End of an Empire

When Depression nipped him in 1930, Cyrus Stephen Eaton had realized only one of his many ambitions. Out of a tiny utility property picked up cheap in the 1907 panic he had built one of the largest power & light systems in the U. S. He had wanted to form the Second Biggest Steel Company. As the largest investor in the largest rubber companies he had planned to bring peace to that warring industry. But. above all. this youngish man from Pugwash. Nova Scotia dreamed of a Midwest industrial empire, vast, powerful, autonomous. His holding company was appropriately Continental Shares, Inc. Without a trace of sarcasm Cleveland used to call him Cyrus the Great.

It was Cyrus Eaton's fight against the Bethlehem-Youngstown merger that blasted his fame & fortune. He wanted Youngstown for his own big Republic Steel but the battle was fought in the name of industrial independence for the Midwest. To finance that battle Continental Shares pledged most of its assets for bank loans. The Eaton victory was Pyrrhic. By 1931 slumping stock prices pushed his loans under water and Cleveland bankers ousted him as president in favor of George Taylor Bishop, a semi-retired financier. Cyrus Eaton disappeared from the headlines as completely as if he had died. Last week bushy-browed old President Bishop was making a last stand against his creditors' determination to sell what remained of Continental's shriveled assets. Week before he sought in vain to enjoin Chase National from auctioning off the stocks pledged for a $27,000,000 loan..

Chase itself bought in practically all the collateral for $22,700,000. Included were 95,000 shares of Republic Steel, 50,000 shares of Cliffs Corp. (iron ore), 98,400 shares of Firestone Tire, 77,000 shares of Goodyear, 62,000 shares of U. S. Rubber. 55,000 shares of Goodrich, 350,900 shares of Lehigh Coal & Navigation and working control of United Light & Power. What Chase intends to do with these new possessions Chase would not tell last week.

Two groups of Ohio banks, headed by Cleveland Trust Co. and Union Trust Co., intend to auction off their collateral June 26, and Continental's remaining assets will probably pass to outside bidders. President Bishop, who is one of Continental's biggest stockholders, mourned last week: "Nothing will be left for shareholders of Continental if all the securities which the corporation has pledged for loans are sold at present prices." Some stockholders paid $40 a share.

Thus the final dissolution of Cyrus Eaton's empire seemed inevitable. Yet like many another onetime tycoon Cyrus Eaton lives on in a manner which wholly belies his business disasters. He has abandoned his palatial Euclid Avenue house (along with other Clevelanders who shared his faith ) but at his country home in nearby Northfield a butler still answers the door, stable boys mind the horses and a half-dozen gardeners putter around the 200-acre estate, and he is still Master of Hounds at the Summit Hunt Club. He has a small office in vastly-deflated Otis & Co., his old investment banking firm, but his business activities, if any, are a mystery to Cleveland.

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