American businessman (1843–1886)
Thomas Morrison Carnegie (October 2, 1843 – October 19, 1886) was a Scottish-born American industrialist. He was the brother of steel magnate Andrew Carnegie and co-founder of the Edgar Thomson Steel Works (a steel manufacturing company).
Early life.
He was born in Dunfermline, Fife, Scotland, on October 2, 1843. His parents were Will and Margaret Carnegie, and he had a brother, Andrew, who was eight years older. A sister, Ann, had been born in 1840 but died in infancy. His first cousin was future industrialist George Lauder. His father was a master weaver, and his mother sold food in the home and sewed soles on leather boots to help provide income. Left destitute by automation (which threw his father, a hand weaver, out of work), the family emigrated to the United States in 1848 and settled in "Slabtown"—an immigrant neighborhood in Allegheny City, at the time a distinct and fast-growing city on the north side of the Allegheny and Ohio Rivers across from Pittsburgh, Pennsylvania. The family rented rooms from a relative who owned a house at 336 Rebecca Street. (The street is gone, replaced by Three Rivers Stadium football stadium.) Allegheny City was an unpleasant place to live. It had no municipal water system until 1848, no natural gas lines until 1853, and no sewer system, and wild hogs roamed the streets attacking children. There, Thomas attended local public school.
As a boy, Thomas Carnegie was "the beautiful white-haired child with lustrous black eyes, who everywhere attracted attention". He was generally considered well-mannered but reserved, and often went into a quiet room during social gatherings. He was also noted for his quick and wry sense of humor. And while some, such as Andrew Carnegie biographer Joseph Frazier Wall have concluded that Margaret Carnegie secretly favored Thomas, others such as Richard S. Tedlow disagree and conclude that Thomas was largely isolated and lonely within the extended Carnegie family and their large coterie of friends. It is well documented that Andrew and Thomas did not have the same group of friends, and that Thomas' group was smaller. In time, Thomas Carnegie became a lifelong heavy drinker.
Career.
His older brother Andrew made a good deal of money from stock investing, and in 1853 purchased their rented home on Rebecca Street. In 1858, after Andrew had been appointed Thomas Scott's assistant, the Carnegie family sold their Rebecca Street home and bought a large home in Altoona. Andrew was appointed superintendent of the western division of the Pennsylvania Railroad in 1859, and he made Thomas (who had quit school) his assistant. (This was not the end of Thomas' schooling. As an adult, he would later take classes at Duff College.)
In 1859, the family moved back to Pittsburgh and resided at 10 Hancock Street (later renamed Eighth Street, and now part of the Downtown Pittsburgh central business district). But the pollution from nearby factories and iron forges proved too much, and after only a few short months on Hancock Street, Andrew purchased a Victorian home for Thomas and their mother in Homewood, then a middle-class village on the edge of Pittsburgh. Andrew and Thomas rode the train to and from work together, and attended the theater frequently.
In 1861, Andrew persuaded Thomas to invest in the Columbia Oil Company, and it paid off handsomely. That Andrew Carnegie should ask an 18-year-old boy to be a stock investor was not unusual. When Andrew traveled to Scotland with his mother and a friend in 1862, he left Thomas in charge of his numerous business affairs (assets by that time nearing $47,860 or roughly $8.5 million in 2009 inflation-adjusted dollars).
Union Iron Mills.
Thomas' business ventures were often pulled along in the wake of his older brother's interests, and he made his fortune in iron and steel because of Andrew. In 1861, Thomas N. Miller, Henry Phipps (the son of the shoemaker Margaret Carnegie did home work for), Anthony Kloman, and Andrew Kloman organized the Iron City Forge in Pittsburgh to take advantage of the booming need for iron products during the American Civil War. Miller subsequently bought out Anton Kloman's share. Phipps and Miller later learned that Andrew Kloman had sold a one-ninth share in the business to a local man who subsequently died during the war, and Miller bought his share (raising his ownership in the business to four-ninths). Kloman, Miller, and Phipps were soon at odds over these transactions and one another's refusal to sell out to the others, and they sought Andrew Carnegie's assistance in resolving the dispute. On September 1, 1863, Carnegie drew up new incorporation papers which made Miller a "special partner" in the firm and which also made Thomas Carnegie a partner in the business. The money for Thomas' investment came from Andrew. A clause in the contract permitted Kloman and Phipps to oust Miller and make him a silent partner, which they quickly did. The same clause, however, gave Thomas Carnegie the right to purchase the extra one-ninth share Miller had obtained, and Andrew Carnegie immediately financed this purchase. When Miller, one of Andrew's closest friends, protested, Andrew induced Thomas to plead with him to acquiesce lest Andrew's reputation as a fair dealer suffer. Miller did so.
Meanwhile, Miller established a rival firm, the Cyclops Iron Company, with Andrew Carnegie as an investor. The Cyclops firm opened in October 1864. Thomas, however, was deeply concerned that the Cyclops company would harm his own interests in Iron City Forge, and successfully prevailed on Andrew to merge the two firms. (It may also be true that Andrew always intended to merge the two firms in order to gain control of both, and used Thomas for this purpose.) Kloman and Phipps at first refused, but Thomas made an offer of all the shares in Cyclops plus an additional payment of $50,000 (a very large sum at the time). On May 1, 1865, the new Union Iron Mills Company was formed. Thomas was to "help out" as needed, and appointed vice president of the firm.
While Andrew and Miller spent the better part of the next year touring Europe, Thomas flourished at the Union Iron Mills. The company struggled financially as the end of the Civil War led to sharp drops in the need for iron products, but Thomas proved to be a warm and friendly executive where his brother was cold and austere. Thomas' ability to make friends allowed the firm to receive numerous contracts and even infusions of capital when needed, and it is unlikely the company would have survived without him. Andrew wrote to Thomas extensively from Europe, constantly criticizing his business decisions, providing him with micromanaging instructions, and generally demeaning him. From Europe, Andrew also badgered Thomas to make improvements to their home in America, and decided to call the rapidly expanding mansion "Fairfield." Thomas' judgement proved to be more prescient than Andrew's when, in July 1865, Andrew became fascinated with the "Dodd process," a new English method of welding steel facing to iron railroad rails and, despite Thomas' misgivings, he purchased the American patent for the process. The process proved unworkable, and although he made additional investments in retooling the mill, the rails produced by the new process were just as brittle and breakable as those formerly manufactured. Thomas advised him to conserve his money, but Andrew purchased yet another steel welding patent to try to fix the process. That, too, failed and soon Carnegie's steel-welding business was bankrupt. Thomas correctly foresaw that Andrew too easily believed his judgment was infallible, and soon a coal mining process Andrew had purchased also led to significant financial losses.
Meanwhile, Thomas began courting Lucy Coleman, daughter of Pittsburgh iron manufacturing magnate William Coleman. Coleman provided Thomas with critical advice on how to improve the Union Iron Mills, and inside information on the coming railroad building boom. Another critical business relationship was with Piper &amp; Shiffler (later known as the Keystone Bridge Company), an iron bridge building firm invested in by Andrew in 1862. Andrew diverted much of Piper &amp; Shiffler's contracts to the Union Iron Mills, further bolstering the company's profits. Thomas often tried to rein in some of his brother's excesses, but to no avail. For example, in 1866 Andrew proposed purchasing a pipe works adjacent to the old Cyclops Iron Works. Thomas opposed the purchase, arguing that the time for expansion was not ripe and that the pipe works used a kind of iron which the Union Iron Mills did not produce. The pipe works turned out to be a white elephant, but they burned down shortly thereafter (saving the firm from further losses).
The Lucy Furnace and Thomson Works.
Thomas Carnegie played a critical role in the expansion of the Carnegie Bros. &amp; Co. company into the production of pig iron. Iron ore was usually smelted into pig iron first, a brittle but refined product (often cast in ingots) which was usually sold to other companies and turned into wrought iron or steel. Several investors in the Union Iron Mills wished to invest in companies producing pig iron, but William Coleman advised against it and advocated building a wholly owned modern furnace under the company's control. A division of the Union Iron Mills (named the Isabella Furnace Company) was organized on December 1, 1870, and the company's first blast furnace (named the "Lucy Furnace" after Thomas' wife) was constructed on 51st Street in Pittsburgh. Most of the investors who joined the Isabella Furnace Company were Thomas' friends, not Andrew's. Thomas Carnegie supervised the operation of the Lucy furnace, and he was almost alone in contributing to its business success. The Lucy furnace was enormous— high with a bosh (the widest part of the furnace and the hottest due to its proximity to the hearth)—and was producing a record-shattering a day by 1872. A second Lucy furnace was built in 1877. In 1881, a two-thirds share in the company was sold to Wilson, Walker &amp; Co. and James R. Wilson relieved Thomas Carnegie and John Phipps of their duties overseeing the operation of the furnaces.
Thomas Carnegie's experience in running the Lucy furnaces led him to co-found the Edgar Thomson Steel Works. In early 1871, William Coleman became interested in the new Bessemer process steel-making furnaces, and he traveled throughout Ohio, New York, and Pennsylvania to view these new works. Coleman invited Thomas Carnegie to join him in building the new steel works, and together they purchased of land about east of Pittsburgh known as Braddock's Field (a historic battlefield where French and Indian forces from Fort Duquesne defeated British General Edward Braddock on July 5, 1755, in the Battle of the Monongahela). (Thomas borrowed the money for his investment from his brother.) Coleman and Carnegie lived near one another in Homewood and went to work together on the streetcar, and it was during these daily commutes that the men worked on their plans for the new steel works. Although Thomas asked Andrew to invest in the new mill, Andrew refused (considering it too risky a venture). Thomas then prevailed upon David McCandless, a wealthy Pittsburgh merchant and vice president of the Exchange National Bank. McCandless agreed, and brought in William P. Shinn (who would, 11 years later, be awarded the Norman Medal, the top award for civil engineering, in 1883) as treasurer. In the spring of 1872, Andrew Carnegie (while on a bond-selling trip) made a survey of Bessemer steel works in Europe and returned to the U.S. highly enthusiastic about the new project. Andrew subsequently invested $250,000 in the works. Meanwhile, Coleman, McCandless, Scott, and Thomas Carnegie had purchased a newly platted tract in Pittsburgh, subdivided it, and sold the lots at a significant profit. The partners then invested $50,000 each in the steel mill. A new company, Carnegie, McCandless &amp; Co., was formed on January 13, 1873, to build the works.
Thomas was on vacation with Andrew and their mother at the upscale resort town of Cresson Springs in September 1873 when they learned of the failure of the investment bank of Jay Cooke &amp; Company, which precipitated the Panic of 1873. The Panic created financial difficulties for the company, and it floated bonds to stay alive. J. Edgar Thomson, president of the Pennsylvania Railroad and a mentor and close friend to many of the partners, bought many of these bonds in late 1873, helping keep the