Full version Rags To Riches

Rags To Riches

This print version free essay Rags To Riches.

Category: Biographies

Autor: reviewessays 16 November 2010

Words: 2023 | Pages: 9

Rags to Riches

Harold Livesay’s Andrew Carnegie and the Rise to Big Business portrayed Andrew Carnegie as a perfect example of the American Dream. From rags to riches is a journey that Andrew Carnegie portrayed through out his life. He was born into poverty in Scotland, moving to America in 1848. Andrew Carnegie started as a bobbin boy to one of the first tycoons of big business in America. With the jobs he did hold he applied the knowledge and techniques from job to job to generate his fortunes. Through seeing the importance of educating himself, he gave back to which he took so much from. By doing so, he ensured the future of making the American Dream possible for anyone, citizen or immigrant.

Andrew Carnegie was born on November 25, 1835, in Dunfermline, fourteen miles north of Edinburgh. The son of a hand weaver, he never really received a formal education. When steam machinery for weaving came into use, Andrew Carnegie’s father sold his looms and household goods, and sailed to America with his wife and two sons. At this time, Andrew Carnegie was twelve, and his brother, Thomas, was five. On June 5th, 1984, the sailing ship left the port of Glasgow, heading to New York. Arriving into New York on July 15, 1848, the Carnegies’ wasted little time settling in Allegheny City, Pennsylvania, a suburb of Pittsburgh, where their relatives already lived. This was Andrew Carnegie’s first step of being able to become more than just weaver like his father, which was common during this period of time.

Allegheny, Pennsylvania provided Andrew Carnegie’s first job, as a bobbin boy in a cotton factory, working for $1.20 a week. Carnegie occasionally merited a temporary clerical assignment in the factory office. This opportunity provided “Carnegie’s first exposure to accounting.” At age 15, while working as a temporary clerical, he decided to learn double-entry booking keeping, which he enrolled into night school. He prided himself on knowing the location of every place of business and the owners of them. On the weekends and when he wasn’t at work, he read books to educate himself further. This was the first sign that can be seen in Livesay’s book that Andrew Carnegie showed that he was on the right track of taking the American dream and making it reality.

Andrew Carnegie saw the importance of telegraphic communications as the future of business. He came in early and stayed late to prove to his boss that he wanted to succeed. His chance came after he was promoted to a part-time telegraph operator. He learned to send and decipher telegraphic messages and became a telegraph operator at the age of 17. “Carnegie determined to learn to take messages by ear, by “reading” the sounds of the key rather than its printout.” This skill would eventually make him the tycoon he was, his dedication of being the best of what he did is evident. When Andrew Carnegie enrolled into accounting class he encouraged his friends John Phipps and Tom Miller into joining him, who later became a few of his trusted friends that were on the same ride as he was.

In 1852 the beginning of becoming one of the richest men came true when Tom Scott took control as superintendent of the Pennsylvania Railroad’s western division. He asked Andrew Carnegie to join him as secretary and personal telegrapher, he accepted right away. Andrew Carnegie was now making $35.00 a month compared to about $20.00. At the age of 18 we was making $35.00 a month, which was a lot for a teenager with no formal education. His dedication to his field is what gave him the chance to later be able to run and manage an industry. Later Tom Scott assigned Andrew Carnegie to his personal telegrapher to help him in dispatching trains all over the western division. “Carnegie worked hard to maximize his opportunity by becoming Tom Scott’s right-hand man.” In 1865 Thomson offered Andrew Carnegie a promotion to general superintendent but he declined the offer. Andrew Carnegie’s intentions were to leave the railroad, which gave way to his next step of becoming an industrial millionaire.

One of Andrews Carnegie’s major investments came in 1861 when he participated in the formation of the Columbia Oil Company. Partnering with Coleman, together they bought the Storey Farm for $40,000, which its capital gains were of $200,000. By 1865 he left the Oil business and started his own business called the Keystone Bridge Company. He considered this company the “pet” and “the patent of all [his] other works.’’ When Andrew Carnegie left the railroad, he did so because he saw a vast construction in the near future and was determined to win Keystone a huge share of it. The total investment tripled between the years of 1867 to 1872 to $3.2 billion.

In 1861 Carnegie Andrew and Tom Miller made small investments in the Freedom Iron Company. With heavier trains and more frequent runs, the iron rails would break every six weeks or two months which ever came first. Steel rails were used to see if they surpassed their cousin iron. They proved worthy and Andrew Carnegie saw this and used his experience working for the railroad as the right opportunity to get involved in. Most production of the steel rails where by British manufactures, seeing this as a problem he ventured to England. Andrew Carnegie met with his cousin Dod Lauder who had a degree in Engineering, who had found a way to fuse steel faces on iron rails. Andrew Carnegie brought the idea back and encouraged the American Steeled Rail Company to use his cousin’s design. After test runs and time, the fused rail failed terribly and this move was one of Andrew Carnegie’s only failures.

Andrew Carnegie and few other associates created Cyclops Iron Works in 1864, through the bitter betrayal of Kloman. Andrew Carnegie first brought cost-based pricing and management to manufacturing just as he did in the Railroad industry with his time under Tom Scott, it took time to prefect, “but he was determined, and he owned a majority of the firm so he prevailed.” Andrew Carnegie’s basic sales strategy was to know the costs involved and be able to quote a low price with the confidence that it would bring in a profit. By this time Cyclops and Kloman merged together, Kloman had had invented a metal saw that could cut exact measurements at high speeds. “By 1870 he felt confident enough to expand.” The British plants still looked down at Andrew Carnegie’s theory of mass production over traditional practices of filling orders when placed. The most important lesson he learned from the way he went about doing business was he had shown that his railroad management theories could in fact be used in the industrial system.

In 1872 Andrew Carnegie focused all of his intention into a single project, a new steel-rolling mill. Not even a year later he had accomplished this and began his empire of the steel mills of America. A major cornerstone came to Andrew Carnegie’s success came in his use of systematic analysis to evaluate his worker’s performance, he was the first manufacturer to do so. Even though Andrew Carnegie created the Edgar Thomson Works to roll steel rails, he never once lost sight of the non-railroad market. During a conference of the major steel company’s, Andrew Carnegie told that if his share of the industry wasn’t equal to the others, he would sell his steel at $9 a ton. This scared the others, but Andrew Carnegie just bluffed it to gain knowledge on what the competitor sold their product at. Later on he told one, “I can make steel cheaper than any of you and undersell you. The market is mine whenever I want to take it.” This showed that Andrew Carnegie knew his industry better than anyone else, and with his practices of production he knew he had the industry at his heels.

In the seventeen years he controlled his company, he became the most well known manufacture in the world. In 1881 a new mill was opened in Pittsburgh, though equipped with the most modern machines, they had major problems with the labor force and asked Andrew Carnegie to buy them out. It was at this time that he Andrew Carnegie saw his golden ticket; he would gain control of a completely modern factory, which was hard in the market since almost all factories ran on out-dated machinery. After a few bitter disputes with his old partners, He merged all of his companies into, the Carnegie Brothers Company.

After his marriage, he thought about retiring he was already 54, but when searched for a buyer, he saw profits rose drastically. Andrew Carnegie would step down and entrusted Frick in charge of the company, he was already sitting on $30 million and gained $2 million annually, which put Andrew Carnegie as one of the richest men in America. After letting Frick run an amok of his company he came out of his sitting back and enjoying life and took back control of his company. He used his policy and started releasing his partners that had not died of old age. He also could be felt at the lowest end of power in the company. Andrew Carnegie dismissed several managers that had failed to fulfill the standards required. When the depression began to hit the industrial world, Rockefeller emerged as the leading hold of railroads and barges. Through old partnerships, the partners representing each others company came to an agreement that royalties would be pay out to Andrew Carnegie and that the shipments would be steady towards Rockefeller. Rockefeller came to the agreement with fixed shipping charges for the duration of the lease.

With his old age coming into affect Andrew Carnegie wanted to go into full retirement. Since he owned 58% of the company, he could not be kicked out, but no other partners could be kicked out unless with it was with his approval. In 1899 Frick and Phipps presented Andrew Carnegie his retirement package, they found a buy that would give him $157 million. “Of which $100 million would be in 5 percent bonds on the new company and $57 million in cash.” He accepted the deal, but wanted to know whom the buyers were, Phipps and Frick claimed it was secrecy; this is where Andrew Carnegie found something wrong here. He later found out that it was a scheme to buy him out for cheap and gain just as much out of the deal as would he. Phipps and Frick went to him to extend the option and he told them not another hour. He gained $1,170,000, which came right out of the pockets of the two that tried to sell him out for cheap. During this time

Andrews Carnegie’s last remaining partner Schwab had begun talks with him of a possible buyer J P Morgan. Morgan called Andrew Carnegie after the deal and said, “Mr. Carnegie, I want to congratulate you on being the richest man in the world.” At this point in his life Andrew Carnegie had set the example and proved that the American dream could become possible. He came to Pennsylvania a poor, ambitious messenger boy and left a polished executive through his experiences of relating one job to the next. His practices and his intelligence made him the richest man in the world.