XXIII. The Man in the Tower

It is a highly appropriate circumstance that the office from which Cyrus Stephen Eaton directs his vast financial empire should be high in the Terminal Tower, in a suite of oak-paneled rooms on the thirty-sixth floor which once were occupied by the Van Sweringen brothers and, later, by another business genius, Robert R. Young.

The point has been made that visiting dignitaries from the Soviet Union are unusually fond of the great tower. But a Cleveland subject commanding even more of their admiration is Mr. Eaton himself, the man in the tower.

This is, of course, a contradictory situation. Communists are not supposed to think kindly of capitalists, much less admire them. Capitalists, in turn, are supposed to abhor the followers of Lenin; they are supposed to regard all proponents of Marxist-inspired ideologies as the enemy.

These are the long-accepted ground rules, but the modern-day Reds and Capitalist Eaton simply have not been playing the game according to the rules. They have been bussing and embracing in public and smothering each other with flattering words for a number of years, much to the confusion of the onlookers.

When Anastas Mikoyan stopped off in Cleveland to visit Eaton in January 1959, he presented the best wishes of Nikita Khrushchev, and added gratuitously: “When Mr. Khrushchev talked about you, his whole face was beaming!”

Eaton has made the leaders of the Soviet Union beam more than once by his friendly overtures and his sympathetic words. On the other hand, he has also made many of his own countrymen wince with his numerous critical pronouncements on American international and domestic policy.

The frequent alignment of this capitalist, so wealthy he has been called “The Cleveland Croesus,” with the governments of the Communist world has been a matter of genuine puzzlement to spectators at the international game of power politics. During the troublesome decade that began in 1955, America has tried to analyze and rationalize this paradoxical state of affairs without real success.

If it is any comfort to the political experts, Eaton also has made a practice of baffling those who have undertaken to decipher his words and actions throughout his business career. He is as much of a riddle to students of finance as he is to students of international affairs. He is a man whose words and actions do not yield easily to elucidative analysis. The Cleveland multimillionaire has remained what a Fortune magazine writer, Robert Sheehan, called him in 1961-“No less an enigma than the Soviet Union itself…”

Whatever Cyrus Stephen Eaton is, in the final judgment of the world, his spectacular life has been inextricably intertwined with the development of modern Cleveland, the city he has called his home since one June day in 1901 when he stepped off the train at the lakefront station. He was a seventeen-year-old boy with twenty dollars in his pockets and the ruddy glow of the windswept Nova Scotia farm country on his cheeks.

He had traveled to Cleveland to spend the summer with his uncle, a Baptist minister, Reverend Charles Aubrey Eaton, and, hopefully, to earn some money to cover expenses at McMaster University in Toronto, where he had enrolled for the fall term. The Rev. Mr. Eaton lived in the old Euclid Hotel, not far from the Euclid Avenue Baptist Church, of which he was the minister.

As young Cyrus registered at the hotel, he made known his intention to seek work in Cleveland, and asked the desk clerk to keep him in mind should he hear of any openings. The clerk said he understood the hotel management was looking about for somebody to handle desk duties at night. Cyrus applied for the job immediately and was hired, but his career in the hotel business was short-lived.

The most prominent family in the congregation of the Euclid Avenue Baptist Church was, without challenge, that of John D. Rockefeller, who served as a trustee of the church and as the Sunday School teacher. He was the principal benefactor of the church, of course, but besides contributing financial support, the world’s richest man also took a direct, personal interest in every phase of the institution’s well-being. John D. especially took pride in knowing the ministers of the Euclid Avenue Baptist Church perhaps better than they knew themselves. He studied them in church, on the golf course, on rides in his carriage, and in his home.

The Rev. Mr. Eaton enjoyed Rockefeller’s high favor. He was a young man, more like a brother to young Cyrus than an uncle, but he had demonstrated qualities of intellect and character that had impressed the old oil king. Upon hearing that the minister’s young nephew was visiting him, John D. insisted that Rev. Eaton bring the boy with him to Forest Hill for Sunday dinner that weekend.

Mr. and Mrs. Rockefeller both were taken by the bandsome young Canadian lad with the bright smile and unusually formal manners. In the course of the get-acquainted conversation, Cyrus recounted-probably with a touch of pride- how he had landed a place on the hotel staff.

Mrs. Rockefeller was disturbed, if not horrified, by the news. A hotel to this genteel, highly religious woman was a distasteful place; a breeding ground for evil, outlandish capers; the refuge of nymphs and satyrs. She obviously felt strongly about the minister’s nephew being exposed to such a place, and she turned to her husband and called upon him to save the boy through a counteroffer.

“Isn’t there something that Cyrus can do around here?” she asked.

Rockefeller, an amenable spouse, nodded. He indicated that he could find room for young Eaton on his Forest Hill staff.

“Thank you,” said Cyrus, gravely. “I shall try to obtain a release from my agreement with the hotel manager.”

That minor technicality was easily handled, although the hotel manager understandably was incredulous when the newly hired youth told him that the famous John D. Rockefeller sought his services. Once convinced, the hotel man offered to exchange jobs with Eaton.

Life on the Rockefeller range at Forest Hill was both pleasant and interesting. Eaton served in a combination of capacities. He was an office boy, the watchman over the telegraph room into which flowed messages from all the financial capitals of the world, a messenger, and a social companion. In this privileged position, he sat in the throne room of international finance, and it is not too farfetched to say that it was here that he learned the primer on making money and wielding power.

After two full summers on the Forest Hill staff, Eaton was transferred to a job with Rockefeller’s new East Ohio Gas Company, which John D. had organized to bring natural gas into Cleveland and the surrounding area. The company was hard at its basic job of laying gas mains all over the city, and Cyrus, following his indoctrination in the science of ditch-digging, shortly was placed in charge of a crew of workmen. By summer’s end, he was directing four hundred workmen in the laying of gas mains under Woodland Avenue and other sections of downtown. When he is in a reminiscent mood today, Eaton takes visitors to one of his thirty-sixth-floor windows and points down at the Public Square.

“I helped to lay the gas mains under the Square,” he says, and the note in his voice unmistakably is that of pride.

Tearing up a town to put down the gas pipes is a messy job. The gas company’s efforts, while indubitably in the best interests of the city, were not appreciated entirely by the people of Cleveland. Theirs was a pretty city, remember, and they were justifiably proud of its parklike appearance and the elegance of avenues like Euclid and Prospect. They were not unaware of the importance of the natural gas service to the community, but their quite human reaction to the network of ditches that suddenly scarred the lawns and boulevards was anger and outrage. Somebody in the gas company had noticed Cyrus Eaton’s talent for quiet, diplomatic speech, and he was given a new responsibility-soothing the irate householders and business people whose grounds had to be torn up to receive the gas supply pipes.

The natural urbanity and sophistication of Cyrus Eaton that enabled him to step smoothly into the pace of big city life and to take his place among the people of high finance is especially surprising in light of his native environment. Eaton was born in Pugwash, Nova Scotia, on December 27, 1883, the son of Joseph Howe Eaton and Mary McPherson Eaton. His father operated the village store and did some farming. His mother was a descendant of New Englanders whose loyalty to the Crown had prompted their migration to the bleak Canadian maritime province in 1782. It was her hope that Cyrus, the fifth of nine children, would follow in the vocational footsteps of his cleric-uncle in Cleveland.

Throughout Cyrus’ apprenticeship period under John D. Rockefeller, he continued to attend McMaster University and to pursue the study of philosophy, a natural approach to theology, and it appeared that his mother’s wish for him would come true. But a struggle was shaping in the youth’s mind. The world of finance and industry in which Rockefeller was the central figure had captured Eaton’s fancy. So had the quiet preaching of the old multimillionaire, who repeatedly impressed on his young protege that there was a spiritual value in the creation of wealth so as to provide more jobs and a better livelihood for humanity.

In a reminiscent mood, not long after his eighty-first birthday, Eaton recalled that Rockefeller-be referred to him as “Mr. Rockefeller,” in the respectful voice of one speaking of his elder-wanted him to join Standard Oil headquarters staff in New York City.

“I’m sure,” Eaton said, “that if I had gone, I eventually would have become president of Standard Oil. But I didn’t want to go to New York City. I wanted to stay in Cleveland, and I did.”

Probably the only time of indecision in Cyrus Eaton’s life came at the time he graduated from McMaster University with an A.B. degree in June 1905. Theology and big business both beckoned to him. He took a job as a cowboy on a ranch in Saskatchewan to give himself time to make a decision. Late in the autumn, he returned to Cleveland to visit Uncle Charles, intending to spend the Christmas holidays with him. But his uncle told him of a church post that was available- a position as lay minister of the newly organized Lakewood Baptist Church-and Cyrus accepted the job.

Eaton’s career in the suburban Cleveland church was brief, and if it was marked by any Bashes of ecclesiastical enthusiasm, they went unrecorded. Not long after he had cast his lot with the church, he was approached by some Rockefeller associates who wanted him to undertake a special business mission in their behalf.

The small syndicate wanted him to go to Canada and there, acting as their agent, obtain gas and electrical utility franchises in the young, growing cities of the northern nation. Eaton accepted the assignment and returned to his native land. Within a short time, he won the right to build an electrical power plant which would serve the city of Brandon, Manitoba. When he returned to Cleveland with the good news, he found the syndicate had grown wary of further speculation and had withdrawn from the Canadian investment because of the financial panic which had taken hold of the nation in that year, 1907.

His own enthusiasm for the project undiminished, Eaton managed to borrow enough money in Canada to finance the construction of an electrical power plant in Brandon. Once the plant was in operation, in 1909, he sold it for a Significant profit. With this as his stake, he turned his efforts toward the acquisition of utility franchises elsewhere in Canada and the cities of the Middle West of the United States. One franchise led to another, and in a surprisingly short time Eaton’s Continental Gas & Electric Company, a Kansas corporation, was a Significant factor in the utilities field.

Success came to Cyrus Eaton with such a rush and Hurry that he didn’t have time to sit down and assess his real wealth. He says it came as something of a surprise to him when, in 1914, he learned he was a millionaire. The realization burst upon him one day when he was offered two million dollars for his utility properties- an offer he refused, incidentally, in favor of a further expansion of his holdings.

Eaton likes to recall that his father journeyed to Cleveland from the old family home in Pugwash about this time. Cyrus met him at the station and as the two rode along toward home, the son posed a question.

“Father,” asked Cyrus, “what would you do if you had a million dollars?”

“I’d satisfy all my worldly wants, I think,” said the elder Eaton. “Why do you ask?”

“Because I have between two and four million dollars and I don’t know what to do with them,” said Cyrus.

Eaton’s solution to his dilemma was to plow his money back into the utility business, reinvesting and expanding his corporate empire until eventually the companies he controlled were the suppliers of gas and electrical power to some eight hundred communities in the United States and Canada. The holding company he formed, United Power & Light Company, became one of three giants in the national field, a competitor with the combine headed by Samuel Insull of Chicago and Sidney Mitchell’s Electric Bond & Share.

The battle for supremacy between Eaton and Insull reached the decisive stage between 1926 and 1930. The victory apparently went to Insull in January 1930, when Eaton sold him his stock interest in Chicago’s Commonwealth Edison Company and the People’s Light and Coke Company for an estimated fifty-six million dollars.

Some financiers later were sharply critical of Eaton for making this particular deal, alleging that he knew it would prove to be too much of a burden on Insull’s strained finances. Eaton, who professed a friendly feeling toward Insull, argued that he had supposed his rival knew what he was doing at the time. At any rate, Insull’s financial base was so weakened by his expensive purchase of Eaton holdings that he was unable to meet the demands and crises of the Depression. His utilities empire collapsed and Insull, a broken man, fled to Greece to avoid prosecution.

The complicated financial life of Cyrus Eaton was only partly taken up with the problem of utilities during the 1920s. He had begun to make his influence felt in the steel industry, starting in 1924. The following year he walked into the executive offices of the Trumbull Steel Company in Warren, Ohio, and stated that he was interested in purchasing control of the floundering corporation.

When the Trumbull executives allowed skepticism to creep into their voices over Eaton’s ability to swing such a large investment, the Clevelander made a very gaudy suggestion.

“Why don’t you call the Cleveland Trust Company and ask if Cyrus Eaton’s personal check for twenty million dollars will be honored at that bank?”

One of the startled steel officials took him up on the challenge and called the Cleveland bank to pose the question. There was no hesitation at the other end of the line. The president of Cleveland Trust quickly replied that it would be a pleasure and a privilege to cash one of Cyrus Eaton’s checks for that amount.

As it turned out, only eighteen million dollars was needed to purchase control of Trumbull Steel, and Eaton gladly paid the price. It gave him his keystone piece for a design which, if successfully completed, would give him a steel combine to rival or surpass the largest existing corporation in the nation, namely, United States Steel.

Eaton now was operating along the classic lines laid down by his mentor, John D. Rockefeller, some sixty years earlier. The oil tycoon successfully and systematically had gone about the job of eliminating competition in the refining business through merger and purchase, swallowing one rival after another until Standard Oil had reached gargantuan size and dominated the oil industry. Now the pupil was challenging steel. In a determined series of transactions, he bought control of United Alloy Steel Company, Central Steel, and Republic Iron & Steel, and merged them into a new production unit called Republic Steel Corporation. It represented, finally, an amalgam of eight different steel companies. This creation of Cyrus Eaton suddenly stood forth as the third-largest producer in the steel industry- a tremendous achievement, but still short of the Cleveland financier’s goal. He wanted Republic to become the giant of the industry.

The simplest and most direct route toward that treasured end was the merger avenue, and now Eaton aimed his sights at the plumpest prize of all, Youngstown Sheet & Tube, a company in which he was a stockholder of importance. It was believed that his strategy would be to merge Sheet & Tube with Inland Steel of Chicago, followed by a quick marriage with Republic.

Whatever his plan, it was jarred by the dramatic entry on the scene of another suitor interested in wooing and winning Youngstown Sheet & Tube-Bethlehem Steel Corporation. The bidding for control immediately became spirited, and it was obvious that money was a secondary factor. Eugene Grace, president of Bethlehem, underlined this point when, in raising the financial ante, he said:

“What are a few million dollars more or less in a deal of this magnitude?”

It appeared at last that Bethlehem had won the prize. Stockholders of Youngstown Sheet & Tube were called to a meeting to vote their approval of the merger. At this critical moment, Cyrus Eaton appeared on the scene holding 35 per cent of the Youngstown company’s stock- enough to block the merger. He had purchased some fifty-one thousand shares of the stock, about 4 per cent of the total, on March 22, the closing date for transfer of ownership on the company’s books.

The question of Eaton’s right to vote the stock immediately became a legal issue, and the struggle for control of Youngstown found its way into the courts where, after a series of bitterly fought battles, Bethlehem finally called off the proposed merger. Of this classic clash and the Eaton strategy, one Cleveland financier was quoted as saying:

“For boldness, for careful calculation of mathematics and the law of the problem, put it down as one of the unforgettable incidents of American finance.”

It was, however, a costly victory for Eaton. The acrimony of the legal give-and-take had lost him some old friends and supporters high in the aristocracy of Cleveland finance. The battle also had been a distracting influence at a time when the worst economic storm in American history was developing. Had Eaton been free to prepare for the Depression, it is possible he might have battened down the hatches, pulled in his sails and, perhaps, ridden out the storm with a minimum of damage and loss.

In the process of putting together Republic Steel, Eaton had used a most effective welding instrument called Continental Shares, an investment trust which he organized in 1926. Riding high on the crest of one achievement after another, Continental stock soared to three hundred dollars a share by 1929, and the predictors of its future were unconfined in their optimism. A year later, at the time of the court’s decision in the Bethlehem fight, Continental Shares was quoted at eight dollars a share, and in 1932, when a stockholder, half in jest, offered a hundred shares of Continental for a pack of cigarettes, he found no takers. This investment trust, which owned at its peak, capital and surplus of 150 million dollars in 1929, was able to distribute only sixteen million dollars among its eighteen thousand shareholders when it was liquidated in 1933. Many thousands of those unfortunate investors were Clevelanders, and it goes without saying that Eaton’s stature in his home city was diminished considerably by the financial fiasco brought about by the Depression or, as Eaton himself described it, “the economic tornado of the 1930s.”

A short time before the crash, Eaton dropped in on Charles A. Otis, a founding partner in the Eaton-controlled investment banking firm, Otis & Company. According to Otis, their conversation ran as follows:

EATON: ’’Do you know how much we are worth today?”

OTIS: “No.”

EATON: “Two hundred and seven million dollars.”

OTIS: “Don’t you think we ought to sell some of that?”

EATON: “No. We will hold on, and some day it will be four hundred and fourteen million dollars!”

It didn’t happen that way. Eaton, ever the gambler, went for double or nothing and ended with nothing; at the very best, he was left with only a trifle more than nothing as his fantastic finances were figured.

It was said that Eaton personally was worth one hundred million dollars in 1929. When the dust had settled after the 1930 debacle, the accepted estimate was that the Cleveland financier was left with a mere one hundred thousand dollars- a nice, impressive figure in many respects, but hardly comparable in majesty, might, or purchasing power with one hundred million dollars.

The full extent of Eaton’s setback in that year of depression is not known, but among his losses were control of Republic Steel, heavy investments in utilities, working control of the Goodyear Tire & Rubber Company of Akron, largest rubber company in the world, and sizable stock holdings in two competitor companies, Firestone and Goodrich. At the time the Depression struck, Eaton was well on his way toward a merger of those three companies, a move which would have created a colossal organization able to dominate the rubber industry just as, through merger, he had planned to make Republic Steel dominant in the steel industry.

Complicating Eaton’s financial situation at the time was the quick and forceful way in which eastern bankers called his loans, forcing him to liquidate many of his investments at the sacrifice level to meet his cash obligations. He never forgot. It was apparent in his bitter resentment of the New York banking houses in the years that followed. Newsweek magazine, in a biographical study of the Clevelander in October 1945, mused: “Historians may well find that the depression would have ruined Eaton anyway…. There was a suspicion, however, that the [New York] bankers were harsher to him than they might have been out of dislike for his trouncing of Eugene Grace and Charles M. Schwab in their efforts to merge Youngstown Sheet & Tube with Bethlehem Steel. Eaton has always maintained that his attempts to build a Midwest industrial empire were based on the idealistic desire to make that region independent of New York financial control. He says he resented the way ‘New York’ squeezed the Seiberlings out of Goodyear Rubber and tried to take over Henry Ford.”

Recalling this low point in the career of the Cleveland financier, Business Week magazine (March 12, 1955) made the following observation that is so often overlooked, but which is vitally important in separating Eaton from run-of-the-mine millionaires: “The loss of his fortune did not bother him nearly so much as the loss of personal prestige. Before the 1930s he had been in constant demand by railroads and industrial companies in need of directors and advisers. Now he found himself being ousted even from companies he had helped create.”

If the Depression spoiled Eaton’s carefully constructed grand design for success, it did not break him. He still controlled Otis & Company, and the investment banking house became his comeback vehicle. By 1942, approximately ten years after the collapse of his financial empire, Eaton was back in the front ranks of successful international investment speculators. His plunge that year on a remote piece of Canadian real estate in western Ontario may have been the most important risk of a career studded with gambles.

World War II was making an extreme demand on the dwindling high-grade iron are reserve of the fabulous Mesabi Range in Minnesota in 1942, and the United States and its allies understandably were concerned by the signs indicating that a rich new source would be needed to sustain the steel industry of North America in the foreseeable future.

Tests of iron ore known to exist in abundance in the area of Steep Rock Lake in Ontario had proven the deposit to be of a very high grade, but there was pessimism over the ore’s accessibility. Steep Rock Lake was in an unspoiled wilderness. It was a shimmering blue centerpiece in a hunter’s paradise, far from civilization and without easy access, except by the planes of the bush pilots. Survival there was a touch-and-go matter in wintertime when the temperature had been known to drop to fifty degrees below zero. The most serious problem, however, was that the main deposit of iron ore was underneath the lake itself.

This was the challenge and the opportunity that caught the imagination and enthusiasm of Cyrus Eaton. The reward awaiting the person or syndicate that could devise a practicable, economical method for extracting this ore was so great as to be almost beyond estimation; precisely the kind of superstake that would find a bidder in the Cleveland financier.

Eaton supported a plan which called for Steep Rock Lake to be drained. The boldness of the concept staggered the engineers. Most of them said it couldn’t be done. Eaton insisted it was the only feasible method to get at the ore. It required the boring of a three-thousand-foot tunnel under the lake to its very center point, curving upward there to the lakebed. At this point, a final blast of dynamite would create a hole into which the waters would descend, to be
drained away as a bathtub is emptied.

But Steep Rock Lake was no bathtub. It was a large body of water, fifteen miles long and four miles wide. The engineers said the rocks and boulders on the bed of the lake would quickly plug any hole created by a man-made blast. Eaton took the position contrary to that held by the technical experts. The hole would remain open, he predicted, and the water would Bow out the underground tunnel. He proceeded to sell the theory to the United States Government, and the government of the Dominion of Canada. The United States extended him a five-million-dollar loan. Canada allocated twenty million dollars for the project, and Otis & Company chipped in $2,250,000 realized from the sale of debentures. The gamble was on.

When the boring crew had completed the three-thousand-foot tunnel under the lake and had approached within twenty feet of the lakebed, dynamite fuses were planted and the workers hurried back to safety on shore. At the given Signal, the plunger was pushed and the dynamite was exploded.

It was one of the most dramatic moments in industrial history, and it certainly was one of the most critically important moments in the life of Cyrus Eaton. The water in the middle of the lake suddenly rose in a great bubble, there was a roaring sound, and rocks and boulders shot high into the air. All at once the onlookers knew that the plan had succeeded. There was a quickening whirlpool in the center of the lake, and it was obvious that the water from the lake was rushing downward through the. underground tunnel. The gamble was won and the riches of Steep Rock basin were ready to be exploited by man. It stands out now as one of the principal sources of high-grade iron ore for North America-a treasury containing an estimated two billion tons of ore.

Further extending his holdings in this basic field, Eaton went on to gain control of iron ore deposits in the Ungava Peninsula of northern Quebec Province, regarded as the future supply source of Europe’s iron and steel industry. There, in the subarctic tundras, Eaton’s Ungava Iron Ores Company, formed in 1958 in association with Alfred Krupp and four other West German steel tycoons, holds title to reserves estimated at ten billion tons.

“Undoubtedly,” said Fortune magazine in 1961, “Cyrus Eaton controls more iron ore than any other man in the world.”

The London Daily Mail, in tacit recognition of this distinction, referred to him dramatically as “The iron master of North America.”

The Clevelander’s pace seemed to step up after World War II contrary to the expectations of his foes, most of whom entertained the logical supposition that advancing age would slow the Eaton gait. He organized the Portsmouth Steel Corporation in 1946 and made it a successful operation. He bought the floundering National Relining Company for ten million dollars and reportedly peddled its component parts for twenty-five million dollars. He borrowed twenty-six million dollars from the United Mine Workers of America and used the money to buy control of the West Kentucky Coal Company and the Nashville Coal Company. In 1954, he paid $3,630,569.75 for 108,854 shares of C. & O. stock and succeeded Robert R. Young, one of tile successors to the fabulous Van Sweringen brothers, as chairman of the board of the highly profitable coal-carrying C. & O. In the 1960s, Eaton was able to merge the C. & O. with the Baltimore & Ohio Railroad.

It wasn’t any real surprise that the United Mine Workers union should have been willing to lend capitalist Cyrus Eaton millions of dollars from its treasury. He long enjoyed a rare distinction among men of finance and industry-tile reputation of being a friend of organized labor. Among his close friends for many years had been John L. Lewis, the shaggy-browed leader of the miners, one of tile few men in Eaton’s circle of acquaintances who could hold his own with the erudite Clevelander in arguments over classical literature. In his moments of philosophical relaxation, Eaton likes to quote Spinoza’s line: “No regrets, no fears!”

Eaton also persuaded the United Mine Workers to invest money in two utilities in which he has major holdings, the Cleveland Electric Illuminating Company and the Kansas City Power & Light Company, as well as the C. & O. Railroad, in which the union invested $9.421,5,8 in 1951. According to a 1960 report by John Owens, UMW secretary-treasurer, the C. & O. stock doubled in value after its purchase by the union. Furthermore, the two large coal companies, Kentucky Coal and Nashville Coal, whose control Eaton purchased with money borrowed from the union, had been organized by the UMW with Eaton’s approval. Up to the time of the report, the companies had paid fourteen million dollars into the union’s welfare fund and the employees had paid the UMW eighty-one million dollars in dues. Thus, the Eaton-UMW arrangement resulted in a happy, profitable alliance for both parties.

A British reporter, searching afield for the right words to describe Cyrus Eaton, finally concluded that he was “the tycoon who looks like a cardinal.” It was an apt similitude, in a class with others which have likened him to a college dean or a university professor.

Eaton is, in appearance and formal manner, more the churchman or educator than the financial speculator; still handsome, even in his eighties. He is a slim, erect six-footer with snow-white hair, and he has the appearance of an ascetic. His eyes are a pale, faded blue, and the eyelids are heavy. His manner of dress is predictable-a dark blue double-breasted suit, a white shirt with French cuffs, and a dark, conservative tie. At the beginning of each working day, there is always a fresh-cut rose in a bud vase on his desk.

Whatever fanciful writers see in him, Eaton himself supplies the most accurate identification tag to hang on himself.

“I guess you could call me the last of the tycoons,” he says, aligning himself firmly with the old giants of finance-the Rockefellers, the Jay Goulds, the Commodore Vanderbilts, and the J. P. Morgans. He is a tycoon, and no doubts cloud his claim to the distinction. But he is an unusual tycoon-indubitably the only one who ever qualified also as an authority on the literature of seventeenth-century France. When he travels, he usually carries with him some exotic literary bonbon from a play of Jean Racine, say, or the translation of one of Pierre Comeille’s plays.

Among other signs of Eaton’s scholarly bent are his membership in the American Philosophical Association and his zestful participation in collegiate affairs as a trustee of the University of Chicago, Case Institute of Technology in Cleveland, and Denison University in Granville, Ohio. Throughout his long life, he has shown a marked preference for the company of educators, authors, and other front-runners in the world of culture. At the same time, he has established a record of friendly association with members of the working press-another departure from the norm which stirs a storm of sniffs from his peers in the Union Club. The storm would reach its height late each summer in the years when the financier made it his custom to open the fields of his Acadia Farms home in Northfield for a picnic to which he invited the members of the Cleveland professional chapter of the Sigma Delta Chi journalism society, and their families.

The most substantial expression of Eaton’s friendliness toward newspaper people came in the wake of World War II when he extended a loan of $7,600,000 to the 850 employees of the Cincinnati Enquirer to enable them to buy the newspaper. His motive in this transaction has been challenged by critics who allege that he was moved to advance the money more by a spirit of malice than generosity. Among the prospective buyers of the Cincinnati property was a rival publication, the Times-Star, owned by the Taft family, and it must have pleased Eaton to block the purchase. There was no love lost between Eaton and the leading member of the Taft clan, the late United States Senator Robert A. Taft.

The clash between Eaton and Taft happened in the late years of the Depression and centered on a twelve-million-dollar bond issue which had been proposed to finance the Cincinnati Union Terminal. Taft was chairman of the terminal’s finance committee. When Eaton approached him to apprise him of Otis & Company’s interest in participating in the issue, Taft dismissed him, according to Eaton, in rather uncomplimentary language.

“Preposterous!” Eaton quoted Taft. “We’ve already made a deal with people we trust-and I resent your coming in here!”

This very custom of negotiated agreements between underwriting companies and their clients which prevailed at the time, and which was illustrated in the Cincinnati Union Terminal issue, was a sore point with Eaton. He had held the system to be one of the powerful- and profitable- devices which enabled Wall Street firms to hold dominion over finance and industry in other parts of the nation. Clients inevitably, it seemed, chose a New York investment house to handle their issues even when they had more attractive offers from firms in the hinterland.

Eaton wanted to break this monopolistic state of affairs with a competitive system in which investment firms would have to submit sealed bids in seeking to underwrite hand issues of private clients. Such a system would open the way for an expansion of business for mid-western financiers, of course, but it also presented a valuable advantage to the clients. In 1938, for example, Eaton’s friend, Robert R. Young, head of the Chesapeake & Ohio Railroad, had allowed competitive bidding on the railroad’s thirty-million-dollar bond issue. The best offer was a joint hid by Otis & Company and Halsey, Stuart & Company of Chicago, which saved the railroad an estimated two million dollars. Eaton’s profit from the deal was not considerable, but it probably was secondary to the satisfaction he derived from edging out Wall Street’s Morgan, Stanley and Kuhn, Loeb combine.

Refusing to admit defeat in Cincinnati, Eaton, more determined than ever because of Taft’s curt dismissal, outflanked his fellow Ohioan by seeking help from the administration of President Franklin D. Roosevelt, with whom he was on friendly terms, still another reason for his fellow capitalists to dislike him. He went to Jesse Jones, head of the Reconstruction Finance Corporation, which had extended millions of dollars in financial aid to many of the nation’s ailing railroads, and prevailed on Jones to rule in favor of the principle of competitive bidding for railroad bonds. RFC aid was made contingent on the use of the bidding practice.

Eight railroads controlled the Cincinnati Union Terminal. Some already were indebted to the government agency and the others certainly were aware of the wisdom of staying in the agency’s good graces. The terminal bonds were put on a competitive bidding basis. Eaton’s Otis and Company was among the bidders, of course, but, ironically, he lost the issue to another investment house. At the same time, he scored the larger victory in helping to establish the principle of competitive bidding as an accepted, established practice. Later it was made mandatory by the Interstate Commerce Commission. Furthermore, he had beaten Taft.

They say in financial circles that Cyrus Eaton is a tough foe and a bad enemy; that he never forgets a slight and that he never forgives. Generalizations such as those are best questioned or avoided, but there is ample evidence of Eaton’s quite human disposition to even the score with those who have crossed him or otherwise disturbed his personal designs through the years. It is possible, for instance, that Senator Taft lost a lot more than merely a choice of terminal underwriters in his joust with Cyrus Eaton. It may be that his brusque rejection of the unorthodox Clevelander also lost him the Presidency of the United States-or, at least, the nomination for that office by the Republican Party. Eaton worked against him behind the party scenes whenever he approached that most precious of political prizes. It is conceivable that but for Eaton’s opposition, Taft would have turned the tide and ridden it to success.

It was part of Cyrus Eaton’s wisdom and success that early in his career he recognized the importance of the political factor in the adroit and effective use of the capitalistic system. He studied politics and politicians so as to learn the system fully, even on the city level. Toward that end, he often took time to observe the Cleveland City Council in session. While he never ran for any office himself, he did busy himself in the city’s political life in a behind-the-scenes role.

Among his limited community involvements was service as one of the founder-directors of the famous Cleveland City Club, an open speech forum. He also served as a ten-year trustee of the Cleveland Metropolitan Park Board. In this latter capacity he was among the men responsible for the establishment of the Metropolitan Park system, which must rank as one of the most magnificent natural recreational areas within any American city; it is a forest of some seventeen thousand acres, an unspoiled garland of greenery that loops the entire urban area.

Eaton helped to found the Cleveland Museum of Natural History, and his old town house on Euclid Avenue at East 89th Street, a large brick mansion in a fading neighborhood became the home of the Cleveland Health Museum. He was among the strong supporters of the YMCA Evening School, where he studied accounting in his younger days, as it evolved into Fenn College and then into Cleveland State University.

Cleveland is the city which gave birth to the Community Fund, and Eaton once was asked about his seeming lack of willingness to participate as one of the leaders in the annual fund drive. His answer provided an insight into his civic sense of values.

“I haven’t the time to be active in the Community Chest,” he told his interviewer, “but I feel that I’ve done my share by helping create tens of thousands of jobs. Regular employment is what makes it possible for people to live a happy life and contribute to the Community Chest.”

Eaton’s basic contribution to the city, as he suggested, does spring from his creativity as a financier. Through his efforts, Cleveland has the Republic Steel Corporation, third-largest steel producer in the nation; Sherwin-Williams, great paint manufacturer; Fisher Body’s huge Cleveland works which he made possible by financing the Fisher brothers of Norwalk, Ohio, with a ten-million-dollar base; National Acme, Eaton Manufacturing Company, and Cleveland Cliffs Iron Company. He also kept Cleveland the headquarters of the C. & O. Railroad after its marriage with the Baltimore & Ohio road.

The influence of Eaton has been a vital factor in the historic growth of all Cleveland’s utilities. His contribution to the East Ohio Gas Company has been described, but he also figured significantly in the rise of the Cleveland Electric Illuminating Company, in which he owns a major stock holding, and the creation of the modern Ohio Bell Telephone Company by merging his Ohio State Telephone Company with the struggling Bell company. In the same way, Eaton is credited with helping boost the Cleveland Trust Company into its position of banking dominance in Cleveland by wielding his influence as a director of tile Lake Shore Bank to bring about the merger that put Cleveland Trust in the lead.

Eaton is a country gentleman in the old, almost anachronistic sense of the title. He lives on an 870-acre estate called Acadia Farms in Northfield, a little town in Summit County halfway between Cleveland and Akron, some twenty miles from his office in the Terminal Tower. The 150-year-old white frame farmhouse was built by the original owner of the land, a Connecticut pioneer named John Wilson. Eaton purchased the farm in 1912 when he was still in his twenties and presumably still working on his first million dollars.

Acadia, a natural, unspoiled beauty spot with rolling hills, groves of trees, and placid ponds, was to be the family’s weekend retreat and a summer vacation place. It served as such until 1930, when the collapse of the Eaton empire brought about a general retrenching that included the sale of the elegant town house. Henceforth, Acadia Farms became the year-round estate. It is not a rich man’s showplace, however, but a working, producing farm on which Eaton raises prize-winning pure-bred Scotch Shorthorn cattle, as he does also on his three-thousand-acre Deep Cove Farms in Upper Blandford in his native Nova Scotia.

Eaton married Margaret House, member of a prominent Cleveland family, on December 29, 1907. Their marriage lasted almost twenty-seven years, ending in divorce on August 16, 1934. They had seven children, five daughters and two sons. It was not until after her death in Cleveland clinic in March 1956 that the financier remarried. His second wife was Anne Kinder Jones, an attractive thirty-five-year-old Cleveland socialite who had been crippled by an attack of poliomyelitis in 1946.

Anne Kinder was graduated from Vassar (one of her classmates was the future Mrs. Cyrus Eaton, Jr.) and taught, briefly, at Cleveland College of Western Reserve University. Like Eaton, she has a deep interest in philosophy and poetry. She is, by Eaton’s testimony, the “politician” in the family.

Eaton always had a close but passive interest in international events, as one would expect of a financier whose dealings crossed national boundaries as frequently as the lines of latitude and longitude. He did not become an active figure in the Cold War, however, until 1955. Ironically enough, the United States Government played the matchmaker’s role in bringing the Soviet Union and the multimillionaire together in the beginning of what turned out to be a beautiful, if sometimes embarrassing, friendship.

A Soviet agricultural delegation was touring the United States in 1955 and the State Department asked Eaton if he would entertain the group at Acadia Farms, show them his Scottish Shorthorn cattle and, incidentally, let them get a close-up look at a genuine capitalist. Eaton was pleased to accept. The visit was a diplomatic success and the exchanges between the Soviet technicians and the capitalist were cordial.

Eaton’s real immersement in international politics came in 1957 at the third of his own Pugwash conferences; gatherings of intellectuals and world leaders in diverse fields which he had instituted in 1955 and which Originally were intended to be held annually at his Pugwash, Nova Scotia, estate. That third conference was held in Lac Beauport, Quebec, because the time of the meeting-March-usually is marked by inhospitable weather in Nova Scotia.

It was the first time nuclear scientists from all the great powers on both sides in the Cold War had come together in any kind of discussion of mankind’s most fearsome scientific discovery. Eaton listened closely to the portentous utterances and the melancholy predictions of future disaster if the nations of the world continued to drift in the international political currents leading toward a global holocaust. The conference, in the words of Fortune magazine, “set Eaton afire.”

A second meeting of the nuclear scientists of the world was held in the autumn of 1957 in Vienna under the joint sponsorship of the Clevelander and the Austrian Government. It was while he was en route to this fourth Pugwash Conference, far from the homely hills of Nova Scotia, that Eaton’s itinerary took him into Russia for a ten-day visit and his first meeting with Premier Nikita Khrushchev. The Soviet leader gave signal recognition of Eaton’s unique position in world politics by making a special flight from Yalta to meet with him in the Kremlin. The world’s No. 1 Communist and one of the world’s leading capitalists presented a study in contrasts when they were introduced. Khrushchev was the peasant revolutionist, short and stocky, blunt-fingered and blunt-talking; Eaton was the cultured aristocrat, tall and slim, with tapered fingers and graceful speech. But these two opposites hit it off together famously in their first meeting. The Soviet leader gave the financier an audience that lasted ninety minutes, and it was reported that they had touched on many different subjects of international significance.

They had other meetings in the years that followed and their strange friendship continued, even in the face of adversity. The most trying test. one presumes, came in 1959 when the planned Paris summit conference between Khrushchev and President Eisenhower was toppled by the shooting down of an American U-2 “spy plane” by the Russians twelve hundred miles inside their territory and the capture of the civilian pilot, Francis Gary Powers, on Soviet soil. Khrushchev’s reaction was a violent public tantrum that was climaxed in Paris by his refusal to meet with the American President who already had arrived in the French capital and was awaiting the top-level conference.

But if Khrushchev would not meet with the President of the United States, he was delighted to meet with Cyrus Eaton-and did so, at Orly Field in Paris, where he greeted the financier upon his arrival from Cleveland.

It was an inopportune moment for Eaton to display his friendship with the Communist world, and to demonstrate, in particular, his warm camaraderie with Nikita Khrushchev. All America was blushing over the embarrassing U-2 faux pas and all America was smarting under the Khrushchev tongue-lashing and the humiliating sight of President Eisenhower’s rejection by the Red leader. The news pictures of Eaton and Khrushchev shaking hands and smiling in their warm reunion at Orly Field served only to stir the public mind and emotions against the Clevelander.

After a tour of such Soviet satellite nations as Poland, Czechoslovakia, Hungary, and East Germany, Eaton landed in London, was met by the press, and promptly captured the headlines once again with a series of inflammatory remarks. Among these was his statement that the United States was “more of a police state” than any of the countries behind the Iron Curtain.

Writing on the same subject in the Moscow magazine the Progressive, Eaton, according to Scripps-Howard columnist Henry J. Taylor, said: “The only country where people look over their shoulders to see who is listening is the United States. It is we in America who created the picture of a police state…. The president of one [American] company told me he has been fingerprinted so often he can’t get his hand dry.”

“The only people in the United States who believe that communism is a menace,” Eaton told reporters, “are the boys on the payroll of the F.B.I.”

Whatever Eaton’s reasons for his pro-Soviet outbursts, and they are still open to analysis, he was guilty of a tactless disregard for the opinions and feelings of his own fellow Americans on a number of occasions, of which the Paris meeting was but one. Indeed, only a little more than a month after that historic blowup, and while the public memory still retained a clear recollection of the airport meeting, Eaton accepted the Lenin Peace Prize in a ceremony held in Pugwash on July 1, 1960, Dominion Day. The Soviet wire service, Tass, in reporting the ceremony, described Eaton as “a public figure whose activity is an example of public service to the lofty idea of the peaceful coexistence between peoples.”

The year of 1960, all things considered, was a red-letter year in Soviet-Cyrus Eaton relations. In September, Nikita Khrushchev journeyed to New York to attend a session of the United Nations and set that world body on its ear with his undiplomatic utterances, coarse threats and, finally, his shoe-pounding tantrum-a high mark in parliamentary crudity even for the tough little Ukrainian.

The Cleveland capitalist earlier had invited Khrushchev to visit Acadia Farms during his visit to the United States, saying: “It would be a good thing for them to see a typically American city like Cleveland. I believe in America. I have faith in democracy and the capitalist system. I would like to show them off to these influential men who disagree with us…”

The State Department was not of the same mind, restricting the Soviet leader to Manhattan during his visit to the United Nations. But Eaton was determined to play host to Khrushchev. If Mahomet could not come to the Mountain, then the Mountain perforce must go to Mahomet- and did. On September 26, the capitalist played host to the Communist leader in a ballroom on the nineteenth floor of the Hotel Biltmore while official Washington presumably fumed. Some 150 guests attended and heard Eaton speak in behalf of an expansion in Soviet-American trade while Khrushchev’s remarks, in the main, were concerned with the advisability of international disarmament.

The positive side to Eaton’s extended series of indiscretions over the years in the arena of international politics is that by playing the role of the devil’s advocate, it is quite possible he helped America to keep its democratic balance and perhaps acted as a moderating influence on Nikita Khrushchev and other Soviet leaders. No spokesman for the capitalist way of life ever penetrated so far into the heartland of communism or won the ears of the Soviet chieftains the way Cyrus Eaton did.

In this favored position, able to command the respectful attention of the men in the Kremlin, Eaton may have done more for the cause of international understanding and peace than any of the hot-eyed critics who denounced him for consorting with the enemy.

The Pugwash nuclear conferences were decisive in convincing Eaton that science had rendered another world war so catastrophic as to be unthinkable, and his was one of the influential voices that helped to convey this belief to Khrushchev, a force leading the Soviet premier to the alternative policy of coexistence.

Eaton continually preached the merits of American agricultural methods, with their high rate of productivity, and Khrushchev listened. It is believed that Mr. K.’s insistence that the farmers of the Soviet Union borrow the methods and machinery of the West, coupled with his praise of Western efficiency, caused some of his critics in the Communist Party to accuse him of being too much of an admirer of the United States. Some experts have said that this was one of the important factors leading to the downfall of Khrushchev.

A highly placed State Department official told a writer for Parade magazine in 1963 that Eaton’s influence with the Kremlin had been helpful in bringing about a thaw in the Cold War. It was also said that his intercession had saved captured U-2 pilot Francis Gary Powers from a Soviet firing squad and later resulted in the melodramatic swap of Powers for the Russian master spy Rudolf Abel on a bridge in Berlin.

It can be pointed out that no matter how severely Eaton criticized his own country’s leadership in the Cold War-sometimes unfairly- and no matter how much praise he was willing to pay the Soviet rulers-oftentimes unwarranted-he was consistent in defense of his basic beliefs in democracy and capitalism.

“I live happily and I hope productively by the doctrine that intelligent and enlightened private ownership and operation provide the ideal system of economics for my country, and that the greatest possible separation of politics from economics is desirable.”

Describing his philosophy to a British television interviewer in 1960, Eaton said: “I’m a dyed-in-the-wool capitalist, both in theory and in practice, but I’m also old enough to realize that no one has yet found the final answers to all the problems of life. While I would not be a practicing Communist, or socialist, I do respect adherents to these systems for having their own convictions and ideas. I am sure they can go along with their own system of communism and we in America with Ours of capitalism and we can get together if we want to.”

Again, in 1961, upon his return from Bulgaria where he shared the reviewing stand with Russian cosmonaut Yuri Gagarin at a parade celebrating the Bulgarian national holiday, Eaton spelled out his ratiocination of the troubled world scene and his role in it:

“I’m as dedicated a capitalist in theory and practice as there is in the world. My chief interest is to save capitalism in America from nuclear war, which would turn to dust all the industry I’m associated with and annihilate my family and friends.

“I feel that in America too many people take the narrow view that all connected with socialist countries is wicked and that everything we stand for is of the highest noble order. That attitude is not shared by our allies or neutral nations. Because I say these things doesn’t imply I favor communism. But I’m sure as anything that no power we possess can shift the socialist countries from communism. We ought to take the realistic view, get along with them instead of trying to destroy them.”

In the midst of the clamorous disapproval of Eaton’s position as an apologist for the Communist nations and their leaders, there occasionally has been sounded a contrary expression in praise of his efforts. Such a pro-Eaton position was taken in the Catholic Herald of London, England, on January 15, 1965 in a column written by a member of Parliament, Norman St. John-Stevas, under the heading: “Lunch With Mr. K’s U. S. Friend.”

The column said:

“Last week I had lunch in Cleveland, Ohio, with Mr. Cyrus Eaton, the American industrialist who became a close friend of Mr. Khrushchev, and with whom Mr. Khrushchev stayed during his visit to America.

“Mr. Eaton is a millionaire bu.t certainly not a typically American one, and his understanding of what is going on in the Communist world is, alas, all too rare amongst American businessmen. In the mid-West especially, the rigid anti-Communism of both business and public opinion has altered very little since it was adopted in Stalinist days.

“The American attitude (although not the State Department’s) to world Communism is still dangerously oversimplified. Cyrus Eaton is regarded by many as an eccentric but he is in fact a prophetic pioneer of the dialogue between East and West.

“Mr. Eaton is a remarkably vigorous 81, and perhaps before he retires he can do something to bring about a change in the attitude to China of the leader of the Western alliance. If so mankind is likely to be permanently in his debt.”

The man who is perhaps the world’s busiest octogenarian is visibly irked whenever anybody makes a point of underscoring his age or speaking too heavily of him in the past tense. It is Eaton’s firm conviction that his most outstanding achievements are yet to come, and nobody who knows him is betting that he is wrong.

On his eighty-second birthday in December of 1965, Eaton mounted a horse and took his usual canter over his Northfield acres. When he returned to the stables, he took time to pet the horses of his troika team, a gift from Nikita Khrushchev, and then retired to the library of his country home for a newspaper interview.

“Time does some things to us that we don’t like,” he conceded to Joe Collier of the Cleveland Press, ’’but it makes a lot of things clearer if one keeps his eyes open and does some reading. Every room in this 175-year-old house is a library… and they contribute to the pleasure of living.

“Twenty years ago I had a rule to read nothing that was not a hundred years old and proved trustworthy. But I have given up that luxury.

“The way to destroy capitalism is to get into wars all over the world, create crushing tax burdens, create ill will by compelling the less fortunate nations to adopt our way of life. You can’t, by force, permanently control men’s minds and devotions.

“The way to discourage communism is to make capitalism an outstanding success- to put U.S. bankers and investors into enterprises in every part of the world, taking risks and making available our genius.

“For war, we must substitute forbearance and patience. Let time do something for us.”

Whatever else time may do, there is no doubt that it will yield a place to Cyrus Eaton as one of the most remarkable men in Cleveland’s history and one of the most unusual men of our time; the last of the old-fashioned tycoons certainly-and perhaps the first of a new breed of socially and politically concerned businessmen.