Gustavus Swift and the Refrigerator Car
Chicago's slaughterhouses were machines, however, but machines of a new type: machines made up almost entirely of human parts. Bourget was fascinated by the businessmen who built this, and other American mass production machines. To him, they were the real makers of America, capitalist conquistadors who had had tamed the continent and built new western cities, like Chicago, in one generation, "a feat," he said, "that would never again be repeated."
What Bourget found most arresting about these capitalists was their warlike combativeness. That and their taste for risk-taking. No two capitalists better embodied these traits than the Meat Kings of Chicago, Philip Armour and Gustavus Swift.
Armour and Swift arrived in Chicago in the same year, l875, and their careers as meat barons were closely linked. Like the "Steel King" Andrew Carnegie, a former bobbin boy and machine tender, they were self-made men. Armour had been as ditch-digger, Swift a country butcher. And their ascent was greatly attributable, like Carnegie's, to organizational ability.
Swift, the tightlipped son of a Massachusetts farmer, started life as a butcher's apprentice, and then shifted to cattle dealing, moving west with the geographically expanding business until he arrived in Chicago at the age of 36.
The city's meat business was then dominated by packers of pork, not beef. In the absence of refrigeration technology to preserve the product in transit, meat had to be preserved by salting or smoking. This was O.K. for pork, for Americans had developed a taste for bacon, and sausage, and smoked ham; but they preferred their beef fresh.
So most of the cattle arriving in Chicago weren't butchered there, as was pork. Steers were sold, and then shipped live and butchered locally in eastern cities. Swift made a lot of money shipping cattle east, but he had the foresight to see that the business he was prospering in was about to change. And he made himself an agent of that change.
It was all about supply and demand. Population in the growing cities of the East began to outstrip the local meat supply. At exactly the same time, there was a tremendous expansion of cattle production on the unfenced plains of the West. Thundering herds of Texas longhorns, a quarter of a million in a herd, were driven to new railroad towns like Abilene, Kansas.
The primary industry in Abilene had been raising prairie dogs before a Chicago livestock dealer named Joseph McCoy built cattle pens near the new rail depot there, a place on the map where old Spanish trading trails intersected with westward pushing railroads. From the holding pens of this brawling cow town, and other towns that grew up as fast as it did, places like Dodge City and Cheyenne, cattle were sent to Chicago and shipped from there to slaughterhouses everywhere. The animals, however, were badly beaten up in transit, lowering their price and edibility. And Swift, who had what his son called "an eye for waste", objected to paying freight on the inedible parts of the animals, which amounted to 60% of the weight.
The answer, of course, was to slaughter the steers in Chicago and send only the edible parts East. The trick was finding a way to keep the beef cool and well preserved along the way. Here is where technology and enterprise join hands.
Swift began shipping beef in winter, with the boxcar doors open. But that didn't work well. Then one his engineers developed a state of the art refrigerator car. This was an enormous technological breakthrough. It made Chicago the center of American beef butchering.
And the meat industry became the city's major industry. After he developed his refrigerator car, Swift, with Armour right behind him, built the most highly coordinated production and distribution network in the world. A side of beef leaving his Chicago plant was stored in a freezer in New York on the very same hook on which it was hung when it was killed in Chicago.
Swift created America's first vertically integrated company. This is a firm that reaches out to control the supply, production, and distribution of its products. In meatpacking, that meant controlling everything from the purchase of western steers to their delivery as steaks to the local butcher shop. Vertical integration was the hallmark of big industry that would come to dominate the American economy.
The Steel Industry
Andrew Carnegie was already a millionaire when he went into steel production two years after the Great Strike of l877. Visiting a British steel mill, he was so impressed by the awe-inspiring display of a Bessemer converter that he declared, "The day of iron has passed." And he decided then and there to be a steel man.
Carnegie's steel business, like Armour's meat business, had an imperial reach. Here Carnegie describes it in deceptively simple language. "Two pounds of iron-stone purchased on the shores of Lake Superior and transported to Pittsburgh. Two pounds of coal mined in Connellsville and manufactured into coke and brought to Pittsburgh. One-half pound of limestone mined east of the Alleghenies and brought to Pittsburgh. A little manganese ore mined in Virginia and brought to Pittsburgh. And these four and one half pounds of material manufactured into one pound of solid steel and sold for one cent. That's all that need be said about the steel business," said Carnegie.
By l900, Carnegie's enormous Pittsburgh mills were producing more steel than the entire output of Great Britain, formerly the world's greatest steel-making power. Steel was the wonder material of the age: steel for rails, steam engines, trolley cars, steel for bridges, factories, and later, automobiles. And steel frames for the new symbol of corporate America: the urban skyscraper. Steel would become an even bigger industry than meatpacking; but both industries were based on efficiency and cost cutting, high volume and full production, and men working fast, fast, fast, for the mills had to run flat out all the time.