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Train Dreams, Part 2

cleveland_postcard_circa_1947

For more Van Sweringens, read Part 1 and Part 3 of “Train Dreams.”

By Pete Beatty

The Van Sweringens were very rich before they were 40. But Oris and Mantis were hardly swinging bachelors. The brothers lived together very quietly in the mansion they built in their Shaker dominion. They were intensely private, an odd trait for real estate tycoons. They were modest, and performed an odd Victorian humility in what little public living they did. In the words of one biographer, “the brothers had never been unwrapped from the cotton wadding their spinster sisters put them into.”

They had almost no hobbies. M.J. rode horses when he could. O.P. avoided exercise as much as possible, and was famous for sleeping as much as 12 hours a day. His distaste for physical exertion and a predilection for creamed codfish led to his growing stout. O.P.’s only passion apart from making money was collecting early American books. He was mad for stories of discovery and exploration—ranging from rare 16th century Spanish colonial texts to the memoirs of the frontiersmen who conquered the American West.

Their Shaker Villages development had set in motion the suburbanization of Cleveland, a kind of secondary frontier, a filling-in of the spaces raced over by the first frontier.

The Vans were just boys when the U.S. Census Bureau announced that the frontier was closed for good, that the nation had fulfilled its birthright to span from coast to coast. But before long, the brothers would own railroads that would nearly reach across the entire span of the United States. Their Shaker Villages development had set in motion the suburbanization of Cleveland, a kind of secondary frontier, a filling-in of the spaces raced over by the first frontier.

Their growing wealth didn’t shake the brothers from their ardent modesty, but as the Shaker Villages development gained momentum, O.P. and M.J. took on some of the trappings of power. Their names began to appear on boards, planning committees, and civic councils. O.P. was named the chair of the Cleveland Chamber of Commerce’s City Planning Committee, and sat on a mayoral planning commission as well. That same chamber awarded the brothers a ceremonial award for “Public Service,” praising them as “masters of business, builders of great enterprises, eager participants in every movement for a better Cleveland.” Mantis and Oris also found social éclat—far more than most former fertilizer-company office boys. By 1918 they were clubbed, listed as members of the Hermit Club, the Willowick Club, the Union Club, and the new Shaker Heights Country Club. They were plugged into the city’s power structure, and had access to bankers and politicians.

And even as the carefully orchestrated, decade-long plan for Shaker Villages rolled on, the brothers began laying the groundwork for something more ambitious, a project that would forever change the face of Cleveland.

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Southeast quadrant of Public Square, ca. 1895. WRHS.

Southeast quadrant of Public Square, ca. 1895. WRHS.

Public Square had been at the center of Cleveland since the very beginning. The Yankee pioneers who settled Cleveland envisioned the 10-acre square as a New England town common. The square was the site of public gatherings and permanent memorials—its expanses were central enough to civic life to inspire a “Fence War”in the mid-19th century.

But by the early twentieth century, Public Square was drifting out of focus. It was still a key streetcar station and transfer point, but it was increasingly down at heel. The Haymarket district, to the south of the square, had emerged as Cleveland’s first slum, packed with flophouses and saloons. The area was “corrupt, squalid, crime-ridden, and poverty-filled,” per historian Ian Haberman. Even the trees of Public Square were seedy. Sycamores were planted annually, but couldn’t stay alive in the smoky air of downtown.

As the Haymarket grew bigger and rougher, the tonier businesses located nearby began to worry. Department stores like Halle Brothers, William Taylor Son & Company, the Bailey Company, Higbee’s, the May Company, and the Lindner Company were anxious to attract upper-middle-class customers. As the well-to-do left the central city for the mansions of Euclid Avenue or other less cramped residential areas, the department stores began to trickle out of Public Square as well.

But the Vans didn’t want the imagined future residents of Shaker Villages to finish their swift commute in a seedy district

As early as 1909, long before Shaker Villages was a reality, the Van Sweringen brothers had purchased four acres on Public Square for a streetcar terminus. The thousands who would hopefully be trekking from their new eastern suburban developments would require a new downtown hub. But the Vans didn’t want the imagined future residents of Shaker Villages to finish their swift commute in a seedy district. So the area around Public Square would have to be remade, in the Van Sweringen style.

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The Nickel Plate Road was a 522-mile afterthought. The single-track line, formally named the New York, Chicago and St. Louis Railroad, was born in the 1880s, an era of feverish and speculative rail expansion. The Nickel Plate was what was known as a “blackmail road”—a redundant line paralleling the tracks of an established route, built to be flipped, not to be run.

Nickel Plate Road railroad freight yard between Mayfield Rd. and Euclid Ave. - The Cleveland Memory Project

Nickel Plate Road railroad freight yard between Mayfield Rd. and Euclid Ave. – The Cleveland Memory Project

The target of this particular blackmail road was William H. Vanderbilt and his New York Central system, who also owned the Lake Shore & Michigan Southern Line. If the Nickel Plate were to fall into the hands of one of Vanderbilt’s major rivals, it could pose a threat to the L.S .& M.S. So Vanderbilt discreetly purchased a controlling stake in the Nickel Plate, just days after it went into service in 1881. Vanderbilt couldn’t rip up the Nickel Plate or incorporate it into the larger Central system, so he benignly neglected it.

For thirty years, the Nickel Plate chugged along in anonymity. It was not a sexy railroad, but had a niche as a relatively speedy route, owing to the lack of traffic. Six nightly trains full of meat zoomed east from Chicago’s stockyards on the Nickel Plate, along with fruit and other perishable freight.

But the Nickel Plate’s humble meat-hauling was disrupted by Congress in 1914. The Clayton Antitrust Act empowered the government to attack monopolies where they existed and to prevent them from forming. In late 1915, the U.S. attorney general notified the owners of the New York Central that their control of three largely parallel lines—the L.S. & M.S., the Michigan Central, and the Nickel Plate—was illegal. One of those lines would have to go, and the Nickel Plate was the clear choice.

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Of the 522 miles of Nickel Plate track, there was a three-quarter mile stretch that caught the eye of the Van Sweringen brothers. Starting at East 34th Street, very near the point where the Shaker rapid switched over to city streets on its way to Public Square, the Nickel Plate ran about 4,000 feet of track, tucked halfway down the hillside leading to the river. This stretch led to the Nickel Plate’s Cleveland station, near the present site of the Post Office on Orange Avenue. This short stretch wasn’t particularly special, except that if the Vans could use its right of way, their streetcar would be three-quarters of a mile closer to its downtown terminus, shaving precious time off the commute of potential Shaker residents.

So the brothers bought the Nickel Plate, every inch of it, to get that stretch of track. So goes the Van Sweringen mythology, anyway. In reality, the New York Central—and the Vans’ fairy godfather, Central executive Alfred H. Smith—chose the brothers to buy the road as much as they chose to purchase it. The Central desperately wanted to keep the Nickel Plate out of the hands of a competing rail system.

Compared to a behemoth like the New York Central, the Van Sweringens were merely local real estate operators and owners of a dinky streetcar. But they were also a perfect solution. The Vans were chummy with Alfred Smith, and could be trusted to run the Nickel Plate in a way that didn’t interfere with the Central’s profits. And those three-quarters of a mile did fit perfectly into the plan for the Shaker rapid. So in February 1916, the Vans agreed to purchase the Nickel Plate for $8.5 million. For their purchase price, they’d get 62,400 shares of common stock, 25,032 shares of first preferred stock, and 62,750 shares of second preferred stock. They would pay $2 million down. Beginning in 1921, the first of ten $650,000 notes would be due, with a note to be paid in each subsequent year.

Their control of the railroad was absolute, even though they had bought it entirely on debt.

Of course, the brothers didn’t have $2 million for the down payment. But that detail had never stopped them before. They promptly borrowed $2.1 million from Cleveland’s Guardian Securities and Trust. The Vans then created the Nickel Plate Securities Corporation, and assigned all their stock in the railroad to that holding company. Next, they sold off 20,000 shares  of stock in the new holding company, generating enough cash to pay off the initial loan, and cover the first installment of $650,000. Their control of the railroad was absolute, even though they had bought it entirely on debt.

The use of creative loans, holding companies, and byzantine stock transactions blurred the outlines of nearly every enterprise the Vans undertook. The point was to exert complete control with minimal cash outlay. There is a profound downside to this mode of leverage, but the Van Sweringens would not experience it for years to come. They were in the railroad business for real.

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As the brothers’ wealth and power grew, so did their ambition. Their plans for Public Square unfolded organically, expanding in scope and scale as the Vans become more and more successful. There is no definitive record of the development of the Van Sweringen vision for downtown Cleveland, but by 1916, there were clearly plans for something grander than a mere streetcar terminus. In September 1915, the Forest City House hotel had closed after six decades in business. Early in 1916, the shuttered hotel was purchased by a Van Sweringen subsidiary, the Terminal Hotels Company. The name of the Terminal Hotels Company hinted that the brothers were about to tackle one of Cleveland’s biggest problems.

As the city sprinted into the 20th century, its population and industrial economy outgrew its infrastructure. New bridges across the Cuyahoga were needed to alleviate street and rail traffic. Cleveland had a deserved reputation as a bottleneck for rail traffic, both passenger and freight. That bad rap mostly stemmed from the outdated, overtaxed Union Depot, perched on the lakefront a few hundred feet west of where FirstEnergy Stadium sits today.

The 600-foot-long shed of Union Depot had been a source of pride after its construction in 1866, a half-million dollar marvel (in 1866 dollars) with walls of Berea sandstone. The depot briefly reigned as the largest building under one roof in the country. But by the end of the century, in the words of railroad historian and Van Sweringens biographer Herbert H. Harwood Jr, Union Depot was universally loathed as a “dingy, vastly overcrowded stone hulk.”

The 600-foot-long shed of Union Depot had been a source of pride after its construction in 1866

The 600-foot-long shed of Union Depot had been a source of pride after its construction in 1866

Two subsidiaries of the New York Central—the Lake Shore & Michigan Southern, and the Cleveland, Cincinnati, Chicago & St. Louis Railway (better known as the“Big Four”)—used Union Depot as their Cleveland passenger station, as did the Pennsylvania Railroad, the Central’s main competitor. Smaller railroads used their own passenger depots scattered around the city center, but the huge majority of Cleveland’s passenger traffic—close to 100 trains every day—shuffled through Union Depot’s overburdened eight tracks.

The smoke-drenched and gloomy Union Depot became a scapegoat, an impediment to Cleveland’s inevitable rise to the first rank of American cities. One Cleveland businessman was so ashamed of the station’s inadequacy that he hired a billboard nearby, begging visitors “don’t judge this town by this depot,” an early but vivid expression of Cleveland’s civic tendency toward an inferiority complex. The railroads were eager to be rid of the congestion and delays the outmoded depot created. The public wanted a train station they could be proud of, or at least not ashamed.

billboardCleveland’s government grasped the need for a new station keenly. The city was developing an appetite for aspiration, with civic leaders actively shopping for a master plan that would give the growing metropolis a core of monumental public buildings befitting the nation’s 10th-and-climbing city. Inspired by the “City Beautiful”architecture of the World’s Columbian Exposition of 1893 in Chicago, the city government mounted competitions to plan and design the “Grouping of Cleveland’s Public Buildings” beginning in 1895. A clear consensus emerged backing a unified, Beaux-Arts campus laid out on the bluff directly north of Public Square.

Mayor Tom L. Johnson, a streetcar tycoon turned populist Democrat whose successful campaign for office expressed firm support for a central campus, commissioned a master plan from a three-man panel of famous architects. Arnold Brunner, John Carrère, and Daniel Burnham, the visionary behind the Columbian Exposition’s buildings, would be known as “The Group,” and the plan they delivered to Johnson in 1903 took the unremarkable name of “The Group Plan.”

But the vision that Burnham et al expressed for the center of Cleveland was far from unremarkable. Arranged around a central mall, a federal building, a county courthouse, a new city hall, an auditorium, a massive public library and a new home for the city’s board of education would rise. Inspired by the Place de la Concorde in Paris, the Group Plan was the most ambitious document of urban planning in America since the construction of Washington, D.C. a hundred years before.

Bird's-eye view of the 1903 Group Plan by Daniel Burnham. WRHS.

Bird’s-eye view of the 1903 Group Plan by Daniel Burnham. WRHS.

Anchoring at the northern end of the Group Plan’s mall was a planned state-of-the-art railroad terminal. Arnold Brunner described the importance of the railroad station, and hinted at the discord around Union Depot’s shortcomings:

The railroad to-day has practically replaced the highway and the Railway Station as the City Gate, the vestibule of the town. The visitor to the future Cleveland will arrive in an imposing building, and his first sight of the City will be a view of a great Civic Centre.

The co-operation of the railroads and the city that is becoming evident throughout the country is most gratifying. It is now understood that the railroads need the city just as much as the city needs the railroads, and on the other hand the city needs the railroads just as much as they need the city. It is absurd for one to be the declared enemy of the other.

We believed that the city should extend all necessary facilities for the railroads to carry on their business properly, but it can reasonably demand that this business be so conducted that the streets are not disfigured nor the beauty of the town destroyed.

In this case the station will express its dignified function as the City Gate and will add to the group an attractive monumental building, whose size and beauty will justify its commanding position.

The Group Plan’s grand rail hub faced some challenges on its way to being built. First of all, the railroads that used the Union Depot would have to agree to use the new station. Neither the New York Central nor the Pennsylvania felt that the new station would alleviate the brutal traffic congestion along the east-west lakefront tracks. But there was no better plan. In 1915, the two big roads jointly committed to purchase the planned site of the station from the city for $1 million. The city would use those funds to acquire additional parcels for Group Plan buildings. Voters approved the agreement via referendum by an emphatic vote of 68,357 for, 17,153 against.

But even with such strong public support, the Lakefront station would never be built.

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When the Vans purchased land around Public Square in 1909, the idea was for a modest terminal station, perhaps adding a hotel and department store. The station would host streetcars and electric-powered interurbans, the passenger trains running to smaller cities across northern Ohio. The Vans steadily bought up available parcels around the square, which led to a meeting with the Baltimore & Ohio Railroad, owners of a small property on the brothers’ wish list. At this meeting, the B&O floated the idea of expanding the planned Public Square terminal to accommodate the lesser steam railroads not served by the not-yet-built Mall station, which would be largely for the bigger roads.

The brothers ran with the idea. By 1917—by which point they were railroad owners in their own right—the Vans had brought together a group to plan a twelve-track terminal that would serve the Nickel Plate, the Wheeling & Lake Erie, and the Erie Railroad (the B&O had recused itself from their own idea, strangely). The plan represented an engineering challenge—the property at the southern corner of Public Square sat on the bluff of downtown, which dropped off sharply into the Cuyahoga River. The trains couldn’t approach from any direction but south, given the dense development of the city, so the lines would have to scale the bluff before terminating in a “stub-end” station. But the combined engineering brainpower of three railroads and the Van Sweringen organization devised a plan that worked.

Historian Richard White describes American railroads as “always as much a promise as an achievement,” and even in 1917, at the height of rail’s dominance of American transportation, the roads were in perpetual crisis. There was a constantly evolving drama of consolidation, government-ordered breakups, new facilities, alliances, and rivalries. America’s entry into World War I multiplied the chaos.

Industrial mobilization and troop movement would keep the nation’s railroads busy for the duration of the war. But problems like Cleveland’s rail bottleneck were no longer merely hindrances to business; they interfered with military readiness. By the end of 1917, the Interstate Commerce Commission had formally suggested that the government nationalize the rail system, which President Woodrow Wilson made formal with an executive order. The federal takeover of railroads was made final by Congress in March 1918, creating the United States Railroad Administration, and dividing the nation’s tracks into three regions: East, West, and South.

Alfred H. Smith

Alfred H. Smith

The Vans’ new plan for a combination electric and steam terminal was submitted to the USRA. The director of the eastern region of the USRA was Alfred H. Smith—the same man who had sold the Van Sweringens the Nickel Plate. Smith made a surprising recommendation: He suggested that all of Cleveland’s railroads, including the larger lines tied to the Mall station, run through the Van Sweringen terminal. A few more hurdles had to be cleared, but by the time railroads were de-nationalized after the war in 1920, the plan for a Union Terminal, bringing together all of Cleveland’s railroads, was underway.

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Because of their ties to Alfred Smith (and later, to New York banks), the Vans would never completely refute accusations that they were “little brothers” to Eastern money. The profit structure of the new “Cleveland Union Terminals Company,” yet another Van Sweringen corporate confection, didn’t help that perception. The New York Central would own 93 percent of this new firm, and the Vans’ Nickel Plate subsidiary the remainder. The Vans were more focused on the rights to build above the station.

Hotel Cleveland (still in business as the Renaissance Cleveland) opened on December 16, 1918, just a month after the armistice.

They were already the landlords of one ritzy new business on Public Square. Their Hotel Cleveland (still in business as the Renaissance Cleveland) opened on December 16, 1918, just a month after the armistice. The 14-story, 1,000-room hotel was introduced in the Plain Dealer—via a 20-page special section—as “the first link of the chain that Cleveland is forging to create facilities to meet the demands of a future filled with the most optimistic spirit of prosperity.” The breathless advertorial birth notice for the hotel trafficked in the same future-tense hype as the Van Sweringens’ Shaker Village copy, teasing the “much talked of and long desired Union Station, a monument to Cleveland’s patience, a product of civic pride” that would soon rise next door.

Excavation for the Union Terminal on the southwest corner of Public Square,1924 - Cleveland Memory Project

Excavation for the Union Terminal on the southwest corner of Public Square,1924 – Cleveland Memory Project

The planning and construction of the Union Terminal would fill an entire decade. The grand finale was in the far-off year of 1930, when the Terminal Tower, the 52-story, 708-foot skyscraper crowning the train station, was opened with a gala reception. The scruffy Haymarket district was wiped off the map. 35 acres were cleared, hundreds of buildings were demolished, and 1,500 residents given the boot in Cleveland’s first urban renewal. The street pattern south of Public Square was redrawn, and the hillside leading from the river bottom to the Flats was soon the site of a massive excavation. A mile-long viaduct was built to carry trains to the site of the new hub.

But the innate conservative style of the Van Sweringens came through, even in building a skyscraper.

The tower itself, in style and substance, expressed the same mannered historicism of Shaker Village. From the distorted vantage of the present, the Terminal Tower and its outbuildings seem merely old-fashioned. But the stately Beaux-Arts bearing was already slightly stodgy when it was built, sharing much of the DNA of the 1914 New York Municipal Building, which was designed by the same architects. The Chrysler Building and the Empire State Building in Manhattan, constructed at virtually the same time as the Terminal Tower, are unmistakably modern in their Art Deco lines. But the innate conservative style of the Van Sweringens came through, even in building a skyscraper.

The Union Terminal complex was a self-contained city-within-a-city, a genteel but modern shrine to commercial splendor. The tower itself was for a time the second tallest building on earth, and for decades was the tallest skyscraper outside of Manhattan. To the south of the tower and the hotel, three additional large office buildings offered prestige addresses to Cleveland businesses. But one jewel in the Vans’ prize was missing, and would not be found until nearly the end of the lengthy construction process.

The brothers wanted a department store to anchor the northeast flank of the complex, a world-class emporium on a par with Macy’s of New York or Marshall Fields & Company in Chicago. These stores were more than just places to shop; they were places to see and be seen, and to learn and express upper-middle-class aspirations. Unfortunately, all of Cleveland’s upmarket department stores had joined the exodus eastward on Euclid Avenue in the previous decade. None of the big stores could be swayed to return to Public Square.

36th floor plan for the Terminal Tower

36th floor plan for the Terminal Tower

The brothers sliced this knot by purchasing Higbee’s, a firm founded in 1860. The Vans paid $7.5 million for Higbee’s in 1929, and set about building a $10 million, thirteen-story home for the store. Clevelanders could shop, dine, bank, and work all in one place—or board a train bound for most any place on the continent.The Vans built a lavish set of offices for themselves on the 36th floor, decorated in their preferred, stodgy English style. From suites paneled with oak cut from Sherwood Forest, the brothers could look out on their empire.

In the time between the intrigues that led to the adoption of the Union Terminal plan, to the grand celebration that marked its opening in 1930, Cleveland had entered the first rank of American cities. The city tallied 900,000 residents in the 1930 Census, affirming its standing as sixth-largest in the nation—and surely bound to pass one million in the coming decade.

In a dozen years, the brothers had assembled the largest railroad system in America.

From the success of Shaker Villages to the completion of the Union Terminal, O.P. and M.J. had been busy, and not just with their prized railroad station. In a dozen years, the brothers had assembled the largest railroad system in America,collecting nearly 30,000 miles of track under their control. Their business empire was worth an estimated $3 billion. A gala luncheon marked the triumphant opening of the Union Terminal on June 28, 1930, a celebration studded with speeches from politicians and business leaders.

Oris and Mantis stayed home and listened on the radio.

Stay tuned for the third and final part: the story of the brother’s 30,000-mile rail empire and their dramatic crash from riches to ruin.

5 Comment responses

  1. Avatar
    February 22, 2014

    I grew up living on an estate in Hunting Valley, right down the road from the Vans Daisy Hill. My parents worked for a family that owned 600 acres. When I was a teenager, I worked on another estate in Hunting Valley and part of my job was to weed eat the runway lights and around their private hangar every week. Due to my proximity to some of the oldest money in Cleveland while growing up, I have always been fascinated by the history of Cleveland, and the notable businessmen who helped shape the city. that This is incredibly interesting (not to mention well written). looking forward to the third installment

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