During the Civil War the price of iron went up to something like $130 per ton. Even at that figure it was not so much a question of money as of delivery. The railway lines of America were fast becoming dangerous for want of new rails, and this state of affairs led me to organize in 1864 a rail-making concern at Pittsburgh. There was no difficulty in obtaining partners and capital, and the Superior Rail Mill and Blast Furnaces were built.
In like manner the demand for locomotives was very great, and with Mr. Thomas N. Miller[24] I organized in 1866 the Pittsburgh Locomotive Works, which has been a prosperous and creditable concern--locomotives made there having obtained an enviable reputation throughout the United States. It sounds like a fairy tale to-day to record that in 1906 the one-hundred-dollar shares of this company sold for three thousand dollars--that is, thirty dollars for one. Large annual dividends had been paid regularly and the company had been very successful--sufficient proof of the policy: "Make nothing but the very best." We never did.
[Footnote 24: Mr. Carnegie had previous to this--as early as 1861--been associated with Mr. Miller in the Sun City Forge Company, doing a small iron business.]
When at Altoona I had seen in the Pennsylvania Railroad Company's works the first small bridge built of iron. It proved a success. I saw that it would never do to depend further upon wooden bridges for permanent railway structures. An important bridge on the Pennsylvania Railroad had recently burned and the traffic had been obstructed for eight days. Iron was the thing. I proposed to H.J. Linville, who had designed the iron bridge, and to John L. Piper and his partner, Mr. Schiffler, who had charge of bridges on the Pennsylvania line, that they should come to Pittsburgh and I would organize a company to build iron bridges. It was the first company of its kind. I asked my friend, Mr. Scott, of the Pennsylvania Railroad, to go with us in the venture, which he did. Each of us paid for a one fifth interest, or $1250. My share I borrowed from the bank. Looking back at it now the sum seemed very small, but "tall oaks from little acorns grow."
In this way was organized in 1862 the firm of Piper and Schiffler which was merged into the Keystone Bridge Company in 1863--a name which I remember I was proud of having thought of as being most appropriate for a bridge-building concern in the State of Pennsylvania, the Keystone State. From this beginning iron bridges came generally into use in America, indeed, in the world at large so far as I know. My letters to iron manufacturers in Pittsburgh were sufficient to insure the new company credit. Small wooden shops were erected and several bridge structures were undertaken. Cast-iron was the principal material used, but so well were the bridges built that some made at that day and since strengthened for heavier traffic, still remain in use upon various lines.
The question of bridging the Ohio River at Steubenville came up, and we were asked whether we would undertake to build a railway bridge with a span of three hundred feet over the channel. It seems ridiculous at the present day to think of the serious doubts entertained about our ability to do this; but it must be remembered this was before the days of steel and almost before the use of wrought-iron in America. The top cords and supports were all of cast-iron. I urged my partners to try it anyhow, and we finally closed a contract, but I remember well when President Jewett[25] of the railway company visited the works and cast his eyes upon the piles of heavy cast-iron lying about, which were parts of the forthcoming bridge, that he turned to me and said:
"I don't believe these heavy castings can be made to stand up and carry themselves, much less carry a train across the Ohio River."
[Footnote 25: Thomas L. Jewett, President of the Panhandle.]
The Judge, however, lived to believe differently. The bridge remained until recently, though strengthened to carry heavier traffic. We expected to make quite a sum by this first important undertaking, but owing to the inflation of the currency, which occurred before the work was finished, our margin of profit was almost swallowed up. It is an evidence of the fairness of President Edgar Thomson, of the Pennsylvania, that, upon learning the facts of the case, he allowed an extra sum to secure us from loss. The subsequent position of affairs, he said, was not contemplated by either party when the contract was made. A great and a good man was Edgar Thomson, a close bargainer for the Pennsylvania Railroad, but ever mindful of the fact that the spirit of the law was above the letter.
In Linville, Piper, and Schiffler, we had the best talent of that day--Linville an engineer, Piper a hustling, active mechanic, and Schiffler sure and steady. Colonel Piper was an exceptional man. I heard President Thomson of the Pennsylvania once say he would rather have him at a burnt bridge than all the engineering corps. There was one subject upon which the Colonel displayed great weakness (fortunately for us) and that was the horse. Whenever a business discussion became too warm, and the Colonel showed signs of temper, which was not seldom, it was a sure cure to introduce that subject. Everything else would pass from his mind; he became absorbed in the fascinating topic of horseflesh. If he had overworked himself, and we wished to get him to take a holiday, we sent him to Kentucky to look after a horse or two that one or the other of us was desirous of obtaining, and for the selection of which we would trust no one but himself. But his craze for horses sometimes brought him into serious difficulties. He made his appearance at the office one day with one half of his face as black as mud could make it, his clothes torn, and his hat missing, but still holding the whip in one hand. He explained that he had attempted to drive a fast Kentucky colt; one of the reins had broken and he had lost his "steerage-way," as he expressed it.
He was a grand fellow, "Pipe" as we called him, and when he took a fancy to a person, as he did to me, he was for and with him always. In later days when I removed to New York he transferred his affections to my brother, whom he invariably called Thomas, instead of Tom. High as I stood in his favor, my brother afterwards stood higher. He fairly worshiped him, and anything that Tom said was law and gospel. He was exceedingly jealous of our other establishments, in which he was not directly interested, such as our mills which supplied the Keystone Works with iron. Many a dispute arose between the mill managers and the Colonel as to quality, price, and so forth. On one occasion he came to my brother to complain that a bargain which he had made for the supply of iron for a year had not been copied correctly. The prices were "net," and nothing had been said about "net" when the bargain was made. He wanted to know just what that word "net" meant.
"Well, Colonel," said my brother, "it means that nothing more is to be added."
"All right, Thomas," said the Colonel, entirely satisfied.
There is much in the way one puts things. "Nothing to be deducted" might have caused a dispute.
[Illustration: THOMAS MORRISON CARNEGIE]
He was made furious one day by Bradstreet's volume which gives the standing of business concerns. Never having seen such a book before, he was naturally anxious to see what rating his concern had. When he read that the Keystone Bridge Works were "BC," which meant "Bad Credit," it was with difficulty he was restrained from going to see our lawyers to have a suit brought against the publishers. Tom, however, explained to him that the Keystone Bridge Works were in bad credit because they never borrowed anything, and he was pacified. No debt was one of the Colonel's hobbies. Once, when I was leaving for Europe, when many firms were hard up and some failing around us, he said to me:
"The sheriff can't get us when you are gone if I don't sign any notes, can he?"
"No," I said, "he can't."
"All right, we'll be here when you come back."
Talking of the Colonel reminds me of another unusual character with whom we were brought in contact in these bridge-building days. This was Captain Eads, of St. Louis,[26] an original genius _minus_ scientific knowledge to guide his erratic ideas of things mechanical. He was seemingly one of those who wished to have everything done upon his own original plans. That a thing had been done in one way before was sufficient to cause its rejection. When his plans for the St. Louis Bridge were presented to us, I handed them to the one man in the United States who knew the subject best--our Mr. Linville. He came to me in great concern, saying:
"The bridge if built upon these plans will not stand up; it will not carry its own weight."
"Well," I said, "Captain Eads will come to see you and in talking over matters explain this to him gently, get it into proper shape, lead him into the straight path and say nothing about it to others."
[Footnote 26: Captain James B. Eads, afterward famous for his jetty system in the Mississippi River.]
This was successfully accomplished; but in the construction of the bridge poor Piper was totally unable to comply with the extraordinary requirements of the Captain. At first he was so delighted with having received the largest contract that had yet been let that he was all graciousness to Captain Eads. It was not even "Captain" at first, but "'Colonel' Eads, how do you do? Delighted to see you." By and by matters became a little complicated. We noticed that the greeting became less cordial, but still it was "Good-morning, Captain Eads." This fell till we were surprised to hear "Pipe" talking of "Mr. Eads." Before the troubles were over, the "Colonel" had fallen to "Jim Eads," and to tell the truth, long before the work was out of the shops, "Jim" was now and then preceded by a big "D." A man may be possessed of great ability, and be a charming, interesting character, as Captain Eads undoubtedly was, and yet not be able to construct the first bridge of five hundred feet span over the Mississippi River,[27] without availing himself of the scientific knowledge and practical experience of others.
[Footnote 27: The span was 515 feet, and at that time considered the finest metal arch in the world.]
When the work was finished, I had the Colonel with me in St. Louis for some days protecting the bridge against a threatened attempt on the part of others to take possession of it before we obtained full payment. When the Colonel had taken up the planks at both ends, and organized a plan of relieving the men who stood guard, he became homesick and exceedingly anxious to return to Pittsburgh. He had determined to take the night train and I was at a loss to know how to keep him with me until I thought of his one vulnerable point. I told him, during the day, how anxious I was to obtain a pair of horses for my sister. I wished to make her a present of a span, and I had heard that St. Louis was a noted place for them. Had he seen anything superb?
The bait took. He launched forth into a description of several spans of horses he had seen and stables he had visited. I asked him if he could possibly stay over and select the horses. I knew very well that he would wish to see them and drive them many times which would keep him busy. It happened just as I expected. He purchased a splendid pair, but then another difficulty occurred about transporting them to Pittsburgh. He would not trust them by rail and no suitable boat was to leave for several days. Providence was on my side evidently. Nothing on earth would induce that man to leave the city until he saw those horses fairly started and it was an even wager whether he would not insist upon going up on the steamer with them himself. We held the bridge. "Pipe" made a splendid Horatius. He was one of the best men and one of the most valuable partners I ever was favored with, and richly deserved the rewards which he did so much to secure.
The Keystone Bridge Works have always been a source of satisfaction to me. Almost every concern that had undertaken to erect iron bridges in America had failed. Many of the structures themselves had fallen and some of the worst railway disasters in America had been caused in that way. Some of the bridges had given way under wind pressure but nothing has ever happened to a Keystone bridge, and some of them have stood where the wind was not tempered. There has been no luck about it. We used only the best material and enough of it, making our own iron and later our own steel. We were our own severest inspectors, and would build a safe structure or none at all. When asked to build a bridge which we knew to be of insufficient strength or of unscientific design, we resolutely declined. Any piece of work bearing the stamp of the Keystone Bridge Works (and there are few States in the Union where such are not to be found) we were prepared to underwrite. We were as proud of our bridges as Carlyle was of the bridge his father built across the Annan. "An honest brig," as the great son rightly said.
This policy is the true secret of success. Uphill work it will be for a few years until your work is proven, but after that it is smooth sailing. Instead of objecting to inspectors they should be welcomed by all manufacturing establishments. A high standard of excellence is easily maintained, and men are educated in the effort to reach excellence. I have never known a concern to make a decided success that did not do good, honest work, and even in these days of the fiercest competition, when everything would seem to be matter of price, there lies still at the root of great business success the very much more important factor of quality. The effect of attention to quality, upon every man in the service, from the president of the concern down to the humblest laborer, cannot be overestimated. And bearing on the same question, clean, fine workshops and tools, well-kept yards and surroundings are of much greater importance than is usually supposed.
I was very much pleased to hear a remark, made by one of the prominent bankers who visited the Edgar Thomson Works during a Bankers Convention held at Pittsburgh. He was one of a party of some hundreds of delegates, and after they had passed through the works he said to our manager:
"Somebody appears to belong to these works."
He put his finger there upon one of the secrets of success. They did belong to somebody. The president of an important manufacturing work once boasted to me that their men had chased away the first inspector who had ventured to appear among them, and that they had never been troubled with another since. This was said as a matter of sincere congratulation, but I thought to myself: "This concern will never stand the strain of competition; it is bound to fail when hard times come." The result proved the correctness of my belief. The surest foundation of a manufacturing concern is quality. After that, and a long way after, comes cost.
I gave a great deal of personal attention for some years to the affairs of the Keystone Bridge Works, and when important contracts were involved often went myself to meet the parties. On one such occasion in 1868, I visited Dubuque, Iowa, with our engineer, Walter Katte. We were competing for the building of the most important railway bridge that had been built up to that time, a bridge across the wide Mississippi at Dubuque, to span which was considered a great undertaking. We found the river frozen and crossed it upon a sleigh drawn by four horses.
That visit proved how much success turns upon trifles. We found we were not the lowest bidder. Our chief rival was a bridge-building concern in Chicago to which the board had decided to award the contract. I lingered and talked with some of the directors. They were delightfully ignorant of the merits of cast- and wrought-iron. We had always made the upper cord of the bridge of the latter, while our rivals' was made of cast-iron. This furnished my text. I pictured the result of a steamer striking against the one and against the other. In the case of the wrought-iron cord it would probably only bend; in the case of the cast-iron it would certainly break and down would come the bridge. One of the directors, the well-known Perry Smith, was fortunately able to enforce my argument, by stating to the board that what I said was undoubtedly the case about cast-iron. The other night he had run his buggy in the dark against a lamp-post which was of cast-iron and the lamp-post had broken to pieces. Am I to be censured if I had little difficulty here in recognizing something akin to the hand of Providence, with Perry Smith the manifest agent?
"Ah, gentlemen," I said, "there is the point. A little more money and you could have had the indestructible wrought-iron and your bridge would stand against any steamboat. We never have built and we never will build a cheap bridge. Ours don't fall."
There was a pause; then the president of the bridge company, Mr. Allison, the great Senator, asked if I would excuse them for a few moments. I retired. Soon they recalled me and offered the contract, provided we took the lower price, which was only a few thousand dollars less. I agreed to the concession. That cast-iron lamp-post so opportunely smashed gave us one of our most profitable contracts and, what is more, obtained for us the reputation of having taken the Dubuque bridge against all competitors. It also laid the foundation for me of a lifelong, unbroken friendship with one of America's best and most valuable public men, Senator Allison.
The moral of that story lies on the surface. If you want a contract, be on the spot when it is let. A smashed lamp-post or something equally unthought of may secure the prize if the bidder be on hand. And if possible stay on hand until you can take the written contract home in your pocket. This we did at Dubuque, although it was suggested we could leave and it would be sent after us to execute. We preferred to remain, being anxious to see more of the charms of Dubuque.
After building the Steubenville Bridge, it became a necessity for the Baltimore and Ohio Railroad Company to build bridges across the Ohio River at Parkersburg and Wheeling, to prevent their great rival, the Pennsylvania Railroad Company, from possessing a decided advantage. The days of ferryboats were then fast passing away. It was in connection with the contracts for these bridges that I had the pleasure of making the acquaintance of a man, then of great position, Mr. Garrett, president of the Baltimore and Ohio.
We were most anxious to secure both bridges and all the approaches to them, but I found Mr. Garrett decidedly of the opinion that we were quite unable to do so much work in the time specified. He wished to build the approaches and the short spans in his own shops, and asked me if we would permit him to use our patents. I replied that we would feel highly honored by the Baltimore and Ohio doing so. The stamp of approval of the Baltimore and Ohio Railroad would be worth ten times the patent fees. He could use all, and everything, we had.
There was no doubt as to the favorable impression that made upon the great railway magnate. He was much pleased and, to my utter surprise, took me into his private room and opened up a frank conversation upon matters in general. He touched especially upon his quarrels with the Pennsylvania Railroad people, with Mr. Thomson and Mr. Scott, the president and vice-president, whom he knew to be my special friends. This led me to say that I had passed through Philadelphia on my way to see him and had been asked by Mr. Scott where I was going.
"I told him that I was going to visit you to obtain the contracts for your great bridges over the Ohio River. Mr. Scott said it was not often that I went on a fool's errand, but that I was certainly on one now; that Mr. Garrett would never think for a moment of giving me his contracts, for every one knew that I was, as a former employee, always friendly to the Pennsylvania Railroad. Well, I said, we shall build Mr. Garrett's bridges."
Mr. Garrett promptly replied that when the interests of his company were at stake it was the best always that won. His engineers had reported that our plans were the best and that Scott and Thomson would see that he had only one rule--the interests of his company. Although he very well knew that I was a Pennsylvania Railroad man, yet he felt it his duty to award us the work.
The negotiation was still unsatisfactory to me, because we were to get all the difficult part of the work--the great spans of which the risk was then considerable--while Mr. Garrett was to build all the small and profitable spans at his own shops upon our plans and patents. I ventured to ask whether he was dividing the work because he honestly believed we could not open his bridges for traffic as soon as his masonry would permit. He admitted he was. I told him that he need not have any fear upon that point.
"Mr. Garrett," I said, "would you consider my personal bond a good security?"
"Certainly," he said.
"Well, now," I replied, "bind me! I know what I am doing. I will take the risk. How much of a bond do you want me to give you that your bridges will be opened for traffic at the specified time if you give us the entire contract, provided you get your masonry ready?"
"Well, I would want a hundred thousand dollars from you, young man."
"All right," I said, "prepare your bond. Give us the work. Our firm is not going to let me lose a hundred thousand dollars. You know that."
"Yes," he said, "I believe if you are bound for a hundred thousand dollars your company will work day and night and I will get my bridges."
This was the arrangement which gave us what were then the gigantic contracts of the Baltimore and Ohio Railroad. It is needless to say that I never had to pay that bond. My partners knew much better than Mr. Garrett the conditions of his work. The Ohio River was not to be trifled with, and long before his masonry was ready we had relieved ourselves from all responsibility upon the bond by placing the superstructure on the banks awaiting the completion of the substructure which he was still building.
Mr. Garrett was very proud of his Scottish blood, and Burns having been once touched upon between us we became firm friends. He afterwards took me to his fine mansion in the country. He was one of the few Americans who then lived in the grand style of a country gentleman, with many hundreds of acres of beautiful land, park-like drives, a stud of thoroughbred horses, with cattle, sheep, and dogs, and a home that realized what one had read of the country life of a nobleman in England.
At a later date he had fully determined that his railroad company should engage in the manufacture of steel rails and had applied for the right to use the Bessemer patents. This was a matter of great moment to us. The Baltimore and Ohio Railroad Company was one of our best customers, and we were naturally anxious to prevent the building of steel-rail rolling mills at Cumberland. It would have been a losing enterprise for the Baltimore and Ohio, for I was sure it could buy its steel rails at a much cheaper rate than it could possibly make the small quantity needed for itself. I visited Mr. Garrett to talk the matter over with him. He was then much pleased with the foreign commerce and the lines of steamships which made Baltimore their port. He drove me, accompanied by several of his staff, to the wharves where he was to decide about their extension, and as the foreign goods were being discharged from the steamship side and placed in the railway cars, he turned to me and said:
"Mr. Carnegie, you can now begin to appreciate the magnitude of our vast system and understand why it is necessary that we should make everything for ourselves, even our steel rails. We cannot depend upon private concerns to supply us with any of the principal articles we consume. We shall be a world to ourselves."
"Well," I said, "Mr. Garrett, it is all very grand, but really your 'vast system' does not overwhelm me. I read your last annual report and saw that you collected last year for transporting the goods of others the sum of fourteen millions of dollars. The firms I control dug the material from the hills, made their own goods, and sold them to a much greater value than that. You are really a very small concern compared with Carnegie Brothers and Company."
My railroad apprenticeship came in there to advantage. We heard no more of the Baltimore and Ohio Railroad Company entering into competition with us. Mr. Garrett and I remained good friends to the end. He even presented me with a Scotch collie dog of his own rearing. That I had been a Pennsylvania Railroad man was drowned in the "wee drap o' Scotch bluid atween us."