Andrew Carnegie's employment by the Pennsylvania Railroad Company will prove vital to his later success.
The railroads are the first big businesses in America, and the Pennsylvania is one of the largest of them all.
Starting in 1853, he had worked as a secretary/telegraph operator at a salary of $4.00 per week under Thomas A. Scott.
At age eighteen, the youth had begun a rapid advancement through the company, becoming the superintendent of the Pittsburgh Division.
Carnegie had learned much about management and cost control during these years, and from Scott in particular.
Scott had also helped him with his first investments.
Many of these had been part of the corruption indulged in by Scott and the Pennsylvania's president, John Edgar Thomson, which consisted of inside trading in companies that the railroad did business with, or payoffs made by contracting parties "as part of a quid pro quo", as biographer David Nasaw writes. (Nasaw, David. (2005). Andrew Carnegie The Penguin Press, New York; pp.59–60).
In 1855, Scott had made it possible for Carnegie to invest $500 in the Adams Express, which had contracted with the Pennsylvania to carry its messengers.
The money had been secured by the act of his mother placing a $500 mortgage on the family's $700 home, but the opportunity was only available because of Carnegie's close relationship with Scott.
A few years later, he had received a few shares in T.T. Woodruff's sleeping car company, as a reward for holding shares that Woodruff had given to Scott and Thomson, as a payoff.
Reinvesting his returns in such inside investments in railroad-related industries: (iron, bridges, and rails), Carnegie has slowly accumulated capital, the basis for his later success.
Throughout his later career, he will make use of his close connection to Thomson and Scott as he establishes businesses that supply rails and bridges to the railroad, offering the two men a stake in his enterprises.
Before the Civil War, Carnegie had arranged a merger between Woodruff's company and that of George M. Pullman, the inventor of a sleeping car for first class travel that facilitated business travel at distances over five hundred miles (eight hundred kilometers).
The investment had proved a great success and a source of profit for Woodruff and Carnegie.
The young Carnegie had continued to work for the Pennsylvania's Tom Scott, and introduced several improvements in the service.
In spring 1861, Carnegie had been appointed by Scott, who was now Assistant Secretary of War in charge of military transportation, as Superintendent of the Military Railways and the Union Government's telegraph lines in the East.
Carnegie had helped open the rail lines into Washington D.C. that the rebels had cut; he had ridden the locomotive pulling the first brigade of Union troops to reach Washington D.C.
Following the defeat of Union forces at Bull Run, he had personally supervised the transportation of the defeated forces.
Under his organization, the telegraph service had rendered efficient service to the Union cause and significantly assisted in the eventual victory.
Carnegie will later joke that he was "the first casualty of the war" when he gained a scar on his cheek from freeing a trapped telegraph wire.
Defeat of the Confederacy requires vast supplies of munitions, as well as railroads (and telegraph lines) to deliver the goods.
The war demonstrates how integral the industries are to American success.
