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Historically Speaking

Historically Speaking: The Architects of America- Part 3

America’s Man of Steel

Editor’s Note: Our third mogul of the six who key to building America was steel industrialist and philanthropist Andrew Carnegie (pronounced Car-Nay-Kee), a Scottish-American born Nov. 25, 1835.

Carnegie led the expansion of the American steel industry in the late 19th century and is often identified as one of the richest people in the world. In 1901, when he sold out $490 million, Carnegie surpassed John D. Rockefeller in wealth.

Carnegie started work as a telegrapher, and by the 1860s had investments in railroads, railroad sleeping cars, bridges, and oil derricks. He built Pittsburgh’s Carnegie Steel Company (today known as U.S. Steel). Carnegie devoted the remainder of his life to large-scale philanthropy, with special emphasis building more than 3,000 libraries, promoting world peace, education, and scientific research.

One of Carnegie’s two great innovations was in the cheap and efficient mass production of steel by adopting and adapting the Bessemer process for steel making.

Carnegie’s second road to wealth was in his vertical integration of all suppliers of raw materials. In the late 1880s, Carnegie Steel was the largest manufacturer in the world of pig iron, steel railroad rails with a capacity to produce approximately 2,000 tons of pig metal per day.

In 1889, Carnegie was one of more than 50 members of the South Fork Fishing and Hunting Club, which has been blamed for the now-infamous Johnstown (Pennsylvania) Flood that killed 2,209 people when 20 million tons of water came pounding down from the South Fork Dam.

The South Fork Dam was 72 feet high and 931 feet long. Between 1881 when the club was opened, and 1889, the dam frequently sprang leaks and was patched, mostly with mud and straw.

Although Carnegie’s Cambria Iron and Steel’s facilities were heavily damaged by the flood, they returned to full production within a year. After the flood, Carnegie built Johnstown a new library to replace the one destroyed in the flood.

In 1892, the Homestead Strike was a bloody labor confrontation lasting 143 days in 1892, one of the most serious in U.S. history. The conflict was centered on Carnegie Steel’s main plant and grew out of a dispute between the National Amalgamated Association of Iron and Steel Workers and the Carnegie Steel Company.

After a recent increase in profits by 60 percent, the company refused to raise workers’ pay by more than 30 percent. When some of the workers demanded the full 60 percent, Chairman Henry Clay Frick locked out the union. Workers considered the stoppage a “lockout” by management, not a “strike” by workers. Frick brought in thousands of strikebreakers to work the steel mills, along with 300 Pinkerton agents from New York City and Chicago to safeguard them.

On July 6, a fight broke out in which 10 men — seven strikers and three Pinkertons, — were killed and hundreds were injured. Pennsylvania Gov. Robert Pattison ordered two brigades of state militia to the strike site.

Afterwards, the company successfully resumed operations with non-union immigrant employees in place of the Homestead plant workers, and Carnegie returned to the United States. However, Carnegie’s reputation was permanently damaged by the Homestead events.

In 1901, Andrew Carnegie sold all of his holding to financier J.P. Morgan. To that date, the buyout was the largest such industrial takeover in United States history. The holdings were incorporated in the United States Steel Corporation, a trust organized by Morgan. Carnegie’s steel enterprises were bought out at a dollar figure equivalent to 12 times their annual earnings — $480 million (in 2017, $14.1 billion).

Carnegie’s final share of this amounted to $225,.6 million ($6.64 billion in 2017 money.)

Among his many philanthropic efforts, the establishment of more than 3,000 public libraries throughout the United States, Britain, Canada and other English-speaking countries was especially prominent. The first Carnegie library opened in 1883 in Dunfermline, Scotland, his birthplace.

Carnegie died on Aug. 11, 1919, at his estate in Lenox, Mass. From his vast fortune, Carnegie gave away $350.6 million of the $490 million he had from the sale of U.S. Steel. That amounts to $76.9 billion in today’s money. Carnegie is buried in Sleepy Hollow, only a few yards away from union organizer Samuel Gompers, another important figure of industry during the Gilded Age.

NEXT WEEK: J. Pierpont Morgan


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