November 11, 2010 - No. 192
- Supplement
History of United States Steel Company
Part One
Beginnings to the End of the Great 1919 Steel Strike
The United States Steel Company, founded April 1, 1901,
was put together by U.S. banker J.P. Morgan, who at the time was the
leader of the U.S. financial oligarchy because of the monopoly position
of his bank in investment banking. Morgan applied for the first time on
a large scale the active intervention
by a banker in industry by creating a supply of corporate securities,
e.g., stocks, bonds, etc., which gave him control over the companies he
"created." Morgan was one of the first finance-capitalists in the true
sense of the word, who brought together industrial and banking capital
on a monopoly scale.
Morgan dictated to all the main commercial banks of New
York, the financial centre of the U.S., except for the National City
Bank of the Stillmans (who later intermarried with the Rockefellers)
and the First National Bank of the Bakers, with whom he made alliances.
Morgan set up Banker's Trust in 1903 to
serve as a central reserve for New York bankers, placing one of his
U.S. Steel partners, Edmund Converse, at the head.
J.P. Morgan died in 1913 and was succeeded by his son,
J.P. Morgan II. Two months later, Morgan's special position as the
"banker's banker" began to be undermined by the establishment of the
U.S. Federal Reserve System which created a government body to
supervise and regulate banking institutions. Rockefeller
ally Senator Nelson Aldrich and banker Paul Warburg of Kuhn Loeb played
major roles in bringing the new system into being. (Warburg later a
become director
of the U.S. subsidiary of I.G. Farben, the chemical conglomerate that
collaborated with the Nazis.)
But the Federal Reserve System still depended on the
Morgans, partly because of inertia and partly because the system's main
link, the Federal Reserve Bank of New York, was headed by Morgan
placemen. Thus, Morgan dominance of the financial oligarchy basically
continued until the stock market crash of
1929, which the Morgans were powerless to remedy. The direct
intervention of the Roosevelt government became the "saviour" of the
banking system and of the economy as a whole, further undermining the
Morgan image and power.
Morgan dominance was finally broken by the Banking
Act of 1933 (Glass-Steagall Act). Rockefeller
brother-in-law Winthrop Aldrich, president of Chase National Bank,
drafted a last-minute inclusion that forced all banks to choose between
deposit business and security business. This
was a direct attack on the Morgans, whose power was based on fusing the
two types of banking. The House of Morgan was a "double threat" with
its million-dollar corporate balances and its blue-ribbon underwriting
of businesses such as U.S. Steel, which enabled it to gain control of
those businesses. After two
years, the Morgan partners decided to remain as a deposit bank, J.P.
Morgan and Company, and to spin off the underwriting business into a
"separate" investment bank, Morgan Stanley.
Forming U.S. Steel
J.P. Morgan put together U.S. Steel in 1901 as a merger
of ten of the largest United States-based steel fabricators and
constructors. At its creation, U.S. Steel was the largest company in
the world and the first billion dollar company with an authorized
capitalization of
$1.4 billion. It became the foundation of the Morgan industrial empire.
U.S. Steel stock
certificate
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The three main companies merged were the largest
company, Carnegie Steel (founded in the 1870s), controlled by Andrew
Carnegie, Henry Phipps, and Henry Frick (Frick broke with Carnegie in
1899); Federal Steel, a previous merger of various small steel
companies controlled by J.P. Morgan and Elbert Gary
(founded in the 1890s); and National Steel, controlled by William Moore
(founded in 1898). Morgan's man, Elbert Gary, served as president and
chairman of U.S. Steel from the company's founding in 1901 until his
death in 1927.
The American Tin Plate Company, American Steel Hoop
Company, and American Sheet Steel Metal, all controlled by William
Moore, also became part of U.S. Steel. The four other companies merged
into U.S. Steel were American Bridge Company (J.P. Morgan), American
Wire & Steel Company (John W.
"Bet-a-Million" Gates, a founder of Texaco), National Tube Company
(John Haldane Flagler and his father-in-law James Converse; J.P.
Morgan), and Lake Superior Consolidated Iron Mines (John D.
Rockefeller), which owned the vast iron mines of the Mesabi Range in
Minnesota.
As of its birth in April 1, 1901, U. S. Steel had 232
blast furnaces at 55 locations and 201 steel rolling facilities. The
operation was widespread with the greatest facility concentration in
the Pittsburgh area. U.S. Steel had large coal-mining facilities in
western Pennsylvania to fuel its steel plants.
Following the initial mergers, U.S. Steel continued to
make new acquisitions, e.g., Bessemer Steamship in 1901 (Rockefeller),
Shelby Steel Tube in 1901, Union Steel in 1902 (controlled by Andrew
Mellon [Gulf Oil, Alcoa, Westinghouse, and later U.S. Secretary of the
Treasury], Henry Frick, and William Donner),
Troy Steel Products in 1902, Clairton Steel in 1904, Tennessee Coal,
Iron, and Railroad Company in 1907 (John W. Gates), Columbia Steel in
1910, and so on.
While J.P. Morgan basically controlled and ran United
States Steel, other major capitalist groups ended up with significant
shareholdings and influence through their inclusion in the merger,
e.g., the Rockefellers, the Moores, and the Mellons of Pittsburgh (who
had also financed Henry Frick's initial entry into
the steel industry). The Mellon Group remained in the background but in
1931 was estimated to still own about 70,000 U.S. Steel common shares.
In comparison, the Bakers, the largest shareholders at that time, owned
about 107,000 shares.
At its formation in 1901, the following 24 individuals
were named directors of U.S. Steel: J.P. Morgan, Elbert Gary (Morgan
ally), Edmund Converse (Morgan ally), Robert Bacon (Federal
Steel/Morgan ally), John D. Rockefeller, John D. Rockefeller Jr., Henry
H. Rogers (Rockefeller ally), Charles Schwab (Carnegie
Steel), Henry Frick (Carnegie Steel), William H. Moore, D. G. Reid
(Moore ally), P. A. B Widener, Alfred Clifford, William Edenborn
(Widener, Clifford, and Edenborn were from American Steel and
Wire/Gates), Percival Roberts (American Bridge), Francis Peabody
(Peabody Coal), Charles Steele (Adams Express),
Marshal Field (Chicago), Norman B. Ream (Chicago), William E. Dodge
(Anaconda Copper), Nathaniel Thayer (Boston/railroads), Clement A.
Griscom (International Navigation), James H. Reed (Knox and Reed,
lawyers), and Abram S. Hewitt (Cooper, Hewitt). Neither Henry Phipps
nor John W. Gates was on
the founding board.
Imperialism, the Highest
Stage of Capitalism
U.S. Steel was created in the period when capitalism
became imperialism, which, as Lenin sums up in his 1913 work, Imperialism,
the
Highest
Stage
of
Capitalism, is the monopoly stage of
capitalism. Lenin outlines the five basic
features of imperialism: "(1) the concentration of production and
capital has developed to such a high stage that it has created
monopolies which play a decisive role in economic life; (2) the merging
of bank capital with industrial capital, and the creation, on the basis
of this "finance capital," of a financial oligarchy;
(3) the export of capital as distinguished from the export of
commodities acquires exceptional importance; (4) the formation of
international monopolist capitalist associations which share the world
among themselves, and (5) the territorial division of the whole world
among the biggest capitalist powers is completed.
Imperialism is capitalism at that stage of development at which the
dominance of monopolies and finance capital is established; in which
the export of capital has acquired pronounced importance; in which the
division of the world among the international trusts has begun, in
which the division of all territories of
the globe among the biggest capitalist powers has been completed" (p.
106).
Lenin also makes specific reference in his work to
the
United
States,
to
U.S.
Steel,
and
to
the
Morgan
bank.
Lenin
states
that:
"In another advanced country of modern capitalism, the United
States of America, the growth of the concentration of production is
still greater (note: than in Germany) Almost
half the total production of all the enterprises of the country are
carried on by 1/100th part of those enterprises! These 3,000 giant
enterprises embrace 238 branches of industry" (p. 12-14). Later, Lenin
notes that in 1907, U.S. Steel already employed 210,180 workers and
office employees and that in 1908 its output
constituted 56.1% of the total output of steel in the U.S. (p. 22).
Finally, Lenin also points out the leading role of the big banks:
"Among the few banks which remain at the head of all capitalist economy
as a result of the process of concentration, there is naturally to be
observed an increasingly marked tendency
towards monopolist agreements, towards a bank trust. In America, not
nine, but two very big banks, those of the multimillionaires
Rockefeller and Morgan, control a capital of eleven thousand million
marks" (p. 43-44).
The Great Homestead Strike
of 1892 Against the Carnegie Steel Company
In 1881, the Amalgamated Association of Iron and Steel
Workers (AA) union organized workers at the Homestead plant in
Pittsburgh, Pennsylvania, which was purchased by Carnegie Steel in
1882. The AA, formed
in 1876, was a craft union representing skilled iron and steel workers
which negotiated wages and working conditions, as well as acted as a
hiring hall. The AA struck the Homestead works on January 1, 1882 to
prevent management from forcing yellow-dog contracts on all workers.
The plant brought in numerous
strikebreakers but the strike ended on March 20 in victory for the
union.
The AA struck Homestead again on July 1, 1889, when
negotiations for a new three-year collective bargaining agreement
failed. The strikers seized the town and made common cause with various
immigrant groups. Backed by 2,000 townspeople, the strikers drove off a
trainload of strikebreakers on July 10.
When the sheriff returned with 125 new "deputies" two days later, the
strikers rallied 5,000 townspeople. Although victorious in the strike,
the union agreed to significant wage cuts. Carnegie officials conceded
that the AA essentially ran the Homestead plant after the strike, and
the AA membership doubled.
A new strike began at Homestead on June 30, 1892. This
strike was organized and purposeful, the type of strike which would
mark the modern age of labour relations in the United States.
Andrew
Carnegie had placed his partner Henry Frick in charge at Homestead and
Frick vowed to break the strike and the
union. Carnegie agreed and ordered the Homestead plant to manufacture
large amounts of inventory so the plant could weather a strike. He also
drafted a notice (which the workers never saw) withdrawing union
recognition.
Steelworkers
confront Pinkerton agents sent to break the strike at
Carnegie Mills,
Homestead, 1892.
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Frick locked out the union after no bargaining agreement
was reached. A high fence topped with barbed wire was completed to seal
the plant to the workers. Sniper towers with searchlights were
constructed near each mill building, and high-pressure water cannons
were placed at each entrance. Parts of the plant
were protected, reinforced, or shielded. The striking workers kept the
plant closed, patrolling the river, throwing up picket lines, and
watching ferries and trains.
Frick attempted to bring in 300 Pinkerton agents to open
up the mill for strikebreakers to keep the mill functioning. When the
Pinkertons tried to land from barges under cover of night, the workers
were waiting. The Pinkertons opened fire which was returned by the
workers. 2 people were killed and 11 wounded
on each side. The battle continued. More than 5,000 people congregated
on the hills overlooking the steelworks. A 20-pounder brass cannon was
set up by the workers on the shore opposite the steel mill, and an
attempt was made to sink the barges. Six miles away in Pittsburgh,
thousands of steelworkers gathered
in the streets, listening to accounts of the attacks at Homestead;
hundreds, many of them armed, headed for Homestead.
Four more workers and one more Pinkerton agent were
killed. The workers kept on firing at the Pinkertons, attempted to burn
the barges, and threw dynamite at the barges. Frick refused to defuse
the situation, knowing the National Guard would be called in. Finally
the Pinkertons surrendered and were taken
to the town jail, after running the gauntlet. The barges were burned to
the waterline. The Pinkertons were taken to Pittsburgh to stand trial
for murder but Pittsburgh officials refused to indict them.
On July 12, the Pennsylvania state militia arrived and
more than 4,000 soldiers surrounded the plant. They displaced the
picketers and soon company officials were back in their offices.
Another 2,000 troops camped overlooking the city. The company quickly
brought in strikebreakers and restarted production
under the protection of the militia. When a few workers attempted to
storm into the plant to stop the relighting of the furnaces, militiamen
fought them off with bayonets.
On July 18, the town was placed under martial law. On
July 23, Alexander Berkman, a New York anarchist shot and stabbed Henry
Frick in his office. Frick survived and Berkman was sentenced to 22
years in prison. Soon after, the strike collapsed and the mill returned
to full capacity. The union voted to go
back to work on Carnegie's terms. and the Homestead strike became known
as one of the bitterest labour disputes in U.S. history. U.S. Steel
continued the anti-working class tradition of Carnegie and Frick by
preventing unionization for the first 36 years of the company's
existence.
The Carnegie Institution:
Funding Eugenics
For the sale of his company to U.S. Steel, Andrew
Carnegie's share amounted to $225,639,000, in the form of 5%, 50-year
gold bonds. Carnegie began to contribute some of his money to various
projects and causes. In 1902, Carnegie founded
the Carnegie Institution as an organization for scientific discovery.
In 1904, the Carnegie Institution allocated large grants to establish a
eugenics laboratory and centre at Cold Spring Harbor on Long Island.
The goal of eugenics was to "purify" the "white race" by identifying
so-called defective family trees, e.g., of
blacks, Hispanics, Indians, Jews, Eastern Europeans, and so on, and
then segregating them and subjecting them to sterilization to kill off
their bloodlines. Eventually 27 states enacted eugenics laws and,
ultimately, at least 60,000 Americans were coercively sterilized. The
Rockefellers and the Harrimans also contributed
liberally to eugenics research. In 1910, the Director of Carnegie's
Cold
Spring Harbor complex, Charles Davenport, added a Eugenics Record
Office to quietly register the genetic background of all Americans to
separate the "defective" strains from the desired lineages. The
Carnegie complex also helped found the
Eugenics Research Association (ERO), headed by Harry Laughlin, to
coordinate eugenicists across the U.S., including via a new
publication, Eugenical News. This brought together a
nationwide U.S. group of field workers, researchers, and theorists to
assemble a web of fake science to justify racial regulation.
The goal was to ethnically cleanse millions of Americans, 10% at a time.
During the 1920s, the Carnegie Institution's eugenic
"scientists" cultivated deep personal and professional relationships
with Germany's fascist eugenicists. Many of these Germans would become
the murderous doctors of the concentration camps. In 1923, Davenport
and Laughlin added a subtitle to the name of Eugenical News,
i.e., Current Record of
Racial Hygiene, acknowledging the Nazis' unique term for eugenics.
Articles by German raceologists such as Erwin Bauer, Eugen Fischer, and
Fritz Lenz were frequently reprinted in Eugenical News.
Fischer and Lenz later became two
of the most notorious lab-coated commandants of Hitler's mass
extermination camps.
When in 1935 Hitler demanded specific genetic fractions
for Jews, the Nazis duplicated the racial ancestry charts created by
Harry Laughlin and other U.S. eugenicists. Carnegie-funded racial
mathematics became the basis for the Nazis' Nuremberg Racial Laws of
1935. At the end of 1935, Nazi eugenicist Ernst
Rodenwalt suggested the Reich give U.S eugenicist Laughlin a special
honour from Heidelberg University, which Laughlin accepted with thanks.
In 1937, Laughlin and Cold Spring Harbour became the U.S.distributor
for a Nazi eugenics propaganda film entitled, The Hereditary
Diseased, which was
shown in U.S. high schools and other places.
Nazi eugenecist
Othmar Vershuer |
In December 1937, Charles Davenport asked German Dr.
Ottmar von Verschuer, a hero of the American eugenics movement and a
Rockefeller-financed fellow, to join three other Nazi eugenicists
already on Eugenical News's advisory committee, Eugen
Fischer, Ernst Rudin, and Falk Ruttke. Verschuer
had a favorite young assistant who helped him in his eugenics work. His
name was Joseph Mengele. He was later known as Doctor Death at
Auschwitz-Birkenau concentration camp for his murderous experiments on
live human beings.
U.S. Steel Recognition
Strike of 1901
The U.S. Steel Recognition Strike of 1901 was an attempt
by the Amalgamated Association of Iron, Steel, and Tin Workers (the AA)
to reverse its declining fortunes and organize large numbers of new
members. The AA had to organize the plants of U.S. Steel
before the new corporation, with its huge resources, could stop the
union drives. U.S. Steel's board of directors secretly adopted a
resolution on June 17, 1901, opposing any unionization attempt.
1901: U.S. Steel Recognition strike
|
The AA settled on staging a recognition strike. A
meeting between J.P. Morgan and T. J. Shaffer, president of AA,
resulted in a wage agreement but this agreement was rejected by the AA
executive board. At a meeting on August 3, 1901, Morgan refused to
renegotiate the wage agreement. The AA executive
board ordered Shaffer to call a strike, to begin on August 10. At
several plants, workers refused to turn out. Union members in Illinois
and Pennsylvania turned out in small numbers. Unionized facilities at
the National Steel and National Tube subsidiaries turned out almost to
a man, but the overall effect on U.S.
Steel was too weak. Strikebreakers were brought into the plants and the
shuttered works were reopened. Shaffer appealed to Samuel Gompers
asking for American Federation of Labour support and the calling of a
national labour conference to make the strike the AFL's main issue.
Gompers refused.
The recognition strike against U.S. Steel ended on
September 14, 1901. The AA settled for terms far worse than those
offered in August. Only plants which had started and ended the strike
were covered, which meant that the union lost recognition at 15 plants.
The company even won a pledge from the union
not to organize any plant not already unionized, and to reject any
offer of affiliation from a unionized plant.
U.S. Steel Employs Prison
Labour
In 1907 U.S. Steel bought its largest competitor
Tennessee Coal, Iron, and Railroad Company (TCI), headquartered in
Birmingham, Alabama. TCI was founded as the Sewanee Mining Company in
1852 by Nashville entrepreneurs and was the largest steel
producer in the Southern United States. TCI stock, then controlled by
John Gates, was destabilized by the financial Panic of 1907 and the
company approached U.S. Steel to be its "saviour." To take over the
company, U. S. Steel purchased the stock of an insolvent Wall Street
brokerage firm, Morgan and Schley,
which had secured huge loans from the major banks against 6 million TCI
shares.
TCI was one of the largest lessees of black
convict labour in Alabama following Reconstruction. The number of
blacks
employed increased after U.S. Steel acquired TCI in 1907, as did the
brutality of the conditions in which they laboured. In 1908, the first
full year of U. S. Steel's ownership of TCI, almost 60
convict workers died. TCI did not renew the convict lease contract with
the state at the end of 1911. By 1913, the TCI workforce consisted of
more than 17,000 employees made up of black southerners (55 percent),
native-born whites (37 percent), and immigrants (7 to 8 percent).
In the 1910s TCI undertook a comprehensive program to
stabilize its labour force by developing rigorously-planned "model
villages." This paternalistic approach limited the free movement and
organization of labour.
Gary, Indiana: The Company
Town
In 1906, U.S. Steel started to build a new plant and
city 25 miles from downtown Chicago in northwest Indiana on Lake
Michigan. Chicago served as the industrial and transportation center of
the Midwest, so a site somewhere in that city's circle of influence
seemed logical. Land was cheap (much was purchased anonymously), space
was plentiful, and lake and river transportation were readily
available. The new city was named Gary, Indiana, after Morgan's
partner, Elbert Gary, and was completed in 1911. Thousands of recent
European immigrants and American blacks
constructed both the city and the world's largest steel mill.
Gary was the largest company town ever conceived and
built by U.S. capitalists. One promoter labeled the Gary mills the
"largest enterprise of the human race in all history," excepting
possibly the Krupp Works in Germany.
Peasants from eastern and southern Europe, the rural
South and even Mexico became industrial workers in Gary's steel mills.
Workers worked twelve-hour days and seven-day weeks. Scarcity of
working-class housing meant exploitative rents and overcrowded and
unhealthy living conditions on Gary's "south
side."
The company owned much of the land upon which the city
was built and determined how land and space would be utilized, and also
controlled the city's government and politics, particularly after the
Republican party came into local power in 1914. Gary's plant
superintendent, William P. Gleason, ran the mills
and the city, from 1906 until his retirement in 1935. Gleason and
Horace S. Norton, who directed the U.S.- Steel-owned Gary Land Company
for an equal number of years, helped break the steelworkers union in
1919, working closely with local Republican politicians, and
manipulating the programs and policies
of Gary's newspapers, schools, churches, and settlement houses.
In the 1960s, Gary entered a spiral of decline as many
steel workers were laid off. U.S. Steel continues to be a major steel
producer, but with only a fraction of its former level of employment.
Today, among U.S. cities with a population of 100,000 or more, Gary has
the highest percentage of African Americans,
84% (2000 U.S. census).
The Panic of 1907
A downturn in the economy in 1907 created an October
"Panic" which brought on a brief depression in late 1907. The steel
business felt the impact and sales fell off by one third and profits
were reduced by more than half. A substantial recovery occurred in
1909. Exports played
a significant role in the comeback, increasing 26% over the previous
year.
Founding of Stelco, 1910
Five smaller existing steelworks combined and were
incorporated as the Steel Company of Canada in 1910. The deal was
brokered by Maritime capitalist Max Aitken, later Lord Beaverbrook, who
took on the same role that Morgan had taken with the formation of U.S.
Steel in 1901. Charles Secord Wilcox, president of Hamilton Steel and
Iron Company, was the first president. The five companies that
initially made up Stelco, with their chief shareholders listed in
brackets, were:
- Canada Screw Company -- 1864, Dundas, Ontario (Cyrus
Birge)
- Hamilton Steel and Iron Company -- 1861, Hamilton,
Ontario (Cleveland, Ohio capitalists)
- Montreal Rolling Mills -- 1790s, Montreal, Quebec
(William McMaster; Herbert Holt)
- Dominion Wire Manufacturing Company -- Lachine, Quebec
(William H. Farrell, brother of James A. Farrell who became president
of U.S. Steel in 1911)
- Canada Bolt and Nut Company -- Swansea, Ontario (Lloyd
Harris, of the Harris family of Massey-Harris)
The Dissolution Suit of 1911
In the United States, the Sherman Antitrust Act of 1890,
the first of the U.S. antitrust laws, outlawed trusts and prohibited
"illegal" monopolies. The act applies to both domestic companies and
foreign companies doing business in the United States. A trust was
defined as a relationship between businesses that collaborate through
anticompetitive agreements to gain market dominance. Trusts cut prices
to drive competitors out of business. "Illegal" monopolies are those
that can be shown to use their power to suppress competition. Despite
the passing of the Sherman Act,
a
merger
wave dramatically increased industrial concentration in the U.S.
between 1898 and 1902.
In October 1911, the U.S. government asked the United
States Court in New Jersey to order the dissolution of U.S. Steel on
the basis of unlawful "restraint of trade" through monopolization. U.S.
Steel chairman Elbert Gary denied the charges and an investigation
committee was set up in the House of Representatives,
chaired by Kentucky Congressman August Owsley Stanley. Two years of
hearings were held.
One of the issues in the suit was the famous "Gary
dinners." Between 1907 and 1911, executives of American steel
manufacturers gathered in a series of social events and meetings. At
the meetings, the participants announced the prices they intended to
charge, but made no promises that they would adhere to
those prices. Gary, the dinners' organizer, claimed they were a lawful
way to stabilize steel prices by fostering information-sharing and
cooperation.
In 1915, the trial court held that the dinners amounted
to price fixing, but that U.S. Steel's resort to them only proved that
the firm could not control steel prices on its own and therefore could
not have monopolized the industry. In 1920, the Supreme Court affirmed
the trial court's ruling.
1912 Directors
In 1912, the 23 directors of U.S. Steel were J.P.
Morgan, J.P. Morgan Jr., Judge Elbert Gary, Henry Frick, William Moore,
Edmund Converse, George F. Baker, George W. Perkins (a J.P. Morgan
partner), Henry Phipps, Norman B. Ream, Daniel G. Reid, Peter A. B.
Widener,
Percival Roberts Jr., Richard Lindabury, James H. Reed, Charles Steele,
Robert Winson, Alfred Clifford, James A. Farrell (president), William
E. Corey, John F. Dryden, Clement A. Griscom, and Samuel Mather (iron
mines). The 23 directors also sat on the boards of railroads, banks,
insurance companies, express
companies, and various other industrial corporations.
Former Carnegie partner Henry Phipps was a new addition
to the board while Charles Schwab, former president of Carnegie Steel
and U.S. Steel's first president, was gone. After several clashes with
Elbert Gary, Schwab left in 1903 to head up Bethlehem Steel, which he
gained control of. Bethlehem became
the world's second-largest steel producer due to its innovation, the
H-beam (I-beam), which revolutionized construction and made possible
the skyscraper.
By 1910, the Rockefellers had sold most of their stock
in U.S. Steel and were no longer represented on the board of directors.
John D. Rockefeller Jr. resigned in 1910, stating the Rockefeller
holdings were no longer large enough to justify a directorship.
Rockefeller Senior had already retired and Henry Rogers
had died in 1909.
The First World War
In 1914, the U.S. was affected by a brief depression as
a result of the start of the First World War. The U.S. was only engaged
in the war for little more than a year and a half, so a number of
steel-making facilities, including new ones, were not put to much use
for
actual wartime production. Production had just moved into high gear at
the time of the Armistice in 1918. There was a drop in production in
1919, partially due to the Great Steel Strike, followed by a sharp
recovery in 1920.
The Great Steel Strike of
1919
The Great Steel Strike of
1919 was an attempt by the
weakened Amalgamated Association of Iron and Steel Workers (AA) union
to organize the United States steel industry in the wake of the First
World War. The strike began on September 22, 1919, and
ended on January 8, 1920. William Z. Foster, later the leader of the
Communist Party of the USA was National Co-Director of the Strike
Committee. Foster discusses the strike at length in his book, The
Great Steel Strike and its Lessons (1920) and, more briefly, in
his later book American Trade
Unionism (1947).
On April 7, 1918, Foster introduced a resolution into
the Chicago Federation of Labour, signed by the Railway Carmen (steel
car builders) and a dozen other metal trade unions that called for a
nationwide AFL campaign to organize the steel workers. Samuel Gompers,
head of AFL, showed little interest and
referred the resolution to the approaching convention of the AA. The AA
convention evaded the resolution. Foster reintroduced the resolution
into the CFL, then was sent to the AFL Convention in ST Paul, June 1918
as a CFL delegate, to get some action.
Gompers let the resolution
be adopted but delayed
holding a meeting of delegates during the convention to start the
campaign. After Foster's protests, a hurried lunchtime meeting was held
which Foster saw as an attempt to kill the campaign. Gompers was not
present. Foster took charge and because the time
was short he made a list of the names of all delegates present and
called a new meeting for the next day at which Gompers was invited to
preside. Gompers came but refused to make the announcement of the steel
meeting so Foster was forced to do it. A formal conference was
scheduled for six weeks later. Foster
notes that the delay was deadly because the war period was prime time
for organizing and the war was nearing an end. He saw this as
deliberate sabotage by AFL bureaucrats.
The Chicago Steel Conference was held August 1-2, 1918.
Gompers refused to lead and put Foster on the spot to make proposals,
which Foster did. He called for a whirlwind campaign initiated at once
in all important steel centres to be carried on jointly by all unions
with jurisdiction in the steel industry. All
methods would be used: mass meetings, noted speakers, bands, parades,
full page newspaper ads, etc. All the unions would supply money and
organizers. Foster estimated the campaign would take six weeks. The AFL
bureaucrats at the meeting opposed the idea of a national drive and
called for instead focusing in
a few localities or mills "to show the workers what we can do and win
their confidence." The funding assessment proposal was not even voted
on. Gompers withdrew from the meeting on the second day and appointed
John Fitzpatrick in his place. Foster concluded that the AFL leaders
were uninterested in organizing
the steelworkers.
Foster led the campaign ahead anyway but was forced to
concentrate in the Chicago district, which included the U.S. Steel Gary
works and three other Chicago District mills. In Gary 15,000 workers
turned out for the first meeting with similar mass turnouts in the
other three steel towns. Steel workers poured
in the union by the thousands. Foster saw this success as an indication
of how successful the national campaign -- with the war still on --
would have been but the AFL leadership continued to show little
enthusiasm. But lacking money and organizers, the campaign was still
spread to other districts.
The steel barons met the campaign with ferocious
resistance. To head off the worklers they gave four successive national
wage increases and finally the basic 8 hour day. Then the war ended and
an industrial slump set in. This weakened the workers' offensive and
intensified the owners' offensive. The right of
workers to assemble in the steel towns was attacked, organizers were
beaten and arrested, and two organizers, Fannie Sellins (see
http://www.kentlaw.edu/ilhs/sellins.htm) and Joe Starzeleski, were
murdered. Company unions were organized, 30,000 workers were fired for
joining, KKK movements were fostered, and
elaborate spy systems were used. As well, the top leadership of the AFL
and the 24 affiliated unions continued to sabotage the campaign by
staying away from it and by contributing minimal funds. The AFL itself
contributed no money. But even so, the campaign, in 14 months of bitter
struggle, organized a minimum
of 250,000 workers in many key places of the steel trust in the main
steel districts.
Memorial to
martyred union organizer Fannie Sellins at the entrance to Union
Cemetery, Arnold, Pennsylvania. |
The Great Steel Strike began September 22, 1919. Elbert
Gary, head of U.S. Steel, refused to meet with the workers. The
committee called a strike with 365,000 workers going out in 50 cities
of 10 states. Almost every steel plant of U.S. Steel and the big
independents was paralyzed. The demands of the workers
were: right of collective bargaining, reinstatement with pay of all men
discharged, eight hour day, one day's rest in seven, abolition of 24
hour shift, increase in wages to guarantee an American standard of
living, standard scales of wage in all trades and classifications of
workers, double pay for all overtime after
8 hours and for Sunday and holiday work, check off dues system,
principles of seniority to apply to the work force, abolition of
company unions, and abolition of physical examinations of applicants
for work.
Steelworkers in
Cleveland, Ohio (left) and Gary, Indiana participate in the Great Steel
Strike of 1919.
The steel corporations
fought the strike desperately.
The strikers faced armies of scabs, private gunmen, deputy sheriffs,
police and soldiers. Civil rights were suppressed. A ferocious
publicity campaign was carried out against the strikers. Sabotage was
also carried out within the ranks of the workers. The AA
tried to obtain a separate agreement. The Stationary Engineers stayed
at work. The Railroad Brotherhood refused to call out their workers,
who worked on the short lines connecting the steel mills with the
mainline railroads. During the strike, 22 workers were killed, hundreds
beaten, several thousands arrested, and
over a million and a half men, women and children struggled and starved
But the strike, although it eventually abolished the twelve hour day
and caused many other improvements did not win its major objective of
unionization. On January 8, 1920, the organizers called off the strike.
The bitter three and a half month
strike was defeated and the steel workers' new unions were smashed.
Gompers publicly charged Foster with losing the strike,
stating that U.S. Steel had wanted the strike. Gompers also said that
calling the strike had opposed U.S. President Wilson's wish that the
strike be postponed until after the president's national industrial
conference in October which would have supposedly
established industrial peace between capital and labour in the United
States. Gompers and other union leaders had publicly endorsed President
Wilson's proposal to postpone the strike, without consulting Foster or
the steel committee. Only the leadership of the Blacksmiths and the
Mine Mill and Smeltermen had definitely
opposed holding back the strike. At the same time, the rank and file
workers
overwhlemingly demanded the strike go on as scheduled. Even Gompers'
own man Fitzpatrick agreed the strike should go on.
The outcome of Wilson's National Industrial Conference
confirmed Foster's strategy. At this time the large employers had just
launched the biggest open shop drive in American labour history as part
of the post-war offensive to strip the workers of the better wages,
shorter hours, and union organizations that
had built up during the war. In the end, even the reactionary Gompers
leaders walked out of the conference. In retrospect, Foster concluded
that had his original plan been adopted by the AFL at the Chicago
Conference the war-time strike would have been short and victorious.
The victory would have raised the whole
trade union movement to a much higher level of strength and
development. Its defeat was a big factor in intensifying the heavy
employers' offensive and deepening the reactionary trend in the unions
during the following years.
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