What was Andrew Carnegie’s net worth?
Andrew Carnegie was a Scottish-American industrialist who expanded the American steel industry in the late 19th century. He had a peak net worth of $310 billion, making him the 4th richest human of all time. Carnegie donated over 90% of his fortune to various foundations, charities, and organizations before his death.
Carnegie is credited with implementing vertical integration of steel production and mass producing steel. He sold his company, Carnegie Steel Company, to J.P. Morgan for $303 million, which is equivalent to roughly $7 billion today. He devoted the rest of his life to philanthropy, with a special emphasis on local libraries, world peace, education, and scientific research.
Before his death, Carnegie gave away more than $350 million of his personal fortune. His last $30,000,000 was also given away to foundations, charities, and pensioners.
Early Life and Career
Andrew Carnegie was born on November 25th, 1835 in Dunfermline, Scotland to parents Margaret and William Carnegie. His upbringing was extremely modest, with the family living in a two-room cottage where the entire first floor was his father’s workroom. After struggling to make ends meet in Scotland, the family borrowed money and moved to Allegheny, Pennsylvania in 1848.
Once in the United States, Carnegie began working as a bobbin boy in a cotton mill and later became a telegraph messenger boy. His work ethic was quickly noticed and he eventually became the superintendent of the Western Division at the Pennsylvania Railroad Company, where he made many connections that would be helpful in his future endeavors.
At 21 years old, Carnegie received his first $10 dividend check from his business interests, which he described as a feeling of “Eureka! Here’s the goose that lays the Golden eggs!” Dividend checks and interest payments on bonds would eventually make Carnegie a millionaire before he was 40.
Early Business Ventures
During the Civil War, Carnegie received a deferment from the draft due to his work for the Pennsylvania Railroad. He eventually paid an immigrant to serve in his place. After the war, Carnegie continued to develop his skills as a manager and investor. He often found lucrative business opportunities due to his reputation. Carnegie also used less-than-ethical practices, such as insider trading, to maximize profits. In one example, he established a telegraph company and sold it for a 3x return before any actual work was done. By the early 1870s, Carnegie’s major interests were in the iron and steel industries, which required him to travel to Europe selling bonds and deal with supply shortages.
Carnegie’s Impact on the Steel Industry
Andrew Carnegie’s interest in the railroad industry shifted to ironworks and steel, which led to his fortune. His impact on the steel industry helped accelerate the growth of U.S. steel to exceed that of the U.K.
Two main factors contributed to this growth: Carnegie’s decision to adopt the Bessemer process, resulting in a drop in steel prices, and vertical integration of the steel industry. Carnegie worked to establish control over the suppliers of all the raw materials needed to produce steel, purchasing rival companies to then launch the Carnegie Steel Company.
Carnegie Sells Steel Company to J.P. Morgan
In the early 1900s, Charles M. Schwab negotiated the sale of Carnegie Steel to J.P. Morgan for $303 million. Carnegie’s share of the profit was over $225 million. The resulting company, called the United States Steel Corporation, was run by Schwab. The payment was made in physical bonds that paid 5% annual interest over 50 years. The total cost of the acquisition eventually grew to $480 million with interest. After cashing out, Carnegie transferred $5 million to fully-fund his steel workers’ pension.
Andrew Carnegie’s Philanthropy and Writing
Andrew Carnegie was not only a successful businessman, but he was also devoted to writing and philanthropy. He donated money towards the establishment of the Dunfermline Carnegie Library in Scotland and helped establish the Carnegie Laboratory at NYU. He also regularly contributed to magazines like “The Nineteenth Century” and “North American Review.”
Carnegie published several books, including “Triumphant Democracy” and “Wealth.” He wrote extensively about the American system of government and his philosophy regarding the duties of the wealthy in the distribution of their wealth.
Upon retirement, Carnegie became a full-time philanthropist. He helped fund and build over 3,000 libraries, and he invested heavily in universities, research centers, and education organizations in the U.S. and abroad. He also supported Booker T. Washington in his efforts to improve education for African-Americans and helped create the National Negro Business League.
Carnegie was interested in music and personally funded the construction of Carnegie Hall in New York City, as well as the construction of over 7,000 church organs around the world.
Marriage and Death
At the age of 51, Andrew Carnegie married Louise Whitfield, who was 30 at the time. The couple tied the knot in New York City and had a daughter named Margaret ten years later.
Unfortunately, Carnegie passed away in 1919 due to bronchial pneumonia while in Massachusetts.
Andrew Carnegie’s Legacy
Andrew Carnegie’s philanthropic spirit lives on through the many foundations, organizations, universities, and charities that he founded or made significant donations to. He had already given away over $350 million dollars during his lifetime, and his remaining estate was donated upon his death.
Some of Carnegie’s most notable legacies include Carnegie Mellon University, originally founded as the Carnegie Technical Schools, as well as the Carnegie Corporation of New York, The Carnegie Foundation for the Advancement of Teaching, and the Carnegie Endowment for International Peace.
Carnegie’s impact can also be seen in the many streets, towns, and awards named in his honor, including the Carnegie Medal, a UK children’s literary award, the towns of Carnegie, Oklahoma and Carnegie, Pennsylvania, and Carnegie Hall in New York City.
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