Handout 2 Carnegie and Rockefeller - Documents Meet Andrew Carnegie: The Two Andrews Generous and naïve, while often grasping and ruthless, Andrew Carnegie personally embodied the contradictions that divided America in the Gilded Age. At a time when America struggled—often violently—to sort out the competing claims of democracy and individual gain, Carnegie championed both. He saw himself as a hero of working people, yet he crushed their unions. The richest man in the world, he railed against privilege. A generous philanthropist, he slashed the wages of the workers who made him rich. The roots of Carnegie's internal conflicts were planted in Dunfermline, Scotland, where he was born in 1835, the son of a weaver and political radical who instilled in young Andrew the values of political and economic equality. His family's poverty, however, taught Carnegie a different lesson. When the Carnegies emigrated to America in 1848, Carnegie determined to bring prosperity to his family. Carnegie's climb from the slums of Pittsburgh to the mansions of New York paralleled America's transformation from a sleepy agricultural nation into the world's foremost industrial power. By 1868 Carnegie, then 33, was worth $400,000 (nearly $5 million today); but his wealth troubled him, as did the ghosts of his radical past. He wrote himself a telling letter, promising that he would stop working in two years and pursue a life of good works: "To continue much longer overwhelmed by business cares . must degrade me beyond hope of permanent recovery." Yet Carnegie's business cares held him in sway. For three decades, he dominated the steel industry, and although he allowed himself time for vacations in Scotland and for his troubled courtship of Louise Whitfield, his thoughts rarely strayed from his mills. Carnegie did not forget his radical roots. In a period of turbulent labor unrest, Carnegie publicly supported the unions. In his own mills, though, his position was less clear. He usually avoided using strike breakers, but drove a hard bargain and typically got his way, most notably during the bloody lockout at his Homestead works in 1892. With his partner Henry Clay Frick, Carnegie broke the steel unions. His empire grew. By 1900, Carnegie Steel produced more steel than the entire British steel industry. When he sold the company to J.P. Morgan in 1901, Carnegie personally earned $250 million (approximately $4.5 billion today). Carnegie then turned his enormous energies to philanthropy and the pursuit of world peace, hoping perhaps that donating his wealth to charitable causes would mitigate the grimy details of its accumulation. In the public memory, he may have been correct. Today he is most remembered for his generous gifts of music halls, educational grants, and nearly 3,000 public libraries. By the time of his death in 1919, he had given away over $350 million (more than $3 billion in 1996 dollars). AMERICAN INDUSTRIALISTS: ROBBER BARONS OR CAPTAINS OF INDUSTRY? Page 2 PBS. (n.d.). Meet Andrew Carnegie: The two Andrews. Retrieved from http://www.pbs.org/wgbh/amex/carnegie/sfeature/meet_andrews.html AMERICAN INDUSTRIALISTS: ROBBER BARONS OR CAPTAINS OF INDUSTRY? Page 3 Philanthropy 101: The Carnegie Legacy Carnegie was often frustrated by criticism of his philanthropic efforts. Nothing Carnegie had done in business was as roundly criticized as the things he did "for the benefit of all mankind." Although his gifts pleased many, conservatives called him a socialist, and the general public frequently accused him of trying to use his millions to prostitute universities—even science itself. Years later, the public can look back more charitably. The foundations established by Carnegie have given away close to $2 billion and have funded some of the century's most significant initiatives. Here is a very abbreviated rundown of what some of Carnegie's foundations have achieved: The Carnegie Corporation of New York By 1911, Carnegie had given away over $43 million for libraries and close to $110 million for other causes. He formed the Carnegie Corporation of New York to give away the $150 million that remained. The Carnegie Corporation's mandate was to "promote the advancement and diffusion of knowledge and understanding." Since then, it has given large grants to the other Carnegie trusts as well as universities, colleges, schools and educational entities—including public television's "Sesame Street." The Carnegie Endowment for International Peace Founded in 1910 with $10 million from Carnegie, the Endowment is the oldest public policy institution in the United States concentrating on issues of war and peace. Over the years, it has funded conferences and publications on major policy issues, as well as funding the work of researchers such as Sigmund Freud and Gunnar Myrdal. The Carnegie Institution of Washington Though encouraged to finance a national university, Carnegie feared that such an endeavor might weaken existing schools. Instead he chose in 1901 to create a national research institution that would be a resource for all universities. With Theodore Roosevelt's support, Carnegie endowed the Institution with $10 million, adding $2 million in 1909 and another $10 million in 1911. Since then, scientists on the Institution's payroll have, among other accomplishments: Discovered the expansion of the universe Proved DNA is the genetic material Devised applications as varied as radar and hybrid corn Opened Mayan ruins in Central America The Carnegie Foundation for the Advancement of Teaching Founded by Carnegie in 1905 to provide pensions for teachers, the foundation established the first AMERICAN INDUSTRIALISTS: ROBBER BARONS OR CAPTAINS OF INDUSTRY? Page 4 widespread educational standards for the nation's colleges and universities. In addition, the foundation developed standardized, machine-scored tests, a function that merged into the Educational Testing Service in 1947. Because the foundation only gave money to secular schools, it was also responsible for the decision of many colleges to drop their religious affiliations. The Carnegie Hero Funds These international organizations continue to give medals and money to those who are injured in an attempt to "preserve and rescue their fellows." Since 1904, over $20 million has been awarded to these "heroes of peace." PBS. (n.d.). Philanthropy 101: The Carnegie legacy. Retrieved from http://www.pbs.org/wgbh/amex/carnegie/sfeature/p_legacy.html AMERICAN INDUSTRIALISTS: ROBBER BARONS OR CAPTAINS OF INDUSTRY? Page 5 Modern History Sourcebook: Andrew Carnegie: The Gospel of Wealth, 1889 Andrew Carnegie (18351919) was a massively successful business man. His wealth was based on the provision of iron and steel to the railways, but [he was] also a man who recalled his radical roots in Scotland before his immigration to the United States. To resolve what might seem to be contradictions between the creation of wealth, which he saw as proceeding from immutable social laws, and social provision he came up with the notion of the "gospel of wealth.” He lived up to his word, and gave away his fortune to socially beneficial projects, most famously by funding libraries. His approval of death taxes might surprise modern billionaires! The problem of our age is the administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship. The conditions of human life have not only been changed, but revolutionized, within the past few hundred years. In former days there was little difference between the dwelling, dress, food, and environment of the chief and those of his retainers. The contrast between the palace of the millionaire and the cottage of the laborer with us today measures the change which has come with civilization. This change, however, is not to be deplored, but welcomed as highly beneficial. It is well, nay, essential for the progress of the race, that the houses of some should be homes for all that is highest and best in literature and the arts, and for all the refinements of civilization, rather than that none should be so. Much better this great irregularity than universal squalor. Without wealth there can be no Maecenas [Note: a rich Roman patron of the arts]. The "good old times" were not good old times. Neither master nor servant was as well situated then as today. A relapse to old conditions would be disastrous to both—not the least so to him who serves—and would sweep away civilization with it. We start, then, with a condition of affairs under which the best interests of the race are promoted, but which inevitably gives wealth to the few. Thus far, accepting conditions as they exist, the situation can be surveyed and pronounced good. The question then arises—and, if the foregoing be correct, it is the only question with which we have to deal—what is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few? And it is of this great question that I believe I offer the true solution. It will be understood that fortunes are here spoken of, not moderate sums saved by many years of effort, the returns from which are required for the comfortable maintenance and education of families. This is not wealth, but only competence, which it should be the aim of all to acquire. There are but three modes in which surplus wealth can be disposed of. It can be left to the families of the decedents; or it can be bequeathed for public purposes; or, finally, it can be administered during their lives by its possessors. Under the first and second modes most of the wealth of the world that has reached the few has hitherto been applied. Let us in turn consider each of these modes.