Andrew, age 16, with his brother Thomas

It is one of history’s great ironies. Andrew Carnegie’s mill-worker-father was a casualty of the introduction of steam-powered machinery into the Scottish textile factories. The loss of the elder Carnegie’s job forced the family to leave Scotland in 1848 and seek a new life in the Pittsburgh area. Andrew was twelve. The irony lies in the fact that by the end of the century, young Andrew would be one of the driving forces behind the same industrial transition of America. In the process, Andrew would become the richest man in America.

Soon after his arrival in America, the young Carnegie became a “bobbin boy” in a Pittsburgh cotton mill. Carnegie’s “big break” came when he discovered a gift for quickly deciphering the Morse code of the telegraph. His talent caught the eye of an administrator of the Pennsylvania Railroad Road who made Carnegie his personal telegraph operator. A few years later, Carnegie’s boss offered him the opportunity to buy stock in a fledgling delivery company. The company quickly prospered and launched Carnegie on the road to riches. Carnegie often cited this event as pivotal in his transformation from worker to capitalist.

As his wealth grew, Carnegie developed a personal credo that he referred to as his "Gospel of Wealth." He outlined this philosophy in a letter which he wrote to himself in 1868 when he was 33:

"I propose to take an income no greater than $50,000 per annum! (Equivalent to approximately $732,000 today) Beyond this I need ever earn, make no effort to increase my fortune, but spend the surplus each year for benevolent purposes! Let us cast aside business forever, except for others. . . . Man must have an idol and the amassing of wealth is one of the worst species of idolatry! No idol is more debasing than the worship of money! . . . To continue much longer overwhelmed by business cares and with most of my thoughts wholly upon the way to make more money in the shortest time, must degrade me beyond hope of permanent recovery. I will resign business at thirty-five, but during these ensuing two years I wish to spend the afternoons in receiving instruction and in reading systematically!"

Carnegie did not retire at age thirty-five. He went on investing in and profiting from, numerous businesses. In 1901 he sold his interest in Carnegie Steel to J.P. Morgan and became America's richest man. He devoted himself fulltime to philanthropy with the goal of giving away all of his wealth before he died - a goal he was unable to achieve.

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“I showed them this check . . . none of us had ever received anything but from toil. A return from capital was something strange and new.”

Carnegie describes his transformation from worker to capitalist:

"On arriving in Allegheny City (there were four of us: Father, Mother, my younger brother, and myself), my father entered a cotton factory. I soon followed and served as a 'bobbin boy,' and this is how I began my preparation for subsequent apprenticeship as a business man. I received one dollar and twenty cents a week and was then just about twelve years old. . .

For a lad of twelve to rise and breakfast every morning except the blessed Sunday morning and go into the streets and find his way to the factory and begin to work while it was still dark outside, and not be released until after darkness came again in the evening, forty minutes' interval only being allowed at noon, was a terrible task. . .

A change soon came, for a kind old Scotsman, who knew some of our relatives, made bobbins, and took me into his factory before I was thirteen. But here for a time it was even worse than in the cotton factory, because I was set to fire a boiler in the cellar and actually to run the small steam engine which drove the machinery. The firing of the boiler was all right, for fortunately we did not use coal, but the refuse wooden chips; and I always liked to work in wood. But the responsibility of keeping the water right and of running the engine and the danger of my making a mistake and blowing the whole factory to pieces caused too great a strain, and I often awoke and found myself sitting up in bed through the night, trying the steam gauges. But I never told them at home that I was having a hard tussle. No, no! Everything must be bright to them. . .

. . . I obtained a situation as messenger boy in the telegraph office of Pittsburgh when I was fourteen. Here I entered a new world.

Amid books, newspapers, pencils, pens and ink and writing pads, and a clean office, bright windows, and the literary atmosphere, I was the happiest boy alive.

In retirement, Carnegie plays golf in Scotland

Of course every ambitious messenger boy wants to become an operator, and before the operators arrive in the early mornings the boys slipped up to the instruments and practiced. This I did and was soon able to talk to the boys in the other offices along the line who were also practicing.

. . . Having a sensitive ear for sound, I soon learned to take messages by the ear, which was then very uncommon - I think only two persons in the United States could then do it. Now every operator takes by ear, so easy is it to follow and do what any other boy can - if you only have to. This brought me into notice, and finally I became an operator and received the, to me, enormous recompense of twenty-five dollars per month - three hundred dollars a year!

. . . The Pennsylvania Railroad shortly after this was completed to Pittsburgh, and that genius, Thomas A. Scott, was its superintendent. He often came to the telegraph office to talk to his chief, the general superintendent, at Altoona; and I became known to him in this way.

When that great railway system put up a wire of its own, he asked me to be his clerk and operator; so I left the telegraph office – in which there is great danger that a young man may be permanently buried, as it were - and became connected with the railways.

The new appointment was accompanied by what was to me a tremendous increase of salary. It jumped from twenty-five to thirty-five dollars per month. Mr. Scott was then receiving one hundred and twenty-five dollars per month, and I used to wonder what on earth he could do with so much money.

I remained for thirteen years in the service of the Pennsylvania Railroad Company and was at last superintendent of the Pittsburgh division of the road, successor to Mr; Scott, who had in the meantime risen to the office of vice-president of the company.

One day Mr. Scott, who was the kindest of men and had taken a great fancy to me, asked if I had or could find five hundred dollars to invest.

Here the business instinct came into play. I felt that as the door was opened for a business investment with my chief, it would be willful flying in the face of Providence if I did not jump at it; so I answered promptly:

'Yes, sir; I think I can.'

'Very well,' he said, 'get it; a man has just died who owns ten shares in the Adams Express Company which I want you to buy. It will cost you fifty dollars per share, and I can help you with a little balance if you cannot raise it all.'

Here was a queer position. The available assets of the whole family were not five hundred dollars. But there was one member of the family whose ability, pluck and resource never failed us; and I felt sure the money could be raised somehow or other by my mother.

Indeed, had Mr. Scott known our position he would have advanced it himself; but the last thing in the world the proud Scot will do is to reveal his poverty and rely upon others. The family had managed by this time to purchase a small house and pay for it in order to save rent. My recollection is that it was worth eight hundred dollars.

The matter was laid before the council of three that night, and the oracle spoke: 'Must be done. Mortgage our house. I will take the steamer in the morning for Ohio and see Uncle and ask him to arrange it. I am sure he can.' This was done. Of course her visit was successful - where did she ever fail?

The money was procured, paid over; ten shares of Adams Express Company stock was mine; but no one knew our little home had been mortgaged 'to give our boy a start.'
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Adams Express stock then paid monthly dividends of one per cent., and the first check for five dollars arrived. I can see it now, and I well remember the signature of 'J. C. Babcock, Cashier,' who wrote a big 'John Hancock' hand.

The next day being Sunday, we boys - myself and my ever-constant companions - took our usual Sunday afternoon stroll in the country, and sitting down in the woods, I showed them this check, saying: 'Eureka! We have found it.'

Here was something new to all of us, for none of us had ever received anything but from toil. A return from capital was something strange and new.

How money could make money, how, without any attention from me, this mysterious golden visitor should come, led to much speculation upon the part of the young fellows; and I was for the first time hailed as a 'capitalist.'"

References:
    This account appears in: Carnegie, Andrew, The Gospel of Wealth (1900); Nasaw, David, Andrew Carnegie (2006); Winkler, John, K, Incredible Carnegie (1931).

How To Cite This Article:
"Andrew Carnegie Becomes a Capitalist, 1856", EyeWitness to History, www.eyewitnesstohistory.com (2007).