by Sally Denton
A particularly gruesome blasting accident underscored the lack of workplace safety, drawing the ire of Nevada state officials who cited Six Companies for illegal practices such as using gasoline-fired engines in unventilated spaces. Claiming the job site was effectively a federal reservation and not a mining operation, Bechtel and his partners contended it was “exempt from the prying attentions of state mining inspectors.” The group did not carry liability insurance, and Dad Bechtel “showed up in Las Vegas with a corporate attorney bobbing in his wake,” according to one account, to settle all accident claims “quickly, quietly, and privately.” They would furtively settle at least fifty cases of carbon monoxide poisoning.
Still, the Big Six could not keep the horrendous working conditions secret from the outside world, and the situation drew the attention of the once formidable, now besieged, Industrial Workers of the World. Once the most powerful labor union in the American West, its membership rapidly declined during the 1920s as it became a hotbed of radicalism. Headquartered 1,700 miles away in Chicago, the Wobblies began agitating, and by August 1931, more than two-thirds of the workforce threatened to strike. Their grievances were notable for their rudimentary benefits: free ice water, helmets instead of crude baseball caps boiled in tar, payment in real money rather than the scrip negotiable only at the company store. “We feel it’s a crime against humanity to ask men to work in that hell-hole of a heat at Boulder Dam for a mere pittance,” the American Federation of Labor (AFL) wrote to the US secretary of labor. Workers claimed they were underpaid compared with laborers throughout the Southwest. They were charged half their wages to live in unsanitary conditions in the company town. Indeed, although the government contract estimated wages of $5.50 a day, workers were paid an average of $4. Meanwhile, racism and anti-Semitism were rife, and Asians and African Americans were barred from employment. Bechtel and his partners blamed the workers’ dissatisfaction on outside Communist rabble-rousers, and the Hoover administration was obsequious toward the contractors. “They will have to work under our conditions or not at all,” W. H. Wattis told the San Francisco Examiner. Crowe stood firm against his disgruntled men, and the strike collapsed for lack of support from either the state of Nevada or the federal government.
In the November 1932 presidential election, a whopping 78 percent of voters registered in Boulder City cast their ballots for Franklin D. Roosevelt. “In the town that was building a great monument to his name, Hoover had been trounced by a margin of more than three to one,” wrote Hoover Dam historian Joseph E. Stevens. Word of FDR’s victory spread like wildfire through the construction site, as workers rejoiced, shouting, “He is elected!”
Harold L. Ickes, FDR’s newly appointed interior secretary, who was a progressive former newspaperman, wasted no time in challenging Six Companies’ appalling labor practices. He launched a federal investigation into the workers’ complaints. In response, Dad dispatched his acolyte Henry Kaiser—the consortium’s de facto lobbyist—to Washington, DC, to oversee a public relations blitz and deflect Ickes’s criticism. Kaiser’s whirlwind speaking tour and media campaign gained national attention, as he flooded members of Congress, newspapers, and government officials with press kits and propaganda including thousands of copies of a hastily published book about the dam—what was described as a “crisis-filled narrative called So Boulder Dam Was Built.” Ensconced at the opulent Shoreham Hotel, Kaiser “coaxed and manipulated, grandstanding his way toward successful appropriations, contracts, and loans,” wrote Wiley and Gottlieb. Undeterred by what he called “a telegraphic bombardment,” Ickes ordered Six Companies to pay its workers in dollars, charged it with seventy thousand violations of the eight-hour day, and fined the group $350,000. But Kaiser’s Washington glad-handing paid off, and the fine would eventually be reduced to $100,000.
“Flooded gorges and an unsavory company town led to more than a hundred dead, violent labor unrest, and bloody racial bigotry,” one history drew the final conclusion. Still, Six Companies made a profit of more than $10 million, and Dad had gained a national reputation as a rough, often callous, operator.
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“This is a good time to see what the rest of the world is doing,” Dad told his partners in the summer of 1933, claiming to have been invited by Joseph Stalin’s government to visit the Union of Soviet Socialist Republics (USSR). Now that he was suddenly the most famous builder in the world, the Soviets supposedly sought his expertise. Hoover Dam was not yet completed, but he felt confident he could leave the project not only in Crowe’s capable hands but also in those of his three sons now installed on the job.
Given Bechtel’s—and Six Companies’—rabidly antilabor, anti-Communist, anti-Socialist corporate culture, it seems implausible that Stalin would invite Dad to visit Russian technological sites. The United States had not officially recognized the Soviet Union since the US intervention against the Bolsheviks in their 1917 civil war. All that would soon change, thanks to FDR, who, in a few months, would formally acknowledge Stalin’s Communist government and dispatch the first American diplomats to Moscow since the coup. Still, the United States had no certified representation in Russia during the summer of 1933, so Bechtel’s mission as the first American contractor to inspect the Soviets’ great dams and subways was momentous, at the least, for its lack of institutional protection.
In the midst of an infrastructure offensive, the Soviet government was rapidly building hydroelectric dams throughout the country. Dad was eager to inspect its handiwork and consult with that government’s top scientists and engineers, according to the company’s history. Of particular interest to him—and presumably to the US government as well—were the recently completed Dnieprostroi Dam near Kiev, the renowned Magnitogorsk dam in the Ural Mountains, and, especially, the fabled Moscow subway.
In early August 1933, accompanied by his wife and daughter, Dad set sail from New York City bound for France and then on to Austria by train. He left Clara and Alice in Vienna—apparently under instruction from Soviet authorities that he travel alone to the Russian capital. Once in Moscow, he spent three productive days and nights at the historic National Hotel near the heart of Red Square and the fortified Kremlin. He got on well with his Russian hosts, by all accounts, but on the fourth night before he was to depart for Kiev, he died suddenly in his hotel room from what the New York Times described as “an overdose of a medicine which he had been taking for several years on doctors’ orders.” Just fifteen days shy of his sixty-first birthday, the legendarily tough and robust Bechtel fell into what his family would later characterize as a diabetic coma from an insulin overdose. “Fumbling with a syringe, he injected himself with insulin, something Clara had always done,” according to one account of the death. “Whether through unfamiliarity or grogginess,” he gave himself too much and slipped into death on the night of August 28, 1933.
Meanwhile, his stunned widow and daughter were stranded in a foreign country a thousand miles from Moscow. The frosty American-Soviet relations made it nearly impossible for the family to retrieve Dad’s body. According to the Bechtel version of events a well-connected Austrian count named Zucatur who had become enamored with the twenty-one-year-old Alice during her brief stay in Vienna. Zucatur had reportedly been on the verge of proposing marriage at the time of Dad’s death—after just a three-day tryst, according to family lore—and although the romance fizzled, Zucatur was able to intercede to get Dad’s body transported back to Oakland for burial.
Warren A. Bechtel—along with the Wattis brothers—was among the three founding fathers of Six Companies who didn’t live to see the completion of the dam. For the surviving founders, the dam’s dedication marked the creation of an epic international empire that would enrich them all beyond any notions. With an unprecedented building organization, an unparalleled inventory of modern technological equipment, and the crowning achievement of what was being called one of the greatest feats of mankind, the Six Companies men were unmatched in their position as the earthmover
s of the world. Leading the way for the Bechtel family firm would be the middle son, Steve, who, after a brief power struggle, became president. The company’s assets would soon mount into the billions, its projects emerging on every continent.
Behind it all would be the legacy of Hoover Dam. Steve would trace Bechtel’s tremendous success to its roots in Nevada’s Black Canyon. “Coming at the time it did, [Hoover Dam] was very important,” he told an interviewer in 1984. “It put us in a very prime position . . . as being [regarded as] big-time thinkers, real thinkers.”
CHAPTER FIVE
Wartime Socialists
“Warren Bechtel was a very successful businessman. But the man who really dreamed great dreams and put them into effect was Steve,” said a close colleague. Destined to lead the company—as much by default as ability, given his siblings’ personality disqualifications—Steve was exceedingly smart, determined, confident, and driven. In contrast, his brother Warren Jr. was “aggressive, boisterous, charming—the archetypal hail-fellow-well-met,” as one account described him, who enjoyed both whisky and women to excess. Though Dad’s firstborn Warren Jr. was the obvious heir apparent, as well as his father’s favorite, he lacked the resolve and intensity to oversee the next phase of the Bechtel empire. Third son Kenneth’s reserved temperament was also unsuited for the rugged world of construction. Although he was the most studious and contemplative of the three sons, and might have been a natural leader as a result, his disdain for his father’s partners and employees was off-putting to company insiders.
The sons owned equal shares of the company—Dad had given them each 5 percent upon incorporation in 1925 of W. A. Bechtel Co.—but Steve had pushed for more, against Dad’s objections. At the time of Dad’s death, lawyers were preparing for a legal battle. But Warren and Ken deferred to the more tenacious Steve, and named him president of the company. “They wanted me to lead, and naturally, I was glad to do it,” he told an interviewer somewhat disingenuously.
Born on September 24, 1900, to Warren and Clara, Steve was the second of their four children. He was “on the job from infancy,” the New York Times reported, “living with his family in make-shift railway carriages on rugged construction sites as he grew up on the Pacific coast.” He graduated from Oakland’s Technical High School in 1916 and shipped out with the US Army’s Twentieth Engineers Expeditionary Force to serve nineteen months in World War I—“burning up the French countryside as a motorcycle dispatch rider,” according to a company profile. Upon his return in 1918, he enrolled at the University of California at Berkeley, intending to study engineering. But his college career was tragically cut short during his sophomore year. In the fall of 1919, the car he was driving struck three pedestrians, killing a mother and daughter and seriously wounding the survivor.
Steve was traveling to a dance at the Claremont Country Club with a carful of classmates when his speeding car hit a local dentist, H. G. Chappel, his wife, Jessie, and daughter, Elizabeth, on November 8, 1919. The car skidded 136 feet after the collision, Oakland police reported. Although Steve was arrested and charged with manslaughter, he was never prosecuted.
“The incident, which the Bechtel organization would go to great pains in later years to cover up—including, for a time, concealing the fact that Steve had even attended Berkeley—was, according to friends, a deeply scarring one for Bechtel, and accounted for much of his subsequent obsession with secrecy,” wrote McCartney. Despite the seriousness of the accident, the charges were dismissed. “There was no explanation, either then or later, why Bechtel was not prosecuted.”
Soon after, he dropped out of college and joined his father’s business, punching rail lines and highways through the California wilderness. In 1923 he married Laura Adeline Peart—a fellow student he had met at Berkeley—and they moved across the hall from his parents in the swanky Art Deco apartment building that Dad and his partners had built near Lake Merritt in Oakland. Decades later, in 1998, Time magazine portrayed him as a visionary who as early as the 1920s foresaw an American expansion into energy and turned his company toward pipeline construction. By the time he was in his midtwenties, he was managing all of Dad’s rapidly expanding pipelining projects, and even “went east to talk to the Continental Gas people” about bidding on a 1,500-mile gas line from Tracy, California, to Crockett, Texas, according to company reports. “As a newcomer from the Far West, he had to do some first-rate selling.”
But it was his position as chief administrator of Six Companies that gave him the proficiency to transform Bechtel into the world’s largest contractor. Second in rank only to the indomitable Frank Crowe, Steve gained a reputation on the job site for ruthlessness and precision. His farsightedness was opportune, informed as it was by his wartime experience in France. He was “more sophisticated and worldly than his father, who, for all his success, was, at bottom, a knockabout earth-mover who threw up dams and gouged out mountains to make way for the roads and railways, never thinking much further ahead than the next job,” as one account explained the difference between father and son.
“The ancient Western dream of an advanced industrial economy controlled at home and able to compete nationally is brighter now than it has ever been,” historian Bernard De Voto wrote in a 1946 Harper’s essay about the modern-day miracle of the Six Companies consortium. From Hoover Dam on through World War II, Bechtel and what Fortune magazine called the “lusty, uninhibited men” of Six Companies—sometimes individually, sometimes together—pursued a moneymaking, precedent-setting confederacy with the US government. By the end of the 1930s, following political turmoil in Europe, the federal government began focusing on national defense, and Six Companies would transition from earthmovers and dam builders to industrialists with billion-dollar defense contracts. Of all the Six Companies principals, Bechtel would be positioned to profit the most handsomely, landing the lucrative shipbuilding contracts that would make Steve a central figure in the American war industry. In the early 1940s, Bechtel and his associates thrust themselves into the top echelons of America’s shipbuilding and steel works. Leading into World War II, they shrewdly maneuvered into the key recipients of US military contracts.
By then, the Bechtel company had reached a turning point that propelled it into the economic stratosphere. The pivotal moment came when Steve brought a college classmate into the fold. John Alex McCone was a year behind Steve at Berkeley. The two had become friends before Bechtel dropped out of school. Born in San Francisco on January 4, 1902, McCone was the scion of a Scotch-Irish family that had been in the machinery business for generations, having started an iron foundry in Virginia City, Nevada. He graduated with an honors degree in mechanical engineering and went on to work first as a riveter in the boiler shop of an ironworks factory, and then as a surveyor and foreman with the steel erector crews of a construction gang. In 1931, ten years after the two met at Berkeley, McCone became sales manager of the Consolidated Steel Corporation in Los Angeles. At the time, Steve was in charge of purchasing for the Hoover Dam construction project, and the two reconnected when McCone visited him to try to sell steel to Six Companies. By the time the dam was completed, Consolidated had supplied Six Companies with fifty-five million tons of steel, insuring McCone’s swift ascension to top executive at Consolidated Steel. The men had forged a powerful personal and professional bond. They vowed to stay in touch after the dam project, and in 1937, when Steve was eager to expand his company beyond construction, he sought McCone.
“Steve’s vision was of energy—all types of it, but particularly of oil as a universal power source,” a colleague described his interests. For years, he had directed Bechtel’s pipeline construction throughout the West, and he began thinking about how California’s oil refineries depended upon pipeline engineering firms located east of the Rocky Mountains. As a steel salesman, McCone had a powerful set of contacts in the oil industry complementary to Bechtel’s own connections to Standard Oil Company of California (SOCAL) and Continental Gas dating back to the late 192
0s. What Steve foresaw was a tilt westward of the nation’s industrial complex, and he brainstormed with McCone on ways to capitalize on the shifting winds. “Steve and I shared a sense of imminent change,” McCone recalled, “of great projects about to break at last upon the West. We were sure we could have a place in them.”
They concocted a scheme that would serve as the prototype for Bechtel’s famous “turnkey” contract. For a fixed fee, the company would design a project, build it, and deliver it to the owner complete at a set date, and ready to turn the key and start operating. The concept of a negotiated contract rather than a bid contract would be the company’s signature for decades to come. It was an outgrowth of Steve’s philosophy to free the firm from competitive bidding and to control the entire project. “The client benefits because this arrangement makes possible the close coordination of engineering, procurement, and construction with the continuity needed to deliver the most plant in the least time,” Steve described it. “We like responsibility. We have organized and prepared for it, and we have scored our greatest successes when we have had control of projects in their entirety.” He envisioned a “wholly self-contained economic technical organization able to handle projects of any size anywhere, from feasibility study to finished plant.”
The two would also be credited with inventing the clever “cost-plus” model of a business contract in which the government guaranteed contractors all costs of production plus a built-in profit of 10 percent. They decided to partner in a firm that would not only seek government contracts but also market to private industry, offering the mushrooming oil companies an entire construction package. “Not just pipelines, but storage tanks, refineries—the works,” as one account described their vertical integration model. They formed the Bechtel-McCone Corporation and opened a Los Angeles headquarters in May 1937. McCone became president, and Steve, with controlling interest, became chairman. “It was a success from the start,” Steve boasted later. They soon brought in as a partner Ralph M. Parsons, a forty-year-old Chicago refinery designer and aeronautical engineer. But Parsons’s tenure would be short due to a personality conflict with the irascible McCone.