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					Andrew Carnegie
Born November 25, 1835 (Dunfermline, Scotland)
Died August 11, 1919 (Lenox, Massachusetts)

Industrialist
Philanthropist




‘‘There is no class so
pitiably wretched as that     D     uring his lifetime Andrew Carnegie’s name immedi-
                                    ately brought forth thoughts of the immense wealth
                              he made through the steel empire he created almost single-
which possesses money
                              handedly. The Scottish-born businessman possessed tre-
and nothing else.’’
                              mendous foresight and sharp managerial skills, and the
                              innovations he brought to American industry revolution-
                              ized it and helped make the country a global economic
                              power in the years following his death. Carnegie’s legacy,
                              however, involved more than making money. Carnegie
                              came from a humble background and gave generously in
                              his lifetime. After nearly thirty years in the steel industry,
                              Carnegie sold his company to Wall Street financial backer
                              J. P. Morgan (1837–1913; see entry) in 1901, and the deal
                              made him the richest man in the world. He used it to fund
                              his philanthropic efforts (aid given to promote human wel-
                              fare), which centered on public libraries and schools in the
                              United States and England. At the time of his death in
                              1919, Carnegie had given away nearly 90 percent of his
                              fortune.

                         30
Andrew Carnegie. (AP/Wide World Photos. Reproduced by permission.)




Carnegie background
    The story of Carnegie’s rise from his poor beginnings
became a symbolic success story of the American dream for
generations of new immigrants. He was born on November
25, 1835, in Dunfermline, Scotland. Dunfermline was a
noted textile center, and Carnegie’s father was a handloom
weaver by trade. In the late 1840s, however, steam-powered
looms became standard in the mills, and many in
Dunfermline found themselves out of a job. Carnegie’s
father, William, was among the unemployed. Weavers in

                                                                Andrew Carnegie   31
     Scotland attempted to organize and demand some eco-
     nomic reforms that would protect their livelihoods, but
     they were unsuccessful. The hardship of these years made
     a tremendous impression on young Carnegie, and though
     his own industry was guided by the same principles as
     those of the mills—favoring productivity over job protec-
     tion—he would later attempt to improve the lives of the
     working class through other means.
         Margaret Carnegie, his mother, believed that a better life
     could be made in America, and she convinced her husband to
     relocate the family there. The family, which also included
     Andrew’s younger brother, Thomas, left in 1848 and settled
     in Allegheny, Pennsylvania, near Pittsburgh. They lived in
     poor quarters, and William Carnegie had a difficult time find-
     ing a job that could support the household. Although he was
     just thirteen, Andrew soon went to work to help out, finding a
     job as a bobbin boy in a textile mill. His duty was to collect the
     used spindles of yarn from the looms. He progressed from that
     to a better job as a messenger in a telegraph office, and from
     there to being a telegraph operator. The year he turned eigh-
     teen he was chosen by the superintendent of the
     Pennsylvania Railroad company’s western division, Thomas
     Scott, to become his personal telegraph operator and office
     assistant.
          Carnegie spent the next twelve years with the Penn
     Railroad, which was one of the major transportation lines in
     its day. Two years into the job, in 1855, his father died, and
     Carnegie became the sole supporter of his mother and
     brother. Because he had entered the working world at such a
     young age, he had little formal education, but he spent his
     free time reading about a variety of subjects. He was a frequent
     visitor to the local free library, where anyone could come in to
     read. He also took night school courses in bookkeeping and
     advanced to other positions within the railroad company. In
     1859, when Scott became a vice president, he made Carnegie
     the supervisor of the Penn Railroad’s western lines. The divi-
     sion prospered under Carnegie’s shrewd management, and he
     even invented a military telegraph system for Union Army
     communications during the American Civil War (1861–65; a
     war between the Union [the North], who were opposed to
     slavery, and the Confederacy [the South], who were in favor
     of slavery).

32   Development of the Industrial U.S.: Biographies
The Age of Steel
    During his years as a railroad executive, Carnegie also
began making investments in other businesses. After meeting
George Pullman (1831–1897), inventor of the sleeping car for
trains, he bought a stake in the Woodruff Sleeping Car
Company for $217. Within two years that investment was
yielding an annual return of nearly $5,000. Carnegie also
began buying partnerships in iron mills and factories, and in
1865 he decided to retire from the Penn Railroad and start his
own firm. His Keystone Bridge Company constructed bridges
from iron, which was quickly replacing wood as the standard
material, and, like nearly everything that Carnegie established,
the business prospered. During this time he also sold bonds in
both the United States and England for railroad and bridge
company enterprises and reportedly earned $1 million in com-
missions in a five-year period.

     By 1870 Carnegie was convinced that steel would soon
become the building material of choice for the growing
United States. Steel was produced by combining iron with
carbon, but in its early days the process was difficult. On a
visit to England, Carnegie saw huge Bessemer furnaces, in
which impurities were removed from molten iron by com-
pressed air. The process had been patented by Henry
Bessemer (1813–1898) in 1855. It was an inexpensive way to
make steel, which lasted longer than iron and was lighter in
weight. Prior to the Bessemer method, steel was made from
iron, and about three tons of coke, a fuel made from coal, were
needed to fire the furnaces for each ton of steel produced.

    The extensive Bessemer factories in Sheffield, England,
were producing steel using the new method, and Carnegie
quickly realized the advantages of it. By 1872 he had two
Bessemer-type furnaces in operation at mills he owned in
Pennsylvania, and soon he founded his first business devoted
fully to the manufacture of steel, Carnegie, McCandless, and
Company, which later became simply Carnegie Steel. The
company opened its first completely operational plant in
1875 in Braddock, Pennsylvania. It was named the J. Edgar
Thomson Works, after the president of the Pennsylvania
Railroad. The two companies were linked in another way as
well, for the first major order at Carnegie’s new plant came
from the railroad for two thousand steel rails. Railroads were

                                                 Andrew Carnegie   33
                                                                  the main form of transportation at the
                                                                  time, with hundreds of miles of new
                                                                  tracks being laid down every year as
                                                                  Americans moved westward.



                                                                  Steel for the nation
                                                                      Carnegie had been correct: steel was
                                                                  cheaper than iron to produce, and
                                                                  the price of rails fell sharply from
                                                                  $160 per ton in 1875 to $17 per ton in
                                                                  1900. Open-hearth steel production,
                                                                  another innovation he introduced,
                                                                  also lowered the manufacturing costs,
                                                                  and his firm prospered. The open-
                                                                  hearth method allowed for greatly
                                                                  increased temperatures which normal
                                                                  furnaces and fuels had been unable to
                                                                  reach, to remove impurities from pig
                                                                  iron. By 1878 Carnegie Steel was worth
                                                                  $1.3 million and was the leading steel
                                                                  manufacturer in the United States. In
                                                                  1881 Carnegie bought a stake in a thriv-
Henry Clay Frick (above) and Andrew Carnegie were                 ing Pennsylvania coke company owned
business partners for many years. (Courtesy of The Library of     by Henry Clay Frick (1849–1919). Coke
Congress.)
                                                                  was in plentiful supply thanks to
                                                                  Pennsylvania’s coal mines, and soon
                                                                  the Carnegie plants were producing
                                                                  two thousand tons of steel daily.
                                           The partnership between the two industrial leaders was a
                                      successful one for many years. Frick oversaw day-to-day opera-
                                      tions, while Carnegie was responsible for expansion and cost-
                                      cutting measures at the plants. He made a wise purchase of a
                                      rival in 1883 when he bought the Homestead Works, whose
                                      mills churned out the steel structural elements for elevated
                                      railways in New York City and Boston, Massachusetts.
                                      Homestead also provided the steel beams used in the new sky-
                                      scrapers rising in American cities, including the first skyscra-
                                      per, the Home Insurance Company Building in Chicago,
                                      Illinois. Carnegie’s company made large profits over the next
                                      two decades, providing steel for thousands of miles of rail and a
                                      great number of buildings. The company was also instrumental

                             34       Development of the Industrial U.S.: Biographies
in the creation of landmarks, with both the Washington
Monument in the District of Columbia and New York City’s
Brooklyn Bridge built using steel from Carnegie’s plants.
    Even during a serious economic downturn, the
Depression of 1893–96, Carnegie’s company remained suc-
cessful because of his sound management. He was earning a
salary of nearly $25 million annually by 1890 and was
regarded as one of the country’s most impressive business
minds. One major setback came in 1892, however, when
workers at the Homestead facility went on strike. Initially
Carnegie was not opposed to labor unions, unlike many of
his fellow industrialists—in fact, in one of the many articles
he authored, he argued in an 1886 issue of Forum Magazine
that workers should have the right to form a union. But
Carnegie’s view changed and he opposed the unionization
of the workers in his plants, believing that unions interfered
with good company management. Frick, on the other hand,
had always been strongly opposed to organized labor.


Strike at Carnegie’s company
    When the Homestead workers went on strike in mid-1892,
Carnegie was in Scotland on his annual summer vacation.
Frick, left in charge, was determined to break the hold of the
union, the Amalgamated Association of Iron and Steel
Workers, at the company’s mills. He enlisted guards of the
Pinkerton Detective Agency, who had gained a reputation as
dedicated strike-busters, and the Homestead picket line
erupted into violence. In the end five workers and three
Pinkerton agents died, and many more were left injured. The
incident captured national attention, and the Pennsylvania
governor sent in the state militia to maintain order. It was a
bitter end, and Frick became one of the main enemies of the
labor movement, even being targeted for an assassination
attempt. The Homestead workers remained locked out, how-
ever, and no other union attempted to organize at a Carnegie
plant until the 1930s.
    Carnegie and Frick parted ways in 1899, and the following
year a dispute over the market value of the coke that Frick’s
plants sold to Carnegie’s had to be settled by lawyers after a
lawsuit was filed. Carnegie had already begun his extensive
philanthropic efforts by this time, and as the new century

                                                Andrew Carnegie   35

				
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