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Andrew Carnegie

Steel magnate who became one of the greatest of all philanthropists

11 August 1918

Mr. Andrew Carnegie died at 7.30 this morning at Lenox, Massachusetts. The cause of death is given as bronchial pneumonia. Mr. Carnegie had been living at his summer home at Lenox ever since the wedding of his daughter.

Andrew Carnegie was born in the ancient Royal Burgh of Dunfermline, in the county of Fife, Scotland. He himself gave the date of his birth as November 25, 1837, but local authority gives 1835 as the correct year.

The chief industry of his native town was then the hand-loom weaving of fine linen. The weavers were highly intelligent and disputatious, and Dunfermline was a centre of Chartist agitation and passionate Dissent. Carnegie’s father owned four hand-looms and employed apprentices. He was a revolutionary politician, a street orator, and an agitator against the industrial conditions which, by a singular irony, the son was destined to turn to such enormous profit. His mother, to whom he was devotedly attached until her death at the age of 80, was the daughter of Thomas Morrison, a man of mark in Dunfermline as an orator, lay preacher, reformer, and agitator.

The introduction of the power-loom ruined the business of Carnegie, senior, and was the cause of the emigration of the whole family to America when Andrew was about 12 years old. He had been taught by his mother and had been to a day school, but that was all the education he had until at the age of 30 he took courses of study in New York.

On their arrival in America in 1848 the Carnegie family settled in Alleghany, opposite Pittsburg, on the other side of the Ohio river. There they all found work at once, Andrew as a bobbin boy at 4s. 10d. a week in the cotton mill in which his father worked at the loom. Their next-door neighbour was a shoemaker named Phipps, who had a son a little younger than Andrew. This was Henry Phipps, after-wards second partner in the Carnegie steel and iron companies, the oldest of Carnegie’s early associates; and the only one who remained with him till the end, but even they quarrelled after 50 years of friendship.

From the cotton mill Andrew passed to a small factory where he fed the furnace in the cellar and tended the engine. That was all the manual work he ever did, for he was soon taken into the office. Next, by the patronage of a Dunfermline man who knew his father, he became a telegraph messenger under the Ohio Telegraph Company. He mastered the code, risked taking a message against rules, and was rewarded by being made operator at £60 a year. Then by the help of Colonel T. A. Scott he passed to the telegraphic service of the Pennsylvania Railroad, with another rise of salary.

He remained for 11 years in the employ of the railway company and got together a small capital by engaging in modest commercial enterprises more or less connected with the railway and under the benevolent advice of Colonel Scott, to whom he became private secretary. The whole region was humming with activity. There were oil companies, manufacturing enterprises, railways, and banks, and Carnegie, who was put in charge of important works during the Civil War, and became superintendent of the line in 1863, acquired friends and business experience, as well as money.

Carnegie thus was ready for the vast expansion of the iron and steel production which began about 1864. The protective tariff of 1861 was the general background; the local factors were the development of the Pennsylvania coalfields near Pittsburg, the substitution of coal and coke for charcoal in producing pig iron, the opening up of the Lake Superior iron ore deposits, the development of transport by rail and water, and the introduction of the Bessemer steel process.

Carnegie was responsible for none of these, but took advantage of all of them. He was neither inventor nor creator, like Krupp or Armstrong or Westinghouse, but a manipulator with a quick eye for opportunities and a rare sagacity in utilizing men. He used men of all sorts, raw youths or those of standing and influence, to their advantage when it served his purpose. He made many millionaires, but there is no record of those that he exploited and cast adrift.

In 1864 Carnegie bought his first interest in iron works, forming with his younger brother, old companions of his boyhood, and a German named Kloman, who had technical knowledge, the Union Iron Mills Company. Soon afterwards he secured the backing of the president and vice-president of the Pennsylvania Railroad, the greatest local magnates, for a new venture the Keystone Bridge Company. He resigned his railway appointment and devoted himself entirely to his private interests.

The Union Mills Company was not very successful, but Carnegie showed tenacity in holding on, and astuteness in buying out his senior partner when things were at their worst. His own part was to run about and get orders while the partners ran the works and the local business. He maintained this division of labour throughout his career, in all the successive enterprises being the travelling and publicity manager, but insisting on constant reports and keeping a firm grip on the actual works.

In 1873 he went into the steel business, employing as capital £50,000 which he had earned as commissions from Colonel Scott for placing the stock of a new railway on the European market. This was his share in the new company of Carnegie, McCandless, and Co., the total capital of which was £140,000. There were 11 partners. Twenty-six year later, when the business was sold for over £90,000,000, all Carnegie’s partners save one had died or gone out, and Carnegie’s personal share was more than one-half of the colossal total.

The story of the fortunes of the company is long and tortuous. It involved many commercial transactions of a mysterious nature. But the amassing of this portentous wealth is a most remarkable achievement. He went through no long-drawn struggle against adversity, nor is his story one of incessant toil and application. He escaped the daily grind and left it to others. The secret of his success in great measure lay in his withdrawal from the daily worries that beset the men on the spot and his consequent leisure to see the large movement of affairs and steer his course accordingly.

But he was a thorn in the flesh to his partners and the working officials, continually goading them to further efforts, playing off the output of one furnace or mill against that of another. He was insatiable. Even when in 1889 the profits rose to £4,000,000 the effect on him was determination to have them doubled next year. But this was not greed, but a love of winning the game, a game in which the measure of success was money.

Carnegie’s naturally kind and generous disposition and the memories and traditions of his Dunfermline proletariat days came into conflict with his consuming ambition. The business side always won. He would pay large wages because that paid him, but otherwise he was a relentless and unthinking employer. Notwithstanding the views in his book, Triumphant Labour, he fought strikes with bitterness, and in the great Homestead strike of 1892, the cause of which was the determination of the masters to force a return to the killing double shift, he was entirely against the Amalgamated Association of Iron and Steel Workers.

Encouraged by Carnegie’s benevolent theories, the association had come to interfere more and more with the management of the works. Carnegie insisted, even against his partner, Mr. Frick, on making it a fight to a finish. After the most sanguinary of all labour conflicts, amounting to civil war on a small scale, in which in one day 10 men were killed and over 60 wounded, Carnegie won. He fought, however, from the safe distance of Atlantic City, leaving to his partners and managers the dangers of the battle.

In his “Gospel of Wealth” Mr. Carnegie stated his opinion that “surplus wealth was a sacred trust which its possessor was bound to administer in his lifetime for the good of the community”. How far he succeeded in divesting himself is not yet known, but the total amount of his benefactions is prodigious. In 1908 it was estimated that he had given over £57,000,000 in America, over £7,000,000 in Great Britain, and £1,000,000 in Europe. Education, public libraries, organs, peace movements, and the Hero Funds were the best known of his objects. The two conspicuous omissions from a set of objects thought out with much care were hospitals and churches.

There has been much difference of opinion as to the utility of his beneficence. His endowment of the Scottish universities, in particular, has been singled out for adverse comment. But it is to be remembered that the introduction of the system of options and several other important changes, such as the reflex effect of the endowments on secondary schools, were the work of the Carnegie Trustees and their advisers, rather than of Carnegie.

From boyhood Carnegie was a reader, and in middle age he developed an inclination to write. His first two books, An American Four-in-Hand in Great Britain and Round the World, were very obvious descriptions of luxurious travel. Triumphant Democracy, published in 1886, was an echo of political ideas imbibed in boyhood and a scream of eulogy of American democratic institutions, to the disparagement of his native country. Wealth, published in 1886, and The Empire of Business, which appeared in 1902, contained naïve but rather engaging egotism mingled with his philanthropic aspirations. Problems of To-day, published in 1908, is his best book. It consists of nine social-economic essays on wealth and labour, informed with his own experience and written from an anti-Socialistic point of view.

Carnegie’s private life was simple, wholesome, and unostentatious. He had no vices and eschewed luxury and display. He was a bachelor until he was 50, when he married Miss Whitfield, of New York. Thereafter he never wearied of extolling domestic life. He has one child, a daughter, whose recent marriage was one of the great events of American life.

His principal amusements were entertaining, fishing, and golf. There were few distinguished persons whose acquaintance he did not make, and no one could come in contact with him without being impressed by the strong and shrewd character underlying a superficial but real good nature.

In later life he lived chiefly at Skibo Castle in Sutherlandshire, and his early detestation of British institutions could not be maintained when he voluntarily made his residence there. One of his dreams was the union of Great Britain and the United States. The other great dream, the abolition of war, received a great shock in 1914. During the conflict he relapsed into complete silence and seclusion.