How famous scot Andrew Carnegie became the richest man in the world

He had been born at Dunfermline in 1835 and emigrated with his parents to the US in 1848. For everything else in his career he had depended on himself, and this was the advice about getting on in life that he regularly gave to others.

The landscape of western Pennsylvania mixed heavy industry with forested hills and tumbling rivers, so it bore some resemblance to Scotland. Carnegie liked these backwoods so much that, with a circle of about 50 friends and colleagues, he clubbed together to buy a large landholding they could use for private hunting and fishing.

It had a reservoir and dam, cottages and a clubhouse. These were careful capitalists who never spent more than they needed to on their pleasures. This time it turned out not to be enough.

The winter of 1880-1 brought a freak deep freeze, with masses of snow drifting over this stretch of the Allegheny Mountains late on into the year. It was still lying there on the weekend of May 31, which saw further heavy rain sweep in from the west.  The dam, 72ft high and 931ft long, did not remain intact beyond an afternoon of this hellish tempest. It collapsed and sent 15 million tons of water hurtling down the gorges in the woods – the same as the normal flow rate of the Mississippi River. It took 65 minutes for the reservoir to run dry.

Hamlets and farms were swept away without trace. At the foot of the valley stood the industrial settlement of Johnstown. Here, more than 2000 people died. It was the largest-ever loss of civilian life in the history of the US up to that time.

Carnegie and his colleagues formed a relief committee to help the survivors. They also entered into an agreement among themselves never to speak publicly about the club or the flood. This was all private property and no concern of anybody else. But Carnegie did build Johnstown a new public library as a thankful consolation.

The gift achieved for him what he wanted, by fending off all uncomfortable inquiries.  The club was never held legally responsible for the disaster.  A precedent was set that saved later capitalists a lot of money. Victims, it seemed, could look after themselves, if still alive.

The fishers and hunters were working according to the principle of strict liability, which on a far grander scale was a godsend in a huge nation of headlong development. It was bound to be expensive in human lives as well as in material resources, and one way to cover both kinds of cost was simply to maximise the rate of progress.

That was a principle Carnegie seemed to believe in, as he had shown while his personal career was taking shape. He had first started work as a telegrapher and by the 1860s owned investments in railways, sleeping cars, bridges and oil derricks. He built further wealth as a bond salesman, raising money for American enterprise in Europe.  With his Carnegie Steel Company, he in effect re-founded the city of Pittsburgh, a historic imperial outpost. He sold the plant on to JP Morgan for $303 million in 1901, when it formed the basis of the US Steel Corporation. Carnegie now surpassed John D Rockefeller as the richest American of all.

Carnegie had not by his own lights been doing anything immoral, yet his code of business ethics was different from what prevailed in later times. For instance, the Homestead Strike was a bloody confrontation lasting 143 days in 1892, centred on Carnegie Steel’s main plant in Pennsylvania, where it was in frequent conflict with the local trade unions.

When the unions and the company failed to agree on new wage rates, the management locked the men out. From the workers’ point of view a lockout that was enforced from one side could not amount to a strike by the other.  The management was in the wrong and the workers were in the right to stick up for themselves, while the duty of the state government was to support them. Unfortunately for the workers, the state government did not take the same view. It went to law against the union and brought in thousands of strikebreakers to operate the steel mills.

This was a victory for Carnegie. His company successfully resumed operations by offering the jobs of the Homestead workforce to immigrant employees who had no union. The governor of Pennsylvania co-operated and ordered out two brigades of the state militia to keep the strikers under control.

Carnegie helped to make sure the US was never going to turn into an economy dominated by its organised workforce. At best there might be a social consensus achieved by bosses like him. Anything short of that would be a victory for militant pressure, and therefore unacceptable.  In the course of time, the whole of US industry came close to standing on Carnegie’s principles. But he also set out to show there was more to this than capitalist dictatorship. According to him the social duties of a wealthy industrialist should comprise two parts.  The first was the gathering and accumulation of wealth. The second was for its subsequent distribution to benevolent causes. Philanthropy was the key to making the capitalist system good for all.

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This train of thought was what inspired Carnegie in his last years. After his official retiral from his own companies in 1900, he talked less about the sharp business acumen that had enabled him to make the biggest fortune in the US.  Instead he stressed the public spirit he now wanted to show in pursuing philanthropic projects. He became the western world’s greatest advocate for turning enterprise to pay for social schemes hard to realise in any other way. This was the path to public good, social advancement and educational progress.

It was lucky for Scotland that Carnegie had been born here and late in life spent as much time as he could at his own Skibo Castle in Sutherland and endowed some of his greatest projects on his native soil.

He gave $10m to establish the Carnegie Trust for the Universities of Scotland, which every year provides them with a lavish addition to their income. The aim is to improve the opportunities and extend the scope for scientific research by deserving and qualified young people.

An even wider philanthropic initiative has been to establish public libraries all over the UK, the US, Canada and other English-speaking countries.

Not all the effort has been on a gigantic scale, though. The Carnegie Dunfermline Trust has focused on the town where the multi-millionaire was born.

In addition to a library, it acquired the private estate that became Pittencrieff Park and opened it to all the townsfolk. After a century, we can say it still has some way to go before converting them to capitalism.