Citizen Ford

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When Ford began making the Model T, the company’s cash balance was $2 million; when production ceased, it was $673 million.

In 1913 the Ford Motor Company, with 13,000 employees, produced 260,720 cars; the other 299 American auto companies, with 66,350 employees, produced only 286,770. Cutting his price as his production soared, he saw his share of the market surge- 9.4 percent in 1908, 20.3 in 1911, 39.6 in 1913, and with the full benefits of his mechanization, 48 percent in 1914. By 1915 the company was making $100 million in annual sales; by 1920 the average monthly earning after taxes was $6 million. The world had never seen anything remotely like it. The cars simply poured off the line. An early illuminated sign in Cadillac Square said, “Watch the Fords Go By.” Ford’s dreams, in a startlingly brief time, had all come true. He had lived his own prophecy.

There was a moment, however, in 1909 when Ford almost sold the entire company. William C. Durant, the entrepreneur who put General Motors together from several fledgling companies, felt him out about selling the company. An earlier offer of $3 million had fallen through because Ford wanted cash. This time, his company more successful, Ford demanded $8 million. But again he wanted what he called “gold on the table.”

Durant couldn’t get the financing.

Ford’s timing in holding on to his company, it turned out, had been exquisite. There was no point in designing an Everyman’s Car unless the average man could buy fuel cheaply as well. The coming of Ford was almost perfectly synchronized with the discovery in the American Southwest of vast new reserves of oil.

If, as has been said, the American century and the oil century were one and the same thing, then that century began on January 10, 1901, in a field just outside of Beaumont, Texas. The name of the field was Spindletop, so called because of the spindly pines that grew there. For years local children had tossed lighted matches into the field; as the flames hit the strong petroleum vapors seeping up through the soil, there would be a satisfying bang. But anyone who believed that there was real oil beneath the ground was thought an eccentric. Oil was not found in Texas; it was found in places like Pennsylvania, West Virginia, and Ohio. Those states were all Standard Oil territory, and the Rockefeller people had no interest in the Southwest. “I will drink any drop of oil west of the Mississippi,” boasted John D. Archbold of Standard.

It was Patillo Higgins, a Beaumont man, who had insisted that there was oil underneath Spindletop, and he had been trying to tap it for several years. It had cost him $30,000 of his own money, and he owed friends an additional $17,000. As each attempt had failed he had been forced to go to others for financial help in order to continue drilling, his own share of the operation shrank. Higgins’s faith had never flagged, but he had become more and more a figure of ridicule in his hometown. “Millionaire,” his neighbors nicknamed him. The drilling had gotten harder and harder; just before New Year’s Day they had gone through 140 feet of solid rock. That had taken them to a level of 1,020 feet. On January 10 it happened. A geyser of oil roared out of the ground and shot a hundred feet above the derrick. No one had ever seen anything like it before; with it, the word gusher came into use.

 

At first no one could figure out how much oil the field was producing. Some said 30,000 barrels a day, some said 40,000. Capt. Anthony Lucas, who had become a partner of Higgins, said 6,000, because he had never heard of a larger hole in America. In fact, that one gusher was producing 100,000 barrels a day, roughly 60 percent of the total American production. One new well at Spindletop produced as much as the total from all the 37,000 wells back East in the Rockefeller territory. Within a short time there were five more hits. Eventually analysts found that the oil from the first six holes, some 136 million barrels annually, more than twice surpassed what Russia, then the world’s leading petroleum producer, could generate.

Spindletop changed the nature of the American economy and, indeed, the American future. Before the strike, oil was used for illumination, not for energy. (Until 1911 the sales of kerosene were greater than the sales of gasoline.) Spindletop inaugurated the liquid-fuel age in America. The energy of the new age was to be oil, and America suddenly was rich in it.