The Rich Man’s Burden And How Andrew Carnegie Unloaded It

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When he finally entered the field of higher education, it was by the back door, and only then by violating his own cardinal principle of not making charitable gifts to a whole class of impoverished individuals. It was Henry S. Pritchett, the president of the Massachusetts Institute of Technology, who was to open this door to Carnegie by raising the question of teachers’ pensions. Like most men of very limited formal education, and particularly men of European background, Carnegie held college professors in awe. To discover that college professors might teach for several decades and not achieve a salary above four hundred dollars a year, with no provisions for retirement, was for Carnegie a shocking revelation. Office clerks at Carnegie Steel earned as much or more.

The low salaries that prevailed throughout the academic profession were of particular concern to Pritchett, who, as head of a scientific technological school, had a great deal more difficulty in recruiting able men than did the administrative officers of the traditional liberal-arts colleges. Now that many of the basic industries were following Carnegie’s early example of employing chemists, physicists, and professionally trained mechanical engineers, educational institutions, even those as distinguished as M.I.T., did not find it easy to compete for personnel with companies that paid salaries three to five times higher. Another college personnel problem resulted from the fact that there were no pension plans for professors. Out of purely humanitarian concern, a college was often obliged to keep on its active teaching staff an elderly faculty member who should have been retired, thus denying a place to a young and valuable instructor. This situation further discouraged young men from going into the teaching profession.

Carnegie listened intently to Pritchett’s arguments, and by the spring of the year 1905 he was ready to announce his latest philanthropic foundation, the Carnegie Teachers Pension Fund, with an endowment of ten million dollars. Under the terms of this grant as proposed by Carnegie, a board of trustees, composed of twenty-two of the leading college and university presidents in the United States and Canada, was to establish pensions for faculty in private but nonsectarian colleges and universities “under such conditions as you [the trustees] may adopt from time to time.”

Had Carnegie simply set up a pension fund for all college teachers in private institutions, the trustees would have had little to do but see that there was a proper administration of the funds. It was Carnegie’s strong bias against sectarianism, plus the phrase “under such conditions as you may adopt,” that encouraged this able group of college administrators to set standards for higher education. The fund, at first incorporated under the laws of New York State, within a year received a national charter by act of Congress under a more appropriate name: The Carnegie Foundation for the Advancement of Teaching.

The first act of the trustees was to send out a questionnaire to 627 institutions of higher education throughout the United States and Canada, asking each college the size of its endowment, what educational standards it had established for admission and for graduation, what its relation to the state or province was, and what, if any, sectarian ties or obligations it had. Replies were received from 421 institutions, and the trustees then proceeded to establish standards for admission to the pension fund. They first decided that no school with an endowment of less than two hundred thousand dollars would be considered. No school that received a substantial portion of its operating funds from the state was eligible. No school that required a majority of its trustees to belong to a particular denomination or that had a sectarian requirement for its president, faculty, or student body, or that had a required course in a particular religious creed or sect would be eligible. Finally, no school that did not require of its students what the Carnegie board of trustees regarded as a minimum of preparation prior to admission to the college could qualify. Of the 421 original applicants, the trustees accepted only fifty-two for admission into the pension plan.

There were some surprising rejections. Northwestern and Brown universities were kept out on sectarian grounds. The University of Virginia, a private university founded by Thomas Jefferson, was eliminated because its admissions standards were too low. Of the fifty-two institutions selected, twenty-two were located in New England and New York State. Only one southern school, Tulane University, was admitted. Vanderbilt and Randolph-Macon, both of whose educational standards were acceptable, were rejected on sectarian grounds.

In those schools that had not been selected, the anguished cries and threats of faculty members shook college administrations with a violence that Carnegie and Pritchett could hardly have imagined. There were emergency sessions of boards of trustees throughout the country, and charters that had once been considered inviolate were in many places quickly changed to remove sectarian requirements. Bates College went to the state legislature of Maine and successfully pushed through a new act of incorporation that changed its former relations with the Free Baptist Church. The University of Virginia raised its standards of admission, which had an immediate impact upon secondary schools throughout Virginia and in other parts of the South. Inadvertently, Carnegie, with his pension plan, had done more in a year to advance the standards of higher education within the United States than probably any carefully conceived program to accomplish that goal could ever have done.