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Notes and Quotes- December 15, 2019

America’s Man of Steel

By Tom Morrow

Andrew Carnegie is the perfect example of an immigrant building a “rags to riches” estate. He is one of the six leading industrial mogul who was key to the building of America. He was  America’s leading steel industrialist turned philanthropist, whose money was distributed throughout the late 1880s and most of the 20th century.

Carnegie, (pronounced Car-NAY-Gee), was born into a poor family Nov. 25, 1835, in Dunfermine, Scotland. In 1848, at age 12, he emigrated to America with his parents, starting work as a teen-ager becoming one of the richest man in the history of the world.

Carnegie’s uncle, George Lauder, Sr., a Scottish political leader, deeply influenced young Andrew by introducing the writings of Robert Burns and historical Scottish heroes such as Robert the Bruce, William Wallace, and Rob Roy. Lauder’s son, George Lauder, Jr., grew up with Carnegie and would become his business partner. This early introduction to literature began a life-long passion of Carnegie, which would later lead to the establishment of libraries throughout the English-speaking world.

In America, Carnegie began as a telegrapher and built a fortune that ended up with some $490 million (14.1 billion in 2019 dollars).

Carnegie’s wealth primarily was important to the building of America beginning with his early investments in railroads, railroad sleeping cars, bridges, and oil derricks. He created Pittsburgh’s Carnegie Steel Company (today known as U.S. Steel).

One of Carnegie’s two great industrial innovations was in the cheap and efficient mass production of steel by adopting and adapting the “Bessemer” process of turning iron into steel. Carnegie’s second road to wealth was in his vertical integration of all suppliers of raw materials. By the late 1880s, Carnegie Steel was the world’s largest manufacturer of pig iron, and steel railroad rails producing approximately 2,000 tons of per day.

Carnegie’s name was somewhat tarnished by an event he had little to do with. In 1889, he was one of more than 50 members of the South Fork Fishing and Hunting Club. The club was 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 club had failed to properly reinforce the club-owned dam.

To further blacken Carnegie’s name, in 1892, workers began the Homestead Strike, which was a bloody labor confrontation lasting 143 days. It was one of the most serious work stoppage in U.S. history.

The company refused to raise workers’ pay. Carnegie was on a belonged vacation in Scotland during the strike, Company chairman Henry Clay Frick locked out the union. 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 Pinkerton agents — 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, Carnegie returned to the United States, but his reputation was permanently damaged by the Homestead events.

In 1901, Carnegie sold all of his holding to fellow mogul and financier J.P. Morgan, another mogul who helped build America. The 1901, buyout was the largest such industrial takeover in U.S. history. The holdings were incorporated into what became known as 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 the company’s annual earnings. Carnegie’s net share of this amounted to $225,.6 million ($6.64 billion in 2019 money).

Among his many philanthropic efforts, the establishment of more than 3,000 public libraries throughout the United States, Britain, Canada, Australia, and New Zealand, South Africa, India, and other English-speaking countries. Significantly, the first Carnegie library opened in 1883 in Dunfermline, Scotland, his birthplace. Over the years as interest continue to build his estate, a total of some $350 million (about 90 percent of his wealth) went to fund various charities, foundations, and universities throughout the United States and the British Empire.  Carnegie is also remembered for his special emphasis promoting world peace, education, and scientific research.

Carnegie died on Aug. 11, 1919, at his estate in Lenox, Mass. From his vast fortune, Carnegie is buried in Sleepy Hollow, only a few yards away from union organizer Samuel Gompers, another important industrial figure of the late 1880s and early 1900s – a period known as the Gilded Age.