Invisible Giants, Herbert H. Harwood, Jr. Indiana University Press (ISBN: 9780253341631) 2003.
Summary: The story of two brothers from Cleveland who built a rail and real estate empire centered on Cleveland’s Terminal Tower.
Terminal Tower. The main Higbee’s store. Tower City. The Rapid and its Shaker Heights line. Shaker Heights and Shaker Square. Railroads. All of these are part of my memories of the years we lived in the Cleveland area. But until I read this book I knew little of the two retiring but visionary brothers responsible, at least in part, for all of these.
Oris Paxton and Mantis James Van Sweringen grew up in poverty and failed at a number of businesses until they began to build a real estate and rail empire based in Cleveland. It began with a vision of a suburban community in east of Cleveland, a former Shaker settlement. They started slowly, acquiring options on a few lots. Then they realized that for buyers to be attracted to the suburbs, commute times to downtown Cleveland needed to be as short as possible. So they acquired right of way and started building tracks and stations for a rapid transit.
Over time, this meant connecting to railroad right of ways, and through East Coast ties led to acquisition of a railroad, the Nickel Plate Railroad, running from Buffalo to Chicago. Railroads, transit and a hub centered in downtown Cleveland led to development of the Cleveland Union Terminal Complex. This included a rail terminal, traction terminal, an office tower, hotel, bank, department store, and the city’s main post office. In an era of rail consolidation, this led to a fierce competition to buy up other railroads. In the end, this resulted in a railroad empire that nearly extended coast to coast.
This biography traces the complex financial and organizational operations, including the creation of holding companies, that gave the brothers control while having a relatively small personal stake, using various stocks, bonds, and loans, all of it premised on an increasingly profitable business. Holding companies also enabled them to operate free of Interstate Commerce Commission scrutiny. And throughout the 1920’s, it worked, culminating in the grand opening of the Cleveland Union Terminal complex in 1930.
By that time, the stock market had crashed, and with it, both rail traffic and real estate investment. These were the two pillars of their empire. Because their holdings were so highly leveraged in a collapsing market, it was a herculean feat to keep it afloat. Thus the latter part of the book is an account of how that effort broke their health. First Mantis, then Oris died. Ironically for Oris, it was during a train ride to New York to meet with bankers.
It seemed to me an incredibly sad story. Neither brother ever married, sharing a bedroom in a mansion. They had few outside interests. The hubris that drove them to build a transcontinental rail network may have been the overreach that brought them down. Specifically, the Missouri-Pacific offset profits in other parts. Likewise, the location on sloping terrain of the Cleveland Union Terminal, and the number of buildings added to their expenses. Even so, they might have made it were it not for the Depression. But in retrospect, the financing of their empire seemed like a house of cards. But in the 1920’s, everyone thought them geniuses.
Then or now, many Clevelanders knew little of them. Yet they left Cleveland some gems, including Terminal Tower, Shaker Square, one of the early shopping centers, and Shaker Heights with it wide boulevards, attractive homes, and transit lines. This biography is a valuable account for those interested both in Cleveland history and railroad history. On the latter count, it includes numerous photos of rail stock. The brothers may have been invisible giants but they left visible works of enduring value.
