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Published online by Cambridge University Press: 11 June 2012
Charles M. Schwab's aggressive and innovative leadership of Bethlehem Steel early in this century made that firm a success. To some extent, however, the growth of Bethlehem was made possible by the conservative strategy of E. H. Gary's giant U.S. Steel. The dominant firm's willingness to tolerate the loss of a portion of its sales to smaller rivals made their survival and expansion easier than would have been the case in a more vigorously competitive environment.
1 Editorial, New York Times, April 14, 1915.
2 Levering, Joseph M., A History of Bethlehem, Pennsylvania, 1741–1892 (Bethlehem, Pa., 1903), 724–25.Google Scholar
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5 Fritz, John, The Autobiography of John Fritz (New York, 1912), 174–77, 182Google Scholar.
6 Ibid., 187, 164, 184.
7 H. F. J. Porter, “How Bethlehem Became Armament Maker,” Iron Age, November 23, 1922, 1340; Iron Trade Review, February 20, 1913, 482.
8 Porter, “How Bethlehem Became Armament Maker.”
8 Seager, Robert, “Ten Years Before Mahan: The Unofficial Case for the New Navy, 1880–1890,” Mississippi Valley Historical Review, LX (December, 1953), 491–512Google Scholar; Nevins, Allan, Grover Cleveland: A Study in Courage (New York, 1947), 217–223Google Scholar; Hirsch, Mark D., William C. Whitney: Modern Warwick (New York, 1948), 297–302, 323–28Google Scholar.
10 Report of the Secretary of the Navy, 1886, 10–11, in House Executive Documents, vol. 7, 49th Cong., 2nd sess.; Report of the Secretary of the Navy, 1887, iii-iv, in House Executive Documents, vol. 8, 50th Cong., 1st sess.; Report of the Secretary of the Navy, 1888, iv, in House Executive Documents, vol. 8, 50th Cong., 2nd sess.
11 Report of the Secretary of the Navy, 1887, Appendix 16, 459–474.
12 For Bethlehem's gun forging contracts with the Navy, dated May 1, 1887, see U.S. Congress, House Executive Document #294, in vol. 36, 51st Cong., 2nd sess. (Washington, 1891). For the gun forging contracts with the army, see U.S. Congress, House Document #151, in vol. 48, 54th Cong., 2nd sess. (Washington, 1897); and Grace, Eugene G., “Manufacture of Ordnance at South Bethlehem,” Yearbook of the American Iron and Steel Institute (New York, 1912), 172–74Google Scholar.
13 Report of the Secretary of the Navy, 1890, 17–18, in House Executive Documents, vol. 9, 51st Cong., 2nd sess.; U.S. Congress, Senate, Investigation by the Committee on Naval Affairs, Prices of Armor for Naval Vessels, Senate Report #1453, 54th Cong., 2nd sess. Testimony of Benjamin F. Tracy, ex-Secretary of the Navy, February 8, 1896, 129132, 140–42, 147–48.
14 Report of the Secretary of the Navy, 1890, 18–19; U.S. Congress, Senate, Investigation by the Committee on Naval Affairs, Prices of Armor for Naval Vessels, Senate Report #1453, 54th Cong., 2nd sess. Testimony of Benjamin F. Tracy, February 8, 1896, 143, 147, 155–56, and testimony of Andrew Carnegie, 185–191. Carnegie's most recent biographer incorrectly states that Carnegie had entered a bid and had begun producing armor for the U.S. Navy in 1887. See Wall, Joseph F., Andrew Carnegie (New York, 1970), 645–46Google Scholar.
15 Long, John D., The New American Navy (New York, 1903), I, 46–52Google Scholar. For a fuller account of the negotiations between the Navy and the armor manufacturers, see Hessen, Robert, “A Biography of Charles M. Schwab, Steel Industrialist,” (unpublished doctoral dissertation, Department of History, Columbia University, 1969), 165–191Google Scholar.
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17 Fackenthal, “John Fritz, The Ironmaster,” 106.
18 U.S. Congress, House Document #151, in vol. 48, Report of the Secretary of the Navy on the Cost and Price of Armor, 54th Cong., 2nd sess. (Washington, 1897), 29Google Scholar.
19 Taylor, Frederick W., “The Gospel of Efficiency, II: The Principles of Scientific Management,” American Magazine, LXXI (April, 1911), 787–88Google Scholar; Copley, Frank B., Frederick W. Taylor, Father of Scientific Management (New York, 1923), II, 46Google Scholar.
20 Papers of Frederick W. Taylor, Stevens Institute of Technology, Hoboken, N.J., files 32, 33, and 119C.
21 For Schwab's background, education, and early career, see Hessen, “A Biography of Charles M. Schwab.”
22 Stephenson, B. S., “Eminent Men of the Iron World, II: Joseph Wharton,” Iron Trade Review, XL (April 4, 1907), 549Google Scholar; Copley, , Frederick W. Taylor, II, 154Google Scholar.
23 Dewing, Arthur S., Corporate Promotions and Reorganizations (Cambridge, Mass., 1914), 486Google Scholar.
24 The formation and subsequent collapse of the United States Shipbuilding company merger is examined in detail in Hessen, “A Biography of Charles M. Schwab,” 247–280, from which the present brief account is derived.
25 Dewing, Corporate Promotions and Reorganizations, 498–99.
26 Hessen, Robert, “Charles M. Schwab, President of United States Steel, 1901–1904,” Pennsylvania Magazine of History and Biography, XCVI (April, 1972), 203–228Google Scholar.
27 New York Times, February 6, 1904.
28 Bulletin AISA, December 10, 1904; New York News Bureau, October 19, 1904.
29 This and the next two paragraphs are based on Bethlehem Steel Corporation's Annual Report, March 1906.
30 Recollections of James H. Ward, May 18, 1949, Grace Biographical Project, Bethlehem Steel Corp., Bethlehem, Pa. Hereafter cited as Grace Biographical Project.
31 For breakdown of costs, see Wall Street Journal, March 19, 1908; also Bethlehem Steel Corporation, Annual Report, 1906, 12–13, and 1908, 13.
32 Bethlehem Steel Corporation, Annual Report, 1910, 11–12, and 1911, 11; Recollections of F. A. Shick, 1949, Grace Biographical Project.
33 These additions are described in detail in “The Bethlehem Steel Company's Recent Extensions,” Iron Age, November 1, 1906, 1142–46.
34 Wall Street Journal, April 4, 1908; Philadelphia Public Ledger, March 1, 1909; New York Times, March 1, 1909.
35 Burrell, George W., “Traces Development of Grey Mill,” Iron Trade Review, November 4, 1926, 1165Google Scholar; obituary of Henry Grey, Iron Age, May 8, 1913, 1147.
36 Burrell, “Traces Development;” Grey, Henry, “A New Form of Structural Steel,” Iron Age, LIX (June 17, 1897), 14Google Scholar; “A New Process for Rolling Structural Steel Shapes,” Engineering News, XLVI (November 21, 1901), 387Google Scholar.
37 Denk, F., “Mill Design for Rolling Flat-Flanged Beams,” Blast Furnace and Steel Plant Journal, V (February, 1917), 61Google Scholar.
38 “Henry Grey and the New Structural Mill,” Iron Age, December 31, 1908, p. 1994.
39 Sidney B. Whipple, “Notes on Mr. Schwab's Life” (hereinafter cited as Whipple Notes), 121, two volumes of typed notes based on interviews in 1935 with Schwab and his surviving business associates, in the Schwab Memorial Library, Bethlehem Steel Corporation, Bethlehem, Pa. I am grateful to the Bethlehem Steel Corporation for permitting me unrestricted access to the Whipple Notes and to other materials in the Schwab and Grace collections. Of course, it should not be inferred that the Corporation necessarily agrees with my interpretation of the materials in its possession.
40 Wall Street Journal, December 9, 1905; Philadelphia American, December 22, 1905. “Whipple Notes, 133, 140.
42 Schwab to Harvey Fisk & Sons, December 18, 1906, copy in Corporate Records Division, Baker Library, Harvard University; Pound, Arthur and Moore, Samuel T., eds., They Told Barron (New York, 1930), 84–85Google Scholar.
43 Clark, Victor S., History of Manufactures in the United States (New York, 1929), III, 11–12, 104Google Scholar.
44 Grace, Eugene G., Charles M. Schwab (Bethlehem, Pa., 1947), 26Google Scholar. This memorial address by Grace was reprinted in the 1947 Yearbook of the American Iron and Steel Institute.
45 Hessen, “A Biography of Charles M. Schwab,” 142–44.
46 Bethlehem Steel Corp., Annual Report, April, 1907 (covering 1906). A full list of Bethlehem's armor contracts from 1887 to 1915 appears in Congressional Record, House, Lin, part 1, December 15, 1915, 287.
47 Whipple Notes, 140; recollections of F. A. Shick (1935), Whipple Notes, 147.
48 Whipple Notes, 133, and II, 20, 140.
49 See, for example, the letter to Schwab from A. Barton Hepburn, president of the Chase National Bank, refusing a loan of $1,500,000 to Bethlehem Steel, August 26, 1908, copy in Schwab Memorial Library.
50 In 1908, the Wall Street Journal reported the rumor that Carnegie was giving financial aid to Bethlehem Steel (issue of December 24, 1908). Carnegie's aid was confirmed in 1951 by Schwab's personal assistant — see James H. Ward to John C. Long, December 11, 1951, Grace Biographical Project. See also U.S. Congress, House of Representatives, Committee on Ways and Means, Hearings, House Document #1505, 60th Cong., 2nd sess. Testimony of Andrew Carnegie, December 21, 1908, 1787–88.
51 Grace to John C. Long, April 18, 1947, Grace Biographical Project.
52 Wall Street Journal, September 3, 1908; Whipple Notes, 159.
53 Whipple Notes, 160.
54 Whipple Notes, 160–61; Historical Sketch of the Development of the Bethlehem Steel Company and Bethlehem Steel Corporation, pamphlet dated October 2, 1911 (copy in Schwab Memorial Library), 9; Desk Diary notation for March 22, 1909: “Closed up matter of Gimbel Building with E. R. Graham and Pliny Fisk,” quoted in Whipple Notes, 161.
55 For examples of resistance to innovation, see Clark, Victor S., History of Manufactures, II, 71, 275Google Scholar, concerning resistance to the Bessemer process for making rails and boiler plates; Porter, H. F. J., “Nickel Steel: Its Practical Development in the United States,” Cassier's Magazine, XXII (August, 1902), 483, on early prejudice against steel in any form (as opposed to wrought iron)Google Scholar; and Strassman, W. Paul, Risk and Technological Innovation (Ithaca, N.Y., 1959), 55Google Scholar, on opposition to crucible steel.
56 Recollections of Eugene G. Grace (1935) in Whipple Notes, 257–58, 270.
57 Wall Street Journal, August 2, 1909.
58 New York Times, August 5, 1909.
59 Iron Trade Review, November 4, 1926, 1207.
60 Hessen, “Charles M. Schwab, President of United States Steel, 1901–1904.”
61 Whipple Notes, 94.
62 Ibid.; Schwab's testimony, United States v. U.S. Steel Corp., transcript in Columbia University Law Library, XI, May 19, 1913, 4172f.
63 Bethlehem Steel Corporation, Annual Report, March 1906; Whipple Notes, 154.
64 Jeans, J. Stephen, ed., American Industrial Conditions and Competition (London, 1902), 176–78Google Scholar.
65 Cotter, Arundel, The Story of Bethlehem Steel (New York, 1916), 19–21Google Scholar.
66 Schwab, Charles M., The Bethlehem Bonus System (Bethlehem, 1931), 3Google Scholar.
67 Brody, David, Steelworkers in America; The Nonunion Era (Cambridge, Mass., 1960), 24–25Google Scholar, 89; Cotter, Story of Bethlehem Steel, 13–14, 20–22; Garraty, John A., Right-Hand Man, The Life of George W. Perkins (New York, 1960), 110–13Google Scholar.
68 Gary's speech of October 15, 1909, in volume I of Addresses and Statements of Elbert H. Gary, compiled by U.S. Steel Corp., 8 volumes, 1927, copy in Baker Library, Harvard University.
69 Meade, Edward S., “The Price Policy of the United States Steel Corporation,” Quarterly Journal of Economics, XXII (May, 1908), 452–466CrossRefGoogle Scholar; Berglund, Abraham, “The United States Steel Corporation and Price Stabilization,” Quarterly Journal of Economics, XXXVIII (November, 1923), 1–30Google Scholar.
70 Unpublished autobiography of William B. Dickson, Pattee Library, Pennsylvania State University, University Park, Pa. Hereafter cited as Dickson Papers.
71 Dickson to William E. Corey, August 10, 1904, Dickson Papers.
72 Ibid.; Dickson to Corey, February 16, 1909, and section on Elbert H. Gary in Dickson's autobiography.
73 Iron Age, February 25, 1909, 648.
74 Congressional Record, 64th Cong., 1st sess., LIII, Part I, 287 (Washington, 1916)Google Scholar; Senate Document #521, 61st Cong., 2nd sess. (Washington, 1910), Appendix E, 126.
75 Bethlehem Steel Corporation, Annual Report, 1910, 9.
76 Henry Grey, letter, Iron Age, January 14, 1909, 160–61.
77 New York News Bureau, March 1, 1907; Wall Street Journal, April 17, 1907.
78 Bethlehem Steel Corporation, Annual Report, 1916, 14.
