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.
Early life Edward Greene was born in Cleveland, Ohio, on July 26, 1878, to Jon Eliot and Mary ( Seymour) Greene. 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. Edward had a brother, William, and three sisters, Mary, Lucy, and Helen.; ;
Greene graduated from Cleveland High School. He enrolled at Yale University, where he graduated with a bachelor's degree in 1900. While in college, Greene joined the fraternity Alpha Delta Phi and was a member of the exclusive Wolf's Head Society.
Banking career
Greene began working part-time in 1898 at the Cleveland Trust Company as a general messenger, clerk, and teller. He was made an assistant treasurer in January 1906.
After being elected to Cleveland Trust's board of directors in January 1907, 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.
Greene was appointed a vice president of Cleveland Trust in January 1914. 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.
Steel manufacturing career Eaton and steel mergers
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. 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. 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, whose purpose was to acquire stock in various steel companies. Eaton owned half the company, the shareholders of the iron mining firm Cleveland Cliffs the other half.
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. In 1929, Donner Steel purchased the Witherow Steel Corporation. In 1930, Trumbull Steel merged with the Union Drawn Steel Co.
Creation of Cliffs Corp. 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 Livingston Mather II began forging closer relationships with Eaton. Samuel Mather was son of 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, and Eaton accompanied Mather on an inspection tour of Cleveland-Cliffs' Michigan mining properties in June 1927 (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, Samuel Livingston Mather III (Samuel Mather's son), George Garretson Wade, and William P. Belden in Pasadena, California.; 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. 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. Eaton accepted the proposal, which was announced on May 1. 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 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. Girdler had announced his surprise resignation as president of Jones & Laughlin Steel on October 21, 1929. Girdler had resigned because Eaton, Samuel Livingston Mather II, and Greene assured him he would be chairman of Eaton's planned steel merger.
Purchase of Corrigan, McKinney Steel On March 21, 1930, Cleveland-Cliffs bought 62.5 percent of the shares of Corrigan, McKinney Steel.; 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.
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.
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. 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. 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. Despite his heavy new responsibilities, Greene remained chairman of the Cleveland Trust executive committee and a director of that bank.
Sale of Corrigan, McKinney Steel 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.; ; ;