THE AUTOMOBILE
The automobile industry is about twenty years old. It is now America’s most prosperous business. When Henry B. Joy, President of the Packard Motor Car Company, was asked to what extent the bankers aided in “initiating” the automobile, he replied:
“It is the observable facts of history, it is also my experience of thirty years as a business man, banker, etc., that first the seer conceives an opportunity. He has faith in his almost second sight. He believes he can do something—develop a business—construct an industry—build a railroad—or Niagara Falls Power Company,—and make it pay!
“Now the human measure is not the actual physical construction, but the ‘make it pay’!
“A man raised the money in the late ’90s and built a beet sugar factory in Michigan. Wise-acres said it was nonsense. He gathered together the money from his friends who would take a chance with him. He not only built the sugar factory (and there was never any doubt of his ability to do that) but he made it pay. The next year two more sugar factories were built, and were financially successful. These were built by private individuals of wealth, taking chances in the face of cries of doubting bankers and trust companies.
“Once demonstrated that the industry was a sound one financially and then bankers and trust companies would lend the new sugar companies which were speedily organized a large part of the necessary funds to construct and operate.
“The motor-car business was the same.
“When a few gentlemen followed me in my vision of the possibilities of the business, the banks and older business men (who in the main were the banks) said, ‘fools and their money soon to be parted’—etc., etc.
“Private capital at first establishes an industry, backs it through its troubles, and, if possible, wins financial success when banks would not lend a dollar of aid.
“The business once having proved to be practicable and financially successful, then do the banks lend aid to its needs.”
Such also was the experience of the greatest of the many financial successes in the automobile industry—the Ford Motor Company.