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Issue 8 - The richest man in the world

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Scotland Magazine Issue 8

Scotland Magazine Issue 8
May 2003

 

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The richest man in the world

WE PROFILE THE DUNFERMLINE WEAVER'S SON TURNED AMERICAN STEEL MAGNATE AND PHILANTHROPIST, ANDREW CARNEGIE

The richest man in the world (Issue 8)
At the age of 65, entrepreneur Andrew Carnegie sold his business, the Carnegie Steel Company, for $480 million, making him the world’s richest man. But let’s begin at the beginning …

Andrew Carnegie was born in Dunfermline, Fife, in 1835, the son of a skilled weaver. When steam-powered looms were introduced in 1847, Andrew’s father was made unemployed. The family moved to Pittsburgh to find work.

Andrew Carnegie, now aged 13, began working as a bobbin boy in a textile mill, earning $1.20 a week. He was soon employed as a clerk. In 1849, he became a messenger in a telegraph office, then a telegraph operator. He next worked for the Pennsylvania Railroad, as personal telegrapher and assistant to the superintendent of the railroad’s western division, Thomas Scott.

Scott had encouraged Carnegie to make his first financial investment, and when Carnegie’s father died in 1855, the young man took a bank loan which he invested in the Woodruff Sleeping Car Company. This brought in dividends equivalent to more than three times Carnegie’s salary at the time.

He also impressed his superiors at work, and became superintendent of the railroad’s western division.

Carnegie invested in a Pennsylvanian oil company, and continued to invest in various companies, such as Piper and Schiffler, with great success.

In 1865, he resigned from Pennsylvania Railroad in order to restructure the Piper and Schiffler company and run it, with associates, as his own interest: the Keystone Bridge Company. It produced bridges made of iron, rather than the typical wooden ones.

In 1867, the successful Keystone Telegraph Company followed.

Carnegie visited Henry Bessemer’s steel plants in England, saw great potential, and decided to expand his own steel interests back in the US. In 1875, the first Carnegie steel plant opened.

Whilst Andrew Carnegie’s business interests were growing, so too were his philanthropic convictions. He used his money to fund projects such as building libraries across Scotland, allowing free access for all. In 1889, Carnegie published an essay which became known as the Gospel of Wealth, in which he stated his belief that the wealthy have a moral duty to the poor, and should live modestly, and give the rest of their money away. Carnegie was true to his ideals, and had given away a massive $350 million by his death – nearly 90 per cent of his fortune.

But one incident in Carnegie’s career was to spoil his reputation as champion of the worker. In 1892, the US economy was depressed, and the manager and part-owner of Carnegie’s Homestead Pennsylvania steel plant, Henry Frick, wished to slash the workers’ wages and break their union. Carnegie was away on holiday, and granted Frick carte blanche. The union refused the terms, and Frick shut the plant, locking out more than 1,000 workers. A private army, The Pinkertons, was hired, and clashed with the strikers, leaving several dead and many injured. The union was all but destroyed. Carnegie was always tormented by these events.

Carnegie’s wife Louise gave birth to the couple’s only child, Margaret, in 1897, and the search began for a home back in Scotland. The couple settled on Skibo Castle in the Highlands, which was rebuilt as a splendid baronial mansion, using local craftsmen for the work.

Carnegie sold his steel interests in 1901, thus becoming the world’s richest man.

During the years leading up to the start of the World War I, Carnegie created and funded philanthropic organisations such as the Carnegie Teachers’ Pension Fund and the Carnegie Corporation – providing grants for colleges, technical schools and universities – as well as funding the construction of the Palace of Peace in the Hague, today better known as the International Court of Justice.

At the start of World War I, the Carnegies moved back to the USA, and in 1916 to the Shadowbrook estate, Massachusetts, where Carnegie died in 1919. His gravestone is made from Skibo stone.