Part IThe Story
Sometime in the summer of 1925, on a train of the New York, New Haven & Hartford Railroad, the president of the largest industrial corporation in the world walked past the club car and sat down in the day coach beside a stranger. He chose the stranger. That part matters. According to an unsigned paragraph in the September 5 issue of The New Yorker, James A. Farrell made a habit of it "on odd occasions through the Summer," always selecting "some more lowly-placed mortal," and before the train had swerved across the Harlem River Bridge, the companion would be "delivering himself of his views about matters of daily concern." The magazine does not say what those matters were, or where Farrell boarded, or whether any of his seatmates ever learned who had been asking the questions. It treated the whole thing as a society curiosity, a rich man's eccentricity worth a hundred and fifty words, and then it moved on.
The railroad was named, in part, for the city where Farrell was born. He was sixty-two that summer. He had run United States Steel for fourteen years, and he would run it for seven more.
Four months later, on December 10, 1925, a shipping manager named John M. Franklin, acting for the Farrell family and a handful of partners, placed the winning bid at a government auction: $784,019.50, fifty cents included, for five surplus steamers and a monthly route from New York to Cape Town. The line would be incorporated in Albany on New Year's Eve. Its first president was Farrell's younger son, twenty-four years old and eighteen months out of Yale.
Two gestures from the same year, pointed in opposite directions. In one, the most powerful steel man in America leans inward, toward a stranger's opinions on a commuter bench, listening. In the other, his family sends iron hulls outward, toward the far tip of Africa, on a route that would lose money for years and require a federal mail subsidy to survive. Farrell spent his life somewhere between the two: a man who wanted to hear what the country was saying and who was certain, nonetheless, that the country's future lay across the water. The sea had taken his father. He kept sending things back to it.
By the Numbers
The Farrell Ledger
1.5MTons of annual steel exports under his management by 1903, up from 200,000
1910Year he founded the Isthmian Steamship Company inside U.S. Steel
1911–1932Tenure as president of U.S. Steel
5xGrowth of U.S. Steel credited to his presidency
$784,019.50Winning bid for the American South African Line, December 10, 1925
44Ships in the Farrell Lines fleet at its 1978 peak
1,500Mourners at his funeral mass, St. Ignatius Loyola, March 30, 1943
What the Sea Took First
He was born in New Haven, Connecticut, on February 15, 1863, in the middle of a war, to John Guy Farrell and Catherine Whalen. The father owned ships and captained them. Some time before James turned sixteen, John Guy Farrell went to sea and did not come back. The record does not name the vessel, or the waters, or the year with any precision; it says only that he was "lost at sea," which is the phrase families use when there is no body and therefore no funeral of the ordinary kind, only an absence that hardens slowly into fact.
The boy went to work. The New York Times, writing his obituary eighty years later, put it in the headline: "Laborer at 15." The Associated Press, running the story in small-town papers like the Hutchinson News-Herald in Kansas, reached for the most American of templates — "Alger-Like Career Ends" — and then, in the same headline, misspelled his name. J. A. Farell, Ex-Steel Tycoon, Is Dead. One r. A man who had presided over the shipment of more steel than anyone alive, who had sat on boards and chaired councils and corresponded with a president, went to his grave in Kansas a letter short.
It is tempting to fill in the boyhood. The rope walks of New Haven harbor, the wire mills, the mother counting coins. But the sources do not furnish it, and the honest thing is to say so: what survives of James Farrell's youth is a dead father, a job at fifteen, and the conviction of every obituary writer that this was the story. Horatio Alger was still writing when Farrell went to work. His heroes rose by pluck and luck and the patronage of kindly merchants, and they rarely had much to say about the sea.
Farrell would. Nearly everything distinctive about his career — the export obsession, the shipping subsidiary, the foreign trade council, the African line his sons would run — bends toward water. The encyclopedias, typically cautious, permit themselves a single speculation on this point: "Perhaps because he was the son of a ship captain, Farrell never lost his interest in maritime affairs." Perhaps. It is the only sentence in his official biography that admits to not knowing something, and it is the one sentence that sounds most obviously true.
In 1889, at twenty-six, he married Catherine McDermott of Brooklyn. His mother had been a Catherine; so was his wife. They had five children who survived into the record: John, James Jr., and three daughters known to history, as daughters of that era usually were, by their husbands' names — Mrs. Joseph P. Murray, Mrs. Luke D. Stapelton, Mrs. Richard J. Buck. Two of the sons would become shipping men. One of the sons-in-law, or someone sharing his name, would turn up years later on the incorporation papers of the family line. The Farrells kept their business close.
Two Hundred Thousand Tons
He rose as a salesman. This is the fact the obituaries treat as a stepping stone and that ought, instead, to be treated as the key. Farrell was not a metallurgist like the Carnegie men, not a lawyer like Elbert Gary, not a financier in the Morgan mold. He sold wire. He sold it well enough to become manager of the business by 1899 — a wire concern the encyclopedia files as "US Steel and Wire (US Steel's export division)," though in 1899 there was not yet a U.S. Steel to file it under. The record of James Farrell is full of small slippages like this, dates and names that have shifted a few degrees off true, and one learns to read through them.
What the record does hold firm is a number. Under Farrell's management, according to a 1927 Time magazine piece titled "Foreign Traders," the operation's exports climbed from 200,000 tons a year to 1.5 million tons by 1903. A sevenfold increase in roughly four years, achieved not by building a better furnace but by finding buyers on other continents.
To understand why this was strange, it helps to know what American iron had been. In 1718, a British-financed furnace near Perryville, Maryland, began shipping pig iron back across the Atlantic, and within a generation the Chesapeake colonies were exporting nearly 3,000 tons a year to a mother country whose forests had been burned down for charcoal. Parliament liked the cheap raw metal and disliked the competition, and in the Iron Act of 1750 it split the difference: colonial pig iron could enter Britain duty-free, but the colonies were forbidden to make steel. The arrangement was the classic colonial bargain. America would dig; Britain would finish.
A century and a half later, the bargain had inverted. Henry Bessemer's process, invented in England in 1856, had cut the cost of steel by more than half; the first American Bessemer mill opened in Troy, New York, in 1865, and a decade later Andrew Carnegie's Edgar Thomson Works near Pittsburgh became the largest steel mill yet built. By the 1890s the United States was producing more steel than it knew what to do with — rails mostly, then wire, then the structural shapes that would let cities grow upward. The domestic market was enormous. It was also, to most American steelmakers, the only market worth thinking about.
Farrell thought otherwise. The 1.5 million tons were finished goods — American wire going to places that had once sent America their manufactures. Whatever he understood about foreign buyers, he understood it before most of his peers, and he understood it as a seller, from the customer backward. A salesman's knowledge is a particular kind: not how a thing is made, but who needs it, at what price, delivered where, and on whose ship. That last question would come to dominate his life.
The Corporation
On March 2, 1901, J. P. Morgan finished assembling the largest company the world had ever seen. He bought out Andrew Carnegie, merged Carnegie Steel with Federal Steel and National Steel, and paid $492 million for the privilege. Carnegie, a Scottish bobbin boy who had become the richest man on earth and who believed that "good wages and good workmen I know to be cheap labor," insisted on being paid in gold bonds. He did not trust paper. The new United States Steel Corporation was capitalized at $1.4 billion — making it, as every history notes, the first billion-dollar corporation — though the federal Bureau of Corporations would later look at the same assets and value them at about $700 million. Half the billion was, depending on one's politics, either goodwill or water.
The company set up headquarters in the Empire Building in lower Manhattan, where it would remain one of the largest tenants for seventy-five years. In 1902, its first full year, it made 67 percent of all the steel produced in the United States. Wall Street called it simply "The Corporation," the definite article doing the work of a title.
Its first president was Charles M. Schwab, the Carnegie executive who had pitched the merger to Morgan over dinner — a born promoter, a man who could sell a vision as easily as a rail. Schwab did not stay. He went to Bethlehem Steel, which he built into the Corporation's principal rival, and Bethlehem proved quicker to innovate. The power at U.S. Steel settled instead around Elbert H. Gary, a former Illinois county judge — "Judge" Gary to everyone — who became chairman and gave his name to a city. In 1906 the Corporation built Gary, Indiana, from the sand dunes up, around what would become the largest integrated steel mill in the Northern Hemisphere. In March 1908, after meetings with the safety managers of the operating companies, Gary formed the Committee on Safety that launched the modern "Safety First" movement, a reform intended in roughly equal measure to protect workers and to protect the company from lawsuits.
These were the men around the table: a Scottish immigrant who wanted gold, a promoter who left, a judge who stayed. The Corporation they built was famous "more for its size than its efficiency or innovation." It was saddled with founding debt and haunted by antitrust; it operated, in the words of one history, cautiously. And caution has a cost. By 1911, the Corporation's share of American steel had fallen from 67 percent to 50.
That was the year the board made James Farrell president.
It was also the year the federal government broke up Standard Oil, and the same year the government turned its antitrust guns on U.S. Steel. Two years later, in 1913, when the case came before the federal district court in New Jersey, the Corporation's lawyers called their first witness for the defense. It was Farrell. His testimony was printed in full that year by the American Metal Market Company — a trade press bound volume, the sort of thing that ends up digitized on HathiTrust a century later, its pages filed under "Price regulation — United States — Cases." The government lost. The Corporation survived intact.
There is something telling in the choice of the first witness. Not the chairman, not the financier, but the salesman who knew where the steel went — who could speak, presumably, to the number of buyers and the competitiveness of prices and the foreign markets where U.S. Steel was not a monopoly but a contender, one of many. The record of what he said is out there, in the HathiTrust page images. What it established is visible in the outcome: the Corporation remained whole for the rest of its American life.
The encyclopedia credits Farrell with expanding U.S. Steel "by a factor of five" and with making it "the US steel industry's number one player by the mid-1920s." For a company that had begun with two-thirds of the market, that second claim is a claim about recovery rather than conquest — about stopping the leak Schwab and caution had opened. It also says that since Farrell's retirement, "US Steel has not significantly increased its share of the US steel industry." That sentence has carried a citation needed tag since April 2021. Nobody has supplied one. Nobody, apparently, has disputed it either.
Owning the Hull
The idea that made Farrell's reputation came a year before the presidency. In 1910, he established the Isthmian Steamship Company as a subsidiary of U.S. Steel. The logic was a salesman's logic, the logic of someone who had spent a decade watching freight charges eat the margin on export orders: if the Corporation shipped its steel in its own hulls instead of leasing cargo space from other companies, it would save money. A great deal of money. The encyclopedia's verdict is unusually unqualified for a source that hedges almost everything else: "His assessment proved correct and Isthmian became a highly lucrative subsidiary of the parent firm."
The name was a forecast. Isthmian — of the isthmus. In 1910 the Panama Canal was four years from opening, and anyone who could read a map knew what it would do to the geography of trade: the steel of Pittsburgh and Gary, loaded at Atlantic ports, would no longer have to round Cape Horn to reach the Pacific. Farrell named his fleet after the shortcut before the shortcut existed.
The Corporation already knew something about owning ships. Its Pittsburgh Steamship Company operated the largest commercial fleet on the Great Lakes, hauling Lake Superior ore down to the southern ports where coal was close. On September 28, 1912, a year into Farrell's presidency, the American Ship Building Company at Lorain, Ohio, launched Hull 397 for that fleet: a steel bulk freighter 600 feet overall, 58 feet in the beam, coal-fired boilers, a triple-expansion engine rated at 1,880 indicated horsepower. She was enrolled at Cleveland on March 12, 1913, took Duluth as her home port, and entered service that year, the same year her namesake sat in a New Jersey courtroom as the Corporation's first witness. Her name, painted on the bow, was James A. Farrell.
She would run the lakes for sixty-five years. Hold that number.
What Isthmian proved, and what the Lakes fleet had already suggested, was that the bottleneck in the export business was not the mill but the water. Steel is heavy. Its value per ton is modest. Freight, on a long voyage, could swamp the price advantage of an efficient furnace. Whoever controlled the hull controlled the margin, and whoever controlled the margin could sell in Buenos Aires or Yokohama at prices the competition could not match. Farrell had found the cost that everyone else accepted as fixed, and he had made it his.
Then, it seems, he kept going. By 1928, according to the histories of the family's later enterprise, the president of U.S. Steel was involved in several shipping ventures outside the Corporation — the Argonaut Line, the Robin Line, the American South African Line — three of the more consequential American operators of the day. The arrangement raises questions the sources do not answer: how a man running the world's largest industrial corporation also kept a hand in independent steamship lines, whether the Corporation's freight ever moved in family hulls, what the board thought. The record is silent. It notes only that Robin Line ships, in their early years, "operated in the intercoastal trade as auxiliaries to various Farrell concerns; mainly the Isthmian Steamship Company." The Corporation's shipping arm and the family's shipping interests were, at the least, neighbors.
The Man in the Day Coach Would Not Meet the Union
Here is the cleft in the story, and there is no honest way to write around it.
The man who sought out strangers on the New Haven line, who wanted their views on "matters of daily concern," refused to sit down with the men who made his steel. In 1919, when the American Federation of Labor's organizing drive, led by William Z. Foster, brought the steel industry to a halt, Farrell would not negotiate. The Corporation defeated the strike.
It was keeping faith with a lineage. Carnegie's Homestead works had broken the Amalgamated Association of Iron and Steel Workers in the violent strike of 1892; the Corporation, in the year of its birth, defeated another strike in 1901. During the First World War, under pressure from the Wilson administration, U.S. Steel had relaxed enough to let unions operate in some plants. When the war ended, the relaxation ended with it. Foster's drive ran into the old policy restored, and the policy held. The definitive account is David Brody's Labor in Crisis: The Steel Strike of 1919, published in 1965; the scholarly footnote for Farrell's personal refusal comes, oddly, from a book about a Jesuit — A Catholic Cold War: Edmund A. Walsh, S.J., and the Politics of American Anticommunism. The strike leader would go on to lead the American Communist Party. It is not hard to see how a steel president's refusal to negotiate ended up in a history of Catholic anticommunism.
Winning did not settle anything. "Heavy pressure from public opinion," the Corporation's history records, forced it to give up the twelve-hour day and adopt the eight-hour standard — a concession extracted not by the union Farrell had beaten but by a public that had, apparently, been paying attention. Through the 1920s the Corporation did what many large employers did: it paired paternalistic practices with "employee representation plans," company unions sponsored by management, designed to give workers a voice without giving them leverage. The plans backfired slowly. They taught steelworkers to organize, and they became, in the end, "an important factor leading to the organization of the United Steelworkers of America." In 1937, five years after Farrell stepped down, his successor's chairman, Myron Taylor, recognized the Steel Workers Organizing Committee without a fight. The hard line Farrell had held in 1919 was abandoned by men who had worked under him.
There is a darker ledger, and it sits in the South. In 1907 the Corporation had bought its largest competitor, the Tennessee Coal, Iron and Railroad Company of Birmingham, Alabama. Douglas Blackmon, in a 2008 book, argued that U.S. Steel's growth in the South rested partly on cheap Black labor and on convicts — that the company held agreements with more than twenty Alabama counties to lease prisoners, paying the locals nine dollars a month per man, sending them into mines where some died of abuse and malnutrition. The convict-leasing system, Blackmon found, persisted into the late 1920s. Which is to say: across most of James Farrell's presidency. The sources do not record what Farrell knew of it or thought of it. They record only that it happened inside the corporation he ran.
So the paradox stands, unresolved, because the record does not resolve it. A man who listened to clerks and laborers on a commuter train. A man who would not listen to them across a bargaining table. The New Yorker thought the day-coach habit let him keep "more accurate fingers on the common pulse." Perhaps it did. A finger on the pulse is not the same thing as a hand extended, and the distinction, in 1919, was the whole argument.
A Town Renamed in 1912
Sixty miles north of Pittsburgh, on the eastern slope of the Shenango River, a mile south of Sharon, a steel town had erupted out of farmland and swamp at the turn of the century. Frank H. Buhl had launched Sharon Steel in 1900. In 1901 — the year Morgan built the Corporation — the settlement around the mill incorporated as the borough of South Sharon. Its neighbors watched, the town's own chroniclers recalled, "for the decline and sudden death of the little 'boom town,'" because it had been "denied the luxury of a slow and methodical growth — settler by settler, cabin by cabin."
In 1912, a year into Farrell's presidency, South Sharon took his name. It became Farrell, Pennsylvania.
The town's history, written for the 1951 Golden Jubilee issue of the Farrell High School Reflector by Elizabeth Heinze Broderick and Betty Rose Broderick Gibbs, is a document of a particular American faith — the faith of the mill town in itself. They called it the "Magic City." It was "wrought of steel," it had "erupted with the roar of the blast furnaces under reddened, smoke-filled skies," and its population had arrived from everywhere at once: "The Tongues of over a hundred nations have been fused into a speaking voice of democracy." The skeptics, the authors wrote, "underestimated the strength of steel and of the men who make it."
The table of contents moves through the century like a ledger of the steel world's moods. World War I. Strike of 1919. 1926 — Farrell celebrates its Silver Jubilee. 1929 — Stock Market Crash and the Depression. Then: 1932 — The Borough of Farrell incorporates as a city. The town became a city in the same year the man it was named for retired.
It is worth sitting with the strangeness of this. The Corporation had built Gary, Indiana, and named it for its chairman. A neighboring steel community renamed itself for the Corporation's president. Two American places, a few hundred miles apart, called after two men who spent the 1910s and 1920s in the same Manhattan offices — the judge and the salesman. Gary was built from nothing by fiat. Farrell was an existing town, already a decade old, that chose to put on a new name, the way a son of immigrants might. The Reflector does not explain why the borough chose him. It does not need to. In 1912, if you were a town made of steel and a hundred languages, the name of the man who sold American steel to the world was a reasonable thing to want.
And there, between World War I and the Silver Jubilee, sits a chapter called Strike of 1919. The town named for Farrell lived through the strike Farrell refused to negotiate. Its children, thirty-two years later, wrote about the dignity of honest labor in a jubilee booklet bearing his name.
The Dean of Foreign Trade
The Times obituary, in its cascade of subheads, gave him a title that no board had ever conferred: "Dean of 'Foreign Trade.'" The quotation marks are the newspaper's, as though the phrase itself were still slightly exotic in 1943, a term of art that needed handling.
Farrell had spent decades making it less exotic. He was the inaugural chairman of the National Foreign Trade Council, an organization he helped found and continued to chair for many years — a lobby, a convening body, a pulpit. In 1915, with Europe at war and its merchant fleets pulled into service, he delivered an address in Philadelphia on "Central and South American trade as affected by the European war," the kind of title that is all opportunity and no apology: the old suppliers were busy killing each other, and the markets they had served were open. On May 4, 1923, as chairman of the Council, he addressed the tenth National Foreign Trade Convention in New Orleans on "The shipping situation of the world." It was printed as a pamphlet. Its subject headings, in the library catalog, read simply Merchant marine — United States.
On August 22, 1919, the New York Times ran a headline announcing that Farrell had plans for the establishment of a School of Foreign Service. The timing is almost unbearably neat. That same year, the steel strike. In the same season that the president of U.S. Steel was refusing to sit across the table from his own workers, he was announcing plans for an institution to train Americans to sit across tables from foreigners. The two positions are not, on their own terms, contradictory. Farrell seems to have believed that American prosperity depended on the world outside, and that the arrangement inside the mill was not a matter for negotiation. But it is hard to read the two stories together without feeling the strain of the seam.
His standing lasted well past his presidency. On November 1, 1934, Franklin Roosevelt wrote to "James A. Farrell, Chairman, National Foreign Trade Council" — the letter survives in the published volumes of Franklin D. Roosevelt and Foreign Affairs. On April 28, 1939, George S. Messersmith, writing from the State Department in Washington, sent Farrell a confidential five-page letter about a plan, already approved by the President, to fold the foreign services of the Agriculture and Commerce Departments into the State Department. The archivist's summary of the letter, held in Messersmith's papers at the University of Delaware, begins with Messersmith's premise: Few people more familiar than Farrell with foreign trade problems. The letter asked him to keep the matter quiet until it went to Congress, and then, when it became public, to use his influence to curb adverse criticism. Seven years into retirement, Farrell was still a man the government wanted on its side before it acted.
His words traveled, too, sometimes in curious directions. A copy of the speech he delivered to the American Iron and Steel Institute convention on May 22, 1931, ended up in the archive of Plutarco Elías Calles, the strongman of postrevolutionary Mexico, catalogued in Spanish as the text of an address by "James A. Farrell, Jefe Ejecutivo de United Steel Corporation." Not United States Steel. United Steel. The nation dropped out of the name somewhere between Manhattan and Mexico City, which is, in its way, a fair summary of what Farrell had spent his life arguing: that American steel did not belong only to America.
The fullest statement of that argument that survives in his own words comes from a speech in Vancouver in 1932, the year he retired, in the third winter of the Depression. World trade had collapsed. Tariff walls were going up everywhere. Farrell stood at the western edge of the continent and pointed further west.
— James A. Farrell, speech in Vancouver, 1932It 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.
The analytical move in that speech is subtler than its rhetoric. Farrell noted that trade among the Pacific countries had "continued to increase in volume, even though declining in value" — that is, the ships were still full even as the prices collapsed. Every other trade area, he said, had declined in both. A Depression-era observer looking at dollar figures saw ruin; Farrell, a salesman who had spent his life counting tons, looked at tonnage and saw a market that was still growing underneath the deflation. And he attributed the growth not to population but to "a striking development in communication and transportation, the constant companions of commercial progress."
Transportation. The hull, again. The son of a lost captain, at sixty-nine, still talking about ships.
The Times obituary would record one more conviction, in a subhead that reads almost like a telegram from a different century: "Urged Economic Front With Britain to Insure Peace." Farrell died in March 1943, with the United States and Britain fighting the war his economic front had not prevented. He did not live to see how his Pacific prophecy would play out. That would take another eighty years.
The Sons' Line
The route was the government's idea first. In 1922, the United States Shipping Board — the federal agency left holding an enormous wartime merchant fleet — established a service between American Atlantic ports and South and East Africa, meant to give American exporters a direct path to markets that British lines had long treated as a private preserve. The Shipping Board's Emergency Fleet Corporation had kept building ships even after the armistice of November 11, 1918; by 1922 it had produced 2,312 vessels, making the American merchant marine, briefly, one of the largest and most modern in the world. The Merchant Marine Act of 1920 directed the Board to sell those ships to private operators. The African route began with monthly sailings from New York to Cape Town, five surplus government steamers, and a managing agent, C. D. Mallory, Inc. In October 1924 the service got a trade name — the American South African Line — and a new manager, A. H. Bull & Co.
In November 1925 the Board put the line up for public auction. Franklin's bid of $784,019.50 won it on December 10. On December 22 the Board authorized the sale to a company that did not yet exist, on condition that it guarantee service between American Atlantic and Gulf ports and South Africa. On December 31, in Albany, the American South African Line, Inc. was incorporated.
The founding documents read like a seating chart for Farrell's world. The incorporating officers came from the law firm of Baldwin, Barns & Stapleton, among them a Luke D. Stapleton Jr. — a name that rhymes, give or take a vowel, with one of the Farrell daughters' married names. The founding stockholders included John J. Farrell, president of the Argonaut Steamship Line; James A. Farrell Jr., "a recent Yale graduate"; Arthur R. Lewis Sr., president of the American and Cuban Steamship Line and the Seas Shipping Company; John M. Franklin, Argonaut's general manager; Leigh C. Palmer, the former president of the Emergency Fleet Corporation that had built the government's ships in the first place; Lynn H. Korndorff, president of the Federal Shipbuilding and Drydock Company; and Eugene P. Thomas, president of the National Foreign Trade Council.
That last name deserves a pause. The council Farrell had founded and chaired supplied, through its president, a founding stockholder of his sons' line. Nobody in 1925 seems to have found this remarkable. It was simply how the network worked: the institution the father built produced the people who backed the venture the sons ran.
James Jr., the largest stockholder, became the first president. He had been born in Brooklyn on January 13, 1901 — the same winter Morgan was assembling the Corporation — and graduated from Yale in 1924. His older brother John, born in 1890, already ran Argonaut. Between them they would spend the next half century turning a money-losing government route into one of the largest private shipping companies in the country. It lost money from the start. The British lines on the route were owned by wealthy parents operating many services; the American line had only this one, and it ran "at a substantial annual deficit." On May 21, 1926, the Shipping Board recommended a mail contract to keep it afloat; on June 7 the Postmaster General signed: $5,000 for each outgoing voyage, twelve voyages a year, roughly four weeks apart. The subsidy was the business model. The flag was the asset.
By 1930 the sailing schedule ran New York to Cape Town, Algoa Bay, East London, Port Natal, Lourenço Marques, Beira — the old Portuguese and British names of a colonial coastline, recited in an American timetable. A passenger motorship called the City of New York, built by Sun Ship at Chester, Pennsylvania, carried about sixty passengers south. On September 1, 1937, her farewell dinner offered Filet Seventy Fours Andaluse, Parisienne Potatoes, Frogs Legs Princesse, and Plum Pudding with Hard and Fruit Sauce. Plum pudding, on a ship bound for the African tropics. The menu survives; the passenger list for that sailing, if it was kept, is somewhere else.
And there was a feud. The Lewis family and the Farrells had been close — Arthur Lewis Sr. had founded the Robin Line in 1920 "in concert with the Farrell family," and held a piece of the African line. Then something happened, and nobody wrote down what. The rift was "immediate and irreconcilable," in the words of one maritime historian, its causes "not public and perhaps secreted away in the exclusive India House," the downtown Manhattan club where shipping men ate lunch and kept their counsel. In 1933 the families divided everything. The Farrells took the American South African Line and Argonaut; the Lewises took Seas Shipping and Robin. Lewis Sr. died soon after. His son, Arthur Jr., took up the quarrel "with gusto."
The instrument of revenge was a fired employee. Sylvester J. Maddock had worked for the Farrells and been let go. He knew the African ports and the African shippers, and in 1935 he persuaded young Lewis to bring the Robin Line into the trade as a direct competitor, with Maddock as general agent, building Robin's cargo volumes at the American South African Line's expense. What followed was described as "one of the most vicious and vindictive rate wars in United States maritime history." It ran until 1937, when Maritime Commission subsidies temporarily eased it.
The pattern rhymes with the father's world: Schwab leaving the Corporation to build Bethlehem, a partner turned rival, an insider's knowledge turned into a competitor's weapon. Maddock is the Farrell story's Schwab in miniature.
Arthur Lewis Jr. died in March 1954, of a heart attack, in Fort Lauderdale, on his first vacation in years. The Wilton Bulletin, the weekly paper in his Connecticut town, gave the news on page two of its March 17 edition, beside a long column about a Republican Sunday tea. The headline was three words long: Arthur Lewis Dies.
In 1940 the brothers merged Argonaut into the African line, John as chairman, James Jr. as president. James Jr. served in Naval Intelligence during the war. Their ships were requisitioned. The City of New York was torpedoed in 1942 by the German submarine U-160. Three new passenger ships, each built for 120, were taken by the government the moment they were finished in 1941. In 1944 the company ran an advertisement promising that "WHEN peace comes," it would be ready "with a fine, new fleet of modern ships."
Their father did not see the peace. He died in Manhattan on March 28, 1943, at eighty. On March 30, fifteen hundred people attended his funeral mass at the Church of St. Ignatius Loyola on Park Avenue — Jesuits again — and the Times noted the "Leaders in Finance, Banking Among Those in Tribute." Five years later, on April 1, 1948, the sons changed the company's name. The American South African Line, which by then also served West Africa, became Farrell Lines, Incorporated, chosen to honor their father, whose "foresight and commitment to developing regular freight services to Africa," the announcement said, had been "instrumental in the establishment of the company."
The house flag stayed the same: a white St. Andrew's cross on a field of red and blue. On November 24, 1954, the Treasury Department registered it, along with the funnel mark — the flag centered three feet below a black band on a buff stack. The new coat of arms showed two golden seahorses supporting a shield, and above it, a square-rigged sailing ship. In an age of steam and diesel, the family put a sail on its crest.
Names on Hulls
The line grew. In 1965 it took over the Australia–U.S. East Coast service from United States Lines and stopped carrying passengers — no more plum pudding. It went into containers in the 1970s and bought the West Coast Australia service of the Pacific Far East Line in 1975. By 1978 Farrell Lines was the second-largest American-flag merchant fleet in the country: 44 ships, two more under construction at Bath Iron Works in Maine.
That same year, two things ended. On September 15, 1978, James A. Farrell Jr. died in Norwalk, Connecticut, at seventy-seven. And at Duluth, Minnesota, the Hyman Michaels Company bought a 600-foot Great Lakes freighter for scrap. She had been launched at Lorain on September 28, 1912, and had carried ore for the Corporation's fleet through two world wars, the Depression, a 1947 remeasurement, a 1949 reincorporation, a 1951 merger, and a 1967 renaming of the fleet itself. Her name was James A. Farrell. Sixty-five years. Father's ship and son's life ended in the same calendar year.
After that the descent was quick. Financial trouble in the 1980s forced Farrell Lines to drop its African and European routes and sell 38 of its 44 ships. By 1991 it ran four. In 2000 it was sold to P&O Nedlloyd; in 2005 P&O Nedlloyd was absorbed by Maersk. In 2010 the Danish giant revived the Farrell brand as a roll-on, roll-off carrier for the American military — three car-and-truck carriers built at Geoje, South Korea, owned in trust for a Norwegian company, flagged American so they can carry Pentagon cargo from the Gulf of Mexico to the Persian Gulf. One of them, the Alliance St. Louis, sailed as the Hual Paris until September 2006 and the Höegh Paris until February 2008. The line still participates in the federal Maritime Security Program. The subsidy is the business model. The flag is the asset.
On its website, the company honors its heritage with a short timeline. It says Farrell Lines was "founded in the early 1920s by James A. Farrell, Jr." and "initially focused on shipping routes between the United States and South America."
South America.
By now the pattern is unmistakable, and it is the most curious thing about the man. James Farrell put his name on more objects than almost any executive of his generation — a Pennsylvania city, a Great Lakes freighter, a merchant line, a Liberty ship — and the record of the man himself keeps slipping out of focus. The AP misspelled him in his obituary. The Times said he was president for twenty-one years; the encyclopedia says twenty-two. The encyclopedia says he retired at seventy; he left office on April 18, 1932, two months after his sixty-ninth birthday. A reference site has him running U.S. Steel from 1910. A Wikipedia disambiguation page kills off his son in 1966, which was the year his other son died. The Calles archive moved him to "United Steel." A digital library files his 1943 memorial in the Business History Review under "Medical History and Innovations." And the Harvard Business School, which includes him in its database of Great American Business Leaders of the 20th Century, leaves the field marked Born–Died blank.
The record cannot find him.
The Corporation he ran outlived its American ownership. Its share of domestic steel fell to 8 percent by 2001. On December 18, 2023, Nippon Steel offered $14.9 billion for it. Two presidents fought the sale; one blocked it; the next approved it with a golden share that lets the White House veto changes to the name, the headquarters, the plants. The deal closed on June 18, 2025, and that day U.S. Steel was delisted from the New York Stock Exchange, where it had traded since 1901. West of you lies the Orient, Farrell had told an audience in Vancouver in 1932. He meant it as a market. Ninety-three years later, the market bought the Corporation.
There is one more ship. In 1943, the year Farrell died, the Bethlehem-Fairfield Shipyard — a yard whose name carried the word Bethlehem, the company Schwab built after he left the Corporation — completed an emergency cargo steamer of the type the government was then turning out by the thousands. Liberty ship, design EC2-S-C1. She was named for James A. Farrell.
The Maritime Administration keeps a record card for her online. Official Number 243869. Gross tons, 7,176. Net tons, 4,380. Under Historical Narrative, a single sentence: MARAD has no written history for the Liberty ship James A. Farrell at this time. Under Fate, three letters — CTL, a constructive total loss, a ship damaged past the point where saving her makes sense — and then, where the particulars of what happened at sea ought to be, the government has written three words.
No Further Info.
Part IIThe Playbook
What follows is an attempt to extract the operating logic from a career that left surprisingly little in its own words. Farrell did not write a memoir. His surviving texts are trade-convention addresses, antitrust testimony, and a handful of speeches. What he left instead was a set of structures — a shipping subsidiary, a trade council, a school, a family line — and a pattern of decisions that, read together, describe a coherent theory of how an industrial company grows when its home market stops growing fast enough. Some of the lessons are about what he got right. At least two are about what he got wrong, and what it cost the people who came after him.
The Farrell Principles
- 1.Sell from the customer backward.
- 2.Own the cost everyone else treats as fixed.
- 3.Name the shortcut before it opens.
- 4.Count tons, not dollars, in a downturn.
- 5.Collect intelligence below your station.
- 6.Be the first witness.
- 7.Build the institution, then let it build the network.
- 8.Treat the flag as an asset.
- 9.Write the exit clause before the partnership sours.
- 10.Never fire someone who knows your ports.
- 11.A victory over your workforce is a loan, not a purchase.
- 12.Size is a position, not a strategy.
⚓
The Farrell Arc
Key decisions and the structures they produced, 1899–2025.
1899
Farrell, a salesman, is manager of the wire business that will feed U.S. Steel's export trade.
1903
Exports reach 1.5 million tons a year, up from 200,000.
1910
Founds the Isthmian Steamship Company as a U.S. Steel subsidiary.
1911
Named president of U.S. Steel as its market share sinks to 50 percent.
1913
First witness for the defense in the government's dissolution suit.
1919
Announces plans for a School of Foreign Service; refuses to negotiate in the steel strike.
1925
Family-backed group wins the American South African Line for $784,019.50.
1932
Vancouver speech on the Pacific market; retires April 18.
1937
Successors recognize the Steel Workers Organizing Committee.
1948
Sons rename their company Farrell Lines in his honor.
1978
Farrell Lines peaks at 44 ships; the Lakes freighter bearing his name is scrapped.
2025
Nippon Steel completes its acquisition of U.S. Steel.
Principle 1
Sell from the customer backward
Farrell's distinguishing advantage at the top of U.S. Steel was that he had never been a production man. Schwab came from the Carnegie mills; Gary came from the courtroom. Farrell came from the sales floor, and the sevenfold export expansion he engineered between 1899 and 1903 was not the product of a better process but of better knowledge about who, outside the United States, wanted American wire and what they would pay for it delivered.
This is the vantage point that let him see what his peers missed. The domestic market of the 1890s was so large that most steelmakers never looked past it; Farrell, who spent his days talking to buyers, saw the domestic market as one market among several. A seller's map of the world is different from a maker's map. It is drawn in demand, freight rates, and payment terms, not furnace capacity.
The lesson for operators is that the most valuable strategic insight in a mature company often lives with the person closest to the customer, not the person closest to the product. Farrell's board put a salesman in charge of the world's largest manufacturer, and the decision paid for two decades.
Tactic: Before your next strategy offsite, spend a week inside the sales function and redraw your market map using only what customers say, not what your product team assumes.
Principle 2
Own the cost everyone else treats as fixed
Isthmian is the cleanest case in Farrell's career. Every exporter of steel in 1910 paid freight to third-party carriers and treated that freight as an unavoidable cost of doing business abroad. Farrell looked at the same line item and saw an opportunity: heavy, low-value-per-ton goods are uniquely sensitive to transport costs, so whoever controls the hull controls the export margin. He built the fleet, and the fleet became "a highly lucrative subsidiary."
The insight is not "vertical integration is good." Vertical integration is frequently a disaster, a way for incumbents to buy mediocre businesses adjacent to their good one. The insight is narrower: integrate into the specific cost that determines whether you win or lose a sale. For U.S. Steel abroad, that was freight. Not mining, not distribution, not retail. Freight.
The Corporation had already shown the logic worked on the Great Lakes with the Pittsburgh Steamship Company. Farrell extended it to the oceans, where the stakes per voyage were larger and the competitors were foreign lines with every incentive to price American shippers out.
Tactic: List the three largest costs in your unit economics that you currently treat as external and non-negotiable, and ask which one, if owned, would change your win rate rather than merely your margin.
Principle 3
Name the shortcut before it opens
Farrell called his fleet Isthmian in 1910. The Panama Canal opened in 1914. The name was a bet, stated publicly, about where trade would flow once the geography changed — and it positioned the Corporation's shipping arm to exploit the shortcut from the first day it existed.
There is a recurring mistake among incumbents facing structural change: they wait for the change to arrive, then scramble to adapt. Farrell built the vehicle for the new route four years before the route existed. By the time the canal opened, the company already had ships, crews, and a reason to use them.
The 1915 Philadelphia address on Latin American trade during the European war is the same move in a different register. While others watched the war as a disruption, he identified it as an opening: the old European suppliers were preoccupied, and their customers needed new ones.
Tactic: Identify one infrastructural or regulatory change likely to land within five years, and fund a small, named team now whose only job is to be ready on the day it arrives.
Principle 4
Count tons, not dollars, in a downturn
The analytical core of the 1932 Vancouver speech is a distinction most observers in the Depression failed to make. Trade among Pacific nations, Farrell noted, had "continued to increase in volume, even though declining in value." Every other trade area had fallen on both measures. In a deflationary collapse, dollar figures conflate two things — falling prices and falling activity — and the first can mask a healthy version of the second.
A salesman who had spent his career counting tonnage was perfectly positioned to see through the noise. The Pacific was not shrinking; it was getting cheaper. Underneath the price collapse, demand for physical goods was still rising, driven, he argued, not by population growth but by improving communication and transportation.
The general principle applies to any market in a pricing shock. Revenue declines can reflect lost customers or cheaper customers, and the strategic response to each is opposite. One calls for retreat; the other calls for staying put and waiting for prices to recover on a larger base.
Tactic: In your next downturn review, decompose every revenue decline into unit volume and unit price before drawing conclusions, and protect any segment where volume is still growing.
Principle 5
Collect intelligence below your station
The New Yorker's 1925 sketch is a small thing, a paragraph of gossip, but it describes a deliberate practice. Farrell passed up the club car, the obvious place for a man of his rank, and chose a seat in the day coach beside "some more lowly-placed mortal," drawing him out on "matters of daily concern" before the train crossed the Harlem River. He was, in effect, running his own informal survey.
The value of the practice lies in what it routes around. Information that reaches a CEO through layers of management arrives filtered, summarized, and softened. A stranger on a train who has no idea who is asking has no reason to soften anything. Farrell got the unvarnished pulse of the commuting public directly, without intermediaries.
The limitation, as Part I argued, is that listening is not the same as acting. The same man who sought out the views of clerks on a train refused to negotiate with steelworkers in 1919. Intelligence gathering is a discipline; what one does with the intelligence is a separate test, and Farrell passed only the first.
Tactic: Once a month, have an anonymous, unscheduled conversation with a customer or front-line worker who does not know your title, and write down one thing that contradicts what your reports told you.
Principle 6
Be the first witness
When the government's dissolution suit came to trial in 1913, the Corporation's lawyers put Farrell on the stand first. The choice was strategic. The government's case rested on the claim that U.S. Steel was a monopoly; the man best positioned to rebut it was the one who knew the export markets intimately, who could describe the Corporation not as a domestic colossus but as a contender in a competitive world.
The broader lesson concerns who speaks for a company under existential threat. The instinct is to send the chairman, the general counsel, the figurehead. Often the more persuasive witness is the operator who knows the details, whose credibility rests on specifics rather than position. Farrell's testimony was printed in full by a trade press and preserved; the government lost; the Corporation remained whole for the rest of its independent life.
There is a reputational lesson as well. Being first to testify meant being first to frame the story. The person who speaks first sets the terms everyone else must respond to.
Tactic: When your company faces regulatory or public scrutiny, put forward the executive with the deepest operational command of the facts, not the most senior title, and put them forward first.
Principle 7
Build the institution, then let it build the network
Farrell helped found the National Foreign Trade Council and chaired it for years. He backed plans for a School of Foreign Service. These were not corporate assets. They were public institutions, ostensibly serving the national interest in trade, and they outlived his presidency by decades.
They also produced a network that paid dividends in ways a corporate subsidiary never could. When his sons incorporated the American South African Line in 1925, one of the founding stockholders was Eugene P. Thomas, president of the National Foreign Trade Council. In 1934, Franklin Roosevelt was writing to Farrell as the Council's chairman. In 1939, the State Department sought his help in managing public reaction to a reorganization of the foreign services. Retired executives rarely receive confidential five-page letters from Washington. Chairmen of trade councils do.
The structural insight is that institutions convert personal influence into durable, transferable influence. A CEO's power ends when the job ends. A council chairman's power persists, and the people the institution brings together become a network the founder and his heirs can draw on for generations.
Tactic: Identify an industry-wide problem your company cannot solve alone, and found or chair the body that addresses it, treating the network it produces as a long-term asset rather than a side effect.
S
Three Men at the Corporation
The founding generation of U.S. Steel leadership, as the sources describe them.
| Leader | Origin of power | Defining move | Namesake |
|---|---|---|---|
| Charles M. Schwab | Carnegie Steel executive; proposed the merger to Morgan | Left to build Bethlehem, which out-innovated the Corporation | — |
| Elbert H. Gary | Lawyer and former judge; chairman | Launched the Safety First committee, 1908 | Gary, Indiana (1906) |
| James A. Farrell | Salesman; export manager | Founded Isthmian; pushed exports and foreign trade | Farrell, Pennsylvania (1912) |
Principle 8
Treat the flag as an asset
The American South African Line lost money from the moment the Farrells bought it. It was a single route competing against British lines with deep-pocketed parents and multiple services. What kept it alive was not efficiency but nationality: as the sole American-flag operator on the route, it qualified for a federal mail contract worth $5,000 per outgoing voyage, twelve voyages a year. The government wanted an American presence in African trade and was willing to pay for it.
The Farrells understood that in certain industries, regulatory or national status is itself a product. Their line survived because it was American, and it remained American through a world war in which its ships were requisitioned, troopships were sunk, and new hulls were taken by the government before they made a commercial voyage. Every sacrifice deepened the company's claim on future federal support.
The logic still holds. A century later, the revived Farrell Lines, owned by a Danish conglomerate and operating Korean-built ships held in trust for a Norwegian firm, exists because those ships fly an American flag and qualify for the Maritime Security Program. The flag outlasted everything else about the original company.
Tactic: Audit your business for any status, certification, or national designation that competitors cannot easily replicate, and price that status into your strategy as a distinct asset.
Principle 9
Write the exit clause before the partnership sours
The Lewis and Farrell families were close enough in 1920 to found the Robin Line together and to share ownership of the African line. By 1933 the relationship had collapsed so completely that the families divided every shared enterprise, and the rupture's causes remain unrecorded, "perhaps secreted away in the exclusive India House." What followed was a rate war described as one of the most vindictive in American maritime history.
The damage was not the separation itself but the absence of anything to govern it. Because the families had built their ventures on personal trust rather than formal structure, there was nothing to prevent the losing side from becoming a dedicated competitor. Arthur Lewis Jr. spent two decades, by one account, driven by the desire to crush the Farrell line.
Family and friendship partnerships are among the most common in business and among the least formalized. The intimacy that makes them easy to start makes their ending catastrophic, because no one wanted to discuss the ending at the start.
Tactic: In any partnership built on personal relationships, negotiate the separation terms, including non-compete scope, while everyone is still friends and the conversation is still easy.
Principle 10
Never fire someone who knows your ports
Sylvester J. Maddock had worked for the Farrells and been dismissed. He knew the African ports and the African shippers better than almost anyone in American shipping. In 1935 he walked that knowledge across to the Lewis family's Robin Line, persuaded it to enter the African trade as a direct competitor, and became its general agent — building Robin's cargo volumes, in the historian's phrase, "at the expense of the American South African Line."
The episode rhymes with the founding drama of U.S. Steel itself, where Schwab's departure produced Bethlehem, the Corporation's quicker and more innovative rival. In both cases, the most dangerous competitor was not a stranger but a former insider who carried proprietary relationships out the door.
This is not an argument against ever letting people go. It is an argument for understanding exactly what knowledge leaves with them, and for treating the departure of anyone who holds customer relationships as a competitive event, not an HR one.
Tactic: Before any senior departure, map the customer and supplier relationships that person controls, and secure continuity on each before the exit becomes public.
L
The Farrell Ledger
Major decisions and how they aged.
| Decision | Year | Outcome | Verdict |
|---|---|---|---|
| Push wire exports abroad | 1899–1903 | 200,000 to 1.5 million tons | Scale |
| Found Isthmian fleet | 1910 | Highly lucrative subsidiary | Scale |
| Testify first in antitrust suit | 1913 | Corporation stays whole | Defend |
| Refuse to negotiate in strike | 1919 | Strike defeated; 8-hour day forced anyway; union recognized in 1937 | Risk |
| Back sons' African line | 1925 | Deficits, then a 44-ship fleet by 1978 | Bet |
| Shared ventures with the Lewis family | 1920–1933 | Rupture and rate war | Risk |
Principle 11
A victory over your workforce is a loan, not a purchase
In 1919 Farrell won. The strike was broken, the organizing drive defeated, the Corporation's open-shop policy preserved. And almost immediately the victory began to cost more than it had bought. Public opinion forced the end of the twelve-hour day. The company unions created in the 1920s to forestall real ones instead trained workers to organize, becoming an important factor in the rise of the United Steelworkers. In 1937, five years after Farrell retired, the Corporation recognized the union without a strike.
The lesson is not moral, though there is a moral dimension. It is structural. A management victory achieved by refusal rather than settlement does not resolve the underlying grievance; it defers it, with interest. The longer the deferral, the larger the eventual payment, and the less control management retains over the terms.
Farrell's own career makes the irony sharper. He understood better than almost anyone that markets could not be ignored, that foreign customers had to be listened to and courted. He did not extend the same logic to the market for labor, and his successors paid the bill.
Tactic: When you win a confrontation with your own employees, assume the grievance remains, and use the breathing room to address it on your terms before it returns on theirs.
Principle 12
Size is a position, not a strategy
U.S. Steel began life with 67 percent of American steel production and a reputation, from the start, as a company "known more for its size than its efficiency or innovation." By 1911 its share had sunk to 50 percent, eroded by a nimbler Bethlehem under a former U.S. Steel president. Farrell's presidency arrested the slide and, by the encyclopedia's account, restored the Corporation to clear leadership by the mid-1920s. After he left, it never meaningfully grew its share again; by 2001 it produced 8 percent of American steel.
Farrell's growth came largely from outside the domestic fight — from exports, from shipping, from foreign trade. He found new markets rather than simply defending the old one. His successors, facing the Depression and then the long postwar restructuring, increasingly behaved as if being large were itself a plan. In 1982 the company used steel tax breaks to buy Marathon Oil.
Scale confers advantages, but it does not choose a direction. A dominant company that stops asking where the next market is will discover, eventually, that someone else has asked for it. In 2025, the answer came from the Pacific, the market Farrell had pointed to in 1932, when Nippon Steel bought the Corporation outright.
Tactic: Every year, require your leadership team to name one market where you are small and growing, and treat that market, not the one you already dominate, as the measure of strategic health.
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Part IIIQuotes and Maxims
In their words
— James A. Farrell, speech in Vancouver, 1932West 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.
— James A. Farrell, speech in Vancouver, 1932Even 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.
— James A. Farrell, speech in Vancouver, 1932It 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.
— The New Yorker, 'Reconnaissance,' September 5, 1925By this method, I presume, Mr. Farrell keeps more accurate fingers on the common pulse than do his companions of the General Staff of the Industrial Army.
Maxims
- Sell from the customer backward. The person closest to demand often sees the strategy before the person closest to the product.
- Own the decisive cost. Integrate only into the expense that determines whether you win the sale, and nothing else.
- Build for the route before it exists. Farrell named his fleet for the isthmus four years before the canal opened.
- Read volume beneath value. In a price collapse, rising tonnage under falling dollars is a market still growing.
- Sit in the day coach. Unfiltered intelligence comes from people who do not know who is asking.
- Speak first when the company is on trial. The first witness frames the story everyone else must answer.
- Institutions outlast offices. A council chairman keeps the influence a retired president loses.
- The flag can be the business. Status that competitors cannot copy is an asset worth pricing.
- Write the divorce terms at the wedding. Partnerships built on friendship need exits built on paper.
- Winning against your workforce only defers the bill. The grievance you refuse to settle returns with interest and on someone else's terms.
