CHAPTER XII

MONEY--MASTER OR SERVANT? In December, 1920, business the country over was marking time. More automobile plants were closed than were open and quite a number of those which were closed were completely in the charge of bankers. Rumours of bad financial condition were afloat concerning nearly every industrial company, and I became interested when the reports persisted that the Ford Motor Company not only needed money but could not get it. I have become accustomed to all kinds of rumours about our company--so much so, that nowadays I rarely deny any sort of rumour. But these reports differed from all previous ones. They were so exact and circumstantial. I learned that I had overcome my prejudice against borrowing and that I might be found almost any day down in Wall Street, hat in hand, asking for money. And rumour went even further 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 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 country, 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