Lackawanna Steel Company
Encyclopedia
The Lackawanna Steel Company was an American
steel
manufacturing company that existed as an independent company from 1840 to 1922, and as a subsidiary
of the Bethlehem Steel
company from 1922 to 1983. Founded by the Scranton family, it was once the second-largest steel company in the world (and the largest company outside the U.S. Steel
trust).. Scranton, Pennsylvania
, grew up around the company's original location, and when the company moved to a suburb of Buffalo, New York
, in 1902, it similarly led to the founding of the town of Lackawanna, New York
.
At the beginning of the 1800s, the Lackawanna Valley
in Pennsylvania
was rich in anthracite coal
and iron
deposits. Brothers George W. Scranton
and Seldon T. Scranton moved to the valley in 1840 and settled in the five-house town of Slocum's Hollow (now Scranton) to establish an iron forge. Although Europe
ans had been making steel for nearly three centuries, the processes for creating blister steel
and crucible steel
were slow and extremely expensive. The Scrantons focused instead on manufacturing pig iron
using a blast furnace
. The Scrantons wished to take advantage of a recent technological innovation in iron smelting, the "hot blast
." Developed in Scotland
in 1828, the hot blast preheats air before it is pumped through molten iron, substantially lowering fuel needs. The Scrantons also wished to experiment with using anthracite coal to make steel, rather than existing methods which used charcoal
or bituminous coal
.
The most likely successful first use of the hot blast technique in the U.S. was carried out in 1835 at Oxford Furnace
in Warren County, New Jersey
, by William Henry, Seldon Scranton's father-in-law
. By 1838, Henry had moved to the Lackawanna Valley, where he was experimenting with using anthracite coal in steelmaking.
The Scrantons and Henry formed a partnership in 1840 to develop a hot blast furnace that used anthracite coal in the "charge" (the mixture of iron ore and coal which, when melted, created pig iron). Two other Pennsylvanians, Sanford Grant (a Belvidere, New Jersey
, businessman) and Philipp Mattes (a bank manager from Easton, Pennsylvania
), also invested in the new company, named Scranton, Grant, and Co. Henry bought 503 acres (2 km²) near Slocum's Hollow, and began building the furnace. The blast furnace was completed in the early autumn of 1841.
The company's first effort at smelting iron was not successful. Many problems plagued the iron mill, including a furnace that was not hot enough, water that ran too low in the nearby creek to turn the waterwheel-powered bellows (and thus did not provide enough air to the furnace), unsuccessful experiments with charge mixtures, clogged tuyere
s, and more. George Scranton estimated the company lost between $6,000 and $7,000 in the year ending June 1843, but the total may have been as high as $10,000. George Scranton took control of the works from William Henry, and twice rebuilt the furnace. Near bankruptcy, the partners sought new sources of capital. In May 1843, a $20,000 loan permitted the company to continue operating.
After many failures and two years of low-level and low-quality production of pig iron, the firm began producing significant amounts of pig iron in 1843. The company installed a rolling mill, five reverberatory furnace
s, 20 nail manufacturing machines, and one spike manufacturing machine. Needing still more cash, the company was reorganized in September 1846, taking new name of Scrantons and Grant. New partners were brought in, including Joseph H. Scranton (a cousin from Georgia
), Erastus C. Scranton (a cousin from Connecticut
), and John Howland (a banker and businessman from New York
). The Scranton family retained a 51.6 percent of the company's stock.
Quality control problems plagued the company and nearly drove it to bankruptcy again. By summer 1844, the furnace averaged five to seven tons of pig iron a day. Scrantons and Grant initially used the pig iron to produce nails and iron plates, but the quality of the ore — "red-short
" rather than the required close-grained "cold-short" — prevented the smelting of high-quality pig iron. The company's finances spiraled downward. Luckily, railroad networks in the U.S. were tripling in size during the 1840s, and the railroads required large quantities of rails
. But until 1844, the United States had no factories capable of manufacturing rails, and all rails had to be imported from Great Britain
. Realizing that the "cold-short" ore they used was ideal for manufacturing rail tracks, the Scrantons sought new investors whose money would permit it to build a rail track rolling mill. Benjamin Loder, president of the New York and Erie Railroad
; industrialist William E. Dodge
; and eight others invested $90,000 in the firm.
Scrantons and Grant reorganized yet again on November 7, 1846, and began calling itself Scrantons and Platt. Grant was bought out, and Howland asked to have his investment returned. The company quickly began turning out rails for the Erie Railroad, becoming the first company in the United States to mass-produce T rails. The firm's decision to manufacture rail tracks changed the fundamental nature of transportation in the United States, accelerated rail use, and eliminated American dependence on England for railroad track. Rail production began in August 1847, and the company soon employed more than 800 mostly Welsh
, Irish
, and German
workers. Shipments of rail track were hauled overland through the snow to the New York and Erie Railroad, arriving just in time to save the line from bankruptcy.
In 1851, the town of Slocum's Hollow changed its name to Scranton in honor of the owners of the iron works. The Scrantons had won approval from the townspeople some years before to rename Slocum's Hollow as the town of Harrison (in honor of President
William Henry Harrison
). The town was renamed Scrantonia in 1850, and the name shortened in 1851 to Scranton. The swiftly growing iron mill led to similar growth in the town of Scranton, whose population soared from a few hundred in 1850 to 9,000 in 1860 to 35,000 in 1870.
, a foundry
, two blacksmith
shops, two carpentry
shops, a saw mill, a grist mill, company store, 200 dwellings (to house workers), a boarding house
, iron ore mines, coal mines, a tavern
, and a hotel
.
The company also expanded into the railroad business in 1853. Needing a secure way of getting products to market without having to pay the exorbitant fees charged by the railways, the company purchased a controlling interest in the Delaware and Cobb's Gap Railroad and the Lackawanna and Western Railroad, reorganizing the combined subsidiary into the Delaware, Lackawanna and Western Railroad
.
A second generation of Scrantons took control of the Lackawanna Iron and Coal Company in the 1860s, bringing new technological innovations to the firm. William Walker Scranton, son of Joseph Scranton, was born in 1844. At the age of 23, William Walker Scranton had already become superintendent of one of the Lackawanna Iron and Coal Company's steel mills. After Joseph Scranton's death in 1872, William took control of the entire family business empire, which now included (in addition to large numbers of coal and iron mines) a bank and the City of Scranton's gas
and water works
.
During the 1870s, American railroads once more began buying track rails from Europe. The reason was the high quality of steel rail produced in Europe, thanks to the invention in 1855 of the Bessemer process
for steelmaking—which drastically reduced the fuel costs and amount of time needed to make steel as well as significantly improving the quality of the steel produced. Scranton took a leave of absence from the firm and secretly went to Britain and then Germany, where he became a puddler
and learned the secrets of making "Bessemer steel." But Scranton could not convince his business partners to adopt the Bessemer process. Meanwhile, industrialist Moses Taylor
, a protégé of John Howland's, had organized the Franklin Iron Company to supply pig iron for rail tracks to the Midland Railroad and the Sussex Railroad
(of which he was part-owner). Taylor wished to link his railroads with the Scranton-owned Delaware & Lackawanna, and believed the Lackawanna Iron and Coal Co. could turn his pig iron into finished steel—but only if the company adopted the Bessemer process. Together, Moses Taylor and William Walker Scranton convinced the company's other investors to adopt the Bessemer process in 1875 and to merge the Taylor and Scranton railways in 1881. The first "blow" (or pouring of molten steel from the Bessemer furnace into molds) occurred on October 23, 1875, and the first Bessemer steel rolled in the mill on December 29, 1875.
During the 1870s, the Lackawanna Iron and Coal Company also suffered from significant labor problems. The company was one of many which cut wages in its coal mines 30 percent in 1870. The Delaware & Lackawanna, the company railroad, also sharply cut wages for its workers. The first week of January 1871, a nascent mine workers union, the Workingmen's Benevolent Association, went on strike
for higher wages. William Walker Scranton personally helped break the strike by leading strikebreaking
miners to and from the mines each day. While escorting a body of miners from the mines one afternoon, he was attacked by a mob and in the ensuing fight two of the rioting strikers were killed. The state militia was called in to restore order, protect the strikebreakers, and help reopen the mines. The strike began to collapse in April 1871 as strikebreakers opened more mines and the strikers and their families began to starve. Violence flared again in early May, and state troops were once more called to restore order. Within a few days, the strike had largely been broken and most miners returned to work. William Scranton was arrested twice for his role in leading the strikebreakers, but acquitted at trial each time.
A second large strike hit the company in 1877. The Long Depression
began with the Panic of 1873
and did not end until 1896. By 1877, thousands of miners, steel workers, and railroad employees were out of work and wages had been slashed repeatedly. On July 23, 1877, workers in the iron and steel mills owned by the Lackawanna Iron and Coal Co. struck, seeking a 25 percent wage increase. The strike spread to rail workers the next day, and on July 25 the company's mine workers also walked out and demanded a similar wage increase. The company asked Scranton Mayor Robert McKune for police protection the same day, and McKune asked Governor John F. Hartranft
for troops. On July 26, Governor Hartranft asked President Rutherford B. Hayes
for federal troops, and (with the Great Railroad Strike of 1877
already raging) Hayes agreed to send them at the governor's request. Violence broke out on July 29: The head house
of the Penn Coal Co.'s short-line railroad was firebombed, a local bridge was burned, and many of the coal mines owned by the Lackawanna Iron and Coal Co. were flooded. The next day McKune threatened to call out the federal troops, but also offered his own services as an arbitrator. The two sides met throughout the day, and to everyone's surprise a tentative agreement was reached that evening. Although a majority of the steel workers appeared ready to accept the tentative agreement, a mob of 6,000 men formed on August 1 in downtown Scranton and resolved to reject it. When McKune appeared outside the mayor's office to try to calm the mob, shots were fired. McKune was clubbed and then stoned
. His lower jaw broken and his upper jaw fractured, McKune tried to flee but was knocked unconscious when a member of the mob hit him in the head with a hammer. A few minutes later, the county sheriff and a hastily-assembled posse arrived and fired shots over the heads of the crowd to try to disperse the mob. Several people in the crowd returned fire, wounding the sheriff and a member of the posse. The posse then fired volley after volley into the crowd, killing four and wounding hundreds. Many of those killed and injured were shot in the back as they tried to flee. Mayor McKune, although badly injured, helped restore order around 2 p.m. The following day, 3,000 federal troops arrived from Pittsburgh and invested the city. Martial law was imposed, and the strike ended several uneventfully weeks later with no agreement. The sheriff and several posse members were arrested and tried on the charge of manslaughter
, but were acquitted.
The company's labor troubles soon were supplanted by an internal struggle for control within the Lackawanna Iron and Coal Co. By 1880, the company was the second-largest producer of iron in the United States. Nonetheless, William Walker Scranton wanted the company to expand, a proposal which the board of directors rejected in 1881. Scranton quit the company and formed the Scranton Steel Co. with his brother, Walter Scranton, in 1881. Within 10 years, the Scranton Steel Co. had become so successful that the Lackawanna Iron and Coal Co. entered into negotiations to merge with the firm. The two companies merged on January 9, 1891, forming the Lackawanna Iron and Steel Company. Although the merger created nearly $1.2 million in debt for the new company, Lackawanna Iron & Steel proved to be so financially successful that it paid off the debt within a year.
had mostly organized in 1897. The union successfully struck in 1900, winning a 10 percent wage hike. The union struck again from May 11, 1902, to October 23, 1902, and won a second wage increase as well as better working conditions. A second major factor was the increasing cost of shipping iron ore to Scranton and a lack of rail lines from Scranton to the company's newly emerging markets.
The Lackawanna Iron and Steel Company decided to relocate all of its iron and steelmaking facilities to West Seneca, New York
, in 1899, drawn by the area's easy access to Great Lakes
shipping and the numerous rail lines in the area. William Walker Scranton personally made the decision to move to the Buffalo
suburb. In order to avoid speculation
in land, the Lackawanna Steel Company employed John J. Albright, president of the Ontario Power Company
, to purchase land on its behalf. Scranton, Albright and several others met in Buffalo, New York
, on March 23, 1899, to discuss the purchase of land. The group explored several sites around Buffalo on March 24, and chose an undeveloped shoreline area on Lake Erie
in what was then the western part of the Town of West Seneca that same day. Albright began purchasing land on April 1, 1899, and by the end of the month had obtained nearly all the required property for the extremely low price of $1.1 million. Albright was often accompanied on his purchasing visits by John G. Milburn
, President of the Pan-American Exposition
, and many property owners assumed the land purchases were for the Exposition.
Construction of the massive new steel mill began on July 14, 1900, and nine months later equipment was arriving from Scranton. The company dredged a ship canal
and built miles of track to link the plant with the railroads which would bring iron ore and coke
to the plant. Lackawanna Iron and Steel began building a company town
in 1901, but it lacked most services and the housing stood empty for many years.
On February 14, 1902, the company was reorganized into the Lackawanna Steel Company. It was the largest independent steel company in the world at the time. Stock worth $60 million was issued, with $20 million of the newly-raised capital paying off the construction of the new mill. The mill received its first shipment of iron ore on December 23, 1902. The plant's 6,000 workers (2,000 of whom came from Scranton) blew the first steel in early 1903. The company's property in Scranton was sold to the Lackawanna and Wyoming Valley Railroad
, which scrapped all the remaining equipment and tore down all the buildings except for the oldest stone blast furnaces.
The economic coup which William Walker Stanton had engineered did not please the board of directors, however, who replaced him in late 1904 with Edward A. Clarke. The company continued to expand, and in 1906 bought the large Pennsylvania coal mining firm of J.W. Ellsworth Company.
Lackawanna Steel Co. had a rocky relationship with the town of West Seneca. The company demanded large investments in sewer, water, gas and road improvements but refused to pay for them itself (even though the company was much wealthier than the town). The large influx of workers from the company's old Pennsylvania site swelled the Town's population, leading to the creation of extensive tracts of extremely substandard housing and very bad public health
problems (including outbreaks of cholera
, typhoid and influenza
). To save the town, West Senecans proposed separating the area around the steel mill as its own incorporated municipality. Lackawanna Steel opposed the incorporation of the proposed municipality(to be named Lackawanna), but it relented in 1909 after the two-year-long Panic of 1907
nearly bankrupted the Town of West Seneca and imperiled the company's operations.
The creation of U.S. Steel
in 1901 supplanted Lackawanna Steel as the country's largest steel manufacturer. A number of the so-called "independent" steel companies considered merger over the next two decades as a response to U.S. Steel's formation. In late 1915, Lackawanna Steel nearly consummated a merger with the Cambria Steel Company, Newport News Shipbuilding and Drydock Company, Youngstown Sheet and Tube
, and Inland Steel
. But despite the agreement of the steel companies, federal regulators, and others, the banks carrying the debt for these companies refused to approve the merger and the plan was dropped. The company's financial status varied considerably in the late 1910s. The stock set new highs and the company doubled its profits in 1917 and the first half of 1918, but in late 1918 and throughout 1919 the company fell on hard financial times.
Although Lackawanna Steel had moved to New York in part to avoid unionization, the unions followed the company. An attempt to unionize the company was made in 1919 by the Amalgamated Association of Iron and Steel Workers
. Lackawanna's Democratic
mayor, John Toomey, was supported financially by the Lackawanna Steel Co., and Toomey initiated a vicious red-baiting
campaign to smear the union organizing effort as communist
-inspired and led. The company also fired hundreds of workers in the summer and fall of 1919 for being union members or union sympathizers. Nonetheless, by 1919 more than 18,000 steelworkers at Lackawanna Steel and five other, smaller metallurgical firms in the area were organized by the American Federation of Labor
(although Lackawanna officials estimated there were far fewer union members). Lackawanna Steel officials, fearing that immigrant union members would become violent, asked for and received protection from the New York State Police
. The Lackawanna Steel organizing drive was part of a nationwide organizing effort by the union, and the union resolved to launch a nationwide strike in the fall of 1919 to organize the entire steel industry. The strike
began on September 22, with the union claiming 8,000 of the plant's 9,000 workers had struck and the company asserting only half the workers had walked out. The same day, three riots broke out in the city. Late in the afternoon, during the shift change, a crowd of 7,000 pro-union strikers and supporters began throwing rocks, bottles and debris at the company's guards, and city police were called in to break up the disturbance. At 7:20 p.m., a crowd of 3,000 unionists and their supporters intercepted a group of 200 strikebreakers leaving the plant, and chased them through the surrounding neighborhood before police intervened and stopped them. Later in the evening, a small crowd of men beat a man who announced he would work for the company's private police force, and city police once more were called in. On September 23, 1919, company police clashed twice late in the afternoon with a crowd of about 3,000 striking workers. At 5:50 p.m., after being pelted with rocks and glass bottles, company police fired more than 50 12-gauge
shotgun
s blasts into the crowd. "[F] rantic signals to cease firing" by the Lackawanna Police, who were in the middle of the crowd trying to restore order, "were disregarded by the plant guards". The company guards killed two and injured three. The plant remained closed through September 28, with only 500 employees reporting for work. Lackawanna Steel, which had employed only 72 African American
s prior to the strike, hired several thousand black strikebreaker
s and brought them to the city to maintain operations. Outraged, union workers turned to political activity. Toomey lost re-election in the city's regularly scheduled mayoral race on November 4, 1919, and John H. Gibbons, a Socialist
, was elected. Although the national organizing committee called off the strike on January 8, 1920, Gibbons' election reinvigorated the strike and some workers stayed out until June 1920. Nearly all the black strikebreakers were fired after the strike when the company took back its striking workers. The organizing campaign failed, but the company was eventually organized by the Steel Workers Organizing Committee
in the late 1930s after passage of the National Labor Relations Act
in 1935.
In the two years after the organizing drive, the company continued to see wide swings in profitability. In 1920, the company's profits fell again, and a merger was rumored. The company declared itself profitable in late 1920, and then reported large deficits in 1921. Rumors that the company might sell itself emerged in mid-October 1921, but in fact the firm went on a buying spree and snapped up a pig iron manufacturer and bridge steel maker.
Over the next several years, the Lackawanna plant continued to expand physically, its works now rambling over more than two miles (3 km) of shoreline and spilling over into the nearby town of Hamburg
. Lackawanna Steel paid about 75 percent of the taxes in the city of Lackawanna, effectively controlling city government.
In 1922, Lackawanna Steel reported very large deficits, driven primarily by the huge New York steel mill's aging equipment.
On May 11, 1922, Lackawanna Steel announced it had agreed to be purchased by Bethlehem Steel in a merger which would create a billion-dollar company. Bethlehem Steel said it would spend $10 million improving the Lackawanna mills, which were described as "obsolete" due to a lack of investment. The combined company controlled about 10 percent of the steel output of the United States, while U.S. Steel controlled about 45 percent.
A lengthy antitrust
investigation followed. The United States Senate
asked the Federal Trade Commission
(FTC) and the Justice Department
to investigate the merger the day after it was announced, which the FTC did on May 14. As the merger was approved by the two companies in mid-May, the Senate and FTC each conducted separate investigations. On June 5, 1922, the FTC issued a report concluding that the merger was in violation of the Sherman Antitrust Act
. However, United States Attorney General
Harry M. Daugherty
overruled the FTC on June 22. The merger finally took effect on October 10, 1922. Six decades later, financial analysts observed that Bethlehem Steel probably purchased Lackawanna Steel for less than half what the company was worth. Over the next decade, Bethlehem Steel spent more than $40 million modernizing the Lackawanna site.
Lackawanna continued to be a center for the manufacture of steel throughout most of the 20th century. In the 1940s, the Lackawanna steel mill employed over 20,000 people, and was the world’s largest steel factory.
abatement which were required by state and federal authorities. The company built a new facility in Burns Harbor, Indiana
, and stopped investing in new steel production methods at Lackawanna.
In 1982, Bethlehem Steel announced the closing of nearly all production at the Lackawanna Steel plant in New York. Bethlehem Steel, like many American steel companies, was encountering significant financial problems. Although the company made several public attempts to reassess the plant' viability and keep the plant open in the late 1970s, closure was a foregone conclusion for many. On June 25, 1982, Bethlehem Steel announced it would close the Lackawanna facility and lay off its remaining 10,000 workers in six weeks. The news meant the laying off of an additional 8,000 workers in Lackawanna, West Seneca, and Buffalo. An attempt was made to interest the Buffalo-based Gibraltar Steel Corporation in the plant, but this effort failed.
The Lackawanna Steel Co. plant closed on October 15, 1982. The company laid off workers in waves before the final closure, and transferred many others. On the day the plant closed, more than 6,000 workers lost their jobs (most of them high-paying). The city of Lackawanna's 22,700 people faced extremely large tax increases just to maintain basic services, as the amount of taxes paid by Bethlehem Steel fell from 66 percent of the city's revenue to just 8 percent. In addition, the city owed the company more than $5 million in tax overcharges. The United Steelworkers
later successfully sued Bethlehem Steel for prematurely terminating the fringe benefits of the laid-off steelworkers.
The Lackawanna Steel Co, site was declared a Superfund
site by the Environmental Protection Agency
(EPA) in 1988 after the EPA conducted a Resource Conservation and Recovery Act
(RCRA) Facility Assessment of the plant. The state of New York subsequently declared it a Class 2 Inactive Hazardous Waste Site, indicating the site poses a significant potential threat to human health and the environment. In August 1990, Bethlehem Steel (operating as Tecumseh Redevelopment, Inc.) and the EPA entered into an administrative consent order requiring Bethlehem Steel to identify the nature and extent of any releases of hazardous waste and mitigate any emergency situations that might be discovered during the course of the investigations. Bethlehem Steel and its successor corporations have been submitting RCRA Facility Investigation (RFI) reports since then. Although the RFI was due to be completed in 2004, it still was not complete as of June 2008. The site was also declared a brownfield in 2003 under the Small Business Liability Relief and Brownfields Revitalization Act of 2002. While this made the city of Lackawanna eligible for federal assistance money to redevelop the site, a cooperative agreement had not been signed as of May 2006.
The city of Lackawanna redeveloped some of the former Lackawanna Steel Co. land into small business zones, bringing about 700 jobs back to the town in the late 1980s. In 1993, Veritas Capital, Inc., purchased one of the bar, rod and wire plants on the old Lackawanna site and added another 250 jobs (the workers made automobile steering columns). Bethlehem Steel ended coke production at the Lackawanna site in 2001, and as of 2008 only a galvanized steel finishing plant employing about 250 people remained.
Steel Winds, an eight-windmill wind farm
owned by BQ Energy, opened on the old plant's slag heaps in September 2006.
In 2001, the Tony Award
-winning actor and playwright Ruben Santiago-Hudson
wrote Lackawanna Blues
, a one-man play which depicts a fictionalized version of the playwright's childhood growing up in Lackawanna, New York. The play, which won two OBIE
awards, features a number of characters who work or worked at the Lackawanna Steel Co. plant, and the company's role in the town is discussed several times in the play.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
manufacturing company that existed as an independent company from 1840 to 1922, and as a subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
of the Bethlehem Steel
Bethlehem Steel
The Bethlehem Steel Corporation , based in Bethlehem, Pennsylvania, was once the second-largest steel producer in the United States, after Pittsburgh, Pennsylvania-based U.S. Steel. After a decline in the U.S...
company from 1922 to 1983. Founded by the Scranton family, it was once the second-largest steel company in the world (and the largest company outside the U.S. Steel
U.S. Steel
The United States Steel Corporation , more commonly known as U.S. Steel, is an integrated steel producer with major production operations in the United States, Canada, and Central Europe. The company is the world's tenth largest steel producer ranked by sales...
trust).. Scranton, Pennsylvania
Scranton, Pennsylvania
Scranton is a city in the northeastern part of Pennsylvania, United States. It is the county seat of Lackawanna County and the largest principal city in the Scranton/Wilkes-Barre metropolitan area. Scranton had a population of 76,089 in 2010, according to the U.S...
, grew up around the company's original location, and when the company moved to a suburb of Buffalo, New York
Buffalo, New York
Buffalo is the second most populous city in the state of New York, after New York City. Located in Western New York on the eastern shores of Lake Erie and at the head of the Niagara River across from Fort Erie, Ontario, Buffalo is the seat of Erie County and the principal city of the...
, in 1902, it similarly led to the founding of the town of Lackawanna, New York
Lackawanna, New York
Lackawanna is a city in Erie County, New York, U.S., located just south of the city of Buffalo in the western part of New York state. The population was 18,141 at the 2010 census. The name derives from the Lackawanna Steel Company...
.
Founding and early years
Lackawanna River
The Lackawanna River is a tributary of the Susquehanna River in northeastern Pennsylvania in the United States. It flows through a region of the northern Pocono Mountains that was once a center of anthracite coal mining in the United States...
in Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
was rich in anthracite coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
and iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
deposits. Brothers George W. Scranton
George W. Scranton
George Whitfield Scranton was a Republican member of the U.S. House of Representatives from Pennsylvania from March 4, 1859, until his death in 1861.-Early life:...
and Seldon T. Scranton moved to the valley in 1840 and settled in the five-house town of Slocum's Hollow (now Scranton) to establish an iron forge. Although Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
ans had been making steel for nearly three centuries, the processes for creating blister steel
Cementation process
The cementation process is an obsolete technique for making steel by carburization of iron. Unlike modern steelmaking, it increased the amount of carbon in the iron. It was apparently developed before the 17th century. Derwentcote Steel Furnace, built in 1720, is the earliest surviving example...
and crucible steel
Crucible steel
Crucible steel describes a number of different techniques for making steel in a crucible. Its manufacture is essentially a refining process which is dependent on preexisting furnace products...
were slow and extremely expensive. The Scrantons focused instead on manufacturing pig iron
Pig iron
Pig iron is the intermediate product of smelting iron ore with a high-carbon fuel such as coke, usually with limestone as a flux. Charcoal and anthracite have also been used as fuel...
using a blast furnace
Blast furnace
A blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally iron.In a blast furnace, fuel and ore and flux are continuously supplied through the top of the furnace, while air is blown into the bottom of the chamber, so that the chemical reactions...
. The Scrantons wished to take advantage of a recent technological innovation in iron smelting, the "hot blast
Hot blast
Hot blast refers to the preheating of air blown into a blast furnace or other metallurgical process. This has the result of considerably reducing the fuel consumed in the process...
." Developed in Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
in 1828, the hot blast preheats air before it is pumped through molten iron, substantially lowering fuel needs. The Scrantons also wished to experiment with using anthracite coal to make steel, rather than existing methods which used charcoal
Charcoal
Charcoal is the dark grey residue consisting of carbon, and any remaining ash, obtained by removing water and other volatile constituents from animal and vegetation substances. Charcoal is usually produced by slow pyrolysis, the heating of wood or other substances in the absence of oxygen...
or bituminous coal
Bituminous coal
Bituminous coal or black coal is a relatively soft coal containing a tarlike substance called bitumen. It is of higher quality than lignite coal but of poorer quality than Anthracite...
.
The most likely successful first use of the hot blast technique in the U.S. was carried out in 1835 at Oxford Furnace
Oxford Furnace, New Jersey
Oxford Furnace was a furnace used for smelting iron located in Oxford Township, in Warren County, New Jersey, United States. Built in 1741, it was the third furnace in colonial New Jersey and the first constructed at a site where iron ore was mined. Other furnaces used ore extracted from bogs in...
in Warren County, New Jersey
Warren County, New Jersey
Warren County is a county located in the U.S. state of New Jersey. As of the 2010 Census, the population was 108,692. Its county seat is Belvidere...
, by William Henry, Seldon Scranton's father-in-law
Father-in-law
A parent-in-law is a person who has a legal affinity with another by being the parent of the other's spouse. Many cultures and legal systems impose duties and responsibilities on persons connected by this relationship...
. By 1838, Henry had moved to the Lackawanna Valley, where he was experimenting with using anthracite coal in steelmaking.
The Scrantons and Henry formed a partnership in 1840 to develop a hot blast furnace that used anthracite coal in the "charge" (the mixture of iron ore and coal which, when melted, created pig iron). Two other Pennsylvanians, Sanford Grant (a Belvidere, New Jersey
Belvidere, New Jersey
Belvidere is a Town in Warren County, New Jersey, United States. As of the 2010 United States Census, the town population was 2,681. It is the county seat of Warren County....
, businessman) and Philipp Mattes (a bank manager from Easton, Pennsylvania
Easton, Pennsylvania
Easton is a city in Northampton County, Pennsylvania, United States. The population was 26,800 as of the 2010 census. It is the county seat of Northampton County....
), also invested in the new company, named Scranton, Grant, and Co. Henry bought 503 acres (2 km²) near Slocum's Hollow, and began building the furnace. The blast furnace was completed in the early autumn of 1841.
The company's first effort at smelting iron was not successful. Many problems plagued the iron mill, including a furnace that was not hot enough, water that ran too low in the nearby creek to turn the waterwheel-powered bellows (and thus did not provide enough air to the furnace), unsuccessful experiments with charge mixtures, clogged tuyere
Tuyere
A tuyere, also can be spelled as tuyère, is a tube, nozzle or pipe through which air is blown into a furnace or hearth.Air or oxygen is injected into a hearth under pressure from bellows or a blast engine or other devices...
s, and more. George Scranton estimated the company lost between $6,000 and $7,000 in the year ending June 1843, but the total may have been as high as $10,000. George Scranton took control of the works from William Henry, and twice rebuilt the furnace. Near bankruptcy, the partners sought new sources of capital. In May 1843, a $20,000 loan permitted the company to continue operating.
After many failures and two years of low-level and low-quality production of pig iron, the firm began producing significant amounts of pig iron in 1843. The company installed a rolling mill, five reverberatory furnace
Reverberatory furnace
A reverberatory furnace is a metallurgical or process furnace that isolates the material being processed from contact with the fuel, but not from contact with combustion gases...
s, 20 nail manufacturing machines, and one spike manufacturing machine. Needing still more cash, the company was reorganized in September 1846, taking new name of Scrantons and Grant. New partners were brought in, including Joseph H. Scranton (a cousin from Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
), Erastus C. Scranton (a cousin from Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
), and John Howland (a banker and businessman from New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
). The Scranton family retained a 51.6 percent of the company's stock.
Red-short
Red-short, hot-short or Sulfur embrittlement is the quality possessed by carbon steel that suffers from having too much sulfur as an impurity.Iron or steel, when heated to above 900 °F , glows with a red color...
" rather than the required close-grained "cold-short" — prevented the smelting of high-quality pig iron. The company's finances spiraled downward. Luckily, railroad networks in the U.S. were tripling in size during the 1840s, and the railroads required large quantities of rails
Rail tracks
The track on a railway or railroad, also known as the permanent way, is the structure consisting of the rails, fasteners, sleepers and ballast , plus the underlying subgrade...
. But until 1844, the United States had no factories capable of manufacturing rails, and all rails had to be imported from Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
. Realizing that the "cold-short" ore they used was ideal for manufacturing rail tracks, the Scrantons sought new investors whose money would permit it to build a rail track rolling mill. Benjamin Loder, president of the New York and Erie Railroad
Erie Railroad
The Erie Railroad was a railroad that operated in New York State, New Jersey, Pennsylvania, Ohio, Indiana, and Illinois, originally connecting New York City with Lake Erie...
; industrialist William E. Dodge
William E. Dodge
William Earle Dodge, Sr. was a New York businessman, referred to as one of the "Merchant Princes" of Wall Street in the years leading up to the American Civil War. Dodge was also a noted abolitionist, and Native American rights activist and served as the president of the National Temperance...
; and eight others invested $90,000 in the firm.
Scrantons and Grant reorganized yet again on November 7, 1846, and began calling itself Scrantons and Platt. Grant was bought out, and Howland asked to have his investment returned. The company quickly began turning out rails for the Erie Railroad, becoming the first company in the United States to mass-produce T rails. The firm's decision to manufacture rail tracks changed the fundamental nature of transportation in the United States, accelerated rail use, and eliminated American dependence on England for railroad track. Rail production began in August 1847, and the company soon employed more than 800 mostly Welsh
Wales
Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²...
, Irish
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, and German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
workers. Shipments of rail track were hauled overland through the snow to the New York and Erie Railroad, arriving just in time to save the line from bankruptcy.
In 1851, the town of Slocum's Hollow changed its name to Scranton in honor of the owners of the iron works. The Scrantons had won approval from the townspeople some years before to rename Slocum's Hollow as the town of Harrison (in honor of President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
William Henry Harrison
William Henry Harrison
William Henry Harrison was the ninth President of the United States , an American military officer and politician, and the first president to die in office. He was 68 years, 23 days old when elected, the oldest president elected until Ronald Reagan in 1980, and last President to be born before the...
). The town was renamed Scrantonia in 1850, and the name shortened in 1851 to Scranton. The swiftly growing iron mill led to similar growth in the town of Scranton, whose population soared from a few hundred in 1850 to 9,000 in 1860 to 35,000 in 1870.
Growth years
In 1853, the firm reorganized yet again, doubling its capital investment and adopting the name Lackawanna Iron and Coal Company. Within a year, the company's assets had expanded to include three furnaces, a steel-making puddling millPuddling (metallurgy)
Puddling was an Industrial Revolution means of making iron and steel. In the original puddling technique, molten iron in a reverberatory furnace was stirred with rods, which were consumed in the process...
, a foundry
Foundry
A foundry is a factory that produces metal castings. Metals are cast into shapes by melting them into a liquid, pouring the metal in a mold, and removing the mold material or casting after the metal has solidified as it cools. The most common metals processed are aluminum and cast iron...
, two blacksmith
Blacksmith
A blacksmith is a person who creates objects from wrought iron or steel by forging the metal; that is, by using tools to hammer, bend, and cut...
shops, two carpentry
Carpentry
A carpenter is a skilled craftsperson who works with timber to construct, install and maintain buildings, furniture, and other objects. The work, known as carpentry, may involve manual labor and work outdoors....
shops, a saw mill, a grist mill, company store, 200 dwellings (to house workers), a boarding house
Boarding house
A boarding house, is a house in which lodgers rent one or more rooms for one or more nights, and sometimes for extended periods of weeks, months and years. The common parts of the house are maintained, and some services, such as laundry and cleaning, may be supplied. They normally provide "bed...
, iron ore mines, coal mines, a tavern
Tavern
A tavern is a place of business where people gather to drink alcoholic beverages and be served food, and in some cases, where travelers receive lodging....
, and a hotel
Hotel
A hotel is an establishment that provides paid lodging on a short-term basis. The provision of basic accommodation, in times past, consisting only of a room with a bed, a cupboard, a small table and a washstand has largely been replaced by rooms with modern facilities, including en-suite bathrooms...
.
The company also expanded into the railroad business in 1853. Needing a secure way of getting products to market without having to pay the exorbitant fees charged by the railways, the company purchased a controlling interest in the Delaware and Cobb's Gap Railroad and the Lackawanna and Western Railroad, reorganizing the combined subsidiary into the Delaware, Lackawanna and Western Railroad
Delaware, Lackawanna and Western Railroad
The Delaware, Lackawanna and Western Railroad Company was a railroad connecting Pennsylvania's Lackawanna Valley, rich in anthracite coal, to Hoboken, New Jersey, , Buffalo and Oswego, New York...
.
A second generation of Scrantons took control of the Lackawanna Iron and Coal Company in the 1860s, bringing new technological innovations to the firm. William Walker Scranton, son of Joseph Scranton, was born in 1844. At the age of 23, William Walker Scranton had already become superintendent of one of the Lackawanna Iron and Coal Company's steel mills. After Joseph Scranton's death in 1872, William took control of the entire family business empire, which now included (in addition to large numbers of coal and iron mines) a bank and the City of Scranton's gas
Gasworks
A gasworks or gas house is a factory for the manufacture of gas. The use of natural gas has made many redundant in the developed world, however they are often still used for storage.- Early gasworks :...
and water works
Water supply
Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...
.
During the 1870s, American railroads once more began buying track rails from Europe. The reason was the high quality of steel rail produced in Europe, thanks to the invention in 1855 of the Bessemer process
Bessemer process
The Bessemer process was the first inexpensive industrial process for the mass-production of steel from molten pig iron. The process is named after its inventor, Henry Bessemer, who took out a patent on the process in 1855. The process was independently discovered in 1851 by William Kelly...
for steelmaking—which drastically reduced the fuel costs and amount of time needed to make steel as well as significantly improving the quality of the steel produced. Scranton took a leave of absence from the firm and secretly went to Britain and then Germany, where he became a puddler
Puddling (metallurgy)
Puddling was an Industrial Revolution means of making iron and steel. In the original puddling technique, molten iron in a reverberatory furnace was stirred with rods, which were consumed in the process...
and learned the secrets of making "Bessemer steel." But Scranton could not convince his business partners to adopt the Bessemer process. Meanwhile, industrialist Moses Taylor
Moses Taylor
Moses Taylor was a 19th century New York merchant and banker and one of the wealthiest men of that century. At his death, his estate was reported to be worth $70 million, or about $ billion in today's dollars. He controlled the National City Bank of New York , the Delaware, Lackawanna & Western...
, a protégé of John Howland's, had organized the Franklin Iron Company to supply pig iron for rail tracks to the Midland Railroad and the Sussex Railroad
Sussex Railroad
The Sussex Railroad was a short-line railroad in northwestern New Jersey. It replaced its predecessor, the Sussex Mine Railroad, in 1853 and operated under the Sussex Railroad Company until 1945 when it was fully merged into the Delaware, Lackawanna and Western Railroad system...
(of which he was part-owner). Taylor wished to link his railroads with the Scranton-owned Delaware & Lackawanna, and believed the Lackawanna Iron and Coal Co. could turn his pig iron into finished steel—but only if the company adopted the Bessemer process. Together, Moses Taylor and William Walker Scranton convinced the company's other investors to adopt the Bessemer process in 1875 and to merge the Taylor and Scranton railways in 1881. The first "blow" (or pouring of molten steel from the Bessemer furnace into molds) occurred on October 23, 1875, and the first Bessemer steel rolled in the mill on December 29, 1875.
During the 1870s, the Lackawanna Iron and Coal Company also suffered from significant labor problems. The company was one of many which cut wages in its coal mines 30 percent in 1870. The Delaware & Lackawanna, the company railroad, also sharply cut wages for its workers. The first week of January 1871, a nascent mine workers union, the Workingmen's Benevolent Association, went on strike
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
for higher wages. William Walker Scranton personally helped break the strike by leading strikebreaking
Strikebreaker
A strikebreaker is a person who works despite an ongoing strike. Strikebreakers are usually individuals who are not employed by the company prior to the trade union dispute, but rather hired prior to or during the strike to keep the organisation running...
miners to and from the mines each day. While escorting a body of miners from the mines one afternoon, he was attacked by a mob and in the ensuing fight two of the rioting strikers were killed. The state militia was called in to restore order, protect the strikebreakers, and help reopen the mines. The strike began to collapse in April 1871 as strikebreakers opened more mines and the strikers and their families began to starve. Violence flared again in early May, and state troops were once more called to restore order. Within a few days, the strike had largely been broken and most miners returned to work. William Scranton was arrested twice for his role in leading the strikebreakers, but acquitted at trial each time.
A second large strike hit the company in 1877. The Long Depression
Long Depression
The Long Depression was a worldwide economic crisis, felt most heavily in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. At the time, the episode was labeled the Great...
began with the Panic of 1873
Panic of 1873
The Panic of 1873 triggered a severe international economic depression in both Europe and the United States that lasted until 1879, and even longer in some countries. The depression was known as the Great Depression until the 1930s, but is now known as the Long Depression...
and did not end until 1896. By 1877, thousands of miners, steel workers, and railroad employees were out of work and wages had been slashed repeatedly. On July 23, 1877, workers in the iron and steel mills owned by the Lackawanna Iron and Coal Co. struck, seeking a 25 percent wage increase. The strike spread to rail workers the next day, and on July 25 the company's mine workers also walked out and demanded a similar wage increase. The company asked Scranton Mayor Robert McKune for police protection the same day, and McKune asked Governor John F. Hartranft
John F. Hartranft
John Frederick Hartranft was the 17th Governor of Pennsylvania from 1873 to 1879 and a Union Major General who received the Medal of Honor for his actions during the American Civil War.-Early life and career:...
for troops. On July 26, Governor Hartranft asked President Rutherford B. Hayes
Rutherford B. Hayes
Rutherford Birchard Hayes was the 19th President of the United States . As president, he oversaw the end of Reconstruction and the United States' entry into the Second Industrial Revolution...
for federal troops, and (with the Great Railroad Strike of 1877
Great railroad strike of 1877
The Great Railroad Strike of 1877 began on July 14 in Martinsburg, West Virginia, United States and ended some 45 days later after it was put down by local and state militias, and federal troops.-Economic conditions in the 1870s:...
already raging) Hayes agreed to send them at the governor's request. Violence broke out on July 29: The head house
Head house
A head house is a part of a train station.-Rail terminals:In the context of rail transport, head house refers to that portion of a passenger terminal not housing the tracks and platforms themselves. Typically, the head house contains ticket counters, toilets and baggage facilities, if there are...
of the Penn Coal Co.'s short-line railroad was firebombed, a local bridge was burned, and many of the coal mines owned by the Lackawanna Iron and Coal Co. were flooded. The next day McKune threatened to call out the federal troops, but also offered his own services as an arbitrator. The two sides met throughout the day, and to everyone's surprise a tentative agreement was reached that evening. Although a majority of the steel workers appeared ready to accept the tentative agreement, a mob of 6,000 men formed on August 1 in downtown Scranton and resolved to reject it. When McKune appeared outside the mayor's office to try to calm the mob, shots were fired. McKune was clubbed and then stoned
Stoning
Stoning, or lapidation, is a form of capital punishment whereby a group throws stones at a person until the person dies. No individual among the group can be identified as the one who kills the subject, yet everyone involved plainly bears some degree of moral culpability. This is in contrast to the...
. His lower jaw broken and his upper jaw fractured, McKune tried to flee but was knocked unconscious when a member of the mob hit him in the head with a hammer. A few minutes later, the county sheriff and a hastily-assembled posse arrived and fired shots over the heads of the crowd to try to disperse the mob. Several people in the crowd returned fire, wounding the sheriff and a member of the posse. The posse then fired volley after volley into the crowd, killing four and wounding hundreds. Many of those killed and injured were shot in the back as they tried to flee. Mayor McKune, although badly injured, helped restore order around 2 p.m. The following day, 3,000 federal troops arrived from Pittsburgh and invested the city. Martial law was imposed, and the strike ended several uneventfully weeks later with no agreement. The sheriff and several posse members were arrested and tried on the charge of manslaughter
Manslaughter
Manslaughter is a legal term for the killing of a human being, in a manner considered by law as less culpable than murder. The distinction between murder and manslaughter is said to have first been made by the Ancient Athenian lawmaker Dracon in the 7th century BC.The law generally differentiates...
, but were acquitted.
The company's labor troubles soon were supplanted by an internal struggle for control within the Lackawanna Iron and Coal Co. By 1880, the company was the second-largest producer of iron in the United States. Nonetheless, William Walker Scranton wanted the company to expand, a proposal which the board of directors rejected in 1881. Scranton quit the company and formed the Scranton Steel Co. with his brother, Walter Scranton, in 1881. Within 10 years, the Scranton Steel Co. had become so successful that the Lackawanna Iron and Coal Co. entered into negotiations to merge with the firm. The two companies merged on January 9, 1891, forming the Lackawanna Iron and Steel Company. Although the merger created nearly $1.2 million in debt for the new company, Lackawanna Iron & Steel proved to be so financially successful that it paid off the debt within a year.
Move to New York State
At the turn of the century, the Lackawanna Iron and Steel Company began to consider abandoning the Scranton area and relocating. One factor in this decision was the unionization of the company's coal and iron mines, which the United Mine WorkersUnited Mine Workers
The United Mine Workers of America is a North American labor union best known for representing coal miners and coal technicians. Today, the Union also represents health care workers, truck drivers, manufacturing workers and public employees in the United States and Canada...
had mostly organized in 1897. The union successfully struck in 1900, winning a 10 percent wage hike. The union struck again from May 11, 1902, to October 23, 1902, and won a second wage increase as well as better working conditions. A second major factor was the increasing cost of shipping iron ore to Scranton and a lack of rail lines from Scranton to the company's newly emerging markets.
The Lackawanna Iron and Steel Company decided to relocate all of its iron and steelmaking facilities to West Seneca, New York
West Seneca, New York
West Seneca is a town in Erie County, New York, United States. The population was 44,711 at the 2010 census. West Seneca is a centrally-located interior town of the county, and a suburb of Buffalo...
, in 1899, drawn by the area's easy access to Great Lakes
Great Lakes
The Great Lakes are a collection of freshwater lakes located in northeastern North America, on the Canada – United States border. Consisting of Lakes Superior, Michigan, Huron, Erie, and Ontario, they form the largest group of freshwater lakes on Earth by total surface, coming in second by volume...
shipping and the numerous rail lines in the area. William Walker Scranton personally made the decision to move to the Buffalo
Buffalo, New York
Buffalo is the second most populous city in the state of New York, after New York City. Located in Western New York on the eastern shores of Lake Erie and at the head of the Niagara River across from Fort Erie, Ontario, Buffalo is the seat of Erie County and the principal city of the...
suburb. In order to avoid speculation
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
in land, the Lackawanna Steel Company employed John J. Albright, president of the Ontario Power Company
Ontario Hydro
Ontario Hydro was the official name from 1974 of the Hydro-Electric Power Commission of Ontario which was established in 1906 by the provincial Power Commission Act to build transmission lines to supply municipal utilities with electricity generated by private companies already operating at Niagara...
, to purchase land on its behalf. Scranton, Albright and several others met in Buffalo, New York
Buffalo, New York
Buffalo is the second most populous city in the state of New York, after New York City. Located in Western New York on the eastern shores of Lake Erie and at the head of the Niagara River across from Fort Erie, Ontario, Buffalo is the seat of Erie County and the principal city of the...
, on March 23, 1899, to discuss the purchase of land. The group explored several sites around Buffalo on March 24, and chose an undeveloped shoreline area on Lake Erie
Lake Erie
Lake Erie is the fourth largest lake of the five Great Lakes in North America, and the tenth largest globally. It is the southernmost, shallowest, and smallest by volume of the Great Lakes and therefore also has the shortest average water residence time. It is bounded on the north by the...
in what was then the western part of the Town of West Seneca that same day. Albright began purchasing land on April 1, 1899, and by the end of the month had obtained nearly all the required property for the extremely low price of $1.1 million. Albright was often accompanied on his purchasing visits by John G. Milburn
John G. Milburn
John G. Milburn was a prominent lawyer in Buffalo, New York and New York City, a president of the New York City Bar Association, and a partner at the law firm Carter Ledyard & Milburn.-Early life:...
, President of the Pan-American Exposition
Pan-American Exposition
The Pan-American Exposition was a World's Fair held in Buffalo, New York, United States, from May 1 through November 2, 1901. The fair occupied of land on the western edge of what is present day Delaware Park, extending from Delaware Ave. to Elmwood Ave and northward to Great Arrow...
, and many property owners assumed the land purchases were for the Exposition.
Construction of the massive new steel mill began on July 14, 1900, and nine months later equipment was arriving from Scranton. The company dredged a ship canal
Ship canal
A ship canal is a canal especially constructed to carry ocean-going ships, as opposed to barges. Ship canals can be enlarged barge canals, canalized or channelized rivers, or canals especially constructed from the start to accommodate ships....
and built miles of track to link the plant with the railroads which would bring iron ore and coke
Coke (fuel)
Coke is the solid carbonaceous material derived from destructive distillation of low-ash, low-sulfur bituminous coal. Cokes from coal are grey, hard, and porous. While coke can be formed naturally, the commonly used form is man-made.- History :...
to the plant. Lackawanna Iron and Steel began building a company town
Company town
A company town is a town or city in which much or all real estate, buildings , utilities, hospitals, small businesses such as grocery stores and gas stations, and other necessities or luxuries of life within its borders are owned by a single company...
in 1901, but it lacked most services and the housing stood empty for many years.
On February 14, 1902, the company was reorganized into the Lackawanna Steel Company. It was the largest independent steel company in the world at the time. Stock worth $60 million was issued, with $20 million of the newly-raised capital paying off the construction of the new mill. The mill received its first shipment of iron ore on December 23, 1902. The plant's 6,000 workers (2,000 of whom came from Scranton) blew the first steel in early 1903. The company's property in Scranton was sold to the Lackawanna and Wyoming Valley Railroad
Lackawanna and Wyoming Valley Railroad
The Lackawanna & Wyoming Valley Railroad, more commonly known as the Laurel Line, was a Pennsylvania third rail electric interurban streetcar line which operated commuter train service from 1903 to 1952, and freight service until 1976.-History:...
, which scrapped all the remaining equipment and tore down all the buildings except for the oldest stone blast furnaces.
The economic coup which William Walker Stanton had engineered did not please the board of directors, however, who replaced him in late 1904 with Edward A. Clarke. The company continued to expand, and in 1906 bought the large Pennsylvania coal mining firm of J.W. Ellsworth Company.
Lackawanna Steel Co. had a rocky relationship with the town of West Seneca. The company demanded large investments in sewer, water, gas and road improvements but refused to pay for them itself (even though the company was much wealthier than the town). The large influx of workers from the company's old Pennsylvania site swelled the Town's population, leading to the creation of extensive tracts of extremely substandard housing and very bad public health
Public health
Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals" . It is concerned with threats to health based on population health...
problems (including outbreaks of cholera
Cholera
Cholera is an infection of the small intestine that is caused by the bacterium Vibrio cholerae. The main symptoms are profuse watery diarrhea and vomiting. Transmission occurs primarily by drinking or eating water or food that has been contaminated by the diarrhea of an infected person or the feces...
, typhoid and influenza
Influenza
Influenza, commonly referred to as the flu, is an infectious disease caused by RNA viruses of the family Orthomyxoviridae , that affects birds and mammals...
). To save the town, West Senecans proposed separating the area around the steel mill as its own incorporated municipality. Lackawanna Steel opposed the incorporation of the proposed municipality(to be named Lackawanna), but it relented in 1909 after the two-year-long Panic of 1907
Panic of 1907
The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis that occurred in the United States when the New York Stock Exchange fell almost 50% from its peak the previous year. Panic occurred, as this was during a time of economic recession, and there were numerous runs on...
nearly bankrupted the Town of West Seneca and imperiled the company's operations.
The creation of U.S. Steel
U.S. Steel
The United States Steel Corporation , more commonly known as U.S. Steel, is an integrated steel producer with major production operations in the United States, Canada, and Central Europe. The company is the world's tenth largest steel producer ranked by sales...
in 1901 supplanted Lackawanna Steel as the country's largest steel manufacturer. A number of the so-called "independent" steel companies considered merger over the next two decades as a response to U.S. Steel's formation. In late 1915, Lackawanna Steel nearly consummated a merger with the Cambria Steel Company, Newport News Shipbuilding and Drydock Company, Youngstown Sheet and Tube
Youngstown Sheet and Tube
The Youngstown Iron Sheet and Tube Company, based in Youngstown, Ohio, was one of the largest steel manufacturers in the world. Officially, the company was created on November 23, 1900, when Articles of Incorporation of the Youngstown Iron Sheet and Tube Company were filed with the Ohio Secretary...
, and Inland Steel
Inland Steel Company
The Inland Steel Company was a U.S. steel company active in 1893-1998. Its history as an independent firm thus spanned much of the 20th century. It was headquartered in Chicago, Illinois at the landmark Inland Steel Building....
. But despite the agreement of the steel companies, federal regulators, and others, the banks carrying the debt for these companies refused to approve the merger and the plan was dropped. The company's financial status varied considerably in the late 1910s. The stock set new highs and the company doubled its profits in 1917 and the first half of 1918, but in late 1918 and throughout 1919 the company fell on hard financial times.
Although Lackawanna Steel had moved to New York in part to avoid unionization, the unions followed the company. An attempt to unionize the company was made in 1919 by the Amalgamated Association of Iron and Steel Workers
Amalgamated Association of Iron and Steel Workers
Amalgamated Association of Iron and Steel Workers was an American labor union formed in 1876 and which represented iron and steel workers. It partnered with the Steel Workers Organizing Committee, CIO, in November, 1935...
. Lackawanna's Democratic
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
mayor, John Toomey, was supported financially by the Lackawanna Steel Co., and Toomey initiated a vicious red-baiting
Red-baiting
Red-baiting is the act of accusing, denouncing, attacking or persecuting an individual or group as communist, socialist, or anarchist, or sympathetic toward communism, socialism, or anarchism. The word "red" in "red-baiting" is derived from the red flag signifying radical left-wing politics. In the...
campaign to smear the union organizing effort as communist
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
-inspired and led. The company also fired hundreds of workers in the summer and fall of 1919 for being union members or union sympathizers. Nonetheless, by 1919 more than 18,000 steelworkers at Lackawanna Steel and five other, smaller metallurgical firms in the area were organized by the American Federation of Labor
American Federation of Labor
The American Federation of Labor was one of the first federations of labor unions in the United States. It was founded in 1886 by an alliance of craft unions disaffected from the Knights of Labor, a national labor association. Samuel Gompers was elected president of the Federation at its...
(although Lackawanna officials estimated there were far fewer union members). Lackawanna Steel officials, fearing that immigrant union members would become violent, asked for and received protection from the New York State Police
New York State Police
The New York State Police is the state police force of over 4,600 sworn Troopers for the state of New York. It was established on April 11, 1917 by the New York Legislature, in response to the 1913 murder of a construction foreman named Sam Howell in Westchester County, which at that time did not...
. The Lackawanna Steel organizing drive was part of a nationwide organizing effort by the union, and the union resolved to launch a nationwide strike in the fall of 1919 to organize the entire steel industry. The strike
Steel strike of 1919
The Steel Strike of 1919 was an attempt by the weakened Amalgamated Association of Iron, Steel and Tin Workers to organize the United States steel industry in the wake of World War I. The strike began on September 22, 1919, and collapsed on January 8, 1920.The AA had formed in 1876. It was a...
began on September 22, with the union claiming 8,000 of the plant's 9,000 workers had struck and the company asserting only half the workers had walked out. The same day, three riots broke out in the city. Late in the afternoon, during the shift change, a crowd of 7,000 pro-union strikers and supporters began throwing rocks, bottles and debris at the company's guards, and city police were called in to break up the disturbance. At 7:20 p.m., a crowd of 3,000 unionists and their supporters intercepted a group of 200 strikebreakers leaving the plant, and chased them through the surrounding neighborhood before police intervened and stopped them. Later in the evening, a small crowd of men beat a man who announced he would work for the company's private police force, and city police once more were called in. On September 23, 1919, company police clashed twice late in the afternoon with a crowd of about 3,000 striking workers. At 5:50 p.m., after being pelted with rocks and glass bottles, company police fired more than 50 12-gauge
Gauge (bore diameter)
The gauge of a firearm is a unit of measurement used to express the diameter of the barrel. Gauge is determined from the weight of a solid sphere of lead that will fit the bore of the firearm, and is expressed as the multiplicative inverse of the sphere's weight as a fraction of a pound . Thus...
shotgun
Shotgun
A shotgun is a firearm that is usually designed to be fired from the shoulder, which uses the energy of a fixed shell to fire a number of small spherical pellets called shot, or a solid projectile called a slug...
s blasts into the crowd. "
African American
African Americans are citizens or residents of the United States who have at least partial ancestry from any of the native populations of Sub-Saharan Africa and are the direct descendants of enslaved Africans within the boundaries of the present United States...
s prior to the strike, hired several thousand black strikebreaker
Strikebreaker
A strikebreaker is a person who works despite an ongoing strike. Strikebreakers are usually individuals who are not employed by the company prior to the trade union dispute, but rather hired prior to or during the strike to keep the organisation running...
s and brought them to the city to maintain operations. Outraged, union workers turned to political activity. Toomey lost re-election in the city's regularly scheduled mayoral race on November 4, 1919, and John H. Gibbons, a Socialist
Socialist Party of America
The Socialist Party of America was a multi-tendency democratic-socialist political party in the United States, formed in 1901 by a merger between the three-year-old Social Democratic Party of America and disaffected elements of the Socialist Labor Party which had split from the main organization...
, was elected. Although the national organizing committee called off the strike on January 8, 1920, Gibbons' election reinvigorated the strike and some workers stayed out until June 1920. Nearly all the black strikebreakers were fired after the strike when the company took back its striking workers. The organizing campaign failed, but the company was eventually organized by the Steel Workers Organizing Committee
Steel Workers Organizing Committee
The Steel Workers Organizing Committee was one of two precursor labor organizations to the United Steelworkers. It was formed by the CIO in 1936. It disbanded in 1942 to become the United Steel Workers of America....
in the late 1930s after passage of the National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...
in 1935.
In the two years after the organizing drive, the company continued to see wide swings in profitability. In 1920, the company's profits fell again, and a merger was rumored. The company declared itself profitable in late 1920, and then reported large deficits in 1921. Rumors that the company might sell itself emerged in mid-October 1921, but in fact the firm went on a buying spree and snapped up a pig iron manufacturer and bridge steel maker.
Over the next several years, the Lackawanna plant continued to expand physically, its works now rambling over more than two miles (3 km) of shoreline and spilling over into the nearby town of Hamburg
Hamburg (village), New York
Hamburg is a village in Erie County, New York, United States. The population was 10,116 at the 2000 census. The village is reportedly named after Hamburg, a city in Germany...
. Lackawanna Steel paid about 75 percent of the taxes in the city of Lackawanna, effectively controlling city government.
In 1922, Lackawanna Steel reported very large deficits, driven primarily by the huge New York steel mill's aging equipment.
Bethlehem Steel years
In 1922, Lackawanna Steel Co. was acquired by the Bethlehem Steel Company, ending the company's 62-year independence. Merger rumors had plagued the company for several years by then. Rumors of an impending merger among two or more of the "Little Steel" companies—the seven steel companies largest in size next to U.S. Steel—continued in November and December 1921 and into 1922. In late April 1922, the seven "Little Steel" firms began to openly discuss the merger of two or more of the companies as a means of challenging U.S. Steel. The chief executives and creditors of these firms visited one another's plants in order to appraise them and assess the financial viability of each company. Among those visited was the Lackawanna Steel Company plant in upstate New York.On May 11, 1922, Lackawanna Steel announced it had agreed to be purchased by Bethlehem Steel in a merger which would create a billion-dollar company. Bethlehem Steel said it would spend $10 million improving the Lackawanna mills, which were described as "obsolete" due to a lack of investment. The combined company controlled about 10 percent of the steel output of the United States, while U.S. Steel controlled about 45 percent.
A lengthy antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
investigation followed. The United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
asked the Federal Trade Commission
Federal Trade Commission
The Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...
(FTC) and the Justice Department
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
to investigate the merger the day after it was announced, which the FTC did on May 14. As the merger was approved by the two companies in mid-May, the Senate and FTC each conducted separate investigations. On June 5, 1922, the FTC issued a report concluding that the merger was in violation of the Sherman Antitrust Act
Sherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
. However, United States Attorney General
United States Attorney General
The United States Attorney General is the head of the United States Department of Justice concerned with legal affairs and is the chief law enforcement officer of the United States government. The attorney general is considered to be the chief lawyer of the U.S. government...
Harry M. Daugherty
Harry M. Daugherty
Harry Micajah Daugherty was an American politician. He is best known as a Republican Party boss, and member of the Ohio Gang, the name given to the group of advisors surrounding president Warren G...
overruled the FTC on June 22. The merger finally took effect on October 10, 1922. Six decades later, financial analysts observed that Bethlehem Steel probably purchased Lackawanna Steel for less than half what the company was worth. Over the next decade, Bethlehem Steel spent more than $40 million modernizing the Lackawanna site.
Lackawanna continued to be a center for the manufacture of steel throughout most of the 20th century. In the 1940s, the Lackawanna steel mill employed over 20,000 people, and was the world’s largest steel factory.
Closure and aftermath
In the 1970s and 1980s, Bethlehem Steel allowed the Lackawanna Steel plant to become obsolete. Foreign competition made it financially impossible to continue to manufacture most of the products produced at Lackawanna. Bethlehem Steel also disliked the high tax rates of the state of New York, and did not want to spend the millions of dollars in air and water pollutionPollution
Pollution is the introduction of contaminants into a natural environment that causes instability, disorder, harm or discomfort to the ecosystem i.e. physical systems or living organisms. Pollution can take the form of chemical substances or energy, such as noise, heat or light...
abatement which were required by state and federal authorities. The company built a new facility in Burns Harbor, Indiana
Burns Harbor, Indiana
Burns Harbor is a town in Westchester Township, Porter County, Indiana, United States on the shores of Lake Michigan in Northwest Indiana and is part of the Chicago metropolitan area...
, and stopped investing in new steel production methods at Lackawanna.
In 1982, Bethlehem Steel announced the closing of nearly all production at the Lackawanna Steel plant in New York. Bethlehem Steel, like many American steel companies, was encountering significant financial problems. Although the company made several public attempts to reassess the plant' viability and keep the plant open in the late 1970s, closure was a foregone conclusion for many. On June 25, 1982, Bethlehem Steel announced it would close the Lackawanna facility and lay off its remaining 10,000 workers in six weeks. The news meant the laying off of an additional 8,000 workers in Lackawanna, West Seneca, and Buffalo. An attempt was made to interest the Buffalo-based Gibraltar Steel Corporation in the plant, but this effort failed.
The Lackawanna Steel Co. plant closed on October 15, 1982. The company laid off workers in waves before the final closure, and transferred many others. On the day the plant closed, more than 6,000 workers lost their jobs (most of them high-paying). The city of Lackawanna's 22,700 people faced extremely large tax increases just to maintain basic services, as the amount of taxes paid by Bethlehem Steel fell from 66 percent of the city's revenue to just 8 percent. In addition, the city owed the company more than $5 million in tax overcharges. The United Steelworkers
United Steelworkers
The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union is the largest industrial labor union in North America, with 705,000 members. Headquartered in Pittsburgh, U.S., the United Steelworkers represents workers in the United...
later successfully sued Bethlehem Steel for prematurely terminating the fringe benefits of the laid-off steelworkers.
Superfund
Superfund is the common name for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 , a United States federal law designed to clean up sites contaminated with hazardous substances...
site by the Environmental Protection Agency
United States Environmental Protection Agency
The U.S. Environmental Protection Agency is an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress...
(EPA) in 1988 after the EPA conducted a Resource Conservation and Recovery Act
Resource Conservation and Recovery Act
The Resource Conservation and Recovery Act , enacted in 1976, is the principal Federal law in the United States governing the disposal of solid waste and hazardous waste.-History and Goals:...
(RCRA) Facility Assessment of the plant. The state of New York subsequently declared it a Class 2 Inactive Hazardous Waste Site, indicating the site poses a significant potential threat to human health and the environment. In August 1990, Bethlehem Steel (operating as Tecumseh Redevelopment, Inc.) and the EPA entered into an administrative consent order requiring Bethlehem Steel to identify the nature and extent of any releases of hazardous waste and mitigate any emergency situations that might be discovered during the course of the investigations. Bethlehem Steel and its successor corporations have been submitting RCRA Facility Investigation (RFI) reports since then. Although the RFI was due to be completed in 2004, it still was not complete as of June 2008. The site was also declared a brownfield in 2003 under the Small Business Liability Relief and Brownfields Revitalization Act of 2002. While this made the city of Lackawanna eligible for federal assistance money to redevelop the site, a cooperative agreement had not been signed as of May 2006.
The city of Lackawanna redeveloped some of the former Lackawanna Steel Co. land into small business zones, bringing about 700 jobs back to the town in the late 1980s. In 1993, Veritas Capital, Inc., purchased one of the bar, rod and wire plants on the old Lackawanna site and added another 250 jobs (the workers made automobile steering columns). Bethlehem Steel ended coke production at the Lackawanna site in 2001, and as of 2008 only a galvanized steel finishing plant employing about 250 people remained.
Steel Winds, an eight-windmill wind farm
Wind farm
A wind farm is a group of wind turbines in the same location used to produce electric power. A large wind farm may consist of several hundred individual wind turbines, and cover an extended area of hundreds of square miles, but the land between the turbines may be used for agricultural or other...
owned by BQ Energy, opened on the old plant's slag heaps in September 2006.
Lackawanna Steel in history and popular culture
The Lackawanna Steel Company's original stone furnaces near Scranton, Pennsylvania, were placed on the National Register of Historic Places in 1991.In 2001, the Tony Award
Tony Award
The Antoinette Perry Award for Excellence in Theatre, more commonly known as a Tony Award, recognizes achievement in live Broadway theatre. The awards are presented by the American Theatre Wing and The Broadway League at an annual ceremony in New York City. The awards are given for Broadway...
-winning actor and playwright Ruben Santiago-Hudson
Ruben Santiago-Hudson
Ruben Santiago-Hudson is an American actor and playwright, who has won national awards for his work in both areas. In November 2011 he will appear on Broadway in Lydia Diamond's play .-Early life:...
wrote Lackawanna Blues
Lackawanna Blues
Lackawanna Blues is an American play written by Ruben Santiago-Hudson in 2001. It was later adapted as a television movie that aired in 2005. The play dramatizes the character of the author's primary caregiver when he was growing up in Lackawanna, New York, during the 1950s and 1960s.-Play:The...
, a one-man play which depicts a fictionalized version of the playwright's childhood growing up in Lackawanna, New York. The play, which won two OBIE
Obie Award
The Obie Awards or Off-Broadway Theater Awards are annual awards given by The Village Voice newspaper to theatre artists and groups in New York City...
awards, features a number of characters who work or worked at the Lackawanna Steel Co. plant, and the company's role in the town is discussed several times in the play.