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.

Images

Skyline, 1956

Skyline, 1956

The Van Sweringen brothers had acquired nine major rail lines by the end of their careers as railroad barons in the early 1930s. Along with a number of partially owned railroads, the Van Sweringen empire reached commercial centers throughout the Midwest and Southwest. It was also one of four major railroad powers in the East. The fall of the empire, however, would have its most profound impact in Cleveland. The construction of rail and rapid transit lines throughout the city came to a halt. While these extensive plans to develop Cleveland's infrastructure were never realized, the unparalleled influence of the Van Sweringen brothers during their era of prominence had already left an indelible impression on the physical and economic landscape of the city. Image courtesy of Shaker Historical Society View File Details Page

Rapid Tracks and Rail Lines, c. 1928

Rapid Tracks and Rail Lines, c. 1928

The Van Sweringens negotiated with executives of Nickle Plate Railroad, operated by New York Central, for the right to run rapid tracks through a two mile stretch of land in East Cleveland. An agreement was struck. The Van Sweringen Co. would deed half of the Rapid's right-of-way to NYC, the latter of which would finance much of the project. Upon completion, the railroad tracks typically ran parallel to the transit line from Shaker Heights to downtown Cleveland, providing NYC direct access to the markets of a growing city. The relationship formed between New York Central's Vice President, Alfred H. Smith, and O. P. Van Sweringen would guide the entrepreneurial brothers in the development of their own railroad empire. Image courtesy of Shaker Historical Society View File Details Page

Kinsman Tunnel Construction

Kinsman Tunnel Construction

Mike Mulligan and His Steam Shovel was a popular children's book first published in 1939. Pictured is a similar steam shovel digging a tunnel for the rapid transit and railroad lines near E.55th Street and Kinsman Road. Excavated materials from the construction of tunnels were often hauled to different locations along the railroad and transit lines to be used as fill material for grading operations. Image of Kinsman Tunnel Construction courtesy of Shaker Historical Society Image of Mike Mulligan from Wikimedia Commons View File Details Page

A New Infrastructure, 1928

A New Infrastructure, 1928

The legacy of the Van Sweringens in Cleveland extends beyond the construction of the Union Terminal and the reclamation of Public Square as the city's center. The real estate and railroad ventures of the brothers dramatically changed the face of the city. As plans for railroad and rapid transit lines expanded throughout the city, the accompanying infrastructure of bridges, viaducts and tunnels offered new pathways to move through the urban landscape. Some neighborhoods and businesses found new life while others were destroyed, often based upon their proximity to these lines of transportation. Image courtesy of Shaker Historical Society View File Details Page

Construction of the Union Terminal, 1928

Construction of the Union Terminal, 1928

The construction of the Union Terminal, which was to be the hub of all incoming passenger and locomotive traffic, proved to be the most memorable undertaking of the Van Sweringen brothers. Over 104 acres were cleared, 2,200 buildings were demolished, and 15,000 persons were displaced. The Terminal Tower has remained the defining feature of the Cleveland skyline since its completion in 1930. Image courtesy of Shaker Historical Society View File Details Page

Path to the Union Terminal, 1927

Path to the Union Terminal, 1927

The rapid transit line developed by the Van Sweringen brothers was to run directly from Shaker Heights to the Union Terminal. Traveling west from Shaker Square to about E. 55th Street, the rapid's path merged onto land owned by New York Central for approximately two miles. Image courtesy of Shaker Historical Society View File Details Page

The Lake Erie, Alliance & Wheeling Railroad

The Lake Erie, Alliance & Wheeling Railroad

The Lake Erie, Alliance & Wheeling Railroad was one of the lines acquired by the Van Sweringen brothers in their purchase of holdings from the New York Central. The LEA&W did not connect with the NYC rail system. The unprofitable line primarily served to haul coal for the New York Central from Wheeling to Painesville. The American Locomotive Company was a locomotive manufacturer employed by the Van Sweringens in the 1930s to build freight engines. The most famous one was a modified double-headed locomotive referred to as a "Van Sweringen Berkshire." Image courtesy of Shaker Historical Society View File Details Page

Van Sweringen Holdings

Van Sweringen Holdings

The Van Sweringen brothers set up an intricate system of holding companies to manage their real estate and railroad ventures. These corporations held controlling stock of the various companies, which were funded by outside investors. The individuals putting up money to fund the companies were regularly paid dividends, but had no authority to vote on business decisions. Such a setup ensured that the Vans maintained complete control over the development of their businesses, while limiting the investment of their own capital for start up and operating costs. Image courtesy of Shaker Historical Society View File Details Page

Collinwood Railroad Yards and Diesel Terminal

Collinwood Railroad Yards and Diesel Terminal

The Collinwood Railroad Yards acted as a repair facility and transfer point for the New York Central Railroad. In 1929, the year of the stock market crash that proved to be the downfall of the Van Sweringens' railroad empire, the Collinwood stock yards were equipped to handle 2,000 cars a day. | Source: Shaker Historical Society View File Details Page

Nickel Plate Cleveland Head Office, 1922

Nickel Plate Cleveland Head Office, 1922

The engineers of the Nickle Plate Railroad not only developed and promoted planning for the Union Terminal project, but helped turn the previously unexceptional line into a profitable business venture. Under the leadership of John J. Bennet, the railroad's infrastructure and equipment was modernized in order that the Nickle Plate Railroad could specialize on through freight services. The railroad soon earned a reputation for fast service and efficiency, providing a model from which the Vans would develop their railroad empire. Image courtesy of Shaker Historical Society View File Details Page

Cite this Page:

Richard Raponi, “The Van Sweringen Railroad Empire,” Cleveland Historical, accessed June 28, 2017, https://clevelandhistorical.org/items/show/414.
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