Andrew Carnegie : biography
After the war, Carnegie left the railroads to devote all his energies to the ironworks trade. Carnegie worked to develop several iron works, eventually forming The Keystone Bridge Works and the Union Ironworks, in Pittsburgh. Although he had left the Pennsylvania Railroad Company, he remained closely connected to its management, namely Thomas A. Scott and J. Edgar Thomson. He used his connection to the two men to acquire contracts for his Keystone Bridge Company and the rails produced by his ironworks. He also gave stock to Scott and Thomson in his businesses, and the Pennsylvania was his best customer. When he built his first steel plant, he made a point of naming it after Thomson. As well as having good business sense, Carnegie possessed charm and literary knowledge. He was invited to many important social functions—functions that Carnegie exploited to his own advantage.Nasaw, pp. 105–107.
Carnegie believed in using his fortune for others and doing more than making money. He wrote:
1885–1900: Empire of Steel
Carnegie’s mother had not wanted him to get married. After she died in 1886, Carnegie married Louise Whitfield, who was more than 20 years his junior. In 1897, the couple had their only child, a daughter, whom they named after Carnegie’s mother, Margaret.
Carnegie made his fortune in the steel industry, controlling the most extensive integrated iron and steel operations ever owned by an individual in the United States. One of his two great innovations was in the cheap and efficient mass production of steel by adopting and adapting the Bessemer process for steel making. Sir Henry Bessemer had invented the furnace which allowed the high carbon content of pig iron to be burnt away in a controlled and rapid way. The steel price dropped as a direct result, and Bessemer steel was rapidly adopted for railway lines and girders for buildings and bridges. The second was in his vertical integration of all suppliers of raw materials. In the late 1880s, Carnegie Steel was the largest manufacturer of pig iron, steel rails, and coke in the world, with a capacity to produce approximately 2,000 tons of pig metal per day. In 1888, Carnegie bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a 425-mile (685 km) long railway, and a line of lake steamships. Carnegie combined his assets and those of his associates in 1892 with the launching of the Carnegie Steel Company.
By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it. Carnegie’s empire grew to include the J. Edgar Thomson Steel Works, (named for John Edgar Thomson, Carnegie’s former boss and president of the Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project across the Mississippi River at St. Louis, Missouri (completed 1874). This project was an important proof-of-concept for steel technology, which marked the opening of a new steel market.
1901: U.S. Steel
In 1901, Carnegie was 66 years of age and considering retirement. He reformed his enterprises into conventional joint stock corporations as preparation to this end. John Pierpont Morgan was a banker and perhaps America’s most important financial deal maker. He had observed how efficiently Carnegie produced profit. He envisioned an integrated steel industry that would cut costs, lower prices to consumers, produce in greater quantities and raise wages to workers. To this end, he needed to buy out Carnegie and several other major producers and integrate them into one company, thereby eliminating duplication and waste. He concluded negotiations on March 2, 1901, and formed the United States Steel Corporation. It was the first corporation in the world with a market capitalization over $1 billion.