Management Puzzle

U. S. Steel Corp. buzzed like a jigsaw last week with talk of new management, for President James Augustine Farrell had resigned. The news came suddenly in the middle of the night from the steelman's Manhattan home. As he faced the specially summoned reporters the tall, burly veteran of 51 years of steel showed little sign of his age. His ruddy face, topped by white hair, frames a pair of cold blue eyes. Written in his own handwriting, President Farrell's statement said his resignation had been accepted by the board to take effect April 18 but that he would remain a director. Surprised were the steel trade and Wall Street because his retirement would have been automatic, under the company's new pension plan, when he became 70 years old on Feb. 15, 1933 (TIME, April 27)*

Said Mr. Farrell: "I firmly believe that the time has now arrived for my successor to be appointed in order to establish the management upon a more permanent foundation composed of younger men." This contrasted sharply with his attitude last October. Revived was talk of friction between Mr. Farrell and some other members of the Finance Committee (Myron Charles Taylor, John Pierpont Morgan). In May Mr. Farrell denounced the steel industry for wage cutting, called it "a pretty cheap sort of business," but in October his own company cut wages 10%,. Recently there have been rumors of a further cut and Mr. Farrell may have resigned rather than share in the responsibility.

James Augustine Farrell has been president of U. S. Steel Corp. for 21 years. He was selected for that position by the late, great John Pierpont Morgan. He was and is famed as "father" of the country's steel export trade. Son of a ship master who was drowned, Jim Farrell started work at 16 in a New Haven wire mill for $4.65 a week. Now his salary is $100,000 a year, his pension will be about $21,000.

Always fascinated by the sea, he induced the Steel company to build its own fleet. He himself owns & operates the Tusitala (Samoan for Tale Bearer), one of the last clipper ships under the U. S. flag.

No successor was named to fill historic Jim Farrell's post. If Steel's tradition is followed, a man trained in the trade will be elected. Mentioned as such candidates were Eugene Peeples Thomas, vice president of U. S. Steel, and I. Lamont Hughes, president of Steel's biggest subsidiary, Carnegie Steel Co. Outside possibility was Sewell Lee Avery, famed Chicago president of U. S. Gypsum, and a director of U. S. Steel, who was last month selected to head Montgomery Ward & Co. with whose affairs the House of Morgan is also concerned.

* Birth records at New Haven, Conn, show that James Augustine Farrell was born in 1862. If this is correct he would be 70 next month. When he was asked about it last October Mr. Farrell admitted he was confused, said he might make a special trip to his native city to investigate. On the company's records the year of his birth is given as 1863.

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