Carnegie, Andrew
Biographical Highlights
Andrew Carnegie (1835-1919) was one of the most successful businessmen and most recognized philanthropists in history. His entrepreneurial ventures in America's steel industry earned him millions and he, in turn, made great contributions to social causes such as public libraries, education and international peace.
"Andrew Carnegie was the pioneering tycoon of the Age of Steel" (Let's Talk Business Network 2002). His steel empire produced the raw materials that built the physical infrastructure of the United States. He was a catalyst in America's participation in the Industrial Revolution, as he produced the steel to make machinery and transportation possible throughout the nation.
In his later life, he began to shift from a focus on industrialism to a more philanthropic view on life. Carnegie became the world's benefactor to education, as he is responsible for the construction and donation of approximately 2,509 public libraries in the United States, Europe and around the world (Ibid.).
Historic Roots
Andrew Carnegie was born November 25, 1835, in Dunfermline, Scotland. In this area of Scotland, most residents earned a livelihood through the craft of linen weaving. Carnegie was expected to follow in the footsteps of his family and become a weaver also. As a boy, however, Andrew was educated on the history of the land of Scotland, the plays of Shakespeare, the poetry of Robert Burns, the United States and its heroes, and a radical view of politics.
The Carnegie family had always lived a modest life, but they were hit particularly hard when factories began using automated weaving looms. In 1848, the family immigrated to the United States. Three months after leaving their home in Scotland, the family arrived penniless in Pittsburgh, Pennsylvania. Andrew's father, Will Carnegie, had become greatly disheartened by his failure. Andrew's mother, Margaret, made it well known that she too was shamed by her husband's defeat and their family's poverty. This, in turn, led to a great determination to see her sons succeed. Andrew shared this sense of determination to recoup their family's losses (Swetnam and Smith 1993).
As a young boy, Andrew Carnegie learned the meaning of hard work. By age thirteen, Andrew worked as a bobbin boy in a loom factory for the sum of $1.20 per week, working in a dark, dim basement producing bobbins for looms. Next, Carnegie took a job as a telegraph boy delivering messages. He experienced much success in this job, as he became only the third person in the country to be able to decipher a message by ear instead of by examining printed dots and dashes. By 1853, at the age of eighteen, Andrew Carnegie had been recruited by Thomas Scott, president of the Pennsylvania Railroad and learned many of the ins and outs of the railroad industry (Let's Talk Business Network 2002).
By the age of twenty, Andrew Carnegie lost his father to illness. Over the next several years, he continued to further his career and increase his salary significantly by remaining at the Pennsylvania Railroad Company and beginning to invest his earnings. He first invested in Woodruff Sleeping Cars and then turned his attention to the oil industry. Both investments provided significant returns. While an employee of the railroad company, he also began working with the Union Army to repair damaged railroad and telegraph lines. In 1865, Carnegie retired from the railroad and founded the Keystone Bridge Company. The company envisioned building bridges with iron, rather than wood, to make them more durable.
Several years later, Carnegie wrote himself a letter pledging to retire from business at the age of thirty-five, live on an income of only $50,000 a year, and devote the rest of his income to philanthropic causes (Swetnam and Smith 1993, 33). Yet, his plans changed when, in 1872, Carnegie traveled to England to visit Henry Bessemer's steel plants. There he realized the expansion potential for the steel business and returned to America with a plan to expand his current ventures in the steel industry. In 1875, Carnegie opened Edgar Thomson Works, his first steel plant. Several years following, Carnegie's mother, with whom he shared a very close relationship, passed from pneumonia. Following her death, Carnegie married the woman he had been courting for some time, Louise Whitfield. Carnegie's mother had previously disapproved of the relationship.
While expanding his steel empire, Carnegie ran into a series of labor relation problems with Homestead Works, a rival steel mill with the most modern equipment and technology available that he had purchased. The problems began when the workers organized a strike. Carnegie instructed his associate, Howard Frick, to handle the situation however he deemed necessary. Because Carnegie was seen as a friend of the worker and usually handled similar situations by peacefully waiting it out, he left the country so as not to be involved. There is some discrepancy about Carnegie's meaning behind his instructions to Frick; but what ensued was one of the most unfavorable examples of an industrial elite's wielding of power over poor laborers. Frick took a much different approach than Carnegie had previously. He arranged for a stand-off between the workers and Pinkerton Agents he had hired. The situation became violent and there was a twelve-hour shoot out. Even after surrender by the Pinkertons, the crowd remained violent and there was a violent breakout of beatings. The militia was brought in to settle the problem and Carnegie's reputation as owner of the company was forever tarnished. People blamed him for the incident and labeled him as cowardly for leaving the country and not settling the strike himself. The incident marked the end of Carnegie's image as a friend of the worker (Swetnam and Smith 1993).
In 1897, Andrew's daughter, Margaret Carnegie, was born (PBS 2002). The Carnegie family then purchased an estate, Skibo Castle, in Scotland. What followed was Carnegie's famous manuscript, a call to action for the wealthy men of his time -- The Gospel of Wealth. This, Carnegie's third publication, came out in 1889. He had previously published Round the World, An American Four in Hand in Britain, and Triumphant Democracy. The Gospel of Wealth was the most influential of his writings, however, in that Carnegie stressed that the wealthy had a moral obligation to give to philanthropic causes and serve as stewards of society.
Four years later, in 1901, Carnegie was nearing the end of his business career and allowed J.P. Morgan to buy out his steel empire for an astonishing price of $480 million dollars (Ibid.). Morgan was able to create U.S. Steel, and Carnegie became the richest man in the world. Carnegie did not want to remain a shareholder in the steel company, however, so he put the $300 million in gold bonds that he received from the deal into a specially-built vault in New Jersey. He never wanted to see or touch any of the money (Swetnam and Smith 1993, 145).
After Carnegie's exit from the business world, he continued to work for and support philanthropic causes. In The Carnegie Nobody Knows, Swetnam and Smith state
At first Carnegie considered it a game to give his money away. Whereas most men enjoyed making money, he in contrast delighted in seeing his fortune diminish. There never lived a man who had as much fun in giving away his wealth as Carnegie. One of his teasing tricks in giving was to hold his beneficiary in suspense, using the element of surprise. (154)
During his later life, Carnegie made contributions for two distinct purposes. He attempted to gain independence for the Philippines. He also founded many institutions and trusts to assist with causes related to education and international peace. His main philanthropic interest, however, was the founding of free public libraries. Carnegie spent over $56 million to build 2,509 libraries throughout the world. The last philanthropic trust Carnegie created was the Carnegie Corporation of New York in 1911. At that point in time, he had given away ninety percent of his fortune.
By 1914, World War I had begun and Carnegie left his estate in Scotland for the last time. The family purchased an estate called Shadowbrook in Massachusetts. It was at Shadowbrook that Andrew Carnegie passed away in 1919 (PBS 2002).
Importance
Andrew Carnegie's philanthropic endeavors are extensive in their value. "There is no doubt that Carnegie was a hard businessman"”his success is testament to this"”but the acquisition of wealth was not due to personal greed" (SLOCOE 2002). He strongly believed that the wealthy had a moral obligation to serve as stewards to society. The two causes Carnegie had a great passion for were education and international peace.
Foremost, he believed that everyone was entitled to a proper education. For this reason, Carnegie was involved with the founding of many schools and universities. Another way he contributed to public education was through his interest in free public libraries. His love of reading stemmed from a positive childhood experience of reading from the personal collection of a merchant in his town. Carnegie wanted to make those same reading experiences available to the public at no charge. He is responsible for the establishment of approximately 2,500 libraries worldwide. One of the first of the Carnegie libraries was the Carnegie Free Library in Allegheny, Pennsylvania, which became the model for the thousands of libraries to follow (Ibid.).
The second of Carnegie's philanthropic focuses was the idea of peace among all nations. He established many trusts that focused on researching the causes of war. One of his greatest contributions to this cause was the establishment of the Peace Palace in The Hague, which houses an extensive library of international law resources (Ibid.).
Ties to the Philanthropic Sector
Carnegie said, in The Gospel of Wealth, "The man who dies thus rich dies disgraced" (Ibid.). He often stressed the importance of people distributing their own wealth, but on a scale of philanthropy as large as Carnegie's, that task quickly became impossible. Therefore, the creation of the modern foundation was established. Carnegie used a number of trustees to distribute his wealth throughout Britain and America, with the Carnegie Corporation among them. The trusts can be associated with numerous donations including libraries, theaters, music halls, park lands, and schools (Ibid.).
Key Related Ideas
The level of philanthropy displayed by Andrew Carnegie during his lifetime and beyond has been the foundation for traditions of philanthropy today. His endeavors began the first efforts toward the modern day foundation or trust. His reflections and call to responsibility or challenge to other affluent people to give away their wealth drew the attention of many others to do the same, including John D. Rockefeller and W.K. Kellogg.
Other ideas related to Carnegie's life and philanthropy:
- Donor involvement
- Industrial Revolution
- International law
- International peace
- Public education
- Public libraries or free libraries
- Steel industry and steel plants
Important People Related to the Topic
John Piermont (J.P.) Morgan, with whom Andrew Carnegie made his largest business transaction, became the sole manager of J.S. Morgan and Company following his father's death in 1890 (Family Education Network 2002). His career climb was one of financial battles, but he eventually developed a railroad empire by reorganizing and consolidating railroad companies throughout the U.S. In 1901, he formed the United States Steel Corporation after a major merger with Andrew Carnegie's steel corporations. U.S. Steel became the first billion-dollar corporation in the world.
In 1853, Andrew Carnegie became the personal assistant to Thomas A. Scott. Scott, at the time, was the superintendent of the Pennsylvania Railroad's western division. He later moved on to be appointed assistant secretary of war, supervising all governmental railways and transportation lines. Then Scott became the president of the Pennsylvania Railroad Company on June 3, 1874 (Dept. of Mathematics 2002).
Related Nonprofit Organizations
Andrew Carnegie founded many organizations and trusts in his later life. These organizations include, but are not limited to, the following:
- Carnegie Council on Ethics and International Affairs was founded to work for international peace. It is "a forum for research and education in ethics and international policy".
- Carnegie Endowment for International Peace, founded in 1910, strives for "advancing cooperation among nations and promoting active international engagement by the United States".
- Carnegie Hall was built with a large donation from Andrew Carnegie in 1891. Its purpose it "to continue to be one of the world's leading institutions in presenting great music, and in promoting music education, music creation, and music enjoyment in a landmark concert hall".
- Carnegie Institution of Washington founded in 1902 with a $10 million gift from Andrew Carnegie, was incorporated in 1904 by an Act of Congress. Its mission is to conduct "basic research and advanced education in biology, astronomy, and the earth sciences." Carnegie saw the Institution's purpose "' to encourage, in the broadest and most liberal manner, investigation, research, and discovery, and the application of knowledge to the improvement of mankind'" (Ibid.).
- Carnegie Library of Pittsburgh's purpose is to be an institution "recognized as the region's best information resource... a preferred destination for knowledge, entertainment and social interaction".
- Carnegie United Kingdom Trust is a Scottish charity that operates in the United Kingdom and Ireland. Information about its history, grantmaking guidelines, publications, and more is available on its Web site. The Trust has provided grants for "opening public libraries, providing church organs, developing village halls and supporting community needs in the arts, heritage and social welfare".
Bibliography
Department of Mathematics. Thomas A. Scott Professorship in Mathematics. University of Pennsylvania.
Let's Talk Business Network. Andrew Carnegie.
Livesay, Harold C. Andrew Carnegie and the Rise of Big Business. Boston: Little, Brown and Company, 1975.
PBS (Public Broadcasting Service). Andrew Carnegie: Rags To Riches Timeline.
San Luis Obispo County Office of Education Online (SLOCOE). Andrew Carnegie: Striving to Enrich our Society and the People Within.
Swetnam, George and Helene Smith. The Carnegie Nobody Knows. USA: McDonald/Sward Publishing, 1993. ISBN: 0945437072.
This paper was developed by a student taking a Philanthropic Studies course taught at Grand Valley State University. It is offered by Learning To Give and Grand Valley State University.