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Appendix



Appendix: Automobile Dealer Agreements and Sales Manager Contracts, 1900-1914

In Part II, I argue that liability for defects represented one important factor in managers' decisions to rely on the franchise sales contract. I base part of my argument on the analysis of dealer agreements and sales manager contracts. I have tried to locate as many agreements and contracts as possible for the years from 1900 to 1914 and now have roughly sixty documents for thirty-two manufacturers. (I also have parts of agreements for a few additional companies.) The most important omission is Buick's dealer franchise agreement for 1909 or 1910--an item that was not included in the exhibits of either of the two transcripts for MacPherson. The 1909 Buick agreement cited below was typed (not printed) and unusual as compared to other contracts by that date. By contrast, Ford offered the most complete picture. The archives yielded Ford dealer agreements for each year from 1903 (when the firm was organized) through 1914 plus five sales manager contracts for 1905, 1906, and 1909. I have two contracts for Chalmers, Peerless, Pierce, Studebaker, and the White Co., and just one contract for the remaining companies, but fortunately the agreements were distributed evenly throughout this time period.

            Table 1 arranges the automakers according to the date of their agreements and provides data about the leading manufacturers' market sales. While many automakers entered and exited the market between 1900 and 1914, Ralph Epstein reported that a modest number of firms operated on a "commercial basis" between 1902 and 1926. Comparing the firms for which I have contracts to Epstein's list of commercial producers, I have contracts for fourteen out of seventy-five firms that operated on a commercial basis at some time between 1900 and 1908, or twenty-one out of ninety-two firms between 1900 and 1909. Excluding companies that operated for just one or two years, then my sample includes twenty-one out of eighty-three commercial producers through 1909, and thirty-two out of 115 firms between 1900 and 1914 (a quarter of all commercial producers).1 Put another way, I have contracts (spanning the years 1900 to 1908) for twelve out of fifty-seven commercial producers that remained in the market in 1908, and seventeen out of seventy-three automakers remaining in the market in 1909.2

            A small number of automakers (roughly five to ten) typically claimed the lion's share of sales each year even as early as 1905. Annual sales figures for the industry were as follows: 1903, 11,235 vehicles; 1905, 25,000; 1908, 65,000; 1909, 130,986; 1911, 210,000; and 1914, 569,054.3 For 1903, among the firms for which I have contracts and sales data, namely Cadillac and Ford, the pair claimed 30 percent of sales. For 1905, Ford and the White Sewing Machine Company sold ten percent of all vehicles. In the next year, Ford, Jeffery, and Reo together sold about two out of every five vehicles; and in 1908, Ford, Cadillac, and the White Co. made one in five sales. Grouping together the firms that sold cars in the three-year period from 1906 to 1908, the companies garnered roughly a third of the market's sales. In 1909, the firms claimed at least 20 percent of sales, and for 1910-11, the top three automakers accounted for nearly forty percent of the market's sales. By the years 1912-14, Ford so dominated the industry that the firms for which I have dealer agreements together sold at least half of all motor cars. As one other measure of the sample's value, I have dealer agreements for five out of the nine firms that ranked among the leading five producers, and six out of the sixteen firms that ranked among the top-ten producers between 1905 and 1909 (or eleven among the nineteen top-ten producers between 1905 and 1914).4

            To establish the significance of liability for defects as a factor in management's reliance on the franchise sales agreement, I undertake three tasks. First, I need to date the initial use of the sales contract. In other words, it is important to determine whether many or most automakers had begun to rely on this type of contract by 1908 when Cadillac was sued for negligence by E. Wells Johnson who suffered injuries resulting from a defective wheel (or by 1909 in the case of Buick). Second, I need to establish that it was not simply business concerns, notably the desire to motivate a sales force through franchises, but also liability that influenced management's choice of the sales contract. Third, I need to make clear that among the many types of liability, liability for defects directly influenced management.

            First, using thirty dealer agreements, five manager contracts, disputed agreements, and related documents, I trace the evolution of contracts prior to 1910. As indicated in Table 2, column two, nearly all firms specified that the dealer would purchase cars at a discount. When the contract used the word "commission" as a substitute for the word discount, I have placed an asterisk next to the discount rate. Most automakers wrote contracts in which the manufacturer sold vehicles to their dealers at a discount from their list prices, but many of the leading automakers also added clauses explicitly declaring that the dealer was not the manufacturer's "legal representative" or agent by 1908. The third column in Table 2 indicates whether an automaker included this clause in its agreement. In contrast to its 1903 agreement, Ford's 1904 contract explained: "It is hereby expressly agreed and understood by and between the parties hereto that the party of the second part is in no way the legal representative or agent of the party of the first part and has no right or authority from said first party to assume any obligations of any kind, express or implied, on behalf of said first party, or to bind said first party thereby."5 Although many firms did not include this clause prior to 1906, by 1909 a good number of automakers had the clause. Moreover, this pattern applied especially to leading producers. For the years between 1906 and 1909, five of the six top-ten producers included a clause declaring the dealer was not the firm's agent (including Oakland and Chalmers, then seven of the eight major producers included the clause by 1909).6

            My second objective is to establish that manufacturers were not simply concerned about business questions, notably motivating their dealers through franchises instead of flat salaries. Allan Nevins proposed this explanation of the franchise in his account of the early history of the Ford Motor Company. Nevins, however, did not rule out the possibility that Ford could have achieved the same motivation through commissions.7 Charles Mason Hewitt, Jr., in his history of auto franchises noted that Ford's managers "experimented" with many arrangements in the company's first few years.8 It is not my job to resolve the differences between Nevins and Hewitt, but simply to establish that liability represented a significant concern for managers. One common worry was the delivery of vehicles. Column four in Table 2 indicates whether manufacturers limited their liability for failure to deliver vehicles as a result of unforeseen events, such as fires or strikes. Ford's 1908 agreement stated that the manufacturer accepted the dealer's orders "subject to any delays occurring in the manufacture of its product." It further stipulated that the manufacturer could not assure "immediate delivery" but sought to allot cars "fairly among its several dealers."9

            Third, I establish that among the various types of liability, managers worried in particular about lawsuits prompted by their vehicles' defects. My argument relies on different types of evidence, including dealers' and consumers' correspondence as well as their lawsuits. The dealer agreements also provide valuable information. The second column in Table 3 indicates whether contracts included the manufacturer's warranty. As a word of caution, automakers who did not state their warranties in their contracts may have printed their warranties in the buyers' orders. I do not examine the contracts simply to determine whether the firms had warranties. What I take as important were the terms of those warranties that are available. As indicated in Table 3, column three, prior to 1910, all warranties with one exception covered defective parts for just ninety days at most. Further, many clauses limited the manufacturer's liability to replacing the part (not covering the cost of labor), and stipulated that the manufacturer's decision as to whether the part was defective was "final and conclusive."10 In its 1904 agreement, Ford reprinted the "standard warranty" as adopted by automakers' trade association in 1902. That warranty is described in Table 3, and indicates automakers' efforts at that early date to carefully define their responsibility for defects. Seven years later Studebaker made the link between defects and sales explicit when it wrote in its 1911 contract that its one-year warranty was so attractive that it would act as "a means of increasing the sales" of its models.11

            Manufacturers also began to deny any responsibility for defects in suppliers' parts (Table 3, column 4). According to Cadillac's 1908 agreement, the manufacturer's warranty "does not apply to parts not made by the Manufacturer" and directed the dealer to "make all claims" to the supplier. Oakland's 1908 contract carried a similar stipulation and did "not cover defective tires, rims, coils, radiators, and other equipment not manufactured" by the company. Velie's 1909 agreement offered an unusually long one-year warranty for defective parts, but did "not guarantee tires, batteries, coils, magneto, lamps, or plugs as we use only standard makes guaranteed by the manufacturers of same."12 While manufacturers limited their responsibility for defective parts, their contracts outlined in broad terms their dealers' obligation to repair vehicles (Table 3, column five).13 For instance, in signing Wayne's 1905 contract, the dealer agreed "to keep on hand an assortment of parts and make repairs promptly." He further agreed "to carefully and thoroughly instruct all purchasers how to operate said automobiles." Reo's dealer agreed in 1906 to maintain "at all times . . . one workman who shall throughly [sic] understand the different types or styles of REO Motor cars and be specially conversant with the means of adjusting and repairing the same." Reliable Dayton's 1907 contract specified that the dealer "maintain in addition a well equipped repair shop within [sic] a competent mechanic in charge at all times so that purchasers of Reliable Dayton Motor Car Co. cars can have same repaired and adjusted promptly and at reasonable rates."14

            From my research on dealer agreements, I also advance an argument about methodology. In his study of dealer franchises, Charles Mason Hewitt, Jr., relied mostly on information contained in court opinions to assess dealer relations, not the agreements themselves.15 This approach forced Hewitt (whether he realized it or not) to make critical assumptions about the relationship between cases and contracts. First, because most cases only reported parts of contracts, he overlooked some provisions and exaggerated the importance of others. Of most importance for my argument, he overlooked the terms of warranties and the clause about suppliers' parts.16 Second, without a sample of contracts, he could not properly date when manufacturers adopted the sales contract or adopted specific provisions, notably the clause stating that the dealer was not the automaker's agent. In discussing "modern patterns" for 1908 to 1910, Hewitt conceded at the outset "that some of the changes in terms discussed in the following comparison of the 1908 to 1910 franchise with the 1903 franchise took place in the years between 1904 and 1908."17 Hewitt did not review firms systematically to determine whether many had adopted sales contracts by 1908. Third, the court cases made generalizations about the industry difficult. Hewitt implicitly assumed that most firms followed the actions of the particular company involved in an appellate case (or the small number of firms involved in similar disputes). In other words, he assumed that "one size fits all" in generalizing about dealer relations. For example, he relied on one firm, Peerless, to characterize automobile franchises in 1903. Based on his reading of three court opinions about Peerless, he drew the conclusion that "the very early franchise agreements" did not contain a non-delivery clause, a provision declaring the dealer was not the manufacturer's agent, and a clause about the dealers' deposits being linked to his or her purchase of cars. As it turns out, Peerless included a clause exempting the firm from liability for delays "caused by fires, strikes or insurrection or other causes beyond its control." Ford's 1904 agreement included a clause declaring the dealer was not its agent.18 I found Hewitt's general point correct: Most contracts were spare prior to 1906. But because he lacked a sample of contracts for the industry's early years, it is not clear what evidence he relied on to draw conclusions about the industry. Perhaps he meant that the Peerless contract typified all contracts written through 1908, but my database indicates that contracts written in 1908 and 1903 clearly differed.

            More than these complaints, I found that Hewitt did not properly frame the problem.. Between 1900 and 1903 or 1904 many firms that would go on to become major producers had just been organized: Ford (1903), Buick (1904), Cadillac (1903) plus its forerunner the Henry Ford Company (1901), Thomas B. Jeffery Company (1902), and Reo (1904), as well as small firms like Peerless (1901) and Wayne (1904).19 Their managers tried different sales methods, as Hewitt explained in the case of Ford. Similarly, I doubt that managers had a complete or clear understanding of sales relationships in terms of the franchise contract. The appendix tables report information about franchise contracts, but do not report cases in which agreements were subject to dispute or managers' contracts. Both Cadillac and Ford established agency relationships with some sales managers. In both cases, their sales or branch manager contracts became the basis of lawsuits prior to 1908. In another early lawsuit, Locomobile's managers made the mistake of entering an oral agreement with a dealer.20 I interpret these cases as evidence of a learning process, not simply managers' experimentation, as Hewitt and other scholars have maintained.21 Furthermore, early contracts were sketchy. Within a few years of having organized companies, managers quickly acquired experiences that led them to guard against potential problems. Rather than lump all firms from 1900 to 1908 in one category, I have asked how contracts prior to 1906 (when the market was new and many companies had just been founded) compared to contracts written between 1906 and 1908 or 1909.

            Compounding Hewitt's methodological problems was his selection of cases. For example, in Wheaton v. Cadillac Automobile Co. (Mich. 1906), he noted that Cadillac won its suit against Wheaton by claiming an agency relationship, but he did not consider the general question of how management could have relied on agency contracts to deflect liability, nor did he consider other examples of management's effort to limit their liability through agency agreements, such as Neale v. American Electric Vehicle Company (Mass. 1904), and Masters & another v. Wayne Automobile Company & others (Mass. 1908).22 Hewitt also overlooked many cases that drew attention to defects. For instance, he did not consider Buick's dispute with Reid in which the manufacturer claimed it lost sales thanks to defective parts.23 While he acknowledged the risks managers faced from suits brought by consumers for personal injury or failure to deliver cars, he overlooked the numerous cases in which consumers sued over breach of warranty (discussed in Part I).24 In searching for dealer contracts, the records and briefs of appellate cases turned out to be wonderful repositories of corporate documents. Read the court opinions for EVC's case in 1904 or the White Company's case in 1912, and you will find no mention of defects. But defects were the source of irritation in both cases.25

            I want to caution readers that my complaints about Hewitt's study apply to one part of his project. Although I found many other parts of his study valuable, I concluded that his methodology was inappropriate and sources too limited for answering two questions about early auto franchises: By what date had automakers begun to use the sales contract? Had liability for defects influenced their decision to adopt sales contracts prior to 1908? My collection of dealer agreements helps here because the database provides three types of information: first, I am able to identify different clauses otherwise missed in the court opinions; second, I can establish when certain firms had adopted specific provisions; and third, I can identify patterns among the contracts in order to determine when a provision became common (while avoiding Procrustes' solution--companies varied in their individual experiences). I continue to search for Buick's and other companies' franchise agreements, but at this date I have found contracts for a range of automakers (some major firms, but also medium-sized producers plus easily forgotten manufacturers). I believe the sample is sufficiently large and varied as to provide one important source of evidence in understanding managers' choices about their dealer relations.

            It is worth repeating that my argument does not rest solely on the collection of dealer agreements. In terms of the contracts, I can date precisely when Ford began using a sales contract (1904), but cannot do so for the other firms. For example, in the case of Cadillac, the company adopted a sales contract at some point between 1903 and 1908. What is important for my argument is that by the time Cadillac was sued for negligence in 1908, I can establish first that the firm had adopted a sales contract; and second, that managers had previous experiences to make them alert to the problem of consumers' lawsuits as well as their liability for their products' defects. I understand that firms may have adopted the sales contract initially for reasons unrelated to consumers or defects. In Ford's case, the Selden patent lawsuit may have had a decided impact on the abrupt change in its contract between 1903 and 1904.26 What is important is that managers at Ford and other companies quickly acquired a set of experiences in which they learned to be wary about the various types of lawsuits that followed from their products' defects. To make this argument, I need both the collection of contracts and a range of court cases, including the records and briefs for many of those cases.

            Below I list the sources for each agreement or contract. I add brief comments about a few companies. Unless otherwise noted, information is based on the encyclopedic review of automakers found in The American Car since 1775.27 I report neither information for disputed dealer agreements, such as the Cadillac 1902 agreement, nor data about sales manager contracts in the tables. In citing the agreements in the text of the article, I have taken two approaches. Where I cite a specific agreement, I provide the full citation; where I refer to companies based on information contained in the tables, I cite this appendix and the specific table. In notes for this appendix, I provide abbreviated citations.

American Electric Vehicle Company (EVC) 1900 agreement, Memorandum of Agreement between the American Electric Vehicle Company and A. F. Neale, December 31, 1900, 6-9, Neale v. American Electric Vehicle Company, 186 Mass. 303 (1904), Case No. 2411, Archives and Records Preservation, Supreme Judicial Court, Boston, Mass.

American Locomotive Automobile Company 1912 agreement, Agreement between Eastern Motor Sales Corp. [distributor] and Apperson-Lee Motor Company, October 28, 1912, 24-27, Eastern Motor Sales Corp. v. Apperson-Lee Motor Co., 117 Va. 495 (1912), Records of Supreme Court of Virginia, Virginia State Law Library, Richmond, Va.

Anderson Carriage Company 1907 agreement, Memorandum of agreement between Anderson Carriage Co. and William G. Isbell and George D. Grant, September 19, 1907, Exhibit 1, 183-84, Isbell v. Anderson Carriage Co., 170 Mich. 304 (1912), Records of the Supreme Court of Michigan, University of Michigan Law Library, Ann Arbor, Mich.

Buick Motor Company 1909 letter, F. J. Long, Sales Manager, Buick Motor Company, to D. V. Thompson, January 21, 1909, Exhibit A, 7-8, 1911, Buick Motor Company v. Thompson, 138 Ga. 282 (1912), Supreme Court of Georgia, Transcript of Record, Case # A-32325, The Georgia Archives, Morrow, Ga.

Cadillac Motor Car Company 1902 letter (disputed agreement), W. E. Metzger to W. J. Stewart, December 18, 1902, Exhibit 5, 10-11, Wheaton v. Cadillac Automobile Co., 143 Mich. 21 (1906), Records of the Supreme Court of Michigan, University of Michigan Law Library, Ann Arbor, Mich. Note: Metzger stated in his letter that "We do not write a regular contract."

Cadillac Automobile Company 1903 sales manager letter, Lem W. Bowen, Secretary, Cadillac Automobile Company, to Wm E. Metzger, December 26, 1903, 7-8, Transcript of Record, Joslyn v. Cadillac Motor Car Co., 177 F. 863 (6th Cir. 1910), Case No. 1998, Records of the U.S. Courts of Appeals, Record Group 276 (hereafter RG 276), National Archives, Great Lakes Region, Chicago, Ill. (hereafter NA, Chicago).

Cadillac Motor Car Company 1908 agreement, Memorandum of Agreement, between Cadillac Motor Car Company and the Utica Motor Car Co., July 22, 1908, Defendant's Exhibit 2, 61-64, Cadillac Motor Car Co. v. Johnson, 221 F. 801 (1915), Transcript of Record, Case No. 157, RG 276, National Archives, Northeast Region, New York, N.Y. (hereafter NA, N.Y.).

Chalmers Motor Company 1914 agreement, blank form, File # 7222-44-1, Box 870, Federal Trade Commission, Bureau of Corporations, Record Group 122 (hereafter RG 122), National Archives, College Park, Md. (hereafter NA).

Chalmers-Detroit Motor Company 1909 agreement, Memorandum of Agreement between Chalmers-Detroit Motor Co. and Ogden-Farwell Garage, September 27, 1909, Exhibit 24, 99-110, State ex. rel. Petition of Pierce-Arrow Motor Car Company, et. al. v. Circuit Court of Milwaukee County et. al., 143 Wis. 282 (1910), Records of the Supreme Court of Wisconsin, Wisconsin State Law Library, Madison, Wis.

Cole Motor Car Co. 1912 agreement, Agreement between the Cole Motor Car Co. and Cole Motor Co. of Texas, Chas. F. Hurst, September 13, 1912, Bill of exceptions, 23-31, Cole Motor Car Co. v. Hurst et. al., 228 F. 280 (1915), Transcript of Record, Case No. 2715, Box 421 of 1008, Accession 53-A-21, Location A2602121, National Archives--Southwest Region, Fort Worth, Tex.

Dodge Bros. 1914 agreement, Agreement between the Dodge Brothers and Pegram Motor Car Company, no date [expired June 30, 1915], reprinted in Ellis v. Dodge Bros., 237 F. 860 (N.D. Ga. 1916), 860-63. Note: the Dodge Brothers began producing vehicles in 1914.

Ford Motor Company 1903 agreement, Agreement between Ford Motor Company and C.A. Duerr, August 7, 1903, Exhibit 10, vol. 2, 493-94, Columbia Motor Car Co. et al. v. C. A. Duerr & Co. et al., 184 F. 893 (1st Cir. 1911), Transcript of Record, Case No. 4058-60 (consolidated numbers), RG 276, NA, N.Y.

Ford Motor Company agreements, 1904-1914, File # 7222-68-2, Box 871, RG 122, NA. Note: Officials submitted copies of actual agreements between Ford Motor Company and different dealers as well as blank forms. The company submitted more than one contract for selected years.

Ford Motor Company 1907 agreement, selected clauses, Agreement between Ford Motor Company and E. L. Dildine, December 18, 1907, Petition, 2-6, Dildine v. Ford Motor Company, 159 Mo. App. 410 (1911), Records of the Court of Appeals of Missouri, Kansas City, Case No. 9540 (appeal from the Circuit Court of Clinton County), Missouri State Library, Jefferson City, Mo.

Ford Motor Company 1908 agreement (HF), blank form, File L36, Box 2, Accession 297 Ford Motor Company Legal--Cases and Claims (hereafter Acc. 297), Benson Ford Research Center, The Henry Ford, Dearborn, Mich. (hereafter HF).

Ford Motor Company 1909 agreement (HF), Dealer's License & Agreement between the Ford Motor Company and Wm. Warnock Co., September 2, 1909, File L36, Box 2, Acc. 297, HF.

Ford Motor Company 1912-13 agreement (HF), Dealer's License & Agreement between the Ford Motor Company and Nichols & Miller, February 20, 1913, Folder 75-14-4, Box 14, Accession 75 Ford Motor Company Legal Records, 1912-31 (hereafter Acc. 75), HF.

Ford Motor Company 1913-14 agreement (HF), Limited Agency Contract between the Ford Motor Company and F. O. Henizer, October 31, 1913, Folder 75-30-16, Box 30, Acc. 75, HF.

Ford Motor Company 1914-15 agreement (HF), Limited Agency Contract, blank form, Folder 75-39-3, Box 39, Acc. 75, HF.

Ford Motor Company 1905 agreement with H. L. Cunningham (Cleveland branch manager), J. Couzens to H. L. Cunningham, November 8, 1905, Folder 1, Box 1, Secretary's Office--Contracts and Agreements, Accession 140 (hereafter Acc. 140), HF.

Ford Motor Company 1905 agreement with Thomas Hay (Chicago branch manager), J. Couzens to Thomas Hay, October 30, 1905, Folder 1, Box 1, Acc. 140, HF.

Ford Motor Company 1906 agreement with Thomas Hay (Chicago branch manager), Memorandum of Agreement between Thomas J. Hay and the Ford Motor Company, October 11, 1906, Folder 1, Box 1, Acc. 140, HF.

Ford Motor Company 1909 contract with L. D. Perry (London branch manager), Branch Manager Contract, October 1, 1909, Folder 1, Box 1, Acc. 140, HF.

Ford Motor Company 1905 agreement with Gaston Plantiff, J. Couzens to Gaston Plantiff (New York branch manager), December 29, 1905, Folder 1, Box 1, Acc. 140, HF.

Haynes Automobile Co. 1909 agreement, Agreement between The Haynes Automobile Company and Benjamin H. Goodman, September 1, 1909, Bill of Complaint, 2-6, Goodman v. Haynes Automobile Co., 205 F. 352 (7th Cir. 1913), Transcript of Record, Case No. 1953, RG 276, NA, Chicago.

Hudson 1911 subdealer agreement, Agreement between the Sioux City Auto Company and H. M. Hessenius, July 26, 1911, reprinted in Hessenius v. Wetmore, 36 S.D. 157, 153 N.W. 937 (S.D. 1915), 937-39.

Hupp Motor Car Company 1910 agreement, Memorandum of agreement between H. J. Koehler Sporting Goods Company and F. C. Goodyear, August 25, 1910, Goodyear v. H.J. Koehler Sporting Goods, 159 A.D. 116, (1913), New York Supreme Court, Appellate Division, First Department, New York State Library, Albany, N.Y.

Inter-state Motor Car Company 1910 agreement, Agreement between Interstate Motor Car Company and W. D. Gile, October 8, 1910, reprinted in Gile v. Inter-state Motor Car Company, 145 N.W. 732 (N.D. 1914), 733-35.

Jeffery, Thomas B. 1906 agreement, Agreement between Thomas B. Jeffery & Company and the Cedar Rapids Auto & Supply Co., January 20, 1906, Exhibit A, 4-8, Cedar Rapids Auto & Supply Company v. Thomas B. Jeffery and Company, 139 Iowa 7 (1908), Records of the Supreme Court of Iowa, Iowa State Law Library, Des Moines, Iowa.

Kissel Motor Car Company 1910 agreement, Agreement between Kissel Motor Car Company and Jerome P. Parker, March 10, 1910, Exhibit A, 14-18, Parker-Harris Company v. Kissel Motor Car Company, 165 Wis. 518 (1917), Records of the Supreme Court of Wisconsin, Wisconsin State Law Library, Madison, Wis.

Locomobile Company 1909 agreement, Memorandum of Agreement between the Locomobile Company of America and Schreiber Motor Car Co., July 19, 1909, Exhibit 30, 122-26, State ex. rel. Petition of Pierce-Arrow Motor Car Company, et. al. v. Circuit Court of Milwaukee County et. al., 143 Wis. 282 (1910), Records of the Supreme Court of Wisconsin, Wisconsin State Law Library, Madison, Wis.

Maxwell Motor Sales Corporation partial 1914 agreement, description of parts of agreement between Herrick & Vandervoort, Maxwell's distributor, and G. Louwein, August 17, 1914, Maxwell Motor Sales Corporation v. Louwein, 174 P. 260 (Okla. 1918).

Maxwell 1915 Distributor's Agreement, Agreement between Maxwell Motor Sales Corporation and W. O. Barnes, May 18, 1915, 5-14, Barnes v. Maxwell Motor Sales Corporation, 172 Ky. 409, 189 S.W. 444 (1916), Records of the Court of Appeals of Kentucky, Case No. 44884, Kentucky Department for Libraries & Archives, Frankfort, Ky.

Metz Company 1913 agreement, Agreement between the Metz Company and James [Jos.] A. Humphreys, November 5, 1913, Exhibit A, 78-82, Short v. Metz Company, 165 Ky. 319 (1915), Records of the Court of Appeals of Kentucky, Kentucky Department for Libraries & Archives, Frankfort, Ky.

Monarch Motor Car Co. 1914 sales manager agreement, Agreement between the Monarch Motor Car Co. and Hoover Holton and F. G. Morris, June 22, 1914, Exhibit 1, 2-5, Holton v. Monarch Motor Car Co., 202 Mich. 271 (1918), Records of the Supreme Court of Michigan, University of Michigan Law Library, Ann Arbor, Mich.

Monarch Motor Car Co. 1914 sales manager agreement, Agreement between the Monarch Motor Car Co. and Walch Bros., August 9, 1914, Exhibit 2, 104-10, Holton v. Monarch Motor Car Co., 202 Mich. 271 (1918), Records of the Supreme Court of Michigan, University of Michigan Law Library, Ann Arbor, Mich. Note: Exhibits 3 through 11 report contracts similar to Walch's.

Oakland Motor Car Company 1908 agreement, Memorandum of Agreement between the Oakland Motor Car Company and the Indiana Automobile Co., September 16, 1908, Plaintiff's Exhibit 1, 49-51, Oakland Motor Car Co. v. Indiana Automobile Co., 201 F. 499 (7th Cir. 1912), Transcript of Record, Case No. 1891, RG 276, NA, Chicago.

Packard Motor Car Company 1914 agreement, blank form, File # 7222-76-1, Box 872, RG 122, NA.

Peerless 1902 agreement, Memorandum between the Peerless Manufacturing Company and Frederick E. Randall, June 7, 1902, Document 4, 4-6, Randall v. Peerless Motor Car Company, 212 Mass. 352 (1912), Archives and Records Preservation, Supreme Judicial Court, Boston, Mass.

Peerless 1903 agreement, Memorandum between the Peerless Motor Car Company and Dr. R. M. Garfield, March 12, 1903, Exhibit A, 9-10, Garfield v. Peerless Motor Car Company, 189 Mass. 395 (1908), Massachusetts Reporter Papers and Briefs, Volume 189, Social Law Library, Boston, Mass.

Peerless 1905 partial agreement, partial description between plaintiff and defendant for agreement dated January 28, 1905, 1-3, Schiffman v. Peerless Motor Car Company, 13 Cal. App. 600 (1910), Court of Appeal of California, Second Appellate District, Civil No. 810, California State Archives, Sacramento, Calif.

Pierce, George N. 1905 agreement, Memorandum of agreement between The George N. Pierce Co. and Banker Brothers Co., October 14, 1905, Exhibit A, 5-7, Banker Brothers Company vs. The Commonwealth of Pennsylvania, Banker Brothers Company v. Commonwealth of Pennsylvania, 222 U.S. 210 (1911), U.S. Supreme Court Records & Briefs, Microfilm Reel 872, University of Texas at Austin Law Library, Austin, Tex.

Pierce-Arrow Motor Car Company 1909 agreement, Memorandum of Agreement between the Pierce-Arrow Motor Car Company and American Automobile Company, June 1, 1909, Exhibit 18, 83-87, State ex. rel. Petition of Pierce-Arrow Motor Car Company, et. al. v. Circuit Court of Milwaukee County et. al., 143 Wis. 282 (1910), Records of the Supreme Court of Wisconsin, Wisconsin State Law Library, Madison, Wis.

Pope Manufacturing Company 1909 agreement, Agreement between The Pope Manufacturing Company and Emil Estberg, May 19, 1909, Exhibit 36, 138-41, State ex. rel. Petition of Pierce-Arrow Motor Car Company, et. al. v. Circuit Court of Milwaukee County et. al., 143 Wis. 282 (1910), Records of the Supreme Court of Wisconsin, Wisconsin State Law Library, Madison, Wis.

Pullman Motor Car Co. 1911 agreement, Agreement between the Pullman Motor Car Company and the Syracuse Motor Car Co., March 3, 1911, Exhibit A, 16-23, Syracuse Motor Car Co. v. Pullman Motor Car Co., 158 A.D. 95 (1913), Supreme Court of New York, Appellate Division, Fourth Department, New York State Library, Albany, N.Y.

Reid Mfg. Co. 1903 agreement, Agreement between the Reid Mfg. Co. Auto Dept. and the H. B. Day & Co., December 15, 1903, Exhibit 97, 236-38, Buick Motor Car Co. v. Reid Mfg. Co., 150 Mich. 118 (1907), Records of the Supreme Court of Michigan, University of Michigan Law Library, Ann Arbor, Mich.

Reliable Dayton Motor Car Company 1907 agreement, Agreement between Reliable Dayton Motor Car Company and F. E. Sparks, May 28, 1907, Copy of Exhibit A, 27-30, Sparks v. Reliable Dayton Motor Car Company, 85 Kan. 29 (1911), Records of the Mitchell district court appealed to the Supreme Court of Kansas, Kansas State Historical Society, Topeka, Kans.

R. E. Olds Co. [Reo] 1906 subdealer agreement, Memorandum of Agreement between E. A. Jenkins Motor Co. and James Cofield, December 10, 1906, Exhibit A, Cofield v. E. A. Jenkins Motor Co., 89 S.C. 419 (1911), Records of Richland County Court of Common Pleas, Judgment Rolls, Case No. 9609 (L40010), South Carolina Department of Archives and History, Columbia, S.C. Note: Ransom E. Olds had sold the popular Oldsmobile through the Olds Motor Works, but he subsequently started a new company using his initials in 1904.

Staver Cariage Company selected clauses of 1909 agreement, Agency Agreement between Vincent Bendix and Staver Carriage Company, April 15, 1909, reprinted in Bendix v. Staver Carriage Company, 174 Ill. App. 589 (1912), 590-96.

Studebaker E-M-F 1909 agreement, Agreement between Albert Poppenberg and Fred S. Meade, July 15, 1909, Finding of Fact, 6-10, Meade v. Poppenberg, 167 A.D. 411, 153 N.Y.S. 182 (1915), Supreme Court, Appellate Division, Fourth Department, New York State Library, Albany, N.Y. Note: Studebaker maintained a contract with Everett-Metzger-Flanders (E-M-F) in 1909.

Studebaker selected clauses of 1911 agreement, partial copy of agreement between Studebaker Corporation of American and George J. Gollmar and LeRoy Messenger, September 1, 1911, Exhibit 3, 29-32, Studebaker Corporation of America v. George J. Gollmar & LeRoy Messenger (co-partners doing business as Gollar & Messenger Auto Company), 159 Wis. 336 (1915), Records of the Supreme Court of Wisconsin, Madison, Wis. Note: The contract of October 3, 1910 was described as "substantially the same as the one heretofore quoted from."

Studebaker Corporation of America 1914 agreement, blank form, File # 7222-109-1, Box 873, RG 122, NA.

Velie Motor Car Co. 1909 agreement, Agreement between Velie Motor Car Company and Kopmeier Motor Car Co., September 23, 1909, Exhibit A, 6-9, Velie Motor Car Co. v. Kopmeier Motor Car Co., 194 F. 324 (7th Cir. 1912), Transcript of Record, Case No. 1765, RG 276, NA, Chicago.

Wayne Automobile Company 1905 agreement, Agreement between the Wayne Automobile Company and Walter C. Masters & Company, January 16, 1905, Exhibit A, 10-12, Masters & another v. Wayne Automobile Company & others, 198 Mass. 25 (1908), Massachusetts Reports Papers and Briefs, Volume 198, Social Law Library, Boston, Mass.

Welch Motor Car Co. 1908 agreement, Agreement between the Welch Motor Car Company of Pontiac, Michigan, and Welch Motor Car Company of New York, February 1, 1908, Plaintiff's Exhibit 3, 74-76, and Plaintiff's Exhibit 4, 78-79, Welch Motor Car Company of New York v. P. Brady & Son Company, 149 A.D. 945 (1912), Supreme Court of New York, Appellate Division, First Department, New York State Library, Albany, N.Y.

White Sewing Machine Co. 1905 agreement, Articles of Agreement between the White Sewing Machine Company and F. C. Drake & Son, February 23, 1905, Contract Form No. 1, Plaintiff's Exhibit A, 39-41, Drake and Drake v. White Sewing Machine Company, 133 A.D. 446 (1909), Supreme Court of New York, Appellate Division, Third Department, New York State Library, Albany, N.Y.

White Co. 1908 agreement, Articles of Agreement between The White Co. and American Motor Car Co., February 1, 1908, Contract Form No. 2, Brief of Evidence, 23-26, White Company v. American Motor-Car Co., 11 Ga. App. 285 (1912), Court of Appeals of Georgia, Case No. 4159, Box 80, The Georgia Archives, Morrow, Ga. Note: The White Sewing Machine Co. renamed itself The White Co.

Reference

Table 1. Market data for automobile manufacturers, 1900-1914

Table 2. Clauses in dealer agreements indicating method of sales, automaker's general liability, and liability for delays in shipping vehicles, 1900-1914

Table 3. Clauses in dealer agreements relating to defects and repairs, 1900-1914


Notes

1 Epstein did not define "commercial basis." I modified his list, adding a few firms included in Table 1. The Thomas B. Jeffery Company, for example, operated on a "commercial basis" since it ranked among the leading five producers in 1906; the Metz Company placed twelfth among the leading manufacturers in 1914. In the case of a few other firms not on Epstein's list, the records and briefs of their court cases indicate that the companies operated beyond their immediate vicinity. These firms include the Wayne Company, the Reliable Dayton Motor Car Company, Reid Manufacturing Company, and the Monarch Motor Car Company. One last firm not on Epstein's list was the Anderson Carriage Company. This Detroit firm made electric carriages, and as Nevins reported, sold one to Henry Ford for his wife's use. I base my estimates on the firms in Table 1. I added six firms (all except Monarch) to the list of commercial producers through 1908 and 1909, and seven for the years through 1914. (I did not count firms for which I have incomplete contracts.) For Epstein's list, see Raph C. Epstein, The Automobile Industry: Its Economic and Commercial Development (1928; reprint, New York: Arno Press, 1972), chart 28, 176, 377-82. On Wayne, see Editors of Automobile Quarterly, The American Car since 1775: The Most Complete Survey of the American Automobile Even Published, 2nd ed. (New York: L. Scott Bailey, 1971), n.p. For Anderson, consult Allan Nevins, Ford: The Times, the Man, the Company (New York: Charles Scribner's Sons, 1954), 624 n. 33.

2 The number of firms remaining in the market in 1908 and 1909 is reported in Epstein, The Automobile Industry, chart 28, 176. I added five firms (Anderson, Jeffery, Metz, Reliable Dayton, and Wayne) to his figure of fifty-two for 1908 and four for 1909 (the same firms except for Wayne). Information about the dates of operation for almost all firms was reported in Editors of Automobile Quarterly, The American Car since 1775, n.p. I did not include Reid, because I could not locate information about the firm's years of operation.

3 Annual lists of the leading automobile manufacturers (the top fourteen or fifteen firms) and their production figures covering the years from 1900 through 1914 are reported in Editors of Automobile Quarterly, The American Car since 1775, 138-39. Annual sales for the industry are reported in the U.S. Federal Trade Commission, "Report on Motor Vehicle Industry," 76th Cong., 1st sess., House Document No. 468 (Washington, D.C.: U.S. Government Printing Office, 1939), 22-23. Industry sales figures and individual company production figures are estimates. Readers should not take the data as precise figures for each firm's market share. My sense is that the data for individual firms may be inflated, and I report the figures to offer a general sense of the structure of the market between 1900 and 1914. Data for the market share of selected firms are also found in U.S. Federal Trade Commission, "Report on Motor Vehicle Industry," 27.

4 Between 1905 and 1908, firms that ranked among the top-ten producers were Ford, Cadillac, Jeffery, Reo, Maxwell, Olds Motor Works, the White Company, Buick, Franklin, Packard, Stoddard-Dayton, Studebaker, Stanley, and the Hupp Motor Company. In 1909, Willys-Overland and Brush entered the ranks of the top-ten producers. I have a 1910 contract for Hupp Motor. I do not count Buick's 1909 contract with the Georgia dealer in my estimates, because the contract was unusual. If Dodge is included since it ranked third in 1915, then I have agreements for twelve of the twenty top-ten producers. For production figures, see Editors of Automobile Quarterly, The American Car since 1775, 138-39.

5 Ford 1904 agreement (NA).

6 Based on MacPherson, Buick could also be included in the list. For a list of the top commercial producers, see note 4; Editors of Automobile Quarterly, The American Car since 1775, 138-39.

7 Nevins, Ford: The Times, the Man, the Company, 265, 344-45.

8 Charles Mason Hewitt, Jr., Automobile Franchise Agreements (Homewood, Ill.: Richard D. Irwin, 1956), 10-22, especially 19 n. 27 and n. 29.

9 Ford 1908 agreement (HF).

10 See, for example, Ford 1908 agreement and Reliable Dayton 1907 agreement. On the general topic of warranties, see Cornelius W. Gillam, Products Liability in the Automobile Industry: A Study in Strict Liability and Social Control (Minneapolis, Minn.: University of Minnesota Press, 1960), 174-79, 189-93.

11 Studebaker selected clauses of 1911 agreement, 30.

12 Cadillac 1908 agreement; Oakland 1908 agreement; and Velie 1909 agreement.

13 Hewitt singled out the problem of repairs as one of the six issues shaping manufacturers' approach to dealers in the early years of the auto industry, but he did not offer any systematic analysis of dealer contracts or cite specific cases beyond his reference to the three cases concerning the Peerless 1903 agreement. Hewitt, Automobile Franchise Agreements, 17-18, 24-25. I report specific details about the Peerless contract, including its clause on repairs, in Tables 1-3. On the general topic of dealer repairs, see Stephen L. McIntyre, "The Failure of Fordism: Reform of the Automobile Repair Industry, 1913-1940," Technology and Culture 41 (April 2000): 269-99.

14 Wayne 1905 agreement; Reo 1906 agreement; and Reliable Dayton 1907 agreement.

15 For the years from 1900 to 1914, Hewitt examined franchise contracts for Oakland (1908), Inter-State (1910), Hudson (1911), and Dodge (1914). He also reported reviewing Ford agreements, but did not give specific details. Hewitt, Automobile Franchise Agreements, 19, 42-45, 50, 70, 273-79.

16 Hewitt noted that automakers agreed "at an early date, to replace defective parts under the standard warranty adopted by all manufacturers." He did not consider the limited terms of automakers' warranties, but the restricted terms were readily apparent in the Oakland 1908 contract that he reprinted in his book. Hewitt also overlooked the clause explicitly limiting manufacturers' liability for defects in suppliers' parts. It is not clear where Hewitt obtained the evidence to make his statement about the standard warranty. Perhaps he read Ford's 1904 agreement, but he made no reference to the early Ford agreements in his text. I did not find the standard warranty in the Peerless 1902 or 1903 agreements. Ibid., quote 24, n. 4, 259-60.

17 Hewitt reviewed "over 30 cases" and "26 different manufacturers" whose dealer agreements were written prior to 1911. For the years 1900 to 1908, I could find seventeen cases in Hewitt's bibliography that concerned twelve automakers. Subtracting one firm that made a direct sale to the car buyer (Oldsmobile), and another that entered an oral agreement (Locomobile), we are left with ten firms. Further, Hewitt's one case about Ford's 1907 agreement was distinctly unusual because the court read the agreement not as a sales contract but as an agency relationship. The contract in that case was no different from other Ford contracts from 1907 or 1908, and Ford did not rewrite its contracts after the case. Further, two cases in Cadillac's early history, as Hewitt noted, were not sales but agency relationships. In describing dealer contracts, he relied on three agreements for Peerless in 1903 to characterize the market. He made no mention of the Pierce 1905 contract or the White Company 1905 contract. (He discussed the White contract later in his text, but not as part of his effort to characterize the early franchise agreements.) The other agreements covered the years from 1906 to 1908. Hewitt, Automobile Franchise Agreements, quotes 23, 41. Compare the Ford 1907 agreement (NA) with the Ford 1907 agreement found in the records and briefs for Dildine v. Ford Motor Company (Missouri State Archives).

18 This clause concerning delays was not the same as the non-delivery provision, but it was related to the general problem of manufacturers wanting to avoid liability for failing to ship cars to dealers. Hewitt may have reviewed the early Ford agreements, although it is not possible to determine whether he did so from his notes. If not, then he generalized about the entire industry for 1903 based on the experience of Peerless and suggested that Peerless could be used to characterize the industry for its "early" years, implying 1900 to 1908. Hewitt, Automobile Franchise Agreements, 23-26; Garfield v. Peerless Motor Car Company, 75 N.E. 695 (Mass. 1908); Peerless 1903 agreement; and Ford 1904 agreement. Hewitt faced similar problems in making generalizations about the repair clause (see note 13) and dealer deposits. On deposits, see Hewitt, Automobile Franchise Agreements, 16-17.

19 Editors of Automobile Quarterly, The American Car since 1775, especially 218-372.

20 Cadillac 1902 sales agreement (disputed); Cadillac 1903 sales manager letter; Ford 1903 agreement; Ford 1906 sales manager agreement, Thomas Hays (HF); and Frederickson v. Locomobile Co. of America, 111 N.W. 845 (Neb. 1907).

21 Nevins, Ford: The Times, the Man, the Company, 264-65, 344-45, 354-56; Thomas S. Dicke, Franchising in America (Chapel Hill, N.C.: University of North Carolina Press, 1992), 59; and Hewitt, Automobile Franchise Agreements, 10-22.

22 Hewitt, Automobile Franchise Agreements, 40 n. 34. Wheaton v. Cadillac Automobile Co., 106 N.W. 399 (Mich. 1906); Neale v. American Electric Vehicle Company, 71 N.E. 566 (Mass. 1904); and Masters & another v. Wayne Automobile Company & others, 84 N.E. 103 (Mass. 1908).

23 Buick Motor Car Co. v. Reid Mfg. Co., 113 N.W. 591 (Mich. 1907).

24 Hewitt, Automobile Franchise Agreements, 37-38. The two standard legal treatises (not included in Hewitt's bibliography) provided helpful guides to the many topics containing numerous automobile cases. C. P. Berry, The Law of Automobiles, 4th ed. (Chicago: Callaghan and Company, 1924); and Xenophon P. Huddy, The Law of Automobiles, 5th ed. by Arthur F. Curtis (Albany, N.Y.: Matthew Bender & Co., 1919).

25 Neale; and White Company v. American Motor-Car Co., 11 Ga. App. 285 (1912).

26 In response to the Selden patent, on October 2, 1903, Ford gave its New York dealer a "guarantee," to "hold" the agent and "their customers . . . free and harmless from any loss, cost, damage and expense, to which they may be put while acting as selling agents for said Ford Motor Company by reason of any suit or legal proceedings brought for the purpose of enforcing the claims of the association [which controlled the patent]." Ford fought this massive legal battle, which in reality represented an attempt by members of the patent club to limit entry to the market, and won in 1911. See Nevins, Ford: The Times, the Man, the Company, 246, 284-322; and Ford-Duerr Guarantee of October 2, 1903, Exhibit 11, vol. 2, 493-94, Columbia Motor Car Co. et al. v. C. A. Duerr & Co. et al., 184 F. 893 (1st Cir. 1911), Transcript of Record, Case No. 4058-60 (consolidated numbers), RG 276, National Archives--Northeast Region, New York, N.Y.

27 Editors of Automobile Quarterly, The American Car since 1775, especially 138-39, 218-372.


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