The Washington times., 1933-06-07
VAN SWER|NGEN IS QUESTIONED
AGAIN ON TRANSAC T|ON

b~HBBbI
The great Van Sweringen rail-
road empire, valued at hundreds
of millions of dollars, was erected
through an original investment
of $1,OoO,OOO.
o. P. Van Sweringen, after a
nights search of his records
made this revelation as he re-
Sumed the witness stand today
before the Senate Banking ano
Currency Committee for the third
successive day.
The two Van Sweringen broth
erS, he said started in 1916 with
100000. He previously revealed
that they bought one railroad
after another on borrowed cap
ital and public investments until
in 1925 they controlled the largest
privately-owned rail system in the
world.
Questioned BY PecOra
Van Sweringen, who displayed
an amazing lack of memory on
his first two appearances as
witness, was asked by Ferdinand
Pecora, special committee counsel
for the amount of his original in
vestment. Van Sweringen replied:
81 am pleased to inform you
that the amount was one mil
lion dollars with which we
started back in 1916"
The great Van Sweringen sys
tenn, which included the Chesa
peake and Ohio, the Erie, the
Pere Marquette and the Nickel
Plate, was grabbed by J. P. Nor
gan and Co. finally through a
giant holding corporation. Nor
gan got control Of the system
by financing the Allegheny Cor
poration, the holding concern.
Under questioning by Pecora
Van Sweringen said he and his
brother borrowed the original mil
lion, but added they put up ade
Quate security.
Describes Their Rise
Describing the Van SWeringens
rise to great prominence he con
tinued:
"Of course, bear in mind, we
bought and bought. We bought
Nickel Plate at a good price,
and I presume that the New
York Central thought it sold at
Q good price. We turned it
into different types of prop
erty, so that under Mr.. Bier
nets guardianship it became
valuable property.
"That gave us a background
upon which to expand. We had
the same result with other in
VeStmentS.
"Our experience has been
that sort of thing throughout.
These things grew. When we
started out we were poor. 1
have never been reluctant to
admit that"
He finally said the origina,
million represented "the aggre-
gate" sum that he, his brother
and all their associates had to
put into the railroad baby that
has grown into such a powerful
adult.
Savings of Years
The original money Van Swer-
hgen said, represented the saw
ings of himself and his brother
over a period of years. This, he
went on, was used to buy securi-
ties of the Nickel Plate Securities
Corporation, the holding com
pany for the railroad stock which
the brothers bought in acquiring
control of the Nickel Plate.
At the outset Van SWeringen
revealed. he and his brother
actually borrowed only $5OO,O00
the associates putting up an
equal sum. This, he conceded
was the million which went origi,
nally into the purchase of Nickel
Plate Securities Corporation stock
Pecora took up next the rail
road consolidation plan proposed
by the Van SWeringenS to the
Interstate Commerce Commission
in 1925 and denied by that body
because it thought the proposal
would give the brothers con
tHolling interest through a
minority interest.
Takes Up 1. C. C. Case
Pecora then took up the
criticism of certain phases of the
Van SWeringen set-up by the I
c. c. in its 1925 denial of the
brothers application. He spoke
specifically of trust agreement
Van SWeringen said he and his
associates had overlooked some
OF the possible results of this
agreement and that the agree
ment was voided after the 1. c.
c. decision.
Pecora then took up another OF
the Van SWeringen holding com
panieS, the CHESAPEAKE Corpora
ton. This was formed to take
over the Chesapeake and Ohio
railroad stocks acquired by the
Van SWeringen brothers. They
bought it through their Nicke
Plate railroad. The corporation
was organized in May, 1927, with
100000 shares of common stock
issued to stockholders of the