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MELLON, ANDREW WILLIAM 1855-1937

BANKER AND FINANCIER

A Father's Footsteps

Andrew Mellon was the son of Judge Thomas Mellon of Pittsburgh, Pennsylvania, who acquired a great deal of wealth from his legal practice but even more from his investments. Andrew learned a much from his father, and in the early 1870s he started his own lumber and building business in Mansfield, Pennsylvania. Because of the depression of 1873, his company went out of business. Mellon went on to build his financial reputation in his father's bank. By the age of twenty-seven he was running the banking house, and soon thereafter he received ownership of the bank from his father. Mellon built his fortune through his ability to shrewdly judge both businesses and businessmen and his faithfulness in following his father's rule of constantly reinvesting profits in the businesses that generated them.

Ground-Floor Investments

Mellon was able to discover several companies in their infancy and provide them with the capital to become dominant American businesses. One such success was in the newly founded aluminum industry. In 1889 Mellon agreed to give the Pittsburgh Reduction Company $4,000 to meet an overdue note in exchange for stock and expressed his confidence in the company by continued financial support. In 1907 this company became the Aluminum Company of America (Alcoa), having provided aluminum for buildings, boats, automobiles, and the Wright brothers' air-plane; by the 1930s Mellon and his brother owned about 33 percent of the company. The oil industry was another success for Mellon. He provided seed money to James Guffey and John Galey for oil explorations at Spindletop Hill, near Beaumont, Texas, where in January 1901 they struck it rich. Within the next year Mellon helped organize the Gulf Refining Company. By 1923 their refinery at Port Arthur was the world's largest, and Gulf was one of the giants of the oil industry. Mellon also invested in the steel industry. He assisted in organizing the Union Steel Company and in 1902 sold it to U.S. Steel for more than $30 million. He also acquired 60 percent ownership in a small steel-fabricating business in the early 1900s. This company, McClintic-Marshall Construction Company, later provided the steel and engineering for the Waldorf-Astoria Hotel, the RCA building in New York City, the George Washington Bridge, and the Golden Gate Bridge in San Francisco. It was merged into Bethlehem Steel in 1931.

The Later Years

In the 1920s Mellon became active in the Republican Party, and in 1921 President Warren G. Harding appointed him secretary of the treasury, a job at which he excelled. Mellon also used his money for philanthropy. He founded the National Gallery of Art in Washington, D.C., assisted the Carnegie Library of Pittsburgh, founded the Mellon Institute, and set up endowments at several universities.