Business & Finance: Ford Wages & Profits

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On Jan. 5, 1914 Henry Ford was just a successful manufacturer of a popular low-priced car. By the next morning he was the most-discussed man in the world. On that date Henry Ford announced a minimum wage for all employes of $5 per day.

Coming at a time when $2 was a good day's pay and mass production was yet unnamed, "the Ford idea" was a frontpage sensation, overshadowing Mexican war news and provoking violent controversy. The Detroit automaker was praised as an "inspired millionaire," accused of shrewd self-interest, damned as a dangerous Socialist. In seven days Manhattan newspapers carried a total of 52 columns of Ford stories. Radicals feared that Mr. Ford was buying his workers' souls with a few extra dollars per week; conservatives were concerned about employes "spending their money foolishly." And out of the deafening hubbub Henry Ford emerged as the international symbol of modern industrialism.

In 1919 Mr. Ford upped the minimum to $6 where it stayed until 37 days after the stockmarket crash ten years later. Then in a singlehanded attempt to stay the Depression he raised the rate to $7. But by 1932, when Ford Motor Co. succeeded in losing $74,000,000 in twelve short months, the minimum was down to $4. Last year Mr. Ford restored the pre-War scale. Last week he upped it to $6. More than one-half the 126,000 Ford employes on present payrolls benefited by the raise. The rest, who earn more than the minimum, were rewarded with increases in hourly rates.

Unlike Ford wages, which are always national news, Ford profits—and losses—are strictly Ford secrets. But each year when Henry Ford files a balance sheet with the Massachusetts Commissioner of Corporations in order to do business in that State, statisticians compute indicated earnings from changes in surplus and reserves. According to the 1934 statement filed in Boston last week, Ford profits last year were $6,860,000—plus any dividends paid during the year to the two stockholders, Father Henry and Son Edsel. In 1933 the indicated loss was $3,480,000. Apparently Mr. Ford was experiencing the same difficulty with rising costs that has plagued the whole industry since the New Deal. He sold nearly 300,000 more Fords last year than the year before but his profits amounted to only 1% on his capital. This year Henry Ford plans to make 1,000,000 cars "or better," has long since passed the halfway mark.

The latest Ford balance sheet revealed that the Man of Dearborn and his son had quietly cut a stock melon during 1934. The old $100 par shares had been split 20-for-1 into 3,452,000 shares of $5 par value. Surplus & reserves at the year end stood at $590,000,000.