The Waterbury Democrat., 1933-06-05
Van Sweringens Are
Put On The Carpet
CONTINUED from Page -

until 1880 the Van Sweringen
brothers continued to acquire con-
troll of railroads. o. P. Van Swer-
ingen told the committee all about
it today. The eliminating move
was in 1929, when j. P. Morgan
& Co., financed the Allegheny COR
poration, a holding company super
imposed ON the roads which the
Van Sweringens visualize as the
fourth eastern system. The roads
are the Erie, the Pere Marquette,
the Chesapeake G. Ohio, the Hook
ing Valley and the Nickel Plate.
The Van Sweringens looked over
the southwest and bought the
Missouri Pacific. But the witness
assured the committee today they
had no thought of a transcontin-
entail rail system.
Rather proudly, Van Sweringen
remarked that the Chesapeake &
Ohio sis the one railroad that has
earned and paid it's full dividend
throughout the period of depres-
sion that we hope now is ending"
He told how that grand old
gentleman, George F. Baker,"
welcomed the brothers into par
ticipation in ownership of the
Erie. He said it first was intended
to make the Nickle Plate the nue.
leus of the eastern system but it
became necessary to shift that re-
sponsibility to the Chesapeake &
Ohio.
For that reason, Van Sweringen
said, a holding company called the
Chesapeake Corporation was Gre
ated in 1927, to enable the Nickel
Plate to divest itself of partial
control of the C. G. o.
at was necessary, as we saw il"
| Van Sweringen said, that If the c..
G. o. was to become the nucleus
of great system into which the
Nickel Plate should go, its position
to that road should be changed
| so that the Nickel Plate would
not be an owner in part of its pros
pective parent"
| The Chesapeake Corporation
was formed in the spring of 1927,
when J. P. Morgan 6 Company
bought s48,000,000 bonds of the
holding company. The duty of AL
| leghany corporation, formed two
years later, was explained by Van
Sweringen as "to carry, insofar as
was consistent, and to mobilize, in
a financial sense, our activities
looking toward the goal of final
upbuilding Of the Chesapeake &
Ohio, or so-called fourth system
for the eastern region"
The new holding company was
"to take over the shares held by
us and to provide funds for carry
ing on"
About this time the brothers be-
came attracted by the southwest
and on the eve of the depression
began to accumulate shares of the
Missouri Pacific. By the spring of
1890, they had control and the
story of progress ends there for
the time being.
"Soon after we accomplished
these purchases" Van Sweringen
related, 1.-The country was pitched
headlong into the unforeseen de-
preston, the worst the world has
ever known. This wrought its ac-
companying havoc to investments
and it's violence to Allegheny cor
poration."
While emphasizing that there
was no intention of combining the
Missouri Pacific with the eastern
system. Van Sweringen indicated
that the spring of 1880 had
brought the rail venture to the
| place where all the roads desired
had been acquired.
"Our present aim" he added, sis
toward making these properties
satisfy, to the highest degree, the
public need and service, and at the
same time produce a just return
for the investors who have cast
i their lot with US"