Carnegie

by Peter Krass

  On the streets of New York, it seemed as though anarchy reigned, too, as the horsecar drivers and conductors who worked on the Dry Dock Line along Grand Street went on strike, demanding their workday be reduced from sixteen hours to twelve. On March 4, riots erupted when 750 policemen attempted to protect scabs. The next day over 16,000 drivers, conductors, and stable hands refused to work. Carnegie, faced with a paralyzed city, realized there was a disturbing pattern developing in labor disputes—namely, they were becoming incessant. There were an astonishing 22,336 strikes from 1881 to 1886.19

  When he started his career in iron manufacturing, there had been mutual respect and goodwill between capital and labor, an unspoken agreement that wages would fluctuate depending on market conditions; there had even been picnics that included union officials. Carnegie and the large immigrant population working in his mills shared simple values and traditions brought from their native lands, which created a bond, however tenuous, between capital and labor. But labor disputes had become more violent and lengthy in the 1880s. Carnegie, who wanted to be loved by all, didn’t enjoy being the target of the workingmen’s ire. It was time to speak out on labor conditions in the United States.

  Impulsively reacting to his own and the country’s labor troubles, Carnegie wrote two essays on labor relations in 1886, published in the April and August issues of Forum magazine, that spurred debate in editorial pages across the country and had serious short-term and long-term repercussions. In these essays, he sought to position himself as the progressive employer, the liberal, even the radical, who would lead the way to industrial harmony. The first humdinger, “An Employer’s View of the Labor Question,” opened in grand fashion: “The struggle in which labor has been engaged during the past three hundred years, first against authority and then against capital, has been a triumphal march.”20 He then traced victory after victory for the laboring classes in their rise from slavery and serfdom. “Now the poorest laborer in America or in England,” he wrote, “or indeed throughout the civilized world, who can handle a pick or a shovel, stands upon equal terms with the purchaser of his labor. He sells or withholds it as may seem best to him. He negotiates, and thus rises to the dignity of an independent contractor.” The terms were hardly equal, however; more often than not in the 1880s Carnegie and his fellow capitalists had their way, slashing wages and suppressing the unions. So even as he declared the workingman was rising in dignity and equality, in urban-industrialized America it was the opposite, especially as more foreign workers were flooding the labor market.

  Carnegie next addressed strikes and lockouts, which he deemed to be ridiculous affairs. “Whether a failure or a success, it [a strike or a lockout] gives no direct proof of its justice or injustice. In this it resembles war between two nations. It is simply a question of strength and endurance between the contestants.” What Carnegie refused to acknowledge was that the massive dismissals during the Edgar Thomson shutdown in December 1884 were akin to a lockout as he tried to expel the union. It was simply a matter of semantics, layoffs versus lockout, but semantics worked just fine for Carnegie as he intellectualized what he did and why, and in the process imagined himself above ridiculous affairs. Sadly, he was unaware of not only his twisted logic, but his naiveté concerning the workingmen’s conditions.

  At least he realized the relationship between capital and labor had to change. In his essay, he called for arbitration as the best option for settling disputes, a solution highly touted by the press. “I would lay it down as a maxim that there is no excuse for a strike or a lockout until arbitration of differences has been offered by one party and refused by the other,” he wrote. While he recognized arbitration didn’t solve everything, he concluded, “I consider that of all the agencies immediately available to prevent wasteful and embittering contests between capital and labor, arbitration is the most powerful and most beneficial.”

  Carnegie then fired off a salvo from the big cannon: “The right of the working-men to combine and to form trades-unions is no less sacred than the right of the manufacturer to enter into associations and conferences with his fellows, and it must sooner or later be conceded.” This proclamation was a thorny zinger. Because of it, the Pittsburgh Dispatch noted that Carnegie’s essay would be greeted most unfavorably by capitalists, and for certain the hair rose on the backs of rabid antiunion men like Daniel Morrell at Cambria, who wanted to hear nothing of the rights of men to form unions. (When the Knights of Labor organized a local assembly in 1886 and recruited members from Cambria, the company’s management obtained a membership list and fired every worker on it. More than two hundred lost their jobs.)21 Carnegie’s peers must have scratched their heads as they attempted to reconcile his words with his actions, for hadn’t Captain Jones and Carnegie himself forced the Amalgamated from the Edgar Thomson mill in early 1885 by forcing each returning worker to sign an individual contract with the company and renounce the Amalgamated? Did he have a different definition for “trades-unions” that again allowed him to play a game of semantics with himself? Perhaps he just didn’t want to accept powerful national organizations like the Amalgamated, desiring instead only small committees who represented his furnace men or his rollers. Perhaps, to keep Jones on the payroll, he had to expel the Amalgamated.

  He then blamed much of the labor conflict on “salaried officers, who cannot possibly have any permanent interest in the welfare of the working-men. . . . It is the chairman, situated hundreds of miles away from his men, who only pays a flying visit to the works and perhaps finds time to walk through the mill or mine once or twice a year, that is chiefly responsible for the disputes which break out at intervals.” Was Carnegie so delusional as to not realize he was becoming that chairman? It was not his title, but he certainly was chairman in spirit. Beginning in the 1880s, he was spending almost half of the year in Europe, and much of the other time he was either in New York or Cresson. His physical presence at the mills was fleeting, and while it was not an issue for now, with the very competent Tom Carnegie and Harry Phipps in Pittsburgh, what if the situation was to change?

  Carnegie concluded the essay with his blueprint for greater harmony between capital and labor, his first tenet being “that compensation be paid the men based upon a sliding scale in proportion to the price received for product.” In strong markets, the men would be paid more; in weak times, vice versa. Surely he had shared his prosperity with the men when in January 1886 he granted a 10 percent wage increase at Edgar Thomson. However, the average price of rails would increase 21 percent and Carnegie profits 145 percent for the year—so?22 He also advised this: “A proper organization of the men of every works to be made, by which the natural leaders, the best men, will eventually come to the front and confer freely with the employers.” And he reiterated using arbitration to settle conflicts. However honest and visionary Carnegie believed himself to be in this essay, any perceptive reviewer of his writing (like Triumphant Democracy) knew that much of what he said was self-serving and could not be taken as gospel.

  The essay did not cure the nation’s labor woes. The month Carnegie’s essay appeared there was a massive railroad strike initiated by the Knights of Labor, who demanded higher wages for unskilled workers, particularly on lines controlled by Jay Gould, and some 9,000 men went on strike. The strike ended in early May with Gould victorious, but on May 1 organized labor launched a movement for an eight-hour day with an estimated 340,000 plus participating in national rallies and some 190,000 going on strike. In Chicago, the tension was particularly high because of an ongoing strike at the McCormick Reaper Company. The company had brought in nonunion workers and on May 3 the strikers battled with police, resulting in one death and accusations of police brutality. A protest was organized for the next day in Haymarket Square; it was a dull affair until the police moved in to break up the crowd and an anarchist threw a bomb into their ranks. Rioting ensued, and seven policemen and eleven protesters were killed. The bomb thrower was never apprehended, but eight anarchists were
arrested, seven of whom were sentenced to death and one to life in prison. Four were hanged and one committed suicide, but in 1893 the Illinois governor, in a measure of justice, pardoned the three survivors.

  Shocked by the violence and concerned conservative forces might overreact, in August Carnegie rushed into publication the second essay, entitled “Results of the Labor Struggle.” There was indeed an overzealous outcry against the ignorant workingman as the conservative quarter declared suffrage should be restricted to the educated and the masses must be better policed. Carnegie pooh-poohed the alarmists in his article, pointing out that the omnipresent press and the electric telegraph created unnecessary hysteria. For once quite realistic, Carnegie realized the tension would not cease overnight, nor did he blame the unions, the laborers, and their leaders for the trouble, nor did he think anyone should expect the leaders to be offered up as martyrs, stating that “the safety of its leaders is the key of labor’s position. To surrender that is to surrender everything.” Carnegie even complimented William Weihe, president of the Amalgamated, for his moderate position—although he did spell the name Wihle, a mistake open to interpretation.

  Although professing sympathy to the labor movement, he didn’t agree with all of their demands such as the eight-hour day, which he didn’t believe to be a possibility for firms that were marginally profitable. Instead, he suggested a series of half-hour reductions, and then an evaluation of each change. Because an eight-hour day meant less money and more intense work, for many of the laborers the eight-hour day was not a primary issue. When the men did work only eight hours, the superintendents like Captain Jones felt justified to push them harder for higher production. Reflecting on the switch to an eight-hour day, one steelworker testified, “Previous to that time we did not work so hard.” During a twelve-hour day the men took breaks to eat and rest, but now “we stop only the time it takes to oil the engines . . . working more steady and harder right along to produce this tonnage.”23 Many of the laborers were now unskilled immigrants from eastern Europe who preferred taking home more money from a twelve-hour day to send it to their families still living in their native countries. Carnegie understood how important wages were to a man, and for this reason, even in the face of the Haymarket riot, he didn’t wholly condemn the workingman who took to violence: “To expect that one dependent upon his daily wage for the necessaries of life will stand by peaceably and see a new man employed in his stead, is to expect too much.”

  Carnegie then gave labor its greatest weapon when he trumpeted: “There is an unwritten law among the best workmen: ‘Thou shalt not take thy neighbor’s job.’” This was a statement of biblical proportions, resounding through newspapers across the country, as Carnegie came down from Mount Sinai to deliver the Ten Commandments. There was no mention of coveting thy neighbor’s wife, manservant, ox, or ass—it was the job that was sacred. No strikebreakers should ever be used or tolerated. But the use of strikebreakers was becoming a more potent weapon of capital, and his peers were astounded Carnegie took a position against it. While capital cringed, labor applauded. The Brotherhood of Locomotive Engineers made Carnegie an honorary member. Feeling honored, he wrote the secretary of the Brotherhood, W. R. Thompson: “As you know, I am a strong believer in the advantages of Trade Unions, and organizations of work men generally, believing they are the best educative instruments within reach.”24

  There was no doubt the essays were Carnegie’s reactions to events in his mills and in the country at large, but there was also another factor at work: he was vain enough to want admiration from all, so, just as he detested the criticism he faced when operating his British newspaper syndicate, he did not want to be the object of labor’s ire. He wanted to be the sympathetic, progressive capitalist. But were these sweeping treatises on labor standards he could live up to, or merely self-serving sermons to temporarily assuage his fears that he was not the radical his ancestors were?

  All the noble discourse on the labor struggle begged the question: What were the conditions of labor? Had conditions in Pittsburgh evolved for the better in the two decades since Carnegie first became involved in the iron industry? No. The city had a reputation of being “Hell with the lid taken off.” As one wage earner observed wryly, he and his comrades were “working aside of hell.” It was certainly as hot as hell in Carnegie’s steel mills, where water hissed when spilled on floors that slowly burned through the men’s wooden-sole shoes. On one occasion, Jones reported it was so hot that “some of the boys stood by their ports till they fairly staggered with weakness.”25 The heat was the least of their worries.

  The accidental death rates were much higher at the steel mills than they were at the iron mills, as a potpourri of hazards awaited both the wizened and green worker. Furnaces exploded, molds exploded, and, once natural gas was introduced as a fuel in the 1880s, gas lines and leaks exploded. Chains supporting massive ladles broke and spilled molten death over men caught underneath. Sometimes the men tripped under the strain of their work and fell into molten steel, casting their own mold. Those who only suffered broken legs from falling billets or lost eyes from flying metal ripping through their sockets were the lucky ones. The introduction of faster-moving equipment and machinery contributed to the increase in accidents. Fatal accidents in the steel industry accounted for 20 percent of the total adult male mortality in Pittsburgh; among “ignorant” southern and eastern European immigrants the rate shot to 40 percent.26 Pittsburgh had one of the highest accident rates of all U.S. cities, and the National Labor Tribune asserted there were as many unreported deaths and injuries as there were reported. Sadly, the newspaper observed the list of killed and wounded in a given year was as long as that from a small battle in the Civil War. These laborers were indeed the frontline troops thrown into battle, pushed into a hail of bullets like those at Pickett’s Charge. Families were not compensated for the deaths, and old age was forty in Carnegie’s mills.

  To Carnegie, these men served a function, just as his friends and family did, and these were the natural conditions in the United States. There was no doubt in his conscience that everyday life should or could be better for the laborers (beyond seeking harmony with their employers, of course). Because Carnegie and the other mill owners would do little in the way of promoting safety, the men knew they had to take measures to protect themselves. To deal with the dangers, the men took a fatalistic approach: your time came when it came, and accidents were downplayed to be mere trifles. Newspapers provided graphic descriptions of accidents, which helped to desensitize the men and their families to the hazards. “He was thrown into the pit of the driving wheel,” reported the National Labor Tribune on one occasion, in describing how an assistant engineer died, “the lower part of which cut through his body tearing away the flesh so that his entrails protruded.”27 To make the deaths more acceptable, the newspapers glorified the men as though they were heroes lost in war, always describing their rare courage as they died bravely. But no death was heroic; the men were reduced to mules. And these conditions were not exclusively Pittsburgh’s; the story repeated itself in Johnstown, Steelton, and Chicago, where men died with equal opportunity.

  The movement of wages, while keeping an eye on profits, was an excellent gauge for determining living conditions, one that Carnegie, a stickler for facts, used time and again, albeit for a different reason. After he granted the 10 percent wage increase in January 1886, his unskilled steel mill workers earned $300 to $350 annually, a skilled worker maybe over $600 if lucky.28 The men deserved more, much more. Steel production tonnage using the Bessemer process was increasing dramatically across the country and realized a gain of almost 50 percent that year. The price of steel rails, the barometer of the market, was rising, too, up 21 percent in 1886, and accordingly, Carnegie witnessed profits more than double to $2,925,350.08.29 Now were the workers on equal standing as he claimed?

  Consider that to support a typical six-member family unit (children and grandparents included) and stay debt free in 1886, a
man had to earn $600; but many of the eighteen hundred men at Edgar Thomson were making less than $400. An investigation by the Senate Committee on Labor and Education several years earlier had confirmed that the average workingman couldn’t afford a “decent maintenance” for their families.30 Supposing an additional $200 was given to every laborer, bringing everyone close to or above the $600 mark, it would have cost Carnegie $360,000, or just 12 percent of his $2.9 million in profits. (Meanwhile, Carnegie committed over $350,000 to library and hospital donations in the early 1880s.) Life could have been immeasurably better for these oppressed mules, but that wasn’t reality in the steel industry. Pennsylvania Steel in Steelton, like Carnegie and Cambria, exerted the same relentless control over its workers, attacked any form of labor protest, and suppressed wages.

  Welfare capitalism was not in Carnegie’s vocabulary; he only helped those who helped themselves. To his credit, Carnegie did take some interest in the daily lives of his men when several unnecessary hardships were brought to his attention. Because the men were paid only once a month, by the end of a pay period they were forced to buy goods on credit, adding an unnecessary interest expense. Also, the local shopkeepers charged a premium for necessities like coal. To relieve these problems, Carnegie agreed to pay the men every two weeks, and a cooperative store was opened in Braddock, through which the company sold coal at cost. To encourage thrift and prudence, the company served as a bank by taking up to $2,000 of each worker’s savings and paying 6 percent interest. Workers could then borrow money from the resulting fund to build their own home.