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Add in his friends' stock
and. ..well, who knows?
Coupled with access to the
corporate kitty tor
legal expenses;
"You want us to be another
Xerqx?" the executive
vice president complained.
It's more than enough to
off potential
akpovers. Explains
sJhner: "Mr. Castle took
I? company In a direct
rental attack.... He's
ware that somebody can
teal his marbles."
As Jerome Kesselman
(the name he was born
with), Castle graduated
from New York Univer
sity's School of Commerce,
I and started his own
i. brokerage firm in the mid
i Fifties. A decade later,
! after being suspended by
‘ the National Association of
Securities Dealers for a
I rnonth for sharp trading
P prKktices, he went to work
i tor another brokerage firm
and changed his name to
i Castle. The raid on Penn-
Dixie was
I thought out. A friend
> persuaded the Axe-
Houghton mutual funds to
1 take a big position in the
■ cement company's stock;
i then, improbable as it may
) sound, Jerry talked the
) outside directors of Axe-
Houghton into backing him
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against Penn-Dixle's in
cumbent management.
With the help of several of
Castle's own customers, it
was enough.
Once in control Castle
went on a buying binge
with borrowed money. His
prize acquisition was
Continental Steel in 1969.
In this purchase, Castle
was much helped by the
Penn-Dixie pension funds,
which are said to have
bought heavily into Con
tinental.
But when Castle tried to
take over the Continental
hourly pension fund, the
United Steelworkers went
on strike. Even hiring Eric
Javits, nephew of New
York Senator Jacob Javits,
to tell the Steelworkers
that Castle would make a
swell trustee didn't work.
The Steelworkers went
back to work only after
Jerry agreed to leave their
pension funds alone. But
Castle appointed Javits to
his board; before leaving
last year Javits endorsed
Castle's record com
pensation.
Castle paid an inflated
price, mostly with
borrowed money, tor
Continental; the takeover
nearly killed him.
His banks came close to
shutting him down; only
the sale of Penn Dixie's
prize cement plant bailed
the company out.(Penn-
Dixie insists it was no near
thing.) Yet as soon as he
got out of one scrape,
Castle tumbled into
another, picking up for
about $3.3 million an 18.5
percent interest in
Diversified Industries.
With control of the
marginal Clayton, Mo.
hodgepodge came a couple
of bonuses, tough guy Ben
Fixman, Diversified's
founder, and a Securities &
Exchange Commission
investigation of irregular
practices that is slowly
spreading to Penn-Dixie
itself.
Virtually dept free when
Castle took over, Penn-
Dixie now stands more
than $55 million in debt,
with $33 million in un
funded pension liability.
The company owes S2O
million to banks. What
about them? Are they
satisfied with matters
now?
FORBES called Mellon
Bank's Gary Fiedler, who
negotiated a new
agreement a couple of
months ago that ap
parently gives Castle free
reign with payments he
can easily meet until 1978.
How much of a role is the
bank taking in Penn-
Dixie's management?
Fiedler wasn't talking.
Was Castle's com
pensation in line? We
asked First Penn
sylvania's Robert
Romano. "That's a
director's decision.
Shareholders elect
directors," he said.
National Bank of Detroit's
Robert Van Auken had
nothing to say.
Most Penn-Dixie em
ployees are afraid to talk.
Fear seems to pervade the
company, and even long
ago employees say they
can't talk for fear of
financial and even (they
say) physical retribution.
Some workers confess to
each other that they
believe their telephones
are bugged, their mail
read. They claim Castle
himself keeps a gun handy.
Several former employees
recall that Castle liked to
brag of his connections
with organized crime; they
say he often claimed that
Anthony (Tough Tony)
Anastasia, boss of the
Brooklyn waterfront (and
brother to Murder, Inc.
power Albert Anastasia)
was his son's godfather.
Who knows? Both
Anastasias are dead.
What is fact and what is
fiction? Castle himself
refused repeated requests
to talk to FORBES. His
friends say In his defense
that he exaggerates. Os the
Mafia rumor, for example,
an old friends says, "That
soulds like a typical Jerry
Castle lie."
After weeks of insisting
that it was company policy
not to talk to the press,
Executive Vice President
Harvey Kushner called at
FORBES' offices on the
eve of deadline. Kushner,
50, most of whose previous
experience was in
department stores,
cosmetics and women's
undergarments, joined
Penn-Dixie in 1969. He
explained he had come to
set the record straight.
"We are not trivial
people...We know what
we're doing and we do it
with few people. That's
why I get paid a lot of
money. That's why Mr.
Castle gets paid a lot of
money " What was their
special touch, we asked?
"We run a really tight
ship.... This is really Mr.
Castle's input. He's a very
strict, tight-fisted
executive. He's very
penny-conscious. I'll tell
you the truth: I once asked
the general manager of the
cement division to put
down what he wanted. It
came to SIOO million." But
isn't that what the capital
intensive cement and steel
businesses are all about?
we asked. "Not really,"
replied Kushner. So the
general manager has been
"shelved," the cement
headquarters are closing
and the steel division is
taking over cement.
In spite of Castle's
talent, things have been
pretty dismal Kushner
allowed, which was one
reason Jerry Castle wasn't
talking. "He's more
disappointed than anyone
else.... He's very
distressed, he's more than
distressed, he's
furious.... You want us to
be another Xerox?"
How does Castle square
his "disappointment" and
his company's low rate of
capital investment with
c°°jL "
BY MILDRED E. WARREN
It’s Peach Time in Georgia!
Peaches are here in all their glory,
and nothing is more beautiful or
delicious than “red-gold” ripe
Georgia peach.
This week our Georgia Peach
Queen, Sandra Eakes, visits Perry as
the guest of The Bank of Perry. Ginny
Murphy, home economist of The
Georgia Peach Commission will
accompany Miss Eakes. They will
give guests copies of Peach Recipe
booklets, which will be most welcome
at this season. I have selected three
peach recipes for our Nook this week.
The first one is a Peach Salad for the
warm summer days. Next a Fresh
Peach Relish which was given to me
by Martha (Mrs F.H.) Scarborough of
1002 Ridge Circle. Martha says she
has had this recipe for a long time and
she thought this time would be ap
propriate for this particular one.
Next, I have an easy Peach Cobbler
which has been requested by several.
This one makes its “own crust”, and
is fool-proof.
So, gather up your peaches and
reach for your paring knife—it’s that
time!
PEACH SALAD
2 envelopes Knox gelatin
Vi cup sugar
V 2 teaspoon ground ginger
Dash salt
IV4 cups water
6 to 8 fresh peaches, peeled
2 tablespoons lemon juice
1 carton cream style cottage cheese
Mix gelatin, sugar, ginger and salt in
saucepan - add water. Stir over low
heat until gelatin dissolves. Puree
Cited By Grand Jury
Cops Close Down
Arcade In Robins
The Electric Palace
Arcade on Belmont
Avenue in Warner Robins
was closed Monday after
Warner Robins Police
Chief W.H. "Pip" Rape
decided to pull the
establishment's business
license. The Arcade was
cited by a recent county
Grand Jury as the
"scene...of illegal drug
sales in Houston County."
Arcade owner Benny
Young, who had some time
agg bought It from Warner
Robins Councilman Steve
Morgan, reportedly finally
agreed to close the
business. Young and Chief
Rape both have had
repeated complaints from
nearby residents about too
much noise.
The facility catered to
young people, and served
only cola and snacks. It
featured pool tables,
pinball machines, and
other games. Young at
tempted to forestall the
closing by shutting his
doors at 9:00 p.m., but
found it unprofitable.
Area residents told
police that the arcade was
Ithe scene of numerous
incidents, including cur
HOUSTON HOME JOURNAL THURS., JULY 1, 1974,
thesl million or so he spent
a few years ago
redecorating Penn-Dixie's
Manhattan headquarters
(plus the apartment
around the corner)?
" It says something about
the company," answers
Kushner. "Most people
come and took at us and
they think, 'Penn-Dixie,
that used to be a cement
company.' Now they have
a completely different
image of the company "
Penn-Dixie's steel
operations, beneficiary of
a big capital spending
program just before Castle
took over, are still
reasonably profitable.
Even Its tatterdemalion
cement plants are ex
pected to make money for
peaches to make 2 cups. Stir into
gelatin mixture and add lemon juice.
Chill until syrupy. Fold in cheese and
chill in molds until firm.
FRESH PEACH RELISH
In large saucepan mix well 2 quarts of
peeled, sliced fresh peaches, 1 cup of
seedless raisins, IV* cups of brown
sugar, 3/4 cup of cider vinegar, 2
teaspoons mustard seed, IVa teaspoon
ground cinnamon and Va teaspoon
ground cloves.
Cook over medium heat 45 minutes or
until thickened. Stir frequently. Now
add Va cup of chopped pecans and
cook 2 minutes longer. Pack into 6
half-pint sterilized jars and seal at
once. Serve with meat or poultry.
(This is also good with your breakfast
toast.)
This will be ready to serve in about 3
weeks.
PEACH COBBLER
2 cups sliced, fresh peaches
2 cups sugar
Va cup butter or margarine
3/4 cup flour
2 teaspoons baking powder
Va teaspoon salt
3/4 cup milk
Mix peaches with 1 cup sugar, let
stand. Pour butter in a 2 quart
casserole and place in a 325 degree
oven to melt. Combine remaining
sugar, flour, baking powder, salt and
milk. Pour over melted butter. Do not
stir. Spoon peaches on top of batter.
Do not stir. Bake at 325 degrees for 1
hour. Serves 4 to 6.
“PEACHY COOKING!”
sing, beer drinking,
loitering, and alleged
marijuana smoking. The
★ TOTE*
FOR TOUR FAVORITE FLOWER!
Help America Pick an Official National Flower
The United Slales.is one of the few The results will be presented to
countries in the world that does not Congress, which must act to name
have an Official National Flower To a national flower To vote, just visit
correct this, FTD Florists through our shop during July There are 28
out the country are conducting a (lower candidates" on the ballot
Bicentennial Flower Election plus space for a write-in vote
during July, 1976, so you can Everyone is eligible and, of course,
vote for your floral favorites no purchase is necessary
am* Bicentennial
wf] egx Flower
Election
WE HAVE BICENTENNIAL CAPS
PERRY FLOWER & GIFT SHOP
1010 Macon Street Perry, Ga. 31069
PHONE 987-1656
Perry’s Exclusive FTD Florist
PAGE 7-B
a few years, until rising
fuel costs and new
competlton converge.
Many steel analysts see
the same dismal pattern of
deprivation and bad
decisions at the top
repeating itself with Penn-
Dixie's steel business- but
ever so slowly.
But what happens when
the facts of business life
finally catch up to this
over borrowed, under
profited company with Its
aging plant? When the cow
finally runs out of milk It
will probably be the public
stockholders, the
jobholders and the pen
sioners who suffer. Jerry
Castle and Harvey
Kushner will have theirs.
present grand jury had
reportedly joined an effort
to close the business.