John Passos - Mr. Wilson's War

Sunday morning, when the newsboys were yelling “Belgium Invaded” through the rainwet streets, Mac, as he was known to the Wilson family, went early to his office at the Treasury, while Eleanor rushed to the White House to be near her dying mother. President Woodward of the Hanover National, who had been appointed one of the directors of the Federal Reserve Bank which was scheduled to open in the fall, called McAdoo from New York. The Clearing House Committee was in session and wanted his advice. McAdoo suggested that they come to Washington, but was told there wasn’t time. They expected a run on their banks when they opened for business Monday morning. They needed millions in extra currency if they were to hold off a disastrous panic. McAdoo said he would have to consult the President.

All Woodrow Wilson knew about finance was what he had learned during his campaign for the enactment of the Federal Reserve Act. He had confidence in his soninlaw’s financial acumen. He told him by all means to go to New York immediately. The Secretary had already taken the initiative by shipping fifty million dollars of the new currency he was authorized to use in emergencies to the subtreasury in New York. Taking Eleanor along to keep his spirits up he left on the afternoon train.

Having Mac in the family and in the administration was proving a real boon to the sorely beset man in the White House. McAdoo’s success with the Hudson tunnels had won him prestige among New York businessmen. They believed that his hunches were sound. A dourfaced sixfooter, his stringy mountaineer look had endeared him to the Wilsons. Ellen, whose shrewd feminine judgments the President had come to rely on more and more, had taken to him with real affection as a soninlaw.

He was the Wilsons’ kind of man. He came of similar Southern Presbyterian stock. His father, another very tall man, was a Tennessee lawyer who had fought in the Mexican War and served as attorney general of his state. When Tennessee, against the wishes of so many of her citizens, seceded from the Union, he took the Confederate side.

Mac’s boyhood was spent in Milledgeville, Georgia, in the ruined heartland of the Confederacy. As a Confederate officer his father was disfranchised and barred from the practice of law. There were seven children and no money. He tried farming and smalltown journalism. When his mother was paid fifty dollars for a novel she wrote about gentlefolk among the magnolias, Mac remembered that the money was spent in a single day buying shoes and clothes for the family.

When Mac’s father was offered fifteen hundred dollars a year to teach history and English at the University of Tennessee it seemed like opulence. It was a chance for the children to get some education. The elder McAdoos were cultivated people, full of a literary nostalgia that made it hard for them to fight their way in the harsh reconstruction world. When young William Gibbs went to bed, worn out with fights at school, and selling papers and doing odd jobs for storekeepers, he dreamed of money.

He started to study law as deputy clerk in the United States District Court in Chattanooga and reading nights with a friendly attorney. He was a hard worker with a mind fertile in expedients. By the time he was admitted to the bar at twentyone he had tried his hand at Democratic national politics and dabbled in various speculations and investments. He married a Georgia girl and immediately started to make money buying and selling Chattanooga real estate.

He risked his first twentyfive thousand in a project to apply electric power to the muledrawn streetcars of Knoxville. It was a little too soon for rapid transit. The company went into receivership and young McAdoo, who had accumulated mostly debts for his pains, went north to hang out his shingle in downtown New York.

It was a long hard struggle. When the lawbusiness was slack he sold bonds and securities. He studied railroad finance. He got the notion of bringing railroad trains into New York by tunnelling under the North River. One company had already gone broke, but a tunnel had been built halfway across about ten years before. He started promoting a company to finish that tunnel. He had a knack of convincing other men that his hunches were sound. By the time Woodrow Wilson became governor of New Jersey the tunnels were completed and profitable. William Gibbs McAdoo had become one of the great names of American enterprise.

Mac first met Woodrow Wilson when he went to Princeton to see his collegeboy son who was laid up with diphtheria at the infirmary. He was captivated by what he called Wilson’s Jeffersonian humanism.

Mac was a born promoter. There wasn’t much left to do in promoting the Hudson River tunnels so he took to promoting Woodrow Wilson. His promotion was so successful that he found himself promoting the United States Treasury.

In his autobiography McAdoo tells of pestering his father, when he was a tenyearold boy, to tell him exactly how many polecats Vera Cruz smelt like when the United States troops landed there in the Mexican War. His father had told him Vera Cruz smelt worse than a crowd of polecats. “Did it smell worse than a thousand million polecats?” “Listen son,” his father had said to him, “you have a bad habit of dealing with uncomfortably large figures.”

When as Secretary of the Treasury on August 2, 1914, he sat with his wife in the drawing room of the New York train, faced with a panic that might wreck half the banks in the country, Mac was jotting down on a yellow pad propped on his knees what his father would have called “uncomfortably large figures.”

Years afterwards Mrs. McAdoo remembered the haggard look of the financiers that met their train at the Pennsylvania Station. “I was startled by their white faces and trembling voices,” she wrote. “Could these be America’s great men?”

The Secretary of the Treasury was hustled over to the Vanderbilt Hotel where a group of bankers was anxiously awaiting him. McAdoo with his long stride and his selfassured somewhat rustic manner, exuded confidence. The news that fifty million dollars in fresh currency was already in New York quieted the bankers’ nerves, but they complained its use was restricted by the present law. New legislation was needed. No sooner said than done. By midnight McAdoo was back on the sleeper to Washington sketching out the necessary bill on his yellow scratchpad.

At breakfast he brought the President up to date. At his news conference that morning Wilson took the reporters into his confidence with the friendly reasoning man to man tone he could assume when he needed to: “It is extremely necessary … that you should be extremely careful not to add in any way to the excitement … So far as we are concerned there is no cause … America is absolutely prepared to meet the financial situation and to straighten everything out without any material difficulty. The only thing that can possibly prevent it is unreasonable apprehension and excitement … I know from … the Secretary of the Treasury … that there is no cause for alarm. There is cause for getting busy and doing the thing in the right way …”

While Woodrow Wilson transmitted soothing balm to the press of the nation McAdoo hurried to the Capitol to confer with the chairman of the Senate committee on banking. Senator Owen of Oklahoma was a member of the team that had put over the Federal Reserve Act. He understood immediately that what was needed was stopgap legislation to tide over until the reserve system was operating. The Treasury must be authorized to increase the amount of emergency currency issued under the Aldrich-Vreeland Act. Congress, under his direction, “did the thing in the right way” so expeditiously that the bill went through both houses and was at the White House ready for signature on the following day.