[CTRL] [2] Mellon's Millions

[Kris Millegan]

 -Caveat Lector-

an excerpt from:
Mellon's Millions
Harvey O'Conner©1933
Blue Ribbon Books
New York, N.Y.
-----
Starts of slow, but gets better.
Om
K
--[2]--
2
Judge Mellon's School
for Business

0NCE Thomas Mellon had satisfied, in part, his primary ambition to amass a
fortune, but one consuming passion remained. That was to rear his boys to be
"respectable, useful and smart men." Of what use was it, in the long run, to
build a fortune unless there were sons to continue the work of "well doing"?

In the Mellon scheme, girls were unimportant, if not actually a hazard.
"Daughters who die young," he wrote, "need not be greatly lamented." Saddened
by the loss of his two girls in early childhood, he could "derive comfort from
the reflection that it is well. . . . Females way be brought up in all the
comfort and enjoyment which tender care and wealth can confer, to be launched
on a bard and unfeeling world. Whilst celibacy is the safest, it has its
drawbacks; and marriage is a fearful risk. Apart from the pains and anxious
cares of maternity, the chances are so great of obtaining a husband who may
turn out to be heartless and cruel, or a drunkard and spendthrift, and the
consequences so tremendous, that daughters who die young need not be greatly
lamented."

But when Selwyn died at the age of 9, his father was overwhelmed with grief.
"Time has brought me consolation in all other deaths but this; for Selwyn I
cannot be comforted."

Sarah Jane Negley bore her husband eight children. Thomas Alexander and James
Ross were separated from the younger brothers by the disparity in ages
resulting from the death of the next three children, Sarah Emma, Annie Rebecca
and Samuel Selwyn. Andrew William, born March 24, 1855, was nine years younger
than Thomas Alexander. Richard Beatty and George Negley were the youngest.

Tuberculosis appeared in the family despite Thomas Mellon's rejection of Sarah
Liggett for fear of "hereditary consumption." James Ross won his fight for
health in the West, but George succumbed after a vain thirty-year struggle.
Andrew never succeeded in putting meat on his meager frame.

Fearing vicious associations in the public schools and laxity in the private,
judge Mellon built a schoolhouse on his own property and employed a private
tutor for his boys, "sometimes admitting a few other pupils of proper
character to lessen the expense." Boys met in the public schools were
"frequently coarse and low by nature," rejoicing "in vulgarity, disobedience
and contempt for study. Such associations are injurious to those of gentle and
high nature." Softness was creeping into the private schools; mothers objected
to the whip. But judge Mellon contended that "with most tempers punishment or
restraint of some kind are necessary to preserve order and enforce attention
to studies."

The superintendent of the Mellon school eliminated those subjects not directly
related to the training of young business men. "For business men," he
contended, "it is unnecessary to waste much time on the classics and special
sciences, as such knowledge thus acquired soon fades from the memory."
Reading, writing and arithmetic were the primary studies. Once the pupil had
mastered these thoroughly, he advanced to the mathematics needed for accounts,
the mysteries of rent, interest and profit, business law, and surveying—a.
useful branch for those who were to make millions by turning farms into city
lots.

Unifying these diverse studies were the father's earnest lectures on the
virtues of thrift, application, self-denial, sharpness of eye and mind. At the
supper table the judge discoursed on the weaknesses of human nature as
revealed in his court room and warned his boys to take heed.

The Mellon boys were chips off the old block. Their eagerness to study and
work delighted their father. Thomas and James at an early age decided they
would grow up to be blacksmiths, and asked to be apprenticed. The judge deftly
satisfied their whims, while saving them for more lucrative trades, by setting
up a smithy in back of the house. Andy, at the age of 9, was in business for
himself marketing the produce of the family orchard and garden. Early he
learned the good feeling of money by pocketing the proceeds of his apples and
potatoes. Thomas, at 18, had borrowed $3,000 from his father to buy General
Negley's nursery business. Within a few years Thomas repaid his father, sold
the business and netted several thousand dollars clear profit. "I  considered
it quite a promising beginning," commented judge Mellon.

The second boy, James, frail in health, was sent to Milwaukee in 1863 to face
the rigors of a frontier winter. His father now fell prey to all the fears of
a fond parent whose fledgling has passed from his own sheltering wing.

"Make no friends," he counseled, "until you know their private moral
character. Make no friends-that is companions—of theater-going, party-going or
young men who talk of the pleasure of company and the like; not that such
things are bad in themselves as the influences and temptations they bring
about."

Most of all did the snares and temptations of the flesh to which James might
be subjected in a frontier town worry his father. "Indeed," he wrote the
nineteen-year-old boy, "I have never warned you enough against female company
keeping. I know nothing which so unfits, a young man for manly, serious
studies and business, and it is worse than useless. My good uncle Thomas
ruined his whole family by encouraging them to mingle in good society for the
purpose of polishing their manners, as he called it. It is all proper to treat
female company, when necessarily thrown into it, with proper, manly
politeness, but what character is more odious to males and females than a
ladies' man? What business has he hanging around girls that he cannot or has
no intention of marrying? Another bad habit which I suppose you have shunned
since making a fool of yourself at Canonsburg [Jefferson College] is writing
letters to girls. This is even worse than keeping company with them
occasionally. Who wants a wife that has been writing love letters to every
fellow, and all such letters are love letters, disguise them as you will."

The young man was urged to look about him with an eye to business. "Learn the
modus operandi of the coal business and merchandising and iron business or
other important branches of manufacturing, it may be useful to us hereafter. .
. . As to the coal business, I consider it one of the best, and highly
respectable."

The future millionaire was looking for work to relieve his father of the
embarrassment of remitting him money. Paper collars at 13/2 cents apiece he
found were cheaper than cloth collars which cost 5 cents to launder. Two paper
collars lasted a week. He was directed to use lighter paper to cut postal
charges, and instructed how to fold the letter to fit the envelope.

The young man intimated that banking was a desirable trade. His father was
only mildly interested. "There is nothing in banking but what you ought to be
able to learn in a week or two. . . . I know very well that I could commence
and manage a bank or broker's office tomorrow and I have observed that a bank
clerk who sticks to it for some years is never fit for much else." He
counseled James to study drawing. "I don't mean pictures, but plans of all
kinds of buildings and machinery and diagrams. Read no light or frivolous
works like novel reading and light literature -it unhinges the mind entirely
for manly employment."

When James finally found a job in a lawyer's office, judge Mellon was happy.
He wrote that "when I was at college and nothing to do but study, I was
annoyed with an inclination to visit and gad about among acquaintances and
talk gossip with them, but as soon as I got a situation and had plenty to do,
I was perfectly relieved of this disposition and felt much more independent."

Hardly had James settled down to work, however, than he succumbed to an offer
by the Milwaukee Chamber of Commerce to enlist for 100 days, at $25 a month,
to guard prisoners of war. He wrote asking, practically demanding, parental
confirmation.

judge Mellon trembled with rage. Grabbing his hat, he hurried down to the
telegraph station. "Don't do it," he ordered. "I have written."

He upbraided, cajoled, lectured. "It is not so much the danger as disease and
idleness and vicious habits," he wrote James. "We owe nothing in the way of
making up Wisconsin's quota. It makes me sad to see this piece of folly. . . .
I had hoped my boy was going to make a smart, intelligent business man and was
not such a goose as to be seduced from his duty by the declamations of
buncombed speeches. As for the $25 a month, what signifies that? But perhaps
there is no use in advising. Perhaps it is a parent's lot to be disappointed
in their hopes and expectations about their children."

Sarah Jane was no less dismayed by her son's capitulation to patriotic ardor.
"I was not prepared for such heart-sickening news," she wrote. "I had thought
you were a boy of stronger mind and better sense or I would never have allowed
you to go from home. You are a poor misguided boy. My dear son, look to God
and ask directions."

The hard-headed judge had practical reasons to offer his son. "It is 'Only
greenhorns who enlist," judge Mellon explained. "You can learn nothing useful
in the army. . . . Here there is no credit attached to going. All now stay if
they can and go if they must. Those who are able to pay for substitutes, do-
so, and no discredit attaches. In time you will come to understand and believe
that a man may be a patriot without risking his own life or sacrificing his
health. There are plenty of other lives less valuable or others ready to serve
for the love of serving."

Judge Mellon won, but thereafter he looked with a more critical eye upon his
son's letters. These revealed no compelling passion. "Now in regard to this
letter of yours and other commonplace generalities about the weather,
strawberries and the like. These are of no interest whatever. What is it to me
whether it rains or shines at Milwaukee? What I Eke to read is your thoughts,
your hopes and fears, wishes and desires, opinions and suggestions."

The boy obliged. He reported that speculators were making millions in wheat.
"They continue growing richer and don't care when the war closes." "I would
like to go into some kind of speculation when I go home," he added. He asked
his father to buy certain grades of tobacco, on which he had a hot tip.

His father was encouraged. It was time for him to be coming home. "You would
be useful to keep my books, collect my bills and speculate a little for me in
houses and lots." But he had a word of caution about speculation. Always, he
reminded James, the Mellon motto had been, "Never be in debt." "I have seen so
many enterprising, energetic and smart men in my past life get wealthy and
again lose it all in speculation that I am confirmed in my opinion that a man
ought never to risk much."

Judge Mellon surveyed from his bench the activities of warmad speculators, and
chafed. To be sure, a thousand men in his collieries along the Youghiogheny
and Monongahela were hewing coal which sold "down the river" at unheard-of
prices. His properties brought handsome rents. But if his profit ran into the
five figures, other men were making millions.

Gloomily he witnessed tax after tax levied on his property, and one batch of
bond issues after another "for illegal purposes, to such an extent that our
property must be confiscated in the end." Perhaps it were best to sell out
everything and move to a "safer locality" in the new West. He inquired of
James if the constitution of Wisconsin permitted "grog shop politicians and
common loafers" to dip their hands into the pockets of property holders
through bond issues. "I really think," replied his son, "that people will have
to take measures to defend themselves, that is landholders. One place is as
bad as another when under the jurisdiction of the government we have now."

Lincoln's reelection did not reassure Mellon. "The only way a person can do is
to get as much out of the government as he can, and that seems to be the best
policy now among the Cabinet, et al. . . . I am inclined strongly to the
belief that our government is all humbug."

His two oldest boys were judge Mellon's consolation. If he himself were
restricted by the duties and position of the bench from joining in the market
place, he now felt he had able lieutenants. They were "out and out business
men," and now that the war was over, it was time that they were harnessed to
execute their father's own shrewd speculations concerning profits in real
estate. James, on his return from Milwaukee, had managed a coal business and
sold out in 1867 at a profit of $5,000 with bad bills of $50. The itch to make
money was in their blood; little else was discussed at the Mellon table when
the three gathered in the evening with the younger boys.

Long before Andrew Carnegie observed that ninety per cent of the millionaires
became so, "through owning real estate," Thomas Mellon reached that
conclusion. Mellon was nearing his first million while Carnegie was working as
a bobbin boy in a cotton mill on Pittsburgh's north side. The nation was to
hear the phrase "Mellon Plan" first in 1924 when Thomas's son presented his
program to relieve the wealthy of part of their tax burden. To Pittsburgh,
however, other Mellon Plans had been familiar since the first one was platted
in the late forties. It covered a small subdivision on "The Hill" immediately
behind the city, then a grazing pasture for cows. No fewer than fifty Mellon
Plans were filed with the county assessor in the seventy-five years to follow.
Not even the duties of the bench prevented judge Mellon from platting, in
neatly charted rows of building lots, choice sections of the city and its
suburbs that lay in the path of the population's progress.

His marriage made Thomas Mellon a seigneur of East Liberty, bucolic village.
The coming of the Pennsylvania Central brought the pleasant community within a
few minutes of the city. And the war released forces in the growing iron
center that made Pittsburgh twist and writhe in that narrow Golden Triangle
which nature had bounded by two rivers and a hill. East Liberty beckoned as
the natural outlet.

Whoever could, fled the city. It had become uninhabitable, although tens of
thousands of pale bodies dragged on within its sulphurous confines. Iron mills
that had spewed their choking clouds of gas and smoke to furnish munitions of
war, now worked night and day on rails for the western plains and mountains.
An unending procession of steamboats, tugs and ferries belched black clouds
which drifted remorselessly over the darkened city where offices burned gas
light the whole day long. Twice the Mellons had attempted to live in the city;
first Sarah Jane's health had suffered, then the children's.

Thus it was that the busy rat-a-tat-tat of hammers resounded through the
peaceful valley of East Liberty when in 1868 the firm of Mellon Brothers
entered the realty and lumber business. judge Mellon bought an orchard near
the East Liberty railroad station. Here the boys erected lumber yards and an
office. At the end of their first year, Mellon Brothers' books showed a net
profit of $100,000.

Their father was elated. The stiff rent he exacted as a test of their mettle
was soon relaxed. Here was honest money, honestly made by following the tried
Mellon principles of foresight, caution and hard work. "I do not wish it
understood," he stated, "that the remarkable success of these two boys at such
an early age was due to great talent or extraordinary abilities. It was simply
the result of good judgment and persevering industry, and the tact to improve
their opportunities during a remarkably favorable period for making money."

Mellon Plans marched up all the roads leading from former Negleystown. judge
Mellon knew every inch of the terrain. Before he ascended the bench, he had
been administrator for General William Larimer, whose $500,000 bankruptcy had
been the sensation of Pittsburgh in 1854; for many of the Negleys; had handled
Sarah Jane's and her mother's acres. Shrewdly he bought other property, laid
out the suburb of Homewood, looked beyond the valley to Braddock's Fields,
where he sub-divided land on which the workmen in his car and foundry shop
might live. Sheriff's sales on defaulted mortgages brought opportunities in
Sharpsburg and Lawrenceville, and spotted the map of Pittsburgh with
repossessed properties.

Mellon Brothers bought land, under their father's sage advice, at $400 to $800
an acre cash. An acre was cut up into twelve lots and each sold at $600 to
$800. Thus $25,000 invested by the Mellons in Homewood brought in $150,000. In
the real estate mania, people bought for use and for speculation. "Every
workingman and mechanic who had saved up any money invested in a lot, even if
they could pay but a small portion of the purchase money, securing the balance
on deferred payments."

Every fiber of judge Mellon's being quivered when he saw other men burying
their hands in the golden stream of profits, while he sat on the bench
listening to people's troubles. joyfully he hailed the end of the term. The
first week of December, 1869, he delivered his last charge to a jury and took
his last verdict. The bar extended a banquet, to "express explicitly our
appreciation of the patient industry, conspicuous integrity, eminent ability
and distinguished success" which had marked his ten years' tenure.

Years later judge Josiah Cohen recounted a bit of unintended humor from judge
Mellon's lips. Cohen, as a young attorney, presented a petition to the grave
judge. Mellon was busy writing, as he did when not listening to a case. "What
did you say that petition is for?" he asked, looking up. "For a charter, your
Honor, for a Jewish burial ground." "A place to bury Jews?" "Yes, sir." "With
pleasure, with pleasure," said the somber jurist.

Just as he had shifted the burden of his professional work to become a judge
in order to have time to train Thomas and James, so now he welcomed a return
to private life, to prepare the way for Andrew, who was just entering Western
University. His future, and that of his two younger brothers, Dick and George,
must be Planned. judge Mellon regarded Andrew tenderly. The frail, nervous.
youth recalled his own shyness. In his eyes, which reminded judge Mellon of
Sarah Jane, there was a depth foreign to his older brothers, who were above
all else practical and matterof-fact in their outlook.

What should the jurist turn his hand to now that he had abandoned the law? His
next vocation should not merely keep him busy, but provide a training ground
for Andrew and his younger brothers as they grew up. Industry did not appeal
to him. Two things he knew and loved-land and money. And if now the older boys
were doing well with real estate, he was left but one alternative. He felt
that he understood the principles underlying the lending of money: he had been
applying them ever since 1838.

In 1866 he had lent the prestige of his name to the newly organized People's
Savings Bank  by becoming President, but had resigned after a few months. His
successor lasted no longer. The next bank he presided over would be his own,
he swore, where a dozen voices and opinions would not be clashing. Thomas and
James were encouraged to open a joint stock savings bank in East Liberty,
partly as a convenience in handling the money turned over in their business,
partly because its overhead, in connection with the realty and lumber
business, could be kept to a minimum.

The private banking firm of T. Mellon & Sons opened its doors on January 2,
1870 on Smithfield Street in a rented store building. A long open counter
bisected the room. A stove graced its center; metal shutters protected the
interior at night. The new firm started at an auspicious time. Money was
plentiful, banks were getting 8 to 12 per cent on their funds and judge
Mellon's name was as good as gold. Deposits flowed in, and soon the proprietor
felt secure enough to turn the bank over to James, while he permitted himself
the luxury of a trip to New Orleans, his first journey since the honeymoon to
Niagara Falls and the Atlantic seaboard.

The first of the Smithfield Street Medicis, elated by the prosperity that
rushed in upon him, yielded to the temptation of the gilded age and decided to
house the bank in a sumptuous building. He bought the property at 512-14
Smithfield Street for $30,000 and spent $28,000 to build a two-story, iron
front structure, the second story and basement of which he rented. A discreet
2-inch single column advertisement in the Commercial-Gazette announced the
business:

T. MELLON & SONS' BANK
512 & 514 Smithfield St.
Pittsburgh, Pa.
Transacts a General Banking Business
Accounts Solicited
Issues Circular Letters of Credit for
Use of Travellers, and Commercial Credits
IN STERLING
Available in all parts of the world; also, issue Credits
IN DOLLARS
For Use in This City, Canada, Mexico, West
Indies, South & Central America.

Andrew, at the near-by university, watched intently the progress of the
splendid new edifice. It was to be his training school in business. He was not
graduated at Western University: he fled commencement exercises to escape the
painful task of delivering a peroration.

The bank proved too confining for the frail youth, however, and judge Mellon
decided to apprentice him and his younger brother Dick to the realty business.
Andy was 18 and Dick 15 when their father set them up at Mansfield (now
Carnegie), eight miles west of the city, a booming town on the Panhandle
Railroad.

"On these properties Andrew and Dick went to work with a will. In a short time
they had their lumber yard neatly and conveniently fitted up, with an office
building and the necessary sheds and warehouses, and well stocked with lumber,
doors, sash, moldings and every kind of material necessary for budding
purposes. They surveyed and divided their other grounds into building lots
themselves, as they were competent civil engineers for all ordinary practical
purposes. They did the work of retailing, measuring and delivering lumber, and
selling lots also themselves; kept their own books and did their own
conveyancing, without any miscarriage or mistakes for the eighteen months they
were in the business, and without any other assistance than the necessary
teamsters and common laborers."

On September 16, 1873, Mr. Whitney, the notary public, looked in at 3 P.m. at
the Mellon bank and asked the judge if he had heard of Jay Cooke's failure.
The Pittsburgh banker was not disturbed. He had no business relations with
Cooke or his railroad projects. But the next morning the newsboys were
shouting, "All About the Panic," and within two weeks the country was gripped
by the most disastrous crisis since 1819.

Thomas Mellon was caught unprepared. Prolonged prosperity and his confidence
in the new currency system had thrown him off guard, even though "history had
taught me that undue inflation is followed by a corresponding depression."
Each day the avalanche of destroyed credit plunged deeper into the abyss,
carrying with it the debris of mortgages, gilt-edged securities, fine
commercial paper. "There was nothing for it now but for everyone to produce
the cash: and no cash was forthcoming."

The banker was confronted by the painful task of matching demands for $600,000
in deposits with $60,000 cash. A few days before the crash he had invested his
loose funds in Pennsylvania Railroad bonds, and mortgages represented most of
the remainder of the $600,000. Fortunately he had avoided short term coal and
iron notes, which became nearly worthless.

Never did judge Mellon and his boys work so feverishly as in those first weeks
of October, 1873. Cash, cash, cash, they demanded, as they made the rounds of
every debtor. Runners were sent out, at home and to distant points, to collect
from customers of the Mellon realty and lumber firms. Men buying property on
time payments found Mellon agents camping on their doorsteps to demand
payment, if due, to wheedle cash on the next payment if possible.

Only the Mellons knew that the inevitable was just around the corner. Business
men continued making their deposits, but they dwindled to petty amounts. Each
day the bank's cash balance showed a steady decline. But Pittsburgh had
confidence in Judge Mellon. His name was synonymous with caution,
conservatism, safety. If any Iron City bank were secure against panic,
depositors felt, it was the Smithfield Street institution.

On October 16, exactly one month after Jay Cooke's failure, the firm of T.
Mellon & Sons stopped payment to depositors. "It was a bitter pill for me to
acknowledge present inability to pay every demand upon us. Neither myself nor
any of my ancestors so far as I knew had ever been in that condition before."

Typical of the Mellons was the Judge's refusal to close his bank, although now
he had only $12,000 in cash to meet deposits of $200,000. Dozens of banks had
closed. But Thomas Mellon would carry on. He was confident that the storm
would blow over and his gilt-edged bonds and mortgages recover their intrinsic
worth. In the meantime customers could enter the bank to pass the time of day
with the stern-visaged proprietor, discuss the financial horizon, recount
details of the latest industrial or banking catastrophe.

Judge Mellon, as a private banker, was not obliged to close his bank. He
didn't like government interference with business; did not care to have
federal bank examiners snooping into his accounts, checking an honesty which
he held far superior to that displayed by the administration of General U. S.
Grant. Private banking also gave its proprietor wider leeway in confidential
relations with powerful clients.

No crowd of angry depositors gathered to shake their fists in the old man's
face. Whatever his reputation for hardness, people felt that in this cool
granite-like figure there was the security of probity. The business elders of
the town dropped in to express their sympathy and their hope. "I have ever
since felt gratified," he wrote, "at the generous consideration with which we
were treated."

judge Mellon was utterly disillusioned. He decided to close his banking house.
Apparently there was no way for a prudent man to escape the hazard of ruin in
a business which depended so much on credit and confidence. It gave him, he
confessed, "more vexation and mortification than all the other adverse
circumstances of my business life put together." The worst phases of the money
panic blew over in a few months however, and the bank resumed payments. He
consented to remain in the banking business, more because he would have to
have an office downtown anyway, with some clerks, to take care of his other
business. The added overhead for the bank would be trifling. Nevertheless the
Mellon bank in East Liberty was wound up, the depositors paid off and the
stockholders reimbursed. This bank had paid 12 per cent annual dividends
during its five years.

The panic brought Andrew's realty business to a sharp halt. By quick work he
sold out material on hand at a profit and threw in a long-term lease on the
lumber yard as an inducement, the first of his masterly strokes in business,
because the collapse in realty values lasted longer than could have been
imagined in 1873, Andrew went to work with his father in the bank while Dick,
growing into robust manhood, was entrusted with the outside work, looking
after judge Mellon's properties throughout southwestern Pennsylvania.

After the panic, reconstruction. The debris must be swept away, and the
Mellons wielded a vigorous broom. Foreclosure was the order of the day. For
years their most valuable public servant, the sheriff, had his hands full
serving notice on the unfortunate. For many the savings of a lifetime,
invested in property, were sold for a song. The Mellons were on hand to make
the trifling bid which brought the property back into their possession.

It was a hard test of judge Mellon's texts on thrift. Already modern
industrialism, complex, mechanistic, was addling Poor Richard's maxims. Mellon
remained undaunted. "Some," he said, "were hopelessly incapable through bad
habits and extravagant living; others through general thriftlessness, and the
depression of wages and employment rendering it apparently hopeless for them
to make the necessary effort." Thousands simply deserted their property; the
little money they had was used for food.

Remembering when his parents themselves faced dispossession in 18ig-i82o, he
relaxed the terms of the contract for those "who made any earnest effort of a
like nature." But to the dozens who appealed to judge Mellon for eased
payments or remission of interest, there were hundreds for whom any pretense
of a struggle was useless. "We held numerous mortgages both for purchase money
and for money loaned, and also many contracts for lot sales on-time payments
on which less or more had been paid; but in the majority of cases the property
was abandoned."

Thousands of men roamed the Pittsburgh district, begging work at every mill
gate, begging bread for their children. By 1877 their suffering had reached
the breaking point. Misery burst through its rags in great riots that set the
entire country gasping. The Pittsburgh militia refused to shoot down their
fellow towns- men. Philadelphia troops were called in. They advanced on the
crowd with drawn bayonets. Rocks were thrown. Then someone ordered the
soldiers to fire. Twenty of the unemployed were killed, thirty wounded,
including three children.

All hell broke loose in tight-lipped Presbyterian Pittsburgh. A leading daily
newspaper viewed it as the opening battle of a new Civil War, in which the
rich men of Pittsburgh were to be hanged on the nearest trees. Railroad
stations and buildings were burned to the ground. Gun stores were broken into.
Food stores were raided. Banks placed armed bands within. The wealthy
respectables hastily formed a Committee of Public Safety. judge Mellon was
astounded. He attributed the riots to the "vicious classes" and never ceased
complaining of the burden to taxpayers caused by the $3,000,000 bond issue
voted to reimburse the Pennsylvania

Railroad and other firms.

Foreclosures proceeded inexorably. None caused wider comment than the
dispossession of old James Kelly, patriarch of Wilkinsburg, the town beyond
East Liberty. He had settled there in 1824, taking over for his own residence
Dumpling Hall, then the grandest building for miles around. Although he became
seigneur of Wilkinsburg, he refused to abandon the ways or the queue of his
youth.

The seigneurs of Wilkinsburg and East Liberty clashed in 1859 when Kelly
declined to support Mellon in his campaign for judgeship. The seigneur of East
Liberty never forgot. Twenty years later James Kelly had become an almost
legendary figure in Wilkinsburg. Hobbling about on his cane, the patriarch was
greeted by one and all with the respect and affection owing the founder of
their bustling little community, toward which the big city speculators were
already casting covetous glances.

If Kelly were rich in land, he was poor in cash, a plight reminiscent of the
Negleys in the 1820's. He had become heavily indebted to two Pittsburgh banks,
one of them the Mellons' National Bank of Commerce. In 1879 they foreclosed.
The description of the property the sheriff read from a sheet three feet long
and twelve inches wide.

Nor was there any James Ross around, as in the Negley foreclosure, to protect
the old man's estate. The Mellons had no qualms. After all, Kelly had not been
careful in business, his son was a wastrel, there was no point to obstructing
the working out of economic laws. The Mellons satisfied their claims and
became owners of a good share of Wilkinsburg. To the old man, broken in years
and spirit, was left the occupancy of Dumpling Hall, in which he died three
years later.

The Mellons emerged from the long-drawn-out depression in 1880 with
irreproachable prestige. Scores of their competitors in the realty and banking
field had succumbed. Much of the property the Mellons believed they had sold
was theirs again to be resold. Choice properties which had flown the flag of
distress had been bought up at a mere hint of cash. If the Mellons' strictness
became proverbial in Pittsburgh in those years, it also served to build up
confidence in their financial integrity. A certain austerity, a certain
caution in dispensing the milk of human kindness are desirable in a banker
handling other people's money.

Typical of the Mellon acquisitions of the period was the Ligonier Valley
Railroad, which had gone under the sheriff's hammer. Several leading
stockholders bought the company's assets, an unrailed roadbed. The syndicate
approached judge Mellon. He was offered four-fifths of the capital stock, a
mortgage to cover the cost of completing and equipping the road, and a $10,000
cash bonus.

Thomas and Dick superintended the grading, bridging and track laying. James
bought the ties and supplies. The boys anticipated Henry Ford, by offering $1
a day for labor; the Pennsylvania Railroad was paying only 90 cents. Old
contractors at Latrobe laughed at the extravagance. The Mellon manner proved
more intelligent and profitable. They fired a dozen of the men who would not
keep up the pace and within 60 days the first train entered Ligonier. Dick
remained to manage the road. Money rolled in, and Judge Mellon's only
complaint was the lack of competing through lines with which the little road
could bargain. For years he hoped Vanderbilt would challenge the
Pennsylvania's monopoly.

To this day the Ligonier Valley Railroad remains a sentimental pocket piece of
the Mellon family. James is president, Dick secretary, his son Richard K. is
treasurer and Thomas's son, Thomas A., is vice president. Only Mellons serve
as directors.

Buying rails for the Ligonier Valley was nothing new for James. The Mellons
for years had been interested in traction companies whose plodding nags
furnished proletarian transportation between Pittsburgh and its thriving East
End. judge Mellon was financier for the Pittsburgh, Oakland and East Liberty
Passenger Railway Company, which had been bought at a sheriff's sale. At first
traction was merely a sideline for the enterprising family of real estate
dealers, later it became remunerative in its own right as the Mellons shaved
their share off each nickel. In 1887 the line was sold to Philadelphia
traction financiers. judge Mellon, in Carolina helping George fight off
tuberculosis, warned Andrew to keep a sharp eye on the Philadelphia slickers.
But Andrew bad taken a thorough post-graduate course in T. Mellon & Sons' bank
by that time and needed little cautioning.

Wearied at last of "well doing," Thomas Mellon put to one side the routine of
business and finance around 1885. His spare, erect figure was still to be seen
on downtown streets. Business associates dropped in at 512 Smithfield Street
to recall old times and discuss the decadence of the present. To them was
revealed a philosophic spirit, a dry, crackling wit, an acrid point of view.
To young men in search of financial backing he was grave, courteous, even
fatherly, if they reminded him of the poor Thomas of the 1820's. To the
populace he remained a cold, impenetrable figure, hardly human. It was
remarked by those who knew him only casually that his stern features had never
been seen to relax into a smile; indeed the lines appeared so hard that a
smile would have cracked the face to bits.

He continued, in prosperity, the abstemious habits of his early years. "I have
avoided late hours and excesses," he explained, "and exercised full control
over my appetites, and have been a light eater of plain foods, seldom using
any stimulating beverage, and no tobacco." His dark, deep-set eyes peered as
intently as ever upon would-be borrowers. As the years advanced he added not
at all to the 1 60 pounds of his five feet nine inches.

Life had been kind to the Ulster immigrant's boy. He was wealthy beyond his
dreams of fifty years ago. He was surrounded by sons who were eager,
aggressive, intent on expanding the fortune. Age was creeping into his bones;
he was well content to let them carry on. He would sit by the fireside and
record for his children's children the story of his life. "I cherish the
hope," he wrote, "that, should an old copy of the book happen to fall into the
hands of some poor little boy among my descendants in the distant future, who,
inheriting a share of my spirit and energy, may be desirous of bettering his
condition, it may tend to encourage and sustain his commendable ambition."

Apparently he was indebted to a clever genealogist for the mi. formation that
the name "Mellon" was of ancient origin, "so ancient as to be prehistoric."
The Thebans took the name from the Scythians or Greeks. The patronymic was
carried along the Mediterranean and thence to Ulster. Even in the Nineteenth
Century, a newspaper known as The Mellon was being published in Greece, he
noted.

The Scotch-Irish from which he sprang, Judge Mellon emphasized, were not to be
confused with the Irish, a detestable, priest-ridden race. His progenitors had
crossed the Channel from Scotland to Ulster after Cromwell's avenging armies
had slain and driven out the native population. "It is very manifest," he
commented, "that it would have been well for Ireland had this policy of
extirpation been carried into effect throughout the entire island." Lawyer
Mellon pointed out that the English had a perfect right to the island, citing
the papal bull of Adrian IV ceding Ireland to Henry II in 1155. "The document
is in the nature of a perpetual lease."

The Mellon coat-of-arms, in which as a loyal son of anti-royalist Covenanters
he placed little virtue, carried as its motto Cassis Tutissima Virtus, which
he rendered as Honesty is the Best Policy. That "better fits our family
character than those mottoes, . . . which commemorate heroic exploits of
ancestors in war. Our ancestors, as far as known, and all the modern branches
of the family, avoided soldiering, except as a necessary duty, . . . and were
notable only for good habits, and paying their debts."

The family's annals were short and simple. Harriet Mellon, Duchess of St.
Albans, actress and beauty, was the notable exception. "There must have been
something good in Harriet Mellon," he concedes, "for notwithstanding her
profession and varied life, and progress from poverty to wealth and fame, and
the possession of such personal attractions as brought the greatest banker of
the day, and subsequently a peer of England, in his turn, to her feet as
suitors, she retained a good moral character through out." Nevertheless he
could not forgive Thomas Coutts, the banker, for trifling with her. "To me it
only manifests weakness in the great banker."

Thomas Mellon's age-the age of small industry, of the ready rise of skilled
craftsmen to independence-died before he did. He hated and feared the great
steel mills that the Carnegie brothers were rearing along the Monongahela. His
philosophy had been hammered out in the mercantile era by the Calvinists of
Geneva, the Huguenots of Paris, the Puritans of London and Bristol and the
Covenanters of Glasgow and Edinburgh. Then there had been no aggregations of
machinery or workingmen either. The new mass production tended to "separate
and antagonize labor and capital," judge Mellon felt. "Small proprietors who
own their own tools and work on their own materials are better contented and
make better citizens."

"With us it is not slavery but manufacturing and machinery which is drawing
the working classes from the country and crowding and demoralizing them in
cities, . . . and our working people, like those of Rome, are becoming more
and more clamorous of what they suppose to be their rights, and more
regardless of their moral and social duties to themselves and the public. They
claim a more general or equitable distribution- of wealth, but disregard the
prudential virtues and habits of thrift, sobriety, and self-restraint
necessary to acquire or retain it when acquired. . . . I fear that if
degeneracy progresses at the same rate a catastrophe will be reached before
the end of another half century."

Yet he was forced to admit the hopelessness of the workers' lot in terms that
would have satisfied a labor organizer. "The employees and their families in
the larger manufacturing and mining establishments," he admitted, "are often
designated each by his number, and Eve in numbered tenements, and are all
subjected to the same routine, and treated alike; too much like the soldiers
of an army or the inmates of a prison. The opportunity to work up and out and
better their condition is rendered so remote as to appear to them hopeless."

This new age of mass industry and regimented workers carried its own poison,
he felt. "Nothing," he wrote, "has appeared in my time which threatens more
serious consequences than socialism.... In all its forms it springs from the
same root.... the desire of the idler, the worthless and good for nothing, to
place himself on a footing of equality with the careful, industrious and
thrifty."

Socialists fastened their influence upon workers through the trade union
apparatus in the coal mines and steel mills. "Labor organization is not in
itself wrong," judge Mellon conceded. "True social science justifies it for
all legitimate purposes. But combinations of employees to procure higher wages
than the market rates, by resort to coercion through the means of sudden and
concerted strikes, and hindering and preventing others from taking their
places with a view to suspend the work of their employer until he is compelled
to accede to their terms; this compulsory element of the strike is neither
just nor legitimate, and is contrary to the first principles of civil liberty.
. . . They forget that this is a free country, and that every man is the owner
of his own labor, and has the right to dispose of it as he pleases." His
doctrine became a commonplace for corporation lawyers and injunction judges in
later years.

The founder of the Mellon fortune pondered the teachings of Karl Marx that
labor is the author of all wealth. Not that he doubted for a moment its
essential error; but he was troubled that other economists such as Adam Smith
and Ricardo had made similar statements. Their opinions, he felt, must be set
down to the errors that arise in the infancy of any science. More
disconcerting was it to see how Henry George fomented class hatreds in New
York and throughout America by aiming lusty blows at the very foundation of
Thomas Mellon's fortune, speculation in land values.

If "aggressive" Socialists unsettled judge Mellon's peace of mind, the
anarchists seemed to him to require immediate and drastic action by the
police. These people were flaunting the Red Flag and calling for the total
abolition of government, private property, religion, everything Thomas Mellon
held dear. They cast their propaganda into simple phrases:

"The anarchists are citizens who . . . believe it their duty to recommend
unlimited liberty." "The anarchists propose to teach the people how to get
along without government, as they already begin to learn how to get along
without God."

"The vicious classes," commented Mellon, after reading this, "seem to be
greatly on the increase at present, or at least show more boldness than ever
before. It indicates a demoralized condition of public sentiment, which may
require blood to purify."

His recommendation was met two years later, when on November 11, 1887, four
Haymarket anarchists swayed from the gibbet.

Nevertheless, he was closer to the anarchists than he would have cared to
admit. If he could not subscribe to the full doctrine that the people should
get along without government, he would restrict it to the irreducible minimum
of protecting property rights. Governmental evils arose from the fiction that
the herd of shiftless and improvident were equal to their masters on election
day. Thus politicians played to the mob; bond issues were voted which took
money out of the pockets of the thrifty and handed it over to grafters,
masquerading as "friends of the people." He was bitter against the public
schools. In the old days when parents paid for their children's tuition,
scholars bad studied harder and gained more. Now although schooling was spread
wider, it was thinner. Worst of all, the schools omitted the teaching of
economic science, thus keeping the masses in ignorance of the fact that they
footed the bill for governmental extravagance, regardless of who paid in the
first instance. Looking to the future with a foreboding eye, he warned: "It
may do till the country becomes more populous and the masses more severely
pinched for a living, when a violent remedy may become necessary."

He was not satisfied to wag jeremiads from the sidelines, but tried actively
to curb the spending proclivities of the rising MageeFlinn political gang in
Pittsburgh. As a member of the Select Council in the eighties he fought bond
issues and traction franchise grabs. It was unavailing; the "grog shop
politicians" of the downtown wards easily outvoted judge Mellon and other
representatives of the suburbs, whose annexation to the city he had fought in
vain.

To Judge Mellon the voting of a $2,500,000 bond issue for a new courthouse, to
replace one destroyed by fire, was sheer extravagance. That it was the
masterpiece of Architect Richardson made little difference to him. The county,
he warned, was exceeding its constitutional debt limitation. "As to the
remarkable square tower rising 150 feet or more above the roof of the
courthouse, it strikes me and others as like a fine building with a grain
elevator erected upon it." The architect had called for magnificent court
rooms, but Judge Mellon asserted that rooms "about forty feet square would . .
. best serve the purposes of justice. The general public have no necessary
occasion to be there. There is no need," he added, "for lobby space for
loafers and hangers-on." He carried his fight to restrain the county
commissioners up to the state supreme court, which dismissed the case. The
county paid the $2,000 bill for contesting the Mellon appeal.

Strict in his moral code, Thomas Mellon was liberal in his religion. He had
little patience with hard shell dogmatism and brooked no meddling by preachers
in worldly affairs. The insatiable demands of the church for money revolted
his thrifty soul.

"You put me down for $50 for the church debt, but I want it to cover anything
you and Thomas would give besides," he warned James in x881. "I won't give $50
and have you and he give besides. . . . That law and order party who go about
blowing their sanctimonious horn and persecuting poor creatures like Seaman
for selling cigars, and pass by whisky sellers and worse Places, ought to be
made to show their Christianity by shelling out.

Perhaps the laxity of the frontier—whose preachers were few and far between-
helped young Thomas grow up outside the formal doctrines of the church. Indeed
he found a vein of rationalism cropping out among his forefathers, "not,
however, amounting to skepticism in essentials." They were Presbyterians, "not
over zealous or fanatical, but sincere in their duty, and supporting the
church as a proper duty, none of them taking a leading part in the church
affairs however."

Verging on free thinking himself, the banker nevertheless held that the church
was still needed to hold the working class in check. His coolness toward
Christianity was explained by the oddities of a Testament which preached that
rich men would have difficulty entering the Kingdom of Heaven, and which
deified a man who was hardly more than a common beggar, a standing negation of
judge Mellon's moral principles concerning thrift and toil.

The man who lived by rent, interest and profit betook himself to a critical
study of the Testament and its times. He discovered that Jesus belonged to a
sect known as the Essenes, Jewish ascetics who preached community of goods.
Historians of the time, it seemed, played fast and loose in. their quotations;
the church subsequently had pruned out some of their more extravagant
statements, but more remained to be done.

"Sentiments repugnant to the best regulated minds, contrary to common sense
and the nature which God has implanted in his creatures, as well as contrary
to the interests of  society, may fairly be regarded as apocrypha and part of
the old leaven of the Essenians which has crept into some of the manuscript
copies of the Scriptures of the early church."

Fortunately the Puritans had revised the Biblical injunctions against
interest, by which the Mellons were to acquire a good bit of their millions.

Thomas Mellon's moral scheme was bounded by the family motto: Honesty is the
Best Policy. Young attorneys he advised to be honest, "not any more on the
ground of moral duty than self-interest; because in this respect they
coincide."

The philosophic origin of judge Mellon's earnest lectures to his boys was
stated pungently by Tawney: "If virtue is advantageous vice is ruinous. Bad
company, speculation, gambling and Ca preposterous zeal' in religion-it is
these things which are the ruin of tradesmen. Not, indeed, that religion is
to- be neglected. On the contrary, it 'is to be exercised in the frequent use
of holy ejaculations.' What is deprecated is merely the unbusiness-like habit
of 'neglecting a man's necessary affairs upon pretense of religious worship.'"

Religion was the handmaid of honest business, not its dictator. Such was the
burden of a 105-page pamphlet written by judge Mellon on "The Sunday Question;
with documentary evidence of the origin, history and uses of the Sabbath, and
its abuses by the rigidly righteous."

A "worthy Presbyterian minister" had arisen to denounce the Mellons for
running a Sunday train on their Ligonier Valley Railroad to accommodate
"sojourners and camp meeting people." It was a "wicked desecration of the
Sabbath and against the laws of both God and man," held the divine.

Good lawyer that be was, judge Mellon drew up a brief. The disputed fourth
commandment, he pointed out, commands rest, whereas the Presbyterian minister
was exhorting the people to spend it "in exercises and works." But exercise
was the opposite of rest! He found no authority in the New Testament for
observance of the Jewish Sabbath. The hypocrisy of the Sabbath law, which
permitted a gentleman to be driven to church by his private coachman, and yet
forbade the humble man to take a street car or train, be held would lead to a
general breaking of all laws. Christianity, he concluded, was no part of the
common law of Pennsylvania or the United States.

Thomas Mellon's declining years were tragic. Once his life's work was done,
death refused to claim him. "A long life," he remarked twenty-three years
before he died, "is like an ear of corn with the grains shriveled at both
ends. The few years of an old man's life are of as. little account to him or
others as the few years of childhood at its beginning. . . . My life on the
whole has been a pleasant one, but my capacity for usefulness as well as for
physical enjoyment is declined, and already I begin to feel desolate."

The early years of his decline were tempered with the satisfaction of seeing
his sons prospering in "well doing." "It is a joy to me," he wrote them in
1881, "to see that you all are able to manage so well and that our numerous
affairs do not suffer from my absence; in any event  they will have to be
managed without me before long . . . ..

While in Carolina with his tubercular son George, he declared that "time hangs
heavy on one's hands when we cease to need it, but after spending as long a
life time as I have done in its profitable use, then ceasing to make any
valuable use of it all is too radical a change to be agreeable. Recent
experience teaches me that neither Pleasure nor profit results from idleness."

By 1895 he felt the hand of Death on his shoulder. He directed that he be
buried between "my loving mother and my dear wife" with a "rough granite block
for a gravestone." "I might perhaps depend on being able to communicate them
[directions] to you verbally immediately before leaving, but I have always
thought that the stupor and confusion of the last moments afforded a very poor
opportunity of that kind, and I may say, because I feel it will comfort and
give you satisfaction to know, I have not the slightest fear or concern about
the time or manner of my going."

The aged man reflected on the nature of charity. "My heart and hand," he said,
"was always open to relieve the actual dis

tress of worthy objects of private charity. I have given in this way what
might have been given to public charity with more praise and display, but
private charity was always what attracted my feelings most."

Death was unkind. It took George, and his firstborn, Thomas Alexander, but
refused to beckon to the idle old man. His memory faded. The sharp, flashing
eyes of the jurist dulled, the body slumped.

The gala birthday party planned in honor of Judge Mellon's 95th birthday on
February 3, 1908, brought together his descendants in the old mansion on
Negley Avenue. On that day tardy Death summoned him. Nearly a year later Sarah
Jane Negley followed her husband to the grave.

pps. xi-43
--[cont]--
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris

DECLARATION & DISCLAIMER
==========
CTRL is a discussion and informational exchange list. Proselyzting propagandic
screeds are not allowed. Substance—not soapboxing!  These are sordid matters
and 'conspiracy theory', with its many half-truths, misdirections and outright
frauds is used politically  by different groups with major and minor effects
spread throughout the spectrum of time and thought. That being said, CTRL
gives no endorsement to the validity of posts, and always suggests to readers;
be wary of what you read. CTRL gives no credeence to Holocaust denial and
nazi's need not apply.

Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://home.ease.lsoft.com/archives/CTRL.html

http:[EMAIL PROTECTED]/
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]

To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]

Om