Were his feelings [regarding antisemitism] known when he was appointed?
Most likely not, at least in was not widely known to an extent that it would be known by other important political figures at the time of his nomination and appointment: we can infer this from the support he received for his appointment as Attorney General from eminent Jewish lawyer (and future fellow associate Justice) Louis D. Brandeis, just one year before McReynolds's appointment to the Supreme Court.
His reputation as a “trust buster” eventually won him [McReynolds] the attention of President Woodrow Wilson, who named McReynolds Attorney General of the United States in 1913, after he had engaged in another short stint of practicing law in New York. Perhaps to his later regret, Louis D. Brandeis, then a Boston lawyer who had been rejected for the post himself, supported the nomination.
Brandeis had met McReynolds during the tobacco trust litigation. “I have the highest opinion of his ability and character and should think the country would indeed be fortunate to have him fill the position of Attorney General,” Brandeis wrote to another lawyer at the time. To McReynolds himself, Brandeis wrote, “In deciding upon you for Attorney General President Wilson has made the wisest possible choice. Your record in trust prosecutions will assure the country that the President’s trust policy will be carried out promptly and efficiently, and business be freed at last.”
McReynolds had not yet displayed his feelings of anti-Semitism toward Brandeis. But his treatment of Brandeis would not be so kind when the two eventually sat together on the Court for twenty-three years.”
Wilson found McReynolds to be a difficult person as an Attorney General, as he antagonized members of Congress and fellow cabinet members: his feud with Treasury Secretary McAdoo reached such proportions that they communicated only through intermediaries in the White House. When Wilson nominated McReynolds, his antisemitism (or other records of bigotry he exhibited later on) was not brought up in the Senate.
By August 1914, Wilson wanted McReynolds out of the cabinet, and he nominated him for the seat left vacant by the death of Justice Lurton. McReynolds was the first of Wilson’s three appointments to the Court. Wilson had a “tinge of doubt” about his nominee, but, because of his trust-busting bent, Wilson believed that McReynolds would be a progressive on the Court. His roots in the South may also have been a factor in his selection.
McReynolds ran into staunch opposition in the Senate, particularly from George W. Norris, who led the attack from a couch on the Senate floor. There was doubt about his qualifications, but he was backed by Democrats in the Senate, and, in ten days, he was confirmed, by a vote of 44 to 6, to a lifetime appointment on the high court. Henry J. Abraham calls him the first of five weak nominees to have “slipped through” the Senate. With no judicial experience, McReynolds, then fifty-two years of age, took the oath of office on September 5, 1914.
What do we know about McReynolds’ antisemitic beliefs and thoughts?
Unfortunately, I did not find sources which would have explored his antisemitism in particular, or its origin/causes. It is worth remembering though that McReynolds was also hostile in a similar (or even worse) manner to other groups: women and African-Americans. Negative views towards these groups were more prevalent and common in the American society at that time, and so it is hard to estimate how McReynolds would have compared to an average WASP born in the South in 1860s.
Source:
Lawrence, Albert. Biased justice: James C McReynolds of the Supreme Court of the United States, Journal of Supreme Court History 30(3) 2005, 244-270.