Carnegie (14 page)

In his mind Carnegie was formulating a new dictum: ‘Put all good eggs in one basket and then watch the basket.’
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He would later explain to enquirers that this meant that no man in manufacturing in particular achieved ‘pre-eminence in money-making’ by being ‘interested in many concerns’. Out of this he believed that for the future ‘steel was king’ so with careful planning he extended his already established steel interests into his proverbial basket. His visit to the Bessemer works at Sheffield in 1872 put paid to any doubts he might have had that steel was the future.

On 5 November 1872 the steel firm of Carnegie, McCandless & Co. was founded, with Tom Carnegie, Harry Phipps, Andrew Kloman and a few others as partners. Carnegie held $250,000 of the $700,000 company equity. Their mill was established at Braddock’s Field, some 12 miles outside Pittsburgh, to a design by steel plant genius Alexander Holley.

Problems arose in 1873 when financial panic gave birth to the United States’ first economic depression which would last until 1879. Financial trouble in Europe made things worse as foreign investors pulled out of American securities. Pressure was put on all parties involved as banks failed and money became tight. One financial casualty of the depression was Thomas A. Scott, Carnegie’s old mentor. He made several requests for Carnegie to help him out from his reserves, and even asked J. Edgar Thomson to speak to Carnegie on his behalf. But Carnegie declined to assist, his excuse being that there were too many people already dependent on him for financial protection, from his family to his steel partners. This refusal, said Carnegie, ‘gave more pain than all the financial trials to which I had been subjected up to that time’.
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Many believed – rightly – that Carnegie had betrayed his old friend, who had given him vital support when he was starting out.

As the financial problems took their toll on both Scott (who died in 1881) and Thomson (who died in 1874), Carnegie began to suffer from nervous debilitation, but he never allowed circumstances to alter his focus on his targets. Employment in New York reached 25 per cent and soup kitchens flourished. One by one the wolves of Wall Street were growing leaner. Another blow fell when his steel partner Andrew Kloman overstretched himself with investments which he kept secret from his partners. Carnegie made sure that Kloman was declared bankrupt, later buying out Kloman’s shares. Nevertheless Carnegie also suffered financial difficulties as certain of his bonds failed, particularly the Davenport & St Paul Railroad stock, which left him with lawsuits to settle. These would rumble on for years, but in 1874 Carnegie, McCandless & Co. was dissolved and reorganised as the Edgar Thomson Steel Co.

New management structures were effected, with Carnegie interfering at every level to secure his own candidates in prime positions. Certainly his most successful appointment was Captain William Jones, late of the Cambria iron works in Johnstown, as general superintendent, ably backed by general manager William P. Shinn.
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On 1 September 1875 the first steel rolled off the line at the Edgar Thomson Steel Co., where Holley’s genius had produced the largest steel mill in the world with every aspect of modern technology reflected. It was a tough job to win orders in the depression, and Carnegie worked hard to raise capital, to which end a trip to London in 1874 was helpful.

Carnegie enjoyed consorting with America’s steel magnates like Samuel Felton at Pennsylvania Steel and Joseph Wharton of Bethlehem Steel. Several of these steel ‘aristocrats’ looked upon Carnegie as a jumped-up jackanapes, especially when he bombastically boasted that the Edgar Thomson Steel Co. would outshine them all. Back in 1866 the ‘aristocrats’ had formed the Pennsylvania Steel Association, later renamed the Bessemer Steel Association. Their intent was to purchase, administer and allocate for large fees steel patents in America. By 1877 Carnegie had enough influence to become one of their number, although he grumbled at the royalties he had to pay for the privilege.

Weathering market, employee, partner and financial difficulties, by 1878 Carnegie had seen the Edgar Thomson Steel Co. grow to a capital stock of $1,250,000, Carnegie’s $741,000-worth making him the majority partner.
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As many of the wolves of Wall Street and others were being ruined by the depression, Carnegie became ‘the richest man of his time’.
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On 12 July 1877 Carnegie received ‘the greatest honour’ of his life when he was accorded the freedom of Dunfermline. He glowed with pride that his name was thus associated with Sir Walter Scott, whom his parents remembered sketching in the grounds of Dunfermline Abbey during one of his visits to Fife.
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In all, Carnegie was to beat William Ewart Gladstone’s record of fourteen municipal freedoms.
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And once again Carnegie’s feet itched to travel.

It is therefore only a matter of time when the Chinese will drive every other race to the wall. No race can possibly stand against them . . .

Andrew Carnegie, December 1878

D
uring mid-October 1878 Carnegie left the management of the Edgar Thomson Steel Co. in the hands – he thought capable – of William P. Shinn. He was now bound for the greatest tour of his life, this time to the Orient. Settling his mother with brother Tom at Pittsburgh, Carnegie packed his bags – including a 13-volume pigskin-bound
Works of William Shakespeare
a gift from his mother to while away the long hours at sea – and met up with John ‘Vandy’ Vandervort on the first leg of the journey to San Francisco. This was the realisation of an undertaking they had made on their Grand Tour, while at the foot of Mount Vesuvius, that they would tour ‘around the Ball’. This was no modern package tour with each booking made in advance; Carnegie was entering lands of which he had little or no knowledge, to meet people whose languages and writings were a mystery to him. But it would be the commencement of a new epoch of his life away from the luxuries of his New York habitat and the fussings of his mother.

They set sail on 24 October 1878 aboard the SS
Belgic
and on 15 November they reached Japan’s main island of Honshu. For Carnegie it was a complete culture shock. They based themselves in Tokyo, which had been the capital of Japan only since 1868. Here they were introduced to the bustling metropolis, the imperial capital of Emperor Meiji (r. 1867–1912) who had seized the reins of government from the Shoguns (generalissimos) who had ruled Japan for centuries. Carnegie was able to observe how the emperor was beginning to raise the status of his nation from an obscure, insular and little-known country to a first-class power. Even so he observed much that had not changed from Japan’s medieval past, from the
tera
(temples) to the
chamise
(tea-houses), while the modern warships at Yokohama – part of Emperor Meiji’s developing fleet – depressed Carnegie as a symbol of Japan’s developing militarism.

Traditional dress was being replaced by Western costume, but as the
jinrikshas
(man-powered carriages) weaved in and out of the traffic Carnegie saw their women passengers sporting the fashions, hairstyles and make-up of an ancient era – and he was not impressed: ‘How women can be induced to make such disgusting frights of themselves I cannot conceive.’
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Despite the great changes being wrought by Emperor Meiji, Carnegie was not enamoured of Japanese culture: ‘the odour of the toyshop pervades in everything, even their temples’.
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From Japan Carnegie and Vandervort sailed on 27 November 1878 to Shanghai, via Nagasaki. The port of Nagasaki was a complete contrast to Tokyo. Here Westerners had set up shop from the days when the first Portuguese merchant ships arrived in 1571, to spew out guns, goods and Christianity. The steep streets, the vistas, the gardens impressed Carnegie, who caught the magic of the place that would inspire Giacomo Puccini to site his opera
Madame Butterfly
(1904) in the city.

Setting up base at the Astor House in the American Settlement at the treaty port of Shanghai, in the fertile delta of the Chang Jiang River, Carnegie and Vandervort obtained their first view of China. They were to spend nine days in the port, before taking a mail steamer to the British Crown Colony of Hong Kong for Christmas Day. Carnegie voiced his opinion of China as the year came to a close. For him China outshone Japan, for the Dragon Empire had forged a depth of civilisation that impressed him and he liked the fact that it was the scholars who held pride of place in society. He believed that the rapid Westernisation of Japanese society would lead it to disaster, but not so for the Chinese:

Here in Asia the survival of the fittest is being fought out. . . . In this struggle we have no hesitation in backing the Heathen Chinese against the field. Permanent occupation by any western race is of course out of the question. An Englishman would inevitably cease to be an Englishman in a few, a very few, generations, and it is therefore only a question of time when the Chinese will drive every other race to the wall. No race can possibly stand against them anywhere in the East.
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From Hong Kong they travelled across the South China Sea to Saigon (modern Ho Chi Minh City) and thence to Singapore, part of the British colony of the Straits Settlements, which Sir Stamford Raffles of the British East India Company had leased from the Sultan of Johor. Apart from the heat making their bulky clothes uncomfortable, Carnegie was unimpressed by what he saw in this part of South East Asia.

An English mail steamer from Singapore on 14 January 1879 carried them across the Indian Ocean to Ceylon (Sri Lanka), a British possession since 1796. Coffee plantations had been widely devastated by disease in the 1870s and Ceylon tea was now the great export commodity. As Carnegie sipped the flavoured brew, which had been a luxury in his Dunfermline childhood, he reflected more on the Buddhism he had first encountered in Japan and which had marched alongside the national religion of Shintoism. In Ceylon too, he absorbed the concept of making happy discoveries by accident – serendipity. The Arab traders had called Ceylon ‘Serendip’, a name which English author Horace Walpole adapted for the adjective in 1754.

A three-day journey by mail steamer along the Coromandel coast brought them to Madras, once a centre for the British East India Company as Fort George, with the oldest town charter in India (1688) and the oldest English church (1678). From here they sailed across the Bay of Bengal to the port of Calcutta. Here, in the capital city of West Bengal, they saw British India in all its magnificence, now two years into its role as the imperial capital after the proclamation of Queen Victoria as Empress of India. Trade in cotton, silks, indigo and opium interested Carnegie, though he found India’s public bathing and open-air cremation of the dead disturbing.

A train journey to Benares (Varanasi), the ancient and holy Hindu city, on 6 February introduced the travellers to the real culture of the Ganges, with its bathing ghats and cremations, and the mazes of narrow city streets and hundreds of temples. They moved on to the Mogul city of Agra, with its Red Fort and most famous neighbour the white marble Taj Mahal, the mausoleum of 1630–48 built to honour and inter Mumtaz-i-Mahal, wife of Shah Jahan, the great patron of Indian engineering and architecture. Up to this point Carnegie’s favourite monument was that to Sir Walter Scott in Princes Street Gardens, Edinburgh, but the Taj Mahal now pushed it into second place. At last he caught the great spirit of the country, and although he considered that India could never outstrip China in cultural or economic potential, he believed that the development of Christianity in India would be to its great advantage, with one directive god supplanting a whole pantheon. He felt too, that India would ultimately rebel against her imperial rulers, although he had glowing words to say about the British administration:

The more I see of the thoroughness of the English Government in the East – its attention to the minutest details, the exceptional ability of its officials as evinced in the excellence of the courts, jails, hospitals, dispensaries, schools, roads, railways, canals, etc, – the more I am amazed.
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Ten days after arriving at Agra they journeyed on to Delhi on the Yumuna River, not yet proclaimed the capital of India by the British (this did not take place until 1911). Thence they went to Bombay (Mumbai), the Gateway to India since the opening of the Suez Canal in 1869. Carnegie described Bombay as the ‘Rome of India’, and settled back in its relaxed atmosphere to catch up with his correspondence. It was not all good news. He opened a letter from W.P. Shinn dated 1 December 1878 informing him of the death of David McCandless, chairman of the Edgar Thomson Steel Company. Carnegie was deeply upset. His friendship with the McCandless family had dated from his first days at Allegheny; indeed, his father William, his aunt Annie Aitken and David McCandless had together founded the first Swedenborgian church and McCandless had opened many doors for Carnegie. He grieved that he had not been able to say a final goodbye to his old friend. On 22 February 1879 Carnegie wrote to William P. Shinn one of the most heartfelt letters that he ever composed:

It does seem too hard to bear, but we must bite the lip & go forward I suppose assuming indifference – but I am sure none of us can ever efface from our memories the images of our dear, generous, gentle & unselfish friend – To the day I die 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 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.
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