U.S. secretary of the treasury serving from 1921 to 1932 and
advocating federal government incentives to promote maximum efficiency and productivity of business and industry.
Born March 24, 1855, to a banker’s family in Pittsburgh,
Pennsylvania, Andrew Mellon graduated from the University
of Pittsburgh. By controlling the family banking business with
his brother and acquiring interests in coke, coal, aluminum,
and iron enterprises, Mellon became one of the most important financial tycoons and wealthiest industrialists in the
United States and the world. As U.S. secretary of the treasury—first appointed in 1921 by President Warren G. Harding—Mellon strongly supported the expansion of corporate
industry. Believing that economic prosperity depended on the
willing reinvestment of corporate profits into the economy,
Mellon sponsored a federal policy of levying substantially low
taxes on corporate profits, personal incomes, and inheritance.
Largely because of his effort, Congress reduced personal income taxes by almost 50 percent for the top bracket of taxpayers earning more than $60,000 annually and deeply cut
taxes on inherited wealth. The Treasury under Mellon returned considerable tax refunds to large corporations like U.S.
Steel in the hope of encouraging the expansion of corporate
business. To compensate for the loss in government revenues,
Mellon preferred drastically slashing government spending.
To pay for the unavoidable expenditures of government, he
proposed to increase import duties and modestly raise regressive taxes (taxes that take a larger percentage of income from
lower-income than from higher-income people). Aided by
this policy, according to Mellon, business would create jobs
and foster a better standard of living; economic prosperity, encouraged by government policy, would “trickle down” to the
middle and lower classes. Such a government policy would
also advance the spirit of enterprise in America, Mellon
thought. Mellon died August 26, 1937.
—Guoqiang Zheng
References
Parrish, Michael. Anxious Decades: America in Prosperity and
Depression, 1920–1941. New York: W. W. Norton, 1992.