Monday, April 26, 2010

CHAPTER THREE


THE AGE OF STEEL--1870 TO 1900



The industrial world of wrought iron would undergo a revolution in the last half of the 19th century. A process for making steel directly from blast furnace cast iron was being developed at two different locations. One was at a small iron mill in Kentucky owned by two brothers by the names of William and John Kelly. It was typical for families to own and operate these small mills. But William Kelly was not the typical ironmaster. He was born in Pittsburgh and had some training in metallurgy for the iron trade. As usual they soon had a fuel problem after clearing all the timber near the plant for charcoal. With his mind on the fuel problem, William Kelly is reported to have noticed that where the air blast impinged on the molten metal in the finery the metal was whiter in color or hotter--that is the cold air was not chilling the metal but was reacting with it chemically to generate heat. Kelly immediately saw the value of this reaction as a means of converting pig iron to wrought iron. This first work was in 1847, but he was delayed in building a converter until 1851.


Kelly's intense interest in his experiments interfered with his attention to his regular iron trade. His financial backers, including his father-in-law, finally gave him an ultimatum to tend to business and stop his fool ideas on the "air-boiling process" as they called it. In fact when they found that he was secretly experimenting outside of his plant, his father-in-law had him examined by Dr. Dralfred Champion, a physician. Apparently Kelly could communicate much better with another technically trained man than with his family, backers and neighbors; for he convinced Dr. Champion on the merit of his process. In fact later Dr. Champion would be one of the witnesses for Kelly during an interference ruling at the Patent Office on Bessemer's American patent application.


About this time Kelly moved his experimental operations to the Cambria Iron Company in Johnstown, Pennsylvania the company where Daniel Morrell and John Fritz were laboring to develop the three-high mill to roll wrought iron into rails. He received his patent in 1857, just as a financial panic occurred in this country and Kelly, along with thousands of other businessmen, went bankrupt.


He sold a controlling interest in his patented process in 1861, and two years later a company was formed to produce steel by the pneumatic process. This company, the Kelly Pneumatic Process Company, had as principals Captain Eben B. Ward of Detroit, Z. S. Durfee of Mass., Daniel J. Morrell of Cambria Iron Co. and Kelly with a minority interest. Captain Ward was instrumental in building a pilot plant in Wyandotte, outside of Detroit and William Durfee, cousin to Z. S. Durfee, one of the principals, supervised the operation to produce steel. At this point the operation developed the same quality problem that plagued Bessemer in England. Bessemer, whose name would forever be linked with this process for making steel, independently invented this air blowing method, after observing the catastrophic failure of cast iron cannon in France. All evidence indicates that Kelly had prior rights.


The second location of experimental work on making steel from cast iron was in England. During Bessemer's experimental work he had fortuitously used Swedish ore which was low in phosphorus. Later when his licensees were unable to make steel that was not brittle, Bessemer concluded that the problem was phosphorus. Robert Mushet, a knowledgeable steelmaker, showed that the addition of manganese was necessary to overcome the cracking during hot working caused by sulfur. The German iron and steelmakers had already developed a master alloy called "spiegeleisen " for adding the manganese. Thus Mushet was a major contributor to the success of the so-called Bessemer process. However, the patent situation was now in gridlock with Bessemer, Kelly and Mushet each holding a vital position in the process. At this time America was in the throes of the terrible war between the industrial north and the agricultural, slave-holding south. Government agents as well as private individuals from both sections of the country were combing Europe looking for armaments and other developments that would aid their cause. One such individual was a charismatic engineer and technical writer by the name of Alexander Holley.


Holley was born in Connecticut in 1832. His father owned a large plant for manufacturing cutlery and was the states governor in the late 1850s. Holley graduated from Brown University in 1853 and started work in railroad locomotives. For most of his short career, he died at age 50; Holley was a prolific writer of technical articles, mostly for the New York Times. On a trip to Europe to observe the latest developments in ordnance and armor plate, he came into contact with the Bessemer steelmaking process. Bessemer had a pilot plant where he was very busy in this period showing off his process to interested parties. (One such individual appears to have been Andrew Carnegie.)


Holley realized that the patent situation had to be resolved before the process could become commercial in the United States. He was successful in accomplishing this task, and he built a Bessemer steel plant in Troy, New York in 1865. In the meantime the first successful heat of steel made in the United States by this process was cast at the little plant in Wyandotte, Michigan of the Kelly Pneumatic Process Company. A plaque honoring this event has been awarded by the American Society for Metals. The ingots from this first heat were shipped to the North Chicago Rolling Mills where they were successfully rolled into the first steel rails made in America.


The release of the patent deadlock cleared the way for the development of the steel industry in this country, and Holley was the chief promoter and designer of this early activity. He constructed his first Bessemer plant at the Albany Iron Company in Troy, New York. He then constructed or consulted on nearly all the 15 Bessemer plants built by 1875. They included the very early plant of the Pennsylvania Steel Company at Steelton near Harrisburg with J. Edgar Thompson and Tom Scott of the Pennsylvania Railroad Company as principals, the Cambria Steel Company where Kelly received support from Morrell to develop the process, the first plant in Pittsburgh built for Andrew Carnegie and named for his benefactor, the same J. Edgar Thompson, plants at North Chicago and Joliet, Illinois, a plant for the Vulcan Works at St. Louis, Mo., and plants for Bethlehem Steel and Scranton Steel in eastern Pennsylvania. For his input into the development of the Kelly-Bessemer process, Alexander Holley has been called the “Father of American Steelmaking”. He was elected President of the American Institute of Mining and Metallurgical Engineers in 1876.


Unfortunately neither Kelly nor Holley ever received the recognition they deserved for their contributions to the infant steel industry in the United States. After all Kelly had the basic United States patent on the process, which he won by showing prior conception of the idea (1847). Granted his process would not have been successful without the patent of Mushet for adding manganese, but this was also the case for Bessemer. It was the railroads and the competitors in making steel rails in this country who cheated Kelly of his rightful fame. If they recognized his claims and patents, they would have had to pay royalties on every pound of steel rolled into rails. Instead they simply followed the example of the British steelmakers and called it the Bessemer process and the product, Bessemer steel. The railroads even purchased and imported steel from England before quantity production was available in this country. Since Bessemer had no patent protection here, it was to their gain and Kelly’s loss to perpetuate the myth that they were buying and making Bessemer steel. Kelly the first American to make a truly significant contribution to the Age of Steel became only a footnote in the history of the most important material of the new technological revolution. And Holley the single most important individual in developing the commercial steel industry has been long forgotten.


These early steel plants were small affairs, actually tiny, by any later comparison. Bessemer converters, as the vessel for blowing air through the steel was called, had reached only five tons by the early 1870s. Also, their supply of molten metal came mostly from remelting pig iron in separate furnaces. At this stage in America's industrialization mills were not equipped to handle large quantities of molten metal. Production of pig iron had reached 1,665,000 tons by 1870, but only 68,750 tons of this was turned into steel. The rest was still used as castings or puddled into wrought iron. But the country was poised for much greater things for iron and steel. In the next 30 years production would increase by a factor of nearly ten for iron from 1,665,000 tons in 1870 to 14,000,000 tons in 1900 and an incredible increase for steel from 68,750 tons in 1870 to 10,000,000 tons for 1900. Through the decade of the 1890s, the United States was producing a third of all the steel in the world, and half of what we produced went into railroad rails.


By 1867 steel rails were being rolled commercially at the well-known Cambria Iron Company in Johnstown from Bessemer steel made at the new Pennsylvania Steel Company plant in Steelton, Pa. Bessemer steel gradually became the material of choice for rails because it was stronger, harder and thus, far more wear-resistant than wrought iron. In the final analysis, however, it was the much lower costs for manufacturing Bessemer steel compared with wrought iron which tipped the scales in its favor. When Eads built his famous bridge across the Mississippi at St. Louis, he paid $80 a ton for the wrought iron used to enclose the steel bars, but he paid $300 a ton for the alloy steel to make the bars. The price of steel for rails in the 1890s, when the competition among the many mills was keen, reached a low of $11. This was the force behind the modern industrial growth of America--low cost steel. The single individual who is mainly associated with this drive to lower the cost to produce steel is Andrew Carnegie.


Carnegie was born in Dunfermline, Scotland in 1835 into a family of linen weavers. The decade of the 1840s saw the increase of poverty as the demand for the product of hand looms died. This poverty finally drove the Carnegies to abandon their homeland and seek a better life in America. Andrew was 13 years old at the time and had just completed five years of schooling, the full extent of his formal education. The family arrived in New York City in July of 1848, after 50 days at sea. From there they took a river boat up the Hudson to Albany and then a canal boat for the 364 miles of the Erie Canal to Buffalo. A lake steamer took them to Cleveland and from there they traveled to Pittsburgh, where Mrs. Carnegie had two sisters who had arrived in America some eight years earlier. The Carnegies were penniless. They lived on the charity of her sisters.


Both Andrew and his father finally found jobs in a local textile plant at very low pay. Andy soon found another job, which lead to clerical work, and his father quit the factory to resume work at home on the hand loom. A new opportunity arose for Andy as a messenger in the office of the O' Reilly Telegraph Company. He now was making $2.50 a week. With his eager ambition he was soon an operator, for which he received $20 a month.


After several years at the telegraph company, Carnegie became acquainted with a Tom Scott of the Pennsylvania Railroad Company. Scott was one of those self-made industrial managers for which America became famous during its Industrial Revolution. He came from eastern Pa. and had gone to work for the railroad at the late age of 27. Within two years he was made superintendent of the new Western Division bringing a single line to Pittsburgh. Scott was a frequent customer at the telegraph office on railroad business. He decided the railroad should have its own telegraph office in Pittsburgh and offered Carnegie the job of operator. For the next decade Scott would be a friend and mentor to Andrew Carnegie. Scott was promoted to General Superintendent in 1858 and to a Vice Presidency the next year. When he moved back to Philadelphia with this promotion he recommended Carnegie as superintendent of the Western Division. At age 24 with 11 years in America, Carnegie was now on his own in a management position at the lofty salary of $1500 a year.


It was during these half-dozen years that Andrew worked directly for Scott that he started to build his financial base. After a modest beginning with a $600 investment in the Adams Express Company, Carnegie next acquired a one-eighth interest in the Woodruff Sleeping Car Company. There is considerable mystery in this latter investment. Apparently Scott was instrumental in having this stock made available to an unspecified employee of the railroad in return for buying sleeping cars from Woodruff. Once the contract was signed the employee turned out to be Carnegie. In addition the dividend from the stock was sufficient to meet the monthly payments on the loan Carnegie made for the purchase. By such techniques, Andrew Carnegie, who never made more that $2400 annual salary working for the Pennsylvania Railroad, amassed a fortune of $400,000 with annual investment income of $56,000 by 1867. That year he and his mother moved to New York City to take up permanent residence in the elegant St. Nicholas Hotel.


Carnegie's early fortune was based on many investments in a variety of endeavors. He invested in the early oil boom around Oil City Pa., but usually he invested in railroads or companies allied to the railroad activity. Thus when he saw the superiority of the first iron bridge built in his division of the Pennsylvania Railroad, he induced the key men involved to join him in forming a company to build such bridges. It didn't seem to bother him that they were all employees of the railroad to whom they were selling bridges. Under Carnegies urging this investment grew from building small bridges over ravines in the beginning in 1862, to building Ead's famous steel bridge across the Mississippi at St. Louis in 1869-74. The bridge company was reorganized in 1865 as the Keystone Bridge Company with Andrew's old friend, Tom Scott as a subscriber to half the stock.


Carnegie’s first major investment in iron making was simply to supply material for his bridge company. He, with his friend Henry Miller, founded the Cyclops Iron Company in 1865. Even before it produced any iron, it was merged with a rival in whom Andrew's brother Tom had an interest. In this merger, Carnegie gained the services of Andrew Kloman, an experienced forge plant operator, and Harry Phipps, the accountant. The merged company was named the Union Iron Mills. There was a blood feud between Henry Miller and Harry Phipps which Carnegie could not resolve, except by buying out Miller's shares. This gave him controlling interest in the company, which was renamed Carnegie, Kloman and Company.


For a few years Carnegie's interests revolved mostly around telegraph lines, sleeping cars, bridge building, railroads and bond selling. He and his business associates(usually including Scott and Thompson of the Pennsylvania Railroad) would become involved in such a complex manner that their man would become the chief engineer, Keystone Bridge would get the construction contract, Carnegie, Kloman would supply the iron, Andrew Carnegie would sell the bonds on commission to finance the project and they sometimes held stock and sat on boards of the railroads who would be using the bridges. It became such a tangled weave that on one occasion the iron company received an order from a company unknown to Tom Carnegie, who usually managed this operation. When he questioned the financial stability of the customer, he was informed that Andy was one of the principals.


During 1872 Andrew Carnegie made a decision to join the ranks of the handful of steelmakers in the United States by building a Bessemer steel plant. It was to be located on a tract of land known as Braddock's Field, and his partners in this venture were old friends, such as, William Coleman and David McCandless. Carnegie convinced his associates in the Union Mills Company, his brother Tom, Phipps and Kloman, to join them although they were reluctant to gamble on this new metal, steel. He also tried to interest Tom Scott and Edgar Thomson in joining them. However, they were principals in the Pennsylvania Steel Company in Harrisburg which was already in full production making Bessemer steel rails. Interestingly Carnegie proposed to name his new steel mill after Thomson who was probably the most influential railroad executive in America, and Andrew needed the railroads as customers for his new plant.


The J. Edgar Thomson Works was constructed in 1873-75 with Alexander Holley as the engineer-in-charge. The shop contained all the improvements as a result of Holley's experience in having already constructed several other Bessemer installations. The Thomson Works was built with two Bessemer converters of 5-ton capacity each. In addition to the Bessemer converters, Carnegie included two Martin-Siemens open-hearth furnaces, also of 5-tons each. These latter furnaces had been developed in Europe about the same time as the Bessemer converter. Unlike the Bessemer which could refine a heat of steel in minutes with no added fuel, the open-hearth required many hours of processing by an outside heat source. However, over time the open-hearth would demonstrate advantages which would eventually allow it to replace the Bessemer process. It is surprising to see open-hearths in the initial construction of the Thomson Works, because they would not become of major importance in the United States steel industry for another generation. They were used in the Thomson Works to make small quantities of higher quality steel when the customer would pay a premium, which was not very often in the early days of steel-making. If quality was needed, it was still believed that wrought iron was the material of choice. While wrought iron was not as strong as steel, it did have the reputation of being more reliable. This was not just the conservative reluctance to try something new. Experience in using Bessemer steel was revealing its tendency to fracture on unexpected occasions. It is for this very reason that Eiffel constructed his great tower in Paris of wrought iron as late as 1886.


Andrew Carnegie was twice blessed in hiring Holley as his engineer on the Thomson Works for he got two great steel men with the bargain. Holley had been a consultant on the new Bessemer shop at Cambria in Johnstown, Pa. Here he worked with a Captain William (Billy) Jones who was an assistant to George Fritz, the general superintendent. (George Fritz was a brother to the John Fritz who had earlier developed the three-high rolling mill at Cambria.) George Fritz died in early 1873 and Billy Jones resigned when he was not promoted to Fritz's job. He contacted Holley who hired him as his assistant on the Thomson Works. When the construction was finished Carnegie hired Jones as the general superintendent. Jones became another in a long line of very top quality men that Carnegie would attract in forging his great steel empire.


Carnegie's plant construction was just getting underway when there occurred the most severe economic downturn in the history of the country up to that time. As usual Andy had most of money in hand to build the mill, but he still needed the banks to complete the job. The financial panic of 1873 made it impossible to raise that amount of money in this country so Carnegie and Holley journeyed to London to see his old friends at Morgan and Company. The $400,000 was borrowed based on the data furnished by Holley on the low cost of making steel at the Thomson Works. The profits would repay the loan in the first year.


During this period when the Bessemer shop was being planned at Braddock, Carnegie was also involved in building a blast furnace for the Carnegie, Kloman and Company. This blast furnace was built in Pittsburgh and was designed on British practice of one large furnace instead of several smaller ones to save on fuel. It was named Lucy after Tom Carnegie's wife. It was 75 feet high and 20 feet in diameter at the bosh line, and was designed to produce 350 tons of molten metal a week.


A similar furnace was built a short distance away by a group of small manufactures of cast iron and wrought iron products. This furnace was called the Isabella. The crews of these two furnaces soon engaged in fierce competition on production quantities. This type of worker rivalry is unknown today, but was a point of pride in past generations. It is the basis of our worker folklore, such as, John Henry, Paul Bunyan, etc. Week by week the crews increased the production above the design limit of 350 tons. They reached 500 tons in a few months, 600 tons in a year and by the end of a decade these two furnaces were producing over 1,000 tons a week. This greatly increased production was not only a matter of furnace crew activity but also exhibited the improved blast-furnace engineering technology and maintenance. The blast furnace was forced to keep up with the ever ravenous appetite of the newly built Bessemer converters.


Carnegie built a second Lucy furnace in the late 1870s, and followed this with two new furnaces at the Edgar Thomson Works in Braddock a few years later. Nearly all of this increased production was still going into railroad rails. Carnegie had many contacts within the railroad industry and he used this influence to promote his product. There was plenty of competition, however, as the other rail producers fought back; but no one had the intense drive for low-cost and the returning of profits into the business that were the number one priority of Carnegie. Since he held controlling interest in the various operations of his steel-making empire, he dictated the use of profits. While other steelmakers paid large salaries and expense accounts, Carnegie held his top management to $5,000 a year and a share in the company. His men became wealthy in stock which paid little or no dividends, and the only way they could get their money out was to sell to the remaining owners at the original price. Andy had them locked in. Eventually he would loose many of his good management men and even drive out most of his partners with this business philosophy. Of course Carnegie, his empire and all those management men who remained were the final beneficiaries, and ultimately there was plenty of money to share.


The one exception to Carnegie’s salary policy was Captain Billy Jones. Jones simply would not accept a partnership in the company. He wanted his results in his paycheck, and when the General Manager, William Shinn, was forced out of the company for looking elsewhere for employment and tried to take Jones with him, Carnegie offered Jones whatever salary he wanted. Not being greedy, Jones requested $15,000. Carnegie replied by increasing it to $25,000, the same as that of the President of the United States. That year of 1881, the Thomson Works produced over 160,000 tons of rails. Also that year Carnegie reorganized his empire as Carnegie Bros. and Company, Ltd. with a capitalization of $5,000,000, and the company made $2,000,000 profit.


Carnegie made this one and only salary exception in the case of Jones because Jones was a truly unique manager. He came from the same mold as John Fritz. He had little formal education and was apprenticed at the very young age of 10, where he learned foundry and machine shop work. He knocked around at various jobs and eventually went to work at Cambria Iron Company where he came in contact with John Fritz and even William Kelly. Jones joined the Union Army shortly after the Civil War got underway. His experience and maturity won him a commission and he was mustered out as a captain at the end of the war.


He returned to Cambria where he became an assistant to the General Superintendent. His resignation and hiring by Holley and later by Carnegie has already been described. Jones was a mechanical genius, and a true friend of his workers. His patented inventions were a major factor in the great advances of the steel output of Carnegie's empire and of the industry in general during the 1880s. One item alone, the hot car transfer ladle, which could move molten metal from the blast furnace to the Bessemer converters and the open hearth furnaces, eliminated the need to remelt pig iron to make steel. His royalties from his many patents were earning him $15,000 annually during the late 1880s when his salary by now was $35,000.


His reputation was world-wide. He was the first American invited to visit the great Krupp Works in Germany. His greatest legacy, however, was as a leader of men. Undoubtedly his experience leading soldiers was the basic training ground for his concern for his men. Even though he followed Carnegie's commands to get the most possible out of labor, he was the only manager to resist when the demands became excessive. Captain Billy Jones was killed in 1889 at the age of 50 when a furnace exploded. His death was a shock to his fellow workers, to the whole steel industry and to the city of Pittsburgh. Steelmaking is said to have ceased while the city mourned at his wake and attended his funeral. Capt. Billy lived for his work and for his men. Now that both are long gone, his name is forgotten. He deserves better.


In the late 1870s the Thomson Works produced more Bessemer steel than the rail mill could consume. This lack of balance between major processes has always been a problem in the steel industry. However, at this time Carnegie was able to sell the excess ingots to Pittsburgh area manufactures who were just switching over from wrought iron to Bessemer steel. As the Braddock plant improved the output of the rail mill so as to consume this steel in-house, Carnegie abruptly cut off his former ingot customers. With nowhere else to turn, they made plans to build a Bessemer plant of their own. As fate would have it they found Carnegie's embittered ex-partner, Andrew Kloman to build and manage the plant as a part owner. Kloman of course built a more modern plant than the Thomson Works, and in addition built his own rail mill next door. He was out for revenge. This plant was called the Pittsburgh Bessemer Steel Company and was located in Homestead, only a little downstream and across the Monongahela from Carnegie's plant.


Andrew Kloman died before the plant was completed and subsequent managers were faced with labor problems that plagued the operation. When the next in a series of recessions hit the rail steel market, the disgruntled owners approached Carnegie to see if he would buy their plant. He was happy to acquire the most modern rail mill in the industry and to eliminate a competitor at the same time. In addition he had obtained a mill that could roll structural beams, which were to become the next product of importance in the coming age of technology. Only later would Carnegie have any regrets at buying a mill that was riddled with labor problems. This new acquisition was called the Homestead Works.


The steadily increasing production of iron and steel in the Monongahela Valley of Western Pennsylvania soon exhausted the local sources of iron ore, especially the low-phosphorus type needed for the Bessemer converters. It was not the availability of ore that drove the industry to build in the Pittsburgh area, but rather the world's greatest source of coal for making excellent coke. The coal underlies vast regions of Western Pennsylvania, West Virginia and Ohio, but nowhere is the quality of coal for making metallurgical coke better than the coal around Connellsville, just southeast of Pittsburgh. When the era of making iron with charcoal ended, then these coal fields, with their beehive coke ovens, became a major game in iron making. And the major player in this game was a young Pennsylvanian by the name of Henry Clay Frick.


Frick was working as a clerk in his maternal grandfather’s distillery (they made the famous "Old Overholt" rye whiskey named after his grandfather, Abraham Overholt) which was located in the heart of the coal fields. He had a cousin who had gotten into the coal and coke business some years earlier, but the lack of demand (this was before any Bessemer converters had been built) and competition made it unprofitable. The cousin convinced Frick to join him in saving the business. Frick believed that the operation was too small and that an expansion was necessary for success. He borrowed money from his relatives, especially his wealthy grandfather, to support this very questionable venture.


Like so many successful entrepreneurs, Frick was very lucky. Just as he was expanding the manufacture of coke, Carnegie was building his Thomson Works and his Lucy Furnace. Carnegie thereby became one of Frick's most important customers. Frick expanded to supply the coke as iron making grew in the Pittsburgh area throughout the 1870s. Frick reorganized in 1881 to raise capital, and Carnegie bought a small interest in the company. However, Andrew was never one to remain a small shareholder if the business was successful. Within several years he bought out some of the other shareholders, and the next time Frick needed capital for more expansion he sold even more stock to Carnegie. Thus, the controlling interest in the Frick Coke Company passed to the Carnegie Bros. Company.


Tom Carnegie, Andrew's younger brother, was managing the company after Shinn was forced out. Tom did not have the instinct for the juggler that Andy had, and the heavy responsibility took its toll--he became an alcoholic. In late 1886 both Tom and Andy had serious health problems. Tom had developed pneumonia and Andy had contacted typhoid fever. For awhile it was believed that neither would survive. Andy pulled through, but Tom died. It was after Tom's death that Andrew enticed Frick into the steel company to be the General Manager. Thus began the team of Carnegie and Frick that would complete the steel empire that had been slowly growing during the past 15 years.


Once more a group of Pittsburgh manufactures attempted to build their own Bessemer steel plant in the late 1880s. Again they were hampered with problems similar to those of the Homestead plant--finances, labor, and Carnegie's devious rumors regarding their poor quality steel. Henry Frick took it upon himself to bargain for this new plant with all of its updated equipment. He finally made a deal for $1,000,000, and the plant was named after the town where it was built--Duquesne. Carnegie's empire now contained three major steel mills (Thomson, Homestead and Duquesne), the Lucy Furnaces, the Frick Coke Company, The Keystone Bridge Company and a variety of small mills, mines and coke works. It was the largest steel operation in the country. Within a few years (1892) the output of the newly organized Carnegie Steel Company would exceed half that of all the steel industry of Great Britain. It was a $25,000,000 company with profits averaging 20%. It was the heart of industrial America, and Andrew Carnegie owned over half of it.


However, the year 1892, was to go down in history for the great strike of the Amalgamated Association of Iron and Steel Workers at the Homestead Works. The whole iron and steel industry awaited the outcome of this settlement--it would set the scales for the other producers. This was the first bargaining with the Association for Frick, and he was determined to break the union. To insure control of the situation should force be needed, he made arrangements for 300 guards from the Pinkerton Agency to be available. Frick then rejected the first proposals submitted by the union and offered terms of his own that he knew would be unacceptable. The contract deadline arrived and Frick started to close the plant to shutout the workers. Both the skilled union workers and the nonunion unskilled workers walked out.


When the local authorities were intimidated by the laborers who were joined by the whole town of Homestead, Frick sent for his Pinkerton force. These 300 armed, uniformed guards came down the Monongahela in two steel barges and attempted to land at the Homestead plant. The workers lined the riverbank and the guards were met by a hail of gunfire. The battle raged all day but with few casualties. Late in the afternoon the guards surrendered and the union leaders promised them safe passage out of town. However, when they came ashore they were attacked by all the residents of town and had to run a gauntlet as dangerous as any the white men were forced to run in the days of Indian warfare. The men, women and even children unleashed a fury that killed three of the guards and injured all the rest. Several days’ later 8000 troops of the state militia arrived to take over the plant and return it to management.


Frick offered to take most of the workers back on his terms. When they still held out, he hired strikebreakers to take their places. Gradually many of these men rejoined the Homestead Works, but they were forced to work under worse conditions than before. Labor relations and worker morale never recovered in this plant of the Carnegie Empire. Ironically, a complete outsider to the strife walked into Frick's office a few days later and shot him twice before he was subdued. Frick survived this attack on his life, but his reputation as well as that of Carnegie would never again ride so high within the industrial and political scene.


The 1890s were a time of rapidly increasing steel production, except for another time of financial panic beginning in 1893. It was a time of change, too. The railroads still were the biggest customers, but their activity was peaking. They had completed the major rail lines in the country, and their needs were largely for improvements and maintenance. Steel was being tried in many new applications where it permitted breakthroughs in engineering and construction. One such area was the newly developing skyscrapers. The 1890s saw such buildings going up in Chicago, the birthplace of these structures, Saint Louis, Buffalo, New York City and other rapidly growing population centers. The cost of steel had now been driven down by Carnegie and his competitors to the lowest the world would ever see. This was accomplished by every tactic available to an unregulated society, including importing vast numbers of foreign workers in order to drive wages to barely survivable levels. This was the era of the "robber barons". These were the times when you eliminated as much competition as possible--by crushing them and driving them out of business, by buying them out (Carnegie) or by creating pools to share the orders ( Carnegie and the Bessemer producers). But what they all needed was rapid growth in new markets. And this is what they got because they were standing on the threshold of the "American Technological Revolution".


This new revolution had already started in some areas because it filled a need from the older "Industrial Revolution". The Bessemer process made steel available for the railroad industry, the discovery of oil supplied fuel for lighting( kerosene) and industrial lubricants just when whale oil was becoming scarce and something that Americans rarely acknowledge, the "land grant colleges" of the great Midwest were established with their emphases on agriculture and engineering. Also the groundwork had already been laid for several brand new technologies that would revolutionize life in the next century, the 20th.


The first of these new technologies was electricity. It had been studied for over a half a century and laboratory devices had been built in the form of batteries, generators, motors, measuring devices, even electroplating was in use as an industrial process. By the 1880s, however, Edison built the first power plant at Pearl Street in New York City and provide the first commercial electricity for consumer lighting. The availability of electrical power and the electric motor would become as revolutionary in the new century as did the steam engine in the previous one.


The invention of the internal combustion engine would produce technologies in the 20th century that would rival the electric age and doom steam power for almost all applications, except producing the electricity itself. The auto, the truck, the bus, the farm machinery, the airplane, they all rely on this one form of power based on the burning of oil in the form of gasoline, kerosene or diesel oil.


All of this, however, was in the future for industrial leaders of the 1880s and 1890s. Their contribution to this coming revolution was to begin building what we today call the infrastructure for launching this new age. The steel age was underway, the oil industry with refineries and even pipelines was in place, the construction industry was becoming used to longer bridges and higher buildings, and the United States Navy was ready to start a massive program for modern dreadnaughts.


It was at this critical juncture in American history that Andrew Carnegie decided that he had taken his steel empire about as far as he was going to go. He was 65 years old, and his lifelong philosophy had been to turn away from money making for its own sake in order to do something more useful with his life and his fortune. He had also been frustrated in convincing his associates and board of directors in going beyond steel itself and turning the metal into finished products. The last few years he had been engaged in an ongoing battle to convince them that the future growth lay in producing the very items that his own customers made and for which they bought his steel. In any case at Frick's suggestion, he agreed to entertain offers for his interest in the steel empire that had taken over 25 year to assemble. He sold to J. P. Morgan of Wall Street fame who folded Carnegie’s company into a new corporation named United States Steel.







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