Carnegie

by Peter Krass

  Carnegie also dashed off a last note to Morley, full of hope and inspiration: “I told our Ambr. I’d go only if H.M. [the kaiser] really wished the interview after my speech putting the Peace of Nations on him. He really is responsible. No other man has the power to draw a League of Nations competent to keep the peace for an agreed upon period just as an experiment. . . . Fortunately, he’s very devout—very. He sent me his address to his son upon his Consecration & it wouldn’t discredit a Holy Father of the Catholic Church. Well, never was a holy Father more convinced of his Mission than I am of mine. I know I offer H.I.M. the plan that makes him the greatest agent known so far in human history. The Peace Maker.”7 Unfortunately, the Catholic Church had been responsible for more than a few wars over the centuries, so being a devout Catholic promised nothing in terms of peace. And Morley was highly skeptical that Carnegie, whose tone was becoming ever more righteous, would accomplish anything positive: “How interesting it will be. That you can inflame him with your own Crusader’s Zeal, I am not sure. But the effort is noble.”8

  Once they arrived in the seaport of Kiel, Ambassador Tower accompanied the Carnegies to the emperor’s yacht, which had been made available to them. Carnegie and Louise were introduced to various admirals and dignitaries, and were deep in conversation when the emperor unexpectedly approached from behind. Tower tapped Carnegie on the shoulder. “Mr. Carnegie, the Emperor.”

  Carnegie raised both hands in delight and exclaimed with a hint of condescension, “Your Majesty, I have traveled two nights to accept your generous invitation, and never did so before to meet a crowned head.”

  “Oh! yes, yes, I have read your books. You do not like kings.”

  “No, Your Majesty, I do not like kings, but I do like a man behind a king when I find him.”

  That evening Carnegie sat opposite the emperor at a dinner attended by sixty guests. It was difficult for Carnegie to indulge in any meaningful discourse, but when he mentioned that Roosevelt wished he could leave the country to visit with His Majesty, it elicited a positive response from the kaiser, who thought it would be quite enjoyable. “Well, Your Majesty, when you two do get together, I think I shall have to be with you. You and he, I fear, might get into mischief.” Carnegie then told Wilhelm he would like to see Roosevelt and him hitched together in the cause of peace.

  “Oh, I see!” the kaiser said. “You wish to drive us together. Well, I agree if you make Roosevelt the first horse, I shall follow.”

  “No, Your Majesty, I know horse-flesh better than to attempt to drive such gay colts tandem. You never get proper purchase on the first horse. I must yoke you both in the shafts, neck and neck, so I can hold you in.”9

  On departing Kiel, Carnegie wanted to believe the emperor was anxious for peace, that he cherished the fact he had reigned for twenty-four years without shedding a drop of German blood. After all, the forty-eight-year-old Wil-helm II had been very polished, dressed in a military parade uniform and sporting a trim mustache curled gently at the ends, and he was the grandson of the late Queen Victoria—why would he desire war with Britain? “I had three interviews with the German Emperor and dined with him twice—a wonderful man, so bright, humorous, and with a sweet smile,” he wrote St. Andrews principal James Donaldson. “I think he can be trusted and declares himself for peace.”10 To Richard Watson Gilder, he effused: “Our visit to the Emperor was a decided success. He’s a rare man, as free and informal as the President; chuck full of fun. Very engaging smile—very; can’t help liking him.”11 Charm could easily sway Carnegie, and the emperor could be exceedingly charming.

  Carnegie was not completely fooled. While telling everyone his détente had been a success (because it had to be), he had recognized the kaiser’s warlike traits. He wrote a lengthy letter to the German chancellor Prince von Bülow, pleading that Germany should adopt every means possible “to show the people of Britain, as distinguished from the official classes, Naval and Military, that Germany is anxiously desirous of bringing about, as occasion may serve, a reign of peace among nations, and that she has no warlike policy at heart.” Carnegie also wrote Germany’s ambassador to Washington, Speck von Sternburg: “Knowing you enjoy his [the emperor’s] confidence I write freely to you. Let me say, therefore, that, as you know, I feel that His Majesty has the greatest mission ever entrusted to man. Something tells me he will sooner or later fulfill his destiny and become the world’s peace-maker.”12 Applying pressure from all points, he hoped one of these men would talk some sense into the emperor. The need to do so became far more imperative with the failure of the second Hague Conference to yield any tangible results beyond such mild declarations as agreeing not to drop projectiles from balloons in times of war. Even the establishment of the court of arbitration at The Hague was thrown into doubt.

  British and American diplomats blamed the Germans for blocking any progress, criticism the Germans resented and that only served to increase tensions. Carnegie had accepted that disarmament was a futile cause, but arbitration was a must. How could the court of arbitration be in doubt when he was building a temple of peace? Arbitration, an international police force, a league of peace—all these grand visions seemed to be fading fast.

  Secretary of State Elihu Root did attempt to salvage the conference by suggesting all participants negotiate separate treaties with one another since a general arbitration and armament treaty was out of the question. This was a cause Carnegie would take up with gusto, but not until Roosevelt was out of the picture.

  Roosevelt was too militaristic for Carnegie’s tastes, a characteristic that was confirmed in November 1907 when the president reneged on his promise to not increase naval forces to meet what he perceived to be rising German and Japanese threats. When word reached Carnegie, he cabled immediately. “You stand before the world today committed to the policy of only maintaining efficiently the present number of ships in the navy, the only ruler of a great nation who has ever reacht this height . . .,” he praised, hoping to change the president’s mind. “Pause and reflect how the world will regard and bemoan your sudden change into the ruler reversing his policy and asking the most unexpected increase. Why? Why? Verily, the question needs your most serious attention.”13

  A short-tempered Roosevelt’s response was impenitent: “I shall recommend an increase in the navy. I shall urge it strongly as I know how. I believe that every far sighted and patriotic man ought to stand by me. . . . You say the question needs my serious attention. It has had it, and, as I say, I cannot imagine how anyone . . . can fail to back me up.”14

  Carnegie, however, did fail to back him up. Hoping a face-to-face meeting might convince the president to change course, Carnegie went to Washington during Thanksgiving week, but Roosevelt was adamant. A second meeting on December 9 also proved fruitless. Eventually, the hardened president was forced to rebuke Carnegie over his view that Japan was not a reason to increase the U.S. Navy’s size. “My dear sir,” Roosevelt wrote in exasperation, “it would be the very highest unwisdom for us to act on the belief that you so lightly express that ‘Japan is really a negligible quantity.’”15

  When Roosevelt announced he would not run for reelection that December, Carnegie greeted it with mixed feelings: “Sorry for my country that you are not to be at the helm for some years more during which I am confident you would have secured for the Republic the reforms essential for her welfare. You have done the preparatory work which only needs continued attention to give us a prouder position than hitherto occupied in some departments.”16 Carnegie had appreciated the progressive’s reform measures; but, as he hinted in the letter, Roosevelt’s work was merely preparatory, a subtle jab that he had accomplished little in the way of definitive reforms—at least according to Carnegie’s agenda. But with Roosevelt’s announced departure from politics and detrimental economic conditions plaguing the great Republic, Carnegie actually evolved into a progressive reformer.

  Anarchy now ruled New York. After the financial panic in October 1907, an economic dow
nturn choked the city. The “industrial paralysis and prostration,” contended the Commercial and Financial Chronicle, was “the very worst ever experienced in the country’s history.”17 The breadlines were longer than ever. The socialists were marching in the streets. Failed assassin Alexander Berkman was out of prison and a favored speaker at labor protests. And Morgan, the man who imposed order on the financial markets, was accused of orchestrating the chaos for his own benefit. (For the record, Morgan’s American firms lost $21 million in 1907.)

  Carnegie’s old partners suffered, too. He received a pathetic letter from Jane Fleming Lovejoy, the wife of one his favorite partners who had nobly resigned during the Frick conflict rather than pick sides. Her husband had made ill-advised investments out West and was now faced with bankruptcy, she explained, surely to be followed by unpleasant press, as such circumstances did for all old Carnegie associates. She pleaded with Carnegie to buy their property for $550,000 (he already held the mortgage of $125,000) for the sake of her own children.18 His response is unknown. But for certain, economically and politically, it was a dark winter.

  The failure of both The Hague Peace Conference and the U.S. banking system forced Carnegie to look inward; in April, he actually went to church for the first time in years.19 He considered how he reflected the failures and how they reflected him. A round of self-analysis would lead to the self-admission that the United States—for all its high and mighty ideals—was fallible and to a momentous change in Carnegie that was not evolutionary, but revolutionary. He removed his rose-colored glasses. He transformed from a Republican who worshipped free enterprise blindly to a critical Roosevelt progressive.

  The metamorphosis took place in his Ninety-first Street study, where a haunting epigram hung above him: “All is well since all grows better.” The change manifested itself in a series of essays he wrote. Writing had always been a means of purging his anxieties and restless energies, and over the next months he expressed his evolving emotions in a surge of political and economic essays. First, he penned “The Worst Banking System in the World,” published in the February 29 issue of Outlook, in which he admitted the U.S. banking system was the most inferior in Western civilization. Once a devout laissez-faire capitalist, he was now not averse to the government guaranteeing individual’s deposits and creating a central bank. To promote his ideas, his contribution to the great banking debate from which would arise the Federal Reserve System, he had 70,500 reprints made of the essay and mailed them to every member of Congress, bank and manufacturer chiefs, and sundry men of importance. His friend Nicholas Butler, president of Columbia University, called it “a masterpiece.”20

  The second sign of his self-imposed revolution appeared in the March 1908 issue of Century Illustrated Monthly, which published Carnegie’s “My Experience with Railway Rates and Rebates.” He did indeed review his experience, and he complimented President Roosevelt for tackling the evil of preferential rates, but he failed to recall the rebates he had won from the Pennsylvania Railroad. The closest he came to outright self-condemnation was in writing: “The dead past is to bury its past. It is rapidly doing so.” Yes, he wanted it buried forever, entombed and forgotten. Yet the past was linked to Carnegie; he could not escape it. He had made millions due to rebates that now flowed into libraries, foundations, and trusts.

  The transformation from conservative Republican to a Roosevelt progressive continued with his most startling essay yet. In a second essay for Century Illustrated Monthly, “My Experience with, and Views upon, the Tariff,” he advocated the termination of the tariff for most imports, including steel. Carnegie acknowledged that having once been classified as a “robber tariff baron,” he would be accused of being a convert due to retirement from business, but he honestly believed it was time for change. The article was so inflammatory, especially since it was an election year, that the Century’s editor, Robert Underwood Johnson, who told Roosevelt it contained “campaign dynamite,” shared it with Roosevelt’s heir apparent, Secretary of War William Howard Taft, to ascertain if its publication should be postponed until after the election. Taft thought Carnegie’s essay would prove very useful in revising the tariff, but he worried “that some of his positions would be misunderstood or would be perverted in the campaign.”21 So the publication was postponed until December. True to the expectations, the reaction was indeed explosive. His moral rectitude smacked of rank hypocrisy and his pious remarks drew critical fire, especially from U.S. Steel officials.

  Carnegie’s antitariff position immediately attracted the attention of Congress, which assembled a Tariff Commission in December and requested his testimony. Knowing better, he declined in an act of civil disobedience—only to be served a subpoena by Sereno Payne, chairman of the House Ways and Means Committee. Carnegie protested: “I have been seven years out of the Steel business and have no detailed figures to give you, and I cannot be induced to enter into a Tariff controversy. All that I have to say upon the Tariff has been published in the Century Magazine and I beg to enclose a copy of the article.”22 To no avail. “Off for Washington tomorrow to answer Tariff Comm,” he wrote Dod on December 19. “They will get short responses. We are approaching great crisis in ‘Combination’ Monopoly vs. Competition.”23 To the contrary, Carnegie’s responses were anything but short, and Payne would come to regret the day he ordered the subpoena.

  These congressmen were toys to Carnegie, foils for his leading role, and the witness stand another stage. It was Chairman Payne who sweated while Carnegie entertained the audience with his wit. When Payne was finally able to ask about the tariff on steel, Carnegie unloaded a bomb. He explained that U.S. Steel could make a profit selling steel so cheap the tariff was moot; then, pointing at Payne, he brazenly mocked: “Does that enter into your brain? Can you arrive at any other conclusion than that the steel industry can stand on its own legs? . . . The time for free trade has come so far as steel is concerned. The total abolition of the tariff will leave the steel companies in a better position as far as this country is concerned, than a continuance of the present coddling system.”24

  Elbert H. Gary, chairman of U.S. Steel’s executive committee, was outraged when reports reached him about Carnegie’s call for the end of the steel tariff and wrote him a strongly worded letter of protest, charging him with diabolical hypocrisy. Having retired from a business in which he made millions because of the tariff, what right did he have to proclaim its obsolescence, thus possibly denying current and future generations of steelmakers from enjoying the same protection? An unapologetic Carnegie replied, “I am done now with the subject, having done my duty when subpoenaed. I told the truth—the whole truth as I know it.”25 It was no wonder Carnegie had had so many enemies in the steel industry.

  Agricultural leaders who had always despised the tariff because they believed it only served to fatten the wallets of their industrial brethren saluted Carnegie as a “powerful new champion of reform.”26 The champion of reform didn’t stop at the tariff in attacking the great industrial concerns.

  In March 1908, Roosevelt invited Carnegie to take an active part in the upcoming Conference on the Conservation of Natural Resources. He agreed, and at the May conference he delivered a paper titled “The Conservation of Ores and Related Minerals.” It amounted to a condemnation of how he had conducted business for twenty-five years. Using an arsenal of facts, he vividly illustrated how the country’s ore, coal, and other natural resources had been and were being wastefully exploited and consumed. “The same spirit of recklessness that leads to waste in mining and in the consumption of coal leads to unnecessary risk of human life,” he continued. “During the year 1907 in the United States the killed and wounded in coal mining operations exceeded 9,000.” In his contrite evaluation, he concluded that conservation of human and natural resources was the only course, predicting that “the most useful minerals will shortly become scarce and may soon reach prohibitive cost unless steps to lessen waste are taken in the interest of the future.”27 Never had Carne
gie demonstrated such concern for Frick Coke laborers or his own in steel; as a ravenous industrialist, he had ravaged iron ore, coal, and lime. Now, however, like a reborn Christian full of righteous piety, he spewed forth his new gospel—and the likes of Morgan and Frick cringed.

  The transformation was complete when he wrote a glowing introduction to The Roosevelt Policy, a two-volume collection of the president’s letters, speeches, and papers. The fact that if Carnegie was still in business, his profuse tribute to Roosevelt would be considered an enormous conflict of interest—along the lines of a Southern plantation owner applauding Lincoln— was not lost on reviewers. “At first sight it seems a little odd that this book,” wrote the reviewer for the Times Literary Supplement, “which attacks the undue concentration of wealth, and has many severe things to say about ‘swollen fortunes’ should be sent into the world with an introductory benediction from one of the two richest men in America. But Mr. Andrew Carnegie, as we all know, has always been ‘on the side of angels’ and the reformers, and this is not the first time he has come forward as a Roosevelt man.”28 As for Roosevelt, even though he made disparaging remarks about Carnegie’s peace initiatives, he undoubtedly welcomed the introduction because it guaranteed sales to thousands of libraries.