Louis C. Fraina

Revolutionary Socialism


Concentration and Labor

[This article by Louis C. Fraina appeared in The International Socialist Review of August, 1913, under the title The Call of the Steel Worker. It is reprinted hereas supplementary to the analysis of concentration, as a general tendency, made in earlier chapters of this book, and to illustrate the specific effects of concentration on wages and conditions of labor.

[The steel industry is typical of concentrated industry and of Imperialism, the nerve-center of modern capitalist production. It is an industry that constitutes the material factor in waging war today; and it profits most from war and Imperialism.

[This article describes the normal conditions of the steel industry, not its abnormal war aspects. Obviously, under war conditions, the degree of exploitation and of profits are each increased. A light is thrown upon these conditions by the report of John A. Topping, chairman of the Board of Directors of the Republic Iron and Steel Company, made at the annual stockholders’ meeting on April 17, 1918. Mr. Topping reported total profits for the year 1917 of $38,769,021.39, and said: “The Republic Iron and Steel Company can be said to have been reborn and remade.” The profits of the United States Steel Corporation have been phenomenal.

[The steel industry is an animating factor in Imperialism; the steel workers will yet become an animating factor in the proletarian revolution.]

“I never had a strike as long as I was in the steel business.” Andrew Carnegie, Angel of Peace with the heart of steel, made that astounding statement to the Stanley Steel Investigating Committee. Expansively, benignantly, Andrew of the gentle soul and cultural urge gave his lying testimony – under oath. Homestead? Braddocks?

The lie was too much for the committee. It was such a crass, palpable, stupid lie. Carnegie was compelled to retract and admit strikes. But having saved its neck, the committee wished to go no further and decided that the bloody annals of Homestead were “really extraneous to the investigation.”

“Let’s not open up the old sores,” pleaded Congressman Gardner, Republican.

“I agree with Mr. Gardner that it would be unkind to Mr. Carnegie,” acquiesced Stanley, Democrat.

“Unkind”? Men slain in cold blood to insure profits; unionism crushed. Where at Homestead there was one plate mill in 1892 employing three crews of men working eight hours a day, now there are four mills each with two crews, working twelve hours a day; work increased 50 per cent and wages only 20 per cent. “Unkind”? It is “unkind” to remind the perpetrator of this of his villainy; but it is not “unkind” for such degrading conditions to exist. Blessed be Capital in its Holiness!

This typical piece of capitalist hypocrisy has since been put into the shade. As with machinery, capitalist hypocrisy of yester-ear is always being improved upon – progress in all things! Testifying for the defense in the suit to dissolve the United States Steel Corporation, former Ambassador Bacon said that “love of his fellow-men,” of the workers (!?!), was the basic motive that led J. Pierpont Morgan to organize the steel trust. “His first great object,” testified Mr. Bacon, “was by reason of the decrease in the cost of production to make it possible to improve the conditions of labor by increasing wages and bettering conditions.” Amplifying this, the New York Commercial, June 18, 1913, said with editorial effrontery:

“The new regime of iron and steel production has been singularly free from this bellicose attitude on the part of labor. It may be attributed in a large measure to the Morgan idea that to get the best results of heavily capitalized industry, it must be organized on a basis which permits a large and generous study of the interests of labor.”


And, of course, if we accept the statements in the “Amen!” spirit, and that is the purpose, the Press now playing the role of Church, they are gospel truth. But being Infidels, we investigate:

Obviously, the Steel Trust has been a bonanza to its owners. Heavily-capitalized industry pays. But this “prosperity” is a sort of mirage in the desert to the proletariat.

Examining the figures compiled by the Bureau of Labor report for the pig iron branch of the Steel Trust, we ascertain:

  1. In Pennsylvania mills in 1902 the Trust employed 37,191 men, who produced 8,111,000 tons of pig iron.
  2. In 1909, the workers had decreased numerically to 14,921; yet their output increased 2,610,024 tons – they produced 10,721,024 tons of pig iron. And the men were employed fewer days.
  3. Total wages in 1902, $10,191,579; in 1909, $7,702,304 – a decrease in wages of $2,489,275.
  4. The average daily wage in seven years increased twenty cents.
  5. Output per man increased from 1.51 to 2.39 tons in the seven years. Labor-cost per ton decreased from $1.25 to $0.82 per ton.

The facts of pig iron apply to the steel industry as a whole, and to concentrated Capitalism.

Concentrated capital, the form to which all capital trends, means greater power of exploitation. Concentrated capital means:

  1. Availing itself of the most efficient existing machinery, and improving that machinery, concentrated capital extracts an increasingly large volume of surplus value from the proletariat.
  2. Simultaneously with greater output flowing from machinery, productivity of labor is increased by the form of work – large co-operative activity, “the collective power of masses.”
  3. This increased productivity proceeds simultaneously with relatively lesser number of employees; hence increasing unemployment and competition, thereby preventing a general rise in wages.
  4. While marshalling the workers into an industrial army, concentrated capital succeeds in destroying the potential proletarian power of this army by dividing the workers with a variety of schemes.
  5. The workers only gradually awaken to a sense of the power which is their’s by being organized in the “labor army” of concentrated capital; but the awakening comes, sooner or later.
  6. In the meantime, concentrated capital sweats out of the proletariat fabulous profits, while actually paying less wages, and, socially measured, making worse the condition of the proletariat.

The Bureau of Labor recently made public a special report of its investigation into the iron and steel industry as a whole. The investigation covers the period of May, 1910, embracing 212 blast furnaces and steel plants, employing 172,706 men.

Of the total 172,706 employees, 13,868, or 8.03 per cent, received less than 14 cents per hour; 20,527, or 11.89 per cent, received 14 and under 16 cents; and 51,417, or 29.77 per cent, received 16 and under 18 cents. Thus 85,812, or 49.69 per cent of all employees, received less than 18 cents per hour.

Those receiving 18 and under 25 cents per hour numbered 46,132, or 26.71 per cent; while 40,762, or 23.61 per cent, earned 25 cents and over. A few very highly skilled employees received $1.25 per hour; and those receiving 50 cents and over per hour numbered 4,403, or 2.55 per cent of all employees.

Figuring on a 12-hour day, 131,944 employees, or 76.4 per cent of the total, received from $1.68 to $3.00 in daily wages, while half of the men received from $1.68 to $2.16.

On February 1, 1913, the Steel Trust made “a general increase in wages and salaries, averaging for employees receiving less than $2 per day about 12½ per cent.” We do not know whether the increase has actually been made; we must take Chairman Gary’s word for it. But if it has the “increase” is a mere bagatelle compared with the gigantic rise in the cost of living and the yield of profits.

It must be observed that despite this “increase” in wages, which Gary claims is $12,000,000, profits of the Steel Corporation for the first quarter of 1913 were higher from eight to twenty million dollars for eight years, and lower from five to two millions for three years. So huge is labor’s yield of surplus value in trustified industry that profits are always large despite “increased operating expenses.”

The picture drawn by steel mill wages is one of grinding, agonizing toil, of a machine existence – just enough oil in the form of wages to keep the human machine going. The $1.68 to $2.16 daily wage is even lower, considering that few steel workers are steadily employed. Social workers estimate that $700 to $800 is the minimum yearly income to sustain a proletarian family on common necessaries. Most of these steel workers never earn that. They must, therefore, live a materially sub-human existence.

Not only are wages low, but hours of work are extraordinarily high, Of the 172,706 steel workers investigated by the Bureau of Labor, 50,000 or 29 per cent, customarily toiled seven days per week, and 20 per cent sweated 84 hours or more per week, which means a 12-hour working day every blessed day in the week, including Sunday. Nearly 43 per cent of the men were found working 72 hours per week, or 12 hours per day for a 6-day week. Men often toil 20 to 30 hours at a stretch. A plan is mooted to give the 7-day men one day off a week, but this would not affect the 72-hour a week men. Toil would continue frightful.

The hypocrtical plea of the steel barons is that a “metallurgical necessity” exists for the 7-day week, for continuous operation. But this continuous operation could be secured without sweating the men seven days a week. The plea is a dastardly subterfuge. The investigators developed the fact that the 7-day week was not confined to the blast furnace department, where there is a “metallurgical necessity” for continuous operation, and where 88 per cent of the men toil seven days a week; but it was found that, to a considerable extent, in other departments where no “metallurgical necessity” exists, work was also carried on Sundays.

In an effort to silence public opposition the Steel Corporation made a bluff to remedy these horrible conditions. A committee of stockholders was appointed to investigate the 12-hour day, which said among other things:

“We are of the opinion that a 12-hour day of labor, followed continuously by any group of men for any considerable number of years, means a decreasing of the efficiency and lessening of the vigor and virility of such men.” (My italics)

The Finance Committee than appointed a sub-committee which reported against the change at the stockholders’ meeting of April 21, 1913, on the ground that “unless competing iron and steel manufacturers will also enforce a less than 12-hour day, the effort to reduce the twelve hours per day at all our works will result in losing a large number of our employees, many of them preferring to take positions requiring more hours of work per day.”

A mesh of hypocritical pretense. The matter of competition cuts no figure, for the “trust” has “gentlemen’s agreements” with the “independents” not only concerning prices, but conditions of labor. They are agreed to crush labor, but do not wish to agree to “improve” labor. Another subterfuge John A. Fitch exposes in the Survey:

“Of course, nothing is said in this report, nor was anything said at the stockholders’ meeting, as to the real reason why workers leave their positions.

“The facts are that the cost of this reform was borne by the men. The Steel Corporation did not pay its men their old earnings for their new six-day stint.”

Economic necessity, and not that “the men like to work twelve hours a day,” as Judge Gary impudently claims, compels these men to toil inhumanly.

Nevertheless, an 8-hour day in the steel mills is only a matter of time. Capitalists are recognizing that non-sweated labor is the most efficient. This reform, says the Boston Transcript, “experts declare will increase, rather than diminish, dividends.” And the Bureau of Labor argues that –

From the experience of English blast-furnace owners who have adopted the eight-hour shift system, and from the experience in other industries, it will tend to produce a much more efficient force of workmen. There is no increase in “cost of production,” and the quality of the product improves greatly.

The steel barons have a purely capitalist interest in their slaves, not at all human. Recently, steel superintendents in certain Pennsylvania steel towns appeared in court and argued against granting saloons licenses, as saloons menaced their profits, drink sapping the workers’ efficiency.

Intoxication is a logical result of steady, grinding toil. And saloons flourish in steel towns. Toil in steel plants, especially in the blast furnaces, saps vitality and develops an overpowering desire for stimulants. The men drink, and drink, for in drink their sorrow vanishes any they have a momentary thrill of pleasure. And many, if not most, drink because of a blind, dumb, rooted resentment. They hate the boss, they hate work, they hate themselves, they hate life. This resentment and hatred shall be harnessed to the mighty ends of the Revolution.

It was during the Passaic, N.J., textile strike. I was interviewing one of the strikers, a wisp of a Polish girl of sixteen. Toil in the industrial Bastile had not yet dried the red of her cheeks.

“My mother lives in Pittsburgh,” she said. “I send her what I can. My father worked in the steel mill, worked hard and long. Then he began to drink, and became unkind. Oh, yes, he was good before that. One day his arm was cut off and he became worse. Then mother and I had to leave him.”

“Do you ever see your father now?”

“Never. And we don’t want to, either. But I saw very little of him in the old days, he worked so long.”

The Steel Trust plumes itself on having had no strikes. “There have been no strikes or disturbances in the operation of the great steel company, and comparatively few in its more powerful rivals, which have patterned after its ideals and labor plans,” says the Commercial. The reason thereof is plain. The Steel Trust terrorizes its employees and holds them in mental, physical and spiritual bondage – for the Church in the steel centers is owned body and soul by the exploiters. The men are forbidden to organize. They must present grievances individually; even a committee must not be formed. A comprehensive spy system is maintained; men are afraid to talk for fear of discharge. An investigator says:

“I called one day at the home of a skilled steel worker, an employee of the United States Steel Corporation, and he sent his wife to the door to tell me that he couldn’t talk with me because the company had ‘given orders that the men shouldn’t talk about mill work.’ There was a wage cut at Homestead in 1908 that set the whole town talking around their firesides. But on the street the men would deny all knowledge of it.”

The associative spirit is crushed. The workers dare not act collectively; the trust takes care that they don’t; and individually they are helpless. Any move collectively to improve conditions means discharge. In 1906 the workers of Jones & Laughlin, powerful “independents,” planned a meeting of protest against Sunday work. The superintendent threatened with discharge whoever attended the meeting. The meeting was not held. This practise is general in the iron and steel industry.

Then there is the “pension system.” Pensions rivet employees to the employer. They are a chain-ball on the ankle of proletarian action.

The steel industry has applied the “efficiency system” with marked success. One phase of the “efficiency system” is the more intensive exploitation of the human unit in production; the other phase, more important to the capitalist at the present stage of things, is holding the worker in subjection and discouraging union organization.

Work, Wages and Profits by H.L. Gantt, a book written for employers and published by The Engineering Magazine, New York, gives the snap away. Gantt advocates the “efficient utilization of labor”; this implies getting the worker to increase his output, and as one of the means of doing this the “task and bonus” system is offered. The work is divided into “tasks” and apportioned among the workers. The man who completes his task within the time set by the superintendent (time being decided by the most rapid worker) receives a “bonus.” Instituted in the plants of the Bethlehem Steel Company, the assistant superintendent after two months’ trial wrote that the method had “eliminated the constant necessity for driving the men.” Gantt says that “the average monthly output of the shop from March 1, 1900, to March 1, 1901, was 1,173,000 pounds, and from March 1, 1901, to August 1, 1901 (after the ‘bonus’ system was inaugurated), it was 2,069,000 pounds.” The shop employed 700 men and paid on the “bonus” plan only 80 workers out of the entire 700.

The “task and bonus” scheme decreases “cost of production” and increases the workers’ yield of surplus value at small additional expense to the employer, as only a few receive the “bonus.” It eliminates the “necessity for driving,” as the worker, lured on by the “bonus” will-o-wisp, becomes his own slave-driver.

“So far this system has never failed to create a strong spirit of harmony and co-operation” between employer and employees; it shatters union efforts, as the employer uses the scheme to separate the “bonus” receivers from the unsuccessful ones, creating a sort of “bonus aristocracy.” Gantt opposes labor unions and employers’ associations as they can never “effect a permanent solution of the problem of the proper relations between employers and employees”; his “task and bonus” system does bring about “proper relations,” as it discourages labor unions by inciting workers to strive individually, instead of collectively, to increase their wages. What Marx, in Capital, said of wages, applies to the “efficiency” movement – “The rise of wages, therefore, is confined within limits that not only leave intact the foundations of the capitalistic system, but also secure its reproduction on a progressive scale.”

But capitalist chicane cannot stifle the revolutionary spirit. The very effort to stifle creates the revolutionary spirit. There is a revolutionary group, a small group, but that matters not, among the steel workers. And they are biding their time. Revolt is near. It is bound to come. It is here. John A. Fitch recites a typical episode:

“It was a family of intelligence and breeding, and evidently of strong religious principles. The father had been telling me about the experience in a long life as a workman. The son had sat silently acquiescent in his father’s analysis of existing conditions, but following the conversation with attention. Finally, addressing both, I asked what, in their judgment, would be the outcome of the unrest and discontent? There was silence for a moment and then the father shook his head sadly and said: ‘There is no way out. There will be no change.’ But the son cried out through set teeth: ‘Yes, there is a way out, and it is through an armed revolution.’”

Steel conditions are universal, the steel industry being typical of trustified Capitalism. Trust-Capitalism creates a new proletariat, the proletariat of machine-tenders, of common, unskilled labor. Says the Bureau of Labor report: “Large as is the proportion that unskilled labor forms of the total labor force in the iron and steel industry, steel experts have noted the fact that the tendency of recent years has been steadily toward the reduction of the number of highly skilled men employed and the establishment of the general wage on the basis of common or unskilled labor.” (My italics.) Wages paid common labor in the steel industry are the wages of common labor everywhere. There is an identity in exploitation. This develops fraternal spirit, and, coupled with its strategic industrial position, makes common labor the revolutionary force.

Our agitation, our organization efforts must recognize this fact: Common labor dominates industry. And when common labor in steel revolts, when this basic industry feels the clutch of the Revolution, Capitalism will be shaken to its depths. The revolt of the steel workers will sound the call for the Social Revolution.

Last updated on 14.10.2007