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Andrew Carnegie

By Gail Porter,2014-11-11 00:29
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Andrew CarnegieAndrew

Andrew Carnegie ( /kɑrˈneɪɡi/ kar-NAY-gee, but commonly /ˈkɑrnɨɡi/

    [1]KAR-nə-gee or /kɑrˈnɛɡi/ kar-NEG-ee) (November 25, 1835 August 11,

    Scottish-American industrialist who led the enormous 1919) was a

    expansion of the American steel industry in the late 19th century. He was

    also one of the most important philanthropists of his era.

    Carnegie was born in Dunfermline, Scotland, and emigrated to the United

    States with his parents in 1848. His first job in the United States was as a factory worker in a bobbin factory. Later on he became a bill logger for the owner of the company. Soon after he became a messenger boy. Eventually he progressed up the ranks of a telegraph company. He built Pittsburgh's Carnegie Steel Company, which was later merged with Elbert

    H. Gary's Federal Steel Company and several smaller companies to create U.S. Steel. With the fortune he made from business among others he built Carnegie Hall, later he turned to philanthropy and interests in education, founding the Carnegie Corporation of New York, Carnegie Endowment for

    International Peace, Carnegie Institution of Washington, Carnegie Mellon

    University and the Carnegie Museums of Pittsburgh.

    Carnegie gave most of his money to establish many libraries, schools, and

    universities in the United States, the United Kingdom, Canada and other countries, as well as a pension fund for former employees. He is often

    second-richest man in history after John D. Rockefeller. regarded as the

    Carnegie started as a telegrapher and by the 1860s had investments in

    railroads, railroad sleeping cars, bridges and oil derricks. He built further wealth as a bond salesman raising money for American enterprise in Europe.

    He earned most of his fortune in the steel industry. In the 1870s, he

    founded the Carnegie Steel Company, a step which cemented his name as one

    of the "Captains of Industry". By the 1890s, the company was the largest and most profitable industrial enterprise in the world. Carnegie sold it in 1901 for $480 million to J.P. Morgan, who created U.S. Steel. Carnegie

    devoted the remainder of his life to large-scale philanthropy, with special emphasis on local libraries, world peace, education and scientific research. His life has often been referred to as a true "rags

    to riches" story.

    Contents

    [hide]

; 1 Biography

    o 1.1 Early life

    ; 1.1.1 Railroads

    ; 1.1.2 18601865: The Civil War

    ; 1.1.3 Keystone Bridge Company

    o 1.2 Industrialist

    ; 1.2.1 18851900: Empire of Steel

    ; 1.2.2 1901: U.S. Steel

    ; 1.2.3 18801900: Scholar and activist

    o 1.3 Retirement

    ; 1.3.1 19011919: Philanthropist

    o 1.4 Death

    ; 2 Controversies

    o 2.1 1889: Johnstown Flood

    o 2.2 1892: Homestead Strike ; 3 Philosophy

    o 3.1 Andrew Carnegie Dictum

    o 3.2 On wealth

    o 3.3 Religion and world view

    o 3.4 World peace

    ; 4 Literary references

    ; 5 Quotations

    ; 6 Writings

    ; 7 Legacy and honors

    ; 8 See also

    ; 9 References

    ; 10 Further reading

    o 10.1 Primary sources

    o 10.2 Secondary sources

    ; 11 External links

    o 11.1 Works by Carnegie

    o 11.2 Institutions named after Carnegie

    o 11.3 General interest

    [edit] Biography

    [edit] Early life

    Dunfermline, Scotland Birthplace of Andrew Carnegie in

    Andrew Carnegie was born in Dunfermline, Scotland, in a typical weaver's

    cottage with only one main room consisting of half the ground floor which [2]was shared with the neighboring weaver's family. The main room served [2]as a living room, dining room and bedroom. He was named after his legal [2]grandfather. In 1836, the family moved to a larger house in Edgar Street (opposite Reid's Park), following the demand for more heavy damask from [2]which his father, William Carnegie, benefited. His uncle, George Lauder,

    whom he referred to as "Dod", introduced him to the writings of Robert

    Burns and historical Scottish heroes such as Robert the Bruce, William

    Wallace, and Rob Roy. Falling on very hard times as a handloom weaver and with the country in starvation, William Carnegie decided to move with his family to Allegheny, Pennsylvania in the United States in 1848 for the [3]prospect of a better life. Andrew's family had to borrow money in order to migrate. Allegheny was a very poor area. His first job at age 13 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 [4]wage was $1.20 per week. Andrew's father, William Carnegie, started off working in a cotton mill but then would earn money weaving and peddling linens. His mother, Margaret Morrison Carnegie, earned money by binding shoes.

    [edit] Railroads

Carnegie age 16, with brother Thomas

    In 1850, Carnegie became a telegraph messenger boy in the Pittsburgh [5]Office of the Ohio Telegraph Company, at $2.50 per week, following the

    recommendation of his uncle. His new job gave him many benefits including free admission to the local theater. This made him appreciate Shakespeare's work. 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 quickly learning to distinguish the differing sounds the incoming telegraph signals produced and learned to translate signals by ear, [citation needed]without having to write them down and within a year was promoted

    as an operator. Carnegie's education and passion for reading was given a great 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. His capacity, willingness for hard work, his perseverance, and his alertness soon brought forth opportunities.

    Starting in 1853, Thomas A. Scott of the Pennsylvania Railroad Company

    employed Carnegie as a secretary/telegraph operator at a salary of $4.00 per week. At age 18, the youth began a rapid advancement through the company, becoming the superintendent of the Pittsburgh Division. His employment by the Pennsylvania Railroad Company would be vital to his later success. 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 [6]in particular.

    Scott also helped him with his first investments. Many of these were part of the corruption indulged in by Scott and the Pennsylvania's president, J. Edgar Thomson, which consisted of inside trading in companies that the railroad did business with, or payoffs made by contracting parties "as [7]part of a quid pro quo", as biographer David Nasaw writes. In 1855, Scott

    made it possible for Carnegie to invest $500 in the Adams Express, which

    contracted with the Pennsylvania to carry its messengers. The money was secured by the act of his mother placing a $500 mortgage on the family's $700 home, but the opportunity was only available because of Carnegie's [7][8]close relationship with Scott. A few years later, he received a few

    shares in T.T. 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: (iron, bridges, and rails), Carnegie slowly accumulated

    capital, the basis for his later success. Throughout his later career, he made use of his close connection 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.

    [edit] 18601865: The Civil War

    Before the Civil War, Carnegie arranged a merger between Woodruff's

    company and that of George M. Pullman, the inventor of a sleeping car for

    first class travel which facilitated business travel at distances over 500 miles (800 km). 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.

    In spring 1861, 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 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. Defeat of the Confederacy required vast supplies of munitions, as well

    as railroads (and telegraph lines) to deliver the goods. The war demonstrated how integral the industries were to American success. [edit] Keystone Bridge Company

    In 1864, Carnegie invested $40,000 in Story Farm on Oil Creek in Venango

    County, Pennsylvania. In one year, the farm yielded over $1,000,000 in cash dividends, and petroleum from oil wells on the property sold profitably. The demand for iron products, such as armor for gunboats, cannon, 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 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. Scott and J. Edgar Thomson. He used his connection to the two men to acquire

    Keystone Bridge Company and the rails produced by his contracts for 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 functionsfunctions that Carnegie exploited to [9]his own advantage.

Carnegie, c. 1878

    Carnegie believed in using his fortune for others and doing more than making money. 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

    noons in receiving instruction and in reading systematically! after

    [edit] Industrialist

    [edit] 18851900: Empire of Steel

Bessemer converter, schematic diagram

    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. One of his two great innovations was in the cheap and efficient mass production of steel by adopting and adapting the Bessemer process for steel making. Sir Henry Bessemer had invented the

    furnace which allowed the high carbon content of pig iron to be burnt away

    in a controlled and rapid way. The steel price dropped as a direct result, and Bessemer steel was rapidly adopted for railway lines and girders for buildings and bridges. The second was in his vertical integration of all

    suppliers of raw materials. 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 metal per day. In

    1888, Carnegie bought the rival Homestead Steel Works, which included an

    extensive plant served by tributary coal and iron fields, a 425-mile (685 km) long railway, and a line of lake steamships. Carnegie combined his

    assets and those of his associates in 1892 with the launching of the Carnegie Steel Company.

    By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it. Carnegie's empire grew to include the J. Edgar

    Thomson Steel Works, (named for John Edgar Thomson, Carnegie's former boss

    and president of the Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through Keystone,

    Eads Bridge project supplied the steel for and owned shares in the landmark

    across the Mississippi River at St. Louis, Missouri (completed 1874). This

    project was an important proof-of-concept for steel technology, which marked the opening of a new steel market.

    [edit] 1901: U.S. Steel

    In 1901, Carnegie was 66 years of age and considering retirement. He reformed his enterprises into conventional joint stock corporations as preparation to this end. John Pierpont Morgan was a banker and perhaps

    America's most important financial deal maker. He had observed how efficiently Carnegie produced profit. He envisioned an integrated steel industry that would cut costs, lower prices to consumers, produce in greater quantities and raise wages to workers. To this end, he needed to buy out Carnegie and several other major producers and integrate them into one company, thereby eliminating duplication and waste. He concluded

    United States Steel negotiations on March 2, 1901, and formed the

    Corporation. It was the first corporation in the world with a market capitalization 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. The holdings were incorporated in the United States Steel Corporation, a trust organized by Morgan, and Carnegie retired from business. His steel enterprises were bought out at a figure equivalent to 12 times their annual earnings$480 million (presently,

    $13,409,280,000) which at the time was the largest ever personal commercial transaction.

    Carnegie's share of this amounted to $225,639,000 (presently, $6,303,451,104), which was paid to Carnegie in the form of 5%, 50-year gold bonds. The letter agreeing to sell his share was signed on February 26, 1901. On March 2, the circular formally filing the organization and capitalization (at $1,400,000,0004% of U.S. national wealth at the time)

    of the United States Steel Corporation actually completed the contract. The bonds were to be delivered within two weeks to the Hudson Trust Company of Hoboken, New Jersey, in trust to Robert A. Franks, Carnegie's business secretary. There, a special vault was built to house the physical bulk

    of nearly $230,000,000 worth of bonds. It was said that "...Carnegie never wanted to see or touch these bonds that represented the fruition of his business career. It was as if he feared that if he looked upon them they might vanish like the gossamer gold of the leprechaun. Let them lie safe in a vault in New Jersey, safe from the New York tax assessors, until he was ready to dispose of them..."

    [edit] 18801900: Scholar and activist

    Carnegie continued his business career; some of his literary intentions were fulfilled. He befriended English poet Matthew Arnold and English

    philosopher Herbert Spencer as well as being in correspondence and [10]acquaintance with most of the U.S. Presidents, statesmen, and notable [11]writers.

    baths for the people of his hometown Carnegie erected commodious swimming-

    in Dunfermline in 1879. In the following year, Carnegie gave $40,000 for the establishment of a free library in Dunfermline. In 1884, he gave

    Bellevue Hospital Medical College (now part of New York $50,000 to

    University Medical Center) to found a histological laboratory, now called

    the Carnegie Laboratory.

    In 1881, Carnegie took his family, including his 70 year-old mother, on a trip to the United Kingdom. They toured Scotland by coach, and enjoyed several receptions en-route. The highlight for them all was a triumphal return to Dunfermline, where Carnegie's mother laid the foundation stone of a Carnegie Library for which he donated the money. Carnegie's criticism of British society did not mean dislike; on the contrary, one of Carnegie's ambitions was to act as a catalyst for a close association between the

    English-speaking peoples. To this end, in the early 1880s, he purchased numerous newspapers in England, all of which were to advocate the abolition of the monarchy and the establishment of "the British Republic". Carnegie's charm aided by his great wealth meant that he had many British friends, including Prime Minister William Ewart Gladstone.

    In 1886, Carnegie's younger brother Thomas died at age 43. Success in the business continued, however. While owning steel works, Carnegie had purchased at low cost the most valuable of the iron ore fields around Lake

    Superior. The same year Carnegie became a figure of controversy. Following his tour of the UK, he wrote about his experiences in a book entitled An

    . Although still actively involved in American Four-in-hand in Britain

    running his many businesses, Carnegie had become a regular contributor to numerous magazines, most notably the Nineteenth Century, under the

    editorship of James Knowles, and the influential North American Review,

    led by editor Lloyd Bryce.

In 1886, Carnegie wrote his most radical work to date, entitled Triumphant

    . Liberal in its use of statistics to make its arguments, the Democracy

    book argued his view that the American republican system of government was superior to the British monarchical system. It gave a highly favorable

    and idealized view of American progress and criticized the British royal family. The cover depicted an upended royal crown and a broken scepter.

    The book created considerable controversy in the UK. The book made many Americans appreciate their country's economic progress and sold over 40,000 copies, mostly in the U.S.

    In 1889, Carnegie published "Wealth" in the June issue of the North

    . After reading it, Gladstone requested its publication American Review

    in England, where it appeared as "The Gospel of Wealth" in the Pall Mall

    . The article was the subject of much discussion. Carnegie argued Gazette

    that the life of a wealthy industrialist should comprise two parts. The first part was the gathering and the accumulation of wealth. The second part was for the subsequent distribution of this wealth to benevolent causes. The philanthropy was key to making the life worthwhile. Carnegie was also known to be a great journalist. This came about from his experience in constantly writing to newspapers and to their editors. His knowledge in reading newspapers stems from a habit from his [12]childhood. He also would go on to publish three books on travel. One of them entitled "Round the world" he began writing while traveling [13]England and Scotland.

    In 1898, Carnegie tried to arrange for independence for the Philippines. As the end of the Spanish American War neared, the United States bought

    the Philippines from Spain for $20 million. To counter what he perceived as imperialism on the part of the United States, Carnegie personally offered $20 million to the Philippines so that the Filipino people could [14]buy their independence from the United States. However, nothing came

    of the offer. Carnegie also opposed the annexation of Cuba by the United

    States and in this, was successful with many other conservatives who founded an anti-imperialist league that included former presidents of the

    United States, Grover Cleveland and Benjamin Harrison, and literary [15][16][17]figures like Mark Twain.

    [edit] Retirement

    [edit] 19011919: Philanthropist

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