The Expanded and Annotated My Life and Work

and said that no one would give me money and that I might have to break up 
and go out of business.
It is true that we did have a problem. In 1919 we had borrowed $70,000,000 
on notes to buy the full stock interest in the Ford Motor Company. On this 
we had $33,000,000 left to pay. We had $18,000,000 in income taxes due or 
shortly to become due to the Government, and also we intended to pay our 
usual bonus for the year to the workmen, which amounted to $7,000,000. 
Altogether, between January 1st and April 18, 1921, we had payments ahead 
totaling $58,000,000. We had only $20,000,000 in bank. Our balance sheet 
was more or less common knowledge and I suppose it was taken for granted 
that we could not raise the $38,000,000 needed without borrowing. For that 
is quite a large sum of money. Without the aid of Wall Street such a sum could 

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156  •  The Expanded and Annotated My Life and Work
not easily and quickly be raised. We were perfectly good for the money. Two 
years before we had borrowed $70,000,000. And since our whole property 
was unencumbered and we had no commercial debts, the matter of lending a 
large sum to us would not ordinarily have been a matter of moment. In fact, 
it would have been good banking business.
However, I began to see that our need for money was being industriously 
circulated as an evidence of impending failure. Then I began to suspect 
that, although the rumours came in news dispatches from all over the coun-
try, they might perhaps be traced to a single source. This belief was further 
strengthened when we were informed that a very fat financial editor was at 
Battle Creek sending out bulletins concerning the acuteness of our financial 
condition. Therefore, I took care not to deny a single rumour. We had made 
our financial plans and they did not include borrowing money.
I cannot too greatly emphasize that the very worst time to borrow money 
is when the banking people think that you need money. In the last chapter 
I outlined our financial principles. We simply applied those principles. We 
planned a thorough house-cleaning.
Go back a bit and see what the conditions were. Along in the early part of 
1920 came the first indications that the feverish speculative business engen-
dered by the war was not going to continue. A few concerns that had sprung 
out of the war and had no real reason for existence failed. People slowed 
down in their buying. Our own sales kept right along, but we knew that 
sooner or later they would drop off. I thought seriously of cutting prices, but 
the costs of manufacturing everywhere were out of control. Labour gave less 
and less in return for high wages. The suppliers of raw material refused even 
to think of coming back to earth. The very plain warnings of the storm went 
quite unheeded.
In June our own sales began to be affected. They grew less and less each 
month from June on until September. We had to do something to bring our 
product within the purchasing power of the public, and not only that, we had 
to do something drastic enough to demonstrate to the public that we were 
actually playing the game and not just shamming. Therefore in September 
we cut the price of the touring car from $575 to $440. We cut the price far 
below the cost of production, for we were still making from stock bought at 
boom prices. The cut created a considerable sensation. We received a deal