A product of Scotland. A product of the United States. Born into a poverty in a small cottage in Dunfermline, to becoming regarded as the richest man in the world towards the end of the century. The mighty Andrew Carnegie is the ultimate peoples champion.
Andrew Carnegie was born on 25th November 1835 in Dunfermline, Fife. Father William Carnegie was a weaver (textile worker), while mother Margaret Carnegie was a shoemaker. Born into a one-bedroom cottage, the young Carnegie would be greatly educated by his parents on the likes of Robert the Bruce, William Wallace, and Robert Burns. Andrew would go on to gain a great love for books at an early age, and the storytelling of his father was likely influential in that.
At the age of 8. Andrew began attending school- the Rolland School on Priory Lane to be exact. It was a free school giving as a gift to the town by Adam Rolland, a Scottish philanthropist who founded the Royal Society of Edinburgh. It was a school that applied the Lancasterian system, which is a christian method of practise – focusing on discipline, morals and decorum. Children would be expected to follow a code of command, while class registers (rare in those times) were also strictly introduced. Andrew and his classmates were classified in the school system according to their ability, with Andrew always being in the higher class.
On school mornings, Andrew would have the responsibility of collecting the family’s daily water. He was a bit of a rebel in this, refusing to abide by the system that the women at the well had been using for years. This understanding would see each women place their buckets in a queue-like form every evening. Then in the morning the women would take their place in the queue, based upon where there bucket was positioned. A young Andrew had other ideas though – and never once put his bucket down the night before, always simply skipping the queue in the mornings. However this way of life for Andrew was about to come to an end.
The Carnegie family continued to struggle to put bread on the table. William Carnegie led an very active life in the Scottish social movements at the time – though his frustrations with this activism, as well as his continued poverty, led William to move his family to the United States- Allegheny City, Pennsylvania. The Carnegie family had relatives in the area, and had borrowed some money for friends to fund the move. After spending several days travelling, the Carnegie family arrived safely, and disease-free, in New York in late 1848.
Andrew Carnegie would often speak about his overwhelming excitement at arriving in New York. The then 13-year-old was taken aback by the bustling, vibrant nature of the city. This enthusiasm, rather than nerves, is perhaps what sets Carnegie apart from the rest. More days of travelling was to come, as the young family made their way across several states into Pennsylvania.
The New World
Immediately a 13-year-old Andrew and his father began working at a local cotton factory. The factory was under the ownership of fellow Scottish immigrants- it could potentially be that they had met on their travels. It was no easy job either- working as a bobbin boy 12-hours per day, 6 days per week. For Father William his slightly higher job sadly did not last very long, and he returned to attempting to make it self-employed, but as usual he was frustrated by the lack of work. This led a young Andrew to being an early breadwinner for his family. The teenage saint did not meet these extra responsibilities with anxiety either. Soon moving up to a (slightly) higher paid job as a telegraphy messenger, his entrepreneurial skills would quickly be on display.
Carnegie was not in line for any significant training opportunities at the local telegraph company, so he taught himself how to master the better job. He would master the art of Morse Code, and became one of only 3 people on the country to be able to transcribe messages by ear- which in turn made him one of the wanted workers in the United States. Times would change fast for Andrew, after meeting a man named Thomas A. Scott. The library hero would go on to become secretary to the Pennsylvania Railroad chief- and it was this relationship with Scott that would later greatly influence his business progression.
Andrew Carnegie at this point was beginning to realise the true importance of education. A local in Allegheny, James Anderson, would open up his personal library after school- so that the children could read and learn for free. Andrew Carnegie was one of those children that benefited, and this is something that he never forgot about. The later philanthropist he became would be much inspired by this experience.
Devastating news was soon to come for the library chief- William Carnegie would pass away in 1855. This is something that deeply affected Andrew. It was particularly the poverty aspect of his fathers life. A man who he admired greatly, and often felt deserved much better. Though in truth, he got what he deserved- he got what he wanted. He was part of a significant working class movement in Scotland, and strongly continued his working class principles throughout the rest of his life.
This had a profound effect of his son. It could easily be argued that without his fathers values, particularly for equality and supporting those less fortunate, that Andrew Carnegie would never have become the father of philanthropy. Thus William Carnegie ultimately achieved his goal of helping those less fortunate than himself.
The Master Entrepreneur
It was until the civil war in the United States (1861-65) broke out that Carnegie began make great strides forward in business. Thomas Scott, whom Andrew was secretary to, would be called up to serve in the transportation area of the war. Scott would bring his trusted secretary with him, and Carnegie would go on to primarily work in the military telegraph during the war. Following this, Thomas Scott did not return to the Pennsylvania Railroad, and his previous position of superintendent was taken up by Andrew. He primarily operated on two basic business rules. Firstly, the profits would take care of themselves if the business costs were kept at a minimum. This would primarily be achieved through discipline and organisation. The second rule was the principle that managers who were greatly gifted would remain more valuable to him than the mills they ran.
Charles M. Schwab could be considered a success story of this Carnegie tactic. The chief of Bethlehem Steel originally worked as an engineer at the steelworks of Carnegie Company. Achieving promotion to manager, the watching eyes of Carnegie were soon on Schwab. Much like the star-spangled Scotchman himself, he would become a railroad superintendent. He is considered a very influential figure- particularly in the history the manufacturing industry in the United States.
A quote from Andrew Carnegie further emphasises rule number two.
“The secrets of success lies not in doing your own work, but in recognising the best person to do it”Rule Number Two?
For the next few years the fifer would invest heavily in small iron factories, and selling bonds of railroad companies. Often returning to the UK for profitable sales of American Railroad Bonds. An investment in the Sleeping Car Company would follow, and this particular investment would be a clear indication of what was to come. Initially investing only $200, he would soon be making a monstrous $5,000 every year from it. This new wealth allowed Andrew to invest in the oil corporation Keystone Bridge Company, as his empire now began to grow rapidly.
Andrew Carnegie was now a highly intelligent, and skilful businessman – making a significant presence in the business community. Amongst with his other works he was a major influence in the creation of the Keystone Bridge Works, and played a key role in the continued business of ironwork. Investing heavily in H.C Frick Corp- the owner of that cooperation, Henry Frick, would later become a business partner of his- and chairman of the Carnegie Company.
“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!”Andrew Carnegie
Address To Andrew
The following is a letter that Andrew Carnegie wrote to himself while in New York in late 1868.
“Thirty-three and an income of $50,000 per annum. By this two years I can so arrange all my business as to secure at least 50,000 per annum. Beyond this never earn — make no effort to increase fortune, but spend the surplus each year for benevolent purposes. Cast aside business forever except for others. Settle in Oxford and get a thorough education, making the acquaintance of literary men this will take three years active work — pay especial attention to speaking in public. Settle then in London & purchase a controlling interest in some newspaper or live review & give the general management of it attention, taking a part in public matters especially those connected with education & improvement of the poorer classes. Man must have an idol — the amassing of wealth is one of the worst species of idolatry. No idol 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 35, but during the ensuing two years, I wish to spend the afternoons in securing instruction, and in reading systematically.”
Empire of Steel
Following the civil war, the saint of libraries envisioned that steel would eventually replace the current manufacturing dominance of Iron, particularly in replacing the rail destroyed by the war. Subsequently, he would quickly organise a steel rail company, in 1873. Desperate to raise funds for this promising new venture, he would invest heavily on a farm- known as Story Farm. The farm was located on Oil Creek, Venango County. Petroleum was the principal product, and the sale of this in the first couple of years would lead the fifer to receive an incredible return of profits. One million dollars in cash was the return, on what was a $40,000 investment.
Following this great success, the bard would sell all of his assets, and focus his full focus on steel- this included his mother mortgaging the family house. He began putting together what would be known as the Carnegie Steel Company, opening his first steel plant in 1875. Carnegie would go on to receive a significant order – Pennsylvania Railroad where looking for the mass production of steel rails, and had turned to Carnegie for help. With Carnegie Steel fully up and running, Andrew would go on to create his steel empire the following decade.
With a great depression sweeping through the United States in the 1880s, Carnegie Steel would greatly capitalise. The company would would go on their own sweepstake- gobbling up financially torn steel companies all over the country. This is what led Andrew Carnegie, to at one point, holding the largest empire (and fortune) ever held by a single individual in the United States History, overtaking Rockefeller. He is recognised as (at least) the third richest person that ever lived.
The Gospel of Wealth
Released in 1889, Andrew Carnegie would issue a very public call to fellow businessman, to follow his lead. Carnegie would suggest that these individuals have a moral obligation – to improve the lives of those less fortunate than themselves. According to the Gospel of Wealth, this is predominantly done by wealthy individuals giving away all of their ‘excessive wealth’ – with that wealth being put back into the community to improve society.
Andrew insisted that the wealthy should be distributing their riches responsibly. He believed that the irresponsible spending of the rich was only encouraging “the slothful, the drunken, and the unworthy”. The article is regarded to be the foundation for the principles of modern philanthropy.
Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.Andrew Carnegie
Obviously we can’t take our money with us beyond the veil. Andrew Carnegie then put forward his three ways of putting this unnecessary wealth back into society – left behind to family members; distributed during lifetime; or donated to a public trust after death. Its worth noting that he himself was not overly keen on charity donations. Instead, he had a preference of being actively involved in the distribution of the money – believing it was the only way to maximum the use of the funds.
The Dunfermline hero was not a big fan of the tradition of leaving your money to your children and grandchildren- believing this was what was leading a people sitting on large personal fortunes. He instead believed that this wealth should benefit society- the people.As previously mentioned, the number two rule of Andrew Carnegie was about valuing talented managers, and in 1892, as he began taking steps back from business, one of his biggest controversies took place. Lets have a look at The Homestead Strike.
Controversies- The Homestead Strike
The Saint of libraries was anti-union, and he would often curse unions for their interference on one of his main business plans – keeping costs at a bare minimum. One of the notable unions, that was particularly disdained by Carnegie, was the Amalgamated Association of Iron and Steel Workers. Many of their members worked at the Homestead Steel Mill in Pittsburgh, owned by Carnegie and overseen by Henry Frick. Frick was seeking to lower wages for the workers at the mill, having previously increased their hours, he was given the full authority over proceedings by Carnegie, who was back in Scotland at the time. The main obstacle in Frick’s way was the union. As the contract of agreement, between the union and the homestead mill, was coming to an end in mid-1893, Frick seen his opportunity to crush their authority. Proposals were first put forward to the union to lower the wages of the workers – which was instantly rejected. Frick then decided to stand toe-to-toe with the union, and reduce the wages anyway. This led to a war. Determined not to back down, Frick made moves for nonunion workers to replace the striking workers at the mill.
Henry Frick had the premises of the Homestead mill surrounded by large fences – protected with barbed wire. A detective agency, known as Pinkerton, were called in to protect the area surrounding the mill. This was common at this time in the United States – wars (not strikes) breaking out between strikers and the companies, and the Pinkerton detective agency were notorious for their previous involvements in strikes. Thus the striking workers were aware of what the Pinkerton agents arrival meant – that non-union workers were coming to replace them. Subsequently they charged the plant, and a 12-hour battle ensued. 10 people in total died in the riots. Removing the Pinkerton, the workers would successfully annex and occupy the mill.
Their victory was not to be enjoyed for long though- Pennsylvania chief, Robert Pattison, would soon come to the rescue of Frick. Thousands of soldiers from the National Guard would be sent in to quickly end the troubles. The strike was to then come to an abrupt end – with the Amalgamated Association of Iron and Steel Workers dissolving in the aftermath. Andrew Carnegie was on the end of much public backlash- largely due to his lack of interference.
Carnegie maintained that he had absolutely no control over the business, and Frick was in a position of complete authority. Andrew Carnegie strongly believed that you are 100% responsible for your life. It was one of his key principles, and this is a man who very much stuck to those principles. However, maybe now we are looking at a conflict of principles. Maybe Carnegie choose to stick to his personal principles by not getting involved in any way, shape or form- but at the same time sticking to his business principles, remembering rule number two…
Mr Morgan buys his partners, I grow my own.Andrew Carnegie
The Patron of Libraries
In 1901, Andrew Carnegie began taking significant steps back from business. The focus now was to spend the money that he had earned. In that year the Carnegie Company was sold to U.S Steel, for an incredible $500 million (around $15 billion today). The man himself received around half ($250m/$7.5b). This made Andrew Carnegie the richest man in the world, and the biggest spending spree in history was about to take place.
First and foremost, the older Andrew Carnegie could never possibly forget of his times as a younger man in Allegheny – where he was given opportunities to read for free, a time in which Carnegie considers to be his true education. James Anderson would not have known it at the time, but he would effectively give birth to the Patron Saint of Libraries. This invaluable learning, along with the success of the library he had built in Dunfermline, back in 1887, would lead to libraries being the forefront of his charity.
Rather than focusing on building schools, colleges and other institutions of education, Carnegie instead did what he was long famous in business for- eliminating the middle man. In this case it was the various institutions of education, and he aimed directly to the people by opening more than 3,000 free public libraries (the majority across the English-speaking world). It was genius. What this was not though, was any kind of attack on formal education. This too was clearly very important to him.
“Education gives a man, who really absorbs it, higher tastes and aims than just the acquisition of wealth, and a world to enjoy, into which the mere millionaire cannot enter”Andrew Carnegie
It should come as no surprise then that the people responsible for this education were prioritised. Shocked at the poor pay and support of teachers, and concerned of the increasingly poor standards, he would organise the Carnegie Foundation for the Advancement of Teaching (and later the Carnegie Trust for the Universities of Scotland).
Over the remaining 20 years of his life, Andrew Carnegie would go on to give away around $350 million, which was around 90% of his entire fortune. Large scale investments in education were a priority of Carnegie. Significant investments were made in progressing the fields of teaching, including mass funding for universities. Carnegie Mellon University in the United Sates was founded by the star-spangled Scotchman, while he is also be considered a founding father of the University of Birmingham.
Carnegie also had a major issue in his personal life with slavery, regarding it as a ‘terrible flaw’ in the society of the United States. Subsequently he gave very kindly and generously to such African-American causes, including the Tuskegee Institute, aswell as supporting black leaders of the anti-slave movement. Andrew always maintained his working-class roots, and this was influential in his apparent empathy towards the black communities in particular.
The Carnegie Trust of Scotland, Carnegie Institute of Technology, Carnegie Institution for Science, Carnegie UK Trust, Carnegie Corporation of New York and the many other Carnegie institutions only serve as a reminder of why Andrew Carnegie was such an important figure – not just in his own time, but in ours as well.
The End of Andrew Carnegie
Andrew Carnegie was suffering from poor health in his later years. This can be expected from a man who had grown up in poverty, and had predominantly been industrial-based during his long career. In 1919, after spending nearly 20 years as full-time philanthropist, the life of Andrew Carnegie came to an end on August 11, 1919. He was subsequensubsequently buried in Sleepy Hollow Cemetery in New York.
Andrew Carnegie played to win at all costs, though was far more than a ruthless businessman. His work was to ultimately increase the opportunities for the poor and disadvantaged, like he once was himself- and the near 5,000 Carnegie Free Libraries across the world today serves as testament to his character. Born into poverty in Dunfermline to becoming the richest man on the planet- dying in gracefulness in the United States as a founding father of modern philanthropy. The poster boy of the later concept of the American Dream, the Star Spangled Scotchman’s life is the greatest rags-to-riches story ever told.
Do your duty and a little more, and the future will take care of itself.Andrew Carnegie
Andrew Carnegie Gallery
All gallery photos courtesy of loc.gov and commons.m.wikimedia.org. All other photos on this page are from carnegielibraries.org and Library of Congress
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