Industrial Genius: The Working Life of Charles Michael Schwab (review)

In Industrial Genius, geographer and historian Kenneth Warren depicts the noteworthy rise of Pennsylvania native Charles Michael Schwab from a surveyor at the Edgar Thomson Steel Works in 1880 to the thirty-nine-year-old president of the United States Steel Corporation in 1901. Despite his remarkable success, Schwab grew dissatisfied with his lack of managerial power within the U.S. Steel conglomerate. After chairman Judge Elbert Gary assumed greater control of the company, Schwab soon departed U.S. Steel. He devoted the remainder of his professional life to expanding the struggling Bethlehem Steel Corporation from a specialty producer of armaments into the second largest steel manufacturer in the world.

At the same time, as the public face of the steel industry in the early twentieth century, Schwab tirelessly promoted his belief that big business served the needs of all Americans. His relentlessly probusiness, antiunion message increasingly appeared out of step with the economic and political realities of the Great Depression era. His rapidly declining fortunes, and ill health, mirrored the depressed state of the steel industry and the nation on the eve of World War II. When he died in debt in 1939, few mourned the passing of the man who at one time had personified the American steel industry.

Warren's biography paints a fascinating portrait of Schwab as the consummate business manager, chief executive, and industry "salesman." Yet, in contrast to his mentors Andrew Carnegie and Henry Clay Frick, Schwab failed to translate his professional success into a broader social and cultural legacy. He left no endowments or foundations to perpetuate his name, or to promote his values (Charles R. Schwab, who founded the Charles Schwab Corporation, was not related to Charles Michael Schwab). Instead, as Warren concludes, "[Schwab] cannot be said to have achieved anything enduring except in business" (p. 242). Despite Schwab's shortcomings, Warren argues that he undoubtedly deserves a place next to Carnegie as one of the most influential steel industrialists of the late nineteenth and early twentieth centuries.

Industrial Genius draws on Warren's earlier studies of the American steel industry, as well as on Triumphant Capitalism (1996), his biography of Henry Clay Frick. Warren effectively cuts through the historical mythology surrounding Schwab's larger-than-life persona to reveal a man ruthlessly devoted to efficiency and technological innovation. Throughout his life, Schwab shrewdly perceived shifts in consumer demands for new types of steels and responded accordingly. He adopted open-hearth production methods at the Homestead Works as the construction industry's demand for structural steel components grew in the late nineteenth century. Later at Bethlehem Steel, he adroitly balanced the company's core focus on heavy armaments production with investments in sheet and tube steel manufacturing facilities in order to meet the growing needs of the automobile industry.

Historians of technology will find that Industrial Genius complements broader, industrywide studies of technological change such as Thomas Misa's A Nation of Steel (1995). Schwab had a hand in many of the important technological shifts that Misa discusses. Traveling extensively in Europe in the early twentieth century, Schwab played a prominent role as a transatlantic conduit for information on new European steel production methods and techniques. His later success at Bethlehem Steel also demonstrated that a small firm could take advantage of new production technologies to win market share away from larger, and more inflexible, rivals like U.S. Steel.

While Warren's biography of Schwab tends to focus on his business decisions rather than on his role as a facilitator of technological change, this study offers valuable insights into industrial practices within the American steel industry. Charles Michael Schwab may have outlived the heyday of the heroic capitalist, but his direct role in shaping American industrial development is undeniable. Warren gives Schwab his due, but more importantly, he addresses the broader consequences of Schwab's innovative life.