Background
Grace was born on August 27, 1876, in Cape May, New Jersey, the son of John Wesley Grace, a sailor and grocery store operator, and Rebecca Morris.
Grace was born on August 27, 1876, in Cape May, New Jersey, the son of John Wesley Grace, a sailor and grocery store operator, and Rebecca Morris.
After attending Goshen public schools, Grace was sent to the Pennington Academy in New Jersey to prepare for college. In 1895 he entered Lehigh University in Bethlehem, Pa. , where he won a prize in mathematics and played shortstop on the varsity baseball team, of which he was captain in 1898. He ranked first in his class in 1899, graduating with honors in electrical engineering. As class valedictorian he spoke on "The Future of Electricity, " stressing its labor-saving applications to industry.
Grace went to work at the nearby Bethlehem Steel Company, after having turned down an offer to become a professional baseball player. His first job was operating an electric crane. In 1902, after suggesting ways to eliminate the waste and bottlenecks in the flow of raw materials he had observed within the Bethlehem yards, Grace was promoted to supervise and overhaul yard traffic. In 1904 he met Bethlehem's new owner, Charles M. Schwab, Andrew Carnegie's protégé, who had recently resigned as president of United States Steel. Schwab was impressed by Grace's quick mind and his intimate knowledge of all aspects of Bethlehem's facilities. In January 1906 Schwab sent him to Cuba to reorganize the Juragua iron mines, which were Bethlehem's primary source of ore. Grace greatly improved production by mechanizing almost every operation of the mines. Two senior Bethlehem officials wanted to station Grace in Cuba permanently, but Schwab overruled them. He wanted a man of Grace's organizational talent closer at hand. He chose Grace to construct the new beam mill, and when Grace completed the mill and made it operational, Schwab promoted him to chief executive officer of Bethlehem Steel, with the title of general manager. In 1913, five years later, Grace was named president of Bethlehem and Schwab became chairman of the board. As president, Grace had full authority over production. Both men wanted to make Bethlehem Steel into a fully integrated producer: they acquired new ore mines and subsidiaries; they enlarged Bethlehem's ship-building and repair facilities, which, during periods of economic depression, produced nearly half of Bethlehem's profits; and they continued an aggressive program of expansion, buying strategically located facilities to strengthen Bethlehem's competitive position. Three major acquisitions - Pennsylvania Steel Company in 1916 and Midvale Steel and Lackawanna Steel in 1922 - gave Bethlehem over 15 percent of the nation's capacity. However, their attempts to merge with Youngstown Sheet and Tube Company, in order to challenge United States Steel's dominance of the Chicago steel market, were repeatedly thwarted. Schwab and Grace agreed that the best way to generate additional profits was to reduce production costs and that a giant firm could only be successful if its workers and managers had a direct share in its profits. They adopted a system of measuring each man's performance and awarding bonuses accordingly. Grace was a prime beneficiary of the bonus system: until the 1930's his salary never exceeded $12, 000, but his bonuses were huge, averaging $814, 000 a year between 1918 and 1930 and $1. 6 million in 1929 alone. In 1946 Grace became chairman of the Bethlehem Steel Corporation. He held the reins of power tightly until 1957, when a stroke forced his retirement. When he died in Bethlehem, Pennsylvania on July 25, 1960, Bethlehem Steel was the nation's second largest steelmaker and its largest shipbuilder.
President of Bethlehem Steel Corporation (1916-1945); President of the American Iron and Steel Institute
Although Grace was not an innovator in the steel business, he possessed an undeniable brilliance as an administrator. He combined an encyclopedic mastery of steelmaking with a relentless determination to cut costs and expand production. He drove his subordinates hard but earned their respect because he drove himself just as hard. While Schwab relied upon coaxing and gentle persuasion to achieve his goals, Grace was always ill at ease with such methods. A shy man with a quick temper, he was accustomed to command and was impatient for results. "Always more production" was his watchword.
Grace married Marion Brown, daughter of Charles Brown, co-founder of the Brown-Borhek lumber supply company. They had three children.