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American Moguls: Andrew Carnegie

Mark Wyatt McGinnis

Andrew Carnegie, acrylic on paper, 2022, Mark W McGinnis

Andrew Carnegie


Brilliant. Charming. Generous. Brutal.

Andrew was born in Dunfermline, Scotland, the son of a hand-loom weaver and a diligent, hard-working mother. He received some education at the town’s “free school” donated by a local philanthropist. His uncle instilled in Andrew a love of Scottish and English literature, leading to a lifetime of reading and learning.

Dire economic conditions drove the family to immigrate to the United States. They had to borrow the money for transport and across the Atlantic, crammed into the hold of a ship on bunks with horrible food and no privacy for 50 days. In Pittsburgh, conditions were worse than in Scotland. Their small house was dark and flimsy, everything was covered with soot and grime. Pittsburgh was called “Hell with the lid off.”

At 12, Andrew went to work in a cotton mill, twelve hours a day, six days a week, for $1.20 a week. When he was 14, he found a job as a telegraph messenger, doubling his wages. Andrew’s intelligence, quickness, and diligence were apparent, and he was soon promoted to telegraph operator. A local retired Colonel had a small, 400-book library that he opened up to working boys on Saturday nights. Andrew was a regular borrower and never forgot the value he found in having books for self-education. As an eighteen-year-old, he worked as a telegraph operator and secretary to Thomas Scott, an executive with the Pennsylvania Railroad. Scott was an intelligent and cunning businessman. Carnegie could not have had a better mentor. Scott called Andrew his “white-haired Scotch devil.” Carnegie was soon put in charge of the western division of the railroad, where he ran it with an iron hand. There he honed his skills in management and cost control. A life-long motto for Carnegie was, “Watch the costs, and the profits will take care of themselves.”

When the Civil War loomed, President Lincoln made Thomas Scott the Deputy Secretary of War, and Scott put Carnegie in charge of Union railroads and telegraph. There Carnegie efficiently managed the systems and furthered the war effort. He liked to tell the story of cutting himself on a telegraph wire and considering himself the first causality of the Civil War.

During the war and after the demand for iron multiplied, Carnegie saw the potential for large profits. He gradually shifted his investments to iron and steel when new technology improved its production. By the age of 33, he was a millionaire. In 1872 Carnegie established Thompson Steel Works, and in the 1880s, he bought and built more iron and steel production facilities. Carnegie was a brilliant dealmaker and created efficient and streamlined supply lines of raw materials. A shrewd and hard man, Henry Clay Frick, was his operations manager.

Unlike most of the robber barons of the 19th century, Carnegie was not obsessed with work. His contemporaries said he divided his time 50% work and 50% play. He traveled the world and nurtured relationships with the elite of New York City. His charm and well-read intelligence made him popular with the “old money” establishment. At 45, he began courting Louise Whitfield, 23. Carnegie’s mother had remained attached to him so tightly he was rarely seen without her, and he was wholly devoted to her. His mother was intensely jealous of Louise, and Carnegie knew he could not marry. When his mother died seven years later, he married Louise.

In the 1880s, Carnegie became heavily influenced by the teaching of the contemporary British libertarian, capitalist philosopher Herbert Spencer. Spencer was adamantly opposed to any government intervention in business and entirely against welfare for the poor. He coined the phrase “Survival of the Fittest.” This is not in Darwin’s teaching on evolution, which implied the survival of the most adaptable. Spencer turned his distortion against the poor with a vengeance. He believed to help them would be a disservice to humanity as the weaker were not to survive, so the stronger would evolve and strengthen the workforce. There was also “natural selection” in business, where the financially fittest would dominate. Wealth was a sign of superiority, and poverty was a sign of weakness. The term “Social Darwinism” inappropriately came to describe Spencer’s teachings. Spencer thought there were divergent varieties of men, some superior to others.

Carnegie considered himself a disciple of Herbert Spencer. He once said, “Not only had I got rid of theology and the supernatural, but I had found the truth of evolution.” Carnegie invited Spencer to Pittsburgh to tour his steel mills, which he considered to embody Spencer’s philosophy. Spencer found the factories dirty, polluted, and oppressive. He said, “Six months residence here would justify suicide.”

His “discipleship” did not prohibit Carnegie from considering himself to be a champion of the working man. He even talked of supporting unions, but unions that were not in his factories. He forced long working hours, a six-day week, and as low a wage as he could pay. He thought that if he paid the men more, they would “just buy better cuts of meat and more drink for their tables.” Cutting costs brought him enormous profits, and wages were one of the greatest costs.

Carnegie’s fortune was immense by 1889, and being a man of great wealth, he felt the need to express how people with such a surplus should use their money. He published an article that came to be known as “The Gospel of Wealth.” In the essay, he promotes the virtues of the individual and evolution and vehemently condemns socialism, anarchism, and communism. Carnegie says the rich and the poor should live in a harmonious relationship, and the rich must labor for the brotherhood of all. He believed the wealthy should be trustees for the poor and use their superior wisdom, experience, and ability to “administer, doing for them better than they would or could do for themselves.” But he clarifies that “neither the individual nor the race is improved by almsgiving.” He piously points out that it is the duty of the wealthy to set an example for the less advantaged by leading lives of “modesty, unostentatious living, shunning display or extravagance.” This might seem somewhat hypocritical coming from a man who built a 56,000 square foot mansion on Fifth Avenue in New York City, and expanded a castle in Scotland to 60,000 square feet on an estate of 8,000 acres.

In 1892 Carnegie’s reputation suffered a blow. The union contract at his Homestead Steel mill was about to expire, and instead of offering the men the pay raises they wanted, he offered them a 22% pay cut and left for Scotland. His manager, Frick, was determined to break the worker’s union and locked out the workers. He built and tall barbwire fence around the plant with towers, searchlights, and snipers. Frick planned to reopen the mill with strikebreakers (scabs) and hired 300 armed Pinkerton agents to protect the new workers. The Pinkerton men were secretly brought down the river to the plant, but it was no secret. The strikers learned of the planned arrival and attacked the barges before they could dock. A bizarre, violent battle ensued. The strikers and townspeople numbered in the thousands. The strikers fired on the barges, threw rocks at them, floated burning rafts at them, drove a burning railroad car at them, and created an oil slick and lit it. Most Pinkerton men were terrified and tried to surrender, but the strikers continued their attack. Finally, the agents were allowed to surrender. The strikers and townspeople formed a gauntlet the Pinkerton men had to walk to get to the opera house, which was used as a temporary jail. All along the path, they were pelleted with rocks, beaten, and spit on. Several men were beaten unconscious. The brutality of the attack was recorded by reporters, and public support for the strikers largely evaporated. Seven workers and three Pinkerton men had died in the battle.

With the violent victory of the strikers, Frick realized he needed major outside help. He contacted the Pennsylvania Governor, who gained power through Carnegie’s political machine. The governor sent in 4,000 militia troops, with 2,000 more on the high ground around the town. Within a week, the mill was opened with non-union labor. Carnegie had been in contact with Frick, via telegraph, through the entire ordeal and continuously supported and encouraged him. After the Homestead “battle,” steel industry unions dwindled to nearly nothing by 1900.

In 1901, at 65, Carnegie decided to retire. He sold his steel company to mega-financier J.P. Morgan. The selling price was $492 million. Carnegie’s share was $225 million, over seven billion dollars today. He had a special vault built for it.

Carnegie’s goal in retirement was to give away his money, and that he did. One of his favorite sayings was, “The man who dies rich, dies in disgrace.” But he did it in a way that fit Herbert Spencer’s philosophy. In his “Gospel of Wealth,” he wrote, “It is better for mankind that the millions of the rich be dumped in the sea than spent to encourage the slothful, the drunken, the unworthy.” Carnegie was not going to give his money away but spend it in ways he felt benefited the people. The most famous of his philanthropy was his construction of 1,689 free libraries across the country. The importance of the availability of books in his self-education was likely the impetus of this remarkable legacy to America. The benefit of this bequest is inestimable. The spreading of his immense wealth did not end with libraries. He gave vast amounts of money to teaching, higher education, international peace, the sciences, the arts, and museums. He gave 7,000 pipe organs to churches.

Unfortunately, one area of his philanthropy had a dark side, a very dark side. His Carnegie Institution was an avid promoter of eugenics. Eugenics is the practice of controlling human reproduction to increase desirable traits and eliminate undesirable traits. It was a theory developed and promoted by Sir Francis Galton, who Herbert Spencer influenced. Eugenics made perfect sense to Carnegie. It was aiding and quickening the natural selection of human beings to higher evolutionary standards. It was a theory embraced by many highly placed men of the early 20th century. Established in 1902 under his direction, the Carnegie Institution explored many research areas. Eugenics was a sub-department of the Evolution Department. In 1911, they set forth 18 methods for removing defective genetic attributes from the American population. Number 8 was euthanasia. A recommended method was local gas chambers. But it was thought America was not ready for such drastic matters. Others tried their own methods. A mental institution in Illinois infected incoming patients’ milk with tuberculosis bacterium. Other doctors imposed euthanasia by medical neglect for the “unfit.”

The two eugenic methods that gained wide use in the United States were forced sterilization and restricted immigration. Codified into U.S. law, restricted immigration was applied to races seen as inferior and polluting to the American gene pool. Those included were Chinese, Japanese, Eastern and Southern Europeans, and Jews. The small number of Jews allowed into the United States led to the rejection of thousands of Jewish applications for immigration during WWII, condemning many to Hitler’s gas chambers. American public opinion supported these restrictions and continued to do so after the war.

Forced sterilization was a widespread practice. Eventually, thirty U.S. states enacted compulsory sterilization laws for the mentally “ill.” The Supreme Court upheld the laws. From 1907-1963 approximately 64,000 people were forcibly sterilized, mostly the poor and African-Americans. The promotion of eugenics by men like Andrew Carnegie, J.D. Rockefeller, John Harvey Kellogg, and President Teddy Roosevelt made it seem acceptable and appropriate. It also fit many people’s prejudices against the groups targeted. In Hitler’s 1924 “Mein Kapf,” regarding eugenics, he wrote, “….the model is not our German Republic, but the United States.”

Andrew Carnegie may be the ultimate “rags to riches story,” from working for $1.20 a week in slave-like conditions to the wealthiest man in America. He has been considered by many to have the “good” robber baron. His unparalleled distribution of his wealth was not matched until the present day. His library philanthropy lives on over a century after his death, with some still functioning as libraries and others fulfilling other civic functions. But under the masonry of those libraries lie the gains of a ruthless businessman and a promoter of one of the most tragic practices in American history.

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