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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
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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

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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Review, 48 (1958), 408–26;Google Scholar and Mancke, R. B., “The American Iron Ore and Steel Industries: Two Essays” (unpublished doctoral dissertation, Massachusetts Institute of Technology, 1968).Google Scholar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Tiffany, A. Paul, “The Roots of Decline: Business-Government Interaction in the American Steel Industry, 1945–1960” (unpublished doctoral dissertation, University of California, Berkeley, 1983), pp. 79–118.Google Scholar

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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

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

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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

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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

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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

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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