Evening star., 1933-05-23
R.E. c. ASKS PROBE
|. Of RAILROAD DEAL
Charges One Van SWeringen
Group Sold Property to An
other at High Price.
BY the Associated Press.

BY the Associated Press.
ST. LOUIS, May 23-The Recon
struction Finance Corporation yesterday
asked the United States District Court
for an impartial investigation OF GER
tain purchases and sales of property
made by the Missouri Pacific Railroad
in recent years while the Van Swerin-
gen Brothers have held control.
Pointing to purchase Of terminal
property in Kansas City for $4,000, 900,
and Of the st. Joseph, Mo-, Belt Rail
that amounts set forth in contracts "are
greatly in excess of actual considera-
tions and greatly in excess OF the rea-
sonable market values of the property
st that time"
$23,134,800 in Default.
The Missouri Pacific Railway acquired
the property, it is alleged, by purchase
from the Terminal Shares, Inc, which
acquired it from the Allegheny Corpora
ton, the original purchaser. All Of the
concerns were said to be controlled by
the Van Sweringens.
In it's motion, the finance corpora
tion stated the road has defaulted on
$23,134,8 300 loaned it by the R. F. c.
and creditors are entitled to have a
thorough investigation made Of the re-
cent purchases and sale II the property.
The court is asked to appoint one or
more disintereSted trustees to investi-
gate.
B. w. Landsdown and a large num-
Der Of Missouri Pacific creditors also
asked the United States Supreme Court
in Washington for permission to file a
suit seeking to compel Federal Judge
Charles B. Faris to displace L. w. Bald
win, president Of the road, as director
Of the railway.
The Reconstruction Finance Corpora
ton motion states that in the Fall
of 1929 the Allegheny Corporation,
through its nominee, the Geneva Cor
poration. purchased properties in North
Kansas City and st. Joseph. The AL
legheny Corporation was declared to
have been the principal company, con-
trolled by o. P. and M. J. Van swer-
ingen, to have been used by them in
acquiring controlling stock of the
Missouri Pacific in 1929 and 1880.
Bought at s13,000,0o0.
The Kansas City property. it was al
legged, was purchased by the Geneva
Corporation from the Swift family trust
and Armour Co. of Delaware for $13,-
000, 900, of which $5,200,000 was re-
corded as paid November /, 1929, and
the balance coming due October 16,
1880.
A contract between the Geneva
Corporation and the Union Terminal
Trust and Union Terminal Railway,
provided for sale of the st. Joseph
properties for $4,600,000 to be paid in
two equal installments, the petition said.
Later, it is alleged, the Allegheny,
through the Van Sweringens, who had
control, decided to sell the properties
to the Missouri Pacific. To accomplish
this, the motion states, the Allegheny
organized another corporation, the
Terminal Shares, Inc, the entire stock
Of which is held by Allegheny.
Sale Of the properties was said to
have been agreed on for total of $2O,-
334,262, plus 515 per cent interest On
December 81, $780, a series of contracts
was declared to have been entered into
between the Missouri Pacific and the
Terminal Shares, Inc.
The motion points out both buyer
and seller in the transaction were con-
trolled by the Allegheny through the
Van Sweringens.