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  • Bethlehem Steel: Builder and Arsenal of America
  • Gregory Wood
Kenneth Warren . Bethlehem Steel: Builder and Arsenal of America. (Pittsburgh, PA: University of Pittsburgh Press, 2008. Pp. xix, 322, illustrations, tables, appendixes, notes, bibliography, index. Cloth, $45.00.)

Why did Bethlehem Steel, headquartered in eastern Pennsylvania, grow to become the second-largest steel producer in the world after the United States Steel Corporation during the twentieth century? Even more important, why did this titan of industry, whose products helped build and arm the United States during its "American Century," ultimately collapse? Instead of simply seeing Bethlehem's incredible growth (and decline) as somehow inevitable, the product of great men's genius (and later failure), Kenneth Warren pays careful attention to numerous economic, historical, and individual factors as crucial, shifting variables that shaped and determined Bethlehem Steel's fortunes over the course of its history: regional, national, and global market forces, access to raw materials, technological change, competition among industrial firms, the burden of company infrastructure, and the limited ability of company leaders to anticipate market shifts and nimbly respond to changing technologies and new competition. Using sources such as company records, trade periodicals, newspapers, and government documents, this fine study is a welcome contribution to the history of the steel industry, as well as economic and business history in general. [End Page 259]

In the early chapters, Warren shows why western Pennsylvania became the predominant region for iron-making in the United States during the second half of the nineteenth century, overtaking the small Bethlehem Iron Company of eastern Pennsylvania. The company's geographical location hindered the development of Bethlehem during these years, while contributing to the growth of the Pittsburgh region. Western Pennsylvania's proximity to bituminous coal in West Virginia, cheaper water transportation on the Great Lakes, access to high-quality Lake Superior iron ore, and closeness to expanding railroad construction in the Midwest made possible the ascendancy of Pittsburgh in iron production. At the same time, Bethlehem Iron continually struggled in eastern Pennsylvania because of declining demand for rails, as railroad construction fell off in the East, a preponderance of lower-quality anthracite coal, and dependence on more expensive, often over-land transportation to markets. Still, Warren admires the efforts of early leaders—Robert Heysham Sayre, John C. Fritz, and Joseph Wharton—who "survived" the prolonged challenge from western Pennsylvania (29). Bethlehem leaders worked hard to find new products and update equipment. By the 1880s–1890s, Bethlehem Iron cultivated a niche in the manufacture of armor plate for the US Navy as well as foreign buyers, which allowed the company to compete with the powerful Carnegie Steel firm (later US Steel).

The middle chapters of Warren's study examine Bethlehem Steel's impressive growth in the face of unstable market conditions. Formally created in 1904, the early Bethlehem Steel Corporation struggled initially to secure profits in the commercial steel industry. However, the company's turn to prosperity began during the 1910s, as the Great War dramatically increased demand for Bethlehem's armor plate, munitions, and surprisingly large shipbuilding capability. As Warren suggests, wartime mobilization propelled Bethlehem Steel's early growth. During the years of World War I, the company earned $110 million dollars (6 times more than the company earned during the 9 years that preceded the war) and the stock price increased from $30 to $600. Warren expertly details how Bethlehem president Charles M. Schwab built on the firm's wartime success with bold investments in new facilities. For example, the firm acquired the massive plant at Sparrows Point in Baltimore in 1916, the Buffalo-area Lackawanna works in 1922, and the Cambria Steel facilities in Johnstown, Pennsylvania, in 1923— acquisitions that provided the foundations of the company's [End Page 260] operations for the remainder of its history. Skyscraper construction during the 1920s finally made Bethlehem's largely eastern operations an asset rather than a liability, engendering expansion in commercial steel. Warren admires the persistence and intelligence of company leaders during the first half of the twentieth century. For example, Bethlehem Steel executives guided the firm through the collapse of the steel market during the Great Depression and the burden of increasing taxes during...

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