William Gibbs McAdoo
|William Gibbs McAdoo|
|46th United States Secretary of the Treasury|
March 6, 1913 – December 15, 1918
|Preceded by||Franklin MacVeagh|
|Succeeded by||Carter Glass|
|United States Senator
March 4, 1933 – November 8, 1938
|Preceded by||Samuel M. Shortridge|
|Succeeded by||Thomas M. Storke|
October 31, 1863|
near Marietta, Georgia, U.S.
|Died||February 1, 1941
Washington, D.C., U.S.
|Spouse(s)||Sarah Hazelhurst Fleming (m. 1885; w. 1912)
Eleanor Randolph Wilson (m. 1914; d. 1934)
Doris Isabel Cross (m. 1935–41)
|Alma mater||University of Tennessee|
William Gibbs McAdoo, Jr. (October 31, 1863 – February 1, 1941) was an American lawyer and political leader who served as a U.S. Senator, United States Secretary of the Treasury and director of the United States Railroad Administration (USRA). By virtue of his position as Secretary of the Treasury, in August 1914, he served as an "ex-officio member" on the first Federal Reserve Board in Washington, DC.
Early life and career
McAdoo was born near Marietta, Georgia, to author Mary Faith Floyd (1832–1913) and attorney William Gibbs McAdoo (1820–1894). His uncle, John D. McAdoo, was a Civil War general and justice on the Texas Supreme Court. McAdoo attended rural schools until his family moved to Knoxville, Tennessee, in 1877, when his father became a professor at the University of Tennessee.
He graduated from the University of Tennessee and is an initiate of the Kappa Sigma Fraternity Lambda Chapter at the University of Tennessee. He was appointed deputy clerk of the United States District Court for the Eastern District of Tennessee in 1882. He married his first wife, Sarah Hazelhurst Fleming, on November 18, 1885. They had seven children: Harriet Floyd McAdoo, Francis Huger McAdoo, Julia Hazelhurst McAdoo, Nona Hazelhurst McAdoo, William Gibbs MacAdoo III, Robert Hazelhurst McAdoo, and Sarah Fleming McAdoo.
He was admitted to the bar in Tennessee in 1885 and set up a practice in Chattanooga, Tennessee. In the early 1890s, he lost most of his money trying to electrify the Knoxville Street Railroad system. In 1892 he moved to New York City, where he met Francis R. Pemberton, son of the Confederate General John C. Pemberton. They formed a firm, Pemberton and McAdoo, to sell investment securities.
In 1895, McAdoo returned to Knoxville and regained control of part of his bankrupt streetcar company (which had been auctioned off). In subsequent months, he engaged in a continuous struggle with Ohio businessman C.C. Howell over control of the city's streetcar system, culminating in a bizarre incident known as the Battle of Depot Street. Litigation in the aftermath of this incident favored Howell, and McAdoo abandoned his streetcar endeavors in 1897 and returned to New York.
Around the start of the 20th century, McAdoo took on the leadership of a project to build a railway tunnel under the Hudson River to connect Manhattan with New Jersey. A tunnel had been partly constructed during the 1880s by Dewitt Clinton Haskin. With McAdoo as President of the Hudson and Manhattan Railroad Company, two passenger tubes were completed and opened in 1908. The popular McAdoo told the press that his motto was "Let the Public be Pleased." The tunnels are now operated as part of the Port Authority Trans-Hudson (PATH) system.
His first wife died in February 1912. That year, he served as vice chairman of the Democratic National Committee.
In March 1919, McAdoo co-founded the law firm McAdoo, Cotton & Franklin, now known as white shoe firm Cahill Gordon & Reindel. He left the firm in 1922 and moved to California to continue his political career.
Secretary of the Treasury
Woodrow Wilson lured McAdoo away from business after their meeting in 1910. He worked for the Wilson presidential campaign in 1912. Once he was President, Wilson appointed McAdoo Secretary of the Treasury, a post McAdoo held from 1913 to 1918.
He married Wilson's daughter Eleanor Randolph Wilson at the White House on May 7, 1914. They had two daughters, Ellen Wilson McAdoo (1915–1946) and Mary Faith McAdoo (1920–1988). Ellen married twice and had two children. Mary married three times, but had no children. McAdoo's second marriage ended in divorce in July 1935, and he married a third time, to Doris Isabel Cross, in September 1935.
McAdoo offered to resign when he married the President’s daughter but Wilson urged him to complete his work of turning the Federal Reserve System into an operational central bank. The legislation establishing the System had been passed by Congress in December 1913.
As head of the Department of the Treasury McAdoo confronted a major financial crisis on the eve and at the outbreak of World War I, July - August 1914. During the last week of July, 1914, British and French investors began to liquidate their American securities holdings into U.S. currency. Many of these foreign investors then converted their dollars into gold, as was common practice in international monetary transactions at the time, in order to repatriate their holdings back to Europe. If they had done this, they would have depleted the gold backing for the dollar, possibly inducing a depression in American financial markets and in the American economy as a whole. They might then have been able to buy American goods and raw materials (for their war effort) at greatly depressed prices, which the Americans would have had to accept in order to restart the economy from a consciously (albeit inadvertently) caused depression.
McAdoo's actions at the time were both bold and outrageous. The United States in 1914 was still a net debtor nation (i.e., Americans' aggregate debt to foreigners was greater than foreigners' aggregate debt to Americans). The nations of Europe and their financial institutions held far more in debt of the United States; of many of the states of the Union; and of American private institutions of all kinds, than investors in the United States held in the debt of Europe's nations and institutions in all forms, both public and private.
McAdoo kept the U.S. currency on the Gold Standard. He arranged the closing of the New York Stock Exchange for an unprecedented four months in 1914 to prevent Europeans from selling American securities and exchanging the proceeds for dollars, and then gold.
Economist William L. Silber wrote that the wisdom and historical impact of this action cannot be overemphasized. McAdoo’s bold stroke, Silber writes, as a first consequence averted an immediate panic and collapse of the American financial and stock markets. But also, it laid the groundwork for an historic and decisive shift in the global balance of economic power, from Europe to the United States; a shift which occurred exactly at that time. More than this, McAdoo's actions both saved the American economy and its future allies from economic defeat in the early stages of the war.
Investors in the warring countries had no access to their holdings of US financial assets at the outset of the war because of McAdoo’s actions. As a result, the treasuries of those countries more-quickly exhausted all of their net foreign exchange holdings (those that were on-hand and in their possession before McAdoo closed the markets), currency, and gold reserves. Some of them then issued sovereign bonded indebtedness (IOUs) to pay for the war materials they were buying on the American and other markets.
Silber wrote that the intact and undamaged American financial system and its markets managed the flow and operation of this financing more easily than they would have without McAdoo's measures, and that US industry swiftly built up to the scale needed to meet the allied war needs. The managed liquidation of foreign holdings of US assets moved the United States to a net creditor position internationally and with Europe from the net debtor position it had held prior to 1915.
In order to prevent a replay of the bank suspensions that plagued America during the Panic of 1907, McAdoo invoked the emergency-currency provisions of the 1908 Aldrich Vreeland Act. William Silber credits his actions for having turned America into a world financial power, in his book When Washington Shut Down Wall Street.
Later political career
After the United States entered World War I in April 1917, the United States Railroad Administration was formed to run America’s transportation system during the war. McAdoo was appointed Director General of Railroads, a position he held until November 1918 when the armistice was declared, ending World War I.
After leaving the Wilson Cabinet, he focused on his law firm, which included serving as general counsel for the founders of United Artists. McAdoo ran twice for the Democratic nomination for President, losing to James M. Cox in 1920, and to John W. Davis in 1924, even though in both years he led on the first ballot. A committed "Dry" with respect to Prohibition, McAdoo's first Presidential bid was scuttled by the New York state delegation and other Northern opponents of the banning of alcohol at the 1920 Democratic National Convention. After defeating his chief rival for the nomination, Attorney General A. Mitchell Palmer, McAdoo finally lost the party nomination to dark horse candidate Governor James M. Cox of Ohio when the delegates decided in his favor on the 44th ballot.
The 1924 nomination was notable due to the Ku Klux Klan endorsement of McAdoo; he did not condemn the endorsement. He served as Senator for California from 1933–1938. He was defeated for renomination to the Senate in 1938 by Sheridan H. Downey. McAdoo and Eleanor were divorced in 1934. Two months after the decree was finalized in July 1935, the 71-year old married 26-year-old nurse Doris Isabel Cross.
McAdoo took a payment of $25,000 from oil executive Edward Doheny in connection with the Teapot Dome scandal, but returned it once he discovered Doheny's links with Secretary of the Interior Albert Bacon Fall.
Death and legacy
McAdoo was played by Vincent Price in the 1944 biopic Wilson. He is a significant character in the Glen David Gold novel Sunnyside, encouraging Charlie Chaplin to help with efforts to raise funds for World War I before advising him on the formation of United Artists. McAdoo's former home in Chattanooga's Fort Wood neighborhood has been restored and is now a private residence.
McAdoo is quoted as having said, "It is impossible to defeat an ignorant man in argument." And in reference to Warren Harding, McAdoo said his public utterances were “an army of pompous phrases moving over the landscape in search of an idea.”
- William G. McAdoo, The Challenge. New York: Century Co., 1928.
- William G. McAdoo, Crowded Years: The Reminiscences of William G. McAdoo. Boston, MA: Houghton Mifflin Company, 1931.
- McAdoo is variously differentiated from family members of the same name:
- Dr. William Gibbs McAdoo (1820-1894) - sometimes called "I" or "Senior"
- William Gibbs McAdoo (1863-1941) - sometimes called "II" or "Junior"
- Lt. William Gibbs McAdoo, Jr. (1895-1960) - sometimes called "III"
- TSHA Online - Texas State Historical Association - Home at www.tshaonline.org
- Imjort, et al. (August 22, 1938). California's McAdoo . Time
- East Tennessee Historical Society, Lucile Deaderick (ed.), Heart of the Valley: A History of Knoxville, Tennessee (Knoxville, Tenn.: East Tennessee Historical Society, 1976), pp. 216-228.
- Shook, Dale N. William G. McAdoo and the Development of National Economic Policy, 1913-1918. NY: Garland Publishing, 1987.
- Staff report (February 26, 1913). FOUR MEN CERTAIN IN WILSON CABINET; Bryan, McAdoo, Burleson, and Daniels Accept -- Walker for Attorney General. New York Times
- Staff report (March 6, 1913). CABINET MEMBERS SWORN.; McReynolds, Houston, and McAdoo Take Oath of Office . New York Times
- Staff report (May 8, 1914). ELEANOR WILSON WEDS W.G. M'ADOO; President's Youngest Daughter and Secretary of Treasury Married at White House. New York Times
- Staff report (December 23, 1946). M'ADOO'S DAUGHTER FOUND IN COMA, DIES. New York Times
- Silber, William L., When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy, Princeton University Press, Princeton, N.J., 2007, ISBN 978-0-691-12747-7
- Bagby, Wesley M. “William Gibbs McAdoo and the 1920 Democratic Presidential Nomination.” East Tennessee Historical Society’s Publications 31 (1959): 43-58.
- Allen, Lee N. “The McAdoo Campaign for the Presidential Nomination in 1924.” Journal of Southern History 29 (May 1963): 211-28.
- Gelbart, Herbert A. “The Anti-McAdoo Movement of 1924.” Ph.D. dissertation, New York University, 1978.
- Stratton, David H. “Splattered with Oil: William G. McAdoo and the 1924 Democratic Presidential Nomination.” Southwestern Social Science Quarterly 44 (June 1963): 62-75.
- Prude, James C. “William Gibbs McAdoo and the Democratic National Convention of 1924.” Journal of Southern History 38 (November 1972): 621-28.
- Niall Palmer, The Twenties in America: Politics and History. Edinburgh, Scotland: Edinburgh University Press, 2006; pg. 23.
- Palmer, The Twenties in America, pg. 24.
- Staff report (July 18, 1934). Eleanor Wilson McAdoo Divorces Senator At Five-Minute Hearing on Incompatibility.New York Times
- Staff report (September 15, 1935). M'ADOO WEDS NURSE IN COLONIAL STYLE; Senator, 71, and Bride, 26, Take Vows in Flower-Decked Home of Son-in-Law.New York Times
- Staff report (September 23, 1935). No. 3 for McAdoo. Time
- [dead link]
- Staff report (February 2, 1941). William G. M'Adoo Dies in the Capital of a Heart Attack; Former Senator, Secretary of Treasury Under Wilson, Was Railways Director in War. Builder of Hudson Tubes. He Swung 1932 Nomination to Roosevelt -- Backed for the Presidency in '20 and '24. New York Times
- Staff report (February 10, 1941). Footnote to History. Times
- Gold, Glen David. 2009. Sunnyside. New York: Alfred A. Knopf. ISBN 978-0-307-27068-9
- TSHA Online - Texas State Historical Association - Home at www.tshaonline.org
- Jack Lynch, Guide to Grammar and Style. Retrieved: 5 June 2011.
- John J. Broesamle, William Gibbs McAdoo: A Passion for Change, 1863-1917. Port Washington, NY: Kennikat Press, 1973.
- Gordon B. McKinney, "East Tennessee Politics: An Incident in the Life of William Gibbs McAdoo, Jr." East Tennessee Historical Society’s Publications 48 (1976): 34-39.
- Mary Synon, McAdoo, the Man and His Times: A Panorama in Democracy. Indianapolis, IN: Bobbs-Merrill Co., 1924.
|Wikisource has original works written by or about:
|Wikimedia Commons has media related to William Gibbs McAdoo.|
- William Gibbs McAdoo at the Biographical Directory of the United States Congress
- William Gibbs McAdoo via arlingtoncemetery.net
- Who's Who: William Gibbs McAdoo
- William Gibbs McAdoo via Tennessee Historical Society
- Speeches by William Gibbs McAdoo via Library of Congress
- Anthony Fitzherbert (June 1964). "William G. McAdoo and the Hudson Tubes". Electric Railroaders Association, nycsubway.org. Retrieved 2009-03-14.
|U.S. Secretary of the Treasury
Served under: Woodrow Wilson
March 6, 1913 – December 15, 1918
|United States Senate|
Samuel M. Shortridge
|United States Senators from California
March 4, 1933 – November 8, 1938
Thomas M. Storke
|Awards and achievements|
|Cover of Time Magazine
7 January 1924
Bishop William Lawrence