The President and the Oligarch: Greg Steinmetz on FDR’s Vendetta Against Andrew Mellon

The retired money manager Greg Steinmetz has now written three books about very rich men. The first, The Richest Man Who Ever Lived, was about the sixteenth-century Augsburg banker Jacob Fugger. The second, American Rascal, was about the nineteenth-century robber baron Jay Gould. The third, The President and the Oligarch, came out this week, and this time the rich man has a president as a co-star. It’s a book about the relationship between Franklin D. Roosevelt and Andrew W. Mellon.

Mellon was the third richest American of his age, behind Rockefeller and Ford. He was, above all, a banker, installed as president of his father’s small-town Pennsylvania bank while still in his twenties, and building it into one of the largest banks in the country. Warren Harding, reasoning that anyone that rich must know something about money, made him Treasury Secretary. He served Coolidge and Hoover too, eleven years in all, the second longest tenure in the department’s history.

And then, in 1934, Franklin Roosevelt came for him. Steinmetz’s revisionist argument is that FDR’s pursuit of Mellon was pure politics. Mellon, who by then was in his late seventies and out of office, had done nothing to him. His supposed crime was taking a tax write-off on art he had donated to a foundation, the sort of thing, Steinmetz claims, (rich) people do every day. Roosevelt’s own attorney general told him there was no case and a grand jury threw it out. Roosevelt pursued him in tax court anyway, until an unloved Mellon died with the matter unresolved.

Steinmetz suggests this is where the modern American fashion of deploying the tax code against political enemies begins. The irony is that Mellon’s paintings that triggered the persecution morphed into the National Gallery of Art — for which Roosevelt took the credit. Poor persecuted Andrew W. Mellon. Or, more accurately, rich persecuted Mellon. Unlike Steinmetz, I find it hard to feel sorry for such a miserable old sod who didn’t even have any fun with his wealth. Maybe Steinmetz’s next book should be about persecuted poor people. He’d find no shortage of subjects.

FURTHER READING

• Greg Steinmetz, The President and the Oligarch: Roosevelt, Mellon, and the Triumph of Big Government (Simon & Schuster, 2026)

• Greg Steinmetz, The Richest Man Who Ever Lived: The Life and Times of Jacob Fugger (Simon & Schuster, 2015)

• Greg Steinmetz, American Rascal: How Jay Gould Built Wall Street’s Biggest Fortune (Simon & Schuster, 2022)

• William Hitchcock on A Shadow Over the World — the companion revisionist case on FDR and the 1930s: listen to that episode

FIVE TAKEAWAYS

1. The man who had no fun. Mellon was the third wealthiest American of his era, behind only Rockefeller and Henry Ford, and he appears to have enjoyed almost none of it. One contemporary journalist wrote that he looked like an accountant who had just lost his job. His English wife, brought over from horse country outside London, took one look at the smokestacks of Pittsburgh and within three years had taken up with an Englishman. Steinmetz describes a man who was never happier than when he was alone in the bank with a balance sheet, and likens him to Warren Buffett reading financial statements all day — except that Buffett at least plays bridge.

2. The vendetta. In 1934, with a midterm approaching and pressure building from Huey Long, Father Coughlin and Francis Townsend on his left, Roosevelt needed to demonstrate his progressive credentials without adopting their actual programmes. He chose to scapegoat Mellon, blaming him for the persistent unemployment and for the Depression itself. Mellon was by then in his late seventies and years out of office, and the case against him was a tax write-off taken on art donated to a foundation. Steinmetz is blunt about what followed: the attorney general said there was nothing there, a grand jury of ordinary working people threw it out, and Roosevelt pursued him in tax court regardless, until Mellon died with the matter still unresolved.

3. What actually caused the Depression. Steinmetz changed his own mind during the research. The stock market crash was not the cause, he argues, pointing out that the Nasdaq fell seventy per cent in the dot-com bust and produced only a mild recession. What turned a downturn into a decade was European: German reparations, German bank failures, and the indecision of central bankers across the Atlantic, compounded at home by the Federal Reserve’s refusal to put money into the economy — the Friedman and Bernanke diagnosis. On this reading, Mellon’s record at Treasury was in some ways the opposite of ruinous: he ran a surplus every single year, and paid down the debt built up by the First World War by cutting taxes rather than raising them.

4. The National Gallery. The strangest turn in the story is that the donation which triggered the prosecution ended in a gift to the American public. Mellon owned a hundred and twenty-nine masterpieces — Rembrandts, Titians, Raphaels — and he gave them, along with the money to build the building and endow its maintenance, to create the National Gallery of Art. He pointedly did not call it the Mellon Gallery. He and Roosevelt met one to one to discuss the gift while the tax trial was still grinding on, and Roosevelt took the credit for the museum. Steinmetz forecloses the cynical reading: Mellon was already dying of cancer, and the value of what he gave away dwarfed anything the tax case could ever have cost him.

5. The pendulum. The research also altered Steinmetz’s politics, and in an unexpectedly hopeful direction. He is unmoved by the argument that American democracy is finished. American history, he says, is a pendulum: Harding won sixty per cent of the vote in 1920, the biggest landslide since Washington, because voters wanted tax cuts and an end to inflation; by 1932 those same voters demanded relief and got it. He expects the same correction now, with the Democrats reversing much of what Trump has done. For all that his book is a grim story about persecution, he takes from it the conclusion that democracy tends to solve its own problems.

ABOUT THE GUEST

Greg Steinmetz was born in Cleveland, took his BA at Colgate and a master’s at Northwestern’s Medill School of Journalism, and spent fifteen years as a reporter, including as Berlin and London bureau chief for the Wall Street Journal. He later became a securities analyst and a partner at a New York money-management firm, from which he is now retired. He is the author of The Richest Man Who Ever Lived, a biography of Jacob Fugger, and American Rascal, on Jay Gould. The President and the Oligarch: Roosevelt, Mellon, and the Triumph of Big Government is published by Simon & Schuster. He lives just north of New York City.

ABOUT KEEN ON AMERICA