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Midas Mulligan and Andrew Mellon

Did Ayn Rand base her character Midas Mulligan on Andrew Mellon?

I recently came up with this question reading The Forgotten Man: A New History of the Great Depression by Amity Shlaes and, from Shlaes's description, it sure seemed plausible. Ayn Rand lived through the Great Depression and Mellon's name was everywhere in the culture up to and after that time.

We know Rand often based her fictional characters on elements of real-life people. This was part of her literary technique. A famous example from her youth is killer William Edward Hickman. She observed Hickman in his murder trial and used elements of him (and the public's reaction to him) for her hero Danny Renahan in her unfinished work "The Little Street." You can read her notes of this process in The Journals of Ayn Rand.

Her play Night of January 16th used the scandal of Ivar Kreuger for her main character Bjorn Faulkner (who never appears on stage). In The Fountainhead, Ellsworth Toohey was based on elements of Harold Laski (and others). In Atlas Shrugged, Robert Stadler's counterpart was J. Robert Oppenheimer and Nat Taggart was practically a rewrite of James Jerome Hill

This sleuthing could get fun one day. But although Rand used real people as templates, she never wrote in the spirit of Roman à clef. The purpose of her fiction works was always artistic, not disguised celebrity gossip.

So let's look and see if Mellon and Mulligan fit.

First, Amity Shlaes's the passage on Andrew Mellon from The Forgotten Man (Chapter 1 - "The Beneficent Hand"):


In the 1920s two other big figures loomed large. The first was the treasury secretary, Andrew Mellon of Pittsburgh. Mellon’s father, whose family had come from county Tyrone in Ireland, had been a faithful reader of Benjamin Franklin: “The way to wealth, if you desire it, is as plain as the way to market. It depends chiefly on two words, industry and frugality. That is, waste neither time nor money, but make the best use of both.” Thomas Mellon, a merchant banker, believed in investing in commodities, but also, like Insull, in investing in ideas. Among the new bank’s first visitors—while Andrew was still a student—had been a twenty-one-year-old bookkeeper with a scheme to build fifty coke ovens. He thought he could serve the growing steel industry, but he needed $10,000. An agent whom Mellon sent to evaluate Frick wrote: “Lands good, ovens well built, manager on job all day, keeps books evenings, may be a little too enthusiastic about pictures but not enough to hurt.” Judge Mellon struck a deal with him.

That man, Henry Clay Frick, remained affiliated with the Mellons from that point on. He and Andrew, good friends, traveled to Europe together; on such a trip Andrew started to build an art collection, buying his first picture.

But what was more important at the time was that Andrew also built a great business empire. He and his brother Richard created first a national bank, then a steel concern, and then an empire. Young Mellon cornered the bauxite market. He shared in the profits of Carnegie Steel, of which Frick was president. The Mellons together established the enormous Aluminum Company of America; later they picked up Bethlehem Steel. They invested in Spindletop, the Texas gusher that opened the Gulf Coast oil industry. By the time Hoover reached adulthood, the Mellons also were players in the steel, railway, construction, and insurance industries. Succeeding Andrew Carnegie and Henry Clay Frick, Andrew Mellon ruled Pittsburgh in a way that not even the president ruled Washington.

Mellon had stayed close to his father’s original formula: thrift that emphasized the accumulation of capital. But he had also created value—and not merely by cornering a market as a robber baron would, though he had done this with bauxite. Mellon invested in new innovations, functioning as an early version of the modern venture capitalist. The magazine World’s Work described the Mellon formula thus: “Find a man who can run a business and needs capital to start or expand. Furnish the capital and take shares in the business, leaving the other man to run it except when he is in trouble. When the business has growth sufficiently to pay back the money, take the money and find another man running a business and in need of money and give it to him, on the same basis.”

In the late 1880s an inventor named Charles M. Hall had showed up in Mellon’s offices. Hall had developed a new way to smelt aluminum, but he lacked capital to sell his product. Mellon, for his part, agreed to lend $250,000 in return for a controlling share of a new firm, the Pittsburgh Reduction Company. Pittsburgh Reduction, iterations later, became the Aluminum Company of America.

Hoover himself, impressed, later recounted an anecdote an official from the same company would tell him about working with Mellon. The Mellon Bank had refused to lend to an inventor. But Mellon told the man, “I sometimes personally loan money on the security of character.” Mellon gave the man $10,000 and then invested yet more, and then yet more when the pilot showed prospects. For his cash efforts, Mellon eventually agreed to a fifty-fifty ownership. The inventor wondered aloud why Mellon was settling only for half. Now that his project had value, Hall reminded Mellon, Mellon might foreclose and own all. But the answer came back: “The Mellons never did business that way.”

To Mellon the formula was obvious—invest in the private sector, do not intervene too much, wait silently, and the returns would be all the greater. Eventually, he was so successful at producing innovations that he created the Mellon Institute in Pittsburgh to make the resources of his empire available to other, less innovative companies. The institute came under the general Mellon rubric “self-improvement,” though whether that “self ” was Mellon or his business or the U.S. economy generally even he left unclear. In the same spirit, Mellon also undertook to improve his knowledge of the French language at around the same point. It was an early version of the modern science think tank. Companies brought their cash to the Mellon Institute; this funded scientists who could solve their problems through efficient applied research. Hundreds of books and papers, as well as more than 600 patents, resulted. By the time he entered public life, Mellon would serve on the board of more than 150 corporations, presiding over hundreds of millions.

Ayn Rand described Midas Mulligan early in Atlas Shrugged.


Midas Mulligan had once been the richest and, consequently, the most denounced man in the country. He had never taken a loss on any investment he made; everything he touched turned into gold. “It’s because I know what to touch,” he said. Nobody could grasp the pattern of his investments: he rejected deals that were considered flawlessly safe, and he put enormous amounts into ventures that no other banker would handle. Through the years, he had been the trigger that had sent unexpected, spectacular bullets of industrial success shooting over the country. It was he who had invested in Rearden Steel at its start, thus helping Rearden to complete the purchase of the abandoned steel mills in Pennsylvania. When an economist referred to him once as an audacious gambler, Mulligan said, “The reason why you’ll never get rich is because you think that what I do is gambling.”

It was rumored that one had to observe a certain unwritten rule when dealing with Midas Mulligan: if an applicant for a loan ever mentioned his personal need or any personal feeling whatever, the interview ended and he was never given another chance to speak to Mr. Mulligan.

“Why yes, I can,” said Midas Mulligan, when he was asked whether he could name a person more evil than the man with a heart closed to pity. “The man who uses another’s pity for him as a weapon.”

In his long career, he had ignored all the public attacks on him, except one. His first name had been Michael; when a newspaper columnist of the humanitarian clique nicknamed him Midas Mulligan and the tag stuck to him as an insult, Mulligan appeared in court and petitioned for a legal change of his first name to “Midas.” The petition was granted.

In the eyes of his contemporaries, he was a man who had committed the one unforgivable sin: he was proud of his wealth.

Do I need to say it? I don't want to, but I guess I better. And this is only for the nitpickers in O-Land. Obviously Rand did not use Shlaes's work for her inspiration. The reason? The Forgotten Man was published in 2007 and Ms. Rand was a bit deceased at that time.

However, there is no doubt Shlaes description represents the reality of Andrew Mellon and the general public perception of him when he was alive. Ayn Rand would have been well aware of that public perception. What's more, it makes a perfect template for Midas Mulligan. All Rand really needed to do was select the parts that interested her, pour her themes on top and let her imagination do the rest.


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