Forging America: The History of Bethlehem Steel - Chapter 7
Bethlehem Steel Graphic Banner: Chapter 7
When Kuzma was arrested on July 29, 1953, he didn't deny being a communist, and the local media were unrestrained in telling the story.
On the day of Kuzma's arrest, The Evening Chronicle of Allentown featured a cartoon that showed a large flyswatter labeled ''FBI'' whacking communist insects. The article on his arrest said federal agents had labeled Kuzma ''the Mr. Big of Communists in eastern Pennsylvania.'' The Chronicle's editorial that day referred to Kuzma as a ''Kremlin termite.''
Thomas, who had been a communist from 1937-39, was asked by the FBI to go undercover to rejoin the party in 1944 and attend meetings of communist groups such as the Easton Fur Club and the Bethlehem City Club.
On the witness stand, Thomas said Kuzma not only ran the meetings, but that he told members that communists arranged the Bethlehem Steel strike of 1946. According to Thomas' testimony, Kuzma went on to tell members that the only way to establish a government of the workers in the United States was to overthrow the government in Washington. Along with Kuzma, Thomas named several other local residents as having attended the communist meetings.
On Aug. 14, 1954, the jury found all nine men guilty of being communists. They were sentenced to five years in prison and ordered to pay $10,000 fines, but they appealed. The courts threw out the verdict and declared the Smith Act unconstitutional.
Months later, in December 1954, Thomas was called to Washington to give testimony in a private session to McCarthy's subcommittee. The hearing testimony and the responses by those Thomas named weren't made public until May 2003. Transcripts show that Thomas claimed Bethlehem Steel was the ''main concentration center'' for the Communist Party in eastern Pennsylvania and employed ''hundreds'' of communist sympathizers.
McCarthy wasn't at these private hearings. Earlier in the year, he had accused the Army of coddling an alleged communist sympathizer, and his attack backfired. Shamed, by December 1954 he was trying to stay out of the limelight. But one of the people at the hearings was a bright young attorney named Robert F. Kennedy, the brother of John F. Kennedy and a future attorney general.
The committee got almost nothing from the accused Bethlehem Steel workers. Some denied ever belonging to the Communist Party; others used their constitutional right not to incriminate themselves. But pleading the Fifth Amendment had its consequences. Bethlehem Steel fired workers who refused to cooperate with the subcommittee.
The communists were blamed for a lot in the 1950s, including matters for which they weren't responsible. In 1951, Bethlehem Steel President Arthur B. Homer told members of the American Iron and Steel Institute, the industry trade group, at a meeting in Philadelphia that communists caused America's rising inflation.
Homer's logic was that a large part of inflation was brought on by government spending. He hastened to add that he was referring only to the ''failure to reduce unnecessary nondefense spending.'' Apparently defense spending, which helped carry Bethlehem Steel's bottom line, was acceptable. Coupled with high taxes and government regulation, Homer said, the country was being pushed toward bankruptcy.
''American inflation could indeed be Russia's secret weapon,'' he said, referring to Russian communist leader Vladimir Lenin's call for worldwide revolution against capitalism. ''There are, in fact, many who believe that in line with the Lenin formula, the real aim of Russian threats is to worry us into spending ourselves into bankruptcy.''
Homer's language reflects the great fear of the era: that the ''Reds'' could even be neighbors of patriotic Americans, undermining the country as they sat in on the local parent-teacher association meeting or attended the firemen's ball. Hollywood's 1956 film ''Invasion of the Body Snatchers,'' about people in a small town who are duplicated and replaced by aliens hatched from pods, reflected the era's paranoia.
But Homer had bigger things to worry about than the communist threat. After leading Bethlehem Steel's shipbuilding effort during World War II, he took over as corporation president in December 1945, when Grace was elevated to chairman. He was the first of the new generation of Bethlehem managers. Twenty years younger than Grace, he had no memory of the Bethlehem Iron Co. of the Robert Sayre era or the more flamboyant times of Bethlehem Steel Corp. founder Charles M. Schwab.
On Nov. 1, 1957, Grace retired at the age of 81, and Homer took over as chief executive officer. The title of chairman of the board that had been used by Grace was abolished. But Grace was named honorary chairman, a new title created just for him, and he retained his seat on the board.
Homer was a departure from past leadership, but his arrogant view of the company's untouchable place in the world market was the same as his predecessors'. When it was suggested that European steel methods were technologically ahead of America's, Homer sternly replied, ''I don't believe it.''
As Homer ran the company that locals simply referred to as The Steel, Grace adopted a role as the grand old man of steelmaking. In one of the many opinion pieces he wrote for The Evening Chronicle, Grace addressed the question of whether the end of the Korean War and a government slowdown in spending would plunge the nation into a recession.