"Cash for Clunkers"

Published In:
Ypsilanti Gleanings, Fall 2009,
Fall 2009
Original Images:


Author: Laura Bien

The current “Cash for Clunkers” program had a Depression-era predecessor called the “Na- tional Used Car Exchange Week.” Created by automakers in 1938, the promotion was meant to ease the glut of used cars clogging dealer- ships. Then, as now, people frightened by the economic climate were hanging on to their old cars, which stifled dealership turnover.

Edsel Ford, GM’s William Knudsen, and Chrysler’s K. T. Keller met with Roosevelt in January of 1938. Afterwards, Ford sales manager John Davis contacted Automobile Manufacturers Association president Alvan Macauley, to say the plan was greenlighted. From Manhattan, Macauley announced that U.S. automakers would spend over a million dollars to promote March 5-12, 1938 as “National Car Exchange Week.” The plan included a one-week campaign of billboard, radio and newspaper ads promoting the exchange of one’s old car for a newer used one.

“National Car Exchange Week” first appears in the February 28, 1938 Ypsilanti Daily Press, with the headline, “Advertising to Break Auto Jam.” The article says, “The American automobile industry moved as a unit for the first time in history today in an effort to beat the business recession with one of the great- est advertising campaigns of all time. The industry … announced Sunday that it will spend $1,250,000 [almost 19 million dollars in today’s money] in a single week to break the used car jam that has been blamed for the collapse of the market for 1938 model cars.”

On March 1, another story appeared. “Edsel Ford, William Knudsen, and K. T. Keller today threw the weight of the motor industry’s ‘big three’ behind the $1,250,000 advertising campaign to end the business recession by breaking the jam of used cars in the stocks of dealers. . . Ford, a “second generation” man of a motor family that has been known for its independent action, spoke of the industry as a whole, saying: “The one great contribution the automobile industry made to the nation in its efforts to throw off the last Depression was its demonstration of courage in the face of adversity. That same fearlessness is evident today as a united industry moves forward to start the wheels rolling again.”

By March 2, the Ypsilanti community had made plans. “Local Car Dealers Take Part in National Drive,” read one Press headline. “Yp- silanti auto dealers meeting at the Huron Ho- tel Thursday unanimously agreed to cooperate with manufacturers and 46,000 other dealers throughout the United States in a campaign to break the used car jam and to aid in sound recovery from the current business recession.” A parade was planned, and the Daily Press printed a mayoral proclamation:

“Whereas, a concerted movement to stimulate used car sales and pave the way for a resumption of automobile manu- facturing and employment on a normal basis has been inaugurated by the Ameri- can automobile industry, and, Whereas, the business interests of Ypsilanti have pledged their enthusiastic cooperation to this campaign, and, Whereas, the “Drive- A-Better-Car” movement will make an important contribution to motoring safety in Ypsilanti, now, Therefore, I hereby proclaim the week of March 5 to 12 National Used Car Exchange Week and urge the cooperation of all citizens in insuring its success. Witness my Hand and Seal, Ray H. Burrell, Mayor.”

In the same paper, a cartoon titled “AN- CHORS OR WINGS?” boosted the pro- gram. In the first panel, an antiquated old car is dragging a ship’s anchor. “Holy smoke, Myrt,” says the driver, “what’s got into this moss-grown tub? We’re shovelin’ out the price of a summer trip for gas, oil, and repairs!” In the next panel, a sleek new car appears. “Baby, what National Used Car Exchange Week did for us! More room—steel body—safety brakes—big tires—smooth engine. Looks like we’re in the dough, but most of the dough is still in my pocket!”

Ypsi’s E. G. Wiedman Auto Company, at 212 Pearl St and 15 E. Michigan, ran an ad touting used car bargains. Prices ranged from $275 for a Ford DeLuxe Tudor Sedan to $795 for a Lincoln-Zephyr Fordor Sedan (these prices, in 2009 dollars, would be $4,000 and $12,000 respectively).

On Saturday, the campaign’s opening day, the city woke up to ice and snow. Nevertheless, the parade went on as planned, featuring the Girls’ Drum and Bugle Corps and the Ypsilanti High School Band, along with a procession of some sample used cars, washed and polished, from dealerships across town. Despite the weather, the day was a success: $10,000 (about $151,000 today) in sales at Ypsi dealerships was reported.

By Tuesday, “first reports indicated marked increases in the sales of used cars,” said the Daily Press. “H. H. Shuart, manager of the Detroit Auto Dealers Association said dealers had reported last weekend’s business as the best in six months and that sales showed increases of 100 to 300 per cent. He said similar reports had “Cash for Clunkers” in the 1930s! continued from page 6 been received from dealers in other cities.”

The Wednesday paper quoted John Lonskey, president of Ypsi metalworking firm the Central Specialty Company. “In Ypsilanti alone, this will directly affect six factories with increased orders, meaning more employment and more money circulating in the city.

The paper continued, “In illustration of this Mr. Lonskey explained that in the case of the Central Specialty Co. there has been a drop in employment of 365 workers since the peak employment of last year when 850 men and women were employed. The emergency purchase of used cars throughout the country will result in putting automobile factories and related industries in operation everywhere with, in some cases, a 60 per cent or greater increase in demand for parts and equipment, he estimated. Many of these parts are made in this city.”

By the end of the week, National Used Car Exchange Week was deemed a success. Fifty- five old cars had been turned in by those who purchased newer ones, and a total of $18,000 worth of newer used cars had been sold. Ypsilanti dealers were so pleased with the results they planned to petition the state to mount another sales campaign in the future, this time by declaring 1932 model year cars as “marginal.” In the meantime, the 55 Ypsilanti drivers behind the wheels of their new used cars had done their part to help get the local economy moving again.

(Laura Bien is a volunteer in the YHS Archives, author of the Daily Diary Blog, and a regular contributor to the Gleanings.)

Photo captions:

Photo 1: Ford Dealer newspaper ad for “National Used Car Exchange Week” in 1938.

Photo 2: E. G. Wiedman Auto Company newspaper ad was part of the 1938 “National Used Car Exchange Week.”

Photo 3: 1938 “Exchange Week” ad sponsored by the Automobile Dealers and Manufacturers of the United States.