William Gibbs McAdoo , 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.

William Gibbs McAdoo

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). □

MCADOO, WILLIAM GIBBS 1863-1941

Candidate for the democratic presidential nomination, 1920, 1924

Secretary of the Treasury

Born in Georgia during the Civil War, William G. McAdoo received his college education at the University of Tennessee, became a lawyer, and left his native South, at age twenty-nine, for opportunities in New York, where he developed considerable experience as an attorney of high finance. Although never elected to public office, McAdoo's political activism began when he worked in Woodrow Wilson's 1910 campaign for governor of New Jersey and continued through Wilson's successful presidential bid in 1912. After winning the presidency Wilson appointed McAdoo as secretary of the treasury because the New York lawyer had financial expertise but was not tainted by Wall Street connections. McAdoo's most important responsibility was financing the war, a duty that ultimately made the treasury secretary unpopular with progressives when he endorsed a tax plan that drew heavily upon middle- and lower-class incomes. Overburdened by the stresses associated with his wartime responsibilities, McAdoo resigned his cabinet office when the European conflict ended.

Presidential Aspirations, 1920

Since McAdoo was Woodrow Wilson's son-in-law and secretary of the treasury, many anticipated that he would become Wilson's political successor. But McAdoo, along with other Democratic hopefuls, fell victim to Wilson's indecisiveness regarding his own thirdterm candidacy. Without Wilson's endorsement, McAdoo hesitated to declare his intentions to seek the nomination. While privately McAdoo solicited support for himself, publicly he remained quiet about the idea. McAdoo's name, however, was placed in nomination at the Democratic convention in 1920, and he remained in the balloting until a fellow progressive, Ohio governor James Cox, won the presidential nomination on the forty-fourth ballot.

Advocate of Rural, Dry Forces

The 1920 loss did not end McAdoo's aspirations for the presidency. As part of his strategy for 1924, McAdoo, realizing he could never win the support of the New York delegation, made California his home. Instead of seeking the eastern urban vote, the former secretary of the treasury opted to pursue a West-South coalition. With his new ties in California and his native roots in the South, the strategy seemed plausible. As an outspoken advocate of Prohibition, McAdoo quickly endeared himself to rural Americans. But once he decided to pursue this course, he inevitably needed to solicit Ku Klux Klan support. McAdoo's acceptance of the Klan's endorsement diminished his appeal to immigrants and progressives, and it helped polarize the Democratic party into rival rural and urban camps. McAdoo's association with Edward L. Doheny, an oil millionaire who bribed Secretary of the Interior Albert B. Fall to lease government oil reserves, further diminished his appeal to progressives.

McAdoo's Defeat

Despite advice to the contrary, McAdoo waged a bitter fight throughout 1924 with New York governor Al Smith. Yet neither man could garner the two-thirds vote needed for the nomination. So following an intense convention struggle, McAdoo, along with Smith, had to capitulate to compromise candidate John Davis. Unwilling or unable to mount another fight against Al Smith, McAdoo ended his quest for the presidency long before the 1928 campaign season began, paving the way for Smith's triumph at the Democratic Convention. McAdoo returned to his private law practice in Los Angeles and served as chairman of the board of the government-owned American President Lines until his death in 1941.

Progressive Career

The 1924 campaign was, in many respects, an aberration from McAdoo's otherwise progressive career. Reactionary forces such as the Klan supported McAdoo generally because he was the only strong rural candidate. He had advocated lower tariffs, federal regulation of American shipping, federal financing of elections, and federal insurance of bank deposits. McAdoo served as a transitional figure between the Progressive reform movement of the early twentieth century and the more government-sponsored reform of the 1930s—the New Deal that Franklin Roosevelt fashioned to address the problems of the Great Depression.

Source:

David Burner, The Politics of Provincialism: The Democratic Party in Transition, 1918-1932 (New York: Norton, 1968).