McDonald was born near Lock Haven, Pennsylvania on April 10, 1832; he attended Dickinson Seminary, in Williamsport, and Lewisburg University. In 1857 he moved to Kansas and became involved in business, serveing in the Union Army during the Civil War. Upon completion of his service McDonald grew interested in banking in Arkansas (in 1863), finally settling in Little Rock. He served as a member of the state's constitutional convention; upon readmission to the Union he was elected to the Senate in 1868, serving only one term before being defeated for reelection in 1870. McDonald was later commissioned by Chester A. Arthur to examine the conditions of portions of the Northern Pacific Railroad, which duty he discharged in 1885. Later in his career he became interested in the development of railroads, moving to New York City in 1900. McDonald died in Norwood Park, New York on December 13, 1903; his body was returned to Lock Haven for burial.