Andrew W. Mellon

Andrew William Mellon (March 24, 1855–August 27, 1937) was an American banker, industrialist, philanthropist, art collector and Secretary of the Treasury from March 4, 1921 until February 12, 1932.

Early life

He was born in Pittsburgh, Pennsylvania, the son of the banker and Judge Thomas Mellon and Sarah Jane Negley Mellon and brother of Richard B. Mellon. He was educated at the Western University of Pennsylvania (now the University of Pittsburgh), graduating in 1873.

Financial prodigy

Mellon demonstrated financial ability early in life by starting a lumber business at the age of 17. He joined his father's banking firm, T. Mellon & Sons, two years later and had the ownership of the bank transferred to him in 1882 at the age of 27. In 1889, he helped organize Union Trust Company and Union Savings Bank of Pittsburgh. He also branched out from banking into industrial activities, and amassed a fortune from oil, steel, shipbuilding, and construction. He ranked as one of the three richest people in the United States alongside John D. Rockefeller and Henry Ford.

Family

In 1900, he married Nora McMullen in Hertford, England, and had two children, Ailsa Mellon-Bruce in 1901 in Pittsburgh, Pennsylvania, and Paul Mellon in 1907.

In 1903 along with his brother, Richard B. Mellon, he established a memorial to his father, the Mellon Institute of Industrial Research, today a part of Carnegie Mellon University.

Career

Fundraising

During the World War I years he participated in many fundraising activities such as the American Red Cross, the National War Council of the Y.M.C.A., the Executive Committee of the Pennsylvania State Council of National Defense, and the National Research Council of Washington.

Cabinet secretary

Andrew Mellon was appointed U.S. Secretary of the Treasury and became a member of the Cabinet of President Warren G. Harding in 1921. The President, in his address on March 4, 1921, had called for a prompt and thorough revision of the tax system, an emergency tariff act, readjustment of war taxes and creation of a federal budget system, among others. These were policies Mellon wholeheartedly subscribed to, and his long experience as a banker qualified him to set about implementing these programs immediately. As a conservative Republican and a financier, Mellon was irritated by the manner in which the government's budget was maintained, with expenses due now and rising rapidly, with income or revenues not keeping pace with those expense increases, and with the lack of savings.

The Mellon Plan

In November 1923, Secretary Mellon presented to the Chairman of the House Ways and Means Committee a letter in which he outlined what has come to be known as "Mellon Plan". It was a program for tax reform based upon the idea of lowering taxes out of surplus revenues. It subsequently became law as the Revenue Act of 1924, although without some of the reforms Mellon advocated. It did reduce the taxpayers' bill by some $400 million annually over what would have been collected if the 1921 tax rates had remained in effect. Mellon reduced the public debt (largely inherited from World War I obligations) from almost $26 billion in 1921 to about $16 billion in 1930, when the depression caused it to rise again.

Ambassador

Mellon became unpopular with the onslaught of the Great Depression. Upon leaving the Treasury Department and President Hoover's Cabinet in February 1932, Mellon accepted the post of U.S. Ambassador to the United Kingdom, serving for one year and then retiring to private life.

Private life

During his retirement years, as he had done in earlier years, Mellon was active in philanthropy, and gave generously of his private fortune to support educational, cultural, and research causes.

Throughout his lifetime, Mellon exhibited an ability for recognizing the potential value of a person or an idea, and was willing to back his conviction with financial support. Three such infant concepts that grew to giant proportions were his backing of Charles M. Hall, which Mellon built into the Aluminum Company of America; his aid to Edward Goodrich Acheson, becoming his partner in manufacturing carborundum steel, which Mellon built into the Carborundum Company; and creation of an entire industry through his help to Heinrich Koppers, who invented coke ovens which transformed industrial waste into usable products such as gas, tar, and sulfur.

However, he did make mistakes. For example, in 1925 he praised Mussolini as a "strong man with sound ideas and the force to make these ideas effective," while arguing that Mussolini deserved US support and sympathy.

In 1937, he donated his art collection, plus $10 million, to build the National Gallery of Art in Washington, D.C.

Andrew W. Mellon died on August 27, 1937, in Southampton, Long Island, New York.

The Andrew W. Mellon Foundation, the product of the merger of the Avalon Foundation and the Old Dominion Foundation (set up separately by his children), is named in his honor, as is the 378-foot U.S. Coast Guard Cutter Mellon.

Mother: Sarah Jane Negley (b. 1817, d. 1909)
Brother: Richard B. Mellon (b. 1858, d. 1933)
Wife: Nora McMullen (m. 1900, div., d. 1973)
Daughter: Ailsa Mellon Bruce (b. 1901, d. 1969)
Son: Paul Mellon (b. 1907, d. 1999)

Books

Taxation: The People's Business (1924)

References

Biography at the U.S. treasury department

External links

The Andrew W. Mellon Foundation
taxhistory.org - an essay on Mellon's tax policies

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