A Banker for Billions
Sophie Rogers
Mrs. Baker
6th Hour Literary Analysis
8 March 2019
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Sophie Rogers
Mrs. Baker
6th Hour Literary Analysis
8 March 2019
A Banker for Billions
As the First World War ended, social and economic change began. Most imagine the
1920s with dancing flappers and parties that were as elegant as they were elaborate during the
height of prohibition. America roared to life with surges in consumer goods and growing wealth
from the stock market. This growing economy lived under the shadow of one man, Andrew
Mellon, who served as the Secretary of Treasury from 1921 to 1932. The successful banker and
businessman seems like an obvious choice during the time when business giants like Rockefeller,
Carnegie, and Frick seemed to rule the country. Andrew Mellon’s influence on the United States
began early in banking career, developed during his time as Secretary of Treasury, and continues
due to his philanthropy.
Growing up, Andrew Mellon was no stranger to wealth. Born on March 24, 1855 in
Pittsburg, Pennsylvania, Mellon had access to many resources that would help start his career.
His father, Judge Thomas Mellon, founded a bank that Mellon and his brother would later work
at and develop (Willmann). Later renamed T. Mellon and Sons, the bank became the starting
point for Andrew Mellon to grow his fortune as it became, “The primary financial agent in the
transformation of western Pennsylvania into one of the richest industrial regions in the United
States” (Cannadine). The industrial expansion in Pennsylvania coupled with the growth of T.
Mellon and Sons allowed Mellon to begin investing in more companies. He would become one
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of the richest men in America by 1914 through his ties to the production of aluminum, copper,
steel, coal, banks, and the railroad. By 1921 he served as a board member to fifty-one different
corporations (Willmann). Mellon’s activities in business helped see that the 1920s would be a
decade of mass production and economic growth.
After finding power as one of America’s elite businessmen, Andrew Mellon turned to
politics to continue his influence on the United States. When President Warren G. Harding
became president in 1921, he appointed Mellon, who had been involved in republican politics in
Pennsylvania, to be his Secretary of Treasury. His ultimate goal was to establish a peacetime
plan for the economy. To do this, Mellon made suggestions to ensure more revenue over time.
Andrew Mellon’s ideas highlighted tax and debt reduction in what is now known as the Mellon
Plan. Mellon believed that reducing taxes from big businesses would allow the businesses to
send more money into the economy and encourage the peace and economic success the 1920s
are characterized with (“Mellon”). This time of prosperity has caused many to celebrate Mellon
as the best Treasury Secretary since Alexander Hamilton.
The end of the 1920s was not the only time Mellon faced economic trouble; the newly
appointed Treasury Secretary began his job in an economic depression. This economic
depression was minor compared to the one that would occur at the end of the decade, but the
United States’ participation in World War I caused the national debt to rise from one billion at
the beginning of the war to 24 billion at its end. To solve this, Andrew Mellon turned to his ties
in the business world. He composed a team of Wall Street lawyers who, “Were involved in
constructing the legal infrastructure for the modern corporate capitalist economy” (Murnane).
Mellon and the newly hired Treasury Department employees worked well together thanks to
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their shared belief that protecting private corporations protected the economy. Mellon centered
his plan on high bracket tax cuts and reduced surtaxes. The cambridge dictionary defines a surtax
as an extra tax paid by people who earn more than a particular large amount, or an extra tax
added to something that is already taxed” (“Surtax”). This encouraged Mellon’s idea to relax the
taxation of wealthier Americans. He started with having the reduced surtaxes incorporated in a
bill from the House of Representatives in 1921. Mellon also campaigned in the Senate Finance
Committee where he defended the recommended surtaxes. His full plan debuted in the early
1920s and was signed in 1924. This program eliminated unnecessary taxes for the ordinary tax
payer, give the moderately wealthy a 25% rate reduction, and the wealthy a 33% reduction of
income (Murnane). These ideas seemed great for corporate America, but the Mellon Plan had
trouble appealing to the people working in factories or living in low income apartments. These
grievances were worsened by the depression that would turn the Roaring Twenties into the Dirty
Thirties. Andrew Mellon attempted to continue balancing the budget but had to increase taxes.
During this time he also worked to cut spending but this made the depression worse for the
working class Americans already struggling (“Treasury”). By 1932, Mellon’s time as Secretary
of Treasury was ending, and his political career finished after a year as Ambassador to Great
Britain.
After his time in Washington D.C., the world would begin to see a different side of
Andrew Mellon. Throughout his life, Mellon had devoted large quantities of time and money to
helping lower class Americans. This early philanthropy was often anonymous and many during
the time period probably viewed Mellon as a greedy man with no concern for his fellow
Americans. The Andrew W. Mellon Foundation estimates 10 million dollars went towards
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education and charity in Pittsburg. Mellon would also do small things such as cancelling debts on
Christmas and purchasing food and clothing for the people in Pittsburg (David). Mellon would
not be recognized for his good works until he began to showcase his interest in art. Mellon
developed an extraordinary art collection that began in Pittsburgh and grew onto a global scale
during his career in politics. He added over half of these, as well as donating 10 million dollars,
to the National Gallery of Art during its development and also giving 15 million to its
construction (“Mellon”). These donations helped the American people develop their minds
through art, but Mellon also helped many Americans provide for their family’s basic needs
through his unclaimed generosity.
Andrew Mellon’s influence in today's world is evident through institutions such as the
National Gallery of Art, his many investments in the banking industry, and other industrial ties
have allowed his name to gain recognition for his contributions to American history and the
1920s.
While his good works represented a different side of him, many who were not wealthy saw him
as an advocate for his capitalist colleagues. The Andrew W. Mellon Foundation shows an
example of this kind of thinking when they talk about a federal investigation into Mellon’s
alleged tax evasion. The Andrew W. Mellon Foundation believes that President Franklin D.
Roosevelt’s hatred for Mellon caused the investigation because Mellon represented the bad parts
of the 1920s (“David”). Even with these grudges, Mellon is still considered a successful
Secretary of Treasury. He served as the gross domestic product rose from 671.9 billion in 1921
to 977.0 billion in 1929 (Amadeo). Mellon is also still admired by many republicans who believe
his tax plans should be used today. With a decade that had unprecedented growth and
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production, there are few people and positions that had an equivalent amount of impact on
people’s lives and the future of America.
Works Cited
Amadeo, Kimberly. “The Economy in the 1920s and What Caused the Great Depression.” The
Balance Small Business, The Balance, 25 Jan. 2019,
www.thebalance.com/roaring-twenties-4060511.
Cannadine, David. “Andrew W. Mellon.” The Andrew W. Mellon Foundation,
mellon.org/about/history/andrew-w-mellon/.
“Meaning of Surtax in English.” Cambridge Dictionary,
dictionary.cambridge.org/us/dictionary/english/surtax.
Murmane, M. Susan. “Selling Scientific Taxation: The Treasury Department’s Campaign for Tax
Reform in the 1920s.” Law & Social Inquiry, Vol 29, Issue 4, Wiley Blackwell, 1 Oct.
2004, pp. 820-853, Academic Search Complete,
http://web.a.ebscohost.com/ehost/detail/detail?vid=2&sid=17ba57eb-12ea-43d1-b150-d3
39afa74126%40sdc-v-sessmgr03&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#AN=1
5279425&db=a9h.
“U.S. Department of the Treasury.” History of the Lincoln Cent,
www.treasury.gov/about/history/pages/awmellon.aspx.
Willmann, Megan. “Mellon, Andrew W.” Learning to Give,
www.learningtogive.org/resources/mellon-andrew-w.
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