Andrew Carnegie: led the expansion of the American steel industry in the late 19th century.
Carnegie as he appears in the National Portrait Gallery in Washington, D.C.
Carnegie started work as a telegrapher and by the 1860’s had investments in railroads, railroad sleeping cars, bridges and oil derricks. He accumulated further wealth as a bond salesman raising money for American enterprise in Europe. He built Pittsburgh’s Carnegie Steel Company, which he sold to J.P. Morgan in 1901 for $480 million. It became the U.S. Steel Corporation. After selling Carnegie Steel, he surpassed John D. Rockefeller as the richest American for the next couple of years.
Starting in 1853, Thomas A. Scott of the Pennsylvania Railroad Company employed Carnegie as a secretary/telegraph operator . In 1859, Carnegie became superintendent of the Western Division. Carnegie hire his brother, Tom, to be his personal secretary and telegraph operator. Carnegie also hired his cousin, Maria Hogan, who became the first female telegraph operator in the country. His employment by the Pennsylvania Railroad Company would be vital to his later success. The railroads were the first big businesses in America, and the Pennsylvania was one of the largest of them all.
After the war, Carnegie left the railroads to devote all his energies to the ironworks trade. Carnegie worked to develop several iron works, eventually forming the Keystone Bridge Works and the Union Ironworks, in Pittsburgh. Although he had left the Pennsylvania Railroad Company, he remained closely connected to its management, namely Thomas A. Scott and J. Edgar Thomson. He used his connection to the two men to acquire contracts for his Keystone Bridge Company and the rails produced by his ironworks. .When he built his first steel plant, he made a point of naming it after Thomson.
Carnegie made his fortune in the steel industry, controlling the most extensive integrated iron and steel operations ever owned by an individual in the United States. One of his two great innovations was in the cheap and efficient mass production of steel by adopting and adapting the Bessemer process for steel making. Sir Henry Bessemer had invented the furnace which allowed the high carbon content of pig iron to be burnt away in a controlled and rapid way.
1885–1900: Steel empire
Bessemer converter: schematic diagram
The mass-production of cheap steel only became possible after the introduction of the Bessemer process, named after its brilliant inventor, the British metallurgist Sir Henry Bessemer (1813-1898).
The second was in his vertical integration of all suppliers of raw materials. In the late 1880’s, Carnegie Steel was the largest manufacturer of pig iron, steel rails, and coke in the world, with a capacity to produce approximately 2,000 tons of pig metal per day.
In 1883, Carnegie bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a 425-mile (685 km) long railway, and a line of lake steamships. Carnegie combined his assets and those of his associates in 1892 with the launching of the Carnegie Steel Company.
By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it. Carnegie’s empire grew to include the J. Edgar Thomson Steel Works in Braddock, (named for John Edgar Thomson, Carnegie’s former boss and president of the Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project across the Mississippi River at St. Louis, Missouri (completed 1874). This project was an important proof-of-concept for steel technology, which marked the opening of a new steel market.
1901: U.S. Steel
Carnegie caricatured by Spy for Vanity Fair, 1903
In 1901,Carnegie was 66 years of age and considering retirement. John Pierpont Morgan, a banker, envisioned an integrated steel industry that would cut costs, lower prices to consumers, produce in greater quantities and raise wages to workers. To this end, he needed to buy out Carnegie and several other major producers and integrate them into one company. He concluded negotiations on March 2, 1901, and formed the United States Steel Corporation. It was the first corporation in the world with a market capitalization over $1 billion.
Carnegie Mellon University Carnegie Library of Pittsburgh
Carnegie devoted the remainder of his life to large-scale philanthropy, with special emphasis on local libraries, world peace, education and scientific research. With the fortune he made from business, he built Carnegie Hall and the Peace Palace and founded the Carnegie Corporation of New York, Carnegie Endowment for International Peace, Carnegie Institution for Science, Carnegie Trust for the Universities of Scotland, Carnegie Hero Fund, Carnegie Mellon University and the Carnegie Museums of Pittsburgh, among others.
Carnegie commemorated as an industrialist, philanthropist, and founder of the Carnegie Endowment for International Peace, 1960.