Trains, Steel and Cash Cash: The Andrew Carnegie Story

| | October 28, 2023

Money, as they say, makes the world go round. And in the case of Andrew Carnegie, that saying couldn’t be more true. If there is one name that is synonymous with philanthropy, industry and vast riches, that name would belong to Mr. Carnegie,

Born in Scotland in 1835, Andrew Carnegie’s heritage was nothing special. He was born to a family of weavers, who were at the time living in a small home. Living in a world after the industrial revolution was tough for the Carnegies, who struggled to survive the constantly changing economic climate of Scotland. By the time he was 13, it was clear to the Carnegie family that Scotland didn’t hold economic opportunity for them any longer and they made the decision to move to the American state of Pennsylvania, where Andrew would find his very first job, working as a bobbin boy.

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In 1848, Andrew Carnegie began working for a cotton mill in Allegheny City, Pennsylvania.  He began working as a bobbin boy, someone who’s responsibility was to carry bobbins back and forth from seamstresses and also to repair the machinery. It was the first real job he ever had and he made a whopping $1.20 for the first week of work. His heart, however, soared at the discovery that his direct labor had made him some money. He couldn’t be more proud of the money that had come in, because to him it signified that he had added value to the world. Indeed, this pivotal moment would shape the young Andrew Carnegie. It gave him a realization that there was unlimited possibility to be had when it came to earning money. The act of getting paid gave him a sense of direction and purpose and he would begin to excel at his job at the factory. Soon enough, he was working his way up in the company, moving from bobbin boy to engineering assistant.

READ MORE: Who Invented the Cotton Gin? Eli Whitney and Cotton Gin Impact on America

It was during his time at the factory that he was also presented with the opportunity to learn, for an older man had a vast library of books and opened up his library for the workers to use over the weekend, giving the young lad a chance to read and study. Indeed, while he might have grown up poor, his family had placed a great emphasis on education, as he idolized his uncle who was a very educated man, despite the overall poverty of the family. It was thanks to this older gentleman’s contributions that Andrew Carnegie was able to gain an advanced love and understanding of literature.

Andrew continued to move up in the world, eventually gaining the position of being a telegraph messenger in 1850. The job was double his weekly pay and was entirely unlike his work in the factory. While he had been an engineering assistant, he had spent his days and hours working in dark areas full of dirt and soot, but now he found himself working in a brightly lit office. The contrast was immense, but he immediately felt at home working there. He spent his time paying close attention to his actions and choices as he worked, for he knew that excellence was important to move upwards. He had a knack for the telegraph machines as well, for as the telegraphs would transmit messages, the messengers would have to use paper to decode what was being said. Yet, Andrew learned quickly how to decipher the messages by ear, instead of having to decode them, making his work go by much more quickly. In fact, it was believed that he was one of the few people on the planet who were actually able to decipher messages by ear.

This earned him a promotion, leading him to have the opportunity to work for the Pennsylvania Railroad, where he would land as the private secretary to Colonel Thomas Scott, the Divisional Superintendent of the railroad. Railroads were a big deal back then, because they brought the heart of industry to America. The art of transporting goods and people across the United States was a big business and in 1853, that business was booming. It wouldn’t be long before Andrew’s relationship with Colonel Scott began to pay off big time.

Scott had given Andrew Carnegie some investing advice, giving the boy an opportunity to put some money into some insider trading deals that would primarily benefit those who invested in such a scheme. Now, this might seem incredibly illegal and unethical, but it was a common practice at the time, as quid pro quo arrangements and sweetheart deals between railroads were commonplace. Insider trading wasn’t particularly illegal until 1934 and while it might be easy to look back on Andrew’s actions as being immoral, it was just part of the culture at the time. Railroads were bringing in big money and many people at the top were looking to get a piece of that pie.

Andrew’s fortune began to slowly build as he made investment after investment, under the direction of his good friend Thomas Scott. As Colonel Thomas climbed up the ladder of success, he would bring Andrew along with him, as a loyal friend and assistant. In 1861, the Civil War was underway and Colonel Thomas Scott would actually end up becoming the Assistant Secretary of War, whose job was to handle transportation and telegraph systems for the military. Scott would end up conferring the job of handling the Union’s railways to Andrew Carnegie, where he would use his management skills to assist the Union in securing victory against the South.

The Civil War had shown the usefulness of the railroad in a big way, proving that the industrial era was indeed here to stay. Andrew, having made the decision to invest in the very first sleeper car, had made quite a bit of money and had begun to invest it in various different ventures. One such venture was to invest in a company that was searching for oil on a plot of land. He put a portion of his money into that company, somewhere to the tune of 40,000 dollars and by 1865, they struck black gold and he made a pretty sum of $200,000. This gave him real spending capital when it came to funding his own ventures and pretty soon he made the decision to step away from the railroad industry and focus on a new and booming sector: Steel.

His endeavors would lead to the eventual formation of the Carnegie Steel Company, where he would tirelessly work to build industrial plants across the United States, creating jobs, industry and innovation in the field. Steel production was constantly being revolutionized under his supervision and his efforts to make the steel trade profitable paid off. He made a point to control all of the resources being utilized in the steel making process, meaning that he would be able to cut costs significantly in the process. Carnegie Steel would go on to become one of the biggest powerhouses in American Industry by 1889.

Eventually, over the years, Andrew Carnegie had amassed enough wealth and treasure to consider retirement. He was 66 when he began to ponder whether he should be retiring from his field or not. John Piers Morgan, (who would later found a banker) saw the intense value of owning Carnegie Steel for his own pursuits and made the decision to try and buy Andrew out. He saw that having several different steel companies out there would only lower quality of the product and decided that he would be better off if there were no competitors out there to drive the price and quality of products low. So, he saw fit to put together a conglomerate of Steel Workers.

Andrew Carnegie eventually did make the decision to sell off his part of the company, making the equivalent of 6.5 Billion dollars off of the sale. Carnegie Steel would go on to be known as United Steel, and Andrew Carnegie would go on to begin a very serious campaign of philanthropy and activism.

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Andrew Carnegie had seen the value of money from an early age, but more than anything, he saw the responsibility that the wealthy had to the world around them. He watched as many of the wealthy magnates used their vast wealth to live lives of extravagance and would take advantage of the worker, exploiting them for money. When young Andrew had experienced the charity of the older gentlemen who opened up his library for the boys to use, it shaped him profoundly, giving him the perspective that the wealthy should use their vast wealth to make the world a better place. Upon retirement, he found himself desiring to give away as much money as he could. Thus, began his campaign of philanthropy that would ultimately lead to him giving away nearly 350 million dollars of his own wealth, after all he was the world’s richest man.

Andrew Carnegie’s charitable heart manifested itself mostly through the establishment of libraries. His lifelong love of knowledge and education led him to firmly believe that it was necessary for those who were poor to be able to receive a decent education. His belief in education as a necessity stemmed from his experience as a child. Having spent most of his youth working, he spent time learning everything that he could, in order to become a better man. Had he not taken the time to learn classical literature and philosophy, he would not have had the thinking capacity to have earned his fortune. And so, he began his mission to plan as many libraries as he could across America. He planted and helped fund a total of 3,000 libraries in the course of the last few years of his life.

In 1889, he wrote an article called the Gospel of Wealth, a treatise that outlined his political philosophy towards money. It was received controversially due to the fact that his beliefs and viewpoints were relatively hostile towards the wealthy in society. Within the article, he criticized the rich for the extravagant lifestyles and made the case for high taxation. He outlined one of his greatest beliefs that “a man who dies rich, dies disgraced.” He also made a strong case for the death tax, as a way to discourage the wealthy from being able to leave their lives clinging to their wealth.

Ultimately, Andrew Carnegie’s life was one that created thousands of jobs, billions of dollars in wealth and industry and changed the world into a much better place. Indeed, one doesn’t need to look too far to see how he focused on using his vast riches for the betterment of society. Whether it was using his money to fund advancement of sciences and technology, building a library or even funding the creation of church organs, Andrew saw the greater purpose of life was to make the world a better place. He wasn’t a fool either, he didn’t believe that throwing money was a solution. He made a point to always make sure that his money went to those who helped themselves, focusing on helping those who were in motion, rather than targeting those who didn’t work, were drunkards or lazy.

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In 1919, Andrew Carnegie passed away, leaving behind the legacy of having given away a grand total of the modern equivalent of 76 billion dollars. By his standards, he left his life as a colossal success, having made the world a far better place than when he found it. Even today, we see the far-reaching effects of his influence, having contributed directly to the founding of the League of Nations, which would later on be reincarnated as the United Nations. Truly, Andrew’s story encapsulated the American dream, boiled down to its most essential ingredients. A poor immigrant comes to America with nothing to his name, and managed to climb his way to the very top, becoming the wealthiest man in the world, made possible only by hard work, industry and belief in the American Dream. Never again will there be a better rags to riches story, then that of Andrew Carnegie.


Andrew Carnegie Steel Tycoon:

The New Tycoons:

Carnegie Started as a Bobbin Boy:

How Andrew Carnegie Turned His Fortune Into A Library Legacy:

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