It was discovered that the San Francisco & San Joaquin Coal Company's Tesla coal mines in Corral Hollow contained a rich deposit of clay. Fueled by California's rapid population growth and the subsequent demand for building materials mine owners James and John Treadwell of the Treadwell gold mine formed the Carnegie Brick and Pottery Company in 1902. The Treadwells named the company after philanthropist Andrew Carnegie. In 1904 the plant to make brick and architectural terra cotta was built near the Alameda and San Joaquin Railroad line, four miles east of Tesla. A town was in place with over 300 inhabitants (mainly Italian artisans) and the town's brick factory was producing upwards of 100,000 bricks per day. In 1904, the Pottery sewer pipe plant was built between Carnegie and Tesla.
In 1911 a flood destroyed bridges, roads, and buildings which the company could not afford to rebuild. The towns of Carnegie and Tesla were abandoned. The rail line from Carbona was abandoned by the Western Pacific Railroad in January 1916. In 1916 the company was sold to Gladding, McBean of Lincoln, California. The new owners, in an effort to reduce competition, sold off the factory's equipment and destroyed what remained of the town's buildings. On May 27, 1917 the tall smokestacks at the plant were dynamited.