Business: Bird Cages to Bankruptcy

Most piquant and persistent of business rumors during recent months has been the one that Postmaster General James Aloysius Farley would shortly resign to head a rejuvenated Fierce-Arrow Motor Corp. Basis for this talk, which Jim Farley never denied, was a Fierce-Arrow reorganization plan proposed last August and approved by stockholders in September, under which the company would raise $10,700,000 through sale of new stock and enter the medium-priced automotive field under the guidance of “a person of national importance.” Last week it looked as though Jim Farley had been saved for the Cabinet, for Fierce-Arrow trustees and creditors sadly obtained from a Buffalo court an order for the company to show cause why it should not be declared insolvent.

Once the most famed of automobile firms, Fierce-Arrow began by making bird cages in 1870. First automobile was made in 1901. By the time of the World War the plant was booming on truck contracts for the Army. The company was bought by Studebaker in 1928, in 1929 had net earnings of $2,566,112. Left a grass widow when Studebaker went into receivership, Fierce-Arrow lost $3,000,000 in 1932 in the face of Depression and better cheap cars. In 1933 a group of Buffalo businessmen paid $1,000,000 for the Pierce plant, tried a $2,300 car (previously Pierces cost as much as $6,400), then trailers. Last summer, when the reorganization scheme was cooked up, the company was at a standstill, with no cars on the line, 25 employes in the factory, lots of red ink in the ledger. When the market crash last fall halted refinancing plans, the company took refuge in a 77^B reorganization to await reviving good times. When the market crashed again last week, Pierce’s 444 creditors were agreed that there was no use waiting any longer.