THE*. 
 
 CARNEGIE 
 
 AND THE MEN WHO 
 MADE THEM * . 
 
 JAMES H. BRIDGE
 
 THE DAILY TELEGRAPH AND MORNING POST, 
 
 MR. CHARLES M. 
 SCHWAB 
 
 FAMOUS CHAIRMAN OF 
 BETHLEHEM STEEL 
 
 As reported in yesterday's later 
 editions of THE DAILY TELEGRAPH, Mr. 
 Charles M. Schwab, the world-famous 
 chairman of the Bethlehem Steel Cor- 
 poration, has died in New York, at the 
 age of 77. 
 
 Always an admirer of Britain, he was 
 of incalculable help during the last war. 
 As the late Lord Fisher wrote, " If any 
 man ever deserved the gratitude of 
 England that man was Mr. Schwab." 
 
 After the outbreak of the war he 
 offered to place the whole resources of 
 his gigantic works at the disposal of 
 the British Government. He was invited 
 to London, and while on his way in 
 October, 1914, saw from the liner 
 Olympic the destruction by a mine of 
 H.M.S. Audacious. 
 
 In an attempt to keep the disaster 
 secret the Olympic passengers were not 
 allowed to land, but through the instru- 
 mentality of the late Lord Jellicoe an 
 exception was made in regard to Mr. 
 Schwab. Even then he had the greatest 
 difficulty in reaching London without 
 a passport, through being detained as a 
 suspected spy. 
 
 In Whitehall he had important inter- 
 views and agreed to build 20 sub- 
 marines in the record time of five 
 months. Back in the United States he 
 discovered that the government of his 
 country had placed a ban on construc- 
 tion. Thereupon he bought the Vickers 
 shipyard at Montreal, consigned to it 
 submarine parts under the description 
 of motor-cars, assembled them at 
 Montreal and delivered the vessels to 
 time. 
 
 This was only a small part of the work 
 carried out subsequently by Mr. Schwab, 
 who had turned down with scorn an 
 offer from Germany of many millions of 
 pounds if he would decline to carry out 
 contracts for the Allies. 
 
 HUMBLE BEGINNINGS 
 
 Mr. Schwab's career was a remarkable 
 one. Born in a Pennsylvania village, he 
 drove a grocer's van and a stage coach 
 as a boy before going to the steelworks 
 owned by Mr. Carnegie, and obtaining 
 employment as a stake-driver. Without 
 technical training he acquired so com- 
 prehensive a knowledge of engineering 
 that within six years he had become 
 superintendent of the works. He was 
 then 23; at the age of 30 he was manager 
 of the whole Carnegie organisation. 
 
 Carnegie was so eager not to lose his 
 services that he offered him the huge 
 salary of 200,000 a year. Schwab pre- 
 ferred to reject the flat rate and by doing 
 so made 400,000 a year. When the 
 United States Steei Corporation was 
 formed Carnegie made him president. 
 
 An even more remarkable achieve- , 
 ment was to follow. After two years' . 
 work at high pressure he broke down in : 
 health in 1903 and resigned. It seemed 
 as if his career had ended at the age 
 of 41; instead, he recovered his health 
 and bought a small steel works at Beth- 
 lehem, Pennsylvania. 
 
 Taking in some^oung men as partners 
 he went on to meet the competition of 
 his old concern so effectively that the ' 
 Bethlehem Steel Works organisation de- 
 veloped into a company with a capital 
 of 27,000,000 and 100,000 workers. 
 
 Mr. Schwab received many honours, 
 academic and otherwise, in the course 
 of his career. Two he greatly prized 
 were the awards of the Bessemer Gold 
 Medal by the British Iron and Steel In- 
 stitute and of the Melchett Medal by 
 the Institute of Fuel.
 
 EVENING STANDARD. TITCR8.. JAK. 11. 1940. 
 
 The Man They Said 
 Was a Millionaire 
 
 Evening Standard New York Correspondent 
 GURPRISE has been caused by a report from Pittsburg that 
 *-* Charles M. Schwab, the American steel king, reported to 
 have died last September a multi-millionaire, was a com- 
 paratively poor man. 
 The Pennsylvania revenue authorities, 
 
 it is stated, have not been able to find 
 
 any real or personal property belonging 
 
 to him in the State. 
 
 It was regarded as curious, when his will 
 
 was entered for probate, that the value of 
 the estate was not mentioned. 
 
 Last June the 
 
 Schwab summer 
 
 residence at Loretto, 
 
 Pennsylvania, esti- 
 
 1 mated to have cost 
 
 700,000, was sold, 
 
 at a price not made 
 
 < public, to become an 
 
 hotel. 
 
 It was said that 
 
 j his New York house, 
 
 \ on Riverside-drive, 
 
 ' was offered to the 
 
 ; city authorities for 
 
 500,000, but they 
 
 declined to buy it. 
 
 During the Great 
 War, Schwab, chair- 
 man of the Bethle- 
 hem Steel Corpora- 
 tion, supplied the 
 Allies with great 
 quantities of muni- 
 tions and s u b - 
 marines, and refused 
 
 an offer of 20,000,000 from Germany not to 
 sell war material to Britain. 
 Schwab began his working life as a stage 
 . coach driver. He became a shop assistant. 
 One day he sold a cigar to the plant 
 j superintendent of the Edgar Thomson Steel 
 (Works, owned by Carnegies. Seizing his 
 ; chance, he asked his customer for a job. 
 and got it at a dollar a day. 
 
 He studied mathematics and engineering 
 at night and, in three years, when he was 
 21 years old, he became chief engineer and 
 assistant manager of the plant. 
 
 At 35 he was first president of the United 
 
 ,States Steel Corporation, earning 400.000 
 
 a year _ 
 
 Mr. Schwab
 
 ANDREW KLOMAN 
 
 OUT OF WHOSE LITTLE FORGE GREW THE CARNEGIE STEEL COMPANY
 
 ANDREW KLOMAN, 
 
 OUT OF WHOSE LITTLE FORdE GREW THE CARNEGIE STEEL COMPANY
 
 kfc 
 
 THE 
 
 Carnegie Millions 
 
 AND 
 
 The Men who made them.' 
 
 Being the inside history of the 
 Carnegie Steel Company 
 
 BY 
 
 JAMES H. BRIDGE. 
 
 ondon : 
 LIMPUS, BAKER & CO., 
 
 12, John Street, Adelphi. 
 1903.

 
 
 TO RECALL THEIR FORGOTTEN SERVICES 
 
 of a 
 
 of 
 
 the Men who Founded it, Saved it from early 
 Disaster, and won its First Successes : 
 
 ANDREW KLOMAN 
 DAVID McCANDLESS 
 
 WILLIAM COLEMAN 
 THOMAS MORRISON CARNEGIE 
 
 WILLIAM R. JONES 
 
 WILLIAM P. SH INN 
 
 DAVID A. STEWART 
 
 HENRY M. CURRY 
 
 2047183
 
 PREFACE 
 
 THIS book is the outcome of a magazine article undertaken 
 at an editor's request. Having spent a number of years in the 
 closest intimacy with one of the owners of the great steel works, 
 and enjoyed exceptional opportunities of becoming acquainted 
 with the men who had wrought their success, I entertained lit- 
 tle doubt as to my fitness for the task. So recalling the stories 
 I had heard the partners tell, and adding a few I found in the 
 writings of Andrew Carnegie, I wrote my article, and found I 
 had enough material left for a couple more. These also were 
 written, and in due time published. 
 
 To my surprise they brought an avalanche of dissent and 
 protest. From distant Oregon and near-by Meadville, from 
 Pittsburg and New York, came word from unknown corre- 
 spondents that my conventional story was only a repetition of 
 similar publishings, all faulty and all designed to glorify some 
 individual at the expense of his associates. One letter con- 
 tained an expression so vigorous that it has won a place for 
 itself in this book : " They have filched their laurel wreaths from 
 the tombs of the dead." Another assured me that what I had 
 deemed honorable success was but the outcome of " Macchiavel- 
 lian astuteness." I was told by one who had played an impor- 
 tant part in the early history of the enterprise that " the bad 
 faith, treachery, and chicanery that lie at the bottom of many 
 great fortunes had their parallel in the history of the Carnegie 
 interests." " Dear me!" sighed an unknown Pittsburg corre- 
 spondent, " the humbug of greatness is so grotesque in the 
 careers of those we know that it makes one wonder at the acci- 
 dents which happen to men accidents which elevate mediocrity
 
 vi PREFACE 
 
 and the commonplace to Olympian heights." In other letters 
 were references to " porcine proclivities," " pachyderm entities," 
 "a vainglorious medley of contradictions." 
 
 Under this interesting stimulus I determined to go to Pitts- 
 burg and stay there until I had got at the core of things 
 Carnegian. My experience was at once a disappointment and 
 an encouragement. With documentary proof before me I found 
 that almost every man who had written a line about the events 
 I was investigating had blundered; one in dates, another in 
 sequence of happenings, a third in the placing of credit for in- 
 ventions and improvements ; and of them all I found Andrew 
 Carnegie's own narrative the least trustworthy. Knowing how 
 excellent is his verbal memory, it puzzled me to find him mis- 
 taking his own birth-year ; claiming to have been the first in 
 America to operate the Bessemer process of steel-making; to 
 have originated iron railway bridges; to have been the founder 
 of the business that bears his name; to have been ever on the 
 alert to adopt new processes and mechanical improvements; to 
 have maintained without a break the friendliest of relations with 
 his partners ; to have been the principal factor in the gigantic 
 growth of the business ; to have fervently tried to carry his 
 high ideals concerning labor into his own works. Instead 
 of this I everywhere found proof of the contrary ; and when, 
 finally, I was notified that I must agree to submit my manu- 
 script to the usual Carnegie revision before I could count on 
 any assistance of the present officers of the company, my disillu- 
 sionment was complete. 
 
 But it made my work more interesting. To write a con- 
 ventional history from the official records of the company, with 
 the aid of the company's press agent and under the guidance of 
 an official censor, was a thing any journalistic fledgling could 
 do. To dig into the secrets of the great corporation, to expose 
 its enormous profits, reveal its peculiar business methods, its 
 ways of heading off competitors, its internal strife, to get its 
 first annual reports and even its later balance sheets, and to do
 
 PREFACE 
 
 vn 
 
 all this openly and without a bribe or the betrayal of a con- 
 fidence, to involve no employee in a covert act or breach of 
 faith this was a task of no small difficulty. It is for the 
 reader to judge of my success. 
 
 Thus disadvantaged, I have not hesitated to use personal 
 letters and private documents as I might not otherwise' have 
 done. Whenever an interesting fact has come to my knowledge, 
 properly authenticated, I have used it without regard to its im- 
 plications. Yet I have stated nothing that cannot be verified. 
 Often I have risked being tedious in order to quote a corrobo- 
 rative document. In other cases I have kept the proofs by me 
 in case my accuracy should be called into question. 
 
 From this independence has resulted a narrative more-truth- 
 ful than it could otherwise have been. Had the official repre- 
 sentatives of the Carnegie Steel Company revised this story, it 
 is certain that many of the statements it contains would never 
 have seen the light of day. More than once the company has 
 accepted a large monetary loss rather than disclose its secrets 
 in court. If, therefore, this book has any value it owes it to 
 its frankness. While the author expects censure for some of his 
 revelations, he is willing to accept it in the cause of truth. 
 The conventional history of the concern, based on benevolent 
 aphorisms and platitudinous maxims about thrift, industry, gen- 
 ius, and super- commercial morality, has been written a hundred 
 times, and will probably be written again and again. 
 
 The Carnegie Steel Company, as will be seen from this 
 narrative, is not the creation of any man, nor indeed of any set 
 of men. It is a natural evolution ; and the conditions of its 
 growth are of the same general character as those of the " flower 
 in the crannied wall. " Andrew Carnegie has somewhere said, 
 in effect : Take away all our money, our great works, ore-mines, 
 and coke-ovens, but leave our organization, and in four years I 
 shall have re-established myself. He might have gone a step 
 further and eliminated himself and his organization ; and in less 
 than four years the steel industry would have recovered from
 
 viii PREFACE 
 
 the loss. This is not the popular conception of industrial evo- 
 lution, which demands captains, corporals, and other heroes; 
 but it accords with evolutionary conceptions in general. 
 
 This inevitableness of industrial growth is frankly recog- 
 nized by the most far-seeing but least talkative member of the 
 group. " The demands of modern life," says Mr. Frick, "called 
 for such works as ours ; and if we had not met the demands 
 others would have done so. Even without us the steel industry 
 of the country would have been just as great as it is, though 
 men would have used other names in speaking of its leaders." 
 This is a frank acknowledgment, from one of themselves, that 
 the kings of industrialism have no divine right. 
 
 Little is here said on the subject of the tariff. The book is 
 neither a protectionist's pleading nor a free-trader's argument. 
 It is simply the story of the growth of a great industry, and the 
 author deems his mission fulfilled in setting forth the facts as he 
 finds them, leaving the reader free to make his own deductions. 
 . As this is not a political tract, neither is it an ethical trea- 
 tise; and the author considers it no part of his duty either to 
 extenuate or accentuate the lapses from a high moral plane 
 which may occasionally have been suffered by some of the in- 
 dividuals whose efforts are here described. The men who were 
 instrumental in building up this great business were, originally 
 at least, none of them philanthropists. There was hardly a 
 step in their progress which had not the impulse of unqualified 
 selfishness; and if, in the light of retrospection, some of their 
 actions seem inconsistent with a book morality, it must be 
 remembered that in the fight for industrial life, as in that ear- 
 lier struggle for physical existence, the victory is not to the gen- 
 tle and the tender-hearted, but to the others. No great business 
 has yet been built on the beatitudes; and it is not all cynicism 
 that condenses a negative decalogue into a positive exhortation 
 to be successful " somehow ! "
 
 CONTENTS 
 
 CHAPTER I 
 THE HUMBLE BEGINNING 
 
 1853-1863 : The little Kloman forge in Girty's Run Excellent work- 
 manship of the Kloman brothers Thomas N. Miller and Henry 
 Phipps join them Notable extension of business Prosperity 
 brought by the war A new mill is built at Twenty-ninth Street 
 Renewed prosperity Anthony Kloman sells out Quarrel 
 among the partners, . I 
 
 CHAPTER II 
 "A MOST HAZARDOUS ENTERPRISE" 
 
 1863-65 : Andrew Carnegie enters as peacemaker Some particulars of 
 his life Hir efforts produce fresh discord Makes agreement un- 
 der which Miller is forced out Thomas M. Carnegie gets an in- 
 terest Miller and Andrew Carnegie start a rival mill at Thirty- 
 third Street Its failure Consolidation of the two mills into 
 Union Iron Mills Company Andrew Carnegie's disappointment 
 Reproaches Miller for getting him into the iron business Calls 
 it a "most hazardous enterprise ", 13 
 
 CHAPTER III 
 EARLY STRUGGLES AND SUCCESSES 
 
 1865 : Phipps and Carnegie go on foreign tour and leave the business 
 Its narrow escape from disaster T. M. Carnegie saves it Will- 
 iam Coleman's helpful advice Phipps' trials on his return Un- 
 fortunate outside venture Andrew Carnegie's quarrel with Miller 
 His depreciation of the enterprise Purchases Miller's stock 
 The first labor strike Importations of foreign workmen Inge- 
 nuity of a German He shows Klomau how to build a " Universal 
 Mill" Andrew Carnegie's resistance to innovations " Pioneering 
 don't pay "Opposes the great slabbing-mill Its excellent work 
 Kloman's inventive genius Economies of Mr. Phipps Brings 
 in John Walker, his brother-in-law Forms company to buy 
 Twenty-ninth Street mill Wilson, Walker & Co. Advantages 
 
 of the change, 25 
 
 ix
 
 x CONTENTS 
 
 CHAPTER IV 
 IRON RAILWAY BRIDGES 
 
 1865 : Formation of the Keystone Bridge Company Incorporates pre- 
 vious business of Piper & Shiftier Andrew Carnegie's claims as 
 a pioneer His strange mistakes Character of Piper Iron used 
 in bridges a hundred years before Carnegie Early iron railroad 
 bridges Commercial morals and early railroad management 
 Officials and outside interests Influential backing of the Key- 
 stone Bridge Company Its early prosperity A balance sheet 
 Recent losses 39 
 
 CHAPTER V 
 A RIVALRY OF GREAT FURNACES 
 
 1872 : Schemes for iron-smelting Phipps and associates invited to join 
 them Coleman advises construction of independent furnace 
 Lucy furnace built Enters upon long rivalry with the Isabella 
 Interesting struggle for supremacy Remarkable achievements 
 Description of old-time methods Great services of H. M. Curry 
 Inventor Whitwell's improvements Valuable discovery by Mr. 
 Phipps His close trading Disagreements of partners Kloman's 
 unfortunate venture The panic of 1873 On the brink of bank- 
 ruptcy Kloman leaves the firm Record of the furnaces, . . 54 
 
 CHAPTER VI 
 BEGINNINGS AND GROWTH OF THE STEEL BUSINESS 
 
 1875 : Erroneous histories published of this event Vanity of supposed 
 founders Filching of laurel wreaths from dead men's graves 
 Coleman the real founder Secures option, with T. M. Carnegie, 
 of the Braddock site Gets his friends interested The elder Car- 
 negie's opposition Sees progress of Bessemer steel in England 
 Returns enthusiastic and joins the enterprise Helpfulness of 
 Colonel Scott and Mr. J. Edgar Thomson Curious result of strike 
 at Johnstown Captain Jones made superintendent His remark- 
 able ability Letter exemplifying his broad views Causes of suc- 
 cess Discrimination in freight rates Shinn's methods of ac- 
 counting Disagreements of partners They lead to construction 
 of blast-furnaces Wonderful records made in smelting Also in 
 converting works and rail-mill Consternation in England, . 71 
 
 1875-1888 : Secrecy hitherto maintained concerning profits No longer 
 necessary First cost sheets and profits Andrew Carnegie's en- 
 thusiasm Forty-one per cent, dividends Carnegie's prophecy of 
 enormous profits Results even more astonishing One hundred
 
 CONTENTS xi 
 
 and forty per cent, in one year Beneficent effects of the tariff 
 A golden stream of dividends First published statement of yearly 
 profits Where credit is due Services of Holley, Jones, Shinn 
 Jones' story of rivalries^Part played by different partners Mc- 
 Candless, T. M. Carnegie, Stewart, Andrew Carnegie How the 
 advertising was done, 94 
 
 CHAPTER VIII 
 QUARRELS AND "EJECTURES" 
 
 Internal discord Dropping out of partners Andrew Carnegie's am- 
 bition Interesting letter Coleman leaves Then Kloman 
 Thomas M. Scott Death of McCandless Shinn's departure Re- 
 sulting lawsuit Story of the dispute and arbitration Scott's 
 ejecture Carnegie's "foresight "Consolidation with Lucy Fur- 
 naces Important letters from Scott and Shiun Cost and earnings 
 of the works, . . . .117 
 
 CHAPTER IX 
 A GLANCE AT PROCESSES 
 
 General prevalence of iron ore Primitive smelting processes How 
 modern blast-furnaces are operated The hot-blast Use of coke 
 How it is made Why lime is added The puddling process 
 Cast and wrought iron The direct process of Bessemer steel-mak- 
 ing The Jones mixer The converter Brilliant pyrotechnics 
 Open-hearth steel process Its rapid growth, .... 136 
 
 CHAPTER X 
 THE RISE AND GROWTH OK HOMESTEAD 
 
 1879: Establishment of Amity Homestead by John McClure Kloman's 
 rival rail-mill Joined by the Pittsburg Bessemer Steel Company 
 Pathetic death of Kloman His uninterrupted influence on Car- 
 negie enterprises Excellent mill and poor management Trouble 
 with labor; leads to disagreements in the company ; and final sale 
 to the Carnegies "Carnegie luck" Extensions and improve- 
 ments Julian Kennedy's skill Wonderful mechanical perfec- 
 tion Purchase of the Carrie furnaces, 150 
 
 CHAPTER XI 
 THE INCOMING OF HENRY CLAY FRICK 
 
 1882 : The enterprise attains its majority Ill-proportioned growth 
 Lacks mental development Frick gives coherency and definite- 
 ness to plans Gathers scattered plants into perfected organiza- 
 tion Previous attempts at consolidation Frick' s extraordinary 
 career His development of the coke industry His great fore- 
 sight Executive and organizing genius Henceforth the most 
 imposing figure in this history, 167
 
 xii CONTENTS 
 
 CHAPTER XII 
 
 THE CAPTURE OF THE DUQUESNE STEEL WORKS 
 
 1889: Prick's remarkable feat of financiering Extensive works 
 bought without the outlay of a dollar ; they pay for themselves in 
 a year Story of their construction ; similar to that of Homestead 
 Splendidly equipped, badly managed Labor troubles Car- 
 negie heads them off desirable contracts Extraordinary methods 
 of competition Discouragement of shareholders Prick's clever 
 bargaining Amazing success ; buys works for bond issue and 
 pays bonds six times over from profits Their later development 
 Enthusiasm of local editor 174 
 
 CHAPTER XIII 
 
 LABOR CONTESTS IN THEORY AND PRACTICE 
 
 Some moral causes of Homestead strike Utopianism versus business 
 The puddler's strike of 1867 The threatened trouble of 1875 at 
 Edgar Thomson No sentimentality Strike at Beaver Falls ; a 
 frank attempt to crush the labor-union Bad business policy An- 
 drew Carnegie's idealistic publishiugs ''Thou shall not take thy 
 neighbor's job" Incident in the washerwomen's strike Pander- 
 ing to the Knights of Labor ; its effects Strike at Edgar Thom- 
 son works; and employment of Pinkertons The coke strike of 
 1887; Carnegie's way of settling it Charges of bad faith ; their 
 justification Renewed disorder in the coke regions The troubles 
 at Homestead in 1889 Description of the hardships of the work- 
 men Carnegie's embarrassing talks for publication His cousin 
 illustrates with a parable Unfortunate settlement at Homestead 
 leads to further difficulties The labor-unions' joy, . . . 184 
 
 CHAPTER XIV 
 THE HOMESTEAD BATTLE 
 
 1892 : Andrew Carnegie's chagrin Prepares for war Stern meas- 
 ures planned Secret instructions to Prick Prick tries concilia- 
 tion ; its failure Statement of the differences Small number of 
 men affected Closing of the works Strikers assume military 
 organization ; depose municipal authorities ; other arbitrary acts 
 Sheriff powerless in presence of mob law The company's at- 
 tempt to land watchmen An all-day battle on the river Barbar- 
 ous use of dynamite and burning oil "Xo quarter to scabs "- 
 Story of an eye-witness Surrender of the Pinkerton guards ; 
 brutal treatment of the wounded and defenceless Homestead in 
 a state of insurrection The calling out of the National Guard, . 203 
 
 CHAPTER XV 
 
 ATTEMPTED ASSASSINATION OF MR. FRICK 
 
 Furious attack on the chairman ; a desperate struggle in the office 
 Thrice shot and repeatedly stabbed. Mr. Prick makes a fight for 
 his life He saves the assassin from summary punishment His
 
 CONTEXTS xiii 
 
 magnificent display of courage His tender thought of Mrs. Frick 
 World-wide excitement The punishment of mutiny in the sol- 
 diers' camp Carnegie at beautiful Loch Rannoch ; denies himself 
 to reporters The interference of politicians Carnegie's cable- 
 gram to Whitelaw Reid Newspaper comment in Europe and 
 America Severe condemnation of Carnegie Prick's unceremo- 
 nious return to business, 224 
 
 CHAPTER XVI 
 THE AFTERMATH OF WAR 
 
 Resumption of work at Homestead under protection of militia Sympa- 
 thetic strikes at other Carnegie mills World's interest in Home- 
 stead storm-centre Incidents of camp life and in the mills Con- 
 gressional investigations W. T. Stead's garbled reports The 
 Knights of Labor on Carnegie idealism "Thoushalt not take thy 
 neighbor's job" Despairing violence of the strikers Attempts 
 at wholesale poisoning of non-union men Conviction of the crimi- 
 nals Withdrawal of the militia; renewed violence Schwab's 
 conciliatory influence Carnegie opens another library Poetical 
 effusions in honor and condemnation The Republican debacle 
 Anger of the protectionists against Frick and Carnegie Some 
 good results of the conflict Carnegie's return His repudiation of 
 responsibility, and praise of Frick, 236 
 
 CHAPTER XVII 
 A RELUCTANT SUPREMACY 
 
 1892-99: Consolidation of Carnegie works ; effect of industrial war 
 The Union Railroad Romantic story of acquisition of Mesaba ore- 
 fields Due to Henry W. Oliver Carnegie's opposition ; leads to 
 coldness with Frick Interesting letters Alliance with the Rocke- 
 fellers Carnegie's renewed opposition; his amusing prophecy 
 Free gift of many millions Frick '-s railroad projects Purchase 
 of a line to Lake Erie ; its economical operation Oliver's project 
 for Lake steamers adopted The company become self-sufficing 
 A perfect industrial unit, . 254 
 
 CHAPTER XVIII 
 THE WORKINGS OF THE CORPORATE MIND 
 
 1899 : The mental evolution of an industrial organism Workings of 
 machines watched and tabulated, but no regular record kept of 
 Board of Managers Mr. Frick' s changes Weekly lunches estab- 
 lished and full reports kept of deliberations Spirit of good-fellow- 
 ship supplants unfriendly rivalries Secrecy concerning business 
 discussed Official record of such a meeting Purchase of Bethle.- 
 hem machinery Important and costly additions New partner^ 
 admitted ; subject to the iron-clad agreement Steel car works
 
 xiv CONTENTS 
 
 projected Conneaut pipe works recommended An interesting 
 contract Arbitration versus litigation Conneaut furnaces 
 planned Various reports The reorganization of the company, . 275 
 
 CHAPTER XIX 
 
 THE ZENITH OF PROSPERITY 
 
 Carnegie's attempt to sell out to English investors in 1889 ; prompted 
 by reduced profits ; its failure Great increase in gains under Mr. 
 Prick's management An amazing record Secret figures revealed 
 How these results were reached Rapid extensions at principal 
 works The Frick Coke Company ; the use of its credit to finance 
 the Carnegie concern Fresh attempts to sell out Carnegie's esti- 
 mates of values and future profits Plans a reorganization ; in- 
 volves retirement of Frick Fresh overtures for purchase The 
 famous option; bonus $1,170,000 Break in money market ; fail- 
 ure of the syndicate's plans Carnegie refuses extension of option 
 Impressive description of the company and its amazing profits 
 Schwab's enthusiasm over future prospects; rails $12 a ton 
 England out of the race Other plans of reorganization ; failure 
 of them all, 293 
 
 CHAPTER XX 
 CARNEGIE'S ATTEMPT TO DEPOSE FRICK 
 
 Born of a quarrel, the company reaches its final form through conten- 
 tion Causes of Carnegie's animosity Intolerance of rivalship 
 Early effort to diminish Prick's prominence Differences concern- 
 ing price of coke Chagrin over the syndicate's failure to complete 
 purchase Ridiculous publication by Stead Annoyances caused 
 by advertisers The coke contract Carnegie's insinuation 
 Prick's resentment The matter becomes official Entry in min- 
 utes of company Carnegie tries to win Walker to his side 
 Schwab refuses to transmit Carnegie offer Prick's resignation 
 Carnegie not satisfied ; gives his orders to managers ; their reluc- 
 tance to act Schwab's difficult position Frick resists attempt to 
 force him to sell out ; Lovejoy and Phipps side with him Equity 
 suit instituted Prick's pleadings and Carnegie's rejoinder Peace 
 overtures Conference at Atlantic City, 316 
 
 CHAPTER XXI 
 THE FAILURE OF THE IRON-CLAD 
 
 Validity of the iron-clad agreement Its history Devised for control 
 of debtor partners Interest revocable New iron-clad of 1892 
 Phipps' energetic opposition to it ; not signed by senior partners 
 Agreement of 1897 ; signed only by Carnegie Renewed refusal 
 of Phipps to sign Agreement lies dormant until revived to meet 
 Frick case Extraordinary ritual to make it effective The docu-
 
 CONTENTS xv 
 
 ment quoted Schwab's compliance to Carnegie's orders; Love- 
 joy's independence Protests of Phipps and Frick Attempt 
 proves abortive, 336 
 
 CHAPTER XXII 
 THE ATLANTIC CITY COMPROMISE 
 
 The training of junior partners Lovejoy the only one to resist ; his 
 independence helps to a settlement; draws up agreement of con- 
 ciliation The Board meets at Atlantic City ; adopts Lovejoy agree- 
 ment Final transformation of Carnegie Steel Company Con- 
 solidation with the Frick Coke Company Enormous capitalization 
 The return of peace The Society of Carnegie Veterans, . . 346 
 
 CHAPTER XXIII 
 THE BILLION-DOLLAR FINALE 
 
 Prick's plans for Conneaut tube works; revived by Carnegie to force 
 purchase The famous bankers' dinner Schwab's speech ; bless- 
 ings of industrial peace Morgan impressed Carnegie's skilful 
 diplomacy Sale to Steel Trust Price paid Growth of Kloman's 
 little business ; from less than $5,000 to nearly $500,000,000, . 358 
 
 APPENDIX 
 
 Some extracts from the pleadings of Henry C. Frick in the equity 
 suit, , 365
 
 LIST OF PLATES.
 
 LIST OF PLATES. 
 
 PLATE I. 
 
 ANDREW KLOMAN, OUT OF WHOSE LITTLE FORGE GREW 
 
 THE CARNEGIE STEEL COMPANY... ...FACING TITLE PAGE 
 
 PLATE II. 
 HENRY PHIPPS, OF KLOMAN AND co. ; KLOMAN AND PHIPPS ; 
 
 CARNEGIE, PHIPPS AND CO., LTD. J THE CARNEGIE 
 
 STEEL CO., LTD. ... ... ... FACING PAGE 4 
 
 PLATE III. 
 
 HENRY PHIPPS; ANDREW CARNEGIE; JOHN VANDEVART. 
 TAKEN IN 1865 DURING A WALKING TOUR IN ENGLAND. 
 
 FACING PAGE 24 
 
 PLATE IV. 
 
 THOMAS M. CARNEGIE, AT THE AGE OF NINETEEN. 
 
 FACING PAGE J2, 
 
 PLATE V. 
 CAPT. \V. R. JONES, TO WHOSE GENIUS WAS PRINCIPALLY 
 
 DUE THE FIRST SUCCESS OF THE EDGAR THOMSON 
 
 STEEL WORKS ... ... ... ... FACING PAGE 104
 
 LIST OF PLATES continued. 
 
 PLATE VI. 
 WILLIAM P. SHINN, FIRST MANAGER OF THE EDGAR 
 
 THOMSON STEEL WORKS ... ... FACING PAGE 124 
 
 PLATE VII. 
 ANDREW CARNIEGIE IN 1884. ... ... FACING PAGE 132 
 
 PLATE VIII. 
 BESSEMER CONVERTER IN OPERATION. ... FACING PAGE 146 
 
 PLATE IX. 
 HENRY CLAY FRICK. ... ... ... FACING PAGE 168 
 
 PLATE X. 
 
 THE EDGAR THOMSON STEEL WORKS, BRADDOCK, PA. 
 THE HOMESTEAD STEEL WORKS, MUNHALL, PA, 
 DUQUESNE STEEL WORKS, DUQUESNE, PA. FACING PAGE 256 
 
 PLATE XI. 
 HENRY W. OLIVER. ... ... ... FACING PAGE 264 
 
 PLATE XII. 
 FRANCIS T. F. LOVEJOY ... ... ... FACING PAGE 346
 
 LIST OF ILLUSTRATIONS.
 
 LIST OF ILLUSTRATIONS. 
 
 PAGE 
 
 THE HUMBLE BEGINNING ... ... ... ... i 
 
 A GERMAN TRIP HAMMER ... ... ... ... 2 
 
 YOUNG PHIPPS, TRUDGING ALONG THE CANAL BANK ON HIS WAY 
 
 TO KLOMAN'S ... ... ... ... ... 4. 
 
 PHOTOGRAPHIC REPRODUCTION ... ... ... ... n 
 
 SOME OF THEM BELONGED TO A SlNGING-CLASS ... ... 15 
 
 ANDREW CARNEGIE, GEORGE LAUDER, THOMAS N. MILLER, 
 TAKEN IN GLASGOW, 1862. THIS is ONE OF THE FEW 
 
 PORTRAITS SHOWING ANDREW CARNEGIE WITHOUT A BEARD l6 
 
 THOMAS N. MILLER. FIRST PARTNER OFKLOMAN AND PHIPPS, 
 AND WITH THEM THE FOUNDER OF WHAT AFTERWARDS 
 BECAME THE CARNEGIE STEEL COMPANY ... ... 18 
 
 THE TWENTY-NINTH STREET MILL IN 1886. JUST ACROSS 
 
 THE RIVER IS THE SITE OF KLOMAN*S FIRST FORGE ... 2O 
 
 PHOTOGRAPHIC REPRODUCTION OF ANDREW CARNEGIE'S LETTER 
 REPROACHING THOMAS N. MlLLER WITH HAVING INDUCED 
 HIM TO GO INTO THE IRON BUSINESS, WHICH HE HERE CALLS 
 A " MOST HAZARDOUS ENTERPRISE " ... ... ... 22
 
 LIST OF ILLUSTRATIONS continued. 
 
 PAGE 
 
 PlTTSBURG ... ... ... ... ... ... 24 
 
 EARLY STRUGGLES AND SUCCESSES ... ... ... 25 
 
 DISCUSSING CATHEDRAL ARCHITECTURE ... ... ... 26 
 
 A DIAGONAL LINE ACROSS WOOD STREET ... ... ... 28 
 
 31 
 
 THE THIRTY-THIRD STREET (UPPER UNION) MILL IN 1886. 
 FORMERLY THE CYCLOPS MILL, THE UNSUCCESSFUL FIRST 
 
 VENTURE OF ANDREW CARNEGIE INTO THE IRON BUSINESS 36 
 
 IRON RAILWAY BRIDGES ... ..< ... ... ... 3Q 
 
 THE PIPER AND SHIFFLER BRIDGE WORKS, AT TWENTY-NINTH 
 
 STREET, PITTSBURG ... ... ... ... 41 
 
 THE KUPTONE BRIDGE WORKS, AT FIFTY-FIRST STREET, 
 
 PITTSBURG, IN 1866 ... ... ... ... 45 
 
 J. L. PIPER, WHO WITH AARON G. SHIFFLER FOUNDED 
 
 THE KEYSTONE BRIDGE WORKS ... ... ... 47 
 
 THOMAS A. SCOTT, WHO GAVE ANDREW CARNEGIE HIS 
 
 START AND MANY A SUBSEQUENT LIFT ... ... 51 
 
 A RIVAL OF GREAT FURNACES... ... ... ... 54 
 
 THE LUCY FURNACE IN 1873 ... ' ... ... ... 57 
 
 THE EXPERIMENT WAS REPEATED .... ... ...' fj>
 
 LIST OF ILLUSTRATIONS continued. g 
 
 PAGE 
 
 BAD CESS TO HIM ... ... ... ... ... 65 
 
 THE LUCY FURNACES IN 1896... ... ... ... 67 
 
 FORT PITT ... ... ... ... ... ... 71 
 
 WILLIAM COLEMAN, WHO WITH HIS SON-IN-LAW, THOMAS M. 
 
 CARNEGIE, FOUNDED THE EDGAR THOMSON STEEL WORKS 74 
 
 A. L.HOLLEY, BUILDER PRINCIPAL BESSEMER STEELWORKS 
 
 IN AMERICA ... ... ... ... ... 77 
 
 POURING HOT METAL INTO THE JONES MIXER ... 
 MOLTEN METAL FLOWING FROM THE JONES MIXER ... 
 
 THE EDGAR THOMSON STEEL WORKS IN 1875 ... 
 
 THERE GOES THAT BOOKKEEPER... ... ... 
 
 JULIAN KENNEDY ... ... ... ... 
 
 A TRAIN OF ROLLS ... ... ... ... 
 
 SOME INSIDE FINANCIAL HISTORY ... ... 94 
 
 PHOTOGRAPHIC REPRODUCTIONS ... ... ... 96 
 
 THE EDGAR THOMSON STEEL WORKS IN 1890 ... 97 
 
 PAGE OF FIRST ANNUAL REPORT 9^ 
 
 AND WHY IN HADES SHOULDN'T I ... 104
 
 io LIST OF ILLUSTRATIONS continued. 
 
 PAGE 
 
 ANDY DROVK THE BAND WAGON... in 
 
 112 
 
 STEEL WORKS AT NIGHT ... ... ... ... 116 
 
 DAVID MCCAUDLESS, FIRST CHAIRMAN OF THE EDGAR 
 
 THOMSON STEEL COMPANY ... ... ... 121 
 
 PHOTOGRAPHIC REPRODUCTION OF PART OF A LETTER FROM 
 
 ANDREW CARNEGIE TO WILLIAM P. SHINN ... ... 123 
 
 BLOWING ENGINES FOR BLAST-FURNACES ... ... ... 136 
 
 LUCY FURNACES, SHOWING HOT-BLAST STOVES ... ... 138 
 
 DRAWING THE FINISHED COKE. THE METHOD OF CHARGING THE 
 
 RAW COAL IS ALSO SEEN. IT IS DROPPED FROM THE DONKEY- 
 CAR THROUGH AN OPENING IN THE TOP OF THE OVEN ... 139 
 
 CASTING-PIT OF BLAST-FURNACE, WHERE THE METAL is MADE 
 
 INTO ' PIGS" ... ... ... ... ... 140 
 
 TRAIN OF LADLES ... ... ... ... ... 142 
 
 FALLING INGOT-MOULDS WITH MOULTEN STEEL ... ... 146 
 
 STEEL INGOT ABOUT TO ENTER THE ROLLS... ... ... 147 
 
 HUGE INGOT BEING FORGED FOR ARMOUR-PLATE UNDER THE 
 
 I2.OOO-TON HYDRAULIC PRESS AT HOMESTEAD ... ... 148 
 
 THE RISE AND GROWTH OF HOMESTEAD ... ... ... 150
 
 LIST OF ILLUSTRATIONS continued. n 
 
 PAGE 
 
 AN ASSESSMENT NOTICE ... ... ... ... ... 153 
 
 SHOT ONE OF THEM IN SELF-DEFENCE. ... ... ... 158 
 
 WENT OUT OF THE ENTERPRISE WITH GRATEFUL HEARTS ... 160 
 
 THE HOMESTEAD STEEL WORKS IN 1886 ... ... ... 162 
 
 NINETY-TON STEEL INGOT AT HOMESTEAD ... ... ... 163 
 
 THE LEVIATHAN AND ITS ATTENDANT ... ... ... 165 
 
 COKE-OVENS ... ... ... ... ... ... 167 
 
 SMALL FARM CHORES ... ... ... ... ... 170 
 
 COKE-OVENS UNDER CONSTRUCTION ... ... ... 172 
 
 COKE-OVENS UNDER CONSTRUCTION ... ... ... 173 
 
 KLOMAN'S SUCCESSOR FORGING AN AXLE AT DUQUESNE ... 174 
 N 
 
 INGOTS GOING FROM THE DUQUESNE SOAKING-PITS TO THE 
 ROLLS. THE MECHANICAL PERFECTION IS SHOWN BY THE 
 
 SMALL NUMBER OF WORKMEN VISIBLE ... ... ... 176 
 
 THE OFFENSIVE PLACARDS ... ... ... ... 177 
 
 POURING STEEL FROM CONVERTER INTO LADLE ... ... 179 
 
 DUQUESNE FURNACES ... ... ... ... ... 181 
 
 PERSONIFICATION OF " A PRINCIPLE '' ... ... ... 184
 
 12 LIST OF ILLUSTRATIONS continued. 
 
 PAGE 
 
 LOOKS LIKE HARD WORK ..." ..." ... ... 1 94 
 
 PREFERABLE TO A PEERAGE ... ... ... ... 196 
 
 MORE AND MORE A MACHINE ... ... ... ' ... 197 
 
 NOT AN IDEALIST- ...- ... ... -... ... 198 
 
 A DETECTIVE... ... ... ... ... .'.. 200 
 
 STRIKERS ARRESTING A NEWSPAPER CORRESPONDENT ... 203 
 
 THE I ig-INCH PLATE-MILL ... ... ... 208 
 
 THE HOMESTEAD BATTLE ... ... ... ... 214 
 
 SHOOTING AT THE PINKERTON GUARDS FROM BEHIND BARRI- 
 CADES OF STEEL ... ... ... ... ... 2l6 
 
 THE BURNING BARGES, THE EVENING OF THE SURRENDER ... 22O 
 
 THE ATTACK ON THE SURRENDERED GUARDS ... ... 221 
 
 ATTEMPTED ASSASSINATION OF MR. FRICK ... ... ... 224 
 
 FlSHING FROM MORNING TO NIGHT ... ... ... ?34 
 
 MILITARY CAMP OVERLOOKING THE HOMESTEAD WORKS ' ... 237 
 THE SHERIDAN CAVALRY AND THE GOVERNOR'S TROOP GOING TO 
 
 THE RESCUE OF BATTERY " B'S." CANNON, WHICH THE 
 STRIKERS WOULD NOT PERMIT TO BE UNLOADED FROM 
 
 THE CARS . .... ... ... ... ... 239
 
 LIST OF ILLUSTRATIONS continued. 13 
 
 PAGE 
 
 AT BONNY AYR ... ... ... ... ... 246 
 
 I, TOO, KNOW A GOOD THING ... ... ... ... 247 
 
 AN ANTI-HARRISON CARTOON, WITH MR. FRICK REPRESENTED 
 
 AS BRINGING ON HIS HEAD THE TRIBUTE HE NEVER PAID 248 
 
 CHARGE OF THE MERCENARIES. MR. FRICK is REPRESENTED IN 
 
 THE LEAD, WITH MR. CARNEGIE FOLLOWING ... ... 249 
 
 UNCONDITIONAL SURRENDER ... ... ... ... 250 
 
 THE PIITSBURG PRESS ... ... ... ... ... 252 
 
 A CAMPAIGN PLEASANTRY ... ... ... ... 253 
 
 ORE-DOCKS AND VESSELS ... ... ... 254 
 
 GROUP OF MINERS NEAR LAKE SUPERIOR ... ... ... 258 
 
 AN OPEN-PIT MINE ... ... ... ... ... 260 
 
 AN ORE-TRAIN ... ... ... ... ... 263 
 
 A BUCYNUS SHOVEL AT WORK. FlVE CENTS. A TON FOR LABOR 264 
 
 PlLES OF IRON ORE READY FOR LOADING ... ... ... 267 
 
 BATTERED DOWN THE BARRICADES ... 269 
 
 ORE VESSELS IN CONNEAUT HARBOUR ... 2 7 
 
 ORE DISCHARGING MACHINES AT Co.NNEAUT ... ... 2/2
 
 14 LIST OF ILLUSTRATIONS continued. 
 
 PAGE 
 
 ORE DOCKS ... ... ... 2 7 3 
 
 ORE DOCKS BY NIGHT ... ... 2 74 
 
 IN A MESABA MINE ... ... 275 
 
 SUPERINTENDENTS AT LAUNCH ... ... 275 
 
 CONNEAUT HARBOUR ... ... ... ... 287 
 
 WHALEBACK ORE STEAMERS IN PORT ... ... ... 29! 
 
 THE ZENITH OF PROSPERITY ... ... ... 293 
 
 THE CARRIE FURNACES ... ... ... ... ... 296 
 
 SHOVELING ORE FROM ITS NATIVE BED INTO CARS ... ... 298 
 
 PHOTOGRAPHIC COPY OF LAST BALANCE SHEET BEFORE CON- 
 SOLIDATION ... ... ... ... ... 313 
 
 CARNEGIE'S ATTEMPT TO DEPOSE FRICK ... ... ... 316 
 
 OFFENSIVE ADVICE GLEAMING FROM BILL-BOARDS ... 319 
 
 PHOTOGRAPHIC COPY OF LETTER FROM MR. CARNEGIE IN 
 
 ENGLAND TO HIS TRUSTEES IN PITTSBURG ... ... 320 
 
 SET THE CITY OF CHICAGO ON FIRE ... ... ... 322 
 
 THE GREAT SHERIFF'S PUZZLE : How TO FIND CARNEGIE 
 
 AND HIS FORTY PARTNERS ... ... ... ... 334 
 
 SHOWERS OF GOLD ... ... ... ... ... 335 
 
 IRONCLAD AGREEMENT ... ... ... ... ... 336 
 
 THE CIRCUS SIMILE ... ... ... ... ... 346 
 
 THE BILLION-DOLLAR FINALE ... ... ... ... 358 
 
 IN THE CONVERSION OF THE HEATHEN ... ... ... 361
 
 THE HISTORY 
 
 OF THE 
 
 CARNEGIE STEEL COMPANY 
 
 
 CHAPTER I 
 THE HUMBLE BEGINNING 
 
 IN 1858 a small forge was started at 
 Girty's Run in Millvale, Duquesne 
 Borough, now a part of Alle- 
 gheny. It stood on the edge 
 of the straggling village, 
 and a muddy road ran past 
 it along the river - bank. 
 Judged by modern standards 
 it was an insignificant affair, 
 with a little engine and a 
 wooden trip-hammer that 
 first cumbrous mechanical substitute for the sledge-hammer. 
 The building was a light wooden construction, about a hundred 
 feet long and seventy wide ; but even in these narrow limits 
 the scanty machinery seemed at first lost. It had been 
 brought from the basement of a near-by dwelling where the 
 business was started five years before. In the course of time 
 the vacant corners and empty spaces were gradually filled with 
 axle-bars, small forgings, and iron scrap of various kinds, and 
 the place took on a busy air. 
 
 The men who owned this little shop were typical black- 
 smiths, deep-chested, muscular fellows, who had grown up in the 
 light of the smithy and the music of the anvil. They were 
 Andrew Klowman and his brother Anton, who had come from
 
 2 THE HUMBLE BEGINNING 
 
 Treves in Prussia a few years before. In time the superfluous 
 " w " of their name was dropped, and Anton became Anthony. 
 
 This little place, which its owners valued, good-will and 
 stock, at $4,800, was the beginning of one of the greatest in- 
 dustrial aggregates in the world, valued and bought, forty-three 
 years later, for nearly five hundred million dollars ! 
 
 In character the Kloman brothers were very different. 
 Andrew was a steady, plodding man of preternatural gravity, 
 earnest in his manner and watchful of every detail of cost and 
 
 A German trip-hammer. 
 
 From the American Manufacturer. 
 
 profit. Anthony, although the elder, had no high sense of 
 responsibility. He was careless and free with both money and 
 time; and the beer-can was often raised to his perspiring face. 
 Andrew preferred water, not only as costing less, but as leaving 
 him in better shape for bargaining. And in little things he 
 was a shrewd bargainer. He had been trained in a school 
 where a pfennig the tenth of a cent was the unit of expendi- 
 ture and a mark the equivalent of a dollar. Like the Prussian 
 workmen among whom his youth had been spent, he was suspi- 
 cious, and, at the outset of his career, more prone to insistence
 
 A THIRD INTEREST FOR $1,600 3 
 
 on his own rights than solicitous about those of others. Later, 
 he outgrew this ; but the trait led to great happenings. 
 
 The workmanship of Kloman Brothers, however, was fault- 
 less ; and they soon won a reputation for a reliable product. 
 Their specialty was axles, which they forged out of scrap-iron, 
 and sold to railroads and car-builders in and around Pittsburg. 
 The peculiarity of their product was caused by alternately re- 
 versing the direction of the fibres while forging the iron, which 
 gave their axles a superiority soon recognized by the trade. 
 The practice was original with Andrew Kloman. 
 
 Among their clients was the Pittsburg, Fort Wayne and 
 Chicago Railway, then called the Ohio and Pennsylvania, which 
 had shops and offices at Allegheny. The purchasing clerk of 
 this company was Thomas N. Miller, who was born in Allegheny 
 in 1835 and had grown up with a group of boys who were des- 
 tined to leave a deep-impress upon the industry of their town. 
 Miller early recognized Andrew Kloman's abilities, and fre- 
 quently put business in his way by introductions and recom- 
 mendations to manufacturers using axles and forgings; and a 
 certain intimacy was thus established between them. 
 
 In 1859 Kloman came to Miller, and told him that his busi- 
 ness was growing so rapidly that, if he could get money to install 
 a second trip-hammer, he could double his output and easily 
 market it. He estimated the cost of this addition at $1,600; 
 and he offered Miller a third of the profits of Kloman Brothers 
 if he would put this sum into the business. As Miller was 
 purchasing clerk for a company which dealt with the Kloman 
 Brothers, he had some doubts about the propriety of directly 
 associating himself with them ; and he so expressed himself to 
 Kloman. " But I have a young friend, " he added, " who might 
 represent me; and if you like I'll introduce him to you." 
 Kloman consented; and Henry Phipps was brought into the 
 negotiation. " 
 
 Henry Phipps at this time was just twenty years of age, hav- 
 ing been born in Philadelphia on September 27th, 1839. His
 
 THE HUMBLE BEGINNING 
 
 father was a shoemaker who had moved during Henry's child- 
 hood to Allegheny City, where he set up a little shop for him- 
 self in Rebecca Street. At the age of thirteen young Phipps 
 was earning a dollar and a quarter a week as general utility boy 
 with a jeweller named Barton, who had a small shop at the cor- 
 ner of Cherry Alley and 
 Liberty Avenue, Pittsburg. 
 In 1856 he entered the 
 office of Dilworth & Bid- 
 well, who had something 
 to do with iron and iron 
 spikes, and were also the 
 local agents of the Dupont 
 Powder Company. First 
 he was office boy, and later 
 became bookkeeper. In a 
 few years the firm was dis- 
 solved, Dilworth taking 
 the spike-mill and Bidwell 
 the powder business ; and 
 young Phipps was taken by 
 the latter into partnership. He was, however, still bookkeeper 
 for Dilworth & Bidwell when Miller proposed that he should 
 take an interest in the Kloman forge. 
 
 Young Phipps readily agreed to join Miller in the enterprise, 
 and set out to raise his share of the $1,600 required by Kloman. 
 The problem was not easy ; and it was only temporarily solved 
 when the elder Phipps agreed to mortgage his house for $800; 
 for, not knowing that this $800 would grow into $50,000,000, 
 he presently regretted his offer, and showed such distress that 
 his son felt obliged to release him from his promise. Finally 
 it was arranged that Miller should pay the whole of the $1,600 
 required by Kloman, and that Phipps should refund half of this 
 out of his profits in the business. In return he was to have 
 half of Miller's interest, which, for propriety's sake, was put in 
 
 Young Phipps, trudging along the canal bank 
 on his way to Kloman's.
 
 HENRY PHIPPS, 
 
 OF KLOMAN & Co., KLOMAN & PHIPPS; CARNEGIE, PHIPPS & Co., LTD.; 
 THE CARNEGIE STEEL Co., LTD.
 
 Plate II. 
 
 HENRY PHIPPS 
 
 OF KLOMAN & CO.; KLOMAN & PHIPPS; CARNEGIE, PHIPPS & CO., LTD.; 
 THE CARNEGIE STEEL CO., LTD.
 
 PROFITABLE WAR CONTRACTS 5 
 
 the name of Phipps. In addition, Phipps was to keep the 
 Kloman books. 
 
 This arrangement proved very satisfactory to all parties; 
 and, the second trip-hammer having been installed, the business 
 grew rapidly. Miller secured the Klomans the preference of 
 the Fort Wayne business, and recommended them to new firms 
 building cars for the railroad, such as Whittaker & Phillips 
 of Toledo, Haskell & Barker of Detroit, Jessup Kennedy & 
 Co. of Chicago, Barney Parker & Co. of Dayton, and others, 
 from whom the bulk of their trade was soon received. Phipps, 
 with the energy which has always characterized him, walked 
 three miles out to the Kloman shop after his day's work at 
 Dilworth's, posted up the .books, and then trudged back along 
 the dark towing-path of the Pennsylvania canal to his father's 
 house on Rebecca Street. And Kloman, with his sleeves rolled 
 up, worked with his brother and half-a-dozen men in the forge. 
 
 Then the war broke out, and axles, which had been selling 
 for two cents a pound, jumped to twelve cents a pound. And 
 when it came to filling government orders for parts of gun-car- 
 riages, there was no limit to price for quick deliveries. The 
 making of railway supplies dwindled ; and soon the firm was 
 working almost exclusively on high-priced government orders. 
 
 Under this stress of prosperity the primitive forge in Girty's 
 Run was found inadecfuate before the war was a year old. A 
 new and larger mill was therefore decided upon, and the firm 
 was reorganized. Here are the articles of partnership : 
 
 Articles of agreement made and concluded this sixteenth 
 day of November, A.D. 1861, by and between Andrew and An- 
 thony Kloman, of Duquesne Borough", of the first part, and 
 Henry Phipps, Jr., of Allegheny City, of the second part, all of 
 Allegheny County and State of Pennsylvania, witnesseth : 
 
 That the said parties have agreed, and by these presents do 
 agree, to associate together as equal copartners in the business 
 of manufacturing, selling, and vending axles, iron forgings, and 
 the rerolling of scrap into iron bar, and the general work of an 
 iron-mill and all things pertaining thereto.
 
 6 THE HUMBLE BEGINNING 
 
 It is agreed that the style of the firm shall be Kloman and 
 Company, of Pittsburg, Pa. 
 
 The capital stock shall be $80,000, to be paid in from time 
 to time as the wants of the business may demand, in equal pro- 
 portion by the said parties. 
 
 It is further agreed that a full and correct inventory shall 
 be made of the machinery on hand at present in the buildings 
 now occupied by Kloman and Co., of Duquesne Borough, and a 
 fair valuation shall be made thereof after the removal of the 
 same to the new establishment ; and in case the said copartners 
 shall not be able to agree on a valuation, then the same shall be 
 adjusted by arbitrators, of whom the parties of the first part 
 shall choose one, the party of the second part one, and the two 
 so chosen shall select a third ; and the valuation arrived at shall 
 be binding, the amount so valued shall be allowed to the said 
 Andrew and Anthony Kloman as cash invested in the new 
 company, and six per cent, interest shall be allowed thereon to 
 the said Andrew and Anthony Kloman, from time to time, until 
 the accruing profits to the party of the second part shall equal 
 his share of the excess so admitted to Andrew and Anthony 
 Kloman. 
 
 It is further agreed that all purchases made after said ap- 
 praisement of Andrew and Anthony Kloman's stock shall be 
 made share and share alike individually in cash advancements, 
 the said Andrew Kloman, the said Anthony Kloman, and the 
 said Henry Phipps each advancing one-third of all the cash 
 required for the business of the firm, up to the full amount of 
 the capital stock aforementioned. 
 
 It is further agreed, and to these presents the parties do 
 bind themselves, that the said Andrew and Anthony Kloman 
 shall not engage in any other business whatever and shall give 
 their undivided attention and time to the business of the said 
 copartnership, without charge or compensation, unless when 
 travelling on business of the company, when necessary travelling 
 expenses shall be allowed. 
 
 The said Henry Phipps, Jr., shall keep the books of the 
 firm, or exercise a supervision over them during such evenings 
 as he can devote thereto, but he shall not be required to further 
 exertions in the business than such time as he can consistently 
 spare from his other engagements, and he shall lend his influ- 
 ence so far as he can towards forwarding the interests of said 
 copartnership. 
 
 There shall be kept during the copartnership of said firm 
 full, true, and correct books of account by double entry in regu-
 
 ARTICLES OF PARTNERSHIP ; 
 
 lar sets, in which shall be entered all purchases, sales, accounts, 
 and other transactions, and the same shall be neatly kept and 
 posted by the party of the second part, or by his direction, and 
 shall be open at all times to the inspection of the copartners. 
 
 A correct and true inventory shall be made and entered in 
 the Stock Book on the first day of July or January of each year, 
 and the profits and loss estimated. 
 
 No purchases or sales exceeding $1,000 shall be made by 
 any one of the said copartners to any one person or firm, with- 
 out due consultation and approval of all parties hereto. 
 
 No partner nor partners shall sign any Bond, Mortgage, 
 Note, or any Obligation, or make any endorsement, or assume 
 any liability, written or verbal, for the benefit of any other 
 party, nor shall any money be loaned from the firm without the 
 written consent of all the parties hereto. 
 
 And it is further agreed that neither of the parties hereto 
 shall sell or assign his interest in said business without the 
 consent of all the partners being first obtained in writing. 
 
 Neither party shall draw out more than his share of the 
 profits, and the party drawing out the largest amount shall pay 
 interest at the rate of six per cent, on the excess drawn. 
 
 It is agreed that in case of th.e death of any parties hereto, 
 the business of the firm shall be carried on by the surviving 
 partners until the first of January or July following, as the case 
 may be, when an account of stock shall be taken and profits 
 ascertained ; and the one-third of the profits and stock, after 
 allowance of capital stock paid in by each of the partners 
 respectively, with interest, shall be paid over to the legal heirs 
 of the deceased partner, one-third to be paid in cash and the 
 remainder in equal instalments of one and two years. 
 
 Such copartnership shall commence on the first day of Janu- 
 ary, A.D. 1862, and embrace all contracts and business of the 
 present firm of Kloman and Company except their debts, and it 
 shall continue for and during the space of five years thereafter; 
 and if the said Henry Phipps, Jr., shall see fit so to elect, he 
 shall have the privilege of continuing for a further period of 
 three or five years. 
 
 And it is further agreed that at the termination of this 
 copartnership a valuation shall be had of the real and personal 
 property of the firm, to be arrived at as in page one of this 
 agreement, and one-third of the amount (after allowance of 
 original capital with interest to each partner) shall be paid to 
 the said Henry Phipps, Jr., by Andrew and Anthony Kloman 
 in cash, if there be that amount of money available; if not,
 
 8 THE HUMBLE BEGINNING 
 
 then so much as there is available, not less than one-third, and 
 the balance in one and two years with interest. 
 
 And it is agreed that in the event of Henry Phipps, Jr., 
 retiring January ist, 1867, he hereby binds himself to execute 
 and deliver to the said Andrew and Anthony Kloman a bond in 
 the penal sum of $10,000, conditioned that he will not engage 
 in a similar business for the space of three years from January 
 ist, 1867. 
 
 Witness the hands and seals of the parties aforesaid the 
 day and year above written. 
 
 ANDREW KLOMAN, L.S. 
 
 ANTON KLOMAN, L.S. 
 
 HENRY PHIPPS, JR., L.S. 
 
 Signed, sealed, and delivered in presence of 
 As to Andrew Kloman and 
 Henry Phipps, Jr., 
 
 A. LUDWIG KOETHEN. 
 As to Anthony Kloman, 
 
 CHAS. A. BURROWS. 
 
 It is eloquent of hope and self-confidence that in the clause 
 providing for the purchase of a deceased partner's interest, only 
 profits are mentioned. No one entertained the possibility of 
 losses; and the event justified their faith. This clause has a 
 further interest as the precursor of similar provisions in later 
 articles of association, finally elaborated into the so-called " iron- 
 clad " agreement which became so famous in the annals of the 
 Carnegie Steel Company. 
 
 An interesting annex to this document is the inventory of 
 the first Kloman forge. It shows with indisputable exactness 
 the humble beginnings of the business which afterwards grew 
 to such impressive proportions. It is as follows : " One frame 
 building situate in Duquesne Borough; one steam-engine; two 
 hammers; one furnace; sundry tools and merchandise; one 
 small frame house and lot." 
 
 The new mill was built on a large plot of ground at 
 Twenty-ninth Street, Pittsburg, leased from the Denny estate 
 at an annual rental of $324 for twenty years, with the right 
 of renewal. It was a substantial affair, and provision was
 
 AN EVENTFUL QUARREL 9 
 
 made for extensions. An inventory made after it had been a 
 year and a half in operation shows that it then comprised four 
 puddling-furnaces, four heating-furnaces, three boilers, one 
 large steam-engine, four small engines, one steam-hammer, 
 one trip-hammer, one tilt-hammer, one train of bar-rolls, one set 
 of muck-rolls, one squeezer, three blacksmith's forges, four 
 turning-lathes, one drilling-machine, one screw-cutting machine, 
 one safe, shafting, pulleys and belting connected with the above 
 machinery, sundry tools and merchandise, office furniture and 
 fixtures. This list is dated April i6th, 1863. It tells the 
 story of eighteen months of exceptional success, of progressive 
 management, of the development of new lines of business, of 
 earnings and profits put back into the business. Contrasted 
 with the meagre resources of the little Duquesne shop, the 
 Twenty- ninth Street mill, or the Iron City Forge as it was 
 called, was a large and well-equipped establishment, with a 
 large capacity for highly finished products worked up from the 
 crudest forms. 
 
 An idea of the great profits of a rolling-mill at this period 
 may be obtained from the fact that between 1860 and 1864 the 
 price of rolled bar-iron advanced from $58 to $146 a ton, while 
 the cost of pig-iron rose only from $22 to $59. 
 
 It will be noticed that, in the articles of partnership just 
 quoted, the Miller-Phipps interest was again put in the name 
 of Henry Phipps, the original objection to Miller's open associa- 
 tion with the firm being still thought valid; although it was 
 a matter of remark by the Klomans that Miller, when making 
 purchases for the Fort Wayne Road, drove a closer bargain 
 with them than did any other of their customers. The condi- 
 tion was nevertheless an unfortunate one ; and, as might have 
 been expected, it presently gave rise to disagreements which 
 ended in a quarrel and rupture. 
 
 It is necessary to advert at some length to this quarrel be- 
 cause it had an important bearing on the subsequent history 
 of the enterprise. Indeed, it may be said to have completely
 
 io THE HUMBLE BEGINNING 
 
 changed the current of events, giving them a shape contem- 
 plated by none at the outset, and bringing in new influences 
 which in the end dominated the firm and gave it a new name. 
 
 In June, 1862, Miller went to England for a holiday. In- 
 cidentally he made large purchases of railway supplies for his 
 road, which were shipped in haste in order to evade the war-tax 
 of thirty-five per cent, which had just been imposed on such 
 things. On his return in November he was met by Andrew 
 Kloman, who made a statement to him. This meeting and the 
 events which followed were so important that Miller at the 
 time wrote an account of them. In this statement he says : 
 
 " When in Europe was written to by Phipps that my pres- 
 ence would be a source of relief to them (Kloman & Co.). . . . 
 On my return I was soon approached by Mr. Kloman, who 
 stated that the business was growing too great for him, that his 
 brother was getting careless in business, and that he could not 
 sleep at nights owing to his many cares, and desired to know if 
 I would take an active interest in the concern and buy his 
 brother out. Mr. Phipps also joined in urging me to take active 
 part and buy out Anthony Kloman. I desired that if I did so 
 I might be privileged to stay with the P. Ft. W. and C. RR. 
 until January, 1865, but Mr. K. was very anxious that I 
 should take hold as soon as possible. So I accordingly com- 
 menced negotiations with Anthony, assisted by Phipps and 
 Kloman, and after considerable trouble induced him to sell at 
 $20,000, which was then estimated to be more than interest 
 conveyed was worth by two or three thousand dollars." 
 
 This transaction was closed on April i6th, 1863; and en- 
 dorsement of it was made on the original articles of partnership, 
 November i6th, 1861, quoted above. This endorsement reads 
 as follows : 
 
 Having by articles of agreement taking effect the sixteenth 
 day of April, 1863, bought the interest of Anton Kloman in the 
 above firm of Kloman & Co. and paid for same in hand the sum 
 of twenty thousand dollars (which sum covers other interests 
 also), and having done this by the assistance in influence and 
 by the desire and wish of the other two partners, and at a price
 
 PARTNERS AT ODDS u 
 
 set by Andrew Kloman, I do this the thirteenth day of June, 
 1863, on the original papers handed to me by Henry Phipps, Jr., 
 accept and assume the partnership of Anton Kloman to all in- 
 tents and purposes, to the full and complete responsibility in- 
 volved. 
 
 Witness my hand and seal the day and year above written. 
 
 THOMAS N. MILLER. 
 Witness, 
 
 J. H. MILLER. 
 
 It appears, however, from Miller's written statement that 
 before the actual transfer of Anthony's interest, Andrew Klo- 
 man betrayed great uneasiness at the passing of control into 
 the hands of his partners. To reassure him, Miller gave 
 Andrew Kloman a bill of sale of half the interest just acquired 
 
 NOTICE 
 
 IS HEREBY GIVEN THAT 
 THOMAS N. MILLER is not a member of our firm, 
 nor has he ny authority to traoiact Lmsinean on cur 
 account . 
 au20 B KL.OMAN fc CO. 
 
 [Photographic Reproduction.] 
 
 from Anthony ; and for a time Kloman seemed satisfied with 
 this. Presently he realized that he still owned only half the 
 stock of the company; and, to the surprise of Miller and the 
 alarm of Phipps, he demanded that the latter sell out to him. 
 Phipps naturally demurred to such summary ejection from a 
 business which was daily becoming more valuable, and which 
 he had helped to build up ; and he set himself to resist the pro- 
 posal. Then Kloman turned to Miller and asked him to sell ; 
 and presently all three were at odds. The situation was made 
 worse when Kloman discovered that Phipps, at Miller's sugges- 
 tion, had sold, some time before, a share of their first interest to 
 William Cowley, who had enlisted in the war and had died of 
 typhus fever contracted on the field of Fredericksburg. This
 
 12 
 
 THE HUMBLE BEGINNING 
 
 share was now offered for sale by the young soldier's brother, 
 who was his executor. It was bought back by Miller for 
 $8,500; but Kloman was naturally alarmed to learn that any 
 part of the business which bore his name should be sold with- 
 out his knowledge and in contravention of the articles of part- 
 nership; and he became further incensed against Miller. The 
 strain reached fracture-point when Miller, pending a satisfac- 
 tory settlement, withheld, as agent of the Fort Wayne Road, 
 certain payments due from it to the Kloman firm; and Phipp?, 
 who had tried to remain neutral, was forced to take sides 
 against his old friend Miller. 
 
 It unfortunately happened about this time that a paragraph 
 appeared in a local paper to the effect that Miller had bought 
 an. interest in the Kloman business, and that the style of the 
 firm was to be changed to Kloman & Miller. It was probably 
 one of those unauthorized statements which help to make 
 up the local news of a paper ; but it had the merit of truth. 
 Nevertheless, by the advice of Ludwig Koethen, his lawyer, 
 Kloman next day inserted an advertisement contradicting the 
 statement. This appeared in the Pittsbnrg Evening Chronicle 
 on Thursday, August 2Oth, 1863. 
 
 This was the condition of affairs when the services of 
 Andrew Carnegie were sought as peacemaker, with results that 
 recall the ancient fable of the lawyer and the oyster. As the 
 world knows, each of the litigants got a shell. 
 
 ihe litigants got a shell."
 
 CHAPTER II 
 
 Carnegie's Birthplace. 
 
 "A MOST HAZARDOUS ENTERPRISE" 
 
 ANDREW CARNEGIE was 
 born in a little tile-roofed cottage 
 in Moodie Street, Dunfermline, 
 Scotland, on November 25th, 
 1835. His father was a weaver 
 of fine damasks, taking the weft 
 and warp from merchants and 
 working them up on his own 
 loom at home. The introduc- 
 tion of steam- looms and the ex- 
 tension of the factory system to the linen trade put Carnegie 
 and other hand-weavers out of work; and in 1848 he migrated 
 to America with his wife and two sons. Making their way to 
 Pittsburg, where they had relatives, Carnegie found work in the 
 old Blackstock cotton-mill on Robinson Street, Allegheny City ; 
 and young Andy presently joined him there as bobbin boy at 
 $1.20 a week. 
 
 They lived in a little black frame house which stood in the 
 rear of what is now 336 Rebecca Street, Allegheny a district 
 then known as Slabtown and later as Barefoot Square. The 
 mother eked out her husband's earnings by taking in washing; 
 and her evenings were spent in binding boots for the father of 
 Henry Phipps, who lived next door but one. 
 
 A little later, when young Andy was fourteen, he got a 
 position in the bobbin-turning shop of John H. Hayes, on 
 Lacock Street, at $3 a week. His duties were to fire a furnace 
 in the cellar with wooden chips and to assist in running a 
 small engine. Later he was made bill clerk of the factory, and
 
 14 "A MOST HAZARDOUS ENTERPRISE" 
 
 left when he was fifteen to become a messenger boy for the 
 Ohio Telegraph Company, Here he learned . telegraphy, be- 
 came an operator, and was taken in 1854, when he was nineteen, 
 into the service of Thomas A. Scott, then superintendent of 
 the western division of the Pennsylvania Railway Company. 
 
 A year later, in September, 1855, the father died. His 
 unmarked grave is in Uniondale Cemetery, Allegheny. The 
 house in Rebecca Street in which he lived had been purchased 
 out of his savings ; and this he left to his wife, who afterward 
 sold it for $1,500. 
 
 During the next few years young Carnegie engaged in 
 various outside enterprises, and through the aid of his chief, 
 Mr. Scott, often made money in them. Indeed, during this 
 fruitful period of his career, before he learned that "pioneering 
 don't pay," he appears to have been ready to go into any scheme 
 that was brought to his notice. Besides the Woodruff Sleeping 
 Car Company and the Columbia Oil Company, in both of which 
 Mr. Scott gave him an interest, and which are known to have 
 been the basis of his fortune, he had interests in a scheme for 
 building telegraph-lines along the Pennsylvania Railroad, in a 
 construction company, in a project for establishing a sutler's 
 business in soldiers' camps, in a horse-trading concern in con- 
 nection with General Eagan for the supply of cavalry mounts 
 to the Government, in a bridge-building company, in a locomo- 
 tive works, in the Duck Creek Oil Company, in the Birming- 
 ham Passenger [horse-car] Railroad, the Third National Bank, 
 the Pittsburg Grain Elevator, the Citizens' Passenger Railroad, 
 the Dutton Oil Company, and probably other ventures forgotten 
 by himself and all who knew him. By 1863, the date of his 
 entry into this story, when he was twenty-eight, he had made 
 quite a little money, and had been promoted to Scott's position 
 as local superintendent, with offices at the Outer Depot, Pitts- 
 burg. His brother Tom, some nine years his junior, was his 
 assistant. 
 
 As boys, Andrew Carnegie and Thomas N. Miller had be-
 
 THE ORIGINAL SIX 
 
 longed to a group which called itself The Original Six. This 
 also included William Covvley, who has been mentioned, James 
 R. Wilson, who reappears later, James Smith, and John Phipps. 
 The last-named was Henry Phipps' brother, who died in youth. 
 The Original Six took walks in the country together, met at 
 each other's homes, and some of them belonged to a singing- 
 class conducted by Ludwig Koethen, the lawyer, choir-master, 
 and assistant pastor of the Swedenborgian Church, of which 
 all the Carnegies were members. Henry Phipps, being four 
 years younger, belonged 
 to another group, which 
 included Tom Carnegie, 
 Henry \Y. Oliver, and 
 Robert Pitcairn. 
 
 Andy, as he was 
 generally called, was 
 looked up to by the rest 
 of the boys because he 
 was older than any ex- 
 cept Miller, who was 
 three months his senior, 
 and because of an as- 
 sertiveness in his man- 
 ner which the boys interpreted as evidence of fitness for 
 leadership. It was therefore not unnatural that both Miller 
 and his young friend Phipps should submit to him their 
 difficulties with Kloman. Miller, in particular, left his inter- 
 ests in the hands of Carnegie, whom he held as his dearest 
 friend. They had been the previous year in Europe together, 
 where Miller had tended him in a long and dangerous illness. 
 He had also tried to induce Kloman to admit Carnegie into 
 their partnership ; but Kloman would not hear of it. So that 
 in many ways Carnegie's selection as peacemaker was appro- 
 priate. It was in this strange guise that Dame Fortune, having 
 already gently tapped several times at Carnegie's door, now 
 
 " Some of them belonged to a Singing-Class."
 
 1 6 "A MOST HAZARDOUS ENTERPRISE" 
 
 began a regular tattoo ; but so busy was he with his little 
 schemes that many years passed before he realized the meaning 
 of the noise. 
 
 Carnegie's efforts in the interests of harmony produced 
 nothing but fresh discord, until at length he decided upon the 
 
 ANDREW CARNEGIE. 
 
 GEORGE LAUDER. 
 
 THOMAS N. MIU.ER. 
 
 Taken in Glasgow, 1862. This is one of the few portraits showing Andrew Carnegie 
 
 without a beard. 
 
 elimination of the chief cause of trouble by ousting Miller him- 
 self. This was not his avowed intention; but it was the result 
 of his method of restoring peace. A new partnership agree- 
 ment was drawn up, dated September ist, 1863, in which
 
 THE FIRST " EJECT U RE" 17 
 
 Miller, in lieu of four-ninths, was given one-sixth, and made 
 a special partner. The capital of the company, now known as 
 Kloman & Phipps, was to be $60,000, and was to run for six 
 years and four months; but there was a clause reading: 
 
 " But if at any time during the term aforesaid the "said 
 Kloman and Phipps shall desire to terminate the same as to the 
 said special partner, then upon the said Kloman and Phipps 
 giving to the said Thomas N. Miller sixty days' notice in writ- 
 ing, and jointly signed, of their desire to that effect, the interest 
 of him, the said Thomas N. Miller, shall at the end of said 
 sixty days, and upon the payment to him of the capital invested 
 by him and share of profits coming to him, or, in case of loss, of 
 the total amount of capital still remaining due to him, retire 
 from said firm, and his interest therein shall at that time wholly 
 cease, and the same shall in such case accrue to the said Henry 
 Phipps, Jr., as having a pre-emption right thereto, upon his 
 paying in the capital for the purchase thereof." 
 
 This agreement was signed by all the parties, Miller adding 
 to his signature a protest " against the sixty days." 
 
 In the course of a few months fresh disputes occurred, and 
 Miller was served with the sixty days' notice of expulsion. 
 
 Upon this Andrew Carnegie and his brother Thomas M. 
 Carnegie both drew up written and signed statements of their 
 connection with the quarrel ; and in these appears for the first 
 time the fact that Tom Carnegie had been admitted into the 
 partnership with money which his brother had furnished, and 
 that, in addition, to quote from Andrew's statement: "In the 
 event of Miller's ejecture one-half of this interest would fall to 
 my brother." This was the way in which the Carnegies first 
 went into the iron business. 
 
 In regard to the merits of the dispute itself, it is impossible 
 after this lapse of time to unravel the tangled evidence. The 
 suspicions and vacillation of Kloman seem to have contributed 
 more than anything else to the quarrel. First he wished to be 
 rid of his brother. Succeeding in this, he became desirous of 
 sacrificing Phipps in order to regain the lost balance of power.
 
 i8 
 
 'A MOST HAZARDOUS ENTERPRISE" 
 
 Finally, he preferred to force out Miller, probably realizing 
 that his greater financial strength made Miller more dangerous 
 than Phipps, who, beyond his small salary, had nothing but his 
 interest in this firm. The elder Carnegie says in his statement 
 that Kloman was alarmed lest Miller and Phipps should have a 
 controlling interest. " A violent quarrel ensued, and the par- 
 ties were embittered toward one another. Finding Miller ob- 
 stinate and determined Mr. 
 K 1 o w m a n eventually 
 thought Phipps would be 
 more desirable as a member 
 of the firm ; and they be- 
 came friendly disposed as 
 the breach widened between 
 Miller and Klowman. For 
 some weeks," adds Carne- 
 gie, " scarcely a day passed 
 that I did not see one or 
 more of the parties. Hear- 
 ing both sides, I was fully 
 satisfied I could not estab- 
 lish harmony upon the basis 
 of a common partnership. 
 I finally got all three to- 
 gether in my office and pro- 
 posed that Miller should 
 have his one-third interest 
 and be a silent (not special) member, Phipps and Klowman 
 transacting the business. This was agreed to ; but unfortu- 
 nately ill feeling was created about a trifle, the result aimed 
 at was lost, and the conference separated under angrier feelings 
 than ever. Time only served to increase the violence of the 
 quarrel." After making reference to Miller's having stopped 
 the Fort Wayne payments, Carnegie continues : " But I con- 
 sidered it so essential to Miller's standing that the notice 
 
 THOMAS N. MILLER. 
 
 First partner of Kloman and Phipps, and 
 with them the founder of what afterwards 
 became the Carnegie Steel Company.
 
 THE RUDIMENTARY "IRON-CLAD" 19 
 
 [i.e., the advertisement denying his partnership] be recalled, as 
 enemies were not wanting who began circulating slanderous 
 reports about his clandestine arrangement with Klovvman while 
 acting as agent of the Fort Wayne Road, that I insisted upon 
 Miller agreeing to anything that would reinstate him in the 
 eyes of the public as a legitimate member of the Klowman 
 concern." 
 
 This was the weakness of Miller's position; but it need not 
 have been fatal to it, since he had bought Anthony Kloman's 
 interest openly and in his own name. It is, indeed, impossible 
 to resist the thought that Andrew Carnegie compromised his 
 friend by giving serious attention to the puerile objections of 
 Kloman. Some of these, as quoted by Carnegie himself, are so 
 childish that one is astonished at their influence on Carnegie. 
 Kloman "told me," he writes, that he "found such a [special] 
 partner might possibly create trouble by insisting upon coming 
 into the mill, sitting in the office, talking to the men, etc., but 
 more especially he was afraid Miller might involve the firm in 
 some way, or attempt to do so, for revenge, or might insist 
 upon withdrawing his share of the profits at inconvenient times, 
 etc. To cover these objections I suggested that Miller's good 
 behavior might be secured by a clause giving the other part- 
 ners the right to eject him upon notice, provided the fears 
 expressed were realized. This was accepted and the present 
 papers executed. " 
 
 Having reached this extraordinary settlement with Kloman, 
 Carnegie telegraphed his brother to write Miller that he must 
 accept it, as otherwise " the position in which I [Andrew Car- 
 negie] would be placed would be that of an agent whose acts 
 were disavowed by his principal, and this would be the first 
 time during my life in which I had been so placed." 
 
 Miller therefore accepted the settlement under protest, and 
 allowed his interest to be cut down to what it was before the 
 purchase of Anthony's stock, and to hold even this interest 
 only on sufferance of his partners.
 
 MILLER'S CABBAGE PATCH 21 
 
 The incident closed for the time being, after Miller had 
 accepted his expulsion and allowed his capital to be put in the 
 name of T. M. Carnegie as trustee. Thenceforward it was a 
 partnership between Kloman, Phipps, and the younger Carnegie. 
 
 Even before the narratives of this quarrel were written 
 August 5th, 1864 Miller had quietly paid $400 to a gardener 
 named Gumming, as compensation for five acres of half-grown 
 cabbages which he destroyed to make room for a rival mill at 
 Thirty-third Street, Pittsburg, only four blocks from the Klo- 
 man- Phipps Iron City Forges. The lease bears date of July 
 ist, 1864. In this venture Andrew Carnegie, despite his 
 brother's interest in the Kloman mill, had a large share. The 
 list of organizers also included the names of Aaron G. Shiffler 
 and J. L. Piper, who had bridge-building works near, which 
 were to be supplied with iron from the new mill. There were 
 also the names of John C. Matthews and Thomas Pyeatte on 
 the association papers when these were published on October 
 1 4th, 1864. Pyeatte was the bookkeeper of the concern, and 
 Matthews was manager. The Cyclops Iron Company was the 
 name given to the new organization ; and the mill was designed 
 to be the best in Pittsburg. None of the men, however, except 
 Matthews, had had any practical experience; and Matthews 
 was handicapped by the ambitious plans of his associates, who, 
 he used to complain, "wanted him to build a $400,000 mill on 
 a $100,000 capital." The principal construction was 230 feet 
 long and 80 feet wide. The building and equipment of the 
 works occupied all winter; and when, in the spring, the ma- 
 chinery was started, the structure was found too weak for its 
 safe operation. 
 
 Tom Carnegie had watched with grave concern his brother's 
 connection with this enterprise ; and when his forebodings of 
 disaster seemed about to be realized he urged Andrew to seek a 
 union with the Kloman firm, so as to have the benefit of the 
 German's mechanical experience and skill in remodelling the 
 Cyclops Mill. Andrew, as was his wont when facing trouble,
 
 CARNEGIE REPROACHES HIS LUCK 23 
 
 laughed at his brother's anxiety, but decided to follow his ad- 
 vice. Overcoming Miller's objection to an alliance with his 
 recent opponents, Carnegie authorized his brother to open nego- 
 tiations with Kloman and Phipps for a consolidation of interests. 
 
 In the meantime the Twenty-ninth Street mill had been 
 successful beyond all expectation ; .and at the beginning of 1865 
 its capital was raised, to keep pace with its earning power, 
 from $60,000 to $150,000. The proposal for union with the 
 discredited Cyclops concern was naturally received by Kloman 
 and Phipps with coldness; but Tom Carnegie had a persuasive 
 manner, and he made liberal offers. Finally it was agreed that 
 Andrew Carnegie and his group should turn over the Cyclops 
 Mill and a lump sum of $50,000, to be divided among the 
 Kloman partners, in return for a little less than half of the 
 shares of a new company, of which Andrew Kloman was to be 
 manager. This was done; and on May ist, 1865, the Union 
 Iron Mills Company was organized with a capital of half a 
 million dollars. Thenceforward the two mills were known as 
 the Upper and Lower Union Mills, and are so known to-day. 
 
 Andrew Carnegie's disappointment at the outcome of this 
 venture was carefully concealed at the time ; but he gave expres- 
 sion to it a couple of years later in a letter full of reproaches 
 which he sent to Miller. " I knew you had previously been 
 wronged," he wrote, " and felt you could not forget it. I did 
 what I could at the time to redress the wrong and went into the 
 most hazardous enterprise I ever expect to have any connection 
 with again, the building of a rival mill." And so, regarding it 
 as a "most hazardous enterprise," Andrew Carnegie found 
 himself fortuitously and complainingly thrust upon a road which 
 was to lead him to a fortune of $250,000,000. 
 
 The Cyclops Mill was built on five acres of land leased from 
 the Denny estate, which paid $5,000 to recover the leases held 
 by the market-gardener whose cabbages Miller dug up to make 
 room for his foundations. The annual rental was $2,000 for 
 twenty-one years, with a right of renewal for a similar term at
 
 24 "A MOST HAZARDOUS ENTERPRISE" 
 
 the rate which should be found current in the neighborhood. 
 In 1884 the Dennys ascertained that rentals of adjoining prop- 
 erty had increased fifteen-fold in twenty years. So they de- 
 manded $25,000 a year for the old-time cabbage-patch, but 
 finally accepted $12,000. Additions have been made from time 
 to time to the original five-acre tract by purchase and by filling 
 in the river front, until the Upper Union Mills now cover eight 
 acres. 
 
 PITTSBURG. 
 
 The Allegheny River on the reader's left, the Monongahela on the right. They 
 form the Ohio at their junction. The first Kloman forge was at the (left) end of the 
 furthest bridge up the Allegheny, seen in the above illustration. The second Kloman 
 forge was almost opposite, on the Pittsburg side of the river.
 
 HENRY PHIPPS, ANDREW CARNEGIE AND JOHN VANDEVORT. 
 
 TAKEN IN l8b5 DURING A WALKING TOUR IN ENGLAND.
 
 Plate 
 
 HENRY PHIPPS, ANDREW CARNEGIE AND JOHN VANDEVORT 
 
 TAKEN IN 1865 DURING A WALKING TOUR IN ENGLAND
 
 CHAPTER III 
 
 EARLY STRUGGLES AND SUCCESSES 
 
 THE war of the rebellion was draw- 
 ing to a close when the consolida- 
 tion of the two mills took place. 
 At once the demand for govern- 
 ment supplies ceased ; and it be- 
 came necessary not only to find 
 new markets, but to make other 
 kinds of goods than the Kloman 
 
 mill had been producing. This was no easy matter; and the 
 difficulty was increased by the need for finding an outlet for 
 the products of the new mill. Mr. Phipps says that business 
 runs wonderfully easily when it gets in a groove. But in the 
 beginning there are no grooves ; and the paths of trade for 
 the Union Iron Mills had to be created. 
 
 With the carelessness of youth Phipps gave little thought 
 to the making of trade-grooves for the new company ; but hav- 
 ing just received his first large sum of money, he thought 
 the time had come for a great and glorious holiday. Andrew 
 Carnegie shared the idea; and, accompanied by John Vande- 
 vort, they went to Europe on a nine months' walking tour, 
 leaving Kloman in charge of the Lower Mill, with Matthews, 
 under his supervision, to manage the Upper Mill. Tom Car- 
 negie was to help in such ways as he could. Miller, who was 
 now the largest individual owner, took no active part in the 
 direction of affairs; but he occasionally made the firm an 
 advance of ready money. For it soon became evident to these 
 young men, venturing in untried fields and with conditions of 
 trade undergoing a sudden and radical change, that the finan- 
 
 2 5
 
 26 
 
 EARLY STRUGGLES AND SUCCESSES 
 
 cing of their operations was going to be difficult. Recalling 
 this time, Miller long afterward used to express his wonder, 
 not only at their audacity, but at their luck. " It is no credit 
 to any of us that we did not 'bust ' twenty times," he used to 
 say. 
 
 As the weeks grew into months the ever-increasing financial 
 pressure developed in Tom Carnegie a resourcefulness which he 
 himself had never suspected, 
 and was a constant surprise 
 to those who had known 
 him only as his brother's 
 assistant. He had a win- 
 ning personality, and made 
 friends even when asking 
 a favor. His nature was 
 broadly human; and he 
 found a point of sympathetic 
 contact in everybody he 
 touched. The conviviality 
 which his more austere 
 brother afterwards so freely 
 condemned had a positive 
 monetary value during these 
 trying times, when the tour- 
 ists in Europe were discuss- 
 ing cathedral architecture and falling into bewildered rapture 
 over the beauties of the blossoming heather. If the situation 
 was saved for the Union Iron Mills Company, it was due to 
 Kloman's mechanical genius and Tom Carnegie's ability to 
 make friends and then promptly to convert them into cash. 
 
 Despite all this, it is doubtful if the firm had survived 
 the return of the holiday-makers had it not been for the lucky 
 speculation in oil which Miller had made in 1862, the returns 
 from which enabled him repeatedly to come to the company's 
 rescue. "A friend in need is a friend indeed," Tom would say 
 
 "Discussing cathedral architecture."
 
 COSTLY BLUNDERS 27 
 
 to Miller by way of preface when asking for a couple of thou- 
 sands to meet the wage-roll on Saturdays. 
 
 Then Kloman had his troubles. The new mill was even 
 more faulty in construction than he had supposed; and large 
 sums were needed for alterations. Mr. Phipps says it had 
 almost to be rebuilt. Andrew Carnegie, in his reproachful let- 
 ter to Miller, says: "We had to spend at least $30,000 on the 
 Upper Mills to remedy blunders. " Rarely, indeed, has a great 
 enterprise been started under such hopeless conditions; and 
 had it been known how hopeless they were, it is likely that the 
 partners would have given up the struggle in despair and gone 
 back to their bookkeeping and their telegraph instruments. 
 
 Presently the tide turned. The railroads throughout the 
 South were being rebuilt, the West was opening up, the Union 
 Pacific was under way, and a general revival of the iron trade 
 took place. Tom Carnegie had the benefit of the ripe experi- 
 ence and solid judgment of William Coleman, a pioneer in the 
 Pittsburg iron business, whose daughter he was hoping to wed. 
 Under Mr. Coleman's direction the energies of the firm were 
 directed into the channels which Kloman had partially known 
 before the war; and the" boom in railroad-building came in 
 time to save the Union Mills. In addition, a new outlet for 
 their product was opened through the connection which Andrew 
 Carnegie had formed with the bridge-building firm of Piper & 
 Shiffler, afterwards known as the Keystone Bridge Company. 
 This concern now bought all its shapes and most of its struct- 
 ural material from the Union Iron Mills; and soon the altera- 
 tions which Kloman made in the Upper Mills enabled him to 
 roll beams large enough for bridge purposes. 
 
 In the spring of 1866 Phipps and the elder Carnegie re- 
 turned from their European trip ; and the former at once assumed 
 financial management of the company, thereby taking upon him- 
 self a burden which never left him for twenty years. In 
 these days of mammoth financial operations we are so accus- 
 tomed to see tens and even hundreds of millions raised for this,
 
 28 
 
 EARLY STRUGGLES AND SUCCESSES 
 
 that, or the other purpose, that it is difficult to conceive of the 
 greatest constituent company of a billion-dollar organization 
 having trouble to find money to pay the wages of its workmen. 
 But Phipps had years of such experiences; and more than once 
 the men were obliged to accept, in lieu of wages, orders for 
 groceries on a local store. An amusing circumstance is recalled 
 to illustrate the chronic nature of this effort to do business 
 without adequate capital. 
 
 Mr. Phipps had an old black mare, Gypsy, which he used to 
 drive from one bank to another. This old horse made the 
 rounds so often that it 
 would stop of its own 
 accord whenever it came 
 to a bank; and it would 
 make a diagonal line 
 across Wood Street from 
 the Citizens' National to 
 the First National, and 
 then on to the Third Na- 
 tional, stopping before 
 each bank and quietly 
 waiting until Mr. Phipps 
 had arranged for the day's necessities. It was impossible to 
 drive this old horse in a straight line on Wood Street. 
 
 The president of one of the old Pittsburg banks recently 
 said to the present writer concerning those times : "What we 
 used to admire in young Phipps was the skilful way in which 
 he could keep a check in the air for two or three days." 
 
 For a while financial conditions became easier ; but before 
 Mr. Phipps had grown accustomed to the change a fresh strin- 
 gency arose through an unwise incursion into a new field. 
 
 There was a pipe-works adjoining the Lower Mill, and some 
 one suggested to Andrew Carnegie that it would be a good 
 thing to buy this property; it would round out their holdings, 
 besides providing them with a new market for their iron. The 
 
 'A diagonal line across Wood Street."
 
 CARNEGIE'S OFFER TO SELL OUT 2 9 
 
 plan commended itself to the elder Carnegie, who was always 
 on the alert for new uses for the product of the mill; but Tom, 
 who often served as a balance-wheel to his brother's over-san- 
 guine temperament, and who, moreover, had had some personal 
 experience of the difficulty of financing a growing business 
 with a stationary capital, strongly opposed it, and showed that 
 the sort of iron used in the pipe-works was not the kind the 
 Union Mills produced. His opposition was nevertheless over- 
 ruled. "Tom was born tired," Andy used to say in excuse 
 of what he considered his brother's lack of enterprise. So the 
 pipe- works were acquired at a cost of $36,000; and soon af- 
 terwards they were burned down while only partially insured. 
 The loss in cash amounted to $25,000; but Mr. Phipps used 
 to say that this was offset by the advantage of being rid of a 
 white elephant, and by the comfort of $i 1,000 insurance money 
 in the till. 
 
 Despite the prosperous condition of the iron trade at this 
 time the difference between pig-iron and rolled bars was still 
 about $50 a ton the loss on the pipe-works, joined to that 
 resulting from the faulty construction of the Upper Mill, gave 
 a very discouraging aspect to the balance-sheet of the company. 
 Indeed, the scanty profits of the first three years hardly redeemed 
 the enterprise from failure. While there was no actual deficit 
 there was practically no profit none at all, in fact, if due allow- 
 ance be made for depreciation of the plant ; and Andrew Car- 
 negie expressed a desire to get out of the business at any 
 price. Writing to Miller on September 4th, 1867, he says: 
 " I want to get out of them [the Union Iron Mills], and will do 
 so before long. Even if I can't sell my stock it can go." And 
 he adds that " $27.40 per share will be very gladly received." 
 As he then held 1,600 shares, he would thus have received 
 $43,840 for his entire interest. 
 
 It is proper to state that the letter from which this quota- 
 tion is made was part of an effort to get Miller to sell out of 
 the Union Iron Mills Company. In the fall of 1867 the old
 
 3 o EARLY STRUGGLES AND SUCCESSES 
 
 quarrel had broken out afresh. Indeed, Miller, from the date 
 of the consolidation, had consistently refused to sit on the 
 board of directors with his former opponents; and against 
 Phipps in particular he cherished grievances that hampered the 
 harmonious working of the new organization. And now, to 
 make matters worse, a dispute occurred between him and the 
 elder Carnegie, concerning some shares in the Columbia Oil 
 Company which the latter had sold him "at cost," but which 
 Miller had reason to believe had yielded Carnegie a profit of 
 over three hundred per cent. The actual facts of this trans- 
 action have never been ascertained; but in 1896, when Miller 
 officially came into possession of the old books of the Columbia 
 Oil Company, he found on the minutes the original record of 
 Andrew Carnegie's purchase of some treasury stock at $2 a 
 share, and a protest of other shareholders against it. As Miller 
 paid Carnegie $6.37*^ a share for similar stock probably not 
 the same he felt that he had been justified in his criticisms 
 of Carnegie. He later sold this stock, which had cost him 
 $637.50, for $72,000, after receiving many large dividends 
 which enabled him to make the loans to Tom Carnegie for the 
 Union Iron Mills Company. 
 
 Naturally this double dispute made Miller's position in the 
 company untenable ; and he set out to find some one to buy him 
 out. Carnegie offered to help him ; and the letters he then 
 wrote show the poor regard in which he held the enterprise. 
 In one he states that on his return from Europe he had " found 
 the Union Iron Mills, in my opinion, going as fast as they could 
 into bankruptcy " ; and he estimates (1867) " the mills as worth 
 (or as costing exclusive of the large sums paid to repair defect- 
 ive mill) $300,000. When we pay off $37,602.29 of debt," 
 adds Carnegie, "they will be worth that." A month later he 
 writes: "Profits are not quite $30,000" after running two 
 years and five months. " Our whole thing to-day could be re- 
 placed for $250,000, and we still owe a good deal upon it. I 
 could not recommend the purchaser to pay more than $27.50 for
 
 FOREH;X WORKMEN 
 
 it per share. I would like to get rid of my own at that 
 figure." 
 
 The purchaser here referred to was supposed by Miller to 
 be David A. Stewart; but when the sale was finally made the 
 buyer proved to be Andrew Carnegie himself. The price paid 
 was $32 a share for 2,300 shares. These included the holdings 
 of Matthews which Miller had previously bought. In this way 
 Andrew Carnegie increased his holdings to thirty-nine per cent 
 of the total number of outstanding shares. 
 
 The lack of harmony in the council-chambers of the Union 
 Iron Mills was reflected at the works ; for about this time a 
 
 strike occurred among the 
 puddlers. In an unex- 
 pected, and even a roman- 
 tic, way this strike brought 
 about changes that, in the 
 end, benefited the firm to 
 the extent of millions of 
 dollars, and did much to 
 put it in the van of pro- 
 gressive iron-workers. 
 
 At this date the Am- 
 algamated Union did not 
 exist ; but there were sep- 
 arate trade associations for 
 each class of labor. The 
 puddlers were strongly or- 
 ganized under the title of 
 the Sons of Vulcan. By 
 reason of falling prices a 
 demand had been made 
 
 on the puddlers in the Pittsburg district to accept a reduction 
 of wages. This being refused, a lockout resulted; and the 
 firm had its first fight with labor. It was not a very serious 
 
 'A large number of foreigners were brought
 
 32 EARLY STRUGGLES AXD SUCCESSES 
 
 one, for sympathetic strikes were then unknown ; and the rest 
 of the men in the mills continued to work as long as the 
 material on hand lasted or fresh supplies could be had. 
 
 During the summer of 1867 the manufacturers affected by 
 the strike raised a fund and sent to Europe for workmen to 
 take the places of the refractory puddlers. There being no 
 contract labor law to prevent it, a large number of foreigners 
 were engaged and brought over. They were of all kinds and 
 many nationalities. Some Germans who could not speak Eng- 
 lish were allotted to the Union Iron Mills because Andrew 
 Kloman, being a German himself, could easily control and 
 direct them. It is interesting to note that it was not these 
 drastic measures that broke the strike; for the increasing 
 boom in the iron trade soon absorbed the labor of all, at wages 
 even higher than before. 
 
 Among the Germans sent to Kloman was one named John 
 Zimmer, a bright, capable fellow, who knew not only his own 
 business but that of the next man. After he had been a little 
 time in the works, he described to Mr. Kloman a mill that he 
 had worked on in Germany, on which it was possible to roll 
 plates of various widths having well-finished rolled edges. 
 Such plates were unknown in America. The mill described by 
 Zimmer consisted of a pair, of horizontal rolls similar to the 
 ordinary plate-mill then in use, but having in addition two 
 movable vertical rolls that could be opened or closed at the 
 will of the operator. Mr. Kloman was at once struck with the 
 value of the improvement, especially for rolling material for 
 bridge orders; and with Zimmer's aid he erected the first Ger- 
 man mill in the country. This is the machine now known in 
 the trade as the Universal Mill. It was capable of rolling plates 
 from seven to twenty-four inches wide, and from three-six- 
 teenths to two inches in thickness, with rolled edges. From 
 the first day this mill was a mechanical success, and was the 
 forerunner of several improved mills -of the same character 
 afterwards erected at the Upper Mill and at Homestead. In-
 
 "PIOXKKRJXG DON'T PAY 33 
 
 deed, the great slabbing-mill which was erected at Homestead 
 in 1888 was a lineal descendant of the little Zimmer mill built 
 in 1867-68 at Kloman's. This slabbing-mill now turns out 
 thirty thousand tons of steel slabs a month; and, as it has 
 steadily increased its production from year to year, it seems 
 probable that its limit has not been reached even yet. Before 
 its erection the average weight of an ingot that could be used 
 to make plates direct was about one ton ; whereas ten- and 
 fifteen-ton ingots are now rolled down to a thickness of four to 
 six inches, then cut while red-hot into the lengths needed at the 
 plate-mill. 
 
 This little idea of the German workman has been worth 
 millions of dollars to the firm that imported him to take the 
 place of a striker. As for Zimmer himself, his reward was a 
 well-paid position as foreman of the mill he erected and of its 
 improved successors. He accumulated a competence, and was 
 believed to be possessed of upwards of one hundred thousand 
 dollars before he died. 
 
 Despite the vaunted progressiveness of the American manu- 
 facturer, these machines, open to the inspection of anybody who 
 passed through the Union Mills, were but slowly adopted by 
 other firms. Even Andrew Carnegie, after twenty years' experi- 
 ence of the excellencies of the German mill, in consonance 
 with his dictum, " Pioneering don't pay," opposed the erection 
 of the slabbing-mill at Homestead ; although he afterwards be- 
 came an enthusiastic admirer of its work. The Carnegie works 
 to-day have still the most perfect-running Universal mills in 
 the country ; and there is not another slabbing-mill in the world 
 to compare in power, size, and efficiency with that at Home- 
 stead. Within five miles of Homestead, one of the largest 
 plate-mills in the country is producing, from the ingots which 
 it necessarily uses, not more than one-third the product of a 
 similar mill at Homestead, which works up the slabs made on 
 the giant descendant of the little Zimmer mill. 
 
 In the larger sphere now open to it Kloman's inventive 
 3
 
 34 EARLY STRUGGLES AND SUCCESSES 
 
 genius found free scope. Even in the early days of the Lower 
 Mill he perfected many devices that resulted in improved 
 output and increased economies. Here he invented a machine 
 for " upsetting " the ends of eye-bars, which had previously 
 been made by forging and welding. At the Upper works he 
 put in a twenty-inch beam-mill, the first ever built in Pittsburg 
 that was planed and fitted complete, the rough casting style 
 having been the rule ; and on this were rolled the first beams 
 made in Pittsburg. He also erected the first Siemens re- 
 generative gas-heating furnace in Pittsburg. He invented a 
 machine for straightening and bending beams, channels, etc., 
 cold; and the disc-saw for cutting beams, etc., cold, was first 
 introduced by him. In designing rolls for unusual shapes he 
 showed a rare capacity. Indeed, his ingenuity in this line of 
 work was unequalled by any master mechanic in the country, 
 and made his connection with the Union Mills valuable beyond 
 compute. Naturally he won the admiration of the men under 
 him, who were well qualified to recognize his powers; and his 
 associates reposed entire confidence in his ability, gave him a 
 free hand in the works, and cordially sustained him in his pro- 
 gressive methods. 
 
 As financial director of the Union Iron Mills Company Mr. 
 Phipps did not, limit his duties to supervising accounts, bank- 
 ing transactions, and the mere routine work of the office. He 
 went into the mill and watched the men at work, studied the 
 machinery, and familiarized himself with all the details of manu- 
 facture. Then he wandered into other works, and, comparing 
 methods and results, suggested improvements and economies in 
 his own. The spirit of enterprise that sanctioned the Zimmer 
 experiment led him to institute scientific tests of structural 
 material ; and he was one of the first in his line of business to 
 call in the aid of the chemist. He was ever seeking to get 
 the cost-line of mill productions to the lowest point consistent 
 with the quality required by the structural engineer. To his 
 never-ceasing watchfulness are largely due the great economies
 
 MR. PHIPPS' INGENUITY 
 
 35 
 
 in production which placed his firm always beyond the reach of 
 competition. 
 
 On one of his trips abroad Mr. Phipps was passing through 
 a mill in Germany when he noticed that the piles made ready 
 for the heating-furnace, to be used for rolling " I " beams, con- 
 tained more than double the amount of scrap-iron rails used in 
 Pittsburg. He quietly made a sketch of the pile, and on his re- 
 turn gave orders to change the piles at the Union Iron Mills to 
 correspond with his sketch. He then had the resultant product 
 tested, and, finding that the economy still left the factor of 
 safety unimpaired, made the change permanent. The cost of 
 this trip to Europe was saved almost daily thereafter to his 
 firm. 
 
 Another great economy was effected by Mr. Phipps in 1872- 
 1873. In the quiet, unobtrusive manner in which he habitually 
 worked, he made a long series of observations at the two mills 
 and then did a little careful figuring. After cautiously verify- 
 ing his conclusions, he announced to his partners that at a cost 
 of one-third the price for which he believed he could sell the 
 Lower Mill, he could enlarge the Upper Mill so as to make its 
 product equal to that of both. The saving in cost of manage- 
 ment and in the handling of material he reckoned would exceed 
 $25,000 a year, a sum equal to five per cent, on their capital. 
 His partners, who had learned to trust his instinct for economies, 
 offered no objection to the plan except the difficulty of finding 
 a purchaser for the Lower Mill. This difficulty Mr. Phipps 
 solved with his habitual originality: he got up a company to 
 buy it ! At the same time he brought in a new influence which 
 eventually became of great value to the concern. This was his 
 brother-in-law, Mr. John Walker. 
 
 At this time Mr. Walker was entirely without experience 
 in the iron trade; but he had had a good commercial training 
 under his father Endowed with an extraordinary memory, he 
 quickly mastered the details of his new business, and in the 
 course of time he became a compendium of facts and dates, to
 
 
 
 ol 
 
 55 < 
 
 *
 
 ENTRY OF JOHN WALKER 37 
 
 whom his colleagues referred for information of all kinds bear- 
 ing on their business. Cautious in his undertakings and con- 
 servative in his methods, he had the confidence of the local 
 bankers; and his financial connections were invaluable to his 
 firm and to Carnegie, Phipps & Co. when he afterwards became 
 chairman of that concern. Of studious habits and logical cast 
 of mind, he showed his independence and intellectual honesty 
 by openly combatting the protectionist theory ac a time when 
 this was held by his associates as the rankest treason. The 
 same frank spirit was shown in all the relations of his business 
 life ; and he had, in an exceptional degree, the confidence and 
 even affection of his partners and others with whom he was 
 associated. 
 
 With Mr. Walker as a consenting nucleus, Mr. Phipps pro- 
 ceeded with the creation of a company to buy the Lower Union 
 Mill. The firm of Berry, Courtney & Wilson, which had been 
 a large purchaser of iron from Mr. Phipps' company, was on the 
 eve of dissolution ; and no difficulty was found in persuading its 
 most active member, Mr. John T. Wilson, to join Mr. Walker. 
 The firm of Wilson, Walker & Co. was thus formed ; and at 
 once it bought the business and patents of Berry, Courtney & 
 Wilson for $50,000. Half of this sum coming to Mr. Wilson, 
 he put his $25,000 into the new company. Andrew Carnegie 
 added $60,000 as a silent member of the firm ; and the rest of 
 the $200,000 capital was subscribed by John Walker, Alexander 
 Leggate, and Howard Morton. The two last named soon with- 
 drew from the firm. The old Kloman Iron City Forge, with its 
 little Zimmer mill, the four puddling-furnaces, now increased to 
 fifteen, its six heating-furnaces, four hammers, and five trains 
 of rolls, was now turned over to Wilson, Walker & Co., and the 
 Union Iron Mills Company concentrated itself upon the Upper 
 Union Mills. As makers of bar-iron, railroad-car forgings and 
 plates, the firm of Wilson, Walker & Co. ran as an independent 
 concern until 1886, when it once more became part of the 
 Phipps organization by inclusion in the firm of Carnegie,
 
 38 EARLY STRUGGLES AND SUCCESSES 
 
 Phipps & Co., Limited, at a valuation of $340,000 above 
 $87,000 mortgage. 
 
 In regard to the Upper Mill, even greater economies than 
 those foreseen by Mr. Phipps resulted from the change described. 
 When the additions were made they were prudently designed for 
 heavy work ; and soon the company was rolling all sizes of beams 
 up to fifteen inches for structural purposes, all kinds of channels 
 up to fifteen inches, almost innumerable sizes of angles, tees, Z 
 bars, and other structural shapes, and universal plates on two 
 large and improved Zimmer mills, of which the enterprising 
 German was placed in charge. By 1881, when the Union Iron 
 Mills were taken into the consolidation of various properties 
 under the name of Carnegie Brothers & Co., Limited, the origi- 
 nal long building had been surrounded by nine others, some 
 almost equal to it in length. They contained one eight-inch 
 train of rolls, one twelve-inch train, an eighteen-inch muck-train, 
 an eighteen-inch scrap-train, a rotary squeezer, all operated by 
 five large horizontal engines. There were, moreover, nine 
 Siemens furnaces, one Swindell furnace, twenty-one puddling- 
 furnaces, two reverberatory furnaces, besides extensive ma- 
 chine-shops full of costly tools. The plant was taken into the 
 consolidation at a valuation of $630,000. As the Lower Mill 
 was sold to Wilson, Walker & Co. for $230,000, it thus appears 
 that the plant had increased in value seventy-two per cent, in 
 sixteen years.
 
 CHAPTER IV 
 IRON RAILWAY BRIDGES 
 
 THE Keystone Bridge Company, to which ref- 
 erence has been made, was formed on April 
 25th, 1865, with a capital of $300,000. 
 The list of organizers included the names 
 of Aaron G. Shiffler, J. L. Piper, Andrew 
 Carnegie, Walter Katte, and James Stewart. 
 Its purpose, as stated in its prospectus, was 
 " the prosecution on an extensive scale " of the business of man- 
 ufacturing and erecting patent iron bridges " for railways, canals, 
 common roads, streets, &c., &c. Also wire suspension bridges, 
 ornamental bridges for parks and cities, pivot and draw bridges 
 for roads, canals and railways, . . . built according to plans and 
 specifications, as may be desired. " 
 
 The company is said further to have " purchased the exten- 
 sive Bridge Works of Messrs. Piper and Shiffler, located in the 
 Ninth Ward of the City of Pittsburgh, Pa., with the right for 
 the United States to manufacture and erect the celebrated Iron 
 Railway Bridges under the 'Linville & Piper' Patents, and 
 'Piper's Patent/ Wooden Bridges and Roof Frames." 
 
 The works are described as haVing ample facilities " for the 
 extensive contracts now in progress, and will be increased as 
 rapidly as found expedient, in order to complete promptly the 
 most extensive structures." 
 
 " The officers who superintend the manufacture and erection 
 of all structures " are said to be " practical men, with extensive 
 and varied experience, acquired in pursuing successfully, for 
 many years, the business of constructing and erecting Iron and 
 Wooden Railway Bridges, Roofs and Buildings. 
 
 39
 
 40 IRON RAIL WA Y BRIDGES 
 
 " These Iron Bridges have been in constant use on the Great 
 Pennsylvania Central Rail Road and its dependencies and con- 
 nections, for many years. The great Iron Railway Bridge over 
 the Ohio River at Steubenville, Ohio, with spans varying from 
 210 feet to 320 feet was erected by this Bridge Company, in 
 accordance with the prescribed plans and specifications 
 
 "The success of the 'Linville & Piper ' Patent Bridges has 
 been unprecedented ; for many years they have borne without 
 visible defect or deterioration, the immense traffic of the Penn- 
 sylvania Central Rail Road, Philadelphia and Erie Rail Road, 
 Northern Central Railway, Junction Rail Road, and others. 
 Miles of wooden bridge superstructure have been replaced by 
 permanent iron structures, by the superintending officers of this 
 Company, without detention to the business of the roads. No 
 single instance of failure, either in materials or workmanship, 
 has yet been reported." 
 
 Mr. W. H. Wilson, chief engineer of the Pennsylvania Rail- 
 road, writing from Altoona on July 2ist, 1865, says : 
 
 "Messrs. J. L. Piper and A. G. Shiffler have been engaged 
 for the last eight years under my personal observation, and for 
 some years previously, in erecting bridges for the Pennsylvania 
 Rail Road Company. The wooden bridges have generally been 
 on the 'Howe ' plan ; the iron bridges have been constructed 
 in the shops of the Company, from plans prepared by the Engi- 
 neer Department, some of them of boiler plate, but most of 
 them on the 'Pratt' plan of truss, with modifications intro- 
 duced at various times. All the work of raising and completing 
 these bridges has been performed by Messrs. Piper and Shiffler 
 in the most satisfactory manner. It affords me pleasure to 
 recommend them as unsurpassed for promptness, energy and 
 skill by any builders with whom I have had business relations. " 
 
 It thus appears that Piper and Shiffler had been extensively 
 engaged in building bridges of wood and iron for at least eight 
 years prior to the formation of the Keystone Bridge Company. 
 Andrew Carnegie, however, in his account of the business, 
 speaks as though it originated with the Keystone Bridge Com-
 
 42 IRON RAILWAY BRIDGES 
 
 pany, which he represents as his personal creation. In a short 
 biography which he recently published through the S. S. 
 McClure Newspaper Syndicate, he says : 
 
 " There were so many delays on railroads in those days from 
 burned or broken wooden bridges that I felt the day of wooden 
 bridges must end soon, just as the day of wood-burning locomo- 
 tives was ended. Cast iron bridges, I thought, ought to replace 
 them, so I organized a company, principally from railroad men 
 I knew to make these iron bridges, and we called it the Key- 
 stone Bridge Company. Development of this company required 
 my time, so I resigned from the railroad service in 1867." 
 
 Mr. Carnegie has an excellent verbal memory; but he is 
 especially prone to error when recalling events. He is, in fact, 
 constantly mistaking impressions for occurrences, as in this 
 case. That it is his memory which is here at fault is shown by 
 a further error in the same biography. Speaking of his entry 
 upon the manufacture of Bessemer steel he says : 
 
 " On my return from England [he is speaking of the year 
 1868] I built at Pittsburg a plant for the Bessemer process of 
 steel-making, which had not until then been operated in this 
 country, and started in to make steel rails for American railroads." 
 
 First noting that the construction of the first Carnegie Bes- 
 semer steel plant was not commenced until April, 1873, and was 
 not in operation until the end of August, 1875, it may be seen 
 by reference to any cyclopedia that the first Bessemer steel pro- 
 duced in America was made at Wyandotte, Michigan, in 1864, 
 and that the first Bessemer steel rails made in America were 
 rolled at the North Chicago Rolling Mill in presence of the 
 American Iron and Steel Institute in May, 1865, from ingots 
 made at Wyandotte. Some of these rails were laid in the track 
 of one of the railroads running out of Chicago ; and were still 
 in use ten years afterwards when the Carnegie firm made its 
 first Bessemer steel. Even if Mr. Carnegie's recollection had 
 been correct as to the date of this visit to England, it would 
 still be at fault in respect to the beginnings of Bessemer steel
 
 PIPER'S MECHANICAL GENfUS 43 
 
 rails in America; for there were produced no less than 7,225 
 tons of such rails in America in 1868. The prosaic fact is that 
 the earliest of the Carnegie steel enterprises was the eleventh 
 in America instead of the first to use the Bessemer process. 
 
 In themselves these -discrepancies are of little moment. It 
 is probable that not one reader in a hundred would notice them ; 
 but the author deems it his duty to the exceptional reader to set 
 forth the facts as he finds them.* 
 
 The Keystone Bridge Company, then, was simply the incor- 
 porated business of Messrs. Piper and Shiffler. Carnegie, 
 through his official position on the railroad, had long been 
 familiar with their work; and he had known Piper since 1858, 
 when the latter was employed for a time in the car shops at 
 Altoona, where Carnegie then lived. 
 
 Piper was a mechanical genius who was always inventing 
 
 * The author has taken such pains, by reference to original documents, to 
 establish the dates of every salient event in the history of the Carnegie Steel 
 Company, that he ventures, even at the risk of being thought unduly insistent, to 
 point out a further error of fact into which Mr. Carnegie has fallen through over- 
 confidence in his memory. In itself the matter is trivial ; but it may have a value 
 in the determination of other questions of fact which may arise. 
 
 In the same biography Mr. Carnegie says : " For my father, who had been 
 naturalized as an American citizen in 1853, na d died soon afterwards. ... At 
 theXge of sixteen I was the family mainstay." 
 
 The facts, as shown by the Allegheny county records on file in the Pittsburg 
 Court House, are as follows: On September I4th, 1855, the father of Andrew 
 Carnegie made a will, bequeathing a house and lot in Allegheny City to Margaret 
 Carnegie, his wife. Andrew was then within ten weeks of being twenty years of 
 age. This will was recorded on March 3Oth, 1858, when Andrew was in his 
 twenty-third year. 
 
 As regards "the family mainstay," the facts are as follows: During the 
 first of young Andy's working years, his wages were $1.20 a week, or $62.40 for 
 the year. At Lacock's he got $3 a week, or $156 for the year. Next he earned 
 $3.50, or $182 a year. Thus, at sixteen years of age, his total earnings had 
 amounted to about $400, or one-quarter as much as his father had invested in the 
 little home at the time of his death. 
 
 But the elder Carnegie did not die until Andrew had almost reached his 
 twenty-first birthday ; and he worked until within a few weeks of his death. In 
 the year of his father's death Andrew Carnegie's salary was $35 a month ; but he 
 lived away from home and had hardly more than sufficed for his own necessities. 
 Even after this his mother kept a railway lodging-house near Twenty-Eighth Street, 
 Pittsburg, where Robert Pitcairn, his successor on the Pennsylvania Railroad, was 
 one of her lodgers.
 
 44 IRON RAILWAY BRIDGES 
 
 things. One of his patents, still remembered by his associates 
 of that day, was a turn-table for locomotives ; and he afterwards 
 embodied some of the ideas it contained in a drawbridge. He 
 also devised an improved bridge-post which was extensively 
 used; and there were other things invented in conjunction with 
 Linville, who was bridge engineer for the Pennsylvania Railroad, 
 and later became president of the Keystone Bridge Company. 
 He was a man of impressive appearance, a physical giant, and 
 earnest and convincing in manner. At the same time he was 
 of singular trustfulness. One of the stories still current of Tom 
 Carnegie's ready wit bears on this trait of Piper's. 
 
 The Keystone Bridge Company enjoyed certain rebates or 
 discounts from the card rates of the Union Iron Mills Com- 
 pany, from which it bought most of its material. One time 
 when the price of iron had risen, the discounts were omitted 
 from the bill rendered to the Keystone Company, and the word 
 " net " appeared in their place. " What does that mean, Tom ? " 
 asked Piper as he indicated the word " net." Piper, like most 
 simple characters, loved a bargain; and Tom, knowing this, 
 hesitated to mention the withdrawal of discounts. So he an- 
 swered with his characteristic readiness, " Oh that ? That's 
 'nit. ' It means that there's nothing to be added ! " The reply 
 satisfied Piper, and he made no objection to the payment of the 
 bill. 
 
 Shiffler, the other founder of the business, had worked with 
 Piper in a contractor's gang under the firm of Stone, Quigley 
 & Co. on the Pennsylvania lines prior to 1857. This was 
 the period referred to by Chief Engineer Wilson, when he 
 said he had known them "for some years " prior to 1857 while 
 "erecting bridges for the Pennsylvania Rail Road." Here 
 they got the experience which made their firm so successful, 
 and qualified them for the direction of the Keystone Bridge 
 Company when that was formed. But neither of them origi- 
 nated the use of iron in bridges ; for this material had been so 
 used from the earliest days.
 
 4 6 
 
 The first iron bridge ever attempted was at Lyons, France, 
 in 1755. It was to have been an arch; but the work was aban- 
 doned, after a portion of the iron had been made, because of its 
 great cost. In 1777-79 tne fi rst i ron bridge was built by Abra- 
 ham Darby, over the Severn near Colebrookdale, in Shropshire, 
 the place taking the name Ironbridge. Its form is that of an 
 arch of i2O-foot span and 4 5 -foot rise. The next iron bridge 
 was built at Wearmouth in Devonshire. It was in the form of 
 a segmental arch of no less than 236-foot span; and it cost 
 ^27,000. In Sunderland, also in England, a bridge was built 
 in 1796, of large segments of cast iron. It was justly consid- 
 ered a wonderful achievement. Affixed to it was the motto Nil 
 desperandum auspice Deo ; and Sir Lowthian Bell says that every 
 traveller to the north of England considered himself bound to 
 visit what then was regarded as a most daring example of me- 
 tallic engineering. In France the iron foot-bridge across the 
 Seine near the Louvre was built in 1803 ; and during the ensu- 
 ing fifty years many other iron bridges were constructed in 
 Europe. 
 
 With these examples before them it is not surprising that 
 
 
 
 American engineers adopted iron for railroad bridges early in 
 the history of steam transportation. As early as 1841 Squire 
 Whipple, called the father of American iron railroad bridges, 
 patented an iron truss-bridge ; though even he was not the first 
 in the field. It is said that Tom Paine built an iron truss- 
 bridge. Be this as it may, there were iron bridges spanning 
 the Erie canal as early as 1840; and by 1847 a company the 
 New York Iron Bridge Company had been formed for the ex- 
 clusive manufacture of such structures. A bridge built by this 
 company on the Harlem Railroad is described in the American 
 Railroad Journal for November 27th, 1847; and an iron Howe 
 railroad bridge was already in existence on the North Adams 
 branch of the Boston and Albany Railroad, a few miles north of 
 Pittsfield, in April, 1847, where it was examined by Squire 
 Whipple. In 1848 Whipple built two iron bridges on the Erie
 
 SOME EARLY EXAMPLES 
 
 47 
 
 Railroad; in 1849 he built two more near the Chester junction 
 of the Newburgh branch of the Erie. In 1852-53 the first iron 
 railroad bridge of considerable span, being 1 50 feet to centre 
 of bearings, was erected on the Albany Northern Railroad at 
 the crossing of the Erie canal between the cities of Troy and 
 
 J. L. PIPER, 
 
 Who, with Aaron G. iShiffler, founded the Keystone Bridge Works. 
 
 Cohoes. It stood for thirty years, and was removed in good 
 condition to make way for a double-track bridge. A bridge of 
 the same description was built in 1854 for the Black River and 
 Utica Railroad at Utica. In 1855 one was built for the sarne 
 road at Boonville, Oneida County. During the decade between 
 1850 and 1860, which brings us to the time of Piper and
 
 4<S IRON RAILWAY BRIDGES 
 
 Shiffler, the firm of S. & J. M. Whipple alone built over a hun- 
 dred iron bridges of all kinds and shapes. In 1863 the Detroit 
 Iron Bridge Works was organized into a joint stock company; 
 and its prospectus states that its manager had " for some years 
 previous been engaged in the construction of iron bridges for 
 railways. " 
 
 Thus, so far from being the pioneer in the iron railroad 
 bridge business, Mr. Carnegie occupied a position a long way- 
 down the list. When he finally did become interested with 
 Piper and Shiffler it was not, as he alleges, in " cast-iron bridges." 
 When cast iron was in vogue for bridge structures in England, 
 wood was used in America; and when wood was replaced with 
 iron it was wrought iron, and later Bessemer steel, that was 
 used. The only parts of Piper & Shiffler's bridges that were of 
 cast iron were Piper's patent posts ; and these were a very small 
 part of the whole, which, of course, was of wrought iron. 
 
 It is also worthy of mention that Andrew Carnegie's princi- 
 pal interest in the Keystone Bridge Company was given to him 
 in return for services rendered in its promotion. He paid no 
 cash for any of his shares; but desiring to have a larger hold- 
 ing than that gratuitously assigned to him, he gave his note to 
 the company in payment of the increased interest, and the first 
 four dividends sufficed to liquidate the debt. 
 
 It is possible that the standards of commercial morality 
 were as high forty years ago as they are to-day. Business men 
 of that period aver that they were higher. It is none the less 
 certain that the ethics of railroad management in early days 
 were formed after other standards than those of modern times ; 
 else had there been more general -condemnation of the fault 
 which Andrew Carnegie discovered in Miller's "clandestine 
 arangement with Klowman while acting as agent of the Fort 
 Wayne Road." Such arrangements, not always clandestine, 
 seem to have been the rule in those days, and the early history 
 of the Carnegie enterprises affords many examples. Despite
 
 EARLY RAILROAD MORALS 49 
 
 . the fact that the principal business of the most important of 
 these enterprises was the manufacture of rails, railway struct- 
 ures, and railway material of various kinds, it was from the 
 salaried officials of railways that much of their first financial 
 support was received. Miller did not sever his connection with 
 the Fort Wayne road when he built the Cyclops Mill ; nor did 
 Andrew Carnegie resign from the Pennsylvania when he joined 
 him. Indeed, it was not an uncommon thing for the president 
 and vice-president of a railroad to own shares in a corporation 
 which obtained most of its business from such road. No doubt 
 the business was contracted for by faithful subordinates, and 
 was honestly and properly carried out by the contracting com- 
 panies; and while it is possible that no question of morals is 
 involved in the dual allegiance of such important officials, mod- 
 ern opinion would unhesitatingly condemn it as a breach of pro- 
 priety and good taste. 
 
 In the formation of the Keystone Bridge Company this in- 
 fraction of modern standards was especially conspicuous ; al- 
 though the matter-of-fact way in which Mr. Carnegie speaks of 
 organizing a company "principally from railroad men" shows 
 that he, at least, had no idea that the propriety of such a pro- 
 ceeding might be questioned. President J. Edgar Thomson, 
 however, had his interest appear on the company's books in 
 the name of his wife. Besides Colonel Scott, vice-president, the 
 Pennsylvania Railroad officials who became stockholders in 
 the Keystone Bridge Company included the chief engineer, the 
 assistant general superintendent, the superintendent of motive 
 power and machinery, and Andrew Carnegie, the superintend- 
 ent of the Pittsburg division of the line. There were also the 
 president of another road, two chief engineers, and a general 
 superintendent. Carnegie says he did not resign his position 
 on the Pennsylvania Railroad until 1867, two years after the 
 formation of the Keystone Bridge Company ; * and Mr. Pitcairn, 
 
 * Another error. He left the Pennsylvania Railroad in 1865, in his thirtieth 
 year. 
 
 4
 
 50 IRON RAIL WA Y BRIDGES 
 
 his successor on the railway, afterwards joined the Keystone 
 board of directors. 
 
 It is deserving of notice that most of these gentlemen wrote 
 letters of recommendation to the Keystone Bridge Company, in 
 which the work of Piper and Shiffler was spoken of in the most 
 flattering terms ; and these were published by the company as 
 an advertisement. Here for example are those from Mr. J. 
 Edgar Thomson and Colonel Scott : 
 
 PENNSYLVANIA RAIL ROAD COMPANY 
 
 President's Office 
 Philadelphia, Sept. 25th, 1865. 
 
 Messrs. Piper and Shiffler, who will hereafter conduct their 
 business of Bridge Builders under the name of the " Keystone 
 Bridge Company," have for many years been engaged, both as 
 employees and contractors, in erecting bridges of wood and iron 
 on the Pennsylvania Rail Road and its connections. From the 
 uniform success that has attended their plans, and the character 
 of the work executed, I have no hesitation in recommending 
 them to the patronage of the officers of rail road companies, for 
 the erection of these structures, either upon the well tested 
 plans they have been building, or upon such as may be pre- 
 pared for them. Their facilities at Pittsburgh for building 
 bridges will enable them to execute work with dispatch. 
 
 J.' EDGAR THOMSON, 
 
 President. 
 
 PENNSYLVANIA RAIL ROAD COMPANY 
 Office of the Vice President 
 
 Philadelphia, July 28th, 1865. 
 
 The Keystone Bridge Company for several years past have 
 been engaged in erecting iron and wooden bridges, &c., for the 
 Pennsylvania Rail Road Company and its connecting roads. 
 
 I have had ample opportunities for observing the character 
 of their structures, and can cheerfully testify to the responsibil- 
 ity and skill of the Company. I consider the iron rail road 
 bridges as constructed at their extensive works, in Pittsburgh, 
 Penn'a., the best that I am acquainted with. 
 
 THOMAS A. SCOTT, 
 Vice President Penn'a. R. R. Co. 
 
 With such powerful backing the Keystone Bridge Company 
 soon became one of the most important factors in the business
 
 SOME GREAT STRUCTURES 51 
 
 of bridge-building in the country. The extent of the work it 
 accomplished was officially set forth in 1883, when it was stated 
 that the bridges built by it, if placed end to end, would measure 
 over thirty miles in length, and that their cost exceeded 
 $23,000,000. 
 
 The most prominent of these structures, containing in each 
 
 Copyright, lw.'. 
 THOMAS A. SCOTT, 
 
 Who gave Andrew Carnegie his start and many a subsequent lift. 
 
 case the longest span of its kind then in existence, are the fol- 
 lowing : 
 
 Steel Arch. The Mississippi River bridge at St. Louis, 
 Mo. ; one span of 520 feet and two spans of 502 feet. Double- 
 track and double deck railway and highway bridge. 
 
 Steel Truss. The Missouri River bridge at Plattsmouth, 
 Neb. ; two spans of 402 feet each. Single - track railway 
 bridge for the Burlington and Missouri River Railway. Also, 
 the Ohio River bridge at Point Pleasant, VV. Va., 3,805
 
 52 IRON RAILWAY BRIDGES 
 
 feet long; channel span, 420 feet. Single-track railway bridge 
 for the Ohio Central Railway. 
 
 Iron Truss. The Ohio River bridge at Cincinnati, O. ; chan- 
 nel span, 5 19 feet. Single-track railway bridge for the Cincin- 
 nati Southern Railway. 
 
 Iron Swing Bridge. One span of 472 feet, over Raritan 
 Bay. Single-track railway bridge for the New York and Long 
 Branch Railway. 
 
 A description of the Keystone Bridge Works published by 
 the company at this time shows that they "are exclusively de- 
 voted to the manufacture of bridge and structural material, fin- 
 ished ready for erection. The shop buildings are fireproof, and 
 cover more than three acres of ground, and the capital invested 
 exceeds $1,000,000. The company employs over six hundred 
 men at these works and over three hundred and fifty in the 
 field, engaged in the erection of bridges, so that the total num- 
 ber of men on its pay rolls is about one thousand. The works 
 are equipped in the most comprehensive manner with special 
 machines and tools of the most approved type, among which 
 may be mentioned hydraulic, pneumatic and power riveting ma- 
 chines, a i 5O-foot multiple punch, shears, planers, lathes, steam 
 hammers, drilling and boring mills, rivet and bolt making ma- 
 chines, and a 3OO-ton hydraulic testing machine. The works 
 are operated day and night, being lighted by the electric light 
 after dark. The company has lately made extensive and costly 
 additions to its plant, designed solely for the successful and 
 economical working of steel, it having become evident that this 
 material, in the near future, is destined altogether to take the 
 place of iron. These additions consist in a gas heating furnace 
 and [Kloman's] upsetting machine for the manufacture of 
 steel eye-bars, a gas annealing furnace 54 feet long, the only 
 furnace of this kind so far built, and a multiple reaming 
 machine." 
 
 The growth of the plant is thus seen to have been great, 
 though not phenomenal. The position of the company at the
 
 A FINANCIAL STATEMENT 53 
 
 beginning of 1885 is shown in the following abstract from its 
 balance sheet : 
 
 Resources, 
 
 Real Estate $100,650.00 
 
 Shop Equipment account 272,267.36 
 
 Construction account 345,942.43 
 
 Sharpsburg and Lawrence 15r. stock 1,100.00 
 
 $719,959.'-'; 
 
 Available accounts $229,724.39 
 
 Overdue account (Pt. Pleasant Br ) 152,752.61 
 
 Doubtful accounts . . 2,964.48 
 
 Amount Inventory account 299,098.33 
 
 Cash 24,947.08 
 
 $709,486.89 
 
 Total Effects $1,429,446.68 
 
 Liabilities. 
 
 Due Maury Heirs on Mortgage $50,000 .00 
 
 " Union Iron Mills (C. Bros. & Co). . . 409,129.11 
 
 " Sundry accounts 134,423.37 
 
 Stock account $447,200.00 
 
 Profit and Loss a/c 388,694.20 
 
 835,894.20 
 
 $1,429,446.68 
 
 Fourteen years later, just before the Keystone Bridge Com- 
 pany became part of the United States Steel Corporation, its 
 balance sheet for 1899 showed a loss of over 67,000 on con- 
 tracts. Its principal gains came from castings and rivets ; and, 
 by a skilful manipulation of its "inventory adjustment," the 
 statement was made to show a slight profit. 
 
 Although one of the most talked-about branches of the Car- 
 negie business, the Keystone Bridge Works was one of the least 
 profitable, and, when stripped of its false character as a pioneer, 
 the least interesting of them all.
 
 CHAPTER V 
 
 - A RIVALRY OF GREAT FURNACES 
 
 THE Civil War, and 
 the great demand for 
 iron which a year or 
 two later followed it, 
 gave a great impulse 
 to the chief industry of Pitts- 
 burg ; and during the years 
 1866 to 1870 many schemes 
 were laid to meet the great local demand 
 for pig-iron. Up to that time the lack 
 of ore at convenient distances had han- 
 dicapped the smelting industry ; but when organized transpor- 
 tation made the ores of Lake Superior accessible, a more 
 promising aspect was given to schemes for smelting iron in 
 Pittsburg on a large scale. 
 
 In the fall of 1870 two of these projects assumed a definite 
 shape, and the owners of the Union Iron Mills were invited to 
 join one of them. This was the project of a number of iron 
 manufacturers, including Lewis Dalzell & Co., J. Painter & 
 Sons, Graff Bennett & Co., Spang, Chalfant & Co., Henry W. 
 Oliver of Oliver Brothers & Phillips, and William Smith, owner 
 of a large pipe-foundry. At this time there were only seven 
 small blast-furnaces in the Pittsburg district with a total prod- 
 uct of some seventy thousand tons a year; and pig-iron was 
 selling at $40 a ton. 
 
 The Union Iron Mills were large consumers of pig-iron, and 
 the scheme was not without attractions to Phipps and his asso- 
 ciates, especially when presented by the most important firms 
 
 54
 
 COLE MAN'S EXCELLENT ADVICE 55 
 
 in the business ; and after consultation among themselves, the 
 partners went to Mr. William Coleman for his advice. No one 
 was more fitted to give the young men wise counsel, for no one 
 had a closer knowledge of the iron trade or better business 
 judgment. Mr. Coleman considered the matter gravely, as was 
 his habit and then unhesitatingly advised against joining the 
 combination. He pointed out that if the members of the Union 
 Iron Mills Company wanted to go into the manufacture of pig- 
 iron, it would be better for them to build one furnace themselves 
 than to own one-seventh of two furnaces which would not be 
 under their control or management. This advice was accepted, 
 and the decision communicated to the gentlemen named, who 
 at once formed the Isabella Furnace Company, and started to 
 build two furnaces. Later they added a third. 
 
 On December ist, 1870, Messrs. Kloman, Phipps, and the 
 two Carnegies organized the firm of Kloman, Carnegie & Co. ; 
 and when the winter was over they began the construction of a 
 blast-furnace at Fifty-first Street, Pittsburg. This was the 
 first Lucy furnace, so called after the wife of Thomas M. Car- 
 negie, the daughter of Mr. Coleman, as the Isabella plant was 
 called after Mrs. Herron, the sister of one of the members of 
 the firm of Spang, Chalfant & Co. Important departures were 
 made from established usages in American blast-furnace con- 
 struction, and many English ideas were utilized. The Clinton 
 furnace of 1859, the two Eliza furnaces of 1861, and the two 
 Superior furnaces of 1862-63 were all forty-five feet high and 
 twelve feet in diameter at the boshes; and owing to the ill-suc- 
 cess of the fifteen-foot furnaces first erected, the twelve-foot 
 bosh continued to be the favorite dimension. The Struthers 
 furnace in Ohio, however, was fifty-five feet high, with sixteen 
 feet diameter of bosh ; and its large output over sixteen hun- 
 dred tons of iron in one month made it much talked about in 
 Pittsburg, especially as this result was achieved with raw coal. 
 The English idea of furnaces of large capacity thus came into 
 favor ; and both the Lucy and Isabella furnaces were made sev-
 
 56 A RIVALRY OF GREAT FURNACES 
 
 enty-five feet high, the former with twenty feet diameter of bosh, 
 and the latter with eighteen, afterwards changed to twenty feet. 
 A spirit of rivalry sprang up between the two concerns from 
 the outset. Isabella No. i and the Lucy went into blast about 
 the same time in the early summer of 1872; and each started 
 out by making 50 tons of pig-iron a day, which was a fair aver- 
 age at that time. Within a few weeks both furnaces increased 
 their output ; and by the end of the year the Lucy had made 
 13,361 tons, an average of nearly 500 tons a week, notwithstand- 
 ing a chill experienced in December. The Isabella followed 
 closely and produced 498 tons in a single week. The next year 
 the Lucy made 87 tons in a day and 578 tons in a week. Dur- 
 ing the early part of 1874 the Lucy kept ahead, and in Febru- 
 ary produced 593 tons ; but by August she was overtaken by 
 the Isabella's 612 tons. In October the Lucy shot ahead with 
 642 tons, and by the 24th of that month the Isabella had almost 
 caught up, with 651 against the Lucy's 653. On that day the 
 Lucy for the first time produced over a hundred tons ; and the 
 achievement was greeted with loud hurrahs at the works, and 
 heard of with incredulity by the iron trade. On November 2d 
 the Isabella's output for the week was 672 tons, and the follow- 
 ing week she broke all records with 702 tons. On December 
 24th she made 1 1 2 tons. Next year the contest between Mana- 
 ger Skeldingof the Lucy and Manager Crowther of the Isabella 
 was continued as fiercely as ever; and in October the former 
 passed his rival with 762 tons. In the same month Isabella No. 
 2 crept up with 714 tons, and the following month shot ahead 
 of the Lucy with 771/2 tons. The 800 mark was not crossed 
 until 1878, when the Lucy made 804 tons in a single week. In 
 March, 1880, she made 945 tons, and this was beaten by the 
 Isabella, February, 1881, with 1,000 tons. The trade gasped 
 with astonishment, and editors asked : " What will these Titans 
 do next?" On March 3Oth the same furnace made 215 tons, 
 and next day 2i7}/> tons, bringing her average for the week up 
 to 1,130 tons. In April she made 1,282 tons, and in October
 
 I
 
 58 A RIVALRY OF GREAT FURNACES 
 
 1,438 tons, the Lucy dragging behind with an average weekly 
 output of about 1,000. Mr. Kennedy then joined the struggle 
 with a new furnace at Braddock and ran the Isabella very close. 
 In 1883, as related elsewhere, he shot so far ahead that neither 
 the Lucy nor the Isabella was in the race until he himself took 
 the management of the Lucy and brought her daily output to 
 over 300 tons. But even this record was beaten again and 
 again by the same firm, as new furnaces were put in operation, 
 and the lessons learned by earlier experience showed managers 
 what to avoid and what to practise. 
 
 An interesting account of the Lucy Furnace in 1873 was 
 given in the Iron Age of that date, which is worth quoting. It 
 is as follows : 
 
 To one accustomed to the methods of blast-furnace construc- 
 tion as practised east of the Allegheny Mountains, the Lucy 
 Furnace possesses much interest. It may be said to embody 
 the best features of the Western practise, both in construction 
 and management, and will well repay a visit from any Eastern 
 iron master who may find himself in Pittsburg, either on busi- 
 ness or pleasure. The furnace is located on the bank of the 
 Allegheny River, about four [two] and a half miles from the 
 centre of the city. The location is attractive as well as con- 
 venient. From the top of the stack one overlooks a little valley 
 of unusual beauty on the one side, with the Isabella furnaces in 
 the distance and a pretty river between ; and on the other the 
 suburbs of the Iron City, overhung with its cloud of black smoke 
 not beautiful, indeed, but busy, prosperous, and progressive. 
 Switches connect the stock-house and cast-house with the Alle- 
 gheny Valley Railroad, which affords easy facilities of connec- 
 tion with the Pittsburg market and with the termini of the vari- 
 ous lines of transportation by which ores and fuel are received. 
 
 The Lucy Furnace was built by Messrs. E. J. Bird and 
 William Tate, and went into blast in May, 1872. It is seventy- 
 five feet high by twenty feet diameter of bosh. Like most W^est- 
 ern furnaces, it is an iron cylinder lined with fire-brick, with an 
 independent iron gas-flue, around which winds an iron stairway, 
 by means of which access is had to the top of the furnace. The 
 fuel and ores are carried to the tunnel head in barrows by means 
 of a pneumatic lift, from which they are run under cover of an 
 iron roof to the top of the stack and dumped by hand. In its
 
 A KLOMAN NOVELTY 59 
 
 external appearance the furnace is neater and more attractive 
 than the stone stacks of the East, and in many respects more 
 convenient. 
 
 The machinery of the works is of the best quality, though 
 of a very different character from that usually seen in the East. 
 There are three excellent blowing engines by Messrs. Macin- 
 tosh, Hemphill & Co. of Pittsburg, and four pumping engines 
 to raise from the Allegheny the water needed about the furnace, 
 by Messrs. Epping, Carpenter & Co., Keystone Pump Works, 
 Pittsburg. The locomotive used about the works is by Messrs. 
 Porter, Bell & Co. of Pittsburg. All the machinery is in the 
 best condition, being comparatively new and having only the 
 most careful and intelligent management. Steam is raised by 
 a battery of eight boilers, each sixty feet long by forty-three 
 inches in diameter. 
 
 The capacity of the furnace is about 550 tons a week, taking 
 the average of the seasons. The ores used are mostly Lake Su- 
 perior, specular and hematite. During the present season the 
 furnace will have received about twenty-five thousand tons from 
 the Kloman mine, the property of the company near Negaunee, 
 Mich. [This is an error.] Some Iron Mountain ores have been 
 smelted in the furnace; but they were found more costly than 
 profitable, and their use has been abandoned. The fuel is a 
 coke made from the slack of the bituminous mine near Pittsburg 
 at ovens located at Carpenter's station on the Pennsylvania 
 Railroad, about nineteen miles distant. The fuel costs but 
 $3.60 per ton at the furnace, and we are informed that the con- 
 sumption in the stack is only about one and a half tons to the 
 ton of pig-iron made. 
 
 Among the novelties to be seen at these works is a very 
 simple and practical machine for cooling slag, invented by Mr. 
 Andrew Kloman, one of the proprietors. Its object is simply 
 to cool the slag quickly in blocks of convenient size for removal, 
 thereby saving both time and labor. It consists of an annular 
 water trough, with supply and waste pipes, in which, by suitable 
 appliances, a series of cinder boxes are made to rotate so that 
 they may be brought successively under the slag spout. The 
 boxes taper slightly toward the bottom so as to admit of fhe 
 easy withdrawal of the slag cakes when sufficiently cool. On 
 the bottom of each box is placed an iron wedge with a broad, 
 flat head, upon which it stands upright, and with a hole in the 
 taper end by which it may be lifted out. The slag runs around 
 these wedges which stand up in the middle of the boxes and 
 project for some inches above the upper crust. Around, under,
 
 60 A RIVALRY OF GREAT FURNACES 
 
 and between the boxes water flows continuously, and their inner 
 surfaces are kept so cool that in a few minutes the slag is suffi- 
 ciently solid to be removed in carts. The transfer is effected 
 by means of a small hydraulic crane. The hook at the end of 
 the chain is fastened in the hole in the taper end of the wedge, 
 and the cake is lifted out of the box and deposited on the floor 
 of the cart, which has a square hole in its bottom to facilitate 
 the removal of the wedge. The slag cake is so placed that the 
 head of the wedge comes over the hole, and a smart blow with 
 a hammer causes it to drop out on the ground. The cake is 
 then carried off and dumped. In construction and operation 
 this machine is perfectly simple, and it may be worked so rap- 
 idly as to dispose of the slag as fast as it can be -run from the 
 spout. There are seventeen cinder boxes ; and by the time the 
 last has been filled the slag cake in the first is ready to be lifted 
 out and removed. The proprietors of the Lucy Furnace con- 
 sider it altogether the cheapest and best method of disposing of 
 the cinder they have ever tried, and we have no hesitation in 
 pronouncing it the most practical device of its kind we have 
 ever seen in use. 
 
 Some months ago the furnace got a chill, and but for the in- 
 genious manner in which it was cleared the company would have 
 suffered a heavy loss in consequence. The following account 
 of the means employed, which we take from a paper lately read 
 by E. C. Pechin before the American Institute of Mining Engi- 
 neers at Philadelphia, will be read with interest : " She had been 
 working well on low-grade ores of about fifty per cent., produ- 
 cing daily sixty-eight to seventy-five tons. There was on stack 
 five hundred tons of Republic ore one of the purest and best 
 of the Lake Superior ores, averaging over sixty-eight per cent, 
 of iron which had been procured for the purpose of making a 
 trial for Bessemer iron. This was charged by itself, and Mr. 
 Skelding, the founder, reports that he did not succeed in get- 
 ting a single cast when it came down, before the furnace chilled 
 from the hearth to the top of the bosh, some twenty-five feet. 
 Every effort was made to save her, but without avail ; and the 
 disagreeable duty of cleaning her out was begun. The hearth 
 was dug out some five or six, or perhaps eight, feet up, when Mr. 
 Skelding remarked, in the hearing of one of the proprietors, 
 that he wished he had a cannon. A mortar was forthwith pro- 
 cured from the arsenal, and they commenced firing shots into 
 the chilled mass. A large number of shots were fired and with 
 considerable success, bringing down from time to time portions 
 of the chill. But by and by the mass became pasty, and the
 
 CURRY'S GOOD WORK 61 
 
 cannon balls, of which they only had three, stuck fast. Mr. 
 Skelding put in a large charge of powder, and then, to the 
 amusement of the. bystanders, rammed the mortar full of cotton 
 waste, and on top of this placed a lump of hard ore weighing 
 about fifty pounds. This novel shot brought down the scaffold 
 and cannon balls, and the furnace is again running and doing 
 exceedingly well." As far as the writer knows no patent has 
 been taken out for this process (for a wonder!), so that it is 
 available for any furnace man who is so unfortunate as to have 
 a scaffold. 
 
 Another experiment is shortly to be tried at this furnace 
 which is novel, at least in this country. It is proposed to use 
 two tiers of tuyeres, one eighteen inches above the other seven 
 below and five above. There is a theory that by elevating the 
 zone of fusion a larger product of superior metal would result. 
 The Lucy Furnace will test this theory on a large scale and 
 under the most favorable circumstances, and the result will not 
 be without interest to all in the business. 
 
 This naive description gives a better idea of the primitive 
 methods of furnace practice then in vogue than could possibly 
 be obtained from any modern authority. 
 
 Much of the excellent work of the Lucy Furnace in early 
 years was due to the skill and enterprising management of H. 
 M. Curry, who remained an important factor in the success of 
 the Carnegie enterprises until his death in 1899. Mr. Curry 
 was born on January 3Oth, 1847, at Wilkinsburg, a suburb of 
 Pittsburg, where he spent his early years. At sixteen he joined 
 the army as a private, and served in the Fifth Army Corps as a 
 member of Company F, i 55th Pennsylvania Volunteers, for three 
 years, and was mustered out of service as a sergeant. He was 
 slightly wounded at the battle of Five Forks, but only spent a 
 few days in the hospital. His first position on returning from 
 the war was with the firm of Haleman & Caughey, pig-iron 
 brokers, where he attracted the attention of Mr. Phipps, who, 
 towards the close of 1870, gave him a position as pay and bill 
 clerk in the Upper Union Mill. In 1871 he was transferred to 
 the Lucy Furnace, where he was given charge of the record 
 department of furnace burdens. His simple cordiality won the
 
 62 RIVALRY OF GREAT FURNACES 
 
 devotion of the men, while his thoroughness and conscientious 
 attention to duty gained the confidence of his employers ; and 
 when, after two or three years, certain structural changes in the 
 furnace were decided upon, Mr. Curry was put in charge of 
 them. On the retirement of the first superintendent, William 
 Skelding, Mr. Curry, at the urgent recommendation of Mr. 
 Phipps, was put in his place, and under his management the 
 
 Lucy Furnace won the 
 records just described. 
 
 Of course such results 
 were not entirely due to 
 any one man's skill. Many 
 of the improvements made 
 were suggested by others ; 
 but Mr. Curry was so free 
 from conceit that he was 
 just as ready to cherish 
 the ideas coming from out- 
 side as he was to fondle 
 his own. 
 
 Another man to whom 
 no small part of the credit 
 of the improvement is due 
 was Mr. Whitwell, the in- 
 ventor of the famous stoves 
 that bear his name. In 
 
 "The experiment was repeated." 
 
 1873 this gentleman came 
 
 to Mr. Phipps, and showed him that if he would shape the bell 
 of the furnace so that the contents would be thrown toward the 
 sides, it would not only preserve the lining of the furnace and 
 save the great cost of frequent renewals, but it would result in 
 such a segregation of the contents as to make a better draught, 
 with resulting increase of output. The proposition was so revo- 
 lutionary that Mr. Phipps naturally hesitated to make the change ; 
 and Mr. Whitwell had a glass model of the improved furnace
 
 A WONDERFUL RECORD 63 
 
 made and erected in the Lucy yards. At once the beneficial 
 effect of the change could be seen through the glass as the 
 miniature loads of ore, lime, and coke were poured into the 
 model. It was a bitterly cold day when the demonstration was 
 made ; but the event was so important that the partners endured 
 the icy blasts for hours, and the experiment was repeated again 
 and again. All the partners conceded that it was eminently 
 successful but next day most of them were laid up with colds, 
 and Andrew Carnegie did not reappear at the works for a week. 
 When the change was made in the furnace the results predicted 
 by Mr. Whitwell were surpassed, and again a new furnace record 
 was made for the world. 
 
 In 1877 the second Lucy furnace was built, and " blown in " 
 on September 27th of that year. Its general dimensions were 
 those of the first Lucy furnace. By 1878 it made a monthly 
 output of 3,286 tons on a coke consumption of 2,973 pounds 
 per ton of iron, and in a single week it made 821 tons. In 
 twelve consecutive months the output was 33,931 tons on a coke 
 consumption of 2,850 pounds, a remarkable achievement at that 
 time. 
 
 The first Isabella furnace also made a wonderful record, 
 when it ran continuously from January, 1876, until May, 1880, 
 making a total output of 117,575 tons of pig-iron, an average 
 of 2,264 tons a month. The coke consumption averaged about 
 3,000 pounds. 
 
 The Lucy furnaces during all this time were the especial 
 care of Mr. Phipps. For months he almost lived in their vicin- 
 ity, and sat up with them at night when they were ailing as he 
 would have watched by the sick-bed of a favorite child. As he 
 had earlier watched the machinery at work at the Union Mills, 
 he now attended the operation of the furnaces night and day, 
 thinking, scheming, and studying them in every aspect. An 
 example of the ingenuity he displayed in his never-ending quest 
 of economies is here recalled. 
 
 One of the products of the furnace was known as mill-iron.
 
 64 A RIVALRY OF GREAT FURNACES 
 
 This was the iron resulting from a mixture in the furnace of 
 seventy-five to eighty per cent, of Lake Superior ore and twenty 
 to twenty-five per cent, of puddle-furnace cinder. The cost of 
 this cinder per unit of iron was less than one-tenth the cost per 
 unit of iron made of ore; but the cinder contained more than 
 three times the phosphorus that was in the same amount of ore, 
 which limited the use of the cheaper mixture. Mr. Phipps 
 knew that the Union Iron Mills, in common with all similar 
 works, made a large amount of heating-furnace or flue cinder, 
 which was considered a waste product and thrown out on the 
 river-banks. He quietly had some of this cinder analyzed, and 
 found it as rich in iron as the puddle-cinder. It also worked 
 equally well in the furnace, and carried less than one-fifth the 
 amount of phosphorus contained in the puddle-cinder. He 
 therefore changed the furnace mixture to sixty per cent, of flue- 
 cinder and forty per cent, of Lake Superior ore; and, despite 
 this great economy, a better pig-iron was produced than before. 
 This was kept a trade secret for years, during which thousands 
 of tons of flue-cinder were bought at prices much below the 
 cost of puddle-cinder. Indeed, the firm for years sold its pud- 
 dle-cinder through brokers at $1 and $1.50 per ton, which found 
 its way into the hands of a competitor, and in the same way 
 bought this competitor's flue-cinder for fifty cents a ton. Nat- 
 urally the Lucy Furnace was prosperous and making money 
 when rival concerns, thus disadvantaged, were running behind. 
 This incident, one of many that might be cited, fairly illus- 
 trates the character of the services which Mr. Phipps was con- 
 stantly rendering his firm ; for of course his discovery was only 
 used to benefit the company. It also recalls the fact that not 
 all the partners took the same broad view of their obligations 
 to the common interest ; for one of them, a protege and cousin 
 of the Carnegies, who had recently been admitted into the 
 partnership, engaged in a private speculation on the strength of 
 Mr. Phipps' discovery. He bought up all the flue-cinder he 
 could hear of; but, lacking a knowledge of the correct percent-
 
 PH1PPS\ THE POCKET-NERVE 65 
 
 ages, or being estopped by partnership obligations from making 
 them known, he could find no market for his cinder-heaps, and 
 he made a large loss. 
 
 Mr. Phipps acquired a reputation for close trading at this 
 time which is still remembered. In buying scrap-iron he had 
 to bargain with all sorts of odd characters, one of whom would 
 insist in the strongest brogue that " divil a cint was left to a 
 harrd wurrking man afther a thrade with Harry Phipps, bad 
 cess to him ! " Another was detected in an ingenious method 
 of evening things up. He had two carts shaped and painted 
 exactly alike, but one weighed about five hundred pounds more 
 than the other. On delivering his first load of scrap at the 
 furnace he would use the light wagon, 
 which was weighed both before and after 
 unloading, and the difference constituted 
 the net weight of scrap for which he was 
 paid. On subsequent trips, however, he 
 used the heavier cart, and failed to weigh 
 it after unloading. The clerk, believing 
 that it was the same cart as had previous- 
 
 " Bad cess to him ! " 
 
 ly been weighed empty, credited him every 
 
 trip with five hundred pounds more than had been delivered. 
 It was at the Lucy Furnaces that Mr. Phipps first employed 
 a chemist with excellent results. The Pennsylvania Steel Com- 
 pany at Harrisburg were large buyers of Bessemer pig-iron, and 
 their requirements were stated in chemical terms, the princi- 
 pal one being that the metal should not contain more than ten 
 hundredths of one per cent, of phosphorus ; and twenty-five 
 cents a ton was deducted from the price for every increase of 
 one-hundredth of one per cent. In this way it was early im- 
 pressed upon Mr. Phipps, who was the pocket-nerve of the con- 
 cern, that a practical chemist was a necessary member of their 
 staff; and it is believed that this company was the first not 
 directly connected with Bessemer steel production to benefit by 
 the services of an expert chemist.
 
 66 A RIVALRY OF GREAT FURNACES 
 
 It is unfortunate that the disagreements of partners should 
 occupy so large a place in this history; but as these invariably 
 had a more or less important bearing on the subsequent devel- 
 opment of the enterprise, by eliminating some members and 
 elevating others, they must rank with other factors in the evolu- 
 tion of this great business. This time it is the story of Klo- 
 man's withdrawal from the firm ; and in view of the many 
 erroneous statements which have been made concerning this 
 event, it is especially desirable that the facts should at last be 
 set forth. 
 
 Shortly after the construction of the Lucy Furnace was 
 started Mr. Kloman was persuaded to join a group of enthu- 
 siasts for the purpose of mining and smelting ore in Michigan. 
 Joseph Kirkpatrick, the leader of the group, was a flighty in- 
 dividual of the Colonel Sellers type, who is described by an 
 acquaintance as being able to " talk the buttons off your coat. " 
 The mining company was known as the Cascade Iron Company, 
 and the smelting concern was called the Escanaba Furnace 
 Company. None of the other Carnegie partners would have 
 anything to do with the enterprise. 
 
 The Cascade Company, having a large body of ore in sight, 
 made special exertions to get a contract to supply the Lucy 
 Furnace; and it is told of Kirkpatrick that, having found a 
 specially rich specimen, he had it analyzed, and, on the strength 
 of its high metallic contents, he undertook to supply ores " equal 
 to any Lake Superior ores, Columbia ore only excepted. " With 
 this guarantee a contract was made with the Lucy Furnace 
 Company; but when the Cascade mineral was worked in the 
 furnace it developed only forty-five to fifty per cent, of metallic 
 iron instead of sixty-two to sixty-six per cent, as had been ex- 
 pected. By this time new mines in the Lake Superior region 
 had developed ore bodies which approached very closely in value 
 to the Columbia ore ; and, under the guarantee, the owners of 
 the Lucy Furnace felt that they had a claim against the Cas- 
 cade people for damages. The claim was made, and was met
 
 68 A RIVALRY OF GREAT Fl r RXACES 
 
 by denials and counter-claims ; and after some unpleasant corre- 
 spondence the Carnegies entered suit for $200,000 damages. 
 Before this came into court, Jay Cooke & Co. failed and the 
 panic of '73 ensued. The Cascade and Escanaba companies, 
 having used up most of their funds and all of their credit 
 which was exceptionally good at the outset found themselves 
 in no position to meet panic conditions while burdened with 
 this great suit. They therefore deemed it prudent to compro- 
 mise with the Lucy Furnace owners for $100,000, to be paid in 
 instalments. Few payments were made under this settlement 
 before both the Cascade and the Escanaba companies failed ; 
 and the members found themselves personally responsible for 
 the companies' debts. >Mr. Kloman, who had imagined the 
 concerns to be limited' liability companies, was a shining mark 
 for the creditors, and he was pushed to the verge of bank- 
 ruptcy. 
 
 Fearing that such a catastrophe, if forced by Kloman 's credit- 
 ors, would involve the other concerns with which he was con- 
 nected and entail a dissolution of them, Andrew Carnegie made 
 a written offer to Kloman to restore him to full partnership if 
 he would make a voluntary assignment and get a judicial dis- 
 charge. This Kloman agreed to do ; and a committee of the 
 creditors was formed to appraise his interests, which the Carne- 
 gies bought. Kloman was thus enabled to make a settlement 
 of fifty cents on the dollar. 
 
 The disaster shook the Carnegie concern to its foundations; 
 and for a time it seemed as if they all would be overwhelmed in 
 a common ruin. But the high financial standing of McCand- 
 less, Stewart and Scott, with whom the Carnegies had just 
 made an alliance, as will be told elsewhere, and the ingenuity 
 of Mr. Phipps, enabled them to weather the storm. 
 
 The disentanglement of Kloman's affairs occupied three or 
 four years, during which* he worked with the Carnegies, and re- 
 ceived a salary of $5,000 a year.. When he was free to hold 
 property again, Andrew Carnegie offered him an interest of
 
 KLO MAN'S WITHDRAWAL 69 
 
 $100,000 in the various enterprises, to be paid for out of profits. 
 This did not satisfy Kloman, who valued his interest at several 
 times one hundred thousand dollars ; and he demanded com- 
 plete reinstatement in all the Carnegie companies, in accordance 
 with the previous understanding. As he had no binding con- 
 tract the written offer and its acceptance had carried no 
 legal consideration he was unable to enforce his demand, 
 and he withdrew from the Carnegie group in bitterness and 
 anger. 
 
 The later history of the Lucy Furnaces as a separate organi- 
 zation can be told in a few sentences. In June, 1881, a two- 
 thirds interest was sold to Wilson, Walker & Co. ; and James 
 R. Wilson of that firm, one of the Original Six of Andrew 
 Carnegie's boy-friends, was made chairman of the Lucy Furnace 
 Company, Ltd., which was now organized. The purpose of this 
 change was to release Mr. Phipps and Mr. T. M. Carnegie from 
 the close attention which they had been giving the furnaces, 
 that they might concentrate their efforts on the business of the 
 Edgar Thomson plant at Braddock. Mr. Wilson was in poor 
 health at the time of his accession to power at the furnaces ; 
 and his new duties and responsibilities aggravated his trouble. 
 He died in 1883 and was succeeded by E. A. McCrum. Later 
 Mr. Julian Kennedy had charge of the furnaces; and, with the 
 same skill as he has applied to all his work, he soon won back 
 for the Lucy the laurels she had lost to the newer furnaces at 
 Braddock. 
 
 On January ist, 1886, the Lucy Furnaces, the Upper and 
 Lower Union Mills, and the Pittsburg Bessemer plant at Home- 
 stead were all brought together in one organization, Carnegie, 
 Phipps & Co., Limited, of which Mr. John Walker became 
 chairman. 
 
 The complete record of these furnaces, on which the atten- 
 tion of the iron-making world was riveted for many years, will 
 be found on the following page.
 
 A RIVALRY OF GREAT FURNACES 
 
 LUCY FURNACES. 
 
 Ton: 
 
 No. i. 
 per annum. 
 
 Tons 
 
 No. 2. 
 per annum 
 
 1872 I3,36l 
 
 1873 21,674 
 
 1874 24,543 
 
 1875 22,984 
 
 1876 16,174 
 
 1877 28,918 6,644 
 
 1878 33.980 28,151 
 
 1879 25,942 31.668 
 
 1880 20,910 33, 931 
 
 1881 38,186 30,978 
 
 1882 22,385 35.453 
 
 1883 44.317 24.235 
 
 1884 Rebuilding. 58,4 I 6 
 
 1885 68,047 47,49 8 
 
 1886 56, 209 64, 266 
 
 1887 64,259 57,099 
 
 1888 63,970 55,834 
 
 1889 60,447 70.749 
 
 1890 76,019 72,155 
 
 ( No iron April '91 
 
 1891 72,128 53,186 j_ Cokestrike ' 
 
 1892 66,203 Relining. 71,289 
 
 X 8g3 59,413 48,787 6 months only. 
 
 1894 8i,395 82,419 
 
 1895 102,867 87,542 
 
 1896 102,341 104,411 
 
 1897 113,060 104,963 
 
 1 898 62,967 Relining. 61 , 1 86 Relining. 
 
 1899 88,777 37,102 
 
 1900 62,231 Relining. 57,^95 Relining. 
 
 1901 82,677 41,251 
 
 1902 73.537 38,575
 
 CHAPTER VI 
 
 BEGINNINGS AND GROWTH OF THE STEEL 
 
 BUSINESS 
 
 MANY accounts of the beginnings of the 
 Carnegie Bessemer steel business have ap- 
 peared from time to time in magazines and 
 other periodicals, some unwittingly fanci- 
 ful, others obviously unfair, and most of 
 them contradictory. Indeed, so far as the 
 author knows, the actual facts concerning this important event 
 have never been correctly set forth in any of the numerous 
 historical sketches of the enterprise which have been written, 
 nor in the many published biographical notices of the men asso- 
 ciated with it. Even the more carefully compiled books which 
 occasionally have been published on the subject have contained 
 more romance than fact. This is equally true of all the other 
 branches of the Carnegie business. 
 
 The reason of this ever-increasing accumulation of misstate- 
 ment is not far to seek. Hitherto no documentary history of 
 the constituent companies of the Carnegie Steel Company 
 has been attempted. No independent effort has been made to 
 go back to the beginnings of things to trace to their source 
 the tiny, separate rivulets which, later, came together and formed 
 such a great and impressive stream. Having no authoritative 
 data before them, early writers were led into errors and mis- 
 statements of facts which have been transmitted from one gen- 
 eration of historians and biographers to another, until now it is 
 hardly possible for the chance investigator to disinter even an 
 occasional truth from the mass of error under which it is 
 buried.
 
 72 THE STEEL BUSINESS 
 
 Another thing has contributed to give these fictions the 
 semblance of fact : they have been tacitly accepted as true by 
 those who knew better. The Carnegie Company grew to such 
 vast proportions as practically to dominate the steel industry of 
 America ; and the honor of founding and guiding it to success 
 was very flattering to the vanity of those to whom it was ascribed. 
 During the later history of the concern, when the trade-grooves 
 of which Mr. Phipps so aptly speaks had been made, and the 
 business was running smoothly, there came into prominence a 
 group of "young geniuses," as Andrew Carnegie calls them, 
 whose achievements have overshadowed those of the men who 
 did the first hard work and made the grooves. Many of these 
 being dead, the credit which was rightly theirs has been 
 given to the living, and generally accepted without disclaimer. 
 Many laurel wreaths are being proudly worn to-day which, in 
 all honor, should deck the graves of Andrew Kloman, William 
 Coleman, Thomas M. Carnegie, David A. Stewart, William P. 
 Shinn, David McCandless, Henry M. Curry and others who 
 have long since joined the silent and unprotesting majority. 
 
 The important part which William Coleman had in the ori- 
 gin of the Lucy furnaces has already been mentioned. To him 
 also is due the honor of founding the Carnegie Bessemer steel 
 business. 
 
 Early in 1871 Mr. Coleman, who had been a manufacturer 
 of iron rails,* visited the various steel works throughout the 
 
 * The first steel rails used in the United States were imported from England 
 in 1862 by the firm of Philip S. Justice & Co. of Philadelphia and London. 
 Mr. J. Howard Mitchell of that firm reported the transaction to the editor of Iron 
 Age in 1882. Steel rails were then used to a limited extent in England; and so 
 enthusiastic in their praises of these rails were the managers of the lines on which 
 they were used that the firm in question endeavored to have American railroads 
 make some experiments with steel. But the Philadelphia firm were looked upon 
 as fanatics, if not swindlers, when they talked about steel -rails to American rail- 
 road managers ; and it was seldom that they could obtain the earnest attention of 
 the proper officers. " The rule was," Mr. Mitchell says, " to bow us out of the 
 office and end the annoyance of being talked to by a dreamer." 
 
 In 1862, however, after many efforts in this and other directions, J. Edgar
 
 THOMAS M. CARNEGIE 
 
 AT THE AGE OF 19.
 
 Plate IV. 
 
 THOMAS M. CARNEGIE 
 
 AT THE AGE OF NINETEEN
 
 COLEMAN THE FOUNDER 73 
 
 country at Johnstown, Cleveland, Harrisburg, Spuyten Duy- 
 vil and Troy in order to observe the operation of the Bes- 
 semer converters which had been installed at these places dur- 
 ing the preceding four years. He was then sixty-five years 
 old, but full of energy, and enterprising and far-sighted beyond 
 most of his contemporaries. 
 
 The first result of his observations was to secure a site for 
 a steel works. In this he got his son-in-law, Thomas M. Car- 
 negie, to join him; and together they obtained the option of 
 purchasing a tract of one hundred and seven acres of farm land 
 called Braddock's Field, being the identical site of the defeat 
 of General Braddock in 1755, on the Monongahela River, a 
 dozen miles above Pittsburg. Bounded on the north by the 
 Pennsylvania Railroad, traversed through its centre by the Bal- 
 timore and Ohio, with the Monongahela affording water trans- 
 portation on its southern boundary, it was an ideal spot for the 
 purpose. 
 
 Mr. Coleman resided at this time in the old homestead of 
 Judge Wilkins on Penn Avenue, Homewood ; and young Car- 
 Thomson, then president of the Pennsylvania Railroad Company, was induced to 
 give steel rails a trial ; and he ordered one hundred tons at $150 per ton in gold 
 equivalent at that time to something like $300 per ton in currency. But unfortu- 
 nately the trial lot of rails was made of crucible steel, which proved to be very high 
 in carbon, though made to resist wear. They were put in the tracks of the com- 
 pany in yards and at other points where the greatest wear took place ; and during 
 the following winter, which was a very severe one, many of them broke. Such a 
 result might have been a crushing blow to the use of steel rails if it had happened 
 under the management of a less sagacious man than Mr. Thomson. He saw, 
 however, that if he could get rails that would not break, yet would endure the 
 great traffic on his railroad with as little wear as this lot had shown, it would be 
 extremely desirable ; and he therefore gave further orders, first for five hundred 
 and then for one thousand tons, which at that time were looked upon as wonder- 
 fully large orders. 
 
 In 1867 Messrs. Philip S. Justice & Co. sold to the old Beaver Meadow Rail- 
 road Company, now part of the Lehigh Valley Railroad Company, one hundred 
 tons of steel rails for $162.50 per ton in gold, or about $250 per ton in currency, 
 and other lots at $135 per ton gold. These rails were still in the tracks in 1883, 
 and Mr. Lloyd Chamberlin, then treasurer of the Lehigh Valley road, told Mr. 
 Mitchell that they were excellent rails and were still in use. Very slowly did the 
 use of steel rails grow from these humble beginnings. ( Vide Iron Age, August 
 r6th, 1883.)
 
 74 
 
 THE STEEL BUSINESS 
 
 negie lived in a smaller place adjoining. Coleman and his son- 
 in-law used to drive to town together; and the plans of the new 
 steel works were developed during these drives. Their nearest 
 neighbors were David A. Stewart and his brother-in-law, John 
 Scott, both railway men, the former being also president of the 
 Pittsburg Locomotive Works, while the latter was a director of 
 the Allegheny Valley Railroad. Mr. Stewart was also presi- 
 dent of the Columbia Oil 
 Company, of which Mr. 
 Coleman had been one of 
 the original organizers; 
 but making over his stock 
 to Andrew Carnegie, Mr. 
 Coleman did not materially 
 benefit by the fabulous div- 
 idends which made Andrew 
 Carnegie rich. 
 
 On mentioning the 
 scheme to his neighbors, 
 whose connections with the 
 railroads made their co- 
 operation especially desir- 
 able, Coleman readily ob- 
 tained the adhesion of both 
 Stewart and Scott. At the 
 same time young Carnegie 
 brought the project to the 
 attention of his brother, who lived in New York and was 
 engaged in various construction companies and similar schemes. 
 The elder Carnegie strongly opposed it, and refused to con- 
 nect himself with it in any way. It conflicted with his theory 
 about the unprofitableness of pioneering. Tom then sought 
 the co-operation of Mr. David McCandless, one of the most 
 prominent merchants of Pittsburg, and vice-president of the 
 Exchange National Bank. Mr. McCandless had known the 
 
 WILLIAM COLEMAN, 
 
 Who, with his son-in-law, Thomas M. Car- 
 negie, founded the Edgar Thomson Steel 
 Works.
 
 CARNEGIE'S BELATED ZEAL 75 
 
 younger Carnegie since childhood through his connection with 
 the Swedenborgian Church, of which all the Carnegies were 
 members; and being familiar with the excellent work he had 
 done during the early struggles of the Union Iron Mills, he 
 consented to join him and Coleman in the new venture, pro- 
 vided that his friend William P. Shinn was taken into the firm 
 and made treasurer of it. 
 
 In the spring of 1872 Colonel Scott, who was ever seeking 
 to put profitable things in the way of Andrew Carnegie, had 
 him commissioned by President J. Edgar Thomson, of the Penn- 
 sylvania Railroad, to go to Europe to market a block of the 
 bonds of a new railroad which was to run to Davenport, Iowa. 
 Carnegie sailed in April, and was successful in selling $6,000,- 
 ooo of the bonds. His aggregate commissions for he was 
 fortunate enough to get them from both sides amounted to 
 $150,000. Incidentally the loss to the purchasers of the bonds 
 was $6,000,000 every cent they put in ; and a futile effort was 
 afterwards made to hold Carnegie responsible for the loss. 
 
 During this European trip Carnegie made a study of the 
 Bessemer steel situation there. In England the industry was 
 firmly established; and Bessemer steel rails were being made in 
 ever-increasing quantities at good prices. At Derby visitors 
 were shown a double-headed Bessemer rail which had been laid 
 down in 1857 at a point on the Midland Railway where previ- 
 ously iron rails had sometimes to be renewed within three 
 months and which after fifteen years' constant use was still in 
 good shape. In the presence of exhibits of this kind Carnegie 
 was readily convinced that Coleman's Pittsburg scheme was not 
 only practicable, but likely to be extremely profitable. This 
 conviction was strengthened by the prospect of an additional 
 outlet for the product of the Lucy Furnace ; and on his return 
 he was found to be an enthusiastic supporter of the Bessemer 
 project. Indeed, he volunteered to put into the venture the 
 whole of his European profits, in addition to a commission of 
 $75,000 which he had made the previous October on the sale
 
 76 THE STEEL BUSINESS 
 
 of a block of Oilman bonds, also a commission won through the 
 friendship of Colonel Scott. 
 
 Andrew Carnegie had sailed on this mission in April, 1872. 
 During the same month Coleman, Scott, McCandless and the 
 younger Carnegie entered upon a real-estate speculation. They 
 bought the Mowry homestead tract in Pittsburg and subdivided 
 it into building lots. The venture resulted in a large profit, 
 and left the partners in good financial shape to enter upon their 
 steel enterprise. On Andrew Carnegie's return with his golden 
 sheaves and his new enthusiasm, the project was at once put 
 into execution. On January ist, 1873, Mr. Coleman took up 
 the option on Braddock's Field for himself and associates, pay- 
 ing the sum of $59,003.30 for the entire tract, subject to a 
 mortgage of $160,000; and on the I3th of the same month the 
 firm of Carnegie, McCandless & Co. was organized with a capi- 
 tal of $700,000. Coleman himself put $100,000 into the firm, 
 Messrs. Kloman, Phipps, McCandless, Scott, Stewart, Shinn, 
 and the younger Carnegie each subscribed $50,000, and An- 
 drew Carnegie added $25,000 to his European profits and put 
 $250,000 into the venture. For by this time his ambition to 
 own the largest individual interest in all the enterprises with 
 which he connected himself had become definite, although it 
 was not yet the absorbing passion it became later. Thus was 
 started the great enterprise which afterwards became famous as 
 the Edgar Thomson Steel Works. 
 
 In 1874 the legislature of Pennsylvania, prompted by the 
 widespread ruin of the panic, passed an act authorizing the 
 formation of limited liability companies ; and Kloman's failure 
 having brought home to the other members of his firm the 
 danger of partnership agreements, they took advantage of the 
 new law, and on October I2th, 1874, the firm of Carnegie, Mc- 
 Candless & Co. was dissolved, and the Edgar Thomson Steel 
 Company, Limited, was incorporated with a capital of $1,000,- 
 ooo to take its place. On October 3ist the unfinished works 
 at Braddock were transferred to the latter corporation, the con-
 
 THE VERGE OE DISASTER 
 
 77 
 
 sideration being $631,250.43,- subject to a mortgage now 
 amounting to $201,000. 
 
 The works were laid out under the supervision of A. L. 
 Holley, the well-known Bessemer engineer, who offered a guar- 
 antee that the plant would have a capacity of seventy-five thou- 
 
 A. L. HOLLEY, 
 
 Builder of the principal Bessemer Steel Works in America. 
 
 sand tons of ingots a year. Ground was broken on April 1 3th, 
 1873. Before the work was more than well started, however, 
 the panic involved the firm in great financial difficulty ; and but 
 for the high standing of McCandless, Stewart, and Scott, the 
 infant industry would have suffered an early death. As it was, 
 an issue of bonds was found necessary. These conferred on
 
 78 THE STEEL BUSINESS 
 
 holders the right to exchange them within three years for paid- 
 up stock in the company. J. Edgar Thomson took a hundred 
 of these bonds; and Colonel Scott, true to his traditional help- 
 fulness, took fifty. This gave the firm $i 50,000 at a time when 
 it was worth double that amount ; and Gardiner McCandless, 
 son of the chairman of the company, bought about $70,000 of 
 the bonds for himself and friends. Besides tiding it over a 
 period of difficulty and danger, this bond issue brought to the 
 company the prestige and favor of President Thomson and 
 Colonel Scott, as was found as soon as it entered the market 
 with its rails. 
 
 While the works were in course of construction a curious 
 development took place at Johnstown, which greatly benefited 
 the Edgar Thomson Company. In the spring of 1873 a labor 
 dispute took place at the Cambria Iron, Works. The trouble 
 grew out of an extraordinary situation. Foreseeing difficulty 
 with the local labor union, the Cambria Company induced its 
 principal men in all departments to become members of th;, 
 organization; hoping that in this way they would get control of 
 it and manage it in the company's interest. For some reason 
 these men failed to get control, and a strike being ordered by 
 the union they had no alternative but to obey, at least for the 
 time. Hoist by their own petard, the company's officials capped 
 their blunder by telling these foremen that their situations 
 would be forfeited unless they brought the dispute to an end. 
 In those days, as we have seen in the case of the puddlers' 
 strike at the Union Iron Mills, labor disputes with capital were 
 in an elemental stage; and it is barely possible that the simple 
 measures of the Cambria officials might have ended the trouble. 
 But Andrew Carnegie, hearing in New York of the dispute, 
 returned hastily to Pittsburg, and proposed to his firm that 
 these heads of the Cambria departments be invited to join the 
 new works at Braddock. This was done; and Capt. William 
 R. Jones having accepted the invitation, the leading men in 
 every department hastened to follow his example. In this way
 
 JONES THE PEERLESS 79 
 
 Carnegie, McCandless & Co. secured a corps of trained men 
 who had gone through the costly apprenticeship of Bessemer 
 steel-making at the expense of a rival concern. It was a master 
 stroke, and at once carried the embryo business past the experi- 
 mental stage.* Among the men thus secured, in addition to 
 Captain Jones, who was without a peer, were Captain Lapsley, 
 superintendent of the rail mill, John Rinard, superintendent of 
 the converting works, Thomas James, superintendent of machin- 
 ery, Thomas Addenbrook, head furnace builder, F. L. Bridges, 
 superintendent of transportation, and C. C. Teeter, chief clerk. 
 Later, scores of others followed. Indeed, there was hardly a 
 skilled workman in the whole of the Cambria plant that did not 
 want to join his beloved "Bill" Jones; and when the Edgar 
 Thomson mill was ready to open, many of them did so. During 
 the panic the first arrivals were put on board wages, and kept 
 about the place until the trouble was passed, and the work of 
 construction resumed. 
 
 Captain Jones, who was made superintendent of the works, 
 was probably the greatest mechanical genius that ever entered 
 the Carnegie shops. He had passed, moreover, through every 
 branch of the iron and steel manufacture ; and there was nothing 
 in the works of which he had not that intimate knowledge 
 which comes through the hand alone. His power to manage 
 men, joined to his inventiveness and thorough practical training, 
 made him the most conspicuous personal element in the phenom- 
 enal success which attended the enterprise from the very first. 
 He gave many valuable suggestions to Mr. Holley while the 
 plant was being erected, which were frankly adopted; and his 
 later inventions added enormously to the profits of the firm 
 every year of his life, and long after. Even in 1903 the United 
 States Steel Corporation filed a bill in equity to restrain the 
 
 * " Its [the Edgar Thomson plant] successful operation is greatly due to the 
 large experience in Bessemer manufacture of Capt. William R. Jones, general 
 superintendent of the works and of Capt. Thomas H. Lapsley, superintendent of 
 the rolling mill, who have a force under them largely composed of men experienced 
 in the manufacture of rails." American Manufacturer, November i8th, 1875.
 
 8o 
 
 THE STEEL BUSINESS 
 
 Pouring hot metal into the Jones Mixer. 
 
 Jones & Laughlin Steel Company from using the famous metal 
 mixer which Captain Jones invented for the Edgar Thomson 
 
 Company; and this one de- 
 vice, used as it is in every 
 Bessemer department of the 
 great steel corporation, is still 
 the means of saving it mil- 
 lions of dollars every year. 
 At the same time no detail 
 was too small for Captain 
 Jones' personal attention. 
 This indeed was one of the 
 secrets of his success with 
 workmen. He was ever on 
 the lookout for their comfort. 
 He personally attended to the 
 ventilation of the shops ; and, as another little illustration of his 
 care, may be mentioned a generous supply of oatmeal and water 
 for drinking purposes. To 
 Captain Jones is also due the 
 system of rewards for excep- 
 tional service which after- 
 wards characterized the ad- 
 ministration of all the Car- 
 negie properties, and which 
 has since been extended, with 
 beneficial effects, to all the 
 constituent parts of the Unit- 
 ed States Steel Corporation. 
 
 In illustration of the wise 
 and broad views held by Cap- 
 tain Jones in regard to labor, 
 an interesting letter written 
 by him at this time may here be quoted. It also gives some data 
 concerning profits which are worth preserving. It is as follows : 
 
 Molten metal flowing from the Jones Mixer.
 
 A VALUABLE LETTER 81 
 
 WORKS, Feb. 25, '75. 
 E. V. McCandless, Esq. 
 
 DEAR SIR : I wrote you somewhat hastily last night. In 
 regard to the figures I gave you of cost of mixture, I gave you 
 the Cambria figures, viz. mixture at $35 which of course in- 
 cludes spiegel metal which is (a) great deal more than it really 
 cost them. A friend of mine who has gone over their estimates 
 carefully gives as the cost of one ton of steel rails $44. Now 
 allow for at least 1 5$ on half they pay for labor as profit they 
 derive from their store, and you will readily see that the profits 
 of the Cambria works on steel are simply enormous. 
 
 I will give you their figures again in a more intelligent 
 manner : 
 
 Cost of mixture : pig-iron and spiegel $35 
 
 Credit allowed converting department per ton of ingots. ... 9 
 
 blooming mill per ton of blooms 3 
 
 " rail mill " rails 10 
 
 Total cost of producing a ton of rails $57 
 
 Now in order to show you how much more above the actual 
 cost they put their figures, I know of plenty of men who will 
 take their rail mill at $4.00 a ton and find everything. 
 
 Now I know that the profits in manufacturing steel rails are 
 enormous. If such works as the Pa. Steel Co. and Newburgh, 
 Ohio can manufacture rails and make money these works can 
 certainly yield very handsome profits. 
 
 Now I will give you my views as to the proper way of con- 
 ducting these works. 
 
 ist. We must be careful of what class of men we collect. 
 We must steer clear of the West where men are accustomed to 
 infernal high wages. We must steer clear as far as we can of 
 Englishmen who are great sticklers for high wages, small pro- 
 duction and strikes. My experience has shown that Germans 
 and Irish, Swedes and what I denominate "Buckwheats" 
 young American country boys, judiciously mixed, make the 
 most effective and tractable force you can find. Scotsmen do 
 very well, are honest and faithful. Welsh can be used in lim- 
 ited numbers. But mark me, Englishmen have been the worst 
 class of men I have had anything to do with ; and this is the 
 opinion of Mr. Holley, George and John Fritz. 
 
 2nd. It should be the aim of the firm to keep the works run- 
 ning steadily. This is one of the secrets of Cambria low wages. 
 The workmen, taking year in and year out, do better at Cambria 
 6
 
 82 THE STEEL BUSINESS 
 
 than elsewhere. On steady work you can calculate on low 
 wages. 
 
 3rd. The company should endeavor to make the cost of liv- 
 ing as low as possible. This is one bad feature at present but 
 it can be easily remedied. 
 
 These are the salient points. The men should be made to 
 feel that the company are interested in their welfare. Make 
 the works a pleasant place for them. I have always found it 
 best to treat men well, and I find that my men are anxious to 
 retain my good will by working steadily and honestly, and in- 
 stead of dodging are anxious to show me what a good day's work 
 they have done. All haughty and disdainful treatment of men 
 has a very decided and bad effect on them. 
 
 Now I have voluntarily given you my views. I have felt 
 this to be a necessity on my part ; for I am afraid that unless 
 the policy I have marked out is followed we need not expect the 
 great success that is obtainable. These suggestions are the 
 results of twenty-five years' experience obtained in the most suc- 
 cessful ironworks in this country: Crane and Thomas Iron 
 Works, Po-rt Richmond Iron Works, and the Cambria works. 
 
 You are at liberty to show this letter to your father and Mr. 
 Coleman ; otherwise regard it as a confidential letter. 
 
 Yours truly 
 
 W. R. JONES. 
 
 The converting works were completed in August, 1875 ; and 
 on the 22d of that month the first blow was made. On Sep- 
 tember ist the first rail was made, and a piece of it, made into 
 a paper weight and stamped with this date, presses on this page 
 as it is written. 
 
 At this date Bessemer steel production in America had pro- 
 gressed to important proportions, the output of the country for 
 1875 being 375,517 tons. Of this amount 290,863 tons were 
 rolled into rails. The business had grown from 3,000 tons in 
 1867. In England Bessemer steel rails had been known since 
 1857; so that in no sense was the Edgar Thomson Company 
 a pioneer. It is indeed noteworthy that in anticipation of the 
 change from iron to Bessemer steel which every railroad man 
 foresaw, the production of iron rails in the United States fell 
 from 900,000 tons in 1872 to 500,000 tons in 1875. In this
 
 RAILROAD FAVORS 83 
 
 one decade the output of steel rails multiplied nearly thirty 
 times from 34,000 tons in 1870 to 954,460 tons in 1880. 
 The subsequent advance has also been great ; for from less than 
 a million tons of steel rails produced in 1880, the output rose 
 to 3,000,000 tons in 1902, while the price had fallen from $106 
 a ton in 1870 to $17 a ton in 1898. 
 
 Many things combined to make the Edgar Thomson enter- 
 prise a success from the start ; and in so far as these were fore- 
 seen and planned, they serve as evidence of the consummate 
 skill of its projectors. Coleman must be credited with the 
 great advantage which resulted from the intimate relations the 
 
 The Edgar Thomson steel works in 1875. 
 
 firm had with the chief officials of the Pennsylvania Railroad. 
 It was he who induced Stewart and Scott to join the scheme. 
 To him also was due the exceptional pains taken to educate 
 Andrew Carnegie in the merits of the enterprise, and thus indi- 
 rectly to reach Carnegie's late associates, Mr. J. Edgar Thomson 
 and Colonel Scott. That these important men favored the 
 company which bore the name of one of them is evidenced by 
 the fact that some of the directors of the railroad, who were 
 interested in rival concerns, presently insisted upon a fair divi- 
 sion of the Pennsylvania's patronage, so that a portion of their 
 orders for rails afterwards went to the steel works at Johnstown 
 and Harrisburg. 
 
 In regard to the charges of preferential treatment in the 
 matter of freight rates which have often been made in this con-
 
 8 4 
 
 THE STEEL BUSINESS 
 
 nection, it can be said in all frankness that, while they were not 
 unfounded, they were greatly exaggerated. The Edgar Thom- 
 son Company got exactly the rates and rebates that other ship- 
 pers of equal importance had. Full local rates were paid; but, 
 owing to the saving to the railroads resulting from the steel 
 company's system of loading cars, and even at times making up 
 the train, it was only fair that the latter should share in the re- 
 sults of this economy. So there was established a system of 
 rebates. A monthly statement of the sums paid for freight and 
 due in rebates was made out ; and the rebates were paid almost 
 as soon as the statements were presented to the railway com- 
 pany. While these sums were considerable, and probably in- 
 ured to the injury of com- 
 peting iron-rail makers in 
 the same district, they were 
 no greater than those re- 
 ceived by other manufact- 
 urers of steel rails who 
 loaded their own ship- 
 ments. 
 
 At first this rebate sys- 
 tem was confined to the 
 Pennsylvania lines ; but 
 presently President Garrett, of the Baltimore and Ohio Rail- 
 road, who had some suspicion of the facts, sent representatives 
 to Pittsburg to learn the reason of the apparent discrimination 
 against his road. As a result of their report Mr. Shinn, general 
 manager of the Edgar Thomson works, received an invitation to 
 visit Mr. Garrett in Baltimore, when an arrangement similar to 
 that in force with the Pennsylvania company was made, and 
 the traffic was then divided between the two roads. 
 
 Another factor which contributed in no small degree to the 
 success of the firm was the voucher system of accounting which 
 Mr. Shinn introduced. This had long been used by railroads, 
 and the Standard Oil Company's accounts were thus kept ; but 
 
 "Tnere goes that bookkeeper."
 
 S/i/WS SYST1LV OF ACCOUNTS 85 
 
 it was not in general use in manufacturing concerns, and the 
 Edgar Thomson Company was the first to adopt it in Pittsburg. 
 No order for rails was ever accepted until there had first been 
 ascertained the actual cost of every element entering into their 
 manufacture, and options obtained on the pig-iron of which they 
 were to be made. An eloquent testimony to the efficiency of 
 this method of accounting was given by a workman engaged 
 in building a heating-furnace : " There goes that - book- 
 keeper. If I use a dozen bricks more than I did last, month, he 
 knows it and comes round to ask why!" This was no exag- 
 geration. The minutest details of cost of materials and labor 
 in every department appeared from day to day and week to week 
 in the accounts ; and soon every man about the place was made 
 to realize it. The men felt and often remarked that the eyes 
 of the company were always on them through the books. If the 
 workmanship was exceptionally good, or the output beyond the 
 high average which was insisted upon, the head of the depart- 
 ment received a letter of congratulation and perhaps a present at 
 Christmas. If it fell behind in either quality or output, the 
 fact was promptly brought to his notice, and Captain Jones him- 
 self would see if the fault lay in the machinery. If it did, he 
 generally knew how to remedy it. If the defect was in the 
 human machine, and reproof did not suffice to correct it, the 
 man was replaced by the understudy which Jones usually had 
 trained in view of such a contingency.* 
 
 In 1877 it was found that more steel ingots were being 
 
 * Dr. Frank Cowan has written a unique poem on the contrast presented by 
 the actual condition of Braddock's Field with that of the day of the battle on 
 July gth, 1755. Here are a couple of verses : 
 
 Where the cannon of Braddock were wheeled into line. 
 
 And swept through the forest with shot and with shell 
 But woe to the Britons! In vain they combine 
 
 The thunder of heaven and the lightning of hell! 
 There the turning converter, while roaring with flame, 
 
 Pours out cascades of comets and showers of stars. 
 While the pulpit-boy, goggled, looks into the same 
 
 Thinking little of Braddock and nothing of Mars.
 
 86 THE STEEL BUSINESS 
 
 made than the rail-mill could roll ; and an attempt was made to 
 capture the local market for merchant steel. Some billets of 
 high-carbon steel were made and submitted to a firm of buggy- 
 spring makers. To their astonishment the material was satis- 
 factory ; and they gave a large order for billets at three cents a 
 pound. Then some samples of axle steel for cars were sub- 
 mitted to the Pennsylvania Railroad Company, and subjected to 
 tests by experts who did not know that they were not the cruci- 
 ble steel usually employed for car-axles. Again the tests were 
 satisfactory, and large orders resulted. Next came the more 
 difficult test of making steel for plow-shares, which required a 
 soft ductile metal capable of being welded to sheets of crucible 
 steel. Even these severe conditions were met. Finally the 
 firm made steel capable of being rolled cold down to a paper 
 thinness for use as stove-pipe, roofing-channels and cartridge 
 cases stamped out of the sheet. So that, two years after the 
 realization of his dreams, Tom Carnegie had the satisfaction 
 of showing to his brother as many varieties of excellent steel 
 made at the Edgar Thomson works as he had previously seen 
 in England. But by this time the elder Carnegie was the most 
 enthusiastic member of the company and needed no such re- 
 minders. 
 
 The profits of this line of business were very great; but the 
 capacity of the rail-mill having been enlarged, and the demands 
 of the railroads ever increasing, the company abandoned the 
 manufacture of merchant steel for the time being and returned 
 to the exclusive production of rails. The demand that had thus 
 been created, suddenly found itself shut off from supplies; and 
 
 Where the guns of the foe were revealed by a flash 
 
 A report and the fall of the killed and the wounded, 
 Till the woods were ablaze, and a deafening crash 
 
 With the wail of the wounded and dying resounded ; 
 There the ingot aglow is drawn out to a rail, 
 
 While the coffee-mill crusher booms, rattles and groans, 
 And the water-boy hurries along with his pail. 
 
 Saying, Braddock be blowed! he's a slouch to Bill Jones.
 
 A RIVAL IN THE FIELD 87 
 
 an interesting development resulted. This was the establish- 
 ment of a rival converting plant at Homestead by the group of 
 manufacturers who had been educated in the use of Bessemer 
 steel in place of the more costly crucible steel which they had 
 previously used. Pending the erection of the new plant, an 
 enterprising firm of Pittsburg brokers got Mr. McCandless, the 
 former bookkeeper of the Edgar Thomson Company, to go to 
 England to buy the merchant steel necessary to fill local de- 
 mands. In two years this firm sold nearly two million dollars' 
 worth of English steel at a profit of $5 to $15 a ton, after pay- 
 ing forty-five percent, duty and both ocean and railroad freights. 
 At the end of two years the Edgar Thomson Company sought 
 to head off the independent manufacturers at Homestead and 
 resumed the manufacture of merchant steel.V The import busi- 
 ness suddenly ceased ; and these profits with others went into 
 the erection of a series of blast-furnaces whiten became the won- 
 der of the iron-making world. 
 
 Up to this time the Lucy furnaces had been supplying most 
 of the pig-iron used by the Edgar Thomson' Company ; but as 
 the members of the latter corporation were not all interested in 
 the furnaces, there arose differences among them as to the 
 proper price that should be paid for pig-iron. Although these 
 differences were finally adjusted by a sliding scale based on the 
 price of steel, the discussion developed in Shinn, McCandless, 
 Stewart, and Scott a desire to own their own blast furnace. 
 The desire was strengthened by the phenomenal profits of the 
 Lucy plant, which had paid for its construction in a single year. 
 Eventually an agreement was reached, and furnace A was 
 erected at Braddock. 
 
 This furnace was a part of the Kloman wreck, namely, the 
 little charcoal furnace which he had built at Escanaba. It was 
 bought for a mere song a little over $16,000 and such parts 
 as could be transported were brought down and installed at the 
 Edgar Thomson works. This was in 1879. Mr. Julian Ken- 
 nedy was put in charge of its erection, and afterwards of its
 
 88 THE STEEL BUSINESS 
 
 operation. It was "blown in" in January, 1880, and yielded 
 442 tons of pig-iron the first week. In view of the fact that its 
 cubical capacity was but 6,396 feet compared with 15,000 feet 
 in the Lucy Furnace, this large product excited great astonish- 
 ment. The fourth week, however, it made 537 tons; and dur- 
 ing the following month (March) its output reached a total of 
 
 JULIAN KENNEDY. 
 
 2,760 tons, while the coke consumption was reduced by May to 
 1,945 pounds per ton of iron produced. Later the output of a 
 single week ran up to 671 tons, and the iron-making world 
 regarded the achievement with wonder. 
 
 In April, 1880, a second furnace, constructed by Mr. Ken- 
 nedy, was put in blast, which in its third month showed an 
 output of 4,318 tons, and at the end of the first half year was 
 making the marvellous total of 4,722 tons in a single month.
 
 A GREAT EVOLUTION 89 
 
 During the first twelve months this furnace produced 48,179 
 tons. In 1883 a third furnace was put in, and in its second 
 month passed all previous records by a yield of 6,045 tons; and 
 in the first twelve months made 65,947 tons of pig-iron. Dur- 
 ing the next three years two other furnaces were erected ; and 
 in December, 1885, one of them yielded 6,451 tons, the total 
 for twelve months being 74,475 tons. In October, 1886, still 
 another furnace was "blown in," and in January, 1887, three 
 months afterwards, it produced 8, 398 tons on a coke consump- 
 tion of 1,935 pounds per ton of pig-iron. Its total output for 
 twelve months was 88,940 tons. These were the world records 
 at the time ; but changes in the construction of one of the other 
 furnaces, made under the supervision of Mr. James Gayley, 
 one of the ablest of the so-called " young geniuses," brought 
 the monthly record in December, 1889, to 10,603 tons on a 
 coke consumption of only 1,756 pounds! These figures indi- 
 cate at once the rapid growth of the business of the Edgar 
 Thomson Steel Company and the proportionate advance made 
 by its superintendents in the art of iron production. Both rec- 
 ords, at that time incomparable even in this great land of 
 rapid growth, have since been repeatedly broken by the same 
 firm. 
 
 Here this great evolution may be seen at a glance : 
 
 FIRST FURNACE. 
 
 Pounds of coke 
 ^ ears and months. i ons produced. 
 
 per ton of iron. 
 
 1880 April 2, 723 2, 536 
 
 May 3,718 2,574 
 
 June 4,318 2,344 
 
 July 4-345 2,706 
 
 August 4, 601 2, Si i 
 
 September 4,221 2.757 
 
 October 4, 722 2, 736 
 
 SECOND FURNACE. 
 
 1882 Second month 6,045 2,617 
 
 Average for twelve months 5,495 2,570 
 
 Best month 6, 131 2,387
 
 90 THE STEEL BUSINESS 
 
 THIRD FURNACE. 
 
 ,, , Pounds of coke 
 
 Years and months. 1 ons produced. 
 
 per ton of iron. 
 
 1885 October 6,320 2,396 
 
 November 6. 306 2, 396 
 
 December 6,451 2, 172 
 
 1886 January and February. Shut down. 
 
 March 6,352 2,105 
 
 FOURTH FURNACE.* 
 
 1886 November 6, 735 2, 128 
 
 December 7. 494 2, 105 
 
 1887 January 8,398 1.935 
 
 1889 October 6,512 2,450 
 
 November 9,097 1,897 
 
 December 10, 603 1.756 
 
 1890 January 10, 536 i, 736 
 
 February 8,954 1,859 
 
 March 9-94 1 1.845 
 
 April 10,075 1,847 
 
 May 10,035 i, 884 
 
 Hardly less remarkable were the results achieved in the con. 
 verting and rail departments. In the four months ending De- 
 cember, 1875, 6,555 tons f ra il s were produced, although, 
 through a scarcity of spiegel, the works lost two weeks. At 
 this time a thousand tons a month was considered a good aver- 
 age for the first year of a two five-ton converter plant. In the 
 twenty-six working days of January, 1876, the product of 433 
 blows was 2,550 tons of ingots, or 2,055 tons f rails. In a 
 single week in February 119 heats gave 707 tons of ingots, 
 while the blooming-mill passed 709 tons, and 560 tons of rails 
 were rolled. During the first full year of its operation (1876) 
 the mill produced 45,563 tons of steel. The tonnage of rails 
 was 32,228. In January, 1877, the product of a week was 
 more than double the extraordinary record of the preceding Feb- 
 ruary; the output being 1,543 tons of ingots and 1,129 tons f 
 rails. The way this was done is naively explained by a local 
 
 * Twelve years later one of the above furnaces produced in one month, 
 December, 1902, a total of 17,449 tons f pig-iron on an average coke consump- 
 tion of 1,875 pounds.
 
 AMAZING RECORDS 91 
 
 journalist of that day : " Mr. Campbell, a roller, ten days or 
 two weeks ago, rolled 540 rails in eleven and a half hours, which 
 is. 1 08 more than the usual run for twelve hours. This put 
 John Little, another roller, on his mettle, and last Thursday 
 night he rolled 600 thirty-foot rails in eleven and a half hours 
 thus beating his competitor by 60 rails and the usual run by 
 1 68 rails. John may be Little, but the Edgar Thomson wants 
 that Little here below', and wants that Little long!" In the 
 twenty-four working days of the following February, 915 blows 
 produced 5,993 tons of ingots; 4,474 tons of rails were rolled 
 and 182 tons of billets. On the 26th of February the day's 
 product was 383 tons of ingots half as much as was produced 
 in a week the year before. The product for March was 8,002 
 tons of ingots. 
 
 A little less than two years before this Mr. A. L. Holley, 
 then managing the Rensselaer Steel Works at Troy, wagered 
 the Hon. John A. Griswold, one of the proprietors, that their 
 Bessemer plant (two converters) could produce in one month 
 1,500 tons of ingots. He won his bet, of course; and the fig- 
 ures i, 500 and 8,000 mark the advance of American steel-mak- 
 ing at this time in twenty-three months. 
 
 This rate of progress was maintained during the next two 
 years. In September, 1879, the Edgar Thomson beat all the 
 records of two-converter plants by producing 10,788 tons of 
 ingots. The tonnage of a single day was 519, of a week, 2,536. 
 The output for the year (1879) was 107,877 tons of ingots, of 
 which 76,043 tons were rolled into rails. In November the 
 two converters produced 13,116 tons of ingots, and the mill 
 10,037 tons of rails. The total rails for the working year, nine 
 months and twenty-nine days, was 100,094 tons. Incidentally 
 the profit of the Edgar Thomson works for 1880 amounted to 
 $1,625,000; and there were orders booked for 80,000 tons for 
 the following year. 
 
 The known facts of course no outsider knew the profits, 
 which are now made public for the first time produced surprise
 
 9 2 
 
 THE STEEL 
 
 and chagrin in competing plants. In England the news was 
 received with doubt. " An almost incredible statement," said 
 K. Windsor Richards, the British steel manufacturer ; and when 
 Captain Jones, in a paper read before the British Iron and Steel 
 Institute, gave details and dates, incredulity gave way to con- 
 sternation, for it was plainly to be seen that England's suprem- 
 acy in steel was at an end. Here is the amazing record in 
 
 detail : 
 
 NOVEMBER, 1880. 
 
 Number of vessels, 2. Blows , 1,746. 
 
 Average charge, 7 V tons. 
 
 Tons of Ingots 13, 
 
 Blooms 12, 
 
 Rails n.( 
 
 Billets 
 
 Merchant blooms . . 
 
 Total finished product 1 1 , 100 
 
 At this date the Edgar Thomson had held the record for 
 nearly three years. During the next six months it beat this 
 record out of shape. In the first six months of 1881 the two 
 converters produced 76,756 tons of ingots as against 55,428 
 
 A train of rolls. 
 
 tons for the corresponding period of 1880 an increase of thir- 
 ty-eight per cent. The best twenty-four hours' work was 623 
 tons. The product of a week was 3,433 tons; the best month, 
 14,033 tons more than nine times the tonnage of Holley's bet
 
 CAPTAIN JONES TRIUMPH 93 
 
 six years before ! The rail-mill in the same time produced 
 65,087 tons as against 43,372 tons in the corresponding half of 
 1 880 an increase of a fraction over fifty per cent. The aver- 
 age weekly yield of rails was 2,503 tons as compared with 1,664 
 tons in 1880. 
 
 These newer facts were again presented by Captain Jones 
 to the British Iron and Steel Institute ; and before the astonished 
 Englishmen had time fully to digest them, he sent a fresh record : 
 
 November, i S3 1 Ingots 16, 193 tons. 
 
 Rails 13.646 " 
 
 Best 24 hours' work Ingots 700 " 
 
 " " " " Rails 608 " 
 
 Best week's work Ingots 3,902 " 
 
 " " " Rails 3.202 " * 
 
 Soon afterwards the works were enlarged and the direct metal 
 process was introduced; but the product was not proportion- 
 ately great, and the record passed from Captain Jones to Mr. 
 Julian Kennedy, who by this time had been put in charge of 
 the Homestead works. Captain Jones' great and noteworthy 
 triumph forms one of the most picturesque episodes in the his- 
 tory of the Carnegie organization. 
 
 * For purposes of comparison a few details of the product of the earlier steel 
 works in America may here be given. These were, like the Edgar Thomson, all 
 two five-ton converter plants, working eleven turns or five and one-half days a 
 week. 
 
 Tons Tons 
 
 Heats, heats, Ingots, Ingots, lons Ingots, 
 
 24 hours. week. 24 hours. week. month. 
 
 1868 500 
 
 Cambria. Harrisburg. 
 
 1870, Troy and Harrisburg .... 1,700 
 
 1872, Harrisburg 640 2,000 
 
 1 1 arrisburg 
 
 1873 ". . . . 25 to 30 i So .... 890 
 
 Cambria 
 
 1874, Harrisburg 46 189 956 
 
 " Troy 50 267 2,899 
 
 " Troy 195 972 
 
 " North Chicago .... 3,526 
 
 Cambria 211 
 
 These were all two five-ton converter plants working eleven turns or five and 
 one half days a week.
 
 CHAPTER VII 
 SOME INSIDE FINANCIAL HISTORY 
 
 THE striking achievements just set forth formed 
 a legitimate source of pride and exultation 
 in the firm ; and the gratification of every 
 member was increased by the wondering 
 comments of the trade and the public, 
 whose attention was invited to these 
 mechanical victories by officially verified 
 newspaper notices and by papers and 
 speeches before the iron and steel associations in England 
 and America. Braddock became the Mecca of iron and steel 
 manufacturers from all over the world. 
 
 On the subject of profits there was naturally no disposition 
 to take the public into the confidence of the firm. The protec- 
 tion of infant industries was a subject on which there was 
 divided opinion in the council-chambers of the nation; and 
 manufacturers showed a proper caution in concealing the extent 
 of their gains. Indeed, the Carnegies at this time accepted 
 what seemed to them a large monetary loss rather than produce 
 the books of the Edgar Thomson Steel Company in court in 
 response to a judicial order. Now, however, that the golden 
 harvest is safely garnered and beyond the reach of legislators 
 and others who might " break through and steal," there is no 
 reason why the gratifying results of the government's wise pol- 
 icy of protection should not be set forth. 
 
 The admirable system of accounting introduced by Mr. 
 Shinn enabled the Edgar Thomson managers to see at a glance 
 the exact cost of every one of the many operations entering into 
 the manufacture of a ton of ingots, blooms, or rails. Every 
 
 94
 
 EARLY COST SHEETS 95 
 
 month cost sheets were made out in which these items were 
 given to the hundredth part of a cent. These statements were 
 marvels of ingenuity and careful accounting. 
 
 The first was issued on October ist, 1875. It gave in de- 
 tail the output and cost of the first month's run, together with 
 the name of the purchasing railroads and the prices received. 
 It was a gratifying document to the anxious partners. The 
 output for September, 1875, was 1 , 1 1 9 Y f |^ tons of rails. Their 
 cost was exactly $57 a ton, including all charges, even to office 
 expenses and maintenance of the plant. The prices received 
 averaged $66.50 a ton at the works, thus leaving a clear profit 
 of $9.50 a ton, and a total of over $10,000 on the month's work. 
 In the second month the output was I,8l7$-ff-f tons, which cost 
 $57.20 and sold for $66.32. At the end of the year the aver- 
 age of four months' operations showed that ingots had cost 
 $44.33 a ton, blooms $47. 17, and rails $58.45. The average 
 price at which they sold was a fraction under $66 a ton, giving 
 a total profit on rails of $41,970.06. The percentage of rails 
 from pig-iron and spiegel was eighty and fifty-six hundredths ; 
 and this was afterwards used as a basis on which to figure the 
 making of contracts. 
 
 During the following year the improvements in processes 
 made by Captain Jones, already referred to, greatly increased 
 the output and reduced the cost. On the other hand, prices also 
 fell. Andrew Carnegie wrote this year to one of his colleagues : 
 
 " We must not loose sight of the fact that the great products 
 now made must effect prices. I look for Cost to be reached for 
 a short time say 5O 50 at mills with us. Some concerns must 
 stop, therefore any orders we can take netting above 52 50 had 
 better be taken 55$ at mills is a tall price. Penna steel [i.e. 
 Pennsylvania Steel Co.] has offered 60$ Balto to Georgia RR. 
 but I hope to get a small order 
 
 In the same letter, however, he waxes enthusiastic over the 
 future : 
 
 " What do you really figure we can put rails at cost run-
 
 96 INSIDE FINANCIAL HISTORY 
 
 ning double 4000 Tons per Mo. on this basis Cant we shade 
 50$ If so where is there such a business 
 
 And so alluring is the picture in his mind that in the next sen- 
 tence he says : 
 
 " I want to buy Mr. Coleman out & hope to do so. " 
 
 But that is another part of the story. 
 
 Concerning his great expectations at this time, the following 
 extract from a letter of his to Shinn, dated April I3th, 1876, is 
 interesting. He estimates future profits at forty per cent, per 
 annum, or $300,000 net on a capital of $750,000. 
 
 Ct**~a.> 
 
 -C^L 
 
 (/ 
 
 [Photographic reproduction.] 
 
 The price of rails this year (1876) dropped steadily from 
 $67 in January to $52 in December; but the average price re- 
 ceived by the Edgar Thomson Company for the sixteen months 
 ending December 3ist, 1876, was $60.61 6 . The product for 
 the year was 32,228 tons, and for sixteen months 38,284^^5-
 
 s r <;RKA r / YY < v-7 'fs 
 
 97 
 
 tons. The cost of manufacture, which averaged $56. 98** for 
 the first seven months, had dropped to $53. 19 for the second 
 seven months. The net earnings for the year amounted to 
 $181,007.18 on a capital issue of $731,500. 
 
 The Edfifar Thomson Steel Works in 1890. 
 
 The output of rails for 1877 was 42,826^417 tons. Both 
 prices and cost of manufacture show a remarkable decline. 
 They are as follows : 
 
 Cost at Price 
 
 E. T. works. at mills. 
 
 January $4(>.67" 5 $49.00 
 
 February 44.89 49.00 
 
 March 44. IO 9R 49.00 
 
 April 43. s8 5 49.00 
 
 May 45.63 s5 47. 25 
 
 June 42.2S" 3 46.50 
 
 Cost at Price 
 
 E. T. works. at mills 
 
 July $44.S7 5 " $45-25 
 
 August 42. 55 54 44.75 
 
 September 43-83 03 44.00 
 
 October ...... 42. oo 4 * 42.25 
 
 November 4o.i3 14 40.50 
 
 December 40.35" 40. 50 
 
 It must not be inferred from this that during the later 
 months of the year the company was running at a loss ; for the 
 rails made in November and December had been sold at prices 
 prevailing nine or twelve months earlier. At the same time 
 
 7
 
 98 INSIDE FINANCIAL HISTORY 
 
 w S\VOV\YW>VY SWl vmhcvvui ctiw 
 
 c_^^ *i4t 
 
 J 46*lS7V' f/t { -lttfU&*l Cc^t'4'' f7td./t- 
 
 -?t 
 
 ,.^ j/- //*/ ^ 
 
 QbuJtS' 
 
 y 
 
 PAGE OF FIRST ANNUAL REPORT. 
 
 Photographic copy of the original document.
 
 " WHERE IS THERE SUCH A BUSINESS ! " 99 
 
 profits were greatly diminished, and the year's balance sheet 
 showed only a net gain of $36,673.33. But about $115,000 
 had been spent on the works and some $20,000 of indebtedness 
 had been paid off. As a matter of fact, the profits of all the 
 Carnegie works this year aggregated $190,379.33. 
 
 In February of this year the first dividend was declared, 
 being twenty-five per cent, in scrip. In August a second divi- 
 dend of fourteen per cent, was declared, part of which was ap- 
 plied on stock and part paid in cash. In this way the capital 
 was raised to $1,000,000. In October dividend No. 3, of two 
 and three-fourths per cent., was declared ; making a total for the 
 year in cash and stock of forty-one and three-fourths per cent. 
 
 At the beginning of 1878 Andrew Carnegie indulged again 
 in his habit of prophecy, and scribbled for the benefit of one of 
 his partners his great expectations for the year. This rough 
 memorandum is not very clear in its details, but it shows that 
 further reductions in cost to $38 were expected, while the price 
 to be received was put at $42.50, with an allotment by the steel 
 rail pool of 60,000 tons. This would give a profit of $240,000 
 from rails, and other additions not now traceable were expected 
 to bring the total net profit to $250,000. Well might he ex- 
 claim, " Where is there such a business ! " 
 
 Let us see how the prophecy turned out. By March, 1878, 
 thanks to Captain Jones' excellent practice at the works, the 
 monthly product of rails had reached 7,383-^!^!- tons. The 
 cost of ingots had been reduced to $29. 50 and that of rails to 
 $37.77. During the year the cost of making rails did not go 
 more than a few mills above $38. In April it was $38.o6 6 ; 
 in May, $36.81 ; in June, $37-92 5 ; in July, $38.01 3 ; in August, 
 $37.82 9 ; in September, $36. 98? ; in October, $36.1 1 4 ; in No- 
 vember, $36.4i 5 ; and in December, $36. 52 5 . The average 
 price at which they were sold was $42.50, exactly correspond- 
 ing with Carnegie's guess. The net profits of a single month 
 (November) amounted to a fraction over $52,000; and Andrew 
 Carnegie, a propos of lofty heights, writes from Sorrento :
 
 ioo INSIDE FINANCIAL HISTORY 
 
 " Pyramids & Mt Etna & Vesuvius have been our last climbs 
 Mt E of course we did only from the base, Tell Capt 
 Jones there was a proud little stout man who gave a wild hurrah 
 when he saw E T ahead. Was nt it a close race with C I. 
 Co. but they had a start, besides we had to go through the 
 measles you know " 
 
 The earnings of the Edgar Thomson works this year were 
 $401,800 over thirty-one per cent, on its capital, which had 
 been increased to $1,250,000. Andrew Carnegie, by the way, 
 subscribed for the whole of this increase ; and a year later was 
 
 THEORY. 
 
 ' ' We are creatures of the tariff, and if ever the steel 
 manufacturers here attempt to control or have any 
 general understanding among- them the tariff would 
 not exist one session of Congress. The theory of pro- 
 tection is that home competition will soon reduce the 
 price of the product so it will yield only the usual 
 profit. Any understanding among us would simply at- 
 tempt to defeat this. There never has been or ever 
 will be such an understanding." Andrew Carnegie, in 
 American Manufacturer, fitly 2jl/i, iSSj. 
 
 shown by the balance sheet to owe the company $175,000 on 
 account of stock subscription a simple and easy method of 
 becoming a "majority stockholder." 
 
 The next year the price of rails took a sharp upward spurt, 
 reaching $67 a ton in December and $85 by Eebruary, iSSo. 
 In the same period the cost of manufacture was slightly re- 
 duced. In January, 1879, rails cost $38. 6o 6 a ton to make, and 
 in May, $35.84' 3 . During the first six months of this year the 
 Edgar Thomson works made $252,854. The second half of the 
 year the gains were even greater. In August, with rails selling 
 r.t $48, there was a clear profit of $10.50 a ton (pig-iron had
 
 PROFITS 140 PHR CEXT. 101 
 
 gone up $12.50); in October a fraction under $15, and by De- 
 cember over $22 a ton net profit. The monthly output of in^ 
 gots now exceeded 10,000 tons, and of rails five to six thousand 
 tons. " Where is there such a business ! " 
 
 These golden times continued throughout the following 
 year. In January the difference between the selling price of 
 rails and the cost of pig-iron was $53 a ton, the former being 
 $75 and the latter $22 a ton. The next month it was $65, and 
 of this something like $40 a ton was clear profit to the Edgar 
 Thomson Steel Company, who were running day and night and 
 
 PRACTICE. 
 
 Profit. Loss. 
 
 EDGAR THOMSON STEEL WORKS. 
 
 On rails, payment by rail pool. $123,983.28 
 
 HOMESTEAD STEEL WORKS. 
 
 Axles, pool assessments .. $22,345.32 
 
 Beams, " " .. 29,392.84 
 
 Channels, " " .. 13,002.74 
 
 Armor plate pool 100,842.59 
 
 UPPER UNION MILLS. 
 
 Zees, pool assessment. .. 5,518.70 
 
 Angles, " " .. 57,755.08 
 
 Tees, " " .. 4,456.32 
 
 Beams, " " .. 351.32 
 
 Channels, " " .. 366.97 
 
 /';-<>#/ /'ro fit and Loss account of Carnegie Steel Company for 1899. 
 
 had orders for 80,000 tons of rails. Without burdening this 
 narrative with further details of costs and prices, it may be 
 briefly stated that in this twelve months the Edgar Thomson 
 works made a profit of $1,625,000. For an infant industry not 
 out of its swaddling-clothes that was a very fair showing; and 
 was certainly as legitimate a cause of exultation on the part of 
 the members of the firm as those more public triumphs in me- 
 chanics already spoken of. The highest price of rails reached 
 this year was $85 a ton. Who shall say in presence of thes^ 
 facts that protection is not synonymous with prosperity? 
 
 To the Carnegies the tariff was specially helpful at thip
 
 102 INSIDJt FIXAXL'IAL HISTORY 
 
 time, when an extraordinary demand arose for iron and steel in 
 all its forms. The American manufacturers were unable to 
 meet this demand, and prices rose to a point at which importa- 
 tions of foreign steel could be made despite the high duties. 
 From $19,000,000 in 1879 these importations rose to over 
 $71,000,000 in 1880, $60,500,000 in 1881, and $68,000,000 in 
 1882. Simultaneously the profits of the Carnegie companies 
 rose from $512,068.46 in 1879 to $2,000,377.42 in 1881, and 
 $2,128,422.91 in 1882; for while the cost of rails was between 
 $34 and $38.50, the average price received during these years 
 was $56.26. It is obvious that but for the tariff these enor- 
 mous gains would have been impossible; and the magnificent 
 series of blast-furnaces, into the construction of which these 
 profits went, would never have been built. Of course, the rail- 
 roads of the country paid the difference; but they eventually 
 got it back, and more, out of the enormous tonnage of ore, coke, 
 and lime needed by the furnaces. Here, however, we are 
 trenching upon debatable ground ; and that is neither necessary 
 nor desirable in a work of this kind, which aims only to set out 
 the facts and leave the reader free to draw his own conclusions. 
 During the following years, before Mr. Frick came into su- 
 preme power and multiplied the Carnegie profits elevenfold in 
 eleven years, the net earnings of all the properties whose his- 
 tory we are tracing reached the following annual totals. The 
 average price of steel rails for these years is also given. 
 
 1883 $1,019,233.04 $37-75 
 
 4 1,301,180.28 30.75 
 
 5 1,191,993.54 28.50 
 
 6 2,925,350.08 34.50 
 
 7 3,441,887.29 37.08 
 
 8 1,941,555.44 29.83 
 
 The causes of this abundant prosperity were not confined to 
 the tariff, however. Some of them have been briefly adverted 
 to in the course of this narrative ; others have not been men- 
 tioned. A general review of this interesting division of the 
 subject is therefore not out of place at this point in our story.
 
 CAUSES OF SUCCESS 103 
 
 First and foremost among the causes of the extraordinary 
 success of the Edgar Thomson works is the fact that they were 
 planned and constructed under the immediate direction of the 
 late A. L. Holley. In his day he died in 1882 Mr. Holley 
 was the most experienced Bessemer steel man on the continent. 
 It was he who negotiated the purchase of the American patents 
 in 1864, and who buiit the experimental works at Troy. He 
 developed them into a commercial success, and was in charge of 
 their management until 1867. In this year he built the Har- 
 risburg Bessemer plant and superintended it until 1869. Then 
 he rebuilt and enlarged the Troy works, which had been de- 
 stroyed by fire. He next planned the Bessemer works at Chi- 
 cago. All this was before the Edgar Thomson works were even 
 thought of; and so completely had he identified himself with 
 the English process of steel-making and the erection of Bes- 
 semer converting works, that when the Edgar Thomson scheme 
 was first mooted Mr. Holley was the only man in the country 
 to whom a prudent manufacturer would confide the construction 
 of a new steel plant. There were, moreover, certain inventions 
 and improvements of his without which no converting plant was 
 complete. In a history of the Bessemer Steel Industry in 
 America, Mr. Robert W. Hunt thus speaks of the Edgar Thom- 
 son works : 
 
 " In arranging these works, Mr. Holley made many improve- 
 ments over any of his previous efforts, and, assisted as he was 
 (by Mr. P. Barnes, resident engineer, and Mr. W. R. Jones), 
 the works stand to-day as a fit monument of the progress of the 
 Bessemer process in this country." * 
 
 * It is a little singular in view of these well-known facts that Andrew 
 Carnegie should claim that he " built at Pittsburg a plant for the Bessemer proc- 
 ess of steel-making, which had not until then been operated in this country." 
 Mr. Weeks, editor of the American Manufacturer, commenting on the comple- 
 tion of the Edgar Thomson works remarked [September gth, 1875]: " We [in 
 Pittsburg] have been slow to take advantage of the Bessemer process, though one 
 at least of the owners of the Bessemer patents for this country is a prominent 
 steel manufacturer of this city [lames Park, Jr.]. This dilatoriness is the more 
 remarkable as there has not been the least doubt as to its success and value both
 
 IO4 
 
 INSIDE FINANCIAL HISTORY 
 
 In the schedule of cost of the Edgar Thomson works is an 
 item, under patent fees, "$5,000 for Holley's Improvements," 
 a sum equal to that paid for the license to use the Bessemer 
 
 patents. This represents 
 the measure of their value. 
 
 The mechanical genius 
 of Captain Jones, however, 
 refused to be bound by pre- 
 cedent, and many innova- 
 tions were made in the 
 equipment of the Edgar 
 Thomson works by his force- 
 ful insistence. An instance 
 is here recalled : 
 
 Captain Jones had 
 ordered a certain type of 
 open-topped housing for the 
 rail-mill which had been 
 found unworkable in other 
 plants. " But, Mr. Jones," 
 remonstrated Mr. Holley in 
 his gentle way, "how can you justify the putting in of open- 
 topped housings when you know that they tried them at the 
 Lacka wanna works and abandoned them ? " 
 
 "Why," replied Jones in his positive way, "they put them 
 
 "And why in Hades shouldn't I?" 
 
 practically and commercially. Indeed it is to this country and to an American, 
 Mr. A. L. Holley, that we are indebted for some of the most valuable inventions 
 connected with the Bessemer plant, inventions that, taken in connection with those 
 of the two Fritzes, have made it possible with an American plant of a given 
 nominal capacity, to turn out two or three times as great a product as with the 
 English. We have so often referred to the incredulous astonishment of the mem- 
 bers of the British Iron and Steel Institute when Mr. Holley told them what we 
 were doing in this country, that we need not repeat the statement here. 
 
 Notwithstanding this delay in taking up this process, Pittsburg can now con- 
 gratulate herself that she has as fine a Bessemer plant as the world can boabt, 
 not so extensive as some, but as complete and perfect as any and much more so 
 than others. "
 
 CAPTAIN WM. R. JONES, 
 
 TO WHOSE GENIUS WAS PRINCIPALLY DUE THE FIRST SUCCESS OF THE 
 EDGAR-THOMSON STEEL WORKS.
 
 Plate V. 
 
 CAPTAIN WM. R. JONES 
 
 TO WHOSE GENIUS WAS PRINCIPALLY DUE THE FIRST SUCCESS OF THE 
 EDGAR THOMSON STEEL WORKS
 
 SKILFUL MANAGEMENT 105 
 
 down with three-inch round iron bolts. I'm putting mine in 
 with four-inch square steel bolts." 
 
 " I grant you," answered Mr. Holley, "that if you put them 
 in with four-inch square steel bolts you will be able to hold them." 
 
 "And why in Hades shouldn't I put 'em in with four-inch 
 steel bolts if that will accomplish what I'm after? " 
 
 In this way Jones was constantly making little changes and 
 improvements, too insignificant to patent or even to mention 
 outside of the works ; but they did much to ensure the perfect 
 working of the machinery. The writer recalls one such im- 
 provement. It was only a couple of pieces of old rail, shaped 
 to throw the half-rolled bloom onto a moving bed as it came 
 through the rolls ; but it saved the labor of a dozen men and 
 did the work better. 
 
 But greater than all of Jones' inventions was his progres- 
 sive policy. Familiar with all sorts of machinery, he saw to it 
 that only the best and most modern appliances were installed; 
 and thereafter he was quick to adopt improvements as fast as 
 they were made. The young men whom he trained ably sec- 
 onded him, as is shown in the remarkable achievements of 
 Julian Kennedy and Gayleyat the blast-furnaces, and by Schwab 
 and Scott at Homestead. The famous scrap-heap for outgrown, 
 not outworn, machinery was instituted by Jones, who never hesi- 
 tated to throw away a tool that had cost half a million if a bet- 
 ter one became available. And as his own inventions saved the 
 company a fortune every year, he was given a free hand. Under 
 this greatest of all the captains of the American steel industry 
 a group of younger men grew up, trained in his broad views and 
 habituated to his progressive methods; so that when, in 1889, 
 he was removed from his sphere of activity in a horribly tragic 
 way by the explosion of one of his furnaces, there were men 
 ready trained to take up his work and continue it.* 
 
 * The following passages are from a beautiful obituary notice of Captain 
 Jones, written and published by the late Joseph D. Weeks, who was so well 
 qualified to appreciate his genius: " He was a Captain of Industry, unsurpassed
 
 io6 
 
 Nor can the important services of Mr. Shinn be overstated. 
 As related in another place in a letter of Andrew Carnegie, his 
 associates used his name as a prayer of thanksgiving every 
 night before going to bed. An example of his contributions to 
 the prosperity of the firm may be added to those given else- 
 where in this history. 
 
 The moulds into which the molten steel was poured out of 
 the converting-vessels were at first made out of a grade of cast- 
 iron which soon fractured under the extremes of temperature to 
 which they were subjected. The loss from this cause at one 
 time added about sixty cents to the cost of making a ton of 
 steel. In going over his cost sheets one day with Captain 
 Jones, to try to find some detail capable of judicious pruning, 
 Mr. Shinn's attention was arrested by the high cost of ingot- 
 moulds. He thereupon worked out a metal mixture capable of 
 
 as an organizer, marvellous in his knowledge of detail, fertile in expedients and 
 invention; always planning new victories and winning them. His success is 
 written in the monster establishment at Bessemer, which will remain a monument 
 to his energy, his skill, his achievements. 
 
 The position he filled was one that demanded a higher order of executive 
 ability than that required of the President of the United States or any of his 
 cabinet, and this fact was recognized by a salary equal to that of the President. 
 As an executive officer alone he was great ; but in addition to this executive 
 ability his position demanded the possession of the inventive faculty in the highest 
 degree, coupled with the power of analysis on the one hand and of generalization 
 on the other that are rarely found combined in any one man. He not only knew 
 what he wanted done but how to do it. Never trammelled by precedent he set all 
 rules at defiance if he could more surely and quickly reach the object sought by so 
 doing. 
 
 Many of the inventions of details that have made other inventions successes 
 and have placed Bessemer steel-making where it is to-day are his. 
 
 And yet after all we doubt not that the fact that would give him the most 
 sincere gratification is the knowledge that he preserved in such a high degree the 
 respect, the love of the thousands that were under him, and he deserved all the 
 love they bear him and all the respect they pay his memory. No one more 
 honestly and with more singleness of purpose strove in every way to help and 
 benefit those under him than Captain Jones. Himself from the ranks of labor, 
 he never forgot the fact and looked at all questions affecting the relations of em- 
 ployer and employed in the works he managed from the standpoint of both of 
 these relations ; and both employer and employed have come to realize that his 
 judgment was in the main wise as they have always believed it was honest." 
 American Manufacturer, October 4th, 1889.
 
 SPIRIT OF COMPETITION to; 
 
 greater resistance to alternations of heat and cold, and had some 
 moulds cast of this at the foundry of Macintosh & Hemphill. 
 Instead of being destroyed after less than twenty heats, as here- 
 tofore, the new moulds withstood the strain of sixty heats or 
 more; and the ingot-mould-cost per ton of steel dropped from 
 sixty to fifteen cents. On a product of 10,000 tons a month, 
 the saving was over $40,000 a year a sum almost sufficient in 
 itself to determine the financial success or non-success of the 
 works under ordinary conditions of trade. Nor was this all. 
 The new moulds were made of Bessemer iron; and when they 
 broke they were simply passed into the converter and made into 
 steel rails. 
 
 This metal mixture was kept a secret for some years, during 
 which the Edgar Thomson Company had an important advan- 
 tage over competitors. After a time the secret was given to 
 Leander Morris, in whom Andrew Carnegie, his cousin, had an 
 interest of a peculiarly close and confidential nature. This is 
 a story in itself, full of romance and pathos. Mr. Morris was a 
 member of the foundry firm of Morris & Marshall, and for years 
 they had a practical monopoly of the business of casting ingot- 
 moulds. 
 
 Another cause of success is to be found in the spirit of com- 
 petition which animated every man about the place. A keen 
 rivalry had existed from the first among the Bessemer steel 
 men; and this was intensified by the building of the Edgar 
 Thomson works, with all the improvements resulting from Mr. 
 Holley's ten years of experiments. Captain Jones has graphi- 
 cally told the story of this rivalry in the paper already referred 
 to, which was read at the meeting of the British Iron and Steel 
 Institute in May, 1881. He says: 
 
 " Now as to the cause of the great output of American steel 
 works. 
 
 On the introduction of the Bessemer process in America, 
 quite a number of young men, who believed that the process 
 would revolutionize the metallurgical world, became anxious to
 
 io8 INSIDE FINANCIAL HISTORY 
 
 identify themselves with its development. At the Troy works, 
 which may be considered the pioneer Bessemer works of the 
 country, Mr. A. L. Holley was applying his brilliant talents to 
 the perfecting of American plants. Forsythe, of the North 
 Chicago works, was also assiduously studying the process. A 
 few years later the Pennsylvania Steel Works, the model of 
 nearly all the subsequent American works, were constructed by 
 Mr. Holley. Some years later still the Cambria works were 
 built. At all these works there were ambitious young men 
 closely studying and carefully watching all possible points of 
 development. 
 
 From the Cambria graduated Mr. R. \V. Hunt, general 
 superintendent of the Albany and Rensselaer works; Jones 
 and Fry, at present connected with the Cambria ; Rinard, of the 
 Fdgar Thomson ; Stanton, of the Vulcan ; Williams, of the new 
 Pittsburg Bessemer works ; and myself. 
 
 Mr. Holley, as editor of Van Nostrand's Eclectic Magazine, 
 a few years ago, records as follows : 'We have information from 
 the (Penn.) steel works that on Tuesday of last week they had 
 succeeded in making eight blows or conversions in ten hours. ' 
 I quote from memory. 
 
 Soon the Cambria Iron Works commenced to creep up to 
 thirty-six heats or about one hundred and sixty tons in twenty- 
 four hours. After the dispersion at the Cambria works attend- 
 ant on the death of Mr. George Fritz, one of the ablest of Amer- 
 ican metallurgists,, Mr. Hunt assumed control of the Bessemer 
 department of the Cambria works. A strong rivalry imme- 
 diately commenced between these two gentlemen ; and great was 
 my astonishment at this time on receiving from Mr. Hunt a 
 telegram stating that 'in the last twenty-four hours we have 
 made fifty heats, or about two hundred and fifty tons.' This 
 achievement caused great surprise in the Bessemer world. In 
 the meantime Forsythe, having concluded his studies at Troy, 
 had assumed the reins at North Chicago; and reports soon cir- 
 culated about what he was doing there. This only stirred up 
 Messrs. Fry and Hunt and Liebert, of Bethlehem, to greater 
 achievements; and so the product kept on increasing, while 
 we of tlie Edgar Thomson were compelled (being engaged in erect- 
 ing tJie works} to listen to tJieir wonderful stories. In 1875 the 
 Fdgar Thomson began operations, followed soon afterwards by 
 the Scranton and Vulcan works, while the Joliet works under 
 an efficient organization had again entered the field. 
 
 In the latter year the output of American works began to 
 assume those proportions which have caused so much surprise
 
 CAPTAIN JONES' EXPLANATION 109 
 
 in England. The output soon reached 1,500 tons of ingots a 
 week, then 1,800 tons, then 2,000 tons, 'and ultimately increas- 
 ing to 3,000, 3,100, 3,200, and 3,300. 
 
 I am frequently asked by people, 'Where will you Bessemer 
 men stop? ' and 'What is the limit of your production? ' lean 
 only reply: 'Ask someone who knows more about it than I do.' 
 But I really believe we are on the verge of the elastic limit of 
 production, although it may yet reach a product of 14,500 to 
 15,000 tons for what I term a 'long month ' of twenty-one days 
 per pair of converters. [Julian Kennedy afterwards brought the 
 record to over 19,500 tons.] 
 
 The output of American works is governed by the facili- 
 ties for getting the ingots out of the road. This is the sticking- 
 point just now. [This difficulty was met by casting the ingots 
 on trucks and hauling them away by locomotives.] Therefore 
 the works that cast their tonnage in the least number of moulds 
 have a decided advantage in reaching the ultimate production of 
 the present American or Holley plant. The race, so far as the 
 Edgar Thomson works are concerned, will soon cease. A few 
 months more and the Edgar Thomson will change from a two 
 seven-ton converter plant to a three ten-ton plant, and then our 
 efforts will be concentrated upon keeping pace with the Bethle- 
 hem four-vessel plant, and with the North Chicago and Pennsyl- 
 vania Steel Company's three-vessel plants."-' 
 
 Next to the strong but pleasant rivalry of the young men 
 who have assumed control of the works, and who have worked 
 hard and faithfully to excel, the development of American prac- 
 tice is due to the esprit dc corps of the workmen after they get 
 fairly warmed to the work. As long as the record made by the 
 works stands the first, so long are they content to labor at a 
 moderate rate ; but let it be known that some rival establish- 
 ment has beaten that record, and then there is no content until 
 the rival's record is eclipsed. 
 
 Another marked advantage which the American works 
 have is the diversity of nationality of the workmen. We have 
 
 * One day in November, 1891, the mill started out to beat the best day's 
 record of the South Chicago mill of the Illinois Steel Company, which was 1,700 
 tons. The attempt was a remarkable success, as the following figures show : 
 
 Rails made in twenty-four hours I ,Q24 tons. 
 
 Ingots, same time 2,074 " 
 
 Best twelve hours (night turn) rails. 981 " 
 
 " " ingots 1,087 " 
 
 Best run two hours . . 2OI "
 
 no INSIDE FINANCIAL HISTORY 
 
 representatives from England, Ireland, Scotland, Wales, and all 
 parts of Germany, Swedes, Hungarians, and a few French and 
 Italians, with a small percentage of colored workmen. This 
 mixture of- races and languages seems to give the best results, 
 and is, I think, far better than a preponderance of one nation- 
 ality. 
 
 In increasing the output of these works, I soon discovered 
 it was entirely out of the question to expect human flesh and 
 blood to labor incessantly for twelve hours, and therefore it was 
 decided to put on three turns, reducing the hours of labor to 
 eight. This proved to be of immense advantage to both the 
 company and the workmen, the latter now earning more in eight 
 hours than they formerly did in twelve hours, while the men can 
 work harder constantly for eight hours, having sixteen hours 
 for rest. 
 
 Another important matter connected with fast working is 
 the maintenance of the machinery. As fast as the weak parts 
 in the machinery are developed they are strengthened. In all 
 new machinery the aim is to get an excess of strength; the 
 usual factor of safety in new rolling machinery is not allowable. 
 The machinery must be made extra heavy and strong, so that 
 the inertia of the mass will swallow all strains thrown upon it." * 
 
 Following in importance the protective tariff, the mechani- 
 cal excellence of the works, the inventive skill of its managers, 
 and the rivalry of competing plants, as factors in the extraordi- 
 nary success of the Edgar Thomson Steel Company, come cer- 
 tain personal influences. These were subtle and vague, and not 
 easily traceable except in results which were rarely visible to 
 outsiders. As a consequence, biographers and historians have 
 been led into all sorts of fanciful conceits concerning the rela- 
 tive importance of some of the individuals connected with the 
 concern. 
 
 One closely associated with the group, being asked to define 
 the functions of the various partners in the Edgar Thomson 
 Company, recently made the following trite comparison : " Shinn 
 bossed the show; McCandless lent it dignity and standing; 
 
 * Which recalls Captain Jones' remark to Holley on the advantage of heavy 
 steel bolts to hold the housings of the rail-mill.
 
 A HAPPY SIMILE 
 
 1 1 1 
 
 Phipps took in the pennies at the gate and kept the pay-roll 
 down; Tom Carnegie kept everybody in a good humor, with 
 Dave Stewart as his understudy." "And Andrew Carnegie? " 
 he was asked. " Oh, Andy looked after the advertising and 
 drove the band wagon ! " was the ready reply. 
 
 With due allowance for its humorous exaggeration, this 
 blunt comparison fairly represents the facts. The high com- 
 mercial and social standing of Mr. McCandless not only gave 
 dignity to the enterprise, but won financial support for it in its 
 days of need. Without him, the 
 company would hardly have tided 
 over the troublous times of 1873 
 and the lean years following the 
 panic. The special capacity of Mr. 
 Phipps has been abundantly illus- 
 trated in connection with 
 preceding enterprises. Mr. 
 T. M. Carnegie's abilities 
 were too numerous and 
 complex to be summed up 
 in a sentence. He was a 
 man of sterling integrity ; 
 and it was a common say- 
 ing in Pittsburg that his 
 word was better than some men's bond. He had remarkable 
 judgment; and his opinion on commercial questions was valued 
 above that of much older and more experienced men. Quick 
 and keen in his perceptions, cautious but progressive in his 
 ideas, faithful to his engagements, and just in all his dealings, 
 he gave to his company that which corporations are habitually 
 lacking, namely, a conscience. His death in 1886, at the early 
 age of forty-three, was a loss not only to his associates, but to 
 the whole business world of Pittsburg. To this day all who 
 knew him, great and small, rich and poor, workman and master, 
 revere his memory and regret his loss. Mr. Stewart never 
 
 "Andy drove the band wagon."
 
 I 12 
 
 INSIDE FINANCIAL HISTORY 
 
 sought prominence, and was content to the day of his death, in 
 1889, to merge his own personality in the organization he worked 
 for. Devoted to Tom Carnegie, he allowed no personal injury to 
 affect his loyalty to his friend; and more than once he stoically 
 accepted the rough rebukes of the elder Carnegie because Tom 
 wished for peace. Once, indeed, exasperated at the gibes given 
 at his own table, he rose in anger, saying that the bounds of all 
 reason had been reached and the laws of hospitality outraged ; 
 
 but the apology which Tom arranged 
 was at once accepted and peace was 
 restored. 
 
 The part at first selected by An- 
 drew Carnegie for himself was the 
 development of outside trade and 
 the procurement of orders. Here he 
 displayed an originality so marked 
 that it amounted to gen- 
 ius. Endowed with a 
 ready wit, an excellent 
 memory for stories, and 
 a natural gift for reciting 
 them, he became a social 
 favorite in New York 
 and Washington, and 
 never missed a chance to 
 make a useful acquaint- 
 ance. His mental alert- 
 ness, ready speech, and enthusiastic temperament made him 
 a delightful addition to a dinner party; and many an uncon- 
 scious hostess, opening her doors to the little Scotchman from 
 Pittsburg, has also paved the way to a sale of railroad material. 
 Carnegie early found that his power to promote sales grew in 
 proportion to his own importance. His natural love of promi- 
 nence was thus fortified by its commercial value ; and he lost no 
 opportunity of adding to his interest *in the firm. As a result 
 
 "An unconscious hostess. '
 
 UNFRIENDLY RIVALRY'S 113 
 
 he was soon regarded as the sole founder and builder of 
 the enterprise which bore his name, and his partners, if 
 thought of at all, were ranked with the other machinery of the 
 works. 
 
 At first Andrew Carnegie's attention was principally occu- 
 pied in schemes of his own construction companies for new 
 railroads and bridges, and the marketing of bonds. But as the 
 iron businesses in which he was financially interested grew in 
 importance, he gave them more of his time and attention. Re- 
 lieved of the routine of detail and the never-ending cares of 
 management which were his partners' daily lot, he had a mind 
 free to range over the industrial field, picking up scraps of 
 information concerning the requirements of railroads, and bring- 
 ing news of many a large contract. Supplied with daily reports 
 (if the product of every department of each of the works, he had 
 leisure to make comparisons, and to prod with a sarcastic note 
 any partner or superintendent whose work did not rank with the 
 best. In time he became very expert at these postal proddings ; 
 and with half-a-dozen scathing words scribbled on the back of 
 his address card, he could spur the best of his managers to still 
 more heroic achievements. Captain Jones, who was too high- 
 spirited a war-horse to brook such spurrings, sent in his resigna- 
 tion with almost rhythmical periodicity, and was then tempted 
 back into harness by a handsome gift and still handsomer apol- 
 ogy. As he put his head into the halter again, he would fling 
 a gibe at the other managers who took their rowellings more 
 tamely. " Puppy dog number three," he would say in sarcastic 
 parody of the scribblings from New York, "you have been 
 beaten by puppy dog number two on fuel. Puppy dog number 
 two, you are higher on labor than puppy dog number one." 
 And so on. This was the lighter side of the system of un- 
 friendly competition which Andrew Carnegie originated and fos- 
 tered. Some of these managers and partners did not speak to 
 each other for years, so skilfully were their jealousies and rival- 
 ries played upon ; and there was hardly a man at the head of
 
 ii4 INSIDE FINANCIAL HISTORY 
 
 any department of the Carnegie concerns whose flanks were not 
 ripped open in the fierce race for supremacy. Some, like Cole- 
 man, Shinn, Scott, Griffin, Kennedy, Abbot, and Walker, re- 
 volted and flung back the taunts with interest. Others let their 
 anger be transmuted into fresh energy and a determination to 
 win. These are the ones who remained and became "young 
 geniuses. " 
 
 " You cannot imagine the abounding sense of freedom and 
 relief I experience as soon as I get on board a steamer and sail 
 past Sandy Hook," once said Andrew Carnegie to Captain 
 
 "Carnegie did not roost in the tree. . . . He would 
 sit afar off, on the rail-fence, apparently idly watching 
 the spaders and waterers and trimmers and caterpillar- 
 killers, all desperately at work, with the sweat stream- 
 ing. Presently he would descend from his rail-perch, 
 catch up a great club and lay frantically about him. 
 Bruised skulls here ; broken skulls there ; corpses 
 yonder ; fellows with raw heads and aching bones, 
 crawling rapidly into the cover of the tall grass ; im- 
 precations filling the air. A scene of peaceful industry 
 transformed into a shambles. Grinning grimly at his 
 club, Carnegie would stroll back to his rail-perch, 
 usually Skibo." "The Men -who Made the Steel 7^rust," by 
 David Graham Phillips. 
 
 Jones. " My God, think of the relief to us ! " exclaimed Jones 
 with his usual bluntness. The retort was not all in jest. 
 
 In his social campaign Andrew Carnegie did not neglect the 
 quest for political influence. The Government brooded lov- 
 ingly over the industries which paid their owners fifty to a hun- 
 dred per cent, per annum ; and there is a law of political equiva- 
 lents which Mr. Carnegie never ignored. The leaders of both 
 parties became his intimate friends ; and liberal subscriptions to 
 their respective campaign funds justified his reliance on their 
 favor. "How would you like to invest $10,000 in the sena- 
 torial fight in ? " wrote James G. Elaine in 1886. As the
 
 -A BAND OF DEVOTED FRIENDS" 115 
 
 Keystone Bridge Company had an imcollectable account of 
 some $200,000 against one of the junior American republics 
 for a steel building at the New Orleans Exposition, Mr. Carne- 
 gie was glad to make the investment ; and the friendly offices of 
 the State Department secured an early settlement of the claim. 
 No one had more faith than Carnegie in the helpful effect of a 
 congratulatory telegram to a president-elect or a new senator; 
 nor did ever a Scotchman better gauge the trade possibilities 
 of a dinner at which Western congressmen might meet the 
 great ones of earth in literature and philosophy. Never was 
 
 "My partners are not only partners, but a band of 
 devoted friends, who never have a difference. I have 
 never had to exercise my power, and of this I am very 
 proud." 
 
 "I never enjoyed anything- more than to get a sound 
 thrashing in an argument at the hands of these young 
 geniuses." 
 
 "When I could not bring my associates in business 
 to my views by reason I have never wished to do so 
 by force. As for instructing or compelling them under 
 the law to do one thing or another, that is simply ab- 
 surd. I could not if I would, and I would not if I 
 could." Andrew Carnc-'ic. 
 
 band wagon driven with such skill. The box of Carnegie's 
 chariot became the "seats of the mighty." Herbert Spencer's 
 acquaintance was made on board a transatlantic liner, as was 
 that of sundry British peers ; and the visits of these personages 
 to the Pittsburg works were reported in a thousand newspa- 
 pers from Maine to California and from Land's End to John 
 O'Groats. 
 
 And so a politico-social campaign went on hand in hand 
 with the rail, bridge, armor-plate, and structural-steel business, 
 through seasons of opera, concerts, lecturings, and book-publish- 
 ings, until the name Carnegie was written in bright letters
 
 u6 
 
 INSIDE FINANCIAL HISTORY 
 
 across the sky of two hemispheres, and people forgot that there 
 were any other steel works in the world. 
 
 Meanwhile in Pittsburg the partners worked steadily on, 
 building dollar by dollar the great golden pyramid by which 
 their majority stockholder was to be immortalized. 
 
 Jiteel works by night. 
 
 right by S. S. Mi-C'lure Co.
 
 CHAPTER VIII 
 QUARRELS AND EJECTURES 
 
 DESPITE this great and uninterrupted good 
 fortune, the internal discord in which all 
 the Carnegie enterprises were born and 
 brought up continued without abatement, 
 and wrought many changes in the person- 
 nel of the organization. Ranking with 
 
 other evolutionary factors in the development of the business, 
 and more influential than any in stamping it with the Carnegie 
 personality, these disagreements are deserving of a more than 
 passing reference. 
 
 At the organization of the steel company, Andrew Carne- 
 gie's interest was one-third of the whole; but it appears from 
 a printed statement of Mr. Shinn that he early developed " a 
 sentimental desire to have an even half." This he got, and 
 more, as one by one the founders of the organization dropped 
 away from it. 
 
 The first to go was Mr. Coleman ; and his interest was 
 bought by Mr. Carnegie "after a bitter quarrel between them," 
 to quote from a letter addressed to the author by one of the old 
 members of the corporation. Before its purchase, however, 
 Andrew Carnegie repeatedly speaks of this Coleman interest as 
 a desirable acquisition. In the letter of April ijth, 1876, now 
 before me, immediately following the exclamation quoted, 
 " Where is there such a business! " he goes on to say: 
 
 " I want to buy Mr. Coleman out & hope to do so. Kloman 
 will have to give up his interest. These divided between Tom, 
 Harry You and I would make the Concern a close Corporation 
 Mr. Scott 9 loan is no doubt in some Bankers hands & may also 
 
 117
 
 n8 
 
 QUARRELS AND EJECTURES 
 
 be dealt with after a little then we are right & have only 
 
 to watch the Bond conversions." 
 
 Photographic reproduction of a letter written by Andrew Carnegie on April i-jth, 
 1876, in which he outlines plans for the purchase o partners' interests. 
 
 In a letter written a little earlier he mentions the easy terms 
 on which he hoped to acquire the Coleman interest : 
 
 "Yesterday in talking with Mr Coleman ... I said I 
 would be willing to take his 100.000$ stock 5 years at Par 6^ 
 int pr ann payable semi annually principal payable after 5 
 years in i 2 & 3 years say He wanted much better bargain 
 but I would do no better finally he said to write Tom what I 
 offered & he would talk over it I suppose it will be arranged." 
 
 And so it was. At the same time disagreements arose 
 among the other members of the firm, growing out of the price
 
 A SCHEME OF ELIMINATION 119 
 
 to be paid the Lucy Furnace Company for pig-iron ; and Messrs. 
 T. M. Carnegie and Phipps sold half of their stock in the Edgar 
 Thomson to Andrew Carnegie, refusing to engage in the erec- 
 tion of a second Lucy stack unless he bought it. The dispute 
 concerning pig-iron was finally settled by a sliding scale follow- 
 ing the prices of rails; but before long fresh troubles arose 
 through the inferior quality of the Lucy product. On April 
 2/th, 1877, Mr. Shinn, general manager, in a letter marked 
 " private and confidential," wrote to Andrew Carnegie as follows : 
 
 " Another matter comes up in this connection for most seri- 
 ous consideration. It is this. If the L. F. Co. is to furnish 
 us the most, or all of, our metal, it is of the utmost consequence 
 that we should have the fullest confidence in each other, and 
 that we could feel assured at all times, that no material would 
 be used to cheapen the metal, that would or could injure bur 
 product. That the cinder used last year did this I am very well 
 satisfied ; and when Mr. Phipps assured me in January last that 
 no cinder was being used, and that no change would be made 
 without consulting or advising us, I felt easy; but we have had 
 some 'split ends' among our Lake Shore rails and now comes 
 the (to me) painful rumor that cinder is being used. You are 
 most interested in our getting and keeping a reputation for 
 making tlie best rails in America, and to do that we must, use 
 the best material. My reputation, as well as my capital, is in- 
 volved in the matter, and if I am to make it my life occupation, 
 and cut loose from all RR. associations, it can only be, as you 
 can readily see, upon a basis of full confidence between us, and 
 between us all as associates, in all our relations." 
 
 The difficulties thus arising, joined no doubt to the ever- 
 increasing output of the steel works, developed in the partners 
 of the Edgar Thomson Company not interested in the Lucy 
 furnaces a determination to make their own pig-iron. And 
 thus it came about that the Edgar Thomson people erected 
 their own blast-furnaces and inaugurated a new era in iron- 
 making. But the cabal resulting from these disagreements 
 precipitated the "ejecture" of those who were most strenuous 
 in their opposition to the Lucy Company having any undue ad- 
 vantage through their connections with the Edgar Thomson.
 
 i jo QUARRELS AND EJECTURES 
 
 The next one to go out was Andrew Kloman, under circum- 
 stances already related. He had an interest of 350,000 in the 
 Edgar Thomson, which Andrew Carnegie acquired. 
 
 Then came the little fellows who held the convertible bonds 
 and wanted stock for them. To these Andrew Carnegie was 
 frank enough to say that they were not wanted and that their 
 most profitable course would be to quietly take back their money 
 and get out. The privilege of conversion was highly valued 
 when these bonds were sold, because it gave their holders a 
 speculative chance of becoming permanently interested in the 
 concern if it proved successful, and if not they still held a lien 
 on a property that had cost three times the sum of their mort- 
 gage. But the privilege was disputed ; and in most cases the 
 bondholders chose to accept their money rather than go into 
 litigation with the now powerful corporation. Young Gardiner 
 M. McCandless, however, insisted on his rights. He was reluc- 
 tantly admitted to the firm, and became Carnegie's secretary. 
 
 Colonel Scott and Andrew Carnegie had a timely quarrel, 
 and the former took back his money, declaring that nothing 
 would induce him to become permanently interested in the 
 Edgar Thomson. As for Mr. J. Edgar Thomson, he died be- 
 fore the bonds matured, and his executors also waived their 
 rights and accepted cash in discharge of the obligation. 
 
 The other partners included in the scheme of elimination 
 were under a surveillance which they little suspected. Some 
 of them had engaged in a disastrous stock speculation, which 
 Andrew Carnegie, referring to Mr. McCandless' share in it, 
 characterized in one of his letters as "miserable conduct," and 
 hinted at certain changes he had long had in mind. But before 
 this he wrote to Mr. Shinn (May ist, 1877) : 
 
 " There are possible Combinations in the future 
 
 It is n't likely McCandless Scott & Stewart will remain 
 
 with us. I scarcely think they can I know Harry & Tom 
 
 have agreed with me that you out of the entire lot would be 
 
 wanted as a future partner & I think we will one day make it a
 
 DEATH OF McCANDLESS 
 
 121 
 
 partnership Lucy F Co U Mills, E T &c & go it on that basis 
 the largest and strongest Concern in the Country." 
 
 Mr. McCandless, however, was eliminated by the kindly 
 hand of death; and Andrew Carnegie's grief was intense and 
 profound. Writing from Bombay on February 22d, 1879, where 
 he heard the sad news, he says : 
 
 "It does seem too hard to bear, but we must bite the lip & 
 go forward I suppose assuming indifference but I am sure none 
 
 DAVID MCCANDLESS, 
 
 First Chairman of the Edgar Thomson Steel Company. 
 
 of us can ever efface from our memories the image of our dear, 
 generous, gentle & unselfish friend To the day I die I know 
 I shall never be able to think of him without a stinging pain at 
 the heart His death robs my life of one of its chief pleasures, 
 but it must be borne, only let us take from his loss one lesson 
 as the best tribute to his memory, let us try to be as kind and
 
 122 QUARRELS AND EJECTURES 
 
 devoted to each other as he was to us. He was a model for all 
 of us to follow One thing more we can do attend to his 
 affairs & get them right that Mrs. McCandless & Helen may be 
 provided for I know you will all be looking after this & you 
 know how anxious I shall be to cooperate with you." 
 
 The partners accordingly carried Mr. McCandless' interest 
 undisturbed until Mr. Carnegie's return the following summer. 
 The great profits made during this period have been adverted to, 
 as well as Carnegie's joy on Mount Etna or some such elevation. 
 Despite this, he insisted on the purchase of Mr. McCandless' 
 interest at the book value shown by the appraisement made be- 
 fore Mr. McCandless' death. The member of the old corpora- 
 tion previously quoted writes me : 
 
 " But this decision was not made until late in July follow- 
 ing, after Mr. Andrew Carnegie's return from his trip around 
 the world, when large profits had been made and still larger 
 were shown by the orders entered on the books for delivery dur- 
 ing the following nine months. . . . Legally the company acted 
 fairly." 
 
 No share of these profits was included in the price paid to 
 Mrs. McCandless, and she only received some $90,000 for her 
 husband's interest. It had cost $65,000 in cash. 
 
 Mr. Shinn was the next to go out of the concern ; and the 
 story of his leave-taking found its way into the courts. When 
 Mr. McCandless died, Mr. Shinn expected to be made chairman 
 in his place. He was the largest stockholder after the elder 
 Carnegie; and as he had done much to make the business a suc- 
 cess, he felt that his services and interest entitled him to the 
 most honorable position in the company. But Carnegie, who 
 controlled the board, had left orders before leaving on his trip, 
 that in the event of a vacancy in the chair his brother was to 
 be elected to fill it. This was accordingly done, Shinn protest- 
 ing by letter to Carnegie in Egypt, and plainly setting forth his 
 claims and disappointment. Carnegie replied, urging Shinn to 
 " let the matter rest until my return, & we will meet as friends
 
 THE FIGHT WITH SHINN 123 
 
 desirous of pleasing each other, & I am sure our happy family 
 will remain one. " 
 
 Shinn's claim was a reasonable one, judged in the light of 
 the letters he had received from Carnegie. 
 
 " Remember I can see no fault with your management as it 
 is," Carnegie wrote him in August, 1876. 
 
 " On the contrary I assure you there are few nights in which 
 before sleeping I dont congratulate myself at our good fortune 
 in having you there Tom and Harry ditto but we dont think 
 we can have too much of 'so good a thing ' & want somehow or 
 other to get you root & branch." 
 
 Photographic reproduction of part of a letter from Andrew Carnegie to William P. 
 
 Shinn. 
 
 Again : 
 
 " I like the tone of your personal letter. Much Have al- 
 ways known you would find it necessary if E. T. proved what
 
 124 QUARRELS AND EJECT! 'RES 
 
 we expected to give it all your time and thought It is a 
 Grand Concern & sure to make us all a fortune. With you at 
 the helm, & my pulling an oar outside, we are bound to put it 
 at the head of rail making concerns 
 
 My preference would be for you to double your interest & 
 manage it to the exclusion of everything else we to carry the 
 second 50. 000$ until you could pay it & allow you to draw on a/c 
 profits any sum required for expenses, but this shall be as you 
 prefer. We shall not quarrel about Your Compensation " * 
 
 Accordingly Shinn had resigned his position on the rail- 
 roads, had bought a part of the Coleman interest, and was now 
 giving his whole time to the management of the Kdgar Thom- 
 son works. 
 
 On the elder Carnegie's return, however, the chairmanship 
 was permanently vested in his brother Tom. 
 
 Meanwhile other matters of dispute had arisen between 
 Shinn and his colleagues which had become the subject of out- 
 side gossip and comment ; so that the slight was doubly felt by 
 him, and he sent in his resignation. In his letter of withdrawal 
 from the management of the company, dated September i.3th, 
 1879, he says : 
 
 " I have full confidence in the pecuniary success of the E. T. 
 S. Co. Limited and purpose to remain your business associate; 
 and it will be my desire, as it will be my interest, to advance 
 its success by any and all means in my power." 
 
 This, however, did not accord with Carnegie's plans, nor 
 with the policy, now first inaugurated, that no officer of the 
 company should retain his interest after he had resigned his 
 office ; and a committee was appointed by the Board of Managers 
 to confer with Mr. Shinn about the purchase of his interest. 
 This committee consisted of John Scott and Andrew Carnegie. 
 The former has reduced his statement of the transaction to 
 writing. It is as follows : 
 
 *In this and other Carnegie letters the spelling and punctuation of the 
 originals are preserved.
 
 "MALICIOUS MENDACITY" 125 
 
 "In the month of September 1879, the latter part of the 
 month, the E. T. Board met and accepted the resignation of Mr. 
 Shinn. At the meeting the board appointed Mr. Carnegie and 
 myself to confer with Mr. Shinn about the purchase of his in- 
 terest in the Company. After the board adjourned Messrs. 
 Carnegie, Shinn and myself remained, the others having retired. 
 Mr. Shinn then proposed to sell his whole interest for a certain 
 sum, the amount I have forgotten. Mr. Carnegie refused to 
 recognize that the stock in dispute had any value to him. Mr. 
 Carnegie offered Mr. Shinn on behalf of the E. T. Co. one hun- 
 dred and five thousand dollars for his interest standing in his 
 name on the books of the Company, which offer Mr. Shinn de- 
 clined. Some time during the interview Mr. Carnegie made the 
 remark that he would rather have given one hundred thousand 
 dollars than have Mr. Shinn leave. 
 
 The next day when the board were about ready to meet, 
 knowing Mr. Shinn was at the office of F. Wayne Co. I went 
 up to see Mr. Shinn and urged him to accept the offer of $105,- 
 ooo which had been made him the day previous by Mr. Carne- 
 gie. At my earnest solicitation Mr. Shinn finally gave his con- 
 sent to accept the offer. Mr. Shinn shortly after came down to 
 the Edgar Thomson office and asked Mr. Carnegie and myself 
 to come out into the hall. Mr. Shinn then stated to Mr. Car- 
 negie and myself, that he was willing to accept the offer of 
 $105,000 whenever they could agree on a satisfactory agreement 
 to refer the question of the stock in dispute to arbitrate. This 
 being reported to the board, they authorized the officers to close 
 the purchase. The board did not make the condition for the 
 agreement to arbitrate, that having been done by Mr. Shinn." 
 
 The agreement to arbitrate here referred to concerned the 
 right and title of Mr. Shinn to the stock which Andrew Carne- 
 gie had sold him out of that which he had bought from Messrs. 
 Coleman, Phipps, and T. M. Carnegie. It was a full share of 
 50,000. Mr. Carnegie denied Shinn's right to this stock and 
 the premium to which it had advanced, on the ground that part 
 of the consideration Shinn had agreed to pay for it was that he 
 would remain general manager of the works as long as Mr. Car- 
 negie wanted him. Shinn indignantly repudiated such an un- 
 derstanding, which he characterized as " slavery ; " and the mat- 
 ter was submitted by agreement to the arbitrament of Messrs.
 
 126 QUARRELS AND EJECTURES 
 
 B. F. Jones, John W. Chalfant, and William Thaw, prominent 
 business men of Pittsburg. 
 
 The documents in the case assumed voluminous proportions, 
 as the disputants brought charge and countercharge against each 
 other ; and some of them became almost virulent in character. 
 Andrew Carnegie injected into his statement of the case charges 
 against Shinn and his friends amounting to conspiracy to de- 
 fraud ; but unfortunately he entered into irrelevant details and 
 tripped up on his facts. The most singular of the lapses of 
 memory by which his case was injured was contained in the 
 following statement to the arbitrators : 
 
 " When in India I was rendered anxious by receiving a tele- 
 gram from him [Shinn] asking me to get an important letter at 
 Aden, and reply by telegraph. . You can imagine what thoughts 
 arose. The most probable emergency that suggested itself to 
 my mind was that some important financial question had arisen, 
 and that it was necessary parties should receive my personal 
 guarantee in some way, and at once. It was several weeks be- 
 fore I could obtain the expected letter, and judge my surprise, 
 nay rather indignation, when the document proved to be five 
 closely written pages in Mr. Shinn's own handwriting, setting 
 forth his personal disappointment and dissatisfaction at the 
 board of managers not having seen fit to promote him to the 
 chairmanship, in place of our late lamented friend Mr. McCand- 
 less, I was requested to telegraph a reply, instructing the board 
 to undo its action. Instead of this, I wrote an indignant answer, 
 but as there were many days before the mail left, I had time to 
 reflect, and finally destroyed the letter, and sent instead a short 
 note asking him to await my return." 
 
 Shinn's answer, for a few pages, was a clever piece of judi- 
 cial reasoning; but having been accused in no equivocal terms 
 of dishonorable and contemptible practices, he later allowed 
 himself the free use of his somewhat caustic pen, and marred 
 his otherwise able presentation of the case by charging his 
 opponent with " wilful and malicious mendacity. " 
 
 "In regard to his [A. C.'s] statements," he says, "it may 
 well be said as has been said of a much more prominent person,
 
 WILLIAM P. SHINN, 
 
 FIRST MANAGER OF THE EDGAR-THOMSON STEEL WORKS.
 
 Plate VI, 
 
 WILLIAM P. SHINN 
 
 FIRST MANAGER OF THE EDGAR THOMSON STEEL WORKS
 
 SHINN "6LV TRIAL' 127 
 
 'Where most people remember, his lordship fancies, and in his 
 case what is most convenient naturally offers itself. This has 
 very much increased his brilliancy, for the process leaves its 
 practicer utterly unhampered. But nobody should ask for both 
 strict accuracy and Lord B.'s quick free wit. It is demanding 
 an unreasonable combination.' So much on the 'go-as-you- 
 please ' style is Mr. Carnegie's historical account of our transac- 
 tions, that the above quotation is unavoidably suggested. . . . 
 
 Mr. Carnegie refers to a telegram which he received in 
 India, asking him to get an important letter at Aden, and reply 
 by telegraph, and tells you of his emotions when he re- 
 ceived it. 
 
 I sent no such telegram to Mr. Carnegie while he was in 
 India, nor indeed was any such telegram sent him at any time. 
 The letter he refers to was written to him Feb. 22nd, 1879, ad- 
 dressed to him at Aden, which was the address he gave for let- 
 ters to be sent at that date. The author of 'Around the World ' 
 says: 'Bombay, Monday, Feb. 24th, We sailed at six in the 
 evening by the splendid P. and O. steamer, Pckin,' that being 
 the date he left India. On March I2th we received a telegram 
 from him dated Cairo, Egypt, and on that date I telegraphed him 
 as follows : 
 
 Carnegie, Cairo. Bison, Cling, Black, Cloak, Angel, Feb. 
 22nd, Aden, Bacon, telegraph and mail. Shinn. 
 
 The first four words related to our profits in Jan. and Feb., 
 the balance is translated thus : Angel. Have you received our 
 letter of Feb. 22nd, Aden? Bacon. Where shall we address 
 you, telegraph and mail ? 
 
 Not one word, as you will see, about answering by tele- 
 graph, or about letter being important, and sent sixteen days 
 after he left India. 
 
 But you would expect a matter which caused him so much 
 anxiety as he alleges to be mentioned in his letters, and what 
 does he say? 
 
 In his letter dated Bombay, Feb. 22nd, he does not mention 
 it, for the good reason that he knew nothing of it. In his letter 
 dated Sorrento, March 23rd, the first received after he got the 
 telegram, he writes, 
 
 'I expected your Aden letter to-day, but next mail will 
 undoubtedly bring it, reaching me at Naples, Wednesday even- 
 ing on our arrival.' 
 
 In his next, dated Rome, March 29th, he says : 
 
 ' Yours from Aden not yet received although I ordered it 
 here. May come Tuesday, when I will telegraph.'
 
 128 QVARRELS. AND EJECTURES 
 
 You find no trace of anxiety or other deep emotion in these 
 letters. . . . 
 
 To complete the record I inclose my pressed copy of the 
 Aden letter which instead of 'five closely written pages,' con- 
 sists of two closely written and one-half page, not very close. 
 In it you will look in vain for any request to telegraph a reply. 
 In fact the whole of these emotions over the Aden letter seem 
 to be a case of 'reflex action ' excited by the claim in contro- 
 versy. 
 
 You will note in his reply to the Aden letter that he says : 
 ' Let the matter rest until my return and we will meet as friends 
 desirous of pleasing each other, and I am sure our happy 
 family will remain one.' This was his 'indignation ' referred 
 to. 
 
 He has told you how we 'met as friends ' in the first con- 
 versation we had on the subject, when he says : 'And upon my 
 return and before any question of this claim arose, I told him I 
 had twice already bought his life work,' etc. ; he also insulted 
 me still further by telling me, in reference to the increase of 
 salary voted me unanimously by the Board, 'You might as well 
 have put your hand in my pocket and taken out $750 ' (his half 
 of it). 
 
 On the same day he told another person who subsequently 
 informed me that he 'hoped most sincerely he (I) would resign 
 his (my) connection with the E. T. Steel Co., Limited, as he 
 was determined to get rid of him ' (me), and later on, in the same 
 conversation, he said I had better resign now, as he would make 
 it so warm for me that he would have my resignation before 
 Christmas. (Sworn evidence of this statement can be had if 
 desired by the arbitrators.) 
 
 Without further conversation with, or notice to me, at a 
 meeting of the Board of Managers held late in July, at which he 
 had no official standing or right (not being a member), he in- 
 sultingly demanded my resignation as Treasurer, under the false 
 pretence that I had myself suggested it in my Aden letter, 
 which pretence he repeats in his statement to you. . . . 
 
 He thus took from me, as by violence, the responsible and 
 honorable office of Treasurer, which I had held since the forma- 
 tion of the company and now comes before you asking 'equity,' 
 alleging that I left the company without his consent. 
 
 I myself saw a letter in his handwriting, in which he said, 
 referring to me byname: 'Thank God his name is off our 
 paper,' and 'Mr. Shinn is on trial,' etc. 
 
 Under these circumstances you will not wonder that I left
 
 CHARGES OF CONSPIRACY 129 
 
 Mr. Carnegie's company, and I do not therefore feel called upon 
 to reply to his history of my departure." 
 
 To all this Carnegie retorted in kind, becoming if possible 
 more offensive than before in his charges of conspiracy. 
 
 " In a very short time," he says, " the Edgar Thomson 
 Company would have been fleeced upon most of its supplies. 
 With the railway manager bribed and the purchaser of our 
 supplies interested, the combination seemed complete, and does 
 credit to the genius of our late general manager." 
 
 This ended for the time being the effort at a " peaceful " 
 settlement, for Shinn angrily revoked his agreement to arbitrate 
 and withdrew all the papers. On the same day he tendered 
 the purchase-money of the stock in dispute, and brought suit in 
 the Allegheny County Court. Carnegie then petitioned for 
 removal of the case to the United States Circuit Court, which 
 was granted; and Shinn in his turn secured an order of court 
 for the production of the Edgar Thomson books. For obvious 
 reasons this was a measure distasteful in the highest degree to 
 the Carnegies ; and when the case was called for trial on June 
 i6th, 1881, an adjournment was asked for an hour. The law- 
 yers then got together in an adjoining room and patched up 
 another agreement to arbitrate. The case was thereupon sub- 
 mitted to the same arbitrators as before on the old pleadings, 
 subject, however, to a re-statement of Shinn's claim on the 
 question of value, and leaving that question wholly to the arbi- 
 trators free from the restrictions of the original submission, 
 which limited the premium to fifty per cent. This was an im- 
 portant gain for Shinn, since it left to arbitration the question 
 of Shinn's right to participate in the enormous increase in value 
 which the stock had undergone during the previous two years. 
 
 The exact terms of the award were long kept secret ; but it is 
 betraying no confidence to state now that Shinn won on the 
 main issue and received his full claim with a substantial pre- 
 mium representing the increased value of his stock. It was just 
 under $200,000. But he lost his contention that he could re- 
 9
 
 1 30 QUARRELS AND EJECTURES 
 
 main a member of the corporation after he had accepted service 
 with a competing concern. 
 
 The pleadings and answers in the civil suit were withdrawn 
 from the court files, so that to-day there is nothing in the 
 official archives but the most meagre record of the case. 
 
 The next " ejecture " was that of John Scott, in 1882. Like 
 so many others before and since, it was the outgrowth of per- 
 sonal difficulties with Andrew Carnegie. Mr. Scott obtained, 
 however, a very high premium for the $50,000 which he had 
 originally invested in the company ; as did also Gardiner McCand- 
 less, who was induced to sell out the same year. Mr. McCand- 
 less received $183,000 for his original investment of something 
 like $42,000 in the convertible bonds. 
 
 Thus did events justify the amazing foresight displayed by 
 Andrew Carnegie when, only eight months after the opening of 
 the Edgar Thomson works, he outlined, in his letter of April 
 1 3th, 1876, the principal changes in the personnel of the organi- 
 zation which have just been described. It is an astonishing, 
 almost an uncanny, exhibition of that clairvoyant faculty for 
 which he has always been noted. In one aspect, too, it illus- 
 trates the practical working of the Carnegie motto : " Concen- 
 tration ! First honesty, then industry, then concentration." 
 
 A further change was hinted at in Carnegie's letters for 
 which the way was thus being gradually prepared. This was 
 the combination of the Union Iron Mills, the Lucy Furnaces, 
 and the Edgar Thomson Steel Works. 
 
 The causes which brought about this consolidation are not 
 very complex. On the one hand was the elder Carnegie's am- 
 bition to make the works, which were now to bear his name, as 
 impressive as possible. On the other hand, was the wish of his 
 brother and Mr. Phipps to have a larger share in such a good 
 thing as the Edgar Thomson Company. Forty odd per cent, in 
 dividends is very attractive; and no doubt both Mr. Phipps and 
 young Carnegie were by this time thoroughly sorry that they had 
 sacrificed any part of their shares in the Edgar Thomson Com-
 
 THE PIG-IRON DISPUTE 131 
 
 pany. Accordingly a scheme of consolidation was made, and the 
 manner in which it was carried out is told, with much interest- 
 ing detail, in the following letters : 
 
 PITTSBURGH, PA., Mch. 3ist. 1881. 
 Win. P. Shinn, Esq., Pittsburgh, Pa. 
 
 DEAR SIR: In 1879, tne subject was broached, I do not re- 
 member by whom, to consolidate the Lucy Furnace Co. and the 
 Union Iron Mills with The Edgar Thomson Steel Co. Limited. 
 
 We had so many disagreements and much trouble in fixing 
 the price of pig-iron furnished by the Lucy Furnace Co. that I 
 at once concluded that it was a good thing to do, and expressed 
 myself in favor of the scheme provided it could be carried out 
 on a fair basis. I was governed entirely to vote on your recom- 
 mendation that the proposition of 55 for the E. T. S. Co. Limd. 
 and 45 for the other property. 
 
 Now that I have become familiar with the subject, and our 
 experience of working the past year under the consolidation, I 
 do not think the property put in should have [been] taken at 
 over 30$. 
 
 Having had the utmost confidence in your judgment, in such 
 matters, I have a curiosity in learning what governed you in 
 giving the advice you did, and thought it due you to give you 
 an opportunity to explain how you made such a mistake. 
 
 Yours truly 
 
 JOHN SCOTT. 
 
 * 
 
 PITTSBURGH, April 4th. 1881 
 John Scott Esq. Pittsburgh, Pa. 
 
 DR. SIR: I have your letter of March 3ist, in which you 
 refer to the basis of consolidation of interests of the Edgar 
 Thomson Steel Co. Limited with the Lucy Furnace Co., Car- 
 negie Brothers & Co and Carnegie & Co. on the basis of 55 
 per cent to the former and 45 per cent to the latter, and ask 
 how I came to recommend what you characterize as " such a 
 mistake." 
 
 In reply, I will state the circumstances under which the pro- 
 posed consolidation was first discussed, and what led me to as- 
 sent to the basis named. 
 
 In August 1879 I was invited to Mr. T. M. Carnegie's one 
 evening, where I found Messrs. A. Carnegie, T. M. Carnegie 
 and H. Phipps. 
 
 The subject of the consolidation was broached, and they
 
 132 QUARRELS AND RJECTURES 
 
 produced statements of cost and earnings of their properties as 
 follows : 
 
 Cost to July ist. Earnings, 1878. Six mos. 1879. 
 
 Union Iron Mills $813,000.00 153,000.00 98,000.00 
 
 Lucy Furnaces 662,000.00 120,000.00 70,000.00 
 
 Coke Works, 4/5ths ioo.ooo.oo 20,000.00 16,000.00 
 
 Total 1,575,000.00 293,000.00 184,000.00 
 
 The cost of E. T. works, exclusive of the amount expended 
 on furnaces and the earnings for the same period had been as 
 follows : 
 
 Cost of E. T. works July i, '79 $1,522,159.16 
 
 Profits, 1878 $401,800 
 
 " 6 mo. 1879 252,845 
 
 654,645.00 
 
 The costs and earnings of the two properties compared then 
 as follows : 
 
 Cost. Earnings 18 mo. 
 
 E. T. S. Works $1,522,000 654,645 
 
 Carnegies' Works 1,575,000 477,000 
 
 But the E. T. S. Co. had furnaces A and B well under way, and 
 expected to complete them by Jan. ist, 1880; and I claimed 
 there should be added to the cost and earnings of E. T. S. Co. 
 an amount equal to four-fifths the cost and earnings of Lucy 
 Furnaces, or to cost say $528,000 
 and to earnings 200,000 
 
 This made them compare as follows : 
 
 Cost. Earnings 18 mo. 
 
 E. T. S. Works $2,050,000 $854,645 
 
 Carnegies' Works 1,575,000 477,000 
 
 the proportions of which were relatively 
 
 Cost. Earnings 18 mos. 
 
 E. T. S. Works of cost S^TTT f earnings 64 per cent. 
 
 Carnegies' Works " " 43i 5 ff 3 " 
 
 the average of which gave 
 
 E. T. S. Works 60 
 
 Carnegies' ... 40 
 
 and I therefore proposed to accept 60 per cent for E. T. S. 
 works. 
 
 T. M. Carnegie demurred to this, alleging that the E. T. S. 
 Works had been unusually profitable in past 18 months, while
 
 ANDREW CARNEGIE 
 
 IN 1884.
 
 Plate VII, 
 
 ANDREW CARNEGIE 
 
 IN 1884
 
 SHfNN'S SERIOUS CHARGE 133 
 
 the furnace property had been very unusually depressed, pig-iron 
 having sold at very low prices ; and he insisted on 50 per cent 
 for the Carnegie Works. 
 
 A. Carnegie then pointed out that the E. T. S. Works had a 
 debt of $186,000 on its land, which would have to be assumed 
 by the joint interest, which if deducted would allow only $1,864,- 
 ooo as cost of K. T. S. Works, or 54 per cent of the whole. 
 
 Upon these considerations, and for the reason named by you, 
 viz. to destroy the unceasing strife and bad feeling in the fixing 
 of prices for metal bought of Lucy Furnace Co. in which I had 
 been annoyed almost beyond endurance, I suggested 5 5 per cent 
 as a compromise which was agreed to. 
 
 It was not mentioned, nor was I aware, that the land on 
 which the Lucy Furnaces and Union Iron Mills were built was 
 not owned by them; and when Mr. Carnegie urged the mort- 
 gage on the E. T. S. property in reduction of its value, he knew 
 that a similar and much more important incumbrance was on the 
 Union Iron Mills property, which I now understand was only 
 leased, at a rental of $4,855 annually and liable to be greatly 
 increased when present leases expire. 
 
 This is equal to a mortgage of $ 80,900 
 
 Mortgage on Lucy Furnace property 160,000 
 
 Making a total incumbrance of $240,900 
 
 of which no mention was made at the time, of which I had not 
 the slightest knowledge or suspicion, and which good faith re- 
 quired should have been set forth. 
 
 Had I known of these incumbrances I never would have 
 agreed to consolidating on the basis of 55 and 45 per cent, nor 
 would I have agreed to it at all, except to harmonize our inter- 
 ests on the point which had caused so much difficulty and hard 
 feeling. 
 
 I see that in the new firm of C. B. & Co. Limd. they put in 
 the respective properties 
 
 E. T. S. property $2,500,000 62^ per ct. 
 
 Carnegies' " 1,500,000 37i " " 
 
 4,000,000 
 
 which is much nearer what the real proportionate value was a 
 year ago. Yours truly 
 
 WM. P. SHINN
 
 134 QUARRELS AND EJECTURES 
 
 The following interesting data appeared in a foot-note to 
 Mr. Shinn's letter: 
 
 1880 
 
 Profits E. T. S. Works $1,625,000.00 
 
 Lucy $294,524.97 
 
 Coke 96,295.97 
 
 Union Mills 55,836.71 
 
 446,657.65 
 
 2,071,657.65 
 Chgd. Impts. 
 
 Lucy Fur. Co 131,259.57 
 
 Union Mills 55,200.62 
 
 186,460.19 
 Leaves actual profits 260,197.46 
 
 The new firm referred to by Mr. Shinn was Carnegie Broth- 
 ers & Co., Limited, which was organized on April ist, 1881, 
 with a capital of $5,000,000. Of this, $4,000,000 was repre- 
 sented by the Union Iron Mills, the Lucy Furnaces, certain 
 unimportant coke interests of Andrew Carnegie, and the Edgar 
 Thomson works. The rest was to be paid in cash. In this 
 consolidation the interests were apportioned as follows : 
 
 Andrew Carnegie $2,737,977.95 
 
 Thos. M. Carnegie 878,096.58 
 
 Henry Phipps 878,096. 58 
 
 David A. Stewart 175,318.78 
 
 John Scott 175,318.78 
 
 Gardiner McCandless 105,191.00 
 
 John \V. Vandervort 50,000.00 
 
 The last named was Carnegie's companion on his trip around 
 the world. He soon fell sick and withdrew from active business 
 to California, where he died in 1 897. 
 
 The earning powers of the several properties are given in the 
 foot-note to Mr. Shinn's letter quoted above. Their estimated 
 values are given -in the articles of incorporation as follows : 
 
 Mortgage. 
 
 Edgar Thomson works $2,385,000 594,000 
 
 Coal mines and Coke ovens at Unity 80,000 
 
 Ore lands at Patton 35,ooo 
 
 Lucy Furnaces 750,000 160,000 
 
 Union Iron Mills , 630,000 
 
 Four-fifths interest in Larimer Coke works 120,000 
 
 $4,000,000
 
 INCOHERENT PLANS 135 
 
 The advantages of industrial consolidation had not, at this 
 date, received any general recognition ; and, as we have seen, it 
 was other considerations than increased efficiency and economy 
 that prompted the first imperfect combination of the Carnegie 
 properties. 
 
 As illustrating how vague and incoherent were the plans of 
 the group of men controlling the property at this time, it may 
 be mentioned that two months after the consolidation described, 
 the Lucy Furnaces were taken out of it and turned over to Wil- 
 son, Walker & Co. During these eight weeks, however, their 
 value was supposed to have increased from $750,00010 $1,000,- 
 ooo ; and Messrs. John T. Wilson, James R. Wilson, and John 
 Walker each subscribed for $142,857 of stock in the Lucy 
 Furnace Company, Limited, with its million-dollar capital. An- 
 drew Carnegie's share in it amounted to $420,627; the rest of 
 the group holding interests from $58,539 in the cases of Thomas 
 M. Carnegie and Henry Phipps, to $3,333 in the case of John 
 Vandevort.
 
 Blowing engines for blast-furnace. 
 
 CHAPTER IX 
 A GLANCE AT PROCESSES 
 
 AT this point a brief description 
 of the processes of iron and steel 
 making is necessary in order that 
 readers unfamiliar with 
 these arts may intel- 
 ligently follow the 
 course of this narra- 
 tive. While it is not 
 possible that such a 
 rough outline can con- 
 vey more than a hint of the wonderful transformations in- 
 volved in modern methods of iron and steel manufacture, it may 
 nevertheless help the reader to appreciate the nature of the 
 great industrial evolution we are tracing. 
 
 There is not a State in the American Union in which iron- 
 stone is not found. Indeed, one may say there is no consider- 
 able area of the earth's surface where it does not exist. The 
 ancients undoubtedly knew how to mine and smelt it; but, un- 
 like other metals found in the tombs and habitations of vanished 
 races, iron, unless protected from air and moisture, rapidly 
 perishes through oxidation. In other words it rusts away. 
 The oldest known piece of wrought-iron of any great size is 
 found in the pillar of a temple at Delhi, India. It is sixteen 
 inches in diameter and weighs about seventeen tons. No one 
 knows when or how it was made. 
 
 Many tribes of savages existing in our own time have been 
 found in possession of primitive means of smelting. Speke and 
 
 Livingstone describe the miniature blast-furnaces of the natives 
 
 136
 
 EARLY FURNACE PRACTICE 137 
 
 of Centra] Africa; and it is not improbable that these simple 
 operations were learned from the Egyptians, whose routes of 
 trade are now known to have penetrated into what had become 
 in our own time " Darkest Africa." 
 
 It is not, however, with ancient practices that we are now 
 concerned. It is rather with those mammoth operations which 
 have given a special character to modern civilization and made 
 it different from anything that has preceded it. 
 
 The first operation is to mine the ore. This needs no de- 
 scription for the present. The separation of the metal from the 
 earthy substances usually associated with it is effected in the 
 blast-furnace, where it is converted into pig-iron, the crudest 
 form of manufactured iron. 
 
 A modern blast-furnace is a giant structure shaped some- 
 what like the chimney of a kerosene-oil lamp. The point of 
 greatest diameter where the lamp chimney swells out to make 
 room for the flame is called the bosh, frequently mentioned in 
 this work. This furnace is filled with a mixture of iron ore, 
 fuel, and lime; and a blast of air is forced through it from be- 
 low. This draft at first was cold air ; but an ingenious English- 
 man discovered, sixty or seventy years ago, that the ore was re- 
 duced more quickly, and with a smaller consumption of fuel, if 
 the blast was heated before being forced into the furnace. To 
 the bewilderment of the scientists of that day this simple change 
 resulted in doubling the iron product of a given quantity of fuel. 
 Before that happy discovery the output of a blast-furnace had 
 ranged from fifteen and a half tons a week, in 1788, to thirty- 
 five tons in 1827 ; and at the former date the yearly product of 
 the whole of England did not amount to as much as was recently 
 produced in four months by a single American furnace. In 
 these forty years the total annual iron production of England 
 rose from 70,000 to 700,000 tons. In the forty years following 
 the introduction of the hot blast the furnace product rose from 
 thirty- five tons weekly to four hundred tons. This shows a 
 wonderful development of the art of iron production ; but the lat-
 
 138 
 
 A GLANCE AT PROCESSES 
 
 ter figure was multiplied seven times by the Lucy furnace in the 
 succeeding twelve years, and almost fifteen times by one of the 
 furnaces built since at Duquesne. 
 
 In the early blast-furnaces the gases freed in the process of 
 reduction were allowed to escape in flames at the top of the 
 stack, illuminating the country for miles around ; but towards the 
 middle of the nineteenth century means were devised for utiliz- 
 ing this vast volume of flame for the purpose of raising steam 
 and heating the blast. For the latter purpose it was led from 
 the throat of the furnace into ovens containing iron pipes through 
 which the blast was blown. These iron pipes limited the tem- 
 perature of the blast 
 to that of their own 
 melting-point. Pres- 
 ently the pipes were 
 displaced by enor- 
 mous stoves contain- 
 ing fire-brick, against 
 which the flames are 
 now directed. After 
 the fire - brick has 
 been brought to a 
 great heat, the gas is 
 turned into a second 
 stove, to perform the same service there; while the air-blast 
 is admitted to the first stove, where it is raised to a very 
 high temperature 1200 to 1600 Fahrenheit. So in alterna- 
 tion the stoves are thus heated, and the blast passed through 
 them one after the other, on the regenerative principle invented 
 by Dr. Siemens. To the higher degree of temperature thus 
 secured is due a large part of the increased output of the Lucy 
 and Isabella furnaces during their long contest. In the first 
 photograph of the former made in 1873 the stack seems to stand 
 alone, because the hot-blast stoves were small at this date. In 
 the second illustration the stack can hardly be seen for the stoves, 
 
 Lucy furnaces, showing hot-blast stoves.
 
 A CHILLED STACK 139 
 
 which, indeed, to the untrained onlooker, seem the most impor- 
 tant part of the plant. 
 
 At the time the Lucy furnace was built the lines of blast- 
 furnaces were not the graceful curves of the lamp chimney that 
 
 Drawing the finished coke. The method of charging the raw coal is also seen. It is 
 dropped from the donkey-car through an opening in the top of the oven. 
 
 has been used to illustrate them. They were almost straight 
 lines ; and the bosh formed an angle. A few months after the 
 Lucy had been started, the mass inside got chilled, so that the 
 metal stopped running down. The furnace was therefore emp-
 
 140 
 
 A GLANCE AT PROCESSES 
 
 tied ; and to the surprise of everybody connected with it, the 
 wooden lining that had been built to protect the inside from 
 the first loads of ore, etc., which were poured into it, was found 
 in some places almost intact. Of course it ought to have been 
 
 burnt up; but in- 
 stead of that large 
 parts remained and 
 were hardly charred. 
 This set some men 
 thinking; and the 
 outcome of their 
 cogitations was the 
 idea that the shape 
 of the furnace was 
 all wrong. It was 
 evident that in this 
 
 Casting-pit of blast-furnace, where the metal is made f llrriQ ~~ t u~ 7rm ^ nf 
 into "pigs." 
 
 fusion did not ex- 
 tend beyond the narrow range of the central funnel, and that, 
 consequently, the benefit of its large interior capacity was 
 mainly lost. Builders therefore gradually changed the shape 
 of furnaces, cutting out all angles, lengthening the curves, 
 and increasing the size of the hearth. In 1872 the Lucy 
 furnace was 75 feet high, 20 feet in diameter at the bosh, 
 and 9 feet wide at the hearth. The product was fifty to sixty 
 tons a day. In 1902 the same furnace was 90 feet high with 
 the same diameter of bosh as formerly, and i2 l / feet wide at 
 the hearth. The product has been as high as 500 tons a day 
 and 12,000 tons a month; and for every man employed the 
 average product of pig-iron is now two tons a day, as against 
 one ton thirty years ago. 
 
 The fuel first used in blast-furnaces was charcoal ; but the 
 threatened depletion of the forests of Britain caused the substi- 
 tution of pit-coal. As early as 1773 charred coal or coke was 
 tried in England ; but its use did not become general until well
 
 PROCESS or COKL\<; 141 
 
 into the last century. In America charcoal was largely used 
 long after it was found that anthracite, which is a natural coke, 
 was suitable for smelting. As related elsewhere in this work 
 the use of coke or "cake " coal did not become general until 
 the early seventies. It was the proximity of the Connellsville 
 beds of bituminous coal which is singularly free from sulphur 
 and other impurities that gave Pittsburg its leadership in the 
 iron industry of America. 
 
 The purpose of changing this coal into coke is to rid it of 
 the sulphur and phosphorus which is found in greater or less 
 quantities in all soft coals. There is a saying among iron-workers 
 that these elements are to iron what the devil is to religion. As 
 a matter of fact they are worse; for there are some good work- 
 able religions that could not get along without the devil, but 
 there is no good workable iron with sulphur and phosphorus in 
 it. The process of coking consists of baking the coal in hot 
 ovens, so that, to continue the theological simile, the diabolic 
 parts are driven off as flaming gas from the top of the oven. 
 These flaming ovens give a wild and picturesque aspect to the 
 coking country as one passes through it by night. Presently 
 the coal fuses into a cake, which is cooked for forty to sixty 
 hours, until hardly anything but carbon remains. This cake 
 is then drenched with water, and pulled out of the oven by a 
 door which up to this time has been sealed. The sudden cool- 
 ing of the mass splinters it into the form so familiar to all who 
 travel on the railroads. In the best furnace practice seventeen 
 or eighteen hundred pounds of coke are now used to smelt one 
 ton of pig-iron. In the Lucy furnace the amount first used 
 was about double that amount. 
 
 The lime which accompanies the ore and coke into the blast- 
 furnace produces certain chemical changes which are too com- 
 plicated for description here. It also serves as a flux to carry 
 away the earthy matters with which the iron is associated in its 
 mineral form. These residues constitute the slag, or scum of 
 the liquid iron.
 
 142 
 
 A GLANCE AT PROCESSES 
 
 The furnace is tapped about every four hours; and the 
 molten iron runs, a limpid, glowing stream, into channels and 
 moulds that have been prepared for it, where it cools and hard- 
 ens into shapes which have suggested the name " pig." Hence 
 pig-iron. The channel leading to the pigs is called the "sow," 
 and as they are seen lying together the simile is obvious. 
 In modern practice the iron is usually poured into enormous 
 
 ladles, which are 
 drawn by locomo- 
 tives to the convert- 
 ers, where it is made 
 into Bessemer steel. 
 Before following 
 a train of these la- 
 dles to the convert- 
 ing house, it is worth 
 while to see what be- 
 comes of the pigs of 
 
 Train of ladles. irOn aS SOOn aS the 7 
 
 are cold enough to 
 
 be taken out of their moulds. In former days they were usually 
 converted into wrought-iron in such places as the Union mills. 
 Placed in a puddling-furnace an oven with a concave floor 
 with a certain amount of ore for " fettling," they were reduced 
 to liquid form and boiled and stirred about until most of the 
 impurities were driven off. When the bubbling mass thickened 
 and assumed a pasty consistency, the puddler passed a long bar 
 through a small opening in the furnace door, and rolled the paste 
 into a ball. This ball was then withdrawn and carried, dripping 
 with liquid fire, to a queer arrangement of big wheels which 
 crushed and rolled the ball over and over, squeezing out all sorts 
 of useless stuff and further solidifying the mass. This machine 
 has been mentioned in another chapter as the squeezer. The 
 ball was then re-heated, and passed under hammers and through 
 rollers; and the kneading it thus repeatedly underwent gave it
 
 THE JONES MIXER 143 
 
 the fibrous quality of wrought-iron. When it had been finished 
 into bars it was ready for the market. This was the material of 
 which Kloman made his famous axles. 
 
 The Bessemer process of steel-making has displaced the art 
 of puddling, except for a few special purposes. Steel rusts more 
 readily than iron; and for this reason chains for cables are still 
 made of puddled-iron. 
 
 Cast-iron is pig-iron mixed with ore and scrap, melted in a 
 cupola and then cast into moulds of the shapes required. When 
 cold it is drilled, planed, and finished into the heavy parts of 
 machinery where great resistance is called for. \Vhen fractured, 
 cast-iron is seen to have a granulated form, like dirty sugar ; 
 whereas wrought-iron has a fibrous quality that makes it ductile 
 and tough. 
 
 And now it is necessary to return to the train of ladles be- 
 fore the contents cool. Covered with coke dust to retain the 
 heat, the liquid pig metal can be transported a dozen miles to a 
 converter; and this is sometimes done. At every curve and 
 bump of the locomotive, some of the metal slops over the edge 
 of the ladle, and breaks into a galaxy of shooting stars. Pres- 
 ently the train arrives alongside the Jones mixer, a huge iron 
 chest lined with refractory bricks, and capable of holding fifty 
 to two hundred and fifty tons of liquid pig metal. It is hung 
 on trunnions, so that it may be swung to and fro like a cradle; 
 for here the contents of many ladles are mixed to equalize the 
 variations of both chemical composition and temperature of the 
 furnace product. Before the invention of the mixer, the pig- 
 iron had to be re-melted in a cupola before it could be converted 
 into steel. One by one the ladles are emptied into the mixer, 
 the liquid flowing 'clean and creamy, with fairy lights dancing 
 over its surface. Whenever a few drops spill to the ground 
 they rebound in thousands of tiny points of fire, exploding with 
 the noise of a miniature fusillade. A boy of thirteen or four- 
 teen, his imp-like face black with soot, stands near the flaming 
 funne.1 of the mixer, shouting shrill directions to his fellow
 
 144 A GLANCE AT PROCESSES 
 
 demon, who, somewhere concealed among the dark shadows of 
 the wheels and chains aloft, reverses the five-ton ladles with the 
 ease of a society woman emptying her cup of tea. At night the 
 scene is indescribably wild and beautiful. The flashing fire- 
 works, the terrific gusts of heat, the gaping, glowing mouth of 
 the giant chest, the quivering light from the liquid iron, the 
 roar of a near-by converter, the weird figure of the child and the 
 pipings of his shrill voice, the smoke and fumes and confusion, 
 combine to produce an effect on the mind that no words can 
 translate. Dante in his most hellish conception never ap- 
 proached such a reality. The most eloquent preacher that ever 
 described the condition of the damned was as a babbling brook 
 in a soft summer landscape compared with this. And who shall 
 tell of what goes on in the giant chest where two hundred and 
 fifty tons of liquid iron have just been poured, to be rocked to 
 and fro, a seething, swirling, bubbling mass ? 
 
 In one aspect this is the cradle of civilization. Here, in 
 the Jones mixer, goes on the first of the processes by which is 
 made the steel of locomotives, rails, and ships that link race to 
 race throughout the world ; of the engines of mines and facto- 
 ries; of the machines of thousands of mills; of the reapers and 
 harvesters of farms; of the beams and angles and bars of which 
 modern cities are largely built. Here rocking in this huge box 
 are the springs of chronometers that keep pace with the prog- 
 ress of the stars; the needles that point the mariner's way; 
 the tubes through which the astronomer watches the birth of 
 worlds; the disks that talk through a thousand miles of space; 
 and most of the other miracles that make the sum of modern 
 civilization. To the intelligent onlooker there is as much poetry 
 in Jones' box as there was in Pandora's ; and even this does not 
 contain all the wonders of the beautiful transformations which 
 have given Pittsburg a yellow crown of light. 
 
 From the mixer the molten iron, now uniform in composi- 
 tion, is transferred to the converter. Samples have been quickly 
 cooled and analyzed, so as to afford a guide to future operations,
 
 BRILLIANT PYROTECHNICS 145 
 
 that the final product may have just the qualities of resistance 
 or ductility required of it. With the same spluttering and scin- 
 tillations as before, the liquid is poured through the lower open- 
 ing of the mixer into fresh ladles, which in turn are emptied 
 into an egg-shaped vessel. This is the Bessemer converter, the 
 most beautiful and perfect piece of mechanism ever devised by 
 the human mind. Itself of enormous proportions and weight, 
 it is so delicately poised that when filled with ten or fifteen tons 
 of liquid iron, it can be moved at the touch of a finger. The 
 metal is poured into the vessel while suspended in a horizontal 
 position. A blast of cold air is then forced through a number 
 of holes in its lower end, and simultaneously the great oval 
 mass becomes erect. Sir Henry Bessemer has himself elo- 
 quently depicted the beauty of the transformation which now 
 takes place : 
 
 "The powerful jets of air spring upward through the fluid 
 mass of metal. The air expanding in volume divides itself into 
 globules, or bursts violently upward, carrying with it some hun- 
 dredweight of fluid metal which again falls into the boiling mass 
 below. Every part of the apparatus trembles under the violent 
 agitation thus produced ; a roaring flame rushes from the mouth 
 of the vessel, and as the process advances it changes its violet 
 color to orange, and finally to a voluminous pure white flame. 
 The sparks, which at first were large like those of ordinary 
 foundry iron, change into small hissing points, and these gradu- 
 ally give way to soft floating specks of bluish light, as the state 
 of malleable iron is approached. During the process the heat 
 has rapidly risen from the comparatively low temperature of 
 melted pig-iron to one vastly greater than the highest known 
 welding heats ; the iron becomes perfectly fluid, and even rises 
 so much above the melting-point as to admit of its being poured 
 from the converter into a founder's ladle, and from thence to be 
 transferred to several successive moulds." 
 
 The chemical changes accompanying this gorgeous display 
 are equally beautiful. The liquid pig metal contains a percent- 
 age of manganese, silicon, and carbon. If we could conceive 
 of these elements as endowed with human emotion, we might
 
 146 
 
 A GLANCE AT PROCESSES 
 
 Filling ingot-moulds with molten steel. 
 
 say that every particle is in love with some atom of oxygen. 
 The converting-vessel is the meeting place of the lovers and the 
 scene of their marriage. With noisy celebration the union of 
 the little globules of air and the tiny atoms takes place, and 
 
 emerging from the 
 lip of the converter 
 in sparkling radi- 
 ance the happy pairs 
 soar away to spend 
 their short lives to- 
 gether. Scientists 
 stolidly call this 
 marriage " chemical 
 affinity. " Goethe 
 named the similar 
 union of human 
 souls " elective affin- 
 ity, " The comparison suggested is not so fanciful as it seems. 
 Every atom of every element in the twelve-ton charge now roar- 
 ing and flaming before us will eventually find and unite with 
 the atom of oxygen for which it has an affinity chemical or 
 elective it matters not. It maybe this moment or the next, in 
 the violent ebullition of the Bessemer converter; it may be 
 thousands of years hence in the beam of a sky-scraper; but 
 sooner or later, every atom of iron as well as every atom of 
 silicon and carbon will find its mate in the oxygen of the air, 
 and so separate itself from its fellows. This is a predestination 
 of matter not found in theologies. 
 
 When the flame at the lip of the converter becomes white it 
 is a sign that the manganese, silicon, and carbon have united 
 with the oxygen blown through the mass and escaped into the 
 air. Now the iron itself is following the same course, and that 
 means waste. So the youth, who has been watching the con- 
 flagration through colored goggles from a distant platform, 
 touches a lever; and the huge vessel slowly bends forward so
 
 BESSEMER CONVERTER IN OPERATION.
 
 Plate VIII. 
 
 Courtesy of 8. S. McChire Co. Copyright by the R. S. McClure Co. 
 
 BESSEMER CONVERTER IN OPERATION
 
 THE BESSEMER PROCESS 
 
 147 
 
 as to let the metal flow into the body of the converter, and un- 
 cover the air-holes beneath. With a mighty rush the blast now 
 sweeps along the surface of the metal, detaching a million minor 
 particles of glowing matter and -sending a shower of sparks 
 across the converting-pit. It is the brilliant finale of the gor- 
 geous display. To replace a part of the lost carbon, a few 
 shovelfuls of spiegeleisen or ferro-manganese are thrown into 
 the mass, which 'is then poured into moulds, to solidify into 
 ingots of steel. When taken out of the moulds the steel is 
 passed under heavy rollers to give it the shapes needed for its 
 intended use as rails, beams, or plates, as well as to knead it into 
 that fibrous texture which we saw resulted from similar action 
 in the making of wrought- iron. The first rolling thus makes 
 blooms; and these cut into lengths make billets, which again 
 are shaped into a hundred and one things as needed. Such in 
 brief, and in rough outline, is the process of Bessemer steel 
 manufacture. 
 
 Henry Bessemer, who was knighted in recognition of his 
 beautiful invention, 
 took out his first 
 patent in 1856. Ten 
 years later the 
 world's output of 
 Bessemer steel 
 amounted to about 
 100,000 tons. By 
 1870 it reached 
 300,000 tons. In 
 the first year of the 
 present century it 
 had attained a total 
 of 19,000,000 tons, of which nearly 9,000,000 tons were pro- 
 duced in the United States. 
 
 Since 1886, however, a newer method of steel-making has 
 grown with even greater rapidity. This is known as the open- 
 
 steel in 
 
 iter the rolls.
 
 148 
 
 A GLANCE AT PROCESSES 
 
 hearth basic process. It is probable that this will soon displace 
 the beautiful and simple invention of Sir Henry Bessemer, just 
 as the latter displaced puddling. 
 
 Huge ingot being forged for armor-plate under the i2,ooo-ton hydraulic press at 
 
 Homestead. 
 
 The advantage which the basic open-hearth possesses over 
 the Bessemer converter is that it enables the steel-maker to use 
 ores high in phosphorus. It also permits the easy working- 
 over of scrap, spoiled ends of billets and rails, and old stuff of
 
 THE BASIC OPEN-HEARTH 149 
 
 all kinds. At Homestead are two large basic furnaces from 
 which the entire top can be removed ; and parts of old machines 
 weighing many tons are lifted bodily into them for re-conver- 
 sion. Moreover, the capacity of the largest Bessemer converter 
 is about fifteen tons. In the basic furnace fifty tons are often 
 made at once ; and the product of several hearths can be drawn 
 at the same moment to make an ingot of a hundred and fifty 
 tons if desired. This has been done at Homestead. 
 
 The basic open-hearth is simply a huge and improved pud- 
 dling-furnace. A bath of pig metal is used in which to dissolve 
 scrap of all kinds with a mixture of ore. The charge and lin- 
 ing of the furnace are alkaline, so as to convert the acids of 
 phosphorus into a neutral base, which, with other so-called 
 impurities, floats on the metal as slag as it is drawn off. The 
 process has none of the picturesque aspects of the Bessemer con- 
 verter. The most interesting thing about it to a layman is to 
 see, through colored glasses, how the steel boils and bubbles 
 as if it were so much milk. The bigness of it its fifty-ton 
 ladles swinging in space, its hundred-ton ingots under a twelve- 
 thousand-ton press as seen at Homestead makes it impressive ; 
 but the gentle boiling of steel for hours without any fireworks 
 or poetry, in a huge shed as empty of workmen as a church on 
 week-days, is not a very interesting sight. Indeed, it would 
 seem as if all that is spectacular will have been lost in the 
 manufacture of steel with the passing of the Jones mixer and 
 the Bessemer converter. To the chemist, however, the basic 
 process is full of interest ; but this short description is not 
 designed for him. In 1886 the product of this process was 
 218,973 tons in America and in England, 694,150 tons. In 
 1902 it approximated five and a half million tons in America, 
 and in England three and a half million tons. The present 
 rate of increase in the United States is over a hundred thou- 
 sand tons a month.
 
 CHAPTER X 
 
 THE RISE AND GROWTH OF HOMESTEAD 
 
 AMITY HOMESTEAD was 
 the name given by John Mc- 
 Clure four generations ago to 
 a quaint country seat which 
 he built in the bend of the 
 Monongahela a mile or so be- 
 low Braddock's crossing, and 
 ten miles from Pittsburg. He 
 is said to have been a fox-hunting Presbyterian, with all the 
 rigorous rectitude, blunt virtues, and frank hospitality which 
 this implies. Thus planting the traditions of the old home in 
 a new environment, he passed the picturesque place on to his 
 son John, and through him to his grandson Aldiel. In 1872 the 
 latter sold one hundred and thirteen acres to a banking and in- 
 surance company ; and a town was forthwith laid out and called 
 Homestead. The first sale of lots was made to all the old-time 
 accompaniments of a brass band and free junketing; and the 
 Pittsburg, Virginia and Charleston Railroad building across the 
 empty lots the following year, the town took a good start and 
 bade fair soon to grow as big as the older places in the region. 
 But the panic of 1873 came and gave it a set-back from which 
 it was long in recovering. In 1879 there were less than six 
 hundred inhabitants in the place. 
 
 On October 2 1 st of that year, however, an event occurred of 
 first importance in the history of Homestead. This was the in- 
 corporation of the Pittsburg Bessemer Steel Company, Limited, 
 with a capital of $250,000. The founders of this company were 
 all connected with the firms which had been supplied with 
 
 150
 
 KLOMAN STARTS RIVAL WORKS 151 
 
 merchant steel for a time by the Edgar Thomson Company and, 
 as already related, had been suddenly cut off from supplies 
 through the refusal of that firm to fill orders for billets. Their 
 subscriptions were as follows : 
 
 Wm. G. Park, of Park Bros. & Co 5 shares, $50,000 
 
 Curtis G. & C. Curtis Hussey, of Hussey, Wells & Co. 5 50,000 
 
 Wm. H. Singer, of Singer, Nimick & Co 5 50,000 
 
 Reuben Miller, of the Crescent Steel Works 4 40,000 
 
 Wm. Clark, of the Solar Iron and Steel Works 4 40,000 
 
 'Andrew Kloman, of the Superior Mill, Allegheny. ... 2 20,000 
 
 The Singer concern made a specialty of tool cast-steel, pa- 
 tent rolled saw-plates, spring and plow steel, axles, tires, etc. 
 The Hussey firm made refined cast-steel for edge tools, homo- 
 geneous plates for locomotives, boilers, and fire-boxes, and cast- 
 steel forgings for crank-pins, car-axles, etc. Park Brothers 
 were the owners of the Black Diamond Steel Works, and were 
 in a somewhat similar line; while Kloman had leased the Supe- 
 rior Mill in Allegheny and had recommenced the manufacture 
 of eye-bars and structural material. He was also rolling light 
 rails. 
 
 Kloman's lease ran out in 1879; an d ne decided to build a 
 mill of his own. He bought a small tract of land adjoining the 
 City Farm at Homestead, and commenced the erection of a 
 building 684 feet long by 85 wide ; to contain a twenty-one inch 
 rail-mill, two Universal mills, a sixteen- inch bar-train, and a 
 muck-train. At the same time the Pittsburg Bessemer Steel 
 Company bought some forty or fifty acres of land adjoining 
 Kloman's, and commenced the erection of a converting works 
 and blooming-mill. The two concerns were designed to work 
 together, Kloman taking the surplus product of the Bessemer 
 Steel Company and working it up into structural shapes. One 
 Universal mill and four steam-hammers were to be constantly 
 run on the Kloman patent solid eye-bars; and he gauged the 
 capacity of his plant at 50,000 tons of steel rails and 30,000 
 tons of structural material annually. 
 
 While building his own mill Kloman supervised the erec-
 
 1 52 GROWTH OF HOMESTEAD 
 
 tion of the adjoining converting works; and his skill and expe- 
 rience, joined to those of Macintosh & Hemphill, who had the 
 contract for the engines, and later became stockholders in the 
 enterprise, proved of inestimable value to his associates. 
 
 The result was unsurpassed not only in the completeness and 
 efficiency of the works, but in the rapidity of their construction. 
 While the Edgar Thomson plant was over three years in build- 
 ing a delay not entirely due to the panic the Homestead 
 works were put in operation fifteen months after the land was 
 bought. The first steel was made on March iQth, 1881, and 
 the first rail on August Qth of the same year. 
 
 Before the mill was quite completed, however, Kloman died. 
 After a life of patient and fruitful endeavor, of numberless vic- 
 tories in the realm of invention, of successes ever ripening into 
 fortune but always falling at the feet of others, the pathos of 
 his career reached its culmination when hope was brightest. 
 From the very conception of the great industry whose growth 
 we are tracing, until the moment of his death, Andrew Klo- 
 man's influence persisted without a break. He founded the 
 business ; built the Twenty-ninth Street mill; rebuilt and made 
 successful the Thirty-third Street mill. He was prominent in 
 the Lucy Furnace enterprise ; and he worked hard for the Edgar 
 Thomson works. Finally the great Homestead plant was of 
 his founding; and even to-day some of the machines he built 
 there are running in testimony to his thoroughness. * 
 
 The Pittsburg Bessemer Company at once purchased Klo- 
 man's unfinished mill, and carried out the contracts for rails 
 that he had made. By September, 1881, they were turning out 
 200 tons of rails a day and had orders booked for 15,000 tons 
 at profitable prices. The Carnegies looked on with surprise 
 
 " In broad charity, in great patience, in uncomplaining endurance of 
 wrongs, in conscientious veracity and uprightness of integrity, in calmness and 
 serenity of manner, we recognize the higher type of Christian manhood." From 
 the resolutions of the Board of Directors of the Pittsburg Bessemer Steel Com- 
 pany, on the death of Andrew Kloman.
 
 ARBITRARY MANAGEMENT 153 
 
 and alarm. Up to this time they had been the only makers 
 of rails in the Pittsburg district. Here was competition at 
 their very door. Councils of war were held once more on Brad- 
 dock's Field ; for it looked as if the prosperity which had hung 
 so lovingly over the Edgar Thomson works had now crossed the 
 river and alighted upon the rival enterprise at Homestead. 
 
 Had the wisdom which governed the designing and construc- 
 tion of the works been maintained in their management, it is 
 likely that their initial prosperity would have continued until 
 they had surpassed their great rivals'at Braddock. That the pos- 
 sibilities of a phenomenal success were there was brilliantly 
 
 Shares Stock of The Pittsburgh Bessemer Steel Co.. Limited 
 
 An assessment notice. 
 
 demonstrated a few years later under other leaders. But, un- 
 fortunately, there was no Captain Jones to weld into unity the 
 conflicting racial elements with which the new works were filled. 
 The rail-mill was controlled by the Welsh ; and if a desirable 
 post became vacant, it was not filled by the next man, but by 
 some newly imported friend of the Welsh foreman. The Irish 
 were supreme in the converting works ; and in the blooming- 
 mill yet a third nationality was in power. Over all was an un- 
 reasonable and arbitrary management ever tending to open con- 
 flict with the workmen. In a few months this conflict came, 
 and set up dissensions which ultimately destroyed the corpora- 
 tion. 
 
 William Clark, who was put in charge of the works, was a 
 bitter opponent of labor-unions ; and before going to Homestead 
 he had incurred the dislike of the men for his prowess as a 
 " strike-breaker," of which he was rather proud. It was not 
 long before the trouble he was ever looking for came. One day
 
 154 GROWTH OF HOMESTEAD 
 
 after the furnaces had all been charged with ingots, the men 
 came to him in a body and made some demand which he had 
 previously refused. As a stoppage would have involved the 
 firm in a great loss, the workmen's requirements were met, but 
 with mental reservations on the part of Clark. At the end of 
 the year he issued an order requiring employees to sign an 
 agreement renouncing their right to join labor-unions, and re- 
 quiring union men to leave their organizations at once. The 
 alternative presented was dismissal from the company's service. 
 Most of the men were members of the Amalgamated Associa- 
 tion of Iron and Steel Workers ; and on the I st of January, 
 1882, these refused to sign the agreement, and were locked out. 
 After the works had been idle a week, the company gave notice 
 that the men could not return to work, even if they signed the 
 agreement, unless they would accept a reduction of wages. This 
 intensified the bitterness of the workmen ; and the Amalgamated 
 Association took cognizance of the dispute. 
 
 At this time the Amalgamated Association was the most 
 powerful labor organization in existence, having a membership 
 of 70,000, and controlling every department of the iron and steel 
 industry. Except in a few small works, there was not a wheel 
 turning nor a fire burning from Maine to Texas that was not 
 cared for by an Association man. From the newly established 
 furnaces in Colorado to the oldest rolling-mill in the Keystone 
 State the authority of the Amalgamated Association was almost 
 supreme; and, generally speaking, its power at this date was 
 beneficently and properly exercised. Its origin may be briefly 
 outlined. 
 
 In 1858 some men in the Pittsburg iron-mills attempted 
 the formation of a society for the protection of working men 
 against unreasonable exactions of employers, and for the discus- 
 sion and reform of long-standing grievances. Inasmuch as the 
 new movement was regarded by employers with suspicion, the 
 workmen were obliged to conduct their deliberations with se- 
 crecy; and thus disadvantaged the movement failed. A couple
 
 FIRST HOMESTEAD STRIKE 155 
 
 of years later the effort was renewed, and the United Sons of 
 Vulcan was established by the puddlers, heaters, rollers, and 
 roughers. The new organization won recognition from employ- 
 ers; and in February, 1865, it justified itself by securing the 
 first sliding scale of wages. Following the example of the 
 Sons of Vulcan came other labor organizations, until every de- 
 partment of iron and steel working was included in the move- 
 ment. After the long strike of 1874 the obvious advantages of 
 consolidating these different bodies led to the formation, in 
 August, 1 876, of the Amalgamated Association of Iron and Steel 
 Workers of the United States, with Mr. Joseph Bishop as presi- 
 dent. In January, 1880, Mr. John Jarrett took Mr. Bishop's 
 place ; and the contest at Homestead now came under his direc- 
 tion. 
 
 Mr. Jarrett at once sought an interview with the managers 
 of the company; and while his right to meddle in the dispute 
 was not questioned, he was put off from day to day with vari- 
 ous excuses, and was admitted to a conference only after the 
 gravity of the situation had been increased by mutual charges 
 and recriminations in the newspapers. Nothing came of the 
 conference ; and the labor leaders, seeing in the attitude of the 
 owners of the Homestead mill a disposition to attack the Amal- 
 gamated Association throughout the Pittsburg district, threat- 
 ened to call out the men from every other mill in which these 
 owners were interested. " If this condition of affairs continues 
 at Homestead," said Mr. Jarrett, "the stockholders in the 
 Homestead works who have mills in Pittsburg may have to fight 
 the association in their own mills. We shall not much longer 
 permit several firms to conveniently fight us in this concentrated 
 shape." Response was promptly made to this threat by the 
 eviction of the striking workmen from the homes they had rented 
 from the company. The labor leaders thereupon embodied their 
 threat in a formal resolution, and a date was fixed for the sym- 
 pathetic strike. 
 
 Thoroughly alarmed the company now offered to withdraw
 
 I S 6 GROWTH OF HOMESTEAD 
 
 the objectionable agreement; substituting one requiring the 
 men to give three days' notice of an intention to stop work, and 
 not more than three men to give such notice at one time. This 
 might have been satisfactory to the men ; but they refused to 
 accept the reduced scale of wages. In vain the company urged 
 that the improved machinery at their command made the work 
 easier and the output greater than at similar works. The men 
 had won one concession and were determined not to yield a 
 point so important as that which remained. So both sides 
 made ready in the newspapers for a general strike in all the 
 works belonging to the owners of Homestead, to begin on the 
 nth of March; and the labor leaders took the opportunity 
 of including in their resolution three other Pittsburg mills in 
 which disputes of various kinds had long been pending. This 
 meant the calling out of about 6,000 men, with dangerous pos- 
 sibilities of extensions ; and the manufacturers of Pittsburg 
 were not unnaturally alarmed at the prospect. 
 
 It is interesting in the light afforded by a hundred sympa- 
 thetic strikes since, to read the nal've expressions of opinion 
 published at that time by the Homestead managers. Mr. Singer 
 " could not see how the Amalgamated Association could order 
 a strike in mills where there was no trouble existing between 
 employers and employees;" and similar views were voiced by 
 others who took the employers' side of the dispute. So the 
 thing went on, each side daily publishing columns of protests, 
 accusations, and threatenings, until it seemed as though all the 
 iron works in Pittsburg would be involved in the struggle. 
 
 The days of grace accorded to the Homestead people thus 
 passed by, the dispute ever waxing fiercer in the newspapers 
 until the very eve of the threatened sympathetic strike, when 
 the company capitulated. On the nth of March the first 
 Homestead strike was reported settled ; and men of all classes 
 throughout the Pittsburg district read their papers that morning 
 with relief and thanksgiving. It had lasted ten weeks. 
 
 The joy was short-lived, however. The next day misunder-
 
 THE TROUBLE SPREADS 157 
 
 standings arose between Mr. Clark and the Amalgamated Asso- 
 ciation concerning the force and scope of a verbal agreement 
 made at the time of the supposed settlement ; and the strike 
 was resumed with greater bitterness than ever. At Homestead 
 there was great excitement, resulting in a pitched battle be- 
 tween deputy sheriffs and strikers, in outrages on " scabs," and 
 even in murder. Demands were made for the state militia by 
 the company, and requests for fresh conferences by the labor 
 leaders. The newspaper war was renewed ; and Clark threat- 
 ened to close the works indefinitely. Appeal was made by out- 
 side interests to the other owners, who, publicly vowing they 
 were powerless, nevertheless stepped between Clark and the 
 strikers and insisted upon a settlement. For a time the con- 
 test was transferred to the council-chambers of the owners and 
 there waged with hardly less bitterness than before. Indeed, 
 the differences which now arose were mainly responsible for the 
 final disruption of the company. 
 
 Some degree of harmony was at length reached ; and on 
 March 2Oth the newspapers announced that the strike was " set- 
 tled once more. " The terms of the peace were so worded as to 
 give it the aspect of a compromise. Practically it was a vic- 
 tory for the men. Clark promptly sent in his resignation, and 
 it was as promptly accepted. 
 
 Encouraged by its success, the Amalgamated Association a 
 few weeks later demanded a general advance of five to fifteen 
 per cent, in the wages of all iron and steel workers throughout 
 the country. A thunderbolt out of a clear sky, to which this 
 demand was compared, could not have excited greater surprise 
 and consternation. Anathematizing the Homestead works and 
 all its managers, the iron manufacturers of the country prepared 
 for the greatest contest with labor that had ever been seen. 
 June ist, 1882, was the day fixed by the association for the be- 
 ginning of this struggle ; and on that day the Carnegies and 
 two of the firms connected with the Homestead works, who by 
 this time had come to hold the Amalgamated Association in
 
 I 5 8 
 
 GROWTH OF HOMESTEAD 
 
 awe, agreed to the latter's demands. In all other mills where 
 union labor was employed, work was suspended in Pittsburg, 
 Wheeling, Cleveland, Cincinnati, St. Louis, Springfield, Chi- 
 cago, and other places. The iron industry of the country was 
 paralyzed in a day ; and for nearly four months the struggle 
 thus inaugurated continued, marked with wonderful endurance 
 
 on the part of the men and great 
 determination on the part of the 
 manufacturers. 
 
 For a while the works 
 at Homestead managed to 
 struggle along, under the 
 terms of the settlement, with 
 a force composed partly of 
 union and partly of non- 
 union men ; but the disor- 
 ganization of the iron and 
 steel trade was more than 
 it could cope with, and, on 
 August 2ist, the works were shut 
 down for lack of orders, as the manage- 
 ment frankly stated. 
 
 On September 2ist the general strike ended 
 in the complete discomfiture of the men, who 
 for over a month had been dropping from the Amalgamated 
 Association, starved into submission. The struggle had cost 
 millions and benefited nobody. 
 
 On the very next day a fresh strike occurred at Homestead, 
 where an effort had been made, a couple of weeks before, to 
 start up again. The cause was a trifling incident growing out 
 of the previous dispute. The men objected to the presence of 
 a " scab " who, during the troubles, had shot one of them in 
 self-defence ; and to even things up the management also ex- 
 pelled the workman who had been thus wounded. 
 
 The new trouble did not last long; but it served to increase 
 
 *Shot one of them 
 in self-defence."
 
 PURCHASE OF THE STEEL WORKS 159 
 
 the discontent of the stockholders of the concern, whose greater 
 interests in their respective mills were thus repeatedly jeopar- 
 dized ; and their dissensions became acute. About this time, 
 too, the price of steel was rapidly falling; and, alarmed by the 
 imminent call for more capital, some of the Homestead stock- 
 holders hastened to get out of the company. One of them hav- 
 ing secured an option on the shares of some of his associates, 
 went to the Carnegies and offered them the control thus 
 acquired. 
 
 The offer was promptly accepted. Although trade was now 
 very bad and daily growing worse, the Edgar Thomson works 
 in the past had been inconveniently drawn upon for supplies of 
 steel by the Hartman Steel Company at Beaver Falls, and for 
 billets by the Union Iron Mills. The Keystone Bridge Works 
 were also using increasingly large quantities pf steel ; and the 
 Carnegie people were prompt to embrace the opportunity offered 
 them of acquiring possession on easy terms of a plant which 
 would at once relieve the pressure from the Edgar Thomson 
 works and remove from their immediate neighborhood a danger- 
 ous rival. 
 
 Accordingly in October, 1883, the Homestead mills became 
 the property of the Carnegie group. The price paid was the 
 cost of the plant, with a reasonable allowance for increased land 
 values. Little cash was paid ; and the notes given in pay- 
 ment were subsequently liquidated out of the profits of the 
 mills. 
 
 The Carnegies, with a view of holding for themselves the 
 markets created by the old stockholders, offered the latter the 
 privilege of remaining in the enterprise; but with one unimpor- 
 tant exception they declined the offer, and, taking their little 
 checks and notes, went out of the enterprise with grateful 
 hearts. The interest of the one who remained was eventually 
 sold for about eight millions. 
 
 It is illustrative of the unfailing luck of the Carnegies that 
 the Homestead works, thus acquired when the steel trade was
 
 i6o 
 
 GROWTH OP HOMESTEAD 
 
 suffering an unparalleled depression, should pay their cost 
 within two years. Few of the steel works of the country were 
 working up to their full capacity at the end of 1883, and many 
 of them were closed. At $35 a ton, none but the best-equipped 
 mills could make rails without loss. Even at this price there 
 were few orders to be had; and six of the nine Western mills 
 were shut down. At the beginning of December the Edgar 
 
 Thomson had only 
 enough work in 
 sight to last a few 
 days and one con- 
 tingent order of 
 8,000 tons of rails, 
 not to be rolled until 
 the order had been 
 confirmed. The 
 Homestead works 
 had been put on bil- 
 lets for the Union 
 
 i 
 
 Iron Mills, and had 
 only enough work in 
 sight to keep running 
 till the middle of Janu- 
 ary. Wilson, Walker & 
 Co. stopped work on Decem- 
 ber 5th for lack of orders. 
 The Joliet mill had just shut 
 down; and the old Chicago mill 
 had long before stopped running 
 for like reasons. 
 
 But the Carnegie partners had faith in the future, and still 
 greater confidence in the genius of the men who had made their 
 other enterprises successful ; and so, utilizing these dull times 
 for repairs and changes, and profiting by low prices of labor and 
 material for extensions, they struggled through the period of 
 
 "Went out of the enterprise with 
 grateful hearts."
 
 GROWTH OF THE PLANT 161 
 
 depression and were ready for the harvest of prosperity when it 
 came. 
 
 The conversion of the Homestead works to the production 
 of steel specialties is a very striking indication of the new uses 
 to which steel was then being put. As we have seen, the works 
 apart from Kloman's were projected for the manufacture of 
 steel ingots and billets to be used by the crucible steel-makers 
 of Pittsburg. They were not now used for their original pur- 
 pose, but for the manufacture of steel specialties which were 
 fast taking the place of iron. Steel bridges were now used to 
 replace those of wood; and the low price of Bessemer beams 
 and other structural shapes gave an impulse to their use in 
 architecture which, in a few years, wrought the revolution cul- 
 minating in the sky-scraper. There were thus developed new 
 markets which soon brought back prosperity to the trade; and 
 the temporary depression had but served to benefit the far- 
 sighted manufacturer who knew enough to utilize the period of 
 low prices to add to the capacity of his works. 
 
 At the time of its purchase the Homestead mill was already 
 one of the best-equipped plants of its size in the country; but 
 during the next few years important additions were made to it 
 which put it at the head of the steel works of the world. On 
 October, 1885, a new bar and angle mill was constructed, giving 
 employment to four hundred men; and by the middle of July, 
 1886, the converting works, under the skilful management of 
 Mr. Julian Kennedy, were turning out six hundred tons of 
 Bessemer steel a day. In the month of March, 1887, the two 
 four-ton converters produced the .unexampled total of 19,572 
 tons of ingots, and further broke the record with an output of 
 915 tons in one day. 
 
 During their most active period of growth Mr. Julian Ken- 
 nedy was superintendent of the works ; and their success was 
 in no small degree due to his exceptional engineering skill. 
 Just as a new era in blast-furnace construction and product was 
 
 inaugurated under his management at the Edgar Thomson works 
 ii
 
 MR. P HIP PS' PROGRESS! VENESS 
 
 163 
 
 in the early '8os, so now was initiated a revolution in rolling- 
 mill practice. The slabbing-mill, already mentioned as the 
 giant descendant of the little Zimmer mill at Kloman's, was 
 erected by him, as was also the 1 1 9-inch plate-mill, the largest 
 machine of its kind that up to that time had been built. A 
 slight modification in the arrangement of the slabbing-mill a 
 machine that cost nearly a million fitted it for the rolling of 
 armor-plate and doubled its usefulness. Mr. Kennedy invented 
 
 Ninety-ton steel ingot at Homestead. 
 
 ingenious labor-saving devices by which massive shapes of red- 
 hot steel were tossed lightly about at the will of a single oper- 
 ator, and excited the wonder, not only of chance visitors, but 
 of trained engineers who travelled half round the world to see 
 them. 
 
 By. the insistent progressiveness of Mr. Phipps the first 
 basic open-hearth furnace in America was erected by Mr. Ken- 
 nedy at Homestead, and was so successful that others followed 
 in quick succession. To this early entry into a new field and
 
 1 64 GROWTH OF HOMESTEAD 
 
 to persistent cultivation of it is clue the supremacy which the 
 Homestead plant has won over the steel works of the world. 
 This broad statement is verified by a comparison. In 1886, 
 when the first open-hearth plant was built at Homestead, the 
 production of steel by this process was only a little over 200,000 
 tons in the whole of the United States. Last year (1902) the 
 Homestead works alone produced over 1,500,000 tons of open- 
 hearth steel. This is about twenty-five per cent, of the total 
 output of the country, although there are seventy-seven other 
 works in America making open-hearth steel. Added to the 
 product of the Bessemer process this gives a total of 1,889,000 
 tons of steel made at Homestead last year. 
 
 These results are in a large measure due to the use of natu- 
 ral gas in the open-hearth furnaces. The chance which placed 
 the Carnegie enterprises in the natural-gas region is to be 
 credited with much of their exceptional success; and in the 
 manufacture of open-hearth steel this fortuitous factor has been 
 of first importance. The heating power of natural gas is far 
 greater than that of the ordinary " converter gas " used else- 
 where, thus making the operation of fifty-ton furnaces an easy 
 matter; while its cost to the Carnegies does not exceed five 
 cents a thousand feet, thanks to the enlightened policy of Mr. 
 Frick, who, in spite of much opposition, secured large areas of 
 gas territory for his firm. It is to this single fact that much of 
 the astonishing growth of the business, described later, is clue. 
 
 It is at Homestead that wonders are performed as amazing 
 as those of the Arabian Nights. Here machines endowed with 
 the strength of a hundred giants move obedient to a touch, 
 opening furnace doors and lifting out of the glowing flames 
 enormous slabs of white-hot steel, much as a child would pick 
 up a match-box from the table. Two of these monsters, appro- 
 priately named by the men " Leviathan and Behemoth," seem 
 gifted with intelligence. Each is attended by a little trolley- 
 car that runs busily to and fro, its movements controlled by the 
 more sluggish monster. This little attendant may be at one
 
 WONDER- WORKING MACHINES 
 
 165 
 
 end of the long shed and the Leviathan at the other; but no 
 sooner does it seem to see its giant master open a furnace door 
 and put in his great hand for a fresh lump of hot steel, than it 
 runs back like a terrier to its owner and arrives just as the huge 
 fist is withdrawn with a glowing slab. This the Leviathan gen- 
 tly places on its attendant's back; and, to the admiration of all 
 beholders, the little thing trots gayly off with it to the end of 
 the building. Even then the wonder is not ended ; for the 
 little fellow gives a shake to his back, and the glittering mass, 
 
 The Leviathan and its attendant. 
 
 twice as big as a Saratoga trunk, slides onto a platform of rollers 
 which carry it to the mill. And no human hand is seen in the 
 operation. 
 
 In another place lady-like machines seem to dance lightly 
 in front of the furnaces, occasionally stretching out a hand, seiz- 
 ing a red-hot billet, and waltzing with it to the rolling-mill. 
 These marvels of mechanical skill have swelling skirts that make 
 the idea of the ball-room irresistible. Being suspended from 
 above so that their mechanism is not visible by night, they move 
 backwards and forwards, from one side to the other, tripping
 
 1 66 GROWTH OF HOMESTEAD 
 
 along a row of furnaces and pirouetting diagonally back with a 
 swift, graceful, and noiseless sweep in a fashion that suggests 
 nothing but play and Virginia reels. And the beautiful lumps 
 of steel, white-hot and dripping with fire, are carried as lightly 
 as a girl's bouquet, and deposited just as lightly in the lap of 
 a chaperone, when their owner glides with easy turnings out 
 into another dance. 
 
 In yet another place is a comical being that runs busily about 
 carrying hot things round corners. When this grotesque ma- 
 chine gets to the end of his track he makes a quick half-turn to 
 the right and runs on again. And all the while he holds* in 
 one hand a long rubber tube, like a boy at a May-pole. This 
 contains the electric wires that give him life and intelligence. 
 
 The wizard who has endowed these machines with their 
 amazing power is a quiet, modest young fellow, Alva C. Dinkey, 
 the present superintendent of the great works. If any of the 
 junior partners merit the title of "young geniuses," Mr. Dinkey 
 is certainly one of the first. 
 
 Mr. Dinkey has also charge of the four Carrie blast-furnaces 
 just across the river at Rankin, which supply a part of the pig- 
 iron used at Homestead. One of these was removed from Ohio 
 by the Carrie Furnace Company, rebuilt here in 1883 and blown 
 in on February 29th, 1884. Another was built by the same 
 company in 1888-90. The Carnegie Steel Company built the 
 others. They are each 100 feet high, with 23-foot bosh and 
 15-foot hearth. Their total annual capacity is 672,000 tons of 
 metal, which is hauled, in a molten state, by locomotives across 
 the river bridge to Homestead. The last built of these furnaces 
 produced 206,650 tons of pig-iron in 1902. This is believed to 
 be the world's record.
 
 CHAPTER XI 
 
 Coke-ovens. 
 
 THE INCOMING OF HENRY CLAY FRICK 
 
 IN 1882, the iron and steel 
 business whose growth 
 we are tracing may be 
 said to have attained its 
 majority. Just twenty- 
 one years had elapsed 
 since the building of the 
 Kloman mill at Twenty- 
 ninth Street, when the 
 infant industry emerged from the embryonic state of Girty's 
 Run. Thanks to skilful nursing, it had passed easily through 
 the dangers and diseases of childhood; and under the stimulat- 
 ing pabulum of a high tariff it had waxed big and lusty beyond 
 all precedent. Like most overgrown things, however, it was 
 ill-proportioned and awkward. There was an uncertainty 
 about its movements which showed that its physical growth 
 had outstripped its mental development. There was none of 
 that harmonious working of parts and effective unity of in- 
 terests which bespeak the well-balanced organism. 
 
 This was now to be changed not suddenly and by a con- 
 scious effort, but, as is the nature of all growth, quietly, gradu- 
 ally, and by unnoticed movements. 
 
 The most conspicuous step in the mental evolution of this 
 industrial organism was the simple and prosaic incident which 
 brought Henry Clay Frick into contact with it. At the time 
 this seemed a very commonplace occurrence. Similar things 
 had happened in the history of the enterprise a dozen times 
 
 without attracting more than a passing attention. The present 
 
 167
 
 1 68 HENRY CLAY PRICK 
 
 one produced a revolution. A simile from the science of biol- 
 ogy suggests itself. One of the lowest forms of life exists as a 
 little floating globe of jelly, which surrounds and absorbs into 
 itself every smaller thing that bumps against it. Sometimes, 
 however, a more highly developed creature comes along and 
 reverses the process. Something akin to this happened now. 
 
 Up to the time of the incoming of Mr. Frick the group of 
 men with whom he now allied himself had had no definite pol- 
 icy. The several industrial establishments had all been started 
 by some outer accident, and each had developed along its own 
 line as the needs of the day required, and as the fostering hand 
 of the Government was laid more or less kindly upon it. The 
 Kloman germ grew under the stimulus of the war; and the 
 Twenty-ninth Street mill was built to meet the increased de- 
 mand for Kloman axles. The Cyclops or Thirty-third Street 
 mill was but an accidental offshoot of the Kloman stem; and 
 the business of both grew with the country's growth and the 
 general development of the iron trade. The Keystone Bridge 
 Company was simply the incorporation of an existing business. 
 The suggestion of the Lucy furnaces came from outside ; as 
 did also that which resulted in the steel business at Braddock. 
 The Homestead works were built by outsiders ; and their absorp- 
 tion by the Carnegie group was a mere accident. And yet, in 
 conformity with those laws underlying all growth, the line of 
 progress was one which ever tended to round out and complete 
 the series of operations in the conversion of crude iron ore into 
 finished materials. But this was a natural and unconscious 
 development growing out of trade conditions. There was at no 
 time a well-defined plan or policy of expansion. 
 
 With the incoming of Mr. Frick, however, this vague pro- 
 gression at once assumed a definite character. It was the 
 marshalling of hosts into a coherent unit, with one mind ruling 
 all for the good of each. 
 
 To give a just idea of the revolutionary character of the 
 changes inspired by Mr. Frick, it is necessary to anticipate
 
 HENRY CLAY FRICK
 
 Plate IX. 
 
 HENRY CLAY FRICK
 
 A MIRACLE OF IXDCSTRIALJSM 169 
 
 events a little, and give a rough outline of the perfected organi- 
 zation which he built up out of the scattered units which he 
 found. These units were the Upper and Lower Union Mills, 
 the Lucy Furnaces, the Edgar Thomson Steel Works, the Key- 
 stone Bridge Works, the Pittsburg Bessemer plant at Homestead, 
 and the little interests in coke and coal at Larimer and Unity, 
 and in ore at Scotia. There was also, at Beaver Falls, the 
 Hartman Steel Works, an unqualified failure and source of 
 uninterrupted vexation to its owners. Apart from the Edgar 
 Thomson works and the Upper Union Mill, which had been 
 consolidated, each of these plants had its separate organization. 
 Such exchange of benefits as was possible among them was off- 
 set by the petty factions and jealousies which the Carnegie sys- 
 tem of unfriendly rivalry had established. 
 
 While there was a feeble attempt at consolidation made in 
 1886, before Mr. Frick assumed supreme power, it did little 
 more than modify the disunion described. Once in control, 
 Mr. Frick assembled these disorganized units into a solid, com- 
 pact, harmonious whole, whose every part worked with the ease 
 and silent motion of the perfectly balanced machine. This 
 mammoth body owned its own mines, dug its ore with machines 
 of amazing power, loaded it into its own steamers, landed it at 
 its own ports, transported it on its own railroads, distributed it 
 among its many blast-furnaces, and smelted it with coke simi- 
 larly brought from its own coal-mines and ovens, and with 
 limestone brought from its own quarries. From the moment 
 these crude stuffs were dug out of the earth until they flowed 
 in a stream of liquid steel into the ladles, there was never a 
 price, profit, or royalty paid to an outsider. Without any cessa- 
 tion of motion and with hardly any loss of heat, this product 
 passed with automatic precision into the multitudinous machines 
 which pressed it into billets, rails, armor-plate, bridge structures, 
 beams, and the endless variety of shapes required in modern 
 architecture. Finally these highly finished materials were often 
 conveyed to consumers over the same transportation systems as
 
 I/O 
 
 HENRY CLAY FRICK 
 
 before ; and the profit of every movement, as of every process 
 and change of form, passed without deduction into the exchequer 
 of what was now the Carnegie Steel Company, Limited a 
 single organization with one mind, one purpose, one interest. 
 The annual earning power of this great institution increased 
 under Mr. Prick's direction from $1,941,555 to $40,000,000 
 in a dozen years ; while its annual product of steel increased 
 during the same period from 332,111 tons to 3,000,000 tons. 
 The change thus baldly and inadequately expressed in terms of 
 dollars and tons makes the most impressive record, for such a 
 
 short period, of any manufacturing 
 organization in this or any other 
 
 country ' 
 
 Henry Clay Frick, to whose 
 remarkable executive and admin- 
 istrative ability this miracle of 
 industrialism is due, was only 
 thirty-three years of age when he 
 joined the Carnegies; and already 
 he had achieved the most note- 
 worthy success in the coke indus- 
 try of Pennsylvania. Born at 
 West Overton in 1849, young 
 Frick is found at the age of ten 
 gathering sheaves in the wheat-fields, carrying wood and water, 
 and doing such small farm chores as came within his child's 
 strength. This was his way of spending the summer holidays. 
 It afforded him the best of exercise, and probably gave him that 
 vigor and recuperative power which, later, astonished the sur- 
 geons who were probing to find the assassin's bullets in his 
 sadly wounded body. In undertaking this farm work the child 
 acted on his own impulse. He did it to earn enough money 
 to buy his clothes. Then he went back to school, where he 
 displayed the same earnestness of purpose. At the age of 
 fourteen he not only bought his own clothes but entirely 
 
 "Small farm chores.'
 
 maintained himself, working behind the counter of a country 
 store. At nineteen he became bookkeeper in his grandfather's 
 flouring-mill and distillery at Broad Ford, in the centre of 
 what is now the Connellsville coke region. At the threshold 
 of manhood he thus found himself fortuitously placed in the 
 field of his future activities, where he was destined to find both 
 wealth and honor. 
 
 The history of the development of the Connellsville region 
 is necessarily a sketch of the personal career of Henry Clay 
 Frick. He was one of the first, even at this youthful age, to 
 recognize the importance to the expanding iron industries of 
 Western Pennsylvania of this wonderfully rich deposit of cok- 
 ing coal. He has been the leading spirit in its development; 
 so that to-day, in some of the iron-producing centres of the 
 United States, Connellsville coke is known only as Frick coke. 
 He built railroads for transporting it; and he alone effected the 
 consolidation of the industry as it now stands. 
 
 Every great industry has its romance. That of Connells- 
 ville coke began in 1842, when a couple of small barges loaded 
 with it were floated down the Ohio to Cincinnati. There the 
 furnace men looked on it with suspicion and called it " cinders." 
 It was s.old in small lots at eight cents a bushel ; and a large 
 quantity remained after three weeks' effort to dispose of it. 
 This remainder was finally traded for a small patent grist-mill, 
 which was brought to Connellsville, and turning out to be a 
 failure, was there sold for $30. 
 
 But the foundryman who got the coke afterwards thought 
 well enough of it to make a trip to Connellsville to get more. 
 In this he was disappointed. No one was willing to repeat the 
 experiment, for a time at least. In 1850 there were only four 
 establishments making coke in the whole of the United States. 
 In 1860 the census shows that there were twenty-one such 
 establishments, all in Pennsylvania; and ten years later, when 
 Frick had already appeared on the scene and had become inter- 
 ested, there were but twenty-five coking plants in the country.
 
 HENRY CLAY FRICK 
 
 Coke-ovens under construction. 
 
 In 1871 young Frick organized the firm of Frick & Co. with 
 Abraham O. Tintsman, one of his grandfather ''s partners, and 
 Joseph Rist. They had three hundred acres of coal lands and 
 a plant of fifty coke-ovens. At this time there were not four 
 
 hundred ovens in the whole 
 Connellsville region, which 
 included an area of one 
 hundred square miles. The 
 Mount Pleasant and Broad 
 Ford Railroad, of which 
 Frick was one of the pro- 
 jectors, was opened about 
 the same time. The next 
 year Frick & Co. erected 
 one hundred and fifty more 
 ovens. Then the panic of 1873 came, and everybody but Frick 
 thought the business had come to an end. But he had gauged 
 its possibilities ; and, with a confidence in the country's growth 
 rare in one of his years, he realized that the depression was of 
 that tidal character which would eventually carry the business 
 to higher levels than before. Timid competitors anxious to 
 sell out at any price found a ready purchaser in the firm of 
 Frick & Co. ; and in the lean years following the panic he 
 acquired the interests of his partners, who, burdened with 
 unpaid-for purchases, staggered and finally fell in the storm. 
 By a singular paradox the panic which ruined his partners 
 made Henry C. Frick' s fortune. When the trouble had passed, 
 the price of coke rose from ninety cents to $4 and $5 a ton; 
 and the boom put young Frick at the head of the coke industry. 
 By 1882, when Frick admitted the Carnegies into his business, 
 he had acquired 1,026 ovens and 3,oco acres of coal land. 
 
 The business was now reorganized with a capital of $2,000,- 
 ooo; and a year later this was increased to $3,000,000 to keep 
 pace with the expansion of .the trade. By 1889, when its capi- 
 tal was increased to $5,000,000, the H, C. Frick Coke Com*
 
 A GREAT J1CSLVESS 
 
 173 
 
 pany owned and controlled 35,000 acres of coal land and nearly 
 two-thirds of the 15,000 ovens in the Connellsville region, three 
 water plants with a pumping capacity of 5,000,000 gallons daily, 
 thirty-five miles of railroad track, and 1,200 coke-cars. The 
 company employed 11,000 men. The volume of shipments 
 amounted to 1,100 car-loads a day, or 330,000 cars a year. 
 This is equivalent to 10,000 train-loads, which, strung together, 
 would extend from New York to San Francisco, or from London 
 across the continent of Europe, through Persia, and well on the 
 road to India. 
 
 In 1895 the capital of the H. C. Frick Company was further 
 increased to $10,000,000. It now owned 1 1,/86 ovens; 40,000 
 acres of Connellsville coal 
 lands, out of a total of sixty 
 to sixty-five thousand acres, 
 and its capacity was 25,000 
 tons of coke a day, or eighty 
 per cent, of the entire pro- 
 duction of the Connellsville 
 region. A little later its 
 monthly output amounted to 
 an even million tons ! 
 
 Coke-ovens under construction. 
 
 Such, baldly stated, are 
 
 the achievements of the man who from now on becomes the 
 most conspicuous and imposing figure in this history.
 
 CHAPTER XII 
 
 THE CAPTURE OF THE DUQUESNE STEEL 
 
 WORKS 
 
 MR. PRICK'S first great achievement 
 after assuming the leadership of Car- 
 negie Brothers & Co. was the capture 
 of the rival steel works at 
 Duquesne, on the Monon- 
 gahela River, a short dis- 
 tance above Homestead 
 and Braddock. This mas- 
 terly move eliminated a 
 dangerous competitor from 
 the rail market, and gave 
 the Carnegies one of the 
 most modern and best- 
 equipped steel works in 
 the country without the 
 outlay of "a single dollar. 
 Even the unparalleled rec- 
 ord of Carnegie successes contains no greater industrial victory 
 than this; and business men in Pittsburg still regard it as the 
 greatest example of skilful financiering and management in the 
 history of the American steel trade. 
 
 The building and early history of the Duquesne steel works 
 recall those of Homestead. In a sense, indeed, the former may 
 be considered a continuation of the latter ; for they were planned 
 for similar reasons, completed by the same men, failed for kin- 
 dred causes, and were eventually sold to the same purchasers, 
 The Duquesne Steel Company was organized on June 4th, 
 
 174 
 
 Kloman's successor forging an axle.
 
 TO CHECK COMPETITION 175 
 
 1886, with a capital of $350,000. Before the plant was com- 
 pleted, disagreements arose among the promoters, and these, 
 joined to a call for more money, resulted in the suspension of 
 construction work. The enterprise was subsequently reorgan- 
 ized ; and the Allegheny Bessemer Steel Company was formed, 
 in March, 1888, with a capital of $700,000, to take over the 
 unfinished plant and carry it through to success. Among the 
 incorporators were E. L. Clark of the Solar Iron Works and 
 William G. and D. E. Park of the Black Diamond Steel Works. 
 These gentlemen subscribed for nearly six-sevenths of the total 
 capital. The other members of the corporation were also 
 practical men. Mr. C. Ansler, consulting engineer of Macin- 
 tosh & Hemphill, superintended the building of the works; and 
 neither money nor pains were spared to equip them with the 
 most improved machinery. The buildings were of an unusually 
 substantial and enduring character. They comprised convert- 
 ing and blooming house, 75 feet by 200; a rail-mill 68 feet by 
 380; a building covering the hotbeds 80 feet by 200; while 
 the wings inclosing the finishing machinery were 48 feet by 
 64. There were two Bessemer converters, each with a capacity 
 of seven tons. 
 
 Operations were commenced in the. blooming-mill on Feb- 
 ruary Qth, 1889, and a month later in the rail-mill. The long- 
 threatened competition with the Carnegie rail monopoly in the 
 Pittsburg district had begun. It was met by Andrew Carnegie 
 in a distinctly original fashion. 
 
 The Duquesne people, in their search for improved methods, 
 had planned to run their ingots from the soaking-pits, without 
 further heating, through the various rolls that pressed them 
 into billets and rails. This was an unheard-of innovation in 
 America, although something of the kind had been done in Eng- 
 land ; and Sir Henry Bessemer had long ago predicted that the 
 practice would become general. The ingots, having passed 
 through the 32-inch blooming-mill, went at once through the 
 26-inch roughing-train. After shearing, the piece went straight
 
 1 76 CAPTURE OF DUQUES&E 
 
 on to the two finishing-trains, which were equipped with espe- 
 cially powerful engines. Thus the re-heating of ingots was 
 dispensed with ; and from the mould to the finished rail the 
 steel passed only once through the furnace, instead of twice 
 or thrice, as in other works. 
 
 On learning of the adoption of this economy by a competi- 
 tor, Andrew Carnegie drafted a circular to the railroads, warn- 
 
 Ingots going from the Duquesne soaking-pits to the rolls. The mechanical 
 perfection is shown by the small number of workmen visible. 
 
 ing them against using the rails thus made, which he repre- 
 sented as defective through lack of homogeneity. Although 
 this was not believed by the Carnegie officials, the circular, 
 having been sent to Pittsburg for that purpose, was printed 
 and mailed to the purchasing agents of the railroads throughout 
 the country. When asked if he considered this a legitimate 
 form of competition, one of the Carnegie partners of that time 
 replied that " under ordinary circumstances he would not have
 
 TROUBLE WITH LABOR 
 
 177 
 
 thought it legitimate; but the competition set up by the Du- 
 quesne people was also not legitimate, because of their use of 
 this direct rolling process." In further self-justification he 
 added : " They were a thorn in our flesh and they reduced the 
 price of rails. If they had made rails by our method, we 
 would have recognized them as legitimate competitors; but 
 when we were attacking their method of rolling we could not 
 recognize them by letting them take a contract." 
 
 Pressed to explain the last sentence, Mr. Carnegie's partner 
 said : " We could not divide business with them as we other- 
 wise would have done." 
 
 It is worthy of remark that this method of direct rolling 
 was not abandoned when the Carnegies acquired the Duquesne 
 mills. On the contrary it was 
 adopted in all their other works, 
 and is now general throughout 
 the country. Presumably 
 steel-makers have learned to 
 overcome the lack of homo- 
 geneity against which Mr. 
 Carnegie warned the railroads. 
 
 The mechanical superiority 
 which the Duquesne works 
 showed over every similar plant in 
 the country was not enough in it- 
 self to offset the deficiencies of 
 management which soon became manifest. There were also 
 contentions with labor. The old antagonism to trades-unions 
 that brought trouble to the first owners of Homestead, cropped 
 out at Duquesne. Signs were put up all over the yards and 
 shops announcing that " no union men are allowed on these 
 works." When Mr. William G. Park saw them he gave orders 
 that such signs as were accidentally destroyed should not be 
 renewed. The directors dared not discredit their manager by 
 removing the offensive placards ; but they let it be quietly 
 
 The offensive placards.
 
 i;8 CAPTURE OF DUQUESNE 
 
 known that a driver who knocked one of them down and de- 
 stroyed it would not be punished for carelessness. Some of 
 these signs were still in existence when Mr. Frick bought the 
 works. 
 
 There were also defects in the operating department; so 
 that large quantities of second- and third-rate rails accumulated 
 in the yards. The dissatisfaction of the owners with the man- 
 agement was augmented by several serious losses growing out 
 of undesirable contracts. In fairness to the managers, however, 
 it should be confessed that they were really obliged to take 
 these contracts in order to keep running; for the rail pool, at 
 the instigation of the Carnegies, constantly headed them off 
 from all desirable business, and obliged them to take such orders 
 as no mill in the pool wanted. As a result the stockholders 
 were soon called upon for additional capital. First $100,000 
 was called for; then twice as much. This the stockholders 
 refused; and Mr. William G. Park had to pay it all. So that a 
 suggestion from Mr. Frick that the Carnegie Company might 
 buy the property at a bargain found Mr. Park in a particularly 
 receptive mood. 
 
 The price first talked about by Mr. Frick $600,000 was 
 considered too low by Mr. Park, as no doubt it was. The works 
 had cost nearly twice that sum. They had made as much as 
 five hundred tons of rails and billets in twenty-four hours ; and 
 while their cost from pig-iron to rails was high $8.14 in 
 October, 1889 the stockholders were loath to accept any very 
 great loss. On the other hand, Mr. Frick showed no disposi- 
 tion to increase the bid which he had thrown out in a tentative 
 way; and so the thing dragged on for nearly a year. During 
 this time Mr. Park obtained options on his partners' holdings ; 
 and when the negotiations were resumed he was able to offer 
 the entire stock of his company. During the month of August 
 preceding the final sale the output of the rail-mill was the largest 
 in its history 16,814 tons. The output of raw steel was over 
 20,000 tons ; and 1 7,000 tons of blooms were made.
 
 BRILLIANT FINANCIERING 
 
 179 
 
 On this showing Mr. Frick, in October, 1890, raised his 
 bid for the plant to $1,000,000 in bonds, material on hand to 
 be appraised and paid for in cash. On the 3Oth of the month 
 this offer was accepted ; and a couple of weeks later the plant 
 was turned over to the Carnegies. Once more they were with- 
 out a rival rail-mill in their own territory. 
 
 At this time the works consisted of two seven-ton converters, 
 six cupolas four for iron and two for spiegel seven soaking- 
 
 Copjright by S. S. McClore Co. 
 
 Pouring steel from converter into ladle. 
 
 pits, four trains of rolls, and the necessary boilers, engines, and 
 other equipment to successfully operate a blooming and rail mill 
 of that size. 
 
 It is commonly believed in Pittsburg that the plant thus 
 bought with nothing but an issue of bonds, paid the new owners 
 $1,000,000 in the first sixty days. This is not true; but the 
 works did pay for themselves within a year, for, with his habit- 
 ual foresight, Mr. Frick had provided a market for their prod- 
 uct before he bought them. The rail-train was changed to 
 make billets ; and these were promptly marketed at good prices.
 
 i8o CAPTURE OF DUQUESNE 
 
 Before the bonds became clue the plant had paid for itself six 
 times over; and the surplus earnings had gone into the construc- 
 tion of four large blast-furnaces. 
 
 Mr. Frick always had an instinct for picking out the right 
 man for every place ; and his intuition did not fail him when 
 he selected Thomas Morrison for Duquesne's first superintend- 
 ent under the new regime. This young man was a distant con- 
 nection of Andrew Carnegie; but he made no attempt to trade 
 the fact for favors. He took a humble place in the machine- 
 shops at Homestead, and caught the notice of his superintend- 
 ent, Mr. Potter. Mr. Prick's attention having been drawn to 
 the youth, he watched him for a while, and decided that he was 
 capable of better things than he was doing. Greatly to the 
 young man's surprise he was selected for the responsible posi- 
 tion of superintendent at Duquesne. Here the men tried to 
 take advantage of his youth ; but he met the attempt with dig- 
 nity, and, being supported by the firm, had no further trouble 
 of that kind. In one of Mr. Frick's weekly reports in June, 
 1891, he says: "Matters have been looking threatening at 
 Duquesne. Morrison has handled the matter very well. He 
 is not much of a talker." In that he was a man after Mr. 
 Frick's own heart. 
 
 Early in 1 892 Morrison was instructed to get up plans for 
 two blast-furnaces at Duquesne, which he did ; and the same 
 month he was given a small interest in the Carnegie Company. 
 During this time the plant was being operated as the Allegheny 
 Bessemer Steel Company, the former owners not having yet 
 closed all the old transactions. By July this had been done ; 
 and the plant was taken into the consolidation of all the Car- 
 negie works that formed the Carnegie Steel Company. 
 
 Owing to the disturbing effects of the Homestead strike the 
 two Duquesne furnaces, planned early in 1892, were not com- 
 menced until November 5th, 1894. By August of the follow- 
 ing year, 1,700 men were at work on them; and the first one 
 was blown in on June 8th, 1896. On October /th the second
 
 A WONDERFUL RECORD 
 
 181 
 
 furnace went into blast. In May, 1897, a third furnace was 
 lighted ; and a fourth followed in June. 
 
 Three of these stacks are 100 feet high by 22 feet at the 
 bosh. The fourth is the same height and a foot narrower. For 
 nearly four years they held the world's record; as much as 
 18,809 tons of metal being produced by a single furnace in a 
 month.* Then the broom of supremacy, previously flaunted by 
 
 Duquesne furnaces. 
 
 the Lucy, and then by the Edgar Thomson furnaces, passed to 
 another Carnegie stack, that known as Carrie No. 3. 
 
 It is worthy of remark that when the Duquesne furnaces 
 were put in operation, with all their labor-saving appliances, 
 they cut the cost of labor per ton of iron produced to one-half 
 that prevailing elsewhere. 
 
 The rivalry started thirty years ago by the Lucy and Isabella 
 furnaces still persists. Late in 1901 Carrie No. 3 made 790 
 tons in twenty-four hours. A month or so later furnace No. 2 
 of the National Steel Company at Youngstown, Ohio, produced 
 
 * In October, 1898, the output of these four furnaces was as follows: 
 
 No. i 18,672 tons. 
 
 2 17 717 " 
 
 3 18,809 " 
 
 4 18,060 "
 
 1 82 CAPTURE OF DUQUESNE 
 
 806 tons. This furnace is 106^2 feet high and 23 feet in 
 diameter. Later, furnace E at the Edgar Thomson works made 
 901 gross tons. It is probable that before these pages are in 
 type some more modern furnace will make a thousand tons in a 
 day. If so, the difference between the 50 tons that the Lucy 
 first made, and i ,000 tons, will mark, in a way easy to under- 
 stand, the progress in blast-furnace construction and practice of 
 the period covered by this story and the one group of workers 
 to which it relates.* 
 
 To describe the further growth of these works in detail 
 would take more space than is possible here. They were Mr. 
 Prick's pride; and he lavished his best thought upon them. 
 Hardly a month passed that did not see some important change 
 and addition ; until for economy of operation they stood unri- 
 valled among the steel works of the world. Here are the most 
 important items in this record of growth and improvement : 
 
 1896 June ii Purchase of 57 acres of Hays estate adjoining. 
 
 Oct. 9 Purchase of 65 acres from Oliver estate, including plats 
 
 between railroad and river ; price about $200,000. 
 Nov. 10 Purchase of 50 acres from Dr. W. S. Huselton for 
 
 $150,000. 
 
 " Dec. 19 Jones mixer, 200 tons, put in operation ; largest in the 
 country. 
 
 . 1897 Feb. 2 Work commenced at Duquesne on Union Railroad. 
 
 " May 6 No. 3 furnace blown in. 
 
 June 10 No. 4 furnace goes in blast. 
 
 " Dec. 19 Work started on new billet-mill. 
 
 1898 June I Union Railroad completed and first run of hot metal 
 
 from Duquesne to Homestead. 
 " July 8 New 1 6-inch continuous mill put in operation. 
 
 July 19 Union Railroad bridge finished, connecting Duquesne 
 
 with Edgar Thomson works. 
 
 Aug. i Duquesne tube works sold by sheriff for $141,500 to 
 Carnegie Steel Company. 
 
 *At the Lucy furnaces at this date, 1903, the present superintendent, James 
 Scott, was employed at the same plant soon after its construction, thirty years ago. 
 No man in the Carnegie Steel Company, or indeed anywhere else, has been closer 
 to the great changes described than Mr. Scott, and few men have contributed 
 more to produce these changes.
 
 ANTICS OF A METEOR 183 
 
 1899 Feb. 7 Howard Glass House and 27 acres purchased for 
 
 $300,000. 
 
 Apr. 10 Coal dock on Monongahela River contracted for. 
 Oct. 6 New blooming and billet mills and open-hearth plant to 
 
 cost $2,500,000 first publicly announced. 
 Nov. 20 Excavations for open-hearth plant started. 
 
 i^oo Feb. 1 6 Plans for new 14-inch continuous billet-mill announced. 
 Apr. 5 Plans for new 10- and 1 3-inch double-storage mill an- 
 nounced. 
 
 " Oct. i Two new open-hearth furnaces started. 
 Nov. 27 4O-inch mill began operations. 
 Dec. 13 Two more open-hearth furnaces started. 
 
 1901 Jan. 2 Excavations started for new 14-inch mill. 
 " Feb. 7 Excavations for foundations of two new merchant mills. 
 Mar. i Date of merger with United States Steel Corporation. 
 
 The present capacity of the works is 750,000 tons of pig- 
 iron a year, and 600,000 tons of raw steel. The whole of this 
 material can be made into finished products on the place. These 
 totals are twenty times as great as the first year's output of the 
 Edgar Thomson works. In view of the short time in which 
 these results have been attained, the enthusiasm of the local 
 editor is pardonable, even when after comparing Duquesne to 
 " the meteor that has darted out of space and cut a brilliant 
 path across the sky " yet " remains in the horizon, more lus- 
 trous than ever," he calls it "the acknowledged young giant 
 and the mastodon of the unconquered and the unconquerable 
 Monongahela valley." There is certainly much in Duquesne 
 to arouse local pride.
 
 CHAPTER XIII 
 LABOR CONTESTS IN THEORY AND PRACTICE 
 
 THE great Homestead strike, which forms the 
 most dramatic episode in the history of all 
 the Carnegie enterprises, grew out of con- 
 ditions without parallel in the industrial 
 history of this or any other country. Su- 
 perficially, this contest was a commonplace 
 struggle between capital and labor concern- 
 ing the equitable division of the results of 
 Personification of th j j t effortS- B ut behind this were 
 
 a principle. J 
 
 certain moral causes, growing out of the con- 
 flict between the idealistic platform-theories of Andrew Car- 
 negie and the unsentimental exigencies of business. A brief 
 glance at the attitude towards labor of Carnegie the manu- 
 facturer, as contrasted with the academic utterances of Carnegie 
 the philanthropist, is necessary to an understanding of the re- 
 moter and more obscure causes of this titanic struggle, which, 
 marked as it was with all the ferocity of civil war, caused a 
 shudder to run through the civilized world. Incidentally such 
 a retrospect will also show that no successful business can be 
 built on philanthropic aphorisms. Nor can Utopianism be 
 grafted upon an industrial system still rudimentary in its de- 
 velopment, without producing fruit of an unexpected and inju- 
 rious variety. 
 
 The first strike in the history of the Carnegie iron business 
 was that of 1867, when, as has been related, the puddlers 
 resisted a reduction of wages. This was ended by a sudden 
 boom in the iron trade which called all idlers back into the 
 
 shops at better wages than before. The Carnegies, however, in 
 
 184
 
 PHILANTHROPIC POSTURING 185 
 
 common with other manufacturers, had attempted to break the 
 strike by the wholesale importation of foreign labor. While at 
 this time there was no open hostility on the part of the manu- 
 facturers to labor- unions per se, there "was also no public glori- 
 fication of them. As for Carnegie himself, his influence was 
 too unimportant to have much effect on his partners ; but so 
 far as is known, the business man was still dominant in the 
 dual personality which later puzzled partners and workmen 
 alike by an altruism never before professed by any employer. 
 
 At the end of 1875, just after the starting of the Edgar 
 Thomson works, mutterings of discontent were heard amongst 
 the men, and a strike became imminent. During the few weeks 
 that the plant had been in operation some minor weaknesses 
 and defects had shown themselves in the machinery; and, to 
 remedy these, the excuse offered by the discontent of the men 
 was seized upon to shut down the works. Stunned into sub- 
 mission by the swiftness of the blow, the men readily signed 
 the agreement presented to them by the company before they 
 were allowed to return to work; and the lesson thus learned 
 lasted long. Many years of peace supervened at the Edgar 
 Thomson works. There was still no philanthropic posturing. 
 It was all business, and very properly so. 
 
 In July, 1884, the Carnegies had a strike at their Beaver 
 Falls mill. This plant, known as the Hartman Steel Works, 
 was an unimportant but costly side-issue growing out of an 
 effort to find new markets for raw steel. Designed to lead the 
 world in nails and wire rods, the enterprise was an unqualified 
 failure from the start ; and, except for a brief period under the 
 management of Mr. P. R. Dillon, it remained so to the end, 
 when it was cleverly sold by Mr. Frick to the \Vire Trust, and 
 closed and dismantled. The strike referred to was a frank trial 
 of strength between the Carnegies and the Amalgamated Asso- 
 ciation. Andrew Carnegie entered upon it with many misgiv- 
 ings, telling Hartman, his partner, that no one could success- 
 fully fight the Amalgamated Association " within the smoke of
 
 1 86 LABOR CONTESTS 
 
 Pittsburg. " Hartman thought otherwise; and, being empow- 
 ered to carry the fight to a finish, did so in excellent style and 
 won a complete victory over the labor organization. The con- 
 test had all the usual features the importation of workmen 
 from other districts, followed by rioting among the strikers, at- 
 tacks on the "black sheep," and the arrest, trial, and conviction 
 of the rioters. There was no display of sentimentality among 
 the owners; and the labor-union was temporarily crushed out 
 of the mill. 
 
 The folly of thus crippling a labor organization that gave 
 the Carnegies an advantage in their iron works over competitors 
 whose plants were less favorably located, was not yet recognized. 
 With the possible exception of Mr. Walker, none of the Carne- 
 gie partners seemed aware of the economic principle underlying 
 the Amalgamated Association's requirement of uniform wages 
 for the same class of work regardless of other conditions a 
 principle that inured to the advantage of the best-equipped and 
 most favorably located plants. Given a uniform price of labor 
 throughout the country, the Pittsburg iron-mills, by reason of 
 their proximity to coal and ore, and their unequalled transporta- 
 tion facilities, possessed enormous advantages over competitors 
 in other districts; and an enlightened business policy would 
 have encouraged any organization that, without unduly interfer- 
 ing with the management, kept the cost of labor down to the 
 level of that possible in the worst-equipped and least favorably 
 situated works in the country. Recognition of this principle 
 came later; and brought a change in the company's treatment 
 of labor organizations. But unfortunately the change was 
 credited to humanitarian motives, instead of being frankly stated 
 as a business principle; and there inevitably arose conflicts 
 between the ideal and the real between Andrew Carnegie's 
 philanthropy and his material interests. 
 
 In 1885 Andrew Carnegie made his first public address, 
 and began that series of lectures and essays on the natural 
 rights of labor with which his name has since been identified.
 
 " TRIUMPHANT DEMOCRACY" 187 
 
 A year later Triumphant Democracy was published. Ostensi- 
 bly a record of the material progress of the United States dur- 
 ing the preceding fifty years, this book was made a vehicle for 
 the advanced views of Carnegie on the political and social 
 equality of all men. It was also a glorification of the toiler. 
 The book attained a large circulation, especially among work- 
 ingmen, who were enabled to buy it at a nominal cost through 
 their labor organizations. 
 
 In the same year he also published, in the Forum, an essay 
 on the relations of capital and labor, in which appeared the 
 following paragraph : 
 
 " While public sentiment has rightly and unmistakably con- 
 demned violence even in the form for which there is the most 
 excuse, I would have the public give due consideration to the 
 terrible temptation to which the workingman on a strike is 
 sometimes subjected. To expect that one dependent upon his 
 daily wage for the necessaries of life will stand by peaceably 
 and see a new man employed in his stead is to expect much. 
 This poor man may have a wife and children dependent upon 
 his labor. Whether medicine for a sick child, or even nourish- 
 ing food for a delicate wife, is procurable, depends upon his 
 steady employment. In all but a very few departments of labor 
 it is unnecessary and I think improper to subject men to such 
 an ordeal. In the case of railways and a few other employments 
 it is, of course, essential for the public wants that no interrup- 
 tion occur, and in such case substitutes must be employed ; but 
 the employer of labor will find it much more to his interest, 
 wherever possible, to allow his works to remain idle and await 
 the result of a dispute than to employ a class of men that can 
 be induced to take the place of other men who have stopped 
 work. Neither the best men as men, nor the best men as 
 workers, are thus to be obtained. There is an unwritten law 
 among the best workmen: 'Thou shalt not take thy neighbor's 
 job.' ' 
 
 Lofty in spirit and purpose as this essay was, its humani- 
 tarian intent was grossly perverted by the labor agitator ; and 
 its broad and liberal principles were garbled so as to seem an 
 authoritative excuse for violence. Unfortunately for the work-
 
 1 88 LABOR CONTESTS 
 
 men of Braddock and Homestead, they mistook these high phil- 
 anthropic views for the serious designs of their employer towards 
 themselves; and this misunderstanding was intensified by Car- 
 negie's method of ending the coke strike, mentioned later, and 
 also by an incident which happened about this time at Braddock. 
 This was somewhat as follows : 
 
 On account of some grievance the women employed in the 
 Pittsburg laundries refused to work, and enlisted the aid of the 
 Knights of Labor to keep other women from taking their places. 
 The Knights of Labor went to Captain Jones and demanded 
 the discharge of an old Carnegie employee, whose two daugh- 
 ters were working in one of the proscribed laundries. Jones 
 refused in that sonorous language with which he was so highly 
 gifted. The matter was thereupon taken direct to Mr. Carne- 
 gie, who ordered the man's dismissal, with the remark, " We 
 cannot afford a strike for a principle. " At the same time he 
 ordered the old man's wages to be continued for a couple of 
 months. Strange to say, the sturdy old fellow refused them. 
 
 No one was more surprised at this compliance with their 
 demand than the Knights of Labor themselves ; and its effect 
 on this dictatorial organization was most disastrous for the Car- 
 negies. Within a little while they had a strike of their own as 
 a result of the meddling of the leaders of this most offensive of 
 all labor-unions. 
 
 In Captain Jones' statement of the causes of the great out- 
 put of the Edgar Thomson works, quoted in a previous chapter, 
 he says : 
 
 " I soon discovered it was entirely out of the question to 
 expect human flesh and blood to labor incessantly for twelve 
 hours, and therefore it was decided to put on three turns, reduc- 
 ing the hours of labor to eight." 
 
 He adds that 
 
 " this proved to be of immense advantage to both the company 
 and the workmen, the latter now earning more in eight hours
 
 ANDREW CARNEGIE'S PINKERTONS 189 
 
 than they formerly did in twelve hours, while the men can work 
 harder constantly for eight hours, having sixteen hours for rest." 
 
 Jones' praiseworthy effort to amend the lot of the laborer was 
 afterwards found to put the Edgar Thomson works at a disad- 
 vantage with competing establishments where two twelve-hour 
 turns were the rule; and an effort was made in 1887 to induce 
 the Edgar Thomson men to return to the old system. At the 
 same time a sliding scale of wages was proposed, similar to 
 that which had been found successful in the North Chicago 
 rolling-mill and in the Crescent Steel Works at Pittsburg. The 
 men were willing to accept the sliding scale ; but they were 
 unwilling to return to the twelve-hour system. The usual 
 strike resulted ; but before it had gone far a committee of the 
 strikers went to see Mr. Carnegie at the Windsor Hotel, New 
 York. There he reasoned with them, and talked them into a 
 conciliatory frame of mind; and they agreed to sign the con- 
 tract he put before them. The affair seemed to have reached a 
 happy conclusion ; and the labor leaders left for Pittsburg in 
 the best of spirits. As Mr. Carnegie bade them good-bye, he 
 pressed into the hands of each a copy of his Forum essay. This 
 the men read on the train ; and on their arrival at Braddock 
 they promptly repudiated the agreement they had signed and 
 continued the strike. 
 
 Mr. Carnegie made no effort to conceal his disappointment 
 and chagrin. Summoning Captain Jones to New York, a brief 
 conference was held at the Windsor; and from there Jones 
 went over to Philadelphia and engaged a little army of Pinker- 
 ton guards for service at Braddock. Then Mr. Carnegie retired 
 to Atlantic City, where he was kept posted as to the current of 
 events by his cousin, George Lauder. 
 
 Under the protection of Pinkerton guards the works were 
 now put in operation by non-union men. The usual disorders 
 took place, resulting in a slight loss of life ; but eventually the 
 contest was won by the company. The struggle lasted from
 
 190 LABOR CONTESTS 
 
 December, 1887, till May, 1888. Thus ended the eight-hour 
 day in a night of sorrow and suffering. 
 
 Unfortunately the effect of this incident did not end with 
 the strike. It is being used in 1903 as an argument against 
 the compulsory eight-hour day which Congress is now consid- 
 ering; so that this great step in the elevation of the laborer 
 will probably be delayed by Jones' unlucky experiment. 
 
 Andrew Carnegie's later opinion of the Knights of Labor, 
 whom he blamed for the untoward result of his efforts at 
 conciliation, was not very high. When asked by an English 
 reporter if we have not such an organization in America as the 
 Knights of Labor, he replied with emphasis : 
 
 " Say rather we had. It was one of those ephemeral organi- 
 zations that go up like a rocket and come down like a stick. 
 It was founded upon false principles, viz., that they could com- 
 bine common or unskilled labor with skilled." 
 
 The coke strike, to which reference has been made, also 
 took place in 1887. This at first was a matter of wages pure 
 and simple; but, as in so many contests between master and 
 workmen, higher considerations were soon involved. 
 
 As has been related, the Carnegies bought a large interest 
 in the H. C. Frick Coke Company in 1882. In 1886, by the 
 withdrawal of two of Mr. Prick's earlier associates, this interest 
 was largely increased; and the Carnegies acquired a majority 
 of the coke company's stock. For the regulation of output and 
 to control competition, the coke operators of the Connellsville 
 region had some sort of a gentlemen's agreement ; and when, in 
 1887, trouble concerning wages arose, these owners acted in 
 unison, and all conferences with the workmen's unions were 
 conducted by a joint committee. By agreement with the trades- 
 unions the Knights of Labor and the Miners' and Mine 
 Laborers' Amalgamated Association the matters in dispute 
 were submitted to arbitration. The Board of Arbitration con- 
 sisted of two members appointed by the manufacturers, two by
 
 BAD FAITH ALLEGED 191 
 
 the labor-unions, and these four elected a fifth, who was to 
 serve as umpire in case of a failure of the whole board to reach 
 an understanding. This contingency arising, the decision was 
 left to the umpire ; and his award, when issued, was unfavor- 
 able to the men. Thereupon a strange condition arose. The 
 main bodies of the labor-unions accepted the umpire's judgment, 
 as in good faith they were required to do ; but the local lodges 
 denounced it as "unjust and unwarranted," and refused to be 
 bound by it. A strike ensued, which the Knights of Labor 
 called illegal; and, as if to further justify the characterization, 
 the men resorted to all the old-time acts of violence. Men who 
 were willing to work were maltreated and shot; dynamite was 
 used to blow up the mines ; machinery was destroyed, and thou- 
 sands of tons of coke were allowed to spoil in the ovens. 
 
 It was at this stage that Carnegie cabled from Scotland a 
 positive order to accede to the strikers' demands ; and, as he 
 and his partners controlled the Frick Coke Company, the order 
 was carried out regardless of outstanding obligations to the 
 other manufacturers. Naturally the defection of the most im- 
 portant member of the group excited in the rest the bitterest of 
 feelings ; and Mr. Frick promptly resigned the presidency of 
 the company which bore his name but which he no longer con- 
 trolled. The rest of the manufacturers set their teeth and 
 continued the struggle ; and, to the surprise of everybody, finally 
 gained a complete victory over their men. 
 
 The apparent act of bad faith on the part of the Carnegies 
 received universal condemnation. It was ranked above that of 
 the strikers who had repudiated the decision of their umpire. 
 The breaking up of the combination was also deplored because 
 it involved demoralization of prices on which the wages ulti- 
 mately depended ; so that in the long run the workmen would 
 suffer by the act. But those who made these criticisms did not 
 consider the risk which the Carnegies ran in banking up their 
 blast-furnaces. The best furnace will not stand banking for 
 more than three months ; and during this time there is always
 
 1 92 LABOR CONTESTS 
 
 a danger of its becoming chilled. When this happens it has to 
 be blown out, and partially if not wholly relined at a cost of at 
 least $35,000. At this date the Carnegies had seven furnaces 
 banked; so that there was almost a quarter of a million dollars 
 in hourly peril. In addition, there was a positive loss amount- 
 ing to many thousands of dollars daily through the stoppage of 
 iron production, and further losses in the steel-mill through lack 
 of material. On the other hand, the advantage which the Car- 
 negies would have over competing iron manufacturers by get- 
 ting a regular supply of coke and continuing work while all 
 others were idle, was one almost beyond compute. While this 
 alone might not tempt the average manufacturer to a breach of 
 faith, it would do much to console him for it if other conditions 
 produced it. 
 
 Of course the workmen were not informed as to all the 
 reasons which prompted the Carnegies to yield to their de- 
 mands; and they not unnaturally supposed that their victory was 
 due, in some mysterious way, to the inalienable rights of labor 
 and all the other pretty texts with which they had become 
 familiar. There is no doubt that this misunderstanding gave 
 rise to the frightful disorders that ensued, three or four years 
 later, in the same region. 
 
 The settlement just narrated was made in July, 1887. From 
 that time until early in 1890 the H. C. Frick Coke Company 
 paid twelve and one-half per cent, more for labor than did other 
 operators. In February, 1890, however, a general scale was 
 agreed upon covering wages in the Connellsville region under 
 which all operators paid the same rate. This scale expired a 
 year later; and the men refused to sign the new one designed 
 in continuation of it. After repeated conferences, at which no 
 agreement was reached, an effort was made to start the mines 
 and ovens with new workmen. For three months the whole 
 region was given over to rioting, arson, and murder. Armed 
 mobs attacked the mines and coking plants, killing and maim- 
 ing the workers, destroying the machinery, and defying the
 
 ETIQUETTE FOR STRIKERS 193 
 
 county officials who sought to bring order out of the industrial 
 chaos. Gangs of men marched through the night terrorizing 
 the peaceful members of the community ; and when deputy 
 sheriffs attempted to arrest them, the strikers assumed military 
 formations and shot their pursuers at sight. One such body 
 marched across a large extent of the country, occasionally 
 brought to bay, when battle was given and taken with all the 
 tactics of irregular warfare. In this guerilla-like march and 
 pursuit eight of the strikers were killed and many more were 
 seriously wounded. As the Carnegies had a fair supply of coke 
 on hand at the outbreak of hostilities, and as the prices of steel 
 and rails were low, the war was fought to the bitter end. 
 Eventually the rioters were caught or driven out of the region, 
 and others willing to accept the wages they refused received 
 adequate protection. 
 
 A year after the establishment of peace came the Home- 
 stead strike. In the mean time, however, Mr. Carnegie's Forum 
 essay, in the hands of undiscriminating workmen, had become 
 a veritable manual of etiquette for strikers. The last quoted 
 sentence, the Carnegie contribution to the decalogue, became 
 in its terse and picturesque vigor, the most understandable of 
 all the tenets of "the little boss; " and there was no Slav nor 
 Hungarian at Connellsville and Homestead so mean of intellect 
 as not to realize its full purport. As for the Knights of Labor, 
 over whom Mr. Carnegie had pronounced so slighting a funeral 
 oration, they sprang to a joyful resurrection with this text as 
 their watchword : " Thou shalt not take thy neighbor's job." 
 
 Before proceeding to a review of the immediate causes of 
 the greatest of all the Carnegie struggles with labor, it is fit- 
 ting that a glance should be given at the material conditions 
 surrounding the workmen at Homestead. To this end may be 
 quoted the sympathetic summary of a description of the men at 
 work which is published in Bernard Alderson's biography of 
 Mr. Carnegie under the latter's own supervision :
 
 194 
 
 LABOR CONTESTS 
 
 "Thus far," says Mr. Alderson, "we have studied Mr. Car- 
 negie in theory. Now let us see how he has put all these ad- 
 mirable sentiments and unimpeachable principles into practice. 
 The best test that can be applied is the condition of labor sur- 
 rounding his own workmen. Mr. Hamlin Garland, a well- 
 known writer, though having no technical experience, describes 
 the impressions he received from a visit to the Homestead 
 works. His training as a novelist naturally impelled him 
 
 to look at things from 
 the descriptive writer's 
 point of view, and not 
 become interested in the 
 picturesque, both horri- 
 ble and attractive. In 
 his approach to Home- 
 stead Mr. Garland was 
 struck by the desolate 
 appearance of the dis- 
 trict, and the wretched- 
 ness of the town itself, 
 he says, was deplorable. 
 'The streets were hor- 
 rible; the buildings 
 were poor; the side- 
 walks were sunken and 
 full of holes; and the 
 crossings were formed 
 of sharp- edged stones 
 like rocks in a river- 
 bed. Everywhere the 
 yellow mud of the 
 streets lay kneaded into 
 sticky masses, through 
 which groups of pale, 
 lean men slouched in 
 faded garments, grimy with the soot and dirt of the mills. 
 The town was as squalid as could well be imagined, and the 
 people were mainly of the discouraged and sullen type to be 
 found everywhere where labor passes into the brutalizing stage 
 of severity. ' 
 
 These depressing conditions are apparently inseparable from 
 a newly established iron or steel mill in any locality, and this 
 is especially true where soft coal is used. Grime, heat, hard, 
 exhausting labor, these are conditions that are to be found in 
 
 Copyright by S. 6. McClur 
 
 Looks like hard work."
 
 "A DOG'S LIFE" 195 
 
 every steel-mill, and the works of the Carnegie Company differed 
 little from other manufactories of the same kind except in ex- 
 tent, but it may be truly said that the larger the mill the more 
 depressing the conditions. 
 
 After commenting on the muggy, smoke-laden atmosphere, 
 he [Garland] proceeds to describe the conditions inside the 
 mills, and the men engaged at their tasks, and tells us that they 
 worked with a sort of desperate attention and alertness. 
 
 'That looks like hard work,' I said to one of them to whom 
 my companion introduced me. He was breathing hard from 
 his labor. 
 
 'Hard! I guess it's hard. I lost forty pounds the first 
 three months I came into the business. It sweats the life out 
 of a man. I often drink two buckets of water in twelve hours ; 
 the sweat drips through my sleeves and runs down my legs and 
 fills my shoes.' 
 
 'But that isn't the worst of it, said my guide, a former 
 employee. 'It's a dog's life. Now those men work twelve 
 hours, and sleep and eat out ten more. You can see a man 
 don't have much time for anything else. You can't see your 
 friends or do anything but work. That's why I got out of it. 
 I used to come home so exhausted, staggering like a man with 
 a jag!" 
 
 With this picture in mind it is worth while to quote from 
 Mr. Alderson's preceding page a characteristic phrase from 
 Andrew Carnegie : 
 
 " The lot of a skilled workman," he says, " is far better than 
 that of the heir to an hereditary title, who is very likely to lead 
 an unhappy, wicked life." 
 
 Little wonder that the skilled workman, with the sweat 
 dripping through his sleeves and running down his legs and 
 filling his shoes, failed to understand the man in whose inter- 
 est he was making such terrific exertions. " Kind master," he 
 cabled during the strike, " tell us what you want us to do and 
 we will do it ! " 
 
 "Again and again he [Hamlin Garland] is impressed, " con- 
 tinues Mr. Alderson, " with the general appearance of exhaus- 
 tion that is ehown in the haggard faces of the toilers, and he 
 says 'their work is of the sort that hardens and coarsens.'
 
 196 
 
 LABOR CONTESTS 
 
 Everywhere in the enormous sheds were pits gaping like the 
 mouth of hell, and ovens emitting a terrible degree of heat, with 
 grimy men filling and lining them. One man jumps down, 
 works desperately for a few minutes, and is then pulled up, ex- 
 hausted. Another im- 
 mediately takes his place ; 
 there is no hesitation. 
 When he spoke to the 
 men they laughed. It 
 was winter when he made 
 his visit. They told him 
 to come in the summer, 
 during July, when one 
 could scarcely breathe. 
 An old workman, relat- 
 ing the experience of his 
 first day's toil, says he ap- 
 plied for work, and the su- 
 perintendent, saying he 
 looked strong and tough, 
 set him on the pit work. 
 For the first time in his 
 life he fainted repeatedly, 
 and when he left at night 
 he could scarcely drag 
 himself home. 
 
 They take great risks, 
 too; and the injuries sustained are of a most frightful char- 
 acter. An explosion in the pouring of the molten metal, and 
 half-a-dozen men are terribly mangled and one or two killed. 
 Such incidents are not infrequent. The continuous dread of 
 an accident, combined with the intense drive of the work, 
 constitute a fearful strain. This is a fearful picture, painted 
 in the darkest, most repulsive colors, but this is but one 
 side of it. Nothing is said of the comfortable homes which 
 steady employment at from four to ten dollars a day enable 
 the steady, sober workman to maintain the self-confidence 
 that continuous employment begets. The environments of 
 the mills were improved as rapidly as possible, streets were 
 paved, schools were established, and public institutions of 
 various kinds were initiated. Several free educational institu- 
 tions were founded by Mr. Carnegie in an attempt to help his 
 workmen help themselves. The other side of the picture is 
 full of light and hope, though there are many exceptions. 
 
 Copyright by S. S. McClure Co. 
 
 Preferable to a peerage.
 
 D ANTES INFERNO 
 
 197 
 
 Many of the men have happy families, and those of the better 
 class are very well off. The company houses are very good, 
 and have all modern conveniences, and the men who are sober 
 and care for their families, besides being prosperous live 
 comfortably. 
 
 The effect of the work on these men was brought out in 
 a conversation which Mr. Garland had the morning after his 
 visit to the mills. 'The worst part of the whole business,' said 
 the workman, 'is, it brutalizes a man. You can't help it. You 
 start to be a man, but you become more and more a machine, 
 and pleasures are few and far between. It's like any severe 
 labor; it drags you down mentally and morally just as it does 
 physically. I wouldn't mind it so much but for the long hours. 
 Twelve hours is too long. 
 
 Allowing for a certain journalistic exaggeration this lurid 
 picture is a fairly truthful one. But in the glare of furnace 
 fires shadows loom big and black; and these have caught the 
 journalist's attention. The fierce heat, the ruddy light, the 
 tense, stripped figures 
 of the workers, in- 
 evitably suggest 
 Dants's Inferno; and 
 thoughts of bodily 
 suffering and mental 
 anguish come to the 
 onlooker in the nat- 
 ural sequence of asso- 
 ciated ideas. Greater 
 familiarity with the 
 processes of open- 
 hearth steel-making 
 would have given Mr. 
 Garland the means of distinguishing subjective impressions 
 from outside facts. If a furnace man drinks two buckets of 
 water in twelve hours, the sweat will run down his legs and into 
 his shoes ; and while his condition may not be preferable to that 
 of an heir to a peerage, it may yet be free from bodily suffering. 
 
 Copyright by S. S. M.C'lur 
 
 'More and more a machine."
 
 198 
 
 It is, however, this peerage idea and others akin to it which, 
 coming with all the glamour of the Carnegie name into such 
 works as those just described, wrought trouble for the managers, 
 and did more than any one thing to make the men obstinate 
 and unreasonable. The man who climbs down into the pit to 
 break up the red-hot slag is not himself an idealist, nor has he 
 the mental equipment to make necessary allowances for the 
 
 enthusiastic ideal- 
 ism of another. In 
 his hands Trium- 
 phant Democracy be- 
 came not the gospel 
 of a universal eman- 
 cipation it was in- 
 tended to be, but a 
 special message of 
 independence from 
 his master to him- 
 self. The exaltation 
 of labor turned the 
 laborer's head ; and he 
 gravely accepted the 
 tributes to his superi- 
 ority with which the 
 mere capitalist en- 
 dowed him. This was shown a hundred 
 times during the strike, when the men 
 
 thought that all they had to do was to let Andrew Carnegie in 
 Scotland know what his wicked managers at Homestead were 
 doing, for him to order its discontinuance by cable. 
 
 Concerning the difficulties under which the Board of Mana- 
 gers constantly labored through this tendency of their chief to 
 talk for publication, Mr. Lauder, his cousin, relates how he 
 once told the following parable to Mr. Carnegie. It is more 
 grewsome than funny, but it has a moral. 
 
 'Not an idealist.'
 
 LADDER'S GREWSOME STORY 199 
 
 Once upon a time a man collided with a street car. The 
 remains were collected and built up into some human sem- 
 blance, and placed on view in the undertaker's for identifica- 
 tion. After a while a lady drove up and claimed the corpse as 
 that of her husband ; and she ordered the handsomest funeral 
 that money could buy, with flowers, plumes, and every costly 
 accessory to mourning. As she was about to leave the estab- 
 lishment, the undertaker's assistant, in hastening to open the 
 door for her to pass, gave a jar to the slab on which the de- 
 ceased reposed; and the dead man's jaw fell open, revealing a 
 golden tooth. At sight of this the lady hurriedly counter- 
 manded the orders she had given for the imposing obsequies, 
 saying that she saw by the golden tooth that she had made a mis- 
 take and that it was not her husband after all. As she passed 
 out of the door, the disappointed undertaker turned and apostro- 
 phized the deceased. " What kind of an idiot are you anyway? 
 If you'd only known enough to keep your mouth shut ! " 
 
 Mr. Carnegie, who tells so many stories on others, laughed 
 heartily and promised to moderate his speech-making. 
 
 Coming now to the more immediate causes of the great strike 
 of 1892, mention should be made of the difficulties which pre- 
 ceded it in 1889, when the sliding scale of wages first went into 
 effect at Homestead. 
 
 Up to the summer of 1889, the wages of workers making 
 merchant steel, or steel to take the place of merchant iron, had 
 not been put upon a settled basis. At first the work was done 
 in iron-mills ; and after some discussion the same wages were 
 paid as were given for working iron. With the building of 
 mills especially to work Bessemer and open-hearth steel into 
 merchant sizes and shapes, and with their improved machinery 
 and appliances, the output per worker was very largely in- 
 creased ; and as the wages were based on tonnage, earnings had 
 grown beyond all reason. Rollers and heaters, for instance, 
 were earning from five to ten times as much as the skilled
 
 200 
 
 LABOR CONTESTS 
 
 
 mechanics who had erected the machinery on which the former 
 worked. A general reduction amounting to about twenty-five 
 per cent, was therefore proposed by the firm; and a sugges- 
 tion was made for the automatic regulation of future wages by a 
 scale which should follow, from month to month, the movements 
 of the prices received by the firm for raw steel. This was 
 naturally resisted by the tonnage men ; and both sides prepared 
 for the struggle which seemed unavoidable. 
 
 On the Carnegies' side these preparations took on some- 
 what of an opera-bouffe character. Detectives in greasy caps 
 and smutty clothes were sent into the local stores and saloons, 
 
 where they sat on barrels or 
 stood at bars listening to 
 the workmen's talk. They 
 sought lodgings in the town, 
 and talked with wives and 
 mothers ; and the gossip 
 thus picked up was sent to 
 New York, where Andrew 
 Carnegie read it surrounded 
 by the humanitarian texts 
 and quaint heraldic devices 
 in honor of the toiler with 
 which he had covered his library walls. Then he planned a 
 strenuous campaign for his partners, and went to Scotland. 
 
 The result was very much as if Napoleon had attempted 
 the conquest of the Rhine provinces from Josephine's bower in 
 the Tuileries. A hundred or more deputy sheriffs, picked off 
 the streets of Pittsburg, went up to Homestead, where they 
 were met by the strikers, relieved of their maces, caps, and coats, 
 and sent back home. And this was the comedy out of which 
 grew the tragedy of Homestead. 
 
 Henry Clay Frick was not yet in full control ; and the work- 
 men interpreted the weakness and vacillation of the company 
 as fresh expressions of the benevolent theories of " the little 
 
 f 
 
 A detective.
 
 DEPUTY SHERIFFS ROUTED 201 
 
 boss." The discomfiture of the deputy sheriffs was followed 
 by a conference with the leaders of the strikers' union, the 
 Amalgamated Association of Iron and Steel Workers of the 
 United States, and again the firm received a defeat. Mr. 
 Abbot, who conducted the negotiations for the Carnegies, pro- 
 claimed that " both sides are victors, and both sides are proba- 
 bly vanquished in minute details." The principle of the sliding 
 scale was accepted by the men; but instead of a monthly adjust- 
 ment of prices, as the Carnegies first demanded, the rate was 
 fixed for six months, and " the average price of said six months 
 shall be the basis upon which wages shall be paid for the next 
 three months, the rate to change every three months thereafter 
 based upon the average price of the preceding three months." 
 This excellent rule was nullified by numerous exceptions, which 
 led to constant bickerings and disputes for the next three years. 
 In many departments the rate of payment was left unchanged 
 with more exceptions. These exceptions, in the form of 
 foot-notes, were more numerous in the agreement than the 
 rules they were designed to elucidate. The old force of men 
 was retained ; but where places could be found for any of the 
 newcomers no objection was to be made to them. 
 
 The organ of the labor-unions, commenting on this settle- 
 ment, remarked that the Amalgamated Association now " stands 
 head and shoulders higher than ever before, for it comes out of 
 one of the most difficult crises in its history intact, with honor 
 and with the renewed confidence of the public. It is a victory 
 to the association, for thoroughly prepared as that body was to 
 pursue the contention to the bitter end, yet in the midst of hours 
 when minds were naturally inflamed conciliation prevailed, and 
 the strength and usefulness of organization were demonstrated. 
 It is a victory for the firm in that the management displayed 
 reason, substituting as they did concession for the 'ultimatum. 
 
 And verily the " concession " thus substituted was far-reach- 
 ing beyond anything ever dreamed of by the management. 
 Every department and sub-department had its workmen's " com-
 
 202 LABOR CONTESTS 
 
 mittee," with a " chairman " and full corps of officers, who, 
 fearing that their authority might decay through disuse, were 
 ever on the alert to exercise it. During the ensuing three 
 years hardly a day passed that a " committee " did not come for- 
 ward with some demand or grievance. If a man with a desira- 
 ble job died or left the works, his position could not be filled 
 without the consent and approval of an Amalgamated commit- 
 tee. Usually this committee had a man in waiting for it; and 
 the firm dared not give it to any one else. The method of ap- 
 portioning the work, of regulating the turns, of altering the ma- 
 chinery, in short, every detail of working the great plant, was 
 subject to the interference of some busybody representing the 
 Amalgamated Association. Some of this meddling was special 
 under the agreement that had been signed by the Carnegies, 
 but much of it was not ; it was only in line with the general 
 policy of the union. This is shown by the constitution of the 
 Amalgamated Association, in which, to take an instance from 
 its rules for puddling-mills, it was provided that " when a va- 
 cancy occurs in the boiling department the oldest boiler, if he 
 so desires, shall have the preference of the furnace so vacated." 
 The heats of a turn were designated, as were the weights of the 
 various charges constituting a heat. The product per worker 
 was limited ; the proportion of scrap that might be used in 
 running a furnace was fixed ; the quality of pig-iron was stated ; 
 the puddlers' use of brick and fire clay was forbidden, with ex- 
 ceptions ; the labor of assistants was .defined ; the teaching of 
 other workmen was prohibited; nor might one man lend his 
 tools to another except as provided for. And under similar 
 irksome regulations the Carnegie managers conducted their 
 business for three years, losing money on almost every ton of 
 ingots, blooms, and billets turned out. During this time some 
 of the men earned from $12 to $15 a day; and Homestead be- 
 came familiar with the sight of steel-workers being driven to 
 the mill in their carriages. Thus did their lot become compa- 
 rable to that of an heir to the peerage.
 
 Strikers arresting a news- 
 paper correspondent. 
 From Harper'' s Weekly. 
 
 CHAPTER XIV 
 THE HOMESTEAD BATTLE 
 
 THE chagrin experienced by Andrew 
 Carnegie at the unsatisfactory outcome 
 of his plans in 1889 was forcibly ex- 
 pressed in many of his characteristic 
 letters to Pittsburg during the three- 
 year term of the agreement with the 
 Amalgamated Association ; and as 
 the time approached for its revision 
 measures were taken to avoid a repeti- 
 tion of the former fiasco. What these 
 were may now be frankly stated. 
 The injudicious attempts of Mr. Carnegie's literary friends 
 to deprive him of his proper share of the honor or responsibil- 
 ity of planning the discomfiture of the Amalgamated Associa- 
 tion, joined to his own modest disclaimers, have led to much 
 mystification in the public mind concerning his real position 
 in the matter. It is time to let in the light on this much- 
 debated question. 
 
 On April 4th, 1892, nearly three months before the expira- 
 tion of the agreement with the Amalgamated Association, An- 
 drew Carnegie sent to Pittsburg the draft of a notice to the 
 Homestead employees. Mr. Frick, who was to be chairman of 
 the consolidated Carnegie Steel Company, then in process of for- 
 mation, disapproved of this notice, so that, despite Mr. Car- 
 negie's wishes, it was never issued, and has never before been 
 
 published. It is as follows : 
 
 203
 
 204 THE HOMESTEAD BATTLE 
 
 ANDREW CARNEGIE, 
 
 5 West 51st St. 
 
 New York, April 4, 1892. 
 
 INOTICE 
 
 TO EMPLOYEES AT HOMESTEAD WORKS. 
 
 These Works having been consolidated with the Edgar 
 Thomson and Duquesne, and other mills, there has been forced 
 upon this Firm the question Whether its Works are to be run 
 'Union' or 'Non-Union.' As the vast majority of our em- 
 ployees are Non-Union, the Firm has decided that the minor- 
 ity must give place to the majority. These works therefore, 
 will be necessarily Non-Union after the expiration of the pres- 
 ent agreement. 
 
 This does not imply that the men will make lower wages. 
 On the contrary, most of the men at Edgar Thomson and Du- 
 quesne Works, both Non-Union, have made and are making 
 higher wages than those at Homestead, which has hitherto been 
 Union. 
 
 The facilities and modes of working at Homestead Works 
 differ so much from those of steel mills generally in Pittsburgh 
 that a scale suitable for these is inapplicable to Homestead. 
 
 A scale will be arranged which will compare favorably with 
 that at the other works named ; that is to say, the Firm intends 
 that the men of Homestead shall make as much as the men 
 at either Duquesne or Edgar Thomson. Owing to the great 
 changes and improvements made in the Converting Works, 
 Beam Mills, Open Hearth Furnaces, etc., and the intended run- 
 ning of hot metal in the latter, the products of the works will be 
 greatly increased, so that at the rates per ton paid at Braddock 
 and Duquesne, the monthly earnings of the men may be greater 
 than hitherto. While the .lumber of men required will, of 
 course, be reduced, the extensions at Duquesne and Edgar 
 Thomson as well as at Homestead will, it is hoped, enable the 
 firm to give profitable employment to such of its desirable em- 
 ployees as may temporarily be displaced. The firm will in all 
 cases give the preferences to such satisfactory employees. 
 
 This action is not taken in any spirit of hostility to labor 
 organizations, but every man will see that the firm cannot run 
 Union and Non-Union. It must be either one or the other.
 
 CARNEGIE'S UNCOMPROMISING ATTITUDE 205 
 
 On his original draft of this notice Mr. Carnegie adds : 
 " Should this be determined upon, Mr. Potter [the superin- 
 tendent] should roll a large lot of plates ahead, which can be 
 finished, should the works be stopped for a time." 
 
 At this time an exchange of views had taken place between 
 the Amalgamated Association and the firm ; and the workmen 
 had been given till June 24th to definitely decide whether they 
 would accept a new agreement embodying certain reductions in 
 the wage- scale. Before any word had been received from the 
 workmen's organization Mr. Carnegie went abroad ; and on June 
 roth he sent a long letter setting forth his views as to the con- 
 duct and possible outcome of the negotiations. The part relat- 
 ing to these is as follows : 
 
 COWORTH PARK, 
 SUNNINGDALE, 
 
 BERKS. 
 June 10, 1892. 
 
 "As I understand matters at Homestead, it is not only the 
 wages paid, but the number of men required by Amalgamated 
 rules which makes our labor rates so much higher than those 
 in the East. 
 
 Of course, you will be asked to confer, and I know you will 
 decline all conferences, as you have taken your stand and have 
 nothing more to say. 
 
 It is fortunate that only a part of the Works are concerned. 
 Provided you have plenty of plates rolled, I suppose you can 
 keep on with armor. Potter will, no doubt, intimate to the men 
 that refusal of scale means running only as Non-Union. This 
 may cause acceptance, but I do not think so. The chances are, 
 you will have to prepare for a struggle, in which case the notice 
 [i.e. that the works are henceforth to be non-union] should go 
 up promptly on the morning of the 25th. Of course you will 
 win, and' win easier than you suppose, owing to the present 
 condition of markets," ...... 
 
 ANDREW CARNEGIE. 
 
 Notwithstanding Mr. Carnegie's desire, thus expressed on 
 June loth, that no further conference should be held with the 
 workmen, Mr. Frick, in his anxiety to avoid open conflict, met
 
 206 THE HOMESTEAD BATTLE 
 
 Mr. Weihe, the president of the Amalgamated Association, and 
 a committee of about twenty-five men from Homestead on June 
 23d. The conference lasted from ten o'clock in the morning 
 until late in the afternoon ; and resulted in Mr. Frick's making 
 an important concession on one of the three points of differ- 
 ence between the firm and the men. Neither side being willing 
 to yield on other points, the conference broke up and prepara- 
 tions were made for the struggle. 
 
 In the mean time other letters had been received from Mr. 
 Carnegie, showing his uncompromising attitude towards the 
 labor-union. Writing from Coworth Park, Sunningdale, Berks, 
 on June i/th, 1892, he underlined a passage as follows: 
 
 " Perhaps if Homestead men understand that non-acceptance 
 means Non-Union forever, they will accept." 
 
 Again on June 28th, he wrote, also from Coworth Park, 
 Sunningdale, Berks : 
 
 "Cables do not seem favorable to a settlement at Home- 
 stead. If these be correct, this is your chance to reorganize 
 the whole affair, and some one over Potter should exact good 
 reasons for employing every man. Far too many men required 
 by Amalgamated rules. 
 
 From indications, I cannot resist the conclusion that the 
 'Force Report' has not received necessary attention at Home- 
 stead, but I see you are pegging away on the right track." 
 
 The outstanding differences between the firm and its work- 
 men at this time were truly insignificant; and there is no doubt 
 they would have been promptly settled but for the fact that the 
 general rolling-mill scales were also under discussion; and the 
 Amalgamated Association feared that any concessions at Home- 
 stead would weaken them in their contest .with the iron- 
 mills throughout the country. The questions involved were 
 these : 
 
 First, a reduction in the minimum of the wage-scale. This 
 was based upon the price of 4 by 4 Bessemer billets ; the reduc- 
 tion proposed being from $25 to $22.
 
 CAUSES OF THE STRIKE 207 
 
 Second, a change in the date of the operation of the scale 
 from June 3<Dth to December 3ist. 
 
 Third, a reduction of tonnage rates at those open-hearth 
 furnaces and mills where important improvements had been 
 made and new machinery added, wfiereby the output had been 
 largely increased. 
 
 As to the justice of the company's demands there is no 
 question. The price of all the products of the Homestead mills 
 had fallen, during the term of the last agreement, from sixteen 
 to thirty-nine per cent. ; and billets had dropped from $27 a 
 ton to $22. Under the old agreement there was no decline in 
 wages after billets had got below $25 a ton, no matter how low 
 prices went ; and the steel company not unreasonably claimed 
 that as they were willing to pay proportionate wages when 
 prices rose, the men ought to accept reductions to a reasonable 
 point when prices declined. So they fixed upon $22 as a mini- 
 mum ; and Mr. Frick, at the conference of June 23d, raised this 
 to $23. The men contended for $24, and there the matter 
 ended. 
 
 Concerning the second point, the company claimed that as 
 contracts for material were generally made at the beginning of 
 the year, the price of labor ought to be fixed at the same time. 
 This was resisted by the men on the ground that if a contest 
 arose between themselves and their employers it was better 
 that it should come in summer than in winter. No doubt past 
 experience of the horrors of mid-winter strikes justified their 
 opposition to the change; but unfortunately for the consistency 
 of the men, the steel company was able to point out that in 
 some competing establishments the Amalgamated Association 
 permitted their scale to expire on December 3ist. The com- 
 pany's demand was therefore strengthened by precedents. 
 
 As to the third point, which involved the most important 
 matter of all, the reasonableness of the Carnegie demand was 
 beyond question. The proposed reduction in tonnage rates 
 applied to only three departments in the works : namely, the
 
 208 
 
 THE HOMESTEAD BATTLE 
 
 32-inch slabbing-mill, the iig-inch plate-mill, and the open- 
 hearth furnaces. An illustration will best serve to make clear 
 the point at issue. 
 
 When the scale for 1889 was signed for the 11 9-inch plate- 
 mill, it was based on rolling plates direct from ingots, and the 
 output was about 2,500 tons a month. But when the ingots 
 were first passed through the 32 -inch slabbing-mill the great 
 
 Copyright by S. S. McClure Co. 
 
 The 1 19- inch plate-mill. 
 
 machine that had developed out of Zimmer's little Universal mill 
 and then through the I ig-inch plate-mill, the tonnage of the 
 latter was more than doubled. With the sweet unreason of the 
 toiler, the men who operated the 1 1 9-inch plate-mill refused to 
 share with their employers the cost of running the slabbing- 
 mill, and demanded just as much for rolling plates from slabs 
 as they had been getting for rolling plates from ingots; insist- 
 ing, moreover, upon receiving all the benefit of the investment 
 that had gone into this million-dollar machine. Similarly in
 
 FIRST ACTS OF VIOLENCE 209 
 
 the open-hearth department. When the 1889 scale was signed, 
 this was a comparatively new business; and in three years it 
 had been vastly improved. Tonnages had increased ; labor had 
 been made easier by the substitution of machines; but the 
 benefits had mainly gone to the workmen. 
 
 Most striking of all, however, is the fact that out of over 
 3,800 men employed at Homestead, the wages of only 325 were 
 affected by the new scale. Over 3,500 men stood exactly as 
 they did before, and were satisfied. During the previous week 
 most of them had signed agreements with the company for the 
 ensuing three years ; and although 3,000 of them belonged in 
 no way to the Amalgamated Association, and, indeed, were for 
 the most part ineligible for membership in it, they broke their 
 contracts and joined the dissatisfied clique that controlled the 
 local lodges of the labor-union. It should be said, however, in 
 justice to them, that ninety-nine men in a hundred believed the 
 Carnegie Company was simply " blurring " as it had done in 
 1889; and even the hundredth man was convinced that "the 
 little boss " would never enter into a serious conflict with work- 
 men for whom he had expressed such affection. So they hanged 
 Chairman Frick and Superintendent Potter in effigy ; and when 
 f.n assistant was sent to remove the figures he was drenched 
 With streams of water from hose pipes and jeered out of the 
 i;hops. One man who ventured to express his intention of con- 
 tinuing at work was badly beaten, then conducted to the train, 
 and banished from the town. 
 
 A few days after the fruitless conference of June 23d the 
 eight lodges of the Amalgamated Association at Homestead 
 created an Advisory Committee, consisting of five delegates 
 from each lodge, with Hugh O'Donnell as chairman. The pur- 
 pose of this Advisory Committee was to take charge of the 
 strike. Its first active measure was to pass a resolution order- 
 ing the mechanics, laborers, and other employees of the mill, who 
 had made new contracts with the company, to refuse to work 
 until the Amalgamated Association was recognized and its 
 14
 
 210 THE HOMESTEAD BATTLE 
 
 terms agreed to. It being evident that the order would be 
 obeyed, the company gradually closed the several departments 
 of the works, until on the ist of July there was not a wheel 
 turning nor a furnace burning in the entire plant. 
 
 At the same time the Advisory Committee proceeded to 
 organize an army and navy for offensive and defensive opera- 
 tions, and a local government to supplant the municipal authori- 
 ties. In speaking of these proceedings the chairman of the 
 Advisory Committee used the following language : 
 
 "The Committee has, after mature deliberation, decided to 
 organize their forces on a truly military basis. The force of 
 four thousand men has been divided into three divisions or 
 watches, each of these divisions is to devote eight hours of the 
 twenty-four to the task of watching the plant. The Command- 
 ers of these divisions are to have as assistants eight captains 
 composed of one trusted man from each of the eight local 
 lodges. These Captains will report to the Division Command- 
 ers, who in turn will receive the orders from the Advisory 
 Committee. During their hours of duty these Captains will 
 have personal charge of the most important posts, i.e., the 
 river front, the water gates and pumps, the railway stations, 
 and the main gates of the plant. The girdle of pickets will 
 file reports to the main headquarters every half hour, and so 
 complete and detailed is the plan of campaign that in ten min- 
 utes' time the Committee can communicate with the men at any 
 given point within a radius of five miles. In addition to all 
 this, there will be held in reserve a force of 800 Slavs and 
 Hungarians. The brigade of foreigners will be under the com- 
 mand of two Hungarians and two interpreters." 
 
 Details of pickets were sent out upon every highway leading 
 to Homestead, or towards the steel works, instructed to permit 
 no person who could not give a satisfactory account of himself 
 to enter Homestead. A steamboat was chartered to patrol the 
 Monongahela River with an accompanying fleet of some fifty 
 rowboats, located where they would be available for an armed 
 body of men on the shortest possible notice. A system of 
 signals was adopted, flags being used in daylight, and lights 
 and Roman candles at night. A large steam-whistle was pro-
 
 STRIKERS' MILITARY ORGANIZATION 211 
 
 cured and placed upon the Electric Light Works in the borough 
 of Homestead; and a code of signals arranged so that the num- 
 ber of blasts from this whistle would be understood to indicate 
 the point at which the commanders desired their men to assem- 
 ble for battle. 
 
 The efficiency of this organization was quickly put to a test. 
 On the very first evening of the lockout intelligence was re- 
 ceived at headquarters that two hundred " black sheep " were 
 on their way to the works. In less than two minutes shrill 
 blasts from the steam-whistle conveyed the false news to the 
 waiting scouts ; and before another ten minutes had elapsed a 
 thousand men had been marshalled at the point of the expected 
 landing. Such alarms becoming inconveniently frequent, camp- 
 fires were lighted along the river-banks and more pickets estab- 
 lished; and all night long the stream was patrolled by the 
 strikers' steamer Edna, which had been furnished with special 
 steam-whistles for signalling. 
 
 On the second day a slight indication of smoke was ob- 
 served at one of the chimneys of the works ; and the Advisory 
 Committee sent a written notice to the company that the fact 
 "caused considerable excitement among our men," and that "if 
 the gas is not turned off we cannot be responsible for any act 
 that may be committed." At the same time placards were 
 printed and posted in the hotel and places of business in Home- 
 stead, saying : 
 
 All Discussion of the Wage Question 
 in This Place is Positively Forbidden. 
 By order of the 
 
 ADVISORY COMMITTEE. 
 
 In the same arbitrary manner the strikers refused to admit 
 men to the works whose presence and attention was necessary 
 to prevent deterioration and destruction of machinery.
 
 212 THE HOMESTEAD BATTLE 
 
 On July 4th the Carnegie Company served a written notice 
 upon the sheriff of Allegheny County, calling upon him to pro- 
 tect the property, and holding the county responsible for its 
 injury or destruction. The next day the sheriff accompanied 
 by deputies went to Homestead, and was escorted round the 
 works by the Advisory Committee, who pointed out their 
 "guards," and asked the sheriff to give them an official status 
 by making them his deputies. The astonished official declined 
 the request and returned to Pittsburg. The same day he sent 
 up a dozen deputies, who were met by the strikers and promptly 
 hustled out of town. The Advisory Committee aided their 
 departure by conveying them across the river in their steamer 
 and putting them in the trolley-cars for Pittsburg. A sheriff's 
 proclamation against unlawful acts was torn down and the bill- 
 poster escorted out of town. Such were the results of the at- 
 tempts of the county officials to safeguard the works. 
 
 The same night two barges, containing some three hundred 
 watchmen hired by the Carnegie Steel Company through Pin- 
 kerton's Detective Agency and destined for Homestead, were 
 towed up the river from a point a few miles below Pittsburg. 
 The men were accompanied by a deputy sheriff ; and arrange- 
 ments had been made to deputize them, if circumstances arose 
 to require it. The barges were fitted up with sleeping bunks 
 and cooking arrangements ; and, besides a store of provisions, 
 they carried several cases of firearms and ammunition. In 
 other respects they were just like any of the other barges used 
 on the river. In spite of all precautions to keep the character 
 and destination of the boats secret, they were observed by a spy 
 of the Advisory Committee as they passed under the Smithfield 
 Street bridge, Pittsburg, soon after midnight ; and a warning 
 was promptly telegraphed to Hugh O'Donnell. Similar notice 
 was sent from Lock No. i, some three miles below Homestead. 
 At once the preconcerted signal was given ; and the sleeping 
 town was roused by the shrieks of the committee's steam- 
 whistle. Men, women, and children tumbled into the streets
 
 THE ARRIVAL OF THE PINKERTONS 213 
 
 in wild disorder and hurried towards the river-bank. Many 
 openly carried guns, rifles, and revolvers ; and others armed 
 themselves with staves torn from the garden fences as they ran 
 along. 
 
 At the river all was dark and silent. A mist hung over 
 the water and dimmed the glare of the electric lamps and 
 fires of the Carrie furnaces across the stream. In a little 
 while the lights of the barges were sighted; and the strikers' 
 steamer Edna gave the alarm by blowing her whistle. Pistols 
 were also fired from numerous little boats and by dozens of 
 pickets along the bank. Every steam- whistle in town joined 
 in the shrill demonstration ; and the slumbering Pinkertons 
 turned out of their bunks at the sound and started to break 
 open the cases of rifles to defend themselves. Only a dozen 
 were at first allowed to have the rifles. Thus the barges, pelted 
 by the strikers' bullets, passed the town of Homestead; while 
 the shouting crowds ran along the banks, keeping pace with 
 them and firing as often as they could reload their arms. One 
 bullet passed through the pilot-house of the Little Bill, the tow- 
 ing steamer, and others rattled against the sides of the barges. 
 
 When the people on the banks reached the steel works they 
 were stopped for a moment by the wooden fence which sur- 
 rounded the place ; but a section of this was soon torn down, 
 and the crowd swept through the gap, arriving at the pumping 
 station in time to see the barges thrust against the shore. 
 
 By this time the dawning light of a new day was breaking 
 upon the scene. As the gangplank was shoved ashore from the 
 barges, the crowd rushed down the slope to the water's edge 
 with loud cries and threatening gestures. One of them, a 
 young fellow, who, curiously enough, was a religious leader in 
 the community, threw himself flat upon the gangplank, as if 
 daring the Pinkertons to march over his prostrate body. Dur- 
 ing the struggle to push the fellow aside a shot was fired, fol- 
 lowed first by a scattering volley from the crowd, then by the 
 return fire of a dozen of Pinkertons. The fusillade lasted for
 
 214 
 
 THE HOMESTEAD BATTLE 
 
 a couple of minutes, during which most of the crowd on shore 
 scrambled up the bank in terror and confusion, and took refuge 
 behind the piles of steel in the yards. During this exchange 
 of shots two of the strikers were killed and several wounded. 
 A number of the Pinkerton men were also injured, one of them 
 fatally. 
 
 After the people on shore had retreated behind the piles of 
 metal and the Pinkerton men had taken refuge inside the barges, 
 
 The Homestead Battle. 
 
 From Frank Leslie s Illustrated Weekly. 
 
 the firing ceased; and a short conference was held between the 
 leaders on shore and the chief of the watchmen. The latter 
 explained that he and his men had been sent there to take 
 possession of the works to guard them for the company, and 
 that they would certainly enter the place, using force if need 
 be. The strikers defied the leader of the watchmen, saying 
 that before he entered those mills he would " trample over the 
 dead bodies of 3,000 honest workingmen. "
 
 DYNAMITE AND FIRE-RAFTS 215 
 
 A couple of hours later a number of watchmen stepped 
 ashore from the barges, and were met by a rattling volley from 
 the strikers, who had erected barricades of steel billets and 
 beams in the mill yard. The Pinkertons rapidly sought shelter 
 in the boats again; and then returned the fire through windows 
 and port-holes. 
 
 Soon after nine o'clock the mill workers secured a small 
 cannon ; and with this they opened fire from the opposite side 
 of the river. During the second skirmish the tugboat Little 
 Bill, which was the only means of moving the barges, went up 
 the river with the dead and wounded ; and when she returned 
 an hour or two later to haul away the two barges, she was sub- 
 jected to a merciless fusillade. One of her crew was killed and 
 several wounded; and the pilot was obliged to lie down to avoid 
 being shot, as the boat drifted through the gauntlet of fire and 
 so escaped to Pittsburg. Thus, left helpless in their stranded 
 barges, the wretched watchmen spent the long sultry day a 
 day in which American workmen seemed inspired with the spirit 
 of the French Reign of Terror. There was no horror conceived 
 
 'i, 
 
 in that barbaric time that had not its counterfeit presentment 
 at Homestead. Oil was pumped onto the boats and spread 
 upon the river, to burn up the imprisoned Pinkertons. Burn- 
 ing rafts were floated down to them. Dynamite was hurled 
 upon the barges to break them open that sharpshooters might 
 more readily pick off some crouching figure. A car, loaded 
 with oil, was set on fire and run down an inclined track towards 
 the barges, in the hope that some of the burning stuff would 
 reach them. Natural gas was directed from a main near by so 
 as to envelop the boats, and rockets were fired into it to explode 
 it. The cannon on the opposite bank, soon re-enforced by a 
 second one, played upon the barges and their helpless occupants ; 
 and riflemen from a hundred points of vantage potted any un- 
 wary sufferer who ventured near a window or other opening for a 
 gasp of fresh air. But as if to keep the name of the American 
 workman from everlasting infamy, every diabolical effort failed.
 
 2l6 
 
 THE HOMESTEAD BATTLE 
 
 The dynamite exploded harmlessly; the oil-covered waters 
 flowed away from the barges ; the burning car stopped short in 
 its course; the fire of the cannon was wild, and it was stopped 
 after a shot had taken off the head of a striker. But the hor- 
 rors that were achieved were enough to give this 6th of July a 
 place of its own in the history of Western Pennsylvania. A 
 white flag was shown on the barges, and greeted with shouts of 
 
 Shooting at the Pinkerton guards from behind barricades of steel. 
 
 From the London Daily Graphic. 
 
 " No quarter," and a volley of bullets. A man was seen to fall 
 near the flag ; and the shouts of anger changed to cheers. Every 
 eminence about the works, the long trestle and the new station 
 in the mill, were black with vociferous crowds. The adjoining 
 hills were lined with watchers ; and everywhere the thirst of 
 human blood was manifest. No voice was raised in pity; no 
 word was spoken for peace. From Pittsburg, and even from 
 the Edgar Thomson works at Braddock, armed re-enforcements 
 marched to help the strikers, who were already fifteen to one, 
 and sheltered by fortifications of solid steel. The wretched
 
 SAVAGERY OF THE MOB 217 
 
 watchmen, cooped up in stranded boats, had neither the power 
 to advance nor to retreat. 
 
 The events of this dreadful day have been told by Myron R. 
 Stowell, an eye-witness, in a little book full of sympathy for the 
 workmen. For this reason his story cannot be impugned on 
 the ground of prejudice against the strikers. He says : 
 
 " Many a battle has gone down in history where less shoot- 
 ing was done and fewer people were killed. There were hun- 
 dreds of men, well armed, thirsting for the lives of others in the 
 boat, while thousands of men and women stood just out of range 
 and cheered them on. Each crack of a rifle made them more 
 blood-thirsty and each boom of the cannon more eager for the 
 blood of the officers. One of the strikers remarked : 
 
 'There are but two weeks between civilization and barba- 
 rism, and I believe it will take only two days of this work to 
 make the change.' 
 
 Indeed, it looked as if the veneering of gentility had al- 
 ready been cracked. 
 
 Then another shot and another cheer told that somebody 
 had been hit. The Pinkertons were too badly scared to make 
 any effort to shoot, and were crowded like sheep into the barge 
 which lay farthest from shore. Fresh ammunition and arms 
 had arrived from Pittsburg for the strikers and the men bent 
 harder to their tasks. They worked nearer the river that their 
 fire might be more deadly. The workers could be seen drag- 
 ging their bodies like snakes along the ground to where they 
 could get a better shot. The cannon would again roar, but the 
 shot would land in the water above the boat. Once a piece of 
 one of the doors fell with the shot. Several of the imported 
 officers were revealed, and a score of shots were fired in quick 
 succession. Some one must have fallen, for cheer on cheer of 
 triumph went up from thousands of throats. At every shot of 
 the cannon thereafter a volley of shots was heard from the 
 sharpshooters, who had seen some one on the boat. They only 
 shot when they saw something, and every crack of a rifle meant 
 an attempt on a human life. 
 
 At one o'clock there was a wild commotion at the new sta- 
 tion. A tall, brawny workman waved two sticks of dynamite 
 high above his head. By his side was a basket full of the 
 deadly explosive. The excited gathering, that a moment before 
 had been wild, was silent, and listened. His voice was loud 
 and distinct. He said :
 
 218 THE HOMESTEAD BATTLE 
 
 'Men of Homestead and Fellow Strikers: Our friends 
 have been murdered our brothers have been shot down before 
 our eyes by hired thugs ! The blood of honest workmen has 
 been spilled. Yonder in those boats are hundreds of men who 
 have murdered our friends and would ravish our homes ! Men 
 of Homestead, we must kill them ! Not one must escape alive ! ' 
 
 'Aye, aye, aye!' shouted a half thousand voices. Then 
 the Herculean workman continued : 
 
 'The cannon has failed to sink the boats the oil has failed 
 to burn them. Who will follow me? These bombs will do the 
 work ! ' 
 
 As he spoke he flourished the dynamite. A score of men 
 raised their clubs, and regardless of the fact that they were 
 within the range of the Pinkerton rifles, followed him. They 
 ran in their haste to take human life. They were not savages, 
 but men of families, who, perhaps a few hours before, had held 
 infants on their knees or kissed their wives farewell. They 
 were good, strong men, wrought up by the sight of blood, and 
 ready to take the lives of those who threatened them and theirs. 
 
 With their penknives they scooped up holes for the car- 
 tridges and fuse. The latter was very short it would burn 
 quickly. The crowds could see them light the matches and hold 
 the messengers of death until they burned closely. Then, with 
 strong right arms drawn until every muscle showed like a whip- 
 cord, they let fly, and the explosions were cheered by the excited 
 men and women. The distance was long, and the bombs had 
 to be thrown from behind some shelter, and many of the mis- 
 siles fell short of the mark, but when one landed on the roof 
 cheer upon cheer went up. One man had crawled down on the 
 structural iron, and then, by making a throw of nearly a hun- 
 dred feet, struck the boat. The front end heaved and a few 
 boards flew. He lighted another fuse and another stick of 
 dynamite. It described a semi-circle in the air, leaving a trail 
 of smoke behind. It was going to land squarely on top of the 
 Monongahela, but instead of striking the roof it splashed into 
 a bucket of water. It sizzled for a moment and then went out 
 without exploding. It had hardly died, however, when another 
 from the pump-house fell on the roof. It lay there smoking a 
 moment while the strikers prayed it might wreck the craft. 
 There was an explosion, and a hole was torn in the roof. It 
 was not then known whether it killed anybody inside, but when 
 the boards flew up a gondola hat went flying into the air. 
 Another bomb was thrown into the bow of the boat. The clear- 
 ing smoke showed a door was gone. Human forms were seen
 
 SURRENDER OF THE WATCHMEN 219 
 
 within, which was a sign for the sharpshooters to do some exe- 
 cution. At i :35 o'clock several men went out on the bow of 
 the boat to pick up their dead and wounded companions. There 
 were a half-dozen shots and two more men fell. Then came 
 more curses for the firm and additional cheers of victory. 
 
 Another stick of dynamite fell five minutes later, and in 
 three minutes more another tore off a part of the planks. Then 
 the men drew closer and their work became more deadly. 
 
 Then it was decided to throw oil again and burn the boat. 
 At 12 :io o'clock the hose carriage belonging to the city, and 
 half a dozen barrels of lubricating oil were brought to the water 
 tanks, together with a fire engine, but there was great difficulty 
 in getting it to work. In the meantime a new supply of dyna- 
 mite had arrived. The boxes were knocked open and the men 
 drew out the explosives as unconcernedly as they would have 
 handled their dinners. Then they made another rush for the 
 barges and there was more sharp firing. 
 
 About this time a coal steamer's whistle was heard and the 
 sharpshooters stampeded to the rear for an instant, thinking 
 another corps of deputies had arrived. The alarm was false, 
 and they soon resumed operations. Then they got the oil to 
 flowing, but, as in the morning, it circled around the boats and 
 refused to burn. 
 
 The fight still continued and more attempts were made to 
 burn the boats and the three hundred Pinkertons within. It 
 was four o'clock when the giant form of President William 
 Weihe, of the Amalgamated Association, appeared. Hundreds 
 followed him into one of the mills. He tried to address the 
 men but they refused to listen to him. President-elect Garland 
 was there also, but the cries of 'Burn the boats, kill the Pinker- 
 tons, no quarter for the murderers,' drowned his voice. ". 
 
 Towards five o'clock a fresh attempt at surrender was made 
 by the men in the barges. Again a white flag was displayed. 
 Fortunately at this moment the leaders of the strikers were con- 
 ferring as to what measures should next be taken ; and the Pin- 
 kertons' signal suggested a way of ending a desperate situation. 
 O'Donnell, chairman of the Advisory Committee, stepped down 
 the embankment to receive the message.of peace. The spokes- 
 man of the imprisoned wretches offered to surrender on condi- 
 tion of protection from mob violence. This being agreed to, 
 the doors were flung open, and the victorious strikers crowded
 
 220 THE HOMESTEAD BATTLE 
 
 into the barges. The reporters who followed them found one 
 dead and eleven wounded watchmen. The rest were disarmed 
 and marched out, while the crowd swarmed over the boats for 
 loot. Cases of provisions were broken open and the contents 
 distributed among the women and children ; bedding and every 
 portable thing was taken away. Then the barges were set on 
 fire; and the strikers turned to escort their prisoners to a pub- 
 lic hall in town. One by one, with bared heads, the latter de 
 
 The burning barges, the evening of the surrender. 
 
 scended the gangplank, climbed up the incline to the mill yard, 
 and across it to the public road ; and never did captives suffer 
 more in running a gauntlet of redskins. For nearly a mile the 
 watchmen walked, ran, or crawled through a lane of infuriated 
 men, women, and children ; and at every step they were struck 
 with fists, clubs, and stones. Their hats, satchels, and coats 
 were snatched away from them; and in many cases they were 
 robbed of their watches and money. Not a man escaped injury. 
 One of them, Connors, unable to move and defend himself, was 
 deliberately shot by one of the strikers and then clubbed.
 
 CRUELTY TO CAPTIVES 
 
 221 
 
 Another, named Edwards, also wounded and helpless, was 
 clubbed by another striker with the butt end of a musket. Both 
 of these men died ; and another became insane and committed 
 
 The attack on the surrendered guards. 
 
 from Leslie's Weekly. 
 
 suicide as a result of the fearful beating received after surren- 
 der. About thirty others were afterwards taken to the hospital 
 with broken arms and disjointed ankles, shattered noses, gouged 
 eyes, bruised heads, and injured backs.
 
 222 THE HOMESTEAD BATTLE 
 
 At midnight a special train went to Homestead in charge of 
 the sheriff of Allegheny County, and took the Pinkerton men 
 to Pittsburg for safety. The day's casualties were ten men 
 killed and over sixty wounded. Several died later. 
 
 Flushed with victory the strikers now put the borough of 
 Homestead into a state of siege. All strangers were excluded, 
 including a party of prominent railway and state officials who 
 chanced to be passing through Pittsburg. Many citizens were 
 arrested and taken before the strikers' committee, just as in the 
 early days of the French revolution. Hotel keepers were noti- 
 fied not, to lodge or accommodate newspaper reporters whose 
 accounts were not favorable to the insurrectionist government. 
 Telegraph operators were compelled to exhibit to the self-con- 
 stituted authorities private messages that were left for transmis- 
 sion over the' wires of the public companies, so that it might be 
 ascertained if anything detrimental to the dignity or the inter- 
 ests of the Advisory Committee was being sent out. Several 
 journalists were arrested and held until satisfactory evidence 
 could be obtained as to their identity; and all reporters were 
 required to have credentials and passports from the Advisory 
 Committee, and to wear a conspicuous badge of the Amalga- 
 mated Association to insure their personal safety. Some re- 
 porters who had incurred the strikers' ill will by publishing 
 reports unfavorable to the workmen were arrested, and com- 
 pelled, hatless and coatless, to leave the town at midnight afoot, 
 the privilege of securing even a private conveyance being denied 
 them. And while these conditions obtained, a delegation of 
 strikers was at Harrisburg, assuring the governor of Pennsyl- 
 vania that perfect peace and tranquillity prevailed in the bor- 
 ough of Homestead ; that the civil authorities were respected 
 and obeyed; and that the sheriff's call for troops should be 
 disregarded. 
 
 It chanced, however, that the governor's own representative, 
 sent to Homestead for the purpose of reporting on the condi- 
 tion of affairs, was arrested by the strikers and roughly escorted
 
 ARRIVAL OF THE NATIONAL GUARD 223 
 
 out of town. He returned, and again he was hustled away. 
 This happened three times. Such a practical illustration of 
 the negation of the rights of citizens sufficed to convince the 
 governor of the need for state troops; and on July loth he 
 issued an order to Major-General Snowden to call out the en- 
 tire division of the National Guard, numbering some 8,000 men, 
 and mass them at Homestead to aid the sheriff of Allegheny 
 County. Two days later the troops arrived ; the open reign of 
 terror at Homestead came to an end ; and the Carnegie officials 
 were put in possession of their property.
 
 CHAPTER XV 
 ATTEMPTED ASSASSINATION OF MR. FRICK 
 
 BEFORE the country had recovered from the 
 thrill of horror which succeeded the Home- 
 stead battle, an attempt was made to murder 
 Mr. Frick ; and the bloody details of the 
 assault were cabled to the ends of the earth, 
 bringing fresh disgrace upon the unhappy town 
 of Homestead. On Saturday, July 23d, a Russian 
 anarchist shot and stabbed Mr. Frick while he was 
 seated in conversation with his associate, Mr. Leishman. This 
 man had made several previous visits to the Carnegie offices, 
 where he represented himself as the agent of a New York em- 
 ployment bureau. Once he had a brief interview with Mr. 
 Frick, who told him he thought there would be no need for the 
 services of any agency, as the managers were making arrange- 
 ments by which they hoped to get their old employees back. 
 
 On the day mentioned this man called again and sent in his 
 card to Mr. Frick, who had just returned from lunch and had 
 dropped into a chair at the end of the flat-topped desk at which 
 he usually worked. It was not his usual seat; and he had 
 moved into it to be nearer Mr. Leishman, who sat diagonally 
 opposite. Mr. Frick had swung round in his chair so that his 
 side was turned to the door through which the boy brought the 
 card. Before the boy could regain the front office with Mr. 
 Frick's message, the man stepped through the swinging door 
 and glanced quickly around. Mr. Frick looked up in surprise 
 at the sudden entry of a stranger, and saw the man make a 
 quick movement towards his hip pocket. Realizing the mean- 
 ing of the movement, Mr. Frick sprang to his feet. At the 
 
 224
 
 A DESPERATE STRUGGLE 225 
 
 same moment the fellow had drawn and fired a revolver with 
 lightning rapidity, and the bullet, after passing through the 
 lobe of the left ear, struck Mr. Frick in the neck. The shock 
 sent him to the floor; and as he lay on the carpet the assassin 
 fired a second time, and again the bullet struck Mr. Frick in 
 the neck. 
 
 While this was happening Mr. Leishman had jumped from 
 his seat and was running round the long desk to get at the fel- 
 low. He reached him just as he fired a third time, and either 
 seized or knocked up his hand, so that the shot went wild, the 
 bullet striking the wall near the ceiling. Mr. Leishman cour- 
 ageously grappled with the fellow, and while he was wrestling 
 with him for the revolver, Mr. Frick struggled to his feet and 
 grasped his assailant from behind. In this way the three men 
 swayed violently to and fro for a few thrilling moments, and 
 then all three fell with a crash against the low wall just under 
 the window overlooking Fifth Avenue, the Russian underneath. 
 A crowd, attracted by the shots, stood on the opposite side of 
 the street ; and seeing Mr. Frick struggling near the win- 
 dow, thought he was trying to raise it to give an alarm, or to 
 escape from some enemy invisible from the sidewalk. This 
 occasioned one of the many erroneous reports sent out to the 
 newspapers. 
 
 The fall had loosened Mr. Frick's grasp of the fellow's left 
 arm ; and while Mr. Leishman still held on to the right hand and 
 the revolver, the Russian drew a dagger made from an old file 
 and plunged it again and again into Mr. Frick, who, bending 
 over him and weak from his exertions and wounds, was unable to 
 avoid the blows. First the dagger was thrust into his hip, just 
 behind the head of the femur; then it struck him in the right 
 side and glanced along one of the ribs ; and a third blow tore 
 open the left leg just below the knee. Despite his terrible in- 
 juries Mr. Frick again threw himself on the ruffian, and finally 
 pinioned his arm to the floor. Then the clerks, who had watched 
 the struggle from the door as if spellbound, rushed in and 
 15
 
 226 ATTEMPT ON MR. PRICK 
 
 secured the anarchist. The revolver and dagger were torn from 
 his grasp and he was dragged to his feet. Covered with the 
 blood that had flowed from Mr. Prick's wounds, he was a sorry 
 looking object; and Mr. Leishman looked almost as bad. The 
 latter, who had so bravely seized the smoking revolver a few 
 moments before, and heard the trigger snap even a fourth time, 
 now collapsed utterly, and had to be carried from the room. 
 Mr. Frick, the only calm person present, leaned against the 
 desk and watched the last ineffectual struggles of the wretch 
 who had tried to kill him. 
 
 Thrown at last into a chair and held there, the Russian ap- 
 peared to be mumbling something, and all but Mr. Frick were 
 too excited to notice it. At this moment a deputy sheriff 
 rushed in with a drawn revolver and made as if he would shoot 
 the man. Mr. Frick interposed. " No, don't kill him," he 
 said; " raise his head and let me see his face." As they did so 
 it was seen that the man's apparent mumbling was caused by 
 his chewing something ; and on his mouth being forced open, 
 a cap containing fulminite of mercury, such as anarchists had 
 previously used to commit suicide, was found between the des- 
 perate fellow's teeth. Even when overcome by numbers, he 
 still sought to carry out his devilish purpose by an explosion 
 which would involve Mr. Frick and a dozen innocent men in 
 his own destruction. 
 
 By this time the office was filled with an excited crowd. A 
 German carpenter, who had been at work in the building, broke 
 through the throng and aimed a blow at the Russian's head 
 with his hammer. It missed him. Then arose cries of " Shoot 
 him!" "Lynch him !" and amid all the excitement no one 
 seemed to give a thought to Mr. Frick, who still stood leaning 
 against the desk, with the blood streaming from his many 
 wounds. A number of policemen who had been attracted by 
 the noise quickly surrounded the assassin to protect him, and 
 led him from the room. Then the others turned to Mr. Frick. 
 A score of hands hastened to his support ; and he was gently
 
 MAGNIFICENT COURAGE 227 
 
 placed on a lounge in an inner room, while hurried calls were 
 sent for physicians. 
 
 While the blood-sodden clothes were being removed, and 
 before the physicians arrived, Mr. Frick talked calmly about the 
 assault, and commented with a smile on the assassin's amazing 
 muscular power ; nor did his courage fail him when the sur- 
 geons began probing for the bullets. At first the doctors said 
 there was little hope of recovery. The first bullet had entered 
 the side of the neck, cutting the lobe of the ear, and had ranged 
 backwards and downwards until it almost reached the shoulder. 
 The second bullet had followed a similar course, but from right 
 to left. 
 
 While the doctor was probing in the wounds Mr. Frick 
 calmly directed him as to the place where the bullet would be 
 found, and then as the instrument reached it, he remarked : 
 "There! that feels like it, doctor." And while the probing, 
 cutting, and sewing up of the wounds were going on, he dictated 
 a cablegram to Mr. Carnegie, telling him that he was not 
 mortally injured, and he signed several letters which he had 
 previously dictated. He also completed the arrangements 
 which he had begun earlier in the day for a loan; and signed 
 all the necessary papers. The doctors said that it was the 
 most magnificent exhibition of courage they had ever seen. 
 
 Most touching of all, and even more characteristic of the 
 man, was his manner of greeting Mrs. Frick on his arrival 
 home a few hours later in the ambulance. Mrs. Frick had been 
 critically ill ; and the excitement of the Homestead battle had 
 rendered her condition precarious. Mr. Frick's first thought 
 ufter the attack was of his wife; and he gave very emphatic 
 orders that no alarming reports be permitted to reach her. 
 Then he sent two of her relatives who had hastened to the 
 office on hearing of the assault, to break the news to her gently, 
 and to let her understand that his injuries were trifling. So 
 well did they succeed that, as Mr. Frick was carried past her 
 bedroom door, she was in no way alarmed. Telling the stretcher
 
 228 ATTEMPT ON MR. FRICK 
 
 bearers to turn his head around so that he could speak to his 
 wife, Mr. Frick addressed her by name, and called out a cheery 
 inquiry after the youngest child. Then he assured her that he 
 was not seriously hurt and would be in to see her before very 
 long. 
 
 The fanatic who made this ferocious attempt on Mr. Prick's 
 life had nothing to do with the strikers. He was of the usual 
 type of European anarchist ; and he had been only a few years 
 in the country. He went from New York to Pittsburg specially 
 to kill Mr. Frick. When asked why he selected Mr. Frick in 
 particular, he exclaimed in astonishment : " Why, what would 
 the company do without Mr. Frick ? Carnegie is thousands of 
 miles away, and he would not dare to oppose the men as Frick 
 has done." So here again was an echo of Carnegie idealism. 
 As for the undiscriminating criminal himself, he was sentenced 
 to twenty-one years in the penitentiary for the assault, and one 
 year in the workhouse for carrying concealed weapons. 
 
 The news of the attempted assassination created intense ex- 
 citement at Homestead, where it was bulletined a few minutes 
 after the occurrence. Crowds gathered at every street corner 
 and in front of the telegraph stations and newspaper offices ; 
 and whenever a man received a message hundreds crowded 
 around him to hear the latest news. The strikers heard of the 
 attempt with mixed feelings. The more ignorant workmen 
 rejoiced openly. " Frick's dead by this time and we've won 
 the strike," shouted one. " The Carnegie Company don't amount 
 to shucks without Frick," commented another, as he joyfully 
 predicted the early collapse of the firm's resistance. But at the 
 headquarters of the labor-union the news was received with dis- 
 may. While the leaders believed the strikers blameless of this 
 particular horror, there already had been so much to set the 
 public against them that they feared the discredit of this fresh 
 act of violence would fall on them. And their alarm was jus- 
 tified. From one end of the country to the other, and across 
 the oceans from distant lands, swept a wave of fierce indigna-
 
 THE ROGUE'S MARCH 229 
 
 tion against the strikers and denunciation of their methods. 
 Innocent of this particular crime, the strikers had to bear the 
 disgrace of it. 
 
 On Mr. Frick himself the incident seemed to have no effect 
 except for the pain and inconvenience it occasioned. His sorely 
 wounded body suffered ; but while nurses and attendants were 
 prostrate under the intense heat of July, the patient made no 
 complaint. From the first day he insisted on being kept in- 
 formed of the progress of events. Newspapers, letters, and 
 telegrams were read to him ; and he dictated answers to many 
 of the latter. His grasp on the strike situation was never 
 relaxed for a moment. No move was made by the men that was 
 not instantly telephoned to him; and nothing was done by the 
 managers that did not emanate from him, or that was not previ- 
 ously submitted for his approval. Except that the contest was 
 now conducted from Mr. Frick's Homewood residence instead 
 of from his Fifth Avenue office, no difference was to be seen in 
 the situation. 
 
 By this time the scene of disorder near Pittsburg had be- 
 come the centre of interest for the whole world. No other war 
 was being fought; no other event of universal interest was 
 taking place ; and the attention of the people of every land was 
 focussed on the beautiful spot on the Monongahela which John 
 McClure had so infelicitously named Amity Homestead. In 
 every country columns were daily printed describing the hap- 
 penings at the works and the military camp; and imaginary 
 scenes at the bedside of Mr. Frick found their way into news- 
 papers printed in many languages. 
 
 As if to keep this interest from flagging, a young soldier 
 in the camp called for three cheers for Frick's assassin. His 
 outraged commander immediately had him triced by the thumbs 
 to a tent-pole and then drummed him, with his head half shaved, 
 out of camp to the tune of the Rogue's March. The fellow had 
 swallowed some tobacco juice while undergoing his punishment, 
 and this had made him sick. So the sensation-loving journals
 
 230 ATTEMPT ON MR. FRICK 
 
 exploited the incident as a brutal punishment; and this ran 
 round the world as a valuable item of news. 
 
 There was one spot, however, where these items of news 
 did not readily penetrate ; and that was Rannoch Lodge, on 
 beautiful Loch Rannoch. Here, thirty-five miles from the 
 nearest railway and telegraph station, Andrew Carnegie, in ac- 
 cordance with plans previously made, denied himself to report- 
 ers and refused to answer telegrams or letters relating in any 
 way to Homestead. Having delegated his authority to Mr. 
 Frick, he knew that the measures they had jointly planned 
 would be carried out to the letter, despite the efforts of anarch- 
 ists or the protests of politicians of a less ruddy hue. And so 
 he went fishing ; and the London papers sought in vain to get 
 an expression of opinion from him either on the Homestead 
 battle or the attempt on Mr. Prick's life. 
 
 In the account of the Homestead strike which Mr. W. T. 
 Stead published in 1900, after, as he claims, "talking on the 
 subject with Mr. Carnegie this autumn," he repeats the story 
 that the labor leaders " had applied to Mr. Frick for Mr. Car- 
 negie's address in order to telegraph him Mr. Carnegie being 
 at that time absent in Scotland, and his address not being 
 known to any one in this country except his business associates. 
 Mr. Frick refused to give the address; whereupon Mr. Reid 
 obtained it from our Consul-General in London, John C. 
 New, and then cabled Mr. Carnegie, in which he accepted 
 the terms proposed by Mr. O'Donnell, and urged that Mr. 
 Frick be seen immediately with a view to effecting the settle- 
 ment." 
 
 This statement is so incoherent that it is not clear who 
 "accepted the terms proposed by Mr. O'Donnell." The idea 
 sought to be conveyed is that it was Mr. Carnegie who ac- 
 cepted the terms of the strikers, since no one else mentioned in 
 this strange narrative had anything to accept. To make this 
 matter clear once for all Mr. Carnegie's cablegrams are here 
 given as received in Pittsburg :
 
 CARNEGIE'S CABLEGRAMS 231 
 
 RANNOCH, July 28, 1892. 
 
 We have telegram from Tribune Reid through high official 
 London Amalgamated Association reference Homestead Steel 
 Works. The proposition is worthy of consideration. Replied 
 "nothing can be done. Send H. C. Frick document. " You 
 must decide without delay. Amalgamated Association evidently 
 distressed. 
 
 The next day this was modified by the following: 
 
 RANNOCH, July 29, 1892. 
 
 After due consideration we have concluded Tribune too old. 
 Probably the proposition is not worthy of consideration. Use- 
 ful showing distress of Amalgamated Association. Use your 
 own discretion about terms and starting. George Lauder, 
 Henry Phipps Jr., Andrew Carnegie solid. H. C. Frick forever! 
 
 And in his answer to Mr. Whitelaw Reid, Mr. Carnegie 
 cabled that no compromise would be considered by him, and 
 that he would rather see grass growing over the Homestead 
 works than advise Mr. Frick to yield to the strikers. 
 
 The rest of the story quoted by Stead is fairly accurate. 
 " Mr. Frick was obdurate. He refused to consider the matter 
 at all, denounced the strikers as assassins, and declared that if 
 Carnegie came in person, in company with President Harrison 
 and the entire Cabinet, he would not settle the strike. " 
 
 In regard to Stead's complaint that Mr. Carnegie's address 
 in Scotland was not given to the strikers, he should have known, 
 after he had "talked on the subject 'with Mr. Carnegie this 
 autumn," that the latter had selected such an out-of-the-way 
 residence as Rannoch Lodge for the very purpose of eluding 
 the appeals of the workmen which it was foreseen his speeches 
 and writings would call forth. And his silence during all the 
 exciting happenings at Homestead was in accordance with plans 
 made long before. 
 
 Mr. Carnegie's consistency at this time provoked much com- 
 ment. Two days after the assault on Mr. Frick, the St. James' 
 Gazette reported that " Mr. Carnegie has preserved the same
 
 2 3 2 ATTEMPT ON MR. FRICK 
 
 moody silence towards all the members of the American Lega- 
 tion here ; and all other persons in London with whom he is 
 usually in communication have not heard a word from him since 
 the beginning of the troubles at Homestead." The publica- 
 tion went on to say that " the news of the shooting of Mr. Frick 
 has intensified the feeling of all classes against Mr. Carnegie. 
 A large meeting of the labor representative leagues was held in 
 this city yesterday, at which a resolution was adopted strongly 
 condemning the course of Mr. Carnegie in regard to the Home- 
 stead troubles. The resolution added that should Mr. Carnegie 
 insult British workmen by further philanthropic efforts in their 
 behalf, it was hoped that they would show their detestation of 
 him by contemptuously refusing to accept any offers of help 
 from him." 
 
 Now became prominent the contrast between Mr. Carnegie's 
 idealistic utterances and the doings at Homestead. News- 
 papers in every country and of every political color drew atten- 
 tion to the startling discrepancy; and not a few of them saw in 
 the violence of the strikers the logical outcome of the Carne- 
 gie commandment : " Thou shalt not take thy neighbor's job." 
 The host of critics, that arose with angry clamor, discovered 
 in Mr. Carnegie's practical philanthropy but the expression of 
 an unmitigated egotism; and many brutal and insensate taunts 
 were flung at him as he lay silent and self-contained in his 
 Highland shooting-lodge. It was altogether a pitiful exhibi- 
 tion. Even the London Times could not forego the chance to 
 fling a sneer. Commenting on the assault on Mr. Frick, the 
 writer concludes his editorial thus : 
 
 " Mr. Carnegie's position is singular. The avowed cham- 
 pion of trades-unions now finds himself in almost ruinous con- 
 flict with the representatives of his own views. He has prob- 
 ably by this time seen cause to modify his praise of unionism 
 and the sweet reasonableness of its leaders. Or, are we to as- 
 sume that this doctrine is true in Glasgow but not in the United 
 States, or that it ceases to be applicable the moment Mr. Car- 
 negie's interests are touched? "
 
 OUTBURST OF PUBLIC ANGER 233 
 
 A day or two later the representative of the Associated 
 Press reported that he had driven from Kingussie to Rannoch 
 Lodge, " and made repeated efforts to obtain an interview with 
 Mr. Carnegie in order to obtain a statement from him of his 
 views regarding the troubles at Homestead, Pa., and more espe- 
 cially concerning the shooting of H. C. Frick, " but "his mis- 
 sion then proved fruitless. This morning, however, he was 
 more successful," and Mr. Carnegie, "after persistent inter- 
 rogation by the caller, finally said, 'Well, I authorize you to 
 make the following statement : I have not attended to business 
 for the past three years, but I have implicit confidence in those 
 who are managing the mills. Further than that I have nothing 
 to say. ' ' 
 
 The storm raised by the publication of this short interview 
 proved how wise Mr. Carnegie had been in previously saying 
 nothing. The tide of sympathy, which had swept from the 
 strikers, now returned to them ; and municipal bodies, work- 
 men's unions, political clubs, vied with preachers, lecturers, and 
 editors in England and America in fierce denunciation of one 
 whose acts, it was said, " conform so little to his verbal utter- 
 ances." Some of these expressions of contempt and hatred were 
 puerile and stupid in their violence. " Count no man happy 
 until he is dead," wrote the St. Louis Post-Dispatch. "Three 
 months ago Andrew Carnegie was a man to be envied. To-day 
 he is an object of mingled pity and contempt. In the estima- 
 tion of nine-tenths of the thinking people on both sides of the 
 ocean he has not only given the lie to all his antecedents, but 
 confessed himself a moral coward. One would naturally sup- 
 pose that if he had a grain of consistency, not to say decency, 
 in his composition, he would favor rather than oppose the or- 
 ganization of trades-unions among his own working people at 
 Homestead. One would naturally suppose that if he had a grain 
 of manhood, not to say courage, in his composition, he would 
 at least have been willing to face the consequences of his incon- 
 sistency. But what does Carnegie do ? Runs off to Scotland
 
 234 
 
 ATTEMPT ON MR. FRICK 
 
 out of harm's way to await the issue of the battle he was too 
 pusillanimous to share. A single word from him might have 
 saved the bloodshed but the word was never spoken. Nor has 
 he, from that bloody day until this, said anything except that 
 he 'had implicit confidence in the managers of the mills.' The 
 correspondent who finally obtained this valuable information, 
 expresses the opinion that 'Mr. Carnegie has no intention of 
 returning to America at present.' He might have added that 
 America can well spare Mr. Carnegie. Ten thousand 'Carnegie 
 Public Libraries ' would not compensate the country for the 
 
 direct and indirect evils re- 
 sulting from the Homestead 
 lockout. Say what you will 
 of Frick, he is a brave man. 
 Say what you will of Car- 
 negie, he is a coward. And 
 gods and men hate cowards." 
 In spite of the outward 
 show of indifference with which 
 Mr. Carnegie received these vicious 
 attacks, his sensitive soul suffered 
 keenly. He afterwards told a repre- 
 sentative of the Associated Press that 
 " the deplorable events at Homestead 
 had burst upon him like a thunderbolt from a clear sky. They 
 had such a depressing effect upon him that he had to lay his 
 book aside and resort to the lochs and moors, fishing from morn- 
 ing to night." 
 
 Meanwhile Mr. Frick, propped up in bed, and swathed in 
 bandages, daily received the reports of the managers of the dif- 
 ferent works, dictated replies to letters and telegrams, and 
 allowed neither bodily pain nor a domestic bereavement to 
 slacken his grasp of the situation. On Friday, August 5th, 
 thirteen days after the attempt on his life, he astonished his 
 business associates by suddenly walking into the office as if 
 
 "Fishing from morning to 
 night."
 
 MR. PRICK'S RETURN 235 
 
 nothing had happened. He left his home unattended, entered 
 a street car, and without fuss or ceremony returned to the office 
 and took his seat at his desk. It was characteristic of the 
 man's simplicity. The previous day he had attended the funeral 
 of his youngest child, born in the midst of this excitement and 
 dead because of it. The mother's life was almost involved in 
 the sacrifice.
 
 CHAPTER XVI 
 
 THE AFTERMATH OF WAR 
 
 UNDER the protection of the state 
 militia, workmen willing to accept 
 the wages which the strikers re- 
 fused were at once introduced into 
 the deserted mills. Major-General 
 Snowden, who was in command of 
 the troops, took a firm hold of the 
 situation the moment he arrived ; and open 
 defiance of law and order ceased at the sound 
 of the first bugle-call. The impression had 
 gone abroad among the strikers that the 
 militia had come to prevent the landing of more Pinkertons. 
 The illusion was dispelled in a single sentence of the com- 
 mander: "The gates are open. Any one may go in if the 
 company permits it." In three days a hundred men were at 
 work ; in two weeks nearly a thousand were inside the mill, and 
 one of the regiments had left for home. 
 
 With the fatuity that had characterized the actions of the 
 Amalgamated Association from the outset, a sympathetic strike 
 was now ordered in the other Carnegie works. Although the 
 scale had been signed at the Upper and Lower Union Mills and 
 at Beaver Falls, the men at these establishments broke their 
 agreement on July I4th, and left the mills in a body. Super- 
 intendent Dillon had both the Pittsburg mills running full with 
 non-union labor within four weeks ; and the unprofitable enter- 
 prise at Beaver Falls was allowed to remain idle for several 
 
 months. Thus the Amalgamated Association unnecessarily 
 
 236
 
 AN INDUSTRIAL STORM-CENTRE 
 
 237 
 
 lost three more mills at a time when it was fighting for its very 
 existence. 
 
 The newspaper files of that period show that the industrial 
 storm-centre at Homestead still held the attention of the world. 
 At Little Rock, on July i6th, Carnegie was burnt in effigy. 
 The same day the London Echo, once owned by Andrew Car- 
 negie, demanded explanations of him as to the report that he 
 had " fortified his works with barbed and electrically charged 
 
 Military camp overlooking the Homestead Works. 
 
 wire." The London financial Obscn>er of the same date 
 preached a sermon on the text of Nero fiddling while Rome was 
 burning. 
 
 " Here we have this Scotch- Yankee plutocrat meandering 
 through Scotland in a four-in-hand, opening public libraries 
 and receiving the freedom of cities, while the wretched Belgian 
 and Italian workmen who sweat themselves in order to supply 
 him with the ways and means for his self-glorification are starv- 
 ing in Pittsburg." 
 
 Pittsburg newspapers at the same time were gravely discuss- 
 ing the advisability of refusing Mr. Carnegie's recent gift of 
 money for a library ; and in both chambers of the American 
 Congress denunciations of Frick, Carnegie, and Pinkerton were 
 freely uttered. The world seemed topsy-turvy ; and the strange 
 doctrine that the strikers had a natural right to work in the
 
 238 THE AFTERMATH OF WAR 
 
 Carnegie mills at wages fixed by themselves was voiced in a 
 hundred different forms. In some cases sympathy with the 
 strikers took a practical form ; as when the Fairport Fishing 
 Company of Ashtabula offered them " 2,000 pounds of fresh or 
 salt fish." A day later a Chicago bishop joined the Financial 
 Times of London in abusing "Czar Carnegie." 
 
 On the 1 9th warrants were issued for the arrest of the prin- 
 cipal leaders of the riot on a charge of murder ; and the news- 
 papers simultaneously reported that Mr. Dillon had 800 men 
 at work in the Union Mills. The same day a special commit- 
 tee appointed by Congress to investigate the Homestead labor 
 troubles held its first meeting ; and work was resumed at the 
 open-hearth department and the armor-plate mill. The gov- 
 ernor of Pennsylvania also arrived at Homestead. On the 2Oth 
 Keir Hardie, M. P., who had achieved notoriety by his bad man- 
 ners and grotesque behavior in Parliament, sent the strikers' 
 fund ;ioo which Andrew Carnegie had previously given him 
 towards his election expenses ; and Ben Butler came out in an 
 erudite opinion on the possibility of extraditing Carnegie on a 
 charge of murder. So laughter followed tears. 
 
 On July 22d the non-union men at Duquesne stopped work 
 in sympathy with the Homestead strikers ; but some of them 
 regretting their action a few days later, a little riot occurred 
 when they tried to get back into the mill. A few soldiers were 
 sent over from Homestead ; a dozen warrants were issued for 
 the arrest of the ringleaders ; and the trouble ended in a pic- 
 turesque man-hunt on the hills and the sending of the mana- 
 cled prisoners to Pittsburg. These men were all convicted of 
 rioting. 
 
 The last day of this eventful month fell on Sunday. The 
 scene in the works was thus described in the papers next 
 morning : 
 
 " With for a church the biggest mill in America, boarded by 
 a high fence and a protectorate of one hundred and fifty armed 
 watchmen, with one thousand soldiers in easy reach, the non-
 
 STEAD'S GARBLED STORY 
 
 239 
 
 union men in the Homestead plant gave thanks to God this 
 morning. About four hundred of the new men had gathered 
 in the beam-mill and found seats on rough, improvised benches. 
 An orchestra from Pittsburg played 'Nearer, My God, to Thee,' 
 and Chaplain Adams of the Sixteenth Regiment, standing where 
 the sunshine glistened on his epaulets, preached a sermon that 
 
 The Sheridan cavalry and the Governor's troop going to the rescue of Battery B's 
 cannon, which the strikers would not permit to be unloaded from the cars. 
 
 From Harpers' Weekly. 
 
 touched many hearts, on a famed biblical character, Saul of 
 Tarsus." 
 
 The same paper, under the caption " Everybody Condemned," 
 tells of a conference on the Homestead situation of the Central 
 Labor Union in New York. 
 
 By the 5th of August fifteen hundred men were at work at 
 Homestead ; and on the 8th the strike at Duquesne ended in a 
 stampede for work in which more men were hurt than in the 
 previous riot. About the same time the members of the con- 
 gressional committee of investigation fell out among themselves, 
 refused to sign their chairman's report, the minority of two be-
 
 2 4 o THE AFTERMATH OF WAR 
 
 came the majority, and of the other members each made a report 
 for himself. Thus five reports were submitted by the commit- 
 tee ; and it is from one of these expressions of individual opin- 
 ion that Mr. W. T. Stead quotes a phrase in condemnation of 
 Mr. Frick which has since been embodied in Alderson's author- 
 ized biography of Andrew Carnegie : 
 
 " The Committee of Investigation of the House of Repre- 
 sentatives," says Mr. Stead, " roundly condemned Mr. Frick and 
 his officers for lack of patience, indulgence, and solicitude, and 
 they say : 
 
 'Mr. Frick seems to have been too stern, brusque, and 
 somewhat autocratic, of which some of the men justly com- 
 plain. We are persuaded that, if he had chosen, an agreement 
 would have been reached between him and the workmen, and 
 all the trouble which followed would thus have been avoided.' ' 
 
 This quotation, which, by the way, is garbled by Mr. Stead 
 so as to omit a qualifying clause and to include an important 
 word (" chosen ") not used in the original, expresses the views 
 of a single individual, Mr. Gates, and the other members of 
 the committee who had heard the evidence refused to sign it. 
 Mr. Stead's conclusion that "Mr. Frick, indeed, seems to have 
 been the villain of the piece all through " is also adopted by 
 Mr. Carnegie's biographer. In such ways history is made. 
 
 While the confused and contradictory reports of this com- 
 mittee of investigation contain little of value, the testimony of 
 the witnesses examined by it has much in it that suggests the 
 underlying causes of the strike and the violence offered to the 
 company's watchmen. As this is a matter of public record it 
 need not be repeated here. A single quotation from the testi- 
 mony of Mr. T. V. Powderly, General Master Workman of the 
 Knights of Labor, will serve as an illuminating example. 
 
 " Does your organization countenance the prevention of non- 
 union men taking the place of striking or locked-out men ? " 
 Mr. Powderly was asked.
 
 " THY NEIGHBOR'S JOB" 241 
 
 " We agree with Andrew Carnegie, 'Thou shalt not take thy 
 neighbor's job,' " answered the chief of the Knights of Labor. 
 
 The report of the Senate Committee also made use of a 
 quotation from Carnegie's Forum article ending with the same 
 terse commandment, to illustrate the course which Mr. Frick 
 ought to have followed in his treatment of the workmen ! Under 
 all this censure Mr. Frick remained silent, and to this day he 
 has never said a word either in explanation or self-defence. 
 
 During all this time the strikers, overawed by the militia, 
 had been fairly peaceable. A few assaults on non-union work- 
 men were made whenever a small body of the latter was caught 
 by night or in an out-of-the-way place ; but the growing hope- 
 lessness of their position now made some of the old workers 
 desperate. Superintendent Potter was stoned as he sat on his 
 porch. The company's steamer was fired on by men concealed 
 in a passing train. The house of a "scab" was set on fire; 
 and an attempt was made to burn down a big boarding-house 
 where non-union men were lodged. Dynamite was used in an 
 attempt to injure one of the Union Mills. But these sporadic 
 outbreaks had no effect beyond that of alienating the sympathy 
 which the press and people of the country had so conspicuously 
 bestowed upon the strikers a little while before. A butcher 
 was boycotted for supplying the troops with ice ; a school was 
 deserted because the teachers were the daughters of an Associa- 
 tion man who had wearied of the strike and gone back to work. 
 The oorough council was crippled because the unionists would 
 not sit with the non-unionists. Through it all the condition of 
 the works was slowly improving; and day by day more men 
 were found at work. By the third week in September more 
 troops had been sent away, and the strike was practically a 
 thing of the past. 
 
 Organized labor, however, was slow to acknowledge its de- 
 feat. Up to this time the Knights of Labor had contributed 
 16
 
 242 THE AFTERMATH OF WAR 
 
 nothing to the cause of the strikers beyond a voluminous sym- 
 pathy and some talk of a general boycott of Carnegie products. 
 Now, in the hands of Master Workman Hugh Dempsey of Dis- 
 trict Assembly No. 3, it brought to the strikers' aid a weapon 
 hitherto happily unknown in American industrial warfare. 
 This was poison a mixture of croton oil and arsenic varied 
 with powders of antimony. The hellish plot was carefully in- 
 vestigated by a jury presided over by one of the ablest judges 
 of Pennsylvania ; and the accused had the benefit of counsel of 
 unquestioned force and influence. The verdict of guilty, the 
 sentence of the chief criminals to seven years in the peniten- 
 tiary, the refusal of the board of pardons a year later to com- 
 mute the punishment, may be taken as conclusive proof of the 
 existence of this diabolical conspiracy, which brought dishonor 
 to organized labor. 
 
 During September and October there was an alarming num- 
 ber of dysentery cases among the non-union men who got their 
 meals inside the Homestead mills; but the sickness was at first 
 attributed to bad water, careless habits, and the unaccustomed 
 hardship of the work around the furnaces. When the disorders 
 failed to yield to the usual remedies, the doctors began to sus- 
 pect a worse condition; and their suspicions were strengthened 
 when the patients improved under treatment for antimony pois- 
 oning. Some deaths taking place, the lesser criminals became 
 panic-stricken, and hastened to confess that they had been 
 bribed by Dempsey and an associate to put yellow powders into 
 the soup and coffee served to the workmen. After conviction 
 one of these creatures withdrew his confession, acknowledged 
 perjury, and the next day recanted again and swore that his 
 first evidence was true. It turned out that he had been tempted 
 into a fresh conspiracy, which this time had for. its purpose the 
 pardon of the entire band of poisoners. It is worthy of men- 
 tion that the Knights of Labor stood by their fallen official with 
 a steadfastness worthy of a nobler cause ; and despite his sen- 
 tence to the penitentiary kept him on their rolls.
 
 INDICTED FOR TREASON 243 
 
 On September 21 st true bills were found against one hun- 
 dred and sixty-seven participants in the Homestead battle 
 three for murder and the rest for aggravated riot and conspiracy. 
 The next day Mr. Lovejoy, secretary of the Carnegie Company, 
 was arrested at the behest of the Amalgamated Association on 
 a charge of aggravated riot and assault and battery ; and Mr. 
 Frick and a dozen other officials of the company were included 
 in the indictment. 
 
 With the exception of three ringleaders of the rioters, who 
 were held on a murder charge, all of these persons were ad- 
 mitted to bail. The murder charges duly came to trial. In 
 two cases the accused had no difficulty in proving an alibi; and 
 the third, that of O'Donnell, resulted in an acquittal. Nine 
 months later the cases against the Carnegie officials were 
 dropped ; and the same day an order of court was issued releas- 
 ing from bail the strikers who were under indictment. Fifty- 
 seven men in all had been arrested, of whom thirty-three were 
 indicted for treason the first cases of the kind in the history 
 of the commonwealth twenty- one for rioting, and three for 
 murder. 
 
 On October I3th, after ninety-five days' service, the last of 
 the soldiers left Homestead ; and their withdrawal was at once 
 followed by a recrudescence of violence. At this time the 
 situation was as follows : Over two thousand workmen were in 
 the mill, among whom were about two hundred of the former 
 employees. A number of skilled workmen from Braddock, 
 Duquesne, Pittsburg, and other places were among the non- 
 union workmen. From day to day additions were being made 
 to the forces in the mill, a limited number of them being 
 Homestead men. The non-union men lived in and about the 
 works. Business men of the borough generally admitted that 
 the strike was lost to the Amalgamated Association. On the 
 other hand, between two and three thousand idle workmen 
 walked the streets, anxious, angry, or despairing; and in hun- 
 dreds of homes near by, wives and mothers saw with dread the
 
 244 THE AFTERMATH OF WAR 
 
 approach of a winter of suffering. Yet, obedient to the clique 
 that ruled the local lodges of the Association, these poor people 
 watched strangers coming in, singly and by dozens, to take 
 away their only chance of keeping their little home together. 
 Here was " the terrible temptation " to violence which Andrew 
 Carnegie wrote about in the Forum ; and many of them yielded 
 to it. Assaults on the new workmen became more frequent 
 than ever; and even murder was done. Every day brought its 
 story of outrage. Within two weeks of the withdrawal of the 
 militia a new reign of terror had set in ; and for their own de- 
 fence many of the new workmen were sworn in as deputy sheriffs. 
 At the same time a ringing protest against the prevailing out- 
 lawry was voiced at a public meeting of the peaceful citizens of 
 Homestead, but with little avail. The violence lasted as long 
 as the strike had an official existence. One was born of the 
 other, lived with and by it, and could not die alone. 
 
 In the mean time many letters and cablegrams were received 
 from Mr. Carnegie of the same tenor as those previously quoted. 
 A paragraph from one of these, sent early in October, has some 
 bearing on Mr. Stead's unfair statement that " the responsibility 
 for the industrial war at Homestead lies upon Mr. Frick and 
 Mr. Frick alone." It is quoted in the following letter: 
 
 October I2th, 1892. 
 MY DEAR MR. CARNEGIE: 
 
 I quote from a personal note received from you as follows : 
 " This fight is too much against our Chairman ; partakes of 
 personal issue. It is very bad indeed for you very, and also 
 bad for the interests of the firm." ..... 
 
 " There is another point which troubles me on your account, 
 the danger that the public, and hence all our men, get the im- 
 pression that it is all Frick. Your influence for good would 
 be permanently impaired. You don't deserve a bad name, but 
 then one is sometimes wrongly got. Your partners should be 
 as much identified with this struggle as you. Think over this 
 counsel. It is from a very wise man, as you know, and a true 
 friend."
 
 CARNEGIE'S SOLICITUDE 245 
 
 I am at a little loss to know just why you should express 
 yourself so. 1 know it is not from any other than a friendly 
 interest, but, as you should know, it seems to me that I am 
 particularly anxious that no action of mine should under any 
 circumstances cause loss of any kind to the firm, and that I am 
 not naturally inclined to push myself into prominence under 
 any circumstances. It seems to me wherever it was possible to 
 put any of our people forward I have not let the opportunity go 
 by. That is to say, when they have been asked by any one 
 whether some arrangement could not be made by which this 
 thing could be fixed up they have had instructions to reply, on 
 their own responsibility, that we could not under any circum- 
 stances agree to a compromise of any kind ; that we held no 
 resentments against any of our old men ; that we did not care 
 whether they belonged to a union or not, but that we would 
 expect, if they wished to re-enter our employment, that they 
 would apply as individuals, and if their positions were filled they 
 would be offered other ones, provided they had not been guilty 
 of violating the law &c. &c., and I think whenever any of our 
 people here have had such an opportunity presented to them 
 that they have most promptly acted, and thus identified them- 
 selves with the struggle. 
 
 I note the counsel you give, but I cannot see wherein I can 
 profit by it, or what action could be taken by me that would 
 change matters in respect to that which you menticn. 
 
 Yours truly, 
 
 H. C. FRICK. 
 
 To Andrew Carnegie, Esq., 
 care Messrs. J. S. Morgan & Co., 
 London, England. 
 
 A wise move was made about this time by Mr. Frick. He 
 brought Mr. Charles M. Schwab from the Edgar Thomson 
 works, and made him superintendent of Homestead in place of 
 Mr. Potter, whom he promoted to the position of consulting 
 engineer of all the Carnegie works. Mr. Schwab had graduated 
 at Braddock under Captain Jones, and, displaying exceptional 
 ability as a manager of men, had quickly won his way from one 
 of the lowest positions in the yards to the highest in the office. 
 His cheery friendliness made him especially popular among the
 
 246 
 
 THE AFTERMATH OF WAR 
 
 workmen ; and he had many admirers among the strikers at 
 Homestead. Tactful and conciliatory, he at once set himself 
 to win back the heads of departments and foremen; and before 
 many days had passed had secured the best of them. The 
 
 immediate consequence 'was 
 that better work was done 
 inside the shops, and the 
 foremen were soon 
 followed into the 
 works by their fav- 
 orites among the 
 strikers. 
 
 Meanwhile, 
 around the Union 
 Iron Mills and at 
 Beaver Falls, some 
 thousands of other 
 workmen walked the 
 streets in idleness, 
 with feelings of .anger and 
 fear of the future, because 
 of their sympathy with the 
 men of Homestead. This 
 was the aftermath of war. 
 
 "At bonny Ayr." 
 
 During this eventful Octo- 
 ber, when the dead leaves were fluttering from the trees at 
 Homestead, with dire whisperings of a winter of suffering for 
 the strikers and their families, Andrew Carnegie was at bonny 
 Ayr, the birthplace of Burns, where another library was being 
 dedicated, with dinners, speeches, poems, and processions. A 
 local bard on this occasion burst into song: 
 
 " Independent and valiant from childhood to age 
 To pretence meeting scorn, to unrighteousness rage 
 In Carnegie ' the man and the brother ' we see 
 Whom, ' for a' that and a' that ' Burns sang with such glee."
 
 THE REPUBLICAN DEBACLE 
 
 247 
 
 And simultaneously another poet, in distant Winona, sang in 
 tuneful prophecy : 
 
 " The mills of the gods grind slowly, 
 
 And they grind exceeding fine ; 
 And in the ides of November 
 
 You'll find us all in line. 
 Our bullets made of paper, 
 
 We'll plunk them in so hot 
 That the G. O. P. will wonder 
 
 If they ever -were in the plot. 
 
 For we are the people and 
 
 We'll occupy the land 
 In spite of the Carnegies' 
 
 Or Pinkerton's brigands." 
 
 In grace of diction, such as it is, the disciple of Burns has 
 the advantage; but for blunt truth-speaking, he of Minnesota 
 takes the palm. For the Homestead battle became a national 
 issue in the presidential election a month later, and brought 
 defeat to the Republican hosts. This was another of the 
 sheaves gleaned from the crop sown 
 on July 6th. One of the disap- 
 pointed leaders General Grosvenor 
 of Ohio stigmatized Mr. Carnegie 
 as "the arch-sneak of this age," 
 a judgment which Chauncey Depew 
 ungraciously refused to reverse 
 when it was submitted to him. " As 
 a matter of fact," replied Mr. De- 
 pew, "the Homestead strike was 
 one of the most important factors 
 in the presidential contest, and led 
 to a distinct issue in the campaign. 
 It happened at a crisis and injured 
 us irremediably. . . . The Repub- 
 lican leaders attempted early in the 
 campaign to have the strike settled and cabled to Mr. Carnegie 
 direct without consulting Mr. Frick. Every inducement was 
 
 "I TOO KNOW A GOOD THING !" 
 
 On the wall is a copy of Andrew 
 Carnegie's congratulatory tele- 
 gram to President Harrison on 
 his second nomination : "The pub- 
 lic knows a good thing when it 
 sees it." 
 
 From the Chicago Times.
 
 248 
 
 THE AFTERMATH OF WAR 
 
 made to bring Mr. Carnegie into the canvass, but he persistently 
 declined to lend his influence or to pay one dollar to the cam- 
 paign fund. " 
 
 Another Republican leader was quoted by the New Vork 
 Times as saying : 
 
 " Carnegie four years ago was the best friend the Republican 
 party apparently had. His contributions were heavy and spon- 
 taneous. The Fifty-first Congress gave him all the protection 
 he needed. By this legislation he increased his profits fifty per 
 
 An Anti-Harrison cartoon, with Mr. Frick represented as bringing on his head the 
 tribute he never paid. 
 
 cent. The Homestead strike happened at the very worst mo- 
 ment for the Republican party. Every argument was used to 
 Frick and Carnegie to end it." 
 
 President Harrison naturally expressed himself more cau- 
 tiously; but he nevertheless ascribed his defeat to the discon- 
 tent and passion of the workingmen growing out of wages or 
 other labor disturbances, which did not permit of that calm 
 consideration by these workmen of the effect of the protective 
 system upon his wages. His exact words were :
 
 VIEWS OF POLITICIANS 
 
 249 
 
 "The facts that his [the workman's] wages were the highest 
 paid in like callings in the world, and that a maintenance of 
 this rate of wages, in the absence of protective duties upon the 
 product of his labor, was impossible, were obscured by the pas- 
 sion evoked by these contests." 
 
 It is also certain that the farming vote was adversely affected 
 by the broadcast publication of the high wages received by the 
 Homestead workmen under a protective regime which left the 
 
 CHARGE OF THE MERCENARIES. 
 
 Mr. Frick is represented in the lead, with Mr. Carnegie following. 
 
 From the New York World. 
 
 agriculturist on the outside. And so the Democrats rode into 
 place on the Pinkerton barges ; and the names of Frick and 
 Carnegie became anathema maranatha to all good Republicans. 
 It was a most unexpected aftermath. 
 
 For a few weeks longer the stubborn contest continued at 
 Homestead, needlessly prolonging the suffering of the men 
 and their families and breeding disorder in the township. One 
 of the unhappy men was "goaded to suicide," as the newspapers
 
 250 
 
 THE AFTERMATH OF WAR 
 
 expressed it. He had had no work since the strike. Before 
 that he owned his home and had a well-paid position. His 
 wife, " momentarily expecting to become the mother of a second 
 child," was in "a most critical condition and may not recover." 
 Amid such happenings the public disorder was such as to 
 lead to a demand for a return of the troops. Happily this met 
 with no response; and on November iSth there was such a 
 
 rush among the strikers for work 
 that men were trampled in the 
 crowd. Three days later the strike 
 was reluctantly called off by the 
 local lodges of the Amalgamated 
 Association ; and the three thous- 
 and workmen who had never be 
 longed to the union, and had no 
 rights of any kind in it, were per- 
 mitted to seek work in the mill on 
 any terms they could get. The 
 struggle had lasted twenty weeks, 
 had cost a score of lives, millions 
 of dollars, and, so far as any one could then see, had benefited 
 nobody. 
 
 With the perspective afforded by lapse of time, however, it 
 can now be seen that this titanic struggle was not in vain. 
 Greatly as the suffering attending it must be deplored suffer- 
 ing that ceased not with the official declaration of peace by the 
 Association lodges, but stayed throughout the winter with the 
 families of many of the strikers it is nevertheless evident 
 that the marvellous prosperity which, a year or two later, fol- 
 lowed this struggle was made possible because of it. The 
 mental and moral attitude of the workmen towards their em- 
 ployers and towards other workmen which found expression in 
 the savagery of the attack on the company's watchmen, in the 
 use of dynamite, burning oil, and the wounding of defenceless 
 prisoners, belonged to a barbaric past, and was wholly incom- 
 
 Unconditional surrender ! 
 From the Chicago Times.
 
 HALF-WAY DOWN NIAGARA 251 
 
 patible with modern industrialism. The usurpation of the 
 functions of government, the summary arrest and punishment of 
 inoffensive citizens, and the displays of lawless arrogance by the 
 Advisory Committee, implied a misconception of the mutual 
 rights and duties of laborers and employers which could only be 
 destructive of that harmonious co-operation essential to prog- 
 ress ; and thoroughly imbued with false ideas as the workmen 
 were, nothing but the most drastic measures would have sufficed 
 for their correction. 
 
 One of the most intelligent of the strikers told the Senate 
 committee of investigation that when the workmen found them- 
 selves " confronted with a gang of loafers and cutthroats from 
 all over the country, coming there, as they thought, to take 
 their jobs, why, they naturally wanted to go down and defend 
 their homes and their property and their lives with force, if neces- 
 sary, and that is the way the men felt at Homestead." 
 
 Confronted with such a theory of the natural rights of labor, 
 the inflexibility of Mr. Fiick, so thoughtlessly condemned at 
 the time and often since, was the salvation of the workmen 
 themselves, as they were afterwards among the first to admit. 
 The talk of compromise with such ideas was foolish and inju- 
 rious. There are some things that cannot be compromised. 
 Insurrection is one of them. It is not possible to jump half- 
 way down Niagara. 
 
 In January, 1893, all being quiet on the Monongahela, An- 
 drew Carnegie returned from Europe ; and on the 3Oth of that 
 month he published a carefully prepared statement of his con- 
 nection with the Homestead strike. Summarized, it is as fol- 
 lows : 
 
 " I did not come to Pittsburg to rake up, but to bury, the 
 past, of which I knew nothing. . . . For 26 years our concerns 
 have run with only one labor stoppage at one of our numerous 
 works. ... I desire now, once for all, to make one point clear. 
 Four years ago I retired from active business; no considera-
 
 THE AFTERMATH OF WAR 
 
 tion in the world would induce me to return to it. . . . I have 
 sold portions of my interests and am gradually selling more to 
 such young men in our service as my partners find possessed of 
 exceptional ability and desire to interest in the business. I 
 am not an officer of the company but only a shareholder. 
 
 To the numerous appeals which I have received urging me 
 to give instructions in regard to recent troubles, I have paid no 
 attention, but to all these people, and to any others interested 
 
 
 ITTTSBURG. FRIDAY EVEULNO, DECEMBER 9, 1892. 
 
 IN HUMANITY'S NAME. 
 
 The Press Appeals for Aid for 
 Suffering Homestead. 
 
 UTREME DESTITUTION IN THE UNFORTUNATE BOROUGH. 
 
 What the Investigation of a Press Re- 
 porter Revealed. 
 
 WOMEN AND CHILDREN WHO WWIT FOR BREAD. 
 
 The Work of Relief Far Greater Than the Local 
 Committee Can Undertake. 
 
 PRIDE SEALS THE LIPS OF STARVING MEN AND WOMEN 
 
 Tne Press Starts the Relief Fund Wilh a Contribu- 
 tion of One Hundred Dollars 
 
 SOLOMON & RUBEN ADD ONE HUNDRED DOLLARS MORE.; 
 
 in the subject, let me say now that I have not power to instruct 
 anybody connected with the Carnegie Steel Co. Ltd. The 
 officers are elected for a year and no one can interfere with 
 them. . . . I do not believe in ruling through the voting power, 
 even if I could. . . . When I could not bring my associates in 
 business to my views by reason I have never wished to do so 
 by force. As for instructing or compelling them under the law 
 to do one thing or another that is simply absurd. I could not 
 if I would, and I would not if I could. . . . 
 
 And now one word about Mr. Frick. I am not mis-
 
 CARNEGIE'S EULOGY OF FRICK 
 
 253 
 
 taken in the man, as the future will show. Of his ability, fair- 
 ness and pluck no one has now the slightest question. His four 
 years' management stamps him as one of the foremost managers 
 of the world I would not exchange him for any manager I know. 
 
 People generally are still to learn of those virtues which 
 his partners and friends know well. If his health be spared 
 I predict that no man who ever lived in Pittsburg and managed 
 business here will be better liked or more admired by his em- 
 ployees than my friend and partner Henry Clay Frick, nor do I 
 believe any man will be more valuable for the city. His are 
 the qualities that wear; he never disappoints; what he prom- 
 ises he more than fulfils. . . . 
 
 I hope after this statement that the public will understand 
 that the officials of the Carnegie Steel Company, Limited, with 
 Mr. Frick at their head, are not dependent upon me, or upon 
 any one in any way for their positions, and that I have neither 
 power nor disposition to interfere with them in the manage- 
 ment of the business. And further, that I have the most im- 
 plicit faith in them." 
 
 ^ PROTECTED " M'KIMLEY TARIFF "Q ARMV.V PI N KERTO MS . I -i>? ' ... 
 
 - ctj if Aa-v 
 S ""ROYI5.0H* 
 
 A campaign pleasantry.
 
 CHAPTER XVII 
 
 Ore-docks and vessels. 
 
 A RELUCTANT SUPREMACY 
 
 IT is something more than 
 a coincidence that the day 
 that marked the beginning 
 of the Homestead strike 
 saw the birth of the 
 Carnegie Steel Company, 
 Limited. On July ist, 
 1892, for the first time in 
 their history, the separate 
 establishments whose 
 
 growth we are tracing were brought into a single organization, 
 and endowed with one mind, one purpose, one interest. Mr. 
 Frick was too wise a general to enter a battle with his 
 forces needlessly scattered; and while fences were being built 
 around the company's works, their corporate strength was also 
 concentrated and made instantly responsive to his will. 
 
 The consolidation of the different Carnegie interests had, 
 however, long been contemplated by Mr. Frick. As early as 
 February, 1890, he had discussed the project with Mr. Abbot, 
 chairman of Carnegie, Phipps & Co., and had made it the sub- 
 ject of a written communication to Mr. Carnegie. But at that 
 time there were obstacles of a financial nature. One concern 
 was used to make paper for the other, as the phrase is. That 
 is, one Carnegie company selling to another was able to discount 
 the notes it received in payment ; so that the transaction had 
 all the banking advantages of an outside trade. On occasions, 
 too, such notes could be discounted without any antecedent 
 
 254
 
 A GREAT CONSOLIDATION 255 
 
 sale. In transactions of this kind Mr. Stewart, with his strong 
 financial connections, had long proved very useful. 
 
 Mr. Stewart had died in 1889. His interest had been 
 acquired by Mr. Frick, who, adding it to his previous holdings, 
 thus became as large a stockholder as Mr. Phipps, and second 
 only to Mr. Carnegie. At the same time Mr. Frick became 
 chairman of Carnegie Brothers & Co., Limited, as well as a 
 director in Carnegie, Phipps & Co. Having previously resumed 
 the presidency of the coke company, which he had resigned 
 under circumstances already related, Mr. Frick freely used its 
 credit to finance the two steel companies and their subsidiary 
 interests, and thus made it unnecessary to maintain their organi- 
 zations separate. The consolidation of thece interests would 
 have come in the course of time as a measure of economy ; but 
 the combination was hastened by the threat of war with labor. 
 
 The sociologist will be interested in this illustration of the 
 unifying effect of war in industrialism. Predatory competi- 
 tion, which is a form of warfare, has a similar consolidating 
 effect ; and the modern trust is its most conspicuous expression. 
 The processes of industrial evolution often take a form that in- 
 evitably suggests the thought that even such great leaders as 
 Mr. Frick, with their apparent independence and strong govern- 
 ing power, are little more than passive instruments through 
 which natural forces operate. The changes which an industrial 
 organism undergoes in its development are unquestionably 
 governed by the same laws as those which mould the less com- 
 plex forms of life, to which the doctrine of evolution is popu- 
 larly limited ; and it often appears that the strong personality 
 of the greatest captain of industry can do little more than con- 
 trol the direction of this growth. His power is comparable to 
 that of the gardener who fastens the young shoots of his peach 
 tree to the southern wall, and causes it to spread out in the 
 sunshine more than it would if left alone. 
 
 In the consolidation of July ist, 1892, the Carnegie Steel 
 Company, Limited, became the owner of the Upper and Lower
 
 256 A RELUCTANT SUPREMACY 
 
 Union Mills, the Lucy Furnaces, the Edgar Thomson Steel 
 Works, the mills at Homestead, the newly acquired property at 
 Duquesne, the Keystone Bridge Works, the unprofitable and 
 prolonged experiment at Beaver Falls, with a few other interests 
 in ore and natural gas sprinkled about Western Pennsylvania. 
 The capital was $25,000,000. It was a gigantic concern; but, 
 as De Tocqueville says of the United States of his time, it was 
 "a giant without bones." It had gristle, however, and this 
 soon hardened into bones. 
 
 Having brought the separate establishments into a single 
 organization, Mr. Frick now sought to. harmonize their relations 
 so that each plant would serve to supplement and round out the 
 operations of every other. This he effected by the Union Rail- 
 way, which he built to connect the principal works with each 
 other and with all the different transportation systems entering 
 the Pittsburg district. It was a masterly conception; for it 
 unified the scattered works and made them as easy to operate as 
 if they had been contiguous. At the same time it gave them 
 unequalled transportation facilities through direct connection 
 with every important railway system in Western Pennsylvania. 
 
 The advantages of easy exchange of products among the 
 different works cannot be stated in figures ; but they have their 
 place in the phenomenal record of the firm's profits given else- 
 where. The saving in switching charges alone paid interest 
 on the cost of the railroad ; and the company was allowed twenty- 
 five cents a ton rebate on ore rates. 
 
 A further advantage was that the company thus regained 
 possession of its own yards. Hitherto the different railroads 
 running into the works had control of all tracks and sidings ; 
 and so tenaciously did they hold to these cheaply acquired 
 rights that they often resisted the extension of a mill that in- 
 volved the removal of a track. This cause of annoyance now 
 came to an end; and a judicious rearrangement of tracks and 
 sidings, so as to meet changed conditions, resulted in a great 
 saving of yard space and expedited the handling of vast ton-
 
 THE EDGAR THOMSON STI 
 
 THE HOMESTEAD STEE 
 
 THE DUQUESNE STEEL
 
 Plate X. 
 
 WORKS, BRADDOCK, PA. 
 
 i y 
 
 ORKS, MUNHALL, PA. 
 
 RKS, DUQUESNE, PA.
 
 THE UNION RAILROAD 257 
 
 nages. The superiority of this system, by which the traffic was 
 regulated by one organization instead of by several railroads, is 
 readily seen when a statement is made of the total tonnage 
 entering and leaving the works of the Carnegie Steel Company. 
 In 1899 this amounted to 16,000,000 tons as much as the 
 combined total freight handled by the Northern Pacific, Union 
 Pacific, and Missouri Pacific railways, with their 1 3,000 miles 
 of track, 1,500 locomotives, and 50,000 freight-cars. 
 
 The next step in the progress of this great industrial aggre- 
 gate towards completeness was that which gave it possession of 
 the iron ore it needed. This was the only thing it had to buy 
 of outsiders. So long as it did not itself produce everything it 
 needed, it could not be considered a perfect industrial unit, such 
 as it was Mr. Prick's ambition to make it. An accident helped 
 him to a realization of his great plans; though they were nearly 
 frustrated through the unexpected opposition of Mr. Carnegie. 
 
 The story of the way the Carnegie Steel Company acquired 
 its great ore mines on Lake Superior lacks none of the romance 
 that makes the history of Homestead and Duquesne so inter- 
 esting. It is the story of a huge profit made with hardly a 
 dollar of investment, and the accepting of an impregnable posi- 
 tion in the industrial world with a reluctant and complaining 
 consent. It is the amplified tale of the " most hazardous enter- 
 prise," told afresh ; but where a thousand dollars was then in- 
 volved, a hundred millions now hold our interest. Unfortu- 
 nately it is a story that shatters all preconceptions of the genius 
 necessary to achieve millionaireship; but that is merely inci- 
 dental. 
 
 Among the boy companions of Thomas M. Carnegie was 
 Henry W. Oliver. He had become one of the cleverest busi- 
 ness men of Pittsburg, and had made several fortunes in iron 
 and steel manufacture before he reached the maturity of mid- 
 life. He was singularly far-sighted and enterprising, and a 
 skilful financier. Some time in 1892 he formed a company, 
 called after himself, to operate the Missabi Mountain mine on
 
 2 5 8 
 
 A RELUCTANT SUPREMACY 
 
 the Mesaba range; his main object being to provide a cheap 
 and uninterrupted supply of high-grade Bessemer ore for his 
 own furnaces. 
 
 Mr. Frick, who had similar ideas for his own works, watched 
 the experiment with interest; and presently he suggested to 
 Mr. Oliver that an ore combination with the Carnegie Steel 
 Company might be made mutually beneficial. Mr. Oliver was 
 quick to see the advantage of such a union; permitting him, as 
 
 Group of miners near Lake Superior. 
 
 it would do, to bargain with independent miners and transporta- 
 tion companies on a basis of a high minimum. In other words, 
 the enormous consumption of ore of the united plants would 
 enable him to offer a guaranteed tonnage to railways and steam- 
 boat companies in exchange for low rates, as well as to make 
 exceptional offers to mine owners willing to let their ores be 
 worked on a royalty basis. He therefore viewed the sug- 
 gestion with favor, and, after some negotiations, agreed to Mr. 
 Prick's proposal to give the Carnegie Company one-half the
 
 A DISCREDITED PROPHET 259 
 
 stock of the Oliver Mining Company, conditioned on a loan of 
 half a million dollars, secured by a mortgage on the ore 
 properties, to be spent in development work. In this ingenious 
 way Mr. Frick so arranged that the Carnegie ore interest would 
 not cost a dollar. 
 
 The matter was at once brought to the attention of Mr. 
 Carnegie, who laconically opposed it as follows, in a letter dated 
 Rannoch Lodge, Kinloch-Rannoch, Perthshire, August 29th, 
 1892: 
 
 " Oliver's ore bargain is just like him nothing in it. If 
 there is any department of business which offers no inducement, 
 it is ore. It never has been very profitable, and the Massaba is 
 not the last great deposit that Lake Superior is to reveal." 
 
 Mr. Frick, however, made the combination with Mr. Oliver; 
 and, on his return from Europe, Mr. Carnegie expressed him- 
 self so vigorously in condemnation of it that there ensued the 
 first coldness between himself and Mr. Frick. 
 
 'Mr. Carnegie's attitude was not modified by the successful 
 working of the arrangement ; and during the next two years he 
 repeatedly placed himself on record, with increasing emphasis, 
 as being opposed to any venture in Lake Superior ores. Writ- 
 ing to the Board of Managers from Buckhurst Park, Withyham, 
 Sussex, on April i8th, 1894, he says again: 
 
 "The Oliver bargain I do not regard as very valuable. 
 You will find that this ore venture, like all our other ventures 
 in ore, will result in more trouble and less profit than almost 
 any branch of our business. If any of our brilliant and talented 
 young partners have more time, or attention, than is required 
 for their present duties, they will find sources of much greater 
 profit right at home. I hope you will make a note of this 
 prophecy. " 
 
 Of course the managers made a note of the prophecy ; and 
 it afterwards furnished subject for many a subdued laugh at 
 their meetings.
 
 26o 
 
 A RELUCTANT SUPREMACY 
 
 It subsequently transpired, however, that Mr. Carnegie 
 thought his company was entitled to a larger share than one- 
 half of the Oliver Mining Company's stock; and, to please him, 
 Mr. Oliver consented to sell the Carnegies an additional interest 
 of one-third, making their holdings five-sixths of the total 
 stock. But he took care to safeguard his own interests by a 
 contract under which the Oliver furnaces were entitled to one- 
 
 An open-pit mine. 
 
 sixth of all ore mined by the company. At this time the capi- 
 tal of the Oliver Mining Company was $1,200,000. 
 
 In 1896 Messrs. Oliver and Frick made the celebrated 
 Rockefeller connection, by which they leased the other great 
 mines on the Mesaba range on a royalty basis of only 25 
 cents a ton. This low price was given by the Rockefellers in 
 consideration of a guaranteed output of 600,000 tons a year, to 
 be shipped over the Rockefeller railroads and steamships on the 
 Lakes, with an equal amount from the Oliver mine. This
 
 A SAVING OF $27,000,000 261 
 
 amounted to 1,200,000 tons a year; and as the contract was to 
 run for fifty years, it meant a guarantee of 60,000,000 tons of 
 freight, at 80 cents a ton by rail and 65 cents a ton on the lakes 
 a consideration great enough to justify the low royalty of 25 
 cents when other mine owners were getting 65 cents. To the 
 Carnegie-Oliver iron interests it meant a visible saving of 
 $27,000,000. 
 
 This alliance with the Rockefellers had an unexpected re- 
 sult. It produced a panic among the other mine owners ; and 
 stockholders in Boston, Chicago, Cleveland, and the Northwest 
 hastened to get rid of their ore properties at almost any price. 
 The demoralization extended to the ore markets ; and Norrie, 
 which sold at $6 a ton in 1891, dropped to $2.65 on the docks 
 at Cleveland. 
 
 This was Mr. Oliver's opportunity ; and backed by Mr. 
 Frick and some of the more enterprising Carnegie managers, 
 like Curry, Schwab, Gayley and Clemson, he hastened to secure 
 options on all the best mines in the Lake Superior region. The 
 following is the argument he submitted to the Carnegie mana- 
 gers on July 27th, 1897 : 
 
 NEW YORK, N. V., July 27, 1897. 
 
 H. C. FRICK, Chairman, 
 
 DEAR SIR : I mail you my specific reports on the Norrie, 
 Tilden, and Pioneer mines. 
 
 I now address you mainly to impress my views that it should 
 be our policy to acquire all three of these properties. We (I 
 mean the Carnegie and Oliver furnaces) have paid more than 
 our share of tribute to Cleveland and Northwestern miners. 
 Part of their receipts were profit, but a large part was wasted 
 in expenses that we will in the future save: in exploration, In 
 which we will benefit; in development of mines that have 
 proved failures ; and in excessive freight rates to steamship lines 
 controlled by the Cleveland middle-men. All this should stop. 
 I claim that we could produce and deliver our ore to Lake Erie 
 ports 20 to 30 cents per ton cheaper than it can be done by 
 those now in control of the mines we seek. Our saving would
 
 262 A RELUCTANT SUPREMACY 
 
 be in steady and more regular mining, in avoiding a line of high 
 salaried officers, in procuring lower Lake freights, and in sav- 
 ing the Cleveland commission of 10 cents per ton. I am satis- 
 fied that the economies that we will practise in the lines above 
 indicated will be fully equivalent, in the future, to any royalties 
 we may pay. The Carnegie furnaces and the Oliver furnaces 
 will require about four million tons of ore per annum. Our 
 minimum, under my proposition, would stand as follows : 
 
 Mesaba 1,200,000 
 
 Norrie 700,000 
 
 Tilden 400,000 
 
 Pioneer 500,000 
 
 TOTAL 2,800,000 Tons 
 
 On the above, the only cash obligation that we will have if 
 my plan is carried out, is in the purchase of the Norrie stock. 
 The Mesaba leases we can throw up on six months notice, and 
 the Tilden and Pioneer leases on three months notice. The 
 amount that we would invest in the Norrie is a very small item, 
 considering the immense stake we have in the business and the 
 fact that if we do not fortify ourselves on the plan that I have 
 indicated, it would be easy for the mine owners to exact three 
 to four millions of dollars, or even a greater sum, from us, as a 
 profit on the ore we consume. A glance at the prices paid for 
 ore the past 10 or 15 years will show that my estimate of the 
 profits that we have paid them is extremely conservative 
 
 Excuse me for bringing to the attention of yourself and 
 your associates the fact that the Carnegie Company never here- 
 tofore hesitated to invest millions of dollars to save 25c to 5oc. 
 per ton in the manufacture of pig iron. You destroy old plants 
 and erect new ones to save a quarter of a dollar per ton. You 
 are now engaged in building a railroad to the Lakes, at an im- 
 mense expenditure of treasure and credit, with the ultimate ob- 
 ject of making a saving (in which your competitors to a cer- 
 tain extent will share) of 25 to 30 cents per ton, and to protect 
 Pittsburgh against high ore rates in the future. I propose at a 
 risk of using our credit to the extent of $500,000, or possibly 
 one million dollars, to effect a saving, in which our competitors 
 will not share, of four to six million dollars per annum. All 
 arguments to the contrary notwithstanding, I know I am right 
 in these matters; as, in my judgment, with a knowledge of the 
 nature of the ownership of the mines in the Northwest, no 
 power can prevent their soon coming together and exacting the 
 old time prices for ore.
 
 hEXRY W. OLIVER'S FORESIGHT 
 
 263 
 
 On the Gogebic Range, the mines I have selected comprise 
 over 8o r / of developed ore or " ore insight." They comprise 
 in this year's pool about 60^ of the allotment, the allotment 
 being made not on the basis of ore in sight, but on the basis of 
 the preceeding year's shipments. They are the only mines on 
 the Range that can mine iron ore at present prices and make 
 money. The other mines with their small product and heavy 
 general expenses, are not making one cent per ton. The result 
 
 An ore-train. 
 
 is that one or two of the smaller of these mines are being 
 thrown up this year; and, with proper care and attention, if we 
 were on the ground, we should be able to take up practically 
 all of them. 
 
 Doubts may arise as to the quantity of ore in the properties 
 \ve propose to take up. The question is, however, if the ore is 
 not ui the mines I propose to acquire, where can it be shown to 
 exist, in properties available for lease or purchase, in the Ranges 
 other than the Mesaba Range ? I have selected as the proper- 
 ties we should acquire the mines that common report names as 
 having the largest quantity and our special reports confirm that 
 view. If there be not large quantities of ore in the properties 
 we have under consideration, then there are no large deposits
 
 264 
 
 A RELUCTANT SUPREMACY 
 
 of Bessemer ore yet known, outside of the Mesaba Range, and 
 the Chapin and Minnesota Iron Go's properties. In that case, 
 Bessemer ores will shortly appreciate in value and we, with 
 others, will have to pay the holders thereof a large advance on 
 present prices. 
 
 An important point, in making the venture in the Gogebic 
 region and securing a large body of ore, is the effect it will have 
 upon the guarantee made us, by the Rockefeller party, that our 
 ore shall be as low as any other Mesaba ore at Lake Superior 
 ports. The possession of a large body of ore in the Gogebic 
 Range will strengthen our position, in holding the Rockefeller 
 people down to low freight rates from the Mesaba Range. 
 
 The three properties I propose to take up contain not only 
 the largest body of ore in sight, but are practically the only 
 mines excepting a few extra low phosphorus mines and the 
 Chapin and Minnesota Iron Co., properties, that are this year, 
 under their system of mining and expenses, producing ores at a 
 profit. In addition to this, as showing their standing in the 
 
 trade, they have 
 been allotted, on the 
 basis of last year's 
 shipments, over 50^' 
 of the Gogebic out- 
 put, and over 25^ 
 of the total, in a 
 Pool of 4,250,000 
 tons, comprising all 
 the Bessemer ores 
 (including Chapin) 
 produced in the 
 Northwest, except- 
 ing only ores from 
 the Mesaba Range. 
 I am not ignor- 
 ing the strong posi- 
 tion we hold on the Mesaba Range. With two exceptions, 
 we possess the only steam shovel mines and the low cost of 
 this ore is extremely gratifying. More Mesaba ore can be 
 used in our mixtures, but it is not a wise policy to quickly ex- 
 haust the rich quarry we have on the Mesaba Range, taking 
 off rapidly the surface ore. Although we are mining it at 
 present for less than five cents per ton for labor, we must 
 look to the future, when we will have to go deeper, pump 
 water and lift the ore. We should rather prolong the period 
 
 A BUCYRUS SHOVEL AT WOKK. 
 
 " Five cents a ton for labor."
 
 HENRY W. OLIVER.
 
 Plate XI. 
 
 HENRY W. OLIVER
 
 A STRONG ARGUMENT 265 
 
 of cheap steam shovel mining, take in the other Range prop- 
 erties I suggest for mixture; and, by working one Range 
 against the other, keep down costs of freights. I desire to 
 impress upon you the fact, that if it had not been for our 
 Rockefeller-Mesaba deal of last year, with the consequent de- 
 moralization in the trade caused by the publication thereof, it 
 would not have been possible for us to now secure the other 
 Range properties I propose to acquire, either by lease or for any 
 reasonable price. We simply knocked the price of ore from 
 $4.00 down to say $2.50 per ton. Now let us take advantage 
 of our action before a season of good times gives the ore 
 producers strength and opportunity to get together by com- 
 bination. 
 
 I trust that when you read this letter and my reports you 
 will not attribute the strong position I take to my usually 
 optimistic nature. It is true that I generally like to view the 
 bright side of affairs, but these practical matters I have digested 
 in a thoroughly judicial spirit, and my conclusions are the result 
 of great thought and most thorough investigation. You do not 
 hear of the many properties I have condemned and turned down 
 as being not worthy of your consideration. I have selected, 
 for the decision of my associates, only the very best. The 
 Minnesota Iron Company properties are out of the question; 
 the banns have been published and union with the Illinois Steel 
 Company is only a matter of time. All others, however, I 
 have, in one shape or another had before me. The Chapin is 
 too high in phosphorus and held by too stiff a crowd. Other 
 Menominee properties (the Aragon, for instance, that was 
 sold the other day), too small and expensive. I have not 
 recommended or tried to lead you into waste of money on ex- 
 plorations of virgin property. Mr. A. M. Byers told me that 
 he, with Kimberly, had worked for years, spending over a mill- 
 ion of dollars, in sinking shafts through solid rock, hunting a 
 lost vein of ore, on the Ludington mine, which adjoins the 
 Chapin. Please recall that on the Mesaba Range I condemned 
 poor properties such as the Sauntry and others ; that I stood 
 strongly against the Mahoning out of which they have great 
 difficulty this year in mining any but non-Bessemer ores, and 
 that I only brought before you, for approval, the magnificent 
 properties on the Mesaba Range that we are now operating. 
 Pardon me for mentioning the above. I only do it to impress 
 upon you the fact that I have analyzed this question most thor- 
 oughly. I have given months of thought to these questions, 
 where others have scarcely given minutes. I know I am right
 
 266 A RELUCTANT SUPREMACY 
 
 and trust you and your associates will give me opportunity to 
 prove it. The future will show that all my predictions will 
 come true to the letter. Yours &c 
 
 HENRY XV. OLIVER. 
 
 This document was sent by special messenger to Mr. Frick 
 in London and by him transmitted to Mr. Carnegie in Scot- 
 land. To the surprise and dismay of everybody concerned, Mr. 
 Carnegie again opposed the project. From the fastnesses of 
 his Highland retreat he again issued a laconic veto, with a quip 
 and a chuckle at his partners' enthusiasm. Thereupon M. 
 Oliver despatched the following cablegram : 
 
 G37CM697 
 
 THE CARNEGIE STEEL COMPANY, LIMITED. 
 
 PRIVATE TELEGRAPH SERVICE. 
 
 Telegram Sent from General Offices; Carnegie Building, Pittsburg, Pa. 
 Sent by Received hy Time, 
 
 Dated. September 25, 1897 
 To CARNEGIE LAGGAN 
 
 I am distressed at indications here that Norrie options ex- 
 piring on Monday, are to be refused. It would be a terrible 
 mistake. The good times make it that I could not possibly 
 secure these options again at fifty per cent., advance. The 
 Norrie mine controls the whole situation. They have sold over 
 one million tons this year. With the additional property we 
 will get from the fee owners, we secure fifteen to twenty million 
 tons of the ore that the Carnegie Company are purchasing this 
 year five hundred and fifty thousand tons. I will guarantee, 
 counting the surplus they have in their treasury, to return in 
 profits every dollar we invest in two years. Do not allow my 
 hard summer's work to go for naught. 
 
 HENRY W. OLIVER 
 chg. O. M. Co. 
 
 It will be seen from this that the Carnegies had just bought 
 550,000 tons of this very ore, which was yielding the mine 
 owners $i to $1.25 a ton profit. By instructions from Scotland
 
 REFUSAL OF $500,000,000! 
 
 267 
 
 they had made this purchase just at the critical moment that 
 Mr. Oliver was negotiating for options on the shares of the 
 Norrie mine; and his task was made doubly difficult by the 
 fact. Before this the Norrie owners had sold only 150,000 
 tons, as against ten times that amount in previous years. Not- 
 withstanding this embarrassing purchase, Mr. Oliver was able 
 to secure options from about four hundred stockholders, who 
 resided in every part of the country, and, one might say, in 
 
 Piles of iron ore ready for loading. 
 
 every part of the world. This was the " hard summer's work " 
 which was rendered futile by a word from Carnegie. 
 
 On receipt of Mr. Oliver's cablegram, however, Mr. Carne- 
 gie so far reconsidered his objections as to leave the decision 
 to the chairman and Board of Managers in Pittsburg ; and these 
 gentlemen promptly authorized Mr. Oliver to close the deal. 
 This action was the pivotal point in the gathering together, 
 by the Carnegie-Oliver interests, of the great ore properties
 
 268 A RELUCTANT SUPREMACY 
 
 which gave them their impregnable position in the iron indus- 
 try of the country. On the organization of the United States 
 Steel Company, the Carnegie- Oliver company owned two-thirds 
 of the known Northwestern supply of Bessemer ores roughly, 
 500,000,000 tons, which Mr. Schwab has since valued at $500,- 
 000,000. It would be difficult to find a parallel to this inci- 
 dent in any romance of American industrialism. 
 
 It is only fair to Mr. Carnegie to add that he afterwards so 
 far modified his estimate of Mr. Oliver as to offer him an inter- 
 est in the Carnegie Steel Company. 
 
 The great value of the gift which Andrew Carnegie thus 
 reluctantly allowed Mr. Frick to accept for the company may 
 be further illustrated. The first Mesaba mine secured by Mr. 
 Oliver is of such character that 5,800 tons of ore have been 
 mined and loaded into cars by one steam shovel in ten hours; 
 and the output for one month was 164,000 tons. This was the 
 work of only eight men. Three such machines, made by the 
 Bucyrus Company of South Milwaukee, mined from its natural 
 bed 91 5,000 tons of ore during the season of 1900, working day 
 shift only. Some of the other great mines are of the same 
 character. The method of mining is shown in the accompany- 
 ing photographs. Five tons of ore are lifted by the machine 
 each stroke; and five full-weight lifts will fill a car. A 25-ton 
 car can be filled in two and a half minutes, which is at the rate 
 of 600 tons an hour. Andrew Carnegie often says that Fortune 
 timidly knocks at every man's door at least once during his 
 lifetime. The statement is too modest to fit his own case; for 
 Fortune has repeatedly battered down the barricades with which 
 he has tried to exclude her. Nor has she been scared away by 
 the inscription above the Carnegie threshold, " Pioneering don't 
 
 pay 
 
 Having thus provided an unfailing supply of the best Besse- 
 mer ores at the mere cost of mining them, Mr. Frick at once 
 began to elaborate plans for their cheap and certain transporta- 
 tion to the furnaces. A contract with the Bessemer Steamship
 
 THE LAKE RAILROAD 
 
 269 
 
 Company, a Rockefeller concern, ensured the regular delivery 
 of 1,200,000 tons a year at Lake Erie ports; and an agree- 
 ment was simultaneously made with the Pennsylvania Railroad 
 for the land haul of some two hundred miles. But this condi- 
 tion of dependence was unsatisfactory ; and Mr. Frick boldly 
 talked of building his own railroad to the Lakes. This brought 
 an offer from the president of the Pennsylvania Railroad of bet- 
 ter facilities; and Mr. Frick proposed an arrangement under 
 which the Carnegie Steel Company should run its own ore 
 trains from Lake Erie, equipped with its 
 own locomotives and crew, over the 
 Pennsylvania tracks. This plan was 
 well received by the officials of the 
 Pennsylvania Railroad; but before 
 anything definite had been 
 decided upon, a telegram was 
 received from Mr. Carnegie 
 in Florida, asking that all 
 negotiations be suspended 
 until the arrival of his letter. 
 When this came it was found 
 that he had entered into an 
 agreement with Mr. Samuel 
 B. Dick, president of the Pittsburg, Shenango and Lake Erie 
 Railroad, to reorganize that company, which was on the verge 
 of bankruptcy, and to build an extension from its terminus at 
 Butler to a point on the Union Railroad at Bessemer. 
 
 This Pittsburg, Shenango and Lake Erie had had an event- 
 ful history, involving receiverships, reorganizations, and con- 
 solidations ; and at this time it had little more than a right of 
 way and two streaks of rust, as the saying is. It had certain 
 terminal facilities at Conneaut Harbor, however; and during 
 the previous year (1895) a quarter of a million tons of ore had 
 been handled there. The Government was dredging the harbor, 
 and its facilities were capable of some improvement, though not 
 
 Battered down the barricades."
 
 2/0 
 
 A RELUCTANT SUPREMACY 
 
 to the extent expected when this deal was made. The harbor 
 has frequently been inconveniently crowded. 
 
 On July 25th, 1896, the first contract was let for the exten- 
 sion to Pittsburg; and simultaneously the work of renewing 
 the old track was begun. One-hundred-pound rails were laid 
 down, grades lowered, wooden trestles replaced with steel, and 
 in other ways the road was so changed as practically to make it 
 
 Ore vessels in Conneaut Harbor. 
 
 a new one. A maximum south-bound grade of thirty-one feet 
 per mile was secured over the entire route, an achievement of 
 no small difficulty in the hilly parts of Western Pennsylvania. 
 A steel bridge across the Allegheny two-thirds of a mile long 
 was the most noteworthy engineering feature of this road; 
 and the whole work of renewal and the building of forty-two 
 miles of new track occupied only fifteen months. By October 
 4th, 1897, ore trains consisting of thirty-five steel cars, each 
 carrying 100,000 pounds, were running from the company's own
 
 SOME IMPRESS/ I'E RECORDS 271 
 
 docks on Lake Erie over the company's own line to Bessemer, 
 and there distributed over the company's Union Railroad to the 
 blast-furnaces at Bracldock, Duquesne, and Pittsburg. It was 
 a long step in the progress towards self-sufficiency at which Mr. 
 Frick had long been aiming; and it had cost nothing beyond an 
 issue of bonds, which the volume of traffic furnished by the 
 Carnegie Steel Company itself made gilt-edged. 
 
 The results of the operation of this road, now known as the 
 Pittsburg, Bessemer and Lake Erie, and its docking facilities 
 at Conneaut, as set forth by Mr. J. T. Odell, its former vice- 
 president, are as follows : 
 
 " The lowest rate per ton per mile, the highest average 
 length of revenue haul in proportion to its track mileage, the 
 greatest density of tonnage in proportion to its freight-train 
 mileage, the greatest average paying load, and the lowest 'ton- 
 mile cost 'of any road on the American continent reporting to 
 the Interstate Commerce Commission. The average paying load 
 of all its freight trains, including three branches, and with but 
 little back loading, was, for the year ending December 31, 
 1899, 777 tons. It is confidently expected, when the south and 
 north bound tonnage is 70 per cent, and 30 per cent, respect- 
 ively, and the tonnage reaches 5,000,000 tons annually, as it 
 promises, that the average paying load will be not less than 
 900 tons, or four and one-half times greater than the present 
 average paying load of the country. The maximum weight of 
 the paying load for the year was 1,580 net tons, with the aver- 
 age, as before stated, of 777 tons. Of the ore trains, each 
 earned on a 3^-mill rate per ton per mile (gross ton) $5.13 
 per train mile. The road is laid with loo-pound rail and the 
 track ballasted with furnace slag. The bridges will carry 6,600 
 pounds to the lineal foot. The standard locomotive is the con- 
 solidation pattern, having cylinders 22 by 28 inches and weigh- 
 ing 170,000 pounds on the drivers alone. The ore equipment 
 consists mostly of steel cars, weighing 17 tons and carrying 
 50 tons of ore. The company is having built a few of what 
 will prove to be the heaviest locomotives in the world, having 
 cylinders 23 by 32 inches and weighing 217,000 pounds on the 
 drivers. With these locomotives the total weight of an ore 
 train, including the locomotive and light weight of the cars, 
 will be about 2,600 tons.
 
 2/2 
 
 A RELUCTANT SUPREMACY 
 
 Ore-discharging machines at Conneaut. 
 
 " But it is not only in the operation of the road that great- 
 est economy is obtained, but also in the transfer of the ore 
 from the lake steamers to the trains. The steel company owns 
 the entire harbor at Conneaut. Nine ships can be docked at 
 the same time. Twenty-five thousand tons of all classes of 
 freight can be handled every ten hours. The most modern ma- 
 chinery is used for handling ore and coal. A 6,ooo-ton ship 
 can be cleared in fourteen hours, and in the same time from the 
 moment the hatches are opened the ore can be at the furnaces 
 
 at Fittsburg. A new steam 
 shovel was completed last 
 winter by which a train of 
 35 to 40 cars will be loaded 
 with ore in two hours. A 
 4<D-ton car of coal can be 
 unloaded and partly trimmed 
 in the ship in thirty-six 
 seconds. Most of the 
 switching at Conneaut is 
 done by the haulage system 
 (a cable running between 
 the rails at about 4 miles 
 per hour). The operating 
 
 officers believe that with this railroad the utmost limit of all 
 that is possible in solving the problem of cheap transportation 
 has been reached. Their achievement shows what remains to 
 be done and can be done by the other railroads of this country 
 in the same direction." 
 
 The only gap that now remained was that on the Lakes. 
 To fill it the company should operate its own line of steamers. 
 While the contract with the Bessemer Steamship Company 
 provided for the conveyance of 1,200,000 tons a year, the steel 
 company was dependent upon the small fleet of ships owned by 
 individuals to a greater extent than seemed desirable ; and early 
 in 1899 the Oliver Iron Mining Company purchased the Lake 
 Superior Iron Company's fleet of six vessels, each capable of 
 carrying 3,000 tons, as well as its ore properties on the Mar- 
 quette range. Before taking over these steamers at the end of 
 the year, certain changes in organization were made in con- 
 formity with the suggestions of Mr. Oliver, contained in the
 
 LAKE TRA XSPOR TA T/t \\ 
 
 273 
 
 following letter to the Board of Managers of the Carnegie Steel 
 Company : 
 
 Under our attorney's advice, taking in view the legal com- 
 plications that might arise in a mining company being interested 
 in navigation, we have settled that our venture in the purchase 
 and building of vessels on the Great Lakes should be conducted 
 
 Ore docks. 
 
 under an organization distinct from the Oliver Iron Mining 
 Company. We have taken out a charter and organized the 
 
 PITTSBURGH STEAMSHIP COMPANY. 
 
 The officers of the Company, the Board of Directors and 
 the Stock interests are identical with those of the Oliver Iron 
 Mining Company. 
 
 To finance the Company, I propose, first a paid up capital 
 stock in cash of One million dollars ($1,000,000.00), and the 
 issue of 5 r r ' gold bonds, interest payable semi-annually, of four 
 million dollars ($4,000,000.00). The Union Trust Company of 
 Pittsburgh to be the trustee of a mortgage covering all the 
 vessels of the fleet, and to issue to the purchasers of the bonds 
 interim certificates for eighty per centum of the cost of the 
 vessels on the delivery to them of satisfactory bills of sale or 
 chattel mortgage for each vessel as it is turned over by the 
 seller or the builder of the vessel to the new Company; that is 
 18
 
 274 A RELUCTANT SUPREMACY 
 
 to say, as fast as each vessel is delivered to the hew Company, 
 the bondholders advance 80/0 of its cost, and the stockholders 
 the remaining 20% of its cost. On the completion of the fleet, 
 as now projected, bonds in proper shape, reciting what vessels 
 they cover, with proper requirements for insurance, etc., will 
 be exchanged by the Trust Company for the interim certificates 
 above recited. The cost of the vessels under contract (which 
 is all we propose to acquire this season) aggregate about two 
 million, nine hundred thousand dollars ($2,900,000.00). 
 
 Kindly advise me if the above plan is satisfactory to the 
 Carnegie interests. 
 
 Bonds to be payable as follows : 
 
 Series " A," Five years $1,000,000.00 
 
 Series " B," Ten years 1,500,000.00 
 
 Series " G," Fifteen years 1,500,000.00 
 
 Total $4,000,000.00 
 
 In this way, on the very day of Mr. Prick's retirement from 
 the chairmanship of the Carnegie Steel Company, the huge 
 corporation became a complete industrial unit, owning every- 
 thing it needed in its business, controlling every movement of 
 its material, and in all its operations, from mining the crude 
 ore to the shipment of the finished steel, paying no outsider a 
 price. 
 
 Ore docks by night.
 
 In a Mesaba mine. 
 
 CHAPTER XVIII 
 THE WORKINGS OF THE CORPORATE MIND 
 
 IN a former chapter refer- 
 ence was made to what was 
 there called the mental evo- 
 lution of the great indus- 
 trial organism whose growth 
 we are following, and a hint 
 was given of the important 
 part played in it by Mr. 
 Frick. One of the most 
 conspicuous directions of 
 
 this mental growth was that involved in the systematization of 
 the consultative work of the Board of Managers. 
 
 Although this board was the brain of a great body, its func- 
 tions were long performed without regularity or method, and 
 the results of its work were but imperfectly recorded. This is 
 one of the most surprising features of this great business ; for 
 while the workings of every furnace and every machine were 
 carefully watched and tabulated, the operations of the greatest 
 machine of all, its brain, were spasmodic, unmethodical, and 
 for the most part unnoted. The Board of Managers met by 
 chance, there being no fixed time for its meetings. Consulta- 
 tions and deliberations were conducted in a haphazard way, and 
 often no minutes of them were taken. If an important change 
 was to be made, perhaps a meeting would be called; or it 
 might happen that the managers most interested in it would 
 have an informal meeting at the works, when the matter would 
 be decided. The old minute-books of the various companies 
 
 often show a gap of several months without an entry. 
 
 275
 
 276 THE CORPORATE MIND 
 
 With the accession of Mr. Frick to the headship of the 
 concern, this was promptly changed. A rule was made that 
 the Board of Managers should meet every Tuesday at lunch, and 
 that a full report of their subsequent deliberations should be 
 kept. Similarly every Saturday, at noon, the different super- 
 intendents and their assistants, some foremen, purchasing and 
 sales agents and their principal assistants, to the number of 
 
 Superintendents at lunch. 
 
 thirty or more, met about a larger table, and, after lunching to- 
 gether, talked over all matters of common interest. Here the 
 unfriendly rivalry of former times gave place to a spirit of good 
 fellowship and mutual helpfulness. Around the friendly board 
 it was impossible for two important officers to refuse to speak 
 to each other for five years, as happened more than once in the 
 past. And such competition as grew up among them was that 
 of friends animated by a common purpose to do the best each 
 could for the association.
 
 MINUTES OF A BOARD MEETING 277 
 
 Of course none but officials were ever admitted to these 
 meetings ; and the results of their deliberations were kept in 
 profound secrecy. Except for the copies of the minutes sent 
 to Mr. Phipps and Mr. Carnegie, the records were never seen 
 by any one not entitled to attend the meetings in person. To 
 give completeness to this narrative, however, and to illustrate 
 in a practical way the workings of the corporate mind, the 
 official record of one of these meetings is here given. Nothing 
 has been changed in it, except that a long statement made by 
 Mr. Frick is omitted. This concerned the proposed sale of the 
 Carnegie- Frick companies, or in default of a sale, their consoli- 
 dation. It is referred to elsewhere. In other respects the fol- 
 lowing is an exact reproduction of the official minutes of a meet- 
 ing held in January, 1899. It is possible that many readers 
 will find an intrinsic interest in the discussions of these "young 
 geniuses " some of whom, by the way, have already reached 
 the dignity of grandsires. 
 
 At a meeting of the Board of Managers of 
 THE CARNEGIE STEEL COMPANY, LIMITED, 
 
 held at the general offices of the Association, Carnegie Build- 
 ing, Pittsburg, Pa., at 12 130 P.M., on Monday, January 16, 1899, 
 there were present MM. Frick (chairman), Singer, Schwab, 
 Peacock, Phipps, Clemson and Lovejoy (secretary); also MM. 
 George Lander, James Gayley and H. P. Bope. (Mr. Curry in 
 Pasadena; Mr. Wightman in Florida.) 
 
 The minutes of the meeting of the Board of Managers held 
 January loth were read, and, on motion, approved. 
 
 The following communication from the president to the 
 Board, under date of January I2th, was. read: 
 
 " As reported by Mr. Phipps last week, we have finally 
 closed for the purchase of the Bethlehem Plate Mills, which 
 purchase the Board has already approved. 
 
 " The Mills, as you are aware, comprise a Slabbing Mill of 
 the latest design; a 128" Plate Mill, complete in every particu- 
 lar; and a 42" Universal Mill of the latest and best construc- 
 tion. There are no changes in all these Mills we would suggest.
 
 27 8 THE CORPORATE MIND 
 
 "We should have a capacity of 12 to 14,000 tons of Plates 
 out of these Mills, besides some excess of Slabs which could 
 be sold outside. 
 
 " It is estimated that the cost of putting these Mills in oper- 
 ation; foundations, buildings, furnaces, etc., will be approxi- 
 mately $500,000.00, and would like the Board to authorize this 
 expenditure." 
 
 The following communication from W. E. Corey, general 
 superintendent, Homestead Steel Works, to the president, un- 
 der date of January i ith, was read : 
 
 "The building of ten (10) new Furnaces at Open Hearth 
 No. 3 will cost about $80,000.00 per Furnace, or a total of 
 $800,000.00. This, of course, includes all cranes, tracks, grad- 
 ing, filling in, etc., and also a stripper for the stripping of large 
 Ingots for the new Slabbing Mill. 
 
 " Kindly authorize the expenditure of this money, and 
 oblige." 
 
 The following communication from the president to the 
 Board, under date of January I2th, was read : 
 
 " The demand for Open Hearth, instead of Bessemer Steel, 
 is increasing each day. A careful calculation would indicate 
 that ten (10) additional Open Hearth Furnaces are necessary 
 for our Homestead Steel Works. 
 
 " Enclosed please find Mr. Corey's estimate and recom- 
 mendation for same. 
 
 " We would propose making the Furnaces identical in every 
 particular with those now built, which have been very satisfac- 
 tory. 
 
 " Would recommend that the Board permit me to proceed 
 with the erection of these Furnaces at once. They can be 
 completed within about five months." 
 
 MM. Phipps and Clemson moved the authorization of an 
 appropriation of $1,300,000.00, in accordance with the recom- 
 mendations of the president. 
 
 Mr. Frick : "That cost appears high." 
 
 Mr. Schwab: "Mr. Corey admits that it is high, but does not 
 
 want to get caught again with an insufficient appropriation. 
 
 He will not waste money, and, if all is not needed, so much 
 
 the better."
 
 COSTLY ADDITIONS AUTHORIZED 279 
 
 Mr. Frick : " We must have the Furnaces anyway, and may as 
 well appropriate the outside cost. These are large amounts, 
 but the whole matter has been thoroughly discussed outside 
 of the Board Meetings, and all appear satisfied." 
 
 Mr. Schwab : " These Furnaces will increase our capacity 30,- 
 ooo tons of Open Hearth Ingots per month. This pur- 
 chase renders it unnecessary to build the Plate Mill which 
 was agreed upon, although no appropriation was author- 
 ized when we discussed the Car Works. There is no 
 Plant I know of so well equipped as this. It is the latest 
 and best in Plate Mills." 
 
 Mr. Latider: " It is the right thing to do." 
 
 The motion was adopted ; the vote being unanimous, and 
 all present concurring. 
 
 The following communication from W. E. Corey to the 
 president, under date of December 3Oth, was read : 
 
 " In line with my conversation with you concerning the 
 changes in Beam Yard, beg to make the following report. In 
 the first plan as proposed in my letter of November i8th, it 
 will necessitate the expenditure of $40,000.00, and would en- 
 able us to make an average delivery of 10 days time on all 
 Beam and Channel orders. 
 
 " Under this arrangement 30$ of all Beams and Channels 
 would be cut from stock, which would increase the cost per ton 
 on Beams and Channels shipped from Homestead eight cents 
 per ton. 
 
 " Now in going over this matter the second time, it seems 
 to me that it would not be a paying investment to spend $40,- 
 ooo.oo and increase the cost of production, if there is any other 
 alternative. 
 
 " Now if our customers could be satisfied with an average 
 delivery of 15 days on all orders, I would, recommend that noth- 
 ing be done towards this expenditure for another year, or until 
 it is decided to move the Fitting Shop. 
 
 " I would, therefore, ask that you authorize an expenditure 
 in the Beam Yard of $15,000.00, to be expended as follows: 
 $6,000.00 each for two ten ton electric traveling cranes, one to. 
 be placed immediately outside the 40" Mill at the roadway, and 
 the other at No. 3 roadway to handle material from the small 
 saw ; $3,000.00 to be spent in moving small saw 40 feet due 
 west from the present location, and making necessary change 
 in tracks.
 
 280 THE CORPORATE MIND 
 
 " This would enable us to make i 5 day deliveries without 
 increasing the cost of production. 
 
 " Kindly advise me at your earliest convenience what you 
 think of this proposition." 
 
 Mr. ScJnvab : " These are only additional Cranes for the Beam 
 Yard equipment we have now. While we save nothing by 
 the expenditure, we save in time of rilling orders." 
 
 Mr. Frick : " Money spent in expediting delivery is well spent, 
 and especially now when we expect so large a business." 
 
 Mr. Schwab: " When this matter first came up in November, 
 I was unwilling to recommend the expenditure of $40,- 
 ooo.oo, and referred Mr. Corey's letter back to him. 
 When we rebuild the Fitting Shop, we can spend the 
 $40,000.00 to very much better advantage. I would 
 recommend the expenditure of $15,000.00." 
 
 On motion, (Peacock and Singer), the expenditure of $15,- 
 ooo.oo, as recommended by the president, was authorized ; the 
 vote being unanimous. 
 
 The following letter from W. E. Corey to the president, 
 under date of January i ith, was read : 
 
 " Please find below an approximate estimate of expenditure 
 for improvements at our Carrie Furnaces, as recommended by 
 Mr. G. K. Hamfeldt, Superintendent. 
 
 Furnace with new shell, down-take, and dust-catcher with 
 linings, incline with top arrangement, hoisting engine, 
 and one coke and limestone bin, with track for stock 
 yard, complete $136,000.00 
 
 Extension and relining of two stoves 18,000.00 
 
 One compound condensing blowing engine, 40" X 72" X 
 60" X 84", with foundation, extension to Blowing En- 
 gine House, with foundations and Piping 46,000.00 
 
 Weise Condenser, 3600 HP, complete 18,000.00 
 
 Total $218,000.00 
 
 "The detailed plans for same have not as yet been com- 
 pleted, but, as soon as completed, I will arrange with Mr. Gay- 
 ley to go over them with Mr. Hamfeldt. 
 
 " Kindly advise me if you will authorize the expenditure of 
 this money." 
 
 MM. Phipps and Clemson moved the authorization of an 
 expenditure of $218,000.00.
 
 PRICK TELLS SECRET OF srCCESS 281 
 
 Mr. Schwab : " This will put Carrie No. 2 in practically the 
 same shape as our other Furnaces, and will make the Fur- 
 nace equal to "F" or "G." It is in this direction we 
 must go in making improvements." 
 
 Mr. Gayley (In reply to the chairman) : " It should increase 
 the product 100 tons per day." 
 
 Mr. Schwab : " We have no place to use the surplus steam at 
 Carrie, and it will not pay us to compound the engines 
 there at present. We can compound them later on, if i^is 
 found advantageous." 
 
 Mr. Singer : " This is a wise thing to do. " 
 
 Mr. Peacock : " We should put all our Furnaces in good shape." 
 
 Mr. Gayley : " I am satisfied we need to do this." 
 
 Mr. Clcmson: "It is a mistake to do anything else but keep 
 our Furnaces in the best possible condition." 
 
 Mr. Lander: " I think it is the right thing to do." 
 
 Mr. PJdpps : " We all expected to do this when we bought the 
 Plant." 
 
 Mr. Lovejoy : "It is in line with our policy, and should be 
 done." 
 
 Mr. Gayley : " The Carrie Furnace Company intended to do 
 a part of this work, if they had not sold." 
 
 Mr. Frick : " It is a large amount ; but to our willingness to spend 
 large amounts in improvements, we owe our success." 
 
 The motion was adopted ; the vote being unanimous. 
 
 Mr. Schwab: "At a Meeting in New York of our principal 
 Partners and Managers, it was decided that the following 
 changes and new Interests should be made, commencing 
 with January i, 1899; subject to the approval of the 
 Board and of the Shareholders. 
 
 " It is proposed to give \% to each of the following : 
 
 W. B. Dickson ; 
 A. C. Case; 
 John McLeod; 
 Charles W. Baker; 
 
 and to give an increase of 
 
 \% to James Gayley ; 
 \% to D. M. Clemson ; 
 \% to A. M. Moreland ; 
 \% to L. T. Brown ; 
 \% to J. E. Schwab."
 
 282 THE CORPORATE MIND 
 
 On motion (Singer and Peacock), the following resolution 
 was adopted : 
 
 "Resolved; That F. T. F. Lovejoy, Trustee, be and is now 
 hereby directed, authorized and empowered to transfer out of 
 Trust ' N ' certain Capital of this Association, to the per- 
 sons and in the amounts named, as follows : 
 
 To James Gayley, \% or $27,777.78 ; 
 D. M. Clemson, \% or 41,666.67; 
 A. M. Moreland, \% or 27,777.78; 
 
 at its Book Value at the close of business December 31, 1898 ; 
 subject to #11 of the conditions of the "Iron Clad Agreement," 
 and subject also to confirmation at the next Meeting of the 
 Shareholders; and 
 
 "Resolved; That having so done, F. T. F. Lovejoy be 
 released and discharged from any further accountability as to 
 his Trusteeship for the seven-eighteenths per centum of the 
 Capital of this Association, the transfer of which is authorized 
 hereby;" 
 
 the vote being unanimous. 
 
 On motion, (Singer and Peacock), the following resolution 
 was adopted : 
 
 "Resolved ; That F. T. F. Lovejoy, Trustee, be and is now 
 hereby directed, authorized and empowered to transfer out of 
 Trust ' N ' certain Capital of this Association, to the Trust 
 Accounts and in the amounts named, as follows : 
 
 To Trust " W " for L. T. Brown, \% of \% or $27,777.77 ; 
 
 To Trust "AB" for J. E. Schwab, | of \% or 55,555.55; 
 
 To Trust " AE" for VV. B. Dickson, 1 of \% or 27,777.78; 
 
 To Trust "AF" for A. C. Case, l of \% or 27,777.78; 
 
 To Trust "AG" for JohivMcLeod, | of \% or 27,777.78; 
 
 To Trust " AH " for Chas. VV. Baker, i of \% or 27,777.78 ; 
 
 the same having been sold to the said persons at Book Value 
 December 31, 1898; subject to all of the conditions of the 
 ' Iron Clad Agreement,' and subject also to confirmation at 
 the next Meeting of the Shareholders " ; 
 
 the vote being unanimous.
 
 THE CONNEAUT TUKE PROJECT 283 
 
 Mr. Schwab : " As the members of the Board are aware, I go 
 East tonight and sail for Southampton on Wednesday, 
 expecting to be back here April 4th. During my absence, 
 the plans for the new Car Works will proceed without any 
 delay, and be ready with actual bids for all the machinery 
 and other Contract items by April ist, when an estimate 
 of the cost will be given to the Board and an appropriation 
 asked for. No expenditure will be necessary meantime." 
 
 (In reply to the chairman) : 
 
 " I have not figured closely on the cost at all, but would 
 say in round figures the Works will cost from $750,000.00 
 to $1,000,000.00." 
 
 Mr. Peacock: "I think while we are on the subject of Car 
 Works, it would be well to consider our present position 
 with the new Steel Car combinatton. They have already 
 approached us on the subject of a Contract, and would be 
 willing to buy probably i ,000 tons of Steel per day, pro- 
 vided we stay out of the Steel Car business. I think, 
 under a favorable Contract, I would favor this, especially 
 since they are re-organized, and will be in good financial 
 condition and safe to sell to." 
 
 Mr. Schwab : " I do not think anything should prevent our 
 going ahead with our Car Works. " 
 
 Mr. Clemson : " There is room for two, and they will have to 
 come to us." 
 
 Mr. Phipps : " I would favor going ahead." 
 
 Mr. Lauder : " It would bear some thought, but, on the whole, 
 I think I would go ahead with the Works." 
 
 Mr. Singer: "I think we should go ahead with our plans, but 
 I am a little inclined to agree with Mr. Peacock. There 
 is a great deal of detail connected with the Car business, 
 and we will probably make as much money if we sell the 
 Plates as if we turned the Plates into Cars and sold them." 
 
 Mr. Gay ley : "I would go ahead with the \Vorks." 
 
 Mr. Clemson : " I would build the Car Works, and would also 
 look into the Steel Pipe business. I believe there is 
 money in that." 
 
 Mr. Lovejoy : " I think we should go ahead with the Works, 
 believing we can sell both Plates and Cars, and, having the 
 Car Works, we can compel Schoen-Fox to buy from us." 
 
 Mr. Frick: " Is our Car as good as the Schoen or Fox car? " 
 
 Mr. Schwab: "I think it is better, but it is heavier. We 
 expect to improve on it, and I believe we can make it as
 
 284 THE CORPORATE MIND 
 
 light as theirs, and, at the same time, a better and stronger 
 Car." 
 
 Mr. Frick : " I am strongly in favor of going ahead. There 
 will be room for both." 
 
 Mr. Clemson : " We brought in some good Gas Wells during 
 the latter part of December, and are now in as good shape 
 for Gas as we were this time last year. I will guarantee a 
 sufficient supply of Gas for this year." 
 
 Mr. Frick: "That is very gratifying news." 
 
 At this point, Mr. Clemson withdrew from the meeting, 
 having been called as a witness in a case pending. 
 
 A letter from Andrew Carnegie to the president, under date 
 of December 3Oth, was read, as follows : 
 
 " Several times I have been upon the point of writing you 
 about settling with James C. Carter, the lawyer here. 
 
 " We consulted him in regard to our claim against the Gov- 
 ernment for remission of fine imposed [for supplying defective 
 armor-plate]. I suppose it is the general feeling that we had 
 better not disturb that question, better just let it pass. If you 
 find this to be so in the Board, then I should like a note to be 
 written to Mr. Carter stating that we do not wish the case pur- 
 sued any further and to send us his bill. His address is No. 
 277 Lexington avenue." 
 
 Mr. Frick : " Suppose Mr. Phipps should write to Mr. Carter 
 in effect as follows : 
 
 " ' We have not yet decided whether or not we wish to 
 abandon our claim, but, should we decide to press it, we 
 would wish to retain him. Meantime, however, as the 
 case has been hanging fire for some time, we would be 
 glad to have a bill for his services to date, which we will 
 pay.' 
 
 " That complies with Mr. Carnegie's wish, and, at the 
 same time, does not close the matter absolutely." 
 
 This met with general approval, and, on motion, the matter 
 was so decided upon. 
 
 Mr. Frick: "I would like to ask Mr. Peacock if he is selling 
 much Material today, and if he is getting advanced 
 prices? "
 
 AN INTERESTING CONTRACT 285 
 
 Mr. Peacock : " I think the only increase in Billets sold, shown 
 in our statements during the last four weeks has been 
 where we have sliding scale Contracts. We have today 
 nothing to sell but Structural Material, on which we are 
 getting good prices. 
 
 " We have under consideration a Contract with the 
 American Tin Plate Company of New Jersey, which has 
 been agreed to, subject to the action of the Board." 
 
 The Contract was read in full, the features thereof being : 
 
 Quantity: 125,000 gross tons of Tin and Black Plates, 
 Bars (not including Sheet Bars) per year, for a period of Five 
 (5) years, from July I, 1899, an ^ thereafter until after One 
 year's written notice, which may be given by either party, on 
 or after July I, 1903. 
 
 The amount to be 
 added to the price 
 
 PRICE: of Pig Iron for 
 
 When the Price of Pig Sheet Bars shall 
 
 iron per gross ton is : be : 
 
 $ 8. 99 or under , $5-45 
 
 9.00 to 9.99 5- 60 
 
 10.00 " 10.99 5-75 
 
 11.00 " 11.99 6- 
 
 12.00 " 13.99 6>2 5 
 
 13.00 " 14.99 6-5 
 
 13.00 " 14.99 ^'75 
 
 15.00 " 15.99 7-oo 
 
 i6.ooorover 7- 2 5 
 
 Price to be fixed monthly and averaged for six months. 
 
 Payments : Cash on the 2Oth of each month. 
 
 Deliveries : Approximately 10,416 tons per month. 
 
 Buyer may specify up to \o% Basic Open Hearth at 1.50 
 per ton advance. 
 
 Buyers may not re-sell without first putting Material through 
 a process of manufacture. 
 
 Sellers agree, so long as the Buyers perform their part of 
 this Contract " They will not sell to any competitive person or 
 Company in the United States, Tin or Black Plate Bars of the 
 character covered by this Contract ;" and Sellers agree "Not 
 to enter into competition with The Carnegie Steel Company, 
 Limited, in any of the products which The Carnegie Steel 
 Company, Limited manufactures, during the life of this Con- 
 tract. "
 
 286 THE CORPORATE MIND 
 
 Buyers also agree, if ,their capacity be increased, Sellers 
 shall have the privilege of selling the same proportion of the 
 new requirements. 
 
 Any dispute as to price to be referred to A. H. Childs. 
 
 Mr. Frick : " Would it not be well to have all matters of dis- 
 pute under this Contract referred to an Arbitrator? " 
 
 Mr. Peacock : " It might be, although our Attorneys advise us 
 our position is better if we do not agree to defer all mat- 
 ters to an Arbitrator, since we would probably be com- 
 pelled to appeal to the Courts to sustain the award of an 
 Arbitrator, and we might as well fight out the whole thing 
 in Court." 
 
 Mr. Frick : " I do not agree. The decision of an Arbitrator is 
 usually binding and conclusive among reputable business 
 concerns." 
 
 All spoke in favor of the making of this Contract, and, on 
 motion, (Schwab and Phipps), its execution was authorized ; the 
 vote being unanimous. 
 
 Mr. Peacock : "This represents 25^ of their total requirements 
 
 of last year." 
 Mr. Schwab : " It is more than double what we sold last year." 
 
 Mr. Peacock: "We have in process of negotiation a Contract 
 with the National Transit Company for Plates, but it is 
 not quite in shape to report to the Board. It also is a 
 sliding scale, and on $10.00 Pig, gives us $1.15 for Sheared 
 Plates." 
 
 Mr. Schwab (In reply to the chairman) : 
 
 "That would give us $8.00 per ton profit." 
 
 On motion, (Phipps and Schwab), the making of this Con- 
 tract was left with Mr. Peacock, with power to act. 
 
 MM. Gayley and Clemson, appointed as a Committee De- 
 cember 1 3th, made the following report : 
 
 " The Committee appointed to investigate the property of 
 the Pittsburg & Conneaut Dock Company, at Conneaut Har- 
 bor, Ohio, to determine if land was available for the erection of 
 a Blast Furnace Plant, would report as follows : 
 
 " A number of plans have been prepared to determine the 
 best location, and with such plans before us a personal inspec-
 
 288 THE CORPORATE MIND 
 
 tion of the property was made during the past week. The plot 
 selected is just east of the present coal unloading slip. The 
 new drawbridge crossing the creek to the new dock will permit 
 the largest ore vessels to pass. At a point on the creek 300 
 feet east of the drawbridge the vessels can turn into a slip, 
 which will have to be dredged, which allows ample room for 
 stock yards and furnace plant on the East side. By this ar- 
 rangement, there is obtained on the Western side a strip of 
 ground 400 feet wide which can be used by the Dock Company 
 in further dock extensions, the length of such dock can be from 
 1,000 to 2,000 feet long as found necessary to dredge. There 
 is provided in this arrangement ample room for a furnace plant 
 between the slip and the hillside, and lengthwise will be found 
 room for a number of furnaces. The low ground extending 
 along the railroad for some distance affords an excellent space 
 for disposal of slag for many years, or the slag can just as read- 
 ily be conveyed to the upper end of the new dock and dumped 
 into the lake, and in this way providing for dock extensions. 
 There is sufficient flat land adjoining the furnace location, of 
 which the Dock Company owns part, which if filled with slag 
 would be suitable for Steel Works and other manufactories. 
 
 " The slip your Committee had in view for a furnace site 
 comprised about 25 acres, with plenty of just as suitable prop- 
 perty adjoining. 
 
 " The dock frontage at Conneaut for discharging ore is as 
 follows : 
 
 Old Dock 1,900 feet. 
 
 Direct unloading Dock 1,200 " 
 
 New Dock (under construction) 1,100 " 
 
 Total 4,200 
 
 New Dock can be extended i , 100 
 
 Furnace Dock as outlined i ,000 
 
 Making a Total of 6,300 feet. 
 
 and this can be increased by extensions into the lake and of the 
 Furnace slip. The above figures are for ore unloading alone, 
 and do not include the side of dock for coal or rail unloading. 
 
 " A Furnace at Conneaut Harbor making 300 tons of iron 
 per day would require per annum 100,000 net tons of Coke and 
 40,000 gross tons of limestone." 
 
 Mr. Frick : " We will leave that report on the Minutes for con- 
 sideration, and take up the matter at some future time. "
 
 THE CONNEAUT SCHEME 289 
 
 Mr, Gay ley : " We have made the following purchases of Man- 
 ganese Ore : 
 " Caucasian Ore : 
 
 "Everitt & Company, 10,000 tons at 10^ pence, ship 
 ment March to September. 
 
 "F. Haeberlin, 10,000 tons at 10^ pence, shipment 
 March to October. 
 
 "John Carr & Company, 6,000 tons at 10^ pence, 
 shipment March to May. 
 " Cuban Ore : 
 
 " We have purchased from the Ponupo Mining & Trans- 
 portation Company, their product for this year up to 
 25,000 tons at 24 cents per unit, at sea- board. " 
 Mr. Gay ley (In reply to the chairman) : 
 
 " We have several old Caucasian Ore Contracts at lower 
 prices than these, but find it difficult to get deliveries. 
 Making these Contracts, we will be able to get deliveries 
 under both the old and new Contracts. These prices on 
 Caucasian Ore are up about $1.50 per ton, while the Cu- 
 ban Contract has come down about $2.00 per ton. The 
 average increase in the cost of Ferro-Manganese this year 
 will be $1.50 per ton." 
 
 Mr. Peacock : " But we are getting from $4.00 to $5.00 per ton 
 more for Ferro than we did a year ago." 
 
 On motion, (Schwab and Peacock), the purchases reported 
 were approved, ratified and confirmed. 
 
 Mr. Gayley : " The Operations at Conneaut Dock, for the five 
 days ending January 1 3th, were as follows : 
 
 Receipts, None. 
 
 Shipments, 11,359 tons. 
 
 (In reply to the chairman) : 
 
 " Everything at the Docks will be ready for next year's 
 business." 
 
 Mr. Frick : " It would be well to bear in mind the necessity of 
 getting the Cars under Contract with the Schoen Company 
 in time. Mr. Gayley might put a man on to look after 
 this." 
 
 Mr. Bope, as assistant general sales agent, submitted the 
 following report :
 
 2 9 o THE CORPORATE MIND 
 
 STATEMENT OF SALES OF STANDARD RAILS SINCE 
 NOVEMBER 18, 1898. 
 
 Sales. Options (minimum). Totals. 
 
 Carnegie 326,623 46,000 372,623 
 
 Illinois 342,713 36,000 378,713 
 
 Cambria 65,266 65,266 
 
 Colorado 20,698 20,698 
 
 Total 755,300 82,000 837,300 
 
 " All of our own sales above reported have been included 
 in our report of obligations following, although formal Contracts 
 for only 197,000 tons have been executed." 
 
 " The statement given below compares our estimated obliga- 
 tions (for the . classes of material specified) at the opening of 
 business, Friday, January 6 and January 1 3, 1 899 : 
 
 Material. Jan. 6th. Jan. isth. Difference. 
 
 Rails.. 564,110 556,541 Loss 7,569 
 
 Billets, Blooms, Sheet 
 
 Bars, etc 445,22? 433,739 Loss 11,488 
 
 Structural and Ship Ma- 
 terial., ... 174,564 180,923 Gain 6,359 
 
 Axles and Bars 38,110 39,742 " 1,632 
 
 Plates 41,693 46,245 " 4,552 
 
 'Total. .I........ 1,263,704 1,257,190 Loss6,5i4 
 
 "All in Gross Tons, based on our minimum obligations." 
 
 Mr. Phipps : " As the members of the Board are aware, we 
 have been building a foot-bridge over the Railroad at Du- 
 quesne, and are asked to sign a Contract, agreeing to keep 
 it in good order." 
 
 -On motion, (Phipps and Schwab), the execution of such a 
 Contract was authorized ; the vote being unanimous. 
 
 Mr. PJiipps : " We have divided the Fawcett Land into Lots, 
 and a plan has been prepared showing 29 Lots, on each 
 side of the boulevard. This plan should be adopted, in 
 order that it may be recorded in the Court House." 
 
 On motion, (Schwab and Peacock), the plan submitted was 
 approved and adopted ; the vote being unanimous.
 
 PROJECT TO SELL OCT 291 
 
 Mr. PJiipps : " Collections have been coming in so freely that 
 we have found it advisable to anticipate our Ore payments, 
 up to and including those for March." 
 
 Mr. Lander : " Referring to the question of Lake freight on 
 Ores : I think we can transport much cheaper than it is 
 being contracted for, by building large barges and handling 
 these by tugs in relays, running the business as a Railroad 
 would transport cars. The barges should hold say 10,000 
 tons ; two barges per day during the shipping season run- 
 
 * Whaleback ore steamers in port. 
 
 ning regularly would give us our supply, and would, I be- 
 lieve, although I have not figured on it in detail, effect a 
 saving of 40 to 50$ in freight cost." 
 
 Mr. Frick : " In this connection, I \yas told by W. L. Brown 
 that they transported ore from Escanaba to South Chicago 
 for 17 cents. That should be looked up by Mr. Gayley, 
 and we should also bear Mr. Lauder's suggestion in 
 mind. " 
 
 Mi: Schu'ab : " I think it practicable, but do not see where the 
 great saving would come in." 
 
 Mr. Gay Icy : " The barges suggested are only 3,000 tons larger 
 than those now in use. The traffic is a little uncertain 
 on the Lakes and tugs might have to lie over and lose time. 
 This is what keeps the rates higher than they would be
 
 292 THE CORPORATE MIND 
 
 otherwise. The suggestion is worthy of investigation, and 
 I will take it up." 
 
 Mr. Frick here made the statement concerning the reorgani- 
 zation of the company, and asked : " Whom will you name as 
 the Committee ? " 
 
 On motion, (Schwab and Singer), MM. Frick, Peacock, 
 Phipps (L. C.) and Lovejoy were appointed as the Committee, 
 in charge of the Organization of THE CARNEGIE COMPANY, 
 LIMITED ; there being no dissent. 
 
 Mr. Frick : " The Committee will report progress to the Board 
 from time to time; meanwhile, all should consider this, 
 and be prepared to make suggestions on any points that 
 occur to them. 
 
 " I may add that the question of Buying and Selling 
 Value of Capital Stock in the new Company that is, what 
 will be paid to retiring Partners, or what will be paid by 
 new Shareholders admitted is having careful consider- 
 ation, will be fixed on a fair basis, and will be set forth in 
 an Agreement similar to our present ' Iron Clad Agree- 
 ment,' to be signed when the new Company takes posses- 
 sion." 
 
 On motion, adjourned. 
 
 (Signed) LOVEJOY, 
 
 Secretary. 
 Approved at meeting held, 
 
 Chairman Board of Managers. 
 
 Copy to A. C., New York;' 
 
 H. P., Jr., Washington, D. C. ; 
 
 H. M. C., Pasadena, 
 17 January, 1899.
 
 CHAPTER XIX 
 THE ZENITH OF PROSPERITY 
 
 , 
 
 IN 1889 negotiations were 
 entered into by Andrew Car- 
 negie with certain English 
 bankers and capitalists with 
 a view of selling out the 
 iron and steel enterprises with 
 which he was connected. At 
 
 that time British investors were 
 p? 
 
 absorbing American industrial 
 stocks with astonishing avidity; and 
 Carnegie, believing the zenith of pros- 
 perity had been reached in his own 
 
 business, thought the time an opportune one to sell out to 
 the English. The project was resisted by Mr. Phipps, who 
 had sold seven-eighteenths of his interest the previous year; 
 but he finally yielded to his partner's insistence and gave a 
 reluctant consent to the sale of the properties. 
 
 So far as could be seen at the time, Carnegie's lack of faith 
 in the future was justified. Three years before, the profits of 
 the several companies had amounted to nearly three million dol- 
 lars. In 1887 they aggregated close on three and a half mill- 
 ions. Then in 1888 they dropped to $1,941,555; ar| d it 
 seemed a prudent measure to slip out of the business on what 
 looked like the passing boom of 1889. The negotiations, how- 
 *ever, had no satisfactory result; and Mr. Phipps, hearing of 
 their failure, expressed his relief. Incidentally he gave ex- 
 pression to his opinion on the impropriety of selling out to a 
 
 293
 
 294 THE ZENITH OF PROSPERITY 
 
 trust an opinion that makes strange reading nowadays. Here 
 is the beginning of the letter he wrote to Mr. Carnegie : 
 
 GRAND UNION HOTEL 
 
 Dresden, Saxony. 
 
 Nov. i, 1889 
 DEAR ANDREW 
 
 Few pleasures on a foreign trip are equal to a friendly letter 
 from home like yours of the i8th. 
 
 I am gratified that we are not to go out of business, and 
 especially to make room for a trust, which is by no means a 
 creditable thing. As you say the tariff would be repealed on 
 rails and rightly so. 
 
 With Mr. Frick at the head, I have no fear as to receiving 
 a good return upon our capital. Being interested in manufac- 
 turing keeps us within touch of the world and its affairs in- 
 stead of being on the shelf. Of course I am anxious that 
 you should not be worried by the business only pleasantly 
 interested. . . . 
 
 Yours truly 
 
 H. P. Jr. 
 
 It was a very fortunate thing for Carnegie, Phipps, and all 
 the partners that the project failed; for in 1889 the profits of 
 the year amounted to $3,540,000, the largest up to that date in 
 the history of the various enterprises, despite the fact that rails 
 were down to their lowest point, $29.25. Next year's profits 
 were $5,350,000. The effect of Mr. Frick's management was 
 beginning to be seen. In 1891, owing to dwindling prices and, 
 in larger measure, to excessive cost of labor at Homestead, there 
 was a falling off of a million dollars ; and a still further reduc- 
 tion took place in 1892, the year of the strike. The profits this 
 year were only $4,000,000. In 1893 panic year a further 
 reduction of a million dollars was recorded; and this marked 
 the bottom. Thenceforward the annual balance sheets showed 
 an ever-increasing profit, regular and slow at first, then by 
 extraordinary leaps and bounds. Here is the gratifying 
 record :
 
 PROFITS NOW FIRST PUBLISHED 295 
 
 NET PROFITS OF THE CARNEGIE ASSOCIATIONS. CARNEGIE 
 BROTHERS & CO., LTD. (TO 1892), CARNEGIE, PHIPPS & CO., 
 LTD. (TO 1892), AND THE CARNEGIE STEEL COMPANY* 
 LTD. (FROM JULY, 1892). 
 
 1889 .............. $3,540,000* 
 
 5,350,000 
 
 1891 ............... 4,300,000 
 
 1892 ................ 4,000,000 
 
 1893 ................ 3,000,000 
 
 1894 ................ 4,000,000 
 
 1895 $5,000,000 
 
 1896 6,000,000 
 
 1897 7,000,000 
 
 1898 11,500,000 
 
 1899 21,000,000 
 
 plus $4,500,000 reinvested. 
 
 These sums, added to those given on a previous page for the 
 years 1875 to 1888 inclusive, bring the aggregate net profits of 
 all the Carnegie associations to the impressive total of $93,- 
 391,005.41. In the year 1900 the last of its separate exist- 
 ence the Carnegie Steel Company made a profit of nearly 
 $40,000,000, and a sum was taken from the Contingency Fund 
 to bring it up to this even figure. 
 
 It is believed by the Carnegie officials, and with some show 
 of reason, that this magnificent record was to a great extent 
 made possible by the company's victory at Homestead. From 
 that time on the firm profited by the heavy investments it had 
 made in labor-saving machinery; and costs got so low that one 
 year when the Carnegies made over four million dollars, their 
 chief competitor, the Illinois Steel Company, had upwards of a 
 million dollars' loss. The following year the Carnegies made 
 over five millions, while the Chicago company made only $360,- 
 ooo. By 1897 the cost of steel rails on cars at the Braddock 
 mill was only $ 1 2 a gross ton ! 
 
 One of the most marked economies in production resulted 
 soon after the Homestead strike, when Mr. Frick created a posi- 
 
 * At this date a change was made in the method of accounting, by which the 
 odd sums were dropped from Profit and Loss and put into a " Contingency Fund." 
 Later any amount under half a million was so disposed of ; and, on the other hand, 
 when the Profit and Loss account showed an odd sum of more than half a million, 
 enough was borrowed from the Contingency Fund to make the total balance in 
 even millions. That is why, on another page, the profits of the association are 
 given to within a cent, while here they are stated in even millions.
 
 296 THE ZENITH OF PROSPERITY 
 
 tion, without any distinctive name, for Mr. P. R. Dillon, who 
 had done such excellent work at the Union Iron Mills and at 
 Beaver Falls. His duties were advisory, covering mechanical 
 as well as labor equipment, and extended to every department 
 of the company's service. By skilful adjustments he increased 
 the capacity of one group of workers after another, here adding 
 a man, there taking two away; in one place gearing up the 
 machinery, in another reducing it, until a high degree of me- 
 chanical perfection was reached, and there was not a super- 
 fluous wage-earner in the shops. At Homestead alone five 
 hundred men were thus saved ; and in all the Carnegie works 
 
 The Carrie Furnaces. 
 
 the reductions amounted to over fifteen hundred workmen. 
 And this without diminishing the output of a single group. 
 Indeed, the better practice thus resulting soon brought back the 
 displaced men ; and the tonnage of the works increased more 
 rapidly than ever before. The increase between 1893 and 1894 
 amounted to almost as much as the entire output of the works 
 in 1888, and exceeded it the following year. 
 
 During these years and those immediately following them 
 the growth of the several works was nothing less than phenome- 
 nal. . No great expansion was possible at the older establish- 
 ments, such as the Union Iron Mills and the Lucy Furnaces; 
 but at Braddock, Homestead, and Duquesne additions were 
 made every year greater than the entire plant had been a short
 
 AMAZING RECORD OF GROWTH 297 
 
 time before. At Homestead one set of open-hearth furnaces 
 was rapidly added after another, and new mills erected to finish 
 the increased output of steel. In one case only sixty days in- 
 tervened between the turning of the first sod and the casting of 
 an ingot on the same spot. The two Carrie furnaces, just 
 across the river, were bought by Mr. Frick with his usual 
 issue of bonds, and the bonds liquidated out of profits. Later 
 two other furnaces were added; and these great stacks have 
 broken the world's record for yearly tonnage. At Duquesne 
 the same nervous activity was displayed. Four huge blast- 
 furnaces were built to supply the metal required by the exten- 
 sive open-hearth plant that soon supplemented the two Besse- 
 mer converters which Mr. Frick found there when he bought 
 the works. At the Edgar Thomson works almost every year 
 witnessed an addition to its great battery of blast-furnaces, un- 
 til Kloman's little Escanaba stack was but as a single letter in 
 half the alphabet. Here, expressed in gross tons of steel in- 
 gots made, is the great record of the growth of the combined 
 business of these plants under the management of Henry C. 
 Frick : 
 
 1888 332,111 
 
 1889 536,838 
 
 1890 '. 660,071 
 
 1891 797,286 
 
 1892 877,602 
 
 1893 863,027 
 
 1894 1,115,466 
 
 1895 1,464,032 
 
 1896 1,375,249 
 
 1897 1,686,377 
 
 1898 2,171.226 
 
 1899 2,663,412 
 
 The import of these statistics is seen by a comparison. In 
 1885 Great Britain led the world in the production of steel. 
 Her total output for that year was 695,000 tons less than the 
 product of the Carnegie Steel Company in 1899. 
 
 During this period the H. C. Frick Coke Company, while 
 still supreme in its field, had not expanded with anything like 
 equal rapidity. This was partly because it was already great 
 enough to supply the Carnegie demands twice over, and partly 
 because its profits and credits had been used to develop the 
 steel company. Beginning as early as 1888, during the Edgar
 
 298 
 
 THE ZENITH OF PROSPERITY 
 
 Thomson strike, the credit of the coke company had been con- 
 tinuously used to strengthen the steel companies ; and ambitious 
 as Mr. Frick was to put the latter concerns at the head of the 
 steel-producing establishments, not only of America, but of the 
 world, he let the profits of his own special business go into 
 blast-furnaces and open-hearth plants, when his personal promi- 
 nence would have been furthered by putting them into coal 
 lands and new ovens. 
 
 In 1 899 the H. C. Frick Coke Company owned 40,000 of 
 the 60,000 acres of unmined coal land in the Connellsville re- 
 
 Shoveling ore from its native bed into cars. 
 
 gion, 20,000 acres of surface land, 1 1,000 coke-ovens, 2,500 
 railroad-cars, and 3,500 dwellings. Its capital was $10,000,- 
 ooo, of which Andrew Carnegie personally owned a little over 
 one-quarter, the Carnegie Steel Company about the same, and 
 the rest was held by Mr. Frick and a number of smaller own- 
 ers, of whom the principal ones were Mrs. T. M. Carnegie and 
 Mr. John Walker. It was in no way affiliated with the Car- 
 negie Steel Company, except that it worked in harmony with it. 
 At times the necessities of the latter conflicted with its proper
 
 MORE SCHEMES TO SELL OUT ' 299 
 
 interests, and then these had to give way to the Carnegie con- 
 trol. 
 
 Ten years having elapsed since the failure of the attempt to 
 sell the works to English investors, new schemes of a like char- 
 acter were made in 1899. For a long time past Mr. Carnegie 
 had lived principally abroad, and Mr. Phipps had withdrawn 
 from active participation in the affairs of the company. Mr. 
 Prick's had been the guiding hand that had led the concern to 
 a prosperity surpassing the dreams of the most sanguine of his 
 colleagues; and in all plans for the future his continued leader- 
 ship seemed a necessity. But Carnegie was loath to resign in 
 favor of one whose prominence threatened to overshadow his 
 own; and the plans he made for his own final withdrawal in- 
 variably included the simultaneous resignation of Frick. And 
 Frick, full of energy and not yet fifty years of age, had no 
 thought of resigning; so that the plans never got beyond the 
 nebulous stage until the shock of litigation forced them into 
 some degree of definiteness. The result was an illustration of 
 what Herbert Spencer calls " a consolidation effected by war." 
 
 Before dealing with this sensational suit and the causes 
 leading up to it, a more detailed reference should be made to 
 some of these earlier schemes of consolidating the steel and 
 coke businesses, and selling them to outsiders. This will serve 
 to correct the prevalent idea that the sale which was finally 
 made to Mr. J. Pierpont Morgan for the United States Steel 
 Corporation was due entirely to commercial conditions, and not 
 to any desire on the part of the Carnegie people to be rid of 
 their property. 
 
 Early in January, 1899 to be specific, on Thursday, the 
 5th of that month a meeting was held at the house of An- 
 drew Carnegie in New York, attended by Messrs. Hy. Phipps, 
 Frick, Schwab, Lovejoy, Peacock, and Lauder, for the discus- 
 sion of two questions. The first was the price that should be 
 named for the properties of the Carnegie Steel Company and
 
 300 THE ZENITH OF PROSPERITY 
 
 the H. C. Frick Coke Company in response to certain overtures 
 to purchase which had been made by a syndicate of New York 
 and Chicago capitalists. The second question was whether the 
 two companies should be consolidated in case of a failure to 
 sell them, and on what terms. Both matters were carefully 
 considered; and a decision to sell having been reached, the 
 price of $250,000,000 was fixed upon for the steel company's 
 stock, " carrying with it all that is on its books," including the 
 shares in the coke company. Payment was to be made one- 
 half in cash and one-half in fifty-year five-per-cent. gold bonds. 
 
 When these terms were laid before the syndicate they were 
 rejected. While the members did not say so, they had evi- 
 dently expected to make a partial payment in stock. 
 
 A consolidation of the coke and steel business was then 
 decided upon; and on January I4th Andrew Carnegie wrote his 
 wishes to his cousin, George Lauder, as follows : 
 
 "Mr. Rodgers, Standard Oil and Federal, said truly, 'Too 
 big a dog to wag so small a tail.' Now H. C. F. and I talked 
 over the matter. He will proceed to get plan, new charter, 
 bonds, etc., as proposed. 
 
 I wish you and Peacock and Lawrence, Clemson, Lovejoy, 
 Gayley, etc., to decide whether you wish to buy the other 
 Frick Coke Company Stocks at $35,000,000.00, which Frick 
 now wants ; or prefer to let things stand as they are with the 
 present fixed rate on Coke. 
 
 The Frick Company price was $30,000,000.00, if $75,000,- 
 ooo.oo Mortgage Bonds only made by C. S. Co., and you may 
 prefer to do this, or might make the Mortgage $100,000,000.00, 
 and only issue $75,000,000.00 now, and provide only the other 
 issue for new property to be acquired, which would be the same 
 thing practically as the $75,000,000.00 Mortgage. 
 
 I am just as willing to keep my Frick Company Stock as to 
 sell it to C. S. Co., and I suppose H. C. F. is. He can make 
 it pay us more than the interest on the $35,000,000.00. 
 
 You should consult all the Managers, including Singer, and 
 let each state frankly his preference. Also ask Schwab if he 
 has not gone; if he has, I will see him here. 
 
 It is a matter for all of you to decide, not for me. As I 
 told you, C. S. Co. paying in Bonds makes it easy payments
 
 CARNEGIE'S FORECAST OH PROFITS 301 
 
 no cash which is different from heavy yearly payments to 
 make. Personally am glad to have this year to ourselves to 
 show what we can do. If we wish to sell out, believe me, we 
 can do so ourselves for more than $250,000,000.00." 
 
 The reference to the proposed purchase of " the other Frick 
 Coke Company Stocks at $35,000,000" is misleading. The 
 price was to include all the stock of the coke company, as is 
 shown by the Frick plan to which Mr. Carnegie refers. The 
 clause relating to this reads : 
 
 "The [projected] Carnegie Company Limited shall purchase 
 all the property and business of the H. C. Frick Coke Com- 
 pany, the Youghiogheny Northern Railway Co., Youghiogheny 
 Water Co., Mt. Pleasant Water Co., Trotter Water Co. and the 
 Union Supply Co. Ltd. subject to all their debts, obligations 
 and engagements, or all of the Capital Stock of said Companies 
 as shall in the consummation of the general purpose of this 
 agreement be subsequently deemed most desirable by the Com- 
 mittee hereinafter designated, for the sum of Thirty-five million 
 dollars ($35,000,000) to be paid as hereinafter stated." 
 
 In other words the entire business of the Frick Company 
 and all its dependencies was offered at $35,000,000. This is 
 exactly half the price paid for it a year later in settlement of 
 the famous litigation. 
 
 Mr. Frick's plan, thus referred to, of a company with a 
 capital of $60,000,000 and a bond issue of $100,000,000, was 
 not acceptable to Mr. Carnegie, who drew up a prospectus in 
 substitution of it, and sent it with the following letter to his 
 colleagues in Pittsburg. The phraseology of these documents 
 is not very clear ; but in the prospectus the retirement of Mr. 
 Frick is distinctly provided for : 
 
 "WE (THE CARNEGIE STEEL COMPANY, LIM- 
 ITED, and the H. C. FRICK COKE COMPANY) [shall] 
 make this year, under the lowest prices on record, say close to 
 $15,000,000.00. 
 
 We had only six months of Carrie Blast Furnaces ; not six 
 months work of the big new Blooming Mill ; no Armor deliver-
 
 302 THE ZENITH OF PROSPERITY 
 
 ies, except for three months ; a loss of nearly $ i ,000,000.00 
 profit. 
 
 Had these been running as now our net would have been 
 beyond $ 1 5 ,000,000. oo. 
 
 For 1899 ' 
 
 We, with half product, sold 1,200,000 tons, 
 orders on our books, at higher prices of at least 
 $ i. oo deliveries $1,200,000.00 
 
 We have of Armor going to work for years 
 ahead another . 1,000,000.00 
 
 Carrie Blast Furnaces ; the Blooming Mill all 
 he year, another 500,000.00 
 
 If we get $1.00 more pull on the remaining 
 1,200,000 tons 1,200,000.00 
 
 $3,900,000.00 
 
 Our increased product of Furnaces and Mills 
 give us a big increase, but there is a gain of . . . .$4,000,000.00 
 
 Which might easily be $5,000,000.00. 
 
 Frick Coke is now making at the rate of a 
 $ i ,000,000. oo more per year ; even better pros- 
 pects i ,000,000.00 
 
 $5,000,000.00 
 
 The Light Rail Mill begins say July ist; our new Mines 
 this year will increase profits there; our big new Universal 
 Mill goes into operation say May ist. 
 
 Mr. Fricks estimate of .$15,000,000.00 
 
 Frick and Superior Mines over 5,000,000.00 
 
 Net for 1 899 $20,000,000.00 
 
 Just as likely to be above as below, I think more so, but 
 say $20,000,000.00. 
 
 In IQOO : 
 
 We had the big Plate Mill ; Steel Car Shops ; new Axle 
 Plant; Car Wheel Foundry; all arranged for came in early 
 in 1899; also two new Blast Furnaces at Carrie. 
 
 For 1900, therefore, present conditions are good for $25,- 
 000,000.00. These conditions are very low. Prices liable to 
 advance $2.00 to $5.00 per ton.
 
 $37600,ooo A YEAR 303 
 
 The first would give us $ 5,000,000.00 more, 30, 000,000. oo 
 The second 12,500,000.00 more, 37,500,000.00 
 
 I am certain that in two years hence we shall be on the 
 basis of $25,000,000.00 net yearly, even at low prices. 
 
 We have to supply the world note last week's British 
 advices less Ore this year and last from foreign points ; great 
 scarcity; prices wild; coke put to 15/6 [fifteen shillings and 
 sixpence] at Works, best grade; bad to get at that; near $3.75 
 per ton and scarce. Impossible to increase supply of either 
 Coke or Ore. 
 
 Since we reach Atlantic ports at $1.00 per ton, we have 
 the trade of the world. 
 
 I favor holding on for two or three years ; no question but 
 we can sell our property at $400,000,000.00. 
 
 200,000,000 Bonds @ 5^ $10,000,000.00 
 
 200,000,000 Stock @ 6% = 12,000,000.00 
 
 $22,000,000.00 
 Surplus 3,000,000.00 
 
 We shall beat this why then not wait. If you wish to sell 
 now then here is the plan. A. C." 
 
 (PROSPECTUS) 
 
 THE CARNEGIE STEEL COMPANY, LIMITED, and 
 the H. C. FRICK COKE COMPANY. 
 
 In pursuance of a decision of long standing, the four princi- 
 pal owners of The Carnegie Steel Company, Limited, and the 
 H. C. Frick Coke Company (MM. Carnegie, Phipps, Frick and 
 Lander) now retire from active business. To enable them to 
 do so, and with the approval of all the younger Partners, the 
 partnership has been changed to a corporation Capital $300,- 
 000,000.00. 
 
 One half $150,000,000.00 Gold Mortgage Bonds; 
 
 Preferred Stock, 6%. . . .75,000,000.00 
 Common Stock, 75,000,000.00 
 
 All the Bonds and Preferred Stock will be taken payment 
 by the four outgoing Partners. 
 
 Part of the Common Stock will be held by the present 
 younger Partners ; part is now offered to the public. 
 
 Applications from Pittsburg and Western Pennsylvania,
 
 3 04 THE ZENITH OF PROSPERITY 
 
 especially in Manufacturers of Iron and Steel, will be given 
 preference, the desire being to enlist as many experienced busi- 
 ness men at home as possible. 
 
 All the present Partners agree to continue in the service 
 for Five (5) years. MM. Carnegie, Phipps, Frick and Lauder 
 also agree to remain for that period in their present positions 
 as Consulting Partners. 
 
 The Partners have agreed to make good any deficiency in 
 the Net Earnings, should such occur during said five years, in 
 the amount necessary to pay interest on Bonds and upon Pre- 
 ferred Stock, and 6 f /c upon Common Stock. 
 
 To meet this liability there has been deposited with .... 
 
 Trust Company, $20,000,000.00 of Bonds, 
 
 contributed pro rata by the Partners. 
 
 The present earnings of the Companies exceed the sum 
 required for the payment stated and leaves a satisfactory sur- 
 plus for contingencies. Additional Works now in progress, 
 which the demand of the ever growing business required, will 
 add to the earnings. The property of the new Company em- 
 braces all the property of the two former Companies ; every- 
 thing is included real estate, railroads, coke lands (38,000 
 acres unmined), mills, furnaces, houses, offices, water rights, 
 mines, and everything of every description. 
 
 The debts of the Company, including all Mortgage Bonds, 
 etc., are more than covered by the quick assets the Stock of 
 Material, and the Bills Receivable, and the Cash on Hand. 
 
 The Company starts with Working Capital. 
 
 (SIGNATURES) 
 
 This prospectus is true ; nothing kept back. 
 
 These different plans of consolidation and reorganization 
 were still under consideration when, towards the end of March, 
 overtures were made by ex-Judge W. H. Moore of Chicago for 
 the purchase of the Carnegie- Frick properties, with the view of 
 combining them. This time an effort was made to get a price 
 on Andrew Carnegie's individual holdings of stock in the two 
 companies, carrying as they did control ; but, for the sake of 
 appearances, Mr. Carnegie refused to deal with outside parties, 
 and stipulated that the negotiations should be conducted in the 
 names of his principal partners, Phipps and Frick. Accord- 
 ingly these gentlemen joined the syndicate, with the under-
 
 THE MOORE OPTIOX 305 
 
 standing that Moore and his friends should finance the entire 
 scheme. 
 
 Carnegie demanded a million dollars for a ninety clays' op- 
 tion on his entire interests at a price of $157,950,000; and he 
 afterwards raised this bonus to $1,170,000. The increase was 
 met by Messrs. Phipps and Frick each contributing $85,000, 
 Carnegie agreeing to return these sums to them later. The 
 other members of the steel and coke companies required no 
 bonus for an option on their shares except the nominal sum of 
 one dollar. These agreements were signed on April 24th. 
 
 If the sale had been consummated it would have been on 
 the basis of $250,000,000 "for the entire ownership of first 
 party [Andrew Carnegie] and associate owners and interests in 
 all the properties and assets of The Carnegie Steel Co. Ltd., 
 except its holdings in the stock of the H. C. Frick Coke Co., 
 and allied interests, namely: about thirty (30) per cent, of the 
 whole of the said H. C. Frick Coke Co., in which thirty per 
 cent, in said H. C. Frick Coke Company interests the said 
 second parties [H. C. Frick and Henry Phipps, Jr.] may take 
 first party's interest on the basis of Seventy millions of dollars 
 ($70,000,000) for the whole of the said H. C. Frick Coke Co. 
 properties arid allied interests." And "as to the first party's 
 individual holdings of stock in the H. C. Frick Coke Co. and 
 allied interests, this shall be upon the basis of Seventy millions 
 of dollars for the entire property and assets of the H. C. Frick 
 Coke Co. of which stock the holdings of the said first party is 
 about twenty-five (25) per cent, of the whole." 
 
 To quote still further from the original option, " the first 
 party agrees to take as part payment for his interests as above 
 one hundred millions of dollars ($100,000,000) in five per cent. 
 fifty year, gold bonds, to be executed by such individual cor- 
 poration or limited partnership association, as may be desig- 
 nated by the second parties, or their assigns, which bonds shall 
 be secured by a mortgage upon all the real estate of the Carne- 
 gie Steel Co. Ltd. and to be a first lien thereon, except so far 
 20
 
 306 THE ZENITH OF PROSPERITY 
 
 as the same shall be now encumbered, and which shall cover all 
 of the stocks, interests and securities covered by tjiis option." 
 ... " The remainder of the consideration for the sale of the 
 interests hereby optioned is to be in cash." 
 
 In this way Carnegie would have been so secured that he 
 would virtually have had a first mortgage on all the partnership 
 assets, thus gaining a preference over all his partners. 
 
 An instrument of a like tenor and purport was signed by 
 other members of the Carnegie-Frick companies, without any 
 forfeitable bonus. 
 
 At the time this option was bought the money market was 
 in such condition that no difficulty was anticipated by Judge 
 Moore in raising the necessary funds to carry out his plans, 
 huge as these were. He represented that he would have the 
 co-operation of the National City and the First National Banks 
 of New York. The death of Roswell P. Flower, however, and 
 the forced liquidation of the many industrial securities that he 
 had been supporting, brought on a panic that was as disastrous 
 as it was unexpected. Occupied in protecting existing obliga- 
 tions, bankers and capitalists had little disposition to engage 
 in fresh ventures; and realizing the impossibility of safely 
 launching a great enterprise in such troubled waters, Messrs. 
 Frick and Phipps went to Scotland to try to get an extension of 
 their option. At Skibo Castle Mr. Carnegie refused to extend 
 the option, and the negotiations came to an abrupt end. 
 
 An interesting document was drawn up at this time which 
 is worth including here, presenting as it does at a glance the 
 imposing magnitude of the business whose growth we have 
 traced from the little Kloman forge in the basement at Girty's 
 Run. It is the draft of a prospectus prepared by the Moore 
 Syndicate, but never published. It marks the zenith of the 
 Carnegie Steel Company's prosperity. Supplementing it is a 
 letter from Mr. C. M. Schwab, of considerable interest.
 
 THE MOORE PROSPECTUS 307 
 
 (PROSPECTUS) 
 
 A limited amount of the stock of the "CARNEGIE 
 STEEL COMPANY " is now offered to the public, on the 
 following basis : 
 
 The corporation which it is planned to form with the name 
 " Carnegie Steel Company," will have, through a charter to be 
 obtained under the laws of Pennsylvania, appropriate powers for 
 acquiring, producing, manufacturing and dealing in steel, iron, 
 ore, coal and coke, and all things made of steel or iron, with all 
 other powers deemed convenient, and will have an authorized 
 capital of two hundred and fifty million dollars ($250,000,000), 
 divided into two million five hundred thousand (2,500,000) 
 shares of the par value of one hundred dollars ($100) each. 
 
 Each subscriber will agree to take and pay for the number 
 of shares for which he may subscribe, or such smaller propor- 
 tionate number as may be allotted to him in the event of over- 
 subscription, of the full-paid stock. 
 
 The price is to be one hundred dollars ($100) in cash for 
 each share of stock, and is to be paid into such depository as 
 may be designated by the Managers in control of the subscrip- 
 tion lists, within ten days after notice calling for such payment 
 shall be delivered or mailed to the subscriber ; but ten dollars 
 out of every one hundred dollars of subscription may be made 
 payable immediately on allotment, if so stated in the notice 
 thereof. If the stock certificates cannot be delivered when 
 payments are completed, receipts will be issued calling for the 
 stock when ready. 
 
 The corporation is to be vested with fifteen million dollars 
 ($15,000,000) in cash and also with the cash and other avail- 
 able assets of The Carnegie Steel Company, Limited, and the 
 H. C. Frick Coke Company, and, subject to a Bonded Debt of 
 one hundred million dollars ($100,000,000) in 50 year 5^ Gold 
 Bonds, with the properties of The Carnegie Steel Company, 
 Limited, and the H. C. Frick Coke Company, which include 
 the following : 
 
 The Edgar Thomson Works, at Bessemer, Pa., including : 
 
 Edgar Thomson Blast Furnaces, 
 
 Edgar Thomson Foundry, 
 
 Edgar Thomson Steel Works. 
 The Duquesne Works, at Duquesne, Pa., including: 
 
 Duquesne Blast Furnace, 
 
 Duquesne Steel Works.
 
 3 o8 THE ZENITH OF PROSPERITY 
 
 The Homestead Steel Works, at Munhall, Pa., including: 
 Bessemer Steel Department, 
 Open Hearth Steel Department, 
 Finishing Mills, 
 Armor Plate Department. 
 The Carrie Blast Furnaces, at Rankin, Pa. 
 The Lucy Blast Furnaces, in Pittsburg, Pa. 
 The Keystone Bridge Works, in Pittsburg, Pa. 
 The Upper Union Mills, in Pittsburg, Pa. 
 The Lower Union Mills, in Pittsburg, Pa. 
 The H. C. Frick Coke Company's Coal and Coke properties 
 in Westmoreland and Fayette Counties, Pa., including : 
 About 40,000 acres of unmined coal, 
 20,000 acres of surface lands, 
 1 1,000 coke ovens; 
 2,500 railroad cars, 
 3,500 dwellings. 
 
 The Larimer Coke Works, at Larimer, Pa. 
 The Youghiogheny Coke Works, at Douglas, Pa. 
 All the capital stock of the following Companies : 
 The Union Railroad Company, 
 The Slackwater Railroad Company, 
 The Youghiogheny Northern Railway Company, 
 The Carnegie. Natural Gas Company, 
 The Youghiogheny Water Company, 
 The Mount Pleasant Water Company, 
 The Trotter Water Company, 
 The Pittsburg and Conneaut Dock Company. 
 Over one-half the capital stock of the Pittsburg, Bessemer 
 and Lake Erie Railroad Company. 
 
 43.6 per cent, of the capital stock of the Pennsylvania and 
 Lake Erie Dock Company. 
 
 One-fourth of the capital stock of the New York, Pennsyl- 
 vania and Ohio Dock Company. 
 
 Five-sixths of the capital stock of the Oliver Iron Mining 
 Company, owning: 
 
 All the stock of the Metropoiitan Iron and Land Company, 
 
 All the stock of the Pioneer Iron Company, 
 
 Over 68 per cent, of the stock of the Lake Superior Iron 
 
 Company, 
 Over 98 per cent, of the stock of the Security Land and 
 
 Exploration Company, 
 
 Other ore properties in negotiation which will be included 
 if acquired.
 
 AN LVPRF.SSn'E DOCUMENT 309 
 
 One-half of the capital stock of the Pewabic Company. 
 
 Three-fourths of the capital stock of the Pittsburg Lime- 
 stone Company, Limited. 
 
 Other interests in Ore Mines, Transportation Companies, 
 Dock Companies, Valuable Patents, and Companies owning 
 Patents, etc. 
 
 These Furnaces, Steel Works, Coke Works, and other prop- 
 erties are in full operation, their latest complete months' prod- 
 ucts being as follows : 
 
 BLAST FURNACES. 
 
 PRODUCT GROSS TONS. 
 
 Names. Stacks. Mar., 1899. Apr., 1899. 
 
 Edgar Thomson Furnaces 9 90,585 88,937 
 
 Duquesne Furnaces 4 70,261 63,012 
 
 Carrie Furnaces 2 18,935 ig.447 
 
 Lucy Furnaces 2 6,031 9,100 
 
 Total 17 185,812 180,496 
 
 STEEL WORKS. 
 
 PRODUCT GROSS TONS. 
 
 Names. Mar -. l8 99- A Pr-> 1899. 
 Bessemer Steel 
 
 Edgar Thomson Steel Works 66,427 62,381 
 
 Duquesne Steel Works 53, 189 48,849 
 
 Homestead Steel Works 31,282 30.219 
 
 Total 150,898 Mi,449 
 
 Open Hearth Steel 
 1 lomestead Steel Works 90,088 
 
 Total Steel Ingots 240,986 212,163 
 
 ROLLING MILLS. 
 
 PRODUCT GROSS TONS. 
 
 Names . Kind. Mar., 1899. Apr., 1899. 
 
 Edgar Thomson Steel Works. . Rails 179,256 159,344 
 
 Duquesne Steel Works Billets 29,315 
 
 do Sheet Bars M.556 ,47 
 
 do Splice Bars 4,207 3,409 
 
 Homestead Steel Works Blooms and Billets. 95,635 82,977 
 
 do Structural 22,043 22,179 
 
 do Plates 8,651 8,818 
 
 Upper Union Mills Structural 12,106 11,028 
 
 do Plates 8,455 7,466 
 
 Lower Union Mills Structural 4,374 3,947 
 
 do Plates 3,543 3,429
 
 3io THE ZENITH OF PROSPERITY 
 
 COKE WORKS. 
 
 SHIPMENTS NET TONS. 
 
 Names. Mar., 1899. Apr., 1899. 
 
 H. C. Frick Coke Company 506,870 477, 640 
 
 Larimer Coke Works 5,030 5,090 
 
 Youghiogheny Coke Works 2,860 1,850 
 
 Total Coke 5M.7&O 484,580 
 
 OTHER DEPARTMENTS. 
 
 PRODUCT GROSS TONS. 
 
 Kind. Mar., 1899. Apr., 1899. 
 
 Edgar Thomson Foundry. ...Castings 5,465 5,439 
 
 Duquesne Steel Works Finished Splices 4,114 3,4?o 
 
 Homestead Steel Works Armor 446 621 
 
 do Rivets and Bolts 125 105 
 
 do Castings 152 200 
 
 do Fitted Work 1,958 1,928 
 
 do Columns 635 411 
 
 Upper Union Mills Rivets and Bolts 21 20 
 
 do Fitted Work 346 713 
 
 Lower Union Mills Axles 2,629 1,664 
 
 do Forgings 108 103 
 
 do Spring Steel 638 731 
 
 Keystone Bridge Works Bridge Work 3,394 2,933 
 
 do Castings 274 348 
 
 do Rivets 116 143 
 
 As has been the fixed policy of the " Carnegie " Associa- 
 tions during the past twenty years, Improvements, Extensions 
 and Additions are constantly being made. Blowing Engines 
 are being added at Edgar Thomson, Duquesne and Carrie Blast 
 Furnaces, which will increase the product of Pig Iron 175,000 
 tons per annum. Ten Open Hearth Furnaces, a 30 inch Slab- 
 bing Mill, a 128 inch Plate Mill and a 42 inch Universal Plate 
 Mill are building at Homestead Steel Works, and will be com- 
 pleted in June and July next, increasing the product of Steel 
 Ingots 350,000 tons per annum, and of Plates 300,000 tons per 
 annum. A Steel Axle Works, at Howard, near the Homestead 
 Steel Works, will be completed by November next, with a 
 capacity of 100,000 tons of Car Axles per annum. Many other 
 minor Improvements are under way, all with a view to increas- 
 ing product, decreasing cost or expediting shipment. 
 
 The present output of these Works is at the annual rate of 
 2,200,000 gross tons of Pig Iron, Spiegeleisen and Ferro-man-
 
 POSSIBLE PROFITS $4325,922 A MONTH 311 
 
 ganese; and 2,800,000 gross tons of Steel Ingots, with ade- 
 quate finishing capacity. 
 
 The Improvements now approaching completion will increase 
 the output to the annual rate of 2,375,000 gross tons of Pig 
 Iron, Spiegeleisen and Ferro-manganese ; and 3,1 50,000 gross 
 tons of Steel Ingots, with sufficient finishing capacity to turn 
 this Steel into Rails, Billets, Structural Shapes, Plates, Railroad 
 Forgings and other Merchantable forms. 
 
 The Net Earnings of the business which will be transferred 
 to the " Carnegie Steel Company " were 
 
 For March, 1899 ................... $1,652,038.75 
 
 For April, 1899 .................... 1,888,227.72 
 
 Owing to the magnitude of the business, and the immense 
 tonnage of the various products, it is necessary that long time 
 contracts be made, far in advance of the time of delivery. The 
 result is that present shipments are at prices far below present 
 rates, the rates at which contracts are being made for future 
 delivery. Had current prices been obtained for the shipments 
 during these two months, the Net Earnings would have been 
 
 For March, 1899. .................. $3,182,574.95 
 
 For April, 1899 ..................... 4,325,922.78 
 
 and with present market prices and the increased product result- 
 ing from the Improvements named, an average single month's 
 Net Profit will largely exceed the above; justifying the expec- 
 tation that the " Carnegie Steel Company " will pay annually, 
 under almost any condition of business : 
 
 5^ on $100,000,000 Bonds .......... $5,000,000.00 
 
 And at least 
 
 6'/ on $250,000,000 Stock .......... 15,000,000.00 
 
 $20,000,000.00 
 
 and leave an ample surplus for extra Dividends, as well as for 
 other Improvements and Additions which will still further in- 
 crease the Net Earnings and the rate of Dividends on the Stock, 
 besides providing a fund for retiring the Bonds at maturity. 
 The Carnegie Steel Company has been, is, and will be in an 
 absolutely independent position, owning the sources of supply : 
 Ore, Coal, Coke, Limestone and Natural Gas ; the Transporta-
 
 3 i2 THE ZENITH OF PROSPERITY 
 
 tion Lines for bringing the raw materials to the Works; the 
 Docks for handling Ore; the Coke Works, Blast Furnaces, 
 Steel Works and Finishing Mills, each advancing the product 
 to a higher grade, until it is ready for the markets of the World, 
 with every intermediate profit saved for the benefit of its Stock- 
 holders. 
 
 The efficient Organization which had brought the " Carne- 
 gie " Associations to their present unassailable position will 
 remain intact. Nearly all of the former Shareholders in The 
 Carnegie Steel Company, Limited, and the H. C. Frick Coke 
 Company, all of whom were actively engaged in the business,- 
 have taken Stock in the " Carnegie Steel Company," and many 
 other Officers and Employes, Superintendents, Foremen, Heads 
 of Departments, Sales Agents, Workmen and Clerks, have sub- 
 scribed for Stock in the new Company, demonstrating their 
 faith in its future and ensuring the same bold yet conservative 
 management which has rendered possible such an aggregation 
 of capital as this ; making large profits, yet earning them ; con- 
 trolling the market, yet never abusing its power ; encouraging 
 the wider use of Steel by the reductions made in its Cost, yet 
 paying the highest wages in the World. Such has been the 
 past, such is the present and such will be the future of the Car- 
 negie Steel Company. 
 
 PITTSBURG, PA., May isth, 1899. 
 MY DEAR MR. FRICK: 
 
 You ask me to give my views as to the probable future 
 earnings of the Carnegie Interests, and as to the proposed reor- 
 ganization on a basis of $100,000,000 Bonds 3250,000,000 
 preferred stock and $275,000,000 common stock. 
 
 Permit me to say that commencing in 1879 as Engineer, 
 constructing the works, ten years as General Superintendent of 
 our principal works and over two years as President, I feel that 
 I know the properties and their possibilities as well, or better 
 than any one in or out of the concern. 
 
 While we have been highly successful in the past, as every 
 one knows, I believe we are only now getting in shape to be 
 truly successful and truly profitable. Our April profit and loss 
 sheet shows earnings slightly over $1,500,000.00 with rails 
 netting us only $17.50 and billets $16.00. Lowest prices we 
 ever had on an average were $16.50 for rails and $14.50 for 
 billets, so you see we have reaped very little of the advantages 
 of increased prices. With prices anywhere near to-day's sell- 
 ing prices we would easily make over $3,000,000.00 per month,
 
 THE LAST BALANCE SHEET 313 
 
 BB CARHEOIE STZZL OOXPUt . HJQTZB. 
 
 Offlo* of SeeretajT. 
 lAUlKJE SHOT. HAMR 1, 1900. 
 
 ASSETS. 
 CASHi- Treawarr, 1.28T.4H.64 
 
 >"ork, 19,rS3. 
 
 Sale* Agenaiee, 2I.3M.SO. 1,381,023,59 
 
 BILLS RECEIVABLE, 7,174,804.02 
 
 J*TGAars RECEIVABLE I a^loyee, 239.340.44 
 
 ACCOUNTS RECEIVABlEi Currant, 14,381,834.08 
 
 Seooritte. yiT.384.3Q 16,899,208.86 
 
 STOCESi FiniriMd Prwtott, 2,768,203.92 
 
 :^trUl for 'Joe, T,087,94.T6 
 
 Or* at Lake Port*, 1,962,212.51 
 
 Ore at MiBM, 16.4TO.Op H.8U.850.M 
 
 AVAILABLE ASSETS, 3T,4T,T32.0 
 
 DORKS and PSOPERIIESi- 
 
 Edgar Thouoa Sork, 10,429, 594.ST 
 
 Duquoon* Stel Work*, 2,333,406.38 
 
 Duquoane rurqai 5,626,211.91 
 
 HomBtad Steal Bork., 16 .644.C01.34 
 
 Carria PuraaoM, 1,079. S83. 69 
 
 Howard Axle Work*, m, 476.37 
 
 Loy PurnacM, l,251,o9.99 
 
 Ksyston* Bridge Bork, n^, 160. 11 
 
 Uppar Union :iill, 1,000,000.00 
 
 Lower Union Mill*, T00,000.00 
 
 Larioar Coke \7wriU, 200,000.00 
 
 Yougliioghany Coka Wofka, 160,000.00 
 
 City Para lots, 960,664.50 
 
 Verona Land, 40,000.00 
 
 Liberty Para, C2S.CCO.OO 
 
 Ollrar Land, 310,313.31 
 
 P*w*tt Land, 28. OQ 42 . S9 , 51 J ,T4 
 
 1900 C.a?ROVE!3ITSl- 
 
 Ldgar -?hc*aon Turnftoea. 50,439.13 
 
 Edjar Ihosaon Stal .'KB. . 31,44I,ft9 
 
 Ed^sr fhoowm Foundry, 10.80 
 
 Doquoeae rum*ae , 13,324.48 
 
 Duxjueane 3tl Work*, 804,638.24 
 
 Hooeitead Steel ffOrka, 240,666.98 
 
 Carrie Turnates, C 04, 070.54 
 
 Howard Axle Work*, 102,542.90 
 
 Luoy Furnaces, 3,415.57 
 
 Keystone Bridge V.'orka, 1,663.18 
 
 Upper Onion Mint, 4,537.12 
 
 Lower Union Mill*, - - 988.T9f.Si 
 
 STOCKS i BOH03, Inretaenti. 14. 94C .405.89 58,295,716.59 
 
 UHDITIOED CAPIIAL, TT.nO.Tt 
 
 OUS WOll PARTKERfl, 8.588.642.22 8.663.852.94 
 
 TOTAL A33ETS, 101,416,302.43 
 
 LIABILITIES. 
 MORTGAGES PAtABLEi- 
 Edgar TbooMD Works, 
 Duqueone Steel Work a, 
 Doduesne Fnrnaoes, 
 llonflotead Steal Worke, 
 Oarrie ?urnaoea, 
 Howard Axle V.'orkit 
 Kayatono Bridge Vorki, 
 Liberty Farm, 
 
 Oliver Land, 153.000.00 2,T34,470.8 
 
 ILLfi PAlAlLSt Current, 
 Stewart, 
 
 Bomtraegep, 2T1..423.8* 8,00,698.29 
 
 AOCOOHT3 P&tABLEl Current, 2,469,650.44 
 
 Or; 240.130^1 2,709,790.88 
 
 SPECIAL DEPOSITS, 3.7T^T6^T 
 
 LIABILITIES PATABLE, 14,227,126.08 
 
 SPECIAL rmosi- 
 
 Continge&t Fund, 
 
 Contingent ' Special , 
 
 Ralinin* road, 
 
 Coal ExtlaguiahBont fund, ^8.822.48 I n 496,104.90 
 
 DOS TO PARTHZRS, 4,113,657.38 
 
 OTRPLUS, f6, 879, 914. 19 
 
 , 25,000,000.00 01. 579. 914. 19 101 ,4^6 f 802. 48 
 
 Photographic copy of last balance sheet before consolidation.
 
 314 THE ZENITH OF PROSPERITY 
 
 and then our new works to be started in two months will, I 
 estimate on present prices, bring us an additional profit of 
 $600,000.00 per month or total of $3,600,000.00 per month. 
 
 As to the future even on low prices, -I am most sanguine. 
 I know positively that England cannot produce pig iron at 
 actual cost for less than $i i. 50 per ton, even allowing no profit 
 on raw materials, and cannot put pig iron into a rail with their 
 most efficient works for less than $7.50 per ton. This would 
 make rails at net cost to them of $19.00. We can sell at this 
 price and ship abroad so as to net us $16.00 at works for for- 
 eign business, nearly as good as home business has been. 
 What is true of rails is equally true of other steel products. 
 As a result of this we are going to control the steel business 
 of the world. 
 
 You know we can make rails for less than $12.00 per ton, 
 leaving a nice margin on foreign business. Besides this, for- 
 eign costs are going to increase year by year because they have 
 not the raw materials, while ours is going to decrease. The 
 result of all this is that we will be able to sell our surplus 
 abroad, run our works full all the time and get the best practice 
 and costs in this way. 
 
 As to the works, any competitor will tell you that we are 
 far ahead of any one, and, if the plans which we have for the 
 future, are carried out we will be farther ahead than ever. I 
 have no fears for the earnings in the future. I believe they 
 will much exceed any estimate we have made, provided, how- 
 ever, that the same methods of organization and operation as 
 now exist, are fully carried out in the future. 
 
 It must not be run as other concerns are run, but as it is 
 now conducted. This is most important. I believe the earn- 
 ings will fully justify the capitalization and as a proof of my 
 belief in this, I am quite willing to take every dollar I own in 
 the stock of the new concern on the basis proposed.' 
 Very truly yours, 
 
 C. M. SCHWAB, 
 
 President. 
 
 MR. H. C. FRICK, Chairman, 
 Building. 
 
 The third attempt to sell the Carnegie properties to the 
 public having thus failed, the partners returned to their 
 schemes of consolidation and reorganization. This time Mr. 
 Frick and the junior members took up the task; and they made
 
 ANOTHER SCHEME FAILS 315 
 
 elaborate plans for a new company with a capital of $250,000,- 
 ooo and no bonds. This company was " to purchase from the 
 Carnegie Steel Co., Ltd., for $195,312,500 all its properties 
 real, personal and mixed, excepting its holdings in the stocks 
 of the H. C. Frick Coke Co." . . . and "from the H. C. Frick 
 Coke Co. and its subsidiary companies named above, for $54,- 
 687,500 all their properties, real, personal and mixed; the total 
 consideration, $250,000,000, to be paid in instalments as the 
 stock subscriptions became due." Provision was made for 
 " Andrew Carnegie to loan to each ' Debtor Partner ' an amount 
 sufficient to enable him to pay his indebtedness to either sell- 
 ing company." "All the stock" was to be "placed in a trust 
 for ten years, during which time no stock shall be sold except- 
 ing " from one owner to another, or by authorization of a three- 
 fourths vote of stock in value and stockholders in number, or 
 in the event of death of any member. This plan, representing 
 the " unanimous views of every subscriber hereto, after full dis- 
 cussions of all suggestions had at meetings held September 
 n, 19, and 25," was commended to "the favorable considera- 
 tion of the senior members." " We would not favor any plan 
 that would contemplate bonding the property," they concluded. 
 Ten signatures followed. 
 
 Of course nothing came of it. It is surprising that any- 
 thing should have been expected of a plan that did not " con- 
 template bonding the property." Andrew Carnegie had placed 
 himself on record with sufficient emphasis to leave no doubt in 
 any reasonable mind as to the kind of security he wanted. So 
 this plan joined the other liquid ideas that the corporate mind 
 had secreted during the preceding years.
 
 CHAPTER XX 
 CARNEGIE'S ATTEMPT TO DEPOSE FRICK 
 
 IN chemical experiments it often happens 
 that before the process of crystallization 
 can be started in a saturated solution, 
 a blow must be given to the vessel 
 containing it. This was evidently 
 the condition of the ideas that had 
 long been floating in and out of 
 the minds of the partners concern- 
 ing consolidation and reorganization: it required the shock of a 
 rupture between Carnegie and Frick to jar the fluid schemes 
 into solidity. And in conformity with the run of forty years' 
 uninterrupted Carnegie luck, this shock, which threatened at 
 first to have a shattering effect, further welded the corporate 
 interests, doubled the already enormous wealth of the principal 
 partners, and made the little ones all millionaires. 
 
 It was not inconsistent with its previous history that the 
 Carnegie enterprise should reach its final and perfected form 
 through strife. Born of a quarrel, it throve on contention. 
 Each stage of its growth was marked by some dispute ; and 
 that it ever became a Carnegie concern, rather than a Miller, 
 Coleman, or a Shinn creation, was solely due to the consolidat- 
 ing effect of timely "ejectures," as Carnegie euphemistically 
 named the expulsion of partners. 
 
 The proposed " ejecture " of Frick, however, was not the 
 simple matter it had been in previous cases. The man whose 
 stubborn nature had passed through the annealing process a 
 dozen times was not the one to accept an arbitrary dismissal ; 
 
 and the fight he now made was as notable, and was as keenly 
 
 316
 
 INTOLERA XCE Ol< K IVALS 317 
 
 watched by the country, as was the contest with labor that 
 had given him the real headship of the great organization he 
 managed. 
 
 In tracing the causes of this attempted " ejecture," the one 
 just named was probably the first. Since the earliest days it 
 had been the basis of Andrew Carnegie's policy to tolerate no 
 rival. In every previous case the growing prominence of part- 
 ners had been checked before it had become dangerous. The 
 genius of Kloman, the strong personality of Colernan, the mas- 
 terful competency of Shinn, each in turn was forced to yield to 
 the superior money power of Carnegie, and to find, as one of 
 the old partners graphically puts it, " a top fence-rail of its own 
 to crow from." Phipps, willing to stand in the shadow and in- 
 different even to the honors that were peculiarly his, inspired 
 neither jealousy nor fear. Lander was only Carnegie's echo. 
 Singer conscientiously attended the Board meetings, and his 
 ambition was more than satisfied with the prerogative of mak- 
 ing the motion for dividends. Stewart was a good-natured and 
 most useful treasurer, who could always get money on a pinch. 
 Abbot, publicly greeted by Carnegie as "that young Napoleon 
 of business " one day, was exiled almost the next. The busi- 
 ness genius of T. M. Carnegie might have made him dangerous, 
 but he died young. Of them all Frick, young, forceful, self- 
 contained, tenacious, ambitious, and rich, was more than a rival ; 
 he was an equal from the start. And when he emerged from 
 the Homestead contest with the admiration of the country, 
 while Carnegie had only mystified the people, his leadership 
 was everywhere acknowledged. 
 
 The first effort to diminish Frick's prominence was made 
 in 1895. At this time he was trying to unify the coke-produc- 
 ing interests in one great company. He had almost succeeded ; 
 but there remained one third-rate operator who refused to join 
 the combination on any reasonable terms. The character of 
 this person was such that he was hardly tolerated amongst hon- 
 est men, except when they met him at church ; and Frick had
 
 318 ATTEMPT TO DEPOSE PRICK 
 
 ceased to seek his co-operation. Then Carnegie secretly took 
 up the negotiation, and arranged a scheme by which this in- 
 dividual, with his twelve hundred ovens, should assume the 
 headship of the coke combination, while Frick with his ten 
 thousand ovens, should modestly drop into a subordinate place. 
 The project died with apoplectic suddenness as soon as it was 
 proposed to the man most interested; and Carnegie acquired a 
 new view of his partner. Thereupon the office of president of 
 the Carnegie Steel Company was created, and Mr. Leishman 
 was put in with that title, Mr. Frick remaining chairman as 
 before. 
 
 To the outside world it looked as if Mr. Frick had been 
 deposed from his headship by this proceeding ; but every clerk 
 in the office and every man in the mills knew that this was n6t 
 so. The power that ruled every department, from the highest 
 to the lowest, was Frick ; and the president had merely such 
 outside prestige as the chairman did not value. 
 
 The cause of disagreement between Carnegie and Frick that 
 had most influence in producing the final rupture was the 
 divergent views they held concerning the price the steel com- 
 pany should pay for coke. While Carnegie controlled a major- 
 ity of the coke company's stock, through his personal holdings 
 and those of the firm, there were a few outside shareholders 
 whose interest it was that the steel company should pay the full 
 market price for its fuel ; and to protect these minority stock- 
 holders, Frick always made as good a contract as he could with 
 the steel company. Carnegie, on the other hand, wishful to 
 keep ail costs down, tried to obtain specially low rates on coke 
 for his firm. This matter eventually brought about the final 
 rupture. 
 
 Before this happened, however, another source of ill feeling 
 grew out of the failure of the Moore Syndicate to complete the 
 purchase of Carnegie's interest at a price of $157,950,000. 
 For unfortunately the news of this option had been made pub- 
 lic; and the newspapers of England and America overwhelmed
 
 fCARNKlES 
 
 PUZ/lf 
 
 ABSURD NOTORIETY 319 
 
 Carnegie with their comments and congratulations, just as 
 though the huge transaction had been completed. When, 
 through the collapse of the money market, the syndicate found 
 itself unable to finance a deal calling for a hundred millions in 
 cash in ninety days, Mr. Carnegie's chagrin was all the greater 
 because of the premature applause to which he had been treated. 
 And his annoyance was very natural. With excessive zeal his 
 friend Stead had rushed a book through the press entitled " Mr. 
 Carnegie's Conundrum : ,40,000,- 
 ooo. What shall I do with it?" 
 and bearing on its title-page the 
 famous Carnegie dictum : " The 
 man who dies rich dies dis- 
 graced !" Under the circum- 
 stances it was an anticlimax. 
 Furthermore, an enterprising 
 advertiser of soap or some such 
 detergent placarded England, 
 where Carnegie was then stay- 
 ing, with offers of prizes for the 
 best answer to " Mr. Carnegie's 
 Conundrum " ; and daily reports 
 were published in the newspapers 
 of the thousands of answers re- 
 ceived. The position in which the millionaire philanthropist 
 was thus placed was most undignified. He could not take up a 
 paper without seeing in the form of an advertisement some 
 idiotic suggestion as to how he ought to spend the forty million 
 sterling he had failed to receive. He could not take a walk 
 without the same offensive advice gleaming from a hundred 
 bill-boards ; and supersensitive as he always was to ridicule, his 
 displeasure not unnaturally fell upon the partners whom he 
 regarded as primarily responsible for this absurd notoriety. So 
 when they came to him for an extension of their all-too-short 
 option, he not only refused it, but in contravention of his agree- 
 
 'Offensive advice gleaming from 
 bill-boards."
 
 320 
 
 ATTEMPT TO DEPOSE J'RICK 
 
 ment with them, kept the $170,000 which they had contrib- 
 uted as their share of the $1,170,000 paid him as a bonus for 
 
 Photographic copy of letter from Mr. Carnegie in England to his trustees in Pitts- 
 burg. In his own hand are the words: Of course any part paid by my partners 1 
 shall refund. 
 
 the option. Here is a photographic reproduction of a portion 
 of the letter in which he made this agreement. 
 
 The culmination of these animosities was reached in Octo-
 
 THE ALLEGED COKE CONTRACT 321 
 
 her, after Mr. Carnegie's return from Europe. It came about in 
 this wise. 
 
 One day, during the previous spring, Mr. Phipps called on 
 Mr. Carnegie in New York and was greeted with great effusion. 
 " Harry," said Carnegie, " Frick has just left; and I've made a 
 splendid contract for coke. It is a three years' agreement to 
 give us coke at $1.35 a ton." 
 
 "And if the market price drops below $1.35 ? " queried Mr. 
 Phipps. 
 
 Mr. Carnegie was surprised. He had not thought of that. 
 A day or two later, when Mr. Phipps called again, he said : 
 
 "Harry, I've fixed that coke matter. We are to have the 
 same price as others if it drops below $1.35." 
 
 It afterwards turned out that the way he had " fixed " it was 
 that he had told Lander to notify Schwab that a clause must be 
 added to the contract, under which the Carnegie Steel Company 
 would pay the same price for coke as any other buyer, provided 
 that price was less than $1.35. 
 
 " Is that what Mr. Carnegie demands ? " asked Mr. Frick, 
 on receiving the message through Mr. Schwab. 
 
 " It is," replied the latter. 
 
 "Then the arrangement is all off, and must betaken up 
 anew." 
 
 This answer was communicated to Mr. Carnegie; but he 
 did not mention the matter to Mr. Frick, although he allowed 
 others to give him to understand that he considered the agree- 
 ment as amended by himself binding on the coke company. 
 
 During the early summer the price of coke was low, and 
 there was no disposition shown by the Carnegies to have the 
 alleged contract enforced; but when prices advanced an at- 
 tempt was made to settle with the Frick Company at $1.35 a 
 ton. Insisting that the coke company had no contract with the 
 steel company, President Lynch had all shipments billed at 
 market rates ; and when Mr. Lawrence Phipps, on behalf of the 
 steel company, refused to pay more than $1.35 a ton, he was 
 
 21
 
 322 ATTEMPT TO DEPOSE FRICK 
 
 notified that no further orders would be filled until payment for 
 past purchases was made at the rates charged. To remove all 
 doubt as to where the coke company stood, a meeting of the 
 Board of Directors was held on October 25th, 1899, and the fol- 
 lowing resolution was passed : 
 
 " Resolved, That the president be authorized and instructed 
 to notify the Carnegie Steel Company, Limited, that the exist- 
 ence of any contract is denied and that no claim to settle in 
 accordance with the terms of the alleged contract for past, pres- 
 ent or future deliveries of coke to the said Carnegie Steel Com- 
 pany, Limited, will be recognized or entertained by this Com- 
 pany." 
 
 It was at this critical juncture that a disagreement of a more 
 personal nature occurred between Messrs. Frick and Carnegie, 
 and brought down the tottering fabric of their friendship with 
 
 a crash that wrought the final trans- 
 formation of the Carnegie Steel 
 Company, alienated lifelong friends, 
 gave the public the secret confi- 
 dences of the corporation, and Pitts- 
 burg a new batch of millionaires. 
 It seemed a little thing to produce 
 such momentous changes ; but then, 
 it was only Mrs. O'Leary's cow that set the city 
 -set the city of of Chicago on fire. 
 
 Chicago on fire." 
 
 At the meeting of the Board of Managers 
 on December nth, 1899, Mr. Schwab made reference to the con- 
 templated purchase by the Carnegie Company of a tract of land 
 situated on the Monongahela River belonging to Mr. Frick ; and 
 he mentioned "a hitch in the negotiations." This tract had 
 been acquired by Mr. Frick in partial exchange of other land ; and 
 Mr. Lawrence Phipps, who was familiar with land values in that 
 neighborhood, had valued it at $4,000 an acre. The land was 
 wanted by the company ; and Mr. Frick offered it to the firm at 
 $3, 500. As Mr. Schwab remarked at the meeting, " there is
 
 AX IXSIXI'ATIOX MET 323 
 
 no doubt about our needing this land before long"; and Mr. 
 Frick had shown his habitual foresight in securing it. For 
 some reason, however, Mr. Carnegie disapproved of the pur- 
 chase after he had sanctioned it; and insinuated that Mr. Frick 
 was making a profit on the transaction. This coming to Mr. 
 Frick's ears, he withdrew his offer. This was the "hitch" to 
 which Mr. Schwab referred. Later fresh troubles arose ; and 
 Mr. Frick sold the land to other parties for half a million dol- 
 lars more than he had asked the Carnegie Steel Company. 
 
 The insinuation, with its implications, was indignantly re- 
 sented by Mr. Frick. He did not meet the covert attack by a 
 return innuendo, but by an open minute spread upon the rec- 
 ords of the Carnegie Steel Company. This, dated November 
 2Oth, was as follows : 
 
 In submitting Mr. Moreland's report, I would like to call 
 attention especially to low prices we are to receive for rails 
 through the greater part of next year almost 38.00 per ton 
 below the present market price, and very little above what old 
 rails for re-melting are selling for. This will seriously affect 
 our labor at Edgar Thomson, which is based on the price we 
 receive for rails. 
 
 Mr. Carnegie continually referred, while, here, to the low 
 prices obtained under sliding scale contracts, entirely ignoring 
 the fact that he alone was to blame for creating the atmosphere 
 in which these sliding scale contracts, and other contracts, were 
 made, by insisting last fall, against the almost unanimous pro- 
 test of his partners, on selling rails far into the future at $16.00 
 and $17.00 per ton. It was fair for Sales Department to as- 
 sume that if those were his views as to the prices which were 
 to prevail for rails, they should be well satisfied with the much 
 better prices they were themselves obtaining for other products 
 under sliding scale contracts they were then making ; although, 
 it must be said for Mr. Carnegie, that he gave as his reason for 
 wanting such low prices for rails, that it was for the purpose of 
 breaking up eastern Rail Companies. 
 
 I learn that Mr. Carnegie, while here, stated that I showed 
 cowardice in not bringing up question of price of coke as be- 
 tween Steel and Coke Companies. It was not my business to 
 bring that question up. He is in possession of the Minutes
 
 324 ATTEMPT TO DEPOSE FRICK 
 
 of the Board of Directors of the Frick Coke Company, giving 
 their views of the attempt, on his part, to force them to take 
 practically cost for their coke. I will admit that, for the sake 
 of harmony, I did personally agree to accept a low price for 
 coke ; but on my return from that interview in New York 
 (within the next day or two) President Schwab came to me and 
 said that Mr. Lauder said the arrangement should provide that, 
 in case we sold coke below the price that Mr. Carnegie and I 
 had discussed, the Steel Company was to have the benefit of 
 such lower price. I then said to Mr. Schwab to let the matter 
 rest until Mr. Carnegie came out (he told us he intended to 
 come), and we would take up the question of a coke contract. 
 He changed his plans, and did not come out. I saw him in 
 New York, before he sailed, and told him that Mr. Lauder had 
 raised that question, and suggested that he write Mr. Schwab, 
 and let Messrs. Schwab and Lynch take up the question of a 
 coke contract. Mr. Schwab, I believe, never heard from him 
 on the subject^ and Mr. Lynch, President of the Frick Coke 
 Company, very properly, has been billing the coke, as there was 
 no arrangement closed, at a price that is certainly quite fair and 
 reasonable as between the two Companies, and at least 20 cents 
 per ton b.elow the average price received from their other cus- 
 tomers. We have By-Laws, and they should govern. If not, 
 why do we have them ? It is the business of the Presidents of 
 the two Companies to make contracts of all kinds. Mr. Car- 
 negie has no authority to make a contract that would bind this 
 Company. Neither have I any authority to make any contract 
 that would bind the Frick Coke Company ; and, at any rate, 
 why should he, whose interest is larger in Steel than it is in 
 Coke, insist on fixing the price which the Steel Company 
 should pay for their coke ? The Frick Coke Company has 
 always been used as a convenience. The records will show 
 that its credit has always been largely used for the Steel Com- 
 pany, and is to-day, to the extent of at least $6,000,000.00. 
 The value of our coke properties, for over a year, has been, at 
 every opportunity, depreciated by Mr. Carnegie and Mr. Lau- 
 der, and I submit that it is not unreasonable that I have con- 
 siderable feeling on this subject. He also threatened, I am 
 told, while here, that, if low price did not prevail, or something 
 was not done, that he would buy 20,000 acres of Washington 
 Run coal and build coke ovens. That is to say, he threatened, 
 if the minority stockholders would not give their share of the 
 coke to the Steel Company, at about cost, he would attempt to 
 ruin them.
 
 THE FINAL JiRJiAK 325 
 
 He also stated, I am told, while here, that he had purchased 
 that land from me above Peters Creek ; that he had agreed to 
 pay market price, although he had his doubts as to whether I 
 had any right, while Chairman of the Board of Managers of the 
 Carnegie Steel Company, to make such a purchase. He knows 
 how I became interested in that land, because I told him in 
 your presence, the other clay. Why was he not manly enough 
 to say to my face what he said behind my back? He knew he 
 had no right to say what he did. Now, before the Steel Com- 
 pany becomes the owner of that land, he must apologize for that 
 statement. I first became interested in that land, as I told 
 you, through trading a lot in Shady Side that I had owned for 
 years. The land is six miles away from any land owned by the 
 Carnegie Steel Company. Steel Company does not need it 
 now, and will not need it for a long time in the future, if at 
 all; but, of course, if they owned it, it might keep another 
 large works from being built, or enable Steel Company to go 
 into competition with some other large industry. 
 
 Harmony is so essential for the success of any organization 
 that I have stood a great many insults from Mr. Carnegie in 
 the past, but I will submit to no further insults in the future. 
 
 There are many other matters I might refer to, but I have 
 no desire to quarrel with him, or raise trouble in the organiza- 
 tion; but, in justice to myself, I could not at this time, say less 
 than I have. 
 
 A copy of this was sent in the usual way to Mr. Carnegie 
 in New York. He waited in silence to see if the Board of 
 Managers would approve the minutes at their next meeting ; 
 and when they did so he at once came to Pittsburg, called a 
 meeting of the members of the Board, and demanded that they 
 sign a request to Mr. Frick for his resignation. He said he 
 would not -use it unless he had to ; but that he wanted to be 
 fortified with it. Armed with this he called upon Mr. Frick, 
 whom he found willing to resign in the interests of harmony. 
 
 Accordingly the next day Mr. Frick tendered his resignation 
 and it was accepted by the Board. Here are the minutes of the 
 meeting : 
 
 " At a meeting of the Board of Managers of The Carnegie 
 Steel Company, Limited, held at the General Offices of the
 
 326 ATTEMPT TO DEPOSE PRICK 
 
 Association, Carnegie Building, Pittsburg, Pa. , at 12:30 P.M., 
 Tuesday, December 5, 1899, there were present MM. Schwab 
 (president), Peacock, Phipps, Morrison, Clemson, Gayley and 
 Lovejoy (secretary) ; also MM. Andrew Carnegie, Henry Phipps, 
 George Lauder and W. H. Singer. 
 
 The following communication was read : 
 
 'December 5th, 1899. 
 GENTLEMEN : 
 
 I beg to present my resignation as a member of your Board. 
 Yours very truly, 
 
 H. C. FRICK. 
 
 To 
 
 THE BOARD OF MANAGERS, 
 The Carnegie Steel Co. , Ltd. , 
 Pittsburgh, Pa.' 
 
 On motion, (MM. Clemson and Peacock), the resignation 
 was accepted, with the sincere thanks of the Board of Mana- 
 gers, both as such and as representing the Shareholders ; for 
 efficient, zealous and faithful service as a member of this Board 
 from January 14, 1889, to the present day; the vote being 
 unanimous, and all present concurring." 
 
 The difficult position of the junior partners in this crisis is 
 graphically stated in the following extract from a letter written 
 by Mr. C. M. Schwab, the day before Mr. Carnegie's arrival in 
 Pittsburg : 
 
 SUNDAY, Dec. 3rd, 1899 
 
 ... I just returned from New York this morning. Mr. 
 Carnegie is en-route to Pittsburgh to-day, and will be at the 
 offices in the morning. Nothing could be done with him look- 
 ing towards a reconciliation. He seems most determined. I 
 did my best. So did Mr. Phipps. I feel certain he will give 
 positive instructions to the Board and Stockholders as to his 
 wishes in the matter. I have gone into the matter carefully 
 and am advised by disinterested and good authority that, by 
 reason of his interest, he can regulate this matter to suit him- 
 self with much trouble no doubt, but he can ultimately do so. 
 I believe all the Junior members of the Board and all the Junior 
 Partners will do as he directs. Any concerted action would be
 
 JUNIOR PARTXERS PACE RUIN 327 
 
 ultimately useless, and result in their downfall. Am satisfied 
 that no action on my part would have any effect in the end. We 
 must declare ourselves. Under these circumstances, there is 
 nothing left for us to do but obey, although the situation the 
 board is thus placed in is most embarrassing. 
 
 No one can read this letter without sympathizing with Mr. 
 Schwab. On the one hand Carnegie, the majority stockholder, 
 could force him to vote for Prick's expulsion or ruin him if he 
 resisted. On the other hand, Schwab's obligations to Frick 
 and their friendship for years made his subservience to Carne- 
 gie almost impossible. This is undoubtedly what he himself 
 felt ; for he had always freely admitted his great obligations to 
 Mr. Frick. Indeed, he had frankly attributed his success to 
 him. " If I have anything of value in me," he once wrote, 
 Mr. Frick's " method of treatment will bring it out to its 
 full extent " ; and he " regarded with more satisfaction than 
 anything else in life even fortune the consciousness of hav- 
 ing won" Mr. Frick's friendship and regard. It can be well 
 imagined that it was with great reluctance that he afterwards 
 allowed himself to be forced by Carnegie into active opposi- 
 tion to his chief. 
 
 With Mr. Frick's resignation from the chairmanship of the 
 Board the dispute seemed ended; Mr. Carnegie returning to 
 New York apparently satisfied. A month or so later, however, 
 he returned to Pittsburg with an elaborate scheme for the com- 
 plete "ejecture" of Mr. Frick. Before describing this, the 
 further course of the coke controversy should be outlined. 
 
 When Mr. Carnegie was in Pittsburg in December he 
 quietly began to lay his plans for war. His first move was to 
 try to win over Mr. John Walker. 
 
 Mr. Walker was one of the minority stockholders of the 
 coke company; and as trustee for the minor heirs of his old 
 partner Wilson, he had kept a large part of their fortune in the 
 Frick Coke Company. He was, therefore, doubly interested in 
 the controversy. Mr. Walker's high commercial standing, his
 
 328 ATTEMPT TO DEPOSE FRICK 
 
 fine judgment and excellent fighting qualities, made him an ad- 
 versary to be conciliated if possible; and Mr. Carnegie, during 
 this visit, sought to detach him from Mr. Frick. 
 
 Some ten years before this, when Mr. Walker was chair- 
 man of Carnegie, Phipps & Co., a personal difference had 
 arisen between him and Carnegie, and he withdrew from the 
 firm. Carnegie now offered him a position on the Board of the 
 steel company and an interest in it, in exchange for his hold- 
 ings in the coke company. As this involved abandoning his 
 friend Frick in a fight which the latter had entered into to safe- 
 guard the interest of all minority stockholders, including his 
 own and those of the widow and orphans of Carnegie's old boy 
 companion for Wilson was one of The Original Six Mr. 
 Walker declined the offer. He thereby failed to make several 
 millions of dollars which would otherwise have been his. 
 
 It afterwards transpired, however, that Mr. Walker had been 
 mistaken in supposing that Mr. Carnegie wished to sacrifice 
 the interests of all the minority stockholders in the coke com- 
 pany. For at this time Mr. Carnegie told Mr. Schwab to quietly 
 notify Mr. Walker that if he would withdraw his opposition to 
 the coke contract, the matter would be so arranged that he and 
 those he represented should receive the same profits from their 
 coke investments as they would if the steel company paid full 
 price for its fuel. Mr. Schwab, however, did not dare himself 
 to make such an offer to a man like Mr. Walker ; and he asked 
 another member of the Board of Managers to do it. This gen- 
 tleman also declined, as did every other member of the Board 
 to whom the matter was submitted ; and Mr. Walker lost the 
 opportunity of declining the bribe. And if he reads this book 
 he will probably learn for the first time of Mr. Carnegie's 
 benevolent intentions. 
 
 Failing thus to win Mr. Walker to his side Mr. Carnegie 
 promptly included him in the fight, which he now carried right 
 into his adversary's camp. 
 
 It will be remembered that the majority a little more than
 
 AN AMAZING CONTRACT 329 
 
 half of the coke company's stock belonged to Carnegie and 
 the steel company. On the 9th of the following January 
 (1900) the usual stockholders' meeting was held; and, by the 
 power afforded by their large holdings, the Carnegies increased 
 the Board of Directors from five to seven, dropped Messrs. John 
 Walker and Giles B. Bosworth from the Board, and elected to 
 the directorate six of the managers of the steel company. Four 
 of these, Messrs. Gayley, Moreland, Clemson, and Morrison, had 
 not previously been stockholders ; but to qualify them to serve 
 as directors, each had now five shares put in his name. The 
 others were Lauder, Lynch, and Frick. 
 
 On January 24th the majority in the new Board voted to the 
 Carnegie Steel Company a contract for all the coke, at $1.35 a 
 ton, that that company could use in its furnaces for five years, 
 commencing January ist, 1899, amounting approximately to 
 2,500,000 tons a year, or about one-third of the entire product 
 of the H. C. Frick Coke Company; and this agreement, pre- 
 viously prepared and executed by the Carnegie Steel Company, 
 was signed by Mr. Lynch, president of the coke company, under 
 his own protest and that of Mr. Frick. The market price of 
 coke was then $3.50 a ton. 
 
 This surprising contract, being made retroactive, required 
 the coke company to refund to the Carnegies a sum of 
 $596,000 paid on account of coke sold during the previous 
 year. The further loss to the coke company at prevailing 
 prices was $1.65 a ton, or something like $4,000,000 a year. 
 This is probably the most astonishing thing that ever happened 
 in the course of the Carnegie Steel Company's amazing history. 
 
 As soon as the minority stockholders heard of these pro- 
 ceedings they sent the following protest to the president and 
 Board of Directors of the H. C. Frick Coke Company, and re- 
 ceived the appended reply : 
 
 GENTLEMEN : I have been informed 'that your Board of Di- 
 rectors on Jan. 24th, 1900, passed a resolution intended to ratify 
 an alleged contract with the Carnegie Steel Company, Ltd.,
 
 330 ATTEMPT TO DEPOSE FRICK 
 
 whereby your company is to supply to the latter all the coke it 
 may require for use in its furnaces for five years, commencing 
 Jan. i, 1899, for $1.35 per ton, delivered on cars at your works, 
 and that your company has signed a written memorandum of 
 such contract. 
 
 As a stockholder in your company, I protest against any 
 such contract, and I demand that you do nothing in recognition 
 thereof, and especially that you do not ship or bill any coke to 
 the Carnegie Steel Company, Limited, thereunder; and that 
 you do not settle with said company for coke shipped to it since 
 Jan. 1st, 1899, at the price named in said contract, or at any 
 price other than the market price at the time of delivery. I 
 deny that such contract was ever made until you attempted to 
 do so on Jan. 24th, 1900. This contract is for many reasons 
 unfair and fraudulent and against the minority stockholders of 
 the H. C. Frick Coke Company. It is made by those who 
 represent the majority of stockholders, really in the interest of 
 such majority, as against the interests of the H. C. Frick Coke 
 Company and the minority stockholders therein. The market 
 price of coke on Jan. 24th, 1900, was at least $3.50 per ton, and 
 yet this contract, covering almost one-third of all coke manufac- 
 tured by the company, fixes a price of $1.35 per ton. In many 
 other respects it unfairly and dishonestly favors the majority 
 stockholders of the coke company to the loss of the minority 
 stockholders. 
 
 The Carnegie Steel Company, Limited, and Andrew Car- 
 negie (who owns more than one-half of the interest in the steel 
 company) own together more than one-half of the stock of the 
 H. C. Frick Coke Company. A majority of the present Board 
 of Directors of the coke company are managers and partners in 
 the Carnegie Steel Company. It was this majority who forced 
 this contract in favor of the Carnegie Steel Company, Limited, 
 on Jan. 24th, 1900. 
 
 I demand that you rescind the said action of your board in 
 favor of said contract ; that you take such further action as 
 may be necessary to rescind and annul said contract. If you 
 refuse to act, then I ask that you call a meeting of the stock- 
 holders of the coke company to take action and pass upon the 
 questions herein raised, and upon the requests I now make. 
 
 Please advise me promptly what your company proposes to 
 do in the matter, as it is my intention to take proper legal steps 
 to prevent your so doing, if you intend carrying out such pre- 
 tended contract. Yours truly, 
 
 S. L. SCHOONMAKER.
 
 DISINTERMENT OF THE IRONCLAD 331 
 
 PITTSBURGH, Feb. 6th, 1900. 
 
 Mr. S. L. ScJioonmaker, New York City. 
 
 MY DEAR SIR : I beg to advise that I received your com- 
 munication of ist instant, addressed to the President and Board 
 of Directors of the H. C. Frick Coke Company, and I sub- 
 mitted the same to the Board at a meeting held Feb. 6th, 1900, 
 when the following motion was adopted : 
 
 ' That the President be instructed to carry out the contract 
 between the H. C. Frick Coke Company and The Carnegie 
 Steel Company, Limited, dated January ist, 1899, and all its 
 terms and provisions, and that he inform Messrs. Walker and 
 Schoonmaker that he is so directed by the Board. ' 
 Very Truly Yours, 
 
 THOS. LYNCH, 
 
 President. 
 
 Thereupon suit was brought by Mr. Walker and the other 
 minority stockholders to enjoin the coke company from selling, 
 shipping, and delivering any coke to the steel company under 
 the pretended contract. 
 
 In the mean time important events were happening in the 
 council-chambers of the steel company. The peaceful accept- 
 ance of Mr. Prick's resignation as chairman of the Board proved 
 but a lull in the storm. In New York Mr. Carnegie was devis- 
 ing a plan for the rehabilitation of an extinct iron-clad agree- 
 ment, so as to make it applicable to the new situation. Then, 
 in January, he returned to Pittsburg, called a meeting of the 
 Managers, and had them go through the ritual he had prepared. 
 
 At one of their interviews about this time Mr. Frick had 
 offered to sell his interest in the company to Mr. Carnegie at a 
 price to be fixed by arbitrators. This being refused, he offered 
 to buy Carnegie's on the same terms. Mr. Carnegie gasped 
 with astonishment. It was the most direct challenge of his 
 supremacy which he had ever received. The proceedings of 
 the Managers, under Carnegie's direction, now contemplated 
 the forcible seizure of the Frick interest at book values. How
 
 332 ATTEMPT TO DEPOSE FRICK 
 
 inadequate these were will be seen from the following state- 
 ment of some of them, side by side with the profits made dur- 
 ing the previous year : 
 
 Book value, 
 Net profit, 1899. Nov . ist) I899 
 
 Edgar Thomson Furnaces $3,829,716.68 \ 
 
 " SteelWorks 614,518.51 } $10,258,703.98 
 
 " " Foundry 370,866.80' 
 
 Duquesne Blast Furnaces 2,983,094.79 5,089,967.52 
 
 " SteelWorks 1,104,728.39 2,057,745.83 
 
 Homestead Steel Works 4,564,413.63 11,909,199.55 
 
 Carrie Furnaces 820,638.65 829,625.42 
 
 Lucy Furnaces 1,303,524.37 1,251,869.99 
 
 Keystone Bridge Works 13,682.68 717,776.49 
 
 Upper Union Mills 1,091,857.88 1,000,000.00 
 
 Lower Union Mills 438,052.03 700,000.00 
 
 Scotia Ore Mines 1,695.74 
 
 Larimer Coke Works 17,276.56 
 
 Youghiogheny Coke Works (loss) 35. 73 
 
 Sundries including 
 
 H. C. Frick Coke Company. .. .$1,253,853 
 
 Oliver Iron Mining 1,067,000 
 
 Carnegie Natural Gas 420,000 
 
 Union Railroad 100,000 
 
 Etc., etc 3,845,949.36 
 
 Borrowed from Contingency Fund 50,570.80 
 
 Net earnings for year $21,000,000.00 
 
 While the Board was still in session Mr. Carnegie went out 
 to see Mr. Frick, to demand his stock at these book values. 
 Mr. Frick, who had remained outwardly unmoved amid all the 
 horrors of the Homestead battle and cool in presence of the 
 assassin, felt outraged by the intrusion of Andrew Carnegie on 
 such a mission ; and his anger burst out like a flame. Carne- 
 gie hastily retreated, and returned to the Board room white with 
 emotion; and later, when the affair came into the courts, he 
 made an affidavit charging Mr. Frick with an ungovernable 
 temper. 
 
 The further course of this affair, in which, at the instigation 
 of Mr. Carnegie, all the partners except Messrs. Hy. Phipps, 
 Lovejoy, and Curry joined, is summarized in Appendix A from 
 Mr. Frick's own narrative, which formed part of a bill in equity 
 filed in the Court of Common Pleas a month or so later. The
 
 SENSATIONAL REVELATIONS 333 
 
 revelations of the stupendous profits of the steel industry con- 
 tained in this plea set the country agog, so that interest in the 
 contest itself became almost secondary. Every newspaper in 
 the land printed long extracts from the pleadings ; and columns 
 of comments were published on the amazing exhibition of in- 
 dustrial efficiency thus presented. Had the Moore option been 
 valid at this time there would have been no difficulty in raising 
 a hundred million dollars. In other lands the litigation and 
 the secrets it revealed attracted the same general attention. 
 Everywhere the hope was expressed that the suit would be 
 allowed to reach the courts. It was pointed out that " what legis- 
 lative bodies and committees of inquiry had failed to accomplish 
 might be reached if the secrets of the great corporation were 
 passed in review through the courts " ; and it was not only sensa- 
 tion-loving and curiosity-seeking people who wanted to know 
 more, but legislators and publicists of every kind. 
 
 The Carnegie answer was filed on March I2th. It claimed 
 that the plan for forming the limited partnership, which Frick 
 had declared to be a general one, was devised by Frick himself, 
 and that he acquired much of his interest through the working 
 of the so-called iron- clad agreement. It was denied that on 
 December 3ist, 1899, the association had assets or property, 
 which in its legal capacity it could transfer, worth $250,000,- 
 ooo. While it was admitted that Mr. Frick proved a valuable 
 member to the company, it was asserted that " notwithstanding 
 his ability " he " is a man of imperious temper, impatient of 
 opposition, and disposed to make a personal matter of every 
 difference of opinion, even on questions of mere business 
 policy. At times, moreover, he gives way to violent outbursts 
 of passion, which he is either unwilling or unable to control. 
 He demands absolute power and without it is not satisfied." 
 The answer maintained that the refusal to submit their 
 differences to arbitration was because the company pro- 
 posed at all times to maintain the integrity of the iron-clad 
 contract.
 
 334 
 
 ATTEMPT TO DEPOSE PRICK 
 
 There were no disclosures, however. The Carnegies had 
 had more than enough of them; and even while this answer 
 was being prepared efforts were made to stop the litigation. 
 With a studied display of indifference the principal Carnegie 
 officials absented themselves on alleged vacations; but their 
 movements were conducted with method. Andrew Carnegie 
 went golfing in Florida, but stopped in Washington long enough 
 to transmit through Mr. Lawrence Phipps the first overture for 
 
 
 THE GREAT SHERIFF'S PUZZLE How to find Carnegie and his forty partners. 
 
 From a Pittsburg paper. 
 
 peace. The terms accompanying this were refused and others 
 suggested; and these in turn were rejected by Carnegie. This 
 rejection resulted in Mr. Prick's obtaining sixty per cent, more 
 in the final settlement than he otherwise would have had. 
 Then Mr. Hy. Phipps took a hand in the negotiations ; and, hav- 
 ing previously reached an understanding with Mr. Carnegie, he 
 had little difficulty in winning the adhesion of Messrs. Frick, 
 Lovejoy, and Walker to a scheme of consolidation and reorgani- 
 zation that should safeguard the interests of all and restore an
 
 SHOWERS OF GOLD 
 
 335 
 
 outward semblance of peace to the association. Five days after 
 the filing of. the Carnegie answer a peace conference met at At- 
 lantic City, when the Carnegie Steel Company underwent the 
 last metamorphosis before its final absorption in the United 
 States Steel Corporation, and dollars began to rain down upon 
 the partners faster than they could count them.
 
 CHAPTER XXI 
 THE FAILURE OF THE IRON-CLAD 
 
 THE settlement of this historic litigation 
 out of court before any evidence was 
 taken left the public in doubt as to the 
 legal value of the document known 
 as the iron-clad agreement. As 
 this agreement had an important 
 influence on the history of the 
 several Carnegie organizations, some 
 account of it and its failure to work the 
 ; ejecture" of Mr. Frick is called for in 
 this narrative; especially as it is not likely 
 that any frank statement concerning it will ever be made 
 elsewhere. 
 
 In 1884 the practice was inaugurated of rewarding excep- 
 tional services of employees by crediting them with an interest 
 in the association ; Messrs. Curry, Moore, Borntraeger, and 
 Abbot being the first to receive this favor. The book value 
 of the interests thus assigned was charged against recipients ; 
 and the shares were held by the company as security until the 
 indebtedness had been paid off. Usually the profits alone 
 sufficed to liquidate the debt. 
 
 During the next three years other employees were similarly 
 rewarded; and to meet this new condition of debtor partners a 
 plan of automatic ejecture was devised, so that no junior part- 
 ner need be kept in the association any longer than his favor 
 lasted. This was the iron-clad agreement of 1887. It was an 
 excellent device; for while serving as an incentive to further 
 efforts, such a revokable interest also kept the " young geniuses " 
 
 336
 
 J.V ENGINE 01- OPPRESSION 337 
 
 in a properly humble frame of mind. But there was no thought 
 of applying this iron-clad to the other partners, whose interests 
 were paid up. That was an afterthought. 
 
 In 1892, on the consolidation of the several companies, a 
 new iron-clad agreement was drawn up. Concerning this docu- 
 ment Mr. Henry Phipps afterwards made the following state- 
 ment : 
 
 " When the consolidation papers were agreed to by Mr. 
 Carnegie and me, at his place near Windsor, England, in 1892, 
 it was understood that the ' Iron-clad ' should only apply to 
 debtor partners, or employees, which was the intent of the 
 paper of 1887. Of course much was left to the honor of the 
 Managers, who were then, and in whom it was not unreasonable 
 for me to impose implicit confidence. Never has it been used, 
 to my knowledge, and I am confident the agreement would 
 never have been made an engine of oppression and robbery. 
 
 This information was again vouchsafed me when I signed a 
 paper relating to my death, and Carnegie said this was only to 
 apply to debtor partners, or employees, which was the intent of 
 the paper of 1887. ' But,' I replied, ' there are clauses in the 
 agreement that are unjust,' and he replied, ' Harry, I am ill, and 
 am going abroad, and fix it to your satisfaction. ' On such a 
 promise, so clear and explicit, I would have done anything for 
 my friend, and especially in his condition. 
 
 I am very sorry to say that since then he has shown no 
 willingness to correct the agreement as promised." 
 
 In apparent conformity with this understanding, limiting its 
 application to debtor partners, this iron-clad of 1892 was not 
 signed by Messrs. Carnegie, Phipps, and Lauder. Most of the 
 other partners signed it, but not all. Under its terms some 
 interests of deceased or retiring members were bought by the 
 company; but no "ejecture" took place. 
 
 In 1 897 a new and more stringent agreement was drawn 
 up, intended to reach other than debtor partners ; and this was 
 signed by Andrew Carnegie and sent from abroad on October 
 3d, with a letter to the Board of Managers, saying : 
 
 " I have signed the paper making these corrections, because 
 
 22
 
 THE FAILURE OF THE IRON-CLAD 
 
 I wished you to have something that will keep the Firm right 
 so far as my interest is concerned ; but, of course, you will get 
 all the signatures upon one corrected paper, by and by. " 
 
 This, however, was never done. Andrew Carnegie's was 
 the only signature ever appended to this document. Concern- 
 ing it Mr. Phipps wrote on October 4th from London : 
 
 " Please inform the Chairman, President and Board of Mana- 
 gers that I refuse to sign the ' Iron-clad ' or any paper of a simi- 
 lar character, and that I shall resist the buying of the Com- 
 pany's Stock as the proposed Agreement contemplates, and 
 thereby creating liabilities of which we have quite sufficient. 
 Any business man will admit, and no one will deny, that such 
 debts are foreign to the purpose for which our Company was 
 formed. Better new capital than no capital, which would be the 
 position in which we would be in if any such project were con- 
 summated. Besides the act would be clearly illegal. 
 
 For these and other good reasons, I beg that no action in 
 the matter be taken." 
 
 So the attempt to extend the provisions of the iron-clad 
 failed, and the situation remained as before. 
 
 'A futile effort was afterwards made to reach a provisional 
 agreement ; and nothing more was attempted until Mr. Carne- 
 gie tried to secure the " ejecture " of Mr. Frick. This he sought 
 to accomplish in an original and ingenious way. Having 
 secured the resignation of Mr. Frick from the chairmanship of 
 the company, Mr. Carnegie appeared before the Board of Mana- 
 gers on January 8th, 1900, and offered and had passed the 
 following resolution : 
 
 " Whereas, as appears by the Minutes of October 19, 
 1897, a proposed Supplemental Agreement, dated September 
 i, 1897, to the original Agreement, appearing in the Minutes 
 of January 18, 1887, was signed by Andrew Carnegie, condi- 
 tioned upon all members signing the same, but was objected to 
 by Henry Phipps, who refused to sign the same ; and conse- 
 quently, that it has not been signed by several other members 
 of the firm, and is, therefore, of none effect; Now, therefore, 
 be it
 
 INTERESTING RITUAL 339 
 
 Resolved : That the Resolution of October 19, 1897, ap- 
 proving said Supplemental Agreement, passed in the hope that 
 Mr. Phipps would upon reflection withdraw his opposition and 
 all members sign, is hereby rescinded ; and the Board decides 
 that no further steps be taken with the proposed Supplement, 
 thus leaving the original Agreements in full force. " 
 
 The minutes then relate that 
 
 " Without a motion, the Secretary was directed to obtain to 
 the Supplemental 'Iron-clad Agreement,' dated July I, 1892, 
 the signatures of the present members of this Association who 
 have not signed the same, it having not been presented for signa- 
 ture to the members admitted while the aforesaid Supplemental 
 Agreement of September i, 1897, was being drawn up, consid- 
 ered, revised and after its adoption." 
 
 In other words, by expunging a minute on the books of the 
 Carnegie Steel Company, it was sought to revive an agreement 
 made thirteen years before by the members of an entirely differ- 
 ent corporation, Carnegie Brothers & Co. Then an attempt 
 was made to graft onto this Carnegie Brothers' agreement 
 "a supplemental iron-clad" of the Carnegie Steel Company 
 eight years old, which had never been signed by the principal 
 owners. To make this double-decked instrument effective, 
 there were now added the signatures of Carnegie himself 
 and of some members who had n existence at the time the 
 agreement was signed by Mr. Frick, against whom all this 
 ingenuity was directed. And it was on these proceedings that 
 the Carnegie Steel Company rested its case against Henry C. 
 Frick in the greatest lawsuit ever commenced in the State of 
 Pennsylvania. 
 
 The document itself, called " the Supplemental Iron-clad " 
 for the first time in the minutes of the meeting of January 8th, 
 1900, reads as follows : 
 
 This agreement, Made this first day of July, A.D., 1892, and 
 on certain dates thereafter, as shown, between The Carnegie 
 Steel Company, Limited, party of the first part, and each one
 
 340 THE FAILURE OF THE IRON-CLAD 
 
 of the members of that Association who has hereunto affixed his 
 name, party of the second part, witnesseth : 
 
 (I) That the party of the second part, for and in consider- 
 ation of the execution and delivery of this agreement by each 
 of the other active members of said Association, The Car- 
 negie Steel Company, Limited, and in consideration of the sum 
 of One Dollar in hand paid by the party of the first part, the 
 receipt whereof, by the signing hereof, is hereby acknowledged, 
 as well as for other good and valuable considerations, to him 
 moving, does hereby covenant, promise and agree to and with 
 the party of the first part, that he, the party of the second part, 
 at any time hereafter when three-fourths in number of the per- 
 sons holding interests in said first party, and three-fourths in 
 value of said interests, shall request him, the said party of the 
 second part, so to do, will sell, assign and transfer to said first 
 party, or to such person or persons as it shall designate, all of 
 his, the said party of the second part, interest in the Limited 
 partnership of The Carnegie Steel Company, Limited. The 
 interest shall be assigned freed from all liens and encumbrances 
 or contracts of any kind, and this transfer shall at once termi- 
 nate all the interest of said party of the second part in and in 
 connection with said The Carnegie Steel Company, Limited. 
 
 (II) The request of the requisite number of members and 
 value of interests shall be evidenced by a writing signed by 
 them or their proper Agents or Attorneys in Fact ; and a copy 
 thereof shall be either served upon the party whose interest it 
 is proposed to buy, or mailed to him at his post office address; 
 at least five (5) days before the day fixed in said request to make 
 said transfer and assignment. 
 
 (III) The party of the first part covenants and agrees that 
 it will pay unto the party so selling and assigning, the value of 
 the interest assigned, as it shall appear to be on the books of 
 said The Carnegie Steel Company, Limited, on the first day 
 of the month following said assignment. 
 
 Said payment shall be in manner as follows : 
 
 If the interest assigned shall not exceed two (2) per centum 
 of the Capital Stock at par, the same shall be paid for as follows : 
 
 One-fourth cash within ninety (90) days of the date of the 
 assignment, and the balance in two equal annual payments from 
 the date of the assignment, to be evidenced by the notes of said 
 first party. 
 
 If the interest assigned shall exceed two (2) per centum, 
 but shall not exceed four (4) per centum of the Capital Stock 
 at par, then the same shall be paid for as follows : One-fourth
 
 THE DOCUMENT QIWJ.;/) 34I 
 
 cash in six months after the date of the assignment, and the 
 balance in three equal annual payments from the date of the 
 assignment, to be evidenced by the notes of the said first party. 
 
 If the interest assigned shall exceed four (4) per centum, 
 but shall not exceed twenty (20) per centum of the Capital 
 Stock at par, then the same shall be paid for as follows : One- 
 fourth cash within six months after the date of the assignment, 
 and the balance in five equal annual payments from the date of 
 the assignment, to be evidenced by the notes of said first party. 
 
 If the interest assigned shall exceed twenty (20) per centum 
 of the Capital Stock at par, then the same shall be paid for as 
 follows : One-fourth cash within eight months from the date of 
 the assignment, and the balance in ten equal annual payments 
 from the date of the assignment, to be evidenced by the notes 
 of said first party. 
 
 All deferred payments shall bear interest at six per centum 
 per annum, payable semi-annually. 
 
 (IV) This agreement, and the option the party of the second 
 part hereby gives to the party of the first part, is hereby de- 
 clared to be irrevocable, and that it may be carried out in good 
 faith, and notwithstanding any effort on the part of the party of 
 the second part to evade it, the party of the second part does 
 hereby appoint the person, who, at the time when he is called 
 upon to act, is Chairman of the party of the first part, the At- 
 torney in Fact for said party of the second part, for him and in 
 his name, place and stead to assign and transfer the said inter- 
 est in said The Carnegie Steel Company, Limited, whenever 
 under this agreement it would be the duty of said party of the 
 second part so to do. 
 
 This appointment is also irrevocable ; is coupled with the 
 interest of said party of the second part in said The Carnegie 
 Steel Company, Limited, and will justify and warrant the said 
 Attorney in Fact to act for the said party of the second part in 
 the premises just as efficaciously after the death of said party 
 of the second part, or after said party of the second part has 
 attempted to revoke this power of attorney or evade his agree- 
 ment, as if said party of the second part were alive and living 
 up to it in entire good faith. 
 
 (V) Death shall not revoke, alter or impair any of the terms 
 of this contract, but the first party shall, after the death of the 
 party of the second part, have the following time to elect to buy 
 his interest on the terms hereinbefore set out : 
 
 If the interest does not exceed four (4) per centum, four 
 months.
 
 342 THE FAILURE OF THE IROX-CLAD 
 
 If the interest exceeds four (4) per centum, but does not ex- 
 ceed twenty (20) per centum, eight months. 
 
 If the interest exceeds twenty (20) per centum, twelve 
 months, and the said party of the second part to this agreement 
 does hereby direct his personal representatives, after the death 
 of him, the said party of the second part, to approve, join in and 
 perfect any transfer his said Attorney in Fact may make, and 
 the said Executor or Executors or Administrator or Adminis- 
 trators of the party of the second part shall carry out this con- 
 tract, and all its provisions, just as if said representatives had 
 themselves made this agreement. 
 
 (VI) This agreement is hereby declared to be a lien and 
 encumbrance upon the interest of said party of the second part 
 in said The Carnegie Steel Company, Limited. No attempt of 
 the said party of the second part voluntarily to sell, pledge or 
 mortgage, and no proceedings adversely against the said party 
 of the second part' by execution, process of law, or Equity of 
 any kind, bankruptcy or insolvency, shall in any way, shape or 
 form affect, impair or alter this agreement, or any part of it, 
 or take from under its operation the respective interest of said 
 party of the second part from the clog hereof. 
 
 Both the parties hereto agree and declare that it is the set- 
 tled policy of The Carnegie Steel Company, Limited, and of 
 the party of the second part, in entire good faith, and with all 
 effort on our part to carry out its true spirit and meaning, this 
 agreement ; being satisfied that if we do so, it will be greatly 
 to the benefit of The Carnegie Steel Company, Limited, and to 
 the party of the second part as a member thereof; and that any 
 effort on the part of. said party of the second part to evade any of 
 the provisions of the same will most properly prove his unfitness 
 to be connected with said The Carnegie Steel Company, Limited. 
 
 In witness whereof, the party of the first part has hereunto 
 set its common seal, attested by the signatures of its Chairman 
 and Secretary, and approved by two of its Managers ; and the 
 party of the second part has hereunto set his hand and seal the 
 day and year first above given. 
 
 THE CARNEGIE COMPANY, LIMITED, 
 By H. C. FRICK, 
 
 Chairman. 
 
 Attest : Approved : 
 
 (SEAL) F. T. F. LOVEJOY, J. G. A. LEISHMAN, 
 
 Secretary. Manager. 
 
 F. T. F. LOVEJOY, 
 Manager.
 
 THE NOTICE OF " RJECTURE " 343 
 
 Then follow a number of signatures, some made " on the 
 day and year first above given," namely, July ist, 1892, and 
 others, including Andrew Carnegie's, nearly eight years later. 
 
 On the strength of this agreement the following notice was 
 now served on Mr. Frick, Mr. Schwab having been delegated 
 by Mr. Carnegie to obtain signatures to it : 
 
 " Under the provisions of a certain Agreement between The 
 Carnegie Steel Company, Limited, and the partners composing 
 it, known as and generally referred to as the 'Iron Clad' 
 Agreement, we, the undersigned, being three-fourths in num- 
 ber of the persons holding interests in said Association, and 
 three-fourths in value of said interests, do now hereby request 
 Henry C. Frick to sell, assign and transfer to The Carnegie 
 Steel Company, Limited, all of his interest in the capital of 
 The Carnegie Steel Company, Limited, said transfer to be 
 made as at the close of business January 31, 1900, and to be 
 paid for as provided in said Agreement. 
 
 Done at Pittsburg, Pa., this loth and nth days of January, 
 1900. 
 
 C. M. SCHWAB. ANDREW CARNEGIE. 
 GIBSON D. PACKER. GEO. LADDER. 
 
 D. G. KERR. A. M. MORELAND. 
 H. E. TENER, JR. JAMES GAYLEY. 
 A. C. CASE. D. M. CLEMSON. 
 JNO. .McLEOD. THOS. MORRISON. 
 LEWIS T. BROWN. L. C. PHIPPS. 
 GEO. E. McCAGUE. CHAS. L. TAYLOR. 
 W. B. DICKSON. JNO. C. FLEMING. 
 
 E. F. WOOD. W. W. BLACKBURN. 
 GEO. MEGREW. H. P. BOPE. 
 
 J. E. SCHWAB. JAMES SCOTT. 
 
 HOMER J. LINDSAY. W. H. SINGER. 
 
 ALEXR. R. PEACOCK. W. E. COREY. 
 
 MlLLARD HUNSIKER, GEO. H. WlGHTMAN. 
 
 per C. M. SCHWAB, J. OGDEN HOFFMAN. 
 
 (Power Attorney). CHAS. W. BAKER. 
 
 I hereby certify that the foregoing is a true and correct 
 copy of the Original now in file in this office. 
 This 1 5th day of January, 1900. 
 
 F. T. F. LOVEJOY, 
 
 Secretary."
 
 344 THE FAILURE OF THE IRON-CLAD 
 
 It will be noticed that Mr. Lovejoy simply signed it in his 
 official character as secretary of the company. Mr. Curry was on 
 his death-bed ; but he was asked to sign it and refused. " Mr. 
 Frick is my friend," said Mr. Curry. " And am I not also your 
 friend ? " Mr. Carnegie asked. " Yes ; but Mr. Frick has never 
 humiliated me," was the pathetic answer of the dying man. 
 
 Mr. Henry Phipps not only refused to sign the demand, but 
 joined Mr. Frick in protesting against the action of the Board. 
 These protests are as follows: 
 
 To THE CARNEGIE STEEL COMPANY, LIMITED: 
 
 I have read a copy of the minutes of the Board of Managers 
 of the Carnegie Steel Company, Limited, dated January 8th, 
 1900, handed to me Friday afternoon, January I2th, 1900, and 
 I desire particularly to call your attention to certain actions of 
 the Board regarding the so-called agreements as to partners' 
 interests, dated 1887, 1892 and 1897; 
 
 I dissent from some of the statements of alleged facts therein 
 contained, and I, certainly, do not agree, but object to and deny, 
 that the said action of the Board of Managers on January 8th, 
 1900, and, indeed, any action of the Board of Managers, could 
 or did re-instate the so-called agreement of 1887. 
 
 As I have heretofore stated, I am opposed and object to any 
 attempt not only to force from any partner his interest in our 
 Company, but, also, to the right of our Company to use its 
 capital in the purchase of any such interest. 
 
 HENRY PHIPPS, JR. 
 
 PITTSBURGH, January 15, 1900. 
 
 To THE CARNEGIE STEEL COMPANY, LIMITED. 
 
 On Friday evening, January I2th, 1900, for the first time I 
 learned that the Board of Managers of your Company secretly 
 and without notice to me, at a meeting on Monday, January 
 8th, 1900, passed a resolution offered by Andrew Carnegie, 
 rescinding a former resolution of October igth, 1897, touching 
 the agreement of September ist, 1897, and at the same time 
 your Secretary was directed to procure the signatures of the 
 present members of the association who had not signed the same 
 to what is now for the first time in your minutes called " the 
 Supplemental Iron Clad agreement dated July ist, 1892."
 
 SEIZURE OF THE PRICK IXTEREST 345 
 
 This is to notify you that all the said action on January 8th, 
 1900, was taken without my knowledge or consent and I do 
 hereby protest against and object to the same. In some re- 
 spects the recitals or statements therein contained are untrue 
 in fact. The action did not and could not as the resolution as- 
 serts, re-instate the so-called agreement of 1887. At the in- 
 stigation of Andrew Carnegie you now speciously seek without 
 my knowledge or consent and after a serious personal disagree- 
 ment between Mr. Carnegie and myself, and by proceedings 
 purposely kept secret from me to make a contract for me under 
 which Mr. Carnegie thinks he can unfairly take from me my 
 interest in The Carnegie Steel Company, Limited. Such pro- 
 ceedings are illegal and fraudulent as against me, and I now 
 give you formal notice that I will hold all persons pretending 
 to act thereunder liable for the same. 
 
 H. C. FKICK. 
 
 PITTSBURGH, January I3th, 1900. 
 
 No attention was paid to these protests, and on February ist 
 the following letter was sent to Mr. Frick : 
 
 THE CARNEGIE STEEL COMPANY, LIMITED, 
 General Offices; Carnegie Building, 
 
 PITTSBURG, PA., February ist, 1900. 
 Mr. H. C. Frick, 
 Building. 
 
 DEAR SIR : I beg to advise you that pursuant to the terms 
 of the so called " Iron Clad Agreement " and at the request of 
 the Board of Managers, I have to-day acting as your attorney 
 in fact executed and delivered to The Carnegie Steel Company, 
 Limited, a transfer of your interest in the capital of said Com- 
 pany. 
 
 Yours truly, 
 
 C. M. SCHWAB. 
 
 Such is the interesting story of the famous iron-clad agree- 
 ment, and Mr. Carnegie's attempt to use it for the "ejecture" 
 of Mr. Frick.
 
 CHAPTER XXII 
 
 THE ATLANTIC CITY COMPROMISE 
 
 ONE of the junior members of the 
 Carnegie Steel Company, recently 
 speaking of these events, un- 
 consciously adopted the circus 
 simile used by one of a former 
 generation of partners, else- 
 where quoted, in explanation 
 of the apparent willingness 
 with which he and his col- 
 leagues joined Carnegie in the 
 effort to depose Frick. " We 
 were simply a band of circus 
 horses," he said, "and we all jumped as the 
 ring-master cracked his whip." 
 
 Although several of the junior partners protested at a secret 
 meeting, only one of the well-trained band, besides Curry, openly 
 shied and refused to jump at the crack of the ring-master's 
 whip. This was Secretary Lovejoy. Entering the Carnegie 
 employ in 1881 as a telegraph operator, he had won his partner- 
 ship through his unusual ability as an accountant; and for 
 many years he had filled the responsible office of secretary to 
 the entire satisfaction of his seniors. In particular he had won 
 the confidence of Mr. Frick ; and during the Homestead strike 
 had ably served as the chairman's chief assistant. Frankly ad- 
 mitting his obligations to Mr. Frick, he took a unique position 
 in the fight ; and refused to be cajoled or threatened away from 
 the side of his chief. He and Curry were the only ones of the 
 thirty odd "young geniuses " to openly deny that a majority of 
 
 shares necessarily carried with it a surplus of wisdom and 
 
 346
 
 FRANCIS F. LOVEJOY.
 
 Plate XII.
 
 LOVEJOY' S IXDKriiXDEXCE 347 
 
 equity. He also accentuated his isolation by filing a separate 
 answer in the Equity Suit, in which he advanced in terse phrase- 
 ology an original argument against the validity of his colleagues' 
 acts. 
 
 The independence thus shown by Mr. Lovejoy greatly facili- 
 tated an amicable adjustment of the difficulty; for Andrew 
 Carnegie refused to treat with Frick in any way, and it be- 
 came necessary for the latter to find some one to represent him 
 who had the ability to cope with the combined forces of his 
 opponents. From this difficult position Lovejoy emerged with 
 credit. 
 
 The first peace conference was held at Andrew Carnegie's 
 residence in New York on Saturday, March i/th, 1900. It 
 was attended by Messrs. Carnegie, Henry Phipps, Schwab, and 
 Lovejoy. The long-talked-of consolidation of the Carnegie 
 and Frick companies was now finally agreed upon ; and the pre- 
 liminaries settled for a compromise of the personal differences 
 of the leading partners. Fearing that the newspapers would 
 suspect what was going on if the whole Board of Managers sud- 
 denly appeared in New York, it was arranged to continue the 
 conference on Monday at Atlantic City; and Carnegie tele- 
 graphed to Pittsburg, telling the members of the Board to leave 
 on Sunday night for the New Jersey resort. To disarm sus- 
 picion they were instructed to take their wives with them. 
 
 Mr. Frick had remained in Pittsburg; but he was kept in- 
 formed of the progress of the negotiations over the telephone 
 by Mr. Lovejoy. He was satisfied with the plans outlined, 
 provided no details inimical to his interests were introduced ; 
 and Lovejoy spent most of the night drafting the agreement. 
 
 On Monday this agreement was read to the assembled board 
 at Atlantic City. In general it was acceptable to Carnegie and 
 his adherents ; but one clause provoked bitter opposition and 
 jeopardized the whole plan. It appeared that Carnegie had 
 registered a vow never to recognize Frick as a partner; and to 
 maintain his consistency he demanded that Frick's interest
 
 348 THE ATLANTIC CITY COMPROMISE 
 
 should not be given direct to him, but through the hands of a 
 trustee. This was the only thing in the agreement that was 
 productive of discord; and concerning it Carnegie displayed 
 such heat and persistence that Lovejoy, rather than imperil the 
 settlement, conceded the point. 
 
 The next day the amended agreement was adopted; and just 
 as the last signatures were being affixed Mr. James B. Dill 
 arrived by special train from New York to draw up the new 
 company's charter. The same afternoon the conference ended ; 
 and Schwab celebrated the conclusion of peace by a banquet 
 at the Bellevue Hotel, Philadelphia, which he had ordered by 
 telegraph. 
 
 The agreement thus reached reads as follows : 
 
 MM. Schwab, Carnegie, L. C. Phipps, Morrison, Clemson, 
 Gayley and Moreland, representing The Carnegie Steel Com- 
 pany, Limited, and Henry Phipps, representing John Walker 
 and others of the H. C. Frick Coke Company, agree as follows : 
 
 All the business of The Carnegie Steel Company, Limited, 
 and the H. C. Frick Coke Company to be merged substantially 
 as shown in paper "A " of June 3rd, 1899, attached hereto, ad- 
 justments to be made up to April ist, 1900, which will bring 
 the two concerns into the same relative positions as to book- 
 values as they occupied April ist, 1899. 
 
 In the matter of the dispute between the two companies as 
 to prices of coke, neither party shall be held to be right or 
 wrong, both shall* be considered equally so, therefore the differ- 
 ence will be split in two, each party yielding one-half of its 
 claim. 
 
 ANDREW CARNEGIE. 
 
 HENRY PHIPPS. 
 
 F. T. F. LOVEJOY. C. M. SCHWAB. 
 
 Witness : JAS. BERTRAM. L. C. PHIPPS. 
 
 THOS. MORRISON. 
 
 JAMES GAYLEY, 
 
 D. M. CLEMSON. 
 
 A. M. MORELAND. 
 
 The same parties representing The Carnegie Steel Com- 
 pany, Limited, and F. T. F. Lovejoy representing H. C, Frick, 
 under full authority so to do, agree as follows :
 
 TREATY OF PEACE 
 
 349 
 
 The Carnegie Steel Company, Limited, will hand over to 
 said Lovejoy Six per cent of the Stocks and Securities it ob- 
 tains under this merger, said Lovejoy to receipt for the same in 
 full of all claims of said Frick against the Company or any of 
 its members. To this receipt the signature of H. C. Frick will 
 also be appended, and H. C. Frick will thereupon withdraw his 
 suit against the Company. Meanwhile all legal proceedings to 
 remain in statu quo. 
 
 The Committee to carry out the details of this Agreement 
 is to consist of C. M. Schwab, G. D. Packer, F. T. F. Lovejoy 
 and A. M. Moreland, who shall act by unanimous consent, but 
 that failing, all differences if any will be referred to Judge J. 
 H. Reed, whose decision shall be final. 
 
 The plans for carrying out this Agreement are more fully 
 set forth in paper marked " B " herewith appended and made 
 part of this Agreement. 
 
 We, the undersigned, pledge ourselves to carry out the spirit 
 of this agreement in good faith and with every desire to bring 
 it to a successful conclusion. 
 
 L. C. PHIPPS. 
 THOS. MORRISON. 
 JAMES GAYLEY. 
 D. M. CLEMSON. 
 Witness : JAS. BERTRAM. 
 F. T. F. LOVEJOY. 
 A. M. MORELAND, 
 
 ANDREW CARNEGIE. 
 
 H. PHIPPS. 
 
 C. M. SCHWAB. 
 
 STATEMENT "A," SHOWING ACCOUNTS OF STOCKHOLDERS 
 IN THE CARNEGIE STEEL COMPANY, LIMITED, AND THE 
 II. C. FRICK COKE COMPANY, AFTER THE*ACCEPTANCE OF 
 CERTAIN OPTIONS ON THE STOCKS, GIVEN APRIL 24, 1899. 
 
 Stockholders, 
 
 Personal Account. Value of C. S. Co., Value of H. C. F. C. 
 C. S. Co., Ltd. Ltd. Stock. Co. Stock. 
 
 Andrew Carnegie, Cr. $4 
 
 ,025,055.76 $146,250,000.00 
 
 $30,039,898.09 
 
 Henry Phipps, Cr. 
 
 151,092.98 
 
 27,500,000.00 
 
 7,652,354-74 
 
 H. C. Frick, Cr. 
 
 50,911.89 
 
 15,000,000.00 
 
 16,604,529.50 
 
 George Lauder, Cr. 
 
 107,487.38 
 
 10,000,000.00 
 
 1,187,237.97 
 
 C. M. Schwab, Dr. i 
 
 ,168,024.90 
 
 7,500,000.00 
 
 618,575.66 
 
 W. H. Singer, Cr. 
 
 358,916.61 
 
 5,000,000.00 
 
 773,031.18 
 
 H. M. Curry, Dr. 
 
 81,486.59 
 
 5,000,000.00 
 
 771,183.88 
 
 L. C. Phipps, Dr. 
 
 656,173.70 
 
 5,000,000.00 
 
 412,627.36 
 
 A. R. Peacock, Dr. 
 
 726,017.98 
 
 5,000,000.00 
 
 412,259.46 
 
 F. T. F. Lovejoy, Dr. 
 
 110,593.76 
 
 1,666,666.67 
 
 138,029.63 
 
 Thos. Morrison, Dr. 
 
 185,067.94 
 
 1,666,666.67 
 
 137,843.16 
 
 Geo. H. Wightman, Dr. 
 
 248,119.44 
 
 1,666,666.67 
 
 137,661.73
 
 350 
 
 THE ATLANTIC CITY COMPROMISE 
 
 Stockholders. 
 
 
 Personal Account. 
 
 Value of C. S. Co., 
 
 Value of H. C. F. C. 
 
 
 
 C.S. Co.. Ltd. 
 
 Ltd. Stock. 
 
 Co. Stock. 
 
 D. M. Clemson, 
 
 Dr. 
 
 $258,754.79 
 
 $1,666,666.67 
 
 $137,661.73 
 
 James Gayley, 
 
 Dr. 
 
 186,619.70 
 
 1,527,777-78 
 
 126,401.58 
 
 A. M. Moreland, 
 
 Dr. 
 
 233,044.75 
 
 1,527,777.78 
 
 126,220.15 
 
 Chas. L. Taylor, 
 
 Dr. 
 
 96,982.26 
 
 1,250,000.00 
 
 103,337.01 
 
 A. R. Whitney, 
 
 
 
 1,250,000.00 
 
 102,974.15 
 
 W. W. Blackburn, 
 
 Dr. 
 
 29,091.29 
 
 833,333-33 
 
 69,012.29 
 
 Jno. C. Fleming, 
 
 Dr. 
 
 23,510.01 
 
 833,333.33 
 
 69,012.29 
 
 J. Ogden Hoffman, 
 
 Dr. 
 
 62,231.06 
 
 833,333.33 
 
 69,012.29 
 
 Milld. Hunsiker, 
 
 Dr. 
 
 94,79 I -77 
 
 833,333.33 
 
 69,012.29 
 
 Geo. E. McCague, 
 
 Dr. 
 
 108,797.58 
 
 833,333-33 
 
 69,012.29 
 
 James Scott, 
 
 Dr. 
 
 106,888.16 
 
 833,333-33 
 
 69,012.29 
 
 H. P. Bope, 
 
 Cr. 
 
 13,285.95 
 
 277.777.78 
 
 22,883.14 
 
 W. E. Corey. 
 
 Dr. 
 
 140.577.43 
 
 833,333.33 
 
 68,649.43 
 
 Jos. E. Schwab, 
 
 Dr. 
 
 176,301.22 
 
 833,333-33 
 
 68,649.43 
 
 L. T. Brown. 
 
 Dr. 
 
 107,002.79 
 
 555,555-55 
 
 45,766.29 
 
 D. G. Kerr. 
 
 Dr. 
 
 43,197.23 
 
 277,777-78 
 
 22,883.14 
 
 H. J. Lindsay, 
 
 Dr. 
 
 43,197.23 
 
 277,777.78 
 
 22,883.14 
 
 E. F. Wood, 
 
 Dr. 
 
 48,690.11 
 
 277,777.78 
 
 22,883.14 
 
 H. E. Tener, Jr., 
 
 Dr. 
 
 48, 690'. 1 1 
 
 277,777-78 
 
 22,883.14 
 
 Geo. Megrew, 
 
 Dr. 
 
 48,690.11 
 
 277,777.78 
 
 22,883.14 
 
 G. D. Packer, 
 
 Dr. 
 
 48,690.11 
 
 277,777.78 
 
 22,883.14 
 
 W. B. Dickson, 
 
 Dr. 
 
 63,805.55 
 
 277,777.78 
 
 22,883.14 
 
 A. C. Case, 
 
 Dr. 
 
 63,805.55 
 
 277,777.78 
 
 22,883.14 
 
 John McLeod, 
 
 Dr. 
 
 63,805.55 
 
 277,777-78 
 
 22,883.14 
 
 Chas. W. Baker, 
 
 Dr. 
 
 63,805.55 
 
 277,777.7? 
 
 22,883.14 
 
 Undivided, 
 
 Dr. 
 
 271,731.30 
 
 1,250,000.00 
 
 102,974.24 
 
 Mrs. L. C. Carnegie 
 
 
 
 
 5,018,026.81 
 
 John Walker 
 
 
 
 
 1,434,398.29 
 
 Thomas Lynch 
 
 
 
 
 640,794.18 
 
 Vandervort Estate 
 
 
 
 
 521,794.83 
 
 Borntraeger Estate . . 
 
 
 
 
 360,103.45 
 
 G. B. Bosworth 
 
 
 
 
 355,497.51 
 
 J. G. A. Leishman , 
 
 
 
 
 360,085.87 
 
 Robt. Ramsay 
 
 
 
 
 194,355.37 
 
 John Pontefract 
 
 
 
 
 194,355-37 
 
 S. L. Schoonmaker 
 
 
 
 
 194,355.37 
 
 Mrs. C. A. Wilson 
 
 
 
 
 92,631.07 
 
 Miss H. R. Wilson 
 
 
 
 
 40,166.20 
 
 John Walker. Gdn 
 
 
 
 
 40,161.36 
 
 Miss C. B. Wilson 
 
 
 
 
 40,110.99 
 
 John T. Wilson. 
 
 
 
 
 40,082.89 
 
 Miss E. C. Wilson 
 
 
 
 
 39,425.79 
 
 Totals Dr. $901,434.95 $250,000,000.00 $70,000,000.00 
 
 Interest adjusted to June i, 1899. 
 Pittsburg, June 3, 1899.
 
 CONSOLIDATION AT LAST 351 
 
 MEMORANDUM " B," covering details agreed upon at Atlantic 
 City this I9th March, 1900, by each and every of the persons 
 whose names are attached hereto; each agreeing with the others 
 that he will do all in his power in good faith to carry out this 
 agreement and to induce every other Stockholder in the Com- 
 panies named to join in this agreement, being convinced that it 
 will be for the best interests of all concerned: 
 
 The business of The Carnegie Steel Company, Limited, the 
 H. C. Frick Coke Company, and all the Companies subsidiary 
 to each, cr either, to be consolidated, thus : 
 
 All of the lands, works and other properties now owned and 
 operated by The Carnegie Steel Company, Limited, to be sold 
 and transferred to .the Carnegie Steel Company, an existing 
 Pennsylvania Corporation, saving and excepting the Stocks held 
 by it in certain other Corporations, to wit, the H. C. Frick 
 Coke Company, with all its subsidiary Companies, the Oliver 
 Iron Mining Company, the Union Railroad Co., the Pittsburg, 
 Bessemer & Lake Erie R. R. Co., and all Stocks in other Com- 
 panies, now held by The Carnegie Steel Company, Limited, 
 which are considered permanent investments and not merely 
 securities ; payment therefor to be made in Stock of the Car- 
 negie Steel Company, the Capital whereof shall be increased to 
 (850,000,000) Fifty Million Dollars. 
 
 The Stock now held by The Carnegie Steel Company, Lim- 
 ited, in the H. C. Frick Coke Company, the Youghiogheny 
 Northern Railway Co., the Youghiogheny Water Co., the Mt. 
 Pleasant Water Co., and the Trotter Water Co., to be distrib- 
 uted among the Shareholders of The Carnegie Steel Company, 
 Limited, in proportion to their several interests, said Share- 
 holders to be charged for said Stocks at their respective book 
 values as at April ist, 1900. 
 
 ANDREW CARNEGIE. 
 F. T. F. LOVEJOY. HENRY PHIPPS. 
 
 CHARLES M. SCHWAB. 
 LAWRENCE C. PHIPPS. 
 THOMAS MORRISON. 
 JAMES GAYLEY. 
 DAVID M. CLEMSON. 
 ANDREW M. MORELAND. 
 
 A Corporation to be formed under the laws of New Jersey, 
 having the name and title The Carnegie Company, with $160,- 
 000,000 Capital Stock, which Company shall acquire all the 
 stock of the Carnegie Steel Company, the H. C. Frick Coke
 
 352 THE ATLANTIC CITY COMPROMISE 
 
 Co., all their subsidiary Companies, and the Stocks of all other 
 Companies now held by The Carnegie Steel Company, Limited, 
 which are held as investments; by purchase, paying to the 
 Stockholders therefor as follows : 
 
 For all of the Stock in the Carnegie Steel Company, and for 
 all of the Stocks now held by The Carnegie Steel Company, 
 Limited, saving and excepting the Stocks held by it in the H. 
 C. Frick Coke Co., the Youghiogheny Northern Rly. Co., the 
 Youghiogheny Water Co., the Mt. Pleasant Water Co., and the 
 Trotter Water Co., One hundred and twenty-five million dollars 
 in Stock of The Carnegie Company and a like amount in Bonds 
 of said Company, as hereinafter described : 
 
 For all of the Stock in the H. C. Frick Coke Co., the 
 Youghiogheny Northern Rly. Co., the Youghiogheny Water 
 Co., the Mt. Pleasant Water Co., the Trotter Water Co., and 
 the Union Supply Co., Limited; Thirty-five million dollars in 
 Stock of The Carnegie Company, and a like amount in Bonds 
 of said Company, as hereinafter described. 
 
 Preliminary to the foregoing, adjustments shall be made as 
 follows : 
 
 A Dividend shall be declared by The Carnegie Steel Com- 
 pany, Limited, of such amount as shall be necessary to make 
 the " Book Values " of the Stocks of The Carnegie Steel Com- 
 pany, Limited, (exclusive of its holdings in the H. C. Frick 
 Coke Co. and its subsidiary Companies) on the one hand, and 
 of the H. C. Frick Coke Company and all its subsidiary Com- 
 panies on the other, relatively the same on April ist, 1900, as 
 they were on April ist, 1899, when the values of $250,000,000 
 and $70,000,000, respectively, were first established. 
 
 After The Carnegie Steel Company, Limited, shall have 
 distributed among its shareholders its holdings of Stock in the 
 H. C. Frick Coke Co. and its subsidiary Companies, adjust- 
 ments shall be made between all the Stockholders in the H. C. 
 Frick Coke Co., so that each shall hold his proper and propor- 
 tionate amount of Stock in the subsidiary Companies ; such 
 adjustments to be made at the respective " Book-values," April 
 ist, 1900, of the said Stocks. 
 
 The Bonds to be issued by The Carnegie Company shall be 
 in such form as shall be agreed upon by the Committee herein- 
 after named, under the directions of the General Counsel, and 
 shall embody the following : 
 
 Bonds payable in One hundred years ; interest payable in 
 New York, semi-annually, at five per cent per annum, free of 
 all Tax; to be in such amounts, $1,000, $5,000 and $10,000,
 
 THE CARNEGIE COMPANY 353 
 
 as may be found best; to be divided into four series of $40,- 
 000,000 each so as to make interest fall due February ist and 
 August ist; March ist and September ist, May ist and No- 
 vember ist, June ist and December ist of each year; secured 
 by a Mortgage or Deed of Trust covering all the Stocks held 
 by The Carnegie Company in all the subsidiary or operating 
 Companies ; after Five years a Sinking Fund of one-half of one 
 per cent, on said Bonds to be established ; Bonds to be subject 
 to be drawn for redemption out of Sinking Fund at any time at 
 1.05 after five years. In case of default in the payment of 
 interest, the principal may become due and payable. No per- 
 sonal liability on Bonds; to be registered or not, at holder's 
 option ; with such other provisions as are usual or advised by 
 counsel for the proper protection of the Bondholders. 
 
 Each Stockholder in The Carnegie Company whose interest 
 has not been fully paid up shall have the right and privilege at 
 his option, of selling to The Carnegie Company, at par, suffi- 
 cient of his Bonds to liquidate his indebtedness, or of deposit- 
 ing as collateral security for such indebtedness, Bonds or Stock 
 of The Carnegie Company in proportion to his indebtedness; 
 three times in Stock or one and one-half times in Bonds, at his 
 option. 
 
 Stock in The Carnegie Company shall be reserved to the 
 amount of $3,200,000 for the purpose of selling interests in 
 said Company to deserving officials and employees, carrying out 
 the plan heretofore established by Carnegie Brothers and Co., 
 Ltd., which is declared to be an essential feature of the new 
 Company. 
 
 Signed in duplicate ; one copy being intrusted to A. M. 
 Moreland, Secretary of The Carnegie Steel Company, Limited, 
 and the other copy to F. T. F. Love joy. 
 
 ANDREW CARNEGIE. 
 HENRY PHIPPS. 
 
 C. M. SCHWAB. 
 L. C. PHIPPS. 
 THOS. MORRISON. 
 JAMES GAYLEY. 
 
 D. M. CLEMSON. 
 A. M. MORELAND. 
 F. T. F. LOVEJOY. 
 
 Witness : JAS. BERTRAM. 
 
 We, the undersigned, Shareholders in The Carnegie Steel 
 Company, Limited, having read the foregoing Agreement, do 
 23
 
 354 THE ATLANTIC CITY COMPROMISE 
 
 now hereby, by the signing hereof, fully approve the arrange- 
 ment and join in the same as to our interest. 
 
 GEORGE LAUDER, 
 
 pr. ANDREW CARNEGIE. 
 
 GIBSON D. PACKER. 
 
 We, the undersigned, Stockholders in the II. C. Frick Coke 
 Company, having read the foregoing Agreement, do now here- 
 by, by the signing hereof, fully approve the arrangement and 
 join in the same as to our interest. 
 
 MRS. LUCY C. CARNEGIE, Ex. 
 
 by ANDREW CARNEGIE. 
 
 Five days after the signing of this agreement a charter was 
 obtained of the State of New Jersey, incorporating the Carne- 
 gie Company for the purpose of acquiring all the stock of the 
 Carnegie Steel Company, the H. C. Frick Coke Company, all 
 their subsidiary companies, and the stocks of all companies 
 hitherto held by the Carnegie Steel Company. It is worth 
 noticing that the committee charged with the carrying out of 
 the agreement ignored that part of it which, at the instance of 
 Mr. Carnegie, excluded Mr. Frick ; and his name appeared third 
 on the list of incorporators of the new company, as a subscriber 
 for 15,484 shares. 
 
 On March 3Oth the committee made its report concerning 
 the adjustment of the relative book values of the two merging 
 companies as follows : 
 
 PITTSBURG, PA., March 30, 1900. 
 
 To THE BOARD OF MANAGERS OF 
 
 THE CARNEGIE STEEL COMPANY, LIMITED. 
 
 The Committee appointed by the Shareholders of The Car- 
 negie Steel Company, Limited, and the H. C. Frick Coke Com- 
 pany, for the purpose of carrying out the plans of Re- Organiza- 
 tion of the Carnegie Interests, beg leave to report : 
 
 In the matter of the adjustment of the relative Book Values 
 of The Carnegie Steel Company, Limited, and the H. C. Frick 
 Coke Company with its subsidiary Companies :
 
 AX 88 PER CEXT. DIVIDEND 355 
 
 At April ist, 1899, the relative Book Values were as fol- 
 lows : 
 
 The Carnegie Steel Company, Limited .... 3.27986 
 H. C. Frick Coke Company and Allies. ... i. 
 
 Based on careful estimates of March Profits 
 of all the Companies whose Stock is included, 
 the same relative Book Values, at April i, 1900, 
 show a surplus for distribution to Shareholders 
 of The Carnegie Steel Company, Limited, of. .$16,277,464.69 
 
 To this should be added the holdings of The 
 Carnegie Steel Company, Limited, in the Stock 
 of the H. C. Frick Coke Company and its sub- 
 sidiary Companies, carried on the Steel Com- 
 pany's books at 5*585,174.39 
 
 Total for distribution $21,862,639.08 
 
 This Committee would, therefore, recommend the declaring 
 by The Carnegie Steel Company, Limited, of a final Dividend 
 of 88^' or $22,000,000.00, payable as follows: 
 
 To cover the Value of the Stock of the H. 
 C. Frick Coke Company and its subsidiary Com- 
 panies charged to Partners in accordance with 
 the Re- Organization Agreement $5*585, 174. 39 
 
 3$, payable in Cash on demand by either 
 " Paid-up " Partners or " Debtor " Partners whose 
 interests were purchased not later than January 
 
 i, 1899 750,000.00 
 
 Balance payable at such times and in such in- 
 stalments as this Committee shall decide after 
 consultation with the principal Partners and the 
 Treasurer i 5,664,825.61 
 
 Total $22,000,000.00 
 
 Respectfully submitted, 
 
 C. M. SCHWAB. 
 G. D. PACKER. 
 F. T. F. LOVEJOY. 
 
 A. M. MORELAND.
 
 356 
 
 THE ATLANTIC CITY COMPROMISE 
 
 The following is a correct list of stockholders and bond- 
 holders of the Carnegie Company, as formed or organized after 
 the Frick- Carnegie suit : 
 
 Capital ' $160,000,000.00 
 
 Bonds $160,000,000.00 
 
 Par Value of Stock, $1,000.00 per Share. 
 
 Shares of Stock. Bonds. 
 
 Andrew Carnegie 86,382 $88, 147,000 
 
 Henry Phipps 17,227 17,577,000 
 
 Henry C. Frick 15,484 15,800,000 
 
 George Lauder 5,482 5,593,ooo 
 
 Charles M. Schwab 3,980 4,061,000 
 
 Henry M. Curry 2,829 2,886,000 
 
 William H. Singer 2,830 2,886,000 
 
 Lawrence C. Phipps 2,654 2,707,000 
 
 Alexander R. Peacock 2,653 2,707,000 
 
 Lucy C. Carnegie 2,459 2,510,000 
 
 Francis T. F. Lovejoy 884 902,000 
 
 James Gayley 885 902,000 
 
 Thomas Morrison 885 902,000 
 
 Andrew M. Moreland 885 902,000 
 
 Daniel M. Clemson 885 902,000 
 
 George H. Wightman 884 902,000 
 
 John Walker 722 737, ooo 
 
 Charles L. Taylor 663 677,000 
 
 Alfred R. Whitney 663 677,000 
 
 John C. Fleming 442 451,000 
 
 William W. Blackburn 442 451,000 
 
 J. Ogden Hoffman 442 451,000 
 
 Millard Hunsiker . . 442 451,000 
 
 George E. McCague 442 451,000 
 
 James Scott 442 . 451,000 
 
 William E. Corey 442 451,000 
 
 Joseph E. Schwab 442 451,000 
 
 Thomas Lynch. ... 317 323,000 
 
 Henry P. Bope 295 301,000 
 
 Lewis T. Brown 295 301,000 
 
 Robert T. Vandervort 255 260,000 
 
 John B. Jackson 176 179,000 
 
 John G. A. Leishman 176 179,000 
 
 Giles B. Bosworth .' 176 179,000 
 
 David G. Kerr 147 150,000 
 
 Homer J. Lindsay 147 150,000 
 
 Ezra F. Wood 147 150,000 
 
 Hampden E. Tener, Jr 147 150,000 
 
 George Megrew 147 1 50,000 
 
 Gibson D. Packer 147 1 50,000 
 
 William B. Dickson 147 150,000
 
 THE CARNEGIE VETERANS 
 
 357 
 
 Albert C. Case 
 
 John McLeod 
 
 Charles W. Baker 
 
 Janet E. Rarnsay 
 
 John Pontefract 
 
 Sylvanus L. Schoonmaker 
 
 Azor R. Hunt 
 
 Alva C. Uinkey. ... 
 
 P. Toesten Berg , 
 
 Charles McCreery , 
 
 Caroline A. Wilson 
 
 Helen R. Wilson 
 
 Clara B. Wilson , 
 
 John T. Wilson. 
 
 Edna C. Wilson 
 
 James G. Hunter 
 
 Emil Swenson 
 
 James J. Campbell 
 
 Frederic H. Kindl 
 
 Tames B. Dill 
 
 Shares of Stock. 
 
 147 
 147 
 M7 
 
 95 
 
 95 
 
 95 
 
 74 
 
 74 
 
 74 
 
 74 
 
 45 
 
 19 
 
 19 
 
 19 
 
 19 
 
 19 
 
 19 
 
 19 
 
 19 
 i 
 
 Bonds. 
 
 $I5O,OOO 
 
 ISO.OOO 
 
 I5O,OOO 
 
 97.OOO 
 
 97,OOO 
 
 97.OOO 
 
 75.OOO 
 
 75.OOO 
 
 75,ooo 
 75,000 
 46,000 
 20,000 
 20,000 
 20,000 
 20,000 
 19,000 
 19,000 
 19,000 
 19,000 
 
 Andrew M. Moreland, Trustee 3.189 
 
 Total 160,000 
 
 $160,000,000 
 
 Thus was reached the final metamorphosis of the Carnegie 
 Steel Company. In the new organization Mr. Frick was 
 omitted from the directorate, as was also Mr. Carnegie. Mr. 
 Lovejoy was also dropped. But outwardly peace prevailed; 
 and the only remaining trace of a past conflict is the Society 
 of Carnegie Veterans, formed of the loyal band of Carnegie 
 adherents. No former partner is eligible for membership 
 in this association who did not take part in the attempt to de- 
 pose Mr. Frick. Once a year these young geniuses hold a ban- 
 quet; and, amid palms and electric mottoes to the glory of him 
 who made them rich, recount their battles and congratulate each 
 other on the outcome of their victory. And the dear departed 
 shades of Kloman, Shinn, Coleman, T. M. Carnegie, Stewart 
 Curry, and others long forgotten, would listen in vain for a word 
 of recognition of their share in these triumphs.
 
 CHAPTER XXIII 
 THE BILLION-DOLLAR FINALE 
 
 THE absorption of the Carnegie Company by 
 the United States Steel Corporation has been 
 invested with much dignity and lofty cir- 
 cumstance by numerous writers in reviews 
 and magazines ; and owing to its magnitude, 
 running into hundreds of millions, the 
 transaction has struck the popular imagina- 
 tion and acquired a world-wide interest. To those who watched 
 the incident from the inside, who saw the framework of the 
 scenery and the elaborate mechanism of the stage effects, who 
 attended the rehearsals and heard the subdued tones of the 
 prompter, there was a certain grim humor in a performance 
 which those in front watched with bated breath. But despite 
 its lack of spontaneity, the proceeding had the dignity con- 
 ferred by magnitude; and its brilliant success made it impres- 
 sive even to those who heard the creaking of the machinery. 
 
 The time is not yet ripe for a full and frank description of 
 the events leading up to this important consolidation ; but a 
 rough outline of them may be given. 
 
 About a year before Mr. Frick resigned the headship of the 
 Carnegie Steel Company he appointed a committee, with Mr. 
 Clemson as chairman, to report on a project he had formed of 
 building a tube works at Conneaut, the Lake Erie terminus of 
 the Bessemer Railroad. There being little freight from Pitts- 
 burg to the Lake port, the ore trains returned for the most part 
 empty ; and to utilize this profitless haul, various plans had 
 been discussed by Mr. Erick and his colleagues for the build- 
 ing of blast-furnaces and other works at Conneaut that woujd 
 
 353
 
 PICKWICKIAN HUMOR 359 
 
 call for Pittsburg coal and coke. One of these schemes is out- 
 lined in the minutes of the meeting of the Board of Managers 
 held on January i6th, 1899, previously quoted; and at the same 
 meeting Mr. Clemson made a remark which showed that, after 
 making the investigation authorized by Mr. Frick, he was in 
 favor of also starting the tube works. 
 
 It is probable that these works would have been built by the 
 Carnegie managers but for the attempt made the same year to 
 sell out to the Moore Syndicate ; it being thought undesirable 
 to antagonize, while such a deal was pending, the important finan- 
 ciers who were interested in the National Tube Company, with 
 which the new works would have come into competition. But 
 there was no idea, at this time, of holding the tube project as a 
 threat over anybody. Jt was a simple business plan growing 
 out of the need for filling the empty ore-cars on their return to 
 Conneaut. 
 
 After the reorganization of the steel company consequent 
 on the withdrawal of Mr. Frick, it was seen by Mr. Carnegie 
 that this tube project might be revived and utilized to force 
 the purchase of at least his own holdings in the Carnegie 
 Company, and perhaps of the whole concern. So the plan was 
 gone over afresh, amplified and made definite, and then given 
 to the newspapers by the Carnegie press agent and by Carnegie 
 interviews. Thus it was published the length and breadth of 
 the country as the settled purpose of the steel company. Here 
 are two of these statements : the first as furnished by the Car- 
 negie press agent, and the second in a characteristic interview 
 with Andrew Carnegie. The Pickwickian humor of the latter 
 will not be lost on the reader who recalls the discussion of the 
 Carnegie managers in 1899 concerning the Conneaut project, 
 quoted in the eighteenth chapter of this book. 
 
 " It has been determined by the Carnegie Company, in order 
 to utilize this now profitless haul, to establish at the lake ter- 
 minal, where it already owns great docks and has ample facilities 
 for handling ore and for the lake shipment of the finished prod-
 
 3 6o THE BILLION-DOLLAR FINALE 
 
 uct, an extensive pipe and tube manufacturing plant, represent- 
 ing an investment of $12,000,000. The projected works will 
 stretch over a mile along the lake front, and will be the most 
 extensive and complete plant of the kind in existence. Electric 
 power will be mainly used for driving the machinery, and the 
 system of operation will be continuous, the ore being unloaded 
 from vessels at one end and worked through successive stages 
 of iron and steel-making in a direct line to the finished pipe 
 and tube at the other end."- World's Work. 
 
 " Immediately following the Carnegie Company announce- 
 ment of the location of a tube plant at Conneaut Harbor, Ohio, 
 rumors were set afloat throwing some doubt on the sincerity of 
 the company's intention to carry out the announced plans. In 
 the iron trade there was an attempt to find a reason for the loca- 
 tion of the plant at Conneaut rather than in the Pittsburg dis- 
 trict. Regarding the reasons for going outside of the Pittsburg 
 district Andrew Carnegie was quoted last week as follows : 'In 
 ^e first place I am bound to say that Conneaut was not con- 
 sidered until the Pennsylvania Railroad, without consulting, 
 do\ibled our export rates . . . which led our people to take up 
 the question : How can we escape from the grasp of this arbi- 
 trary railroad combination? A study of the subject convinced 
 every one that we could do so by taking to water. When I re- 
 turned from Europe it was to find all agreed that this was the 
 method of relief. . . . Our establishment at Conneaut will 
 benefit Pittsburg, because we shall give the Pittsburg railroads 
 an object lesson. A very small proportion of our freight will 
 go by rail from these works. We are already in the shipping 
 business, and have only to add half a dozen small steamers to 
 our fleet to ply to the important lake cities, distributing steel 
 and loading up with scrap, of which we shall use an enormous 
 quantity. ' . . . 
 
 Asked whether the proposed plant was supposed to be a 
 blow at the National Tube Co., Mr. Carnegie- replied that at 
 one time the original National Company purchased billets from 
 his company, but later decided to work its own blast furnaces 
 and make its own billets. Continuing he said : ' As I under- 
 stand the policy of the Carnegie Steel Co., it is to co-operate in 
 every way with its fellow manufacturers in the industrial world, 
 and not to push itself into any new field save in self-defence. 
 We did not leave the National Tube Co. They left us, which 
 they had a perfect right to do, of course. Now we are ready to 
 shake hands and co-operate with them in the most friendly
 
 CONVERTING THE FINANCIERS 
 
 'In the conversion of the heathen.' 
 
 spirit. We are better for them than a dozen small concerns, 
 conducted in a small, jealous way. We believe there is room 
 enough for the two concerns," 
 etc. Iron Trade Review, Janu- 
 ary i/th, 1901. 
 
 In the conversion of the 
 heathen, missionaries have 
 found it useful to describe 
 the condition of the 
 damned before presenting 
 a picture of the joys of the 
 blessed. It was on some 
 such principle that the 
 threat of industrial war was 
 thus made by the Carnegies 
 before the blessings of co- 
 operation and consolidation 
 were set out before the vision 
 of the alarmed financiers of the country. The panic produced 
 by the double threat of the Carnegies to build a rival tube works 
 and to enter into competition with the great Pennsylvania Rail- 
 road has been graphically described by a recent magazine writer : 
 
 " Either project as a threat would have been alarming. The 
 two together as imminent and assured accomplishments pro- 
 duced a panic. And a panic among millionaires, while hard to 
 produce is, when once under way, just as much of a panic as is 
 a panic among geese. They ran this way and that ; they hid 
 one behind another; they filled the newspapers with their 
 squawkings; they reproached, implored, accused each other. 
 At last they ran to their master Morgan. And he negotiated 
 with Carnegie." 
 
 But the negotiations came later. They were preceded by a 
 bankers' dinner, at which were preached the joys of industrial 
 peace. This famous dinner also grew out of a previous inci- 
 dent connected with Mr. Frick. 
 
 Somewhere about the time of the purchase of the Moore
 
 362 THE BILJJOX-DOLLAR FINALE 
 
 option, Mr. Frick invited a number of prominent bankers to 
 Pittsburg, to show them the armor-plate vault that had just 
 been built for the Union Trust Company. Incidentally they 
 were given an opportunity of seeing the extent of the iron and 
 steel works at Pittsburg. Up to that time the resources of the 
 Iron City were but imperfectly known in Wall Street. This 
 visit showed that it was the busiest place in the world, and the 
 centre of its greatest industry. Duly impressed, the bankers re- 
 turned to New York; and the courtesies they had received as 
 Mr. Prick's guests were now treated as an outstanding asset of 
 the Carnegie Steel Company. Through the influence of Mr. 
 Albert C. Case, credit agent of the Carnegie Company, and that 
 of Mr. Charles Stewart Smith, an intimate friend of Andrew 
 Carnegie, arrangements were made with a prominent banker of 
 New York, who had been among those entertained by Mr. 
 Frick, to give a return dinner, ostensibly in honor of Mr. 
 Schwab. This dinner was duly given ; and, as a spontaneous 
 outburst of enthusiasm for Mr. Frick's earlier protege, it has 
 been much written about and discussed. 
 
 Mr. Morgan attended the dinner, and listened with great 
 interest to Mr. Schwab's views on industrial combinations 
 " views apparently so large, so wise, and so interesting that Mr. 
 Morgan was strongly impressed by the speech and the speaker. 
 Then there began a series of interviews which eventually led 
 to the founding of the United States Steel Corporation, to the 
 realization of Mr. Carnegie's desire to retire from the control 
 of the business,"* and to the sale and absorption of the Carne- 
 gie Company. It was the most masterly piece of diplomacy in 
 the history of American industry, and formed a fitting climax 
 to Andrew Carnegie's romantic business career. 
 
 The further story of the merger has been told a hundred 
 times and need not be repeated here. The part of the Carne- 
 gies in it is indicated in the following letter to stockholders, 
 now first published : 
 
 * Prof. Henry Loomis Nelson.
 
 STORY OF THE MERGER 363 
 
 THE CARNEGIE COMPANY 
 
 Offices; Carnegie Building, 
 
 Pittsbnrg, Pa., qtli March, IQOI. 
 
 Personal and Confidential. 
 DEAR SIR: 
 
 To facilitate the exchange of the Stock of The Carnegie 
 Company for Stock of the United States Steel Corporation, the 
 undersigned, at the request of a majority of the Stockholders, 
 have agreed to act as a Committee, on behalf of their Fellow 
 Stockholders, to receive Certificates of Stock of The Carnegie 
 Company, and to make the exchange for shares of Preferred and 
 Common Stock of the new Company. 
 
 You are therefore requested, if you desire to exchange your 
 stock and to have this Committee act for you, to deliver the 
 Certificates of Stock of The Carnegie Company held by you, to 
 W. W. Blackburn, who will deliver to you the receipt of the 
 Committee therefor. Such Certificates must be endorsed in 
 blank (or may be accompanied by separate powers of attorney), 
 with the names of the undersigned inserted as attorneys in fact, 
 with power to them or any two of them to transfer the sait! 
 Shares upon the books of the Company; proper revenue stamps 
 to be attached. The receipt appended hereto will then be 
 signed. 
 
 The basis of exchange is as follows: 
 
 One share of the Carnegie Company stock (par value 
 $1,000) to receive of the United States Steel Corporation 
 Stock 15.3558 Shares of Seven Per Cent. Cumulative Pre- 
 ferred, par value $100 $1,535.58; 14.1061 Shares Common, 
 par value too $1,410.61. No scrip will be issued for frac- 
 tional Shares, but exchange will be arranged at the rate of $100 
 per Share for Preferred and $50 per Share for Common, viz. : 
 
 Where a depositor is entitled to less than one-half of one 
 Share of Preferred or Common Stock, he will receive cash for 
 same; and where entitled to more than one-half of one Share 
 of Preferred or Common Stock, he will be allotted and required 
 to pay for the fractional Share at the above rate. 
 
 A deposit of Stock with the Committee will constitute an 
 acceptance of the above terms by the depositor. 
 Yours respectfully, 
 
 C. M. SCHWAB, ) 
 
 L. C. PHIPPS, - Committee. 
 
 W. W. BLACKBURN, \
 
 364 THE BILLION-DOLLAR FIXALE. 
 
 Had all the stockholders been subject to these terms it 
 would have meant that the $160,000,000 of the Carnegie Com- 
 pany's stock would have been exchanged for the United States 
 Steel Company's stock as follows: 
 
 Seven per cent, cumulative preferred $240,569,280 
 
 Common stock 225,697,760 
 
 $466,267,040 
 Add $160,000,000 bonds exchanged for the same 
 
 amount of Carnegie bonds 160,000,000 
 
 Total $626,267,040 
 
 As a matter of fact, however, Andrew Carnegie, Mrs. Lucy 
 C. Carnegie, and George Lauder were paid entirely in United 
 States Steel Company bonds, at the rate of $1,500 per share. 
 Thus for 96,000 shares of stock in the Carnegie Company they 
 received $144,000,000 in bonds of the United States Steel Cor- 
 poration. The balance of the $304,000,000 bond issue of the 
 latter, or $ 1 60,000, ooo, was exchanged at par for the $160,000, - 
 ooo bond issue of the Carnegie Company. 
 
 For the balance of the stock of the Carnegie Company, i.e., 
 64,000 shares, was issued $98,277,120 in preferred stock and 
 $90,279,040 in the common stock of the United States Steel 
 Corporation. 
 
 At the time of purchase the bonds and the preferred stock 
 were considered worth par and the common stock 50; making 
 the total amount paid at that time $447,416,640. Since that 
 time the stocks have declined; but the enhancement in the 
 market value of the bonds has more than made up the differ- 
 ence. The present value of the securities issued for the Car- 
 negie properties, computing bonds at 114, preferred stock at 
 845^, and common stock at 35, would make a total of $461,- 
 201,830. Add to this the $22,000,000 dividend paid to Car- 
 negie stockholders the previous year in adjustment of values in 
 the consolidation of the coke and steel properties, and we reach 
 the total cash value of the business to which Kloman's little 
 forge had grown in forty years. 
 
 THE END.
 
 APPENDIX 
 
 THE E QJJ I T Y SUIT 
 
 Some extracts from the pleadings of Henry C. Frick 
 
 ON the 1 4th day of January, 1889, your orator was elected chairman 
 of Carnegie Brothers & Co., Limited, and continued to act as such chairman 
 until the new association of the Carnegie Steel Company, Limited, was 
 formed. He was then elected chairman of the latter, and continued to act 
 as such until December 5th, 1899. 
 
 On January i ith, 1895, with the assent of those interested and with a 
 view to enable your orator to perform duties which were believed to be of 
 more value to the firm than those then imposed upon said chairman, the 
 office of president was created. Upon said officer was placed the details 
 of the duties your orator had theretofore performed as chairman. 
 
 Your orator continued as chairman with general supervisory power 
 until December 5th, 1899. About that date Carnegie without reason, and 
 actuated by malevolent motives, demanded his resignation of said position. 
 Recognizing Carnegie's paramount influence as the holder of a majority 
 interest, and desiring to prevent the evil which might result from discord, 
 your orator acquiesced in the demand and gave his resignation. 
 
 As chairman of said companies your orator had participated largely in 
 and directed the business conducted by them and, until the time of his 
 enforced resignation, said business was conducted to a large extent under 
 his personal supervision, management, and direction. Carnegie lived in 
 New York City. He spent much of his time abroad, remaining there con- 
 tinually, at one time, for over eighteen months. Of course he was con- 
 sulted about important matters, but he rarely participated in the current 
 management of the business. 
 
 For various reasons, none just, not necessary now to be stated, but 
 which will appear hereafter in the taking of testimony, Carnegie 
 has recently conceived a personal animosity towards your orator. 
 This partly arose from the failure of your orator, in connection with 
 others, to avail of an option given by Carnegie in consideration of the 
 sum of one million, one hundred and seventy thousand dollars ($1,170,000), 
 to Carnegie paid, and now retained by him, as a forfeit to purchase his 
 (Carnegie's) interest in said Sceel Company, Limited, for the sum of about 
 one hundred and fifty-seven million, nine hundred and fifty thousand dollars 
 (Si 57,950,000), which sum Carnegie insisted should be so preferred and 
 secured that he would virtually have a first mortgage on all the partnership 
 assets and thus gain a preference over all his partners. 
 
 As has been heretofore said, on the 4th day of December, 1899, with- 
 out good reason, and from malevolent motives towards me, Carnegie de- 
 manded the resignation by your orator of his office of chairman of said 
 company. This resignation, in the interest of harmony, was tendered. 
 Since that time Carnegie has secured control of the whole association and 
 of its affairs, and has compelled the co-partners, other than Henry Phipps, 
 Jr., F. T. F. Lovejoy, and Henry M. Curry, and perhaps others, who refused 
 to carry out his orders and desires, to pass such resolutions and do such 
 acts as he dictated, without regard to their conformity to their real wishes, 
 
 365
 
 3 66 APPRXDIX 
 
 or to their judgment, as to the true policy of the association. Many of the 
 partners were unable or unwilling to incur his animosity, lest he might at- 
 tempt to forfeit their interests in the association. Some of them were prac- 
 tically unable to resist his will because of their large indebtedness thereto. 
 
 In order that he might injure your orator, whilst benefiting himself, 
 Carnegie conceived a scheme to forfeit the interest of your orator in the 
 association, worth upwards of fifteen million dollars ($15,000,000), in such 
 way as would not oblige him to pay therefor one-half of its real value and 
 would enable him to make payment therefor in small instalments at very 
 long intervals of time. 
 
 As part of this fraudulent scheme, Carnegie, who had rarely attended 
 the meetings of the Board of Managers of the Steel Company, Limited, 
 theretofore held, presented himself at a meeting of the said board, held on 
 the 8th day of January, 1900, after the resignation by your orator of his 
 chairmanship, and when he was not present. Carnegie then presented to 
 said Board of Managers resolutions by him previously prepared, which he 
 caused to be adopted. Many of the statements in said resolutions were 
 false. The whole of the resolutions were misleading. In them he referred 
 to a certain so-called iron-clad agreement. Carnegie followed up his action 
 in this respect by obliging the Board of Managers to instruct the secretary 
 to receive signatures to this so-called iron-clad agreement, which, for the 
 first time, he called a supplemental iron-clad agreement, of July ist, 1892. 
 No such agreement had ever been executed by Carnegie. Many other 
 members of the firm Had never executed the same. This so-called agree- 
 ment was inoperative and void. Carnegie knew that it was void and in- 
 operative. He knew that neither he nor the Carnegie Steel Company had 
 any power to compel any person to sell his interest in the firm in pursuance 
 thereof; yet, knowing this, without your orator's knowledge, secretly, after 
 said resolutions had been passed, he signed for the first time said so-called 
 iron-clad agreement of July ist, 1892. At the same time, or shortly after, 
 he caused, directly or indirectly, other persons to sign the same, with a 
 fraudulent intent thereby, and without your orator's knowledge or consent, 
 to make a contract for him under which he, Carnegie, could seize your 
 orator's interest in said firm. All these acts he carefully concealed from 
 your orator, his partner. Subsequently, in person, Carnegie threatened 
 your orator when he called upon him, that unless he would do what he, 
 Carnegie, desired, he would deprive your orator of his interest in the firm. 
 In pursuance of his fraudulent intent and in furtherance of his said scheme 
 of fraud, Carnegie caused to be served on your orator on the I5th day of 
 January, 1900, a notice purporting to be given under and in pursuance of 
 said so-called iron-clad agreement. In this demand was made, in the name 
 of Carnegie and in that of other persons who had been forced by him to 
 sign the same, that your orator should transfer his interest in said Carnegie 
 Steel Company, Limited. Having failed to secure this transfer, Carnegie 
 persuaded Schwab, one of the defendants, who was acting as president of 
 said association, to transfer, on the first day of February, 1900, on the 
 books of the company, your orator's interest in said Steel Company, Lim- 
 ited, as if he were entitled to make said transfer as attorney in fact of your 
 orator. After Schwab had made this pretended transfer, Carnegie pre- 
 tended, now pretends, and many of the partners under his compulsion 
 pretend, that the Carnegie Steel Company, Limited, owns all your orator's 
 interest in said firm. Carnegie, being the owner of 58^ per centum of the 
 entire capital thereof, is now pretending to be the owner of over 60 per cen- 
 tum of your orator's said interest, thus pretended to have been acquired. 
 Carnegie further pretends that he need not and will not pay for your
 
 THE EQUITY SUIT 367 
 
 orator's interest what it is fairly worth, but that he can only be compelled 
 to pay a price which will be determined by himself, and by the partners he 
 controls. This price, he contends, can only be demanded by your orator 
 in such small instalment during a term of years of such duration as will, 
 probably, not only enable the company to entirely pay for your orator's 
 interests by using the share of the profits applicable to them, but have a 
 surplus left to the company. Thus, it is part of Carnegie's scheme not 
 only to seize your orator's interest, but to make it pay for itself out of the 
 profits, and thereafter leave Carnegie, in large part, the owner of said 
 interests, with a large surplus of money besides. Though Carnegie pre- 
 tends that he had thus secured a large part of your orator's interest in a 
 way which will inure to his benefit, he denies all individual liability what- 
 ever for its payment, and claims that the only party who will be obliged to 
 pay the price he will determine to give will be the Carnegie Steel Company, 
 Limited, which he will use for that purpose. 
 
 The exact manner in which Carnegie will seek to depreciate the value 
 to be paid for your orator's interest cannot be stated by your orator in de- 
 tail with certainty; but he believes and therefore avers that although 
 Carnegie's attention and that of the defendants have been called Dy him to 
 the fact that the values of the company assets on its books were wholly in- 
 adequate, and although he and the defendants have been requested to 
 make said values conform with the truth, he, the said Carnegie, will use 
 figures put upon the books years ago, which are obsolete, and are not by 
 any of the defendants pretended to be correct ; will fail to put any valuation 
 upon assets of immense value ; and will resort to other illegal and unfair 
 devices. 
 
 Your orator shows to your Honors that this attempt of Carnegie to 
 expel him from the firm and seize his interest therein at but a mere fraction 
 of its real value, is not made by him in good faith and for the best interests 
 of the Carnegie Steel Company, Limited. It is not actuated by honorable 
 motives on his part, nor for the future good of the firm, but is a determina- 
 tion to punish your orator, principally, because of the failure of the scheme 
 by which Carnegie was to realize over $157,000,000 for his interest, and, 
 also, in part, to make gain for himself by seizing your orator's interest at 
 very far below its real and fair value. 
 
 In order that the business of the firm of the Carnegie Steel Company, 
 Limited, might not be jeopardized by inharmonious relations between the 
 partners and that its enormous business might be carried on by united and 
 harmonious action, your orator was willing, upon ascertaining the animosity 
 of Carnegie towards himself, and his determination to drive him from the 
 firm, to dispose of his interest therein at a fair value. This tact was stated 
 by your orator to Carnegie when the latter called, in January, 1900, at his 
 office, in an endeavor to coerce the making of a sale by your orator at a 
 price below what was fair. An offer was then made by your orator to 
 Carnegie that in case a fair price could not be agreed upon for his interest, 
 which the latter insisted upon securing, that your orator would agree to 
 refer to the arbitration of three disinterested men, the determination and 
 fixing of a fair value. This offer Carnegie refused, doubtless because he 
 hoped to acquire such interest at much less than the fair value thereof by 
 means of his fraudulent scheme hereinbefore set out, which scheme he was 
 then, though without any intimation of that fact to your orator, secretly 
 perfecting and determined to carry into effect. 
 
 Your orator still is willing, in order that harmony may be preserved 
 and that the great interests involved may not be subjected to jeopardy, to 
 sell his interest in the Carnegie Steel Company, Limited, at a fair value, to
 
 3 68 APPENDIX 
 
 be ascertained by three disinterested business men. He now tenders his 
 willingness so to do. 
 
 Notwithstanding the fraudulent actions of Carnegie, your orator also is 
 willing, in order that the enormous business interests of the Carnegie Steel 
 Company, Limited, may be protected, without injury to any of its partners, 
 to continue the business of the said firm in accordance with the true spirit 
 of the articles of agreement of July 1st, 1892, creating the same. 
 
 If, as your orator is advised and believes, the said articles created a 
 general, and not a limited, partnership, he is willing, and now tenders such 
 willingness, to have such action taken by the firm and by the partners 
 thereof as will make the said firm strictly a limited partnership, as origi- 
 nally intended. Your orator is further willing, and now tenders such 
 willingness, to continue the Carnegie Steel Company, Limited, as a general 
 partnership, if he is allowed, as one of the partners, to participate in the 
 management thereof, claiming no other or farther right than that of a 
 general partner in a general partnership. 
 
 Your orator is not willing, however, to continue the general partnership 
 under the sole control of Carnegie, without being allowed to have any par- 
 ticipation therein Carnegie is so engaged in other occupations and diver- 
 sions that, were he otherwise able so to do, he cannot properly manage 
 and carry on said business. Your orator believes and avers that the 
 financial prosperity of the firm will be impaired by the exclusive manage- 
 ment and control of the same by Carnegie. 
 
 All of the defendants excepting Henry Phipps, F. T. F. Lovejoy and 
 Henry M. Curry, and possibly others, at the instance of Carnegie, now 
 claim that your orator has no interest in the Carnegie Steel Company. 
 Limited, and that his only right is to demand from said company, at long 
 postponed periods, such amount in compensation as Carnegie shall be 
 willing to concede him. 
 
 Your orator thus by the fraudulent acts of Carnegie and the acqui- 
 escence therein of the defendants, other than those above named has been 
 ejected from the Carnegie Steel Company, Limited, and has been and is 
 now denied any participation in its business. Your orator's interest therein 
 has been taken possession of by the defendants, and they at the instance and 
 under the domination of Carnegie, are now carrying on the said business, 
 alleging that they will continue to carry it on as if your orator had no in- 
 terest therein. 
 
 Your orator alleges that the whole effort which has been made, and 
 which the defendants are now seeking to make effectual, is in pursuance of 
 said fraudulent scheme of Carnegie to practically seize your orator's interest 
 in said firm. This attempt is being made, although Carnegie knows, and 
 all the defendants know, that the prosperity of the firm, in considerable 
 part, is the result of your orator's continuous and close personal manage- 
 ment of the same, from the time of its organization. 
 
 Your orator denies that there is or was when said notice was given any 
 contract under which the defendants have acquired, or lawfully can acquire, 
 his interest in said firm. 
 
 He avers that the attempt to acquire the same and said pretended 
 transfer thereof by said Schwab, are illegal and void. Schwab was not the 
 attorney in fact of your orator to make said transfer nor did he have any 
 lawful authority so to do. 
 
 Wherefore your orator needs equitable relief, and prays as follows: 
 
 First. A decree that the pretended transfer of your orator's interests 
 in the Carnegie Steel Company, Limited, was and is null and void. . , . 
 
 Second. An injunction, now special, hereafter to be made final, re-
 
 THE EQUITY SUIT 369 
 
 straining the defendants from any interference with your orator's interest 
 in said Carnegie Steel Company, Limited, and from excluding him from 
 a participation in the care and management of the assets and business. 
 
 Third. An injunction, special until hearing, and perpetual thereafter, 
 enjoining and restraining the defendants from conducting the business 
 operations of the firm called the Carnegie Steel Company, Limited, without 
 permitting your orator to participate therein. 
 
 Fourth. An injunction, special until hearing, and perpetual thereafter, 
 enjoining and restraining the defendants from tranferring to the Carnegie 
 Steel Company, Limited, or to any person or persons, or corporation, your 
 orator's interest in the said Carnegie Steel Company, Limited. 
 
 Fifth. A decree ordering the defendants to cancel upon the books of 
 the said firm, any assignment or transfer heretofore made, or pretended to 
 be made, to said association, of your orator's interest in said firm, and all fur- 
 ther assignments, if any, to any other persons, of your orator's said interests. 
 Sixth. A decree ordering the defendants to join with your orator in 
 conducting and managing the affairs and business and properties of the 
 Carnegie Steel Company, Limited. 
 
 Seventh. A decree ordering the defendants to cancel and erase all 
 entries upon the books of the firm of the Carnegie Steel Company, Limited, 
 of insufficient, unfair, and improper valuations of its assets and of your 
 orator's interest therein, and to cause the said books so to be kept as to 
 fairly and fully show the real value of the Carnegie Steel Company, Limited, 
 as a going concern and your orator's interest therein. 
 
 Eighth. In case the defendants shall refuse the offers hereinbefore 
 by your orator made, . . . that your Honorable Court will thereupon 
 allow your orator to declare the said firm of the Carnegie Steel Company, 
 Limited, dissolved, and that you will thereupon appoint a receiver to take 
 charge of all the business and assets of the said firm, permitting said 
 receiver to fulfil unperformed contracts and to do whatever shall be 
 necessary in and about the proper liquidation of its affairs, and that, after the 
 conversion of the entire assets of the company into money and the payment 
 of the debts of the said company, your Honorable Court will then distribute 
 the balance thereof among the partners in proportion to their interests. 
 
 Ninth. That an account be taken between Carnegie and your orator, 
 whereby Carnegie shall be charged with all the losses, expenses, and dam- 
 age he has caused your orator by his illegal and fraudulent conduct 
 hereinbefore stated; and that if Carnegie persists in his said fraudulent 
 scheme and refuses the offers hereinbefore made, and thus causes the 
 actual dissolution of the firm, all losses incurred by your orator by reason 
 of the said dissolution and forced winding up of the firm shall be charged 
 against him, and that he shall be decreed to make good and pay to your 
 orator the difference between what his interest was fairly worth on or 
 about February ist, 1900, and the amount he shall receive through the 
 decree of this court in final liquidation and settlement of the said firm. 
 
 Tenth. That all entries Carnegie or any other person has caused to 
 be made on the books of the Carnegie Steel Company, Limited, in pursu- 
 ance of said fraudulent scheme of said Carnegie, shall be erased and 
 cancelled under the decree of this Honorable Court. 
 Eleventh. General relief. 
 
 JOHN G. JOHNSON, 
 D. T. WATSON, 
 WILLIS F. McCooK, 
 
 Solicitors for Plaintiff.
 
 UNIVERSITY OF CALIFORNIA LIBRARY 
 
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