Western Pennsylvania and the Second Industrial Revolution

Late in the 19th century, America rose to world industrial leadership, and the Pittsburgh/Monongahela Valley region was the driving force. Calling attention to the impressive magnitude of this feat, one of America's foremost business historians pointed out that "(i)n 1880, the nation's national income and its population were one and a half times those of Great Britain. By 1900, they were twice the size of Britain's, and by 1920, three times the size."1 The industries that led the country to world leadership shared important traits: They produced durable goods like steel, plate glass, aluminum and electrical equipment essential to the further development of America's transportation, construction and industrial infrastructure; their industrial processes utilized new sources of energy - coal, coke (a coal derivative) and gas - and reorganized and mechanized production; they were among the country's largest and most highly capitalized; they integrated vertically from natural resources to final distribution; and they developed and instituted new managerial practices, including systematic and scientific management, cost accounting, and full executive responsibility. Collectively, these characteristics constituted a "Second Industrial Revolution" that transformed America's industrial structure and paved the way for mass production consumer goods industries of the later 20th century.

In its contribution to the Gross National Product and the increasing percentage of workers it employed. manufacturing was the leading sector in the Second Industrial Revolution. A unique mix of producer durables drove this trend. Between 1870 and 1930, the annual rate of increase for coke production was 5.4%, 10.4% for steel and a dramatic 24.3% for aluminum.3 While demand provided the impetus, such large increases were themselves made possible by dramatic changes in the structure of industrial production - the increased burning of fossil fuels - coal, natural gas and oil; the development and widespread use of electricity; new technologies that mechanized production processes; increasingly complex managerial structures; growing capitalization and concentration of industries; and the expansion and ethnic recomposition of the work force. These significant changes transformed older industries like iron and glass, and created new ones like electrical manufacturing and aluminum.

Steel built America's manufacturing supremacy - steel for railroads, equipment, construction, and

1

Alfred D. Chandler. The Visible Hand: The Managerial Revolution in American Business (Cambridge: Harvard University Press. 1977), p. 498.

Harold G. Vatter, The Drive to Industrial Maturity (Westport, CT: Greenwood Press. 1975), p. 132.

3

Arthur F. Burns. Production Trends in the United States Since 1870 (NY: NBER, 1934), pp. 58-60.

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appliances - and Pittsburgh area steel makers dominated the industry. Home to the works of Carnegie and, later, U.S. Steel, the region also attracted other large primary metal producers, including Jones & Laughlin, Federal, National and Republic; secondary metal processors such as the mammoth Mesta Machine Company at West Homestead and Heppenstall Company and MacIntosh-Hemphill in Pittsburgh: and hundreds of small machine shops and foundries. The region's steel output reflected this concentration of facilities. Between the early 1870s and 1920, Allegheny County registered annual decadal growth rates of 158% in pig iron and ferro-alloy production, more than double the country's average. Moreover, in 1900, Allegheny County produced almost 25% of all pig iron and ferrous-alloys in the United States and fully 40% of the U.S. total of steel ingots and steel for castings.5

Adapting practices first associated with the nation's railroads, Pittsburgh steel makers pioneered manufacturing techniques that came to define the Second Industrial Revolution. Andrew Carnegie's tutelage in the late 1860s under Thomas Scott, then head of the Western Division of the Pennsylvania Railroad, provided him with first hand experience organizing and managing a highly integrated, wellfinanced, tightly controlled, multi-regional enterprise, experience he later transfered to the production of iron and steel. In addition to building "the largest and most energy-consuming" blast furnaces in the world, Carnegie brought to iron and steel making important new "techniques of coordination and control," rigid cost accounting procedures, new conceptions of plant design and layout, "hard-driving" production methods, and the most highly experienced and proven managers in American industry, changes he first successfully put in place at his massive Edgar Thompson Works at North Braddock, on the outskirts of Pittsburgh. The widespread adoption throughout American industry of these recognizably modern organizational and managerial methods set both the direction and pace of the "Second Industrial Revolution."8

Rich in coal and natural gás, southwestern Pennsylvania developed other industries that played key roles in

*Many important interpretative aspects of the Pittsburgh region's industrial development have been covered in Edward K. Muller. "Metropolitan Industrialization: The Pittsburgh Region. 1870-1920 (Unpublished paper presented at the Annual Meeting of the Association of American Geographers, San Diego, 1992).

5 Calculations are the author's, based on figures taken from Bureau of Business Research, University of Pittsburgh, Industrial Databook for the Pittsburgh District (Pittsburgh, PA: Bureau of Business Reaearch, University of Pittsburgh, 1936), p. 29-33.

"Livesay & Chandler Given that the railroads were the largest customers for Bessemer steel during the industry's period of

initial expansion - the late 1860s and 1870s. Chandler calls "the transfer of administrative techniques from the railroads to iron- and steel-producing plants...perfectly natural."(Chandler. Visible Hand, p. 267).

7 Joel

Joel Sabadasz. "Duquesne Works: Overview History," (Unpublished HAER manuscript, 1991), passim.
Chandler. Visible Hand. pp. 258-69.

87-194 - 95 - 3

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the Second Industrial Revolution. The steel industry's insatiable demand for high-quality coke, its primary fuel, linked Connellsville coke producers to Pittsburgh steel makers in the 1870s, a relationship Carnegie reinforced in 1881 by purchasing control of the Frick Coke Company and solidified in 1889 by placing H.C. Frick in charge of his steel operations. George Westinghouse's work in Pittsburgh with natural gas distribution systems, growing out of the discovery of gas under his East End estate, led to his pioneering development of alternating electrical current and the establishment of Westinghouse Electric. Westinghouse had come to the Pittsburgh region from Schenectady, New York to make railroad equipment, an industry he helped build into one of the region's largest.10 Rich deposits of coal and natural gas attracted manufacturers from every branch of the glass industry - plate and window, tableware. and bottles and jars. Glass companies such as Pittsburgh Plate Glass, the American Window Glass Company, the United States Glass Company and Hazel-Atlas were not only large, but led in the industry's mechanization. In 1889, Alfred Hunt and others produced commercial aluminum in their plant in downtown Pittsburgh for the first time. Shortly thereafter, they obtained additional financing from Pittsburgh bankers, coal and railroad men, and moved their Pittsburgh Reduction Company, which became the Aluminum Company of America (Alcoa) in 1907, to nearby New Kensington on the Allegheny River, adjacent to the coal and gas deposits necessary to generate the massive amounts of electricity so essential to their electrolytic aluminum smelting process."

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Pittsburgh bankers and corporate executives grew wealthy by investing in local industry, trading capital for control of major companies in the "new" industries of the Second Industrial Revolution. The Mellon interests "were at the center of capital formation in Pittsburgh."12 and presided over a labyrinthian network of corporate and financial connections among some of the country's most powerful industrial corporations. Railroad executives provided practical experience, management skills, and capital, as in the cases of Carnegie, the Pitcairns, (with interests in both the Pennsylvania Railroad and Pittsburgh Plate Glass), and George Westinghouse, who counted the country's largest railroads as airbrake customers and financial backers.

Joseph Frazier Wall. Andrew Carnegie (Cambridge: Oxford University Press. 1970), pp. 471-536.

10-Technological and Industrial Transformations in the Pittsburgh Region, 1850-1990: The Railroad Industry as Transportation Infrastructure and Economic Actor," Unpublished Paper. Carnegie-Mellon University. Seminar in Applied History (Fall, 1992).

11Fred Quivik. "The Connellsville Coke Region." Report prepared for the Historic American Engineering Record, 1991), Chapter V: Harold C. Passer, The Electrical Manufacturers. 1875-1900 (Cambridge: Harvard University Press, 1953), pp. 129-150); Ronald W. Schatz. The Electrical Workers: A History of Labor at General Electric and Westinghouse. 1923-1960 (Urbana: University of Illinois Press. 1983), pp. 3-27; George David Smith, From Monopoly to Competition: the Transformations of Alcoa, 1888-1896 (Cambridge: Cambridge University Press. 1988), pp. 1-42.

12Smith, From Monopoly to Competition. p. 32.

As much as it reshaped industry, the Second Industrial Revolution also transformed nineteenth century patterns of urban development. Between the end of the Civil War and the beginning of World War I, manufacturing activities in the areas surrounding Pittsburgh increased at a rate even greater than they did in the City of Pittsburgh proper. As they sought to expand and streamline production facilities, local manufacturers confronted insurmountable problems posed by an older manufacturing environment: lack of available space for expansion, rising taxes, too few railroad sidings, unstable supplies of natural gas, and little room for waste disposal. Wanting to remain close to the region's ample supplies of fuel, skilled labor, transportation and capital, manufacturers left the City of Pittsburgh and founded a host of new communities like Monessen, New Kensington, Vandergrift, Jeannette and Aliquippa, a short distance outside the city.13 It is no coincidence that all celebrate centennials from the late 1980s through the next decade. 14

Indeed, it was the broad arc of industrial communities surrounding Pittsburgh that accounted for most of the region's growth in value added and manufacturing employment. In 1879, the City of Pittsburgh "accounted for 81% of the value added for the area;" this figure was only 31% by 1919.15 But the manufacturing mix in these areas differed from that of the old central city. Instead of a plethora of different industries, each with its own developmental cycles, Pittsburgh's industrial suburbs were often single industry communities. These ranged from the steel communities of Monessen (Westmoreland County) and Aliquippa (Beaver County), to the Turtle Creek Valley (Allegheny County) cluster of electrical and railroad equipment facilities built by the Westinghouse Company, to the agglomeration of glass factories in Jeannette (Westmoreland County). Consequently, they were subject to all the vicissitudes of single-industry dominance: rapid growth, high levels of employment during the first half of the 20th century, and dramatic decline after the 1960s as part of an international restructuring of producer goods industries.

The jobs that grew out of the Second Industrial Revolution transformed the racial and ethnic composition of the American working class. Beginning late in the 19th century and accelerating during World War I, thousands of African-Americans left the agricultural regions of the South for the industrial cities of the North. Similarly, between 1890 and 1910, tens of thousands of southern and eastern European immigrants came to the United States, radically altering older, 19th century immigration patterns dominated heavily by

13 Muller, "Metropolitan Industrialization."

14, 'Glenn E. McLaughlin. The Growth of American Manufacturing Areas (Pittsburgh, PA: Bureau of Business Research, University of Pittsburgh, 1938), pp. 128, 186-8.

15 McLaughlin. Manufacturing Areas, pp. 186-8.

workers from northern and western Europe. By the last quarter of the century, many of these earlier immigrants had risen to the ranks of semi-skilled or skilled workmen in southwestern Pennsylvania's older, established industries, such as iron, steel, glass or coal. Recent innovations in production methods in these industries, and the relatively new, systematically organized electrical equipment and aluminum manufacturing industries, created thousands of jobs filled by workers with few industrial skills who migrated to the Pittsburgh region from the economically devastated agricultural areas of southern and eastern Europe, the Middle East, and the American South.16

The Second Industrial Revolution also transformed the structure of unionism and industrial relations in American industry. Throughout the period, southwestern Pennsylvania was both a bastion of powerful industrial craft unions as well as a stronghold of anti-unionism. Craft unionism flourished in all the nation's industrial cities between the depressions of the 1870s and the 1890s. The most powerful unions in Pittsburgh and the nation were based in heavy industries like iron and glass that had yet to experience the substantive reorganization that was an integral part of the Second Industrial Revolution. The local union environment was so strong that the Federation of Organized Trades and Labor Unions, precursor to the American Federation of Labor, selected Pittsburgh for its organizational meeting in 1881. Moreover, the National Labor Tribune, a strong supporter of craft unions, was founded in Pittsburgh during a long newspaper strike by Thomas Armstrong, and gained nationwide following among workingmen from the 1870s until well into the 20th century. But the changes brought on by the abandonment of iron puddling and rolling, the advent of the steel industry, and the mechanization of the various branches of the glass industry severely weakened unionism in precisely the industries in which newer immigrants were finding work. Indeed, the struggle at Homestead in 1892 by the Carnegie Steel Corporation to break the hold of the Amalgamated Association, and U.S. Steel's ruthless put down of the 1919 organizing drive were epic battles between labor and capital that singed the national conscience and kept the industry union-free until the late 1930s. Repeated attempts by the United Mine Workers to organize the Connellsville coke fields also failed, as did several organizing drives at the mammoth Westinghouse East Pittsburgh-Turtle Creek Valley works. Thus, if vibrant 19th century craft unionism was emblematic of the persistence of the craft skills of older immigrant groups from western and northern Europe, then early 20th century non-unionism was equally emblematic of the reorganization of production brought by the Second Industrial Revolution and of the newer immigrant groups from southern and eastern Europe. Equally as significant, the changes wrought by the Second Industrial Revolution laid the foundation for the dramatic rise of industrial unionism in the 1930s.

16 John Bodnar, et al., Lives of their Own: Blacks, Italians and Poles in Pittsburgh, 1900-1960 (Champagne, IL: University of Illinois Press, 1982), p. 30; Peter Gottlieb, Making Their Own Way (Urbana: University of Illinois Press, 1987), passim.