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Bio & Industry
Andrew Carnegie a Scottish-American industrialist who led the enormous expansion of the American steel industry in the late 19th century. He was also one of the most important philanthropists of his era.
Carnegie was born in Scotland, and emigrated to the United States with his parents when he was 13. His first job was as a factory worker in a bobbin factory. Soon after he became a messenger boy and he eventually he progressed up the ranks of a telegraph company.
In the 1870s, he founded the Carnegie Steel Company in Pittsburgh, a step which cemented his name as one of the "Captains of Industry". By the 1890s, the company was the largest and most profitable industrial enterprise in the world. It helped Pittsburgh earn the nickname, “the steel city”.
Andrew Carnegie's 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 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.
Workers
For Carnegie's workers, however, cheap steel for the consumer negatively impacted workers. The life of a Carnegie steel worker was grueling. Twelve-hour shifts, seven days a week. Carnegie gave his workers a single holiday-the Fourth of July; for the rest of the year they endured heavy workloads. "Hard! I guess it's hard," said a laborer at the Homestead mill. "I lost forty pounds the first three months I came into this business. It sweats the life out of a man. I often drink two buckets of water during twelve hours; the sweat drips through my sleeves, and runs down my legs and fills my shoes."
For many the work went without a break; others managed to find a few minutes here and there. "We stop only the time it takes to oil the engine," a stop of three to five minutes, said William McQuade, a plate-mill worker in 1893. "While they are oiling they eat, at least some of the boys, some of them; a great many of them in the mill do not carry anything to eat at all, because they haven't got time to eat. The demanding conditions sapped the life from workers. "You don't notice any old men here," said a Homestead laborer in 1894. "The long hours, the strain, and the sudden changes of temperature use a man up." Sociologist John A. Fitch called it "old age at forty." For his trouble, the average worker in 1890 received about 10 dollars a week, just above the poverty line of 500 dollars a year. It took the wages of nearly 4,000 steelworkers to match the earnings of Andrew Carnegie.
To the casual observer a Carnegie mill was chaos. The atmosphere was full of loud noise and rumbling of machines and engines. "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. Up to 9% of Carnegie workers died on the job annually. 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."
Investing Money
For Carnegie, it was paramount to invest large sums of his money in his business to improve efficiency, not safety. His vast steel mills 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. Carnegie invested in the Bessemer converter, which removed impurities from the iron to make the steel, allowed unskilled workers to produce mass amounts of steel cheaply. When that invention became obsolete, Carnegie stayed ahead of the curve by upgrading his factories with open hearth furnaces. These furnaces burned out impurities at nearly 3,000 degrees.
Carnegie advanced his wealth not only by investing in technological innovation, but he was also a leader in business innovation. These innovations helped to reduce operating costs leading to higher profits. Carnegie employed a strategy called vertical integration. This means Carnegie controlled all the means of production from raw materials such as coke and iron ore to the shipping industry such as ships and railroads. Carnegie next bought out and absorbed his competitors steel mills, which led to him having a monopoly on steel, which is known as horizontal integration.
Philanthropy
Carnegie sold his steel company in 1901 for $480 million (16.8 billion in today's money) to J.P. Morgan, who created U.S. Steel. Carnegie devoted the remainder of his life to large-scale philanthropy, with special emphasis on local libraries, world peace, education and scientific research. His life has often been referred to as a true "rags to riches" story.
With the fortune he made from business among others he built Carnegie Hall, later he turned to philanthropy and interests in education, founding the Carnegie Corporation of New York, Carnegie Endowment for International Peace, Carnegie Institution of Washington, Carnegie Mellon University and the Carnegie Museums of Pittsburgh.
He is often regarded as the second-richest man in history after John D. Rockefeller.