Gates White McGarrah was born on July 20, 1863, on a farm near Monroe, New York. He was the oldest child in a family of two sons and one daughter of Theodore and Mary Abbott (Pearsall) McGarrah. His father, whose Scottish ancestors had come to America about 1781, ran a general store.
Young McGarrah was educated in public schools in Monroe and Cortland, New York.
McGarrah began his banking career in 1881, as a floor sweeper in the Goshen (N. Y. ) National Bank. In 1883, he moved to New York City as a clerk with the Produce Exchange Bank, becoming receiving teller in 1884 and assistant cashier in 1892. He became cashier of the Leather Manufacturers National Bank in 1898 and president in 1902. In succeeding years he was one of the pioneers in the bank merger movement that reached its peak in the late 1920's. In 1904, the Leather Manufacturers united with the Mechanics National Bank, with McGarrah as president. In 1910, he became president of the newly merged Mechanics and Metals National Bank and in 1922 chairman of its board. In the same year he was elected a "Class A" director (one of the directors representing the banking community) of the New York Federal Reserve Bank, serving from 1923 to 1926. In the spring of 1926, in one of the most spectacular mergers of the era, the Chase National Bank absorbed the Mechanics and Metals, thus becoming the second largest bank in the country, and McGarrah was made chairman of the executive committee of the new combination. In May 1927, McGarrah resigned from the Chase to accept appointment by the federal government as one of the three "Class C" (or public) directors and chairman of the board of the New York Federal Reserve Bank. Meanwhile, in August 1924, he had become the American member of the advisory council of the German Reichsbank and in the following month a member of the Reparations Commission set up under the Dawes Plan. When the Young Plan established the Bank for International Settlements to clear reparations and interallied debt payments and to assist in the international flow of capital, McGarrah, after being recommended by a group of American private bankers, resigned from the New York Federal Reserve Bank to become, in Febrary 1930, one of the two American directors of the international bank. Two months later he was elected its president. Although for various reasons (among them isolationist sentiment in the United States and the reluctance of the American government to recognize the relationship between German reparations and Allied war debts) McGarrah had to pose as the unofficial representative of the American banking community, for all practical purposes he represented the United States government.
He resigned from the presidency in May 1933, although he remained for two more years a member of the bank's board of directors. A leader of the financial community, McGarrah was a member of the New York Clearing House Loan Commission during the panic of 1907, chairman of the Bankers Committee to stabilize the money market at the outbreak of World War I, and president of the Clearing House Association in 1917-19. At one time or another, he was a director of more than a dozen industrial, insurance, and banking companies, including Albert H. Wiggin's Shermar Corporation, which achieved a somewhat unsavory reputation as a result of the Senate banking investigation of 1932.
Following his resignation from the Bank for International Settlements he devoted himself to handling his own financial affairs. He died in New York City of pneumonia and was buried in Goshen, New York.
McGarrah was the most distinguished banker to come from Orange County. McGarrah was one of the founders of the American Institute of Banking and is a past president of the New York Clearing House Association. He was the first president of the Bank for International Settlements in Basil Switzerland from 1930 to 1933.
Gates was active in the Dutch Reformed Church, although he was originally a Presbyterian.
In politics he was a Republican.
His ideas were those of an orthodox banker of the 1920's. He opposed economic nationalism, political interference with central banking, cheap money, and security affiliates of commercial banks. He always supported the gold standard. During the depression he advocated balancing the budget and favored raising revenue by levying sales taxes.
Quotations: "There is no wizardry in finance. The only foundation for success is patience, hard work, and good friends. "
As the first president of the Bank for International Settlements he did an able job of setting its course and expanding its functions.
Once described as a "massive, granite-jawed financier of the old school", McGarrah was strong-willed, close-mouthed, and, in business dealings, rather forbidding, though personal friends found him warm-hearted. His recreations were travel and reading.
In 1886, McGarrah married Elizabeth Wallace of Goshen. They had two daughters, Marion Lavinia and Helen.
