Titans of Industry: Andrew Carnegie

Next up in this study of iconic American industrialists of the Gilded Age is the steel magnate, Andrew Carnegie. He was a Scottish immigrant who exemplified the pursue of the American dream in the land of the free-market. He displayed remarkable business ambition at an early age and was able to capitalize on the railroad and steel industries. He was the first business man who was able to efficiently mass produce steel which lead to the building of bridges and skyscrapers. He is recorded as the 3rd wealthiest American in history and was also a leading philanthropist, giving much of his wealth to charities and foundations.


Early Life of Andrew

Andrew Carnegie was born in a small cottage in Dunfermline, Scotland in 1835. His parents were working class weavers enduring hard times in their country. As a kid Andrew was inspired by his uncle and read about historical Scottish heroes such as William Wallace and Robert the Bruce. During the 1840s starvation became a serious issue in Scotland, and the Carnegie family decided to migrate to the United States in pursue of a better life. They arrived to the city of Allegheny, Pennsylvania in 1848.

Both Andrew and his father got jobs in the local cotton mills, where Andrew began to excel as a bobbin boy, changing spools of thread. He was eventually recruited for a higher paying position and in 1849 he landed a job as a telegraph messenger boy for a Pittsburgh Telegraphy Company. He displayed keen interest in the telegraph business and within a year he was promoted to becoming an operator. He continued to display a strong work ethic and sharp intelligence which he gathered from the many books he read. By 1853 his big break came when he was recruited by the railroad business magnate, Thomas A. Scott, who offered Andrew a position as secretary for his Pennsylvania Railroad Company.

Railroad Business

By 1859 Andrew continued to climb the ranks of Thomas Scott's business and soon had a post of his own as the superintendent of the western division of the Pennsylvania Railroad Company. Andrew continued to learn from his business mentor, Thomas Scott, while managing his own affairs. He brought on several members of his family to help him manage his post, and also began making investments in other businesses.

Carnegie continued to display great business ambition in the railroad business by helping improve the service as well as partnering with other companies to compete with Vanderbilt's Railroad empire. By the outbreak of the Civil War, the Pennsylvania Railroad Company became a critical tool of the union army. Thomas Scott became Secretary Assistant of War, and Carnegie managed the companies distribution of military supplies and telegraphic messages. The railways gave the Union Army a key logistical advantage that helped defeat the Confederate Army.


Keystone Bridge Company

During the outbreak of the war, Carnegie began to notice a rising demand for iron and saw it as a new booming market. Iron products were needed for military armor, gunboats, cannons, shells, and other various reasons. Carnegie decided to leave the railroad business and fully invest in the steel industry that was center in Pittsburgh. He eventually established his own steel rolling mill, and used his partnership with Thomas Scott's railroad business to get a fast edge above the competition.

In 1865 he established the Keystone Bridge Company which became one of the early leaders in producing steel bridges. The company's major breakthrough came when Thomas Scott commissioned a massive bridge be built across the Mississippi River, which lead to the construction of the Eads Bridge in 1874. This bridge became an architectural breakthrough, and became the new standard for major steel bridges. Carnegie was able to use this success to catapult his efficient steel production business.


Carnegie Steel Company

Andrew Carnegie did not marry until the age of 51, in 1886 after his mother passed away. His steel production continued to boom and in 1892 he founded the Carnegie Steel Company. He was quickly able to get an edge over the rest of the competition for his efficient business techniques. This included the use of the Bessemer converter which made it quicker to mass produce steel. Also was his system of vertical integration in which he supplied all the resources his company needed. This ultimately made for a more cost effective business flow. By 1889 the US economy was producing more steel than the UK, much of this was owned by Carnegie's steel empire.

While Carnegie made significant contributions to the American economy he is certainly not free of controversy. Two instances in specific somewhat tarnished his legacy on the handling of his workers. First there was the Johnstown Flood of 1889, in which a poorly constructed dam broke releasing tons of water onto the town of Johnstown, PA killing 2,209. Much of the blame for this catastrophe fell on Carnegie and his partner Henry Clay Frick for their newly developed cottage club near the dam.

The second instance was the Homestead Strike of 1892, which was a labor union confrontation that was poorly handled. Carnegie left the management of this crisis to one of his partners Henry Clay Frick. Frick was a notable for crushing labor unions, and did not want to compromise with the steel workers asking for wage increases. In response the workers barricaded themselves in front of the steel mills, halting their replacements in a tense standoff. Herny Frick brought in armed Pinkerton agents to squash the blockade. The final result was a massacre, killing 10 and injuring many more. To this day it is considered one of the most violent labor disputes in American history.


Establishment of US Steel

By 1901 Carnegie was ready for retirement at the age of 66, and sold his steel empire to JP Morgan which gave way to US Steel. This buy-out remains to this day one of the largest industry takeovers in American history. The company became the first ever billion dollar corporation, even surpassing Rockefeller's Standard Oil empire. During this time there was a boom of skyscrapers in cities such as Chicago and New York provided by US Steel. Carnegie still remained a board member, and was now able to enjoy a life of leisure while becoming one of the 2nd richest Americans in history (behind only Rockefeller).

Carnegie spent his final years as a notable philanthropist, donating large sums of money to charities and public institutions. He was a notable scholar, activist, and advocate for the arts in his retirements. He helped fund over 3000 libraries as well as numerous schools, universities, museums, and so forth. One of his most iconic buildings is his musical venue Carnegie Hall, built in 1891 as a homage to his appreciation of music. It remains to this day one of the most prestigious venues for classical or popular musical performances. Carnegie died in 1919 at the age of 83 and gave his remaining 30 million to charity.