The business story
Andrew Carnegie built the most efficient steel business of his era and then gave away most of what it earned him. He is studied for both halves of that record: the industrial method that made him rich and the philanthropic doctrine he wrote to govern what came after. The same record includes the 1892 Homestead Strike, and any fair account has to keep all of it in view.
Carnegie ran his business on a few firm rules.
Early life and background
Carnegie was born in Dunfermline, Scotland, in 1835. His father was a handloom weaver whose craft was being displaced by power looms, and the family fell into poverty. In 1848, when Andrew was 12, they emigrated to Allegheny, Pennsylvania, near Pittsburgh.
He started work at once, first as a bobbin boy in a cotton mill and then as a telegraph messenger. The telegraph was his opening. He learned to read signals by ear and made himself useful to senior people, which led to a post at the Pennsylvania Railroad under Thomas Scott. There he learned how a large, capital-heavy enterprise was managed, and, through Scott, how to invest in the bridge, iron and oil ventures that served the railroads.
Building Carnegie Steel
Carnegie did not invent cheap steelmaking. He saw the Bessemer process on trips to Britain and brought it to America with full commitment. His contribution was operational: modern mills, close measurement of costs at every step and steady reinvestment of profits into better plant.
His structural advantage was vertical integration. Over time his enterprise controlled iron-ore sources, the coke that fired the furnaces and the rail and shipping that moved materials. The Carnegie Steel Company, formed in 1892 to consolidate his holdings, became the most profitable steel producer in the world.
That year also brought Homestead. With Carnegie in Scotland, his partner Henry Clay Frick moved to break the union at the Homestead Works, hired Pinkerton agents and locked the workers out. A clash on 6 July left about ten people dead, and the plant reopened without the union. The article holds that Carnegie's absence does not remove his ownership of the outcome.
In 1901 he sold Carnegie Steel to a syndicate led by J. P. Morgan for $303,450,000. It became the core of U.S. Steel, the first billion-dollar corporation. He died in 1919.
