#284 Andrew Carnegie and Henry Clay Frick

133 snips

Jan 2, 2023

Discover the tumultuous relationship between Andrew Carnegie and Henry Clay Frick, two titans of industry whose ambitions shaped America. Explore the dramatic assassination attempt on Frick that highlighted the dangerous stakes of labor disputes. Dive into their partnership's complexities amid the backdrop of the industrial revolution, revealing how their contrasting strategies fueled both collaboration and rivalry. This deep look at their legacies uncovers the tensions of power, greed, and the relentless pursuit of success in a changing nation.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

ANECDOTE

Carnegie and Frick's Bitter Partnership

Andrew Carnegie, once a titan of industry, became ill and wrote a letter to his estranged partner, Henry Clay Frick.
Frick, known for holding grudges, agreed to meet Carnegie "in hell."

INSIGHT

The Importance of Steel

Steel was crucial for the expanding railroad system in the late 19th century.
Carnegie's steel empire grew during this period, leading to his massive wealth.

ANECDOTE

Frick's Coke Monopoly

Henry Clay Frick initially partnered with Carnegie by monopolizing the coke industry.
Coke, a fuel derived from coal, was essential for steel production.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Henry Clay Frick: The Life of the Perfect Capitalist

Quentin Skrabec Jr.

This book delves into the life of Henry Clay Frick, highlighting his role as a pivotal figure in American industry, particularly in the steel and coke sectors. It examines his complex persona, marked by both his business acumen and his involvement in significant historical events like the Johnstown Flood and the Homestead Strike.

Meet You in Hell

Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership That Transformed America

Les Standiford

This book tells the riveting story of Andrew Carnegie and Henry Clay Frick, two founding fathers of American industry, and their bitter rivalry that emerged from their partnership. The narrative focuses on the 1892 Homestead steel strike, which was one of the deadliest labor disputes in U.S. history. Standiford captures the majesty and danger of steel manufacturing, the rough-and-tumble business world, and the fraught relationship between 'the world’s richest man' and the ruthless coke magnate. The book explores themes of industrialization, labor conflicts, and the personal idiosyncrasies of these two industrial titans[1][4][5].

Hard Drive

Bill Gates and the Making of the Microsoft Empire

Jim Erickson

James Wallace

This book is a detailed exposé of Bill Gates' life and the early days of Microsoft. The authors follow Gates from his childhood as an unkempt thirteen-year-old computer hacker to his present-day status as the most powerful and feared player in the computer industry. The book provides a balanced analysis of Gates' business triumphs and his driven personality, including his singular accomplishments, brattiness, arrogance, and hostility. It also delves into the intense atmosphere at Microsoft, the company's strategic positioning, and key events such as the partnership with IBM and the development of MS-DOS and Windows[1][3][5].

The essays of Warren Buffett

Lessons for Corporate America

Warren Buffett

This book is a comprehensive collection of Warren Buffett's annual letters to Berkshire Hathaway shareholders, edited by Lawrence A. Cunningham. It provides valuable insights into Buffett's investment philosophy, corporate management, and business strategies. The letters are organized into thematic chapters, making it easier for readers to understand Buffett's views on various topics such as value investing, executive compensation, and market fluctuations. The book is praised for its clarity, wisdom, and practical advice, making it a definitive source for understanding Buffett's approach to business and investing.

Empires of Light

Edison, Tesla, Westinghouse, and the Race to Electrify the World

Jill Jonnes

Empires of Light by Jill Jonnes explores the intense competition between Thomas Edison, Nikola Tesla, and George Westinghouse as they battled to create a vast electrical empire in the late 19th century. The book delves into the technological innovations, legal battles, and societal impacts of their work, which ultimately transformed the world through the widespread adoption of AC power. It highlights the complex and often contentious process of technological change during this pivotal period.

Andrew Carnegie's Autobiography

Andrew Carnegie

What I learned from rereading Meet You in Hell: Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership That Changed America by Les Standiford.

----

Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes

----

Follow one of my favorite podcasts Invest Like The Best and check out these great episodes:

#137 Bill Gurley: All Things Business and Investing
#88 Sam Hinkie: Data, Decisions, and Basketball
#204 Sam Hinkie: Find Your People

—

[0:01] Frick had been the man Carnegie trusted above all others to manage the affairs of Carnegie Steel.

[2:00] Carnegie had delegated the job of holding the line on wages and other demands to Frick—a Patton to Carnegie's FDR.

[3:00] The Autobiography of Andrew Carnegie by Andrew Carnegie. (Founders #283)

[5:00] Here's a starter pack of essentials for Day 1 defense: customer obsession, a skeptical view of proxies, the eager adoption of external trends, and high-velocity decision making. —Jeff Bezos’s Shareholder Letters (Founders #282)

[7:00] In less than half a century the United States had been transformed―from a largely agrarian and underdeveloped federation of competing interests, to a relatively cohesive economic juggernaut. The age of the Founding Fathers was over. The Age of the Titans had begun.

[12:00] By 1863 Carnegie was earning more than $45,000 a year from this and all his other investments, compared with a mere $2,400 from his railroad salary. Yet he understood that it was the contacts he made and the information he derived from his association with the railroad that made everything else possible.

[13:00] More control. Less costs. More profit.

[15:00] Technology is just a better way to do something: As a result of the process for transforming iron to steel that bore his name (Bessemer), a quantity of steel that might formerly have taken as long as two weeks to produce could now be made in fifteen minutes.

[17:00] Carnegie starts his company during a financial panic. The best time to expand is when no one else dares to take the risk.

[20:00] Already the best but still wants to do better: Even his key employees were not spared Carnegie's heavy-handed management style. To almost every positive report Carnegie's response was "Good, but let us do better."

[21:00] Cut the prices, scoop the market, watch the costs, and the profits will take care of themselves.

[21:00] Hard Drive: Bill Gates and the Making of the Microsoft Empire by James Wallace and Jim Erickson (Founders #140)

[22:00] He could make steel more efficiently than any of them.

[24:00] Henry Clay Frick: The Life of the Perfect Capitalist by Quentin Skrabec Jr. (Founders #75)

[24:00] Like Rockefeller, Henry Clay Frick used a lot of borrowed money to get his start in the coke business. There was a line in one of Rockefeller’s biographies where it said “he was the greatest borrower I’ve ever seen.”

[26:00] Frick knew his business down to the ground.

[26:00] LIke Carnegie, Frick expands his business during an economic panic. Frick, who would later recall this as one of the most grueling times in his life, proved as undaunted in the face of adversity as Carnegie had been.

[34:00] Carneige was accustomed to obedience from his subordinates, but if he expected unquestioned subservience from Henry Frick, he had gravely miscalculated.

[36:00] Frick was no puppet, but rather a man willing to take considerable risks in defense of his principles.

[37:00] Frick had ambition, a singleness of purpose, and a lack of self—doubt that even Carneige envied.

[38:00] Carnegie would repeat the mantra time and again: profits and prices were cyclical, subject to any number of transient forces of the marketplace. Costs, however, could be strictly controlled, and in Carnegie’s view, any savings achieved in the costs of goods were permanent.

[39:00] On this issue the two men were of one mind. Frick had made his way in coke by the same reckoning that Carnegie had in rail and steel: if you knew your costs down to the penny, you were always on firm ground.

[39:00] Frick had always understood how essential new technologies were in driving costs down. Cost control became nearly an obsession.

[47:00] [Frick was shot] Only after he was finished with his day’s work did Frick permit himself to be carried from the office to an ambulance.

[49:00] You must not allow anything to discourage you in the least. Even if things do not go well for some time to come, or even if they should get much worse. Just keep at it, doing the best you can. Do not allow the fact that you are not getting along as well as you would like to lead you to put yourself in a compromising position.

[1:03:00] Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World by Jill Jonnes. (Founders #83)

[1:04:00] J.P. Morgan understood the folly of a long-term battle with the Carnegie Company, a firm that controlled its own sources of raw materials, transport, and manufacture, and that was far more deeply capitalized than his or any other of the upstarts. They might stay in the game for a while, and they might put a dent in Carnegie's armor, but in the end, Carnegie would run them into the ground, every one.

----

Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes

----

“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

----

Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here.

----

Be like Gareth. Buy a book: All the books featured on Founders Podcast