winner immediately. He tracked down the manufacturer and, for $1500 he didn’t yet have, bought the patent rights and took in a partner to provide working capital. The company was an immediate success, and, by 1900, Durant-Dort was the largest carriage company in the United States.

Durant was a very rich man, but the carriage business was beginning to bore him. He needed new challenges. In 1900, it was still possible to believe in a prosperous future for the horse-drawn carriage business, but Durant noticed that when he drove an automobile around Flint, he collected a fascinated crowd wherever he stopped. Durant had a self-seller; he just had to make it.

Automobiles had been around since the early 1890s. But they remained largely the product of back-yard tinkerers, most of whom had no conception of what was needed to make a successful automobile business. Durant did: capital and lots of it. He quickly proved as able at selling stock as he was at selling everything else.

In 1904, Durant took over management of the Buick Motor Company, which had moved to Flint the previous year and was in financial extremis. He displayed a model at the New York Automobile Show that year and immediately took orders for 1,108 cars, despite the fact that this was more than 25 times the total number of cars the company had manufactured since its inception. But Durant’s unquenchable optimism led him on, this time to glory. He raised capital by selling new stock to everyone with money in Flint, many of them his friends, relations, and employees. He would always feel a personal responsibility to those who held stock in his companies, an emotion that would one day cost him dearly indeed.

Buick produced 725 cars in 1905, 1,400 in 1906, and 4,641 in 1907. In 1908, Buick, with a production of 8,820, was the number one car company in the country, outselling the second and third companies—Ford and Cadillac—combined.

But Durant was already thinking bigger still. He realized that the future of the automobile business lay in ever-larger size. On September 16, 1908, he founded General Motors, which soon owned or controlled not only Buick but Oldsmobile, Cadillac, Oakland (now Pontiac), and numerous smaller manufacturers as well.

Durant expanded not only horizontally but vertically, buying suppliers of glass, paint, sheet metal, spark plugs, lamps, and numerous other parts that go into making an automobile. Unfortunately he was much better at selling than at buying. Many of these purchases proved ill advised or overpriced, and some were total losses, eating up the company’s working capital. In 1910, General Motors, now vastly rich in assets, had to be rescued from a cash crunch by a syndicate of bankers. Durant lost control to a voting trust for five years, the life of the loan.

The bankers were as unimaginative and conservative as Durant was imaginative and reckless. Nonetheless they much strengthened the company financially by rationalizing its structure and unloading or writing off Durant’s major

mistakes.

In his exile, Durant was hardly idle. He founded another automobile company, Chevrolet, and turned it into a huge success with the Model 490. It cost a little more than the already legendary Model T but offered refinements and comforts that the Model T did not. It was the first instance of the mass-class concept that General Motors would use in the 1920s to claw its way past Ford and become the largest automobile manufacturer in the world.

That year, 1915, was also the year that the voting trust was due to expire, and Durant was working hard to regain control of General Motors, buying GM on the open market and collecting proxies from his many friends. He also induced the du Ponts, wallowing in cash thanks to World War I, to invest. By September, Durant was back in power at GM, naming six directors, while the bankers named six and his ally Pierre S. du Pont named three.

The next year, Durant took complete control when his cash-rich Chevrolet Motor Company was able to buy a majority of GM stock. In the next few years General Motors grew exponentially, and Durant’s fortune grew with it. In 1919, GM had more than half a billion in sales and $60,000,000 in profits, while its work force, expanding explosively to 86,000, turned out 397,000 cars and trucks. It seemed that the sky was the limit. It wasn’t.

In 1920, a short but vicious depression swept the economy. GM common split ten-for-one in early 1920 and stood at $42 at the end of March but began to decline steadily as the auto stocks led the market downward. Durant could have simply waited for the storm to blow over. Instead, responding to some deep psychological need, he obdurately and almost single-handedly tried to support the price. As Alfred P. Sloan put it, “He had about as much chance for success as if he had tried to stand at the top of Niagara Falls and stop it with his hat.”

It was then possible to buy stock by paying only 10 percent of the cost in cash. The broker would lend the rest, holding the securities as collateral. This could be very profitable if the stock went up. But if it went down, the broker would call for more and more collateral and would sell out the stockholder if he didn’t deliver it promptly. By the end of October GM was at $17. By November 10, it was at $14, one-third of its price in April, and his brokers would cut Durant no more slack.

Durant, no whiner, kept his troubles to himself as he maneuvered desperately to stay afloat. But Wall Street has the world’s most efficient rumor mills, and GM’s other major investors, the du Ponts and the Morgan Partners, pressed Durant to tell them where he

stood. Finally, on November 10, he did so, and they were appalled. He had a margin call, due the next morning at the opening market, for $150,000, and he managed, just, to meet it. But the price declined to 13½ that day and triggered an avalanche of margin calls that he couldn’t meet.

Morgan and the du Ponts knew that if all of Durant’s GM stock was dumped on the market, the results would be disastrous for their own holdings and perhaps for the company as a whole. They had to help extricate Durant. They managed to prevent what would surely have been a major panic, but Durant lost nearly all his three million shares of GM stock as a result.

The irony, of course, is that, had Durant only done nothing to support the price of GM, the paper losses would have been made up quickly in the boom of the 1920s. By 1926, GM stock was selling at $210, and Durant would have had, next to Henry Ford, the greatest fortune ever to come from an automobile. As it is, he has only the honor of being, again except for Henry Ford, the most important figure in American automotive history.