III.

Development of an Industrialist

A year after obtaining his first job, Carnegie was able to move out of the cotton factory, which he disliked intensely, to become a messenger in a Pittsburgh telegraph office. Here he could meet important people and take advantage of any business opportunity that might present itself. From this moment on, his rise in the business life of Pittsburgh was meteoric. He quickly taught himself telegraphy. He was then hired by the Pennsylvania Railroad as private secretary and telegrapher for railroad official Thomas Alexander Scott. His salary was $35 a month, and Carnegie regarded his fortune as already made. Carnegie advanced by successive promotions until he took over Scott’s job as superintendent of the Pittsburgh division of the railroad, when Scott became general superintendent of the line.

In 1861, at the beginning of the American Civil War, Carnegie served in the War Department under Scott, who was in charge of military transportation and government telegraph service. Carnegie remained with the Pennsylvania Railroad for 12 years, from 1853 to 1865, but long before he left, his interests had expanded far beyond the railway office from which he drew his modest salary. Despite his small income he took out a loan to buy into a sleeping car company, which soon brought him a greater annual income than his railroad salary. He also invested a small amount in an oil company in western Pennsylvania. The handsome dividends he received from his oil investments enabled him to go into the iron and steel business. In 1865 he helped form a company to replace wooden railway bridges with iron bridges. At the same time he became a partner in a small iron-forging company in Pittsburgh.

In 1873, on one of his frequent trips to Great Britain, Carnegie met Henry Bessemer, inventor of the Bessemer process of making steel, and he became convinced that the future of industry lay in steel. He built a steel mill near Pittsburgh, and from this time on the Carnegie empire was one of constant expansion. By 1899, when he consolidated his interests in the Carnegie Steel Company, he controlled about 25 percent of American iron and steel production. In 1901 Carnegie sold his company for $250 million to a syndicate formed by financier J. P. Morgan to organize the United States Steel Corporation (see USX Corporation: History of U.S. Steel). Carnegie then retired from business.

Carnegie always maintained that the secret of his business success lay not in his own genius as a maker of steel, but in his ability to select the proper person for the job to be done. He was one of the first industrialists to hire scientists for research, and he suggested for his own epitaph, “Here lies a man who was able to surround himself with men far cleverer than himself.” But such a statement underestimates Carnegie’s own genius in organization and the shrewdness of his business judgment. His faith in the United States as a land of business opportunity never wavered, and much of his financial success was due to his policy of expanding in periods of depression. Carnegie also prided himself on his enlightened labor policy, although his reputation for benevolence was publicly damaged by the violent Homestead Strike of 1892.