Tycoon (j.g.)

Frederick W. (for William) Richmond is a slim, sandy-haired ex-Navyman who at the age of 30 has achieved the rank of tycoon (j.g.). In three short years, Bachelor Richmond (with the help of various associates) has built up a string of seven companies producing everything from machine tools to pots and pans, with an estimated value of $30 million. He has become, as one business acquaintance calls him, "a speculator in companies"--specifically companies that can be bought for less than their asset value. In pursuit of this goal, young Richmond has tapped corporate pension funds, which, he says, "are getting to be the largest source of capital in the world."

Last week the town of Follansbee, W. Va. (pop. 4,435) was up in arms over the latest Richmond deal. What upset the townspeople was an announcement by Republic Steel Corp. that it would buy most of the production facilities of 142-year-old Follansbee Steel Corp., the company that gave the town its name, pack them on freight trains and move them to Gadsden, Ala. The seller: Fred Richmond. Since Follansbee employs 90% of the town's work force, the deal spelled disaster. Said Mayor Frank Basil: "There won't be anything here to keep this community alive."

But for Fred Richmond it was a good way out. Six weeks ago, directors of money-losing Follansbee Steel agreed (subject to stockholder approval) to sell Follansbee's plants and warehouses to Richmond and his associates for $9.3 million.* At the time, said Richmond last week, he thought that he could find a buyer who would continue to operate Follansbee at its present site. But after approaching 18 integrated steel companies with no success, he finally accepted the offer from Republic, even though it might bring doom to the town of Follansbee. Last week Richmond made an offer of his own to the town: he would pay a full year's salary for an executive secretary if the townspeople would form a promotional organization to lure new industry to Follansbee.

Crapshooter l/c. Boston-bred Fred Richmond got his start in business at Harvard, in the Navy's wartime V12 officer-training program. In his spare time, he ran a one-man tax consultant service and drummed up ads for the Harvard Lampoon. Shipped to the Pacific before finishing Harvard, he came out of the war a radioman third class and crapshooter first class. He graduated from Boston University, then used $1,400 of Navy dice winnings to start an ad-sales office.

He switched to exportimport, made his first big deal with an Argentinian who wanted half a million yards of a certain type of cloth. Richmond found the cloth at the War Assets Administration, bought it with credit from a Boston bank for which his father did legal work. On the resale, he cleared $40,000. He soon expanded into steel and chemicals. By 1948, when he was 24, he had an expanse of plush offices in Manhattan and his business was grossing $11 million a year. Then in the recession of 1949 he was hard hit. His business dropped off sharply, and Exporter Richmond decided to become Financier Richmond.

Private Operator. With the help of money from friends, he started by buying W. Ralston Co., a small New Jersey paper converter, for $550,000, later sold out for a profit. In rapid succession, he picked up five more companies, three of which he still controls: Brubaker Tool of Millersburg, Pa. (price $600,000); Toledo's Baker Brothers, manufacturer of automatic factory equipment for Ford, General Motors and others ($1,500,000); Detroit's Gear Grinding Machine Co. ($1,600,000). This year alone, Richmond headed syndicates buying Pennsylvania's Birdsboro Steel Foundry & Machine Co. ($4,000,000), Hydraulic Press Mfg. Co. ($4,000,000), and (last week) Detroit's Republic Gear Co. ($2,700,000). Says Richmond: "I look for situations where the stock is being traded at a price that is sufficiently low so that my offer to stockholders, while under the book value, is still more than the price at which the stock is being traded."

Though he calls himself an operating man, Richmond leaves actual company operations to others. Says he: "I only look after stuff I'm capable of handling--finances and that stuff." As a private operator, Richmond is closemouthed about his associates, who vary from deal to deal. For would-be colleagues, Richmond has a word of caution: "My enterprises are strictly venture capital. It's not like buying Du Pont bonds."

*Texas' Wheeler-Dealer Clint Murchison simultaneously agreed to buy Follansbee's "corporate shell, i.e. cash assets and New York Stock Exchange listing (TIME, Aug. 23).

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