McAdoo was a member of Wilson’s cabinet from 1913-1918 and also his son-in-law, marrying Wilson’s youngest daughter—Eleanor--in 1914.

McAdoo was born in Marietta, Georgia but spent most of his childhood in Milledgeville in central Georgia, later moving to Knoxville, Tennessee. In 1882 he left his studies at the University of Tennessee and accepted a position as deputy clerk of the U.S. Circuit Court in Chattanooga. Subsequently passing the bar, McAdoo helped promote a local section of a proposed rail line and became a lawyer for the Richmond and Danville Railroad. In 1889 he made his first efforts at developing a railway BY investing his entire savings in the reorganized Knoxville Street Railway Company, and he served as its president. McAdoo built the company into one of the first electrified city railways but he stretched his financial resources too far and the line went into receivership in 1892.

McAdoo moved his family to New York City and started selling railroad bonds. He daily rode the over-crowded ferries shuttling commuters across the Hudson River into Manhattan. When McAdoo discovered that a half-finished railway tunnel lay abandoned underneath the river he realized that he had an opportunity to extend a commuter railway into the city. In 1901 he started his fight to revive the Hudson tunnel project which had been abandoned in 1892 when the Hudson Tunnel Railroad Company ran out of money. After 8 years and 70 million dollars, McAdoo’s twin tunnels under the river opened to connect a subway to the midtown lines. The success of the "McAdoo Tunnels" established him as one of the financial and political leaders of the city.

As the new president of the Hudson and Manhattan Railway Company, McAdoo earned a reputation for progressive management of a public utility. Adopting the policy "the public be pleased” as opposed to "the public be damned," McAdoo sacrificed high profits for steady growth and even instituted equal pay for male and female employees--virtually unheard of in a time when women were not yet allowed to vote. As a result, McAdoo made the Hudson and Manhattan a showcase for safe, efficient, and progressive operation of a public utility.

McAdoo became an active supporter of Woodrow Wilson’s 1910 New Jersey gubernatorial election and in 1912 was one of the leaders of Wilson’s presidential campaign. Once elected, Wilson offered him a cabinet position as Secretary of the Treasury, which McAdoo accepted. He won Senate approval in spite of financial community concerns about his progressive record.

McAdoo soon had a more personal tie to Wilson. McAdoo’s first wife, Sarah Houstoun Fleming, had died in 1912. In 1913 the fifty year old McAdoo began courting twenty-three year old Eleanor Wilson, the president’s youngest daughter. They married in a White House ceremony in 1914 and had two children. Neither Wilson nor his wife Ellen were thrilled about their youngest daughter marrying an older widower with six children, but they respected “Mac” and trusted Eleanor’s judgment and so gave the union their blessing.

As Wilson’s Secretary of the Treasury, McAdoo oversaw a revolution in the management of the nation's money supply as well as a dramatic increase in the economic power of the federal government. Tariff reform, banking regulation, and a personal income tax were part of Wilson’s New Freedom program designed to deliver the country from the grip of monopoly. McAdoo was also a major architect of the Federal Reserve System and chose the cities that would host the Federal Reserve banks. He also promoted a federal farm loan program aimed at protecting the nation's agricultural mortgages. However, with Wilson’s acquiescence, McAdoo was one of several cabinet secretaries that introduced Jim Crow laws into their department segregating black employees and often moving them into less desirable job. Along with the Post Office, the Treasury became one of the most segregated federal agencies.

During World War I, McAdoo's coordinated vital loans to the European powers. He also was in charge of creating and promoting the very successful Liberty Loan campaigns, generating almost $17 billion for the war effort from the American public in less than two years. In 1918, the nation's railroad system threatened to grind to a halt under the strain of the wartime economy. Wilson approved a temporary government takeover of the railways and appointed McAdoo as Director General. McAdoo successfully coordinated a maze of different lines, eliminated the backlog of shipments, and even increased wages and improve working conditions for railway employees.

After six years of hard work McAdoo was physically exhausted and worried about his personal finances, especially with two young children. Family obligations coupled with the expenses of his government position made it difficult for him to live on his official salary. He resigned from the cabinet three days after the signing of the armistice in November 1918 and restarted his legal practice in an effort to rebuild his financial situation. It was during this time that McAdoo, who had become friends with actor Douglas Fairbanks at war bonds rallies, advised Fairbanks, Charlie Chaplin, Mary Pickford and director D.W. Griffith form the new movie company United Artists.

McAdoo’s political ambitions, however, had been wetted by his years in Wilson’s cabinet and in 1920 McAdoo was the presumed front-runner for the 1920 Democratic presidential nomination. McAdoo’s campaign was handicapped because Wilson refused to endorse him as Wilson did not want to be seen as playing favorites, especially for his son-in-law. Moreover, McAdoo was reluctant to actively seek the nomination while Wilson was still in office. As a result, he failed to win nomination in 1920. He also realized that his support for Prohibition made his position in New York untenable so he moved to California and aligned with the progressive wing of the Democratic Party there.

From 1921-1924, while Wilson lived on S Street in Washington, D.C., McAdoo and his family lived in California. However, Eleanor made several visits to see her father and the family made home movies--produced by Douglas Fairbanks--to send to Wilson. When Wilson fell ill in late January 1924 McAdoo and Eleanor rushed back to Washington via train, but arrived after Wilson had passed away.

In 1924, McAdoo was again the front-runner for the Democratic nomination as an avid prohibitionist and as an opponent of the financial and political strength of Wall Street. This latter effort suffered when the public learned he had performed legal work for Edward Doheny, a California oilman implicated in the Teapot Dome oil scandal during the Harding Administration. A congressional investigation revealed that Doheny had given a $100,000 bribe to Harding’s Secretary of the Interior Albert Fall in exchange for leases to government oil fields. Fall went to jail and Doheny’s reputation was ruined. McAdoo was also tainted by the Ku Klux Klan, in part because of his segregation of the Treasury Department and because he refused to disavow the Klan fearing it would alienate his southern base of political support. As a result, the 1924 Democratic Convention deadlocked between McAdoo and New York Governor Alfred Smith. John W. Davis was finally chosen as a compromise candidate who went on to lose the election to Republican Calvin Coolidge.

In 1932 McAdoo revived his political career by winning election as Senator from California and was a strong supporter of Franklin Roosevelt. During this term he severed his personal ties to the Wilson family by having an affair and divorcing Eleanor Wilson in 1934. In 1935 he married Doris Cross. They had no children. McAdoo was defeated for reelection in 1938. He died in Washington, D.C. in 1941 and is buried in Arlington National Cemetery.