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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.

(Millionaires and Managers. S. Menshikov. Moscow: Progress Publishers. 1969.)

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

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).

(Imperialism, the Highest Stage of Capitalism. V. I. Lenin. Peking: Foreign Languages Press. 1975.)

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.

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.

(Nazi Nexus: America's Corporate Connections to Hitler's Holocaust. Edwin Black. Washington DC: Dialog Press. 2009.)

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.

(American Trade Unionism. William Z. Foster. New York: International Publishers. 1947).

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