Andrew Carnegie () - Johnstown Flood National Memorial (U.S. National Park Service)
Andrew Carnegie was a Scottish-American industrialist, business magnate, and philanthropist. After selling Carnegie Steel, he surpassed John D. Rockefeller as the richest American for the next couple of years. His mother helped support the family by assisting her brother (a cobbler), and by selling potted meats at her . Two wealthy men: Andrew Carnegie and John D. Rockefeller. Andrew Carnegie () was one of the most successful businessmen and following, Carnegie's mother, with whom he shared a very close relationship, . many others to do the same, including John D. Rockefeller and W.K. Kellogg.
John Hay, a fellow-Scotch manufacturer of bobbins in Allegheny City, needed a boy, and asked whether I would not go into his service. I went, and received two dollars per week; but at first the work was even more irksome than the factory. I had to run a small steam-engine and to fire the boiler in the cellar of the bobbin factory. It was too much for me.
I found myself night after night, sitting up in bed trying the steam gauges, fearing at one time that the steam was too low and that the workers above would complain that they had not power enough, and at another time that the steam was too high and that the boiler might burst. He was a very hard worker and would memorize all of the locations of Pittsburgh's businesses and the faces of important men. He made many connections this way.
He also paid close attention to his work, and quickly learned to distinguish the differing sounds the incoming telegraph signals produced. He developed the ability to translate signals by ear, without using the paper slip,  and within a year was promoted to operator.
Carnegie's education and passion for reading was given a great boost by Colonel James Anderson, who opened his personal library of volumes to working boys each Saturday night. He was so grateful to Colonel Anderson for the use of his library that he "resolved, if ever wealth came to me, [to see to it] that other poor boys might receive opportunities similar to those for which we were indebted to the noble man".
Starting inwhen Carnegie was around 18 years old, Thomas A. Carnegie accepted this job with the railroad as he saw more prospects for career growth and experience with the railroad than with the telegraph company. Carnegie then hired his sixteen-year-old brother, Tom, to be his personal secretary and telegraph operator. Not only did Carnegie hire his brother, but he also hired his cousin, Maria Hogan, who became the first female telegraph operator in the country.
The railroads were the first big businesses in America, and the Pennsylvania was one of the largest of them all. Carnegie learned much about management and cost control during these years, and from Scott in particular. Many of these were part of the corruption indulged in by Scott and the Pennsylvania's president, John Edgar Thomsonwhich consisted of inside trading in companies that the railroad did business with, or payoffs made by contracting parties "as part of a quid pro quo ".
Reinvesting his returns in such inside investments in railroad-related industries: Throughout his later career, he made use of his close connections to Thomson and Scott, as he established businesses that supplied rails and bridges to the railroad, offering the two men a stake in his enterprises.
The investment proved a great success and a source of profit for Woodruff and Carnegie. The young Carnegie continued to work for the Pennsylvania's Tom Scott, and introduced several improvements in the service. Carnegie helped open the rail lines into Washington D. Following the defeat of Union forces at Bull Runhe personally supervised the transportation of the defeated forces.
Under his organization, the telegraph service rendered efficient service to the Union cause and significantly assisted in the eventual victory. Carnegie later joked that he was "the first casualty of the war" when he gained a scar on his cheek from freeing a trapped telegraph wire.
Defeat of the Confederacy required vast supplies of munitionsas well as railroads and telegraph lines to deliver the goods. The war demonstrated how integral the industries were to American success. The demand for iron products, such as armor for gunboats, cannons, and shells, as well as a hundred other industrial products, made Pittsburgh a center of wartime production.
Carnegie worked with others in establishing a steel rolling milland steel production and control of industry became the source of his fortune. Carnegie had some investments in the iron industry before the war. After the war, Carnegie left the railroads to devote all his energies to the ironworks trade. Carnegie worked to develop several iron works, eventually forming the Keystone Bridge Works and the Union Ironworks, in Pittsburgh. Although he had left the Pennsylvania Railroad Company, he remained closely connected to its management, namely Thomas A.
He used his connection to the two men to acquire contracts for his Keystone Bridge Company and the rails produced by his ironworks. He also gave stock to Scott and Thomson in his businesses, and the Pennsylvania was his best customer.
When he built his first steel plant, he made a point of naming it after Thomson. As well as having good business sense, Carnegie possessed charm and literary knowledge.
He was invited to many important social functions—functions that Carnegie exploited to his own advantage.
Beyond this I need ever earn, make no effort to increase my fortune, but spend the surplus each year for benevolent purposes! Let us cast aside business forever, except for others. Let us settle in Oxford and I shall get a thorough education, making the acquaintance of literary men. I figure that this will take three years active work.
I shall pay especial attention to speaking in public.
We can settle in London and I can purchase a controlling interest in some newspaper or live review and give the general management of it attention, taking part in public matters, especially those connected with education and improvement of the poorer classes. Man must have no idol and the amassing of wealth is one of the worst species of idolatry!
No idol is more debasing than the worship of money! Whatever I engage in I must push inordinately; therefore should I be careful to choose that life which will be the most elevating in its character. To continue much longer overwhelmed by business cares and with most of my thoughts wholly upon the way to make more money in the shortest time, must degrade me beyond hope of permanent recovery.
I will resign business at thirty-five, but during these ensuing two years I wish to spend the afternoons in receiving instruction and in reading systematically!
Steel empire[ edit ] Bessemer converter Carnegie did not want to marry during his mother's lifetime, instead choosing to take care of her in her illness towards the end of her life. One of his two great innovations was in the cheap and efficient mass production of steel by adopting and adapting the Bessemer processwhich allowed the high carbon content of pig iron to be burnt away in a controlled and rapid way during steel production.
Andrew Carnegie - New World Encyclopedia
In the young Carnegie's radical sentiments were stirred further at the news of "Ballie" being imprisoned for his part in a "Cessation of Labor" strike. At that time, withdrawal of labor by a hireling was a criminal offense. Migration to America Andrew Carnegie's father worked as a jobbing hand loom weaver.
- Andrew Carnegie
- John D. Rockefeller Biography
- Andrew Carnegie
This involved receiving the mill's raw materials at his cottage, and weaving them into cloth on the primitive loom in his home. In the s, a new system was coming into being, the factory system. During this era, mill owners began constructing large weaving mills with looms powered at first by waterwheels and later by steam engines. These factories could produce cloth at far lower cost, partly through increased mechanization and economies of scale, but partly also by paying mill workers very low wages and by working them very long hours.
The success of the mills forced William Carnegie to seek work in the mills or elsewhere away from home. However, his radical views were well known, and Carnegie was not wanted. William Carnegie chose to emigrate. His mother's two sisters had already emigrated, but it was his wife who persuaded William Carnegie to make the passage. This was not easy, however, for they had to find the passage money. That May, his family immigrated to the United Statessailing on the Wiscasset, a former whaler that took the family from Broomielaw, in Glasgow to New York.Captains of Industry: Vanderbilt, Rockefeller, Carnegie, and Morgan
From there they proceeded up the Hudson River and the Erie Canal to Lake Erie and then to Allegheny, Pennsylvania present day Pittsburgh's northside neighborhoodswhere William Carnegie found work in a cotton factory. His brother, Thomas, eight years younger, was sent to school. Andrew Carnegie quickly grew accustomed to his new country: Later personal life Andrew Carnegie at Skibo Castle, Carnegie married Louise Whitfield in and had one daughter, Margaret, who was born in In an era in which financial capital was consolidated in New York CityCarnegie famously stayed aloof from the city, preferring to live near his factories in western Pennsylvania and at Skibo Castle, Scotlandwhich he bought and refurbished.
By the rough and ready standards of nineteenth-century tycoons, Carnegie was not a particularly ruthless man, but the contrast between his life and the lives of many of his own workers and of the poor, in general, was stark.
A 'self made man' Andrew, aged 16, with brother Thomas Andrew Carnegie's education and passion for reading was given a great boost by Colonel James Anderson, who opened his personal library of four hundred volumes to working boys each Saturday night.
Carnegie was a consistent borrower. He was a "self-made man" in the broadest sense, insofar as it applied not only to his economic success but also to his intellectual and cultural development. His capacity and willingness for hard work, his perseverance, and his alertness, soon brought forth opportunities.
Carnegie during the U. Woodruff, inventor of the sleeping car. The great distances transversed by railways had meant stopping for the night at hotels and inns by the rail side, so that passengers could rest. The sleeping car sped up travel and helped settle the American west. The investment proved a success and a source of great fortune for Woodruff and Carnegie.
The young Carnegie, who had originally been engaged as a telegraph clerk and operator with the Atlantic and Ohio Company, had become the superintendent of the western division of the entire line.
In this post, Carnegie was responsible for several improvements in the service. When the American Civil War began inhe accompanied Scott, the Assistant United States Secretary of War, to the front, where he was "the first casualty of the war" pulling up telegraph wires the confederates had buried—the wire came up too quickly and cut his cheek. He would tell the story of that scar for years to come.
Following his good fortune, Carnegie proceeded to increase it still further through fortunate and careful investments. Aside from Carnegie's investment successes, he was beginning to figure prominently in the American cause and in American culture. Scott, who was now Assistant Secretary of War in charge of military transportationinvited Carnegie to join him.
Carnegie was appointed superintendent of the military railways and the Union Government's telegraph lines in the East, and was Scott's right hand man.
Carnegie, himself, was on the footplate of the locomotive that pulled the first brigade of Union troops to reach Washington. Shortly after this, following the defeat of Union forces at Bull Run, he personally supervised the transportation of the defeated forces. Under his organization, the telegraph service rendered efficient service to the Union cause and significantly assisted in the eventual victory.
The Civil War, as so many wars before it, brought boom times to the suppliers of war. Before the war its production was of little significance, but the sudden huge demand brought boom times to Pittsburgh and similar cities, and great wealth to the iron masters. Carnegie had some investments in this industry before the war and, after the war, left the railroads to devote all his energies to the iron works. Although he had left the Pennsylvania Railroad Company, he did not sever his links with the railroads.
These links would prove valuable. The Keystone Bridge Company made iron train bridges, and, as company superintendent, Carnegie had noticed the weakness of the traditional wooden structures. These were replaced in large numbers with iron bridges made in his works.
As well as having good business sense, Carnegie possessed charm and literary knowledge. He was invited to many important social functions, functions that Carnegie exploited to the fullest extent. Beyond this I need ever earn, make no effort to increase my fortune, but spend the surplus each year for benevolent purposes!
Let us cast aside business forever, except for others. Let us settle in Oxford and I shall get a thorough education, making the acquaintance of literary men. I figure that this will take three years active work.
I shall pay especial attention to speaking in public. We can settle in London and I can purchase a controlling interest in some newspaper or live review and give the general management of it attention, taking part in public matters, especially those connected with education and improvement of the poorer classes.
Man must have an idol and the amassing of wealth is one of the worst species of idolatry!
Andrew Carnegie (1835-1919)
No idol is more debasing than the worship of money! Whatever I engage in I must push inordinately; therefore should I be careful to choose that life which will be the most elevating in its character.
To continue much longer overwhelmed by business cares and with most of my thoughts wholly upon the way to make more money in the shortest time, must degrade me beyond hope of permanent recovery. I will resign business at thirty-five, but during these ensuing two years I wish to spend the afternoons in receiving instruction and in reading systematically!
Carnegie the industrialist — Building an empire of steel All this was only a preliminary to the success attending his development of the iron and steel industries at Pittsburgh, Pennsylvania. Carnegie made his fortune in the steel industry, controlling the most extensive integrated iron and steel operations ever owned by an individual in the United States. His great innovation was in the cheap and efficient mass production of steel rails for railroad lines.
In the late s, Carnegie was the largest manufacturer of pig-iron, steel-rails, and coke in the world, with a capacity to produce approximately 2, tons of pig metal a day. In he bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a railway miles long, and a line of lake steamships. An agglutination of the assets of he and his associates occurred in with the launching of the Carnegie Steel Company.
Bythe U. Carnegie had risen to the heights he had by being a supreme organizer and judge of men. He had the talent of being able to surround himself with able and effective men, while, at the same time, retaining control and direction of the enterprise.
Intragedy struck Carnegie when Thomas died at the early age of Success in the business continued, however. At the same time as owning steel works, Carnegie had purchased, at low cost, the most valuable of the iron ore fields around Lake Superior. Carnegie's businesses were uniquely organized in that his belief in democratic principles found itself interpreted into them. This did not mean that Carnegie was not in absolute control, however.
The businesses incorporated Carnegie's own version of profit sharing. Carnegie wanted his employees to have a stake in the business, for he knew that they would work best if they saw that their own self-interest was allied to the firm's.
As a result, men who had started as laborers in some cases eventually ended up millionaires. Carnegie also often encouraged unfriendly competition between his workers and goaded them into outdoing one another. These rivalries became so important to some of the workers that they refused to talk to each other for years.
Carnegie maintained control by incorporating his enterprises not as joint stock corporations but as limited partnerships with Carnegie as majority and controlling partner. Not a cent of stock was publicly sold. If a member died or retired, his stock was purchased at book value by the company. Similarly, the other partners could vote to call in stock from those partners who underperformed, forcing them to resign. The internal organization of his businesses was not the only reason for Andrew Carnegie's rise to pre-eminence.
Carnegie introduced the concept of counter-cyclical investment. Carnegie's competitors, along with virtually every other business enterprise across the globe, pursued the conventional strategy of procyclical investment: Because demand is high, investment in bull markets is more expensive. In response, Carnegie developed and implemented a secret tactic. He shifted the purchasing cycle of his companies to slump times, when business was depressed and prices low. Carnegie observed that business cycles alternated between "boom" and "bust.
During the years tothere was a great slump in economic demand, and so Carnegie made his move. At rock bottom prices, he upgraded his entire operation with the latest and most cost effective steel mills. When demand picked up, prosperity followed for Carnegie Steel. Carnegie, who had cultivated a pro-labor image in his dealings with company mill workers, departed the country for a trip to his Scottish homeland before the unrest peaked.
In doing so, Carnegie left mediation of the dispute in the hands of his associate and partner Henry Clay Frick. Frick was well known in industrial circles as maintaining staunch anti- union sensibilities.
The company had attempted to cut the wages of the skilled steel workers, and when the workers refused the pay cut, management locked the union out workers considered the stoppage a "lockout" by management and not a " strike " by workers.
Frick brought in thousands of strikebreakers to work the steel mills and Pinkerton National Detective agents to safeguard them.
The arrival, on July 6, of a force of three hundred Pinkerton agents from New York City and Chicago resulted in a fight in which ten men—seven strikers and three Pinkertons—were killed and hundreds were injured.
Pennsylvania Governor Robert Pattison discharged two brigades of the state militia to the strike site. Then, allegedly in response to the fight between the striking workers and the Pinkertons, anarchist Alexander Berkman tried to kill Frick with a gun provided by Emma Goldman. However, Frick was only wounded, and the attempt turned public opinion away from the striking workers.
Afterwards, the company successfully resumed operations with non-union immigrant employees in place of the Homestead plant workers, and Carnegie returned stateside. The formation of U. Steel In Carnegie was 65 years old and considering retirement. He reformed his enterprises into conventional joint stock corporations as preparation to this end. Carnegie, however, wanted a good price for his stock. There was a man who was to give him his price. This man was John Pierpont Morgan. Morgan was a banker and perhaps America's most important financial dealmaker.