Wednesday, August 24, 2011

Turning Plowshares into Swords--Roy Cohn and Lionel

During World War II many of America's factories with machine-tool capabilities, were switched by the War Industries Board into manufacturing weapons for war use. Lionel Corp. made toy trains out of metal and was easily adaptable for this purpose.

Joshua Lionel Cowen, an avid inventor, had founded Lionel Manufacturing Company in 1900--after patenting a mine-detonating device he sold to the U.S. Navy--to turn to making toys for young boys. Retiring from the business in 1958, he sold it to his great-nephew, Roy Cohn.
Joshua Lionel Cowen (who had changed his name from Cohen) was at that time alive and living in Florida (until 1965). His son, Lawrence Cowen, had been the company's president from around 1945 until he was named president of the safety razor company called Schick in the spring of 1960.
Cohn's mother, formerly Dora Marcus, wife of Judge Albert Cohn, was the daughter of J. Lionel Cowen's sister, Mrs. Joseph (Rachel Celia Cohen) Marcus. Thus, Lawrence Cowen and his sister, Isabel Cowen Otis Brandaleone, were Roy's second cousins. Lionel Corp. was losing money, and the founder's children went into debt to help Cohn bail out the toy train manufacturer.  Lawrence resigned as president in October 1959 but not replaced until August 1960, when a Army General Medaris was elected to the position, where he would serve almost three years.
Roy Cohn, labelled by the Berkshire NY Eagle on Oct. 20, 1959 as "the young cigar-smoking lawyer," was said to have recently headed a group which 
"purchased most of the 200,000 Lionel shares from members of the founder's family at $15 a share, some $5 over the market value at the time. 'We didn't want a proxy fight,' he emphasized....The group is keeping many officials of the old management in the top operating posts. A president for the company has not yet been selected. 'We are considering several candidates and will make a decision shortly. He probably will be an outsider.' Cohn. 32, was a graduate lawyer at 20. His father was the late Justice Albert M. Cohn of the New York State Supreme Court's Appellate Division."

August 8, 1960 - General Medaris Heads Toy Firm
NEW YORK (AP) — Maj. Gen. John B. Medaris, former head of the Army rocket and guided missile program, today became president of a toy train manufacturing company.

Lionel Corp. announced Medaris' new position. He also was elected a director.

Lionel has been without a president since last October.

Lionel has long been the nation's largest manufacturer of electric trains and accessories. It also makes other electric and mechanical toys, chemistry sets and sporting equipment.

The company also manufactures an explosive switch with broad applications in bombs, missiles, rockets and mines.

Medaris resigned from the Army in January. At that time he claimed the United States' "reluctant dragon" attitude toward space was leading to disaster.

There was a short-lived rise in the stock's value the year after Medaris took over, but then by 1963, as Time magazine described events, Lionel:
lost $2,500,000 in 1961, another $4,000,000 in 1962; Cohn shucked off several of the new subsidiaries and eased out General Medaris. Last week the word went out that Cohn was surrendering the controls at Lionel. First step: granting options for his 55,000 shares to a group headed by Manhattan Entrepreneur Victor Muscat [often referred to as the "toothpaste tube tycoon"]. The Lionel shares that he bought for $15 each closed last week at $6.50, which even at that represented a $1.25 rise for the week on news of Cohn's retreat.
The Muscat Family of Brooklyn founded United American Metals in 1889. Like Lionel, their factory was also converted into making armaments during World War II. After the death of the patriarch, Lazarus Muscat in 1944, "Victor Muscat, branched off into Victor Industries and became the largest produce of collapsible tubes in the country; producing Tin-base, Lead base and Aluminum tubes for the pharmaceutical, dental and general trades."

There is definitely more here than meets the eye. 

General John B. Medaris holding a model of the Redstone rocket -Fairmont Hotel, San Francisco May 17, 1957. (U.S. Army, courtesy of Medaris Collection, Florida Institute of Technology.)

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