The Expanded and Annotated My Life and Work

of criticism. It was said that we were disturbing conditions. That is exactly 
what we were trying to do. We wanted to do our part in bringing prices from 
an artificial to a natural level. I am firmly of the opinion that if at this time 
or earlier manufacturers and distributors had all made drastic cuts in their 
prices and had put through thorough house-cleanings we should not have so 
long a business depression. Hanging on in the hope of getting higher prices 
simply delayed adjustment. Nobody got the higher prices they hoped for, and 

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Money: Master or Servant?  •  157
if the losses had been taken all at once, not only would the productive and 
the buying powers of the country have become harmonized, but we should 
have been saved this long period of general idleness. Hanging on in the hope 
of higher prices merely made the losses greater, because those who hung on 
had to pay interest on their high-priced stocks and also lost the profits they 
might have made by working on a sensible basis. Unemployment cut down 
wage distribution and thus the buyer and the seller became more and more 
separated. There was a lot of flurried talk of arranging to give vast cred-
its to Europe—the idea being that thereby the high-priced stocks might be 
palmed off. Of course the proposals were not put in any such crude fashion, 
and I think that quite a lot of people sincerely believed that if large credits 
were extended abroad even without a hope of the payment of either principal 
or interest, American business would somehow be benefited. It is true that 
if these credits were taken by American banks, those who had high-priced 
stocks might have gotten rid of them at a profit, but the banks would have 
acquired so much frozen credit that they would have more nearly resembled 
ice houses than banks. I suppose it is natural to hang on to the possibility of 
profits until the very last moment, but it is not good business.
Our own sales, after the cut, increased, but soon they began to fall off again. 
We were not sufficiently within the purchasing power of the country to make 
buying easy. Retail prices generally had not touched bottom. The public dis-
trusted all prices. We laid our plans for another cut and we kept our produc-
tion around one hundred thousand cars a month. This production was not 
justified by our sales but we wanted to have as much as possible of our raw 
material transformed into finished product before we shut down. We knew 
that we would have to shut down in order to take an inventory and clean 
house. We wanted to open with another big cut and to have cars on hand to 
supply the demand. Then the new cars could be built out of material bought at 
lower prices. We determined that we were going to get lower prices.
We shut down in December with the intention of opening again in about 
two weeks. We found so much to do that actually we did not open for nearly 
six weeks. The moment that we shut down the rumours concerning our 
financial condition became more and more active. I know that a great many 
people hoped that we should have to go out after money—for, were we seeking 
money, then we should have to come to terms. We did not ask for money. We 
did not want money. We had one offer of money. An officer of a New York 
bank called on me with a financial plan which included a large loan and 
in which also was an arrangement by which a representative of the bank-
ers would act as treasurer and take charge of the finance of the company. 
Those people meant well enough, I am quite sure. We did not want to borrow 
money but it so happened that at the moment we were without a treasurer. 
To that extent the bankers had envisaged our condition correctly. I asked my 

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158  •  The Expanded and Annotated My Life and Work
son Edsel to be treasurer as well as president of the company. That fixed us 
up as to a treasurer, so there was really nothing at all that the bankers could 
do for us.
Then we began our house-cleaning. During the war we had gone into many 
kinds of war work and had thus been forced to depart from our principle of 
a single product. This had caused many new departments to be added. The 
office force had expanded and much of the wastefulness of scattered produc-
tion had crept in. War work is rush work and is wasteful work. We began 
throwing out everything that did not contribute to the production of cars.
The only immediate payment scheduled was the purely voluntary one of a 
seven-million-dollar bonus to our workmen. There was no obligation to pay, 
but we wanted to pay on the first of January. That we paid out of our cash 
on hand.
Throughout the country we have thirty-five branches. These are all 
assembling plants, but in twenty-two of them parts are also manufac-
tured. They had stopped the making of parts but they went on assembling 
cars. At the time of shutting down we had practically no cars in Detroit. 
We had shipped out all the parts, and during January the Detroit dealers 
actually had to go as far afield as Chicago and Columbus to get cars for 
local needs. The branches shipped to each dealer, under his yearly quota, 
enough cars to cover about a month’s sales. The dealers worked hard on 
sales. During the latter part of January we called in a skeleton organiza-
tion of about ten thousand men, mostly foremen, sub-foremen, and straw 
bosses, and we started Highland Park into production. We collected our 
foreign accounts and sold our by-products.