Cyrus Eaton (1883–1979) financier and industrialist
Born in Nova Scotia, Eaton was a member of an established New England family that moved to Canada in 1760. He graduated from Amherst Academy in Ontario and decided to become a Baptist minister. After graduation, he visited an uncle who was a Baptist minister in Cleveland, where he was introduced to John D. Rockefeller, a member of his uncle’s congregation. After working at a summer job for Rockefeller, he was persuaded to attend McMaster University and study business. He graduated in 1905 and went to work for Rockefeller after a brief series of odd jobs.
Eaton began working for Rockefeller in Manitoba in 1907. He was put in charge of acquiring franchises for power plants in Canada, although the Panic of 1907 intervened, and Rockefeller was unwilling to pursue the enterprise. Eaton then assumed part of the project himself, borrowed money, and built a power plant in Manitoba. He soon followed this success by building other plants, and he eventually established the Continental Gas and Electric Company with holdings in the United States and Canada.
In 1913, he returned to Cleveland and established a partnership in the investment banking firm Otis & Company. Over the next 10 years, Eaton became one of the major investors in the UTILITIES industry, which was expanding rapidly in the 1920s. He merged Continental Gas and Electric with the Kansas City Power and Light Co. and the Columbia Power and Light Co. to form United Light and Power, a giant utility that served more than 5 million people in a dozen midwestern states.
During the late 1920s, Eaton was best remembered for engaging in a takeover battle with Samuel INSULL for Insull’s holdings in the Commonwealth Edison Company. In order to fend off Eaton’s unwanted advances, Insull was forced to seek the help of New York bankers, who forced his downfall and the notable bankruptcy filing that followed in the early 1930s. He also entered the STEEL INDUSTRY in the 1920s and merged several smaller companies into the Republic Steel Corporation, destined to become one of the country’s largest producers. The same year that he created Republic, he also took control of the Goodyear Tire and Rubber Company.
The stock market crash of 1929 reputedly cost Eaton more than $100 million in losses. Three years later, he became associated with Harold Stuart of the Chicago investment banking firm Halsey Stuart & Co. Halsey Stuart was the former financier of much of Insull’s utilities empire. One of the firm’s major contributions to finance during this period was the introduction of competitive bids for underwriting mandates for new securities issues, especially in the railroad industry, which was later made standard by the Securities and Exchange Commission.
In his later years, Eaton remained active in industry by becoming the chairman of the Chesapeake & Ohio Railroad and the Kaiser- Frazer Automobile Co. after World War II. He also developed a close relationship with the Soviet Union and organized a series of meetings at his home in Nova Scotia between American and Soviet scientists designed to ease world tensions. These meetings became known as the Pugwash Conferences. He also helped develop the St. Lawrence Seaway.
Further reading
- Allen, Frederick Lewis. The Lords of Creation. New York: Harper & Brothers, 1935.
- Gleisser, Marcus. The World of Cyrus Eaton. New York: A. S. Barnes, 1965.
