Moving Metal

was the development of subdivision housing for veterans who were settling down and starting families. Second, there was the unfolding Cold War, which revived the aircraft and ship- building industries and brought the prospect of long-term military spending. Los Angeles was a prime beneficiary of both the construction boom and the new defense contracts, and continued its exponential growth as one of the world’s great cities. For Reliance and its competitors in the steel products industry, the construction boom was a double-edged sword. While orders for components mounted to meet the demands of builders, supplies of steel and steel products dwindled as companies vied with one another to buy up raw materials like the steel produced at Henry J. Kaiser’s plant in Fontana, California, the largest steel mill west of the Rockies. During World War II, Reliance’s priority allocation had meant guar- anteed access to the steel that it needed to do business, but by November 1945 the War Production Board had been phased out. The company nowhad tocompete for steel, and in January 1948, Neilan told the other Board members that “there would continue to be great difficulty in getting a sufficient supply of steel to support sales at the level of 1947 or perhaps higher.” By spring, Neilan was even more exasperated, not only by the scarcity of raw materials but also by the cramped space in the warehouse that Reliance shared with Allied Supply Company. Reliance was notably lagging behind its competitors in terms of its plate burning, shearing, and saw-cutting capabilities. Neilan’s Irish temper boiled over in an April Board meeting. “We should have this equipment in order to get recognition among buyers of steel so as to give service somewhat in line with our competitors,” he fumed. Moreover, he said, “If we

That summer, before construction even started, Neilan began identifying the equipment that Reliance would need in the postwar period, including cranes, an “iron worker” machine, torch cutters, plate shears, and circle-cutting torches. All that would cost about $100,000. Neilan was also convinced that it would be “absolutely necessary” for the company to carry a full line of steel products in order to remain competitive. That would include cold drawn bars, high carbon bars, floor plate, sheared plates, and, as soon as they became available, hot rolled black sheets and galvanized sheets. Some salesmen, Neilan noted, were even asking for plow steel. Neilan had also ordered an expensive new delivery truck to carry the expected heavier loads of steel. The Board agreed that Reliance should indeed be ready for the postwar boom, but the question was how to finance the investment. Reliance was doing well despite the reconversion lull in the economy. By mid-summer the company had accrued $89,500 in earned surplus, which Neilan insisted be retained to fund growth rather than be distributed to shareholders— even though he would have been the primary beneficiary. But those earnings alone could not fund the expansion that Reliance had planned, so Neilan and Roe put even more money into the company, making personal loans exceeding $100,000 during the summer. By the fall, all the plans were set and Reliance’s finances were in order. Construction of the new warehouse began on October 5 and was completed on January 30, 1947. During the subsequent months Reliance began to reap the rewards of its reconversion investment. Then, as the orders rolled in, supplies of steel suddenly became scarce. California was roaring back from the postwar lull into an unprecedented construction boom, fueled by two main drivers. First, there

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