G. William Miller, 81; Ex-Fed Chair, Carter’s Secretary of the Treasury

G. William Miller, a former Federal Reserve chairman who as Treasury secretary during the Carter administration directed the Chrysler Corp. bailout but could not beat back inflation, has died. He was 81.

Miller, who had suffered from a lung ailment, died Friday at his home in Washington, D.C., said Michael H. Cardozo, managing director of Miller’s Washington-based merchant banking firm and a former White House counsel for President Carter.

Carter plucked Miller from the business world in 1978 to replace Arthur F. Burns as chairman of the Federal Reserve Board. The next year Carter named Miller to replace W. Michael Blumenthal as Treasury secretary, making Miller the only person to have guided both the nation’s central bank and the Treasury Department.

Miller was considered ineffectual as Fed chairman, serving one of the shortest tenures in the board’s history, and he received mixed reviews as Treasury secretary as inflation ran rampant in the late ‘70s.

Though a capable manager of the Treasury Department and the administration’s point of view on economic matters, he was seen neither as a policy innovator nor as a potent force against double-digit inflation.

Miller, who supervised the Chrysler Corp. Loan Guarantee Board while serving as Treasury secretary, oversaw the $1.5-billion loan guarantee begun in 1980 that kept the automaker afloat.

At first, he opposed providing more than $750 million in assistance, but Carter and Congress approved the deal, despite fears that the government would be left to pay off private lenders if Chrysler slipped into bankruptcy.

Chrysler recovered financially in the early 1980s and paid off its debts seven years earlier than expected.

The year before he joined the Federal Reserve, Miller was chairman and chief executive of Textron Inc., a conglomerate that registered $2.6 billion in sales.

Miller became the Fed chairman March 8, 1978. His appointment drew praise from the business world, where he was known as a successful executive, and caution from those who questioned his expertise in monetary policy. He had been a director of the Federal Reserve Bank in Boston.

High oil prices, a weak bond market and a falling dollar fueled an economic crisis in 1979, and inflation approached an annual rate of 12%.

Miller agreed to leave the Fed to become Treasury secretary Aug. 6, 1979, with just 18 months remaining in Carter’s term. He was replaced by Paul A. Volcker.

Miller was born March 9, 1925, in Sapulpa, Okla., and grew up in Borger, Texas. He graduated in 1945 from the Coast Guard Academy with a major in marine engineering. He left the Coast Guard in 1949 to study law at UC Berkeley and graduated in 1952.

He joined Rhode Island-based Textron in 1956 and was named a vice president in 1957 and president in 1960. He became Textron’s chief executive in 1968 and its chairman in 1974.

Miller started his merchant banking firm in 1983. Over the years he also served on the boards of numerous companies.

He was chairman and chief executive of Federated Stores Inc. in Cincinnati from 1990 to 1992.

He is survived by his wife, Ariadna; three sisters; and two brothers.