| Edward Belden Greene | |
| Birth Date: | 26 July 1878 |
| Birth Place: | Cleveland, Ohio, U.S. |
| Death Place: | Cleveland, Ohio, U.S. |
| Occupation: | Banking, mining, and steel company executive |
| Years Active: | 1900—1952 |
Edward Belden Greene (July 26, 1878 — October 20, 1957) was an American banking, mining, and steel company executive. He joined the Cleveland Trust Company in 1900, and by 1914 was a vice president. He later was a director and chairman of its executive committee, and served on state and federal emergency credit and banking organizations during the Great Depression. He left in 1933 to become chairman of the board of directors of the Cleveland-Cliffs Iron Mining Company. He oversaw the purchase of Corrigan, McKinney Steel, and later its sale.
Edward Greene was born in Cleveland, Ohio, on July 26, 1878, to Jon Eliot and Mary (Seymour) Greene.[1] Jon Greene rose from clerk at the William Bingham Company (a large local hardware and metals concern) to partner, and succeeded founder William Bingham as president when Bingham died in April 1904.[2] Edward had a brother, William, and three sisters, Mary, Lucy, and Helen.[3]
Greene graduated from Cleveland High School. He enrolled at Yale University, where he graduated with a bachelor's degree in 1900.[4] [5] While in college, Greene joined the fraternity Alpha Delta Phi and was a member of the exclusive Wolf's Head Society.
Greene began working part-time[6] in 1898 at the Cleveland Trust Company as a general messenger, clerk, and teller.[7] He was made an assistant treasurer in January 1906.[8]
After being elected to Cleveland Trust's board of directors in January 1907,[9] the board elected Green chairman of its executive committee and made him an ex-officio member of all of the bank's other committees. Greene was appointed the company's secretary in March 1911.[10]
Greene was appointed a vice president of Cleveland Trust in January 1914.[11] His extensive outside business interests led him to resign as vice president in 1926, although he remained a director and member of the board. Greene was one of the bank's leaders who helped it grow from a single room in the basement of an office building into a 53-branch regional financial powerhouse. Alexander C. Brown, chairman of Cleveland Trust at the time of Greene's death in 1957, said Greene's "wisdom and financial genius" helped Cleveland Trust survive the Great Depression.
On March 25, 1926, Greene was elected to the board of directors of the Cleveland Cliffs Iron Co.[12]
There was rapid consolidation in the steel industry in the 1920s, much of it led by Canadian American investor Cyrus S. Eaton. Eaton entered the utilities field in Canada in 1907, obtaining bank loans and purchasing natural gas and electric utilities, merging them, and achieving large profits through economies of scale. In 1912, Eaton settled in Cleveland, Ohio, and joined the investment banking firm of Otis & Co.[13] He became a partner in the firm in 1916. At the urging of a friend, shipping magnate Harry Coulby, Eaton (through Otis & Co.) began acquiring troubled steel companies.[14] He purchased a controlling interest in the financially troubled Trumbull Steel Co. in 1925.
In April 1926, Otis & Co. formed a new investment company, Continental Shares,[15] whose purpose was to acquire stock in various steel companies.[16] Eaton owned half the company, the shareholders of the iron mining firm Cleveland Cliffs the other half.[17]
In July 1926, Eaton acquired the United Alloy Steel Corporation, the Central Steel Co., and the United Furnace Co., and combined them to form and incorporate the Central Alloy Steel Corporation. He also began buying stock in the Republic Iron and Steel Company, and by early 1927 had won control of four seats on the company's board of directors. Eaton then began buying shares in the Youngstown Sheet & Tube steel company in 1927. In 1928, Eaton merged Trumbull Steel with Republic Iron and Steel, and Trumbull Steel purchased Sheet & Tubes, Inc. Central Alloy Steel acquired Interstate Iron & Steel Co. in 1929. By September 1929, Eaton had won a controlling interest in Donner Steel.[18] In 1929, Donner Steel purchased the Witherow Steel Corporation. In 1930, Trumbull Steel merged with the Union Drawn Steel Co.
Eaton now controlled companies which consumed a good deal of iron ore provided by Cleveland-Cliffs. Additionally, Cleveland-Cliffs had invested in Central Alloy Steel, Donner Steel, Republic Iron & Steel, and Trumbull Steel, and supplied substantial amounts of ore to these companies.
Samuel Mather began forging closer relationships with Eaton. Samuel Mather was the co-founder of the Cleveland Iron Mining Company, one of the two predecessor companies of Cleveland-Cliffs. Steel company mergers meant fewer customers for ore, which would drive down ore prices. Mather believed he had to have a much stronger relationship with these newly-merged companies. Eaton, for his part, wanted a steady supply of ore from a company with excellent reserves. Eaton put Greene on the board of Republic Iron & Steel in May 1927,[19] and Eaton accompanied Mather on an inspection tour of Cleveland-Cliffs' Michigan mining properties in June 1927[20] (during which Eaton stayed at Mather's Michigan cottage).
According to Greene, Eaton asked the Cleveland-Cliffs Company if it wanted to become part of his emerging conglomerate. He felt it would be advantageous to Cleveland-Cliffs, but the addition of Cleveland-Cliffs would also help him bring other steel companies into the merger.
Mather and Eaton met in Cleveland in March 1929 to begin working out how the two could work together.
In the April, Eaton went to Mather's summer home in Pasadena, California, where he met with Mather, Greene, S. Livingston Mather (Samuel Mather's son), George Garretson Wade, and William P. Belden in Pasadena, California.[21] At this meeting, Eaton proposed merging Cleveland-Cliffs with his soon-to-be-announced Republic Steel. Mather declined. Instead, the Mather group offered to establish a new firm, Cliffs Corporation. Cleveland-Cliffs issued new 1.25 shares of preferred stock to all of its shareholders in exchange for 1 share of common stock. To create the new company, Cleveland-Cliffs invested 500,000 shares of preferred and 800,000 shares of common stock.[22] Eaton's investment in the new company was all the stock he held in Inland Steel, Republic Iron & Steel, Wheeling Steel, and Youngstown Sheet & Tube. Cliffs Corporation would issue 800,000 shares. Cleveland-Cliffs stockholders were permitted to exchange one common share of Cleveland-Cliffs for one common share of Cliffs Corp., while Eaton got the other half of Cliffs Corp. stock.[23] Eaton accepted the proposal, which was announced on May 1.[24] William G. Mather, chairman of Cleveland-Cliffs, assured stockholders that this scheme gave Cleveland-Cliffs the inside track on ore sales, and diversified Cleveland-Cliffs' revenue streams to ensure against economic downturns.
On December 17, 1929, Eaton announced that he had was merging the Bourne-Fuller Co., Central Alloy Steel, Donner Steel, and Republic Iron & Steel into a new company, to be named Republic Steel Corporation. Tom M. Girdler was named the chairman of the board of directors of the company.[25] Girdler had announced his surprise resignation as president of Jones & Laughlin Steel on October 21, 1929.[26] Girdler had resigned because Eaton, Samuel Mather, and Greene assured him he would be chairman of Eaton's planned steel merger.
On March 21, 1930, Cleveland-Cliffs bought 62.5 percent of the shares of Corrigan, McKinney Steel.[27] The cost of the transaction was $35.5 million. The acquisition seemed to make sense: Corrigan, McKinney was a ready customer for Cleveland-Cliffs ore, and the steel firm owned several iron mines in Michigan. Cleveland-Cliffs did not intend to get into the steel business, but rather intended to sell the blast furnaces and steel mills to Eaton.[28]
To finance the deal, Cleveland-Cliffs paid $5 million in cash and borrowed $25 million from eight banks.
Working with William G. Mather, Greene oversaw the purchase of Corrigan, McKinney Steel. The merger effectively prevented both Bethlehem Steel and U.S. Steel from entering Cleveland. Greene was elected a director of Corrigan, McKinney Steel the day the deal was announced.[29]
The Corrigan, McKinney deal proved disastrous for Cleveland-Cliffs. Although the Great Depression had begun in late October 1929, Greene and other Cleveland-Cliffs directors and officers believed the economy had only entered a short-term recession. They were disabused of that idea by early 1931.
Cleveland-Cliffs soon lost control of Corrigan, McKinney Steel. McKinney Steel Holdings (MSH) had issued MSH common stock and given it to shareholders of Corrigan, McKinney in exchange for their shares. But only 40 percent of Corrigan, McKinney shares had been purchased this way. Another 13.75 percent of Corrigan, McKinney stock had been purchased with MSH preferred stock. The Union Trust Company of Cleveland and more than 1,000 members of the public owned the shares of MSH preferred.[30] Under normal circumstances, MSH common stock had voting privileges; MSH preferred did not. However, if dividends on MSH preferred were not made, the MSH common stock lost its voting privileges and MSH preferred gained them. In other words, due to the way MSH common and preferred stock had been issued, just 13.75 percent of all Corrigan, McKinney shares could control 53.75 percent of Corrigan, McKinney shares if dividends ceased.
Cleveland-Cliffs owned only 88 of the 72,500 shares of MSH preferred.[31] To keep control of Corrigan, McKinney, Cleveland-Cliffs had to ensure that Corrigan, McKinney paid the required preferred dividend to MSH so that MSH could pass it on to MSH preferred stockholders to keep them happy, even though Cleveland-Cliffs could ill-afford to do so.
Cleveland-Cliffs was also having trouble paying its debt. The short-term loans it had taken out to finance the steel mill's purchase carried a high interest rate. By 1931, the company was having trouble making its loan payments. It tried to convert the short-term debt to long-term, low-interest bonds, but the economic conditions in the U.S. made it impossible to find any buyers. Cleveland-Cliffs was forced to sell one-year notes instead, and even then had great difficulty placing the loans. William G. Mather even pledged part of his personal fortune as collateral in order to find buyers.
In June 1933, at the urging of the company's lenders, Greene was appointed executive vice president of Cleveland-Cliffs. In this new role, he assisted the 75-year-old Mather in negotiating extensions of the company's loans. Two months later, Mather resigned as president of Cleveland-Cliffs and took the role of "honorary board chairman". Greene was appointed the new president, overseeing day-to-day operations of the company.[32] Despite his heavy new responsibilities, Greene remained chairman of the Cleveland Trust executive committee and a director of that bank.
Upon taking up the presidency of Cleveland-Cliffs, Greene told its board of directors that some assets might have to be sold in order for the company to stay solvent. As early as January 1931, and continuing for several months thereafter, the firm was rumored to be trying to sell Corrigan, McKinney to Republic Steel.[33]
Corrigan, McKinney stopped paying dividends in 1931. Cleveland-Cliffs took out a $3.5 million loan to pay dividends on Corrigan, McKinney stock for a while, but Corrigan, McKinney stopped paying dividends after March 1932.[34] This enabled preferred shareholders in McKinney Steel Holdings to vote their Corrigan, McKinney stock, and stripped voting privileges from all other Corrigan, McKinney shareholders.[35] The Union Trust bank, which held 23,244 of the preferred shares in MSH, effectively controlled MSH. It ousted three MSH board members supported by Cleveland-Cliffs and installed three of its own: Joseph R. Kraus, chairman of Union Trust; Wilbert J. O'Neill, vice president of Union Trust; and Aims C. Coney, vice president of National City Bank and former vice president of Union-Cleveland Corp. (Union Trust's investment subsidiary). Greene and Mather were the only two board members re-elected.[36]
Cleveland-Cliffs entered into negotiations to sell Corrigan, McKinney in May 1933, but these did not bear fruit.[37]
Greene and Mather were re-elected to the board of McKinney Steel Holding in February 1934. Kraus, O'Neill, and Coney were replaced by John Watson, attorney with the firm M.B. and H.H. Johnson; Ernest N. Wagley, assistant vice president of Union Trust; and Harry F. Burmester, assistant conservator of Union Trust.[38]
Corrigan, McKinney Steel again paid no dividends throughout the fiscal year ending April 1, 1934.[39]
In July 1934, Cleveland-Cliffs entered into negotiations to sell Corrigan, McKinney Steel to Repbublic Steel[40] — coal mines and all. Greene and William G. Mather worked with Tom Girdler of Republic Steel, with negotiations assisted by Crispin Oglebay. (Oglebay was head of Oglebay Norton, an ore mining and shipping company. He was also a director of both Corrigan, McKinney Steel and Republic Steel.) Under the terms of the deal, Corrigan, McKinney would be absorbed by Republic Steel and cease to exist.
To ensure the deal went through, in August 1934 the board of McKinney Steel Holdings ousted William G. Mather and installed Oscar L. Cox as president.[41] On October 25, 1934, the preferred shareholders of McKinney Steel Holdings approved of the merger.[42] The Department of Justice sued to stop the merger on antitrust grounds in February 1935,[43] but a federal court ruled in favor of the merger in May 1935.[44]
Greene's background in finance made him well-equipped to handle Cleveland-Cliffs' debt. Greene characterized the short-term debt as "especially dangerous". By this time, the short-term notes had to be paid every three months. A bank could have called its loan at any time, jeopardizing Cleveland-Cliff's solvency. Immediately after the deal with Republic Steel was announced he sought to refinance the debt by selling bonds.[45] The plan, announced in mid October, was to refinance three-quarters of its outstanding debt of $22.6 million through the sale of bonds. These five-year bonds, secured by mortgages on land, mines, and shipping vessels owned by Cleveland-Cliffs, carried an interest rate of 4.75 percent and would be marketed privately. The remainder of the debt would be paid by issuing a deed of trust against stocks and bonds owned by Cleveland-Cliffs. It, too, would carry an interest rate of 4.75 percent.[46]
With the sale of Corrigan, McKinney to Republic Steel, McKinney Steel Holding no longer had any purpose. The first step in winding up the company would be to redeem all outstanding preferred shares. This would also help Cox liquidate the Union Trust by converting the shares it owned into cash. MSH's preferred shareholders approved a plan that would allow MSH to redeem 10,000 preferred shares a year by liquidating the Republic Steel securities held by MSH. The Union Trust Co. negotiated a deal to sell its MSH preferred back to MSH at $127.50 per share. (That was the call price of $105 per preferred share, plus all dividends owed.)
Dissolution of McKinney Steel Holding would also allow Cleveland-Cliffs to take ownership of the 335,937 shares of Republic Steel common stock MSH held.[47] [48]
On November 1, a syndicate of eastern banks agreed to buy all of Republic Steel bonds and preferred stock held by MSH. This would allow MSH to retire 11,056 shares of MSH preferred by December 31, 1935. MSH president Oscar L. Cox also asked MSH preferred shareholders give the MSH board of directors the power to sell assets, retire the preferred stock in any amount, and shorten the time for stock redemption from 30 days to 10. Two weeks later, MSH preferred stockholders and Greene (voting the common shares) approved Cox's plan.[49] Redemption of MSH preferred, due to occur on December 2, was moved up to November 19.[50]
The day the MSH preferred stock was retired, Green won approval from the Cleveland-Cliffs board of director to sell $16.5 million in bonds and sign a $5 million deed of trust note to refinance the company's short-term debt. The company anticipated $500,000 a year in interest savings.
On November 19, Greene announced that McKinney Steel Holding would be dissolved. At the MSH board meeting on December 7, 1935, Oscar Cox stepped down as president, and Greene succeeded him. The other four directors resigned as well, and were replaced by Cleveland-Cliffs officers. McKinney Steel Holding was then dissolved.[51] The $1.6 million in cash still held by MSH was transferred to Cleveland-Cliffs.
In April 1947, William G. Mather retired as chairman of the board of Cleveland-Cliffs. Greene was elected his successor. The day of his election, Greene announced that Cleveland-Cliffs and Cliffs Corp. would merge.[52]
On June 21, 1952, the 73-year-old Green retired as chairman. His successor was Alexander C. Brown. Greene continued to act as honorary chairman, presiding at board meetings and advising Brown.
As was typical for the time, Edward Greene served on the board of directors of a wide range of companies. These included Eaton Axle & Spring, Guarantee Title & Trust, Ohio Chemical & Manufacturing Co., Osborn Manufacturing, Sandusky Cement, Trumbull Steel, Wade Realty, and The Williamson Company. At times, he also served on the boards of Eaton Manufacturing Co., Goodyear Tire & Rubber, Harshaw Chemical Co., Jones & Laughlin Steel, Medusa Portland Cement, Montreal Mining Co., and the Reserve Mining Co. He also served for a time as vice president of Cliffs Dow Chemical Corporation.[53]
Greene was also a director of several railroads, including the New York Central Railroad,[54] the New York and Harlem Railroad,[55] the West Shore Railroad,[56] the Cleveland, Cincinnati, Chicago and St. Louis Railway, the Michigan Central Railroad, and the Lake Superior and Ishpeming Railroad. He also was a director of the Cleveland Union Terminal Co., which built the Cleveland Union Terminal, a downtown Cleveland landmark.[57]
As head of a major Great Lakes shipping company, Greene also served on the board of directors of the Lake Carriers Association, the trade association for major Lake freighter companies.[58] He also served on the board of the Lake Superior Ore Association, a trade association of mine owners. He was considered an expert on the history of iron ore and the Cleveland metals industry.
As a banker, Green was appointed to the Banking Advisory Committee, an Ohio state government emergency committee set up in May 1933 to advise the governor and legislature on banking issues.[59] He served on its successor body, the State Banking Advisory Board, which issued major recommendations to modernize Ohio's banking laws in October 1934.[60] He also co-founded the Cleveland chapter of the American Institute of Banking.
During the Great Depression, Greene served on the board of the National Credit Corporation, a U.S. government agency which operated in 1931 and 1932 to stem the tide of bank failures. When it was replaced in 1933 with the Reconstruction Finance Corporation, Greene served on that board as well. During much of the depression, Greene also was a member of the advisory loan committee of the Federal Reserve Bank of Cleveland.
Locally, Greene was president of the Cleveland Chamber of Commerce in 1924 and again in 1940. He received its medal for public service.
During World War II, Green was director of military relief of the Lake Division of the American Red Cross. He was also on the board of directors, and a member of the executive committee, of the Military Training Camps Association, a U.S. government authorized but privately run summertime military training program.
Greene served at various times as a trustee of the Cleveland Museum of Art, Cleveland Community Fund, University Hospitals, the Welfare Federation, and Yale University. He was also a trustee of the Cleveland Institute of Art, Playhouse Foundation, and the John Huntingon Art and Polytechnic Institute (precursor to the Cleveland Museum of Art).
Edward B. Greene received an honorary master's degree from Yale University in 1925, and an honorary Ph.D. from Western Reserve University in 1946.
Greene married Helen Wade, daughter of Cleveland industrialist Jeptha Homer Wade II, on November 18, 1909.[61]
During the last years of his life, Greene suffered from poor health. He was confined to his home in the months before his death. He died at his home on October 10, 1957. His Episcopal funeral was held at Wade Memorial Chapel at Lake View Cemetery in Cleveland. Rev. Beverley Dandridge Tucker Jr., bishop of the Episcopal Diocese of Ohio, presided. Green was then buried at Lake View Cemetery.[62]
Greene was an art collector. He donated 100 ivory and porcelain miniature portraits to the Cleveland Museum of Art, which subsequently named a wing of the muserum after him.[63]
The Lake freighter MV Edward B. Greene was named for him. It was christened the day he retired in 1952, and for many years was the flagship of the Cleveland-Cliffs fleet.[64]