Andrew W. Mellon was one of the most successful financiers and businessmen in American history, served as Secretary of the Treasury for 11 years, and was a renowned philanthropist and creator of the National Gallery of Art in Washington, D.C., but until now there has not existed a published full biography of this important American. Shortly before his death in 1999, Andrew Mellon’s son, Paul, commissioned the British writer David Cannadine, author of The Decline and Fall of the British Aristocracy, to correct this deficiency. The result fills an important void, but is not without faults.
Cannadine stresses the influence of Andrew’s father, Thomas Mellon, on Andrew’s life, which he reinforces by heading each chapter with a quote from Thomas Mellon’s autobiography. Andrew Mellon was, no doubt, influenced by his father but based on the great amount of information that Cannadine has collected and presents, Andrew Mellon’s character was not so “paternally ordained” as Cannadine portrays.
Thomas Mellon was born of Scotch-Irish immigrants who came to western Pennsylvania to farm in 1819. Thomas rejected farming for the exciting world of business in burgeoning Pittsburgh, and eventually made a fortune starting in real estate and expanding into coal, timber, construction and other ventures, including a bank.
In his autobiography, Thomas Mellon describes how he decided on marriage from a cold, calculated business frame of mind. Despite the lack of romance, his marriage turned out quite successful and he fathered eight children, only four of whom (all boys) would survive beyond early adulthood. He set up the oldest boys in business ventures which turned out successful, and he eventually put Andrew, the third oldest, in charge of the Pittsburgh banking enterprise, in which he was later joined by his younger brother, Dick. Cannadine claims that the hard driving patriarch Thomas, in pushing his sons to take on and expand his business concerns, had succeeded in bending his sons to his will. But there is no evidence that these boys’ wills needed much bending — they all seemed eager to take on the task.
While serving as Secretary of the Treasury late in his life, Andrew Mellon said, “work is the only honorable occupation, and […] life has more to offer than merely the spending of money on selfish enjoyment.” This philosophy was shared by Andrew’s father. But Andrew diverged drastically from his father’s example in many other ways, starting with his marriage.
WHILE IN HIS TWENTIES, Andrew was briefly engaged, but his fiancee was diagnosed with tuberculosis from which she soon died. Andrew then concentrated on his work at the bank and made a fortune, demonstrating an amazing ability to realize opportunities and to use finance to gain major or controlling ownership in what would become great companies, including Alcoa, Carborundum, and Gulf Oil. But then, at 44, while on a transatlantic voyage, his friend Henry Clay Frick introduced him to a young English woman named Nora McMullen. Though less than half his age, the shy and reserved Mellon got on famously with Nora, and, as is often the case with love, he did not employ the careful, cold analyses advocated by his father, but was driven by his heart and he saw in Nora what he wanted to see.
It was not a match made in heaven. It started to go bad as soon as the new couple got off the train in industrial Pittsburgh after their European honeymoon. The girl of the English countryside exclaimed to her millionaire husband, “You don’t live here?” Whereas Andrew perceived marital bliss, Nora did not enjoy the quiet evenings at home, and often felt that Andrew was more attentive to his business interests than to her. After Nora engaged in two flings with a married con artist named Alfred Curphey, she stunned Andrew by demanding a divorce. Things got nasty quick, as Nora threatened to accuse him in public of all sorts of lies, including that he had venereal disease and forced a young girl to have an abortion. Andrew feared that Nora was planning to take their two young children, daughter Ailsa and son Paul, back to England to live with the scoundrel Curphey, and a very public divorce case ensued. Andrew, who cherished his privacy, was publicly humiliated, and the emerging feminist press played up Nora as the victim of an unfeeling, rich, and powerful man. Andrew and Nora eventually settled out of court, agreeing to joint custody of the children. Nora would poison the minds of Ailsa and Paul against their father, but for his part, Andrew refused ever to say anything bad about Nora in front of the children. Oddly enough, Nora and Andrew would later reconcile, and remain friends during Andrew’s later years. But Paul and Ailsa would not learn the real reasons behind their parents’ divorce until after Andrew’s death.
Cannadine makes much of Andrew Mellon’s failed home life. Given the circumstances with Nora, it is not surprising that Ailsa (who shared her mother’s self-absorption and psychosomatic illnesses) and Paul (who found his father intimidating and who wanted no part of working in the “Mellon interests” but instead wanted a life of country leisure) had somewhat distant relations with their powerful father. Certainly this distance was partly a result of Andrew Mellon’s reserved nature — and the fact that he was nearly 50 years older than Paul. But to conclude, as Cannadine does, that Andrew Mellon was essentially an emotional cripple, unable to express love and lacking in humanity, seems unwarranted.
CANNADINE’S TREATMENT OF MELLON’S economic philosophy and achievements is mostly full and fair, though with some holes. One gets the sense that Cannadine is not completely at ease when discussing issues of finance and economics. It is clear, however, that he does not share Mellon’s extreme laissez-faire attitudes, and on occasion seems to imply that business activities lacking a charitable basis are somehow unseemly. But he does defend Mellon from many of the typical left-wing “greedy Robber Baron” accusations, hails his philanthropy, and gives him credit for sincerely believing that the economic philosophies he espoused would benefit the nation as a whole, and not just the rich.
Cannadine explains Mellon’s way of running his businesses: “He rarely sought quick profits, nor did he demand especially high dividends; he was committed to nurturing companies to prosperity, and once the business was in the black, he would always plow the earnings back into it and build a surplus.” One result of the Mellons’ prudent business management was that in the dark days of the Great Depression, depositors in the Mellon National Bank did not lose their savings.
Always a strong financial backer of the Republican Party, members of the Pennsylvania Republican machine moved to get Mellon considered as Secretary of the Treasury by president-elect Warren Harding in 1920. Mellon strongly resisted, but when Harding formally asked Mellon to take the job, he felt duty-bound to accept. He would become the longest serving Secretary of the Treasury in modern times, serving three presidents until 1932. As Secretary of the Treasury, he was forced to sell all his banking stock, which he sold to his brother Dick, and to refrain from engaging in commerce. He dutifully resigned from all his directorships, but he continued to have strategic discussions with Dick regarding the Mellon Bank and with the boards of Alcoa and other “Mellon interests.”
As the economy recovered from the depression of 1921 and moved into the “roaring twenties,” Mellon was hailed by many as the “greatest Secretary of the Treasury since Alexander Hamilton.” Mellon successfully advocated dropping the highest marginal income tax rate to 25% in order to get the rich to pay more in taxes (nearly 60 years before the so-called “Laffer Curve”), and moved to restructure European war debt into a realistic plan, helping, at least temporarily, to get European economies back on their feet. The private and shy Mellon seemed to bask in the praise, though, as usual, when he gave speeches his voice was invariably nearly inaudible.
The praise, however, would not last. By 1927 Mellon started to become inattentive to Treasury affairs, except for the building plan for the “Federal Triangle” area near the Mall which was under the auspices of the Treasury. He was an early advocate of getting the Federal Reserve to raise interest rates to curtail speculation in the stock market in 1929, but he did not follow the lead of his boss, Herbert Hoover, in strenuously opposing the disastrous Smoot-Hawley tariff of 1930, and as the economy began crashing in late 1930 and 1931 he advocated balanced budgets and higher taxes. Cannadine does not shed any light on what Mellon’s position was on the Federal Reserve’s failure to support the money supply (which shrank by one-third between 1930 and early 1933) and, in fact, Cannadine does not even mention this important contributor to the Great Depression, but only wrongly implies that the Federal Reserve did not have the authority to engage in significant open market operations to support bank reserves and inflate the money supply until 1935.
With the economy in free fall, the enemies of Mellon, both Democrats and progressive Republicans, called for his ouster based on his illegal continued business connections, and Hoover moved him out to London in 1932 to take over as ambassador to Great Britain, a role Mellon very much enjoyed.
THE MAIN REASON THAT MELLON was inattentive to Treasury matters in the late twenties and early thirties is that he was concentrating more on what became his passion in later life — paintings. He had started collecting paintings in a small way in the early 1900s, but by the 1920s he had become much more expert in art, and in handling art dealers, and had put together a significant collection. By 1926 or 1927 he had settled on the idea of expanding his collection with the aim of donating it to the country, and to this end actually bought several important art works that the new Soviet government was secretly selling from the Hermitage (like all Communist societies, the Soviets were much more adept at stealing and selling off the wealth of others than in creating wealth of their own).
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