THE SPIRIT OF AMERICA
March 24, 2005 post
CAN THE SPIRIT OF OLD ANDY CARNEGIE GUIDE US TODAY?
Can the Spirit of Old Andy Carnegie Guide Us Today?
The example of Andrew Carnegie and his powerful Gospel of Wealth come to mind as guide and inspiration for us today as we address myriad social issues -- and especially the rebuilding of our American communities, urban, suburban and rural. He was a powerful example of the Spirit of America at work, helping to build this great nation in the early years of the last century.
Can we today, stewards of the American Spirit of "Can-do," apply our individual and collective wealth to address social and economic justice issues? Read on...
One hundred years ago, Andrew Carnegie was the wealthiest individual in America. His Carnegie Steel Corporation (the basis for the new US Steel Corporation in 1900) was the first billion-dollar company in the US. (Note that a 2005 dollar is roughly 15 to 20 times the estimated value of $1.00 in 1900!) After the sale of his company, Andrew Carnegie set out to give virtually all of his money away to worthy causes. He believed it was harmful to heirs and society in general for the rich to leave too much money behind when they departed this Good Earth. The wealthy were only "stewards" of their money, he wrote, and their wealth should be given to worthy causes rather than "collected" or passed on to descendants. Better still, the money should be given while the donors were still alive.
Carnegie was born to a family of modest means in Dumferline, Scotland, and came to the US in summer 1848 as a 13-year old to live with Pittsburgh relatives. Social and political revolutions were sweeping the Old World that year. There was great social unrest. Millions of people were displaced by political developments and rapid, fundamental changes in business. His father was a hand-loom operator creating fine linens; the coming of the Industrial Age saw rapid replacement of most traditional hand-weavers with steam-powered machine looms. The "Highland Clearances" that resulted sent thousands of rural families emigrating from Scotland, many to the United States. The Carnegie family lost everything in the Old World. A fresh start was needed.
They booked passage to New York and traveled for days by barge along the Erie Canal to the Great Lakes and then down the rivers to Pittsburgh, a small city destined to be America's steel capital.
He began his career in the US as a messenger and telegraph operator. Early in his adult life - long before he was wealthy - Carnegie created his "Gospel of Wealth," which guided his philanthropy and social investments all through the following years and especially during the time when he gained (and then gave away) immense wealth. (His original title for two essays outlining the approach for other rich men published in 1889 in the North American Review was "Wealth" but it quickly was dubbed a "gospel" by others.)
When he sold his steel businesses in 1900, he was worth at least $500 million (more than $10+ billion in 2005 dollars) and tried to give virtually all of it away before his death (in 1919). (This was in the time before income taxes.) He almost didn't succeed! Identifying appropriate recipients took time and was hard work, he noted. There was a balance of $350 million (1920 dollars, x 10 for 2005 approximate value) that was finally bequeathed to great "Carnegie institutions" that helped to create today's modern medicine, public health systems, college and university systems, and other great social organizations that have benefited tens of millions of people.
So what was this Gospel? His first charitable contributions were for public baths (in the US, England and Scotland) for the poor and impoverished. Carnegie quickly moved on to begin directing money to social causes according to the gospel created while in his thirties. He funded:
Irvin Henderson, a North Carolinian who is Chair of the National Community Reinvestment Coalition, notes that he was familiar with the Carnegie legacy, but on looking back now at the broad contributions of his giving, "it is awesome to think about how many lives he still touches."
Carnegie's money created important institutions that live on today, providing benefits to America: Among these, Carnegie Mellon University in Pittsburgh, Carnegie Hall in New York City, the Carnegie Corporations of New York and Washington - and thousands of Carnegie libraries.
Carnegie's giving often had strings attached. Libraries and hospitals would be built as a capital investment; there was no support / operations funding. He tied hospital founding to specific reforms in medical education (especially to establish new med schools that taught scientific methods and the latest medical advances from Europe - not quackery permitted). Carnegie dollars reformed medicine and medical training in the US.
Same approach taken with community libraries - almost 2,000 were built in the US -- many in small towns as well as in cities. The community had to agree to: (1) place the library in a central location to serve the greatest number of people; (2) create a permanent system of library governance; (3) put at least 3,500 books in the collection (many "Great Books" were prescribed by Carnegie as a foundation to build on); (4) agree to permanently support the library. He had a systematic taxing formula: the community's support had to be at least 10 percent of the capital investment (his contribution was for building a handsome library), to be assessed $2.00 per capita for cities of 25,000 to 100,000 - this would yield at least $200,000 annually, before Carnegie would make the initial construction investment (times 10 today).
The community also had to put a legend over the door of the dedicated "Carnegie Library" - "Let there be light!"
Why these requirements? His gospel articulated more than a century ago included: "The community must preserve wealth (his own, and the investments of wealth such as the library or concert hall or bath) but not destroy society's own responsibility for individual initiative."
Dr. Drew Bogner, President of New York's Molloy College, says he thinks about the impact of these libraries on young boys and girls. "How many youngsters came into one of the Carnegie Libraries in their town and had a world opened to them through books, we might ask. How many pursued a life of learning and became doctors, or some other professional, perhaps college professors?" The effects of the library giving are incalculable, in Dr. Bogner's view. His own early years were in Kansas where there were Carnegie Libraries in various towns.
Carnegie's prodding of other so-called "Robber Barons" of the era created the momentum for launching large foundations - Rockefeller and Ford were prime examples. John D. Rockefeller, the founder of the Standard Oil fortunes and the family dynasty bearing his name, and Andrew Carnegie were in a race to give away money; the media regularly reported the scorecard; AC won on dollars granted the race at the time of his death. John Rockefeller and his sons and grandsons continued their philanthropy throughout the 20th Century. (The media "muckrakers" dubbed these early capitalists "robber barons"; it is worth noting that Carnegie, Rockefeller, Vanderbilt, and others of great wealth were born poor or into families of modest means and none were "barons" as defined in the system of royalty of the Old World.)
Carnegie left $125 million in 1919 to the "last great Super Trust" to be founded, the Carnegie Corporation, which continues to direct investment to social causes. (See "Andrew Carnegie," the masterful biography by Joseph Frazier Wall.)
His approach was "to advance simple solutions" easy explainable (and actionable) to a nation of new Populists and those enlightened souls who in the late 1800s / early 1900s embraced Popular Causes. There was a Red and Blue ideological and political divide even back then - usually based on wealth and elitism, but also geographic - and Carnegie was a traitor in the eyes of some to his "class" of the wealthiest Americans and especially the wealthy ("upper classes" in the British Isles. But he pointed out that he was an immigrant washed up on our shores, not a Blue Blood.
Carnegie continues to amaze as one looks back at his giving and seed investments.
The Presidents of the United States had no pension when leaving office; Carnegie provided President William Howard Taft with his pension, prodding the US government into providing pensions for future Chief Executive Officer of the United States.
When he saw very old men on the campus of Cornell University and asked what they were doing (wandering toward class in black capes), he was told that because there was no pension system for old professors their younger colleagues made room for them to teach part-time to survive. (In their working careers they were poorly paid, some having to generate income from fees paid by students attending their courses!) Carnegie quickly created what is today the large TIAA / CREF pension complex (with his own money). (The "Carnegie Teachers Pension Fund" was the forerunner of today's fund, with $10 million deposited to begin distributing pensions to retired professors.)
Looking into both current medical practice and the education of tomorrow's doctors at the start of the 20th Century, he was appalled at what was then called medical education. There were literally no standardized requirements to get into medical school, including for most schools no college degree needed, many were privately run as business ventures, teacher salaries were paid by students through fees levied for course work, and little modern scientific methods were applied.
He financed the "Flexner Report," published by a panel of the day's leading medical and healthcare experts, and the report created the momentum needed to reform American medicine and especially medical education for future doctors. Infectious diseases would be tackled by the scientific method, and many childhood killers eradicated. This report quickly led to adoption of higher standards, founding of outstanding teaching and research medical schools and revolutionized medicine in the US, which had badly lagged Europe's system. He put $50 million (x 10 today) into medical education over the last 20 years of his life, including significant funding for minority medical training.
He was a major benefactor of traditionally black colleges, especially Hampton and Tuskegee. In his lifetime he donated more than $100 million (x10) through the "Carnegie Foundation for Advancement of Teaching" to at least 52 institutions.
Carnegie's continued funding of higher education was a major catalyst for reforming professions and establishing accreditation guidelines. These included creating standards for colleges with legal, engineering and general graduate studies school; America's leading professions were reformed and brought up to acceptable standards. Carnegie withheld money from major schools - Harvard, Yale - and sought out schools where he could assure "there would be no discrimination on the basis of religion ("sectarianism"), race, creed, or "ethics." Some of his institutions installed Jews in posts of higher education - this for the first time, as the American Jewish population was growing through immigration from Poland and eastern European nations.
Carnegie put forth sound monetary ideas in a 1908 series of essays that directly led to the creation of the Federal Reserve System in 1912. A stable US currency emerged soon after. (No, Chairman Alan Greenspan was not around at the founding in 1912.)
He created a "model for helping the poor" in 1911 that many states and municipalities followed.
His motto (and the title of a best selling book authored by him) was "Triumphant Democracy," which is the system in his view that provided his great wealth. America was the land of opportunity for the poor lad from Scotland. (His first personal investment was for 10 shares of Adams Express Co.; when he got his dividend check he proclaimed: "Eureka! Here is the goose that lays the golden eggs!") He was a rational thinker and writer. His first ambition was to be a journalist; later in his life he authored a shelf of books on politics, social forces, business and of course, autobiography. His friend, Nelson Doubleday, published these tomes.
His "rational, systematic principles of giving away personal wealth" worked well in these United States of America a century ago. And through the institutions that he founded and funded, these principles continue to "give" and "build" and "inspire."
There were dark spots in his career. A worker protest turned bloody in Homestead, Pennsylvania, and Carnegie's company hired goons to attack the workers; many died. Carnegie was on his annual holiday in Scotland and claimed to have had little involvement in the affair. Some biographers attribute his passion for giving away wealth a decade later to guilt over Homestead. Carnegie evidently never expressed sentiments of such guilt, but he did voice regrets.
Andrew Carnegie died as World War One - the Great War - ended and peace talks were underway in Europe. He had worked for peace and international arbitration of disputes and saw the conflagration that consumed millions of lives and destroyed many parts of Old Europe as a personal failure. He is said to have lost his zest for life during the four years of the war.
Carnegie was buried in Old Sleepy Hollow Cemetery in Tarrytown Village (renamed as Sleepy Hollow) on the Hudson River in New York State. As a boy, en route to new beginnings in Pittsburgh he had passed within hailing distance of the old Dutch cemetery on his way up the river en route to Albany and then west to Buffalo. A few years after he died, a renowned labor leader - the legendary Samuel Gompers - was laid to rest in nearby. Here they repose in eternity...the capitalist-turned-benefactor and the Jewish working class visionary who led the way for American organized labor! (Early in his political career Assemblyman Theodore Roosevelt was tutored by Gompers on the awful conditions under which immigrants worked and lived in New York City. This awakened the social conscience of the future President of the United States, "TR.")
Carnegie was an activist giver. He wanted his money to make a difference. He wanted individuals and communities to be responsible for continuing the projects he started. There were usually strings attached that created grassroots and community as well as individual responsibility. He saw the major problems of his day that he thought threatened our democracy, and addressed them himself as well as prodded others to open their wallets and put shoulder to the wheel.
And so we can take our inspiration from Carnegie's example - we can help individual people, families and communities of low-income, and help larger communities-in-need find their golden eggs, their rightful portion of wealth, to assure their involvement in Carnegie's "Triumphant Democracy." He always signed off, "Onward and Upward." And frequently added, "So goes the nation." Amen.
Copyright H.L.Boerner, 2005, All Rights Reserved.
Please credit author if republished.
"Andrew Carnegie, " Joseph Frazier Wall, University of Pittsburgh Press (1970 - 1989)
Andrew Carnegie's own books, published by Doubleday & Co:
Copyright 2005 H.L. Boerner. All rights reserved.