Andrew William Mellon

views updated Jun 11 2018

Andrew William Mellon

American businessman Andrew William Mellon (1855-1937) crowned a highly successful entrepreneurial career with over a decade of service as U.S. secretary of the Treasury.

Andrew Mellon was born on March 24, 1855, in Pittsburgh, Pa. Unlike most members of the industrial elite of his generation, Mellon attended college, although he withdrew shortly before graduation.

In 1882 Mellon became the owner and manager of the family banking firm, T. Mellon & Sons. A few years later he provided financial assistance for the enterprise which would become the Aluminum Company of America, and this concern was controlled by the Mellon family. He began to invest in the oil industry in the 1890s and was one of those who organized the Gulf Oil Corporation in 1901. Mellon invested in a variety of other industrial firms and became a director of many of them. In 1902, when the family private banking house was converted into a commercial bank, the Mellon National Bank of Pittsburgh, he was designated president. As a result of these endeavors, Mellon (gifted with an extraordinary ability to pick winners) achieved great wealth and was "one of the richest men in America."

Mellon dabbled in Republican politics in Pennsylvania, was acquainted with such political notables as Matthew S. Quay, Boies Penrose, and Philander C. Knox, and was a major financial contributor to his party. As a result of these associations plus behind-the-scenes activities, Mellon was appointed secretary of the Treasury by President Warren G. Harding. Partly because of his talent and partly because of the primacy of economic matters during the 1920s, Mellon became the most influential member of the Cabinet under both Harding and his successor, Calvin Coolidge. He was popularly referred to as the "greatest secretary of the Treasury since Alexander Hamilton."

Mellon was a political conservative, and his policies, particularly his opposition to progressive taxation, reflected this. Despite criticism by a minority of citizens, under Mellon's guidance the burden of taxation on those of above-average income was drastically reduced but that on the bulk of the taxpayers was lowered to a much lesser extent. Some of his tax policies benefited Mellon personally and his companies as well; this was true of both the law and the administrative rulings. As one critic said, "The Mellon tax policy, placing its emphasis on relief for millionaires rather than for consumers, made the maldistribution of income and oversaving even worse."

Mellon continued as secretary of the Treasury under President Herbert Hoover. Mellon interpreted the Great Depression of 1929 as a natural phenomenon and favored deflation; he was critical of public works and pursued a traditional policy of economy. In early 1930 Mellon observed, "I see nothing in the present situation that is either menacing or warrants pessimism." However, a combination of criticism of his tax policy and the Depression itself eventuated in his resignation. Hoover persuaded him to accept an appointment as ambassador to Great Britain in 1932.

Mellon returned to private life with the end of the Republican era in the White House and devoted himself to philanthropy. His superlative art collection was donated to the Federal government in 1937 and constituted the foundation of the National Gallery of Art in Washington, D.C.

By getting in on the ground floor of what later became highly profitable enterprises, Mellon had succeeded in becoming rich. His public life, although but a dozen years in duration, was of sufficient prominence so that the history of the 1920s is incomprehensible without reference to him. The Depression resulted in a reversal of public sentiment, so that those of his policies which had once been applauded by the majority were later cited as illustrations of favoritism and special interest and perhaps even as causal factors in the magnitude of the Depression. Mellon died in Southampton, N.Y., on Aug. 26, 1937.