Ultimate Encomium

Manhattan's fusty old First National Bank is long on tradition. No employe or officer may smoke, swear or tell risque stories within its portals. Most desks are roll-tops and on their upper right-hand corners officers' hats are traditionally poised. Last week it looked as though another tradition were forming. For the retirement of First National's Chairman Jackson Eli Reynolds, a onetime lawyer who had no banking experience when he became First National president 17 years ago, gave complete command of Manhattan's ninth largest bank to President Leon Fraser, who also had no commercial banking experience when he became a First National vice president four years ago.

An adopted child who flunked out of Columbia, then went back to graduate with honors, Leon Fraser became successively a reporter, lawyer, winner of a Distinguished Service Medal in the World War, general counsel for the Dawes Plan and president of the Bank for International Settlements in Basel. This made him an expert at international finance, but left him ignorant of commercial banking (in its puny safe B. I. S. has only two coins, one of them a counterfeit, the other a 25-c- California gold piece). Chunky Leon Fraser left B. I. S. in 1935 for First National. Two years ago, at 47, he moved up to the presidency.

Last week, as the big U. S. banks issued their year-end statements, Mr. Fraser's First National reported 1938 earnings of $10,865,199, a fraction below 1937's $11,246,747. Others (given in thousands):

1937 1938

Bank of America (San Francisco) $19,203 $25,622

Chase National (Manhattan) 15,016 14,486

Continental Illinois (Chicago) 15,318 15,565

Manufacturers Trust (Manhattan) 7,360 6,652

Mercantile-Commerce (St. Louis) 1,010 1,014

National City (Manhattan) 9,584 10,547

In recent years big-time bankers have been accustomed to a certain amount of baiting at stockholders' meetings. Last week about the only traces of it came in occasional queries about loans to Richard Whitney or McKesson & Robbins.

Chase National's bristle-haired Winthrop Aldrich (also a lawyer before he was a banker) as usual took on the job of stating banking's case. Said he: "The fact that total commercial, industrial and agricultural loans have failed to rise in proportion to the great increase in demand deposits, has been cited by many as evidence of a reluctance on the part of the banking community to meet legitimate credit needs. ... In no true sense can credit be 'created' by banks. . . . There must be in the first place willing borrowers. . . ."

This drew hearty applause. But it remained for Manufacturers Trust's dignified Harvey Dow Gibson to win the ultimate in stockholder encomiums. When he concluded a lengthy explanation of the banking drought by expressing the belief that "there is, as we enter the new year, less cause for pessimism than there has been for some time," an unidentified stockholder rose to pay him tribute. After fumbling around for words, the hard-pressed man finally gushed: "If I were a woman, I'd say you're wonderful!"

This file is automatically generated by a robot program, so reader's discretion is required.