Carnegie (27 page)

Meanwhile Carnegie and Louise were involved in a new housing project. Their residence at West 51st Street was now inadequate. Through a broker, and with careful timing to give him maximum advantage, Carnegie bought options on pieces of land at 5th Avenue, at 90th and 91st Streets. Here he constructed a Scottish-Georgian mansion to the designs of architects Babb, Cook and Willard for $1.5 million. It was full of what might be called Carnegie embellishments – an Aeolian organ, a his-and-hers gymnasium, an Otis lift (the first private residence to install one), oak panelling, sixty-four rooms on six levels, an extensive secure garden (the Carnegies were targets for peeping toms and the deranged) and a study-library.
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The address was logged as No. 2, East 91st Street, New York, and very soon it ‘became one of the most famous addresses in America’.
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During late April 1899 the Carnegies left New York for Britain for a sojourn in London and southern England, and then they were off to Skibo. By this time the estate tenants and workers were fully conversant with the identities of their new laird and his lady and gave them a rousing welcome. After the oldest tenant, a nonagenarian, offered a welcoming address at Skibo’s gates, Carnegie turned and pointed to his wife, saying: ‘Here is an American who loves Scotland.’ Then he pointed to himself and said: ‘And here is a Scotchman [
sic
] who loves America.’ Finally he pointed to little Margaret: ‘And here is a little Scottish-American who is born of both and will love both; she has come to enter the fairyland of childhood among you.’
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Despite his Americanisation Carnegie could still offer a touch of Victorian sentimentality when he wished.

From the early days at Skibo Carnegie developed a special rapport with his staff and tenants and treated them with generosity. Not for him the traditional Scottish laird’s patriarchal spirit; he was more the beneficent employer. Every time the Carnegies returned to Skibo after significant jaunts away they would visit each tenant’s cottage, and would say goodbye to everyone before every departure. After all, Queen Victoria did the same at Balmoral. On such occasions each tenant’s child would be given a golden sovereign (since 1817 this had represented a golden £ in British currency).
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Although not religious, Carnegie also appeared at the local church on the first and last Sundays of residence at Skibo and recognised the ‘Presbyterian Sunday’ of only necessary husbandry and estate routine. From time to time family, friends and staff would gather for Sunday evening prayers at Skibo with Carnegie supervising the proceedings and choice of hymns; every one of the latter was a Carnegie favourite often introduced by a soliloquy from him on its history and meaning. Highlights of any Carnegie Skibo residence were the ‘fêtes’, with a prominent one being held near or on 4 July.

By now work at Skibo was so advanced that the cornerstone for the new south elevation was ready for the official laying. At Carnegie’s behest 2-year-old Margaret did the honours, giving the traditional tap with a silver trowel. The cornerstone inscription reads:

FOUNDATION STONE OF THE NEW FART OF SKIBO CASTLE
BUILT BY ANDREW AND LOUISE W. CARNEGIE
LAID BY MARGARET CARNEGIE
23
JUNE
1899

As the months passed the guest-book at Skibo was steadily filled with signatures representing the good and the great from both sides of the Atlantic. Rudyard Kipling signed his name, as did prime ministers like H.H. Asquith, together with a whole host of bishops, diplomats, scientists and musicians. Many prominent Liberals visited Skibo; since the resignation of Conservative Prime Minister A.J. Balfour, the Liberals had come to power and would retain it for the rest of Carnegie’s life. They were now in charge of the glittering prizes of office; ever the opportunist, Carnegie made sure that he was on nodding terms at least with those who held the reins of government.

Among the guests were particular favourites whom Andrew and Louise Carnegie referred to as ‘Old Shoes’: ‘They came when they chose, stayed as long as they wished, went when they pleased and did precisely as they liked. Year after year they occupied the same rooms, which in time seemed to take on the aura of their presence.’
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Such folk included Uncle George Lauder (‘Dean of the Family Old Shoes’) and assorted relations from Dunfermline, a few ‘locals’ like the Revd Robert L. Ritchie, the Gaelic-speaking minister at Bonar Bridge, and a clutch of peers from Sir Henry Hartley Fowler, Viscount Wolverhampton (a Liberal cabinet minister) to the poet and antiquary James Carnegie, 9th Earl of Southesk, all under the ‘Old Shoe in Chief’ John Morley.

Two of the castle’s first guests were Henry Clay Frick and Henry Phipps, bearing a request from the nameless financiers for an extension of the 90-day option on Carnegie Steel. Carnegie said no, and pocketed his share of the option deposit when the option expiry date passed. The deposit almost covered what he had spent to date on Skibo. Later Carnegie would boast that his Scots home was ‘just a nice little present from Frick’.
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Although often lampooned in the press as a truculent, greedy Highland poseur with his hands in the pockets of the working class, with kilt and glengarry, and dressed in a mixture of tartan and stars and stripes, only once did Carnegie appear in (borrowed) Highland dress. Usually he greeted his guests, golfed, fished, yachted or walked his acres in ‘a light grey Norfolk jacket and knickerbockers . . . with a corresponding peaked cap’.
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Carnegie was easy to lampoon as his Skibo routine was as predictable as Queen Victoria’s ‘Balmorality’. Like the monarch, he began his day with a piper to waken him, and resounding organ music to carry him to breakfast. While his guests took to the hills to slaughter the wildlife, Carnegie would retire to his study or take solitary walks in the hills. ‘The Sunset Walk’ was an especial favourite.
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Even before the initial euphoria over Skibo had worn off, Carnegie was plunged into a disagreeable situation. During his business life Carnegie proved himself a very good judge of men – except in his assessment of Henry Clay Frick. Although Frick had become chairman of Carnegie Steel in 1893, it is important to realise that in no sense was he one of Carnegie’s ‘boys’ – as were Henry Phipps or Charles Schwab – although Carnegie considered him an employee more than a partner. Frick, as the founder of a separate company which always had his first loyalty, considered himself an independent associate of Carnegie.

Frick and Carnegie were very different characters, with totally dissimilar interests. Frick was not concerned with dabbling in politics, and had little interest in intellectual pursuits or in being a social animal, but was a keen collector of rare medieval and Renaissance art; even so, these took third place to his family and business. Ever since Frick had joined the Carnegie board of managers there had been growing friction between them; Frick considered Carnegie’s public pronouncements on labour relations, politics and philosophy, and his enmity towards such entities as the Pennsylvania Railroad, to be ludicrous at best and hypocritical at worst. Further he was quickly irritated by Carnegie’s ‘meddling’ memos from abroad. Initial resentment had been sparked off by Carnegie’s behaviour during the Frick Coke Co. strike of 1887, wherein Carnegie countermanded Frick’s labour policies, and the Homestead strike of 1892, when Carnegie continued to make snide comments in public and private saying that the violence was all Frick’s fault. So by 1899–1900 a serious confrontation between them was inevitable, and Carnegie now regarded Frick as a ‘malignant force’
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within the company, who wanted to deconstruct what Carnegie had set up and pollute his business philosophy.

That Frick and Carnegie had been able to serve the same company for so long was due to two main factors: Carnegie admired Frick’s managerial skills and Frick respected Carnegie’s important financial role in the company. The fact that Carnegie Steel brought in good returns helped keep the peace, for by 1899 the company led the world in steel production. Carnegie’s vacillation over whether or not he would sell his share in the business and retire heightened the tension for Frick. As well as the nameless financier’s idea, there was also a proposal – thrashed out at Carnegie’s New York home between Frick, Phipps, Dod Lauder, Schwab and others, on 5 January 1899 – that the steel company would be ‘reorganised and consolidated’ with the HC Frick Coke Co. to form a new company (Carnegie Co.) which would buy out Carnegie who would then retire. Carnegie would get $75 million for his interests and Frick $35 million for his Coke Co. Carnegie discussed the matter with cousin Dod, who felt that this way meant Carnegie (and he, Dod) did not get the best deal.

The board accepted the deal, but Carnegie (with Dod’s agreement) wanted to wait for a better return. By this time too, Carnegie had found out that the nameless ones included the Moores brothers, William and John, who were ex-bankrupts, and others of public notoriety whom Carnegie abhorred. This added another layer of disaffection between Carnegie and Frick. The ongoing discussion on the deal of ‘reorganisation and consolidation’ was brought to crisis point by the price that Carnegie Steel was paying Frick’s Coke Co. for fuel. In Carnegie’s mind he had agreed with Frick that coke would be bought for $1.35 per ton, but by June 1899 Carnegie Steel was being invoiced for as much as $1.75 per ton. At a meeting of the board on 25 October 1899 the matter of the increase was raised. Dod Lauder emphasised the $1.35 deal. Frick denied any such deal done with Carnegie. The matter rested for a while, and then another deal emerged for Carnegie Steel to buy coke acreage from Frick. The board agreed to the deal, but Carnegie made imprudent remarks suggesting that Frick was deliberately making profit from his partners. Frick was outraged.

Carnegie tried to pour oil on the troubled waters by letter but Frick did not respond. Carnegie then raised the $1.35 coke deal again by letter, remarking how ‘touchy’ Frick was on coke matters and emphasising that in all his dealings with Frick there was no personal animosity. Frick disagreed. The unpleasantness over the coke and coke acreage deals bubbled away and Frick explained his feelings in a memo to the board of managers on 20 November 1899, stating his case succinctly. The board accepted Frick’s version, and Carnegie knew he would have to act. Frick had to go. Carnegie approached Frick asking him to resign; he did so on 5 December 1899, his resignation being accepted by the board. However, unpleasant disagreements went on. Tempers flared and legal proceedings were undertaken to disengage partnership agreements. The press and New York financial cadres were agog. An agreement was made for the ‘reorganisation and consolidation’ deal. This made the new Carnegie Co. into a $350 million consolidation with Carnegie’s interest set at $174.5 million and Frick’s at $31.284 million. At the final parting of the ways Frick could be declared a nominal victor.
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Frick and Carnegie would never meet again, although they lived but a stroll away from each other in New York, and Frick is given scant mention in Carnegie’s autobiography. The estranged pair died within months of each other. A part of the Carnegie-Frick legend tells that as Carnegie was reaching his last years he endeavoured to put the past behind him and seek a reconciliation with Frick. To this end he sent a messenger with his sentiments to Frick, whose terse reply was: ‘Tell Mr Carnegie I’ll meet him in Hell, where we are both going.’
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As the twentieth century dawned the world was on the brink of another explosion of scientific discoveries; the telephone was expanding, with 1,336,000 in the United States, railroads had transformed mass transportation, and the private traveller would be further encouraged to hit the open road by the Old Company of Detroit beginning the first mass production of automobiles. On 5 February 1900 the United States and Great Britain signed the first Hay–Pauncefote Treaty, giving America the right to construct a canal across the Isthmus of Panama. On 14 March 1900 US Congress passed the Currency Act, placing US dollars on a parity with gold, and on 6 November President McKinley and his Vice-President Theodore Roosevelt defeated Democrat William Jennings Bryan in the elections. With their return to the White House big business seemed secure. (In the event, six months after the inauguration McKinley was fatally shot by an anarchist at the Pan-American Exposition at Buffalo.)

All these ‘explosions’ of inventiveness would have thrilled the younger Carnegie; but although he would never tire of reviewing Anglo-American affairs and the international situation, he was now convinced that he wanted to escape the everyday cut and thrust of business. A life of philanthropy beckoned for Carnegie, but two obstacles remained in his path. Apart from men like the nameless financiers of a few months previously, who would buy his interests? Furthermore, although his reason was ready to quit, his emotions would not be as easy to salve. On 12 December 1900 Charles Schwab, president of Carnegie Steel, was honoured by a special dinner for some eighty leading businessmen and financiers at the New York University Club. Beside Schwab at the dinner sat J. Pierpont Morgan. In due course Schwab rose and addressed the diners with a discourse on how the steel industry could be run in the future as a ‘supertrust’, with each steelmaker carrying out interlocking processes. What he had to say was nothing original and it is obvious with hindsight that Schwab was aiming his words at the financier; Morgan duly took the bait and a meeting was arranged to discuss how to proceed.

Consensus of opinion agrees that Schwab and Morgan met without Carnegie’s knowledge, and Morgan indicated that he would be willing to buy out Carnegie. How could Schwab arrange such a deal? He consulted Louise Carnegie, who was keen for her husband to retire from business so that he could give all his energies to his family and his philanthropy. She suggested that Schwab should play golf with Carnegie and broach the subject then.

The golf match took place at St Andrews Club, by Yonkers, New York, and Schwab was diplomatic enough to let Carnegie win. Over lunch Schwab told Carnegie of his meeting with Morgan. It was clear, noted Schwab, that Morgan would pay any figure Carnegie cared to put on his holding in Carnegie Steel, but Carnegie showed no real enthusiasm for a deal. His reason, bolstered by his age and his wish to pursue philanthropy, wanted him to sell up, yet his emotions, linked to his childhood of poverty, made him reluctant to loosen his grip on what he had achieved. He needed 24 hours to think. The following morning he took a sheet of paper and set out in pencil the figure he was willing to sell out for. He detailed it carefully: