Decision in Youngstown

Early one morning last week Judge David G. Jenkins walked into his Mahoning County Court of Common Pleas at Youngstown, Ohio, with a thoughtful frown on his face. Since April he had been studying the famed suit by which Cyrus Stephen Eaton attempted to fulfill his vow that "Youngstown Sheet and Tube will never merge with Bethlehem Steel Corp." (TIME, March 24 et seq).

Through long, hot, exciting summer weeks Judge Jenkins had heard two brilliant panels of lawyers. Upholding Mr. Eaton's cause had been: Luther Day, of Day & Day, Cleveland; Squire, Sanders & Dempsey, Cleveland; Harrington, Deford, Huxley & Smith, Youngstown; Park Chamberlain of Chicago. On the Bethlehem Sheet & Tubeside were:

Newton D. Baker and Howard F. Burns of Baker, Hostetler & Sidlo, Cleveland; Kennedy, Manchester, Ford, Bennett & Powers, Youngstown; Frederick H. Wood and Hoyt A. Moore of Cravath, de Gersdorff, Swaine & Wood, Manhattan. Judge Jenkins had heard his Courtroom reverberate to huge figures in dollars, steel, shares. He had heard the testimony of great steelmasters, of accountants. Few people expected that by last week he would have reached a decision. To the Court Clerk the Judge handed 19 pages of foolscap, written in pencil. To newsmen he gave two similar sheaves which he had carefully copied from the original, fearful of stenographic errors. It was still before 9 a. m. when the news was flashed from Youngstown that Cyrus Stephen Eaton had won, that he had been granted an injunction blocking the merger. When the final history of Steel is written, an important chapter will be that which focuses in the Mid West, which will tell of Mr. Eaton's rise to steel power, of Bethlehem's bold attempt to get a foot hold in this territory, of the antagonism in Ohio's financial and social circles which was caused by the War of 1930. Significant too in a merger-era will be the precedent of this case, in which the issues were clearly defined, bitterly fought.

Practically all of Mr. Eaton's contentions were upheld. The Court found: That Sheet & Tube's directors had neglected their duty, acted "without necessary information." That the rights of the minority stock holders "were violated because vital information was withheld from them." Of the merger terms, the Court said: Grave doubt as to the adequacy of the consideration exists. "Nothing to say. Thank you very kindly," was the only remark made by Mr. Eaton when he heard the news. Equally silent were the defeated factions who had 30 days in which to appeal, who would not likely give up until the U. S. Supreme Court heard the issue.

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