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Saves Lionel From Bankruptcy
from Toys and Novelties, February 1935
Discharge from Receivership proves
Real Drama in Business
Judge Proclaims Redemption of
Train Makers "Most Successful
in History of New
Jersey Courts"; Famous News
Radio Single It Out as
Day's Business Achievement;
Nation's Greatest Newspapers and
Feature Story on Front Page
and Comment Editorially
--Receivers Pay Claims of $296,197
and Turn Back
to Company Assets of $1,900,000.
has just rung down on perhaps the outstanding romance of the
vanishing business depression. The principal actor is the Lionel
Corporation, makers of Lionel Trains, and so conspicuous was its
performance in extricating itself from receivership that Federal
Judge Guy L. Fake ill the United States District Court at Newark
was moved to comment that it "was probably the most successful
receivership in the history of the New Jersey courts." In discharging
the Lionel Corporation from receivership, the court praised the
management and vision of the receivers. Worcester Bouck and Mandel
Fankel. The receivers paid $296,197 in
claims and turned back to the company assets of $1,900.000, putting
the Lionel Corporation in one of the soundest positions of all
manufacturing institutions, volume considered.
But the salient
details give but a faint glimpse of the drama-that preceded and
When the Lionel Corporation went into receivership in May,
1934, it did not "bog down." If anything, receivership Served
as a spur to its initiative, creative genius and imagination.
Under the direction of Mr. Caruso, in charge of all production,
the factory set to work and evolved the first authentic scale
model of the Union Pacific's famous streamline train. That caught
the imagination and business foresight of the trade, and orders
for this model rolled in on Lionel. Not only that but it dramatically
improved its entire train line, introducing new combinations,
new motors, new colors, new values and enhancing the salability
of the line immeasurably. How accurately the Lionel management
had read tile desires of trade and public alike can be seen in
the history of sales. Lionel has been in business for more than
35 years, but never in its history has it enjoyed so great a December
sales volume as in 1934.
But the climax
to all its thinking came in August. It completed a contract with
Walt Disney, the father of Mickey and Mini Mouse whereby it would
these national joy-bringers in mechanical and electrical toys.
The idea of Mickey and Minnie Mouse pumping away on miles of track
was a smashing triumph. An action toy centered around this beloved
couple swept the toy world. Orders for this toy, which retailed
at a dollar exceeded 350,000, and although the great Lionel factories
at trvington, NJ worked night and day seven days a week. their
production was not equal to the vast tide of demand.
for the holiday trade, the Lionel Mickey and Minnie toy has turned
into a brisk all-year-round seller, and in many stores is the
life of the toy department.
"Now we have
gone one step further," said Mr. Cowan, president of the company.
"for years there have been candy rabbits, chocolate rabbits, fluffy
rabbits for Easter, but never a real rabbit toy. So we conceived
the Peter Rabbit Chickmobile. This toy consists of a Peter rabbit
on a car, pumping it madly as it races around a circular track
or across a straightaway. On the forepart of the car is a quaint
basket which can be filled with Easter Eggs. This ingenious and
amusing toy enables the toy department
to participate for the first time in the profits from heavy Easter
spending. The Peter Rabbit Chickmobile has been received as enthusiastically
by the trade as Mickey and Minnie Mouse and orders are pouring
In the story of Lionel's ingenuity the newspapers, magazines and
radio commentators found human material to send to the four corners
of the earth. Scarcely had Judge Fake's words become official
record than Lionel's story was front page news.
Both Lowell Thomas and Edwin C' Hill took time out on the radio
from discussing world affairs to talk about Lionel's Mickey and
Minnie Mouse, and its streamline train. Into more then 20,000,000
homes was broadcast Lionel's enthralling business story
Lionel has plans as dramatic as fascinating as those which rode
the leader of the toy train industry out of receivership and to
its greatest sales peak since 1930 which was its banner year.
Printed on "Toys and Novelties" February 1935 in the
"New Toys and Toy News" section.