Andrew Carnegie

Ruthless Businessman Dominated Industry, Then Gave Away Millions

Photographic portrait of steel magnate Andrew Carnegie
Andrew Carnegie. Underwood Archive/Getty Images

Andrew Carnegie accumulated enormous wealth by dominating the steel industry in America during the last quarter of the 20th century. With an obsession for cost cutting and organization, Carnegie was often regarded as a ruthless robber baron, though he eventually withdrew from business to devote himself to donating money to various philanthropic causes.

And while Carnegie was not known to be openly hostile to the rights of workers for much of his career, his silence during the notorious and bloody Homestead Steel Strike cast him in a very bad light.

After devoting himself to charitable giving, he funded more than 3,000 libraries throughout the United States and elsewhere in the English-speaking world. And he also endowed institutions of learning and built Carnegie Hall, a performance hall that has become a beloved New York City landmark.

Early Life

Andrew Carnegie was born at Drumferline, Scotland on November 25, 1835. When Andrew was 13 his family emigrated to America and settled near Pittsburgh, Pennsylvania. His father had worked as a linen weaver in Scotland, and pursued that work in America after first taking a job in a textile factory.

Young Andrew worked in the textile factory, replacing bobbins. He then took a job as a telegraph messenger at the age of 14, and within a few years was working as a telegraph operator. He was obsessed with educating himself, and by the age of 18 he was working as an assistant to an executive with the Pennsylvania Railroad.

During the Civil War, Carnegie, working for the railroad, helped the federal government set up a military telegraph system which became vital to the war effort. For the duration of the war he worked for the railroad, mostly in Pittsburgh.

Early Business Success

While working in the telegraph business, Carnegie began investing in other businesses. He invested in several small iron companies, a company that made bridges, and a manufacturer or railroad sleeping cars. Taking advantage of oil discoveries in Pennsylvania, Carnegie invested in a small petroleum company.

By the end of the war Carnegie was prosperous from his investments and began to harbor greater business ambitions. Between 1865 and 1870 he took advantage of the increase in international business following the war. He traveled frequently to England, selling the bonds of American railroads and other businesses. It has been estimated that he became a millionaire from his commissions selling bonds.

While in England he followed the progress of the British steel industry. He learned everything he could about the new Bessemer process, and with that knowledge he became determined to focus on the steel industry in America.

Carnegie had absolute confidence that steel was the product of the future. And his timing was perfect. As America industrialized, putting up factories, new buildings, and bridges, he would be perfectly situated to produce and sell the steel the country needed.

Carnegie the Steel Magnate

In 1870 Carnegie established himself in the steel business. Using his own money, he built a blast furnace. In 1873 he created a company to make steel rails using the Bessemer process. Though the country was in an economic depression for much of the 1870s, Carnegie prospered.

A very tough businessman, Carnegie undercut competitors, and was able to expand his business to the point where he could dictate prices. He kept reinvesting in his own company, and though he took in minor partners, he never sold stock to the public. He could control every facet of the business, and he did it with a fanatical eye for detail. 

In the 1880s Carnegie bought out Henry Clay Frick’s company, which owned coal fields as well as a large steel mill in Homestead, Pennsylvania. Frick and Carnegie became partners. As Carnegie began to spend half of every year at an estate in Scotland, Frick stayed in Pittsburgh, running the day to day operations of the company.

The Homestead Strike

Carnegie began to face a number of problems by the 1890s. Government regulation, which had never been an issue, was being taken more seriously as reformers actively tried to curtail the excesses of businessmen known as robber barons.

And the union which represented workers at the Homestead Mill went on strike in 1892. On July 6, 1892, while Carnegie was in Scotland, Pinkerton guards on barges attempted to take over the steel mill at Homestead.

The striking workers were prepared for the attack by the Pinkertons, and a bloody confrontation resulted in the death of strikers and Pinkertons. Eventually an armed militia had to take over the plant.

Carnegie was informed by transatlantic cable of the events in Homestead. But he made no statement and did not get involved. He would later be criticized for his silence, and he later expressed regrets for his inaction. His opinions on unions, however, never changed. He fought against organized labor and was able to keep unions out of his plants during his lifetime.

As the 1890s continued, Carnegie faced competition in business, and he found himself being squeezed by tactics similar to those he had employed years earlier.

Carnegie’s Philanthropy

In 1901, tired of business battles, Carnegie sold his interests in the steel industry. He began to devote himself to giving away his wealth. As he had already been giving money to create museums, such as the Carnegie Institute of Pittsburgh. But his philanthropy accelerated, and by the end of his life he had dispensed $350 million.

Carnegie died at his summer home in Lenox, Massachusetts on August 11, 1919.