Thomas B. McCabe
Chairman (Board of Governors)
1948 - 1951
Thomas B. McCabe served as chairman of the Board of Governors of the Federal Reserve System from April 15, 1948, to March 31, 1951.
McCabe was born in 1893, in Whaleyville, Md. He received a bachelor’s degree from Wilmington Conference Academy (now known as Wesley College) and a doctorate of law from Swarthmore College.
McCabe worked in sales for a year after graduating before he went to fight in World War I. He entered the U.S. Army as a private, eventually advancing to captain. After returning from the war, he became an assistant sales manager at Scott Paper Company and was named director of the company the following year. He held numerous leadership roles with the company—including president and chief executive officer—before entering public service.
McCabe served as a member of the Department of Commerce’s business advisory council from 1944 to 1945 and a department director of the Division of Priorities within the Office of Production Management. He served as a Class C director of the Federal Reserve Bank of Philadelphia from 1937 until his appointment to the Board of Governors.
As chairman, McCabe supported a strong and independent Federal Reserve System. In public addresses during his tenure, he repeatedly stressed the importance of a flexible monetary policy that worked in the best interest of the financial conditions as opposed to one that served to appease the masses.
When a dispute arose between the Federal Reserve and the U.S. Treasury over interest rate policy and credit restraint in 1949–50, McCabe participated in the committee President Harry Truman created to hammer out a compromise on the issues. The agreement, known as the Treasury-Fed Accord, was reached on March 3, 1951. Under the terms, the Fed was no longer obligated to monetize the debt of the Treasury at a fixed rate. The accord bolstered the central bank’s independence and laid the foundations for the monetary policy the Fed pursues today.
After resigning from the Board, McCabe returned to the private sector. He died in 1982.
Written by the Board of Governors of the Federal Reserve System. See disclaimer.