William G. McAdoo was sworn in as the secretary of Treasury on March 5, 1913. Upon passage of the Federal Reserve Act on December 23, 1913, McAdoo became chairman of the Federal Reserve Board and a member of the Reserve Bank Organization Committee (RBOC). The Federal Reserve Act required McAdoo to hold the first meeting of the Federal Reserve Board in Washington, DC, “as soon as may be after the passage of the act, at a date to be fixed by the RBOC.” McAdoo retired as Treasury secretary on December 15, 1918, and Carter Glass became the new Treasury secretary and chairman of the Federal Reserve Board.
Born near Marietta, Georgia, in 1863, McAdoo spent his early life in the South. After graduating from the University of Tennessee, he was appointed deputy clerk for the US Circuit Court for the Southern Division, Eastern District of Tennessee. In 1885, he was admitted to the bar. He practiced law in Chattanooga, Tennessee, until 1892, when he moved to New York. There, he continued to practice until 1903.
McAdoo involved himself in a variety of industries. He was the president and director of Hudson & Manhattan Railroad Company, which completed the first tunnel under the Hudson River in 1904. In 1912, he served as the chairman of the Democratic National Committee (DNC) and also as acting chairman.
As Treasury secretary during the outbreak of World War I, McAdoo took bold steps to confront financial crisis. In July 1914, European investors began liquidating their American holdings into US currency, then converting them to gold, which backed the US dollar. To forestall the sell-off, McAdoo closed the New York Stock Exchange for four months. Some economists credit his actions with preventing the collapse of the US financial and stock markets and laying the groundwork for a shift in economic power from Europe to America.
During McAdoo’s term as Treasury secretary and ex-officio chairman of the Federal Reserve Board, he held other positions as well. McAdoo was ex-officio chairman of the Federal Farm Loan Board and director general of US Railroads.
After resigning as Treasury secretary, it was suggested at the 1920 DNC Convention in San Francisco that McAdoo run for president of the United States. He requested that his name not be presented to the convention. In a later convention his name was included on the ballot, but he was not nominated. McAdoo remained active in various cities’ DNCs well into the 1930s. From 1933 to 1938, he was a US senator. He also wrote two books: one about prohibition and an autobiography.
McAdoo was married three times. He had five children with his first wife, Sarah, who died in 1912. After Sarah’s death, he married President Woodrow Wilson’s daughter Eleanor. The couple was married at the White House and had two children before divorcing. In 1935, McAdoo married his third wife, Doris.
McAdoo died in 1941.
Written by the Board of Governors of the Federal Reserve System. See disclaimer.