As secretary, Mellon was also an advocate of tariff reform and the creation of a federal budget system. Andrew Mellon supported such popular causes as payment of war debts owed to the United States by its former wartime allies. However, public attitudes toward the secretary changed rapidly after the stock market crash in the fall of 1929.
Full Answer
What happened to Andrew Mellon in 1930?
While numerous banks failed, Democrats won control of Congress in the 1930 mid-term elections. As the economy declined, so did Mellon's popularity, which was further damaged by his opposition to another bonus bill for veterans.
What companies did Andrew Mellon invest in?
While Mellon's financial empire prospered, his investments in other areas, including Pittsburgh's streetcar network, the Union Steel Company (which was bought out by U.S. Steel ), and the Carborundum Company, also paid off handsomely.
What causes did Andrew Mellon support?
Andrew Mellon supported such popular causes as payment of war debts owed to the United States by its former wartime allies. However, public attitudes toward the secretary changed rapidly after the stock market crash in the fall of 1929.
Why did Andrew Mellon break up with his wife?
In the early 1880s, Mellon had a serious relationship with Fannie Larimer Jones, but he broke off the relationship after learning that she was suffering from tuberculosis. After this experience, Mellon refrained from courting women for several years.
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What did Andrew Mellon do after the stock market crash?
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.
What did Andrew Mellon do?
Andrew Mellon, in full Andrew William Mellon, (born March 24, 1855, Pittsburgh, Pennsylvania, U.S.—died August 26, 1937, Southampton, New York), American financier, philanthropist, and secretary of the treasury (1921–32) who reformed the tax structure of the U.S. government in the 1920s.
What was Andrew Mellon tasked to do to help the economy?
He was tasked with reducing the large federal debt that resulted from World War I. Mellon sought to increase revenue by lowering tax rates in the hopes of both stimulating economic activity as well as increasing overall tax revenue by encouraging more people to actually pay their taxes.
Why did Andrew Mellon reduce federal income tax?
Why did Andrew Mellon work to reduce federal income taxes? Andrew Mellon worked to reduce federal income taxes in order to have businesses and consumers spend more money, growing the economy, resulting in higher income with more money for the government to take.
What did Andrew Mellon do after leaving Western University?
After leaving Western University, Andrew briefly worked at a lumber and coal business before joining T. Mellon & Sons as a full-time employee in 1873. That same year, the Panic of 1873 devastated the local and national economy, wiping out a portion of the Mellon fortune.
Who was Andrew Mellon?
Andrew Mellon, the fourth son and sixth child of Thomas and Sarah, was born in 1855. Though he lacked strong convictions about slavery, Thomas Mellon became a prominent member of the local Republican Party, and in 1859 he won election to a position on the Pennsylvania court of common pleas.
What did the Mellon family do in 1894?
By 1894, the Mellon family's vertically integrated companies produced ten percent of the oil exported by the United States.
What bank did Mellon own?
Along with Frick, Mellon gained control of the Pittsburgh National Bank of Commerce, a national bank that was authorized to print banknotes. Mellon also acquired or helped found the Union Insurance Company, City Deposit Bank, the Fidelity Title and Trust Company, and the Union Trust Company.
What did Mellon do in 1921?
A conservative Republican, Mellon favored policies that reduced taxation and the national debt in the aftermath of World War I .
Why did Thomas Mellon build a schoolhouse?
Because Thomas was suspicious of both private and public schools, he built a schoolhouse for his children and hired a teacher ; Andrew attended this school beginning at age five. In 1869, after leaving his judicial position, Thomas Mellon established T. Mellon & Sons, a bank located in Pittsburgh.
When did Mellon reorganize?
In 1902, Mellon reorganized T. Mellon & Sons as the Mellon National Bank, a federally chartered National Bank. Andrew Mellon, Richard Mellon, and Frick drew up a new business arrangement in which the three of them jointly controlled the Union Trust Company, which in turn controlled Mellon National Bank.
How did Mellon build his success?
Mellon built his success largely by being able to play both sides against the middle. Thus between 1898 and 1902, he financed and brokered a number of corporate mergers, and when many of these mergers failed in the financial panic of 1903, he was able to foreclose on them and gain control of the companies.
Who was Andrew Mellon?
Andrew William Mellon built an enormous fortune as an industrial financier in the late 1800s and early 1900s. He was instrumental in backing many companies that went on to become giants, including the Aluminum Company of America (ALCOA) and the Gulf Oil Corporation. When President Warren G. Harding named Mellon his Secretary of the Treasury in 1921, it seemed the culmination of a brilliant career. However, Mellon would later be one of the men blamed for the Wall Street Crash of 1929. He later served as the U.S. ambassador to the United Kingdom and helped establish the National Gallery of Art in Washington, D.C.
What did Mellon do in his education?
Mellon had an education centered almost exclusively on business. In 1873, he left Western University (now the University of Pittsburgh) in Pittsburgh shortly before graduation. He soon established a successful lumber company and became widely known throughout the Pittsburgh community for his abilities in business.
Where was Mellon born?
Mellon was born on March 24, 1855, one of eight children, to Judge Thomas and Jane (Negley) Mellon in Pittsburgh, Pennsylvania. His father was born into a poor family of Irish immigrants, but established a fortune as a pioneer in the banking and steel industries of early Pittsburgh. Young Mellon was educated at home by a private tutor, and later attended public schools in Pittsburgh. He was given a grounding in business at an early age and apparently received the skills of sound judgment and remarkable executive talents from his father.
ANDREW MELLON'S TAX POLICIES
Andrew Mellon's tax policies lowered the taxes on the rich, but instead of helping the economy, the wealthiest only increased their riches, causing the gap between the rich and the poor to increase, which led to the stock market crash.
ANDREW MELLON
"The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business"
Who is Andrew Mellon?
Andrew Mellon, in full Andrew William Mellon, (born March 24, 1855, Pittsburgh, Pennsylvania, U.S.—died August 26, 1937, Southampton, New York), American financier, philanthropist, and secretary of the treasury (1921–32) who reformed the tax structure of the U.S. government in the 1920s. His benefactions made possible the building of ...
How much was Mellon's collection worth?
Library of Congress, Washington, D.C. (LC-USZ62-56407) One of the nation’s foremost art collectors, Mellon gave a collection valued at $25 million to the U.S. government in 1937. Among other paintings, it contained Raphael ’s Alba Madonna, 23 Rembrandts, and 6 Vermeers.
What did Mellon think about the wartime tax rate?
In discussions concerning reduction of the national debt, which totaled about $26 billion in 1920 as a result of World War I expenditures, Mellon held that continuance of the high wartime tax rates would discourage business expansion and hence reduce revenue. He also advocated reduction of the surtax rates on incomes.
What did Mellon believe about taxes?
A multimillionaire himself, Mellon believed strongly that reducing taxes for the rich was the best way to expand the nation’s wealth. He held that, as the rich invested funds that otherwise would have been taken away in taxes, new businesses would form and….
What was Mellon's benevolence?
After completing his studies at Western University (now the University of Pittsburgh), Mellon entered his father’s banking house in 1874 and proved so capable that in 1882 his father transferred the bank’s ownership to him.
Who was Mellon's financial instrument?
He and Frick were also the principal organizers (in 1889) of the Union Trust Company, which became Mellon’s principal financial instrument and acquired his family’s bank. By the early 1920s Mellon had become one of the richest men in the United States.
Who cut taxes on the rich?
Secretary of the Treasury Andrew W. Mellon, one of the country’s richest men, drastically cut taxes, especially on the wealthy; he also cut federal spending to reduce the national debt.…
Who gave Andrew Mellon the ability to buy and sell stocks?
Frick even gave Mellon the ability to buy and sell stocks on his behalf while the Frick 's went on a European getaway in 1887. Andrew Mellon Makes a Name for Himself in Pittsburgh: In 1883, Mellon became director of Pittsburgh Petroleum exchange, reorganized in 1886, as Pittsburgh Petroleum Stock & Metal Exchange.
Who was Andrew Mellon's relationship with?
Andrew Mellon's Relationship with Henry Clay Frick , The Johnstown Flood, and Beyond: As for his part in the aftermath of the Johnstown Flood, Mellon gave $1,000 for the relief effort, but, adhering to the Club's official policy, made no public comment about the disaster.
What bank did Henry Clay Frick have?
Mellon Bank could now offer more to Pittsburgh's "burgeoning industry," "To that private bank he had added a national bank, a savings bank, and an insurance company, and he had also established a trust company.". Henry Clay Frick had Andrew and his father to thank for his wealth and, thus, fame.
What did Andrew Mellon do for his father?
From 1890 onward, Andrew Mellon had responsibility for his father's fortune in real estate, coal lands, mortgages, bonds, and the like; he also had real estate and shares of his own, including holdings in the banks and utility companies he had acquired during the 1880s.".
How much did Mellon loan his brother Samuel?
He once loaned his brother Samuel $3,000.00. Samuel died in 1879, having only paid back $1,000.00 of the loan. Not even having given the widow time to mourn, Andrew demanded the repayment of the rest of the loan. Mellon was very aloof and not very good with women.
What did Mellon do as a child?
Mellon showed ambition and entrepreneurship at an early age: "As a child he cut grass from the meadows at 401 Negley, and he sold it to passing farmers for horse feed at five cents a bundle.
Where were the trenches in the Mellon House?
Trenches were dug and defensive earthworks constructed; they passed close to the Mellon house, behind the orchards. Andrew Mellon was not yet ten, but he vividly recalled the workers digging and shoveling, and he stood guard over the Mellon cherry trees with an unloaded shotgun.
What happened to the gold standard when the Fed tightened?
By that time, roughly three dozen countries had returned to the gold standard, and when the Fed tightened, many countries faced a dilemma: Unless their central banks also tightened, lending from the U.S. would be disrupted and their balance of payments would move toward a deficit.
Why did stock prices fall in 1929?
First, stock prices were not obviously overvalued at the end of 1927. Second, starting in 1928 the Fed shifted toward increasingly tight monetary policy, motivated in large part by a concern about speculation in the stock market. Third, tight monetary policy probably did contribute to a fall in share prices in 1929.
What was the effect of the contractionary monetary policy in 1930?
In any event, monetary policy remained contractionary; the monetary aggregates fell by 2% to 4%, and long- term real interest rates increased. By maintaining a contractionary stance throughout 1930, after a recession had already begun, the Fed contributed to a further decline in economic activity and share prices.
Why did the Fed slow down monetary policy in 1928?
In 1928 there was a synchronized, global contraction of monetary policy, which occurred primarily because the Fed was concerned about stock prices. These actions had predictable effects on economic activity. By the second quarter of 1929 it was apparent that economic activity was slowing.
What was the Fed's policy in 1928?
In the critical years 1928 to 1930, the Fed did not stand on the sidelines and allow asset prices to soar unabated. On the contrary, its policy represented a striking example of The Economist’s recommendation: a deliberate, preemptive strike against an (apparent) bubble.
What was the price dividend ratio in 1928?
From its peak, the price-dividend ratio fell roughly 30%, to a level roughly similar to that prevailing at the beginning of 1928, when the Fed began to tighten. In the immediate aftermath of the crash, the New York Fed took prompt and decisive action to ease credit conditions.
Who advised the President to liquidate labor?
Perhaps this is what motivated the famous advice of Treasury Secretary Andrew Mellon to President Herbert Hoover, to “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.”. To argue that the actions of 1928-1930 were stabilizing, one must adopt the liquidationist position.
Early Life and Education
Notable Accomplishments
- Mellon was appointed secretary of the Treasury in 1921 by President Warren G. Harding.1Although 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 p…
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.6In 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. …
His Legacy Today
- Mellon was politically 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 1924.2Duri…
Overview
Andrew William Mellon , sometimes A. W. Mellon, was an American banker, businessman, industrialist, philanthropist, art collector, and politician. From the wealthy Mellon family of Pittsburgh, Pennsylvania, he established a vast business empire before moving into politics. He served as United States Secretary of the Treasury from March 9, 1921, to February 12, 1932, presiding over the boom ye…
Political career, 1921–1933
Following Harding's victory in the 1920 presidential election, Harding considered various candidates for Secretary of the Treasury, including Frank Lowden, John W. Weeks, Charles Dawes, and, at the urging of Senator Knox, Andrew Mellon. By 1920, Mellon was little-known outside of banking circles, but his potential appointment to the cabinet received strong support from bankers and Pennsyl…
Early life and ancestry
Mellon's paternal grandparents, both of whom were Ulster Scots, migrated to the United States from County Tyrone, Ireland, in 1818. With their son, Thomas Mellon, they settled in Westmoreland County, Pennsylvania. Thomas Mellon established a successful legal practice in Pittsburgh, and in 1843 he married Sarah Jane Negley, an heiress descended from some of the first settlers of Pittsburgh. Thomas became a wealthy landowner and real estate speculator, and he and his wif…
Business career, 1873–1920
Mellon's role at T. Mellon & Sons continued to grow after 1873, and in 1876 he was given power of attorney to direct the operations of the bank. That same year, Thomas introduced his son to Henry Clay Frick, a customer of the bank who would become one of Mellons's closest friends. In 1882, Thomas turned over full ownership of the bank to his son, but Thomas continued to be involve…
Later life
Numerous financial institutions failed in the months prior to Roosevelt's inauguration, but Mellon National Bank, the Union Trust Company, and another Mellon banking operation, Mellbank Corporation, were all able to avoid closure. Mellon strongly opposed Roosevelt's New Deal policies, especially the 1933 Banking Act, which required separation between commercial and investment banking. Mellon believed that the various New Deal policies, including Social Security and unempl…
Family
In the early 1880s, Mellon had a serious relationship with Fannie Larimer Jones, but he broke off the relationship after learning that she was suffering from tuberculosis. After this experience, Mellon refrained from courting women for several years. In 1898, while traveling with Frick and Frick's wife to Europe, Mellon met Nora McMullen, a nineteen-year-old Englishwoman of Ulster Scots ancestry. Mellon visited McMullen's home of Hertford Castle in 1898 and 1899, and, after …
Philanthropy and art collection
Emulating his father, Mellon eschewed philanthropy for much of his life, but in the early 1900s, he began donating to local organizations such as the YMCA. Mellon committed to his first large-scale act of philanthropy in 1913, when he and his brother, Richard, established the Mellon Institute of Industrial Research as a department of the University of Pittsburgh. In 1965, the institute merged …
Legacy
The Andrew W. Mellon Memorial Fountain in Washington was created by Sidney Waugh and was dedicated in May 1952 by Harry S. Truman. Washington, D.C., also hosts the Andrew W. Mellon Auditorium and the Andrew Mellon Building. The Andrew W. Mellon Foundation, the product of the merger of the Avalon Foundation and the Old Dominion Foundation (set up separately by his children), is named in his honor, as is the 378-foot US Coast Guard Cutter Mellon (WHEC-717).