General Motors – The Intelligent Collector Magazine

Tornadoes, cash registers, indictments and pardons

One of the most famous tornadoes appeared in 1939’s *The Wizard of Oz*. This original half sheet promotional poster for the movie sold for $108,000 at a March 2019 Heritage auction.

By Jim O’Neal

On Easter Sunday 1913, a great tornado ripped through Omaha, Neb. As people scrambled for cover, a naked man was blown through a dining-room window. He grabbed the tablecloth to use as a toga and politely asked the startled family for a pair of trousers. The local newspaper dubbed him the “human meteorite” and went on to report how the twister sucked two babies out the window of the town orphanage. Another man reported the body of a 4-year-old girl dropped out of the sky into his arms, while cows were impaled on fence posts and chickens were plucked clean. That night, another dozen clouds raced across Iowa, Illinois, Missouri, Michigan and Indiana.

After the storms’ initial volley, heavy rains began to fall, swelling the Ohio River until its levees could no longer stem the angry waters and they were breached. The submerged cities included Fort Wayne, Columbus, Cincinnati and Indianapolis. However, Dayton, Ohio, was hardest hit as the Miami River rushed downtown, washing away homes and stranding residents on roofs, buildings and even telephone poles.

Dayton-based businessman John Patterson (1844-1922) immediately seized command and converted a factory assembly line to turn out rowboats for use in rescuing trapped inhabitants. A large plant cafeteria started baking bread and other foodstuffs. Most of Dayton’s provisions were either underwater or ruined by floodwaters. Many of the town’s residents owed their lives to Patterson’s quick actions. Still, over 300 people perished and damages topped $2 billion.

Patterson had launched his business career in December 1884 when he purchased the rights for “Ritty’s Incorruptible Cashier” for $6,500. James Ritty (1836-1918) was an Ohio bar owner who discovered what all bar/restaurant owners eventually learn: Employees inevitably start pilfering cash, booze or food. Many a chef has walked out with a ham or turkey under their coat on the way home. Or perhaps served friends and relatives drinks without keeping tabs.

Ritty’s invention was a machine positioned atop an adding machine that kept track of orders or controlled the cash. Patterson improved the design by adding the now familiar pop-up number, a cash drawer and a bell that rang when employees used it. He quickly recognized the potential profit in selling the machine to various retail merchants. All were potential customers. Thus, the National Cash Register Company was formed and Patterson went to work developing a skilled sales organization. Trainees were enrolled in a “Hall of Industrial Education” and after graduating, received their own exclusive territory to sell the new invention.

It was an immediate success and the company gained a reputation for generous commissions. A new factory was built with glass walls so the sun could shine through. This was the era when most factories were called “sweatshops” for good reason. In addition, Patterson included free medical clinics, a swimming pool and an employee cafeteria serving healthy food. The grounds were sculptured landscapes designed by architect John Charles Olmsted.

Patterson was a demanding boss and the list of future prominent businessmen he fired was a long one. One was Thomas Watson Sr. (1874-1956), who owned a butcher shop with a shiny NCR cash register. After the business failed, Watson went to work at NCR until Patterson fired him. Watson would go on the build International Business Machines (IBM) into a world-class institution. Another was Charles Kettering (1876-1958), a near genius engineer who went to work for General Motors after he was fired several times. He would head up GM’s engineering research department for 30 years. In addition to inventing the automobile electric self-starter, he recorded 186 patents and became a towering member of the Inventor Hall of Fame.

Patterson was a ruthless competitor and built a “gloom room” filled with cash registers from all the competing companies he ruined. In 1912, the company was found guilty of violating the Sherman Antitrust Act after acquiring over 80 direct competitors and ending up with a 95 percent market share. Patterson and 26 of his executives were headed to jail for a year after President Wilson refused to pardon them.

But fate intervened and an appeal overturned the conviction, partially because of Patterson’s good deeds during the Great Flood of 1913. Dayton welcomed them with a giant parade.

Pardons can be tricky for presidents, but all have used the power. Franklin Roosevelt holds the record with more than 3,600 acts of clemency! Since they were spread over four terms, there was not much political criticism. President Clinton was not so fortunate. On Jan. 20, 2001, his last day in office, he granted 140 pardons. One was to Marc Rich, an international commodities trader indicted by U.S. Attorney Rudy Giuliani in 1983 on 65 criminal counts involving income tax evasion, wire fraud and racketeering. Rich fled the United States.

When it was revealed he was still a fugitive and the pardon had been handled by Jack Quinn, it caused an uproar from both prominent Democrats and Republicans (Quinn had been Clinton’s White House Counsel). Then things escalated when it was discovered his ex-wife made donations to the DNC, the Clinton library, and Hillary’s Senate race. Attorney General John Ashcroft asked federal prosecutor Mary Jo White to investigate, but James Comey took the lead when White left the government. The probe was closed down after federal investigators ultimately found no evidence of criminal activity.

Hmmn. Giuliani, Clinton, Comey. Small town.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Early Automotive Pioneers Among America’s Top Innovators

A Lincoln Motor Company stock certificate, issued in October 1918 and signed by Henry M. Leland, sold for $500 at an October 2013 auction.

By Jim O’Neal

Doctors called it a “chauffeur’s fracture,” the radial styloid or wrist fracture that occurred when a driver tried to start a horseless carriage by turning the crank at the front of the car. If the engine backfired, the crank would spin backward, often causing broken bones. Those early automobiles motoring down the streets of American cities were considered engineering marvels.

But what a challenge to start!

The two requirements were a blacksmith’s arm and a perfect sense of timing. The driver had to adjust the spark and the throttle before jumping out to turn the crank mounted on the car’s outside front grill. Once the spark caught and the motor fired, the driver dashed back to the control to adjust the spark and throttle before the engine could die. Oh, and if the car started, but was in gear, it could lurch forward and run over the cranker!

Sound farfetched?

In 1908, tragedy struck when Byron Carter (1863-1908) – inventor of the Cartercar – died after trying to start a stalled car. The crank hit him in the jaw. Complications with gangrene set in and he died of pneumonia. It was a fluke involving a stalled motorist he was trying to help. The driver forgot to retard the spark. Whamo!

The car involved was a new Cadillac, one of the premier luxury brands, and Carter was good friends with the man who ran Cadillac, Henry Leland (who also owned Lincoln). When Leland found out his friend had been killed, he vowed: “The Cadillac car will kill no more men if we can possibly help it!” Cadillac engineers finally succeeded in manufacturing an electric self-starter, but were never able to scale it for commercial use.

Enter Charles Franklin Kettering (1876-1958), a remarkable man (in the same league as Thomas Edison) whose versatile skills included engineering and savvy business management. He was a prolific inventor with 186 notable patents. One of them was a self-starter small enough to fit under the hood of a car, running off a small storage battery. A New York inventor (Clyde J. Coleman) had applied for a patent in 1899 for an electric self-starter, but it was only a theoretical solution and never marketed.

After graduating from Ohio State College of Engineering, Kettering went to work for the invention staff at National Cash Register (NCR) company. He invented a high-torque electric motor to drive a cash register, allowing a salesperson to ring up a sale without turning a hand-crank twice each time. After five years at NCR, he set up his own laboratory in Dayton, Ohio. Working with a group of engineers, mechanics and electricians, he developed the new ignition system for the Cadillac Automobile Company.

Leland sold Cadillac to General Motors in 1909 for $4.5 million and there is no record of any Cadillac ever killing another person, at least from turning a crank to start the engine! Since Cadillac had been formed from remnants of the Henry Ford Company (the second of two failed attempts by Ford), it was renamed for Antoine Laumet de La Mothe, sieur de Cadillac (the founder of Detroit 200 years earlier).

Later, Leland would sell Lincoln, his other marque luxury brand, to Ford Motor Company for a healthy $10 million, while Kettering and his crew formed Dayton Engineering Laboratories Co., which became Delco, still a famous name in electronic automobile parts. Kettering went on to have a long, sterling career and was featured on the cover of Time on Jan. 9, 1933 … the week after president-elect Franklin Delano Roosevelt was named the magazine’s Man of the Year (Jan. 2).

My only quibble is the work Kettering did with Thomas Midgley Jr. in developing Ethyl gasoline, which eliminated engine knock, but loaded the air we breathe with lead (a deadly neurotoxin) for the next 50 years. And he developed Freon … a much safer refrigerant, but which released CFCs, which will be destroying our atmospheric ozone for the next 100-200 years.

I don’t recall ever personally turning an engine crank. My cars went from ignition keys to keyless and I plan to skip the driverless models and wait for a Jet-Cab … unless Jeff Bezos can provide an Uber-style version using one of his drones.

Things change.

Passion, Singular Vision Form Foundation of Successful Projects

Models of the 1957 Chevrolet Corvette, like this 1.6 scale model of the classic V-8 finished in Venetian red, remain popular with collectors.

By Jim O’Neal

“For years, I thought what was good for our country was good for General Motors, and vice versa.” – Charles Erwin Wilson, CEO of General Motors, as a nominee for Secretary of Defense for President Eisenhower in 1953 confirmation hearings (often misquoted)

From 1931 to 2007, General Motors was always the biggest and then, as predicted, they couldn’t pay their bills. They chose to file Chapter 11 bankruptcy and gratefully accepted a federal bailout. The corporate name was formally changed to “Motors Liquidation Company,” an entity that allowed them to deal with their many creditors through a complex structure of four trust funds. Then voilà – a new General Motors was born. It issued an IPO in 2010 that raised $20.1 billion, and by 2016 established record sales of 10 million units.

“General Motors is alive and Osama bin Laden is dead” became a clever line used in the Obama vs. Romney presidential race.

Before all this happened, much earlier, the first Chevrolet Corvette rolled off the production line in Flint, Mich., in 1953. However, it wasn’t until spring 1956 that I recall seeing one. We were parked at Gene’s BBQ Drive-in on Long Beach Boulevard in Compton, Calif., when a smallish, white convertible pulled in. I’m not sure what model it was or even the year, but it didn’t impress anyone (yawn). I had a cherry red 1951 Mercury with 17 coats of hand-rubbed, lacquer paint that was way cooler.

His name, Zora Arkus-Duntov, seemed better suited for the ruler of a planet in a Buck Rogers comic strip than as the father of this little “Vette” that was destined to become a true American sports car. Duntov joined the GM-Chevrolet R&D group in 1953, but the Corvette (French for a small, highly maneuverable ship, smaller than a frigate) didn’t get his full attention until 1955.

The first cars were six-cylinder two-seaters and white, “Polo White” to be precise, and only 300 were produced in 1953. The next year, sales were projected to be 10,000, but only 3,640 were assembled and only two-thirds of those were sold by year’s end. Then, unexpectedly, sales in 1955 declined to a measly 700. The drop was worrisome, especially to those who truly believed in the destiny of a car with Corvette’s aspirations.

Duntov was born in Belgium to Russian parents. He was raised in Russia and, in retrospect, the signs of where he was headed were clear. He loved motorcycles and at the tender age of 14 designed a motor-driven ice sled. The family moved to Germany and at university, he wrote his thesis on supercharging.

When he left the Chevrolet R&D team for Corvette, he could see the car wasn’t quite right. “The first time I saw Corvette, I think … beautiful, beautiful car … but I was disappointed what was underneath … but visually, it was superb!” He believed in its future, as did the man who created it, Harley Earl. Earl’s 1927 LaSalle had placed him at the forefront of Detroit’s great stylists. But it was Duntov who transformed the Corvette into “a bat out of hell.”

The 1956 Corvette was the first model to feel the impact of Duntov’s influence. The 210-horsepower engine could be cranked to 225 with the optional twin, four-barrel carburetors. Then, for racing, you could add Duntov’s cam, 240 horsepower. This one reached 163 mph, which really got the automotive world’s attention!

Despite all the improvements, the team was still restless. Bill Mitchell succeeded Earl as head of design and when he saw the designs of Larry Shinoda, a young Japanese-American who created his first designs while in a WW II internment camp, he knew they had it – the most striking of all Corvettes, the 1963 Sting Ray. This marked Corvette’s true arrival and when combined with what Duntov put under the hood, it ensured them a place in history. Corvette would lose its way at various times over the years, but a sense of heritage and resilience always enabled it to come back.

If the new General Motors ever stumbles again, they would be wise to look back at their own Corvette history. They will be reminded that the cars we admire most (and buy) derive from true passion and a strong singular vision.

McNamara a Fascinating Executive with a Fascinating Career

A large photograph of John F. Kennedy and his original cabinet, signed by cabinet members including Robert McNamara (fourth from left), sold for $7,500 at a December 2016 Heritage auction.

By Jim O’Neal

Lieutenant Colonel Robert McNamara had planned to return to Harvard after his stint in the military since he truly enjoyed the Cambridge lifestyle and teaching statistics was his first love. However, in a bizarre twist of coincidence, he and his wife Margaret contracted polio. They were still hospitalized in August 1945 when World War II. His mentor, Tex Thornton, persuaded him to consider a new, higher-paying career in the private sector to help with the family hospital bills.

McNamara and the other Whiz Kids excelled at the Ford Motor Company by utilizing the skills they honed in the Army: control the organization by converting facts and numbers into meaningful information that was actionable. This was particularly valuable at Ford and its archaic operations … pitted against its main competitor General Motors and its classic style of highly accountable, decentralized profit centers. McNamara became the unofficial leader when Thornton left Ford for greener fields in aerospace.

McNamara rose quickly, as Henry Ford II was new and unsure of himself. To Ford, McNamara offered reassurance; when questions arose, he always had answers, not vague estimates, but certitudes, facts and numbers … and a lot of them. On Nov. 9, 1960, McNamara was promoted to president at Ford. It was the first time someone outside the Ford family was in charge.

As fate would have it, the prior day, on Nov. 8, John F. Kennedy became president-elect of the United States. Their careers would soon be joined in a truly unexpected way.

Kennedy sent Sargent Shriver to offer McNamara either the Secretary of Treasury or Secretary of Defense cabinet position. McNamara was disdainful of Treasury, but eager to take on something much more exciting, assuming his boss would agree (it had been only six weeks since he had taken the reins at Ford).

We all know how this turned out, but perhaps not the financial sacrifice involved. By accepting the Defense position, McNamara left $3 million in stock options.

Robert Strange (his mother was Clara Nell Strange) McNamara served as Secretary of Defense under two presidents (JFK and Lyndon B. Johnson) from 1961 to 1968, the longest tenure in history (10 days longer than Donald Rumsfeld), and during the important build-up years in Vietnam. In 1968, he sent a letter to LBJ advising him that the war was unwinnable and recommending the United States end it. The president never replied and McNamara was finished.

Later, he told his friend, Washington Post publisher Katharine Graham, he wasn’t sure if he quit or was fired. She replied, “Are you crazy? Of course you were fired!”

In 2003, Errol Morris produced the documentary The Fog of War, which captures these war years, including a poignant ceremony when McNamara retired and LBJ awarded him the Medal of Freedom. McNamara was so emotional that he had to defer on his acceptance remarks. It is a good flick and recommended since it uses archival film with contemporary comments from McNamara.

A fascinating man and career. He served as president of the World Bank from 1968 to 1981 before dying in 2009 at age 93.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Military Officers Swooped In and Saved Ford Motor Company

Henry Ford, left, often took trips with Thomas Edison and Harvey Firestone. This photograph, circa 1924, signed by Ford, sold for $1,195 at a June 2010 auction.

By Jim O’Neal

In 1968, General Curtis LeMay was the vice presidential running mate with American Independent Party candidate George Wallace. This unlikely duo snagged 46 electoral votes and five states with almost 10 million popular votes. This was the last time a third-party candidate won a state.

During World War II, LeMay had implemented a controversial bombing campaign in the Pacific. It was during this time that future Ford Motor Company President Robert McNamara was busy analyzing U.S. bomber efficiency and effectiveness, especially the B-29 command of General LeMay, as part of a team headed by Colonel Tex Thornton.

LeMay and McNamara would cross paths again during the Bay of Pigs fiasco and the war in Vietnam.

During the late war years of the 1940s, the Ford Motor Company was struggling to remain viable. President Edsel Ford, son of founder Henry, died of stomach cancer in 1943 and the board made the mistake of bringing back an ailing Henry Ford in an act of desperation. The company was losing $9-10 million a month and the Roosevelt administration had considered nationalization to keep vital war materials flowing.

In 1945, Edsel’s son Henry Ford II was discharged from the Navy and the board quickly named him president of Ford. However, the company he inherited was still a shell of a corporation badly in need of modernizing its production, establishing financial controls and building an organization.

In a stroke of genius, Tex Thornton decided to market his staff of nine wartime officers to corporations that were reconverting from military to civil production. After all, his colleagues were part of a management science operation within the Army Air Force and, without a doubt, were the most talented managerial team of the century … young men who had gained 25 years of experience in just four years.

Thornton sent a cable to young (28) Henry Ford II and after an impressive interview, Ford hired the group with salaries ranging from $10,000 to $16,000. Bob McNamara was the second-highest paid and he took over finance at Ford. This is the group that became the famous “Whiz Kids” (although internally they were called “Quiz Kids” since they were always asking “Why?”). The Ford Motor Company would never be the same, fortunately, and slowly started catching up with rival General Motors.

One amusing anecdote involves The Edsel Show, a live one-hour television special designed to promote Ford’s cars. It aired on Oct. 13, 1957, and featured Bing Crosby, Louis Armstrong, Rosemary Clooney and Frank Sinatra. The show drew great reviews.

Clooney received one of the new Edsels as a gift and after the show, she and Henry Ford were walking together when she went over to get in. The door handle came off in her hand, so she turned and said, “Henry, about your car…”

Quality control was still en route to Dearborn, Mich., but arrived after the Edsel’s funeral.

More about Robert Strange McNamara, who became Secretary of Defense in 1961, in future posts.

As America Played, Europe’s Dictators Set Stage for World War II

This 1939 edition of *New York World’s Fair Comics*, featuring a blond Superman on its cover and graded CGC VF/NM 9.0, sold for $25,300 at a July 2002 Heritage auction.

By Jim O’Neal

Spring 1939 was a season of triumph for Europe’s trio of new dictators. Francisco Franco finished up his work in Spain at a cost of 1 million dead. Benito Mussolini seized Albania and Adolf Hitler marched unopposed into Prague and claimed the rest of Czechoslovakia. Neville Chamberlain and his Munich Pact would be enshrined in the hall of naïveté for eternity. Another diplomatic fantasy dashed.

War fever was ratcheted up a notch, but most of the world pretended not to notice.

In the United States, people sought escape in entertainment, particularly in New York, where the flashy World’s Fair offered them a glimpse into “The World of Tomorrow.” The pavilions of 33 states, 58 countries (minus Nazi Germany) and 1,300 companies filled the imaginations of visitors with modern marvels like television, nylons, robots and man-made electricity.

The popular General Motors “Futurama” exhibit drew 28,000 visitors daily and featured their vision of life in 1960, where everyone would be fit and tan, take two-month vacations and drive cars powered by “liquid air.” Visitors left with a button reading “I have seen the future” — wandering the 1,200 acres like members of a congregation that had witnessed a divine miracle.

The 1938 film *Love Finds Andy Hardy* marked the second pairing of the popular Mickey Rooney and Judy Garland.

In June, the King and Queen of England came to America and their parade in New York attracted over 3 million people (second only to Charles Lindbergh) and another 600,000 in Washington, D.C. Eleanor Roosevelt famously served them genuine American hot dogs when they finally made it to the White House.

Fantasy also reigned at the movies, where Walt Disney in 1937 introduced his first full-length cartoon, Snow White and the Seven Dwarfs, and was hard at work on an animated paean to classical music, Fantasia. But the hottest box-office draw in 1938 was the freckle-faced teenager Mickey Rooney and his small-town exploits as Andy Hardy. Then came the most anticipated event in movie history, the premiere of Gone with the Wind and its epic romance in Civil War Georgia.

Awash in fairy tales and cartoons, science-fiction and nostalgia, people had little patience for bad news. However, when it started, there seemed to be no end. A surprise agreement between Germany and the Soviet Union and on Sept. 1, 1939, the killing began. After a faked Polish invasion of Germany, they unleashed 1½ million German soldiers in “response,” backed up by the most powerful war machine ever known to man.

Fantasy time had ended.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Chevrolet Brothers Never Benefited from Company’s Enduring Success

Original ad illustrations, like this piece for Chevrolet titled “Car Passing a Buggy,” 1925, by Lawrence L. Wilbur, are popular with collectors.

By Jim O’Neal

One of the most recognizable emblems is owned by Chevrolet. It was quickly called the “bowtie” for its unique design, but the origin of the company, its name and invaluable trademark is a complicated story not well known.

The Chevrolet family had their beginning in Switzerland, where the father was a watchmaker. This is where the highly accomplished mechanic, designer and racing driver, Louis-Joseph Chevrolet, was born on Christmas Day 1878. In 1887, the family moved to France, where Louis’ brothers Gaston and Arthur were born.

Chevrolet first used its “bowtie” emblem in 1913.

The brothers became obsessed with bicycle racing, a first-tier sport in France. One story is that American playboy-sportsman Willie Vanderbilt encouraged them to move to America where their skills would be more appreciated ($$). Louis went first and was soon followed by Gaston and Arthur, who joined Louis to work on French cars, fixing flats and eventually becoming factory racecar drivers for Buick.

Enter William C. Durant, who was busy buying car companies to add to the General Motors portfolio. According to one biography, he had an agreement to buy Ford, but only if Henry kept the rights for motorized farm equipment (Henry was spooked by a patent suit claiming invention of the automobile). Fortunately for Ford, the banks would not provide financing – “The industry is too risky” – and he went on to become a giant in the car industry instead of farm equipment.

After a financial panic in 1910, the GM board ousted Durant, at least for a while.

So Durant convinced Louis Chevrolet to found a new car company, the Chevrolet Motor Car Company, but they parted ways when Durant added a cheaper version that Louis thought was demeaning. Louis proceeded to sell his stock and, in an all-time blunder, left his name with the company and decided to focus on racing again.

He managed to finish 7th in the 1919 Indy 500, but it was Gaston who turned out to be a phenomenally good race driver. When Gaston finished first in 1920, he became the first driver in the history of the race to go the full distance without making a tire change. However, his fame was short-lived. Six months later, at age 28, in November 1920, he died in a fiery crash with Eddie O’Donnell at the Beverly Hills speedway in a race for the “Speed King of the Year.”

Gaston’s death resulted in the brothers leaving racing, although Louis continued to design engines for Ford. The Indianapolis Motor Speedway Hall of Fame Museum features a memorial dedicated to the many accomplishments of Louis-Joseph Chevrolet. Fittingly, he was inducted into all four major automotive Hall of Fames.

Durant eventually used his stock in Chevrolet to buy General Motors again and the Chevrolet brand is still alive, although none of the Chevrolets benefited from its long enduring success.