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The Case of Andrew Mellon

The Senate Committee, headed by Senator Walsh, is opening up a serious, if not a dangerous, breach in the defences of the administration. A corporation in which the Mellon family is largely interested is accused with some show of reason of conducting its business in defiance of the anti-trust law. A former Attorney-General of the United States, appointed by President Coolidge, believed it to be his duty to prosecute the corporation. But a majority of the Federal Trade Commission, also appointed by Mr. Coolidge, refused to permit the Department of Justice to examine the evidence now in its possession. Attorney-General Stone, who allowed the weak spot to obtain disagreeable publicity, was removed to a higher sphere of public activity. In the meantime the Department of Justice has, to say the least, not acted with very much vigor either in pushing the suit or seeking to obtain the information possessed by the Trade Commission. Mr. Coolidge strained his powers in the attempt to appoint as successor to Mr. Stone a lawyer who was associated intimately with the management of a similarly tainted corporation and who would presumably have treated violation of the anti-trust law with toleration. The present Attorney-General professes an utter ignorance of the affair and a lofty indifference to it.

Thus it looks as if many different federal officials, all appointed by Mr. Coolidge, had entered into a conspiracy to avoid the prosecution for an alleged violation of the law of a corporation in which his Secretary of the Treasury was heavily interested. Mr. Mellon, it is true, resigned as director of the Aluminum Company of America when he accepted President Harding's invitation to manage the Treasury Department, but he does not pretend to have disposed of his interest in the company. He and his brother have always controlled the policy of the company and still control it. Some of the acts on which the prosecution would be based were presumably committed during the years when he was a director. Since he has occupied the office of Secretary of the Treasury, the Aluminum Company of America has benefited in two and perhaps three respects from the action of the government. It has obtained additional tariff protection which enabled it to raise the prices of its product. It has enjoyed an amount of consideration from the investigating and prosecuting officials of the government, which, without a friend at court, it would presumably not have enjoyed. And it has received, so it is alleged, very tender treatment from the Bureau of Internal Revenue. This, it must be admitted, is a drastic indictment which, if no satisfactory answer is forthcoming, seems sufficient to justify a demand for Mr. Mellon's resignation. 

As yet the indictment is not proved. There are gaps in the evidence, and the Federal Trade Commission may have had an honest, if not a sound, reason for refusing to divulge information which, erroneously or not, was obtained under a promise' of secrecy. It is highly desirable for Congress to investigate the truth of these charges, but it would be a mistake to treat the business as if it merely involved possibly culpable breaches of trust by public officials. Mr. Mellon is a sensitive, proud, shy, reticent and fastidious man, who is incapable of deliberately using his powers as Secretary of the Treasury to put money in his pocket which would not otherwise have accrued. His disqualification for the office of Secretary of the Treasury is not in our opinion the result of any proved inability on his part to administer that office efficiently and honestly. His efficiency has been exaggerated by his admirers, but in this connection there is no need to challenge it. His integrity from his own point of view we do not for a moment doubt. But we believe, nevertheless, not only that he should resign but that he should never have been appointed. The grounds for the present assault upon him provide a beautiful demonstration of the reason for his initial unavailability.

The reason is simple and obvious. Mr. Mellon is too preposterously rich to occupy with public credit the position of Secretary of the Treasury. He is worth, let us say, $100,000,000 or over. A fortune of that size raises its owner out of the class of private citizens and stamps him willy-nilly as a human public utility. The concentration of so much money in the hands of one man almost always involves the exploitation' of certain opportunities 'which many of Mr. Mellon's fellow-citizens take to be unjustifiable privileges. The Aluminum Company of America, for instance, has benefited both from the tariff and from monopolistic control of its business to an extent which presumably implies connivance' or favoritism on the part of the government. The extension of these privileges may be economically defensible, but no matter whether it is or is not, a beneficiary of them should certainly not occupy a public office whose incumbent as a part of his regular duties exercises a huge influence on the legislative and administrative policy of the government with respect to such matters. If he does occupy such an office, he is certain sooner or later to be accused of privately benefiting from his public position; and no matter how scrupulously he may try to avoid any action which is doubtful, his vulnerable economic eminence exposes him to not unreasonable suspicions.

It is one significant aspect of Mr. Mellon’s case that he was appointed to his present job not in spite of his great wealth but because of it. President Harding, so the story ran at the time, deliberately selected as his Secretary of the Treasury one of the wealthiest men in the United States for the reason that the owner of $100,000,000 would never be suspected of personal graft. If this story is true, It merely proves the simplicity of the late Mr. Harding's mind. He was incapable of distinguishing between dishonesty and disinterestedness. No doubt the owner of $100,000,000 has no sufficient motive for any obvious or vulgar betrayal of public confidence, but a crook is not the only undesirable type of public official. No less undesirable are men who for some overpowering reason are not free to consider essential public questions on their merits. A man with a fortune of $100,000,000 is in that situation. He is the economic analogue in an industrial democracy of a duke who is bound to believe that the preservation and the vigorous exercise of his own privileges are necessary to the welfare of the state. He does not own his fortune. His fortune owns him. It colors his sympathies, instigates his antipathies, imprisons his thinking and dominates his imagination. He uses his influence as a public official to aggrandize not so much his personal fortune as the number of similar fortunes and their power. Whenever in the exercise of the discretionary power vested in the Secretary of the Treasury he has to pass upon questions which involve the interests of wealthy men and big business, all his associations, and convictions urge him to handle his millionaire colleagues with tenderness.

The New Republic doubts the social desirability of large fortunes, but even people who differ from this opinion would be wise to frown on the appointment or the election of a man like Mr. Mellon to a position of high political and administrative responsibility and in particular to the office of Secretary of the Treasury. Whenever public business is entrusted to a man with conspicuous and enormous private interests, the discussion of most questions of public policy, which his work involves, is 'confused by irrepressible and distracting personal considerations. His handicaps In dealing with certain economic or social questions on their merits is communicated to his opponents, who condemn all his proposals and decisions as the children of interest or prejudice. The millionaire official is sensitive because he is vulnerable and replies in kind. The discussion soon degenerates into a carnival of personal recrimination, both parties to which neglect the merits of the question of public policy in the effort to convict their opponents of bad faith and selfishness. This kind of controversy has long been the curse of American politics. It cheapens progressivism by provoking progressive politicians to act as detectives who are much keener to expose scandals than to bring a cool, disinterested and well informed intelligence to bear on public business. But it is the inevitable result of bestowing important public offices on men possessed of overpowering private interests which occupy an ambiguous relation to public policy. If the American plutocracy is wise it will select its statesmen from men like Mr. Coolidge who believe in great wealth but do not possess it, rather than from rich men like Mr. Mellon who cannot administer an office in favor of a plutocratic public policy without promoting or seeming to promote their own personal advantage. 

This article originally ran in the January 20, 1926, issue of the magazine.