The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-05-30
new FIRM TO
CONTINUE BOTH
LINES OF CARS
Secret Negotiations Kept
$3.50, 100000 Deal From
Wall Street.
OTHERS MAY BE BOUGHT
Great Consolidation Hinted
to HurI Challenge at
General Motors.

Bp UHitCd Press
NEW YORK, May 3O.-Two weeks
ago, Walter P. Chrysler, former day
laborer, and Clarence Dillon, Har-
ward graduate, were lunching to-
gether in New York. 1t was an in
formal meal and they talked a great
deal about business.
The suggestion was made that
there might be some mutual bene-
At in pooling their resources. So a
few days later they took adjoining
suites in the Ritz Carlton hotel and
discussed the merger plan In more
detail
That is how the biggest automo-
bile deal in the history of the in
dustry was brought about-the alb
sorption by the Chrysler corporation
of Dodge Brothers, Inc, a $780,
100000 merger. The deal was ne
gotiated SO secretly that no news Of
its reached Wall Street.
Dodge, which was bought by
syndicate headed by Dillon, Read
& Co., New York Bankers, in May,
1925. from the heirs of its founders
for $146O00,000, was taken over by
the Chrysler Company on an ex-
change of stock basis. Figured at
market prices, Dodge Motors was
valued at S113,O0O,OOO for the trans
action-$33,000,000 less than was
paid for it.
May Challenge Motors
While no announcement of such
plans were made, it was known that
those heading the merger had in
mind taking over within short
time perhaps other large automo-
bile companies and forming a gil
gantic concern designed to challenge
General Motors Corporation for its
placS, in the automobile field.
CllrNsler will be chairman Of the
merged companies and Dillon OF
Dillon. Read g. Co. will be chairman
of the finance committee.
The taking over of Dodge by
Chrysler will be accomplished by
giving one share of Chrysler for
each share of Dodge preference
stock; one share of Chrysler for
each five shares of Dodge class one,
and one share of Chrysler for each
share of each Dodge class A. and
one share of Chrysler for each ten
shares of Dodge class B. The last
named stock is held by New York
bankers and is the voting stock Of
the company. 1t is not listed on the
Stock Exchange.
Continue Dodge Line
The Dodge line ef automobiles
will be continued.
The taking over by Chrysler of
Dodge is another phase of one of
the outstanding romances of the
automobile industry
Dodge was established about
twenty years ago by John and Hor-
ace Dodge, who originally had been
associated with Henry Ford. They
first had been machinists and be-
gan making motors for Ford. From
that beginning, they made a for
tune, with which they formed the
Dodge Motor Company, and with
drew from the Ford organization.
The company entirely was con-
trolled by them. When they died
it passed to their widows. Three
years ago, two groups of f1nanciers
interested in automobiles sought to
buy it. One was headed by J. P.
Morgan & Co., the other by Dillon
Read. The latter company then
was comparatively obscure.
Record Price Paid
Dillon Read challenged the house
of Morgan in a thrilling series of
maneuvers which ended when they
offered not only more than the
Morgan group would pay for the
company, but offered it in cash.
The price paid was $146,00O, 900, the
largest cash transaction ever re-
corded in banking circles here.
Management of the Dodge COM
pany since has been largely in the
hands of Dillon Read and E. G.
Wilmer as it's active head.
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