Leonard Levine, Leonard Levine Metals Corp., Northbrook, Illinois. Interviewed March 1998. Courtesy of the Institute of Scrap Recycling Industries (ISRI). Transcription by Speechpad.
Leonard: Yes, I had just started college. I went to Brooklyn College in Brooklyn, New York. And at that point, I couldn’t afford to go to day-college so I decided to quit the day college part and I took a job and I started night-college. And the job was I worked in an office at International Minerals and Metals Corporation. They were the buying arms for Phelps-Dodge the refining corporation plants in Laurel Hill, Long Island, and Douglas, Arizona, and El Paso, Texas.
I worked there for about a year, I started 1947. In 1948, they needed a buyer and the head buyer at that time was Ted Gruin [SP], and Harry Turkel and they sort of were my mentors. There was a question of whether to take a full-fledged scrap man or try someone from the office. So I guess it was Harry Turkel’s urging, they decided to give me a break. And they said that they’d like me to be a buyer and to travel Upstate New York and some parts of western Pennsylvania for them. And that’s how I got started in the scrap business.
Interviewer: What were you studying college at the time?
Leonard: I had taken up psychology. I needed it at that point for the scrap business.
Interviewer: What was it that interested you about the scrap business to make you want to go that way?
Leonard: Well, of course, at the point that I just took the office job was just to make some money that I could afford to go to school. But after traveling around and seeing the scrap business as the scrap business, not a junk business which everybody outside the scrap business thinks of it, I was very, very impressed and amazed as to the extent of all the business that the scrap business presents. And also that the people, the scrap dealers at that point were very, very, very nice.
I mean, they all accepted me as a young kid without any experience and they were really so nice. I mean, they all taught me the business, they all took me to the scrap yards and they showed me their… at that point of the scrap industry, their wealth was in inventory. And they were so proud. One man looked up he said, “You see that pile of scrap,” he says, “That’s number one copper, that’s number two copper.” That’s how I learned the different grades of copper. I had no idea what number two steel or number two copper was at that point. But they were very, very nice and that’s when I decided that I will stick to it.
Interviewer: What did you say you were doing for International Minerals and Metals in the beginning?
Leonard: I worked in the accounting department. And it was soon after the war, and after I came in, the company was successful better. I think at that point from the British government, they bought about 50,000 tons of shells, surplus shells, of which started to come into the country. And where we had to start a whole new accounting system to work out the shells. So I was the main person doing it at that point, and that’s how I got familiar with the scrap and with the buyers of scrap. And with the efforts that I put in, they decided that they would give me a chance to be a buyer.
Interviewer: How long did you stay with International Minerals and Metals?
Leonard: I worked for them for about 26 years.
Interviewer: All out of New York?
Leonard: No. They moved me to the Chicago office in 1954. And I worked there till 1973 when at that point they merged with Brandeis Goldsmith. And they decided that they didn’t need a Midwest office. So they gave me a choice of coming back to New York or doing what I want. And at that point, I decided to go into my own business. So I’ve been in my own business since 1973 as a scrap metal broker.
Interviewer: How did your job duties change over the years when you were still with International Minerals and Metals?
Leonard: Well, the change is not so much in our duties as it was in the industry itself. Years and years ago, the price structure was such that it didn’t change. You know, if it changed an eighth of a cent in six months, it was a big, big factor, you know. Today it can go up or down 5, 10 cents a day. So at that point, it wasn’t so much calling the scrap dealers and informing them of the scrap prices as it was just a goodwill trip, of course, visit them and you know, make contact with them. And when they were ready to sell, they would call you.
It wasn’t a point like it is today where you call them up, and say, look copper is up 10 cents or down 5 cents, maybe you’d better sell or buy. It was just hitting them at the right time when they were ready to sell. It wasn’t a matter of any fluctuation in prices. In fact, years ago, when we came to a big meeting like this, I think there was an internal revenue code that if you wanted to write off a convention trip, you had a show that you did business at a convention.
So for three months before a convention, we did no business. I mean our bosses drove us nuts go out on the road you know, what are you sitting around because you know, prices didn’t change and everybody wanted to sell. So I remember going to my first convention, in fact, was from New York to Chicago. And Harry Turkel, who was my immediate boss said, “You know go there, take a pad in the lobby and you’ll see what will happen.” And I did that and Harry Turkel and myself we stood in the lobby and people lined up to come over saying send me an order for number two, send me an order for this, send me an order for that. And under contract, we used to type that as per the sale was made as during a convention of such and such.
Interviewer: That’s interesting.
Leonard: Yeah, it was a completely different… it was a more personal business. You know, they sold you the scrap because of you, not because of price because the price wasn’t any different than any other situation. So it was a lot of fun, we really had a lot of good times doing business.
Interviewer: Hi, David.
Interviewer: Hi, you’re not supposed to be here until 1:15.
Interviewer: You’re supposed to be at 1:15.
David: This isn’t 1:15?
David: Oh, then I’ll tell them that. I’m very sorry.
Interviewer: That’s right. Herschel is expecting to interview at 1:15 but he went to get a little lunch.
David: You got different times.
Interviewer: Yeah, I’ve got 12:15. So if you will just be back here at 1:15 he will definitely be ready to talk to you.
David: Okay, thank you.
Interviewer: So please just… I’m sorry for all the confusion.
David: It’s okay.
Interviewer: We are expecting you. Sorry. Sorry for the little interruption.
Leonard: That’s okay. But you know, it was a different way of doing business. And even traveling now is different, when you go to a scrap yard you’re you know… it’s like running corporations now. When I traveled years ago it was like going to mom and pop operation where you know, you did business direct with the owner, and he did this sorting, he did everything himself. And it was funny I was a young guy and everybody wanted to introduce me to their daughters or cousins or nieces or something like that.
And as a result I had to stay in cities longer because you know, I didn’t want one dealer to know I was taking someone else’s dealer’s daughter out. So I wound up you know, staying on a road for four or five weeks at a time instead of one or two weeks.
Interviewer: That’s funny. Did you meet your eventual wife that way?
Leonard: No, but I met her through a scrap dealer. It’s funny. I had just become a buyer and there was a meeting again in Chicago and I went to Chicago. And I didn’t know too many people. And I bumped into another man, and he introduced himself and it happened to be a scrap dealer from California that was in for the Chicago meeting. And since I didn’t know anybody and he sort of was floundering around a little bit, you know, we got to know each other. And he says, “I’m gonna be in New York after the convention.” He says, “I’ll look you up.” I said, fine, you know, I gave him my number.
And, sure enough, about a week later, he called me up and he says, “You know, here I am.” He says, “By the way,” he said, “I have a friend who has a daughter, who I think you’d like to meet.” So I said, sure. And he gave me her address and she lived… my wife lived on Long Island, and I called her up and from that time on. So unbeknownst, I did meet through the scrap business.
Interviewer: That’s great. You were just talking about how the relationships are defined and changed. When did you start noticing that the industry was getting to be more professional or that kind of thing was changing?
Leonard: Well, I think you can call it the… is it the baby boomers started to come into the industry. They started to look at equipment, and they started to put in the computer. So in other words, it got away from this mom and pop operation into a corporate type of business with more equipment. And even today, when you go to a convention, as you see you have all these exhibit halls, which I’m not saying it’s bad, it’s good, you know, you gotta go ahead. So that has changed you know, it’s more of a mechanical business now. And the environmental picture trouble has come in.
So the owners and the sons and these baby boomers, are more interested today in running their business than years ago when it was just sort of you buy and sell you come in, you know. It became more of a corporate type of operation. And it’s taken away from the personal interest now because they have to be more competitive, there’s more expenses with all these big equipment that they have to run.
So it has changed, but you know, it’s like everything else, you have to go ahead, but you can’t go back. So I think the change is for the good of the industry and also for the good of the owners of the companies. As you can see, all these big companies now are trying to swallow up all the other companies that they feel are ready to go ahead. So by making the choices of buying equipment and growing and whatnot, I guess it’s proved to be correct.
Interviewer: Let’s go back for a minute when you started your own company, you started in 1973?
Leonard: Right, yeah.
Interviewer: And it was Leonard Levine Metals Corp?
Leonard: Yeah, I thought I’d be original
Interviewer: What was the focus of your business when you first started?
Leonard: It was a scrap brokerage. I knew all these people who, you know, I got to know him very well. And I felt that there was a need for someone to feed them information where they didn’t have to make 25 calls to find out what number one was, what number two was, what aluminum scrap was. And that if I could call them every day on that basis and give them an honest information of what the general markets are, it would be a service of them. Being that they had less time now to go fish around for prices that they did years ago.
And that proved to be successful because I made a lot of friends in that way. And naturally, they sort of stuck with me. And I sort of try to you know, keep my word and everything. And if the prices aren’t good, I tell them, you know, that I really can’t help you at this point, you know, there aren’t better prices around. But, you know, I feel sort of obligated to them and they feel sort of obligated to me in a good way, you know, in a friendly way. Not in any way where they owe me a favor, I owe them a favor. So it’s worked out very good.
Interviewer: Are you adjusting to non-ferrous?
Leonard: Yes, just strictly non-ferrous.
Interviewer: How large was your company when you started out? Was it just you?
Leonard: I started by myself, and I had kept a secretary that I had when I was working for International. In fact, I kept the same office, so the only thing I changed was the phone number. So it was very easy change for me to make. And then I brought my son and Matt Levine, who you know, about four and a half years ago and he sort of expanded on the business more so than what I thought it would be. Because I really wanted to take it easier now I’m working more than I thought I would. But it’s a fun business you know, it’s…
Interviewer: So it’s just the two of you and the secretary?
Leonard: The two of us, and the secretary has been with me for about 20 years. So she’s really also a buyer you know, like we’re both here now, she attends to the business. She’s a very bright girl and very successful with us.
Interviewer: Now, on the broker side of the business, let’s talk about some of the changes you’ve seen as far as brokerage. I mean are brokers as prevalent in the market anymore? Are they used in the market anymore or how is…?
Leonard: In the copper end of it, there are about the same amount of brokers that we had 10 years ago. You don’t see too many coming in and expanding because there really isn’t that much room for it. In the aluminum business, it’s completely different I mean, there’s loads, and loads, and loads of brokers because there’s so many more consumers of aluminum. And also there are so many aluminum… the value of aluminum is much greater than it is with copper.
So, in any one particular meeting like this, there may be four or five brokers of red metals, where they may have been like 50 brokers of aluminum here. So, it’s sort of a narrow field and once in a while we get a new one coming and going, but there’s no great expansion in it.
Interviewer: What are the main challenges for you as a broker that have happened over the years? What are the difficulties you have to face in your position as a broker?
Leonard: Well, the first thing naturally is they want to be advised whether to sell or not to sell. Well, you know, that’s like playing the commodity market. You know, I try to tell them how the situation is. We get all our news information together in the morning and we get the markets from the stockbrokers and from the London market. And we try to piece it together without being too committal because, you know, we really don’t know if it’s going up or down, but we have reasons why it should go up and reasons why it should go down.
The world situation changes. So that’s information that you know, we have to put together to give them. On the other hand, we have… the biggest problem is when people ship material that’s been rejected. Then that involves… I mean, it’s not a simple thing being a broker because, you know, we get involved in that. When a client rejects something that a scrap dealer ships in, it’s our responsibility to… the client calls us we have to call the dealer and find out why was it rejected and what they can do. And try to help them out in the most effective cost-wise way.
And so that’s another purpose we serve where we take all the pressure and time off of the scrap dealer and we try to handle it in the best way possible. And it does save them a lot of work and also we try do it at a minimal cost to them. Because it’s gotta be reshipped, replaced, resorted. So with our experience, we use certain dealers within that area that’s rejected. Or we try to switch it over to different places to where we feel it would be accepted.
Interviewer: Any other concern, I mean you brought up the quality idea I guess, the quality of the material you’re dealing with. What day to day you know, hassles or things that keep you up at night about the business, any other aspects of it, like the volatility of the prices, you know, your position having to always be hedging, what kind of thing bothers you like that?
Leonard: Well, the hedging that’s Matthew’s business. I mean, if it was up to me I don’t have the time to concentrate on it. He does and he trained at the Commodity Exchange when he graduated Southern Methodist University. So he worked there and he has a good training, a good background for it.
But there is a… it’s not a risk, but there is a danger to that where if you let a scrap dealer take too many open positions, you know where they feel the market is gonna go up and it constantly doesn’t go up, it constantly goes down. It’s not the best thing in the world where they could have sold for 10, 20 cents a pound higher now they are taking a loss. So we have to tread water very, very gently. We can’t say the market is gonna go up or down or you know, they ask should I leave it open or should we price it?
No, we have to be diplomatic in the sense that they should use their own judgment. And, somewhere along the line, they have to set themselves a goal, that if it goes up at a certain level or down a certain level, I’m gonna get either in or out. And make that decision and not not gamble all the way. Because I found over a period of all the years in it, then it becomes like Las Vegas. And you know, Las Vegas, the odds are against the customer and for the house. So, that’s one of the things that I feel is very, very important. Not to get yourself in a bind or being a gambler saying, you know, do this and do that.
Interviewer: Has the market changed from when you first were you know, starting your business to now as far as the volatility of the market, the influences on the market, like just involving the funds, maybe in the metal market, has that really…?
Leonard: Oh sure especially… you know, we come in the morning we see what the London market did, then the New York commodity market goes according to that. And the funds are a big, big factor more than they were years ago, that’s why we have such big price fluctuations now. Because before it was the individual person that did the gambling or some of the cooper companies. But now you have to fund money which as you know, it’s just you know, abnormal. And naturally they don’t make a market go up or down but they help make it go up when it does go up and they help push it down when it does go down because of the volume.
And then also they sort of use a computer, you know, the computerized that tells them that if it gets to such a level, sell. It doesn’t necessarily go up or down because of a situation in the copper industry but because the computer has said that at such and such a level, you start to dump or you start to buy. So it’s becoming more of a speculative business. And that’s why in our dealings with the scrap dealer, I try to soften that by not letting a scrap dealer take a wholehearted gambling situation, but to sort of nail their profits and losses down to a level where they don’t get hurt.
Interviewer: Let’s talk for a minute about your consumers, people you sell to. Has that changed that much over the years? I mean, when you’re doing…are you selling to a certain sector a lot more in the beginning than you sell to now or do more international selling than you’re doing now. How has the consuming sides changed?
Leonard: Well, the international situation has changed because we used to ship a lot of material overseas to Europe and to Japan. But in the past five or six years, that has changed because Europe was in a recession and now that they came out they have enough of their self supplied scrap. And of course, you know, the Asian situation now is such where when China first opened up, they started to buy a lot of scrap that really helped the copper industry, but they ran short of money eventually and so they curtailed that.
So the export business at the present time in the last year or two has not been very great. Now the consumers in this country have stepped up their buying procedures. Naturally, they have… with the increase and the growth of technology they put new equipment. And two, and with that equipment that they can detect impurities much, much more now than they could turn 10, 15 or 20 years ago. So the material scrap dealer has to be a lot more careful and put more time into sortation than they did years ago.
Because years ago if there was a little piece of it they said okay, let’s put it in and you know, we’ll see if we can get away with it and whatnot. But today the [inaudible 00:24:14] that they could spot if there’s any alloy tin or aluminum, or lead which are bad alloys for copper.
Interviewer: Well, let me see here what else I’m gonna ask you here. Sorry, I just sort of lost my train of thought. Oh, I was gonna ask you, did you ever consider along the way going into the processing side of the business?
Leonard: I have, and I had people come to me. It’s a very interesting question. But, you know, in talking to all the scrap dealers and seeing all the problems that they have in running a physical operation, and the problems of keeping laborers you know, intact where they need… someone doesn’t show up and someone has other problems. I decided after a while that… after several really firm discussions that I think I stay with what I’m doing. You know, I may not have the chance of growing like, you know, expanding if I had a physical scrap business. But then, on the other hand, I felt at this point in my life, I don’t want to go into those. In other words, I would never go on for the job of being president of General Motors, I’d be satisfied as a lower executive.
Interviewer: Have you in your career been involved much in the industry organizations, the trade association much?
Leonard: Oh, yes. When I was… originally there were three different names. I think it was National Association of Secondary Material Industries and the National Association of Recycling Industries. I was on the board of directors several times, and I was a member of the membership committee for several years. I also was chairman of the Midwest division for two years. And that sort of dropped. After that, I dropped down because my business expanded a little more. And since we’re still working with myself and my secretary at that point I didn’t have the time to put in to continue in the organizations. I was head of the Chicago chapter at the Scrap Iron Institute for a while too
Interviewer: Well that [crosstalk 00:27:02].
Leonard: Someone’s getting married.
Interviewer: They still wanna be like over settled you’re saying here. Has the current consolidation and any other trends going on in the industry now make your business any more difficult or has changed it in any way?
Leonard: I discussed that with Matthew, as soon as it was beginning to happen and I said, you know, is this gonna be a problem for us? You know, where individual dealers had been calling us and now it’s all controlled by one or two sources. And we thought that it would affect us. And in some areas it has, some of the scrap dealers that were selling us are not selling us now. But on the other hand, I had some scrap dealers who were involved in these mergers and buyouts, and they produce so much scrap that they are looking to sell someone else for two reasons.
One is to spread out the risks of selling too much to one company. And also in slow times, a consumer won’t take the amount of tonnage that they could offer. So they need someone like a scrapper like we are to look for other outlets for them. And also to divert their risk of shipping everything into one area. So I haven’t found… for everyone we lost I think there was something we gained. So I don’t think it really has affected us in any way. And I think the more mergers that come on or buyouts that come on, I think that will continue to happen. That somewhere along the line once they reorganize and have one buying and you know, one selling area for them that then we could keep after them too.
See right now we don’t know who to call, you know, like, whatever company they own five or six or seven different companies. But I told Matthew, let’s stay in touch with the individual people and if at this point, we may not buy something from them, I think eventually they will have to. So it was a worry for a while, but I don’t think that would hurt us at all.
Interviewer: At this stage in your career, are you gonna continue to wanna stay actively involved for a long time or [inaudible 00:29:45]?
Leonard: I will yeah. I’m not a golfer and I play tennis but you know, you can’t play tennis eight hours a day, I don’t have the strength for that. So I think that I would like to take it a little easier but at this point, since Matthew came in, and he brought in a new dimension in our brokerage business, and he’s putting a new computer system which I’m trying to learn, you know. I haven’t been in school for so long. But it’s fun, I enjoy it. And as long as you know, the people are nice and we’re really all friends you know, everything we do is on a friendship basis. And I would like to, say, take off for six months just to do things that I wanted to do that I never did or something. But at this point, I just love going to work.
Interviewer: That’s great. Now you mentioned computers, I’m sure they’ve brought some added dimension to your business compared to how it was before the advent of computers. How was it done back then you know, keeping up with prices or finding out what’s going on in the world, and how is it done now?
Leonard: Well, the computer hasn’t changed that phase of our business. The computer changed our accounting systems and our record systems more so than anything else. I don’t know of any way we could feed price changes or whatnot into a computer or situations where this one plant goes on strike and whatnot. I don’t think that part of it has changed. But the computer… and it has changed as far as accounting procedures, as far as inventory procedures that they can keep up and stuff. But as far as the pricing, I don’t think it could ever change that.
Interviewer: How about the prices you get that are over like … about this the America-London Metal Exchange, the COMEX Prices, name it. Did you have another source to find those out in the older days?
Leonard: Yes, the telephone.
Interviewer: That’s how you do it.
Leonard: Yeah, we had to call New York every five minutes or every three minutes. What we did is in order not to bother someone all the time, we found three or four people that have screens and we would call you know, one minute call them next minute call the other party, and we kept track. It’s amazing you know, when you look back you don’t know how you ever did business in the old fashioned way. But I guess you know, if you don’t know any better, that’s what it is.
Leonard: Yeah. I mean, now, you look at a screen and you can see a change every second. But how we kept track of what the prices were, I don’t know. But I think also years ago, the scrap industry did not use the commodity market for a hedge as much as they do now. So you didn’t need any reason to be up to date every minute you know, on the changes in the commodities. But of course now since they buy and sell… even the consumers yields the commodity markets as a hedge. So now it’s a different situation where you need to. I mean, it’d be impossible we couldn’t operate at all without a screen showing you know, second to second changes. And the same with the consumer.
Interviewer: Do you feel that now you’re better informed so it’s easier to run your business because of those things or was it just an easy…
Leonard: Well, no, it’s easier. It allows us to do more business because it gives us another avenue of buying if someone is not interested in selling right now, but they may know that the spreads are such that they wanna keep that so they could sell us without the spread and price it later. And that business we probably wouldn’t have had years ago. If someone didn’t wanna sell that was it we just didn’t do the business. But now at least we can feed on that and do that business that we couldn’t do before because of the hedging situations.
Interviewer: You mentioned deals or business being done on a friendship basis. Do you find that has stayed constant over the years or have you found over the years it’s gotten you know, less handshake kind of business, more formal?
Leonard: I think with the baby boomers coming in, it’s gotten a little more formal, yes. But because first of all, my age, you know, I’m a little older than they are. But to me, it’s a little more formal, but I look at Matthew and his friends now and I would say that it’s still on a friendly basis. I would say that. For me, it’s a little more formal, because most of the old-timers are not there anymore. I don’t travel as much. So while I know all the younger people coming in, I’m not that friendly with them. But now that you mentioned it, I look back at Matthew, what he’s doing and he’s still operating the same way I did.
Leonard: Yeah, I think the scrap dealer though, they’re a little more inclined now to shop around a little more because you know, they’re more of a competitive edge now that they have to find, which rightfully so. So I think whereas before they say, “Okay, Lenny, send me an order,” today it’s not done that way. They make sure that they can’t get any… that this is it before they would take an order.
Interviewer: Let’s digress for a minute and talk about a whole different subject. When you first got into the business for International Minerals or even starting your own business, what was the image of the industry? Did you feel this was a noble profession at the time or did people look down on what you all did at the time or what was the feel of the business?
Leonard: Well, of course, based on what I heard, you know, the junk business is always a junk business, you know. People outside the industry thought of it as a dirty business and they’re not honest and stuff like that. And when I got into the business, I thought the same thing but not sitting in the office when I started to travel. But as I got into it and realized how we do business, I found that it was more honorable than any other businesses I was familiar with.
For a while, before I got into that I worked in the garment industry in New York. And there when a salesman comes in and they buy dresses from a manufacturer and they have to have a signed contract and stuff like that. And if you don’t have a signed contract, you know, your word of mouth doesn’t mean anything. But at our industry, I found we do millions and millions of dollars worth of business just on our word. And you know, we don’t send the contract for three or four days and the copper prices could change 10, 15 cents a pound, up or down, and a deal is a deal.
And I found that over all the years that I did in business, I have never had a scrap dealer come to me and say, “I didn’t sell you or I’m not gonna ship because of any price fluctuations.” And even though there was no written, binding contract. Now I don’t think there’s an industry in the country that is so honorable as the scrap business. And you know, you tell people outside the industry and they don’t believe you, you know, because there still is that stigma of a scrap dealer being dishonest.
And the consumers, too, years ago I think they were much more inclined to think that the scrap dealers were always trying to cheat them and whatnot. And I think they’ve come around now too to realize that they’re not what they thought they were years ago. That they’re a bunch of honorable people, and mistakes are made and you know, somebody may not be 100% ethical, but basically, that they are.
Interviewer: How about the international scene, was the trade with international consumers and buyers a lot harder, you know decades ago versus how it is now? Did you have more problems with you know, them reneging on a deal?
Leonard: No, because we did business with the larger international concerns, there are situations where you did business with some companies that went into bankruptcy, you lost money. But it did not affect the situation as far as being honorable is concerned. No, I’ve never had a situation or heard of a situation where they didn’t honor a contract. Now there has been some on the buying side like I know… I haven’t been involved in it. But in Chicago years ago when the Koreans were big buyers of scrap iron, and then the market changed and they reneged on a lot of orders.
So it has been on that end, but I’ve never heard that on the scrap dealers and where they renege you know, if they took an order to Korea, to Japan, to Germany, to Italy that they reneged just because of price fluctuations. Whether there was some kind of a legal battle I don’t know. But at that point… and we did a lot of business you know, overseas France was big buyers and Germany were big buyers of scrap and Italy, and then Japan came into the picture, and then China came in, Korea came to the picture. But legally, the situation is we’re still fairly honorable.
Interviewer: Good to hear. When you started your career or your business, did you have any specific goals or did you just sort of think you were winging it and saw what happened?
Leonard: At that point, I didn’t have any goals, but I felt that I put my time in with a big company. I made a lot of friends and I just felt this was a time to use the experience and my friendship to start something on my own. As far as what I anticipated, at that point, I just wanted to get going. You know, when you work for someone all your life and you go out on your own, it’s difficult to set out goals.
Now one, my goals were, later on, is I wanted to expand a little bit, but in the scrap business, we had more fluctuations. You know, we have a lot of recessions. And then when the recession came, I said, gee, you know, lucky I didn’t go any further than what I did, because now I could easily ride out a recession. If I grow bigger one of two other facets of it, I really would have had a problem.
So I decided to you know, stick with what I was doing. And as the industry increased, and business increased, you know, I started getting more and more business anyway. So I felt there was no need to really go that much further.
Interviewer: How easy or how quick was your business successful?
Interviewer: That’s great.
Leonard: Yeah, it was really overnight. And soon after that, I think it was Nixon had just put in a price ceiling thing. And it helped me because I wasn’t in business long enough to have any kind of a price structure. So I was really a free market for a while. So, unbeknownst to me, at that point, I really had a bonanza the first couple of years because of the fact that I had no price background to have a price freeze.
So it was an unusual thing but everything happened in the right time in the right place at that point. And so because of that intentional, it gave me the start. And also it gave the scrap dealers a chance to see how I did business and how good or bad or honorable I am. And the consumers the same way we supply consumers during a time when they needed it. And I found out just like a scrap dealer needs a broker, the consumers do too.
I had a middleman over a couple of weeks ago and you know, he says, “Lenny, you know, we buy from you and you buy from dealers that we may buy from.” But he says, “It’s really a big help that I could call you and you know, make a deal with you.” And he says, “I don’t have the time to call 10 or 15 people you know, to buy,” he says, “And especially knowing that you know what we want, I don’t have to explain anything to you, and I don’t have to come back and say I told you not to ship this material.”
In fact, several years ago, it’s quite a while ago, I used to get calls from overseas, scrap dealers went overseas. And they called me to see what copper was doing, what aluminum was doing, what bronze was doing, and they were on vacation. And then a dealer that came back he says, “You know, Lenny, I always didn’t understand why I sold to you as a broker, why I didn’t go direct,” he says, “But now I know,” he says, “I went on vacation and all I had to do is make one phone call, and you told me what the whole industry was doing.” So it made me feel a lot better when I ended up knowing that at least we served a purpose other than just friendship.
Interviewer: Do you recall over the decades, the beginning of the business, major events, or just very memorable events through the years?
Leonard: Well, I remember one time, it was also right after the war we bought some copper ingot from Japan. And I think it was 500 tons and when it got to the New York pier, I just became a buyer. So they sent Harry Turkel who was the senior buyer there to look at and he says, “Come on with me.” So we went down to the pier and here’s this huge pile of copper ingot built like a pyramid. And so I said to Harry, I said, well, what did we come out here for? He said, “Well we have to see what it is and whatnot.”
So he says let’s climb up and see how the copper ingot is near the top of it. So we climbed up and as we climbed up, we set off an avalanche. All these copper ingots came floating down from the top and as they hit the concrete ground near the pier it broke and there was a steel spike in every copper bar, a railroad spike. So we went to one of the longshoremen, we got a sledgehammer and we started to take some more of the copper ingot. And I would say 90% of them were molded with a steel spike through the center.
And why they sent us out to it, you know, because once we took it off the pier and took it and smelted it we would have trouble with the smelting but we wouldn’t have any recourse. And good old Harry Turkel made me climb the pile and started off this avalanche.
Interviewer: That is a great story. Now are there any other major events or you know, things that the government did, or the business cycles that you really recall as memorable or difficult you know major bleeps in the industry or?
Leonard: Well, the only difficult parts were when two or three times during the time I was there that they had price ceilings. And it made it very difficult to do business because nobody knew where they stood until they understood you know, how the government’s laws come out, there’s 16 million pages of it. So until everybody really knew you know, where to turn and where to go, and what they were allowed to do, what they didn’t allow to do, and it affected our business too. Because mills didn’t know which way they were going, the scrap dealer didn’t know which way they were selling. So it put us in the buying for a long time. So it was unpleasant, but it was one of these things that had to be done.
Interviewer: What about personally, were there any time that you thought about cashing in and doing something else or just got the scares in the business?
Leonard: Let’s see unfortunately when I first started the business I got stuck with a scrap dealer that I did a lot of business with. He unfortunately gambled and went into bankruptcy and he stuck with a lot of money. At that time, I decided what should I do. And I decided that I was gonna stick it out, which I did, and I paid everybody off. And this was the second year when I was in business.
Interviewer: Trial by fire.
Leonard: Yeah. So I could have walked away, but then I said, you know, these are really my friends, it’s not something I wanna do. I have to face them, I just couldn’t do it. It was besides my livelihood, it was my life. You know, I was friends with them personally and business wise. And fortunately, it worked out where I was able to work it out to everyone’s satisfaction.
Interviewer: Now do you see in the coming years or decades even any big changes or just change in general for the brokerage side of the business? Any way that’s gonna change in your view?
Leonard: I don’t think so, I don’t see… you know, to say that we’re gonna grow, you know, like a company does there’s no chance of that. The brokerage business is gonna be status quo. You’re gonna do more business, as the volume… as business is good and do less business as it goes down. On the other hand, I could ride out poorer periods because I don’t have a big overhead. You know, brokers don’t have a huge overhead unless you’re a giant, you know, you have 25 brokers which I don’t think exist.
So, we ride out the slower periods and on the other hand, when things go up, we do more business, but you know, not as much as if you had a physical business. But it saves us less headaches on the way down.
Interviewer: Do you give Matt any advice about how to handle the business in the long term?
Leonard: He really gives me advice. No, he likes it, and he really took a good hold on it. I gotta mention I told him that the institute is not only a good thing for the industry, it’s a good thing for him personally. And as Herschel knows, he got involved. And he’s very serious about it you know, he’s not involved, like some of the other people that got involved, he is very serious. I mean, I can’t get him off the phone to do business a lot of times, because he’s involved with the situation, he’s very serious about it. Which, you know, I don’t know… he’s not a baby, he’s 41 years old. I don’t tell him what to do. But I think he’s good for me and the industry, actually.
Interviewer: Do you feel that your business fulfilled all of your expectations or dreams?
Leonard: It has. Fortunately, I have been healthy, my family’s been healthy. I got everything I would want, you know, to what you know how I feel what wealth is. And I’ve been fairly successful, I made some money. I made a lot of friends. I have a nice family and Matthew is in the business, which I’m very proud of. So I don’t have to say, where am I going from here, he could take over continue and so far it looks like he will.
Interviewer: Any regrets about continuing on with that psychology degree?
Leonard: No, no, because at that point, I think I took psychology because I didn’t know what else to take. So it was an easy thing to take and that’s why I decided on it. But you know, any sort of education is of help to anything, to any industry, it doesn’t make a difference. Whatever background you have in education serves a good purpose into anything you gotta do in the future. But I think the scrap business is one of the best, the most honorable businesses that I have come across in all my years of traveling around and seeing how other industries do business. And I’m really, really proud to be part of it.