The Life and Times of Andrew Carnegie (Part 2) – Hour 1

Audio Transcription

Learn about the philosophy and the mindset that helped to make Andrew Carnegie one of the wealthiest people on the planet. Discover how the Scottish immigrant went from poverty to prosperity.

FUN FACT:

Andrew Carnegie sold Carnegie Steel for J.P. Morgan for $480 million in 1901

Andrew Carnegie’s net worth in 1901 was the equivalent of $13,234,209,251.77 in 2017

1835 – Andrew Carnegie was born in Dunfermline, Scotland.

1847- The invention of the steam-powered loom becomes popular in Scotland. This eliminated the need for many jobs including the job of Andrew’s father (Will).

1848 – Andrew’s dad (Will and his wife Margaret) decides to move the family to the United States from Scotland..

1. Will – Dad
2. Margaret – Mom
3. Tom – 5 year old son
4. Andrew – 13 year old son

NOTABLE QUOTABLE – “New York was the first great hive of human industry among the inhabitants of which I had mingled, and the bustle and excitement of it overwhelmed me.” – Andrew Carnegie

1848 – The family traveled west by canal and steamboat and arrived three weeks later Allegheny, Pennsylvania.

1. Today a trip like this would only take 6 hours by car (a 370-mile, six-hour trip by car today).
2. They lived above a member of their extended family’s weaving shop.
3. Andrew’s dad took over the shop, but the business failed.

1848 – Age 13 – Andrew’s father gets a job at a textile mill

1. He begins working full-time to help support his family for $1.20 per week ($36.16 in today’s 2017 money).
2. 12 hour + days (from dusk to dawn)
3. Andrew begins work as a bobbin boy in a textile mill, earning $1.20 per week.

NOTABLE QUOTABLE – “If you want to be happy, set a goal that commands your thoughts, liberates your energy, and inspires your hopes.” – Andrew Carnegie

1849 – Age 14 – He volunteered to work for free after and before his shift to learn the telegraph machine.

NOTABLE QUOTABLE – “Do your duty and a little more and the future will take care of itself.”

1849 – Age 14 – Andrew works as messenger

1. The boss sees Andrew working hard and promotes him to the position of a messenger boy in a telegraph office for the Pennsylvania Railroad, earning $2.50 per week.
2. Andrew begins reading everything he can get his hands on. He took advantage of the generosity of Colonel James Anderson, who made his library of books available to the local boys (which was a rare thing back in the day). Those books provided Andrew with most of his education.

NOTABLE QUOTABLE – “It was from my own early experience that I decided there was no use to which money could be applied so productive… as the founding of a public library.”

1851- Age 16 – He was promoted to the telegraphy operator position.

NOTABLE QUOTABLE – “The older I get, the less I listen to what people say and that more I just watch what they do.”

1853 – Age 18 – Andrew takes job at Pennsylvania Railroad

1. Andrew becomes the personal telegrapher and assistant to Thomas Scott, the superintendent of the Pennsylvania Railroad’s western division, and is paid $35 per month (the equivalent of $1,054.76 per month now).
2. He learns the ins and outs of the railroad industry, and makes the following innovations:
   1. Keeping the telegraph office open 24 hours per day.
   2. Burning railroad cars following accidents, which clears the tracks faster and gets commerce going again faster.

NOTABLE QUOTABLE – “To try to make the world in some way better than you found it is to have a noble motive in life.” – Andrew Carnegie

1855 – Age 20 – William Carnegie, Andrew’s father, passes away. Andrew, only 20 years old, becomes the family’s main income earner.

NOTABLE QUOTABLE – “People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.”- Andrew Carnegie

December 1st 1859  – Age 24 – Scott promoted Carnegie to be the superintendent of the Western Division of the Pennsylvania Railroad.

1. Carnegie then hired his sixteen-year-old brother, Tom, to be his personal secretary and telegraph operator.
2. Carnegie hired cousin, Maria Hogan, who became the first female telegraph operator in the country.
3. Carnegie made a salary of fifteen hundred dollars a year ($47,000 in 2017).

Thomas A. Scott, superintendent of the western division of the Pennsylvania Railroad and Andrew Carnegie’s boss, told Andrew about ten shares of the Adams Express Company that were for sale.

NOTABLE QUOTABLE –  “Perhaps the most tragic thing about mankind is that we are all dreaming about some magical garden over the horizon, instead of enjoying the roses that are right outside today.” – Andrew Carnegie

1856 – Age 21 – Carnegie makes his first investment in sleeping cars. After investing $217.50 (approximately $5,996.75 in 2017) in the Woodruff Sleeping Car Company, two years later he would begin receiving an annual return of $5,000.

NOTABLE QUOTABLE – “The way to become rich is to put all your eggs in one basket and then watch that basket.” – Andrew Carnegie

FUN FACT –  The family had to mortgage their house to get the $500 needed to invest.

While associated with the railroad, Carnegie developed a wide variety of other business interests.

1. Theodore Woodruff approached him with the idea of sleeping cars on railways, offering him a share in the Woodruff Sleeping Car Company. Carnegie secured a bank loan to accept Woodruff’s proposal — a decision he would not regret.
2. He ultimately bought the company that introduced the first successful sleeping car on a U.S. railroad.

1861- Age 26 – Carnegie makes his second big investment and his first investment in oil. After an initial investment of $11,000 to the oil company in Titusville, PA, Carnegie receives his first return of $17,868 only a year later.

NOTABLE QUOTABLE – “Do your duty and a little more and the future will take care of itself.” – Andrew Carnegie

1865 – Age 30 – He left the railroad industry to focus exclusively on his investments and the Keystone Bridge Company.

By age 30, Carnegie had amassed business interests in iron works, steamers on the Great Lakes, railroads, and oil wells. He was subsequently involved in steel production, and built the Carnegie Steel Corporation into the largest steel manufacturing company in the world.

NOTABLE QUOTABLE – “You cannot push anyone up a ladder unless he be willing to climb a little himself.” – Andrew Carnegie

1865 – Age 30 – Carnegie retires from the railroad. He creates the Keystone Bridge Company, known for creating bridges of durable steel instead of the traditional wooden bridges.

NOTABLE QUOTABLE – “Labor, capital, and ability are a three-legged stool… They are equal members of the great triple alliance which moves the industrial world.” – Andrew Carnegie

1867- Age 32 – Carnegie founds the Keystone Telegraph Company. It almost immediately merges with the Pacific and Atlantic Telegraph Companies. Allowing Keystone’s investors to nearly triple their return

NOTABLE QUOTABLE – “There is little success where there is little laughter.” – Andrew Carnegie

1872 – Age 37 – After a visit to Bessemer’s steel plants, Carnegie realizes the commercial potential of steel.

FUN FACT: The Bessemer process was the first inexpensive industrial process for the mass production of steel from molten pig iron before the development of the open hearth furnace. The key principle is removal of impurities from the iron by oxidation with air being blown through the molten iron. The oxidation also raises the temperature of the iron mass and keeps it molten.

NOTABLE QUOTABLE – “Not only had I got rid of the theology and the supernatural, but I had found the truth of evolution.” – Andrew Carnegie

FUN FACT: The modern process is named after its inventor, the Englishman Henry Bessemer, who took out a patent on the process in 1856.

He would return to America with new plans to expand his steel business. By the next decade, most of Carnegie’s time was dedicated to the steel industry.

1. His business, which became known as the Carnegie Steel Company, revolutionized steel production in the United States.
2. Carnegie built plants around the country, using technology and methods that made manufacturing steel easier, faster and more productive.
3. For every step of the process, he owned exactly what he needed: the raw materials, ships and railroads for transporting the goods, and even coal fields to fuel the steel furnaces.
4. This start-to-finish strategy helped Carnegie become the dominant force in the industry and an exceedingly wealthy man. It also made him known as one of America’s “builders,” as his business helped to fuel the economy and shape the nation into what it is today. Some felt that the company’s success came at the expense of its workers. The most notable case of this came in 1892.

1887 – Age 52 – Carnegie marries Louise Whitfield

1889  Age 54 – Carnegie’s first book, The Gospel of Wealth is published.

1889 – He owned Carnegie Steel Corporation (the world’s largest corporation).

1892- Age 57 – The Homestead Strike occurred.

1. A union contract expires, and the workers go on strike.
2. The strike lasted 143 days.
3. A state militia would later be sent in to handle the strike. The militia beat the workers and Andrew Carnegie was no longer considered a friend of the workers and the unions…a cause he was once known to support.

1899- Age 64 – Carnegie organizes several of his steel companies into Carnegie steel.

NOTABLE QUOTABLE – “You are what you think. So just think big, believe big, act big, work big, give big, forgive big, laugh big, love big and live big.”- Andrew Carnegie

1901 – Age 66 – He sold his business ventures to J.P. Morgan and devoted his remaining years to full-time philanthropy.

He sold to J.P. Morgan in 1901 for $480 million.

FUN FACT: Andrew Carnegie’s net worth in 1901 was the equivalent of $13,234,209,251.77 in 2017

FUN FACT: This means that he had more wealth than America’s current wealthiest 4 people combined (Bill Gates, Jeff Bezos, Warren Buffett  and Mark Zuckerberg). As of 2017, Forbes reports:

1. Bill Gates – Worth an approximate $89 billion
2. Jeff Bezos – Worth an approximate $81.5 billion
3. Warren Buffett – Worth an approximate $78 billion
4. Mark Zuckerberg – Worth an approximate $71 billion

1916 – Carnegie moves back to America, buying a home in Lennox, Massachusetts

1919 – Carnegie dies of pneumonia and he cannot take his money with him.

FUN FACT In 1901, Carnegie made a dramatic change in his life. He sold his business to the United States Steel Corporation, started by legendary financier J.P. Morgan. The sale earned him more than $200 million. At the age of 65, Carnegie decided to spend the rest of his days helping others