The Cyclopædia of American Biography/Carnegie, Andrew

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The Cyclopædia of American Biography  (1918) 
James E. Homans, editor
Carnegie, Andrew

CARNEGIE, Andrew, manufacturer, financier, philanthropist, b. in Dunfermline, Scotland, 25 Nov., 1835, son of William and Margaret (Morrison) Carnegie. His father was a weaver of fine damasks, taking the materials from merchants and working them up on his own loom at home. The introduction of steam-looms and the extension of the factory system put him out of work; and in 1848, with his wife and two sons — Andrew, aged thirteen, and Thomas, six — he migrated to America, settling in Pittsburgh, where they had relatives. Andrew Carnegie received scant early schooling, and that before he was twelve years of age. The father found work in the Blackstock Cotton Mill, Allegheny City, where Andrew presently joined him as bobbin-boy at $1.20 a week. To their earnings were added the small sums which the mother could earn taking in washing and binding boots for the father of Henry Phipps who lived next door. At the age of fourteen Andrew secured a position at $3.00 a week in a bobbin-turning shop, firing a furnace in the cellar, and assisting in running a small engine. Shortly afterward he was made a bill clerk in the factory. At the age of fifteen he left to become a messenger boy for the Ohio Telegraph Company, and later, having learned telegraphy, became an operator, at $450.00 a year. By assiduous attention to duty, he was rewarded in 1854, when he was nineteen, with the position of private secretary to Thomas A. Scott, then superintendent of the western division of the Pennsylvania Railroad Company. He became Scott's protégé, and to this fact may be attributed a large part of his subsequent prominence in the business world. His pay was only $50.00 a month; but being secretary to the most influential railroad man in Pennsylvania afforded him peculiar advantages, leading him to engage in many successful speculative ventures. For the first of these, the purchase of ten shares of Adams Express Company stock for $600.00, he raised $500.00 by a mortgage on his mother's home, and the remainder was lent by Mr. Scott. The latter also gave him an interest in the Woodruff Sleeping Car Company and the Columbia Oil Company, which are known to have been the basis of his fortune. He also had interests in a company formed to build telegraph lines along the Pennsylvania Railroad; in a project for establishing a sutler's business in soldiers' camps; in a horse-trading concern, in connection with General Eagan, for the supply of cavalry mounts to the government; in a bridge-building company; in a locomotive works; in the Duck Creek Oil Company; Birmingham Passenger (horse-car) Railroad; in the Third National Bank of Pittsburgh; in the Pittsburgh Grain Elevator; in the Citizens' Passenger Railroad; in the Dutton Oil Company, and many others. By 1863 his speculative activities had netted him considerable capital. In that year, also, he was promoted to Scott's old position as local superintendent of the Pennsylvania Railroad, with offices at the Outer Depot, Pittsburgh, and with his brother, Tom, nine years his junior, as his assistant. His entry into the iron business occurred in 1865, when he and Thomas N. Miller, his most intimate friend, organized the Cyclops Iron Company. It was intended as a rival mill to the Kloman-Phipps Iron City Forges, but through the inexperience of its projectors proved a failure. Carnegie found himself in the iron business more by accident than preference, and the future iron king reproached Miller in a letter for getting him in the “most hazardous enterprise I ever expect to have anything to do with.” In fact, his success in the speculative field had inspired him with the desire for a financial career. However, he extricated himself. The year before he had furnished his brother Tom the money, $8,925, with which to purchase a one-sixth interest in the Kloman-Phipps mill; and through Tom's persuasiveness he succeeded in consolidating the latter works with the Cyclops concern. Kloman was a mechanical genius, and his mill had shown steady growth since its organization as a small forge in 1857; and at the beginning of 1865 it had increased its capital from $60,000 to $150,000. Thenceforward the two mills, organized as the Union Iron Mills and capitalized at $500,000, were known as the Upper and Lower Union Mills, and are so known today. The Civil War was then drawing to a close, causing a great loss of government business, and involved the finding of new markets and the making of other kinds of goods. During this transition period the company was saved from failure on more than one occasion by Miller, the wealthiest of the partners, frequently loaning the money to pay the workmen's wages. Carnegie resigned his railroad position in this year, and he and Phipps went to Europe on a nine-months' walking tour. On their return in the spring of 1866, Phipps assumed the financial management of the company, and Carnegie, in the role of salesman, essayed to create an outlet for their product. In this capacity, which constituted his principal duties during his long connection with the iron industry, he displayed rare resourcefulness. He immediately procured profitable orders through a connection he had formed with the bridge-building firm of Piper and Shiffler. In 1865 he had promoted the reorganization of this company and incorporated it as the Keystone Bridge Company, with a capital of $300,000; and his principal interest in the company was given to him for promoting the project. The Union Mills, with the sustenance thus furnished by the Keystone Bridge Company, together with the general revival of the iron trade throughout the country, entered upon an era of prosperity, and Mr. Carnegie now revised his former opinion that the iron business is a “most hazardous enterprise.” His optimism, in fact, inspired him with a desire to gain control of the company. This he accomplished in the next twenty years by a series of “ejectures,” as he termed them, of partners. His first victim was his friend Miller, in 1867. Carnegie effected it by depreciating the value of the company to Miller, to whom he wrote that he would like to sell his stock at $27.50 a share. Miller sold his at $32.00 a share supposedly to David A. Stewart, but when the sale was finally made the purchaser proved to be Andrew Carnegie himself. This gave him 39 per cent, of the outstanding shares. The firm was reorganized in 1870 under the style of Kloman, Carnegie and Company, and constructed the first Lucy furnace, so called after the wife of Thomas Carnegie, who was a daughter of William Coleman, a manufacturer of iron rails in Pittsburgh. In 1871 Coleman, who had just completed observations of the many Bessemer converters which were installed in America in the preceding four years, proposed to Thomas Carnegie that they organize a company to manufacture Bessemer steel. They succeeded in interesting David McCandless, David A. Stewart, and other prominent Pittsburgh men, and obtained an option on a tract of 107 acres of land called Braddock's field. Thomas Carnegie presented the matter to his brother Andrew, who lived in New York, but the latter strongly opposed it, and refused to connect himself with it in any way. However, fate had decreed that Andrew Carnegie should play a prominent part in the organization of this famous company. While the plans were still in embryo Andrew Carnegie's patron saint, Colonel Scott, had him commissioned by President J. Edgar Thomson, of the Pennsylvania Railroad, to go to Europe and market a block of the bonds of a new railroad which was to run to Davenport, Ia. Carnegie sailed in April, 1872, and was successful in selling $6,000,000 of the bonds, from which his aggregate commissions amounted to $150,000. Incidentally the loss to the purchasers of the bonds was $6,000,000 — every cent they put in; and a futile effort was afterward made to hold Carnegie responsible for the loss. During this European trip, however, Carnegie made a study of the Bessemer steel situation there. In England the industry was firmly established. At Derby visitors were shown a double-headed Bessemer rail which had been laid down in 1857 — at a point on the Midland Railway where previously iron rails had sometimes to be renewed within three months — and which, after fifteen years' constant use, was still in good condition. The nature of these exhibits made the Pittsburgh scheme now appeal to Carnegie, and he became an enthusiastic supporter of Coleman's Bessemer project, especially at the prospect of an additional outlet for the product of the Lucy Furnace. And on his return he eagerly put into the venture the whole of his European profits, in addition to a commission of $75,000 which he had made the previous October on the sale of a block of Gilman bonds, also won through the friendship of Colonel Scott. So on 1 Jan., 1873, Coleman took up the option on Braddock's field, and on the 13th of the same month the firm of Carnegie, McCandless and Company was organized with a capital of $700,000. Carnegie put altogether $250,000 into the venture and acquired the largest individual interest. Coleman put into it $100,000, and Kloman, Phipps, McCandless, Scott, Stewart, Shinn, and Thomas Carnegie each supplied $50,000. Thus was started the great enterprise which afterwards became famous as the Edgar Thomson Steel Works. Ground was broken 13 April, 1873. Before the work was more than well started, however, the panic involved the firm in great financial difficulty; and but for the high standing of McCandless, Stewart, and Scott, it would have succumbed. As it was, an issue of bonds was found necessary. These conferred on the purchaser the right to exchange them within three years for paid-up stock in the company. J. Edgar Thomson, president of the Pennsylvania Railroad and Colonel Scott, Carnegie's protectors, took $150,000, and Gardiner McCandless, son of the chairman, bought about $70,000 for himself and friends. Notwithstanding that these purchases saved the company and brought to it the prestige and favor of President Thomson and Colonel Scott, as was found when it entered the market with its rails, Carnegie refused to permit them to convert their bonds into stock upon maturity and compelled them to accept cash instead. Young McCandless, however, upon seeking legal redress, was given stock in exchange and taken into the firm as Carnegie's secretary. In the meantime Mr. Carnegie had availed himself of the opportunity to acquire Kloman's interest in the Kloman, Carnegie Company, which had remained a separate concern. Kloman had become interested in a project for mining and smelting ore in Michigan. Its ore proved deficient in quality and the company failed, involving Kloman. Lest the affairs of the other partners in Kloman, Carnegie and Company also become involved through pressure of Kloman's creditors, Carnegie made a written offer to restore Kloman to full partnership if he would make a voluntary assignment and get a judicial discharge. This Kloman agreed to do; and a committee of the creditors was formed to appraise his interests, which the Carnegies bought. Kloman was thus enabled to make a settlement of fifty cents on the dollar. But after the disentanglement of his affairs Carnegie offered him an interest of $100,000. This did not satisfy Kloman, who valued his interest at several times that; and he demanded complete reinstatement in all the Carnegie companies, in accordance with the previous understanding. But as he had no binding contract — the written offer and its acceptance carried no legal consideration — he was unable to force his demands. So in bitterness he withdrew from Carnegie, Kloman and Company, although he retained his interest in Carnegie, McCandless and Company until 1876. On 12 Oct., 1874, the latter firm was dissolved, and the J. Edgar Thomson Steel Works, Ltd., was incorporated, with a capital of $1,000,000, to take its place. Its personnel was almost exclusively of railroad men, and naming the works after the president of the Pennsylvania Railroad insured that company's favor. By 1875 the Edgar Thomson mill was yielding a golden stream of profits, and its sole ownership was becoming a passion with Mr. Carnegie. In a letter from Europe, dated 13 April, 1876, in which he estimated the annual profits would be $300,000, he wrote: “Where is there such a business! . . . I want to buy Mr. Coleman out & hope to do so. . . . Kloman will have to give up his interest. These divided between Harry You and I would make the Concern a close Corporation. Mr. Scott's loan is no doubt in some banker's hands, and may also be dealt with after a little. . . . Then we are right and have only to watch the bond conversions.” According to schedule, the ejecture of Mr. Coleman, the founder of the enterprise, was effected, and his interest acquired by Mr. Carnegie. Shortly afterward Kloman, whose interest in the Carnegie, Kloman Company Mr. Carnegie had previously seized, again succumbed to the latter's pressure and yielded up his interest in the Edgar Thomson mill. Concerning the next victims whose interests were coveted, Carnegie wrote on 1 May, 1877, to Mr. Shinn: “It is not likely that McCandless, Scott and Stewart will remain with us. I scarcely think they can. . . . I know Harry and Tom have agreed with me that you, out of the entire lot, would be wanted as a future partner, and I think we will one day make it a partnership Lucy F. Co. U Mills, E. T. &c., and go it on that basis the largest and strongest Concern in the Country.” David McCandless, however, was eliminated by the kindly hand of death; and Andrew Carnegie in a pathetic letter, dated 22 Feb., 1879, in Bombay, where he received the news, said: “It does seem too hard to bear, but we must bite the lip and go forward, I suppose, assuming indifference; but I am sure none of us can ever efface from our memories the image of our dear, generous, gentle and unselfish friend. To the day I die I know I shall never be able to think of him without a stinging pain at the heart. Let us try to be as kind and devoted to each other as he was to us. One thing more we can do, attend to his affairs, and get them right that Mrs. McCandless and Helen may be provided for. I know you will all be looking after this, and you know how anxious I shall be to co-operate with you.” Accordingly nothing was done about it until Carnegie's return the following July, when, besides refusing to credit David McCandless' interest with any of the profits of the last five months, Carnegie insisted on purchasing his interest at book value appraisement made before McCandless' death. Mrs. McCandless and her daughter Helen received $90,000 for her husband's interest. It had cost $65,000 in cash. Gardiner McCandless, David's son, who was ejected shortly afterward, received $183,000 for his original investment of $42,000 in the convertible bonds. William P. Shinn, the next to go, was eliminated in 1881, and his case found its way into the courts. His interest amounted to the same as David McCandless', but he received $200,000. In 1881 the Edgar Thomson Steel Works, Lucy Furnaces, and the Union Iron Mills were consolidated into the Carnegie Brothers and Company, Ltd., with a capital of $5,000,000. In the following year the “ejecture” was again set in operation, and Gardiner McCandless, mentioned above, and John Scott, after the usual personal difficulty with Carnegie preceding these events, relinquished their interests in the company. In 1883 the Homestead Mills were added to the Carnegie group. The Homestead, intended as a rival of the Edgar Thomson Mill, had been incorporated in 1879 as the Pittsburgh Bessemer Steel Company, Ltd., with a capital of $250,000. Its founders, owners of various mills, had been customers of the Edgar Thomson Mill; but experiencing difficulty in getting their orders for billets filled, they built the Homestead plant as a measure of self-protection. After a year its prospects were exceedingly bright, but it became involved in labor difficulties which extended into the individual plants of the different owners; and the Carnegies effected a consolidation in October, 1883. On 1 Jan., 1886, the Pittsburgh Bessemer plant at Homestead, the Lucy Furnaces, and the Upper and Lower Union Mills were organized into Carnegie, Phipps and Company, Ltd. The net earnings of the Carnegie companies rose from $512,068 in 1879 to $2,128,422 in 1882. While 1883, 1884, and 1885 each averaged a million dollars less. In 1886 they increased to $2,925,350, in 1887 to $3,441,887, but decreased in 1888 to $1,941,565. This drop in profits led Mr. Carnegie to believe that the steel business had reached its zenith of prosperity, and in 1889 he entered into negotiations with certain English bankers and capitalists with a view to selling out. Phipps resisted the project, although he finally yielded reluctantly to Carnegie's insistence. However, the negotiations had no satisfactory result, much to the delight of Phipps, who, writing to Carnegie in Europe said: “I am gratified that we are not to go out of business. With Mr. Frick at the head, I have no fear as to receiving a good return upon our capital. Being interested in manufacturing keeps us within touch of the world and its affairs.” In 1882, when Carnegie had acquired an interest in the coke business of Frick and Company, he first became familiar with the ability of Henry C. Frick. In 1889 he persuaded Mr. Frick to accept the chairmanship of Carnegie Brothers and Company, Ltd. Frick, by acquiring the interest of David A. Stewart, became the second largest stockholder in the company. He became director in Carnegie, Phipps and Company, and was also president of the H. C. Frick Coke Company. Fortune favored Carnegie when he failed to sell the company, for in the same year (1889), although the price of rails dropped to their lowest point, under Frick's management all previous Carnegie records for profits were exceeded, and they steadily increased from $3,540,000 in 1889, to $40,000,000 in 1900, the last year of the Carnegie Steel Company's separate existence. Shortly after assuming the chairmanship of Carnegie Brothers and Company Frick skillfully effected the absorption of a rival organization, the Duquesne Steel Works, without the outlay of a dollar, by a bond issue of a million dollars. It added to the Carnegie group the best steel works in the country, paying for itself within one year. In 1892 all the Carnegie interests, except coke, were consolidated as the Carnegie Steel Company, Ltd., and Frick was elected its chairman. Under this magician of steel its profits multiplied. He devoted his attention to perfecting economies of operation, and the changes he effected revolutionized the iron industry. He did not depend on an intense human drive, and immediately dissipated the animosities of the petty factions which had been created out of the former system of unfriendly rivalry for speed. Frick organized the many separate Carnegie establishments into a coherent unit of harmonized movement. He built the Union Railway, which connected the scattered works with every important railway in Western Pennsylvania. He obtained a one-half interest in the Oliver Mining Company, whose ore-fields provided an unfailing supply of high grade Bessemer ores; and for its economical transportation he built the Pittsburgh, Bessemer and Lake Erie Railroad and the Pittsburgh Steamship Company. This ore acquisition, which actually gave the Carnegie Steel Company supremacy in the iron industry, was opposed by Andrew Carnegie. When consulted concerning it, he wrote from Scotland in August, 1892: “If there is any department of business which offers no inducement, it is ore.” And two years later, in April, 1894, after Frick had made the arrangement and proven its efficacy, Carnegie wrote from Sussex, England: “The Oliver bargain I do not regard as very valuable. You will find that this ore venture, like all our other ventures in ore, will result in more trouble and less profit than almost any branch of our business. If any of our brilliant and talented young partners have more time, or attention, than is required for their present duties, they will find sources of much greater profit right at home. I hope you will make a note of this prophecy.” His prophecy proved a source of much amusement to the other members, for this ore venture in 1896, through an arrangement with the Rockefellers, resulted in a visible saving of $27,000,000; and upon the organization of the United States Steel Corporation, Charles M. Schwab estimated the value of these ore holdings at upward of $500,000,000. By the acquisition of this ore, and by the building of railroads and steamships for its economical transportation, Frick had co-ordinated every branch of the vast Carnegie interests. They formed now a complete industrial unit of amazing efficiency; and the profits were increasing annually by millions. In 1899 Mr. Carnegie, who for several years had been living abroad, again sought to sell, valuing the company, including the H. C. Frick Coke Campany, at $250,000,000; and soon afterwards, March, 1899, ex-Judge W. H. Moore made overtures for the purchase of Carnegie's interests in the Carnegie-Frick properties. Carnegie stipulated that negotiations should be conducted through his principal partners, Phipps and Frick. They agreed, with the understanding that Moore and his friends should finance the entire scheme. Carnegie demanded a million dollars for a ninety days' option on his entire interests at a price of $157,950,000; and he afterward raised this bonus to $1,170,000. The increase was met by Phipps and Frick each contributing $85,000, Carnegie agreeing to return these sums to them later. Negotiations ended abruptly, however, because of the panic due to the death of Roswell P. Flower. Frick and Phipps went to Carnegie at Skibo Castle, Scotland, to get an extension of the option, but he refused. He was desirous of selling out, and keenly disappointed at the failure to complete the transaction. Besides, he was chagrined at the ridiculous aspects that arose out of the premature publicity of its consummation. The failure to sell also was one of a series of causes that brought on the sensational dispute between him and Frick. Many reasons contributed to Carnegie's anxiety to sell. Lack of practical knowledge of the business had shaken his faith in the future of the iron industry ten years before, when he attempted to sell to the English capitalists; and now, in his estimation, steel had passed its golden age. Besides, he was sixty-four years of age and living principally abroad. He was fascinated by the international attention he had achieved through association with the world's political and social leaders, and business affairs no longer appealed to him. In personal success, at least, he had conquered the business world, but he dreaded the possibility of reverses. Furthermore, his industrial prestige was being eclipsed by the achievements of the unostentatious Frick; and Mr. Carnegie had never tolerated any partner who threatened to overshadow him in prominence. Two American beauty roses on one stem did not accord with his esthetic tastes; so the ejecture process was revived to expel Frick from the company and seize his interests at millions below their value. This iron-clad (ejecture) agreement was a practice inaugurated in 1884 of rewarding exceptional services of employees by crediting them with an interest in the company; many received its favor. The book value of the interests thus assigned was credited against recipients; and the shares were held by the company as security until the indebtedness had been paid off. Usually the profits alone sufficed to liquidate the debt. In 1887 an automatic ejecture was added to it, so that no junior partner need be kept in the association any longer than his favor lasted. It was an excellent device, keeping the young “geniuses” in an humble frame of mind and spurring them to further effort, but it was never intended to apply to partners whose interests were paid up, such as Frick and Phipps. In 1892 Carnegie made a futile attempt to revise it and include all partners. At his palace near Windsor, England, he besought Phipps to sign this new document, but Phipps, not to be thus beguiled, refused, and Carnegie's was the only signature ever appended to it. Concerning this document Phipps wrote from London, 4 Oct., 1892: “Please inform the chairman, president, and board of managers that I refuse to sign the ‘Iron-clad’ or any paper of a similar character, and that I shall resist the buying of the company's stock as the proposed agreement contemplates ———. Besides the act would be illegal. For these and other good reasons, I beg that no action in the matter be taken.” That was the status of the iron-clad in 1899 when Carnegie revived it to effect Frick's ejecture. After an extraordinary ritual in an attempt to make the iron-clad applicable to the Frick case, Carnegie designated Charles M. Schwab, one of the junior partners, to obtain signatures to it; and dominated by Carnegie's overruling influence, all of the junior partners signed it except two, F. T. F. Lovejoy and H. M. Curry. Henry Phipps, the other senior partner, whose interests were on a par with Frick's, not only refused to sign the demand, but joined the latter in a protest against the action of the board. He wrote: “I dissent from some of the statements of alleged facts therein contained, and I, certainly, do not agree, but object to and deny, that the said actions of the Board of Managers on 8 Jan., 1900, and, indeed, any action of the Board of Managers, could or did reinstate the so-called agreement of 1887.” Notwithstanding the apparent hollowness of the whole proceeding, Carnegie directed Schwab, as Frick's attorney in the pretended transfer of the latter's interest to the company, which amounted to its seizure at $11,000,000 less than its value, and to be paid in installments of such long duration, as would enable its being paid out of the profits earned by Frick's interest. Frick sought protection in the courts, which resulted, five days later, in his receiving an interest which later yielded him $23,000,000 more than Carnegie tried to force him to sell for. This was followed, in 1900, by a reorganization of the Carnegie interests, including the H. C. Frick Coke Company, into the Carnegie Company, incorporated under the laws of New Jersey, with a capital of $160,000,000. In this company both Mr. Carnegie and Mr. Frick were omitted from the directorate. The Frick fiasco now made Mr. Carnegie desperately anxious to sell out, and his methods of accomplishing it stand as a monument to his resourcefulness. About a year before Frick resigned as head of the Carnegie Steel Company, he appointed a committee to report on a project for building a tube works at Conneaut, the Lake Erie terminus of the Bessemer Railroad. There being little freight from Pittsburgh to the Lake port, the ore trains returned for the most part empty; and to utilize this profitless haul, various plans had been discussed by Frick and his colleagues for the building of blast-furnaces and other works at Conneaut that would call for Pittsburgh coal and coke. The minutes of the meeting of the Board of Managers of 16 Jan., 1899, show that Mr. Clemson, whom Frick had authorized to investigate the matter, also was in favor of starting the tube works. But further action was deferred because of the contemplated sale of the Carnegie Steel Company to the Moore syndicate. The Conneaut terminal was intended as a simple business plan and grew out of the need for filling the empty ore-cars on their return to Conneaut. There was no intention during Frick's régime of holding the tube project as a threat over anybody. But now it occurred to Mr. Carnegie that this might be revived and utilized to force the purchase of at least his own holdings, and perhaps of the whole Carnegie concern. So the plan was perfected and given to the newspapers by the Carnegie press agent and by Carnegie interviews. This project, in addition to becoming a rival of the powerful National Tube Works, threatened to enter into competition with the Pennsylvania Railroad. The consternation thus produced was well described in a magazine of that period: “Either project as a threat would have been alarming. The two together as imminent and assured accomplishments produced a panic. And a panic among millionaires, while hard to produce is, when once under way, just as much of a panic as is a panic among geese. . . . At last they ran to their master, Morgan, and he negotiated with Carnegie.” An effective feature of the propaganda, arranged by the credit manager of the Carnegie Company, was a dinner given in New York by bankers at which Schwab described with enthusiasm the future of the steel industry. Concerning this, Prof. Henry Loomis Nelson says: “Views so large, so wise and so interesting that Mr. Morgan was strongly impressed by the speech and the speaker. Then there began a series of interviews which eventually led to the founding of the United States Steel Corporation, to the realization of Mr. Carnegie's desire to retire from control of the business.” It was the most masterly piece of diplomacy in the history of American industry, and formed a fitting climax to Andrew Carnegie's romantic business career. Carnegie has claimed to have been the first to introduce into this country the manufacture of iron bridges and the Bessemer process of making steel. But statistics prove these claims unwarranted. In a biography of himself he wrote: “There were so many delays on railroads in those days from burned or broken bridges that I felt the day of wooden bridges must end soon, just as the day of wood-burning locomotives was ended. Cast iron bridges, I thought, ought to replace them, so I organized a company, principally from railroad men I knew, to make these iron bridges, and we called it the Keystone Bridge Company.” The facts are, according to “The Inside History of the Carnegie Steel Company,” that the formation of the Keystone Bridge Company was merely the incorporation of the firm of Piper and Shiffler, which had been building iron bridges since 1857 — eight years before Mr. Carnegie became associated with it. Concerning his introduction of the Bessemer process into this country, he writes: “On my return from England [he is speaking of the year 1868] I built at Pittsburgh a plant for the Bessemer process of steel-making, which had not until then been operated in this country, and started in to make steel rails for American railroads.” The facts are that the construction of the first Carnegie Bessemer steel plant, which was the eleventh in America to adopt the process, was not commenced until April, 1873, and was not in operation until the end of August, 1875. All encyclopedic data on the subject is to the effect that the first Bessemer steel produced in America was made at Wyandotte, Mich., in 1864, and that the first Bessemer steel rails made in America were rolled at the North Chicago Rolling Mill in presence of the American Iron and Steel Institute in May, 1865, from ingots made at Wyandotte. In September, 1875, the “American Manufacturer,” commenting on the completion of the Edgar Thomson works, remarked: “We [in Pittsburgh] have been slow to take advantage of the Bessemer process. This dilatoriness is all the more remarkable as there has not been the least doubt as to its success and value practically and commercially.” It is a fact that Mr. Carnegie is not credited with having invented or contributed any innovation to any practical branch during his long connection with the iron industry. On the contrary, he is on record as having strongly opposed vital, improvements, such as building the Universal Slabbing Mill at Homestead, Coleman's Bessemer project in 1871, and Frick's acquisition of the Oliver ore-fields. For the sake of accuracy, reference might also be made to another error in fact which has appeared in several biographical articles on Mr. Carnegie, and exhibits a tendency toward inaccuracy. In the same biography in which he claims to have been the first to introduce the Bessemer process in America, he says: “My father, who had been naturalized as an American citizen in 1853, had died soon afterwards. . . . At the age of sixteen I was the family mainstay.” But “The Inside History of the Carnegie Steel Company,” whose exhaustive reference to original documents has established the date of every salient event, says: “The facts, as shown by the Allegheny County records on file in the Pittsburgh court house, are as follows: On 14 Sept., 1855, the father of Andrew Carnegie made a will. . . . Andrew was then within ten weeks of being twenty years of age.” Nevertheless, in the important rôle he did assume, that of creating outlets for the company's products, he displayed extraordinary ability. “The part at first selected by Andrew Carnegie for himself,” says “The Inside History of the Carnegie Steel Company,” “was the procurement of orders. Here he displayed an originality so marked that it amounted to genius. Endowed with a ready wit, an excellent memory for telling stories, and a natural gift for reciting them, he became a social favorite in New York and Washington, and never missed a chance to make a useful acquaintance. His mental alertness, ready speech, and enthusiastic temperament made him a delightful addition to a dinner party; and many an unconscious hostess, opening her doors to the little Scotchman, has also paved the way to a sale of railroad material. Carnegie early found that his power to promote sales grew in proportion to his own importance. His natural love of prominence was thus fortified by its commercial value. Never was a band wagon driven with such skill. The box of Carnegie's chariot became the ‘seats of the mighty.’ And so a politico-social campaign went on hand in hand with the rail, bridge, armor-plate, and structural-steel business, through seasons of opera, concerts, lecturings, and book-publishings, until the name of Carnegie was written in bright letters across the sky of two hemispheres, and people forgot that there were any other steel works in the world. Meanwhile in Pittsburgh the partners worked steadily on, building dollar by dollar the great golden pyramid by which their majority stockholder was to be immortalized.” “Carnegie owes a great deal to his habit of traveling,” said George Lauder, his cousin. “While other men were wallowing in details, he was able to take a wider view.” Supplied with daily reports of the product of every department of each of the works, Carnegie had leisure to make comparisons, and to prod with a sharp note any partner or superintendent whose work did not rank with the best. In time he became very expert at these postal proddings; and with a few words scribbled on the back of his address card, he could spur the best of his managers to more furious effort. “Carnegie did not roost in the tree,” wrote David Graham Phillips; “he would sit afar off, on the rail-fence, apparently watching the waterers and spaders and caterpillar-killers, all desperately at work, with the sweat streaming. Presently he would descend from his rail-perch, catch up a great club and lay frantically about him. Bruised skulls here; broken skulls there; corpses yonder; fellows with raw heads and aching bones, crawling rapidly into the cover of the tall grass; imprecations filling the air. A scene of peaceful industry transformed into a shambles. Grinning at his club, Carnegie would stroll back to his rail-perch, usually Skibo.” In 1885 he began a series of lectures and essays on the natural rights of labor, and a year later he published “Triumphant Democracy,” a vehicle for his advanced views on the political and social equality of all men. It was a glorification of the toiler, among whom it was widely distributed. In the same year he also published, in the “Forum,” an essay on the relations of capital and labor. It was lofty in spirit and purpose and contained his famous aphorism: “There is an unwritten law among workmen: ‘Thou shalt not take thy neighbor's job.’ ” However, Carnegie in theory and Carnegie in practice were brought into sharp contrast shortly afterward by the Edgar Thomson strike of 1887, caused by his intention to resume the twelve-hour day. Captain Jones, superintendent of the mill, had previously effected a reduction from twelve hours, and said that “I soon discovered it was entirely out of the question to expect human flesh and blood to labor incessantly for twelve hours.” Nevertheless, Mr. Carnegie desired its resumption. The workmen refused to accede to the demand, and a strike resulted. “The Inside History of the Carnegie Steel Company” says: “But before it had gone far a committee of the strikers went to see Mr. Carnegie at the Windsor Hotel, New York. There he reasoned with them, and talked them into a conciliatory frame of mind; and they agreed to sign the contract he put before them. The affair seemed to have reached a happy conclusion; and the labor leaders left for Pittsburgh in the best of spirits. As Mr. Carnegie bade them good-by, he pressed into the hands of each a copy of his ‘Forum’ essay. This the men read on the train; and on their arrival at Braddock they promptly repudiated the agreement they had signed and continued the strike.” Under the protection of Pinkerton guards, the works were put in operation by non-union men. The usual disorders took place, resulting in loss of life; and after a five-months' struggle the company won the contest in May, 1888. During the strike Mr. Carnegie was in retirement in Atlantic City, where he was kept informed of its developments by his cousin, George Lauder. Nor did time effect any favorable change in his attitude toward labor. His humanitarian precepts became thorns under the perversion of the labor agitators; in fact, to these are directly attributed the Homestead strike. Although in this strike the men presented less grievance than in any of the others, it proved to be the most sensational of all the many Carnegie labor troubles. And it was aggravated by the belief of the workmen that Mr. Carnegie, who was in Europe, would settle matters to their satisfaction if he were apprised of their desires. But the strike was being conducted in accordance with plans made by him before his departure. On 4 April, 1892, three months before the strike began, in a notice intended for the workmen he stated: “These works, therefore, will be necessarily Non-Union after the expiration [1 July, 1892] of the present agreement.” This refers to an agreement entered into at the same works three years before, which, through the installation of improved machinery, was enabling many of the workmen to earn upwards of $15.00 a day. It also compelled the company to submit to the interference of labor leaders in the operation of nearly every department. Thus affairs had smoldered for nearly three years, greatly to the chagrin of Mr. Carnegie, who now fanned the conflagration, and prudently retired to Scotland. From there, on 10 June, 1892, he wrote to Frick: “Of course, you will be asked to confer, and I know you will decline all conferences. You will win and win easier than you suppose, owing to the present condition of markets.” On 17 June, 1892, he emphasized his uncompromising attitude by writing: “Perhaps if Homestead men understand that non-acceptance means non-union forever, they will accept.” He also cabled VVhitelaw Reid, who was trying to bring about a settlement of the strike, that no compromise would be considered by him, and that he would rather see grass growing over the Homestead works than advise Mr. Frick to yield to the strikers. “The Romance of Steel” says: “The workmen had a conviction, almost a religious belief, that no outsiders had a right to come in and take their places during a strike. Andrew Carnegie himself had said, a few years before: ‘There is an unwritten law among the best workmen, “Thou shalt not take thy neighbor's job.” ’ ” Mr. Carnegie, however, had selected the secluded residence at Rannoch Lodge, in Scotland, for the purpose of eluding the appeals which it was apparent his speeches and writings would call forth; and his silence during the conflict at Homestead was in accordance with plans made by him long before. An Associated Press representative located Mr. Carnegie in Scotland and after much difficulty succeeded in getting a short statement from him. He said: “Well, I authorize you to make the following statement: I have not attended to business for the past three years, but I have implicit confidence in those who are managing the mills. Further than that I have nothing to say.” This aroused a storm of criticism both at home and abroad. The St. Louis “Post-Dispatch” said: “One would naturally suppose that if he had a grain of manhood, not to say courage, in his composition, he would at least have been willing to face the consequences of his inconsistency. But what does Carnegie do? Runs off to Scotland out of harm's way to await the issue of the battle he was too pusillanimous to share.” The London “Financial Observer,” of 16 July, 1892, said: “Here we have this Scotch-Yankee plutocrat meandering through Scotland in a four-in-hand, opening public libraries, and receiving the freedom of cities, while the wretched Belgian and Italian workmen who sweat themselves in order to supply him with the ways and means for his self-glorification are starving in Pittsburgh.” In America, on the same date, Carnegie was burnt in effigy at Little Rock, Ark. How eagerly the labor leaders had seized upon Carnegie's terse commandment to effect their purpose became evident in the testimony of General Master Workman T. V. Powderly at the Congressional investigation of the strike: “Does your organization countenance the prevention of non-union men taking the place of striking or locked-out men?” he was asked. To which he replied: “We agree with Andrew Carnegie, ‘Thou shalt not take thy neighbor's job.’ ” Public sentiment became so enraged at the Homestead strike that it became a national political issue and brought defeat to the Republicans in the presidential campaign of November, 1892. One of the disappointed leaders, General Grosvenor, of Ohio, stigmatized Mr. Carnegie as “the arch-sneak of the age.” Vainglory and abnormal astuteness furnish the key to Mr. Carnegie's conflicting, enigmatical personality. He took unscrupulously from his partners, and gave lavishly of public bequests; he glorified his workmen, yet drove them inhumanly; he said: “I would as soon leave to my son a curse as the almighty dollar,” while his only child is a daughter, born in 1897. He possessed an inordinate craving for public attention, and his departure or entrance into the country was always chronicled by an interview. Unfortunately the one that attracted the most attention contained praise of the Kaiser, just after the outbreak of the European War. He was roundly criticized for this, and in Scotland, of which country he had been regarded as “Patron Saint,” his statue was splattered with mud and filth. In the early eighties, to remedy the defects due to his neglected early training, Carnegie devoted considerable time to study under the guidance of tutors, and soon became a prolific writer, largely in the form of magazine articles. But he has also produced, with the aid of literary assistants, a number of works in more permanent form: “An American Four-in-Hand in Britain” (1883); “Round the World” (1884); “Triumphant Democracy” (1886); “The Gospel of Wealth” (1900); “The Empire of Business” (1902); “Life of James Watt” (1905); and “Problems of To-day” (1908). Mr. Carnegie's stupendous charities include, besides $60,000,000 for 2,500 libraries, the endowment of various institutions for the advancement of learning. These institutions are supported by the interest from the endowments, which include $125,000,000 for the Carnegie Corporation of New York; $22,000,000 for the Carnegie Institution of Washington; $16,000,000 for the Carnegie Foundation for the Advancement of Teaching; $13,000,000 for the Carnegie Institute at Pittsburgh; $10,000,000 for the Carnegie Institute of Technology; $5,000,000 for the Carnegie Hero Fund; $10,000,000 for the Carnegie Endowment for International Peace; $6,000,000 for church organs; $4,000,000 for steel workers' pensions; $2,000,000 for the Church Peace Union; and $1,500,000 for The Hague peace palace. He married, in 1887, Louise Whitfield, of New York City. They are the parents of one child, Margaret (b. in 1897).


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