Hall of Fame Inaugural Class
A diminutive Scotsman who enjoyed a successful career with the Pennsylvania Railroad before making a mid-life career change, Andrew Carnegie came to the iron and steel industry rather late in life. By the time he sold his interests in Carnegie Steel Co. to J.P. Morgan a quarter-century later, Carnegie had created the prototype for the modern integrated steelmaking complex that would carry forward into the 20th Century as U.S. Steel Corp. and would make America the worlds dominant industrial superpower. In the years he had left after walking away from his creation of Carnegie Steel, Andrew Carnegie established a record for philanthropic giving that would stand for decades.
Born in 1835 in Dumfermline, Carnegie left Scotland in 1848 with his family for Pittsburgh. The young Carnegie went to work at the age of 13, and within five years he had become the personal telegrapher and assistant to the superintendent of the Pennsylvania Railroads Western division.
Carnegie proved to be both an adept manager and investor. By the outbreak of the Civil War, he had become a railroad superintendent himself, and his investments in railroad stock and western Pennsylvania oil development made him a rich man at the age of 35.
Carnegie began investing in iron and steel in the years following the Civil War, and in 1872, while on a visit to England, toured one of Bessemers steel plants. Carnegie put aside his long-term goal to retire rich in his 30s and began to actively pursue steel opportunities in Pennsylvanias Monongahela Valley.
In 1873, Carnegie, McCandless & Co. started up with $750,000 in investment capital to build a steel rail mill at nearby Braddock, Pa. The following year, Carnegie helped found Edgar Thomson Steel Co. to take over the Braddock project with $1 million in capital.
The Edgar Thomson Works quickly became one of the most productive steel mills in the United States. Named for a Carnegie colleague at the Pennsylvania Railroad, the Thomson Works emerged as the nucleus of Carnegies steel empire.
Carnegie realized early on that to be profitable, he needed to control the raw material inputs required to make steel, and over the last quarter-century of the 19th Century, invested in coke production, iron ore development and limestone quarrying. His close relationship with Henry Clay Frick, who controlled the abundant coking coal resources near McConnellsville, Pa., helped secure an important natural resource for Carnegies growing steel empire.
In 1883, the Carnegie interests organized Carnegie, Phipps & Co. to purchase and operate the Homestead Mill near Pittsburgh. Carnegie launched Carnegie Steel in 1892. The company, which owned and operated the Thomson Works, the Homestead Works, the Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Keystone Bridge Works, the Hartman Steel Works and the Scotia ore mines near State College, controlled a major share of North Americas iron and steel production,
The opening of the fabulously rich Mesabi Range in Minnesota in 1892 created the opportunity for Carnegie to take control of North Americas richest iron deposits. Henry Clay Frick and Henry Oliver, another Carnegie associate, were early investors in the Minnesota iron range. At first, Carnegie resisted getting Carnegie Steel involved in iron production in far off Minnesota. But when he realized that the Mesabi had the potential to transform American steelmakingand might fall into the hands of John D. RockefellerCarnegie took a major position in the Oliver Mining Co., which by the end of the century would control 70 percent of production on the range.
Carnegies investment in Oliver Mining made Carnegie Steel a truly integrated operation. Carnegie controlled a guaranteed supply of cheap ore and some of the richest coal deposits in the United States. The company operated railroads and a fleet of Great Lakes ore boats. Its furnaces, foundries and mills made pig iron, steel and finished products.
In 1900, Carnegie engineered a merger with Federal Steel Co., one of Carnegie Steels major rivals. The Federal Steel merger made Carnegie Steel much more geographically diversified; Federal Steel had extensive operations in Chicago and on the lower end of the Great Lakes.
At the age of 66, Andrew Carnegie decided to retire and devote his life to philanthropy. In 1901, he agreed to sell Carnegie Steel to J.P. Morgan for $492 million. Morgan then combined Carnegie Steel with iron and steel interests represented by John D. Rockefeller and others to form U.S. Steel Corp., the worlds first billion-dollar corporation.
John Brooks, a New York Times reviewer, once noted Carnegie made a game try at dying poor, probably working harder at giving money away than he ever had at making it. In the 18 years between his sale of Carnegie Steel and his death at 84 in 1919, Andrew Carnegie created philanthropy as we know it today. As early as the 1870s, Carnegie began endowing libraries in communities across America. His establishment of the Carnegie Corp. created a philanthropic vehicle that in the 90-plus years since Carnegies death has distributed well more than the amount Carnegie received from Morgan in 1901.