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Erik Visits an American Grave, Part 500


This is the grave of Charles Schwab.

Born in 1862 in to German parents, Schwab grew up in the town of Loretto, Pennsylvania. He became a young protege of Andrew Carnegie in the steel industry, working as an engineer and rising very fast in the company. By 1887, he was general superintendent of the Homestead Works. In 1897, he was named president of Carnegie Steel. When Carnegie wanted to retire, he negotiated the deal to sell it to J.P. Morgan and U.S. Steel was born. Schwab was the first president.

However, Schwab and other U.S. Steel executives hated each other, especially Elbert Gary, so he left in 1903 and started Bethlehem Steel. The company for awhile became the nation’s largest steel producer, especially involved in shipbuilding. It was his company that created what was then called the H-Beam, which is the reinforced steel that allowed the building of skyscrapers. He created the town of Bethlehem as his own company town. And like other Gilded Age capitalists, he demanded complete fealty from his workers. When his workers went on strike in 1910, he called out the Pennsylvania State Police as his own personal strikebreaking force. Ensuring that workers lived lives of misery, all while talking about your own moral righteousness in following the dictates of the free market, that was what being a steel capitalist was all about. He wasn’t quite as ham-handed with the labor violence as Henry Clay Frick. He preferred a more subtle organization of labor spies to ensure that workers remained impoverished and without power on the job.

Schwab made money hand over fist. Bethlehem became the nation’s second largest steel company. He had huge contracts with the government in World War I to provide steel and munitions for the military. He had actually completely ignored American neutrality after the war broke out, openly supporting the Allies by funneling all his goods through Canada before shipping them to Britain and France. In 1918, Woodrow Wilson named him the head of the Emergency Fleet Corporation, giving him authority over all shipbuilding. He made sure to line his own pockets with the right contracts. He was actually accused war profiteering after the war, but was if it did come to trial, was acquitted (this point is somewhat unclear in the sources I can find). This was pretty in character actually. Schwab’s grandfather had owned a factory that made blankets for the Union Army during the Civil War and lined his pockets too, as did so many Civil War-era capitalists. It’s certainly my feeling that the corruption of the Gilded Age did not happen because of the Civil War. It was already coming as capitalism grew into a huge force. Schwab and his grandfather were part of the general attitude of capitalists through this whole period and now again today.

Through all of this, Schwab was a sketchy character, a real hustler who could put on one face for you and another for someone else. Thomas Edison called him “the master hustler.” Bribery was certainly in his toolkit. In fact, he provided the steel for the Trans-Siberian Railroad after he gave $200,000 as a gift to the mistress of the Grand Duke Alexis Aleksandrovich. His smooth ways did impress some people; Dale Carnegie talked favorably of his methods with people in How to Win Friends and Influence People. But then that probably tells you most of what you need to know about a guy like Schwab. It was all bullshit about how Schwab used innovative methods of inspiration to get those workers to produce steel. Those who slobber at the feet of capitalists today still love to discuss it. Meanwhile, anyone who talked union was fired and thrown onto the streets. He was really good at producing his own self-serving propaganda too, such as his 1916 short book, Succeeding With What You Have.

Schwab also liked the live the fast life. Some of the Gilded Age capitalists talked a big game about being moral in their personal lifestyle–Carnegie was notorious for this sort of moralism–but others lived it up and Schwab was very much in this latter group. He built huge mansions, had affairs, sired at least one child out of wedlock, bought himself a personal rail car that cost $100,000, and gave huge parties.

In fact, he outspent himself, despite his huge earnings. When the Great Depression hit and the steel industry went into the doldrums, it actually knocked an aging and still hard partying Schwab down with it. He lost his huge home to creditors and actually lived in a small apartment at the end. Bethlehem Steel never went under, but it only struggled along until World War II when the rise in war orders brought the company back to prosperity. He wasn’t that involved in the day-to-day operations at this point, but was still sure to keep his company union-free in the Little Steel strikes of 1937 that led to the deaths of several workers and a huge loss for the United Steelworkers of America. His company was not unionized until the federal government effectively mandated it in 1941 if the steel companies wanted war contracts. By then, he was dead. Might have killed him anyway.

Charles Schwab died in 1939. He is buried in Saint Michael Cemetery, Loretto, Pennsylvania.

At least as far as I can tell, the financier Charles Schwab is of no relation, which is kind of odd given they share the same name. But the latter came from California.

This is the 500th post in this ridiculous series, which I’m not sure is a milestone or a sign that I need help. A couple of interesting coincidences here. The first post in this series was steel capitalist scumbag Henry Clay Frick and we return to another steel capitalist scumbag for the 500th. That absolutely was not intentional. Even less intentional was that this should fall on July 4. Would have been July 3 if it wasn’t for the labor history post yesterday. Nevertheless, if you would like this series to visit some of the other people discussed in this post, you can donate to cover the required expenses here. Elbert Gary is in Wheaton, Illinois and Dale Carnegie is in Belton, Missouri. Previous posts in this series are archived here.

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