Carnegie

by Peter Krass

  In a revised version of Triumphant Democracy that appeared in the spring of 1893, Carnegie added a new chapter promoting the reunion scheme. In April, he divulged his desire to Morley to restore “the Union between the Old and New Lands” that would make “Britain permanently prosperous” without the nuisance of debilitating tariffs.25 “A Look Ahead” also appeared as a stand-alone essay in the June issue of the North American Review. Carnegie opened his argument by stating he believed the separation of the United States and Britain was unnecessary and injurious, and that today Britain regretted forcing the Revolutionary War on America. As for the Yankee rebels, Carnegie was certain George Washington and other delegates to the First Continental Congress had not desired separation. Against this backdrop, Carnegie considered a reunion desirable to many, and, although highly utopian, he believed one day it would be a reality.

  The first logical step was the union with Canada, so Carnegie, along with others, now took concrete steps toward that goal by forming the National Continental Union League and circulating petitions. Notable figures signed in support, including Chauncey Depew, Elihu Root, John Jacob Astor, Theodore Roosevelt, Collis Huntington, and Charles Tiffany. On the British side of the Atlantic, enthusiasm was lacking, to say the least. In an attempt to win support from powerful editors who held sway over public opinion, Carnegie wrote his friend William Stead, the brilliant and influential editor of Pall Mall. “The destiny of the Old Country seems to me very plain,” he argued. “You will be the family seat of the race. Your manufacturers will go, one after the other, but you will become more and more populous as the garden and pleasure ground of the race, which will always regard Great Britain as its ancestral home.”26 According to Carnegie, Britain would have to dedicate all its resources to become one large farm to feed its people; or the United States, with its infinite resources, could come to Britain’s rescue by the countries jointly creating a magnificent Anglo-Saxon Commonwealth.

  As Carnegie’s vision evolved, he determined that the capital of this consolidation would be Washington, D.C., and that the U.S. Constitution would be the empire’s guiding light. It also became apparent that this grand illusion was a means of fulfilling his youthful desires to destroy the monarchy. Of course, there was no way Britain would accept Washington, D.C., as the capital of the union, among just a few other reasonable objections to a reunion. One had to wonder if Carnegie was so very naive to political complexities. The argument for years has been yes. But the answer is no. He was well aware of just how complex relations were between countries; he just had no tolerance for those complexities. As with business, when he was dreaming, formulating a strategy, and then campaigning, he refused to be caught up in the minutiae, to recognize the many obstacles to success.

  Stead was unconvinced, of course; he was adamant the two countries could never be united. More hurtful to Carnegie, who was wide open to criticism after Homestead, were the personal attacks in the press. American detractors began to question his loyalty, while the Democratic nominee for governor of Ohio, Lawrence T. Neal, accused Carnegie of not being a U.S. citizen. Carnegie responded by sending a letter to the New York Daily Tribune refuting the charge, and he sent a copy of his naturalization papers to Neal directly.27

  Despite the criticism, Carnegie’s conviction did not waver; he was certain “the Brotherhood of Man, the Federation of the World” would be realized.28 And he did have some supporters on both sides of the Atlantic. The Westminster Review, for one, considered his essay “A Look Ahead” courageous and “a truly grand conception,” so perhaps Carnegie had not completely lost his grasp of reality. His master, Herbert Spencer, also encouraged the idea of union, which spurred Carnegie onward.29 The grand conception intoxicated Carnegie, made him feel euphoric, and it would remain a passion he would continue to pursue. From it would germinate his most ambitious endeavor— a campaign for world peace.

  But now the conflict over Venezuela dimmed Carnegie’s illusions. In the wake of President Cleveland’s bellicose rhetoric, it was turning out to be another depressing Christmas season at Fifty-first Street—not only due to the political situation, but because both Louise and her sister Stella were sick and under a doctor’s care. Even so, as he invariably did, Carnegie threw himself vigorously into the Venezuela dispute. On December 23, he cabled the London Times a brief letter in which he called for arbitration, the honorable course for settling disputes. Also, he immediately went to work on a lengthy essay, “The Venezuela Question,” which was published in the February North American Review. After reviewing the situation, Carnegie concluded, “There will be no war between the United States and Great Britain either upon the Venezuela question or upon any other, because the first has already planted itself upon the rock of arbitration, and the other is slowly but steadily moving toward its acceptance.”30

  At the same time, Carnegie did alert his British political friends that war was not out of the question. “The Monroe Doctrine is the ‘red rag’ to the American people,” he informed the duke of Devonshire the day after Christmas, “as ‘the right of asylum’ is to the British. Any President can rouse the people and carry all classes with him. Those of us who have done our best to allay the present excitement are not deluded upon this point.”31 There was little opposition to Cleveland, he warned, and hostility toward Britain would only build. Toward his friend Morley, Carnegie took a more biting tone in questioning why Morley had not come out in support of arbitration: “If Mr. Gladstone were only your age, we should have the Liberal Party back to power on the issue, Arbitration. If I were in your place, I should demand a day to discuss Lord Salisbury’s refusal to arbitrate; denounce it; offer a resolution that this house disapproves Lord Salisbury’s refusal to carry out the agreement to arbitrate made in 1885.”32

  The tension in the Carnegie house did little to help Louise’s health, so in February Carnegie took his wife to the Florida spa town of Palm Beach, which, along with Poland Springs, Newport, and White Sulphur Springs, was considered the most exclusive and catered to an elite crowd. By mid-month, Carnegie was able to write Frew, who was now president of the Carnegie Institute, which managed the Pittsburgh library and associated programs, that “Mrs. Carnegie’s much better. We are just off for a swim in the great bath, both taking lessons. Frog movement seems the ideal—the legs, not the arms, propel us.”33 They remained in Palm Beach until the last week of February and then traveled north to Dungeness, Lucy Carnegie’s winter home on Cumberland Island.

  Refreshed, the Carnegies returned to New York City, where he rejoined the Venezuela battle. A conference in Washington was organized with the aim of establishing an International Tribunal of Arbitration. Carnegie couldn’t attend, but he wanted his name prominently identified with the movement and therefore forwarded a check for $1,000 to ensure recognition.34 His pacifist friends would have been deeply disappointed to know that the day after replying he couldn’t make the arbitration conference, he wrote J. G. A. Leish-man: “I have considerable confidence that you can put the gun-forging department in splendid form by visiting Washington and conferring with Secretaries Herbert and Lamont. Naturally, both of these would like to have us go into the business, and you can probably arrange that bids shall be asked by both simultaneously, which will in the aggregate justify us undertaking the mat-ter.”35 Guns were not defensive like armor, but once again profits ruled over ideology—unless Carnegie reasoned the best defense was an offense, which was entirely possible.

  One man who easily pierced Carnegie’s self-serving hypocrisy and attempted to keep him honest was his friend, the British author William Black, who abhorred the steel master’s moralizing from his castle in the air during the Venezuela dispute: “I see you are still calling out for arbitration. Is there no sense of humour left on your side of the water? Of course everyone understands why the United States should clamour for arbitration on every possible point: it is because they alone among the nations of the world know how to manipulate it to their favour.” Black was alluding to a terri
torial fishing dispute between the United States and Canada that was arbitrated in Canada’s favor, only to have the U.S. Congress vote against paying the fine.

  The prior summer Black had also criticized Carnegie, a self-avowed radical, for cavorting with so many members of Britain’s privileged class, and he wrote Louise in hopes she could influence his wayward friend: “It has considerably grieved me of late to see that you and your husband have been frequenting the pernicious society of Princesses, Peers of the Realm, and people of that kind. I tremble to think of the destruction of your loyal republican principles; I hope you will withdraw from the brink of the fatal precipice while there is yet time.”36 While Carnegie railed against privilege, he was intoxicated when in its presence. As Mark Twain said, “He says he is a scorner of kings and emperors and dukes, whereas he is like the rest of the human race: a slight attention from one of these can make him drunk for a week.”37 However, Carnegie’s cavorting with lords paid dividends in the summer of 1896.

  First, the Carnegies embarked on a grand tour of Europe. Late May found Carnegie, Louise, and her sister, Stella, landing in Naples, Italy, and then continuing to Venice. There, they strolled across the Rialto Bridge, gazed in wonder at the thousand-year-old cathedral of St. Mark, toured the Palace of the Doges, and enjoyed romantic gondola rides through the canals intertwining the city’s 118 islands (although the water smelled a bit ripe). The only missing gem from their fortune was a child, and what more romantic place to conceive a baby than Venice. Now age thirty-nine, Louise had grown desperate, and watching Lucy’s children grow made it all the more difficult. The sixty-year-old Carnegie, who loved his extended family, would have spent a fortune to see his wife with child.

  After a week in Venice, the Carnegies traveled north to the Tirol, then an Austrian province dominated by the Alps. They stayed in the resort towns of Cortina and Innsbruck, and as Carnegie and Louise walked Innsbruck’s cobblestone streets lined with rose bushes and baroque facades, the ring of mountains beyond, they were breathless. There was the sixteenth-century Franciscan Hofkirche; the fifteenth-century Furstenburg, the castle with the famous copper-roofed balcony; the grand Hofburg, the imperial palace; and the fourteenth-century Stadtturm, the city’s tower, which could be climbed for a stunning view of the city.

  That summer at Cluny, the dominant topic of conversation was the continuing conflict over Venezuela—if still in dispute as the 1896 presidential race heated up, there was a concern that both parties would use it to demonstrate their bravado and inadvertently incite war—and Carnegie continued to actively lobby for arbitration, chatting up visiting British dignitaries, and writing letters to Morley and Gladstone. In providing America’s resolute sentiment, President Cleveland’s in particular, he was instrumental in convincing Britain to arbitrate. Although heavy-handed and prone to callous public outbursts—Carnegie never did recognize the strength of subtleness, whether in business or politics—the rapport he had established with Britain’s ruling class—much to Black’s chagrin—yielded positive results, as it would in future political conflicts.

  On the business front in 1895 and 1896, Carnegie would also seek to negotiate conflicts, but there would be no arbitrators as he jousted with two very formidable opponents: the Pennsylvania Railroad and John D. Rockefeller.

  Notes

  1. B. C. Forbes, Men Who Are Making America (New York: B. C. Forbes Publishing, 1917), p. 36.

  2. AC to William N. Frew, October 24, 1894, ACLOC, vol. 28.

  3. AC to William N. Frew, December 2, 1895, ACLOC, vol. 34.

  4. See AC to William N. Frew, March 12, 1895, ACLOC, vol. 31; AC to William N. Frew, September 19, 1895, and AC to Grover Cleveland, September 20, 1895, ACLOC, vol. 33.

  5. AC to William N. Frew, November 1, 1895, ACLOC, vol. 33; AC to William N. Frew, November 4, 1895, ACLOC, vol. 34.

  6. Simon Goodenough, The Greatest Good Fortune (Edinburgh: Macdonald Publishers, 1985), p. 48.

  7. Krause, p. 331.

  8. AC to Editor, Outlook (May 11, 1896), ACLOC, vol. 38.

  9. Goodenough, p. 62.

  10. William B. Shaw, “The Carnegie Libraries,” Review of Reviews (October 1895).

  11. Ibid.

  12. New York Daily Tribune, November 11, 1895.

  13. AC to Charles Schwab, January 23, 1896, ACLOC, vol. 36.

  14. Charles Schwab to AC, May 21, 1896, ACLOC, vol. 38.

  15. AC to W. W. Sage, February 3, 1896, ACLOC, vol. 36.

  16. AC to Ann MacGregor, November 19, 1895, ACLOC, vol. 34.

  17. AC to R. Anderson, November 19, 1895, ACLOC, vol. 34.

  18. See AC to J. Lindley Smith, December 27, 1895, ACLOC, vol. 35, and AC to J. H. Linville, December 1, 1896, ACLOC, vol. 39.

  19. AC to Ella J. Newton, November 26, 1895, ACLOC, vol. 34.

  20. Nevins, Hewitt, pp. 579–580.

  21. New York Daily Tribune, December 20, 1891.

  22. AC to John Patterson, January 13, 1892, ACLOC, vol. 14.

  23. Burrows and Wallace, p. 1116. For more details on ethnic neighborhoods during this period, see Burrows and Wallace, pp. 1111–1131, and Lloyd Morris, Incredible New York (New York: Random House, 1951), pp. 273–279.

  24. Burrows and Wallace, p. 1122.

  25. AC to John Morley, April 16, 1893, ACLOC, vol. 20.

  26. AC to William T. Stead, July 22, 1893, ACLOC, vol. 21; Hendrick, Carnegie, vol. 1, p. 420.

  27. AC to Lawrence T. Neal, October 19, 1893, quoted in New York Daily Tribune, October 20, 1893.

  28. AC to William T. Stead, August 11, 1893, ACLOC, vol. 21.

  29. See Herbert Spencer to AC, September 23, 1891, ACNYPL, in which Spencer wishes a Carnegie essay on race alliance was more widely distributed.

  30. Reported in New York Daily Tribune, December 25, 1895; Andrew Carnegie, “The Venezuela Question,” North American Review (February 1896).

  31. AC to the duke of Devonshire, December 26, 1895, ACLOC, vol. 35.

  32. AC to John Morley, January 27, 1896, ACLOC, vol. 36.

  33. AC to William N. Frew, February 16, 1896, ACLOC, vol. 36.

  34. AC to Carl Schurz, April 20, 1896, ACLOC, vol. 37.

  35. AC to J. G. A. Leishman, April 21, 1896, ACLOC, vol. 37.

  36. William Black to AC, February 6, 1896, ACLOC, vol. 36; William Black to Louise Carnegie, May 14, 1895, ACNYPL.

  37. Robert L. Heilbroner, “Epitaph for the Steel Master,” reprinted in Alex Groner and the Editors of American Heritage, The American Heritage History of American Business and Industry (New York: American Heritage, 1972).

  CHAPTER 24

  Illegal Rebates and a Fight with Rockefeller

  The captains of the railroads behaved like monarchs, and Carnegie had no tolerance for them. So, while the United States and Britain dickered over Venezuela, Carnegie found himself in heated battle with a supposed ally, the Pennsylvania Railroad. The prior winter, when Frick was threatening to resign, Carnegie had questioned the Pennsylvania Railroad’s freight rates, but the issue was never resolved. Now, even with the market depressed, the company was expanding, shipping more coke, iron ore, and steel, so freight rates took on greater importance. In no uncertain terms, Carnegie told Frick, they must have lower rates, “peaceably if we can, forcibly if we must; but competitive rates we shall have.”1 It was a battle between the state of Pennsylvania’s two colossi—with millions of dollars at stake.

  Carnegie opened his campaign in December 1895, in Cleveland, where he gave a speech to the city’s businessmen. He was blunt, proclaiming (with semiconviction) that Pittsburgh was no longer an advantageous location for business and delivered a veiled threat to abandon the smoky city for a Lake Erie location.2 Many of the industrialists in the audience were sympathetic— they were also fed up with discriminatory freight rates—but there were enemies, too. Wherever Carnegie went, he aroused the spectrum of emotions, including those of Cleveland’s most respected businessmen; two months after his speech, members of the Cleveland Chamber of Commerce denounce
d him as an oppressor of the poor and blackballed him from ever becoming an honorary member.3

  The next step in the escalation of Carnegie’s war with the Pennsylvania Railroad was to develop transportation alternatives. One possibility was to convince the state legislature to build a canal from the Ohio River to Lake Erie, because from Lake Erie Carnegie Steel could ship east and west, thus breaking the Pennsylvania Railroad’s stranglehold. Another option was to build an independent railroad to Lake Erie to access the cheap shipping; but this was considered a drastic measure initially, considering the 1885 debacle when Carnegie joined with Rockefeller and Vanderbilt to build a line east, only to be outsmarted by Morgan. Still, when the general counsel for the Pittsburgh, Monongahela & Wheeling Railroad, James H. Creery, suggested that constructing an independently owned line to the lake would prove to be more timely and advantageous than waiting for a canal with all its associated problems, Carnegie decided to explore the possibility.4 Fearing the Pennsylvania Railroad would crush them if angered, his partners balked at the idea, but Carnegie assured them he was acutely aware of the power the Pennsylvania wielded. As a precaution, he informed the railroad executives that if they disrupted Carnegie Steel in any manner, he would organize a massive protest.5