The Van Sweringen Railroad Empire

The path followed by the Van Sweringen brothers in developing a rapid transit system led to the creation of a vast railroad empire. While their foray into the railroad business may have begun half-hazard, it was a natural extension of their interests and efforts in securing the right of way between Shaker Village and Cleveland.

The beginnings of the Van Sweringen railroad empire grew from the brothers' attempts to extend a street car line to their residential community during the first decade of the 20th century. Having approached the Cleveland Railroad Co., which held the city's streetcar franchise, the brothers were refused on the grounds that there was not a sufficient population to service. The brothers soon began the process of acquiring land to build a direct line from Shaker Village to Cleveland's downtown. In 1909, they acquired a four-acre lot to act as a downtown terminal and organized the Cleveland and Youngstown Railroad for the operation of an electric train line. To complete this plan, however, the Cleveland and Youngstown Railroad would need to cross existing tracks owned by New York Central. The president of New York Central, Alfred H. Smith, had grown up in Cleveland and was known by the Van Sweringen brothers. New York Central was interested in both a new freight station and route into the ever-expanding Midwestern city, and deals were made. Working with, and predominantly funded by New York Central, the Van Sweringen brothers headed construction of the project. When completed, half the right of way and the station were deeded to New York Central. Passenger-only tracks running along the line became known as the Cleveland Interurban Railroad.

New York Central also owned the Nickel Plate Railroad, which followed a similar route from 34th Street to downtown as the line envisioned by the Van Sweringens. While the brothers had originally approached New York Central to negotiate use of the tracks, the railroad empire was under scrutiny from the Federal Government for owning railroad lines that theoretically should have been competing. Understanding that they would eventually be required to dispose of the the Nickel Plate line, New York Central sold the 513 miles of railroad to the Van Sweringens in 1916. While newspaper accounts suggested the railway's worth to be valued at both $30,000,000 in stocks and bonds, the control of the Nickel Plate was transferred to the brothers for $8,500,000. Two million was borrowed from banks and paid immediately, while the remaining was to be paid in installments of $650,000. This sale enabled New York Central to dispose of the railroad without selling to one of their competitors. It was also to be the first step in the creation of the Van Sweringen railroad empire.

Following the Van Sweringens' purchase of the Nickel Plate Railway from New York Central, John J. Bennett was brought in as president of the line. Under his leadership, the railroad business became increasingly profitable for the brothers. They continued to acquire railroad companies over the following 14 years, and, by 1929, had developed an empire worth three billion dollars.

As with their real estate and rapid transit investments, the Great Depression brought an end to the brothers' success. Following the death of Mantis in 1935 and Oris the following year, the Van Sweringen railroad company was declared bankrupt and sold at public auction in 1938.