Seven Elements That Have Changed the World (4 page)

For centuries, steel was only produced in batches by expensive processes which lacked scale. However, in 1856 the chance discovery of Henry Bessemer, an English inventor, led to a process which carefully controls the balance of carbon and iron on an industrial scale. This invention, which is still used today, has had the single greatest impact on the development of the modern steel industry. As with many developments in the iron and steel industry, the Bessemer process was born out of a need for better armaments.
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In 1854 Bessemer met with Napoleon III, who wanted a superior quality metal so as to improve his artillery pieces. For Bessemer, this ‘was the spark which kindled one of the greatest revolutions … I made up my mind to try what I could to improve the quality of iron in the manufacture of guns.’
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Bessemer’s breakthrough came in the summer of 1856. One day he opened the door of his experimental blast furnace and noticed some pieces of ‘pig iron’, a type of iron of high carbon content, sitting on one
side without having melted. The temperature must not have been high enough, he thought, and so he let more hot air into the furnace. Half an hour later, to his surprise, the pieces appeared unchanged. He grabbed an iron bar to push them into the bath of molten metal, but discovered that they were not pig iron, but thin shells of pure iron, the carbon having been almost entirely removed. By chance, air had blown through the molten pig iron, raising its temperature and removing impurities. An outside heat source had always been thought necessary to keep the temperature of the furnace high enough to stop the molten iron solidifying. What if, Bessemer wondered, by simply blowing cold air through the molten metal, he could convert an entire crucible of pig iron into pure iron?

So he built another experimental convertor with six pipes at the bottom of the chamber through which to pump air. He opened the valves and air began to push up through the molten pig iron. Bessemer describes what happened next: ‘All went on quietly for about 10 minutes … But soon after a rapid change took place; in fact, the silicon had been quietly consumed, and the oxygen, next uniting with the carbon, sent up an ever increasing stream of sparks … followed [by] a succession of mild explosions, throwing molten slags and splashes of metal high up into the air, the apparatus becoming a veritable volcano in a state of active eruption. No one would approach the convertor to turn off the blast … ’
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After the eruption had subsided, Bessemer poured the molten metal into a pan. It cooled and set into a solid bar. He took a carpenter’s axe and struck the bar with three sharp blows. Each time it sank deep into the soft metal, gouging but not shattering or splintering, as would be expected from brittle cast iron. The violent reaction had kept the temperature high in the convertor, without the need for any external heat supply. He was left with a pure low-carbon form of iron: Bessemer Steel.
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Bessemer’s innovative process is now the basis of all steel making. It produced a material that was not only stronger, tougher and more malleable than wrought iron, but could be made in a fraction of the time and, more crucially, at a fraction of the cost. The traditional steel-making process, involving the slow heating of bar iron alongside charcoal, took ten days and cost over £50 a tonne (around US $6,000 in today’s money
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). His process made a tonne at a tenth of that cost. Before that process, steel was so expensive that it
could only be used for small, treasured objects such as swords, cutlery and valuable tools. Now, ships, bridges and railways, steam boilers and all sorts of machinery could be constructed with cheap, strong and abundant steel. Even the simple nail could now be made quickly and cheaply from steel without the need for lengthy and arduous forging.
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The Bessemer process soon spread around the world. Alfred Krupp was among the first to buy a licence and, by 1867, he was operating the largest Bessemer steelworks on the continent with eighteen convertors.
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Steel production increased most dramatically when the process was rolled out in the US. In 1892, the US had grown its steel output to four million tonnes a year. It would, according to a
Times
article in 1893, take more than three years’ production of all the gold mines in the world to pay for one year’s production of Bessemer Steel.

Bessemer was not an ironmaster, but an inventor, engineer and businessman in a very broad sense.
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He believed that his discovery resulted from the fact that he was not steeped in the traditional practices of making iron. The notion that a blast of cold air could purify molten iron without it solidifying was, on first hearing, ridiculed by many. His earliest and most profitable success resulted not from iron but from a request from his elder sister to help her decorate a book of flower paintings of the many tulips and chrysanthemums cultivated by their father. To do this, he went to a shop in Clerkenwell, London, to buy some ‘Gold Powder’, made from bronze. Returning the next day to pick up his purchase, he was surprised at its high price of seven shillings for an ounce (about US $40 today). Bessemer was certain he could invent a cheaper way to produce it, and so he did just that without any prior experience in the field. His success in making the powder gave him the confidence and finances with which to pursue a career as an inventor and engineer. As Bessemer would later recount, the request from his sister was ‘fraught with the most momentous consequences to me; in fact, it changed the whole current of my life, and rendered possible that still greater change which the iron and steel industry of the world has undergone’.
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Sugar-cane juicers, solar furnaces and diamond-polishing machines were all among Bessemer’s inventive interests. An inspired genius tamed by a shrewd business mind, he based his inventions on the simple principle
of delivering a product that consumers wanted but at a lower price and higher quality than anything that already existed.

Bessemer’s success in the iron industry led him to become a founding member and subsequent President of the Iron and Steel Institute, predecessor to the Institute of Materials, Minerals and Mining in London.
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The Institute was formed in 1869 as a ‘closed shop’ for British Victorian ironmasters who were worried about competition from Europe. On the walls of the Bessemer Room in the Institute hang numerous awards given to him in recognition of his invention. Bessemer became a fellow of the Royal Society and was knighted. The Bessemer Gold Medal, introduced during his presidency, is still awarded for outstanding contributions to the iron and steel industry. But the medal is one of the few reminders of Bessemer’s name that remains today.

Although Bessemer was lauded in his time, he is now largely forgotten; he lies buried beside his wife in a quiet and unvisited corner of West Norwood Cemetery near their former south London home. Despite being one of the world’s greatest inventors and engineers, Bessemer is not thought of alongside Thomas Edison, James Watt or the Wright brothers. Perhaps it is because he is the inventor of a process, rather than a product.
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We remember world-changing objects, such as light bulbs, steam engines and aeroplanes, and also, by association, their inventors. Similarly, we remember the people, such as the amoral arms manufacturer Alfred Krupp, who have changed the world using Bessemer’s process. And we also remember one man who did more than anyone else, in his time, with and for steel. Andrew Carnegie was another President of the Iron and Steel Institute and one of America’s most famous industrialists.
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In the Bessemer Room at the Institute, his portrait hangs opposite that of Henry Bessemer. Under the roof of this aged institution, the inventor and the manufacturer stand as equals, but outside we remember only Carnegie who, using the Bessemer process, became the richest man in the world.

It was oil, rather than iron, that created Carnegie’s first fortune. In 1859, Edwin L. Drake made his momentous discovery of oil in Titusville, not
far from where Carnegie was working on the Pittsburgh Railway lines as a telegraph operator and assistant to Superintendent Thomas A. Scott. The discovery brought a surge of wildcat prospectors to the area. Among the more respectable businessmen in this first wave was William Coleman, who had already made a small fortune in iron manufacturing and coal mining. In 1861, by which time Carnegie had become Superintendent of the Pittsburgh Railway, Coleman invited him to invest in his oil concern. Carnegie received a return that was many times his initial investment and which, in true entrepreneurial spirit, he then invested in his own business.

Carnegie decided to take advantage of his relationship with Scott and Edgar Thomson, the new President of the Pennsylvanian Railway. Many of the wooden railroad bridges had fallen into disrepair during the Civil War and were now rotting. They needed replacing with iron bridges, and Carnegie was just the man to do this. Along with Thomson and Scott, who were still employed by the railroads, Carnegie formed a new company to build iron bridges. Corruption and cronyism were widespread and accepted ways of doing business. It was an environment in which Carnegie flourished; he secured lucrative contracts for his company through friends and business associates, starting with Thomson and Scott.

Henry Bessemer and Andrew Carnegie first met in 1872 when, while on holiday in Europe, Carnegie had visited Bessemer’s new steel works in Sheffield. Unlike Bessemer, Carnegie was not an engineer; his skill was in putting proven inventions to their best use.
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Bessemer became Carnegie’s technological brain and Carnegie became Bessemer’s salesman. The success of the steel works, and the high-quality steel it produced, was proof to Carnegie of the potential of the Bessemer process. He decided to invest with a recent fortune made by speculating in bonds.

In Pennsylvania there was a clear market for steel. During the Civil War, Thomson had become dismayed by the poor quality of rails on which the Union forces relied for transportation. Made from cast iron, the brittle lines would frequently break. Steel would have been better but it was just too expensive at the time.

Carnegie returned to Pittsburgh and embarked on the construction of
a new state-of-the-art steel works, with his old friend William Coleman, to supply the railways. Though there were eight Bessemer steel manufacturers in the US in 1872, none were in Pittsburgh. Two years later, the Edgar Thomson Steel Works opened; from that point on the growth of Carnegie’s steel empire became unstoppable.

When demand slowed, Carnegie would increase, rather than reduce, the output of his steel mills. He would take a contract whatever the profit margin, beating the competition down using his economies of scale. His steel mills were always the biggest, the most automated and hence the lowest cost. He would immediately reinvest profits to expand and modernise his steel empire. He also integrated his business horizontally and vertically, buying up rival plants and bringing coke works and iron ore mines under the umbrella of his steel company. Carnegie’s success came from business skills that we would recognise today. But it also came at the expense of his workers. In the drive for profits he reduced wages and increased working hours. These actions culminated in a strike at the Homestead Steel Works.

In July 1882, the labour contract between Carnegie and his workers at the Homestead Steel Works was due to expire. The skilled workers at Homestead were being paid more than the industry average and Carnegie saw an opportunity to save on labour costs. He also wanted to reduce the influence of the Amalgamated Association union at the mill. At the time the union, whose membership consisted of skilled metalworkers, held a powerful bargaining position. Carnegie saw this as restricting progress and profits and so Henry Clay Frick, whom Carnegie had placed in charge of operations at the plant, cut the workers’ pay. The union would not agree; the steel industry was doing well, and they wanted a share. When the existing contract expired with no new agreement being reached, Frick locked the workers out and built barbed-wire fences and sniper towers to fend off any backlash. He also enlisted a security force, but, as it made its way towards the plant, it was met by the striking workers. Tensions mounted and shots were fired. Many union members were killed. Eventually order was restored and Carnegie got lower wages and removed the union from the plant, but at the price of a tarnished reputation.
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As Carnegie’s business continued to grow, mile after mile of steel railway poured out from his mills. The railroads were the greatest consumers of iron and steel as more goods and more people began moving from the east to the west of the US. The US steel industry, which for years had lagged behind Europe’s, expanded explosively. The amount of steel rolled in 1890 was more than three times greater than ten years earlier. By 1900 output had almost trebled again to more than eleven million tonnes, at which point Carnegie’s mills alone produced more steel than the entirety of Great Britain. Under Carnegie’s leadership, the iron age gave way to the steel age.

Iron conveys wealth and power not only to nations, but also to the individuals who pioneer its production. Carnegie, the child of a poor hand-loom linen weaver from Dunfermline, Scotland, arrived in the US in 1848 practically penniless. By 1863, at the start of his entrepreneurial career, Carnegie’s income was around US $50,000 (almost US $1 million today). In 1901, Carnegie sold his steel empire for US $480 million (US $13 billion today) to J. P. Morgan in what was the largest commercial transaction of its day to consolidate into US Steel.
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Carnegie became the richest man in the world.

In 1986 I was invited to sit on the board of the Carnegie Mellon University Business School by Elizabeth Bailey, the Dean of the School. Elizabeth, an economist, was also an influential member of the Board of the Standard Oil Company of Ohio, where I was the Chief Financial Officer.
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