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American Moguls: Andrew Mellon

Mark W McGinnis

Andrew Mellon, acrylic on paper, 2022, Mark W McGinnis

Andrew Mellon


Values will be adjusted, and enterprising people will pick up the wrecks of less competent people.

Andrew Mellon was a quiet, thin industrial giant and a powerful politician who helped shape both the Roaring Twenties and the Great Depression. But to understand Andrew, you must understand something of Thomas, the father who shaped his life. Many of the business moguls of the 19th and early 20th centuries were true rags-to-riches stories; Andrew’s was a riches-to-enormous riches story.

Thomas was the son of Protestant Scotch-Irish immigrants. They established themselves as honest, hard-working, successful farmers in Western Pennsylvania. Thomas was a voracious reader, and Benjamin Franklin’s autobiography became his secular gospel. He was a good student and graduated from the University of Pittsburgh. His father wanted him to return to the farming business, but Thomas wanted a life of wealth and distinction. He studied law and was soon in his practice specializing in civil law and foreclosures. He prospered. Thomas decided he needed a wife and a “good family,” in his supreme practicality, he found a wife and considered it a successful “transaction.” They had six children, four of which survived; Andrew being the fourth born.

The family grew wealthy with an intense, serious work ethic; displays of emotion were frowned upon in the family, and laughter was rare. They lived in a drab, unadorned house, where Andrew lived until his mid-forties. Along with the law, Thomas carefully invested in businesses, growing his wealth. Andrew was his shadow, and his father would have Andrew read to him, with favorites being Charles Darwin and Herbert Spencer, whose “survival of the fittest” theory suited Thomas perfectly.

In 1859 Thomas was elected a judge, a post he kept for ten years, and then stepped down to pursue his business interests full-time. From that time forward, Thomas was known simply as “The Judge.” He didn’t trust public or private education, so he built a small school building on his land, hired a teacher, and had his four sons educated according to his principles. The Judge’s primary business was banking, T. Mellon & Sons. Andrew briefly attended University and then worked for his father full-time. Andrew was even-tempered, modest, secretive, shy, quiet, and inward and had few close friends, traits that were to follow him the rest of his life. It was once said that if he got religion, he wouldn’t tell God about it.

With the Judge and his four sons working, the family business expanded beyond banking to coal, real estate, construction, and railroads. The Judge introduced Andrew to a young businessman who had just lent money to a coke company, Henry Clay Frick. Frick would become one the most ruthless robber barons of the 19th century and one the few long-term friends of Andrew and his business partner in many ventures. As the century passed, The Judge entered semi-retirement, and Andrew became the head of the Mellons, as his superior business skills were evident. Andrew rode out the financial ups and downs of the last three decades of the 19th century with careful, shrewd, and skillful manipulation of their many business interests. This success was not without costs, not costs to him but to the vast labor force in his businesses. Many men were paid two dollars a day, worked 12-hour days, had no safety precautions, worked in severe pollution, and organized labor and strikes were severely repressed. It was said that every millionaire must have thousands of paupers, and by the end of the 1800s, there were 4,000 millionaires in the United States.

Mellon had been taking regular summer trips to Europe with Frick. In 1900 on the Atlantic passage, Frick introduced Mellon, now 43, to an acquaintance, Nora Mullen. The 19-year-old was beautiful, charming, and outgoing. Mellon’s reserve dissolved, and he fell hopelessly in love with the girl. He proposed to her repeatedly, but she coyly turned him down, leaving a glimmer of hope; finally, she agreed. There were signs of doom even before the wedding. Nora was complaining about gloom and dissatisfaction and how Andrew was always busy. She was everything The Judge would not want for the wife of his gifted son. Her parents did not approve either. She obviously didn’t love him. Mellon was oblivious to it; his careful calculation learned in business abandoned him. The lavish wedding took place at her parent’s beautiful English country estate. On bringing his wife back to Pittsburgh, she was horrified; by the pollution, soot everywhere, noise, and factories. She hated everything. She arrived at the home Mellon had purchased and decorated for her; she was equally appalled.

Mellon returned to his obsessive work, and his quiet, withdrawn self returned. He lavished on her everything she wished and even tried to engage in the city’s social life. In 1901 their daughter Ailsa was born. Nora was still despondent. She languished in bed and was ill with sicknesses the doctors could not diagnose. On a trip back to England, Nora met Alfred Curphey. Curphey was young, handsome, charming, and a first-class gigolo who seduced the wives of wealthy men as a profession. Nora fell for him completely. She stayed in England as much as possible, and Mellon unknowingly supported Curphey and Nora’s four lazy brothers.

In 1907 a son, Paul was born to Andrew and Nora. Also, in 1907 Nora declared she wanted a divorce and to marry Curphey. The separation and divorce painfully drug on for five years. The public scandal deeply humiliated Mellon. As expected, Nora’s marriage to the rogue did not last. Mellon supported and bailed out Nora and her brothers for the rest of his life. The dysfunctional relationship weighed heavily on Alilsa and, later, Paul.

By the turn of the century, Mellon was one of the wealthiest men in America. He was the director of 41 companies, including gigantic corporations such as Alcoa and Gulf Oil, some of which are still in the Fortune 500. Still wounded by the divorce scandal, in 1915, he began thinking about withdrawing from his active concerns in business, but his wealth kept growing and growing.

Mellon had been a lifelong Republican, as had The Judge. Mellon despised the progressive administrations of Theodore Roosevelt, Wilson, and Taft, seeing them taking away some of the power of the great industrialists with anti-trust legislation and supporting labor. Mellon threw his mighty monetary weight into helping the Republicans in 1920 to defeat the progressives. For President, he supported Warren G. Harding. After World War One, the U.S. economy was battered. The national debt was huge, and two million demobilized soldiers were looking for work. There were foreclosures, business collapses, and social unrest. It was a very dissatisfied electorate looking for a change, and Harding won the election.

Harding offered Mellon the position of Secretary of the Treasury; he turned down the job several times but relented and then stayed in the job for 11 years under three presidents. Mellon had to relinquish control of his companies for his new position. He signed them over to his brother and declared his connections were “as if I had died.” Mellon worked at his new job as obsessively as his businesses, working late into the night. One employee said he looked like “a tired double-entry bookkeeper.” After two years in office, the economy had stabilized, and he was hailed the greatest Secretary of the Treasury since Alexander Hamilton. Mellon slashed income tax rates for the rich from 65% to eventually 25%, and estate and gift taxes were also dramatically reduced. He believed that this new enormous amount of money in the hands of the rich would find its way down to the rest of society — the infamous “trickle down” that conservative have loved for a century.

While Mellon claimed to be “dead” to his businesses, he certainly was not. He was in frequent contact with them and even used his position to benefit them. This would come back to haunt him, but for now, he was the toast of Washington, and colleges showered him with honorary degrees. He used his job to decrease the government’s already limited influence on business. The Judge would have been very proud.

New technologies were transforming the U.S. economy; automobiles, electricity, airplanes, and more. The consumer society was forming, and with it, looser morals. It was the “Roaring Twenties.” The roar was for the upper and upper middle classes. The poor felt little of the trickle. 60% of the population lived below the poverty line. The rich instead took those handfuls of money and poured it into stock market speculation, focusing only on the quick money and not on the possibility of equally quick losses. The stock market soared and soared, and many people were elated with the fast money they were making. Mellon grew worried. He and his family invested carefully. Mellon advised people to buy safer bonds and not stocks. He tried to get the Federal Reserve to raise interest rates to slow the economy. They refused. In the Fall of 1929, the huge bubble broke. By November, the losses were at $26 billion. 97.5% of the population owned no stock and were not immediately affected by the crash. Mellon believed the economy would recover and just needed to go through another downturn as it had done about once a decade in most of the previous century. His advice was to do nothing and let it run its course. It didn’t. By 1930 four million people were out of work; the number would grow to 12 million. By 1931 over 2,000 banks had failed; by 1932, the number was 5,000.

President Herbert Hoover was the most hated man in America; Andrew Mellon came in a close second. By 1932, twenty percent of the workforce was unemployed; in some cities, it was 50%. Shanty towns sprung up around the nation that were called Hoovervilles. The most famous Hooverville was in Washington, DC, where 43,000 squatters and demonstrators, the Bonus Army, came to the capital demanding promised bonuses for WWI veterans. Congress denied them the bonuses, and the army, tanks, and tear gas drove the impoverished people out of town.

Mellon was denounced as a robber and much more. One congressman said, “Mellon has violated more laws, caused more human suffering, and illegally acquired more property to satisfy his personal greed than any other person on earth ….” Congress began impeachment proceedings against Mellon. With evidence of him misusing his position for his business’s benefit, the odds of him being exonerated were slim. Mellon resigned. Hoover immediately made Mellon ambassador to Great Britain.

Under the influence of Henry Clay Frick, Mellon had been collecting art since the 1890s. He began modestly but soon moved up to the old masters, collecting Rembrandt, Rubens, Halls, Gainsborough, Romney, Raphael, Goya, Tintoretto, Velazquez, Van Dyck, Botticelli, and many more. Some of his finest buys were from Stalin’s regime in the Soviet Union, which was selling art from The Hermitage Museum. For decades Mellon had been thinking about creating a National Gallery of Art in Washington with his fabulous collection as the core. While ambassador in London, he began seriously working to make this a reality.

In 1933 Mellon returned to the U.S. after Franklin Delano Roosevelt won the White House in a landslide. Mellon was still despised in Washington and still under Congressional investigation for tax evasion. Nonetheless, he dove into the planning for the gallery. He hired the neoclassical architect John Russel Pope to design the building, and he did detailed planning for the project as only one of the most astute businessmen in history could do. Mellon would donate his art collection and an endowment to run the gallery, and it would be built on the national mall at taxpayer expense.

In 1936, at the age of 81, Mellon was diagnosed with cancer. He desperately wanted to conclude the gallery deal before his death. Only with FDR’s approval and promotion would the gallery be made a reality. FDR deeply disliked Mellon, seeing him as a chief villain of the Great Depression. When Mellon, weak, sick, and bent, brought his proposal to the White House, FDR eagerly accepted it and managed the Congressional passing of the necessary bills. Ground was broken for the National Gallery of Art in the summer of 1937. It was called the greatest gift in history and polished some tarnish off his reputation. Andrew Mellon died in August 1937. The massive gallery opened in the Spring of 1941, a worthy setting for Melon’s great treasures.

David Cannadine, who has written a comprehensive biography of Mellon, described him as “cold, shy, inscrutable, and inarticulate.” Of these terms, “inscrutable” fits the complexity of Mellon. He was the epitome of the hard, calculating capitalist, with little or no concern for the suffering his gains caused others. But he was a filial son, a loving husband, a devotee of great art, and, in the end, stupendously generous. His impact on the history of America was large and primarily tragic — like so many moguls, he was a multi-faceted man.

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