Charles M. Schwab
Charles M. Schwab was a prominent figure in the American steel industry, born on February 18, 1862, in Williamsburg, Pennsylvania. He began his career as a grocery clerk before transitioning to the steel business through mentorship from a customer who worked at Andrew Carnegie's steel mill. Schwab's ability to foster positive relationships with both labor and management allowed him to rise quickly in the ranks, eventually becoming a key player in the industry. He played a vital role in the establishment of Bethlehem Steel and later headed U.S. Steel after leading negotiations during Carnegie's retirement.
At the peak of his success, Schwab lived an extravagant lifestyle, including a lavish mansion in New York City. His contributions to the steel industry were significant, particularly in developing steel girders for skyscrapers and fulfilling government contracts during World War I. Despite amassing great wealth, Schwab faced financial challenges during the Great Depression, which affected his fortune. He was known for his philanthropy, supporting various educational and religious institutions. Schwab passed away on September 18, 1939, leaving a legacy as a leader in America's industrial growth.
Subject Terms
Charles M. Schwab
- Born: February 18, 1862
- Birthplace: Williamsburg, Pennsylvania
- Died: October 18, 1939
- Place of death: New York, New York
American steel magnate
Schwab’s rise to wealth and power in the steel industry was a testimony to the unlimited opportunities available during the Gilded Age to anyone with the right combination of luck, drive, and circumstance. Under his leadership, Bethlehem Steel became one of the largest steelmakers in the United States.
Sources of wealth: Steel; investments
Bequeathal of wealth: Dissipated
Early Life
Charles Michael Schwab (shwahb) was born on February 18, 1862, in Williamsburg, Pennsylvania, the first of five children born to John Schwab and Pauline Farabaugh Schwab. The family moved to Loretto, Pennsylvania, when John bought the town’s livery stable. Charles completed high school there, and that was the end of his formal education. Following his graduation, he went to the larger town of Braddock, where he worked as a grocery clerk. Braddock was also the location of Andrew Carnegie’s Edgar Thomson Steel Works. In 1883, Schwab married Emma Eurana Dinkey. The couple had no children.
First Ventures
One of Schwab’s grocery customers was Captain William R. Jones, a superintendent of one of Carnegie’s steel mills. Jones was impressed with Schwab’s unfailing good nature and his ability to get along with all types of people. Mentored by Jones, Schwab went to work at the steel mill. He worked as an engineer’s helper while learning the steel business.
Schwab was a quick study, and his rise in the company can be attributed in large part to a management style that enabled him to earn the support and respect of both labor and management. Before he was named manager, the mill’s workers had unionized and gone on strike; the manager who preceded Schwab broke the union. Schwab had a less contentious relationship with his employees, who remained loyal to him even though their wages were below the industry average.
Mature Wealth
Schwab’s increasing power in the steel industry was a result of the continued trust that Carnegie placed in him. As Carnegie became more critical of his top management team, Schwab emerged as the only person in the inner circle whom Carnegie continued to hold in high esteem. As a result, Schwab acquired more influence in the business, which in turn led to an increased salary. Schwab and his wife lived a life most could only imagine. At the height of his success he built a four-story mansion on the corner of Riverside Drive and Seventy-second Street in New York City that contained ninety bedrooms, a sixty-foot swimming pool, and a bowling alley.
When the time came for Carnegie’s retirement, Schwab was able to broker the deal between Carnegie and financier J. P. Morgan to liquidate Bethlehem Steel. Schwab agreed to head the new company, United States Steel Corporation. During his tenure at this company, Schwab oversaw the development of steel girders, a product in great demand for constructing skyscrapers. These beams, along with government contracts to produce needed products during World War I, ensured the success of U.S. Steel.
Schwab’s wealth was once thought to be more than $200 million, but some of his investments were unsuccessful, and the Great Depression further eroded his fortune. On September 18, 1939, he died of coronary thrombosis in New York City, less than a year after the death of his beloved wife Emma.
Legacy
Charles M. Schwab was one of the leaders of America’s emerging steel industry. Under his direction, Bethlehem Steel became a major world steel manufacturer. Before his money was dissipated in the Depression, he gave generously to charity. Among those benefiting from his largesse were the Catholic church in Braddock, Pennsylvania State College, St. Francis College, and various other schools, convents, and monasteries.
Bibliography
Hessen, Robert. Steel Titan: The Life of Charles M. Schwab. Pittsburgh, Pa.: University of Pittsburgh Press, 1990.
Standiford, Les. Meet You in Hell: Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership That Transformed America. New York: Crown, 2005.
Warren, Kenneth. Industrial Genius: The Working Life of Charles Michael Schwab. Pittsburgh, Pa.: University of Pittsburgh Press, 2007.