WAR FRONT: Frank Cohen, Munitionsmaker

Frank Cohen, Munitionsmaker

A year ago, when the U.S. Government began its clumsy effort to rearm, one prominent New Dealer confessed: “I wish we hadn’t knocked off all the robber barons. The country sure needs a few now.”

By last week the New Dealer’s wish seemed to come true in the shape of an astonishing little man named Frank Cohen. Though not exactly a robber baron, Frank Cohen is no overstuffed corporate career man either. He made his money playing shrewd angles around Wall Street. His latest angle, which is armaments, occurred to him for other reasons than profit. But he played it just as hard as if it meant millions. In so doing he became one of the men the U.S. needed.

For months the defense industry attracted little or no business interest. Big corporations saw no money in it, little ones did not know the Washington ropes, nobody wanted to be a “Merchant of Death.” The void ached for some self-starting, corner-cutting American enterprise; it almost seemed there was none left. But there was.

This week, when Savannah Shipyards, Inc. clears its credit arrangements with Savannah bankers, Frank Cohen will be off on the third lap of a meteoric defense career. Frank Cohen’s company, Empire Ordnance Inc. (whose stockholders own Savannah Shipyards), is less than one and a half years old. It began in May 1940 as a shoestring gamble whose only property was a broken-down 89-year-old iron foundry near Philadelphia called the Pencoyd Iron Works.

In the last eleven months, Empire has expanded into 14 corporations, six plants and a shipyard. It is now delivering every month $1,000,000 worth of guns, gun mounts, recoils and tank armor to the British, has a $37,000,000 munitions backlog, and last month got an $18-20,000,000 contract from the Maritime Commission for a dozen 10,000-ton “Victory” ships. It has 3,000 employes and will soon have 4,000 more. There is not a dollar of U.S. Government or even public money in the whole capital structure.

The Remarkable Cohen. “. . . We submit that the United States Government should not recognize the present German Government . . . until the present German Government demonstrates that it will honor its human obligations.” So read a quarter-page advertisement in the New York Times, March 27, 1933. It was signed “Frank Cohen and Family, All Native Americans.”

In some ways, Frank Cohen is an exceptional kind of American, but he does not look it. Short (5 ft. 4 in.), rotund (180 lb.), 48, he grew up in New York City and went to Columbia, where he wrote a Ph.D. thesis on what was then (1916) the revolutionary theory of an annual wage for seasonal industries. Intending to teach, he was so irritated by the blank laughter his views aroused among businessmen that he went into business himself. His first venture was an unlikely scheme to sell U.S. oil products in bulk to Palestine. The first shipment netted him $20,000, and in three years he had 40% of the market.

Back in the U.S. during the easy ’20s, Cohen became a credit man, then developed a new angle of his own. He bought into small insurance companies, pyramided their stocks on the rising market. After the crash he bought more, paying the book value of their shares (higher than the market) on condition he be lent the money to buy out the other stockholders. By 1932 he controlled companies with assets of $300,000,000.

Some bad luck after the bank holiday cost Frank Cohen a good deal of his fortune, but when war began he was still a wealthy man. He was also known in the more anonymous purlieus of Wall Street as a smart man with a dollar. That is why, in May 1940, he was sought out by a group of promoters and engineers led by Raymond Voyes (formerly of Bofors) and Ferdinand V. Huber (freelance gun merchant). More or less at liberty, they thought it would be a good time to get back into the munitions business.

But Nobody Buys. Cohen agreed. His part was to be purely financial. He interested the owners of Willys-Overland (Ward Canaday, G. W. Ritter, others) who put up 200,000 shares of Willys stock and $120,000 in cash. Empire Ordnance bought the old Pencoyd works, rebuilt the plant and renovated its machinery. By September the infant company had spent the $120,000, but it still had no contracts. Since the old days, the munitions business had apparently changed.

By this time Cohen’s associates wanted to get out. It was up to Frank Cohen to buy them out, or get out too. He knew no more about gun-making than a Wall Street customer’s man. But meanwhile France had fallen, the British had faced Dunkirk, and the U.S. was trying to arm. So he borrowed some money from old Wall Street cronies like Elisha Walker, paid off the Willys crowd, recapitalized Empire (keeping control) and went to work.

His first experience was with U.S. Army Ordnance, to whom he thrice submitted bids on guns (75s and 105s), was thrice low man, was thrice turned down. The Army was suspicious of newcomers. When a Cohen emissary finally sought a showdown with a noted Army brass hat, he was told that Empire’s last bid was $3,000 too high. Cohen produced the bid: it was $2,970 per gun. Flustered, the Army not only apologized (“typographical error”), but sent him across the street to the British, with an introduction.

The British were leery too, at first. But they looked over his plant, and they looked over Frank Cohen. At length, in his office, they read the answer to a lot of the questions in their British minds. It was the ad from the New York Times of March 27, 1933, which hung framed on his wall. Last Nov. 25, they gave him a contract (about $8,000,000) for 1,550 75-mm. guns.

We’re Off. Frank Cohen is no production man, but he knows how to get men who are. He had originally staffed his little plant on the Schuylkill by going direct to various “40-Plus Clubs,” groups of chin-up engineers and mechanics who thus advertised the reason they were out of work. In expanding for the British order, Cohen next hired instructors from the Delehanty Institute to train the raw labor he picked up. When he opened the West Pittston Iron Works (near Wilkes-Barre) to machine steel plates, 343 of the 350 men hired were from the coal mines. They went to school four nights a week, now operate drills and finishing machinery in three shifts, 24 hours a day.

Last week the old Pencoyd works was a mere speck in a series of new munitions plants that stretch for two and a half miles along the Schuylkill. They include electric furnace, forging and machining operations, are integrated from steel fur nace to finished 75, of which Empire now makes four a day, will soon make 13.

A new subsidiary called Vulcan Iron Works (WilkesBarre) makes locomotives, other heavy machinery, castings. A plant in Brooklyn produces telescopic sights.

From its West Pittston plant every week come 24 sets of the 33 steel plates that make a 30-ton tank. Nearby, the Wilkes-Barre Carriage Co., also Empire-owned, makes gun mounts, inserts recoils, ships them back to the Schuylkill. From there the finished 755 go to the U.S. Army’s Aberdeen testing ground. They are all British orders, but since Lend-Lease the Army tests them. From Aberdeen, says Frank Cohen proudly, Empire has never had a reject.

On to Ships. Until last month, the only U.S. contract Empire had was for reconditioning 300 3-in. guns for the Navy (to arm merchant vessels). But last spring Frank Cohen decided he could build ships too. So he went to see the Maritime Com mission Chairman, and Admiral Land told him he was crazy. At that time it was the Commission’s frank policy to finance the expansion of existing yards, not to encourage new ones.

Nevertheless Frank Cohen went to Savannah, Ga., bought from the Port Authority 1,500 feet of frontage along the Savannah River, leased another 1,500 feet for 20 years. Savannah was no more hospitable than Admiral Land had been. As if a Jew in the gun business were not enough, he had brought along a Catholic, William R. Crowley, to run his projected yards. Savannah’s xenophobes saw the whole thing as a Wall Street plot. By last week Savannah was changing its mind.

With 250-350 locally recruited employes, Cohen and Crowley put on one of the quickest construction jobs Georgia had ever seen. Empire drove the first pile on May 31, poured some $800,000 into its Savannah Shipyards. Last week three shipways, four craneways were nearly complete. The keel for the first of twelve Victory ships will be laid about Dec. 1—less than two months after the Maritime Commission, finally relenting, granted the contract. Also under way: a $1,500,000 housing project for Savannah’s 4,000 prospective shipyard employes.

All for Hitler. Frank Cohen is no longer just a smart man with a dollar. He runs Empire Ordnance from top to bottom, works twelve to 16 hours daily. He pays himself $25,000 a year, but he is not doing it for the money. Empire has put all its earnings into expansion, has paid no dividends. Besides 70% of the voting preferred, Cohen, his wife and his son own 45% of the common. But 15% of the common belongs to Esco Fund, a private Cohen charity which has sent vitamins and shelters for children to the British.

Cohen has advanced Esco (against future dividends) $52,000.

Other businessmen often ask Frank Cohen what will happen to Empire Ordnance after World War II. “I don’t know,” he replies, “but I do know we’ll have done a good job.” Last week he stood in his mushrooming factory, his hands folded across his ample stomach, benignly watching the instruments of destruction take shape. Said he modestly, almost inaudibly, with the greatest satisfaction: “These will get That Man.”