Autobiography of Andrew Carnegie

32

Died May 21, 1881.

33

Long after the circumstances here recited, Mr. Isidor Straus called upon Mr. Henry Phipps and asked him if two statements which had been publicly made about Mr. Carnegie and his partners in the steel company were true. Mr. Phipps replied they were not. Then said Mr. Straus:

"Mr. Phipps, you owe it to yourself and also to Mr. Carnegie to say so publicly."

This Mr. Phipps did in the New York Herald, January 30, 1904, in the following handsome manner and without Mr. Carnegie's knowledge:

Question: "In a recent publication mention was made of Mr. Carnegie's not having treated Mr. Miller, Mr. Kloman, and yourself properly during your early partnership, and at its termination. Can you tell me anything about this?"

Answer: "Mr. Miller has already spoken for himself in this matter, and I can say that the treatment received from Mr. Carnegie during our partnership, so far as I was concerned, was always fair and liberal.

"My association with Mr. Kloman in business goes back forty-three years. Everything in connection with Mr. Carnegie's partnership with Mr. Kloman was of a pleasant nature.

"At a much more recent date, when the firm of Carnegie, Kloman and Company was formed, the partners were Andrew Carnegie, Thomas M. Carnegie, Andrew Kloman, and myself. The Carnegies held the controlling interest.

"After the partnership agreement was signed, Mr. Kloman said to me that the Carnegies, owning the larger interest, might be too enterprising in making improvements, which might lead us into serious trouble; and he thought that they should consent to an article in the partnership agreement requiring the consent of three partners to make effective any vote for improvements. I told him that we could not exact what he asked, as their larger interest assured them control, but I would speak to them. When the subject was broached, Mr. Carnegie promptly said that if he could not carry Mr. Kloman or myself with his brother in any improvements he would not wish them made. Other matters were arranged by courtesy during our partnership in the same manner."

Question: "What you have told me suggests the question, why did Mr. Kloman leave the firm?"

Answer: "During the great depression which followed the panic of 1873, Mr. Kloman, through an unfortunate partnership in the Escanaba Furnace Company, lost his means, and his interest in our firm had to be disposed of. We bought it at book value at a time when manufacturing properties were selling at ruinous prices, often as low as one third or one half their cost.

"After the settlement had been made with the creditors of the Escanaba Company, Mr. Kloman was offered an interest by Mr. Carnegie of $100,000 in our firm, to be paid only from future profits. This Mr. Kloman declined, as he did not feel like taking an interest which formerly had been much larger. Mr. Carnegie gave him $40,000 from the firm to make a new start. This amount was invested in a rival concern, which soon closed.

"I knew of no disagreement during this early period with Mr. Carnegie, and their relations continued pleasant as long as Mr. Kloman lived. Harmony always marked their intercourse, and they had the kindliest feeling one for the other."

34

The steel-rail mills were ready and rails were rolled in 1874.

35

The story is told that when Mr. Carnegie was selecting his younger partners he one day sent for a young Scotsman, Alexander R. Peacock, and asked him rather abruptly:

"Peacock, what would you give to be made a millionaire?"

"A liberal discount for cash, sir," was the answer.

He was a partner owning a two per cent interest when the Carnegie Steel Company was merged into the United States Steel Corporation.

36

Round the World, by Andrew Carnegie. New York and London, 1884.

37

Published privately in 1882 under the title Our Coaching Trip, Brighton to Inverness. Published by the Scribners in 1883 under the title of An American Four-in-Hand in Britain.

38

Ferdinand to Miranda in The Tempest.

39

John Hay, writing to his friend Henry Adams under date of London, August 25, 1887, has the following to say about the party at Kilgraston: "After that we went to Andy Carnegie in Perthshire, who is keeping his honeymoon, having just married a pretty girl.... The house is thronged with visitors—sixteen when we came away—we merely stayed three days: the others were there for a fortnight. Among them were your friends Blaine and Hale of Maine. Carnegie likes it so well he is going to do it every summer and is looking at all the great estates in the County with a view of renting or purchasing. We went with him one day to Dupplin Castle, where I saw the most beautiful trees I ever beheld in my wandering life. The old Earl of – is miserably poor—not able to buy a bottle of seltzer—with an estate worth millions in the hands of his creditors, and sure to be sold one of these days to some enterprising Yankee or British Buttonmaker. I wish you or Carnegie would buy it. I would visit you frequently." (Thayer, Life and Letters of John Hay, vol. II, p. 74.)

40

"No man is a true gentleman who does not inspire the affection and devotion of his servants." (Problems of To-day, by Andrew Carnegie. New York, 1908, p. 59.)

41

The reference is to the quotation from The Tempest on page 214 (#x7_x_7_i37).

42

The full statement of Mr. Phipps is as follows:

Question: "It was stated that Mr. Carnegie acted in a cowardly manner in not returning to America from Scotland and being present when the strike was in progress at Homestead."

Answer: "When Mr. Carnegie heard of the trouble at Homestead he immediately wired that he would take the first ship for America, but his partners begged him not to appear, as they were of the opinion that the welfare of the Company required that he should not be in this country at the time. They knew of his extreme disposition to always grant the demands of labor, however unreasonable.

"I have never known of any one interested in the business to make any complaint about Mr. Carnegie's absence at that time, but all the partners rejoiced that they were permitted to manage the affair in their own way." (Henry Phipps in the New York Herald, January 30, 1904.)

43

Mr. Carnegie was very fond of this story because, being human, he was fond of applause and, being a Robert Burns radical, he preferred the applause of Labor to that of Rank. That one of his men thought he had acted "white" pleased him beyond measure. He stopped short with that tribute and never asked, never knew, why or how the story happened to be told. Perhaps this is the time and place to tell the story of the story.

Sometime in 1901 over a dinner table in New York, I heard a statement regarding Mr. Carnegie that he never gave anything without the requirement that his name be attached to the gift. The remark came from a prominent man who should have known he was talking nonsense. It rather angered me. I denied the statement, saying that I, personally, had given away money for Mr. Carnegie that only he and I knew about, and that he had given many thousands in this way through others. By way of illustration I told the story about McLuckie. A Pittsburgh man at the table carried the story back to Pittsburgh, told it there, and it finally got into the newspapers. Of course the argument of the story, namely, that Mr. Carnegie sometimes gave without publicity, was lost sight of and only the refrain, "It was damned white of Andy," remained. Mr. Carnegie never knew that there was an argument. He liked the refrain. Some years afterward at Skibo (1906), when he was writing this Autobiography, he asked me if I would not write out the story for him. I did so. I am now glad of the chance to write an explanatory note about it.... John C. Van Dyke.

44

The Gospel of Wealth (Century Company, New York, 1900) contains various magazine articles written between 1886 and 1899 and published in the Youth's Companion, the Century Magazine, the North American Review, the Forum, the Contemporary Review, the Fortnightly Review, the Nineteenth Century, and the Scottish Leader. Gladstone asked that the article in the North American Review be printed in England. It was published in the Pall Mall Budget and christened the "Gospel of Wealth." Gladstone, Cardinal Manning, Rev. Hugh Price, and Rev. Dr. Hermann Adler answered it, and Mr. Carnegie replied to them.

45

The Carnegie Steel Company was bought by Mr. Morgan at Mr. Carnegie's own price. There was some talk at the time of his holding out for a higher price than he received, but testifying before a committee of the House of Representatives in January, 1912, Mr. Carnegie said: "I considered what was fair: and that is the option Morgan got. Schwab went down and arranged it. I never saw Morgan on the subject or any man connected with him. Never a word passed between him and me. I gave my memorandum and Morgan saw it was eminently fair. I have been told many times since by insiders that I should have asked $100,000,000 more and could have got it easily. Once for all, I want to put a stop to all this talk about Mr. Carnegie 'forcing high prices for anything.'"

46

The total gifts to the Carnegie Institute at Pittsburgh amounted to about twenty-eight million dollars.

"He belonged to that great race of nation-builders who have made the development of America the wonder of the world.... He was the kindliest man I ever knew. Wealth had brought to him no hardening of the heart, nor made him forget the dreams of his youth. Kindly, affectionate, charitable in his judgments, unrestrained in his sympathies, noble in his impulses, I wish that all the people who think of him as a rich man giving away money he did not need could know of the hundreds of kindly things he did unknown to the world."

"To promote the advancement and diffusion of knowledge and understanding among the people of the United States by aiding technical schools, institutions of higher learning, libraries, scientific research, hero funds, useful publications and by such other agencies and means as shall from time to time be found appropriate therefor."