Carnegie Steel Company

Strange as it may seem, one of the most significant deeds of political violence occurred here in America in connection with the Homestead Strike of 1892.

During that memorable time, the Carnegie Steel Company organized a conspiracy to crush the Amalgamated Association of Iron and Steel Workers.

Henry Clay Frick, then chairman of the company, was entrusted with that democratic task.

He lost no time in carrying out the policy of breaking the union, the policy which he had so successfully practiced during his reign of terror in the coke regions.

Look at Homestead in Pennsylvania.

In 1892, the Carnegie Steel Company's attempt to break a steel workers' union sparked an armed confrontation between striking workers and hundreds of Pinkerton agents.

People got killed.

The state militia eventually occupied the town.

And Carnegie likes Frick and winds up bringing him in to run some Carnegie operations.

And eventually, Frick becomes the head, basically the guy running Carnegie Steel.

And there's this letter that Carnegie writes to Frick at some point to congratulate him on his ascent.

And it really speaks to their relationship at this point.

This is not minutes.

This is a thing that is playing out over hours, and word of it is getting out.

And outside town, people want Frick, the guy who's running Carnegie Steel, they want Frick to talk to union representatives, to negotiate, essentially.

But Frick

What they own, like all the materials or, you know, and, and the example I use this is, like, the, the, um, Andrew Carnegie.

His big thing was own the supply chain, and so the extreme example of Carnegie Steel owned the whole supply chain, and therefore they owned the whole steel industry.

So that's like a super mega large business.

[laughs] So the opposite of that is what we're talking about here.

He went from railroads to bridges to iron to steel.

And in 1901, he sold Carnegie Steel for $480 million, making him the richest man on the planet.

And then he gave it all away.

He wrote that the man who dies rich dies disgraced.

Carnegie's decentralized management allowed operators to optimize plant efficiency while maintaining flexibility.

When JP Morgan acquired his firm the scale and cost advantage made Carnegie Steel irresistible to consolidate into what would become US Steel.

Then we have Cornelius Vanderbilt.

His pivot from water transport to rail is a textbook case of reallocating capital towards superior economics By cannibalizing his shipping profits he positioned himself on the infrastructure that every economy increasingly depended upon.

Standard Oil's pipelines taught us about supply chain control.

Carnegie Steel taught us about price setting through cost leadership.

Vanderbilt taught us to shift when the market changes.

And Ford showed us mass production is a catalyst for democratizing demand.

charles jp morgan i've heard

all those well not the investment bank jp morgan but the actual guy the actual jp morgan and before it was just the name of an investment bank he buys a company called carnegie steel company from a guy called andrew carnegie for 480 million dollars that's in 1901 so that would be hundreds of billions of pounds in today's money He makes Andrew Carnegie effectively the richest man alive.

He doesn't spend a penny of his own money, really.

He prints a mountain of what's called gold-backed bonds.