In January 1920, a man named John Dodge leased a private railroad car called the Commonwealth for the season, planning to carry his family south to Florida once the New York Auto Show ended. He never made the trip. On the night of January 14, at half past ten, John Dodge died in a room at the Ritz-Carlton Hotel in New York, his younger brother Horace at his side. He was fifty-five.
He had come to New York for the car show and caught the influenza, which turned to pneumonia within a week. The private car he had leased for a holiday made the journey to Detroit anyway, carrying his funeral party. His body rode home in the baggage car of an ordinary train, packed in with the freight. Everyone knows the name.
It has been stamped on trucks across the country for a hundred years after the two men who built it were gone. But here is the part almost nobody knows: the company those two brothers created would one day sell for the largest pile of cash anyone had ever paid for anything, $146 million, and neither brother would live to see a single dollar of it. They did not die poor. They died rich men.
What they never saw was the record deal their own name would fetch five years after both were in the ground. John and Horace Dodge came out of Niles, a small town in the southwest corner of Michigan, the sons of a machinist. There were two of them, red-headed, fierce, independent, and inseparable. They drank hard together on the weekends and seldom fought anyone, keeping only to their own company.
In 1903, a new company in Detroit needed parts and needed them from the best machine shop in the city, which by then belonged to the Dodge brothers. The company was the Ford Motor Company, and its founder was a man named Henry Ford. The brothers agreed to build him the running gear of his automobiles, the engine, transmission, and axles mounted on a frame, at $250 a set. Then something happened that made them rich: Ford could not pay.
The new company was long on ambition and short on cash, and fell behind on its bills month after month. So, in June of that year, the Dodges made an unusual deal. They agreed to forgive $7,000 Ford already owed them and hand him $3,000 more in credit. $10,000 in all, not one cent of it in cash.
In return, they took 10 percent of the Ford Motor Company. That stake, handed over to square a debt a struggling car maker could not settle, would return the Dodge brothers more than $32 million. For ten years the arrangement made everyone money. The Dodges built the working guts of the Ford, Ford sold the cars, and the dividends and contract profits rolled into Detroit by the millions.
But there was a danger buried inside it, and in 1913, a lawyer named Howard Bloomer put his finger on it. He sat the two brothers down in downtown Detroit and asked a plain question: why don’t you build your own car? John Dodge answered that they were doing fine as they were. The Ford contracts were rich, the dividends richer, and neither wanted the headache of selling automobiles to the public.
Bloomer warned them that their total dependence on Ford could ruin them. Everything rested on one man. If that man ever decided he no longer needed them, they would be left with nothing. The brothers went home.
The next day they came back and admitted the lawyer was right. They had already worked out the kind of car they wanted to build, not a cheap one. Ford had built his car to sell cheap, and the Dodges believed they could do better. In 1914, a Model T sold for a little more than half the price of the Dodge car.
They broke with Ford. In the summer of 1913, John Dodge resigned as a director and vice president of Ford, and the brothers set about building the plant for their own car. The first Dodge Brothers automobile came off the line in Hamtramck on November 14, 1914. It went from 370 cars in that first stub of a year to 145,000 a few years on, and by the end of the decade, only Ford sold more cars in America.
But the brothers still owned their 10 percent of Ford, and in 1916, Ford stopped paying the dividend. He announced he would keep the company’s enormous profits, pour them into new factories, and pay his stockholders nothing extra. By the late summer of 1916, the Ford Motor Company was sitting on a cash surplus of $52 million. In an ordinary year, the men who owned the company could have expected $25 million of it paid out in dividends.
Henry Ford intended to pay nothing and to spend the whole of it on steel and brick. In the last days of October, his directors committed that surplus to building the largest factory in the world down on the River Rouge. On November 1, Henry Ford’s son Edsel was married. On November 2, the morning after the wedding, John and Horace Dodge sued him.
Their complaint charged that by starving the stockholders of the dividends they were owed and burying the cash in new plants, the necessary result would be, in their words, the destruction of competition. The accusation underneath it was plain: Henry Ford was using money that belonged in part to them to build an empire that would leave no room for anyone else. Before the case reached a verdict, the brothers tried twice to get out. In January 1917, they offered to sell Ford their entire stake for $35 million.
Ford answered that he had no desire for any more stock. That summer they set a price a second time, all 2,000 shares, $36 million, $18,000 a share, to anyone in the country who cared to buy. No one did. Twice they had named their price to the one man who could most afford to meet it, and twice he had turned them down flat.
There was nothing left to try. For the whole first decade of the Ford Motor Company, the engine, transmission, and axles of a Ford, the whole working machine but for the wheels, tires, and body, were built by the Dodge brothers. And the men who built them had owned a tenth of Ford since 1903. People say the Dodges invested $10,000 in Ford.
They did no such thing. They forgave a debt Ford could not pay and threw in a little more credit. That is what bought them their tenth. That tenth was about to go into a courtroom in the most famous shareholder lawsuit in American history.
Through 1917, Henry Ford took the stand in his own defense. Asked what the Ford Motor Company was organized for if not to make a profit, Ford answered that it was organized to do as much good as we can everywhere for everybody concerned. Pressed later, he allowed that he was, in his own word, incidentally making money. In February 1919, the Michigan Supreme Court handed down its decision in a sentence that has echoed through American business ever since: a business corporation is organized and carried on primarily for the profit of the stockholders.
The Dodges had beaten Henry Ford. And here is what Ford did about it. Before the ruling even came, he had quit as president and let it be known he might walk away and build a cheaper car under a brand new company, a threat meant to scare his shareholders into selling to him cheap. It did not work on the Dodge brothers.
But in July 1919, they sold anyway. Ford bought back every share he did not already own and paid the brothers $12,500 for each of their 2,000 shares, $25 million. They had won the case and then handed him the stock. Here the story turns dark faster than either brother could have seen it coming.
John Dodge and Horace had gone to New York together and had fallen ill together in the same city in the same week. John did not recover. Horace almost did. He pulled through the same pneumonia and went south to Palm Beach to get his strength back.
He came back to Detroit in the spring well enough to do a little work, well enough to give his daughter away at her wedding in June, well enough to sit as a delegate at the Republican convention that summer. Then in August he collapsed a second time. He spent the last four months of his life in his house on the ocean in Florida. On December 10, 1920, Horace Dodge died there.
He was fifty-two. The death certificate gives the cause as cirrhosis of the liver, a condition he had carried for two years. On January 27, 1920, thirteen days after his brother died, Horace had written a letter to the men who sold Dodge automobiles across the country, writing of John that his passing was a loss so great that I hesitate to look forward to the years ahead without his companionship. He wrote those words in January.
He was dead by December. John Dodge had been dead five years and three months when the company sold; Horace Dodge had been dead four years and five months. Neither man was alive to see it. In January 1925, the two widows put Dodge Brothers up for sale.
More than a dozen offers came in. The winning bid came from a Wall Street banking house, Dillon, Read and Company. The number was $146 million, and every cent of it was cash. The newspapers of the day called it the largest single cash transaction in the country’s history up to that time.
On May 1, 1925, in two rooms held open on a long-distance telephone line, one in New York and one in Detroit, the deal was closed. In New York, the bankers wrote a certified check to Dodge Brothers for the full amount. A man endorsed it, telephoned Detroit to say he had it in his hand, and the deed to the company changed places with the check. That check still exists, and a copy hangs in a museum.
It is dated May 1, 1925. Anna Dodge was Horace’s widow. Horace had taken a large part of their money and put it into municipal bonds, the safe, tax-free kind that a city pays out year after year without fail. Her income off those bonds was reported at more than a million and a half dollars a year, tax-free, for the rest of her life.
John’s widow, Matilda, took a different road and poured millions into a great house north of the city. Both fortunes survived. Horace Dodge had taken the fortune and built a structure that held it together for fifty years, and then he was gone, and the structure did the rest. Horace Dodge had a son, Horace Jr.
, and by every telling he is the one who blew the family fortune: the speedboats, the five marriages, the drinking. But he never inherited a dollar of it. His father had left him no money of his own. Everything ran through his mother Anna, and it was Anna who decided what he got.
He spent his whole life on an allowance she handed out, and when he died in 1963, he was deep in debt to her, having borrowed from his own mother again only weeks before the end. He did not squander a great fortune. He spent forty-three years waiting on one that never arrived. Anna Dodge outlived her husband by half a century and outlived both of her own children.
She lived until 1970, and by the time she died, she was counted among the richest women in America. The fortune was still whole fifty years after the man who made it was gone. John Dodge had a son named Daniel, twenty-one years old, married just thirteen days, on his honeymoon in the summer of 1938. He and a caretaker were fooling with old dynamite leftover from building the family lodge on an island in Canada.
It went off. Daniel did not die in the blast. He died in the water, drowned when he went overboard on the boat carrying him to a doctor. Even the ones the money did not ruin, it could not save.
The family that kept their fortune in the end is the family they beat, the Fords. Henry Ford did not start out owning the company that carries his name. In 1903, he held about a quarter of it, a minority stake, and another man sat as its president. He took majority control in 1906, and in July 1919, in the same summer he wrote the Dodge brothers their $25 million check, he and his family bought out every last outside shareholder and owned the whole of it outright.
Then in 1936, facing a new tax that would have forced his heirs to sell the company just to pay the bill, Ford split the stock into two kinds. One kind owned the company, the other voted it. He gave away the first and kept the second. When Ford went public in 1956, that arrangement carried straight through, and it has held to this day.
To this day, the Ford family controls about 40 percent of the vote while owning only a few percent of the shares. What holds a fortune, in the end, is a structure built to outlast the men who set it up. The Dodge brothers won every fight they ever picked: their own poverty, the biggest car maker in the world, and then that same man once more inside his own courtroom. They beat every one of them.
They were fierce and fearless, close to unstoppable. In the end, it did not matter, because one fight no one has ever won is time. Time took John at fifty-five and Horace at fifty-two before either could spend a dollar of the great deal their name would fetch. What outran time was not the men but the thing they left behind: the company, the bonds, the structure, the machine that went on working after the hands that built it went still.
The name rolls on. The men are a century gone.