Mickey Saves Lionel From Bankruptcy

from Toys and Novelties, February 1935

Lionel Discharge from Receivership proves Real Drama in Business

Federal Judge Proclaims Redemption of Leading Train Makers “Most Successful in History of New Jersey Courts”; Famous News Commentators on Radio Single It Out as Day’s Business Achievement; Nation’s Greatest Newspapers and News Weeklies Feature Story on Front Page and Comment Editorially –Receivers Pay Claims of $296,197 and Turn Back to Company Assets of $1,900,000.

THE curtain 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 followed receivership.

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 produce 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.

Produced 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.”

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

For 1935, 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. 

Article Originally Printed on “Toys and Novelties” February 1935 in the “New Toys and Toy News” section.