The reason for the handshake agreement?

I have heard some people say that Henry Ford entered into the handshake agreement with Harry Ferguson (rather than having his lawyers draft a proper contract) because he was a poor businessman, or out of the goodness of his heart. But based on Ford's prior history of business transactions, I don't think those reasons make sense. He seems to have been a hard-headed businessman who was very dollar-conscious.

My theory is that he did it because he was desperate for draft control as a way to prevent all the "backwards flip" accidents that had been occurring with the Fordson tractor.

I was wondering what you guys think about this.

(quoted from post at 12:01:41 05/22/17) I have heard some people say that Henry Ford entered into the handshake agreement with Harry Ferguson (rather than having his lawyers draft a proper contract) because he was a poor businessman, or out of the goodness of his heart. But based on Ford's prior history of business transactions, I don't think those reasons make sense. He seems to have been a hard-headed businessman who was very dollar-conscious.

My theory is that he did it because he was desperate for draft control as a way to prevent all the "backwards flip" accidents that had been occurring with the Fordson tractor.

I was wondering what you guys think about this.

Click to expand...

think you can speculate forever, or even pick which ever historian's view you prefer, but you can't ask the participants, now. :wink:

Both parties needed each other to make it happen. There was no need to get a bunch of liers I mean lawyers involved. In them days a handshake was as good as your word, a bond between men. I'm afraid a handshake to some means very little these days.

Kirk

Agreed that both parties needed each other but I think a handshake arrangement would better describe the mentality of Harry Ferguson and was something that Ford just went along with. Remember that the Depression was still going on and the 9N was going to be derived from parts made for the truck line. This was a way to extend factory production and therefore profit. Additional incentive existed with Ford as he considered himself as a sort of scion of the agriculture industry. The immense success of the N series made it easy for Ford's successors to maintain interest in the farm equipment business but as profits diminished and other companies grabbed market share these same people lost resolve in terms of making Ford a farm tractor and equipment leader.

Guess we will never know why the handshake, am sure Harry wish many times later he had the agreement written out and signed,
But that is behind us

Their efforts developed a nice little tractor for the masses, I might not have one today if it had not been for their efforts,

I've always thought the handshake deal was mostly a myth. Sure H&H probably shook hands on the deal.
But then both sides had their attorneys work out the nuts and bolts of the deal.
If there was only a handshake Harry wouldn't have had much to present as evidence that Ford had reneged on the deal. The court took several years to sort out who had what. Without a strong case, with plenty of provenance, Harry's heirs wouldn't have prevailed.

When Harry Ferguson first demonstrated his new 3-point lift hydraulic system to Henry Ford in November, 1938, Mr. Ford exclaimed, "...That's IT!!!" Both men, having been farm boys at heart, were seeking ways to improve farming and yes, the issue of flipping over was foremost on the minds of them and their engineers. Henry Ford wanted to buy the Ferguson system outright but Harry declined. Henry Ford despised lawyers, wanted nothing to do with them, or patents, which may have come back to bite him the butt later since Ferguson was a shrewd man and applied for and got most every patent on the 9N as they came up. The handshake agreement was real, and only the two men knew exactly was agreed on when they shook hands that day at Fair Lane. The basics were that Ford would build the tractor and Ferguson would handle distribution and implement procurement. Both men benefitted mutually in this partnership, but after a short time Ferguson got disgruntled and greedy and started shopping around for someone to build his own tractor. No doubt they needed each other and made each other millionaires though Ford already was one, Ferguson was dirt broke having invested all of his money into in the demonstration at Fair Lane, a huge gamble that fortunately worked out. Ford loaned him a cash advance to get set up at the Rouge in Dearborn as the Ferguson-Sherman Mfg. Co. Detroit, MI.

[i:654c4848f0][b:654c4848f0]<font size="4">Tim *PloughNman* Daley(MI)</font>[/b:654c4848f0][/i:654c4848f0]<table width="100" border="1" cellpadding="0" cellspacing="0" bordercolor="#000000"><tr><td height="25" colspan="2" bgcolor="#CC0000"></td></tr><tr><td> </td><td></td></tr></table>

ancient history.

Bill,

My initial impression of the handshake agreement was and continues to be, that there was an instant kindred spirit connection between the two men, a mutual respect for accomplishments and a subsequent trust all of which they decided to
both honor and celebrate or demonstrate with an honorable handshake.
must be true because the world didn't hear of ongoing discontent and animosity between the two men over the years.

Neither Ferguson nor Ford had any doubt that Ferguson's Three Point Draft System
was an incredible invention and no doubt the greatest tractor invention of all time.
As Ferguson said to Ford, no amount of money could buy my invention (paraphrased) so he obviously knew how invaluable it was and that it was his proudest achievement.

This is where the injustice enters in, not from Ford himself but Ford's son.
Ferguson was made to fight Ford for what was rightfully his, and to settle for terms determined by courts.

The Three Point, Draft and Hydraulic system patents, were essentially leased to Henry Ford via the handshake agreement and full rights should have immediately returned, lock stock and barrel, to Ferguson when that handshake partnership was dissolved.

Terry

Link: Ford N Series Tractors And The Handshake That Changed Farming Forever

It's a bit of a long read, and probably still doesn't answer the question of 'why the handshake.'



es

Good read, Ed....thanks for the link.

Hi, Ultradog, and thanks for chiming in.

I must respectfully disagree with you, though. I don't see how the handshake agreement could have been a mere myth when it is estimated that, due to the oral nature of the agreement, Ford had to pay Ferguson approximately $5 million more than he would have paid under a normal written contract; i.e., Henry wouldn't have paid the extra $5 million unless he thought there was a good reason for doing so.

If you all ever get to Dearborn MI
Make sure you drive over to the Henry Ford Estate,Fairlane.
This year they are celebrating the 100th year of the Fordson Tractor
Its a nice place to spend a few hours.