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Transcript of Andrew Carnegie
Integration "The King of Steel." control over all elements of the production process. Early Years and Path to Success 1835 1870 1855 1845 1865 Born Nov 25, 1835
Parents - Margaret and Will Carnegie Will Carnegie becomes
unemployed Edgar Thomson Works in Braddock, PA
2000 steel rails for PA Railroad Pittsburgh
Steel J. Pierpont
Efforts Gospel of
Family settles in Pittsburgh
Andrew Carnegie works various jobs
PA RR's western division
Telegraph office open 24 hrs
Burning railroad cars 1856
Invests $217.50 in Woodruff Sleeping Car Company
Return of $5000 annually
Becomes superintendent of PA RR's western division 1868
Pledges to resign from business at age 35
Live on $50,000 per year
Donate the rest
Spend time being educated
Visits Henry Bessemer's steel plants
Plans to expand his steel business
Founds Keystone Telegraph Company
Strings telegraph wire across RR pole across entire state 1861
Supervising repairs of RR lines in MD
Helps organize RR and telegraph lines to VA
Invests $11,000 in an oil company - return of $17,900
Income = $42,000
1/2 from oil investment
$2400 from salary
$13,000+ from other investments 1864
Drafted into the Union Army
Pays a replacement $850
Retires from RR
Reorganizes Piper and Schiffler Company into Keystone Bridge Company
Envision building bridges with iron Feared he would die “disgraced” with so much wealth
Dedicated remainder of life to giving away money
Did not approve of charity
Public libraries, pensions for professors, etc
Totaled about $350 million “Jupiter” Morgan
Financing reorganization of RRs, insurance companies, banks
Carnegie was eager to sell his holdings
Morgan - manufacture of steel pipe tubing
Carnegie threatened to invade same business Morgan agreed to buy out Carnegie for over $400 million
1901 - Morgan launched US Steel Corporation
Capitalized at $1.4 billion – America’s first billion-dollar corporation 1. 2. 3. Mining Ships Railroads Carnegie Controlled No one except Carnegie's employees had touched the product before it was sold. Horizontal Integration ally with competitors monopoly control rivals weaker competitors eliminated "Congratulations, Mr. Carnegie
you are now the richest
man in the world." One of the first to call for a "league of nations"
Payed for "a palace of peace"
Later evolved into the World Court in the Netherlands
Hopes for peace destroyed with onset of WWI Problems of the New Age? Proper administration of wealth Old luxuries are now necessities. Luxuries were manufactured at a slow rate making them higher in cost. article written by Carnegie in 1889 wealth of businessman beneficial Social Darwinism wealth hand in hand with responsibility accumulation of wealth beneficial rich should hold their money until they find the proper public use What is the Gospel of Wealth? fortune was better spent on socially beneficial projects Conditions of life revolutionized. wealth should be shared among people. rich only made their money because of other people, and should give back to the public rather than waste the money. wealth would spread to all classes and better society. Carnegie's steel mills most modern in the world.
Drove down costs and undersold the competitors.
Produced affordable steel causing a boom in buildings and bridges.
Steel- jobs, national prestige, higher quality of life.
Carnegie's Company due to cheap steel- lower wages, less job security, end of creative labor. dangerous work
efficiency top priority The Steel Empire Carnegie Steel Company. Each plant located near a river for transportation of goods- Allegheny, Ohio, Monongahela J&L Steel biggest competitor Edgar Thomson Steel Works 1870- Purchased other local mills from the profits of the Edgar Thomson Steel Works. 1892- Carnegie Steel Company Innovations- Open hearth furnace system. Continuous system of production. Improved material handling systems. Bessemer Process Sir Henry Bessemer of England
Cheap and efficient mass production of steel
The steel price dropped
By 1900 - U.S. output of steel exceeded that of the UK Preached rights of laborers to unionize and protect their jobs
Unusual among the industrial captains of his day
His actions did not always match what he said -
steelworkers were often pushed to long hours and low wages Homestead Strike of 1892 Carnegie Steel's main plant in Homestead, PA
Increase in profits by 60%
Company refused to raise worker's pay by more than 30%
Management locked the union out when workers demanded 60%
Carnegie let plant manager Henry Frick deal with the situation
Brought in thousands of strikebreakers to work
Pinkerton security agents
10 killed and hundreds injured
Later resumed operations with non-union immigrant employees
Reputation was permanently damaged Died in 1919 of pneumonia Sources! http://www.pbs.org/wgbh/amex/carnegie/sfeature/mf_flames.html http://www.u-s-history.com/pages/h849.html http://kaitlinsapamericanblog.blogspot.com/2009/12/lad-21-andrew-carnegies-gospel-of.html American Pageant- Kennedy Multiple Choice Questions: 1. What is not one of Carnegie's innovations to his steel company?
a. open hearth furnace
b. faster shipping process
c. continuous system of production
d. improved material handling systems 2. What is vertical integration?
a. control of a large independent company
b. a company's period of economic increase
c. control over all elements of the production process
d. including smaller competitors in the economic market rather than shutting them out http://www.pbs.org/wgbh/amex/carnegie/timeline/timeline2.html http://www.pbs.org/wgbh/amex/carnegie/peopleevents/pande01.html http://library.columbia.edu/indiv/rbml/units/carnegie/andrew.html