Getting the Price of Automobiles Down.
The engineers banded together and studied standards of hard steel, screw threads and wheel rims. The manufacturers, preserving open minds, co-operated, and today automobiles are the most interchangeable of all assembled mechanisms.
But for this the farmer, the moderate salaried city man, the mechanic and the small tradesman would not today be consumers of motor cars. But for this the average price for passenger cars, originally in 1900 around $3,000 and by 1911 reduced to $1,000, would never have been gotten down in 1916 to $605.
The average price of all motor vehicles, combining pleasure cars and trucks, was, in 1916, $636. The preponderance of passenger cars at the lower prices brought the average down, since the average price of motor trucks alone was about $1,800. For every motor truck sold, eighteen passenger cars were disposed of in 1916.
With standardization and the consequent lowering of cost, the automobile industry acquired a momentum that has carried production forward on a constantly ascending scale, as witness these figures of passenger cars alone:
| Year | No. of cars made |
|---|---|
| 1909 | 80,000 |
| 1910 | 185,000 |
| 1911 | 200,000 |
| 1912 | 250,000 |
| 1915 | 842,249 |
| 1916 | 1,617,708 |
The manufacture of motor trucks almost doubled in one year. The number produced in 1915 was 50,366. In 1916 the number made was 92,130.
The above table, showing the rate of increase in passenger cars made in seven years, makes it clear that the greatest growth in the passenger car business has been since and including the year 1911.
That was the year in which the largest number of medium and low priced standardized cars with refinement of detail and added equipments, selling from $1,500 down to $500, was first put on the market. Ford almost doubled his output in that year. The next years, 1912 and 1913, also he more than doubled each year his output of the previous year. And in 1916 he made nearly one-third of all the passenger cars produced in the entire United States in that year.
Could anything demonstrate more conclusively than these facts, that if you have an article within the price of the mass of the people, it will sell, if the people want it? The one idea of Henry Ford—quantity sales—saved to the United States the premiership in automobile making. For other manufacturers adopted it, some radically, others in a modified form. Its influence was unquestioned in putting the price of motor cars at a figure at which a person happening to have less than the income of a millionaire could afford to buy one, so that when every one of the many values and benefits of the existence of the modern automobile is scheduled, let us, in giving credit for them, place the name of Ford at the head of the list.
When we have arrived at our destination, or have attained an object much desired, our satisfaction is such that we are in a forgiving mind and prone to forget the sacrifices we had to make, the difficulties we had to overcome, the strenuous work we had to do. The end justified the means, and we don’t think long about the hardships in the means.
Preëminence of the United States in the motor field has not been gained without hardships, sacrifices and disappointments by those engaged in it, nor was it reached by the immediate and uninterrupted success of all companies organized to commercialize the invention.
While, as we have stated before, the number of final failures of companies was small compared with those in some other avenues of enterprise in the development stage, the number of individuals and corporations in the automobile business that started on the wrong road and found it impassable, was not small. But here again it was fortunate for humanity, reckoning the automobile as one of the greatest boons vouchsafed the human race, that the mechanical perfection of the automobile was reached at a date coincident with more enlightened thought, a liberalism of view and a clearer vision of the possibilities of the future by our men of business.
For automobile enterprises that took the wrong road and got mired in the mud of mechanical and management difficulties and financial complications were, most of them, lifted out of the slough by men who knew the right road and were better drivers. Had the automobile developed mechanically to near-perfection a score of years before it did, not only would the people as a mass not have been ready for it, but it is doubtful if business at that period had developed to the point of efficiency where it could recognize the possibilities latent in the motor car as a money-making machine. Where money is, the best brains go. Capital is timid. But brains and capital want only to be shown.
Some of the most successful motor cars and motor car companies of today were deeply mired in financial difficulties a decade ago, but were pried and towed out and made great successes by new brains and new capital administered by a new set of men.
Nor was the industry immune from the bane of all invention industries—the patent right. The man who gave it the most trouble was the man whose name is far up toward the head of the list of men who were responsible for the inventive ideas involved in the motive feature of the automobile—Selden.
He kept the industry in a ferment for ten years or more, whether designedly or not, through his patent, the mere existence of which tended toward restraining its development by discouraging inventive expansion, and ceasing to exercise the depressing effects of a wet blanket on automobile growth only when the influence of his patent was neutralized by an adverse court decision.
The earlier commercialism of the automobile was characterized by many extravagances in expansive plans, high financing and even recklessness, not only on the part of manufacturers, but buyers of automobiles as well.
In getting the price down to a figure which is not excessive, the manufacturers removed the cause which militated most against popularization of the invention and provided one of the reasons for opposition to it by many people. To pay the prices which originally prevailed, men mortgaged their homes and women sold their diamonds and went bankrupt on the upkeep of the car. Manufacturers expanded too lavishly, overcapitalized, and attempted great stockjobbing consolidations, while incompetent officers were paid excessive salaries, until conservative financiers entered a protest and the banks called a halt.
The abuses which were co-existent with one of the eras of the automobile’s development caused the industry to be regarded by a class of the people as a luxurious outlaw and a menace to the well-being of the country.
Vice-President Fairbanks raised his voice to protest against the new manifestation of human nature’s appetite for joy and comfort.
James A. Patten declared a Kansas City bank held fifty-two mortgages on as many automobiles, and that that sort of loaning was going to be stopped.
Certain banks blocked, as far as possible, loans for purchases of automobiles. A prominent banker as late as 1910 declared that the initial cost of automobiles to American users, being $250,000,000 a year, with as much more for upkeep and incidental expense, was equivalent in actual economic waste each year to twice the value of property destroyed in the San Francisco earthquake.
A year after this statement was made, 1911, saw the dawn of the epoch of low priced cars, and the low priced car has reversed the condition from an economic waste, if such it was, to an economic gain, which it undoubtedly is.
Through all the storms of protest and criticisms, manufacturers went on their way, just as the automobile inventors had done under similar circumstances when men laughed and scoffed at them and called them crazy.
The depression of 1893 came too early to affect the automobile industry, but that of 1907 hit it at the time when it was by no means as strong as it was later; and yet, while in that year dozens of companies were bankrupted, and in 1910, fifty-two went out of business, it should be said that the great majority of them were not actually starters in the race. They were entrants that never toed the scratch. Their failure to make a start was due to lack of capital or inefficient organizers. A very large proportion of automobile companies that actually started in business have survived and are successful.
Names of automobile manufacturers who are prominent today were familiar names in the earlier stages of the industry, and more of the original automobile makers have survived than have fallen by the wayside.