Changes at Bethlehem Steel
Immediately after taking over
the leadership of Bethlehem Steel, Schwab aimed the company towards expansion.
Realizing the precariousness of relying exclusively on government contracts,
he built new plants geared towards commercial products. To facilitate
this expansion, Bethlehem Steel purchased over 250 acres of land, stretching
from the South Bethlehem site to Freemansburg in the Saucon Valley. (169)(23) The company had previously bought its furnace coke from
the Lehigh Coke Company; however, Schwab had learned from Carnegie the
importance of owning all stages of supply and production. He contracted
a coke company to work in South Bethlehem from Bethlehem Steel-owned coal
mines. Schwab even went as far as to buy the plantís gas by-products,
which supplied most of the Steelís heat and power. By 1910, Bethlehemís
profits grew significantly from the rising sales and increased efficiency
that Schwab brought. (184)
One of the most notable of
the new commercial products was the Grey Structural beam. In the
early 1900ís, Henry Grey invented a design for making a single piece of
large beam used in creating buildings.
This "H" beam was an enormous improvement over the old "I" beams which
had to be riveted together out of a number of different pieces; yet few
steel manufacturers were interested in trying this new product. (44) Schwab embraced Greyís new design, and built a new structural
mill, along with a rail mill, at Saucon. For many decades the structural
mill would be one of Bethlehemís great successes. Edmund Martin even goes so
far as to say: "It is no exaggeration to say that the New York skyline
is a monument to these mills." (9)
One more significant change
affected both the steel industry and the nation during the reign of Schwab.
In 1914, World War I broke out in Europe. While it eventually removed
some young men from the work force, the war more importantly meant increased
demand for steel. Bethlehem Steel was Americaís first company to
get a "war order", thanks to Schwabís trip to Europe in 1914. He
brought back with him nearly $50,000,000 in contracts for guns, which were
soon followed by more and larger orders placed with the company.
(34) The war had the phenomenal effect of tripling Bethlehemís
capacity from 1 million tons of steel per year in 1914 to 3 million tons
in 1918. (12) Along with the growth in capacity, the work
force also expanded from 9,712 in January 1915 to 21,705 in January 1918.