William McChesney Martin Jr. took office as chairman of the Board of Governors of the Federal Reserve System on April 2, 1951, and served until January 30, 1970. He served under five different presidents.
Martin was born in St. Louis, Missouri, in 1906. He graduated from Yale University with a bachelor’s degree.
Martin’s association with the Federal Reserve was lifelong. His father, William McChesney Martin Sr. helped draft the Federal Reserve Act and was governor of the Federal Reserve Bank of St. Louis from 1929 to 1941. After earning his degree, the younger Martin worked in the bank examination department of the Federal Reserve Bank of St. Louis before leaving to head the statistics department of A.G. Edwards & Sons. He later became the firm’s representative at the New York Stock Exchange. In 1941, he was drafted into the US Army. By the end of World War II, he was a colonel and was nominated by President Harry Truman to lead the Export-Import Bank of the United States.
From February 1949 to April 1951, Martin served as assistant secretary of the Treasury. In that role, he was instrumental in helping negotiate the March 1951 Treasury-Fed Accord. That agreement gave the Fed control over monetary policy and ended its obligation to monetize the debt of the Treasury at a fixed rate. One month after the Accord was signed, President Truman appointed Martin chairman of the Board of Governors.
As chairman, Martin was known for his tight money policies and anti-inflation bias. With his banking background, he emphasized the importance of statistics over economic theory. At the same time, he also pushed for the Fed to have flexibility and discretion in its policymaking. In 1956, he famously described the Fed’s purpose to Congress as “leaning against the winds of deflation or inflation, whichever way they are blowing.”
Martin also was known for his willingness to listen to opposing views, although he also had the gift of influencing others. Under Martin, all Reserve Bank presidents participated in Federal Open Market Committee meetings. Although he had a reputation for being compromising, Martin did not shy from conflict. In 1965, he famously clashed with President Lyndon Johnson over the discount rate, raising it despite the president’s objections. Some viewed this action as an assertion of the Fed’s independence.
After leaving the Board of Governors, Martin served on the boards of several corporations and nonprofit organizations, including IBM, American Express, and the National Geographic Society. He also worked as a lawyer at Riggs National Bank in Washington.
Martin died in 1998.
Written by the Board of Governors of the Federal Reserve System. See disclaimer.