Tennessee Coal, Iron and Railroad (TCI)

The Tennessee Coal, Iron and Railroad company (TCI), founded in 1852 in Tennessee as the Sewanee Mining Company, became the most significant iron and steel company in Birmingham after entering the area through an 1886 merger. During the financial panic of 1907, TCI became the primary southern subsidiary of the United States Steel Corporation (U.S. Steel), eventually becoming a division of the company and ending its life as a separate entity in the 1950s. Throughout its existence, TCI played a dominant role in the economy of Birmingham and the surrounding area, owning vast acreage of land and coal and iron ore mines and producing iron, steel, tin, and various related products in its Fairfield Works.

After its founding in Tennessee, TCI went through several rounds of financial setbacks and recoveries before, during, and after the Civil War. While under the control of cotton broker John H. Inman and Nathaniel Baxter Jr., a banker whom Inman named president, the company turned its eye toward the burgeoning coal and iron industry in Birmingham. Another Tennessee entrepreneur, Enoch Ensley (who had been rebuffed in his attempt to join TCI in Nashville), purchased the Pratt Coal and Coke Company, to which he added the Alice Furnace Company and the Linn Iron Company. Alfred Shook, who had been connected with TCI, and Thomas T. Hillman, a Birmingham iron manufacturer, bought options on Ensley's holdings and subsequently sold these to TCI. In the largest merger seen to that time in the city, TCI entered the Birmingham district with the transfer of ownership on December 28, 1886. In addition to the Tennessee holdings, TCI now owned 76,000 acres of coal land, 460 coke ovens, two blast furnaces, and 13,000 acres of land that included the Red Mountain iron ore seam. The company moved its headquarters to Birmingham in 1895. Local industrialists hoped to develop steel plants as a local market for the existing pig-iron industry. That same year, TCI began producing basic pig iron for northern customers, who converted it to steel, and in 1898 began constructing an open-hearth furnace for manufacturing steel at TCI's Ensley plant. The furnace began operation on Thanksgiving Day, 1899, launching Birmingham as a true competitor in the national iron and steel industry.

During the 1890s and into the early twentieth century, TCI added the DeBardeleben Coal and Iron Company; the Cahaba Coal Mining Company; the Sheffield Coal, Iron and Steel Company; and the Bessemer Rolling Mill Company to its holdings, the latter purchase signaling its entrance into the field of manufacturing finished products in wrought iron and steel. The company continued to suffer from financial problems and frequent upper management changes, however. Maintenance of company properties suffered during the rapid expansion, and labor problems included a shortage of workers, strikes, and an extremely high turnover rate. Having first used leased convicts in Tennessee, TCI continued to do so in Alabama, supplementing its labor force and hoping to discourage strikes by free workers. Malaria, tuberculosis, polluted water supplies, and inadequate housing added to the instability of the work force. In 1906, however, a short-lived management change put the company on the path to renovating its facilities and improving conditions for workers.

Despite the significant purchase of 160,000 tons of TCI's open-hearth steel rails by railroad magnate Edward H. Harriman in 1907, TCI stock was further destabilized by the financial Panic of 1907. The brokerage firm of Moore and Schley held and was liable for a large quantity of TCI stock that had been used as collateral for loans now coming due, so the brokerage was in danger of failing. TCI approached U.S. Steel, founded in 1901 by powerful banker and financier John Pierpont "J. P." Morgan, about purchasing the TCI stock with U.S. Steel bonds, rather than cash. If the deal went through, the brokerage firm would be saved, U.S. Steel would gain control of a valuable southern property, and TCI would have access to needed funds.

After seeking assurances from Pres. Theodore Roosevelt that the purchase would not violate the Sherman Anti-Trust Act, company officials concluded the arrangements. Although the purchase was hailed as TCI's savior by local newspapers, historians and local interests continue to debate whether the takeover salvaged TCI and brought needed resources, or if it held back southern economic development by instituting pricing policies, such as "Pittsburgh Plus," that added surcharges to TCI products in an effort to ensure that they did not undercut output from existing northern mills.

Absentee ownership meant that technical developments, expansion plans, pricing, and labor policies would be reviewed and ultimately decided outside of Birmingham. U.S. Steel sent George Gordon Crawford, a Georgia native, to take over as TCI president. He found that the 1907 financial crisis had caused TCI to shut down most of its furnaces, halt expansion plans, and close most mining operations. Backed by U.S. Steel capital and guided by Crawford, TCI weathered the panic and entered a period of unprecedented stability and growth. During his 22-year tenure, Crawford initiated a major improvement or expansion project every year.

In addition to technical challenges, Crawford faced a serious labor crisis. TCI had not renewed the convict lease contract with the state at the end of 1911, so convicts no longer formed a part of the work force. By 1913, the TCI workforce consisted of more than 17,000 employees made up of black southerners (55 percent), native-born whites (37 percent), and immigrants (7 to 8 percent). Turnover was as high as 400 percent annually. Although Crawford followed U.S. Steel's anti-union policy, he also implemented U.S. Steel's program of welfare capitalism. Under this philosophy of labor management, he improved company housing, built planned communities, increased safety measures, and provided recreational activities for workers and their families to attract and retain workers. The company also financed school improvements, including constructing facilities and hiring teachers, to draw more stable, family-oriented workmen. Crawford hired Winifred Collins, a Chicago social worker, to head a social science department that would oversee much of the community-based work. Combined with an extensive health program under the supervision of Lloyd Noland, a physician who had gained experience in industrial accidents and tropical diseases on the staff of Gen. William Crawford Gorgas in the Canal Zone, and the state-of-the-art TCI Employees Hospital, these programs rapidly reduced worker turnover. Although welfare capitalism improved working and living conditions, the system also was criticized for its paternalism and underlying anti-union motivation and did not bring an end to strikes.

World War I began a decade of expansion at TCI. In 1917 construction began on the Fairfield Steel Works, which expanded throughout the 1920s. Additionally, the company established three companies—Chickasaw Shipbuilding and Car Company, Chickasaw Utilities Company, and Chickasaw Land Company—in Chickasaw, Mobile County, to take part in the war effort. (The facilities were later sold to the Waterman Steamship Company.) In 1925, TCI began building a special rail line to connect its Red Mountain ore mines with the steel plants at Ensley and Fairfield. In 1926, the Fairfield Sheet Mill was completed. A water-transportation department was established in 1926 to facilitate the shipment of products to Mobile. Although lacking a major river, Birmingham gained a "port"—Birmingport—when improvements to the Warrior-Tombigbee river system and a system of locks allowed for the economical water transport of products to the docks of Mobile. In 1929, the Ensley Land Company, originally established during the presidency of Enoch Ensley, transferred all its property to the Tennessee Land Company, a TCI subsidiary.

During the Great Depression, TCI and its employees suffered along with other Birmingham industries in the hard-hit city. By mid-1932, one-fourth of the city's 100,000 wage and salary earners were unemployed and 60,000 had only part-time work. Although TCI workers remained on the payroll, they received only a few days of work each month, and back rent and debts at the company commissaries mounted. Most of the TCI welfare and community programs were cut back or eliminated. The TCI industrial complex, however, expanded with the completion in 1938 of the Fairfield Tin Mill, which used steel from the TCI furnaces and rolling mills. Approximately 19,000 employees worked for TCI in 1938.

Among Pres. Franklin Roosevelt's New Deal programs, the National Industrial Recovery Act (1933) and the National Labor Relations Act (1935) in particular signaled significant changes for TCI workers. The legislation outlawed unfair practices against unions and guaranteed organized labor the right to bargain collectively. In 1937, U.S. Steel signed an agreement with the Steel Workers Organizing Committee. The United Mine Workers won exclusive bargaining rights for the company's coal miners in 1941. After a long period of tension and violence between the company and between competing unions, exclusive bargaining rights were given to the Union of Mine, Mill and Smelter Workers that same year; however, a 1949 election gave the United Steelworkers of America jurisdiction over the company's ore mines.

War in Europe and the U.S. preparation before World War II brought TCI plants back to full production by 1939. The Fairfield Steel Works expanded with new installations and a new blast furnace, and the Ensley plant added a shell-forging facility. Between 1938 and 1941, the TCI workforce increased by 7,000 to a total of approximately 30,000 employees. After the war, consumer demand kept production and employment high, but higher wages, improved transportation, unionization, and post-war suburbs ended the network of employee services established during the Crawford administration. After Lloyd Noland's death in 1949, the company turned the hospital (renamed the Lloyd Noland Hospital and demolished in 2009), other health facilities, and medical equipment over to the community. A foundation, independent of the company and comprised of business and professional men of western Jefferson County, administered the hospital, which now served not only the TCI employees but also the community at large. Post-war expansion to the industrial complex included additional open-hearth furnaces at the Fairfield Works, the opening of a new coal mine at Concord and improvements at older coal and ore mines, rehabilitation of the Fairfield Sheet Mill for producing cold-reduced sheets, and the introduction of high-grade Venezuelan ore to supplement the local low-grade ore. In the early 1950s, TCI employed more than 28,000 people.

The 1940s and 1950s also saw important corporate changes that marked the end of TCI as a separate corporate entity. In 1945, TCI relinquished its old Tennessee charter and was rechartered by the state of Alabama. U.S. Steel revised its corporate structure in January 1952, and TCI became merely a division of U.S. Steel Corporation. Although the name Tennessee Coal, Iron and Railroad Company no longer existed, the TCI designation continued to be used by many in the Birmingham community. In later years, the Birmingham facilities increasingly became known simply as U.S. Steel.

Additional Resources

Armes, Ethel. The Story of Coal and Iron in Alabama. 1910. Reprint, Birmingham: The Book-Keepers Press, 1972.

Atkins, Leah Rawls. The Valley and the Hills: An Illustrated History of Birmingham and Jefferson County. Woodland Hills, Calif.: Windsor Publications, 1981.

Flynt, Wayne. Mine, Mill & Microchip: A Chronicle of Alabama Enterprise. Northridge, Calif.: Windsor Publications, 1987.

Fuller, Justin. "History of the Tennessee Coal, Iron, and Railroad Company, 1852-1907." Ph.D. diss., University of North Carolina, 1967.

McKiven, Henry M. Jr. Iron & Steel: Class, Race, and Community in Birmingham, Alabama 1875-1920. Chapel Hill: University of North Carolina Press, 1995.

Mullins, Betty Hamaker. "The Steel Corporation's Purchase of the Tennessee Coal, Iron and Railroad Company in 1907." M.A. thesis, Samford University, 1970.

Rikard, Marlene Hunt. "An Experiment in Welfare Capitalism: The Health Care Services of the Tennessee Coal, Iron and Railroad Company." Ph.D. diss., University of Alabama, 1983.

———. "George Gordon Crawford: Man of the New South." Alabama Review 31 (July 1978): 163-81.