by Hardy Green
Moreover, the Depression and Franklin Roosevelt’s New Deal had prompted a new union mobilization nationally—most notably in auto production, which witnessed sensational sit-down strikes in Flint, Michigan. Taylor saw that the unionization of steel was probably inevitable, and after a series of private meetings with Lewis came to terms. By March 1937, Carnegie-Illinois had signed a tentative pact with SWOC that recognized the union as the bargaining agent for the company’s workers and granted a $5 hourly wage along with the eight-hour day and forty-hour week. Within two months, the union had 110 contracts covering some 300,000 workers at U.S. Steel and other companies. Unionization was hardly complete—major holdouts included Bethlehem and the other “Little Steel” companies—but a corner had been turned at the Gary Works and other U.S. Steel plants. Perhaps not entirely coincidentally, that corporation’s share of the nation’s steel output rose from 35.4 percent in 1936 to 36.6 percent in 1937.27
The World War II years continued the expansion at the Gary Works. The federal government poured money into the steel industry, especially into new facilities near Pittsburgh, but Gary benefited as well with a $12 million expansion. By 1945, the Gary Works, with a raw steel capacity of 5.72 million net tons, was the most productive of U.S. Steel’s facilities and the largest steel plant on Earth. By the late 1950s, production at Gary would approach 8 million net tons. Other companies grew as well, including Bethlehem’s Sparrows Point works, which would pass the Gary Works to become the largest steel mill in the world in the 1950s.28
But steel towns were another matter. Bethlehem regarded the town of Sparrows Point as expendable, and in time most of it would be demolished to make room for factory expansion. In Homestead, the company tore down perhaps a third of the town during World War II to construct five new complexes. In Gary, the problem was instead a matter of neglect: In the 1930s, the U.S. Census Bureau had classified as substandard 20 percent of the city’s white-owned housing and 50 percent of its black-owned housing. U.S. Steel encouraged the building of federal housing during the decade, on the grounds that it could house steelworkers making less than $1,000 per year, of whom there were many, according to company spokesman Norton. The federal government financed hundreds more units built during the 1940s and early ’50s, but many sections of town continued to be slums.
In fewer than fifty years, Gary had gone from being a sandy wasteland to a booming industrial area to, finally, an older city in decline. Overall, it had never been an especially good place to live, with its spotty residential properties, limited cultural resources, and wanting educational institutions. Even as the number of African Americans in the city grew from 18 percent in 1940 to 39 percent in 1960, many Gary institutions resembled those of the Deep South. Public schools—which had been involved in an impressive educational experiment in the 1910s—were segregated because of neighborhood composition. Into the 1930s, major hospitals and numerous restaurants, theaters, and churches were for whites only.29
In 1967, the city’s African-American majority elected its first black mayor, Richard G. Hatcher. White flight, already under way, accelerated. Within a dozen years, the town became truly depressed and crime-ridden. Although the Gary Works had 30,000 employees as late as 1970, steel employment began falling. In the mid-1980s, U.S. Steel closed its rail plant in Gary along with 150 other facilities around the country, including most of those in the Pittsburgh area. And there was little in Gary to replace U.S. Steel as an employer.
In 1996, Gary won the distinction of being the most dangerous city in America, with one murder for every 1,000 inhabitants. Gary neighborhoods, marked by gang violence, drugs, and prostitution, seemed the epitome of urban decay. Formerly bustling Broadway had become a strip of boarded-up stores and dilapidated buildings. The Palace Theater, once the fanciest movie house in the Midwest, was an abandoned wreck, and a former Sears store was now a welfare office. The most visible enterprises in the business district included a Goodwill Industries shop and several bail bondsmen’s offices. To distance itself from the blight, the Gary Post-Tribune dropped the word “Gary” from its title.
Today, the Gary Works and U.S. Steel still sound impressive on paper: The Gary Works is U.S. Steel’s largest American facility, with an annual capacity of 7.5 million tons, and the corporation remains the fifth-largest steelmaker in the world. In 2007 the company completed a major renovation of Gary’s largest blast furnace, but the Works now employs fewer than 7,000 people. Gary’s other primary employers: the school system, the Methodist Hospital, and two Majestic Star Casinos.30
The promise of 1901 was fulfilled for neither U.S. Steel as a business nor Gary as a community. At the time of the great trust’s creation, technological innovation no longer provided steelmakers with a competitive edge—and so they tried combination in hopes of gaining winning economies of scale. But this strategy worked only for a while: By 1920, the company was producing about half of the nation’s steel, down from the 66 percent it had made in the trust’s first year. And by the late 1990s, U.S. Steel was responsible for only one-eighth of the steel produced in America.31
Had the trust fared better—demonstrating a greater agility and a willingness to adopt new technology—would things have turned out better for Gary, Indiana? Perhaps not, for the combination of combinations was never much interested in developing a corporate utopia. Like an adolescent who never grows into maturity, it sought to receive the credit for the Magic City while accepting little in the way of responsibility.
CHAPTER 6
On the Road to the Consumer Economy
The rise of large-scale advertising, popular magazines, movies, radio, and other channels of increased cultural diffusion from without are rapidly changing habits of thought as to what things are essential to living and multiplying optimal occasions for spending money.
—ROBERT S. LYND AND HELEN MERRELL LYND, Middletown (1929)
Near the end of the nineteenth century, consumerism took a dra matic upward leap in American life—and propelled a fundamental shift in the U.S. economy. The number of mass-produced goods had been on the rise since the early 1800s, but for the middle class, the post- Civil War years brought new retail outlets, intermittent prosperity, labor-saving technology, and shorter hours of work, all conspiring to recommend the replacement of homemade goods with store-bought things. In the cities, such emporia as Boston’s Jordan Marsh & Co., Philadelphia’s John Wanamaker, and Chicago’s Marshall Field & Co. brought a cornucopia of stuff into the public eye. Mail-order houses such as Sears, Roebuck and Montgomery Ward began doing big business selling national brands to rural customers. By the mid-1890s, F. W. Woolworth had established twenty-eight stores in various eastern cities, and such food chains as the Great Atlantic and Pacific Tea Co. grew in importance from about 1910. Advertising was mushrooming, too: The first prominent advertising agency, N. W. Ayer & Sons, opened its doors in 1877, and by 1900 corporations were spending $95 million a year on ads. Even the utopian Edward Bellamy in his Looking Backward celebrated the efficiency of modern retailing while proposing a streamlined version that overcame the unpleasantness of overproduction.
By the late 1920s, when Robert and Helen Lynd published their study of life and changing behavior in the emblematic, midcontinent Middletown—actually, a disguised Muncie, Indiana—the consumer paradise seemed at hand. The Lynds cited an extensive list of phenomena that were new must-haves for the community’s middle-class consumers: hot and cold running water, appliances ranging from toasters to washing machines, telephones, refrigerators, green vegetables and fruit available year-round, a great variety of clothing, cosmetics, commercial hair dressing, movies, automobiles, phonographs, radios, and cigarettes. Households had even given up making their own bread, relying instead on bakeries. The greater availability of canned goods and refrigeration were leading to a decline in homemakers’ cooking skills, they found. Around 1915 the automobile industry introduced installment selling, which the Lynds said “turns wishes into horses overnight”; it exploded during th
e ’20s, encompassing 15 percent of all sales by 1926.1
Economist and Wharton School professor Simon N. Patten was an early celebrant of this era of abundance, particularly the “rapid distribution of food.” In his 1907 work, The New Basis of Civilization, he wrote that “each gain upon nature adds to the quantity of goods to be consumed by society, and lessens the labor necessary to produce them.”2
Of course, the culmination of consumerism would take place after World War II. Spending on the war had helped pull the country out of the Depression, and U.S. political leaders at first worried that without that level of arms spending, hard times could return, much as they had after the first war. But there was no need to worry. The private expenditure on mass-built, single-family homes in dispersed and zoned suburbs, modern appliances including washers, refrigerators, and televisions, and, of course, automobiles provided a more than adequate replacement.3
Company towns played their part in this transformation of American life. Cloth from New England and southern textile mills was an early factory-made consumer product. Pullman’s luxurious railroad cars facilitated a growing public interest in tourism and travel. As Milton Hershey realized in the early 1900s, food too could be the stuff of mass consumption, while the lightbulbs Corning manufactured allowed more hours in which to work, to shop, and to enjoy leisure.
One catalyst was essential to the consumer economy: The discovery of vast pools of oil in the American Southwest. Dozens of new towns and cities emerged, dedicated to pursuing and refining petroleum. Without oil, one can hardly imagine that the array of other consumer-goods industries, from autos and appliances to meat, could have been nearly as vast.
Black gold. Texas tea: Oil has been the most mythologized, fantasy-conjuring substance in American life, the stuff dreams are made on. Its pursuit and use dominated twentieth-century civilization, prompting and facilitating wars, uneven global development, and postindustrial consumerism. But like the Golden Fleece of ancient lore, America’s oil was bait for a race of wanderers rather than for city-builders, at least in the industry’s early days. Boomtown—a word once associated with the California gold rush—for a time was applied almost exclusively to the haunts of the moving crowd that sought oil riches.
Consider the ups and downs of Beaumont, Texas. In January 1901, it was a southeast Texas ranching and lumber town of 9,000 people about ninety miles east of Houston and thirty miles north of the Gulf of Mexico. The state’s legendary oil reserves greeted the new century with Texas’s first and most celebrated gusher, Spindletop, located on a sulfurous hill-side four miles outside of town. For almost ten years, a one-armed mechanic and lumber merchant named Patillo Higgins had argued that oil could be found there. The obsession made Higgins and his partner, an Austrian engineer named Anthony Lucas, a joke among geologists. Finally, Lucas got Pittsburgh wildcatters James Guffey and John Galey to take a flyer on Higgins’s intuition. After months of drilling through hundreds of feet of sand, an ear-splitting eruption of mud and rocks preceded a gusher of gas and then heavy, green oil. Before long the flow from Spindletop reached 75,000 barrels a day.
Spindletop’s petroleum was up for grabs. Land prices near Beaumont soared from $10 per acre to $900,000 per acre. Both land-buyers and the landless descended upon the area, which soon became a warren of tents and shacks, lean-tos, whorehouses, and gin mills. Beaumont’s population tripled in a year, and within two years stood at 50,000. Within months, 214 oil wells owned by one hundred or more companies jammed the hill. Among the outfits that lasted were Gulf Oil, operated by the Mellon banking family out of Pittsburgh; Sun Oil, whose pioneering figure was J. Edgar Pew, also out of Pennsylvania; and Texaco, whose chief executive was Joseph Cullinan, who became for a time the foremost oilman in Beaumont. London-based Shell Oil, already a power in the Russian oil fields at Baku, contracted to take half of the Guffey-Galey-Lucas production.
Spindletop itself was depleted within four years. “The law of capture,” which dictated that the oil belonged to whoever could grab it, encouraged drillers to suck the stuff out as quickly as possible. With the oil all but gone, people scattered, many moving on to the next strike—or rumored strike. Beaumont remained an important refining center, but its population plunged by 20 percent, to 40,000.
Similar events occurred over and over in the Southwest. In 1903, oil was discovered at Sour Lake, Texas, twenty miles northwest of Beaumont. Within a few months, 10,000 people settled there. At Ranger, about eighty-five miles southwest of Fort Worth, population increased from around 600 to 30,000 within a year of a 1917 strike. In August 1921, a discovery at Mexia in central Texas prompted a tenfold increase in population—from 4,000 to 40,000—within a few days. Other spectacular oil finds came in the Panhandle region and in East Texas.
Who were these thousands of on-the-move people? In the first strikes, skilled workers, including drillers and rig builders, came from such states as Pennsylvania, which already hosted oil production. After former Texas plowboys picked up the necessary expertise, they, too, became drillers and rig builders, earning as much as $5 a day for a seven-day week. Depending on the size of the strike, there could be lots of skilled workers: At Buckburnett, the purported site of the 1940 Clark Gable-Spencer Tracy movie Boom Town and the location of repeated strikes after 1912, eighty derricks were under construction at one point, each occupying a fifteen-to twenty-man crew. Hordes of unskilled laborers also descended on new fields, finding employment as roustabouts, doing whatever heavy labor was needed, and as teamsters, delivering necessary supplies to the work area. Other arrivals included speculators and would-be wildcatters, sure that they could strike pay dirt on their own, plus managers from established oil companies and keepers of stores, boardinghouses, and hotels. Other avocations: prostitution, gambling, and various sorts of thievery.
Once production was under way, swarms of pipeline workers—who worked in crews of up to 150 men—and tank builders would come. Of course, both exploration and production might be going on simultaneously, but after a time, a smaller number of workers would be needed to operate and service wells, pipelines, and tanks. Some exploration workers might stay on if the production jobs seemed enticing enough, but others, including the great multitude, would leave. The lure of the next big thing was an ongoing attraction for young and rootless workers and drifters, as well as for much of the disreputable demimonde. Model T Fords, loaded down with possessions and stuffed with family members, crisscrossed Texas, stirring up virtual dust storms as they followed the drilling rigs to successive boomtowns.
Since a boom began abruptly and could be short-lived, no one cared to invest in building housing for such people, so they were left with tents or shacks. Many swarmed into flophouses that rented cots at 50 cents for an eight-hour shift. Some resorted to sleeping under sheets of galvanized iron that were propped up a few inches above bare ground. In Ranger, an enterprising landlord set up a large circus tent filled with row upon row of cots (the solution was much copied thereafter), and one farmer there rented out his hog shed.
There were hotels—often barracks-like flophouses. Those lucky enough to land a bed there would share a room with another person and, after eight hours, would have to make way for a second shift of sleepers. It was not unknown for hotel proprietors to move their buildings from boomtown to boomtown.4
By the 1920s all the major oil companies had erected more permanent “company camps,” with substantial housing renting for as little as $3 per month, aiming to retain a skilled workforce. The area around Midland alone contained thirty-eight camps. Humble Pipe Line’s Kemper Station Camp consisted of orderly rows of houses painted in uniform colors. That company’s camp near the town of Wink housed four hundred refinery workers and featured a community center, baseball field, playground, and swimming pool. Around the town of McCamey, seven companies had camps. Some houses there were even relatively luxurious, with two bedrooms, a kitchen, a dining room, and a single bath. And Big Lake Oil’s Texon camp in the remote Permian Basin offered su
ch amenities as a hospital, nondenominational church, clubhouse, swimming pool, theater, and golf course. Its pleasant two- or three-room bungalows featured running water and electricity, hardwood floors, and front lawns.
Some camps evolved into more substantial settlements: Oklahoma-based Phillips Petroleum built a large camp at Pantex in the Texas Panhandle, which eventually became the town of Phillips. The Amarillo-area camps of Skelly and Roxana came together to form a town of several hundred, Skellytown, with two refineries and a carbon black plant.
Many were unsavory places. At Mexia, bootlegging became so flagrant in 1922 that the Fifty-Sixth Cavalry of the National Guard was dispatched to support federal agents. One of the most notorious towns was Borger, near Amarillo. Founded in 1926 by Oklahoma town-site promoter A. P. “Ace” Borger, the rough-and-ready village featured numerous hotels, cafés, a plethora of decrepit wooden buildings, gambling halls, brothels, and speakeasies within weeks of an oil strike. Borger’s citizenry showed little interest in observing the law, and the moonshine and narcotics trade flourished. In 1929, an area district attorney was murdered prompting Texas Governor Dan Moody again to send in the National Guard and to place Borger under martial law.
Wink was equally rowdy, dominated in its boom years by an allied group of bootleggers, gamblers, and corrupt politicians. At first the settlement had no law officers, and the closest sheriff was an hour away. With lawbreaking rampant, the Texas Rangers raided the town on several occasions in the late 1920s, to little lasting effect; in 1929, four people were killed in a murder spree. Such goings-on contrasted strongly with life in the nearby Humble Oil camp, which was reserved for supervisory workers such as “gang pushers.” Strict camp rules required house inspections by the company and prohibited the keeping of dogs or livestock.
