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American Dynasties

Tycoons have come and gone, but few are the titans that form dynasties. In America, much weighs against the family that seeks to preserve a financial power base for generations.
Jack Bettridge, Bruce Goldman, Terrence Fagan
From the Print Edition:
J.P. Morgan, Mar/Apr 00

(continued from page 3)

At the turn of the century, the Mellons bought the vast Spindletop oils fields of Texas from a broke Yugoslavian prospector and his investors. As Gulf Oil, it made the Mellons billionaires.  

But even as the family piled up riches, it remained relatively anonymous. When Andrew became secretary of the treasury under Warren Harding in 1921, the Mellon name was almost unknown to the general public, despite holdings that touched everyones lives.  

Andrew's policies, not surprisingly, favored a flat tax for the wealthy, perhaps predicting supply-side economics with his statement that "the prosperity of the lower and middle classes depends upon the good fortune and light taxes of the rich." He made great strides to lower the enormous national debt from the First World War, but met headlong with the stock market crash and resulting bank failures, which dimmed his rising political star. Herbert Hoover eventually shunted him off to a post as ambassador to Great Britain.  

While Andrew devoted himself to the nation's finances, his brother, Richard, ran the business. Richard's son, Richard K., took over, devoting himself to cleaning up smog-choked Pittsburgh. Andrew's son, Paul, collected art. As well as leaving an almost inexhaustible storehouse of wealth for their heirs, the Mellons funded charities (Andrew Mellon Foundation) and educational institutions, (Carnegie-Mellon University) that keep the family's name in front of the public despite its ongoing preference for a low profile.--JB    

THE ROCKEFELLERS GIFT FOR GIVING?

Perhaps the most enigmatic of America's big money families is the one that is most familiar. The Rockefeller image is problematic, not for lack of information (family archives are openly available), but for the variety of its interpretation. Hagiographers describe the family as altruism incarnate. The most severe critics place them at the center of a plot to rule the world.  

A persistent myth of the Rockefeller family (encouraged by photos of John D. Sr. handing out dimes on street corners) is that the family's penchant for philanthropy was the invention of PR man Ivy Lee. The story goes that Lee convinced the paterfamilias to ameliorate his Scrooge image through conspicuous giving. This tidy explanation ignores that Rockefeller had quietly given to charity even as a poor clerk. Moreover, he didn't much care for public relations, having told his son, "Do what you think is right and let the world wag."  

He did, however, instill in his descendants a sense of duty that went with the riches he gave them. Even his chief detractor, muckraker Ida Tarbell, said she knew of no father "who had given better guidance to a son." It was John D. Jr., or "Junior," who hired Lee; and if it was a ploy, its fallout was a century of noblesse oblige.  

To Junior fell the bulk of the fortune as well as presidency of the Rockefeller Foundation. While administering its charities, he also made private donations. Of particular interest to him were the National Park System and Colonial Williamsburg. His children, five boys and a girl, were taught the value of the dollar and an awareness of public duty. Only daughter Abby didn't take the bait.  

The family's bent for charity followed a belief that direct monetary gifts wounded character. Much of it is filtered through grants for medical, scientific and social research, education and the arts, or favors pet interests such as U.S.-Asian relations. From this stem the charges that the foundation has been a tax-free tool for the family.  


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