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Chapter 28 The Case Against Tucker Book: The Indomitable Tin Goose Subtitle: The True Story of Preston Tucker and His Car Author: Charles T. Pearson Publisher: Abelard-Schuman Year: 1960 |
28 THE CASE AGAINST TUCKER
PROSECUTION of Tucker was based largely on the “secret and confidential” SEC report which was disowned by the prosecution itself, and was described in court by a U.S. attorney as “wild gossip, conjecture, opinion, you might call it almost anything ... it is entirely hearsay.”
Yet that report was the beginning of a myth which persisted and grew after the trial was over. Like the report, the myth is a fantastic and unbelievable mixture of accusations, exaggerations, half truths and lies, magnifying Tucker's mistakes and ignoring his very real accomplishments.
In the opinion of many it was the automotive industry that was behind the powerful combination of forces which put Tucker out of business. Yet there was never proof, and if there had been it would have been too late to repair the damage to Tucker. The immediate cause of his collapse was the government itself, yet it is the business of SEC to investigate corporations, and the responsibility of the Justice Department to prosecute where wrongdoing is charged.
There were men in government who overstepped their authority, and by the record broke their own laws, to finally destroy Tucker's enterprise. Yet the defection of a few officials cannot be used to indict government itself. Nor can laws be condemned because on occasion there is distortion in their enforcement to cause injustice.
Tucker himself shouldered part of the blame, admitting after the trial that he had made serious mistakes which left him vulnerable to attack. To a degree he accepted fouls as part of the game, and he acknowledged that government is like business on a bigger scale, with ideals and obiectives temporarily in the hands of individuals.
But at the time, to Tucker, the SEC was an enemy agent trying with all the resources of government to discredit everything that was being done to promote the automobile.
It was SEC's contention that Tucker had sold both stock and franchises by misrepresentation, and that dealers had been told the car was already engineered and ready for production.
To build up its case the Chicago SEC office sent out teams of investigators. Few if any of these had any knowledge or experience in the automotive field, but all were armed with a list of questions prepared by the Chicago office.
Two investigators from the Fort Worth regional office interviewed dealers in Dallas. A microphone had been concealed in the office, and in another room a commerical recording firm transcribed the entire interviews. In the background are sounds of hammering, automobile horns, telephones ringing and people knocking on doors. And in the records is convincing evidence of SEC's single-minded determination to destroy Tucker. Because none of the testimony favorable to Tucker, which unquestionably was duplicated in interviews across the nation, could be found in the final SEC report.
The story of one dealer who bought a franchise, as recorded in one interview, is generally the story of most of the Tucker dealers—they read or heard about the automobile, they got in touch with Tucker or his associates, and bought a franchise.
“Their whole story as far as the franchise was concerned,” one dealer told an investigator, “was that if, as and when they ever build automobiles on the basis which they expected to build, that for the town I live in they had set a quota of 50 cars.
“However, there was no guarantee that I would ever receive these cars at all, not even one car. In fact, the expression was used that it was strictly a roll of the dice, that if they build cars why we'd probably roll the seven, and if they rolled craps we'd just crap out together. That if cars were made that it would be just as much of a risk as rolling the dice, because if they ever built cars we would probably make money together, and if they never built an automobile, all I bought was this piece of paper here called a franchise.”
Excerpts from the recordings show some of the answers which SEC ignored when its final report was written. It was during the Texas State Fair that one dealer told how the car performed:
“We drove this automobile that we have down here from Chicago and it's terrific. I had occasion to be in Chicago the other day and of course I went out to the factory and was talking to one of the officials there. He said: 'Well, come on now, give us the facts as you see them. We think we've got something that is dynamite, but what is your honest opinion?'
“And I told him just this—that this car is remarkable. It is an amazing automobile. It performs better than any car I have ever had the pleasure to drive, and as far as I am concerned, this was it. This car could be merchandised just as fast as they could turn them out. They wouldn't have to make any changes. We didn't have a bit of trouble coming down, we got remarkable performance on it and I swear it's something ... that it's difficult to believe. It's like a dream car. This car, it's just terrific and as I say, I am not a novice in the automobile business.”
The dealer was asked about the report that the car wouldn't back up, and he said they had to prove that it could at every service station where they stopped. The investigator asked about gasoline mileage, and he answered: “We figure something like 22 miles to the gallon all the way down, and sometimes we were getting almost 30 miles to the gallon.”
The questions returned again and again to the hydraulic torque converters, which the SEC man kept calling “conversions,” to disc brakes and fuel injection. The Texas dealer was getting fed up, and asked the SEC man if the commission had anything to do with newspaper and magazine stories that the Tucker wasn't a legitimate car and had an Oldsmobile motor in it. (The October 25, 1948, issue of Newsweek carried a story on stockholder and dealer suits featuring two widely publicized reports: that the first Tucker Torpedo was actually a hand-reconstructed Oldsmobile, and that Tucker “used company funds to buy a home near Bogota, Columbia.”)
The SEC man was outraged and said: “I tell you and you can take this for granted: that the SEC has never and never will, is not now and never will, issue any statements to the newspapers about this Tucker car or any other investigation until its case is concluded, until it has all the facts, until it is ready to proceed in court.”
If the Fort Worth SEC man passed the Texas dealers' comments on to the Chicago office they were ignored. because none of the interviews made in Dallas were in the SEC report.
However, the report repeated and amplified accusations that the first experimental model—the Tin Goose—was a rebuilt Oldsmobile. Page after page of figures and tables showed how Tucker had profited personally by $750,000, and others had clipped the corporation for another million. And it was here that another lie, widely publicized by SEC, originated, and finally became part of the Tucker myth:
That “actually, Tucker had not contributed one penny to the enterprise.”
SEC claimed that when Tucker blamed his major troubles on the government he was overlooking his own mistakes, which might have been valid if it hadn't been for the government's treatment of Kaiser-Frazer under similar—often identical—circumstances.
The most widely accepted explanation for the relentless campaign against Tucker was that the commission had burned its fingers on Kaiser and wasn't taking any more chances. Kaiser's first offering in 1945 had been cleared in a single day and was sold largely on Henry Kaiser's personal prestige and early publicity, which announced a revolutionary low-price “peoples' car” with front drive and torsion suspension.
Long before Tucker was even indicted, it was public knowledge that Kaiser had failed to reach any of his announced major objectives. Kaiser-Frazer stock never paid a dividend, yet when the company failed there was no public investigation of what Kaiser had done with $54,000,000 of stockholders money, why he needed more money, or where the car was he had promised when he sold his stock.
While Tucker was being tried, Kaiser applied for and got a heavy RFC loan to develop and tool new models, including one to sell for “less than the present low priced models.” Senator J. William Fulbright of Arkansas protested that Kaiser had been promising such a car ever since he set up shop, but RFC brushed him off. Another whopping RFC loan went to finance Kaiser dealers who could no longer get money from finance companies and banks, and there wasn't an audible protest from SEC.
Without departing from the Tucker story for the sake of a long dissertation on Kaiser, it seems only fair to make a few comparisons, and the first logical one is publicity, which was the chief basis for the government's case against Tucker.
Tucker's early publicity was modest compared with Kaiser's opening splurge, which was handled by Carl Byoir & Associates. An early release announced “Torsionetic suspension, an entirely new development,” on all four wheels, yet Kaiser ended up with coil springs in front and leaf springs in the rear. Kaiser first announced a front-drive car to sell for $500, but before the deal was even well started it was announced the $500 car was out, but the Kaiser “Special“ would sell “well under $1,000.”
Byoir was still stoking the fire when Kaiser sold his second stock issue in 1946, displaying two hand-built front-drive cars in a lavish show at the Waldorf, complete with dinner music, models and movie stars. Salesmen took 467 orders for new cars in the first two hours and 1,000 the first day. Engineers said in tests the front drive experimental cars were failures and—like the Tin Goose—were abandoned.
Succeeding releases in newspapers and automotive and science magazines showed details of the new suspension system, and told of new engine designs which would make the Kaiser an entirely new car. What Kaiser ended up with was nothing more than another automobile—what in an earlier era was called an “assembled car,” when almost anyone could become a manufacturer by finding sources for his parts, building or having a body built, and putting his emblem on the radiator shell.
Even the long promised low-priced Kaiser finally turned out to be the “Henry J,” which was no more than a Kaiser-designed body and frame, with standard parts and a Willys engine. Kaiser's ultimate collapse was in the cards when he switched to conventional design, which Tucker had insisted throughout could never compete with established manufacturers.
If Kaiser had been indicted because the car which sold his stock wasn't the car he finally built he might be in jail yet—if SEC had been as tough on him as it was on Tucker.
Like Tucker's first “589” engine, Kaiser's various experimental engines apparently didn't make the grade, because he bought the Continental engine plant in Detroit, just as Tucker later bought Aircooled Motors. The main difference was that Tucker got an engine which performed, while the Kaiser engine was obsolete before he started. SEC never explained why it was O.K. for Kaiser to buy an engine plant, but wrong for Tucker.
When Tucker was charged with fraud in selling his stock, Kaiser had admitted buying $2,500,000 worth of his own stock when a third issue was offered in 1948, trying to bolster a sagging market. There was a minor rhubarb at the time, but SEC did little or nothing about it, perhaps figuring Kaiser had squared accounts when the issue fell flat on its face and he was stuck with 186,000 shares of his own stock.
The SEC was quick to follow up Ferguson's charge that Tucker was a crook because he hired some former War Assets people. Yet there was no great excitement when, about the time Kaiser bought Willys, John W. Snyder, former Secretary of the Treasury, went with Willys as vice president nine days after leaving his job with the government. One senator charged Snyder was among “former government officials who, in their official capacity, failed to adequately protect the government's interest,” referring in part to the many huge RFC loans made to Kaiser. But SEC didn't follow it up, and the Justice Department didn't charge in and call a grand jury to hear the evidence.
The Tucker car, said SEC, was “an untested, unproved conglomeration of highly questionable engineering ideas,” yet it is probable that any one of the fifty Tuckers would outperform the last supercharged Kaisers built in 1954, six years later.
What are the real facts in the government's case against Tucker? When the SEC called the Tucker car a “monstrosity” was it willful distortion of fact, an honest mistake or only a difference of opinion?
One section of the report listed all the design features which had been publicized since Tucker first announced his new automobile. It was true some of the features had been abandoned; some were believed impractical, not developed far enough, or too expensive for production.
But the report lumped them all together with a paragraph which said: “Convincing proof that each and every one of the foregoing representations was false and misleading...,” and among the “each and every one”were the following:
Rear engine. 166 horsepower, flat opposed 6-cylinder engine located below the level of passengers. More power for the weight of the car than any volume production engine ever built. This was true and could not have been disproved by any automobile authority in the world.All four wheels are independently sprung for more safety and comfort. This was not a matter of opinion; it was fact that could have been verified by any teen-age hotrodder.
The driver's seat is in the center, with the first real provision for seeing out since dashboards were given back to the carriage makers. The same paragraph said Tucker would move the steering wheel to its accustomed place on the left side if people wanted it there.
The engine can be taken out in thirty minutes by a mechanic who hasn't one hand tied behind him, Tucker says, and in ten minutes if he is on piece work. In a demonstration at the plant three mechanics took the engine out, replaced it and the car was driven away in 18 minutes.
Driving lights mounted on the fenders will follow curves in the road, while a fixed Cyclop's Eye center light directs a beam straight ahead. The lights were reversed, with the center light turning and the fender lights fixed, but the result was the same.
The laminated glass windshield is enclosed in sponge rubber, too, and mounted so that a hard blow from within will eject it in one piece. This was demonstrated in an unscheduled accident when Eddie Offutt rolled over during tests at the Speedway.
A husky 24-volt electrical system, with capacity for any emergency, is the same type used on war planes. Tucker finally had to settle for six volts because even 12-volt accessories weren't available, but within a few years the entire industry went to 12 volts.
The Tucker 48 will be the latest in driving simplicity, with no controls in the floor except the brake and foot throttle. This was true with the automatic transmission, which was planned for production.
The Torpedo is designed to cruise continuously at 100 miles per hour and will do 130 or better. The Tucker was proved repeatedly to cruise easily at 100 and had been unofficially clocked at well over 120.
To Tucker these charges were so ridiculous that he wouldn't even discuss them. During the trial a former associate ran into him one night at the Illinois Athletic club and asked him what had happened, what went wrong? He said Tucker told him:
“I tried to build it too big and too fast. And I took the advice of a lot of old men.”
Long after the trial, when enough of the missing pieces had been found to put the picture together, Tucker had another answer which, while it didn't change anything, made him feel better over what had happened to his stockholders and dealers. He said:
“We were jobbed.”