Cyrus Stephen Eaton (December 27, 1883 - May 9, 1979) was a Canadian-American financier, industrialist and philanthropist.
Associated with the Rockefeller family, his many financial interests included organizing the mergers that formed Republic Steel Corporation and the Chessie System.
Born in Pugwash, Nova Scotia, he later made that village famous by giving its name to a series of international conferences he sponsored that ultimately won the Nobel Peace Prize in 1995. His 1950s efforts at rapprochement with the Soviet Union won him the 1960 Lenin Peace Prize. He was dubbed "the Kremlin's favorite capitalist".
Education, social gospel
As a young man, Cyrus Eaton had planned to be a preacher. He was enrolled at McMaster University, a Baptist institution then located in Toronto, Ontario, Canada, where he studied philosophy. In the summer of 1901, his uncle, Dr. Charles Eaton, a well known Baptist preacher from Nova Scotia who led the congregation of the Euclid Avenue Baptist Church in Cleveland, Ohio, introduced him to one of his parishioners, John D. Rockefeller. (This was the same Charles Eaton who was later to serve a long and distinguished career in Congress as a Representative from New Jersey.) By this time in his life, Rockefeller was retired from business. Among many other things, he was engaged in planning philanthropies that would benefit his country and his fellow men, and incidentally repair his ruined reputation. The restrained, aloof Rockefeller was impressed by the studious young Canadian, and when Mrs. Rockefeller learned Eaton was employed for the summer in a Cleveland hotel, she became convinced he was in moral danger and persuaded her husband to offer him employment at their Cleveland estate, Forest Hill. Over the course of the several summers Eaton was employed there, he had an insider's view of America's greatest capitalist in action, and listened to him preach the "social gospel," a philosophy of wealth espoused by Rockefeller's own favorite capitalist, Andrew Carnegie. The experience taught him that he could possibly do far more good in the world by using his abilities to create opportunities and employment for his fellow man than by preaching the Gospel. In 1905 Eaton decided to follow his natural inclination and go into business.
American and Canadian business career
After he graduated, with honors in philosophy, Eaton went to work as a trouble shooter for one of Rockefeller's utility companies, Eastern Ohio Gas and Power. Calling upon his considerable personal charm and tact, he started his career in business by learning, in his own words, "to mollify natural gas customers in the Cleveland area who were upset by the ditches being cut in their lawns for the gas mains." He was learning the business from the bottom up. Around this time, Rockefeller interests were looking for further opportunities to market natural gas, which they had in abundance as a byproduct from oil wells throughout the Appalachian basin. They planned to build an extensive network of pipelines to move this cheaper, safer substitute for coal gas into outlying areas. Because of his Canadian background, Cyrus was chosen to negotiate for a syndicate of investors with the City of Brandon, Manitoba, Canada, for a franchise to supply the town with year round power from a gas fired, steam generated power plant. On the day he finalized his negotiations with the mayor of Brandon, the Financial Panic of 1907 struck. Then, for a brief period, money for investment was in extremely short supply, and this temporarily deprived the syndicate he represented of their credit with New York banks, and consequently shook their confidence in the future viability of this venture. It was Eaton's moment of opportunity. After obtaining the now questionable franchise for himself, as a consolation prize for his effort, he met with Canadian bankers, who were largely untouched by the panic, and borrowed the capital to build a steam generating plant which would burn coal brought in on the Canadian Pacific Railway from Saskatchewan. Soon his new company, The Brandon Gas and Power Company, was generating both power to light Brandon's streets and profits to finance new deals. Eaton soon resigned his position with East Ohio, and from then on he was on his own.
By 1912, using profits from his first operation and investment finances attracted to him by his dynamic leadership, he had expanded his interests in utilities to include a multitude of holdings in several Canadian provinces and northwestern American states. But for him this was only the beginning. He believed that based on the power and importance of the Great Lakes region as a source of raw materials, as a transportation hub, and as a center of the country's industrial and manufacturing capability, cities such as Cleveland, Ohio, and Chicago, Illinois, could also soon challenge eastern preeminence in the financial services sector. He believed he had experienced how the dominance of Wall Street often frustrated local and regional ambitions. Decentralizing the control of the sources of investment would better serve the growth of regions. Therefore, in 1921, mounting his own bid for more regional control of investment capital, he purchased a partnership in Otis and Co., an established securities and investment banking firm with headquarters in Cleveland, and branches across the country. This company would be the center of his financial life for over thirty years, and it would provide a base for his ambitions to consolidate a portfolio of regionally integrated industrial and financial holdings that would rival the largest in the United States.
Eaton went a long way toward realizing his ambitions, for by approximately 1927, through a holding company he and a group of other investors formed in 19?? called Continental Securities, he held, along with a major position in the large utility-traction conglomerate, United Light and Power, dominant stock market positions in a number of industries related to the flourishing automobile industry. Sherwin Williams Paint, the major American supplier of auto coatings, and Goodyear and Firestone, the world's largest tire manufacturers, both located in Ohio, were virtually under the control of his syndicate of investors. By 1928 he had begun to plan the final stage in a campaign to become a dominant player in each important segment, including energy, of the chain of supply for the auto industry. The final target was steel. Specifically, he was interested in the light steel used, among other things, in auto manufacture. His plans would lead to a series of rapid purchases and mergers of small and medium sized steel companies, to culminate in the founding of Republic Steel, a company that would eventually prove a worthy rival of the largest in the country.
The stock market crash of the 1930's would cause Eaton to suffer a large, though temporary, setback that forced him to scale back permanently his financial and industrial ambitions. But the process was not without interest or drama or instructive events, which we shall endeavor to treat hereafter. As well, it is important to note that it was during this period of the late 20's and early 30's that Eaton first gained a broad and well deserved reputation in the English speaking world for financial daring and for controversial decision making. This reputation would turn to notoriety in later years, and be of assistance to him as he strove to focus public attention on his controversial views in areas such as detente with Russia. Not for nothing had he studied philosophy, and at various times in his later life he strode confidently into alien arenas of public debate, where he displayed an extensive grasp of important social issues and a talent for leadership on an impressive scale.
Eaton's many financial interests included organizing the mergers that formed Republic Steel Corporation and the Chessie System. He assumed the helm of the Chesapeake & Ohio Railway (C&O) in the mid-1950s when his colleague Robert Ralph Young of the Alleghany Corporation had to step down from the C&O to make a bid for the New York Central Railroad. Once the C&O had obtained control of the Baltimore & Ohio, and the Chessie System had been created, he largely retired to take care of his philanthropic interests.
He died in the Chessie's headquarters city of Cleveland, Ohio.