Henry Clay Frick: The king of coke

12/24/05

Titans Of Fortune by DANIEL ALEF

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* When J. Paul Getty said "the meek shall inherit the earth, but not the mineral rights," he must have been thinking about Henry Clay Frick. Although Frick was slight, with delicate features, he was tenacious, tough and anything but meek. He may not have inherited the earth, but he picked up all the rights to one of its minerals -- coal.

Born Dec. 19, 1849, in Pennsylvania and descended from German-Swiss immigrants, Frick grew up on a farm. His parents were of modest circumstances, but his grandfather was a wealthy whiskey distiller.

Frick was frail and unhealthy as a child. He did not play any sports, and he had no friends. At age 13 he left school and spent a year as a bookkeeper in his grandfather's distillery before apprenticing in a relative's general store. According to historian Matthew Josephson, Frick was "watched over and counseled by the whole strong, sanctimonious, grasping Pennsylvania-Dutch family."

Frick returned to the distillery at age 16 with one goal in mind -- to become a millionaire like his grandfather. The distillery was located above a seam of bituminous coal with a low phosphorous content. Coke produced from this coal was the ideal fuel for smelting iron ore, and coke ovens were sprouting throughout the region to fulfill the needs of steel producers.

The coke ovens piqued Frick's interest. Borrowing funds from relatives, he purchased a 123-acre tract of coke land in 1871. It was the start of what would become a frenetic spree of land acquisition.

Later that year, Frick went to Judge Thomas Mellon, a banker in Philadelphia and a shrewd judge of men and credit, and carefully explained the merits of his coke operation. Mellon liked what he heard and extended a $10,000 loan for the construction of 50 coke ovens.

One of Mellon's investigators subsequently confirmed Mellon's judgment: "Lands good, ovens well-built, manager on job all day, knows his business down to the ground."

The Panic of 1873, however, brought steel production to a standstill. Demand for coke died, prices plummeted, and coke producers folded. Frick, however, plunged forward, selling coke as low as 90 cents a ton. He not only had no intention of giving up, he felt the time was right to purchase more land. All he needed was money.

Mellon advanced Frick $100,000, and Frick gobbled up competitors during the three years of economic depression. When the steel market recovered in 1877, H.C. Frick & Co. owned 80 percent of the best coke for steel fabrication. Frick could now set his own price. Steel producers were stunned as prices soared to $5 a ton. They grumbled and succumbed; they had no choice.

By age 30, Frick was a millionaire. More than a thousand men were digging coal and baking it into gray lumps for the new coke king.

Andrew Carnegie was one of Frick's largest customers. Carnegie needed Frick's coke and groused, "The Frick Coke Company had not only the best coal and coke property, but ... in Mr. Frick himself a man with a positive genius for its management."

Although Frick was a cold and inflexible man, he had a warm spot in his soul for Adelaide Howard Childs, a woman he had met in 1881. They were married in December of that year. On their wedding trip to New York City, they were guests at a Carnegie luncheon, where Carnegie announced that H.C. Frick & Co. would become the sole supplier of coke for Carnegie Steel.

In August 1882, the Fricks purchased Clayton, an 11-room, Italiante-style home in Pittsburgh. Their son Childs was born there in March 1883. Three other children would follow, two girls and a boy, but only Childs and daughter Helen survived.

Carnegie acquired stock in Frick's company in 1883 but quickly discovered that Frick would not let anyone interfere with his operation. When Carnegie disapproved Frick's decision to increase capitalization by $1 million, Frick simply replied, "I do not like the tone of your letter," and went ahead with his plans.

Although Frick retained control over his coke company, Carnegie slowly brought him into the steel business. In 1889, Carnegie named Frick general manager of the combined companies.

After Frick increased profits of Carnegie Brothers from $2 million to $3.5 million in 1892, Carnegie named him president of the new Carnegie Steel Co. and gave him 11 percent of the company's stock.

Both men were anti-union. Carnegie had just acquired the Homestead mill in Pennsylvania. Prior to the acquisition, many of Homestead's employees had joined a union, forcing concessions from management, which Carnegie now sought to purge. He notified Frick that union members would not be employed at Homestead. Frick told the union he intended to cut wages.

The union announced that its membership would strike and prevent others from taking their place. Frick closed the plant, erected a fence around it, brought in Pinkerton's National Detective Agency with 300 armed guards, and refused to negotiate further.

Words escalated into a riot, followed by a pitched battle. When the smoke settled, 14 men lay dead, 163 seriously wounded. Homestead reopened, but without a single union employee.

Carnegie and Frick had won the battle, but not public opinion. Carnegie tried to distance himself from Homestead, letting Frick take a public beating. On July 23, as Frick sat in his office in Pittsburgh, a man entered, shot Frick twice and stabbed him as they grappled. Remarkably, Frick survived. The attempt on his life hardened the anti-union resolve of steelmakers and turned public opinion against the union.

But Carnegie Steel was not big enough for two giant egos. Cooperation turned to mistrust, and mistrust to hatred. Carnegie criticized Frick's handling of Homestead and started secret negotiations to acquire a former coke competitor of Frick, probably to reduce his dependency on Frick coke.

Frick resigned. The two giants traded accusations and engaged in litigation over the price Carnegie had to pay to Frick for coke. The bitter wrangling continued until March 1900, when Carnegie agreed to buy Frick's interest for $31 million.

Subsequently, Frick helped J.P. Morgan's syndicate acquire Carnegie Steel and turn it into U.S. Steel. Frick received a $61.4 million interest in the new enterprise. Although he remained involved in U.S. Steel's affairs, he turned his attention to another interest -- art.

At first Frick purchased mediocre paintings, but at the turn of the century, after getting advice from art dealer Joseph Duveen and English art critic Roger Fry, Frick began to improve his collection with works by Velasquez, Van Dyck, Hals, Vermeer, Holbein, Rubens and El Greco.

Frick died in 1919. He left his New York City mansion and The Frick Collection to the public with a $16 million endowment. His art also impelled others to do likewise, including his close friend Andrew Mellon, who gave us The National Gallery of Art in Washington, D.C.

© 2005 by Daniel Alef, award-winning author of "Pale Truth," an American historical novel. Mr. Alef can be reached at dalef@titansoffortune.com.