Ruthless Giants, Magnificent Philanthropists (Cecil Rhodes, Andrew Carnegie, )=Our World Today

STEEL, DIAMONDS, OIL (Rockefeller), etc. …

The better part of philanthropy is not to have operated the monopolies to start with, but I guess it’s a little late for that.

I was struck by the similarities between these two men, and their immense ego, drive to succeed, and willingness to in the process engage in insider trading and other interesting techniques to get to the top, some of them devastating to the workers on the way up, after which they turned around and became highly interested in world peace and philanthropy.

I mean no disrespect to their genius and admitted hard work, particularly Carnegie, who really did come from a poor, almost starving family, and showed remarkable intelligence and resourcefulness — but he also had friends in high places, and helped at one point (it seems) by holding some share in order to conceal payoffs, which then produced something to start investing with. I also note that both Carnegie and Rhodes figured out REAL quickly that working low-wage jobs in the production process — versus CONTROLLING the production process, and distribution, and raw materials, etc. — wasn’t going to produce the wealth.

It seems coincidental? That Carnegie was into railroads and Rhodes was envisioning a “Cape to Cairo” railroad in Africa. Guess they both understood the importance of trade routes!

The running start here begins with a little perspective on US Steel.

“The Life of Industrialist and Philanthropist
Andrew Carnegie
(1835 – 1919)
. . .
Businesses of Andrew Carnegie

History of USX Corporation
Successor to the United States Steel Corporation, the first business enterprise in history with an authorized capitalization over one billion dollars[$1.4 billion], created when Andrew Carnegie sold the Carnegie Steel Company, Limited, for more than $400 million, to New York City banker J.P. Morgan. Legal incorporation of the United State Steel Corporation occurred on February 25, 1901; business officially started on April 1, 1901. Due to the immense, unprecedented size of this new corporation, financiers on Wall Street gave it the nickname, “The Corporation”!”

From the US Steel Point of View (fascinating!) (

1873: Andrew Carnegie founds Carnegie Steel Co.
1898: J.P. Morgan founds Federal Steel Co.
1901: Ten steel companies, including Carnegie and Federal, merge to form the United States Steel Corporation.
1911: Antitrust charges are brought against U.S. Steel.
1915: U.S. Steel is cleared of antitrust charges.
1937: U.S. Steel signs a contract with the Steel Workers’ Organizing Committee, the predecessor of the United Steel Workers of America.
1952: President Truman seizes U.S. Steel properties to assure the supply of steel for the Korean War; Supreme Court rules the seizure is unconstitutional.
1962: President Kennedy protests a steel price increase and causes its reversal.
1979: U.S. Steel closes 13 facilities.
1982: U.S. Steel acquires Marathon Oil Company.
1991: A restructuring renames U.S. Steel USX and creates two tracking stocks: USX-U.S. Steel Group and USX-Marathon Group.
1992: USX-Dehli Group is created as a third tracking stock.
2000: USX acquires a steel producer in the Slovak Republic.
2002: USX is broken into independent companies: United States Steel Corporation and Marathon Oil.

The United States Steel Corporation is the largest integrated steel company in the United States and the 11th largest in the world. It produces and sells a wide range of semi-finished and finished steel products, coke, and taconite pellets. It operates smaller businesses in real estate, engineering, mining, and financial services. The company owns and operates a steel production facility in the Slovak Republic that supplies the Eastern European market. It also engages in joint ventures with Japanese and Korean steelmakers.

Origins: 1873-1915

The origin of United States Steel Corporation (U.S. Steel) is virtually an early history of the steel industry in the United States, which in turn is closely linked to the name of Andrew Carnegie. The quintessential 19th-century self-made man, Carnegie began as a bobbin boy in a cotton mill, made a stake in the railroad business, and, in 1864, started to invest in the iron industry.

In 1873 he began to establish steel plants using the Bessemer steelmaking process. A ruthless competitor, he led his Carnegie Steel Company to be the largest domestic steelmaker by the end of the century. In 1897 Carnegie appointed Charles M. Schwab, a brilliant, diplomatic veteran of the steel industry who had worked his way up through the Carnegie organization, as president of Carnegie Steel.

At about the same time, prominent financier John Pierpont Morgan became a major participant in the steel industry as a result of his organization of the Federal Steel Company in 1898. Morgan’s personal representative in the steel business was Elbert Henry Gary, a lawyer, former judge, and director of Illinois Steel Company, one of the several steel companies co-opted into Federal Steel, of which Gary was made president. Carnegie, Schwab, Morgan, and Gary were the key participants in the organization of U.S. Steel.

By 1900 the demand for steel was at peak levels, and Morgan’s ambition was to dominate this market by creating a centralized combine, or trust. He was encouraged in this by rumors of Carnegie’s intention to retire from business. U.S. President William McKinley was known to approve of business consolidations, and his support limited the risk of government antitrust claims in the face of a steel industry combination. In December 1900 Morgan attended a now-legendary dinner at New York’s University Club. During the course of the evening Schwab gave a speech that set forth the outlines of a steel trust, the nucleus of which would be the Carnegie and Morgan steel enterprises, together with a number of other smaller steel, mining, and shipping concerns. With Schwab and Gary as intermediaries between Carnegie and Morgan, negotiations were concluded by early February 1901 for Carnegie to sell his steel interests for about $492 million in bonds and stock of the new company. The organization plan was largely executed by Gary, with Morgan arranging the financing. On February 25, 1901, United States Steel Corporation was incorporated with an authorized capitalization of $1.4 billion, the first billion-dollar corporation in history. The ten companies that were merged to form U.S. Steel were American Bridge Company, American Sheet Steel Company, American Steel Hoop Company, American Steel & Wire Company, American Tin Plate Company, Carnegie Steel Company, Federal Steel Company, Lake Superior Consolidated Iron Mines, National Steel Company, and National Tube Company.

I am struck over and over by the similarities of the Scramble for Africa and the Colonization of America, including colonizing its current inhabitants with the help of psychiatrists, psychologists, nonprofit corporations of trades all wonderfully interested in humanitarian causes, and saving the masses.

Recently, I learned how closely one of the patriarchal figures, if I may call it that, in developing and professionalizing the field of Psychology to the Ph.D. level, and working diligently throughout his lifetime to make sure his colleagues are getting nice federal funding (lest the psychiatrist/physician model prevail and have all the business) == and, it’s hoped, rights to prescribe, like the big guys (i.e., Pharmacotherapy matters). That would be Nicholas Cummings and his various foundations sponsoring conferences addressing damage control of the family court system, i.e., launching an “Our Broken Family Courts Initiative,” bypassing public input (naturally) and heading off to launch this initiative last October (2012) at “NOVA SOUTHEASTERN UNIVERSITY” IN FLORIDA, which has a nice fat Center for Psychological Studies, plus a professor (Leonore Walker) know for her work on Violence Against Women, so reassuring us (hopefully) this is not really a gender issue.

It turns out that Nova Southeastern has a connection to the Carnegie Foundation for the Advancement of Teaching. (In case someone is wondering why I picked Andrew Carnegie for this example)…

Amazingly, the development of the professions of psychological, psychiatry, and psychopharmacology (etc.) also have roots to the Bush family dynasty, which as we should know by now, has a history of starting, or at least profiting from wars, including World Wars I and II.

Most of us have heard about Carnegie Hall, Carnegie Mellon, etc. etc. so I figured it’s maybe time to look at where all this philanthropy got its wealth to start with, and the mindset of its original, including the underlying preoccupation (if not obsession) with studying various ethnic groups (“the better to serve them, my Dear”) and how some of this is just a bit too close to the concept of “Racial Hygiene.”

Call those things what you may, neither Andrew Carnegie nor Cecil Rhodes were nice guys, nor honest, although I’m definitely not questioning that they were visionaries and hard workers in their time. It takes real vision to envision an empire, which both did, obviously.

While you can see whatever you see in this passage, as someone who’s read the rhetoric about Jobs, Jobs, Jobs, and low-income workers (such as the kind that made some of the philanthropic wealth of the corporations running these ethnic and economic-based studies), that one of the FIRST things that must have become clear to both Cecil Rhodes (who wasn’t physically strong, and whose brother was already failing as a farmer in South Africa by the time he got there) and Andrew Carnegie (who began working for $1.20 a week and came from a very poor family) was that being in the PRODUCTION phase of a business (whether farming or cotton, or himself doing the mining) wasn’t nearly so profitable, or leading to independence, as in the dominating the business and investments — and distribution, and market — phases.

And a lot of the art, culture, libraries, institutions, and university centers of study — were paid for by these profits.

I also recommend simply reading the Wikipedia “Andrew Carnegie” entry.

***”Who Rocks the Cradle Rocks the World.” Who funds the Universities also Forms the world. See Fitts, and others, on the role of private, tax-exempt foundations, in structuring the history of this country — they are the real government, basically. Next question: How did these tax-exempt foundations running the place, make their fortunes?

See a concise Andrew Carnegie (1835-1919) biography which mentions the Foundation for the Advancement of Teaching towards the end.

This is in a nutshell “how things work” if you read about Carnegie’s life, and rise to power, and what he did after getting there, including establishing a vertical monopoly all over, trying to destroy rivals, and profiting when others go bankrupt, buying off their firms — and profiting when the entire country, possibly as a result of some extortionist and monopoly practices, goes into a recession. Perhaps you’ve heard of “Pinkerton” agents? (strike breakers). In another time and place, he’d be Cecil Rhodes… Here’s an excerpt:

When the Carnegie family emigrated from Scotland to western Pennsylvania, poverty compelled thirteen-year-old Andrew to work as a bobbin boy in a cotton factory at $1.20 a week. Making opportunities for himself, working hard, and learning fast, he quickly rose, becoming successively a messenger boy, telegraph operator, secretary to one of the Pennsylvania Railroad’s superintendents, and finally superintendent of the Pennsylvania Railroad’s western division in Pittsburgh at age twenty-three in 1859. During the Civil War, Carnegie helped organize the repair of the rail system around Washington, DC and then organized the Telegraphers Corps. While still working for the railroad during the war, he organized a partnership to manufacture railroad bridges.

Desiring greater autonomy, Carnegie left the railroad in 1865 to run his own enterprises. He marketed bonds*** and invested in oil and railway sleeping cars, but his primary business was iron-making. Introducing the cost-accounting techniques of the railroad industry and hiring trained chemists, he ruthlessly adopted procedures that cut per-unit costs and soon emerged as one of the industry’s dominant forces. Following a personal demonstration Carnegie decided to adopt Henry Bessemer’s new technology and enter the steel industry, building the Edgar Thompson Works in 1873, just as the Panic of 1873 hit. His deep financial resources allowed him to buy up his hard-pressed partners’ stakes cheaply and gain a majority share of the enterprise.

{{***Early on, and through personal demonstration, he knew that “jobs” and wages were not the way to autonomy, but investments. He knew that one markets bonds to raise capital, and that to invest it helps to know the business. He knew that technology counts, and diversified. And he had another quality that makes for success — he was RUTHLESS, and willing to exploit, starve, and if necessary kill, in order to win — and large scale. He also managed to hire people willing to do this for him. ALL this should be weighed with the later philanthropy and love of teaching — teaching people to succeed like him? (hardly!!)}}

Carnegie looked upon his industrial rivals as enemies and worked ruthlessly to adopt innovations and cut costs in an effort to defeat them. In the process the price of steel was driven ever lower, benefiting steel buyers and users. In 1883, as steel prices collapsed amid another recession, Carnegie bought out a major competitor, taking ownership of the Homestead steel plant. Homestead became the scene of one of the era’s most famous confrontations between capital and labor in 1892, when the director of Carnegie’s operations, Henry Clay Frick, called on Pinkerton agents to wrest control of the plant from striking workers. Five strikers and three Pinkertons died in the confrontation. The state militia restored order and the union was soon broken, but Carnegie’s reputation was permanently tarnished in the eyes of many, despite the fact that he was living in his summer estate in Scotland when the events transpired.

{{Around this time in Africa, Cecil Rhodes was doing his stuff to consolidate the diamond mines, etc. BOTH were empire builders with it seems similar characteristics in pursuit of their goals, although one was British and the other Scottish}}
In the 1890s Carnegie pushed for greater and greater vertical integration, as a way to cut costs and increase profits. He had previously acquired a dominant stake in Frick’s coke business and now leased recently-discovered ore deposits in Minnesota’s Mesabi Range, purchased lake steamers to handle his ore traffic and bought and extended a railroad to link his steel works to Lake Erie — thereby guaranteeing an uninterrupted flow of raw materials to his manufacturing plants. Simultaneously, he adopted the new Siemens open-hearth furnace in his steel works. {{again, staying on the leading edge of technology and using this in business is usually part of success}}

By the end of the 1890s, Carnegie Steel Company was the world’s largest steel producer, manufacturing a quarter of the nation’s soaring steel output. Profits accumulated at an unprecedented rate, hitting $40 million in 1900. Carnegie’s competitive zeal and unwillingness to collude irked his competitors, as did his moves around 1900 to expand into producing steel goods in hoop, rod, wire and nail mills.

In 1901, amid the most comprehensive merger wave in American history, Carnegie sold his interests to J.P. Morgan’s syndicate. His personal fortune exceeded $300 million — about $6.7 billion at today’s (2004) prices — making him one of the world’s richest men. Thereafter he turned his attention to distributing his wealth and promoting international peace.

And here’s another, A Kirkus Review of a 2006 Biography by David Nasaw:

although I recommend people figure out this is a part of US History which frames industry, finances, and education, not to be ignored…Towards the bottom of I look at the Director of the Carnegie Foundation for the Advancement of Teaching, and who that individual (Ed.D. Harvard, what else) has been hanging out with on other boards. The question should be asked, given how Carnegie himself made his millions, why are we teaching others to go about it differently (i.e., work hard, work smart — but unlike those who are funding and driving the universities today, honestly!)

Robber baron? Capitalist butcher? Angel? Industrialist-philanthropist Andrew Carnegie has been many things to many people, and in this grand biography, he’s all of them.

Warren Buffett’s recent decision to give most of his $30-billion-plus fortune to charity squares neatly with Carnegie’s view that it is a mark of shame to die with money in the bank; in that matter, but not alone, Nasaw’s overstuffed and very well-written biography is timely and instructive.

A poor Scottish immigrant, Carnegie impressed a succession of employers with his skills, intelligence and diligence. He also had a Machiavellian bent, and by the time he was 30, he had built a financial empire based on insider contracts to supply the Pennsylvania Railroad with materials and build iron bridges for it. Carnegie’s Protestant ethics became situational; he hired a substitute in the Civil War and guided money into his own pocket as a civilian advisor to the government. A shrewd investor, he survived economic panics and made out fine in booms, shielded by a strategy of using other people’s money to expand his interests. The darkest side of Carnegie’s character emerged when he and his partners reversed earlier policies of rewarding workers with high wages and benefits, allowing unions to operate freely.

Leaving it to lieutenants to manage matters, Carnegie—whose personal fortune probably exceeded Bill Gates’s today—spent more and more time in Europe as labor unrest mounted in the 1880s and ’90s, exemplified by the bloody strike at his Homestead steel plant. Bowed, Carnegie devoted himself to philanthropy, endowing libraries and scientific institutions and pursuing anti-imperialist and pacifist causes, very unlike most of his fellow Republicans—from whom he pointedly split.

A complex man of parts, then, not all of them good. Nasaw (The Chief: The Life of William Randolph Hearst, 2000) does brilliant work in bringing the man to life.

Pub Date: Oct. 24th, 2006
ISBN: 1-59420-104-8
Page count: 851pp
Publisher: Penguin Press
Review Posted Online: June 24th, 2010
Kirkus Reviews Issue: Aug. 1st, 2006


Meanwhile, in South Africa, ca. 1870-1900, a Diamond empire was starting. See Chapter 7 in the Edward Jay Epstein which, along with the Unauthorized Biography of George Bush, and other sources explaining to all of us the basics of colonization in its historical business framework, ought to be required reading, even if the problem one is solving relates to Family Court Matters. This is the leadership that has the money to hire the professional sector. Now, are the professional sector the leaders? — — No, they are not. They are the spokesmodels for the leaders of industry and politics, which have to be put in a historical context, and it at some point in time, we have to face that part of history is wars, debt, slavery and sometimes genocide. Once that is accepted, then it’s a matter of connecting the Who’s Who, and saying (after a good look in the mirror and heartfelt solo conversation) “Do I have what it takes to make a difference in this trend — or even try to? Am I, myself, a leader, a follower, or a social professional climber?” Before answering this question, I’d take a look at the long-term stakes, especially if you are a mother or father, for your kids. Or am I just too busy, or too lazy (mentally) to make the time to learn how these things work, even if the knowledge is very uncomfortable, and makes the world look different?

Compare: Andrew Carnegie, Cecil John Rhodes in goals, ego, and in what they did. Interesting how Carnegie started in railroads, and Rhodes envisioned the Cape to Cairo railroad, and regaining the US Colonies for Great Britain. Both also used technology to advantage, and were expert at seeing business needs (and challenges), and ruthless as to rivals (the rest of this chapter shows how Rhodes bought out his one primary rival, Barney Barnato, among other things).



From Chapter Seven, “The Empire Builders” from The Rise and Fall of Diamonds, by Brian Jay Epstein (whose first major piece was an inquiry on the Warren Commission, I believe).

In July of 1980, a black crowd armed with whips and mallets toppled the bronze statue of Cecil John Rhodes from its pedestal in Salisbury, Zimbabwe. The caption of the Associated Press photograph of the event read, “Symbol of Colonialism Toppled in Zimbabwe.” Rhodes, after all, was the only man in history to have two nations and a federation named after him-Rhodesia (now Zimbabwe), Northern Rhodesia (now Zambia) and the Rhodesian Federation (which had included Malawi, Zambia and Zimbabwe). In less than ten years, under the royal charter granted to him by the British government, he had colonized millions of square miles of the richest part of southern and eastern Africa. This territorial empire proved ephemeral- not even his bronze statue lasted out the century. He created another empire, however, De Beers, which endured.

Rhodes arrived in the port of Durban in South Africa in September of 1870. He was then a gangly boy of seventeen with a long face that made him appear taller than he was. He spoke with a squeaky voice that disconcerted other passengers on the boat. He had left England and traveled to South Africa because of his failing health. He had a collapsed lung and a weak heart, and his doctor predicted he would not live to the age of twenty-one. His father, a poor vicar in Hertfordshire, sent him on this voyage so that if he did not miraculously recover. he would at least die peacefully in a warm climate. His total stake in the world, a gift from his aunt, was two thousand pounds.

Even with meager resources, Rhodes was possessed by a dream. He wanted to extend the British Empire throughout the world. In a will he drew up several years later, he directed that whatever money he ha acquired in his life be used to form a secret society that would attempt, among other things, to bring the United States back under British rule. He also envisioned building a railroad from Capetown, at the southern tip of Africa, to Cairo, at the other end of the continent. The dream railroad, like all his other schemes, was only a means to an end, as he had no real interest in wealth. The end was colonizing Africa, from Capetown to Cairo, for the British empire.

He hired an oxcart for the rugged trip to the diamond fields, which took a month of traveling across open veldt. He bought a pick, shovel, and other prospecting gear. And, as he was preparing himself for the entrance examination for Oxford, he took along with him a set of the Greek classics.

His brother’s claims were on a farm owned by two brothers, D.A. and J. N. De Beer. The De Beer brothers were Boer settlers, interested in farming, not diamonds. They sold off their land to the swarm of prospectors and moved on, leaving behind only their name: De Beers. . .

This encampment, which was occupied by some 50,000 fortune hunters, was the second most populous “city” in the whole subcontinent of southern Africa. Within the next couple of years, the tents were replaced by corrugated iron shacks brought by ox cart from Capetown, and the city was named Kimberley in honor of Lord Kimberley, the British secretary of state for the colonies.

For Rhodes, however, Kimberley remained a human anthill. When his brother’s claim yielded only meager results, he decided that immediate profits were not in mining but in servicing the needs of the multitude of “ants” who were pouring into Kimberley by the thousand each week. He began his enterprise by importing ice cream, and then jugs of water, which he sold to the thirsty diggers. In doing so, he realized that water was a two-fold problem for the claim owners. On the one hand, they needed an ever-increasing amount of fresh water for their black laborers as they dug deeper into the ground for diamonds. On the other hand, the seepage of ground water into the mines, as the diggers approached the water table, was threatening to collapse the dirt walls of the mines. There were thousands of adjacent mines surrounding Kimberley, and the owners needed a means of pumping the water out. Rhodes now saw an opportunity for making his fortune.

He reckoned that soon a steam-powered pump would be needed to suck the water out of the mine. No such machine existed in Kimberley. In fact, there was only one steam pump in all of South Africa. Seizing the opportunity, Rhodes invested all the money he had in buying it.

No sooner had Rhodes’ steam pump arrived in Kimberley than a torrent of water flooded the Kimberley Big Hole mine. As the walls began to collapse, the thousands of black workers in the mine had to be pulled out of the mine with ropes. The individual claim owners, who each owned various sections of the floor of the mine, desperately needed Rhodes’ pump and they had no choice but to pay whatever he demanded.

Rhodes reinvested the money he made in ordering bigger steam pumps from England. He then ruthlessly drove whatever competition existed out of his the pumping business~ his competitors charged him with sabotaging their pumps~ and established a water-pumping monopoly in all mines around Kimberley.

As he progressively raised the charges for his pumps, the mine owners, and even mine syndicates, could not afford to pay him in cash. Instead, he got from them a share of the mines. By the age of twenty-seven, he was the largest mine owner in Kimberley. Although now exceedingly wealthy, he had little interest in personal amenities. He shared a tiny one-room shack with a business associate. He wrote that the “chief good in life” was not for him a happy marriage, great wealth or interesting travel, but “the absorption of the greatest portion of the world under [British] rule.” In between his sharp dealings in Kimberley, Rhodes managed to find time to take a degree at Oriel College at Oxford. Here John Ruskin’s lectures on the virtues of imperialism renewed his ambition to colonize Africa.

Returning to Kimberley, he merged his interests with two huge miming syndicates to form the De Beers Mining Company. He held the controlling block of stock in this new entity and applied to the Colonial Office in London for a charter. It was granted in 1880, and was unlike any other charter ever given to a mining company. Under its terms, Rhodes’ company was not confined to mining. It could build railroads, lay telegraph wires, annex territories, raise armies and install governments. Since the East India Company had been established in the seventeenth century, no company had ever been granted such unrestricted powers. It was all part of Rhodes’ dream of empire.

[[BARNATO: Getting rid of a Competitor of Equal Business Smarts required Outside help:]]

Barnato bought diamonds for cash from the diggers and quickly resold them. With his profits, he bought up a number of unproductive claims on the floor of the Big Hole. Then, to everyone’s amazement, these claims began yielding extraordinary quantities of diamonds, even when rain storms made working the adjacent claims impossible. Barnato was accused by other mine owners of having salted his claim with diamonds that he had illegally bought from smugglers and thieves. But the charges were impossible to prove.

Whatever the provenance of his diamonds, Barnato continued to expand his production. With the money he sold them for, he began buying up, piece by piece, the patchwork of claims on the floor of the Big Hole. When cave-ins made it impossible to dig any deeper in the Big Hole, mine owners rushed in panic to sell their claims. Barnato continued to buy these pieces of the jigsaw puzzle. Then, in 1883, he gambled on sinking an underground shaft- the first ever attempted for diamond mining. It worked, and the claims he had bought for a pittance became worth a fortune. just as Rhodes had gained control of the De Beers mine, Barnato got control cr most of the Kimberley Central mine.

Rhodes and Barnato- both in their mid-thirties, by 1887, controlled the world’s two giant diamond mines. A confrontation between these enormously ambitious men became inevitable. Rhodes, if he was ever to have his empire, had to buy out Barnato. He made the first move, attempting, with financial backing from the Rothschild bank in London, to buy one of the few pieces in the Kimberley mine that Barnato did not own. He offered the then staggering sum of 1,400,000 pounds to the French financiers who owned it, not because the diamonds in it were worth that sum but because it would paralyze Barnato’s effort to consolidate the Big Hole into a single mine.

When Barnato received word of Rhodes’ bold offer, he himself offered 1,750,000 pounds to the French financiers for this crucial section. He had no choice but to outbid his rival.

Rhodes, at this point, decided to offer Barnato a deal that would seem too lucrative for him to refuse. Instead of bidding up the price, which would only benefit the French investors, Rhodes suggested that Barnato withdraw his bid. In return, Rhodes agreed to buy this section of the mine at the lower price and then immediately resell it to Barnato for 300,000 pounds and a one-fifth interest in Barnato’s Kimberley Central mine.

Barnato immediately accepted the offer. It permitted him to acquire the section for 1,450,000 pounds less than he had offered, and with it, he could operate the mine as a single entity. He realized that giving Rhodes a one-fifth interest in his mine would provide him with a bothersome wedge into his company, but he assumed that he and his close associates still owned a sufficient number of shares to make it impossible for Rhodes to attempt to gain control. Barnato made the fatal mistake of underestimating Rhodes’ ambitions.

To Rhodes, the deal was only the opening gambit in his war for control. ~You could never deal with obstinate people until you got the whip hand,” he explained to an associate at the time. The one-fifth interest was to be his whip.

Rhodes set about asking the most powerful bankers in Europe, including Rothschild, Jules Porges, and Rodolphe Khan, to help him buy enough stock in Barnato’s company to allow him to merge it into his company. He argued that as long as there were competing diamond mines, the market would continually be flooded. Then prices would fall to a pont that the public would realize that diamonds had no intrinsic value.

The bankers were quickly persuaded that Rhodes was right: Diamond mining would only remain profitable if it were done by a monopoly that could systematically restrict the supply. They not only agreed to use the stock that they and their clients held in Barnato’s mine to bring about the merger but they also advanced Rhodes money to buy up shares of Barnato’s stock on the open market.

The rest simply required an exercise in stock manipulation. Rhodes first drove the price of diamonds down by dumping De Beers~ inventory of diamonds onto the market. The price plummeted, and as Barnato’s associates unloaded their stock, Rhodes bought it. When no more stock was available, Rhodes and his backers began again bidding up the price, which tripled in three months. By the time Barnato realized that Rhodes was attempting to buy up his company, it was too late. By March of 1888, Rhodes and his associates had acquired the additional 30 percent they needed for control of the Kimberley Central mine.

Barnato had no choice but to acquiesce in the proposed merger. He met Rhodes at the Kimberley Club, and over an amicable lunch they worked out the terms of the consolidation. Barnato would exchange his stock in the Kimberley Central mine for stock in De Beers Consolidated Mines, as the new company would be called. This would make Barnato the largest single shareholder, though Rhodes, with his bankers and allies, would be firmly in control of the new company. Barnato would also be appointed one of four life governors of the monopoly-a position he would hold as long as he lived. The two men then shook hands on the deal. Barnato told him, Rhodes later noted, “You evidently have a fancy for building an empire in the north and I suppose we Must give you the means to do so.”

[[When others get wind of this and realize it’s simple imperialism, look how they dodged the problem neatly… OR, look at Chapter 19 [[1950s-1970s] and see how other possible competitors were headed off, or bankrupted, involving not a few different countries in the process..

It seems that the moral would be, ALWAYS avoid consolidation, be aware of the various people headed for imperialism (and how they operate) and at all points endeavor to nip it in the bud, or resist. Particularly once it’s clear the company is ruthless. It may not always be possible, but it would seem the world might be a better place if there were less consolidation and centralization of power.

Notice, probably, the American diamond engagement ring industry, affected by the advertising campaigns, was for many years unaware of the cartel. It was only a chance meeting of the author in 1977 which sparked his interest, and most of us probably are not rubbing shoulders with friends who hang out with diamond traders; I guess he was — and hence this fascinating book… “In Washington, later that year, I filed a request under the Freedom of Information Act for all the investigations of the Justice Department concerning the diamond Cartel. The resulting archive of documents provided a fragmentary picture of De Beers’ conflicts and near collision with antitrust laws of the United States, the clues all pointed to mining companies in South Africa and the distribution arm in London. I therefore began my inquiry into the nature and future of the diamond invention in Johannesburg.”

{{for more, I have, like FOUR posts on the “Long and Winding Rhodes,” a topic that has obviously gripped my attention and seems to be a key to understanding much of current history and politics….


CARNEGIE FOUNDATION FOR THE ADVANCEMENT OF TEACHING was formed by government charter in 1906! This was not separated from Carnegie Foundation itself until 1979. In 1997, the Foundation moved from Princeton, N.J. to Stanford, California.

Please browse (for a view of the powerhouses involved) the positions of the current board of trustees.


You know, I know, and we all by now should probably know that, generally speaking, people who sit on powerful boards of philanthropic organizations don’t generally sit on just one at a time, and haven’t always sat still in one place, but rotate from position of influence to position of influence. So, I looked at Anthony S. Bryk (currently on the above board) and found him on another one, Institute for Educational Sciences, which institute has a *.gov address. This should hardly surprise us any more, because, quite apart from government itself being a form of corporation, it takes money to run governments, and one thing corporations are good at doing (like Carnegie was above; see “insider trading,” hard work, literacy, investment, and rather than being part of the process of PRODUCING a products, invested in running the production, delivery, and marketing of products and services, and was not above employing guards to make sure that the workers didn’t share too much of the profits. (i.e., the infamous Homestead strike, per “Wikipedia” on Carnegie, was the workers’ protest that when profits went up 60%, their wages only went up 30%. There was a lockout (workers are a dime a dozen, and replaceable), but labor organized and attempted to break the lockout (it wasn’t a legitimate strike) and shots were fired.

It should also probably be noted that Carnegie, prior to his death in 1919, was active in England also, buying up newspapers there in the 1880s. It was after the negative press around the Homestead incident that he sold the business to J.P. Morgan, and kept the gold in a vault in NJ to keep it way from the taxing authorities in New York, etc., a HUGE sale, paid in gold bonds (not non-bona fide money, which came later!!)

So here we are over a century later, with the vertical monopoly (or intended control) of the engineering of EDUCATION in the same top to bottom manner the plan was to control the other industries Carnegie was into (cf. Rhodes Scholarship for controlling American education, and Oppenheimer for controlling the diamond industry/DeBeers, etc.)

And I have to look at this National Board for Education Sciences:

The National Board for Education Sciences consists of 15 voting members appointed by the President, by and with the advice and consent of the Senate. The following serve as nonvoting ex officio members: The Director of the Institute of Education Sciences (IES), each of the four Commissioners of the National Education Centers, the Director of the National Institute of Child Health and Human Development, the Director of the Census, the Commissioner of Labor Statistics, and the Director of the National Science Foundation.

His biography comes up in this list of luminaries: Notice, Harvard comes up several times:
Members of the National Board for Education Sciences
On October 5, 2012, Bridget Terry Long was re-elected chair of the presidentially-appointed board of directors for the Institute of Education Sciences in the U.S. Department of Education. She had previously served as vice chair and as chair. Kris Gutiérrez was re-elected vice chair. The Board is composed of prominent researchers, school administrators, and business executives.

Other Board members include:

***Dr. Anthony S. Bryk, President of the Carnegie Foundation for the Advancement of Teaching [[Ed.D. from Harvard]]
Dr. David J. Chard, Dean, Annette Caldwell Simmons School of Education and Human Development at Southern Methodist University
Dr. Darryl J. Ford, Head of School for William Penn Charter School in Philadelphia, Pennsylvania
Dr. Adam Gamoran, John D. MacArthur Professor of Sociology and Educational Policy Studies and Director of the Wisconsin Center for Education Research at the University of Wisconsin-Madison
Dr. Robert C. Granger, President of the William T. Grant Foundation (see below)
Dr. Larry V. Hedges, Board of Trustees Professor of Statistics and Social Policy and Faculty Fellow, Institute for Policy Research, Northwestern University (sworn in on 10/5/12)
Dr. Susanna Loeb, Barnett Family Professor of Education, Stanford University (sworn in on 10/5/12)
Dr. Margaret R. “Peggy” McLeod, Educational Consultant, Washington, DC
Dr. Judith D. Singer, James Bryant Conant Professor of Education, Harvard Graduate School of Education and Senior Vice Provost for Faculty Development and Diversity, Harvard University
Dr. Robert A. Underwood, President, University of Guam
Dr. Hirokazu Yoshikawa, Walter H. Gale Professor of Education and Academic Dean, Harvard Graduate School of Education

James Bryant Conant having been a Harvard President 1933-1953, interesting guy:

James Bryant Conant (March 26, 1893 – February 11, 1978) was a chemist, a transformative President of Harvard University, and the first U.S. Ambassador to West Germany. Graduating from Harvard with a Doctor of Philosophy degree in 1916, Conant served in the U.S. Army during World War I, working on the development of poison gases. He became an assistant professor of chemistry at Harvard in 1919, and the Sheldon Emery Professor of Organic Chemistry in 1929. His research investigated the physical structures of natural products, particularly chlorophyll, and he was one of the first to explore the sometimes complex relationship between chemical equilibrium and the reaction rate of chemical processes. He studied the biochemistry of oxyhemoglobin, and published three papers on using polymerized isoprene to produce synthetic rubber.

In 1933, Conant became the President of Harvard University with a reformist agenda that involved dispensing with a number of customs, including class rankings and the requirement for Latin classes. He abolished athletic scholarships, and instituted an “up or out” policy, under which scholars who were not promoted were terminated. His egalitarian vision of education required a diversified student body, and he promoted the adoption of the Scholastic Aptitude Test and co-educational classes. During his presidency, women were admitted to Harvard Medical School and Harvard Law School for the first time.

Yes, regarding the academic disciplines of Latin, German, and Math:

On October 9, 1933, Conant became the President of Harvard University with a low-key installation ceremony in the Faculty Room of University Hall.[35] This set the tone for Conant’s presidency as one of informality and reform. At his inauguration he accepted the charter and seal presented to John Leverett the Younger in 1707, but dropped a number of other customs, including the singing of Gloria Patri and the Latin Oration. This was a sign of things to come.[36] While, unlike some other universities, Harvard did not require Greek or Latin for entrance, they were worth double credits towards admission, and students like Conant who had studied Latin were awarded an A.B. degree while those who had not, received an S.B. One of his first efforts at reform was to attempt to abolish this distinction, which took over a decade to accomplish.[37] But in 1937 he wrote:

I do not see how one can make very much headway as a student … of history and literature without a reading knowledge of Latin. I do not see how a person can go very far in any branch of science without a thorough understanding of mathematics, and if the underpinning was bad in school, probably the necessary calculus and so forth would not have been taken during the college years. I know that a man cannot be a research chemist without a reading knowledge of German. It is hard to acquire it as the first language in college.[38]
Other reforms included the abolition of class rankings and athletic scholarships,[39] but his first, longest and most bitter battle was over tenure reform, shifting to an “up or out” policy, under which scholars who were not promoted were terminated. A small number of extra-departmental positions was set aside for outstanding scholars.[39] This policy led junior faculty to revolt, and nearly resulted in Conant’s dismissal in 1938.[40] Conant was fond of saying: “Behold the turtle. It makes progress only when it sticks its neck out.”[41]

[[The next sentence talks about how Conant established the first graduate degree in education at Harvard, plus SATs and ETS, i.e., Educational Testing Service…including Henry Chauncey (NYT obit, here; he died in 2002 at age 97)]]

Conant was appointed to the National Defense Research Committee (NDRC) in 1940, becoming its chairman in 1941. In this capacity, he oversaw vital wartime research projects, including the development of synthetic rubber, and the Manhattan Project, which developed the first atomic bombs. On July 16, 1945, he was among the dignitaries present at the Alamogordo Bombing and Gunnery Range for the Trinity nuclear test, the first detonation of an atomic bomb, and was part of the Interim Committee that advised President Harry S. Truman to use atomic bombs on Japan. After the war, he served on the Joint Research and Development Board (JRDC) that was established to coordinate burgeoning defense research, and on the influential General Advisory Committee (GAC) of the Atomic Energy Commission (AEC).

In his later years at Harvard, Conant taught undergraduate courses on the history and philosophy of science, and wrote books explaining the scientific method to laymen.

In 1953 he retired as President of Harvard and became the United States High Commissioner for Germany, overseeing the restoration of German sovereignty, and then was Ambassador to West Germany until 1957. On returning to the United States, he became a critic of the education system in works such as The American High School Today (1959), Slums and Suburbs (1961) and The Education of American Teachers (1963). Between 1965 and 1969, Conant, suffering from a heart condition, worked on his biography, My Several Lives (1970). He became increasingly infirm, suffered a series of strokes in 1977, and died in a nursing home the following year.

Back to main topic — Bryk, on this Carnegie AND on this IES board has been rubbing shoulders with another man who since 2003 has been president of the William T. Grant foundation — which has connections to the family law profession, AFCC and has been (as I’m recalling) funding some of its projects.

See below:

Biographies (from the IES site):

Anthony S. Bryk is the ninth president of The Carnegie Foundation for the Advancement of Teaching. He held the Spencer Chair in Organizational Studies in the School of Education and the Graduate School of Business at Stanford University from 2004 until assuming Carnegie’s presidency in September 2008. Prior to Stanford, he held the Marshall Field IV Professor of Education post in the sociology department at the University of Chicago, where he founded the Center for Urban School Improvement which supports reform efforts in the Chicago Public Schools. Bryk also founded the Consortium on Chicago School Research which has produced a range of studies to advance and assess urban school reform. In addition, he has made contributions to the development of new statistical methods in educational research.

At Carnegie he is leading work on strengthening the research and development infrastructure for improving teaching and learning. Bryk holds a B.S. from Boston College, an Ed.D. from Harvard University, and was recently honored by Boston College with an honorary doctorate for his contributions to education reform.

Robert Granger
Robert Granger has been president of the William T. Grant Foundation since 2003. The Foundation supports research and related activities intended to improve the lives of young people.

The Foundation’s current focus is on how social settings such as schools, community organizations, and neighborhoods influence young people; how to improve these settings; and how research influences policy and practice.
[[I.e., your basic sociology and behavioral modification focus…]]

In the past few years the Foundation has focused on building a robust portfolio of grantees studying how practitioners acquire, interpret, and use research evidence. An emerging foundation interest is in understanding why effects vary when intervention programs are brought to new sites.

Before joining the Foundation in 2000 as Senior Vice President of Programs, Dr. Granger served as Senior Vice President of the Manpower Demonstration Research Corporation (MDRC) and Executive Vice President at Bank Street College of Education.

Dr. Granger also was the inaugural chair of the National Board for Education Sciences during the Bush administration and has been reappointed to the Board by President Obama. In addition, Dr. Granger serves on the editorial board for several professional journals. He received his Ed.D. in Early Childhood Education (1973) from the University of Massachusetts, and is an expert on the evaluation of policies and program for low-income children and youth.

See the welfare reform connection with the focus on low-income children, and the MDRC connection (MDRC was itself a 1974 collaboration between the Ford Foundation and multiple federal agencies. They run fatherhood demonstration programs and are heavily involved in welfare reform projects, research and testing on the masses…. My Familycourtmatters blog has more on it (or reader can look at this him or herself)

The present head (Executive Director) of “AFCC”, Peter Salem, received some honors from the Wm. T. Grant foundation in 2009:

Peter Salem has served as Executive Director since 2002 and was Associate Director from 1994-2002. He taught mediation at Marquette University Law School for ten years and served as mediator and director of Mediation and Family Court Services in Rock County, Wisconsin. Mr. Salem is a former president of the Wisconsin Association for Mediators and is co-editor of Divorce Mediation: Models, Techniques and Applications. He has provided training and technical assistance to family court service agencies throughout the United States since 1990. He is author of numerous articles and videos on mediation, domestic violence and divorce. He received the John M. Haynes Distinguished Mediator Award presented by the Association for Conflict Resolution in 2008 and received a William T. Grant Foundation Distinguished Fellows award in 2009. He holds an M.A. in Communication and Mediation Management from Emerson College in Boston and a B.A. in Political Science from McGill University

This came up in a “Families Matter Symposium” at the UBaltimore School of Law, where Professor Salem talks about changing paradigms (which is, of course, the theme of AFCC). I notice at the conference, a retired Georgia judge with connections to the “Institute for American Values” (David Blankenhorn, National Fatherhood Initiative, etc. etc.) is being quoted as well…

PORTFOLIO OF FAMILY-RELATED GRANTS (WM. T. GRANT FOUNDATION) AWARDED BEFORE 2012. Please note that the FIRST one is from MDRC (where Granger, above, used to work) and is speaking about a Healthy Marriage setup.

The first grant listed is encouraging people to submit daily diaries; it’s targeted to low-income families. Good grief! It is to supplement a much larger initiative supported by HHS (i.e., taxpayers):

I noticed that this grant, above, listed a Mark Cummings, Ph.D., as its principal investigator, and decided to look him up. He’s at UCLA, holding a “Notre Dame” professorship in psychology (or something like that). His 42-page CURRICULUM VITAE shows CLEAR connections to Tavistock Institute (London) as far back as 1987, William t. Grant Foundation (1988), and ongoing involvement in Fatherhood Conferences, plus in from 2008-2010 received over $1 million of grants from Wm. T. Grant foundation, while (2007ff) also being a reviewer FOR the Wm. T. Grant Foundation (whether of projects, or applications, I DNK) and such like. In between he is getting money from NIH, and — all in all — I feel this curriculum should be looked at:
I DNK if he’s any relationship to the Nicholas Cummings extended family (possibly not), but is definitely in the same field. As you can see, there’s fame and funding in psychology these days, if you play your cards right and agree to using other humans for subject matter at public expense! His first journal editing experience (1984) was around “Genetic Psychology” (interesting….)…

The Supporting Healthy Marriage project is the first large-scale, multisite, multiyear, rigorous test of marriage education programs for low-income married couples. Supported by the Administration for Children and Families within the U.S. Department of Health and Human Services (HHS), the project is motivated by research that indicates that married adults and children raised by both parents in stable, low-conflict households do better on a host of outcomes. Low-income couples face greater challenges to building and maintaining healthy marriages, however, and their families are consequently less likely to experience their benefits. While an extensive body of evidence on strengthening couple relationships exists, this research consists primarily of small-scale studies of typically short-term programs for middle-class couples.

Supporting Healthy Marriage is part of a larger HHS research agenda to study the effectiveness of efforts to strengthen family relationships. Other research projects include the Building Strong Families evaluation of programs targeted to low-income unwed couples beginning around the time of their child’s birth, and the Community Healthy Marriage Initiative Evaluation, which is evaluating community saturation approaches for strengthening healthy marriage.
Introductory letter to this “TOOLKIT” (translation — where public money meets with private to socialize people who might become target audiences, like if they need some social services from the government at some point in time. AKA Welfare diversions) — shows that the Carnegie Foundation, Brystol-Myers Squibb (pharmaceutical), Annhaeuser-Busch (i.e., booze), and several other foundations (Annie E. Casey, family wealth from UPS, etc.) are all interested in promoting healthy marriages among low-income families…

Sample (2012) ‘Social Policy Report” from Wm. T. Grant foundation showing they are trying to apply scientific demonstration on educational practices to produce desired outcome, etc. This all has to do with the Department of Education’s huge influence on what Americans know and believe, particularly low-income ones.

Well, enough for the general idea!

2 thoughts on “Ruthless Giants, Magnificent Philanthropists (Cecil Rhodes, Andrew Carnegie, )=Our World Today

  1. Pingback: A Stunning Validation by Jeffrey Moussaieff Masson: The Assault on Truth, The Origins of Psychoanalysis « Let's Get Honest Blog

  2. Pingback: Private Equity Winds Changing their Tack? Private Equity = Government Policy, so Pay Attention! | Let's Get Honest! Blog

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