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Andrew W. Mellon (1855-1937) was an American businessman and statesman. He served as secretary of the Treasury under three Republican presidents—Harding, Coolidge, and Hoover— and focused on reducing debt, lowering business taxes, and balancing the federal budget. Mellon’s policies were controversial, and he resigned after the stock market crash of 1929.
Key Takeaways
- Andrew W. Mellon was an early investor in major companies like Gulf Oil and Koppers.
- He served as secretary of the Treasury under three presidents.
- He was known for the Mellon Plan, which slashed government spending and reduced taxes on businesses.
- Mellon fell out of favor after the stock market crash of 1929 and stepped down as secretary of the Treasury.
- In later years, he donated millions to charitable organizations.
Early Life and Education
Mellon was born in 1855 in Pittsburgh to Judge Thomas and Sarah Jane Mellon. He was their sixth child, but only the fourth to survive infancy. The Mellons were Irish immigrants who had settled in Pittsburgh in the early 1800s. The family started a bank in western Pennsylvania, T. Mellon and Sons.
Privately educated at home, Mellon joined the family business at the age of 17. He attended Western University—now known as the University of Pittsburgh—but never completed a degree. During his time with T. Mellon and Sons, the bank became one of the most prominent institutions in western Pennsylvania, providing financing as the area grew into a major industrial region. Mellon helped found and fund such companies as Gulf Oil and Koppers.
Mellon had two children, Ailsa and Paul, who both founded charitable organizations.
Notable Accomplishments
Mellon was appointed secretary of the Treasury in 1921 by President Warren G. Harding. Although he had been involved in Republican politics in Pittsburgh, his appointment brought him national recognition.
Mellon served during the booming 1920s, a decade known for remarkable economic growth and expansion. He gave his name to the Mellon Plan, which was passed by Congress in 1924. The plan reduced taxes on businesses and wealthy individuals, instituted higher tariffs, and cut government spending.
The Mellon Plan plan was designed to encourage economic growth and business expansion, and it helped fuel the ’20s bull market for stocks. Notably, it was credited with reducing the nation’s debt some $7 billion by 1929. But both Mellon and his plan faced significant criticism after the stock market crash of 1929.
He was named the ambassador to Great Britain in 1932, but after one year of service, returned to private business. With the arrival of the new Democratic administration of President Franklin D. Roosevelt, in 1933, Mellon found himself charged with tax invasion in a case involving his art collection, but he was never convicted.
Fast Fact
Andrew W. Mellon was featured on the cover of Time magazine twice in the 1920s (1923 and 1928) and on a U.S. postage stamp in 1955.
Wealth and Philanthropy
By the end of the 1920s, Mellon’s personal fortune was rumored to be as large as $600 million, making him one of the country’s richest men. In his later years, he became a philanthropist, giving away millions to educational and charitable organizations in Pittsburgh and Washington, D.C.
Mellon gave both money and artwork to establish the National Gallery of Art in Washington, D.C. He also founded the Mellon Institute in Pittsburgh. In the 1960s, the school merged with Andrew Carnegie’s Carnegie Institute of Technology to form what is now known as Carnegie Mellon University.
His Legacy Today
Mellon was a political conservative, and he promoted measures that protected the wealthy and businesses in the belief that wealth would “trickle down” to lower levels of society, an idea that lives on to this day in some circles. He was known, in particular, for his conservative tax and spending policies, and for the institution of the Mellon Plan, later known as the Revenue Act of 1924. During his life, he was one of the wealthiest men in the country, and he is remembered as a businessman and philanthropist.
The Mellons’ family bank, known as Mellon National Bank in Andrew Mellon’s lifetime, later became Mellon Financial Corporation, which merged with the Bank of New York in 2007 to become today’s BNY Mellon.
How Did Andrew W. Mellon Get Rich?
Andrew Mellon’s family founded the T. Mellon and Sons bank and financed many industrial businesses in western Pennsylvania. Mellon, who went to work for the bank as a young man, invested in companies in early stages, such as the Aluminum Company of America (Alcoa) and Gulf Oil. With an uncanny ability to identify companies with substantial potential, his investments made him one of the richest men in the United States.
How Much Would Andrew Mellon Be Worth Today?
In the 1920s, Mellon’s fortune was valued as high as $600 million. That amount would be worth over $9 billion today.
What Did Andrew Mellon Do With His Money?
Mellon invested his money in many companies, including oil and industrial firms. He also donated significant portions of his fortune to charitable and educational institutions, including the National Gallery of Art in Washington, D.C.
The Bottom Line
A controversial figure, Andrew W. Mellon was one of the wealthiest individuals of his time. As a politician and statesman, he was responsible for introducing tax reforms and policies that encouraged economic growth and business expansion, but he received significant criticism after the stock market crash of 1929 and during the Great Depression. His views are still a topic of debate among economists, as Mellon was an advocate for trickle-down policies and an opponent of progressive taxation.