On May 17, 1910, Donald C. MacPherson purchased a Buick runabout from the Close Brothers dealership of Schenectady, New York. The new rig sported a “four cylinder, twenty-two and a half horse power” engine, allowing it to reach a speed of fifty miles per hour. Its body had been painted “French gray” and a similar gray color coated the wooden wheels. The runabout accommodated two passengers in the front seat and one in the rumble seat. Though smaller and slower than other cars on the market in 1910, the Buick served MacPherson's purposes. During the summer and fall, he drove the machine to various places in the vicinity of Saratoga Springs for his business as a stone cutter who specialized in making grave stones.
1. George H. Close, testimony, 36-37, quote 37, Donald C. MacPherson v. Buick Motor Company, Court of Appeals of the State of New York, March 14, 1916, MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (N.Y. 1916), Supreme Court Library at Buffalo, Buffalo, New York (hereafter Records and Briefs for MacPherson).
2. MacPherson', accident is described in MacPherson v. Buick Motor Co., 138 N.Y.S. 224 (N.Y. 1912), 225; Complaint, 3-7, and Donald C. MacPherson, testimony, 15-20, quote 16, Records and Briefs for MacPherson. The accident is also described in Peck, David W.Decision at Law (New York: Dodd, Mead & Company, 1961), 41–42.
3. Donald C. MacPherson, testimony, 21-24, quote 21, Records and Briefs for MacPherson; Complaint, 5, Records and Briefs for MacPherson.
4. MacPherson (1912); Statement, 1-2, and Judgment of March 10, 1913, 12, Records and Briefs for MacPherson.
5. MacPherson v. Buick, 145 N.Y.S. 462 (N.Y. 1914), 465.
6. MacPherson v. Buick, 111 N.E. 1050 (N.Y. 1916), 1055.
7. MacPherson (1916). The legal literature concerning Cardozo is abundant. Levi, Edward H., An Introduction to Legal Reasoning (Chicago: University of Chicago Press, 1948), 7–19;Croley, Steven P. and Hanson, Jon D., “Rescuing the Revolution: the Revived Case for Enterprise Liability,” Michigan Law Review 91 (1993): 683–797;Goldberg, John C. P. and Zipursky, Benjamin C., “The Moral of MacPherson,” University of Pennsylvania Law Review 146 (August 1998): 1733-1847; Kaufman, Andrew L., Cardozo (Cambridge: Harvard University Press, 1998), 265–85; Jonathan Lurie, “Lawyers, Judges, and Legal Change, 1852-1916: New York as a Case Study,” Working Papers from the Regional Economic History Research Center, ed. Porter, Glenn and Mulligan, William H. Jr, 3 (Wilmington, Del.: Eleutherian Mills-Hagley Foundation, 1980), 31–56; and Nelson, William E., The Legalist Reformation: Law, Politics, and Ideology in New York, 1920-1980 (Chapel Hill: University of North Carolina Press, 2001), 93–107, 187-88. Distinctly valuable for its extensive review of automobile cases is Cornelius Gillam, W., Products Liability in the Automobile Industry: A Study in Strict Liability and Social Control (Minneapolis: University of Minnesota Press, 1960). Valuable in linking Cardozo's ruling to engineers' ideas about managers and industrial accidents is John Fabian Witt, “Speedy Fred Taylor and the Ironies of Enterprise Liability,” Columbia Law Review 103 (2003): 1–49.
8. George H. Close, testimony, 36, Records and Briefs for MacPherson.
9. In their analysis of the privity requirement as it related to products liability, legal scholars typically have singled out the English case, Winterbottom v. Wright, 10 M & W. 109 Eng. Rep. 402 (Ex. 1842), in which a mail coach's driver was injured when the coach broke and overturned. The driver sought compensation not from his employer, the Postmaster General, but instead from the company that had contracted with the postmaster for maintaining the coach. The court declared that the plaintiff could not recover since he was not in privity of contract with the coach's manufacturer. In the United States, the courts soon began finding exceptions to the privity requirement. In 1858, for a New York case in which the defendant had mislabeled a bottle of belladonna (a poison) as a bottle of dandelion extract, a safe liquid, and sold the bottle to a druggist who in turn sold the bottle to another retailer who sold the bottle to the ultimate user, who was injured when she consumed the contents. The court, recognizing that the sale of the poison had been made to a druggist, reasoned that “The injury therefore was not likely to fall on him, or on his vendee who was also a dealer; but much more likely to be visited on a remote purchaser, as actually happened.” Finding that the defendant's actions put the plaintiff's “life in imminent danger,” the court took exception to Winterbottom and affirmed the judgment for the plaintiff. Thomas v. Winchester, 6 N.Y. 397 (1852), 409. The courts spent several decades enlarging exceptions to the privity requirement. See Devlin v. Smith, 89 N.Y. 470 (1882); Huset v. J. I. Case Threshing Mach. Co., 120 F. 865 (8th Cir. 1903); Kuelling v. Roderick, 75 N.E. 1098 (N.Y. 1905); and Statler v. Ray Manufacturing Company, 88 N.E. 1063 (N.Y. 1909). Among legal reviews of this topic, see Levi, An Introduction to Legal Reasoning, 7-19; Lurie, “Lawyers, Judges, and Legal Change, 1852-1916,” 31-56; Croley and Hanson, “Rescuing the Revolution,” 695-97; and Goldberg and Zipursky, “The Moral of MacPherson,” 1750-52.
10. MacPherson (1916), 1053. Prosser, William L., Handbook of the Law of Torts (St. Paul, Minn.: West Publishing Co., 1941), 677; Croley and Hanson, “Rescuing the Revolution,” 697-98. See also Goldberg, and Zipursky's, critique of Prosser in “The Moral of MacPherson,” 1756–69.
11. Coase, R. H., “The Problem of Social Cost,” Journal of Law & Economics 3 (1960): 1–44. Writing about autos, Gillam included among social costs the death and injury of persons as a result of defective vehicles, the value of their labor that was lost, any medical care, plus the resources that went into the vehicles that were lost as a result of their defects. See Gillam, , Products Liability in the Automobile Industry, 196–210, especially 196-97. McEvoy, Arthur F. examined social costs in The Fisherman's Problem: Ecology and Law in the California Fisheries, 1850-1980 (New York: Cambridge University Press, 1986). Barbara Welke found that advances in technology plus the increased speed of trains created new risks of injury for passengers and bystanders. Welke, Barbara Young, Recasting American Liberty: Gender, Race, Law, and the Railroad Revolution, 1865-1920 (Cambridge: Cambridge University Press, 2001), 27–28. Scott Knowles focused on dangerous products and the risk of injury stemming especially from fire hazards. Knowles examined how private oversight entities, notably the Underwriters' Laboratories, developed bodies of knowledge and the authority to influence corporate managers and shape their markets. Scott Gabriel Knowles, “Inventing Safety: Fire, Technology, and Trust in Modern America” (Ph.D. diss., Johns Hopkins University, 2003). Sarah S. Lochlann Jain examined the injuries borne by bystanders in the early auto market and the mature market of the 1950s and 1960s in “‘Dangerous Instrumentalities’: The Bystander as Subject in Automobility,” Cultural Anthropology 19 (2004): 61-94. Albert O. Hirschman studied the dynamics between buyers and sellers in mature markets when product quality deteriorates in Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States (Cambridge: Harvard University Press, 1970). Witt, John Fabian, “Toward a New History of American Accident Law: Cooperative First-Party Insurance Movement,” Harvard Law Review 114 (2001): 690–841.
12. One of the first automobile historians, Ralph Epstein, wrote that through the year 1910 “the expense occasioned by the rapid breaking and wearing out of parts … often either equaled or exceeded the annual cost of operation.” Epstein, Ralph C., The Automobile Industry: Its Economic and Commercial Development (1928; reprint, New York: Arno Press, 1972), 85. On Ford's first experimental auto, see Nevins, Allan, Ford: The Times, the Man, the Company (New York: Charles Scribner's Sons, 1954), 148–57. Pamela Walker Laird outlined automakers' efforts to reassure motorists about their products' quality in “‘The Car without a Single Weakness’: Early Automobile Advertising,” Technology & Culture 37 (October 1996): 796–812.
13. Flaws in the wood, hickory, were the defects at issue in MacPherson's case. Manufacturers favored hickory, researchers reported, because “[t]he severe thrust, strain, twist, and compression which automobile wheels must sustain.” Still, defects in hickory and other species of trees took many forms, often called “brashness.” Arthur Koehler cited decay initiated by fungi as “a well-known cause of brashness” and explained: “brash wood breaks suddenly and completely across the grain with brittleness in fracture and with a comparatively small deflection.” “Shock resistance,” he concluded, was “the first mechanical property affected by the progressive disintegration of wood by fungi. Wood may show a reduction in this property even before the decay has advanced far enough to be readily recognized by inspection or before the type of fracture is affected by it.” Charles F. Hatch, “Manufacture and Utilization of Hickory, 1911,” U.S. Department of Agriculture, Forest Service—Circular 187 (1911): 1-16, quote 4; and Arthur Koehler, “Causes of Brashness in Wood,” U.S. Department of Agriculture Technical Bulletin 342 (1933), quotes 2, 36, 38.
14. As a cautionary note, I do not argue that liability for defects was the sole factor leading to the adoption of auto franchising. My complaint is that economic and business historians have overlooked liability, in general, and defects, in particular, as factors in managers' decisions. Of most importance, liability for defective products (or other problems) is omitted in the major works in the field. See especially, Chandler, Alfred D. Jr, The Visible Hand: The Managerial Revolution in American Business (Cambridge: Harvard University Press, 1977); idem, , Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Harvard University Press, 1990); and Williamson, Oliver E., The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (New York: Free Press, 1985). Economists have written at length about franchising, but in my survey of the literature I did not find that they had examined the impact of liability on a firm's structure. See for example, Dnes, Antony W., “The Economic Analysis of Franchise Contracts,” Journal of Institutional and Theoretical Economics 152 (1996): 297–324;Rubin, Paul, “The Theory of the Firm and the Structure of the Franchise Contract,” Journal of Law and Economics 21 (1978): 223–33; and Kaufmann, Patrick J. and LaFontaine, Francine, “Costs of Control: The Source of Economic Rents for McDonald's Franchisees,” Journal of Law and Economics 37 (1994): 417–53. The business historian Thomas S. Dicke identified liability as a factor in Ford's reliance on the franchise contract, but did not explore the implications of liability for autos or firms in other industries. Dicke relied on the scholarship of Charles Mason Hewitt, Jr., who traced the evolution of dealer agreements, but his treatment of defects was flawed, which I discuss in my appendix. Dicke, Thomas S., Franchising in America: The Development of a Business Method, 1840-1980 (Chapel Hill: University of North Carolina Press, 1992), 66–67; and Hewitt, Charles Mason Jr, Automobile Franchise Agreements (Homewood, Ill: Richard D. Irwin, Inc., 1956), 37–38. The appendix is available at <http://www.historycooperative. org‘/journals/lhr/23.1/clarke.html> (hereafter Appendix).
15. Macaulay, Stewart, Law and the Balance of Power: The Automobile Manufacturers and Their Dealers (New York: Russell Sage Foundation, 1966); Ian Macneil, “Economic Analysis of Contractual Relations: Its Shortfalls and the Need for a ‘Rich Classificatory Apparatus,’” Northwestern University Law Review 75 (1981): 1018-61; idem, “Bureaucracy and Contracts of Adhesion,” Osgoode Hall Law Journal 22 (1985): 5–28; Friedrich Kessler, “Automobile Dealer Franchises: Vertical Integration by Contract,” Yale Law Journal 66 (1957): 1135–90;Hadfield, Gillian K., “Problematic Relations: Franchising and the Law of Incomplete Contracts,” Stanford Law Review 42 (1990): 927–92; and Gordon, Robert W., “Macaulay, Macneil, and the Discovery of Solidarity and Power in Contract Law,” Wisconsin Law Review (1985): 565–79. Croley and Hanson singled out Kessler's impact on “the first generation of product liability scholars and judges” in “Rescuing the Revolution,” 691, n. 29, quote 708-9. In his studies of corporate power, Hanson has combined the insights of legal realists and critical legal scholars. See Jon Hanson and David Yosifon, “The Situation: An Introduction to the Situational Character, Critical Realism, Power Economics, and Deep Capture,” University of Pennsylvania Law Review 152 (2003): 129–346.Schlegel, John Henry explored realists' empirical studies in American Legal Realism and Empirical Social Science (Chapel Hill: University of North Carolina Press, 1995).
16. Faulting recent legal writers, Croley and Hanson argue that consumers still face problems of imperfect information, and the other two complaints still apply to markets. Croley and Hanson, “Rescuing the Revolution,” 687-797, especially 767-97, quotes 690, 769. Further Jon D. Hanson and Douglas A. Kysar argue that firms manipulate consumers' perceived risks of defects (often through mass media) in “Taking Behavioralism Seriously: Some Evidence of Market Manipulation,” Harvard Law Review 112 (1999): 1420–1572.
17. Friedman, Lawrence M. and Ladinsky, Jack, “Social Change and the Law in Industrial Accidents,” in American Law and the Constitutional Order: Historical Perspectives, ed. Friedman, Lawrence M. and Scheiber, Harry N., enl. ed. (Cambridge: Harvard University Press, 1988), 269–82; Witt, “Toward a New History,” 690-841, and “Speedy Fred Taylor,” 1-49; Christopher L. Tomlins, “A Mysterious Power: Industrial Accidents and the Legal Construction of Employment Relations in Massachusetts, 1800-1850,” Law and History Review 6 (1988): 375–438;Friedman, Lawrence M. and Russell, Thomas D., “More Civil Wrongs: Personal Injury Litigation, 1901-1910,” American Journal of Legal History 34 (1990): 295–314;McEvoy, Arthur F., “The Triangle Shirtwaist Factory Fire of 1911: Social Change, Industrial Accidents, and the Evolution of Common-Sense Causality,” Law and Social Inquiry 20 (1995): 621–51; and Welke, Recasting American Liberty.
18. Welke, Recasting American Liberty, 3-136.
19. McEvoy, “The Triangle Shirtwaist Factory Fire of 1911,” 621-51; and Tomlins, “A Mysterious Power,” 386-87.
20. Although not focused on innovation, a valuable account of automobile safety is Eastman, Joel W., Styling vs. Safety: The American Automobile Industry and the Development of Automotive Safety, 1900-1966 (New York: University Press of America, 1984). See also Jain, “‘Dangerous Instrumentality,’” 61-94.
21. Automobile historians typically have focused on the many ingredients by which manufacturers produced a complex machine on a mass scale. They have asked how producers improved devices or marketed goods, rather than who bore the costs of innovation. There are a few exceptions. The economist Michael Spence called attention to liability as an information problem. Cornelius W. Gillam in his review of appellate cases involving automobiles argued that consumers absorbed social costs in the form of injuries born out of defective vehicles. Among excellent scholarly accounts of the automobile market, see Chandler, Alfred D. Jr, Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge: MIT Press, 1962); Davis, Donald Finlay, Conspicuous Production: Automobiles and Elites in Detroit, 1899-1933 (Philadelphia: Temple University Press, 1988); Hounshell, David, From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States (Baltimore: Johns Hopkins University Press, 1984); Kuhn, Arthur J., GM Passes Ford, 1918-1939: Designing the General Motors Performance-Control System (University Park: Pennsylvania State University Press, 1986); and Leslie, Stuart W., Boss Kettering: Wizard of General Motors (New York: Columbia University Press, 1983). On liability for defects, see Michael Spence, “Consumer Misperceptions, Product Failure and Producer Liability,” Review of Economic Studies 44 (1977): 561–72;Gillam, , Products Liability in the Automobile Industry, 196–210; and Jain, “‘Dangerous Instrumentality.’”
22. Schumpeter, Joseph, Capitalism, Socialism and Democracy (1942; reprint, New York: Harper & Brothers, 1976); and idem, , “The Creative Response in Economic History,” Journal of Economic History 7 (1947): 149–59. Many scholars have revised parts of Schumpeter's conceptual framework. An economic revision is found in Nelson, Richard R. and Winter, Sidney G., An Evolutionary Theory of Economic Change (Cambridge: Harvard University Press, 1982). For a business historian's approach, see Koehn, Nancy F., Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell (Boston: Harvard Business School Press, 2001). Treating a government agency as an entrepreneurial entity, see Norberg, Arthur L. and O'Neill, Judy E., Transforming Computer Technology: Information Processing for the Pentagon, 1962-1986 (Baltimore: Johns Hopkins University Press, 1996).
23. My point is not meant as a criticism. Much of the best scholarship in the field examines innovation from this perspective. In addition to the sources cited in note 22, see, for instance, Louis Galambos with Sewell, Jane, Networks of Innovation: Vaccine Development at Merck, Sharp & Dohme, and Mulford, 1895-1995 (New York: Cambridge University Press, 1995); Hounshell, David and Smith, John K., Science and Corporate Strategy: Du Pont R&D, 1902-1980 (New York: Cambridge University Press, 1988); Carlson, W. Bernard, Innovation as a Social Process: Elihu Thomson and the Rise of General Electric (New YorkCambridge University Press, 1991); and Misa, Thomas J., A Nation of Steel: The Making of Modern America, 1865-1925 (Baltimore: Johns Hopkins University Press, 1995).
24. The literature about consumption is now vast. Business historians and historians of design, in particular, have written about managers' efforts to respond to consumers, but have not examined consumers' lawsuits. Two valuable studies are Koehn, Brand New, and Blaszczyk, Regina Lee, Imagining Consumers: Design and Innovation from Wedgwood to Corning (Baltimore: Johns Hopkins Press University, 2000). Economic historians have studied accidents, but as a byproduct rather than as a central element of the economy's development. See Temin, Peter, Taking Your Medicine: Drug Regulation in the United States (Cambridge: Harvard University Press, 1980); and Fishback, Price V. and Kantor, Shawn Everett, A Prelude to the Welfare State: The Origins of Workers' Compensation, National Bureau of Economic Research (Chicago: University of Chicago Press, 2000).
25. Ron Harris recently surveyed economic historians' growing interest in legal history. Harris, Ron, “The Encounters of Economic and Legal History,” Law and History Review 21 (2003): 297–346. See also Gordon, “Macaulay, Macneil, and the Discovery of Solidarity and Power in Contract Law,” 565-79; Witt, “Toward a New History,” 692-713; Hanson and Yosifon, “The Situation,” 179-201; and Schlegel, American Legal Realism.
27. Scharchburg, Richard P., Carriages without Horses: J. Frank Duryea and the Birth of the American Automobile Industry (Warrendale, Pa: Society of Automotive Engineers, 1993); James J. Flink, The Automobile Age (Cambridge: MIT Press, 1988), 5–6, 23, 31-32; Editors of Automobile Quarterly, The American Car since 1775: The Most Complete Survey of the American Automobile Ever Published, 2nd ed. (New York: L. Scott Bailey, 1971), 138–39; and 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.
28. Flink, , The Automobile Age, 31–35. See also The American Car since 1775, 138-39.
29. For industry developments, see Flink, , The Automobile Age, 25, 37, 64, 212–13. On Kettering's self-starter, see Leslie, , Boss Kettering, 49–50. On the assembly line, see Houn-shell, , From the American System to Mass Production, 217–61. Among studies of the early automobile industry, one of the oldest and still most valuable accounts is Epstein, The Automobile Industry. See also Rae, John B., American Automobile Manufacturers: The First Forty Years (Philadelphia: Chilton Company, 1959); Nevins, Ford: The Times, the Man, the Company; Davis, Conspicuous Production; and McShane, Clay, Down the Asphalt Path: The Automobile and the American City (New York: Columbia University Press, 1994).
30. Clough, Albert L., “The Question of Axles,” Horseless Age 8 (November 6, 1901): 672.
31. “Automobile Accidents,” Horseless Age 10 (August 20, 1902): 205.
32. “Lessons of the Road,” Horseless Age 9 (April 2, 1902): 449.
33. Nevins, , Ford: the Times, the Man, the Company, 247–49, quote 247.
34. “Automobile Accidents,” Horseless Age 10 (August 13, 1902): 180.
35. Pope, N. B., “The Automobile as a Fire Hazard,” Weekly Underwriter 86 (February 3, 1912): 117–19. See also “Leaky Tanks,” Horseless Age 10 (July 9, 1902): 28.
36. “Automobile Insurance,” Automobile 11 (July 18, 1903): quote 62; and Hines, Dixie, “The Insuring of Automobiles,” Automobile 11 (August 15, 1903): 160–61. On the history of automobile insurance, see Eugene F. Hord, “History and Organization of Automobile Insurance,” Speech Delivered before the Insurance Society of New York, November 11 and 18, 1919, part II, 15-29, Widener Library (stacks), Harvard University, Cambridge, Mass.
37. Weekly Underwriter 64 (May 18, 1901): 359.
38. “Difficulties of Automobile Insurance,” Horseless Age 9 (June 4, 1902): 667.
39. Hines, “The Insuring of Automobiles,” quote 160.
40. Weekly Underwriter 74 (January 6, 1906): 4. Prior to 1906, articles noted the demand for property coverage. See “Automobile Insurance Notes,” Automobile Topics 1 (October 27, 1900): 48; Hines, “The Insuring of Automobiles,” 160; “Automobile Insurance,” Automobile 11 (July 18, 1903): 62; “Automobile Insurance Rates,” Automobile 11 (September 19, 1903): 284; “Automobile Housing and Insurance,” Automobile 11 (November 28, 1903): 570; and “Blanket ‘Floater’ Insurance Rate,” Automobile 11 (November 28, 1903): 577.
41. “Automobile Liability,” Eastern Underwriter 9 (December 24, 1908): 14.
42. In the first decade of motoring, several auto journals appealed to wealthy buyers. See Automobile, The Automobile Magazine, Automobile Topics, and The American Automobile.
43. H. G. Buschman, General Merchandize, to “Friend Olds,” May 10, 1903, Folder 7, Box 6, Ransom E. Olds Papers, Michigan State University Archives and Historical Collections, East Lansing, Mich. (hereafter Olds Papers, MSU).
44. A few drivers were women. In 1903, Automobile counted fifty women among Boston's 3,500 licensed motorists (who were not chauffeurs). “Four Thousand Boston Men and Women Licensed Motorists,” Automobile 11 (October10, 1903): 362. Virginia Scharff reported scattered data about women drivers. In Houston, Texas, she found that 5.5 percent of people owning cars in the city's auto directory were women. Scharff noted that more women in all likelihood drove cars, but were not listed in directories. Scharff, Virginia, Taking the Wheel: Women and the Coming of the Motor Age (New York: Free Press, 1991), 25–26. Welke detailed gendered distinctions in risk-taking among railroad passengers in Recasting American Liberty, 84-105.
45. “Record Breaking Tours,” Horseless Age 10 (July 23, 1902):82.
46. Anonymous, “Diary Notes of a User, Part III,” Horseless Age 10 (October 1, 1902): 353.
47. W. E. Bristol, Cashier, Bank of Oakland, to E. W. Olds, March 3, 1903, Folder 3, Box 6; C. H. Farnum to Oldsmobile Co., March 6, 1903, Folder 3, Box 6; and E. W. Olds to B. C. Dinsmore, April 22, 1903, Folder 6, Box 6, all in Olds Papers, MSU.
48. Flink, The Automobile Age, 34.
49. Hounshell, From the American System to Mass Production, 234.
50. On the development of research laboratories among different industries, see Mowery, David and Rosenberg, Nathan, Technology and the Pursuit of Economic Growth (New York: Cambridge University Press, 1989), 79–92. On railroads' laboratories, see Usselman, Steven W., Regulating Railroad Innovation: Business, Technology, and Politics in America, 1840-1920 (New York: Cambridge University Press, 2002), 199–211. See also studies cited in note 23.
51. See “Need of Testing Laboratories,” Horseless Age 17 (May 9, 1906): 657-58; and Harry E. Dey, “Experimental Departments,” Horseless Age 20 (October 2, 1907): 455-56.
52. Misa provided an excellent example of the SAE's standardization work for steels used in automobiles. He noted that in 1917 the association changed its name to the Society of Automotive Engineers. Misa, , A Nation of Steel, 213, 215-23, 229; and Rae, , American Automobile Manufacturers, 79–80.
53. The Forest Service undertook many research projects for the wood-using industries prior to the creation of the FPL. Charles A. Nelson, “A History of the Forest Products Laboratory” (Ph.D. diss., University of Wisconsin, 1964), especially 24-27, 42-51, 57.
54. Mowery, and, Technology and the Pursuit of Economic Growth, 84–90.
55. The research staff was described in the long letter from Vice-President, Arthur D. Little, Inc., to Thomas Neal, Esq., President, General Motors Company, June 1, 1911, Box 228, Arthur D. Little, Inc. Collection, Manuscripts Division, Library of Congress, Washington, D.C. (hereafter Arthur D. Little, LC). On standardization, see General Motors Company-Research Dept., Arthur D. Little, Inc.—Directors, “Progress Report of the Research Department for the Month of November, 1911,” 11 “GM Before 1923,” General Motors Company Files, National Automotive History Collection, Detroit Public Library, Detroit, Mich. (hereafter DPL); and Engineering Department, General Motors Company, Directors to Thomas Neal, President, GMC, “Progress Report of the Engineering Department for the Month of July, 1911,” 4-5, Box 228, Arthur D. Little, LC. For examples of projects undertaken by Arthur D. Little, Inc., see J. G. Callan, Engineer, Arthur D. Little, Inc., to General Motors Company, August 2, 1912, 711-40, Miscellaneous Technical Reports, Volume 21, Box 67; and General Motors Company–Engineering Dept., “Progress Report of the Engineering Department for the Month of September, 1911,” September 30, 1911, Box 228, both in Arthur D. Little, LC; General Motors Company, Research Department, Arthur D. Little, Inc., Directors, “Report of Research Department for July, August, and September,” No. 196, October 15, 1912, “GM Before 1923,” General Motors Company Files, DPL.
56. Engineering Department, General Motors Company, to Thomas Neal, Esq., President, General Motors Company, June 6, 1911, and “Test of Wheel 36" × 5" Oldsmobile Made by Imperial Wheel Company, March 15, 1911, At Flint Axle Works, Flint Michigan,” Miscellaneous Technical Reports, Arthur D. Little, Inc., Directors, Volume 18, 230-37, quote 230, 232, 237, Box 64, Arthur D. Little, LC.
57. Claude E. Cox to Gleason Murphy, December 27, 1911, 2, Box 6, Claude E. Cox Collection, Accession 15 (hereafter Cox), DPL.
58. “Increase in Number of Front Wheel Failures,” Horseless Age 23 (March 24, 1909): 398.
59. Claude E. Cox to Gleason Murphy, December 27, 1911, 2, Box 6, Cox, DPL.
60. Engineering Department, Directors, General Motors Company to Thomas Neal, President, General Motors Company, “Progress Report of the Engineering Department for the Month of June 1911,” July 1, 1911, 2, Box 228, Arthur D. Little, LC; General Motors Company-Research Dept., Arthur D. Little, Inc.—Directors, “Progress Report of the Research Department for the Month of November, 1911,” 11, 13, “GM Before 1923,” General Motors Company Files, DPL; Claude E. Cox to Gleason Murphy, December 27, 1911, 2, Box 6, Cox, DPL.
61. Claude E. Cox to Gleason Murphy, December 27, 1911, quote 1; Research Department, Arthur D. Little, Inc., [CEC] to Thomas Neal, President, General Motors Co., February 15, 1912; President, Arthur D. Little, Inc., to Tracy Lyon, Director of Production, March 28, 1912; Director of Research [Cox] to Arthur D. Little, Inc., August 9, 1912; and Director of Research to Arthur D. Little, Inc., attention Mr. John G. Callan, January 15, 1913, all in Folder 6:3, Box 6, Cox, DPL.
62. Claude E. Cox to John G. Callan, January 15, 1913, Box 6, Cox, DPL. Sloan noted that two years after its formation in 1908, General Motors absorbed twenty-five new firms. Sloan, Alfred P. Jr, My Years with General Motors, ed. McDonald, John with Catherine Stevens (Garden City, N.J.: Doubleday & Company, 1964), 5, 7–9.
63. Efforts by Ford's management to control automobile repairs are examined in Stephen L. McIntyre, “The Failure of Fordism: Reform of the Automobile Repair Industry, 1913-1940,” Technology and Culture 41 (April 2000): 269-99.
64. W. Benton Crisp to Mr. Plantiff, May 26, 1906, Box 37, Henry Ford Office Papers, Accession 2, Benson Ford Research Center, The Henry Ford (formerly, the Henry Ford Museum and Greenfield Village), Dearborn, Mich. (hereafter HF).
65. Settlement between Morton E. Duncan and the Ford Motor Company, November 23, 1905, Folder “General Legal Records—Claim Releases—Damage Suits—1903-1926,” Box 1, Office of the Treasurer—General, 1903-1933, Accession 483, HF; Directors' Minutes, 82, November 17, 1905, Book #1, Box 1, Ford Motor Company Minute Books, Accession 85, HF.
66. Beecroft v. Van Schaick, 104 N.Y.S. 458 (1907). Berry, C. P., A Treatise on the Law Relating to Automobiles (Chicago: Callaghan, 1909), 209. Two treatises devoted to automobiles charted the growing variety and number of cases. See Berry, C. P., The Law of Automobiles, 4th ed. (Chicago: Callaghan and Company, 1924); and Huddy, Xenophon P., The Law of Automobiles, 5th ed. by Curtis, Arthur F. (Albany, N.Y.: Matthew Bender & Co., 1919).
67. Greene v. Curtis Automobile Company, 129 N.W. 410 (Wis. 1911).
68. Ford Motor Company v. Morris R. Osburn, 140 Ill. App. 633 (1908). Other cases followed from a car's defects and a buyer's efforts to recover the price paid for a new or used vehicle. See, for example, Pitcher v. Webber, 68 A. 593 (Me. 1907); Boulware v. Victor Automobile Manufacturing Company, 134 S.W. 7 (Mo. Ct. App. 1911); Bedford v. The Hol-Tan Company, 128 N.Y.S. 578 (1911); and Klock v. Newbury, 114 P. 1032 (Wash. 1911).
69. Plaintiff's Bill of Exceptions, 1-2, and Brief for Plaintiff, 1, Neale v. American Electric Vehicle Company, 186 Mass. 303 (1904), Case No. 2411, Massachusetts Reports Papers and Briefs, Volume 186, Supreme Judicial Court of Massachusetts, Suffolk, Social Law Library, Boston, Mass. (hereafter Records and Briefs for Neale).
70. Bill of Complaint, 1-3, Master's Report, 16-26, Plaintiff's Objections to the Master's Report, 29-30, Masters & another v. Wayne Automobile Company & others, 198 Mass. 25 (1908), Massachusetts Reports Papers and Briefs, Volume 198, Supreme Judicial Court of Massachusetts, Suffolk, Social Law Library, Boston, Mass. (hereafter Records and Briefs for Masters).
71. Testimony of Harmon J. Hunt, 63-64, 77-81, 103-10, Testimony of David D. Buick, 65-66, Exhibit 79, The Irgens Auto Co. to Reid Manufacturing Company, June 16, 1904, 225-28, 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. (hereafter Records and Briefs for Buick).
72. American Motor Car Co. to White Company, April 16, 1908, Exhibit A, 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.
73. Alanson P. Brush, testimony, 350-51, quote 351, Records and Briefs for MacPherson.
74. Ford Motor Co. v. Livesay, 160 P. 901 (Okla. 1916).
75. Porter, Glenn and Livesay, Harold C., Merchants and Manufacturers: Studies in the Changing Structure of Nineteenth-Century Marketing (Baltimore: Johns Hopkins University Press, 1971).
76. Ibid.; Chandler, The Visible Hand, 302-14, 403, quote 308-9. Harold C. Passer, “Development of Large-Scale Organization: Electrical Manufacturing Around 1900,” Journal of Economic History 12 (1952): 378-95; and Michael Massouh, “Technological and Managerial Innovation: The Johnson Company, 1883-1898,” Business History Review 50 (1976): 46-68.
77. McCurdy, Charles, “American Law and the Marketing Structure of the Large Corporation, 1875-1890,” Journal of Economic History 38 (1978): 636–37. See as well, Chandler, , The Visible Hand, 303–7; and Dicke, , Franchising in America, 32–45.
78. Looking at distribution systems, Chandler did not distinguish between franchises or salaried agents. The examples I noted were cases where firms relied on salaried agents. I cited Chandler because he remains the most influential business historian. Other automobile historians did not pursue the question of liability except for Epstein's brief note. See for example Kennedy, E. D., The Automobile Industry: The Coming of Age of Capitalism's Favorite Child (1941; reprint, Clifton, N.J.: Augustus M. Kelley, 1972), 62–64, 127, 138-45; Rae, , American Automobile Manufacturers, 46–47, 136-38; and Epstein, , The Automobile Industry, 140, and in general 136-52. Dicke, relying on Hewitt's study, noted the implications of liability for Ford. Hewitt misread Joslyn v. Cadillac, 177 F. 863 (6th Cir. 1910). The plaintiff (car buyer) contended that the dealer made false statements only in the sense that the product, being so defective, failed to live up to its advertised representations. Dicke, , Franchising in America, 66–67; and Hewitt, , Automobile Franchise Agreements, 19 n. 27, 24 n. 4, 25, 37-38, 45. I review Hewitt's study in the Appendix.
79. Kessler, “Automobile Dealer Franchises,” 1135-36.
80. At least by 1912 the courts had established two features important for separating the agency and sales contracts. The Illinois Appeals Court heard a case in which the dealer claimed his 1909 contract constituted an agency relationship. Even when called an “Agency Agreement,” and even though the dealer was given an exclusive sales territory, the court declared that most parts of the contract were “wholly inconsistent with, and repugnant to, any theory of agency.” Vincent Bendix was prohibited from selling cars in the “name of the defendant” and had to pay for the cars “cash on delivery.” Bendix v. Staver Carriage Company, 174 Ill. App. 589 (1912), 595. See also Banker Brothers Company v. Commonwealth of Pennsylvania, 222 U.S. 210 (1911). The many cases regarding sales and agency contracts are reviewed in Berry, , The Law of Automobiles, 1365-1389, especially 1367, and Huddy, , The Law of Automobiles, 1001–21, especially 1002-3. Although Hewitt did not review these two cases, he discussed many legal issues surrounding dealer contracts in Automobile Franchise Agreements.
81. Johnson v. Cadillac Motor Car Co., 261 F. 878 (2nd Cir. 1919).
82. Table 1 provides information about the firms' production (Appendix).
83. The managers were paid a salary, but purchased cars at a discount as did other dealers. See, for example, Memorandum of Agreement between Thomas J. Hay and the Ford Motor Company, October 11, 1906, Folder 1, Box 1, Secretary's Office–Contracts and Agreements, Accession 140 (hereafter Acc. 140), HF. Hewitt described other sales arrangements during Ford's early years in Automobile Franchise Agreements, 19. See also Nevins, , Ford: The Times, the Man, the Company, 264–65; and the Appendix.
84. 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. (hereafter Records and Briefs for Wheaton).
85. Table 2 indicates whether a firm included a clause in its dealer agreement declaring that the dealer was not its agent (Appendix).
86. Nevins, , Ford: The Times, the Man, the Company, 264–65.
87. Stegh, Leslie J., “Putting America in the Driver's Seat: The Deere-Clark Motor Car Company,” Illinois Historical Journal 81 (Winter 1988): 242–54; and Helper, Susan, “Strategy and Irreversibility in Supplier Relations: The Case of the U.S. Automobile Industry,” Business History Review 65 (1991): 781–84, especially 792-93.
88. This clause was similar to the non-delivery clause, which is discussed in Hewitt, , Automobile Franchise Agreements, 42; Kessler, “Automobile Dealer Franchises,” 1147, 1149; and U.S. Federal Trade Commission, “Report on Motor Vehicle Industry,” 142. Information is reported in Table 2 (Appendix).
89. See cases cited above, Ford Motor Company v. Osburn, Joslyn v. Cadillac, Buick, Neale, Masters, Washburn, and Levis v. Pope Motor Car Company, 95 N.E. 815 (N.Y. 1911). Jain examined other types of agency relationships in her study, arguing that as early as 1907 the courts limited the ability of bystanders to receive compensation for personal injuries sustained in auto accidents. In my study of manufacturer-dealer relations, I find that prior to 1908 a number of problems prompted by an auto's defects, not just personal injury, gave automakers reason to elect the sales contract over the agency contract. Managers also added clauses to sales contracts limiting their obligations to dealers. Jain, “‘Dangerous Instrumentality,’” 67-74.
90. Brief for Defendant, 1, 4, Records and Briefs for Neale.
91. Plaintiff's brief, 5, Records and Briefs for Masters.
92. Wheaton v. Cadillac Automobile Co., 143 Mich. 21, 106 N.W. 399 (1906), Records and Briefs for Wheaton. See also Hewitt, , Automobile Franchise Agreements, 39 n. 34.
93. Ford Motor Company v. Osburn.
94. Joslyn v. Cadillac. See also Hewitt, , Automobile Franchise Agreements, 37. The court discussed the vehicle's defects in its lengthy opinion.
95. Ford Motor Company 1904 agreement, File # 7222-68-2, Box 871, Federal Trade Commission, Bureau of Corporations, Record Group 122, National Archives, College Park, Md. Warranty information is reported in Table 3 (Appendix).
96. 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, Records of the U.S. Courts of Appeals, Record Group 276 (hereafter RG 276), National Archives, Northeast Region, New York, N.Y.; 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, National Archives, Great Lakes Region, Chicago, Ill. For other firms, see Table 3 (Appendix).
97. Kessler, “Automobile Dealer Franchises,” 1141-42, 1147-48; and Hewitt, , Automobile Franchise Agreements, 24, 31–32, 39. Macaulay, Law and the Balance of Power; Macneil, “Economic Analysis of Contractual Relations,” 1018-63; and Gordon, “Macaulay, Macneil, and the Discovery of Solidarity and Power in Contract Law,” 569, 572.
98. Macneil, “Economic Analysis of Contractual Relations,” 1018-63; Kessler, “Auto-mobile Dealer Franchises,” 1136. See also Gordon's discussion of discrete transactions in “Macaulay, Macneil, and the Discovery of Solidarity and Power in Contract Law,” 569-72.
99. Gen'l Attorney, Ford Motor Company, to William H. Atwell, August 27, 1913, Folder 75-29-24, Box 29, Ford Motor Company Legal Records, 1912-31, Accession 75 (hereafter Acc. 75), HF.
100. General Attorney, Ford Motor Company, to Mordecai & Gadsden & Rutledge, September 19, 1913; Mordecai & Gadsden & Rutledge to L. B. Robertson, telegram, September 26, 1913; Ford Motor Company to Mordecai & Gadsden & Rutledge, telegram, September 27, 1913; C. F. Rizer to Ford Motor Company, telegram, September 28, 1913; and Simeon Hyde to L. R. [sic] Robertson, November 26, 1913, File L-2020 Johnson, Daniel 1912-1914 (damage-personal), Box 3, Ford Motor Company Legal—Cases and Claims, Accession 297 (hereafter Acc. 297), HF.
101. Gen'l Attorney, Ford Motor Company, to W. K. Prudden Company, October 19, 1914, Folder 75-26-16, Box 26; and Gen'l Attorney, Ford Motor Company, to Jo Johnson, Att'y, April 20, 1916; Jo Johnson to L. R. [sic] Robertson, April 17, 1916, Folder 75-40-4, Box 40, all in Acc. 75, HF.
102. Ford wrote to its supplier, expecting the company would “reimburse us for at least fifty percent of the expense incurred in defense of this action.” Gen'l Attorney, Ford Motor Company, to W. K. Prudden Company, May 23, 1916, Folder 75-39-30, Box 39, Acc. 75, HF.
103. Lucy Shaffer was seated in a rumble seat bolted to a box on the rear of the car, and as the car climbed a hill the box cracked, causing the seat to give way. She was injured in the fall. Olds Motor Works v. Shaffer, 140 S.W. 1047 (Ky. Ct. App. 1911); Gen'l Attorney to Henry W. Thorne, March 1, 1915, File L-2008, Box 3, Acc. 297, HF.
104. General Attorney, Ford Motor Company, to Douglas B. Crane, Esq., June 6, 1914, Folder 75-26-16, Box 26, Acc. 75, HF.
105. Henry W. Thorne to Ford Motor Company, October 8, 1914, Folder L-2008, Box 3, Acc. 297, HF.
106. General Attorney, Ford Motor Company, to Douglas B. Crane, Esq., June 6, 1914, Folder 75-26-16, Box 26, Acc. 75, HF.
107. On autos, see Langlois, Richard N. and Robertson, Paul L., “Explaining Vertical Integration: Lessons from the American Automobile Industry,” Journal of Economic History 49 (1989): 361–75; Michael Schwartz, “Markets, Networks, and the Rise of Chrysler in Old Detroit, 1920-1940,” Enterprise & Society 1 (2000): 63-99; and Benjamin Klein, “Vertical Integration as Organizational Ownership: The Fisher Body—General Motors Relationships Revisited,” in The Nature of the Firm: Origins, Evolution, and Development, ed. Williamson, Oliver E. and Winter, Sidney G. (Oxford: Oxford University Press, 1993), 213–26. See also Chandler, Scale and Scope; Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” Journal of Law and Economics 22 (1979): 233–61; and idem, , “The Modern Corporation: Origins, Evolution, Attributes,” Journal of Economic Literature 19 (1981): 1537-1568.
108. Coase, “The Problem of Social Cost.” One of the few calls for a legal perspective in the study of the firm is found in Masten, Scott E., “A Legal Basis for the Firm,” in The Nature of the Firm, 196–212. See also Gillam, , Products Liability in the Automobile Industry, 196–210; and McEvoy, The Fisherman's Problem.
109. McEvoy, “The Triangle Shirtwaist Factory Fire of 1911,” 622-26, 643-48. See also Witt, “Speedy Fred Taylor,” 37-46.
110. Welke, , Recasting American Liberty, 3-42, 112–24.
111. Lurie, “Lawyers, Judges, and Legal Change,” 31-56, especially, 43-49.
112. MacPherson's accident is described in MacPherson (1912); Complaint, 4-6, Records and Briefs for MacPherson. See also Peck, , Decision at Law, 41–42.
113. As a third defense unrelated to the question of defects, Buick claimed MacPherson drove too fast and his recklessness contributed to his accident and injuries. MacPherson (1914).
114. G. W. Durham, testimony, 178, quote, 185, Records and Briefs for MacPherson.
115. Charles Johnson, testimony, 231, quote 254, Records and Briefs for MacPherson.
116. On dealers and suppliers, see MacPherson (1916), 1053.
117. G. W. Durham, testimony, 189-90, Records and Briefs for MacPherson. See also Peck, , Decision at Law, 47–52.
118. E. D. Cook, testimony, 208, Records and Briefs for MacPherson.
119. Each carriage maker began his testimony by giving his age, his years in the business, and his local residency. George A. Palmer, testimony, 50-57, Aldebert Payne, testimony, 57-72, and James P. Tittemore, testimony, 72-92, Records and Briefs for MacPherson.
120. George A. Palmer, testimony, 50-51, quote 51, Records and Briefs for MacPherson. See also Peck, , Decision at Law, 47–48.
121. Payne declared: “I never let a wheel come painted; come oiled so I can see the quality of hickory used. I have invariably examined the wheels used in these various connections, with a view of determining the grades, and knots and defects.” Adelbert Payne, testimony, 56-59, quote 58-59, Records and Briefs for MacPherson. See also Peck, , Decision at Law, 48.
122. James P. Tittemore, testimony, 72-74, Records and Briefs for MacPherson.
123. “Copy of Brief—Livesay Case,” no date, “Statement of the Issues,” 7, Folder 75-37-30, Box 37, Acc. 75, HF.
124. Respondent's Brief, 59-67, Records and Briefs for MacPherson; Adelbert Payne, testimony, 62, Otto Kleinfelder, testimony, 92-94, quote 93, E. D. Cook, testimony, 208-9, Records and Briefs for MacPherson.
125. In his review of the testimony, Peck emphasized that Buick relied on the testimony of a civil engineer, W. K. Hatt, who had supervised the Forest Service's tests of woods used for vehicles. According to Peck, Hatt discounted the carriage makers' knowledge of wood, finding that the critical variable in assessing the quality of wood was a tree's rate of growth as measured by the number of rings per inch. Growth of “five to twenty-five rings per inch” was considered, Peck noted, “good hickory.” Still, Peck omitted a key part of Hatt's testimony. The engineer had agreed with the carriage makers in finding that weight, not just a tree's rate of growth, was an important indicator of strength. His remarks echoed the Forest Service's bulletin: “The best criterion of the value of the wood is its weight.” Moreover, while Hatt asserted the value of laboratory research, he sidestepped the question of MacPherson's defective wheel. The 1908 study (circular 142, which Hatt cited) indicated that defects took many forms. In his 1933 study, Koehler cautioned against using a tree's rate of growth as a criterion for assessing its strength. Peck, , Decision at Law, 48, 50–51; W. K. Hatt, testimony, 101-35, especially 101-8, Records and Briefs for MacPherson; Anton T. Boisen and J. A. Newlin, “The Commercial Hickories,” Forest Service—Bulletin 80 (1910): 64; and Koehler, “Causes of Brashness in Wood,” 11-13, 18.
126. Nelson, , The Legalist Reformation, 105-7, 187–88.
127. “Copy of Brief—Livesay Case,” no date, “Statement of the Issues,” 5-6, quote 9, Folder 75-37-30, Box 37, Acc. 75, HF; and “Points,” 2, Folder 75-37-30, Box 37, Acc. 75, HF.
128. Johnson v. Cadillac; Gen'l Attorney, Ford Motor Company, to Douglas B. Crane, Att'y, May 13, 1916, Folder 75-27-3, Box 27, Acc. 75, HF.
129. According to Gordon, Macaulay and Macneil recognized the importance of “mutual trust and solidarity” for economic development, but worried too that “power imbalances” could result in patterns of “persistent domination on one side and dependence on the other.” Gordon, “Macaulay, Macneil, and the Discovery of Solidarity and Power in Contract Law,” 570.
130. Helper, “Strategy and Irreversibility in Supplier Relations,” 792-99. See also Nevins, , Ford: The Times, the Man, the Company, 220–51.
131. “Copy of Brief—Livesay Case,” no date, “Statement of the Issues,” 6-8, quote 8, Folder 75-37-30, Box 37, Acc. 75, HF; Ford Motor Co. v. Livesay, 901-3.
132. Johnson v. Cadillac. Jain concluded that MacPherson sustained a limited view of the automobile as “a mass-produced consumable and therefore did not press the issue of technical innovation.” In her reading, “the establishment of the National Highway Transportation Safety Administration (NHTSA) signaled a new common sense about the extent to which manufacturers should ensure that their products are crashworthy.” While important safety meansures dated to the 1960s and 1970s, I argue that a web of oversight agencies (public and private) did “press the issue of technical innovation” prior to 1960. The regulation did not focus on the vehicles' overall crashworthiness, but did focus on critical components, such as brakes, bumpers, and safety glass. This is the topic of Part IV. I also argue that regulatory oversight was imperfect and managers made tradeoffs between safety and other concerns, such as the cost of production. Thus, autos housed some old defects and contained new ones as well. Jain, “‘Dangerous Instrumentality,’” 61-62, 75-77, quotes 62-63, 76. See also Eastman, Styling v. Safety; and Gillam, Products Liability in the Automobile Industry, 174-93. For a discussion of regulation in the years since 1960, see Mashaw, Jerry L. and Harfst, David L., The Struggle for Auto Safety (Cambridge: Harvard University Press, 1990).
133. U.S. Federal Trade Commission, “Report on Motor Vehicle Industry,” 22; and Lebergott, Stanley, Pursuing Happiness: American Consumers in the Twentieth Century (Princeton: Princeton University Press, 1993), 130.
134. More than two hundred manufacturers had sold cars in 1910, but by the 1930s the figure had shrunk to thirty according to Daniel Raff and M. Trajtenberg in “Quality-Adjusted Prices for the American Automobile Industry: 1906-1940,” in The Economics of New Goods, ed. Bresnahan, T. F. and Gordon, R. J. (Chicago: University of Chicago Press, 1997), 75. Laird noted the importance of repeat purchases in “‘The Car without a Single Weakness,’” 803-7.
135. Scott Knowles investigated product liability in terms of specific safety institutions, especially the Underwriters' Laboratories, the Consumers Union and Consumers Research, Inc., which published Consumers' Reports. Knowles, “Inventing Safety,” especially 184-290.
136. Walter P. Chrysler created his company out of the ashes of the Maxwell Motor Corporation. Flink, , The Automobile Age, 70.
137. On the number of firms with large labs, see George Perazich and Philip Field, Industrial Research and Changing Technology, Works Progress Administration Report M-4 (Philadelphia, 1940), 66. These topics are discussed in Mowery and Rosenberg, Technology and the Pursuit of Economic Growth, especially 61-79. See also studies cited in note 23.
138. GM claimed seventeen percent of the market in 1911; its share dropped to twelve percent in 1921 and then climbed to thirty-four percent in 1929. U.S. Federal Trade Commission, “Report on Motor Vehicle Industry,” 22, 431. On the size of research staffs in 1927, see National Research Council, “Industrial Research Laboratories of the United States including Consulting Laboratories,” Bulletin 60 (1927), 23, 28, 48. In 1933, Ford listed one hundred researchers. National Research Council, “Industrial Research Laboratories of the United States including Consulting Laboratories,” Bulletin 91 (1933), 74. For 1938 data, see Perazich, and Field, , Industrial Research and Changing Technology, 66, 68.
139. On Kettering, see Leslie, Boss Kettering, especially 91-97, 183.
140. P. S. du Pont, President, to C. F. Kettering, July 19, 1921, File 87-11.7-61, Box 120; P. S. du Pont to C. F. Kettering, October 4, 1921, File 87-11.7-61, Box 120, Charles F. Kettering Archives (hereafter CFK), Richard P. Scharchburg Archives, Kettering University, Flint, Mich. (hereafter KU).
141. Leslie, , Boss Kettering, 183–84.
142. Ibid., 197-99.
143. Sloan, Alfred P. Jr, Adventures of a White-Collar Man (New York: Doubleday, Doran, 1941), 160–63, 185-88; and U.S. Federal Trade Commission, “Report of the Motor Vehicle Industry,” 909-19. For a list of improvements, see G. M. Engineering Staff, “General Motors Developments,” December 10, 1956, File 87-4.19-16, Box 21, GMC/Proving Ground Collection, KU.
144. The Automobile Chamber of Commerce reported data collected by the National Safety Council on accident deaths beginning in 1913. Their figures show a decline from 306.7 deaths per 100,000 cars registered in 1913 to 105.9 deaths in 1926. During the 1930s, the number of deaths ranged from 111 to 144 per 100,000 cars. National Safety Council, Accident Facts, 1933 ed. (Chicago: National Safety Council, Inc., 1933), 34; and Automobile Manufacturers Association, Automobile Facts and Figures, 22nd ed. (1940), 84. By contrast, total accidents soared and were studied by legal realists in Committee to Study Compensation for Automobile Accidents, Report to the Columbia University Council for Research in the Social Sciences (Philadelphia: Press International Printing, 1932). Schlegel examined realists and social scientists in American Legal Realism, 105-14.
145. “Liable, Maker for Car's Defects,” Eastern Underwriter 17 (April 7, 1916): 1, 16; “Maker Loses New ‘Wheel Case,’” Horseless Age 37 (April 1, 1916): 289; Elton J. Buckley, “Manufacturer Legally Responsible for Damage,” Metal Worker 85 (June 23, 1916): 863; and A. L. H. Street, “Liability of Machinery Manufacturers,” Iron Age (January 21, 1915): 222-23.
146. Gillam described the standard warranty, but observed that in all the cases he reviewed automakers had never based their defense on the standard warranty's disclaimer. Instead, they operated within the framework set out by MacPherson. Gillam, , Products Liability in the Automobile Industry, 174–76, 189-93, quotes 162, 191. As I report in the Appendix, many manufacturers had included these warranties since the early 1900s.
147. Gillam cited the case of wheels to illustrate his point, noting that Ford had emphasized nine tests in its 1916 lawsuit. Gillam, , Products Liability in the Automobile Industry,188.
148. E. R. Jacobi, Kelsey-Hayes Wheel Corporation to Nicoll, Anabel & Nicoll, November 16, 1927; Hayes Wheel Company, “Testing Laboratory Some of the Standard Tests” (no date, pamphlet); [illegible] Cahill “Manufacture and Inspection,” November 16, 1927; Edward J. Foley, Wood Wheel Division, Kelsey Wheel Company, “Timber—Source of Supply, Method of Assembling Ford Automobiles,” November 15, 1927; “Torque Tests on Ford Wheels,” (no date ); “A Comparison of Black Primers for Wood Wheels,” Hayes Wheel Company, Laboratory Report No. 3677, April 15, 1924; Laboratory Report No. 3945–6-7, May 14, 1924; Laboratory Report No. 3954 & 3955, June 5, 1924, all in Folder 75-78-5, Box 78, Acc. 75, HF. Gillam makes a similar point in Products Liability in the Automobile Industry, 188.
149. Gillam, , Products Liability in the Automobile Industry, 188.
150. H. G. Weaver, “Tremendous Trifles,” October 12, 1932, 1-2, File 87-11.4-5; Customer Research Staff, General Motors, “Final Report of 1933 Surveys,” November 1933, 29, File 87-11.4-7, Box 110, CFK, KU.
151. Henry M. Crane, “More and Better Friends of General Motors,” Third General Motors Executive Conference, White Sulphur Springs, West Virginia, October 19-21, 1934, 8, File 77-7.4-1.13-1, Charles Stewart Mott Papers, KU.
152. “Product Meeting Held in Styling Auditorium on Thursday, October 16, 1941,” 2-3, File 87-11.4-19, Box 110, CFK, KU.
153. In the case of railroads, Welke wrote: “Technological advances or even simple operating changes could dramatically increase danger or introduce new hazards.” Welke, , Recasting American Liberty, 28. Knowles traced the efforts of the Underwriters' Laboratories and the Consumers Union to reduce new products' risks. Knowles, “Inventing Safety,” 260-86.
154. Upson, Arthur T. and Ericksen, Leyden N., “Wood Requirements of the Body Industry,” Automotive Manufacturer 65 (September 1923): 21–24, 29, quote 23.
155. The test was conducted in 1933. “Hand-Cranking and Carbon Monoxide,” Travelers Standard 24 (January 1936): quote 3-5. See also “Carbon Monoxide in Automobiles,” Travelers Standard 22 (March 1934): 41-52; and Eastman, Styling vs. Safety, 68-69, 177-78.
156. Cadillac and LaSalle were two exceptions. Eastman, Styling vs. Safety, 179-80. For a list of cars using safety glass, see A. M. Wibel to Edsel B. Ford, October 31, 1930, Folder, “Triplex Glass Data Working Papers,” MM-42-G, Box 96, Purchasing—A. M. Wibel, Accession 390 (hereafter Acc. 390), HF. Sloan wrote to Lammot du Pont, “I am trying to protect the interests of the stockholders of General Motors and the Corporation's operating position—it is not my responsibility to sell safety glass.” Alfred P. Sloan, Jr. to Lammot du Pont, April 15, 1932, Defendants' Exhibit No. 353, Deposition, Deft's Exs. #18.3, volume 18, United States of America v. E. I. Du Pont de Nemours and Company, General Motors Corporation, United States Rubber Company, Christiana Securities Company, Delaware Realty and Investment Corporation, Pierre S. du Pont, Lammot du Pont, Irene du Pont, defendants, Civil Action No. 49-C-1017-1, Imprints Department, Hagley Museum and Library, Wilmington, Del.
157. Eastman, , Styling v. Safety, 178–79.
158. “Notes on the Adoption and Use of Laminated Glass by the FMC,” April 12, 1932, Folder, “Data held for Pittsburgh Pate [sic] vs. Triplex,” Box 96, Acc. 390, HF.
159. Knowles argued that during the 1920s the UL acquired considerable scope and became a “‘national laboratory.’” Knowles, “Inventing Safety,” 195-211, quote 197, 219-59; and idem, “Lessons in the Rubble: The World Trade Center and the History of Disaster Investigations in the United States,” History and Technology 19 (2003): 9-28, especially 23-24. The UL was created in 1901 as a nonprofit research organization under the supervision of the National Board of Fire Underwriters, and its activities were described in “The Organization, Purpose and Methods of Underwriters' Laboratories” (Underwriters' Laboratories, 1921).
160. “Underwriters' Laboratories Form Automobile Council,” S.A.E. Journal 3 (September 1918): 240–41; and Small, A. R., “Automobile Locking-Device, Classification and Theft Insurance,” S.A.E. Journal (August 1921): 97–99.
161. Sidney K. Bennett to Ford Motor Company, Attention Mr. Gaston Plantiff, July 11, 1921; W. T. Fishleigh, Experimental Engineer, to Underwriters' Laboratories, attention—Mr. C. R. Alling, May 3, 1922; and W. P. Young to W. T. Fishleigh, May 8, 1922, all in Folder “Underwriters Lab. 1926,” Box 180, Engineering–Dearborn Laboratories, Accession 94 (hereafter Acc. 94), HF.
162. “Standards Committee Division Reports,” S.A.E. Journal 14 (June 1924): 628. See also Eastman, Styling vs. Safety, 12-13, 70–71.
163. “Substitutes for Ash in Automobile Bodies,” S.A.E. Journal 9 (September 1921): 181; and J. A. Newlin and Thomas R. C. Wilson, “Mechanical Properties of Woods Grown in the United States,” U.S. Department of Agriculture Bulletin 556 (1917).
164. American Instrument Company, “The James Brake Inspection Decelerometer” (Washington, D.C.: American Instrument Company, no date), in Folder “Brakes—1926, Ford, 4 Wheel, Misc.,” Box 166, Acc. 94, HF. On the Bureau of Standard's role in developing brake equipment and standards, see “Brake-Performance Studies,” S.A.E. Journal 14 (February 1924): 236–38; and “Braking and Safety,” S.A.E. Journal 16 (January 1925): 19–21. The Bureau of Standards was created in 1901 and employed a staff of approximately 600 by 1917. Its work was described in “The National Bureau of Standards,” S.A.E. Journal 1 (August 1917): 132–39.
165. “Fire Hazards of Automobiles,” S.A.E. Journal 13 (September 1923): 247. Procedures for bumpers were described in Engineer, Casualty Department, to Manufacturers of Bumpers for Passenger Automobiles, May 16, 1924, Folder, “Underwriters Lab. 1926,” Box 180; and M. M. Brandon to Ford Motor Company, Attn: T. J. Little, Jr., November 28, 1925, and “Procedure for Inspections at Factories,” in Folder, “Underwriter's Laboratories,” Box 159, Acc. 94, HF.
166. Underwriters' Laboratories, “List of Inspected Automotive Appliances” (Underwriters' Laboratories, April, 1921); and Underwriters' Laboratories, “List of Inspected Automotive Appliances” (Underwriters' Laboratories, April, 1922), Box 180, Acc. 94, HF.
167. “Improvements made on Ford Cars During the Last Three Years,” March 10, 1923, File 87-11.7-27, Box 119, CFK, KU.
168. W. T. Fishleigh to Mr. Liebold, May 2, 1925; Geo. D. Becker to Ford Motor Car Company, Attention of Mr. W. T. Fishleigh, September 9, 1925; W. T. Fishleigh, departmental communication, December 29, 1925; Geo. D. Becker to Ford Motor Car Company, Attention of Mr. W. T. Fishleigh, September 26, 1925; Geo. D. Becker to Ford Motor Company, Attention of Mr. W. T. Fishleigh, November 17, 1925, all in Folder “Underwriters Lab.,” Box 180, Acc. 94, HF. For other examples, see Knowles, “Inventing Safety,” ch. 6.
169. Nelson, “A History of the Forest Products Laboratory,” 159, 190-92, 205, 217-18.
170. Knowles found that the UL established the arbitration process in its effort to secure its authority in relation to clients. Disgruntled customers who had their goods rejected by UL engineers could appeal to the Bureau of Standards. Knowles, “Inventing Safety,” 241-46. On the SAE, see “Standards Committee Division Reports,” 625-28.
171. By 1921, fourteen states had passed laws for electric lights, and by 1925 forty-five had laws for electric lights. Shanley, James J., “Automobile Head-Lamp Regulation,” S.A.E. Journal 13 (September 1923): 249; and “Motor Vehicle Electric Lighting Laws,” Folder “Laws & Legislation 1926,” Box 172, Acc. 94, HF.
172. W. T. Fishleigh to Attention—Service Manager, June 3, 1922; Electrical Testing Laboratories, “Report No. 37168 Test of Ford Type H Automobile Headlight Lens Rendered to the Ford Motor Company, December 15, 1921; and Bureau of Standards, Department of Commerce, Report No. Tel-33025, “Test of 8-1/8 inch Type ‘H’ Ford Automobile Headlamps Submitted by State of New York, Tax Department, Albany, NY,” [stamped] January 21, 1922, all in Folder “Lights—Lens Ford Approvals,” Box 192, Acc. 94, HF.
173. “Improvements made on Ford Cars During the Last Three Years,” March 10, 1923, File 87-11.7-27, Box 119, CFK, KU. Eastman found that the problem of glare from head-lamps for causing accidents had dated back to the 1910s. Eastman, Styling vs. Safety, 9-11,13.
174. Manager, Washington Branch, to Attention Mr. Fishleigh, June 5, 1924; E. Austin Baughman, Secretary, Eastern Conference of Motor Vehicle Administrators, to Ford Motor Company, May 9, 1925; Frank A. Goodwin to the Automobile Headlamp Manufacturer, May 28, 1925; and Frank A. Goodwin, by A. W. Devine, “Bulletin Electric Headlamp Design and Construction,” November 18, 1925, all in Folder “Lights—Lens Ford Approvals,” Box 192, Acc. 94, HF.
175. Although I do not know the outcome of Hunt's request, what I found important was the way he evaluated GM's options. J. H. Hunt to C. F. Kettering, June 4, 1925, and J. H. Hunt to J. E. McEvoy, December 11, 1925, both in File 87-11.7-136, Box 121, CFK, KU.
176. Frank A. Goodwin to Ford Motor Co., November 18, 1922, and Frank A. Goodwin to The Manufacturers of Trucks, no date [stamped September 9, 1925 and September 18, 1925], both in Folder “Brakes—1926, Ford, 4 Wheel, Misc.,” Box 166, Acc. 94, HF. Eastman discussed safety problems for brakes, including the limitations of hydraulic brakes. Eastman, Styling v. Safety, 2-3, 12, especially 59-61.
177. Frank W. Judson to A. M. Wibel, November 12, 1931, with “Total Replies Received from Ford Owners—3955,” Folder “Pittsburgh Plate Glass,” Box 59, Acc. 390, HF.
178. Eastman, , Styling v. Safety, 178–79.
179. Spence, “Consumer Misperceptions, Product Failure and Producer Liability,” 561. Welke offered an example of the first option in the public safety campaign for traveling on street cars and railroads during the Progressive era. Welke, , Recasting American Liberty, 35–42. For an assessment of market failures by legal scholars, see for example, Croley and Hanson, “Rescuing the Revolution,” 683-797; and Hanson and Kysar, “Taking Behavioralism Seriously.”
180. Gillam, , Products Liability in the Automobile Industry, 117-22, 126-28, 134–35.
181. Gillam noted manufacturers' reliance on products liability insurance in ibid., 193-95.
182. L. B. Robertson, Gen'l Attorney In re: Julius Prezenik, Evelyn Prezenick, July 29, 1916, Folder 75-46-5, Box 46, Acc. 75, HF.
183. Gen'l Attorney, Ford Motor Company, to New England Casualty Company, January 20, 1915, and J. H. H. Liability Claim Department, New England Casualty Company, to L. B. Robertson, General Attorney, Ford Motor Company, January 23, 1915, Folder 75-30-6, Box 30, Acc. 75, HF.
184. See for example, Gen'l Attorney, Ford Motor Company, to New England Equitable Ins. Co., September 20, 1915, Folder 75-38-27, Box 38, Acc. 75, HF.
185. Claim Examiner to L. B. Robertson, Ford Motor Co., December 18, 1916, Folder 75-38-26, Box 38, Acc. 75, HF.
186. E. E. Juntunen, Legal Department, Ford Motor Company, to DeLancey Nicoll, Jr., December 12, 1924; John Vernon Bouvier, Jr. to De Lancey Nicoll, Jr., December 31, 1924; John Vernon Bouvier, Jr. to De Lancey Nicoll, Jr., November 19, 1927; and B. H. McNamara, General Accident Fire and Life Assurance Corporation, to Nicoll, Anable & Nicoll, December 22, 1927, all in Folder 75-78-4, Box 78, Acc. 75, HF.
187. John McTeer Briggs, “Products Liability Insurance” (Ph.D. diss., University of Wisconsin, 1953), quote ch. 1, 2; and M. A. Gesner, “Products Liability Insurance Is Constantly Growing Field; Prospects for This Cover Numerous,” Weekly Underwriter 132 (June 22, 1935): 1239.
188. Cahill, James M., “Product Public Liability Insurance,” Proceedings of the Casualty Actuarial Society 21 (New York: Casualty Actuarial Society, 1934-1935), 26; John M. Parker, “What About Product Liability?” Eastern Underwriter 40 (May 5, 1939): 27; and J. Harry Bibby, “How to Protect Yourself Against Lawsuits when Products Fail,” Sales Management 56 (June 1, 1946): 93.
189. “Big Auto Negligence Suit Against Ford Co.,” Eastern Underwriter 38 (January 8, 1937): 38.
190. Cahill, “Product Public Liability Insurance,” 26-29. Baxter v. Ford Motor Company et. al., 12 P.2d 409 (Wash. 1932).
191. Cahill, “Product Public Liability Insurance,” 28-30; “Demand for Products Liability Constantly Increasing with Many Potential Risks Uncovered,” Weekly Underwriter 140 (June 24, 1939): 1325-26. On the Uniform Sales Act, see also “Products Liability Needs Vigilant Treatment,” National Underwriter 41 (June 17, 1937): 26.
192. This public awareness in all likelihood reflected changes in Americans' attitudes toward corporations and safety that dated to the Progressive era, yet the trade press did not delve into the political or medical context surrounding consumers' lawsuits. For public attitudes about safety, see Knowles, “Inventing Safety”; idem, “Lessons in the Rubble,” 9-28; McEvoy, “The Triangle Shirtwaist Factory Fire of 1911,” 621-51; and Welke, Recasting American Liberty. See also Witt, “Speedy Fred Taylor,” 1-49.
193. Wiggers, L. H., “Products Liability Insurance,” Insurance Series Ins. 3 (New York: American Management Association, 1931), 3.
194. “Products Liability Becoming Big Problem for Retailer,” National Underwriter 40 (June 25, 1936): 30.
195. “Need Hold Harmless Cover,” National Underwriter 40 (May 28, 1936): 32; and Cahill, “Product Public Liability Insurance,” 27. Briggs recalled that hold-harmless clauses reflected the “bargaining strength” of retailers, and that underwriters were “not friendly” toward the agreements. Briggs, “Products Liability Insurance,” ch. 6, 34-35.
196. “Products Liability Sales Is Stimulated by Chain Stores,” National Underwriter 39 (February 21, 1935): 35. On Connor, see “Products Liability Needs Vigilant Treatment,” 26; and Banks, E. S., “A. P. Connor of Phila. Is Nationally Known Products Liability Expert,” Eastern Underwriter 37 (January 10, 1936): 34.
197. John Parker listed among goods subject to chemical tests at Travelers “lipsticks, beer cans, flash bulbs, pop bottles, tear gas, face powders, flavoring extracts, fire extinguishers, liquors, soft drinks, false eyelashes, aspirin, canned foods, tooth pastes, rouge, kitchen utensils, electrical fixtures and candy.” Parker, “What About Product Liability?” 27. E. R. Granniss, “Chemistry and Safety,” The Travelers Standard 21 (August 1933): 146-53. Briggs considered underwriters' research studies standard in “Products Liability Insurance,” ch. 6, 2-25.
198. “Big Field Opened but It Needs Care,” National Underwriter 41 (April 1, 1937): 33, quote 48; and Briggs, “Products Liability Insurance,” ch. 6, 26-27.
199. See, for instance, Lamoreaux, Naomi R., The Great Merger Movement in American Business (New York: Cambridge University Press, 1987); and McCraw, Thomas K., Prophets of Regulation: Charles Francis Adams, Louis D. Brandeis, James M. Landis, Alfred E. Kahn (Cambridge: Harvard University Press, 1984).
200. Kessler, “Automobile Dealer Franchises,” 1135.
201. See for example, Luger, Stan, Corporate Power, American Democracy, and the Automobile Industry (New York: Cambridge University Press, 2000).
202. Swedberg, Richard, “Introduction to the Transaction Edition,” in Essays: On Entrepreneurs, Innovations, Business Cycles, and the Evolution of Capitalism, ed. Clemence, Richard V. (New Brunswick, N.J.: Transaction Publishers, 1989), vii-xxxix. In closing, it is worth noting that, in wanting to explain why accidents mattered to Progressives, McEvoy, Welke, and Witt located cultural ideas about causation, corporate responsibility, and risk-taking. While agreeing with their findings, I studied technological defects associated with a new market. My project follows in the tradition of legal realists' empirical research; my interests are seen as well in “Closing the Deal: GM's Marketing Dilemma and Its Franchised Dealers, 1921-41,” Business History 45 (2003): 60-79. Valuable comments about realists may be found in Daniel Ernst, R., “The Critical Tradition in the Writing of American Legal History,” Yale Law Journal 102 (1993): 1019–76.
Email your librarian or administrator to recommend adding this journal to your organisation's collection.
* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.
Usage data cannot currently be displayed