Two of Akron's Giants Topple

AKRON & SUMMIT COUNTY

Karl H. Grismer,

Summit County Historical Society,

Akron, Ohio c. 1950 p 289-290

Two of Akron's Giants Topple

     The panic years [1893-95] dealt Akron a tragic blow. Mortgages on hun­dreds of homes were foreclosed and the families were evicted. Laboring people accumulated debts which hung over them for years. Many small business men were forced into bankruptcy. Grocers who catered to the "carriage trade" were hit particularly hard.

     It was not just the "little fellows" who were hurt. Many of Akron's leading citizens suffered such severe reverses that they were ruined financially. Two of the victims were business giants—Ferdinand Schu­macher and John F. Seiberling.

     Schumacher got into financial difficulties through his efforts to retain complete control of the American Cereal Company which he had headed since 1891.

     Among the top officials of the company there were differences of opinion regarding methods of operation. Schumacher, the king, had made his fortune selling oatmeal by the barrel or, for export, in 14-pound tins. He did not believe in advertising. Stuart, of the mills in Cedar Rapids, and Crowell, who had come to the company from the Quaker Mills in Ravenna, had different ideas. They insistently de­manded that cereals be sold in small containers, under the name of Quaker Oats, and be extensively advertised.

     There were other differences of view—many others. By the mid-1890s Schumacher realized that he would have to resign as president of the company or get a controlling interest in the company's stock and "ust Stuart and Crowell from the firm.

     Choosing the latter course, he borrowed heavily from Cleveland banks, purchased the needed -stock, got control of the company, and forced Stuart and Crowell to resign from the board of directors.

     Schumacher undoubtedly expected that he soon would be able to repay the money he had borrowed. But he couldn't. And on June 3, 1896, he was forced to make an assignment of all his assets, everything he possessed, in the probate court of Summit County. Altogether the listed assets totaled $2,400,000.

     Thereafter Schumacher made a valiant fight to save the cereal empire he had established. But powerful forces were arrayed against him and early in 1898 he lost his American Cereal stock, sold at court order for what he claimed was only a fraction of its true value. The stock was acquired by Myron T. Herrick, James Parmelee and Joseph R. Nutt, of Cleveland, and Will Christy, of Akron. Schumacher was voted out of the presidency, and Stuart and Crowell returned to their former positions of responsibility.

     Three years later, in 1901, a new cereal combine, the Quaker Oats Company, was organized as a holding company. The American Cereal Company came under the control of the new organization but did not lose its identity entirely until 1907 when the Quaker Oats, after a reorganization, became the operating company.

     Schumacher was plagued by misfortune after leaving the company he had built. All his properties were tied up in litigation for years. Paper mill and water power development projects in Marseilles, Ill., in which he had invested heavily, collapsed, and he dropped more money in backing a temperance town at Harriman, Tenn. For a time he was almost destitute.

     Early in the 1900s Schumacher began making a come-back. With his two sons, Adolph and Louis, he founded the Schumacher Cereal Mills in Iowa City, Ia., and a few years later proudly declared that he had finally paid off all his debts with compound interest. But he had little else besides the cancelled notes.

     Schumacher died at his E. Market Street home at the age of 86 on Wednesday, April 15, 1908. The Beacon said: "The poor German immigrant dies little better off than when he came to Akron, yet in his life here he has been a tower of strength, a factor that will always make his name respected and revered by all familiar with the city's affairs and the city's history."

     The panic years hurt Seiberling almost as much as they did Schu­macher. Seiberling's trouble was mainly caused by involvement in too many projects.

     In addition to manufacturing mowers and reapers, he built a large strawboard factory in East Akron in 1871 and a fine, six-story flouring mill, also in East Akron, in 1883. He later converted this mill into a plant for making rolled oats and successfully promoted the famous Mother's Oats. For nineteen years he owned the Academy of Music. Then he acquired controlling interest in the Akron Electric Street Railway and built interurban lines. He also invested heavily in oil well and mining projects. Always he kept his money working. . .