Q: Can you state independently of other costs the labor cost of producing a ton of steel billets?
A: I could get those figures for you, but I think I will have to decline to give them to you.
Q: Upon what ground?
A: Well, I do not think we should be asked to give away those details of our business.
Q: You asked the Government for a duty to compensate between the difference in the American labor cost and the foreign labor cost; then upon what principle, receiving from the Government a protection which is ostensibly and avowedly for that purpose, do you decline to give the information upon which that legislation is based?
A: We did not ask the Government for such protection.
Q: You did not?
A: No, this concern did not.
Q: You are greatly misrepresented then if you did not. The press misrepresents you very much.
THOUGH HIS OUTRIGHT REFUSAL to share what he considered company secrets with Congress was classic hard-nosed Frick, his statements regarding the influence exerted by Carnegie Steel in support of tariffs enacted to protect the steel industry were disingenuous, to say the least. Though it might have been correct to say that he or Carnegie made no direct lobbying efforts, the steel industry as a whole was united in its efforts to uphold the tariffs that were being debated by presidential candidates Cleveland and Harrison. The issue was such a lightning rod in its day that a fair number of ordinary laborers were ready to forsake their natural Democratic leanings and vote for Republican candidate Harrison, a staunch supporter of the tariffs.
And despite such artful public dodging, the truth was that the amendments to the wage scale sought by Frick would have saved the company no more than two cents per ton on a product that sold for between thirty and thirty-five dollars per ton at the time. As Frick had pointed out in his own article, the changes would affect only the skilled craftsmen at the Homestead mill, less than one-quarter of the workforce. While the men paid at tonnage rate might earn somewhere between ten dollars and fifteen dollars per day, the average rate for a laborer was in the neighborhood of $2.00 to $2.25.
Carnegie Steel, moreover, had become the nation’s leading producer of steel, its output soaring from 250,000 tons in 1880 to more than 1 million tons in 1890. As profits for that year totaled nearly $5 million, and a two-cents-per-ton write-off would have dented the bottom line by all of $20,000, it seems inexplicable that Frick and Carnegie would not have surrendered the point in a trice.
However, between 1889 and 1892, the period governed by the contract, steel prices had declined nearly 19 percent, despite record profits. In any case, both Carnegie and Frick viewed concessions to labor not as justifiable compromise but as the setting of dangerous precedents sure to be seized upon in other negotiations down the road. Carnegie’s view of labor costs was summarized in a letter he had written to Abbott in 1888 before the strike of that year: “I notice that we are paying 14 cents an hour for labor, which is above Edgar Thomson price. The force might perhaps be reduced in number 10 percent so that each man getting more wages would be required to do more work.”
In Carnegie’s mind, nothing had changed in the intervening years. If costs could be cut, then cut they must be, and never mind if the category read “minerals” or “vegetables” or “men.” And if he was tough on matters pertaining to the production line, he was even more demanding when it came to the support staff. Nowhere is this attitude made clearer than in a letter to Frick dated March 31, 1892: “In our experience as manufacturers, we have found that there is more danger of unnecessary increase in clerks than in any other department. I believe that when our consolidation takes place that Mr. Lovejoy’s department can be cut down at least one-third. . . . Mr. Lovejoy [Francis Lovejoy, company secretary and business manager] has said that there were now in the building 246 men. It was only two—or it may be three years ago the number was 120. Truly I do not believe there is any department that needs pruning so much as [his].”
While he was at it, Carnegie turned his cold eye upon another area ripe for Frick’s shears: “Mr. Abbott also mentioned that Mr. Potter had 18 draughtsmen on his rolls. I cannot see how he employs more than 6. One of the benefits of hard times is, that it requires examination into every branch.”
So far as the upcoming negotiations at Homestead were concerned, Carnegie had made up his mind. On April 4, 1892, just before sailing for Europe for the summer, he drafted a notice to all employees at the Homestead works and sent it off to Frick for immediate posting. In light of the upcoming merger of the Edgar Thomson, Duquesne, and Homestead mills, Carnegie wrote that, given that the vast majority of the employees in the newly formed Carnegie Steel were non-union, “the minority must give place to the majority. These Works therefore, will be necessarily Non-Union after the expiration of the present agreement.”
Carnegie hastened to add that this would not mean lower wages. Without reference to the unionized skilled workers paid at tonnage rates, he pointed out that most of the workers at non-unionized E.T. and Duquesne were making higher wages than their counterparts at Homestead and that steps would be taken to see that Homestead workers were brought up to par. While admitting that improvements on the production line would mean a reduction in the workforce at Homestead, he “hoped” that such layoffs would prove temporary. He concluded on a note that was conciliatory but brooked no dissent: “This action is not taken in any spirit of hostility to labor organizations, but every man will see that the firm cannot run Union and Non-Union. It must be either one or the other.”
Frick took one look at the notice and determined that posting it would be a terrible tactical blunder—why warn the enemy what was coming when no good could come of it for the company? Instead he reassured representatives of the Amalgamated that negotiations would continue, and at the same time ordered plant superintendent Potter to hike production of steel plates at Homestead to the maximum, thereby ensuring a sizable stockpile of inventory should a strike occur.
Just before he left for Europe, Carnegie summoned Frick to New York for a final strategy session, in which he reminded Frick that if worse came to worst, the ultimate step was simple: they would simply close the plant and wait for the men to come around. He had told Abbott the same thing three years ago, of course, but had seen his manager lose heart in the heat of battle. With Frick in charge, Carnegie had little fear of a recurrence.
Although Frick said nothing to Carnegie during that meeting to suggest that he did not share the majority partner’s views, he did write to him soon after in England, warning on April 21 that “it may become necessary to fight it out this summer. No better time can be selected or expected. We will get ready for a fight immediately. If it be unnecessary, all the better. It may be a stubborn one, but if once got into, without regard to cost or time, it will be fought to a finish.”
Those were dire words, but Carnegie’s reply of May 23 affirmed his faith in Frick: “No doubt you will get Homestead right. You can get anything right with your ‘mild persistence.’ ” And in a follow-up message sent the next day Carnegie seems resigned to the inevitable, fretting that they had probably bought far too much pig iron, “in view of [the] possible shut down at Homestead.”
If Carnegie was worried about the economic repercussions of the looming showdown, Frick did his best to reassure him. In late May, Frick wrote again to Carnegie, detailing the pay scales he had directed superintendent Potter to present to the men, adding that he had given a deadline of June 24 for their acceptance. While Frick’s offer would have resulted in some modest increases over the previous contract should steel prices stay above twenty-five dollars per ton, he assured Carnegie that his proposal would result in a 15-percent savings overall, with a further wage cut of 4 percent for every dollar the price fell below $26.50.
A skilled heater might see his daily wage rise from $6.37 to $6.67, even with the price of steel at $23, while a melter’s helper working on one of the open hearth furnaces would see his pay reduced from $3.60 to $3.26.
While the plan would save the company money overall, Frick pointed out that it contained certain features that Homestead plant superintendent John Potter could “spin” to make it seem that he had wrung concessions from the company. “Want to put Potter in the position of having used his influence with us to make a deal with the Association . . . and to have used his influence towards securing for the men as high a rate of wages as possible. In other words, to strengthen him with his men.”
Frick went so far as to tell Carnegie, “We do not care whether a man belongs to a union or not, nor do we wish to interfere. He may belong to as many unions or organizations as he chooses.” But he was insistent on one thing: no agreement would be put forth giving “the impression upon the minds of people that we were willing to pay Amalgamated men higher wages than others.”
Whether Carnegie saw Frick’s messages as inspired tactical planning or as documents meant to disguise his true intentions would become a matter of debate between the two. In any case, a cable flew from London to Pittsburgh on June 3 suggesting that far less weighty matters were occupying Carnegie’s attention. For some time, Carnegie had been urging Frick to purchase one of the elaborate mechanized musical devices then gaining popularity in Europe and known as the “Orchestrion.” The self-playing devices used sheet roll music in the same way as a player piano, but were more complex and sometimes enormous, containing organ pipes, trumpets, trombones, flutes and piccolos, violins, and various percussion instruments, all given life by electrically driven pumps and bellows.
Though they would eventually make their way into saloons and amusement parks everywhere and become known as “nickelodeons” for the coin that activated them, in the early 1890s the devices were still the playthings of kings and sultans, and Carnegie insisted that it was just the thing for a budding tycoon. “Do not think that I have forgotten about the Orchestrion,” he wrote Frick, in the midst of all the back-and-forth on Homestead. “On the contrary I have just mailed you pictures of two. The dearer one is by far the best instrument, and the difference will be well spent in buying it.” It would cost Frick $6,100 (several hundred thousand contemporary dollars) to have it delivered and ready to play in his Clayton home, Carnegie said, but added, “You will certainly have something that will give great pleasure, and be a marvel in Pittsburgh.”
While the matter of the Orchestrion dangled, Carnegie returned to issues at Homestead, making clear his understanding that chances for resolving the matter without a confrontation were virtually nil. On June 10, he wrote Frick, “As I understand matters at Homestead, it is not only the wages paid, but the number of men required by Amalgamated rules which makes our labor rates so much higher than those in the East. Of course you will be asked to confer, and I know you will decline . . . as you have taken your stand and have nothing more to say.
“It is fortunate that only a part of the Works are concerned. Provided you have plenty of plates rolled, I suppose you can keep on with armor. Potter will, no doubt, intimate to the men that refusal of scale means running only as Non-Union. This may cause acceptance, but I do not think so. The chances are, you will have to prepare for a struggle, in which case the notice [i.e., that the works are henceforth to be non-union] should go up promptly on the morning of the 25th. Of course you will win, and win easier than you suppose. . . .”
Carnegie meant his words to be supportive, obviously, but for years afterward he would insist that he had no knowledge of the true manner in which Frick intended to “win.” In a June 17 message, Carnegie blithely reaffirmed his support for Frick, then added, “Have ordered the Orchestrion. Please cable whether you wish it finished in light or dark wood. Sorry you had not room for the ‘dearer’ one.”
Frick’s attention was elsewhere, however. He wrote back swiftly that all indications pointed to a strike at Homestead. “Regret to say that it does not seem to me that there is any other course open for us. We would better make the fight and be through with it, expensive though it may be.”
Two days later, on June 22, he wrote again, even more forcefully: “We will not be trifled with, and are prepared to carry out the policy we have adopted,” he told Carnegie. “It may be that we will win without much difficulty, although I am not yet prepared to believe that we will win without a pretty severe struggle, and am not sure, even with the agreement of these men to work, that they will do so, provided we find it necessary to bring in guards.”
Despite such statements, Carnegie would, for all the rest of his days, disavow any knowledge of the letter that Frick penned to a third party shortly thereafter. In that very private message of June 25, Frick made it clear exactly how far he was willing to go: “We will want 300 guards for service at our Homestead mills as a measure of prevention against interferrence [sic] with our plan to start the operation of the works on July 6, 1892.
“The only trouble we anticipate is that an attempt will be made to prevent such of our men, with whom we will by that time have made satisfactory arrangements, from going to work and possibly some demonstration of violence upon the part of those whose places have been filled, or most likely by an element which usually is attracted to such scenes for the purpose of stirring up trouble.
“We are not desirous that the men you send shall be armed unless the occasion properly calls for such a measure later on for the protection of our employees or property. . . .
“These guards should be assembled at Ashtabula, Ohio, not later than the morning of July 5, when they may be taken by train to McKees Rocks, or some other point upon the Ohio River below Pittsburg [an earlier and accepted variant of the city’s spelling] where they can be transferred to boats and landed within the inclosures of our premises at Homestead. We think absolute secrecy essential. . . .
“As soon as your men are upon the premises we will notify the sheriff and ask that they be deputized either at once or immediately upon an ontbreak [sic] of such a character as to render such a step desirable.”
Frick signed himself “Yours very truly.” The person to whom the letter was sent was Robert A. Pinkerton, head of the well-known Pinkerton National Detective Agency, which had provided security forces to management on more than one such previous occasion, including the suppression of the Molly Maguires in the Pennsylvania coalfields during the 1870s.
That Frick had called in the Pinkertons was a sign that the gloves were indeed off, for this was no typical industrial security firm where overaged and overweight types found a place to nod off during after-hours, minimum-wage assignments. Native Scotsman Allan Pinkerton, a former deputy sheriff and the first police detective in Chicago, formed the agency in the early 1850s and made a name for his firm by solving a series of train robberies and forgery cases that had baffled local officials.
In 1861, while investigating a railway case, Pinkerton—an ardent abolitionist who believed that labor unions seldom represented the best interests of the workingman—got wind of a plot to assassinate President Lincoln during a train stop in Baltimore. As a result, Lincoln’s train steamed right through Baltimore and on to his inauguration ceremony in Washington. With the plot foiled, Pinkerton became a household name, his firm often called upon to provide presidential security and to direct Secret Service operations for the Union during the Civil War. The company’s logo featured a rendering of an unblinking eye with the accompanying legend “We Never Sleep,” and gave rise to the term “private eye.” One of its most notable employees was hard-boiled crime writer Dashiell Hammett, who learned much of what he knew about the field from a stint as a Pinkerton detective early in the twentieth century. (Hammett would go on to pen Red Harvest in 1929, set against the backdrop of labor unrest in a Colorado mining town, with his protagonist a Pinkerton-styled detective.)
In the 1870s Pinkerton used one of his men, James McParlan, to infiltrate the ranks of the Molly Maguires during the coalfield disturbances of the period. It was McParlan’s testimony that resulted in the breaking of the Maguires and the execution of twenty of its members, with one commentator
noting dryly that “nearly all of them [were] guilty of something.”
After the senior Pinkerton’s death in 1884, control of the firm passed to his sons, William and Robert, and the Pinkertons became nearly synonymous with strikebreaking activities, often providing large numbers of armed men with military and law enforcement experience to mine and factory owners who wished to supplement local authorities when labor unrest threatened. Pinkerton men had been on the job at the strike at Chicago’s McCormick Reaper plant and at Haymarket Square, and now, it seemed, they would come to Homestead as well, en masse.
Despite Carnegie’s later protestations, there seems little doubt that Carnegie agreed with Frick’s aims, even if he claimed ignorance of the plan’s finer details. In fact, Carnegie was hopeful that the defeat of the Amalgamated at Homestead would spell the end of union interference with Carnegie Steel operations once and for all. The same man who had earlier written in Forum that “there is no excuse for a strike or a lock out until arbitration of differences has been offered by one party and refused by the other” had only a few days before the call to the Pinkertons sent this to Frick: “Perhaps if Homestead men understand that non-acceptance means Non-Union for ever, they will accept.”
Some commentators, including Carnegie biographer Joseph Frazier Wall, have attempted to explain the apparent contradiction by arguing that Carnegie would have been comfortable with his men being organized in what he considered “proper,” or local, unions—that it was only national organizations such as the Amalgamated to which Carnegie was opposed. But that is tantamount to arguing that Carnegie saw nothing wrong with men joining any union so long as it was relatively powerless.
In any case, shortly before leaving England on June 29 for Scotland, where he planned to spend the rest of the summer, Carnegie sent Frick what he considered to be his final word on the troubles at Homestead.
“One thing we are all sure of: No contest will be entered in that will fail. It will be harder this time at Homestead than it would have been last time when we had the matter in our own hands, as you have always felt. On the other hand, your reputation will shorten it, so that I really do not believe it will be much of a struggle. We all approve of anything you do, not stopping short of approval of a contest. We are with you to the end.”
Meet You in Hell Page 12