Andrew Carnegie
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- Cornelius Vanderbilt: Pioneer American Industrialist
- Leland Stanford (1824-1893)
- Railroad President
- Emissary to the Mormons
- Frustrating Partner
- John D. Rockefeller, Senior Oil Refining 1863-65
- Oil Refining 1865-1870
- Henry Clay Frick (1849-1919)
Andrew Carnegie
One of the captains of industry of 19th century America, Andrew Carnegie helped build the formidable American steel industry, a process that turned a poor young man into one of the richest entrepreneurs of his age. Later in his life, Carnegie sold his steel business and systematically gave his collected fortune away to cultural, educational and scientific institutions for "the improvement of mankind." Carnegie was born in Dunfermline, the medieval capital of Scotland, in 1835. The town was a center of the linen industry, and Andrew's father was a weaver, a profession the young Carnegie was expected to follow. But the industrial revolution that would later make Carnegie the richest man in the world, destroyed the weavers' craft. When the steam-powered looms came to Dunfermline in 1847 hundreds of hand loom weavers became expendable. Andrew's mother went to work to support the family, opening a small grocery shop and mending shoes. "I began to learn what poverty meant," Andrew would later write. "It was burnt into my heart then that my father had to beg for work. And then and there came the resolve that I would cure that when I got to be a man." An ambition for riches would mark Carnegie's path in life. However, a belief in political egalitarianism was another ambition he inherited from his family. Andrew's father, his grandfather Tom Morrison and his uncle Tom Jr. were all Scottish radicals who fought to do away with inherited privilege and to bring about the rights of common workers. But Andrew's mother, fearing for the survival of her family, pushed the family to leave the poverty of Scotland for the possibilities in America. She borrowed 20 pounds she needed to pay the fare for the Atlantic passage and in 1848 the Carnegies joined two of Margaret's sisters in Pittsburgh, then a sooty city that was the iron-manufacturing center of the country. William Carnegie secured work in a cotton factory and his son Andrew took work in the same building as a bobbin boy for $1.20 a week. Later, Carnegie worked as a messenger boy in the city's telegraph office. He did each job to the best of his ability and seized every opportunity to take on new responsibilities. For example, he memorized Pittsburgh's street lay-out as well as the important names and addresses of those he delivered to. Carnegie often was asked to deliver messages to the theater. He arranged to make these deliveries at night--and stayed on to watch plays by Shakespeare and other great playwrights. In what would be a life-long pursuit of knowledge, Carnegie also took advantage of a small library that a local benefactor made available to working boys. One of the men Carnegie met at the telegraph office was Thomas A. Scott, then beginning his impressive career at Pennsylvania Railroad. Scott was taken by the young worker and referred to him as "my boy Andy," hiring him as his private secretary and personal telegrapher at $35 a month. "I couldn't imagine," Carnegie said many years later. "what I could ever do with so much money." Ever eager to take on new responsibilities, Carnegie worked his way up the ladder in Pennsylvania Railroad and succeeded Scott as superintendent of the Pittsburgh Division. At the outbreak of the Civil War, Scott was hired to supervise military transportation for the North and Carnegie worked as his right hand man. The Civil War fueled the iron industry, and by the time the war was over, Carnegie saw the potential in the field and resigned from Pennsylvania Railroad. It was one of many bold moves that would typify Carnegie's life in industry and earn him his fortune. He then turned his attention to the Keystone Bridge Company, which worked to replace wooden bridges with stronger iron ones. In three years he had an annual income of $50,000. However, Andrew expressed his uneasiness with the businessman's life. In a letter to himself at age 33, he wrote: "To continue much longer overwhelmed by business cares and with most of my thoughts wholly upon the way to make more money in the shortest time, must degrade me beyond hope of permanent recovery. I will resign business at thirty-five, but during the ensuing two years I wish to spend the afternoons in receiving instruction and in reading systematically." Carnegie would continue making unparalleled amounts of money for the next 30 years. Two years after he wrote that letter Carnegie would embrace a new steel refining process being used by Englishman Henry Bessemer to convert huge batches of iron into steel, which was much more flexible than brittle iron. Carnegie threw his own money into the process and even borrowed heavily to build a new steel plant near Pittsburgh. Carnegie was ruthless in keeping down costs and managed by the motto "watch costs and the profits take care of themselves." "I think Carnegie's genius was first of all, an ability to foresee how things were going to change," says historian John Ingram. "Once he saw that something was of potential benefit to him, he was willing to invest enormously in it." Carnegie was unusual among the industrial captains of his day because he preached for the rights of laborers to unionize and to protect their jobs. However, Carnegie's actions did not always match his rhetoric. Carnegie's steel workers were often pushed to long hours and low wages. In the Homestead Strike of 1892, Carnegie threw his support behind plant manager Henry Frick, who locked out workers and hired Pinkerton thugs to intimidate strikers. Many were killed in the conflict, and it was an episode that would forever hurt Carnegie's reputation and haunt the man. Still, Carnegie's steel juggernaut was unstoppable, and by 1900 Carnegie Steel produced more of the metal than all of Great Britain. That was also the year that financier J. P. Morgan mounted a major challenge to Carnegie's steel empire. While Carnegie believed he could beat Morgan in a battle lasting five, 10 or 15 years, the fight did not appeal to the 64-year old man eager to spend more time with his wife Louise, whom he had married in 1886, and their daughter, Margaret. Carnegie wrote the asking price for his steel business on a piece of paper and had one of his managers deliver the offer to Morgan. Morgan accepted without hesitation, buying the company for $480 million. "Congratulations, Mr. Carnegie," Morgan said to Carnegie when they finalized the deal. "you are now the richest man in the world." Fond of saying that "the man who dies rich dies disgraced," Carnegie then turned his attention to giving away his fortune. He abhorred charity, and instead put his money to use helping others help themselves. That was the reason he spent much of his collected fortune on establishing over 2,500 public libraries as well as supporting institutions of higher learning. By the time Carnegie's life was over, he gave away 350 million dollars. Carnegie also was one of the first to call for a "league of nations" and he built a "a palace of peace" that would later evolve into the World Court. His hopes for a civilized world of peace were destroyed, though, with the onset of World War I in 1914. Louise said that with these hostilities her husband's "heart was broken." Carnegie lived for another five years, but the last entry in his autobiography was the day World War I began. 
Cornelius Vanderbilt was born at Port Richmond, Staten Island, New York, the son of a ferryman and farmer. He received little formal schooling. By age 16, he was transporting people and cargo around New York harbor. During the War of 1812, he secured a government contract to deliver supplies to posts throughout the area. Vanderbilt eventually controlled most of the ferry traffic in New York waters, but in 1818 he sold his fleet and went to work for a steamship line run by Thomas Gibbons. The Gibbons linewas highly successful by effectively undercutting the earlier line established by Robert Fulton and Robert Livingston. Litigation involving this rivalry was eventually settled in the landmark Supreme Court case, Gibbons v. Ogden (1824). Vanderbilt stayed with Gibbons until 1829 when, having learned all he could and accumulated sufficient savings, he left to establish his own line. One of his first victories was won in a price war against Daniel Drew, who was forced to withdraw from the business. During the 1830s, Vanderbilt's line became the dominant steamship presence on the Hudson River, due largely to low pricing and comfortable accommodations. Eventually, his competitors banded together and bought him out. Vanderbilt turned to serving Long Island and Boston. Never the retiring sort, he adopted the title “Commodore” and frequently dressed in a full naval uniform. Seizing upon the gold rush fever of 1849, Vanderbilt established a cheap, reliable way for prospectors to reach the gold fields of California. In 1851, he arranged ship accommodations from New Orleans to Central America, overland travel across the isthmus, and another ship for the voyage up the Pacific to San Francisco. Vanderbilt’s venture was so successful that his competitor bought him out and paid him $50,000 a month for not operating his business. In 1855, Vanderbilt opted for the luxury liner business and for a few years operated a line between New York and Havre, France. Vanderbilt entered the railroad business in 1857 and eventually gained control of the New York and Harlem Railroad—again besting his rival, Daniel Drew. However, Drew and his associates James Fisk and Jay Gould thwarted Vanderbilt’s efforts to gain control of the Erie Railroad in the “Erie War” of 1867-68. Despite this setback, Vanderbilt managed to expand his empire through purchase and consolidation. He gained control of the New York Central in 1869. By 1873, he successfully linked New York to Chicago by rail. During the Panic of 1873 and the resulting depression, Vanderbilt began construction of Grand Central Terminal in New York City, offering employment to thousands who otherwise would have been unemployed. The New York Central was one of the few railroads that posted profits during the depression. Vanderbilt was never a great philanthropist, but he did bequeth $1 million to Central University in Nashville, Tennessee, which became Vanderbilt University. The bulk of his $100 million fortune was left to his son, William. Jay Gould GOULD, Jay, financier, born in Roxbury, Delaware County, New York, 27 May, 1836. His early years were spent on his father's farm, and at the age of fourteen he entered Hobart academy, New York, and kept the books of the village blacksmith. He acquired a taste for mathematics and surveying, and on leaving school found employment in making the surveys for a map of Ulster County. The accuracy of this work attracted the attention of the late John Delafield, who applied to the legislature for aid in the completion of a topographical survey of the entire state by Mr. Gould. Mr. Delafield died before ally material progress was made, and Mr. Gould undertook to make the surveys unaided. During the summer of 1853 he completed a survey of Albany County, and surveyed and mapped the village of Cohoes, and in the following year made the survey and map of Delaware County, and organized and despatched parties to survey Lake and Geauga counties, Ohio, and Oakland County, Michigan From these surveys he accumulated $5,000. He published a "History of Delaware County" (1856), and while projecting other surveys was prostrated with typhoid fever. On his recovery he became acquainted with Zadock Pratt, who sent him into the western part of the state to select a site for a tannery. He chose a fine hemlock growth, erected a saw-mill and blacksmith-shop, and with Mr. Pratt was soon doing a large lumbering business. Subsequently he bought out Mr. Pratt's interest, and conducted the business alone till just before the panic of 1857, when he sold out his entire plant. In 1857 he because the largest stockholder and a director in the Stroudsburg. Pennsylvania bank. Shortly after the crisis he bought the bonds of the Rutland and Washington railroad at ten cents on the dollar, abandoning every other interest and putting all his money into railroad securities. For a long time he was president, treasurer, and general superintendent of this company. He brought about a consolidation of the Rensselaer and Saratoga road, and with the proceeds removed to New York City in 1859, established himself as a broker, and invested heavily in Erie railway stock. He entered the directory of that company and became president, holding the office till the reorganization of the directory in 1872. He next made large purchases of the stocks of the Union Pacific, the Wabash, the Texas Pacific, the St. Louis and northern, the Missouri Pacific, and the Missouri, Kansas, and Texas railroad companies, taking the latter out of the hands of its receiver. He also invested deeply in the stock of the Atlantic and Pacific telegraph company, and on its consolidation with the Western union he organized the American union (1879), which was merged into the Western union in 1881. In December, 1880, official records showed that Mr. Gould was in control of 10,000 miles of railroad, or more than one ninth of the entire mileage of the country. Early in 1881 he became interested in the elevated railroad system of New York City. A doubt having been cast upon his financial standing, he summoned several gentlemen to his private office on 13 March, 1882, and spread before them for examination certificates of stocks having a face value of $53,000,000, all in his own name, and offered to produce $20,000,000 more, if desired. In March, 1887, Mr. Gould purchased a controlling interest in the St. Louis and San Francisco railroad company, which has an aggregate mileage of nearly 900 miles, and is a joint owner with the Atchison, Topeka, and Santa Fe railroad company, of the Atlantic and Pacific, and the western portion of the Southern Pacific railroad companies. These, with the projected links, will give him control of an additional 3,000 miles of rail. Leland Stanford (1824-1893) Other Biographies Much like his future partners, Leland Stanford remade himself in gold rush California as a shopkeeper. In 1852, fed up with lawyering, he left the Midwest to become a partner in a wholesale grocery business founded by his brothers. By 1860 the Sacramento store was booming, and Stanford had become its sole proprietor. He had also formed a tight bond with Collis Huntington, Mark Hopkins, and Edwin andCharles Crocker through Sacramento's new Republican party, which would soon nominate Stanford as its candidate for governor. A Political Man To the casual observer he might have seemed an interesting choice. Slow to speak, a deliberate thinker, Stanford was characterized by a plodding nature that repeatedly vexed his railroad partners. However he relished public life, and it was in this capacity that he best served the Central Pacific. As the board of directors took form in 1860, Stanford headed east to lobby for the venture and gain partisan support for his gubernatorial bid. Among Stanford's contacts was president-elect and fellow Republican Abraham Lincoln. Upon Stanford's return to Sacramento in summer 1861, the directors met to name officers. Stanford appointed Theodore Judah and Doc Strong as nominating committee, and, perhaps swayed by his political gravity, they in turn named Stanford president. It was a slight to company mastermind Huntington, who had to settle for vice president -- and the beginning of bad blood that estranged him from Stanford and drove Judah away from the Central Pacific. Railroad President On January 8, 1863, Governor Stanford broke ground to inaugurate the Central Pacific's construction. Crowds cheered him that day, but bad choices cost Stanford his governor's office by the end of his first term. Characteristic was his May decision to appoint business partner E. B. Crocker to the California Supreme Court. It was a temporary appointment containing no real conflict of interest, but it looked bad, and caused the governor to lose ground among supporters. Political position had allowed him to funnel state money to the railroad; free from the responsibilities of office, Stanford turned his full attention to railroad duties. However, the president seemed to have trouble motivating himself, leaving the exhausting tasks to his compatriots. When he made decisions on their behalf, the results often sent the Associates scrambling. In 1868 he signed a million-dollar draft without their consultation, making the company captive to the Bank of California. It sent Hopkins into a tailspin. "If it didn't suit Governor Stanford's lazy way as a good fellow doing a large business with clever fellows in a clever manner, it would please me very much better," he complained to Huntington. Emissary to the Mormons Stanford proved of use to the company in the Utah, where he acted as emissary to the Mormons and kept an eye on the competing Union Pacific. In early 1868, as the Central Pacific pushed out of the mountains, the Associates feared they had made a mistake by not keeping a delegate in the camp of Brigham Young. Stanford, the diplomat among them, seemed the person to send. By August of that year he had reached an agreement with Young providing Mormon laborers for Central Pacific grading work. Frustrating Partner Stanford's characteristic silence and reticent pace repeatedly tried his partners' patience. "We have not heard from Stanford in ten days," Charles Crocker fumed to Huntington. "Don't know what he is doing. I guess nothing -- in fact I never knew him to do much himself -- he is awful lazy & never attends to details -- wants somebody to come along afterward & stop the leaks & do the work." What reconnaissance he did report further harried them. His correspondence contained hare-brained schemes for piercing the canyons and ever-changing speculations of the line's potential location that frustrated the Associates' land-grabbing designs. However, Stanford's partners were sometimes too quick to anger at his work. Stanford's appraisal of Union Pacific's rapid progress, though frustrating, was accurate, as he later by proved to Huntington by escorting him across Utah Territory to see for himself. A Lasting Legacy To his colleagues, Stanford's partnership was a source of constant consternation; to Huntington, his role as figurehead a plain insult. Tensions continued to mount after the successes of 1869, as Stanford repeatedly dipped into company holdings to fund construction of palatial homes and the chartering of a private institution. Huntington derided the latter project as "the circus." But Leland Stanford Junior University, named in honor of the cherished son Stanford lost to typhoid in 1884, ensured the most famous of the Big Five a legacy that long outlasted those of his Associates. John D. Rockefeller, Senior Oil Refining 1863-65 On August 27, 1859, Edwin Drake struck oil near Titusville, Pennsylvania, setting off a frenzied oil boom in what soon became known as the "oil regions" of northwestern Pennsylvania. Drake was the employee of a group of New Haven, Connecticut, investors in the Pennsylvania Rock Oil Company. They had obtained a sample of the Pennsylvania oil and had a Yale University chemist analyze it. The chemist determined that the Pennsylvania oil was of very high quality and could be refined into a variety of useful products. The technology used by Drake was not new. What was new was the idea of drilling for oil -- the idea that you could pump oil out of the ground like you could pump water. The technology for drilling wells was quite advanced by 1859. To that time, wells were drilled for either water or salt (more accurately, brine which would be refined to get the salt). In the process of drilling for salt all over the United States in the early 19th century it was not uncommon -- especially in the Pennsylvania area -- to get oil seepage into the salt well. Most of the time this was regarded as a nuisance, but some enterprising merchants went into the business of selling the oil in small bottles as a "Natural Remedy" or "Curative Agent." The technology for refining oil was also known by the early 1850s. Doctor Abraham Gesner, a Canadian, in August 1846 patented a method for distilling kerosene (a name he invented from the Greek "keros" -- wax -- and "elaion" -- oil) from coal. In 1850, a Scottish industrial chemist, James Young, patented a method of obtaining "burning oils" from petroleum through destructive distillation. In 1852 two Boston chemists, Luther and William Atwood, began making lubricants from coal tar. Finally, in 1856, Samuel Downer, a whale-oil merchant, bought out the Atwoods and boosted production to 650,000 gallons of refined oil a year. By 1861, coal-oil lamps were widespread and coal-oil was even made in Cleveland. Rockefeller began investigating the feasibility of entering the oil refining business in 1862 and the firm of Andrews, Clark & Company was formed in 1863. (Samuel Adams had experience with shale-oil refining, and Clark brought in his brothers.) Probably figuring in Rockefeller's decision to enter the business was the entry into Cleveland later that year of the long-planned Atlantic & Great Western Railroad. The A&GW line went east to Meadville, Pennsylvania, then northeast to Corry, Pennsylvania, and then across the border into New York state, where it connected to the Erie Railroad. The A&GW also had branches into the heart of the oil regions -- Titusville and Franklin. This gave Cleveland two routes to New York City -- the New York Central-Lake Shore system, and the A&GW-Erie connection. This immediately gave Cleveland a transportation advantage over Pittsburgh, which was dominated by the Pennsylvania Railroad. The Pennsylvania oil was of high quality. One barrel yielded 60-65% illuminating oil, 10% gasoline, 5-10% benzoyl or naphtha (a volatile inflammable liquid used as a solvent in dry cleaning, varnish making, etc.), with the remainder tar and wastes. Rockefeller abhorred waste and devoted considerable energy to increasing the efficiency of his refining business. He believed that the secret of success was attention to detail -- to wringing little efficiencies out of every aspect of his business. He hired his own plumber and bought his own plumbing supplies. He built his own cooperage shop and made his own barrels for the oil. He bought tracts of white-oak timber for making the barrels. Instead of transporting the freshly cut green timber directly to the cooperage shop, he had kilns built on the timber tracts to dry the wood on site, to reduce the shipping weight of the lumber. He bought his own wagons and horses to transport the wood to the cooperage shop in Cleveland. (We would call this "vertical integration" today.) Oil Refining 1865-1870 In February 1865, at the age of 24, Rockefeller bought out the Clark brothers (Maurice Clark had brought his brothers into the refining business) for $72,500 and gained complete control of the business. The Clarks had resisted borrowing money to expand and Rockefeller was convinced of the correctness of his course. He immediately moved to greatly extend his enterprise. He borrowed heavily and plowed all his profits back into the business in order to expand it further, and took decisive steps to strengthen and increase the efficiency of all aspects of the firm. In 1866, John D. brought his brother William Rockefeller into the partnership and they built another refinery in Cleveland which they named the Standard Works. They also opened a New York City office with William Rockefeller in charge, to handle the export business, which eventually became larger than the domestic business.
In the spring of 1892, Emma Goldman, Alexander Berkman, and his cousin, Modest Stein, opened an ice cream shop in Worcester, Massachusetts. "It was spring and not yet warm," Goldman later wrote, "but the coffee I brewed, our sandwiches, and dainty dishes were beginning to be appreciated. Within a short time we were able to invest in a soda-water fountain and some lovely coloured dishes." The entrepreneurs "were dangerously close to economic success," wrote historian Richard Drinnon, "when news reached Worcester of the lockout of workers at Homestead, Pennsylvania," home of the Carnegie Steel Company and its chairman, Henry Clay Frick. 
Explosive Labor Dispute In response to declining prices of rolled-steel productsin the early 1890s, Henry Clay Frick, general manager of the Homestead plant owned by Andrew Carnegie, took a series of bold but miscalculated steps to protect the bottom line. In June 1892, he slashed wages, evicted workers from their company houses, stopped negotiating with union leaders, and threatened to bring in the Pinkertons -- a detective agency for hire that amounted to a private army of thugs. When workers called a strike, Frick called on the Pinkertons. On July 6, in the middle of the night, 300 Pinkertons crammed onto barges were towed ten miles up the Monongahela River to Homestead. Armed workers were waiting on the river bank. At dawn, a pitched battle broke out. After twelve relentless hours, three Pinkertons and seven strikers lay dead. Self-Made Businessman The man responsible for this carnage had started out life as the humble son of a pious Mennonite father. He worked as a farmhand on his father's farm, and as a bookkeeper in his uncle's store. "Assuredly Frick was called to business if anyone ever was," according to Drinnon. At the age of twenty he formed Frick & Company, a coke-producing venture in the Connellsville coal district of Pennsylvania. During a financial panic in 1873, Frick seized the opportunity to buy out competitors and ally himself with Carnegie Steel. By the age of thirty, he had made himself a millionaire. Symbol of Industry Henry Clay Frick stood for more than just his own success. Following decades of American mechanization, business expansion, and the immigrant-fueled growth of theindustrial working class, men like Frick, Carnegie, John D. Rockefeller, James J. Hill,George Pullman and others represented a class of titans. These Gilded Age industrialists -- collectively known to history as "robber barons" -- employed thousands of workers; received mailbags full of requests for charity; and built ostentatious mansions in places like New York City's Millionaire's Row, and Newport, Rhode Island. Target for Revenge To anarchists who witnessed the struggles of working people to survive, a robber baron like Frick was a natural target. Berkman decided to assassinate Frick in revenge for his savage treatment of workers during the Homestead Strike. Posing as an employment agent for strikebreakers, Berkman gained entrance to Frick's office on July 23, 1892. He pointed his revolver at Frick's head and fired. The bullet struck Frick in the shoulder. Berkman lunged at Frick, managing to stab him with a sharpened steel file before being dragged away. Frick stopped a deputy sheriff from shooting Berkman. "I do not think I will die," he gasped, "but whether I do or not, the Company will pursue the same policy, and it will win." Frick did not die. Berkman was sentenced to twenty-two years in prison, of which he served fourteen. Steel Titan Eight years after the attempt on his life, Frick formed the St. Clair Steel Company, which operated the largest coke works in the world. In 1900, Carnegie and Frick locked horns over the price of coke supplied to Carnegie Steel. Frick sued for the market value of his coke and the case was settled out-of-court. A year later, in 1901, Carnegie sold his interest in Carnegie Steel to J. P. Morgan, a move which allowed Morgan to create U.S. Steel. Frick would become its director. Art Collector In 1905, Frick retired to New York City, with a large collection of art works which he had begun collecting after earning his first wealth. Frick's purchases today form the core of The Frick Collection, sixteen galleries of masterpieces by Western artists including Vermeer, Rembrandt, El Greco, Titian, and Bellini, housed in his formermansion at 79th and Fifth Avenue. Departure Henry Clay Frick died on December 2, 1919, at the age of seventy. That evening, Emma Goldman and Alexander Berkman were attending a farewell banquet in Chicago, their last whirlwind tour before being expelled from the country. At dinner, a young reporter approached Berkman with news of Frick's death and asked him what he had to say about the man. Thinking about his own impending departure from the U.S., Berkman dryly replied that Frick had been "deported by God. I'm glad he left the country before me." 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