Mellon: An American Life

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Author: David Cannadine

ISBN-10: 0307386791

ISBN-13: 9780307386793

Category: Banking - Biography

A landmark work from one of the preeminent historians of our time: the first published biography of Andrew W. Mellon, the American colossus who bestrode the worlds of industry, government, and philanthropy, leaving his transformative stamp on each. \ Following a boyhood in nineteenth-century Pittsburgh, Andrew Mellon overcame painful shyness to become one of America’s greatest financiers. Across an unusually diverse range of enterprises, he would build a legendary personal fortune, tracking...

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landmark work from one of the preeminent historians of our time: the first published biography of Andrew W. Mellon, the American colossus who bestrode the worlds of industry, government, and philanthropy, leaving his transformative stamp on each. Following a boyhood in nineteenth-century Pittsburgh, Andrew Mellon overcame painful shyness to become one of America s greatest financiers. Across an unusually diverse range of enterprises, he would build a legendary personal fortune, tracking America s course to global economic supremacy. Personal happiness, however, eluded him. He had been bred to do one thing, and that he did with brilliant and innovative entrepreneurship. Mellon s wealth and name allowed him to dominate Pennsylvania politics, and under presidents Harding, Coolidge, and finally Hoover, he made the federal government run like a business. But this man of straightforward conservative politics was no politician. He would be hailed as the architect of the Roaring Twentie... Library Journal Cannadine (British history, Inst. of Historical Research, Univ. of London; The Decline and Fall of the British Aristocracy) presents the first comprehensive biography of Andrew W. Mellon (1855-1937), a long-awaited, extensively researched project that serves its subject well. Cannadine introduces us to the shy, reticent Mellon, born into a Pittsburgh family of achievers, before moving on to his early work in lumber and banking, his ill-fated marriage to Nora McMullen, and his constant indulgence of his children, Paul and Ailsa. In 1914, he was the richest man in the United States. In public life, he served as the longest and most controversial secretary of the Treasury, retaining that office during the politically conservative years of Harding, Coolidge, and Hoover. He reduced the public debt from $26 billion in 1921 to $16 billion by 1930. Late in life, he gave $10,000,000 and 21 masterpieces purchased from the Hermitage in Leningrad (St. Petersburg), to establish the National Gallery of Art in Washington, DC. As Cannadine shows us, when Mellon's life ended during the New Deal, he stood for fiscal policies that were no longer supported. This is a valuable portrait of a banker, statesman, philanthropist, and art collector whose initiatives still resonate today. Highly recommended for all libraries, especially public libraries with a well-established history or business collection. [See Prepub Alert, LJ 6/1/06.] Mary C. Allen, Everett Lib., WA Copyright 2006 Reed Business Information.

\ \ Mellon\ \ \ An American Life\ \ \ \ By David Cannadine\ \ \ Knopf\ \ \ Copyright © 2006\ \ David Cannadine\ All right reserved.\ \ ISBN: 0-679-45032-7\ \ \ \ \ Chapter One\ \ \ THE PATRIARCH PRESIDES \ Father and Sons, 1855-73 \ Make your child a partner in your joys and sorrows, your hopes and fears; impart\ your plans and purposes; stand not on your dignity, but let yourself down to his\ capacity, if need be, and show your trust in him. You will be surprised to find\ how much a five or ten year old boy can understand of the ways of men, and how\ readily he will enter into your views.... I experienced the benefit of such\ training myself, and applied it in raising my own family with the most\ satisfactory results.\ Thomas Mellon and His Times, p. 29\ 1\ A THRIVING CAREER\ Andrew Mellon was the sixth child of Thomas and Sarah Jane Mellon, but he was\ only the fourth to survive infancy. His two sisters were already dead, and\ although he would not long remain the youngest son, he grew up among brothers\ only, in what Burton Hendrick called a "eugenic" family. Only the fittest would\ survive. At the time of Andrew's birth, his eldest brother, Thomas Alexander was\ eleven: the next, James Ross, was nine: and Samuel Selwyn was two. The two elder\ boys were close in age and interests: Andrew and Selwyn soon became a second\ pair, as would Richard Beatty ("Dick" or "RB"), who was born in 1858 and named\ for one of his father's oldest friends, and GeorgeNegley, who arrived two years\ later and was named for his mother's uncle. Even depleted by two early and\ wrenching deaths, this was a large bourgeois family by the standards of the\ time. But it was very much a Scotch-Irish Presbyterian household, and while\ Andrew Mellon knew far more comfort and security than most Pittsburghers, the\ atmosphere was intense and serious, rather than joyful or easy. Although\ surrounded by a lush and bountiful garden, the house at 401 Negley was gloomy\ and forbidding inside. For Thomas Mellon disdained the vulgar ostentation which\ he feared was "common among those grown suddenly rich," whom he dismissed as the\ "shoddyocracy," and his house was devoid of the elaborate ornamentation, both\ inside and out, that would became popular among the local plutocracy in\ subsequent decades. The blinds were often drawn, and the interior was a drab\ amalgam of Brussels carpets, heavy draperies, and somberly papered walls, with\ no pictures of any artistic merit.\ This was the morose world of Andrew Mellon's boyhood, but unlike his surviving\ siblings, he would continue to inhabit it as an ever more solitary son until he\ was in his mid-forties. Sarah Jane Mellon was the presiding matriarch, and\ although Thomas Mellon wrote little about her in his autobiography, she was\ clearly a redoubtable woman for her time. She was not only rich but tough,\ having survived eight pregnancies between 1844 and 1860. More conventionally\ religious than her husband, she was responsible for getting the family to East\ Liberty Presbyterian Church on Sundays. She also oversaw the household, baking\ the bread and cooking many of the meals herself. There was a domestic staff of\ three, including an intimidating housekeeper, Mrs. Cox. On the day of Andrew\ Mellon's birth, the housekeeper instructed James Ross Mellon to convey the news\ to his grandmother, Barbara Anna Negley, who lived nearby, and she soon appeared\ bearing a willow basket full of yellow apples which perfumed the birth room.\ Andrew Mellon's earliest recorded recollection was another scene of purposeful\ feminine domesticity-which he disrupted. When two years old, he crawled beneath\ a table at which his mother and her sister were sewing, and began cutting the\ edges of the table cloth with a pair of scissors which had fallen to the floor.\ Given his father's "high opinion of the strict exercise of parental authority,"\ it is difficult to believe this misdemeanor went unpunished.\ From the very beginning, Andrew Mellon was at the center of that large and\ growing family over which it had always been his father's ultimate ambition to\ preside. These were generally prosperous times in Pittsburgh, despite another\ slump in 1857, two years after Andrew's birth, which lasted to the end of the\ decade: thus he was also at the center of a large and growing industrial\ region. Oil was discovered nearby in 1859, and the iron industry continued to\ expand. By 1860, there were twenty-six rolling mills, twenty-three\ glassworks-and fourteen banks, all of which had survived the recent depression.\ With a population that had reached 50,000, the city ranked sixteenth in the\ United States, and Allegheny County as a whole claimed 178,000 inhabitants.\ Pittsburgh was also the birthplace of the Republican Party, which held its first\ convention there in February 1856: the Mellon family would be among its faithful\ for the next hundred years and more. In this buoyant, fertile environment,\ Thomas Mellon grew in wealth and stature. In 1857, the Allegheny County\ commissioners decided to double the real estate tax to pay the interest on bonds\ that they had imprudently floated to help finance railroad extension in the\ area. As befitted a lifelong opponent of tax increases and irresponsible\ speculation, an outraged Thomas Mellon helped organize public protests, and he\ spoke at many meetings. But his chief activities remained business and the law,\ at which he would work harder during Andrew Mellon's formative years than at any\ other time.\ Thomas Mellon continued to deal in debts, mortgages, real estate, and property\ developments, not just in Pittsburgh, but also more widely. In 1856, he took\ control from a defaulting mortgagor of a furnace property of 1,700 acres in West\ Virginia; it was his first acquaintance with iron production, but he chose\ against continuing operation because of the prohibitive costs of obtaining ore\ from nearby mountainsides. Three years later, he ventured more deeply into the\ coal business, and went into partnership with his wife's cousin, Felix Casper\ Negley. He financed the purchase of coal works at Braddock and Sandy Creek, but\ despite kinship, Negley proved an unreliable partner, and Mellon was later\ obliged to resort to "vexatious litigation." This was not his only business\ association that would go sour, and in his autobiography he would lament that\ his judgment of men and character was defective, and that he was too trusting\ and easily persuaded. Much more successful was a partnership with John B. Corey,\ David Shaw, and George M. Bowman, all of whom became trusted lifelong friends.\ The group invested in numerous collieries, among them the Waverly Coal and Coke\ Company, and they prospered mightily. "As to the coal business," Thomas wrote to\ his son James Ross, "I consider it one of the best, and it is highly\ respectable." "Coal," he would conclude, was "the most important article in\ productive manufacturers."\ At the same time, Thomas Mellon's legal practice was growing, and here, too, he\ sought partners, among them William B. Negley, his wife's nephew. But again\ collaboration created more problems than it solved: "I found it impossible," he\ later lamented, "to transfer clients who relied on me to my partners, without\ losing them altogether." By 1859, he was feeling "overwhelmed and oppressed"\ with his increasingly "taxing and monotonous" legal work, but fortunately an\ opportunity to lighten his load presented itself. In April that year, he was\ approached by three powerful and politically connected friends-Thomas M.\ Marshall, A. M. Watson, and Stephen Geyer-who invited him to run for the new\ position of associate law judge in the Court of Common Pleas. With their help,\ he secured the Republican nomination. The recently established party was\ Mellon's natural political home: northern-based, pro-business, anti-immigration.\ But he "knew nothing about party maneuvering and electioneering," and his\ dislike of the political process was such that he refused to campaign\ personally: "I did not go out at all or appear in public," he later recalled,\ "leaving electioneering in that line to my friends." They worked hard for him,\ and he won easily in the November election. He promptly dissolved his practice,\ and was duly sworn in on the first Monday of December 1859. Thereafter, Thomas\ Mellon was always known in Pittsburgh as "the Judge," or "Judge Mellon," and for\ the rest of his life, even after leaving the bench, he would dress in his formal\ attire from that time: a long-tailed frock coat and white shirt with a high,\ starched wing collar.\ For the next ten years, he shared the duties with a senior colleague (initially\ William B. McClure, whom he had met in 1838 at the prothonotary's office, and\ subsequently James P. Sterrett, who would end his days on the state supreme\ court), and they sat together, or separately, as they saw fit or as the pressure\ of the docket dictated, except in capital cases, where two judges were required.\ Previously renowned as a ferociously committed and determinedly partisan\ advocate, the Judge now moved with unexpected ease to Olympian impartiality.\ But in other ways, he remained characteristically forceful and unyielding. He\ had no qualms about sentencing criminals to death "if they clearly deserve it,"\ and he was predictably unsparing in his criticism of those he deemed to be\ hopeless or idle or failed-or Catholic. He believed that there was "entirely too\ much sympathy and consideration for criminals" on "the part of the unthinking\ multitude," and he soon became equally skeptical of the collective wisdom of\ juries. His initial inclination was to let the jurors hear the evidence and make\ up their own minds, with no direction from the bench. But he soon concluded that\ they were rarely capable of reaching a sensible conclusion about complex issues,\ and came to favor firm-handed direction from the bench. "The judge ...," he\ later observed, "may even go so far as to tell the jury how on the whole the\ weight of evidence strikes him: indeed it is his duty in most cases to do so."\ In later life, Andrew Mellon would have cause to remember-and indeed to\ share-his father's skepticism of jury trials.\ Although the Judge applied himself with predictable efficiency and thoroughness,\ he had been correct in anticipating that the job would be less stressful and\ demanding than his practice. With time on his hands, he was able to return to\ his relentless regime of solitary self-improvement which he had grudgingly\ abandoned after college. But since then there had been a revolution in\ political, theological, economic, and philosophical thought, as Bacon,\ Descartes, Berkeley, Locke, Hume, Reid, Stewart, and Brown were now joined-and\ in some cases supplanted-by Darwin, Spencer, Wallace, Huxley, Tyndall, Buckle,\ and Argyle, the "deities now installed in the temples of philosophy." From among\ these new thinkers, Thomas Mellon particularly relished Charles Darwin and\ Herbert Spencer. He found it easy to reconcile the theory of evolution with the\ tenets of Christianity: the history of the world extended forward in a long a\ chain of cause and effect, while the great First Cause of it all remained\ unknown and unknowable. And he found Spencer even more congenial: in his\ insistence that life was a struggle which only the fittest survive; in his\ belief in individualism and laissez-faire; in his hatred of socialism and\ militarism; in his abhorrence of state interference; and in his stress on the\ need for practical, problem-solving education. Darwin's and Spencer's were\ transformative books for the Judge's middle-aged thinking in the way that\ Franklin's had been during his youth. The Autobiography had sketched out an\ individual course of self-help and self-advancement; Darwin and Spencer provided\ the broader natural and sociological vindication of such a trajectory. The Judge\ had experienced life as a struggle; they explained his experience. And so he\ determined to prepare his sons to fight and to win in their turn.\ Judge Mellon's mature, solitary self-education proceeded amid searing and\ stirring national events. Indeed, the events initially facilitated his efforts,\ for the Civil War broke out scarcely a year after he was elected to the bench,\ and the resulting decline in litigation gave him more time to read and reflect.\ But while he appreciated the opportunity, he deplored the reason for it.\ Although abolitionist sentiment was overwhelming in western Pennsylvania, giving\ Lincoln a massive majority in Allegheny County, the Judge did not feel strongly\ either way about slavery. He thought "the Rebellion" was another foolish armed\ conflict, characterized by "imbecility and petty tyranny" on the part of\ military officers and by "folly and wickedness" on the part of politicians. For\ war meant more government intervention, and more government spending, and this\ in turn meant more debt and more taxes. "The waste and extravagance," he would\ later recall, "indulged in by the state and local authorities in military\ affairs was amazing." He thought military service a great mistake, and approved\ of enlistment only among those who combined low class and low intellect, and who\ would not be missed if they failed to return. By contrast, he thought "men of\ better qualities" should stay at home, and "the parents and friends of young men\ of promise" should "use all their influence" to guard them from the mistaken\ temptations of "military excitement." War, by Mellon's lights, was not a matter\ of glory and heroism and righteousness, but of waste and folly and ruin, and he\ lamented the death in uniform of his former foe-cum-friend at the Pittsburgh\ bar, Samuel Black.\ Whatever his feelings about it, the Civil War inevitably impinged on the Judge's\ affairs and on his family, making him "gloomy and melancholy." His brother\ Samuel and his uncle Thomas both supported the Confederacy, but a cousin of\ Sarah Jane's, General James S. Negley, served in the Union forces. Cargoes of\ coal that the Judge shipped downriver to New Orleans were impounded by\ Confederate troops, and he could secure the $40,000 he was owed in the\ transaction only by calling on his connections with the war secretary, Edwin\ Stanton, who had been a fellow Pittsburgh lawyer before joining Lincoln's\ cabinet. But these were not his only anxieties. A ballooning national debt and\ rising taxes led the Judge to fear that the entire Mellon fortune might be wiped\ out, and that the family would have to leave the state; nothing of the kind\ happened. A more creditable worry was that industrial Pittsburgh would be a\ target for the Confederate army, and in 1862 and 1863 the threat seemed clear\ and present: "our homes and property," the Judge remembered, "were at one time\ in actual danger of destruction by the rebels." Trenches were dug and defensive\ earthworks constructed; they passed close to the Mellon house, behind the\ orchards. Andrew Mellon was not yet ten, but he vividly recalled the workers\ digging and shoveling, and he stood guard over the Mellon cherry trees with an\ unloaded shotgun. He also remembered seeing Abraham Lincoln in February 1861,\ when his train stopped at Pittsburgh on the way to Washington for his\ inauguration. When the president-elect rose to speak, he amazed the boy as he\ "un-spiraled himself, like a snake," to a great height, and spoke in "gentle and\ well modulated" tones.\ (Continues...)\ \ \ \ \ \ \ \ Excerpted from Mellon\ by David Cannadine\ Copyright © 2006 by David Cannadine.\ Excerpted by permission.\ All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.\ Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.\ \

Preface     xiPrologue: A Family in History     3In the Shadow of His Father, 1855-1900The Patriarch Presides: Father and Sons, 1855-73     27The Family in Business: Boys and Banks, 1873-87     58The "Mellon System" Inaugurated: "My Brother and I," 1887-98     89The Great Leap Forward: Mergers and Matrimony, 1898-1900     123Wealth's Triumphs, Fortune's Travails, 1900-1921The Transition Completed: Family Man and Venture Capitalist, 1901-1907     155The First Scandal: Separation and Divorce, 1907-12     186Life Goes On: Business (Almost) as Usual, 1907-14     215New Careers for Old: Single Parent, Aging Plutocrat, Emerging Politician, 1914-21     245The Rise and Fall of a Public Man, 1921-33Hard Times with Harding: Political Realities, Getting Started, Settling In, 1921-23     277Better Years with Coolidge: Mellonizing America, Aggrandizing Himself, 1923-26     313Carrying On with Hoover: Great Ideas to Great Crash, 1927-29     356Triumphs amid Troubles: Fortune's Zenith, Russian Pictures, Pittsburgh Woes, 1929-31     395"The Man Who Stayed Too Long": Depression, Departure, London and Back, 1931-33     435Old Man, New Deal, 1933-37His World Turned Upside Down: An Unhappy Homecoming, 1933-34     473The Second Scandal: The"Tax Trial" and the National Gallery of Art, 1933-36     505Beginnings and Endings: The Gallery Established, a Life in Its Fullness, 1936-37     546Epilogue: A Fortune in History     583The Mellon Family     622A Note on Sources     625Abbreviations for Notes     629Notes     633Acknowledgments     735Index     739

\ Library JournalCannadine (British history, Inst. of Historical Research, Univ. of London; The Decline and Fall of the British Aristocracy) presents the first comprehensive biography of Andrew W. Mellon (1855-1937), a long-awaited, extensively researched project that serves its subject well. Cannadine introduces us to the shy, reticent Mellon, born into a Pittsburgh family of achievers, before moving on to his early work in lumber and banking, his ill-fated marriage to Nora McMullen, and his constant indulgence of his children, Paul and Ailsa. In 1914, he was the richest man in the United States. In public life, he served as the longest and most controversial secretary of the Treasury, retaining that office during the politically conservative years of Harding, Coolidge, and Hoover. He reduced the public debt from $26 billion in 1921 to $16 billion by 1930. Late in life, he gave $10,000,000 and 21 masterpieces purchased from the Hermitage in Leningrad (St. Petersburg), to establish the National Gallery of Art in Washington, DC. As Cannadine shows us, when Mellon's life ended during the New Deal, he stood for fiscal policies that were no longer supported. This is a valuable portrait of a banker, statesman, philanthropist, and art collector whose initiatives still resonate today. Highly recommended for all libraries, especially public libraries with a well-established history or business collection. [See Prepub Alert, LJ 6/1/06.] Mary C. Allen, Everett Lib., WA Copyright 2006 Reed Business Information.\ \ \ \ \ Kirkus ReviewsLavish, multifaceted portrait of the early-20th-century American business titan, emphasizing the man rather than the money. British historian Cannadine (In Churchill's Shadow, 2003, etc.) shows power, politics, art and money all working together in the life of Andrew Mellon (1855-1937). Born and bred into the world of finance and industry, Mellon was shy and obsessed with self-sufficiency. A lengthy opening section here on Mellon's father, Thomas, explains his impact on his son's character. At 19, Mellon began work at the family bank under his father's watchful eye. Their formula for success-invest to increase value; leave get-rich-quick schemes to fools-was hardly revolutionary, but Cannadine's exposition of the early years lays the groundwork for a fuller picture of Mellon. Somewhat repetitive stories of mergers and acquisitions (both financial and artistic) frame the story of Mellon's personal struggles. Less than adept in relationships outside the office, at 43 he fell for and married an English girl of 19. The marriage ended in divorce 14 years later, the first of two major scandals the otherwise private Mellon endured. (The second involved accusations of tax fraud in the mid-1930s by a hostile New Deal government.) Though the financier preferred to exercise his power out of the spotlight, circumstances often moved him to the center of attention. When asked to become Secretary of the Treasury in 1921, Mellon would have liked to turn down the offer in order to concentrate on building closer ties with his estranged daughter, but he felt obligated to help rebuild a country recovering from war. Once in Washington, he saw an opportunity to leave a lasting legacy in the form of theNational Gallery of Art. Although he didn't live to see its completion, his dream was ultimately fulfilled. Cannadine's insightful account reveals Mellon as a man who took personal risks that seemingly defied his upbringing. Grand successes and epic failures, engrossingly recounted.\ \