Corruption and Big Business

Like the big business leaders of Tammany Hall in New York City and the cattle industry in Chicago, Carnegie also used undesirable tactics to move his company forward. Carnegie used a process called vertical integration to eliminate some of his costs an make it cheaper for him to produce his steel. Vertical integration to Carnegie meant that he bought railroad companies and iron mines that used his steel, making him much more profit than he was making prior to buying up these other companies (The New Tycoons: Andrew Carnegie, ushistory.org). This allowed him to be the direct distributor to his own companies, saving money on both ends and essentially only gaining a profit.

Carnegie brought another multi-millionaire onto the scene to take over the affairs of the business. Henry Clay Frick overtook the operations of the company while still working closely with Carnegie, seeing that the company remained a success. Tensions rose at the Carnegie Steel Company's mill in Homestead and when Frick stepped up production demands (ushistory.com), the union fired back and refused his demands. Frick and Carnegie believed these workers stood in the way of the growth of the company (Lecture, A New Working Class). This was the beginning of the Homestead Strike, forcing Pinkerton rent-a-cops and the National Guard to make a home in Pittsburgh for the next few months. In the initial encounter between the Pinkerton forces nine strikers and seven Pinkertons were killed (ushistory.com). Eventually the strike did die down in November of 1892 with the Amalgamated Association all but destroyed and Carnegie Steel finally able to lower wages and extend work hours. While the Homestead Strike inspired many workers to stand up for their rights, it also made it very clear that it is hard to win against high power organizations like Carnegie Steel.