General Dynamics World, Volume 20, Number 9, September 1990 Page: 5 of 8

                                
Col. Henry Crown, 1896-1990

Col. Henry Crown, who died Aug. 14, 1990, may not
have been a household name. Yet he was a well-
known and self-made giant in the business world - so
noted and respected that Howard Hughes once asked
him for a loan to keep Hughes' Trans World Airlines

operating.
Col. Crown and his family
established major holdings in
real estate, railroads, airlines,
hotels, coal mines, building
materials, sugar, meatpacking
and major league sports teams.
He once owned the world-
famous Empire State Building
in New York City, which he
sold in 1961 when it appeared
that a substantial portion of the
family's assets might be re-
quired to tide a young General
Dynamics through one of the
most difficult periods in the
company's history.
He entered the defense in-
dustry in 1959 when he
merged his Material Service
Corp. with General Dynamics.
Largely through his leader-

(From left) Col. Henry C
Executive Officer David
Lester Crown in Januar

ship, General Dynamics evolved into a company
now employing more than 100,000 people and with
sales of $10 billion.
He lived his entire life in Chicago, where the
Crowns give generously to hospitals, schools, muse-
ums and primarily to numerous Jewish needs world-
wide. He earned the rank of colonel during World
War II, when he served as a procurement officer in
the U.S. Army Corps of Engineers. He was awarded
the Legion of Merit, the Army's highest non-combat
award, for his extraordinary service to his country.
Business remained Col. Crown's lifelong pursuit.
But he always felt he had made a bad deal if the man
on the other side of the transaction didn't become a
better friend than before. He became a legend in Chi-
cago business circles and during his lifetime devel-
oped a large number of important national business
alliances. After being discharged from the Army, Col.
Crown became friends with Conrad Hilton and soon
was involved in the development of Hilton Hotels.
But accumulation of wealth never was Col.
Crown's passion. He distributed most of his sizable
fortune into trust funds for his descendants, lived
modestly and gave generously to various organiza-
tions. He refused to ride in a Rolls Royce once given
him for his birthday. In an interview published in
1982, he said: "Money itself isn't the primary factor in
what one does. A person does things for the sake of
accomplishing something. Money generally follows."
Money certainly did not follow Col. Crown into
life. He was born on June 13, 1896, to Lithuanian im-
migrants. His father, Arie, worked hard to support his
wife, Ida, and seven children. The family was so poor
that it couldn't afford to give 50 cents to young Henry
to buy his eighth-grade graduation photo.
He went to work after eighth grade to help support
the family. His oldest brother, Sol, was sales manager
at Chicago Firebrick Co. He hired Henry as a ship-
ping clerk, but that first job lasted only two weeks.
Sol fired Henry after he sent the wrong materials to a
customer.
Soon after, he mounted a letter-writing campaign
to 30 or 40 companies that landed him his second job,
with the Union Drop Forge Co.'s traffic department in
1911. He took high school business classes at night,
and five years later, he and Sol opened a small steel
distribution business. That led to the founding of Ma-
terial Service Corp. in 1919. Sol, Henry and Irving
Crown started the business with $10,000 and bought
carloads of sand and gravel for resale to contractors.
Tuberculosis claimed Sol's life in 1921 at age 27.
Under Henry's and Irving's leadership, Material Ser-
vice grew in the 1920s, weathered the Depression,
and hit its stride during the post-World War II build-
ing boom.
In ensuing years, Col. Crown and his family diver-
sified into many other businesses, but Material Serv-
ice remained their flagship. He and his sons, Robert
and Lester, finally agreed to an offer to merge with
General Dynamics.

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After months of courting, the two companies
joined hands in 1959. Col. Crown intended to serve
as a director on the board and not take part in manag-
ing General Dynamics. But not long after the merger,
the company took a $433 million loss on its commer-
cial airliner venture, at that
time the biggest loss ever in-
curred by a U.S. company. Col.
Crown quickly took action,
persuading the board of direc-
tors to close some money-los-
ing operations and restructure
management. It was the finan-
cial strength of the Crowns'
40-year-old Material Service
and the family's assets-in-
cluding proceeds from the sale
of the Empire State Build-
ing-that were critical in help-
ing General Dynamics through
this tenuous time.
Eventually, differences arose
between Col. Crown and the
brown, then-Chief   new   management, which
S. Lewis and       sought to lessen his influence
y 1981.            at General Dynamics. In 1966
the board of directors exer-
cised its right under the merger agreement with Mate-
rial Service to require that Col. Crown tender his
large block of preferred stock to be redeemed for
cash, or convert it into common stock. The an-
nounced reason for the call of his preferred stock was
because General Dynamics was about to be required
to pay a 5 percent dividend on the preferred stock
after five years during which no dividend was re-
quired or paid.
Col. Crown knew that the company did not have
adequate financial strength to take on the debt re-
quired to redeem his preferred. Therefore, he made
an offer so financially advantageous to the company
that he felt no responsible management could turn it
down. He offered to reduce the dividend drastically
on the preferred stock, and to arrange for a large
insurance company to lend the money to redeem the
stock 2 1/2 years later. In return, he wanted the com-
pany to agree not to redeem the preferred stock for
the same 2 1/2 years. The Board, at the urging of four
of its members and the two senior officers of the com-
pany, turned the offer down without ever presenting it
to its shareholders or advising them of its existence.
Col. Crown did not convert, but took redemption.
The company had to combine loans with money from
its working capital to pay him. That contributed to
General Dynamics' stock falling in the late 1960s.
Subsequently, he bought large blocks of company
stock and by the end of 1969, he and his associates
Col. Henry Crown
holds a model of an
F-16 Fighting Falcon
at the Paris Air Show
in 1981.

had regained a large interest in General Dynamics for
much less money than he had received from the 1966
stock redemption.
He again led the board of directors to restructure
management, resulting in the appointment of David
S. Lewis as chief executive officer. Working together,
the two men charted General Dynamics through 15
years of growth. The period saw the company de-
velop the F-16 Fighting Falcon, a multirole fighter in
the air forces of the United States and 15 other
nations, as well as an array of other front-line weapon
systems for the armed forces. It was during this
period, too, that General Dynamics acquired Chrys-
ler Defense Inc., now Land Systems Division, and
Cessna Aircraft Co.
Today, Col. Crown's son, Lester, who played a key
role during his father's early association with Gen-
eral Dynamics, continues as a member of the General
Dynamics board and chairman of the executive com-
mittee. Lester's son, James, is also a board member.
"My Dad's extraordinary ability, complete un-
selfishness and contributions to so many facets of our
world have been overshadowed only by his remark-
able humility," Lester said.
"The proclamation given to him in 1986 upon his
retirement at age 89 from General Dynamics' Board
of Directors summed it up very well. His fellow di-
rectors paid a most fitting tribute to him with these
words:
'He has given generously to others, but sought no
honors or personal recognition in return. His friend-
ship, once attained, is bonded with loyalty and trust
while his modesty and quiet dignity are an inspiration
to all who have had the uncommon privilege of work-
ing with him and who revere him. Compassionate and
forgiving, he also required that those around him
strive for the highest standards of ethical conduct.
This is Henry Crown's legacy to General Dynamics."'
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