Chrysler- ( Dodge) -Dillon

Clarence Dillon and Walter Percy Chrysler were eating lunch at a Manhattan club, some four miles from Wall Street, May made fair weather outdoors. Mr. Dillon had just returned from one of his frequent idlings in Europe (this was three weeks ago) and looked almost robust.

Physically he is frail, and, when working hard, fidgety. The condition is largely the result of an accident a score of years ago. He was on a week-end visit at the country home near Milwaukee of Ann McEldin Douglass, his fiancee.* Mrs. Douglass with the young people was at the railroad station. Along the tracks went an express train, and across the tracks a huge St. Bernard dog. The train batted the huge dog through the air. The dog struck Mr. Dillon in the stomach and knocked him toward a lamp post. On the way he struck Mrs. Douglass and broke her arm. At the post he struck his head. There was a concussion of the brain, fear of a fractured skull, and weeks of convalescence. When he became well he and Miss Douglass were married, and went to Europe for two years ($8,000 railroad damages paid expenses). Although he spends one to three months each year in the woods with his son, hunting and fishing and strolling, he has never recovered the vibrant strength of his childhood in Texas, of his youth in Massachusetts (Worcester Academy, Harvard '05). He still has a bump on his head from that accident.

Walter Percy Chrysler, sitting opposite Mr. Dillon at that mid-Manhattan luncheon, seemed a mighty smith. But when he spoke, his words were as precise, his phrases as concise as Mr. Dillon's suaver ones.

They talked about motor cars. Mr. Chrysler spoke of his four models--the four cylinder Chrysler "52" selling at $670 f. o. b. Detroit, and of his three sixes, the "62" in the $1,000 class, the "72" at $1.545 & up, the Imperial "80" at $3,000 and up. He mentioned the new six, to be called the "De Soto," to be made by a separate corporation; and to be sold for $900. He referred to Dodge Bros., which Mr. Dillon controls; to its "Standard Six" at $875, its "Victory Six" at $1,045 and its "Senior Six" at a minimum of $1,495; to Graham Bros, trucks, which Dodge Bros, also make. He, motor maker, asked questions of Clarence Dillon, investment banker, about Dodge Bros, factories, dealers and finances. Mr. Dillon asked about Chrysler Corp.'s factories, dealers and finances.

Postprandially the two men decided that Dodge Bros, and Chrysler Corp. might in some fashion consolidate to the benefit of their stockholders, employes, dealers, customers.

There followed action of amazing and utterly unprecedented speed. Engineers and accountants for both met the very next week in a Detroit hotel. Before each other they placed statistics and reports on every detail of their respective operations. Great businessmen trust each other in such fashion.

Assaying did not take long; the engineers hastened to Manhattan with analyzed data. Mr. Dillon, solitary in the great silence of his soundproof office downtown, studied them. Mr. Chrysler, less sensitive to racket, studied them at his office in midtown Madison Avenue. When he went to his Park Avenue home four blocks away he was preoccupied, and servants avoided disturbing him.

The two men telephoned each other. They decided to hire a suite of rooms at the Ritz-Carlton, near the Chrysler headquarters. And there for three days and nights they were alone. Waiters brought them food, awed attendants clean linen.

Three days and nights of locked-in deliberations, of matching and sorting Dodge Bros, and Chrysler Corp. assets.

Then decision: Chrysler to take financial control of Dodge Bros, by a trading of stocks; Dodge Bros, and Chrysler to continue separately as motor vehicle makers; Walter Percy Chrysler to be chairman of the directors of the combination; Clarence Dillon to be chairman of the directors' finance committee; Edward G. WTilmer to be president. Mr. Wilmer, by training a lawyer, has been Dodge Bros, president since Clarence Dillon took control in 1925. Mr. Dillon made Mr. Wilmer a Dillon-Read partner. He is a superb executive, the sort of man Mr. Chrysler himself is, except that Mr. Chrysler is also an automotive engineer almost without equal.

Trade Terms. Three years ago Clarence Dillon gave the Dodge Brothers heirs a $146,000,000 check for their property. He quickly sold it to the public for $174,000,000, retaining control. Since then the company has bought back several millions of its own stock from investors. For the property as it is, Walter Percy Chrysler last week paid the equivalent of $170,000000 in Chrysler stocks.

Walter Percy Chrysler is from Kansas.* He was a shop helper; he became a mechanic, a superintendent, a general manager. When William Crapo Durant was first ousted from General Motors control (1911; again 1920) and Charles W. Nash (now chairman of Nash Motors) became General Motors president, Engineer Chrysler became Buick's general manager. He developed the steel body for Buicks; increased the output, cut production costs.

When Mr. Durant went back to General Motors (1916) he insisted that Mr. Chrysler be vice-president. There was a quarrel over policy; Mr. Chrysler resigned. John North Willys figuratively clutched at him to work down Willys-Overland's $46,000,000 bank debt. Within less than a year the debt was down to $18,000,000.

In 1920 Maxwell Motors, which owned the old Chalmers Motors (Hugh Chalmers, founder of Chalmers Motors, is now a Chrysler director) was practically bankrupt. And that was Walter Percy's great opportunity to make the name of Chrysler known wherever wheels can run.

The late James Cox Brady of Manhattan was Maxwell's chief financier. He wanted Mr. Chrysler's production genius. Mr. Chrysler wanted to head a great motor company of his own name. He went to impoverished Maxwell ; cut down its debts ; and in 1925, as controller of the new Chrysler Corp., absorbed Maxwell. Mr. Brady became a Chrysler director; and Jules S. Bache, who heads one of the world's largest stock market brokerage houses. And when James Cox Brady died last November, his brother Nicholas Frederic Brady took over his directorate in the Chrysler Corp. and also his admiration for Walter Percy Chrysler.

Mr. Chrysler always looks a trifle amazed. He has a home on Long Island --at Great Neck. He owns and uses a yacht and several speed boats. His oriental rugs make one of the best collections in the U. S. When he wants something he gets it without ado. So he has a pipe organ at home. To save himself reading labor, he has a paper made up for his private use. It is an expensive clipping of magazine articles and economic reports.

Joint Assets of the two companies approximate $450,000,000. Assets of other motor companies:

General Motors. . $1,098,477, 575

Ford 742,056,110

Studebaker 135,877,946

Packard 61,518,952

Joint Production. Last year Chrysler sold 192,083 passenger cars; Dodge, 205,-260 passenger cars and Graham Bros, trucks. It was a poor year for Dodge: they were changing models; in 1926 they had made 331,764 vehicles. So the current estimate is reasonable -- that jointly they will produce 600,000 to 700,000 cars.

General Motors last year made 1,554,557 cars and trucks, and is making more this year. Ford hopes for a 1,500,000 schedule. Next would rank Chrysler plus Dodge.

Caroms. Caroming off the news of this deal were more or less reasonable theories of other motor deals.

Spectacular was the despatch from Detroit which the New York Herald Tribune printed: "Another report current in the financial districts is that the present move is only part of a larger plan whereby, when the present deal is completed, Chrysler will enter the General Motors Corporation through an exchange of one share of General Motors common for two shares of Chrysler and that Walter P. Chrysler will become president of General Motors." That may be set down as improbable.

Jordan and Pierce-Arrow again were linked in gossip. Both recently have had deficits.

Mack Truck was handed to General Motors by one rumor. By another, Mack Truck and White Truck would join. Another sold Mack Truck to Studebaker.

Hupmobile was William Crapo Durant's. He owns, reputedly, a large block of Hupmobile shares. He controls, too, Durant Motors (Durant and Star cars), Locomobile Co. of America, and more than a year ago he formed Consolidated Motors, Inc. in Delaware, and advertised in 48 newspapers of 29 cities that "exactly as the Buick in 1908 was used as the nucleus and the Keystone of the great General Motors," he intended to use the new Star Six for his new company. Financial writers jeered at Mr. Durant as a stockjobber (TIME, April 18, 1927).

Reo's stock market strength was based largely on the story that Packard would absorb it. Packard was also supposed to be seeking Fierce-Arrow. And Auburn was tied to Gardner.

Stock market trades were based on beliefs that some combinations would attract Briggs Body, Murray Body, Eaton Axle, Stewart-Warner, Electric Auto Lite.

*Her grandfather, Benjamin Douglass, founded R. G. Dun & Co., business statisticians, credit raters. *His old friends of Hutchison, Kan., know him as a ready host and help when needed. Their children attend each other's weddings; the boys get jobs in Chrysler's factories--at Detroit, Dayton, Ohio, Newcastle, Ind. Mr. Chrysler has paid for an addition to the Kansas Wesleyan University at Salina, Kan. In one Kansas city he built five churches.