Hostname: page-component-8448b6f56d-c4f8m Total loading time: 0 Render date: 2024-04-19T06:36:34.453Z Has data issue: false hasContentIssue false
  • English
  • Français

The Roots of Decline: Business-Government Relations in the American Steel Industry, 1945–1960

Published online by Cambridge University Press:  03 March 2009

Paul A. Tiffany
Paul A. Tiffany
Affiliation:
Assistant Professor in the Department of Management, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104
Get access Rights & Permissions [Opens in a new window]

Abstract

Recent problems in the performance of the American steel industry have prompted a number of calls for an “industrial policy” for this sector. Before any such programs of public intervention can be considered, however, it would behoove public policymakers to examine why the industry fell into its present state of decline. This paper, an abstract of a longer study, analyzes the relations of business and government in American steel from 1945 to 1960, and concludes that public policies had as much to do with subsequent industry decline as did other factors previously delineated by scholars.

Type
Papers Presented at the Forty-Third Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 44 , Issue 2 , June 1984 , pp. 407 - 419
Copyright
Copyright © The Economic History Association 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 See Adams, W. and Dirlam, J. B., “Big Steel, Invention, and Innovation,” Quarterly Journal of Economics, 80 (1966), 167–89;CrossRefGoogle ScholarMeans, G. C., Pricing Power and the Public Interest (New York, 1962);Google ScholarUlman, Lloyd, “The Union and Wages in Basic Steel: A Comment,” American Economic Review, 48 (1958), 408–26;Google Scholar and Mancke, R. B., “The American Iron Ore and Steel Industries: Two Essays” (unpublished doctoral dissertation, Massachusetts Institute of Technology, 1968).Google Scholar

2 See Tiffany, A. Paul, “The Roots of Decline: Business-Government Interaction in the American Steel Industry, 1945–1960” (unpublished doctoral dissertation, University of California, Berkeley, 1983), pp. 79–118.Google Scholar

3 See U.S. Senate, Subcommittee on Surplus Property of the Committee on Military Affairs and Industrial Reorganization Subcommittee of the Special Committee on Postwar Economic Policy and Planning, 79th Congress, 1st Session, Hearings, Joint, War Plants Disposal—Iron and Steel Plants (Washington, D.C., 1946).Google Scholar

4 See Oral History Interview with Bean, Louis H., p. 47, in Oral History Files, Harry S. Truman Presidential Library, Independence, Missouri.Google Scholar

5 See U.S. Senate, Special Committee to Study Problems of American Small Business, 80th Congress, 1st Session, Hearings, , Problems of American Small Business, 4 vols. (Washington, D.C., 1947), pp. 587–701.Google Scholar

6 Ibid., pp. 988–94. Also see Sykes, Wilfred, “The Future of the Steel Industry,” in American Iron and Steel Institute, 1947 Yearbook (New York, 1947), pp. 68–83. Sykes, president of Inland Steel Corporation, was the industry's principal spokesman before the Senate committee, and in his AISI paper he developed his arguments more fully regarding steel consumption.Google Scholar

7 Drawn from Louis Bean's testimony before the Senators; see U.S. Senate, Problems of American Small Business, p. 1001.Google Scholar

8 See Hexner, E., “American Participation in the International Steel Cartel,” Southern Economic Journal, 8 (1941), 54–79,CrossRefGoogle Scholar and Lauderbaugh, R., “Business, Labor, and Foreign Policy: U.S. Steel, the International Steel Cartel, and Recognition of the Steel Workers Organizing Committee,” Politics and Society, 6 (1979), 433–57.CrossRefGoogle Scholar

9 For examples of the Administration position, see Council of Economic Advisers, “Interagency Report on Steel and Essential Steelmaking Materials” (CEA, March 15, 1949), mimeo, in Council of Economic Advisers Papers, Box 22, Steel Folder, Dwight D. Eisenhower Presidential Library, Abilene, Kansas.Google Scholar

10 Data used in these calculations are drawn from American Iron and Steel Institute, Annual Statistical Report (New York, various years).Google Scholar

11 See, for example, Mullaney, T. E., “US Steel's Prices Increased $4 a Ton; An Inquiry Is Slated,” New York Times (December 16, 1949), p. 1, and U.S. Congress, Joint Committee on the Economic Report, 81st Congress, 2nd Session,Google ScholarHearings, , December 1949 Steel Price Increases (Washington, D.C., 1950).Google Scholar This was hardly an isolated example; see Tiffany, “Roots of Decline,” pp. 119–65.Google Scholar

12 Perhaps the most noteworthy occasion on which this occurred was President Truman's 1949 State of the Union address, when he said that “if action by private industry fails to meet our needs” in steel production, he would authorize construction of federally owned mills. See Congressional Record, Vol. 95, Pt. I, 81st Congress, 1st Session (01 5, 1949), p. 75.Google Scholar

13 See Tiffany, “Roots of Decline,” pp. 166–209.Google Scholar

14 Data on the extent of U.S. aid to foreign steelmakers can be found in U.S. Senate, Committee on Finance, 90th Congress, 1st Session, Steel Exports (Washington, D.C., 1967), 31–62, 299–304.Google Scholar Aid to foreign steel represented 1.9 percent of total U.S. foreign aid over this span. For the comment by Bethlehem's president, see “Grace Calls Subsidy of Shipping Vital,” New York Times (October 28, 1949), p. 47.Google Scholar

15 See “Industry Gets 5-Year Write-Offs,” Iron Age, 166 (10 19, 1950), 95;Google Scholar“Wilson Puts the Brakes on Granting Certificates of Necessity for Expansion of Steel Industry,” Iron Age, 167 (03 8, 1951), 110–11;Google Scholar and U.S. Department of Commerce, National Production Authority, Historical Reports on Defense Production, Report No. 28, Iron and Steel (Washington, D.C., 1953).Google Scholar

16 See Marcus, M., Truman and the Steel Seizure Case (New York, 1977).Google Scholar

17 Tiffany, “Roots of Decline,” pp. 259–312.Google Scholar

18 See Diebold, W. Jr, The Schuman Plan (New York, 1959),Google Scholar and Rosen, M. J., “The Brussels Entente: Export Combination in the World Steel Market,” University of Pennsylvania Law Review, 106 (1958), 1079–1116.CrossRefGoogle Scholar

19 American Iron and Steel Institute, “Statement of the American Iron and Steel Institute before the Commission on Foreign Economic Policy” (Washington, D.C., 12 2, 1953); a copy is located in CFEP: Records, 1953–1954 File, Box 19, Hearings-Presentations, AISI Folder, Eisenhower Presidential Library.Google Scholar

20 See Baker, G. H., “Industry: Cooperates With Capitol,” Iron Age, 171 (06 18, 1953), 93,Google Scholar and Reagan, M. D., “The Business and Defense Services Administration, 1953–1957,” Western Political Quarterly, 14 (1961), 576–78.CrossRefGoogle Scholar

21 For broader comment on Eisenhower's foreign economic policies, see Kaufman, B. I., Trade & Aid—Eisenhower's Foreign Economic Policy, 1953–1961 (Baltimore, 1982).Google Scholar On the Commerce Department proposal, see Egan, C. E., “Sheaffer Resigns as Commerce Aide; Reputed Astin Foe,” New York Times (09 19, 1953), pp. 1, 6,Google Scholar and U.S. House, Antitrust Subcommittee, Committee on the Judiciary, 84th Congress, 1st Session, Hearings, WOC's and Government Advisory Groups (Washington, D.C., 1955), p. 596.Google Scholar

22 See Tiffany, “Roots of Decline,” 313–64.Google Scholar

23 See U.S. Senate, Subcommittee on Antitrust and Monopoly, Committee on the Judiciary, 85th Congress, 1st Session, Hearings, Administered Prices, Parts 2, 3, and 4 (Washington, D.C., 1957). These were the “Kefauver Committee” hearings.Google Scholar

24 Data used in the calculations are drawn from AISI, Annual Statistical Report, various years.Google Scholar

25 Steel, Story of a Shortage (1952, no author or publisher shown); a copy is located in the vertical File, Steel Industry and Trade Section, Truman Presidential Library.Google Scholar

26 Adams and Dirlam, “Big Steel, Invention, and Innovation.”Google Scholar

27 Industry arguments opposing early adoption of BOF are best summarized in Dilley, D. R. and McBride, D. L., “Oxygen Steelmaking—Fact vs. Folklore,” Iron and Steel Engineer, 44 (10. 1967), 131–52.Google Scholar

28 See U.S. Department of Labor, Collective Bargaining in the Basic Steel Industry (Washington, D.C., 1961)Google Scholar, and Nagle, R. W., “Collective Bargaining in Basic Steel and the Federal Government, 1945–1960” (unpublished doctoral dissertation, Pennsylvania State University, 1978).Google Scholar

29 See Tiffany, “Roots of Decline,” pp. 365–427.Google Scholar

30 U.S. Department of Labor, Collective Bargaining, pp. 300–397.Google Scholar