Of the two books, the first -- Wealth, Waste and Alienation -- is easier to grasp, easier follow and to enjoy. Also, this is the book I hope to buy for my own research purposes. Of special interest to me, of course, was every mention of West Overton, members of the Overholt family, and their business activities; the history of the surrounding towns; the history of laborers, labor disputes and great strikes; and the many interesting business activities of Henry Clay Frick. There is quite a lot of Frick's business in this book, since he was intimately involved with all aspects of the growth, development and daily operation of the coking industry. Besides the exerpt from the book's Preface, I wished to highlight the author's description of Southwestern Pennsylvania before the Coke Age.
Big Steel is really more suited to scholars and academic experts of various fields of study -- the steel industry, the complex economies that go with it, the business complexities that impact upon such a towering corporate entity, etc. However, even I was able to get interested in passages that detailed certain technological and historical events. I chose to exerpt a portion of the book that describes the earliest beginnings of the movement to create US Steel.
The following exerpts are from Wealth, Waste and Alienation.
From the Preface:
Away from the sprawling, built-up area of greater Pittsburgh, much of southwestern Pennsylvania consists of pleasing if unspectacular rural landscapes, a rolling countryside of woodland, small farms, and a few not noticeable bustling towns. Two hundred years ago this section lay on the pioneer fringe of the nation: farmland and sites for new settlements were carved out of what seemed to some of its early white inhabitants an earthly paradise. Looking at the area from either a contemporary perspective or, in the mind's eye, the decades around 1800, one finds it hard to realize that it was for many years home to one of the nation's greatest and most distinctive mineral-based economies.
From pages 7-9:
Southwestern Pennsylvania before the Coke Age
The Connellsville region was opened by European pioneers, the military, and then by settlers a century before it became renowned for coke making. Fort Necessity, on the east side of Laurel Ridge, was a control point established by George Washington. Following the French and Indian Wars, settlers reached the Youghiogheny Valley. After a period of frontier settlement, southwestern Pennsylvania became a zone of passage and source of supplies for those moving farther westward. A route from the Potomac led northwest by a narrow portage to the Youghiogheny and from there to and beyond the Monongahela, a course that with further improvement became the National Road. Along this route Uniontown, settled in 1767, was one of the first small communities, nuclei that would grow into towns, and so become fixed points through the various stages of economic development. Connellsville and Greensburg were established two or three years later, Brownsville was laid out in 1785, and Mt. Pleasant in 1797. Westmoreland County was formed in 1773, and Fayette County ten years afterward.
Life in such frontier lands was hard in the last quarter of the eighteenth century. In 1791 the Reverend Thornton Fleming was assigned to Methodist service some way farther up the Monongahela in the Clarksburg circuit of what was to become West Virginia. More than forty years later, he looked back on his early days in the area: "When I came to my apointment this whole country appeared as a howling wilderness. Settlements were quite thin, quite remote from one another in many parts, and little cultivated. In many places the living, manners, state of society and morals of the people seemed to correspond."5 The fact that Fayette County was one of the centers of the Whiskey Rebellion of 1794 was a sign it shared both the remoteness and some of the human characteristics of Fleming's Clarksburg.
A decade after the Whisky Rebellion, Thaddeus Harris, traveling in the areas west of the Alleghenies, found a happier situation. Along the valley of the Monongahela, economic development and diversification were underway: "The settlements on both sides of the Monongahela river are fine and extensive, and the land is good and well cultivated. Numerous trading and family boats pass continually. In the spring and fall the river seems covered with them. The former, laden with flour, whiskey, peach-brandy, cider, bacon, iron, potter's ware, cabinet work, etc, all the produce of the country, and destined for Kentucky and New Orleans or the towns on the Spanish side of the Mississippi. The latter convey the families of emigrants, with their furniture, farming utensils, etc, to the new settlements they have in view."6 The region was becoming agricultural, but though contemporaries such as Harris described the soil as fertile and well farmed, there is evidence -- admittedly from many years later -- that farming in this area was in fact not very prosperous. . . . As a local paper recalled much later, during the 1830s the area was characterized by poor farmland.7 . . . . Long before this some had realized that the natural wealth of the area could be found beneath rather than within its soil. The earliest of its mineral-based developments were in iron.
On 1 November 1790 the first blast furnace west of the Appalachians -- though owned by a Philadelphia partnership -- was blown in on Jacobs Creek, Fayettee County. The Alliance Ironworks also included a forge. Five months later the Union furnace was at work on Dunbar Creek four miles south of Connellsville. In 1792 a forge was built along the same stream. Plumsock Forge had been built in Menallen Township, Fayette County, by 1794. Two years later a sixth part of Laurel furnace, its ore bodies, and forest lying within two miles of the Youghiogheny was advertised in Pittsburgh.8
These furnaces and forges supplied a variety of markets. . . . In the early days the castings and forge products of ironworks between the Youghiogheny and Monongahela had been hauled in teams for fifteen to as much as thirty miles across country to Brownsville. From that river port the goods were taken on flatboats down the Ohio and Mississippi and traded in frontier communities for corn, pork, whiskey, and other products, which in turn were carried on to New Orleans and there exchanged for sugar and molasses. These were sent by sea to Baltimore, where they were disposed of for groceries, dry goods, and other items that, loaded on Conestoga wagons, were hauled some three hundred miles over the Appalachians to the furnace or forge communities from which the iron products had been dispatched. Barter was the basis of the whole system according to Pechin, who quoted an old furnaceman who conducted business continually for three years and in that time saw only ten dollars in money.9
The following exerpt is from Big Steel, Part One, The Gary Era.
From Origins: The Creation of the United States Steel Corporation, pages 15-19:
During 1900, tensions and stakes were raised still higher by the reconstruction of some old companies and the beginnings of new ones, though the latter were as yet insignificant in relation to the established producers. Republic Iron and Steel Company was formed in 1899 as an agglomeration of rolling-mill operations. It also controlled five blast furnaces and a few, generally ill-located, steelworks. It set in train a purposeful reconstruction, concentrating its powers in the Youngstown area. Above Pittsburgh, Union Steel Company was intending to enter the wire-rod trade and considering supporting these operations with steel capacity and blast furnaces. One of the main rail makers, Lackawanna, having decided to move operations from Scranton, was now constructing a new works on a greenfield lakeshore site just south of Buffalo. The ferment in steel also threatened the good order of the railroad business. Carnegie was actively planning new lines to release him from the Pennsylvania Railroad. At the same time he vigorously criticized it for high freight charges that made it difficult to continue to deliver structural steel into Chicago at a time when Federal had decided to spend $10 million to build its own structural steelworks.18
Trade conditions worsened in the latter half of 1900. As this happened, prospects of large additions to iron, steel, and rolling-mill capacity from established and new companies, through backward integration by finishing groups or through forward integration by steel makers, threatened general demoralization in an industry already marked by gross overcapacity. Uncertainty was increased by the acknowledged terrifying abilities of the Carnegie Steel Company. Two weeks after the public announcement of the Conneaut tube-mill project, Charles M. Schwab, that company's young, able, and aggressive president and Andrew Carnegie's heir apparent, sent his chief some statements outlining the financial, raw material, and capacity situations of their own operations and those of their leading rivals. The figures came with a covering note, which emphasized not only Carnegie's own present commanding position but also how it seemed likely to improve still more. "I really believe that for the next ten years the Carnegie Company will show greater earnings than all the others together. . . . I shall not feel satisfied until we are producing 500,000 tons per month and finishing same. And we'll do it within five years. Look at our ore and coke as compared with the others. If you continue to give me the support you have in the past will make a greater industry than even we ever dreamed of. Am anxious to get at Conneaut. Are pushing plans rapidly and will be ready for a start in the spring."
Under such conditions it was natural that industry leaders talked of amalgamations. The amazing thing was that until a late date no one seems to have contemplated an association anywhere nearly as wide as that which eventually took shape. When this happened a positive, forward-looking emphasis could at last be added to what might otherwise have been merely a larger version of an often-repeated defensive action. Naturally, such an outcome would owe much to the disposition of the principal characters involved. They were responding to a situation for which no one of them had been responsible, though some of them had played important parts in shaping it. Some saw possibilities where most saw none, few, or even disaster, but a few proved to have the organizing power and financial acumen to transform visions or vague schemes into reality. To attain any happy outcome required a catalyst. In the circumstances of the time, it would involve not only a persuasive idea but also a forceful proponent and much patient analysis of practicalities.
The leading actor so far in the industry was to play no subsequent part in the drama. During 1900 the readiness and vigor with which he was prepared to fight old, new, or reconstructed competitors alike had belied Andrew Carnegie's sixty-five years. Though sentimentally attached to the industry so that his attitude to major restructuring for years varied according to his mood, by this time he was generally willing to contemplate retirement from active involvement in steel. This would enable him to devote much of his time to the distribution of the riches his controlling interest in Carnegie Steel would bring him if it became part of a major public company. For some of the others who negotiated and planned for a wide amalgamation, the hope of securing Carnegie's elimination from the trade was a prime incentive to carry the work through to completion. J. P. Morgan was the next most important influence, though largely as impresario rather than performer. A main concern was the maintenance of orderly business and thereby of the conditions under which the companies in whose formation he had already been involved -- Federal Steel, National Steel, and to a smaller extent American Bridge -- could become firmly established and financially successful. In his recent pugnacious mood, Carnegie had proposed to build new railroads to free his company from dependence on trunk-line operators. This would strike at another key sector in which Morgan was involved. Below these two principals, future prospects for the greater number of those men already occupying prominent positions as presidents or directors of finished product or primary steel companies were tied up with the wider framework of planning and negotiation. If their concerns were merged into a larger group, they could expect big financial rewards.
As early as 1899, as the product groups were taking shape, there had been schemes for the combination of considerable sections of the industry. Elbert H. Gary, with whom Morgan was involved in the formation of Federal Steel, was said to have afterward urged the banker to purchase Carnegie Steel. There were various vague ideas for linking Federal and Carnegie. In spring that year there was a scheme, which nearly came to fruition, for cooperation between the Moore group, which had promoted a number of the product groups as well as National Steel, and certain of the Carnegie top management, notably Henry Phipps and Henry Clay Frick. Together they planned to buy out Carnegie and float a reconstructed Carnegie Steel as a major public company, with Frick taking over Carnegie's top place. One after another such projects were mooted; followed up by a flood of rumors, hopes, and fears; and then failed to materialize. The following year, Carnegie Steel was reconstructed, but Frick was expelled from active involvement. The company retained its partnership status and prepared for keener competition ahead, in a business that it seemed would continue to be dominated by the cut and thrust of the survival of the fittest. At this critical time of darkening prospects, yet another way out was first tantalizingly outlined and then assiduously persued.
For more information about these books, you may wish to check out the reviews found at the following URLs.
The University of Pittsburgh
Wealth, Waste, and Alienation
END OF ENTRY #4 -- Go back to the first page of "Karen's Branches"