Andrew Carnegie

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Andrew Carnegie

NameAndrew Carnegie
DOB25 November 1835
(Age 83 Yr. )
Died11 August 1919

Personal Life

Profession Industrialist and Philanthropist
Birth Place Dunfermline, Fife, Scotland,

Physical Appearance

Height approx 5.3 feet
Weight approx 60 kg
Eye Color Light blue
Hair Color White

Family

Parents

Father: William Carnegie

Mother: Margaret Morrison Carnegie

Marital Status Married
Spouse

Louise Whitefield

Childern/Kids

 Margaret Carnegie Miller

Siblings

Brother: Thomas M. Carnegie

Andrew Carnegie November 25, 1835 – August 11, 1919) was a Scottish-American industrialist and philanthropist. Carnegie led the expansion of the American steel industry in the late 19th century and became one of the richest Americans in history. He became a leading philanthropist in the United States, Great Britain, and the British Empire. During the last 18 years of his life, he gave away around $350 million (roughly $5.5 billion in 2021), almost 90 percent of his fortune, to charities, foundations and universities. His 1889 article proclaiming "The Gospel of Wealth" called on the rich to use their wealth to improve society, expressed support for progressive taxation and an estate tax, and stimulated a wave of philanthropy.

Carnegie was born in Dunfermline, Scotland, and emigrated to Pittsburgh, United States, with his parents in 1848 at age 12. Carnegie started work as a telegrapher, and by the 1860s had investments in railroads, railroad sleeping cars, bridges, and oil derricks. He accumulated further wealth as a bond salesman, raising money for American enterprise in Europe. He built Pittsburgh's Carnegie Steel Company, which he sold to J. P. Morgan in 1901 for $303,450,000 (equal to $9,883,973,400 today); it formed the basis of the U.S. Steel Corporation. After selling Carnegie Steel, he surpassed John D. Rockefeller as the richest American for the next several years.

Carnegie devoted the remainder of his life to large-scale philanthropy, with special emphasis on building local libraries, world peace, education, and scientific research. He funded Carnegie Hall in New York City, the Peace Palace in the Netherlands, founded the Carnegie Corporation of New York, Carnegie Endowment for International Peace, Carnegie Institution for Science, Carnegie Trust for the Universities of Scotland, Carnegie Hero Fund, Carnegie Mellon University, and the Carnegie Museums of Pittsburgh, among others.

Early Life

Andrew Carnegie was born to Margaret Morrison Carnegie and William Carnegie in Dunfermline, Scotland, in a typical weaver's cottage with only one main room, consisting of half the ground floor, which was shared with the neighboring weaver's family. The main room served as a living room, dining room and bedroom. He was named after his paternal grandfather. In 1836, the family moved to a larger house in Edgar Street (opposite Reid's Park), following the demand for more heavy damask, from which his father benefited. He was educated at the Free School in Dunfermline, a gift to the town from the philanthropist Adam Rolland of Gask.

Carnegie's maternal uncle, Scottish political leader George Lauder, Sr., deeply influenced him as a boy by introducing him to Robert Burns' writings and historical Scottish heroes such as Robert the Bruce, William Wallace, and Rob Roy. Lauder's son, also named George Lauder, grew up with Carnegie and became his business partner. When Carnegie was 12, his father had fallen on tough times as a handloom weaver. Making matters worse, the country was in starvation. His mother helped support the family by assisting her brother and by selling potted meats at her "sweetie shop", leaving her as the primary breadwinner. Struggling to make ends meet, the Carnegies then decided to borrow money from George Lauder, Sr. and move to Allegheny, Pennsylvania, in the United States in 1848 for the prospect of a better life.Carnegie's migration to America would be his second journey outside Dunfermline – the first being an outing to Edinburgh to see Queen Victoria.

In September 1848, Carnegie arrived with his family in Allegheny. Carnegie's father struggled to sell his product on his own. Eventually, the father and son both received job offers at the same Scottish-owned cotton mill, Anchor Cotton Mills. Carnegie's first job in 1848 was as a bobbin boy, changing spools of thread in a cotton mill 12 hours a day, 6 days a week in a Pittsburgh cotton factory. His starting wage was $1.20 per week ($38 by 2022 inflation).

His father quit his position at the cotton mill soon after, returning to his loom and removing him as breadwinner once again. But Carnegie attracted the attention of John Hay, a Scottish manufacturer of bobbins, who offered him a job for $2.00 per week ($63 by 2022 inflation). In his autobiography, Carnegie writes about the hardships he had to endure with this new job.

Soon after this Mr. John Hay, a fellow Scotch manufacturer of bobbins in Allegheny City, needed a boy, and asked whether I would not go into his service. I went, and received two dollars per week; but at first the work was even more irksome than the factory. I had to run a small steam-engine and to fire the boiler in the cellar of the bobbin factory. It was too much for me. I found myself night after night, sitting up in bed trying the steam gauges, fearing at one time that the steam was too low and that the workers above would complain that they had not power enough, and at another time that the steam was too high and that the boiler might burst.

 

Industrialist

1875-1900: Steel impire

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 by adopting and adapting the Bessemer process, which allowed the high carbon content of pig iron to be burnt away in a controlled and rapid way during steel production. Steel prices dropped as a result, and Bessemer steel was rapidly adopted for rails; however, it was not suitable for buildings and bridges.

The second was in his vertical integration of all suppliers of raw materials. In 1883, Carnegie bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a 425-mile (684 km) long railway, and a line of lake steamships. 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 iron per day.

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 in Braddock (named for John Edgar Thomson, Carnegie's former boss and president of the Pennsylvania Railroad), the 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 combined his assets and those of his associates in 1892 with the launching of the Carnegie Steel Company.

Carnegie's success was also due to his relationship with the railroad industries, which not only relied on steel for track, but were also making money from steel transport. The steel and railroad barons worked closely to negotiate prices instead of allowing free-market competition.

Besides Carnegie's market manipulation, United States trade tariffs were also working in favor of the steel industry. Carnegie spent energy and resources lobbying Congress for a continuation of favorable tariffs from which he earned millions of dollars a year. Carnegie tried to keep this information concealed, but legal documents released in 1900, during proceedings with the ex-chairman of Carnegie Steel, Henry Clay Frick, revealed how favorable the tariffs had been.

 

1901: U.S Steel

In 1901, Carnegie was 65 years of age and considering retirement. He reformed his enterprises into conventional joint stock corporations as preparation for this. John Pierpont Morgan was a banker and America's most important financial deal maker. He had observed how efficiently Carnegie produced profits. He envisioned an integrated steel industry that would cut costs, lower prices to consumers, produce in greater quantities 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 March 2, 1901, and formed the United States Steel Corporation. It was the first corporation in the world with a market capitalization of over $1 billion.

The buyout, secretly negotiated by Charles M. Schwab (no relation to Charles R. Schwab), was the largest such industrial takeover in United States history to date. The holdings were incorporated in the United States Steel Corporation, a trust organized by Morgan, and Carnegie retired from business. His steel enterprises were bought out for $303,450,000.

Carnegie's share of this amounted to $225.64 million (in 2021, $7.35 billion), which was paid to him in the form of 5%, 50-year gold bonds. The letter agreeing to sell his share was signed on February 26, 1901. On March 2, the circular formally filed the organization and capitalization (at $1.4 billion – 4% of the U.S. gross domestic product at the time) of the United States Steel Corporation actually completed the contract. The bonds were to be delivered within two weeks to the Hudson Trust Company of Hoboken, New Jersey, in trust to Robert A. Franks, Carnegie's business secretary. There, a special vault was built to house the physical bulk of nearly $230 million worth of bonds.

Death

Carnegie died on August 11, 1919, in Lenox, Massachusetts, at his Shadow Brook estate, of Bronchial Pneumonia. He had already given away $350,695,653 (approximately US$5.49 billion in 2021 dollars) of his wealth. After his death, his last $30,000,000 was given to foundations, charities, and to pensioners. He was buried at Sleepy Hollow Cemetery in Sleepy Hollow, New York. The grave site is located on the Arcadia Hebron plot of land at the corner of Summit Avenue and Dingle Road. Carnegie is buried only a few yards away from union organizer Samuel Gompers, another important figure of industry in the Gilded Age.