Andrew Carnegie
Andrew Carnegie was a Scottish-born industrialist,
businessman, and a major philanthropist. He was an
immigrant as a child with his parents. He built Pittsburgh's
Carnegie Steel Company, which was later merged with
Elbert H. Gary's Federal Steel Company and several smaller
companies to create U.S. Steel. With the fortune he made
from business, he turned to philanthropy and interests in
education, founding the Carnegie Corporation of New York,
Carnegie Endowment for International Peace, and Carnegie
Mellon University in Pittsburgh.
While Carnegie paid his employees the low wages
typical of the time, he later gave away most of his money to
fund the establishment of many libraries, schools, and
universities in America, the United Kingdom and other
countries, as well as a pension fund for former employees.
He is often regarded as the second richest man in history. Carnegie started as a
telegrapher and by the 1860s had investments in railroads, railroad sleeping cars,
bridges and oil derricks. He built further wealth as a bond salesman raising money for
American enterprise in Europe.
Steel was where he made his fortune. In the 1870s, he founded the Carnegie
Steel Company, a step which cemented his name as one of the “Captains of Industry”.
By the 1890s, the company was the largest and most profitable industrial enterprise in
the world. Carnegie sold it to J.P. Morgan in 1901, who created US Steel. Carnegie
devoted the remainder of his life to large-scale philanthropy, with special emphasis on
local libraries, world peace, and education and scientific research.
Carnegie made his fortune in the steel industry, controlling the most extensive
integrated iron and steel operations ever owned by an individual in the United States.
One of his two great innovations was in the cheap and efficient mass production of steel
rails for railroad lines. The second was in his vertical integration of all suppliers of raw
materials. In the late 1880s, Carnegie Steel was the largest manufacturer of pig iron,
steel rails, and coke in the world, with a capacity to produce approximately 2,000 tons of
pig metal per day. In 1888, Carnegie bought the rival Homestead Steel Works, which
included an extensive plant served by tributary coal and iron fields, a 425-mile (685 km)
long railway, and a line of lake steamships. Carnegie combined his assets and those of
his associates in 1892 with the launching of the Carnegie Steel Company.
By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned
a large part of it. Carnegie's empire grew to include the J. Edgar Thomson Steel Works,
(named for John Edgar Thomson, Carnegie's former boss and president of the
Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the
Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works,
the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines.
Carnegie, through Keystone, supplied the steel for and owned shares in the landmark
Eads Bridge project across the Mississippi River at St. Louis, Missouri (completed
1874). This project was an important proof-of-concept for steel technology, which
marked the opening of a new steel market.
In 1901, Carnegie was 66 years old and considering retirement. He reformed his
enterprises into conventional joint stock corporations as preparation to this end. John
Pierpont Morgan was a banker and perhaps America's most important financial deal
maker. He had observed how efficiently Carnegie produced profit. He envisioned an
integrated steel industry that would cut costs, lower prices to consumers and raise
wages to workers. To this end, he needed to buy out Carnegie and several other major
producers and integrate them into one company, thereby eliminating duplication and
waste. He concluded negotiations on 2 March 1901, and formed the United States Steel
Corporation. It was the first corporation in the world with a market capitalization in
excess of $1 billion.
Carnegie spent his last years as a philanthropist. From 1901 forward, public
attention was turned from the shrewd business acumen which had enabled Carnegie to
accumulate such a fortune, to the public-spirited way in which he devoted himself to
utilizing it on philanthropic projects. He had written about his views on social subjects
and the responsibilities of great wealth in Triumphant Democracy (1886) and Gospel of
Wealth (1889).
Among his many philanthropic efforts, the establishment of public libraries
throughout the United States, the United Kingdom, and other English-speaking
countries was especially prominent. Carnegie libraries, as they were commonly called,
were built in many places. His method was to build and equip, but only on condition that
the local authority matched that by providing a site and operating maintenance. To
secure local interest, in 1885, he gave $500,000 to Pittsburgh for a public library, and in
1886, he gave $250,000 to Allegheny City for a music hall and library; and $250,000 to
Edinburgh, Scotland, for a free library. In total Carnegie funded some 3,000 libraries,
located in 47 states. Carnegie also built libraries in Canada and overseas in the United
Kingdom including the Republic of Ireland, Australia, New Zealand, the West Indies,
and Fiji. He also donated £50,000 to help set up the University of Birmingham in 1899.
The Broome County Public Library in New York opened in October 1904. Originally
called the Binghamton Public Library, it was created with a gift of $75,000 from Andrew
Carnegie. The building was designed to serve as both a public library and a community
center.
He gave $2 million in 1901 to start the Carnegie Institute of Technology (CIT) at
Pittsburgh, and the same amount in 1902 to found the Carnegie Institution at
Washington, D.C. He later contributed more to these and other schools. CIT is now part
of Carnegie Mellon University. Carnegie served on the Board of Cornell University.
His interest in music led him to fund construction of 7,000 church organs. He built
and owned Carnegie Hall in New York City.