Original Document

If Andrew Carnegie could have chosen the date of his own birth, he could not have improved upon the year 1835. The raw materials out of which his steel empire was built - the Connellsville coke, the so-called Bessemer steel process, the Lake Superior ore, and the era of railroad building - were not assembled until Mr. Carnegie was thirty-five years of age. Not until 1861 was the first solid tariff wall erected; and not until three years later came the first boom in the iron and steel trade. If his life had begun twenty years earlier or later, he would undoubtedly have missed the great opportunity which came to those born under his star.

Had he been born before the discovery of America, he would have been shut out of the iron and steel trade completely. He would not have been allowed to make so much as a horseshoe. During the Middle Ages no son of a weaver, musician, barber, watchman, miller, tanner, shepherd, or tax collector was permitted to enter the iron and steel guilds, which were for centuries very exclusive and aristocratic. The men who hammered steel and gold were the members of an industrial nobility, as distinctly separated from the other artisans below as they were from the nobles and courtiers above.

Andrew Carnegie was a child of poverty and discontent. His father, a weaver by trade, a labour agitator by reputation, was described as one of the most "troublesome" street orators in the Scottish town of Dunfermline. His uncle, also, was a mob leader, who was on one occasion arrested and jailed for inflammatory talk. Young Andrew got no schooling after he was twelve, and very little before. In fact, he was doing his boyish best to gather "siller" years before he became a bobbin-boy in Allegheny City. When he was a youngster of ten, he and his cousin managed by doing odd jobs to save up four shillings and sixpence - a few cents more than a dollar. After much deliberation, they put their entire capital into a half box of oranges, which they peddled around to the retail stores. This enterprise was so easy and profitable that next day they invested their money in gooseberries. But when the berries were only half sold, the boys ran into a crowd of roystering miners, who threatened to take away their berries. This frightened the two little fruit-jobbers into selling the remainder of their stock at cost to the nearest shopkeeper.

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THE EDGAR THOMSON STEEL WORKS

Carnegie and Coleman had picked out a tract twelve miles from Pittsburgh containing more than a hundred acres, which was notable as the spot on which General Braddock was defeated by the French and Indians in 1755. Alexander L. Holley took the contract to draw up the plans for the new plant; Captain "Bill" Jones, taking a hint from his friend Holley, arrived just in time to be put in charge of it; and in this way the famous Edgar Thomson Steel Works was launched upon its victorious career.

The partners had tactfully named the works after the influential president of the Pennsylvania Railroad; and this little act of foresight helped to fill the cash-drawer.

A system of rebates - at that time not contrary to law - was established, which enabled the steel-makers to ship their freight cheaper than their smaller competitors. The reason given for this rebate system was that the steel men saved expense to the railroad by loading and unloading their own cars and making up their own trains. Thus in various ways Andrew Carnegie's influence with his former employers proved to be a most valuable asset.

All the partners in the new firm were active. Andrew Carnegie, Scott, and Stewart drummed up orders. McCandless and Coleman furnished the prestige and business experience. Kloman, in blue blouse and overalls, looked after the men and machinery. Shinn was general manager, and soon had the business so well organised that he could account for every quart of oil or pound of nails. Phipps was in and out of every department, suggesting improvements and economies. And Thomas Carnegie was a sort of emergency man, minimising friction at all points.

A friend of the partners said at the time, describing the new firm: "Shinn bossed the show; McCandless lent it dignity and standing; Phipps took in the pennies at the gate and kept the pay-roll down; Tom Carnegie kept everybody in a good humour; and Andy looked after the advertising and drove the bandwagon."

There is more wit than truth in this estimate of Andrew Carnegie's value to the company, as he had organised it, furnished more than one-third of the capital, buttressed it with wealthy friends, and secured the largest and most profitable orders.

Andrew Carnegie's speaking part in the steel drama did not call for modesty and self-obliteration. To climb high in the social scale, to keep always in the public eye, to secure the friendship of statesmen and financiers - all this was but the means to an end. It was no more than the scaffolding around the iron and steel works, by means of which the works were developed beyond the reach of competitors. Every cubit that Mr. Carnegie added to his social stature elevated the whole business structure with which he was connected. By his extraordinary intellectual ability, his versatility as an entertainer, his knowledge of celebrities, his constant globetrotting, his cheery disposition and wide range of conversation, he became a welcome guest in the drawing-rooms of New York and Washington. And always and everywhere he was a man of business. His purpose was to sell steel billets and steel rails.

THE SECRET OF CARNEGIE'S SUCCESS

He realised to the full the commercial value of prominence and friendship. While his competitors buried themselves in dingy shops and offices, and allowed business cares to worry them into nervous prostration, Carnegie placed himself where he could survey the whole field and lay larger plans than the old-fashioned steel-makers.

"Carnegie owes a great deal to his habit of travelling," said George Lauder, his cousin. "While other men were wallowing in details, he was able to take a wider view."

This was new, therefore unpopular and misconstrued. Carnegie had originated a new business principle in the steel trade - that big men should do big things and small men do small things. "I never write a letter that anyone else can write for me," he said. "Mr. Carnegie was not worth fifteen dollars a week as a clerk," one of his partners assured me. But Carnegie saw no reason why he should do a clerk's work. He did his own work well because he did not try to do anything else. He initiated such a change in business tactics as had taken place in military tactics. The other steel-makers of the seventies were leading their workmen in person, just as Harold led his Saxons and Leonidas his Spartans. Carnegie, like Wellington or Napoleon or Oyama, directed the battle from a near-by hill, from which he could survey the whole combat and maneuver his forces to the best advantage. He fought, but not as the private soldier. He was a general of industry - a fact often overlooked by the captains. The steel men of Pittsburgh, as they plodded up and down their dirty, half-paved streets, shrouded in a perpetual sooty fog, growled and scoffed at the "parlour knight" who won his victories at the banquet or in the Pullman car. But one fact they could not deny or belittle - the fact that he seldom lost a battle.

Carnegie had from boyhood the faculty of attracting the attention of the great and the rich. It was more than a knack. It was an instinct. And deep down beneath his diplomacy it was based upon the solid worth and forcefulness of his character. He was as great as they. Long before his wealth had made him famous he was the personal friend of Gladstone, Rosebery, Matthew Arnold, Herbert Spencer, John Morley, and James Bryce.

When the young Prince of Wales visited this country, in 1860, there were scores of telegraph operators and railroad men standing along his line of travel; but Andrew Carnegie was the only one who sprang forward and offered the titled stranger an exciting ride on a locomotive. As the two young men - one a prince by virtue of his birth, and the other by virtue of his competency -clung to the narrow seat in the engineer's cab and were jolted along the crooked track, there began the springtime of a friendship which in its autumn brought business to the Pittsburgh steel-mills.

All the wiseacres of Pittsburgh looked upon Carnegie's social capers with outspoken disapproval. Daniel J. Morrell and John Stevenson refused to be his partners, on the grounds that he was too flighty and speculative. The presence of Coleman and McCandless in the firm was absolutely necessary to preserve its credit, at least during the earlier years. One day old John Moorhead, the wealthiest man in Pittsburgh, pointed Carnegie out to a friend and said: "There goes a foolish young man. He has bitten off more than he can chew. He wasn't satisfied to do a small, safe business, like the rest of us. He had to launch out. Mark my words - he'll come to grief yet!"

Thirty-five years ago Pittsburgh had no prestige as an iron and steel centre. It was mainly an importing and distributing point. There were only seven small blast furnaces, producing in twelve months about as much as one first-class modern furnace can make in eight. Iron rails were made, but no steel ones. Pig iron was scarce at forty dollars a ton. There was nothing, therefore, in the location of the Carnegie mills which can account for their record-breaking and profit-making career. And as Mr. Carnegie's partners, without exception, were only moderately successful before and after their connection with the company, it is reasonable to infer that the secret lay to a large extent in the remarkable personality and business methods of the young Scotsman who "drove the band-wagon."

Credit: Herbert N. Casson, The Romance of Steel: The Story of a Thousand Millionaires (New York: A. S. Barnes & Company, 1907), 68-69, 84-88.