MAKING CRIME PAY

EVERY industry has its own sensitive indicators, be they birth rates, bank rates or crop forecasts. The FBI's recent report that the U.S. crime rate is running a brisk 19% ahead of 1967 came as no surprise to one industry whose prosperity is judged by such statistics. Crime and civil commotion are paying off handsomely for the hundreds of scattered, mostly small companies that sell goods and services to the rapidly growing law-enforcement market.

On Wall Street, the cops-and-robbers business is getting the sort of play that once was accorded to aerospace and the Pill. The stock of Pinkerton's, Inc. (see BOOKS), the 118-year-old outfit that went public in 1967 at $23 a share, is now trading at $51. Federal Sign and Signal, a Chicago maker of police sirens, has gone from $19 to $42 in the past year. American Safety Equipment Corp., whose sales of $26.75 police helmets more than tripled in 1968, has jumped from $10 to $16. Other companies in the police market have seen their stocks rise by 50% to 75%.

Losing the Fight. And why not? Spending on law enforcement in 1968 totaled nearly $1.1 billion, up from $930 million in 1967. The money went for a variety of services and hardware that includes 800 police whistles, $170 sirens and $100,000 helicopters. Such spending will grow at least 10% annually for the next five years. The Safe Streets Act, which Lyndon Johnson signed in June, will increase federal anti-crime aid from $63 million in 1968 to as much as $500 million in 1972. Richard Nixon also wants to strengthen the nation's undermanned police forces and generally "make it less profitable and a lot more risky to break our laws."

All that promises to be highly profitable to the industry. A growing suspicion that the police are losing the fight against lawlessness, which will cost $20 billion this year in thefts, riot damage and other losses, has steadily increased the business of suppliers of private guards and security equipment. But most of the thrust is toward providing new, nonlethal hardware for the police, whose basic gun-and-billy-club arsenal has changed little in 100 years.

Some new entrants in the field have novel ideas for handling riots. Fort Worth's Western Co. of North America, an oilfield-service firm, has developed a slippery powder called Instant Banana Peel, which is guaranteed to turn any street rumble into a sit-in. Baltimore-based AAI Corp.. a defense contractor, has come up with a tear-gas grenade with two crowd-control virtues: it has no shrapnel hazard, and it expels its chemicals in seconds--before it can be picked up and pitched back at the police. A company official says that its grenade sales doubled in 1968, and will double again as soon as "the riot season starts."

Up from Billy Clubs. Though the industry remains balkanized, takeovers and acquisitions are increasing. The biggest and broadest-gauged company in the field is Bangor Punta Corp., a Manhattan-based conglomerate that has acquired five suppliers of law-enforcement equipment over the past three years. Among them is the maker of Chemical Mace, the liquid-tear-gas spray. Sales of law-enforcement equipment now account for about 9% of the Bangor Punta's $259 million annual sales and 30% of its $22 million pre-tax profits. The company broke into the market in 1965 by acquiring Smith & Wesson, whose revolvers are carried by 85% of the nation's policemen. At that time, recalls Bangor Punta President David Wallace, "we didn't foresee any social revolution." But Smith & Wesson's sales have since risen from less than $10 million to $16 million. Wallace is now capitalizing on the philosophy that "the more social unrest there is, the greater the need for lawenforcement equipment that is more sophisticated than the billy club."

Under the aptly named chief of its Public Security group, William Gunn, Bangor Punta is rapidly becoming the Abercrombie & Fitch of law and order. Fully equipped by the company, a cop could use a Bangor Punta Dominator radarscope to spot a speeder or car thief, signal him to stop with a Dominator siren, pull out a Smith & Wesson .38 and pull on a Lake Erie gas mask, flush his quarry with Lake Erie tear gas, immobilize him with Mace, bring him to with a Stephenson resuscitator, check him for alcohol with a Breathalyzer, and slap on Smith & Wesson handcuffs.

Point of Honor. The company's research-and-development department never ceases. A Bangor Punta subsidiary, General Ordnance Equipment Corp., which has done very well with its highly profitable Mace, has another comer in a 25-lb. device that generates a billowing smoky haze called Pepper Fog. The $395 tubular generator can be slung and aimed from the shoulder, and it has cleared 400 rioting prisoners from a large building in 2 1/2 minutes. The company, having sold what it had thought would be a full year's supply in four months, has lately increased production facilities fivefold.

Unlike the old European munitions makers, who made it a point of honor to sell to all comers, the U.S. law-and-order suppliers usually cater only to the police. Though some states ban sales to the public of items like tear gas, the industry generally operates under its own self-imposed restraints. The police market, after all, is likely to boom for quite some time. "Even if the students really organize a peace movement instead of rioting," says Gunn of Bangor Punta, "it won't happen overnight."

This file is automatically generated by a robot program, so reader's discretion is required.