Rags to Riches: The Story of Andrew Carnegie
Andrew Carnegie, the King of Steel and one of the captains of industry in America and the world, was a very successful businessman who had a monopoly on the steel business before selling his company to the most powerful man in the country and donating his millions (what would be billions today) of dollars to charity and philanthropy. This exciting “rags to riches” story of one of America’s great entrepreneurs is one that should not be missed.
The story begins on November 25, 1835, in the old city of Dunfermline, Scotland, the day Andrew Carnegie was born. His parents were both weavers, his father a handloom weaver and his mother who did work for local shoemakers. Weaving, particularly handloom weaving, since there were no machines to do the work for them, was a common job in Dunfermline, which was practically the capital of weaving in Scotland. This all changed in 1847, when many steam-powered machines were brought into the small town. Hundreds of handloom weavers were jobless, including Carnegie’s parents, as now skilled workers were no longer required to make textiles for the area. His mother tried opening a small grocery shop to support the family; however the income was not enough to support the poor family. Under pressure from his mother, Carnegie and the rest of his family, including his brother, immigrated to America with money that his mother borrowed in able to make the trip across the Atlantic.
Carnegie’s family, after arriving, settled in Alleghany City, Pennsylvania (now part of Pittsburg), and Carnegie went to work in a factory as a bobbin boy, earning $1.20 per week. The next year Carnegie became a telegraph messenger, and he kept advancing up until he became superintendent of the Pittsburg Division of the Pennsylvania Railroad. Carnegie, after becoming a telegraph messenger in 1848, became a telegraph operator in 1851. He then became Tom Scott’s telegraph operator two years later, working for the Pennsylvania Railroad. Carnegie learned much from his time working in the railroad with Scott, from the railroads themselves to, more importantly, how businesses work. This knowledge became invaluable to Carnegie, who soon invested into many other fields of business, including the oil industry. When the nation (meaning the U.S.) went into a four year civil war (e.g. the American Civil War), Carnegie was drafted into the Union Army, however, being a wealthy businessman, he paid another man to serve in his place, a common practice at the time. Carnegie, with many other investments, (such as the Keystone Bridge Company, which replaced weak wooden bridges with stronger iron ones) left the Pennsylvania railroad in 1865 at the war’s end.
Jumping to the next decade, Carnegie began his Steel Empire, after a massive breakthrough was discovered in the manufacturing of Steel. The Bessemer converter allowed large amounts of steel to be produced by unskilled workers instead of skilled artisans that could only produce small amounts of the valuable metal. Carnegie heavily invested in this new technology, and began gaining control not of not just other mills, but also the transportation methods used and the raw materials, however he still needed control of coke, a coal-based substance, that was used to power his new furnaces. The open hearth furnaces replaced the Bessemer converters in Carnegie’s mills. In order to obtain the coke, Carnegie sought out Henry Frick, a ruthless, cutthroat businessman who supplied the coke Carnegie needed, and had been in the business since he was 20 years old. The two teamed up, Carnegie got his coke, and Frick got the money he needed to expand his business. However, Carnegie, wanting to control every step of the process, took control of Frick’s company; however he became chairman of Carnegie Steel in 1889.
That year, 1889, was also the year the Johnstown Flood happened. The small town of Johnstown, Pennsylvania was located in a river valley between two rivers, the Little Conemaugh River, and the Stony Creek River, which merged into the Conemaugh River at the western end of the town. Every year, one or both of the rivers overflowed into the town, either from melting snow or heavy rain. People had to quickly gather their things and head for high ground on the spot when the rivers overflowed. Floods were a part of life in Johnstown, so why was the year 1889 different? The answer to that question lies in a dam near Johnstown. The Johnstown Dam, as it was called, was built to provide water for a canal system between Pittsburg and Johnstown. However, when the reservoir was finished in 1852, the canals became obsolete. As a result, owners were negligent about the dam’s maintenance. One owner even took the drainage pipes and sold them. The dam had many owners until the South Fork Fishing and Hunting Club bought the dam in 1879, a decade before the Johnstown Flood of 1889. This club was made up of wealthy businessmen in the region, including Andrew Carnegie and Henry Frick. Although the club had regular maintenance done on the dam, they also made some seemingly minor adjustments. For one, the club put nets in to prevent the expensive game fish from escaping, but the major fault was lowering the dam a few feet so two carriges could be on the dam at the same time. So on May 31, 1889, workers were trying to strengthen the dam by adding height and width to it, as well as removing the fish nets that had been installed, however, the dam burst in the afternoon of that day, and the rushing water flooded the city. Most victims of the flood didn’t even see the wave of water (which, according to the few who saw it, was 40 feet high) coming, they just heard a loud rumbling sound. After the flood occurred, over 2,000 people had died, 1,600 homes were destroyed, $17 million in property damages was done, and anger towards the South Fork Fishing and Hunting Club was rampid in magazines, newspapers, and the survivors. The club was explicitly blamed for the flood, and even some lawsuits were made at certain members of the club, however no substantial evidence was found to find them guilty. Angry survivors vandalized the club as well. Many members of the club donated to the relief effort, including Carnegie giving $10,000.
Work in the Steel Mills was hard, strenuous, and exhausting to say the least. Workers had to work twelve hour days, seven days per week. A steel worker described the job in his diary:
You lift a large sack of coal to your shoulders, run towards the white hot steel in a hundred-ton ladle, must get close enough without burning your face off to hurl the sack, using every ounce of strength, into the ladle and run, as flames leap to roof and the heat blasts everything to the roof. Then you rush out to the ladle and madly shovel manganese into it, as hot a job as can be imagined.
At Homestead Mill, the largest of Carnegie’s steel mills, a single furnace could produce 40 tons of steel in six hours. The Homestead Mill had sixteen hearths, which means that in a twelve hour workday, 1,280 tons of steel were produced each day. The work was high-risk, and accidents weren’t out of the ordinary. Lost arms, hands, and legs were a common sight in the steel mills, and when a high-pitched whistle sounded, wives and children feared that their loved ones may have been hurt in the loud, chaotic factory. Accidents could have been minimized if Carnegie had paid attention more to worker safety, but he, contradictory to his word, valued efficiency more, and would not help the workers’ conditions. The workers only had the Fourth of July as a holiday, and during the twelve hour day shift, there were no breaks of any kind, so, unless there was a wee bit of time to take a break and eat (which seldom was the case), they worked nonstop for twelve hours, every day of the year, except for the Fourth of July.
In July of the year 1892, Andrew Carnegie went on vacation to Scotland, and left Henry Frick in charge of the company. After the price of steel dropped from $35 per gross ton to $22 per gross ton, Frick cut the workers’ wages, in order to keep costs down. The workers, particularly ones at the Homestead Mill, disliked this. They felt that since they worked at the mill, that they had a stake in the ownership of the plant. Carnegie responded to this in letters to Frick, said “We…approve of anything you do…We are with you to the end.” By saying this, Carnegie took the leash off Frick and allowed him to use any means that he felt necessary to deal with the workers. Frick, a man known for cracking down on labor unions, wanted to cripple the Amalgamated Association of Iron and Steel Workers, a small, but strong union at the Homestead mill. The Union only had around 750 workers, but, when the workers decided to strike, a massive 3,000 out of 3,800 workers were in favor of a strike. As a result, Frick built a twelve-foot tall barb-wired fence around the Homestead Mill, which the workers dubbed Fort Frick. Sheriffs came in to guard the property, but the workers pushed them out and decided to guard the mill themselves. Then the Pinkerton Detective Agency, whom both Carnegie and Frick had hired before to protect strike-breakers, then arrived at midnight on July 5 on tugboats, only to meet thousands of strikers, many of which were armed. They warned the Pinkertons not to step off the boat, but they did so anyways. Carnage ensured, and by the end nine strikers and three Pinkertons were killed. The strikers, along with sympathizers that decided to join in, also threw dynamite at the Pinkerton’s boats and tried to set them on fire and even tried pouring oil in the river to light it, but that failed. The strikers had claimed a victory, but soon afterwards the Pennsylvania State Militia arrived. The militia was equipped with the latest rifles and Gatling guns, and swiftly took control of the mill. The strike leaders were tried for murder, but the jury was too sympathetic to convict the strike leaders, so they went home. Some other strikers were tried for lesser crimes, and the whole committee was tried for treason, but nobody was convicted.
The Homestead Strike tainted Carnegie’s reputation for the rest of his life. Carnegie prior to the Homestead Strike of 1892 was known to the public as one who advocated and (verbally) supported labor unions and the well-being of workers. After the strike, Carnegie was seen in a darker light. Carnegie tried putting the blame on Frick, but as a result the two had a bitter relationship for the next seven years until Frick left the company on December 5, 1899. Carnegie threatened to force Frick to sell his stock far below the market value, so Frick sued; but the two settled their differences in a court of law, with Frick walking away with full pockets. The two never met again.
By the year 1901, Carnegie had grown tired of his business, and longed to spend more time with his wife Louise, whom he married in 1887, and his daughter Margaret, who was born in 1897. So when J.P. Morgan, a wealthy New York banker, gave Carnegie a deal of $480 million to sell Carnegie Steel, he accepted. Morgan soon made U.S. Steel from multiple steel companies, including Carnegie Steel. After making the deal, Morgan said “Congratulations Mr. Carnegie, you are now the richest man in the world.”, and indeed he was rich. However, between 1901 and his death, most of this money was given away. Carnegie, from 1901 until 1919, the year he died, was a philanthropist. He gave over $350 million away for various causes, such as education, the arts, and world peace. He had established over 2,500 public libraries, donated 7,600 organs (piano-like instruments) to churches, and had Carnegie Hall built. He also set up the Carnegie Endowment for International Peace, however, due to the outbreak of what we now know as World War One that failed. Carnegie, so disappointed with this failure, stopped writing his autobiography after the war began. He died on August 11, 1919, at his estate in Lenox, Massachusetts, and was buried at Sleepy Hollow, North Tarrytown, New York.
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