Rags To Riches Series: Andrew Carnegie
Andrew Carnegie was an American industrialist and founder of Carnegie Steel – a company that produced more steel than all of Great Britain at one point. However, Carnegie’s story began completely differently. He was born to a poor handloom weaver in Scotland.
For generations the Carnegies had been master handloom weavers. But as the industrial revolution introduced steam-powered looms, the family business collapsed. Carnegie grew up in incredible poverty in a one room house. He would often spend time sleeping in order to “forget the misery of hunger”.
Eventually, to try and fight their way from the poverty they could seem to find no escape from, the Carnegie family emigrated to the US when he was aged 12. They moved to Pittsburgh, where his two aunts lived and all of them slept in one room. At the age of 13, Andrew obtained his first job as a bobbin boy, changing spools of thread in a cotton mill 12 hours a day, 6 days a week in a Pittsburgh cotton factory. He often had nightmares of the boiler exploding.
During this time, Andrew would immerse himself reading the historical works of his favourite Scottish heroes such as Robert the Bruce, William Wallace, and Rob Roy. A man named Colonel James Anderson, opened his personal library of 400 volumes to working boys every Saturday night. Carnegie jumped at the opportunity to further his passion of reading and education.
The next position he worked was that of a telegraph messenger boy, but due to his hard working nature, he was soon promoted as an operator. He made the effort during this time to make connections with important people in the area.
At the age of 17, Carnegie took a job as a telegrapher and assistant to a local railroad man for an impressive salary of $35 a month. Over the next decade, he became essential to running the profitable railroad. He learnt everything he could about the industry and business in general and it was here that he began making investments in steel and oil companies that went on to earn him huge returns.
A $217 investment in a sleeping car company soon paid $5,000 a year. He helped form a pig iron company to build railroad bridges. His investments became so profitable that his $2400 a year from the railroad amounted to only 5 percent of his income.
In 1873, Carnegie organized the first of his steel works. Over the coming decades, Carnegie Steel would grow into an empire — thanks to the early adoption of the new Bessemer process for steel and other innovations. Carnegie then started his reputation as one of “builders” of America who helped shape the nation.
In 1901, he sold Carnegie Steel to JP Morgan for $480 million and became a philanthropist. He donated millions to the New York Public Library, established the Carnegie Institute of Technology in Pittsburgh, which is now known as Carnegie-Mellon University, created the Carnegie Foundation for the Advancement of Teaching, and formed the Carnegie Endowment for International Peace.