Chapter 92 - Thomas Mellon And His Times
Today’s Chapter is based on the book “Thomas Mellon And His Times” by Thomas Mellon.
Thomas Mellon was a prominent American businessman, judge, and lawyer, best known as the founder of Mellon Bank and the patriarch of the influential Mellon family in Pittsburgh. After establishing a successful legal career, he opened T. Mellon & Sons' Bank in 1870, which grew to become one of the largest banking institutions outside New York by the end of the century.
Here’s what I learned:
Know Yourself
“Knowing yourself is the beginning of all wisdom.”
— Aristotle
Thomas Mellon places significant emphasis on the importance of ancestry and heritage in shaping one’s identity. For him, understanding one’s forefathers is not merely a matter of historical curiosity; it is a crucial step in understanding oneself. He draws a direct line between one’s ancestors and the traits, both positive and negative, that manifest in later generations. This belief is deeply rooted in the notion that we are, to a large extent, products of those who came before us.
Mellon explains that “Science teaches that we are but reproductions of those going before us: each individual but a new edition of a work published long ago, with some slight modifications—additions or subtractions, improving or impairing the original text.” This metaphor of being a “new edition” of an old work explains his belief that personal identity is an evolving narrative, shaped by generations of prior influences. The traits we inherit from our ancestors, in his view, are not neutral; they require conscious cultivation or repression.
“Some of our inherited qualities may be very good, others very bad; some should be cultivated, others repressed: and if we knew just how we came by them, and how they cropped out or were manifested in our predecessors, we might deal with them all the more intelligently.”
— Thomas Mellon
As such, this focus on ancestry is not merely a theoretical exercise for Mellon; it has practical implications. He believes that studying the characteristics of one's lineage can help individuals understand and manage their own strengths and weaknesses more effectively. Mellon once said, “It is important to know the mental, moral and physical qualities of one's ancestry, because the effect by hereditary transmission of ancestral traits is of momentous consequence.”
However, Mellon is not overly sentimental about heritage. He acknowledges that while ancestry plays a significant role in shaping character, it is not the sole determinant of one’s success or failure in life. He explains, “It can make little difference, however, what we were in the past. Different surroundings make wide differences of character in a few generations; and it is not so much what we have been, as what we are now, that counts.” As such, Mellon also acknowledges that different environments can lead to significant changes in character over generations.
This concept reminds me of the idea of power of convergence in evolutionary biology. Charles Darwin was one of the first to recognise the power of convergence when he said, “Animals, belonging to two most distinct lines of descent, may readily become adapted to similar conditions, and thus assume a close external resemblance.” Similarly, in terms of business, while two businesses may not be in the same industry, the same business model may be used in order to succeed.
In his book “What I Have Learned About Investing From Darwin” by Pulak Prasad, he explains that rather than to invest in individual businesses, he prefers to invest in convergent patterns based on the power of convergence in evolutionary biology. As Prasad explains, “As we saw, “replaying the tape of life” often yields the same result. We operate on the principle that the business world is no different.” And I believe Huizenga’s story is a perfect example of this.
“There is a big difference between asserting “I love this business” and “I love this business construct.” We are fans of the latter, not the former. We don’t care about a business; we are deeply attached to a business template.”
— Pulak Prasad
This is also what happened with Wayne Huizenga with Waste Management Inc. and Blockbuster. Perhaps due to his curiosity and entrepreneur spirit, he built himself a pattern system that allowed him to identify great business opportunities and to build success companies beyond his field of expertise. As a matter of fact, when he first started Blockbuster, he knew nothing about videos or entertainment, but he did know about customer services and running a rental company and that was enough for him to be confident in investing $17 million. He was able, by leveraging his previous experience running a garbage renting company, to build Blockbuster into the largest video rental business in the word.
Here’s how an outsider explains Huizenga’s pattern for success:
"He likes to take industries that are fragmented with no clear leader, take market share from moms and pops, in an industry that is growing and has economies of scale in having a large company and he likes service companies with repeat business."
— Randall E. Haase
Virtue of Hard Work
“Continuous effort—not strength or intelligence—is the key to unlocking our potential.”
— Winston Churchill
Mellon’s life story is a testament to the virtues of hard work and perseverance. His own experiences illustrate how these virtues shaped his journey from a poor farmer’s son to a successful lawyer, judge, and businessman.
From an early age, Mellon was no stranger to labor. He mentions in the book about the demanding work ethic that was instilled in him during his childhood on the family farm, where “their labor was incessant: farm work during the day, and spinning and weaving at night.” Mellon himself was actively involved in these tasks. This early exposure to hard work, combined with the financial hardships his family endured, fostered in him a sense of determination and resilience that would serve him well in later years.
Furthermore, Mellon truly believed that success often comes from overcoming obstacles. As Mellon once said, “The greater the obstacle the stronger my desire grew to overcome it; and my power to succeed seemed to rise with the occasion for it. Energy, persistence and the contrivance of ways and means inspired by a strong will would always overcome the difficulty.” For Mellon, obstacles were not deterrents but opportunities to test and strengthen his resolve. This mindset, he argues, is key to achieving success in any endeavor.
As such, Mellon stresses the importance of self-reliance in order to face adversity. He observes, “It is only the man who has passed through tribulation, and has had his energies aroused and his faculties strengthened by the necessity for great exertion, that accomplishes much in the battle of life.” For Mellon, success is not handed to anyone; it must be earned through diligent effort and the willingness to confront and overcome challenges.
One of the most formative moments in Mellon’s life was his discovery of Benjamin Franklin’s autobiography, which had a profound impact on his worldview. Franklin’s story inspired Mellon to aspire to something greater than the life of a farmer, and it reinforced his belief in the power of hard work and perseverance to overcome seemingly insurmountable odds.
“The reading of Franklin's life led me to question this view [that farming was the only viable path]. For so poor and friendless a boy to be able to become a merchant or a professional man had before seemed an impossibility; but here was Franklin, poorer than myself, who by industry, thrift and frugality had become learned and wise, and elevated to wealth and fame.”
— Thomas Mellon
To conclude, in Mellon's view, success is not a matter of luck or innate talent but the result of consistent effort and determination. He writes, “Industry and thrift, with reasonable judgment to guide, will always prosper.” This simple yet powerful statement encapsulates his philosophy of hard work: that those who are willing to put in the effort and exercise sound judgment will ultimately succeed.
Mellon is not the only one to have been greatly influenced by Benjamin Franklin. In fact, we have previously learned how Andre Oscar Wallenberg happened to discover the story of Benjamin Franklin when he was visiting America. Franklin quickly became a big influence in the way Wallenberg would live his life. As a matter of fact, Wallenberg called Franklin, “My Divine Franklin”, as he became his guiding star. Franklin’s principles of emphasizing the values of hard work, frugality and civic responsibility resonated deeply with Wallenberg.
Notably, Wallenberg, influenced by Franklin, believed that society could gain its autonomy through hard work and frugality. In fact, Wallenberg once said, "By what means can people ensure their autonomy? Through work and savings. Apart from the land itself on which we live, apart from the rich gifts of nature that has lavished on humanity, all capital is nothing other than realized work.”
As we have learned previously, Benjamin Franklin was well-known for establishing thirteen virtues that are absolutely necessary to lead a good life and which were definitely influential in both Andre Oscar Wallenberg and Thomas Mellon’s life philosophy. Here are the thirteen virtues:
Temperance: Eat not to dullness; drink not to elevation.
Silence: Speak not but what may benefit others or yourself; avoid trifling conversation.
Order: Let all your things have their places; let each part of your business have its time.
Resolution: Resolve to perform what you ought; perform without fail what you resolve.
Frugality: Make no expense but to do good to others or yourself; i.e., waste nothing.
Industry: Lose no time; be always employed in something useful; cut off all unnecessary actions.
Sincerity: Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.
Justice: Wrong none by doing injuries, or omitting the benefits that are your duty.
Moderation: Avoid extremes; forbear resenting injuries so much as you think they deserve.
Cleanliness: Tolerate no uncleanliness in body, clothes, or habitation.
Tranquillity: Be not disturbed at trifles, or at accidents common or unavoidable.
Chastity: Rarely use venery but for health or offspring, never to dullness, weakness, or the injury of your own or another's peace or reputation.
Humility: Imitate Jesus and Socrates.
Power of Education
“Don't let schooling interfere with your education.”
— Mark Twain
For Thomas Mellon, education is a lifelong pursuit and one of the most important factors in personal development. In his book, he shares how important the value of learning, both formal and informal is in playing a role in shaping one’s character and success. In fact, Mellon’s approach to education was pragmatic: he believed that knowledge should be relevant to one’s goals and that learning should be a continuous process that extends beyond the classroom.
In Mellon’s case, he was forced to find a right balance between formal schooling and self-directed learning due to the fact that he was required to complete farm work during his formal studies. He mentioned that “During all my preparatory course I was off and at work on the farm over half the time, as is seen, but made up for it by private study; and in this way I was enabled to keep up with my class.”
However, Mellon placed greater value on the broader knowledge gained through reading and self-improvement instead of through formal education. As a matter of fact, despite his respect for formal education, Mellon was critical of certain aspects of traditional schooling, particularly the emphasis on rote memorization and the focus on subjects that lacked practical application. He once said, “The rapidity with which school-acquired knowledge, or indeed any other kind of knowledge fades from the mind unless frequently refreshed or recalled for practical purposes, is a factor in education not sufficiently regarded.”
Luckily for Mellon, through the impact of his uncle’s influence, he had a passion in reading. Mellon said, “I was making a broader and a better progress in another direction: this was in the variety of knowledge gained by employing all the spare time I had, at all seasons, in reading the various and curious miscellaneous literature furnished me from time to time by my kind uncle.” This led to Mellon’s passion of learning through reading.
“My source of pleasure was reading, which I resorted to at every spare moment.”
— Thomas Mellon
Furthermore, Mellon argues that "Success in life depends greatly on the occupation we permanently adopt at the outset; and that again depends so much on whether we are suited for the occupation selected…" And as such, the goal of education should not be to accumulate knowledge for its own sake but to develop the skills and judgment necessary for success in that particular occupation. As he explains, “Educational advantages depend on their relevancy to the future occupation, and the aptitude of the individual for the occupation intended. Life is too short for proficiency in all branches.”
Thomas Mellon’s criticism about formal education reminds me of what we have learned from Henry Ford. Similarly to Mellon, Ford once said that “An educated man is not one whose memory is trained to carry a few dates in history—he is one who can accomplish things. A man who cannot think is not an educated man however many college degrees he may have acquired.”
As a matter of fact, Ford believed that one’s education starts after graduation and that the main goal of education “is to teach him how to use his mind in thinking.” As such, when Henry Ford was running the Ford Motor Company, Ford never hired any experts or men with past experiences. His reasoning was that “A man who knows a job sees so much more to be done than he has done, that he is always pressing forward and never gives up an instant of thought to how good and how efficient he is. Thinking always ahead, thinking always of trying to do more, brings a state of mind in which nothing is impossible. The moment one gets into the "expert" state of mind a great number of things become impossible.”
“But the best that education can do for a man is to put him in possession of his powers, give him control of the tools with which destiny has endowed him, and teach him how to think.”
— Henry Ford
To conclude, Mellon’s story is a great reminder on the importance of self-learning in order to have success in life. As Charlie Munger once said, “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.”
Beyond the Book
Read "Turning Adversity Into Advantage" by Farnam Street
Read "Ben Franklin and the Virtues and Ills of Pursuing Luxury" by Farnam Street
Read "Ben Franklin: The Thirteen Necessary Virtues" by Farnam Street
Read "Henry Ford and the Actual Value of Education" by Farnam Street
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