Henry Clay Frick

views updated Jun 11 2018

Henry Clay Frick

American industrialist and financier Henry Clay Frick (1849-1919) played leading roles in expanding the Carnegie Steel Company into the largest such enterprise in the world and in forming the United States Steel Company.

Born to a farming family in western Pennsylvania, Henry Clay Frick was the grandson of a wealthy miller and distiller. Although Frick received little formal education, he early showed an aptitude for business and at 19 became bookkeeper for his grandfather's businesses.

Frick was aware of the potential value of coking coal deposits for the burgeoning steel industry, and with financial backing from relatives and the Pittsburgh banker Thomas Mellon he began buying coal lands in the Connellsville region and constructing coke ovens. The enterprise brought handsome returns. Plowing all profits into acquiring more coal land and building more ovens, Frick and Company eventually controlled 80 percent of the output of this region.

Partnership with Carnegie

Meanwhile Andrew Carnegie, aware of Frick's abilities as financier and industrial manager and anxious to have a continuing supply of coke for his great steel company, took Frick in as a partner in 1882 and allowed him to purchase an 11 percent stock interest. At the same time, Carnegie purchased a controlling interest in the Frick Coke Company, though Frick continued as president.

Frick was one of the managing partners of the Carnegie Company until 1889, when Carnegie retired from active management and Frick was elected chairman. At this time the firm consisted of five or six mills and furnaces around Pittsburgh. There was no integration of production and no centralized management except the informal guidance supplied by the managing partners (a group of perhaps 6 out of about 25 owners of the business). In 1892, in accordance with a plan worked out by Frick, the productive units were reorganized as the Carnegie Steel Company, Ltd., capitalized at $25 million and, although not incorporated, probably the largest steel company in the world. Frick then introduced centralized management procedures which greatly increased the firm's efficiency.

Homestead Strike

In 1892 occurred the Homestead strike, one of the most bitter labor conflicts of the decade; it cast a shadow over the rest of Frick's career, cooled his relationship with Carnegie, and almost cost Frick his life. In response to depressed business conditions and to compensate for expensive new machinery that greatly increased worker productivity, Frick proposed to lower the piecework wage rate. In response, the Amalgamated Iron and Steel Workers Union struck the Homestead plant. Frick recruited 300 strikebreakers through the Pinkerton Detective Agency, bringing them in armed barges down the Monongahela River. When the strikebreakers attempted to land, a day-long battle ensued. Ten men were killed and 60 wounded; order was restored only when the governor placed Homestead under martial law. Frick was widely denounced throughout the country for provoking the violence, but this criticism was soon followed by acclaim for his courage, when, with the help of a secretary, he subdued an assassin who shot him twice and stabbed him several times. Despite his wounds and loss of blood, Frick finished his day's work.

During the late 1890s the company prospered greatly. Between 1889 and 1899 annual production of steel rose from 332,111 to 2,663,412 tons, and profits advanced from about $2 million to $40 million in 1900. To secure a continuing supply of ore, Frick, in partnership with a Pittsburgh industrialist, acquired extensive ore properties in the newly opened Mesabi Range near Lake Superior, and Carnegie, at Frick's urging, leased other lands in an area belonging to John D. Rockefeller.

Formation of United States Steel

Although the company was extremely prosperous, its existence as a partnership was terminated in 1899 largely as a result of a quarrel between Frick and Carnegie. When Carnegie, acting on what he believed to be a binding agreement with Frick, set a price for coke from the Frick Coke Company that was considerably below the market price, Frick suspended deliveries, and the Carnegie Company faced a shutdown. Carnegie, as majority stockholder in both the coke and steel companies, forced Frick's resignation from both firms. By the terms of the "ironclad" partnership agreement of 1887 the Carnegie Company was obligated to purchase Frick's stock upon his resignation, but Carnegie refused to pay more than the valuation set by the "ironclad," although by 1899 the stock was worth three times that figure. Frick sued in equity to have the agreement set aside. Because of Frick's damaging revelations of the company's apparently exorbitant profits, Carnegie settled the suit by allowing the company to be incorporated at a figure which gave a value of $15 million to Frick's stock. Both men retired from management, and the two never spoke to each other again. In 1901, with the active participation of Frick, the Carnegie Corporation was merged into the United States Steel Company.

Until his death in 1919 Frick participated as a director in the affairs of many large corporations. He also formed a magnificent art collection, today housed in the Frick Museum in New York City. A large, handsome man with a powerful physique, Frick was hardworking, quiet, and reserved—the antithesis of the ebullient Andrew Carnegie. Frick left a fortune of about $50 million, five-sixths of it donated for public and philanthropic purposes.

Additional Sources

Schreiner, Samuel Agnew, Henry Clay Frick: the gospel of greed, New York: St. Martin's Press, 1995.

Warren, Kenneth, Triumphant capitalism: Henry Clay Frick and the industrial transformation of America, Pittsburgh: University of Pittsburgh Press, 1995. □

Encyclopedia of World Biography