David F. Houston served as secretary of the Treasury from February 2, 1920, until March 3, 1921. Under the provisions of the original Federal Reserve Act, the Treasury secretary was also ex-officio chairman of the Federal Reserve Board
Houston was born in Monroe, North Carolina, in 1866. He graduated from the University of South Carolina in 1887 with honors. He went on to study at Harvard in 1891 and received a master’s degree in political science in 1892. In 1894, he accepted a position as adjunct professor of political science at the University of Texas and was named dean of the faculty in 1899.
In 1900, President William McKinley appointed Houston to the Board of Visitors of the US Military Academy at West Point. In 1902, Houston became president of Texas A&M and stayed there until 1905, when he returned to the University of Texas to become its president. He remained in that role until 1908, when he left to serve as chancellor of Washington University in St. Louis. In 1913, President Woodrow Wilson appointed him secretary of Agriculture. He held that post until 1920, when Wilson tapped him to lead the Treasury.
During his tenure as Treasury secretary, Houston issued severe warnings and increased rediscount rates in order to prevent the inflation that the European allies were experiencing from happening in the United States. Houston predicted a fall in US prices, particularly of farm products, after the optimism of the World War I armistice wore off. He pushed for easier credit for farmers and urged them to produce less. However, prices fell more than expected in 1920, and Houston was accused by farm spokesmen of deliberately wrecking agricultural prosperity. Houston resigned at the end of Wilson's term, after only a year in office.
After leaving government service, Houston worked for Bell Telephone Securities as president from 1921 to 1925. He then became vice president of finance at AT&T from 1925 to 1927. Finally, he worked for the Mutual Life Insurance Company of New York from 1927 to 1940, becoming president in 1930. He was also a member of the boards of Guaranty Trust Company and US Steel.
His written works include A Critical Study of Nullification in South Carolina (1902) and Eight Years with Wilson's Cabinet (1926).
Houston died in 1940.
Written by the Board of Governors of the Federal Reserve System. See disclaimer.