Andrew Carnegie was born on 25 November 1835, in Dunfermline, Scotland, and is known as one of the giants of the latter period of the industrial revolution in the USA, building a virtual empire in iron and steel before retiring in 1901, and concentrating on philanthropic deeds.
So just how rich was Andrew Carnegie? Forbes magazine estimates that in today’s money, Andrew would have had a net worth of $310 billion at its height, made during his career in the iron and steel industry during the second half of the 19th century, brought to fruition with his sale of his Carnegie Steel Company to J.P. Morgan for $480 million ($13.6 billion in 2015) in 1901, and which elevates him to the position of the fourth richest person of all time.
Andrew Carnegie Net Worth $310 Billion
Andrew Carnegie was born into a family of weavers, who moved to the USA in 1848 to escape increasingly dire economic times in Scotland – brought about by machinery supplanting manual labour – even borrowing funds to do so. Escaping this level of poverty made a lasting impression on Carnegie, manifested by a thirst for learning, and a capacity for hard, but efficient, work. His first job was in a cotton factory in Pittsburgh, working 72 hours a week for $1.20. In 1850 he joined the Ohio Telegraph Company as a telegraph boy at $2.50 a week, and became an operator a year later, before his industriousness was noticed, and he was employed by Thomas A. Scott – President of the Pennsylvania Railroad Company and one of the ‘builders of America’ – as a telegraph operator, and soon his secretary at the then enormous salary of $35 a week. Carnegie’s net worth was on the rise.
Over the next few years, Andrew Carnegie not only rose through the company ranks, but was also able to take advantage of Scott’s sometimes corrupt insider-trading of shares of companies related to the railroad business. In particular, railroads themselves and the iron and steel industry became increasingly important, firstly to the general development of the country, and specifically communications systems in the US, but then with the advent of the American civil war (1861-65) even more so, in transporting both troops and munitions. As part of railroad development, Carnegie was instrumental in the merger of companies which were to produce Pullman sleeping cars, facilitating long-distance rail travel. Clearly Carnegie’s net worth benefited considerably from his involvement in these activities.
Thomas A.Scott was appointed Assistant Secretary of War in charge of military transportation by President Lincoln, and in turn Carnegie was made superintendent of military railroads and telegraph lines. This experience gained during the war was instrumental in Carnegie’s business future, and even before war’s end, he was able to invest in and eventually control the Keystone Bridge Company, installing iron bridges, such that this income was over $50,000 a year by 1867.
Also in 1864, Carnegie had wisely bought $40,000 in Story Farm on Oil Creek in Pennsylvania, which produced more than $1 million in cash dividends in the first year, with petroleum being particularly profitable of course. Carnegie’s net worth was growing substantially.
In 1870, he adopted the Bessemer process – developed by the British engineer of the same name – refining iron into steel, and invested as much money as he could borrow to build an appropriate factory in Pittsburgh. This far-sightedness was a continuing Carnegie trait, and kept him ahead of his competitors, so inevitably his net worth continued to grow.
Through the post-war years, Carnegie kept in close touch with Thomas A. Scott and J. Edgar Thomson (subsequent president of the Pennsylvania railroad), to the benefit of all three, as considerable amounts of steel were required to satiate the continued expansion of the railroad system, and Scott and Thomson were rewarded with shares in Carnegie’s companies. Additionally, Carnegie became involved in steel bridge-building, including across the Mississippi River in 1874, which opened a huge new market for steel products, and contributed to Andrew Carnegie’s increasing wealth.
In 1883, Carnegie bought Homestead Steel Works, his largest competitor, which included mines, plants and a 685km railway, plus steamships. By 1888, Carnegie Steel was the largest steel manufacturer in the world, with an output of over 2,000 tons per day, surpassing that of the UK. Carnegie then combined his assets with several associates to launch Carnegie Steel Company in 1892. Part of Carnegie’s success in the iron and steel industry was his concentration on vertical integration, from iron ore mines to constructions utilising steel – similar to Rockefeller’s integration of the oil industry during the same period. Controlling means and costs of transportation was vital to this concept, hence his continuing affiliation with Scott and the railroad system.
Following Andrew Carnegie’s aforementioned sale of his steel business to J.P. Morgan in 1901, Andrew concentrated on his philanthropic interests. Although strictly efficient in business and manufacturing, Carnegie had always been generous with his money, and he is noted as one of the greatest philanthropists, in particular disposing of huge amounts during the later years of his life, estimated at several billion dollars in today’s money. He had always valued education, and so contributed large amounts to public libraries in the USA, UK and Canada among many English-speaking countries, over 3,000 in total, with the first actually being built in his birthplace, Dunfermline. He made large contributions benefiting Pittsburgh, Baltimore and Edinburgh, too. Pittsburgh and Washington DC also received $2 million each to establish the Carnegie Institute of Technology and Carnegie Institution respectively. He donated $10 million to found the Carnegie Trust in Scotland (compared with $50,000 per year total government assistance for all Scottish universities), and a further $10 million to found the Carnegie UK Trust, both to benefit struggling scholars. The Tuskegee Institute for Afro-American education and the National Negro Business League were also beneficiaries of Carnegie’s generosity.
There were many other notable bequests, for example although Carnegie was a ruthless businessman and employer, he established a pension fund for former employees, and one for college professors. He had the famous Carnegie Hall built in New York City, but lest that was thought to be in memory of himself, he contributed 7,000 organs to churches across the USA. In the USA, UK, Canada, Switzerland and several other countries, he founded the Carnegie Hero Fund, to reward of heroic deeds. He contributed $1.5 million to build the Peace Palace in The Hague, and $150,000 towards the Pan-America Palace in Washington DC to house the International Bureau of American Republics.
In his personal life, Andrew Carnegie married Louisa Whitfield in 1887, and they were together until his death on 11 August 1919, raising just a daughter. Carnegie had refused to contemplate marriage while his mother was still alive, concentrating on caring for her as her health deteriorated until her death in 1886. After his own death, his remaining estate of around $30 million was distributed among various charitable institutions. So one can only admire the fact that his net worth, which he had worked so hard to accumulate, was indeed put to good use.
