Tungsten in Peace and War, 1918–1946

Chapter 4. TUNGSTEN AND THE GREAT DEPRESSION

The formative years of the Nevada-Massachusetts Company ended just as America’s greatest economic crisis began. Instead of better times, the tungsten business slid downhill along with the rest of American industry after the market crash in the fall of 1929. Through the decade of uncertainty and upheaval that followed, Charles Segerstrom managed his affairs with remarkable resilience and pragmatic adaptation to change. In the process his company not only survived but grew to national prominence as America’s foremost tungsten producer. As Nevada-Massachusetts gained greater stature, so did its president. Segerstrom found himself on a national stage during the early years of the New Deal as spokesman for domestic tungsten producers. The experience reinforced his convictions, common to conservative businessmen in the thirties, that government intervention was more hindrance than help in solving the nation’s economic problems. HOOVER THE “GREAT ENGINEER” The American Institute of Mining and Metallurgical Engineers is the nation’s oldest and largest society of mining professionals. When the Nevada branch met at Reno in December 1928, the audience was in a celebratory mood, for one of their own had just been elected president of the United States. On the speaker’s platform hung a “handsome” portrait of Herbert Hoover, presented by fellow member N. H. Getchell, Hoover’s Nevada campaign manager.1 The mining industry had reason to celebrate. Though Hoover had left mining behind upon entering public life in 1914, his reputation as a tough but fair businessman remained both a tribute to past successes and a promise of effective leadership. Engineers applauded his devotion to “systematic management ,” and his insistence on productivity and efficiency in the workforce. As secretary of commerce under both Harding and Coolidge, Hoover had TUNGSTEN AND THE GREAT DEPRESSION 4 70 T U N G S T E N I N P E A C E A N D W A R enhanced his reputation in the business world. A capitalist with a progressive vision, Hoover posed no threat to the classical model of free enterprise. Business leaders welcomed his efforts to harmonize relations between government and industry through voluntary associations. He defended high tariffs and hard money and at the same time worked to improve labor relations and expand overseas markets for American goods. Promoted as both the “Great Engineer” and the “Great Humanitarian” for his earlier work on behalf of Belgian relief, Hoover seemed an ideal candidate to manage the nation’s affairs.2 The principal speaker at the Reno meeting was Ott F. Heizer, general manager of the Nevada-Massachusetts Company. He carefully reviewed company operations and technical problems over the past three years. While admitting that Chinese ore imports had hurt domestic ore sales, he was encouraged by recent reports of the “increasing scarcity of Chinese placer.” Rising demand for new products made with high-quality steel alloys also seemed promising . Safeguarding the tungsten industry’s future, however, required political intervention, a conviction Heizer shared with Segerstrom, an ardent Hoover Republican on the California Central Committee. Both hoped the new president would fulfill the protectionist plank in the 1928 Republican platform by raising the tariff on tungsten.3 “SUPERPROTECTIONISM” AND THE SMOOT-HAWLEY TARIFF Protection was high on the national agenda even before Hoover took office. With an agricultural recession still in effect and farm purchasing power lower than before the First World War, both parties endorsed protectionist planks during the 1928 campaign. For Democrats under pressure from southern agrarian interests the chief issue was “equalization” of farm income with other segments of the economy. At best they were reluctant protectionists, torn between wanting to help farmers and at the same time keeping a lid on consumer prices. Republican Party leaders, however, saw no reason to equivocate. In an op-ed piece released in January 1929, Senator Reed Smoot asked the American people to consider a simple question: “Shall tariff rates be high enough to promote and encourage our own citizens, or low enough to encourage foreigners?” His answer, of course, was to protect both agriculture and industry by raising the tax on imports to prohibitive levels.4 Pressured by calls for a special session on tariff revision even before Hoover took office, the lame-duck Congress began hearings in January 1929. Though farm problems had been the main issue, Willis Hawley, chairman of the House Tungsten and the Great Depression 71 Ways and Means Committee, restricted only the time...