On Detroit's tree-shaded Grand Boulevard stands Henry Ford's own hospital, famed for its skillful surgeons, its spacious research laboratories. But when ailing Edsel Bryant Ford stepped through its doors seven weeks ago with his quick, springy stride, nothing could be done for him. So, at 49, Edsel Ford returned to his sprawling grey stone house beside grey Lake St. Clair to await death. Last week it came.
Seven weeks is not long to condition the greatest private industrial empire in the world for the loss of its titular head. But there had been more time than that. When Edsel Ford underwent a major operation 16 months ago, he must have known his days were numbered. But were even 16 months time enough to adjust the empire to the shock?*
Only one man could finally answer that question—and he was tight-lipped with grief. But there are few problems Henry Ford has not foreseen. Wall Street, which Henry Ford hates obsessively, rubbed its hands at the prospect of enormous fees if the family-held stock should be sold to the public in order to pay astronomical inheritance taxes. But Wall Street rubbed its hands too soon.
The Problem. Of the 3,452,800 shares of $5 par value stock of Ford Motor Co., Edsel held 41.65%, his mother held slightly more than 3%. Henry Ford held the remainder, in iron control of the company, which is valued at $718,000,000.* If this valuation were accepted by the Federal Government for tax purposes (though it might be higher or lower) the tax on Edsel's holdings could be roughly computed at 75%, or $225,000,000. The plain fact is that there may be enough liquid assets in the Ford empire to pay even this enormous tax. In December 1941, the Ford Motor Co. set liquid assets, cash, bonds, etc. at $230,580,916. This money could be used for taxes if it were loaned to Edsel's estate, used to purchase Edsel's holdings or distributed in dividends. But any such method would leave the Ford empire short of cash.
One possibility loomed larger and larger. Suppose a way had been found to avoid paying the staggering inheritance taxes?
Set up with fanfare in 1936 was the Ford Educational and Charity Foundation. Into it both Henry and Edsel dumped blocks of nonvoting Ford stock. † The Foundation was ostensibly organized to finance Greenfield Village. Henry Ford Hospital and various other philanthropic projects.
The Solution? If Edsel's holdings of nonvoting Ford stock have been—or are to be—transferred to the charitable Ford Foundation to "help people to help themselves," both the inheritance handed down to Edsel Ford's heirs and the estate taxes would be much reduced. Only the shares retained would be taxable. True, millions upon millions would pass forever from the Ford family. But the family has always regarded money as only a handy tool. Control of the empire is what matters. To keep control, the loss of hundreds of millions would be considered a fair trade.
But in the shock of Edsel's death, the plight of the empire will still be critical. It may not stand the shock of another death. Average U.S. life expectancy is 61 years; Henry Ford is 79.