By the time Andrew Mellon became Secretary of State many of the corporations that the family had interests in had amassed for the family Billions of dollars. Most of this fortune came from the banking, coal and steal industries. In fact

"In but four corporations and four banks, the majority of

Although there was some initial opposition to the plan, Congress passed the Mellon Plan in February of 1926 (Notes from the Editors). The Mellon Plan released billions per year to industry leaders and into Wall Street (Notes from the Editors). Mellon's plan accomplished this by reducing the individual tax rate from 77% in 1921 to 25% in 1928 (Notes from the Editors). In addition, the Mellon Plan allowed for a large cut in the estate tax, which was reduced from 40% to 20% (Notes from the Editors). The article also explains that the gift tax and the excess-profits tax were also abolished. Although Mellon's tax cuts are often blamed for creating the stock market crash that came three years after the Mellon plan and led to the Great Depression, many concede that the stock market crash occurred most as a result of World War I expenses.

Mellon economic policies also changed the way in which American government utilized taxes and generated revenue (History of the Treasury). When Andrew Mellon became secretary of the treasury, the government's budget for the previous year was $6.5 billion (History of the Treasury). In addition, the United States government had many fixed expenses and other debts maturing within the next 2-1/2 years which equaled $7.5 billion (History of the Treasury). By the end of Mellon's third year as secretary, the budget was decreased to $3.5 billion. In addition, most of the fixed expenses that totaled $7.5 billion had been completely paid off or exchanged for maturities that were more advantageous. Additionally, public debt was decreased by $2.8 billion. The US treasury asserts that Mellon further "reduced the public debt (largely inherited from World War I obligations) from almost $26 billion in 1921 to about $16 billion in 1930 (History of the Treasury)." This resulted in "less Government interest charges paid out and, therefore, a saving each year of Government expenses (History of the Treasury)."

Taxation Policy and Government Spending

According to an article Mellon's tax plan involved large cuts in income tax rates for the wealthy. In addition, the plan proposed other tax reductions fro rich Americans. Mellon asserted that the tax cuts were necessary because high income tax rates would impede upon the initiative of wealthy individuals (Notes from the Editors). According to the United States Department of the Treasury, Mellon also believed that tax cuts were necessary for reducing the cost of living (History of the Treasury). In addition, many in the country supported the plan. According to various authors "Long before the details of the Mellon Plan [for tax reduction] were given to Congress the Congress was overwhelmed with letters and telegrams from every section of

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