Brothers v. Brothers

Visitors to Room No. 1881 of Cleveland's Union Trust Building, offices of Wheeling & Lake Erie Railway Co., were last week greeted by Patrolmen Jeremiah Smith and Ignatius Reschke and Sergeant Rudolph Maralowitz. The police guard represented (through the medium of an injunction) the interests of Cleveland's famed and potent Van Sweringen brothers. They were stationed, too, for the purpose of foiling, baffling and frustrating the interests of Cleveland's less famed but also potent Taplin brothers. For between the Van Sweringens and the Taplins exists a long-standing feud, which last week resulted in the phenomenon of a railroad with two presidents, two sets of directors, and two allegedly controlling factions.

Wheeling & Lake Erie is, roughly, an X-shaped road, with one arm running from Toledo to Wheeling, W. Va., the other from Cleveland to Zanesville, Ohio, the two crossing at Brewster, Ohio. The Van Sweringens, who consider the Wheeling & Lake Erie a desirable unit in their proposed Fourth Trunk Line, have acquired control of the road through stock held by the Nickel Plate and Alleghany Corp.* But Frank Taplin, largest single stockholder and leader of a powerful minority group of Wheeling & Lake Erie stockholders opposed to Van Sweringen denomination, has also a Trunk Line plan. Less ambitious than the Van Sweringens, the Taplins plan what is primarily a fast freight line between the Great Lakes and Baltimore; to them the Wheeling & Lake Erie is quite as essential as to the Van Sweringens.

When Wheeling & Lake Erie stock holders met at Cleveland last week, the Taplins argued that the Van Sweringens should not be allowed to vote their Nickel Plate and Alleghany holdings, inasmuch as the Interstate Commerce Commission last month (TIME, April 29) ordered the Nickel Plate to "divest" itself of its Wheeling stock. Therefore, the Taplins argued, the Van Sweringens had no right to vote stock which they had acquired and were holding in defiance of the I. C. C. Compromising, the Van Sweringens voted to adjourn the meeting until August 1, at which date the legality of their Wheeling holdings will presumably have been settled. After the motion to adjourn had been carried, the Van Sweringen representatives left the meeting, but the Taplins continued with a meeting of their own. They elected Frank Taplin president, in place of Van-man William McKinley Duncan, and threw out all the Vanmen directors, including Frederick H. Ecker, Metropolitan Life's new president. Director Leonor Fresnel Loree, head of Delaware & Hudson, was also dispossessed.

The Van Sweringens refused to admit the legality of the Taplin proceedings (which included declaring that all acts of the directors since May, 1927 were null and void). Designating the Taplin meeting as a "rump"* meeting, they got an injunction preventing the Taplin officers from occupying Wheeling offices and especially from examining Wheeling records.

Familiar is the story of the Van Sweringen brothers, Oris Paxton and Mantis James. Once they sold newspapers, and then they sold real estate, and now they have shifted to the buying side of merchandising and make railroads their specialty. Oris P. is 50, Mantis J. is 47; they are both bachelors; and, though some observers maintain that Oris P. is the Planner and Mantis J. is the Doer, they pride themselves upon being equal in all things and to share all things--even a reputed fraternal check book--in common.

Not so well known are the Taplins, partly because Frank E. Taplin does not like newsmen and emphatically dislikes such newsmen as roam about accompanied by cameras. Unlike the Van Sweringens, the Taplins are not usually regarded as equals, Frank E. Taplin being quite unmistakably Chief Taplin, with Charles Taplin able lawyer, acting largely as attorney for the Taplin interests.

Railman Frank Taplin, 55, began his industrial career 42 years ago, started in as office boy for no less famed an employer than John D. Rockefeller Sr. (The present "Taplin interests" include a vague but potent backing from the Rockefeller family, whereas the Van Sweringens are more directly indebted to the House of Morgan.) Mr. Taplin's father was manager of the refined oil department and was later vice president of the old Standard Oil Co. But it was coal, not oil, that founded the Taplin future. In 1900 Mr. Taplin became salesman for Pittsburgh Coal Co.; by 1912 he was sales manager. Soon he left Pittsburgh Coal Co., founded Cleveland & Western Coal Co. By 1926 his coal company, now North American Coal Corp.. was world's largest producer of tonnage,

Mr. Taplin decided that the best thing a big coal company could do was to buy its own railroad. He didn't like (he said) the way the Pittsburgh & Virginia was run (it had gone through several receiverships), so be bought it. Later he acquired large holdings in Wheeling & Lake Erie and has since been attempting to put together the lake-to-sea system which George Gould had begun.

Romantic reporters who discuss the Van Sweringen Rail Empire also discuss the Van Sweringens as Rail Emperors. On such a basis, however, able John J. Bernet should certainly be listed as at least No. 1 Field Marshal. For though the Van Sweringens may handle the stocks and bonds, it is Mr. Bernet who has most to do with making the engines go and the cars follow them. In 1916 he took the Nickel Plate, commonly known as "a streak of rust," and quickly made it a sound and paying railway. In 1927 he was transferred to the Erie (not to be confused with the Wheeling & Lake Erie) and rapidly rehabilitated this over-capitalized dividend-passer. Last week was announced his appointment as president of both the Chesapeake & Ohio and the Pere Marquette, these making the third and fourth Van Sweringen roads of which he has been president.

Though announcement of the new Bernet position was officially made, it will not take formal effect until the I. C. C. has approved it. The new Erie president will be Charles E. Denny, Erie vice president and long a Bernet man. Meanwhile W. J. Harahan, Chesapeake & Ohio President, will become its senior vice president, will also become senior vice president of Pere Marquette. Mr. Harahan became Chesapeake & Ohio President in 1920.

*Alleghany Corp. was formed in the present year (TIME, Feb. n) as holding company for Van Sweringen railroad stocks. Its initial offering ($35,000,000 in 5% convertible bonds) was marketed through J. P. Morgan & Co., National City Co., First National Bank, Guaranty Co., Alleghany Corp. Last month announced an issue of $25,000,000 in cumulative preferred, series A, with rights to purchase 1 1/2 shares of common at $30 a share for each share of preferred.

*There is excellent historical precedent for the "rump" designation. In 1648, when the English Parliament was about to move for the execution of Charles I, the only way to get a majority for such a proceeding was to expel many a moderate member who did not wish for the King's death. After this expulsion, commonly known as Pride's Purge, the portion of Parliament remaining was the original "rump" meeting --i. e., a portion of the original whole.