The Life and Legacy of Andrew Mellon

A Review of David Cannadine’s Mellon: An American Life

David Cannadine was born in Birmingham, England and educated at Cambridge, Oxford, and Princeton Universities. He is the editor and author of many acclaimed books, including The Decline and Fall of the British Aristocracy. He has taught at Cambridge and Columbia universities. He is Chairman of the Trustees of Britain’s National Portrait Gallery.

BY EMILY DU

In Pittsburgh, Pennsylvania during the industrial boom of the “Age of Gold”—a time of relative prosperity in America from 1865 to 1933—a cool, calculated capitalist emerged who would not only amass billions in personal wealth, but who would also influence the economy on a national scale leading up to the Great Depression. He was a largely private man, preferring to operate his businesses outside of the limelight, unlike his more well-known contemporaries Andrew Carnegie and John D. Rockefeller. He would branch into politics, becoming the Secretary of Treasury for Presidents Warren Harding and Calvin Coolidge. His name was Andrew Mellon. While Mellon is scarcely known today, British historian David Cannadine reveals the public, private, and political aspects of Mellon’s life in his biography, Mellon: An American Life. Cannadine examines the personal events and experiences in Mellon’s life, as well as his business ventures and political activity, connecting how all of these were intertwined in the life of one man; the result is a detailed chronicle of Andrew Mellon’s life and legacy as “a paragon of the Republican twenties... [and] pariah of the Democratic thirties.”1

Part One, “In the Shadow of His Father,” traces Mellon’s family history back several generations to his grandfather, whose name was also Andrew Mellon. However, Cannadine focuses more on Mellon’s father, Thomas Mellon, nicknamed “the Judge.” The Judge founded T. Mellon and Sons, a private bank which Andrew Mellon, along with his younger brother Dick, would assume control over after their father’s death. It was a perfect starting point for Andrew’s beginnings in business. An aloof and stoic patriarch who frowned upon any sort of frivolity, the Judge eagerly guided his sons into the business field with what he believed to be their best interest in mind. Andrew Mellon, who attended Western University, abided by his father’s convictions and believed strongly in hard work and self-reliance, traits which would propel him to success later in life. While Mellon was prepared for the business world, fascinated by evolving industry and economy, the stifling atmosphere of his youth left him with “a very un-rounded and un-warm personality.”2 However, his limited social skills did not hamper his obvious precocity for business; after 1890, when the Judge transferred his assets to his sons, Mellon branched into industries such as aluminum and petroleum. Through these ventures, Mellon would showcase his “extraordinary gift for spotting and nurturing outstanding individuals with promising ideas.”3 In one particular example, Mellon’s loans through T. Mellon and Sons to the Pittsburgh Reduction Company, a new business that produced aluminum, substantially lowered aluminum prices while improving production efficiency. The Pittsburgh Reduction Company was a prime example of a “Mellon Company,” which means that Mellon’s “financial support was crucial at certain critical phases, but it was never a ‘Mellon company’ in the sense of outright ownership.”4 Mellon experienced significant success in his business endeavors during these early years, yet “[his] drive to acquire was an essential, perhaps preponderant, element of his nature, and had already become largely a substitute for, and an escape from, personal intimacies and commitments.”5 It therefore comes as no surprise that it was not until Andrew Mellon was 45 years old that he fell in love and married Nora McMullen.

Part Two, “Wealth’s Triumphs, Fortune Travails,” which spans from 1900 to 1921, depicts a changing America that would set the stage for Andrew Mellon’s involvement in the federal government as Secretary of Treasury in the ensuing years. In 1919, there was a sea-change in American politics as persistent, widespread unemployment and popular unrest because of high taxes, high interest rates, and high levels of government debt distressed the public. Muckrakers such as Ida Tarbell targeted industrial giants such as the Standard Oil Company, but Mellon mainly ignored these criticisms, siding with business owners and overlooking the desires of the laboring class. Mellon’s political involvement increased during these years; while both he and his father were lifelong Republicans, and Mellon contributed financially to Senator Warren G. Harding’s 1920 campaign for president, “delighted with the platform... [of] a return to normalcy.”6 Mellon continued to amass wealth at skyrocketing levels; he is estimated to have been valued at over $100 million dollars—which is equivalent to a billion dollars in today’s currency—in 1914. While his finances flourished, Mellon’s personal life suffered as he divorced his wife Nora after a widely publicized scandal. Mellon did remain active in the lives of his two children, Ailsa and Paul, and would eventually reconcile his relationship with Nora.

The years between 1921 to 1933 are covered in Part Three, “The Rise and Fall of a Public Man.” During this time, Mellon began his political career by joining President Harding’s cabinet as Secretary of the Treasury. Mellon was initially reluctant to accept the offer; he was growing old, “[preferring] to exercise power and influence from the background,” and “was apprehensive about doing what would be a difficult job during the period of postwar adjustment.”7 However, he did end up taking the job, and it became his responsibility to bring about the “return to normalcy”—“restoring the prewar climate of low taxes, balanced budgets, manageable national debt, limited government, and a functioning international economy backed by the gold standard”—that Harding championed.8 One of the most important aspects of Mellon’s policy was his push to lower the income tax on the wealthy in an attempt to encourage investment. Decades later, this belief that “the rich would be motivated by tax incentives to invest their savings in productive enterprises while lower income earners would benefit by higher employment and rising wages” would be coined “supply-side” economics and the “trickle-down” theory.9 Mellon was already propagating this idea in the twenties. After the widely publicized corruption of Harding’s administration in the Teapot Dome scandal, Mellon proceeded with his own agenda during President Coolidge’s term. Dubbed the “Mellon Plan,” Mellon “aimed to reduce the surtax rate... as an incentive to the wealthy to shift their investments out of tax-exempt bonds and into industrial stocks.”10 He also implemented measures to reduce the top rate of surtax to 25 percent and repealed the remaining nuisance taxes that fell disproportionately on low-income earners, dispelling the erroneous idea that his tax reforms were designed to make the rich richer. By 1926, Mellon had aided in reducing the national debt by nearly a billion dollars a year. While Mellon did have harsh critics, “[his] reforms were supported by the best American economists of the time, and also by his Democratic predecessors.”11 The prosperity of the twenties reflected on Mellon as a personal success. Yet the onset of the Great Depression wrenched Mellon from the pedestal of reverence upon which the American people had placed him. The economy, previously based on productive investment in growth of resources and output, was increasingly rampant with unprecedented deposits and accumulating surpluses that had resulted in banks and businesses lending to brokers and speculators. Mellon did not take any action against these activities. This passivity was based on the idea that the economic slump would just fix itself; to Mellon, the latest downturn “was a symptom of a disease whose only cure was a harsh purgative of previous excesses, and the inevitable suffering must be stoically endured... until the poison had drained out of the system and good times returned—as, by the immutable law, they would.”12 As Hoover struggled to respond to the failing economy, “in the face of such wrenching and pervasive human suffering, Mellon constantly lectured the president on the importance of letting things be.”13

Part Four, “Old Man, New Deal,” covers the years between 1933 and 1937, the final years of Mellon’s life. During these years, after he was dismissed by President Franklin D. Roosevelt, and when he served as ambassador to Britain. The country, entrenched in the Great Depression, was in deep turmoil. There was a fervent attempt by Roosevelt to use federal power to address the economic crisis. The public generally supported these measures as a sign of the federal government’s proactive response, and Roosevelt waged a “new and radical national agenda into the nation’s politics, mobilizing popular opinion against what they graphically depicted as the old, tired, unsympathetic, discredited Republican order of politicians and businessmen: Andrew Mellon and his brethren.”14 There was a strong backlash against Republican presidents Harding and Coolidge, as well as against Andrew Mellon, as “the shift in public regard [was] away from financiers as the guardians and geniuses of the economy in favor of the federal government... [indicating] the radicalism of what FDR had wrought within a few months of assuming office.”15 Every aspect of the Mellon system—“about the trade cycle, about individual self-reliance, about laissez-faire, about bankers and bosses, about workers and unions, about minimally intrusive government”—was uprooted and done away with.16 In an attempt to antagonize Mellon, the Bureau of International Revenue accused him of income tax evasion. Throughout the entire ordeal, Mellon vehemently denied all of the accusations, proclaimed his innocence, and was not found guilty. By the 1936, Mellon learned that he was diagnosed with cancer and in the years leading up to his death in 1938, he pursued his dream of establishing a national art gallery. An avid art collector, Mellon paid for the construction of the National Gallery of Art in Washington D.C., donated his personal collection to its gallery, and provided a hefty endowment. Mellon specified that the gallery was not to bear his name. He “reasoned that other collectors would be more likely to give their paintings to an institution whose aggrandizement would honor the nation as a whole, not the memory of an individual.”17 These humble requests exemplify his “customary reticence,” and show that he was “more concerned with perpetuating Mellon power than... flaunting Mellon presence.”18

In his book, Cannadine gives an unprecedentedly holistic view of Andrew Mellon, covering Mellon’s influence on America during his lifetime as well as after. In the preface, Cannadine addresses that he compiled the biography at the request of Andrew Mellon’s son, Paul Mellon, after several attempts by various people to produce a biography failed. Cannadine himself is a British historian and primarily commentates on British public life and the British monarchy. His presentation of Mellon’s biography is very objective and straight-forward; the book seems to be written as a compilation of quotes and Cannadine’s conjectures about Mellon’s personality based on these primary sources.

In a critical review of the book by Steve Forbes, editor-in-chief of Forbes magazine, Forbes summarizes the book in detail, but claims that “Mr. Cannadine clearly doesn’t appreciate Mellon’s relentless ‘accumulation’ of capital,” nor does the book “exhibit a true understanding of the economics of the 1920s and 1930s.”19 Bob Hoover of the Pittsburgh Post-Gazette praises Cannedine’s attention to detail in his research, but simultaneously cites this fact as a negative trait, explaining that “[Cannadine’s] attempts to interpret this tightly repressed man are often lost in the barrels of facts and figures that make up the public life of Andrew Mellon.”20 Hoover also makes special note of Cannadine’s emphasis on Mellon’s art-collection, noting the extensive information that Cannadine provides about many of the negotiations involved in Mellon’s acquisition of his collection.

The breadth of information pertaining to Mellon’s life is one of the key assets of the book. While Cannadine finds Andrew Mellon “a fascinating biographical subject but an unsympathetic person with unappealing politics,” he does not allow his personal beliefs about Mellon to affect the biography itself.21 Cannadine himself says, “In researching and writing this book, I have learned so much more about [Mellon] than his son or daughter ever knew, and I have sought to reach as evenhanded a verdict about him as the evidence allows.”22 While Cannedine’s desire to be thorough explains the slew of details and information, his descriptions about Mellon’s negotiations involving his art were too specific and superfluous; it slowed the pace of the book and disrupted the natural flow of chronology that governs the book.

The 1930s was a watershed in American history because it catalyzed a shift in public opinion concerning the role of the federal government. Prior to the Great Depression, the public was generally skeptical of government regulation and intervention in any affairs—especially economic. This desire for limited economic intervention—laissez-faire—was reflected in Andrew Mellon’s staunch beliefs of the natural business cycle of prosperity and downturn which he believed should not be tampered with by the government. Yet Mellon was not oblivious to the unstable and unreliable nineteenth century American financial system; the panic of 1873 made Mellon realize that the economy was unstable and constantly fluctuating. Bouts of prosperity overshadowed tough times though; during the “Age of Gold,” Mellon was heralded as a physical embodiment of the success of a laissez-faire system. Yet the economic downturn that began with the Stock Market crash in October of 1929 brought about a sea-change in the public opinion; people now wanted the government to intervene and alleviate the situation. The public’s disapproval with President Hoover stemmed from their belief that he wasn’t doing enough to assist the middle and lower classes especially with the economic stress, and that what little he was doing was not effective. Franklin D. Roosevelt used this discontent with the old economic order that was associated with the Republicans to his advantage by “[blasting] the recent policies of Hoover (and Mellon)—higher taxes and tariffs, reduced government spending, and shrinking money supply—as the worst that could be devised.”23 This denunciation of the laissez-faire system mirrors the public’s spiteful criticism of Andrew Mellon, a wrath that, for the remainder of his life, he was forced to personally endure. He had reached the zenith of his popularity in the early twentieth century prior to the economic downturn, and would never again be restored to his former glory. Furthermore, the public began expecting the government to assume responsibility of not only economic reforms, but social as well. This shift explains the popularity of Roosevelt’s New Deal and its success in placating the people, despite its ineffectiveness in ending the Depression or even in making any sort of considerable improvement in the situation. While there is and always has been controversy about the levels of government involvement, since the 1930s, there has undoubtedly been an increase in government involvement and a general acceptance of regulation as a necessity for stability.

David Cannadine’s book Mellon: An American Life delves deeply into one concentrated aspect of the Great Depression—the life of a single man. Cannadine chronicles in minute detail the life of Andrew Mellon, and thus offers a bridge between the history of an individual’s life and the history of an entire nation, if not also the world. The widespread influence of this man’s actions and beliefs affected the economic situation just as much as the situation itself would later affect him. On a grander scale, Andrew Mellon’s life was only a single facet of the tremendously complex crisis that was the Great Depression.

Endnotes

Student Bio

Emily Du is a junior at Irvine High School. In her free time, she likes to play the cello and go running. If she had more free time, she would spend time with her friends and read more books. Emily has plans to become a medical doctor and work with Médecins Sans Frontières.