William Gibbs McAdoo
William Gibbs McAdoo (
October 31,
1863–
February 1,
1941) was a
U.S. Senator,
United States Secretary of the Treasury and director of the
United States Railroad Administration (USRA). By virtue of his position as Secretary of the Treasury in August 1914 he also served as the first
Chairman of the Federal Reserve Board.
McAdoo was born in Marietta, Georgia, and moved to Knoxville, Tennessee, in 1877, when his father, William Gibbs McAdoo, Sr., became a professor at the University of Tennessee. He was admitted to the bar in Tennessee and then moved to New York, where he met Francis R. Pemberton, son of the Confederate General John Pemberton, who surrendered to Grant at Vicksberg. They formed a firm, Pemberton and McAdoo, to sell investment securities.
At the turn of the century, McAdoo took on the leadership of a project to build a railway tunnel under the Hudson River to connect Manhattan with New Jersey. A tunnel had been partly constructed during the 1880s by
Dewitt Clinton Haskin. With McAdoo as President of the
Hudson and Manhattan Railroad Company, two passenger tubes were completed and opened in 1908. The popular McAdoo told the press that his motto was "Let the Public be Pleased". The tunnels are now operated as part of the
PATH (Port Authority Trans-Hudson) system.
McAdoo was lured away from business after he worked for the Wilson presidential campaign in 1912.
President Woodrow Wilson asked him to serve as Secretary of the Treasury from 1913 to 1918. He married Wilson's daughter,
Eleanor Randolph Wilson, at the
White House on May 7, 1914. McAdoo offered to resign when he married the President's daughter but Wilson urged him to complete his work of turning the Federal Reserve System into an operational central bank. The legislation establishing the System had been passed by Congress in December 1913.
McAdoo confronted a major financial crisis at the outbreak of
World War I. During the last week of July, 1914, British and French investors began to liquidate their American securities and transfer gold to Europe. McAdoo kept the U.S. on the
Gold Standard by closing the
New York Stock Exchange for an unprecedented four months to prevent Europeans from selling American securities and exchanging the proceeds for gold. He prevented a replay of the bank suspensions that plagued America during the
Panic of 1907 by invoking the emergency currency provisions of the
Aldrich Vreeland Act. His actions helped turn America into a world financial power.
After the United States entered the Great War in April 1917, the United States Railroad Administration was formed to run America's transportation system during the war. McAdoo was appointed
Director General of Railroads, a position he held until November 1919 when the armistice was declared, ending World War I.
After leaving the Wilson Cabinet, he ran twice for the
Democratic nomination for President, losing to
James M. Cox in 1920, and to
John W. Davis in 1924, even though in both years he led on the first ballot. He served as
Senator for
California from 1933–1938. He and Eleanor were divorced in 1934.
McAdoo was a "Dry" with respect to
Prohibition, and was the favored candidate of the
Ku Klux Klan in 1924 when the other front-runner appeared to be the
Catholic Al Smith of
New York. McAdoo took a payment of $25,000 from oil executive
Edward Doheny in connection with the
Teapot Dome scandal, but returned it once he discovered Doheny's links with
Secretary of the Interior Albert Bacon Fall.
McAdoo's former home in
Chattanooga's Fort Wood neighborhood has been restored and is now a private residence.
Broesamle, John J.,
William Gibbs McAdoo: A Passion for Change, 1863-1917, NationalUniversity Publications, Kennikat Press, Port Washington, N.Y., 1973
McAdoo, William G.,
Crowded Years, Houghton Mifflin Company, 1931
Silber, William L.,
When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy, Princeton University Press, Princeton, N.J., 2007
