Andrew Carnegie: November 25, 1835¬†‚Äď August 11, 1919


✪ Andrew Carnegie was a Scottish-American industrialist and philanthropist who led the expansion of the American steel industry in the late 19th Century and became one of the richest Americans in history. During the last 18 years of his life, he became a leading philanthropist in the United States and the British Empire; giving away approximately $350 million (equivalent in 2021 to $5.5 billion), almost 90 percent of his entire fortune, to various charities, foundations and universities.

Carnegie was born on November 25th, 1835 to Margaret Morrison Carnegie and William Carnegie in¬†Dunfermline, Scotland. The family lived in a typical weaver’s cottage with only one main room which was shared with another neighboring weaver’s family. The single main room served as a combination living room, dining room and bedroom.

Carnegie’s maternal uncle, Scottish political leader¬†George Lauder, Sr., deeply influenced him as a boy by introducing him to¬†Robert Burns‘ writings about historical Scottish heroes such as¬†Robert the Bruce,¬†William Wallace, and¬†Rob Roy.

When Carnegie was 12, his father fell on very hard times as a handloom weaver; a situation compounded by the fact the entire country at the time faced starvation. Andrew’s mother helped to support the family by assisting her brother and by selling assorted potted meats at her “sweetie shop,” leaving her as the family’s primary breadwinner. Struggling to make ends meet, the Carnegies then decided to borrow money from George Lauder, Sr in 1848¬†and immigrate to¬†Allegheny, Pennsylvania in the United States in hopes of the prospect of a better life.¬†Carnegie’s migration to America would be only his second journey outside of Dunfermline ‚Äď the first being an outing to¬†Edinburgh¬†to see¬†Queen Victoria.

Carnegie decided not to marry during his mother’s lifetime, instead choosing to care for her in her illness towards the end of her life.¬†After she died in 1886, the 51-year-old Carnegie married¬†Louise Whitfield¬†who was 21 years his junior.¬†In 1897,¬†the couple had their only child, a daughter, whom they named after Carnegie’s mother,¬†Margaret.

In September 1848, Carnegie arrived with his family in Allegheny. Eventually, the father and son both received job offers at the same Scottish-owned cotton mill, Anchor Cotton Mills. Carnegie’s first job in 1848 was as a¬†bobbin boy, changing out spools of thread in a cotton mill 12 hours a day, 6 days a week in the cotton factory. His starting wage was $1.20 per week (equivalent to $38 in 2021).

In his autobiography, Carnegie writes about the hardships he endure with this new job:

“Soon after this Mr. 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 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.”

Carnegie was a consistent borrower and a “self-made man” in his personal economic, intellectual and cultural development.¬†His capacity & willingness to learn, hard work ethic and perseverance soon brought him unique opportunities.

In 1849, Carnegie was hired as a telegraph messenger boy in the Pittsburgh Office of the Ohio Telegraph Company, at $2.50 per week (equivalent $81 in 2021) following the recommendation of his uncle. He was a hard worker and memorized all of the locations of different Pittsburgh businesses along with the faces of important men. He made many beneficial & advantageous connections this way. He also paid close attention to his work and quickly learned to distinguish between the different sounds incoming telegraph signals produced. He soon developed an ability to translate telegraph signals by ear without using a paper slip. Within a year, he was promoted to an operator. 

In 1853, when Carnegie was around 18 years old,¬†Thomas A. Scott¬†of the Pennsylvania Railroad Company hired him as a secretary/telegraph operator at a salary of $4.00 per week (equivalent to $130 in 2021). Carnegie accepted the job with the railroad because he saw more potential for career growth and experience beyond that with the telegraph company.¬†At age 24, Scott asked Carnegie if he could handle being superintendent of the Western Division of the Pennsylvania Railroad. Carnegie accepted Scott’s offer & on December 1, 1859, he officially became superintendent of the Western Division.

Scott also mentored & helped Carnegie with his very first investments.¬†In 1855, Scott made it possible for Carnegie to invest $500 in the¬†Adams Express, which contracted with the Pennsylvania Railroad Company to carry its messengers. The money was secured by his mother’s placing of a $600 mortgage on the family’s $700 home, but the opportunity was only made available to Carnegie because of his close relationship with Scott.

In the Spring of 1861 after the onset of the Civil War, Carnegie was appointed by Scott, who was now Assistant Secretary of War in charge of military transportation, as Superintendent of the Military Railways and the Union Government’s telegraph lines in the East. Carnegie helped reopen rail lines into Washington D.C. which had been sabotaged by Confederate troops & he rode on the locomotive pulling the first brigade of Union troops to reach Washington D.C. Following the defeat of Union forces at¬†Bull Run, Carnegie personally supervised the transportation of the defeated troops.

After the war ended, Carnegie left the railroads behind to devote his business interests & energies to the ironworks trade. Carnegie developed several successful ironworks; eventually forming the Keystone Bridge Works and the Union Ironworks in Pittsburgh. Although he had left the Pennsylvania Railroad Company, he still remained connected to its management, namely Thomas A. Scott and J. Edgar Thomson. He utilized his connections with these two men to acquire contracts for his Keystone Bridge Company and the rails produced by his ironworks.

Through Keystone, Carnegie supplied the steel for and owned shares in the landmark Eads Bridge Project across the Mississippi River at St.Louis, Missouri (completed in 1874). This project was an important proof-of-concept for the current steel technology & marked the opening of an entirely new American steel market.

Carnegie believed in much more than merely making money. He believed the power of wealth should be used as a tool to benefit the lives of others. He wrote:

I propose to take an income no greater than $50,000 per annum! 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 Production

Carnegie made the bulk of his fortune in the steel industry. he controlled the most extensive integrated iron and steel operations ever owned by an individual in the United States. One of his greatest technical innovations was in the economical and efficient mass production of steel by adopting and adapting the Bessemer process. A smelting process which allowed the high carbon content of pig iron to be burnt away in a controlled and rapid fashion during steel production.

In the late 1880s, Carnegie Steel was the largest manufacturer of¬†pig iron, steel rails, and¬†coke¬†in the world; with a capacity to produce approximately 2,000 tons of pig iron per day. Carnegie’s success was also due to his established relationship with the railroad industries which relied on steel for track.

By 1901, when Carnegie was 65 years of age and considering retirement, he sold all of his steel & ironworks interests to a trust in a deal organized by John Pierpont Morgan: a banker and one of America’s most important financial deal makers of the time. Morgan had observed how efficiently Carnegie’s companies could profits; and, he envisioned an integrated steel industry which would cut costs, offer lower prices to consumers, produce in greater quantities and raise workers’ wages. To this end, he arranged to buy out Carnegie and several other major producers and integrate them into one company, thereby eliminating duplication and waste. He concluded negotiations on March 2, 1901 and formed the¬†United States Steel Corporation, the first corporation in the world with a market capitalization of over $1 billion. The buyout, secretly negotiated by¬†Charles M. Schwab¬†(no relation to¬†Charles R. Schwab), was the largest such industrial takeover in United States history to date.

Controversies

Carnegie was one of more than 50 members of the South Fork Fishing and Hunting Club, which has been blamed for the Johnstown Flood that killed 2,209 people in 1889.

The¬†Homestead Strike¬†was a bloody labor confrontation lasting 143 days in 1892, one of the most serious in U.S. history. The conflict was centered on Carnegie Steel’s main plant in¬†Homestead, Pennsylvania and grew out of a labor dispute between the¬†Amalgamated Association of Iron and Steel Workers¬†(AA) and the¬†Carnegie Steel Company.

Philanthropist

Carnegie spent his last years as a philanthropist, constructing commodious swimming-baths for the people of his hometown in Dunfermline in 1879. In the following year, Carnegie gave £8,000 for the establishment of a Dunfermline Carnegie Library in Scotland. In 1884, he gave $50,000 to Bellevue Hospital Medical College (now part of New York University Medical Center) to found a histological laboratory, which is now called the Carnegie Laboratory.

From 1901 forward, Carnegie devoted the rest of his life to providing capital for purposes of public interest and social and educational advancement. He saved letters of appreciation from those he helped in a desk drawer labeled “Gratitude and Sweet Words.”

Among his many philanthropic efforts was the establishment of numerous¬†public libraries throughout the United States, Britain, Canada and other English-speaking countries. The first¬†Carnegie Library¬†opened in 1883 in Dunfermline. During the last years of the 19th century, there was the increasing adoption of the idea that free libraries should be available to the American public. Carnegie’s method was to provide construction & equipment funds for the library, but only on the condition that the local authorities matched the amount by providing land and a budget for continued operation and maintenance.¬†In total, Carnegie funded some 3,000 libraries located in 47 US states, Canada, Britain, Ireland, Australia, New Zealand, South Africa, the¬†West Indies, and¬†Fiji.¬†

His interest in music also led him to fund the construction of 7,000 church organs. He built and owned Carnegie Hall in New York City. Carnegie was also a large benefactor of the Tuskegee Institute for African-American Education under Booker T. Washington. He helped Washington create the National Negro Business League.

Carnegie died on August 11, 1919, in Lenox, Massachusetts, at his Shadow Brook estate, of bronchial pneumonia. At the time of his death, he had already given away $350,695,653 (equivalent to approximately US$5.49 billion in 2021) of his wealth. After his death, his last $30,000,000 was donated to foundations, charities and pensioners. He was buried at Sleepy Hollow Cemetery in Sleepy Hollow, New York.✪

The Andrew Carnegie Dictum

  • To spend the first third of one’s life getting all the education one can.
  • To spend the next third making all the money one can.
  • To spend the last third giving it all away for worthwhile causes.

Carnegie held that societal progress relied on individuals who maintained moral obligations to themselves and to society. As early as 1868, at age 33, he drafted a memo to himself. He wrote:

The amassing of wealth is one of the worse species of idolatry. No idol more debasing than the worship of money. Man does not live by bread alone. I have known millionaires starving for lack of the nutriment which alone can sustain all that is human in man, and I know workmen, and many so-called poor men, who revel in luxuries beyond the power of those millionaires to reach. It is the mind that makes the body rich. There is no class so pitiably wretched as that which possesses money and nothing else. Money can only be the useful drudge of things immeasurably higher than itself. Exalted beyond this, as it sometimes is, it remains Caliban still and still plays the beast. My aspirations take a higher flight. Mine be it to have contributed to the enlightenment and the joys of the mind, to the things of the spirit, to all that tends to bring into the lives of the toilers of Pittsburgh sweetness and light. I hold this the noblest possible use of wealth.

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