The Waterbury Democrat., 1935-09-12

Continued from Page ~
est real estate business in the
suburbs of Cleveland little over 20
years ago.
Has Been Tottering
lettering since the financial
earthquake of 1929, the Van
Sweringen empire slipped out of
control of the brothers last May
when, despite desperate efforts to
meet obligations, they were unable
to take up maturing loans.
Control then passed to the Nor
gan interests and other banking
firms that had held the majority
shares in one of the largest cor
porate chains in American history
since the winter of 1880 when the
Van Sweringens were forced to
borrow more than $50,000,000 to
prevent the collapse of their enter
priees.
The decision to sell was made by
the Morgan firm to avoid acting as
railroad owners and operators,
functions alien to the famous
banking house. Agreement was
obtained from the Bankers Trust
Co., Chase National Bank, Guar
anty Trust Co., National City Bank,
New York Trust Co., George F.
Baker and the Midland Bank of
Cleveland which participated in
$39,500,000 loan.
Garry Big Control
The shares scheduled for sale
carry voting control of coal prop
critics worth $5O,00O,0OO; real
estate assessed at $15O,000,0OO and
trucking, traction and other enter
prises valued at $75,000,000. In
addition the land and buildings
forming the public square in Cleve-
land are involved, presumably be-
cause of the new railroad station.
The Van Sweringen railroads,
with a mileage that would extend
around the world, have assets
valued at $3,O21, 100000 ranging
from $685., 100000 for the Chesa-
peake and Ohio to $62,000,000 for
the international Great Northern.
The Unoin Terminal Station in
Cleveland is valued at $50, 900.
Built In Competition
The brothers built the system in
the turbulent competition of the
192O's extending their trackago
finally from the Atlantic Seaboard
to Salt Lake City and Santa Fee,
from the Great Lakes to the Gull
of Mexico. Even the early days OF
the depression failed to stop their
progress. In the spring of 1880
they threw $100,000,0O0 into the
market to assure control of the
1865, 100000 Missouri-Pacific.
They were unable to stave off
the inevitable, however. Railroad
earnings dwiHdled and some OF
their roads were forced into bank
ruptcy. Real estate deprecated.
The tumbling stock market caught
them with huge margin commit
ments and interest payments to be
met. The brothers, who had estim-
mated their fortune at $91, OOO,O00
in 1929, were forced to appeal for
aid.
Morgan, hacker of the firm in
the boom days, organized a pool
of banks and raised $39,5OO, 900.
The Van Sweringns borrowed an
other $2,100,OOO making their in
debtedness to Morgan $41,60O,00O,
In November, 1881 the Morgans
negotiated a funding of the inter-
est until the entire loan matured.
This came in May and totaled
about $50,00O,000.
The brothers, meanwhile, had
negotiated $14,000,000 in loans in
Cleveland. OF this sum about $780,
900 still Is outstanding.
Where II Started
Cleveland, Sept. 11-UP)-The
vast railroading empire of the Van
Sweringen brothers had its incep-
ton in a small road built by the
brothers to serve their real estate
developments here.
The brothers made their railroad
debut in 1915, buying the Nickel
Plate raod which ran from Buffalo
to Chicago. Once in the business,
o. p. and M. J. became the fastest
dealers in railway stocks and secu-
rites the company ever developed.
Previous to 1915, the brothers
had been known chiefly by their
development of the swanky Shaker
Heights residential district in the
east part of Cleveland. 1t is legend