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William Gibbs McAdoo

 
Britannica Concise Encyclopedia: William Gibbs McAdoo
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(born Oct. 31, 1863, near Marietta, Ga., U.S. — died Feb. 1, 1941, Washington, D.C.) U.S. public official. In 1892 he moved to New York, where he organized the Hudson and Manhattan Railway companies (later consolidated), which built tunnels under the Hudson River. A prominent supporter of Woodrow Wilson in the 1912 presidential campaign, he was appointed secretary of the treasury by Wilson in 1913; he married Wilson's daughter in 1914. During World War I he directed fund-raising drives that yielded $18 billion for the war effort. He was later director general of U.S. railroads (1917 – 19) and U.S. senator from California (1933 – 38).

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Biography: William Gibbs McAdoo
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One of the ablest Democratic politicians of his time, William Gibbs McAdoo (1863-1941) was a superb administrator and organizer who served as a U.S. senator and a Cabinet officer in Wilson's administration.

The son of a southern jurist, William Gibbs McAdoo was born near Marietta, Ga., and educated at the University of Tennessee. After practicing law in Chattanooga, Tenn., for several years, he opened a law office in New York City in 1892. Ten years later he organized and directed the company that completed construction of the railroad tubes under the Hudson River. After service as vice-chairman of the Democratic National Committee in 1912, McAdoo became President Woodrow Wilson's secretary of the Treasury. In addition to his duties as secretary, he served as chairman of the Federal Reserve Board, the Federal Farm Loan Board, the War Finance Corporation, and the United States section of the International High Commission. He also floated four Liberty Loans and was responsible for extending credit to the Allied Powers in World War I. In January 1918, with the railroads on the verge of collapse, he became director general of railways and instituted operational reforms. A widower, he married the President's daughter, Eleanor Randolph Wilson. (They were divorced 20 years later.)

McAdoo's superior abilities won him a strong following within the administration. If President Wilson had withdrawn himself categorically from contention for a third nomination in 1920, McAdoo would undoubtedly have been selected, although he could not, as the President's sonin-law, make an open bid. McAdoo would probably have won the nomination in 1924, also, but he was linked indirectly to the Teapot Dome scandal (though not involved in the scandal itself) and had committed certain professional improprieties. As it was, he and Al Smith deadlocked the Democratic nominating convention for dozens of ballots, and only after both men reluctantly withdrew was John W. Davis named on the 103rd ballot.

McAdoo had support from the agrarian progressives, the railroad brotherhoods, the temperance forces, and the Ku Klux Klan. A jaunty man of great personal charm, McAdoo also had a strong strain of opportunism. As Walter Lippmann wrote in 1920, he was not "fundamentally moved by the simple moralities" and his "honest" liberalism catered largely to popular feeling.

Embittered by his failure to win the nomination, McAdoo practiced law in California until he was elected to the U.S. Senate in 1932. He was a staunch supporter, but not truly a leader, of the New Deal. He was defeated for renomination in 1938 and died three years later.

Further Reading

McAdoo lacks a biography. Crowded Years, an autobiography (1931), ends with his resignation from the Cabinet. It should be supplemented with the many books on the Wilson administration. The best coverage of McAdoo's part in the presidential nominations of 1920 and 1924 is in David Burner, The Policies of Provincialism: The Democratic Party in Transition, 1918-1932 (1968).

 
Columbia Encyclopedia: William Gibbs McAdoo
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McAdoo, William Gibbs (măk'ədū), 1863-1941, American political leader, U.S. Secretary of the Treasury (1913-18), b. near Marietta, Ga. The son of a prominent Georgia jurist, McAdoo became a lawyer in Chattanooga, Tenn. After 1892 he practiced in New York City and was president of the Hudson and Manhattan RR Company, which built and operated the railroad tunnels known as the Hudson Tubes. He actively promoted Woodrow Wilson for the presidency in 1912 and was given a cabinet post. In 1914, after the death (1912) of his first wife, he married Eleanor Randolph Wilson, daughter of the President. The Federal Reserve System was begun during McAdoo's administration of the Dept. of the Treasury, and he was its first chairman. He also managed the financing of American participation in World War I and served as director-general of railroads during the period of government operation (1917-19). After leaving public office, McAdoo returned to law practice in New York City, then moved to Los Angeles. He was prominent as a contender for the Democratic presidential nomination in 1920, and in 1924 the supporters of McAdoo and the adherents of Alfred E. Smith balanced each other and forced the choice of a compromise candidate. In 1928 he was unable to halt Smith's nomination. His California delegation at the convention in 1932 was joined with the Texas delegation in support of John N. Garner. When this bloc of voters was shifted to Franklin Delano Roosevelt, Roosevelt was nominated. McAdoo later served (1933-39) as Senator from California. His autobiography, Crowded Years (1931), ends with his resignation from the cabinet.
Wikipedia: William Gibbs McAdoo
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This article is about the Secretary of the Treasury and U.S. Senator from California. For the Representative from New Jersey and New York City Police Commissioner, see William McAdoo (New Jersey).
William Gibbs McAdoo

In office
March 6, 1913 – December 15, 1918
Preceded by Franklin MacVeagh
Succeeded by Carter Glass
In office
March 4, 1933 – November 8, 1938
Preceded by Samuel M. Shortridge
Succeeded by Thomas M. Storke
Born October 31, 1863(1863-10-31)
near Marietta, Georgia, U.S.
Died February 1, 1941 (aged 77)
Washington, D.C., U.S.
Political party Democratic
Spouse(s) Sarah Hazelhurst Fleming
(1885-1912 [her death])
Eleanor Randolph Wilson
(1914-1934 [divorce])
Doris Isabel Cross
(1935-1941 [his death])
Alma mater University of Tennessee
Profession Politician, Lawyer
Religion Episcopalian

William Gibbs McAdoo, Jr.[1] (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.

Contents

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.[2] 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,[1] 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 1889, he lost most of his money trying to electrify the Knoxville Street Railroad system.[3] In 1892 he moved to New York City, where he met Francis R. Pemberton, son of the Confederate General John Pemberton. They formed a firm, Pemberton and McAdoo, to sell investment securities.

At the turn of the 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 of 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.

Political career

McAdoo was lured away from business after meeting Woodrow Wilson in 1910. He worked for the Wilson presidential campaign in 1912. Once President, Wilson asked McAdoo to serve as Secretary of the Treasury, a post which he held from 1913 to 1918.[4][5][6]

He married Wilson's daughter Eleanor Randolph Wilson at the White House on May 7, 1914.[7] They had two daughters, Ellen Wilson McAdoo (1915-1946) and Mary Faith McAdoo (1920-1988). Ellen married twice, had a son by each marriage, and eventually committed suicide.[8] Her parents adopted her elder son after her death, and he took their surname. Mary Faith married three times but had no children.

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.[9] During the last week of July, 1914, British and French investors began to liquidate their American securities' holdings (which were denominated in U.S. currency); and convert them into gold holdings as was the practice, when the international monetary system was based upon the "Gold" standard. The Europeans then proposed to repatriate their gold holdings back to their treasuries in Europe. If they had done this, not only would they have collected the foreign exchange reserves needed to buy supplies for the war (without borrowing the cash to do so, or having to sell bonds to raise cash from the Americans); they would have caused an immediate depression in American financial markets, and a general depression in the American economy as a whole. They would then have been able to offer 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 re-start the economy from a deliberately (albeit inadvertently) engineered depression.

"A long man with a long head". Puck cartoon, 25 April 1914.

McAdoo's actions at the time were both bold and courageous. The United States in 1914 was a still a net debtor nation (i.e., its net balance sheet was heavily negative). The nations of Europe and their financial institutions held far more in debt of the United States; of each of the states of the Union; and of American private institutions of all kinds, than 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. on the Gold Standard. He ordered the closing of the New York Stock Exchange for an unprecedented four months to prevent Europeans from selling American securities and exchanging the proceeds for dollars, and then gold.[9]

The wisdom and historical impact of this action can not be overemphasized. McAdoo’s bold stroke 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, and remains to this day. More to this, McAdoo's actions saved both the American economy and those same allies from economic defeat in the early stages of the war.

The western allies (France, Britain and their global empires) greatly underestimated their material and financial needs for the war. They wrongly predicted the war to be short, and their planning for the material and financial needs to sustain their efforts were orders of magnitude smaller than they quickly came to be. If, by their actions they had at the outset of the war, damaged American financial markets, and started a depression in the American economy; America would not have been available in 1915 and beyond, to take over the financial and material production requirements needed to sustain the western allied war effort from 1915, to the end of the war.

The historic opportunity seized by the American financial system was the retirement (liquidation) in a five year period (1915 – 1919) of the entire historical net external (i.e., the net external asset holdings held by US interests minus net total US debts held by foreigners) debt of the United States.

The western European allied nations had no access to their holdings of US financial assets at the outset of the war because of McAdoo’s actions. As a result, they 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. They then had no choice but to issue sovereign bonded indebtedness (IOUs) to pay for the war materials they were buying on the domestic American and international markets.

The intact and undamaged American financial system and its markets easily managed the flow and operation of this financing and ensured that US industry swiftly built up to the necessary tempo needed to meet the allied war needs. The American financial system also managed the liquidation of allied holdings of US assets thereby moving the United States to a net creditor position internationally and with Europe from the net debtor position of the US in 1914.

In order to prevent a replay of the bank suspensions that plagued America during the Panic of 1907, he 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.[9]

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.[10] He ran twice for the Democratic nomination for President, losing to James M. Cox in 1920,[11] and to John W. Davis in 1924,[12] even though in both years he led on the first ballot.[13][14][15] 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.[16] Two months after the decree was finalized in July 1935, the 71-year old married 26-year-old nurse Doris Isabel Cross.[17][18]

McAdoo was a "Dry" with respect to Prohibition. 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 died of a heart attack while travelling in Washington, D.C., after the third inauguration of Franklin D. Roosevelt,[19] and was buried in Arlington National Cemetery in Arlington, Virginia.[20]

McAdoo was played by Vincent Price in the 1944 biopic Wilson. McAdoo's former home in Chattanooga's Fort Wood neighborhood has been restored and is now a private residence.

The town of McAdoo, Texas was named after him.[21]

There is a restaurant in New Braunfels, Texas that is named after him called McAdoo's Seafood Co.

Bibliography

  • Broesamle, John J. William Gibbs McAdoo: A Passion for Change, 1863-1917. National University Publications, Kennikat Press, Port Washington, N.Y., 1973, ISBN 978-0804690430
  • McAdoo, William G. The Challenge. New York: Century Co., 1928.
  • McAdoo, William G. Crowded Years: The Reminiscences of William G. McAdoo. Houghton Mifflin Company, 1931, ASIN B000OALAE6
  • McKinney, Gordon B. "East Tennessee Politics: An Incident in the Life of William Gibbs McAdoo, Jr." East Tennessee Historical Society’s Publications 48 (1976): 34-39.
  • Synon, Mary. McAdoo, the Man and His Times: A Panorama in Democracy. Indianapolis: Bobbs-Merrill Co., 1924.

References

Search Wikisource Wikisource has original works written by or about: William Gibbs McAdoo
  1. ^ a b 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"
  2. ^ TSHA Online - Texas State Historical Association - Home at www.tshaonline.org
  3. ^ Imjort, et al. (August 22, 1938). California's McAdoo . Time
  4. ^ Shook, Dale N. William G. McAdoo and the Development of National Economic Policy, 1913-1918. NY: Garland Publishing, 1987.
  5. ^ Staff report (February 26, 1913). FOUR MEN CERTAIN IN WILSON CABINET; Bryan, McAdoo, Burleson, and Daniels Accept -- Walker for Attorney General. New York Times
  6. ^ Staff report (March 6, 1913). CABINET MEMBERS SWORN.; McReynolds, Houston, and McAdoo Take Oath of Office . New York Times
  7. ^ 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
  8. ^ Staff report (December 23, 1946). M'ADOO'S DAUGHTER FOUND IN COMA, DIES. New York Times
  9. ^ a b c 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 978-0691127477
  10. ^ Pietruza, David. 1920: The Year of the Six Presidents. Carroll & Graf Publishers, ISBN 0786716223
  11. ^ Bagby, Wesley M. “William Gibbs McAdoo and the 1920 Democratic Presidential Nomination.” East Tennessee Historical Society’s Publications 31 (1959): 43-58.
  12. ^ Allen, Lee N. “The McAdoo Campaign for the Presidential Nomination in 1924.” Journal of Southern History 29 (May 1963): 211-28.
  13. ^ Gelbart, Herbert A. “The Anti-McAdoo Movement of 1924.” Ph.D. dissertation, New York University, 1978.
  14. ^ Stratton, David H. “Splattered with Oil: William G. McAdoo and the 1924 Democratic Presidential Nomination.” Southwestern Social Science Quarterly 44 (June 1963): 62-75.
  15. ^ Prude, James C. “William Gibbs McAdoo and the Democratic National Convention of 1924.” Journal of Southern History 38 (November 1972): 621-28.
  16. ^ Staff report (July 18, 1934). Eleanor Wilson McAdoo Divorces Senator At Five-Minute Hearing on Incompatibility.New York Times
  17. ^ 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
  18. ^ Staff report (September 23, 1935). No. 3 for McAdoo. Time
  19. ^ 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
  20. ^ Staff report (February 10, 1941). Footnote to History. Times
  21. ^ TSHA Online - Texas State Historical Association - Home at www.tshaonline.org

External links

Political offices
Preceded by
Franklin MacVeagh		 United States Secretary of the Treasury
Served Under: Woodrow Wilson
March 6, 1913 – December 15, 1918		 Succeeded by
Carter Glass
United States Senate
Preceded by
Samuel M. Shortridge		 United States Senators from California
March 4, 1933 – November 8, 1938		 Succeeded by
Thomas M. Storke
Awards and achievements
Preceded by
Anthony Fokker		 Cover of Time Magazine
7 January 1924		 Succeeded by
Bishop William Lawrence
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Britannica Concise Encyclopedia. Britannica Concise Encyclopedia. © 2006 Encyclopædia Britannica, Inc. All rights reserved.  Read more
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