Andrew Carnegie

Andrew Carnegie was born in Scotland in 1835. He and his family immigrated to the United States and settled in Pittsburgh, Pennsylvania , in 1848. By that time, Pittsburgh was already a heavily industrialized city. Smog hovered over the streets and buildings, and black soot filled people's noses and covered their clothes.

Carnegie began working full time at the age of thirteen, and he continued to work until the age of sixty-five. With a start in the cotton mills, he moved to hold various positions with telegraph agencies, the railroad industry , and other enterprises. Having wisely invested his money, Carnegie saved enough to start his own business in the 1870s. With Pittsburgh being one of the major industrial cities in America at the time, it only made sense for him to get involved in a key industrial business: the steel industry .

Carnegie established Carnegie Steel in the 1870s, and by employing a keen sense of business and understanding of technology, his personal net worth reached $400,000 (about $5 million in twenty-first century money) by the time he was thirty-three years old. In April 1887, Carnegie married Louise Whitfield; ten years later, their one and only child—a daughter—was born.

Carnegie's steel mills were the most modern of their time, models for those yet to come. His determination to undersell the competition and rule the industry made him incredibly wealthy, but his employees were paid unjustly low wages and worked in unsafe conditions. Injuries were common occurrences in the Carnegie mills, even though his mills had the latest and most advanced equipment. In order to pay for that equipment, the steel magnate underpaid his laborers and cut corners wherever he could regarding safety.

Writes “The Gospel”

Carnegie's instinctive business sense and rags-to-riches story made him one of the most respected men in America. And yet his wealth troubled him. Having grown up in poverty, he understood the struggles and suffering of the poor. Despite this concern, he continued to keep his workers in poverty, and so his was a life of paradox (inconsistency).

In 1889, Carnegie published “The Gospel of Wealth,” an essay in which he explained his philosophy on wealth and how to distribute it after death. He believed the wealthy had a responsibility to give back to society and work for its greater good. Such a philosophy attracted much attention at a time when the bulk of society's wealth was concentrated in the hands of very few, and those very few believed for the most part that they deserved their wealth. They also believed that those living in poverty did so because God willed it.

Homestead strike

Personal philosophy aside, Carnegie's mills were operated by unhappy laborers. These employees belonged to a union (a formally organized association of workers that advances its members’ views on wages, work hours, and labor conditions). Carnegie and his business partner, Henry Clay Frick (1848–1919), had managed to keep union laborers under control at their other steel mills. But the mill in Homestead, Pennsylvania, was different; the union still had power.

In late June 1892, the union expressed its dissatisfaction with conditions at the Homestead mill but indicated they were willing to negotiate. Carnegie was in Scotland at the time, so Frick was in charge. Instead of negotiating, he shut down the mill and locked out thirty-eight hundred workers. On July 6, workers seized the mill and sealed off the town from strikebreakers (temporary workers who would do the job the strikers would not).

Frick called in three hundred Pinkerton Detective Agency men, and what ensued was twelve hours of mayhem and violence. While the detectives used rifles, the laborers used whatever else was at their disposal, including cannons. Four times the detectives tried to surrender; four times their white flag was shot down. Finally, their surrender was accepted. Both sides had suffered fatalities, and the surviving detectives were brutally beaten by townspeople.

Frick, still unwilling to negotiate, called in eighty-five hundred National Guard troops to allow strikebreakers to go to work at the mill. Although many businesses in town refused to serve the strikebreakers, public sentiment outside of Homestead was against the union workers, mostly because they had used violence.

Carnegie got word of what was happening. Although he publicly supported Frick's decisions, in private, he berated him for his lack of good judgment. The partnership ended, as did the friendship. In the end, the union workers failed to achieve any of their goals. Three hundred of them reapplied and were hired again. An angry Carnegie slashed their wages even further and completely crushed the union in that mill.

Retires to a life of philanthropy

Carnegie sold his steel empire to U.S. Steel in 1901 for $250 million, the equivalent of about $4.5 billion in twenty-first century money. With that sale, he became the wealthiest man in the world. He was sixty-five years old.

Within ten years, Carnegie had donated more than $43 million to libraries and other causes. In 1911, he founded the Carnegie Corporation to promote the advancement of knowledge and understanding. That foundation remains one of the largest philanthropic groups in the twenty-first century.

By the time of his death in 1919, Carnegie had given away $350 million, with instructions to give away the remaining $30 million to various foundations and charities. His legacy lives on in the many diverse charitable foundations he established.