Beyond Rust. Allen Dieterich-Ward

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СКАЧАТЬ vast steel empire, centered in Pittsburgh, with an enormous array of iron and coal mines, railroad links, furnaces and rolling mills that allowed for the transformation of raw materials into finished products by all Carnegie-controlled companies. The secret to his success was high volume/low cost manufacturing—the application of the Pennsy’s formula of “big trains, loaded full, and run fast” to the mass production of steel. The purchase of the Homestead Works (1883) and Duquesne Works (1891), following capital shortages and labor strife among the previous owners, allowed Carnegie the capacity to dominate the manufacture of steel rails and he also began moving into rolled steel and other goods. Through precise accounting and careful analysis of costs, Carnegie was able to drive down dramatically the price per ton of steel produced forcing his rivals to consolidate, move into niche markets, or fold altogether. Shrewd deal making, political intrigue and his increasing economies of scale also allowed Carnegie to negotiate shipping costs and access to natural resources at advantageous rates. By the end of the century, Carnegie Steel controlled the largest and richest deposits of coking coal and iron ore then known. Its Pittsburgh area plants were the most modern in the world, with an annual output 700,000 tons more than that of Great Britain and a profit in 1900 of $40 million.¹⁹

      In addition to the purely economic explanation for Carnegie’s success in transforming American manufacturing in the late nineteenth century, it is essential to consider the epistemological shifts in the relationship between humans and nature underpinning this transition. By 1870, as manufacturing—once perceived as an art, controlled, at least in part, by its practitioners on the foundry floor—evolved into an applied science, manipulated and overseen by professional managers, engineers, and scientists, business leaders increasingly saw the economic potential of applying chemistry and metallurgy to the production process. Carnegie looked for profits at every stage of steel-making and inculcated in his managers the need for constantly updating equipment that might be out-of-date though not outworn. Soon after the opening of ET, for example, its Bessemer converters became outdated when Sidney Gilchrist-Thomas discovered a new way to use iron ore with a higher phosphorous content. Carnegie immediately recognized the value of this discovery and obtained the rights to the process, which proved to be more effective in open-hearth furnaces. With substantial gains to be made at high volumes, he was prepared to scrap all his Bessemer converters despite the hundreds of thousands of dollars invested in them. Responding to objections from British iron workers that his methods created waste and recklessly destroyed equipment, Carnegie famously declared, “Most British equipment is in use twenty years after it should have been scrapped. It is because you keep this used-up machinery that the United States is making you a back number.”²⁰

      The repercussions of Andrew Carnegie’s steel empire spread throughout the Upper Ohio Valley, pulling in new residents, reshaping community bonds, and transforming the physical landscape—in effect creating a new “Steel Valley” region that superseded even if it did not fully displace earlier regional connections. The period witnessed the creation of many works of art celebrating the triumph of mass production, while the negative environmental effects of smoke, slag, and other forms of industrial pollution were often ignored or interpreted as positive signs of economic growth. Existing industrial employers modernized their works, and new innovators, such as George Westinghouse who arrived in 1873, also contributed to the region’s rapid economic growth. Between 1860 and 1890, Pittsburgh’s population again surpassed that of Cincinnati, more than tripling from fewer than 180,000 to nearly 552,000 residents. This population increase corresponded to a growth in manufacturing employment from 20,500 in 1860 to 97,600 in 1890, compared to a growth from 30,208 to 103,010 in Cincinnati. The importance of the vertically integrated industrial firm in driving this growth is clearly visible as Pittsburgh dramatically outpaced its downriver rival in the size of manufacturers, with an average plant of forty employees in 1890, compared to only eleven per factory in Cincinnati.²¹

      Other communities also reoriented their economies away from agriculture and small-scale craft industries toward heavy industrial manufacturing and the extraction of natural resources. Wheeling and Steubenville emerged as important subsidiary centers of heavy industry with their own steel and iron producers, railroad links, and burgeoning workforce. Wheeling carved a niche for itself as a supplier of nails and by 1880 had thirteen iron and steel works, the most prominent of which were the LaBelle Iron Works and the Riverside Iron Works where Valentine Reuther began his career. As with Carnegie Steel, after reorganizing in 1875 the LaBelle Works controlled costs through vertical integration by acquiring a stake in iron ore mines in Minnesota, coal mines and coke ovens in Pennsylvania, furnaces and mills in Steubenville, and a host of other operations connected by railroad to its sprawling facility in Wheeling. However, Carnegie’s ability to access credit during the critical period surrounding the Panic of 1873 provided an opening for ET and Pittsburgh more generally that entrepreneurs in Steubenville and Wheeling could not match.²²

      As a result, despite Wheeling’s success it was soon clear that it had been thoroughly outclassed by its upriver rival. The eight iron works in the city itself had a combined capitalization in 1880 of $2,274,425 with more than 2,600 employees and an output valued at $4,416,567. This compared to the 8,000 employed in 1885 at the Homestead Works alone. The 1900 census reported just over 11,000 manufacturing employees in Ohio and Marshall Counties (Wheeling), while Allegheny County (Pittsburgh) had risen to a whopping 128,000 workers. Relatively speaking, the percentage of workers employed in manufacturing was about the same, 15 percent for Wheeling and 16.5 percent for Pittsburgh, but the dramatic overall growth in the latter was directly attributable to the “capital, transportation, business facilities and successful management which could not be equaled” in the smaller city. Even the most successful of Wheeling’s iron producers, LaBelle, maintained a management structure that was more akin to the network of merchant families and artisanal ironman than the professional managers and scientists of Carnegie Steel. The company was founded by a small group of ex-Pittsburgh ironworkers who saw the potential of the community’s access to coal deposits and river transportation as well as the rail connection of the B&O. There were no capitalists in the partnership and through the 1920s, when it was reincorporated as the Wheeling Steel Corporation with more than four thousand employees, was striking in its continued reliance on management still “in the hands of descendants of the founders, many of the officials and directors being connected by blood or marriage.”²³

      By the end of the nineteenth century, the region that had once been a colonial frontier and later a gateway to western settlement and markets had become the Steel Valley—the world’s greatest steel-producing region with a new economic system based on the large vertically integrated corporation. Between 1870 and 1890, metropolitan Pittsburgh emerged as the nation’s most powerful industrial area due in large part to the successful application of new scientific and management strategies in the process of steel making. While Wheeling and Steubenville also steadily added to their industrial capacity, the overwhelming growth of their larger neighbor drew them into the metropolitan region as satellite communities. A 1902 history of the Upper Ohio Valley made clear this transition, when it stated that Wheeling’s modest success as a manufacturing center was due not only to “the cheapness of fuel” but also to the city’s very “proximity [to] the Pittsburg (Pennsylvania) district.”²⁴

      Mountains of Fire

      By 1907 capitalists and corporate managers as well as entrepreneurs and local residents looking to participate in the heavy industrial economy had dramatically reshaped the social and physical landscape of the Upper Ohio Valley in ways that would have long-lasting repercussions. In that year the newly organized Russell Sage Foundation financed an extensive analysis of the nation’s most important industrial area, resulting in a landmark six-volume study, entitled The Pittsburgh Survey. The project’s scope was regional by design, an attempt to methodically examine workers and communities in the new system of urban factories, mill towns, and mining camps built on top of a pre-existing framework of agricultural settlements, market towns, and river-oriented cities. Survey director Paul Kellogg explained this vision of the area as an integrated unit, a complex totality that inextricably linked society and culture, humans and the natural world. “Pipe lines that carry oil and gas, waterways that float an acreage of coal СКАЧАТЬ