THE ORGANIZATION OF MANUFACTURING 

 INDUSTRIES. 



BY ANDREW CARNEGIE. 



[Andrew Carnegie, capitalist, manufacturer, philanthropist j born, Dunfermline, 

 Fifeshire, Scotland, November 25, 1837; came to United States in 1848 locating in 

 Pittsburg; his first work was as weaver's assistant in a cotton factory at Allegheny, 

 Pa.; was messenger boy in Pittsburg office of Ohio Telegraph company, 1851 ; learned 

 telegraphy and entered the employ of the Pennsylvania Railroad company; became 

 telegraph operator, advancing by promotions until he became superintendent of the 

 Pittsburg division of the Pennsylvania system; assisted Mr. Woodruff, inventor of 

 the sleeping car, in organizing the Woodruff Sleeping Car Co.; served as superintend- 

 ent of military railways and government telegraph lines during the civil war; after 

 war organized Keystone Bridge works and Union Iron works located at Pittsburg; 

 introduced Bessemer process of making steel, 1868; became principal owner of Home- 

 stead and Edgar Thompson Steel works, and other large plants as head of the firms 

 of Carnegie, Phipps & Co. and Carnegie Bros. & company; interests consolidated in 

 Carnegie Steel company, 1899, which were merged in the United States Steel corpora- 

 tion in 1901 ; retired from business, 1901 ; has given libraries to many towns and cities 

 in the United States and Great Britain, and large sums in other benefactions; Lord 

 Rector university, of St. Andrew, Edinburgh, 1903. Author, An American Four- 

 in-Hand in Britain, Round the World, Triumphant Democracy, The Gospel of Wealth, 

 Empire of Business.] 



I invite your attention to the important question of the 

 organization and management of that most complicated of 

 all pieces of machinery — man — which has been my province. 



Speaking from experience, we had not gone very far 

 in manufacturing before discovering that perfect manage- 

 ment in every department was needed, and that this depended 

 upon the men in charge. Thus began the practice of inter- 

 esting the young geniuses around us, as they proved their 

 ability to achieve unusual results — the source of big dividends. 

 These received small percentages in the firm, which were 

 credited to them at the actual cash invested, no charge being 

 made for good will. Upon this they were charged interest, 

 and the surplus earned each year beyond this was credited to 

 their account. By the terms of the agreement three quarters 

 of their colleagues had the right to cancel it, paying the party 

 the sum then to his credit. This provision was meant to meet 

 possible extreme cases of incompatibility of temper, or if the 

 recipient should prove incapable of development, or of endur- 

 ing prosperity. At death the interest reverted to the firm at 



Vol, 3-18 273 



