Westinghouse’s railway air brake and Frick’s steelmaking ovens. Financial innovation by systematically
“thinking outside the box” led to the Mellon’s equity
stakes in Alcoa, Union Steel (bought by Carnegie for
the then-staggering profit of $41 million), Gulf Oil,
Westinghouse, Koppers and The Carborundum, to
name a few. By 1900, Mellon Bank was the largest
bank west of New York City.
In 1869, when Thomas Mellon opened T. Mellon & Sons’ Bank, Pittsburgh was as far removed from the central banks of New York, London and Frankfurt
as Seattle or Los Angeles. However, during the burst
of industrialization between the 1860s and 1920s that
transformed America into the world’s leading economic
power, Pittsburgh led the way. In the beginning, Mellon
and his sons, Andrew and Richard, loaned money based
on the value of borrowers’ collateral. In the 1800s, bank
lending was based primarily on hard assets.
But T. Mellon & Sons quickly became more than
a collateral-focused lender to burgeoning business in
Western Pennsylvania. The Mellons were the leading,
innovative financial backers in Pittsburgh as it evolved
into the Silicon Valley of its day. It was the home of
Andrew Carnegie, Henry Frick, George Westinghouse
and Henry John Heinz.
The Mellons identified new industries and financed
research that drove industrial and scientific breakthroughs from concept to commercialization, such as
From Mellon & Sons to Alternative Lenders’
Impact on ABL Today
BY HUGH C. LARRAT T-SMITH
In the face of continuing bank regulation, alternative lending companies are launching to fill in the gaps.
ABF Journal contributor Hugh Larratt-Smith examines the types of loans these lenders are providing and
shows how ABL lenders can benefit by teaming up with these new players.
HUGH C. LARRAT T-SMI TH
“We see ourselves almost like investors as opposed to lenders, so we have a strong desire to ensure that
enterprise value is maintained.”
— Darren Latimer, Partner, Stonegate Capital Holdings
Thomas Alexander Mellon
February 3, 1813 — February 3, 1908