Midas Mulligan

Michael "Midas" Mulligan, in Ayn Rand's novel Atlas Shrugged, was a banker, operating originally in Chicago, Illinois but subsequently in the community known variously as Mulligan's Valley and Galt's Gulch. He joined the strike of the men of the mind called by John Galt after he lost a loan-discrimination lawsuit brought by a loan applicant whose application he had denied.

Background

Remarkably, the novel provides ample background to Michael Mulligan in comparison to other characters. A banker by trade, Michael Mulligan actually had his name changed legally to "Midas" after his critics tagged him with that reference to the (perhaps) mythical King Midas. He developed a reputation for profiting after taking tremendous business risks, and some suggested that he was gambling. He replied thus:

“

The reason why you will never become rich is that you actually think that what I am doing is gambling.

”

Midas Mulligan did not gamble. He assessed risk, and did so using methods that were both more sensitive and more specific than those that his competitors used.

But the actual reason why his reputation suffered was not his "high-risk" methods, but rather the risks that he did not take. Specifically, he regarded banking as a business, and ran his bank like one. His critics seemed to prefer that he run his bank as a charity, or at least to make certain loans pro bono, just as and for the same reason that lawyers often argue cases pro bono.

Midas rejected such a policy as irresponsible. A banker does not own all of the money at his disposal at any given time; he owes an obligation to his depositors, as well as to any stockholders and partners he might have. A banker borrows short (by accepting money on deposit, money that a depositor may in theory withdraw on demand) and lends long (by making loans that are not always subject to instant recall and typically are made for a specified term). Such activity entails inherent risk, and this is why bankers typically require more interest (literally, a rent for money) than they pay to their depositors. Sadly, in the novel as is so often the case in real life, Midas Mulligan's critics never understood these realities, and continued to portray him as a mean-spirited, heartless money miser.

Hunsacker v. Mulligan

Lee Hunsacker, who had had a very poor record as a businessman, sought a start-up loan to finance his purchase and planned re-activation of the factory of the defunct Twentieth Century Motor Company in Starnesville, in the neighboring State of Wisconsin. The Twentieth Century was a poor prospect to begin with. Though its founder, Gerald "Jed" Starnes, had built the company into a very successful firm, he had then died, and his heirs who took it over, ran it into the ground within four years. Midas Mulligan might not have known the full particulars of that company's history, but he would certainly know enough from his own investigation, as would be an elementary requirement of "due diligence."

The prior record of the company itself was less disquieting to Midas than was the business record of the man who now was trying to take the factory over and run it. Lee Hunsacker had previously tried to run a company that made paper containers, but his customers had deserted him—and instead of examining his product to see how he might improve it to meet customer demand and expectation, he blamed the customers for "lack of cooperation."

Midas refused the loan. In his refusal, Mulligan told Hunsacker that his business record made him an extremely bad prospect for running a vegetable pushcart, much less a large factory that employed six thousand people. The men who were in partnership with Hunsacker did not impress Midas Mulligan much better.

Hunsacker, furious at the refusal, filed suit against Mulligan. He made a claim that the narrative describes as "discrimination." As nearly as a close read of the text reveals, Hunsacker alleged that he met the same qualifications for a business loan, including the required security, as did any other businessman, and Mulligan had no grounds to refuse.

Judge Narragansett, the trial judge in the case, made a jury charge that was perhaps a direct call for jury nullification. He dwelt heavily on the poor prospects of Lee Hunsacker and his partners, and stressed certain elementary principles of freedom of association that he considered more important than any non-discrimination statute.

The jury found for Midas, but Hunsacker appealed. The most likely outcome that one may infer is that the appellate court remanded the case for judgment, but not to Judge Narragansett's court, on the grounds that Narragansett's jury charge was improper. The case was retried before this second (never-named) judge, and that jury found for Hunsacker and his partners.

The strike

Midas was outraged, as one might expect. Perhaps he was already thinking that if he could not run his bank as he saw fit, and take only the risks that he saw fit to take, then he might as well not be in banking at all. While he was pondering these questions, a young man came to see him. He introduced himself as John Galt and probably mentioned that he had a connection with Twentieth Century Motors that went back to Jed Starnes. He had invented and built a prototype for an electrostatic motor for automobiles. Within days, Jed Starnes was dead, and his three children had announced their intention to require everyone at the plant to work according to his ability and pay him according to his need.

John Galt had refused, and furthermore, had announced his intention to "stop the motor of the world." Galt then explained to Midas how he intended to do this: that it was now time for the creative minds of the country to go on strike, and in essence withdraw their talents from a world that did not appreciate them.

Midas reported later that John Galt convinced him to go on strike within fifteen minutes. Very likely Midas did not need convincing. Certainly what John Galt told him, made sense. Furthermore, Galt demonstrated that he was a philosopher, as well as an engineer, and spoke to Midas in terms of basic rights of existence. These were concepts that Midas knew instinctively, but no one before Galt had explained these things to him so clearly.

The bank run

Midas knew better than merely to walk away from his offices at the Mulligan Bank. He started calling all his depositors and encouraging them to withdraw their funds. This allowed him to call in the loans that the bank had outstanding. So well did he orchestrate what was actually a "controlled bank run" that not a single depositor lost money. When bank examiners audited the books later, they found that those books balanced exactly—to the last penny. The Mulligan Bank was wiped out, but its depositors were safe.

Mulligan's Valley

Main Article: Galt's Gulch

Mulligan came out of this "controlled bank run" with a considerable amount of funds, all of which he converted either to gold, to raw land, or to various foodstuffs, seed grains, and livestock. The land was in a secluded valley in the Rocky Mountains (probably in Colorado). As Midas told the story later to Dagny Taggart, he bought the land, built a house on it, and stocked it with provisions sufficient to last one man a lifetime. This was in accord with John Galt's original strike plan: that those who could, would retire to live off their savings; the rest would take the lowest jobs that they could find, barely enough to afford them housing and food.

Midas did not remain isolated for very long. Judge Narragansett asked him for a lease so that he could build a house of his own in the valley. Midas was glad of Judge Narragansett's company, and agreed. The two then invited Richard Halley, the music composer, to come as well. At first, these men lived off the land; Mulligan raised wheat and tobacco, the judge raised chickens and managed a herd of dairy cows, and Halley grew fruit trees. Whatever the men could not produce for themselves, Midas would acquire through a secret channel that the novel never explains.

Eventually, John Galt made a radical proposal: to build a powerplant based on his electrostatic motor, to provide the valley with electric power. Midas granted John Galt enough leases for the powerplant and a house that Galt himself might build. Galt did as he promised: he built an electrostatic powerplant, which he housed in a building secured with sound locks. Above the front door of the plant, Galt carved the following oath:

“

I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine.

”

The sound locks would open to the sound of any voice reciting that oath—but anyone desiring entry would have to recite it slowly and with the inflections that alone would indicate sincerity—in other words, that the speaker meant it.

The novel does not state specifically when this community got its name. John Galt always referred to it as Mulligan's Valley. Other residents called it Galt's Gulch. (Dagny Taggart called it by another name: Atlantis, the name of a mythical "lost city" in the Atlantic Ocean.)

Hugh Akston, a professor of philosophy, also asked for a lease. More strikers followed. But because Midas required each one to pay a rent for the use of his land, eventually the strikers sought to build an economy in the valley. Francisco d'Anconia opened a copper mine in the side of the mountains that ringed the valley. When Francisco needed start-up capital, Midas reopened his bank and made him a loan.

This prompted Ragnar Danneskjold to make another proposal. Ragnar Danneskjold had decided to operate as a privateer, to recover some of the substance that the United States government stole from the strikers by seizing certain "relief" cargoes that the government would try to send from time to time to various "People's States" in Europe and elsewhere. Now Ragnar proposed to deposit the proceeds from his activities in Midas' bank, so that anyone joining the strike, or likely to join the strike, could receive back all the income taxes they had been forced to pay since the strike began. Midas obliged Ragnar by opening accounts in the names of all the strikers, plus all those on a long list of prospects that John Galt and Francisco d'Anconia drew up and maintained. (Dagny Taggart and Henry Rearden remained on that list until the last year of the strike.) Midas also opened a mint and issued gold and silver coin, the only currency that the valley residents would accept.

The collapse of the economy of Colorado following the Fair Share Act and other burdensome laws and regulations caused the development of the valley to accelerate. Ellis Wyatt, Andrew Stockton, and many other businessmen/inventors came to the valley and carried on the same activities they had carried on outside. A contractor named Richard McNamara laid two hundred miles of water mains and power and telephone lines, opened a telephone exchange, and functioned as the valley's utility provider.

At some point in the community's history, John Galt and Midas Mulligan discussed an obvious need. Mulligan's Valley would require concealment from a society that was growing more desperate and more tyrannical with every passing year, or even with every passing month. (The demonstration of Project X probably surprised no one in the valley when it occurred.) John Galt invented another solution. He installed a series of directed-energy projectors at an elevation of 8700 feet, 700 feet above the ground level of the valley. These projectors would create a screen of "refractor rays" that would project a false image of a valley of jagged rocks to any pilot looking on it from above, thus making the real valley all but invisible.

The scab

On or about the first day of June in the last year of the strike (probably 1929), John Galt brought in yet another strike prospect, one Quentin Daniels, who had tried to reverse-engineer John Galt's electrostatic motor. Midas took Daniels to his own house. (Normally a striker would spend his first night in John Galt's house, in case he might waver, but Daniels needed no such consideration.) Midas had barely reached his house before he looked up and saw a horrifying sight: another aircraft attempting to descend. Any pilot in the valley was supposed to call in by radio so that Midas could have the ray screen turned off. This pilot did not do this. More to the point, the pilot was an uninvited visitor. If he descended much lower, he would intercept the refractor rays, and then anything might happen, and probably not good.

As Midas watched, the plane descended to an altitude of 8700 feet, and then was engulfed in a bright flash. When the flash cleared, the plane was descending even more rapidly—in a flat tailspin. Midas would say later that he thought that whoever the pilot was, deserved to get himself killed for such recklessness. And so he was quite unprepared to learn that the pilot of that aircraft was none other than Dagny Taggart.

Dagny did crash-land in a pasture on the far side of the valley from the airstrip. John Galt was first on the scene, and hand-carried her into the center of the village that the strikers had built. Midas met her there and rebuked her for taking her life in her hands as she had. Her ankle was injured, and she would require some medical attention, but at least she survived. But her presence created another problem, one that neither Midas nor Galt had anticipated: the first scab.

Dagny Taggart stayed in the valley for a month. The novel records that John Galt rented Midas Mulligan's automobile for a nominal daily rate during that month. Dagny received a complete tour of the valley, and had the opportunity to talk to Midas and to all the strikers who lived in the valley.

At the end of that month, Dagny Taggart decided to return to the outside. Midas begged John Galt not to return to New York City, where he spent eleven months out of the year, but Galt insisted on returning. Midas would not learn until later that John Galt's chief, and now sole, interest in staying in New York was spying on, and watching out for, Dagny.

The collapse

On November 5, John Galt returned to the valley—with Henry Rearden as a passenger. That evening, Midas again hosted a "welcome-home dinner" for Rearden. Rearden was obviously ready to go: he spent half the evening taking orders for Rearden Metal. Midas noted, with no small amount of anger, that Rearden wore a bandage on his head. Rearden waved off Midas' solicitude, saying, "Business, Midas. Business as usual, as they used to insult us with on the outside."

The next day, Midas turned over to Rearden a bankbook listing the very tidy sum that Ragnar Danneskjold had deposited in the Mulligan Bank in Rearden's name. It was the largest of the "vindication accounts" that Danneskjold had opened. Midas also bought back the gold bar that Rearden had brought with him, in exchange for a hefty supply of gold and silver coin.

Rearden did not waste time. He bought a vast tract of land that would become the new Rearden Steel, plus another tract that he called his "company subdivision." When Francisco d'Anconia landed in the valley with five of Rearden's former employees aboard, Midas understood the second purchase that Rearden had made.

On November 15, Ragnar Danneskjold returned to the valley, with his entire crew in tow. Danneskjold made another gold deposit in the Mulligan Bank, and told Midas that this would be his last. Midas was immensely relieved—but Danneskjold, as usual, said, "Forget it, Midas."

But when John Galt announced an acceleration in the special lecture series he had begun ten days earlier, Midas knew that something was up. He asked Galt about it, but Galt refused to tell him.

Then on November 22, John Galt made his famous three-hour speech to the nation. The next day, Galt went back to New York City. Again Midas tried to tell Galt not to go; again Galt went anyway. Midas could tell that Francisco knew why Galt would act so rashly—but Francisco wasn't telling, either.

Three months passed, during which time Henry Rearden brought the New Rearden Steel on-line and took from Midas the last of his markets for black market goods—in this case, steel. Midas would not compete with Rearden Metal. That was one market that Midas was glad to lose.

And then John Galt was arrested and held incommunicado.

Ragnar Danneskjold organized half the men in the valley, including Henry Rearden, as the Galt's Gulch Air and Land Militia. Its mission: to rescue John Galt. Mulligan stayed behind and held the fort. Weeks later, to Mulligan's tremendous relief, the Militia returned—with Galt, and with Dagny Taggart.

Aftermath

The following wintertime was the first time since the founding of Galt's Gulch that all its leaseholders were in residence at any time other than the month of June. In the springtime, John Galt announced that "the road [was] cleared" and that the strike was effectively settled—by default.

One may infer, from a description given of investment plans that he was making on the night that Galt would pronounce the strike over, that Midas Mulligan re-established offices of the Mulligan Bank in Chicago and in other cities, as local militias, not answering to the abusive federal government under the Thompson administration, restored law and order. One may also infer that Midas Mulligan never revealed the location of the valley, nor allowed any of his leaseholders to reveal it, in case they might need to retreat to it again. Midas would have no shortage of money-making opportunities. John Galt would establish a company to build locomotives and other products using his electrostatic motor; Dagny Taggart would start to rebuild the old Taggart Transcontinental Railroad; Henry Rearden would re-establish Rearden Steel; Ellis Wyatt would put out the fires, known as "Wyatt's Torch," on his oil shale fields and resume the production of oil from those fields; and Francisco d'Anconia would rebuild D'Anconia Copper SA, perhaps now known as D'Anconia Copper, Incorporated. In general, with the collapse of the "looters' system," the erstwhile strikers could now rebuild an economy in an environment in which they could operate their businesses as they saw fit and keep and use the fruits of their own labors.

---

Spoilers end here.

---

Typology

Midas Mulligan is a rare type. Like so many businessmen today, he receives criticism from many who simply do not understand business in general, nor the specific business he is in. Unlike most businessmen, he does not accept that criticism as valid. His changing of his name from "Michael" to "Midas" is a direct retort to his critics, and almost the same sort of dare that Patrick Henry made.

More to the point, Midas Mulligan, unlike Henry Rearden, never once gives to the villains in this piece the "sanction of the victim" that Ayn Rand observed that all too many businessmen gave to such people. When John Galt comes to visit him, he does not need convincing, nor even specific direction. In fact, his actions establish a lead for others to follow. This represents Rand's idealized concept of a leading businessman: one who not only leads his own business to success but also leads other businessmen by his own example.