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Inland Steel Company - Lehman Brothers Collection

Inland Steel Company

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The Inland Steel Company was founded during the financial panic of 1893. Economic depression had led to the failure of the Chicago Steel Works, which had specialized in reusing old railway rails to produce farm machinery. Ross Buckingham, brother of the former president of Chicago Steel, salvaged the production machinery after the building and property were sold to pay debts. This equipment sat in railroad boxcars for months as Buckingham searched for investors.

Buckingham fortunes began to improve when the city of Chicago Heights offered him six acres on which to build a new steelworks and $20,000 for construction costs. On October 30, 1893, a diverse group of businessmen joined together to buy the first stock offered by Inland Steel and incorporated the business. Initially, 1,300 shares were divided among the following eight investors: Joseph Block, Philip Block, William M. Adams, George H. Jones, Elias Colbert, Joseph E. Porter, John W. Thomas, and Frank Wells.

Mechanical problems in the factory and a stagnant market for steel products for agriculture made much of the first year of operation difficult. Company officers did not draw salaries due to the precarious financial position of the steel market. The company built a growing list of potential customers, but orders were delayed or canceled as the other companies struggled to remain solvent.

A combination of numerous boiler patches and good fortune allowed the old machinery salvaged by the new steel company to survive the first year of production. Purchases increased and most employees worked on a full-time basis. Stockholders received a dividend for 1894. Innovative research in the 1890s also found new product markets for Inland Steel to enter. Sales increased 75 percent in one year alone when a light steel web for bed frames was produced to replace cast iron frames.

During the first years of the twentieth century, Inland Steel opened a new open-hearth plant on the shore of Lake Michigan. The company purchased the Laura Iron Mine near Hibbing, Minnesota, in 1906 and created a vertical integration operation that made it one of the steel industry giants. By 1911 the need for its own lake fleet was seen as significant enough to form the Inland Steamship Company. The ability to ship iron ore from its own mine in its own freighters helped to reduce costs for the company.

In the 1920s Inland Steel developed a reputation for innovative cost-cutting techniques. Electrification of its plants was expensive, but by 1926 better steel came from the mills and they were safer places for the employees. Ingot production was soon above the production levels of World War I. As the Inland Steel empire grew, whole mining towns in Kentucky were electrified when Inland bought local coal mines. Improved living conditions for the miners was perceived as necessary to increasing productivity.

Inland Steel kept expanding operations through the Depression years of the 1930s. New mill structures worth $15 million were added in 1932. Subsidiary companies were purchased to help market Inland Steel products. Everything from roofing material to buckets was manufactured to be sold through the subsidiary businesses. Inland Steel weathered the Great Depression in sound financial condition.

During World War II, military contracts kept the mills operating and the Inland Steel fleet sailing on the Great Lakes. Armaments replaced agricultural implements, but profits remained high.

In the years after World War II sales continued to grow for Inland Steel, and by 1974 Inland Steel was the sixth-largest producer of raw steel in the United States. The company earned $67.2 million from sales of $2.45 billion in 1974, up from 1970 when earnings were $46.7 million and revenues were $1.1 million.

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