Andrew Carnegie
Andrew Carnegie was a Scottish-American industrialist and philanthropist. Carnegie led the expansion of the American steel industry in the late-19th century and became one of the richest Americans in history.
He became a leading philanthropist in the United States, Great Britain, and the British Empire. During the last 18 years of his life, he gave away around $350 million, almost 90 percent of his fortune, to charities, foundations and universities. His 1889 article proclaiming "The Gospel of Wealth" called on the rich to use their wealth to improve society, expressed support for progressive taxation and an estate tax, and stimulated a wave of philanthropy.
Carnegie was born in Dunfermline, Scotland. He immigrated to what is now Pittsburgh, Pennsylvania, with his parents in 1848 at the age of 12. Carnegie started work in a cotton mill and later as a telegrapher. By the 1860s he had investments in railroads, railroad sleeping cars, bridges, and oil derricks. He accumulated further wealth as a bond salesman, raising money for American enterprise in Europe. He built Pittsburgh's Carnegie Steel Company, which he sold to J. P. Morgan in 1901 for $303,450,000; it formed the basis of the U.S. Steel Corporation. After selling Carnegie Steel, he surpassed John D. Rockefeller as the richest American of the time.
Carnegie devoted the remainder of his life to large-scale philanthropy, with special emphasis on building local libraries, working for world peace, education, and scientific research. He funded Carnegie Hall in New York City, the Peace Palace in The Hague, founded the Carnegie Corporation of New York, Carnegie Endowment for International Peace, Carnegie Institution for Science, Carnegie Trust for the Universities of Scotland, Carnegie Hero Fund, Carnegie Mellon University, and the Carnegie Museums of Pittsburgh, among others.
Biography
Early life
Andrew Carnegie was born to William Carnegie and Margaret Carnegie in Dunfermline, Scotland, in a typical weaver's cottage with only one main room. It consisted of half the ground floor, which was shared with the neighboring weaver's family. The main room served as a living room, dining room and bedroom. He was named after his paternal grandfather. William Carnegie had a successful weaving business and owned multiple looms.In 1836, the family moved to a larger house in Edgar Street, following the demand for more heavy damask, from which his father benefited. Carnegie was educated at the Free School in Dunfermline, a gift to the town from philanthropist Adam Rolland of Gask.
Carnegie's maternal uncle, Scottish political leader George Lauder Sr., deeply influenced him as a boy by introducing him to Robert Burns' writings and historical Scottish heroes such as Robert the Bruce, William Wallace, and Rob Roy. Lauder's son, also named George Lauder, grew up with Carnegie and later became his business partner in the United States.
When Carnegie was 12, his father had fallen on tough times as a handloom weaver. Making matters worse, the country was in starvation. His mother helped support the family by assisting her brother and by selling potted meats at her "sweetie shop", becoming the primary breadwinner. Struggling to make ends meet, the Carnegies decided to borrow money from George Lauder, Sr. and move to the United States in 1848 for the prospect of a better life. They headed to Allegheny, Pennsylvania, where they heard there was a demand for workers. Carnegie's emigration to America was his second journey outside Dunfermline. The first was a family outing to Edinburgh to see Queen Victoria.
In September 1848, Carnegie and his family arrived in Allegheny. Carnegie's father struggled to sell his product on his own. Eventually, the father and son both received job offers at Anchor Cotton Mills, a Scottish-owned facility. Carnegie's first job in 1848 was as a bobbin boy, changing spools of thread in a cotton mill 12 hours a day, 6 days a week in a Pittsburgh cotton factory. His starting wage was $1.20 per week.
His father soon quit his position at the cotton mill, returning to his loom, and was again removed as a substantial breadwinner. But Carnegie attracted the attention of John Hay, a Scottish manufacturer of bobbins, who offered him a job for $2.00 per week.
In his autobiography, Carnegie writes about the hardships he had to endure with this new job:
Telegraph
In 1849, Carnegie became a telegraph messenger boy in the Pittsburgh Office of the Ohio Telegraph Company, at $2.50 per week following the recommendation of his uncle. He was a 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 different sounds the incoming telegraph signals produced. He developed the ability to translate signals by ear, without using the paper slip.Within a year he was promoted to an operator. Carnegie's education and passion for reading were given a boost by Colonel James Anderson, who opened his personal library of 400 volumes to working boys each Saturday night. Carnegie was a consistent borrower and a "self-made man" in both his economic development and his intellectual and cultural development. He was so grateful to Colonel Anderson for the use of his library that he "resolved, if ever wealth came to me, that other poor boys might receive opportunities similar to those for which we were indebted to the nobleman". His capacity, his willingness for hard work, his perseverance, and his alertness soon brought him opportunities.
Railroads
Starting in 1853, when Carnegie was around 18 years old, Thomas A. Scott of the Pennsylvania Railroad employed him as a secretary/telegraph operator at a salary of $4.00 per week. Carnegie accepted the job with the railroad as he saw more prospects for career growth and experience there than with the telegraph company. When Carnegie was 24 years old, Scott asked him if he could handle being superintendent of the Western Division of the Pennsylvania Railroad.On December 1, 1859, Carnegie officially became superintendent of the Western Division. He hired his sixteen-year-old brother Tom to be his personal secretary and telegraph operator. Carnegie also hired his cousin, Maria Hogan, who became the first female telegraph operator in the country. As superintendent, Carnegie made a salary of $1500 a year. His employment by the Pennsylvania Railroad would be vital to his later success. The railroads were the first big businesses in America, and the Pennsylvania was one of the largest. Carnegie learned much about management and cost control during these years, and from Scott in particular.
Scott also helped him with his first investments. Many of these were part of the corruption indulged in by Scott and the president of the Pennsylvania Railroad, John Edgar Thomson, which consisted of inside trading in companies with which the railroad did business, or payoffs made by contracting parties "as part of a quid pro quo". In 1855, Scott made it possible for Carnegie to invest $500 in the Adams Express Company, which contracted with the Pennsylvania 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 available only because of Carnegie's close relationship with Scott. A few years later, he received a few shares in Theodore Tuttle Woodruff's sleeping car company as a reward for holding shares that Woodruff had given to Scott and Thomson, as a payoff. Reinvesting his returns in such inside investments in railroad-related industries, Carnegie slowly accumulated capital, the basis for his later success. 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 stakes in his enterprises.
1860–1865: American Civil War
Before the American Civil War, Carnegie arranged a merger between Woodruff's company and that of George Pullman, the inventor of the sleeping car for first-class travel, which facilitated business travel at distances over. The investment proved a success and a source of profit for Woodruff and Carnegie. The young Carnegie continued to work for Pennsylvania's Tom Scott and introduced several improvements in the service.In the spring of 1861, Carnegie joined the U.S. Military Telegraph Corps and 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 open the rail lines into Washington D.C. that the rebels had cut; he rode the locomotive pulling the first brigade of Union troops to reach Washington D.C. 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. 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.
The defeat of the Confederacy required vast supplies of munitions, with railroads and telegraph lines being required to deliver them efficiently. The war demonstrated how integral the industries were to Union success.
Keystone Bridge Company
In 1864, Carnegie was one of the early investors in the Columbia Oil Company in Venango County, Pennsylvania. In one year, the firm yielded over $1 million in cash dividends, and petroleum from oil wells on the property sold profitably. 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 mill, and 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 his energies to the ironworks trade. Carnegie worked to develop several ironworks, eventually forming the Keystone Bridge Works and the Union Ironworks, in Pittsburgh. Although he had left the Pennsylvania Railroad Company, he remained connected to its management, namely Thomas A. Scott and J. Edgar Thomson. 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 in his businesses to Scott and Thomson, 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, which Carnegie exploited to his advantage.
Carnegie, through Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project across the Mississippi River at St. Louis, Missouri. This project was an important proof-of-concept for steel technology, which marked the opening of a new steel market.
Carnegie believed in using his fortune for others and doing more than making money. In 1868, at age 33, he wrote: