Carnegie

by Peter Krass

  Intoxicated by the Republic’s vast resources and industrial power, Andy measured America’s success in terms of prosperity and material progress, and that was how he learned to measure his own success. Another insight offered by the cousins’ debate: Andy sought historical and economic information not to better himself in a moral or spiritual sense, but to beat Dod in competition. The other endeavors for self-improvement—learning double-entry bookkeeping, using Colonel Anderson’s library, joining a debate society—were all means to achieve similar goals: material gain, winning a competition, or simply dominating other people.

  The Crimean War provided Dod with a weapon for a counterattack. Czarist Russia was seeking to expand its power in the Balkans and, in 1853, Russian forces occupied Turkish dependencies that were part of the Ottoman Empire. Dod questioned why Andy’s freedom-loving United States was not speaking out for the rights of an unjustly occupied nation—Turkey. The ongoing debates had become very personal to Andy, and he ruthlessly assaulted both the message and the messenger. He took the generally accepted American viewpoint that Britain, which came to Turkey’s defense, was only concerned for its economic interests, not Turkey’s. After the stinging rebuke, Andy answered why the United States should not become involved: “I want to give you the American doctrine in regard to our interference in European affairs, which is, in the language of Washington, ‘Friendship with all, entangling alliances with none.’”15 Unfortunately, Andy was quoting a misquote; the words were spoken by Thomas Jefferson at his first inaugural speech. But it was a mistake he could forgive; it was the message that counted. The phrase “Friendship with all, entangling alliances with none” would reappear almost fifty years later as his primary business dictum, a testament to how tenaciously he clung to ideas he was exposed to in his youth and how intertwined his personality was with the United States. What was good for the country was good for him, and vice versa.

  As their dueling correspondence continued unabated over the next several years, each chiseling at the other’s ideology, Dod found another weak chink in his cousin’s armor: slavery. “The burden of your letter as usual is upon the slavery question. ‘Still harping on my Daughter’ as Polonius says,” Andy replied to one attack, and then attempted to place the blame on Britain for introducing slavery to the colonies. It sickened Andy to think of “one man trafficking in flesh of another,” of “women & children lashed like cattle.”16 But there was little else Andy could use in defense except to say he was, like Greeley, an “ultra abolitionist.”17 He concluded so nobly with “I hope I shall never be found upholding palliating oppression in any shape or form”; yet, once he was a capitalist, a capricious Andy would oppress his workers in a variety of forms.

  Dod also attacked the Maine Liquor Laws and the prohibition of the manufacture and sale of liquor in certain states. How, he wondered, could this happen in the land of the free? Andy retorted, “There is no liberty in serving the Devil.” His diatribe on abstinence went on for pages, and he beseeched Dod to never indulge in liquor. While there was a moral tone to the letter, Andy’s support for the Maine Liquor Laws focused on economics— in particular, Maine’s decreased pauperism, which took a burden off the state and its residents.18 For Andy, his arguments always returned to the material progress and growth of the nation, not the inner spiritual development of the individual. Yet again his sentiments echoed Greeley, who believed liquor contributed to pauperism and who wrote that the prohibition measure was “a necessary result of the progress of the age.”19

  By age eighteen, Andy had a strong, although jaded, grasp of the country’s complex political and economic machinations; the young man felt the substance of the United States, and it made him substantial.

  Work for the railroad also strengthened Andy’s sense of being, righteous character, and destiny. Even mishaps contributed to his confidence. A particularly memorable one occurred after the Pennsylvania Railroad breached the Allegheny Mountains, directly connecting Pittsburgh with the eastern seaboard. As of February 15, 1854, the Philadelphia-Pittsburgh journey could be made in fifteen hours or less, prompting the Pittsburgh Gazette to crow that such speed “ought to satisfy the fastest of this fast generation.”20 It was now a smaller Pennsylvania and a smaller country. With the line complete, one of the mundane tasks Scott gave to Andy was to fetch the monthly payroll and checks from Altoona, the railroad’s operational headquarters in Pennsylvania; but even the mundane could turn adventurous. Andy always enjoyed the overnight adventure, which gave him a chance to meet powerful men within the railroad—that is, until one return trip took a dreadful turn.

  Just as he had many times before, Andy tucked the payroll package with checks into his waistcoat and climbed onto the locomotive. The roar of the engine, the flying cinders and sparks, and the rough track distracted him, until he reflexively felt for the package and was horrified to find it missing. “There was no use in disguising the fact that such a failure would ruin me. To have been sent for the pay-rolls and checks and to lose the package, which I should have ‘grasped as my honor,’ was a dreadful showing. I called the engineer and told him it must have been shaken out within the last few miles. Would he reverse his engine and run back for it? Kind soul, he did so.”21 The engineer surely wanted his check, too. As the train moved slowly backward, a fretful Andy watched for the package and soon spotted it a few feet from standing water. Still, with the engineer and conductor as witnesses to his neglect, he feared there would be reprisals; but not wanting to ruin the boy, they promised to keep it a secret. Based on the experience, Andy decided to never be too hard on a young man who made a mistake or two; and he also realized fate had blessed him. That day the lost payroll package “seemed to be calling: ‘All right, my boy! the good gods were with you, but don’t do it again!’”22 More than ever, he was certain he had a destiny to fulfill.

  Under Tom Scott, Andy asserted himself with the same audacity he had displayed at the telegraph office when he took the death message. One morning, he arrived at the depot to discover a serious accident had tied up traffic along the entire line, not an uncommon event considering there were almost 150 train wrecks in 1853 alone. At the moment, an eastbound passenger train was crawling along with a flagman scouting each curve, the westbound passenger train was delayed, and the freight trains had sat on the sidings all night, afraid to move. Only carefully orchestrated orders from Scott could get the trains rolling again, but he was nowhere to be found. Andy mulled over the situation. He had given similar orders many times before at Scott’s direction, but never on his own, and if he alone did attempt to unravel the snarl and failed, it could result in his dismissal or worse—the death of others. After a brief hesitation, the eminently confident lad hunkered down at the telegraph and tapped out orders for the various trains, signing each with his boss’s initials. When Scott finally arrived at the office, he tentatively explained his actions, justifying each. Days later, the depot’s freight agent told Andy what Scott said to him after the incident:

  “Do you know what that little white-haired Scotch devil of mine did?”

  “No.”

  “I’m blamed if he didn’t run every train on the division in my name without the slightest authority.”

  “And did he do it all right?”

  “Oh, yes, all right.”23

  Andy continued to adhere to his modus operandi, which was to make opportunities by drawing attention to himself, and the story of the Scotch Devil quickly made its way through the ranks to Scott’s immediate superior, Herman Lombaert, and to the railroad’s president, J. Edgar Thomson.

  A brilliant understudy, Andy had proven his worth. Subsequently, Scott gave him more responsibilities, such as routing the trains, as well as an unsolicited raise to $40 a month. Moreover, when Scott was away for two weeks, Andy was put in charge of the division. But his first stint as a manager ended in failure. At the time, if there was a crash due to negligence or a trainman was caught drinking, among other infractions, reprisals were always swift and har
sh, with the railroad holding what they termed a court-martial for alleged offenders. When, under Andy’s watch, an accident occurred due to the negligence of a ballast train crew, he was faced with having to dole out punishment or waiting until Scott’s return. Determined to make his mark, he held a court-martial and summarily dismissed the chief offender and suspended two others. To the older, contemptuous railroad men, he appeared as a young, baby-faced Napoléon striding before the court, too eager to wield authority. Even Scott suspected Andy had behaved impetuously, but didn’t want to erode the young man’s authority, so the decision remained. Had Andy already forgotten his pledge the day he lost the payroll—to forgive a mistake or two— or did the older men deserve their punishments? For certain, he suffered himself, but never other fools.

  When the esteemed President Thomson paid a visit to the Pittsburgh depot, he made time to meet the audacious clerk, whom he greeted as “Scott’s Andy.” Lombaert also began calling him Scott’s Andy. The moniker, a respectable step above Martin’s Pet from the Dunfermline days, didn’t bother him; Scott was the perfectly paternal boss and he was proud to be attached to him. “Mr. Scott was one of the most delightful superiors that anybody could have,” Andy said, “and I soon became warmly attached to him. He was my great man and all the hero worship that is inherent in youth I showered upon him.”24 Like Snuffy Martin and Uncle Lauder, Scott joined the ranks of surrogate fathers and heroes. He was surrogate because Andy’s own father was a failure, but the younger man’s relationship with Scott would become more complicated than that of a father and son, especially after the death of Will Carnegie.

  Will had filed for U.S. citizenship in November 1854, but never had the chance to take the oath. On October 2, 1855, his long slide finally came to an end.25 As Andy had written insightfully to his Uncle Lauder several years before, his father had not changed and was never going to adapt to the American way and the new economy. He had become a burden to the family, and a long illness leading up to his death put a financial strain on them. In his autobiography, the usually ornate writer offered a spartan eulogy: “Fortunately for the three remaining members life’s duties were pressing. Sorrow and duty contended and we had to work.”26 To the family, Will had died long ago; his physical death was a mere formality.

  Notes

  1. T. B. A. David to AC, May 20, 1903, ACLOC, vol. 96.

  2. See AC to George Lauder Sr., March 14, 1853, ACLOC, vol. 1. Carnegie states that “we all thought that the situation held out better prospects for the future. . . .” It was not his decision alone.

  3. Carnegie, Autobiography, p. 61.

  4. T. K. Collins and P. G. Collins, Guide to the Pennsylvania Railroad (Philadelphia: n.p., 1855). Parts of the depot were still under construction when Carnegie joined the company.

  5. Carnegie, Autobiography, pp. 62–63.

  6. AC to George Lauder Sr., March 14, 1853, ACLOC, vol. 1.

  7. Carnegie speech at Grangemouth, Scotland, September 1887, quoted in Hendrick, Carnegie, vol. 1, p. 67.

  8. Pittsburgh Dispatch letters to the editor quoted in Hendrick, Carnegie, vol. 1, pp. 68–70.

  9. AC to George Lauder Sr., March 14, 1853, ACLOC, vol. 1.

  10. AC to George Lauder Jr., June 1, 1853, ACWPHS, ser. 1, subser. 2.

  11. George Bancroft, History of the United States (Boston: C. C. Little and J. Brown, 1838), pp. 1–3.

  12. AC to George Lauder Jr., March 14, 1853, ACLOC, vol. 1; AC to George Lauder Jr., August 18, 1853, ACLOC, vol. 1.

  13. New York Daily Tribune, May 9, 1853.

  14. AC to George Lauder Jr., August 18, 1853, ACLOC, vol. 1.

  15. AC to George Lauder Jr., February 8, 1854, ACWPHS, ser. 1, subser. 2.

  16. AC to George Lauder Jr., February 24, 1855, ACWPHS, ser. 1, subser. 2.

  17. AC to George Lauder Jr., November 12, 1855, quoted in Wall, Carnegie, p. 100.

  18. AC to George Lauder Jr., May 1857, ACWPHS, ser. 1, subser. 2.

  19. Jeter A. Isely, Horace Greeley and the Republican Party, 1853–1861: A Study of the New York Tribune (Princeton, N.J.: Princeton University Press, 1947), p. 81.

  20. Lorant, p. 121.

  21. Carnegie, Autobiography, p. 64.

  22. Ibid., p. 65.

  23. Ibid., pp. 67–69.

  24. Ibid., p. 67.

  25. See William Carnegie’s application for citizenship, ACLOC, vol. 1.

  26. Carnegie, Autobiography, p. 74.

  CHAPTER 5

  Tree of Knowledge

  Under the tutelage of Tom Scott, a powerful man in a company that would soon be the largest in America, Andy learned the management skills, the financial dealings, and the political maneuvers to build an empire. To understand the relationship that developed between Scott and Andy was to understand the relationship between Scott and his boss, J. Edgar Thomson. A surveyor by training, Thomson, who was born in 1808, worked through the ranks of Pennsylvania’s state-owned railroad in the 1820s and then of the Georgia Railroad, where he was made chief engineer. When he joined the Pennsylvania Railroad in 1847, he was an imposing figure. At five-foot-nine and with a tendency toward portliness, always dressed in a dark suit with a waistcoat, with a thick gold watch chain draped from his pocket, he had the reserved manner of a clergyman as opposed to a railroad pioneer. Muttonchop whiskers that went to the collar framed his serious face. Dark eyebrows protruded above gray eyes, which had heavy bags below, and thinning black hair was combed across his scalp. Years on the road, along with twelve-hour workdays, made relationships with women all but impossible, so, not married until age forty-six, Thomson took a paternalistic approach to his railroad; he even bequeathed the bulk of his estate to a fund that was then distributed to female orphans of railway men. Filling the family void included surrounding himself with a bright young management team and forging a father-son relationship with Scott, who was fifteen years his junior.

  Scott’s street smarts, work ethic, and charm brought him to Thomson’s attention, and the president quickly recognized a kindred spirit—both rarely took vacations, could juggle numerous complex projects, and had an eye for speculation. He took Scott, whose father died in 1835, under his wing and was soon teaching him to make savvy investments. While at the Georgia Railroad, Thomson first learned to speculate in advance of the railroad and made tremendous profits. Knowing where the Georgia and other railroads were building, he bought into local real estate and commodities and also invested in companies that would thrive from railroad construction. It was a technique he taught Scott, who would in turn teach Andy. By the mid-1850s, Thomson and Scott were investing in advance of the Pennsylvania Railroad, taking stakes in coal, lumber, freight, and telegraph companies, as well as real estate. When a coal company approached them in need of a rail line to access a newly discovered deposit, they bought into the company. When they found out where another railroad was planning to bridge a river, they bought the land on the river’s banks. And so on. This insider investment technique was 100 percent guaranteed, and there were no laws preventing it.

  When Scott encountered Andy, he, too, found a kindred spirit in the brash, hardworking boy; he found a surrogate son for himself and cultivated their relationship just as Thomson had with him. Only Scott was a more dangerous speculator than Thomson; he was unafraid to push into a gray zone of what was potentially criminal. To a degree, he was Dickens’s Fagin, while Andy played Oliver. Having lived through the Hungry Forties, the boy was an easy target, especially considering he was so quick to lionize.

  After two and a half years with Scott, in May 1856, Andy was invited in on his first investment deal—the opportunity to buy $500 worth of stock in a package delivery company that relied on the Pennsylvania Railroad. A $110 premium was also required. Thrilled to be included, Andy regrettably had to admit he didn’t have much savings. Scott immediately offered to loan him the money, and on May 17, 1856, Andy wrote an IOU for $610, payable in six months.1 Now the proud owner of ten shares of Adams Express stock, Andy was a capitalist at l
ast—a leveraged capitalist, anyway. When the six-month date rapidly approached, Andy didn’t have close to the $610 and was forced to borrow $400 at 8 percent interest per annum from a George Smith, the stock certificates handed over as collateral.2 Shortly thereafter he borrowed another $100 from Smith to invest in the Insurance Company–Monongahela Company of Pittsburgh. Good dividends were expected, but the 8 percent interest paid to Smith ate into the family’s income, so Andy and his mother decided to mortgage their house, which had been paid off, at a lower rate than Smith offered and then pay him.3

  It was a series of crude transactions, but it worked. More significant, Andy was demonstrating a willingness to assume great risk—in this instance, the loss of their house—and the first inkling of complicated transactions to follow. In fact, he would make his early fortune in stocks and bonds, and that nest egg would finance his triumphant rise in the steel industry. Any current anxiety over taking risks was dispelled when the dividend checks started arriving. “It gave me the first penny of revenue from capital—something that I had not worked for with the sweat of my brow,” he recalled. “‘Eureka!’ I cried. ‘Here’s the goose that lays the golden eggs.’”4