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In his autobiography, Andrew Mellon's father writes: "Poverty […] is a blessing to young men of ordinary force of character: it protects them from excesses, withholds unwise pleasures and indulgences, teaches the value of time and wealth, and the necessity of well doing to better their condition" (source).
Easy to say when you're a rich guy. Remember that next time you have to choose between pizza and textbooks. It's character-building.
Despite his dad's praise of poverty, it wasn't a condition that Andrew Mellon was all that familiar with. Andrew spent the vast majority of his life very rich, and used his position in the federal administration in the 1920s to make other people rich. It worked until that stock market crash in 1929.
Mellon and Coolidge were bosom buddies when it came to the economy, and together they made that vision a reality. Mellon helped define the economy of the 1920s.
Andrew Mellon grew up in a prosperous Pittsburgh home, son of a prominent businessman and judge. It's easy to remember because they called him Thomas "the Judge" Mellon.
The Judge was wealthy, but was firmly against the ostentation and frivolity exhibited by so many of the other super-rich tycoons of the 19th century. He referred to them as the "shoddyocracy." The Judge kept a stern household, without a lot of hugs and participation trophies (source).
After the Civil War, the Judge stopped being a judge. He founded a well-respected bank in Pittsburgh, which at that point was booming from industry and oil. His son Andrew was always his most trusted family member when it came to the business. The Panic of 1873—a financial downturn caused in part by investor speculation and overbuilding in the railroad industry— hit the bank hard, almost spelling out the end of the Mellon banking empire. The Judge managed to keep it afloat, and soon afterwards Andrew started working for the bank. By 1882, Andrew had proven himself so capable that his father transferred ownership of the bank to his son (source).
The Panic of 1873 taught Andrew valuable lessons about how volatile the American economy could be. He learned that it was prone to booms and busts, which couldn't be prevented but had to be survived (source).
By the turn of the century, Mellon began diversifying his interests. He was interested in new industrial technologies, so he founded the Aluminum Company of America (Alcoa) and the Gulf Oil Corporation. He joined up with Henry Clay Frick, another art lover and major player in the American Gilded Age economy, to found the Union Steel Company.
By the time he was appointed Secretary of the Treasury by Warren Harding in 1921, Mellon was one of the richest men in America (source).
Mellon was still mostly a name in Pennsylvania until Warren Harding made him Secretary of the Treasury in 1921. After that, he was a household name all over the U.S.A.
Like the Republican presidents of the 1920s that he served—Harding, Coolidge, and Hoover—Mellon opposed the U.S. joining the League of Nations and was supportive of using business strategies to improve the federal economy.
He came up with the "Mellon Plan," which included the tax reductions, reduced deduction opportunities for businesses, and the creation of a Board of Tax Appeals (source). Although the full plan never got the full approval of Congress, parts were passed, and massive tax cuts were rolled out gradually over the course of the early 1920s. Mellon and Coolidge both wanted to do away with taxes that had been enacted to help raise money for the war. The war was over.
Mellon did get major tax cuts—the tax rate for the richest Americans plummeted from 73% to 25%—and by working with the administration he also helped lower the national debt from $26 billion in 1920 to under $18 billion by 1926 (source).
He was tangentially involved in the Teapot Dome scandal of Warren Harding's administration, but Harding's death and Coolidge's popularity made the congressional committee give up on the investigation into his role. He was also unofficially part of the committee that eventually came up with the Dawes Plan to deal with European war debt, and kept an eye on the proceedings until he was satisfied that the European economy was improving and those countries would be able to pay back the United States (source).
Once teamed up with Coolidge, they cut taxes and government spending, and opposed unions and government regulation of businesses. The economy and American industry boomed.
Mellon wasn't without his critics. Throughout the 1920s he remained involved in Pennsylvania politics, using his position as Pittsburgh royalty to influence the outcome of elections and get free Pirates tickets for his buddies. Some of his economic policies, especially the end of estate and gift taxes, benefitted himself directly, leading some people to say he was just using his role to help himself and his friends.
In reality, Mellon thought that reducing taxes would make more people pay them instead of avoiding them, and he himself was the third largest taxpayer in the country (source). But he definitely got some nice perks from the deal.
Once the Great Depression hit, Mellon didn't bow to pressure for government involvement, because he had gone through economic depressions before and saw it as just part of the price you pay for a free market economy. The rest of America didn't quite see it that way, and they turned against Mellon and his policies. In 1932, he resigned his post in the cabinet to be the U.S. ambassador to England.
Towards the end of his life, he was prosecuted for tax evasion under FDR, who wasn't fond of Mellon, but he was found not guilty (source).
Mellon used his wealth to amass a huge art collection, and in 1936, Mellon offered his collection and money to FDR to found a national art museum. Despite FDR's hatred for Mellon, the offer was too good to pass up, and the National Gallery of Art in Washington, D.C. was born. Although Mellon wouldn't live to see it finished, he picked the architect and made sure the place wouldn't be named after him. Mellon wanted the museum to be a truly national institution, with contributions from many others (source).
Mellon died of a type of pneumonia in 1937. Although his financial policies were hugely influential during Coolidge's presidency and the rest of the1920s, nowadays he's known more for his role in the National Gallery and the Andrew W. Mellon Foundation, which was started by his children but named for him.
If you can't make it to the Louvre or the Uffizi Gallery, thank Andrew Mellon for DaVincis and Rembrandts right in your own national backyard.