Iron Range: U.S. Steel

Most people don’t know it, but Minnesota Iron Range was the impetus for many of the largest economic events in the United States during the earliest years of the twentieth century.  Financial titans like J.D. Rockefeller, James J. Hill, Andrew Carnegie, and J.P. Morgan all were involved with the Range to a large degree at this time.   All of these events culminated in the incorporation of America’s first billion-dollar company (the value at incorporation would be $31,017,846,416 in 2005) U.S. Steel. Considering that U.S. Steel was one of the largest corporations during a period of corporate dominance in the country – the stock symbol for U.S. Steel is merely “X” – the importance of the Range to the economic history of the country cannot be overstated

This cartoon, published in the Minneapolis Times on July 19, 1894, depicts a popular opinion about the Rockefeller and Merritt court battles. Source: Walker.

The beginnings of the U.S. Steel story on the Range lie in the second theme of iron production in Minnesota noted in the section on the Vermillion, that local ingenuity at the beginning of production of new ore deposits always ended in take-overs by the finacial elite of the East Coast.   Indeed, as noted on the page about the Mesabi, the Duluth-native Merritt family was almost exclusively responsible for bringing the Mesabi the first steps towards the national market.  However, the Merritts ran into financial trouble – particularly regarding their efforts to construct the railroads necessary to transport their ore – and, through a long and drawn out process, ended up borrowing substantial sums from the Standard Oil robber baron J.D. Rockefeller.  Had the large depression of 1894 hit the country, the Merritts may have successfully maintained control over their treasured Mesabi project, but the lack of available capital induced by the depression forced the Merritts out of the Mesabi business. The Merritts didn’t go quietly, however, and extensive court battles were fought between them and Rockefeller.  Colorful stories often accompanied these legal struggles.  Following a court date early in the battles, a representative for Rockefeller once had to go into hiding in Duluth, to which the Merritts were fiercly loyal and where the Merritts were consequently very popular, and clandestinely hop a train out of town.

John D. Rockefeller, as he looked around the time he first got involved in the Range, circa 1893. Source: Walker.

The day the Merritts lost control of their Mesabi properties was the last day that there was any local control on the Range.  After Rockefeller took over, the Mesabi became an important pawn in a very high stakes trading game between the very powerful players mentioned at the top of this page. Rockefeller was not particularly keen on owning the iron resources of the Mesabi.  This made him very willing to participate in a three-way deal organized by J.P. Morgan.  Morgan wanted to vertically integrate the steel production facilities of the Great Lakes by purchasing the iron ore resources of the Mesabi as well as some of the integrated steel mills of the lower lakes and combine them into one company.  He was also able to coax Andrew Carnegie into selling his steel making facilities, and U.S. Steel was born.  U.S. Steel would rule the roost on the Range for a long period beginning in 1901, when the company was officially incorporated.back to top

Labor Issues

The first and second decades of the twentieth century were a time of great labor unrest in the United States, and the Iron Range was no exception.  Beginning in 1907, the fight for labor rights became a critical part of Range culture and remains very important today. Finnish immigrants on the Range were very important to early labor struggles, many sources cite the socialist leanings of Finland at the time as the reason for Finns taking the lead in the labor movements.

Henry W. Oliver, the face of U.S. Steel on the Range in the early years. The Oliver Mining Company was named after him. Source: Walker.

As the 1910s progressed, labor pitted itself against the mining companies on a number of fronts.  A famous strike on the Range occurred in the summer of 1915 and left three people dead.  The miners were rebelling against a series of unfriendly working conditions and what they felt was an unfair amount and system of wages.  Miners at the time were paid by ore mined instead of hours worked, and since mining captains chose the work location of the mining time, the mining captain was quite susceptibled to bribes.  In addition, miners were charged for the fuses, powder, and blasting caps that they used in the extraction of ore.  More importantly for the urban fabric of the region, living costs were high owing to the need to import many basic supplies into the region.  Some estimates indicate that living expenses were greater than 20 percent higher than in the Twin Cities at the time of the strike.  In addition, food costs were between 50 percent and 100 percent higher than in the Twin Cities.

The Oliver Mining Company, as the subsidiary U.S. Steel that handled operations on the Range was called, worked very hard to dismantle early labor efforts.  U.S. Steel was well known for its hard-line anti-Labor stance, and its policy on the range manifested this stance in every way.  The company used a variety of anti-union techniques that ranged from keeping an excess labor supply on the Range, to using an extensive network of spies and blacklists to banning Finns from working on the Range.  The ethnic composition of the Range’s workforce changed from 18 percent Finn before the first labor agitation incident in 1907, to 8 percent several years later.  Around 1,200 Finns left the region as a result, and other made ill-fated attempts to farm in the region. back to top

A Finnish Lutheran Congregation. Prior to the 1907 aggitation, Finns dominated the Range. Afterwards, their numbers were reduced by discriminatory hiring policies. Source: Minnesota Historical Society.