
Thomas McCabe
8th chairman of the Federal Reserve
Education
- Bachelor's degree - 1915
- doctoral degrees -
Overview
Thomas Bayard McCabe was an American businessman who served as the 8th chairman of the Federal Reserve from 1948 to 1951. McCabe also served as president and CEO of Scott Paper Company for 39 years.
Federal Reserve and government service :
In 1937, McCabe joined the Federal Reserve Bank of Philadelphia as a class C director, followed by his appointment as chairman of that Reserve Bank’s board of directors in 1939. During his tenure the institution took an increasingly active role in local affairs as part of the national system. McCabe leaned toward decentralization and away from the highly centralized philosophy that marked the federal government during the previous 15 years. His philosophy was in a strong local government. He felt that without healthy local business units there could be no overall national strength. McCabe called for cooperation between management, labor, and government as it means to combat inflation. He urged a cut in the federal debt as a step that should precede tax reduction, and he leaned toward a policy of credit contraction and saving as primary means of curtailing the inflation spiral. He was intensely interested in extending aid to foreign nations, being administered by one man who would report directly to the President. McCabe thought that the unification of American, British and French commands in Europe were necessary to rehabilitate Europe after World War II.
During World War II, McCabe took leave from Scott and worked for the Franklin D.Roosevelt administration. In 1941–42 he served as deputy administrator of the Lend-Lease program. During 1944–45 he served as deputy director of the division of priorities of the Office of Production Management also known as the War Production Board (WPB). He became commissioner of Army-Navy liquidation in 1945; and served as a member of the Department of Commerce’s Business Advisory Council. In 1946, he was awarded the Medal for Merit, the highest civilian honor at the time.
In 1948, two years after McCabe had returned to Scott, President Harry Truman appointed him to be the 8th Chairman of the Federal Reserve Board of Governors. He served from April 15, 1948 – March 31, 1951. McCabe took another leave of absence from Scott to serve in this position. As Fed chairman, McCabe supported a strong and independent Federal Reserve System.
When a dispute arose between the Federal Reserve and the US Treasury over interest rate policy and credit restraint in 1949–50, McCabe participated in the committee Truman created to hammer out a compromise. The agreement, known as the Treasury-Fed Accord, also known as the 1951 Accord was reached on March 3, 1951. His leadership was instrumental in establishing a firm opposition to the restrictive rate pegging policies that were being imposed on the Fed by the Treasury. The accord laid the foundations for the monetary policy the Fed pursues today. After resigning from the Board, McCabe returned to the private sector.
The youngest of five children, Thomas Bayard McCabe was born on July 11, 1893, to William Robbins McCabe and Beulah Whaley in Whaleyville, Maryland. According to family records, his paternal ancestors were early pioneers of Selbyville, Delaware, dating as far back as the late 1700s. By 1837, Thomas's great-great-great grandfather, Arthur McCabe, owned what was then all of Selbyville. His grandfather, William S. McCabe was involved in the local mercantile business for over 50 years.
When McCabe's father came of age, the firm William S. McCabe & Son was formed and became one of the leading business firms in Sussex County, Delaware. His father later founded and served as the first president of the Selbyville Bank as well as a banking and insurance commissioner for the State of Delaware in the early 20th century. He was an early advocate of the Federal Reserve System. Family records state that several generations of McCabe's mother's maternal and paternal ancestors were early settlers of Maryland and Delaware, on the Delmarva Peninsula. He was awarded the Vermilye Medal in 1963, which is given to individuals who have leadership in business and industry in the industries of science and technology.
Early Life
Thomas McCabe born on July 11, 1893
McCabe attended preparatory school at Wilmington Conference Academy (now called Wesley College) in Dover, Delaware, from 1907 to 1910. Following graduation from WCA, he entered Swarthmore College, where he studied economics, graduating in 1915 with an associate bachelor's degree. While attending Swarthmore, he joined the fraternity Delta Upsilon, as well as the Book & Key secret society. In addition, he held honorary doctoral degrees from 15 colleges and universities
McCabe and Jeannette Everett Laws were married on March 1, 1924. Family records show that they had three sons: Thomas B. McCabe Jr (1926-1977), Richard Whaley McCabe (1932-2006), and James Laws McCabe (1943-).
McCabe also served as President of The Union League of Philadelphia in 1962.
Career
- Federal Reserve - 8th chairman