James A. Farrell

James Augustine Farrell (1863-1943) was President of US Steel from 1911 to 1932. A major business figure of his era, Farrell expanded US Steel by a factor of five during his Presidency, turning it into America's first billion-dollar company. Farrell was also a champion and early pioneer of export markets, who massively expanded US steel exports to the world with the help of the shipping subsidiary he founded, the Isthmian Steamship Company.

Early career

Farrell was born in New Haven, Connecticut in 1863. A classic example of the self-made man, Farrell rose from humble beginnings as a salesman with US Steel and Wire - US Steel's export division - to become the firm's manager by 1899. Under his leadership. US Steel and Wire massively expanded its exports to foreign markets from 200,000 tons per year to 1.5 million tons by 1903. [ [http://www.time.com/time/magazine/article/0,9171,736761,00.html Foreign Traders] , "Time" magazine, June 6 1927.]

The son of a ship's captain who was lost at sea, Farrell never lost his interest in maritime affairs and in 1910 established the Isthmian Steamship Company, a subsidiary of US Steel. Farrell believed that if US Steel exported using its own ships instead of leasing cargo space from other shipping companies, it could achieve substantial savings. His assessment proved correct and Isthmian became a highly lucrative subsidiary of the parent firm.

President of US Steel

Cognizant of his obvious talents, the board of US Steel appointed Farrell President of the company in 1911, a position he would be destined to hold for another 22 years until his retirement at the age of 70 in 1932. During his time at the helm, Farrell presided over a fivefold expansion of US Steel, turning it into America's first billion dollar company and the US steel industry's number one player by the mid-1920s. The scale of his achievement can be measured by the fact that in the 74 years since his retirement, US Steel has not significantly increased its share of the US steel industry.

Globalization prophet

Farrell was a pioneer of export markets and believed passionately in the importance of foreign trade. He was particularly keen on increasing trade with Asia. In a 1932 speech, Farrell said:

...there flow already vast currents of international trade, to the Antipodes, the Orient and the Indies . . . This demand is now temporarily suspended by causes beyond the power of the producer and consumer—causes in the most part political. Commerce is not so much suffering from over-production as it is from under-consumption.

With world trade free of unnecessary restrictions, these potential markets are open to the industrial nations of the world, and the possible rise in living standards and the resulting power of consumption is sufficient to blot out the present anomaly of one-half of the world suffering from a surplus of goods while the other half is subject to extreme deprivation. This is indeed a heavy price to pay for nationalistic desire for self-containment.

If and when the natural westward flow of civilization and increased living standards is resumed, our industrial advance will be resumed and our prosperity will return...West of you lies the Orient with the teeming millions of hard-working thrifty people, the great majority of whom, unfortunately are still existing on a standard of life materially below that of some of their neighbors. It is apt to be forgotten...when viewing the current cessation of trade, that the Pacific area is perhaps the most rapidly developing market in the world. Even during the decline of the past two years the interchange of goods between the countries bordering on the Pacific has continued to increase in volume, even though declining in value. All other trade areas have declined in both volume and value.

It is significant to note that this growth of trade was not accompanied by a corresponding increase in population. It was, however, accompanied by a striking development in communication and transportation, the constant companions of commercial progress. [ [http://www.vancouverhistory.ca/biz_1932.htm Farrell speech] , History of Metropolitan Vancouver website.]

Other activities

Farrell was the inaugural chairman of the National Foreign Trade Council, an institution he helped to set up and which he would continue to chair for many years. He also tried to promote interest in foreign trade by supporting institutions such as the School of Foreign Service. [ [http://query.nytimes.com/gst/abstract.html?res=980DE0D7133DE533A25751C2A96E9C946896D6CF James A. Farrell Announces Plans for Establisment of School of Foreign Service] , "New York Times", August 22 1919.] Farrell opposed trade unionism and refused to negotiate with unions in the 1919 steel industry strike. [ [http://books.google.com/books?id=zYWwAzFh9dwC&pg=PA88&lpg=PA88&dq=%22james+a+farrell%22+%22us+steel%22&source=web&ots=k06m3-_kGf&sig=LZkFJ4Sh8kuKN46B_mi8fCrhuco Extract from "A Catholic Cold War: Edmund A. Walsh, S.J., and the Politics of American Anticommunism] .]

Farrell, Pennsylvania is named after him.

Footnotes

References

* [http://www.hbs.edu/leadership/database/leaders/264/ James A. Farrell] , Great American Business Leaders website.
* [http://www.time.com/time/magazine/article/0,9171,736761,00.html Foreign Traders] , "Time" magazine article, June 6 1927.
* [http://www.vancouverhistory.ca/biz_1932.htm Farrell speech] , History of Metropolitan Vancouver website.