Episode 18

The region of Connellsville contains almost 150 square miles underlaid with coal that has a particular heat value when submitted to the process known as coking.As early as the late eighties certain operators had discovered this fact and were coking this coal on a small scale.It is the highest tribute to Frick's intelligence that he alone foresaw the part which this Connellsville coal was to play in building up the Pittsburgh steel district.The panic of 1873, which laid low most of the Connellsville operators, proved Frick's opportunity.Though he was only twenty-four years old he succeeded, by his intelligence and earnestness, in borrowing money to purchase certain Connellsville mines, then much depreciated in price.From that moment, coke became Frick's obsession, as steel had been Carnegie's.With his early profits he purchased more coal lands until, by 1889, he owned ten thousand coke ovens and was the undisputed "coke king" of Connellsville.Several years before this, Carnegie had made Frick one of his marshals, coke having become indispensable to the manufacture of steel, and in 1889 the former distiller's accountant became Carnegie's commander-in-chief.Probably the popular mind associates Frick chiefly with the importation of Slavs as workmen, with the terrible strikes that followed in consequence at Homestead, with the murderous attack made upon him by Berkman, the anarchist, and with his bitter, longdrawn-out quarrel with Andrew Carnegie.

Frick's stormy career was naturally the product of his character.

On the other hand, temperamental pliability and lovableness were the directing traits of the man who, in his way, made contributions quite as solid to the extension of the Pittsburgh steel industry.Schwab worked with the human material quite as successfully as other men worked with iron ore, Bessemer furnaces, and coal.He handled successfully what was perhaps the greatest task in management ever presented to a manufacturer when to him fell the job of reorganizing the Homestead Works after the strike of 1892 and of transforming thousands of riotous workmen into orderly and interested producers of steel.In three or four years practically every man on the premises had become "Charlie"Schwab's personal friend, and the Homestead property which, until the day he took charge, had been a colossal failure, had developed into one of the most profitable holdings of the Carnegie Company.As his reward Schwab, at the age of thirty-four, was made President of the Carnegie corporation.Only sixteen years before he had entered the steel works as a stake driver at a dollar a day.

When the Carnegie group began operations in the early seventies, American steel, as a British writer remarked, was a "hot-house product"; yet in 1900 the Carnegie partners divided $40,000,000as the profits of a single year.They had demonstrated that the United States, despite the high prices that prevailed everywhere, could make steel more cheaply than any other country.Foreign observers have offered several explanations for this achievement.

American makers had an endless supply of cheap and high-grade ore, cheaper coke, cheaper transportation, and workmen of a superior skill.We must give due consideration to the fact that their organization was more flexible than those of older countries, and that it regulated promotion exclusively by merit and gave exceptional opportunities to young men.American steel makers also had scrap heaps whose size astounded the foreign observers; they never hesitated to discard the most expensive plants if by so doing they could reduce the cost of steel rails by a dollar a ton.Machinery for steel making had a more extensive development in this country than in England or Germany.

Mr.Carnegie also enjoyed the advantages of a high protective tariff, though about 1900 he discovered that his extremely healthy infant no longer demanded this form of coddling.But probably the Carnegie Company's greatest achievement was the abolition of the middleman.In a few years it assembled all the essential elements of steel making in its own hands.Frick's entrance into the combination gave the concern an unlimited supply of the highest grade of coking coal.In a few years, the Carnegie interests had acquired great holdings in the Minnesota ore regions.

At first glance, the Pittsburgh region seems hardly the ideal place for the making of steel.Fortune first placed the industry there because all the raw materials, especially iron ore and coal, seemed to exist in abundance.But the discovery of the Minnesota ore field, which alone could supply this essential product in the amounts which the furnaces demanded, immediately deprived the Pittsburgh region of its chief advantage.As a result of this sudden development, the manufacturers of Pittsburgh awoke one morning and discovered that their ore was located a thousand miles away.To bring it to their converters necessitated a long voyage by water and rail, with several reloadings.They overcame these obstacles by developing machinery for handling ore and by acquiring the raw materials and the connecting links of transportation.Ore which had been lying in the wilds of Minnesota on Monday morning was thus brought to Pittsburgh and made into steel rails or bridges or structural shapes by Saturday night.The Carnegie Company first acquired sufficient mineral lands to furnish ore for several generations and organized an ore fleet which transported the products of the mines through the lakes to ports on Lake Erie, particularly Ashtabula and Conneaut.The purchase of the Bessemer and Lake Erie Railroad, which extended from Conneaut to Pittsburgh, made this great transportation route complete.Besides freeing their business from uncertainty, this elimination of middlemen naturally produced great economies.