sign in sign up
<<
Home , Thomas Mellon

A Portrait of

Reviews of Mellon: An American Life by David Cannadine

Mellon: An American Life by David Cannadine

Mellon: An American Life | December 28, 2008 Reviewed by Robert Whaples

During the dark days of the Great Depression, Andrew Mellon’s son, Paul, found this quatrain scribbled on a gas station bathroom wall: Mellon pulled the whistle, Hoover rang the bell, Wall Street gave the signal, And the country went to hell.

If Hoover was the villain of the hour, Mellon was surely the nation’s number two scapegoat. Mellon struck the nation as Lionel Barrymore’s Henry F. Potter writ large. Here was a stern banker, with an unsentimental worldview. Suspicious of the unwashed mob, he was always on the lookout for a sharp deal and didn’t seem to worry if what was good for himself and his cronies was bad for the broader public. One of the wealthiest men in the world, he had even betrayed his home town by refusing to add $1 million to a plan to rescue the tottering Bank of in 1931, simply because the deal wouldn’t meet the condition of giving his family a controlling majority of the bank’s stock — cementing the Mellons’ domination of Pittsburgh banking. The bank’s subsequent failure triggered the collapse of several other area financial institutions. “Here, in cameo, was the sort reaction afflicting the whole national financial system at this time” (p. 440-41) and Mellon played the Scrooge.

Yet, the Andrew Mellon who emerges from David Cannadine’s even-handed biography is no Capraesque or Dickensian villain. Even though the author finds Mellon to be “an unsympathetic person with unappealing politics” (p. xvi), his portrait of Mellon strikes the reader as fairly sympathetic, especially as Mellon mellows with age, becomes a generous public benefactor, and endures the unfairness of political reactions to the world-wide economic meltdown that was clearly beyond the grasp of period’s leaders.

Above all else, Cannadine is comprehensive. For nearly the first hundred pages the biography’s dominant figure is Thomas Mellon, Andrew’s Scots-Irish father, who rose to become a leading Pittsburgh businessman. Bewailing his inability to find competent and trustworthy business partners, Thomas Mellon’s ingenious business model was to make his talented sons his primary partners. This worked especially well in the case of Andrew, who eagerly learned about loans, mortgages, bookkeeping and foreclosures in his early teens, fulfilling his father’s hopes by learning “an alertness to money making opportunities at the earliest possible age” (p. 36). In 1872 Thomas Mellon provided seventeen-year old Andrew and his younger brother, Dick, with $40,000 to develop real estate. Andrew moved quickly and competently, then sensing that Pittsburgh’s economic boom would soon collapse, he leased the lumber yard he’d developed to a fire-stricken competitor, just before the economy fell into recession. Three years later Andrew was given a one-fifth interest in his father’s bank, T. Mellon and Sons, and by age 21 he was given power of attorney to run the business on a day-to-day basis. By 1882 Judge Mellon had essentially turned the business almost completely over to Andrew and the family deferred to him and his virtually unfailing business judgments.

Andrew’s enterprises expanded as he acquired control of the Pittsburgh National Bank of Commerce (in partnership with his friend ), the Union Insurance Company, and other financial institutions in the 1880s, but his greatest successes came as a venture capitalist beginning in the late 1880s. In 1889 the founders of the fledging Pittsburgh Reduction Company approached Mellon for a $4000 loan to pay off a note owed to another Pittsburgh bank. Mellon was impressed by these men and captivated by the potential of their product — aluminum. He offered them a loan of $25,000, bought a large block of shares in the company, became a director, and urged and financed the company’s expansion and the opening of a new plant powered by Niagara Fall’s hydroelectricity. The company, eventually renamed Alcoa, grew and prospered. Cannadine identifies Mellon’s “extraordinary gift for spotting and nurturing outstanding individuals with promising ideas,” (p. 98), with Alcoa as exhibit A. Mellon’s name and fortune was made by repeated successes that paralleled Alcoa. Exhibits B, C, D, E and F are his vital roles in funding and nurturing the Carborundum Company (which produced silicon carbide, an abrasive that’s nearly as hard a diamond and which became widely used for the precision grinding of metal parts); the New York Shipbuilding Company (which built the U.S. Navy’s first dreadnought); McClintic and Marshall (which became the leading steel-fabricating business in the world, making the construction machinery for the Panama Canal locks); the Koppers Company (which brought German chemical science to the U.S., turning waste products from coke into industrial chemicals like benzene and toluene — vital to the Allied effort in World War I); and most spectacular of all, Gulf Oil. As in the case of Pittsburgh Reduction, Mellon and his brother answered when opportunity knocked. This time the sound was two long- time associates, James Guffey and John Galey, seeking funding for their wildcatting ventures in Texas. Mellon loans enabled the breathtaking Spindletop strike in 1901. Mellon money and direction helped turn the wildcatters’ floundering business into a thriving multinational corporation.

Mellon emerges as a “creative enabler.” “’How can I help you?’ ... was invariably his professional greeting” (p. 113). Mellon was known as “the best listener in Pittsburgh” — shy, aloof, self-sufficient, with an “incorrigible determination to live unostentatiously” (p. 231). In almost every case, his enterprises were closely held, secretive in their dealings, increasingly vertically integrated and stinting in their dividends, as profits were plowed into long-term investments.

Mellon reluctantly agreed to become Secretary of the Treasury under Warren Harding in 1921, recording in his diary that he accepted the position on account of his nineteen-year-old daughter’s social ambitions. He dutifully resigned his directorships of over sixty companies, and made over all his bank stock to his brother Dick, but Cannadine provides convincing evidence — from Mellon’s diary — that he continued to play an active role in directing his enterprises during his decade-long tenure as Secretary, in violation of the spirit (and probably the letter) of the law. Mellon immediately made his mark in the Treasury Department by refinancing the nation’s vast war debt at lower interest rates, saving taxpayers about $200 million per year. As a banker, he recognized that the Allies were in no position to repay their war debts to the U.S. unless the terms were restructured. Although the Mellon-led Debt Commission clearly overstepped its Congressional mandate, the generous terms it negotiated with Britain in 1923 were ratified, establishing the pattern of agreements reached with other nations and helping to return international financial arrangements to “normalcy.” Mellon has always been given considerable credit for pushing through major tax reforms during the 1920s, which cut top marginal income tax rates from wartime highs of 77 percent down to 25 percent and which expanded the zero-tax bracket so that most Americans paid no income tax, although Cannadine makes it clear that Congress was not putty in his hands and his power and influence in these matters have been exaggerated.

In retrospect, the public scapegoating of Mellon (and Herbert Hoover) for the Great Depression was as predictable as it was unfair. Mellon tried to carefully talk the stock market down in early 1929 and was a strong advocate of boosting interest rates to curb speculation. My reading of economic historians’ research on the Great Depression is that the key policy moves which might have curtailed the meltdown — like the U.S. going off the gold standard at an early date — were simply out of the realm of policy possibilities until it was too late. As Mellon became a political liability, “reviled as a false prophet, a plutocrat who fiddled while the world burned around him,” (p. 451) and Congress began an investigation, Hoover offered him the position of ambassador to London, shunting him off stage. Ironically, Mellon’s greatest investment coup came during these catastrophic years, as his fortune dwindled from its peak of $300-$400 million. During this period he covertly purchased twenty-one of the finest paintings from the Soviet Union’s Hermitage collection. It was a buyers’ market and he paid rock bottom prices.

The denouement of the story comes when Mellon was held up as one of the “malefactors of great wealth” by the Roosevelt Administration. In 1935 Mellon was charged with having knowingly falsified his tax returns. Cannadine concludes that “the record generally bears out the views of Mellon’s relatives and friends that the tax trial was politically motivated by an administration which ... was ‘entirely lacking in an elementary sense of decency’” (p. 534). He was ultimately and unequivocally exonerated of the charges (after his death) and Cannadine lays to rest the canard that “Mellon gave his art and built his gallery [the National Gallery of Art] in tacit exchange for his acquittal at the tax trial” (p. 566).

Although not trained as an economic historian Cannadine, best known for The Decline and Fall of the British Aristocracy, has a strong grasp of the American economy that Mellon helped to build and direct. His understanding of the events of the Great Depression is sure-footed and I have only a handful of quibbles from the perspective of an economic historian — e.g., his contention that Mellon earned “excessive profits” from his sale of Union Steel and his repeated claims that from 1873 to 1898 economic times “were generally hard” in the U.S. (Sam Williamson and Louis Johnston’s calculations at Measuringworth.org show real GDP per capita rising by 64 percent during this quarter century.) And I caught only a few factual errors – e.g. the mistaken assertion that the Molly Maguires operated in the coal fields of western .

Portions of Cannadine’s biography won’t appeal to economic historians, especially minute details of his personal life and art collecting. However, like Ron Chernow’s Titan: The Life of John D. Rockefeller, Sr. or Maury Klein’s The Life and Legend of Jay Gould, it authoritatively rewrites and rehumanizes the life of an economic heavyweight who has been misunderstood and maligned by earlier generations.

—Robert Whaples, Department of Economics, Wake Forest University.

The Greenspan Of His Day | October 2, 2006 Reviewed by Amity Shlaes

Of all the figures in American history, none is in direr need of rehabilitation than Andrew William Mellon. Mellon the financier created an empire of coal and steel that fueled modern industry. Mellon the art collector gave the country its National Gallery. Mellon the Treasury Secretary outclassed all predecessors but Alexander Hamilton, spending a full decade in the job and presiding over stupendous economic progress. Mellon was the Alan Greenspan of his time, a man of whom it was said that "three presidents served under him."

But when the Great Depression came, Franklin Roosevelt and Mellon's own successors at Treasury scapegoated him unrelentingly for four years. Mellon's opponents never did win convictions. But they did something worse.They obscured in American memory both Mellon's achievements and his optimistic philosophy. They made a man who was ahead of his time old- fashioned. Postwar historians followed their lead and wrote Mellon down in the books as a flat character. Or, to put the story in television terms: Mellon acquired a reputation something like that of Soames Forsyte in John Galsworthy's "Forsyte Saga" — a frigid man of property. His own son, Paul, would indeed later compare Andrew to Soames.

Now along comes David Cannadine to supply the rehabilitation. Mr. Cannadine is a distinguished historian — he wrote the prize-winning "Decline and Fall of the British Aristocracy."Before his death, Paul personally tapped Mr. Cannadine to write the book, and Mr. Cannadine enjoyed luxurious access to Mellon's records at the Mellon Foundation. "Mellon: An American Life" (Alfred A. Knopf, 779 pages, $35) took a decade to complete and spans an exhaustive and exhausting 779 pages.The outcome: a book that delivers on the dignity and the achievements of Mellon, but falls short when it comes to his philosophy.

Thomas Mellon, Mellon's father, was an important force of his own, a judge who first established the Mellon bank in a then-frontier town, Pittsburgh. Thomas summed up the story of his people in an autobiography: "The Scotch and Scotch-Irish — the latter but a Scotch colony — monopolize business and wealth … They owe this to their qualities of thrift, economy, intelligence and industry." Mellon and his brother Dick, the sons of this Scotch-Irishman, took over the bank and expanded from there, supplying capital to industries from coke and oil (Gulf Oil) to aluminum (Aluminum Company of America). A friend, Henry Clay Frick, taught Andy, as he was known, to collect paintings while on a trip in Europe, and later helped him found Union Steel. Mellon's Pittsburgh was a roaring place, covered with soot, "hell with the lid taken off," as it was described. "You don't live here?" his much younger bride Nora said, horrified upon her arrival from Scotland. Still, to Americans, Mellon's empire seemed invincible.

Yet though Mellon built an empire, he was not imperial. For, as Mr. Cannadine points out, he did not operate as a traditional robber baron did, by seizing land, or natural resources, and then monopolizing them. Mellon and his brother functioned under what came to be known as the "Mellon System." They liked to build businesses vertically: When it came to oil, for example, the Mellons involved themselves at every stage of production, from pumping oil out of the ground to selling it to the customer.The Mellon System had another distinguishing rule. The investor must find an innovator he liked, fund him by buying a share of his company — and then stay out of the scientist's hair. Thus, in a period when capital was far less available or liquid than it is today, Mellon became one of the first VCs — venture capitalists.

Mr. Cannadine also covers another Mellon innovation. In those days companies that wanted to improve products had to come up with the improvement themselves or wait for some scientists somewhere to do so. Universities often snubbed their noses at the companies, rewarding their scholars to pursue only pure science. To speed up the process, Mellon created an early version of the modern think tank, the Mellon Institute. Companies paid for scientists to spend a fixed period — say, a year or two — at the Institute, with the defined task of finding a way to improve a product or a process. One study completed at the Institute in its early years looked at the social cost of smoke pollution — the authors who wrote this green project concluded that the cost was $10 million a year. Another Mellon Institute project involved converting petroleum into gasoline. Thus, Mellon said, companies might learn "to utilize the services of qualified scientists to solve its problems." The concept of applied science seems mundane now, but that is only because Mellon helped to make it so. Indeed, so preoccupied with such things was Mellon that he neglected Nora and their two children, Ailsa and Paul. "He sought friendship loyalty, support and companionship; she craved warmth, fondness, demonstrative love and perhaps passion," the author writes. One of Mr. Cannadine's insights was that Nora's age — she was two decades younger than Andy — doomed the marriage. He notes that Nora's improbable union with Mellon resembled that of a more recent celebrity couple: Diana's with Prince Charles.

But Mellon scarcely noticed this, perhaps because his real passion went to another object: paintings. Early on, Thomas had taken a risk in lending a 21-year-old with no capital $10,000 to build 50 coke ovens. That young man, Henry Clay Frick, was also an art collector, with sketches strewn around his office in between documents of the coking process. "Lands good, ovens well built; manager on job all days, keeps books evenings, may be a little too enthusiastic about pictures but not enough to hurt," one of Mellon's bankers wrote of Frick's site in recommending a second loan. Frick became the Mellons' great partner in business, but also taught Mellon about art. In this relationship it was Mellon's turn to be junior; Frick called Andrew Mellon "Andy," Mellon called Frick "Mr. Frick."

Eventually, great brokers, from Roland Knoedler to Joseph Duveen, helped Andrew build the greatest private art collection in the world, containing Vermeer's "Girl With the Red Hat," Raphael's "Alba," and Van Eyck's "Annunciation." Then, on one of the last days of 1936, he gave the country a gallery on the mall to house them in; at his insistence, it was called not Mellon Gallery but National Gallery. The idea, familiar in all religions, is that anonymous charity is higher than other charity, and that it is more likely to inspire other givers to join him. This was the corollary to the business rule of keeping a low profile. Even before the Gallery opened in 1941, the Kress and Rosenwald families were also giving collections.

It was at Treasury, however, that the Mellon System saw its greatest use.The income tax had been created less than a decade before Mellon took office, but the Wilson administration and Congress had already pushed the surtax on the income tax up to 77%. Many were appalled, the new Treasury Secretary included. Levies that high slowed business. Borrowing an image from railroading, Mellon argued that governments could only charge in taxes "what the traffic will bear."This was the fiscal version of his old "stay out" philosophy. With the cooperation of succeeding presidents, Mellon pushed rates down five times, bringing the top income tax rate to 20%.

A supply-sider before the supplysiders, Mellon believed that those lower rates would yield more revenue. He proved correct; his budgets ran surpluses. Mellon did raise rates as he departed the Treasury in 1932, but that was only a reluctant measure, taken in the name of sustaining the gold standard. Mellon's famous response to the Crash was that investors must liquidate their holdings so that the market could find a bottom.Today this sounds sinister, especially because events that took place in Soviet Russia, including the murder of millions, would later give new meaning to the phrase "liquidate." But Mellon was not wrong: A market that is fluid and transparent is one that is likely to handle bad news better.The only important area where a classical economic liberal would challenge Mellon is his distressing failure to oppose tariffs. But then opposition to tariffs would have seemed inhuman, at least in those days, in an aluminum man.

Mr. Cannadine, a dutiful biographer, covers the slide into Depression in detail, including the legitimate fury of the unemployed.As one angry Pennsylvanian wrote to Washington, "He is a most hated man in Pittsburgh, and when his picture appeared on a moving picture theater screen recently in one of our local theaters, the boys in the gallery yelled ROBBER ROBBER." The Roosevelt administration took aim at Mellon and sought to prove that he had illegally avoided paying taxes. Treasury Secretary Henry Morgenthau egged his staff on, telling the prosecutor Robert Jackson that democracy was at stake. Mr. Cannadine establishes that Roosevelt himself was aware of the project, and showed deep interest in Mellon's tax returns. Robert Jackson — the same Jackson who later served as a Supreme Court justice and prosecuted Nuremberg — wrote of Roosevelt that "as a matter of fair history, he did know about it." On the left, a young congressman from Texas, Wright Patman, smeared the gallery gift by charging that it was a bribe by Mellon to get the government to call off its lawyers. Patman even argued that the gallery ought not to be built, saying,"A lasting memorial in his honor should not be constructed in the nation's capital, even at his own expense."

Mr. Cannadine's work rebutting the bribery charge alone makes the rest of this book worthwhile. For his intensive review enables him to conclude with an authority lacking in all previous historians that when it comes to bribery, "there is not a shred of evidence for that contention." As Mr. Cannadine points out, plenty of evidence, including Hoover's memoirs, shows that Mellon was already planning the gallery in his 1920s. Mr. Cannadine highlights the important link between Mellon's philanthropic side and his business side. The greater fortune could become the greater gift to society — that was his message with the gallery.

There are problems with "Mellon" — three especially troubled me. The first is that this biography sometimes gets in the way of itself. An example: Mr. Cannadine delivers all the minutiae of Mellon's dedication of the Mellon Institute's new home in 1937 — that the man's health was failing, that he left his glasses on the rostrum, forgot his hat, and delivered a speech that "was more than usually inaudible, rambling, and incoherent." These details set up the event the author must describe next: Mellon's death that summer. But they obscure the central point of the Mellon Institute dedication — that the Institute and businesses related to it had thrived throughout the 1930s, yielding hundreds of new patents. And that many sectors of the economy had likewise continued to expand in that period. Even in the darkest decade, the candle of innovation was sustaining the country. Thus does Mr. Cannadine subordinate a truth: The dedication was about the immortality of ideas, not the defeat of senescence.

The second problem is that Mr. Cannadine tends to emphasize the cautious, Scotch-Irish culture of the . There is plenty of detail in this book that would be of intense interest to Presbyterians, but insufficient material on Mellon's great love of risk. His propensity to bet boldly was the key to his success, and it was a trait without ethnicity.

The third problem is the sense that Mr. Cannadine conveys that Mellon's ideas were indeed passé. The author titles the last part of his book "Old Man, New Deal." Mr. Cannadine likewise refers to economic liberals such as Mellon as a "beleaguered breed."This is not giving Mellon his due — or acknowledging the respect he was accorded right through the 1930s. On the ex-Secretary's 80th birthday, reporters gathered 'round at his tax trial looking for a quote. The Depression, Mellon told them, would prove a mere "bad quarter of an hour" in the glorious history of American finance. Many decades, but above all the 1980s and 1990s, have demonstrated that this prophecy was correct. Why did not Mr. Cannadine title his last section: "New Deal, Newer Man"?

But these are smaller challenges. "Mellon" is a complete biography, containing also — how could I forget to mention it? — details of Nora Mellon's adultery, Ailsa's self-absorption, and 's education in philanthropy. It introduces a man we need to know, and all there is to say is: Welcome, Andy.

—Amity Shlaes is a columnist for Bloomberg and the author of The Forgotten Man: A New History of the Great Depression.

Andrew Mellon: An Unhappy Giant | November 6, 2006 By John Steele Gordon

A new look at a man who “three Presidents served under.” Andrew Mellon (1855-1937) was the most historically significant secretary of the treasury since at least Salmon P. Chase during the Civil War and perhaps since Alexander Hamilton himself. Appointed by Warren Harding in 1921 he served until 1932 and was so influential that Senator George Norris joked that “three presidents served under Mellon.”

Mellon was, perhaps, the very first supply-sider. In his book Taxation: The People’s Business (1924), he wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the government, and that more revenue may often be obtained by lower rates.” During the early years of his tenure as treasury secretary, Mellon persuaded Congress to cut income tax rates substantially, lowering them to 25 percent for the rich and eliminating from the tax rolls altogether millions at the other end of the socioeconomic scale.

He also introduced the first overall budget process for the federal government. Before Mellon, each department simply submitted its requests to Congress on its own. The Budget and Accounting Act of 1921, largely his work, created a Bureau of the Budget in the Treasury Department. Government departments now had to submit requests to the Bureau; it put together revenue estimates and a comprehensive federal spending plan.

But that was by no means his only claim to fame. The son of a Scots-Irish immigrant father who began as a lawyer and judge and then became a highly successful banker in rapidly burgeoning Pittsburgh, Mellon from a very early age demonstrated a remarkable talent for business. So remarkable, in fact, that the elder Mellon turned over the running of the bank to his son when the latter was only 27, even though there were two older sons. Mellon proceeded to turn a considerable fortune into a huge one. To give just one instance of his talent for making money, he saw great promise when few others did in Charles M. Hall’s process for extracting aluminum from ore by means of massive amounts of electricity. He bankrolled the company that is now Alcoa.

He also had a passion for art, like his close friend Henry Clay Frick. Mellon, like Frick, acquired one of the country’s premier collections, and, like Frick, he gave it to the people. Mellon’s collection became the National Gallery of Art in Washington in 1940, three years after his death.

One would think that so hugely significant a figure, one who deeply influenced the American economy both as a businessman and as a public official, and who gave to the nation one of the world’s great collections of art, would have been the subject of many biographies since his death 69 years ago. But in fact David Cannadine’s new Mellon: an American Life (Knopf, 800 pages, $35) is the first. The New York Public Library’s catalogue lists only 11 books about Andrew Mellon, all of them scholarly studies, minor works, or polemics. (Congressman Wright Patman, a populist firebrand, wrote a short book called Bankerteering, Bonuseering, and Melloneering, not a title that promises much objectivity.)

Part of the reason for this strange silence is the fact that Mellon was a very private man and often silent himself. Slat-thin, with blue-gray eyes and an ample mustache, he looked the very model of the early-twentieth-century banker that he was. But he was very shy and personally standoffish even with his children, and he hated public speaking. He “rarely smiled and hardly ever laughed,” Cannadine writes.

Uncomfortable as he was with people in general, his marriage, contracted when he was in his forties, was an unmitigated disaster, ending in a scandalous divorce in 1912. His wife, often infuriated by his tendency to retreat into business, increasingly found that behind his “steely exterior . . . there was either something vaguely unpleasant—or nothing at all. He was a hollow man, with no interior life.”

An equally important reason Mellon has been neglected by historians was that he died too late. He was at the peak of his fortune and political influence in the 1920s, but by 1937 he had become both an anachronism and a scapegoat for the economic calamity that had befallen the country. After his death he seemed to be yesterday’s news.

David Cannadine has done a great job of telling the story of this immensely accomplished, deeply flawed, and unhappy man. Mellon: An American Life is a worthy latest addition to the growing list of recent biographies of such men as , John D. Rockefeller, E. H. Harriman, and Jay Gould that treat these major figures in American history as the real flesh and blood that they were, not just as captains of industry or robber barons, depending on the politics of the author.

Mr. Cannadine, an Englishman, has previously written mostly on British subjects, including The Decline and Fall of the British Aristocracy, which won the Lionel Trilling Prize and the Governor’s Award. He exhibits the Englishman’s occasional failure to quite catch the American nuance, but that is more than balanced by his outsider’s clarity of vision.

—John Steele Gordon writes “The Business of America” for American Heritage magazine. His most recent book is An Empire of Wealth: The Epic History of American Economic Power.

The Portrait of Andrew Mellon | July 6, 2007 Reviewed by Brandon Crocker

Andrew W. Mellon was one of the most successful financiers and businessmen in American history, served as Secretary of the Treasury for 11 years, and was a renowned philanthropist and creator of the National Gallery of Art in Washington, D.C., but until now there has not existed a published full biography of this important American. Shortly before his death in 1999, Andrew Mellon's son, Paul, commissioned the British writer David Cannadine, author of The Decline and Fall of the British Aristocracy, to correct this deficiency. The result fills an important void, but is not without faults.

Cannadine stresses the influence of Andrew's father, Thomas Mellon, on Andrew's life, which he reinforces by heading each chapter with a quote from Thomas Mellon's autobiography. Andrew Mellon was, no doubt, influenced by his father but based on the great amount of information that Cannadine has collected and presents, Andrew Mellon's character was not so "paternally ordained" as Cannadine portrays.

Thomas Mellon was born of Scotch-Irish immigrants who came to western Pennsylvania to farm in 1819. Thomas rejected farming for the exciting world of business in burgeoning Pittsburgh, and eventually made a fortune starting in real estate and expanding into coal, timber, construction and other ventures, including a bank.

In his autobiography, Thomas Mellon describes how he decided on marriage from a cold, calculated business frame of mind. Despite the lack of romance, his marriage turned out quite successful and he fathered eight children, only four of whom (all boys) would survive beyond early adulthood. He set up the oldest boys in business ventures which turned out successful, and he eventually put Andrew, the third oldest, in charge of the Pittsburgh banking enterprise, in which he was later joined by his younger brother, Dick. Cannadine claims that the hard driving patriarch Thomas, in pushing his sons to take on and expand his business concerns, had succeeded in bending his sons to his will. But there is no evidence that these boys' wills needed much bending -- they all seemed eager to take on the task.

While serving as Secretary of the Treasury late in his life, Andrew Mellon said, "work is the only honorable occupation, and [...] life has more to offer than merely the spending of money on selfish enjoyment." This philosophy was shared by Andrew's father. But Andrew diverged drastically from his father's example in many other ways, starting with his marriage.

WHILE IN HIS TWENTIES, Andrew was briefly engaged, but his fiancee was diagnosed with tuberculosis from which she soon died. Andrew then concentrated on his work at the bank and made a fortune, demonstrating an amazing ability to realize opportunities and to use finance to gain major or controlling ownership in what would become great companies, including Alcoa, Carborundum, and Gulf Oil. But then, at 44, while on a transatlantic voyage, his friend Henry Clay Frick introduced him to a young English woman named Nora McMullen. Though less than half his age, the shy and reserved Mellon got on famously with Nora, and, as is often the case with love, he did not employ the careful, cold analyses advocated by his father, but was driven by his heart and he saw in Nora what he wanted to see.

It was not a match made in heaven. It started to go bad as soon as the new couple got off the train in industrial Pittsburgh after their European honeymoon. The girl of the English countryside exclaimed to her millionaire husband, "You don't live here?" Whereas Andrew perceived marital bliss, Nora did not enjoy the quiet evenings at home, and often felt that Andrew was more attentive to his business interests than to her. After Nora engaged in two flings with a married con artist named Alfred Curphey, she stunned Andrew by demanding a divorce. Things got nasty quick, as Nora threatened to accuse him in public of all sorts of lies, including that he had venereal disease and forced a young girl to have an abortion. Andrew feared that Nora was planning to take their two young children, daughter Ailsa and son Paul, back to England to live with the scoundrel Curphey, and a very public divorce case ensued. Andrew, who cherished his privacy, was publicly humiliated, and the emerging feminist press played up Nora as the victim of an unfeeling, rich, and powerful man. Andrew and Nora eventually settled out of court, agreeing to joint custody of the children. Nora would poison the minds of Ailsa and Paul against their father, but for his part, Andrew refused ever to say anything bad about Nora in front of the children. Oddly enough, Nora and Andrew would later reconcile, and remain friends during Andrew's later years. But Paul and Ailsa would not learn the real reasons behind their parents' divorce until after Andrew's death.

Cannadine makes much of Andrew Mellon's failed home life. Given the circumstances with Nora, it is not surprising that Ailsa (who shared her mother's self-absorption and psychosomatic illnesses) and Paul (who found his father intimidating and who wanted no part of working in the "Mellon interests" but instead wanted a life of country leisure) had somewhat distant relations with their powerful father. Certainly this distance was partly a result of Andrew Mellon's reserved nature -- and the fact that he was nearly 50 years older than Paul. But to conclude, as Cannadine does, that Andrew Mellon was essentially an emotional cripple, unable to express love and lacking in humanity, seems unwarranted.

CANNADINE'S TREATMENT OF MELLON'S economic philosophy and achievements is mostly full and fair, though with some holes. One gets the sense that Cannadine is not completely at ease when discussing issues of finance and economics. It is clear, however, that he does not share Mellon's extreme laissez-faire attitudes, and on occasion seems to imply that business activities lacking a charitable basis are somehow unseemly. But he does defend Mellon from many of the typical left-wing "greedy Robber Baron" accusations, hails his philanthropy, and gives him credit for sincerely believing that the economic philosophies he espoused would benefit the nation as a whole, and not just the rich.

Cannadine explains Mellon's way of running his businesses: "He rarely sought quick profits, nor did he demand especially high dividends; he was committed to nurturing companies to prosperity, and once the business was in the black, he would always plow the earnings back into it and build a surplus." One result of the Mellons' prudent business management was that in the dark days of the Great Depression, depositors in the Mellon National Bank did not lose their savings.

Always a strong financial backer of the Republican Party, members of the Pennsylvania Republican machine moved to get Mellon considered as Secretary of the Treasury by president- elect Warren Harding in 1920. Mellon strongly resisted, but when Harding formally asked Mellon to take the job, he felt duty-bound to accept. He would become the longest serving Secretary of the Treasury in modern times, serving three presidents until 1932. As Secretary of the Treasury, he was forced to sell all his banking stock, which he sold to his brother Dick, and to refrain from engaging in commerce. He dutifully resigned from all his directorships, but he continued to have strategic discussions with Dick regarding the Mellon Bank and with the boards of Alcoa and other "Mellon interests."

As the economy recovered from the depression of 1921 and moved into the "roaring twenties," Mellon was hailed by many as the "greatest Secretary of the Treasury since Alexander Hamilton." Mellon successfully advocated dropping the highest marginal income tax rate to 25% in order to get the rich to pay more in taxes (nearly 60 years before the so-called "Laffer Curve"), and moved to restructure European war debt into a realistic plan, helping, at least temporarily, to get European economies back on their feet. The private and shy Mellon seemed to bask in the praise, though, as usual, when he gave speeches his voice was invariably nearly inaudible.

The praise, however, would not last. By 1927 Mellon started to become inattentive to Treasury affairs, except for the building plan for the "Federal Triangle" area near the Mall which was under the auspices of the Treasury. He was an early advocate of getting the Federal Reserve to raise interest rates to curtail speculation in the stock market in 1929, but he did not follow the lead of his boss, Herbert Hoover, in strenuously opposing the disastrous Smoot-Hawley tariff of 1930, and as the economy began crashing in late 1930 and 1931 he advocated balanced budgets and higher taxes. Cannadine does not shed any light on what Mellon's position was on the Federal Reserve's failure to support the money supply (which shrank by one-third between 1930 and early 1933) and, in fact, Cannadine does not even mention this important contributor to the Great Depression, but only wrongly implies that the Federal Reserve did not have the authority to engage in significant open market operations to support bank reserves and inflate the money supply until 1935.

With the economy in free fall, the enemies of Mellon, both Democrats and progressive Republicans, called for his ouster based on his illegal continued business connections, and Hoover moved him out to London in 1932 to take over as ambassador to Great Britain, a role Mellon very much enjoyed.

THE MAIN REASON THAT MELLON was inattentive to Treasury matters in the late twenties and early thirties is that he was concentrating more on what became his passion in later life - - paintings. He had started collecting paintings in a small way in the early 1900s, but by the 1920s he had become much more expert in art, and in handling art dealers, and had put together a significant collection. By 1926 or 1927 he had settled on the idea of expanding his collection with the aim of donating it to the country, and to this end actually bought several important art works that the new Soviet government was secretly selling from the Hermitage (like all Communist societies, the Soviets were much more adept at stealing and selling off the wealth of others than in creating wealth of their own).

Unfortunately for Mellon, his public life did not end with Franklin Roosevelt's electoral victory in 1932. The New Dealers were looking for scapegoats, and FDR himself engaged in some of the most virulent anti-big business rhetoric this side of Stalinist Russia. Mellon, a rich financier, businessman and prominent Republican, was at the top of the list. With FDR's personal approval, the Justice Department launched a criminal tax-evasion investigation against Mellon. A grand jury refused to indict, but FDR chose to pursue it anyway in civil court. FDR's Secretary of the Treasury, Henry Morgenthau, explained to the government's prosecutor that "Mr. Mellon is not on trial, but Democracy and the privileged rich." Mellon was not on trial for anything he did (the charges of tax fraud were baseless) but for what he symbolized -- or rather what the New Dealers wanted him to symbolize -- greedy financiers who had selfishly destroyed the lives of working people.

Cannadine notes that FDR's prosecution of Mellon was not just political and vindictive, but also hypocritical. Unlike Mellon, FDR liberally took advantage of tax loopholes, and in 1932 paid only $31 in federal income taxes. During the tax trail the general public first learned of Mellon's remarkable intended benefaction, as the government had claimed that the charitable foundation into which he had been donating artwork and money for the eventual creation of a National Gallery of Art, was, in fact, a tax dodge.

Despite some opposition from radical New Dealers who didn't want to accept any gift from Mellon (the acceptance of Mellon's "National Gallery" required congressional legislation), and others who did not like the neo-classical architecture of the proposed building designed by John Russell Pope, Mellon's gift was accepted on his terms. One of those terms was that the gallery not be named after him, but rather be called the National Gallery of Art -- a reflection of his unostentatious nature, and his (realized) belief that more collectors would donate to a "National Gallery." When it was all done, the man accused of attempting to defraud the government of $2 million had given the nation a gift in art, building, and endowment then valued at nearly $60 million. Mellon would only see the very beginning of the gallery's construction, dying of bronchial pneumonia in August 1937 at age 82 -- three months before his official exoneration in the tax trial.

Most everyone who worked with Mellon seems not only to have admired him but also to have liked him. As evidenced in his dealings with Nora and FDR, Mellon seemed incapable of hating other people. After his meeting with FDR to discuss his proposed National Gallery late in 1936, all Mellon could say of the man who had persecuted him was that he was a charming fellow. People with such a nature usually don't let things gnaw at them, and though his fervent desires for a loving wife and a son to succeed him in business were not to be fulfilled, he may not have been such the sad and forlorn character that Cannadine makes him out to be. Cannadine's work is a significant accomplishment, but he has left room for improvement for future biographers.

—Brandon Crocker is a frequent contributor to The American Spectator.

American Midas and Maecenas | November 30, 2006 Reviewed by Christopher Ondaatje

In this current climate of diminishing government funding, it is important for us to turn to other means of supporting public purposes, philanthropy being one. Britain therefore has wisely looked to America where they have never had the same level of government support for social causes. The percentage of individual charitable giving to GDP is more than double in the than in the UK. A key issue is tax incentives. Gifts of capital and assets in Britain do not have an allowance similar to that on gifts of shares, and the recent review by Sir Nicholas Goodison, Securing the Best for our Museums: Private Giving and Government Support, published by H. M. Treasury in January 2004, recommended a tax allowance to encourage getting more art into museums. Sadly nothing was done to implement this recommendation. But without obvious and understandable tax benefits the rich are unlikely to put as much back into the community as they do in the United States.

Therefore, it is entirely appropriate and meaningful that David Cannadine, the new Chairman of the National Portrait Gallery, should have written the biography of Andrew Mellon who had been America’s greatest collector of art and who was the uncharacteristic founding benefactor of the National Gallery of Art in Washington. Mellon has now been dead for almost 70 years and the fact that there has been no full-scale biography published in that time constitutes an enormous gap in American biography. Curiously the 200,000-word Mellon biography by the Pulitzer Prize- winning author Burton J. Hendrick, commissioned by the Mellon family soon after he died in 1937, was never published because while the second world war raged, and while Franklin Delano Roosevelt was President of the United States, Mellon’s financial affairs were under severe scrutiny.

Andrew Mellon was born in Pittsburgh, Pennsylvania in 1855 six years before the American Civil War broke out. He was the son of the banker and judge Thomas Mellon and was educated at the Western University of Pennsylvania, now the . Very early in his life he demonstrated his extraordinary financial ability, and joined his father’s banking firm in 1872. Ten years later at the age of 27 he had the ownership of his father’s bank transferred to himself. In 1889 he helped organise the Union Trust Company and the Union Savings Bank of Pittsburgh. Branching out from banking, he financed the massive industrial expansion of western Pennsylvania, and between the 1860s and 1920s, during which time America became the world’s leading economic power, he amassed fortunes in oil, steel, shipbuilding and construction. Gulf Oil, Alcoa and the Carborundum Company were giant American corporations that grew out of Mellon’s conviction and financial support.

A lifelong Republican, Mellon was appointed US Secretary of the Treasury and became a member of President Warren G. Harding’s Cabinet in 1921. Two years later he introduced the ‘Mellon Plan’, a programme for tax reform. He also reduced the public debt inherited from first world war obligations from almost $26 billion in 1921 to about $16 billion in 1930. Mellon continued to hold high office throughout the administrations of presidents Calvin Coolidge and Herbert Hoover. However, with the onslaught of the Great Depression he became increasingly unpopular. In 1932 he left the Hoover Cabinet and accepted the post of US ambassador to the United Kingdom, where he served for only one year before retiring to private life. That year Roosevelt was elected as President of the United States and Mellon became the subject of an income tax investigation stemming from Roosevelt’s attempt to malign the previous administration. Mellon was in short ‘the embodiment of the discredited political and economic order which Roosevelt detested and which he had been elected in 1932 to overthrow’. Thus the ageing Mellon was embroiled in a two-year civil action beginning in 1935 and dubbed the ‘Mellon Tax Trial’. Charged with fraud and tax evasion on a massive scale, it was a bitter time for Mellon, who was only exonerated after his death.

Cannadine’s imposing biography reveals Mellon to have been a complex and flawed man, who although eminently successful in business was a discernible failure in personal relationships. ‘He made little small talk, was a poor public speaker, rarely smiled and hardly ever laughed.’ In fact in his simple open rebellion against his father he launched himself into a wholly unsuitable marriage to a girl from England, which brought him more humiliation than happiness and ended in scandalous divorce. In truth he treated his young wife more as a client at his bank and, not surprisingly, relationships with his two children suffered in his dark and brooding shadow. Mellon’s daughter, Ailsa Mellon Bruce, lived an unhappy life, lonely, insecure and unfulfilled. His son Paul never resolved the double burdens of paternal disappointment and vast inherited wealth. In his autobiography Reflections in a Silver Spoon he castigated his father both for ‘his remorseless desire to accumulate money and art and for his indifference to human relations’. It was an unflattering portrait.

Nevertheless Cannadine, an academic historian (Cambridge, Oxford and Prince- ton), guides us through wealth’s triumphs and fortune’s travails to the painful treatment Mellon received at the hands of Roosevelt, the newly elected and vindictive New Deal president, who set out to discredit the highly acclaimed and long- serving Secretary of the Treasury. It was a humiliating trial that allowed Roosevelt to cast Mellon as the pariah of the Democratic Thirties. The trial ended in 1936, but the outcome, which was to exonerate Mellon posthumously, was still not known when Roosevelt invited the beleaguered Mellon to tea at the White House on New Year’s Eve 1936. For almost a decade Mellon had been America’s greatest collector of art, acquiring over half of the magnificent Russian collection at the Hermitage Gallery from the unwitting Joseph Stalin. It was not a confrontational meeting. Rather the two men sought to come to an agreement by which Mellon’s dream to create and endow the National Gallery of Art in Washington would receive the President’s permission, and also that of the Democrat- dominated Congress. It was a decision that had to be made quickly, for Mellon was dying of cancer. Roosevelt did indeed give his authorisation, causing the necessary legislation to be passed. Construction on the gallery began the following year. Shortly after this Mellon died — a somewhat shattered man with an enigmatic reputation. He had, however, in his final months provided the American nation with a peerless gift which remains today a lasting memorial to a conspicuously remarkable life.

—Sir Christopher Ondaatje was born in Sri Lanka , educated in England and built a successful career in finance and publishing in Canada.

Contrasting Capitalists, Balanced Biographies | October 22, 2006 Reviewed by Matthew Price

The political wags tell us we’re living in a new Gilded Age, so it’s probably a good time to check in with the old—but be advised that these two biographical whoppers about a pair of industrial Andrews from the first Gilded Age aren’t for the faint of wrist. David Nasaw’s sober, methodical life of the pint-sized plutocrat (Andrew Carnegie was just a notch over five feet tall) weighs in at 878 pages; while David Cannadine’s brisker Mellon: An American Life is only a touch shorter.

That’s an awful lot of pages, but these Pittsburgh powerhouses helped define and shape an epoch of American capitalism when this country actually made things (who’s the Chinese Carnegie?), when Steel Town was true to its name—a belching, soot-covered mess otherwise known as “hell with the lid off.” Carnegie, a bumptious little Scotsman who swaggered as if he were twice his size, soared with iron and steel, smashing unions along the way—Carnegie’s tactic was to conciliate, then crush—as he piled up a vast fortune; when he sold Carnegie Steel to J.P. Morgan in 1901, he walked away with $120 billion (in 2006 dollars), which he used to underwrite a hodgepodge of philanthropic causes, foundations and charitable trusts. (Next time you walk by a branch of the New York Public Library, thank Mr. Carnegie). A self-taught, self-righteous know- it-all, he lectured the world—like George Soros, he wouldn’t ever shut up—in his voluminous writings on many topics, counseled the rich to give away their money, and embarked on a quixotic campaign to bring about world peace, even if part of the Carnegie fortune came from the U.S. Navy, which bought armor plates manufactured in Carnegie mills.

The life of Andrew Mellon offers a prim study in contrast with his fellow western Pennsylvania capitalist. Whereas Carnegie was a sunny extrovert, Mellon was a shy, pallid, unfunny, emotionally stunted man who loathed the spotlight. He was no activist, nor was he, as Mr. Nasaw writes of Carnegie, a “moral philosopher of industrial capitalism.”

An entrepreneur of genius, Mellon let his endeavors speak for themselves. Mellon money helped kick-start everything from Alcoa to Gulf Oil, and flowed through almost every sector of the American economy, from banking to gas, metals and mining. A discerning, indefatigable art collector, he was the driving force in the creation of the National Gallery. In his three terms as a tax-cutting Secretary of the Treasury, he saw the 20’s roar (even if he didn’t), then crash. Unjustly vilified by F.D.R., he is today a hero of the supply side gang—Mellon was, you might say, a supply-sider avant la Laffer.

On balance, Mr. Cannadine’s volume is the more fluent of these two supremely fair and judicious books. Mr. Cannadine is chattier and more unbuttoned, while Mr. Nasaw is a dry, austere, somewhat plodding stylist. But Carnegie was the far more interesting man—and how couldn’t he be? There are more knots to untie in Carnegie than there are in 10 men. In its broad outline, the life of Andrew Carnegie is the immigrant success story writ fabulously large, and it’s got Horatio Alger beat by a mile.

Born in 1835, at 12 he arrived in Pittsburgh as a dropout, but he was a canny operator and an aggressive go-getter. From telegraph boy to superintendent on the Pennsylvania Railroad, Carnegie gathered up a clutch of important contacts that would be instrumental in his early rise. He had instinct for infrastructure, and he built his early fortune on a welter of insider deals and secret partnerships that make one’s head spin. During and after the Civil War, the United States went railroad mad, and Carnegie was there, providing rails, wheels, steel bridges and just about everything else to keep the trains running.

Today, much of this activity would be illegal: “Carnegie survived and triumphed in an environment rife with cronyism and corruption,” Mr. Nasaw writes. Way back when, Carnegie would have been denounced as a robber baron—even now, say “Andrew Carnegie” in a union hall and you’ll probably get decked—but Mr. Nasaw is too subtle a historian to see Carnegie in such crude terms. Conversely, Mr. Nasaw doesn’t lionize him as a hero of capitalism either. (He’ll be hearing from The Wall Street Journal’s editorial board about that.) Rather, Mr. Nasaw, without cheap point-scoring, carefully undercuts Carnegie’s sometimes blind estimate of his own actions: We see him as driven, perhaps deluded, an impish mass of contradictions.

By his mid-30’s, having decamped to Manhattan and sitting on a pile of loot, he resolved to give away all his money. Yet his good intentions turned him into a rather nasty capitalist; with apologies to Balzac, there may have been no great crime behind his fortune, but there were certainly a lot of ill-gotten gains. Carnegie became a man possessed, hell-bent on increasing revenues to fund his ecstatic visions. As Mr. Nasaw makes clear, part of the problem with Carnegie is that he fancied himself a disinterested sage who transcended all class and interest: Carnegie believed he could be a friend to the workingman, a selfless captain of industry and public philosopher all at once. But squaring this circle would prove nearly impossible.

If Carnegie believed the community created riches—a position he outlined in his famous “Gospel of Wealth” articles—he also believed that the community should have no role in its disposal. This awesome task would fall on the shoulders of the all-knowing retired capitalist (i.e., Carnegie) acting as a wise trustee. It was a thoroughly paternalist vision that set Carnegie on a collision course with the unions—they had no role in his scheme—and culminated in the showdown at the state-of-the-art Homestead, Penn., steelworks in 1892, one of the nastiest confrontations between capital and labor in American history. (To the men working in his plants, Carnegie effectively said: I’ll break your union, but take a library as a consolation prize.)

Carnegie’s reputation suffered terribly after the Homestead riots, yet he pressed on undeterred until his death in 1919. Mr. Nasaw’s Carnegie is a man of enormous energy—and enormous conceit. His gifts to the world—free tuition for Scottish university students; the Carnegie libraries; the famous music hall on 57th Street; research institutions; sundry endowments and bequests—were extraordinary, yet his hard-charging ways rankled many. In his campaign for world peace, which consumed his late years, he turned himself into a full-time pest, bombarding Presidents Theodore Roosevelt and William Howard Taft with cables and letters, even telling them how to conduct their diplomacy. An infuriated T.R. fumed that “if Andrew Carnegie had employed his fortune and his time in doing justice to the steelworkers who gave him his fortune, he would have accomplished a thousand times what he has accomplished or ever can accomplish in connection with international peace.”

NO LOUD PROCLAMATIONS FROM THE AUSTERE Mellon, no running off in a thousand directions, no theoretical hobbyhorses and very few wrinkles; there’s nearly no there there. One wit said of Mellon that he looked like “a dried-up dollar bill that any wind might whisk away.” “He was a hollow man, with no interior life,” Mr. Cannadine concludes. “Mellon was a child of Mark Twain’s Gilded Age, though he disliked gilt.”

For all that, Mellon: An American Life is a surprisingly robust, even juicy look into the world of the dour Scotch-Irish G.O.P. Presbyterianism that profoundly shaped Mellon’s outlook. Mr. Cannadine gives ample space to Mellon’s stern father, “Judge” Thomas Mellon, son of a farmer and founder of T. Mellon & Sons bank, the seed of Mellon empire; Andrew’s disastrous marriage; and his strained relations with his children, Ailsa and Paul (the ever-bitter son)—all of which makes the book something of a group portrait.

Born in 1855, as a young man Mellon took the family bank and expanded and consolidated it: swallowing up other banks, seeking out alliances with the cash-hungry innovators of new technologies and processes. He once remarked, “What’s really important is that the money is at work, creating work.” Here, in a concise formulation, is the Mellon way. As a venture capitalist, Mellon was everywhere and nowhere. (When he arrived in Washington in 1921, he was called “the most widely unknown plutocrat in the firmament.”) Quiet in his tactics, he was every bit as aggressive as Carnegie, with none of the bluster. He was also a philanthropist, however much he disliked charity, and on a much smaller scale than Carnegie. (The Andrew W. Mellon Foundation is still doling it out.)

Mr. Cannadine’s account of Mellon’s art collecting—he wheeled and dealed with the canvases as much as he did as a banker, even negotiating with the Soviets in 1930 for a haul of the Hermitage’s greatest works—occasionally drags, but his sections on Mellon’s Washington years are excellent. Mellon has the unfortunate fate of being associated with three of our drabbest Presidents—Harding, Coolidge, and Hoover—but he was a generally solid Secretary of the Treasury, even if he was dogged by allegations of conflict of interest. (Though required by law to divest himself of his business holdings, Mellon did keep up secret contacts via his brother.)

Ignominy came his way in the 30’s, with the so-called “tax trial.” The Roosevelt administration had the knives out for the dim gray men whom they blamed for the Depression, and they went after Mellon, now approaching 80, for tax evasion. Mr. Cannadine’s account of the proceedings is riveting. Needless to say, F.D.R. comes off looking mean, petty and vindictive; it was a nickel- and-dime affair all the way. Mellon was ultimately acquitted; too bad he was already in the grave when the verdict came down.

—Matthew Price writes for Bookforum and other publications.

From The Andrew W. Mellon Foundation

Andrew W. Mellon, 1855-1937 By David Cannadine

Andrew W. Mellon belonged to a remarkable American generation which witnessed the creation and accumulation of individual fortunes in unprecedented abundance by such men as Rockefeller, Ford, Carnegie, Morgan, and Frick. But among these figures, Mellon was unique in that he excelled in four fields of endeavor: as a businessman and banker; as a politician and statesman; as an art collector; and as a philanthropist.

The Mellons were Protestant immigrants from , who had settled in western Pennsylvania in 1818. At an early age, Andrew joined his father Thomas, and his brother Richard, in the management of the family bank, T. Mellon and Sons, which soon became the prime financial agent in the transformation of western Pennsylvania into one of the richest industrial regions in the United States during the forty years before the First World War. Andrew Mellon was an extraordinary judge of entrepreneurial talent, and among the many companies he helped to found and fund were ALCOA, Carborundum, Koppers, and Gulf Oil. He rarely interested himself in the details of such businesses, but he acquired extensive holdings, which meant that by 1914 he was one of the richest men in the United States.

But Mellon was still almost unknown outside Pittsburgh, and it was only his appointment as Secretary of the Treasury in 1921 by Warren Harding which turned him into a national figure. He had long been active in Republican politics in Pennsylvania, he was strongly opposed to the League of Nations, and he delighted in bringing business practices into government. During his long period of office, Mellon cut taxes, enforced Prohibition, and presided over a period of such unprecedented financial prosperity that he was hailed as the greatest Treasury Secretary since Alexander Hamilton. But the Great Crash of 1929, combined with growing criticisms of his close business ties, meant Mellon lost the confidence of President Hoover, and early in 1932 he resigned from the Treasury, and was sent to Britain for a brief period as American Ambassador.

This was the end of Mellon's public career; but it was far from being the end of his life. Since the turn of the century, he had been collecting paintings-initially in the conventional manner of the Pittsburgh plutocracy, but on a larger and more discerning scale after his move to Washington. Urged on by Henry Clay Frick, and aided by Duveen and Knoedlers, Mellon specialized in Old Masters and British portraits, and by the early 1930s he had amassed the greatest collection of his generation. Indeed, at the very time his political career floundered, he scored his greatest triumph as a collector, purchasing twenty one masterpieces from the Hermitage in Leningrad for more than $6 million.

During his life, Mellon gave away nearly $10 million. Much of it went to educational and charitable institutions in his native Pittsburgh, but his most famous gift was of the money and the pictures to establish the National Gallery of Art in Washington, DC. Ironically, at the very time this benefaction was being negotiated with the Federal Government, Mellon was also being prosecuted for tax evasion. Roosevelt hated Mellon, as the embodiment of everything that was bad about the 1920s; Mellon vehemently denied the charges, and was eventually found not guilty of tax evasion. But he did not live long enough to learn of this decision, and nor did he see the opening of the National Gallery.

Soon after Andrew Mellon's death, his daughter, Ailsa Mellon Bruce, set up the Avalon Foundation, and his son, Paul Mellon, established the Old Dominion Foundation. Like their father, both children were generous benefactors to many causes, and in June 1969, these two organizations were merged to form the Andrew W. Mellon Foundation in his memory. Uniquely among his generation of American capitalists, there has been no published life of Andrew W. Mellon.

—David Cannadine is Professor at the Institute of Historical Research, University of London, and has authored a biography of Andrew Mellon, Mellon: An American Life, 2006, Knopf.