Andrew Carnegie was one of the most famous and wealthy industrialists of his day. His Carnegie Steel Company was one of the businesses that formed US Steel. Carnegie sold is company to US Steel which was formed as a partnership on March 2, 1901 (incorporated on February 25) between Elbert Henry Gary's Federal Steel Company and William Henry "Judge" Moore's National Steel Company. J.P. Morgan and Charles M. Schwab were also members of this ownership group.
US Steel went on to become the world's first billion dollar per year corporation. He sold Carnegie Steel for 500 million dollars, and he was nearly a 50% owner of the company. It is the money from this sale that he used to fund a vast array of philanthropic efforts for the remainder of his life. By the time he died in 1919, it is estimated that he had given away more than 350 million dollars.
Andrew Carnegie: The Early Years
Andrew Carnegie was born in Scotland and emigrated to the United States with his parents in the year 1848. He got his start as a telegrapher and by the middle of the 1860's, he had a variety of investments in railroad sleeping cars, railroads, bridges, and oil derricks.
His parents were extremely poor, although his uncle, a Scottish political leader by the name of George Lauder, Sr., influenced him as a young boy, introducing him to a variety of authors, and Scottish heroes. His uncle George had a son also by the name of George, and he grew up with Andrew. Later, they would become business partners.
Growing up, his father was a weaver and when his father grew ill his mother had to become the main breadwinner. Trying to make ends meet, the family decided to move to Allegheny, Pennsylvania. Money was borrowed from the Lauders to help with the migration.
Andrew Carnegie's first job was working as a “bobbin boy” in a cotton mill for a weekly salary of $1.20.
It was his uncle that recommended he become a telegrapher. It wasn’t long before he was promoted to operator, and his education and passion for reading helped him to become a self-made man.
His passion for reading was boosted by Col. James Anderson, who owned a personal library of 400 volumes, which he opened to working boys every Saturday night. Carnegie made the promise that if he were ever to become a wealthy man, he wanted to provide a similar opportunity to poor boys. This led to a significant amount of perseverance and hard work. This effort brought about a great number of opportunities. Within five years’ time, he had more than tripled his weekly salary. He took a job working for Thomas A Scott in 1853 at the Pennsylvania Railroad Company, and became a manager there.
Young Andrew made a variety of connections by working with various railroad related businesses.Scott was the one that helped him with his investments. Later his investments began to accumulate, and broaden. Through the multiplication of these investments Andrew Carnegie began to grow his wealth.
Accomplishments
Andrew Carnegie has had a number of significant accomplishments in his lifetime. Much of this had to do with the relationships he formed, as well as his ability to keep a clear and level-headed perspective about his investments. During the Civil War, Scott was promoted to Assistant Secretary of War, and he named Carnegie the Superintendent of the Military Railways.
After the war, Keystone Bridge Company was developed, which included an investment of $40,000 in Story Farm. Carnegie left the railroads as a way of devoting his energy to the Ironworks trade. He formed the Keystone Bridge Company and used his connections to acquire a variety of contracts. He also provided stock to both Scott and Thomson (the President of the Pennsylvania Railroad Company). He was able to learn a great deal from both men. Pennsylvania Railroad ultimately became one of his best customers.
By 1892 Andrew Carnegie had launched the Carnegie Steel Company, and this later helped the US output more steel than that of the UK – and Carnegie is greatly thanked for his contribution in this effort. Carnegie’s fortune came as a result of his ownership of the most extensive iron and steel operations any single individual in the U.S. has ever owned. He was responsible for several important innovations, including the mass production of steel using the Bessemer process. The second innovation was the vertical integration of raw material suppliers.
Challenges and Victories
Andrew Carnegie faced many challenges as well as victories throughout his lifetime. He can truly be identified as one of the rags to riches stories because he was challenged by not having parents from a high social status upon arriving in America. However, with the urging of his uncle, he took to becoming a telegrapher and used those relationships as a way of boosting his own social status.
He was smart, and he was known for being charming in social situations. His literary knowledge also helped him to be invited to a variety of important social functions, which Carnegie often exploited for his own benefit.
There were significant victories along the way as well. At the age of 66, in 1901, Andrew Carnegie was considering retirement. It is at this time that he decided to reform his enterprises. John Pierpont Morgan was a critical financial dealmaker, and he wanted to buy out not only Carnegie, but several other companies. This would help to cut costs and lower consumer prices as well as allow steel to be produced in greater quantities. Various negotiations took place, and the United States Steel Corporation was formed, becoming the first Corporation across the entire globe with a market capitalization totaling more than $1 billion.
He let his political views be known as well, including opposing American colonies. In one work, he also went as far as criticizing the British monarchy and explaining how the American Republic system was far superior.
Carnegie was a scholar throughout his entire life. He also used a significant amount of his money and investments to become an activist. Commodious swimming baths were constructed in his hometown in Scotland. He gave money to a library in his hometown as well. He contributed to the Bellevue Hospital Medical College and various others as well.
He paid for over 7,500 organs that were donated to churches around the world. He wisely agreed to construct over 3,000 libraries across the United States and Europe, but wisely, only after having received a commitment from the local community to buy books and provide an administrative staff.
In 1904, he founded the Carnegie Institute of Technology in Pittsburgh, now known as Carnegie-Mellon University in 1904. In 1905 he created the Carnegie Foundation for the Advancement of Teaching, and the Carnegie Endowment for International Peace in 1910.
Lessons learned
One of Andrew Carnegie's famous quotes reads,
"To try to make the world in some way better than you found it is to have a noble motive in life.”
Andrew Carnegie – The Empire of Business
I actually admire Andrew Carnegie more for his philanthropy than his business acumen. He has inspired successful entrepreneurs for more than a generation to support educational and humanitarian causes to help build a world of peace and prosperity for all. Bill Gates and Warren Buffet can be included in a long list of successful entrepreneurs that have learned from the standard of philanthropy that Andrew Carnegie set.
I aspire to become a small Andrew Carnegie. I don't ever expect to accumulate the kind of wealth that Andrew Carngie amassed in his lifetime, but I do want to become a millionaire. I would also like to fund a school in perpetuity, so that children of all nations, races, and religious backgrounds could study in peace.
David