upon the subject of our manufacturing interests, I may record
that on July 1, 1892, during my absence in the Highlands of Scotland,
there occurred the one really serious quarrel with our workmen in our
whole history. For twenty-six years I had been actively in charge of
the relations between ourselves and our men, and it was the pride of
my life to think how delightfully satisfactory these had been and
were. I hope I fully deserved what my chief partner, Mr. Phipps, said
in his letter to the "New York Herald," January 30, 1904, in reply to
one who had declared I had remained abroad during the Homestead
strike, instead of flying back to support my partners. It was to the
effect that "I was always disposed to yield to the demands of the men,
however unreasonable"; hence one or two of my partners did not wish me
to return.[42] Taking no account of the reward that comes from
feeling that you and your employees are friends and judging only from
economical results, I believe that higher wages to men who respect
their employers and are happy and contented are a good investment,
yielding, indeed, big dividends.

[Footnote 42: The full statement of Mr. Phipps is as follows:

_Question:_ "It was stated that Mr. Carnegie acted in a cowardly
manner in not returning to America from Scotland and being present
when the strike was in progress at Homestead."

_Answer:_ "When Mr. Carnegie heard of the trouble at Homestead he
immediately wired that he would take the first ship for America, but
his partners begged him not to appear, as they were of the opinion
that the welfare of the Company required that he should not be in this
country at the time. They knew of his extreme disposition to always
grant the demands of labor, however unreasonable.

"I have never known of any one interested in the business to make any
complaint about Mr. Carnegie's absence at that time, but all the
partners rejoiced that they were permitted to manage the affair in
their own way." (Henry Phipps in the _New York Herald_, January 30,
1904.)]

The manufacture of steel was revolutionized by the Bessemer
open-hearth and basic inventions. The machinery hitherto employed had
become obsolete, and our firm, recognizing this, spent several
millions at Homestead reconstructing and enlarging the works. The new
machinery made about sixty per cent more steel than the old. Two
hundred and eighteen tonnage men (that is, men who were paid by the
ton of steel produced) we