William McChesney Martin, Jr.
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William McChesney Martin Jr. (December 17, 1906 – July 27, 1998) was an American business executive who served as the 9th
chairman of the Federal Reserve The chair of the Board of Governors of the Federal Reserve System is the head of the Federal Reserve, and is the active executive officer of the Board of Governors of the Federal Reserve System. The chairman presides at meetings of the Board. ...
from 1951 to 1970, making him the longest holder of that position. He was nominated to the post by President
Harry S. Truman Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. As the 34th vice president in 1945, he assumed the presidency upon the death of Franklin D. Roosevelt that year. Subsequen ...
and reappointed by four of his successors. Martin, who once considered becoming a
Presbyterian Presbyterianism is a historically Reformed Protestant tradition named for its form of church government by representative assemblies of elders, known as "presbyters". Though other Reformed churches are structurally similar, the word ''Pr ...
minister, was described by a Washington journalist as "the happy
Puritan The Puritans were English Protestants in the 16th and 17th centuries who sought to rid the Church of England of what they considered to be Roman Catholic practices, maintaining that the Church of England had not been fully reformed and should b ...
".


Early life

William McChesney Martin Jr. was born in St. Louis to William McChesney Martin Sr. and Rebecca Woods. Martin's connection to the
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...
was forged through his family heritage. In 1913, Martin's father was summoned by President
Woodrow Wilson Thomas Woodrow Wilson (December 28, 1856February 3, 1924) was the 28th president of the United States, serving from 1913 to 1921. He was the only History of the Democratic Party (United States), Democrat to serve as president during the Prog ...
and Senator
Carter Glass Carter Glass (January 4, 1858 – May 28, 1946) was an American newspaper publisher and Democratic Party (United States), Democratic politician from Lynchburg, Virginia, Lynchburg, Virginia. He represented Virginia in both houses of United Stat ...
to help write the
Federal Reserve Act The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States. After Dem ...
that would establish the Federal Reserve System on December 23 of that year. His father later served as a governor and then president of the
Federal Reserve Bank of St. Louis The Federal Reserve Bank of St. Louis is one of 12 Federal Reserve System, regional Reserve Banks that, along with the Board of Governors in Washington, D.C., make up the United States' central bank. Missouri is the only state to have two main ...
. Martin graduated from
Yale University Yale University is a Private university, private Ivy League research university in New Haven, Connecticut, United States. Founded in 1701, Yale is the List of Colonial Colleges, third-oldest institution of higher education in the United Stat ...
, where his formal education was in English and Latin rather than finance. However, he still maintained an intense interest in business through his father. His first job after graduation was at the St. Louis brokerage firm of
A. G. Edwards A.G. Edwards, Inc. was an American financial services holding company; its principal wholly owned subsidiary was A.G. Edwards & Sons, Inc., which operated as a full-service securities broker-dealer in the United States and Europe. The firm was a ...
& Sons, where he became a full partner after only two years. From there, Martin's rapid rise in the financial world landed him in 1931 a seat on the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
(NYSE), just two years after the Wall Street crash of 1929 at the outset of the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
. Martin pursued graduate study in
Economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...
at
Columbia University Columbia University in the City of New York, commonly referred to as Columbia University, is a Private university, private Ivy League research university in New York City. Established in 1754 as King's College on the grounds of Trinity Churc ...
from 1931 to 1937; however, he did not receive a degree. During the early part of that decade, Martin's work towards increasing regulation of the stock market led to his election to the NYSE's board of governors in 1935. There, he worked with the
U.S. Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...
(SEC) to reestablish confidence in the stock market and prevent future crashes. He eventually became president of the New York Stock Exchange at age 31, leading newspapers to label him the "boy wonder of Wall Street." During his presidency, Martin worked with the SEC on regulatory measures for the stock exchange. During
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
he was drafted into the
United States Army The United States Army (USA) is the primary Land warfare, land service branch of the United States Department of Defense. It is designated as the Army of the United States in the United States Constitution.Article II, section 2, clause 1 of th ...
as a private and rose to the rank of colonel. While in the service, he supervised the disposal of raw materials on the Munitions Allocation Board. He was also a liaison between the Army and
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
, as well as the supervisor of the
lend-lease program Lend-Lease, formally the Lend-Lease Act and introduced as An Act to Promote the Defense of the United States (),
with the
Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...
.


Career


Director of the Export-Import Bank

Martin's return to civilian life was also a return to the financial world, but this time it was in the Federal government.
Harry S. Truman Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. As the 34th vice president in 1945, he assumed the presidency upon the death of Franklin D. Roosevelt that year. Subsequen ...
, a fellow
Democrat Democrat, Democrats, or Democratic may refer to: Politics *A proponent of democracy, or democratic government; a form of government involving rule by the people. *A member of a Democratic Party: **Democratic Party (Cyprus) (DCY) **Democratic Part ...
, appointed Martin director of the Export-Import Bank, which he operated for three years (1946–1949). It was at this institution that he was publicly viewed as a "hard banker." He insisted that loans be sound, secure investments; on that principle he opposed the
State Department The United States Department of State (DOS), or simply the State Department, is an executive department of the U.S. federal government responsible for the country's foreign policy and relations. Equivalent to the ministry of foreign affairs o ...
on multiple occasions for making loans that he saw as being politically motivated. On those grounds he would not permit the Export-Import Bank to be used as a fund for international relief. Martin left the Export-Import bank when he was summoned to the
Treasury A treasury is either *A government department related to finance and taxation, a finance ministry; in a business context, corporate treasury. *A place or location where treasure, such as currency or precious items are kept. These can be ...
to serve as assistant secretary for monetary affairs. Martin served at the Treasury for about two years when its conflict with the Federal Reserve Board reached its climax. During the period immediately preceding the final negotiations with the Fed, Secretary of the Treasury
John W. Snyder John Wesley Snyder (June 21, 1895 – October 8, 1985) was an American businessman and senior federal government official. Thanks to his close personal friendship with President Harry S. Truman, Snyder was appointed Secretary of the Treasury dur ...
was hospitalized. In this situation, Martin became the chief negotiator for the Treasury. From the Treasury's perspective, Martin was a valuable representative, for he had a thorough understanding of the Federal Reserve System and of financial markets. Furthermore, he was viewed as an ally of Truman, who strongly opposed the Fed's independence. During negotiations, Martin re-established communication between the Treasury and Fed, which had been forbidden by Snyder.


Chairman of the Federal Reserve Board

With Robert Rouse, Woodlief Thomas, and Winfield Riefler of the Fed, Martin negotiated the
1951 Accord The United States Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913. Central banking prior to the Federal Reserve The Federal Reserve System is the third central banking system in U ...
. The
Federal Open Market Committee The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System (the Fed) that is charged under United States law with overseeing the nation's open market operations (e.g., the Fed's buying and selling of United Stat ...
(FOMC) and Secretary Snyder accepted the Accord, and it was approved by both institutions. The chairman of the Board of Governors at the time of ratification was
Thomas B. McCabe Thomas Bayard McCabe (July 11, 1893 – May 27, 1982) 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. Background ...
(1893–1982), who would officially resign from his position just six days after the statement of the Accord was released. The Truman Administration viewed McCabe's resignation as an opportunity to influence Federal Reserve leadership. Truman appointed Martin to serve as the next chairman of the Board of Governors, and the
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
approved his appointment on March 21, 1951. Contrary to Truman's expectations, however, Martin guarded the Fed's independence, not just through Truman's administration but also through the four succeeding administrations. To the present day, his term as chairman is the longest term in the history of the Fed. For nearly two decades, Martin would achieve global recognition as the world's most important central banker. He was able to pursue independent monetary policies while still paying heed to the desires of various presidential administrations. Martin's monetary policies aimed at achieving low inflation and economic stability through a comprehensive analysis of multiple economic indicators (an example of
oversimplification The fallacy of the single cause, also known as complex cause, causal oversimplification, causal reductionism, root cause fallacy, and reduction fallacy, is an informal fallacy of questionable cause that occurs when it is assumed that there is a si ...
) and instead made policy decisions by examining a wide array of economic data. As chairman, he institutionalized this strategy in the proceedings of the FOMC, gathering the opinions of all governors and presidents within the System before making decisions. As a result, his decisions were often supported by unanimous votes on the FOMC. The task of the Federal Reserve, he famously said, is "to take away the punch bowl just as the party gets going," that is, raise interest rates just when the economy reaches peak activity after a recession. Martin was designated as administrator of the Emergency Stabilization Agency, an initiative established by
President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university *President (government title) President may also refer to: Arts and entertainment Film and television *'' Præsident ...
Dwight D. Eisenhower Dwight David "Ike" Eisenhower (born David Dwight Eisenhower; October 14, 1890 – March 28, 1969) was the 34th president of the United States, serving from 1953 to 1961. During World War II, he was Supreme Commander of the Allied Expeditionar ...
in 1958 that would serve in the event of a national emergency, and that became known as the Eisenhower Ten. After the presidential election of 1960, Republican Party candidate
Richard Nixon Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 until Resignation of Richard Nixon, his resignation in 1974. A member of the Republican Party (United States), Republican ...
blamed his defeat on Martin's tight-money policies. Martin was elected to the
American Academy of Arts and Sciences The American Academy of Arts and Sciences (The Academy) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, and other ...
in 1963 and the
American Philosophical Society The American Philosophical Society (APS) is an American scholarly organization and learned society founded in 1743 in Philadelphia that promotes knowledge in the humanities and natural sciences through research, professional meetings, publicat ...
in 1972. In 1966 he underwent successful prostate surgery. Martin was often viewed as a key decision-maker at the Fed, although some have debated the extent of his influence. Throughout his tenure, he defended the right of the Fed to take actions that would sometimes conflict with presidential goals. He regularly asserted that the Fed is responsible to the
US Congress The United States Congress is the legislature, legislative branch of the federal government of the United States. It is a Bicameralism, bicameral legislature, including a Lower house, lower body, the United States House of Representatives, ...
and not to the White House. Richard Nixon anticipated Martin's resignation at the beginning of his administration in 1969, but Martin chose to remain in his post. Pursuing a tight-money policy to suppress inflation, by mid-1969 Martin ran afoul of Nixon's concern that the Fed was in danger of pushing the nation into economic recession, a belief that had been publicly stated by conservative economist
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
. At a White House meeting on October 15, 1969, Nixon confronted Martin over his tight-money policy, but Martin declined to yield. Two days later, the White House announced that
Arthur Burns Arthur Frank Burns (April 27, 1904 – June 26, 1987) was an American economist and diplomat who served as the 10th chairman of the Federal Reserve from 1970 to 1978. He previously chaired the Council of Economic Advisers under President Dwight ...
would replace Martin as chairman of the Federal Reserve on Feb. 1, 1970. Martin ended his tenure as chairman of the Board of Governors on January 30, 1970. After his tenure at the Federal Reserve, Martin held directorships in various corporations and nonprofit organizations, such as the
Rockefeller Brothers Fund The Rockefeller Brothers Fund (RBF) is a philanthropic foundation created and run by members of the Rockefeller family. It was founded in New York City in 1940 as the primary philanthropic vehicle for the five third-generation Rockefeller brothe ...
. Martin was an avid tennis player who played tennis nearly every day on the tennis court located outside the Federal Reserve Board Building in
Washington, D.C. Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and federal district of the United States. The city is on the Potomac River, across from Virginia, and shares land borders with ...
Martin would go on to serve as president of the National Tennis Foundation and chair of the International Tennis Hall of Fame after retiring from the Federal Reserve. He died of a
heart attack A myocardial infarction (MI), commonly known as a heart attack, occurs when Ischemia, blood flow decreases or stops in one of the coronary arteries of the heart, causing infarction (tissue death) to the heart muscle. The most common symptom ...
at his home in Washington, D.C., on July 28, 1998, at the age of 91.


Legacy

The 1974 Federal Reserve Annex next to the
Eccles Building The Marriner S. Eccles Federal Reserve Board Building houses the main offices of the Board of Governors of the Federal Reserve#Board of Governors, Board of Governors of the United States' Federal Reserve System. It is located at the intersection ...
is named for him.


See also

*
History of the United States (1945–1964) The history of the United States from 1945 to 1964 was a time of high economic growth and general prosperity. It was also a time of confrontation as the capitalist United States and its allies politically opposed the Soviet Union and other commu ...
*
History of the United States (1964–1980) The history of the United States from 1964 to 1980 includes the climax and end of the Civil Rights Movement; the escalation and ending of the Vietnam War; the drama of a generational revolt with its sexual freedoms and use of drugs; and the cont ...
*
Bretton Woods system The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia, after the 1944 Bretton Woods Agreement until the ...


References


Further reading

* ''Portions of this article are based on
public domain The public domain (PD) consists of all the creative work to which no Exclusive exclusive intellectual property rights apply. Those rights may have expired, been forfeited, expressly Waiver, waived, or may be inapplicable. Because no one holds ...
text from th
Federal Reserve Bank of Richmond
'. * * *


External links

*Digital collection of documents from th
William McChesney Martin Jr. Papers
at the
Missouri History Museum The Missouri History Museum in Forest Park, St. Louis, Missouri, showcases Missouri history. It is operated by the Missouri Historical Society, which was founded in 1866. Museum admission is free through a public subsidy by the Metropolita ...

Statements and Speeches of William McChesney Martin Jr.Calendar of William McChesney Martin Jr.
from his time as chairman of the Board of Governors of the Federal Reserve System
William McChesney Martin
at
International Tennis Hall of Fame The International Tennis Hall of Fame is located in Newport, Rhode Island, United States. It honors both players and other contributors to the sport of tennis. The complex, the former Newport Casino, includes a museum, 13 grass tennis courts, an ...
{{DEFAULTSORT:Martin, William McChesney Jr. 1906 births 1998 deaths American bankers Burials at Bellefontaine Cemetery 20th-century American businesspeople Businesspeople from St. Louis Chairs of the Federal Reserve Columbia Graduate School of Arts and Sciences alumni Eisenhower administration personnel International Tennis Hall of Fame inductees Lyndon B. Johnson administration personnel Kennedy administration personnel Nixon administration personnel Presidents of the New York Stock Exchange Truman administration personnel Yale University alumni Members of the American Philosophical Society Mary Institute and St. Louis Country Day School alumni