The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-03-23
VAN SWERINCEN
HOPE FOR LOAN
Gets SETBACK
Plan for Missouri Pacific
Railroad Seen Doomed
by Disclosures.
BY THOMAS L. STOKES
Times Special Writer


WASHINGTON, March 23.-The
ambitious scheme of the Van Swer-
ingen brothers to borrow 100000
from the Reconstruction Finance
Corp. to reorganize the Missouri
Pacific Railroad, a segment of their
vast empire now in receiverShip, en-
countered serious obstacles today
through bit of Senate publicity.
The STE, 100000 loan proposal was
dragged from the secrecy surround
ing negotiations between Chairman
Jesse Jones of the RFC and the
Van Sweringen brothers, which
have gone on for weeks, by testi-
mony before the Senate Interstate
Commerce Committee.
Mr.. Jones was somewhat sur
prised by the disclosure, as were
the Van Sweringens, but the genial
Texan was his usual urbane self
when he faced reporters. He as
Sured them the RFC had made no
comments, indicated that loan of
such size was merely a nope of the
Van Sweringens, and said the RFC
is investigating the probable paying
ability of the railroad before de-
Gliding on any loan.
Gets Senate Invitation
While somewhat indefinite about
the proposed reorganization plan,
Mr.. Jones said he understood it en-
tanned altogether a $175,000 first
in which the road wanted
the government to share. He has
been invited before the Senate COM
mittee to discuss the plan.
The railroad already owes the
RFC $23,000,000. The Van Swer-
ingens owe $67,OOO,OOO altogether to
the government on this and loans
to other of their properties. and
they owe a banking syndicate head
ed by j. P. Morgan & Co., $4,000
900.
1t was evident today that Mr..
Jones will go very slow now, in view
of the publicity of this proposal
and of Van Sweringen financial
operations which have been con-
demned before the Senate COM
mittee.
It was very apparent that a loan
of $75,OO0,000 is doomed-if indeed
it is ever given any serious con-
Sideration-and that any further
advance of government money will
be most carefully scrutinized in view
of the revelations of the banking
groups control over the road, and
the past history of Van Sweringen
speculative ventures.
Cites Morgan Position
Maxwell Brandwen, counsel for
an independent Missouri Pacific
bondholderS' committee, who dis
closed the loan proposal, put it
bluntly by saying that the Van
Sweringen railroad properties "are
in hook to the banking
syndicate headed by j. P. Morgan"
In approving any loans to the
Van Sweringens, Chairman Jones
will be under the constant threat OF
the Senate. Senator CouzenS Or,
Mich.), who has attacked the Van
before, declared that
instead of granting this loan they
ought to put the Van Sweringens in
Jail"
Revelation of the secret loan ne
also enhanced the Pros
poets of passage Of the resolution OF
Wheeler Cd, Mont0, chair
man of the committee. for
thorough senatorial inquiry into
railroad refinancing operations.
"I have no objection to Senate
Investigation" Mr.. Jones said.
He expects the study of Missouri
Pacific paying ability to be COM
pleted in about two weeks. He was
somewhat vague about the Van
reorganization plan, but
said he understood it provided a
cash payment of some sort to the
Asked when he thought the Van
would pay back the
SAC. 900, 900 they owe the banking
syndicate, Mr.. Jones turned to his
1uestioner, who has bald spot on
the top of his head and remarked:
That bald spot will be a lot
10 roo,.