Cyrus S. Eaton
From Wikipedia, the free encyclopedia
Cyrus Stephen Eaton (December 27, 1883 – May 9, 1979) was a successful investment banker, businessman and philanthropist in the United States, with a career that spanned over 70 years.
Eaton was a colorful, sometimes unconventional and often controversial figure, who became particularly well known during the Cold War for his outspoken criticism of American brinkmanship in aggressively opposing world communism.
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[edit] Early years
Cyrus Eaton was born on a farm near the village of Compton in Cumberland County, Nova Scotia, Canada. His family had long roots in North America. The Eaton family had first come to Nova Scotia in 1760, led there by David Eaton,[1] a farmer from Tolland, Connecticut. Nova Scotia, like Connecticut, was then a British colony, and David Eaton responded to an appeal published throughout New England by Nova Scotia's Governor Charles Lawrence in 1756. It invited loyal Englishmen to move onto farmland vacated by the French Acadians, who had lately been expelled from various British territories in North America for their refusal to submit formally to English authority when England finally got control of all French territories in North America as a result of the Seven Years War.
David Eaton was granted a farm in the fertile Annapolis Valley, where he and his family prospered, and over the next few generations his growing band of descendants (David and his wife, Deborah White had 15 children) spread the family name to other parts of Nova Scotia. One of his grandsons,[2], moved north from Annapolis Royal to a military posting near River Philip in Cumberland County early in the 19th century. He married and eventually decided to stay, becoming involved in the founding and earliest settlement of the village of Pugwash. He prospered as a farmer and lumberman, and one of his sons,[3], would go on to become one of northern Nova Scotia's most prominent lumbermen and wooden shipbuilders. A grandson of Levi's brother, Stephen, born in 1883, was named Cyrus Stephen Eaton.
[edit] Formative years
[edit] Education
As a boy, Cyrus Eaton was precocious, intellectually curious, athletic, musical and fond of the study of nature. He was particularly fond of horses, an avocation that endured throughout his long life. As well as being intelligent, curious, and energetic, he showed signs from an early age of having an ambitious nature. His father, who besides farming operated a small general store and post office, recounted how Cyrus got his first job at the tender age of six as a water carrier for railway construction crews working in the Pugwash area. He also said that from the age of ten, Cyrus could already be relied upon to take over the store-keeping and post office duties when necessary. Neighbors remembered him as a quiet, unobtrusive youth who minded his own business and excelled at school.
This quietness and a penchant for good behavior, characteristics still to be observed in him when he was an octogenarian, were attributable in large part to the influence of his mother, who demanded much from him, as from the rest of her children. They grew up in a strictly religious family atmosphere. His parents were Evangelical Baptists, and for a period of years while Cyrus was still a young they hosted regular church meetings in their farmhouse, there being as yet no Baptist church in the community. It may have been due to his mother's urgings that Cyrus showed an early interest in a religious vocation. His uncle, Charles Aubrey Eaton, also from the Pugwash area, had already achieved widespread fame in Canada as an Evangelical Baptist clergyman when Cyrus was still a boy, and he undoubtedly added his encouragement for such an ambition on the part of his favorite nephew. Uncle Charlie may also have inadvertently shown Cyrus by his example that a religious calling presented opportunities that might lead one out of the obscurity of backwoods Nova Scotia into some important position in the world. Charles Eaton's later accomplishments in religion, journalism, business and politics amply justified such early hope. Later, when both were men of the world, with international reputations, such was their enduring affection for each other that the two would often contrive in some measure to cooperate in sharing the spotlight.
At age sixteen, Cyrus left Nova Scotia for Ontario in pursuit of an education that would lead him into the ministry. He first went to Woodstock College in Woodstock, Ontario, which was a preparatory school for McMaster University, then located in Toronto, Ontario. He enrolled as a freshman at McMaster in 1901, and while there appears to have exercised fully an emerging aptitude for social engagement and leadership. He was an accomplished athlete, a musician in demand, and elected class president of his year. In his studies he concentrated particularly on philosophy and finance, illustrating a diversity in his interests that would endure for his lifetime.
[edit] Influence of Rockefeller
During the summer break following his first year, Cyrus was invited to travel down the lakes to visit his uncle, Dr. Charles Eaton, in Cleveland, Ohio, where this prominent evangelist was endeavoring to broadcast the Christian message as widely as he could. Dr. Eaton's conviction and commitment was such as to make him a figure of note in the city. He would often conduct ad hoc ministries in the open streets despite a by-law forbidding it, and was therefore frequently the subject of interest from police who were dispatched to break up any popular street meetings that might result in "inconvenience" to the populace. But he would continue to defy this restriction on his calling, reasoning that the dislocated urban poor most in need of the benefits of religion would not seek the message in a church and would therefore need to be sought, Christlike, out in the open air.
Dr. Eaton's flock happened also to include a congregation at the Euclid Avenue Baptist Church in Cleveland. In those days, Euclid Avenue was known as "millionaire's row", and was famous for the mansions lining it that belonged to Cleveland's industrial and financial elite. From this prominent pulpit, the egalitarian Dr. Eaton seldom missed an opportunity to remind his rich parishioners of the impediments wealth placed in the way to their salvation, or of the responsibilities to those less fortunate that having wealth imposed. Among his congregation's ranks of wealthy and not so wealthy members was the famous, or infamous, oil tycoon, John D. Rockefeller, who despite his formidable reputation in business was a deeply devout and committed Christian and a particular friend of Dr. Eaton's. For the preacher's nephew, Cyrus, this stay in Cleveland would turn out to be a turning point in life.
Rockefeller's chief residence at this time was in New York City, but to please his wife each summer the family moved back to her favorite residence, Forest Hill, a country estate on a hill near Cleveland, which had a commanding view of Lake Erie. The estate included expansive living quarters, a small lake, stables, and bridle paths. It was here the Rockefellers had raised their children. Being an intensely private family, protected by their wealth to some degree, but also aware of being made vulnerable by it, they made Forest Hill their refuge, with a round the clock force of private security guards. There was also a private golf course where Rockefeller could repair to enjoy himself informally with masculine company, and indulge his passion for the game. As a powerful man with whom few dared disagree, Rockefeller particularly appreciated the fearless directness of Cyrus's uncle Charles. Eaton became one of his boon golfing companions, and was a frequent dinner guest at Forest Hill while the Rockefellers were in residence.
No doubt knowing of his nephew Cyrus's interest in business, Charles wangled an invitation for him to one of these dinners, and the restrained, aloof Rockefeller, who had good reason to be proud of his judgment of men, was apparently impressed by the studious young Nova Scotian. When Rockefeller's wife, Cettie, learned Eaton was working for the summer in a local hotel, to earn money for tuition, she disapproved on account of the temptations and low moral examples to which she felt it would subject him, and she persuaded her husband to offer Cyrus employment. Since Rockefeller took on several young "apprentices" each summer to help with his business affairs while he was in Cleveland, it was easily arranged, and so over the course of the next few years, while he studied to finish his degree, Eaton worked summers at Forest Hill as Rockefeller's secretary, golfing companion and bodyguard, and got an insider's view of America's greatest capitalist in action. This experience eventually convinced him to alter his course in life, and go into business. In later life, Eaton often expressed his admiration for John D. Rockefeller, and also expressed the opinion that he could not have had a better tutor for his entry into the rough and tumble world of industry and finance.
[edit] Progressive tendencies
As a student in small town Nova Scotia and Ontario, and in fact from his earliest boyhood when he had his first job as a water carrier for railway construction crews near his hometown, Cyrus Eaton had seen the plight of the displaced worker in the new industrial society, and had undoubtedly been moved by the experience to a sympathetic identification with the laboring man. The preachings of his favorite Uncle, to which he earnestly listened, had been deeply influenced by the progressive movement in modern Protestant theology called the "social gospel." This outlook downplayed to some extent the Christian fundamentalist's almost exclusive concern with the hereafter, and emphasized instead the responsibility Christians had to social amelioration in the here and now. It was this outlook that later led Charles Eaton out of the ministry and into politics, where he had a long and distinguished career as a Congressman from New Jersey, a career crowned by his participation as an American delegate in the San Francisco Conference for the founding of the United Nations.
Apart from his Uncle's influence, these same progressive tendencies had shaped to a degree the style of education Cyrus was getting at university in Ontario. McMaster University sought to prepare young Christians for lives of Christian devotion. Yet it did not hide from religious or social controversy, for it believed in strengthening and tempering its students through the fullest possible exposure to modernism. William McMaster, a wealthy Canadian Baptist man of business who contributed the bulk of his fortune to the founding of this university, reasoned that only men seasoned by contending with the forces of modernism and material idolatry could truly assume roles of moral leadership in modern society. Perhaps this heady mixture of positive influences emanating from his family, his church, his university, and his employment with John D. Rockefeller balanced, for Eaton, the negative aspects of personal involvement in the competitive capitalist system as it existed in his day, and made acquisitiveness, the single most important and obvious goal of business activities, easier to rationalize. After all, success in business was far from undesirable, in the Baptist view of things, so long as it was accomplished in a spirit of service and benevolence.
It is not hard to imagine that the encouragement of two such famous and successful men as Rockefeller and his Uncle Charles, converging from apparently opposite ends of the social spectrum, helped him bring his own ambitions into focus in such a way that he could really see himself doing far more good in the world by using his business abilities to create wealth and opportunities for employment for his fellow man, than by living the humble, non-remunerative life of a preacher of the Gospel, however ennobling that might have been from a spiritual point of view. Christ-like self sacrifice was not a strong suit with realistic, business-like Baptists of that day. Whatever the exact mixture of influences was, after graduation from university in 1905, Eaton decided to follow his natural inclination and go into business.
[edit] American and Canadian business career
[edit] Working for Rockefeller
After he graduated from McMaster, 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, in his own words, "by mollifying natural gas customers in the Cleveland area who were upset by the ditches cut in their lawns for the gas mains". He was learning the business from the ground up. Even then, however, the young, independent Eaton was bent on taking his own path. In 1906, 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, and they planned to build an extensive network of pipelines to move this cheaper, safer substitute for coal gas into outlying areas. Eaton was learning the business so quickly that within a year he was travelling widely, negotiating for urban utility franchises on behalf of a syndicate of investors associated with Rockefeller interests.
Because of his Canadian background, Cyrus was sent to Canada, and in 1907 one of his meetings was with the City of Brandon, Manitoba, which needed a year round source of power for street lighting because the current supply from a hydroelectric facility stalled each winter when the river froze over. On the day he finalized his negotiations with the mayor of Brandon for a franchise to supply the town with electric power from a new steam generated power plant, the Financial Panic of 1907 struck. For a brief period, until the combined efforts of J. P. Morgan, Rockefeller, Judge Gary and others had stabilized the supply of American bank credit, money for investment was in extremely short supply. The situation temporarily deprived the syndicate Eaton represented of their borrowing power, and consequently shook their confidence in the future viability of this venture. However, the City of Brandon had issued a franchise, and they expected something to be done. This would not be the last time Eaton's Canadian background gave him an advantage in his business dealings over his American colleagues. Eaton seized the opportunity to obtain the now problematic franchise for himself as a consolation prize for his efforts. He quickly organized meetings with Canadian bankers, who were largely untouched by the American financial panic. They readily lent Eaton and a partner named George Abbott the capital they needed to build a generating plant. A dependable supply of coal was secured from nearby Saskatchewan, to be transported in on the new instrument of Canadian unity, the Canadian Pacific Railway, and soon the new company, The Brandon Gas and Power Company, was generating both power to light Brandon's streets and profits to finance new deals.
[edit] On his own
Shortly thereafter, Eaton resigned his position with East Ohio, and later in life he would remark, with some regret, that if he had stayed with this employment, and had moved to New York when Rockefeller asked him, he would eventually have probably become president of Standard Oil. Such a position would have insured for him a simpler and more peaceful existence than his was to be. Though his relations with the Rockefellers, both business and personal, remained good, Eaton was apparently determined to find his own way, and from then on he was on his own.
Interestingly, the newly successful businessman had not forgotten his ideals nor his religious commitments. For an entire year, while the congregation looked for a permanent preacher, Cyrus Eaton led the congregation of Lakeview Baptist Church, and did so very creditably it was said. In 1907, he married Edna House, daughter of a distinguished Cleveland lawyer and Judge, and granddaughter of a genuine Civil War hero who was present at the capture and surrender of Robert E. Lee. In 19?? they began a family. Eventually, he took American citizenship and seemed to have melted completely into the American way of life, concentrating on his family, business affairs and church.
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 1921 called Continental Shares, 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, the major American supplier of auto coatings, and Goodyear and Firestone, among 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 carry out 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 led to a series of rapid purchases and mergers of small and medium sized steel companies that would 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 1930s caused Eaton a major, though temporary, setback, and the conditions that prevailed during the slow recovery of his and America's fortunes forced him to scale back his financial and industrial ambitions permanently. As well, it was during this period of the late 1920s and early 1930s that Eaton first gained a broad and well deserved reputation in the English-speaking world for financial daring and for controversial decision making. In later years he would skillfully turn this reputation from celebrity to notoriety, and use it to assist him in focusing public attention on important issues, such as détente with Russia, nuclear disarmament and the dangers inherent in American militarism. Not for nothing had he studied philosophy and cultivated the classics, and at various times in his later life he strode confidently into alien arenas of public debate where he displayed courage, conviction, knowledge of important issues and talents 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 and 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.
[edit] Later years
Eaton gained visibility outside the business community in the 1950s, when he became an ardent critic of the United States foreign and military policies during the Cold War. He became particularly controversial for engaging in personal diplomacy between the United States and communist countries in an effort to calm the waters and to promote friendlier relations and more peaceful trade between ideologically opposed segments of the world’s economy.
Eaton also gave personal and financial support to efforts to limit the nuclear arms race, and was involved in founding and financing the original Pugwash Conferences on Science and World Affairs, which took their name from Eaton’s hometown of Pugwash, Nova Scotia where the first meeting was held in July 1957 at his summer estate overlooking the Northumberland Strait.
The Pugwash Conferences were ultimately awarded the Nobel Peace Prize in 1995. Eaton's 1950s efforts at rapprochement with the Soviet Union won him the 1960 Lenin Peace Prize. He was dubbed "the Kremlin's favorite capitalist".
Eaton died at his home in Northfield, Ohio at age 95.
In 1994, a residential developer bought Eaton's estate in Sagamore Hills, Ohio, a village 15 miles southeast of Cleveland, Ohio and 20 miles north of Akron, Ohio. The Eaton Estate had an area measuring approximately 200 acres and the developer constructed over 300 houses ranging in prices of $250,000 to about $500,000. Street names in the development called "Eaton Estates" include Pugwash, McMaster, and Republic as an homage to Cyrus Eaton.
The elementary school in Pugwash in named Cyrus Eaton Elementary School in honor of him.
[edit] References
- ^ David Eaton. nseaton.org. Retrieved on 2007-11-15.
- ^ Captain Amos Eaton. nseaton.org. Retrieved on 2007-11-15.
- ^ Levi Woodworth Eaton. nseaton.org. Retrieved on 2007-11-15.
