Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-01-21
SEC Wants
Ford Dealer 10
Explain Gift
By DONALD B. HADLEY

liver three shares Of Ford Motor
Co. stock with every new Mer.
curry sold between now and jan
uary 81 has brought frowns
from both the Securities and Ex-
change Commission and Ford
headquarters in Dearborn, Mich.
The dealer. Grady Motors
Corp, has been told the Ford
Motor Co. does not approve of
this type of merchandising. The
agency also has received a re-
quest from the Securities and
Exchange Commission to explain
details Of its sales gimmick.
M. C. jenkins and Percy P.
Grady, partners in the auto deal
ership, said the firm will go
through with, its offer to car
buyers, convinced it represents
good and not bad public rela-
tons.
They promised to supply the
stock even If 1t becomes neces-
sary to go out on the open mar
ket and buy more than the $50
shares the firm ordered for de-
livery on January 20. They said
that reports they would back
away from their offer were with
out any foundation.
Ford Statement
The Ford statement, attributed
to a company spokesman at
Dearborn and distributed by the
Washington Office to newspapers,
said:
I'VE do not approve Of this
type Of merchandising. We think
it unworthy for a dealer in Ford
Motor Co. products. We have so
advised the dealer in question"
Mr.. Jenkins said the Ford dis
trict manager had called him
and delivered much the same
sort of a message over the tele-
phone.
II gave him all Of my best
reasons why / thought the offer
was good rather than bad for
public relations" he said. Henry
Ford himself wanted this stock
distributed as generally as pos
sible, and most investors were
limited to 100 shares each.
"A lot of Ford dealers resold
their shares on the day of Offer
ing for a comparatively low
profit, and it went back to the
brokers and big investors.
Goes to Little People"
IF we distribute shares to
the people who are going to own
Ford products. / cannot see that
it is harmful to public relations.
I think it is extremely good,
especially where the new owners
will be little people, who normal
| ly might not be stockholders.
Whoever it is at Ford that
is worried by this, they don't like
the newness of it, If it is sue
cessful. maybe they will decide
they like it,"
| Mr.. jenkins said an attorney
for the SEC had asked him to
write a letter explaining the
nature of his offer, how long it
would last and whether it might
be repeated.
II assured him that we had
no intention of going into the
securities business and that the
offer would not be repeated" Mr..
Jenkins declared. I'VE will write
a letter of explanation.
II cannot see that offering
the shares with new Mercuries
is anything like as bad as sell
ing new cars at cost or fantastic
discounts" he continued. I'VE
intend to go through with this"
Offer Through Newspapers
The SEC studied the case fol-
lowing publication of the offer
in Washington newspapers yes
terday. The question is whether
the leadership placed itself in
the position of distributing Sc
jcurities without proper authori-
cation. The SEC win decide
whether it must be registered as
securities broker.
! While the commission may de-
eide the case is not in its juris-
diction. officials were inclined
to toy with the idea that it
might be. As advertised, the
shares clearly are part Of the
total consideration for the pro-
posed sale. said one.
If the SEC steps in. it might
require registration and block
any more advertising until the
registration is cleared. 1t might
also limit advertising to the type
permitted on other securities
and require distribution of the
prospectus to prospective own
iers Of the shares.
Dealers Get First Chance
Around is million shares, or
is per cent of the 1912 Million
share Offering, were sold by I'M
lderwriters to about $500 Ford
dealers and $500 salaried en-
Iployes of the company before
the public sale on Wednesday.
Payment and actual deliveries of
the stock are not scheduled until
next Thursday.
The general public was lin
lited to 100 shares for each in
weston, on a Nation wide basis.
In Washington, most brokerage
houses limited even old Gus
toners to and 10 shares.
The offering of three shares
with each new Mercury. there
fore. created something of a stir
here among investors who have
been unable to buy from their
regular brokers. The stock. Of
Ifered at $64.50 a share, was
quoted on the over-the-counter
market last night at 65A bid
and Sc asked.