Autobiography of Andrew Carnegie

Our strict system of accounting enabled us to detect the great waste possible in heating large masses of iron. This improvement revealed to us a valuable man in a clerk, William Borntraeger, a distant relative of Mr. Kloman, who came from Germany. He surprised us one day by presenting a detailed statement showing results for a period, which seemed incredible. All the needed labor in preparing this statement he had performed at night unasked and unknown to us. The form adapted was uniquely original. Needless to say, William soon became superintendent of the works and later a partner, and the poor German lad died a millionaire. He well deserved his fortune.

It was in 1862 that the great oil wells of Pennsylvania attracted attention. My friend Mr. William Coleman, whose daughter became, at a later date, my sister-in-law, was deeply interested in the discovery, and nothing would do but that I should take a trip with him to the oil regions. It was a most interesting excursion. There had been a rush to the oil fields and the influx was so great that it was impossible for all to obtain shelter. This, however, to the class of men who flocked thither, was but a slight drawback. A few hours sufficed to knock up a shanty, and it was surprising in how short a time they were able to surround themselves with many of the comforts of life. They were men above the average, men who had saved considerable sums and were able to venture something in the search for fortune.

What surprised me was the good humor which prevailed everywhere. It was a vast picnic, full of amusing incidents. Everybody was in high glee; fortunes were supposedly within reach; everything was booming. On the tops of the derricks floated flags on which strange mottoes were displayed. I remember looking down toward the river and seeing two men working their treadles boring for oil upon the banks of the stream, and inscribed upon their flag was "Hell or China." They were going down, no matter how far.

The adaptability of the American was never better displayed than in this region. Order was soon evolved out of chaos. When we visited the place not long after we were serenaded by a brass band the players of which were made up of the new inhabitants along the creek. It would be safe to wager that a thousand Americans in a new land would organize themselves, establish schools, churches, newspapers, and brass bands—in short, provide themselves with all the appliances of civilization—and go ahead developing their country before an equal number of British would have discovered who among them was the highest in hereditary rank and had the best claims to leadership owing to his grandfather. There is but one rule among Americans—the tools to those who can use them.

To-day Oil Creek is a town of many thousand inhabitants, as is also Titusville at the other end of the creek. The district which began by furnishing a few barrels of oil every season, gathered with blankets from the surface of the creek by the Seneca Indians, has now several towns and refineries, with millions of dollars of capital. In those early days all the arrangements were of the crudest character. When the oil was obtained it was run into flat-bottomed boats which leaked badly. Water ran into the boats and the oil overflowed into the river. The creek was dammed at various places, and upon a stipulated day and hour the dams were opened and upon the flood the oil boats floated to the Allegheny River, and thence to Pittsburgh.

In this way not only the creek, but the Allegheny River, became literally covered with oil. The loss involved in transportation to Pittsburgh was estimated at fully a third of the total quantity, and before the oil boats started it is safe to say that another third was lost by leakage. The oil gathered by the Indians in the early days was bottled in Pittsburgh and sold at high prices as medicine—a dollar for a small vial. It had general reputation as a sure cure for rheumatic tendencies. As it became plentiful and cheap its virtues vanished. What fools we mortals be!

The most celebrated wells were upon the Storey farm. Upon these we obtained an option of purchase for forty thousand dollars. We bought them. Mr. Coleman, ever ready at suggestion, proposed to make a lake of oil by excavating a pool sufficient to hold a hundred thousand barrels (the waste to be made good every day by running streams of oil into it), and to hold it for the not far distant day when, as we then expected, the oil supply would cease. This was promptly acted upon, but after losing many thousands of barrels waiting for the expected day (which has not yet arrived) we abandoned the reserve. Coleman predicted that when the supply stopped, oil would bring ten dollars a barrel and therefore we would have a million dollars worth in the lake. We did not think then of Nature's storehouse below which still keeps on yielding many thousands of barrels per day without apparent exhaustion.

This forty-thousand-dollar investment proved for us the best of all so far. The revenues from it came at the most opportune time.28 The building of the new mill in Pittsburgh required not only all the capital we could gather, but the use of our credit, which I consider, looking backward, was remarkably good for young men.

Having become interested in this oil venture, I made several excursions to the district and also, in 1864, to an oil field in Ohio where a great well had been struck which yielded a peculiar quality of oil well fitted for lubricating purposes. My journey thither with Mr. Coleman and Mr. David Ritchie was one of the strangest experiences I ever had. We left the railway line some hundreds of miles from Pittsburgh and plunged through a sparsely inhabited district to the waters of Duck Creek to see the monster well. We bought it before leaving.

It was upon our return that adventures began. The weather had been fine and the roads quite passable during our journey thither, but rain had set in during our stay. We started back in our wagon, but before going far fell into difficulties. The road had become a mass of soft, tenacious mud and our wagon labored fearfully. The rain fell in torrents, and it soon became evident that we were in for a night of it. Mr. Coleman lay at full length on one side of the wagon, and Mr. Ritchie on the other, and I, being then very thin, weighing not much more than a hundred pounds, was nicely sandwiched between the two portly gentlemen. Every now and then the wagon proceeded a few feet heaving up and down in the most outrageous manner, and finally sticking fast. In this fashion we passed the night. There was in front a seat across the wagon, under which we got our heads, and in spite of our condition the night was spent in uproarious merriment.

By the next night we succeeded in reaching a country town in the worst possible plight. We saw the little frame church of the town lighted and heard the bell ringing. We had just reached our tavern when a committee appeared stating that they had been waiting for us and that the congregation was assembled. It appears that a noted exhorter had been expected who had no doubt been delayed as we had been. I was taken for the absentee minister and asked how soon I would be ready to accompany them to the meeting-house. I was almost prepared with my companions to carry out the joke (we were in for fun), but I found I was too exhausted with fatigue to attempt it. I had never before come so near occupying a pulpit.

My investments now began to require so much of my personal attention that I resolved to leave the service of the railway company and devote myself exclusively to my own affairs. I had been honored a short time before this decision by being called by President Thomson to Philadelphia. He desired to promote me to the office of assistant general superintendent with headquarters at Altoona under Mr. Lewis. I declined, telling him that I had decided to give up the railroad service altogether, that I was determined to make a fortune and I saw no means of doing this honestly at any salary the railroad company could afford to give, and I would not do it by indirection. When I lay down at night I was going to get a verdict of approval from the highest of all tribunals, the judge within.

I repeated this in my parting letter to President Thomson, who warmly congratulated me upon it in his letter of reply. I resigned my position March 28, 1865, and received from the men on the railway a gold watch. This and Mr. Thomson's letter I treasure among my most precious mementos.

The following letter was written to the men on the Division:

Pennsylvania Railroad CompanySuperintendent's Office, Pittsburgh DivisionPittsburgh, March 28, 1865

To the Officers and Employees of the Pittsburgh Division

Gentlemen:

I cannot allow my connection with you to cease without some expression of the deep regret felt at parting.

Twelve years of pleasant intercourse have served to inspire feelings of personal regard for those who have so faithfully labored with me in the service of the Company. The coming change is painful only as I reflect that in consequence thereof I am not to be in the future, as in the past, intimately associated with you and with many others in the various departments, who have through business intercourse, become my personal friends. I assure you although the official relations hitherto existing between us must soon close, I can never fail to feel and evince the liveliest interest in the welfare of such as have been identified with the Pittsburgh Division in times past, and who are, I trust, for many years to come to contribute to the success of the Pennsylvania Railroad Company, and share in its justly deserved prosperity.

Thanking you most sincerely for the uniform kindness shown toward me, for your zealous efforts made at all times to meet my wishes, and asking for my successor similar support at your hands, I bid you all farewell.

Very respectfully(Signed) Andrew Carnegie

Thenceforth I never worked for a salary. A man must necessarily occupy a narrow field who is at the beck and call of others. Even if he becomes president of a great corporation he is hardly his own master, unless he holds control of the stock. The ablest presidents are hampered by boards of directors and shareholders, who can know but little of the business. But I am glad to say that among my best friends to-day are those with whom I labored in the service of the Pennsylvania Railroad Company.

In the year 1867, Mr. Phipps, Mr. J.W. Vandevort, and myself revisited Europe, traveling extensively through England and Scotland, and made the tour of the Continent. "Vandy" had become my closest companion. We had both been fired by reading Bayard Taylor's "Views Afoot." It was in the days of the oil excitement and shares were going up like rockets. One Sunday, lying in the grass, I said to "Vandy":

"If you could make three thousand dollars would you spend it in a tour through Europe with me?"

"Would a duck swim or an Irishman eat potatoes?" was his reply.

The sum was soon made in oil stock by the investment of a few hundred dollars which "Vandy" had saved. This was the beginning of our excursion. We asked my partner, Harry Phipps, who was by this time quite a capitalist, to join the party. We visited most of the capitals of Europe, and in all the enthusiasm of youth climbed every spire, slept on mountain-tops, and carried our luggage in knapsacks upon our backs. We ended our journey upon Vesuvius, where we resolved some day to go around the world.

This visit to Europe proved most instructive. Up to this time I had known nothing of painting or sculpture, but it was not long before I could classify the works of the great painters. One may not at the time justly appreciate the advantage he is receiving from examining the great masterpieces, but upon his return to America he will find himself unconsciously rejecting what before seemed truly beautiful, and judging productions which come before him by a new standard. That which is truly great has so impressed itself upon him that what is false or pretentious proves no longer attractive.

My visit to Europe also gave me my first great treat in music. The Handel Anniversary was then being celebrated at the Crystal Palace in London, and I had never up to that time, nor have I often since, felt the power and majesty of music in such high degree. What I heard at the Crystal Palace and what I subsequently heard on the Continent in the cathedrals, and at the opera, certainly enlarged my appreciation of music. At Rome the Pope's choir and the celebrations in the churches at Christmas and Easter furnished, as it were, a grand climax to the whole.

These visits to Europe were also of great service in a commercial sense. One has to get out of the swirl of the great Republic to form a just estimate of the velocity with which it spins. I felt that a manufacturing concern like ours could scarcely develop fast enough for the wants of the American people, but abroad nothing seemed to be going forward. If we excepted a few of the capitals of Europe, everything on the Continent seemed to be almost at a standstill, while the Republic represented throughout its entire extent such a scene as there must have been at the Tower of Babel, as pictured in the story-books—hundreds rushing to and fro, each more active than his neighbor, and all engaged in constructing the mighty edifice.

It was Cousin "Dod" (Mr. George Lauder) to whom we were indebted for a new development in our mill operations—the first of its kind in America. He it was who took our Mr. Coleman to Wigan in England and explained the process of washing and coking the dross from coal mines. Mr. Coleman had constantly been telling us how grand it would be to utilize what was then being thrown away at our mines, and was indeed an expense to dispose of. Our Cousin "Dod" was a mechanical engineer, educated under Lord Kelvin at Glasgow University, and as he corroborated all that Mr. Coleman stated, in December, 1871, I undertook to advance the capital to build works along the line of the Pennsylvania Railroad. Contracts for ten years were made with the leading coal companies for their dross and with the railway companies for transportation, and Mr. Lauder, who came to Pittsburgh and superintended the whole operation for years, began the construction of the first coal-washing machinery in America. He made a success of it—he never failed to do that in any mining or mechanical operation he undertook—and he soon cleared the cost of the works. No wonder that at a later date my partners desired to embrace the coke works in our general firm and thus capture not only these, but Lauder also. "Dod" had won his spurs.

The ovens were extended from time to time until we had five hundred of them, washing nearly fifteen hundred tons of coal daily. I confess I never pass these coal ovens at Larimer's Station without feeling that if he who makes two blades of grass grow where one grew before is a public benefactor and lays the race under obligation, those who produce superior coke from material that has been for all previous years thrown over the bank as worthless, have great cause for self-congratulation. It is fine to make something out of nothing; it is also something to be the first firm to do this upon our continent.

We had another valuable partner in a second cousin of mine, a son of Cousin Morrison of Dunfermline. Walking through the shops one day, the superintendent asked me if I knew I had a relative there who was proving an exceptional mechanic. I replied in the negative and asked that I might speak with him on our way around. We met. I asked his name.

"Morrison," was the reply, "son of Robert"—my cousin Bob.

"Well, how did you come here?"

"I thought we could better ourselves," he said.

"Who have you with you?"

"My wife," was the reply.

"Why didn't you come first to see your relative who might have been able to introduce you here?"

"Well, I didn't feel I needed help if I only got a chance."

There spoke the true Morrison, taught to depend on himself, and independent as Lucifer. Not long afterwards I heard of his promotion to the superintendency of our newly acquired works at Duquesne, and from that position he steadily marched upward. He is to-day a blooming, but still sensible, millionaire. We are all proud of Tom Morrison. [A note received from him yesterday invites Mrs. Carnegie and myself to be his guests during our coming visit of a few days at the annual celebration of the Carnegie Institute.]

I was always advising that our iron works should be extended and new developments made in connection with the manufacture of iron and steel, which I saw was only in its infancy. All apprehension of its future development was dispelled by the action of America with regard to the tariff upon foreign imports. It was clear to my mind that the Civil War had resulted in a fixed determination upon the part of the American people to build a nation within itself, independent of Europe in all things essential to its safety. America had been obliged to import all her steel of every form and most of the iron needed, Britain being the chief seller. The people demanded a home supply and Congress granted the manufacturers a tariff of twenty-eight per cent ad valorem on steel rails—the tariff then being equal to about twenty-eight dollars per ton. Rails were selling at about a hundred dollars per ton, and other rates in proportion.

Protection has played a great part in the development of manufacturing in the United States. Previous to the Civil War it was a party question, the South standing for free trade and regarding a tariff as favorable only to the North. The sympathy shown by the British Government for the Confederacy, culminating in the escape of the Alabama and other privateers to prey upon American commerce, aroused hostility against that Government, notwithstanding the majority of her common people favored the United States. The tariff became no longer a party question, but a national policy, approved by both parties. It had become a patriotic duty to develop vital resources. No less than ninety Northern Democrats in Congress, including the Speaker of the House, agreed upon that point.

Capital no longer hesitated to embark in manufacturing, confident as it was that the nation would protect it as long as necessary. Years after the war, demands for a reduction of the tariff arose and it was my lot to be drawn into the controversy. It was often charged that bribery of Congressmen by manufacturers was common. So far as I know there was no foundation for this. Certainly the manufacturers never raised any sums beyond those needed to maintain the Iron and Steel Association, a matter of a few thousand dollars per year. They did, however, subscribe freely to a campaign when the issue was Protection versus Free Trade.

The duties upon steel were successively reduced, with my cordial support, until the twenty-eight dollars duty on rails became only one fourth or seven dollars per ton. [To-day (1911) the duty is only about one half of that, and even that should go in the next revision.] The effort of President Cleveland to pass a more drastic new tariff was interesting. It cut too deep in many places and its passage would have injured more than one manufacture. I was called to Washington, and tried to modify and, as I believe, improve, the Wilson Bill. Senator Gorman, Democratic leader of the Senate, Governor Flower of New York, and a number of the ablest Democrats were as sound protectionists in moderation as I was. Several of these were disposed to oppose the Wilson Bill as being unnecessarily severe and certain to cripple some of our domestic industries. Senator Gorman said to me he wished as little as I did to injure any home producer, and he thought his colleagues had confidence in and would be guided by me as to iron and steel rates, provided that large reductions were made and that the Republican Senators would stand unitedly for a bill of that character. I remember his words, "I can afford to fight the President and beat him, but I can't afford to fight him and be beaten."

Governor Flower shared these views. There was little trouble in getting our party to agree to the large reductions I proposed. The Wilson-Gorman Tariff Bill was adopted. Meeting Senator Gorman later, he explained that he had to give way on cotton ties to secure several Southern Senators. Cotton ties had to be free. So tariff legislation goes.

I was not sufficiently prominent in manufacturing to take part in getting the tariff established immediately after the war, so it happened that my part has always been to favor reduction of duties, opposing extremes—the unreasonable protectionists who consider the higher the duties the better and declaim against any reduction, and the other extremists who denounce all duties and would adopt unrestrained free trade.

We could now (1907) abolish all duties upon steel and iron without injury, essential as these duties were at the beginning. Europe has not much surplus production, so that should prices rise exorbitantly here only a small amount could be drawn from there and this would instantly raise prices in Europe, so that our home manufacturers could not be seriously affected. Free trade would only tend to prevent exorbitant prices here for a time when the demand was excessive. Home iron and steel manufacturers have nothing to fear from free trade. [I recently (1910) stated this in evidence before the Tariff Commission at Washington.]

CHAPTER XI

NEW YORK AS HEADQUARTERS

OUR business continued to expand and required frequent visits on my part to the East, especially to New York, which is as London to Britain—the headquarters of all really important enterprises in America. No large concern could very well get on without being represented there. My brother and Mr. Phipps had full grasp of the business at Pittsburgh. My field appeared to be to direct the general policy of the companies and negotiate the important contracts.

My brother had been so fortunate as to marry Miss Lucy Coleman, daughter of one of our most valued partners and friends. Our family residence at Homewood was given over to him, and I was once more compelled to break old associations and leave Pittsburgh in 1867 to take up my residence in New York. The change was hard enough for me, but much harder for my mother; but she was still in the prime of life and we could be happy anywhere so long as we were together. Still she did feel the leaving of our home very much. We were perfect strangers in New York, and at first took up our quarters in the St. Nicholas Hotel, then in its glory. I opened an office in Broad Street.

For some time the Pittsburgh friends who came to New York were our chief source of happiness, and the Pittsburgh papers seemed necessary to our existence. I made frequent visits there and my mother often accompanied me, so that our connection with the old home was still maintained. But after a time new friendships were formed and new interests awakened and New York began to be called home. When the proprietors of the St. Nicholas opened the Windsor Hotel uptown, we took up our residence there and up to the year 1887 that was our New York home. Mr. Hawk, the proprietor, became one of our valued friends and his nephew and namesake still remains so.

Among the educative influences from which I derived great advantage in New York, none ranks higher than the Nineteenth Century Club organized by Mr. and Mrs. Courtlandt Palmer. The club met at their house once a month for the discussion of various topics and soon attracted many able men and women. It was to Madame Botta I owed my election to membership—a remarkable woman, wife of Professor Botta, whose drawing-room became more of a salon than any in the city, if indeed it were not the only one resembling a salon at that time. I was honored by an invitation one day to dine at the Bottas' and there met for the first time several distinguished people, among them one who became my lifelong friend and wise counselor, Andrew D. White, then president of Cornell University, afterwards Ambassador to Russia and Germany, and our chief delegate to the Hague Conference.

Here in the Nineteenth Century Club was an arena, indeed. Able men and women discussed the leading topics of the day in due form, addressing the audience one after another. The gatherings soon became too large for a private room. The monthly meetings were then held in the American Art Galleries. I remember the first evening I took part as one of the speakers the subject was "The Aristocracy of the Dollar." Colonel Thomas Wentworth Higginson was the first speaker. This was my introduction to a New York audience. Thereafter I spoke now and then. It was excellent training, for one had to read and study for each appearance.