Financial giant: Andrew Carnegie

Andrew Carnegie’s name is most likely decorating at least one building in your city. At least, this is the case in most major cities and towns in the United States. Although he is now widely known as a philanthropist, Carnegie has accumulated a fortune from the beginning—he donated a fortune in his later life.

Scottish immigration

Andrew Carney was born on November 25, 1835 in Dunfermline, Scotland. Both his parents are engaged in weaving and sewing industry. With the invention of the power loom taking over the industry, the Carnegie family’s life was not rich. When Carnegie was 12 years old, the family went to the United States to find better opportunities. It turns out that looking for these opportunities is a knack for young Andrew.

Courier to the railway director

Carnegie worked at a cotton mill in his new home in Allegheny, Pennsylvania (now Pittsburgh), and soon turned to be a telegraph messenger. In the process of this work, Carnegie tried to make up for his lack of formal education through self-study. Entering the private library (with some difficulties), Carnegie read eagerly, and taught himself to translate telegram signals with his ears. The latter ability is the source of Carnegie’s next promotion to Telegraph Office Clerk, and then to Telegraph Operator at the age of 17.

Carnegie’s capable mind and charisma quickly promoted the status of the railway until he found himself as secretary to Thomas A. Scott, the chief of the Pennsylvania Railroad. Under Scott’s guidance, he learned valuable experience in management and investment. Carnegie began to invest in railroad companies and industries that support them. By 1863, he was earning thousands of dollars in dividends every year. When Scott left the railroad to form the Keystone Bridge Company, Carnegie took over as his head. In 1865, Carnegie joined his mentor at Keystone and helped shape this successful company.

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Building an empire with steel

Carnegie’s investments and partnerships gave him a controlling stake in several distinctly different companies. He owns sleeper cars used in railways, a part of Keystone, several steel plants that supply Keystone, an oil company, and a rolling mill. Carnegie believed that iron was the basis for tying his businesses together, and he began to consolidate his ownership through vertical integration (acquisition of businesses at all levels of the production process).

However, during a trip he raised funds through the sale of bonds to European investors, Carnegie noticed that the demand for steel is growing and may exceed the demand for iron. In 1873, he changed his strategy and began to focus on steel holdings. Carnegie and his partners focus on building new factories with modern innovation capabilities to surpass competitors.

Around this time, Carnegie created two basic business rules to guide him. First, if you carefully monitor costs, profits will take care of themselves. Second, the existence of talented managers is more valuable than the actual factories they operate.

Carnegie’s steel mill had the most modern inventory and cost control at the time. His management team included Charles M. Schwab (Charles M. Schwab), who later became the head of Bethlehem Steel.

Buy when others sell

Carnegie’s factories were already operating more efficiently than competitors, so when the economy fell into a six-year recession in 1873, he was in the best position to buy. Carnegie acquired competing factories and other production-level companies. He refurbished the old mill to modern standards and restored production capacity when the economy recovered and surpassed the rest of the competition. In 1883, the economy was in trouble again, and Carnegie made two acquisitions, which both consolidated his empire and damaged his reputation. Contrarian investors find value in the worst market conditions.

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Henry Frick and Homestead

Carnegie acquired his biggest competitor, Homestead Works, and a controlling stake in Henry Frick’s Coke Empire. Coke is vital to the steelmaking process, and Frick has a lot of coke.

Although Carnegie and Frick are very different people (Carnegie is charming and happy, and Frick is stern and taciturn), Carnegie saw that Frick was capable of taking over his vast empire. Daily operations. In 1892, Carnegie merged his company into a Carnegie Steel Company and appointed Frick as chairman.

Frick was firmly opposed to the union, and in the same year he was chairman, there was a strike at the Homestead factory. As the price of steel falls, Flick, who pays attention to costs, wants to lower wages to maintain profits. The union opposed any layoffs, and a work stoppage strike ensued. Carnegie was abroad, and Frick was determined to break the strike instead of succumbing to demands-Carnegie often did. Flick called in guards from the Pinkerton Detective Agency to protect the non-union workers who were brought in to reopen the factory.

Homestead war

A battle broke out between the striker and the guard, and seven people were killed. Gunshots, bombs, sticks and stones are characteristic of the ongoing conflict between unions, non-union workers and guards. The militiamen were eventually called, and the factory resumed operations with non-union workers, but the fighting continued. An assassin who had nothing to do with the union shot and stabbed Frick for a week during the hostilities. Frick not only survived, but he also bandaged his wounds and ended his working day. Seeing the challenges they faced, the union disbanded and accepted a pay cut to resume work. The homestead strike damaged Carnegie’s image because many people thought he had silently agreed to support Frick.

Morgan buys Carnegie

After the Homestead strike, Carnegie began to pay more and more attention to writing and philanthropy. In 1889, he wrote an article called “The Gospel of Wealth”. In the article, he pointed out that there should be two stages in the life of an industrialist: one is that he accumulates as much wealth as possible, and the second is that he All wealth is dedicated to society. In 1901, Carnegie sold his company to a group of investors led by JPMorgan Chase for $480 million, which gave him a chance to fulfill his promise. Carnegie Steel became the core of U.S. Steel Corporation, and the trust controls 70% of the country’s steel production. Carnegie started his philanthropy with one of the largest personal wealth in the world.

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Rewrite history

From 1901 to his death in 1919, Carnegie donated funds worth billions of dollars in modern times. Maybe you remember the trouble buying books when he was young. He funded more than 2,500 public libraries in the United States and abroad—all libraries were named after Carnegie. He also funded Carnegie Hall, Carnegie Mellon University, Carnegie Institute of Washington, Carnegie Hero Fund Committee, Carnegie Education Promotion Foundation, Carnegie Foundation, etc.

Although he might like his name a little too much, Carnegie, as a new generation of industrialists, shared the stage with Rockefeller and devoted himself to building wealth but sent it away. Even now, there are very few extremely wealthy people who disperse all of their wealth. By doing this, Carnegie was able to replace his image as one of the stubborn robber barons with the image of a modern Santa — his white beard and twinkling eyes strengthened this image. Over time, his wealth of business and investment expertise may be forgotten, but because of his philanthropy, his name will not be forgotten.

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