Living the dream

<strong>Mellon: an American life</strong>

David Cannadine <em>Allen Lane, the Penguin Press, 780pp

"We don't get off here, do we?" Nora Mellon plaintively asked her husband, Andrew, as she arrived in Pittsburgh in October 1900, the new English bride of one of America's richest men. "You don't live here?" She was 21; he was 45, still a virgin, still living under his father's roof. She liked riding and singing; his life was dedicated to one purpose - acquiring and accumulating money. He was, according to his biographer, "an absolute hedgehog", one of the most "cold, taciturn and repressed men of his generation", who "treated his wife like a client of the bank". Industrial Pittsburgh, a polluted megalopolis that contemporaries described as "Hell with the lid taken off", proved a fit setting for a marriage made in hell.

Nora soon sought solace with Alfred Curphey, a moustachioed villain and serial seducer of rich women. She tattooed his nickname for her, "Pig", on her left breast, and lavished Andrew's money on his harebrained schemes. The inevitable divorce proceedings, from 1909 to 1912, were long, expensive and sensational. Andrew fought with icy ruthlessness, hiring detectives to follow his wife and her lover everywhere, bribing politicians to change the state divorce laws in his favour, even employing primitive bugging devices. Nora, with the faux-innocent wiles of a Lady Diana, trumpeted her bitterness in media interviews ("Gold fighting against one lone woman is unscrupulous in its methods. Gold may crush me," she shrieked). In this more patriarchal era, the Mellon millions were scarcely dented by the alimony payments, but the emotional damage to the two Mellon children was profound.

This entertaining melodrama is sketched with empathy and sensitivity by David Cannadine, the distinguished historian of the decline of Britain into Heritage plc, who was commissioned by Mellon's son, Paul, to write this book. But why else should one read several hundred pages about Andrew Mellon, a forgotten figure today? And why is this such an enthralling and extraordinary book?

To scholars of history, Mellon remains interesting, if in a minor key - an innovative capitalist who became the third-richest man in America, a long-serving treasury secretary and founder of the National Gallery of Art in Washington - and on one level this is simply a work of impeccable scholarship. But some may find Cannadine's lengthy and detailed discussions of past policies and controversies dry or tedious, and the narrow focus on Mellon, a "hollow man", off-putting. That would be a shame.

For, at a more profound level, Cannadine has indeed written an exemplary "American life", a depressing chronicle of the corrupting consequences of a life dedicated to the pursuit of money and power. Mellon's life in this telling is a cautionary tale, an indictment of a particular kind of American capitalism and American beliefs that have resurfaced again after 60 years in abeyance. It deserves our attention.

Born to wealth in Pittsburgh - the crucible of Andrew Carnegie's steelworks, H J Heinz's "57 varieties" of processed food, Henry Clay Frick's coke-making business and millionaires galore - Mellon made his fortune as a financier and venture capitalist, making controlling investments in a dizzying range of businesses, notably oil, aluminium and mining. This "Mellon system" was a forerunner of secretive, closely held private equity firms such as today's Carlyle Group, whose partners, like Mellon, have created enormous wealth through a shrewd eye for scientific innovation and managerial talent. Mellon showed little compunction in using tame politicians to win lucrative government contracts, fire thousands of workers at a stroke, and aggressively pursue monopoly power in his industries.

Mellon's exceptionally long tenure as treasury secretary, from 1921 until 1932, serving three of America's most pro-business presidents, showed him adept at using public office for private gain. Like Dick Cheney, a continuing beneficiary of Halliburton largesse, he saw no contradiction between the two. An early proponent of the theory of supply-side economics, that cutting taxes on the rich would spur economic growth, Mellon anticipated by 60 years the pro-plutocrat policies of Reagan and Bush. As secretary, Mellon continued illegally to remain actively engaged in his business affairs, lobbying for tariffs to protect his firms and contracts to help expand them, while repeatedly lying to Congress and the press about his involvement.

In keeping with his distrust of government intervention (except in his favour) and fervent belief in inequality and social Darwinism (strains of thought used today to justify America's porcine corporate salaries and feeble social insurance system), Mellon chillingly rejected any notion that the government should intervene to help those ruined by the Crash of 1929, or those whose jobs and businesses were annihilated in the Great Depression of the 1930s. Speculators "deserved it"; while the unemployed "will work harder, lead a more moral life". Around this time, as criticism of Mellon grew, his son Paul saw this ditty written in a urinal: "Mellon pulled the whistle/Hoover rang the bell/Wall Street gave the signal/And the country went to hell." Cannadine perhaps fails to draw out how much Mellon's (lack of) policies towards the Depression discredited Republican laissez-faire economics for two generations, until their current vogue.

In his final years as treasury secretary, Mellon was less concerned with the growing army of paupers in America than with the construction of the gargantuan National Gallery to house his growing collection of Old Masters (the colour reproductions of which are the only things of true beauty in this book). In an impressive piece of research, Cannadine teases out the full story of Mellon's "ultimate business deal" - the covert acquisition of a string of masterpieces from Russia's Hermitage collection, secretly sold off between 1929 and 1931 to help fund Stalin's first five-year plan.

The fact that this plan caused the death of around 20 million peasants, by famine or in the Gulags, is of course an indirect, unintended, very partial consequence of Mellon's actions. But it is not an unfitting coda to this American life, in which profit had always trumped humanity, with tragic consequences.

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