The article that appeared in the Kalamazoo Gazette on August 16, 1933 was short, succinct and generally focused on the amazing career of thirty-eight year old E.L. Cord. Following a lengthy list of companies currently under his control, including Stinson Aircraft, Columbia Axle Company, and Duesenberg, Inc., two brief paragraphs was all the notice given that another company had been added to the empire of Cord.
That was it. Two short, dry paragraphs to cover an incredible story of a hostile take over with colorful characters that included a rag to riches Russian immigrant and the boy wonder Cord.
“Reconstruction of the board of directors of the Checker Company has been announced. Cord has been named chairman of the board, and with L.B. Manning, executive vice-president of the Cord Corporation, W.H. Boal and Morris Markin, will constitute the executive committeeman. Markin continues as president.”
“The move by which Cord obtained control of Checker Cab is understood to have centered around Markin removed a fortnight ago as president of the company. Markin held options on sufficient stock to give control of the company. The options were about to expire when he was removed. Markin sold options to Cord who exercised them just before they were to expire. Markin is back as president of the company and the directors of the company who voted his removal have been replaced by Cord men.”
Morris Markin had arrived in the United States in 1913 from Russia absolutely broke. In less than a decade he had harnessed the incredible opportunity that is only to be found in America and was well on the way to creating an empire of his own.
He began as a tailor’s assistant working with two uncles. The rungs to success – his own shop, a partnership with a brother in a pants factory, and a government contract for uniform pants during World War I followed – were climbed quickly.
His venture into the world of automobile manufacturing was a fortuitous accident. When a loan to a friend, the owner of the Lomberg Auto Body Manufacturing Company of Joliet, Illinois, was defaulted on Markin found himself in a position of controlling interest for a near moribund company.
In a series of shrewd maneuvers, Markin leveraged his new body manufacturing company to acquire his primary customer, Commonwealth Motors, manufacturer of Mogul Cabs in 1922. The merger brought the two companies together under the name Checker Cab Manufacturing Company as the primary customer was Checker Cab of Chicago, a consortium of independent operators.
Morris Markin envisioned Checker a tool designed for a purpose, meeting the rigors and demands of inner city taxi service. To this end he produced a product with rugged durability. In late 1925, an industry study concluded “…many of the first Checker cabs are still in operation on the streets of Chicago, many of them having traveled approximately a quarter of a million miles.”
The production of Checker cabs was but the foundation for the Markin automotive empire. Throughout 1929, through acquisition and complicated swaps of stock and product, he consolidated control over numerous taxi and large fleet transportation operations in several metropolitan areas, companies that in turn became customers for Checker built cabs.
By year-end the National Transportation Company, operator of 1500 taxis in New York City, Chicago Yellow Cab Company, obtained from the two primary holders, John Hertz, and Parmelee Transportation, and a large percentage of Parmelee Transportation were under the control of the parent company Checker Cab Manufacturing or Markin himself.
The rapid expansion of Checker, including construction of a new production facility, had left the company with marginal cash reserves. Compounding the problems faced by Markin, beginning in 1930, were diminishing sales and an attempted take over of the company in 1933.
In June of that year, the reduction of the board of directors from eleven members to seven gave Pierre S du Pont and John Raskob the opportunity they had been seeking. In rapid succession, the new board voted Markin out of office and replaced him with C.A. Weymouth. It was a bold gamble with success riding on Markin’s inability to raise the capital necessary to exercise his option to purchase up to sixty percent of the companies voting stock.
The wild card, as it turned out, was E.L. Cord. Markin approached Cord with the offer of his stock options at a price below that quoted. As part of the deal, Markin was to regain the presidency of the company he had founded. Within ten days, the coup was crushed, Markin had returned to the helm and a new era for Checker began.
Eventually the dealings between Cord and Markin became so complicated and intertwined the Securities and Exchange Commission investigated and eventually filed charges of stock manipulation. In addition to his new position as chairman of the board, Cord transferred the construction of the Saf-T-Cab, built by Auburn, to Checker. Earlier in 1933, Checker had introduced the Model T powered by engines built by Lycoming, a Cord company. Auburn marketed Saf-T-Cabs but the primary clients were Parmelee Transportation and Chicago Yellow Cab, Inc., Markin held companies.
Saf-T-Cab had used Lycoming engines since the mid 1920s as well as Columbia axles. When Checker assumed production of the Saf-T-Cab, those axles were used in taxis with the Checker name. Columbia Axle was another Cord holding.
An aspect of these overlapping concerns that drew the attention of the Security and Exchange Commission was stock holdings and swaps at each step of the way. At the heart of the investigation and eventual charges of stock manipulation that were leveled against Markin and Cord was suggestions that leaked information as well as insider trading had resulted in Checker stock skyrocketing from seven dollars a share in November of 1935 to sixty-nine dollars a share by April 18 of 1936. Both denied the charges and both were acquitted.
If one word were to be used to describe Checker during the prewar years, it would be enigmatic. Its history during this period is hundreds of loose threads and tantalizing clues, many of which are tied to the empire of E.L. Cord.
In 1935, Checker introduced the Model Y in two configurations, the Y8 with the Lycoming GFD engine, the same eight-cylinder engine used in the Auburn 850, and the Y6 with a Continental six-cylinder engine. Shortly after its introduction a special six door, extended wheelbase Y8, much like the Aerobus produced in the 1960s, was built primarily for Parmelee Transportation.
A few trade journals from 1936 provide a tantalizing hint that Checker and Auburn may have still been cooperating on special projects though Cord divested himself of interest in Checker that year. Well-placed, anonymous sources were indicating that Auburn was about to introduce a six door airport limousine with diesel engine.
Another fascinating link has to do with Herb Snow, an engineer who played key roles in the development of the Cord as well as Auburn. In the late 1930’s Snow was working as a consultant with Checker. Is there a relationship between his work on the front-wheel drive Cord and the Checker built four-wheel drive, four-wheel steering Jeep prototype of late 1940 or the rear engine, rear wheel drive Model B taxi prototype of 1945 or the Model D front wheel drive prototype taxi?
The Cord story is a lengthy and colorful one with many chapters. His affiliation with Checker, an American icon, the Safe-T-Cab and Cords brush with the Securities and Exchange Commission are just a few that have been forgotten.