Keeper of the Coins

Standing on a Chicago el platform one day in 1928, a lean, mild-mannered New Englander named Nathaniel Leverone idly started feeding coins into the vending machines and got madder by the minute. "I weighed myself on a penny machine and found I weighed 205," recalls Leverone. "Another machine said 98. A chocolate machine gave me nothing, not even my penny back. Out of a peanut machine I got six moldy objects I wouldn't feed to a goat." Businessman Leverone got sore enough to go to work to teach the vending-machine business a lesson in honesty--and see if it would not also prove profitable. With $60,000 he founded Chicago's Automatic Canteen Co. Last week Automatic Canteen, unchallenged leader of a booming $1.7 billion industry, counted record sales of more than $51 million in the first six months of its fiscal year, with profits topping $1.1 million.

Slugs, Slugs, Slugs. At first Leverone felt like a pullet plunging into a weasel den. A Dartmouth graduate ('06, Phi Beta Kappa) and a successful real-estate operator who was also secretary of Chicago's Crime Commission, he found a business controlled by sharpers and racketeers; chewing-gum sticks were cut in half, sold for a penny apiece; undersized chocolate bars cost a nickel; peanuts costing 8-c- per Ib. dribbled out at the rate of six per penny. And when the machines ran out of merchandise, they returned nothing but a hollow, insulting clank. Leverone hired an engineer to design an honest machine that would return coins when empty, then contracted with well-known candy-bar manufacturers to supply full-sized bars for a nickel, used neatly uniformed, bond ed employees to service the machines honestly.

But Leverone soon found that if vend ing-machine operators had been crooked, the customers were worse. In its first year Leverone's company took in $30,000 worth of slugs. Undaunted, Leverone and his engineers installed magnets to winnow out iron slugs, developed a three-fingered scanning device to reject slugs with holes in them. To reject more sophisticated slugs, he inserted a small anvil in his machines just below the coin slot; coins that were either too hard or too soft bounced off the anvil into slots leading to the coin-return chute. When cheaters dis covered slugs with just the right bouncing qualities, Leverone's engineers countered with electrical devices to test conductiv ity, gauges to measure dimensions, gadg ets to bite for traces of lead or tin. But for years, as fast as Leverone improved his machines, ingenious customers found ways to cheat them, including ""tapping"," i.e., tilting the machine and whacking it.

Says Leverone wryly: "Funny thing about coin machines. When somebody hits on a way to beat them, the news travels coast to coast in a flash."

At the 1933 Chicago World's Fair, Leverone's men were baffled for days by empty machines and equally empty coin boxes. Finally a friendly onlooker tipped them off: a man had drilled a tiny hole in the edge of a nickel, attached a fine wire so that he could drop his coin in the machine, then pull it out again. Leverone solved that one by inserting a pair of snippers in each machine. But the idea swept the U.S., and Automatic Canteen suffered heavy losses before it got all the snippers in. Still another early trick was the "disappearing slug." Workers in a refrigeration-equipment plant made molds the exact size of nickels, filled them with water each morning and quickly froze a day's supply. Fortunately Leverone's biters, scanners and measuring devices put a- quick end to the icy jackpots. Today, with all the safeguards, about the only way to beat an Automatic Canteen is with a perfectly sized, almost pure nickel slug, and anyone who goes to that kind of trouble for a candy bar, says Leverone, "deserves it."

Complete Dinners. With 300,000 machines across the U.S., Leverone currently hawks and almost always collects for dozens of items, from sandwiches and pastries to ice cream, coffee and cigarettes.

At 71, Board Chairman Leverone has turned over much of the day-to-day operation to Vice Chairman Arnold M. Johnson, big-dealing real-estate operator and baseball magnate (Kansas City Athletics), who joined the company in 1951, helped boost sales 170% in five years. Together they plan bigger and better machines with enough variety to stock an Automat --huge, crackproof robots to dispense hot, complete dinners at the tinkle of a coin. Says Leverone: "We taught the public it could expect honesty from a machine with the word 'Canteen' on it. We also taught them they'd better give us honesty in return, or they'd sure as shootin' get their coin right back."

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