Word: cyrus
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Dates: during 1930-1939
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Early this week Jerome Frank and the SEC were deliberating in Washington whether to give any ear whatsoever to Cyrus Eaton & friends...
...Cyrus Stephen Eaton is a well-dressed, frosty-eyed financier of 56. He left his native home in bleak Pugwash, Nova Scotia, to study for the Baptist ministry. In Cleveland in 1925 he dramatized his power to refinance Trumbull Steel Co. by proving to its officers that Cleveland Trust Co. would honor his check for $20,000,000. By 1930 he was instrumental in forming the No. 3 steel Company (by mergers built on Republic), was sitting on the boards of 20 great corporations (utilities, steel, paints, hotels). That year he helped undermine the foundation of the tottering Insull empire...
...Cyrus Eaton's Otis & Co. wrote a letter to Wendell Willkie, president of Commonwealth & Southern Corp., saying that they understood that big holding company was about to buy 125,000 shares of stock from its Michigan subsidiary, Consumers Power Co. Mr. Eaton righteously set out a plan to disprove Wendell Willkie's chronic complaint that investors will not buy utilities securities: his Otis & Co. would gladly pay a price "substantially in excess" of the $28.25 that C. & S. was going...
From the Washington front, another gun began firing from an unsuspected emplacement. For probably the first time in his checkered career Cyrus Eaton found he had old, reforming Senator George Norris on his side. "The Power Trust." said the frail Senator in a prepared statement, "is caught at its old tricks. ... It happens again that the holding company is robbing its own subsidiaries, in order to enrich itself." Rejoined Willkie: "Completely and absolutely false." Back came George Norris with another blast to the effect that the cost of the stock deal would be reflected in electric rates paid by Michigan...
Meanwhile, all was relatively quiet on a more important financial front established by Cyrus Eaton's letter. In addition to proposing public bids on the stock issue, he had also proposed that he and associates (including big Halsey Stuart & Co.) be allowed to bid on Consumers' $28,500,000 bond issue. Foe of competitive bidding, Wendell Willkie had already arranged to have the issue handled by conservative Morgan Stanley & Co., Inc. and Bonbright & Co., Inc., who step out one door when competitive bidders step in at another, holding that both investor and issuer are best served by honest...