Will Rogers – The Intelligent Collector Magazine

We owe Thomas Edison, Henry Ford a debt of gratitude

This uncanceled Edison Phonograph Works stock certificate is dated 1888, the very year the company was founded, and was issued to “Thomas A. Edison.” It was sold at an April 2012 Heritage auction.

By Jim O’Neal

On Monday, Oct. 21, 1929, the Edison Institute was dedicated in Dearborn, Mich. It was to commemorate the 50th anniversary of the first incandescent light bulb that Thomas Alva Edison had invented and the strong friendship between Henry Ford and Edison. Although it was a relatively small group that joined in, it was loaded with luminaries: John D. Rockefeller, Orville Wright, Will Rogers, Marie Curie and, of course, Henry Ford and Edison, who was 82 years old.

President Herbert Hoover’s speech stated: “Every American owes a debt to him. It is not alone a debt for great benefactions he has brought to mankind, but also a debt for the honor he has brought to our country. His life gives confidence … our institutions hold open the door of opportunity … to all that would enter.” The ceremony was broadcast on radio and listeners were asked to keep all their electric lights off until a switch was flipped at the event.

One week later, the stock market was in a state of chaos as a series of events led to the Great Depression.

Ford (1863-1947) had grown up on a rural farm in Michigan and, like virtually every other American, was captivated by the remarkable inventions Edison was cranking out. Eschewing farm work after his mother died, he inevitably went to work at his hero’s company – Edison Illuminating Company – as an engineer.

Ford rose through the ranks to Chief Engineer, which allowed him more personal time to work on developing his version of an automobile. In 1896, at age 33, Ford developed his first experimental car, called the Ford Quadricycle. Edison had been working on an electric car and when the two men finally met, Edison reputedly slammed his fist on a table and exclaimed, “Young man, you have it!” He encouraged Ford to continue his development and this started a longtime friendship between the two geniuses.

Ford eventually developed his Model T, a series of improvements (not inventions) to the combustion engine, and a continuous assembly line. Introduced in 1908, the Model T would be extremely successful, eventually becoming one of the top-selling cars of all time. With the steering wheel on the left side, it is estimated that over 75 percent of everyone who learned to drive did it in some version of the Model T.

Along the way, Ford pioneered the eight-hour workday, reduced the cost from $850 and raised worker wages to $5 a day so they could afford to buy a car. He became a rich and successful businessman with a passion for collecting historic objects. President Wilson convinced him to run for the Senate since he was for peace and a Democrat, but he lost. After his death in 1947, the Edison Institute was renamed the Henry Ford Museum.

Today, the Henry Ford Museum of American Innovation includes Greenfield Village, a tour of the massive Ford Rouge factory, and even a dedicated IMAX theater. The museum has an astonishing collection of Americana, with over 200 cars, JFK’s limousine from his trip to Dallas, the bus Rosa Parks made famous, Lincoln’s rocking chair from Ford’s Theater, Edison’s laboratory, the Wright Brothers’ bicycle machine shop, steam engines and other historic items depicting the history of America.

The Henry Ford Museum is the largest indoor/outdoor museum in the United States, with over 1.7 million visitors a year. Somewhere in this vast collection of truly famous objects is a small test tube with Edison’s last dying breath. Ford convinced Edison’s son to hold a mask over Edison as he was dying and capture/cork the “last breath.” Whether it does or not is irrelevant. The fact is that there are a number of similar test tubes that were filled in the room when Edison actually did die. The Ford example represents the genuine friendship between these two remarkable men and the wheelchair races on their adjoining estates in Florida, the hunting trips that included Harvey Firestone and President Harding, and their quest for knowledge that makes our lifestyle so much better even today.

They were both deeply flawed men who have slowly melted into history, but President Hoover was right. We do owe them a debt a gratitude and can overlook some or most of their egregious sins as the famous door of opportunity is still wide open, as we see every day.

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].

When Nation Faces Uncertainty, Good Leaders do What They do Best

Merritt Mauzey’s Depression-era oil on masonite, *Uncle Fud and Aunt Boo*, realized $77,675 at a December 2007 Heritage auction.

By Jim O’Neal

In January 1931, a 46-year-old tenant farmer drew the nation’s attention to a small event in rural Arkansas. Homer C. Coney harvested corn and cotton on land he rented for $8 an acre. But a tremendous drought the previous summer meant that most farmers had no crop, no money and no way to survive the winter.

Coney tried to sell his truck for $25 … no takers. So he and his family – trapped in a one-room shack – tried to exist on a Red Cross relief ration of $12/month. Coney, his wife and five sons lived on beans mixed with lard (to “give it flavor”).

A young neighbor mother visited the family frantically seeking help because her children had not eaten for two days. Coney said, “Lady you wait here. I am a-going to get some food over at Bells – the Red Cross man that never give out nothing.” In England, Ark., Coney discovered a big crowd of people, hungry since the Red Cross office there was out of food vouchers. Soon, there was a crowd of 500 people who confronted the mayor and chief of police. “We’re not beggars and will work for 50 cents a day, but we will not let our families starve.”

All over the country, people read about the brave souls who gathered to demand food. “500 Farmers Storm Arkansas Town Demanding Food for Their Children,” read the front page of The New York Times. “You let this country get hungry and they are going to eat, no matter what happens to budgets, income taxes or Wall Street values,” wrote populist Will Rogers in his newspaper column. “Washington mustn’t forget who rules when it comes to a showdown.”

The Great Southern Drought of 1930 was a catastrophe, to be sure. But this act of desperation was only a small part of the bigger issue in the new decade. In 1930, 26,000 businesses collapsed. In 1931, 28,000 more, and by the beginning of 1932, 3,500 banks, holding billions in uninsured savings, went under. 12 million people (25 percent of the workforce) were unemployed and real earnings fell by one-third. In some cities, it was worse; 50 percent of Chicago was out of work, 80 percent of Toledo.

Soup lines stretched as far as the eye could see. America the land of possibility was the land of despair. In 1931, the people of Cameroon in West Africa sent a check to the people of New York for $3.77 to aid the “starving.” About 20,000 veterans of WWI arrived at the U.S. Capitol to demand early payment of their pensions. On July 28, 1932, General Douglas MacArthur – side by side with Major Dwight Eisenhower with a parade of infantry, cavalry and tanks – routed the squatters as ordered.

Today, it is hard to imagine the level of expectation that greeted President Franklin D. Roosevelt when he took the reins from the much-maligned Herbert Hoover. However, the Democratic platform in 1932 was much the same as Hoover’s: a balanced budget and a curb on spending. Even the term “New Deal” was a fluke line from a nomination acceptance, until it surprised everyone and became popular.

But Roosevelt had a supreme confidence, enormous energy, and a determination equal to that of George Washington and Abraham Lincoln. He quickly cribbed a line from Henry David Thoreau (“Nothing is so much to be feared as fear”), began fireside chats with the American people from a room with no fireplace, and started leading.

That’s what good leaders do.

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].

The Roaring Twenties were Outrageous, and Then … Black Tuesday

The Roaring Twenties as depicted in Everett Shinn’s 1925 Curtain Call. This oil on canvas realized $119,500 at a May 2007 Heritage auction.

By Jim O’Neal

One man poisoned himself, his wife and their two young children. Another dropped dead in his stockbroker’s office. Still another (in North Carolina) went into his garage and shot himself. Both the rich and poor were affected.

Winston Churchill woke up in a New York hotel room to a loud commotion. “Under my very window, a gentleman cast himself 15 stories and was dashed to pieces.” Irving Berlin explained it this way: “I had all the money I wanted for the rest of my life. Then suddenly I didn’t!”

It was Black Tuesday, Oct. 29, 1929.

The “Roaring Twenties” conjures up Prohibition, gangsters, flappers and bizarre fads: flagpole sitting, dance marathons, talking movies, the Marx Brothers … and the greatest fad of all … playing the stock market.

Previously a rich man’s game, by the 1920s one million Americans owned 300 million shares of stock, much of it bought on margin. And why not? There were all these new things like radios, telephones, affordable cars and, especially, the ticker tape machine allowing individuals to buy and sell stocks almost instantly.

A person would have to be crazy to stick their money in a bank when you could make a small fortune buying “on the margin.” Calvin Coolidge said: “The business of America is business” and business was booming!

New technologies for refining oil allowed companies to produce more iron, steel, gas and chemicals. Then Treasury Secretary Andrew Mellon cut corporate taxes and previously marginal companies had more money to spend. Many of them spent it buying stocks, driving the stock market even higher (and also boosting their profits).

During the summer of 1929, the stock market reached an all-time high with a record number of shares purchased. However, astute investors noticed a number of troubling warning signs. First was the ever-increasing number of shares bought on margin, a key indicator of increased leverage and a tell-tale sign of speculation versus investing. Second, only 400 of the 1,200 companies listed on the NYSE were actually increasing their revenues and profits fast enough to justify the higher stock prices. Lastly, “Stock Trusts,” pools of money by wealthy investors, could manipulate individual stocks by simply investing heavily in them.

The stock market was being rigged in plain sight, but only a few like business theorist Roger Babson was warning about an impending crash.

Throughout September and October, market volatility increased sharply and on Oct. 24, a near-crash occurred (Black Thursday) when there was a sharp, terrifying plunge. When the market opened, it went straight down and by mid-afternoon stocks had lost $11 billion. But brokers managed to stabilize it and it recovered 75 percent.

On Monday, there was another plunge as those who had survived decided to try and salvage what they had, despite many calls of reassurance. And on Tuesday, Oct. 29, the carnage really began.

The day started with thousands of people congregating on Wall Street, as if they needed to be present for some historic event. All of the major stocks began to crash.

Brokers were flooded with sell orders.

In two hours, eight million shares were sold. Then more margin calls were made and people began to literally fall into shock. By 3 p.m., after five hours of trading, the market closed. Sixteen million shares had been traded at an estimated loss of $15 billion.

Then stories of suicides began. Will Rogers wrote, “You had to stand in line to get a window to jump out of.” Then businesses began to die as well. First to go were the investment firms, followed by the companies who over-speculated on stocks, and then finally the banks.

Like a house of cards, the Roaring Twenties tumbled to an end and the country was entering the first phase of the Great Depression. It would continue for another 12 long years until we entered World War II.

Nothing like a nice little world war to get the economy humming again.