Business: CYRUS EATON

Khrushchev's Favorite Capitalist

WHILE junketing around the U.S. last week, Rus sia's Deputy Premier Anastas Mikoyan (see NATIONAL AFFAIRS) put one courtesy call at the top of his list—a special visit to Cyrus Stephen Eaton, 75, Cleveland multi millionaire and Red Boss Khrushchev's favorite capitalist.

Greeting Eaton, Mikoyan cooed: "When Mr. Khrushchev talked about you, his whole face was beaming." Now in his twilight years, Cyrus Eaton is the archetype of the fading dog-eat-dog capitalist. Tall and slim (5 ft. 11 in., 175 Ibs.) with frosty blue eyes and arctic white hair, he dresses like Daddy Warbucks (blue suits, grey Homburg) and resides in manorial splendor on huge farms (champion Shorthorn beef cattle) in Ohio and Nova Scotia. His personal wealth is estimated at something like $100 million, and his hard-knuckled grip on U.S. industry extends over a $2 billion empire of iron and steel, railroads, shipping, coal and paint. Cy Eaton picked up his empire by lone-wolf feats of financial derring-do that have brought him more bitter court fights, proxy wars and Government investigations than almost any businessman of his time.

THE son of a Nova Scotia farmer from the herring-heavy shores of Pugwash (pop. 950), Eaton first thought of entering the ministry but soon changed his mind after a visit to his uncle, who was pastor of Cleveland's Euclid Avenue Baptist Church. One of the parishioners was Standard Oil Tycoon John D. Rockefeller, who gave the 17-year-old youth a job as a clerk on his estate outside Cleveland.

Later, he got Eaton a position in a utility company. Eaton learned the business so fast that he was able to build a power plant in Canada a few years later. By mergers and purchases, he shortly controlled a utilities complex in which $2 billion was invested. By 1925 he was so rich that when he decided to refinance a small steelmaker called Trumbull Steel Co., he could say: "Gentlemen, if you have any doubt about my ability to underwrite the financing, just call the Cleveland Trust Co. and ask whether my check for $20 million will be honored." Five years later, with Trumbull and other small companies as a base, he founded Republic Steel Corp. as the nation's third biggest producer. That year he also won control of Goodyear Tire & Rubber Co. Operating from his Cleveland-based Otis & Co., a securities firm, and a maze of holding companies, Eaton's deals were faster than the eye —or most financial experts—could follow. He helped topple Utilityman Samuel Insull by outfoxing him in a deal that cost Insull companies $56 million.

THE Depression clipped Eaton's wings but not his tongue. Railing at Wall Street and the "New York money ring," he became a New Dealer and pro-union, as well as a violent enemy of Ohio's Senator Robert A. Taft because Taft's early isolationism was "a policy as fantastic in theory as it is impossible in practice." Eaton prevented the Taft family from merging Cincinnati's Enquirer with their successful Times-Star by lending the employees $7,600,000 to buy the paper from the management.