|STATION 1: The Steel Business
Andrew Carnegie made his fortune in steel, turning the industrial world on its ear in the process. He was possessed by technology and efficiency in a way no businessman before him had ever been. His relentless efforts to drive down costs and undersell the competition made his steel mills the most modern in the world, the models for the entire industry. By 1900, Carnegie's mills pro Carnegie's steel was cheap. Suddenly bridges and skyscrapers were not only feasible but affordable, too. Steel fed national growth, accelerating the already booming industrial sector. Steel meant more jobs, national prestige, and a higher quality of life for many. For Carnegie's workers, however, cheap steel meant lower wages, less job security, and the end of creative labor. Carnegie's drive for efficiency cost steel workers their unions and control over their own labor.
STATION 2: The Workplace
To the casual observer a Carnegie mill was chaos. "Wild shouts resounded amid the rumbling of an overhead train," McClure's Magazine reported of the Homestead mill in 1894. "On every side tumultuous action seemed to make every inch of ground dangerous. Savage little engines went rattling about among the piles of great beams. Dimly on my left were huge engines, moving with thunderous pounding."
Indeed, flames, noise, and danger ruled the Carnegie mills. "Protective gear" consisted only of two layers of wool long-johns; horrible injuries were common. Wives and children came to dread the sound of factory whistles that meant an accident had occurred.
"They wipe a man out here every little while," a worker said in 1893. "Sometimes a chain breaks, and a ladle tips over, and the iron explodes.... Sometimes the slag falls on the workmen.... Of course, if everything is working all smooth and a man watches out, why, all right! But you take it after they've been on duty twelve hours without sleep, and running like hell, everybody tired and loggy, and it's a different story."
For Carnegie, efficiency, not safety, was paramount. His vast steel mills at Braddock, Duquesne, and Homestead boasted the latest equipment. As technology improved, Carnegie ordered existing equipment to be torn out and replaced. He quickly made back these investments through reduced labor costs, and his mills remained always the most productive in the world.
STATION 3: Philanthropy
Can you imagine becoming the richest person in the world and then giving your money away? That's exactly what Andrew Carnegie did. After retiring in 1901 at the age of 66 as the world's richest man, Andrew Carnegie wanted to become a philanthropist, a person who gives money to good causes. He believed in the "Gospel of Wealth," which meant that wealthy people were morally obligated to give their money back to others in society.
Carnegie had made some charitable donations before 1901, but after that time, giving his money away became his new occupation. In 1902 he founded the Carnegie Institution to fund scientific research and established a pension fund for teachers with a $10 million donation.
Throughout his life, Andrew Carnegie loved to read. So it made sense that he wanted to give money to support education and reading. When Carnegie was a young man he lived near Colonel James Anderson, a rich man who allowed any working boy to use his personal library for free. In those days, America did not have a system of free public libraries.
Carnegie never forgot Colonel Anderson's generosity. As a result, Carnegie supported education; he gave money to towns and cities to build more than 2,000 public libraries. He also gave $125 million to a foundation called the Carnegie Corporation to aid colleges and other schools.
World peace was another cause Carnegie believed in. He established the Carnegie Endowment for International Peace and funded the building of the Hague Palace of Peace, which houses the World Court, in the Netherlands. By 1911, Carnegie had given away a huge amount of money -- 90 percent of his fortune.
STATION 4: “Gospel of Wealth” By Andrew Carnegie
(12) This, then, is held to be the duty of the man of Wealth: First, to set an example of modest, unostentatious living, shunning display or
extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues
which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the
manner which, in his judgment, is best calculated to produce the most beneficial result for the community—the man of wealth thus becoming
the sole agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer—doing
for them better than they would or could do for themselves.
Station 5: How to Succeed in Life by Andrew Carnegie
…Fourth--Do not think a man has done his full duty when he has performed the work assigned him. A man will never rise if he does only this. Promotion comes from exceptional work. A man must discover where his employer's interests can be served beyond the range of the special work allotted to him; and whenever he sees his employer's interests suffer, or wherever the latter's interests can be promoted, tell him so.
Fifth--Whatever your wages are, save a little. Live within your means. The heads of stores, farms, banks, lawyers' offices, physicians' offices, insurance companies, mills and factories are not seeking capital; they are seeking brains and business habits. The man who saves a little from his income has given the surest indication of the qualities which every employer is seeking for.
Sixth--Never speculate. Never buy or sell grain or stocks upon a margin. If you have savings, invest them in solid securities, lands or property. The man who gambles upon the exchanges is in the condition of the man who gambles at the gaming table. He rarely, if ever, makes a permanent success. His judgment goes; his faculties are snapped; and his end, as a rule, is nervous prostration after an unworthy and useless life.
…To sum up, do not drink, do not smoke, do not indorse, do not speculate. Concentrate, perform more than your prescribed duties; be strictly honest in word and deed. And may all who read these words be just as happy and prosperous and long lived as I wish them all to be. And let this great fact always cheer them: It is impossible for any one to be cheated out of an honorable career unless he cheats himself.
STATION 6: Vertical Integration: Moving on Up
The Bessemer Process
When WILLIAM KELLY and HENRY BESSEMER perfected a process to convert iron to steel cheaply and efficiently, the industry was soon to blossom.
Carnegie became a tycoon because of shrewd business tactics. Rockefeller often bought other oil companies to eliminate competition. This is a process known as HORIZONTAL INTEGRATION. Carnegie also created a VERTICAL COMBINATION, an idea first implemented by GUSTAVUS SWIFT. He bought railroad companies and iron mines. If he owned the rails and the mines, he could reduce his costs and produce cheaper steel.
Carnegie was a good judge of talent. His assistant, HENRY CLAY FRICK, helped manage the CARNEGIE STEEL COMPANY on its way to success. Carnegie also wanted productive workers. He wanted them to feel that they had a vested interest in company prosperity so he initiated a profit-sharing plan.
All these tactics made the Carnegie Steel Company a multi-million dollar corporation. In 1901, he sold his interests to J.P. Morgan, who paid him 500 million dollars to create U.S. Steel.