The Steel Age

In 1872 Andrew Carnegie watched the Bessemer process turn molten iron into steel with a blast of air. On sharp curves near Pittsburgh, iron rails wore out in six weeks. He bet everything on steel, built a new kind of mill at Braddock, Pennsylvania, and cut its costs year after year for a quarter century. Steel got cheap, and America was built of it.

1. 1848 · Allegheny City

   A dollar twenty a week

   The Carnegies borrow £20, sail from Dunfermline, Scotland, and settle across the river from Pittsburgh. Andrew’s first job is bobbin boy in a cotton mill at $1.20 a week, dawn to dark. Then telegraph messenger at $2.50 a week, then operator. In 1853 Thomas Scott of the Pennsylvania Railroad hires him at $35 a month. He later wrote that none of his millions gave him the happiness of that first week’s pay.

2. 1872 · England

   Iron gives way to steel

   Carnegie sees the Bessemer process at work in Britain and makes up his mind. “The Iron Age would pass away and the Steel Age take its place,” he wrote. On 1 January 1873 he and his partners organize a steel-rail company. He picks the site, Braddock’s Field on the Monongahela, served by two railroads and the river, and names the works for his friend J. Edgar Thomson, president of the Pennsylvania Railroad.

3. 1873 · Braddock’s Field

   Building through the panic

   Alexander Holley, the country’s leading Bessemer engineer, designs the mill around the railroad tracks so material flows straight through. Digging the foundations turns up bayonets and swords from Braddock’s defeat of 1755. In September 1873 the bank of Jay Cooke & Co. fails and a national panic follows. Carnegie keeps building. Bill Jones comes over from the Cambria works at Johnstown, and about 200 skilled men follow him.

4. 22 August 1875

   The first blow

   With Captain Jones in command, the first of Holley’s twin six-ton converters is charged with molten iron. Air is driven up through the bath, burning out the carbon in a roaring column of flame and sparks. The first heat of Bessemer steel pours into ingot molds. It is the start of an order for 2,000 steel rails for the Pennsylvania Railroad.

   

5. September 1875

   Profit from the first month

   The first rail is rolled on 1 September. Steel rails sell for about $70 a ton, and Carnegie’s agents take orders across the country before rivals believe the mill is running. The works turns out just over 1,200 tons of rails that month and clears $11,000. By 1880 a single year’s profit, $1,625,000, is more than the entire mill had cost to build.

6. 1880s · Edgar Thomson

   The Captain

   Jones drives the works to records his rivals cannot match, and his patents pay for years. His mixer, a brick vessel holding 100 tons of molten iron, evens out the iron going to the converters and keeps them blowing without a stop. Carnegie offers him a partnership worth millions. Jones turns it down and asks for a salary instead.

   Jones and Carnegie“Just give me a h--l of a salary if you think I’m worth it.” “All right, Captain, the salary of the President of the United States is yours.”
7. 1882 to 1897 · Mine to mill

   Coke, ore and boats

   In 1882 Carnegie buys half of Henry Clay Frick’s coke company, the best fuel in the Connellsville field. In 1896 he leases Mesabi iron ore in Minnesota, and in 1897 his own railroad starts hauling it from Lake Erie at Conneaut to Pittsburgh. Ore is mined, railed, shipped and railed again, coal is turned to coke, and still the steel sells, in Carnegie’s words, at three pounds for two cents.

8. 1889 · Braddock

   A library for the mill town

   Carnegie gives Braddock a library, the first Carnegie library to open in the United States. That June he publishes the essay that becomes “The Gospel of Wealth.” A rich man should spend his life giving his money away, he argues, and “the man who dies thus rich dies disgraced.” By 1890 American mills are making more steel than Britain’s, and Carnegie owns a large share of it.

9. 12 December 1900 · New York

   Morgan meets the price

   At a dinner of 80 business leaders at the University Club, Charles Schwab speaks for 90 minutes without notes on what one great steel company could do. J. P. Morgan sits beside him and takes him aside afterward. In 1901 Carnegie writes down his price, $480 million, and Schwab carries it to Morgan, who accepts. Carnegie Steel becomes the core of U.S. Steel, capitalized at $1.4 billion.

   Carnegie, testifying to Congress, 1912“I gave my memorandum and Morgan saw it was eminently fair.”