedied by revised rules in equity, 242 Patent system, American: long-pending application, abuse of, 40-42; nature of, 86-87; r°le °f patents in industrial economy, 87-89; Ford's opinion of, 113-14, 194; and automotive patents cross-licensing agreement, 242-47; and patent policy of Ford Motor Co., 247-50; and resale price maintenance, 25on; mentioned, 52 Pattison, A. S., 78, 81 Paulman, Rhoda B., Mrs. (Mrs. George B. Brayton), 132, 139-40 Pecqueur, Onesiphore, 28 Peerless Motor Car Co., 92, 95, 97 Penney Hoop Co., 9 Pennsylvania Electric Vehicle Transportation Co., 68 Peoples, James A., 17 Peters, John W., 133 Philadelphia, Pennsylvania, 55, 132 Philadelphia Centennial Exposition, 1617, 18 Pierce, George N., Co., 92, 95, 97, 170 Pittsburgh, Pennsylvania, 20, 21, 139, 228 Plantiff, Gaston, 210 Pope, Albert A.: merges automotive properties with Whitney-Ryan syndicate, 65-68 passim; mentioned, 59, 75. 125 Pope Manufacturing Co.: experimental development of automobiles, 61-63; role of patents in its growth, 63-64; attitude toward Selden patent, 64; goes bankrupt, 184-85; mentioned, 59, 63, 212 Pope-Robinson Co., 174, 186 Pope-Toledo Co., 174 Potter, Orlando B., 87 Poughkeepsie, New York, 220 Premier Motor Manufacturing Co., 170, 171, 184, 213 Providence, Rhode Island, 20, 21, 132, 139, 228

Racine, Wisconsin, 11 Rackham, Horace H., 120 Raines, George, 133, 151 Rainier Motor Car Co., 210 Rambler automobile, 124, 125, 184 Rambler bicycle, 125 Ranlet Automobile Co., 81 Read, Nathan, 10 Reading, Pennsylvania, 78, 132, 139 Rector's, 235 Redding, Greeley & Austin, 133 Redding, Kiddle and Greeley, 74 Redding, William A., 67, 74, 133, 141, 146, 147, 160, 167, 179, 198, 200-1, 223, 225, 235, 241 Reed, John: on Henry Ford, 137 Reeves, Alfred, 172, 214, 218, 234, 235 Regal Motor Car Co., 171, 213 Reliable Dayton "motor buggy," 104 Reliance Motor Car Co., 171, 210 Reo Motor Car Co., 171, 184, 213 Rice, Isaac L.: and Electric Vehicle Co., 55-57 passim; mentioned, 69 Richards & Co., 143 Riker Motor Vehicle Co., 69, 73 Riverside Machine Works (Kokomo, Indiana), 34 "Road locomotives," 11 Robinson, Biddle & Ward, 222 Rochester, New York, 5, 9, 66, 132, 149, 150, 151, 174 Rochester-Selden "1877 gas buggy" (Exhibit 89), 149-51, 152, 153-54, 157' 159, 160-62, 164, 166, 203, 207, 223-24 Rochet-Schneider automobile, 180 Roosevelt, Theodore, 101, 199 Rosenwald patent, 28, 147, 168, 200, 204, 206, 228 Royal Oak, Michigan, 234 Russell House (Detroit), in Ryan, Thomas Fortune, 57, 72, 179, 221 St. Johnsbury, Vermont, 81 St. Louis Motor Car Co., 170 Salem, Massachusetts, 35 Salom, Pedro G., 55 Saurer automobile, 220 Savalle patent, 206, 228 Schilder, W. H., 219 Scientific American, 33, 44, 241 299

Monopoly on Wheels Scarchmont Automobile Co., 92, 97, no Selden, George Baldwin (1846-1922): early experiments with internal combustion engines, 6-7, 15-16; early interest in self-propelled vehicles, 7-12 passim; early career, 8; nonautomotive inventions, 9; experiments with road vehicles, 12; observes Brayton engine, 17; obtains details on Brayton, 18; modifies and tests Brayton engine, 21-23; modified engine described and compared to Brayton motor, 23-24; files application for patent on powered road vehicle, 24, 39; strategy in Patent Office, 24-25, 38-43; compared to Daimler motor, 32; changes in application, 42-46; receives patent, 43; tries to secure financial support, 51; negotiations with Pope-Whitney interests, 66-68; and monopolists, 75; share of royalties under patent, 98, 186, 239; attempts to discourage court test of patent, 119; characterized, 148-49; witness in Selden patent case, 149, 154-56, 167-68; Parker on, 167; required to secure license under his own patent, 174; attacked in Ford Motor Co. advertisements, 192; personal estimate of Ford, 194; "father" of the automobile, 211, 236; appraisals of his contribution to automotive art, 225, 227-31; reaction to Noyes decision, 235; later career and death, 236; mentioned, 5, 132 Selden, George B., Jr., 150 Selden, Henry R. (father of George B. Selden), 7 Selden, Henry R. (son o£ George B. Selden), 150, 151, 153, 158 Selden, Samuel L., 7 Selden Motor Vehicle Co., 174, 211 Selden patent (U.S. Patent No. 549, 160): issued, 43; described, 43-46; ambiguous wording, 44-45, 46-47, 155-56; pioneer status endorsed by commissioner of patents, 49; engine element, 50, 152; Winton option on license under, 55; and automotive art, 64; potential value discerned by 300

Cunt/, 64; investigated by PopeWhitney interests, 66-67; assigned to Columbia & Electric Vehicle Co., 6768; assigned to Electric Vehicle Co., 68; temporarily held by Morton Trust Co., 73; first test suits, 74-76, 76-77, 81-82; broad claims derided, 76, 103; Coxe opinion on Winton demurrer, 78-79, 117, 181; concurring opinion by Hazel, 80; Winton defenses, 80-81; Winton prepares to acknowledge validity of, 82; as basis of restrictive licensing scheme, 85, 90, 95, 97, 98, 100-2; in negotiations between independents and Electric Vehicle Co., 91-93; Ford's unsuccessful attempts to secure license under, 106-12 passim; Ford's opinion of, 113; assailed by Ford Motor Co., 120-21, 192; appraisal by Dugald Clerk, 146; Holt opinion questions pioneer status of, 181-82; book value of, 185; royalty payments under, 187, 220-21, 239; broad scope upheld by Hough opinion, 205-9; pendency in Patent Office, 209, 223, 227, 235; Alexander Winton on, 211; scope restricted by Noyes opinion, 226-31 Selden patent case (1903-1911): commencement of Ford and Panhard suits, 125, 127; complaints and defenses, 128; and defects in patent litigation procedure, 129, 240-42; witnesses and testimony, 132, 134, 135-40, 141, 146-48, 149, 154-56, 15657, 167-68, 187; size and character of case record, 132-33, 141, 241; counsel, 133-34, 19&- 222-23; defense strategy, 134-35; suppressed Winton testimony and exhibits, 143; potential value of evidence on Marcus vehicle, 144; Exhibit 89 (RochesterSelden "1877 gas buggy"), 149-51, J 52. '53-54. J57. '59. 160-62, 164, 166, 203, 208, 223-24; Exhibit 157 (Hartford-Selden vehicle), 151-53, 15760, 161-62, 166, 203, 207, 223-24; FordLenoir car, 162-66, 203, 207, 224; supplementary suits, 179-82, 183-84, 21920; example of protracted patent

Index litigation, 183; expenses, 184, 23940; favorable to Ford's reputation, 187-90 passim, 191, 192; trial hearing, 198-202; trial brief by Selden attorneys, 202-4; trial brief by Parker, 204-5; Hough opinion upholding broad scope of Selden patent, 205-9; reaction to Hough decision, 209-10, 212; interlocutory decree by Hough, 221; hearing on appeal, 222-26; Noyes opinion restricting scope of Selden patent, 226-31; immediate effects of Noyes decision, 236; effect on Ford Motor Co., 236-37; and changes in patent litigation procedure, 242; influences Ford's views on patent system, 247-50; influences patent policy of Ford Motor Co., 347-50 Sercombe, Parker H., 123 Seymour, John S.: endorsement of Selden patent, 49 Shanck, Henry K., 33 Shea, Daniel H., 72 Sheffield, James R., 133 Sheffield Scientific School, 8, 133 Sherman Antitrust Act: and patent monopolies, 88-89 Simplex automobile company, 171 Sixty-ninth Regiment Armory, 171 Smith, C. J., 163 Smith, Frederic L.: and negotiations of independents with Electric Vehicle Co., 91-92; president of Manufacturers' Mutual Association, 95; on meeting between Whitney and independents, 96; president of A.L.A.M., 97; and denial of Selden license to Ford, 107-8, no-ia; on Hough decision, 210 Smith, George Hand, 8 Smith, Jesse M., 140, 153 Smith, Samuel L., 83 Smith & Mabley, 81-82, 99, 103 Society of Automobile Engineers, 251, 252- 253 Society of Automotive Engineers, 25in Souther, Henry, 59, 61, 63, 64, 252-53 Springfield, Massachusetts, 34 Standard automobile company, 123 Standardization, technical, 250-53

Star automobile company, 123 State Trust Co., 73 Steam engine, 5, 6 Steam-powered vehicles, 9-11 Steinway, William, 33 Stoddard, Elliott J., 133 Stoddard-Dayton Co., 184, 234 Street, Robert, 13 Studebaker Automobile Co., 211 Supreme Court of the United States, 47, 89, 130-31, 234, 240, 242, 248 Syracuse, New York, 102

Technology: early automotive, 27-30, 36, 37-38, 84-85; and gasoline engine, 71; automotive, effect of Selden controversy on, 227, 237-38; and patents, 246-47, 249-50; and standardization, 250-53 Ten Eyck Hotel (Albany), 181 Thomas, E. R., Motor Co., 99, 109 Tischler, Viktor, 143 Toledo, Ohio, 58 Trevithick, Richard, 28 Trevor, John B., 180 Trusts and combinations: and patents, 87-88; Ford's attitude towards, 113; mentioned, 69-70, 75, 93, 101, 231 Tucker, Benjamin R., 87

Union Railroad Co., 20 United Shoe Machinery Co., 88, 201 United States Motor Co., 220 United States Patent Office: increase in applications for automobile patents, 37-38; conditions and procedures during pendency of Selden patent, 39-42; mentioned, 24, 136, 203, 209, 223, 227, 228, 235, 246 University of Michigan, 115 University of Rochester, 8

Vandervoort, W. H., 245 Velie Motor Car Co., 219, 220 Victor Talking Machine Co. vs. The Fair, 176 Vivian, Andrew, 28 301

Monopoly on Wheels Walker, John Brisben, 36 Wanarnaker, John: made a defendant in Selden patent case, 127; attacks A.L.A.M., 177; mentioned, 321 Warburton, Barclay H., 97 Ward, Henry Galbraith, 222 Warren Motor Car Co., 219 Watt, James, 12, 13, 27-28 Wayne Automobile Co., 171, 184 Weed Sewing Machine Co., 59 Welch Motor Car Co., 171, 184, 210 Wetmore, Edmund S., 212, 221, 223 Wetmore & Jenney, 212 White, Windsor T., 245 Whitney, Eli, 58, 88 Whitney, Harry Payne, 179 Whitney, William Collins: and purchase of Electric Vehicle Co. by Whitney-Ryan syndicate, 57; acquisition of Selden patent and Pope automotive properties, 65-68; negotiations

JO2

with Manufacturers' Mutual Association, 96-97; mentioned, 179, 221, 222 Whitney-Ryan syndicate, 57, 68-72 passim, 74, 85, 89, 90, 185 Widener, Peter A. B., 57 Wilkinson, John, 253 Willys, John N., 174 Willys-Overland Automobile Co., 213 Winton, Alexander, 36, 77, 118, 211 Winton Motor Carriage Co.: organized, 36; option on Selden license, 55; sued for infringement of Selden patent, 76-77; writ of demurrer overruled, 78; continues defense, 80-81; settles infringement suit, 82, 98-100 passim; mentioned, 83, 91, 95, 96, 235 Yale College, 8 Zust automobile, 220