The Detroit times., 1917-11-01
DODGESARE
vICTORS IN
FORD SUIT
$30,000,000 Must Be
Distributed, Judge
HOSmer Rules
SHELTER PLANT
GOES UNDER BAN
Company Can't Use
Money For This Pur-
pose, Court Holds

pose, court Hobs
The Ford Motor company must
distribute approximately s3o.ooo0oo
In special dividends and must aban-
don its plans FOR erecting a smelling
plant ON M. River Rouge under a
decision rendered by Judge George
5 Hosmer OF the Wayne circuit
court, wednesday morning in The
famous Ford Dodge suit
While this is a temporary victory
for The Dodge brothers. John = and
Horace T.. who. tho now manufac-
turing car in competition with the
Ford siill retain their stock in the
Ford company. the end OF ne litisa-
tion is stu far away
I'VE shall take rho case 20 the SUI
preme court immediatcly.' said Al
fIcd I.ucking counsel Tor the Ford
interests. after hearing the courts
decision
The decision. in the opinion OF To-
gal experts. is "A blow NOT only 90 The
expansion plans az the Ford Motor
company but 20 at the large corpO-
-rafions en- The state II sustained.
10 means that no corporation can ac-
cumulatr capital assets IN excess Of
s5O00 900 the limitation now fixed
by The legislature. n there is an OBJ
lection on no part OF the state or
any stakeholder
n docs NOT follow from The deci-
sion. that work on The meiior plant
AZ the Rouge viii De- stopped or the
project abandoned altogether Pend
ing The outcome of thc suit The court
ncrmitt "a the work to continue an
dor p bond OF several million dol
lars. PIT up by Henry Ford person
ally Under This bond Mr Ford per
sonallv Is obligated 20 take over tho
project In the event % An adverse
decision
J, is understood that tho work
now under way Will be completed
but the operations ~ the plant Will
b. greatly curtailed Instead OF sup
plying both The Ford motor plant
and the Ford tractor works the
smelter. under the circumstances.
supply only the latter
The decision IN no Way affects the
additions Go tho Ford Motor plant
in Highland Park. now under way
which viii practically double he ca
paciiy ~ the plant
The substance ~ Judge Hoemor's
decision ls that both me accumula-
ton OF surplus dividends In excess
of the capital stock limitation OF
$4,000 600 and The Ford Iofo-
company action IN attempting 90
engage In me 7meiiing business are
in violation OF the general corpora
ton law In tho latter instanca tho
mining and smelling act also Is vio-
lated. he court holds
The $50 600 600 ordered distributed
by the court is approximately 30 per
cent Of The profits for the fiscal yror
ending July 81. 1876 and is all the
Dodges asked 20 have distributed IN
their bill Of complaint, filed Nov 4,
1916 but this distribution ~
course. viii he held up pending an
appeal ON this point the court had
this 10 say
ut H. not 20 hc understood that
an order viii be- entered that there
shall b. AN immediate payment al
the so per cent dividend Doubtless
counsel can arrange by agreement
for time or times OF payment. II
not. The cour- will settle a decree In
the usual manner and, II necessary.
hear testimony
In his opinion, Judge Hosmcr do
votes several pages 10 a review 81
tho facts and the events leading up
10 tho fling OF thr bill. as already
published Then ne discusses the
question Of whether the Ford Motor
company constitutes "a monopoly. as
Contendcd by the Dodges lie holds
that tho evidence submitted does not
present a case within The sherman
act
Tho essence ~ the Sherman law
is The preservation of competition
he says. and IL cannot bp that
corporation which has grown rich
thru compliance with the spirit ~
the act can become malefactor be
cause BE- seeks 20 carry competition
10 the very end Experience has
shown that price cutting and too
great competition may bring evils
ia their train. but ~ confer on a
court the arbitrary power which
must of necessity follow the con
struction contended for by complain
ants. Is 10 invite fas worse conse-
quences."
After going deeply into The history
Of legislation affecting corporations.
eliminating IN the passage oi the
general corporation act as ~ now
stands. Judge Hosmcr continues:
let us consider what necessarily
follows the construction 80 defend
ant's counsel let us ASSUME that
John Doc has machine superior 60
the Ford that can Doc produced as
cheuply III capital can he srrurrd hn
cannot. if counsel e view ~ thc policy
~ tho state ta rirhf form "a con pnra
tion and call Co. hla nld more than
fraction ~ the capital OF the Ford
Motor Goo. uutil ~ is earned fn fhf
courFe ~ lts business SO matter what
tho demand for his machine may ho
NJ matter hnw efficient. Doc iq NOT lI-
lowed to compete un even terms with
thr Ford Motor company until tc has
Fecunlulatrd profits which, shH
tuualiz0 the dlffercuer ~ To- fo POO
supposed. whore unrestricted rumpr
flflnn ia The purpose Ui tho law. such
advantage are tn he held thr priv.
ilcRc ~ ono company over another
The foundation of Our institutions Is
euuHlltY before The law CofpOrn-
finna fu Michigan are formed uudrr
should Dee the privilege of 1ll 0f the
..I. rnIrN ..H I'd H.f