The following is a reprint of an article by Griffith Borgeson that appeared in the February 1967 issue of Motor Trend Magazine. There are of course two sides to every story and this is but one presented here for posterity (Bill Wybenga President of LOC 2023)

THE LITTLE-KNOWN BATTLE OF TWO HENRY'S: DEDICATION TO AN IDEAL VS BIG BUSINESS.

Henry Martyn Leland was as much an American patriot as George Washington and at least as honest. He was at least as nobly idealistic as Abraham Lincoln, his lifelong hero. He grew up with American and he was personally responsible for many things for which we should be grateful today. He was a leader of the highest order and paid heroically for being what he was. He paid, mightily but majestically, "The Penalty of Leadership."
That was the name of a piece of advertising copy that his son,
Wilfred, tore off one night in December, 1914. The son was treasurer of
Cadillac and the father its president. It was Wilfred who had recognized
the virtues inherent in the V-8 engine configuration and had caused it to
be introduced to American industry via Cadillac. The competition howled
that the idea was folly and held Cadillac up to ridicule. "The Penalty of Leadership" was an expression of the Lelands' righteous wrath. appeared in print only once -in the Saturday Evening Post for January 2, 1915-but to this day it is held up as a masterpiece of advertising copy.

HM became a member of the Society of Automotive Engineers in 1909. He became its president in 1914 and in his first address to that body h e said:
"It is great to be an engineer. It is greater to be a man--a great, broad, full-measured man. This is the great calling. I have been singularly blessed for 30 years with opportunities of mingling with so-called big businessmen and manufacturers, and I can say to you in all candor and with all the sincerity of which I am capable, that I have found them as a whole (of course there are some despicable exceptions) the noblest, the most generous, the most honorable and the most just men that it has ever been my privilege to meet."
Life had some bitter surprises in store for Henry Martyn Leland.
In his own brilliant mind HM viewed the machine as man's liberator, not as a master to be served. This was his motivation in devoting his life to engineering. By means ofthe machine he would lead his fellow men to a richer, fuller, happier life.

After 20 years as a low-paid but brilliant (he invented barber's
clippers) engineer with the machine-tool-building Brown & Sharpe Co., HM moved to Detroit in 1890. There he established the Leland &Falconer, Co., and began manufacturing machine tools, gears and internal-combustion engines. When the curved-
dash Oldsmobile went into production, L&F supplied its planetary transmissions.
Seeking to do his client a favor and to generate new business for his company, HM designed and built a prototype engine to replace that of the Olds.
Its displacement was the same but it developed three times the
horsepower. Moreover, it was designed to precision tolerances that would
provide ready interchangeability of parts, a technique Leland transplanted from the New England metalworking industry. But R.E. Olds was having no trouble selling his existing product, and the new engine gathered dust.

In 1899 a group headed by William H. Murphy, a member of one of Michigan's wealthiest families, formed the Detroit Automobile Co. For their "engineer" they hired a young mechanic named Henry Ford. Results were so disappointing that the firm surrendered its charter 15 months later. Then Murphy financed Ford's 4 9 9 9 racing car project. This
resulted in considerable publicity for Ford and in November, 1901 the Murphy group decided to try again; they rehired Ford and set up the Henry Ford Co. Again the results were disappointing, there were frequent personality clashes and the firm was liquidated in March, 1902. The Murphy group had disposed of Ford and called upon HM--by now a prominent and highly respected figure in local industry--to evaluate the plant equipment prior to its sale.
HM did his job but also told the group that if it still wanted to establish a beached in the budding automotive industry, he could provide his own great improvement over the popular Oldsmobile engine; beyond that, L&F could supply all of the machine components. The Murphy group could buy frames, wheels and bodies from other suppliers, use its existing plant for final assembly, and create a marketing organization.

The promoters leaped at the proposal and on August 27, 1902 the Cadillac Automobile Co. was organized, with HM as a director and small stockholder. This was Detroit's first successful automobile manufacturing firm, Olds having returned to Lansing. The oft-repeated statement that the Ford Motor Co. grew out of the companies of the Murphy group is untrue; it was formed later, and independently of this group.

The Cadillac car was an overnight success, being cheap ($750), economical, efficient and reliable to an unprecedented degree.
This reliability was largely due to the equally unprecedented--in the automotive
field--precision of Leland's workmanship.
An accompaniment of this precision and one of its motives was true interchangeability of parts. This of course was the whole world's key to unlocking the manufacturing and sales potential of innumerable products, including the automobile. It made possible the mass production for which Henry Ford, ironically, usually is credited.
HM's only son, Wilfred, was studying medicine in New England when his father wrote him, inviting him to comet o Detroit to see if he would not enjoy taking part in the exciting and challenging Cadillac adventure. He tried it, loved it and soon became his father's managerial right arm at L&F.

By 1904 Cadillac already had become a small giant and was too
much for the Murphy group to handle alone. At its insistence, L&F and
Cadillac were merged under the name of the Cadillac Motor Car Co., with
HM as chief engineer and later president and Wilfred as treasurer. By the
end of 1906 there had been 12, 212 Cadillacs built--the largest production in the world. In 1909 Cadillac was purchased by General Motors for $4.5 million and the Lelands were retained as managers of the company. Until they resigned from GM much of their talent and energy went into reorganizing ailing GM properties.

In 1910 HM made a tour of manufacturing plants in Germany and
came home shaken by the military atmosphere he had found there and by
the obvious appetite for war and conquest. After a later trip to England, he was convinced that the future of civilization was at stake and that air power would be a decisive factor in the winning of the war. On both sides of the Atlantic aircraft and their engines were being made by hand. In the 8 year period ending in 1916, only 54 airplanes had been built in the United States.
As one of the most distinguished figures in American industry it was easy for him to obtain an audience with President Woodrow Wilson. He told Wilson of his certainty that America must become involved in the war and urged preparation without delay. But Wilson's re-election campaign was based on keeping America out of war and he was insulting in rejection of HM's "alarmist notions." HM returned to Detroit and continued to plan
for the inevitable.


Thus, when Congress declared war on Germany on April 6, 1917, it
was possible for Wilfred to be in the New York office of GM's head, W.C. Durant, the next day, with detailed plans for conversion of one of the Cadillac facilities to aircraft-engine manufacture. Durant's reaction was as bluntly isolationist as Wilson's, and more:
"NO!" he shouted. "This is not our war and I will not permit any General Motors unit to do any work what-so-ever for the government.”
The Cadillac company was very much the creation o f the Lelands and their attachment to it was profound. But they tendered their resignations, sold their stock and went to Washington looking for work. They were encouraged to return to Detroit and to begin the creation oft h e
Lincoln Motor Co., named in honor of the presidential candidate for whom FM had cast his first vote at the age of 21.

The demand for aircraft engines by the Allies skyrocketed beyond the wildest earlier expectations. To meet this need the Liberty engine was
designed and government contracts for its manufacture were let out to six companies, including Lincoln. As Lincoln was forced to greatly expand its facilities and capacity, outside investments were accepted. One of the men who jumped to invest in the Lelands' new activity was William Murphy.

By August 31, 1918--one year after the government contract was signed--the Lincoln company had delivered 2000 of the 12-cylinder Liberty engines. It is said that the company established a record for the largest number produced in a single day, month and year, although other manufacturers had a start of five months while a new Lincoln plant was being built.
On July 31, 1918 the government gave Lincoln a non-cancelable contract for 9000 engines, with an option for an additional 8000. Then, in January, 1919, with the war ended, the government announced t h a ti t wished to abrogate its contract. Whether they had any real voice in the matter or not, the Lelands agreed to help their country return to a
peacetime economy. However, they had based their investment on supposedly gilt-edge guarantees; these had vanished and the plant and its machinery were unpaid for. They paid over $4 million in taxes on 1918 income.


What to do with the $10-million Lincoln plant?
Go o n building engines, obviously, but now for manufacturers of cars, trucks, tractors and for whatever aircraft demands that might arise. But Murphy, who had
made over $1 million on his investment when GM purchased Cadillac, saw richer possibilities in a new Leland-built car, a car even better than the Cadillac.
"Build us a car, Uncle Henry," the outside investors pleaded. HM was persuaded and the company was reorganized.
The stock, representing $5.5 million in assets, consisted of 160,000 Class B shares and 24, 200 of Class A. The B stock had a market value of $3.77 million and over 100,000 shares belonged to the Lelands. The bulk of the remainder was owned by insiders from the Cadillac and Liberty- engine days. After Lincoln cars were in production and all the stock had been sold long since, William Murphy repeatedly begged Wilfred to permit his nephew, Dr. Fred Murphy, to buy $125,000 worth of Wilfred's considerable shares. Wilfred finally agreed, Fred Murphy became a director of the company and the tragic stage was set.

Then, in March, 1920, the Treasury Department demanded a further $5,725,673 in income tax on Lincoln's alleged wartime earnings. This meant agonizing sessions in Washington until the government's claim was disproved and withdrawn.
Due to prolonged delays by peace-time-converting suppliers, the new Lincoln cars, which were t o have started coming off the line in January, 1920, did not begin to do so until September, missing the sales season completely. Then, the car had hardly been introduced when a severe economic depression set in, the bottom dropped out of the market and Lincoln found itself in need of a paltry $350,000 to tide it over the hump.
It was at this point that the Murphy faction, led by Fred Murphy, set about driving the company into receivership, hoping to buy and gain total control of the corporation and its assets at a fraction of their worth.
Step by grinding and humiliating step, every move by the Lelands to save their company was blocked. To add to the hell, a new administration in Washington dredged up the old $5.7 million tax claim and slapped it on Lincoln.
Again, after it had done massive damage, the claim was withdrawn.


The depression year of 1921 was a hard one but Wilfred found a source for a $10 million loan and had gone to New York to collect it when, on November 7, he received a call from Detroit telling him that the government had still another new tax claim on Lincoln for $4.5 million. The loan was automatically killed and the Murphy faction seized the opportunity to vote the company into receivership.

During the Liberty-engine period there had been a certain amount of camaraderie between HM and Henry Ford. Ford also was building Liberty engines, had a badge which gave him access to the Lincoln plant, and he was a frequent visitor there, observing manufacturing methods and
discussing problems of mutual concern with HM, the master of precision volume production.
During Lincoln's prior financial trials Wilfred had offered Ford a piece o f excess factory property: Ford was not interested. Wilfred told him that if he did not find help soon the other directors would apply for receivership. Ford said, "After they do, come and see me.

Wilfred did this and on November 14 met with Henry and Edsel Ford. Since Lincoln would be for sale it was to the Lelands' great interest to find a buyer who would pay a reasonable price for its assets, who would honor its obligations to stockholders (the major ones being the Lelands) and suppliers, and would keep the Lelands at the helm of the company on which they had staked everything they had.

This led to a series of meetings with Ford and his executive staff and by November 21 Wilfred was satisfied that basic agreement had been reached on all these points. When he asked that this be put in writing, Ford, one of the world's most fabulously wealthy men, said, "Mr. Leland, we know each other. I will take care of everything." Wilfred, in the most tenuous o f bargaining positions, accepted the oral promise.

On December 29, 1921 Supervising Judge Arthur J. Tuttle was present at a meeting between the Lelands, Edsel Ford and attorney Harold Emmons. According to Tuttle, Ford agreed to meet the Lelands' terms, stating that his motives were not mercenary but sprang from a desire to help the Lelands and to save the industry which they had created for Detroit. Ford said that he would be willing to pay $5 million for Lincoln. This was an improvement over the $2 million that the Murphy faction was known to be planning to pay for the company it had wrecked, but it still did not approach the assets which had cost $16 million and which the Lelands valued at $50 million. Judge Tuttle refused to let the property go for less than $8 million; there were over $9.5 million in liabilities.


On January 11, 1922 The Detroit News ran a feature story based on an exclusive interview with Henry Ford. Under the heading "Fords Save Lelands" the story stated that Ford neither wanted nor needed Lincoln but was prepared to intervene in the situation out of motives of benevolence, sentiment and charity. It was stated that Ford would try to take care of the Lincoln stockholders. Said Ford, "It would be a stain against the motor-car industry and against Detroit to permit outsiders to secure control of the Lincoln plant merely because the Lelands have been caught in a financial pinch."
The Lelands were euphoric over their deliverance and helped to discourage other bids for their bankrupt company.
The press was almost universally adulatory of Ford, but one editor who was not wrote, "The deal...looks to us like one in which Ford saw a chance to pick up a good plant and something of a going concern at a bargain and he is going into it on that basis--it rather grates to see the venerable Henry Leland pictured in the role of a mendicant to satisfy Ford in another of his advertising stunts.”

The sale took place on the steps oft h e Lincoln plant on February 4. There were three competing bidders. When bids were called for, attorney Emmons bid $8 million for Henry Ford. The other bidders, who had made deposits, obligingly stepped down. "Sold!"shouted the auctioneer and a band that happened to be in the crowd of 3000 broke into playing "Hail to the Chief."
Before the sale Wilfred had asked Ford to specify how the Lelands, the major stockholders by far, would be remunerated.
"Mr. Leland," said Ford, "you just leave that to us. We are going to do what is right by you.”

On February 16 a party was held in the plant in honor of HM's 79th birthday. Henry and Edsel Ford attended and presented HM with an investment certificate for $363,000, which represented the par value of his Class B stock in the former company. All the stockholders leaped to the conclusion that they would receive similar treatment.

The Leland Lincoln V-8 chassis was built to absolutely unprecedented standards of precision and quality and was judged by many independent authorities to be the finest automobile in the world at that time.
Shortly after the sale a large group of Ford executives visited the Lincoln plant "to look at the layout, methods and processes with the view of improving them or, if worthy, of adopting them for other Ford plants.


The following day a horde of Ford workmen arrived and began "reorganizing" the plant; starting with the demolition of one of the walls of HM's private office. This was the bare beginning of the executive takeover by Ford personnel and it was characterized by studied insult and provocation. Lincoln's existing management was consistently ignored, by-passed, and its directives countermanded. These, of course, were very typical Ford tactics. Samuel S. Marquis wrote in his Henry Ford, An Interpretation:
"If the work of certain clerks in the shop is not wanted, why tell them so? Smash their desks...Expensive tools of skilled workmen are scattered over the floor. Foolish? Insulting? Humiliating? No. It takes the conceit out of a man who prides himself on his work."
The situation was chaotic, hellish. The Lelands found new financial backing and Wilfred called Henry Ford, asking to buy Lincoln back.
"Not for $500 million," said Ford.
Wilfred put his request in writing. It was ignored. And so was the
second. When the third reached Ford he sent a pair of executives on June
10, 1922 to evict the Lelands and all their personal belongings from the plant on that same day. They were handed two weeks' severance salary and were told that a final settlement would be made with them in a few days. It never was.

After attempting evasion Ford did, to his credit, pay off all the Lincoln suppliers, bringing the total price which he pain for Lincoln to $12,018,699.

Next came Ford's promise to repay the stockholders. It had been an
oral one and, even though it had been witnessed by Judge Tuttle, it remained oral and tended to elude the memories of Henry and Edsel Ford.
The Lelands began to fight. First, by publishing lengthy reports on
the entire history of the case, they tried to bring enough public pressure on Ford to cause him to make his promise good. But Ford, even though he had the strongest ambition to become President of the United States and was highly sensitive about his public image, ignored this tactic entirely.


The next step was full-scale legal action. With the support of 1800 stockholders and after years of preparation, the Lelands initiated a suit on November 16, 1927 in the Circuit Court of Pontiac, Michigan. T h e complaint asked for $6 million for the reimbursement of Lincoln
stockholders.
The Ford attorneys did not argue the case but moved that it be dismissed on the grounds that the agreement was invalid and unenforceable. This motion was overruled on March 15 and was appealed by the Ford attorneys to the Michigan Supreme Court on June 7, 1928. The final decision was handed down on February 1, 1929; four judges were in favor and three against.
The Ford attorneys claimed that the agreement was invalid on three counts.
Two of these were rejected by the court but the third was sustained. Said the court:
"What we do hold, and it is all that the purposes of the case require, is that after they (the Lelands) publicly announced that they were going to look after the interest of the stockholders, if they acted at all their duty required them to act for all, not for a portion of the stockholders. A contract for the reorganization of a corporation which contemplates the taking care of a portion only of the stockholders, and the exclusion of another portion from the benefits of the reorganization, is fraudulent and cannot stand. The man who bought a share of stock for $3 acquired the same interest in the company as the man who paid $50 for his share of the company's stock.”

How much a person had paid for his stock was the farthest thing from the Lelands mind. What they were fighting for was the reimbursement of each and every stockholder, above all that of the small investors, such as company employees, who had put their faith in Leland management. The Lelands lost no chance to emphasize that they would accept no reimbursement until all the other deserving stockholders had been paid for their stock.
That exception wrecked their case. Because of this all hope was lost and HM died on March 26, 1932, hardly rewarded abundantly for a life of towering service to community, nation and civilization.


Twenty years later his son assigned himself his life's last major
task: writing with his wife's strong help, the story of his father's life and fortunes. The research alone was a staggering undertaking and the two worked at it together for years. In 1958 Wilfred died but Ottilie, loyal t o his wishes, devoted another seven years to the accurate rendering of the Leland story. Master of Precision-Henry M. Leland was published last June by the Wayne State University Press o f Detroit. It is a precious contribution to automotive literature and to American history.

Since completing the book, Mrs. Leland has received corroborating evidence supporting her account of the negotiations and litigation between the Lelands and the Fords over acquisition of the Lincoln company.
This evidence is int h e form of a written communication from the Lelands attorney, William Henry Gallagher of the prominent Detroit firm Gallagher and Paul, whom she did not know was still alive.
Gallagher quotes from a conversation he had with Justice Nelson Sharpe of the Michigan Supreme Court after the court had decided against the Lelands:
"I chanced to meet him in the corridor of the capitol one day and
mentioned the Leland case. He exclaimed, 'That was an outrage--that was
an outrage! But the majority of the court felt that if we decided in your favor, Mr. Ford would have to settle.' I answered, 'Is that a good reason for denying justice?' He replied, 'Well, you know how I felt about it.' (He had written a n opinion in our favor.)”

This author had the unforgettable honor of being a close friend of Wilfred Leland for many years and of hearing this whole saga from his own lips. His bitterness against the Fords was unquenchable. But he always and unhesitatingly gave Henry and Edsel credit for maintaining--through 1933-very faithfully most of the traditions of quality which were basic to the Leland concept of the finest car in the world: The Lincoln.