Carnegie
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To Carnegie’s chagrin, a man more potent than Kloman was hired to take on the general superintendent position. It was William Clark, a respected technical expert who had been awarded patents for his work in iron and steel machinery. He was also avidly antiunion, so when he discovered the Amalgamated Association of Iron and Steel Workers had infiltrated the mill by the time the furnaces were fired in February 1881, he summarily fired union sympathizers and ordered employees to sign an agreement stating they would not join the union. Another problem he faced was internal conflict between the Irish and the Welsh who dominated the works. The Irish were angry over the Welsh controlling the foreman jobs, and they complained bitterly about low wages. Clark also brought problems on himself during the first summer of operation when men at other firms were getting small advances—compensation for the hot weather—but Pittsburgh Bessemer Steel workers did not. Clark’s blooming mill men struck. They won higher wages this time, but resentment between labor and capital, between mill hand and Clark, was strong at Homestead. Still, Carnegie and the rest of the industry perceived that as soon as Pittsburgh Bessemer worked out these initial problems, the company would be a force in steel.
But labor troubles continued to hamper Homestead, which suffered another strike in January 1882 when Clark demanded wage cuts. To bolster their position, the Amalgamated threatened to incite sympathy strikes at all mills owned by those men invested in Homestead. It was an alarming development never before faced by the mill owners, who considered their relationship with the workingman to be more civilized; such sympathy strikes broke the rules. For the first time, capital realized how powerful the Amalgamated had become, with agitation indeed spreading even further than expected, into mills outside of the Homestead realm.
The Amalgamated, which had been founded in 1875 when three unions representing ironworkers merged, would become Carnegie’s nemesis. For now, he accepted the union as a necessary force that still negotiated reasonably, and when men working at E.T.’s furnaces also went on strike in January 1882, Carnegie and his lieutenants quickly acquiesced to their demands. The next month, Captain Jones was able to inform Carnegie, “I think our men are now getting to be satisfied, and I see signs of the old Esprit De Corps. I am going slow and carefully. I now feel sure that the Union will not get a foothold here. I will ask the Company to agree to loan such good men as I may select say from 60—$800.00 this year to assist them in building homes. This is an effective plan to keep out the Union. Every good man that wants to build, encourage. You should calculate on a reasonable investment in that direction. Give them the money on fair interest.”55 Carnegie would adopt a policy of aiding home construction that was hailed as progressive, but obviously, as Jones suggested, there was a very pragmatic goal behind it: lock out the union. Also, Carnegie falsely took and was mistakenly given much credit for yet another progressive policy, when it was Captain Jones who had championed it.
As for esprit de corps, there was no such attitude at Homestead. The ten-week-long strike was reportedly settled on March 11, but when it came to putting the new agreements in writing, Clark and the Amalgamated disagreed over what had been discussed verbally. The men struck again and Clark attempted to bring in scabs, inciting a pitched battle with the loss of life. Sickened by the mess, the Homestead owners stepped in and settled with the workers, agreeing to maintain the existing wage rates and forcing Clark to resign. Adding to the owners’ woes, the mill had originally been built for manufacturing various steel shapes; but in midconstruction, changes were implemented so steel rails could also be manufactured, resulting in a poor cohesive design and no efficiency, which exacerbated financial losses when steel prices fell.
By 1883, the owners had had enough and started to look for a buyer. Although they were loathe to sell to Carnegie, there were very few prospects, so they reluctantly offered him the company at book value, not much more than the $250,000 in original capital. He didn’t hesitate to buy, allowing the Homestead partners to take their proceeds in either cash or stock. Only one, William H. Singer, took $50,000 in stock—someday to be worth millions.56 A new firm, Carnegie, Phipps and Company, was organized to manage Homestead as well as the Lucy Furnace Company, which had been under control of Wilson, Walker. Trusted business partner John Walker was named chairman of the new organization. Plans were announced to spend $4 million to revamp Homestead into what it was supposed to have been: the greatest plant in the country for manufacturing structural steel.57 Carnegie’s October 1883 purchase of Homestead marked an absolute victory over the aristocracy, but perhaps he had been too obsessive, too eager in jumping at the opportunity. Perhaps he should have more carefully considered the deep division that existed there between capital and labor.
Notes
1. See Archive MFF 457 and document dated July 30, 1879, WPHS.
2. AC to William P. Shinn, April 4, 1879, ACLOC, vol. 4.
3. AC to John Scott, April 7, 1879, ACWPHS, Shinn Suit File.
4. See testimony given by AC, January 7–15, 1880, and testimony given by Daniel Garrison and O. L. Garrison of the Vulcan Iron Company, ACWPHS, William Shinn Suit File.
5. Bridge, p. 128.
6. Ibid., p. 124.
7. AC to William P. Shinn, September 14, 1879, ACWPHS, Letterbook, 1878–1879.
8. Bridge, p. 126. The stories associated with William P. Shinn’s ouster are based on the testimony of Carnegie, William P. Shinn, and John Scott.
9. Ibid., pp. 125–130.
10. Machiavelli, p. 86.
11. William R. Jones to AC, November 5, 1880, ACWPHS, Jones Correspondence File.
12. AC to William R. Jones, November 8, 1880, ACWPHS, Letterbook, 1880–1881.
13. Robert Hessen, Steel Titan: The Life of Charles M. Schwab (New York: Oxford University Press, 1975), p. 20.
14. See documents, ACWPHS, Folder 6, Box 50.
15. Gage, pp. 165, 166.
16. Carnegie, Autobiography, p. 196.
17. William R. Jones to AC, October 29, 1880, ACWPHS, Jones Correspondence File.
18. William R. Jones to AC, December 19, 1880, ACWPHS, Jones Correspondence File.
19. Frances C. Cooper to Hendrick, July 5, 1927, ACLOC, vol. 239.
20. Burton J. Hendrick interview with William L. Abbott, August 1929, ACLOC, vol. 239.
21. Whipple, p. 85.
22. Kleinberg, p. 7.
23. AC to Julian Kennedy, March 14, 1884, ACWPHS, Letterbook, 1884.
24. AC to E. A. Macrum, March 14, 1884, ACWPHS, Letterbook, 1884.
25. William R. Jones to AC, March 22, 1881, ACWPHS, Jones Correspondence File.
26. William R. Jones speech to the British Iron and Steel Institute, May 1881, quoted in Bridge, pp. 109–110.
27. Hessen, pp. 15–16.
28. William R. Jones to AC, December 5, 1879, ACWPHS, Jones Correspondence File.
29. William R. Jones to AC, April 2, 1880, ACWPHS, Jones Correspondence File.
30. Allan Nevins, Abram S. Hewitt (New York: Harper & Brothers, 1935), p. 243.
31. George Lauder Jr. to AC, February 19, 1872, ACWPHS, Union Mills Folder.
32. Herbert N. Casson, The Romance of Steel (New York: A. S. Barnes, 1907), p. 147.
33. Carnegie, Autobiography, p. 211.
34. See Henry Phipps Jr. to AC, quoted in Kenneth Warren, Triumphant Capitalism (Pittsburgh: University of Pittsburgh Press, 1996), p. 29.
35. Samuel A. Schreiner Jr., Henry Clay Frick (New York: St. Martin’s Press, 1995), pp. 34–35.
36. Warren, p. 18.
37. National Labor Tribune, July 2, 1881.
38. Warren, p. 32; Wall, Carnegie, p. 485.
39. Henry Phipps to AC, January 4, 1882, quoted in Warren, p. 31.
40. See H. C. Frick Memorandum dated March 10, 1885, ACWPHS, Frick Papers. On March 10, 1885, Carnegie Brothers and Company, Limited, paid $15,000 for three hundred shares of unissued stock in the H. C. Frick Coke Company, at par. The shares were then allotted to Andrew Carnegie, Tom Carnegie, Harry Phipps, D
. A. Stewart, John Vandevort, George Lauder, John Walker, William R. Jones, John D. Thompson, Henry M. Curry, W. H. Singer, H. W. Borntraeger, W. L. Abbott, S. E. Moore, John Walker (guardian), Amelia Walker, and Caroline Wilson. Another $30,000 was issued for present stockholders to buy. If not bought by March 20, it was to be offered in the market at a price no less than par. Captain Jones owned one hundred shares worth $5,000.
41. See memorandum dated August 17, 1885, ACWPHS, Frick Papers.
42. Henry C. Frick to AC, August 13, 1883, quoted in Warren, p. 34.
43. Henry C. Frick to AC, November 18 and 19, 1883, quoted in Warren, p. 36.
44. George Lauder Jr. to AC, November 14, 1883, quoted in Warren, p. 36.
45. See memorandum dated December 1, 1884, ACWPHS, Frick Papers.
46. AC to E. Y. Townsend, April 20, 1882, ACWPHS, Edgar Thomson Operating File.
47. E. Y. Townsend to AC, April 21, 1882, ACWPHS, Edgar Thomson Operating File.
48. AC to E. Y. Townsend, April 22, 1882, ACWPHS, Edgar Thomson Operating File.
49. A. L. Griffin to AC, November 23, 1883, ACWPHS, Edgar Thomson Operating File.
50. See documents dated April 1, 1881, ACLOC, vol. 5.
51. Bridge, p. 134.
52. Ibid., p. 135.
53. William R. Jones to AC, December 21, 1880, ACWPHS, Jones Correspondence File.
54. Bridge, p. 152.
55. William R. Jones to AC, February 20, 1882, ACWPHS, Jones Correspondence File.
56. See Hendrick, Carnegie, vol. 1, pp. 302–303.
57. John N. Ingham, Making Iron and Steel (Columbus: Ohio State University Press, 1991), p. 66.
CHAPTER 14
An Attack on Britain
Carnegie was just as feverish in attacking the British aristocracy as he was the patricians in iron and steel, and his phenomenal business success became a platform for launching into political, as well as literary, endeavors far more vigorously than ever before. Although he regretted from time to time not having pursued the course laid out in his 1868 memorandum, he now realized that with the ladles of disposable cash he possessed, he had the opportunity to seriously influence literary, political, and social movements. This tantalizing prospect first manifested itself in 1882 when he agreed to finance a proletarian newspaper chain in Britain advocating the overthrow of the privileged class. Here was a chance to carry on his father’s fight for the charter.
The initial guiding force behind the newspaper chain was Thomas Graham, a Dunfermline native whom Carnegie had befriended on a train ride almost twenty years earlier. Graham was now an influential merchant in Wolverhampton who was allied with Samuel Storey, a radical member of Parliament from the industrialized Newcastle area and owner of two radical newspapers. An impressive and intimidating figure, Storey stood over six feet tall, with a bulky frame, a thick, flowing beard, and booming voice. His stature was reflected in the editorial content of his newspapers, the Sunderland Echo and the Tyneside Echo, which resounded with calls for reform. Graham wanted Carnegie to partner with him and Storey to build a radical newspaper chain targeting the industrial heartland of Great Britain.
When Carnegie had coached through Britain in 1881 (the logistics handled by Graham, not so incidentally), he spent six days with the merchant in Wolverhampton to fully understand what was involved. The industrialized Midlands were ripe for political revolution, Graham argued, and a network of newspapers located in volatile cities could incite meaningful reforms that would give more power to the people. These would be cheap papers, affordable to the workingman, with Storey and he providing the management and editorial expertise and Carnegie the financing.
While Graham talked a good game, the changing British political climate also inspired Carnegie to take an interest in a politically charged newspaper syndicate. In 1880, the atmosphere had suddenly changed when the radical Liberals overthrew Prime Minister Benjamin Disraeli, a politician Carnegie thought heartless. Leading the charge was William Gladstone, age seventy-one, who became prime minister when the Liberal Party took the Parliament by storm, winning a majority. During the campaign, he had stopped at Dunfermline, and a tremendous crowd turned out to hear the “People’s William” speak. An impressive orator, the Liberal leader had stirred up the public by promising further reforms to extend the electorate and by respecting the desire for home rule in Ireland, a position Carnegie heartily agreed with. “I hear some Americans reproaching the Irish people for rioting and fighting so much;” Carnegie wrote at the time, “the real trouble is they don’t fight half enough.”1 The fire had not died inside him, and he predicted the destruction of the aristocracy: “Even Englishmen will soon become satisfied that no man should be born to honors, but that these should be reserved for those who merit them. But what kind of fruit could be expected from the tree of privilege? . . . The days of rank are numbered.” It was time to seize the moment.
Over the next year, their plans coalesced, and Carnegie returned to England in 1882 to oversee the launch of the newspaper syndicate. The trio now owned or controlled eight modest newspapers located in industrialized cities (the number to increase to eighteen within two years) and a sizable interest in one crown jewel, the London Echo. Its owner, Passmore Edwards, had been railing against the Royal Family, the House of Lords, the Established Church, and anything held sacred by the conservatives in general for several years, and was making a fortune at it, too. Making money on radical politics was a perfect mix as far as Carnegie was concerned. But more significant to him, he was able to amplify his personality and further define himself through the newspapers. That first summer Carnegie appeared often in the offices of the Wolverhampton Express and gave rousing speeches on the burning issues of the day. His voice was heard through shrill editorial policy and content, as the newspaper syndicate supported Gladstone’s initiatives, advocated universal franchise, payment of members of Parliament, curtailed power of House of Lords, and home rule.
The trio’s campaign had an immediate impact as a wave of agitation swept through the laboring class, and the landed gentry feared upheaval. Not only did the conservative establishment and media not appreciate Carnegie’s politics, but they found his self-aggrandizing offensive. The St. James Gazette counterattacked, stating that “the present agitation originated in America, and is an attempt to infuse republican sentiments into English politics. The movement, with all its paraphernalia of banners, processions, monster meetings and other factitious machinery which American politicians know so well how to handle, is entirely foreign to English sentiment, and is the result of American influence and paid for by American dollars. Mr. Carnegie is at the head of a conspiracy which is more subtle and dangerous than that of the dynamiters and which seeks to destroy both the Crown and the House of Lords.”2 His calls for death to privilege and the overthrow of the monarchy was like swatting at a bees’ nest.
Storey, who had few friends in Parliament as it was, did not expect such virulent language on Carnegie’s part, so he suggested to his partner that too provocative of a tone was counterproductive. No apologies offered, Carnegie responded vigorously, “My Dear Friend, You regret that in the published interview I attacked the Crown. What I then said was in reply to the charge of the St. James Gazette that I was engaged in a conspiracy against English institutions. This charge I resented. I am no conspirator; but I am, as you are well aware, and as I would have all the world know, a man who regards the doctrine of the political equality of man as man, as the very soul of politics; the precious root from which spring manly self-respect and all its attendant virtues. . . . Holding these opinions, I should not have been honest had I not admitted that I would destroy, if I had the power, every vestige of privilege in England . . . but at the same time, I would not shed a drop of blood, nor violate a law, nor use violence in any form, to bring about what I so much desire.”3 Carnegie, who adopted the moral-suasionist position of his Uncle Thomas, had never been exposed to such private and public disapproval and fought it off with brave words, but the b
loodless revolution contested with pens hurt him more than he expected.
The conservative faction expanded their attack, claiming Carnegie was buying newspapers merely to establish a foothold for his own political ambitions—a seat in Parliament. At first Carnegie denied interest: “I do not think I would care much to enter Parliament even if I were a British citizen. The Press is the true source of power in Britain as in America. The time of Parliament is consumed in discussing trifling affairs, which should be relegated to local assemblies. Members of Parliament sit merely to carry out the plans dictated by the press, the true exponent of the wishes of the people.”4 Yet, he began to entertain the idea, asking his friend James Blaine jokingly, or perhaps half-jokingly, whether he should enter the House of Representatives or Parliament. Blaine said blithely, “If you take a seat in the House of Commons, you will be a greater man in the United States, but, if you enter the House in Washington, you will be a greater man in England.” Considering he was a former Speaker of the House and now secretary of state, he certainly knew. Vanity swelling, Carnegie started fanning rumors of political aspirations; he told a friend that the American minister to Britain “had heard I intended to enter public life in England & sometimes I feel it is my mission to do so—but only to give my native land some of the political justice enjoyed by my adopted one.”5
Any political aspirations were halfhearted, and within a year of founding the newspaper syndicate Carnegie was as concerned with the financial position as the editorial content. In a January 3, 1883, letter to Storey, he recommended higher advertising rates to boost revenue and also said he wanted far more effort put into increasing circulation: “Nothing should be omitted to give it circulation. Money no object as compared with power.” On the political front, his primary goal for the newspapers was to exert pressure on Parliament to extend the franchise, because in his idealistic world the right to vote was the ultimate power. “I hope you are to be found in the front charging solidly for that one thing—extended franchise. . . .,” he exhorted Storey. “I am going out of business but it takes a little more time than I bargained for— that’s all. Then I want more papers, so look about you for another at Portsmouth. I’ll have ready cash some day you know!”6