Give and Take
Mellon: An American Life David Cannadine(Alfred A. Knopf, hardcover, $35) Carnegie David Nasaw
Now that the presidential biographers have picked clean the American pantheon, from Washington to Bush, it's becoming apparent that the real founding fathers of this country may have been our early capitalists.
After all, it's not democracy that is America’s greatest invention, but capitalism. In recent years, early moneymakers from the Rockefellers to the Morgans to the first secretary of the treasury, Alexander Hamilton, have been memorialized in full-scale biographies. Somehow the two Andrews of Pittsburgh—Mellon and Carnegie—have escaped our attention, until now.
Finally, two Davids—Cannadine and Nasaw—take up these subjects in superb books that reveal how very different these robber barons were in all but their most defining characteristic. They really knew how to give money away.
It's a telling lesson today as Bill Gates and Warren Buffett struggle to make sense of how to give their own fortunes away. During his lifetime, Carnegie, who made his money establishing the steel industry, gave away nearly $350 million (which amounts to tens of billions in today’s dollars). He established libraries all over Washington, D.C., not to mention the Carnegie Institution and the Carnegie Endowment for International Peace.
Mellon was a quieter giver, plunging his money into art, and nearly single-handedly building the National Gallery in Washington, which he refused to have named after him. Together their fortunes built Carnegie Mellon University.
Their stories look similar at first—two Scotsmen, one born in America, the other in Scotland—both raised in Western Pennsylvania in the early to mid 1800s. But the similarities end there.
Mellon was born to a well-to-do-family and earned his first dollar doing yard work. His were a godly people. Carnegie, however, came to this country in 1948 at the age of 12 with parents who weren't churchgoers. He had to work. Carnegie’s first job was as a bobbin boy at a cotton mill.
As the true-blue rags to riches story, Carnegie’s is somehow more enriching and enjoyable to follow, even though Nasaw occasionally belabors his research. Born to a somewhat shiftless weaver and a hard-working mother, “Andra,” as he was known then, bootstrapped himself into industry.
He shaved away at his accent and finagled his way into a telegraph company, which allowed him to meet Pittsburgh’s movers and shakers at a very young age. By age 30 he was in business for himself, using his contacts to set up a series of companies that “were awarded insider contracts to supply Pennsylvania Railroad with raw materials and build its iron bridges.”
In other words, Carnegie put himself in the right place at the right time. In the 1870s, he moved to New York and managed his interests from afar, putting capable people like Henry Clay Frick in charge and making them very rich in the process.
His work day consisted of a few hours each morning from his hotel suite in New York, which allowed him to dedicate his life to learning, reading, writing and trying to solve the world’s problems (and sometimes making a nuisance of himself in the process).
If this sounds rather self-absorbed, there is one thing the reader takes away from Nasaw's biography: Carnegie took his role in society very seriously. Through his friendship with British philosopher Herbert Spencer, he developed an unwavering belief in the notion that with great wealth comes great responsibility.
“Spencer offered Carnegie and his generation an intellectual foundation for their optimism,” Nasaw writes, “their sense that history was a record of forward progress, by arguing that material progress went hand-in-hand with moral progress, that industrialization was a higher state of civilization than that which preceded it.”
Nasaw is a terrific writer, and he has really mined the Carnegie archives well. But what makes this biography truly stand out is its intellectual portrait of the man. Carnegie was an odd combination of idealist and brute pragmatist. He had a vision of where he wished society to go, but when the gap between rich and poor suggested it might not be the most positive direction he could be cruelly animalistic in his thinking.
“It is a law,” he wrote in The Gospels of Wealth. “Not evil, but good has come to the race from the accumulation of wealth by those who have had the ability and energy to produce it.”
Nasaw doesn’t ever attempt to give Carnegie a pass in moments like these, and in fact seems to enjoy his little (Carnegie was barely 5 feet tall) hero’s ability to think beyond himself. “He regularly shared his unsolicited views on matters of domestic and international affairs with John Morley, William Gladstone, Lord Salisbury, Lord Rosebery, Joseph Chamberlain, Arthur Balfour … with whomever happened to be in the White House or heading up the State Department in Washington.”
By contrast, in David Cannadine’s hands, Andrew Mellon feels positively muted, the CFO of America’s burgeoning capitalist state rather than its loudmouth CEO. But this personality made him a frighteningly effective banker and investor. “Mellon could be startlingly assertive, especially when it came to closing a deal,” Cannadine writes.” Once he got hold of a business, he didn’t just integrate vertically—investing in supply chains and buying up raw material suppliers—but horizontally, too.
Mellon also knew when to take advantage of others’ misfortune. When Henry Clay Frick and Carnegie had a massive falling out, Mellon created a steel company with Frick. They later collaborated on a shipbuilding enterprise that by 1900 was employing 1,350 men. It was through aggressive partnerships like these that in 24 months in the early 1900s, Mellon leapfrogged from being “a small-scale, private banker” to “a major financier and businessman, hungry for action and eager to intervene.” In short, he was one of this country’s first turn-around artists.
This biography, which was underwritten by the Andrew W. Mellon Foundation of New York, is incredibly useful as a guide to the pipelines of finance of the late 19th century. It is also a terribly sad story when compared with Nasaw’s Carnegie. Mellon made an ill-fated marriage to Nora McMullen, a 19-year-old English woman he met on a boat, which bestowed him with a steady cloud of disappointment and gloom throughout his years until their union ended in scandal.
He adapted by seeking more—when it was not money, it was involvement. Like Carnegie, Mellon was an absolute believer in the power of market forces. He joined the Harding administration as secretary of the treasury (70 years later, Paul O’Neill, CEO and chairman of Alcoa, Carnegie’s former aluminum company, would hold the same post under George W. Bush).
“Not since the laissez faire heyday of McKinley at the turn of the century had Washington seen an administration so unequivocally in favor of private enterprise and individual self-advancement as that which Andrew Mellon now joined,” Cannadine writes.
Ultimately, what saved Mellon from utter gloom—and utter unlikability as a biographical subject—was his love of art. Cannadine writes beautifully about his later life friendship with Frick, and how the latter tutored the former on the art of loving great paintings. During his lifetime he would acquire some of the most important works Botticelli, Raphael and Goya ever painted.
In the end, Mellon would give his entire collection to the people of the United States, thereby establishing the National Gallery. Franklin D. Roosevelt, the New Dealer whose trust-busting had cost Mellon so much money, was the president who presided over this unprecedented gift.
They met for the second and last time on New Year’s Eve of 1936 to consummate the handover. “What a wonderfully attractive man the President is,” Mellon said. “I came through it much better than I expected to.” The same can be said of the subjects of these two terrific books.