Andrew Carnegie fortune. Andrew Carnegie, American entrepreneur, major steel industrialist: biography, business, cause of death
Andrew Carnegie. He was one of the hundred most outstanding businessmen of the 20th century and was one of the best businessmen of his generation - he achieved his main successes in the 19th century.
The fact that Carnegie was among those chosen proves that he influenced the course of the commercial revolution in the United States at the turn of the 19th and 20th centuries.
He was perhaps the first of a generation of businessmen who were at the forefront of industrial development in the United States and around the world, beginning with steel production and the construction of railroads. At the end of his long career, he created the largest steel company in the country and amassed a huge fortune.
Andrew Carnegie was born in Dunfermline, Scotland, on November 25, 1835. In 1848, an economic crisis began, and Carnegie's father was forced to emigrate with his family to the United States. The family settled in Ellegheny, near Pittsburgh, Pennsylvania.
Twelve-year-old Andrew got a job at a local cotton factory, and after a while he got a job as a messenger in the Pittsburgh telegraph office. The head of the western department of the Pennsylvania Railroad, Thomas Scott, noticed the smart boy and offered him the position of secretary with a salary of $50 a month - at that time this was a solid income for a teenager. It was Scott who showed Andrew the path to wealth, demonstrating how profitable it was to invest in new companies. On Scott's recommendation, Carnegie bought stock in the Adams Express Company, taking money from his mother, who had remortgaged her house. Soon after, he borrowed more money and invested it in a successful railroad sleeping car business.
During the Civil War, Andrew Carnegie served with Scott in Washington. Later, after the final victory of the Confederacy, he took Scott's former position and became the head of the western department of the Pennsylvania Railroad. But the entrepreneur's spirit prevailed, and soon Andrew Carnegie organized a company for the construction of metal bridges, the Keystone Bridge Company, and took part in a number of other speculative projects that were successfully implemented.
While Carnegie was developing his activities in the United States, English inventor and businessman Henry Bessemer created the famous production process that made it possible to industrially manufacture steel from iron. During one of his regular visits to Great Britain, Andrew Carnegie accidentally had the opportunity to become familiar with the operating principle of the Bessemer converter. It was truly a revelation.
Andrew Carnegie hurried to the USA, founded the company Carnegie, McCandless & Co, built a blast furnace in 1870 and began experimenting with the Bessemer process. Then he built a steel smelting furnace in Braddock, and in 1880 his plant was already operating around the clock. The annual profit was $2 million. In 1881 the company was reorganized as Carnegie Bros. & Co. Carnegie was the majority owner. In 1881 he bought Henry S. Frick's interest in the coke plant, and Frick became the steelmaker's closest associate.
In 1889, Andrew Carnegie moved to New York to continue his research into the steel production process. Spent six months with his family in Scotland. During his absence, the chairman of Carnegie Bros. & Co appointed Frick, who was responsible for the day-to-day operations of the company. At that time, the company was a series of disparate production lines - separate rolling mills and furnaces scattered throughout Pittsburgh. Frick consolidated the production sites into a single plant, which later became the world's largest steel foundry, introduced a centralized management system and integrated production. The $25 million company became the Carnegie Steel Company.
Unfortunately for Andrew Carnegie, a huge scandal erupted while Frick was running the company. In an attempt to reduce costs and increase profitability, Frick cut his piece rates. Outraged by these actions, the United Iron and Steel Workers Union called on Carnegie Homestead workers to protest. Frick, instead of settling the situation through negotiations, added fuel to the fire by resorting to the help of strikebreakers.
On the day of the strike, three hundred strikebreakers, along with armed guards, rode barges down the Monongahela River. The real end of the world has begun. During the armed clash, ten people were killed and sixty were wounded. Martial law had to be introduced at the plant.
Upon learning of these events, Andrew Carnegie became indescribably furious. After all, Frick knew very well that the use of strikebreakers was contrary to Carnegie’s moral standards, and therefore was strictly prohibited. However, Carnegie, as manager and owner of the company, had to take full responsibility for what happened, and his reputation was tainted for many years by the blood of the workers who died during the incident. And although he refrained from openly criticizing Frick's actions, their relationship was forever damaged.
The company continued to prosper: annual steel production increased to 332,111 tons in 1889, and to 2,663,412 tons in 1899. Profits increased from $2 million to $40 million. In 1889, Carnegie bought out Frick's share, sparing $15 million. But even this break could not put an end to the personal hostility of the businessmen. In 1901, Frick returned with the infamous and purchased the Carnegie Company for $500 million, founding the US Steel Corporation - the world's largest steel corporation worth $1.4 billion.
Andrew Carnegie played a leading role in the industrialization of the United States. His success story is the real embodiment of the “American Dream”: a Scottish boy from a poor family achieved incredible success. During his lifetime, some considered him a smug despot and an arrogant exploiter, while others, on the contrary, saw him as a wise and generous person, a smart entrepreneur. Andrew Carnegie had many enviable qualities, but one of them deserves special mention: he always kept his nose to the wind, relying on his intuition, and took advantage of any opportunities that could be useful for the implementation of his business projects.
Andrew Carnegie is remembered as a philanthropist and entrepreneur. With his funds, the Carnegie Institute in Pittsburgh, the Carnegie Institute of Technology, the Carnegie Washington Institute, and three thousand public libraries were built. The "Steel King" died in August 1919. In his twilight years, guided by his moral principles, he donated $350 million to charitable causes.
The site's observer studied the biography of American entrepreneur Andrew Carnegie, who built Carnegie Steel, significantly influenced the development of the US steel industry, and also became one of the largest philanthropists in history.
Major American industrialists of the late 19th and early 20th centuries left their mark on the history not only of the United States, but of humanity in general. One of them was Andrew Carnegie, a steel magnate who started a business by mortgaging property and taking out a loan to purchase shares.
Childhood of Andrew Carnegie. First job
Jones came to them from the factory where he worked for $2 a day. After he proved himself to be an effective leader, Carnegie wanted to offer him a share in the enterprise, but he refused, saying that it would distract him. To reward the manager, his salary was greatly increased.
Time-tested approaches were used at the plant: a clear count of the materials used was kept, possible income and expenses were carefully forecasted. The production was equipped with the latest machines, and extremely qualified personnel were selected.
The company was doing well. Having launched the plant, Carnegie sent his sales agents throughout the United States, allowing them to make discounts. The agents successfully completed the task. The average cost of a ton of steel rails was then $70, and in the first month the company earned $11 thousand.
In 1878, Carnegie, confident in the reliability of his managers, decided to go on a trip around the world. While on the road, he began writing a book called Round the World, and became acquainted with many people and teachings, including Buddhism and Confucianism. All this made a tremendous impression on Carnegie. In the future, he will write several more books and articles in which he will express his worldview and views on charity.
After returning from his trip, Carnegie and his family went to his hometown in Scotland and founded a library there. His business empire grew in momentum: Carnegie’s company was the first in the United States to produce ferromanganese and was one of the first to launch all the necessary processes for steel production at one enterprise. For this purpose, the number of blast furnaces was increased and mines were acquired.
Carnegie continued to buy steel mills. A high-profile acquisition was the Homestead Steel Works, which cost $1 million. It was one of the largest factory complexes in the United States with its own mines and steamships; the number of workers in the complex was about 2-3 thousand people. Carnegie added several more plants to the Homestead Steel Works to make steel products. They produced literally everything - from nails to beams.
In 1886, Carnegie fell ill with typhus. Doctors left him little chance of survival, but he still recovered. His brother and mother could not cope with the disease, and Andrew found himself in America for the first time without relatives.
In 1889, all Carnegie-controlled enterprises were merged into the Carnegie Steel Company, which became the world's largest producer of coke, steel rails and cast iron.
Johnstown Flood and Homestead Strike
When meeting the personality of Carnegie, one is surprised by the progressive views of the entrepreneur, his attitude towards workers and his ability to make compromises. This impression is blurred only by two events associated with the name of the billionaire.
The famous Johnstown Flood occurred in 1889. By all accounts, the culprits were several wealthy members of the country Hunting and Fishing Club, among whom was Carnegie. In 1881 they purchased a dam and reservoir, which they turned into a lake and surrounded by clubhouses. In order to develop the territory, the height of the dam was reduced - however, there is a version that it suffered from theft of the previous owners.
In 1889, due to excess rainfall, the dam broke and a wall of water fell on the city of Johnstown, killing 2,200 people. The flood is still considered one of the largest in US history and the first disaster to receive extensive media coverage around the world. Club members did not leave people in trouble and helped them with money. There is information that Carnegie, who was deeply affected by the incident, allocated money to help the victims, and he himself tried to unwind in Scotland.
At the beginning of 1892, the entrepreneur again found himself in the midst of a scandal - this time over the situation of workers at the Homestead factories, where one of the largest American strikes began. In his autobiography, Carnegie talks about its reasons.
Piece workers at the entrepreneur's factories received payment for each ton of steel and entered into a contract for three years. Carnegie, who was actively updating the equipment of the enterprise, took care of installing new machines that increased production and the wages of these workers by 60%. The company's management offered them new contracts, which were to come into force when the old ones ended. Under the terms of the new contracts, this additional 60% was divided between the company and the workers, which was explained by the desire to cover costs for improving equipment.
These 218 people, knowing that the company had to urgently fulfill several large orders, refused such conditions. The plant director, having talked with the rest of the workers (there were more than 3,000 people), received assurances that they would not join the strike and would fulfill the plan.
For protection purposes, a sheriff and a detachment of soldiers were allowed into the plant. 218 strikers also took up arms and a brawl broke out. The state governor was forced to send the army into the plant, and the strikers predictably lost. Carnegie, according to him, was in Scotland at that time and received information exclusively from letters, and after returning, a flurry of criticism fell on him from all sides.
In reality, everything was much more complicated: due to dissatisfaction with lower wages and longer shifts, mass worker protests began. The enterprise was managed by Henry Frick, who by that time had earned millions from his coke production company H.C. Frick & Company. His businesses became part of Carnegie Steel, and he himself was chairman of the Carnegie company. There is an opinion that Carnegie did not always listen to Frick: he had to keep work processes under strict control and serve as a kind of antipode to the good Carnegie, who willingly negotiated with workers.
Before the start of the strike, Frick tried to split the forces of the workers by increasing the salaries of half of them, but he failed, and on June 30 a lockout was declared. The Iron and Steel Association responded by calling for a strike, involving 8,000 people.
Frick's next idea was to send almost 3 thousand strikebreakers to work. They were to be guarded by 300 armed agents from the Pinkerton Bureau. All this led to a shootout and escalation of the conflict - the governor was forced to send in troops.
The strike, which was actively supported by trade unions, lasted six months and was covered in the media all this time. Carnegie was accused of cowardice and fleeing the country. The head of the company actually spent the entire six months in Scotland, but this is not so strange considering that by this time he had already retired from managing the company.
Sale of Carnegie Steel. Charity
In the early 1890s, Carnegie's businesses also faced competition. Regular clients decided that they would now be able to dictate their terms to the entrepreneur, and began to demand discounts under the threat of refusing his services.
Soon, Carnegie Steel began to enter the markets where the blackmail companies operated. Carnegie poured millions into creating new products and quickly took a leading position, and his recent clients could not oppose him. The company experienced steady growth and at the beginning of the 20th century produced 25% of all steel in the United States. In 1901, his company’s income amounted to an astronomical $40 million for that time. However, Carnegie was hardly actively involved in business: he spent six months in Scotland.
In 1900, Carnegie's new book Gospel of Wealth was published, in which he stated that industrialists should not only provide jobs, but also conduct charitable activities. The author noted that the first half of life needs to accumulate capital, and in the second, spend it on the needs of others.
The news that Carnegie was retiring quickly reached major industrialists and bankers. According to some reports, Rockefeller was the first to approach him, offering just over $100 million. Carnegie refused and did everything to ensure that the oil tycoon would not contact him again.
The next was John Morgan, one of the largest bankers with whom Carnegie, unlike Rockefeller, had no enmity. To begin with, Morgan found out how much the entrepreneur wanted and received an answer - $480 million. He agreed, and later noted that he was ready to give $100 million more. Carnegie himself received $225 million from the deal.
There is a version that Carnegie knew how much his company was needed by Morgan, who was creating the U.S. trust at that time. Steel, so he spread rumors that he was going to build railroads from his steel. This allegedly became an additional argument to accept all the conditions of the steel magnate.
The entrepreneur's further activities were exclusively philanthropic. First, he founded a fund to help workers, where he invested $4 million, then he began building libraries, starting in the USA. Their total number in different countries eventually reached 3000.
Carnegie also donated a lot to universities - mainly small ones - and scientific developments in general. In 1902, he created the Carnegie Institution in Washington, where he eventually invested more than $25 million. This institution is engaged in various types of scientific research. In the same year, the Heroes Fund was founded to reward people who accomplished a feat. If a person was awarded posthumously, his family received the money.
In 1905, the Carnegie Foundation was opened, which was supposed to support professors who retired without money for a decent life. The entrepreneur emphasized that work in the education sector is too poorly paid. In 1910, the Carnegie Endowment for International Peace was created to inform the public on international policy issues.
To talk about all of Carnegie’s charitable initiatives, you need to write a separate article: in total, he invested $350 million in his philanthropic activities, without forgetting about his family and leaving his wife, daughter and nephews enough money for a comfortable life.
Carnegie devoted the last years of his life to philanthropic activities, traveling, writing books and trying to resist militaristic sentiments in society. He died in 1919 from pneumonia.
Only those who choose one path and follow it all their lives are truly successful.
Prologue. Scotland, the Scots and Uncle Scrooge
Island of Great Britain. To the north of England, from the Mull of Galloway to Dunnet Head, lies an amazing land. Harsh mountains and no less harsh sea.
The country sung by R.L. Stevenson, heather honey, and Loch Ness with a mysterious inhabitant named Nessie.
A country of proud men, descendants of the Gaels, who still wear kilts.
Country Scotland.
The Scots are distinguished not only by their independent, but also by their thrifty character. The Scotsman William Peterson was directly involved in the founding of the Bank of England in 1694. The Royal Bank of Scotland (RBS), one of the oldest (since 1727) and respected financial institutions in the world. And in 1810, Priest Henry Duncan established a small financial organization to save the money of his parishioners. This happened in the Scottish village of Rathwell, Dumfriesshire. From the mutual society of the flock of G. Duncan, the term “Savings Bank” entered history.
Over time, the careful attitude towards the money of the former highlanders began to be perceived (obviously, with the light hand of the “good neighbors” of the English) as a sign of special Scottish stinginess. Countless jokes and anecdotes have appeared on this topic.
… The end of the year. The owner of a Scottish company pleases his employees: “You have done a great job this past year. Everyone will receive a check from me for £20. If next year is as successful, I will sign these checks...
... Dialogue in a Scottish prison.
Why are you imprisoned?
He broke a display case in a jewelry store with a brick and cleaned out its contents.
Tied on the spot?
No, a day later, when he returned for a brick...
Scottish frugality or stinginess (as one likes) is reflected in cinema. The most famous character, of course, was the cartoon Uncle Scrooge from Walt Disney's DuckTales.
The rich drake from Glasgow, born in the 1947 comic, had two prototypes. The first one gave the name. Ebenezer Scrooge from A Christmas Carol by Charles Dickens.
The second is character and business qualities (adjusted for the character’s appearance, of course).
Let me introduce you to Andrew Carnegie.
The article includes several pages of the biography of the “Steel King” of the USA and the great philanthropist of the second half of the 19th - early 20th centuries.
Oh America!
The best inheritance for a young man is to be born into poverty.
No abilities or opportunities matter if a person is wealthy
Birth
November 25, 1835. Dunfermline, Scotland. A boy is born into the family of William and Margaret Morrison Carnegie. In honor of his paternal grandfather, he is given the name Andrew.
The boy's parents lived a modest and difficult life. To put it delicately, the father is a worker at a local weaving factory, the mother is the daughter of a shoemaker, who continued her father’s difficult and unfeminine work. All Carnegies existed in one room, which served as a living room, bedroom, nursery and dining room at the same time.
A year after the birth of their son, realizing that they cannot live like this, the family of the weaver and shoemakers make their first super-effort and find the opportunity to move to a larger house on Edgar Street, next to the city park.
It must be said that Dunfermline is by no means some Scottish outback. Not at all. Located near Edinburgh, the city was once the residence of the kings of Scotland. Subsequently, film actress and ballerina Moira Shearer, choreographer Kenneth MacMillan, members of the rock band Nazareth and the leader of Jethro Tull, musician Jens Anderson became Andrew's fellow countrymen. But of course, in terms of popularity, they were far from Carnegie. Even rock musicians.
In the early 1840s, “trouble” came to Carnegie’s house. The Industrial Revolution began in Britain. Manual labor began to be transferred to the shoulders of machines, and problems began at the Carnegie Sr. factory. The entire burden of supporting the family fell on the shoulders of Margaret’s mother. They already have two sons - Andrew and younger brother Thomas. Working on orders for making shoes, Margaret manages not only to prevent her husband and children from starving, but also to give the boys a primary education. Andrew is finishing 4th grade at school.
In 1848, William once again showed himself as a man. If things don't work out in dear Scotland, well... A land of great opportunity awaits across the ocean. America!
The Carnegie family gets deeply into debt, borrowing money to move, and makes a breakthrough. This time, not just a few blocks away, but across the Atlantic.
Allegheny, Pennsylvania, USA
As their destination, Carnegie chooses Allegheny, Pennsylvania. The choice was not accidental. Their relatives already lived there, and settling into a new place seemed a little easier than going into complete uncertainty. The state of Pennsylvania, the birthplace of the American railroad boom, will play a special role in the fate of Andrew the businessman.
Allegheny was settled primarily by Germans and Croats, and until the 1850s it was a rural town. Among the locals it was called "Deutschtown". Nowadays, areas of Pittsburgh are located in the place where the Allegheny once lay. In Deutschtown, Carnegie is undoubtedly No. 1 on the list of famous citizens. His only easy competition is the mysterious Mr. Charles Taze Russell, who stood at the origins of the religious movement of Jehovah's Witnesses and holds the pompous title of “President of the Watchtower Bible and Tract Society.”
Before young Andrew Carnegie lay a country where everyone could “make themselves.” And Andrew began.
At the beginning of his work biography there are slight discrepancies. Most biographers agree that the first work of the future big business tycoon was connected with a weaving theme so close to the Carnegie family. Andrew's job title was proudly called "Bobbin Supervisor" in a manufacturing factory. The length of the working day is 12 hours, the working week is 6 days. Salary: $2 per week. Quite in the spirit of America in the mid-19th century, free from trade union movements and all sorts of “ridiculous” Labor Codes.
Parents also worked tirelessly. Dad William worked at a cotton factory, plus he sold linen. Mom Margaret, not sparing herself, repaired the shoes of the Deutschtowners. In the struggle for survival, the Scots Carnegie family tried their best. After America there was nowhere to go.
Andrew had a particularly reverent attitude towards his mother, which he carried throughout his life. Carnegie idolized her. Already a multimillionaire, I spoiled him as best he could. He obeyed in everything and even, according to the recollections of his contemporaries, was afraid of her. During her lifetime, Margaret never allowed her son to marry, claiming that there was no worthy match for her Andrew.
There is a version that teenager Andrew began his path to the “American Dream” as a fireman’s assistant with a salary of only $1.20 a week, which is 40% lower than that of the Bobbin Keeper. Then the owner, noticing the young fireman’s beautiful handwriting, transfers him to clerk. The version is somewhat dubious - where could the owner of the enterprise carefully study a sample of the handwriting of a worker throwing coal into the firebox?
In any case, the main thing is what happened next.
And then there was the telegraph. The American telegraph is almost the same age as Andrew. Samuel Morse patented the electromagnetic telegraph in 1840.
Carnegie makes a career from a telegram delivery man to the head of the communications department of the Pennsylvania Railroad. Andrew's salary reaches hundreds of dollars a year. Serious money for an 18-year-old boy. The Carnegie family is saved.
For a telegraph operator, Andrew had phenomenal skills. He could read telegraph messages by ear, by the sound of the key. Few such miracle people were born in America. For example, Jesse Livermore, the great Wall Street speculator of the early 20th century, nicknamed “The Boy Wonder.” He was able, without the use of Morse code, to instantly interpret stock quotes.
The young telegraph operator acquires connections that will become extremely useful in the near future. The first big productive acquaintance was Thomas Scott, owner of the Pennsylvania Railroad. Thomas Scott will become Andrew's patron and give him a start in life.
"As the Steel Was Tempered". From Carnegie Steel Company to U.S. Steel
Until steel production began, many things could not begin in America.
America essentially grew up on steel
Alan Greenspan, quote from the film The Men Who Built America
Bridge
In the Ojibwe language it is called misi-ziibi or gichi-ziibi, which means "Big River". In English - Mississippi. The Mississippi is the largest river in the United States and throughout North America. The fourth longest in the world. Mark Twain dedicated an entire novel to her, “Life on the Mississippi,” about steamship transportation along the largest river artery in the United States in the mid-19th century.
The Mississippi cuts across America from north to south, from Minnesota to Louisiana. Connecting East and West, it is necessary to cross the Big River. For railway communication, such a crossing had to be a strong and reliable bridge.
The first railroad bridge on the banks of the Mississippi was built back in 1856. But the collapse of bridge crossings was commonplace back then. The increased level of locomotive freight transportation required a new generation design.
Such a bridge was conceived by Thomas Scott, Andrew's former boss. The student took it upon himself to bring the teacher’s idea to life. Carnegie wins the contract to build the bridge. The argument that convinced the shareholders of the enterprise was that he would use rolled iron instead of brittle cast iron. But Andrew looked even further.
Steel. This is the material that will provide a technological breakthrough and will become the main trend in bridge construction for a long time, if not forever. The only catch is that it's expensive. Very expensive. Until the early 1870s, steel was used to make individual small items and parts - keys, cutlery, decorative items. Where to get tens of tons of metal for a bridge across the Mississippi?
Here, E. Carnegie’s natural curiosity played a good service. Due to his difficult childhood and youth, he was unable to obtain a full education. But he was very interested in science. Especially applied. Something that can be applied to his business and make good money.
In the early 1870s in Great Britain, Carnegie met metallurgical engineer Henry Bessemer. The latter, in 1856, patented a method for producing steel from liquid cast iron by blowing air. It became the basis for the Bessemer process (Bessemerization). Bessemer reduction reduced the manufacturing time of a steel beam from two weeks to (!) 15 minutes.
And Andrew put everything he had into building a steel bridge. I was chronically short of my own money. Then Carnegie attracted investors. He put everything he could on the line. The risk is huge. If the “steel project” failed, 38-year-old Andrew faced complete ruin. But Carnegie knew how to calculate risks.
... Neighborhoods of St. Louis. Rainy day. There is an arch in front of the bridge entrance. At its top there is a banner with the slogan “East meets West”. The Stars and Stripes flag flutters just above. A motley procession crosses the arch. Men, women and children, clerks, workers, housewives, policemen and even Indians. Feet slip in the mud. Lumps of it fly off heels and canes.
But someone is walking ahead very confidently, clearly pressing their huge feet into the covering of the bridge. He throws back his head, arches his trunk and lets out a loud roar. Indian elephant!..
This is what the opening show of the steel St. Louis Bridge across the Mississippi in 1874 looked like, prepared personally by Andrew Carnegie. There is a belief that an elephant will not cross a river on a dubious bridge. But if he went...
Company
The crowning achievement of Carnegie's business success is definitely his Carnegie Steel Company. The metallurgical giant of America at the end of the 19th century, the construction and ownership of which earned the entrepreneur the title of “Steel King”.
Against the backdrop of numerous “iron” competitors, the Pittsburgh Carnegie company was distinguished by two key factors.
- Use of the latest, for its time, industry research and development developments. The Bessemer steel casting method was written above. Another innovation - at his enterprises, he replaced ordinary coal with coal coke.
- Carnegie Steel Company is the first vertically integrated steel company in the United States with a full production cycle. From iron ore and coal mining to the production of finished steel products. Mandatory - functional products, ready for installation/use, and not the simplest rental elements. Carnegie's specialty is railway rails and steel parts for bridges, buildings and structures. Andrew didn't like cast iron.
With such a set, the “Steel King” quickly crushed a significant part of the American metallurgy. In the late 1880s, Carnegie's plants were smelting 2,000 tons of metal per day. By 1889, the United States overtook Britain in gross steel production. The main credit for this goes to Andrew. The Carnegie empire included up to a dozen enterprises of the mining and metallurgical complex. In 1888, for $1 million, he purchased the infamous (see below) Homestead Steel Works. The share of the “Steel King” in US steel production reaches 25%.
The exploitation of workers in his factories was brutal, even against the generally bleak American backdrop of those years. The length of the working day and the working week were beyond human capabilities. Andrew Carnegie, who worked in much the same way in his adolescence and youth, did not see anything wrong with this.
A social explosion was inevitable.
Strike
... The elevator doors opened and a tall young man of Jewish appearance with slightly protruding ears stepped out into the corridor. He is barely 20. In his hands is a briefcase. He walks slowly along the corridor, carefully peering at the signs above the entrance to the offices. The desired door is at the end of the corridor on the right side. It's wide open. The man pauses and opens his briefcase. He takes out a pistol. Colt 1873. Transfers to the right hand. Stands opposite the doorway. In the room, against the background of a curtained window, there is a male silhouette.
The shooter takes a step forward, cocks the hammer, raises his hand with the weapon and quietly says: “Mr. Freak.” The figure in the window turns around. Shot, two more. One bullet hits the neck. The target falls to the floor. The young man grabs a sharpened file and rushes to the victim. But the enemy is only slightly wounded and is still very strong. A fight ensues. A ball of two bodies rolls out into the corridor. The attacker manages to stick a file into the victim's leg.
That's all he managed. The clatter of feet in the aisle. The crowd separates the grappling...
The Homestead Iron and Steel Works became one of the largest in Carnegie's holding, and he had special hopes for it. Andrew acted like a true American capitalist from the century before last. He couldn't do it any other way. To paraphrase Napoleon, he was only interested in three things - profit, profit and more profit. Maximum. At any cost.
The main way to increase it is to reduce production costs while increasing product yield. Leaving aside the technical side, the most important lever remains the reduction of wages with a disproportionately sharp increase in the length of the working day/week.
But Carnegie wanted to have a reputation as a humane and progressive employer. How to do this? You can't deny Andrew's intelligence, and he came up with a way to combine seemingly incompatible things.
Carnegie applied the "good cop and the bad cop" principle by placing his junior partner, Henry Frick, in charge of the Homestead Steel Works. And he left. Far. To Scotland.
Freak was still that figure. Ideal for the proposed role.
The man with the looks of Santa Claus and the soul of a crocodile is referred to by US historians as “the most hated man in America” and “the worst American manager of all time.” The reason is a complete lack of morality in business and rigidity, easily turning into cruelty towards staff.
By June 1892, the situation in Homestead was difficult for workers. The three-year agreement between the young, fragile trade union and the administration is coming to an end. Frick, having received carte blanche from Carnegie, plans to do away with even such weak shoots of the labor movement. He introduces inhuman working conditions - a 12-hour working day and a 6-day working week. The goal is to increase inventory in case of a possible strike. The plant is surrounded by barbed wire. The number of accidents at work is sharply increasing. One of them ends in the death of the worker.
We can't delay any longer. Trade unions declare a strike and insist on negotiations. Frick is trying to split the team by offering different categories of factory workers different salaries and working conditions. The workers, aware of the 60% increase in gross profit at the plant, reject Frick's proposals.
There will be no more concessions, says the manager. - I advise you to stop the strike.
June 28 Henry Frick goes on the attack and declares a lockout. The plant is closing. Thousands of strikebreakers and the Pinkerton National Detective Agency were hired to protect them and intimidate the strikers.
Alan Pinkerton's organization deserves its own paragraph. Created by a native of Scotland (by the way) back in 1850, it was involved in investigating thefts on railways. This was a popular service. Soon, Pinkerton agents were already guarding Abraham Lincoln and even managed to prevent an assassination attempt on him in 1861. By the 1890s, the Pinkerton Agency was a small private mercenary army. Well trained and armed, ready to go where the pay is good. And Frick paid well.
On July 6, 300 (!) Pinkertonites arrive from New York to Chicago and try to enter the Homestead Steel Works. By that time, 2,000 workers had already erected barricades at the entrances and blocked the entrance to everyone. Administration, strikebreakers and armed mercenaries.
... Collision line. On one side are exhausted workers, practically without weapons, covering the entrance to the plant with their bodies. Your own factory. On the other - Pinkerton agents with the latest model rifles. Black suits, pocket squares, high boots, bowler hats, white shirts and ties.
Give way.
Go away. This is our factory.
A Pinkerton man tries to throw aside a metal beam from an obstacle. One of the factory workers wants to stop him and gets hit in the face with a fist covered in a leather glove. Stones and iron blocks begin to fly towards the attackers. The first shot is heard from the mercenaries. Warning. To the air.
The stone hits the agent's head. His colleagues are already opening aimed fire. To defeat. The groans and cries of the falling strikers. Shooting, like in a shooting gallery. On running targets. Some of the defenders rush into the factory building, some remain lying on the ground, in the mud, and some take out a revolver from their bosom and open fire back at the people in black climbing over the barriers...
The labor conflict at the Homestead Metallurgical Plant went down in history as one of the largest in the United States involving the use of weapons. 9 workers and 3 employees (according to other sources 7) of the Pinkerton agency were killed. The fight at Homestead lasted 12 hours. The governor of Pennsylvania calls in troops to pacify the strikers. A state of emergency is declared in the city. The factory workers continue their unequal struggle.
In the fall the strike was called off. The unions are suffering a complete and crushing defeat. Production has resumed.
Reporters attack Carnegie in Scotland, on a walk in the park. Questions about the situation at Homestead Steel Works. The reputation of the "Steel King" is badly damaged.
Henry Frick paid more than just a loss of image. He didn't care about that. He almost lost his life.
On July 23, 1892, in the factory office, Henry Clay Frick was assassinated by a young 22-year-old anarchist, Alexander Berkman. Frick survived, and Berkman received a prison sentence equal to his age - 22 years. Alexander would serve 14 years, being released in 1906.
And Frick would pass away only in 1919. In my house. in Manhattan. Now it is a New York landmark, the neoclassical "Frick Mansion". It houses a museum of Western European painting, known as the “Frick Collection”. Everything is orderly and respectable.
U.S. Steel
Possessing a full set of traditional qualities of the largest American entrepreneur of the late 19th century, Andrew Carnegie still stood out from the general line-up of the Rockefellers, Morgans and Vanderbilts. Titans of the first wave of American multimillionaires and billionaires. The men who lifted America after the Civil War.
Carnegie had strange dreams for the “shark of capitalism.” He wanted to make a lot, a lot of money. It's clear. Another thing is interesting. Andrew wanted to retire as soon as he made his fortune. Move away completely. Go somewhere to Oxford in England, get a complete and comprehensive education, make acquaintances with people from the world of science. Maybe write something yourself.
At the turn of the century, Carnegie, who was already 65, realized that it was time to turn dreams into reality. Otherwise it will be too late.
A normal market situation has developed. On the one hand, E. Carnegie with an asset in the form of the Carnegie Steel Company. He wants to sell it. The only thing left to do is to provide the other side. A buyer who will give a good price.
Luckily for Andrew, there was such a person in America. Banker and investor JP Morgan. Or just JP. His business crown lacked a “steel” diamond. Carnegie is a very attractive company. No one could have paid more for the Carnegie Steel Company than JP.
… - How much do you want for the company? - Charles repeated the question and handed Carnegie a piece of paper. - Write. Just write your amount.
Carnegie picked up the latest model Lucky Curve parker and thought about it. A few numbers and the whole life... He shook off his stupor and quickly wrote down the number. He folded the piece of paper in half and handed it to his assistant...
... JP unfolded the piece of paper. Three digit number. And the letter "M".
Tell me I agree...
... March 2, 1901. At the Carnegie table, JP Morgan, Andrew's assistant - Charles Schwab, several other gentlemen.
Gentlemen, please note that the final price of the transaction is $400 million. Any other opinions?
Silence.
Andrew Carnegie and JP seal the deal with a handshake. It's enough.
“Congratulations, Mr. Carnegie, you have become the richest man on the planet,” Morgan said.
Already saying goodbye, Carnegie asks JP: “What would be your answer if I wrote a large amount?”
Goodbye Mr. Carnegie...
This is how (or almost this way) the largest steel corporation, United States Steel Corporation, U.S., was born. Steel, whose capitalization exceeded $1 billion for the first time in the world. And Andrew Carnegie received $400 million (according to other sources, 480 million). In terms of modern dollars, this is hundreds of billions.
Andrew Carnegie's Legacy
Excess wealth is a sacred burden that imposes on its owner the duty to dispose of it during his life in such a way that this wealth will benefit society
The legacy left by E. Carnegie was both enormous and varied. From advice on how to invest money - to schools, libraries and concert halls built with this very money. For people from all walks of life.
Investments
Carnegie's investment activities can be divided into two large stages.
The first is the initial entry into the stock market. At the age of 20, he buys a stake in the Adams Express railroad for $500. It was sort of a “blue chip” in the USA in the 1850s. The investment paid off. Soon the package cost $700 and continued to rise in price.
A little later, deciding that “he had bet on the right horse,” Carnegie took an extreme, extreme risk. Andrew mortgaged and remortgaged all the property owned by himself and his parents, including the house. Andrew borrowed everything he could from his fellow employees. The result is the purchase of the Adams Express package for $50 thousand. Fortunately, Carnegie guessed right; after a year and a half, the market value of the acquired securities exceeded half a million dollars. If he had miscalculated, it would not have been one of the most successful US business stories of the end of the century before last. And the world would be different.
Carnegie never took that kind of risk on the stock market again. Never. He bought shares only and exclusively with dividends from securities from his portfolio. At least I tried to do so. Securities of banks, oil and other companies. I only risked the financial flow from reliable stocks.
Motivation
Carnegie formulated six principles of personal motivation for those who want to accumulate and increase capital. Nowadays there is no shortage of gurus giving lecture series for those who want to become rich. There were fewer of them at that time, and advice from someone who rose from the “Bobbin Keeper” at a weaving factory to the American “Steel King” is of particular interest.
So six tips from Andrew Carnegie.
- Determine the exact amount you want to reach. Specific number.
- Frankly decide for yourself what you are willing to do to achieve your goal.
- Set a deadline for when you want to achieve what you want. Also as clear as possible.
- Write a step-by-step action plan and begin implementing it immediately.
- All of the above must be in writing.
- Every evening, before going to bed and every morning after waking up, say your notes out loud (but without being considered crazy). Like a prayer. During this meditation, believe and imagine that this money is already yours. Feel it.
Perhaps, for those familiar with modern psychopractices, “How to achieve success and get rich” is all baby talk and material for the “preparatory group in kindergarten.” But this is Carnegie. Number 3 on the first Forbes list of 1918. Note that his partner G. Frick is #2.
For what we can thank E. Carnegie
The list of good deeds of the Dunfermline emigrant is more than extensive.
Education and science. According to American statistics, every 10th American who received secondary education before 1990 did so in schools built with Carnegie money. He donated key sums to create the University of Birmingham (UK), the Institute of Technology and the University of Pittsburgh, which bear his name, the Carnegie Institution in Washington, and the Medical College in New York (now part of New York University).
Libraries. Here Carnegie has a truly global scope. The reading room was a particular favorite of Andrew's. At James Anderson's Pittsburgh Library for Working Youth, he filled in the gaps and often the complete lack of his own knowledge. By the end of his life, Carnegie sponsored about 3 thousand libraries, archives and book collections in the USA, Canada, the United Kingdom, Ireland, Australia, New Zealand and even the Fiji Islands. Now 40% of Americans go to public libraries funded by Andrew Carnegie.
Culture. In 1891, one of the most prestigious concert venues in the world, Carnegie Hall, opened in New York. The conductor at the first performance is P.I. Chaikovsky.
Fight for peace. In 1907, Carnegie founded the Peace Society and invested one and a half million dollars in the construction of the Peace Palace in The Hague. Now it is the seat of the International Court of Justice.
Philanthropy. Andrew Carnegie's main literary work is considered to be the article Wealth, published in the June 1889 issue of the North American Review. The essence of Carnegie's idea, set out in the material, is that the life of any large entrepreneur is divided into two parts. In the first, he collects and earns wealth. In the second, he shares them with his neighbors through charity programs. And he gives away almost everything. For example, Andrew himself gave away 90% of his fortune. “Wealth” quickly became the “Gospel of Wealth.” It is also actively followed by modern businessmen: Buffett, Gates, Soros and many others, having organized numerous charitable foundations and projects. Carnegie himself created the famous Carnegie Foundation. Almost immediately after him, John Rockefeller did it.
This was the path taken by a Scot named Andrew Carnegie from the city of Dunfermline, the residence of the Scottish kings.
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(Andrew Carnegie; 1835 - 1919) - American entrepreneur, one of the largest steel industrialists, as well as one of the prominent philanthropists.
Carnegie was born on November 25, 1835 in Dunfermline, Scotland, the son of William Carnegie, a textile factory worker and leader of a local organization, and Margaret Carnegie, who was the daughter of Thomas Morrison, a political and social reformer. Carnegie was born in a house in which they lived together with another family, where their family had one single room, which was a living room, a dining room, and a bedroom. Life was difficult due to lack of funds, Carnegie's father received $2 a week at the factory and sold linen, his mother worked part-time repairing shoes. Andrew himself, when he was only 13 years old, was also forced to get a job at the same weaving factory as a bobbin supervisor and work 12 hours and 6 days a week. But even this was not enough for life to somehow improve. And finally, in 1848, Father Carnegie decides to move to Scotland. He and his family immigrate to the United States and settle in Allegheny, Pennsylvania.
In 1850, Carnegie found work as a messenger at the local office of the Pittsburgh Telegraph (Pittsburgh Telegraph) and received a salary of $2.5 per week. Thanks to the new job, Carnegie has new opportunities. He begins to visit the local theater and library, where he enthusiastically reads books and engages in his self-development. His zeal and hard work did not go unnoticed by the management of the Pittsburgh Telegraph and he soon became a telecommunications operator with a salary of $4 per week.
Carnegie quickly rose through the ranks and in 1853, when he was 18 years old, was appointed head of the telegraph department in Pittsburgh. Such rapid growth in the development of the young and gifted Andrew Carnegie was noticed by the head of the Pennsylvania Railroad Company (Pennsylvania Railway Company) Thomas A. Scott, who hired Carnegie as his secretary. At his new place of work, Carnegie begins to show interest in the railway business in every possible way. Scott helps Carnegie in every possible way with his endeavors in this business, where Carnegie makes his first investments in companies such as Adams Express and T.T. Woodruff's sleeping car company (Woodruff Railway Company). This is how Carnegie gets his first capital.
First enterprise
Carnegie made regular visits to his homeland of Great Britain, where he observed and gained experience in the rapid development of the local railway industry. He was especially impressed by the famous discovery by the English inventor Henry Bessemer of a converter, which provided the possibility of a more advanced method of producing steel by reprocessing liquid iron (the so-called Bessemer process). Carnegie realized that steel would now replace iron in the production of related goods. In 1865, Carnegie opened his first enterprise, the Keystone Bridge Company, one of the main enterprises involved in the construction of bridges. In 1870 he installed his first blast furnace, using the ideas of his compatriot Henry Bessemer, and in 1873 the first steel plant appeared. All this was done by Carnegie for the development of the railway industry in the production of bridges, rails, cars, and locomotives.
Steel Empire
The Carnegie steel company became the largest steel company producing pig iron, steel rails and coke in the world, and Carnegie himself was a multimillionaire. Thanks to new technologies, the company made a breakthrough in the production of steel rails for the railroad, thereby ensuring the development of rail transport in the United States. Massive construction of roads began throughout the country thanks to the enormous potential of the Carnegie company. In the period from 1889 to 1899 annual steel production increased from 332,111 tons to 663,412 tons, and profits correspondingly increased from $2 million to $40 million.
In 1901, the no longer young Carnegie decided to retire and sell the company. Probably the only person at that time who could and wanted to buy the Carnegie steel company was John Morgan. He intended to merge all large and small steel companies in order to get rid of unnecessary competitors. After negotiations, he buys Carnegie's company for $400 million, which leads to the formation of U.S. Steel (United States Steel Corporation).
Philanthropist
Carnegie's philanthropic activities began in 1870, when he donated money to build a swimming pool and library in his hometown of Dunfermline, Scotland. He sincerely believed that a person should devote the main part of his life to earning capital, and the other to distributing it to those in need. It is difficult to list all of Carnegie's charitable deeds. With his funds, Carnegie Mellon University, the Carnegie Museum in Pittsburgh and many other educational and health institutions were founded.
Andrew Carnegie died on August 11, 1919. He gave about $350 million of his funds to charity. The remaining $125 million was placed in the Carnegie Corporation, a charitable organization that continues his activities.
Biography
- - born in Dunfermline (near Edinburgh, in the Scottish town of Dunfermline).
- - moved to the USA at the age of 13, worked as a “bobbin caretaker” at a weaving factory.
- - telegraph operator and personal assistant to Thomas Scott, head of the Pittsburgh branch of the Pennsylvania Railroad.
- - He himself became the head of the Pittsburgh branch of the Pennsylvania Railroad.
- - founded the iron bridge construction company Keystone Bridge Works.
- - Keystone Bridge Works began producing steel bridges.
- - opened the first steel mill in the United States, Edgar Thomson Steel Works.
- - Carnegie's annual income was $1 million.
- - bought Homestead Steel Works (the company controlled 25% of steel and iron production in the USA)
- - merged its assets into the Carnegie Steel holding.
- - the largest workers’ strike in US history took place at Homestead Steel Works (9 workers were killed, and after 1800 were fired).
- - Carnegie Steel's revenues reach $40 million.
- - Carnegie sold the business to financier and industrialist John Pierpont Morgan and began doing charity work.
- - Steel magnate Andrew Carnegie creates the Carnegie Endowment for International Peace and to conduct research in international law, economics and history with the goal of improving mutual understanding between nations.
- - died at the age of 83.
Review
An extraordinary, multifaceted personality, often exhibiting character traits that directly contradict each other. His sayings:
“Excess wealth is a sacred burden that imposes on its owner the duty to dispose of it during his life in such a way that this wealth will benefit society.”
"The man who dies rich dies disgraced"
and his own words:
“Work,” he later wrote in one of his books, “is the only property of the worker. And he has the right to fight for it. The commandment of work: do not covet your neighbor’s work.”
And also a 12-hour working day, with a 6-day working week, constant struggle with trade unions, and other actions are difficult to reconcile with each other. The regime at his factories was barracks-like. There were weekly standards for workers, for failure to meet which they were fired. Carnegie's subordinates worked 12 hours a day with one day off a week.
Earned during his life - approximately 400 million dollars (130 billion in modern terms) Distributed during his life - 350 million dollars, of which 60 million went to Great Britain, 290 million to the USA Left as an inheritance - 25 million His saying about inheritance:
“The best inheritance for a young man is to be born into poverty.”
“The main goal should be to help those who will help themselves... Neither individuals nor people will become better thanks to alms.”
His saying about money in general:
“The accumulation of wealth is one of the worst forms of idolatry. No idol is as destructive as the worship of money."
Philosophy of Andrew Carnegie
Andrew Carnegie's Six Rules of Motivation
- Determine the exact amount of money you would like to have. It is not enough to say: “I want to have a lot of money.” Be precise and specific.
- Tell yourself honestly what you are willing to pay for the wealth you desire.
- Set a deadline by which you will have this money.
- Make a specific action plan to fulfill your desire and start acting immediately, regardless of whether you are ready to realize it or not.
- Write down everything you have thought about: the amount of money, the time by which you want to have it, what you are willing to sacrifice in exchange, an action plan.
- Every day before going to bed and in the morning after waking up, with your eyes closed, recite your notes out loud with feeling, sense, and arrangement. As you read, imagine, feel and believe that the money is already yours.
Books written by Andrew Carnegie
- "Gospel of Wealth"
- "Around the world"
- "Four Horses Around Britain"
- "Victorious Democracy"
Aphorisms of Andrew Carnegie
- Excess wealth is a sacred burden that imposes on its owner the duty to dispose of it during his life in such a way that this wealth will benefit society.
- A man who dies rich dies disgraced.
- At our age, a problem arises: how to properly manage property. Therefore, rich and poor should be bound by ties of brotherhood.
- No abilities or opportunities matter if a person is wealthy.
- Don't rest just because you've done your duty.
- Do more. The horse that beats its rivals by a head wins the race.
- When showing mercy, you need to adhere to the main principle: help someone who is able to help themselves.
- The one who does not do what he is told, and the one who does no more than what he is told, will never make it to the top.
Links
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