Mellon: An American Life
by David Cannadine
621 pp., $35
If you look at turn-of-the-century entrepreneurs who chose to leave their fortunes to philanthropy, it’s fairly easy to sort out the most important ones. John D. Rockefeller Sr. and John D. Rockefeller Jr. both gave between $450 and $550 million to charity. Andrew Carnegie’s donations were about $325 million. A second tier of givers would include George Eastman, James Buchanan Duke, Henry Ford, and Milton Hershey, whose gifts were in the $100-$150 million range. (These are actual figures; adjusted for inflation, these numbers would be about 20 times larger today.)
Judged strictly on his own giving, Andrew Mellon (1855-1937) would fall in a third tier of donors. In his lifetime, Mellon made $130 million. He gave $52 million of this to charity and left $78 million to his children, Paul Mellon (1907-1999) and Ailsa Mellon Bruce (1903-1969). But his charity includes the great art that forms the basis of the National Gallery of Art and the National Portrait Gallery. This art, which, thanks to Mellon, is available for public viewing, is probably worth many billions today. In addition, Paul Mellon donated about $500 million to charity, while his sister’s gifts were somewhat smaller. Finally, Mellon’s wealth is the basis for the fortune of Mellon’s cousin, Richard Mellon Scaife, who is the only member of the Mellon family currently in the Forbes 400 list of the richest Americans. So Andrew Mellon should be considered one of America’s greatest philanthropists.
Despite his eminence, there has been no biography of Andrew Mellon since his death in 1937. Two biographies were published during Mellon’s lifetime; both are minor and significantly flawed. In 1940 Paul Mellon commissioned Burton J. Hendrick, a leading business historian of his era and the author of the first biography of Andrew Carnegie, to write a book about Andrew Mellon. Hendrick completed the manuscript three years later, but Paul Mellon delayed publication for several reasons, including World War II and another contemporary book that discussed Mellon’s life. With the growing realization that Hendrick’s work was too narrow and increasingly outdated, Paul Mellon eventually decided not to publish the biography. (Hendrick’s manuscript remains unpublished but is available to researchers at the National Gallery of Art library.)
In 1993 Paul Mellon decided to try again and personally commissioned David Cannadine, a historian of the British aristocracy who now teaches at the University of London, to write this book. Mellon’s grants, as well as funds from the Andrew W. Mellon Foundation, allowed Cannadine to write this book over a 12-year period.
Politically, Cannadine is a leftist who disapproves of Mellon’s robust commitment to the free market. “If I had been an American during the 1920s and 1930s,” Cannadine writes, “I like to think I would have cast my vote against Harding, Coolidge, and Hoover and subsequently in favor of Roosevelt.” But although Cannadine found Andrew Mellon “an unsympathetic person with unappealing politics,” he is nonetheless a judicious biographer and an excellent writer who keeps his opinions out of the narrative until the conclusion. Mellon: An American Life is a fine book that substantially deepens our knowledge of this important donor.
Like Donald Trump and Bill Gates, Andrew Mellon was someone who took his father’s small fortune and turned it into a large one. Thomas Mellon came to Pittsburgh in the early 1850s and established a bank, which made money in loans to real estate developers eager to build houses for the workers who toiled at Andrew Carnegie’s steel mills and George Westinghouse’s electrical factories.
Working closely with his brother, Richard B. Mellon, Andrew Mellon was what we would call a venture capitalist. His goal was to find entrepreneurs who needed capital, invest in their companies, and leave them alone.
Journalist John K. Barnes described Mellon’s methods in a 1924 article. “Find a man who can run a business and needs capital either to start or expand. Furnish the capital and take shares in the business, leaving the other man to run it except when it is in trouble . . . The Mellon fortune has grown into a kind of revolving fund for the promotion of enterprises and the employment of workers.”
Most entrepreneurs are lucky if they create one successful business. Andrew Mellon’s wealth helped create four. In 1889 he scored his first success by funding Charles Hall, whose techniques allowed aluminum to be made cheaply for the first time. Hall’s discovery formed the basis of the Aluminum Company of America (now Alcoa). His second major triumph took place in 1901, when Mellon’s funds supported the entrepreneurs who used their discovery of the Spindletop oil field in Texas to create Gulf Oil. Mellon also backed Koppers, a chemical company, and Carborundum, which made a very hard rock that was useful in manufacturing.
Except for Alcoa, all of the companies Mellon’s investments helped to create were merged into other enterprises. But these successful investments allowed Mellon to create a $130 million fortune.
In 1909 Mellon made his first substantial gift. He read The Chemistry of Commerce, in which University of Kansas chemist Robert Kennedy Duncan argued that American corporations should do more to fund scientific research. Mellon used Duncan’s ideas as the basis for creating the Mellon Institute for Industrial Research, which was funded by businesses. Much of the research conducted by the Mellon Institute was proprietary, but the institute also funded basic research that anyone could use. The institute lasted until 1966, when it was merged into what became Carnegie-Mellon University.
In 1921 President Warren G. Harding named Mellon Secretary of the Treasury. In the Harding and Coolidge administrations, Mellon strived to cut taxes for everyone and reduce the national debt. He was particularly proud of lowering taxes for ordinary workers; in 1928, Mellon announced that a childless single man with a $4,000 income saw his federal income tax fall from $120 in 1920 to $5.63 in 1928. As Cannadine notes, Mellon might well be thought of as the first proponent of what later became supply-side economics.
Had Mellon resigned in 1929, he would have been regarded as an outstanding Treasury Secretary. However, he mistakenly continued his tenure as Treasury Secretary during the Hoover administration, and was frequently blamed at the time for somehow causing or deepening the Great Depression.
Around 1905, Mellon became an avid art collector. He formed lifelong business relationships with American art dealer Roland Knoedler and British art dealer Lord Duveen. These dealers valued Mellon’s business so highly they would loan him great paintings for months at a time, so that Mellon could hang the paintings in his Pittsburgh mansion or Washington apartment to see whether he liked them.
Around 1928, Mellon decided that he would use his collection as the basis for a national gallery of art. In 1930, he incorporated the Andrew W. Mellon Charitable and Educational Trust, to which he donated art in return for substantial tax deductions.
Mellon became America’s ambassador to the United Kingdom in 1932, serving for a year. In 1933 Franklin Roosevelt became president. Roosevelt appears to have personally despised Mellon. In 1926 FDR denounced Mellon as “the master mind among the malefactors of great wealth.” In a September 1932 speech to San Francisco’s Commonwealth Club, Roosevelt denounced “financial Titans” such as Mellon who believed that “the business of government was not to interfere but to assist in the development of industry . . . The day of the great promoter or financial Titan, to whom we granted everything if he would only build or develop, is over.”
But FDR did not just rein in capitalists through regulation. As historian David Burnham has shown, Roosevelt frequently used the Internal Revenue Service as a weapon to punish his political enemies. One week after Mellon left office, Mellon learned that IRS auditors were examining his 1930 return. And early in 1934, a grand jury indicted Mellon on several charges of tax evasion. Mellon was acquitted on the first set of charges, accusing Mellon of hiding capital gains on stock sales in various enterprises he controlled. But the grand jury made a second accusation—that the Mellon Charitable and Educational Trust was fraudulent. They said that Mellon bought paintings, hid them in the basement of the Corcoran Gallery of Art, and then took huge deductions “donating” these paintings to the Trust.
At the time, Mellon had not made public his plans to create a national gallery. Part of his silence was that Mellon was a naturally reticent man. Another reason, says Cannadine, was that he hoped dealers would reduce their prices if they thought Mellon was buying art for his personal collection rather than planning to donate his collection to the nation.
In 1936 the case against Mellon went to trial. Mellon then went to Franklin Roosevelt and offered to donate his paintings and some funds for an endowment to the United States as the basis for the National Gallery of Art. But Mellon set firm conditions for his gift. The federal government had to build on the site he preferred, had to accept a board of directors which had some independence from the government, and had to accept his architect, the great classicist John Russell Pope.
Roosevelt accepted Mellon’s offer. But even though Mellon’s plans for the National Gallery were made public, the case accusing Mellon of making phony donations to charity continued.
Andrew Mellon died in 1937, knowing that construction of the National Gallery had begun. (Construction would be completed in 1941.) One year later, a court acquitted Mellon’s estate of fraudulent philanthropy.
Mellon insisted that the gallery he created not be named after him because he hoped other donors would give to the collection once it opened. Immediately after Mellon’s death, Philadelphia industrialist Joseph Widener donated his paintings to the collection. Both Paul Mellon and Ailsa Mellon Bruce also made major gifts, and Paul Mellon served as the National Gallery’s chairman for many years.
In his last years, Mellon also bought historical portraits of many Americans. These were willed to the Smithsonian, provided that a National Portrait Gallery was created within 25 years of Mellon’s death. Congress approved the creation of the portrait gallery in 1958, and it was opened in 1974—with Mellon’s acquisitions as the core of the gallery.
Mellon: An American Life is a fitting tribute to Andrew Mellon’s life and work. Andrew Mellon was one of the greatest businessmen of his era, but, as David Cannadine definitively shows, Mellon was an even greater philanthropist.