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Frick, Henry Clayfree

(19 December 1849–02 December 1919)
  • Joseph Frazier Wall

Frick, Henry Clay (19 December 1849–02 December 1919), industrialist, was born in West Overton, Pennsylvania, the son of John W. Frick, a farmer, and Elizabeth Overholt, the daughter of Abraham Overholt, a successful distiller of whiskey and the wealthiest citizen in Westmoreland County. Other than providing a small cottage and a few acres of poor land on his estate, Overholt shared none of his wealth with his daughter and her family. He did, however, serve as a role model for his grandson. From early childhood, Clay, as his family called him, was eager to escape the poverty with which his unambitious father seemed content and was determined that before he reached the age of thirty he would acquire a larger fortune than his grandfather’s.

In 1864 Frick enrolled in nearby Westmoreland College and from there transferred to Otterbein College in Ohio. Having early set his goal on becoming a millionaire, Frick had little interest in the classical curriculum of a liberal arts college; after only ten weeks at Otterbein, at the age of seventeen he left college to take a job as a clerk in an uncle’s store in Mount Pleasant, Pennsylvania.

Finding salesmanship a congenial occupation, in 1868 Frick accepted a position in a Pittsburgh department store. He quickly demonstrated his talents both in knowing and properly displaying the store’s merchandise. His employer commended him particularly on his success in “waiting upon lady customers.” A severe case of typhoid fever, however, necessitated Frick’s returning home. Upon his recovery his grandfather employed him as his chief bookkeeper. This position held out the possibility that he might eventually take over the management of the Overholt distillery, but Frick was a young man in a hurry, eager to find his own road to wealth.

Frick’s cousin, Abraham O. Tintsman, in 1869 had entered into a partnership with Joseph Rist and A. S. M. Morgan to buy up some 600 acres of coal land in the nearby Connellsville area. The soft bituminous coal in which the region abounded apparently had little industrial use except for the manufacture of coke. In 1870 only twenty-five coke plants were in operation in the country, but even that limited production exceeded the demand; iron manufacturers wanted anthracite coal and the few steel mills used charcoal.

Tintsman and his partners soon regretted their venture. Frick, however, aware of recent technological innovations in the manufacture of steel, had the vision to foresee that the new Bessemer process would provide an expanded market for coke. When Morgan dropped out, Frick asked to join the enterprise. He then persuaded the others to expand their operations. On borrowed money they bought up 123 more acres of coal land, and in 1871 they formed a company bearing the name Henry C. Frick Coke Company.

From that moment on, Frick was obsessed with buying up all the Connellsville coal lands and building as many coke ovens as he could finance. Driven by his vision, Frick approached Pittsburgh’s leading and most conservative banker, Thomas Mellon, to ask for a loan of $10,000. Undoubtedly to the surprise of Frick and even of Mellon himself, the banker provided the loan. It was the beginning of a long and profitable association between the Mellon family and Frick.

By 1872 Frick’s company had built 200 ovens and was selling all the coke it could produce. The depression of 1873 caused the price of coke to drop to 90 cents a ton, and there were few purchasers even at that price. Frick’s partners, who had only reluctantly acceded to his expansion policies, were now thoroughly frightened and eagerly accepted Frick’s offer to buy their interests. Frick never wavered in his belief that steel was the key product in industrial development, and coke was the key ingredient for the manufacture of steel. He kept a sharp watch as Andrew Carnegie, also undeterred by economic depression, was building the J. Edgar Thomson steel plant. Like his future partner, Frick saw bad times as a good time for expansion. Again with money borrowed from Mellon, he acquired more land and ovens by buying out timid competitors. When the steel mills were again in full production by 1877, Frick was ready to furnish coke at an ever-increasing price—up to $4 a ton. In 1879, on his thirtieth birthday, he had a fortune of $1 million, twice that of his grandfather’s estate.

In 1881 he married Adelaide Childs of Pittsburgh. While in New York on their wedding trip, the Fricks were invited to a dinner given by Carnegie and his mother. Frick quickly sensed that America’s Steel King had something more in mind than simply extending best wishes to the newlyweds, but he was not prepared for Carnegie’s sudden proposal of a toast to the success of the Frick-Carnegie partnership. Even if caught off guard by this surprise announcement, Frick was not displeased. He knew what Carnegie wanted—an assured source of the best coke made in America. Frick also knew what he wanted—access to Carnegie’s capital to expand his coke empire further. Carnegie’s toast was acknowledged with one of Frick’s rare smiles.

Within a month after Frick returned home to Pittsburgh, the partnership was effected. The Frick Coke Company in 1882 was reorganized and capitalized at $2 million. Carnegie initially received 11 percent of the company, which through a generous use of capital he increased to over 50 percent. Frick now had the funds for which he previously had had to beg.

Carnegie and Frick held the same views on the proper management of a business, which augured well for this partnership. The reduction of the cost of production was what mattered. Profits would then result, but the gains made in the marketplace were not to be distributed as dividends but rather used for larger and more efficient production. Both men believed in expanding in those times when their competitors were cutting back, and both held fast to the limited partnership organizational structure so as to ensure control of company policy. Each admired the other’s insatiable appetite for more money and his shrewdness in satisfying this greed.

In personality and temperament, however, the two were poles apart. Neither man ever understood or particularly liked the other as a person. Carnegie’s love of the limelight, his sanctimonious preaching of the Gospel of Wealth, and his foolish prattling about the “rights of labor” were all anathema to Frick. Frick’s total absorption in business, his lack of humor, and his apparent ignorance of literature, science, or of any region outside the narrow confines of the Monongahela valley made him in Carnegie’s eyes the prototypic American businessman and socially uninteresting.

Carnegie concurred with the opinion of another partner whom he did find interesting, Charles M. Schwab, that Frick was “a curious and puzzling man. No man on earth could get close to him or fathom him. He seemed more like a machine, without emotion or impulse. Absolutely cold-blooded” (Hessen, p. 106). Yet Frick was a far more complex person than his business associates ever appreciated. Cold-blooded he indeed was in his office, but in his home he was a devoted family man and a loving father to the two of his four children who survived infancy. Carnegie saw no evidence that his partner ever read anything except trade journals and business reports, but Frick was to amass one of the finest private collections of European art in America. The story of a business associate who in calling on Frick at home found him seated regally on a fifteenth-century papal throne reading the Wall Street Journal is undoubtedly apochryphal but nevertheless illustrative of Frick’s contradictory attributes.

So impressive were Frick’s managerial skills in directing the affairs of the coke company that in January 1887 Carnegie decided to bring Frick directly into the steel business by selling him a 2 percent interest in Carnegie Brothers Steel Company that entitled him to a seat on the board of managers. Two years later Frick’s interest was increased to 11 percent, and he was made chairman of the board. Carnegie wrote to Frick, “Take supreme care of that head of yours. It is wanted. Again expressing my thankfulness that I have found THE MAN, I am always yours, A. C” (Harvey, p. 90).

Over the next few years Carnegie found many occasions to reaffirm his judgment that he had found the right man. Frick took as masterful a leadership of Carnegie’s steel business as he had of the coke industry. He acquired Duquesne Steel at the bargain price of $1 million, and he built the Union railroad to tie the many separate Carnegie steel operations in the Pittsburgh area into an integrated unit. Over Carnegie’s initial opposition, Frick also acquired through lease and purchase the rich Mesabi iron ore reserves of northern Minnesota. He pursued cost reduction with as much insistence as Carnegie himself, and it was he who in 1892 consolidated the two separate Carnegie Brothers and Carnegie Phipps steel companies into one giant concern, the Carnegie Steel Company, Ltd., to achieve administrative efficiency. Frick’s management paid off handsomely. In 1889, when he took the chairmanship of Carnegie Brothers, the net profit for all of Carnegie’s steel operations amounted to $3.5 million. In 1899 the net annual profits reached $21 million—a 600 percent increase in one decade.

With such rich returns, there should have been no threat of disruption to this successful alliance. Differences in temperament as well as over means by which to achieve commonly held goals, however, resulted at the end of this same decade in a particularly acrimonious divorce. The responsibility for this break lay with both men. Frick in his eagerness to acquire capital had allowed Carnegie to grab a controlling interest in the Frick Coke Company, but quite understandably Frick continued to regard the company he had founded as his special province. He fiercely defended it even at the expense of Carnegie Steel, in which he was a major shareholder. Carnegie, on the other hand, treated the coke company as a mere auxiliary support, existing only to serve the needs of steel manufacturing in whatever way Carnegie desired. For the first time since he had entered the industry in 1865, however, Carnegie now encountered a partner who refused to bow in humble obeisance to his command. A single enterprise with two commanders giving contradictory orders was destined to run aground.

The first serious disagreement came in 1887 when the coke workers of western Pennsylvania went on strike. Frick had entered into agreements with the other coke owners to hold firm against labor’s demands, but Carnegie needed coke. He went over Frick’s head and ordered the company to break its pledge and to end the strike on the workers’ terms. An embarrassed and angry Frick promptly resigned as president of the company that bore his name.

A strike at Homestead provided a further rift in their relationship. Homestead was one of the few plants in the Carnegie organization that had unionized labor. Carnegie was determined to break that union when its contract came up for renewal in the summer of 1892; in this decision Frick was in complete agreement. Before leaving for his annual summer vacation in Scotland, Carnegie had given Frick carte blanche to destroy the union by any means he saw fit. Frick’s means entailed breaking off contract negotiations, locking the workers out of the plant at the moment they called a strike, and then deploying 300 Pinkerton guards to Homestead to protect the scab labor Frick intended to import.

The result was the bloody battle on 6 July 1892 between the people of Homestead and the Pinkerton guards—one of the most violent episodes in American labor history. With the aid of the state militia, Frick was able to reopen the plant and break the union. He delivered what Carnegie had ordered, but Carnegie in far-off Scotland was not pleased. He attempted to shift the blame for the violence at Homestead onto Frick, claiming that if only he, Carnegie himself, had been present, the fiasco would not have occurred. General public sentiment held that Frick was at least honest in his antilabor stand, while Carnegie had played the role of coward and hypocrite. After surviving an attempted assassination by the anarchist Alexander Berkman, Frick even emerged as a public hero. Neither Frick nor Carnegie would ever forget the other’s response to the Homestead strike.

The final incident to rupture the men’s strained relationship occurred in 1899 when the Frick Coke Company raised the price on the coke it sold to Carnegie Steel without Carnegie’s permission. Carnegie forced the maintenance of the former price, but not content with that tactic he sought to punish Frick for insubordination by removing him as chairman of the steel company. Carnegie then demanded that Frick sell his 11 percent interest in the company at the book value of $5 million—far below its actual worth.

Frick’s response was to take the matter to court. The attention that this sensational suit generated forced Carnegie to seek an out-of-court settlement. At a meeting in Atlantic City on 12 March 1900 a compromise satisfactory to Frick was effected. The Carnegie Steel Company was reorganized as the Carnegie Company, capitalized at $320 million. Frick was allowed to keep his 11 percent interest, which under the new organization was now worth $31-plus million instead of the paltry $5 million for which Carnegie had sought to obtain it. The only concession Frick made to Carnegie was to agree never again to hold office in the company.

When Carnegie sold his company to a syndicate headed by J. P. Morgan the following year, Frick’s interest in the resulting billion-dollar United States Steel Corporation again more than doubled in value, and much to Carnegie’s chagrin, Frick was invited to serve on the board of the new corporation. Frick had no difficulty in finding other outlets for his managerial talents. Soon after his ouster from Carnegie Steel, Frick and Andrew Mellon in 1900 built a small but highly efficient concern, Union Steel, for the manufacture of finished steel products; it was later sold to U.S. Steel at a considerable profit. Again with Mellon, Frick founded the Union Trust Company of Pittsburgh. He was also instrumental in the reorganization of the Equitable Life Assurance Society of New York and served as director of the Cerro de Pasco Corporation for the mining of copper in Peru.

In 1905 the Frick family moved from Pittsburgh to a mansion on Fifth Avenue in New York City, especially designed to house his art collection. Here Frick died a few days short of his seventieth birthday and was buried in Pittsburgh.

Frick was a major protagonist in America’s industrial development. In the business world he was regarded as a demanding employer who successfully fought off unionization, a tough competitor, and a manager par excellence. Of Carnegie’s several partners in the steel industry, Frick contributed the most in the building of the industrial empire Carnegie envisioned.

Frick left an estate worth $142 million, of which $117 million was designated for philanthropic purposes. Included among his gifts were his New York home and his art collection (valued at $50 million), to be given to the city of New York after the death of his wife, and a large public park in Pittsburgh.

Bibliography

Frick’s papers are in the Helen Clay Frick Foundation Archives in Pittsburgh. The Andrew Carnegie Papers in the Library of Congress also provide a valuable source of primary material. A major biography—George Harvey, Henry Clay Frick, the Man (1936)—was authorized by the family and is entirely commendatory in interpretation. Other secondary sources of value are Robert Hessen, Steel Titan: The Life of Charles M. Schwab (1975); James Howard Bridge, The Inside History of the Carnegie Company (1903; repr. 1991); Joseph Frazier Wall, Andrew Carnegie (1970; repr. 1989); Kenneth Warren, “The Business Career of Henry Clay Frick,” Pittsburgh History 73 (1990): 4–15; and Jill Connors, “The Fricks at Home,” Americana 20 (1992): 24–31. Obituaries are in the New York Times, 3 and 7 Dec. 1919.