Andrew Carnegie (review)

Several biographies of Gilded Age tycoons have appeared recently in the trade press, including works on Rockefeller, Mellon, Gould, and Morgan. Now, following his award-winning portrait of publisher William Randolph Hearst, The Chief (2000), David Nasaw has presented yet another impressive contribution to the genre with his prodigious biography of Andrew Carnegie.

Carnegie was born in Dunfermline, Scotland, in 1835 and emigrated to Pittsburgh with his family in 1848. Young Andrew soon found work, first as a textile mill "bobbin boy" and later as a messenger. Eventually, he became the personal telegrapher and secretary for Tom Scott, the superintendent of the Pennsylvania Railroad, and thus began his business education. Carnegie became well-versed in the railroad's techniques of "crony capitalism" (p. 108)—secretly investing in the railroad's iron and bridge suppliers, then granting them sweetheart contracts. Nasaw is quick to point out that these insider trading practices were not illegal at the time, and that Carnegie should be judged by the standards of his own era.

Nasaw brings new attention to the period after the Civil War when Carnegie resigned from the Pennsylvania Railroad to become a bond salesman. He raised investment capital in Europe to fund America's westward expansion and parlayed his commissions into a diversified and lucrative investment portfolio. However, in 1873, he liquidated and put all of his "eggs in one basket" when he and his partners opened up a state-of-the-art steel mill in Pittsburgh, anticipating the railroads' conversion from iron to steel rails. With capable managers like Henry Clay Frick and Charles Schwab, Carnegie Steel stayed well ahead of its competitors by ruthlessly cutting costs, diversifying from rails into structural shapes, and vertically integrating into coke and iron ore.

When Carnegie sold his enormously successful business to consolidator J. P. Morgan in 1901, he became the richest man in the world and then embarked on his long-held goal of giving away his entire fortune. Carnegie revolutionized philanthropy and set a precedent for his fellow millionaires, donating funds for thousands of public libraries and church organs and creating endowments for vocational education, scientific research, the arts, and many other causes. During his final years, he tried in vain to enlist his American, British, and German political contacts in his crusade for international peace. His hopes dashed by the Great War, Carnegie receded from public view, and he died in 1919.

Carnegie's first biography, by Burton Hendrick (1932), was specially commissioned by his widow, and subsequent biographies have either drawn uncritically on Carnegie's self-serving Autobiography (1920) or pilloried him in damaging exposés. To clarify this distorted picture, Nasaw has produced a balanced and comprehensive treatment of Carnegie, marshaling a wealth of previously unavailable sources, including Carnegie's unpublished manuscripts, his prenuptial agreement and tax returns, and his correspondence with U.S. presidents from Harrison to Wilson, and with British prime ministers from Gladstone to Balfour. These new sources have enabled Nasaw to make several revisionist interpretations. For example, though Carnegie publicly denied responsibility for the bloody Homestead strike, his daily cables with Frick show that he was well-advised of the situation while on vacation in Scotland. And while prior biographers had assumed that Carnegie turned to philanthropy to atone for Homestead, Nasaw cites an 1868 memo stating Carnegie's early intention to give away his entire fortune—nearly twenty-five years before the 1892 strike.

Carnegie was a man of many contradictions. He initially supported trade unions as his industrial "partners," only to crush those same unions in the 1880s and 1890s. He followed the Republicans in favoring a gold standard and high tariffs, but drew the ire of presidents McKinley and Roosevelt in his opposition to imperialism. Though he possessed little formal education, Carnegie befriended writers such as Herbert Spencer and Samuel Clemens, and he penned a book (Triumphant Democracy [1886]) and several articles, including his famous "Gospel of Wealth" (1889). And while he was an outwardly self-confident "all-purpose expert" (p. 776), he was also painfully insecure about...