Eugene Gifford Grace is one of history’s foremost capitalists. As president and chairman of Bethlehem Steel during both World Wars, the depression, and America’s skyscraper boom era, he successfully shifted his company’s focus between armament and domestic expansion, profiting enormously as a result. “The Steel,” as it was called in Bethlehem, was the second largest steel producing and the largest shipbuilding company in the world.
During The Steel's heyday, Mr. Grace was nothing short of a Bethlehem institution. Grace wielded his influence over the entire Bethlehem community, the Lehigh Valley, and a large portion of the country’s steel producing industry.
Born in Cape May, New Jersey on August 27, 1876, Grace was the son of a sea captain. An 1899 electrical engineering graduate of Lehigh, he was one of the most accomplished students in the school’s early history. He was valedictorian of his class and at graduation delivered a speech titled “The Future of Electricity.” As captain of Lehigh’s baseball team both his junior and senior years, Grace played shortstop and batted over .400. Following graduation he married Marion Brown, the daughter of a South Bethlehem lumber supply company founder.
From Baseball to Bethlehem Steel
To his friends’ dismay, Grace turned down an offer for two-hundred dollars a month to play professional baseball with the Boston Braves. Instead, he took a job for forty-five dollars a month as a crane operator for Bethlehem Steel. Thus began his nearly sixty-year relationship with the company that would come to make his name. In three years he became superintendent of yards and transportation, and by 1908 he was given a general management position. When Chairman, Charles Schwab, offered him the presidency in 1911 Grace declined, but two years later, at the age of thirty-seven, accepted the offer. By 1929 Bethlehem Steel owned nine large steel plants and was expanding at an exponential rate. The McClintic-Marshall Company, which was owned by Bethlehem Steel and whose founders were also Lehigh graduates, supplied the steel for building the Golden Gate, George Washington, and Ben Franklin Bridges, the Chrysler Building, and the locks in the Panama Canal.
Supporting the U.S. during WWII
Grace, a golfing enthusiast who funded the construction of three country clubs in the Lehigh Valley, was golfing with his executives when informed of the breakout of World War II. The tycoon turned to his colleagues and famously quoted “Gentlemen, we are going to make a lot of money.” Over the next several years, Bethlehem Steel defined the country’s industrially-backed war effort, providing 70% of the airplane cylinder forgings, 25% of the warship armor plates, one-third of the big cannon forgings, and one-fifth of the shipbuilding material for the U.S. military. In 1940, the company was the Panama Canal’s second-best customer, paying over one million dollars in tolls with their twenty-six ship fleet. “The Steel” became known internationally as “The Arsenal of America,” and Grace was the leader behind it all.
At the end of WWII, Grace was appointed Chairman of the Board of Bethlehem Steel. He was receiving a salary of well over $1 million annually and had several executives with salaries among the highest in the country. He met great criticism for his unyielding opposition to organized labor and lavish corporate lifestyle, but was also hailed as a generous philanthropist. As chairman of Lehigh’s Board of Trustees from 1924-1957, the university doubled its enrollment, constructed thirteen new buildings, created a graduate school, and quadrupled its endowment. Grace provided the funding to build Grace Hall, which remains today an important space for athletic events on campus. At his death in 1960, Bethlehem Steel employed 100,000 people across the globe and was earning profits of $100 million annually. Mr. Grace’s grave at Nisky Hill cemetery in North Bethlehem, an impressive monument complete with a bench fit for twenty people, overlooks the old blast furnaces south of the Lehigh River.