Evening star., 1927-02-16
MEN AND MONEY
By NJ. S. Rukeyser.
tCopyriGht. 1927

During the dramatic period in which
Wheeling d Lake Erie stock emerged
from obscurity to worldwide fame, w.
NJ. Duncan, chairman of the company,
a Cleveland attorney. was enjoying a
six-week vacation in Arizona.
One of the directors, travelling in
China, was apprised by cable of the
skyrocketing of the stock. According
to apparently well authenticated re-
ports. he cabled his cleveland bank to
sell his common stock holdings. The
bank did so, getting a far higher price
than the individual had previous to
the recent fiareup ever expected. After
selling 1900 shares the bank disCov-
cred that il did not have power of at
tornev to act for its client, who thus
became technically short. Until the
legal formalities could be complied
with substantial share of the pro
ceeds from the sale was eaten up by
the fact that the stock was lending at
a premium of 81 a share.
Until the Van Sweringen brothers
bought control of the Nickel Plate in
1916, they had only local reputation.
The country at large knows the baChe
lor brothers as railroad operators and
matchmakers but Cleveland their
home city, still thinks of them as
highly successful realtors. Their great
achievement was the development of
thinly populated districts in the out
skirts of the city into the famous
Shaker Heights district, in which mag
nificent suburban homes have been
built The Van Sweringens got into
railroading as bi-product of their
real estate ventures.
Built Transit Line.
They built a rapidtransit line to
Shaker Heights in order to make the
district readily accessible. In 1916.
when they were planning Il terminal
in the heart of Clevela nd. they found
it necessary to negotiate with the
Nickel Plate Railroad for right of
way. At that time the Nickel Plate
was a subsidiary of the New York
Central Railroad. The Interstate
Commerce Commission ruled that tho
Nickel Plate was parallel and com
peting line of the New York Central
and ordered divorce.
Accordingly, the Nickel Plate was
offered for sale at a low jrice, and the
Van SweringenS bought II i'm partly
on profits from their real estate ven
lures, but largely on borrowed funds.
In December, 1922. they got an op
holdings by acquiring the Huntington
block of stock in the Chesapeake &
Ohio. This block was the dominant
interest, but subsequently the Van
Sweringens and their associates
bought enough additional stock in the
open market to give them an actual
majority. The Van Sweringens
bought the Huntington holdings above
the market price. but at level more
than 60 points below current quota
tions.
Buy Erie Control.
Since taking an interest in the
Chesapeake & Ohio the Van Swerin-
gems bought control of the Erie
largely through open market opera
tions and no doubt through agree
ment with George F. Baker. chairman
of the First National Bank of New
York, and, with the Nickel Plate Rail
road, also bought control of the Pere
Marquette. The Chesapeake & Ohio
now controls the Hooking Valley; the
board of directors are asking the In
terstate Commerce Commission for
permission to acquire control of the
Erie and the Pere Marquette.
While acting as the dominant in
terests in five railroads, the Van Swer-
ingens-Orvis p. and his younger bro.
ther and partner, Mantis J.-are at
the forefront of the Cleveland Ter
minal construction and recently
launched a large new suburban real
estate development in Cleveland just
beyond Shaker Village.
The Van Sweringens recently an
nounced a plan for marketing 1000
acres in parcels of from five to ten