Perhaps the most significant of these was the “Jones Mixer,” an enormous vat that could hold as much as 250 tons of molten pig iron delivered from various furnaces. The device allowed for the holding and redistribution of molten iron without the need for reheating; given the tremendous amounts of fuel required in heating, the Jones Mixer eliminated one of the most expensive operations in the traditional steelmaking process.
When Henry Phipps began to review the papers left in Jones’s files, the magnitude of the company’s loss began to sink in. Two days after the Captain’s funeral, Carnegie representative George Lauder called on Jones’s widow and reached an agreement to purchase all of Jones’s patents for $35,000. No one could ever put a dollar figure on the value of those inventions to Carnegie, but as biographer Joseph Frazier Wall put it, the acquisition was more than a bargain, and rivaled the significance of the Duquesne works acquisition the following year.
The tragic death of Jones introduced yet another legend-to-be into Andrew Carnegie’s inner circle when, desperate for a replacement, Carnegie appointed to the position one Charles Schwab, the twenty-seven-year-old superintendent of his Homestead works. A former general-store clerk who was uncharacteristically jovial for a budding industrialist, Schwab (no relation to the modern-day stockbroker of the same name) had been hired by Jones personally. The Captain, who patronized the grocery store where the then-seventeen-year-old Schwab worked, was taken by the young man’s cheerful manner. When Schwab declared that although he didn’t know a thing about steel, he would nonetheless make a fine employee, Jones hired him as a stake driver for E.T. on the spot, and the good-natured Schwab was soon the Captain’s personal assistant, carrying messages on a regular basis from Jones to Carnegie, who also found Schwab’s lighthearted demeanor a tonic. With a temperament that made him a favorite of his workmen as well as his superiors, and a willingness to accept Carnegie’s orders without question, Schwab’s lack of technical expertise posed no problem. He would be appointed superintendent at Homestead by the time he was twenty-five.
To Frick, the death of Jones, whom he had always regarded as too sympathetic to labor, provided the impetus for a move he had planned for some time. With Abbott in a weakened position at Carnegie, Phipps, and Jones out of the picture at Edgar Thomson, Frick approached Carnegie with an ambitious proposal: now was the time to reorganize his eggs into one basket, once and for all. Carnegie Brothers and Carnegie, Phipps should become one entity, Frick argued, and the new firm should be recapitalized to more accurately reflect its true worth. The latter move would permit the distribution of a small interest in operations to many of the young managers who were vital to the company’s future and thereby ensure their loyalty.
Though Carnegie was hesitant to lose the advantage of one of his companies being able to trade upon the credit of and borrow from the other, Frick pointed out that the Frick Coke Company was still in vigorous existence and could remain so, for such purposes. He went on to argue for the main object of this proposal, his own appointment as chairman of combined operations. As Frick reminded Carnegie, in a single year as head of Carnegie Brothers, he had increased profits from a little less than $2 million to more than $3.5 million. Clearly Carnegie had chosen a management genius. Why not let the genius manage everything?
In Carnegie’s mind, there appeared no argument not to, and papers were soon drawn up. The agreement would take effect on July 1, 1892, merging Carnegie, Phipps with Carnegie Brothers and Company to create the Carnegie Steel Company, capitalized at $25 million (two and a half times the combined value of the two previous entities). Andrew Carnegie would hold 55 percent of the new company’s stock, worth about $14 million, Frick and Henry Phipps would each hold 11 percent, or about $2,750,000, and nineteen other partners would each hold 1 percent. That left about 4 percent to be held in trust for future distributions to worthy partners-in-waiting, one of whom would be the willing Schwab, who had taken over operations at the Edgar Thomson works after the death of Captain Jones.
Everyone involved was happy. With Frick in charge, Carnegie could step farther away from day-to-day operations, and the other partners could rest assured that their interests had nowhere to go but up. As for Frick, he had managed to beat the odds and the grim scenario Carnegie had painted upon his entry into the company, rising from the apex of one industry to become the chief operating officer of the largest and most powerful steelmaking company on earth, all in the space of a decade.
There they were, then, the toasts of not only Pittsburgh but the entire industrialized world: Schwab, Carnegie, and Frick, poised for passage to yet another level of accomplishment on July 1, 1892. It was to have been such an auspicious date.
And so it was, but for far different reasons than any of them anticipated.
PART TWO
BLOOD ON THE RIVER
Angry strikers force the Pinkertons to “run the gauntlet” following their defeat in the bloody Battle of Homestead. The rendering is from the cover of a popular national magazine of the day. (Rivers of Steel Archives)
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STRIKE THREE
AT THE 1889 DEDICATION of the beautifully designed Braddock Public Library—a sprawling sandstone structure more aptly described as a community center, complete with auditorium, swimming pool, and spacious reading rooms—Andrew Carnegie had capped the ceremonies with this observation to the assemblage, many of them the laborers to whom this building was his gift: “Believe me, fellow workmen, the interests of capital and labor are one. . . . I hope you will remember this hereafter and treat me with proper respect as one of the great guild of those who labor and perform a use in the community and who upon that basis alone founds his claim to live in comfort.”
It was a typical public utterance for Carnegie, and even if some in the crowd recognized that their adoration was being demanded, many probably nodded along to his words. It was undoubtedly a lovely building, and if the workmen themselves had little time for books and swimming and lounging, perhaps their wives and children could take some pleasure there. Certainly no one in attendance would have anticipated the events of that unfortunate summer day scarcely three years later, when, according to historian Arthur Burgoyne, “The dictates of law and humanity were alike suspended.”
Not even the organizers of the only union to make headway within Carnegie’s holdings could have expected the enormity of what would transpire that summer. The Amalgamated Association of Iron and Steel Workers of the United States was, by its own description, decidedly moderate compared to most unions of the day.
Formed in Pittsburgh on August 4, 1876, the year of the Haymarket Riots, the Amalgamated combined three rather marginal local organizations into a sober-minded group that hoped to advance working conditions in the iron and steel industry nationwide, through appeals to owners’ logic and common decency, not through the tossing of bombs. The founding organizations included the United Sons of Vulcan, organized in Pittsburgh in 1858; the Associated Brotherhood of Iron and Steel Heaters, Rollers and Roughers of the United States, formed in Chicago in 1865; and the Iron and Steel Roll Hands’ Union, also formed in Chicago, in 1870. While operating separately had allowed each to focus on issues pertaining to specific mills in the three principal U.S. steelmaking regions of Chicago, Pittsburgh, and Youngstown, Ohio, it had also meant smaller treasuries, easily depleted resources, and a lack of strength in numbers more readily exploited by owners.
So it was not surprising that, galvanized by the effects of the great depression of the 1870s, officers of the three organizations agreed not only to merge their efforts, but to declare themselves a nonviolent union. As such, they agreed, they were more likely to enjoy the support of the public and elected officials than were such radical groups as the Molly Maguires. As they had hoped, the new organization was far more successful than any of its single predecessors, and while public opinion was still divided—such incidents as Haymarket suggested to many that unions were crawling with wild-eyed anarchists—the Amalgamated had as much diff
iculty within its own ranks, trying to reconcile the goals of skilled craftsmen with those of laborers, as it did with recalcitrant ownership.
By 1887 the Amalgamated was the most powerful labor organization in the steel industry, and in that year it joined with four other unions to align with Samuel Gompers and form the new American Federation of Labor, which championed higher wages and shorter working days rather than social upheaval. They were heady days for labor: by 1892, the AAISW had boosted its original membership of fewer than four thousand to nearly twenty-one thousand.
In Pittsburgh, Amalgamated officials had been particularly sanguine about their dealings with Andrew Carnegie and Henry Clay Frick, generally regarded as the two most powerful representatives of capital in the steel industry. They well remembered that Frick had been forced to give in to the demands of workers in his coke fields in the mid-1880s, and that Carnegie’s manager at the four-thousand-worker Homestead works had recognized the union as the sole bargaining agent during the highly publicized strike of 1889. As the July 1, 1892, expiration date of that latter agreement neared, union officials had hopes that the upcoming negotiations would prove even more fruitful to their rank and file.
They were encouraged when, in January of that year, John Potter, who had taken over at Homestead when Schwab moved to the Edgar Thomson works, sent word to the joint committees of the Amalgamated suggesting that the union draw up a proposed scale for the upcoming negotiations. Potter had gone on to say that it would benefit neither side for the remotest chance of a strike to disrupt operations, and there was nothing in his message that suggested that the union should expect a diminishment of its present position.
The optimism of union leaders would not hold, however, for they had underestimated Henry Frick’s long-simmering determination to rectify what he had considered a “softness” on labor within the Carnegie organization. The first of the sticking points had to do with the sliding scale. The 1889 agreement placed no ceiling on the elevation of wages tied to an upswing in steel prices, but there was a floor of twenty-five dollars written in, regardless of how far the market price for steel might plunge, a clause that the company would argue violated the concept of equal partnership. In an article written for the Pittsburgh Gazette, Frick stated his position succinctly: “We believe that if earnings based on the selling price of steel can advance without limit, the workmen should be willing to follow the selling price down to a reasonable minimum, and so this figure was finally fixed by the Carnegie Company at the rate of $23 instead of $25. We had originally asked a reduction to $22, but subsequently agreed to compromise the rate at $23.” As Frick went on to point out, the Amalgamated refused to budge below twenty-four dollars.
The second major point at issue concerned the anniversary date upon which the scale rate would be determined. The 1889 agreement governing workers at Homestead called for annual recalculation on June 30. Frick insisted that the date be revised to December 31, the same as that at Edgar Thomson, “for the reason that the change would permit us to take our estimate upon the wages we must pay during the year, beginning on January 1, so that we would be able to make contracts for the year accordingly.”
It was a purposefully circular justification, allowing Frick to skirt the real reason for the company’s desire to change the dates. During the summer months, with construction activity across the country at its peak, steel prices were traditionally high. Demand, and prices, generally reached their nadir in the dead of winter. It was a transparent ploy, of course, and another issue upon which the Amalgamated stood firm.
The final issue, the rate of pay per ton, was particularly galling to Frick. Over the previous decade, production rates at all Carnegie installations, particularly Homestead, had risen dramatically, resulting in a corresponding raise in pay for workers. The company contended that improvements to the physical plant and innovations incorporated by management accounted for the increases. In facilities where such improvements had been made, Frick was demanding a reduction in tonnage rates.
“Where no such improvements had been made, there was no request upon our part for a reduction,” he went on to say. “As a rule the men who were making the largest wages in the Homestead mill were the ones who most bitterly denounced the proposed revision of the scale, for out of the 3,800 men employed in every department only 825 were directly affected by this reduction.”
The union countered that it was the efforts of the workmen themselves that accounted for the increases, and in any case, bargaining agents were hardly about to give up what they considered a rightful share of this so-called partnership, given the difficulty of the work and the dangers that accompanied it.
As one iron “puddler” described his job: “For twenty-five minutes while the boil goes on I stir it constantly with my long iron rabble. A cook stirring gravy to keep it from scorching in the skillet is done in two minutes and backs off blinking, sweating, and choking, having finished the hardest job of getting dinner. But my hardest job lasts not two minutes but the better part of half an hour. My spoon weighs twenty-five pounds, my porridge is pasty iron, and the heat of my kitchen is so great that if my body was not hardened to it, the ordeal would drop me in my tracks.
“Little spikes of pure iron like frost spars glow white-hot and stick out of the churning slag. These must be stirred under at once. . . . I am like some frantic baker in the inferno kneading a batch of iron bread for the devil’s breakfast.” Reading such accounts lends credence to the generally accepted notion that in the steel industry, by the time a laborer reached the age of forty, he was essentially “all wore out.”
In an account published in the Homestead Local News in April 1892, while talks were ongoing, another workman described a fatal accident at the mill that was typical of the day: “When the blast is put on, it forces a terrific blaze containing particles of the molten steel, out against an iron shield. In the course of a few hours there is an accumulation of metal [referred to as “the skull”] on the shield or wall which of course is quite heavy and must be removed at frequent intervals, otherwise it would fall, which it did in this instance. . . . Passing somewhat underneath the shield is a pressure pipe. . . . When the skull fell, it struck the pipe referred to, causing the pressure to escape. Released from control, the vessel containing molten metal tipped over and emptied into the pit below where it came in contact with moisture, resulting in a terrific explosion. The metal was scattered in all directions, some of it striking the opposite wall seventy feet away. It is not surprising that many workmen were burned. Indeed the great wonder is that more were not fatally burned. The list is long enough however.”
Balanced against the feelings of workers subjected to such rigors and dangers were the positions taken by Carnegie, Frick, and their superintendents. In response to questions posed by a congressional committee of inquiry, John Potter, superintendent of the Homestead works, did his best to make management’s case:
Q: You say the workmen in that mill can turn out twice the product by reason of the improved machinery?
A: Yes sir.
Q: Than any other mill in the world?
A: Yes sir; of the same character.
Q: What do you mean by the same character?
A: The same class of mill.
Q: Well, if there is no mill like it in the world there is no other same class?
A: That is right.
Q: The labor cost of turning out that product at that mill would be one-half what it would be anywhere else where they are paying the same wages?
A: I do not know whether that is true or not.
Q: Does that not follow as a necessary result . . . ? You stated that with your machinery there the men could turn out twice the product, and I ask the simple question whether, if that is true, the labor cost of that product would not be one-half of any other mill having the same rate of wages?
A: I do not think it would.
Q: . . . What kind of machinery is there which increases the facility of labor?
A: Automatic machinery, hydraulic, etc.
Q: Is that the machinery of which there is no mill possessed?
A: We use hydraulic machinery to a greater extent than any other mill.
Q: Then the use of machinery actually reduces the cost of the product, does it not?
A: Well, it should do it; that is what we want it to do.
The interrogator was trying to get past the company’s argument that it was the machinery that made all the difference, for the experience of the men on the production line had proven otherwise. As one Amalgamated representative explained, the installation of new equipment had already resulted in a net reduction in wages, by making it possible for ten men to do the work that might previously have required thirty. Not only had twenty men lost their jobs, but the company was insisting that those remaining ought to take a pay cut as well.
If one can sense the frustration of the interrogator trying to get a straight answer out of Potter, however, Frick’s responses during the same session probably sent the poor man raving:
Q: Mr. Potter, the general manager of your mills, stated a few moments ago that owing to the improved machinery in your mills . . . you were able to turn out 50 per cent more product with 50 per cent less labor in certain lines. Do you endorse that statement?
A: I think that is substantially correct, in one department.
Q: In other words with the use of that machinery one man does the work that four men did formerly?
A: I think that is correct. . . .
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