The Studebaker Descent: Trusts, a $2 Million Estate, and a Bankruptcy

The Studebaker Descent: Trusts, a $2 Million Estate, and a Bankruptcy

What became of it: The fortune did not descend as one story, and the record will not let it be told as one. Three branches are documented. In John M.'s line, the money persisted in trust: the federal court's findings in Studebaker v. United States, 195 F. Supp. 841 (N.D. Ind. 1961), record that in January 1920 John M. Studebaker Jr. and his wife Lillian executed mutual trusts of Studebaker Corporation stock with the Farmers' Loan and Trust Company of New York as trustee; at the trusts' termination on 26 October 1927 the stock he had contributed was valued at approximately $2,332,593.75 and hers at approximately $847,781.25, and the whole was re-settled the next day in a new trust for their joint benefit — the same trust still being litigated, as a substantial estate asset, at Lillian's death in 1952, when her estate-tax return paid $61,812.43. In Clement's line, the second generation's largest figure is Clement Studebaker Jr.'s: his estate was reported at $2,000,000 when he died in Chicago on 3 December 1932 (the Pantagraph's account of his two wills, the second superseding the first and leaving the fortune to his two children). His fortune was a utilities fortune of his own making, not an inheritance share: he was president and chairman of the North American Light and Power Company and of the Illinois Power and Light Company and its Illinois Traction subsidiary, co-founder with his brother George of the South Bend Watch Company, and treasurer of the Chicago South Shore and South Bend Railroad — the house he built for himself in South Bend in 1908, Elm Court, reappears in this section as Vincent Bendix's purchase.

The break in the line: Clement Sr.'s eldest son, George Milburn Studebaker, inherited Tippecanoe Place on his mother Anna's death in 1916 and lived there until 1933, when he and his wife Ada were forced to give up the house in a bankruptcy — the house that had cost $250,000 to build stood vacant from 1933 to 1941, when it was bought for $20,000 by E. M. Morris, the banker of Part Three, and given to the South Bend schools. The contrast is the document's own: $250,000 to build in 1889, $20,000 to buy in 1941, both figures published. No general account of the family's present-day fortune appears in the sources consulted, and none is stated here; the documented pattern is division — one branch in trusts into the 1950s, one $2 million estate passing to two children in the Depression's worst winter, and the great house lost to bankruptcy in 1933.

Sources:

1. Studebaker v. United States, 195 F. Supp. 841 (N.D. Ind. 1961) — the 1920 trusts, the 1927 termination values of $2,332,593.75 and $847,781.25, the 1952 estate tax of $61,812.43.
2. The Pantagraph (Bloomington, Ill.), as carried in Clement Studebaker Jr.'s biographical record — the $2,000,000 estate and the two wills; South Bend Tribune, 4 December 1932 — his death in Chicago on 3 December 1932.
3. University of Notre Dame, Building South Bend, Tippecanoe Place history; South Bend News-Times retrospective (2026) — the 1933 bankruptcy and surrender of the house; the 1941 purchase for $20,000 by E. M. Morris and gift to the schools.
4. North American Light and Power Company record and Clement Studebaker Jr.'s biographical record — the utilities presidencies and the South Shore treasurership.