The Canadian behind Henry Ford
It was James Couzens, of Chatham, Ontario, who built the Ford company while Henry built cars. It was Couzens who rammed the famous five-dollar day past Ford’s protests. Here is his little-known story
Among the handful of men who can be credited with launching or triggering the staggering industrial development of North America since the turn of the century the name of James Couzens is seldom, if ever, mentioned.
Among the handful of men who can be credited with dreaming up a social revolution that swiftly reached down into the lives of all employees of all businesses on this continent the name of James Couzens is never mentioned.
Yet this paradoxical man from Chatham, Ont., deserves a special place in both these uncrowded halls of fame.
His astute ebullience led him, in his late twenties. to team up with Henry Ford and quickly become the guiding genius of the company that gave America and the world the blessing—despite associated faults—of mass-production and
the assembly-line technique. The paradox lay in the fact that it was this same mind fretting about laid-off workers that dreamed up the idea of the five-dollar eight-hour day. The minimum wage was then, in 1913, $2.34 for a nine-hour day. Ford suggested $3 a day. Couzens demanded $5, or nothing. His victory in the boardroom cost the Ford company $10 millions in 1914 (which it speedily made up) and set echoes rolling throughout the whole economy.
Right up to a few days before his death in 1936 Couzens remained a man marked by an obscure destiny to be out of step with, or a step ahead of, his fellows. He quit Ford in 1915, when they were in effect partners, on a matter of conscience: he would not tolerate Ford using the company to spread pacifist propaganda. A renegade multi-millionaire, he was feared if not hated by most of the members of his financial class. He became Detroit’s commissioner of police, mayor of the city, and finally a Republican senator. His last act, when already dying, was to endorse Franklin Roosevelt for president. The Democrat, Couzens felt, was the best man to lead the country in the war that already loomed.
Here, then, is the story of Couzens’ stormy decade with Ford, from its inauspicious beginning to the morning in October 1915 when Couzens jammed on his black derby and stamped out forever. It is also, in microcosm, the story of the decade that set the pattern of our times.
It was Couzens’ meeting with Henry Ford in 1902 that first set the ball rolling. At that time the young Canadian was chief clerk in the Detroit coal yard of Alex Y. Malcomson. Ford had already failed twice in trying to get his horseless carriage on the roads,
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The Canadian behind Henry Ford
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Couzens wanted money to invest in Ford. "No!" his tyrannical father cried - and lost millions
Malcomson decided to back Ford for a third try but had to keep the deal a secret—his credit would have suffered if it vere publicly known he was backing anything so risky. He put the necessary funds in a bank in Couzens’ name.
Malcomson also assigned to Couzens the duty of checking up on Ford's expenditures. “As Ford’s bills piled up and finally went over the three-thousand-dolhr limit we’d previously agreed on. I warned Malcomson many a time,” Couzens once said. Before long, Couzens was so much a part of the project that Malcomson brought him into most of the negotiations for getting cars produced.
He was no passive onlooker. This came out explosively at a meeting with John and Horace Dodge. These brothers, later to be famous as car makers in their own right, owned a machine shop and were brought in to make the chassis for the Ford cars, as they were already doing for Ransom E. Olds. At a session with Malcomson, Ford, and Couzens, John Dodge asked for certain provisions ia the contemplated contract.
"1 won’t stand for that!" Couzens declared.
Not many persons had ever dared to talk that bluntly to muscular, brusque John Dodge.
"Who in hell are you?” demanded Dodge.
“Couzens is my adviser in this,” Malcomson told Dodge.
Beg, borrow or steal
By June 16, 1903, the project had become too big for Malcomson to back alone. The Ford Motor Company was incorporated. Two days later the twelve stockholders held an organizational meeting at the Russel House, a Detroit hotel. Couzens held the smallest interest of the twelve.
He had told John Anderson, a young lawyer who was one of the other Ford backers, that he intended to "beg, borrow or steal” all the money he could, to be well represented in the venture. But from whom? His bank account held just four hundred dollars.
His wife’s mother had a nest egg of $15,000. He talked with her about a loan of a size that would have made him one of the biggest investors of all. There was a family meeting on the question. She hesitated, for she recalled "Jim’s icebox failure,” an earlier losing venture with Malcomson.
In the end, however, she agreed to a loan of some size, but suddenly, at that moment, he decided that he could not bring himself to borrow from his motherin-law after all. He simply could not be beholden to her in that way.
Instead he retraced his steps to Chatham. He knew that, like his mother-inlaw. his father had a nest egg, though not as much as $15,000. The elder Couzens, then proprietor of a small Chatham soap factory, had left far behind the days during James’ childhood when he was a dollar-a-day laborer. But he quickly and tartly demonstrated that he had no intention of parting with any of his funds, not even on a loan, for any such foolish enterprise as his son described to him.
“You should not even invest your own money!” the elder Couzens exclaimed.
This was an echo of Couzens’ boyhood. Toward his first son the father was
strangely tyrannical and given to curious displays of the most violent temper, slapping and whipping the boy frequently. Couzens recalled later. "1 have been panned ever since 1 was two years old.” For such conduct on his father s part
there was seldom any realistic reason. For by no standard was the boy a delinquent. On the contrary, he was respectful to a fault and almost always obeyed to the letter any instructions given him by either parent, even though he once
said that all his life he felt an “unjustifiable resistance to people making me do things." He thought he kept this "resistance" concealed, but apparently not so well concealed that his father did not suspect and resent this streak in him.
It is clear that there was involved here an unusually strong case of tension between father and son. No doubt the elder Couzens never understood the cause of his flare-ups (significantly confined to his firstborn son). Nor was he able to restrain them. No doubt, too, just as lacking in understanding about the anxiety produced in him by his father, the boy often provoked the outbursts of "tyranny" without realizing that he had done so. But whatever the cause, the disturbance was certainly there, with all its consequent conflict.
Inevitably this childhood was to produce a defensive as well as aggressive youth, one destined to be in an almost constant state of resistance to most forms of authority, real or fancied. This side of his nature once came clearly into the open at school when, on very slight provocation. he yanked at the beard of the principal, getting himself suspended for the offense. He himself later said that he guessed he did that because the principal's beard represented authority to him.
During the summer after he had completed primary school, when he was only twelve, he saw' a want ad for a bookkeeper in a flour mill. He applied for it, although, as he later admitted, lie knew nothing about keeping books. Incredibly, he was given the position.
His father was not at all happy over this developmentThere was an emotional scene. But he took the job at the mill. He tackled it as though he really were qualified, and soon announced that bookkeeping was to be his career. Moreover, he said, he had no intention of going on to high school.
His ego took a severe knock when he lost the bookkeeping job. His employers concluded, after all. that he was too young. Then, after he decided to enter high school, he failed to pass the entrance examination. His father w'as irate and heatedly ordered him to get back to the soap works, where he had worked for a short time after leaving public school. Instead he boned up for another try at the entrance examination and this time he passed.
At high school he was more studious than he had ever been before. He spent less time idling with other boys in Chatham's Market Square. He had not liked the taste of failure. He swore that it would never happen to him again. After two years at high school, he enrolled for a two-year course in bookkeeping at the Canada Business College in Chatham. To pay his way he worked as a newsbutcher on the Erie and Huron Railway.
The combination of Couzens’ hustler instincts and his uneasy relations with his father made it unlikely that he w'ould long remain in Chatham. He was destined to leave home as soon as he could. Only then could he—or his father and mother — have any real peace in the household: this was understood, though never expressed in so many words, by all three.
This, then, was the home Couzens returned to, after thirteen years in Detroit, to seek money to hazard in the Ford venture. When his father derided the investment as foolish there remained only his sister. Rosetta Couzens had three hundred dollars, saved from her earnings as a public-school teacher in Chatham. She was willing to lend that to her brother. But again the father raised heated objections. Finally Rosetta compromised and offered a hundred and fifty dollars. “But he wanted it in even hundreds, so I gave him a hundred dollars.”
Couzens returned to Detroit with the disappointing conviction that all he could invest was $500—his $400 and his sister’s $100. Luckily, he found Malcomson
in one of his expansive moods. Malcomson agreed to advance him $500 on an expected bonus, and also arranged for acceptance of a promissory note for $1,500. Thus, among the twelve shareholders— Alex Y. Malcomson and eleven disciples, so to speak—Couzens finally was recorded as holder of $2,500 worth of stock. In Couzens’ view there should actually have been thirteen shareholders, counting his sister Rosetta. But Ford objected strenuously to a woman being allowed in the enterprise—any woman—so Couzens carried Rosetta's one share in his own name. That single share eventually earned Rosetta a fortune.
Malcomson had expected to be chosen president of the new; company. But that office went to a banker named Gray— an irony, in view of Ford’s later attitude toward bankers — and Malcomson was named treasurer.
Ford w;»s not even considered for president. Everyone concerned, even Ford, agreed that to have Ford as president would probably have been fatal to the financial rating of the new company. Instead, he was given the title of vicepresident and general manager in charge of mechanics and production.
The post of business manager in active charge of all business affairs of the new company, as well as that of secretary, went to Couzens. Probably by instinct he paired off with Ford after the organizational meeting. Ford volunteered to take Couzens home in his odd-looking, tillersteered runabout, and Couzens accepted the invitation. For the Ford Motor Company this was the real beginning—and also for the two "partners,” as, in due time, they would be called.
Was Ford worth $3,000?
Lip to that moment they had not had much to do with each other. "In the beginning. 1 did not esteem Couzens highly.” Ford recalled. As for Couzens, he had no better opinion of Ford. Now things between them changed.
Ford had special reasons for seeking to cultivate Couzens. It obviously bothered him that his associates in the company were strong men who could outtalk him and, so long as he owned only a fraction more than a quarter of the stock, out-vote him. He felt the need of support, as he would often in the future. Only then could he function. And Couzens seemed to be his man, for he would feel much less like a lamb among lions if Couzens were lined up with him. "He does his own thinking, no one could tell him what to do,” Ford later said, and he appreciated that quality in Couzens— then. As they bounded along that evening in Ford's car they talked of their plans. Among other matters, they discussed the salary each might expect from the new company. Couzens suggested $3,000 a year for Ford, $2,400 for himself. Ford, the mechanic, wondered if $3,000 were not too much.
“No," said Couzens, the businessman. "This could be an important project."
Ford’s way of introducing to Couzens the matter of salaries was especially interesting: "What do you think we ought to ask from those fellows?” Couzens of course caught on to Ford's meaning. On one side there was to be Ford and Couzens; on the other, the remaining shareholders.
Within two years, under the drive from this unwritten partnership, the stripling giant had paid in dividends three times the original investment; an industrial phenomenon was well launched.
Perhaps, Ford later said, “magic” was a factor, but it was not only magic. Everyone worked frantically — and
Couzens was the pace setter. “In those days,” said the Ford Times, “J.C. was the entire office management—he hired and fired—he kept the books, collected, spent, and saved the cash, established agencies, and dictated policy.”
In 1952, in his book The Wild Wheel, business writer Garet Garett summarized Couzens* role: “From the beginning . . . James Couzens had been the great he-person in the Ford organization. His gifts were four—a genius for the role of ringmaster in the arena of business, an immense store of energy, a terrible temper and leonine roaring pouches.”
Yet there remained a cloud, even as the Ford-Couzens fortunes boomed.
The company had been born under this cloud, for as early as July 1900 the owners of a certain patent had begun filing suits for infringement against various automobile manufacturers. Moreover, the validity of the patent had been conceded by Alexander Winton, then the leader in the industry. In March 1903 there was formed “The Association of Licensed Automobile Manufacturers,” with the avowed purpose of forcing out of business anyone not licensed under the patent.
Not everyone would be licensed, either; the Association intended to practice discrimination.
Not until a week or so after the Ford Motor Company was organized did any of the Ford promoters hear about the patent or the Association.
Then, this is what they learned: back in the early 1870s, George B. Seiden of Rochester, a lawyer with a mechanical turn of mind, a member of a prominent up-state New York family, had begun studying “horseless locomotion.” His idea was to “construct a light-weight self-propelled vehicle with a large cruising radius which could be operated by one man, not a skilled engineer.”
Seiden at first experimented with a steam engine. Then he turned to the internal-combustion type. By 1879 he had progressed far enough to apply for a patent on this latter engine. Then he determined to wait for the world to catch up with him. He contrived to postpone the issuance of a patent, but kept his application alive through a long series of “amendments.” The patent was finally issued on March 5, 1899. Under the leadership of the Olds Motor Company, a group of Detroit manufacturers then formed a “protective committee,” which took over the patent. Among the admitted, even boasted, aims of this committee was a restriction of production. Only manufacturers granted a license could produce cars, and these had to agree to limit the number of cars produced to a figure set by the committee.
Couzens first heard about all this a few days after the Ford Company was established.
A conference between the patent-holders and the officers of the Ford Motor Company was held at Detroit in 1903. At this meeting their spokesman repeated: the Ford Company could not stay in business unless licensed. For the Ford organization, he had only one kind of advice: they should go out of business. The Ford people were only assemblers, not manufacturers. Assemblers were not wanted.
Nobody said anything for a while. They had been told that a legal fight to carry the matter to the highest court would cost at least $40,000, nearly as much as the total investment in the company. And there was no assurance that such a fight could be won. Some of the Ford stockholders were for yielding to what appeared to be the inevitable. Others, Malcomson included, hoped for some kind of a compromise.
Banker Gray talked moodily. He lamented that now he could not even unload his stock on others because he could not “conscientiously” recommend the shares as being a good investment.
Couzens broke the indecision and gloom. Following the pattern he had established as a boy in Chatham, later as a freight clerk at the Michigan Central, and as assistant to Malcomson, he barked: “Seiden can take his patent and go to hell with it!”
“Couzens has answered you,” said Ford.
At the next directors’ meeting it was voted unanimously “to throw down the gauntlet, come what may.” Space in newspapers was purchased for denunciations of the Seiden patent. These Ford advertisements assured prospective car buyers: “We will protect you.”
The ensuing battle was fought on the propaganda front as well as in court. New advertising barrages that specifically warned the public against the sale, purchase, or use of Fords were set off by the Licensed Association. Any infraction would lead to prosecution, these ads said. Fords were barred from the automobile shows held at Madison Square Garden. In reply, the Ford Company
then advertised that it would put up surety bonds "to protect dealers, importers, agents and users from any attempt on the part of the TRUST to prevent you from buying the 'car of satisfaction.’ ”
The word “trust” was featured in much of the Ford advertising—shrewd exploitation of what was then becoming a popular political issue, thanks to President Theodore Roosevelt’s "trust-busting program.”
On this issue of monopoly the Ford Company soon acquired an interesting and powerful ally, John Wanamaker. The great Philadelphia and New York merchant had fought a patent war with the so-called bicycle trust. Now he looked forward to another and similar fight. Already handling F'ords in his stores, Wanamaker began to feature them in his advertising. In January 1904 the Licensed Association filed suit against Wanamaker, and he hit back with fullpage advertisements saying:
“Get a Ford car and enjoy it. We’ll take care of the tomtoms. Don’t give $600 to the Bogey man.”
All this uproar had an unanticipated result—perhaps the most important single thing that happened in the early days of the company. As Couzens said later,
“The Seiden suit was probably better advertising than anything we could put out.”
The controversy made the Ford the best-known make in the land. Many people bought Fords because they were the only automobile they had heard about. Others bought Fords because they hated monopoly, or just to be contrary; still others because “Honest John” Wanamaker said they were good cars.
There was at least one other important result. Both Couzens and Ford came to feel great admiration for Wanamaker, who was then plumping a novel concept of business—that the purpose of business was to render “service to the public,” that it was a duty of merchants to distribute products at the lowest price possible.
Both Couzens and Ford began to think and talk the same way. The influence of Wanamaker, indeed, may have been the central inspiration for the later, and world-celebrated, concept of the Ford Motor Company—that of producing and selling cars at low cost: the foundation of the mass-production system in heavy industry.
But even before Ford worked out his mass-production techniques the company was picking up momentum under Couzens' driving hand. The Ford-Couzens bias was being cemented, and Malcomson, the actual founder of the company, was more and more a voice in opposition.
In September 1905 Malcomson raised a row at a directors’ meeting because Couzens' salary was raised to $8,000. Obviously, his objection was emotional. That year the company had earned a net profit of $285,231.94. The other directors voted Malcomson down. After that, even Malcomson had to concede that his own former clerk had supplanted him completely as the dominant businessman of the Ford Motor Company.
Which way the wind was blowing, how firmly the Ford-Couzens alliance had already jelled, was made evident even before this, when the Ford Motor Company of Canada was organized in 1904. In this corporation, Ford was president and -Couzens was vice-president. But Malcomson was left out.
In the parent company Malcomson was still treasurer, as well as a principal stockholder. But he really had little to say about policies. Ford and Couzens already had attained, substantially, their planned goal—independence from "those fellows.” Less than a year later Malcomson had been "frozen out” of Ford; Henry Ford became president for the first time, and Couzens joined the directorate as treasurer and general manager.
By 1909 Ford was earning profits of more than four million dollars a year on the sale of 17,000 cars — a figure that made one U. K. newspaper scoff at an “industrial impossibility.” But the Seiden patent suit still hung threateningly over the enterprise.
Finally, in 1911, the Federal Circuit Court of Appeals decided that while Seiden had a valid patent, Ford and other manufacturers were using an “entirely different motor principle.” The cloud over the Ford Company disappeared.
From this point on Ford flourished as no corporation had before. But the Midas touch left something to be desired for both Couzens and Ford. In spite of the riches that flowed in on them, in spite of all the doors thrown open to them, neither was really a happy man. Both illustrated a fact — that success often is harder to endure than failure, that it frequently carries with it greater pitfalls for mind and soul. Ford was beginning to overrule decisions taken by Couzens. He was obviously beginning to chafe at two-man rule.
For his part, Couzens began to lose much of the respect he had had for some of Ford’s mental processes. He continued to recognize Ford’s indisputable shrewdness and the validity of Ford’s judgments on many things, especially on mass production. But he found himself shocked by certain points of view taken by Ford, like Ford’s anti-Semitism and such absurd statements as: “If you will study the history of almost any criminal, you will find he is an inveterate cigarette smoker.”
Couzens’ inner conflict could be cured only one way. In July 1913 he took the first tentative step: “Notified Mr. Ford of my desire to resign, have office downtown. or have year's absence.”
Thus did he record in his little notebook the fact that a new James Couzens was ready to emerge. Already a multimillionaire. his money-making period was nearly over. No longer could he tolerate a career that was in such contradiction to his primary personality trait—a desire for independence. He had to be James Couzens—not merely Couzens of the Ford Motor Company.
As Couzens groped for a way to give his life a new direction, he began to look at the Ford Motor Company from a different perspective. Up to then, the company had been merely a money-making machine. In President Calvin Coolidge's phrase, its “business was business” and nothing more. Now Couzens began to view the company as a possible social instrument, particularly in regard to “the labor problem.”
At his clubs he began to get the reputation of an argumentative fellow on economic subjects, for he questioned the ideas then common among successful businessmen. In part, he was bent on deflating some swollen egos. It pleased him to tell other wealthy manufacturers bluntly that they were successful not because of superior brains, but because of a direct, or indirect, government subsidy, or because their labor was sweated.
In one major respect, however, Couzens was not yet unorthodox at all. Wage rates were no higher at the Ford plant than at any other automobile plant. Indeed, for certain skills, they were even lower at Ford's, where janitors were paid as little as seventeen cents an hour. And the company followed the policy of laying off labor whenever full production was not possible.
One evening near Christmas, 1913. Couzens came across an editorial item that seemed to have a bearing on the labor problem at the Ford plant. The editor was commenting on a letter from a reader who had asked why. “if it believed in socialism, the magazine did not practice what it preached in its own affairs.” The editor answered that progress had to be universal, that until everyone changed, a single person or company could not change and survive. “That." said Couzens. “was an asinine answer! "
The next morning Couzens told Henry Ford that the basic minimum wage at the Ford plant should be five dollars a day. He decided on five dollars because "it's a good round number,” he told an interviewer.
Ford objected: “We pay as much as anyone pays.”
"But we’re responsible for those men.” Couzens said, pointing through a window at a group of unemployed men outside. “We should give our people wages that permit them to save against the time when we have no work for them.”
Ford came back next with the suggestion that minimum wages for everyone
be increased to three dollars and fifty cents a day.
"No, it’s five or nothing,” said Couzens.
"Then make it four,” said Ford.
“No,” insisted Couzens, "five or nothing. A straight five-dollar wage will be the greatest advertisement any automobile concern ever had.”
Couzens carried his point. The famous wage plan, because it doubled wage rates at one stroke in a great factory, was indisputably one of the major events of the era, both in its immediate and in its later impact upon the economic structure of North America.
The wage boost proved a temporary palliative for the tension that had been building between Couzens and Ford. However, within six months the old trouble between Couzens and Ford came to the surface again. Plainly, all that was needed for a final break to occur was some appropriate "incident."
Since early in World War 1 Ford had been issuing various pronouncements on the conflict and its meaning for the United States, statements that increasingly irritated Couzens. He said in one statement: "To my mind, the word murderer' should be embroidered in red letters across the breast of every soldier."
On the evening of Oct. 11. 1915.
Charles A. Brownell, Ford's advertising manager, stepped into Couzens' office with the attitude of caution and wariness customarily adopted by nearly everyone. His mission was to get Couzens' approval of the page proofs for the next issue of the Ford Motor Company magazine, the Ford Times. He was acting in accordance with a rule that everyone in the Ford organization understood in those days—that Mr. Couzens had to approve everything (or nearly everything) the company did, and of late this had applied especially to articles in the Ford Times.
Brownell handed Couzens a set of the proofs. In his characteristically quick way Couzens thumbed through them, while Brownell held his breath. Nothing objectionable to Couzens turned up— until his eyes fell upon one particular article.
The effect on him of glancing at this article was an almost instantaneous—and characteristic — reddening, first of his neck and then of his face—danger signs that all who knew him well understood. The article contained the substance of remarks previously published in the Detroit Free Press and credited to Henry Ford, remarks concerning the war in Europe and the “preparedness movement” in the United States. The tenor of these remarks was distinctly pacifist.
“You cannot publish this,” Couzens told Brownell.
"But Mr. Ford himself—”
"You cannot publish this! Hold it over.”
"But Mr. Ford said—”
“These are Mr. Ford’s personal views, not the views of the company. This is the company paper. He cannot use the Ford Times for his personal views. I will talk to Mr. Ford tomorrow."
Brownell withdrew without saying anything more. He knew a decision had been made at Ford w'hcn Couzens had made it.
Couzens turned his swivel chair away from his flat-top desk and shut violently the roll top of his "aft” desk.
These two desks formed the nerve
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centre of the Ford Motor Company. To them came reports from the 6.700 Ford agents, the thirty-five Ford branches, the twenty-six Ford assembly plants, the forty-eight American banks, and the tw'o foreign banks in which the Ford company millions were deposited. From these desks came the decisions that guided the company's affairs throughout its already vast empire in the United States and abroad—every place, in fact, except in the main shop and in the laboratory (Henry Ford's particular bailiwicks)— and sometimes in these places as well.
Couzens got up briskly. He walked over to his clothes rack and planted a black derby firmly on his prematurely grey head. For a moment he stopped before the mirror over the washbasin to adjust his necktie knot to a precisely correct position in his high, stiff collar, flicked away some dust that may or may not have been on his jacket sleeves, thriftily turned off the office lights, and. in an instant, with his usual quick gait, left for his home.
His movements that evening, down to the last gesture, were all routine for him.
He had gone out of the Administration Building that same way night after night since it had been built. But. after arriving home, he went to bed earlier than usual, explaining to his wife. Margaret, that he had one of his migraine headaches.
At ten o'clock the next morning Henry Ford came into Couzens' office. “He was perfectly good-natured. He sat and visited awhile.” Couzens later described the meeting.
The two partners, as they were known, talked of Couzens’ recent trip to Cali-
fornia, of Ford’s plan to attend the San Diego Exposition there with Thomas A. Edison. Then Couzens said to Ford, “I held up the Times because of your article in it about the war.”
Suddenly, as if a match had been touched to gunpowder, the calm and friendly atmosphere in the office exploded.
Ford’s geniality changed swiftly into something else—a belligerence not usually associated with Henry Ford in those days, an attitude he had certainly never before shown so sharply to Couzens, although others in the company already
knew that Ford was capable of such a transformation. As Couzens himself said some time later, “Mr. Ford just flew ofF the handle ... I was shocked . . . aghast."
Couzens did not recall in detail everything Ford said on that occasion. But he did remember Ford's having snapped: “You cannot stop anything here!”
“Well, then, Couzens replied, “I quit.” ★
James Couzens’ biography, under the title INDEPENDENT MAN, will be published later by Scribners.