by Jim Hinckley
The taxis produced by Checker are similar in nature to Route 66. Both are American icons, both have an extensive fan base and technically, neither one officially exist any longer. The decertification of Route 66 occurred in 1985, and the last Checker rolled from the Kalamazoo factory in 1982.
In regard to history, myth has overshadowed fact with both Checker and Route 66. Few enthusiasts are aware that the origins of Route 66 are firmly rooted in the bicycle mania of the mid to late 19th century, and even fewer are aware that the foundations for Checker were laid by John Hertz of rental car fame.
As exciting as the stories about these icons are, they pale in comparison to the tales pertaining to the struggle for dominance of the taxi industry by manufacturers, by franchised companies, and independent operators. These are stories of mergers so complicated and murky that they garnered the attention of federal investigators, and of blood in the streets.
Consider this fact; in the 1920s and early 1930s few cities regulated the taxi industry. As a result, fast buck artists, alcoholics, desperate men trying to feed their families, and gangsters became taxi drivers, and competed for a very limited market.
They drove financed Checkers and well worn used cars, refurbished wrecks and even stolen cars, family sedans and military surplus vehicles. They used home made signs, lit signs, and hand painted signs on the doors.
They drove five hours, ten, and even twenty. Their fares were competitive and when that proved unprofitable, they eliminated the competition.
A study conducted in 1931 evaluated 23,000 motor vehicle accidents in the city of New York, 21,000 of which involved taxi cabs. An article published in the August 1931 issue of Literary Digest detailed another investigative report and noted that, “Differences are now settled with fists, rocks and clubs. The Bronx became famous for these affairs of honor. In one of them, the peacemaker was knocked down with a brick while another driver jumped into a cab and drove over the body.”
The chaos and mayhem at the corporate level was just as vicious. In 1928 through a series of shrewd stock manipulations, Morris Markin, founder of Checker, was removed from the position of president and a syndicate of auto executives and major stockholders assumed control.
As Markin battled for control of his company he was also working to gain control of taxi companies and major metropolitan fleet companies. The first step was creation of the National Transportation Company roughly modeled after a similar endeavor initiated several years prior by John Hertz in an effort to create a market for his Yellow Cab taxis.
By years end Markin controlled more than 1,000 taxis in New York City through the National Transportation Company, and had acquired partial ownership of Chicago Yellow Cab Company owned by Hertz through the outright purchase of Parmelee Transportation Company, which had purchased a percentage of Hertz’s company several years prior. Things became even more confusing when Markin acquired Yellow Cab Company of Pittsburgh and Yellow Taxi Company of Minneapolis through National Transportation Company, and then folded this enterprise into the Parmelee Transportation Company.
The hinge pin for Markin’s new empire was Chicago Yellow Cab Company. This was also a holding company with its own insurance company and large maintenance facility.
With a solid dominance of the taxi business in several major metropolitan areas, Markin turned his full attention toward regaining control of Checker. Kalamazoo Gazette, August 16, 1933, “The move by which E.L. Cord obtained control of Checker is understood to have centered around Markin, removed as president of the company. Markin held options on sufficient stock to gain control of the company. The options were about to expire when he was removed. Markin sold the options to Cord who exercised them just before they were to expire and gained control of the company and the directors who voted for his removal have been replaced by Cord men.”
Not mentioned in the article was the complex arrangement that made this take over possible. Cord, owner of Auburn-Cord-Duesenberg, and primary stockholder in Lycoming, an engine manufacturing company, became chairman of the board and a director at Checker.
Cord then transferred the manufacture of the Saf-T-Cab, a commercial line of the Auburn division to Checker. Lycoming that supplied engines for Cord, Duesenberg, and Auburn, would now also supply engines for Checker.
Further complicating the transaction were arrangements for the sale of Saf-T-Cab vehicles. They were still marketed through Auburn but sales to taxi companies were through the Markin controlled Parmelee Transportation Company taxi division in Cleveland.
It was an innovate arrangement. It was a curios arrangement. It was a lucrative arrangement. Apparently the Securities and Exchange Commission thought so as well.
In the Bill of Complaint on charges of stock manipulation filed on August 7, 1937, Cord is listed as chairman of the board, a director, a member of the executive committee of the Cord Corporation; chairman of the board and a director of the Checker Cab Manufacturing Company, and director of the Auburn Company. Markin is listed as president of the Checker Cab Manufacturing Company and its major stockholder.
The bill also noted that Checker Cab Manufacturing controlled a syndicate that included Parmelee Transportation Company, the subsidiary to which and through Auburn sold Saf-T-Cabs powered by Lycoming engines, a Cord controlled company, and the major contractor that supplied baggage delivery from railroad stations to hotels in numerous cities, and Chicago Yellow Cab, Incorporated.
Chicago Yellow Cab was also a warren of interlocking enterprises. The largest manufacturer of taxi equipment such as meters was controlled by Cord. The products were sold through a division of Chicago Yellow Cab.
This company also had a finance division that allowed operators and franchise companies to purchase Saf-T-Cabs or Checkers on the installment plan, and a specialty insurance company for taxi fleet owners or operators. It was also the only authorized repair facility in Chicago for Checker built vehicles.
Even though both Cord and Markin were indicted, the charges were dropped and the investigation fizzled. The primary reason was that the collapsing Cord empire led E.L. Cord to liquidate a wide array of holdings including his share of Checker.
Markin now controlled the largest manufacturer of vehicles built specifically for taxi application, dominated the taxi fleets in several major cities, and the sale of taxi equipment. One can only imagine his delight when cities initiated campaigns to stem wildcatting and violence by dictating that only purpose built vehicles could operate as taxis.
The Morris Markin empire never equaled that of Henry Ford or Walter Chrysler. Checker never was able to compete with General Motors or Chrysler. It did, however, create an American icon that lives on long after the company ceased operations.
© Jim Hinckley, Legends Of America, January 2014
About the Author: Jim Hinckley is an award winning author and photographer, and an official contributor to Legends Of America through a partnership developed in October 2012. Hinckley is a former Associate Editor of Cars and Parts Magazine, and author of multiple books, including several on Route 66. You can follow him on Jim Hinckley’s America.