97: The Gilded Age’s Robber Barons: John D. Rockefeller & Andrew Carnegie
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Thomas Alva Edison, the Wizard of Menlo Park, as he was known, made a recent appearance in our Origin of the Movies episode.

because in addition to the electric light and countless other inventions, he also gave us the motion picture camera. It reminded me that Edison didn't do well in the traditional school classroom when he was a boy. This prolific inventor and successful businessman learned better at home. At school, it's reported that he'd likely be lost in thought. His mother, Nancy, recognized a different approach to learning was required for her son. And the rest is history. As a parent, I appreciate that.

because each of my own three children are different. They each learn in different ways, and I want them to thrive at whatever they choose to do later in life. One learning option for kids today is K-12. K-12 powered schools are accredited, tuition-free online public schools for students in kindergarten through 12th grade. K-12 can help your child reach their full potential and give you the support you need to get them there.

This is different from homeschooling, where you are responsible for teaching them. K-12 powered schools have state certified teachers, specially trained in teaching online.

So join the more than 2 million families who have chosen K-12 and empower your student to reach their full potential now. Go to k12.com slash HTDS today to learn more and find a tuition-free K-12 powered school near you. That's the letter K, the number 12 dot com slash HTDS. K12.com slash HTDS. It's just past 9 a.m. on a warm, clear summer day, August 8th, 1885.

12 pairs of black stallions slowly trot up Broadway in New York City. They're pulling a massive, ornate, black catafalque, upon which rests a black coffin shaded by a black canopy. Twenty generals advance ahead of these magnificent steeds. At their front is the aging, salt-and-peppered former Democratic presidential nominee and Union general, Winfield Scott Hancock. He's mounted, of course, on a black horse.

Behind all of this, the rest of the funeral procession is so large that it chokes off the whole of Broadway for miles. Indeed, other than these solemnly advancing feet, hooves, and carriages, densely populated Manhattan has come to a standstill. All of New York is in mourning. The whole nation is in mourning. Ulysses S. Grant is dead. Ah, Ulysses.

It was only last October when the 62-year-old former commander of the Union Army finally agreed to see a doctor about his sore throat. It turned out to be cancer. Had a lifetime of cigars finally caught up with the blue-eyed general turned U.S. president? It's a question that many do and will yet ask, but perhaps his biographer, Ronald White, answers this best. It did not help. Upon diagnosis, U.S. Grant's mind immediately turned to ensuring he didn't leave his family destitute.

With very generous terms from his good friend turned publisher, Mark Twain, he raced against the clock to write his memoirs. And he won that race. Unconditional Surrender Grant, as the Union Warrior was known, completed his masterpiece of prose and Civil War history at a cottage in upstate New York only days before surrendering the ghost on the morning of July 23rd, 1885. And today, on August 8th, doleful church bells ring from sea to shining sea.

But it's not just the bells that lead me to say all of America mourns. Not even the astounding one and a half million grieving Americans now flooding Manhattan streets and the balconies, windows, and roofs of its black draped buildings. Impressive as both of those aspects are, I find it particularly noteworthy that Americans from every corner of the nation and of every stripe are here to pay their respects. More than 80,000 march or ride in the funeral procession.

Sure, this includes bigwigs, like the only two surviving former U.S. presidents, Rutherford B. Hayes and Chester A. Arthur, as well as the current U.S. president, Grover Cleveland, with his entire cabinet. Senators, congressmen, and governors are here too. But their numbers are dwarfed by the 8,000 municipal leaders who've traveled from all over the United States to walk in the memory of Ulysses S. Grant.

Tens of thousands of those in this procession are military, but I'm not just talking about active units. Many are Civil War vets. The one-legged general, Daniel E. Sickles, rides at the head of 18,000 who once fought and bled under Ulysses' command. They marched with him in life. Now, they march with their former commander to his grave. It's hard for observers not to get choked up. That's particularly true when they see these aging soldiers are joined by their former foe.

It's a haunting yet healing sight. Gray clad and now gray haired. Ex-Confederate units, like the famous Stonewall Brigade, march in honor of the Union commander. It's quite befitting for the man whose presidential campaign slogan was, let us have peace.

His family knows that, and that's why they made sure Ulysses' honorary pallbearers represent both North and South. These include his beloved generals, Philip Sheridan and W. Tecumseh Sherman, but also Confederate generals, Simon Bolivar Buckner and Joseph Johnston. Joe's traveled all the way from California to be here.

Yet, Ulysses' fervent desire for healing never conflicted with his commitment to equality for Black Americans. So it's no surprise that many Black veterans proudly march in this procession as well. Indeed, Black communities across the nation are heartbroken. Ulysses was both the general who won the war and the president who fought for their rights during Reconstruction.

One formerly enslaved man whose shoeshine station happens to be along the mournful parade's path honors Ulysses with a simple but powerful sign. It reads, "He helped to set me free." Ulysses' good intentions as president didn't help Native Americans as he wanted, and he deeply regretted his ill-conceived effort to stomp out wartime smuggling by singling out Jewish Americans. But God, the man learned from his failures.

Perhaps a testimony to that is the presence of two other mournful figures accompanying this procession: Ulysses Still Loyal Seneca A. DeCamp, Commissioner of Indian Affairs, Ely Parker, and Rabbi E.B.M. Brown. Yeah, Ulysses was no more perfect than any of us, but he truly tried to do right by all. No wonder every segment of America—regional, racial, religious, you name it—is in mourning. To quote Frederick Douglass,

In Ulysses S. Grant, the Negro found a protector, the Indian a friend, a vanquished foe a brother, an imperiled nation a savior." Hours have passed. Finally, in the afternoon, the horse-drawn catafalque and its accompanying generals come to where Riverside Drive meets 122nd Street. Warships fire salutes in the harbor as the black coffin is taken from the black catafalque and toward a brick tomb.

Just as a bugler signaled the end of the day for Ulysses and his soldiers countless times during the war, so now a lone, single bugler sounds the end of Ulysses' days by playing taps. Our four honorary pallbearers, two Union, two Confederate, flank the coffin. W. Tecumseh Sherman, or just Comp, as Ulysses used to call him, is shaking. The aging general's usual nerves of steel have abandoned him.

Tears flow freely down Kump's wrinkled, bearded cheeks as his dear commander and friend, the hero of Appomattox, is laid to rest. Goodbye, Ulysses. An era has ended. Not only is Ulysses S. Grant gone, so is his world. This is no longer the predominantly agricultural United States into which Ulysses was born. Just looking around the very city his funeral procession marched through proves that.

Buildings keep stretching north. Trains full of passengers and goods are multiplying. The impressive Brooklyn Bridge spans the turbulent East River, and Edison Electric has a power station bringing electric lighting to Lower Manhattan. It's clear that money and power no longer reside with the landed gentry. It resides in these increasingly taller downtown buildings, where tenacious titans of industry are carving out their own economic empires. This is the race of the Gilded Age's tycoons.

the robber barons. Welcome to History That Doesn't Suck. I'm your professor, Greg Jackson, and I'd like to tell you a story. It's time for us to meet some of the most powerful figures in the history of the United States. And no, they are not politicians. Having power through a military or political career is just so passe.

In the Gilded Age, power is having your own economic kingdom, or at least a fiefdom. Ah, hence the term these semi-royals don't appreciate very much. I'm talking about the robber barons. Now, we can't meet them all, so I'm choosing to introduce you to two of the most fascinating, two tycoons whose wealth could buy all the guild adorning the Gilded Age, John D. Rockefeller and Andrew Carnegie.

We'll follow their rags-to-riches stories as they take over entire industries, oil and steel respectively, and forever change the American economy. And while we'll save most of the backlash for the episode after this one, we'll also get a taste of that as we recall the Great Railroad Strike of 1877 and experience up close the Homestead Strike of 1892. So let's get started by meeting the man behind Standard Oil, John D. Rockefeller.

His story begins in the mid 19th century. So you know what we have to do, rewind. It's the 1850s in any town, USA, probably somewhere in Ohio, but I can't say exactly. Historical records of what's about to happen speak in generalities rather than specifics. But I can tell you though, is that a roughly six foot tall, handsome, broad chested, blue eyed man is about to make this community his next mark.

The traveling salesman, or herbal doctor as he prefers to call himself, has many interesting wares, but he really loves to hawk pills and elixirs. He even claims his "medicine" can cure cancer. I know, the irony is especially disturbing given this episode's opening. Anyhow, he sometimes reels in his victims, uh, customers, by making up warnings about the potency of his products.

You might think that scares people off, but it's actually quite effective. One neighbor will later recall, he would warn them solemnly that they must not be given to a woman in a delicate condition, for they would surely cause abortion. Thereupon, he would sell his pills at a higher price. Yes, the harmless brown colored elixir is now moving almost as quickly as the salesman will once he's got these good people's money in his pockets. Sorry, not salesman.

He bills himself as Dr. William A. Rockefeller, the celebrated cancer specialist. William, aka Big Bill, or better yet, Devil Bill, is the quintessential 19th century snake oil salesman. What he's doing is perfectly legal in the 19th century United States, but the legality of it doesn't make it moral. Not that Bill cares. He's not one for integrity.

The man cheats regularly on his devout Baptist wife, Eliza, and in 1855, the 42-year-old salesman becomes a bigamist with his illegal marriage to Canadian teenager Margaret Allen. Neither Eliza nor Margaret know they are sharing their traveling husband with the other. In short, Bill is a confidence man, a con artist, and a proud one at that. In his mind, this is how the world works, and the sooner his children realize that, the better.

Case in point, a decade back, the handsome, charismatic Khan would open his arms to his toddler son in order to entice the boy forward. Once the child committed, daddy would step away and let the little one face plant on the floor. Basically, it was an antitrust fall. The message was, don't trust anyone. As the child grew, Bill reinforced that, explicitly telling him, never trust anyone completely, not even me.

That child is John Davison Rockefeller. Bill's dishonest ways place quite a burden on John. To say he comes from an impoverished background is a slight overstatement, but it is true that his mother never knew how much money her con man husband would or wouldn't provide. This means Eliza and the six kids see lean times, and John will be somewhat of a rags-to-riches story. Thus, as the oldest child, John helps to carry the household through odd jobs and selling candy.

The blue-eyed teenager with light brown hair will later recall that, under his thrifty mother's tutelage, I was raised to work, to save, and to give. But the lad wants more. He tells one of his boyhood friends, "'Someday, sometime, when I'm a man, "'I want to be worth $100,000, "'and I'm going to be too, someday.'"

And it's around his 16th birthday in 1855 that John Dee finds himself somewhat pressed into pursuing a full-time job. It seems his father can't afford to let him finish the last two months of high school. Is this because Devil Bill's second secret marriage is tightening up his finances? John's biographer, Ron Chernow, certainly thinks so. But regardless of why, that's the situation. John must find work.

It's September 26th, 1855 in Cleveland, Ohio, and John D. Rockefeller is on the job hunt. For six weeks now, the rail-thin 140-pound teen has gotten up six days a week at 8:00 a.m. and spent his entire day looking for employment. Marching all over under the hot Cleveland summer sun in a pressed, clean suit, John wants something big, something that'll truly distance himself from his unreliable con artist father.

Even the mere suggestion from his pops that maybe he's looked long and hard enough and should just come home sends a chill down John's spine.

So, day in and day out, he continues going to Cleveland's railroads, banks, and wholesale merchants, all industries that have blossomed in this large city of 30,000, asking the top men if he can put his recently completed $40 three-month-long education from E.G. Folsom's Commercial College to use as a bookkeeper. This morning, John decides to try his luck down on the docks. He walks into the Merwin Street office of wholesale merchants Hewitt & Tuttle.

Inside the three-story brick building, junior partner Henry B. Tuttle actually gives John an interview. It goes well enough that he invites the Linky youth to come back after lunch. Returning that afternoon, John meets with the senior partner, Isaac L. Hewitt. Isaac's a big deal. He owns a lot of Cleveland real estate and helped found the Cleveland Iron Mining Company. The local business legend looks John up and down. He puts the teen's penmanship to the test. A bookkeeper can't very well have poor penmanship.

Finally, Isaac makes up his mind. He looks at John and says, "We'll give you a chance." Elated, John hangs up his coat and gets right to work. For the rest of his life, John will celebrate September 26th with far more gusto than his own birthday. He'll call it Job Day, the annual celebration of starting down his career, a career that will ultimately lead him to become the most successful capitalist the country has ever known. John is a diligent bookkeeper.

He works day and night, but after three years, he decides to go into business for himself. Joining forces with a friend from his brief business school days, an Englishman named Maurice Clark, 18-year-old John becomes a co-owner of Clark and Rockefeller in 1858. The duo's Cleveland-based merchant business is an enormous success, and the nation's coming civil war will only make their services all the more necessary. As a New York-born Ohio transplant, John is a northerner through and through.

He votes Republican, supports Abraham Lincoln, the Union, and even abolition. That last one is so important to him, he's even helped purchase the freedom of two enslaved souls. John claims he wants to fight. He'll later report that, "I wanted to go into the army and do my part," but he doesn't dare risk his newly established business. Thus, the rising business star sends substitute soldiers instead.

As the war rages, however, John and his partner are growing interested in a product that seems to be on the rise. It's called oil. See, the American Civil War is changing the entire landscape of the country, even the lighting industry. Still well over a decade away from Thomas Alva Edison's electric light, the nation relies on the North's whale oil and the South's turpentine to light their lamps. And the cost of both has skyrocketed. So Americans are turning to a new source for lighting their homes at night.

Kerosene, a product of refined oil that burns long and bright. These wartime realities are making kerosene catch on fast. Meanwhile, oil itself is also pretty useful to lube up other industrial booms, including the railroad. Hence, in 1865, the congressman and future Dark Horse president, James Garfield, writes to a former staffer,

I've conversed on the general question of oil with a number of members who are in the business, for you know the fever has assailed Congress in no mild form. Oil, not cotton, is king now in the world of commerce. And wouldn't you know it, the oil fields just happen to be booming in the very state this future president and John D. Rockefeller call home, Ohio.

So as the Civil War carries on, John and his partner, Maurice, take on the latter's brothers and a chemist named Sam Andrews to form a new company and enter the oil business. But the mustachioed, tall, and gangly Ohioan isn't worried so much about drilling, ever a shrewd businessman. John knows that the real money is found in refining the oil into kerosene, petroleum jelly, gasoline, and other byproducts. The partners set up their own refinery called Excelsior Oil Works.

Maurice Clark's ill-tempered brothers prove a problem, however, and when they claim to want to break up the partnership, John catches them off guard by taking them at their word. Using an auction to settle the dissolution of the company in March 1865, recently married John gladly outbids the Clarks. And with the chemist Sam Andrews standing by his side, well, John is nothing but ascendant. By December of 1865, he owns two refineries in Cleveland. More will soon follow.

As John acquires more and more refineries, and with them, more and more power over the industry, others begin to worry he's creating a monopoly over oil in the United States. And with the incorporation of his new company, Standard Oil, in 1870, well, John is poised to do just that. It's a snowy afternoon, December 1871, in Cleveland, Ohio. Colonel Oliver Payne is sitting and waiting in one of the city's preeminent banks.

The Colonel has a well-to-do big shot in the oil industry. Frankly, his firm, Clark Payne and Company, is only second to John Rockefeller's, and the competition has sown a bit of enmity between them. So the only thing more surprising than John asking for a sit-down with him is that the Civil War vet has agreed to it. John walks into the bank at their agreed-upon time, 3 p.m. The gangly Standard Oil founder explains that he wants to see the Cleveland-area oil refineries merge.

John contends that there are far too many refiners and that's causing overproduction by small-time hacks with inferior product. It's damaging the industry, he asserts, so merging is necessary if they are to survive. Naturally, he has a suggested banner for this grand unification. His, Standard Oil. There's another element here too, the newly formed Southern Improvement Company.

While its name makes the Southern Improvement Company sound noble, it's really an umbrella under which the New York Central, Erie, and Pennsylvania railroads are ending their squabbles over shipping prices on oil. This will set uniform rates on all lines. Meanwhile, the SIC will also jack shipping costs up, then provide rebates to select refineries. In other words, the SIC will undercut free market principles by making sure refiners not in the club are stuck paying double to ship.

In short, this is an oil/railroad cartel and John Rockefeller is on the inside. Good God. Big as Clark, Payne and company is, does it really want to go up against this machine? John asks the Colonel, "If we can agree upon values and terms, do you want in?" The Union veteran contemplates the situation. He gives a tentative yes, contingent upon examining John's standard oil ledger books.

When he sees them later that day, the colonel's jaw drops to the floor. Standard Oil's numbers are stunning. He concedes. John acquires Clark, Payne & Company for $400,000. The valuation is quite a stretch, but money isn't the concern. Winning is. He gladly agrees, and in doing so, 31-year-old John Rockefeller just became the world's biggest oil refiner. Nor is John Dunn.

Between February 17th and March 28th of the following year, 1872, Standard Oil buys out 22 of Cleveland's other 26 oil companies. This means the world's largest oil refiner also controls over one-fourth of all refineries in the United States. Now, is John picking up distressed companies with generous offers? That's how he tells it.

The devout Baptist claims to be an angel of mercy for refiners that would go under anyway because of Standard Oil's superiority. He overpays, then brings the seller on as a Standard Oil exec, just as he did with the Colonel. Or is he pressuring and unfairly breaking smaller competitors, then forcing them to accept their fate as mere feudal lords in his growing empire? His critics say it's the latter.

Although the SIC never goes into play because word of the nefarious plan produces such a national outcry that the state of Pennsylvania revokes its charter, it's quite a coincidence that John's 22 acquisitions happened during the few months this threat existed. John will later assert in lawsuits that he never mentioned the SIC during talks with sellers. Probably true, just as it's true his offers were generous, but none of this is mutually exclusive.

Sellers likely knew about the looming threat the SIC posed to them and rationally saw they had little choice but to bend the knee and kiss the Rockefeller ring. While it's impossible to ever know exactly how nefarious or innocent these dealings were, the press calls it a ruthless takeover. They dub John's mere months-long acquisition of almost every Cleveland refinery as the Cleveland Massacre. And yet, the Gaunt Baptist businessman isn't done.

Over the next several years, John acquires most of the refineries in other states as well. The devastating financial panic of 1873, that I described during our introduction to the Gilded Age in episode 91, leaves the smaller ones ripe for the taking. By 1875, John controls most of Pennsylvania's refineries and begins a takeover of the oil business in both New York and West Virginia. No one expected this from the son of a traveling snake oil salesman.

Of course, deeply religious John attributes his success to God. "I believe the power to make money is a gift from God, to be developed and used to the best of our ability for the good of mankind. Having been endowed with the gift I possess, I believe it is my duty to make money and still more money." And make money he does. Even the Vanderbilts take notice.

The famous, if not infamous, Cornelius Vanderbilt, aka the Commodore, and a nod to his domination of steamships before conquering New York railroads, has long been the king of American capitalism. He's the OG of business tycoons, if you will. No one ever dictated terms to him until he dealt with four decades younger John D. Rockefeller. The Commodore's son, William Vanderbilt, astutely predicts, quote, he, John,

will become the richest man in the country, close quote. Yes, he will. And when he does, he'll be dethroning the Vanderbilts. But he's not there yet. First, John has to do battle with a few major railroads. Their war begins with the invention of a new weapon, the tank car. Fearing that oil is being refined faster than the already expensive barrels in which they're transported can be made, John invests in railroad cars that are effectively a massive tank of oil.

Once developed, Standard Oil outfits all the main railroad cars it uses. The New York, Erie, Pennsylvania, and so on. John now owns the very cars the railroads are using. He even charges them when they use his cars to transport oil from competing refineries. Combine that with the new pipelines John is developing so he can cut out the railroads altogether for Standard Oil's victory over the railroads.

After all, between the size of Standard Oil and now this tank car slash pipeline infrastructure, the railroads need John Rockefeller more than he needs them. Line after line capitulates to the oil tycoon taking over their oil shipping operations, including Cornelius the Commodore Vanderbilt's New York Central. There's just one major holdout, Tom Scott of the Pennsylvania. Ah, Tom. He and John have history.

Tom Scott was a part of the Southern Improvement Company plan to get Standard Oil better prices. But now he sees the monster he helped create. Hoping to wrest some power from Standard Oil's monopoly, Tom and his exceptionally long sideburns rely on the Pennsylvania Railroad subsidy run by Colonel Joseph Potts, the Empire Transportation Company.

The empire has some of its own pipelines and tank cars. And the idea is that if they can transport the oil from smaller refineries using their own materials, Standard Oil's monopoly will slip, thus leveling the playing field. But that's not how John Rockefeller sees it.

He goes ballistic. Here, I have gone out of my way to be friendly to the Pennsylvania in the allotment of oil shipments, and now you gentlemen are permitting your associate, Colonel Potts, actually to invade my field? Why, it is nothing less than piracy. You must call off this poacher. Tom doesn't give in, so John goes scorched earth. In the spring of 1877, the Gaunt Ohioan stops all standard oil shipping on the Pennsylvania Railroad.

And that smarts when two-thirds of the oil transported on the Pennsylvania comes from Standard Oil. He idles his Pennsylvania refineries and starts pushing Cleveland production to make up the difference. In short, John, who has no public security holders, knows he can bleed longer than the Pennsylvania can. Sure enough, John's right.

Tom Scott makes cuts, and when his employees in Pittsburgh have already been dealing with the economic downturn still at play since 1873 and other cuts in recent years, well, they hit a breaking point. In July, we get the Great Railroad Strike of 1877. I detailed this strike to you in the open of episode 91. Trainmen refuse to let goods ship. The National Guard is called in.

Confusion reigns, some shots are fired, civilians and children die, and the people respond by putting the flame to the Pennsylvania's property, ultimately destroying 39 company buildings, 104 engines, and over 2,000 train cars across three miles. And now you know that one of the layers behind the cuts that led to this strike and the 40 deaths that followed was Tom Scott's power struggle against John Rockefeller and John One.

Now he controls all shipping on all the railroads. And as any fan of the Monopoly board game knows, that's always a winning strategy. By the end of the 1870s, John controls over 90% of oil production in the US, and he can transport it at any reasonable rate he wants. Basically, he's a king. But like the once untouchable Cornelius Vanderbilt, John D. Rockefeller will yet find there's someone who can quite literally give him a run for his money.

Ironically enough, that challenge will come from the mentee of his vanquished foe, Tom Scott, a Scottish immigrant by the name of Andrew Carnegie. But to appreciate Andy's rise, we need to dial back the clock one more time. Here we go. Rewind. Are you earning and investing in the stock market? In real estate? How about in relationships? Are you earning and investing in your life?

I'm Doc G, semi-retired hospice physician and host of the Earn and Invest podcast, where we have the 201 or next level conversations about money and life. Not only how you make money and grow it, but also how you use your wealth to create a better and more fulfilling existence. Join us every Monday and Thursday wherever you listen to fine podcasts. It's a chilly autumn day, 1859 in Altoona, Pennsylvania.

While we know Tom Scott will get crushed in later years going toe-to-toe with John Rockefeller, today he's still an up-and-coming employee of the Pennsylvania Railroad. He's just returned home from Philadelphia, where his interview with the Pennsylvania's president, J. Edgar Thompson, resulted in a promotion. Indeed, Tom is moving up from a railroad general superintendent to vice president. This does mean, however, the sideburn-wearing, thick-haired Tom has to move to Philadelphia.

That leaves a lingering question. What will happen to Andy Carnegie? Born the son of a struggling handloom weaver in Scotland, Andrew Carnegie, or Andy to those close to him, immigrated with his penniless family to Pittsburgh back in 1848 when he was 12 years old. They were so broke, Andy had to get right to work. But he quickly moved up from his father's world of textiles into the telegraph game.

He excelled here, so much so that when Tom Scott decided he needed his own telegraph operator and assistant in 1853, he offered the gig to the fair-featured, strong-jawed 17-year-old. Andy proved more than capable in the years that followed. In fact, one time, when Tom wasn't around and things got hectic, Andy even took it upon himself to issue orders in his boss's name.

In short, Andrew Carnegie has more than shown his worth. And after six years of working together, it'll be a real shame for Tom to part with his right-hand man. And understandably, Andy's quite nervous. What will happen to him and his career if his mentor Tom heads to Philly? Well, Tom's invited the young Scotsman over to talk about that very thing. Now a barrel-chested, barely over five-foot-tall 24-year-old, Andy enters and takes a seat across from Tom in the latter's home.

Tom tells him about his interview and impending promotion that will require moving to Philadelphia. There will be other changes too. Tom explains that Mr. Enoch Lewis will be promoted to replace him as General Superintendent of the Railroad here in Altoona. Andy realizes his future is up in the air. He listens eagerly as Tom continues. "Now, about yourself. Do you think you could manage the Pittsburgh division?" "Is he kidding? Pittsburgh is a major division of the railroad, a boom town with plenty of business.

That was Tom's job when the two first met. Some pretty big shoes to fill then. Andy answers, "I think I can." "Well, Mr. Potts is to be promoted to the transportation department in Philadelphia, and I recommended you to the president as his successor. He agreed to give you a trial. What salary do you think you should have?" "Salary? What do I care for salary? I do not want the salary. I want the position."

It is glory enough to go back to the Pittsburgh division in your former place. You can make my salary just what you please and you need not give me any more than what I'm getting now. You know, I received $1,500 a year when I was there. Mr. Potts is receiving 1,800. I think it would be right to start you at $1,500 and after a while, if you succeed, you will get the 1,800. Would that be satisfactory? Oh, it will. Tom just doubled Andy's salary.

On December 1st, 1859, the young Scotsman is officially appointed superintendent of the Pennsylvania Railroad's Pittsburgh division. Not bad for an immigrant whose family has struggled at the bottom of the increasingly industrialized textile economy. But Andy's not done yet. In fact, he's just getting started. Unbeknownst to Andy, his move to Pittsburgh is going to put him in exactly the right place at exactly the right time.

As we know, the impending Civil War makes the railroads even more important than they already were. As a staunch Northerner, Andy pulls out all the stops, using the Pennsylvania Railroad to transport all sorts of food, goods, and soldiers for the Union Army. And it doesn't hurt that the Union is going to spend a lot of money in the process. Like John Rockefeller, Andy makes enough money to send soldiers in his place instead of fighting when the draft comes calling in 1864.

He also takes on the title of capitalist as he uses the money earned as superintendent of the Pittsburgh division to invest and create more business in the industrial city. He forms companies based around oil, locomotives, and railway cars. But his most important of these companies comes in 1865. This is when he leaves the Pennsylvania Railroad and forms the Keystone Bridge Company. Here's a little background. Back when he was in Altoona, Andy noted the Pennsylvania Railroad using iron to build bridges.

They were so superior, the short businessman reported that, I saw it would never do to depend further upon wooden bridges for permanent railway structures. Andy wants in on the action and with the help of other investors, including Tom Scott, he forms a company that, in 1865, reorganizes with a nod to the Keystone State nickname of Pennsylvania as the Keystone Bridge Company.

The company sees success building bridges right out the gate, but its most notable bridge starts in 1867. This is the St. Louis or Eads Bridge. With the support and investments of his Pennsylvania friends, J. Edgar Thompson and mentor Tom Scott, who, together, could secure a long-term lease through their railroad, Andy backs the building of this, the first bridge to span the mighty Mississippi River.

Notably, chief engineer Captain James Eads uses pneumatic caissons in the process, which is a first ever in the United States. Though our friends the Roeblings from episode 92 will do this on a larger, scarier scale with their Brooklyn Bridge. But iron isn't quite strong enough. They have to go with something stronger, steel. That's a problem though. No one is currently mass producing steel in the strong, durable quantities needed for bridge construction.

Costs soar as the St. Louis Bridge is delayed and not completed until 1874. All of this is a disaster for investors, but that's not Andy's takeaway. He sees that there's a whole lot of money waiting for whoever can mass produce and manufacture steel. Andy might not be Superman, but this man of steel is ready to meet such a challenge. It's a Saturday in early September, 1875.

We're just outside Pittsburgh in Braddock, Pennsylvania, at the newly opened Edgar Thompson Steel Mill. Let's head inside and check it out. Amid the smoky air, foul smells, and sweltering heat, workers place several tons of pig iron into what can best be described as a gigantic bowl-shaped furnace. The iron melts and is then poured into a Bessemer converter. This pear-shaped, brick-lined steel container is enormous and can hold several tons of molten iron.

At this point, steam-powered blowers shoot hot, pressurized air into the converter, thus causing a chemical reaction that purifies the molten iron and decreases its carbon content. The molten iron has now become molten steel. Workers then tip the suspended Bessemer converter, thereby pouring its contents into long, rectangular molds called ingots.

Immediately, the new steel beams are moved via railroad cars to the nearby rail mill, where they're cut and pressed into the most perfect, durable rails anyone in the railroad business could ever dream of. Don't let the name fool you. The Edgar Thomas Steel Mill may bear the name of a certain Pennsylvania railroad president, but he, like Tom, is just an investor in this million-dollar operation. And he only named it Edgar Thompson to appeal to his former bosses and butter them up for future rail contracts with the Pennsylvania.

This is Carnegie Steel. Andy's had his eye on steel to some degree since the 1860s. He grew truly excited about it, though, when he met the Bessemer converter's inventor, Sir Henry Bessemer, on a trip to England back in 1872. Now, in 1875, his new steelworks operation spans 106 acres. More impressive, though, is its efficiency. Prior to this technology, it would take five days to produce five tons of steel.

Andy's new steel mill does that in 30 minutes. Good God. And with all the railroad and bridge building going on these days, the native Scotsman isn't going to struggle to find customers. He is now the man of steel. But his ascent isn't without its challenges.

Back in 1873, millionaire Andy was sufficiently low on liquid cash that he wasn't willing to throw more good money than he already had at the Texas and Pacific Railroad for the sake of his dear mentor, Tom Scott. And this hurt their relationship. But make no mistake, as the 1870s wear on, Andy's wealth is growing. So much so, we can start to see and examine his inner conflict on what to do with that wealth. The rags to riches tycoon has noble intentions.

Back in 1868, when the now millionaire was only worth $400,000, the equivalent of roughly 75 million today, he concluded that with careful management, he could soon guarantee himself an income of $50,000 per year the rest of his life. That, he concluded, was more than enough.

In a private note to himself, he wrote, "'Beyond this, never earn. "'Make no effort to increase fortune, "'but spend the surplus each year for benevolent purposes.'" While some future critics will assert Andy's later philanthropy will be a purely calculated move to buy much-needed goodwill for reasons we'll get to in a bit, biographer David Nassau points to this document from the Scotsman's earlier untainted years as evidence of his genuine intentions.

And indeed, Andy's philanthropic side starts to show in the 1870s. In his childhood hometown of Dunfermline, Scotland, Andy funds public baths, a recreation center, and later in the decade, a gorgeous public library, which will be completed in the 1880s. Yet, at the same time, the Man of Steel isn't ready to commit to the level of self-imposed limitation in giving that he wrote of in 1868. Instead, he keeps growing and building his empire. But why?

Author and historian Charles Morris attributes this to a trait Andy shares with John Rockefeller, an insatiable drive to dominate, to win. I suppose we could say Andy has a genuine internal conflict between using his capital to keep building or to become the giver of great gifts. And at least for now, as we enter the 1880s, his internal tycoon tends to win out over his internal philanthropist. And big moves and changes come in 1881.

In April, Andy consolidates his various companies as Carnegie Brothers & Company. If the move doesn't give it away, his younger brother Thomas is right by his side. Then, only a month later, Andy experiences a devastating loss. His beloved mentor, Tom Scott, dies. Tom never recovered from the Panic of 1873, the Great Railroad Strike of 1877, or otherwise losing in the power struggle with John D. Rockefeller.

Is the loss of his dear friend and teacher fueling Andy's competitive side? Could be. But whatever the exact motivation, one thing is sure: Andy is ready to make a big move and expand his empire to yet another level. It's now December of 1881. We're in a lavish dining room at New York's Windsor Hotel. Andy and his mother are sitting down for a meal with a newlywed couple, the Fricks. The husband is another self-made millionaire.

About as short but far younger than the Scotsman at the table, this up-and-coming industrialist with a walrus mustache is ill-tempered and has a reputation for being one of the cruelest employers around. This is Henry Clay Frick. Clay, as his friends call him, manages the Frick Coke Company. No, I'm not talking about Coca-Cola, though the former Confederate officer trying to manage his chronic pain caused by old war wounds will invent this drink intended as medicine in the very near future.

In our current context, Coke isn't a soft drink. It's a form of fuel made by placing coal in an airtight oven, then heating it. This process converts the coal into Coke, an inexpensive fuel often used in the refining process that turns iron into steel. Considering Andy's now deep in the steel production game, I think we can see why he wants to talk. And it seems that business-minded Clay Frick has no problem interrupting his honeymoon to have such a conversation.

Dishes and drinks come and go as the chatter turns to haggling. By the end, Andy is agreeing to buy just over 11% of Frick Coke stock. Clay couldn't be happier. This is just the influx of capital he needs. Excellent. Andy rises and proposes a toast to the happy couple. But as glasses meet lips, Andy's mother can't help questioning the deal. The elderly woman turns to her son and asks in her thick Scottish brogue,

- Andre, that's a very good thing for Mr. Frick, but what do we get out of it? - Well, in Andy's mind, the answer is simple. He gets a cheaper supply of Coke than his competitors, which will help him buy them out. But what he doesn't know is he's already getting a business partner that'll bring quite a bit of friction. To say the two men aren't the best pair is an understatement.

By 1883, Andy is the primary shareholder of the Frick Coke Company, and Clay Frick doesn't appreciate the Scotsman having the final say on what happens with his company. The walrus mustachioed fuel titan wants to expand the company that same year by buying two new properties, but Andy doesn't approve. Three years later, in 1886, their relationship hits an even bigger road bump when Frick Coke Company workers go on strike.

Clay Frick has no interest in caving. Andy, on the other hand, encourages Clay to work it out with his employees. This isn't just because he needs coke for his steel factories, though that's true. Andy's also philosophically on board with the idea of unions. The Rags to Riches Immigrant has published a few pieces arguing that when men of intellect lead unions, they are a good thing.

To be clear, I wouldn't call him a radical by any stretch. He's an absolute fan of democracy and capitalism. But Andy believes that capital and labor are complements that should come together and negotiate in good faith. That's what he says this very same year in his Forum Magazine article entitled "The Labor Question." In the end, Andy once again gets his way over Clay's. The striking Frick Coke Company workers soon return with higher wages.

Yet, whatever disagreements they're having, Andy is going to have to turn to Clay all the more. This same year also brings more death to the Scotsman. Pneumonia claims his business partner brother Thomas and his much beloved mother. Thus, desperate for a new efficient partner, Andy turns to Clay. Despite his attitude and demeanor, Andy knows a sharp businessman when he sees one. Yet, despite these painful losses, Andy's future seems bright.

He's gained a reputation as an industrialist who's also a friend of the worker. Business is booming, and the ever-cunning Clay Frick is helping them run things. But some of this is about to come crashing down, in some ways quite literally, amid one of the most deadly single events in the history of the United States. It's a dark cloudy morning, May 31st, 1889, and torrential rainfall is pounding the city of Johnstown, Pennsylvania.

It began as a drizzle the night before, but started coming down hard by 11 p.m. Still, none of this is too unusual for this ironworking city of 30,000. Nestled right by the confluence of the Little Conema and Stony Creek Rivers, which merged to form the larger Conema River, flooding is a part of life in Johnstown. Some are getting a bit more nervous about this current storm, though. As we approach 12 noon, water at the corner of Main and Market Streets is about five feet deep.

Yet, others still consider this business as usual. Townsfolk simply roll up their carpets, put their pianos up on chairs to prevent water damage, and carry on with their day. But even the less concerned are changing their tune by 2 o'clock. Folks start retreating to their homes as all of Johnstown, not just the lower districts, is under at least 2 and as many as 10 feet of water. Unfortunately, their houses won't protect many from what is about to come.

14 miles upstream, the South Fork Dam is about to break. They hear it before they see it. Words fail to do justice, but it's a terrible, indescribable roar. And then it hits. A wall of water surges through the town. Reverend David Beale knows the high ground is their only hope. Family Bible in hand, the white-haired, clean-shaven man of the cloth urges his children and neighbors, the Lloyds, to get up to the second floor. "'Upstairs! "'Upstairs!'

Water's rising around him as he climbs the staircase. He's waist deep in water as he reaches the top. Ignoring the furniture floating around them, the Beals and the Lloyds move up higher still to the attic. David's about to join them when he gets another surprise. A man on a piece of wood crashes through a second story window. The shocked Reverend asks, "Who are you? Where did you come from?" The poor disoriented man croaks out one word, "Woodvale." David connects some dots.

He realizes the flood carried his unexpected visitor more than a mile. Upon reaching the attic, the reverend leads the group in prayer and reciting of scripture. His 12-year-old son looks to him and says, "Surely, Papa, God will take care of us, for we are his children." The Bible-loving boy then recites from the 23rd Psalm, "Yea, though I walk through the valley of the shadow of death, I will fear no evil, for thou art with me.

Thy rod and thy staff, they comfort me. Amen. As his son looks to God, the Reverend looks out an attic window. The debris of hundreds of homes, railroad cars, businesses, and trees are floating in a 16 to 40 foot deep river. Worse, David can only watch in horror as waves carry both the living and the dead. The waters hurl people he knows, friends, and children right past his attic window.

and all he can do is sit helplessly, hoping his house holds together. Words fail to describe the impact of the Johnstown flood on the community and the nation. The 20 million tons of water that came crashing down on this steel-making town swept away far more than buildings and railroads. It ended 2,209 lives. Clara Barton, aka the Angel of the Battlefield, springs into action. You may remember her from episode 63,

This former Civil War nurse is now the 67-year-old founder and president of the American Red Cross. Setting up in a railroad car on site, she directs hundreds of volunteers as they treat the physically and mentally wounded, distribute food and clothing, and even build six two-story temporary shelters for the many whose homes the flood carried away. Such relief efforts after a natural disaster are as unprecedented as the flood's damage.

Clara and her Red Cross volunteers are heroes. But as the days and weeks pass, we don't just have heroes, we have villains. The storm was an act of nature, sure, but shouldn't the dam have held? Though originally built for a canal quickly put out of use by the railroads, the South Fork Fishing and Hunting Club now owns the dam and its accompanying reservoir. The club and its grounds are a getaway for Pittsburgh's super wealthy to fish, boat, and otherwise relax. Have they been responsible stewards though?

Or did the club's negligence just kill over 2,000 Americans and destroy the future of countless thousands more? Turns out, it's the latter. The heavily steelworking community of Johnstown is enraged to realize this club's carelessness has cost them the lives of their friends and loved ones. Andrew Carnegie is in Europe at the time, but horrified upon hearing what's happened. He donates $65,000 to rebuild the library and more.

But even a gift equal to more than a million dollars in 21st century currency won't absolve him. Andy and his partner, Clay Frisk, number among the club's 61 members. This puts a stain on the Scotsman's reputation as an industrialist who hasn't lost touch with his humble beginnings and cares about the people. But if anything can exacerbate this damage to his reputation, it's a labor dispute. Worse, a labor battle, a war.

It's now early 1892, roughly two and a half years since the Johnstown flood. Andy is the largest steel producer in the United States. At his size, he's looking to reorganize again and bring all his businesses, save for at Coke, under a new umbrella, the Carnegie Steel Company. We're talking about an enterprise with a value of 25 million, seeing profits of 5 million per year. Yeah, not too shabby. Meanwhile, Andy is increasingly enjoying being a philanthropist.

In New York alone, he's thrown millions into a glamorous new music hall, as well as teamed up with the famous banker, J. Pierpont Morgan, to create a botanical garden and a massive arena called Madison Square Garden. Okay, these aren't straight up charity, but there are some charitable aspects in there, and he's playing those up. That said, he's also doing some straight up charitable stuff, like building libraries. Oh, does Andy love gifting the public with libraries.

It's part of why many on both sides of the Atlantic would be happy to tell you that Andy Carnegie isn't one of those immoral robber barons. Rather, he's an enlightened industrialist. But it's amazing how fast perceptions can change. About 60 miles west of Johnstown, Pennsylvania, just a few miles outside Pittsburgh, is a town of 10,000 called Homestead.

Andy employs 3,800 workers in his steel mill here, 780 of whom are skilled workers represented by the most powerful labor union in the steel industry, the Amalgamated Association. The Amalgamated's current three-year contract is about up, and its representatives are feeling good about the upcoming negotiations. It's no secret how well Carnegie Steel is doing, and Andy has gone on public record, as we well know, stating his support for collective bargaining.

So surely, they figure, this will go smoothly, but it doesn't. The ascendant chairman under the newly organized company, H. Clay Frick, is digging in his heels on three items. First, he says these employees, whose pay reflects a sliding scale related to the cost of steel, need to accept a new minimum rate of $23 per ton rather than their current $25.

There's no maximum payout, and so, Clay argues, if they are open to the benefits of highs, they can share more of the burden that comes with the lows. Second, this contract's expiration date needs to move from June 30th to December 31st to better align with the calendar year. Finally, a third point.

With another aspect of pay determined by the mill's output, he says the Amalgamated needs to accept a reduction here as well because it's the new technology they've invested in, not the workers, that has significantly increased output. Well, the union reps aren't standing for this. They think this is ridiculous. They're willing to come down to $24 on the sliding scale, but no less. As for changing the date, they know it has nothing to do with the calendar and everything to do with steel sales dropping in the winter.

They aren't moving to the year's weakest point just to give Carnegie Steel the upper hand in the next sit down. And as for output, is Clay kidding? These men work themselves to the bone. They risk their lives in dangerous mills. That's why production's up, not his new tech. So now we have our two perspectives, but here's the real kicker. The fight only relates to 325 of the amalgamated 780 men at the 3,800 employee homestead mill.

In other words, it's a small group. But things get heated fast. Clay has a three-mile fence built to encircle the mill. It has holes that are supposedly for a lookout, but they kind of look more like a port for rifles. Oh, and it's topped with barbed wire. He also erects guard towers equipped with searchlights. What on earth? Well, the thing is, Clay is overreacting because a strike a few months ago at the Edgar Thompson mill has him spooked.

Clay also wants to show Andy he can handle things. The Scotsman is a little checked out right now playing in his native homeland, but let's not mince words. For all his progressive talk, Andy's given Clay pretty much full latitude in these negotiations.

But you know, if you want the skilled and unskilled workers to set aside their differences, which they most definitely have as the first group significantly out-earns the latter, turning the mill into some sort of prison/military outpost is a solid way to do it. The impasse in negotiations holds right through the contract's expiration on June 30th. Meanwhile, Clay orders the mill closed and starts looking to bring in strikebreakers.

In response, an army of skilled and unskilled steel workers seize the mill. But the mustachioed Carnegie chairman isn't backing down. Clay will build his own army. It's just past 2:00 a.m., July 6, 1892. 300 Pinkerton men clamber into two large barges along the Ohio River, just north of Pittsburgh. Between them, they have 300 pistols, 250 Winchester rifles, and more than enough ammo and food to lay siege.

They're soon heading southeast, traveling via the local river systems toward the homestead. But as they move in the dark of night, a labor union sentry notices them. He telegraphs the mill. Watch the river. Steamer with barges left here. An hour and a half later, at 4 a.m., the 300 well-armed Pinkertons arrive. They're greeted by an army of 5,000 steelmen and their families.

Some of the workers take shots at the tugboat as it pulls the barges toward the docks. But Union leader Hugh O'Donnell tries to avoid a firefight. With the boats in shouting distance, he calls out, "On behalf of 5,000 men, I beg of you to leave here at once. We, the workers in these mills, are peaceably inclined. We have not damaged any property and we do not intend to. If you will send a committee with us, we will take them through the works and promise them a safe return to their boats.

but in the name of God and humanity. Don't attempt to enter these works by force. A Pinkerton captain jumps onto the dock. He answers, we were sent here to take possession of this property. We don't wish to shed blood, but if you men don't withdraw, we will mow every one of you down and enter in spite of you. You had better disperse. For land, we will. What follows, God, it's a tale as old as time, isn't it?

It was in a different place, different time and different people. But I've told you this story before, more than once. Further words are exchanged, there's more posturing, and then it happens. Two guns discharge, and yeah, you guessed it, we don't know which side fired first. All we do know is the battle has commenced. Two armies, both of whom have more guns than experienced soldiers, fire at each other until 5:00 PM that evening.

Perhaps we can thank their inexperience for the relatively low death count. Seven strikers and at least three Pinkerton men. The strikers take the Pinkertons as prisoners. This doesn't last long though. Days later, Pennsylvania Governor Robert E. Pattison sends in an 8,000 strong state militia, which seizes the mill and places it under martial law. What a nightmare. Politicians are concerned.

Republicans fear the actions of the Carnegie Steel Company will reflect poorly on the party and come back to bite them in the upcoming election. But politicians of all stripes realize they have a real problem. If workers and corporations are literally forming armies to wage battle against each other, what does that say of the government's power or lack thereof? This must be addressed. That said, the strike fails. Clay Frick plays an odd role in this.

A Russian anarchist attempts to kill Clay only weeks later on July 23rd. And though he fails, it's as union leader Hugh O'Donnell puts it, "The bullet from Berkman's pistol went straight through the heart of the Homestead strike." The mill opens again days later. The Amalgamated is broken. The steel industry won't see a strong union again for 40 years. As for Andy, oh, talk about destroying his enlightened industrialist image.

Sure, he was in the UK the whole time. He is definitely horrified, but to what extent is he or is he not still to blame? True, Clay was the one calling the shots, but it's not like they didn't communicate in the months leading to this. Yet, this is the guy who wrote the essay entitled The Gospel of Wealth just a few years back, saying, "'The man who dies thus rich dies disgraced.' How do we square this? The media has a way. They call it hypocrisy."

The London Financial Observer calls Andy a, quote, Scotch Yankee plutocrat, meandering through Scotland in a foreign hand, opening public libraries while the wretched workmen who sweat themselves in order to supply him with the ways and means for this self-glorification are starving in Pittsburgh. Close quote. Ouch. But he's not getting any more love at home. Some American newspapers recall all he said about the importance of negotiating with labor and call him a liar.

Are the papers right? I'll let you think that over. It's going to take a lot of philanthropy to repair his reputation. We won't detail that, but in brief, Andy will give mightily after J. Pierre Pop Morgan makes him the richest man in the world through a $480 million buyout in 1901. In the following decade, Andy will give away 90% of his wealth with a special focus on supporting education and peace.

His Carnegie Corporation will continue that work right into the 21st century. And you know, just to come full circle, the former richest man in the world, John D. Rockefeller, will give too. He'll take more of a science and health focus though. And yes, the Rockefeller Foundation will continue on as well. That's more than we can say for his company, Standard Oil. The US Supreme Court will rule it's an illegal monopoly of petroleum and break it up in 1911.

And to the extent that they and other industrialists/tycoons/robber barons give in sincerity or just for good PR, well, I guess you'll just have to decide for yourself where you come down on that endless debate. But here's something that isn't debatable. The Gilded Age is seeing major conflict between capital and labor. The fact that the Homestead Strike was deadly doesn't even make it an outlier.

And with these economic interests at each other's throats, to what extent is their fight becoming a driving force in national politics? We'll get to all of this next time as we witness yet another massive strike and another contest for the White House. HTVS is supported by fans at patreon.com/historythatdoesntsuck. My gratitude to Kind Souls for providing funding to help us keep going. Thank you. And special thanks to our patrons whose monthly gift puts them in producer status.

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