Andrew Carnegie

Birth: Nov. 25, 1835DunfermlineFife, ScotlandDeath: Aug. 11, 1919LenoxBerkshire CountyMassachusetts, USABusinessman, Industrialist, Philanthropist. He is best known as the founder of what is now USX Corporation. Born in Dunfermline, Scotland, in 1848 his family immigrated to the United States and settled in Allegheny, Pennsylvania. He went to work at age 13, first as a mill hand, then as a telegraph messenger boy, learned telegraphy on his own time. After becoming a full time telegraph operator in 1851, he was hired at the age of 17 as a personal telegrapher and secretary to the local division superintendent of the Pennsylvania Railroad, having earned a reputation as the best telegraph operator in town. He soon became the superintendent's right hand man, and in 1859 Carnegie took over the superintendent's job at age 24. In 1865 he resigned from position to devote himself to the bridge business, which he was confident would boom after the Civil War with transcontinental railroads being built and the railroads in the South being reconstructed. He founded the Keystone Bridge Company and was awarded several major contracts to build bridges across the Mississippi and Missouri Rivers. In 1867 he moved from Pittsburgh, Pennsylvania to New York City, New York and made regular trips to Europe to sell bonds to finance his bridges. In 1869 he met influential investment banker Junius Morgan (J. P. Morgan's father) in London, England. With Morgan's help, he placed issues for various bridge construction projects and several railroads. Carnegie had entered into the iron business as early as 1861 and rapidly expanded by acquiring additional companies and new partners. His aim was to ensure his Keystone Bridge Company a reliable and cheap supply of iron beams and plates -- in short, vertical integration. Because of his experience on the Pennsylvania Railroad, he was convinced that the American railroads were going to switch to from iron rails to steel rails as soon as they were cheaply available. The newly developed Bessemer steelmaking process showed promise for making low-cost steel rails possible for the first time. During his tour of the Bessemer plants in England during 1872 Carnegie resolved to build a brand new, large plant devoted solely to making Bessemer steel railroad rails. This was to be The Edgar Thomson Works, completed in 1875. He became the chief salesman for the endeavor, and used his contacts with the railroad leaders in the United States to sell them his Bessemer steel rails, so the business became an immediate success. In October 1883 Carnegie bought the Homestead Works from a group of Pittsburgh investors, which was a highly efficient steel rail works that had been plagued with labor troubles for some years. Carnegie expanded the plant and installed large new open hearth furnaces and by 1885 converted Homestead to rolling beams and angles in order to diversify his products. By this time the sheer size and complexity of the business had grown to the point that Carnegie felt the need to have a single top manager to oversee all the mills. He had long admired Henry Clay Frick's abilities from past associations with him in the coke business. To obtain Frick's help with the management of his diverse steel interests, he brought him into the partnership in 1886. In 1892 Frick persuaded Carnegie to merge all the Carnegie steel interests into one vast company – Carnegie Steel. It was formed on July 1, 1892. Carnegie owned 55%, Frick 11%, industrialist Henry Phipps Jr. 11%, and nineteen others 1% each. The remaining 4% was held in reserve to reward top performers in the plants. The same day that Carnegie Steel came into existence, a strike began at Homestead. Carnegie and Frick agreed upon a two-point plan before Carnegie left on a long vacation to Scotland. First, the wage scale would be lowered; and second, Carnegie Steel would no longer recognize the Amalgamated union as the bargaining agent. Frick was left in charge and ultimately emerged victorious but at a very high personal price both for himself and Carnegie. He broke the union and the men were eventually forced to sign individual labor contracts in order to return to work. By 1900 Carnegie Steel was an industrial colossus. It was vertically integrated controlling its own ore, coke, limestone, and shipping facilities on the Great Lakes and from the Great Lakes to Pittsburgh. Despite prosperity, a rift grew between Carnegie and Frick, which eventually resulted in Frick's departure. In the end Carnegie's desire to finally retire himself produced the famous handwritten sales offer of $480,000,000 to J.P. Morgan and the formation of the United States Steel Corporation (now USX) in March 1901. He created seven philanthropic and educational organizations in the United States, including Carnegie Corporation of New York, and several more in Europe. One of Carnegie's lifelong interests was the establishment of free public libraries to make available to everyone a means of self-education. There were only a few public libraries in the world when, in 1881, Carnegie began to promote his idea. He and the Corporation subsequently spent over $56 million to build 2,509 libraries throughout the English-speaking world. During his lifetime, Carnegie gave away over $350 million. He died in Lenox, Massachusetts, in 1919.