The Company Town (24 page)

Sparrows Point provides a noteworthy contrast to Gary. The town and mill, located on a peninsula at the confluence of the Chesapeake Bay and Baltimore Harbor, were projects of the Pennsylvania Steel Co., a subsidiary of the Pennsylvania Railroad. While Midwestern plants depended upon iron ore from the Mesabi Range and the western United States, Pennsylvania Steel got ore from Cuba, and later from South America. Company executives figured that meant an Atlantic shore location made more economic sense. Development moved quickly: In the 1880s, company point man Frederick Wood traveled to Cuba to contract for the ore, scouted out potential sites for the U.S. works, and recommended the Maryland location. The company quickly and quietly acquired the land for $57,900. Before a stone was laid, Luther Bent, president of the steel company, came to an agreement with Maryland's Democratic machine
politicians that Pennsylvania Steel would have absolute political control over Sparrows Point—everything from hiring teachers to controlling the police. In 1891, Bent signed papers incorporating the Maryland Steel Co. of Baltimore County. He named Wood as president of the new enterprise and his brother Rufus as general agent in charge of town affairs.

Interestingly enough, the Woods were born in Lowell, Massachusetts, sons of a Boott Mills weaving-room foreman, and they brought a Boott-like sense of social hierarchy with them to Maryland. After laying out and constructing Sparrows Point on a grid of rectangular blocks, with streets named simply for letters of the alphabet, the company allocated houses according to one's place in the corporate pyramid. Avenues A through D, closest to the water, were for executives; Avenues E through F were for foremen and skilled workers; and remaining lettered streets were for workers of lesser rank. Homes became smaller and neighborhoods denser as the alphabet progressed.

The company owned all buildings directly and rented them out to employees, meaning that, of course, tenants had to leave if they lost or gave up their jobs. The houses were substantial and inexpensive, renting for between $5.50 and $12 a month. Once again, of course, the company's primary housing concern was for managers and skilled workers: On the far north side of the peninsula was a group of shanties for unmarried immigrants and single black men—six-room affairs housing up to four men per room, with no running water, and privies out back.

There were two schoolhouses in town, one for whites and another for blacks. Seven churches were present on land rented from the company for $1 per year, and no alcohol was allowed in the town.

Although many of the residences in Sparrows Point were above average for a company town, there were similarities to coal-mining communities. Rents, for example, were deducted from pay. There were no independent stores in Sparrows Point, only a company store where credit was extended in the form of scrip. Company executives got stock in the store and bonuses based on its earnings, which ran between 10 percent and 12 percent a year.

And in what was standard practice in steel facilities, the plant ran long hours: The day shift was eleven hours, followed by a thirteen- or fourteen-hour
night shift and a twenty-four-hour swing shift on Sunday. (Every two weeks, the shifts reversed so that those working days went onto nights and vice versa; on the day of the shift turn, half of the workers had to pull a twenty-four-hour stint.) There were no vacations, and two unpaid holidays per year. The Sparrows Point facility was a self-declared open shop—no union allowed.

By 1910, 4,000 men were employed there, 75 percent in the works and the rest in the shipyard. It had already become the largest employer in Maryland. But following a drop in global sales of rails, and drastic cuts in the workforce, the company sold out to Bethlehem Steel in 1916. Bethlehem president Charles M. Schwab, who'd come to that company only a year after resigning from U.S. Steel, saw Britain, France, and Russia as profitable wartime clients and courted them even when the United States was supposed to be a neutral power. Munitions and armor-plate sales abroad allowed Schwab to transform Sparrows Point into a much larger works, employing 12,500 men at its peak.

Wartime production demands, it turned out, weren't altogether to the liking of steel executives. President Woodrow Wilson's National War Labor Board sought a détente with organized labor and began proceedings against Bethlehem Steel, forbidding it from blocking union activities and requiring the organization of shop committees. In response, the company began an employee-representation plan much like the one at Colorado Fuel and Iron. Employees elected representatives who met annually with top management; elected plant committees met six times a year to discuss such issues as transportation, the company bonus system, safety, housing, and grievances. Management, however, could simply terminate any grievance.

Altogether, the Sparrows Point formula seemed to work even without offering home ownership, which seemed to be a key to worker contentment in Vandergrift. When pent-up wartime demands and grinding, dangerous work shifts combined to explode in the form of a national 1919 steel strike, only five hundred Sparrows Point men walked out.
¹⁶

During the 1910s, the steel industry seemed to arrive at a formula for avoiding industrial strife. The corporations were not above coal-industry-like repression, albeit of a less violent nature: Many workers were required to sign “yellow-dog” contracts vowing not to join unions, and suspected violators were discharged and blacklisted. Companies maintained elaborate and efficient departments for spying on employees. But equally important, the steel towns themselves, along with other corporate welfare measures, seemed to reconcile workers to lives of nearly ceaseless, low-paid toil.

Steelworkers likely viewed home ownership or even low rents, as in Sparrows Point or the Carnegie-built dwellings at Munhall, as a pay subsidy. Moreover, the central place of the factories in the towns, and of the guiding and beneficent hand of the plant managers, probably shaped residents' sensibilities. Company largesse was evident: Over a twelve-year period ending in 1924, U.S. Steel spent more than $22 million on playgrounds, schools, gardens, clubs, and a visiting-nurse program. Town sanitation facilities were another big expense. U.S. Steel funded Boy Scout troops and sports teams, and Bethlehem Steel, a ninety-piece, touring military band. Such efforts built a sense of pride and company loyalty among workers and a positive attitude toward these corporations among the public at large.
¹⁷

There were other corporate welfare measures, too. In 1903, U.S. Steel began a stock-purchase plan that allowed model employees to buy shares on installment at below-market prices, and more than 26,000 employees immediately took part. Republic Steel, Cambria, and Youngstown Sheet and Tube copied the program. By 1921, Bethlehem Steel workers owned company stock worth $40 million. Under Schwab, that company particularly favored paying monthly bonuses tied to productivity increases—“a cash premium on personal efficacy and endeavor,” in his words. These bonuses went to managers and skilled workers only, however. As in most regards, the semiskilled and particularly the unskilled, who got a flat 37 cents per hour at Bethlehem, were neglected.
¹⁸

Skilled workers were also made aware that there were clear avenues for promotion and that they were ever being prepared to ascend the job ladder. The unskilled received little in the way of pay or perks, as most seemed content with what they got. Before World War I, the immigrant
ranks included a great many unmarried men who believed they were in the United States only temporarily, just long enough to gather sufficient funds to buy property back in their home countries. They expected to endure a period of harsh sacrifice, doing unpleasant and even dangerous work, and their greatest complaint came when they felt there was not sufficient work to go around.

Perhaps the biggest problem for the steel companies before World War I came from the period's influential social critics and reformers. The 1909 Pittsburgh Survey, and a series of articles for
American Magazine
summarizing the survey findings, exposed the industry's relentlessly long work hours, speed-up, low pay, and repressive attitude that “stifles initiative and destroys healthy citizenship.” The U.S. Senate's labor committee denounced U.S. Steel's “brutal system of industrial slavery,” while the
New York World
ran a series of articles on steel-town conditions, which the newspaper called “a crime against humanity.”

Judge Gary, for one, was contrite—at least a little bit. He responded by enhancing the corporation's social welfare programs. The company initiated a new “boost for safety” program in the mills, adopting a variety of effective safety devices and practices along with a generous compensation plan for the injured. But despite the fact that much of the criticism was focused on the steel industry's long workdays, U.S. Steel clung to the two-shift, seven-day system.

At one of the regular, lavish dinners that industry executives held for the purpose of praising themselves (and fixing prices), Gary announced: “The man who has the intelligence and the success and the capital to employ labor has placed upon himself voluntarily a responsibility with reference to his men. We have the advantage of them in education, in experience, in wealth, in many ways, and we must make it absolutely certain under all circumstances that we treat them right.” Such a responsibility, it almost goes without saying, did not extend to permitting unionism. There, too, a matter of principle was at stake, the steel companies argued before a congressional investigation of the steel industry: No man's right to work should be abridged by a requirement that he join any organization.
¹⁹

During the run-up to the war, maintaining wages rather than cutting them had become a consensus policy within the industry, even during
financial downswings. The question of unionism seemed largely moot: Outside of U.S. Steel, all steel mills were nonunion after 1908, and Gary's corporation adopted a policy of starving the union out, regularly idling mills where the union had any membership. The war, however, changed all that. In Gary, 11,896 men were employed in steelmaking by 1917. Although wages increased by 21 percent by 1916, growing demand for steel first from Europe and then from the U.S. government led profits to double, then to triple. A persistent scarcity of labor and of living space—Gary experienced a shortfall of 4,000 housing units, according to its
Daily Tribune
—led to worker restiveness and even a revival of the Amalgamated Association. By war's end, that organization had a membership of 15,000, up from 6,500 in 1914 .
²⁰

Organized labor seemed to have an ally in the Wilson administration. Its National War Labor Board—which primarily sought labor peace to guarantee industrial productivity—asserted that workers had a right to organize in unions without interference. It ordered Bethlehem Steel to stop blocking the union and to organize shop committees. As a halfway measure and in what they hoped the government would regard as a show of good faith, the companies threw ever more energy into organizing employee-representation plans, notably at Midvale, Bethlehem, Youngstown Sheet and Tube, Inland Steel, and more. U.S. Steel held back from employee-representation plans, saying that its wage policies and welfare spending, which had tripled during the war, should be sufficient to satisfy employees. Meanwhile, companies stepped up their patriotic-propaganda efforts: Illinois Steel asked its workers to sign a “pledge of patriotism” vowing to oppose disruptive actions; flag days and patriotic signs were common; in Gary, there were dramatic patriotic parades through the streets, one featuring 25,000 marchers and delegations from Greek, Romanian, Hungarian, Serb, Croat, and Russian societies.
²¹

By 1919, with the war over, the workers were ready to reap the reward for their patriotic efforts. The American Federation of Labor's National Committee for Organizing Iron and Steel Workers demanded improved wages, an eight-hour day and a six-day week, abolition of the twenty-four-hour shift, and collective bargaining. It set a strike date of September 22.

Reporting on how steelmakers were gearing up for the strike in the Pittsburgh area, the
New York World
wrote: “It is as though preparations
were made for actual war.” The sheriff of Allegheny County mobilized 5,000 deputies on the eve of the strike, and 3,000 more were sworn in at McKeesport, Pennsylvania. Publicly, steel company executives said they expected few workers to back the walkout. However, by the union's count, 365,000 men, or perhaps half of U.S. steelworkers and many more than the companies expected, responded, shutting down about half of the industry.

Across the land, police broke up workers' meetings and beat and jailed strikers, and the steelmakers brought in strikebreakers, including some 30,000 southern blacks, to run the mills.

In Gary, patriotism—that last refuge of a scoundrel—showed its usefulness again. With 85 percent of the city's 18,000 steelworkers honoring the strike, there was calm at first, then clashes with black strikebreakers on October 4, prompting intervention by 1,500 federal troops under General Leonard Wood. The military declared martial law, prohibited all outdoor meetings, and began arresting pickets and strike leaders, putting the miscreants to work sweeping the city's streets. Wood—who incidentally as a U.S. presidential candidate enjoyed the backing of Judge Gary as well as Morgan partner and U.S. Steel board member George W. Perkins—ardently fell to his work, repeatedly identifying the union with radicalism. “Gary is a hotbed of anarchy,” he announced. The strike, he found, had been instigated by a “dangerous and extremely active group of IWW and the Red anarchist element.” Wood was joined in his scare campaign by the Loyal American League, a business-backed group that worked to sway native-born workers away from the “Hunky” strike, and the
Tribune
, which ran banner headlines declaring RED PLOT UNCOVERED and REDS' BOMBS MADE HERE. By November, most Gary strikers had returned to work.