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The American Steel Industry, 1850–1970

The American Steel Industry, 1850–1970: A Geographical Interpretation

Kenneth Warren
Copyright Date: 1973
Pages: 352
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  • Book Info
    The American Steel Industry, 1850–1970
    Book Description:

    period of international leadership was challenged, this book interprets steel from the viewpoints of historical and economic geography. It considers both physical factors, such as resources, and human factors such as market, organization, and governmental policy.In major discussions of the east coast, Pittsburgh, the Ohio Valley, the Great Lakes, the South and the West, Warren analyzes the location and relocation of steel plants over 120 years. He explains the influence on location of a variety of factors: The accessibility of resources, the cost of transportation, the existence of specialized markets, and the availability of entrepreneurial skills, capital, and labor. He also evaluates the role of management in the development of the industry, through an analysis of individual companies, including Bethlehem, Carnegie, United States Steel, Kaiser, Inland, Jones and Laughlin, and Youngstown Sheet and Tube.Warren examines the influence exerted on the industry by complex technological changes and weighs their significance against market forces and the supply of natural resources. In the production process alone, the industry changed from pig iron to steel; from charcoal to anthracite; to bituminous coking coal; and from the widespread use of low-grade ore from the eastern United States, to the high quality but localized deposits of the Upper Great Lakes, to imported ores.Unlike other industrialized nations, the United States has undergone major geographical shifts in steel consumption since the 1850s. As the American population moved south and west into new territory, steel followed. Warren concludes that these radical alterations in the distribution and demand were the decisive force in the location of steel production.

    eISBN: 978-0-8229-7873-2
    Subjects: History, Business

Table of Contents

    (pp. v-vi)
    J.G., F.V.E., J.A.S. and C.D.H.
    (pp. xii-xiii)
  3. CHAPTER 1 Location of Heavy Industry
    (pp. 1-10)

    The briefest consideration of the location pattern of manufacturing in any advanced economy reveals a highly complex situation. The older and more highly developed the economy the more difficult is analysis of the pattern. To make some order out of the apparent chaos appropriate tools and a plan of action are essential. It is useful to start with certain simplifying assumptions, but as these yield their crop of results they must be modified, more variables being introduced in order to tackle some of the remaining problems. Bit by bit a more complete insight into the reality of location patterns is...

  4. CHAPTER 2 American Iron Production to the Mid-Nineteenth Century
    (pp. 11-40)

    In 1850 United States population was 23 millions. The population of the British Isles was 27 millions, of whom 6·5 millions lived in a still united but overwhelmingly rural Ireland. American pig iron output was 0·62 million net tons, that of British 2·75 million. Most British iron had been made with mineral fuel for three quarters of a century, and Cort’s process of puddling and rolling with coal had focused the industry in big units on the coalfields and had reduced costs of production, so that British iron was competitive in all coastal markets of the world. About half of...

  5. CHAPTER 3 The Westward Movement of the Iron Trade
    (pp. 41-64)

    Already in the 1850s certain trades were growing more rapidly in the west, and following the Civil War this trend became much more noticeable. New activities shunned the east, and existing firms in some cases moved their whole operations from one to the other. While new growth points emerged and flourished on the one hand, on the other whole metal-working regions seemed on the edge of extinction. In the seventies, however, the change was less cataclysmic than later (Table 7).

    Reasons for the shift westwards are to be found in the rapid economic growth there (Table 8), and the development...

  6. CHAPTER 4 Iron Production beyond the Manufacturing Belt
    (pp. 65-87)

    Outside the evolving manufacturing belt of the north-east the iron industry made much slower and uncertain progress. In the old north-west or Upper Lakes district and in the west there were raw material supply difficulties, a critical deficiency of fuel in the former and problems with both fuel and iron ore in the latter. The South, particularly the areas around Chattanooga and the new town of Birmingham, was well endowed with both coal and ore. Their quality, it is true, was inferior to that of Connellsville coal or Lake ore but a major compensating advantage was their close proximity. All...

  7. CHAPTER 5 The Rail Trade
    (pp. 88-108)

    The United States had 4,185 miles of railroad before the first heavy rail was rolled in the country. The Lehigh Coal and Navigation Company made cast iron rails in 1826, but its works had a short life. Flat rails, strips of iron which were spiked down onto the ties, were also produced, but no heavy, wrought iron rails. American orders flooded into Wales, one agent alone placing orders for 40,000 tons in Britain in 1836. However, as demand increased, so too keen competition among Welsh works caused the quality of their product to decline, and in 1842, helped by a...

  8. CHAPTER 6 The Locational Implications of Changes in Raw Materials, Techniques, and Ecónomic Organization 1890–1920
    (pp. 109-133)

    The rapid rise of the United States to a predominant position in world output of iron and steel at the end of the nineteenth century was the outcome of complex factors. Growth in national wealth, in population, and the spread of economic development over the whole subcontinent undoubtedly greatly assisted or perhaps called into being a pioneering spirit in matters of expansion and modernization, and, when the growth rate periodically slackened, firms for many years proved ready to engage in cutthroat competition. There was a fresh, new-world readiness to scrap and rebuild, but while adaptation, absorption, and the elimination of...

  9. CHAPTER 7 Varying Patterns of Development 1890–1920. I. Pittsburgh and Chicago
    (pp. 134-144)

    The iron and steel industry in both Pittsburgh and Chicago began near the present city centres. The first Pittsburgh foundries, naileries, and mills were in the streets and along the river edges near the Point. When the North Chicago Rolling Mill was completed in the summer of 1858 its site on the north branch of the Chicago River, 3 miles inland from the lake, was open prairie just outside the town. In both places early plants remained growth points; in Chicago until the end of the century, in Pittsburgh until much later.

    From the Point works were built up river...

  10. CHAPTER 8 Varying Patterns of Development 1890–1920. II. Decline and Revival in the East
    (pp. 145-159)

    At the end of the nineteenth century the metal centres east of the Appalachians suffered severely in competition with the west. Rail mills were driven to the wall, foundry iron furnaces closed, and, as Mesabi ore began to move down the lakes, large numbers of eastern ore pits were abandoned to become covered with scrub or fill with water. Charcoal and anthracite were both discredited fuels, and surviving works had long hauls on coke. Many eastern plants were small and antiquated, unfitted for the new era, and even the big concerns like Bethlehem, Pennsylvania, and Lackawanna were soon eclipsed by...

  11. CHAPTER 9 Varying Patterns of Development 1890–1920. III. Steel-making along the Lake Erie Shore and in the Valleys District
    (pp. 160-175)

    Between 1890 and the First World War two major new steel districts emerged-the Lake Erie shore from Lorain to Buffalo and the Mahoning and Shenango Valleys, commonly known as the ‘Valleys’, and later as the Youngstown district. Even though they are near together the reasons for their growth and many of their characteristics are different.

    As plant grew in size and complexity and integration of iron-making, steelworks and mills at the same place was seen to be more desirable, so big, fIat sites with access to process water in very large volumes increased in value. With the exception of Cleveland,...

  12. CHAPTER 10 The Structural Steel Trade
    (pp. 176-181)

    Early railroad bridge building employed wood, but as traffic grew, loads became heavier and speeds greater so that stronger structures became essential. Cast iron beams were sometimes used, though a large number of firms which began to build with them had extremely short lives. By the 1850s some wrought iron was employed: in 1859 the New York Central built the first bridges wholly of wrought iron. Five years earlier, the first iron beams for fireproof buildings had been rolled. From this period dates the establishment of the structural iron business both east and west of the Alleghenies.

    Cooper and Hewitt...

  13. CHAPTER 11 Steel-making in the South
    (pp. 182-194)

    Hopes for southern steel-making were institutionalized in the names of its new industrial towns—South Pittsburg, Sheffield, Bessemer—but for long eluded realization. At least twenty-one different attempts to make steel in Tennessee and Alabama ended with laboratory success but commercial failure.¹ Technical problems were serious enough; their solution pushed up production costs and so partly, sometimes wholly, cancelled out the advantage of cheap pig iron. High assembly costs, inadequate local markets and costly access to distant ones, shortage of capital, operations on too small a scale, and often ill-equipped-all these problems continued to plague the promoters of southern steelworks....

  14. CHAPTER 12 The Interwar Years. I. Pricing Policies and the Changing Balance of Locational Advantage
    (pp. 195-213)

    The price of steel is a major item in the cost of relatively few finished products; steel transport cost is naturally much less important still. Even so, geographical pricing systems have been the centre of fierce controversy. Change in delivered costs may substantially affect the consumer’s profit margins; to the producer, with a large capital investment, co-operative regulations of delivered prices may contribute to the stability which he so much desires. With a heavy product, and a large country, it is not surprising that uniform delivered prices have not been used for steel in the U.S.A. Basing point pricing, in...

  15. CHAPTER 13 The Interwar Years. II. Sheet Steel and the Establishment of New Steel Centres
    (pp. 214-231)

    Sheet steel was for long a relatively minor mill product. In 1890 output of thin sheets was one-twentieth the total output of rolled iron and steel. In 1907 production was still exceeded by that of rails, plates, wire rods, structural shapes, skelp and merchant bars. From the First World War there was a very rapid advance. (Table 78) By 1917 sheet output was 7·1 per cent of the total production of hot rolled iron and steel, in 1929 12.7 per cent and by 1940 24 per cent. The motivating force was a rapid growth in consumption and a change in...

  16. CHAPTER 14 The Interwar Years. III. The West
    (pp. 232-239)

    Repeated failures in attempts to make steel west of the Rockies contrasted sharply with the dynamism of the western economy generally. Between 1920 and 1940 the national increase of population was 24·5 per cent. The eight mountain states almost exactly matched this rate but in the three Pacific coast states the increase was 74·8 per cent and in California just over 100 per cent. Already the westerner was wealthier than the average American and in the late 1920s motor vehicle ownership was already as high as 337 per 1000 of the population. As the Editor of theIron Trade Review...

  17. CHAPTER 15 Second World War Steel Extensions
    (pp. 240-248)

    The Second World War was an interlude of great locational significance. There were important changes in raw materials and products; much more important, this was the period in which the west and south-west at last made the breakthrough into large-scale steel-making. As there was much excess steel capacity at the end of the thirties the industry was cautious in its attitudes to major defence expansion. Government planning for this began in summer 1940. By the following year there were suggestions of demand for 110 million tons of steel in 1942, over 25 million tons beyond current capacity. Between summer 1939...

  18. CHAPTER 16 The Postwar Steel Industry. I. Materials, Technology, and Markets
    (pp. 249-261)

    Since the Second World War only two wholly new integrated steelworks have been built, and few big plants have been closed. Even so the framework within which the industry operates, its raw materials, processes, and markets have very largely changed. In response locational change has taken the less spectacular but still very important form of differential rates of growth between various districts and plants, new patterns of raw material assembly, and alterations in the source or destination of finished products. Technological change is conditioned by material availability and will not be undertaken unless market prospects are right; in short, materials,...

  19. CHAPTER 17 The Postwar Steel Industry. II. Districts beyond the Manufacturing Belt
    (pp. 262-282)

    The drift of technology in postwar years was in the main to the detriment of the Upper Lakes, with beneficiation of ore, higher freight rates, and a switch to road transport of steel. Even fuel economy, an absolute gain, lessened the relative advantage of a low lake rate on coal to Duluth as compared with points on the lower lakes. Use of large electric furnaces and continuous casting plant has made theoretically possible a solution of the two main weaknesses of the district, a long haul on coal and a market too scattered to justify the large central operations which...

  20. CHAPTER 18 The Postwar Steel Industry. III. The Manufacturing Belt: General Considerations and the Ohio Basin
    (pp. 283-300)

    In spite of the impressive growth of steel capacity in the west and Gulf south-west the greatest growth in consumption, capacity and production continues to be centred in the Manufacturing Belt. In 1947 metal fabricating plants in fifteen states of this belt consumed 83·8 per cent of the nation’s steel. By 1963 the share of the same states had fallen to 78·2 per cent but in tonnage terms they registered a 12·3 million ton increase as compared with 6·4 million tons in the rest of the nation.¹

    However, there has been a centrifugal movement within the area. (Fig. 36) In...

  21. CHAPTER 19 The Postwar Steel Industry. IV. The Manufacturing Belt: The Lake Shore and the Mid West
    (pp. 301-317)

    In 1968 the four steel districts along the shores of the Great Lakes—Buffalo, Cleveland, Detroit, and Chicago—produced 50·9 million tons of steel, a total exceeded by only two steel-making nations, the U.S.S.R. and Japan. Between 1947 and 1968 the share of these districts in U.S. production rose from 33·6 to 38·8 per cent, an increase of 22·3 million tons out of a national increase of 46·2 million tons.

    The largest part of the capacity is still in the Chicago district, but over the postwar period growth on Lake Erie has been much more impressive. In 1947 Chicago plants produced...

  22. CHAPTER 20 The Postwar Steel Industry. V. The Manufacturing Belt since 1945: The East
    (pp. 318-328)

    The steel centres east of the Alleghenies have made considerable headway since the Second World War. In 1947 their share of national output was 12·1 per cent but by 1968 13·8 per cent. However, improvement of the district’s standing has been smaller than was widely anticipated by mining and plant engineers, government spokesmen, and acknowledged experts from the world of economic consulting and academic study in the early postwar years. Moreover its share of national production reached a peak between 1957 and 1960; since then there has been a slight fall. By 1970 fifteen eastern works operated a total mill...

  23. Epilogue: The United States and World Steel
    (pp. 329-332)

    The massive expansion of American iron and steel manufacture since the mid-nineteenth century has been accompanied by sweeping geographical changes. The most decisive locational influence has come from radical alterations in the distribution of demand. Growth of markets along the ‘western waters’ or in the woodlands or prairies between them pulled the growth centre of iron manufacture over the Appalachians in the middle years of the nineteenth century. In the decades around 1900 consumption west of the Mississippi provided a great boost for Chicago steelworks, and since 1940 the Pacific coast and the Gulf south-west have crossed consumption thresholds enabling...