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, Maryland. He received a bachelor’s degree from Swarthmore College in 1915, worked in sales at Scott Paper Company for a year after graduating, and then went to fight in World War I. He entered the US Army as a private, eventually advancing to captain. After returning from the war, he became an assistant sales manager at Scott and was named director of the company the following year. He rose to take on numerous leadership roles with the company—including president and chief executive officer—and stayed with Scott for six decades, despite several long stints in public service. During his time at Scott, it grew from a one-factory operation to a multinational with 40,000 employees.
In 1937, McCabe joined the Federal Reserve Bank of Philadelphia as a class C director, followed by his appointment as chairman of that Reserve Bank’s board of directors in 1939. During this time, he took leave from Scott and worked for the Roosevelt administration during the war years, serving as deputy director of the division of priorities of the Office of Production Management, deputy administrator of the Lend-Lease program, commissioner of Army-Navy liquidation in 1945, and a member of the Department of Commerce’s business advisory council. After the war, he was awarded the Medal for Merit, the highest civilian honor at the time.
In 1948, two years after McCabe had returned to Scott, President Harry Truman appointed him chairman of the Federal Reserve Board of Governors. As chairman, McCabe supported a strong and independent Federal Reserve System.
When a dispute arose between the Federal Reserve and the US Treasury over interest rate policy and credit restraint in 1949–50, McCabe participated in the committee Truman created to hammer out a compromise. 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.