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Andrew Carnegie, circa 1896.

Andrew Carnegie was a singular figure in American history. The "rags to riches" ideal celebrated in the Horatio Alger stories was mostly a myth: rags most often led to rags, or at best a modest prosperity, while rich people most often had rich parents. But Carnegie actually lived it. Born a poor immigrant boy, he became the "richest man in the world."

Andrew Carnegie was born on November 25, 1835, in Dunfermline, Scotland, the eldest son of a handloom weaver. The family left Scotland in 1848, in economic straits, and followed a chain of Scottish immigrants to Pittsburgh.

Later in life, when he returned as a latter-day laird to Skibo Castle, Carnegie would revel in his Scottish heritage and upbringing. Yet even in Pittsburgh as a young man, a network of Scottish immigrants steered him to jobs in a textile factory and telegraph office.

The Edgar Thomson Steel Works, by William Rau, Braddock, PA, 1891.

At age eighteen, Carnegie became special assistant for Tom Scott, who had recently become western superintendent for the Pennsylvania Railroad. From Scott he mastered the details of running trains through Pennsylvania's mountains and the principles of modern management.

A classic "inside investor," Carnegie made easy profits in such railroad-related ventures as bridge building, railroad sleeping cars, telegraphs, and iron and steel mills. In the 1870s, Carnegie named his flagship steel mill after the Pennsylvania's president, J. Edgar Thomson. Carnegie's first sizable fortune came in selling bonds for these many varied business ventures to European investors.

Carnegie's second, much larger fortune flowed from his adage to "put all your eggs in one basket, then watch it carefully." This basket, of course, was steel.

Carnegie bought his first iron furnaces and rolling mills, including Freedom Iron as an offshoot of his railroad ventures in the 1860s. After the Edgar Thomson mill, opened in 1875, he focused on creating an empire in steel. To undersell competitors in good times and bad, Carnegie cut costs obsessively and made massive investments in technology.

Facsimile Bill of Sale, Andrew Carnegie's sale of the Carnegie Company and all...

An association with Henry Clay Frick in the 1880s gave Carnegie's mills control over the coke that fueled his mills. As his fame grew with his fortune, Carnegie launched a "literary" career with celebrated essays on the gospel of wealth and on the labor question, the latter of which attracted a storm of criticism following the violent Homestead strike of 1892.

When financier J. P. Morgan put together U. S. Steel in 1901 to eliminate Carnegie's relentless competitiveness, Carnegie's mills, railroads, coke lands, and iron ore holdings formed the centerpiece of the nation's first billion-dollar corporation. Morgan paid $480 million for Carnegie Steel, of which Carnegie's personal share was $225,639,000.

Mr. and Mrs. Andrew Carnegie say farewell to Pittsburgh, 1914.

Giving away this huge sum of money - the equivalent in 2004 of about $120 billion, approximately twice Bill Gate's fortune - proved more difficult than Carnegie had imagined. In his celebrated "Gospel of Wealth" Carnegie stated, "The man who dies rich, dies disgraced."

In 1881 he gave money for constructing a library in his birthplace in Scotland, and then for a dozen or so libraries in the United States, beginning in Braddock. (Carnegie typically paid only for the library building and required the town to buy books and pay for upkeep, except in the four cases of Braddock, Homestead, Duquesne and his namesake-suburb of Pittsburgh where he paid for the whole show.)

Carnegie's philanthropy did not win universal approval. Many workers accused Carnegie of using charity to mask the corporate greed that had robbed them of the money produced by their toil.

When handling the paperwork became a burden, Carnegie set up a half dozen foundations that funded 2,811 public libraries, 7,689 church organs, numerous educational ventures, and countless pensions for public figures, peacetime heroes, and college faculty. Still, interest on his fortune accumulated almost as fast as he could give it away.

In 1911, with a massive gift of $125 million, he created the Carnegie Corporation of New York for "the advancement and diffusion of knowledge." The noble cause of promoting international peace, not an easy task during World War I, occupied his remaining years. He died on August 11, 1919, having successfully given away $380 million, his entire fortune.

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