The New York concern had gambled on electric power. And as late as 1899 it was still undetermined which power source would prevail in the young industry: gasoline, steam, or electric battery-driven. This was a good time to hedge their bets, and they did so by acquiring one more patent that might prove useful if the industry happened to go in an unanticipated direction. In December of 1899 the Electric Vehicle Company bought George Selden's patent on the gasoline-powered "road engine."
Selden did quite well for himself. First, he had delayed the effective date for the patent by 16 years, so as to profit from the anticipated later market boom in production. Filing for the patent in 1879, it would have run its course and expired in 1896 had he not delayed its finalization with 16 years of legal maneuvering and manipulation of the process. So, with the market now exploding, Selden was able to sell the patent for cash and one fifth of the anticipated royalties that were to be collected from other manufacturers.
By 1900 the number of automobile manufacturers was growing rapidly. Selden's delaying tactics in effecting the patent began to bear fruit for the patent's new owners almost immediately. The company brought suit for patent infringement against what was then the largest maker of gasoline automobiles in the nation, the Winton Motor Carriage Company of Cleveland, Ohio. The patent held up in the first round of lower court judgements, and Winton (together with some other top automakers) sought a deal rather than a prolonged legal fight.
By 1903 the deal had developed into a newly formed fraternity of automobile movers and shakers, the Association of Licensed Automobile Manufacturers (A.L.A.M.). Each participating member agreed to pay a Selden Patent royalty of 1.25 percent of the catalogue price on each car they manufactured. Three-fifths of the total went to the Electric Vehicle Company. The remainder went to the A.L.A.M., to be used for further litigation expenses and ostensibly for service to the industry.
That service included a role as a policing agent, to control the proliferation of fly-by-night auto manufacturers who were not accountable, and were tarnishing the overall reputation of the industry by proliferating inferior examples. A number of these cars were of poor quality and unreliable. Many were cars that could not be repaired with replacement parts because the companies were already out of business. These, according to the A.L.A.M., were the companies that would not be allowed into the fold of A.L.A.M. membership, and therefore could rightly be ignored by the buying public. This, the members hoped, would prove to be a substantial service to both the buying public (guaranteeing quality) and to the legitimate producers' reputations. That was the plan. And to a certain extent it was an idea with merit. The picture popular today, which paints the A.L.A.M. as an evil overlord, discriminating against the little guy, is overly colored by the fact that one such "little guy" eventually overthrew the authority of the A.L.A.M.
| Here's the follow-up discussion on this article: | View all related messages |
For a complete listing of article comments, questions, and other discussions related to Dan Cooper's Classic Cars topic, please visit the Discussions page.