On January 22nd, 1950, Preston Tucker, founder of the Tucker Car Corporation, was found not guilty of 25 counts of mail fraud, five counts of violating SEC rules, and a single count of conspiracy.
Tucker founded Tucker Corporation in 1946. Formed after the Second World War, when new automobiles were put on hold, Tucker believed it was finally the right time to start his dream of starting his own automobile company. He invented the Tucker 48, which included a padded steering wheel, safety glass, a roll bar, and a center cyclops. The model was ahead of its time and powered by a 334 cubic-inch aircraft engine.
The public was very curious about Tucker’s model. He was able to gather $17 million in funding and purchased a factory. After receiving his lease from the War Assets Administration (WAA), Tucker established his factory in Cicero, Illinois, under the agreement that he would have $15 million in capital by March 1 of the next year. However, he still needed more money for manufacturing. To raise money, he sold dealership franchises and accessories, including seat covers and luggage. However, his methods raised questions with the Securities and Exchange Commission, leading to an investigation into fraud in 1946, only the first of multiple investigations.
Tucker reworked his franchise agreements with dealerships and started another proposal to satisfy the SEC. He proposed issuing $20 million in stock upon completion of the prototype and SEC clearance. However, shortly after, the National Housing Agency ordered the WAA to cancel Tucker’s lease and transfer the plant to another corporation. Tucker was caught in the middle of a battle between the National Housing Agency and the WAA. As a result, his franchise sales decreased, stock issues were set back, and his reputation was damaged.
In 1947, Tucker built the “Tin Goose”. The model was built by engineers using car parts from junkyards. While the Tin Goose did not make it for a press review, Tucker continued to experiment with different car models. However, negative press led investors to worry, prompting Tucker to pen an “open letter to the automobile industry”. In his letter, he suggested he was being spied on by other automobile companies.
By 1948, Tucker was ready for production, but he was $5 million short of the funds for the stock issue. He decided to create a pre-purchase plan for accessories like radios and seat covers. He garnered $1 million but was stopped by the SEC. The SEC did not like that Tucker was selling accessories for a car that had not been produced yet. His plant was raided on May 28, 1948, immediately halting production and forcing him to fire 1,600 workers.
October 4th marked the start of the trial, and prosecutors accused Tucker of having no intention of building a mass production car. The prosecution claimed Tucker used the idea of the car to lie to investors. In opposition, Tucker’s defense attorneys maintained that his company was ready for mass production and that it would not have built his plant and hired employees if it had never intended to build the car.
The jury deliberated for 28 hours, and Tucker, along with seven business executives, Harold Karsten, Floyd Cerf, Robert Pierce, Fred Rockelman, Mitchel Dulian, Otis Radford, and Kliff Knoble, were found not guilty. However, the negative press around the investigation and trial left a permanent scar on the company. Tucker tried to build another car with investors from Brazil, but died of lung cancer in 1956.
Only 51 Tuckers were ready and left the factory, but most are now stored in private collections. Tucker’s legacy continued as the Big Three of the automobile industry took inspiration from the 48’s designs for their own lines. However, many believe the Big Three feared Tucker’s competition and ultimately supported the investigation that led to Tucker Corporation’s demise.
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