Carnegie

by Peter Krass

  For the next ten years, Carnegie’s Scottish home was at Cluny, and because he despised hereditary privilege, it gave the Star-Spangled Scotchman great pleasure to be leasing the historic castle. Like his boyhood hero William Wallace, he had risen from the commoners to an exulted rank and was intent on flaunting it. But some of the more critical American newspapers questioned Carnegie’s extended sojourns as well as his patriotism, and argued that he should be spending his money in America, where he made it. Nonplussed, Carnegie responded while making a speech in Inverness, Scotland: “The exile may be excused if his fondness for his native land knows no bounds. Scotland was to me the land of childhood, the fairyland. Here I have never known labor nor struggle, nor any of the trials—the invigorating trials—of life; nor sorrow, nor pain; and across the Atlantic, amid the early struggles— the fierce struggles for success—amid all my cares and throughout every weary hour, there shone upon my path, shedding its beams of poetry and romance, the resplendent star of Scotland. Return to Scotland was ever to me the prize of life.”41 The polemic Carnegie could be quite poetic.

  Any critic who questioned Carnegie’s interest in his adopted country, the United States, was silenced during the presidential election of 1888. This year marked Carnegie’s entry onto America’s political stage with the same fervor he had brought to British politics during his involvement with the newspaper syndicate.

  Notes

  1. Matthew Arnold to AC, July 7, 1886, ACNYPL.

  2. Matthew Arnold to his sister, July 26, 1886, quoted in Hendrick, Carnegie, vol. 1, p. 248.

  3. AC to Louise Whitfield, July 22, 1886, quoted in Hendrick and Henderson, pp. 76–77.

  4. AC to Louise Whitfield, September 23, 1886, quoted in Wall, Carnegie, p. 416.

  5. AC to Louise Whitfield, n.d., quoted in Hendrick and Henderson, p. 79.

  6. See statement of Carnegie Brothers and Company, April 1, 1881, ACLOC, vol. 5; and Carnegie, Phipps and Company, Articles of Association, January 1, 1886, ACLOC, vol. 8.

  7. Burton J. Hendrick interview with John Walker, n.d., ACLOC, vol. 239.

  8. Charles T. O. Mackie to AC, October 29, 1886, ACWPHS, Letterbook, 1885–1887.

  9. Hendrick, Carnegie, vol. 1, p. 254.

  10. Louise Whitfield, diary entry, n.d., quoted in Hendrick and Henderson, p. 80.

  11. Aunt Aitken to Rachel Pattison, 1887, ACNYPL.

  12. Carnegie, Autobiography, p. 204.

  13. Hendrick and Henderson, p. 53.

  14. AC to Louise Whitfield, November 24, 1886, quoted in Wall, Carnegie, p. 419.

  15. AC to Louise Whitfield, n.d., quoted in Hendrick and Henderson, p. 80.

  16. AC to Louise Whitfield, n.d., quoted in Hendrick and Henderson, p. 81.

  17. AC to Louise Whitfield, December 2, 1886, quoted in Hendrick and Henderson, p. 81.

  18. Frederic S. Dennis to Mr. Moore, January 22, 1887, ACWPHS, General Correspondence, ser. 1, subser. 1–2.

  19. See Iron Clad Agreement, ACLOC, vol. 10.

  20. AC to C. P. Huntington, April 2, 1887, ACWPHS, Letterbook, 1887–1888.

  21. Walt Whitman to R.W.G., April 20, 1887, ACNYPL.

  22. AC to Charles Eaton, April 16, 1887, quoted in Wall, Carnegie, p. 420.

  23. Marriage settlement, April 22, 1887, quoted in Hendrick and Henderson, pp. 86–87.

  24. See Trial Balance, April 30, 1887, ACWPHS, Box 20, Folder 4.

  25. Louise Carnegie to Mrs. Whitfield, n.d., quoted in Hendrick and Henderson, p. 90.

  26. Jno. G. MacConnell to Samuel Storey, May 25, 1887, ACLOC, vol. 10.

  27. AC to Lord Rosebery, May 24, 1887, ACLOC, vol. 10.

  28. Louise Carnegie to Mrs. Whitfield, June 10, 1887, quoted in Hendrick and Henderson, p. 94.

  29. Louise Carnegie to Mrs. Whitfield, July 10, 1887, quoted in Hendrick and Henderson, p. 99.

  30. William Roscoe Thayer, The Life and Letters of John Hay, vol. 2 (Boston: Houghton Mifflin, 1915), p. 74.

  31. Mrs. James G. Blaine to Emmons Blaine, quoted in Hendrick, Carnegie, vol. 1, p. 317.

  32. Louise Carnegie to Mrs. Whitfield, July 17, 1887, quoted in Hendrick and Henderson, pp. 101–102.

  33. Hendrick and Henderson, pp. 118–119.

  34. Ibid., pp. 117–118.

  35. Ibid., p. 119.

  36. AC to William L. Abbott, July 25, 1888, ACLOC, vol. 10.

  37. Hendrick and Henderson, pp. 128–129.

  38. Herbert Spencer to AC, August 10, 1888, ACNYPL.

  39. Hendrick and Henderson, p. 127.

  40. See AC to William L. Abbott, July 4, 1888, ACLOC, vol. 10, quoted in Hendrick and Henderson, pp. 123–124.

  41. Quoted in Hendrick, Carnegie, vol. 1, p. 324.

  CHAPTER 18

  Gospel of Conscience

  Carnegie’s political and social agenda had been confined mostly to Britain until he sold his newspaper interests and President Grover Cleveland made noise about lowering the protective tariff. In 1887, Cleveland, who believed it was time to stop passing along government privileges to businessmen in protected or favored industries, was urging the reduction of tariff levels to save American consumers money. Fortunately for Carnegie, the president left it to Congress to reform the tariff, and his initiative sank in a legislative quagmire. Overall, Cleveland took a laissez-faire approach to big business, accepting the day’s conventional wisdom that individual economic freedom equated to national economic progress. Regardless, Carnegie was wary of another four years with the Democrats ruling the capital and desired the business-friendly Republicans back in office. So, during the 1888 election campaign, he threw his full weight behind Benjamin Harrison, as did Matthew Quay, a powerful Pennsylvania senator who was named campaign chairman, and John Wanamaker, the retail genius, who headed Harrison’s campaign finance committee.

  Carnegie’s fellow Republicans were not choirboys, which reflected poorly on his own character. Quay was known to take stock in companies for favors, and it was said he knew how “to keep silent in sixteen different languages”— just the kind of man Carnegie could appreciate—and, needless to say (but said anyway), the campaign was highly funded by powerful businessmen for whom Wanamaker later secured favors.1 One wide-girthed pipeline for funds was provided by James M. Swank, the hardheaded, Scotch-Irish chief of the American Iron and Steel Association. Since the 1870s, he had lobbied Congress for protective tariffs on behalf of clients like Carnegie and now provided Harrison, who promised aggressive tariff protection, with a bottomless bucket of funds. Some of the money was used in voter-fraud schemes engineered by Quay in Pennsylvania and New York.2 The Democrats were guilty of fraud, too; it just boiled down to who was willing to pay the most. How much money was donated to Harrison and how much was spent where will never be known, for Quay and Wanamaker wisely destroyed their campaign records. Nevertheless, cash was king, with Harrison winning the Electoral College while Cleveland won the popular vote.3

  Back at their New York home on Fifty-first Street, where the painters had their oil pots in every room, putting the finishing touches on the redecorated house, Carnegie at once congratulated Harrison, who responded with “sincere thanks for your friendly words and for your manifested interest in the campaign.”4 Yes, Carnegie’s interest had been most manifest. Harrison was the first president for whom big business was particularly active in winning the election, demonstrating that the new industrialized order with Carnegie as one of its leaders now ruled American politics on a national scale. Harrison was going to have to contend with the many problems presented by this new industrialized and urbanized America.

  In his final message to Congress, in December 1888, Cleveland warned that government had best be wary of showing favor to big business in the Gilded Age or soon all would be slave to the corporation. “The gulf between employers and the employed is constantly widening,” he observed, “and classes are rapidly forming, one comprising the very rich and powerful, while in the other are found the toiling poor. As we view the achievements of aggregated capi
tal, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully-restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”5 Carnegie had no interest in being a “carefully-restrained creature;” however, public opinion did have a profound impact on him.

  During the election campaign, caricaturists had a field day with Carnegie and the other industrialists. The enormous wealth of the men now dubbed robber tariff barons, or more commonly just robber barons, the promise of protection against foreign manufacturers, the generous campaign contributions to Harrison, and the relentless oppression of labor made for a plethora of material. In Puck magazine’s May 1888 edition, there was a widely reprinted cartoon depicting Carnegie in a Highland kilt, hauling a sack labeled “Annual Personal Profits from the Poorly Protected Edgar Thomson Iron Works $1,500,000,” which he is about to hand over to James Blaine (who would be appointed Harrison’s secretary of state), standing in the doorway of the “High Protection Mill” and rubbing his hands gleefully. The cartoons, as well as song parodies that were circulating, effectively stirred public sentiment against Carnegie and his fellow robber barons, a term he despised.

  Fond of applause, Carnegie hardly wanted to be considered a descendent of the medieval feudal lords who engaged in the wanton plundering of their people and land; but in the 1880s, that was the term applied to the powerful industrialists who, in the eyes of many, were exploiting labor and land. The protective tariff Harrison promised, critics argued, was no different than the medieval robber barons’ net strung across the Rhein River to capture and pillage the traders’ boats filled with goods from other lands; the protection gave them free reign in their own territory. Such an association was distasteful to the Star-Spangled Scotchman, who desired to be regarded as a chief builder of the great Republic, as a progressive leader of a great industrial state. But, as Carnegie sat in his spacious library, looking over his personal ledger of assets amounting to almost $15 million, it dawned on him that perhaps he was a gorged monopolist who needed a dose of tariff reform, or a dose of something—but what?6

  Carnegie’s thoughts drifted back to 1868 when unbeknownst to others, he had written, “Thirty three and an income of 50,000$ per annum. . . . Beyond this never earn—make no effort to increase fortune, but spend the surplus each year for benevolent purposes.” It was a heartfelt, honest statement of values, as was a statement he made to Gladstone in June 1887 that he “considered it disgraceful to die a rich man.” It was time to be more proactive in beneficence, it was time to take his 1887 statement to Gladstone and use it as a cornerstone around which to construct a logical philosophy on philanthropy. As Carnegie mulled over the matter, his shrewd mind understood that while he would be giving away money, his philanthropy would yield other rewards, such as the respect, power, and glorification he so desired. His benevolence would serve many purposes, including a means to justify and define his existence.

  “Half the people of the world are ambitious and seek their happiness in attaining honors,” wrote Napoléon. “The love of glory makes them desire positions of power, and take perilous risks, finding themselves enticed by this power of command.”7 So it was with Carnegie, who passed to his newspaper partner Storey these words: “Money no object compared to power.” Money had bought Harrison the presidency, had bought the life of royalty at Cluny Castle, and had bought influence in the House of Lords. If Carnegie had read Machiavelli’s Prince, however, he would have done well to recall the warning, “Those who rise from private citizens to be princes merely by fortune have little trouble in rising but very much in maintaining their position.”8

  To date, his major philanthropic projects had included either the establishment of or a commitment to fund libraries at Dunfermline, Edinburgh, Allegheny, and Braddock; the building of the Dunfermline baths; and the funding of a research laboratory at Bellevue Hospital. The giving was notable, but not substantial compared with John Jacob Astor, who, in 1849, had left $500,000 for the Astor Library; or Matthew Vassar, Ezra Cornell, and Leland Stanford, who had founded universities; or the venerable New Yorker Peter Cooper, who had given away some $2 million for public good by 1883, the year he died. Cooper had been and was still a most respected man, a man to emulate, as was his protégé Abram Hewitt. Elected mayor of New York in 1886, Hewitt pushed for public parks, baths, and recreational facilities. It saddened him to report, “On the east side of the city there are boys between seventeen and eighteen who amuse themselves by shooting policemen.”9

  Carnegie was well acquainted with both Cooper and Hewitt, who had made fortunes in the iron industry, among other ventures. Cooper’s major philanthropic project was the founding of Cooper Union, the first free adult education school to give the working people training he had never had.10 He believed intelligence to be the individual’s great contribution to civilization, so he wanted more than just a vocational school; he wanted a school that balanced the study of the natural and social sciences with the arts. The stone-and-brick building housed classrooms, exhibition and lecture rooms, a library, artist studios, a laboratory, and an observatory on the top level. Included in the annual budget was $500 to be given to a woman who exhibited great heroism or sacrifice for humanity. By the time Cooper Union opened in May 1858, Cooper had contributed $630,000.

  Cooper was not afraid to preach his philosophy. In a well-recounted 1871 address to Cooper Union students, he said, “I cannot shut my eyes to the fact that the production of wealth is not the work of any one man and the acquisition of great fortunes is not possible without the cooperation of multitudes of men; and that therefore the individuals to whose lot these fortunes fall . . . should never lose sight of the fact that they hold them by the will of society expressed in statute law, so they should administer them as trustees for the benefit of society as inculcated by the moral law.”11 These words had a profound impact on Carnegie; as his own ideas became more cohesive on philanthropy, he borrowed directly from Cooper’s. Like his model, Carnegie was not afraid to speak his mind, and he now decided it was time to silence the critics who branded him a robber baron.

  Carnegie sat behind his library desk, his personal secretary at his side, and in early 1889 penned an essay that would rattle the moneyed roosts more than his 1886 labor essays and deflect the criticism aimed at his wealth. A consolidation of three rooms, the library was the most spacious room in their Fifty-first Street home, taking up the entire front side of the second floor. It was his sanctum for both directing war and meditation. In fact, over the same days he was working on his philanthropic philosophy, he was plotting with lieutenants to force lower wages on the Homestead men—a dichotomy of character that maddened those who contemplated it. In one breath he was telling his lieutenants to slash wages, and in the next he was writing a bold opening to his essay: “The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and poor in harmonious relationship.” His treatise on philanthropy was published under the title of “Wealth” in the June 1889 issue of the North American Review. Up to that time, Carnegie had been renowned as an iron and steel magnate who epitomized the Horatio Alger rags-to-riches story, but beyond that, the American public was ignorant to any greater Carnegie agenda. Now, before them, he laid out a bold and systematic philosophy for distributing wealth based on a set of values he thought best.

  Although the essay was on giving, Carnegie felt compelled first to defend the accumulation of money that was so vigorously being lampooned and criticized. What amounted to a large class gap was acceptable to Carnegie, a given of progress. “It is a waste of time to criticize the inevitable,” he concluded, and further justified the concentration of wealth in the hands of the few by stating matter-of-factly that talent is rare, as “proved by the fact that it invariably secures enormous rewards for its possessor, no matter where or under what l
aws or conditions.” Spencer’s voice resonated in this essay, as did Calvin’s: the blessed were naturally rewarded.

  While the first part of Carnegie’s essay justified the individual’s accumulation of wealth, the second part addressed the question of what to do with the accumulated wealth. He decreed that there were “three modes” for disposing of wealth: leave it to the family; bequeath it for public purposes; and administer it before dying. In evaluating each mode, he quickly dismissed the first as “the most injudicious.” Carnegie considered leaving large inheritances to children “misguided affection” that amounted to a curse. (The inheritance tax existed in only six states in 1890, so it was not much of a motivator for dispersing wealth prior to death.) As for the second mode, he believed that many postmortem public bequests “become only monuments of his [the giver’s] folly.” As a prime example, Carnegie pointed to Samuel Tilden, who bequeathed a share of his estate to a trust to establish and maintain a public library in New York (reportedly $5 million), only to have his family contest his will and tie the money up in court. Not until 1901 would the fruits be realized, when $2,250,000 from the Tilden Trust, amalgamated with the Astor and Lenox Libraries, was used to form the grand New York Public Library on Fifth Avenue. Spicing the essay with a bit of humor, Carnegie concluded his evaluation of the second mode by stating, “Men who leave vast sums in this way may fairly be thought men who would not have left it at all had they been able to take it with them.”

  The only mode for dispersing fortunes acceptable to Carnegie was for the possessor to take on the responsibility—before departing for the hereafter. He was also convinced that “wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if distributed in small sums to the people themselves.” By small sums, he meant wages, which, he felt, “would have been wasted in the indulgence of appetite, some of it in excess, and it may be doubted whether even the part put to the best use, that of adding to the comforts of the home, would have yielded results for the race, as a race.” Carnegie spoke as though he and other men of capital had been called upon to decide the fate of the people in every aspect. It didn’t matter that people were living in slums without plumbing and sewers and might have used the money to better themselves; he didn’t give them the benefit of the doubt. He should have. The wives of the laborers were frugal and budget conscious, just as Margaret Carnegie had been, for they, too, wanted a better life for their children. It didn’t take exceptional talent to understand there was a better life than that in the tenement.